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"x x x a compulsory counterclaim is auxiliary to the proceeding in the original suit
and derives its jurisdictional support therefrom, inasmuch as it arises out of or is
necessarily connected with the transaction or occurrence that is the subject matter of
the complaint. It follows that if the court does not have jurisdiction to entertain the
main action of the case and dismisses the same, then the compulsory counterclaim,being ancilliary to the main action, must likewise be dismissed since no jurisdiction
remained for any grant of relief under the counterclaim.[15]
"The aforementioned doctrine is in consonance with the primary objective of a
counterclaim which is to avoid and prevent circuity of action by allowing the entire
controversy between the parties to be litigated and finally determined in one action,
wherever this can be done with justice to all parties concerned."[16]
Furthermore, there is no denying the fact that it was private respondent herself who
caused the dismissal of her counterclaim for not only did she fail to object to, but she
actually moved for the dismissal of the complaint.[17] In the words of Justice Abad
Santos,
"x x x The petitioner (private respondent in this case) does not object to the
dismissal of the civil case but nonetheless wants her counterclaim therein to subsist.
Impossible. A person cannot eat his cake and have it at the same time. If the civil
case is dismissed, so also is the counterclaim filed therein."[18]
THIRD DIVISIONG.R. No. 115088. June 20, 1996
INTESTATE ESTATE OF AMADO B. DALISAY, represented by Special Administratrix
PRECIOSA D. TIROL, petitioner, vs. HON. ROMEO D. MARASIGAN and LOURDES
OPPUS, respondents.
Section 3, Rule 17 of the 1997 Rules of Court
provides:
SEC. 3. Dismissal due to fault of plaintiff. – If, for no
justifiable cause, the plaintiff failsto appear on the
date of the presentation of his evidence in chief on the
complaint, orto prosecute his action for an
unreasonable length of time, or to comply with these
Rules or any order of the court, the complaint may be
dismissed upon motion of the defendant or upon the
court’s own motion, without prejudice to the right of
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the defendant to prosecute his counterclaim in the
same or in a separate action. This dismissal
shall have the effect of an adjudication upon the
merits, unless otherwise declared by the
court. (Emphases supplied)
A judgment is revived only when the same cannot be enforced by motion, that is,
after five years from the time it becomes final. A revived judgment can be enforced
by motion within five years from its finality. After said five years, how may the revived
judgment be enforced? Appellee contends that by that time ten years or more would
have elapsed since the first judgment becomes final, so that an action to enforcesaid judgment would then be barred by the statute of limitations.
Appellee's theory relates the period of prescription to the date the original judgment
became final. Such a stand is inconsistent with the accepted view that a judgment
reviving a previous one is a new and different judgment. The inconsistency becomes
clearer when we consider that the causes of action in the three cases are different.
In the original case, the action was premised on the unpaid promissory note signed
by Joaquin Bondoc in favor of the Philippine National Bank; in the second case, the
Philippine National Bank's cause of action was the judgment rendered in Civil Case
No. 8040; and in the present case, the basis is the judgment rendered in Civil Case
No. 30663. Parenthetically, even the amounts involved are different.
The source of Section 6 aforecited is Section 447 of the Code of Civil Procedure
which in turn was derived from the Code of Civil Procedure of California. The rule
followed in California in this regard is that a proceeding by separate ordinary action
to revive a judgment is a new action rather than a continuation of the old, and results
in a new judgment constituting a new cause of action, upon which a new period of
limitations begins to run.3
The judgment in Civil Case No. 30663, which provided the cause of action in thecase at bar, was rendered on February 20, 1957 and became final in the same year.
Pursuant to Article 1144(3) of the New Civil Code the action upon such judgment
must be brought within ten years from 1957 or until 1967. The instant case instituted
in the courta quo on June 7, 1962 is well within the prescriptive period.
rtc-special agrarian court must adopt the proper
procedure in determining just compensation
Here, the RTC failed to observe the basic rules of procedure and the fundamentalrequirements in determining just compensation for the property. Firstly, it dispensed
with the hearing and merely ordered the parties to submit their respective
memoranda. Such action is grossly erroneous since the determination of just
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compensation involves the examination of the following factors specified in Section
17 of RA 6657, as amended:
1. the cost of the acquisition of the land;
2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner, the tax declarations;
5. the assessment made by government assessors;
6. the social and economic benefits contributed by the farmers and the farmworkers
and by the government to the property, and;
7. the non-payment of taxes or loans secured from any government financing
institution on the said land, if any.
Obviously, these factors involve factual matters which can be established only during
a hearing wherein the contending parties present their respective evidence. In fact,
to underscore the intricate nature of determining the valuation of the land, Section 58
of the same law even authorizes the Special Agrarian Courts to appoint
commissioners for such purpose. [Emphasis supplied].
X X X
In determining the valuation of the subject property, the RTC-SAC should consider
the factors provided under Section 1725 of RA 6657 mentioned above. We fully
explained the current doctrine in the proper determination of just compensation in
Lee v. Land Bank of the Philippines26 using the formula provided in AO No. 5-
98.27 Furthermore, upon its own initiative, or at the instance of any of the parties, the
RTC-SAC may appoint one or more commissioners to examine, investigate and
ascertain facts relevant to the dispute pursuant to Section 5828 of RA 6657.
SECOND DIVISION
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[G.R. NO. 160394 : November 27, 2009]
LAND BANK OF THE PHILIPPINES, Petitioner,v. AGUSTIN C.
DIZON, Respondent.
D E C I S I O N
the party who seeks to challenge the foreclosure
proceedings has the burden of evidence to rebut
the sameAt the outset, it bears emphasis that foreclosure proceedings have in their favor the
presumption of regularity and the party who seeks to challenge the proceedings hasthe burden of evidence to rebut the same.15 In this case, respondent failed to prove
that Prudential Bank has not complied with the notice requirement of the law.
Sections 2, 3, and 4 of Act No. 3135 laid down the procedure regarding foreclosure
sale:chanroblesvirtuallawlibrary
Sec. 2. Said sale cannot be made legally outside of the province in which the
property sold is situated; and in case the place within said province in which the sale
is to be made is subject to stipulation, such sale shall be made in said place or in the
municipal building of the municipality in which the property or part thereof is situated.
Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty
days in at least three public places of the municipality or city where the property is
situated, and if such property is worth more than four hundred pesos, such notice
shall also be published once a week for at least three consecutive weeks in a
newspaper of general circulation in the municipality or city.
Sec. 4. The sale shall be made at public auction, between the hours of nine in the
morning and four in the afternoon; and shall be under the direction of the sheriff of
the province, the justice or auxiliary justice of the peace of the municipality in which
such sale has to be made, or a notary public of said municipality, who shall be
entitled to collect a fee of five pesos each day of actual work performed, in addition
to his expenses.
InPhilippine National Bank v. Maraya, Jr.,16 we elucidated that one of the most
important requirements of Act No. 3135 is that the notice of the time and place of
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sale shall be given. If the sheriff acts without notice, or at a time and place other than
that designated in the notice, the sheriff acts without warrant of law.17 In this case,
the property sold in the public auction is located in Quezon City and the foreclosure
sale proceeded as scheduled at 10:00 o’clock in the morning on 26 August 1996 at
the Hall of Justice in Quezon City with Prudential Bank as the winning bidder,
registering the highest bid of P396,000.00.
InCentury Savings Bank v. Samonte18 citing Olizon v. Court of Appeals,
19 the Court
reiterated the purpose of the rule on notice, to wit:chanroblesvirtuallawlibrary
The object of a notice of sale is to inform the public of the nature and condition of the
property to be sold, and of the time, place and terms of the sale. Notices are givenfor the purpose of securing bidders and to prevent a sacrifice of the property. If these
objects are attained, immaterial errors and mistakes will not affect the sufficiency of
the notice; but if mistakes or omissions occur in the notices of sale, which are
calculated to deter or mislead bidders, to depreciate the value of the property, or to
prevent it from bringing a fair price, such mistakes or omissions will be fatal to the
validity of the notice, and also to the sale made pursuant thereto.20
The mistakes and omissions referred to in the above-cited ruling which would
invalidate notice pertain to those which: 1) are calculated to deter or mislead bidders,
2) to depreciate the value of the property, or 3) to prevent it from bringing a fair price.
BANK OF THE PHILIPPINE ISLANDS (FORMERLY PRUDENTIAL
BANK), Petitioner, v. SPOUSES DAVID M. CASTRO AND CONSUELO B.
CASTRO , Respondents,FIRST DIVISION/G.R. No. 195!, "#$%#&'
1, 15
whether to go into declaration of nullity of marriageHere are “steps” or suggestions in deciding whether to step out of the ring or not:
1. Make sure it is the last resort. As stated in aprevious post, love and marriage are
supposed to be forever. Try all options, like counseling, to make it work. If there’s no
progress, weigh your options. On the other side of the scale is the reality that getting
into another relationship or marriage, while the first marital bond is still existing, is a
sure way of courting criminal liability (adultery, concubinage, bigamy). A subsequent
petition for declaration of nullity/annulment of marriage isnot a defense in the
criminal action.
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2. Realize that it will cost you. Getting out of marriage is sometimes more expensive
than getting into one. Expenses include the fees for your lawyer or counsel, filing
fees, professional fees for the psychiatrist or psychologist (if the ground
ispsychological incapacity), etc.
3. Discuss the custody of children, visitation rights, property arrangements
andsupport.Custody over children and separation of properties in annulment are
among the most bitter issues in annulment. As much as possible, discuss and agree
on these matters beforehand.
4. Make sure to invoke a valid ground. Marriage is an inviolable social institution and
any doubt is resolved in its favor. Hence, make sure there’s sufficient basis to go
through the procedure discussed below.
The procedure provided under the Rules on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages is discussed below. Please note
that a petition for “annulment” refers to voidable marriages, which are valid until
annulled by the court, while a petition for “declaration of nullity” refers to marriages
that are considered void or inexistent from the very beginning. There are other
differences (e.g., legitimate status of children, property relations between the
spouses, prescription and ratification), but let’s leave those for another day. For
convenience, we shall refer to both petitions as “annulment”.
1. Preparation and filing of the petition. The petition may be filed, at the option of the
spouse who filed it (called the “petitioner”), in the Family Court of the province or city
where the petitioner or the other spouse (called the “respondent”) resides for the last
6 months prior to the date of filing, or in the case of a non-resident respondent,
7where he/she may be found in the Philippines. An Overseas Filipino Worker (OFW)
may file the petition even while abroad. Incidentally, upon filing of the petition or
anytime thereafter, the court may issue provisional and protective orders.
2. Service of Summons. In simplest terms, this is giving notice to the respondent.
Where the respondent cannot be located at the given address or the whereabouts
are unknown and cannot be ascertained by diligent inquiry, service of summons may
be done by publication. This is crucial because the court cannot validly proceed
without service of summons.
3. Answer. The respondent must answer within 15 days from service of summons
(or within 30 days from the last issue of publication in case of service of summons by
publication). Unlike in civil cases, the respondent in annulment proceedings is not
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declared in default if no answer is filed, but the public prosecutor shall be ordered to
investigate whether collusion exists between the parties.
4. Investigation report of public prosecutor. The public prosecutor prepares a report
on whether there is collusion between the parties. If the court is convinced that
collusion exists, it shall dismiss the petition; otherwise, the court shall set the case
for pre-trial conference. TheRules dispensed with the requirement, as provided
inMolina, that the Solicitor General issue a certification stating his reasons for his
agreement or opposition to the petition.
5. Pre-trial conference. During the mandatory pre-trial conference, the court and the
parties deal with certain matters, such as stipulation of facts, for the purpose of
expediting the proceedings. The petition may be dismissed if the petitioner fails to
appear during pre-trial. At this stage, the court may also refer the issues to a
mediator who shall assist the parties in reaching an agreement on matters not
prohibited by law (no compromise allowed in civil status of persons, validity of
marriage or of legal separation, grounds for legal separation, jurisdiction of courts,
and future support and legitime). The court may also require a social worker to
conduct a case study and submit a report at least 3 days before the pre-trial
conference, or at any stage of the case whenever necessary.
6. Trial. This is the stage where the ground for annulment is proved and opposed.
The court may order the exclusion from the courtroom of all persons, including
members of the press, who do not have a direct interest in the case.
7. Decision. After the trial proper, the court renders its decision, which is different
from the Decree of annulment. A decision, whether granting or dismissing the
petition, becomes final upon the expiration of 15 days from notice to the parties.
8. Appeal. The aggrieved party or the Solicitor General may appeal from the
decision within 15 days from notice of denial of the motion for reconsideration or new
trial.
9. Liquidation, partition and distribution, custody, support of common children and
delivery of their presumptive legitimes. These are done upon entry of the judgment
granting the petition.
10. Issuance of Decree of annulment. The court issues the Decree after: (i)
registration of the entry of judgment granting the annulment in the Civil Registry
where the marriage was celebrated and in the Civil Registry of the place where the
court is located; (ii) registration of the approved partition and distribution of the
properties of the spouses in the proper Register of Deeds where the real properties
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are located; and (iii) delivery of the children’s presumptive legitimes in cash,
property, or sound securities.
11. Registration of the Decree. The Decree must be registered in the Civil Registry
where the marriage was registered, the Civil Registry of the place where the court is
situated, and in the National Census and Statistics Office
Valerio E. Kalaw vs. Ma. Elena Fernandez (G.R. No.
166357, 14 January 2015)“SC relaxes rules on psychological incapacity as ground to annul marriages,” says
the news title in a popular newspaper. The title naturally got my interest, not because
I am filing a petition for nullity of marriage, but because we are handling petitionsbased on psychological incapacity under under Article 36 of the Family Code. While
the news article does not mention the title of the case, it is clearly abundant that it
refers to the 2015 case ofValerio E. Kalaw vs. Ma. Elena Fernandez (G.R. No.
166357, 14 January 2015). I combed the case to check how the Supreme Court
“relaxed” the rules on petitions for declaration of nullity of marriage based on
psychological incapacity. Unfortunately, I cannot find a confirmation of such
“relaxation” in the rules. To have a fruitful discussion, allow me to humbly point to ten
matters in the case that might be of interest to those who are searching for answers.
1. The rules provided in Molina remains valid
Practitioners refer to the guidelines for the interpretation and application of Article 36
as theMolina Doctrine, considering that the set of guidelines were first compiled in
the 1997 case ofRepublic vs. Court of Appeals and Roridel Olaviano Molina (G.R.
No. 108763). There are eight guidelines, as follows:
(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff.
(2) The root cause of the psychological incapacity must be medically or clinically
identified, alleged in the complaint, sufficiently proven by experts and clearly
explained in the decision.
(3) The incapacity must be proven to be existing at “the time of the celebration” of
the marriage.
(4) Such incapacity must also be shown to be medically or clinically permanent or
incurable.
(5) Such illness must be grave enough to bring about the disability of the party to
assume the essential obligations of marriage.
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(6) The essential marital obligations must be those embraced by Articles 68 up to 71
of the Family Code as regards the husband and wife, as well as Articles 220, 221
and 225 of the same Code in regard to parents and their children.
(7) Interpretations given by the National Appellate Matrimonial Tribunal of the
Catholic Church in the Philippines, while not controlling or decisive, should be given
great respect by our courts.
(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor
General to appear as counsel for the state.
InKalaw, the Supreme Court categorically stated that “we are not suggesting the
abandonment ofMolina in this case.” The set of guidelines inMolina, therefore,
stays. The pronouncement inKalaw that is closest to “relaxation” of the guidelines is
this: “The foregoing guidelines have turned out to be rigid, such that their application
to every instance practically condemned the petitions for declaration of nullity to the
fate of certain rejection.” There is no doubt that theMolina Doctrine is strict, but there
is also no doubt that countless petitions have been granted pursuant to its
guidelines. In other words, there appears to be no “relaxation” of the rules.
2. Expert testimony is decisiveIf there’s anything inKalaw that can be construed as a “relaxation” or departure from
theMolina Doctrine, it’s the rule on expert witnesses. Guideline No. 2
inMolina provides that the “root cause of the psychological incapacity must be
medically or clinically identified, alleged in the complaint, sufficiently proven by
experts and clearly explained in the decision.” However, it has been established in
previous cases that expert testimony is not a requisite in psychological incapacity
cases. In other words, the absence of an expert witness does not automaticallyresult to a denial of the petition. In a number of cases, including the case
ofMendoza vs. Republic (G.R. No. 157649, 12 November 2012), the Supreme Court
had the occasion to state that “the expert opinions of psychologists are not
conditions sine qua non in the granting of petitions for declaration of nullity of
marriage,” although the Court added that “the actual medical examination…was to
be dispensed with only if the totality of evidence presented was enough to support a
finding of his psychological incapacity.”
The requirement of the “totality of evidence,” on the other hand, is not new. It has
been discussed in similar cases prior toKalaw.
Going back to the value of expert testimonies, the Supreme Court inKalaw restated
the rule that “in the task of ascertaining the presence of psychological incapacity as
a ground for the nullity of marriage, the courts, which are concededly not endowed
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with expertise in the field of psychology, must of necessity rely on the opinions of
experts in order to inform themselves on the matter, and thus enable themselves to
arrive at an intelligent and judicious judgment.”
Incidentally, in one of our cases, the judge noted that it is for the court — not the
psychologist — to conclude that one or both parties is/are psychologically
incapacitated. Indeed, the existence of psychological incapacity is a legal
conclusion, which is within the exclusive province of the court, but this does not
preclude the expert witness from expressing a similar “opinion,” pointing to the exact
condition or personality disorder of the spouse/s.
3. The psychologist need not personally examine the incapacitated
spouseThe usual objection raised against the testimony of the expert witness, especially
when the services of the expert witness has been obtained by the petitioner-spouse
and there is a conclusion that the respondent-spouse is psychologically
incapacitated, is the usual inability of the psychologist to examine or interview the
respondent spouse. InKalaw, the Supreme Court reiterated the rule that “the lack of
personal examination and interview of the person diagnosed with personality
disorder…did not per se invalidate the findings of the experts.”The opinion of the expert opinion should not be lightly brushed aside in the presence
of the “totality of evidence” in the case. This is the reason why, in the cases we are
handling, we require the client to present other witnesses to corroborate the client’s
testimony on the facts which constitute the basis for the finding of the personality
disorder and, ultimately, psychological incapacity. While clients initially complain
about the presentation of other witnesses, we make it a point to carefully explain that
this is needed to avoid an outright denial of the petition.
4. Article 36 is patterned after Church doctrines
It has been said that the Philippines is the only country in the whole world that does
not have divorce. This, of course, did not deter the Office of the Solicitor General
(OSG) to make, in the language of the Supreme Court, an “exaggeration”
inMolina that Article 36 is the “most liberal divorce procedure in the world.” InKalaw,
the Supreme Court noted that it was sensitive to the “exaggeration” of the OSG
when it enunciated the “rigid” rules inMolina. “The unintended consequences
ofMolina, however, has taken its toll on people who have to live with deviant
behavior, moral insanity and sociopathic personality anomaly, which, like termites,
consume little by little the very foundation of their families, our basic social
institutions. Far from what was intended by the Court,Molina has become a strait-
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jacket, forcing all sizes to fit into and be bound by it. Wittingly or unwittingly, the
Court, in conveniently applying Molina, has allowed diagnosed sociopaths,
schizophrenics, nymphomaniacs, narcissists and the like, to continuously debase
and pervert the sanctity of marriage. Ironically, the Roman Rota has annulled
marriages on account of the personality disorders of the said individuals.”
Article 36 is patterned after Church rules. As noted inMolina, “Since the purpose of
including such provision in our Family Code is to harmonize our civil laws with the
religious faith of our people, it stands to reason that to achieve such harmonization,
great persuasive weight should be given to decisions of such appellate tribunal.
Ideally — subject to our law on evidence — what is decreed as canonically invalid
should also be decreed civilly void.”
5. Article 36 protects the family
The usual argument against Article 36, providing for psychological incapacity as a
ground to declare the nullity of marriage, is that it weakens the family. On the
contrary, as reiterated by the Supreme Court inKalaw, Article 36 protects the
institution of marriage. According to the Supreme Court, “the fulfillment of the
constitutional mandate for the State to protect marriage as an inviolable social
institution only relates to a valid marriage. No protection can be accorded to amarriage that is null and void ab initio, because such a marriage has no legal
existence.”
“Indeed, Article 36 of the Family Code, in classifying marriages contracted by a
psychologically incapacitated person as a nullity, should be deemed as an
implement of this constitutional protection of marriage. Given the avowed State
interest in promoting marriage as the foundation of the family, which in turn serves
as the foundation of the nation, there is a corresponding interest for the State to
defend against marriages ill-equipped to promote family life. Void ab initio marriages
under Article 36 do not further the initiatives of the State concerning marriage and
family, as they promote wedlock among persons who, for reasons independent of
their will, are not capacitated to understand or comply with the essential obligations
of marriage.”
[Part 1 of 2]
Ademption, or ademption by extinction, i s a common lawdoctrine used in
thelawofwillsto determine what happens when property bequeathed under a will is
no longer in the testator'sestateat the time of the testator's death.[1]
For a devise
(bequest) of a specific item of property (aspecific gift), such property is
considered adeemed , and the gift fails. For example, if a will bequeathed the
testator's car to a specific beneficiary, but the testator owned no car at the time of his
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or her death, the gift would be adeemed and the aforementioned beneficiary would
receive no gift at all.
General bequests or general gifts gifts of cash amounts are never adeemed. !f
the cash in the testator's estate is not sufficient to satisfy the gift, then other assets
in theresiduary estatewill need to be sold to raise the necessary cash."ome property lies in a #gray# area, in which the testator's specific intent must be
determined. For example, where the testator bequeathes #$%% shares of stoc&# in a
company, this may be read as a general bequest (that the estate should purchase
and convey the particular stoc&s to the beneficiary), or it may be read as a specific
bequest, particularly if the testator used a possessive (#my $%% shares#). "uch a gift
is deemed to be a demonstrative gift. "uch demonstrative gifts are deemed to be a
hybrid of both specific and general gifts. !f one were to bequeath #$%% shares of
stoc&,# most states would deem that to be a demonstrative gift. he resultant gift to
the heir receiving #$%% shares,# would be the date of death value of $%% shares of
that particular stoc&.
demption may be waived if the property leaves the estate after the testator has
been declared incompetent. Furthermore, in some cases the beneficiary will be
entitled to the proceeds from the sale of property, or to theinsurancepayout for
property that is lost or destroyed.
o avoid confusion as to what may or may not be adeemed, sometimes the phrase
#if owned by me at my death# is placed into the articles of a will in which property is
being bequeathed. s for the sale of land under an executory contract, traditionalcase lawagrees that
ademption occurs upon the death of the testator and that the proceeds of sale, when
the closing occurs, should not pass to the specific devisee of the property. owever,
the more modern view and the Uniform Probate Code, which has been adopted by
some states, disagrees. hese *urisdictions find that when property sub*ect to
specific devise is placed under contract of sale before the decedent's death, the
proceeds of the sale will pass to the specific devisee.
corre cases
G.R. No. 142403 March 26, 2003
ALEJANDRO GABRIEL and ALFREDO GABRIEL, pe!!oner",
#".
$%O&$E$ %ABLO MABAN'A and E$(OLA$'I(A (OLOBONG, DE)ELO%MEN'
BAN* OF '+E %+ILI%%INE$ I"a-ea Branch/ and ENAIDA 'ANREE$,
re"ponden".
FA('$
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On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as
collateral for a P1,!!! loan" #n 19$!, the% sold the lots to &usana &oriano with the
right to repurchase the propert% within 2 %ears" 'he% failed to do repurchase" #n
19$, the% con(inced petitioner )le*andro +abriel to purchase the lot from &oriano
as a result, DBP had to restructure the loan maing +abriel as the mortgagor" #n
19$2 howe(er, one lot was sold to -enaida 'an./e%es b% the spouses Mabanta who
in turn 0led an inter(ention to the case after not being a part% in the instant case"
)s a result, the petitioners 0led for damages, and speci0c performance which the
trial court ruled in their fa(or holding that the sale between the spouses Mabanta
and 'an./e%es null and (oid" On appeal, the ) modi0ed the trial courts decision
holding that the second sale was indeed (alid"
I$$&E
3hether or not the second sale in 19$2 to 'an./e%es is (alid"
+ELD
)rticle 15 of the i(il ode pro(ides that should immo(able propert% be sold to
di4erent (endees, the ownership shall belong to the 0rst person in good faith to
record it in the registr% of propert%" nfortunatel%, the registration made b% -enaida
'an./e%es of her deed of sale was not in good faith, and for this reason in
accordance with the same )rticle 15, the land shall pertain to the person who in
good faith was 0rst in possession" 'here is no 6uestion that it is the +abriels who
are in possession of the land"
G.R. No. 3432 Ma5 20, 11
RADIO7EAL'+ FINAN(E (OM%AN, pe!!oner,
#".
MAN&ELI'O $. %ALILEO, re"ponden.
FA('$
#n )pril 197!, defendant spouses nri6ue astro and 8erminio /" astro spouse
astro: sold to herein respondent Manuelito Palileo a parcel of unregistered coconut
land in &urigao del ;orte" 'he sale is e(idenced b% a notari<ed Deed of )bsolute
&ale, but the deed was not registered in the /egistr% of Propert% for unregistered
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lands in the pro(ince of &urigao del ;orte" &ince the e=ecution of the deed of sale,
Palileo who was then emplo%ed in >ianga, &urigao del &ur, e=ercised acts of
ownership o(er the land through his mother /afaela Palileo, as administratri= or
o(erseer" Manuelito Palileo has continuousl% paid the real estate ta=es on said land
from 1971 until the present"
#n ;o(ember 197?, the @# of Manila rendered a *udgment was rendered against
defendant nri6ue '" astro to pa% herein petitioner /adiowealth @inance ompan%
/adiowealth:, the sum of P22,A5!"A5 with interest rate of 1? per annum from
;o(ember 2, 1975 until full% paid, and upon the 0nalit% of the *udgment, a writ of
e=ecution was issued" 'he Pro(incial &heri4 Marietta " (iota, through defendant
Deput% Pro(incial &heri4 >eopoldo /isma, le(ied upon and 0nall% sold at public
auction the sub*ect land that defendant nri6ue astro had sold to Palileo in 197!" 'he said Pro(incial &heri4 e=ecuted a certi0cate of sale was b% the in fa(or of
/adiowealth as the onl% bidder, and upon e=piration of the redemption period, she
also e=ecuted a deed of 0nal sale" Both documents were registered with the
/egistr% of Deeds"
>earning of what happened to the land, Palileo 0led an action for reco(er% of the
sub*ect propert%" 'he court a 6uo rendered a decision in fa(or of Palileo, which the
ourt of )ppeals aCrmed"
I$$&E
3ho is the rightful owner of the sub*ect propert%
(O&R' R&LING
'he &upreme ourt liewise aCrmed the appellate courts decision on this case"
'here is no doubt that had the sub*ect propert% been a registered land, this case
would ha(e been decided in fa(or of /adiowealth since it was the compan% that had
its claim 0rst recorded in the /egistr% of Deeds for it is the act of registration that
operates to con(e% and a4ect registered land" 'herefore, a bona0de purchaser of a
registered land at an e=ecution sale ac6uires a good title as against a prior
transferee, if such transfer was unrecorded"
8owe(er, a di4erent set of rules applies in the case at bar which deals with a parcelof unregistered land" nder )ct ;o" AA, registration of instruments a4ecting
unregistered lands is Ewithout pre*udice to a third part% with a better right"E 'he
afore 6uoted phrase has been held b% the &upreme ourt to mean that the mere
registration of a sale in oneFs fa(or does not gi(e him an% right o(er the land if the
(endor was not an%more the owner of the land ha(ing pre(iousl% sold the same to
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somebod% else e(en if the earlier sale was unrecorded" )ppl%ing this principle, the
ourt of )ppeals correctl% held that the e=ecution sale of the unregistered land in
fa(or of petitioner is of no e4ect because the land no longer belonged to the
*udgment debtor as of the time of the said e=ecution sale"
G.R. No. 180409 Fe-r:ar5 2, 2010
RAM&NDO $. DE LEON, %e!!oner,
#".
BENI'A '. ONG. Re"ponden.
Fac"
On March 1!, 199A, /a%mundo &" De >eon petitioner: sold A parcels of land to
Benita '" Ong respondent:" 'he said properties were mortgaged to a 0nancial
institutionG /eal &a(ings H >oan )ssociation #nc" /&>)#:" 'he parties then e=ecuted
a notari<ed deed of absolute sale with assumption of mortgage" )s indicated in the
deed of mortgage, the parties stipulated that the petitioner de leon: shall e=ecute a
deed of assumption of mortgage in fa(or of Ong respondent: after full pa%ment of
the P15,!!!"!! 'he% also agreed that the respondent Ong: shall assume the
mortgage" 'he respondent then subse6uentl% ga(e petitioner P15,!!!"!! as
partial pa%ment" On the other hand, de leon handed the e%s to Ong and de leon
wrote a letter to inform /&>)# that the mortgage will be assumed b% Ong"
'hereafter, the respondent too repairs and made impro(ements in the properties"
&ubse6uentl%, respondent learned that the same properties were sold to a certain
Iiloria after March 1!, 199A and changed the locs, rendering the e%s gi(en to her
useless" /espondent proceeded to /&>)# but she was informed that the mortgage
has been full% paid and that the titles ha(e been gi(en to the said person"
/espondent then 0led a complaint for speci0c performance and declaration of
nullit% of the second sale and damages" 'he petitioner contended that respondent
does not ha(e a cause of action against him because the sale was sub*ect to a
condition which re6uires the appro(al of /&>)# of the mortgage" Petitioner reiterated
that the% onl% entered into a contract to sell" 'he /' dismissed the case" On
appeal, the ) upheld the sale to respondent and nulli0ed the sale to Iiloria"
Petitioner mo(ed for reconsideration to the &"
I"":e
3hether the parties entered into a contract of sale or a contract to sell
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+ed
#n a contract of sale, the seller con(e%s ownership of the propert% to the bu%er upon
the perfection of the contract" 'he non.pa%ment of the price is a negati(e resolutor%
condition" ontract to sell is sub*ect to a positi(e suspensi(e condition" 'he bu%er
does not ac6uire ownership of the propert% until he full% pa%s the purchase price" #n
the present case, the deed e=ecuted b% the parties did not show that the owner
intends to reser(e ownership of the properties" 'he terms and conditions a4ected
onl% the manner of pa%ment and not the immediate transfer of ownership" #t was
clear that the owner intended a sale because he un6uali0edl% deli(ered and
transferred ownership of the properties to the respondent"
(RB #". (A and +EIR$ OF DELA (R&
G.R. No. 132161
Jan:ar5 18, 2009
FA('$ 'he Madrid brothers were the registered owners of >ot ) situated in
#sabela"
&aid lot was subdi(ided into se(eral lots" /i<al Madrid sold part of his share
identi0ed lot ).7 to +amiao and Da%ag b% (irtue of a Deed of Sale, to which his
brothers o4ered no ob*ection as e(idenced b% their Joint Adavit "'he deed of sale
was not registered with the O/D of #sabela" 8owe(er, +amiao and Da%ag declared
the propert% in their names on a 'a= Declaration" +amiao and Da%ag sold the
sub*ect southern half of lot to 'eodoro dela ru<, and the northern half to
8ernande<" 'hereupon, 'eodoro dela ru< and 8ernande< too possession of and
culti(ated the portions of the propert% respecti(el% sold to them >ater /estituto
8ernande< donated the northern half to his daughter" 'he children of 'eodoro dela
ru< continued possession of the southern half after their fathers death": #n a Deed
of Sale the Madrid brothers con(e%ed all their rights and interests o(er lot ).7 to
Mar6ue< which the former con0rmed" 'he deed of sale was registered with the O/D
of #sabela" &ubse6uentl%, Mar6ue< subdi(ided lot ).7 into eight $: lots" On the
same date, Mar6ue< and his spouse, Mercedita Mariana, mortgaged lots to the
onsolidated /ural Ban, #nc" of aga%an Ialle% hereafter, /B: to secure a loan"
'hese deeds of real estate mortgage were registered with the O/D" )s Mar6ue<
defaulted in the pa%ment of his loan, /B caused the foreclosure of the mortgages
in its fa(or and the lots were sold to it as the highest bidder" 'he 8eirs.nowrespondents 0led a case for recon(e%ance and damages for the southern portion of
>ot ;o" 7!A?.) hereafter, the sub*ect propert%: against Mar6ue< and /B" 'he /'
handed down a decision in fa(or of Mar6ue<" 'he 8eirs interposed an appeal with
the ), which upheld the claim of the 8eirs" 8ence, the instant /B petition"
I$$&E 3O; )rt" 15 of the i(il ode double sale: applicable in this case
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+ELD ;O"
'he petition is denied, and the decision as modi0ed is aCrmed" >ie the lower
court, the appellate court resol(ed the present contro(ers% b% appl%ing the rule on
double sale pro(ided in )rticle 15 of the i(il ode" 'he%, howe(er, arri(ed at
di4erent conclusions" 'he /' made /B and the other defendants win, while theourt of )ppeals decided the case in fa(or of the 8eirs"
)rticle 15 of the i(il ode reads, thusJ
)/'" 15" #f the same thing should ha(e been sold to di4erent (endees, the
ownership shall be transferred to the person who ma% ha(e 0rst taen possession
thereof in good faith, if it should be mo(able propert%" &hould it be immo(able
propert%, the ownership shall belong to the person ac6uiring it who in good faith
0rst recorded it in the /egistr% of Propert%"
&hould there be no inscription, the ownership shall pertain to the person who in
good faith was 0rst in possessionG and, in the absence thereof, to the person who
presents the oldest title, pro(ided there is good faith" 'he pro(ision is not applicable
in the present case" #t contemplates a case of double or multiple sales b% a single
(endor" #t cannot be in(oed where the two di4erent contracts of sale are made b%
two di4erent persons, one of them not being the owner of the propert% sold" )nd
e(en if the sale was made b% the same person, if the second sale was made when
such person was no longer the owner of the propert%, because it had been ac6uired
b% the 0rst purchaser in full dominion, the second purchaser cannot ac6uire an%
right" #n the case at bar, the sub*ect propert% was not transferred to se(eral
purchasers b% a single (endor" #n the 0rst deed of sale, the (endors were +amiao
and Da%ag whose right to the sub*ect propert% originated from their ac6uisitionthereof from /i<al Madrid with the conformit% of all the other Madrid brothers" On
the other hand, the (endors in the other or later deed were the Madrid brothers but
at that time the% were no longer the owners since the% had long before disposed of
the propert% in fa(or of +amiao and Da%ag"
#n a situation where not all the re6uisites are present which would warrant the
application of )rt" 15, the principle of prior tempore, potior jure or simpl% Khe
who is 0rst in time is preferred in right, should appl%"L 'he onl% essential re6uisite of
this rule is priorit% in timeG in other words, the onl% one who can in(oe this is the
0rst (endee" ndisputedl%, he is a purchaser in good faith because at the time he
bought the real propert%, there was still no sale to a second (endee" #n the instantcase, the sale to the 8eirs b% +amiao and Da%ag, who 0rst bought it from /i<al
Madrid, was anterior to the sale b% the Madrid brothers to Mar6ue<" 'he 8eirs also
had possessed the sub*ect propert% 0rst in time" 'hus, appl%ing the principle, the
8eirs, without a scintilla of doubt, ha(e a superior right to the sub*ect propert%"
Moreo(er, it is an established principle that no one can gi(e what one does not
ha(enemo dat quod non habet " )ccordingl%, one can sell onl% what one owns or is
authori<ed to sell, and the bu%er can ac6uire no more than what the seller can
transfer legall%"5A #n this case, since the Madrid brothers were no longer the owners
of the sub*ect propert% at the time of the sale to Mar6ue<, the latter did not ac6uire
an% right to it"
Balatbat (" )
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Fac"
parcel of land was acquired by plaintiff urelio +oque and aria esina during their con*ugal
union. aria died on ugust -, /011. 2n 3une /$, /044, urelio filed a case for partition. he
trial court held that urelio is entitled to the 5 portion at his share in the con*ugal property, and
/6$ of the other half which formed part of aria7s estate, divided equally among him at his 8
children. he decision having become final and executory, the +egister of 9eeds of anila
issued a transfer certificate of title on 2ctober $, /040 according to the ruling of the court. 2n
pril /, /0%, urelio sold his 16/% share to spouses urora ua:on+epuyan and 3ose
+epuyan, as evidenced by a deed of absolute sale. 2n 3une -/, /0%, urora caused the
annotation of her affidavit of adverse claim. 2n ugust -%, /0%, urelio filed a complaint for
rescission of contract grounded on the buyers7 failure to pay the balance of the purchase price.
2n February 8, /0-, another deed of absolute sale was executed between urelio and his
children, and herein petitioner ;lara <alatbat, involving the entire lot. <alatbat filed a motion for
the issuance of writ of possession, which was granted by the court on "eptember -%, /0-,
sub*ect to valid rights and interests of third persons. <alatbat filed a motion to intervene in the
rescission case, but did not file her complaint in intervention. he court ruled that the sale
between urelio and urora is valid.
Issues:(/) =hether the alleged sale to private respondents was merely executory(-) =hether
there was double sale(>) =hether petitioner is a buyer in good faith and for value
Held:(/) ;ontrary to petitioner's contention that the sale dated pril /, /0% in favor of private
respondents +epuyan was merely executory for the reason that there was no delivery of the
sub*ect property and that consideration6price was not fully paid, we find the sale as
consummated, hence, valid and enforceable. he ;ourt dismissed vendor's urelio +oque
complaint for rescission of the deed of sale and declared that the "ale dated pril /, /0%, as
valid and enforceable. ?o appeal having been made, the decision became final and
executory.he execution of the public instrument, without actual delivery of the thing, transfers
the ownership from the vendor to the vendee, who may thereafter exercise the rights of an
owner over the same. !n the instant case, vendor +oque delivered the owner's certificate of title
to herein private respondent. he provision of rticle />$ on the necessity of a publicdocument is only for convenience, not for validity or enforceability. !t is not a requirement for the
validity of a contract of sale of a parcel of land that this be embodied in a public instrument.
contract of sale being consensual, it is perfected by the mere consent of the parties. 9elivery of
the thing bought or payment of the price is not necessary for the perfection of the contract@ and
failure of the vendee to pay the price after the execution of the contract does not ma&e the sale
null and void for lac& of consideration but results at most in default on the part of the vendee, for
which the vendor may exercise his legal remedies.
(-) rticle /$88 of the ;ivil ;ode provides that in case of double sale of an immovable property,
ownership shall be transferred (/) to the person acquiring it who in good faith first recorded it in
the +egistry of Aroperty@ (-) in default thereof, to the person who in good faith was first in
possession@ and (>) in default thereof, to the person who presents the oldest title, provided there
is good faith. !n the case at bar, vendor urelio +oque sold 16/% portion of his share to private
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respondents +epuyan on pril /, /0%. "ubsequently, the same lot was sold again by vendor
urelio +oque (16/%) and his children (86/%), represented by the ;ler& of ;ourt pursuant to
"ection /%, +ule >0 of the +ules of ;ourt, on February 8, /0-. Bndoubtedly, this is a case of
double sale contemplated under rticle /$88 of the ?ew ;ivil ;ode. Cvidently, private
respondents +epuyan's caused the annotation of an adverse claim on the title of the sub*ect
property on 3uly -/, /0%. he annotation of the adverse claim in the +egistry of Aroperty is
sufficient compliance as mandated by law and serves notice to the whole world. 2n the other
hand, petitioner filed a notice of lis pendens only on February -, /0-. ccordingly, private
respondents who first caused the annotation of the adverse claim in good faith shall have a
better right over herein petitioner. s between two purchasers, the one who has 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. Further, even in default of the first
registrant or first in possession, private respondents have presented the oldest title. hus,
private respondents who acquired the sub*ect property in good faith and for valuable
consideration established a superior right as against the petitioner.
(>) Aetitioner cannot be considered as a buyer in good faith. !f petitioner did investigate before
buying the land on February 8, /0-, she should have &nown that there was a pending case
and an annotation of adverse claim was made in the title of the property before the +egister of
9eeds and she could have discovered that the sub*ect property was already sold to the private
respondents. !t is incumbent upon the vendee of the property to as& for the delivery of the
owner's duplicate copy of the title from the vendor. 2ne who purchases real estate with
&nowledge of a defect or lac& of title in his vendor cannot claim that he has acquired title thereto
in good faith as against the true owner of the land or of an interest therein@ and the same rule
must be applied to one who has &nowledge of facts which should have put him upon such
inquiry and investigation as might be necessary to acquaint him with the defects in the title of his
vendor. Good faith, or the want of it is not a visible, tangible fact that can be seen or touched,
but rather a state or condition of mind which can only be *udged of by actual or fancied to&ens or
signs.
ANAMA )$. (O&R' OF A%%EAL$
+/" ;o" 12$?!9, Nanuar% 29, 2!!
Fac"
'he propert% was pre(iousl% owned b% Douglas )namas parents, whomortgaged it to Philippine &a(ings Ban and later was foreclosed" Douglas and theP&Ban entered into an agreement denominated as a ontract to Bu% whereb% theban agreed to sell to Douglas the said land with all the impro(ements thereon" 'heontract to Bu% pro(ides that )nama shall purchase the propert% of a certainamount and shall pa% to the P&BanG it also pro(ides that )nama shall appl% withthe ban for a loan, the proceeds of which answer for the balance of the purchasepriceG should the petitioner fail to compl% with an% of the terms of contract, all
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amounts paid are forfeited in fa(or of P&Ban, the latter ha(ing the option either todemand full pa%ment of total price or to rescind the contract" )nama was able topa% the 0rst and second installmentsG howe(er, he failed to pa% the thirdinstallment when it became due" 'here were se(eral transactions between them tosettle the amount due" But later, the ban e=ecuted an )Cda(it of ancellationrescinding the contract, and forfeited the pa%ments made b% )nama which were
applied as rentals of the use of the propert%" )nama was then ad(ised to (acate thepropert% despite his opposition to the rescission of the ontract to Bu%" 'he bansold the propert% to spouses o, in whose fa(or '' was issued" )nama then 0led acase for Declaration of ;ullit% of Deed of &ale, ancellation of '',and &peci0cPerformance with Damages"
I"":e
3hether the rescission of the ontract to Bu% was (alid"
+ed
&ince )nama failed to pa% the third installment, P&Ban was entitled to
rescind the ontract to Bu%" 'he contract pro(ides the Ban two options in the e(ent
that petitioner fails to pa% an% of the installments" 'his was either 1: to rescind the
contract outright and forfeit all amounts paid b% the petitioner, or 2: to demand the
satisfaction of the contract and insist on the full pa%ment of the total price" )fter
petitioner repeatedl% failed to pa% the third installment, the Ban chose to e=ercise
the 0rst option"
'he ontract to Bu% is actuall% a contract to sell whereb% the (endor reser(es
ownership of the propert% and is not to pass until full pa%ment" &uch pa%ment is a
positi(e suspensi(e condition, the failure of which is not a breach but simpl% an
e(ent that pre(ents the obligation of the (endor to con(e% title from ac6uiring
binding force" &ince ownership of the sub*ect propert% was not pass to petitioner
until full pa%ment of the purchase price, his failure to pa% on the date stipulated, or
in the e=tension granted, pre(ented the obligation for the Ban to pass title of the
propert% to )nama" 'he ban could (alidl% sell the propert% to the spouses o, the
right of the ban to sell the propert% being une6ui(ocal"
corre's cases
I$AIA$ F. FABRIGA$ AND MAR(ELINA R. FABRIGA$
)$. $AN FRAN(I$(O DEL MON'E, IN(.
+"/" ;o" 152A?, ;o(ember 25, 2!!5
@)'&J
&pouses @abrigaspetitioner: and respondent &an francisco Del Monte, #nc"
Del Monte: entered into an agreement, denominated as ontract to &ell
;o" 2$2.I, whereb% the latter agreed to sell to &pouses @abrigas a parcel
of residential land" 'he said lot was worth P1!9,2!!"!! and it was
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registered in the name of respondent Del Monte" 'he agreement
stipulated that &pouses @abrigas shall pa% PA!,!!!"!! as downpa%ment
and the balance within ten %ears in monthl% successi(e installments of
P1,2$5"?9" )fter pa%ing PA!,!!!"!!, &pouses @abrigas too possession of
the propert% but failed to mae an% installment pa%ments on the balanceof the purchase price" Despite the demand letter made b% Del Monte and
the grace period gi(en still the said &pouses did not compl% with their
obligations"
On Nanuar% 21, 19$5, petitioner Marcelina and Del Monte entered into
another agreement denominated as ontract to &ell ;o" 291.I, co(ering
the same propert% but under restructed terms of pa%ment" nder the
second contract, the parties agreed on a new purchase price of P1A1,?2"5$, the amount of P2?,A2$"52 as downpa%ment and the balance
to be paid in monthl% installments of P2,9$"?! each" )fter the said deal,
the petitioner made some delin6uent installments pa%ing less than the
stated amount, to which Del Monte made a demand letter to the
petitioners" )nd this time the% ordered the cancellation of the ontract to
&ell ;o" 291.I
#&&J
3hether or not the ontract to &ell ;o" 291.I was (alid"
8>DJ
'he ourt 6uotes with appro(al the following factual obser(ations of the
trial court, which cannot be disturbed in this case, to witJ'he ourt notes
that defendant, Marcelina @abrigas, although she had to sign contract ;o"291.I, to a(oid forfeiture of her downpa%ment, and her other monthl%
amorti<ations, was entirel% free to refuse to accept the new contract"
'here was no clear case of intimidation or threat on the part of plainti4 in
o4ering the new contract to her" )t most, since she was of suCcient
intelligence to discern the agreement she is entering into, her signing
of ontract ;o" 291.I is taen to be (alid and binding" 'he fact that she
has paid monthl% amorti<ations subse6uent to the e=ecution
of ontract to &ell ;o" 291.I, is an indication that she had recogni<ed
the (alidit% of such contract" " " "
#n sum, Contract to Sell No. 2491- is (alid and binding" 'here is nothing
to pre(ent respondent Del Monte from enforcing its contractual
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stipulations and pursuing the proper court action to hold petitioners liable
for their breach thereof"
MRNA RAMO$ )$. $&$ANA $. $ARAO AND JONA$ RAMO$+"/" ;O"1975?, @ebruar% 11, 2!!5
@)'&J
On @ebruar% 21, 1991, &pouses Nonas /amos and M%rna /amos e=ecuted
a contract o(er their con*ugal house and lot in fa(or of &usana &" &araofor and in consideration of P1,A1!,A!" ntitled KDD O@ &)>
;D/ P)'O D /'/O,L the contract,inter alia, granted the /amos
spouses the option to repurchase the propert% within si= months from
@ebruar% 21, 1991, for P1,A1!,A! plus an interest of "5 percent a
month" #t was further agreed that should the spouses fail to pa% the
monthl% interest or to e=ercise the right to repurchase within the
stipulated period, the con(e%ance would be deemed an absolute sale"On
Nul% A!, 1991, M%rna /amos tendered to &arao the amount of
P1,?AA,!A"2! in the form of two managers checs, which the latterrefused to accept for being allegedl% insuCcient"
#&&J 3hether or not the sub*ect Deed of &ale under Pacto de /etro was,
and is in realit% and under the law an e6uitable mortgage"
8>DJ 'he pi(otal issue in the instant case is whether the parties
intended the contract to be a bona 0de !acto de retro sale or an e6uitable
mortgage" #n a !acto de retro, ownership of the propert% sold is
immediatel% transferred to the (endee a retro, sub*ect onl% to the
repurchase b% the (endor a retro within the stipulated period" 'he
(endor a retro"# failure to e=ercise the right of repurchase within the
agreed time (ests upon the (endee a retro, b% operation of law, absolute
title to the propert%" &uch title is not impaired e(en if the
(endee a retro fails to consolidate title under )rticle 1?!7 of the i(il
ode" On the other hand, an e6uitable mortgage is a contract that
..although lacing the formalit%, the form or words, or other re6uisites
demanded b% a statute .. ne(ertheless re(eals the intention of the parties
to burden a piece or pieces of real propert% as securit% for a debt" 'he
essential re6uisites of such a contract are as followsJ 1: the parties enter
into what appears to be a contract of sale, but 2: their intention is to
secure an e=isting debt b% wa% of a mortgage" 'he nonpa%ment of the
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debt when due gi(es the mortgagee the right to foreclose the mortgage,
sell the propert%, and appl% the proceeds of the sale to the satisfaction of
the loan obligation" 'here is no single conclusi(e test to determine
whether a deed absolute on its face is reall% a simple loan
accommodation secured b% a mortgage" 8owe(er, the law enumeratesse(eral instances that show when a contract is presumed to be an
e6uitable mortgage, as followsJ
)rticle 1?!2" 'he contract shall be presumed to be an e6uitable
mortgage, in an% of the following casesJ
1: 3hen the price of a sale with right to repurchase is unusuall%
inade6uateG2: 3hen the (endor remains in possession as lessee or
otherwiseGA: 3hen upon or after the e=piration of the right to repurchase
another instrument e=tending the period of redemption or granting a new
period is e=ecutedG: 3hen the purchaser retains for himself a part of thepurchase priceG5: 3hen the (endor binds himself to pa% the ta=es on the
thing soldG?: #n an% other case where it ma% be fairl% inferred that the
real intention of the parties is that the transaction shall secure the
pa%ment of a debt or the performance of an% other obligation"
RIALINO, $&B$'I'&'ED B +I$ +EIR$, JO$EFINA, ROLANDO AND
FERNANDO, ERNE$'O, LEONORA, BIBIANO, JR., LIBRADO AND
ENRI;&E'A, ALL $&RNAMED OE$MER )$. %ARAI$O DE)ELO%MEN'
(OR%ORA'ION
+"/" ;O" 1579A, @ebruar% !5, 2!!7
@)'&J
Petitioners /i<alino, rnesto, >eonora, Bibiano, Nr", >ibrado, and nri6uita,
all surnamed Oesmer, together with )dolfo Oesmer and Nesus Oesmer,
are brothers and sisters, and the co.owners of undi(ided shares of two
parcel of land" /espondent Paraiso De(elopment orporation bought from
petitioners their respecti(e share of the lot e=cept the )dolfo and Nesus
share" )fter the said meeting, a ontract to &ell was created between the
parties, on which the petitioners aCrming their signatures in the said
contract"
'hen the petitioners withdrew from the said contract and as for the
rescission to which the% allege that the% ne(er sign the contract, theagent has no authorit% from the petitioners, that said petitioner was
illiterate to sign the contract, etc"
#&&J
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3hether or not there was a perfected contract between petitioners and
respondents"
8>DJ
#t is well.settled that contracts are perfected b% mere consent, upon the
acceptance b% the o4eree of the o4er made b% the o4eror" @rom that
moment, the parties are bound not onl% to the ful0llment of what has
been e=pressl% stipulated but also to all the conse6uences which,
according to their nature, ma% be in eeping with good faith, usage and
law" 'o produce a contract, the acceptance must not 6ualif% the terms of
the o4er" 8owe(er, the acceptance ma% be e=press or implied" @or
a contract to arise, the acceptance must be made nown to the o4eror"
)ccordingl%, the acceptance can be withdrawn or re(oed before it is
made nown to the o4eror" #n the case at bar, the ontract to &ell was
perfected when the petitioners consented to the sale to the respondent of
their shares in the sub*ect parcels of land b% aC=ing their signatures on
the said contract" &uch signatures show their acceptance of what has
been stipulated in the ontract to &ell and such acceptance was made
nown to respondent corporation when the duplicate cop% of
the ontract to &ell was returned to the latter bearing petitionersF
signatures"
(ARLO$ B. DE G&MAN )$. 'OO'A (&BAO, IN(.
+"/" ;O" 11$!, ;o(ember 29, 2!!?
@)'&J
On ;o(ember 27, 1997, petitioner purchased from respondent a brand
new white 'o%ota 8i.>u= 2" && double cab motor (ehicle, 199? model, in
the amount of P5!$,!!!" Petitioner made a down pa%ment of P152,!!,
lea(ing a balance of PA55,?!! which was pa%able in A? months with 5
interest" 'he (ehicle was deli(ered to petitioner two da%s later" On
October 1$, 199$, petitioner demanded the replacement of the engine of
the (ehicle because it de(eloped a crac after tra(ersing Marcos 8ighwa%
during a hea(% rain" Petitioner asserted that respondent should replace
the engine with a new one based on an implied warrant%" /espondent
countered that the alleged damage on the engine was not co(ered b% a
warrant%"
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#&&J
3hether or not there was an implied warrant%"
@)'&J
nder )rticle 1599 of the i(il ode, once an e=press warrant% is
breached, the bu%er can accept or eep the goods and maintain an action
against the seller for damages" #n the absence of an e=isting e=press
warrant% on the part of the respondent, as in this case, the allegations in
petitionerFs complaint for damages were clearl% anchored on the
enforcement of an implied warrant% against hidden defects, i.e., that the
engine of the (ehicle which respondent had sold to him was not defecti(e"
B% 0ling this case, petitioner wants to hold respondent responsible for
breach of implied warrant% for ha(ing sold a (ehicle with defecti(e
engine" &uch being the case, petitioner should ha(e e=ercised this right
within si= months from the deli(er% of the thing sold" 7 &ince petitioner
0led the complaint on )pril 2!, 1999, or more than nineteen months
counted from ;o(ember 29, 1997 the date of the deli(er% of the motor
(ehicle:, his cause of action had become time.barred"
Petitioner contends that the sub*ect motor (ehicle comes within the
conte=t of /epublic )ct ;o" 7A9" 'hus, petitioner relies on )rticle ?$ f:
2: in relation to )rticle 1?9 of /epublic )ct ;o" 7A9" )rticle 6: of thesaid law de0nes Econsumer products and ser(icesE as goods, ser(ices and
credits, debts or obligations which are primaril% for personal, famil%,
household or agricultural purposes, which shall include, but not limited to,
food, drugs, cosmetics, and de(ices" 'he following pro(isions of /epublic
)ct ;o" 7A9 stateJ )rt" ?7" A!!licable $a% on &arrantie#. Q 'he
pro(isions of the i(il ode on conditions and warranties shall go(ern all
contracts of sale with conditions and warranties" )rt" ?$" Additional
'rovi#ion# on &arrantie#. Q #n addition to the i(il ode pro(isions on
sale with warranties, the following pro(isions shall go(ern the sale of consumer products with warrant%Je: Duration of warrant%" 'he seller and
the consumer ma% stipulate the period within which the e=press warrant%
shall be enforceable" #f the implied warrant% on merchantabilit%
accompanies an e=press warrant%, both will be of e6ual duration")n%
other implied warrant% shall endure not less than si=t% ?!: da%s nor more
than one 1: %ear following the sale of new consumer products" f: Breach
of warranties"
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NA'ALIA (AR%ENA O%&LEN(IA )$. (O&R' OF A%%EAL$, ALADIN
$IM&NDA( AND MIG&EL OLI)AN
+"/" ;o" 125$A5, Nul% A!, 199$
@)'&J
;atalie arpena Opulenciapetitioner: e=ecuted a contract to sell in fa(or
of the respondents namel% )ladin &imundac and Miguel Oli(en a lot" &aid
respondents had alread% paid petitioner a downpa%ment worth
PA!!,!!!"!!" )nd said respondents brought an action for speci0c
perfrormance to the petitioner" 8owe(er, she put forward the following
aCrmati(e defensesJ that the propert% sub*ect of the contract formed part
of the state of Demetrio arpena petitioners father:, in respect of which a petition for probate was 0led with the /egional 'rial ourtG that at
the time the contract was e=ecuted, the parties were aware of the
pendenc% of the probate proceedingG that the contract to sell was not
appro(ed b% the probate courtG that reali<ing the nullit% of the contract
petitioner had o4ered to return the downpa%ment recei(ed from pri(ate
respondents, but the latter refused to accept it"
#&&J
3hether or not the ontract to &ell e=ecuted b% the petitioner and pri(ate
respondents without the re6uisite probate court appro(al is (alid"
@)'&J
8ereditar% rights are (ested in the heir or heirs from the moment of the
decedents death" Petitioner, therefore, became the owner of herhereditar% share the moment her father died" 'hus, the lac of *udicial
appro(al does not in(alidate the ontract to &ell, because the petitioner
has the substanti(e right to sell the whole or a part of her share in the
estate of her late father" nder the old i(il ode K)rticle ! of the i(il
ode pro(ides that Rthe possession of hereditar% propert% is deemed to be
transmitted to the heir without interruption from the instant of the death
of the decedent, in case the inheritance be accepted" )nd Manresa with
reason states that upon the death of a person, each of his heirs Rbecomes
the undi(ided owner of the whole estate left with respect to the part orportion which might be ad*udicated to him, a communit% of ownership
being thus formed among the coowners of the estate while it remains
undi(ided" === )nd according to article A99 of the i(il ode, e(er% part
owner ma% assign or mortgage his part in the common propert%, and the
e4ect of such assignment or mortgage shall be limited to the portion
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which ma% be allotted him in the partition upon the dissolution of the
communit%"
8ence, where some of the heirs, without the concurrence of the others,sold a propert% left b% their deceased father, this ourt, speaing thru its
then hief Nustice a%etano )rellano, said that the sale was (alid, but that
the e4ect thereof was limited to the share which ma% be allotted to the
(endors upon the partition of the estate"L
cases for reading
G.R. No. 196438 March 1, 2004
NA'IONAL +O&$ING A&'+ORI',
#".
