G.R. No.
149926 February 23, 2005
Additional readings..For next meeting pls read up to de Borja case.
Pls acknowledge. Thanks
· Union Bank v. Santibanez, G.R. No. 149926, February 23, 2005,
452 SCRA 228 (2005).
· Tanedo v CA 252 SCRA 89; G.R. No. 104482. January 22, 1996.
· Santos v Lumbao 519 SCRA 409; G.R. No. 169129. March 28,
2007.
· Parish priest of Victoria v Rigor 89 SCRA 493; G.R. No. L-22036.
April 30, 1979.
· Borromeo-Herrera v. Borromeo. 152 SCRA 171; G.R. No. L-
41171. July 23, 1987.
· Lorenzo v. Posadas, 64 Phil 353; G.R. No. 43082. June 18, 1937.
· Uson v del Rosario, 92 Phil 530; G.R. No. L-4963. January 29,
1953.
· Bonilla v Barcena, 71 SCRA 491; G.R. No. L-41715. June 18,
1976.
· De Borja v vda, de Borja, 46 SCRA 577; G.R. No. L-28040.
August 18, 1972.
· Butte v Manuel Uy & Sons, Inc., 4 SCRA 526; G.R. No. L-15499.
February 28, 1962 and reconsideration April 23, 1962.
· Reganon v Imperial, 22 SCRA 80; G.R. No. L-24434. January 17,
1968.
· Salvador v Sta, Maria, 20 SCRA 603; G.R. No. L-25952. June 30,
1967.
· Ramirez v Baltazar, 24 SCRA 918; G.R. No. L-25049. August 30,
1968.
· Gevero v IAC 189 SCRA 201; G.R. No. 77029. August 30, 1990.
· Locsin v CA 206 SCRA 383; G.R. No. 89783. February 19, 1992
· Emnace v CA 370 SCRA 431; G.R. No. 126334. November 23,
2001.
· Cayetano v Leonidas 129 SCRA 522; G.R. No. 54919. May 30,
1984.
Sent from my iPhone
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ
ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court which seeks the reversal of the Decision1 of the
Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831
affirming the dismissal2 of the petitioner’s complaint in Civil Case No.
18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and
Efraim M. Santibañez entered into a loan agreement3 in the amount of
₱128,000.00. The amount was intended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel
Tractor. In view thereof, Efraim and his son, Edmund, executed a
promissory note in favor of the FCCC, the principal sum payable in five
equal annual amortizations of ₱43,745.96 due on May 31, 1981 and
every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of ₱123,156.00. It was intended to
pay the balance of the purchase price of another unit of Ford 6600
Agricultural All-Purpose Diesel Tractor, with accessories, and one (1)
unit Howard Rotamotor Model AR 60K. Again, Efraim and his son,
Edmund, executed a promissory note for the said amount in favor of the
FCCC. Aside from such promissory note, they also signed a Continuing
Guaranty Agreement5 for the loan dated December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic
will.6 Subsequently in March 1981, testate proceedings commenced
before the RTC of Iloilo City, Branch 7, docketed as Special
Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs,
was appointed as the special administrator of the estate of the
decedent.7 During the pendency of the testate proceedings, the
surviving heirs, Edmund and his sister Florence Santibañez Ariola,
executed a Joint Agreement8 dated July 22, 1981, wherein they agreed
to divide between themselves and take possession of the three (3)
tractors; that is, two (2) tractors for Edmund and one (1) tractor for
Florence. Each of them was to assume the indebtedness of their late
father to FCCC, corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of
Liabilities9 was executed by and between FCCC and Union Savings and
Mortgage Bank, wherein the FCCC as the assignor, among others,
assigned all its assets and liabilities to Union Savings and Mortgage
Bank.
Demand letters10 for the settlement of his account were sent by
petitioner Union Bank of the Philippines (UBP) to Edmund, but the latter
failed to heed the same and refused to pay. Thus, on February 5, 1988,
the petitioner filed a Complaint11 for sum of money against the heirs of
Efraim Santibañez, Edmund and Florence, before the RTC of Makati
City, Branch 150, docketed as Civil Case No. 18909. Summonses were
issued against both, but the one intended for Edmund was not served
since he was in the United States and there was no information on his
address or the date of his return to the Philippines.12 Accordingly, the
complaint was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her
Answer13 and alleged that the loan documents did not bind her since
she was not a party thereto. Considering that the joint agreement
signed by her and her brother Edmund was not approved by the
probate court, it was null and void; hence, she was not liable to the
petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC
of Makati City, Branch 63.14 Consequently, trial on the merits ensued
and a decision was subsequently rendered by the court dismissing the
complaint for lack of merit. The decretal portion of the RTC decision
reads:
WHEREFORE, judgment is hereby rendered DISMISSING the
complaint for lack of merit.15
The trial court found that the claim of the petitioner should have been
filed with the probate court before which the testate estate of the late
Efraim Santibañez was pending, as the sum of money being claimed
was an obligation incurred by the said decedent. The trial court also
found that the Joint Agreement apparently executed by his heirs,
Edmund and Florence, on July 22, 1981, was, in effect, a partition of the
estate of the decedent. However, the said agreement was void,
considering that it had not been approved by the probate court, and that
there can be no valid partition until after the will has been probated. The
trial court further declared that petitioner failed to prove that it was the
now defunct Union Savings and Mortgage Bank to which the FCCC had
assigned its assets and liabilities. The court also agreed to the
contention of respondent Florence S. Ariola that the list of assets and
liabilities of the FCCC assigned to Union Savings and Mortgage Bank
did not clearly refer to the decedent’s account. Ruling that the joint
agreement executed by the heirs was null and void, the trial court held
that the petitioner’s cause of action against respondent Florence S.
Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to
the Court of Appeals (CA), assigning the following as errors of the trial
court:
1. THE COURT A QUO ERRED IN FINDING THAT THE
JOINT AGREEMENT (EXHIBIT A) SHOULD BE APPROVED
BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE
CAN BE NO VALID PARTITION AMONG THE HEIRS UNTIL
AFTER THE WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE
DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE
CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16
The petitioner asserted before the CA that the obligation of the
deceased had passed to his legitimate children and heirs, in this case,
Edmund and Florence; the unconditional signing of the joint agreement
marked as Exhibit "A" estopped respondent Florence S. Ariola, and that
she cannot deny her liability under the said document; as the
agreement had been signed by both heirs in their personal capacity, it
was no longer necessary to present the same before the probate court
for approval; the property partitioned in the agreement was not one of
those enumerated in the holographic will made by the deceased; and
the active participation of the heirs, particularly respondent Florence S.
Ariola, in the present ordinary civil action was tantamount to a waiver to
re-litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the
money claim of the petitioner should have been presented before the
probate court.17
The appellate court found that the appeal was not meritorious and held
that the petitioner should have filed its claim with the probate court as
provided under Sections 1 and 5, Rule 86 of the Rules of Court. It
further held that the partition made in the agreement was null and void,
since no valid partition may be had until after the will has been
probated. According to the CA, page 2, paragraph (e) of the holographic
will covered the subject properties (tractors) in generic terms when the
deceased referred to them as "all other properties." Moreover, the
active participation of respondent Florence S. Ariola in the case did not
amount to a waiver. Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the
Regional Trial Court of Makati City, Branch 63, is hereby AFFIRMED in
toto.
SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to
the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT
THE JOINT AGREEMENT SHOULD BE APPROVED BY THE
PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN
BE NO VALID PARTITION AMONG THE HEIRS OF THE LATE
EFRAIM SANTIBAÑEZ UNTIL AFTER THE WILL HAS BEEN
PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE
RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND
SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATE
EFRAIM SANTIBAÑEZ ON THE STRENGTH OF THE CONTINUING
GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONER-
APPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF
₱128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF
₱123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT
THE RESPONDENTS BOUND THEMSELVES JOINTLY AND
SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM
SANTIBAÑEZ IN FAVOR OF PETITIONER UNION BANK.19
The petitioner claims that the obligations of the deceased were
transmitted to the heirs as provided in Article 774 of the Civil Code;
there was thus no need for the probate court to approve the joint
agreement where the heirs partitioned the tractors owned by the
deceased and assumed the obligations related thereto. Since
respondent Florence S. Ariola signed the joint agreement without any
condition, she is now estopped from asserting any position contrary
thereto. The petitioner also points out that the holographic will of the
deceased did not include nor mention any of the tractors subject of the
complaint, and, as such was beyond the ambit of the said will. The
active participation and resistance of respondent Florence S. Ariola in
the ordinary civil action against the petitioner’s claim amounts to a
waiver of the right to have the claim presented in the probate
proceedings, and to allow any one of the heirs who executed the joint
agreement to escape liability to pay the value of the tractors under
consideration would be equivalent to allowing the said heirs to enrich
themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and
appellate courts failed to consider the fact that respondent Florence S.
Ariola and her brother Edmund executed loan documents, all
establishing the vinculum jurisor the legal bond between the late Efraim
Santibañez and his heirs to be in the nature of a solidary obligation.
Furthermore, the Promissory Notes dated May 31, 1980 and December
13, 1980 executed by the late Efraim Santibañez, together with his
heirs, Edmund and respondent Florence, made the obligation solidary
as far as the said heirs are concerned. The petitioner also proffers that,
considering the express provisions of the continuing guaranty
agreement and the promissory notes executed by the named
respondents, the latter must be held liable jointly and severally liable
thereon. Thus, there was no need for the petitioner to file its money
claim before the probate court. Finally, the petitioner stresses that both
surviving heirs are being sued in their respective personal capacities,
not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains
that the petitioner is trying to recover a sum of money from the
deceased Efraim Santibañez; thus the claim should have been filed with
the probate court. She points out that at the time of the execution of the
joint agreement there was already an existing probate proceedings of
which the petitioner knew about. However, to avoid a claim in the
probate court which might delay payment of the obligation, the petitioner
opted to require them to execute the said agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in
declaring that the agreement was null and void. She asserts that even if
the agreement was voluntarily executed by her and her brother
Edmund, it should still have been subjected to the approval of the court
as it may prejudice the estate, the heirs or third parties. Furthermore,
she had not waived any rights, as she even stated in her answer in the
court a quo that the claim should be filed with the probate court. Thus,
the petitioner could not invoke or claim that she is in estoppel.
Respondent Florence S. Ariola further asserts that she had not signed
any continuing guaranty agreement, nor was there any document
presented as evidence to show that she had caused herself to be
bound by the obligation of her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the
partition in the Agreement executed by the heirs is valid; b) whether or
not the heirs’ assumption of the indebtedness of the deceased is valid;
and c) whether the petitioner can hold the heirs liable on the obligation
of the deceased.1awphi1.nét
At the outset, well-settled is the rule that a probate court has the
jurisdiction to determine all the properties of the deceased, to determine
whether they should or should not be included in the inventory or list of
properties to be administered.20 The said court is primarily concerned
with the administration, liquidation and distribution of the estate.21
In our jurisdiction, the rule is that there can be no valid partition among
the heirs until after the will has been probated:
In testate succession, there can be no valid partition among the heirs
until after the will has been probated. The law enjoins the probate of a
will and the public requires it, because unless a will is probated and
notice thereof given to the whole world, the right of a person to dispose
of his property by will may be rendered nugatory. The authentication of
a will decides no other question than such as touch upon the capacity of
the testator and the compliance with those requirements or solemnities
which the law prescribes for the validity of a will.22
This, of course, presupposes that the properties to be partitioned are
the same properties embraced in the will.23 In the present case, the
deceased, Efraim Santibañez, left a holographic will24 which
contained, inter alia, the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be
discovered later after my demise, shall be distributed in the proportion
indicated in the immediately preceding paragraph in favor of Edmund
and Florence, my children.
We agree with the appellate court that the above-quoted is an all-
encompassing provision embracing all the properties left by the
decedent which might have escaped his mind at that time he was
making his will, and other properties he may acquire thereafter.
Included therein are the three (3) subject tractors. This being so, any
partition involving the said tractors among the heirs is not valid. The
joint agreement25 executed by Edmund and Florence, partitioning the
tractors among themselves, is invalid, specially so since at the time of
its execution, there was already a pending proceeding for the probate of
their late father’s holographic will covering the said tractors.
It must be stressed that the probate proceeding had already acquired
jurisdiction over all the properties of the deceased, including the three
(3) tractors. To dispose of them in any way without the probate court’s
approval is tantamount to divesting it with jurisdiction which the Court
cannot allow.26 Every act intended to put an end to indivision among co-
heirs and legatees or devisees is deemed to be a partition, although it
should purport to be a sale, an exchange, a compromise, or any other
transaction.27 Thus, in executing any joint agreement which appears to
be in the nature of an extra-judicial partition, as in the case at bar, court
approval is imperative, and the heirs cannot just divest the court of its
jurisdiction over that part of the estate. Moreover, it is within the
jurisdiction of the probate court to determine the identity of the heirs of
the decedent.28 In the instant case, there is no showing that the
signatories in the joint agreement were the only heirs of the decedent.
When it was executed, the probate of the will was still pending before
the court and the latter had yet to determine who the heirs of the
decedent were. Thus, for Edmund and respondent Florence S. Ariola to
adjudicate unto themselves the three (3) tractors was a premature act,
and prejudicial to the other possible heirs and creditors who may have a
valid claim against the estate of the deceased.
The question that now comes to fore is whether the heirs’ assumption of
the indebtedness of the decedent is binding. We rule in the negative.
Perusing the joint agreement, it provides that the heirs as parties
thereto "have agreed to divide between themselves and take
possession and use the above-described chattel and each of them to
assume the indebtedness corresponding to the chattel taken as herein
after stated which is in favor of First Countryside Credit Corp."29 The
assumption of liability was conditioned upon the happening of an event,
that is, that each heir shall take possession and use of their respective
share under the agreement. It was made dependent on the validity of
the partition, and that they were to assume the indebtedness
corresponding to the chattel that they were each to receive. The
partition being invalid as earlier discussed, the heirs in effect did not
receive any such tractor. It follows then that the assumption of liability
cannot be given any force and effect.
The Court notes that the loan was contracted by the
decedent.l^vvphi1.net The petitioner, purportedly a creditor of the late
Efraim Santibañez, should have thus filed its money claim with the
probate court in accordance with Section 5, Rule 86 of the Revised
Rules of Court, which provides:
Section 5. Claims which must be filed under the notice. If not filed
barred; exceptions. — All claims for money against the decedent,
arising from contract, express or implied, whether the same be due, not
due, or contingent, all claims for funeral expenses for the last sickness
of the decedent, and judgment for money against the decedent, must
be filed within the time limited in the notice; otherwise they are barred
forever, except that they may be set forth as counterclaims in any action
that the executor or administrator may bring against the claimants.
Where an executor or administrator commences an action, or
prosecutes an action already commenced by the deceased in his
lifetime, the debtor may set forth by answer the claims he has against
the decedent, instead of presenting them independently to the court as
herein provided, and mutual claims may be set off against each other in
such action; and if final judgment is rendered in favor of the defendant,
the amount so determined shall be considered the true balance against
the estate, as though the claim had been presented directly before the
court in the administration proceedings. Claims not yet due, or
contingent, may be approved at their present value.
The filing of a money claim against the decedent’s estate in the probate
court is mandatory.30 As we held in the vintage case of Py Eng Chong v.
Herrera:31
… This requirement is for the purpose of protecting the estate of the
deceased by informing the executor or administrator of the claims
against it, thus enabling him to examine each claim and to determine
whether it is a proper one which should be allowed. The plain and
obvious design of the rule is the speedy settlement of the affairs of the
deceased and the early delivery of the property to the distributees,
legatees, or heirs. `The law strictly requires the prompt presentation and
disposition of the claims against the decedent's estate in order to settle
the affairs of the estate as soon as possible, pay off its debts and
distribute the residue.32
Perusing the records of the case, nothing therein could hold private
respondent Florence S. Ariola accountable for any liability incurred by
her late father. The documentary evidence presented, particularly the
promissory notes and the continuing guaranty agreement, were
executed and signed only by the late Efraim Santibañez and his son
Edmund. As the petitioner failed to file its money claim with the probate
court, at most, it may only go after Edmund as co-maker of the
decedent under the said promissory notes and continuing guaranty, of
course, subject to any defenses Edmund may have as against the
petitioner. As the court had not acquired jurisdiction over the person of
Edmund, we find it unnecessary to delve into the matter further.
We agree with the finding of the trial court that the petitioner had not
sufficiently shown that it is the successor-in-interest of the Union
Savings and Mortgage Bank to which the FCCC assigned its assets and
liabilities.33 The petitioner in its complaint alleged that "by virtue of the
Deed of Assignment dated August 20, 1981 executed by and between
First Countryside Credit Corporation and Union Bank of the
Philippines…"34 However, the documentary evidence35 clearly reflects
that the parties in the deed of assignment with assumption of liabilities
were the FCCC, and the Union Savings and Mortgage Bank, with the
conformity of Bancom Philippine Holdings, Inc. Nowhere can the
petitioner’s participation therein as a party be found. Furthermore, no
documentary or testimonial evidence was presented during trial to show
that Union Savings and Mortgage Bank is now, in fact, petitioner Union
Bank of the Philippines. As the trial court declared in its decision:
… [T]he court also finds merit to the contention of defendant that
plaintiff failed to prove or did not present evidence to prove that Union
Savings and Mortgage Bank is now the Union Bank of the Philippines.
Judicial notice does not apply here. "The power to take judicial notice is
to [be] exercised by the courts with caution; care must be taken that the
requisite notoriety exists; and every reasonable doubt upon the subject
should be promptly resolved in the negative." (Republic vs. Court of
Appeals, 107 SCRA 504).36
This being the case, the petitioner’s personality to file the complaint is
wanting. Consequently, it failed to establish its cause of action. Thus,
the trial court did not err in dismissing the complaint, and the CA in
affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED.
The assailed Court of Appeals Decision is AFFIRMED. No costs.
SO ORDERED.
G.R. No. 104482 January 22, 1996
BELINDA TAÑEDO, for herself and in representation of her
brothers and sisters, and TEOFILA CORPUZ TAÑEDO,
representing her minor daughter VERNA TAÑEDO, petitioners,
vs.
THE COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND
TERESITA BARERA TAÑEDO,respondents.
DECISION
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the same real
property, who has preference in ownership? What is the probative value
of the lower court's finding of good faith in registration of such sales in
the registry of property? These are the main questions raised in this
Petition for review on certiorari under Rule 45 of the Rules of Court to
set aside and reverse the Decision1 of the Court of Appeals2 in CA-G.R.
CV NO. 24987 promulgated on September 26, 1991 affirming the
decision of the Regional Trial Court, Branch 63, Third Judicial Region,
Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying
reconsideration thereof, promulgated on May 27, 1992.
By the Court's Resolution on October 25, 1995, this case (along with
several others) was transferred from the First to the Third Division and
after due deliberation, the Court assigned it to the
undersigned ponente for the writing of this Decision.
The Facts
On October 20, 1962, Lazardo Tañedo executed a notarized deed of
absolute sale in favor of his eldest brother, Ricardo Tañedo, and the
latter's wife, Teresita Barera, private respondents herein, whereby he
conveyed to the latter in consideration of P1,500.00, "one hectare of
whatever share I shall have over Lot No. 191 of the cadastral survey of
Gerona, Province of Tarlac and covered by Title T-13829 of the
Register of Deeds of Tarlac", the said property being his "future
inheritance" from his parents (Exh. 1). Upon the death of his father
Matias, Lazaro executed an "Affidavit of Conformity" dated February 28,
1980 (Exh. 3) to "re-affirm, respect, acknowledge and validate the sale I
made in 1962." On January 13, 1981, Lazaro executed another
notarized deed of sale in favor of private respondents covering his
"undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 . .
. " (Exh. 4). He acknowledged therein his receipt of P10,000.00 as
consideration therefor. In February 1981, Ricardo learned that Lazaro
sold the same property to his children, petitioners herein, through a
deed of sale dated December 29, 1980 (Exh. E). On June 7, 1982,
private respondents recorded the Deed of Sale (Exh. 4) in their favor in
the Registry of Deeds and the corresponding entry was made in
Transfer Certificate of Title No. 166451 (Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus
damages) of the deeds of sale executed by Lazaro in favor of private
respondents covering the property inherited by Lazaro from his father.
Petitioners claimed that their father, Lazaro, executed an "Absolute
Deed of Sale" dated December 29, 1980 (Exit. E). Conveying to his ten
children his allotted portion tinder the extrajudicial partition executed by
the heirs of Matias, which deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing purportedly
prepared and signed by Matias dated December 28, 1978, stating that it
was his desire that whatever inheritance Lazaro would receive from him
should be given to his (Lazaro's) children (Exh. A); (2) a typewritten
document dated March 10, 1979 signed by Lazaro in the presence of
two witnesses, wherein he confirmed that he would voluntarily abide by
the wishes of his father, Matias, to give to his (Lazaro's) children all the
property he would inherit from the latter (Exh. B); and (3) a letter dated
January 1, 1980 of Lazaro to his daughter, Carmela, stating that his
share in the extrajudicial settlement of the estate of his father was
intended for his children, petitioners herein (Exh. C).
Private respondents, however presented in evidence a "Deed of
Revocation of a Deed of Sale" dated March 12, 1981 (Exh. 6), wherein
Lazaro revoked the sale in favor of petitioners for the reason that it was
"simulated or fictitious without any consideration whatsoever".
Shortly after the case a quo was filed, Lazaro executed a sworn
statement (Exh. G) which virtually repudiated the contents of the Deed
of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4)
in favor of private respondents. However, Lazaro testified that he sold
the property to Ricardo, and that it was a lawyer who induced him to
execute a deed of sale in favor of his children after giving him five pesos
(P5.00) to buy a "drink" (TSN September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that
petitioners failed "to adduce a proponderance of evidence to support
(their) claim." On appeal, the Court of Appeals affirmed the decision of
the trial court, ruling that the Deed of Sale dated January 13, 1981 (Exh.
9) was valid and that its registration in good faith vested title in said
respondents.
The Issues
Petitioners raised the following "errors" in the respondent Court, which
they also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale
of October 20, 1962 (Exhibit 7, Answer) is merely voidable or
annulable and not void ab initio pursuant to paragraph 2 of
Article 1347 of the New Civil Code involving as it does a
"future inheritance".
II. The trial court erred in holding that defendants-appellees
acted in good faith in registering the deed of sale of January
13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and
therefore ownership of the land in question passed on to
defendants-appellees.
III. The trial court erred in ignoring and failing to consider the
testimonial and documentary evidence of plaintiffs-appellants
which clearly established by preponderance of evidence that
they are indeed the legitimate and lawful owners of the
property in question.
IV. The decision is contrary to law and the facts of the case
and the conclusions drawn from the established facts are
illogical and off-tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13, 1981 (and
registration with the Registry of Property) of a deed of sale
covering the same property to the same buyers valid?
3. May this Court review the findings of the respondent Court
(a) holding that the buyers acted in good faith in registering
the said subsequent deed of sale and (b) in "failing to
consider petitioners' evidence"? Are the conclusions of the
respondent Court "illogical and off-tangent"?
The Court's Ruling
At the outset, let it be clear that the "errors" which are reviewable by this
Court in this petition for review on certiorariare only those allegedly
committed by the respondent Court of Appeals and not directly those of
the trial court, which is not a party here. The "assignment of errors" in
the petition quoted above are therefore totally misplaced, and for that
reason, the petition should be dismissed. But in order to give the parties
substantial justice we have decided to delve into the issues as above
re-stated. The errors attributed by petitioners to the latter (trial) court will
be discussed only insofar as they are relevant to the appellate court's
assailed Decision and Resolution.
The sale made in 1962 involving future inheritance is not really at issue
here. In context, the assailed Decision conceded "it may be legally
correct that a contract of sale of anticipated future inheritance is null and
void."3
But to remove all doubts, we hereby categorically rule that, pursuant to
Article 1347 of the Civil Code, "(n)o contract may be entered into upon a
future inheritance except in cases expressly authorized by law."
Consequently, said contract made in 1962 is not valid and cannot be
the source of any right nor the creator of any obligation between the
parties.
Hence, the "affidavit of conformity" dated February 28, 1980, insofar as
it sought to validate or ratify the 1962 sale, is also useless and, in the
words of the respondent Court, "suffers from the same infirmity." Even
private respondents in their memorandum4 concede this.
However, the documents that are critical to the resolution of this case
are: (a) the deed of sale of January 13, 1981 in favor of private
respondents covering Lazaro's undivided inheritance of one-twelfth
(1/12) share in Lot No. 191, which was subsequently registered on June
7, 1982; and (b) the deed of sale dated December 29, 1980 in favor of
petitioners covering the same property. These two documents were
executed after the death of Matias (and his spouse) and after a deed of
extra-judicial settlement of his (Matias') estate was executed, thus
vesting in Lazaro actual title over said property. In other words, these
dispositions, though conflicting, were no longer infected with the
infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13, 1981 was only
one-half hectare out of Lot No. 191, citing as authority the trial court's
decision. As earlier pointed out, what is on review in these proceedings
by this Court is the Court of Appeals' decision — which correctly
identified the subject matter of the January 13, 1981 sale to be the
entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the
same property disposed of on December 29, 1980 in favor of
petitioners.
Critical in determining which of these two deeds should be given effect
is the registration of the sale in favor of private respondents with the
register of deeds on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of vendees
in cases of multiple sales, as follows:
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person
who may have first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it in
the Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and,
in the absence thereof, to the person who presents the oldest
title, provided there is good faith.
The property in question is land, an immovable, and following the
above-quoted law, ownership shall belong to the buyer who in good
faith registers it first in the registry of property. Thus, although the deed
of sale in favor of private respondents was later than the one in favor of
petitioners, ownership would vest in the former because of the
undisputed fact of registration. On the other hand, petitioners have not
registered the sale to them at all.
Petitioners contend that they were in possession of the property and
that private respondents never took possession thereof. As between
two purchasers, the one who registered the sale in his favor has a
preferred right over the other who has not registered his title, even if the
latter is in actual possession of the immovable property.5
As to third issue, while petitioners conceded the fact of registration, they
nevertheless contended that it was done in bad faith. On this issue, the
respondent Court ruled;
Under the second assignment of error, plaintiffs-appellants
contend that defendants-appellees acted in bad faith when
they registered the Deed of Sale in their favor as appellee
Ricardo already knew of the execution of the deed of sale in
favor of the plaintiffs; appellants cite the testimony of plaintiff
 Belinda Tañedo to the effect that defendant Ricardo Tañedo
called her up on January 4 or 5, 1981 to tell her that he was
already the owner of the land in question "but the contract of
sale between our father and us were (sic) already
consumated" (pp. 9-10, tsn, January 6, 1984). This testimony
is obviously self-serving, and because it was a telephone
conversation, the deed of sale dated December 29, 1980 was
not shown; Belinda merely told her uncle that there was
already a document showing that plaintiffs are the owners (p.
80). Ricardo Tañedo controverted this and testified that he
learned for the first time of the deed of sale executed by
Lazaro in favor of his children "about a month or sometime in
February 1981" (p. 111, tsn, Nov. 28, 1984). . . .6
The respondent Court, reviewing the trial court's findings, refused to
overturn the latter's assessment of the testimonial evidence, as follows;
We are not prepared to set aside the finding of the lower court
upholding Ricardo Tañedo's testimony, as it involves a matter
of credibility of witnesses which the trial judge, who presided
at the hearing, was in a better position to resolve. (Court of
Appeals' Decision, p. 6.)
In this connection, we note the tenacious allegations made by
petitioners, both in their basic petition and in their memorandum, as
follows:
1. The respondent Court allegedly ignored the claimed fact
that respondent Ricardo "by fraud and deceit and with
foreknowledge" that the property in question had already
been sold to petitioners, made Lazaro execute the deed of
January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2
of the purchase price of P10,000.00 was paid at the time of
the execution of the deed of sale, contrary to the written
acknowledgment, thus showing bad faith;
3. There is allegedly sufficient evidence showing that the deed
of revocation of the sale in favor of petitioners "was tainted
with fraud or deceit."
4. There is allegedly enough evidence to show that private
respondents "took undue advantage over the weakness and
unschooled and pitiful situation of Lazaro Tañedo . . ." and
that respondent Ricardo Tañedo "exercised moral
ascendancy over his younger brother he being the eldest
brother and who reached fourth year college of law and at one
time a former Vice-Governor of Tarlac, while his younger
brother only attained first year high school . . . ;
5. The respondent Court erred in not giving credence to
petitioners' evidence, especially Lazaro
Tañedo's Sinumpaang Salaysay dated July 27, 1982 stating
that Ricardo Tañedo deceived the former in executing the
deed of sale in favor of private respondents.
To be sure, there are indeed many conflicting documents and
testimonies as well as arguments over their probative value and
significance. Suffice it to say, however, that all the above contentions
involve questions of fact, appreciation of evidence and credibility of
witnesses, which are not proper in this review. It is well-settled that the
Supreme Court is not a trier of facts. In petitions for review under Rule
45 of the Revised Rules of Court, only questions of law may be raised
and passed upon. Absent any whimsical or capricious exercise of
judgment, and unless the lack of any basis for the conclusions made by
the lower courts be amply demonstrated, the Supreme Court will not
disturb their findings. At most, it appears that petitioners have shown
that their evidence was not believed by both the trial and the appellate
courts, and that the said courts tended to give more credence to the
evidence presented by private respondents. But this in itself is not a
reason for setting aside such findings. We are far from convinced that
both courts gravely abused their respective authorities and judicial
prerogatives.
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and
Goldrock Construction and Development Corp.7
The Court has consistently held that the factual findings of the trial
court, as well as the Court of Appeals, are final and conclusive and may
not be reviewed on appeal. Among the exceptional circumstances
where a reassessment of facts found by the lower courts is allowed are
when the conclusion is a finding grounded entirely on speculation,
surmises or conjectures; when the inference made is manifestly absurd,
mistaken or impossible; when there is grave abuse of discretion in the
appreciation of facts; when the judgment is premised on a
misapprehension of facts; when the findings went beyond the issues of
the case and the same are contrary to the admissions of both appellant
and appellee. After a careful study of the case at bench, we find none of
the above grounds present to justify the re-evaluation of the findings of
fact made by the courts below.
In the same vein, the ruling in the recent case of South Sea Surety and
Insurance Company, Inc. vs. Hon. Court of Appeals, et al.8 is equally
applicable to the present case:
We see no valid reason to discard the factual conclusions of
the appellate court. . . . (I)t is not the function of this Court to
assess and evaluate all over again the evidence, testimonial
and documentary, adduced by the parties, particularly where,
such as here, the findings of both the trial court and the
appellate court on the matter coincide. (emphasis supplied)
WHEREFORE, the petition is DENIED and the assailed Decision of the
Court of Appeals is AFFIRMED. No Costs.
SO ORDERED.
G.R. No. 169129 March 28, 2007
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS,
SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F.
SANTOS, and TADEO F. SANTOS, Petitioners,
vs.
SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of
the 1997 Revised Rules of Civil Procedure seeking to annul and set
aside the Decision1 and Resolution2 of the Court of Appeals in CA-G.R.
CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao
v. Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F.
Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F.
Santos, dated 8 June 2005 and 29 July 2005, respectively, which
granted the appeal filed by herein respondents Spouses Jose Lumbao
and Proserfina Lumbao (Spouses Lumbao) and ordered herein
petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses
Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and
Tadeo F. Santos to reconvey to respondents Spouses Lumbao the
subject property and to pay the latter attorney’s fees and litigation
expenses, thus, reversing the Decision3 of the Regional Trial Court
(RTC) of Pasig City, dated 17 June 1998 which dismissed the
Complaint for Reconveyance with Damages filed by respondents
Spouses Lumbao for lack of merit.
Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed
Santos, are the legitimate and surviving heirs of the late Rita Catoc
Santos (Rita), who died on 20 October 1985. The other petitioners
Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.
Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are
the alleged owners of the 107-square meter lot (subject property), which
they purportedly bought from Rita during her lifetime.
The facts of the present case are as follows:
On two separate occasions during her lifetime, Rita sold to respondents
Spouses Lumbao the subject property which is a part of her share in the
estate of her deceased mother, Maria Catoc (Maria), who died intestate
on 19 September 1978. On the first occasion, Rita sold 100 square
meters of her inchoate share in her mother’s estate through a document
denominated as "Bilihan ng Lupa," dated 17 August
1979.4 Respondents Spouses Lumbao claimed the execution of the
aforesaid document was witnessed by petitioners Virgilio and Tadeo, as
shown by their signatures affixed therein. On the second occasion, an
additional seven square meters was added to the land as evidenced by
a document also denominated as "Bilihan ng Lupa," dated 9 January
1981.5
After acquiring the subject property, respondents Spouses Lumbao took
actual possession thereof and erected thereon a house which they have
been occupying as exclusive owners up to the present. As the exclusive
owners of the subject property, respondents Spouses Lumbao made
several verbal demands upon Rita, during her lifetime, and thereafter
upon herein petitioners, for them to execute the necessary documents
to effect the issuance of a separate title in favor of respondents
Spouses Lumbao insofar as the subject property is concerned.
Respondents Spouses Lumbao alleged that prior to her death, Rita
informed respondent Proserfina Lumbao she could not deliver the title
to the subject property because the entire property inherited by her and
her co-heirs from Maria had not yet been partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting
fraudulently and in conspiracy with one another, executed a Deed of
Extrajudicial Settlement,6 adjudicating and partitioning among
themselves and the other heirs, the estate left by Maria, which included
the subject property already sold to respondents Spouses Lumbao and
now covered by TCT No. 817297 of the Registry of Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through counsel,
sent a formal demand letter8 to petitioners but despite receipt of such
demand letter, petitioners still failed and refused to reconvey the subject
property to the respondents Spouses Lumbao. Consequently, the latter
filed a Complaint for Reconveyance with Damages9 before the RTC of
Pasig City.
Petitioners filed their Answer denying the allegations that the subject
property had been sold to the respondents Spouses Lumbao. They
likewise denied that the Deed of Extrajudicial Settlement had been
fraudulently executed because the same was duly published as
required by law. On the contrary, they prayed for the dismissal of the
Complaint for lack of cause of action because respondents Spouses
Lumbao failed to comply with the Revised Katarungang Pambarangay
Law under Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, which repealed Presidential Decree No.