GRA(E BA%'I$' (+&R(+ and he (O&R' OF A%%EAL$,
Fac" On Nune 1A, 19$?, respondent +race Baptist hurch hereinafter,
the hurch: wrote a letter to petitioner ;ational 8ousing )uthorit% ;8):,
manifesting its interest in ac6uiring >ots and 17 of the +eneral Mariano)l(are< /esettlement Pro*ect in a(ite" #n its letter.repl% dated Nul% 9,
19$?, petitioner informed respondentJ #n reference to %our re6uest letter
dated 1A Nune 19$?, regarding %our application for >ots and 17, Bloc .
A.>, we are glad to inform %ou that %our re6uest was granted and %ou
ma% now (isit our Pro*ect OCce at +eneral Mariano )l(are< for processing
of %our application to purchase said lots" On February 22, 1991, the NHA’s
Board of Directors passed Resolution No. 2126, approving the sale of the subject
lots to respondent Church at the price of P700.00 per square meter, or a total price
of P430,500.00. The Church was duly informed of this Resolution through a letter
sent by the NHA.On )pril $, 1991, the hurch tendered to the ;8) a
managers chec in the amount of P55,A5!"!!, purportedl% in full
pa%ment of the sub*ect properties" 'he hurch insisted that this was the
price 6uoted to them b% the ;8) @ield OCce, as shown b% an unsigned
piece of paper with a handwritten computation scribbled
thereon"Petitioner ;8) returned the chec, stating that the amount was
insuCcient considering that the price of the properties ha(e changed" 'he
hurch made se(eral demands on the ;8) to accept their tender of pa%ment, but the latter refused" 'hus, the hurch instituted a complaint
for speci0c performance and damages against the ;8) with the /egional
'rial ourt of Sue<on it%"
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I"":e an the ;8) be compelled to sell the sub*ect lots to +race Baptist
hurch in the absence of an% perfected contract of sale between the
parties
R:!n< ;o" 'he contract has not been perfected"#n the case at bar, the
o4er of the ;8) to sell the sub*ect propert%, as embodied in /esolution
;o" 212?, was similarl% not accepted b% the respondent" 'hus, the alleged
contract in(ol(ed in this case should be more accuratel% denominated
as ine(i#tent " 'here being no concurrence of the o4er and acceptance, it
did not pass the stage of generation to the point of perfection" )s such, it
is without force and e4ect from the (er% beginning or from its incipienc%,
as if it had ne(er been entered into, and hence, cannot be (alidated
either b% lapse of time or rati0cation" 6uit% can not gi(e (alidit% to a (oid
contract, and this rule should appl% with e6ual force to ine=istentcontracts" 3e note from the records, howe(er, that the hurch, despite
nowledge that its intended contract of sale with the ;8) had not been
perfected, proceeded to introduce impro(ements on the disputed land" On
the other hand, the ;8) nowingl% granted the hurch temporar% use of
the sub*ect properties and did not pre(ent the hurch from maing
impro(ements thereon" 'hus, the hurch and the ;8), who both acted in
bad faith, shall be treated as if the% were both in good faith" #n this
connection, )rticle $ of the i(il ode pro(idesJ'he owner of the land
on which an%thing has been built, sown or planted in good faith, shall
ha(e the right to appropriate as his own the wors, sowing or planting,
after pa%ment of the indemnit% pro(ided for in articles 5? and 5$, or to
oblige the one who built or planted to pa% the price of the land, and the
one who sowed, the proper rent" 8owe(er, the builder or planter cannot
be obliged to bu% the land and if its (alue is considerabl% more than that
of the building or trees" #n such case, he shall pa% reasonable rent, if the
owner of the land does not choose to appropriate the building or trees
after proper indemnit%" 'he parties shall agree upon the terms of the
lease and in case of disagreement, the court shall 0= the terms thereof"
G.R. No. 19119 Fe-r:ar5 23, 2009
$%O&$E$ J&AN N&G&ID AND ERLINDA '. N&G&ID,
#".
+ON. (O&R' OF A%%EAL$ AND %EDRO %. %E($ON
Fac"J Pedro P" Pecson owned a commercial lot located at 27 Tamias
/oad, Sue<on it%, on which he built a four.door two.store% apartment
building" @or failure to pa% realt% ta=es, the lot was sold at public auction
b% the it% 'reasurer of Sue<on it% to Mamerto ;epomuceno, who in
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turn sold it for P1!A,!!! to the spouses Nuan and rlinda ;uguid"Pecson
challenged the (alidit% of the auction sale before the /' of Sue<on it% "
#n its Decision, dated @ebruar% $, 19$9, the /' upheld the spouses title
but declared that the four.door two.store% apartment building was not
included in the auction sale" 'his was aCrmed in toto b% the ourt of )ppeals and thereafter b% this ourt, in its Decision dated Ma% 25, 199A,
in +"/" ;o" 1!5A?! entitled Pecson (" ourt of )ppeals"
On Nune 2A, 199A, b% (irtue of the ntr% of Nudgment of the aforesaid
decision in +"/" ;o" 1!5A?!, the ;uguids became the uncontested owners
of the 25?.s6uare meter commercial lot"
)s a result, the ;uguid spouses mo(ed for deli(er% of possession of the
lot and the apartment building"
#n the same order the /' also directed Pecson to pa% the same amount
of monthl% rentals to the ;uguids as paid b% the tenants occup%ing the
apartment units or P21,!!! per month from Nune 2A, 199A, and allowed
the o4set of the amount of P5A,!!! due from the ;uguids against the
amount of rents collected b% Pecson from Nune 2A, 199A to &eptember 2A,
199A from the tenants of the apartment"
Pecson dul% mo(ed for reconsideration, but on ;o(ember $, 199A, the
/' issued a 3rit of Possession, directing the deput% sheri4 to put thespouses ;uguid in possession of the sub*ect propert% with all the
impro(ements thereon and to e*ect all the occupants therein"
I"":e 3U;ot the ;uguids should reimburse Pecson for the bene0ts
deri(ed from the apartment building"
R:!n<J Ves" #t is not disputed that the construction of the four.door two.
store% apartment, sub*ect of this dispute, was undertaen at the timewhen Pecson was still the owner of the lot" 3hen the ;uguids became the
uncontested owner of the lot on Nune 2A, 199A, b% (irtue of entr% of
*udgment of the ourts decision, dated Ma% 25, 199A, in +"/" ;o" 1!5A?!,
the apartment building was alread% in e=istence and occupied b% tenants"
#n its decision dated Ma% 2?, 1995 in +"/" ;o" 115$1, the ourt declared
the rights and obligations of the litigants in accordance with )rticles $
and 5? of the i(il ode" 'hese pro(isions of the ode are directl%
applicable to the instant case"
nder )rticle $, the landowner is gi(en the option, either to
appropriate the impro(ement as his own upon pa%ment of the proper
amount of indemnit% or to sell the land to the possessor in good faith"
/elatedl%, )rticle 5? pro(ides that a builder in good faith is entitled to
full reimbursement for all the necessar% and useful e=penses incurredG it
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also gi(es him right of retention until full reimbursement is made" 3hile
the law aims to concentrate in one person the ownership of the land and
the impro(ements thereon in (iew of the impracticabilit% of creating a
state of forced co.ownership, it guards against un*ust enrichment insofar
as the good.faith builders impro(ements are concerned" 'he right of retention is considered as one of the measures de(ised b% the law for the
protection of builders in good faith" #ts ob*ect is to guarantee full and
prompt reimbursement as it permits the actual possessor to remain in
possession while he has not been reimbursed b% the person who
defeated him in the case for possession of the propert%: for those
necessar% e=penses and useful impro(ements made b% him on the thing
possessed" )ccordingl%, a builder in good faith cannot be compelled to
pa% rentals during the period of retention nor be disturbed in his
possession b% ordering him to (acate" #n addition, as in this case, the
owner of the land is prohibited from o4setting or compensating the
necessar% and useful e=penses with the fruits recei(ed b% the builder.
possessor in good faith" Otherwise, the securit% pro(ided b% law would be
impaired" 'his is so because the right to the e=penses and the right to the
fruits both pertain to the possessor, maing compensation *uridicall%
impossibleG and one cannot be used to reduce the other"
)s we earlier held, since petitioners opted to appropriate the
impro(ement for themsel(es as earl% as Nune 199A, when the% applied for
a writ of e=ecution despite nowledge that the auction sale did not
include the apartment building, the% could not bene0t from the lots
impro(ement, until the% reimbursed the impro(er in full, based on the
current maret (alue of the propert%"+i(en the circumstances of the
instant case where the builder in good faith has been clearl% denied his
right of retention for almost half a decade, we 0nd that the increased
award of rentals b% the /' was reasonable and e6uitable" 'he petitioners
had reaped all the bene0ts from the impro(ement introduced b% the
respondent during said period, without pa%ing an% amount to the latter as
reimbursement for his construction costs and e=penses" 'he% should
account and pa% for such bene0ts"
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%ROGRAMME IN(OR%ORA'ED, #". %RO)IN(E OF BA'AAN
G.R. No. 144639 J:ne 26, 2006
Fac" B)&O was the owner of Pia<<a 8otel and Mari(eles >odge, both
located in Mari(eles, Bataan" On Ma% 1, 19$?, B)&O granted
petitioner a contract of lease o(er Pia<<a 8otel at a monthl% rentalof P?,5!! for three %ears,i.e., from Nanuar% 1, 19$? to Nanuar% 1, 19$9,
sub*ect to renewal b% mutual agreement of the parties" )fter the
e=piration of the three.%ear lease period, petitioner was allowed to
continue operating the hotel on monthl% e=tensions of the lease"
#n )pril 19$9, howe(er, the Presidential ommission on +ood
+o(ernment P++: issued a se6uestration order against B)&O
pursuant to =ecuti(e Order ;o" 1 of former President ora<on
" )6uino" )mong the properties pro(isionall% sei<ed and taen o(er was
the lot on which Pia<<a 8otel stood"On Nul% 19, 19$9, howe(er, Pia<<a
8otel was sold at a public auction for non.pa%ment of ta=es to respondent
Pro(ince of Bataan" 'he title of the propert% was transferred to
respondent" B)&Os 'ransfer erti0cate of 'itle '': ;o" '.59?A1 was
cancelled and a new one, '' ;o" '.12$5?, was issued to the Pro(ince
of Bataan"
On Nul% 21, 19$9, petitioner 0led a complaint for preliminar%
in*unction and collection of sum of mone% against B)&O i(il ase ;o"
129.M>:" /espondent, as the new owner of the propert%, 0led a motion
for lea(e to inter(ene on ;o(ember 22, 199!" )fter its motion was
granted, respondent 0led a complaint.in.inter(ention pra%ing, inter alia,
that petitioner be ordered to (acate Pia<<a 8otel and Mari(eles >odge for
lac of legal interest"
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I"":e 3U;ot the petitioner is a possessor in goodfaith of the Pia<<a 8otel
and Mari(eles >odge"
R:!n< 'he e(idence clearl% established respondents ownership of
Pia<<a 8otel" @irst, the title of the land on which Pia<<a 8otel stands was
in the name of respondent" &econd, 'a= Declaration ;o" 127$2 was in the
name of respondent as owner of Pia<<a 8otel"'hird, petitioner was
doubtlessl% *ust a lessee" #n the lease contract anne=ed to the complaint,
petitioner in fact admittedB)&Os respondents predecessor.in.
interest: ownership then of the sub*ect propert%"
@urthermore, petitioners reference to )rticle $ of the
i(il ode to *ustif% its supposed rights as Kpossessor in good faithL was
erroneous"
'he bene0ts granted to a possessor in good faith cannot be maintained
b% the lessee against the lessor because, such bene0ts are intended to
appl% onl% to a case where one builds or sows or plants on land which he
belie(es himself to ha(e a claim of title and not to lands wherein ones
onl% interest is that of a tenant under a rental contract, otherwise, itwould alwa%s be in the power of a tenant to impro(e his landlord out of
his propert%" Besides, as between lessor and lessee, the ode applies
speci0c pro(isions designed to co(er their rights"
8ence, the lessee cannot claim reimbursement, as a matter of right, for
useful impro(ements he has made on the propert%, nor can he assert a
right of retention until reimbursed" 8is onl% remed% is to remo(e the
impro(ement if the lessor does not choose to pa% its (alueG but the court
cannot gi(e him the right to bu% the land"
Petitioners assertion that Pia<<a 8otel was constructed Kat its:
e=penseL found no support in the records" ;either did an% document or
testimon% pro(e this claim" )t best, what was con0rmed was that
petitioner mana)ed and o!erated the hotel" 'here was no e(idence that
petitioner was the one which spent for the construction or reno(ation of
the propert%" )nd since petitioners alleged e=penditures were ne(er
pro(en, it could not e(en see reimbursement of one.half of the (alue of
the impro(ements upon termination of the lease under )rticle 1?7$ of thei(il ode"
@inall%, both the trial and appellate courts declared that the land as well
as the impro(ement thereon Pia<<a 8otel: belonged to respondent" 3e
0nd no reason to o(erturn this factual conclusion"
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G.R. No. 10938 No#e=-er 11, 13
JO+ANNE$ $(+&BA(* > $ON$ %+ILI%%INE 'RADING
(OR%ORA'ION
(s"
'+E +ON. (O&R' OF A%%EAL$, RAMON $AN JO$E, JR.,
Fac" &ometime in 19$1, defendant established contact with
plainti4 through the Philippine onsulate +eneral in 8amburg, 3est
+erman%, because he wanted to purchase M); bus spare parts from
+erman%" Plainti4 communicated with its trading partner" Nohannes&chubac and &ohne 8andelsgesellschaft m"b"n" H o" &chubac
8amburg: regarding the spare parts defendant wanted to order"On
October 1?, 19$1, defendant submitted to plainti4 a list of the parts
=hibit B: he wanted to purchase with speci0c part numbers and
description" Plainti4 referred the list to &chubac 8amburg for 6uotations"
pon receipt of the 6uotations, plainti4 sent to defendant a letter dated
25 ;o(ember, 19$1 =h" : enclosing its o4er on the items listed b%
defendant"On December , 19$1, defendant informed plainti4 that he
preferred genuine to replacement parts, and re6uested that he be gi(en15 on all items =h" D:"On December 17, 19$1, plainti4 submitted its
formal o4er =h" : containing the item number, 6uantit%, part number,
description, unit price and total to defendant" On December, 2, 19$1,
defendant informed plainti4 of his desire to a(ail of the prices of the parts
at that time and enclosed Purchase Order ;o" !1!1 dated 1 December
19$1 =h" @ to @.:" &aid Purchase Order contained the item number,
part number and description" Defendant promised to submit the 6uantit%
per unit he wanted to order on December 2$ or 29 =h" @:"
On October 1$, 19$2, Plainti4 again reminded defendant of his order and
ad(ised that the case ma% be endorsed to its law%ers =h" >:"
Defendant replied that he did not mae an% (alid Purchase Order and
that there was no de0nite contract between him and plainti4 =h" M:"
Plainti4 sent a re*oinder e=plaining that there is a (alid Purchase Order
and suggesting that defendant either proceed with the order and open a
letter of credit or cancel the order and pa% the cancellation fee of A! of
@"O"B" (alue, or plainti4 will endorse the case to its law%ers =h" ;:"
I"":e whether or not a contract of sale has been perfected between the
parties"
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R:!n< )rticle 1A19 of the i(il ode statesJ Eonsent is manifested b%
the meeting of the o4er and acceptance upon the thing and the cause
which are to constitute the contract" 'he o4er must be certain and the
acceptance absolute" ) 6uali0ed acceptance constitutes a counter o4er"E
'he facts presented to us indicate that consent on both sides has beenmanifested"'he o4er b% petitioner was manifested on December 17, 19$1
when petitioner submitted its proposal containing the item number,
6uantit%, part number, description, the unit price and total to pri(ate
respondent" On December 2, 19$1, pri(ate respondent informed
petitioner of his desire to a(ail of the prices of the parts at that time and
simultaneousl% enclosed its Purchase Order ;o" !l!1 dated December 1,
19$1" )t this stage, a meeting of the minds between (endor and (endee
has occurred, the ob*ect of the contractJ being the spare parts and the
consideration, the price stated in petitionerFs o4er dated December 17,
19$1 and accepted b% the respondent on December 2,19$1")lthough
said purchase order did not contain the 6uantit% he wanted to order,
pri(ate respondent made good, his promise to communicate the same on
December 29, 19$1" )t this *uncture, it should be pointed out that pri(ate
respondent was alread% in the process of e=ecuting the agreement
pre(iousl% reached between the parties" 3hile we agree with the trial
courtFs conclusion that indeed a perfection of contract was reached
between the parties, we di4er as to the e=act date when it occurred, forperfection too place, not on December 29, 19$1" )lthough the 6uantit%
to be ordered was made determinate onl% on December 29, 19$1,
6uantit% is immaterial in the perfection of a sales contract" 3hat is of
importance is the meeting of the minds as to the ob*ect and cau#e, which
from the facts disclosed, show that as of December 2, 19$1, these
essential elements had alread% occurred"
On the part of the bu%er, the situation re(eals that pri(ate respondent
failed to open an irre(ocable letter of credit without recourse in fa(or of
Nohannes &chubac of 8amburg, +erman%" 'his omission, howe(er" does
not pre(ent the perfection of the contract between the parties, for the
opening of the letter of credit is not to be deemed a suspensi(e condition"
'he facts herein do not show that petitioner reser(ed title to the goods
until pri(ate respondent had opened a letter of credit" Petitioner, in the
course of its dealings with pri(ate respondent, did not incorporate an%
pro(ision declaring their contract of sale without e4ect until after the
ful0llment of the act of opening a letter of credit"
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G.R. No. 84480 March , 1
NA'IONAL GRAIN$ A&'+ORI' and 7ILLLAM (ABAL,
#".
'+E IN'ERMEDIA'E A%%ELLA'E (O&R' and LEON $ORIANO
Fac" On )ugust 2A, 1979, pri(ate respondent >eon &oriano o4ered to
sell pala% grains to the ;@), through 3illiam abal, the Pro(incial
Manager of ;@) stationed at 'uguegarao, aga%an" 8e submitted the
documents re6uired b% the ;@) for pre.6ualif%ing as a seller, namel%J 1:
@armerFs #nformation &heet accomplished b% &oriano and certi0ed b% a
Bureau of )gricultural =tension B)W: technician, ;apoleon allangan,
2: Wero= copies of four : ta= declarations of the riceland leased to him
and copies of the lease contract between him and Nudge oncepcion
&alud, and A: his /esidence 'a= erti0cate" Pri(ate respondent &orianoFs
documents were processed and accordingl%, he was gi(en a 6uota of
2,?! ca(ans of pala%" 'he 6uota noted in the @armerFs #nformation &heet
represented the ma=imum number of ca(ans of pala% that &oriano ma%
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sell to the ;@)"#n the afternoon of )ugust 2A, 1979 and on the following
da%, )ugust 2, 1979, &oriano deli(ered ?A! ca(ans of pala%" 'he pala%
deli(ered during these two da%s were not rebagged, classi0ed and
weighed" when &oriano demanded pa%ment of the ?A! ca(ans of pala%,
he was informed that its pa%ment will be held in abe%ance since Mr" abalwas still in(estigating on an information he recei(ed that &oriano was not
a bona tide farmer and the pala% deli(ered b% him was not produced from
his farmland but was taen from the warehouse of a rice trader, Ben de
+u<man" On )ugust 2$, 1979, abal wrote &oriano ad(ising him to
withdraw from the ;@) warehouse the ?A! ca(ans &oriano deli(ered
stating that ;@) cannot legall% accept the said deli(er% on the basis of the
subse6uent certi0cation of the B)W technician, ;apoleon allangan that
&oriano is not a bona 0de farmer"#nstead of withdrawing the ?A! ca(ans
of pala%, pri(ate respondent &oriano insisted that the pala% grains
deli(ered be paid" 8e then 0led a complaint for speci0c performance
andUor collection of mone% with damages on ;o(ember 2, 1979, against
the ;ational @ood )uthorit% and Mr" 3illiam abal, Pro(incial Manager of
;@) with the ourt of @irst #nstance of 'uguegarao"
I"":e whether or not there was a contract of sale in the case at bar"
R:!n< )rticle 15$ of the i(il ode of the Philippines de0nes sale as a
contract whereb% one of the contracting parties obligates himself to
transfer the ownership of and to deli(er a determinate thing, and the
other part% to pa% therefore a price certain in mone% or its e6ui(alent" )
contract, on the other hand, is a meeting of minds between two 2:
persons whereb% one binds himself, with respect to the other, to gi(e
something or to render some ser(ice )rt" 1A!5, i(il ode of the
Philippines:" 'he essential re6uisites of contracts areJ 1: consent of the
contracting parties, 2: ob*ect certain which is the sub*ect matter of the
contract, and A: cause of the obligation which is established )rt" 1A1$,
i(il ode of the Philippines"
#n the case at bar, &oriano initiall% o4ered to sell pala% grains
produced in his farmland to ;@)" 3hen the latter accepted the o4er b%
noting in &orianoFs @armerFs #nformation &heet a 6uota of 2,?! ca(ans,
there was alread% a meeting of the minds between the parties" 'he ob*ect
of the contract, being the pala% grains produced in &orianoFs farmland and
the ;@) was to pa% the same depending upon its 6ualit%" 'he fact that the
e=act number of ca(ans of pala% to be deli(ered has not been determined
does not a4ect the perfection of the contract" )rticle 1A9 of the ;ew
i(il ode pro(idesJ E" " "" 'he fact that the 6uantit% is not determinate
shall not be an obstacle to the e=istence of the contract, pro(ided it is
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possible to determine the same, without the need of a new contract
between the parties"E #n this case, there was no need for ;@) and &oriano
to enter into a new contract to determine the e=act number of ca(ans of
pala% to be sold" &oriano can deli(er so much of his produce as long as it
does not e=ceed 2,?! ca(ans"
'he acceptance referred to which determines consent is the acceptance
of the o4er of one part% b% the other and not of the goods deli(ered as
contended b% petitioners"@rom the moment the contract of sale is
perfected, it is incumbent upon the parties to compl% with their mutual
obligations or Ethe parties ma% reciprocall% demand performanceE thereof"
)rticle 175, i(il ode, 2nd par":"'he reason wh% ;@) initiall% refused
acceptance of the ?A! ca(ans of pala% deli(ered b% &oriano is that it
;@): cannot legall% accept the said deli(er% because &oriano is allegedl%not a bona 0de farmer" 'he trial court and the appellate court found that
&oriano was a bona 0de farmer and therefore, he was 6uali0ed to sell
pala% grains to ;@)"
what is brought to collation is not the donated
property itself, but the value of the property at the
time it was donated.
'+IRD DI)I$ION
? G.R. No. 11243, Oco-er 0, 1 @
ELO IM%ERIAL, %E'I'IONER )$. (O&R' OF A%%EAL$,
REGIONAL 'RIAL (O&R' OF LEGA$%I (I', (E$AR )ILLALON,
JR., 'ERE$A )ILLALON, AN'ONIO )ILLALON, A&G&$'O
)ILLALON, ROBER'O )ILLALON, RI(ARDO )ILLALON AND
E$'+ER )ILLALON, RE$%ONDEN'$.
D E ( I $ I O N
GONAGAREE$, J.
Petitioner sees to set aside the Decision of the ourt of )ppeals in ")".+"/" I ;o"
A197?[1], aCrming the Decision of the /egional 'rial ourt of >ega<pi it%[2], which
rendered inoCcious the donation made b% >eoncio #mperial in fa(or of herein
petitioner, to the e=tent that it impairs the
legitime of Iictor #mperial, and ordering
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petitioner to con(e% to herein pri(ate respondents, heirs of said Iictor #mperial, that
portion of the donated land proportionate to Iictor #mperials legitime"
>eoncio #mperial was the registered owner of a A2,$A7.s6uare meter parcel of land
co(ered b% Original erti0cate of 'itle ;o" 2!!, also nown as >ot 5 of the
adastral &ur(e% of )lba%" On Nul% 7, 1951, >eoncio sold the said lot for P1"!! to hisacnowledged natural son, petitioner herein, who then ac6uired title o(er the land
and proceeded to subdi(ide it into se(eral lots" Petitioner and pri(ate respondents
admit that despite the contracts designation as one of K)bsolute &aleL, the
transaction was in fact a donation"
On Nul% 2$, 195A, or barel% two %ears after the donation, >eoncio 0led a complaint
for annulment of the said Deed of )bsolute &ale, doceted as i(il ase ;o" 1177, in
the then ourt of @irst #nstance of )lba%, on the ground that he was decei(ed b%
petitioner herein into signing the said document" 'he dispute, howe(er, was
resol(ed through a compromise agreement, appro(ed b% the ourt of @irst #nstance
of )lba% on ;o(ember A, 19?1[3], under which termsJ 1: >eoncio recogni<ed thelegalit% and (alidit% of the rights of petitioner to the land donatedG and 2: petitioner
agreed to sell a designated 1,!!!.s6uare meter portion of the donated land, and to
deposit the proceeds thereof in a ban, for the con(enient disposal of >eoncio" #n
case of >eoncios death, it was agreed that the balance of the deposit will be
withdrawn b% petitioner to defra% burial costs"
On Nanuar% $, 19?2, and pending e=ecution of the abo(e *udgment, >eoncio died,
lea(ing onl% two heirs ... the herein petitioner, who is his acnowledged natural son,
and an adopted son, Iictor #mperial" On March $, 19?2, Iictor was substituted in
place of >eoncio in the abo(e.mentioned case, and it was he who mo(ed for
e=ecution of *udgment" On March 15, 19?2, the motion for e=ecution was dul%
granted"
@ifteen %ears thereafter, or on Nul% 2?, 1977, Iictor died single and without issue,
sur(i(ed onl% b% his natural father, /icardo Iillalon, who was a lessee of a portion of
the disputed land" @our %ears hence, or on &eptember 25, 19$1, /icardo died,
lea(ing as his onl% heirs his two children, esar and 'eresa Iillalon"
@i(e %ears thereafter, or sometime in 19$?, esar and 'eresa 0led a complaint for
annulment of the donation with the /egional 'rial ourt of >ega<pi it%, doceted as
i(il ase ;o" 7??" Petitioner mo(ed to dismiss on the ground of re# *udicata, b%
(irtue of the compromise *udgment rendered b% the ourt of @irst #nstance of )lba%"
'he trial court granted the motion to dismiss, but the ourt of )ppeals re(ersed the
trial courts order and remanded the case for further proceedings"
On October 1$, 19$9, esar and 'eresa 0led an amended complaint in the same
case, i(il ase ;o" 7??, for K)nnulment of Documents, /econ(e%ance and
/eco(er% of PossessionL with the /egional 'rial ourt of >ega<pi it%, seeing the
nulli0cation of the Deed of )bsolute &ale a4ecting the abo(e propert%, on grounds
of fraud, deceit and inoCciousness" #n the amended complaint, it was alleged that
petitioner caused >eoncio to e=ecute the donation b% taing undue ad(antage of
the latters ph%sical weaness and mental un0tness, and that the con(e%ance ofsaid propert% in fa(or of petitioner impaired the
legitime of Iictor #mperial, their
natural brother and predecessor.in.interest"[4]
#n his )nswer, petitionerJ 1: alleged that >eoncio had con(e%ed suCcient propert%
to Iictor to co(er his
legitime, consisting of 5?A hectares of agricultural land in
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Manito, )lba%G 2: reiterated the defense of re# *udicata, and A: raised the
additional defenses of prescription and laches"
Plainti4 esar Iillalon died on December 2?, 19$9, while the case was pending in
the /egional 'rial ourt, and was substituted in this action b% his sons, namel%,
)ntonio, /oberto, )ugusto, /icardo and esar, Nr", all surnamed Iillalon, and hiswidow, sther 8" Iillalon"
'he /' held the donation to be inoCcious and impairing the legitime of Iictor, on
the basis of its 0nding that at the time of >eoncios death, he left no propert% other
than the A2,$A7.s6uare meter parcel of land which he had donated to petitioner"
'he /' went on further to state that petitioners allegation that other properties
e=isted and were inherited b% Iictor was not substantiated b% the e(idence"[5]
'he
legitime of Iictor was determined b% the trial court in this mannerJ
onsidering that the propert% donated is A2,$A7 s6uare meters, one half of that or
1?,1$ s6uare meters becomes the free portion of >eoncio which could be absorbed
in the donation to defendant" 'he other half, which is also 1?,1$ s6uare meters is
where the legitime of the adopted son Iictor #mperial has to be taen"
'he proportion of the legitime of the legitimate child including the adopted child: in
relation to the acnowledged natural child defendant: is 1! is to 5, with the
acnowledged natural child getting X of thelegitime of the legitimate adopted:
child, in accordance with )rt" $95 of the ;ew i(il ode which pro(idesJ
K'he legitime of each of the acnowledged natural children and each of the natural
children b% legal 0ction shall consist of one.half of the legitime of each of the
legitimate children or descendants"L
@rom the 1?,1$ s6uare meters left after the free portion has been taen: plainti4s
are therefore entitled to 1!,9! s6uare meters while defendant gets 5,2! s6uare
meters"[6]
'he trial court liewise held that the applicable prescripti(e period is A! %ears under
)rticle 111 of the i(il ode[7], reconed from March 15, 19?2, when the writ of
e=ecution of the compromise *udgment in i(il ase 1177 was issued, and that the
original complaint ha(ing been 0led in 19$?, the action has not %et prescribed" #n
addition, the trial court regarded the defense of prescription as ha(ing been wai(ed,this not being one of the issues agreed upon at pre.trial"
'hus, the dispositi(e portion of the /'s Decision of December 1A, 199! readsJ
38/@O/, premises considered, the Deed of )bsolute &ale otherwise nown as
Doc" ;o" $G Boo ;o" 1G Page ;o" 1G &eries of 1951 of the ;otarial 0le of Pompe%o
B" alle*a which is considered a donation, is hereb% reduced proportionatel% insofar
as it a4ected the
legitime of the late Iictor #mperial, which share is inherited b% the
plainti4s herein, to the e=tent that plainti4s are ordered to be gi(en b% defendant a
portion of 1!,9! s6uare meters thereof"
#n order to a(oid further conYict, the 1!,9! share to be gi(en to plainti4s should
include the portion which the% are presentl% occup%ing, b% (irtue of the e=tended
lease to their father /icardo Iillalon, where the bungalow in 6uestion stands"
'he remaining portion to be gi(en to plainti4s ma% come from an% other portion
that ma% be agreed upon b% the parties, otherwise, this court will appoint a
commissioner to undertae the partition"
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'he other 21,$97 s6uare meters should go to the defendant as part of
his legitime and b% (irtue of the reduced donation"
;o pronouncement as to damages as the% were not suCcientl% pro(ed"
&O O/D/D"[8]
'he ourt of )ppeals aCrmed the /' Decision in toto"
Before us, petitioner 6uestions the following 0ndings of respondent courtJ 1: that
there was no re# *udicata, there being no identit% of parties and cause of action
between the instant case and i(il ase ;o" 1177G 2: that pri(ate respondents had
a right to 6uestion the donationG A: that pri(ate respondents action is barred b%
prescription, laches and estoppelG and : that the donation was inoCcious and
should be reduced"
#t is an indispensable re6uirement in re# *udicata that there be, between the 0rst
and second action, identit% of parties, of sub*ect matter and of cause of action"[9] )
perusal of the records leads us to conclude that there is no identit% of parties and of
cause of action as between i(il ase ;o" 1177 and i(il ase ;o" 7??" i(il ase
;o" 1177 was instituted b% >eoncio in his capacit% as donor of the 6uestioned
donation" 3hile it is true that upon his death, Iictor was substituted as plainti4 of
the action, such does not alter the fact that Iictors participation in the case was in
representation of the interests of the original plainti4, >eoncio" 'he purpose behind
the rule on substitution of parties is to ensure that the deceased part% would
continue to be properl% represented in the suit through the dul% appointed legal
representati(e of the estate[10], or his heir, as in this case, for which no court
appointment is re6uired"[11] Petitioners argument, therefore, that there is substantial
identit% between >eoncio and pri(ate respondents, being heirs and successors.in.
interest of Iictor, is una(ailing"
Moreo(er, >eoncios cause of action as donor of the propert% was fraud, purportedl%
emplo%ed upon him b% petitioner in the e=ecution of the donation" 3hile the same
circumstances of fraud and deceit are alleged in pri(ate respondents complaint, it
also raises the additional ground of inoCciousness of donation"
ontrar% to petitioners contentions, inoCciousness of donation does not, and could
not, form part of >eoncios cause of action in i(il ase ;o" 1177" #noCciousness as
a cause of action ma% arise onl% upon the death of the donor, as the (alue of the
donation will then be contrasted with the net (alue of the estate of the donor.
deceased"[12]
onse6uentl%, while in i(il ase ;o" 1177, >eoncio sought the re(ocation in full of
the donation on ground of fraud, the instant case actuall% has two alternati(e
causes of action" @irst, for fraud and deceit, under the same circumstances as
alleged in >eoncios complaint, which sees the annulment in full of the donation,
and which the trial court correctl% dismissed because the compromise agreement in
i(il ase ;o" 1177 ser(ed as a rati0cation and wai(er on the part of >eoncio of
whate(er defects in (oluntariness and consent ma% ha(e been attendant in themaing of the donation" 'he second cause of action is the alleged inoCciousness of
the donation, resulting in the impairment of Iictors
legitime, which sees the
annulment, not of the entire donation, but onl% of that portion diminishing
the legitime"[13] #t is on the basis of this second cause of action that pri(ate
respondents pre(ailed in the lower courts"
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Petitioner ne=t 6uestions the right of pri(ate respondents to contest the donation"
Petitioner sources his argument from )rticle 772 of the i(il ode, thusJ
Onl% those who at the time of the donors death ha(e a right to the legitime and
their heirs and successors in interest ma% as for the reduction of inoCcious
donations" ===
)s argued b% petitioner, when >eoncio died on Nanuar% $, 19?2, it was onl% Iictor
who was entitled to 6uestion the donation" 8owe(er, instead of 0ling an action to
contest the donation, Iictor ased to be substituted as plainti4 in i(il ase ;o"
1177 and e(en mo(ed for e=ecution of the compromise *udgment therein"
;o renunciation of legitime ma% be presumed from the foregoing acts" #t must be
remembered that at the time of the substitution, the *udgment appro(ing the
compromise agreement has alread% been rendered" Iictor merel% participated in
the e=ecution of the compromise *udgment" 8e was not a part% to the compromise
agreement"
More importantl%, our law on succession does not countenance tacit repudiation of
inheritance" /ather, it re6uires ane=press act on the part of the heir" 'hus, under
)rticle 1!51 of i(il odeJ
'he repudiation of an inheritance shall be made in a public or authentic instrument,
or b% petition presented to the court ha(ing *urisdiction o(er the testamentar% or
intestate proceedings"
'hus, when Iictor substituted >eoncio in i(il ase ;o" 1177 upon the latters
death, his act of mo(ing for e=ecution of the compromise *udgment cannot be
considered an act of renunciation of his
legitime" 8e was, therefore, not precluded
or estopped from subse6uentl% seeing the reduction of the donation, under )rticle
772" ;or are Iictors heirs, upon his death, precluded from doing so, as their right to
do so is e=pressl% recogni<ed under )rticle 772, and also in )rticle 1!5AJ
#f the heir should die without ha(ing accepted or repudiated the inheritance, his
right shall be transmitted to his heirs"
Be that as it ma%, we 0nd merit in petitioners other assignment of errors" 8a(ing
ascertained this action as one for reduction of an inoCcious donation, we cannot
sustain the holding of both the trial court and the ourt of )ppeals that the
applicable prescripti(e period is thirt% %ears, under )rticle 111 of the i(il ode" 'he sense of both courts that this case is a Kreal action o(er an immo(ableL allots
undue credence to pri(ate respondents description of their complaint, as one for
K)nnulment of Documents, /econ(e%ance and /eco(er% of Possession of Propert%L,
which suggests the action to be, in part, a real action enforced b% those with claim
of title o(er the disputed land"
nfortunatel% for pri(ate respondents, a claim for legitime does not amount to a
claim of title" #n the recent case of i+conde v#. Court of A!!eal#[14], we declared that
what is brought to collation is not the donated propert% itself, but the (alue of the
propert% at the time it was donated" 'he rationale for this is that the donation is areal alienation which con(e%s ownership upon its acceptance, hence, an% increase
in (alue or an% deterioration or loss thereof is for the account of the heir or donee"[15]
3hat, then, is the prescripti(e period for an action for reduction of an inoCcious
donation 'he i(il odespecifies the following instances of
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reduction or revocation of donations: (1) four years, in
cases of subseuent birth, appearance, recognition or
adoption of a child![16]
(") four years, for non#
compliance with conditions of the donation![17] and ($)
at any time during the lifetime of the donor and his
relatives entitled to support, for failure of the donor to
reserve property for his or their support%[18]
Interestingly, donations as in the instant case,[19]
the
reduction of which hinges upon the allegation of
impairment of
legitime, are not controlled by a
particular prescriptive period, for which reason we
must resort to the ordinary rules of prescription%
nder )rticle 11 of the i(il ode, actions upon an obligation created b% law must
be brought within ten %ears from the time the right of action accrues" 'hus, the ten.
%ear prescripti(e period applies to the obligation to reduce inoCcious donations,
re6uired under )rticle 771 of the i(il ode, to the e=tent that the% impair
the legitime of compulsor% heirs"
@rom when shall the ten.%ear period be reconed 'he case of ,ateo v#. $a)ua, 29
SCA /4, which in(ol(ed the reduction for inoCciousness of a donation !ro!ter
nu!tia#, recogni<ed that the cause of action to enforce a legitimeaccrues upon the
death of the donor.decedent" learl% so, since it is onl% then that the net estate ma%
be ascertained and on which basis, the legitimes ma% be determined"
#t too pri(ate respondents 2 %ears since the death of >eoncio to initiate this case"
'he action, therefore, has long prescribed"
)s for the trial courts holding that the defense of prescription had been wai(ed, it
not being one of the issues agreed upon at pre.trial, suCce it to sa% that while theterms of the pre.trial order bind the parties as to the matters to be taen up in trial,
it would be the height of in*ustice for us to adhere to this technicalit% when the fact
of prescription is manifest in the pleadings of the parties, as well as the 0ndings of
fact of the lower courts"[20]
) perusal of the factual antecedents re(eals that not onl% has prescription set in,
pri(ate respondents are also guilt% of estoppel b% laches" #t ma% be recalled that
>eoncio died on Nanuar% $, 19?2" @ifteen %ears later, Iictor died, lea(ing as his sole
heir /icardo Iillalon, who also died four %ears later" 3hile Iictor was ali(e, he ga(e
no indication of an% interest to contest the donation of his deceased father" )s weha(e discussed earlier, the fact that he acti(el% participated in i(il ase ;o" 1177
did not amount to a renunciation of his inheritance and does not preclude him from
bringing an action to claim his
legitime" 'hese are matters that Iictor could not
possibl% be unaware of, considering that he is a law%er[21]" /icardo Iillalon was e(en
a lessee of a portion of the donated propert%, and could ha(e instituted the action
as sole heir of his natural son, or at the (er% least, raised the matter of
legitime b%
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wa% of counterclaim in an e*ectment case[22] 0led against him b% petitioner in 1979"
;either does it help pri(ate respondents cause that 0(e %ears ha(e elapsed since
the death of /icardo in 19$1 before the% 0led their complaint with the /'"
stoppel b% laches is the failure or neglect for an unreasonable or une=plained
length of time to do that which, b% e=ercising due diligence, could or should ha(ebeen done earlier, warranting a presumption that the person has abandoned his
right or declined to assert it"[23] 3e 0nd the necessit% for the application of the
principle of estoppel b% laches in this case, in order to a(oid an in*ustice"
) 0nal word on collation of donations" 3e obser(e that after 0nding the donation to
be inoCcious because >eoncio had no other propert% at the time of his death, the
/' computed the
legitime of Iictor based on the area of the donated propert%"
8ence, in its dispositi(e portion, it awarded a portion of the propert% to pri(ate
respondents as Iictors legitime" 'his was upheld b% the ourt of )ppeals"
Our rules of succession re6uire that before an% conclusion as to the legal share dueto a compulsor% heir ma% be reached, the following steps must be taenJ 1: the net
estate of the decedent must be ascertained, b% deducting all the pa%able
obligations and charges from the (alue of the propert% owned b% the deceased at
the time of his deathG 2: the (alue of all donations sub*ect to collation would be
added to it"[24]
'hus, it is the value of the propert% at the time it is donated, and not the propert%
itself, which is brought to collation" onse6uentl%, e(en when the donation is found
inoCcious and reduced to the e=tent that it impaired Iictors
legitime, pri(ate
respondents will not recei(e a corresponding share in the propert% donated" 'hus, in
this case where the collatable propert% is an immo(able, what ma% be recei(ed isJ
1: an e6ui(alent, as much as possible, in propert% of the same nature, class and
6ualit%G[25] 2: if such is impracticable, the e6ui(alent (alue of the
impaired
legitime in cash or maretable securitiesG[26] or A: in the absence of cash or
securities in the estate, so much of such other propert% as ma% be necessar%, to be
sold in public auction"[27]
3e belie(e this worth mentioning, e(en as we grant the petition on grounds of
prescription and laches"
A((ORDINGL , the decision of the ourt of )ppeals in ")" +"/" I ;o" A197?,
aCrming in toto the decision of the /egional 'rial ourt in i(il ase ;o" 7??, is
re(ersed and set aside" ;o costs"
&O O/D/D"
THIRD DIVISION
[ G.R. NO. 154942, August 16, 2005 ]ROLANDO SANTOS, PETITIONER, VS. CONSTANCIA SANTOS ALANA,
RESPONDENT.
D E C I S I O N
SANDOVALG!TIERRE", #.$
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision1! dated "arch 7, #$$# and Resolution dated %ul&
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#4, #$$# of the Court of 'ppeals in C('()*(R( C+ o( 4$7#-(
' .rief narration of the factual antecedents follows/
Rolando 0antos, petitioner, and Constancia 0antos 'lana, respondent, are half).lood si.lings
.oth asserting their claim over a 9)s2uare meter lot located at 19)B 'ndalucia 0t(, 0ta( Cru3,"anila( t was registered in the name of their father, *regorio 0antos, under ransfer Certificate
of itle 6C o( 14#7- of the Registr& of Deeds of "anila( 8e died intestate on "arch 1$,
19-(
During his lifetime, or on %anuar& 1, 197-, *regorio donated the lot to petitioner which the
latter accepted on %une $, 19-1( he deed of donation 6: Pagsasalin ng Karapatan at Pag-aari:
was annotated on *regorio;s title(
<n 'pril -, 19-1, *regorio sold the lot to petitioner as per a Deed of '.solute 0ale(
<n %une #, 19-1, .& virtue of the annotated deed of donation, C o( 14#7- in *regorio;sname was cancelled and in lieu thereof, C o( 1447$ was issued .& the Registr& of Deeds of
"anila in petitioner;s name(
<n %anuar& 11, 1991, respondent Constancia 0antos filed with the Regional rial Court of
"anila, Branch 15, a complaint for partition and reconve&ance against petitioner( 0he allegedthat during his lifetime, her father *regorio denied having sold the lot to petitioner= that she
learned of the donation in 197-= and that the donation is inofficious as she was deprived of
her legitime(
n his answer, petitioner countered that respondent;s suit is .arred .& prescription considering
that she is aware that he has .een in possession of the lot as owner for more than ten 61$ &ears=
and that the lot was sold to him .& his father, hence, respondent can no longer claim her legitime(
he trial court found that the Deed of '.solute 0ale was not signed .& the parties nor was it
registered in the Registr& of Deeds( hus, it is not a valid contract( >hat is valid is the deed ofdonation as it was dul& e?ecuted .& the parties and registered(
he trial court then held that since *regorio did not own an& other propert&, the donation to
petitioner is inofficious .ecause it impaired respondent;s legitime(
he dispositive portion of the trial court;s Decision reads/
:>8@R@A<R@, premises considered, udgment is here.& rendered declaring the Deed ofDonation inofficious insofar as it impair the legitime of the plaintiff which is the of the su.ect
propert&(
he Registr& of Deeds of "anila is here.& ordered to cancel the entr& in C o( 14#7- of the
Deed of Donation dated %anuar& 1, 197- and to cancel C o( 1447$ issued .ased on said
entr&(
he parties are enoined to institute the proper action for the settlement of the @state of *regorio
0antos and for the eventual partition of the estate(:#!
<n appeal, the Court of 'ppeals affirmed the trial court;s Decision, holding that/:here are in the instant case two documents .& which the su.ect propert& was purportedl&
transferred to the defendant ) a deed of donation and a deed of sale(
? ? ?
T%&'& ()*, t%&'&+'&, -& * )/ -/ %(% t%& )&)*t 3)/ su((&ss+u/ (**(& us t%)t
G'&g' S)*ts s t%& '&'t/ * sut& t %3 )* su(% s)& ()* -* t%& )&&& s
)s t '&3& t%& ()s& +'3 t%& '&)3 + t%& ) * *)t*s.
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"oreover, as aptl& put .& the trial court/
;n general one who has disposed his propert& would not and could not have disposed the sameagain unless the previous act was rendered invalid or ineffective(
he validit& of the Deed of Donation was never assailed .& the defendant( n fact, it wasimpliedl& recogni3ed as valid .& defendant .& registering the same to the Registr& of Deeds(
t is the honest .elief of this Court, given the circumstances, i(e(, the e?istence of the vendor andthe vendee in the Deed of '.solute 0ale and the registration of the Deed of Donation despite the
supposed previous e?ecution of 6the Deed of '.solute 0ale, t%)t t%&'& )s * ) && +
s)& &&(ut& )* t%)t t%& t'u& )* '&) )g'&&3&*t -&t&&* G'&g' S)*ts )* R)*
S)*ts )s t%)t + ) *)t*.
Aurthermore, considering that defendant himself registered the Deed of Donation, he cannot now
close his e&es and den& the e?istence of the same .& alleging that there had .een a deed of sale
e?ecuted previousl&(: 6'ppealed Decision, supra, at pp( #-)#9? ? ?
>hile a person ma& dispose of his propert& .& donation, there is a limitation to the same( he
law provides that no person ma& give or receive, .& wa& of donation, more than he ma& give or
receive .& will, and an& donation which ma& e?ceed the foregoing is considered inofficious( ? ?? he donation shall .e inofficious in all that it ma& e?ceed this limitation( 6'rticle 75#, Civil
Code he said donation ma& correspondingl& .e reduced insofar as it e?ceeds the portion that
ma& .e freel& disposed of .& will 6'R( 71(
? ? ?
t has .een undisputedl& shown that the su.ect propert& was the onl& propert& of the deceased*regorio 0antos at the time of his death on "arch 1$, 19- 6@?hi.it ::, <riginal Record, p(
1= and that he made no reservation for the legitime of the plaintiff)appellee, his daughter 60ee
paragraph #, Complaint and paragraph #, 'nswer, .id(, at pp 1 and 1# and compulsor&heir( C&)'/, t%& 'u& * ++(us*&ss )&s. ? ? ?
? ? ?
Defendant)appellant finall& argues that since plaintiff)appellee Enew of the donation since 197-,
while the donor *regorio 0antos was still alive, her assailing the said donation onl& on %anuar&
11, 1991 or thirteen &ears after, has effectivel& .arred her from instituting the present action( he
foregoing is apparentl& groundless and without merit(
he inofficiousness of a donation cannot .e determined until after the death of the donor .ecause prior to his death, the value of his estate cannot .e determined or computed( Determination of the
value of the deceased;s estate will re2uire the collation of all properties or rights, donated or
conve&ed .& gratuitous title to the compulsor& heirs in order that the& ma& .e included in the
computation for the determination of the legitime of each heir and for the account of partition6'rt( 1$1, Civil Code(:!
8ence, the instant petition(
he findings of the courts .elow that 61 *regorio donated to petitioner the su.ect lot= 6# the
Deed of '.solute 0ale is void= and 6 *regorio;s onl& propert& is the said lot ) are all factual innature which are not within the domain of this Court for it is not a trier of facts(4! Basic is it thatfindings of fact .& the trial court, especiall& when affirmed on appeal, as in this case, are
conclusive and .inding upon this Court( 5!
he issues which involve 2uestions of law are/ 61 whether the donation is inofficious= and 6#
whether the respondent;s action has prescri.ed(
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( >hether the donation is inofficious(
t .ears reiterating that under 'rticle 75# of the Civil Code, the donation is inofficoius if it
e?ceeds this limitation )* &'s* 3)/ g& ' '&(&&, -/ )/ + *)t*, 3'& t%)* %&
3)/ g& ' '&(&& -/ . n Imperial vs. Court of Appeals,!
we held that inofficiousnessma& arise onl& upon the death of the donor as the value of donation ma& then .e contrasted with
the net value of the estate of the donor deceased(
't this point, we emphasi3e that as found .& the trial court, *regorio did not sell the lot to
petitioner( 8e donated it( he trial court also found that the donation is inofficious as it impairs
respondent;s legitime= that at the time of *regorio;s death, he left no propert& other than the lot
now in controvers& he donated to petitioner= and that the deceased made no reservation forthe legitime of respondent, his daughter and compulsor& heir( hese findings were affirmed .&
the Court of 'ppeals(
Pursuant to 'rticle 75# earlier cited, *regorio could not donate more than he ma& give .& will(Clearl&, .& donating the entire lot to petitioner, we agree with .oth lower courts that *regorio;s
donation is inofficious as it deprives respondent of her legitime, which, under 'rticle --- of theCivil Code, consists of one)half 61F# of the hereditar& estate of the father and the mother( 0ince
the parents of .oth parties are alread& dead, the& will inherit the entire lot, each .eing entitled to
one)half 61F# thereof(
( >hether respondent;s suit is .arred .& prescription(
n Imperial vs. Court of Appeals,7! we held that :donations, the reduction of which hinges uponthe allegation of impairment of legitime 6as in this case, are not controlled .& a particular
prescriptive period, for which reason, we must resort to the ordinar& rules of prescription( Gnder
'rticle 1144 of the Civil Code, actions upon an o.ligation created .& law must .e .rought withinten &ears from the time the right of action accrues( hus, the ten)&ear prescriptive period applies
to the o.ligation to reduce inofficious donations, re2uired under 'rticle 771 of the Civil Code,-! to the e?tent that the& impair the legitime of compulsor& heirs(
Arom when shall the ten)&ear period .e recEonedH n "ateo vs( Iagua,9! involving the reduction,
for inofficiousness, of a donation propter nuptias, we held that the cause of action to enforce
a legitime accrues upon the death of the donor)decedent( Clearl& so, since it is onl& then that thenet estate ma& .e ascertained and on which .asis, the legitimes ma& .e determined(
8ere, *regorio died in 19-( Conse2uentl&, respondent had until 199 within which to file theaction( Records show that she filed her suit in 199#, well within the prescriptive period(
7HERE8ORE, the petition is DENIED. he challenged Decision and Resolution of the Courtof 'ppeals in C')*(R( C+ o( 4$7#- are here.& A88IRED, with modification in the sense
that the su.ect deed of donation .eing inofficious, one half 61F# of the lot covered .& C o(
14#7- of the Registr& of Deeds of "anila is awarded to Constancia 0antos 'lana, respondent,
the same .eing her legitime( he remaining one)half 61F# shall .e retained .& petitioner,Rolando 0antos, as his legitime and .& virtue of the donation(
Costs against petitioner(
0< <RD@R@D(
THIRD DIVISION
[ G.R. N. 1:9;;6, D&(&3-&' 15, 2010 ]AELIA P. ARELLANO, REPRESENTED <= HER D!L= APPOINTED
G!ARDIANS, AGNES P. ARELLANO AND NONA P. ARELLANO,
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PETITIONER, VS. 8RANCISCO PASC!AL AND IG!EL PASC!AL,
RESPONDENTS.
D E C I S I O N
CARPIO ORALES, #.$
'ngel ( Pascual %r( died intestate on %anuar& #, 1999 leaving as heirs his si.lings, namel&/
petitioner 'melia P( 'rellano who is represented .& her daughters1! 'gnes P( 'rellano 6'gnes
and ona P( 'rellano, and respondents Arancisco Pascual and "iguel ( Pascual(#!
n a petition for :%udicial 0ettlement of ntestate @state and ssuance of Ietters of
'dministration,: docEeted as 0pecial Proceeding Case o( ")5$4, filed .& respondents on'pril #-, #$$$ .efore the Regional rial Court 6RC of "aEati, respondents alleged, inter alia,
that a parcel of land 6the donated propert& located in eresa +illage, "aEati, which was, .&
Deed of Donation, transferred .& the decedent to petitioner the validit& of which donation
respondents assailed, :ma& .e considered as an advance legitime: of petitioner(
Respondent;s nephew +ictor was, as the& pra&ed for, appointed as 'dministrator of the estate .&
Branch 15 of the "aEati RC(!
Respecting the donated propert&, now covered in the name of petitioner .& ransfer Certificate
of itle o( 1-1--9 of the Register of Deeds of "aEati, which respondents assailed .ut whichthe&, in an& event, posited that it :ma& .e considered as an advance legitime: to petitioner, the
trial court, acting as pro.ate court, held that it was precluded from determining the validit& of the
donation(
Provisionall& passing, however, upon the 2uestion of title to the donated propert& onl& for the purpose of determining whether it formed part of the decedent;s estate,4! the pro.ate court foundthe Deed of Donation valid in light of the presumption of validit& of notari3ed documents( t
thus went on to hold that it is su.ect to collation following 'rticle 1$1 of the ew Civil Code
which reads/5!
@ver& compulsor& heir, who succeeds with other compulsor& heirs, must .ring into the mass of
the estate an& propert& or right which he ma& have received from the decedent, during the
lifetime of the latter, .& wa& of donation, or an& other gratuitous title in order that it ma& .ecomputed in the determination of the
legitime of each heir, and in the account of the partition(
he pro.ate court thereafter partitioned the properties of the intestate estate( hus it disposed/
>8@R@A<R@, premises considered, udgment is here.& rendered declaring that/
1.he propert& covered .& C o( 1-1--9 of the Register of Deeds of "aEati as part of
the estate of 'ngel ( Pascual=
2.he propert& covered .& C o( 1-1--9 to .e su.ect to collation=
3.1F of the rental receiva.les due on the propert& at the me33anine and the rd floor of Gnit
111$ ana& 0t(, "aEati Cit& form part of the estate of 'ngel ( Pascual=
4.he following properties form part of the estate of 'ngel ( Pascual/
1( 1F share in the 8ouse and Iot at 111$ ana& 0t(, Ri3al +illage "aEati C o(
4-41 and 1F share in the rental income thereon=
#( 1F share in the +acant Iot with an area of #71 s2uare meters located at ana& 0t(,
Ri3al +illage, "aEati Cit&, C o( 119$=
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( 'gricultural land with an area of (- hectares located at Puerta *alera "indoro
covered .& <C o( P)#159=
4( 0hares of stocEs in 0an "iguel Corporation covered .& the following Certificate
um.ers/ '$$11$, '$$144, '$-#9$, '$$$-7, '$579, '11979, '$495#1,
C-95$, C$9, C551, C54-#4, C1#$#-, '$11$#, C1#-5, '1$49, '$#14$1,'$$7#1-, '$71, 0#9#9, 04$1#-, 05-$-, 09$9=
5( 0hares of stocEs in Paper ndustries Corp( covered .& the following Certificate
um.ers/ 0#9#9, 04$1#-, 05-$-, 09$9, '$$7$-, $7-$, '$#$7-, 01-59,
01449=
( J share in @duardo Pascual;s shares in Baguio *old "ining Co(=
7( Cash in Banco De <ro 0avings 'ccount o( # $14 1##9# 4 in the name of ona
'rellano=
-( Propert& previousl& covered .& C o( 119$5 now covered .& C o(1-1--9, Register of Deeds of "aEati Cit&=
9( Rental receiva.les from Raul 'rellano per <rder issued .& Branch 4 of the Courton ovem.er 17, 1995(
5. AND t%& '&'t&s )'& )'tt*& )s +s$
1. o heir 'melia P( 'rellano)the propert& covered .& C o( 1-1--9=
2. o heirs Arancisco ( Pascual and "iguel ( Pascual)the real properties covered
.& C os( 4-41 and 119$ of the Register of Deeds of "aEati Cit& and the
propert& covered .& <C o( #159, to .e divided e2uall& .etween them up to the e?tent
that each of their share have .een e2uali3ed with the actual value of the propert& in 56aat the time of donation, the value of which shall .e determined .& an independent
appraiser to .e designated .& 'melia P( 'rellano, "iguel ( Pascual and Arancisco (
Pascual( f the real properties are not sufficient to e2uali3e the shares, then Arancisco;sand "iguel;s shares ma& .e satisfied from either in cash propert& or shares of stocEs, at
the rate of 2uotation( he remaining properties shall .e divided e2uall& among
Arancisco, "iguel and 'melia( 6emphasis and underscoring supplied
Before the Court of 'ppeals, petitioner faulted the trial court in holding that
( ( ( 8@ PR<P@RK D<'@D < 'PP@II' '"@I' P'0CG'I 'R@II'<
0 P'R <A 8@ @0'@ <A '*@I P'0CG'I, %R(
( ( ( 8@ PR<P@RK D<'@D < 'PP@II' 0 0GB%@C < C<II'< GD@R
'RCI@ 1$1 <A 8@ @> C+I C<D@(
( ( ( 'PP@II@@0 >8< 'R@ "@R@IK C<II'@R'I R@I'+@0 <A D@C@'0@D '*@I
( P'0CG'I %R( '0 80 C<"PGI0<RK 8@R0 @I@D < I@*"@0(
? ? ? ?
and+
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( ( ( < P'R<* 8@ @0'@ <A '*@I ( P'0CG'I
%R( @LG'IIK '"<* 80 I@*'I <R @0'@ 8@R0( ! 6underscoring supplied
B& Decision7! of %ul& #$, #$$9, the Court of 'ppeals found petitioner;s appeal :partl&
meritorious(: t sustained the pro.ate court;s ruling that the propert& donated to petitioner issu.ect to collation in this wise/
Bearing in mind that in intestate succession, what governs is the rule on e2ualit& of division, >ehold that the'&'t/ su->&(t + *)t* inter vivos * +)' + A3&) s su->&(t t
()t*( 'melia cannot .e considered a creditor of the decedent and we .elieve that under the
circumstances, the value of such immova.le though not strictl& in the concept of
advance
legitime, should .e deducted from her share in the net hereditar& estate( he trial courttherefore committed no reversi.le error when it included the said propert& as forming part of the
estate of 'ngel ( Pascual(-! 6citation omitted= emphasis and underscoring supplied
he appellate court, however, held that, contrar& to the ruling of the pro.ate court, herein
petitioner :was a.le to su.mit prima facie evidence of shares of stocEs owned .& the decedent!
which have not .een included in the inventor& su.mitted .& the administrator(:
hus, the appellate court disposed, quoted verbatim/
>8@R@A<R@, premises considered, the present appeal is here.& P'RIK *R'@D( he
Decision dated %anuar& #9, #$$- of the Regional rial Court of "aEati Cit&, Branch 15 in
0pecial Proceeding Case o( ")5$4 is here.& R@+@R0@D and 0@ '0D@ insofar as the
order of inclusion of properties of the ntestate @state of 'ngel ( Pascual, %r( as well asthe partition and distri.ution of the same to the co)heirs are concerned(
he case is here.& R@"'D@D to the said court for further proceedings in accordance with thedis2uisitions herein(9! 6underscoring supplied
Petitioner;s Partial "otion for Reconsideration1$! having .een denied .& the appellate court .&Resolution11! of <cto.er 7, #$$9, the present petition for review on certiorari was filed, ascri.ing
as errors of the appellate court its ruling
( ( ( 8' 8@ PR<P@RK D<'@D BK '*@I ( P'0CG'I, %R( < P@<@R
'"@I' P'0CG'I 'R@II'< 0 P'R <A 80 @0'@ ' 8@ "@ <A 80 D@'8(
( ( ( 8' 8@ PR<P@RK D<'@D < P@<@R 0 0GB%@C <
C<II'< GD@R 'RCI@ 1$1 <A 8@ @> C+I C<D@(
( ( ( 8' R@0P<D@0 'R@ C<"PGI0<RK 8@R0 <A 8@R D@C@'0@D
BR<8@R '*@I ( P'0CG'I %R( 'D 'R@ @I@D < I@*"@0(
+
( ( ( < P'R<* 8@ @0'@ <A '*@I ( P'0CG'I,
%R( @LG'IIK '"<* P@<@R 'D R@0P<D@0, '0 80 I@*'I <R
@0'@ 8@R0(1#! 6underscoring supplied
Petitioners thus raise the issues of whether the propert& donated to petitioner is su.ect to
collation= and whether the propert& of the estate should have .een ordered e2uall& distri.uted
among the parties(
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<n the first issue/
he term collation has two distinct concepts/ first , it is a mere mathematical operation .& the
addition of the value of donations made .& the testator to the value of the hereditar& estate=
and second , it is the return to the hereditar& estate of propert& disposed of .& lucrative title .& thetestator during his lifetime(1!
he purposes of collation are to secure e2ualit& among the compulsor& heirs in so far as is possi.le, and to determine the free portion, after finding the legitime, so that inofficious
donations ma& .e reduced(14!
Collation taEes place when there are compulsory heirs, one of its purposes .eing to determinethe legitime and the free portion( f there is no compulsor& heir, there is no legitime to .e
safeguarded(15!
he records do not show that the decedent left an& primar&, secondar&, or concurring compulsor&heirs( 8e was onl& survived .& his si.lings, who are his collateral relatives and, therefore, are
not entitled to an& legitime ) that part of the testator;s propert& which he cannot dispose of .ecause the law has reserved it for compulsory heirs(1!
he compulsor& heirs ma& .e classified into 61 primar&, 6# secondar&, and 6 concurring( he primar& compulsor& heirs are those who have precedence over and e?clude other compulsor&
heirs= legitimate children and descendants are primar& compulsor& heirs( he secondar&
compulsor& heirs are those who succeed onl& in the a.sence of the primar& heirs= the legitimate
parents and ascendants are secondar& compulsor& heirs( he concurring compulsor& heirs arethose who succeed together with the primar& or the secondar& compulsor& heirs= the illegitimate
children, and the surviving spouse are concurring compulsor& heirs(17!
he decedent not having left an& compulsor& heir who is entitled to an& legitime, he was at
li.ert& to donate all his properties, even if nothing was left for his si.lings)collateral relatives to
inherit( 8is donation to petitioner, assuming that it was valid,1-! is deemed as donation made to a:stranger,: chargea.le against the free portion of the estate(19! here .eing no compulsor& heir,
however, the donated propert& is not su.ect to collation(
<n the second issue/
he decedent;s remaining estate should thus .e partitioned equally among his heirs)si.lings)
collateral relatives, herein petitioner and respondents, pursuant to the provisions of the Civil
Code, viz /
A't. 100?. f there are no descendants, ascendants, illegitimate children, or a survivingspouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance
with the following articles( 6underscoring supplied
A't. 1004. 0hould the onl& survivors .e .rothers and sisters of the full .lood, the& shall *%&'t
* &@u) s%)'&s( 6emphasis and underscoring supplied
7HERE8ORE, the petition is GRANTED( he Court of 'ppeals Decision ordering thecollation of the propert& donated to petitioner, 'melia ( 'rellano, to the estate of the deceased
'ngel ( Pascual, %r( is set aside(
Iet the records of the case .e R@"'D@D to the court of origin, Branch 15 of the "aEati
Regional rial Court, which is ordered to conduct further proceedings in the case for the purpose
of determining what finall& forms part of the estate, and thereafter to divide whatever remains ofit e2uall& among the parties(
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SO ORDERED.
8IRST DIVISION
[ G.R. N. 126?;6, N&3-&' 20, 200? ]SPO!SES <ERNARDO <!ENAVENT!RA AND CONSOLACION #OA!IN,
SPO!SES #!ANITO EDRA AND NORA #OA!IN, SPO!SES R!8INO
VALDO" AND EA #OA!IN, AND NATIVIDAD #OA!IN,
PETITIONERS, VS. CO!RT O8 APPEALS, SPO!SES LEONARDO
#OA!IN AND 8ELICIANA LANDRITO, SPO!SES 8IDEL #OA!IN AND
CONCHITA <ERNARDO, SPO!SES TOAS #OA!IN AND SOLEDAD
ALCORAN, SPO!SES ARTEIO #OA!IN AND SOCORRO ANGELES,
SPO!SES ALEBANDER ENDO"A AND CLARITA #OA!IN, SPO!SES
TELES8ORO CARREON AND 8ELICITAS #OA!IN, SPO!SES DANILO
VALDO" AND 8E #OA!IN, AND SPO!SES GAVINO #OA!IN AND LEAASIS, RESPONDENTS.
D E C I S I O N
CARPIO, #.$
T%& C)s&
his is a petition for review on certiorari1! to annul the Decision#! dated # %une 199 of theCourt of 'ppeals in C')*(R( C+ o( 4199( he Court of 'ppeals affirmed the Decision! dated
1- Ae.ruar& 199 rendered .& Branch 5 of the Regional rial Court of "aEati 6:trial court: inCivil Case o( -9)5174( he trial court dismissed the case after it found that the parties e?ecuted
the Deeds of 0ale for valid consideration and that the plaintiffs did not have a cause of actionagainst the defendants(
T%& 8)(ts
he Court of 'ppeals summari3ed the facts of the case as follows/
Defendant spouses Ieonardo %oa2uin and Aeliciana Iandrito are the parents of plaintiffsConsolacion, ora, @mma and atividad as well as of defendants Aidel, omas, 'rtemio, Clarita,
Aelicitas, Ae, and *avino, all surnamed %<'LG( he married %oa2uin children are oined in
this action .& their respective spouses(
0ought to .e declared null and void a. initio are certain deeds of sale of real propert& e?ecuted
.& defendant parents Ieonardo %oa2uin and Aeliciana Iandrito in favor of their co)defendant
children and the corresponding certificates of title issued in their names, to wit/
1.Deed of '.solute 0ale covering Iot 1-)C)7 of su.division plan 6IRC Psd)#595
e?ecuted on 11 %ul& 197-, in favor of defendant Aelicitas %oa2uin, for a consideration of
P,$$$($$ 6@?h( :C:, pursuant to which C o( 11F)17#! was issued in her name
6@?h( :C)1:=
2.Deed of '.solute 0ale covering Iot 1-)) of su.division plan 6IRC Psd)#594
e?ecuted on 7 %une 1979, in favor of defendant Clarita %oa2uin, for a consideration ofP1#!,$$$($$ 6@?h( :D:, pursuant to which C o( 0)1$977# was issued in her name
6@?h( :D)1:=
3.Deed of '.solute 0ale covering Iot 1-))1 of su.division plan 6IRC Psd)#594
e?ecuted on 1# "a& 19--, in favor of defendant spouses Aidel %oa2uin and Conchita
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Bernardo, for a consideration of P54,!$$($$ 6@?h( :@:, pursuant to which C o(
155#9 was issued to them 6@?h( :@)1:=
4.Deed of '.solute 0ale covering Iot 1-))# of su.division plan 6IRC Psd)#594
e?ecuted on 1# "a& 19--, in favor of defendant spouses 'rtemio %oa2uin and 0ocorro
'ngeles, for a consideration of P54,!$$($$ 6@?h( :A:, pursuant to which C o(155$ was issued to them 6@?h( :A)1:= and
5.'.solute 0ale of Real Propert& covering Iot 1-)C)4 of su.division plan 6IRC Psd)
#595 e?ecuted on 9 0eptem.er 19--, in favor of omas %oa2uin, for a consideration of
P#$,$$$($$ 6@?h( :*:, pursuant to which C o( 157#$ was issued in her name 6@?h(
:*)1:(( Deed of '.solute 0ale covering Iot 1-)C)1 of su.division plan 6IRC Psd)#595 e?ecuted
on 7 <cto.er 19--, in favor of *avino %oa2uin, for a consideration of P#5,$$$($$ 6@?h( ::,
pursuant to which C o( 157779 was issued in his name 6@?h( :)1:(!
n seeEing the declaration of nullit& of the aforesaid deeds of sale and certificates of title,
plaintiffs, in their complaint, aver/) MM)
The deeds of sale, Annexes "C," "D," "E," "F," and "G," [and "K"] are simulated as
they are, are NULL AND VOID AB INITIO because -
a Airstl&, there was no actual valid consideration for the deeds of sale ??? over the
properties in litis=
. 0econdl&, assuming that there was consideration in the sums reflected in the 2uestioned
deeds, the properties are more than three)fold times more valua.le than the measl&sums appearing therein=
c hirdl&, the deeds of sale do not reflect and e?press the true intent of the parties
6vendors and vendees= and
d Aourthl&, the purported sale of the properties in litis was the result of a deli.erate
conspirac& designed to unustl& deprive the rest of the compulsor& heirs 6plaintiffs
herein of their legitime(
) MM ) ecessaril&, and as an inevita.le conse2uence, ransfer Certificates of itle os( 11F)17#,
0)1$977#, 155#9, 155$, 157#$ and 157779! issued .& the Registrar of Deeds over the
properties in litis ??? are GII 'D +<D 'B <(
Defendants, on the other hand aver 61 that plaintiffs do not have a cause of action against them
as well as the re2uisite standing and interest to assail their titles over the properties in litis= 6#
that the sales were with sufficient considerations and made .& defendants parents voluntaril&, ingood faith, and with full Enowledge of the conse2uences of their deeds of sale= and 6 that the
certificates of title were issued with sufficient factual and legal .asis(4! 6@mphasis in the original
T%& Ru*g + t%& T') Cu't
Before the trial, the trial court ordered the dismissal of the case against defendant spouses*avino %oa2uin and Iea 'sis(5! nstead of filing an 'nswer with their co) defendants, *avino%oa2uin and Iea 'sis filed a "otion to Dismiss(! n granting the dismissal to *avino %oa2uin
and Iea 'sis, the trial court noted that :compulsor& heirs have the right to a
legitime .ut such
right is contingent since said right commences onl& from the moment of death of the decedent pursuant to 'rticle 777 of the Civil Code of the Philippines(:7!
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'fter trial, the trial court ruled in favor of the defendants and dismissed the complaint( he trial
court stated/
n the first place, the testimon& of the defendants, particularl& that of the ??? father will showthat the Deeds of 0ale were all e?ecuted for valua.le consideration( his assertion must prevail
over the negative allegation of plaintiffs(
'nd then there is the argument that plaintiffs do not have a valid cause of action against
defendants since there can .e no legitime to speaE of prior to the death of their parents( he court
finds this contention tena.le( n determining the legitime, the value of the propert& left at thedeath of the testator shall .e considered 6'rt( 9$- of the ew Civil Code( 8ence, the legitime of
a compulsor& heir is computed as of the time of the death of the decedent( Plaintiffs therefore
cannot claim an impairment of their legitime while their parents live(
'll the foregoing considered, this case is D0"00@D(
n order to preserve whatever is left of the ties that should .ind families together, the
counterclaim is liEewise D0"00@D(
o costs(
0< <RD@R@D(-!
T%& Ru*g + t%& Cu't + A&)s
he Court of 'ppeals affirmed the decision of the trial court( he appellate court ruled/
o the mind of the Court, appellants are sEirting the real and decisive issue in this case, which is,
whether ??? the& have a cause of action against appellees(
Gpon this point, there is no 2uestion that plaintiffs)appellants, liEe their defendant .rothers and
sisters, are compulsor& heirs of defendant spouses, Ieonardo %oa2uin and Aeliciana Iandrito,who are their parents( 8owever, their right to the properties of their defendant parents, as
compulsor& heirs, is merel& inchoate and vests onl& upon the latter;s death( >hile still alive,
defendant parents are free to dispose of their properties, provided that such dispositions are notmade in fraud of creditors(
Plaintiffs)appellants are definitel& not parties to the deeds of sale in 2uestion( either do the&
claim to .e creditors of their defendant parents( Conse2uentl&, the& cannot .e considered as real parties in interest to assail the validit& of said deeds either for gross inade2uac& or lacE of
consideration or for failure to e?press the true intent of the parties( n point is the ruling of the
0upreme Court in +elarde, et al( vs( Pae3, et al(, 1$1 0CR' 7, thus/
he plaintiffs are not parties to the alleged deed of sale and are not principall& or su.sidiaril&
.ound there.&= hence, the& have no legal capacit& to challenge their validit&(
Plaintiffs)appellants anchor their action on the supposed impairment of their
legitime .& the
dispositions made .& their defendant parents in favor of their defendant .rothers and sisters( But,
as correctl& held .& the court a 2uo, :the
legitime of a compulsor& heir is computed as of the timeof the death of the decedent( Plaintiffs therefore cannot claim an impairment of
their legitime while their parents live(:
>ith this posture taEen .& the Court, consideration of the errors assigned .& plaintiffs)appellants
is inconse2uential(
>8@R@A<R@, the decision appealed from is here.& 'AAR"@D, with costs against plaintiffs)
appellants(
0< <RD@R@D(9!
8ence, the instant petition(
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Issu&s
Petitioners assign the following as errors of the Court of 'ppeals/
1.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ C<+@K'C@
LG@0< 8'D < +'ID C<0D@R'<(
2.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' @+@ '00G"*
8' 8@R@ >'0 ' C<0D@R'<, 8@ 0'"@ 0 *R<00IK 'D@LG'@(
3.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ D@@D0 <A
0'I@ D< < @MPR@00 8@ RG@ @ <A 8@ P'R@0(
4.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ C<+@K'C@
>'0 P'R 'D P'RC@I <A ' C<0PR'CK '"@D ' G%G0IK D@PR+*
8@ R@0 <A 8@ C8IDR@ <A 8@ 0P<G0@0 I@<'RD< %<'LG 'D
A@IC'' I'DR< <A 8@R @R@0 <+@R 8@ 0GB%@CPR<P@R@0(
5.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' P@<@R0 8'+@
' *<<D, 0GAAC@ 'D +'ID C'G0@ <A 'C< '*'0 8@ PR+'@
R@0P<D@0(1$!
T%& Ru*g + t%& Cu't
>e find the petition without merit(
>e will discuss petitioners; legal interest over the properties su.ect of the Deeds of 0ale .eforediscussing the issues on the purported lacE of consideration and gross inade2uac& of the prices of
the Deeds of 0ale(
Whether Petitioners have a legal interest
over the properties subject of the Deeds of Sale
Petitioners; Complaint .etra&s their motive for filing this case( n their Complaint, petitioners
asserted that the :purported sale of the properties in litis was the result of a deli.erate conspirac&
designed to unustl& deprive the rest of the compulsor& heirs 6plaintiffs herein of their
legitime(:
Petitioners; strateg& was to have the Deeds of 0ale declared void so that ownership of the lotswould eventuall& revert to their respondent parents( f their parents die still owning the lots,
petitioners and their respondent si.lings will then co)own their parents; estate .& hereditar&
succession(11!
t is evident from the records that petitioners are interested in the properties su.ect of the Deeds
of 0ale, .ut the& have failed to show an& legal right to the properties( he trial and appellatecourts should have dismissed the action for this reason alone( 'n action must .e prosecuted in
the name of the real part&)in)interest(1#!
!he 2uestion as to :real part&)in)interest: is whether he is :the part& who would .e .enefitted
or inured .& the udgment, or the Npart& entitled to the avails of the suit(;:
? ? ?
n actions for the annulment of contracts, such as this action, the real parties are those who are parties to the agreement or are .ound either principall& or su.sidiaril& or are preudiced in their
rights with respect to one of the contracting parties and can show the detriment which would positivel& result to them from the contract even though the& did not intervene in it 6.aOe3 v(
8ongEong 0hanghai BanE, ## Phil( 57# 191#! ???(
hese are parties with :a present su.stantial interest, as distinguished from a mere e?pectanc& or
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future, contingent, su.ordinate, or conse2uential interest(((( he phrase Npresent su.stantial
interest; more concretel& is meant such interest of a part& in the su.ect matter of the action as
will entitle him, under the su.stantive law, to recover if the evidence is sufficient, or that he hasthe legal title to demand and the defendant will .e protected in a pa&ment to or recover& .&
him(:1!
Petitioners do not have an& legal interest over the properties su.ect of the Deeds of 0ale( 's theappellate court stated, petitioners; right to their parents; properties is merel& inchoate and vests
onl& upon their parents; death( >hile still living, the parents of petitioners are free to dispose of
their properties( n their over3ealousness to safeguard their future legitime, petitioners forget thattheoreticall&, the sale of the lots to their si.lings does not affect the value of their parents; estate(
>hile the sale of the lots reduced the estate, cash of e2uivalent value replaced the lots taEen from
the estate(
Whether the Deeds of Sale are void
for lack of consideration
Petitioners assert that their respondent si.lings did not actuall& pa& the prices stated in the Deeds
of 0ale to their respondent father( hus, petitioners asE the court to declare the Deeds of 0ale
void(
' contract of sale is not a real contract, .ut a consensual contract( 's a consensual contract, a
contract of sale .ecomes a .inding and valid contract upon the meeting of the minds as to price(f there is a meeting of the minds of the parties as to the price, the contract of sale is valid,
despite the manner of pa&ment, or even the .reach of that manner of pa&ment( f the real price is
not stated in the contract, then the contract of sale is valid .ut su.ect to reformation( f there is
no meeting of the minds of the parties as to the price, .ecause the price stipulated in the contractis simulated, then the contract is void(14! 'rticle 1471 of the Civil Code states that if the price in
a contract of sale is simulated, the sale is void(
t is not the act of pa&ment of price that determines the validit& of a contract of sale( Pa&ment of
the price has nothing to do with the perfection of the contract( Pa&ment of the price goes into the
performance of the contract( Aailure to pa& the consideration is different from lacE ofconsideration( he former results in a right to demand the fulfillment or cancellation of the
o.ligation under an e?isting valid contract while the latter prevents the e?istence of a valid
contract(15!
Petitioners failed to show that the prices in the Deeds of 0ale were a.solutel& simulated( o
prove simulation, petitioners presented @mma %oa2uin +aldo3;s testimon& stating that their
father, respondent Ieonardo %oa2uin, told her that he would transfer a lot to her through a deed
of sale without need for her pa&ment of the purchase price(1!he trial court did not find theallegation of a.solute simulation of price credi.le( Petitioners; failure to prove a.solute
simulation of price is magnified .& their lacE of Enowledge of their respondent si.lings; financialcapacit& to .u& the 2uestioned lots(17! <n the other hand, the Deeds of 0ale which petitioners
presented as evidence plainl& showed the cost of each lot sold( ot onl& did respondents; minds
meet as to the purchase price, .ut the real price was also stated in the Deeds of 0ale( 's of the
filing of the complaint, respondent si.lings have also full& paid the price to their respondentfather(1-!
Whether the Deeds of Sale are void
for gross inadequacy of price
Petitioners asE that assuming that there is consideration, the same is grossl& inade2uate as toinvalidate the Deeds of 0ale(
'rticles 155 of the Civil Code states/'rt( 155( @?cept in cases specified .& law, lesion or inadequacy of cause shall not invalidate a
contract , unless there has .een fraud, mistaEe or undue influence( 6@mphasis supplied
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'rticle 147$ of the Civil Code further provides/
'rt( 147$( Gross inadequacy of price does not affect a contract of sale, e?cept as ma& indicate a
defect in the consent, or that the parties reall& intended a donation or some other act or contract(6@mphasis supplied
Petitioners failed to prove an& of the instances mentioned in 'rticles 155 and 147$ of the Civil
Code which would invalidate, or even affect, the Deeds of 0ale( ndeed, there is no re2uirementthat the price .e e2ual to the e?act value of the su.ect matter of sale( 'll the respondents
.elieved that the& received the commutative value of what the& gave( 's we stated in Vales v.
Villa/ 19!
Courts cannot follow one ever& step of his life and e?tricate him from .ad .argains, protect him
from unwise investments, relieve him from one)sided contracts, or annul the effects of foolish
acts( Courts cannot constitute themselves guardians of persons who are not legall& incompetent(
Courts operate not .ecause one person has .een defeated or overcome .& another, .ut .ecause hehas .een defeated or overcome illegally( "en ma& do foolish things, maEe ridiculous contracts,
use misera.le udgment, and lose mone& .& them ) indeed, all the& have in the world= .ut not for
that alone can the law intervene and restore( here must .e, in addition, a violation of the law,
the commission of what the law Enows as an actionable wrong, .efore the courts are authori3edto la& hold of the situation and remed& it( 6@mphasis in the original
"oreover, the factual findings of the appellate court are conclusive on the parties and carr&greater weight when the& coincide with the factual findings of the trial court( his Court will not
weigh the evidence all over again unless there has .een a showing that the findings of the lower
court are totall& devoid of support or are clearl& erroneous so as to constitute serious a.use ofdiscretion(#$! n the instant case, the trial court found that the lots were sold for a valid
consideration, and that the defendant children actuall& paid the purchase price stipulated in their
respective Deeds of 0ale( 'ctual pa&ment of the purchase price .& the .u&er to the seller is a
factual finding that is now conclusive upon us(
7HERE8ORE, we A88IR the decision of the Court of 'ppeals in toto( SO ORDERED.
8IRST DIVISION
[ G.R. N. 65:00, O(t-&' 0?, 19:6 ]PARTEN"A L!CERNA VDA. DE T!PAS, PETITIONERAPPELLANT, VS.
<RANCH BLIII O8 THE HON. REGIONAL TRIAL CO!RT O8 NEGROS
OCCIDENTAL, RESPONDENT, AND T!PAS 8O!NDATION, INC., PRIVATE
RESPONDENTAPPELLEE.
D E C I S I O N
NARVASA, #.$
nvolved in this appeal is the 2uestion of whether or not a donation inter vivos .& a donor now
deceased is inofficious and should .e reduced at the instance of the donor;s widow(@pifanio R( upas died on 'ugust #$, 197- in Bacolod Cit&, childless, leaving his widow,
Parten3a Iucerna, as his onl& surviving compulsor& heir( 8e also left a will dated "a& 1-, 197,
which was admitted to pro.ate on 0eptem.er $, 19-$ in 0pecial Proceedings o( 1994 of theCourt of Airst nstance of egros <ccidental( 'mong the assets listed in his will were lots os(
-7, -- and -9 of the 0aga& Cadastre, admittedl& his private capital( 8owever, at the time of
his death, these lots were no longer owned .& him, he having donated them the &ear .efore 6on
'ugust #, 1977 to the upas Aoundation, nc(, which had thereafter o.tained title to said lots(Claiming that said donation had left her practicall& destitute of an& inheritance, upas; widow
.rought suit against upas Aoundation, nc( in the same Court of Airst nstance of egros
<ccidental 6docEeted as Civil Case o( 1$-9 to have the donation declared inofficious insofaras it preudiced her legitime, therefore reduci.le :Q Q Q .& one)half or such proportion as Q Q Q
6might .e deemed ustified Q Q Q: and :Q Q Q the resulting deduction Q Q Q: restored and
conve&ed or delivered to her( he complaint also pra&ed for attorne&;s fees and such other reliefas might .e proper(
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he rial Court did not see things her wa&( Gpon the facts a.ove stated, on which the parties
stipulated[1], said Court dismissed the complaint for lacE of merit, reecting her claim on several
grounds, vi3(/:Q Q Q 61 'rticle 9$$ relied upon .& plaintiff is not applica.le .ecause the properties which were
disposed of .& wa& of donation one &ear .efore the death of @pifanio upas were no longer part
of his hereditar& estateat the time of his death on 'ugust #$, 197-= 6# the donated propertieswere @pifanio;s capital or separate estate= and 6 upas Aoundation, nc( .eing a stranger and not
a compulsor& heir, the donation inter vivosmade in its favor was not su.ect to collation under
'rt( 1$1, C(C(:[2]
he rial Court is in error on all counts and must .e reversed(
' person;s prerogative to maEe donations is su.ect to certain limitations, one of which is that he
cannot give .& donation more than he can give .& will 6'rt( 75#, Civil Code[3]( f he does, somuch of what is donated as e?ceeds what he can give .& will is deemed inofficious and the
donation is reduci.le to the e?tent of such e?cess, though without preudice to its taEing effect in
the donor;s lifetime or the donee;s appropriating the fruits of the thing donated 6'rt( 771, CivilCode( 0uch a donation is, moreover, collationa.le, that is, its value is imputa.le into the
hereditar& estate of the donor at the time of his death for the purpose of determining the legitimeof the forced or compulsor& heirs and the freel& disposa.le portion of the estate( his is true as
well of donations to strangers as of gifts to compulsor& heirs, although the language of 'rticle1$1 of the Civil Code would seem to limit collation to the latter class of donations( 'nd this
has .een held to .e a long)esta.lished rule in Iigue3 vs( 8onora.le Court of 'ppeals, et al(, [4],
where this Court said/:Q Q Q 8ence, the forced heirs are entitled to have the donation set aside in so far as inofficious/
i(e(, in e?cess of the portion of free disposal 6Civil Code of 1--9, 'rticles , 45, computed as
provided in 'rticles -1- and -19, and .earing in mind that ;collationa.le gifts; under 'rticle -1-should include gifts made not onl& in favor of the forced heirs, .ut even those made in favor of
strangers, as decided .& the 0upreme Court of 0pain in its decisions of 4 "a& 1-99 and 1 %une
19$#( 0o that in computing the legitimes, the value of the propert& donated to herein appellant,Conchita Iigue3, should .e considered part of the donor;s estate( <nce again, onl& the court oforigin has the re2uisite data to determine whether the donation is inofficious or not(:[5]
he fact, therefore, that the donated propert& no longer actuall& formed part of the estate of thedonor at the time of his death cannot .e asserted to prevent its .eing .rought to collation(
ndeed, it is an o.vious proposition that collation contemplates and particularl& applies to
gifts inter vivos[6]( he further fact that the lots donated were admittedl& capital separate propert&
of the donor is of no moment, .ecause a claim of inofficiousness does not assert that the donorgave what was not his, .ut that he gave more than what was within his power to give(
0ince it is clear that the 2uestioned donation is collationa.le and that, having .een made to a
stranger 6to the donor it is, .& law[7] chargea.le to the freel& disposa.le portion of the donor;s
estate, to .e reduced insofar as inofficious, i(e(, it e?ceeds said portion and thus impairs thelegitime of the compulsor& heirs, in order to find out whether it is inofficious or not, recourse
must .e had to the rules esta.lished .& the Civil Code for the determination of the legitime and, .& e?tension, of the disposa.le portion( hese rules are set forth in 'rticles 9$-, 9$9 and 91$ of
the Code, on the .asis of which the following step).&)step procedure has .een correctl& outlined/
61 determination of the value of the propert& which remains at the time of the testator;s death=
6# determination of the o.ligations, de.ts, and charges which have to .e paid out or deducted
from the value of the propert& thus left=
6 the determination of the difference .etween the assets and the lia.ilities, giving rise to thehereditar& estate=
64 the addition to the net value thus found, of the value, at the time the& were made, ofdonations su.ect to collation= and
65 the determination of the amount of the legitimes .& getting from the total thus found the
portion that the law provides as the legitime of each respective compulsor& heir ([8]
Deducting the legitimes from the net value of the hereditar& estate leaves the freel& disposa.le
portion .& which the donation in 2uestion here must .e measured( f the value of the donation at
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the time it was made does not e?ceed that difference, then it must .e allowed to stand( But if it
does, the donation is inofficious as to the e?cess and must .e reduced .& the amount of said
e?cess( n this case, if an& e?cess .e shown, it shall .e returned or reverted to the petitioner)appellant as the sole compulsor& heir of the deceased @pifanio R( upas(
Aor o.vious reasons, this determination cannot now .e made, as it re2uires appreciation of data
not .efore this Court and ma& necessitate the production of evidence in the Court a 2uo(7HERE8ORE, the appealed decision is reversed and petitioner)appellant Parten3a Iucerna
+da( de upas is adudged entitled to so much of the donated propert& in 2uestion, as ma& .e
found in e?cess of the freel& disposa.le portion of the estate of @pifanio B( upas, determined inthe manner a.ove)indicated( Iet the case .e remanded to the rial Court for further appropriate
proceedings in accordance with this decision(
SO ORDERED.
‘The rule regarding prescription cannot be pleaded
between them except when one heir openly and
adversely occupies the property for a period
sufficiently long to entitle him to ownership under
the law. In other words, as long as other heirs
acknowledge their ownership or do not set up any
adverse title to the property, prescription is
unavailable.’
$E(OND DI)I$ION
? G.R. No. 46, Jan:ar5 24, 12 @
RE). FR. )I(EN'E (ORONEL, RODOLFO (ORONEL, GERARDO
(ORONEL, $AN'O$ (ORONEL AND DOMINGA (ORONEL,
%E'I'IONER$, )$. +ON. (O&R' OF A%%EAL$, RE). FR.
R&$'I(O (&E)A$, %RI$(ILLANO (&E)A$, LO&RDE$ (&E)A$
$EBA$'IAN, NA'ALIA (&E)A$ GAR(IA AND BRIGIDA (&E)A$
J&DI, RE$%ONDEN'$.
D E ( I $ I O N
%ARA$, J.
'his is a petition for re(iew of the decision*of the ourt of )ppeals dated Nul% A1,
199! in ).+"/" ;o" 1AA12 entitled E/e(" @r" /ustico ue(as, et al", Plainti4s.
)ppellees (" /e(" @r" Iicente oronel, et al", Defendants.)ppellants,E which
con0rmed the decision of the trial court with slight modi0cation"
'he facts are as followsJ Z
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'he petitioners are the children and compulsor% heirs of the late +audencio oronelG
while the respondents are the children and compulsor% heirs of the late Suerubin
ue(as" #n turn, their respecti(e ascendants +audencio oronel and Suerubin
ue(as are the legitimate, e=clusi(e and compulsor% heirs of Bernarda Da(id >im
who died on Nune 2!, 19A in Betis, +uagua, Pampanga"
)mong the properties left b% Bernarda Da(id >im, sub*ect to a Deed of Partition and
+rant dated March 12, 19!, is a parcel of land situated at the Barrio of &an ;icolas,
Municipalit% of +uagua, Pro(ince of Pampanga, containing an area of 115$ s6uare
meters more or less designated as #tem ;o" I###"
#n accordance with the aforesaid deed, the lot in 6uestion was distributed and
ad*udicated as followsJ Z
Ea: A! s6uare meters to 'eodora 8enson, in consideration of the ser(ices rendered
to the late Bernarda >imG
b: 'he remaining portion of said lot clearl% remain a communit% propert% among
the heirs, that is, the part% of the 0rst part Bernarda &unglao and /osario &unglao:,
the part% of the second part Nose ue(as, Patricia ue(as, esar ue(as, atalina
ue(as and Suerubin ue(as: or the part% of the third part, +audenciooronel and
&al(ador oronelG and part% of the fourth part Bonifacia Da(id, and >ucia Da(id:"E
p" 5$, /ollo: nderscoring supplied:"
@urther, the father of the respondents was gi(en the right to occup% the whole lot as
his house where his famil% resides was built on lot 59?7 and inasmuch as the lot
shall remain intact sta%ing as a communit% propert% for ten 1!: %ears"
'hen on Nune 2, 1971 +audencio oronel % Da(id 0led an application for original
registration of title under )ct ;o" 9? swearing among others that he was the owner
in fee simple and the onl% one in occupation of the lot which resulted in Original
erti0cate of 'itle ;o" 577! dated @ebruar% 7, 1972" )fter +audencio oronel died,
his heirs, herein petitioners, e=ecuted a Deed of Partition among themsel(es and a
'ransfer erti0cate of 'itle ;o" 1519A1./ was issued in their names on December 7,
197$"
/espondents learned of this fraudulent transfer onl% on @ebruar% 19$ when ;atalia
ue(as.+arcia and her husband were being sued b% petitioners for unlawful
detainer before the Municipal 'rial ourt of +uagua, Pampanga, Branch ##, alleging
that on the strength of the aforestated '' ;o" 1519A1./ the% now ha(e a right to
e*ect the present occupants ;atalia ue(as.+arcia, her husband and famil%" &o the
ue(as clan sought the help of their baranga% court but the oronel clan refused to
gi(e up the lot in(ol(ed forcing the former to litigate"
'his led to herein respondents 0ling of i(il ase ;o" +.15AA entitled /e(" @r"
/ustico ue(as, et al", Plainti4s, (" /e(" @r" Iicente oronel, et al", Defendants, 0led
before the /egional 'rial ourt of +uagua, Pampanga, Branch >###, culminating in the
following dispositi(e portion of its decision dated Nul% 1$, 19$?, to witJ Z
EP/M#&& O;&#D/D, *udgment is hereb% rendered in fa(or of the plainti4s
against the defendants"
1: Ordering the defendants to recon(e% to the plainti4s one twel(e 1U12: portion of
the lot in 6uestion co(ered b% ''"
2: Ordering the defendants to pa% litigation e=penses in the amount of P1!,!!!"!!,
attorne%Fs fee in the amount of P5,!!!"!! and P2,!!!"!! appearance fees"
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A: osts against the defendants"E p" 71, /ollo:
8erein petitioners appealed to the ourt of )ppeals, which rendered a decision, with
the following dispositi(e portionJ
E#n (iew of the foregoing, no re(ersible error ha(ing been found, the appeal is
dismissed" 'he decision is aCrmed with the modi0cation that the award of litigation
e=penses is reduced to ight 'housand P$,!!!"!!: Pesos"E
8ence, this petition with three assigned errorsJ Z
#
'he 8onorable ourt of )ppeals committed a serious error of law in not holding that
the action for recon(e%ance based on trust had prescribed andUor is barred b%
laches, because the action was brought more ten 1!: %ears after the repudiation of
the trustG
##
'he 8onorable ourt of )ppeals committed a serious error of law in not holding that
the present action constitutes a collateral attac on the transfer erti0cate of 'itle
which is not allowed b% lawG
###
'he 8onorable ourt of )ppeals committed a serious error of law in awarding
litigation e=penses, attorne%Fs fees and appearance fees, without maing e=press
0ndings of facts and law in (iolation of the rule that such 0ndings must be made to
*ustif% such awards" p" 1, /ollo:
all of which had pre(iousl% been correctl% answered b% the trial court and
respondent ourt of )ppeals"
'he petition is actuall% without merit"
'his case is go(erned b% )rticle 9 of the i(il ode, to witJ Z
E;o prescription shall run in fa(or of a co.owner or co.heir against his co.owners or
co.heirs so long as he e=pressl% or impliedl% recogni<es the co.ownership"E
) careful anal%sis of the instant action actuall% %ields a simple case" /ecords bear
out that herein petitioners merel% stepped into the shoes of their late father
+audencio oronel who co.owned together with the late father of the respondents
and others, the designated communit% of propert% ad*udicated b% their late
ancestor and ascendant Bernarda Da(id >im" 3hen +audencio oronel applied for
the 'orrens 'itle of the propert%, he was merel% the designated administrator, and
at the same time, one of the co.owners along with those enumerated in the 0rst,
second, third, and fourth parts" pp" 5$, ?2, /ollo:"
#n fact, the petitioners late father lied upon swearing in the aforesaid application
that he was the owner in fee simple and sole occupant of the lot in(ol(ed, the truth
of the matter being that all those %ears, it was the late Suerubin ue(as and famil%
who were occup%ing the lot" @or his misrepresentation the 'orrens 'itle was issued
which act should not be tolerated much less rewarded with the awarding of the
whole lot instead of being deser(ingl% punished" ;e(ertheless, the law is still lenient
to petitioners as the onl% EpunishmentE meted out to them despite the
aforementioned fraud of their late ascendant +audencio oronel: is the
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recon(e%ance of 1U12 of the lot in 6uestion plus their being ordered to pa% damages
in the form of P$,!!!"!! litigation fees, P5,!!!"!! attorne%Fs fees, and P2,!!!"!!
appearance fees all dul% pro(en: instead of su4ering a forfeiture of an% part of the
lot the% share in common with respondents >ope<, et al" (s" +on<aga, et al", 1!
&/) 1?7 and araga%.>a%no (s" ), 1AA &/) 71$:"
Suoting from the respondentsF Memorandum dated )ugust 9, 1991 Z
E#n the case of ordo(a et al", (s" ordo(a, et al", >.99??, Nanuar% 1, 195$ this
8onorable ourt ruled Z
'he r:e re<ard!n< pre"cr!p!on canno -e
peaded -eeen he= eCcep hen one he!r
open5 and ad#er"e5 occ:p!e" he proper5or a per!od ":c!en5 on< o en!e h!= o
oner"h!p :nder he a. In oher ord", a"
on< a" oher he!r" acnoed<e he!r
oner"h!p or do no "e :p an5 ad#er"e !e
o he proper5, pre"cr!p!on !" :na#a!a-e.
Pursuant to the foregoing, it is necessar% that who pleads prescription against co.
owners or co.heirs, must be in possession and occup%ing the propert% openl% and
ad(ersel% to the e=clusion of his co.owner or co.heir" But in the instant case,
+audencio oronel and his children who are the herein petitioners are ne(er sic: in
possession of the propert% in 6uestion" )s a matter of fact, it is being occupied then
b% Suerubin ue(as and his famil%, respondents herein, up to the present time"
'hus, in the cases of &antos (s" 8eirs of risostomo, 1 Phil" A2 and Barga%o (s"
ommot ! Phil" $57 this 8onorable ourt held Z
R'he other re6uirement of prescription in fa(or of a co.owner is continuous, open,
peaceful, public ad(erse possession for a period of time re6uired under the law"
= = = =
#n this instant case, it is indubitable that +audencio oronel, the late father of the
herein petitioners, fraudulentl% depri(ed Suerubin ue(as, the late father of the
herein respondents, of his lawful share o(er the land in 6uestion when he solel%
applied for the registration of the whole lot in his name, nowingl% full% well that he
onl% owned One 'wel(e 1U12: share of >ot ;o" 5?97" 'he fraudulent acts
deliberatel% committed b% +audencio oronel directl% caused damage to Suerubin
ue(as and to his heirs" )s such the herein respondents are entitled to reco(er their
share and the damages the% su4ered"E pp"1?2.1?A, /ollo:
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@urther, no one should enrich himself at the e=pense of another" A he co
oner" ho are he e<!!=aehe!r" "ho:d -e
<!#en he!r d:e "hare.
'hus, the appealed decision further statesJ
E#t bears repetition that in registering the lot in 6uestion e=clusi(el% in his name to
the e=clusion of the otherheirs the late +audencio oronel actuall% committed fraud
and misrepresentation with respect to that remaining portion of $A5 s6uare meters
owned b% him and the other co.heirs" #n the partition and grant the other co.
heirs who are entitled to the remaining portion are Bernarda &unglao, /osario
&unglao, the plainti4sheirs of Suerubin ue(as, Nose ue(as, Patria ue(as, esar
ue(as, atalina ue(as, +audencio oronel and &al(ador oronel, Bonifacia Da(id
and 0nall% >ucia Da(id, all twel(e 12: of them" ach of them owns 1U12 portion of
the lot in 6uestion"E Decision dated Nul% 1$, 19$? of /', Br" >###, +uagua,Pampanga, penned b% Nudge )braham )bonas:"
7+EREFORE, the decision of the ourt of )ppeals is hereb% )@@#/MD with costs
against petitioners"
$O ORDERED.
SECOND DIVISION
[ G.R. N. 129505, #)*u)'/ ?1, 2000 ]OCTAVIO S. ALOLES II, PETITIONER, VS. PACITA DE LOS RE=ES
PHILLIPS, RESPONDENT.
[G.R. NO. 1???59. #AN!AR= ?1, 2000]
OCTAVIO S. ALOLES II, PETITIONER, VS. CO!RT O8 APPEALS, HON.
8ERNANDO V. GOROSPE, #R., IN HIS O88ICIAL CAPACIT= AS
PRESIDING #!DGE O8 RTCAATI, <RANCH 61, AND PACITA
PHILLIPS AS THE ALLEGED EBEC!TRIB O8 THE ALLEGED 7ILL O8
THE LATE DR. ART!RO DE SANTOS, RESPONDENTS.
D E C I S I O N
ENDO"A, #.$
hese are petitions for review on certiorari of the decisions of the hirteenth and the 0pecial
@ighth Divisions of the Court of 'ppeals which ruled that petitioner has no right to intervene in
the settlement of the estate of Dr( 'rturo de 0antos( he cases were consolidated considering thatthe& involve the same parties and some of the issues raised are the same(
he facts which gave rise to these two petitions are as follows/
<n %ul& #$, 1995, Dr( 'rturo de 0antos, Ailipino and a resident of "aEati Cit&, filed a petition for
pro.ate of his will1! in the Regional rial Court, Branch 1, "aEati, docEeted as 0p( Proc( o(")4##( n his petition, Dr( De 0antos alleged that he had no compulsor& heirs= that he had
named in his will as sole legatee and devisee the 'rturo de 0antos Aoundation, nc(= that he
disposed .& his will his properties with an appro?imate value of not less than P#,$$$,$$$($$= and
that copies of said will were in the custod& of the named e?ecutri?, private respondent Pacita delos Re&es Phillips( ' cop& of the will#! was anne?ed to the petition for pro.ate(
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<n Ae.ruar& 1, 199, %udge Aernando +( *orospe, %r( of RC)"aEati, Branch 1 issued an
order granting the petition and allowing the will( he order reads/<n $ 'ugust 1995, the Court issued an <rder setting the hearing of the petition on 1#
0eptem.er 1995, at -/$ oclocE in the morning, copies of which were served to 'rturo de
0antos Aoundation, nc( and "s( Pacita de los Re&es Phillips 6<fficers Return, dated $40eptem.er 1995 attached to the records( >hen the case was called for hearing on the date set,
no oppositor appeared nor an& written opposition was ever filed and on motion of petitioner, he
was allowed to adduce his evidence in support of the petition(
Petitioner personall& appeared .efore this Court and was placed on the witness stand and was
directl& e?amined .& the Court through :free wheeling: 2uestions and answers to give this Court
a .asis to determine the state of mind of the petitioner when he e?ecuted the su.ect will( 'fterthe e?amination, the Court is convinced that petitioner is of sound and disposing mind and not
acting on duress, menace and undue influence or fraud, and that petitioner signed his Iast >ill
and estament on his own free and voluntar& will and that he was neither forced nor influenced
.& an& other person in signing it(
Aurthermore, it appears from the petition and the evidence adduced that petitioner in his lifetime,e?ecuted his Iast >ill and estament 6@?hs( :':, :')1:, :')#:, :')4:, :')5: at his residence
situated at 9 Bauhinia corner ntsia 0treets, Aor.es ParE, "aEati Cit&= said Iast >ill and
estament was signed in the presence of his three 6 witnesses, namel&, to wit/ Dr( @lpidio+alencia 6@?hs( :'):, :')7:, :')-:, :')1:, :')1)':, 'tt&( @dward %( Berenguer 6@?hs( :')
:, :'))':, :')9:, :')1$:, :')11:, and 'tt&( +ictoria C( delos Re&es 6@?hs( :')1#:, :')
1:, :')14:, :')17:, :')1-:, who in turn, in the presence of the testator and in the presence
of each and all of the witnesses signed the said Iast >ill and estament and dul& notari3ed .efore otar& Pu.lic 'nna "elissa I( Rosario 6@?h( :')15:= on the actual e?ecution of the Iast
>ill and estament, pictures were taEen 6@?hs( :B: to :B):(
Petitioner has no compulsor& heirs and 'rturo de 0antos Aoundation, nc(, with address at o( 9
Bauhinia corner ntsia 0treets, Aor.es ParE, "aEati Cit& has .een named as sole legatee and
devisee of petitioners properties, real and personal, appro?imatel& valued at not less than P#million, "s( Pacita de los Re&es Phillips was designated as e?ecutor and to serve as such without
a .ond(
Arom the foregoing facts, the Court finds that the petitioner has su.stantiall& esta.lished thematerial allegations contained in his petition( he Iast >ill and estament having .een e?ecuted
and attested as re2uired .& law= that testator at the time of the e?ecution of the will was of sane
mind andFor not mentall& incapa.le to maEe a >ill= nor was it e?ecuted under duress or underthe influence of fear or threats= that it was in writing and e?ecuted in the language Enown and
understood .& the testator dul& su.scri.ed thereof and attested and su.scri.ed .& three 6
credi.le witnesses in the presence of the testator and of another= that the testator and all theattesting witnesses signed the Iast >ill and estament freel& and voluntaril& and that the testator
has intended that the instrument should .e his >ill at the time of affi?ing his signature thereto(
>8@R@A<R@, as pra&ed for .& the petitioner 6testator himself the petition for the allowance of the Iast >ill and estament of 'rturo de 0antos is here.& 'PPR<+@D and 'II<>@D(
0hortl& after the pro.ate of his will, Dr( De 0antos died on Ae.ruar& #, 199(
<n 'pril , 199, petitioner <ctavio 0( "aloles filed a motion for intervention claiming that,
as the onl& child of 'licia de 0antos 6testators sister and <ctavio I( "aloles, 0r(, he was the
sole full).looded nephew and nearest of Ein of Dr( De 0antos( 8e liEewise alleged that he was acreditor of the testator( Petitioner thus pra&ed for the reconsideration of the order allowing the
will and the issuance of letters of administration in his name(
<n the other hand, private respondent Pacita de los Re&es Phillips, the designated e?ecutri? of
the will, filed a motion for the issuance of letters testamentar& with Branch 1( Iater, however,
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private respondent moved to withdraw her motion( his was granted, while petitioner was
re2uired to file a memorandum of authorities in support of his claim that said court 6Branch 1
still had urisdiction to allow his intervention(!
Petitioner filed his memorandum of authorities on "a& 1, 199( <n the other hand, private
respondent, who earlier withdrew her motion for the issuance of letters testamentar& in Branch1, refiled a petition for the same purpose with the Regional rial Court, "aEati, which was
docEeted as 0p( Proc( o( ")44 and assigned to Branch 5(
Gpon private respondents motion, %udge 0alvador '.ad 0antos of Branch 5 issued an order,
dated %une #-, 199, appointing her as special administrator of Dr( De 0antoss estate(
<n %ul& #9, 199, petitioner sought to intervene in 0p( Proc( o( ")44 and to set aside theappointment of private respondent as special administrator( 8e reiterated that he was the sole and
full .looded nephew and nearest of Ein of the testator= that he came to Enow of the e?istence of
0p( Proc( o( ")44 onl& .& accident= that the pro.ate proceedings in 0p( Proc( o( ")4##
.efore Branch 1 of the same court was still pending= that private respondent misdeclared thetrue worth of the testators estate= that private respondent was not fit to .e the special
administrator of the estate= and that petitioner should .e given letters of administration for theestate of Dr( De 0antos(
<n 'ugust #-, 199, %udge '.ad 0antos ordered the transfer of 0p( Proc( o( ")44 to Branch1, on the ground that :it! is related to the case .efore %udge *orospe of RC Branch 1 ( ( (:
t appears, however, that in 0p( Proc( o( ")4##, %udge *orospe had denied on 'ugust #,
199 petitioners motion for intervention( Petitioner .rought this matter to the Court of 'ppealswhich, in a decision4! promulgated on Ae.ruar& 1, 199-, upheld the denial of petitioners
motion for intervention(
"eanwhile, %udge *orospe issued an order, dated 0eptem.er 4, 199, returning the records of
0p( Proc( o( ")44 to Branch 5 on the ground that there was a pending case involving the
@state of Decedent 'rturo de 0antos pending .efore said court( he order reads/'cting on the <RD@R dated #- 'ugust 199 of Branch 5, this Court, transferring this case to
this Branch 1 on the ground that this case is related with a case .efore this Court, let this case
.e returned to Branch 5 with the information that there is no related case involving the @0'@
<A D@C@D@ 'RGR< D@ 0'<0 pending .efore this Branch(
here is, however, a case filed .& 'RGR< D@ 0'<0, as petitioner under Rule 7 of the
Rules of Court for the 'llowance of his will during his lifetime docEeted as 0P( PR<C( <( ")4## which was alread& decided on 1 Ae.ruar& 199 and has .ecome final(
t is noted on records of Case o( ")4## that after it .ecame final, herein Petitioner Pacita delos Re&es Phillips filed a "<< A<R 8@ 00G'C@ <A I@@R0 @0'"@'RK,
which was su.se2uentl& withdrawn after this Court, during the hearing, alread& ruled that the
motion could not .e admitted as the su.ect matter involves a separate case under Rule 7- of the
Rules of Court, and movant withdrew her motion and filed this case 6o( 44(
<ctavio de 0antos "aloles ! filed a "<< A<R @R+@< .efore Case o( ")
4## and this motion was alread& D@@D in the order 6Branch 1 of # 'ugust 199 liEewisefor the same grounds that the matter is for a separate case to .e filed under Rule 7- of the Rules
of Court and cannot .e included in this case filed under Rule 7 of the Rules of Court(
t is further noted that it is a matter of polic& that consolidation of cases must .e approved .& the
Presiding %udges of the affected Branches(
nitiall&, in his decision dated 0eptem.er #, 199,5! %udge '.ad 0antos appeared firm in his position that : ( ( ( it would .e improper for 6Branch 5 to hear and resolve the petition 60p(
Proc( o( ")44,: considering that the pro.ate proceedings were commenced with Branch 1(
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8e thus ordered the transfer of the records .acE to the latter .ranch( 8owever, he later recalled
his decision and tooE cogni3ance of the case :to e?pedite the proceedings(: hus, in his <rder,
dated <cto.er #1, 199, he stated/Considering the refusal of the 8on( Aernando +( *orospe, %r( of Branch 1 to continue hearing
this case notwithstanding the fact that said .ranch .egan the pro.ate proceedings of the estate of
the deceased and must therefore continue to e?ercise its urisdiction to the e?clusion of all others,until the entire estate of the testator had .een partitioned and distri.uted as per <rder dated #
0eptem.er 199, this .ranch 6Regional rial Court Branch 5 shall taEe cogni3ance of the
petition if onl& to e?pedite the proceedings, and under the concept that the Regional rial Courtof "aEati Cit& is .ut one court(
Aurnish a cop& of this order to the <ffice of the Chief ustice and the <ffice of the Court
'dministrator, of the 0upreme Court= the 8on( Aernando +( *orospe, %r(= Pacita De Ios Re&esPhillips, Petitioner= and <ctavio de 0antos "aloles, ntervenor(
<n ovem.er 4, 199, %udge '.ad 0antos granted petitioners motion for intervention( Private
respondent moved for a reconsideration .ut her motion was denied .& the trial court( 0he then
filed a petition for certiorari in the Court of 'ppeals which, on Ae.ruar& #, 1997, rendered adecision! setting aside the trial courts order on the ground that petitioner had not shown an&
right or interest to intervene in 0p( Proc( o( ")44(
8ence, these petitions which raise the following issues/
1( >hether or not the 8onora.le Regional rial Court ) "aEati, Branch 1 has lost urisdiction to proceed with the pro.ate proceedings upon its issuance of an order
allowing the will of Dr( 'rturo de 0antos
#( >hether or not the 8onora.le 6Regional rial Court ) "aEati, Branch 5 ac2uired
urisdiction over the petition for issuance of letters testamentar& filed .& 6private
respondent(
( >hether or not the petitioner, .eing a creditor of the late Dr( 'rturo de 0antos, has a right
to intervene and oppose the petition for issuance of letters testamentar& filed .& therespondent(
4( >hether or not 6private respondent is guilt& of forum shopping in filing her petition for
issuance of letters testamentar& with the Regional rial Court ) "aEati, Branch 5
Enowing full& well that the pro.ate proceedings involving the same testate estate of thedecedent is still pending with the Regional rial Court ) "aEati, Branch 1(
First ( Petitioner contends that the pro.ate proceedings in Branch 1 of RC)"aEati did not
terminate upon the issuance of the order allowing the will of Dr( De 0antos( Citing the cases
of Santiesteban v. Santiesteban7! andTagle v. analo,-! he argues that the proceedings mustcontinue until the estate is full& distri.uted to the lawfulheirs, devisees, and legatees of the
testator, pursuant to Rule 7, S1 of the Rules of Court( Conse2uentl&, petitioner contends that
Branch 5 could not lawfull& act upon private respondents petition for issuance of letterstestamentar&(
he contention has no merit(
n cases for the pro.ate of wills, it is well)settled that the authorit& of the court is limited to
ascertaining the e?trinsic validit& of the will, i(e(, whether the testator, .eing of sound mind,freel& e?ecuted the will in accordance with the formalities prescri.ed .& law(9!
<rdinaril&, pro.ate proceedings are instituted onl& after the death of the testator, so much so that,
after approving and allowing the will, the court proceeds to issue letters testamentar& and settlethe estate of the testator( he cases cited .& petitioner are of such nature( n fact, in most
urisdictions, courts cannot entertain a petition for pro.ate of the will of a living testator under
the principle of am.ulator& nature of wills(1$!