150810 requiring first resort to barangay conciliation.
Respondents Spouses Lumbao, with leave of court, amended their
Complaint because they discovered that on 16 February 1990, without
their knowledge, petitioners executed a Deed of Real Estate Mortgage
in favor of Julieta S. Esplana for the sum of ₱30,000.00. The said Deed
of Real Estate Mortgage was annotated at the back of TCT No. PT-
81729 on 26 April 1991. Also, in answer to the allegation of the
petitioners that they failed to comply with the mandate of the Revised
Katarungang Pambarangay Law, respondents Spouses Lumbao said
that the Complaint was filed directly in court in order that prescription or
the Statute of Limitations may not set in.
During the trial, respondents Spouses Lumbao presented Proserfina
Lumbao and Carolina Morales as their witnesses, while the petitioners
presented only the testimony of petitioner Virgilio.
The trial court rendered a Decision on 17 June 1998, the dispositive
portion of which reads as follows:
Premises considered, the instant complaint is hereby denied for lack of
merit.
Considering that [petitioners] have incurred expenses in order to protect
their interest, [respondents spouses Lumbao] are hereby directed to pay
[petitioners], to wit: 1) the amount of ₱30,000.00 as attorney’s fees and
litigation expenses, and 2) costs of the suit.11
Aggrieved, respondents Spouses Lumbao appealed to the Court of
Appeals. On 8 June 2005, the appellate court rendered a Decision,
thus:
WHEREFORE, premises considered, the present appeal is hereby
GRANTED. The appealed Decision dated June 17, 1998 of the
Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is
hereby REVERSED and SET ASIDE. A new judgment is hereby
entered ordering [petitioners] to reconvey 107 square meters of the
subject [property] covered by TCT No. PT-81729 of the Registry of
Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses
Lumbao] the sum of ₱30,000.00 for attorney’s fees and litigation
expenses.
No pronouncement as to costs.12
Dissatisfied, petitioners filed a Motion for Reconsideration of the
aforesaid Decision but it was denied in the Resolution of the appellate
court dated 29 July 2005 for lack of merit.
Hence, this Petition.
The grounds relied upon by the petitioners are the following:
I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN
REVERSING THE DECISION OF THE TRIAL COURT, THEREBY
CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO
COURTS.
II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT
[PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN
NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY
CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM.
III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN
EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT"
DATED [2 MAY 1986].
IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND
TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17
AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY
EXECUTED BY THE LATE RITA CATOC.
V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S]
ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE
SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS
THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY
1981].
VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S]
COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR
NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS
AMENDED BY Republic Act No. 7160.
VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR
IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO]
SHOULD BE HELD LIABLE FOR PETITIONERS’ CLAIM FOR
DAMAGES AND ATTORNEY[‘]S FEES.
Petitioners ask this Court to scrutinize the evidence presented in this
case, because they claim that the factual findings of the trial court and
the appellate court are conflicting. They allege that the findings of fact
by the trial court revealed that petitioners Virgilio and Tadeo did not
witness the execution of the documents known as "Bilihan ng Lupa";
hence, this finding runs counter to the conclusion made by the appellate
court. And even assuming that they were witnesses to the aforesaid
documents, still, respondents Spouses Lumbao were not entitled to the
reconveyance of the subject property because they were guilty of
laches for their failure to assert their rights for an unreasonable length of
time. Since respondents Spouses Lumbao had slept on their rights for a
period of more than 12 years reckoned from the date of execution of the
second "Bilihan ng Lupa," it would be unjust and unfair to the petitioners
if the respondents will be allowed to recover the subject property.
Petitioners allege they are in good faith in executing the Deed of
Extrajudicial Settlement because even respondents Spouses Lumbao’s
witness, Carolina Morales, testified that neither petitioner Virgilio nor
petitioner Tadeo was present during the execution of the "Bilihan ng
Lupa," dated 17 August 1979 and 9 January 1981. Petitioners affirm
that the Deed of Extrajudicial Settlement was published in a newspaper
of general circulation to give notice to all creditors of the estate subject
of partition to contest the same within the period prescribed by law.
Since no claimant appeared to interpose a claim within the period
allowed by law, a title to the subject property was then issued in favor of
the petitioners; hence, they are considered as holders in good faith and
therefore cannot be barred from entering into any subsequent
transactions involving the subject property.
Petitioners also contend that they are not bound by the documents
denominated as "Bilihan ng Lupa" because the same were null and void
for the following reasons: 1) for being falsified documents because one
of those documents made it appear that petitioners Virgilio and Tadeo
were witnesses to its execution and that they appeared personally
before the notary public, when in truth and in fact they did not; 2) the
identities of the properties in the "Bilihan ng Lupa," dated 17 August
1979 and 9 January 1981 in relation to the subject property in litigation
were not established by the evidence presented by the respondents
Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to
lay their claim over the subject property had already been barred
through estoppel by laches; and 4) the respondents Spouses Lumbao’s
claim over the subject property had already prescribed.
Finally, petitioners claim that the Complaint for Reconveyance with
Damages filed by respondents Spouses Lumbao was dismissible
because they failed to comply with the mandate of Presidential Decree
No. 1508, as amended by Republic Act No. 7160, particularly Section
412 of Republic Act No. 7160.
Given the foregoing, the issues presented by the petitioners may be
restated as follows:
I. Whether or not the Complaint for Reconveyance with
Damages filed by respondents spouses Lumbao is
dismissible for their failure to comply with the mandate of the
Revised Katarungang Pambarangay Law under R.A. No.
7160.
II. Whether or not the documents known as "Bilihan ng Lupa"
are valid and enforceable, thus, they can be the bases of the
respondents spouses Lumbao’s action for reconveyance with
damages.
III. Whether or not herein petitioners are legally bound to
comply with the "Bilihan ng Lupa" dated 17 August 1979 and
9 January 1981 and consequently, reconvey the subject
property to herein respondents spouses Lumbao.
It is well-settled that in the exercise of the Supreme Court’s power of
review, the court is not a trier of facts and does not normally undertake
the re-examination of the evidence presented by the contending parties
during the trial of the case considering that the findings of fact of the
Court of Appeals are conclusive and binding on the Court.13 But, the
rule is not without exceptions. There are several recognized
exceptions14 in which factual issues may be resolved by this Court. One
of these exceptions is when the findings of the appellate court are
contrary to those of the trial court. This exception is present in the case
at bar.
Going to the first issue presented in this case, it is the argument of the
petitioners that the Complaint for Reconveyance with Damages filed by
respondents Spouses Lumbao should be dismissed for failure to comply
with the barangay conciliation proceedings as mandated by the Revised
Katarungang Pambarangay Law under Republic Act No. 7160. This
argument cannot be sustained.
Section 408 of the aforesaid law and Administrative Circular No. 14-
9315 provide that all disputes between parties actually residing in the
same city or municipality are subject to barangay conciliation. A prior
recourse thereto is a pre-condition before filing a complaint in court or
any government offices. Non-compliance with the said condition
precedent could affect the sufficiency of the plaintiff’s cause of action
and make his complaint vulnerable to dismissal on ground of lack of
cause of action or prematurity; but the same would not prevent a court
of competent jurisdiction from exercising its power of adjudication over
the case before it, where the defendants failed to object to such
exercise of jurisdiction.16
While it is true that the present case should first be referred to the
Barangay Lupon for conciliation because the parties involved herein
actually reside in the same city (Pasig City) and the dispute between
them involves a real property, hence, the said dispute should have been
brought in the city in which the real property, subject matter of the
controversy, is located, which happens to be the same city where the
contending parties reside. In the event that respondents Spouses
Lumbao failed to comply with the said condition precedent, their
Complaint for Reconveyance with Damages can be dismissed. In this
case, however, respondents Spouses Lumbao’s non-compliance with
the aforesaid condition precedent cannot be considered fatal. Although
petitioners alleged in their answer that the Complaint for Reconveyance
with Damages filed by respondents spouses Lumbao should be
dismissed for their failure to comply with the condition precedent, which
in effect, made the complaint prematurely instituted and the trial court
acquired no jurisdiction to hear the case, yet, they did not file a Motion
to Dismiss the said complaint.
Emphasis must be given to the fact that the petitioners could have
prevented the trial court from exercising jurisdiction over the case had
they filed a Motion to Dismiss. However, instead of doing so, they
invoked the very same jurisdiction by filing an answer seeking an
affirmative relief from it. Worse, petitioners actively participated in the
trial of the case by presenting their own witness and by cross-examining
the witnesses presented by the respondents Spouses Lumbao. It is
elementary that the active participation of a party in a case pending
against him before a court is tantamount to recognition of that court’s
jurisdiction and a willingness to abide by the resolution of the case
which will bar said party from later on impugning the court’s
jurisdiction.17 It is also well-settled that the non-referral of a case for
barangay conciliation when so required under the law is not
jurisdictional in nature and may therefore be deemed waived if not
raised seasonably in a motion to dismiss.18 Hence, herein petitioners
can no longer raise the defense of non-compliance with the barangay
conciliation proceedings to seek the dismissal of the complaint filed by
the respondents Spouses Lumbao, because they already waived the
said defense when they failed to file a Motion to Dismiss.
As regards the second issue, petitioners maintain that the "Bilihan ng
Lupa," dated 17 August 1979 and 9 January 1981 are null and void for
being falsified documents as it is made to appear that petitioners Virgilio
and Tadeo were present in the execution of the said documents and
that the identities of the properties in those documents in relation to the
subject property has not been established by the evidence of the
respondents Spouses Lumbao. Petitioners also claim that the
enforceability of those documents is barred by prescription of action and
laches.
It is the petitioners’ incessant barking that the "Bilihan ng Lupa"
documents dated 17 August 1979 and 9 January 1981 were falsified
because it was made to appear that petitioners Virgilio and Tadeo were
present in the executions thereof, and their allegation that even
respondents Spouses Lumbao’s witness Carolina Morales proved that
said petitioners were not present during the execution of the
aforementioned documents. This is specious.
Upon examination of the aforesaid documents, this Court finds that in
the "Bilihan ng Lupa," dated 17 August 1979, the signatures of
petitioners Virgilio and Tadeo appeared thereon. Moreover, in
petitioners’ Answer and Amended Answer to the Complaint for
Reconveyance with Damages, both petitioners Virgilio and Tadeo made
an admission that indeed they acted as witnesses in the execution of
the "Bilihan ng Lupa," dated 17 August 1979.19 However, in order to
avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in
his cross-examination, denied having knowledge of the sale transaction
and claimed that he could not remember the same as well as his
appearance before the notary public due to the length of time that had
passed. Noticeably, petitioner Virgilio did not categorically deny having
signed the "Bilihan ng Lupa," dated 17 August 1979 and in support
thereof, his testimony in the cross-examination propounded by the
counsel of the respondents Spouses Lumbao is quoted hereunder:
ATTY. CHIU:
Q. Now, you said, Mr. Witness…Virgilio Santos, that you don’t know
about this document which was marked as Exhibit "A" for the
[respondents spouses Lumbao]?
ATTY. BUGARING:
The question is misleading, your Honor. Counsel premised the question
that he does not have any knowledge but not that he does not know.
ATTY. CHIU:
Q. Being… you are one of the witnesses of this document? [I]s it not?
WITNESS:
A. No, sir.
Q. I am showing to you this document, there is a signature at the left
hand margin of this document Virgilio Santos, will you please go over
the same and tell the court whose signature is this?
A. I don’t remember, sir, because of the length of time that had passed.
Q. But that is your signature?
A. I don’t have eyeglasses… My signature is different.
Q. You never appeared before this notary public Apolinario Mangahas?
A. I don’t remember.20
As a general rule, facts alleged in a party’s pleading are deemed
admissions of that party and are binding upon him, but this is not an
absolute and inflexible rule. An answer is a mere statement of fact
which the party filing it expects to prove, but it is not evidence.21 And in
spite of the presence of judicial admissions in a party’s pleading, the
trial court is still given leeway to consider other evidence
presented.22 However, in the case at bar, as the Court of Appeals
mentioned in its Decision, "[herein petitioners] had not adduced any
other evidence to override the admission made in their [A]nswer that
[petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa
dated 17 August 1979] except that they were just misled as to the
purpose of the document, x x x."23 Virgilio’s answers were unsure and
quibbled. Hence, the general rule that the admissions made by a party
in a pleading are binding and conclusive upon him applies in this case.
On the testimony of respondents Spouses Lumbao’s witness Carolina
Morales, this Court adopts the findings made by the appellate court.
Thus -
[T]he trial court gave singular focus on her reply to a question during
cross-examination if the [petitioners Virgilio and Tadeo] were not with
her and the vendor [Rita] during the transaction. It must be pointed out
that earlier in the direct examination of said witness, she confirmed that
[respondents spouses Lumbao] actually bought the lot from [Rita]
("nagkabilihan"). Said witness positively identified and confirmed the
two (2) documents evidencing the sale in favor of [respondents spouse
Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio
and Tadeo] were not with them during the transaction does not
automatically imply that [petitioners Virgilio and Tadeo] did not at any
time sign as witnesses as to the deed of sale attesting to their mother’s
voluntary act of selling a portion of her share in her deceased mother’s
property. The rule is that testimony of a witness must be considered and
calibrated in its entirety and not by truncated portions thereof or isolated
passages therein.24
Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979
and 9 January 1981 were duly notarized before a notary public. It is
well-settled that a document acknowledged before a notary public is a
public document25that enjoys the presumption of regularity. It is a prima
facie evidence of the truth of the facts stated therein and a conclusive
presumption of its existence and due execution.26 To overcome this
presumption, there must be presented evidence that is clear and
convincing. Absent such evidence, the presumption must be
upheld.27 In addition, one who denies the due execution of a deed
where one’s signature appears has the burden of proving that contrary
to the recital in the jurat, one never appeared before the notary public
and acknowledged the deed to be a voluntary act. Nonetheless, in the
present case petitioners’ denials without clear and convincing evidence
to support their claim of fraud and falsity were not sufficient to overthrow
the above-mentioned presumption; hence, the authenticity, due
execution and the truth of the facts stated in the aforesaid "Bilihan ng
Lupa" are upheld.
The defense of petitioners that the identities of the properties described
in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in
relation to the subject property were not established by respondents
Spouses Lumbao’s evidence is likewise not acceptable.
It is noteworthy that at the time of the execution of the documents
denominated as "Bilihan ng Lupa," the entire property owned by Maria,
the mother of Rita, was not yet divided among her and her co-heirs and
so the description of the entire estate is the only description that can be
placed in the "Bilihan ng Lupa, dated 17 August 1979 and 9 January
1981" because the exact metes and bounds of the subject property sold
to respondents Spouses Lumbao could not be possibly determined at
that time. Nevertheless, that does not make the contract of sale
between Rita and respondents Spouses Lumbao invalid because both
the law and jurisprudence have categorically held that even while an
estate remains undivided, co-owners have each full ownership of their
respective aliquots or undivided shares and may therefore alienate,
assign or mortgage them.28 The co-owner, however, has no right to sell
or alienate a specific or determinate part of the thing owned in common,
because such right over the thing is represented by an aliquot or ideal
portion without any physical division. In any case, the mere fact that the
deed purports to transfer a concrete portion does not per se render the
sale void. The sale is valid, but only with respect to the aliquot share of
the selling co-owner. Furthermore, the sale is subject to the results of
the partition upon the termination of the co-ownership.29
In the case at bar, when the estate left by Maria had been partitioned on
2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107-
square meter lot sold by the mother of the petitioners to respondents
Spouses Lumbao should be deducted from the total lot, inherited by
them in representation of their deceased mother, which in this case
measures 467 square meters. The 107-square meter lot already sold to
respondents Spouses Lumbao can no longer be inherited by the
petitioners because the same was no longer part of their inheritance as
it was already sold during the lifetime of their mother.
Likewise, the fact that the property mentioned in the two "Bilihan ng
Lupa" documents was described as "a portion of a parcel of land
covered in Tax Declarations No. A-018-01674," while the subject matter
of the Deed of Extrajudicial Settlement was the property described in
Transfer Certificate of Title (TCT) No. 3216 of the Registry of Deeds of
the Province of Rizal in the name of Maria is of no moment because in
the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is
clear that there was only one estate left by Maria upon her death. And
this fact was not refuted by the petitioners. Besides, the property
described in Tax Declaration No. A-018-01674 and the property
mentioned in TCT No. 3216 are both located in Barrio Rosario,
Municipality of Pasig, Province of Rizal, and almost have the same
boundaries. It is, thus, safe to state that the property mentioned in Tax
Declaration No. A-018-01674 and in TCT No. 3216 are one and the
same.
The defense of prescription of action and laches is likewise unjustifiable.
In an action for reconveyance, the decree of registration is respected as
incontrovertible. What is sought instead is the transfer of the property or
its title which has been wrongfully or erroneously registered in another
person’s name to its rightful or legal owner, or to the one with a better
right. It is, indeed, true that the right to seek reconveyance of registered
property is not absolute because it is subject to extinctive prescription.
However, when the plaintiff is in possession of the land to be
reconveyed, prescription cannot set in. Such an exception is based on
the theory that registration proceedings could not be used as a shield
for fraud or for enriching a person at the expense of another.30
In the case at bar, the right of the respondents Spouses Lumbao to
seek reconveyance does not prescribe because the latter have been
and are still in actual possession and occupation as owners of the
property sought to be reconveyed, which fact has not been refuted nor
denied by the petitioners. Furthermore, respondents Spouses Lumbao
cannot be held guilty of laches because from the very start that they
bought the 107-square meter lot from the mother of the petitioners, they
have constantly asked for the transfer of the certificate of title into their
names but Rita, during her lifetime, and the petitioners, after the death
of Rita, failed to do so on the flimsy excuse that the lot had not been
partitioned yet. Inexplicably, after the partition of the entire estate of
Maria, petitioners still included the 107-square meter lot in their
inheritance which they divided among themselves despite their
knowledge of the contracts of sale between their mother and the
respondents Spouses Lumbao.
Under the above premises, this Court holds that the "Bilihan ng Lupa"
documents dated 17 August 1979 and 9 January 1981 are valid and
enforceable and can be made the basis of the respondents Spouses
Lumbao’s action for reconveyance. The failure of respondents Spouses
Lumbao to have the said documents registered does not affect its
validity and enforceability. It must be remembered that registration is not
a requirement for validity of the contract as between the parties, for the
effect of registration serves chiefly to bind third persons. The principal
purpose of registration is merely to notify other persons not parties to a
contract that a transaction involving the property had been entered into.
Where the party has knowledge of a prior existing interest which is
unregistered at the time he acquired a right to the same land, his
knowledge of that prior unregistered interest has the effect of
registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated
17 August 1979 and 9 January 1981, being valid and enforceable,
herein petitioners are bound to comply with their provisions. In short,
such documents are absolutely valid between and among the parties
thereto.
Finally, the general rule that heirs are bound by contracts entered into
by their predecessors-in-interest applies in the present case. Article
131132 of the NCC is the basis of this rule. It is clear from the said
provision that whatever rights and obligations the decedent have over
the property were transmitted to the heirs by way of succession, a mode
of acquiring the property, rights and obligations of the decedent to the
extent of the value of the inheritance of the heirs.33 Thus, the heirs
cannot escape the legal consequence of a transaction entered into by
their predecessor-in-interest because they have inherited the property
subject to the liability affecting their common ancestor. Being heirs,
there is privity of interest between them and their deceased mother.
They only succeed to what rights their mother had and what is valid and
binding against her is also valid and binding as against them. The death
of a party does not excuse nonperformance of a contract which involves
a property right and the rights and obligations thereunder pass to the
personal representatives of the deceased. Similarly, nonperformance is
not excused by the death of the party when the other party has a
property interest in the subject matter of the contract.34
In the end, despite the death of the petitioners’ mother, they are still
bound to comply with the provisions of the "Bilihan ng Lupa," dated 17
August 1979 and 9 January 1981. Consequently, they must reconvey to
herein respondents Spouses Lumbao the 107-square meter lot which
they bought from Rita, petitioners’ mother. And as correctly ruled by the
appellate court, petitioners must pay respondents Spouses Lumbao
attorney’s fees and litigation expenses for having been compelled to
litigate and incur expenses to protect their interest.35 On this matter, we
do not find reasons to reverse the said findings.
WHEREFORE, premises considered, the instant Petition is hereby
DENIED. The Decision and Resolution of the Court of Appeals dated 8
June 2005 and 29 July 2005, respectively, are hereby AFFIRMED.
Herein petitioners are ordered to reconvey to respondents Spouses
Lumbao the subject property and to pay the latter attorney’s fees and
litigation expenses. Costs against petitioners.
SO ORDERED.
G.R. No. L-22036 April 30, 1979
TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL
RIGOR. THE PARISH PRIEST OF THE ROMAN CATHOLIC CHURCH
OF VICTORIA, TARLAC, petitioner-appellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE
RIGOR and JOVITA ESCOBAR DE FAUSTO, respondents-appellees.
D. Tañedo, Jr. for appellants.
J. Palanca, Sr. for appellee.
AQUINO, J.:
This case is about the efficaciousness or enforceability of a devise of
ricelands located at Guimba, Nueva Ecija, with a total area of around
forty- four hectares That devise was made in the will of the late Father
Pascual Rigor, a native of Victoria Tarlac, in favor of his nearest male
relative who would study for the priesthood.
The parish priest of Victoria, who claimed to be a trustee of the said
lands, appealed to this Court from the decision of the Court of Appeals
affirming the order of the probate court declaring that the said devise
was inoperative (Rigor vs. Parish Priest of the Roman Catholic Church
of Victoria, Tarlac, CA-G.R. No. 24319-R, August 1, 1963).
The record discloses that Father Rigor, the parish priest of Pulilan,
Bulacan, died on August 9, 1935, leaving a will executed on October
29, 1933 which was probated by the Court of First Instance of Tarlac in
its order of December 5, 1935. Named as devisees in the will were the
Title
testators nearest relatives, namely, his three sisters: Florencia Rigor-
No.
Escobar, Belina Rigor-Manaloto and Nestora Rigor-Quiambao. The
testator gave a devise to his cousin, Fortunato Gamalinda. T-
In addition, the will contained the following controversial bequest
6530
(paragraphing supplied to facilitate comprehension of the testamentary
provisions): T-
Doy y dejo como legado CUATRO (4) PARCELAS 6548
de terreno palayeros situados en el municipiooo de
Guimba de la provinciaaa de NUEVA ECIJA, T- cuyo
num. de CERTIFICADO DE TRANSFERENCIA 6525 DE
TITULO SON; — Titulo Num. 6530, mide 16,249 m.
cuadrados de superficie Titulo Num. 6548, T- mide
242,998 m. cuadrados de superficie y annual6521 6525,
mide 62,665 m. cuadrados de superficie; y Titulo
Num. 6521, mide 119,251 m. cuadrados de
superficie; a cualquier pariente mio varon mas
cercano que estudie la carrera eclesiatica hasta
ordenarse de Presbiterado o sea Sacerdote; las
condiciones de estate legado son;
(1.a) Prohibe en absoluto la venta de estos terrenos
arriba situados objectos de este legado;
(2.a) Que el legatario pariente mio mas cercano
tendra derecho de empezar a gozar y administrar
de este legado al principiar a curzar la Sagrada
Teologio, y ordenado de Sacerdote, hasta su
muerte; pero que pierde el legatario este derecho
de administrar y gozar de este legado al dejar de
continuar sus estudios para ordenarse de
Presbiterado (Sacerdote).
Que el legatario una vez Sacerdote ya estara
obligado a celebrar cada año VEINTE (20) Misas
rezadas en sufragio de mi alma y de mis padres
difuntos, y si el actual legatario, quedase
excomulgado, IPSO FACTO se le despoja este
legado, y la administracion de esto pasara a cargo
del actual Parroco y sus sucesores de la Iglecia
Catolica de Victoria, Tarlac.
Y en intervalo de tiempo que no haya legatario
acondicionado segun lo arriba queda expresado,
pasara la administracion de este legado a cargo del
actual Parroco Catolico y sus sucesores, de
Victoria, Tarlac.
El Parroco administrador de estate legado,
acumulara, anualmente todos los productos que
puede tener estate legado, ganando o sacando de
los productos anuales el CINCO (5) por ciento para
su administracion, y los derechos correspondientes
de las VEINTE (20) Misas rezadas que debiera el
Parroco celebrar cada año, depositando todo lo
restante de los productos de estate legado, en un
banco, a nombre de estate legado.
To implement the foregoing bequest, the administratix in 1940
submitted a project containing the following item:
5. LEGACY OF THE CHURCH
That it be adjudicated in favor of the legacy
purported to be given to the nearest male relative
who shall take the priesthood, and in the interim to
be administered by the actual Catholic Priest of the
Roman Catholic Church of Victoria, Tarlac,
Philippines, or his successors, the real properties
hereinbelow indicated, to wit:
Lot Area in Tax
No. Has. Dec.
3663 1.6249 18740
3445- 24.2998 18730
C
3670 6.2665 18736
3666 11.9251 18733
Total amount and value — 44.1163 P13,090.00
Judge Roman A. Cruz in his order of August 15, 1940, approving the
project of partition, directed that after payment of the obligations of the
estate (including the sum of P3,132.26 due to the church of the Victoria
parish) the administratrix should deliver to the devisees their respective
shares.
It may be noted that the administratrix and Judge Cruz did not bother to
analyze the meaning and implications of Father Rigor's bequest to his
nearest male relative who would study for the priesthood. Inasmuch as
no nephew of the testator claimed the devise and as the administratrix
and the legal heirs believed that the parish priest of Victoria had no right
to administer the ricelands, the same were not delivered to that
ecclesiastic. The testate proceeding remained pending.
About thirteen years after the approval of the project of partition, or on
February 19, 1954, the parish priest of Victoria filed in the pending
testate proceeding a petition praying for the appointment of a new
administrator (succeeding the deceased administration Florencia Rigor),
who should deliver to the church the said ricelands, and further praying
that the possessors thereof be ordered to render an accounting of the
fruits. The probate court granted the petition. A new administrator was
appointed. On January 31, 1957 the parish priest filed another petition
for the delivery of the ricelands to the church as trustee.
The intestate heirs of Father Rigor countered with a petition dated
March 25, 1957 praying that the bequest be d inoperative and that they
be adjudged as the persons entitled to the said ricelands since, as
admitted by the parish priest of Victoria, "no nearest male relative of"
the testator "has ever studied for the priesthood" (pp. 25 and 35, Record
on Appeal). That petition was opposed by the parish priest of Victoria.
Finding that petition to be meritorious, the lower court, through Judge
Bernabe de Aquino, declared the bequest inoperative and adjudicated
the ricelands to the testator's legal heirs in his order of June 28, 1957.
The parish priest filed two motions for reconsideration.
Judge De Aquino granted the respond motion for reconsideration in his
order of December 10, 1957 on the ground that the testator had a
grandnephew named Edgardo G. Cunanan (the grandson of his first
cousin) who was a seminarian in the San Jose Seminary of the Jesuit
Fathers in Quezon City. The administrator was directed to deliver the
ricelands to the parish priest of Victoria as trustee.
The legal heirs appealed to the Court of Appeals. It reversed that order.
It held that Father Rigor had created a testamentary trust for his nearest
male relative who would take the holy orders but that such trust could
exist only for twenty years because to enforce it beyond that period
would violate "the rule against perpetuities. It ruled that since no legatee
claimed the ricelands within twenty years after the testator's death, the
same should pass to his legal heirs, citing articles 888 and 912(2) of the
old Civil Code and article 870 of the new Civil Code.
The parish priest in this appeal contends that the Court of Appeals erred
in not finding that the testator created a public charitable trust and in not
liberally construing the testamentary provisions so as to render the trust
operative and to prevent intestacy.
As refutation, the legal heirs argue that the Court of Appeals d the
bequest inoperative because no one among the testator's nearest male
relatives had studied for the priesthood and not because the trust was a
private charitable trust. According to the legal heirs, that factual finding
is binding on this Court. They point out that appellant priest's change of
theory cannot be countenanced in this appeal .
In this case, as in cases involving the law of contracts and statutory
construction, where the intention of the contracting parties or of the
lawmaking body is to be ascertained, the primary issue is the
determination of the testator's intention which is the law of the case
(dicat testor et erit lex. Santos vs. Manarang, 27 Phil. 209, 215;
Rodriguez vs. Court of Appeals, L-28734, March 28, 1969, 27 SCRA
546).
The will of the testator is the first and principal law in the matter of
testaments. When his intention is clearly and precisely expressed, any
interpretation must be in accord with the plain and literal meaning of his
words, except when it may certainly appear that his intention was
different from that literally expressed (In re Estate of Calderon, 26 Phil.
333).
The intent of the testator is the cardinal rule in the construction of wills."
It is "the life and soul of a will It is "the first greatest rule, the sovereign
guide, the polestar, in giving effect to a will". (See Dissent of Justice
Moreland in Santos vs. Manarang, 27 Phil. 209, 223, 237-8.)
One canon in the interpretation of the testamentary provisions is that
"the testator's intention is to be ascertained from the words of the wilt
taking into consideration the circumstances under which it was made",
but excluding the testator's oral declarations as to his intention (Art.
789, Civil Code of the Philippines).
To ascertain Father Rigor's intention, it may be useful to make the
following re-statement of the provisions of his will.
1. that he bequeathed the ricelands to anyone of his nearest male
relatives who would pursue an ecclesiastical career until his ordination
as a priest.
2. That the devisee could not sell the ricelands.
3. That the devisee at the inception of his studies in sacred theology
could enjoy and administer the ricelands, and once ordained as a priest,
he could continue enjoying and administering the same up to the time of
his death but the devisee would cease to enjoy and administer the
ricelands if he discontinued his studies for the priesthood.
4. That if the devisee became a priest, he would be obligated to
celebrate every year twenty masses with prayers for the repose of the
souls of Father Rigor and his parents.
5. That if the devisee is excommunicated, he would be divested of the
legacy and the administration of the riceland would pass to the
incumbent parish priest of Victoria and his successors.
6. That during the interval of time that there is no qualified devisee as
contemplated above, the administration of the ricelands would be under
the responsibility of the incumbent parish priest of Victoria and his
successors, and
7. That the parish priest-administrator of the ricelands would
accumulate annually the products thereof, obtaining or getting from the
annual produce five percent thereof for his administration and the fees
corresponding to the twenty masses with prayers that the parish priest
would celebrate for each year, depositing the balance of the income of
the devise in the bank in the name of his bequest.
From the foregoing testamentary provisions, it may be deduced that the
testator intended to devise the ricelands to his nearest male relative
who would become a priest, who was forbidden to sell the ricelands,
who would lose the devise if he discontinued his studies for the
priesthood, or having been ordained a priest, he was excommunicated,
and who would be obligated to say annually twenty masses with prayers
for the repose of the souls of the testator and his parents.
On the other hand, it is clear that the parish priest of Victoria would
administer the ricelands only in two situations: one, during the interval of
time that no nearest male relative of the testator was studying for the
priesthood and two, in case the testator's nephew became a priest and
he was excommunicated.
What is not clear is the duration of "el intervalo de tiempo que no haya
legatario acondicionado", or how long after the testator's death would it
be determined that he had a nephew who would pursue an
ecclesiastical vocation. It is that patent ambiguity that has brought about
the controversy between the parish priest of Victoria and the testator's
legal heirs.
Interwoven with that equivocal provision is the time when the nearest
male relative who would study for the priesthood should be
determined. Did the testator contemplate only his nearest male
relative at the time of his death? Or did he have in mind any of his
nearest male relatives at anytime after his death?
We hold that the said bequest refers to the testator's nearest male
relative living at the time of his death and not to any indefinite time
thereafter. "In order to be capacitated to inherit, the heir, devisee or
legatee must be living at the moment the succession opens, except in
case of representation, when it is proper" (Art. 1025, Civil Code).
The said testamentary provisions should be sensibly or reasonably
construed. To construe them as referring to the testator's nearest male
relative at anytime after his death would render the provisions difficult to
apply and create uncertainty as to the disposition of his estate. That
could not have been his intention.
In 1935, when the testator died, his nearest leagal heirs were his three
sisters or second-degree relatives, Mrs. Escobar, Mrs. Manaloto and
Mrs. Quiambao. Obviously, when the testator specified his nearest male
relative, he must have had in mind his nephew or a son of his sister,
who would be his third-degree relative, or possibly a grandnephew. But
since he could not prognosticate the exact date of his death or state
with certitude what category of nearest male relative would be living at
the time of his death, he could not specify that his nearest male relative
would be his nephew or grandnephews (the son of his nephew or niece)
and so he had to use the term "nearest male relative".
It is contended by the legal heirs that the said devise was in reality
intended for Ramon Quiambao, the testator's nephew and godchild,
who was the son of his sister, Mrs. Quiambao. To prove that contention,
the legal heirs presented in the lower court the affidavit of Beatriz
Gamalinda, the maternal grandmother of Edgardo Cunanan, who
deposed that after Father Rigor's death her own son, Valentin
Gamalinda, Jr., did not claim the devise, although he was studying for
the priesthood at the San Carlos Seminary, because she (Beatriz) knew
that Father Rigor had intended that devise for his nearest male
relative beloning to the Rigor family (pp. 105-114, Record on Appeal).
Mrs. Gamalinda further deposed that her own grandchild, Edgardo G.
Cunanan, was not the one contemplated in Father Rigor's will and that
Edgardo's father told her that he was not consulted by the parish priest
of Victoria before the latter filed his second motion for reconsideration
which was based on the ground that the testator's grandnephew,
Edgardo, was studying for the priesthood at the San Jose Seminary.
Parenthetically, it should be stated at this juncture that Edgardo ceased
to be a seminarian in 1961. For that reason, the legal heirs apprised the
Court of Appeals that the probate court's order adjudicating the
ricelands to the parish priest of Victoria had no more leg to stand on (p.
84, Appellant's brief).
Of course, Mrs. Gamalinda's affidavit, which is tantamount to
evidence aliunde as to the testator's intention and which is hearsay, has
no probative value. Our opinion that the said bequest refers to the
testator's nephew who was living at the time of his death, when his
succession was opened and the successional rights to his estate
became vested, rests on a judicious and unbiased reading of the terms
of the will.