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8owever, 'rt( -- of the Civil Code authori3es the filing of a petition for pro.ate of the will
filed .& the testator himself( t provides/
Civil Code, 'rt( --( o will shall pass either real or personal propert& unless it is proved andallowed in accordance with the Rules of Court(
he testator himself ma&, during his lifetime, petition the court having urisdiction for theallowance of his will( n such case, the pertinent provisions of the Rules of Court for the
allowance of wills after the testators death shall govern(
he 0upreme Court shall formulate such additional Rules of Court as ma& .e necessar& for the
allowance of wills on petition of the testator(
0u.ect to the right of appeal, the allowance of the will, either during the lifetime of the testatoror after his death, shall .e conclusive as to its due e?ecution(
Rule 7, S1 liEewise provides/
0ec( 1 !"o may petition for t"e allo#ance of #ill ( ) 'n& e?ecutor, devisee, or legatee named in a
will, or an& other person interested in the estate, ma&, at an& time after the death of the testator, petition the court having urisdiction to have the will allowed, whether the same .e in his
possession or not, or is lost or destro&ed(
he testator himself ma&, during his lifetime, petition in the court for the allowance of his will(
he rationale for allowing the pro.ate of wills during the lifetime of testator has .een e?plained .& the Code Commission thus/
"ost of the cases that reach the courts involve either the testamentar& capacit& of the testator or
the formalities adopted in the e?ecution of wills( here are relativel& few cases concerning the
intrinsic validit& of testamentar& dispositions( t is far easier for the courts to determine themental condition of a testator during his lifetime than after his death( Araud, intimidation and
undue influence are minimi3ed( Aurthermore, if a will does not compl& with the re2uirements
prescri.ed .& law, the same ma& .e corrected at once( he pro.ate during the testators life,therefore, will lessen the num.er of contest upon wills( <nce a will is pro.ated during the
lifetime of the testator, the onl& 2uestions that ma& remain for the courts to decide after the
testators death will refer to the intrinsic validit& of the testamentar& dispositions( t is possi.le,of course, that even when the testator himself asEs for the allowance of the will, he ma& .e acting
under duress or undue influence, .ut these are rare cases(
'fter a will has .een pro.ated during the lifetime of the testator, it does not necessaril& meanthat he cannot alter or revoEe the same .efore his death( 0hould he maEe a new will, it would
also .e allowa.le on his petition, and if he should die .efore he has had a chance to present such
petition, the ordinar& pro.ate proceeding after the testators death would .e in order(11!
hus, after the allowance of the will of Dr( De 0antos on Ae.ruar& 1, 199, there was nothing
else for Branch 1 to do e?cept to issue a certificate of allowance of the will pursuant to Rule 7,
S1# of the Rules of Court( here is, therefore, no .asis for the ruling of %udge '.ad 0antos ofBranch 5 of RC)"aEati that )
Branch 1 of the Regional rial Court of "aEati having .egun the pro.ate proceedings of the
estate of the deceased, it continues and shall continue to e?ercise said urisdiction to the
e?clusion of all others( t should .e noted that pro.ate proceedings do not cease upon theallowance or disallowance of a will .ut continues up to such time that the entire estate of the
testator had .een partitioned and distri.uted(
he fact that the will was allowed during the lifetime of the testator meant merel& that the
partition and distri.ution of the estate was to .e suspended until the latters death( n other
words, the petitioner, instead of filing a new petition for the issuance of letters testamentar&,should have simpl& filed a manifestation for the same purpose in the pro.ate court(1#!
Petitioner, who defends the order of Branch 5 allowing him to intervene, cites Rule 7, S1
which states/
!"ere estate of deceased persons settled. ) f the decedent is an inha.itant of the Philippines at
the time of his death, whether a citi3en or an alien, his will shall .e proved, or letters of
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administration granted, and his estate settled, in the Court of Airst nstance in the province in
which he resides at the time of his death, and if he is an inha.itant of a foreign countr&, the Court
of Airst nstance of an& province in which he had estate( he court first taEing cogni3ance of thesettlement of the estate of a decedent, shall e?ercise urisdiction to the e?clusion of all other
courts( he urisdiction assumed .& a court, so far as it depends on the place of residence of the
decedent, or of the location of his estate, shall not .e contested in a suit or proceeding, e?cept inan appeal from that court, in the original case, or when the want of urisdiction appears on the
record(
he a.ove rule, however, actuall& provides for the venue of actions for the settlement of theestate of deceased persons( n *arcia Aule v( Court of 'ppeals, it was held/1!
he afore2uoted 0ection 1, Rule 7 6formerl& Rule 75, 0ection 1, specificall& the clause :so far
as it depends on the place of residence of the decedent, or of the location of the state,: is in
realit& a matter of venue, as the caption of the Rule indicates/ :0ettlement of @state of DeceasedPersons( +enue and Processes(: t could not have .een intended to define the urisdiction over the
su.ect matter, .ecause such legal provision is contained in a law of procedure dealing merel&
with procedural matters( Procedure is one thing, urisdiction over the su.ect matter is another(
he power or authorit& of the court over the su.ect matter :e?isted was fi?ed .efore procedurein a given cause .egan(: hat power or authorit& is not altered or changed .& procedure, which
simpl& directs the manner in which the power or authorit& shall .e full& and ustl& e?ercised(here are cases though that if the power is not e?ercised conforma.l& with the provisions of the
procedural law, purel&, the court attempting to e?ercise it loses the power to e?ercise it legall&(
8owever, this does not amount to a loss of urisdiction over the su.ect matter( Rather, it meansthat the court ma& there.& lose urisdiction over the person or that the udgment ma& there.& .e
rendered defective for lacE of something essential to sustain it( he appearance of this provision
in the procedural law at once raises a strong presumption that it has nothing to do with the
urisdiction of the court over the su.ect matter( n plain words, it is ust a matter of method, ofconvenience to the parties(
ndeed, the urisdiction over pro.ate proceedings and settlement of estates with appro?imate
value of over P1$$,$$$($$ 6outside "etro "anila or P#$$,$$$($$ 6in "etro "anila .elongs tothe regional trial courts under B(P( Blg( 1#9, as amended( he different .ranches comprising each
court in one udicial region do not possess urisdictions independent of and incompati.le with
each other(14!
t is noteworth& that, although Rule 7, S1 applies insofar as the venue of the petition for pro.ate
of the will of Dr( De 0antos is concerned, it does not .ar other .ranches of the same court from
taEing cogni3ance of the settlement of the estate of the testator after his death( 's held in theleading case of $acalso v. %amolote/15!
he various .ranches of the Court of Airst nstance of Ce.u under the Aourteenth %udicial
District, are a coordinate and co)e2ual courts, and the totalit& of which is onl& one Court of Airstnstance( he urisdiction is vested in the court, not in the udges( 'nd when a case is filed in one
.ranch, urisdiction over the case does not attach to the .ranch or udge alone, to the e?clusion of
the other .ranches( rial ma& .e held or proceedings continue .& and .efore another .ranch or udge( t is for this reason that 0ection 57 of the %udiciar& 'ct e?pressl& grants to the 0ecretar& of
%ustice, the administrative right or power to apportion the cases among the different .ranches,
.oth for the convenience of the parties and for the coordination of the worE .& the different
.ranches of the same court( he apportionment and distri.ution of cases does not involve a grantor limitation of urisdiction, the urisdiction attaches and continues to .e vested in the Court of
Airst nstance of the province, and the trials ma& .e held .& an& .ranch or udge of the court(
ecessaril&, therefore, Branch 5 of the RC of "aEati Cit& has urisdiction over 0p( Proc( o(")44(
Second ( Petitioner claims the right to intervene in and oppose the petition for issuance of letterstestamentar& filed .& private respondent( 8e argues that, as the nearest ne?t of Ein and creditor of
the testator, his interest in the matter is material and direct( n ruling that petitioner has no right
to intervene in the proceedings .efore Branch 5 of RC)"aEati Cit&, the Court of 'ppeals held/he private respondent herein is not an heir or legatee under the will of the decedent 'rturo de
0antos( either is he a compulsor& heir of the latter( 's the onl& and nearest collateral relative of
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the decedent, he can inherit from the latter onl& in case of intestac&( 0ince the decedent has left a
will which has alread& .een pro.ated and disposes of all his properties the private respondent
can inherit onl& if the said will is annulled( 8is interest in the decedents estate is, therefore, notdirect or immediate(
8is claim to .eing a creditor of the estate is a .elated one, having .een raised for the first timeonl& in his repl& to the opposition to his motion to intervene, and, as far as the records show, not
supported .& evidence(
( ( ( ( !he opposition must come from one with a direct interest in the estate or the will, and the
private respondent has none( "oreover, the ground cited in the private respondents opposition,
that the petitioner has deli.eratel& misdeclared the truth worth and value of the estate, is not
relevant to the 2uestion of her competenc& to act as e?ecutor( 0ection #, Rule 7 of the Rules ofCourt re2uires onl& an allegation of the pro.a.le value and character of the propert& of the
estate( he true value can .e determined later on in the course of the settlement of the estate(1!
Rule 79, S1 provides/
&pposition to issuance of letters testamentary. Simultaneous petition for administration. ) 'n& person interested in a will ma& state in writing the grounds wh& letters testamentar& should not
issue to the persons named therein as e?ecutors, or an& of them, and the court, after hearing uponnotice, shall pass upon the sufficienc& of such grounds( ' petition ma&, at the same time, .e filed
for letters of administration with the will anne?ed(
Gnder this provision, it has .een held that an :interested person: is one who would .e .enefited .& the estate, such as an heir, or one who has a claim against the estate, such as a creditor, and
whose interest is material and direct, not merel& incidental or contingent( 17!
@ven if petitioner is the nearest ne?t of Ein of Dr( De 0antos, he cannot .e considered an :heir: of the testator( t is a fundamental rule of testamentar& succession that one who has
no compulsor& or forced heirs ma& dispose of his entire estate .& will( hus, 'rt( -4# of the Civil
Code provides/<ne who has no compulsor& heirs ma& dispose .& will of all his estate or an& part of it in favor
of an& person having capacit& to succeed(
<ne who has compulsor& heirs ma& dispose of his estate provided he does not contravene the
provisions of this Code with regard to the legitimate of said heirs(
Compulsor& heirs are limited to the testators )
61 Iegitimate children and descendants, with respect to their legitimate parents and ascendants=
6# n default of the foregoing, legitimate parents and ascendants, with respect to their
legitimate children and descendants=
6 he widow or widower=
64 'cEnowledged natural children, and natural children .& legal fiction=
65 <ther illegitimate children referred to in 'rticle #-7 of the Civil Code(1-!
Petitioner, as nephew of the testator, is not a compulsor& heir who ma& have .een preterited in
the testators will(
or does he have an& right to intervene in the settlement proceedings .ased on his allegation thathe is a creditor of the deceased( 0ince the testator instituted or named an e?ecutor in his will, it is
incum.ent upon the Court to respect the desires of the testator( 's we stated in &zaeta v. Pecson/19!
he choice of his e?ecutor is a precious prerogative of a testator, a necessar& concomitant of his
right to dispose of his propert& in the manner he wishes( t is natural that the testator should
desire to appoint one of his confidence, one who can .e trusted to carr& out his wishes in thedisposal of his estate( he curtailment of this right ma& .e considered a curtailment of the right
to dispose(
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<nl& if the appointed e?ecutor is incompetent, refuses the trust, or fails to give .ond ma& the
court appoint other persons to administer the estate(#$! one of these circumstances is present in
this case(
hird ( Petitioner contends that private respondent is guilt& of forum shopping when she filed the
petition for issuance of letters testamentar& 60p( Proc( o( ")44 while the pro.ate proceedings 60p( Proc( o( ")4## were still pending( 'ccording to petitioner, there is identit&
of parties, rights asserted, and reliefs pra&ed for in the two actions which are founded on the
same facts, and a udgment in either will result in res 'udicata in the other(
his contention has no merit( 's stated earlier, the petition for pro.ate was filed .& Dr( De
0antos, the testator, solel& for the purpose of authenticating his will( Gpon the allowance of his
will, the proceedings were terminated(
<n the other hand, the petition for issuance of letters testamentar& was filed .& private
respondent, as e?ecutor of the estate of Dr( De 0antos, for the purpose of securing authorit& from
the Court to administer the estate and put into effect the will of the testator( he estate settlement proceedings commenced .& the filing of the petition terminates upon the distri.ution and
deliver& of the legacies and devises to the persons named in the will( Clearl&, there is no identit& .etween the two petitions, nor was the latter filed during the pendenc& of the former( here was,
conse2uentl&, no forum shopping(
>8@R@A<R@, the petition is D@@D and the decisions of the Court of 'ppeals are here.&
'AAR"@D(
0< <RD@R@D(
SECOND DIVISION[ G.R. N. 1;;099, #u*& 0:, 2011 ]ED!ARDO G. AGTARAP, PETITIONER, VS. SE<ASTIAN AGTARAP,
#OSEPH AGTARAP, TERESA AGTARAP, 7ALTER DE SANTOS, AND
A<ELARDO DAGORO, RESPONDENTS.
[G.R. NO. 1;;192]
SE<ASTIAN G. AGTARAP, PETITIONER, VS. ED!ARDO G. AGTARAP,
#OSEPH AGTARAP, TERESA AGTARAP, 7ALTER DE SANTOS, AND
A<ELARDO DAGORO, RESPONDENTS.
D E C I S I O N
NACH!RA, #.$
Before us are the consolidated petitions for review on certiorari of petitioners 0e.astian *('gtarap 60e.astian 1!and @duardo *( 'gtarap 6@duardo, #! assailing the Decision dated
ovem.er #1, #$$ ! and the Resolution dated "arch #7, #$$7 4! of the Court of 'ppeals 6C'
in C')*(R( C+ o( 791(
he antecedent facts and proceedings))
<n 0eptem.er 15, 1994, @duardo filed with the Regional rial Court 6RC, Branch 114, Pasa&
Cit&, a verified petition for the udicial settlement of the estate of his deceased father %oa2uin
'gtarap 6%oa2uin( t was docEeted as 0pecial Proceedings o( 94)4$55(
he petition alleged that %oa2uin died intestate on ovem.er #1, 194 in Pasa& Cit& without an&
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Enown de.ts or o.ligations( During his lifetime, %oa2uin contracted two marriages, first with
Iucia *arcia 6Iucia, 5! and second with Caridad *arcia 6Caridad( Iucia died on 'pril #4,
19#4( %oa2uin and Iucia had three children))%esus 6died without issue, "ilagros, and %ose6survived .& three children, namel&, *loria, ! %oseph, and eresa 7!( %oa2uin married Caridad
on Ae.ruar& 9, 19#( he& also had three children))@duardo, 0e.astian, and "ercedes 6survived
.& her daughter Cecile( 't the time of his death, %oa2uin left two parcels of land withimprovements in Pasa& Cit&, covered .& ransfer Certificates of itle 6C os( -7)6-#54
and -74)6-#55( %oseph, a grandson of %oa2uin, had .een leasing and improving the said
realties and had .een appropriating for himself P#,$$$($$ per month since 'pril 1994(
@duardo further alleged that there was an imperative need to appoint him as special administrator
to taEe possession and charge of the estate assets and their civil fruits, pending the appointment
of a regular administrator( n addition, he pra&ed that an order .e issued 6a confirming anddeclaring the named compulsor& heirs of %oa2uin who would .e entitled to participate in the
estate= 6. apportioning and allocating unto the named heirs their ali2uot shares in the estate in
accordance with law= and 6c entitling the distri.utees the right to receive and enter into
possession those parts of the estate individuall& awarded to them(
<n 0eptem.er #, 1994, the RC issued an order setting the petition for initial hearing anddirecting @duardo to cause its pu.lication(
<n Decem.er #-, 1994, 0e.astian filed his comment, generall& admitting the allegations in the petition, and conceding to the appointment of @duardo as special administrator(
%oseph, *loria, and eresa filed their answerFopposition( he& alleged that the two su.ect lots
.elong to the conugal partnership of %oa2uin with Iucia, and that, upon Iucia;s death in 'pril19#4, the& .ecame the pro indivisoowners of the su.ect properties( he& said that their
residence was .uilt with the e?clusive mone& of their late father %ose, and the e?penses of the
e?tensions to the house were shouldered .& *loria and eresa, while the restaurant 6"anong;sRestaurant was .uilt with the e?clusive mone& of %oseph and his .usiness partner( he&
opposed the appointment of @duardo as administrator on the following grounds/ 61 he is not
ph&sicall& and mentall& fit to do so= 6# his interest in the lots is minimal= and 6 he does not possess the desire to earn( he& claimed that the .est interests of the estate dictate that %oseph .e
appointed as special or regular administrator(
<n Ae.ruar& 1, 1995, the RC issued a resolution appointing @duardo as regular administratorof %oa2uin;s estate( Conse2uentl&, it issued him letters of administration(
<n 0eptem.er 1, 1995, '.elardo Dagoro filed an answer in intervention, alleging that "ercedesis survived not onl& .& her daughter Cecile, .ut also .& him as her hus.and( 8e also averred that
there is a need to appoint a special administrator to the estate, .ut claimed that @duardo is not the
person .est 2ualified for the tasE(
'fter the parties were given the opportunit& to .e heard and to su.mit their respective proposed
proects of partition, the RC, on <cto.er #, #$$$, issued an <rder of Partition, -! with the
following disposition))
n the light of the filing .& the heirs of their respective proposed proects of partition and the
pa&ment of inheritance ta?es due the estate as earl& as 195, and there .eing no claim in Courtagainst the estate of the deceased, the estate of %<'LG '*'R'P is now conse2uentl& ) ripe
) for distri.ution among the heirs minus the surviving spouse Caridad *arcia who died on'ugust #5, 1999(
Considering that the .ulE of the estate propert& were ac2uired during the e?istence of the second
marriage as shown .& C o( 6-#54 and C o( 6-#55 which showed on its face thatdecedent was married to Caridad *arcia, which fact oppositors failed to contradict .& evidence
other than their negative allegations, the greater part of the estate is perforce accounted .& the
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second marriage and the compulsor& heirs thereunder(
he 'dministrator, @duardo 'gtarap rendered a true and ust accounting of his administrationfrom his date of assumption up to the &ear ending Decem.er 1, 199 per Ainancial and
'ccounting Report dated %une #, 1997 which was approved .& the Court( he accounting report
included the income earned and received for the period and the e?penses incurred in theadministration, sustenance and allowance of the widow( n accordance with said Ainancial and
'ccounting Report which was dul& approved .& this Court in its Resolution dated %ul& #-, 199-
) the deceased %<'LG '*'R'P left real properties consisting of the following/
I'D/
wo lots and two .uildings with one garage 2uarter located at T$$ 'gtarap 0t(, Pasa& Cit&,covered .& ransfer Certificate of itle os( -#54 and -#55 and registered with the Registr&
of Deeds of Pasa& Cit&, "etro "anila, descri.ed as follows/
C <( I< <( 'R@'F0L("( U<'I +'IG@ '"<G
-#54 745)B)1 1,5 s2( m( P5,$$$($$ P,75,$$$($$
-#55 745)B)# 1,1 s2( m( P5,$$$($$ P,55,$$$($$<'I)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) P1,$,$$$($$
BGID*0 'D "PR<+@"@0/
BGID* 6Iot T 745)B)1 )))))))))))))))))))))))))))))))))))))))) P5$,$$$($$
BGID* 6Iot T 745)B)# ))))))))))))))))))))))))))))))))))))))) #$,$$$($$Building mprovements )))))))))))))))))))))))))))))))))))))))))))))))) 97,5$$($$
Restaurant )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) -$,$$$($$
<'I ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) P-47,5$$($$<'I @ ><R8 ))))))))))))))))))))))))))))))))))))))))))))))) P14,177,5$$($$
>8@R@A<R@, the net assets of the estate of the late %<'LG '*'R'P with a total value of
P14,177,5$$($$, together with whatever interest from .anE deposits and all other incomes or
increments thereof accruing after the 'ccounting Report of Decem.er 1, 199, after deducting
therefrom the compensation of the administrator and other e?penses allowed .& the Court, arehere.& ordered distri.uted as follows/
<'I @0'@ ) P14,177,5$$($$
C'RD'D '*'R'P ) of the estate as her conugal share ) P7,$--,75$($$, the other half of
P7,$--,75$($$ ) to .e divided among the
compulsor& heirs as follows/
1 %<0@ 6deceased )P1,1-1,54-($
# "I'*R<0 6deceased )P1,1-1,54-($ "@RC@D@0 6deceased )P1,1-1,54-($
4 0@B'0' )P1,1-1,54-($
5 @DG'RD< )P1,1-1,54-($
C'RD'D )P1,1-1,54-($
he share of "ilagros 'gtarap as compulsor& heir in the amount of P1,1-1,54-($ and who diedin 199 will go to eresa 'gtarap and %oseph 'gtarap, >alter de 0antos and half .rothers
@duardo and 0e.astian 'gtarap in e2ual proportions(
@R@0' '*'R'P ) P#,#91(
%<0@P8 '*'R'P ) P#,#91(
>'I@R D@ 0'<0 ) P#,#91(
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0@B'0' '*'R'P ) P#,#91(
@DG'RD< '*'R'P ) P#,#91(
%ose 'gtarap died in 197( 8is compulsor& heirs are as follows/
C<"PGI0<RK 8@R0 /
1*I<R' ) 6deceased ) represented .&
>alter de 0antos ))
) P#95,4(57
# %<0@P8 '*'R'P ) P#95,4(57
@R@0' '*'R'P ) P#95,4(57
4 PR0CII' '*'R'P ) P#95,4(57
8ence, Priscilla 'gtarap will inherit P#95,4(57(
'dding their share from "ilagros 'gtarap, the following heirs of the first marriage stand to
receive the total amount of/
8@R0 <A 8@ AR0 "'RR'*@/
1 %<0@P8 '*'R'P ) P#,#91( )share from "ilagros 'gtarap
P#95,4(57 ) as
compulsor& heir of
P51,5(# %ose 'gtarap
# @R@0' '*'R'P ) P#,#91( ) share from "ilagros 'gtarap
P#95,4(57 ) as
compulsor& heir of
P51,5(# %ose 'gtarap
>'I@R D@ 0'<0 ) P#,#91( ) share from "ilagros 'gtarap
P#95,4(57 ) as
compulsor& heir of P51,5(# %ose 'gtarap
8@R0 <A 8@ 0@C<D "'RR'*@/
a C'RD'D '*'R'P ) died on 'ugust #5, 1999
P7,$--,75$($$ ) as conugal share
P1,1-1,45-($ ) as
compulsor& heir
otal of P-,#7$,#$-($
. 0@B'0' '*'R'P )
P1,1-1,45-(-
) as compulsor& heir
P #,#91() share from "ilagros
c @DG'RD< '*'R'P )
P1,1-1,45-(-
) as compulsor& heir
P #,#91() share from "ilagros
d "@RC@D@0 ) as represented .& '.elardo Dagoro asthe surviving spouse of a compulsor& heir
P1,1-1,45-(-
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R@"'* 8@R0 <A C'RD'D '*'R'P/
1 0@B'0' '*'R'P
# @DG'RD< '*'R'P
"@RC@D@0 '*'R'P 6Predeceased Caridad 'gtarap
n sum, 0e.astian 'gtarap and @duardo 'gtarap stand to inherit/
0@B'0' ) P4,15,1$4(1$ ) share from Caridad *arcia
P1,1-1,45-($ ) as compulsor& heir
P #,#91( ) share from "ilagros
P5,5##,-54($
@DG'RD< ) P4,15,1$4(1$ ) share from Caridad *arcia
P1,1-1,45-($ ) as
compulsor& heir P #,#91( ) share from "ilagros
P5,5##,-54($
0< <RD@R@D( 9!
@duardo, 0e.astian, and oppositors %oseph and eresa filed their respective motions forreconsideration(
<n 'ugust #7, #$$1, the RC issued a resolution 1$! den&ing the motions for reconsideration of
@duardo and 0e.astian, and granting that of %oseph and eresa( t also declared that the realestate properties .elonged to the conugal partnership of %oa2uin and Iucia( t also directed the
modification of the <cto.er #, #$$$ <rder of Partition to reflect the correct sharing of
the
heirs( 8owever, .efore the RC could issue a new order of partition, @duardo and 0e.astian .oth appealed to the C'(
<n ovem.er #1, #$$, the C' rendered its Decision, the dispositive portion of which reads))
7HERE8ORE, premises considered, the instant appeals are DISISSED for lacE of merit(
he assailed Resolution dated 'ugust #7, #$$1 is A88IRED and pursuant thereto, the su.ect
properties 6Iot o( 745)B)1 C o( -#54! and Iot o( 745)B)# C o( -#55! and theestate of the late %oa2uin 'gtarap are here.& partitioned as follows/
he two 6# properties, together with their improvements, em.raced .& C o( -#54 and C
o( -#55, respectivel&, are first to .e distri.uted among the following/
Iucia "endietta ) of the propert&( But since she is deceased, her share shall .einherited .& %oa2uin, %esus, "ilagros and %ose in e2ual shares(
%oa2uin 'gtarap ) of the propert& and J of the other half of the propert& which pertains to Iucia "endietta;s share(
%esus 'gtarap ) J of Iucia "endietta;s share( But since he is alread& deceased
6and died without issue, his inheritance shall, in turn, .eac2uired .& %oa2uin 'gtarap(
"ilagros 'gtarap ) J of Iucia "endietta;s share( But since she died in 199without issue, 5F- of her inheritance shall .e inherited .&
*loria 6represented .& her hus.and >alter de 0antos and her
daughter 0amantha, %oseph 'gtarap and eresa 'gtarap, 6inrepresentation of "ilagros; .rother %ose 'gtarap and 1F- each
shall .e inherited .& "ercedes 6represented .& her hus.and
'.elardo Dagoro and her daughter Cecile, 0e.astian @duardo,
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all surnamed 'gtarap(
%ose 'gtarap ) J of Iucia "endietta;s share( But since he died in 197, hisinheritance shall .e ac2uired .& his wife Priscilla, and children
*loria 6represented .& her hus.and >alter de 0antos and her
daughter 0amantha, %oseph 'gtarap and eresa in e2ualshares(
hen, %oa2uin 'gtarap;s estate, comprising three)fourths 6F4 of the su.ect properties and itsimprovements, shall .e distri.uted as follows/
Caridad *arcia ) 1F of the estate( But since she died in 1999, her share shall .e
inherited .& her children namel& "ercedes 'gtarap6represented .& her hus.and '.elardo Dagoro and her
daughter Cecilia, 0e.astian 'gtarap and @duardo 'gtarap in
their own right, dividing the inheritance in e2ual shares(
"ilagros 'gtarap ) 1F of the estate( But since she died in 199 without issue, 5F-
of her inheritance shall .e inherited .& *loria 6represented .&her hus.and >alter de 0antos and her daughter 0amantha,
%oseph 'gtarap and eresa 'gtarap, 6in representation of
"ilagros; .rother %ose 'gtarap and 1F- each shall .e inherited .& "ercedes 6represented .& her hus.and '.elardo Dagoro
and her daughter Cecile, 0e.astian and @duardo, all surnamed
'gtarap(
%ose 'gtarap ) 1F of the estate( But since he died in 197, his inheritance
shall .e ac2uired .& his wife Priscilla, and children *loria
6represented .& her hus.and >alter de 0antos and her daughter 0amantha, %oseph 'gtarap and eresa 'gtarap in e2ual shares(
"ercedes 'gtarap ) 1F of the estate( But since she died in 19-4, her inheritanceshall .e ac2uired .& her hus.and '.elardo Dagoro and her
daughter Cecile in e2ual shares(
0e.astian 'gtarap ) 1F of the estate(
@duardo 'gtarap ) 1F of the estate(
SO ORDERED. 11!
'ggrieved, 0e.astian and @duardo filed their respective motions for reconsideration(
n its Resolution dated "arch #7, #$$7, the C' denied .oth motions( 8ence, these petitions
ascri.ing to the appellate court the following errors/
G.R. N. 1;;192
1( ) he Court of 'ppeals erred in not considering the aforementioned important facts 1#! whichalter its Decision=
#( ) he Court of 'ppeals erred in not considering the necessit& of hearing the issue oflegitimac& of respondents as heirs=
( ) he Court of 'ppeals erred in allowing violation of the law and in not appl&ing thedoctrines of collateral attacE, estoppel, and res udicata( 1!
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G.R. N. 1;;099
8@ C<GR <A 'PP@'I0 6A<R"@R >@IA8 D+0< DD < 'CLGR@%GR0DC< <+@R 8@ @0'@ <A "I'*R<0 *( '*'R'P 'D @RR@D
D0RBG* 8@R 8@R'C@ AR<" 8@ @0'@ <A %<'LG '*'R'P
<>80'D* 8@ @M0@C@ <A 8@R I'0 >II 'D @0'"@ +<I'< <A 8@ D<CR@ <A PR@C@D@C@ <A @0'@ PR<C@@D*0 <+@R
@0'@ PR<C@@D*0(
(
8@ C<GR <A 'PP@'I0 6A<R"@R >@IA8 D+0< @RR@D D0"00*
8@ D@C0< 'PP@'I@D AR<" A<R I'C <A "@R 'D 'AAR"* 8@'00'I@D R@0<IG< D'@D 'G*G0 #7, #$$1 <A 8@ I<>@R C<GR 8<ID*
8' 8@ P'RC@I0 <A I'D C<+@R@D BK C <( -#54 'D C 6<( -#55 <A
8@ R@*0RK <A D@@D0 A<R 8@ CK <A P'0'K B@I<* < 8@ C<%G*'IP'R@R08P <A %<'LG '*'R'P "'RR@D < IGC' *'RC' "@D@'
<>80'D* 8@R R@*0R'< GD@R 8@R @M0*
C@RAC'@0 <A I@ '0 R@*0@R@D 8@ '"@ <A %<'LG'*'R'P, CASA(& C&) C'RD'D *'RC'( GD@R @M0* %GR0PRGD@C@,
8@ PR<B'@ C<GR 8'0 < P<>@R < D@@R"@ 8@ <>@R08P <A 8@
PR<P@RK D@0CRB@D 8@0@ C@RAC'@0 <A I@ >8C8 08<GID B@R@0<I+@D ' 'PPR<PR'@ 0@P'R'@ 'C< A<R ' <RR@0 I@ GD@R
8@ I'> 0 @D<>@D >8 C<@0'BIK GI 8'0 B@@ 0@ '0D@
8@ "'@R DC'@D 8@ I'> 0@IA( 14!
's regards his first and second assignments of error, 0e.astian contends that %oseph and eresa
failed to esta.lish .& competent evidence that the& are the legitimate heirs of their father %ose,
and thus of their grandfather %oa2uin( 8e draws attention to the certificate of title 6C o(-$# the& su.mitted, stating that the wife of their father %ose is Presentacion *arcia, while the&
claim that their mother is Priscilla( 8e avers that the marriage contracts proffered .& %oseph and
eresa do not 2ualif& as the .est evidence of %ose;s marriage with Priscilla, inasmuch as the&were not authenticated and formall& offered in evidence( 0e.astian also asseverates that he
actuall& 2uestioned the legitimac& of %oseph and eresa as heirs of %oa2uin in his motion to
e?clude them as heirs, and in his repl& to their opposition to the said motion( 8e further claims
that the failure of '.elardo Dagoro and >alter de 0antos to oppose his motion to e?clude themas heirs had the effect of admitting the allegations therein( 8e points out that his motion was
denied .& the RC without a hearing(
>ith respect to his third assigned error, 0e.astian maintains that the certificates of title of realestate properties su.ect of the controvers& are in the name of %oa2uin 'gtarap, married to
Caridad *arcia, and as such are conclusive proof of their ownership thereof, and thus, the& arenot su.ect to collateral attacE, .ut should .e threshed out in a separate proceeding for that
purpose( 8e liEewise argues that estoppel applies against the children of the first marriage, since
none of them registered an& o.ection to the issuance of the Cs in the name of Caridad and
%oa2uin onl&( 8e avers that the estate must have alread& .een settled in light of the pa&ment ofthe estate and inheritance ta? .& "ilagros, %oseph, and eresa, resulting to the issuance of C
o( -9#5 in "ilagros; name and of C o( -$# in the names of "ilagros and %ose( 8e also
alleges that res 'udicata is applica.le as the court order directing the deletion of the name ofIucia, and replacing it with the name of Caridad, in the Cs had long .ecome final and
e?ecutor&(
n his own petition, with respect to his first assignment of error, @duardo alleges that the C'
erroneousl& settled, together with the settlement of the estate of %oa2uin, the estates of Iucia,
%esus, %ose, "ercedes, *loria, and "ilagros, in contravention of the principle of settling onl& oneestate in one proceeding( 8e particularl& 2uestions the distri.ution of the estate of "ilagros in
the intestate proceedings despite the fact that a proceeding was conducted in another court for the
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pro.ate of the will of "ilagros, .e2ueathing all to @duardo whatever share that she would
receive from %oa2uin;s estate( 8e states that this violated the rule on precedence of testate over
intestate proceedings(
'nent his second assignment of error, @duardo contends that the C' gravel& erred when it
affirmed that the .ulE of the realties su.ect of this case .elong to the first marriage of %oa2uin toIucia, notwithstanding that the certificates of title were registered in the name of %oa2uin
'gtarap casado con 6:married to: Caridad *arcia( 'ccording to him, the RC, acting as an
intestate court with limited urisdiction, was not vested with the power and authorit& todetermine 2uestions of ownership, which properl& .elongs to another court with general
urisdiction(
he !ourt"s #uling
's to 0e.astian;s and @duardo;s common issue on the ownership of the su.ect real properties,
we hold that the RC, as an intestate court, had urisdiction to resolve the same(
he general rule is that the urisdiction of the trial court, either as a pro.ate or an intestate court,
relates onl& to matters having to do with the pro.ate of the will andFor settlement of the estate ofdeceased persons, .ut does not e?tend to the determination of 2uestions of ownership that arise
during the proceedings( 15! he patent rationale for this rule is that such court merel& e?ercises
special and limited urisdiction( 1! 's held in several cases, 17! a pro.ate court or one in chargeof estate proceedings, whether testate or intestate, cannot adudicate or determine title to
properties claimed to .e a part of the estate and which are claimed to .elong to outside parties,
not .& virtue of an& right of inheritance from the deceased .ut .& title adverse to that of the
deceased and his estate( 'll that the said court could do as regards said properties is to determinewhether or not the& should .e included in the inventor& of properties to .e administered .& the
administrator( f there is no dispute, there poses no pro.lem, .ut if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinar& action .efore a courte?ercising general urisdiction for a final determination of the conflicting claims of title(
8owever, this general rule is su.ect to e?ceptions as ustified .& e?pedienc& and convenience(
Airst, the pro.ate court ma& provisionall& pass upon in an intestate or a testate proceeding the
2uestion of inclusion in, or e?clusion from, the inventor& of a piece of propert& without preudice
to the final determination of ownership in a separate action( 1-! 0econd, if the interested partiesare all heirs to the estate, or the 2uestion is one of collation or advancement, or the parties
consent to the assumption of urisdiction .& the pro.ate court and the rights of third parties are
not impaired, then the pro.ate court is competent to resolve issues on ownership( 19! +eril&, its
urisdiction e?tends to matters incidental or collateral to the settlement and distri.ution of theestate, such as the determination of the status of each heir and whether the propert& in the
inventor& is conugal or e?clusive propert& of the deceased spouse( #$!
>e hold that the general rule does not appl& to the instant case considering that the parties are
all heirs of %oa2uin and that no rights of third parties will .e impaired .& the resolution of the
ownership issue( "ore importantl&, the determination of whether the su.ect properties areconugal is .ut collateral to the pro.ate court;s urisdiction to settle the estate of %oa2uin(
t should .e remem.ered that when @duardo filed his verified petition for udicial settlement of%oa2uin;s estate, he alleged that the su.ect properties were owned .& %oa2uin and Caridad since
the Cs state that the lots were registered in the name of %oa2uin 'gtarap, married to Caridad*arcia( 8e also admitted in his petition that %oa2uin, prior to contracting marriage with Caridad,contracted a first marriage with Iucia( <ppositors to the petition, %oseph and eresa, however,
were a.le to present proof .efore the RC that C os( -#54 and -#55 were derived from a
mother title, C o( 5#9, dated "arch 17, 19#$, in the name of *%A)CISC& +ICT&%
$A%),S &A/0I) A1TA%AP2 el primero casado con ,milia uscat2 y el Segundo con 3ucia1arcia endietta 6AR'C0C< +C<R B'R@0 y %<'LG '*'R'P, the first married
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to @milia "uscat, and the second married to Iucia *arcia "endietta( #1! >hen C o( 5#9
was divided .etween Arancisco Barnes and %oa2uin 'gtarap, C o( 1$-4, in the name of
%oa2uin 'gtarap, married to Iucia *arcia "endietta, was issued for a parcel of land, identified asIot o( 745 of the Cadastral 0urve& of Pasa&, Cadastral Case o( #, *(I(R(<( Cadastral Record
o( 1-, consisting of -,-7# s2uare meters( his same lot was covered .& C o( 5577
6#1-4##!
issued on 'pril #, 197, also in the name of %oa2uin 'gtarap, married to Iucia*arcia "endietta(
he findings of the RC and the C' show that Iucia died on 'pril #4, 19#4, and su.se2uentl&,on Ae.ruar& 9, 19#, %oa2uin married Caridad( t is worth& to note that C o( 5577 6#1-4
contained an annotation, which reads))
'p)49 ) <'/ 0e ha enmendado el presente certificado de titulo, tal como aparece,tanchando las pala.ras :con Iucia *arcia "endiett!a: & poniendo en su lugar, entre lineas & en
tinta encarnada, las pala.ras :en segundas nupcias con Caridad *arcia:, en complimiento de un
orden de fecha #- de a.ril de 197, dictada por el 8on( 0i?to de la Costa, ue3 del %u3gado dePrimera nstancia de Ri3al, en el e?pediente cadastal o( #, *(I(R(<( Cad( Record o( 1-=
copia de cual orden has sido presentada con el o( 49 del Ii.ro Diario, omo ($ &, archivada
en el Iegao )o( #1-4(
Pasig, Ri3al, a #9 a.ril de 197( #!
hus, per the order dated 'pril #-, 197 of 8on( 0i?to de la Costa, presiding udge of the Court
of Airst nstance of Ri3al, the phrase con 3ucia 1arcia endiet4t5a was crossed out and replaced
.& en segundas nuptias con Caridad 1arcia, referring to the second marriage of %oa2uin to
Caridad( t cannot .e gainsaid, therefore, that prior to the replacement of Caridad;s name in C o( #1-4, Iucia, upon her demise, alread& left, as her estate, one)half 61F# conugal share in
C o( #1-4( Iucia;s share in the propert& covered .& the said C was carried over to the
properties covered .& the certificates of title derivative of C o( #1-4, now C os( -#54and -#55( 'nd as found .& .oth the RC and the C', Iucia was survived .&
her compulsor& heirs ) %oa2uin, %esus, "ilagros, and %ose(
0ection #, Rule 7 of the Rules of Court provides that when the marriage is dissolved .& the
death of the hus.and or the wife, the communit& propert& shall .e inventoried, administered, and
li2uidated, and the de.ts thereof paid= in the testate or intestate proceedings of the deceased
spouse, and if .oth spouses have died, the conugal partnership shall .e li2uidated in the testateor intestate proceedings of either( hus, the RC had urisdiction to determine whether the
properties are conugal as it had to li2uidate the conugal partnership to determine the estate of
the decedent( n fact, should %oseph and eresa institute a settlement proceeding for the intestate
estate of Iucia, the same should .e consolidated with the settlement proceedings of %oa2uin, .eing Iucia;s spouse( #4! 'ccordingl&, the C' correctl& distri.uted the estate of Iucia, with
respect to the properties covered .& C os( -#54 and -#55 su.ect of this case, toher compulsor& heirs(
herefore, in light of the foregoing evidence, as correctl& found .& the RC and the C', the
claim of 0e.astian and @duardo that C os( -#54 and -#55 conclusivel& show that theowners of the properties covered therein were %oa2uin and Caridad .& virtue of the registration
in the name of %oa2uin 'gtarap casado con 6married to Caridad *arcia, deserves scant
consideration( his cannot .e said to .e a collateral attacE on the said Cs( ndeed, simple possession of a certificate of title is not necessaril& conclusive of a holder;s true ownership of
propert&( #5! ' certificate of title under the orrens s&stem aims to protect dominion= it cannot .eused as an instrument for the deprivation of ownership( #! hus, the fact that the properties wereregistered in the name of %oa2uin 'gtarap, married to Caridad *arcia, is not sufficient proof that
the properties were ac2uired during the spouses; coverture( #7! he phrase :married to Caridad
*arcia: in the Cs is merel& descriptive of the civil status of %oa2uin as the registered owner,and does not necessaril& prove that the realties are their conugal properties( #-!
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either can 0e.astian;s claim that %oa2uin;s estate could have alread& .een settled in 195 after
the pa&ment of the inheritance ta? .e upheld( Pa&ment of the inheritance ta?, per se, does not
settle the estate of a deceased person( 's provided in 0ection 1, Rule 9$ of the Rules of Court))
0@C< 1( !"en order for distribution of residue made. )) >hen the de.ts, funeral charges,
and e?penses of administration, the allowance to the widow, and inheritance ta?, if an&,chargea.le to the estate in accordance with law, have .een paid, the court, on the application of
the e?ecutor or administrator, or of a person interested in the estate, and after hearing upon
notice, shall assign the residue of the estate to the persons entitled to the same, naming them andthe proportions, or parts, to which each is entitled, and such persons ma& demand and recover
their respective shares from the e?ecutor or administrator, or an& other person having the same in
his possession( f there is a controvers& .efore the court as to who are the lawful heirs of the
deceased person or as to the distri.utive share to which each person is entitled under the law, thecontrovers& shall .e heard and decided as in ordinar& cases(
o distri.ution shall .e allowed until the pa&ment of the o.ligations a.ove mentioned has .eenmade or provided for, unless the distri.utees, or an& of them, give a .ond, in a sum to .e fi?ed .&
the court, conditioned for the pa&ment of said o.ligations within such time as the court directs(
hus, an estate is settled and distri.uted among the heirs onl& after the pa&ment of the de.ts of
the estate, funeral charges, e?penses of administration, allowance to the widow, and inheritance
ta?( he records of these cases do not show that these were complied with in 195(
's regards the issue raised .& 0e.astian on the legitimac& of %oseph and eresa, suffice it to sa&
that .oth the RC and the C' found them to .e the legitimate children of %ose( he RC found
that 0e.astian did not present clear and convincing evidence to support his averments in hismotion to e?clude them as heirs of %oa2uin, aside from his negative allegations( he RC also
noted the fact of %oseph and eresa .eing the children of %ose was never 2uestioned .& 0e.astian
and @duardo, and the latter two even admitted this in their petitions, as well as in the stipulationof facts in the 'ugust #1, 1995 hearing( #9! Aurthermore, the C' affirmed this finding of fact in
its ovem.er #1, #$$ Decision( $!
'lso, 0e.astian;s insistence that '.elardo Dagoro and >alter de 0antos are not heirs to the estate
of %oa2uin cannot .e sustained( Per its <cto.er #, #$$$ <rder of Partition, the RC found that
*loria 'gtarap de 0antos died on "a& 4, 1995, and was later su.stituted in the proceedings
.elow .& her hus.and >alter de 0antos( *loria .egot a daughter with >alter de 0antos,*eorgina 0amantha de 0antos( he RC liEewise noted that, on 0eptem.er 1, 1995, '.elardo
Dagoro filed a motion for leave of court to intervene, alleging that he is the surviving spouse of
"ercedes 'gtarap and the father of Cecilia 'gtarap Dagoro, and his answer in intervention( he
RC later granted the motion, there.& admitting his answer on <cto.er 1-, 1995( 1! he C'also noted that, during the hearing of the motion to intervene on <cto.er 1-, 1995, 0e.astian and
@duardo did not interpose an& o.ection when the intervention was su.mitted to the RC forresolution( #!
ndeed, this Court is not a trier of facts, and there appears no compelling reason to hold that .oth
courts erred in ruling that %oseph, eresa, >alter de 0antos, and '.elardo Dagoro rightfull& participated in the estate of %oa2uin( t was incum.ent upon 0e.astian to present competent
evidence to refute his and @duardo;s admissions that %oseph and eresa were heirs of %ose, and
thus rightful heirs of %oa2uin, and to timel& o.ect to the participation of >alter de 0antos and'.elardo Dagoro( Gnfortunatel&, 0e.astian failed to do so( evertheless, >alter de 0antos and
'.elardo Dagoro had the right to participate in the estate in representation of the%oa2uin;s compulsor& heirs, *loria and "ercedes, respectivel&( !
his Court also differs from @duardo;s asseveration that the C' erred in settling, together with
%oa2uin;s estate, the respective estates of Iucia, %esus, %ose, "ercedes, and *loria( ' perusal ofthe ovem.er #1, #$$ C' Decision would readil& show that the disposition of the properties
related onl& to the settlement of the estate of %oa2uin( Pursuant to 0ection 1, Rule 9$ of the Rules
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of Court, as cited a.ove, the RC was specificall& granted urisdiction to determine who are the
lawful heirs of %oa2uin, as well as their respective shares after the pa&ment of the o.ligations of
the estate, as enumerated in the said provision( he inclusion of Iucia, %esus, %ose, "ercedes,and *loria in the distri.ution of the shares was merel& a necessar& conse2uence of the settlement
of %oa2uin;s estate, the& .eing his legal heirs(
8owever, we agree with @duardo;s position that the C' erred in distri.uting %oa2uin;s estate
pertinent to the share allotted in favor of "ilagros( @duardo was a.le to show that a separate
proceeding was instituted for the pro.ate of the will allegedl& e?ecuted .& "ilagros .efore theRC, Branch 1$-, Pasa& Cit&( 4! >hile there has .een no showing that the alleged will of
"ilagros, .e2ueathing all of her share from %oa2uin;s estate in favor of @duardo, has alread&
.een pro.ated and approved, prudence dictates that this Court refrain from distri.uting "ilagros;
share in %oa2uin;s estate(
t is also worth& to mention that 0e.astian died on %anuar& 15, #$1$, per his Certificate of
Death( 5! 8e is survived .& his wife eresita B( 'gtarap 6eresita and his children %oa2uin
%ulian B( 'gtarap 6%oa2uin %ulian and 'na "a( 'gtarap Panlilio 6'na "a((
8enceforth, in light of the foregoing, the assailed ovem.er #1, #$$ Decision and the "arch#7, #$$7 Resolution of the C' should .e affirmed with modifications such that the share of
"ilagros shall not &et .e distri.uted until after the final determination of the pro.ate of her
purported will, and that 0e.astian shall .e represented .& hiscompulsor& heirs(
7HERE8ORE, the petition in *(R( o( 17719# is DENIED for lacE of merit, while the
petition in *(R( o( 177$99 is PARTIALL= GRANTED, such that the Decision dated
ovem.er #1, #$$ and the Resolution dated "arch #7, #$$7 of the Court of 'ppealsare A88IRED with the following ODI8ICATIONS/ that the share awarded in favor of
"ilagros 'gtarap shall not .e distri.uted until the final determination of the pro.ate of her will,
and that petitioner 0e.astian *( 'gtarap, in view of his demise on %anuar& 15, #$1$, shall .erepresented .& his wife eresita B( 'gtarap and his children %oa2uin %ulian B( 'gtarap and 'na
"a( 'gtarap Panlilio(
hese cases are here.& remanded to the Regional rial Court, Branch 114, Pasa& Cit&, for further
proceedings in the settlement of the estate of %oa2uin 'gtarap( o pronouncement as to costs(
SO ORDERED(
8IRST DIVISION
[ G.R. N. 6?6:0, )'(% 2?, 1990 ]#ACO<A T. PATERNO, TOAS T. PATERNO, AND ARIA L!CIA
PATERNO, PETITIONERS, VS. <EATRI" PATERNO, <ERNARDO
PATERNO AND THE INTEREDIATE APPELLATE CO!RT,
RESPONDENTS.
D E C I S I O N
NARVASA, #.$
n the %uvenile and Domestic Relations Court of "anila, now defunct, there was filed .& Aeli3a<rihuela, as guardian ad litem of her children, Beatri3 Paterno and Bernardo Paterno, a
complaint1! pra&ing that the latter .e declared illegitimate 6adulterous children of, and
conse2uentl& entitled to inherit from, the deceased %ose P( Paterno( 'ccording to Aeli3a, Beatri3and Bernardo had .een .egotten of her illicit liaison with %ose P( Paterno, a married man, and
should thus .e counted among the latter;s
compulsor& heirs in accordance with 'rticle --7[2] of
the Civil Code( Aeli3a pra&ed in her complaint for/ 61 the invalidation of the e?traudicial partition of %ose Paterno;s estate e?ecuted .& his widow, %aco.a ( Paterno, and his legitimate
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children, Iuis ( Paterno, +icente ( Paterno, omas ( Paterno, 0usana ( Paterno and "aria
Iucia ( Paterno, said partition having deprived the minor plaintiffs of their legitimes= 6# the
e?tension to Beatri3 and Bernardo of support= and 6 the pa&ment to them of actual, moral ande?emplar& damages, as well as attorne&;s fees([3]
he answer with counterclaim filed for the widow and her children aforenamed inter
alia asserted as affirmative defense that the :plaintiffs are guilt& of laches as the& should havee?ercised their right of action, if an&, against the deceased Dr( %ose P( Paterno during his lifetime
in order to give the latter an opportunit& to admit or den& the same, death having sealed his
lips(:[4]
t appears that :upon defendants; filing their answer, the 8onora.le ( 'lmeda)Iope3 started
reception of plaintiffs; evidence( 8owever, on %anuar& 11, 194, prior to a scheduled
continuation of the hearing, the 8onora.le %udge C( %uliano)'grava who QQ 6succeeded %udge
'lmeda)Iope3 re2uired the parties to show cause wh& the case should not .e dismissed for lacEof urisdiction( <n 'pril 4, 194, and after .oth parties had su.mitted their respective
memoranda, the court finall& ordered the dismissal of the case, for the reason that where an
illegitimate child seeEs to participate in the estate of the deceased putative father, the action
.ecomes essentiall& one for recover& of plaintiffs supposed share in the estate and the 2uestionof paternit& .ecomes merel& an incident thereto( 's the main issue falls within the urisdiction
of the ordinar& courts, the incidental 2uestion of paternit& should also .e resolved therein, if thesplitting of causes of action is to .e avoided(QQ(:[5]
he plaintiffs perfected an appeal to this Court, which was docEeted as *(R( o( I)#$$( he
appeal resulted in the reversal of the challenged order( n a decision rendered on %une $, 197,this Court set aside :the order of dismissal appealed from, insofar as it affects the issue of
paternit&,: and returned the case :to the %uvenile and Domestic Relations Court for determination
of that particular issue(: 0aid the Court/ [6]
:QQ he issue to .e determined QQ is which of plaintiffs; claim 6filiation or participation in thedecedent;s estate! constitutes the main cause and which is merel& an incident thereto(
:QQ:QQ Clearl& .efore the claim to participate in the estate ma& .e prosecuted, plaintiffs right to
succeed must first .e esta.lished( Differentl& stated, plaintiffs; main action is that for recognition
of their status as illegitimate children of the deceased, upon which the right to share in thehereditar& estate of the putative father would rest( 6his matter is without dou.t within the
urisdiction of the %DRC(
:n granting to the %uvenile and Domestic Relations Court Vsuch incidental powers generall&
possessed .& the court of first instance, the law QQ 6however could not have intended to confer
on this special tri.unal urisdiction over all su.ect matter cogni3a.le .& the ordinar& court of
first instance( he term ;incidental powers; must refer to the authorit& to issue such orders orwrits and taEe such measures as might .e necessar& to carr& out the functions of the %uvenile and
Domestic Relations Court( 68ence, the matter of the participation in the estate of the decedent isnot within its competence= it is within the urisdiction of the court of first instance(
he a.ove conclusion will not constitute a violation of the rule against splitting of cause of
action( he prohi.ition provided in the Rules of Court is against the institution of more than onesuit for a single cause of action( 60ec( , Rule # QQ ( But, as alleged in the complaint, the .ases
for plaintiffs; various claims would not .e the same( B& the creation of the %uvenile and
Domestic Relations Court, with its e?clusive urisdiction over cases involving paternit& andacEnowledgment, recognition of children and recover& of hereditar& shares can no longer .e
properl& oined as cause of action, since each lies within the urisdiction of a different tri.unal(
he case having .een thereafter remanded to and tried .& the %uvenile and Domestic RelationsCourt 6%DRC, that Court rendered udgment on 'pril 14, 197$ dismissing the complaint on the
ground of prescription, its view .eing that the action for
compulsor& recognition should have
.een commenced within the lifetime of the alleged father, and on the ground that plaintiffs hadfailed to present :clear, strong and convincing: evidence of their filiation([7]Dismissed as well was
the defendants; counterclaim( he plaintiffs elevated the case to the Court of 'ppeals,[8]where
.asicall&, the& imputed to the %DRC two 6# errors,[9] to wit/
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1 holding that the& 6plaintiffs had lost whatever right of action the& might otherwise have had,
when the& failed to file the corresponding action during the lifetime of their putative parent, %ose
P( Paterno= and# ruling that plaintiffs; evidence was in part incompetent and in an& event did not constitute
:clear, strong and convincing proof: of plaintiffs; filiation(
he Court of 'ppeals reversed the udgment of the %DRC( n a decision promulgated on 'ugust1, 19-#,[10] said Court, after an e?tensive review of the evidence adduced .& the parties .efore
the %DRC )) o.serving in this connection that as against the plaintiffs; 6illegitimate children;s
:witnesses and documentar& evidence, "rs( %aco.a Paterno, widow of the decedent, stood aloneto den& the claim of the plaintiffs)appellants: )) reached the following conclusions/
:t is true there appear to .e certain inconsistencies in plaintiffs; evidence as pointed out .& the
trial court, .ut in the final anal&sis, these inconsistencies are onl& minor matters which, to <ur
mind, instead strengthened the entire plaintiffs; evidence( 8ad these witnesses .een ver&ela.orate, thorough and precise, >e would have entertain6ed some dou.ts( n fact, the evidence
is so convincing, clear, positive that >e noted that, after trial and assessment of the evidence, the
trial court was constrained, perhaps, in consonance with its conscience, to admit that ;in
evaluating plaintiffs; evidence QQ the court cannot definitel& state that their 6plaintiffs; claim isfalse(; he trial court was convinced that plaintiffs)appellants Beatri3 and Bernando and +irginia
are the children of Dr( %ose P( Paterno, .ut .eing of the opinion that spurious children;s right ofaction to compel recognition as such is lost forever upon the demise of the putative father, found
against the plaintiffs(
:>e hold, after going over the records, that there are sufficient evidence, clear and convincing,esta.lishing the filiation of plaintiffs)appellants Beatri3 and Bernardo Paterno as spurious
children of Dr( %ose P( Paterno= that %ose P( Paterno died when the& were still minors and the
present action for the esta.lishment of their filiation to Dr( %ose P( Paterno was filed .efore the&reach6ed the age of maorit& and within the period of limitation, within which cases of this
nature should .e instituted to esta.lish paternit& and filiation([11]
:>8@R@A<R@, finding the Court a quo in error, the decision appealed from is here.&R@+@R0@D and another one entered, declaring plaintiffs)appellants Beatri3 and Bernardo
Paterno illegitimate 6spurious children of Dr( %ose P( Paterno, deceased, .egotten out of wedlocE
with Aelisa <rihuela 6who is herein appointed guardian ad litem conceived and .orn when thedeceased was coha.iting with the latter, 6and having eno&ed and continued possessing the
status as children of the deceased Dr( %ose P( Paterno(
:>e are not in a position to pass on, much less, grant the other pra&ers of the appellantscontained in their .rief e?cept as to costs, inasmuch as the directive of <ur 0upreme Court in the
case of Paterno, et al( vs( Paterno, et al(, I)#$$, %une $, 194, $#$ 0CR' 5-5, returning this
case to the court of origin, specificall& states/
;>8@R@A<R@, the order of dismissal appealed from, insofar as it affects the issue of paternit&is here.& set aside, and the case returned to the %uvenile and Domestic Relations Court for
determination of that particular issue(;:"rs( %aco.a ( Paterno, the widow, and her legitimate children have appealed to this Court
on certiorari( n these proceedings, the& claim that the Court of 'ppeals erred in )
1 holding the evidence of the eno&ment .& Beatri3 and Bernardo Paterno of the status ofchildren of the deceased %ose Paterno, to .e strong, clear and convincing=
# failing to taEe account of )
a the suspicious nature of the alleged letter of the decedent to Aeli3a, mother of Beatri3 and
Bernardo 6@?h( *, it .eing in @nglish although Aeli3a was :not ade2uatel& conversant in@nglish=:
. the suspect character of Beatri3;s alleged .aptismal certificate in that it :does not even statethe given name: 6@?h( B=
c the lacE of specific evidence of coha.itation .etween the decedent and Aeli3a during the
periods of conception of their alleged children=
d the :contradictor& and conflicting evidence on direct acts .& petitioner vis-a-vis the status of
private respondents=:
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failing to appl& the doctrine in Cleme6a v. Cleme6a2 #4 0CR' 619-, 7#$, to the effect that
dou.ts in paternit& suits are resolved against the claimant(
0uch 2uestions as whether certain items of evidence should .e accorded pro.ative value orweight, or reected as fee.le or spurious, or whether or not the proofs on one side or the other are
clear and convincing and ade2uate to esta.lish a proposition in issue, are without dou.t 2uestions
of fact([12]
>hether or not the .od& of proofs presented .& a part&, weighed and anal&3ed inrelation to contrar& evidence su.mitted .& adverse part&, ma& .e said to .e strong, clear and
convincing= whether or not certain documents presented .& one side should .e accorded full faith
and credit in the face of protests as to their spurious character .& the other side= whether or notinconsistencies in the .od& of proofs of a part& are of such gravit& as to ustif& refusing to give
said proofs weight )) all these are issues of fact( Luestions liEe these are not reviewa.le .& this
Court which, as a rule, confines its review of cases decided .& the Court of 'ppeals onl& to
2uestions of law raised in the petition and therein distinctl& set forth([13] But it is 2uestions of thist&pe which the petitioners have precisel& su.mitted for resolution to this Court( herefore, in
accordance with esta.lished rule and practice, those issues will not .e considered .& this Court,
the resolutions thereon .& the Court of 'ppeals .eing final([14]
t ma& however .e noted in passing that, as recapitulated in painstaEing detail in the Decision ofthe Court of 'ppeals,[15] the dovetailing and mutuall& corro.orative testimon& of the private
respondents, their mother Aelisa <rihuela, and eresa "iranda and 'nselmo "acapinlac, the lateDr( %ose P( Paterno;s retainers to whose care and compan& he entrusted his illegitimate famil&,
does indeed compel acceptance of the fact that from their .irth until Dr( Paterno;s death, said
respondents were treated as, and eno&ed the status of, his children .& .lood(he gist of that testimon& is to the effect that Dr( Paterno had .orne the e?penses of the .irth and
.aptism of said children, who were .orn in the same &ear 619- within eleven months of each
other= that in that &ear, after the .irth of the first child, Beatri3, mother and daughter had moved
from '( Iuna in 0an %uan, Ri3al, to Ru.i 0treet in 0an 'ndres BuEid, "anila, where the secondchild, Bernardo, and a third, +irginia, who died at four, were .orn= that in 194$, the famil&
moved to a house in '( IaEe 0treet in 0an %uan, Ri3al purchased .& Dr( Paterno= that in .oth
places, the& had lived with and .een maintained .& Dr( Paterno in the compan& of the "irandaand "acapinlac families= that shortl& .efore the out.reaE of the war in Decem.er 1941, Dr(
Paterno left for 8ongEong where he sta&ed until war;s end= that in his a.sence, mother and
children received monthl& support from Don +icente "adrigal at the instance of Dr( Paterno whowas "adrigal;s .rother)in)law= that for sometime after Ii.eration, the& lived in the "adrigal
compound in *en( Iuna, Paco, "anila= that when Dr( Paterno thereafter returned to the
Philippines and until he again left for 8ongEong, he lived with mother and children, first in
'ntipolo, Ri3al and later in "arilao, Bulacan= that when Aelisa decided to get married )) thiswhile Dr( Paterno was in 8ongEong on his second soourn there )) she sought and received the
forgiveness of his wife, DoOa %aco.a, who even consented to act as sponsor at her wedding= that
when Dr( Paterno returned once more from 8ongEong, to .e assigned to the "adrigal cement plant in Binangonan, Ri3al, he made it a point to see that Beatri3 and Bernardo went or were
.rought to visit him, especiall& during weeEends, and on these occasions, he and the children
slept in his room in the same .ed, he would tell them to come or send word to him for an&thingthe& might need, and would give them mone& when the& left= that Beatri3, then a.out thirteen or
fourteen, was .eing sent to school in 0ta( sa.el College .& Dr( Paterno, who did the same for
Bernardo, who was enrolled at the Gniversit& of 0anto omas= that these reunions continued until
he fell ill and had to Eeep to his house in "endo3a 0t(, Luiapo, "anila, and DoOa %aco.a for.adethe children to see him on the e?cuse that he might suffer a relapse= that on the some five
occasions that the& tried to see Dr( Paterno in his residence while he la& sicE, the children were
given mone& .& DoOa %aco.a upon leaving= and that after his death and .urial, DoOa %aco.a gavethem mone& for their tuition(
8ence, even if, against all applica.le law and precedent, this Court were minded to su.stitute its
own assessment of such testimon&, as supported .& the documents also presented .& the privaterespondents, for that of the Court of 'ppeals, it would reach no different conclusion( rue,
certain inconsistencies ma& .e noted in the testimon& given .& the witnesses for the private
respondents, .ut it is on the whole unanimous and consistent as to the reall& crucial fact that Dr(Paterno treated and acted towards said respondents, from their .irth onward, in a manner onl& a
real father would and leaving little dou.t that he recogni3ed and considered them as in truth his
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children( he simple denials of the widow, petitioner %aco.a ( Paterno, do not suffice to refute
such proof(
he action for recognition 6or to esta.lish filiation having .een timel& filed )) having .eeninstituted after the demise of the putative parent and .efore the attainment of the age of maorit&
of the children concerned )) and the ground invoEed therefor having .een satisfactoril& proven,[16]
the Court of 'ppeals committed no error in declaring and confirming the status of the privaterespondents as illegitimate children of the late Dr( %ose P( Paterno(
7HERE8ORE, the appealed udgment of the Court of 'ppeals is 'AAR"@D, with costs
against the petitioners(
SO ORDERED.