Had the testator intended that the "cualquier pariente mio varon mas
cercano que estudie la camera eclesiatica" would include indefinitely
anyone of his nearest male relatives born after his death, he could have
so specified in his will He must have known that such a broad provision
would suspend for an unlimited period of time the efficaciousness of his
bequest.
What then did the testator mean by "el intervalo de tiempo que no haya
legatario acondicionado"? The reasonable view is that he was referring
to a situation whereby his nephew living at the time of his death, who
would like to become a priest, was still in grade school or in high school
or was not yet in the seminary. In that case, the parish priest of Victoria
would administer the ricelands before the nephew entered the
seminary. But the moment the testator's nephew entered the seminary,
then he would be entitled to enjoy and administer the ricelands and
receive the fruits thereof. In that event, the trusteeship would be
terminated.
Following that interpretation of the will the inquiry would be whether at
the time Father Rigor died in 1935 he had a nephew who was studying
for the priesthood or who had manifested his desire to follow the
ecclesiastical career. That query is categorically answered in paragraph
4 of appellant priest's petitions of February 19, 1954 and January 31,
1957. He unequivocally alleged therein that "not male relative of the late
(Father) Pascual Rigor has ever studied for the priesthood" (pp. 25 and
35, Record on Appeal).
Inasmuch as the testator was not survived by any nephew who became
a priest, the unavoidable conclusion is that the bequest in question was
ineffectual or inoperative. Therefore, the administration of the ricelands
by the parish priest of Victoria, as envisaged in the wilt was likewise
inoperative.
The appellant in contending that a public charitable trust was
constituted by the testator in is favor assumes that he was a trustee or a
substitute devisee That contention is untenable. A reading of the
testamentary provisions regarding the disputed bequest not support the
view that the parish priest of Victoria was a trustee or a substitute
devisee in the event that the testator was not survived by a nephew who
became a priest.
It should be understood that the parish priest of Victoria could become a
trustee only when the testator's nephew living at the time of his death,
who desired to become a priest, had not yet entered the seminary or,
having been ordained a priest, he was excommunicated. Those two
contingencies did not arise, and could not have arisen in this case
because no nephew of the testator manifested any intention to enter the
seminary or ever became a priest.
The Court of Appeals correctly ruled that this case is covered by article
888 of the old Civil Code, now article 956, which provides that if "the
bequest for any reason should be inoperative, it shall be merged into
the estate, except in cases of substitution and those in which the right of
accretion exists" ("el legado ... por qualquier causa, no tenga efecto se
refundira en la masa de la herencia, fuera de los casos de sustitucion y
derecho de acrecer").
This case is also covered by article 912(2) of the old Civil Code, now
article 960 (2), which provides that legal succession takes place when
the will "does not dispose of all that belongs to the testator." There
being no substitution nor accretion as to the said ricelands the same
should be distributed among the testator's legal heirs. The effect is as if
the testator had made no disposition as to the said ricelands.
The Civil Code recognizes that a person may die partly testate and
partly intestate, or that there may be mixed succession. The old rule as
to the indivisibility of the testator's win is no longer valid. Thus, if a
conditional legacy does not take effect, there will be intestate
succession as to the property recovered by the said legacy (Macrohon
Ong Ham vs. Saavedra, 51 Phil. 267).
We find no merit in the appeal The Appellate Court's decision is
affirmed. Costs against the petitioner.
SO ORDERED
G.R. No. L-41171 July 23, 1987
INTESTATE ESTATE OF THE LATE VITO BORROMEO,
PATROCINIO BORROMEO-HERRERA, petitioner,
vs.
FORTUNATO BORROMEO and HON. FRANCISCO P. BURGOS,
Judge of the Court of First Instance of Cebu, Branch
II, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-55000 July 23, 1987
IN THE MATTER OF THE ESTATE OF VITO BORROMEO,
DECEASED, PILAR N. BORROMEO, MARIA B. PUTONG,
FEDERICO V. BORROMEO, JOSE BORROMEO, CONSUELO B.
MORALES, AND CANUTO V. BORROMEO, JR., heirs-appellants,
vs.
FORTUNATO BORROMEO, claimant-appellee.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-62895 July 23, 1987
JOSE CUENCO BORROMEO, petitioner,
vs.
HONORABLE COURT OF APPEALS, HON. FRANCISCO P.
BURGOS, As presiding Judge of the (now) Regional Trial Court,
Branch XV, Region VII, RICARDO V. REYES, as Administrator of
the Estate of Vito Borromeo in Sp. Proc. No. 916-R, NUMERIANO
G. ESTENZO and DOMINGO L. ANTIGUA, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-63818 July 23, 1987
DOMINGO ANTIGUA AND RICARDO V. REYES, as Administrator of
the Intestate Estate of VITO BORROMEO, Sp. Proceedings No. 916-
R, Regional Trial Court of Cebu, joined by HON. JUDGE
FRANCISCO P. BURGOS, as Presiding Judge of Branch XV of the
Regional Trial Court of Cebu, as a formal party, and ATTYS. When the aforementioned petitions and claims were heard jointly, the
FRANCIS M. ZOSA, GAUDIOSO RUIZ and NUMERIANO following facts were established:
ESTENZO, petitioners, 1. Maximo Borromeo and Hermenegilda Galan, husband and wife (the
vs. latter having predeceased the former), were survived by their eight (8)
HONORABLE INTERMEDIATE APPELLATE COURT, JOSE children, namely,
CUENCO BORROMEO, and PETRA O. BORROMEO, respondents. Jose Ma. Borromeo
x - - - - - - - - - - - - - - - - - - - - - - -x Cosme Borromeo
No. L-65995 July 23, 1987 Pantaleon Borromeo
PETRA BORROMEO, VITALIANA BORROMEO, AMELINDA Vito Borromeo
BORROMEO, and JOSE CUENCO BORROMEO,petitioners, Paulo Borromeo
vs. Anecita Borromeo
HONORABLE FRANCISCO P. BURGOS, Presiding Judge of Branch Quirino Borromeo and
XV, Regional Trial Court of Cebu; RICARDO V. REYES, Julian Borromeo
Administrator of the Estate of VITO BORROMEO in Sp. Proc. No. 2. Vito Borromeo died a widower on March 13, 1952, without any issue,
916-R; and DOMINGO L. ANTIGUA, respondents. and all his brothers and sisters predeceased him.
GUTIERREZ, JR., J.: 3. Vito's brother Pantaleon Borromeo died leaving the following
These cases before us all stem from SP. PROC. NO. 916-R of the then children:
Court of First Instance of Cebu. a. Ismaela Borromeo,who died on Oct. 16, 1939
G.R. No. 41171 b. Teofilo Borromeo, who died on Aug. 1, 1955, or 3 years
Vito Borromeo, a widower and permanent resident of Cebu City, died on after the death of Vito Borromeo. He was married to
March 13, 1952, in Paranaque, Rizal at the age of 88 years, without Remedios Cuenco Borromeo, who died on March 28, 1968.
forced heirs but leaving extensive properties in the province of Cebu. He had an only son-Atty. Jose Cuenco Borromeo one of the
On April 19, 1952, Jose Junquera filed with the Court of First Instance petitioners herein.
of Cebu a petition for the probate of a one page document as the last c. Crispin Borromeo, who is still alive.
will and testament left by the said deceased, devising all his properties 4. Anecita Borromeo, sister of Vito Borromeo, died ahead of him and left
to Tomas, Fortunato and Amelia, all surnamed Borromeo, in equal and an only daughter, Aurora B. Ocampo, who died on Jan. 30, 1950
undivided shares, and designating Junquera as executor thereof. The leaving the following children:
case was docketed as Special Proceedings No. 916-R. The document, a. Anecita Ocampo Castro
drafted in Spanish, was allegedly signed and thumbmarked by the b. Ramon Ocampo
deceased in the presence of Cornelio Gandionco, Eusebio Cabiluna, c. Lourdes Ocampo
and Felixberto Leonardo who acted as witnesses. d. Elena Ocampo, all living, and
Oppositions to the probate of the will were filed. On May 28, 1960, after e. Antonieta Ocampo Barcenilla (deceased), survived by
due trial, the probate court held that the document presented as the will claimant Jose Barcenilla, Jr.
of the deceased was a forgery. 5. Cosme Borromeo, another brother of Vito Borromeo, died before the
On appeal to this Court, the decision of the probate court disallowing war and left the following children:
the probate of the will was affirmed in Testate Estate of Vito Borromeo, a. Marcial Borromeo
Jose H. Junquera et al. v. Crispin Borromeo et al. (19 SCRA 656). b. Carlos Borromeo,who died on Jan. 18, 1965,survived by
The testate proceedings was converted into an intestate proceedings. his wife, Remedios Alfonso, and his only daughter, Amelinda
Several parties came before the court filing claims or petitions alleging Borromeo Talam
themselves as heirs of the intestate estate of Vito Borromeo. c. Asuncion Borromeo
The following petitions or claims were filed: d. Florentina Borromeo, who died in 1948.
1. On August 29, 1967, the heirs of Jose Ma. Borromeo and e. Amilio Borromeo, who died in 1944.
Cosme Borromeo filed a petition for declaration of heirs and f. Carmen Borromeo, who died in 1925.
determination of heirship. There was no opposition filed The last three died leaving no issue.
against said petition. 6. Jose Ma. Borromeo, another brother of Vito Borromeo, died before
2. On November 26, 1967, Vitaliana Borromeo also filed a the war and left the following children:
petition for declaration as heir. The heirs of Jose Ma. a. Exequiel Borromeo,who died on December 29, 1949
Borromeo and Cosme Borromeo filed an opposition to this b. Canuto Borromeo, who died on Dec. 31, 1959, leaving the
petition. following children:
3. On December 13, 1967, Jose Barcenilla, Jr., Anecita aa. Federico Borromeo
Ocampo de Castro, Ramon Ocampo, Lourdes Ocampo, bb. Marisol Borromeo (Maria B. Putong, Rec. p. 85)
Elena Ocampo, Isagani Morre, Rosario Morre, Aurora Morre, cc. Canuto Borromeo, Jr.
Lila Morre, Lamberto Morre, and Patricia Morre, filed a dd. Jose Borromeo
petition for declaration of heirs and determination of shares. ee. Consuelo Borromeo
The petition was opposed by the heirs of Jose and Cosme ff. Pilar Borromeo
Borromeo. gg. Salud Borromeo
4. On December 2, 1968, Maria Borromeo Atega, Luz hh. Patrocinio Borromeo Herrera
Borromeo, Hermenegilda Borromeo Nonnenkamp, Rosario c. Maximo Borromeo, who died in July, 1948
Borromeo, and Fe Borromeo Queroz filed a claim. Jose d. Matilde Borromeo, who died on Aug. 6, 1946
Cuenco Borromeo, Crispin Borromeo, Vitaliana Borromeo and e. Andres Borromeo, who died on Jan. 3, 1923, but survived
the heirs of Carlos Borromeo represented by Jose Talam filed by his children:
oppositions to this claim. aa. Maria Borromeo Atega
 bb. Luz Borromeo
cc. Hermenegilda Borromeo Nonnenkamp
dd. Rosario Borromeo
ee. Fe Borromeo Queroz
On April 10, 1969, the trial court, invoking Art. 972 of the Civil Code,
issued an order declaring the following, to the exclusion of all others, as
the intestate heirs of the deceased Vito Borromeo:
1. Jose Cuenco Borromeo
2. Judge Crispin Borromeo
3. Vitaliana Borromeo
4. Patrocinio Borromeo Herrera
5. Salud Borromeo
6. Asuncion Borromeo
7. Marcial Borromeo
8. Amelinda Borromeo de Talam, and
9. The heirs of Canuto Borromeo
The court also ordered that the assets of the intestate estate of Vito
Borromeo shall be divided into 4/9 and 5/9 groups and distributed in
equal and equitable shares among the 9 abovenamed declared
intestate heirs.
On April 21 and 30, 1969, the declared heirs, with the exception of
Patrocinio B. Herrera, signed an agreement of partition of the properties
of the deceased Vito Borromeo which was approved by the trial court, in
its order of August 15, 1969. In this same order, the trial court ordered
the administrator, Atty Jesus Gaboya, Jr., to partition the properties of
the deceased in the way and manner they are divided and partitioned in
the said Agreement of Partition and further ordered that 40% of the
market value of the 4/9 and 5/9 of the estate shall be segregated. All
attorney's fees shall be taken and paid from this segregated portion.
On August 25, 1972, respondent Fortunato Borromeo, who had earlier
claimed as heir under the forged will, filed a motion before the trial court
praying that he be declared as one of the heirs of the deceased Vito
Borromeo, alleging that he is an illegitimate son of the deceased and
that in the declaration of heirs made by the trial court, he was omitted, in
disregard of the law making him a forced heir entitled to receive a
legitime like all other forced heirs. As an acknowledged illegitimate
child, he stated that he was entitled to a legitime equal in every case to
four-fifths of the legitime of an acknowledged natural child.
Finding that the motion of Fortunato Borromeo was already barred by
the order of the court dated April 12, 1969 declaring the persons named
therein as the legal heirs of the deceased Vito Borromeo, the court
dismissed the motion on June 25, 1973.
Fortunato Borromeo filed a motion for reconsideration. In the
memorandum he submitted to support his motion for reconsideration,
Fortunato changed the basis for his claim to a portion of the estate. He
asserted and incorporated a Waiver of Hereditary Rights dated July 31,
1967, supposedly signed by Pilar N. Borromeo, Maria B. Putong, Jose
Borromeo, Canuto V. Borromeo, Jr., Salud Borromeo, Patrocinio
Borromeo-Herrera, Marcial Borromeo, Asuncion Borromeo, Federico V.
Borromeo, Consuelo B. Morales, Remedios Alfonso and Amelinda B.
Talam In the waiver, five of the nine heirs relinquished to Fortunato their
shares in the disputed estate. The motion was opposed on the ground
that the trial court, acting as a probate court, had no jurisdiction to take
cognizance of the claim; that respondent Fortunato Borromeo is
estopped from asserting the waiver agreement; that the waiver
agreement is void as it was executed before the declaration of heirs;
that the same is void having been executed before the distribution of
the estate and before the acceptance of the inheritance; and that it is
void ab initio and inexistent for lack of subject matter.
On December 24, 1974, after due hearing, the trial court concluding that
the five declared heirs who signed the waiver agreement assigning their
hereditary rights to Fortunato Borromeo had lost the same rights,
declared the latter as entitled to 5/9 of the estate of Vito Borromeo.
A motion for reconsideration of this order was denied on July 7, 1975.
In the present petition, the petitioner seeks to annul and set aside the
trial court's order dated December 24, 1974, declaring respondent
Fortunato Borromeo entitled to 5/9 of the estate of Vito Borromeo and
the July 7, 1975 order, denying the motion for reconsideration.
The petitioner argues that the trial court had no jurisdiction to take
cognizance of the claim of respondent Fortunato Borromeo because it is
not a money claim against the decedent but a claim for properties, real
and personal, which constitute all of the shares of the heirs in the
decedent's estate, heirs who allegedly waived their rights in his favor.
The claim of the private respondent under the waiver agreement,
according to the petitioner, may be likened to that of a creditor of the
heirs which is improper. He alleges that the claim of the private
respondent under the waiver agreement was filed beyond the time
allowed for filing of claims as it was filed only sometime in 1973, after
there had been a declaration of heirs (April 10, 1969), an agreement of
partition (April 30, 1969), the approval of the agreement of partition and
an order directing the administrator to partition the estate (August 15,
1969), when in a mere memorandum, the existence of the waiver
agreement was brought out.
It is further argued by the petitioner that the document entitled " waiver
of Hereditary Rights" executed on July 31, 1967, aside from having
been cancelled and revoked on June 29, 1968, by Tomas L. Borromeo,
Fortunato Borromeo and Amelia Borromeo, is without force and effect
because there can be no effective waiver of hereditary rights before
there has been a valid acceptance of the inheritance the heirs intend to
transfer. Pursuant to Article 1043 of the Civil Code, to make acceptance
or repudiation of inheritance valid, the person must be certain of the
death of the one from whom he is to inherit and of his right to the
inheritance. Since the petitioner and her co-heirs were not certain of
their right to the inheritance until they were declared heirs, their rights
were, therefore, uncertain. This view, according to the petitioner, is also
supported by Article 1057 of the same Code which directs heirs,
devicees, and legatees to signify their acceptance or repudiation within
thirty days after the court has issued an order for the distribution of the
estate.
Respondent Fortunato Borromeo on the other hand, contends that
under Article 1043 of the Civil Code there is no need for a person to be
first declared as heir before he can accept or repudiate an inheritance.
What is required is that he must first be certain of the death of the
person from whom he is to inherit and that he must be certain of his
right to the inheritance. He points out that at the time of the signing of
the waiver document on July 31, 1967, the signatories to the waiver
document were certain that Vito Borromeo was already dead as well as
of their rights to the inheritance as shown in the waiver document itself.
With respect to the issue of jurisdiction of the trial court to pass upon the
validity of the waiver of hereditary rights, respondent Borromeo asserts
that since the waiver or renunciation of hereditary rights took place after
the court assumed jurisdiction over the properties of the estate it
partakes of the nature of a partition of the properties of the estate
needing approval of the court because it was executed in the course of
the proceedings. lie further maintains that the probate court loses
jurisdiction of the estate only after the payment of all the debts of the
estate and the remaining estate is distributed to those entitled to the
same.
The prevailing jurisprudence on waiver of hereditary rights is that "the
properties included in an existing inheritance cannot be considered as
belonging to third persons with respect to the heirs, who by fiction of law
continue the personality of the former. Nor do such properties have the
character of future property, because the heirs acquire a right to
succession from the moment of the death of the deceased, by principle
established in article 657 and applied by article 661 of the Civil Code,
according to which the heirs succeed the deceased by the mere fact of
death. More or less, time may elapse from the moment of the death of
the deceased until the heirs enter into possession of the hereditary
property, but the acceptance in any event retroacts to the moment of
the death, in accordance with article 989 of the Civil Code. The right is
vested, although conditioned upon the adjudication of the
corresponding hereditary portion." (Osorio v. Osorio and Ynchausti
Steamship Co., 41 Phil., 531). The heirs, therefore, could waive their
hereditary rights in 1967 even if the order to partition the estate was
issued only in 1969.
In this case, however, the purported "Waiver of Hereditary Rights"
cannot be considered to be effective. For a waiver to exist, three
elements are essential: (1) the existence of a right; (2) the knowledge of
the existence thereof; and (3) an intention to relinquish such right.
(People v. Salvador, (CA) 53 O.G. No. 22, p. 8116, 8120). The intention
to waive a right or advantage must be shown clearly and convincingly,
and when the only proof of intention rests in what a party does, his act
should be so manifestly consistent with, and indicative of an intent to,
voluntarily relinquish the particular right or advantage that no other
reasonable explanation of his conduct is possible (67 C.J., 311).
(Fernandez v. Sebido, et al., 70 Phil., 151, 159).
The circumstances of this case show that the signatories to the waiver
document did not have the clear and convincing intention to relinquish
their rights, Thus: (1) On October 27, 1967. Fortunato, Tomas, and
Amelia Borromeo filed a pleading entitled "Compliance" wherein they
submitted a proposal for the amicable settlement of the case. In that
Compliance, they proposed to concede to all the eight (8) intestate heirs
of Vito Borromeo all properties, personal and real, including all cash and
sums of money in the hands of the Special Administrator, as of October
31, 1967, not contested or claimed by them in any action then pending
in the Court of First Instance of Cebu. In turn, the heirs would waive and
concede to them all the 14 contested lots. In this document, the
respondent recognizes and concedes that the petitioner, like the other
signatories to the waiver document, is an heir of the deceased Vito
Borromeo, entitled to share in the estate. This shows that the "Waiver of
Hereditary Rights" was never meant to be what the respondent now
purports it to be. Had the intent been otherwise, there would not be any
reason for Fortunato, Tomas, and Amelia Borromeo to mention the
heirs in the offer to settle the case amicably, and offer to concede to
them parts of the estate of the deceased; (2) On April 21 and 30, 1969,
the majority of the declared heirs executed an Agreement on how the
estate they inherited shall be distributed. This Agreement of Partition
was approved by the trial court on August 15, 1969; (3) On June 29,
1968, the petitioner, among others, signed a document entitled Deed of
Assignment" purporting to transfer and assign in favor of the respondent
and Tomas and Amelia Borromeo all her (Patrocinio B. Herrera's)
rights, interests, and participation as an intestate heir in the estate of
the deceased Vito Borromeo. The stated consideration for said
assignment was P100,000.00; (4) On the same date, June 29, 1968,
the respondent Tomas, and Amelia Borromeo (assignees in the
aforementioned deed of assignment) in turn executed a "Deed of
Reconveyance" in favor of the heirs-assignors named in the same deed
of assignment. The stated consideration was P50,000.00; (5) A
Cancellation of Deed of Assignment and Deed of Reconveyance was
signed by Tomas Borromeo and Amelia Borromeo on October 15, 1968,
while Fortunato Borromeo signed this document on March 24, 1969.
With respect to the issue of jurisdiction, we hold that the trial court had
jurisdiction to pass upon the validity of the waiver agreement. It must be
noted that in Special Proceedings No. 916-R the lower court disallowed
the probate of the will and declared it as fake. Upon appeal, this Court
affirmed the decision of the lower court on March 30, 1967, in G.R. No.
L-18498. Subsequently, several parties came before the lower court
filing claims or petitions alleging themselves as heirs of the intestate
estate of Vito Borromeo. We see no impediment to the trial court in
exercising jurisdiction and trying the said claims or petitions. Moreover,
the jurisdiction of the trial court extends to matters incidental and
collateral to the exercise of its recognized powers in handling the
settlement of the estate.
In view of the foregoing, the questioned order of the trial court dated
December 24, 1974, is hereby SET ASIDE.
G.R. No. 55000
This case was originally an appeal to the Court of Appeals from an
order of the Court of First Instance of Cebu, Branch 11, dated
December 24, 1974, declaring the waiver document earlier discussed in
G.R. No. 41171 valid. The appellate court certified this case to this
Court as the questions raised are all of law.
The appellants not only assail the validity of the waiver agreement but
they also question the jurisdiction of the lower court to hear and decide
the action filed by claimant Fortunato Borromeo.
The appellants argue that when the waiver of hereditary right was
executed on July 31, 1967, Pilar Borromeo and her children did not yet
possess or own any hereditary right in the intestate estate of the
deceased Vito Borromeo because said hereditary right was only
acquired and owned by them on April 10, 1969, when the estate was
ordered distributed.
They further argue that in contemplation of law, there is no such
contract of waiver of hereditary right in the present case because there
was no object, which is hereditary right, that could be the subject matter
of said waiver, and, therefore, said waiver of hereditary right was not
only null and void ab initio but was inexistent.
With respect to the issue of jurisdiction, the appellants contend that
without any formal pleading filed by the lawyers of Fortunato Borromeo
for the approval of the waiver agreement and without notice to the
parties concerned, two things which are necessary so that the lower
court would be vested with authority and jurisdiction to hear and decide
the validity of said waiver agreement, nevertheless, the lower court set
the hearing on September 25, 1973 and without asking for the requisite
pleading. This resulted in the issuance of the appealed order of
December 24, 1974, which approved the validity of the waiver
agreement. The appellants contend that this constitutes an error in the
exercise of jurisdiction.
The appellee on the other hand, maintains that by waiving their
hereditary rights in favor of Fortunato Borromeo, the signatories to the
waiver document tacitly and irrevocably accepted the inheritance and by
virtue of the same act, they lost their rights because the rights from that
moment on became vested in Fortunato Borromeo.
It is also argued by the appellee that under Article 1043 of the Civil
Code there is no need for a person to be declared as heir first before he
can accept or repudiate an inheritance. What is required is that he is
certain of the death of the person from whom he is to inherit, and of his
right to the inheritance. At the time of the signing of the waiver
document on July 31, 1967, the signatories to the waiver document
were certain that Vito Borromeo was already dead and they were also
certain of their right to the inheritance as shown by the waiver document
itself.
On the allegation of the appellants that the lower court did not acquire
jurisdiction over the claim because of the alleged lack of a pleading
invoking its jurisdiction to decide the claim, the appellee asserts that on
August 23, 1973, the lower court issued an order specifically calling on
all oppositors to the waiver document to submit their comments within
ten days from notice and setting the same for hearing on September 25,
1973. The appellee also avers that the claim as to a 5/9 share in the
inheritance involves no question of title to property and, therefore, the
probate court can decide the question.
The issues in this case are similar to the issues raised in G.R. No.
41171. The appellants in this case, who are all declared heirs of the late
Vito Borromeo are contesting the validity of the trial court's order dated
December 24, 1974, declaring Fortunato Borromeo entitled to 5/9 of the
estate of Vito Borromeo under the waiver agreement.
As stated in G.R. No. 41171, the supposed waiver of hereditary rights
can not be validated. The essential elements of a waiver, especially the
clear and convincing intention to relinquish hereditary rights, are not
found in this case.
The October 27, 1967 proposal for an amicable settlement conceding to
all the eight (8) intestate heirs various properties in consideration for the
heirs giving to the respondent and to Tomas, and Amelia Borromeo the
fourteen (14) contested lots was filed inspite of the fact that on July 31,
1967, some of the heirs had allegedly already waived or sold their
hereditary rights to the respondent.
The agreement on how the estate is to be distributed, the June 29,
1968 deed of assignment, the deed of reconveyance, and the
subsequent cancellation of the deed of assignment and deed of
reconveyance all argue against the purported waiver of hereditary
rights.
Concerning the issue of jurisdiction, we have already stated in G.R. No.
41171 that the trial court acquired jurisdiction to pass upon the validity
of the waiver agreement because the trial court's jurisdiction extends to
matters incidental and collateral to the exercise of its recognized powers
in handling the settlement of the estate.
The questioned order is, therefore, SET ASIDE.
G.R. No. 62895
A motion dated April 28, 1972, was filed by Atty. Raul M. Sesbreno,
representative of some of the heirs-distributees, praying for the
immediate closure of Special Proceeding No. 916-R. A similar motion
dated May 29, 1979 was filed by Atty. Jose Amadora. Both motions
were grounded on the fact that there was nothing more to be done after
the payment of all the obligations of the estate since the order of
partition and distribution had long become final.
Alleging that respondent Judge Francisco P. Burgos failed or refused to
resolve the aforesaid motions, petitioner Jose Cuenco Borromeo-filed a
petition for mandamus before the Court of Appeals to compel the
respondent judge to terminate and close Special Proceedings No. 916-
R.
Finding that the inaction of the respondent judge was due to pending
motions to compel the petitioner, as co-administrator, to submit an
inventory of the real properties of the estate and an accounting of the
cash in his hands, pending claims for attorney's fees, and that
mandamus will not lie to compel the performance of a discretionary
function, the appellate court denied the petition on May 14, 1982. The
petitioner's motion for reconsideration was likewise denied for lack of
merit. Hence, this petition.
The petitioner's stand is that the inaction of the respondent judge on the
motion filed on April 28, 1972 for the closure of the administration
proceeding cannot be justified by the filing of the motion for inventory
and accounting because the latter motion was filed only on March 2,
1979. He claimed that under the then Constitution, it is the duty of the
respondent judge to decide or resolve a case or matter within three
months from the date of its submission.
The respondents contend that the motion to close the administration
had already been resolved when the respondent judge cancelled all
settings of all incidents previously set in his court in an order dated June
4, 1979, pursuant to the resolution and restraining order issued by the
Court of Appeals enjoining him to maintain status quo on the case.
As stated in G.R. No. 41171, on April 21 and 30, 1969, the declared
heirs, with the exception of Patrocinio B. Herrera, signed an agreement
of partition of the properties of the deceased Vito Borromeo which was
approved by the trial court, in its order dated August 15, 1969. In this
same order, the trial court ordered the administrator, Atty. Jesus
Gaboya, Jr., to partition the properties of the deceased in the way and
manner they are divided and partitioned in the said Agreement of
Partition and further ordered that 40% of the market value of the 4/9 and
5/9 of the estate shall be segregated and reserved for attorney's fees.
According to the manifestation of Judge Francisco Burgos dated July 5,
1982, (p. 197, Rollo, G. R. No. 41171) his court has not finally
distributed to the nine (9) declared heirs the properties due to the
following circumstances:
1. The court's determination of the market value of the estate
in order to segregate the 40% reserved for attorney's fees;
2. The order of December 24, 1974, declaring Fortunato
Borromeo as beneficiary of the 5/9 of the estate because of
the waiver agreement signed by the heirs representing the 5/9
group which is still pending resolution by this Court (G.R. No.
4117 1);
3. The refusal of administrator Jose Cuenco Borromeo to
render his accounting; and
4. The claim of Marcela Villegas for 1/2 of the estate causing
annotations of notices of lis pendens on the different titles of
the properties of the estate.
Since there are still real properties of the estate that were not vet
distributed to some of the declared heirs, particularly the 5/9 group of
heirs due to the pending resolution of the waiver agreement, this Court
in its resolution of June 15, 1983, required the judge of the Court of First
Instance of Cebu, Branch 11, to expedite the determination of Special
Proceedings No. 916-R and ordered the co-administrator Jose Cuenco
Borromeo to submit an inventory of real properties of the estate and to
render an accounting of cash and bank deposits realized from rents of
several properties.
The matter of attorney's fees shall be discussed in G.R. No. 65995.
Considering the pronouncements stated in:
1. G.R. No. 41171 & G.R. No. 55000, setting aside the Order
of the trial court dated December 24, 1974;
2. G.R. No. 63818, denying the petition for review seeking to
modify the decision of the Intermediate Appellate Court
insofar as it disqualifies and inhibits Judge Francisco P.
Burgos from further hearing the Intestate Estate of Vito
Borromeo and ordering the remand of the case to the
Executive,Judge of the Regional trial Court of Cebu for re-
raffling; and
3. G.R. No. 65995, granting the petition to restrain the
respondents from further acting on any and all incidents in
Special proceedings No. 916-11 because of the affirmation of
the decision of the Intermediate Appellate Court in G.R. No.
63818.
the trial court may now terminate and close Special Proceedings No.
916-R, subject to the submission of an inventory of the real properties of
the estate and an accounting of the call and bank deposits of the
petitioner, as co-administrator of the estate, if he has not vet done so,
as required by this Court in its Resolution dated June 15, 1983. This
must be effected with all deliberate speed.
G.R. No. 63818
On June 9, 1979, respondents Jose Cuenco Borromeo and Petra 0.
Borromeo filed a motion for inhibition in the Court of First Instance of
Cebu, Branch 11, presided over by Judge Francisco P. Burgos to inhibit
the judge from further acting in Special Proceedings No. 916-R. 'The
movants alleged, among others, the following:
 xxx xxx xxx
6. To keep the agitation to sell moving, Atty. Antigua filed a
motion for the production of the certificates of title and to
deposit the same with the Branch Clerk of Court, presumably
for the ready inspection of interested buyers. Said motion was
granted by the Hon. Court in its order of October 2, 1978
which, however, became the subject of various motions for
reconsideration from heirs-distributees who contended that as
owners they cannot be deprived of their titles for the flimsy
reasons advanced by Atty, Antigua. In view of the motions for
reconsideration, Atty Antigua ultimately withdraw his motions
for production of titles.
7. The incident concerning the production of titles triggered
another incident involving Atty. Raul H. Sesbreno who was
then the counsel of herein movants Petra O. Borromeo and
Amelinda B. Talam In connection with said incident, Atty.
Sesbreno filed a pleading which the tion. presiding, Judge
Considered direct contempt because among others, Atty.
Sesbreno insinuated that the Hon. Presiding Judge stands to
receive "fat commission" from the sale of the entire property.
Indeed, Atty. Sesbreno was seriously in danger of being
declared in contempt of court with the dim prospect of
suspension from the practice of his profession. But obviously
to extricate himself from the prospect of contempt and
suspension. Atty. Sesbreno chose rapproachment and
ultimately joined forces with Atty. Antigua, et al., who,
together, continued to harass administrator
xxx xxx xxx
9. The herein movants are informed and so they allege, that a
brother of the Hon. Presiding Judge is married to a sister of
Atty. Domingo L. Antigua.
10. There is now a clear tug of war bet ween Atty. Antigua, et
al. who are agitating for the sale of the entire estate or to buy
out the individual heirs, on the one hand, and the herein
movants, on the other, who are not willing to sell their
distributive shares under the terms and conditions presently
proposed. In this tug of war, a pattern of harassment has
become apparent against the herein movants, especially Jose
Cuenco Borromeo. Among the harassments employed by Atty
Antigua et al. are the pending motions for the removal of
administrator Jose Cuenco Borromeo, the subpoena duces
tecum issued to the bank which seeks to invade into the
privacy of the personal account of Jose Cuenco Borromeo,
and the other matters mentioned in paragraph 8 hereof. More
harassment motions are expected until the herein movants
shall finally yield to the proposed sale. In such a situation, the
herein movants beg for an entirely independent and impartial
judge to pass upon the merits of said incidents.
11. Should the Hon. Presiding Judge continue to sit and take
cognizance of this proceeding, including the incidents above-
mentioned, he is liable to be misunderstood as being biased
in favor of Atty Antigua, et al. and prejudiced against the
herein movants. Incidents which may create this impression
need not be enumerated herein. (pp. 39-41, Rollo)
The motion for inhibition was denied by Judge Francisco P. Burgos.
Their motion for reconsideration having been denied, the private
respondents filed a petition for certiorari and/or prohibition with
preliminary injunction before the Intermediate Appellate Court.
In the appellate court, the private respondents alleged, among others,
the following:
xxx xxx xxx
16. With all due respect, petitioners regret the necessity of
having to state herein that respondent Hon. Francisco P.
Burgos has shown undue interest in pursing the sale initiated
by Atty. Domingo L. Antigua, et al. Significantly, a brother of
respondent Hon. Francisco P. Burgos is married to a sister of
Atty. Domingo L. Antigua.
17. Evidence the proposed sale of the entire properties of the
estate cannot be legally done without the conformity of the
heirs-distributees because the certificates of title are already
registered in their names Hence, in pursuit of the agitation to
sell, respondent Hon. Francisco P. Burgos urged the heirs-
distributees to sell the entire property based on the rationale
that proceeds thereof deposited in the bank will earn interest
more than the present income of the so called estate. Most of
the heirs-distributees, however. have been petitioner timid to
say their piece. Only the 4/9 group of heirs led by Jose
Cuenco Borromeo have had the courage to stand up and
refuse the proposal to sell clearly favored by respondent Hon.
Francisco P. Burgos.
xxx xxx xxx
20. Petitioners will refrain from discussing herein the merits of
the shotgun motion of Atty. Domingo L. Antigua as well as
other incidents now pending in the court below which smack
of harassment against the herein petitioners. For, regardless
of the merits of said incidents, petitioners respectfully contend
that it is highly improper for respondent Hon. Francisco P.
Burgos to continue to preside over Sp. Proc. No. 916-R by
reason of the following circumstances:
(a) He has shown undue interest in the sale of the
properties as initiated by Atty. Domingo L. Antigua
whose sister is married to a brother of respondent.
(b) The proposed sale cannot be legally done
without the conformity of the heirs-distributees, and
petitioners have openly refused the sale, to the
great disappointment of respondent.
(c) The shot gun motion of Atty. Antigua and similar
incidents are clearly intended to harass and
embarrass administrator Jose Cuenco Borromeo in
order to pressure him into acceding to the proposed
sale.
(d) Respondent has shown bias and prejudice
against petitioners by failing to resolve the claim for
attorney's fees filed by Jose Cuenco Borromeo and
the late Crispin Borromeo. Similar claims by the
other lawyers were resolved by respondent after
petitioners refused the proposed sale. (pp. 41-43,
Rollo)
On March 1, 1983, the appellate court rendered its decision granting the
petition for certiorari and/or prohibition and disqualifying Judge
Francisco P. Burgos from taking further cognizance of Special
Proceedings No. 916-R. The court also ordered the transmission of the
records of the case to the Executive Judge of the Regional Trial Court
of Region VII for re-raffling.
A motion for reconsideration of the decision was denied by the appellate
court on April 11, 1983. Hence, the present petition for review seeking
to modify the decision of the Intermediate Appellate Court insofar as it
disqualifies and inhibits Judge Francisco P. Burgos from further hearing
the case of Intestate Estate of Vito Borromeo and orders the remand of
the case to the Executive Judge of the Regional Trial Court of Cebu for
re-raffling.
The principal issue in this case has become moot and academic
because Judge Francisco P. Burgos decided to retire from the Regional
Trial Court of Cebu sometime before the latest reorganization of the
judiciary. However, we decide the petition on its merits for the guidance
of the judge to whom this case will be reassigned and others
concerned.
The petitioners deny that respondent Jose Cuenco Borromeo has been
harassed. They contend that Judge Burgos has benn shown unusual
interest in the proposed sale of the entire estate for P6,700,000.00 in
favor of the buyers of Atty. Antigua. They claim that this disinterest is
shown by the judge's order of March 2, 1979 assessing the property of
the estate at P15,000,000.00. They add that he only ordered the
administrator to sell so much of the properties of the estate to pay the
attorney's fees of the lawyers-claimants. To them, the inhibition of
Judge Burgos would have been unreasonable because his orders
against the failure of Jose Cuenco Borromeo, as administrator, to give
an accounting and inventory of the estate were all affirmed by the
appellate court. They claim that the respondent court, should also have
taken judicial notice of the resolution of this Court directing the said
judge to "expedite the settlement and adjudication of the case" in G.R.
No. 54232. And finally, they state that the disqualification of judge
Burgos would delay further the closing of the administration proceeding
as he is the only judge who is conversant with the 47 volumes of the
records of the case.
Respondent Jose Cuenco Borromeo, to show that he had been
harassed. countered that Judge Burgos appointed Ricardo V. Reyes as
co-administrator of the estate on October 11, 1972, yet Borromeo was
singled out to make an accounting of what t he was supposed to have
received as rentals for the land upon which the Juliana Trade Center is
erected, from January, 1977 to February 1982, inclusive, without
mentioning the withholding tax for the Bureau of Internal Revenue. In
order to bolster the agitation to sell as proposed by Domingo L. Antigua,
Judge Burgos invited Antonio Barredo, Jr., to a series of conferences
from February 26 to 28, 1979. During the conferences, Atty. Antonio
Barredo, Jr., offered to buy the shares of the heirs-distributees
presumably to cover up the projected sale initiated by Atty. Antigua.
On March 2, 1979, or two days after the conferences, a motion was filed
by petitioner Domingo L. Antigua praying that Jose Cuenco Borromeo
be required to file an inventory when he has already filed one to account
for cash, a report on which the administrators had already rendered:
and to appear and be examined under oath in a proceeding conducted
by Judge Burgos lt was also prayed that subpoena duces tecum be
issued for the appearance of the Manager of the Consolidated Bank
and Trust Co., bringing all the bank records in the name of Jose Cuenco
Borromeo jointly with his wife as well as the appearance of heirs-
distributees Amelinda Borromeo Talam and another heir distributee
Vitaliana Borromeo. Simultaneously with the filing of the motion of
Domingo Antigua, Atty. Raul H. Sesbreno filed a request for the
issuance of subpoena duces tecum to the Manager of Consolidated
Bank and 'Trust Co., Inc.; Register of Deeds of Cebu City; Register of
Deeds for the Province of Cebu and another subpoena duces tecum to
Atty. Jose Cuenco Borromeo.
On the same date, the Branch Clerk of Court issued a subpoena duces
tecum to the Managert of the bank, the Register of deeds for the City of
Cebu, the Register of Deeds for the Province, of Cebu. and to Jose
Cuenco Borromeo.
On the following day, March 3, 1979, Atty Gaudioso v. Villagonzalo in
behalf of the heirs of Marcial Borromeo who had a common cause with
Atty Barredo, Jr., joined petitioner Domingo L. Antigua by filing a motion
for relief of the administrator.
On March 5, 1979, Atty. Villagonzalo filed a request for the issuance of
a subpoena duces tecum to private respondent Jose Cuenco Borromeo
to bring and produce all the owners" copies of the titles in the court
presided order by Judge Burgos.
Consequently. the Branch Clerk of Court issued a subpoena duces
tecum commanding Atty. Jose Cuenco Borromeo to bring and produce
the titles in court.
All the above-incidents were set for hearing on June 7, 1979 but on
June 14, 1979, before the date of the hearing, Judge Burgos issued an
order denying the private respondents' motion for reconsideration and
the motion to quash the subpoena.1avvphi1
It was further argued by the private respondents that if ,judge Francisco
P. Burgos is not inhibited or disqualified from trying Sp. Proc. No. 916-
R, there would be a miscarriage of justice Because for the past twelve
years, he had not done anything towards the closure of the estate
proceedings except to sell the properties of the heirs-distributees as
initiated by petitioner Domingo L. Antigua at 6.7 million pesos while the
Intestate Court had already evaluated it at 15 million pesos.
The allegations of the private respondents in their motion for inhibition,
more specifically, the insistence of the trial judge to sell the entire estate
at P6,700,000.00, where 4/9 group of heirs objected, cannot easily be
ignored. Suspicion of partiality on the part of a trial judge must be
avoided at all costs. In the case of Bautista v. Rebeuno (81 SCRA 535),
this Court stated:
... The Judge must maintain and preserve the trust and faith
of the parties litigants. He must hold himself above reproach
and suspicion. At the very first sign of lack of faith and trust to
his actions, whether well grounded or not, the Judge has no
other alternative but inhibit himself from the case. A judge
may not be legally Prohibited from sitting in a litigation, but
when circumstances appear that will induce doubt to his
honest actuations and probity in favor or of either partly or
incite such state of mind, he should conduct a careful self-
examination. He should exercise his discretion in a way that
the people's faith in the Courts of Justice is not impaired, "The
better course for the Judge under such circumstances is to
disqualify himself "That way he avoids being misunderstood,
his reputation for probity and objectivity is preserve ed. what
is more important, the Ideal of impartial administration of
justice is lived up to.
In this case, the fervent distrust of the private respondents is based on
sound reasons. As Earlier stated, however, the petition for review
seeking to modify the decision of the Intermediate Appellate Court
insofar as it disqualifies and inhibits Judge Francisco P. Burgos from
further hearing the Intestate Estate of Vito Borromeo case and ordering
the remand of the case to the Executive Judge of the Regional Trial
Court for re-raffling should be DENIED for the decision is not only valid
but the issue itself has become moot and academic.
G.R. No. 65995
The petitioners seek to restrain the respondents from further acting on
any and all incidents in Special Proceedings No. 916-R during the
pendency of this petition and No. 63818. They also pray that all acts of
the respondents related to the said special proceedings after March 1,
1983 when the respondent Judge was disqualified by the appellate
court be declared null and void and without force and effect whatsoever.
The petitioners state that the respondent Judge has set for hearing all
incidents in Special Proceedings No. 916-R, including the reversion
from the heirs-distributees to the estate, of the distributed properties
already titled in their names as early as 1970, notwithstanding the
pending inhibition case elevated before this Court which is docketed as
G.R. No. 63818.
The petitioners further argue that the present status of Special
Proceeding No. 916-R requires only the appraisal of the attorney's fees
of the lawyers-claimants who were individually hired by their respective
heirs-clients, so their attorney's fees should be legally charged against
their respective clients and not against the estate.
On the other hand, the respondents maintain that the petition is a
dilatory one and barred by res judicata because this Court on July 8,
1981, in G.R. No. 54232 directed the respondent Judge to expedite the
settlement and liquidation of the decedent's estate. They claim that this
resolution, which was already final and executory, was in effect
reversed and nullified by the Intermediate Appellate Court in its case-
AC G.R.-No. SP - 11145 — when it granted the petition for certiorari
and or prohibition and disqualified Judge Francisco P. Burgos from
taking further cognizance of Special Proceedings No. 916R as well as
ordering the transmission of the records of the case to the Executive
Judge of the Regional Trial Court of Region VII for re-raffling on March
1, 1983, which was appealed to this Court by means of a Petition for
Review (G.R. No. 63818).
We agree with the petitioners' contention that attorney's fees are not the
obligation of the estate but of the individual heirs who individually hired
their respective lawyers. The portion, therefore, of the Order of August
15, 1969, segregating the exhorbitantly excessive amount of 40% of the
market value of the estate from which attorney's fees shall be taken and
paid should be deleted.
Due to our affirmance of the decision of the Intermediate Appellate
Court in G.R. No. 63818, we grant the petition.
WHEREFORE, —
(1) In G.R. No. 41171, the order of the respondent judge
dated December 24, 1974, declaring the respondent entitled
to 5/9 of the estate of the late Vito Borromeo and the order
dated July 7, 1975, denying the petitioner's motion for
reconsideration of the aforementioned order are hereby SET
ASIDE for being NULL and VOID;
(2) In G.R. No. 55000, the order of the trial court declaring the
waiver document valid is hereby SET ASIDE;
(3) In G.R. No. 63818, the petition is hereby DENIED. The
issue in the decision of the Intermediate Appellate Court
disqualifying and ordering the inhibition of Judge Francisco P.
Burgos from further hearing Special Proceedings No. 916-R is
declared moot and academic. The judge who has taken over
the sala of retired Judge Francisco P. Burgos shall
immediately conduct hearings with a view to terminating the
proceedings. In the event that the successor-judge is likewise
disqualified, the order of the Intermediate Appellate Court
directing the Executive Judge of the Regional Trial Court of
Cebu to re-raffle the case shall be implemented:
(4) In G.R. No. 65995, the petition is hereby GRANTED. 'The
issue seeking to restrain Judge Francisco P. Burgos from
further acting in G.R. No. 63818 is MOOT and ACADEMIC:
(5) In G.R, No, 62895, the trial court is hereby ordered to
speedily terminate the close Special Proceedings No. 916-R,
subject to the submission of an inventory of the real properties
of the estate and an accounting of the cash and bank
deposits by the petitioner-administrator of the estate as
required by this Court in its Resolution dated June 15, 1983;
and
(6) The portion of the Order of August 15, 1969, segregating
40% of the market value of the estate from which attorney's
fees shall be taken and paid should be, as it is hereby
DELETED. The lawyers should collect from the heirs-
distributees who individually hired them, attorney's fees
according to the nature of the services rendered but in
amounts which should not exceed more than 20% of the
market value of the property the latter acquired from the
estate as beneficiaries.
SO ORDERED.
G.R. No. L-43082 June 18, 1937
PABLO LORENZO, as trustee of the estate of Thomas Hanley,
deceased, plaintiff-appellant,
vs.
JUAN POSADAS, JR., Collector of Internal Revenue, defendant-
appellant.
Pablo Lorenzo and Delfin Joven for plaintiff-appellant.
Office of the Solicitor-General Hilado for defendant-appellant.
LAUREL, J.:
On October 4, 1932, the plaintiff Pablo Lorenzo, in his capacity as
trustee of the estate of Thomas Hanley, deceased, brought this action in
the Court of First Instance of Zamboanga against the defendant, Juan
Posadas, Jr., then the Collector of Internal Revenue, for the refund of
the amount of P2,052.74, paid by the plaintiff as inheritance tax on the
estate of the deceased, and for the collection of interst thereon at the
rate of 6 per cent per annum, computed from September 15, 1932, the
date when the aforesaid tax was [paid under protest. The defendant set
up a counterclaim for P1,191.27 alleged to be interest due on the tax in
question and which was not included in the original assessment. From
the decision of the Court of First Instance of Zamboanga dismissing
both the plaintiff's complaint and the defendant's counterclaim, both
parties appealed to this court.
It appears that on May 27, 1922, one Thomas Hanley died in
Zamboanga, Zamboanga, leaving a will (Exhibit 5) and considerable
amount of real and personal properties. On june 14, 1922, proceedings
for the probate of his will and the settlement and distribution of his
estate were begun in the Court of First Instance of Zamboanga. The will
was admitted to probate. Said will provides, among other things, as
follows:
4. I direct that any money left by me be given to my nephew
Matthew Hanley.
5. I direct that all real estate owned by me at the time of my
death be not sold or otherwise disposed of for a period of ten
(10) years after my death, and that the same be handled and
managed by the executors, and proceeds thereof to be given
to my nephew, Matthew Hanley, at Castlemore,
Ballaghaderine, County of Rosecommon, Ireland, and that he
be directed that the same be used only for the education of
my brother's children and their descendants.
 6. I direct that ten (10) years after my death my property be
given to the above mentioned Matthew Hanley to be disposed
of in the way he thinks most advantageous.
xxx xxx xxx
8. I state at this time I have one brother living, named Malachi
Hanley, and that my nephew, Matthew Hanley, is a son of my
said brother, Malachi Hanley.
The Court of First Instance of Zamboanga considered it proper for the
best interests of ther estate to appoint a trustee to administer the real
properties which, under the will, were to pass to Matthew Hanley ten
years after the two executors named in the will, was, on March 8, 1924,
appointed trustee. Moore took his oath of office and gave bond on
March 10, 1924. He acted as trustee until February 29, 1932, when he
resigned and the plaintiff herein was appointed in his stead.
During the incumbency of the plaintiff as trustee, the defendant
Collector of Internal Revenue, alleging that the estate left by the
deceased at the time of his death consisted of realty valued at P27,920
and personalty valued at P1,465, and allowing a deduction of P480.81,
assessed against the estate an inheritance tax in the amount of
P1,434.24 which, together with the penalties for deliquency in payment
consisting of a 1 per cent monthly interest from July 1, 1931 to the date
of payment and a surcharge of 25 per cent on the tax, amounted to
P2,052.74. On March 15, 1932, the defendant filed a motion in the
testamentary proceedings pending before the Court of First Instance of
Zamboanga (Special proceedings No. 302) praying that the trustee,
plaintiff herein, be ordered to pay to the Government the said sum of
P2,052.74. The motion was granted. On September 15, 1932, the
plaintiff paid said amount under protest, notifying the defendant at the
same time that unless the amount was promptly refunded suit would be
brought for its recovery. The defendant overruled the plaintiff's protest
and refused to refund the said amount hausted, plaintiff went to court
with the result herein above indicated.
In his appeal, plaintiff contends that the lower court erred:
I. In holding that the real property of Thomas Hanley,
deceased, passed to his instituted heir, Matthew Hanley, from
the moment of the death of the former, and that from the time,
the latter became the owner thereof.
II. In holding, in effect, that there was deliquency in the
payment of inheritance tax due on the estate of said
deceased.
III. In holding that the inheritance tax in question be based
upon the value of the estate upon the death of the testator,
and not, as it should have been held, upon the value thereof
at the expiration of the period of ten years after which,
according to the testator's will, the property could be and was
to be delivered to the instituted heir.
IV. In not allowing as lawful deductions, in the determination
of the net amount of the estate subject to said tax, the
amounts allowed by the court as compensation to the
"trustees" and paid to them from the decedent's estate.
V. In not rendering judgment in favor of the plaintiff and in
denying his motion for new trial.
The defendant-appellant contradicts the theories of the plaintiff and
assigns the following error besides:
The lower court erred in not ordering the plaintiff to pay to the
defendant the sum of P1,191.27, representing part of the
interest at the rate of 1 per cent per month from April 10,
1924, to June 30, 1931, which the plaintiff had failed to pay on
the inheritance tax assessed by the defendant against the
estate of Thomas Hanley.
The following are the principal questions to be decided by this court in
this appeal: (a) When does the inheritance tax accrue and when must it
be satisfied? (b) Should the inheritance tax be computed on the basis of
the value of the estate at the time of the testator's death, or on its value
ten years later? (c) In determining the net value of the estate subject to
tax, is it proper to deduct the compensation due to trustees? (d) What
law governs the case at bar? Should the provisions of Act No. 3606
favorable to the tax-payer be given retroactive effect? (e) Has there
been deliquency in the payment of the inheritance tax? If so, should the
additional interest claimed by the defendant in his appeal be paid by the
estate? Other points of incidental importance, raised by the parties in
their briefs, will be touched upon in the course of this opinion.
(a) The accrual of the inheritance tax is distinct from the obligation to
pay the same. Section 1536 as amended, of the Administrative Code,
imposes the tax upon "every transmission by virtue of inheritance,
devise, bequest, gift mortis causa, or advance in anticipation of
inheritance,devise, or bequest." The tax therefore is upon transmission
or the transfer or devolution of property of a decedent, made effective
by his death. (61 C. J., p. 1592.) It is in reality an excise or privilege tax
imposed on the right to succeed to, receive, or take property by or
under a will or the intestacy law, or deed, grant, or gift to become
operative at or after death. Acording to article 657 of the Civil Code, "the
rights to the succession of a person are transmitted from the moment of
his death." "In other words", said Arellano, C. J., ". . . the heirs succeed
immediately to all of the property of the deceased ancestor. The
property belongs to the heirs at the moment of the death of the ancestor
as completely as if the ancestor had executed and delivered to them a
deed for the same before his death." (Bondad vs. Bondad, 34 Phil.,
232. See also, Mijares vs. Nery, 3 Phil., 195; Suilong & Co., vs. Chio-
Taysan, 12 Phil., 13; Lubrico vs. Arbado, 12 Phil., 391; Innocencio vs.
Gat-Pandan, 14 Phil., 491; Aliasas vs.Alcantara, 16 Phil., 489; Ilustre
vs. Alaras Frondosa, 17 Phil., 321; Malahacan vs. Ignacio, 19 Phil., 434;
Bowa vs. Briones, 38 Phil., 27; Osario vs. Osario & Yuchausti
Steamship Co., 41 Phil., 531; Fule vs. Fule, 46 Phil., 317; Dais vs. Court
of First Instance of Capiz, 51 Phil., 396; Baun vs. Heirs of Baun, 53
Phil., 654.) Plaintiff, however, asserts that while article 657 of the Civil
Code is applicable to testate as well as intestate succession, it operates
only in so far as forced heirs are concerned. But the language of article
657 of the Civil Code is broad and makes no distinction between
different classes of heirs. That article does not speak of forced heirs; it
does not even use the word "heir". It speaks of the rights of succession
and the transmission thereof from the moment of death. The provision
of section 625 of the Code of Civil Procedure regarding the
authentication and probate of a will as a necessary condition to effect
transmission of property does not affect the general rule laid down in
article 657 of the Civil Code. The authentication of a will implies its due
execution but once probated and allowed the transmission is effective
as of the death of the testator in accordance with article 657 of the Civil
Code. Whatever may be the time when actual transmission of the
inheritance takes place, succession takes place in any event at the
moment of the decedent's death. The time when the heirs legally
succeed to the inheritance may differ from the time when the heirs
actually receive such inheritance. "Poco importa", says Manresa
commenting on article 657 of the Civil Code, "que desde el falleimiento
del causante, hasta que el heredero o legatario entre en posesion de
los bienes de la herencia o del legado, transcurra mucho o poco
tiempo, pues la adquisicion ha de retrotraerse al momento de la muerte,
y asi lo ordena el articulo 989, que debe considerarse como
complemento del presente." (5 Manresa, 305; see also, art. 440, par. 1,
Civil Code.) Thomas Hanley having died on May 27, 1922, the
inheritance tax accrued as of the date.
From the fact, however, that Thomas Hanley died on May 27, 1922, it
does not follow that the obligation to pay the tax arose as of the date.
The time for the payment on inheritance tax is clearly fixed by section
1544 of the Revised Administrative Code as amended by Act No. 3031,
in relation to section 1543 of the same Code. The two sections follow:
SEC. 1543. Exemption of certain acquisitions and
transmissions. — The following shall not be taxed:
(a) The merger of the usufruct in the owner of the
naked title.
(b) The transmission or delivery of the inheritance or
legacy by the fiduciary heir or legatee to the
trustees.
(c) The transmission from the first heir, legatee, or
donee in favor of another beneficiary, in accordance
with the desire of the predecessor.
In the last two cases, if the scale of taxation appropriate to the
new beneficiary is greater than that paid by the first, the
former must pay the difference.
SEC. 1544. When tax to be paid. — The tax fixed in this
article shall be paid:
(a) In the second and third cases of the next
preceding section, before entrance into possession
of the property.
(b) In other cases, within the six months subsequent
to the death of the predecessor; but if judicial
testamentary or intestate proceedings shall be
instituted prior to the expiration of said period, the
payment shall be made by the executor or
administrator before delivering to each beneficiary
his share.
If the tax is not paid within the time hereinbefore prescribed,
interest at the rate of twelve per centum per annum shall be
added as part of the tax; and to the tax and interest due and
unpaid within ten days after the date of notice and demand
thereof by the collector, there shall be further added a
surcharge of twenty-five per centum.
A certified of all letters testamentary or of admisitration shall
be furnished the Collector of Internal Revenue by the Clerk of
Court within thirty days after their issuance.
It should be observed in passing that the word "trustee", appearing in
subsection (b) of section 1543, should read "fideicommissary" or "cestui
que trust". There was an obvious mistake in translation from the
Spanish to the English version.
The instant case does fall under subsection (a), but under subsection
(b), of section 1544 above-quoted, as there is here no fiduciary heirs,
first heirs, legatee or donee. Under the subsection, the tax should have
been paid before the delivery of the properties in question to P. J. M.
Moore as trustee on March 10, 1924.
(b) The plaintiff contends that the estate of Thomas Hanley, in so far as
the real properties are concerned, did not and could not legally pass to
the instituted heir, Matthew Hanley, until after the expiration of ten years
from the death of the testator on May 27, 1922 and, that the inheritance
tax should be based on the value of the estate in 1932, or ten years
after the testator's death. The plaintiff introduced evidence tending to
show that in 1932 the real properties in question had a reasonable
value of only P5,787. This amount added to the value of the personal
property left by the deceased, which the plaintiff admits is P1,465,
would generate an inheritance tax which, excluding deductions, interest
and surcharge, would amount only to about P169.52.
If death is the generating source from which the power of the estate to
impose inheritance taxes takes its being and if, upon the death of the
decedent, succession takes place and the right of the estate to tax
vests instantly, the tax should be measured by the vlaue of the estate
as it stood at the time of the decedent's death, regardless of any
subsequent contingency value of any subsequent increase or decrease
in value. (61 C. J., pp. 1692, 1693; 26 R. C. L., p. 232; Blakemore and
Bancroft, Inheritance Taxes, p. 137. See also Knowlton vs. Moore, 178
U.S., 41; 20 Sup. Ct. Rep., 747; 44 Law. ed., 969.) "The right of the
state to an inheritance tax accrues at the moment of death, and hence
is ordinarily measured as to any beneficiary by the value at that time of
such property as passes to him. Subsequent appreciation or
depriciation is immaterial." (Ross, Inheritance Taxation, p. 72.)
Our attention is directed to the statement of the rule in Cyclopedia of
Law of and Procedure (vol. 37, pp. 1574, 1575) that, in the case of
contingent remainders, taxation is postponed until the estate vests in
possession or the contingency is settled. This rule was formerly
followed in New York and has been adopted in Illinois, Minnesota,
Massachusetts, Ohio, Pennsylvania and Wisconsin. This rule, horever,
is by no means entirely satisfactory either to the estate or to those
interested in the property (26 R. C. L., p. 231.). Realizing, perhaps, the
defects of its anterior system, we find upon examination of cases and
authorities that New York has varied and now requires the immediate
appraisal of the postponed estate at its clear market value and the
payment forthwith of the tax on its out of the corpus of the estate
transferred. (In re Vanderbilt, 172 N. Y., 69; 69 N. E., 782; In re Huber,
86 N. Y. App. Div., 458; 83 N. Y. Supp., 769; Estate of Tracy, 179 N. Y.,
501; 72 N. Y., 519; Estate of Brez, 172 N. Y., 609; 64 N. E., 958; Estate
of Post, 85 App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun vs.
Lord Advocate, 1 Peter. Sc. App., 970; 3 Macq. H. L., 659; 23 Eng. Rul.
Cas., 888.) California adheres to this new rule (Stats. 1905, sec. 5, p.
343).
But whatever may be the rule in other jurisdictions, we hold that a
transmission by inheritance is taxable at the time of the predecessor's
death, notwithstanding the postponement of the actual possession or
enjoyment of the estate by the beneficiary, and the tax measured by the
value of the property transmitted at that time regardless of its
appreciation or depreciation.
(c) Certain items are required by law to be deducted from the appraised
gross in arriving at the net value of the estate on which the inheritance
tax is to be computed (sec. 1539, Revised Administrative Code). In the
case at bar, the defendant and the trial court allowed a deduction of
only P480.81. This sum represents the expenses and disbursements of
the executors until March 10, 1924, among which were their fees and
the proven debts of the deceased. The plaintiff contends that the
compensation and fees of the trustees, which aggregate P1,187.28
(Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted
under section 1539 of the Revised Administrative Code which provides,
in part, as follows: "In order to determine the net sum which must bear
the tax, when an inheritance is concerned, there shall be deducted, in
case of a resident, . . . the judicial expenses of the testamentary or
intestate proceedings, . . . ."
A trustee, no doubt, is entitled to receive a fair compensation for his
services (Barney vs. Saunders, 16 How., 535; 14 Law. ed., 1047). But
from this it does not follow that the compensation due him may lawfully
be deducted in arriving at the net value of the estate subject to tax.
There is no statute in the Philippines which requires trustees'
commissions to be deducted in determining the net value of the estate
subject to inheritance tax (61 C. J., p. 1705). Furthermore, though a
testamentary trust has been created, it does not appear that the testator
intended that the duties of his executors and trustees should be
separated. (Ibid.; In re Vanneck's Estate, 161 N. Y. Supp., 893; 175
App. Div., 363; In re Collard's Estate, 161 N. Y. Supp., 455.) On the
contrary, in paragraph 5 of his will, the testator expressed the desire
that his real estate be handled and managed by his executors until the
expiration of the period of ten years therein provided. Judicial expenses
are expenses of administration (61 C. J., p. 1705) but, in State vs.
Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it
was said: ". . . The compensation of a trustee, earned, not in the
administration of the estate, but in the management thereof for the
benefit of the legatees or devises, does not come properly within the
class or reason for exempting administration expenses. . . . Service
rendered in that behalf have no reference to closing the estate for the
purpose of a distribution thereof to those entitled to it, and are not
required or essential to the perfection of the rights of the heirs or
legatees. . . . Trusts . . . of the character of that here before the court,
are created for the the benefit of those to whom the property ultimately
passes, are of voluntary creation, and intended for the preservation of
the estate. No sound reason is given to support the contention that such
expenses should be taken into consideration in fixing the value of the
estate for the purpose of this tax."
(d) The defendant levied and assessed the inheritance tax due from the
estate of Thomas Hanley under the provisions of section 1544 of the
Revised Administrative Code, as amended by section 3 of Act No.
3606. But Act No. 3606 went into effect on January 1, 1930. It,
therefore, was not the law in force when the testator died on May 27,
1922. The law at the time was section 1544 above-mentioned, as
amended by Act No. 3031, which took effect on March 9, 1922.
It is well-settled that inheritance taxation is governed by the statute in
force at the time of the death of the decedent (26 R. C. L., p. 206; 4
Cooley on Taxation, 4th ed., p. 3461). The taxpayer can not foresee
and ought not to be required to guess the outcome of pending
measures. Of course, a tax statute may be made retroactive in its
operation. Liability for taxes under retroactive legislation has been "one
of the incidents of social life." (Seattle vs. Kelleher, 195 U. S., 360; 49
Law. ed., 232 Sup. Ct. Rep., 44.) But legislative intent that a tax statute
should operate retroactively should be perfectly clear. (Scwab vs.
Doyle, 42 Sup. Ct. Rep., 491; Smietanka vs. First Trust & Savings
Bank, 257 U. S., 602; Stockdale vs. Insurance Co., 20 Wall., 323; Lunch
vs. Turrish, 247 U. S., 221.) "A statute should be considered as
prospective in its operation, whether it enacts, amends, or repeals an
inheritance tax, unless the language of the statute clearly demands or
expresses that it shall have a retroactive effect, . . . ." (61 C. J., P.
1602.) Though the last paragraph of section 5 of Regulations No. 65 of
the Department of Finance makes section 3 of Act No. 3606, amending
section 1544 of the Revised Administrative Code, applicable to all
estates the inheritance taxes due from which have not been paid, Act
No. 3606 itself contains no provisions indicating legislative intent to give
it retroactive effect. No such effect can begiven the statute by this court.
The defendant Collector of Internal Revenue maintains, however, that
certain provisions of Act No. 3606 are more favorable to the taxpayer
than those of Act No. 3031, that said provisions are penal in nature and,
therefore, should operate retroactively in conformity with the provisions
of article 22 of the Revised Penal Code. This is the reason why he
applied Act No. 3606 instead of Act No. 3031. Indeed, under Act No.
3606, (1) the surcharge of 25 per cent is based on the tax only, instead
of on both the tax and the interest, as provided for in Act No. 3031, and
(2) the taxpayer is allowed twenty days from notice and demand by rthe
Collector of Internal Revenue within which to pay the tax, instead of ten
days only as required by the old law.
Properly speaking, a statute is penal when it imposes punishment for an
offense committed against the state which, under the Constitution, the
Executive has the power to pardon. In common use, however, this
sense has been enlarged to include within the term "penal statutes" all
status which command or prohibit certain acts, and establish penalties
for their violation, and even those which, without expressly prohibiting
certain acts, impose a penalty upon their commission (59 C. J., p.
1110). Revenue laws, generally, which impose taxes collected by the
means ordinarily resorted to for the collection of taxes are not classed
as penal laws, although there are authorities to the contrary.
(See Sutherland, Statutory Construction, 361; Twine Co. vs.
Worthington, 141 U. S., 468; 12 Sup. Ct., 55; Rice vs. U. S., 4 C. C. A.,
104; 53 Fed., 910; Com. vs. Standard Oil Co., 101 Pa. St., 150; State
vs. Wheeler, 44 P., 430; 25 Nev. 143.) Article 22 of the Revised Penal
Code is not applicable to the case at bar, and in the absence of clear
legislative intent, we cannot give Act No. 3606 a retroactive effect.
(e) The plaintiff correctly states that the liability to pay a tax may arise at
a certain time and the tax may be paid within another given time. As
stated by this court, "the mere failure to pay one's tax does not render
one delinqent until and unless the entire period has eplased within
which the taxpayer is authorized by law to make such payment without
being subjected to the payment of penalties for fasilure to pay his taxes
within the prescribed period." (U. S. vs. Labadan, 26 Phil., 239.)
The defendant maintains that it was the duty of the executor to pay the
inheritance tax before the delivery of the decedent's property to the
trustee. Stated otherwise, the defendant contends that delivery to the
trustee was delivery to the cestui que trust, the beneficiery in this case,
within the meaning of the first paragraph of subsection (b) of section
1544 of the Revised Administrative Code. This contention is well taken
and is sustained. The appointment of P. J. M. Moore as trustee was
made by the trial court in conformity with the wishes of the testator as
expressed in his will. It is true that the word "trust" is not mentioned or
used in the will but the intention to create one is clear. No particular or
technical words are required to create a testamentary trust (69 C. J., p.
711). The words "trust" and "trustee", though apt for the purpose, are
not necessary. In fact, the use of these two words is not conclusive on
the question that a trust is created (69 C. J., p. 714). "To create a trust
by will the testator must indicate in the will his intention so to do by
using language sufficient to separate the legal from the equitable
estate, and with sufficient certainty designate the beneficiaries, their
interest in the ttrust, the purpose or object of the trust, and the property
or subject matter thereof. Stated otherwise, to constitute a valid
testamentary trust there must be a concurrence of three circumstances:
(1) Sufficient words to raise a trust; (2) a definite subject; (3) a certain or
ascertain object; statutes in some jurisdictions expressly or in effect so
providing." (69 C. J., pp. 705,706.) There is no doubt that the testator
intended to create a trust. He ordered in his will that certain of his
properties be kept together undisposed during a fixed period, for a
stated purpose. The probate court certainly exercised sound judgment
in appointment a trustee to carry into effect the provisions of the will
(see sec. 582, Code of Civil Procedure).
P. J. M. Moore became trustee on March 10, 1924. On that date trust
estate vested in him (sec. 582 in relation to sec. 590, Code of Civil
Procedure). The mere fact that the estate of the deceased was placed
in trust did not remove it from the operation of our inheritance tax laws
or exempt it from the payment of the inheritance tax. The corresponding
inheritance tax should have been paid on or before March 10, 1924, to
escape the penalties of the laws. This is so for the reason already
stated that the delivery of the estate to the trustee was in esse delivery
of the same estate to the cestui que trust, the beneficiary in this case. A
trustee is but an instrument or agent for the cestui que trust (Shelton vs.