THIRD DIVISION
[ G.R. N. 15420?, #u/ 0:, 200? ]RE= CARLO A. RIVERA AND GLAD=S A<AGA RIVERA, PETITIONERS,
VS. VIRGILIO RIVERA, RESPONDENT.
D E C I S I O N
P!NO, #.$
n this petition for review under Rule 45 of the Rules of Court, petitioners assail the "arch #1,
#$$# Decision of the Court of 'ppeals, in connection with an eectment case, docEeted as CivilCase o( 75#9, ordering them to vacate the disputed premises and pa& rentals(
he su.ect of the dispute is a ##-)s2uare meter lot with a two)store& duple? house located inPasig Cit&( he propert& was originall& owned .& spouses Remigio Rivera, 0r( and Consuelo
Rivera( he spouses had eleven 611 children, two of whom were Remigio, %r( 6petitioners;
father and respondent +irgilio Rivera(
n 1974, when the spouses migrated to the Gnited 0tates, the& asEed their son Remigio, %r( and
his children 6two of whom are petitioners Re& Carlo and *lad&s Rivera to occup& one unit of
the duple? house without pa&ment of rentals( n 19-5, respondent, another son of the spouses,moved into the other unit of the duple? house and liEewise occupied it gratuitousl&(
'fter Remigio, 0r( died in 199#, his widow Consuelo and their eleven 611 children e?ecuted ane?traudicial settlement1! where the children voluntaril& waived their hereditar& rights to four 64
real properties owned .& their parents, including the lot with the duple? house, in favor of their
mother Consuelo(
n 199, Remigio, %r( together with his three 6 sons migrated to the Gnited 0tates, leaving
.ehind petitioners who continued to reside in one of the units of the duple? house( Respondent
liEewise migrated to the G(0(
<n 'pril , 1999, Consuelo sold the duple? house and lot to respondent for five hundred
thousand pesos 6P5$$,$$$($$(#! 't the time of the sale, .oth Consuelo and respondent wereresiding in the same house in 0an %ose, California( n the Deed of 0ale, Consuelo and respondent
were represented .& respondent;s daughters "a( heresa R( Aerreria and "a( Dolores '( Rivera(
itle to the propert& was su.se2uentl& transferred in the name of respondent(
Respondent, represented .& his daughter Dolores, asEed petitioners to sign a lease contract over
the unit of the duple? house the& were occup&ing, covering the period from 'pril $, 1999 to%une $, 1999, with a monthl& rental of P,$$$($$(
's the petitioners refused to sign the lease contract or vacate the premises, respondent,! through
his daughter Dolores, filed an unlawful detainer case 6Civil Case o( 75#9 against them .eforethe "etropolitan rial Court 6"eC of Pasig Cit&( n the complaint,4! it was alleged/ that
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respondent is the registered owner of the duple? house= that he merel& tolerated petitioners;
occupanc& of one of the units thereof, conditioned upon the e?ecution of the lease contract
.etween the parties= that petitioners initiall& agreed thereto as the& claimed the& would remain inthe unit onl& for a few more months= and that after respondent caused the preparation of the lease
contract, petitioners refused to sign it or vacate the propert&(
n their 'nswer with counterclaim,5! petitioners alleged that the deed of sale .etween Consuelo
and +irgilio Rivera was fictitious( he& claimed that their occupanc& of the premises was not .&
mere tolerance as the& have a right to occup& it as co)owners( 8ence, the& averred that the&could not .e compelled to pa& rentals for the use of the propert&( Petitioners liEewise raised the
affirmative defense that respondent had no cause of action against them as no title was conferred
to him .ecause/ the deed of sale was fictitious= the su.ect propert& was part of the conugal
propert& of Remigio, 0r( and Consuelo and after the former;s death, allthe compulsor& heirs e?ecuted an e?traudicial settlement transferring all the conugal properties
to Consuelo out of love and respect for her= Consuelo and all the compulsor& heirs have migrated
to the 0tates= Consuelo was living with respondent in the 0tates= Consuelo and respondent hid
from the other heirs the transfer of the su.ect propert& to respondent= the deed of sale wase?ecuted in the Philippines through a special power of attorne& granted .& respondent to his
daugthers, "a( heresa Rivera)Aerreria and "a( Dolores Rivera= assuming that the sale waslegitimate, Consuelo did not notif& petitioners thereof, with deli.erate intent and .ad faith to
disinherit her grandchildren, petitioners herein, in violation of their right of first refusal, having
resided in the premises since .irth, or for more than #$ &ears= the P5$$,$$$ consideration for thesale was clearl& inade2uate= assuming that the sale was valid, it nonetheless deprived the
othercompulsor& heirs of their share over the su.ect propert&= and with the attendant defects in
the sale of the propert&, no right or title was transferred to respondent(
he trial court rendered udgment in the eectment case in favor of respondent, thus/
>8@R@A<R@, premises considered, udgment is here.& rendered in favor of the plaintiff and
against defendants Re& Carlo Rivera and *lad&s Rivera in the manner following/1( <rdering the defendants and all persons claiming rights under them to immediatel&
vacate the su.ect premises unlawfull& withheld from the plaintiff=
#( <rdering the defendants to pa& plaintiff the sum of P5,$$$($$ as and .& wa& of unpaid
rentals from 'pril to 0eptem.er 1999, without preudice to collecting the reasona.le
compensation for occupanc& that ma& .e forthcoming until defendants vacate the premises=
( <rdering defendants to pa& plaintiff the sum of P1$,$$$($$ as and .& wa& of attorne&;s
fees= and
4( <rdering the defendants to pa& the costs of suit(
0< <RD@R@D(
Petitioners appealed the decision to the Regional rial Court 6RC on the grounds that/ 6a therespondent had no right over the propert& as he did not have actual or prior ph&sical possession
thereof= 6. the non)e?istent lease contract was not .inding .etween the parties= and 6c
respondent;s title was not indefeasi.le(
<n "arch 1, #$$1, the RC reversed the decision of the "eC and ruled in favor of the
petitioners( t held that there was no valid contract of lease .etween the parties and petitionersoccupied the su.ect propert& in the concept of a co)owner(!
<n appeal, the Court of 'ppeals, in its Decision dated "arch #1, #$$#, reversed the RC;s
decision and reinstated the original decision of the "eC(7! t held that as registered owner ofthe land, respondent is entitled to possession thereof(
8ence, this petition for review with petitioners raising the following issues/ 6a whether petitioners, .eing in actual ph&sical possession of the propert& since 1974, are entitled to
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continue in possession of the premises until the issue of ownership thereof is resolved .& a court
of competent urisdiction= 6. whether Civil Case o( 75#9, the eectment case, is .e&ond the
urisdiction of the municipal trial court= 6c whether respondent holds the su.ect propert& in trustfor the legitimate heirs at the time the eectment case was filed= and 6d whether petitioners, who
are in actual ph&sical possession of the premises, e?ercised the right of a co)owner in
representation of their father, Remigio Rivera, %r(
>e find no merit in the petition(
>e cannot sustain petitioners; contention that as the& had actual, ph&sical possession of the
propert& as co)owners, in representation of their father Remigio, %r(, the& are entitled to remain in
the premises( n an unlawful detainer case, prior ph&sical possession .& the plaintiff is not
necessar&( t is enough that he shows that he has a .etter right of possession( 'ctual, prior ph&sical possession of a propert& .& a part& is indispensa.le onl& in forci.le entr& cases, not in
unlawful detainer cases where the defendant is necessaril& in prior lawful possession of the
propert& .ut his possession eventuall& .ecomes unlawful upon termination or e?piration of his
right to possess(
-!
hus, the fact that petitioners were in prior ph&sical possession of the duple?unit does not automaticall& entitle them to continue in said possession and does not give them a
.etter right to the propert&(
Petitioners claim that the unlawful detainer suit should have .een dismissed as the respondent
relied onl& on his title to the propert& in .ringing the action( he& contend that respondent;sassertion of ownership in the unlawful detainer case removed it from the urisdiction of the
"eC( "oreover, the& insist that their possession of the propert& was not merel& .& tolerance of
the original owners and later on .& the respondent as the& assert their father;s right as co)owner
of the propert&(
'gain, petitioners; arguments must fail( t is well)settled that a person who occupies the land of
another at the latter;s tolerance or permission, without an& contract .etween them, is necessaril& .ound .& an implied promise that he will vacate upon demand, failing which, a summar& action
for eectment ma& .e filed against him(9! n the case at .ar, respondent;s allegations in his
complaint specificall& show that petitioners occupied the su.ect unit onl& with the e?press permission of the spouses as the original owners( hus, when title to the propert& passed on to
respondent .& virtue of a contract of sale, petitioners; refusal to sign the lease contract prepared
.& the respondent for their use of the duple? unit rendered their continued occupation thereof
unlawful(
'lthough petitioners impugned the validit& of respondent;s title over the propert& as the& claimed
to have the right to occup& it as co)owner, this allegation did not divest the "eC of urisdictionover the unlawful detainer suit( t is settled that the sole issue in an eectment case is ph&sical or
material possession( either a claim of uridical possession nor an assertion of ownership .& the
defendant can deprive the court of urisdiction over the disputed propert&(1$! Courts in eectmentcases are mandated to decide 2uestions of ownership whenever it is necessar& to decide the
2uestion of possession( he& cannot .e divested of urisdiction over eectment cases ust .ecause
the defendants assert ownership over the litigated propert&(11!
he underl&ing reason for this ruling is to prevent the defendant from trifling with the summar&
nature of an eectment suit .& the simple e?pedient of asserting ownership over the disputed
propert&(1#!
n the case at .ar, the lower court properl& adudicated ownership of the propert& to respondent
in the unlawful detainer case on the .asis of his title thereto( Aull ownership of the su.ect propert& was surrendered to Consuelo Rivera upon the death of Remigio, 0r( through an
e?traudicial partition signed .& all the compulsor& heirs( hus, Consuelo had ever& right to
dispose of the propert& as she deemed fit( "oreover, the lower court correctl& ruled that petitioners had no hereditar& rights over the propert& in representation or su.stitution of their
father as the latter was still alive(
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>e stress, however, that this adudication, is onl& an initial determination of ownership for the
purpose of settling the issue of possession, the issue of ownership .eing insepara.l& linEedthereto( he lower court;s adudication of ownership in the eectment case is merel& provisional
and would not .ar or preudice an action .etween the same parties involving title to the propert&(1!
Iastl&, respondent rightfull& omitted Remigio, %r( as part& in the illegal detainer case as he was
not the one in actual, ph&sical possession of the su.ect propert&, .ut petitioners( >hile petitioners insist that the C issued to respondent shows that the propert& was part of the
inheritance left .& Remigio, 0r( which gives them the right to assert and protect the interest of
their father Remigio, %r( over his share in the propert&, this issue, coupled with the alleged
fictitious or fraudulent sale of the propert& to respondent, must .e tried .& petitioners in aseparate proceeding onl& for that purpose as it is settled that an unlawful detainer case resolves
onl& the issue of ph&sical or material possession(14!
IN VIE7 7HEREO8, the petition is D@@D( he impugned decision of the Court of'ppeals, dated "arch #1, #$$#, is 'AAR"@D( Costs against petitioners(
SO ORDERED.
8IRST DIVISION
[ G.R. NO. 1524:?, #u/ 14, 2006 ]R!RAL <AN O8 SIATON, NEGROS ORIENTAL, INC., PETITIONER, VS.
8ELIB ACA#ILOS AND !IRICO ACA#ILOS, #R., RESPONDENTS.
D E C I S I O N
=NARESSANTIAGO, #.$
his petition for review on certiorari assails the 'pril 1-, #$$1 Decision1! of the Court of
'ppeals in C')*(R( C+ o( 51#9$, which affirmed the %ul& 1#, 1995 Decision #! of the Regionalrial Court of egros <riental, Dumaguete Cit&, Branch 9 in Civil Case o( 9$49, and the
ovem.er 1#, #$$1 Resolution! den&ing petitioner Rural BanE of 0iaton, nc(;s 6RB0 motion
for reconsideration(
he controvers& arose from the complaint for removal of cloud over title to andFor recover& of
real propert& and damages filed .& Aeli? "acailos and Luirico "acailos, %r( 6"acailos againstRB0 and Aidela "acalipa& 6Aidela on %ul& #7, 19-7(
n their complaint,4! "acailos alleged that the& are the children of the late *regoria "acalipa&
"acailos who during her lifetime owned and possessed a parcel of residential land situated atPo.lacion, 0iaton, egros <riental with an area of 441 s2uare meters= that upon *regoria;s death
on %ul& #5, 1959, "acailos inherited the su.ect propert& as compulsor& heirs of *regoria, their
father Luirico "acailos, 0r( having predeceased *regoria= that in 1975, "acailos allowed%uanito "acalipa&, a nephew of *regoria to .uild a house on the su.ect propert& where he lived
together with his wife Aidela, and their son, Iam.erto= that Aidela and Iam.erto continued to
live in the house even after the death of %uanito= that on Ae.ruar& 1#, 1975, Aidela e?ecuted an:'ffidavit of 8eirship: .efore a otar& Pu.lic at Dumaguete Cit& falsel& claiming to .e the sole
heir of *regoria "acalipa& and adudicating to herself the su.ect propert&= that the ta?
declaration in the name of *regoria "acalipa& was cancelled and transferred to the name ofAidela under a? Declaration o( $##47-= that Iam.erto was the manager of RB0 when Aidela
o.tained a loan using as collateral the su.ect propert&= that Aidela defaulted thus the su.ect
propert& was foreclosed and sold at pu.lic auction with RB0 as the onl& and highest .idder= that
Aidela failed to redeem the propert& thus RB0 was a.le to transfer the ta? declaration to itsname= that "acailos have alwa&s .een in actual possession under claim of ownership of the
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su.ect propert& from the time of their mother;s death up to the present= that RB0 Enew that
Aidela did not own the su.ect propert&= that "acailos filed a criminal case for estafa through
falsification of pu.lic document 6Criminal Case o( 9$9 .efore the "unicipal rial Court inCities, Dumaguete Cit&, Branch against Aidela and Iam.erto immediatel& upon discover& of
the foreclosure sale= that in her counter affidavit in the preliminar& investigation of that criminal
case, Aidela denied that she signed the :'ffidavit of 8eirship:(
n its answer,5! RB0 claimed it considered Aidela to .e the owner of the su.ect propert& as she
was in actual ph&sical possession thereof when she applied for a loan= that "acailos maliciousl& .uilt a house on the su.ect propert& pretending to .e the owners thereof= that, if the& owned the
su.ect propert&, the& are alread& in estoppel since the mortgage document was dul& registered
with the Register of Deeds and the& have constructive notice thereof= that the e?traudicial
foreclosure and the pu.lic auction proceedings were dul& pu.lished and that the 0heriff;sCertificate of 0ale in favor of RB0 and the final deed of sale were registered with the Register
of Deeds of the Province of egros <riental(
<n the other hand, Aidela averred in her answer
!
that the propert& .elonged to her late hus.and,%uanito "acalipa&= that she lacEs formal education and an&thing she did was the worE of her son,
Iam.erto, who was at the time the manager of RB0(
'fter trial, the trial court found in favor of "acailos, thus/
>8@R@A<R@, on the .asis of the foregoing discussion, udgment is here.& rendered/
1( Declaring the foreclosure of the mortgaged propert& null and void a. initio=
#( Declaring "acailos! the rightful owners of the land su.ect matter of this case=
( <rdering the Provincial 'ssessor;s <ffice to cancel a? Dec( o( $##47- in the name of Aidela
"acalipa& and issue another a? Declaration in the name of Aeli? "acailos and Luirico"acailos covering the same propert&=
4( <rdering the Rural BanE of 0iaton, nc( to immediatel& release from mortgage the landcovered .& a? Dec( $##47- in the name of Aidela "acalipa&= and
5( <rdering the Rural BanE of 0iaton, nc( to pa& "acailos! the following/
a( P1$,$$$($$ as moral damages=
.( P1$,$$$($$ as e?emplar& damages=
c( P5,$$$($$ as attorne&;s fees= and
d( costs of the suit(
0< <RD@R@D(7!
he trial court noted that RB0 failed to ascertain whether Aidela was the lawful owner of the
propert& .eing mortgaged( Rather, it relied on the ta? declaration in Aidela;s name and the
:'ffidavit of <wnership and Possession: that she e?ecuted( o investigator inspected the
premises( hus, the trial court ruled that RB0 must suffer for its failure to investigate anddetermine the lawful owner of the su.ect propert& who turned out to .e "acailos(
he Court of 'ppeals denied RB0;s appeal and affirmed the decision of the trial court in toto(8ence, this petition(
he assigned errors revolve around four principal issues/ 61 who .etween "acailos and RB0has a superior right over the propert&, 6# assuming the "acailos .rothers have a .etter right,
whether RB0 was a mortgagee).u&er in good faith of the su.ect propert&, 6 assuming the
"acailos .rothers have a .etter right, whether the& are .arred from recovering the su.ect propert& due to estoppel and laches, and 64 whether the award of damages in favor of "acailos
was proper(
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RB0 principall& raises 2uestions of fact that have .een settled .& the court a quo( 's a general
rule, 2uestions of fact are not covered .& a petition for review under Rule 45 of the Rules ofCourt .ecause it is limited to a review of errors of law committed .& the appellate court
especiall& so in the case at .ar where the findings of fact of the trial court and Court of 'ppeals
coincide and are, thus, .inding on this Court(-!
8owever, RB0 claims that the instant case fallsunder recogni3ed e?ceptions to this general rule .ecause the lower courts; conclusions are
grounded entirel& on speculations, surmises or conectures,9! and are .ased on a misapprehension
of facts(1$!
'fter a review of the records, we rule that RB0 failed to impugn the ruling of the lowers courts
on the main issue of ownership over the su.ect propert&( 8owever, the award of damages should
.e modified .& deleting the award of e?emplar& damages for lacE of factual and legal .ases(
'nent the first issue, RB0 contends that Aidela owned the mortgaged propert& .ased on her
answer to the complaint where she asserted that she inherited the su.ect propert& from her late
hus.and, %uanito "acalipa&( t argues that the lower courts should not have given credence to thesu.se2uent repudiation .& Aidela of her ownership over the su.ect propert& during the pre)trial
conference as the same was done allegedl& in e?change for her .eing dropped from the instantcase(
he contention lacEs merit(
o .egin with, Aidela was not dropped from the case( During the hearing on 'pril 1-, 19--, the
trial court sought to have Aidela dropped from the case considering her admission during the pre)
trial conference that "acailos owned the su.ect propert&( 8owever, counsel for "acailoso.ected(11! Conse2uentl&, 'tt&( Rosalinda K.aOe3 continued to represent Aidela throughout the
trial of this case(
"oreover, RB0 has failed to produce evidence to show that Aidela;s admission was not freel&
and Enowingl& given( >hile it is true that Aidela was no longer presented as a witness after the
pre)trial conference for reasons not .orne out .& the records, this does not necessaril& mean thather repudiation of ownership over the su.ect propert& was prompted .& ill)will against RB0(
he pre)trial order dated Decem.er #, 19-7 reflected Aidela;s admissions during the pre)trial
conference/
#( Co)defendant Aidela "acalipa&;s claims/ t"at t"e property in question did really belong to plaintiffs 4"erein respondents aca'ilos brot"ers5 by virtue of t"eir rig"tful succession to t"e
same7 that it was her own son, Iam.erto "acalipa&, who su.se2uentl& .ecame an officer)in)
charge as manager of co)defendant Rural BanE of 0iaton, who so maneuvered her into signingcertain documents, in effect maEing her a de.tor of Rural BanE of 0iaton, which circumstances
were never e?plained to her .& her son Iam.erto "acalipa&= and that as a conse2uence of it, said
Rural BanE of 0iaton did grant a loan to her although the proceeds of said loan onl& went into thehands of Iam.erto "acalipa&, her son= t"at *idela acalipay recognizes t"e fact t"at s"e
absolutely "ad not"ing2 and in fact still "as not"ing2 to do #it" t"e property in question2 t"e
same property8s o#ners"ip being al#ays t"at of plaintiffs2 #"ic" o#ners"ip s"e recognizes71#! 6talics supplied'lthough the records do not contain the transcript during the pre)trial conference, it should .e
noted that on 'pril 1-, 19--, the trial court recalled the events that transpired during the pre)trial
conference where Aidela freel& and Enowingl& acEnowledged that "acailos were the rightfulowners of the su.ect propert&, thus/
C<GR/
hen, what happened nowH! Did &ou convince Aidela that she was ust a daughter)in lawH n
this case, Aidela was a daughter)in)law of(((
Iogronio/1!
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he first cousin of the plaintiffs(
C<GR/
Aidela "acalipa& whom &ou are representing is merel& the daughter(((
K.aOe3/14!
s the mother of Iam.erto(((
C<GR/
>ait a minute, ((( is the wife of the plaintiff;s cousinH
K.aOe3/
Kes, &our honor(
C<GR/
'nd even her hus.and, the plaintiff;s cousin, had nothing to do with this propert&, rightH
K.aOe3/
es2 t"at is #"at t"e defendant...
C<GR/
'nd even &our client, the co)defendant Aidela "acalipa&, admits that it was onl& her son,Iam.erto, who soon .ecame <C(((
Iogronio/
>ho was the <C at the time(
C<GR/
Kes, who soon .ecame the <C of the Rural BanE who did something using Aidela;s name( s that
correctH
Iogronio/
Kes, &our honor(
? ? ? ?
C<GR/
$ut *idela said2 9es2 t"e plaintiff really o#ned t"is property29 admitting it.
K.aOe3/
Kes, &our honor(
C<GR/
>hat is the pro.lem of this case nowH
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Iogronio/
0o, we have no more pro.lem with Aidela, as far as ownership is concerned( <ur target now is
the Rural BanE of 0iaton who appears to have purchased this propert& and the foreclosure, and
have it transferred to their name and even threatening to eect the plaintiffs who are the realowners ? ? ?(15! 6@mphasis supplied
's regards Aidela;s initial assertion of ownership over the su.ect propert&, we agree with the
findings of the Court of 'ppeals that the same should not .e given weight( t .ears stressing thatonl& a thum. marE appears on top of her printed name at the last page of her answer and the
name of the law&er who prepared the same was not even indicated( he records also show that
Aidela;s answer was .elatedl& filed with the trial court( n her opposition1! to the motion to have
her declared in default, there was a plea for understanding and a statement that the attachedanswer was prepared .& an unnamed law&er, without .eing formall& engaged, out of pit& and
compassion for Aidela who was an indigent( hus, as .etween the allegations in the answer
which was merel& thum.marEed .& Aidela and prepared .& an unEnown law&er, and her
admissions in open court with the assistance of her counsel of record, 'tt&( Rosalinda K.aOe3,during the pre)trial conference of this case, the lower courts correctl& gave weight to the latter(
't an& rate, the lower courts; finding that the su.ect propert& rightl& .elonged to "acailos was
not principall& grounded on Aidela;s admission( Rather, this admission merel& confirmed the
undisputed documentar& evidence which showed *regoria "acalipa& as the owner of the su.ect propert& and the same passed on to her two sons upon her death( he records show that a?
Declaration o( -5-17! covering the period prior to the &ear 1949,1-! a? Declaration o(
1-9519! for the &ear 1949, a? Declaration o( #5-4#$! for the &ear 199 and a? Declaration
o( 1$51#1! for the &ear 1974 over the su.ect propert& were all in the name of *regoria"acalipa&( t is true that ta? declarations or realt& ta? pa&ments are not conclusive evidence of
ownership, however, the& constitute good indicia of possession in the concept of owner and a
claim of title over the su.ect propert&(##! Coupled with her uncontested actual possession of thesu.ect propert&, these ta? declarations constitute strong evidence of ownership over the su.ect
propert& .& *regoria "acalipa&,#! the mother of herein respondents "acailos(
he ta? declarations in the name of *regoria "acalipa& taEes on great significance .ecause
Aidela tacEed her claim of ownership to that of *regoria "acalipa&( n 1975, Aidela had a?
Declaration o( 1$51 in the name of *regoria "acalipa& cancelled through the e?ecution of an
:'ffidavit of 8eirship: where she claimed to .e the sole heir of *regoria "acalipa&( Ket, shewas merel& the wife of %uanito who was a nephew of *regoria( either she nor %uanito could
inherit from *regoria whose compulsor& heirs are respondents "acailos( Clearl&, the :'ffidavit
of 8eirship: was fraudulent and could never .e Aidela;s source of ownership over the su.ect propert&( either could a? Declaration o( $##47- in the name of Aidela and the :'ffidavit of
<wnership and Possession: .e the source of an& derivative right of ownership of RB0 over the
su.ect propert& considering that these documents were the products of the aforementionedfraudulent scheme( hus, the trial court correctl& ruled that the mortgage over the su.ect
propert& and the foreclosure proceedings were a nullit&, and that respondents "acailos .rothers
should .e declared the lawful owners of the su.ect propert&(
>e note that in its "emorandum,#4! RB0 contended, among others, that should this Court rule
in favor of "acailos, the mortgage should .e declared valid insofar as the one)half portion of
the su.ect propert& is concerned, .ased on the alleged admission .& respondent Luirico"acailos, %r( on cross)e?amination that there was an oral settlement of the estate of *regoria
"acalipa& where respondents "acailos .rothers agreed that the su.ect propert& should .e
apportioned .etween respondent Luirico "acailos, %r( and Aidela "acalipa&(
his issue is .eing raised .& RB0 for the first time on appeal and onl& .elatedl& in its
memorandum .efore this Court( >ell)settled is the rule that points of law, theories, issues andarguments not ade2uatel& .rought to the attention of the trial court need not .e, and ordinaril&
will not .e, considered .& a reviewing court as the& cannot .e raised for the first time on appeal(
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#5! 'n issue which was neither averred in the complaint nor raised during the trial in the court
.elow cannot .e raised for the first time on appeal as it would .e offensive to the .asic rules of
fair pla&, ustice and due process(#! hus, we cannot .end .acEwards to e?amine this issueraised .& RB0 at this late stage in the proceedings(
Be that as it ma&, even if we were to consider RB0;s new theor& and, thus, assume that theaforementioned oral settlement did taEe place, the relin2uishment of respondent Aeli? "acailos;
one)half share in the su.ect propert& in favor of Aidela would amount to an oral donation of real
propert& which, under 'rticle 749#7! of the Civil Code, is null and void(#-! his void donation toAidela did not ripen into ownership through ac2uisitive prescription .ecause, as will .e discussed
in detail shortl&, RB0 was a mortgagee).u&er in .ad faith( <nl& si? &ears had elapsed from the
auction sale to the filing of the instant case, which is less than the re2uired $)&ear)period for
e?traordinar& ac2uisitive prescription#9! to set in(
'nent the second issue, we agree with the trial court and the Court of 'ppeals that RB0 was a
mortgagee).u&er in .ad faith( he su.ect propert& was mortgaged three times .& Aidela to
RB0, to wit/ in 1975 for P#,$$$($$, in 197 for 1$,$$$($$, and in 197- for P1#,$$($$( 'fterfull& pa&ing the first two mortgage de.ts, Aidela failed to pa& the third thus the propert& was
e?traudiciall& foreclosed and sold at pu.lic auction with RB0 as the onl& and highest .idder(8owever, in contracting the aforesaid mortgages, RB0 failed to e?ercise the proper diligence in
verif&ing the true owners of the su.ect propert&( Certainl&, a mortgagee is not e?pected to
conduct an e?haustive investigation on the histor& of the mortgagor;s title .ut RB0, especiall& .ecause it is a .anEing institution, must have at least e?ercised due diligence .efore entering into
said contract( BanEs are e?pected to e?ercise more care and prudence than private individuals in
their dealings .ecause their .usiness is impressed with pu.lic interest($!
t is a standard practice for .anEs .efore approving a loan to send representatives to the premises
of the land offered as collateral and to investigate who are the real owners thereof(1! 8owever,
in the case at .ar, no investigator was sent to the location of the su.ect propert& to verif& the realowners thereof( nstead, RB0 relied solel& on a? Declaration o( $##47- in the name of Aidela
as well as the :'ffidavit of Possession and <wnership: that RB0 re2uired her to e?ecute(#! 'tt&( eodoro 0ingson, a witness for RB0, e?plained that when RB0 was esta.lished in1974, there was so much mone& coming from the Central BanE that the .anE was in a hurr& to
grant loans and was not strict with the documents presented .& prospective .orrowers as
collateral(!
>hat is more, 'tt&( 0ingson admitted that RB0 was aware that a? Declaration o( $##47- in
the name of Aidela was previousl& in the name of *regoria "acalipa& and that the ta?
declaration was transferred to the name of Aidela through the :'ffidavit of 8eirship: shee?ecuted naming her as the sole heir of *regoria "acalipa&(4! 8owever, it did not taEe steps to
ascertain whether Aidela was, indeed, the sole heir of *regoria "acalipa&( Rather, it placed full
faith on the false representation of Aidela that her hus.and, %uanito "acalipa&, was the son of*regoria "acalipa&(5! o maEe matters worse, neither did it in2uire from Iam.erto, son of
Aidela, who was then the manager of the .anE when the first loan was granted to her in 1975, as
to whether his father, %uanito "acalipa&, was the son of *regoria "acalipa&(!
's its defense, RB0 dwells on the alleged error of the trial court in finding Iam.erto as the
manager of RB0 when the mortgage de.ts were contracted when in fact Iam.erto was a mere
clerE)t&pist( 8owever, the records show that RB0 categoricall& admitted during the pre)trialconference that Iam.erto was the manager of the .anE when the loan transactions tooE place(7! @ven in its Repl&-! dated %une #1, #$$# filed .efore this Court, RB0 admitted that Iam.erto
was the officer)in)charge 6<C of the .anE prior to 197- or when the first two mortgage de.tswere contracted .& his mother, Aidela, and that Iam.erto was demoted to the ranE of a clerE)
t&pist onl& in 197-(9!
't an& rate, we need not .ela.or this point .ecause whether Iam.erto was an <C or a mere
clerE)t&pist of the .anE when the mortgage de.ts were contracted will not e?cuse RB0 from
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e?ercising prudence in verif&ing the true owners of the su.ect propert&( he fact that Iam.erto
was the son of its prospective de.tor, Aidela, should have prompted RB0 to .e more cautious in
granting the loan(
Based on the foregoing, it is clear that RB0 chose to close its e&es to facts which should have
put a reasona.le man on his guard(4$!
Aar from .eing prudent, RB0 hastil& granted the loanwithout investigation, and placed full faith on the false documents su.mitted .& Aidela(
Conse2uentl&, it cannot now claim that it acted in good faith on the .elief that there was no
defect in the title of Aidela(
>hile the findings of the lower courts that RB0 was a mortgagee).u&er in .ad faith is in accord
with the evidence on record, we must point out, however, that the& overlooEed the fact that the
su.ect propert& is an unregistered piece of land( 's we ruled in (avid v. $andin241! which wasreiterated in Sales v. Court of Appeals24#! :the issue of good faith or .ad faith of a .u&er is
relevant onl& where the su.ect of the sale is a registered land .ut not where the propert& is an
unregistered land( <ne who purchases an unregistered land does so at his peril( 8is claim of
having .ought the land in good faith, i.e.2 without notice that some other person has a right to, orinterest in, the propert&, would not protect him if it turns out that the seller does not actuall& own
the propert&(: evertheless, the application of this doctrine will not affect the outcome of thiscase( RB0 .ought the propert& during the auction sale at its own peril and must suffer the
conse2uences of its failure to investigate the true owners of the su.ect propert& who turned out
to .e respondents "acailos .rothers( 'lthough the discussion on RB0;s .ad faith would nowseem superfluous given the application of this doctrine, the finding of .ad faith is still relevant in
the resolution of the last issue with respect to the award of damages(
'nent the third issue, we liEewise agree with the findings of the Court of 'ppeals thatrespondent "acailos .rothers are not .arred .& laches or estoppel from recovering the
ownership of the su.ect propert&( he& are not estopped from den&ing the representations of
Aidela that she owns the su.ect propert& .ecause the& were never priv& to the loan agreements .etween the .anE and Aidela( he fact that the mortgages and su.se2uent foreclosure
proceedings were dul& registered with the register of deeds will not cure their nullit& .ecause
Aidela never owned the su.ect propert&(
either can respondent "acailos .rothers .e said to have slept on their rights( @ssentiall&,
laches is the failure or neglect, for an unreasona.le and une?plained length of time, to do that
which, .& the e?ercise of due diligence, could or should have .een done earlier= it is negligenceor omission to assert a right within a reasona.le time, warranting a presumption that the part&
entitled to assert it has either a.andoned or declined to assert it(4!
n the case at .ar, respondents "acailos .rothers performed acts which showed their intent to
assert their rightful ownership over the su.ect propert&( 0pecificall&, in 19-$, respondent
Luirico "acailos, %r( came across the notice of pu.lic auction of the su.ect propert& in the pu.lic marEet(44! Gpon investigation with the provincial assessor;s office, he discovered that
Aidela had mortgaged the su.ect propert& to RB0 .& transferring the ta? declaration to her
name after falsel& claiming in the :'ffidavit of 8eirship: that she was the sole heir of *regoria
"acalipa&(
Conse2uentl&, in 19-1 or within a &ear from the discover& of the fraudulent scheme perpetuated
.& Aidela, respondents "acailos .rothers filed a criminal case against Aidela and Iam.erto forestafa through falsification of pu.lic document(45! 'fter Enowing a.out the foreclosure of the
su.ect propert&, respondent Luirico "acailos, %r( tooE possession of the su.ect propert& 4! and
demanded Aidela to vacate( n 19-7, the instant case to remove cloud over the title andForrecover& of real propert& and damages was filed .& respondents "acailos .rothers against RB0
as an off)shoot of the latter;s demand on respondent Luirico "acailos to vacate the su.ect
propert&( 'll in all, these acts show that respondents "acailos .rothers did not sleep on theirrights .ut reasona.l& tooE steps to assert their ownership over the su.ect propert&(
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'nent the fourth issue, we note that the tasE of fi?ing the amount of damages primaril& rests with
the trial court as the circumstances of each case ma& warrant provided that the .ases therefor are
full& esta.lished(47! n the case at .ar, the trial court awarded moral and e?emplar& damages aswell as attorne&;s fees in view of its finding that RB0 acted in .ad faith(4-! 's previousl&
discussed, this finding of .ad faith .& the trial court is sufficientl& supported .& the evidence on
record( 8owever, the award of e?emplar& damages should .e deleted since there is no clear andconvincing proof that RB0 acted in a wanton, fraudulent, recEless, oppressive or malevolent
manner to warrant the imposition of the same(49!
7HERE8ORE, the petition is PARTL= GRANTED( he 'pril 1-, #$$1 Decision and
ovem.er 1#, #$$1 Resolution of the Court of 'ppeals in C')*(R( C+ o( 51#9$ which
affirmed the %ul& 1#, 1995 Decision of the Regional rial Court of egros <riental, Dumaguete
Cit&, Branch 9 in Civil Case o( 9$49 declaring respondents Aeli? "acailos and Luirico"acailos, %r( the rightful owners of the su.ect propert&, are A88IRED with
theODI8ICATION that the award of e?emplar& damages is DELETED for lacE of .asis(
SO ORDERED(
The reserva troncal is a special rule designed
primarily to assure the return of the reservable
property to the third degree relatives belonging to
the line from which the property originally came,
and avoid its being dissipated into and by therelatives of the inheriting ascendant (reservista). "*
* *.
@#/&' D#I#&#O;
+"/" ;o" >.2$!A2" &eptember 2, 19$?
@/);#&) '#OO D P)P), M);> '#OO, ;#O>)& '#OO and N);)/#O P)P), !lainti0#-a!!ellee#, v#" D)>#&)V 'O;+TO )M)8O,
P/#MO 'O;+TO and +ODO@/DO )M)8O, defendant#-a!!ellant#"
D # & # O ;
;)/I)&), J.J
'his case which in(ol(es the application of )rticle $91 of the i(il ode
on reser(a troncal, was submitted for *udgment in the lower court b% all
the parties on the following E&tipulation of @acts and Partial ompromiseEJ
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E1" 'he% stipulate that the defendant Dalisa% D" 'ongo.amacho and the
plainti4s, @rancisca 'ioco de Papa, Manuel 'ioco and ;icolas 'ioco, are
legitimate relati(es, plainti4s being said defendantFs grandaunt and
granduncles"
2" 'he% stipulate that plainti4s and defendant Dalisa% D" 'ongo.amacho ha(e as a common ancestor the late Balbino 'ioco who had a
sister b% the name of /omana 'ioco:, father of plainti4s and great
grandfather of defendant" 'he famil% relationship of the parties is as
shown in the chart attached hereto as )nne= F)F and made an integral
part of this stipulation"
A" 'he% stipulate that /omana 'ioco during her lifetime gratuitousl%
donated four : parcels of land to her niece 'oribia 'ioco legitimate
sister of plainti4s:, which parcels of land are presentl% co(ered b% 'ransfererti0cates of 'itle ;os" ).?1?5, ?1?? and ?1?7 of the /egistr% of
Deeds of Manila, copies of which are attached to this stipulation as
)nne=es FBF, FB.1F, and FB.2F"
" 'he% stipulate that 'oribia 'ioco died intestate in 1915, sur(i(ed b% her
husband, ustacio Di<on, and their two legitimate children, @austino Di<on
and 'rinidad Di<on mother of defendant Dalisa% D" 'ongo.amacho: and
lea(ing the afore.mentioned four : parcels of land as the inheritance of
her said two children in e6ual pro.indi(iso shares"
5" 'he% stipulate that in 192$, Balbino 'ioco died intestate, sur(i(ed b%
his legitimate children b% his wife Marciana @eli= among them plainti4s:
and legitimate grandchildren @austino Di<on and 'rinidad Di<on" #n the
partition of his estate, three A: parcels of land now co(ered b% 'ransfer
erti0cates of 'itle ;os" 1?55 and 1?55 of the /egistr% of Deeds of
Manila, copies of which are attached hereto as )nne=es FF and F.1F, were
ad*udicated as the inheritance of the late 'oribia 'ioco, but as she had
predeceased her father, Balbino 'ioco, the said three A: parcels of land
de(ol(ed upon her two legitimate children @austino Di<on and 'rinidad
Di<on in e6ual pro.indi(iso shares"
?" 'he% stipulate that in 19A7, @austino Di<on died intestate, single and
without issue, lea(ing his one.half 1U2: pro.indi(iso share in the se(en 7:
parcels of land abo(e.mentioned to his father, ustacio Di<on, as his sole
intestate heir, who recei(ed the said propert% sub*ect to a reser(a troncal
which was subse6uentl% annotated on the 'ransfer erti0cates of 'itle
)nne=es FBF, FB.2F, FF and F.1F"
7" 'he% stipulate that in 19A9 'rinidad Di<on.'ongo died intestate, andher rights and interests in the parcels of land abo(e.mentioned were
inherited b% her onl% legitimate child, defendant Dalisa% D" 'ongo.
amacho, sub*ect to the usufructuar% right of her sur(i(ing husband,
defendant Primo 'ongo"
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$" 'he% stipulate that on Nune 1, 19?5, ustacio Di<on died intestate,
sur(i(ed his onl% legitimate descendant, defendant Dalisa% D" 'ongo.
amacho"
9" 'he parties agree that defendant Dalisa% D" 'ongo.amacho now
owns one.half X: of all the se(en 7: parcels of land abo(e.mentioned asher inheritance from her mother, 'rinidad Di<on.'ongo"
1!" Defendant Dalisa% D" 'ongo.amacho also claims, upon legal ad(ice,
the other half of the said se(en 7: parcels of land abo(e.mentioned b%
(irtue of the reser(a troncal imposed thereon upon the death of @austino
Di<on and under the laws on intestatesuccessionG but the plainti4s, also
upon legal ad(ice, oppose her said claim because the% claim three.fourths
AU: of the one.half pro.indi(iso interest in said parcel of land, which
interest was inherited b% ustacio Di<on from @austino Di<on, or three.eights AU$: of the said parcels of land, b% (irtue of their being also third
degree relati(es of @austino Di<on"
11" 'he parties hereb% agree to submit for *udicial determination in this
case the legal issue of whether defendant Dalisa% D" 'ongo.amacho is
entitled to the whole of the se(en 7: parcels of land in 6uestion, or
whether the plainti4s, as third degree relati(es of @austino Di<on are
reser(atarios together with said defendant: of the one.half pro.indi(iso
share therein which was inherited b% ustacio Di<on from his son @austino
Di<on, and entitled to three.fourths AU: of said one.half pro.indi(isoshare, or three eights AU$: of said se(en 7: parcels of land, and,
therefore, to three.eights AU$: of the rentals collected and to be collected
b% defendant Dalisa% P" 'ongo amacho from the tenants of said parcels
of land, minus the e=penses andUor real estate ta=es corresponding to
plainti4sF share in the rentals"
12" #n (iew of the fact that the parties are close blood relati(es and ha(e
acted upon legal ad(ice in pursuing their respecti(e claims, and in order
to restore and preser(e harmon% in their famil% relations, the% hereb%
wai(e all their claims against each other for damages other than legal
interest on plainti4sF share in the rentals which this 8onorable ourt ma%
deem proper to award:, attorne%Fs fees and e=penses of litigation which
shall be borne b% the respecti(e parties"E
On the basis thereof, the lower ourt declared the plainti4s @rancisco
'ioco, Manuel 'ioco and ;icolas 'ioco, as well as the defendant Dalisa%
'ongo.amacho, entitled, as reser(atarios, to one.half of the se(en
parcels of land in dispute, in e6ual proportions, rendering *udgment as
followsJ
E[ [ [" /esol(ing, therefore, the legal 6uestion submitted b% the parties,
the court holds that plainti4s @rancisca 'ioco, Manuel 'ioco and ;icolas
'ioco are entitled to three.fourths AU: of one.half 1U2: pro.indi(iso
shares or three.eights AU$: of the se(en 7: parcels of land in(ol(ed in
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this action" onse6uentl%, the% are, liewise, entitled to three.eights AU$:
of the rentals collected and to be collected b% the defendant Dalisa% D"
'ioco amacho from the tenants of the said parcels of land, minus the
e=penses andUor real estate ta=es corresponding to plainti4sF share in the
rentals"#; I#3 O@ '8 @O/+O#;+, and inasmuch as the parties e=pressl%
wai(ed all their claims against each other for damages including
attorne%Fs fees and e=penses of litigation other than the legal interests on
plainti4sF share in the rentals, the court renders *udgment ad*udging the
plainti4s entitled to three.eights AU$: of the se(en 7: parcels of land
described in 'ransfer erti0cate of 'itle ;os" '.?1?5, '.?1??, '.?1?7,
'.1?5? and '.1?55 of the /egistr% of Deeds of Manila" 'he defendant
Dalisa% D" 'ioco.amacho is hereb% ordered to mae an accounting of all
rents recei(ed b% her on the properties in(ol(ed in this action for thepurpose of determining the legal interests which should be paid to the
plainti4s on their shares in the rentals of the propert% in 6uestion"
&O O/D/D"E
;ot satis0ed, the defendant appealed to this ourt"
'he issue raised is whether, as contended b% the plainti4s.appellees and
ruled b% the lower ourt, all relati(es of the praeposituswithin the third
degree in the appropriate line succeed without distinction to thereser(able propert% upon the death of the reser(ista, as seems to be
implicit in )rt" $91 of the i(il ode, which readsJ
E)rt" $91" 'he ascendant who inherits from his descendant an% propert%
which the latter ma% ha(e ac6uired b% gratuitous title from another
ascendant, or a brother or sister, is obliged to reser(e such propert% as he
ma% ha(e ac6uired b% operation of law for the bene0t of relati(es who are
within the third degree and who belong to the line from which said
propert% came" $11:E,
or, as asserted b% the defendant.appellant, the rights of said relati(es are
sub*ect to, and should be determined b%, the
rules
onintestate succession"
&hat uestion has already been answered in 'adura vs% aldovino, where
the reservatario was survived by eleven nephews and nieces of
the praepositus in the line of origin, four of whole blood and seven of half
blood, and the claim was also made that all eleven were entitled to the
reversionary property in eual shares% &his ourt, spea*ing through +r%
ustice %%-% .eyes, declared the principles of intestacy to be controlling, andruled that the nephews and nieces of whole blood were each entitled to a
share double that of each of the nephews and nieces of half blood in
accordance with Article 1//0 of the ivil ode% aid the ourt:
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2&he issue in this appeal may be formulated as follows: In a case of reserva
troncal, where the onlyreservatarios (reservees) surviving the reservista, and
belonging to the line of origin, are nephews of the descendant (prepositus),
but some are nephews of the half blood and the others are nephews of the
whole blood, should the reserved properties be apportioned among
then eually, or should the nephews of the whole blood ta*e a share twice as
large as that of the nephews of the half blood3
E[ [ ["
'he case is one of 0rst impression and has di(ided the &panish
commentators on the sub*ect" )fter mature reYection, we ha(e concluded
that the position of the appellants is
correct"
&he reserva troncal is a special rule designed
primarily to assure the return of the reservableproperty to the third degree relatives belonging to the
line from which the property originally came, and
avoid its being dissipated into and by the relatives of
the inheriting ascendant (reservista)%
E[ [ ["
'he stated purpose of the reser(a is accomplished once the propert% hasde(ol(ed to the speci0ed relati(es of the line of origin" But from this time
on, there is no further occasion for its application" #n the relations
between one reser(atario and another of the same degree there is no call
for appl%ing )rt" $91 an% longerG wherefore, the respecti(e share of each
in the re(ersionar% propert% should be go(erned b% the ordinar%
rules of intestate succession" #n this spirit the *urisprudence of this ourt
and that of &pain has resol(ed that upon the death of the
ascendant reser(ista, the reser(able propert% should pass, not to all
the reser(atarios as a class but onl% to those nearest in degree to thedescendant prepositus: e=cluding those reser(atarios of more remote
degree @lorentino (s" @lorentino, ! Phil" $9.9!G '"&" $ ;o(" 1$9G Dir"
+en" de los /egistros, /esol" 2! March 19!5:" )nd within the third degree
of relationship from the descendant prepositus:, the right of
representation operates in fa(or of nephews @lorentino (s"
@lorentino,supra:"
E@ollowing the order prescribed b% law
in legitimate
succession , when
there are relati(es of the descendant within the third degree, the right of
the nearest relati(e, called reser(atario, o(er the propert% which the
reser(ista person holding it sub*ect to reser(ation:should return to him,
e=cludes that of the one more remote" 'he right of representation cannot
be alleged when the one claiming same as a reser(atario of the
reser(able propert% is not among the relati(es within the third degree
belonging to the line from which such propert% came, inasmuch as the
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right granted b% the i(il ode in )rticle $11 is in the highest degree
personal and for the e=clusi(e bene0t of designated persons who are
within the third degree of the person from whom the reser(able propert%
came" 'herefore, relati(es of the fourth and the succeeding degrees can
ne(er be considered as reser(atarios, since the law does not recogni<ethem as such"
E#n spite of what has been said relati(e to the right of representation on
the part of one alleging his right as reser(atario who is not within the third
degree of relationship, ne(ertheless there is right of representation on the
part of reser(atarios who are within the third degree mentioned b% law, as
in the case of nephews of the deceased person from whom the reser(able
propert% came" [ [ ["E @lorentino (s" @lorentino, ! Phil" $!, $9.9!:
mphasis supplied: &ee also ;ie(a and )lcala (s" )lcala and de Ocampo,
1 Phil" 915:
Pro=imit% of degree and right of representation are basic principles
of
ordinar% intestate successionG so is the rule that whole blood brothers
and nephews are entitled to a share double that of brothers and nephews
of half blood" #f in determining the rights of thereser(atarios inter se,
pro=imit% of degree and the right of representation of nephews are made
to appl%, the rule of double share for immediate collaterals of the whole
blood should be liewise operati(e"
#n other words, the reser(a troncal merel% determines the group of relati(es reser(atarios: to whom the propert% should be returnedG
but within that group, the indi(idual right to the propert% should be
decided b% the applicable rules of
ordinar% intestatesuccession, since )rt"
$91 does not specif% otherwise" 'his conclusion is strengthened b% the
circumstance that the reser(a being an e=ceptional case, its application
should be limited to what is strictl% needed to accomplish the purpose of
the law" )s e=pressed b% Manresa in his ommentaries Iol" ?, ?th d", p"
25!:J
E[ [ [ creandose un (erdadero estado e=cepcional del derecho, no debe
ampliarse, sino mas bien restringirse, el alcance del precepto,
manteniendo la e=cepcion mientras fuere necesaria % estu(iese
realmente contenida en la disposicion, % aplicando las reglas generales %
fundamentales del odigo en materia de sucesion, en a6uellos e=tremos
no resueltos de un modo e=preso, % 6ue 6uedan fuera de la propia esfera
de accion de la reser(a 6ue se crea"E
'he restricti(e interpretation is the more imperati(e in (iew of the new
i(il odeFs hostilit% to successional reser(as and re(ersions, ase=empli0ed b% the suppression of the reser(a (iudal and the re(ersion
legal of the ode of 1$$9 )rt" $12 and 9?$.9$!:"E
/e(ersion of the reser(able propert% being go(erned b% the
rules
on intestate succession, the plainti4s.appellees must be held
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without an% right thereto because, as aunt and uncles, respecti(el%, of
@austino Di<on the praepositus:, the% are
e=cluded
from thesuccession b% his niece, the defendant.appellant,
although the% are related to him within the same degree as the latter" 'o
this e4ect is )bellana (s" @erraris where )rts" 1!!1, 1!!, 1!!5 and 1!!9of the i(il ode were cited and appliedJ
E;e(ertheless, the trial court was correct when it held that, in case of
intestac%, nephews and nieces of the de cu*us e=clude all other collaterals
aunts and uncles, 0rst cousins, etc":
from the succession" 'his is readil%
apparent from articles 1!!1, 1!!, 1!!5, and 1!!9 of the i(il ode of
the Philippines, that pro(ide as followsJ
E)rt" 1!!1" &hould brothers and sisters or their children sur(i(e with the
widow or widower, the latter shall be entitled to one.half of theinheritance and the brothers and sisters or their children to the other
half"E
E)rt" 1!!" &hould the onl% sur(i(ors be brothers and sisters of the full
blood, the% shall inherit in e6ual shares"E
E)rt" 1!!5" &hould brothers and sisters sur(i(e together with nephews
and nieces who are the children of the decedentFs brothers and sisters of
the full blood, the former shall inherit per capita, and the latter per
stirpes"E
E)rt" 1!!9" &hould there be neither brothers nor sisters, nor children of
brothers or sisters, the other collateral relati(es shall succeed to the
estate"E
nder the last article 1!!9:, the absence of brothers, sisters, nephews
and nieces of the decedent is a precondition to the other collaterals
uncles, cousins, etc": being called to the succession" 'his was also and
more clearl% the case under the &panish i(il ode of 1$$9, that
immediatel% preceded the i(il ode now in force /")" A$?:" 'hus,)rticles 952 and 95 of the ode of 1$$9 prescribed as followsJ
E)rt" 952" #n the absence of brothers or sisters and of nephews or nieces,
children of the former, whether of the whole blood or not, the sur(i(ing
spouse, if not separated b% a 0nal decree of di(orce shall succeed to the
entire estate of the deceased"E
E)rt" 95" &hould there be neither brothers nor sisters, nor children of
brothers or sisters, nor a sur(i(ing spouse, the other collateral relati(es
shall succeed to the estate of deceased"
'he latter shall succeed without distinction of lines or preference among
than b% reason of the whole blood"E
#t will be seen that under the preceding articles, brothers and sisters and
nephews and nieces inherited ab intestato ahead of the sur(i(ing spouse,
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while other collaterals succeeded onl% after the widower or widow" 'he
present i(il ode of the Philippines merel% placed the spouse on a par
with the nephews and nieces and brothers and sisters of the deceased,
but without altering the preferred position of the latter (is a (is the other
collaterals"EE[ [ ["
3e, therefore, hold, and so rule, that under our laws of succession, a
decedentFs uncles and aunts ma% not succeed ab intestato so long as
nephews and nieces of the decedent sur(i(e and are willing and 6uali0ed
to succeed" [ [ [E
'his conclusion is forti0ed b% the obser(ation, also made in Padura, supra,
that as to the reser(able propert%, the reser(atarios do not inherit from
the reser(ista, but from the descendant praepositusJ
E[ [ [" #t is liewise clear that the reser(able propert% is no part of the
estate of the reser(ista, who ma% not dispose of it b% will, as long as there
are reser(atarios e=isting )rro%o (s" +erona, 5$ Phil" 2A7:" 'he latter,
therefore, do not inherit from the reser(ista, but from the
descendant prepositus, of whom the reser(atarios are the
heirs mortis causa, sub*ect to the condition that the% must sur(i(e
the reser(ista" &anche< /oman, Iol" I#, 'omo 2, p" 2$?G Manresa,
ommentaries, Iol" ?, ?th d", pp" 27, A1!: [ [ ["E
'o the same e4ect is ano (s" Director of >ands, where it was ruled that
intestac% proceedings to determine the right of areser(atario are not
necessar% where the 0nal decree of the land court ordering issuance of
title in the name of the reser(ista o(er propert% sub*ect
to reser(a troncal identi0es the reser(atario and there are no other
claimants to the latterFs rights as suchJ
E'he contention that an intestac% proceeding is still necessar% rests upon
the assumption that the reser(atario will succeed in, or inherit, thereser(able propert% from the reser(ista" 'his is not true"
'he reser(atario is not the reser(istaFs successor mortis causanor is the
reser(able propert% part of the reser(istaFs estateG
the reser(atario recei(es the propert% as a conditional heir of the
descendant prepositus:, said propert% merel% re(erting to the line of
origin from which it had temporaril% and accidentall% stra%ed during
the reser(istaFs lifetime" 'he authorities are all agreed that there
being reser(atarios that sur(i(e the reser(ista, the matter must be
deemed to ha(e en*o%ed no more than a life interest in the reser(ablepropert%"
#t is a conse6uence of these principles that upon the death of
the reser(ista, the reser(atario nearest to the prepositus the appellee in
this case: becomes, automaticall% and b% operation of law, the owner of
the reser(able propert%" )s alread% stated, that propert% is no part of the
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estate of the reser(ista, and does not e(en answer for the debts of the
latter" [ [ ["E
8ad the re(ersionar% propert% passed directl% from the praepositus, there
is no doubt that the plainti4s.appellees would ha(e been e=cluded b% the
defendant.appellant under the rules
of intestate succession" 'here is noreason wh% a di4erent result should obtain simpl% because Ethe
transmission of the propert% was dela%ed b% the interregnum of
the reser(aEG i"e", the propert% too a EdetourE through an ascendant ..
thereb% gi(ing rise to the reser(ation .. before its transmission to
the reser(atario"
pon the stipulated facts, and b% (irtue of the rulings alread% cited, the
defendant.appellant Dalisa% 'ongo.amacho is entitled to the entiret% of
the re(ersionar% propert% to the e=clusion of the plainti4s.appellees"
7+EREFORE, the appealed *udgment of the lower ourt is re(ersed and
set aside and the complaint is dismissed, with costs against the plainti4s.
appellants"
&O O/D/D"
8IRST DIVISION
REP!<LIC O8 THE PHILIPPINES,
'&'&s&*t& -/ t%& DIRECTOR O8
LANDS,
Petitioner,
versus
REGISTER O8 DEEDS O8 ROBAS
CIT=, ELI"A<ETH LEE, )*
PACITA =!LEE,
Respondents(
G.R. N. 15:2?0
Present/
PG<, C..2 Chairperson,
C'RP<,
C<R<',
'UCG', and
I@<'RD<)D@ C'0R<, .