King, 299 U. S., 90; 33 Sup. Ct. Rep., 689; 57 Law. ed., 1086). When
Moore accepted the trust and took possesson of the trust estate he
thereby admitted that the estate belonged not to him but to his cestui
que trust (Tolentino vs. Vitug, 39 Phil.,126, cited in 65 C. J., p. 692, n.
63). He did not acquire any beneficial interest in the estate. He took
such legal estate only as the proper execution of the trust required (65
C. J., p. 528) and, his estate ceased upon the fulfillment of the testator's
wishes. The estate then vested absolutely in the beneficiary (65 C. J., p.
542).
The highest considerations of public policy also justify the conclusion
we have reached. Were we to hold that the payment of the tax could be
postponed or delayed by the creation of a trust of the type at hand, the
result would be plainly disastrous. Testators may provide, as Thomas
Hanley has provided, that their estates be not delivered to their
beneficiaries until after the lapse of a certain period of time. In the case
at bar, the period is ten years. In other cases, the trust may last for fifty
years, or for a longer period which does not offend the rule against
petuities. The collection of the tax would then be left to the will of a
private individual. The mere suggestion of this result is a sufficient
warning against the accpetance of the essential to the very exeistence
of government. (Dobbins vs. Erie Country, 16 Pet., 435; 10 Law. ed.,
1022; Kirkland vs. Hotchkiss, 100 U. S., 491; 25 Law. ed., 558; Lane
County vs. Oregon, 7 Wall., 71; 19 Law. ed., 101; Union Refrigerator
Transit Co. vs. Kentucky, 199 U. S., 194; 26 Sup. Ct. Rep., 36; 50 Law.
ed., 150; Charles River Bridge vs. Warren Bridge, 11 Pet., 420; 9 Law.
ed., 773.) The obligation to pay taxes rests not upon the privileges
enjoyed by, or the protection afforded to, a citizen by the government
but upon the necessity of money for the support of the state (Dobbins
vs. Erie Country, supra). For this reason, no one is allowed to object to
or resist the payment of taxes solely because no personal benefit to him
can be pointed out. (Thomas vs. Gay, 169 U. S., 264; 18 Sup. Ct. Rep.,
340; 43 Law. ed., 740.) While courts will not enlarge, by construction,
the government's power of taxation (Bromley vs. McCaughn, 280 U. S.,
124; 74 Law. ed., 226; 50 Sup. Ct. Rep., 46) they also will not place
upon tax laws so loose a construction as to permit evasions on merely
fanciful and insubstantial distictions. (U. S. vs. Watts, 1 Bond., 580; Fed.
Cas. No. 16,653; U. S. vs. Wigglesirth, 2 Story, 369; Fed. Cas. No.
16,690, followed in Froelich & Kuttner vs. Collector of Customs, 18 Phil.,
461, 481; Castle Bros., Wolf & Sons vs. McCoy, 21 Phil., 300; Muñoz &
Co. vs. Hord, 12 Phil., 624; Hongkong & Shanghai Banking Corporation
vs. Rafferty, 39 Phil., 145; Luzon Stevedoring Co. vs. Trinidad, 43 Phil.,
803.) When proper, a tax statute should be construed to avoid the
possibilities of tax evasion. Construed this way, the statute, without
resulting in injustice to the taxpayer, becomes fair to the government.
That taxes must be collected promptly is a policy deeply intrenched in
our tax system. Thus, no court is allowed to grant injunction to restrain
the collection of any internal revenue tax ( sec. 1578, Revised
Administrative Code; Sarasola vs. Trinidad, 40 Phil., 252). In the case of
Lim Co Chui vs. Posadas (47 Phil., 461), this court had occassion to
demonstrate trenchment adherence to this policy of the law. It held that
"the fact that on account of riots directed against the Chinese on
October 18, 19, and 20, 1924, they were prevented from praying their
internal revenue taxes on time and by mutual agreement closed their
homes and stores and remained therein, does not authorize the
Collector of Internal Revenue to extend the time prescribed for the
payment of the taxes or to accept them without the additional penalty of
twenty five per cent." (Syllabus, No. 3.)
". . . It is of the utmost importance," said the Supreme Court of the
United States, ". . . that the modes adopted to enforce the taxes levied
should be interfered with as little as possible. Any delay in the
proceedings of the officers, upon whom the duty is developed of
collecting the taxes, may derange the operations of government, and
thereby, cause serious detriment to the public." (Dows vs. Chicago, 11
Wall., 108; 20 Law. ed., 65, 66; Churchill and Tait vs. Rafferty, 32 Phil.,
580.)
It results that the estate which plaintiff represents has been delinquent
in the payment of inheritance tax and, therefore, liable for the payment
of interest and surcharge provided by law in such cases.
The delinquency in payment occurred on March 10, 1924, the date
when Moore became trustee. The interest due should be computed
from that date and it is error on the part of the defendant to compute it
one month later. The provisions cases is mandatory (see and cf. Lim Co
Chui vs. Posadas, supra), and neither the Collector of Internal
Revenuen or this court may remit or decrease such interest, no matter
how heavily it may burden the taxpayer.
To the tax and interest due and unpaid within ten days after the date of
notice and demand thereof by the Collector of Internal Revenue, a
surcharge of twenty-five per centum should be added (sec. 1544,
subsec. (b), par. 2, Revised Administrative Code). Demand was made
by the Deputy Collector of Internal Revenue upon Moore in a
communiction dated October 16, 1931 (Exhibit 29). The date fixed for
the payment of the tax and interest was November 30, 1931. November
30 being an official holiday, the tenth day fell on December 1, 1931. As
the tax and interest due were not paid on that date, the estate became
liable for the payment of the surcharge.
In view of the foregoing, it becomes unnecessary for us to discuss the
fifth error assigned by the plaintiff in his brief.
We shall now compute the tax, together with the interest and surcharge
due from the estate of Thomas Hanley inaccordance with the
conclusions we have reached.
At the time of his death, the deceased left real properties valued at
P27,920 and personal properties worth P1,465, or a total of P29,385.
Deducting from this amount the sum of P480.81, representing allowable
deductions under secftion 1539 of the Revised Administrative Code, we
have P28,904.19 as the net value of the estate subject to inheritance
tax.
The primary tax, according to section 1536, subsection (c), of the
Revised Administrative Code, should be imposed at the rate of one per
centum upon the first ten thousand pesos and two per centum upon the
amount by which the share exceed thirty thousand pesos, plus an
additional two hundred per centum. One per centum of ten thousand
pesos is P100. Two per centum of P18,904.19 is P378.08. Adding to
these two sums an additional two hundred per centum, or P965.16, we
have as primary tax, correctly computed by the defendant, the sum of
P1,434.24.
To the primary tax thus computed should be added the sums collectible
under section 1544 of the Revised Administrative Code. First should be
added P1,465.31 which stands for interest at the rate of twelve per
centum per annum from March 10, 1924, the date of delinquency, to
September 15, 1932, the date of payment under protest, a period
covering 8 years, 6 months and 5 days. To the tax and interest thus
computed should be added the sum of P724.88, representing a
surhcarge of 25 per cent on both the tax and interest, and also P10, the
compromise sum fixed by the defendant (Exh. 29), giving a grand total
of P3,634.43.
As the plaintiff has already paid the sum of P2,052.74, only the sums of
P1,581.69 is legally due from the estate. This last sum is P390.42 more
than the amount demanded by the defendant in his counterclaim. But,
as we cannot give the defendant more than what he claims, we must
hold that the plaintiff is liable only in the sum of P1,191.27 the amount
stated in the counterclaim.
The judgment of the lower court is accordingly modified, with costs
against the plaintiff in both instances. So ordered.

G.R. No. L-4963 January 29, 1953
MARIA USON, plaintiff-appellee,
vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO
NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA,
Jr., defendants-appellants.
Priscilo Evangelista for appellee.
Brigido G. Estrada for appellant.
BAUTISTA ANGELO, J.:
This is an action for recovery of the ownership and possession of five
(5) parcels of land situated in the Municipality of Labrador, Province of
Pangasinan, filed by Maria Uson against Maria del Rosario and her four
children named Concepcion, Conrado, Dominador, and Faustino,
surnamed Nebreda, who are all of minor age, before the Court of First
Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his
death in 1945 left the lands involved in this litigation. Faustino Nebreda
left no other heir except his widow Maria Uson. However, plaintiff claims
that when Faustino Nebreda died in 1945, his common-law wife Maria
del Rosario took possession illegally of said lands thus depriving her of
their possession and enjoyment.
Defendants in their answer set up as special defense that on February
21, 1931, Maria Uson and her husband, the late Faustino Nebreda,
executed a public document whereby they agreed to separate as
husband and wife and, in consideration of their separation, Maria Uson
was given a parcel of land by way of alimony and in return she
renounced her right to inherit any other property that may be left by her
husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the
court rendered decision ordering the defendants to restore to the
plaintiff the ownership and possession of the lands in dispute without
special pronouncement as to costs. Defendants interposed the present
appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife
of Faustino Nebreda, former owner of the five parcels of lands litigated
in the present case. There is likewise no dispute that Maria del Rosario,
one of the defendants-appellants, was merely a common-law wife of the
late Faustino Nebreda with whom she had four illegitimate children, her
now co-defendants. It likewise appears that Faustino Nebreda died in
1945 much prior to the effectivity of the new Civil Code. With this
background, it is evident that when Faustino Nebreda died in 1945 the
five parcels of land he was seized of at the time passed from the
moment of his death to his only heir, his widow Maria Uson (Article 657,
old Civil Code).As this Court aptly said, "The property belongs to the
heirs at the moment of the death of the ancestor as completely as if the
ancestor had executed and delivered to them a deed for the same
before his death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that
moment, therefore, the rights of inheritance of Maria Uson over the
lands in question became vested.
The claim of the defendants that Maria Uson had relinquished her right
over the lands in question because she expressly renounced to inherit
any future property that her husband may acquire and leave upon his
death in the deed of separation they had entered into on February 21,
1931, cannot be entertained for the simple reason that future
inheritance cannot be the subject of a contract nor can it be renounced
(1 Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs.
Osorio and Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor
defendants are illegitimate children of the late Faustino Nebreda and
under the old Civil Code are not entitled to any successional rights,
however, under the new Civil Code which became in force in June,
1950, they are given the status and rights of natural children and are
entitled to the successional rights which the law accords to the latter
(article 2264 and article 287, new Civil Code), and because these
successional rights were declared for the first time in the new code, they
shall be given retroactive effect even though the event which gave rise
to them may have occurred under the prior legislation (Article 2253, new
Civil Code).
There is no merit in this claim. Article 2253 above referred to provides
indeed that rights which are declared for the first time shall have
retroactive effect even though the event which gave rise to them may
have occurred under the former legislation, but this is so only when the
new rights do not prejudice any vested or acquired right of the same
origin. Thus, said article provides that "if a right should be declared for
the first time in this Code, it shall be effective at once, even though the
act or event which gives rise thereto may have been done or may have
occurred under the prior legislation, provided said new right does not
prejudice or impair any vested or acquired right, of the same origin." As
already stated in the early part of this decision, the right of ownership of
Maria Uson over the lands in question became vested in 1945 upon the
death of her late husband and this is so because of the imperative
provision of the law which commands that the rights to succession are
transmitted from the moment of death (Article 657, old Civil Code). The
new right recognized by the new Civil Code in favor of the illegitimate
children of the deceased cannot, therefore, be asserted to the
impairment of the vested right of Maria Uson over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was
lying in state, in a gesture of pity or compassion, agreed to assign the
lands in question to the minor children for the reason that they were
acquired while the deceased was living with their mother and Maria
Uson wanted to assuage somewhat the wrong she has done to them,
this much can be said; apart from the fact that this claim is disputed, we
are of the opinion that said assignment, if any, partakes of the nature of
a donation of real property, inasmuch as it involves no material
consideration, and in order that it may be valid it shall be made in a
public document and must be accepted either in the same document or
in a separate one (Article 633, old Civil Code). Inasmuch as this
essential formality has not been followed, it results that the alleged
assignment or donation has no valid effect.
WHEREFORE, the decision appealed from is affirmed, without costs.

G.R. No. L-41715 June 18, 1976
ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and
PONCIANO BONILLA (their father) who represents the
minors, petitioners,
vs.
LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA
BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of
JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court
of First Instance of Abra, respondents.
Federico Paredes for petitioners.
Demetrio V. Pre for private respondents.
MARTIN, J:
This is a petition for review 1 of the Order of the Court of First Instance
of Abra in Civil Case No. 856, entitled Fortunata Barcena vs. Leon
Barcena, et al., denying the motions for reconsideration of its order
dismissing the complaint in the aforementioned case.
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio
Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla, instituted a
civil action in the Court of First Instance of Abra, to quiet title over
certain parcels of land located in Abra.
On May 9, 1975, defendants filed a written motion to dismiss the
complaint, but before the hearing of the motion to dismiss, the counsel
for the plaintiff moved to amend the complaint in order to include certain
allegations therein. The motion to amend the complaint was granted
and on July 17, 1975, plaintiffs filed their amended complaint.
On August 4, 1975, the defendants filed another motion to dismiss the
complaint on the ground that Fortunata Barcena is dead and, therefore,
has no legal capacity to sue. Said motion to dismiss was heard on
August 14, 1975. In said hearing, counsel for the plaintiff confirmed the
death of Fortunata Barcena, and asked for substitution by her minor
children and her husband, the petitioners herein; but the court after the
hearing immediately dismissed the case on the ground that a dead
person cannot be a real party in interest and has no legal personality to
sue.
On August 19, 1975, counsel for the plaintiff received a copy of the
order dismissing the complaint and on August 23, 1975, he moved to
set aside the order of the dismissal pursuant to Sections 16 and 17 of
Rule 3 of the Rules of Court. 2
On August 28, 1975, the court denied the motion for reconsideration
filed by counsel for the plaintiff for lack of merit. On September 1, 1975,
counsel for deceased plaintiff filed a written manifestation praying that
the minors Rosalio Bonilla and Salvacion Bonilla be allowed to
substitute their deceased mother, but the court denied the counsel's
prayer for lack of merit. From the order, counsel for the deceased
plaintiff filed a second motion for reconsideration of the order dismissing
the complaint claiming that the same is in violation of Sections 16 and
17 of Rule 3 of the Rules of Court but the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order
dismissing the complaint in Civil Case No. 856 and its orders denying
the motion for reconsideration of said order of dismissal. While it is true
that a person who is dead cannot sue in court, yet he can be substituted
by his heirs in pursuing the case up to its completion. The records of
this case show that the death of Fortunata Barcena took place on July
9, 1975 while the complaint was filed on March 31, 1975. This means
that when the complaint was filed on March 31, 1975, Fortunata
Barcena was still alive, and therefore, the court had acquired jurisdiction
over her person. If thereafter she died, the Rules of Court prescribes the
procedure whereby a party who died during the pendency of the
proceeding can be substituted. Under Section 16, Rule 3 of the Rules of
Court "whenever a party to a pending case dies ... it shall be the duty of
his attorney to inform the court promptly of such death ... and to give the
name and residence of his executor, administrator, guardian or other
legal representatives." This duty was complied with by the counsel for
the deceased plaintiff when he manifested before the respondent Court
that Fortunata Barcena died on July 9, 1975 and asked for the proper
substitution of parties in the case. The respondent Court, however,
instead of allowing the substitution, dismissed the complaint on the
ground that a dead person has no legal personality to sue. This is a
grave error. Article 777 of the Civil Code provides "that the rights to the
succession are transmitted from the moment of the death of the
decedent." From the moment of the death of the decedent, the heirs
become the absolute owners of his property, subject to the rights and
obligations of the decedent, and they cannot be deprived of their rights
thereto except by the methods provided for by law. 3 The moment of
death is the determining factor when the heirs acquire a definite right to
the inheritance whether such right be pure or contingent. 4 The right of
the heirs to the property of the deceased vests in them even before
judicial declaration of their being heirs in the testate or intestate
proceedings. 5 When Fortunata Barcena, therefore, died her claim or
right to the parcels of land in litigation in Civil Case No. 856, was not
extinguished by her death but was transmitted to her heirs upon her
death. Her heirs have thus acquired interest in the properties in litigation
and became parties in interest in the case. There is, therefore, no
reason for the respondent Court not to allow their substitution as parties
in interest for the deceased plaintiff.
Under Section 17, Rule 3 of the Rules of Court "after a party dies and
the claim is not thereby extinguished, the court shall order, upon proper
notice, the legal representative of the deceased to appear and be
substituted for the deceased, within such time as may be granted ... ."
The question as to whether an action survives or not depends on the
nature of the action and the damage sued for. 6 In the causes of action
which survive the wrong complained affects primarily and principally
property and property rights, the injuries to the person being merely
incidental, while in the causes of action which do not survive the injury
complained of is to the person, the property and rights of property
affected being incidental. 7 Following the foregoing criterion the claim of
the deceased plaintiff which is an action to quiet title over the parcels of
land in litigation affects primarily and principally property and property
rights and therefore is one that survives even after her death. It is,
therefore, the duty of the respondent Court to order the legal
representative of the deceased plaintiff to appear and to be substituted
for her. But what the respondent Court did, upon being informed by the
counsel for the deceased plaintiff that the latter was dead, was to
dismiss the complaint. This should not have been done for under the
same Section 17, Rule 3 of the Rules of Court, it is even the duty of the
court, if the legal representative fails to appear, to order the opposing
party to procure the appointment of a legal representative of the
deceased. In the instant case the respondent Court did not have to
bother ordering the opposing party to procure the appointment of a legal
representative of the deceased because her counsel has not only asked
that the minor children be substituted for her but also suggested that
their uncle be appointed as guardian ad litem for them because their
father is busy in Manila earning a living for the family. But the
respondent Court refused the request for substitution on the ground that
the children were still minors and cannot sue in court. This is another
grave error because the respondent Court ought to have known that
under the same Section 17, Rule 3 of the Rules of Court, the court is
directed to appoint a guardian ad litem for the minor heirs. Precisely in
the instant case, the counsel for the deceased plaintiff has suggested to
the respondent Court that the uncle of the minors be appointed to act as
guardian ad litem for them. Unquestionably, the respondent Court has
gravely abused its discretion in not complying with the clear provision of
the Rules of Court in dismissing the complaint of the plaintiff in Civil
Case No. 856 and refusing the substitution of parties in the case.
IN VIEW OF THE FOREGOING, the order of the respondent Court
dismissing the complaint in Civil Case No. 856 of the Court of First
Instance of Abra and the motions for reconsideration of the order of
dismissal of said complaint are set aside and the respondent Court is
hereby directed to allow the substitution of the minor children, who are
the petitioners therein for the deceased plaintiff and to appoint a
qualified person as guardian ad litem for them. Without pronouncement
as to costs.
SO ORDERED.
G.R. No. L-28040 August 18, 1972
TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA,
administrator-appellee; JOSE DE BORJA, as administrator,
CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO DE
BORJA (deceased) as Children of Josefa Tangco, appellees,
vs.
TASIANA VDA. DE DE BORJA, Special Administratrix of the
Testate Estate of Francisco de Borja, appellant. .
G.R. No L-28568 August 18, 1972
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA,
TASIANA O. VDA. DE DE BORJA, special Administratrix appellee,
vs.
JOSE DE BORJA, oppositor-appellant.
G.R. No. L-28611 August 18, 1972
TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate
Estate of the late Francisco de Borja, plaintiff-appellee,
vs.
JOSE DE BORJA, as Administrator of the Testate Estate of the late
Josefa Tangco, defendant-appellant.
L-28040
Pelaez, Jalandoni & Jamir for administrator-appellee.
Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
L-28568
Sevilla & Aquino for special administratrix-appellee.
Pelaez, Jalandoni & Jamir for oppositor-appellant.
L-28611
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant.
REYES, J.B.L., J.:p
Of these cases, the first, numbered L-28040 is an appeal by Tasiana
Ongsingco Vda. de de Borja, special administratrix of the testate estate
of Francisco de Borja,1 from the approval of a compromise agreement
by the Court of First Instance of Rizal, Branch I, in its Special
Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco,
Jose de Borja, Administrator".
Case No. L-28568 is an appeal by administrator Jose Borja from the
disapproval of the same compromise agreement by the Court of First
Instance of Nueva Ecija, Branch II, in its Special Proceeding No. 832,
entitled, "Testate Estate of Francisco de Borja, Tasiana O. Vda. de de
Borja, Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de Borja from
the decision of the Court of First Instance of Rizal, Branch X, in its Civil
Case No. 7452, declaring the Hacienda Jalajala Poblacion, which is the
main object of the aforesaid compromise agreement, as the separate
and exclusive property of the late Francisco de Borja and not a conjugal
asset of the community with his first wife, Josefa Tangco, and that said
hacienda pertains exclusively to his testate estate, which is under
administrator in Special Proceeding No. 832 of the Court of First
Instance of Nueva Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his wife
Josefa Tangco on 6 October 1940, filed a petition for the probate of her
will which was docketed as Special Proceeding No. R-7866 of the Court
of First Instance of Rizal, Branch I. The will was probated on 2 April
1941. In 1946, Francisco de Borja was appointed executor and
administrator: in 1952, their son, Jose de Borja, was appointed co-
administrator. When Francisco died, on 14 April 1954, Jose became the
sole administrator of the testate estate of his mother, Josefa Tangco.
While a widower Francisco de Borja allegedly took unto himself a
second wife, Tasiana Ongsingco. Upon Francisco's death, Tasiana
instituted testate proceedings in the Court of First Instance of Nueva
Ecija, where, in 1955, she was appointed special administratrix. The
validity of Tasiana's marriage to Francisco was questioned in said
proceeding.
The relationship between the children of the first marriage and Tasiana
Ongsingco has been plagued with several court suits and counter-suits;
including the three cases at bar, some eighteen (18) cases remain
pending determination in the courts. The testate estate of Josefa
Tangco alone has been unsettled for more than a quarter of a century.
In order to put an end to all these litigations, a compromise agreement
was entered into on 12 October 1963,2 by and between "[T]he heir and
son of Francisco de Borja by his first marriage, namely, Jose de Borja
personally and as administrator of the Testate Estate of Josefa
Tangco," and "[T]he heir and surviving spouse of Francisco de Borja by
his second marriage, Tasiana Ongsingco Vda. de Borja, assisted by her
lawyer, Atty. Luis Panaguiton Jr." The terms and conditions of the
compromise agreement are as follows:
AGREEMENT
THIS AGREEMENT made and entered into by and
between
The heir and son of Francisco de Borja by his first
marriage, namely, Jose de Borja personally and as
administrator of the Testate Estate of Josefa
Tangco,
AND
The heir and surviving spouse of Francisco de Borja
by his second marriage, Tasiana Ongsingco Vda.
de Borja, assisted by her lawyer, Atty. Luis
Panaguiton Jr.
WITNESSETH
THAT it is the mutual desire of all the parties herein
terminate and settle, with finality, the various court
litigations, controversies, claims, counterclaims,
etc., between them in connection with the
administration, settlement, partition, adjudication
and distribution of the assets as well as liabilities of
the estates of Francisco de Borja and Josefa
Tangco, first spouse of Francisco de Borja.
THAT with this end in view, the parties herein have
agreed voluntarily and without any reservations to
enter into and execute this agreement under the
following terms and conditions:
1. That the parties agree to sell the Poblacion
portion of the Jalajala properties situated in Jalajala,
Rizal, presently under administration in the Testate
Estate of Josefa Tangco (Sp. Proc. No. 7866,
Rizal), more specifically described as follows:
Linda al Norte con el Rio
Puwang que la separa de la
jurisdiccion del Municipio de
Pililla de la Provincia de Rizal, y
con el pico del Monte
Zambrano; al Oeste con Laguna
de Bay; por el Sur con los
herederos de Marcelo de Borja;
y por el Este con los terrenos de
la Familia Maronilla
with a segregated area of approximately 1,313
hectares at the amount of P0.30 per square meter.
2. That Jose de Borja agrees and obligates himself
to pay Tasiana Ongsingco Vda. de de Borja the
total amount of Eight Hundred Thousand Pesos
(P800,000) Philippine Currency, in cash, which
represent P200,000 as his share in the payment
and P600,000 as pro-rata shares of the heirs
Crisanto, Cayetano and Matilde, all surnamed de
Borja and this shall be considered as full and
complete payment and settlement of her hereditary
share in the estate of the late Francisco de Borja as
well as the estate of Josefa Tangco, Sp. Proc. No.
832-Nueva Ecija and Sp. Proc. No. 7866-Rizal,
respectively, and to any properties bequeathed or
devised in her favor by the late Francisco de Borja
by Last Will and Testament or by Donation Inter
Vivos or Mortis Causa or purportedly conveyed to
her for consideration or otherwise. The funds for this
payment shall be taken from and shall depend upon
the receipt of full payment of the proceeds of the
sale of Jalajala, "Poblacion."
3. That Tasiana Ongsingco Vda. de de Borja hereby
assumes payment of that particular obligation
incurred by the late Francisco de Borja in favor of
the Rehabilitation Finance Corporation, now
Development Bank of the Philippines, amounting to
approximately P30,000.00 and also assumes
payment of her 1/5 share of the Estate and
Inheritance taxes on the Estate of the late Francisco
de Borja or the sum of P3,500.00, more or less,
which shall be deducted by the buyer of Jalajala,
"Poblacion" from the payment to be made to
Tasiana Ongsingco Vda. de Borja under paragraph
2 of this Agreement and paid directly to the
Development Bank of the Philippines and the heirs-
children of Francisco de Borja.
4. Thereafter, the buyer of Jalajala "Poblacion" is
hereby authorized to pay directly to Tasiana
Ongsingco Vda. de de Borja the balance of the
payment due her under paragraph 2 of this
Agreement (approximately P766,500.00) and issue
in the name of Tasiana Ongsingco Vda. de de
Borja, corresponding certified checks/treasury
warrants, who, in turn, will issue the corresponding
receipt to Jose de Borja.
5. In consideration of above payment to Tasiana
Ongsingco Vda. de de Borja, Jose de Borja
personally and as administrator of the Testate
Estate of Josefa Tangco, and Tasiana Ongsingco
Vda. de de Borja, for themselves and for their heirs,
successors, executors, administrators, and assigns,
hereby forever mutually renounce, withdraw, waive,
remise, release and discharge any and all manner
of action or actions, cause or causes of action,
suits, debts, sum or sums of money, accounts,
damages, claims and demands whatsoever, in law
or in equity, which they ever had, or now have or
may have against each other, more specifically Sp.
Proceedings Nos. 7866 and 1955, CFI-Rizal, and
Sp. Proc. No. 832-Nueva Ecija, Civil Case No.
3033, CFI Nueva Ecija and Civil Case No. 7452-
CFI, Rizal, as well as the case filed against Manuel
Quijal for perjury with the Provincial Fiscal of Rizal,
the intention being to completely, absolutely and
finally release each other, their heirs, successors,
and assigns, from any and all liability, arising wholly
or partially, directly or indirectly, from the
administration, settlement, and distribution of the
assets as well as liabilities of the estates of
Francisco de Borja and Josefa Tangco, first spouse
of Francisco de Borja, and lastly, Tasiana
Ongsingco Vda. de de Borja expressly and
specifically renounce absolutely her rights as heir
over any hereditary share in the estate of Francisco
de Borja.
6. That Tasiana Ongsingco Vda. de de Borja, upon
receipt of the payment under paragraph 4 hereof,
shall deliver to the heir Jose de Borja all the papers,
titles and documents belonging to Francisco de
Borja which are in her possession and said heir
Jose de Borja shall issue in turn the corresponding
receive thereof.
7. That this agreement shall take effect only upon
the fulfillment of the sale of the properties
mentioned under paragraph 1 of this agreement and
upon receipt of the total and full payment of the
proceeds of the sale of the Jalajala property
"Poblacion", otherwise, the non-fulfillment of the
said sale will render this instrument NULL AND
VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have
her unto set their hands in the City of Manila,
Philippines, the 12th of October, 1963.
On 16 May 1966, Jose de Borja submitted for Court approval the
agreement of 12 October 1963 to the Court of First Instance of Rizal, in
Special Proceeding No. R-7866; and again, on 8 August 1966, to the
Court of First Instance of Nueva Ecija, in Special Proceeding No. 832.
Tasiana Ongsingco Vda. de de Borja opposed in both instances. The
Rizal court approved the compromise agreement, but the Nueva Ecija
court declared it void and unenforceable. Special administratrix Tasiana
Ongsingco Vda. de de Borja appealed the Rizal Court's order of
approval (now Supreme Court G.R. case No. L-28040), while
administrator Jose de Borja appealed the order of disapproval (G.R.
case No. L-28568) by the Court of First Instance of Nueva Ecija.
The genuineness and due execution of the compromised agreement of
12 October 1963 is not disputed, but its validity is, nevertheless,
attacked by Tasiana Ongsingco on the ground that: (1) the heirs cannot
enter into such kind of agreement without first probating the will of
Francisco de Borja; (2) that the same involves a compromise on the
validity of the marriage between Francisco de Borja and Tasiana
Ongsingco; and (3) that even if it were valid, it has ceased to have force
and effect.
In assailing the validity of the agreement of 12 October 1963, Tasiana
Ongsingco and the Probate Court of Nueva Ecija rely on this Court's
decision in Guevara vs. Guevara. 74 Phil. 479, wherein the Court's
majority held the view that the presentation of a will for probate is
mandatory and that the settlement and distribution of an estate on the
basis of intestacy when the decedent left a will, is against the law and
public policy. It is likewise pointed out by appellant Tasiana Ongsingco
that Section 1 of Rule 74 of the Revised Rules explicitly conditions the
validity of an extrajudicial settlement of a decedent's estate by
agreement between heirs, upon the facts that "(if) the decedent left no
will and no debts, and the heirs are all of age, or the minors are
represented by their judicial and legal representatives ..." The will of
Francisco de Borja having been submitted to the Nueva Ecija Court and
still pending probate when the 1963 agreement was made, those
circumstances, it is argued, bar the validity of the agreement.
Upon the other hand, in claiming the validity of the compromise
agreement, Jose de Borja stresses that at the time it was entered into,
on 12 October 1963, the governing provision was Section 1, Rule 74 of
the original Rules of Court of 1940, which allowed the extrajudicial
settlement of the estate of a deceased person regardless of whether he
left a will or not. He also relies on the dissenting opinion of Justice
Moran, in Guevara vs. Guevara, 74 Phil. 479, wherein was expressed
the view that if the parties have already divided the estate in
accordance with a decedent's will, the probate of the will is a useless
ceremony; and if they have divided the estate in a different manner, the
probate of the will is worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to the case
at bar. This is apparent from an examination of the terms of the
agreement between Jose de Borja and Tasiana Ongsingco. Paragraph
2 of said agreement specifically stipulates that the sum of P800,000
payable to Tasiana Ongsingco —
shall be considered as full — complete payment —
settlement of her hereditary share in the estate of
the late Francisco de Borja as well as the estate of
Josefa Tangco, ... and to any properties
bequeathed or devised in her favor by the late
Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or
purportedly conveyed to her for consideration or
otherwise.
This provision evidences beyond doubt that the ruling in the Guevara
case is not applicable to the cases at bar. There was here no attempt to
settle or distribute the estate of Francisco de Borja among the heirs
thereto before the probate of his will. The clear object of the contract
was merely the conveyance by Tasiana Ongsingco of any and all her
individual share and interest, actual or eventual in the estate of
Francisco de Borja and Josefa Tangco. There is no stipulation as to any
other claimant, creditor or legatee. And as a hereditary share in a
decedent's estate is transmitted or vested immediately from the moment
of the death of such causante or predecessor in interest (Civil Code of
the Philippines, Art. 777)3 there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or his hereditary share
immediately after such death, even if the actual extent of such share is
not determined until the subsequent liquidation of the estate.4 Of
course, the effect of such alienation is to be deemed limited to what is
ultimately adjudicated to the vendor heir. However, the aleatory
character of the contract does not affect the validity of the transaction;
neither does the coetaneous agreement that the numerous litigations
between the parties (the approving order of the Rizal Court enumerates
fourteen of them, Rec. App. pp. 79-82) are to be considered settled and
should be dismissed, although such stipulation, as noted by the Rizal
Court, gives the contract the character of a compromise that the law
favors, for obvious reasons, if only because it serves to avoid a
multiplicity of suits.
It is likewise worthy of note in this connection that as the surviving
spouse of Francisco de Borja, Tasiana Ongsingco was his compulsory
heir under article 995 et seq. of the present Civil Code. Wherefore,
barring unworthiness or valid disinheritance, her successional interest
existed independent of Francisco de Borja's last will and testament and
would exist even if such will were not probated at all. Thus, the
prerequisite of a previous probate of the will, as established in the
Guevara and analogous cases, can not apply to the case of Tasiana
Ongsingco Vda. de de Borja.
Since the compromise contract Annex A was entered into by and
between "Jose de Borja personally and as administrator of the Testate
Estate of Josefa Tangco" on the one hand, and on the other, "the heir
and surviving spouse of Francisco de Borja by his second marriage,
Tasiana Ongsingco Vda. de de Borja", it is clear that the transaction
was binding on both in their individual capacities, upon the perfection of
the contract, even without previous authority of the Court to enter into
the same. The only difference between an extrajudicial compromise and
one that is submitted and approved by the Court, is that the latter can
be enforced by execution proceedings. Art. 2037 of the Civil Code is
explicit on the point:
8. Art. 2037. A compromise has upon the parties the
effect and authority of res judicata; but there shall
be no execution except in compliance with a judicial
compromise.
It is argued by Tasiana Ongsingco that while the
agreement Annex A expressed no definite period for
its performance, the same was intended to have a
resolutory period of 60 days for its effectiveness. In
support of such contention, it is averred that such a
limit was expressly stipulated in an agreement in
similar terms entered into by said Ongsingco with
the brothers and sister of Jose de Borja, to wit,
Crisanto, Matilde and Cayetano, all surnamed de
Borja, except that the consideration was fixed at
P600,000 (Opposition, Annex/Rec. of Appeal, L-
28040, pp. 39- 46) and which contained the
following clause:
III. That this agreement shall take effect only upon
the consummation of the sale of the property
mentioned herein and upon receipt of the total and
full payment of the proceeds of the sale by the
herein owner heirs-children of Francisco de Borja,
namely, Crisanto, Cayetano and Matilde, all
surnamed de Borja; Provided that if no sale of the
said property mentioned herein is consummated, or
the non-receipt of the purchase price thereof by the
said owners within the period of sixty (60) days from
the date hereof, this agreement will become null
and void and of no further effect.