Promulgated/
%ul& 1, #$$-
? ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ?
D E C I S I O N
CARPIO, $.$
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T%& C)s&
his is a petition for review of the Decision dated 1# %ul& #$$# and the
Resolution dated 9 "a& #$$ of the Court of 'ppeals in C')*(R( C+ o(
5-9$(
T%& 8)(ts
n "arch 19, Iee Iiong, a Chinese citi3en, .ought Iot o( 9-
from +icenta 'rcenas, Arancisco, Carmen Ramon, "ercedes, Concepcion,
"ariano, %ose, and "anuel, all surnamedDinglasan( Iot o( 9-, with an area of
1,574 s2uare meters, is located at the corner of Ro?as
'venue and Pavia 0treet in Ro?as Cit&( n Ae.ruar& 1944, Iee Iiong died intestate
and was survived .& his widow 'ng Chia, and his sons Iee Bing 8oo and Iee Bun
ing( <n $ %une 1947, the surviving heirs of Iee Iiong e?traudiciall& settled the
estate of the deceased and partitioned among themselves Iot o( 9-( >hen Iee
Bing 8oo and Iee Bun ing died, Iot o( 9- wastransferred .& succession to
their respective wives, @li3a.eth Iee [email protected] and Pacita Ku)Iee 6Pacita(
n the 195 case of (inglasan v. 3ee $un Ting , involving Iot o( 9-,
the Court held that even if the sale of the propert& was null and void for violating
the constitutional prohi.ition on the sale of land to an alien, still the doctrineof in pari delicto .arred the sellers from recovering the title to the propert&( @leven
&ears later, in the case of 3ee $un Ting v. udge Aligaen, the Court ordered the trial
court to dismiss the complaint of the Dinglasans for the recover& of Iot o( 9-(
'ppl&ing the doctrine of res 'udicata, the Court held that the case was a
mere relitigation of the same issues previousl& adudged with finalit& in
the (inglasan case, involving the same parties or their privies and concerning the
same su.ect matter(
<n 7 0eptem.er 199, @li3a.eth and Pacita 6private respondents filed a petition for reconstitution of title of Iot o( 9- .ecause the records of the
Register of Deeds, Ro?as Cit& were .urned during the war( <n <cto.er #$$1, the
Court held that the trial courts order of reconstitution was void for lacE of factual
support .ecause it was .ased merel& on the plan and technical description
approved .& the Iand Registration 'uthorit&(
"eanwhile, on # %anuar& 1995, petitioner Repu.lic of the Philippines
6petitioner, through the <ffice of the 0olicitor *eneral 6<0*, filed with the
Regional rial Court of Ro?as Cit& a Complaint for Reversion of itle against
private respondents and the Register of Deeds of Ro?asCit&, pra&ing that 61 the
sale of Iot o( 9- to Iee Iiong .e set aside for .eing null and void abinitio= and
6# Iot o( 9- .e reverted to the pu.lic domain for the 0tates disposal in
accordance with law(
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n their 'nswer, private respondents invoEed as affirmative defenses/ 61
prescription= 6# private ownership of Iot o( 9-= and 6 Iee Iiongs .eing a
.u&er in good faith and for value( Aurthermore, private respondents claimed that
as Ailipino citi3ens, the& are 2ualified to ac2uire Iot o( 9- .& succession(
he Register of Deeds of Ro?as Cit& did not file an answer(
<n 7 "a& 199, the trial court rendered a decision ordering the reversion of
Iot o( 9- to the 0tate(
<n appeal, the Court of 'ppeals rendered its Decision dated 1# %ul& #$$#,
reversing the trial courts decision and declaring private respondents as the
a.solute and lawful owners of Iot o( 9-( Petitioner moved for reconsideration,
which the Court of 'ppeals denied in its Resolutiondated 9 "a& #$$(
8ence, this petition for review(
T%& Ru*g + t%& T') Cu't
he trial court ordered the reversion of Iot o( 9- to the 0tate( he trialcourt held that private respondents could not have ac2uired a valid title over Iot
o( 9- .ecause the sale of the lot to their predecessor)in)interest Iee Iiong was
null and void( Being an innocent purchaser in good faith and for value did not cure
Iee Iiongs dis2ualification as an alien who is prohi.ited from ac2uiring land
under the Constitution( he trial court further held that prescription cannot .e
invoEed against the 0tate as regards an action for reversion or reconve&ance of
land to the 0tate(
T%& Ru*g + t%& Cu't + A&)s
he Court of 'ppeals agreed with the trial court that the 0tate is not .arred
.& prescription( 8owever, the Court of 'ppeals held that the trial court erred in
ordering the reversion of Iot o( 9- to the 0tate( 'lthough the sale of Iot o(
9- to Iee Iiong violated the constitutional prohi.ition on aliens ac2uiring land,
the Court of 'ppeals noted that Iot o( 9- had alread& .een ac2uired .&
private
respondents through succession( he transfer of Iot o( 9- to private
respondents, who are Ailipino citi3ens 2ualified to ac2uire lands, can no longer .e
impugned on the .asis of the invalidit& of the initial transfer( he flaw in the
original transaction is considered cured and the title of the transferee is deemed
valid considering that the o.ective of the constitutional proscription against alien
ownership of lands, that is to Eeep our lands in Ailipino hands, has .een achieved(
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T%& Issu&
Petitioner raises the lone issue that/
8@ C<GR <A 'PP@'I0 *R'+@IK @RR@D >8@ R@+@R0@D 'D 0@
'0D@ 8@ 'PP@'I@D D@C0< 'D D@CI'R@D PR+'@ R@0P<D@0 8@
'B0<IG@ 'D I'>AGI <>@R0 'D P<00@00<R0 <A I< <( 9- <A
R<M'0 CK C'D'0R@ C<0D@R* 8' I@@ I<*, >8< 0 ' 'I@,
'D 8G0, C<0G<'IIK PR<8B@D < <> R@'I PR<P@RK 8@
P8IPP@0, 'CLGR@D < R*8 <R I@ <+@R 0GB%@C I< >8C8 8@
C<GID 8'+@ R'0"@D BK 0GCC@00< < PR+'@ R@0P<D@0
PR@D@C@00<R0))@R@0(
T%& Ru*g + t%& Cu't
he petition is without merit(
Petitioner argues that since the sale of Iot o( 9- to Iee Iiong was void,
Iot o( 9- never .ecame part of the deceased Iee Iiongs estate( 8ence, Iot o(
9- could not .e
transmitted .&succession to Iee Iiongs surviving heirs andeventuall& to private respondents(
>e do not su.scri.e to petitioners position( he circumstances of this
case are similar to the case of (e Castro v. Teng /ueen Tan, wherein a residential
lot was sold to a Chinese citi3en( Gpon the death of the alien vendee, his heirs
entered into an e?traudicial settlement of the estate of the deceased and the su.ect
land was transferred to a son who was a naturali3ed Ailipino( 0u.se2uentl&, the
vendor of the lot filed a suit for annulment of sale for alleged violation of the
Constitution prohi.iting the sale of land to aliens( ndependentl& of the doctrineof in pari delicto, the Court sustained the sale, holding that while the vendee was
an alien at the time of the sale, the land has since .ecome the propert& of a
naturali3ed Ailipino citi3en who is constitutionall& 2ualified to own land(
0imilarl&, in this case, upon the death of the original vendee who was a
Chinese citi3en, his widow and two sons e?traudiciall& settled his estate, including
Iot o( 9-( >hen the two sons died, Iot o( 9-
was transferred .& succession to their respective spouses, herein private
respondents who are Ailipino citi3ens(
>e now discuss whether reversion proceedings is still via.le considering
that Iot o( 9- has alread& .een transfered to Ailipino citi3ens( n the
reconstitution case of 3ee v. %epublic of t"e P"ilippines involving Iot o( 9-, this
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Court e?plained that the <0* ma& initiate an action for reversion or escheat of
lands which were sold to aliens dis2ualified from ac2uiring lands under the
Constitution( 8owever, in the case of Iot o( 9-, the fact that it was alread&
transferred to Ailipinos militates against escheat proceedings, thus/
'lthough ownership of the land cannot revert to the original sellers, .ecause of the
doctrine of pari delicto, the 0olicitor *eneral ma& initiate an action for reversion or escheat
of the land to the 0tate, su.ect to other defenses, as hereafter set forth(
I* t%s ()s&, su-s&@u&*t ('(u3st)*(&s 3t)t& )g)*st &s(%&)t '(&&*gs
-&()us& t%& )* s * * t%& %)*s + 8*s. T%& 'g*) &*&&, L&& L*g, %)s
s*(& & )* t%& )* %)s -&&* *%&'t& -/ %s %&'s )* su-s&@u&*t/ t%&' %&'s,
&tt*&'s %&'&* [EF)-&t% L&& )* P)(t) =u L&&]. P&tt*&'s )'& 8* (tF&*s, )
+)(t t%& S(t' G&*&') &s *t sut&.
he constitutional proscription on alien ownership of lands of the pu.lic or private
domain was intended to protect lands from falling in the hands of non)Ailipinos( n this case,
however, there would .e no more pu.lic polic& violated since the land is in the hands of
Ailipinos 2ualified to ac2uire and own such land( Wf land is invalidl& transferred to an alien
who su.se2uentl& .ecomes a citi3en or transfers it to a citi3en, the flaw in the original
transaction is considered cured and the title of the transferee is rendered valid(X hus, the
su.se2uent transfer of the propert& to 2ualified Ailipinos ma& no longer .e impugned on the .asis of invalidit& of the initial transfer( he o.ective of the constitutional provision to Eeep
our lands in Ailipino hands has .een achieved( 6@mphasis supplied
n this case, the reversion proceedings was initiated onl& after almost 4$
&ears from the promulgation of the case of (inglasan v. 3ee $un Ting , where the
Court held that the sale of Iot o( 9- was null and void for violating the
constitutional prohi.ition on the sale of land to an alien( f petitioner had
commenced reversion proceedings when Iot o( 9- was still in the hands of theoriginal vendee who was an alien dis2ualified to hold title thereto, then reversion
of the land to the 0tate would undou.tedl& .e allowed( 8owever, this is not the
case here( >hen petitioner instituted the action for reversion of title in 1995, Iot
o( 9- had alread& .een transferred .& succession to private respondents who are
Ailipino citi3ens(
0ince Iot o( 9- has alread& .een transferred to Ailipino citi3ens, the flaw
in the original transaction is considered cured( 's held in C"avez v. Public ,states
Aut"ority/
hus, the Court has ruled consistentl& that where a Ailipino citi3en sells land to an
alien who later sells the land to a Ailipino, the invalidit& of the first transfer is corrected .&
the su.se2uent sale to a citi3en( 0imilarl&, where the alien who .u&s the land su.se2uentl&
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ac2uires Philippine citi3enship, the sale was validated since the purpose of the constitutional
.an to limit land ownership to Ailipinos has .een achieved( n short, t%& ) s'&g)'s t%&
(*sttut*) s@u)+()t* + t%& -u/&' t % )* + t%& )* s su-s&@u&*t/
t')*s+&''& t ) @u)+& )'t/, ' t%& -u/&' %3s&+ -&(3&s ) @u)+&
)'t/. 6@mphasis supplied
Clearl&, since Iot o( 9- has alread& .een transferred to private
respondents who are Ailipino citi3ens, the prior invalid sale to Iee Iiong can no
longer .e assailed( 8ence, reversion proceedings will no longer prosper since the
land is now in the hands of Ailipino citi3ens(
7HERE8ORE, we DEN= the petition( >e A88IR the Decision dated
1# %ul& #$$# and the Resolution dated 9 "a& #$$ of the Court of 'ppeals in
C')*(R( C+ o( 5-9$(
SO ORDERED(
*(R( <( 117#4( 'ugust #1, 1995!
B@*< "'G@I, IB@R'< "'G@I, I<R@U< "'G@I, PI'CD'
"'G@I, "'DR<' "'G@I, @0P@R'U' "'G@I, '*'P' "'G@I,
B'0I0' "'G@I, @"I' "'G@I and G"@R''"'G@I, petitioners2 vs. 8<( C<D@"< ( A@RR@R, Presiding %udge, Regional rial
Court, Branch 7, Iinga&en, Pangasinan, "<D@0' B'I'U'R and @0'0I'<'
"'G@I, respondent s.
D @ C 0 <
+G*, (/
he propert& involved in this petition for review on certiorari is the inheritance left .& an
illegitimate child who died intestate without an& surviving descendant or ascendant(
Petitioners, the legitimate children of spouses 'ntonio "anuel and Beatri3 *uiling, initiated
this suit( During his marriage with Beatri3, 'ntonio had an e?tra)marital affair with one
Grsula Bautista( Arom this relationship, %uan "anuel was .orn( 0everal &ears passed .efore
'ntonio "anuel, his wife Beatri3, and his mistress Grsula finall& crossed the .ar on,
respectivel&, $ 'ugust 19$, $5 Ae.ruar& 19-1, and $4 ovem.er 197(
%uan "anuel, the illegitimate son of 'ntonio, married @speran3a *am.a( n consideration of
the marriage, a donation propter nuptias over a parcel of land, with an area of #,7$$ s2uare
meters, covered .& <riginal Certificate of itle 6:<C: o( P)#$594 was e?ecuted in favor
of %uan "anuel .& Iaurenciana "anuel( wo other parcels of land, covered .& <C P)
199$# and ransfer Certificate of itle 6:C: o( 4114, were later .ought .& %uan and
registered in his name( he couple were not .lessed with a child of their own( heir desire
to have one impelled the spouses to taEe private respondent "odesta "anuel)Balta3ar into
their fold and so raised her as their own :daughter(:
<n $ %une 19-$, %uan "anuel e?ecuted in favor of @stanislaoa "anuel a Deed of 0ale Con
Pacto de %etro 6with a 1$)&ear period of redemption over a one)half 61F# portion of his
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land covered .& C o( 4114( %uan "anuel died intestate on #1 Ae.ruar& 199$( wo
&ears later, or on $4 Ae.ruar& 199#, @speran3a *am.a also passed awa&(
<n $5 "arch 199#, a month after the death of @speran3a, "odesta e?ecuted an 'ffidavit of
0elf)'dudication claiming for herself the three parcels of land covered .& <C P)#$594,
<C P)199$# and C o( 4114 6all still in the name of %uan "anuel( Aollowing theregistration of the document of adudication with the <ffice of the Register of Deeds, the
three titles 6<C P)#$594, <C P)199$# and C o( 4114 in the name of %uan "anuel
were canceled and new titles, C o( 1-4##, C o( 1-4##4 and C o( 1-4##5, were
issued in the name of "odesta "anuel)Balta3ar( <n 19 <cto.er 199#, "odesta e?ecuted in
favor of her co)respondent @stanislaoa "anuel a Deed of Renunciation and Luitclaim over
the unredeemed one)half 61F# portion of the land 6now covered .& C o( 1-4##5 that
was sold to the latter .& %uan "anuel under the 19-$ Deed of 0ale Con Pacto de %etro(
hese acts of "odesta apparentl& did not sit well with petitioners( n a complaint filed
.efore the Regional rial Court of Iinga&en, Pangasinan, the petitioners sought the
declaration of nullit& of the aforesaid instruments(
he case, there .eing no material dispute on the facts, was su.mitted to the court a 2uo for
summar& udgment(
he trial court, in its now assailed 15th 'ugust 1994 decision, s3ss& the complaint
holding that petitioners, not .eing heirs abintestato of their illegitimate .rother %uan "anuel,
were not the real parties)in)interest to institute the suit( Petitioners were also ordered to
ointl& and severall& 6solidaril& pa& 6a respondent "odesta "anuel)Balta3ar the sum of
P5,$$$($$ for moral damages, P5,$$$($$ for e?emplar& damages, P5,$$$($$ for attorne&;sfees and P5$$($$ for litigation e?penses and 6. @stanislaoa "anuel the sum of P5,$$$($$ for
moral damages, P5,$$$($$ for e?emplar& damages and P5$$($$ for attorne&;s fees(
Petitioners; motion for reconsideration was denied .& the trial court(
he petition .efore us raises the following contentions/ hat )
:1( 8@ I<>@R C<GR 68'0 A'I@D < C<0D@R 8@ I'0 P'R'*R'P8 <A
'RCI@ 994 <A 8@ @> C+I C<D@, '0 8@ C<R<II* I'>
'PPIC'BI@ BK +RG@ <A 8@ 'D"@D A'C0, 'D < 'RCI@ 99# <A
8@ 0'"@ C<D@(
W# 8@ I<>@R C<GR, < 'GII* 'II 8@ 'C0 <A, 'D +<D* 'IID<CG"@0 @M@CG@D BK, R@0P<D@ "<D@0' B'I'U'R, >8<
'RR<*'@D G< 8@R0@IA 8@ R*80 <A ' 8@R < 8@ @0'@ <A
D@C@D@ %G' "'G@I, 68'0 +RG'IIK *R'@D 0'D R@0P<D@
8@ 0'G0 <A ' 8@R "'A@0IK C<R'RK < I'>, "<R'I0 'D
PGBIC P<ICK(
W( < @A<RC@ <@;0 R*8 >8@ 8@K 'R@ +<I'@D 0 @+@R ' I@*'I
>R<*(:
Petitioners argue that the& are the legal heirs over one)half of %uan;s intestate estate 6while
the other half would pertain to %uan;s surviving spouse under the provision of the last
paragraph of 'rticle 994 of the Civil Code, providing thusl&/
:'rt( 994( n default of the father or mother, an illegitimate child shall .e succeeded .& his
or her surviving spouse, who shall .e entitled to the entire estate(
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:f the widow or widower should survive with .rothers and sisters, nephews and nieces, she
or he shall inherit one)half of the estate, and the latter the other half(: 6Gnderscoring
supplied(
Respondents, in turn, su.mit that 'rticle 994 should .e read in conunction with 'rticle 99#
of the Civil Code, which reads/:'rt( 99#( 'n illegitimate child has no right to inherit ab intestato from the legitimate
children and relatives of his father or mother= nor shall such children or relative inherit in the
same manner from the illegitimate child(: 6Gnderscoring supplied(
'rticle 99#, a .asic postulate, enunciates what is so commonl& referred to in
the
rules on succession as the :principle of a.solute separation .etween the legitimate famil&
and the illegitimate famil&(: he doctrine reects succession a. intestato in the collateral
line .etween legitimate relatives, on the one hand, and illegitimate relatives, on other hand,
although it does not totall& disavowsuch succession in the direct line( 0ince the rule is
predicated on the presumed will of the decedent, it has no application, however, on
testamentar& dispositions(
his :.arrier: .etween the mem.ers of the legitimate and illegitimate famil& in intestac& is
e?plained .& a noted civilist( 8is thesis/
:>hat is meant .& the law when it speaEs of .rothers and sisters, nephews and nieces, as
legal or intestate heirs of an illegitimate childH t must .e noted that under 'rt( 99# of the
Code, there is a .arrier dividing mem.ers of the illegitimate famil& from mem.ers of the
legitimate famil&( t is clear that .& virtue of this .arrier, the legitimate .rothers and sisters
as well as the children, whether legitimate or illegitimate, of such .rothers and sisters, cannotinherit from the illegitimate child( C*s&@u&*t/, %&* t%& ) s&)s + -'t%&'s )*
sst&'s, *&%&s )* *&(&s )s &g) %&'s + )* >3)t& (%, t '&+&'s t >3)t&
-'t%&'s )* sst&'s )s & )s t t%& (%'&*, %&t%&' >3)t& ' >3)t&, + su(%
-'t%&'s )* sst&'s(: 6@mphasis supplied
he Court, too, has had occasions to e?plain this :iron curtain,: firstl&, in the earl& case of
*re& v( Aa.ie and, then, in the relativel& recent cases of Dia3 v( ntermediate 'ppellate Court
and De la Puerta v( Court of 'ppeals( n Dia3, we have said/
:'rticle 99# of the ew Civil Code ? ? ? prohi.its a.solutel& a succession ab
intestato .etween the illegitimate child and the legitimate children and relatives of the father or mother of said legitimate child( he& ma& have a natural tie of .lood, .ut this is not
recogni3ed .& law for the purposes of 'rticle 99#( Between the legitimate famil& and the
illegitimate famil& there is presumed to .e an intervening antagonism and incompati.ilit&(
he illegitimate child is disgracefull& looEed down upon .& the legitimate famil&= the
legitimate famil& is, in turn, hated .& the illegitimate child= the latter considers the privileged
condition of the former, and the resources of which it is there.& deprived= the former, in turn,
sees in the illegitimate child nothing .ut the product of sin, palpa.le evidence of a .lemish
.roEen in life= the law does no more than recogni3e this truth, .& avoiding further grounds of
resentment(:
he rule in 'rticle 99# has consistentl& .een applied .& the Court in several other cases(
hus, it has ruled that where the illegitimate child had half).rothers who were legitimate, the
latter had no right to the former;s inheritance= that the legitimate collateral relatives of the
mother cannot succeed from her illegitimate child= that a natural child cannot represent his
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natural fatherin the succession to the estate of the legitimate grandparent= that the natural
daughter cannot succeed to the estate of her deceased uncle who is a legitimate .rother of her
natural father= and that an illegitimate child has no right to inherit ab intestato from the
legitimate children and relatives of his father( ndeed, the law on succession is animated .& a
uniform general intent, and thus no part should .e rendered inoperative .&, .ut must alwa&s .e construed in relation to, an& other part as to produce a harmonious whole(
n passing, we might, in eas& graphic presentation, collate the order of preference and
concurrence in intestac& e?pressed in 'rticle 97- through 'rticle 1$14, inclusive, of the Civil
Code= vi3/
%rder of Preference %rder of !oncurrence
6a Iegitimate Children and Descendants 6a 3egitimate C"ildren and (escendants, llegitimate Children
and Descendants, and 0urviving 0pouse
6. Iegitimate Parents and 'scendants 6. 3egitimate Parents and Ascendants2 llegitimate Childrenand Descendants, and 0urviving 0pouse
6c llegitimate Children and Descendants 6in the a.sence of CDs
and IP's, the llegitimate Parents
6c Illegitimate C"ildren and (escendants and 0urviving
0pouse
6d 0urviving 0pouse 6d Surviving Spouse and llegitimate Parents
6e Brothers and 0istersFephews and ieces 6e $rot"ers and Sisters:)ep"e#s and )ieces and 0urviving
0pouse
6f <ther Collateral Relatives 6within the fifth civil degree 6f 'lone
6g 0tate 6g 'lone
n her answer to the complaint, "odesta candidl& admitted that she herself is not an intestateheir of %uan "anuel( 0he is right( ' ward 6ampon, without the .enefit of formal 6udicial
adoption, is neither a compulsor& nor a legal heir(
>e must hold, nevertheless, that the complaint of petitioners seeEing the nullit& of the
'ffidavit of 0elf)'dudication e?ecuted .& "odesta, the three 6 C;s issued to her favor,
as well as the Deed of Renunciation and Luitclaim in favor of @stanislaoa "anuel, was
properl& dismissed .& the trial court( Petitioners, not .eing the real :parties)in)interestX in
the case, had neither the standing nor the cause of action to initiate the complaint(
he Court, however, sees no sufficient reason to sustain the award of amounts for moral and
e?emplar& damages, attorne&;s fees and litigation e?penses( 'n adverse result of a suit inlaw does not mean that its advocac& is necessaril& so wrongful as to ustif& an assessment of
damages against the actor(
7HERE8ORE, the appealed decision of the Regional rial Court of Pangasinan 6Branch
7 is 'AAR"@D, e?cept insofar as it has awarded moral and e?emplar& damages, as well
as attorne&;s fees and litigation e?penses, in favor of private respondents, which portion is
here.& D@I@@D( o special pronouncement on costs(
0< <RD@R@D(
*(R( o( 574( %une 17, 19-7!
'0@I"' D'U, guardian of +C<R, R<DR*<, '0@I"' and "*G@I, all
surnamed 0'@R<, petitioners, and A@IMB@R' P'CGR0', guardian of A@D@RC<
0'@R<, et al(, vs( @R"@D'@ 'PP@II'@ C<GR and A@I0' P'"G
%'RD, respondents(
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D @ C 0 <
P'R'0, ./
Private respondent filed a Petition dated %anuar& #, 197 with the Court of Airst nstance of
Cavite in 0p( Proc( Case o( B)#1, :n he "atter of the ntestate @state of the late 0imona
Pamuti +da( de 0antero:, pra&ing among other things, that the corresponding letters of 'dministration .e issued in her favor and that she .e appointed as special administratri? of
the properties of the deceased 0imona Pamuti +da( de 0antero(
t is undisputed/ 1 that Aelisa Pamuti %ardin is a niece of 0imona Pamuti +da( de 0antero
who together with Aelisa;s mother %uliana were the onl& legitimate children of the spouses
Aelipe Pamuti and Petronila 'suncion= # that %uliana married 0imon %ardin and out of their
union were .orn Aelisa Pamuti and another child who died during infanc&= that 0imona
Pamuti +da( de 0antero is the widow of Pascual 0antero and the mother of Pa.lo 0antero= 4
that Pa.lo 0antero was the onl& legitimate son of his parents Pascual 0antero and 0imona
Pamuti +da( de 0antero= 5 that Pascual 0antero died in 197$= Pa.lo 0antero in 197 and 0i)
mona 0antero in 197; that Pa.lo 0antero, at the time of his death was survived .& his
mother 0imona 0antero and his si? minor natural children to wit/ four minor children with
'nselma Dia3 and two minor children with Aeli?.erta Pacursa(
%udge %ose Raval in his <rders dated Decem.er 1, 197 and Decem.er 9, 197 declared
Aelisa Pamuti %ardin as the sole legitimate heir of 0imona Pamuti +da( de 0antero(
Before the trial court, there were 4 interrelated cases filed to wit/
:a 0p( Proc( o( B)4 ) is the Petition for for the Ietters of 'dministration of the ntestate @state
of Pa.lo 0antero=:. 0p( Proc( o( B)5 ) is the Petition for the Ietters of 'dministration of the ntestate @state of
Pascual 0antero=
:c 0p( Proc( o( B)7 ) is the Petition for *uardianship over the properties of an ncompetent
Person, 0imona Pamuti +da( de 0antero=
:e 0p( Proc( o( B)#1 ) is the Petition for 0ettlement of the ntestate @state of 0imona Pamuti
+da( de 0antero(:
Aelisa %ardin upon her "otion to ntervene in 0p( Proceedings os( B)4 and B)5, was
allowed to intervene in the intestate estates of Pa.lo 0antero and Pascual 0antero .& <rder of
the Court dated 'ugust #4, 1977(Petitioner 'nselma Dia3, as guardian of her minor children, filed her :<pposition and
"otion to @?clude Aelisa Pamuti)%ardin dated "arch 1, 19-$, from further taEing part or
intervening in the settlement of the intestate estate of 0imona Pamuti +da( de 0antero, as
well as in the intestate estates of Pascual 0antero and Pa.lo 0antero(
Aeli?.erta Pacursa guardian for her minor children, filed thru counsel, her "anifestation of
"arch 14, 19-$ adopting the <pposition and "otion to @?clude Aelisa Pamuti, filed .&
'nselma Dia3(
<n "a& #$, 19-$, %udge ldefonso "( Ble3a issued an order e?cluding Aelisa %ardin :from
further taEing part or intervening in the settlement of the intestate estate of 0imona Pamuti
+da( de 0antero, as well as in the intestate estates of Pascual 0antero and Pa.lo 0antero and
declared her to .e, not an heir of the deceased 0imona Pamuti +da( de 0antero(:
'fter her "otion for Reconsideration was denied .& the trial court in its order dated
ovem.er 1, 19-$, Aelisa P( %ardin filed her appeal to the ntermediate 'ppellate Court in
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C')*(R( o( 9-14)R( ' decision was rendered .& the ntermediate 'ppellate Court on
Decem.er 14, 19- 6reversing the decision of the trial court the dispositive portion of which
reads )
:>8@R@A<R@, finding the <rder appealed from not consistent with the facts and law
applica.le, the same is here.& set aside and another one entered sustaining the <rders of Decem.er 1 and 9, 197 declaring the petitioner as the sole heir of 0imona Pamuti +da( de
0antero and ordering oppositors)appellees not to interfere in the proceeding for the
declaration of heirship in the estate of 0imona Pamuti +da( de 0antero(:
:Costs against the oppositors)appellees(:
he "otion for Reconsideration filed .& oppositors)appellees 6petitioners herein was denied
.& the same respondent court in its order dated Ae.ruar& 17, 19-4 hence, the present petition
for Review with the following/
'00*"@ <A @RR<R0
( he Decision erred in ignoring the right to intestate succession of
petitioners grandchildren 0antero as direct descending line 6'rt( 97- andFor
naturalF:illegitimate children: 6'rt( 9-- and prefering a niece, who is a collateral relative
6'rt( 1$$=
( he Decision erred in den&ing the right of representation of the natural
grandchildren 0antero to represent their father Pa.lo 0antero
in the succession to the intestate
estate of their grandmother 0imona Pamuti +da( de 0antero 6'rt( 9-#=
( he Decision erred in mistaEing the intestate estate of the
grandmother 0imona Pamuti +da( de 0antero as the estate of :legitimate child or relative: of Pa.lo 0antero, her son and father of the petitioners grandchildren 0antero=
+( he Decision erred in ruling that petitioner)appellant Aelisa P( %ardin who is
a niece and therefore a collateral relative of 0imona Pamuti +da( de 0antero e?cludes the
natural children of her son Pa.lo 0antero, who are her
direct descendants andForgrand children=
+( he Decision erred in appl&ing 'rt( 99#, when 'rts( 9--, 9-9 and 99$ are the
applica.le provisions of law
onintestate succession= and
+( he Decision erred in considering the orders of Decem.er 1 and Decem.er 9,
197 which are provisional and interlocutor& as final and e?ecutor&(he real issue in this case ma& .e .riefl& stated as follows) who are the legal heirs of 0imona
Pamuti +da( de 0antero) her niece Aelisa Pamuti %ardin or her grandchildren 6the natural
children of Pa.lo 0anteroH
he dispute at .ar refers onl& to the intestate estate of 0imona Pamuti +da( de 0antero and
the issue here is whether oppositors)appellees 6petitioners herein as illegitimate children of
Pa.lo 0antero could inherit from 0imona Pamuti +da( de 0antero, .& right of representation
of their father Pa.lo 0antero who is a legitimate child of 0imona Pamuti +da( de 0antero(
ow then what is the appropriate law on the matterH Petitioners contend in their pleadings
that 'rt( 99$ of the ew Civil Code is the applica.le law on the case( he& contend that said
provision of the ew Civil Code modifies the rule in 'rticle 941 6<ld Civil Code and
recogni3es the right of representation 6'rt( 97$ to descendants, whether legitimate or
illegitimate and that 'rt( 941, 0panish Civil Code denied illegitimate children the right to
represent their deceased parents and inherit from their deceased grandparents, .ut that Rule
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was e?pressl& changed andFor amended .& 'rt( 99$ ew Civil Code which e?pressl& grants
the illegitimate children the right to represent their deceased father 6Pa.lo 0antero in the
estate of their grandmother, 60imona Pamuti:
Petitioners; contention holds no water( 0ince the hereditar& conflict refers solel& to the
intestate estate of 0imona Pamuti +da( de 0antero, who is the legitimate mother of Pa.lo0antero, the applica.le law is the provision of 'rt( 99# of the Civil Code which reads as
follows/
'R( 99#( 'n illegitimate child has no right to inherit a. intestato from the legitimate
children and relatives of his father or mother= nor shall such children or relatives inherit in
the same manner from the illegitimate child( 694a
Pa.lo 0antero is a legitimate child, he is not an illegitimate child( <n the other hand, the
oppositors 6petitioners herein are the illegitimate children of Pa.lo 0antero(
'rticle 99# of the ew Civil Code provides a .arrier or iron curtain in that it
prohi.its a.solutel& a succession a. intestato .etween the illegitimate child and the
legitimate children and relatives of the father or mother of said legitimate child( he& ma&
have a natural tie of .lood, .ut this is not recogni3ed .& law for the purposes of 'rt( 99#(
Between the legitimate famil& and the illegitimate famil& there is presumed to .e an
intervening antagonism and incompati.ilit&( he illegitimate child is disgracefull& looEed
down upon .& the legitimate famil&= the famil& is in turn, hated .& the illegitimate child= the
latter considers the privileged condition of the former, and the resources of which it is
there.& deprived= the former, in turn, sees in the illegitimate child nothing .ut the product of
sin, palpa.le evidence of a .lemish .roEen in life= the law does no more than recogni3e thistruth, .& avoiding further grounds of resentment(
hus, petitioners herein cannot represent their father Pa.lo 0antero in the succession of the
latter to the intestate estate of his legitimate mother 0imona Pamuti +da( de 0antero, .ecause
of the .arrier provided for under 'rt( 99# of the ew Civil Code(
n answer to the erroneous contention of petitioners that 'rticle 941 of the 0panish Civil
Code is changed .& 'rticle 99$ of the ew Civil Code, >e are reproducing herewith the
Reflections of the illustrious 8on( %ustice %ose B(I( Re&es which also finds full support from
other civilists, to wit/
:n the 0panish Civil Code of 1--9 the right of representation was admitted onl& within thelegitimate famil&= so much so that 'rticle 94 of that Code prescri.ed that an illegitimate
child can not inherit a. intestato from the legitimate children and relatives of his father and
mother( he Civil Code of the Philippines apparentl& adhered to this principle since it
reproduced 'rticle 94 of the 0panish Code in its own 'rt( 99#, .ut with fine inconsistenc&,
in su.se2uent articles 699$, 995 and 99- our Code allows the hereditar& portion of the
illegitimate child to pass to his own descendants, whether legitimate or illegitimate( 0o that
while 'rt( 99# prevents the illegitimate issue of a legitimate child from representing him
in the intestate succession of the grandparent, the illegitimates of an illegitimate child can
now do so( his difference .eing indefensi.le and unwarranted, in the future revision of the
Civil Code we shall have to maEe a choice and decide either that the illegitimate issue eno&s
in all cases the right of representation, in which case 'rt( 99# must .e suppressed= or
contrariwise maintain said article and modif& 'rticles 995 and 99-( he first solution would
.e more in accord with an enlightened attitude vis)a)vis illegitimate children( 6Reflections
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on the Reform of 8ereditar&
succession, %<GR'I of the ntegrated Bar of the Philippines,
Airst Luater, 197, +olume 4, um.er 1, pp( 4$)41(
t is therefore clear from 'rticle 99# of the ew Civil Code that the phrase :legitimate
children and relatives of his father or mother: includes 0imona Pamuti +da( de 0antero as
the word :relative: includes all the Eindred of the person spoEen of( he record shows thatfrom the commencement of this case the onl& parties who claimed to .e the legitimate heirs
of the late 0imona Pamuti +da( de 0antero are Aelisa Pamuti %ardin and the si? minor natural
or illegitimate children of Pa.lo 0antero( 0ince petitioners herein are .arred .& the
provisions of 'rticle 99#, the respondent ntermediate 'ppellate Court did not commit an&
error in holding Aelisa Pamuti)%ardin to .e the sole legitimate heir to the intestate estate of
the late 0imona Pamuti +da( de 0antero(
Iastl&, petitioners claim that the respondent ntermediate 'ppellate Court erred in ruling that
the <rders of the Court a 2uo dated Decem.er 1, 197 and Decem.er 9, 197 are final and
e?ecutor&( 0uch contention is without merit( he 8on( %udge %ose Raval in his order dated
Decem.er 1, 197 held that the oppositors 6petitioners herein are not entitled to intervene
and hence not allowed to intervene in the proceedings for the declaration of the heirship in
the intestate estate of 0imona Pamuti +da( de 0antero( 0u.se2uentl&, %udge %ose Raval
issued an <rder, dated Decem.er 9, 197, which declared Aelisa Pamuti)%ardin to .e the sole
legitimate heir of 0imona Pamuti( he said <rders were never made the su.ects of either a
motion for reconsideration or a perfected appeal( 8ence, said orders which long .ecame
final and e?ecutor& are alread& removed from the power of urisdiction of the lower court to
decide anew( he onl& power retained .& the lower court, after a udgment has .ecome finaland e?ecutor& is to order its e?ecution( he respondent Court did not err therefore in ruling
that the <rder of the Court a 2uo dated "a& $, 19-$ e?cluding Aelisa Pamuti)%ardin as
intestate heir of the deceased 0imona Pamuti +da( de 0antero :is clearl& a total reversal of an
<rder which has .ecome final and e?ecutor&, hence null and void(:
7HERE8ORE, this petition is here.& D0"00@D, and the assailed decision is here.&
'AAR"@D(
0< <RD@R@D(
ALONZO Q. ANCHETA, G.R. No. 139868
Petitioner,
Present:
PANGANIBAN,C.J.(Chairperson)
- versus - ∗YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO,JJ.
CANDELARIA GUERSEY-
DALAYGON, Promulgated:
Respondent. June 8, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
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D E C I S I O N
AUSTRIA-MARTINEZ,J.:
Spouses Audrey O’Neill (Audrey) and W. Richard Guersey (Richard) were
American citizens who have resided in the Philippines for 30 years. They have an
adopted daughter, Kyle Guersey Hill (Kyle). On July 29, 1979, Audrey died, leaving
a will. In it, she bequeathed her entire estate to Richard, who was also designated
as executor. The will was admitted to probate before the Orphan’s Court ofBaltimore, Maryland, U.S.A, which named James N. Phillips as executor due to
Richard’s renunciation of his appointment. The court also named Atty. Alonzo
Q. Ancheta (petitioner) of the Quasha Asperilla Ancheta Pena & Nolasco Law
Offices as ancillary administrator.
In 1981, Richard married Candelaria Guersey-Dalaygon (respondent) with
whom he has two children, namely, Kimberly and Kevin.
On October 12, 1982, Audrey’s will was also admitted to probate by the then
Court of First Instance of Rizal, Branch 25, Seventh Judicial District, Pasig, in
Special Proceeding No. 9625. As administrator of Audrey’s estate in the Philippines,
petitioner filed an inventory and appraisal of the following properties: (1) Audrey’s
conjugal share in real estate with improvements located at 28 Pili Avenue, Forbes
Park, Makati, Metro Manila, valued at P764,865.00 (Makati property); (2) a current
account in Audrey’s name with a cash balance of P12,417.97; and (3) 64,444 shares
of stock in A/G Interiors, Inc. worth P64,444.00.
On July 20, 1984, Richard died, leaving a will, wherein he bequeathed his entire
estate to respondent, save for his rights and interests over the A/G Interiors, Inc.
shares, which he left to Kyle. The will was also admitted to probate by the Orphan’s
Court of Ann Arundel, Maryland, U.S.A, and James N. Phillips was likewise
appointed as executor, who in turn, designated Atty. William Quasha or any member
of the Quasha Asperilla Ancheta Pena & Nolasco Law Offices, as ancillary
administrator.
Richard’s will was then submitted for probate before the Regional Trial Court of
Makati, Branch 138, docketed as Special Proceeding No. M-888. Atty. Quasha was
appointed as ancillary administrator on July 24, 1986.
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On October 19, 1987, petitioner filed in Special Proceeding No. 9625, a
motion to declare Richard and Kyle as heirs of Audrey. Petitioner also filed on
October 23, 1987, a project of partition of Audrey’s estate, with Richard being
apportioned the ¾ undivided interest in the Makati property, 48.333 shares in A/G
Interiors, Inc., and P9,313.48 from the Citibank current account; and Kyle, the ¼undivided interest in the Makati property, 16,111 shares in A/G Interiors, Inc.,
and P3,104.49 in cash.
The motion and project of partition was granted and approved by the trial court
in its Order dated February 12, 1988. The trial court also issued an Order on April 7,
1988, directing the Register of Deeds of Makati to cancel TCT No. 69792 in the
name of Richard and to issue a new title in the joint names of the Estate of W.
Richard Guersey (¾ undivided interest) and Kyle (¼ undivided interest); directing the
Secretary of A/G Interiors, Inc. to transfer 48.333 shares to the Estate of W.
Richard Guersey and 16.111 shares to Kyle; and directing the Citibank to release the
amount of P12,417.97 to the ancillary administrator for distribution to the heirs.
Consequently, the Register of Deeds of Makati issued on June 23, 1988, TCT
No. 155823 in the names of the Estate of W. Richard Guersey and Kyle.
Meanwhile, the ancillary administrator in Special Proceeding No. M-888 also
filed a project of partition wherein2
/5 of Richard’s ¾ undivided interest in the Makatiproperty was allocated to respondent, while3 /5 thereof were allocated to Richard’s
three children. This was opposed by respondent on the ground that under the law of
the State of Maryland, “a legacy passes to the legatee the entire interest of the
testator in the property subject of the legacy.” Since Richard left his entire estate
to respondent, except for his rights and interests over the A/G Interiors, Inc, shares,
then his entire ¾ undivided interest in the Makati property should be given to
respondent.
The trial court found merit in respondent’s opposition, and in its Order dated
December 6, 1991, disapproved the project of partition insofar as it affects the
Makati property. The trial court also adjudicated Richard’s entire ¾ undivided
interest in the Makati property to respondent.
On October 20, 1993, respondent filed with the Court of Appeals (CA) an
amended complaint for the annulment of the trial court’s Orders dated February 12,
1988 and April 7, 1988, issued in Special Proceeding No. 9625. Respondent
contended that petitioner willfully breached his fiduciary duty when he disregardedthe laws of the State of Maryland on the distribution of Audrey’s estate in accordance
with her will. Respondent argued that since Audrey devised her entire estate to
Richard, then the Makati property should be wholly adjudicated to him, and not
merely ¾ thereof, and since Richard left his entire estate, except for his rights and
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interests over the A/G Interiors, Inc., to respondent, then the entire Makati property
should now pertain to respondent.
Petitioner filed his Answer denying respondent’s allegations. Petitioner
contended that he acted in good faith in submitting the project of partition before thetrial court in Special Proceeding No. 9625, as he had no knowledge of the State of
Maryland’s laws on testate and intestate succession. Petitioner alleged that he
believed that it is to the “best interests of the surviving children that Philippine law be
applied as they would receive their just shares.” Petitioner also alleged that the
orders sought to be annulled are already final and executory, and cannot be set
aside.
On March 18, 1999, the CA rendered the assailed Decision annulling the trial
court’s Orders dated February 12, 1988 and April 7, 1988, in Special Proceeding No.
9625. The dispositive portion of the assailed Decision provides:
WHEREFORE, the assailed Orders of February 12, 1998 and April 7, 1988
are hereby ANNULLED and, in lieu thereof, a new one is entered ordering:
(a) The adjudication of the entire estate of Audrey O’Neill Guersey in favor of
the estate of W. Richard Guersey; and
(b) The cancellation of Transfer Certificate of Title No. 15583 of the Makati
City Registry and the issuance of a new title in the name of the estate of W. Richard
Guersey.
SO ORDERED.
Petitioner filed a motion for reconsideration, but this was denied by the CA per
Resolution dated August 27, 1999.
Hence, the herein petition for review oncertiorari under Rule 45 of the Rules
of Court alleging that the CA gravely erred in not holding that:
A) THE ORDERS OF 12 FEBRUARY 1988 AND 07 APRIL 1988 IN SPECIAL
PROCEEDINGS NO. 9625 “IN THE MATTER OF THE PETITION FOR PROBATE
OF THE WILL OF THE DECEASED AUDREY GUERSEY, ALONZO Q. ANCHETA,
ANCILLARY ADMINISTRATOR”, ARE VALID AND BINDING AND HAVE LONG
BECOME FINAL AND HAVE BEEN FULLY IMPLEMENTED AND EXECUTED ANDCAN NO LONGER BE ANNULLED.
B) THE ANCILLARY ADMINISTRATOR HAVING ACTED IN GOOD FAITH, DID
NOT COMMIT FRAUD, EITHER EXTRINSIC OR INTRINSIC, IN THE
PERFORMANCE OF HIS DUTIES AS ANCILLARY ADMINISTRATOR OF AUDREY
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O’NEIL GUERSEY’S ESTATE IN THE PHILIPPINES, AND THAT NO FRAUD,
EITHER EXTRINSIC OR INTRINSIC, WAS EMPLOYED BY [HIM] IN PROCURING
SAID ORDERS.
Petitioner reiterates his arguments before the CA that the Ordersdated February 12, 1988 and April 7, 1988 can no longer be annulled
because it is a final judgment, which is “conclusive upon the administration
as to all matters involved in such judgment or order, and will determine for
all time and in all courts, as far as the parties to the proceedings are
concerned, all matters therein determined,” and the same has already been
executed.
Petitioner also contends that that he acted in good faith in performing
his duties as an ancillary administrator. He maintains that at the time of the
filing of the project of partition, he was not aware of the relevant laws of the
State of Maryland, such that the partition was made in accordance with
Philippine laws. Petitioner also imputes knowledge on the part of
respondent with regard to the terms of Aubrey’s will, stating that as early as
1984, he already apprised respondent of the contents of the will and how
the estate will be divided.
Respondent argues that petitioner’s breach of his fiduciary duty as
ancillary administrator of Aubrey’s estate amounted to extrinsic fraud.
According to respondent, petitioner was duty-bound to follow the express
terms of Aubrey’s will, and his denial of knowledge of the laws of Maryland
cannot stand because petitioner is a senior partner in a prestigious law firm
and it was his duty to know the relevant laws.
Respondent also states that she was not able to file any opposition to the
project of partition because she was not a party thereto and she learned of the
provision of Aubrey’s will bequeathing entirely her estate to Richard only after Atty.
Ancheta filed a project of partition in Special Proceeding No. M-888 for the
settlement of Richard’s estate.
A decree of distribution of the estate of a deceased person vests the title to
the land of the estate in the distributees, which, if erroneous may be corrected by a
timely appeal. Once it becomes final, its binding effect is like any other judgmentin
rem. However, in exceptional cases, a final decree of distribution of the estate may
be set aside for lack of jurisdiction or fraud. Further, inRamon v. Ortuzar, the Court
ruled that a party interested in a probate proceeding may have a final liquidation set
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aside when he is left out by reason of circumstances beyond his control or through
mistake or inadvertence not imputable to negligence.
The petition for annulment was filed before the CA on October 20, 1993,
before the issuance of the 1997 Rules of Civil Procedure; hence, the applicable lawisBatas Pambansa Blg. 129 (B.P. 129) or the Judiciary Reorganization Act of 1980.
An annulment of judgment filed under B.P. 129 may be based on the ground that a
judgment is void for want of jurisdiction or that the judgment was obtained by
extrinsic fraud. For fraud to become a basis for annulment of judgment, it has to be
extrinsic or actual, and must be brought within four years from the discovery of the
fraud.
In the present case, respondent alleged extrinsic fraud as basis for the
annulment of the RTC Orders dated February 12, 1988 and April 7, 1988. The CA
found merit in respondent’s cause and found that petitioner’s failure to follow the
terms of Audrey’s will, despite the latter’s declaration of good faith, amounted to
extrinsic fraud. The CA ruled that under Article 16 of the Civil Code, it is the national
law of the decedent that is applicable, hence, petitioner should have distributed
Aubrey’s estate in accordance with the terms of her will. The CA also found that
petitioner was prompted to distribute Audrey’s estate in accordance with Philippine
laws in order to equally benefit Audrey and Richard Guersey’s adopted daughter,
Kyle Guersey Hill.
Petitioner contends that respondent’s cause of action had already prescribed
because as early as 1984, respondent was already well aware of the terms of
Audrey’s will, and the complaint was filed only in 1993. Respondent, on the other
hand, justified her lack of immediate action by saying that she had no opportunity to
question petitioner’s acts since she was not a party to Special Proceeding No. 9625,
and it was only after Atty. Anchetafiled the project of partition in Special Proceeding
No. M-888, reducing her inheritance in the estate of Richard that she was prompted
to seek another counsel to protect her interest.
It should be pointed out that the prescriptive period for annulment of judgment
based on extrinsic fraud commences to run from thediscovery of the fraud or
fraudulent act/s. Respondent’s knowledge of the terms of Audrey’s will is
immaterial in this case since it is not the fraud complained of. Rather, it is petitioner’s
failure to introduce in evidence the pertinent law of the State of Maryland that is the
fraudulent act, or in this case, omission, alleged to have been committed against
respondent, and therefore, the four-year period should be counted from the time ofrespondent’s discovery thereof.
Records bear the fact that the filing of the project of partition of Richard’s
estate, the opposition thereto, and the order of the trial court disallowing the project
of partition in Special Proceeding No. M-888 were all done in 1991. Respondent
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cannot be faulted for letting the assailed orders to lapse into finality since it was only
through Special Proceeding No. M-888 that she came to comprehend the
ramifications of petitioner’s acts. Obviously, respondent had no other recourse
under the circumstances but to file the annulment case. Since the action for
annulment was filed in 1993, clearly, the same has not yet prescribed.
Fraud takes on different shapes and faces. InCosmic Lumber Corporation v.
Court of Appeals, the Court stated that “man in his ingenuity and fertile imagination
will always contrive new schemes to fool the unwary.”
There is extrinsic fraud within the meaning of Sec. 9 par. (2), of B.P. Blg. 129,
where it is one the effect of which prevents a party from hearing a trial, or real
contest, or from presenting all of his case to the court, or where it operates upon
matters, not pertaining to the judgment itself, but to the manner in which it was
procured so that there is not a fair submission of the controversy. In other words,
extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation
which is committed outside of the trial of the case, whereby the defeated party has
been prevented from exhibiting fully his side of the case by fraud or deception
practiced on him by his opponent. Fraud is extrinsic where the unsuccessful party
has been prevented from exhibiting fully his case, by fraud or deception practiced on
him by his opponent, as by keeping him away from court, a false promise of a
compromise; or where the defendant never had any knowledge of the suit, beingkept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or
without authority connives at his defeat; these and similar cases which show that
there has never been a real contest in the trial or hearing of the case are reasons for
which a new suit may be sustained to set aside and annul the former judgment and
open the case for a new and fair hearing.
The overriding consideration when extrinsic fraud is alleged is that the
fraudulent scheme of the prevailing litigant prevented a party from having his day in
court.
Petitioner is the ancillary administrator of Audrey’s estate. As such, he
occupies a position of the highest trust and confidence, and he is required to
exercise reasonable diligence and act in entire good faith in the performance of that
trust. Although he is not a guarantor or insurer of the safety of the estate nor is he
expected to be infallible, yet the same degree of prudence, care and judgment which
a person of a fair average capacity and ability exercises in similar transactions of his
own, serves as the standard by which his conduct is to be judged.
Petitioner’s failure to proficiently manage the distribution of Audrey’s estate
according to the terms of her will and as dictated by the applicable law amounted to
extrinsic fraud. Hence the CA Decision annulling the RTC Orders dated February
12, 1988 and April 7, 1988, must be upheld.
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It is undisputed that Audrey Guersey was an American citizen domiciled in
Maryland, U.S.A. During the reprobate of her will in Special Proceeding No. 9625, it
was shown, among others, that at the time of Audrey’s death, she was residing in the
Philippines but is domiciled in Maryland, U.S.A.; her Last Will and Testament datedAugust 18, 1972 was executed and probated before the Orphan’s Court in Baltimore,
Maryland, U.S.A., which was duly authenticated and certified by the Register of Wills
of Baltimore City and attested by the Chief Judge of said court; the will was admitted
by the Orphan’s Court of Baltimore City on September 7, 1979; and the will was
authenticated by the Secretary of State of Maryland and the Vice Consul of the
Philippine Embassy.
Being a foreign national, the intrinsic validity of Audrey’s will, especially with
regard as to who are her heirs, is governed by her national law,i.e., the law of the
State of Maryland, as provided in Article 16 of the Civil Code, to wit:
Art. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary succession, both with respect to
theorder of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the nationallaw of the
person
whose succession is under consideration, whatever may be
the nature of the property and regardless of the country wherein said property
may be found. (Emphasis supplied)
Article 1039 of the Civil Code further provides that “capacity to succeed is
governed by the law of the nation of the decedent.”
As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of
Will Proved Outside the Philippines and Administration of Estate Thereunder, states:
SEC.4. Estate, how administered.—When a will is thus allowed, the court
shall grant letters testamentary, or letters of administration with the will annexed, and
such letters testamentary or of administration, shall extend to all the estate of the
testator in the Philippines.Such estate, after the payment of just debts and
expenses of administration, shall be disposed of according to such will, so far
as such will may operate upon it; and the residue, if any, shall be disposed of as is
provided by law in cases of estates in the Philippines belonging to persons who areinhabitants of another state or country. (Emphasis supplied)
While foreign laws do not prove themselves in our jurisdiction and our courts
are not authorized to take judicial notice of them; however, petitioner, as ancillary
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administrator of Audrey’s estate, was duty-bound to introduce in evidence the
pertinent law of the State of Maryland.
Petitioner admitted that he failed to introduce in evidence the law of the State
of Maryland on Estates and Trusts, and merely relied on the presumption that suchlaw is the same as the Philippine law on wills and succession. Thus, the trial court
peremptorily applied Philippine laws and totally disregarded the terms of Audrey’s
will. The obvious result was that there was no fair submission of the case before the
trial court or a judicious appreciation of the evidence presented.
Petitioner insists that his application of Philippine laws was made in good
faith. The Court cannot accept petitioner’s protestation. How can petitioner honestly
presume that Philippine laws apply when as early as the reprobate of Audrey’s will
before the trial court in 1982, it was already brought to fore that Audrey was a U.S.
citizen, domiciled in the State of Maryland. As asserted by respondent, petitioner is
a senior partner in a prestigious law firm, with a “big legal staff and a large library.”
He had all the legal resources to determine the applicable law. It was incumbent
upon him to exercise his functions as ancillary administrator with reasonable
diligence, and to discharge the trust reposed on him faithfully. Unfortunately,
petitioner failed to perform his fiduciary duties.
Moreover, whether his omission was intentional or not, the fact remains thatthe trial court failed to consider said law when it issued the assailed RTC Orders
dated February 12, 1988 and April 7, 1988, declaring Richard and Kyle as Audrey’s
heirs, and distributing Audrey’s estate according to the project of partition submitted
by petitioner. This eventually prejudiced respondent and deprived her of her
full successional right to the Makati property.
InGSIS v. Bengson Commercial Bldgs., Inc., the Court held that when the
rule that the negligence or mistake of counsel binds the client deserts its proper
office as an aid to justice and becomes a great hindrance and chief enemy, its rigors
must be relaxed to admit exceptions thereto and to prevent a miscarriage of justice,
and the court has the power to except a particular case from the operation of the rule
whenever the purposes of justice require it.
The CA aptly noted that petitioner was remiss in his responsibilities as
ancillary administrator of Audrey’s estate. The CA likewise observed that the
distribution made by petitioner was prompted by his concern over Kyle, whom
petitioner believed should equally benefit from the Makati property. The CA correctlystated, which the Court adopts, thus:
In claiming good faith in the performance of his duties and responsibilities,
defendant Alonzo H. Anchetainvokes the principle which presumes the law of the
forum to be the same as the foreign law (Beam vs. Yatco,82 Phil. 30, 38) in the
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absence of evidence adduced to prove the latter law (Slade Perkins vs. Perkins,57
Phil. 205, 210). In defending his actions in the light of the foregoing principle,
however, it appears that the defendant lost sight of the fact that his primary
responsibility as ancillary administrator was to distribute the subject estate in
accordance with the will of Audrey O’Neill Guersey. Considering the principleestablished under Article 16 of the Civil Code of the Philippines, as well as the
citizenship and the avowed domicile of the decedent, it goes without saying that the
defendant was also duty-bound to prove the pertinent laws of Maryland on the
matter.
The record reveals, however, that no clear effort was made to prove the
national law of Audrey O’Neill Guerseyduring the proceedings before the courta
quo. While there is claim of good faith in distributing the subject estate in
accordance with the Philippine laws, the defendant appears to put his actuations in a
different light as indicated in a portion of his direct examination, to wit:
x x x
It would seem, therefore, that the eventual distribution of the estate of Audrey
O’Neill Guersey was prompted by defendant Alonzo H. Ancheta’s concern that the
subject realty equally benefit the plaintiff’s adopted daughter KyleGuersey.
Well-intentioned though it may be, defendant Alonzo H. Ancheta’s actionappears to have breached his duties and responsibilities as ancillary administrator of
the subject estate.While such breach of duty admittedly cannot be consideredextrinsic fraud under ordinary circumstances, the fiduciary nature of the said
defendant’s position, as well as the resultant frustration of the decedent’s last
will, combine to create a circumstance that is tantamount to extrinsic fraud.
Defendant Alonzo H. Ancheta’s omission to prove the national laws of the decedent
and to follow the latter’s last will, in sum, resulted in the procurement of the subject
orders without a fair submission of the real issues involved in the case. (Emphasis
supplied)
This is not a simple case of error of judgment or grave abuse of discretion, but
a total disregard of the law as a result of petitioner’s abject failure to discharge his
fiduciary duties. It does not rest upon petitioner’s pleasure as to which law should
be made applicable under the circumstances. Hisonus is clear. Respondent was
thus excluded from enjoying full rights to the Makati property through no fault or
negligence of her own, as petitioner’s omission was beyond her control. She was in
no position to analyze the legal implications of petitioner’s omission and it wasbelatedly that she realized the adverse consequence of the same. The end result
was a miscarriage of justice. In cases like this, the courts have the legal and moral
duty to provide judicial aid to parties who are deprived of their rights.
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The trial court in its Order dated December 6, 1991 in Special Proceeding No.
M-888 noted the law of the State of Maryland on Estates and Trusts, as follows:
Under Section 1-301, Title 3, Sub-Title 3 of the Annotated Code of the Public
General Laws of Maryland on Estates and Trusts, “all property of a decedent shallbe subject to the estate of decedents law, and upon his death shall pass directly to
the personal representative, who shall hold the legal title for administration and
distribution,” while Section 4-408 expressly provides that “unless a contrary intent is
expressly indicated in the will, a legacy passes to the legatee the entire interest of
the testator in the property which is the subject of the legacy”. Section 7-101, Title 7,
Sub-Title 1, on the other hand, declares that “a personal representative is a
fiduciary” and as such he is “under the general duty to settle and distribute the estate
of the decedent in accordance with the terms of the will and the estate of decedents
law as expeditiously and with as little sacrifice of value as is reasonable under the
circumstances”.
In her will, Audrey devised to Richard her entire estate, consisting of the
following: (1) Audrey’s conjugal share in the Makati property; (2) the cash amount
of P12,417.97; and (3) 64,444 shares of stock in A/G Interiors, Inc.
worthP64,444.00. All these properties passed on to Richard upon Audrey’s death.
Meanwhile, Richard, in his will, bequeathed his entire estate to respondent, except
for his rights and interests over the A/G Interiors, Inc. shares, which he left to Kyle.When Richard subsequently died, the entire Makati property should have then
passed on to respondent. This, of course, assumes the proposition that the law of
the State of Maryland which allows “a legacy to pass to the legatee the entire estate
of the testator in the property which is the subject of the legacy,” was sufficiently
proven in Special Proceeding No. 9625. Nevertheless, the Court may take judicial
notice thereof in view of the ruling inBohanan v. Bohanan. Therein, the Court took
judicial notice of the law of Nevada despite failure to prove the same. The Court
held, viz.:
We have, however, consulted the records of the case in the court below and
we have found that during the hearing on October 4, 1954 of the motion of
Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law,
especially Section 9905, Compiled Nevada Laws, was introduced in evidence by
appellants' (herein) counsel as Exhibit "2" (See pp. 77-79, Vol. II, and t.s.n. pp. 24-
44, Records, Court of First Instance). Again said law was presented by the counsel
for the executor and admitted by the Court as Exhibit "B" during the hearing of the
case on January 23, 1950 before Judge Rafael Amparo (see Records, Court of FirstInstance, Vol. 1).
In addition, the other appellants, children of the testator, do not dispute the
above-quoted provision of the laws of the State of Nevada. Under all the above
circumstances, we are constrained to hold that the pertinent law of Nevada,
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especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial
notice of by us, without proof of such law having been offered at the hearing of the
project of partition.
In this case, given that the pertinent law of the State of Maryland has beenbrought to record before the CA, and the trial court in Special Proceeding No. M-888
appropriately took note of the same in disapproving the proposed project of partition
of Richard’s estate, not to mention that petitioner or any other interested person for
that matter, does not dispute the existence or validity of said law, then Audrey’s and
Richard’s estate should be distributed according to their respective wills, and not
according to the project of partition submitted by petitioner. Consequently, the entire
Makati property belongs to respondent.
Decades ago, Justice Moreland, in his dissenting opinion inSantos v.
Manarang, wrote:
A will is the testator speaking after death. Its provisions have substantially the
same force and effect in the probate court as if the testator stood before the court in
full life making the declarations by word of mouth as they appear in the will. That was
the special purpose of the law in the creation of the instrument known as the last will
and testament. Men wished to speak after they were dead and the law, by the
creation of that instrument, permitted them to do so x x x All doubts must beresolved in favor of the testator's having meant just what he said.
Honorable as it seems, petitioner’s motive in equitably distributing Audrey’s
estate cannot prevail over Audrey’s and Richard’s wishes. As stated inBellis v.
Bellis:
x x x whatever public policy or good customs may be involved in our system of
legitimes, Congress has not intended to extend the same to the succession of
foreign nationals. For it has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national Law. Specific provisions must prevail
over general ones.
Before concluding, the Court notes the fact that Audrey and Richard Guersey were
American citizens who owned real property in the Philippines, although records do
not show when and how the Guerseys acquired the Makati property.
Under Article XIII, Sections 1 and 4 of the 1935 Constitution, the privilege to acquireand exploit lands of the public domain, and other natural resources of the
Philippines, and to operate public utilities, were reserved to Filipinos and entities
owned or controlled by them. InRepublic v. Quasha, the Court clarified that the
Parity Rights Amendment of 1946, which re-opened to American citizens and
business enterprises the right in the acquisition of lands of the public domain, the
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disposition, exploitation, development and utilization of natural resources of the
Philippines, does not include the acquisition or exploitation of private agricultural
lands. The prohibition against acquisition of private lands by aliens was carried on to
the 1973 Constitution under Article XIV, Section 14, with the exception of private
lands acquired by hereditary succession and when the transfer was made to aformer natural-born citizen, as provided in Section 15, Article XIV. As it now stands,
Article XII, Sections 7 and 8 of the 1986 Constitution explicitly prohibits non-Filipinos
from acquiring or holding title to private lands or to lands of the public domain,
except only by way of legalsuccession or if the acquisition was made by a former
natural-born citizen.
In any case, the Court has also ruled thatif land is invalidly transferred to an alien
who subsequently becomes a citizen or transfers it to a citizen, the flaw in the
original transaction is considered cured and the title of the transferee is rendered
valid. In this case, since the Makati property had already passed on to respondent
who is a Filipino, then whatever flaw, if any, that attended the acquisition by
the Guerseys of the Makati property is now inconsequential, as the objective of the
constitutional provision to keep our lands in Filipino hands has been achieved.
WHEREFORE, the petition is denied. The Decision dated March 18, 1999
and the Resolution dated August 27, 1999 of the Court of Appeals areAFFIRMED.
Petitioner isADMONISHED to be more circumspect in the performance of his
duties as an official of the court.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 140975. December 8, 2000]
OFELIA HERNANDO BAGUNU, petitioner, vs.PASTORA PIEDAD,respondent.
D E C I S I O N
VITUG, J.:
On 28 August 1995, herein petitioner Ofelia Hernando Bagunu moved to intervene in
Special Proceedings No. 3652, entitled "In the Matter of the Intestate Proceedings of
the Estate of Augusto H. Piedad," pending before the Regional Trial Court ("RTC"),
Branch 117, of Pasay City. Asserting entitlement to a share of the estate of the late
Augusto H. Piedad, petitioner assailed the finality of the order of the trial court
awarding the entire estate to respondent Pastora Piedad contending that the
proceedings were tainted with procedural infirmities, including an incompletepublication of the notice of hearing, lack of personal notice to the heirs and creditors,
and irregularity in the disbursements of allowances and withdrawals by the
administrator of the estate. The trial court denied the motion, prompting petitioner to
raise her case to the Court of Appeals. Respondent sought the dismissal of the
appeal on the thesis that the issues brought up on appeal only involved pure
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questions of law. Finding merit in that argument, the appellate court dismissed the
appeal, citing Section 2(c) of Rule 41 of the 1997 Revised Rules on Civil Procedure
which would require all appeals involving nothing else but questions of law to be
raised before the Supreme Court by petition for review oncertiorariin accordance
with Rule 45 thereof and consistently with Circular 2-90 of the Court.In a well-written resolution, the Court of Appeals belabored the distinctions between
questions of law and questions of fact, thus:
"There is a question of law in a given case when the doubt or difference arises as to
what the law is on a certain state of facts, and there is a question of fact when the
doubt or difference arises as to the truth or the falsehood of alleged facts. There is
question of fact when the query necessarily invites calibration of the whole evidence
considering mainly the credibility of witnesses, existence and relevance of specific
surrounding circumstances, and their relation to each other and to the whole and the
probabilities of the situation."
Justice Eugenio S. Labitoria, speaking for the appellate court, ratiocinated that
whether or not the RTC erred in denying the intervention considering (1) that the
intervenor-appellant had a prima facieinterest over the case, (2) that the jurisdiction
over the person of the proper parties was not acquired in view of the deficient
publication or notice of hearing, and (3) that the proceedings had yet to be closed
and terminated, were issues which did not qualify as "questions of fact" as to place
the appeal within the jurisdiction of the appellate court; thus:
"The issues are evidently pure questions of law because their resolution are basedon facts not in dispute. Admitted are the facts that intervenor-appellant is a collateral
relative within the fifth degree of Augusto H. Piedad; that she is the daughter of the
first cousin of Augusto H. Piedad; that as such, intervenor-appellant seek to inherit
from the estate of Augusto H. Piedad; that the notice of hearing was published for
three consecutive weeks in a newspaper of general circulation; that there was no
order of closure of proceedings that has been issued by the intestate court; and that
the intestate court has already issued an order for the transfer of the remaining
estate of Augusto H. Piedad to petitioner-appellee.
"These facts are undisputed.
"In this case, there is no doubt nor difference that arise as to the truth or falsehood
on alleged facts. The question as to whether intervenor-appellant as a collateral
relative within the fifth civil degree, has legal interest in the intestate proceeding
which would justify her intervention; the question as to whether the publication of
notice of hearing made in this case is defective which would amount to lack of
jurisdiction over the persons of the parties and the question as to whether the
proceedings has already been terminated when the intestate court issued the order
of transfer of the estate of Augusto H. Piedad to petitioner-appellee, in spite theabsence of an order of closure of the intestate court, all call for the application and
interpretation of the proper law. There is doubt as to what law is applicable on a
certain undisputed state of facts.
"The resolution of the issues raised does not require the review of the evidence, nor
the credibility of witnesses presented, nor the existence and relevance of specific
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surrounding circumstances. Resolution on the issues may be had even without
going to examination of facts on record."
Still unsatisfied, petitioner contested the resolution of the appellate court in the
instant petition for review oncertiorari.
The Court finds no reversible error in the ruling of the appellate court. But let us setaside the alleged procedural decrepitude and take on the basic substantive issue.
Specifically, can petitioner, a collateral relative of the fifth civil degree, inherit
alongside respondent, a collateral relative of the third civil degree? Elsewise stated,
does the rule of proximity in intestate succession find application among collateral
relatives?
Augusto H. Piedad died without any direct descendants or ascendants. Respondent
is the maternal aunt of the decedent, a third-degree relative of the decedent, while
petitioner is the daughter of a first cousin of the deceased, or a fifth-degree relative
of the decedent.
The various provisions of the Civil Code on succession embody an almost complete
set of law to govern, either by will or by operation of law, the transmission of
property, rights and obligations of a person upon his death. Each article is
construed in congruity with, rather than in isolation of, the system set out by the
Code.
The rule on proximity is a concept that favors the relatives nearest in degree to the
decedent and excludes the more distant ones except when and to the extent that the
right of representation can apply. Thus, Article 962 of the Civil Code provides:"ART. 962. In every inheritance, the relative nearest in degree excludes the
more distant ones, saving the right of representation when it properly takes
place.
"Relatives in the same degree shall inherit in equal shares, subject to the provisions
of article 1006 with respect to relatives of the full and half blood, and of article 987,
paragraph 2, concerning division between the paternal and maternal lines."
By right of representation, a more distant blood relative of a decedent is, by
operation of law, "raised to the same place and degree" of relationship as that of a
closer blood relative of the same decedent. The representative thereby steps into
the shoes of the person he represents and succeeds, not from the latter, but from the
person to whose estate the person represented would have succeeded.
"ART. 970. Representation is a right created by fiction of law, by virtue of
which the representative is raised to the place and the degree of the person
represented, and acquires the rights which the latter would have if he were
living or if he could have inherited."
"ART. 971. The representative is called to the succession by the law and not
by the person represented. The representative does not succeed the personrepresented but the one whom the person represented would have succeeded."
In the direct line, right of representation is proper only in the descending, never in the
ascending, line. In the collateral line, the right of representation may only take place
in favor of the children of brothers or sisters of the decedent when such children
survive with their uncles or aunts.
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"ART. 972. The right of representation takes place in the direct
descending line, but never in the ascending.
"In the collateral line, it takes place only in favor of the children of brothers or
sisters, whether they be of the full or half blood."
"ART. 974. Whenever there is succession by representation, the division of theestate shall be made per stirpes, in such manner that the representative or
representatives shall not inherit more than what the person they represent would
inherit, if he were living or could inherit."
"ART. 975. When children of one or more brothers or sisters of the
deceased survive, they shall inherit from the latter by representation, if they
survive with their uncles or aunts. But if they alone survive, they shall inheritin equal portions."
The right of representation does not apply to "other collateral relatives within the fifth
civil degree" (to which group both petitioner and respondent belong) who aresixth in
the order of preference following,firstly, the legitimate children and
descendants,secondly, the legitimate parents and ascendants,thirdly, the
illegitimate children and descendants,fourthly,thesurviving spouse, andfifthly, the
brothers and sisters/nephews and nieces, of the decedent. Among collateral
relatives, except only in the case of nephews and nieces of the decedent concurring
with their uncles or aunts, the rule of proximity, expressed in Article 962,
aforequoted, of the Code, is an absolute rule. In determining the degree of
relationship of the collateral relatives to the decedent, Article 966 of the Civil Codegives direction.
"Article 966. x x x
"In the collateral line, ascent is made to the common ancestor and then descent is
made to the person with whom the computation is to be made. Thus, a person is
two degrees removed from his brother, three from his uncle, who is the brother of his
father, four from his first cousin and so forth."
Accordingly –
Respondent, being a relative within the third civil degree, of the late Augusto H.
Piedad excludes petitioner, a relative of the fifth degree, from succeedingabintestato to the estate of the decedent.
The provisions of Article 1009 and Article 1010 of the Civil Code –
"Article 1009. Should there be neither brothers nor sisters nor children of brothers or
sisters, the other collateral relatives shall succeed to the estate.
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"The latter shall succeed without distinction of lines or preference among them by
reason of relationship by the whole blood."
"Article 1010. The right to inheritab intestato shall not extend beyond the fifth
degree of relationship in the collateral line." -
invoked by petitioner do not at all support her cause. The law means only thatamong theother collateral relatives(the sixth in the line of succession), no
preference or distinction shall beobserved "by reason ofrelationship by the whole
blood." In fine, a maternal aunt can inherit alongside a paternal uncle, and a first
cousin of the full blood can inherit equally with a first cousin of the half blood, but an
uncle or an aunt, being a third-degree relative, excludes the cousins of the decedent,
being in the fourth-degree of relationship; the latter, in turn, would
have priority in successionto a fifth-degree relative.
WHEREFORE, the instant Petition is DENIED. No costs.
SO ORDERED.
Melo, (Chairman), Panganiban, and Gonzaga-Reyes, JJ., concur.
Rollo, p. 30.
Rollo, p. 31.
Supreme Court E-Library SearchFIRST DIVISION
*(R( o( 1$997#( 'pril #9, 199!
U<0"' +@RD'D, petitioner , vs( 8@ 8<( C<GR <A 'PP@'I0, 0<C<RR< C(
R<0'I@0, 'GR<R' R<0'I@0, 'P<I@< R<0'I@0, '<< R<0'I@0,AI<R@D' R<0'I@0, @I@' R<0'I@0 'D +R*' R<0'I@0,respondents.
0KII'BG0
1( CIVIL LA7 S!CCESSION RIGHT TO REDEE PROPERT= AS LEGAL HEIR
O8 H!S<AND, PART O8 7HOSE ESTATE IS A SHARE IN HIS OTHERJS
INHERITANCE. he thrust of the petition .efore us is the alleged incapacit& of private
respondent 0ocorro C( Rosales to redeem the propert&, she .eing merel& the spouse of David
Rosales, a son of "acaria, and not .eing a co)heir herself in the intestate estate of "acaria(
0ocorros right to the propert& is not .ecause she rightfull& can claim heirship in "acarias
estate .ut that she is a legal heir of her hus.and, David Rosales, part of whose estate is a
share in his mothers inheritance( David Rosales, incontroverti.l&, survived his mothers
death( >hen "acaria died her estate passed on to her surviving children, among them David
Rosales, who thereupon .ecame co)owners of the propert&( >hen David Rosales himself
later died, his own estate, which included his undivided interest over the propert& inherited
from "acaria, passed on to his widow 0ocorro and her co)heirs pursuant to
the law on succession( 0ocorro and herein private respondents, along with the co)heirs of
David Rosales, thereupon .ecame co-o#ners of the propert& that originall& descended from
"acaria(#( ID. ID. RIGHT O8 REDEPTION 7RITTEN NOTICE O8 SALE,
ANDATOR=. >hen their interest in the propert& was sold .& the Burdeos heirs to
petitioner, a right of redemption arose in favor of private respondents( his right of
redemption was timel& e?ercised .& private respondents( Concededl&, no written notice of
the sale was given .& the Burdeos heirs 6vendors to the co)owners re2uired under 'rticle
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1# of the Civil Code( he thirt&)da& period of redemption had &et to commence when
private respondent Rosales sought to e?ercise the right of redemption on 1 "arch 19-7, a
da& after she discovered the sale from the <ffice of the Cit& reasurer of Butuan Cit&, or
when the case was initiated, on 1 <cto.er 19-7, .efore the trial court( he written notice of
sale is mandator&( his Court has long esta.lished the rule that notwithstanding actualEnowledge of a co)owner, the latter is still entitled to a written notice from the selling co)
owner in order to remove all uncertainties a.out the sale, its terms and conditions, as well as
its efficac& and status(
'PP@'R'C@0 <A C<G0@I
%essie C( Iigan for petitioner(
Aederico '( Calo for private respondents(
D @ C 0 <
+G*, .;
he petitioner, Uosima +erdad, is the purchaser of a #4-)s2uare meter residential lot
6identified to .e Iot o( 5#9, s)5 of the Butuan Cadastre, located along "agallanes 0treet,
now "arcos "( Calo 0t(, Butuan Cit&( Private respondent, 0ocorro Cordero +da( de
Rosales, seeEs to e?ercise a right of legal redemption over the su.ect propert& and traces her
title to the late "acaria 'tega, her mother)in)law, who died intestate on $- "arch 195(
During her lifetime, "acaria contracted two marriages/ the first with 'ngel Burdeos and the
second, following the latters death, with Canuto Rosales( 't the time of her own death,
"acaria was survived .& her son Ramon '( Burdeos and her grandchild 6.& her daughter
Aelicidad '( Burdeos @stela Io3ada of the first marriage and her children of the secondmarriage, namel&, David Rosales, %usto Rosales, Romulo Rosales, and 'urora Rosales(
0ocorro Rosales is the widow of David Rosales who himself, some time after "acarias
death, died intestate without an issue(
n an instrument, dated 14 %une 19-#, the heirs of Ramon Burdeos, namel&, his widow
"anuela Iegaspi Burdeos and children Aelicidad and Ramon, %r(, sold to petitioner Uosima
+erdad 6their interest on the disputed lot supposedl& for the price of P55,4$($$( n a dul&
notari3ed deed of sale, dated 14 ovem.er 19-#, it would appear, however, that the lot was
sold for onl& P#,$$$($$( Petitioner e?plained that the second deed was intended merel& to
save on the ta? on capital gains(0ocorro discovered the sale on $ "arch 19-7 while she was at the Cit& reasurers <ffice(
<n 1 "arch 19-7, she sought the intervention of the Iupong agapa&apa of Baranga& 9,
Princess Grdua, for the redemption of the propert&( 0he tendered the sum of P#,$$$($$ to
Uosima( he latter refused to accept the amount for .eing much less than the lots current
value of P-$,$$$($$( o settlement having .een reached .efore the Iupong agapa&apa,
private respondents, on 1 <cto.er 19-7, initiated against petitioner an action for WIegal
Redemption with Preliminar& nunctionX .efore the Regional rial Court of Butuan Cit&(
<n #9 %une 199$, following the reception of evidence, the trial court handed down its
decision holding, in fine, that private respondents right to redeem the propert& had alread&
lapsed(
'n appeal to the Court of 'ppeals was interposed .& private respondents( the appellate court,
in its decision of ## 'pril 199, reversed the court a quo7 thus/
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W>8@R@A<R@, premises considered, the udgment appealed from is here.& R@+@R0@D,
and a new one is accordingl& entered declaring plaintiff)appellant, 0ocorro C( Rosales,
entitled to redeem the inheritance rights 6'rt( 1$--, CC or pro indiviso share 6'rt( 1#$,
CC of the 8eirs of Ramon Burdeos, 0r( in Iot 5#9, s)5 of the Butuan Cadastre, within
the remaining @I@+@ 611 D'K0 from finalit& hereon, unless written notice of the saleand its terms are received in the interim, under the same terms and conditions appearing
under @?hi.it V% and after returning the purchase price of P#,$$$($$ within the foregoing
period( o cost(X
n her recourse to this Court, petitioner assigned the following Werrors/X hat Y
Xhe 8onora.le Court of 'ppeals erred in declaring 0ocorro C( Rosales is entitled to redeem
the inheritance rights 6'rticle 1$--, CC or pro)indiviso share 6'rticle 1#$, CC of the
heirs of Ramon Burdeos, 0r( in Iot 5#9, s)5 of the Butuan Cadastre, for .eing contrar& to
law and evidence(
Whe 8onora.le Court of 'ppeals erred in ignoring the peculiar circumstance, in that, the
respondents actual Enowledge, as a factor in the dela& constitutes laches(
Whe 8onora.le Court of 'ppeals erred in concluding that 0ocorro C( Rosales, in effect,
timel& e?ercised the right of legal redemption when referral to Baranga& .& respondent
signifies .onafide intention to redeem and= that, redemption is properl& made even if there is
no offer of redemption in legal tender(
Whe 8onora.le Court of 'ppeals erred in ruling that the running of the statutor& redemption
period is sta&ed upon commencement of Baranga& proceedings(X
0till, the thrust of the petition .efore us is the alleged incapacit& of private respondent0ocorro C( Rosales to redeem the propert&, she .eing merel& the spouse of David Rosales, a
son of "acaria, and not .eing a co)heir herself in the intestate estate of "acaria(
>e rule that 0ocorro can( t is true that 0ocorro, a daughter)in)law 6or, for that matter, a mere
relative .& affinit&, is not an intestate heir of her parents)in)law= however, 0ocorro s right to
the propert& is not .ecause she rightfull& can claim heirship in "acarias estate .ut that she
is a legal heir of her hus.and, David Rosales, part of whose estate is a share in his mothers
inheritance(
David Rosales, incontroverti.l&, survived his mothers death( >hen "acaria died on $-
"arch 195 her estate passed on to her surviving children, among them David Rosales, whothereupon .ecame co)owners of the propert&( >hen David Rosales himself later died, his
own estate, which included his undivided interest over the propert& inherited from "acaria,
passed on to his widow 0ocorro and her co)heirs pursuant to the law on succession(
W'R( 995( n the a.sence of legitimate descendants and ascendants, and illegitimate
children and their descendants, whether legitimate or illegitimate, the surviving spouse shall
inherit the entire estate, without preudice to the rights of .rothers and sisters, nephews and
nieces, should there .e an&, under 'rticle 1$$1(
W??? ??? ???
W'R( 1$$1( 0hould .rothers and sisters or their children survive with the widow or
widower, the latter shall .e entitled to one)half of the inheritance and the .rothers and sisters
or their children to the other half(X
0ocorro and herein private respondents, along with the co)heirs of David Rosales, thereupon
.ecame co-o#ners of the propert& that originall& descended from "acaria(
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>hen their interest in the propert& was sold .& the Burdeos heirs to petitioner, a right of
redemption arose in favor of private respondents= thus/
W'R( 119( Iegal redemption is the right to .e su.rogated, upon the same terms and
conditions stipulated in the contract, in the place of one who ac2uires a thing .& purchase or
dation in pa&ment, or .& an& other transaction where.& ownership is transmitted .& oneroustitle(X
W'R( 1#$( ' co)owner of a thing ma& e?ercise the right of redemption in case the shares of
all the other co)owners or of an& of them, are sold to a third person( f the price of the
alienation is grossl& e?cessive, the redemptioner shall pa& onl& a reasona.le one(X
>e hold that the right of redemption was timel& e?ercised .& private respondents(
Concededl&, no written notice of the sale was given .& the Burdeos heirs 6vendors to the co)
owners re2uired under 'rticle 1# of the Civil Code Y
X'R( 1#( he right of legal pre)emption or redemption shall not .e e?ercised e?cept
within thirt& da&s from the notice in writing .& the prospective vendor, or .& the vendor, as
the case ma& .e( he deed of sale shall not .e recorded in the Registr& of Propert&, unless
accompanied .& an affidavit of the vendor that he has given written notice thereof to all
possi.le redemptioners(X
8ence, the thirt&)da& period of redemption had &et to commence when private respondent
Rosales sought to e?ercise the right of redemption on 1 "arch 19-7, a da& after she
discovered the sale from the <ffice of the Cit& reasurer of Butuan Cit&, or when the case
was initiated, on 1 <cto.er 19-7, .efore the trial court(
he written notice of sale is mandator&( his Court has long esta.lished the rule thatnotwithstanding actual Enowledge of a co)owner, the latter is still entitled to a written notice
from the selling co)owner in order to remove all uncertainties a.out the sale, its terms and
conditions, as well as its efficac& and status(
@ven in 'lon3o vs. ntermediate 'ppellate Court, relied upon .& petitioner in contending that
actual Enowledge should .e an e2uivalent to a written notice of sale, the Court made it clear
that it was not reversing the prevailing urisprudence= said the Court/
W>e reali3e that in arriving at our conclusion toda&, we are deviating from the strict letter of
the law, which the respondent court understanda.l& applied pursuant to e?isting
urisprudence( he said court acted properl& as it had no competence to reverse the doctrineslaid down .& this Court in the a.ove)cited cases( n fact, and this should .e clearl& stressed,
we ourselves are not a.andoning the De Coneero and Buttle doctrines( >hat we are doing
simpl& is adopting an e?ception to the general rule, in view of the peculiar circumstances of
this case(X
n A*F, the right of legal redemption was invoEed several &ears, notust da&s or months,
after the consummation of the contracts of sale( he complaint for legal redemption itself
was there filed more than thirteen &ears after the sales were concluded(
Relative to the 2uestion posed .& petitioner on private respondents tender of pa&ment, it is
enough that we 2uote, with approval, the appellate court= vi3/
Wn contrast, records clearl& show that an amount was offered, as re2uired in 0empio vs. Del
Rosario, 44 Phil( 1 and Da3a vs.omacru3, 5- Phil( 414, .& the redemptioner)appellant
during the .aranga& conciliation proceedings 6'nswer, par( - .ut was flatl& reected .& the
appellee, not on the ground that it was not the purchase price 6though it appeared on the face
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of the deed of sale, @?h( V%)1, nor that it was offered as partial pa&ment thereof, .ut rather
that it was Vunconsciona.le .ased upon its Vpresent value( 6'nswer, par( -(X
'll given, we find no error in the appellate courts finding that private respondents are
entitled to the redemption of the su.ect propert&(
7HERE8ORE, the petition is D@@D and the assailed decision of the Court of 'ppeals is'AAR"@D( Costs against petitioner(
0< <RD@R@D(
*(R( o( 1#7$7( Ae.ruar& #5, 1999!
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"'C''*'K, "'( <I+' "( P'R@D@0, @R@0' P( RGP0', RGB@ "(
'DR'<, 8@R"< "( 'DR'<, %<0@I< "( 'DR'<, R<*@I< "(
'DR'<, >IAR@D< "( 'DR'<, +C<R "( 'DR'<, C<R'U< '(<*<C<, %'0" '( "@D<U' and C<0'< "( 'DR'<, petitioners2
vs. %<0@I< P( D@I' "@RC@D, respondent.
D @ C 0 <
PGR0"', (/
his is a Petition for Review on Certiorari of the Decision of the Court of 'ppeals, dated
<cto.er 17, 199, in C')*(R( C+ o( 41#-, which reversed the decision, dated %une 1$,
199#, of the Regional rial Court, Branch 7, Pasig Cit&, in Civil Case o( 597$5(
he facts of the case are, as follows/
<n "arch #, 19-7, @varista "( dela "erced died intestate, without issue( 0he left five 65
parcels of land situated in <ram.o, Pasig Cit&(
't the time of her death, @varista was survived .& three sets of heirs, vi3/ 61 Arancisco "(
dela "erced, her legitimate .rother = 6# eresita P( Rupisan, her niece who is the onl&
daughter of Rosa de la "erced)Platon 6a sister who died in 194 = and 6 the legitimate
children of @ugenia dela "erced)'driano 6another sister of @varista who died in 195,
namel&/ 8erminio, Ru.en, %oselito, Rogelio, >ilfredo, +ictor and Constantino, all surnamed
'driano, Cora3on 'driano)<ngoco and %asmin 'driano)"endo3a(
'lmost a &ear later or on "arch 19, 19--, to .e precise, Arancisco 6@varistas .rother died(
8e was survived .& his wife Blan2uita @rrea dela "erced and their three legitimate children,
namel&, Iuisito @( dela "erced, Blan2uita "( "acatanga& and "a( <livia "( Paredes(
<n 'pril #$, 19-9, the three sets of heirs of the decedent, @varista "( dela "erced, referring
to 61 the a.ovenamed heirs of Arancisco= 6# eresita P( Rupisan and 6 the nine 9!
legitimate children of @ugenia, e?ecuted an e?traudicial settlement, entitled W@?traudicial
0ettlement of the @state of the Deceased @varista "( dela "ercedX adudicating the
properties of @varista to them, each set with a share of one)third 61F pro)indiviso(
<n %ul& # ,199$, private respondent %oselito P( Dela "erced , illegitimate son of the late
Arancisco de la "erced, filed a WPetition for 'nnulment of the @?traudicial 0ettlement of the@state of the Deceased @varista "( Dela "erced with Pra&er for a emporar& Restraining
<rderX, alleging that he was fraudulentl& omitted from the said settlement made .&
petitioners, who were full& aware of his relation to the late Arancisco( Claiming successional
rights, private respondent %oselito pra&ed that he .e included as one of the .eneficiaries, to
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share in the one)third 61F pro)indiviso share in the estate of the deceased @varista,
corresponding to the heirs of Arancisco(
<n 'ugust , 199$, the trial court issued the temporar& restraining order pra&ed for .&
private respondent %oselito, enoining the sale of an& of the real properties of the deceased
@varista('fter trial, however, or on %une 1$, 199#, to .e definite, the trial court dismissed the petition,
lifted the temporar& restraining order earlier issued, and cancelled the notice of lis pendens
on the certificates of title covering the real properties of the deceased @varista(
n dismissing the petition, the trial court stated/
Whe factual setting of the instant motion after considering the circumstances of the entire
case and the other evidentiar& facts and documents presented .& the herein parties points
onl& to one issue which goes into the ver& sEeleton of the controvers&, to wit/ W>hether or
not the plaintiff ma& participate in the intestate estate of the late @varista "( Dela "erced in
his capacit& as representative of his alleged father, Arancisdo Dela "erced, .rother of
the deceased, whose succession is under consideration(
? ? ? ? ? ? ? ? ?
t is to .e noted that Arancisco Dela "erced, alleged father of the herein plaintiff, is a
legitimate child, not an illegitimate( Plaintiff, on the other hand, is admittedl& an illegitimate
child of the late Arancisco Dela "erced( 8ence, as such, he cannot represent his alleged
father in the succession of the latter in the intestate estate of the late @varista Dela "erced,
.ecause of the .arrier in 'rt( 99# of the ew Civil Code which states that/
V'n illegitimate child has no right to inherit ab intestato from the legitimate children andrelatives of his father or mother, nor shall such children or relatives inherit in the same
manner from the illegitimate child(
he application of 'rt( 99# cannot .e ignored in the instant case, it is clearl& worded in such
a wa& that there can .e no room for an& dou.ts and am.iguities( his provision of the law
imposes a .arrier .etween the illegitimate and the legitimate famil&( ? ? ?X 6Rollo, p( -7)--
ot satisfied with the dismissal of his petition, the private respondent appealed to the Court
of 'ppeals(
n its Decision of <cto.er 17,199, the Court of 'ppeals reversed the decision of the trial
court of origin and ordered the petitioners to e?ecute an amendator& agreement which shallform part of the original settlement, so as to include private respondent %oselito as a co)heir
to the estate of Arancisco, which estate includes one)third 61F pro indiviso of the latters
inheritance from the deceased @varista(
he relevant and dispositive part of the Decision of the Court of 'ppeals, reads/
W? ? ? ? ? ? ? ? ?
t is a .asic principle em.odied in 'rticle 777, ew Civil Code that the
rights to the succession are transmitted from the moment of the death of the decedent, so that
Arancisco dela "erced inherited 1F of his sisters estate at the moment of the latters death(
0aid 1F of @varistas estate formed part of Aranciscos estate which was su.se2uentl&
transmitted upon his death on "arch #, 19-7 to his legal heirs, among whom is appellant as
his illegitimate child( 'ppellant .ecame entitled to his share in Aranciscos estate from the
time of the latters death in 19-7( he e?traudicial settlement therefore is void insofar as it
deprives plaintiff)appellant of his share in the estate of Arancisco "( dela "erced( 's a
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conse2uence, the cancellation of the notice of lis pendens is not in order .ecause the
propert& is directl& affected( 'ppellant has the right to demand a partition of his fathers
estate which includes 1F of the propert& inherited from @varista dela "erced(
W>8@R@A<R@, premises considered, the appealed decision is here.& R@+@R0@D and 0@
'0D@( Defendants)appellees are here.& ordered to e?ecute an amendator&agreementFsettlement to include herein plaintiff)appellant %oselito dela "erced as co)heir to
the estate of Arancisco dela "erced which includes 1F of the estate su.ect of the 2uestioned
Deed of @?traudicial 0ettlement of the @state of @varista "( dela "erced dated 'pril #$,
19-9( he amendator& agreementFsettlement shall form part of the original @?traudicial
0ettlement( >ith costs against defendants)appellees(
0< <RD@R@D(X 6Rollo, p( 41
n the Petition under consideration, petitioners insist that .eing an illegitimate child, private
respondent %oselito is .arred from inheriting from @varista .ecause of the provision of
'rticle 99# of the ew Civil Code, which la&s down an impassa.le .arrier .etween the
legitimate and illegitimate families(
he Petition is devoid of merit(
'rticle 99# of the ew Civil Code is not applica.le .ecause involved here is not a situation
where an illegitimate child would inherit ab intestato from a legitimate sister of his father,
which is prohi.ited .& the aforesaid provision of law( Rather, it is a scenario where an
illegitimate child inherits from his father, the latters share in or portion of, what the latter
alread& inherited from the deceased sister, @varista(
's opined .& the Court of 'ppeals, the law in point in the present case is 'rticle 777 of the ew Civil Code, which provides that the
rights to succession are transmitted from the
moment of death of the decedent(
0ince @varista died ahead of her .rother Arancisco, the latter inherited a portion of the estate
of the former as one of her heirs( 0u.se2uentl&, when Arancisco died, his heirs, namel&/ his
spouse, legitimate children, and the private respondent, %oselito, an illegitimate child,
inherited his 6Aranciscos share in the estate of @varista( t .ears stressing that %oselito does
not claim to .e an heir of @varista .& right of representation .ut participates in his own right,
as an heir of the late Arancisco, in the latters share 6or portion thereof in the estate of
@varista(Petitioners argue that if %oselito desires to assert successional rights to the intestate estate of
his father, the proper forum should .e in the settlement of his own fathers intestate estate, as
this Court held in the case of *utierre3 vs( "acandog 615$ 0CR' 4## 19-7!
Petitioners reliance on the case of *utierre3 vs( "acandog 6 supra is misplaced( he said
case involved a claim for support filed .& one @lpedia *utierre3 against the estate of the
decedent, 'gustin *utierre3, 0r(, when she was not even an heir to the estate in 2uestion, at
the time, and the decedent had no o.ligation whatsoever to give her support( hus, this Court
ruled that @lpedia should have asEed for support pendente lite .efore the %uvenile and
Domestic Relations Court in which court her hus.and 6one of the legal heirs of the decedent
had instituted a case for legal separation against her on the ground of an attempt against his
life( >hen "auricio 6her hus.and died, she should have commenced an action for the
settlement of the estate of her hus.and, in which case she could receive whatever allowance
the intestate court would grant her(
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he present case, however, relates to the rightful and undisputed right of an heir to the share
of his late father in the estate of the decedent @varista, ownership of which had .een
transmitted to his father upon the death of @varista( here is no legal o.stacle for private
respondent %oselito, admittedl& the son of the late Arancisco, to inherit in his own right as an
heir to his fathers estate, which estate includes a one)third 61F undivided share in theestate of @varista(
7HERE8ORE, for lacE of merit, the Petition is here.& D@@D and the 'ppealed
Decision of the Court of 'ppeals 'AAR"@D in toto(
0< <RD@R@D(
*(R( o( 11-44( Decem.er #1, 199-!
8@R0 <A *'C< C< and R<0'R< CG'R<, petitioners2 vs( C<GR <A
'PP@'I0 and IKD' 0( R@K@0 as 'ttorne&)in)Aact of %<0@A' 0( R@K@0,B@R'RD' 0( P'II<, 8@R"' 0( P'II<, R@"@D<0 '( 0'"P'K<,
IG"'D' '( 0'"P'K<, @RC< '( 0'"P'K<, C'RI<0 '( 0'"P'K<,
*@@R<0< C( 0'"P'K<, "KR' C( 0'"P'K<, R<0'I< C( 0'"P'K<,
"'G@I C( 0'"P'K<, D@I' '( 0'"P'K<, C<R'U< C( 0'"P'K<, I< C(
0'"P'K<, and I<I' '( 0'"P'K< in her own .ehalf and as 'ttorne&)in)Aact of
<R"' '( 0'"P'K<, respondents(
D @ C 0 <
B@II<0II<, (/
his petition for review on certiorari seeEs to reverse the $ "arch 1994 Decision and #1
Decem.er 1994 Resolution of respondent Court of 'ppeals which upheld the right of
private respondents as heirs of Iourdes 0ampa&o to demand partition under 'rt( 494 of the
Civil Code(
Iourdes 0ampa&o and gnacio Conti, married to Rosario Cuario, were the co)owners of the
propert& in litigation consisting of a 59)s2uare meter lot at the corner of Uamora and
'.ellanosa 0treets, Iucena Cit&, covered .& C o( Y1574, with a house erected
thereon( <n 17 "arch 19- Iourdes 0ampa&o died intestate without issue( 0u.se2uentl&, on
1 'pril 19-7 private respondents %osefina 0( Re&es, Bernardita 0( Palilio, 8erminia 0(
Palilio, Remedios '( 0ampa&o, luminada '( 0ampa&o, @nrico '( 0ampa&o, Carlos '(
0ampa&o, *eneroso C( 0ampa&o, "&rna C( 0ampa&o, Rosalina C( 0ampa&o, "anuel C(
0ampa&o, Delia '( 0ampa&o, Cora3on C( 0ampa&o, ilo C( 0ampa&o, Iolita '( 0ampa&o
and orma '( 0ampa&o, all represented .& their 'ttorne&)in)Aact I&dia 0( Re&es, with Iolita
'( 0ampa&o acting also in her own .ehalf and as 'ttorne&)in)Aact of orma '( 0ampa&o, all
claiming to .e collateral relatives of the deceased Iourdes 0ampa&o, filed an action for
partition and damages .efore RCYBr( 54, Iucena Cit&(
he spouses gnacio Conti and Rosario Cuario refused the partition on the ground that
private respondents failed to produce an& document to prove that the& were the rightful heirsof Iourdes 0ampa&o( <n $ 'ugust 19-7 gnacio Conti died and was su.stituted as part&)
defendant .& his children 'suncion, Arancisco, "ilagros, %oselito, Iuisito, Diego and
eresita, all surnamed Conti(
't the trial, private respondents presented I&dia 0ampa&o Re&es and 'delaida 0ampa&o to
prove that the& were the collateral heirs of the deceased Iourdes 0ampa&o and therefore
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entitled to her rights as co)owner of the su.ect lot( Bringing with her the original cop& of
her certificate of live .irth showing that her father was nocentes Re&es and her
mother was %osefina 0ampa&o, I&dia 0ampa&o Re&es testified that she was one of the
nieces of Iourdes 0ampa&o, .eing the daughter of %osefina 0ampa&o, the onl& living si.ling
of Iourdes( I&dia also testified that Iourdes had another sister named Remedios %(0ampa&o who died in 194-, and two .rothers, "anuel %( 0ampa&o and Iuis %( 0ampa&o who
died in 19- and 19$, respectivel&( o prove that %osefina, Remedios, Iuis and "anuel
were si.lings of Iourdes, their .aptismal certificates together with a photocop& of the .irth
certificate of "anuel 0ampa&o were offered in evidence( hese documents showed that
their father and mother, liEe Iourdes 0ampa&o, were 'ntonio 0ampa&o and Brigida %ara3a(
he certificates of .aptism presented as part of the testimon& of I&dia 0ampa&o Re&es were
prepared .& Rev( AranElin C( Rivero who dul& certified that all data therein written were in
accordance with the church records, hence, the lower left portion of the documents .earing
the seal of the church with the notation as to where the documents were logged in particular(
he .aptismal certificates were presented in lieu of the .irth certificates .ecause the
repositor& of those documents, the <ffice of the Civil Registrar of Iucena Cit&, had
.een ra3ed .& fire on two separate occasions, #7 ovem.er 1974 and $ 'ugust 19-, thus
all civil registration records were totall& .urned( <n the other hand, a photocop& of "anuel;s
.irth certificate dated #5 <cto.er 1919 6@?h( :: showed that it was issued .& the Iocal
Civil Registrar of Iucena, a&a.as 6now Iucena Cit&(
'delaida 0ampa&o, widow of "anuel 0ampa&o, testified that her hus.and "anuel was the
.rother of the deceased Iourdes, and with the death of "anuel, Iuis and Remedios, the onl&living si.ling of Iourdes was %osefina(
o re.ut whatever rights the alleged heirs of Iourdes had over the su.ect lot, petitioners
presented Rosario Cuario Conti, Rosa Iadines "alundas and Rodolfo @spineli( Rosario
testified that the su.ect propert& was co)owned in e2ual shares .& her hus.and gnacio
Conti and Iourdes 0ampa&o and that her famil& 6Rosario had .een sta&ing in the su.ect
propert& since 197( n fact, she said that her late hus.and gnacio Conti paid for the real
estate ta?es and spent for the necessar& repairs and improvements thereon.ecause .&
agreement Iourdes would leave her share of the propert& to them(
8owever, as correctl& found .& the trial court, no will, either testamentar& or holographic,was presented .& petitioners to su.stantiate this claim( Rosario also disclosed that
when Iourdes died her remains were taEen .& her relatives from their house( >hen cross
e?amined on who those relatives were, she replied that the onl& one she remem.ered was
%osefina since there were man& relatives who came( >hen asEed who %osefina;s parents
were, she said she could not recall( IiEewise, when asEed who the parents of Iourdes
were, Rosario denied having ever Enown them(
'nother witness, Rosa Iadines "alundas, narrated that she used to .e the neigh.or and
hairdresser of the deceased Iourdes 0ampa&o who told her that upon her death her share
would go to gnacio Conti whom she considered as her .rother since .oth of them were
:adopted: .& their foster parents *a.riel Cord and 'nastacia 'llare& Cord, although she
admitted that she did not Enow whether Iourdes had other relatives(
'ccording to another witness, Rodolfo @spineli, he tooE pictures of the tom.s .earing the
tom.stones of *a.riel Cord and 'nastacia 'llare& Cord and gnacio Conti as well as that of
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Iourdes 0ampa&o who was supposed to have .een interred .eside her :adoptive: parents(
8owever, as revealed .& Rosario during her direct e?amination, Iourdes was not in fact
interred there .ecause her relatives tooE her remains(
<n 4 'pril 1991 the trial court declared private respondents as the rightful heirs of Iourdes
0ampa&o( t further ordered private respondents and petitioners to su.mit a proect of partition of the residential house and lot for confirmation .& the court(
Petitioners elevated the case to the Court of 'ppeals contending that the trial court erred
in finding that private respondents were the heirs of Iourdes 0ampa&o and that the& were
entitled to the partition of the lot and the improvements thereon(
<n $ "arch 1994 the Court of 'ppeals affirmed the assailed RC decision and held)
n the instant case, plaintiffs now private respondents! were a.le to prove and esta.lish .&
preponderance of evidence that the& are the collateral heirs of deceased Iourdes 0ampa&o
and therefore the lower court did not err in ordering herein plaintiffs now private
respondents! and defendants now petitioners! to su.mit a proect of partition of the
residential house and lot owned in common .& the deceased Iourdes 0ampa&o and defendant
spouses Conti for confirmation .& the court ? ? ? ? Considering our earlier finding that the
lower court did not err in declaring herein plaintiffs now private respondents! as heirs of
deceased 0ampa&o and therefore entitled to inherit her propert&, the argument of the
appellants now petitioners! that the plaintiffs now private respondents! are not entitled to
partition is devoid of merit 6insertions in 4 5 supplied (
Respondent court also ruled, citing 8ernande3 v( Padua and "ara.illes v( Luito, that a prior
and separate udicial declaration of heirship was not necessar& and that private respondents .ecame the co)owners of the portion of the propert& owned and registered in the name of
Iourdes 0ampa&o upon her death and, conse2uentl&, entitled to the immediate possession
thereof and all other incidentsFrights of ownership as provided for .& law including the right
to demand partition under 'rt( 777 of the Civil Code,and lustre v( 'laras
Arondosa holding that the propert& .elongs to the heirs at the moment of death of the
decedent, as completel& as if he had e?ecuted and delivered to them a deed for the same
.efore his death(
he appellate court su.se2uentl& den&ing a motion for reconsideration upheld the
pro.ative value of the documentar& and testimonial evidence of private respondents andfaulted petitioners for not having su.poenaed %osefina if the& .elieved that she was a vital
witness in the case( 8ence, petitioners pursued this case arguing that a complaint for partition
to claim a supposed share of the deceased co)owner cannot prosper without prior settlement
of the latter;s estate and compliance with all legal re2uirements, especiall& pu.lication, and
private respondents were not a.le to prove .& competent evidence their relationship with the
deceased(
here is no merit in the petition( ' prior settlement of the estate is not essential .efore the
heirs can commence an& action originall& pertaining to the deceased as we e?plained in
Luison v( 0alud )
Claro Luison died in 19$#( t was proven at the trial that the present plaintiffs are ne?t of
Ein and heirs, .ut it is said .& the appellants that the& are not entitled to maintain this action
.ecause there is no evidence that an& proceedings have .een taEen in court for the settlement
of the estate of Claro Luison, and that without such settlement, the heirs cannot maintain this
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action( here is nothing in this point( 's well .& the Civil Code as .& the Code of Civil
Procedure, the title to the propert& owned .& a person who dies intestate passes at once to his
heirs( 0uch transmission is, under the present law, su.ect to the claims of
administration and the propert& ma& .e taEen from the heirs for the purpose of pa&ing
de.ts and e?penses, .ut this does not prevent an immediate passage of the title, upon thedeath of the intestate, from himself to his heirs( >ithout some showing that a udicial
administrator had .een appointed in proceedings to settle the estate of Claro Luison, the
right of the plaintiffs to maintain this action is esta.lished(
Conforma.l& with the foregoing and taEen in conunction with 'rts( 777 and 494 of the Civil
Code, from the death of Iourdes 0ampa&o her rights as a co)owner, incidental to which is the
right to asE for partition at an& time or to terminate the co)ownership, were transmitted to her
rightful heirs( n so demanding partition private respondents merel& e?ercised the right
originall& pertaining to the decedent, their predecessor)in)interest(
Petitioners; theor& as to the re2uirement of pu.lication would have .een correct had the
action .een for the partition of the estate of Iourdes 0ampa&o, or if we were dealing with
e?traudicial settlement .& agreement .etween heirs and the summar& settlement of estates of
small value( But what private respondents are pursuing is the mere segregation of Iourdes;
one)half share which the& inherited from her through intestate succession( his is a simple
case of ordinar& partition .etween co)owners( he applica.le law in point is 0ec( 1 of Rule
9 of the Rules of Court )
0ec( 1( Complaint in an action for partition of real estate( ) ' person having the right to
compel the partition of real estate ma& do so as in this rule prescri.ed, setting forth in hiscomplaint the nature and e?tent of his title and an ade2uate description of the real estate of
which partition is demanded and oining as defendants all the other persons interested in the
propert&(
' cursor& reading of the aforecited rule shows that pu.lication is not re2uired as erroneousl&
maintained .& petitioners( here are two 6# simultaneous issues in an action for partition(
Airst, whether the plaintiff is indeed a co)owner of the propert& sought to .e partitioned,
and second, if answered in the affirmative, the manner of the division of the propert&, i(e(,
what portion should go to which co)owner( hus, in this case, we must determine whether
private respondents, .& preponderance of evidence, have .een a.le to esta.lish that the& areco)owners .&
wa& of succession as collateral heirs of the late Iourdes 0ampa&o as the&
claim to .e, either a sister, a nephew or a niece( hese, private respondents were a.le to
prove in the trial court as well as .efore respondent Court of 'ppeals(
Petitioners however insist that there was no such proof of filiation .ecause/ 6a mere
photocopies of .irth certificates do not prove filiation= 6. certifications on non)availa.ilit&
of records of .irth do not prove filiation= 6c .aptismal certificates do not prove filiation of
alleged collateral relatives of the deceased= and, 6d the testimonies of I&dia 0( Re&es,
alleged daughter of %osefina Re&es, and 'delaida 0ampa&o, alleged sister)in)law of %osefina
and Iourdes, were incompetent as I&dia was made to testif& on events which happened
.efore her .irth while 'delaida testified on matters merel& narrated to her(
>e are not persuaded( 'ltogether, the documentar& and testimonial evidence su.mitted are
competent and ade2uate proofs that private respondents are collateral heirs of Iourdes
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0ampa&o( Private respondents assert that the& are co)owners of one)half 61F# pro)indiviso
share of the su.ect propert& .& wa& of legal or intestate succession(
0uccession is a mode of ac2uisition .& virtue of which the propert&, rights and o.ligations to
the e?tent of the value of the inheritance of a person are transmitted through his death to
another or others either .& his will or .& operation of law( Iegal orintestate succession taEes place if a person dies without a will, or with a void will, or one which has su.se2uentl& lost
its validit&( f there are no descendants, ascendants, illegitimate children, or a surviving
spouse, the collateral relatives shall succeed to the entire estate of the decedent( t was
esta.lished during the trial that Iourdes died intestate and without issue( Private
respondents as sister, nephews and nieces now claim to .e the collateral relatives of Iourdes(
Gnder 'rt( 17# of the Aamil& Code, the filiation of legitimate children shall .e proved .&
an& other means allowed .& the Rules of Court and special laws, in the a.sence of a record
of .irth or a parents admission of such legitimate filiation in a pu.lic or private document
dul& signed .& the parent( 0uch other proof of ones filiation ma& .e a .aptismal certificate,
a udicial admission, a famil& Bi.le in which his name has .een entered, common reputation
respecting his pedigree, admission .& silence, the testimonies of witnesses and other Einds of
proof admissi.le under Rule 1$ of the Rules of Court( B& analog&, this method of
proving filiation ma& also .e utili3ed in the instant case(
Pu.lic documents are the written official acts, or records of the official acts of the sovereign
authorit&, official .odies and tri.unals, and pu.lic officers, whether of the Philippines, or of a
foreign countr&( he .aptismal certificates presented in evidence .& private respondents are
pu.lic documents( Parish priests continue to .e the legal custodians of the parish recordsand are authori3ed to issue true copies, in the form of certificates, of the entries contained
therein(
he admissi.ilit& of .aptismal certificates offered .& I&dia 0( Re&es, a.sent the
testimon& of the officiating priest or the official recorder, was settled in People v( Ritter,
citing G(0( v( de +era 6#- Phil( 1$5 1914!, thus )
? ? ? the entries made in the Registr& BooE ma& .e considered as entries made in the course
of the .usiness under 0ection 4 of Rule 1$, which is an e?ception to the hearsa& rule( he
.aptisms administered .& the church are one of its transactions in the e?ercise of
ecclesiastical duties and recorded in the .ooE of the church during the course of its .usiness(t ma& .e argued that .aptismal certificates are evidence onl& of the administration of the
sacrament, .ut in this case, there were four 64 .aptismal certificates which, when taEen
together, uniforml& show that Iourdes, %osefina, Remedios and Iuis had the same set of
parents, as indicated therein( Corro.orated .& the undisputed testimon& of 'delaida
0ampa&o that with the demise of Iourdes and her .rothers "anuel, Iuis and sister
Remedios, the onl& si.ling left was %osefina 0ampa&o Re&es, such .aptismal certificates
have ac2uired evidentiar& weight to prove filiation(
Petitioners; o.ection to the photocop& of the certificate of .irth of "anuel 0ampa&o was
properl& discarded .& the court a 2uo and respondent Court of 'ppeals( 'ccording to 0ec(
, par( 61, Rule 1$, of the Rules of Court, when the su.ect of in2uir& is the contents of a
document, no evidence shall .e admissi.le other than the original document itself e?cept
when the original has .een lost or destro&ed or cannot .e produced in court, without .ad
faith on the part of the offeror( he loss or destruction of the original certificate of .irth of
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"anuel %( 0ampa&o was dul& esta.lished .& the certification issued .& the <ffice of the
Iocal Civil Registrar of Iucena Cit& to the effect that its office was completel& destro&ed .&
fire on #7 ovem.er 1974 and $ 'ugust 19-, respectivel&, and as a conse2uence thereof,
all civil registration records were totall& .urned(
'pparentl&, there seems to .e some merit in petitioners contention that the testimon& of 'delaida 0ampa&o cannot prove filiation for .eing hearsa& considering that there was no
declaration ante litem motam as re2uired .& the rules, i(e(, that the declaration relating to
pedigree was made .efore the controvers& occurred( onetheless, petitioners made no move
to dispute her testimon& in open court when she was mentioning who the .rothers and sisters
of Iourdes were( 's correctl& o.served .& the trial court in e?plicit terms, :the documentar&
and testimonial evidence were not disputed .& defendants: 6now petitioners( ota.l&, when
Rosario Cuario Conti tooE the witness stand, she admitted that she was not aware of the
identities of the parents of the deceased( Clearl&, this runs counter to the relationship aEin
to filial .onding which she professed she had eno&ed with the decedent( 's wife of
gnacio Conti, she was supposedl& a :sister)in)law: of the deceased Iourdes 0ampa&o who
regarded gnacio as a .rother( 8owever, in sum, we rule that all the pieces of evidence
adduced, taEen together, clearl& preponderate to the right of private respondents to maintain
the action for partition( '.sent an& reversi.le error in the assailed Decision and Resolution
of the Court of 'ppeals, this petition for review on certiorari will not lie(
7HERE8ORE, the petition is D@@D( he assailed Decision dated $ "arch 1994 and
Resolution dated #1 Decem.er 1994 of the Court of 'ppeals are 'AAR"@D( Costs
against petitioners(0< <RD@R@D(
IN THE ATTER O8 THE INTESTATE *(R( o( 1557
ESTATES O8 THE DECEASED #OSE8A
DELGADO AND G!ILLERO R!STIA
CARLOTA DELGADO VDA. DE DE LA ROSA )* t%&' HEIRS O8
L!IS DELGADO, *)3&/, HEIRS O8 CONCHA VDA. DE AREVALO, HEIRS
O8 L!ISA DELGADO VDA. DE DANAO, ANGELA DELGADO
ARESPACOCHAGA, TERESA DELGADO PERLAS, CAROLINA DELGADO
ARESPACOCHAGA, RODOL8O DELGADO, <EN#AIN DELGADO,
GLICERIA DELGADO )* CLEO8AS DELGADO )* HEIRS O8 GORGONIO
DELGADO, *)3&/, RAON DELGADO CAPO, CARLOS DELGADO
CAPO, CLARITA DELGADO CAPOREI"A, =OLANDA DELGADO
ENCINAS, 8ELISA DELGADO CAPOENCINAS )* ELINDA DELGADO
CAPOADARANG,
P&tt*&'s, Present /
PG<, (, C"airman,
0'D<+'I)*G@RR@U,
& ' s u s C<R<',
'UCG' and
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*'RC', (
HEIRS OF MARCIANA RUSTIA VDA. DE DAMIAN, NAMELY, GUILLERMO R.