Ongsingco's argument loses validity when it is considered that Jose de
Borja was not a party to this particular contract (Annex 1), and that the
same appears not to have been finalized, since it bears no date, the
day being left blank "this — day of October 1963"; and while signed by
the parties, it was not notarized, although plainly intended to be so
done, since it carries a proposed notarial ratification clause.
Furthermore, the compromise contract with Jose de Borja (Annex A),
provides in its par. 2 heretofore transcribed that of the total
consideration of P800, 000 to be paid to Ongsingco, P600,000
represent the "prorata share of the heirs Crisanto, Cayetano and
Matilde all surnamed de Borja" which corresponds to the consideration
of P600,000 recited in Annex 1, and that circumstance is proof that the
duly notarized contract entered into wit Jose de Borja under date 12
October 1963 (Annex A), was designed to absorb and supersede the
separate unformalize agreement with the other three Borja heirs.
Hence, the 60 days resolutory term in the contract with the latter (Annex
1) not being repeated in Annex A, can not apply to the formal
compromise with Jose de Borja. It is moreover manifest that the
stipulation that the sale of the Hacienda de Jalajala was to be made
within sixty days from the date of the agreement with Jose de Borja's
co-heirs (Annex 1) was plainly omitted in Annex A as improper and
ineffective, since the Hacienda de Jalajala (Poblacion) that was to be
sold to raise the P800,000 to be paid to Ongsingco for her share formed
part of the estate of Francisco de Borja and could not be sold until
authorized by the Probate Court. The Court of First Instance of Rizal so
understood it, and in approving the compromise it fixed a term of 120
days counted from the finality of the order now under appeal, for the
carrying out by the parties for the terms of the contract.
This brings us to the plea that the Court of First Instance of Rizal had no
jurisdiction to approve the compromise with Jose de Borja (Annex A)
because Tasiana Ongsingco was not an heir in the estate of Josefa
Tangco pending settlement in the Rizal Court, but she was an heir of
Francisco de Borja, whose estate was the object of Special Proceeding
No. 832 of the Court of First Instance of Nueva Ecija. This circumstance
is irrelevant, since what was sold by Tasiana Ongsingco was only her
eventual share in the estate of her late husband, not the estate itself;
and as already shown, that eventual share she owned from the time of
Francisco's death and the Court of Nueva Ecija could not bar her selling
it. As owner of her undivided hereditary share, Tasiana could dispose of
it in favor of whomsoever she chose. Such alienation is expressly
recognized and provided for by article 1088 of the present Civil Code:
Art. 1088. Should any of the heirs sell his hereditary
rights to a stranger before the partition, any or all of
the co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one
month from the time they were notified in writing of
the sale of the vendor.
If a sale of a hereditary right can be made to a stranger, then a
fortiori sale thereof to a coheir could not be forbidden.
Tasiana Ongsingco further argues that her contract with Jose de Borja
(Annex "A") is void because it amounts to a compromise as to her
status and marriage with the late Francisco de Borja. The point is
without merit, for the very opening paragraph of the agreement with
Jose de Borja (Annex "A") describes her as "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana
Ongsingco Vda. de de Borja", which is in itself definite admission of her
civil status. There is nothing in the text of the agreement that would
show that this recognition of Ongsingco's status as the surviving spouse
of Francisco de Borja was only made in consideration of the cession of
her hereditary rights.
It is finally charged by appellant Ongsingco, as well as by the Court of
First Instance of Nueva Ecija in its order of 21 September 1964, in
Special Proceedings No. 832 (Amended Record on Appeal in L-28568,
page 157), that the compromise agreement of 13 October 1963 (Annex
"A") had been abandoned, as shown by the fact that, after its execution,
the Court of First Instance of Nueva Ecija, in its order of 21 September
1964, had declared that "no amicable settlement had been arrived at by
the parties", and that Jose de Borja himself, in a motion of 17 June
1964, had stated that the proposed amicable settlement "had failed to
materialize".
It is difficult to believe, however, that the amicable settlement referred to
in the order and motion above-mentioned was the compromise
agreement of 13 October 1963, which already had been formally signed
and executed by the parties and duly notarized. What the record
discloses is that some time after its formalization, Ongsingco had
unilaterally attempted to back out from the compromise agreement,
pleading various reasons restated in the opposition to the Court's
approval of Annex "A" (Record on Appeal, L-20840, page 23): that the
same was invalid because of the lapse of the allegedly intended
resolutory period of 60 days and because the contract was not
preceded by the probate of Francisco de Borja's will, as required by this
Court's Guevarra vs. Guevara ruling; that Annex "A" involved a
compromise affecting Ongsingco's status as wife and widow of
Francisco de Borja, etc., all of which objections have been already
discussed. It was natural that in view of the widow's attitude, Jose de
Borja should attempt to reach a new settlement or novatory agreement
before seeking judicial sanction and enforcement of Annex "A", since
the latter step might ultimately entail a longer delay in attaining final
remedy. That the attempt to reach another settlement failed is apparent
from the letter of Ongsingco's counsel to Jose de Borja quoted in pages
35-36 of the brief for appellant Ongsingco in G.R. No. 28040; and it is
more than probable that the order of 21 September 1964 and the
motion of 17 June 1964 referred to the failure of the parties' quest for a
more satisfactory compromise. But the inability to reach a novatory
accord can not invalidate the original compromise (Annex "A") and
justifies the act of Jose de Borja in finally seeking a court order for its
approval and enforcement from the Court of First Instance of Rizal,
which, as heretofore described, decreed that the agreement be
ultimately performed within 120 days from the finality of the order, now
under appeal.
We conclude that in so doing, the Rizal court acted in accordance with
law, and, therefore, its order should be upheld, while the contrary
resolution of the Court of First Instance of Nueva Ecija should be, and
is, reversed.
In her brief, Tasiana Ongsingco also pleads that the time elapsed in the
appeal has affected her unfavorably, in that while the purchasing power
of the agreed price of P800,000 has diminished, the value of the
Jalajala property has increased. But the fact is that her delay in
receiving the payment of the agreed price for her hereditary interest was
primarily due to her attempts to nullify the agreement (Annex "A") she
had formally entered into with the advice of her counsel, Attorney
Panaguiton. And as to the devaluation de facto of our currency, what
We said in Dizon Rivera vs. Dizon, L-24561, 30 June 1970, 33 SCRA
554, that "estates would never be settled if there were to be a
revaluation with every subsequent fluctuation in the values of currency
and properties of the estate", is particularly opposite in the present
case.
Coming now to Case G.R. No. L-28611, the issue is whether the
Hacienda de Jalajala (Poblacion), concededly acquired by Francisco de
Borja during his marriage to his first wife, Josefa Tangco, is the
husband's private property (as contended by his second spouse,
Tasiana Ongsingco), or whether it forms part of the conjugal (ganancial)
partnership with Josefa Tangco. The Court of First Instance of Rizal
(Judge Herminio Mariano, presiding) declared that there was adequate
evidence to overcome the presumption in favor of its conjugal character
established by Article 160 of the Civil Code.
We are of the opinion that this question as between Tasiana Ongsingco
and Jose de Borja has become moot and academic, in view of the
conclusion reached by this Court in the two preceding cases (G.R. No.
L-28568), upholding as valid the cession of Tasiana Ongsingco's
eventual share in the estate of her late husband, Francisco de Borja, for
the sum of P800,000 with the accompanying reciprocal quit-claims
between the parties. But as the question may affect the rights of
possible creditors and legatees, its resolution is still imperative.
It is undisputed that the Hacienda Jalajala, of around 4,363 hectares,
had been originally acquired jointly by Francisco de Borja, Bernardo de
Borja and Marcelo de Borja and their title thereto was duly registered in
their names as co-owners in Land Registration Case No. 528 of the
province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo vs. Jugo, 54 Phil.
465). Subsequently, in 1931, the Hacienda was partitioned among the
co-owners: the Punta section went to Marcelo de Borja; the Bagombong
section to Bernardo de Borja, and the part in Jalajala proper (Poblacion)
corresponded to Francisco de Borja (V. De Borja vs. De Borja 101 Phil.
911, 932).
The lot allotted to Francisco was described as —
Una Parcela de terreno en Poblacion, Jalajala: N.
Puang River; E. Hermogena Romero; S. Heirs of
Marcelo de Borja O. Laguna de Bay; containing an
area of 13,488,870 sq. m. more or less, assessed at
P297,410. (Record on Appeal, pages 7 and 105)
On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of
the Testate Estate of Francisco de Borja, instituted a complaint in the
Court of First Instance of Rizal (Civil Case No. 7452) against Jose de
Borja, in his capacity as Administrator of Josefa Tangco (Francisco de
Borja's first wife), seeking to have the Hacienda above described
declared exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was conjugal
property of his parents (Francisco de Borja and Josefa Tangco),
conformably to the presumption established by Article 160 of the
Philippine Civil Code (reproducing Article 1407 of the Civil Code of
1889), to the effect that:
Art. 160. All property of the marriage is presumed to
belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or
to the wife.
Defendant Jose de Borja further counterclaimed for damages,
compensatory, moral and exemplary, as well as for attorney's fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio
Mariano, held that the plaintiff had adduced sufficient evidence to rebut
the presumption, and declared the Hacienda de Jalajala (Poblacion) to
be the exclusive private property of the late Francisco de Borja, and his
Administratrix, Tasiana Ongsingco Vda. de Borja, to be entitled to its
possession. Defendant Jose de Borja then appealed to this Court.
The evidence reveals, and the appealed order admits, that the
character of the Hacienda in question as owned by the conjugal
partnership De Borja-Tangco was solemnly admitted by the late
Francisco de Borja no less than two times: first, in the Reamended
Inventory that, as executor of the estate of his deceased wife Josefa
Tangco, he filed in the Special Proceedings No. 7866 of the Court of
First Instance of Rizal on 23 July 1953 (Exhibit "2"); and again, in the
Reamended Accounting of the same date, also filed in the proceedings
aforesaid (Exhibit "7"). Similarly, the plaintiff Tasiana O. Vda. de Borja,
herself, as oppositor in the Estate of Josefa Tangco, submitted therein
an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala
property among the "Conjugal Properties of the Spouses Francisco de
Borja and Josefa Tangco". And once more, Tasiana Ongsingco, as
administratrix of the Estate of Francisco de Borja, in Special
Proceedings No. 832 of the Court of First Instance of Nueva Ecija,
submitted therein in December, 1955, an inventory wherein she listed
the Jalajala Hacienda under the heading "Conjugal Property of the
Deceased Spouses Francisco de Borja and Josefa Tangco, which are
in the possession of the Administrator of the Testate Estate of the
Deceased Josefa Tangco in Special Proceedings No. 7866 of the Court
of First Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that they
are plain admissions against interest made by both Francisco de Borja
and the Administratrix of his estate, in the course of judicial proceedings
in the Rizal and Nueva Ecija Courts, supporting the legal presumption in
favor of the conjugal community, the Court below declared that the
Hacienda de Jalajala (Poblacion) was not conjugal property, but the
private exclusive property of the late Francisco de Borja. It did so on the
strength of the following evidences: (a) the sworn statement by Francis
de Borja on 6 August 1951 (Exhibit "F") that —
He tomado possession del pedazo de terreno ya
delimitado (equivalente a 1/4 parte, 337 hectareas)
adjunto a mi terreno personal y exclusivo
(Poblacion de Jalajala, Rizal).
and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja,
that the entire Hacienda had been bought at a foreclosure sale for
P40,100.00, of which amount P25,100 was contributed by Bernardo de
Borja and P15,000. by Marcelo de Borja; that upon receipt of a
subsequent demand from the provincial treasurer for realty taxes the
sum of P17,000, Marcelo told his brother Bernardo that Francisco (son
of Marcelo) wanted also to be a co-owner, and upon Bernardo's assent
to the proposal, Marcelo issue a check for P17,000.00 to pay the back
taxes and said that the amount would represent Francisco's contribution
in the purchase of the Hacienda. The witness further testified that —
Marcelo de Borja said that that money was
entrusted to him by Francisco de Borja when he
was still a bachelor and which he derived from his
business transactions. (Hearing, 2 February 1965,
t.s.n., pages 13-15) (Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn statement
overweighed the admissions in the inventories relied upon by
defendant-appellant Jose de Borja since probate courts can not finally
determine questions of ownership of inventoried property, but that the
testimony of Gregorio de Borja showed that Francisco de Borja
acquired his share of the original Hacienda with his private funds, for
which reason that share can not be regarded as conjugal partnership
property, but as exclusive property of the buyer, pursuant to Article
1396(4) of Civil Code of 1889 and Article 148(4) of the Civil Code of the
Philippines.
The following shall be the exclusive property of each spouse:
xxx xxx xxx
(4) That which is purchased with exclusive money of
the wife or of the husband.
We find the conclusions of the lower court to be untenable. In the first
place, witness Gregorio de Borja's testimony as to the source of the
money paid by Francisco for his share was plain hearsay, hence
inadmissible and of no probative value, since he was merely repeating
what Marcelo de Borja had told him (Gregorio). There is no way of
ascertaining the truth of the statement, since both Marcelo and
Francisco de Borja were already dead when Gregorio testified. In
addition, the statement itself is improbable, since there was no need or
occasion for Marcelo de Borja to explain to Gregorio how and when
Francisco de Borja had earned the P17,000.00 entrusted to Marcelo. A
ring of artificiality is clearly discernible in this portion of Gregorio's
testimony.
As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion
thereof (ante, page 14) does not clearly demonstrate that the "mi
terreno personal y exclusivo (Poblacion de Jalajala, Rizal) " refers
precisely to the Hacienda in question. The inventories (Exhibits 3 and 4)
disclose that there were two real properties in Jalajala owned by
Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a
much bigger one of 1,357.260.70 sq. m., which is evidently the
Hacienda de Jalajala (Poblacion). To which of these lands did the
affidavit of Francisco de Borja (Exhibit "F") refer to? In addition,
Francisco's characterization of the land as "mi terreno personal y
exclusivo" is plainly self-serving, and not admissible in the absence of
cross examination.
It may be true that the inventories relied upon by defendant-appellant
(Exhibits "2", "3", "4" and "7") are not conclusive on the conjugal
character of the property in question; but as already noted, they are
clear admissions against the pecuniary interest of the declarants,
Francisco de Borja and his executor-widow, Tasiana Ongsingco, and as
such of much greater probative weight than the self-serving statement
of Francisco (Exhibit "F"). Plainly, the legal presumption in favor of the
conjugal character of the Hacienda de Jalajala (Poblacion) now in
dispute has not been rebutted but actually confirmed by proof. Hence,
the appealed order should be reversed and the Hacienda de Jalajala
(Poblacion) declared property of the conjugal partnership of Francisco
de Borja and Josefa Tangco.
No error having been assigned against the ruling of the lower court that
claims for damages should be ventilated in the corresponding special
proceedings for the settlement of the estates of the deceased, the same
requires no pro announcement from this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court of
First Instance of Rizal in Case No. L-28040 is hereby affirmed; while
those involved in Cases Nos. L-28568 and L-28611 are reversed and
set aside. Costs against the appellant Tasiana Ongsingco Vda. de Borja
in all three (3) cases.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo,
Makasiar, Antonio and Esguerra, JJ., concur.
Fernando, J., took no part.
G.R. No. L-15499 February 28, 1962
ANGELA M. BUTTE, plaintiff-appellant,
vs.
MANUEL UY and SONS, INC., defendant-appellee.
Delgado, Flores and Macapagal for plaintiff-appellant.
Pelaez and Jalandoni for defendant-appellee.
REYES, J.B.L., J.:
Appeal from a decision of the Court of First instance of Manila
dismissing the action for legal redemption filed by plaintiff-appellant.
It appears that Jose V. Ramirez, during his lifetime, was a co-owner of a
house and lot located at Sta. Cruz, Manila, as shown by Transfer
Certificate of Title No. 52789, issued in the name of the following co-
owners: Marie Garnier Vda. de Ramirez, 1/6; Jose V. Ramirez, 1/6;
Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6; and Jose Ma. Ramirez, 1/6.
On October 20, 1951, Jose V. Ramirez died. Subsequently, Special
Proceeding No. 15026 was instituted to settle his estate, that included
the one-sixth (1/6) undivided share in the aforementioned property. And
although his last will and testament, wherein he bequeathed his estate
to his children and grandchildren and one-third (1/3) of the free portion
to Mrs. Angela M. Butte, hereinafter referred to as plaintiff-appellant,
has been admitted to probate, the estate proceedings are still pending
up to the present on account of the claims of creditors which exceed the
assets of the deceased. The Bank of the Philippine Islands was
appointed judicial administrator.
Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de Ramirez,
one of the co-owners of the late Jose V. Ramirez in the Sta. Cruz
property, sold her undivided 1/6 share to Manuel Uy & Sons, Inc.
defendant-appellant herein, for the sum of P500,000.00. After the
execution by her attorney-in-fact, Mrs. Elsa R. Chambers, of an affidavit
to the effect that formal notices of the sale had been sent to all possible
redemptioners, the deed of sale was duly registered and Transfer
Certificate of Title No. 52789 was cancelled in lieu of which a new one
was issued in the name of the vendee and the other-co-owners.
On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent a
letter to the Bank of the Philippine Islands as judicial administrator of the
estate of the late Jose V. Ramirez informing it of the above-mentioned
sale. This letter, together with that of the bank, was forwarded by the
latter to Mrs. Butte c/o her counsel Delgado, Flores & Macapagal,
Escolta, Manila, and having received the same on December 10, 1958,
said law office delivered them to plaintiff-appellant's son, Mr. Miguel
Papa, who in turn personally handed the letters to his mother, Mrs.
Butte, on December 11 and 12, 1958. Aside from this letter of
defendant-appellant, the vendor, thru her attorney-in-fact Mrs.
Chambers, wrote said bank on December 11, 1958 confirming vendee's
letter regarding the sale of her 1/6 share in the Sta. Cruz property for
the sum of P500,000.00. Said letter was received by the bank on
December 15, 1958 and having endorsed it to Mrs. Butte's counsel, the
latter received the same on December 16, 1958. Appellant received the
letter on December 19, 1958.
On January 15, 1959, Mrs. Angela M. Butte, thru Atty. Resplandor
Sobretodo, sent a letter and a Philippine National Bank cashier's check
in the amount of P500,000.00 to Manuel Uy & Sons, Inc. offering to
redeem the 1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez. This
tender having been refused, plaintiff on the same day consigned the
amount in court and filed the corresponding action for legal redemption.
Without prejudice to the determination by the court of the reasonable
and fair market value of the property sold which she alleged to be
grossly excessive, plaintiff prayed for conveyance of the property, and
for actual, moral and exemplary damages.
After the filing by defendant of its answer containing a counterclaim, and
plaintiff's reply thereto, trial was held, after which the court rendered
decision on May 13, 1959, dismissing plaintiff's complaint on the
grounds that she has no right to redeem the property and that, if ever
she had any, she exercised the same beyond the statutory 30-day
period for legal redemptions provided by the Civil Code. The
counterclaim of defendant for damages was likewise dismissed for not
being sufficiently established. Both parties appealed directly to this
Court.
Based on the foregoing facts, the main issues posed in this appeal are:
(1) whether or not plaintiff-appellant, having been bequeathed 1/3 of the
free portion of the estate of Jose V. Ramirez, can exercise the right of
legal redemption over the 1/6 share sold by Mrs. Marie Garnier Vda. de
Ramirez despite the presence of the judicial administrator and pending
the final distribution of her share in the testate proceedings; and (2)
whether or not she exercised the right of legal redemption within the
period prescribed by law.
The applicable law involved in the present case is contained in Articles
1620, p. 1, and 1623 of the Civil Code of the Philippines, which read as
follows:
ART. 1620. A co-owner of a thing may exercise the right of
redemption in case the shares of all the other-co-owners or of
 any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay
only a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
(1522a)
ART. 1623. The right of legal predemption or redemption shall
not be exercised except within thirty days from the notice in
writing by the respective vendor, or by the vendor, as the case
may be. The deed of sale shall not be accorded in the
Registry of Property, unless accompanied by an affidavit of
the vendor that he has given written notice thereof at all
possible redemptioners.
The right of redemption of co-owners excludes that of
adjoining owners. (1524a)
That the appellant Angela M. Butte is entitled to exercise the right of
legal redemption is clear. As testamentary heir of the estate of J.V.
Ramirez, she and her co-heirs acquired an interest in the undivided
one-sixth (1/6) share owned by her predecessor (causante) in the Santa
Cruz property, from the moment of the death of the aforesaid co-owner,
J.V. Ramirez. By law, the rights to the succession of a deceased
persons are transmitted to his heirs from the moment of his death, and
the right of succession includes all property rights and obligations that
survive the decedent.
ART. 776. The inheritance includes all the property, rights and
obligations of a person which are not extinguished by his
death. (659)
ART. 777. The rights to the succession are transmitted from
the moment of the death of the decedent. (657a)
ART. 947. The legatee or devisee acquires a right to the pure
and simple legacies or devisees from the death of the
testator, and transmits it to his heirs. (881a)
The principle of transmission as of the time of the predecessor's death
is basic in our Civil Code, and is supported by other related articles.
Thus, the capacity of the heir is determined as of the time the decedent
died (Art. 1034); the legitime is to be computed as of the same
moment(Art. 908), and so is the in officiousness of the donation inter
vivos (Art. 771). Similarly, the legacies of credit and remission are valid
only in the amount due and outstanding at the death of the testator (Art.
935),and the fruits accruing after that instant are deemed to pertain to
the legatee (Art. 948).
As a consequence of this fundamental rule of succession, the heirs of
Jose V. Ramirez acquired his undivided share in the Sta. Cruz property
from the moment of his death, and from that instant, they became co-
owners in the aforesaid property, together with the original surviving co-
owners of their decedent (causante). A co-owner of an undivided share
is necessarily a co-owner of the whole. Wherefore, any one of the
Ramirez heirs, as such co-owner, became entitled to exercise the right
of legal redemption (retracto de comuneros) as soon as another co-
owner (Maria Garnier Vda. de Ramirez) had sold her undivided share to
a stranger, Manuel Uy & Sons, Inc. This right of redemption vested
exclusively in consideration of the redemptioner's share which the law
nowhere takes into account.
The situation is in no wise altered by the existence of a judicial
administrator of the estate of Jose V. Ramirez while under the Rules of
Court the administrator has the right to the possession of the real and
personal estate of the deceased, so far as needed for the payment of
the decedent's debts and the expenses of administration (sec. 3, Rule
85), and the administrator may bring or defend actions for the recovery
or protection of the property or rights of the deceased (sec. 2, Rule 88),
such rights of possession and administration do not include the right of
legal redemption of the undivided share sold to Uy & Company by Mrs.
Garnier Ramirez. The reason is obvious: this right of legal redemption
only came into existence when the sale to Uy & Sons, Inc. was
perfected, eight (8) years after the death of Jose V. Ramirez, and
formed no part of his estate. The redemption right vested in the heirs
originally, in their individual capacity, they did not derivatively acquire it
from their decedent, for when Jose V. Ramirez died, none of the other
co-owners of the Sta. Cruz property had as yet sold his undivided share
to a stranger. Hence, there was nothing to redeem and no right of
redemption; and if the late Ramirez had no such right at his death, he
could not transmit it to his own heirs. Much less could Ramirez acquire
such right of redemption eight years after his death, when the sale to Uy
& Sons, Inc. was made; because death extinguishes civil personality,
and, therefore, all further juridical capacity to acquire or transmit rights
and obligations of any kind (Civil Code of the Phil., Art. 42).
It is argued that the actual share of appellant Mrs. Butte in the estate of
Jose V. Ramirez has not been specifically determined as yet, that it is
still contingent; and that the liquidation of estate of Jose V. Ramirez
may require the alienation of the decedent's undivided portion in the
Sta. Cruz property, in which event Mrs. Butte would have no interest in
said undivided portion. Even if it were true, the fact would remain that so
long as that undivided share remains in the estate, the heirs of Jose V.
Ramirez own it, as the deceased did own it before his demise, so that
his heirs are now as much co-owners of the Sta. Cruz property as Jose
V. Ramirez was himself a co-owner thereof during his lifetime. As co-
owners of the property, the heirs of Jose V. Ramirez, or any one of
them, became personally vested with right of legal redemption as soon
as Mrs. Garnier sold her own pro-indiviso interest to Uy & Sons. Even if
subsequently, the undivided share of Ramirez (and of his heirs) should
eventually be sold to satisfy the creditors of the estate, it would not
destroy their ownership of it before the sale, but would only convey or
transfer it as in turn sold (of it actually is sold) to pay his creditors.
Hence, the right of any of the Ramirez heirs to redeem the Garnier
share will not be retroactively affected. All that the law requires is that
the legal redemptioner should be a co-owner at the time the undivided
share of another co-owner is sold to a stranger. Whether or not the
redemptioner will continue being a co-owner after exercising the legal
redemptioner is irrelevant for the purposes of law.
Nor it can be argued that if the original share of Ramirez is sold by the
administrator, his heirs would stand in law as never having acquired that
share. This would only be true if the inheritance is repudiated or the
heir's quality as such is voided. But where the heirship is undisputed,
the purchaser of hereditary property is not deemed to have acquired the
title directly from the deceased Ramirez, because a dead man can not
convey title, nor from the administrator who owns no part of the estate;
the purchaser can only derive his title from the Ramirez heirs,
represented by the administrator, as their trustee or legal
representative.
The right of appellant Angela M. Butte to make the redemption being
established, the next point of inquiry is whether she had made or
tendered the redemption price within the 30 days from notices as
prescribed by law. This period, be it noted, is peremptory, because the
policy of the law is not to leave the purchaser's title in uncertainty
beyond the established 30-day period. In considering whether or not the
offer to redeem was timely, we think that the notice given by the vendee
(buyer) should not be taken into account. The text of Article 1623 clearly
and expressly prescribes that the thirty days for making the redemption
are to be counted from notice in writing by the vendor. Under the old law
(Civ. Code of 1889, Art. 1524), it was immaterial who gave the notice;
so long as the redeeming co-owner learned of the alienation in favor of
the stranger, the redemption period began to run. It is thus apparent
that the Philippine legislature in Article 1623 deliberately selected a
particular method of giving notice, and that method must be deemed
exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W. [2d] 528). As
ruled in Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.]
275) —
Why these provisions were inserted in the statute we are not
informed, but we may assume until the contrary is shown, that
a state of facts in respect thereto existed, which warranted the
legislature in so legislating.
The reasons for requiring that the notice should be given by the seller,
and not by the buyer, are easily divined. The seller of an undivided
interest is in the best position to know who are his co-owners that under
the law must be notified of the sale. Also, the notice by the seller
removes all doubts as to the fact of the sale, its perfection; and its
validity, the notice being a reaffirmation thereof, so that the party need
not entertain doubt that the seller may still contest the alienation. This
assurance would not exist if the notice should be given by the buyer.
The notice which became operative is that given by Mrs. Chambers, in
her capacity as attorney-in-fact of the vendor Marie Garnier Vda. de
Ramirez. Under date of December 11, 1958, she wrote the
Administrator Bank of the Philippine Islands that her principal's one-
sixth (1/6) share in the Sta. Cruz property had been sold to Manuel Uy
& Sons, Inc. for P500,000.00. The Bank received this notice on
December 15, 1958, and on the same day endorsed it to Mrs. Butte,
care of Delgado, Flores and Macapagal (her attorneys), who received
the same on December 16, 1958. Mrs. Butte tendered redemption and
upon the vendee's refusal, judicially consigned the price of P500,000.00
on January 15, 1959. The latter date was the last one of the thirty days
allowed by the Code for the redemption, counted by excluding
December 16, 1958 and including January 15, 1959, pursuant to Article
13 of the Civil Code. Therefore, the redemption was made in due time.
The date of receipt of the vendor's notice by the Administrator Bank
(December 15) can not be counted as determining the start of thirty
days; for the Administrator of the estate was not a proper redemptioner,
since, as previously shown, the right to redeem the share of Marie
Garnier did not form part of the estate of Jose V. Ramirez.
We find no jurisdiction for appellant's claim that the P500,000,00. paid
by Uy & Sons, Inc. for the Garnier share is grossly excessive. Gross
excess cannot be predicated on mere individual estimates of market
price by a single realtor.
The redemption and consignation having been properly made, the Uy
counterclaim for damages and attorney's fees predicated on the
assumption that plaintiff's action was clearly unfounded, becomes
untenable.
PREMISES CONSIDERED, the judgment appealed from is hereby
reversed and set aside, and another one entered:
(a) Declaring the consignation of P500,000,00 made by
appellant Angela M. Butte duly and properly made;
(b) Declaring that said appellant properly exercised in due
time the legal redemption of the one-sixth (1/6) undivided
portion of the land covered by Certificate of Title No. 59363 of
the Office of the Register of Deeds of the City of Manila, sold
on December 9, 1958 by Marie Garnier Vda. de Ramirez to
appellant Manuel Uy & Sons, Inc.
(c) Ordering appellant Manuel Uy & Sons, Inc. to accept the
consigned price and to convey to Angela M. Butte the
undivided portion above referred to, within 30 days from the
time our decision becomes final, and subsequently to account
for the rentals and fruits of the redeemed share from and after
January 15, 1958, until its conveyance; and.
(d) Ordering the return of the records to the court of origin for
further proceedings conformable to this opinion.
Without finding as to costs.
G.R. No. L-24434 January 17, 1968
HEIRS OF PEDRO REGANON, JOVENCIA REGANON, MENCIA
REGANON, JOSEFA REGANON, VIOLETA REGANON, and FLORA
REGANON, plaintiffs-appellees,
vs.
RUFINO IMPERIAL, defendant-appellant.
Torcuato L. Galon for plaintiffs-appellees.
V. Lacaya for defendant-appellant.
BENGZON, J.P., J.:
This is an appeal from the orders dated June 9, 1964, July 14, 1964
and August 11, 1964, respectively, of the Court of First Instance of
Zamboanga del Norte (Dipolog, Branch II).
The facts of the case are admitted by both parties.
On February 22, 1963, the heirs of Pedro Reganon filed a complaint for
recovery of ownership and possession of about one-hectare portion of a
parcel of land (Lot No. 1 or Lot No. 4952, situated at Miasi, Polanco,
Zamboanga del Norte, covered by O.T.C. No. 1447, with an area of
7.9954 hectares), with damages, against Rufino Imperial.
Defendant not having filed an answer within the reglementary period,
the plaintiffs on April 8, 1963 filed a motion to declare the former in
default. The trial court granted the motion in its order dated April 10,
1963.
On April 23, 1963, the plaintiffs presented their evidence ex parte before
the Clerk of Court acting as Commissioner. The court a quo on May 6,
1963, rendered a decision declaring the plaintiffs lawful owners of the
land in question and entitled to its peaceful possession and enjoyment;
ordering defendant immediately to vacate the portion occupied by him
and to restore the peaceful possession thereof to plaintiffs; and
sentencing defendant to pay plaintiffs the amount of P1,929.20 and the
costs.
On November 29, 1963, the plaintiffs filed a motion for issuance of a
writ of execution. This was granted by the trial court in its order of
December 9, 1963.
The Deputy Provincial Sheriff submitted on February 8, 1964 a sheriff's
return of proceedings reporting the garnishment and sale of a carabao
and goat belonging to defendant for P153.00, and the attachment and
sale of defendant's parcel of land covered by Tax Declaration No. 4694,
situated in Sicet, Polanco, Zamboanga del Norte, for P500.00 — both
sales having been made to the only bidder, plaintiffs' counsel Atty. Vic
T. Lacaya.
On March 13, 1964, the Philippine National Bank deposited in the
Philippine National Bank-Dipolog Branch the residuary estate of its
former ward, Eulogio Imperial, in the sum of P10,303.80, pursuant to an
order of Branch I of the Court of First Instance of Zamboanga del Norte
in Sp. Proc. No. R-145.
On May 25, 1964, the heirs of said Eulogio Imperial, one of whom is
defendant, executed a Deed of Extrajudicial Partition of the residuary
estate, wherein was apportioned P1,471.97 as defendant Rufino
Imperial's share.
Informed of this development, the plaintiffs filed on June 5, 1964 an ex
parte motion for issuance of an alias writ of execution and of an order
directing the manager, or the representative, of the Philippine National
Bank-Dipolog Branch, to hold the share of defendant and deliver the
same to the provincial sheriff of the province to be applied to the
satisfaction of the balance of the money judgment. This was granted by
the trial court (Branch II) in its order dated June 9, 1964.
On June 17, 1964, the Deputy Provincial Sheriff issued a sheriffs
notification for levy addressed to defendant, giving notice of the
garnishment of the rights, interests, shares and participation that
defendant may have over the residuary estate of the late Eulogio
Imperial, consisting of the money deposited in the Philippine National
Bank-Dipolog Branch.
Defendant, through counsel, appearing for the first time before the trial
court, on June 24, 1964 filed a motion for reconsideration of the order
dated June 9, 1964, and to quash the alias writ of execution issued
pursuant to it, to which plaintiffs filed their opposition on July 6, 1964.
On July 14, 1964, the trial court denied defendant's aforesaid motion.
Defendant's second motion for reconsideration likewise having denied
by the trial court in its order of August 11, 1964, defendant appealed to
Us, raising the following issues:
(1) Upon the death of a ward, is the money accumulated in his
guardianship proceedings and deposited in a bank, still
considered in custodia legis and therefore cannot be
attached?
(2) Is the residuary estate of a U.S. veteran, which consists in
the aggregate accumulated sum from the monthly allowances
given him by the United States Veterans Administration
(USVA) during his lifetime, exempt from execution?
Defendant-appellant argues that the property of an incompetent under
guardianship is in custodia legis and therefore can not be attached.
It is true that in a former case 1 it was held that property under custodia
legis can not be attached. But this was under the old Rules of Court.
The new Rules of Court 2 now specifically provides for the procedure to
be followed in case what is attached is in custodia legis. 3 The clear
import of this new provision is that property under custodia legis is now
attachable, subject to the mode set forth in said rule.
Besides, the ward having died, the guardianship proceedings no longer
subsist:
The death of the ward necessarily terminates the
guardianship, and thereupon all powers and duties of the
guardian cease, except the duty, which remains, to make a
proper accounting and settlement in the probate court. 4
As a matter of fact, the guardianship proceedings was ordered
conditionally closed by Branch I of the Court of First Instance of
Zamboanga del Norte in which it was pending, in its order of February
8, 1964, where it stated —
In the meantime, the guardian Philippine National Bank is
hereby directed to deposit the residuary estate of said ward
with its bank agency in Dipolog, this province, in the name of
the estate of the deceased ward Eulogio Imperial, preparatory
to the eventual distribution of the same to the heirs when the
latter shall be known, and upon proof of deposit of said
residuary estate, the guardian Philippine National Bank shall
forthwith be relieved from any responsibility as such, and this
proceeding shall be considered closed and terminated. 5
And the condition has long been fulfilled, because on March 13, 1964
the Philippine National Bank-Manila deposited the residuary estate of
the ward with the Philippine National Bank-Dipolog Branch, evidenced
by a receipt attached to the records in Sp. Proc. No. R-145. 6
When Eulogio Imperial died on September 13, 1962, the rights to his
succession — from the moment of his death — were transmitted to his
heirs, one of whom is his son and heir, defendant-appellant
herein. 7 This automatic transmission can not but proceed with greater
ease and certainty than in this case where the parties agree that the
residuary estate is not burdened with any debt. For,
The rights to the succession of a person are transmitted from
the moment of death, and where, as in this case, the heir is of
legal age and the estate is not burdened with any debts, said
heir immediately succeeds, by force of law, to the dominion,
ownership, and possession of the properties of his
predecessor and consequently stands legally in the shoes of
the latter. 8
That the interest of an heir in the estate of a deceased person may be
attached for purposes of execution, even if the estate is in the process
of settlement before the courts, is already a settled matter in this
jurisdiction. 9
It is admitted that the heirs of Eulogio Imperial, including herein
defendant-appellant, have on May 25, 1964 executed a Deed of
Extrajudicial Partition. This instrument suffices to settle the entire estate
of the decedent — provided all the requisites for its validity are
fulfilled 10 — even without the approval of the court. Therefore, the
estate for all practical purposes have been settled. The heirs are at full
liberty to withdraw the residuary estate from the Philippine National
Bank-Dipolog Branch and divide it among themselves. The only reason
they have not done so is because of the alleged illegal withdrawal from
said estate of the amount of P1,080.00 by one Gloria Gomez by
authority of Branch I of the Court of First Instance of Zamboanga del
Norte, which incident is now on appeal before the Court of Appeals.
This appeal, however, does not detract any from the fact that the
guardianship proceedings is closed and terminated and the residuary
estate no longer under custodia legis.
Finally, it is defendant-appellant's position that the residuary estate of
Eulogio Imperial, a former U.S. veteran, having been set aside from the
monthly allowances given him by the United States Veterans
Administration (USVA) during his lifetime, is exempt from execution.
Any pension, annuity, or gratuity granted by a Government to its officers
or employees in recognition of past services rendered, is primordially
aimed at tiding them over during their old age and/or disability. This is
therefore a right personalissima, purely personal because founded on
necessity. It requires no argument to show that where the recipient dies,
the necessity motivating or underlying its grant necessarily ceases to
be. Even more so in this case where the law 11 providing for the
exemption is calculated to benefit U.S. veterans residing here, and is
therefore merely a manifestation of comity.
Besides, as earlier stated, the heirs of Eulogio Imperial, one of whom is
appellant, have already executed a Deed of Extrajudicial Partition — the
end result of which is that the property is no longer the property of the
estate but of the individual heirs. And it is settled that:
When the heirs by mutual agreement have divided the estate
among themselves, one of the heirs can not therefore secure
the appointment of an administrator to take charge of and
administer the estate or a part thereof. The property is no
longer the property of the estate, but of the individual heirs,
whether it remains undivided or not. 12
WHEREFORE, the orders appealed from are hereby affirmed, with
costs against defendant-appellant. So ordered.1äwphï1.ñët
G.R. No. L-25952 June 30, 1967
MARGARITA SALVADOR, in her own behalf and as Attorney-in-
fact of CANDIDA SALVADOR, ET AL.,petitioners,
vs.
THE HON. JUDGE ANDRES STA. MARIA, DOMINADOR
CARDENAS, REMEDIOS CABRERA, ALBERTO M. K. JAMIR and
SIMEON ENRIQUEZ, respondents.
Arturo Joaquin for petitioners.
Pelaez, Jalandoni and Jamir and S. V. Enriquez, for respondent Simeon
Enriquez.
C. E. Medina and J. M. Locsin for respondent Philippine National Bank.
Bala and Enriquez for the other respondents.
BENGZON, J.P., J.:
Seven parcels of titled land and two parcels of untitled land, situated in
Bigaa, Bulacan, were owned by Celestino Salvador. In 1941, he
executed a deed of sale over them in favor of the spouses Alfonso
Salvador and Anatolia Halili. Alleging that the sale was void for lack of
consideration, he filed on May 12,1955, against said vendees, a suit for
reconveyance of said parcels of land (CFI of Bulacan, Br. I, Civil Case
No. 1082).
On April 27, 1956, Celestino Salvador died, testate. As his alleged
heirs, twenty-one persons1 were on May 18, 1956 substituted as
plaintiffs in the action for reconveyance. And meanwhile, special
proceedings for the probate of his will and for letters testamentary was
instituted (CFI of Bulacan, Br. II, Sp. Proceedings No. 940). In said
proceedings, Dominador Cardenas was appointed on June 11, 1956
special administrator of Celestino Salvador's testate estate.1äwphï1.ñët
On September 4, 1956 the administrator filed in Sp. Proceedings No.
940 an inventory of properties of the estate, covering the same parcels
of land subject matter of the reconveyance action. On September 7,
1956, Celestino Salvador's will was admitted to probate and Dominador
Cardenas was appointed executor of said will. Actual issuance of letters
testamentary to him was made on October 27, 1956.
Twenty-three (23) persons were instituted heirs in the will. Of these,
nine (9) were not among the twenty-one (21) alleged relatives
substituted in the reconveyance case; and of the twenty-one (21)
substituted alleged heirs seven (7) were not instituted in the will. 2
In the suit for reconveyance, on November 26, 1956, the Court (CFI of
Bulacan, Br. I) rendered judgment, ordering the defendants therein (the
spouses Alfonso and Anatolia), to reconvey the parcels of land to the
estate of Celestino Salvador. Appeal therefrom to the Court of Appeals
was interposed by said defendants.1äwphï1.ñët
On August 12, 1961, the Court of Appeals affirmed the reconveyance
judgment, with the correction that reconveyance be in favor of the
twenty-one (21) heirs substituted as plaintiffs therein.
About three years later, pursuant to an order of the CFI of Bulacan, Br.
II, in the testacy proceedings, dated April 21, 1964, one of the parcels of
land involved, Lot 6, was sold so that with its proceeds debtors who filed
claims may be paid. The Philippine National Bank bought it at
P41,184.00. Said amount was then deposited in the same bank by the
administrator, subject to Court order.
On December 18, 1964, defendants in the suit for reconveyance
executed a deed of reconveyance over the subject parcels of land, in
favor of Celestino Salvador's estate. Revoking the same as lot in
accordance with the final judgment therein, the CFI of Bulacan, Br. I, on
September 24, 1965, ordered a new deed of reconveyance to be
executed, in favor of the twenty-one persons substituted as plaintiffs in
that action. Accordingly, on September 30, 1965, a new deed of
reconveyance was made, in favor of said twenty-one (21) persons as
heirs of Celestino.
Following this, on November 22, 1965, said Br. I, ordered the
corresponding title certificate (TCT No. 54639) in the administrator's
name, cancelled; new title certificate to be issued in the names of the
same twenty-one (21) persons. Said order was carried out, and TCT
No. 63734 was issued in the names of the twenty-one persons. 3
On December 7, 1965, Br. I (reconveyance court) ordered the Philippine
National Bank to release the P41,184.00 proceeds of the sale of Lot 6,
to the twenty-one (21) plaintiffs in the reconveyance case. Apparently,
although the passbook was given by the administrator to said twenty-
one persons, no release was made, as the Philippine National Bank
awaited Br. II's order.
Br. II, on March 1, 1966, approved the following claims against the
estate:
Taxes — Nat'l. gov't P5,328.23
Atty's fees — Atty. Enriquez 8,000.00
Atty's fees — Atty. Jamir 12,000.00
Loan — R. Cabrera 13,544.35
TOTAL........ 38,872.58
=========
On March 30, 1966, said Br. II (probate court), ordered return of the
passbook to the administrator; and release to the administrator by the
PNB of the P41,184.00, or so much thereof is needed to pay the afore-
stated debts of the estate.
After failing to get reconsideration of said order, the twenty-one (21)
substituted heirs, on April 25, 1966, filed with Us the present special
civil action for certiorari with preliminary injunction to assail the order to
pay the debts of the estate with the P41,184.00 proceeds of the sale of
Lot 6; and to question Br. II's (probate court) power to dispose of the
parcels of land involved in the reconveyance suit in Br. I.
Raised are these issues: (1) Are the parcels of land and the proceeds of
the sale of one of them, properties of the estate or not? (2) Does final
judgment in the reconveyance suit in favor of the twenty-one so-called
heirs who substituted Celestino Salvador, bar the disposition of the
reconveyed properties by the settlement court?
It is a settled point of law that the right of heirs to specific, distributive
shares of inheritance does not become finally determinable until all the
debts of the estate are paid. Until then, in the face of said claims, their
rights cannot be enforced, are inchoate, and subject to the existence of
a residue after payment of the debts (Castellvi de Raquiza v. Castellvi,
L-17630, October 31, 1963; Jimoga-on v. Belmonte, 84 Phil. 545; Sec.
1, Rule 90, Rules of Court).
Petitioners do not question the existence of the debts abovementioned.
They only contend that the properties involved having been ordered by
final judgment reconveyed to them, not to the estate the same are not
properties of the estate but their own, and thus, not liable for debts of
the estate.
Said contention is self-refuting. Petitioners rely for their rights on their
alleged character as heirs of Celestino; as such, they were substituted
in the reconveyance case; the reconveyance to them was
reconveyance to them as heirs of Celestino Salvador. It follows that the
properties they claim are, even by their own reasoning, part of
Celestino's estate. The right thereto as allegedly his heirs would arise
only if said parcels of land are part of the estate of Celestino, not
otherwise. Their having received the same, therefore, in the
reconveyance action, was perforce in trust for the estate, subject to its
obligations. They cannot distribute said properties among themselves
as substituted heirs without the debts of the estate being first satisfied.
At any rate, the proceeds of Lot 6 alone (P41,184.00) appears more
than sufficient to pay the debt (P38,872.58); and there will remain the
other parcels of land not sold. As to the question of who will receive how
much as heirs, the same is properly determinable by the settlement
court, after payment of the debts (Pimentel v. Palanca, 5 Phil. 436;
Maningat v. Castillo, 75 Phil. 532; Jimoga-on v. Belmonte, supra).
Wherefore, the petition for certiorari is denied, without costs. So
ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar Sanchez
and Castro JJ., concur.
G.R. No. L-25049 August 30, 1968
FILEMON RAMIREZ, MONICA RAMIREZ, and JOSE
EGUARAS, plaintiffs-appellants,
vs.
ARTEMIO BALTAZAR, ET AL., defendants-appellees.
Eduardo M. Peralta for plaintiffs-appellants.
Tomas P. Anonuevo for defendants-appellees Artemio Baltazar and
Susana Flores.
Tirso Caballero for defendant-appellee Artemio Diawan.
ANGELES, J.:
On appeal from an order dismissing the complaint, on motion to
dismiss, in Civil Case No. SC-319 of the Court of First Instance of
Laguna.
It appears that on 6 January 1959, Victoriana Eguaras single, made and
executed a real estate mortgage over a parcel of land, owned by her in
fee simple, as security for a loan of P2,170.00 in favor of the spouses
Artemio Baltazar and Susana Flores.
Upon the demise of the mortgagor, the mortgagees, as creditors of the
deceased, on 16 September 1960 filed a petition for the intestate
proceedings of her estate, in the Court of First Instance of Laguna,
docketed as Civil Case No. SC-99 wherein said mortgages, as
petitioners, alleged that Filemon Ramirez and Monica Ramirez are the
heirs of the deceased. Filemon Ramirez was appointed administrator of
the estate; however, having failed to qualify, on 16 January 1961, the
court appointed Artemio Diawan, then a deputy clerk of court,
administrator of the estate who, in due time, qualified for the office.
On 19 April 1961, the mortgagees, Artemio Baltazar and Susana Flores,
filed a complaint for foreclosure of the aforesaid mortgage, against
Artemio Diawan, in his capacity as administrator of the estate, docketed
as Civil Case No. SC-292 of the Court of First Instance of Laguna. The
defendant-administrator was duly served with summons but he failed to
answer, whereupon, on petition of the plaintiffs said defendant was
declared in default. The case was referred to a commissioner to receive
the evidence for the plaintiffs, and defendant-administrator, as deputy
clerk of court, acted as such hearing commissioner. 1äwphï1.ñët
On 16 August 1961, decision was rendered decreeing the foreclosure of
the mortgaged property and the sale thereof, if, within ninety days from
finality of the decision, the obligation was not fully paid. The judgment
not having been satisfied, a writ of execution was issued for the sale of
the mortgaged property, and after compliance with the requirements of
the law regarding the sending, posting and publication of the notice of
sale, the Sheriff sold the property at public auction to the highest bidder,
who happened to be the plaintiffs themselves, for the sum of P2,888.50
covering the amount of the judgment, plus the expenses of the sale and
the Sheriff's fees. On petition of the plaintiffs, the sale was confirmed by
the court on 26 January 1962.
On 6 February 1962, Filemon Ramirez, Monica Ramirez and Jose
Eguaras, the first two being the heirs named in the petition for intestate
proceedings, filed a complaint designated "For the Annulment of all
Proceedings in said Civil Case No. SC-292 for the Foreclosure of the
Mortgage", against the spouses Artemio Baltazar and Susana Flores,
and Artemio Diawan, in his capacity as administrator of the estate of
Victoriana Eguaras, deceased, and Silverio Talabis, in his capacity as
deputy provincial sheriff of Laguna, docketed as Civil Case No. SC-319
of the Court of First Instance of Laguna.
The facts hereinabove narrated are, succinctly, contained in the
complaint in said Civil Case No. SC-319, with the additional averments
that the defendant Diawan, the deputy clerk of court appointed as
administrator of the intestate estate of the deceased, acted in collusion
with the other defendants Artemio Baltazar and Susana Flores,
deliberately and in fraud of the plaintiffs: (a) in allowing the reglementary
period within which to file an answer to lapse without notifying and/or
informing the said plaintiffs of the complaint for foreclosure, as a result
of which he was declared in default to the prejudice of the estate which
he represents; (b) that had the plaintiffs (Monica and Filemon) been
notified of the pendency of the case, the defendant administrator could
have interposed a counterclaim because payment in the sum of
P1,548.52 had been made and received by the mortgagees on account
of the debt; (c) in presiding as hearing officer in the ex parte hearing in
Civil Case No. 292, to receive evidence for plaintiffs therein,
notwithstanding the fact that there was another deputy clerk of court
available who could have acted in his stead, as a result of which an
anomalous situation was created whereby he was a defendant and at
the same time a commissioner receiving evidence against himself as
administrator; (d) in allowing judgment to become final without notifying
the plaintiffs; (e) in deliberately, allowing the 90-day period within which
to make payment to expire without notifying the heirs, as a result of
which the said heirs were not afforded an opportunity to make payments
ordered by the Court in its decision; and (f) in refusing to help the heirs
seek postponement of the auction sale. It is also alleged that it was only
when the property foreclosed was published for sale at public auction
that the heirs came to know about the foreclosure proceedings.
The defendants spouses, Artemio Baltazar and Susana Flores, filed a
motion to dismiss the complaint on the ground that the plaintiffs have no
legal capacity to sue; defendant Diawan likewise moved to dismiss on
two grounds: that plaintiffs have no legal capacity to sue and that the
complaint states no cause of action. 1äwphï1.ñët
Despite vigorous opposition interposed by the plaintiffs against the
aforesaid motions to dismiss, the court, on 13 March 1962, dismissed
the complaint with costs against the plaintiffs, reasoning thus: that
"upon consideration of the evidence, said defendant could not have
offered any evidence to avoid the foreclosure of the mortgage which the
Court found to be in order. Under the circumstances and with the
apparent disinterestedness of Filemon and Rolando to qualify as
administrator when appointed, there could not have been any
connivance and/or collusion between plaintiffs in this case and Artemio
Diawan as administrator"; and that plaintiffs have no legal capacity to
sue since their status as legal heirs of the deceased has yet to be
determined precisely in Special Proceeding No. SC-99, and until such
status is so fixed by the Court, they have no cause of action against
defendants.
In that order of 13 March 1962, the court also denied plaintiffs' petition
for the issuance of a writ of preliminary injunction to enjoin defendants
from entering and taking physical possession of the land in question on
the ground "that possession thereof was effected and delivered by the
Provincial Sheriff to Artemio Baltazar and Susana Flores on February,
1962."
Reconsideration of the aforesaid order having been denied, the plaintiffs
took the present appeal where they assigned the following errors: (1) in
holding that plaintiffs-appellants have no legal capacity to sue until their
status as legal heirs of the deceased is determined in Special
Proceeding No. SC-99; (2) in ruling that there was no collusion or
connivance among the defendants-appellees, despite the fact that the
issue in the motion to dismiss is purely legal, not factual; and (3) in
denying the petition for a writ of preliminary injunction.
At the outset, let it be remembered that the defendants-appellees, in
availing themselves of the defense that the plaintiffs-appellants had not
been declared to be the heirs of the deceased Victoriana Eguaras, have
overlooked the fact that the (defendants-appellees) themselves in their
petition for intestate proceedings (Case SC-99) have alleged that
Filemon Ramirez and Monica Ramirez, two of herein plaintiffs-
appellants, are the heirs of the deceased. Insofar as defendants-
appellees are concerned, it is our opinion that they are estopped from
questioning the heirship of these two named persons to the estate of
the deceased.
There is no question that the rights to succession are automatically
transmitted to the heirs from the moment of the death of the
decedent.1 While, as a rule, the formal declaration or recognition to
such successional rights needs judicial confirmation, this Court has,
under special circumstances, protected these rights from
encroachments made or attempted before the judicial
declaration.2 In Pascual vs. Pascual,3 it was ruled that although heirs
have no legal standing in court upon the commencement of testate or
intestate proceedings, this rule admits of an exception as "when the
administrator fails or refuses to act in which event the heirs may act in
his place."
A similar situation obtains in the case at bar. The administrator is being
charged to have been in collusion and connivance with the mortgagees
of a property of the deceased, allowing its foreclosure without notifying
the heirs, to the prejudice of the latter. Since the ground for the present
action to annul the aforesaid foreclosure proceedings is the fraud
resulting from such insidious machinations and collusion in which the
administrator has allegedly participated, it would be farfetched to expect
the said administrator himself to file the action in behalf of the estate.
And who else but the heirs, who have an interest to assert and to
protect, would bring the action? Inevitably, this case should fall under
the exception, rather than the general rule that pending proceedings for
the settlement of the estate, the heirs have no right to commence an
action arising out of the rights belonging to the deceased.
On the second point raised, We fully agree with the plaintiffs-appellants
that the lower court had gone too far in practically adjudicating the case
on the merits when it made the observation that "there could not have
been any connivance and/or collusion between plaintiffs in this case
and Artemio Diawan as administrator." A thorough scrutiny of the
allegations in the motions to dismiss filed by defendants-appellees does
not indicate that that question was ever put at issue therein. On the
other hand, the controversy — on the existence or inexistence of
collusion between the parties as a result of which judgment was
rendered against the estate — is the very core of the complaint that was
dismissed. Undoubtedly, the cause of action is based on Section 30,
Rule 132 of the Rules of Court.
We are not, however, in accord with the third assigned error — the
denial of the motion for the issuance of preliminary injunction — for it
puts at issue the factual finding made by the lower court that the
defendants had already been placed in possession of the property. At
this stage of the proceeding, and considering the nature of the case
before Us, such a question is, at this time, beyond the competence of
the Court.
PREMISES CONSIDERED, the order appealed from is hereby set
aside insofar as it dismissed the complaint in Civil Case No. SC-319,
and the records be remanded to the lower court for further proceedings.
Costs against defendants-appellees. The Clerk of Court is directed to
furnish a copy of this decision to the Department of Justice for its
information.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro and Fernando, JJ., concur.
G.R. No. 77029 August 30, 1990
BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA
and CLAUDIO, all surnamed, GEVERO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE
DEVELOPMENT CORPORATION, respondents.
Carlito B. Somido for petitioners.
Benjamin N. Tabios for private respondent.
PARAS, J.:
This is a petition for review on certiorari of the March 20, 1988
decision 1 of the then Intermediate Appellate Court (now Court of
Appeals) in AC-GR CV No. 69264, entitled Del Monte Development
Corporation vs. Enrique Ababa, et al., etc. affirming the decision 2 of the
then Court of First Instance (now Regional Trial Court) of Misamis
Oriental declaring the plaintiff corporation as the true and absolute
owner of that portion of Lot 476 of the Cagayan Cadastre, particularly
Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an
area of Seven Thousand Eight Hundred Seventy Eight (7,878) square
meters more or less.
As found by the Appellate Court, the facts are as follows:
The parcel of land under litigation is Lot No. 2476 of
the Subdivision Plan Psd-37365 containing an area
of 20,119 square meters and situated at Gusa,
Cagayan de Oro City. Said lot was acquired by
purchase from the late Luis Lancero on September
15, 1964 as per Deed of Absolute Sale executed in
favor of plaintiff and by virtue of which Transfer
Certificate of Title No. 4320 was issued to plaintiff
(DELCOR for brevity). Luis Lancero, in turn
acquired the same parcel from Ricardo Gevero on
February 5, 1952 per deed of sale executed by
Ricardo Gevero which was duly annotated as entry
No. 1128 at the back of Original Certificate of Title
No. 7610 covering the mother lot identified as Lot
No. 2476 in the names of Teodorica Babangha —
1/2 share and her children: Maria; Restituto, Elena,
Ricardo, Eustaquio and Ursula, all surnamed
surnamed Gevero, 1/2 undivided share of the whole
area containing 48,122 square meters.
Teodorica Babangha died long before World War II
and was survived by her six children
aforementioned. The heirs of Teodorica Babangha
on October 17,1966 executed an Extra-Judicial
Settlement and Partition of the estate of Teodorica
Babangha, consisting of two lots, among them was
lot 2476. By virtue of the extra-judicial settlement
and partition executed by the said heirs of
Teodorica Babangha, Lot 2476-A to Lot 2476-I,
inclusive, under subdivision plan (LRC) Psd-80450
duly approved by the Land Registration
Commission, Lot 2476-D, among others, was
adjudicated to Ricardo Gevero who was then alive
at the time of extra-judicial settlement and partition
in 1966. Plaintiff (private respondent herein) filed an
action with the CFI (now RTC) of Misamis Oriental
to quiet title and/or annul the partition made by the
heirs of Teodorica Babangha insofar as the same
prejudices the land which it acquired a portion of lot
2476.
Plaintiff now seeks to quiet title and/or annul the
partition made by the heirs of Teodorica Babangha
insofar as the same prejudices the land which it
acquired, a portion of Lot 2476. Plaintiff proved that
before purchasing Lot 2476-A it first investigated
and checked the title of Luis Lancero and found the
same to be intact in the office of the Register of
Deeds of Cagayan de Oro City. The same with the
subdivision plan (Exh. "B"), the corresponding
technical description (Exh. "P") and the Deed of
Sale executed by Ricardo Gevero — all of which
were found to be unquestionable. By reason of all
these, plaintiff claims to have bought the land in
good faith and for value, occupying the land since
the sale and taking over from Lancero's possession
until May 1969, when the defendants Abadas
forcibly entered the property. (Rollo, p. 23)
After trial the court a quo on July 18, 1977 rendered judgment, the
dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is
hereby rendered declaring the plaintiff corporation
as the true and absolute owner of that portion of Lot
No. 2476 of the Cagayan Cadastre, particularly Lot
No. 2476-D of the subdivision plan (LRC) Psd-
80450, containing an area of SEVEN THOUSAND
EIGHT HUNDRED SEVENTY EIGHT (7,878)
square meters, more or less. The other portions of
Lot No. 2476 are hereby adjudicated as follows:
Lot No. 2476 – B – to the heirs of Elena Gevero;
Lot No. 2476 – C – to the heirs of Restituto Gevero;
Lot No. 2476 – E – to the defendant spouses
Enrique C. Torres and Francisca Aquino;
Lot No. 2476 – F – to the defendant spouses
Eduard Rumohr and Emilia Merida Rumohf ;
Lot Nos. 2476-H, 2476-I and 2476 — G — to
defendant spouses Enrique Abada and Lilia Alvarez
Abada.
No adjudication can be made with respect to Lot
No. 2476-A considering that the said lot is the
subject of a civil case between the Heirs of Maria
Gevero on one hand and the spouses Daniel
Borkingkito and Ursula Gevero on the other hand,
which case is now pending appeal before the Court
of Appeals. No pronouncement as to costs,
SO ORDERED. (Decision, Record on Appeal, p.
203; Rollo, pp. 21-22)
From said decision, defendant heirs of Ricardo Gevero (petitioners
herein) appealed to the IAC (now Court of Appeals) which
subsequently, on March 20, 1986, affirmed the decision appealed from.
Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo,
p. 28) but was denied on April 21, 1986.
Hence, the present petition.
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are: 1)
whether or not the deed of sale executed by Ricardo Gevero
to Luis Lancero is valid; 2) in the affirmative, whether or not
the 1/2 share of interest of Teodorica Babangha in one of the
litigated lots, lot no. 2476 under OCT No. 7610 is included in
the deed of sale; and 3) whether or not the private
respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely invalid citing alleged
flaws thereto, such as that: 1) the signature of Ricardo was forged
without his knowledge of such fact; 2) Lancero had recognized the fatal
defect of the 1952 deed of sale when he signed the document in 1968
entitled "Settlement to Avoid the Litigation"; 3) Ricardo's children
remained in the property notwithstanding the sale to Lancero; 4) the
designated Lot No. is 2470 instead of the correct number being Lot No.
2476; 5) the deed of sale included the share of Eustaquio Gevero
without his authority; 6) T.C.T. No. 1183 of Lancero segregated the area
of 20,119 square meters from the bigger area (OCT No. 7616) without
the consent of the other co-owners; 7) Lancero caused the 1952
Subdivision survey without the consent of the Geveros' to bring about
the segregation of the 20,119 square meters lot from the mother lot
2476 which brought about the issuance of his title T-1183 and to
DELCOR's title T4320, both of which were illegally issued; and 8) the
area sold as per document is 20,649 square meters whereas the
segregated area covered by TCT No. T-1183 of Lancero turned out to
be 20,119 square meters (Petitioners Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the 1952 deed of
sale in favor of Lancero was forged without Ricardo's knowledge of
such fact (Rollo, p. 71) it will be observed that the deed of sale in
question was executed with all the legal formalities of a public
document. The 1952 deed was duly acknowledged by both parties
before the notary public, yet petitioners did not bother to rebut the legal
presumption of the regularity of the notarized document (Dy v. Sacay,
165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423, March 13,
1989). In fact it has long been settled that a public document executed
and attested through the intervention of the notary public is evidence of
the facts in clear, unequivocal manner therein expressed. It has the
presumption of regularity and to contradict all these, evidence must be
clear, convincing and more than merely preponderant (Rebuleda v.
I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot be presumed, it
must be proven (Siasat v. IAC, No. 67889, October 10, 1985). Likewise,
petitioners allegation of absence of consideration of the deed was not
substantiated. Under Art. 1354 of the Civil Code, consideration is
presumed unless the contrary is proven.
As to petitioners' contention that Lancero had recognized the fatal
defect of the 1952 deed when he signed the document in 1968 entitled
"Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule of
evidence that the right of a party cannot be prejudiced by an act,
declaration, or omission of another (Sec. 28. Rule 130, Rules of Court).
This particular rule is embodied in the maxim "res inter alios acta alteri
nocere non debet." Under Section 31, Rule 130, Rules of Court "where
one derives title to property from another, the act, declaration, or
omission of the latter, while holding the title, in relation to the property is
evidence against the former." It is however stressed that the admission
of the former owner of a property must have been made while he was
the owner thereof in order that such admission may be binding upon the
present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905]; Medel
v. Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of
executing the 1968 document have no binding effect on DELCOR, the
ownership of the land having passed to DELCOR in 1964.
Petitioners' claim that they remained in the property, notwithstanding
the alleged sale by Ricardo to Lancero (Rollo, p. 71) involves a question
of fact already raised and passed upon by both the trial and appellate
courts. Said the Court of Appeals:
Contrary to the allegations of the appellants, the trial
court found that Luis Lancero had taken possession
of the land upon proper investigation by plaintiff the
latter learned that it was indeed Luis Lancero who
was the owner and possessor of Lot 2476 D. . . .
(Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De Gola-Sison v.
Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14 SCRA 282 [1965];
Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54
[1967]; Ramirez Tel. Co. v. Bank of America, 33 SCRA 737 [1970];
Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA 130
[1986]).
Suffice it to say that the other flaws claimed by the petitioners which
allegedly invalidated the 1952 deed of sale have not been raised before
the trial court nor before the appellate court. It is settled jurisprudence
that an issue which was neither averred in the complaint nor raised
during the trial in the court below cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play, justice and
due process. (Matienzo v. Servidad, 107 SCRA 276 [1981]; Dela Santa
v. C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987];
Anchuelo v. IAC, 147 SCRA 434 [1987]; Dulos Realty and Development
Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R. No. 78282,
July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of
Ricardo) in Lot 2476 under OCT No. 7610 was not included in the deed
of sale as it was intended to limit solely to Ricardos' proportionate share
out of the undivided 1/2 of the area pertaining to the six (6) brothers and
sisters listed in the Title and that the Deed did not include the share of
Ricardo, as inheritance from Teodorica, because the Deed did not recite
that she was deceased at the time it was executed (Rollo, pp. 67-68).
The hereditary share in a decedents' estate is transmitted or vested
immediately from the moment of the death of the "causante" or
predecessor in interest (Civil Code of the Philippines, Art. 777), and
there is no legal bar to a successor (with requisite contracting capacity)
disposing of his hereditary share immediately after such death, even if
the actual extent of such share is not determined until the subsequent
liquidation of the estate (De Borja v. Vda. de Borja, 46 SCRA 577
[1972]).
Teodorica Babangha died long before World War II, hence, the rights to
the succession were transmitted from the moment of her death. It is
therefore incorrect to state that it was only in 1966, the date of
extrajudicial partition, when Ricardo received his share in the lot as
inheritance from his mother Teodorica. Thus, when Ricardo sold his
share over lot 2476 that share which he inherited from Teodorica was
also included unless expressly excluded in the deed of sale.
Petitioners contend that Ricardo's share from Teodorica was excluded
in the sale considering that a paragraph of the aforementioned deed
refers merely to the shares of Ricardo and Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed as to
harmonize and give effect to the different provisions thereof
(Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]),
to ascertain the meaning of the provisions of a contract, its entirety must
be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA 83 [1970]).
The interpretation insisted upon by the petitioners, by citing only one
paragraph of the deed of sale, would not only create contradictions but
also, render meaningless and set at naught the entire provisions
thereof.
Petitioners claim that DELCOR's action is barred by laches considering
that the petitioners have remained in the actual, open, uninterrupted
and adverse possession thereof until at present (Rollo, p. 17).
An instrument notarized by a notary public as in the case at bar is a
public instrument (Eacnio v. Baens, 5 Phil. 742). The execution of a
public instrument is equivalent to the delivery of the thing (Art. 1498, 1st
Par., Civil Code) and is deemed legal delivery. Hence, its execution was
considered a sufficient delivery of the property (Buencamino v. Viceo,
13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de
Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban Development
Corp. v. Auditor Gen., 63 SCRA 397 (1975]).
Besides, the property sold is a registered land. It is the act of
registration that transfers the ownership of the land sold. (GSIS v. C.A.,
G.R. No. 42278, January 20, 1989). If the property is a registered land,
the purchaser in good, faith has a right to rely on the certificate of title
and is under no duty to go behind it to look for flaws (Mallorca v. De
Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA
710 [1988]; Nuguid v. CA-G.R. No. 77427, March 13, 1989).
Under the established principles of land registration law, the person
dealing with registered land may generally rely on the correctness of its
certificate of title and the law will in no way oblige him to go behind the
certificate to determine the condition of the property (Tiongco v. de la
Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R. No. 49739, January
20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This
notwithstanding, DELCOR did more than that. It did not only rely on the
certificate of title. The Court of Appeals found that it had first
investigated and checked the title (T.C.T. No. T-1183) in the name of
Luis Lancero. It likewise inquired into the Subdivision Plan, the
corresponding technical description and the deed of sale executed by
Ricardo Gevero in favor of Luis Lancero and found everything in order.
It even went to the premises and found Luis Lancero to be in
possession of the land to the exclusion of any other person. DELCOR
had therefore acted in good faith in purchasing the land in question.
Consequently, DELCOR's action is not barred by laches.
The main issues having been disposed of, discussion of the other
issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby DISMISSED
and the decision of the Court of Appeals is hereby AFFIRMED.
SO ORDERED.
G.R. No. 89783 February 19, 1992
MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN,
AUREA B. LOCSIN, MATILDE L. CORDERO, SALVADOR B.
LOCSIN and MANUEL V. DEL ROSARIO, petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO
JAUCIAN, MERCEDES JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA
J. BORJA, HEIRS OF EDUARDO JAUCIAN and HEIRS OF VICENTE
JAUCIAN, respondents.
Aytona Law Office and Siquia Law Offices for petitioners.
Mabella, Sangil & Associates for private respondents.
NARVASA, C.J.:
Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-
11186 — affirming with modification the judgment of the Regional Trial
Court of Albay in favor of the plaintiffs in Civil Case No. 7152 entitled
"Jose Jaucian, et al. v. Mariano B. Locsin, et al.," an action for recovery
of real property with damages — is sought. in these proceedings
initiated by petition for review on certiorari in accordance with Rule 45 of
the Rules of Court.
The petition was initially denied due course and dismissed by this Court.
It was however reinstated upon a second motion for reconsideration
filed by the petitioners, and the respondents were required to comment
thereon. The petition was thereafter given due course and the parties
were directed to submit their memorandums. These, together with the
evidence, having been carefully considered, the Court now decides the
case.
First, the facts as the Court sees them in light of the evidence on record:
The late Getulio Locsin had three children named Mariano, Julian and
Magdalena, all surnamed Locsin. He owned extensive residential and
agricultural properties in the provinces of Albay and Sorsogon. After his
death, his estate was divided among his three (3) children as follows:
(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon,
were adjudicated to his daughter, Magdalena Locsin;
(b) 106 hectares of coconut lands were given to Julian Locsin, father of
the petitioners Julian, Mariano, Jose, Salvador, Matilde, and Aurea, all
surnamed Locsin;
(c) more than forty (40) hectares of coconut lands in Bogtong, eighteen
(18) hectares of riceland in Daraga, and the residential lots in Daraga,
Albay and in Legazpi City went to his son Mariano, which Mariano
brought into his marriage to Catalina Jaucian in 1908. Catalina, for her
part, brought into the marriage untitled properties which she had
inherited from her parents, Balbino Jaucian and Simona Anson. These
were augmented by other properties acquired by the spouses in the
course of their union,1 which however was not blessed with children.
Eventually, the properties of Mariano and Catalina were brought under
the Torrens System. Those that Mariano inherited from his father,
Getulio Locsin, were surveyed cadastrally and registered in the name of
"Mariano Locsin, married to Catalina Jaucian.'' 2
Mariano Locsin executed a Last Will and Testament instituting his wife,
Catalina, as the sole and universal heir of all his properties. 3 The will
was drawn up by his wife's nephew and trusted legal adviser, Attorney
Salvador Lorayes. Attorney Lorayes disclosed that the spouses being
childless, they had agreed that their properties, after both of them shall
have died should revert to their respective sides of the
family, i.e., Mariano's properties would go to his "Locsin relatives"
(i.e., brothers and sisters or nephews and nieces), and those of Catalina
to her "Jaucian relatives." 4
Don Mariano Locsin died of cancer on September 14, 1948 after a
lingering illness. In due time, his will was probated in Special
Proceedings No. 138, CFI of Albay without any opposition from both
sides of the family. As directed in his will, Doña Catalina was appointed
executrix of his estate. Her lawyer in the probate proceeding was
Attorney Lorayes. In the inventory of her husband's estate 5 which she
submitted to the probate court for approval, 6Catalina declared that "all
items mentioned from Nos. 1 to 33 are the private properties of the
deceased and form part of his capital at the time of the marriage with
the surviving spouse, while items Nos. 34 to 42 are conjugal." 7
Among her own and Don Mariano's relatives, Doña Catalina was
closest to her nephew, Attorney Salvador Lorayes, her nieces, Elena
Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the
husbands of the last two: Hostilio Cornelio and Fernando
Velasco. 8 Her trust in Hostilio Cornelio was such that she made him
custodian of all the titles of her properties; and before she disposed of
any of them, she unfailingly consulted her lawyer-nephew, Attorney
Salvador Lorayes. It was Atty. Lorayes who prepared the legal
documents and, more often than not, the witnesses to the transactions
were her niece Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes-
Velasco, or their husbands. Her niece, Elena Jaucian, was her life-long
companion in her house.
Don Mariano relied on Doña Catalina to carry out the terms of their
compact, hence, nine (9) years after his death, as if in obedience to his
voice from the grave, and fully cognizant that she was also advancing in
years, Doña Catalina began transferring, by sale, donation or
assignment, Don Mariano's as well as her own, properties to their
respective nephews and nieces. She made the following sales and
donation of properties which she had received from her husband's
estate, to his Locsin nephews and nieces:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES
23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481
favor of Mariano Locsin
1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000
Jose R. Locsin
1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio
Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
2 Feb. 4, 1975 Deed of Donation in 34,045
favor Aurea Locsin,
Matilde L. Cordero 32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200
and Salvador Locsin favor of Juan Saballa
3 Sept. 9, 1975 Deed of Donation in (Lot 2059) 25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500
favor Aurea Locsin, of Rogelio Marticio
Matilde L. Cordero Doña Catalina died on July 6, 1977.
and Salvador Locsin Four years before her death, she had made a will on October 22, 1973
4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio affirming and ratifying the transfers she had made during her lifetime in
favor of Aurea B. Locsin Fernando Velasco favor of her husband's, and her own, relatives. After the reading of her
5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio will, all the relatives agreed that there was no need to submit it to the
Cornelio court for probate because the properties devised to them under the will
favor of Aurea B. Locsin Elena Jaucian had already been conveyed to them by the deceased when she was still
6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto - alive, except some legacies which the executor of her will or estate,
favor of Aurea B. Locsin Attorney Salvador Lorayes, proceeded to distribute.
7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto - In 1989, or six (6) years after Doña Catalina's demise, some of her
favor of Aurea B. Locsin Jaucian nephews and nieces who had already received their legacies
15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto - and hereditary shares from her estate, filed action in the Regional Trial
Aurea Locsin Court of Legaspi City (Branch VIII, Civil Case No. 7152) to recover the
16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson properties which she had conveyed to the Locsins during her lifetime,
Aurea Locsin M. Acabado alleging that the conveyances were inofficious, without consideration,
17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito and intended solely to circumvent the laws on succession. Those who
Aurea Locsin Mariano B. Locsin were closest to Doña Catalina did not join the action.
19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto - After the trial, judgment was rendered on July 8, l985 in favor of the
favor of Mariano Locsin plaintiffs (Jaucian), and against the Locsin defendants, the dispositive
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 part of which reads:
Delfina Anson WHEREFORE, this Court renders judgment for the
in favor of Manuel V. del (Lot 2155) Antonio Illegible plaintiffs and against the defendants:
Rosario whose maternal (1) declaring the, plaintiffs, except the heirs of
grandfather was Getulio Josefina J. Borja and Eduardo Jaucian, who
Locsin withdrew, the rightful heirs and entitled to the entire
2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio estate, in equal portions, of Catalina Jaucian Vda.
Illegible de Locsin, being the nearest collateral heirs by right
in favor of Manuel V. del (Lot 2155) Salvador Nical of representation of Juan and Gregorio, both
Rosario but the rentals surnamed Jaucian, and full-blood brothers of
from bigger portion of Catalina;
Lot 2155 leased to Filoil (2) declaring the deeds of sale, donations,
Refinery were assigned to reconveyance and exchange and all other
Maria Jaucian Lorayes instruments conveying any part of the estate of
Cornelio Catalina J. Vda. de Locsin including, but not limited
Of her own properties, Doña Catalina conveyed the following to her own to those in the inventory of known properties (Annex
nephews and nieces and others: B of the complaint) as null and void ab-initio;
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE (3) ordering the Register of Deeds of Albay and/or
2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000 Legazpi City to cancel all certificates of title and
Vicente Jaucian (lot 2020) other transfers of the real properties, subject of this
(6,825 sqm. when case, in the name of defendants, and derivatives
resurveyed) therefrom, and issue new ones to the plaintiffs;
24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000 (4) ordering the defendants, jointly and severally, to
in favor of Francisco M. reconvey ownership and possession of all such
Maquiniana properties to the plaintiffs, together with all
26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300 muniments of title properly endorsed and delivered,
favor of Francisco and all the fruits and incomes received by the
Maquiniana defendants from the estate of Catalina, with legal
27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000 interest from the filing of this action; and where
favor of Ireneo Mamia reconveyance and delivery cannot be effected for
28 May 3, 1973 Deed of Absolute Sale in 75 P 750 reasons that might have intervened and prevent the
favor of Zenaida Buiza same, defendants shall pay for the value of such
29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500 properties, fruits and incomes received by them,
favor of Felisa Morjella also with legal interest from the filing, of this case
30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000 (5) ordering each of the defendants to pay the
favor of Inocentes Motocinos plaintiffs the amount of P30,000.00 as exemplary
31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500 damages; and the further sum of P20,000.00 each
favor of Casimiro Mondevil as moral damages; and
 (6) ordering the defendants to pay the plaintiffs
attorney's fees and litigation expenses, in the
amount of P30,000.00 without prejudice to any
contract between plaintiffs and counsel.
Costs against the defendants.9
The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186)
which rendered its now appealed judgment on March 14, 1989,
affirming the trial court's decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring the private
respondents, nephews and nieces of Doña Catalina J. Vda. de Locsin,
entitled to inherit the properties which she had already disposed of more
than ten (10) years before her death. For those properties did not form
part of her hereditary estate, i.e., "the property and transmissible rights
and obligations existing at the time of (the decedent's) death and those
which have accrued thereto since the opening of the
succession." 10 The rights to a person's succession are transmitted from
the moment of his death, and do not vest in his heirs until such
time.11 Property which Doña Catalina had transferred or conveyed to
other persons during her lifetime no longer formed part of her estate at
the time of her death to which her heirs may lay claim. Had she died
intestate, only the property that remained in her estate at the time of her
death devolved to her legal heirs; and even if those transfers were, one
and all, treated as donations, the right arising under certain
circumstances to impugn and compel the reduction or revocation of a
decedent's gifts inter vivos does not inure to the respondents since
neither they nor the donees are compulsory (or forced) heirs. 12
There is thus no basis for assuming an intention on the part of Doña
Catalina, in transferring the properties she had received from her late
husband to his nephews and nieces, an intent to circumvent the law in
violation of the private respondents' rights to her succession. Said
respondents are not her compulsory heirs, and it is not pretended that
she had any such, hence there were no legitimes that could conceivably
be impaired by any transfer of her property during her lifetime. All that
the respondents had was an expectancy that in nowise restricted her
freedom to dispose of even her entire estate subject only to the
limitation set forth in Art. 750, Civil Code which, even if it were
breached, the respondents may not invoke:
Art. 750. The donation may comprehend all the
present property of the donor or part thereof,
provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself,
and of all relatives who, at the time of the
acceptance of the donation, are by law entitled to be
supported by the donor. Without such reservation,
the donation shall be reduced on petition of any
person affected. (634a)
The lower court capitalized on the fact that Doña Catalina was already
90 years old when she died on July 6, 1977. It insinuated that because
of her advanced years she may have been imposed upon, or unduly
influenced and morally pressured by her husband's nephews and
nieces (the petitioners) to transfer to them the properties which she had
inherited from Don Mariano's estate. The records do not support that
conjecture.
For as early as 1957, or twenty-eight (28) years before her death, Doña
Catalina had already begun transferring to her Locsin nephews and
nieces the properties which she received from Don Mariano. She sold a
962-sq.m. lot on January 26, 1957 to his nephew and namesake
Mariano Locsin II. 13 On April 7, 1966, or 19 years before she passed
away, she also sold a 43 hectare land to another Locsin nephew, Jose
R. Locsin.14 The next year, or on March 22, 1967, she sold a 5,000-
sq.m. portion of Lot 2020 to Julian Locsin.15
On March 27, 1967, Lot 2020 16 was partitioned by and among Doña
Catalina, Julian Locsin, Vicente Jaucian and Agapito Lorete.17 At least
Vicente Jaucian, among the other respondents in this case, is estopped
from assailing the genuineness and due execution of the sale of
portions of Lot 2020 to himself, Julian Locsin, and Agapito Lorete, and
the partition agreement that he (Vicente) concluded with the other co-
owners of Lot 2020.
Among Doña, Catalina's last transactions before she died in 1977 were
the sales of property which she made in favor of Aurea Locsin and
Mariano Locsin in 1975.18
There is not the slightest suggestion in the record that Doña Catalina
was mentally incompetent when she made those dispositions. Indeed,
how can any such suggestion be made in light of the fact that even as
she was transferring properties to the Locsins, she was also
contemporaneously disposing of her other properties in favor of the
Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964
(21 years before her death) one-half (or 5,000 sq.m.) of Lot 2020. Three
years later, or on March 22, 1967, she sold another 5000 sq.m. of the
same lot to Julian Locsin.19
From 1972 to 1973 she made several other transfers of her properties
to her relatives and other persons, namely: Francisco Maquiniana,
Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos,
Casimiro Mondevil, Juan Saballa and Rogelio Marticio. 20 None of those
transactions was impugned by the private respondents.
In 1975, or two years before her death, Doña Catalina sold some lots
not only to Don Mariano's niece, Aurea Locsin, and his nephew,
Mariano Locsin
II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was
competent to make that conveyance to Mercedes, how can there be
any doubt that she was equally competent to transfer her other pieces
of property to Aurea and Mariano II?
The trial court's belief that Don Mariano Locsin bequeathed his entire
estate to his wife, from a "consciousness of its real origin" which carries
the implication that said estate consisted of properties which his wife
had inherited from her parents, flies in the teeth of Doña Catalina's
admission in her inventory of that estate, that "items 1 to 33 are the
private properties of the deceased (Don Mariano) and forms (sic) part of
his capital at the time of the marriage with the surviving spouse, while
items 34 to 42 are conjugal properties, acquired during the marriage."
She would have known better than anyone else whether the listing
included any of her paraphernal property so it is safe to assume that
none was in fact included. The inventory was signed by her under oath,
and was approved by the probate court in Special Proceeding No. 138
of the Court of First Instance of Albay. It was prepared with the
assistance of her own nephew and counsel, Atty. Salvador Lorayes,
who surely would not have prepared a false inventory that would have
been prejudicial to his aunt's interest and to his own, since he stood to
inherit from her eventually.
This Court finds no reason to disbelieve Attorney Lorayes' testimony
that before Don Mariano died, he and his wife (Doña Catalina), being
childless, had agreed that their respective properties should eventually
revert to their respective lineal relatives. As the trusted legal adviser of
the spouses and a full-blood nephew of Doña Catalina, he would not
have spun a tale out of thin air that would also prejudice his own
interest.
Little significance, it seems, has been attached to the fact that among
Doña Catalina's nephews and nieces, those closest to her: (a) her
lawyer-nephew Attorney Salvador Lorayes; (b) her niece and
companion Elena Jaucian: (c) her nieces Maria Olbes-Velasco and
Maria Lorayes-Cornelio and their respective husbands, Fernando
Velasco and Hostilio Cornelio, did not join the suit to annul and undo the
dispositions of property which she made in favor of the Locsins,
although it would have been to their advantage to do so. Their
desistance persuasively demonstrates that Doña Catalina acted as a
completely free agent when she made the conveyances in favor of the
petitioners. In fact, considering their closeness to Doña Catalina it would
have been well-nigh impossible for the petitioners to employ "fraud,
undue pressure, and subtle manipulations" on her to make her sell or
donate her properties to them. Doña Catalina's niece, Elena Jaucian,
daughter of her brother, Eduardo Jaucian, lived with her in her house.
Her nephew-in-law, Hostilio Cornelio, was the custodian of the titles of
her properties. The sales and donations which she signed in favor of the
petitioners were prepared by her trusted legal adviser and nephew,
Attorney Salvador Lorayes. The (1) deed of donation dated November
19,
197423 in favor of Aurea Locsin, (2) another deed of donation dated
February 4, 1975 24 in favor of Matilde Cordero, and (3) still another
deed dated September 9, 1975 25 in favor of Salvador Lorayes, were all
witnessed by Hostilio Cornelio (who is married to Doña Catalina's niece,
Maria Lorayes) and Fernando Velasco who is married to another niece,
Maria Olbes.26 The sales which she made in favor of Aurea Locsin on
July 15, 1974 27 were witnessed by Hostilio Cornelio and Elena Jaucian.
Given those circumstances, said transactions could not have been
anything but free and voluntary acts on her part.
Apart from the foregoing considerations, the trial court and the Court of
Appeals erred in not dismissing this action for annulment and
reconveyance on the ground of prescription. Commenced decades after
the transactions had been consummated, and six (6) years after Doña
Catalina's death, it prescribed four (4) years after the subject
transactions were recorded in the Registry of Property,28 whether
considered an action based on fraud, or one to redress an injury to the
rights of the plaintiffs. The private respondents may not feign ignorance
of said transactions because the registration of the deeds was
constructive notice thereof to them and the whole world.29
WHEREFORE, the petition for review is granted. The decision dated
March 14, 1989 of the Court of Appeals in CA-G.R. CV No. 11186 is
REVERSED and SET ASIDE. The private respondents' complaint for
annulment of contracts and reconveyance of properties in Civil Case
No. 7152 of the Regional Trial Court, Branch VIII of Legazpi City, is
DISMISSED, with costs against the private respondents, plaintiffs
therein.
SO ORDERED.
G.R. No. 126334 November 23, 2001
EMILIO EMNACE, petitioner,
vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN
TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO
DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA
TABANAO and VINCENT TABANAO, respondents.
YNARES-SANTIAGO, J.:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia
were partners in a business concern known as Ma. Nelma Fishing
Industry. Sometime in January of 1986, they decided to dissolve their
partnership and executed an agreement of partition and distribution of
the partnership properties among them, consequent to Jacinto
Divinagracia's withdrawal from the partnership.1 Among the assets to be
distributed were five (5) fishing boats, six (6) vehicles, two (2) parcels of
land located at Sto. Niño and Talisay, Negros Occidental, and cash
deposits in the local branches of the Bank of the Philippine Islands and
Prudential Bank.
Throughout the existence of the partnership, and even after Vicente
Tabanao's untimely demise in 1994, petitioner failed to submit to
Tabanao's heirs any statement of assets and liabilities of the
partnership, and to render an accounting of the partnership's finances.
Petitioner also reneged on his promise to turn over to Tabanao's heirs
the deceased's 1/3 share in the total assets of the partnership,
amounting to P30,000,000.00, or the sum of P10,000,000.00, despite
formal demand for payment thereof.2
Consequently, Tabanao' s heirs, respondents herein, filed against
petitioner an action for accounting, payment of shares, division of
assets and damages.3 In their complaint, respondents prayed as
follows:
1. Defendant be ordered to render the proper accounting of all
the assets and liabilities of the partnership at bar; and
2. After due notice and hearing defendant be ordered to
pay/remit/deliver/surrender/yield to the plaintiffs the following:
A. No less than One Third (1/3) of the assets,
properties, dividends, cash, land(s), fishing vessels,
trucks, motor vehicles, and other forms and
substance of treasures which belong and/or should
belong, had accrued and/or must accrue to the
partnership;
B. No less than Two Hundred Thousand Pesos
(P200,000.00) as moral damages;
C. Attorney's fees equivalent to Thirty Percent
(30%) of the entire share/amount/award which the
Honorable Court may resolve the plaintiffs as
entitled to plus P1,000.00 for every appearance in
court.4
Petitioner filed a motion to dismiss the complaint on the grounds of
improper venue, lack of jurisdiction over the nature of the action or suit,
and lack of capacity of the estate of Tabanao to sue.5 On August 30,
1994, the trial court denied the motion to dismiss. It held that venue was
properly laid because, while realties were involved, the action was
directed against a particular person on the basis of his personal liability;
hence, the action is not only a personal action but also an action in
personam. As regards petitioner's argument of lack of jurisdiction over
the action because the prescribed docket fee was not paid considering
the huge amount involved in the claim, the trial court noted that a
request for accounting was made in order that the exact value of the
partnership may be ascertained and, thus, the correct docket fee may
be paid. Finally, the trial court held that the heirs of Tabanao had aright
to sue in their own names, in view of the provision of Article 777 of the
Civil Code, which states that the rights to the succession are transmitted
from the moment of the death of the decedent.6
The following day, respondents filed an amended
complaint,7 incorporating the additional prayer that petitioner be ordered
to "sell all (the partnership's) assets and thereafter
pay/remit/deliver/surrender/yield to the plaintiffs" their corresponding
share in the proceeds thereof. In due time, petitioner filed a
manifestation and motion to dismiss,8arguing that the trial court did not
acquire jurisdiction over the case due to the plaintiffs' failure to pay the
proper docket fees. Further, in a supplement to his motion to
dismiss,9 petitioner also raised prescription as an additional ground
warranting the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order,10 denying the motion
to dismiss inasmuch as the grounds raised therein were basically the
same as the earlier motion to dismiss which has been denied. Anent the
issue of prescription, the trial court ruled that prescription begins to run
only upon the dissolution of the partnership when the final accounting is
done. Hence, prescription has not set in the absence of a final
accounting. Moreover, an action based on a written contract prescribes
in ten years from the time the right of action accrues.
Petitioner filed a petition for certiorari before the Court of
Appeals,11 raising the following issues:
I. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the required
docket fee;
II. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in insisting to try
the case which involve (sic) a parcel of land situated outside
of its territorial jurisdiction;
III. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in allowing the
estate of the deceased to appear as party plaintiff, when there
is no intestate case and filed by one who was never appointed
by the court as administratrix of the estates; and
IV. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in not dismissing
the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the assailed
decision,12 dismissing the petition for certiorari, upon a finding that no
grave abuse of discretion amounting to lack or excess of jurisdiction
was committed by the trial court in issuing the questioned orders
denying petitioner's motions to dismiss.
Not satisfied, petitioner filed the instant petition for review, raising the
same issues resolved by the Court of Appeals, namely:
I. Failure to pay the proper docket fee;
II. Parcel of land subject of the case pending before the
trial court is outside the said court's territorial jurisdiction;
III. Lack of capacity to sue on the part of plaintiff heirs of
Vicente Tabanao; and
IV. Prescription of the plaintiff heirs' cause of action.
It can be readily seen that respondents' primary and ultimate objective
in instituting the action below was to recover the decedent's 1/3 share in
the partnership' s assets. While they ask for an accounting of the
partnership' s assets and finances, what they are actually asking is for
the trial court to compel petitioner to pay and turn over their share, or
the equivalent value thereof, from the proceeds of the sale of the
partnership assets. They also assert that until and unless a proper
accounting is done, the exact value of the partnership' s assets, as well
as their corresponding share therein, cannot be ascertained.
Consequently, they feel justified in not having paid the commensurate
docket fee as required by the Rules of Court.1âwphi1.nêt
We do not agree. The trial court does not have to employ guesswork in
ascertaining the estimated value of the partnership's assets, for
respondents themselves voluntarily pegged the worth thereof at Thirty
Million Pesos (P30,000,000.00). Hence, this case is one which is really
not beyond pecuniary estimation, but rather partakes of the nature of a
simple collection case where the value of the subject assets or amount
demanded is pecuniarily determinable.13 While it is true that the exact
value of the partnership's total assets cannot be shown with certainty at
the time of filing, respondents can and must ascertain, through informed
and practical estimation, the amount they expect to collect from the
partnership, particularly from petitioner, in order to determine the proper
amount of docket and other fees.14 It is thus imperative for respondents
to pay the corresponding docket fees in order that the trial court may
acquire jurisdiction over the action.15
Nevertheless, unlike in the case of Manchester Development
Corp. v. Court of Appeals,16 where there was clearly an effort to defraud
the government in avoiding to pay the correct docket fees, we see no
attempt to cheat the courts on the part of respondents. In fact, the lower
courts have noted their expressed desire to remit to the court "any
payable balance or lien on whatever award which the Honorable Court
may grant them in this case should there be any deficiency in the
payment of the docket fees to be computed by the Clerk of
Court."17 There is evident willingness to pay, and the fact that the
docket fee paid so far is inadequate is not an indication that they are
trying to avoid paying the required amount, but may simply be due to an
inability to pay at the time of filing. This consideration may have moved
the trial court and the Court of Appeals to declare that the unpaid
docket fees shall be considered a lien on the judgment award.
Petitioner, however, argues that the trial court and the Court of Appeals
erred in condoning the non-payment of the proper legal fees and in
allowing the same to become a lien on the monetary or property
judgment that may be rendered in favor of respondents. There is merit
in petitioner's assertion. The third paragraph of Section 16, Rule 141 of
the Rules of Court states that:
The legal fees shall be a lien on the monetary or property
judgment in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their favor because it
specifically applies to pauper-litigants. Nowhere in the records does it
appear that respondents are litigating as paupers, and as such are
exempted from the payment of court fees.18
The rule applicable to the case at bar is Section 5(a) of Rule 141 of the
Rules of Court, which defines the two kinds of claims as: (1) those
which are immediately ascertainable; and (2) those which cannot be
immediately ascertained as to the exact amount. This second class of
claims, where the exact amount still has to be finally determined by the
courts based on evidence presented, falls squarely under the third
paragraph of said Section 5(a), which provides:
In case the value of the property or estate or the sum claimed
is less or more in accordance with the appraisal of the court,
the difference of fee shall be refunded or paid as the case
may be. (Underscoring ours)
In Pilipinas Shell Petroleum Corporation v. Court of Appeals,19 this
Court pronounced that the above-quoted provision "clearly
contemplates an Initial payment of the filing fees corresponding to the
estimated amount of the claim subject to adjustment as to what later
may be proved."20 Moreover, we reiterated therein the principle that the
payment of filing fees cannot be made contingent or dependent on the
result of the case. Thus, an initial payment of the docket fees based on
an estimated amount must be paid simultaneous with the filing of the
complaint. Otherwise, the court would stand to lose the filing fees
should the judgment later turn out to be adverse to any claim of the
respondent heirs.
The matter of payment of docket fees is not a mere triviality. These fees
are necessary to defray court expenses in the handling of cases.
Consequently, in order to avoid tremendous losses to the judiciary, and
to the government as well, the payment of docket fees cannot be made
dependent on the outcome of the case, except when the claimant is a
pauper-litigant.
Applied to the instant case, respondents have a specific claim - 1/3 of
the value of all the partnership assets - but they did not allege a specific
amount. They did, however, estimate the partnership's total assets to be
worth Thirty Million Pesos (P30,000,000.00), in a letter21 addressed to
petitioner. Respondents cannot now say that they are unable to make
an estimate, for the said letter and the admissions therein form part of
the records of this case. They cannot avoid paying the initial docket fees
by conveniently omitting the said amount in their amended complaint.
This estimate can be made the basis for the initial docket fees that
respondents should pay. Even if it were later established that the
amount proved was less or more than the amount alleged or estimated,
Rule 141, Section 5(a) of the Rules of Court specifically provides that
the court may refund the 'excess or exact additional fees should the
initial payment be insufficient. It is clear that it is only the difference
between the amount finally awarded and the fees paid upon filing of this
complaint that is subject to adjustment and which may be subjected to
alien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano
Asuncion,22 this Court held that when the specific claim "has been left
for the determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment and it shall be the responsibility of the
Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee." Clearly, the rules and
jurisprudence contemplate the initial payment of filing and docket fees
based on the estimated claims of the plaintiff, and it is only when there
is a deficiency that a lien may be constituted on the judgment award
until such additional fee is collected.
Based on the foregoing, the trial court erred in not dismissing the
complaint outright despite their failure to pay the proper docket fees.
Nevertheless, as in other procedural rules, it may be liberally construed
in certain cases if only to secure a just and speedy disposition of an
action. While the rule is that the payment of the docket fee in the proper
amount should be adhered to, there are certain exceptions which must
be strictly construed.23
In recent rulings, this Court has relaxed the strict adherence to
the Manchester doctrine, allowing the plaintiff to pay the proper docket
fees within a reasonable time before the expiration of the applicable
prescriptive or reglementary period.24
In the recent case of National Steel Corp. v. Court of Appeals,25 this
Court held that:
The court acquires jurisdiction over the action if the filing of
the initiatory pleading is accompanied by the payment of the
requisite fees, or, if the fees are not paid at the time of the
filing of the pleading, as of the time of full payment of the fees
within such reasonable time as the court may grant, unless, of
course, prescription has set in the meantime.
It does not follow, however, that the trial court should have
dismissed the complaint for failure of private respondent to
pay the correct amount of docket fees. Although the payment
of the proper docket fees is a jurisdictional requirement, the
trial court may allow the plaintiff in an action to pay the same
within a reasonable time before the expiration of the
applicable prescriptive or reglementary period. If the plaintiff
fails to comply within this requirement, the defendant should
timely raise the issue of jurisdiction or else he would be
considered in estoppel. In the latter case, the balance
between the appropriate docket fees and the amount actually
paid by the plaintiff will be considered a lien or any award he
may obtain in his favor. (Underscoring ours)
Accordingly, the trial court in the case at bar should determine the
proper docket fee based on the estimated amount that respondents
seek to collect from petitioner, and direct them to pay the same within a
reasonable time, provided the applicable prescriptive or reglementary
period has not yet expired, Failure to comply therewith, and upon
motion by petitioner, the immediate dismissal of the complaint shall
issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part of the trial
court and the Court of Appeals in holding that the case below is a
personal action which, under the Rules, may be commenced and tried
where the defendant resides or may be found, or where the plaintiffs
reside, at the election of the latter.26
Petitioner, however, insists that venue was improperly laid since the
action is a real action involving a parcel of land that is located outside
the territorial jurisdiction of the court a quo. This contention is not well-
taken. The records indubitably show that respondents are asking that
the assets of the partnership be accounted for, sold and distributed
according to the agreement of the partners. The fact that two of the
assets of the partnership are parcels of land does not materially change
the nature of the action. It is an action in personam because it is an
action against a person, namely, petitioner, on the basis of his personal
liability. It is not an action in rem where the action is against the thing
itself instead of against the person.27 Furthermore, there is no showing
that the parcels of land involved in this case are being disputed. In fact,
it is only incidental that part of the assets of the partnership under
liquidation happen to be parcels of land.
The time-tested case of Claridades v. Mercader, et al.,28 settled this
issue thus:
The fact that plaintiff prays for the sale of the assets of the
partnership, including the fishpond in question, did not change
the nature or character of the action, such sale being merely a
necessary incident of the liquidation of the partnership, which
should precede and/or is part of its process of dissolution.
The action filed by respondents not only seeks redress against
petitioner. It also seeks the enforcement of, and petitioner's compliance
with, the contract that the partners executed to formalize the
partnership's dissolution, as well as to implement the liquidation and
partition of the partnership's assets. Clearly, it is a personal action that,
in effect, claims a debt from petitioner and seeks the performance of a
personal duty on his part.29 In fine, respondents' complaint seeking the
liquidation and partition of the assets of the partnership with damages is
a personal action which may be filed in the proper court where any of
the parties reside.30 Besides, venue has nothing to do with jurisdiction
for venue touches more upon the substance or merits of the case.31 As
it is, venue in this case was properly laid and the trial court correctly
ruled so.
On the third issue, petitioner asserts that the surviving spouse of
Vicente Tabanao has no legal capacity to sue since she was never
appointed as administratrix or executrix of his estate. Petitioner's
objection in this regard is misplaced. The surviving spouse does not
need to be appointed as executrix or administratrix of the estate before
she can file the action. She and her children are complainants in their
own right as successors of Vicente Tabanao. From the very moment of
Vicente Tabanao' s death, his rights insofar as the partnership was
concerned were transmitted to his heirs, for rights to the succession are
transmitted from the moment of death of the decedent.32
Whatever claims and rights Vicente Tabanao had against the
partnership and petitioner were transmitted to respondents by operation
of law, more particularly by succession, which is a mode of acquisition
by virtue of which the property, rights and obligations to the extent of the
value of the inheritance of a person are transmitted.33Moreover,
respondents became owners of their respective hereditary shares from
the moment Vicente Tabanao died.34
A prior settlement of the estate, or even the appointment of Salvacion
Tabanao as executrix or administratrix, is not necessary for any of the
heirs to acquire legal capacity to sue. As successors who stepped into
the shoes of their decedent upon his death, they can commence any
action originally pertaining to the decedent.35 From the moment of his
death, his rights as a partner and to demand fulfillment of petitioner's
obligations as outlined in their dissolution agreement were transmitted
to respondents. They, therefore, had the capacity to sue and seek the
court's intervention to compel petitioner to fulfill his obligations.
Finally, petitioner contends that the trial court should have dismissed
the complaint on the ground of prescription, arguing that respondents'
action prescribed four (4) years after it accrued in 1986. The trial court
and the Court of Appeals gave scant consideration to petitioner's hollow
arguments, and rightly so.
The three (3) final stages of a partnership are: (1) dissolution; (2)
winding-up; and (3) termination.36 The partnership, although dissolved,
continues to exist and its legal personality is retained, at which time it
completes the winding up of its affairs, including the partitioning and
distribution of the net partnership assets to the partners.37 For as long
as the partnership exists, any of the partners may demand an
accounting of the partnership's business. Prescription of the said right
starts to run only upon the dissolution of the partnership when the final
accounting is done.38
Contrary to petitioner's protestations that respondents' right to inquire
into the business affairs of the partnership accrued in 1986, prescribing
four (4) years thereafter, prescription had not even begun to run in the
absence of a final accounting. Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any
partner, or his legal representative as against the winding up
partners or the surviving partners or the person or partnership
continuing the business, at the date of dissolution, in the
absence of any agreement to the contrary.
Applied in relation to Articles 1807 and 1809, which also deal with the
duty to account, the above-cited provision states that the right to
demand an accounting accrues at the date of dissolution in the absence
of any agreement to the contrary. When a final accounting is made, it is
only then that prescription begins to run. In the case at bar, no final
accounting has been made, and that is precisely what respondents are
seeking in their action before the trial court, since petitioner has failed or
refused to render an accounting of the partnership's business and
assets. Hence, the said action is not barred by prescription.
In fine, the trial court neither erred nor abused its discretion when it
denied petitioner's motions to dismiss. Likewise, the Court of Appeals
did not commit reversible error in upholding the trial court's orders.
Precious time has been lost just to settle this preliminary issue, with
petitioner resurrecting the very same arguments from the trial court all
the way up to the Supreme Court. The litigation of the merits and
substantial issues of this controversy is now long overdue and must
proceed without further delay.
WHEREFORE, in view of all the foregoing, the instant petition
is DENIED for lack of merit, and the case is REMANDED to the
Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to
determine the proper docket fee based on the estimated amount that
plaintiffs therein seek to collect, and direct said plaintiffs to pay the
same within a reasonable time, provided the applicable prescriptive or
reglementary period has not yet expired. Thereafter, the trial court
is ORDERED to conduct the appropriate proceedings in Civil Case No.
416-C.
Costs against petitioner.1âwphi1.nêt
SO ORDERED.