DAMIAN AND JOSE R. DAMIAN; HEIRS OF HORTENCIA RUSTIA CRUZ,
NAMELY, TERESITA CRUZ-SISON, HORACIO R. CRUZ, JOSEFINA CRUZ-
RODIL, AMELIA CRUZ-ENRIQUEZ AND FIDEL R. CRUZ, JR.; HEIRS OF
ROMAN RUSTIA, SR., NAMELY, JOSEFINA RUSTIA ALBANO, VIRGINIA
RUSTIA PARAISO, ROMAN RUSTIA, JR., SERGIO RUSTIA, FRANCISCO
RUSTIA, LETICIA RUSTIA-MIRANDA; AND GUILLERMINA RUSTIA, AS
OPPOSITORS;D/E AND GUILLERMA RUSTIA, AS INTERVENOR,D-E
R&s*&*ts.D>E Promulgated /
%anuar& #7, #$$
D E C I S I O N
CORONA, $ .$
n this petition for review on certiorari, petitioners seeE to reinstate the "a&
11, 199$ decision of the Regional rial Court 6RC of "anila, Branch 55, D8E in 0P
Case o( 97-, which was reversed and set aside .& the Court of 'ppeals in its
decisionD$E dated <cto.er #4, #$$#(
F&!S %F '( !&S(
his case concerns the settlement of the intestate estates of *uillermo Rustiaand %osefa Delgado(D1E he main issue in this case is relativel& simple/ who,
.etween petitioners and respondents, are the lawful heirs of the decedents(
8owever, it is attended .& several collateral issues that complicate its resolution(
he claimants to the estates of *uillermo Rustia and %osefa Delgado ma& .e
divided into two groups/ 61 the alleged heirs of %osefa Delgado, consisting of her
half) and full).lood si.lings, nephews and nieces, and grandnephews and
grandnieces, and 6# the alleged heirs of *uillermo Rustia, particularl&, his sisters,
D4E his nephews and nieces,DE his illegitimate child,D0E and the de factoadoptedchildD/%E 6ampun-ampunan of the decedents(
THE ALLEGED HEIRS O8 #OSE8A DELGADO
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he deceased %osefa Delgado was the daughter of AelisaD//E Delgado .& one
Iucio Campo( 'side from %osefa, five other children were .orn to the couple,
namel&, a3ario, @dil.erta, %ose, %aco.a, and *orgonio, all surnamed Delgado(
Aelisa Delgado was never married to Iucio Campo, hence, %osefa and her full)
.lood si.lings were all natural children of Aelisa Delgado(8owever, Iucio Campo was not the first and onl& man in Aelisa Delgados
life( Before him was Ramon <sorioD/-E with whom Aelisa had a son, Iuis Delgado(
But, unliEe her relationship with Iucio Campo which was admittedl& one without
the .enefit of marriage, the legal status of Ramon <sorios and Aelisa Delgados
union is in dispute(
he 2uestion of whether Aelisa Delgado and Ramon <sorio ever got married
is crucial to the claimants .ecause the answer will determine whether their
successional rights fall within the am.it of the rule
against
reciprocal intestate succession .etween legitimate and illegitimate relatives(
D/>E f Ramon <sorio and Aelisa Delgado had .een validl& married, then their onl&
child Iuis Delgado was a legitimate half).lood .rother of %osefa Delgado and
therefore e?cluded from the latters intestate estate( 8e and his heirs would .e
.arred .& the principle of a.solute separation .etween the legitimate and
illegitimate families( Conversel&, if the couple were never married, Iuis Delgado
and his heirs would .e entitled to inherit from %osefa Delgados intestate estate, as
the& would all .e within the illegitimate line(Petitioners allege that Ramon <sorio and Aelisa Delgado were never
married( n support thereof, the& assert that no evidence was ever presented to
esta.lish it, not even so much as an allegation of the date or place of the alleged
marriage( >hat is clear, however, is that Aelisa retained the surname Delgado( 0o
did Iuis, her son with Ramon <sorio( Iater on, when Iuis got married, his Partida
de CasamientoD/8E stated that he was W"i'o natural de *elisa (elgado< 6the natural
child of Aelisa Delgado,D/$E significantl& omitting an& mention of the name and
other circumstances of his father(D/1E evertheless, oppositors 6now respondents
insist that the a.sence of a record of the alleged marriage did not necessaril& meanthat no marriage ever tooE place(
%osefa Delgado died on 0eptem.er -, 197# without a will( 0he was survived
.& *uillermo Rustia and some collateral relatives, the petitioners herein( 0everal
months later, on %une 15, 197, *uillermo Rustia e?ecuted an affidavit of
self)
adudication of the remaining properties comprising her estate(
THE ARRIAGE O8 G!ILLERO R!STIA AND #OSE8A DELGADO
0ometime in 1917, *uillermo Rustia proposed marriage to %osefa
DelgadoD/4E .ut whether a marriage in fact tooE place is disputed( 'ccording to
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petitioners, the two eventuall& lived together as hus.and and wife .ut were never
married( o prove their assertion, petitioners point out that no record of the
contested marriage e?isted in the civil registr&( "oreover, a .aptismal certificate
naming %osefa Delgado as one of the sponsors referred to her as WSe6orita< or
unmarried woman(
he oppositors 6respondents here, on the other hand, insist that the a.sence
of a marriage certificate did not of necessit& mean that no marriage transpired(
he& maintain that *uillermo Rustia and %osefa Delgado were married on %une ,
1919 and from then on lived together as hus.and and wife until the death of %osefa
on 0eptem.er -, 197#( During this period spanning more than half a centur&, the&
were Enown among their relatives and friends to have in fact .een married( o
support their proposition, oppositors presented the following pieces of evidence/
1. Certificate of Identity No. 9592 dated [December 1, 1944] issued to Mrs.
Guillermo J. Rustia by Carlos P. Romulo, then Resident Commissioner to the United
States of the Commonwealth of the Philippines;
2. Philippine Passport No. 4767 issued to Josefa D. Rustia on June 25, 1947;
3. Veterans Application for Pension or Compensation for Disability Resulting
from Service in the Active Military or Naval Forces of the United States- Claim No. C-4, 004, 503 (VA Form 526) filed with the Veterans Administration of the United States
of America by Dr. Guillermo J. Rustia wherein Dr. Guillermo J. Rustia himself [swore]
to his marriage to Josefa Delgado in Manila on 3 June 1919;D/E
4. Titles to real properties in the name of Guillermo Rustia indicated that he
was married to Josefa Delgado.
THE ALLEGED HEIRS O8 G!ILLERO R!STIA
*uillermo Rustia and %osefa Delgado never had an& children( >ith no
children of their own, the& tooE into their home the &oungsters *uillermina Rustia
Rustia and anie Rustia( hese children, never legall& adopted .& the couple, were
what was Enown in the local dialect as ampun-ampunan(
During his life with %osefa, however, *uillermo Rustia did manage to father
an illegitimate child,D/0E the intervenor)respondent *uillerma Rustia, with one'mparo 0agar.arria( 'ccording to *uillerma, *uillermo Rustia treated her as his
daughter, his own flesh and .lood, and she eno&ed open and continuous
possession of that status from her .irth in 19#$ until her fathers demise( n fact,
%osefa Delgados o.ituar& which was prepared .& *uillermo Rustia, named the
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intervenor)respondent as one of their children( 'lso, her report card from the
Gniversit& of 0anto omas identified *uillermo Rustia as her parentFguardian(D-%E
<ppositors 6respondents here nonetheless posit that *uillerma Rustia has
no interest in the intestate estate of *uillermo Rustia as she was never dul&acEnowledged as an illegitimate child( he& contend that her right to compulsor&
acEnowledgement prescri.ed when *uillermo died in 1974 and that she cannot
claim voluntar& acEnowledgement since the documents she presented were not the
authentic writings prescri.ed .& the new Civil Code(D-/E
<n %anuar& 7, 1974, more than a &ear after the death of %osefa Delgado,
*uillermo Rustia filed a petition for the adoptionD--E of their ampun-
ampunan *uillermina Rustia( 8e stated under oath Wt!hat he had! no legitimate,
legitimated, acEnowledged natural children or natural children .& legal
fiction(XD->E he petition was overtaEen .& his death on Ae.ruar& #-, 1974(
IiEe %osefa Delgado, *uillermo Rustia died without a will( 8e was survived
.& his sisters "arciana Rustia vda. de Damian and 8ortencia Rustia)Cru3, and .&
the children of his predeceased .rother Roman Rustia 0r(, namel&, %osefina Rustia
'l.ano, +irginia Rustia Paraiso, Roman Rustia, %r(, 0ergio Rustia, Arancisco Rustia
and Ieticia Rustia "iranda(D-8E
&)(!(D() P#%!((D*)GS
<n "a& -, 1975, Iuisa Delgado vda. de Danao, the daughter of Iuis
Delgado, filed the original petition for letters of administration of the intestate
estates of the Wspouses %osefa Delgado and *uillermo RustiaX with the RC of
"anila, Branch 55(D-$E his petition was opposed .& the following/ 61 the sisters of
*uillermo Rustia, namel&, "arciana Rustia vda. de Damian and 8ortencia Rustia)
Cru3=D-1E 6# the heirs of *uillermo Rustias late .rother, Roman Rustia, 0r(, and 6the ampun-ampunan *uillermina Rustia Rustia( he opposition was grounded on
the theor& that Iuisa Delgado vda. de Danao and the other claimants were .arred
under the law from inheriting from their illegitimate half).lood relative %osefa
Delgado(
n ovem.er of 1975, *uillerma Rustia filed a motion to intervene in the
proceedings, claiming she was the onl& surviving descendant in the direct line of
*uillermo Rustia( Despite the o.ections of the oppositors 6respondents herein,
the motion was granted(
<n 'pril , 197-, the original petition for letters of administration was
amended to state that %osefa Delgado and *uillermo Rustia were never married .ut
had merel& lived together as hus.and and wife(
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<n %anuar& #4, 19-$, oppositors 6respondents herein filed a motion to
dismiss the petition in the RC insofar as the estate of *uillermo Rustia was
concerned( he motion was denied on the ground that the interests of the
petitioners and the other claimants remained in issue and should .e properl&threshed out upon su.mission of evidence(
<n "arch 14, 19--, Carlota Delgado vda. de de la Rosa su.stituted for her
sister, Iuisa Delgado vda. de Danao, who had died on "a& 1-, 19-7(
<n "a& 11, 199$, the RC appointed Carlota Delgado vda. de de la Rosa as
administratri? of .oth estates(D-4E he dispositive portion of the decision read/
WHEREFORE, in view of all the foregoing, petitioner and her co-claimants to
the estate of the late Josefa Delgado listed in the Petitions, and enumerated
elsewhere in this Decision, are hereby declared as the only legal heirs of the said
Josefa Delgado who died intestate in the City of Manila on September 8, 1972, and
entitled to partition the same among themselves in accordance with the proportions
referred to in this Decision.
Similarly, the intervenor Guillerma S. Rustia is hereby declared as the sole
and only surviving heir of the late Dr. Guillermo Rustia, and thus, entitled to theentire estate of the said decedent, to the exclusion of the oppositors and the other
parties hereto.
The Affidavit of Self-Adjudication of the estate of Josefa Delgado executed by
the late Guillermo J. Rustia on June 15, 1973 is hereby SET ASIDE and declared of
no force and effect.
As the estates of both dece[d]ents have not as yet been settled, and their
settlement [is] considered consolidated in this proceeding in accordance with law, a
single administrator therefor is both proper and necessary, and, as the petitioner
Carlota Delgado Vda. de dela Rosa has established her right to the appointment as
administratrix of the estates, the Court hereby APPOINTS her as the
ADMINISTRATRIX of the intestate estate of the decedent JOSEFA DELGADO in
relation to the estate of DR. GUILLERMO J. RUSTIA.
Accordingly, let the corresponding LETTERS OF ADMINISTRATION issue to
the petitioner CARLOTA DELGADO VDA. DE DE LA ROSA upon her filing of therequisite bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00).
Finally, oppositor GUILLERMINA RUSTIA RUSTIA is hereby ordered to cease
and desist from her acts of administration of the subject estates, and is likewise
ordered to turn over to the appointed administratix all her collections of the rentals
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and income due on the assets of the estates in question, including all documents,
papers, records and titles pertaining to such estates to the petitioner and appointed
administratix CARLOTA DELGADO VDA. DE DE LA ROSA, immediately upon
receipt of this Decision. The same oppositor is hereby required to render an
accounting of her actual administration of the estates in controversy within a periodof sixty (60) days from receipt hereof.
SO ORDERED.D-E
<n "a& #$, 199$, oppositors filed an appeal which was denied on the
ground that the record on appeal was not filed on time(D-0E he& then filed a petition
for certiorari and mandamusD>%E which was dismissed .& the Court of 'ppeals(D>/E
8owever, on motion for reconsideration and after hearing the parties oral
arguments, the Court of 'ppeals reversed itself and gave due course to oppositors
appeal in the interest of su.stantial ustice(D>-E
n a petition for review to this Court, petitioners assailed the resolution of
the Court of 'ppeals, on the ground that oppositors failure to file the record on
appeal within the reglementar& period was a urisdictional defect which nullified
the appeal( <n <cto.er 1$, 1997, this Court allowed the continuance of the appeal(
he pertinent portion of our decisionD>>E read/
As a rule, periods prescribed to do certain acts must be followed. However,
under exceptional circumstances, a delay in the filing of an appeal may be excused
on grounds of substantial justice.
xxx xxx xxx
The respondent court likewise pointed out the trial court’s pronouncements as
to certain matters of substance, relating to the determination of the heirs of the
decedents and the party entitled to the administration of their estate, which were to
be raised in the appeal, but were barred absolutely by the denial of the record on
appeal upon too technical ground of late filing.
xxx xxx xxx
In this instance, private respondents’ intention to raise valid issues in the
appeal is apparent and should not have been construed as an attempt to delay orprolong the administration proceedings.
xxx xxx xxx
A review of the trial court’s decision is needed.
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xxx xxx xxx
WHEREFORE, in view of the foregoing considerations, the Court
herebyAFFIRMS the Resolution dated November 27, 1991 of the Court of Appealsin CA-G.R. SP No. 23415, for theAPPROVAL of the private respondents’ Record on
Appeal and theCONTINUANCE of the appeal from the Manila, Branch LV Regional
Trial Court’s May 11, 1990 decision.
SO ORDERED.
'cting on the appeal, the Court of 'ppealsD>8E partiall& set aside the trial
courts decision( Gpon motion for reconsideration,D>$E the Court of 'ppeals
amended its earlier decision(D>1E he dispositive portion of the amended decision
read/
With the further modification, our assailed decision
isRECONSIDERED andVACATED. Consequently, the decision of the trial court
isREVERSED andSET ASIDE. A new one is herebyRENDEREDdeclaring: 1.)
Dr. Guillermo Rustia and Josefa Delgado Rustia to have been legally married; 2.)the intestate estate of Dr. Guillermo Rustia, Jacoba Delgado-Encinas and the
children of Gorgonio Delgado (Campo) entitled to partition among themselves the
intestate estate of Josefa D. Rustia in accordance with the proportion referred to in
this decision; 3.) the oppositors-appellants as the legal heirs of the late Dr. Guillermo
Rustia and thereby entitled to partition his estate in accordance with the proportion
referred to herein; and 4.) the intervenor-appellee Guillerma S. Rustia as ineligible to
inherit from the late Dr. Guillermo Rustia; thus revoking her appointment as
administratrix of his estate.
The letters of administration of the intestate estate of Dr. Guillermo Rustia in
relation to the intestate estate of Josefa Delgado shall issue to the nominee of the
oppositors-appellants upon his or her qualification and filing of the requisite bond in
the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00).
Oppositor-appellant Guillermina Rustia Rustia is hereby ordered to cease and
desist from her acts of administration of the subject estates and to turn over to the
appointed administrator all her collections of the rentals and incomes due on theassets of the estates in question, including all documents, papers, records and titles
pertaining to such estates to the appointed administrator, immediately upon notice of
his qualification and posting of the requisite bond, and to render an accounting of her
(Guillermina Rustia Rustia) actual administration of the estates in controversy within
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a period of sixty (60) days from notice of the administrator’s qualification and posting
of the bond.
The issue of the validity of the affidavit of self-adjudication executed by Dr.
Guillermo Rustia on June 15, 1973 isREMANDEDto the trial court for further
proceedings to determine the extent of the shares of Jacoba Delgado-Encinas andthe children of Gorgonio Delgado (Campo) affected by the said adjudication.
8ence, this recourse(
he issues for our resolution are/
1. whether there was a valid marriage between Guillermo Rustia and Josefa Delgado;
2. who the legal heirs of the decedents Guillermo Rustia and Josefa Delgado are;
3. who should be issued letters of administration.
THE MARRIAGE OF GUILLERMO RUSTIA AND JOSEFA DELGADO
' presumption is an inference of the e?istence or non)e?istence of a fact
which courts are permitted to draw from proof of other facts( Presumptions areclassified into presumptions of law and presumptions of fact( Presumptions of law
are, in turn, either conclusive or disputa.le(D>4E
Rule 11, 0ection of the Rules of Court provides/
Sec. 3.Disputable presumptions. — The following presumptions are satisfactory if
uncontradicted, but may be contradicted and overcome by other evidence:
xxx xxx xxx
(aa) That a man and a woman deporting themselves as husband and wife have
entered into a lawful contract of marriage;
xxx xxx xxx
In this case, several circumstances give rise to the presumption that a validmarriage existed between Guillermo Rustia and Josefa Delgado. Their cohabitation
of more than 50 years cannot be doubted. Their family and friends knew them to be
married. Their reputed status as husband and wife was such that even the original
petition for letters of administration filed by Luisa Delgadovda. de Danao in 1975
referred to them as “spouses.”
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Ket, petitioners maintain that %osefa Delgado and *uillermo Rustia had
simpl& lived together as hus.and and wife without the .enefit of marriage( he&
maEe much of the a.sence of a record of the contested marriage, the testimon& of a
witnessD>E attesting that the& were not married, and a .aptismal certificate whichreferred to %osefa Delgado as WSe6orita< or unmarried woman(D>0E
>e are not persuaded(
*irst , although a marriage contract is considered a primar& evidence of
marriage, its a.sence is not alwa&s proof that no marriage in fact tooE place(
D8%E <nce the presumption of marriage arises, other evidence ma& .e presented in
support thereof( he evidence need not necessaril& or directl& esta.lish the
marriage .ut must at least .e enough to strengthen the presumption of marriage(
8ere, the certificate of identit& issued to %osefa Delgado as "rs( *uillermo Rustia,
D8/E the passport issued to her as %osefa D( Rustia,D8-E the declaration under oath of no
less than *uillermo Rustia that he was married to %osefa Delgado D8>E and the titles
to the properties in the name of W*uillermo Rustia married to %osefa Delgado,X
more than ade2uatel& support the presumption of marriage( hese are pu.lic
documents which are prima facie evidence of the facts stated therein(D88E o clear
and convincing evidence sufficient to overcome the presumption of the truth of the
recitals therein was presented .& petitioners(
Second , @lisa vda. de 'nson, petitioners own witness whose testimon& the&
primaril& relied upon to support their position, confirmed that *uillermo Rustia
had proposed marriage to %osefa Delgado and that eventuall&, the two had Wlived
together as hus.and and wife(X his again could not .ut strengthen the
presumption of marriage(
T"ird , the .aptismal certificateD8$E was conclusive proof onl& of the .aptism
administered .& the priest who .apti3ed the child( t was no proof of the veracit&
of the declarations and statements contained therein,D81E such as the alleged single or unmarried 6WSe6oritaX civil status of %osefa Delgado who had no hand in its
preparation(
Petitioners failed to re.ut the presumption of marriage of *uillermo Rustia
and %osefa Delgado( n this urisdiction, ever& intendment of the law leans toward
legitimi3ing matrimon&( Persons dwelling together apparentl& in marriage are
presumed to .e in fact married( his is the usual order of things in societ& and, if
the parties are not what the& hold themselves out to .e, the& would .e living in
constant violation of the common rules of law and propriet&( Semper praesumitur
pro matrimonio( 'lwa&s presume marriage(D84E
THE LAWFUL HEIRS OF JOSEFA DELGADO
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o determine who the lawful heirs of %osefa Delgado are, the 2uestioned
status of the coha.itation of her mother Aelisa Delgado with Ramon <sorio must
first .e addressed(
's mentioned earlier, presumptions of law are either conclusive or disputa.le( Conclusive presumptions are inferences which the law maEes so
peremptor& that no contrar& proof, no matter how strong, ma& overturn them(D8E <n
the other hand, disputa.le presumptions, one of which is the presumption of
marriage, can .e relied on onl& in the a.sence of sufficient evidence to the
contrar&(
Iittle was said of the coha.itation or alleged marriage of Aelisa Delgado and
Ramon <sorio( he oppositors 6now respondents chose merel& to rel& on the
disputa.le presumption of marriage even in the face of such countervailing
evidence as 61 the continued use .& Aelisa and Iuis 6her son with Ramon <sorio
of the surname Delgado and 6# Iuis Delgados and Caridad Concepcions Partida
de CasamientoD80E identif&ing Iuis as W"i'o natural de *elisa (elgadoX 6the natural
child of Aelisa Delgado(D$%E
'll things considered, we rule that these factors sufficientl& overcame the
re.utta.le presumption of marriage( Aelisa Delgado and Ramon <sorio were never
married( 8ence, all the children .orn to Aelisa Delgado out of her relations withRamon <sorio and Iucio Campo, namel&, Iuis and his half).lood si.lings
a3ario, @dil.erta, %ose, %aco.a, *orgonio and the decedent %osefa, all surnamed
Delgado,D$/E were her natural children(D$-E
Pertinent to this matter is the following o.servation/
Suppose, however, that A begets X with B, and Y with another woman, C; then X
and Y would be natural brothers and sisters, but of half-blood relationship. Can they
succeed each other reciprocally?
The law
prohibits reciprocal succession between illegitimate children and
legitimate children of the same parent, even though there is unquestionably a tie of
blood between them. It seems that to allow an illegitimate child to succeedab
intestato (from) another illegitimate child begotten with a parent different from that of
the former, would be allowing the illegitimate child greater rights than a legitimate
child. Notwithstanding this, however, we submit that
succession should be allowed, even when the illegitimate brothers and sisters are
only of the half-blood. The reason impelling the prohibition on reciprocal
successions between legitimate and illegitimate families does not apply to the case
under consideration. That prohibition has for its basis the difference in category
between illegitimate and legitimate relatives. There is no such difference when all
the children are illegitimate children of the same parent, even if begotten with
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different persons. They all stand on the same footing before the law, just like
legitimate children of half-blood relation. We submit, therefore, that
the rules regarding succession of legitimate brothers and sisters should be
applicable to them. Full blood illegitimate brothers and sisters should receive double
the portion of half-blood brothers and sisters; and if all are either of the full blood orof the half-blood, they shall share equally.D$>E
8ere, the a.ove)named si.lings of %osefa Delgado were related to her .&
full).lood, e?cept Iuis Delgado, her half).rother( onetheless, since the& were all
illegitimate, the& ma& inherit from each other( 'ccordingl&, all of them are entitled
to inherit from %osefa Delgado(
>e note, however, that the petitioners .efore us are alread& the nephews,
nieces, grandnephews and grandnieces of %osefa Delgado( Gnder 'rticle 97# of the
new Civil Code, the right of representation in the collateral line taEes place onl& in
favor of the children of .rothers and sisters 6nephews and nieces( Conse2uentl&, it
cannot .e e?ercised .& grandnephews and grandnieces(D$8E herefore, the onl&
collateral relatives of %osefa Delgado who are entitled to partaEe of her intestate
estate are her brot"ers and sisters2 or t"eir c"ildren #"o #ere still alive at t"e time
of "er deat" on September =2 >?@( he& have a vested right to participate in the
inheritance(D$$E he records not .eing clear on this matter, it is now for the trialcourt to determine who were the surviving .rothers and sisters 6or their children of
%osefa Delgado at the time of her death( ogether with *uillermo Rustia, D$1E the&
are entitled to inherit from %osefa Delgado in accordance with 'rticle 1$$1 of the
new Civil Code/D$4E
Art. 1001. Should brothers and sisters or their children survive with the widow or
widower, the latter shall be entitled to one-half of the inheritance and the brothers
and sisters or their children to the other one-half.
0ince %osefa Delgado had heirs other than *uillermo Rustia, *uillermo
could not have validl& adudicated %osefas estate all to himself( Rule 74, 0ection 1
of the Rules of Court is clear( 'dudication .& an heir of the decedents entire
estate to himself .& means of an affidavit is allowed onl& if he is the s& heir to
the estate/
SECTION 1.Extrajudicial settlement by agreement between heirs. – If the decedent
left no will and no debts and the heirs are all of age, or the minors are represented
by their judicial or legal representatives duly authorized for the purpose, the parties
may, without securing letters of administration, divide the estate among themselves
as they see fit by means of a public instrument filed in the office of the register of
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deeds, and should they disagree, they may do so in an ordinary action of partition.If
there is only one heir, he may adjudicate to himself the estate by means of an
affidavit filed in the office of the register of deeds.x x x (emphasis supplied)
THE LAWFUL HEIRS OF GUILLERMO RUSTIA
ntervenor 6now co)respondent *uillerma Rustia is an illegitimate
childD$E of *uillermo Rustia( 's such, she ma& .e entitled to successional rights
onl& upon proof of an admission or recognition of paternit&( D$0E 0he, however,
claimed the status of an acEnowledged illegitimate child of *uillermo Rustia
onl& )+t&' the death of the latter on Ae.ruar& #-, 1974 at which time it was alread&
the new Civil Code that was in effect(
Gnder the old Civil Code 6which was in force till 'ugust #9, 195$,
illegitimate children a.solutel& had no hereditar& rights( his draconian edict was,
however, later rela?ed in the new Civil Code which granted certain successional
rights to illegitimate children .ut onl& on condition that the& were first recogni3ed
or acEnowledged .& the parent(
Gnder the new law, recognition ma& .e compulsor& or voluntar&(
D1%E Recognition is compulsor& in an& of the following cases/
(1) in cases of rape, abduction or seduction, when the period of the offense
coincides more or less with that of the conception;
(2) when the child is in continuous possession of status of a child of the alleged
father (or mother)D1/E by the direct acts of the latter or of his family;
(3) when the child was conceived during the time when the mother cohabited with
the supposed father;
(4) when the child has in his favor any evidence or proof that the defendant is his
father.D1-E
<n the other hand, voluntar& recognition ma& .e made in the record of .irth, a
will, a statement .efore a court of record or in an& authentic writing(D1>E
ntervenor *uillerma sought recognition on two grounds/ first, compulsor&
recognition through the open and continuous possession of the status of anillegitimate child and second, voluntar& recognition through authentic writing(
here was apparentl& no dou.t that she possessed the status of an
illegitimate child from her .irth until the death of her putative father *uillermo
Rustia( 8owever, this did not constitute acEnowledgment .ut a mere ground by
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#"ic" s"e could "ave compelled acBno#ledgment t"roug" t"e courts(
D18E Aurthermore, an& 6udicial action for compulsor& acEnowledgment has a dual
limitation/ the lifetime of the child and the lifetime of the putative parent(D1$E <n
the death of either, the action for compulsor& recognition can no longer .e filed(
D11E n this case, intervenor *uillermas right to claim compulsor& acEnowledgment prescri.ed upon the death of *uillermo Rustia on Ae.ruar& #-, 1974(
he claim of voluntar& recognition 6*uillermas second ground must
liEewise fail( 'n authentic writing, for purposes of voluntar& recognition, is
understood as a genuine or indu.ita.le writing of the parent 6in this case,
*uillermo Rustia( his includes a pu.lic instrument or a private writing admitted
.& the father to .e his(D14E Did intervenors report card from the Gniversit& of 0anto
omas and %osefa Delgados o.ituar& prepared .& *uillermo Rustia 2ualif& as
authentic writings under the new Civil CodeH Gnfortunatel& not( he report card of
intervenor *uillerma did not .ear the signature of *uillermo Rustia( he fact that
his name appears there as intervenors parentFguardian holds no weight since he
had no participation in its preparation( 0imilarl&, while witnesses testified that it
was *uillermo Rustia himself who drafted the notice of death of %osefa Delgado
which was pu.lished in the 0GD'K "@0 on 0eptem.er 1$, 197#, that
pu.lished o.ituar& was not the authentic writing contemplated .& the law(
>hat could have .een admitted as an authentic writing was the original
manuscript of the notice, in the handwriting of *uillermo Rustia himself andsigned .& him, not the newspaper clipping of the o.ituar&( he failure to present
the original signed manuscript was fatal to intervenors claim(
he same misfortune .efalls the ampun-ampunan, *uillermina Rustia
Rustia, who was never adopted in accordance with law( 'lthough a petition for her
adoption was filed .& *uillermo Rustia, it never came to fruition and was
dismissed upon the latters death( >e affirm the ruling of .oth the trial court and
the Court of 'ppeals holding her a legal stranger to the deceased spouses and
therefore not entitled to inherit from them ab intestato( >e 2uote/
Adoption is a juridical act, a proceeding in rem, which [created] between two
persons a relationship similar to that which results from legitimate paternity and
filiation. Only an adoption made through the court, or in pursuance with the
procedure laid down under Rule 99 of the Rules of Court is valid in this jurisdiction.
It is not of natural law at all, but is wholly and entirely artificial. To establish the
relation, the statutory requirements must be strictly carried out, otherwise, the
adoption is an absolute nullity. The fact of adoption is never presumed, but must be
affirmatively [proven] by the person claiming its existence.D1E
Premises considered, we rule that two of the claimants to the estate of
*uillermo Rustia, namel&, intervenor *uillerma Rustia and the ampun-
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ampunan *uillermina Rustia Rustia, are not lawful heirs of the decedent( Gnder
'rticle 1$$# of the new Civil Code, if there are no descendants, ascendants,
illegitimate children, or surviving spouse, the collateral relatives shall succeed to
the entire estate of the deceased( herefore, the lawful heirs of *uillermo Rustia
are the remaining claimants, consisting of his sisters, D10E nieces and nephews(D4%E
ENTITLEMENT TO LETTERS OF ADMINISTRATION
'n administrator is a person appointed .& the court to administer the
intestate estate of the decedent( Rule 7-, 0ection of the Rules of Court prescri.es
an order of preference in the appointment of an administrator/
Sec. 6.When and to whom letters of administration granted. – If no executor is
named in the will, or the executor or executors are incompetent, refuse the trust, or
fail to give a bond, or a person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in
the discretion of the court, or to such person as such surviving husband or wife, or
next of kin, requests to have appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the
person selected by them, be incompetent or unwilling, or if the husband or widow or
next of kin, neglects for thirty (30) days after the death of the person to apply for
administration or to request that the administration be granted to some other person,
it may be granted to one or more of the principal creditors, if competent and willing to
serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to
such other person as the court may select.
n the appointment of an administrator, the principal consideration is the
interest in the estate of the one to .e appointed( D4/E he order of preference does not
rule out the appointment of co)administrators, speciall& in cases where
ustice and e2uit& demand that opposing parties or factions .e represented in the
management of the estates,D4-E a situation which o.tains here(
It is in this light that we see fit to appoint joint administrators, in the persons of
Carlota Delgadovda. de de la Rosa and a nominee of the nephews and nieces of
Guillermo Rustia. They are the next of kin of the deceased spouses Josefa Delgado
and Guillermo Rustia, respectively.
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7HERE8ORE, the petition 6which seeEs to reinstate the "a& 11, 199$
decision of the RC "anila, Branch 55 is here.& DENIED( he assailed <cto.er
#4, #$$# decision of the Court of 'ppeals is A88IRED with the following
modifications/
1( *uillermo Rustias %une 15, 197 affidavit of self)adudication is
here.& ANN!LLED(
#( the intestate estate of *uillermo Rustia shall inherit half of the intestate
estate of %osefa Delgado( he remaining half shall pertain to 6a the full and half)
si.lings of %osefa Delgado who survived her and 6. the children of an& of %osefa
Delgados full) or half)si.lings who ma& have predeceased her, also surviving at
the time of her death( %osefa Delgados grandnephews and grandnieces are
e?cluded from her estate( n this connection, the trial court is here.& ordered to
determine the identities of the relatives of %osefa Delgado who are entitled to share
in her estate(
( *uillermo Rustias estate 6including its one)half share of %osefa Delgados
estate shall .e inherited .& "arciana Rustia vda. de Damian and 8ortencia Rustia
Cru3 6whose respective shares shall .e per capita and the children of the late
Roman Rustia, 0r( 6who survived *uillermo Rustia and whose respective shares
shall .e per stirpes( Considering that "arciana Rustia vda. deDamian and
8ortencia Rustia Cru3 are now deceased, their respective shares shall pertain totheir estates(
4( Ietters of administration over the still unsettled intestate estates of
*uillermo Rustia and %osefa Delgado shall issue to Carlota Delgado vda. de de la
Rosa and to a nominee from among the heirs of *uillermo Rustia, as oint
administrators, upon their 2ualification and filing of the re2uisite .ond in such
amount as ma& .e determined .& the trial court(
No pronouncement as to costs.
SO ORDERED.
*(R( o( 149751( "arch 11, #$$5!
PGRAC'C< B'II<)"<@R< and %<+@C<∗ B'II<, petitioners2
vs. @G*@' 0@P"<, C<0G@I< R<BI@0 and PI'CD< R<BI@0, respondents(
D @ C 0 <
C'II@%<, 0R(, (/
%ose Balilo was the owner of a parcel of land, with an area of 7(7-7 hectares, located in 0an
%ose, <ccidental "indoro, covered .& 8omestead Patent o( 47-4 issued on Ae.ruar& #1,
19-( Based on the said patent, <riginal Certificate of itle 6<C o( $14 was issued to
and under his name .& the Register of Deeds(D/E
<n 'ugust 1#, 194, %ose Balilo died intestate( D-E 0ometime in 194-, iniana Balilo, the
sister of %ose Balilo, filed a petition in the Court of Airst nstance 6CA of Pampanga, for the
guardianship of the propert& and the person of %ovencio Balilo whom she alleged to .e the
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son of her .rother, %ose Balilo= hence, her nephew( he case was docEeted as 0pecial
Proceeding o( ##( iniana filed a motion in the said case, for authorit& to e?ecute, for and
in .ehalf of her ward, a deed of a.solute sale over the propert& covered .& <C o( $14 in
favor of %ose 0eptimo for P75$($$( he CA granted the motion( iniana e?ecuted the deed
of a.solute sale over the propert& in favor of %ose 0eptimo who, thereafter, declared the propert& in his name for ta?ation purposes and paid the realt& ta?es thereon(
8owever, %ose 0eptimo failed to register the deed in the <ffice of the Register of Deeds and,
conse2uentl&, to secure a torrens title over the propert& in his name( he guardianship case
was terminated on 0eptem.er #4, 1951 per the <rder of the CA of even date(D>E
hereafter, on <cto.er 1#, 19, %ovencio Balilo filed a complaint against %ose 0eptimo in
the CA of <ccidental "indoro, to compel the latter to resell the propert& to him( he case
was docEeted as Civil Case o( R)159( %ovencio alleged therein that he was the onl&
legitimate child of the spouses %ose Balilo and %uana +illarama, and that the latter died on
'ugust $, 194( 8e pra&ed that, after due proceedings, udgment .e rendered in his favor,
thus/
>8@R@A<R@, it is most respectfull& pra&ed that an order .e issued re2uiring the Defendant
to resell the said Iot o( 149, Pls), situated in 0an %ose, <ccidental "indoro, to the
herein Plaintiff upon tender to the herein Defendant the sum of 0@+@ 8GDR@D AAK
6P75$($$ P@0<0, Philippine Currenc&, or an& such sum as this 8onora.le Court finds ust
and fair, and re2uiring said Defendant to deliver possession of said homestead land to the
herein Plaintiff(
Plaintiff further pra&s for other relief as ma& .e deemed ust and proper in the premises(D8E%ovencio amended the complaint and impleaded Placido Ro.les as part&)defendant, on his
claim that the latter purchased a five)hectare portion of the propert& .efore the complaint was
filed( <n ovem.er -, 19, the CA rendered udgment dismissing the complaint( he CA
ruled that %ovencio had no right to repurchase the propert&, the five)&ear period under
0ection 119 of Commonwealth 'ct o( 141 having long e?pired( %ovencio failed to appeal
the decision(D$E
<n "arch , 19-7, Purificacion Balilo)"ontero filed a complaint with the Regional rial
Court 6RC of 0an %ose, <ccidental "indoro, Branch 4, against the respondents, @ugenia
0eptimo, the surviving spouse of %ose 0eptimo, and the spouses Placido Ro.les andConsuelo Ro.les, for recover& of possession of the said propert&( 8owever, despite the
allegation in his complaint in Civil Case o( R)159 that he was the onl& legitimate child of
%ose Balilo, she impleaded %ovencio Balilo as part&)plaintiff(
he complaint alleged, inter alia, that the parties were the children and onl& legal heirs of the
late %ose Balilo who, .efore his death, was the owner of Iot o( 149 covered .& <C o(
$14 located in 0an %ose, <ccidental "indoro= onl& a &ear .efore the complaint was filed,
Purificacion learned that she was one of the co)owners of the propert&= that the respondents
claimed ownership over the propert& and installed tenants thereon= and despite their
demands, the respondents and their tenants refused to do so(
%ovencio and Purificacion pra&ed that, after due proceedings, udgment .e rendered in their
favor/
>8@R@A<R@, it is respectfull& pra&ed of this 8onora.le Court that udgment .e rendered
for the plaintiffs and against the defendants/
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1( Restoring possession of the landholdings in 2uestion unto the plaintiffs=
#( <rdering defendants to reim.urse plaintiffs the rentals on the landholdings to .e
determined .& this 8onora.le Court=
( <rdering the defendants to pa& the plaintiffs the sum of P#$,$$$($$ as attorne&s fees
and litigation e?penses=4( <rdering the defendants to pa& the costs of suit= and
5( @?tending unto the plaintiffs such other reliefs to which the& ma& .e entitled in law
and e2uit&(D1E
he summons and complaint were served on respondents @ugenia 0eptimo and Consuelo
Ro.les( 's per the return of the sheriff, Placido Ro.les was alread& dead(
n her answer to the complaint, respondent @ugenia 0eptimo alleged that her late hus.and
%ose 0eptimo had purchased the propert& from %ovencio Balilo, through his guardian, and
that the sale was approved .& the CA of Pampanga in 0pecial Proceeding o( ##( 0he
specificall& denied, for lacE of information sufficient to form a .elief as to the truth thereof,
the allegation of Purificacion "ontero that she was one of %ose Balilos children and one of
his heirs( Consuelo Ro.les was declared in default for her failure to file her answer to the
complaint(D4E
<n <cto.er 15, 1991, the trial court rendered udgment in favor of %ovencio and
Purificacion( he fallo of the decision reads/
Premises thoroughl& and fairl& considered, udgment is here.& rendered/
1( <rdering defendant @ugenia 0eptimo as successor)in)interest of decedent %ose 0eptimo
to recover& 6 sic to plaintiff Purificacion Balilo)"ontero one)half of the parcel of agriculturalland covered .& <riginal Certificate of itle o( $14=
#( Den&ing claim for damages= and
( Dismissing counterclaim(
0< <RD@R@D(DE
<nl& respondent @ugenia 0eptimo appealed the decision to the Court of 'ppeals 6C', where
she alleged the following/
( hat the trial court erred in finding that the plaintiff Purificacion Balilo)"ontero did
not lost 6 sic her right to recover the propert& from the defendants, .ecause she was not a
part& to the sale and for not having actual Enowledge on the guardianship proceedings(( hat the trial court erred in ruling that the sale of the land .& the legal guardian of
%ovencio Balilo dul& authori3ed and approved .& the Court which 6 sic the guardianship
proceedings was .eing held did not affect the share of plaintiff Purificacion Balilo)"ontero
.ecause the sale was not registered(
( he trial court erred in ordering defendant @ugenia 0eptimo to reconve& 1F# of the
propert& in 2uestion covered .& C o( )$14 to plaintiff Purificacion Balilo)"ontero(D0E
n a Decision dated 'pril 11, #$$1, the C' affirmed with modification the decision of the
trial court( he C' applied the <ld Civil Code
on testate succession, and ruled that the
propert& was registered in the name of %ose Balilo whose civil status was stated as single(
Considering that he was survived .& Purificacion "ontero, his wife %uana +illarama and
their son %ovencio Balilo when he died in 194= and when %uana +illarama died intestate,
was, in turn, survived .& her son %ovencio Balilo and Purificacion "ontero, %ovencio was
entitled to two)thirds undivided portion of the propert&, while Purificacion "ontero was
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entitled to one)third undivided portion of the propert&( Respondent @ugenia 0eptimo did not
file an& motion for the reconsideration of the decision( 8owever, Purificacion "ontero filed
a motion for the partial reconsideration of the decision, alleging that, appl&ing the provisions
of the <ld Civil Code on intestate succession, she was entitled to an undivided one)half
portion of the propert&( he C', however, denied the said motion(Purificacion "ontero, now the petitioner, filed the instant petition for review, contending
that/
8@ C<GR <A 'PP@'I0 *R'+@IK @RR@D 8<ID* 8' 8@ P@<@R
0 @I@D <IK < <@)8RD 61F 08'R@ <A 8@ PR<P@RK 0<G*8 <
B@ R@C<+@R@D 8@R@, 0'D 'D%GDC'< AD* < I@*'I 0GPP<R
GD@R 8@ C+I C<D@ <A 0P' >8C8 >'0 8@ I'> 8@ PR@+'I*( D/%E
he petitioner maintains that the C' should have applied the provisions of the <ld Civil
Code
on intestate succession .ecause %ose Balilo died intestate in 194 .efore the ew Civil
Code tooE effect( 0he posits that she and %ovencio Balilo were entitled to inherit the
propert& from %ose Balilo in e2ual shares, .ecause there is no competent evidence on record
to prove that %ose Balilo and %uana +illarama, the mother of %ovencio, were married(
he petition is granted(
>e agree with the contention of the petitioner that there is no evidence on record that %ose
Balilo and %uana +illarama were married, or that the& coha.ited with each other as hus.and
and wife( @ven %ovencio Balilo opted not to testif&( either was %ose Balilo survived .& an&
ascendants( 8owever, we agree with the ruling of the C' that %ose Balilo and *ertrudes
icdao were not, liEewise, married(he contention of the petitioner that the C' erred in appl&ing the
law on testate succession under the <ld Civil Code is, liEewise, correct( he appellate court
should have applied the provisions of the <ld Civil Code on intestate succession considering
that %ose Balilo died intestate in 194, .efore the effectivit& of the ew Civil Code(
'rticle 91 of the <ld Civil Code provides that when a person dies intestate, his legitimate
children and their descendants succeed him, without distinction of se?, or age, even though
the& spring from different marriages( 'rticle 9# of the same Code provides that the children
of the deceased shall alwa&s inherit from him in their own right, dividing the inheritance in
e2ual shares( "oreover, under 'rticle 99 of the <ld Civil Code, in the a.sence of legitimate descendants or ascendants, the natural children legall& acEnowledged and those
legitimated .& ro&al succession shall succeed to the entire estate of the deceased(
>hen %ose Balilo died intestate on 'ugust 1#, 194, he was survived .& his daughter, the
petitioner herein, his son %ovencio Balilo, and *ertrudes icdao and %uana +illarama(
Conforma.l& to 'rticle 99 of the <ld Civil Code, onl& the petitioner and %ovencio Balilo
inherited the propert& in e2ual shares, to the e?clusion of %uana +illarama and *ertrudes
icdao( either of them was the lawful wife of %ose Balilo( Besides, under 'rticle 94 of
the <ld Civil Code, the surviving spouse shall inherit onl& in default of the persons
enumerated Win the three sections ne?t preceding(X
Conse2uentl&, when %ovencio Balilo, through his guardian iniana Balilo, e?ecuted the deed
of a.solute sale over the entire propert& on "a& #, 194- in favor of %ose 0eptimo, the latter
did not ac2uire title over the entire propert&, .ut onl& to an undivided one)half portion
thereof which %ovencio Balilo had inherited from %ose Balilo( %ose 0eptimo could not have
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purchased and ac2uired the other half of the propert& from %ovencio Balilo .ecause the latter
was not the owner thereof( 8ence, the C' erred in holding that %ovencio Balilo inherited an
undivided two)thirds portion of the propert&, and that %ose 0eptimo ac2uired title over the
said two)thirds undivided portion(
IN LIGHT O8 ALL THE 8OREGOING, the petition is GRANTED( he assailedDecision and Resolution of the Court of 'ppeals are R@+@R0@D 'D 0@ '0D@( he
Decision of the Regional rial Court is REINSTATED( o pronouncement as to costs(
0< <RD@R@D(
[G.R. No. 119064. August 22, 2000]
NENG “KAGUI KADIGUIA” MALANG, petitioner, vs.HON. COROCOY MOSON,
Presiding Judge of 5th Shari’a District Court, Cotabato City, HADJI MOHAMMAD
ULYSSIS MALANG, HADJI ISMAEL MALINDATU MALANG, FATIMA MALANG,DATULNA MALANG, LAWANBAI MALANG, JUBAIDA KADO MALANG, NAYO
OMAL MALANG and MABAY GANAP MALANG,respondents.
D E C I S I O N
GONZAGA-REYES, J.:
Presented for resolution in this special civil action ofcertiorari is the issue of whether
or not the regime of conjugal partnership of gains governed the property relationship
of two Muslims who contracted marriage prior to the effectivity of the Code of Muslim
Personal Laws of the Philippines (hereafter, “P.D. 1083” or “Muslim Code”). The
question is raised in connection with the settlement of the estate of the deceased
husband.
Hadji Abdula Malang, a Muslim, contracted marriage with Aida (Kenanday) Limba.
They begot three sons named Hadji Mohammad Ulyssis, Hadji Ismael Malindatu and
Datulna, and a daughter named Lawanbai. Hadji Abdula Malang was engaged in
farming, tilling the land that was Aida’s dowry (mahr or majar). Thereafter, he
bought a parcel of land in Sousa, Cotabato. Hadji Abdula and Aida already had two
children when he married for the second time another Muslim named Jubaida Kado
in Kalumamis, Talayan, Maguindanao. No child was born out of Hadji Abdula’ssecond marriage. When Aida, the first wife, was pregnant with their fourth child,
Hadji Abdula divorced her.
In 1965, Hadji Abdula married another Muslim, Nayo H. Omar but they were
childless. Thereafter, Hadji Abdula contracted marriage with Hadji Mabai (Mabay) H.
Adziz in Kalumamis, Talayan, Maguindanao and soon they had a daughter named
Fatima (Kueng). Hadji Abdula and Hadji Mabai stayed in that place to farm while
Hadji Abdula engaged in the business of buying and selling of rice, corn and other
agricultural products. Not long after, Hadji Abdula married three other Muslim
women named Saaga, Mayumbai and Sabai but he eventually divorced them.
Hadji Abdula then migrated to Tambunan where, in 1972, he married petitioner Neng
“Kagui Kadiguia” Malang, his fourth wife, excluding the wives he had divorced. They
established residence in Cotabato City but they were childless. For a living, they
relied on farming and on the business of buying and selling of agricultural products.
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Hadji Abdula acquired vast tracts of land in Sousa and Talumanis, Cotabato City,
some of which were cultivated by tenants. He deposited money in such banks as
United Coconut Planters Bank, Metrobank and Philippine Commercial and Industrial
Bank.
On December 18, 1993, while he was living with petitioner in Cotabato City, HadjiAbdula died without leaving a will. On January 21, 1994, petitioner filed with the
Shari’a District Court in Cotabato City a petition for the settlement of his estate with a
prayer that letters of administration be issued in the name of her niece, Tarhata
Lauban.
Petitioner claimed in that petition that she was the wife of Hadji Abdula; that his other
legal heirs are his three children named Teng Abdula, Keto Abdula and Kueng
Malang, and that he left seven (7) parcels of land, five (5) of which are titled in Hadji
Abdula’s name “married to Neng P. Malang,” and a pick-up jeepney.
On February 7, 1994, the Shari’a District Court ordered the publication of the
petition. After such publication or on March 16, 1994, Hadji Mohammad Ulyssis
Malang (“Hadji Mohammad”, for brevity), the eldest son of Hadji Abdula, filed his
opposition to the petition. He alleged among other matters that his father’s surviving
heirs are as follows: (a) Jubaida Malang, surviving spouse; (b) Nayo Malang,
surviving spouse; (c) Mabay Malang, surviving spouse; (d) petitioner Neng Malang,
surviving spouse; (e) oppositor Hadji Mohammad Ulyssis Malang who is also known
as “Teng Abdula,” son; (f) Hadji Ismael Malindatu Malang, also known as “Keto
Abdula,” son, (g) Fatima Malang, also known as “Kueng Malang,” daughter; (h)Datulna Malang, son, and (i) Lawanbai Malang, daughter. Oppositor Hadji
Mohammad Ulyssis Malang alleged that since he and his brother, Hadji Ismael
Malindatu Malang, had helped their father in his business, then they were more
competent to be administrators of his estate.
On March 30, 1994, Jubaida Malang, Ismael Malindatu Malang, Nayo Malang,
Fatima Malang, Mabay Malang, Datulna Malang and Lawanbai Malang filed an
opposition to the petition, adopting as their own the written opposition of Hadji
Mohammad.
On April 7, 1994, the Shari’a District Court issued an Order appointing Hadji
Mohammad administrator of his father’s properties outside Cotabato City. The same
order named petitioner and Hadji Ismael Malindatu Malang as joint administrators of
the estate in Cotabato City. Each administrator was required to post a bond in the
amount of P100,000.00. On April 13, 1994, letters of administration were issued to
Hadji Mohammad after he had posted the required bond. He took his oath on the
same day.The following day, Hadji Ismael and petitioner likewise filed their
respective bonds and hence, they were allowed to take their oath as administrators.
On April 25, 1994 and May 3, 1994, petitioner filed two motions informing the courtthat Hadji Abdula had outstanding deposits with nine (9) major banks. Petitioner
prayed that the managers of each of those banks be ordered to submit a bank
statement of the outstanding deposit of Hadji Abdula. The Shari’a District Court
having granted the motions,Assistant Vice President Rockman O. Sampuha of
United Coconut Planters Bank informed the court that as of April 24, 1994, the
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outstanding deposit of Hadji Abdula amounted to one million five hundred twenty
thousand four hundred pesos and forty-eight centavos (P1,520,400.48). The Senior
Manager of the Cotabato branch of Metrobank also certified that as of December 18,
1993, “Hadji Abdula Malang or Malindatu Malang” had on savings deposit the
balance of three hundred seventy-eight thousand four hundred ninety-three pesosand 32/100 centavos (P378,493.32). PCIB likewise issued a certification that Hadji
Abdula had a balance of eight hundred fifty pesos (P850.00) in his current account
as of August 11, 1994.
During the pendency of the case, petitioner suffered a congestive heart failure that
required immediate medical treatment. On May 5, 1994, she filed a motion praying
that on account of her ailment, she be allowed to withdraw from UCPB the amount of
three hundred thousand pesos (P300,000.00) that shall constitute her advance
share in the estate of Hadji Abdula. After due hearing, the Sharia District Court
allowed petitioner to withdraw the sum of two hundred fifty thousand pesos
(P250,000.00).
On May 12, 1994, the Shari’a District Court required petitioner and Hadji Ismael as
joint administrators to submit an inventory and appraisal of all properties of Hadji
Abdula. In compliance therewith, Hadji Ismael submitted an inventory showing that in
Cotabato City, Hadji Abdula had seven (7) residential lots with assessed value
ranging from P5,020.00 to P25,800.00, an agricultural land with assessed value of
P860.00, three (3) one-storey residential buildings, and one (1) two-storey residential
building. All these properties were declared for taxation purposes in Hadji Abdula’sname.
For her part, petitioner submitted an inventory showing that Hadji Abdula “married to
Neng Malang” had seven (7) residential lots with a total assessed value of
P243,840.00 in Cotabato City, an Isuzu pick-up jeepney valued at P30,000.00 and
bank deposits.
In the Memorandum that she filed with the Shari’a District Court, petitioner asserted
that all the properties located in Cotabato City, including the vehicle and bank
deposits, were conjugal properties in accordance with Article 160 of the Civil Code
and Article 116 of the Family Code while properties located outside of Cotabato City
were exclusive properties of the decedent.
On the other hand, the oppositors contended in their own Memorandum that all the
properties left by Hadji Abdula were his exclusive properties for various reasons.
First, Hadji Abdula had no conjugal partnership with petitioner because his having
contracted eight (8) marriages with different Muslim women was in violation of the
Civil Code that provided for a monogamous marriage; a conjugal partnership
presupposes a valid civil marriage, not a bigamous marriage or a common-law
relationship. Second, the decedent adopted a “complete separation of propertyregime” in his marital relations; while his wives Jubaida Kado, Nayo Hadji Omal
and Mabay Ganap Hadji Adzis contributed to the decedent’s properties, there is
no evidence that petitioner had contributed funds for the acquisition of such
properties. Third, the presumption that properties acquired during the marriage are
conjugal properties is inapplicable because at the time he acquired the properties,
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the decedent was married to four (4) women. Fourth, the properties are not conjugal
in nature notwithstanding that some of these properties were titled in the name of the
decedent “married to Neng Malang” because such description is not conclusive of
the conjugal nature of the property. Furthermore, because petitioner admitted in her
verified petition that the properties belonged “to the estate of decedent,” she wasestopped from claiming, after formal offer of evidence, that the properties were
conjugal in nature just because some of the properties were titled in Hadji Abdula’s
name “married to Neng Malang.” Fifth, if it is true that the properties were conjugal
properties, then these should have been registered in the names of both petitioner
and the decedent.
In its Order of September 26, 1994, the Shari’a District Court presided by Judge
Corocoy D. Moson held that there was no conjugal partnership of gains between
petitioner and the decedent primarily because the latter married eight times. The
Civil Code provision on conjugal partnership cannot be applied if there is more than
one wife because “conjugal partnership presupposes a valid civil marriage, not a
plural marriage or a common-law relationship.” The court further found that the
decedent was “the chief, if not the sole, breadwinner of his families” and that
petitioner did not contribute to the properties unlike the other wives named Jubaida,
Nayo and Mabay. The description “married to Neng Malang” in the titles to the real
properties is no more than that –-- the description of the relationship between
petitioner and the decedent. Such description is insufficient to prove that the
properties belong to the conjugal partnership of gains. The court stated:In the instant case, decedent had four (4) wives at the time he acquired the
properties in question. To sustain the contention of the petitioner that the properties
are her conjugal property with the decedent is doing violence to the provisions of the
Civil Code. Be it noted that at the time of the marriage of the petitioner with the
decedent, there were already three (3) existing marriages. Assuming for the
moment that petitioner and the decedent had agreed that the property regime
between them will be governed by the regime of conjugal partnership property, that
agreement is null and void for it is against the law, public policy, public order, good
moral(s) and customs.
Under Islamic law, the regime of property relationship is complete separation of
property, in the absence of any stipulation to the contrary in the marriage settlements
or any other contract (Article 38, P.D. 1083). There being no evidence of such
contrary stipulation or contract, this Court concludes as it had begun, that the
properties in question, both real and personal, are not conjugal, but rather, exclusive
property of the decedent.
Thus, the Shari’a District Court held that the Islamic law should be applied in the
distribution of the estate of Hadji Abdula and accordingly disposed of the case asfollows:
WHEREFORE, premises considered, the Court orders the following:
1) That the estate shall pay the corresponding estate tax, reimburse the funeral
expenses in the amount of P50,000.00, and the judicial expenses in the amount of
P2,040.80;
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2) That the net estate, consisting of real and personal properties, located in Talayan,
Maguindanao and in Cotabato City, is hereby ordered to be distributed and
adjudicated as follows:
a) Jubaida Kado Malang ------------------------- 2/64 of the estate
b) Nayo Omar Malang ------------------------- 2/64 - do -c) Mabai Aziz Malang ------------------------- 2/64 - do -
d) Neng “Kagui Kadiguia” Malang ------------------- 2/64 - do -
e) Mohammad Ulyssis Malang-------------------------14/64 - do -
f) Ismael Malindatu Malang---------------------------14/64 - do -
g) Datulna Malang ------------------------- 14/64 - do -
h) Lawanbai Malang ------------------------- 7/64 - do -
i) Fatima (Kueng) Malang ------------------------- 7/64 - do -
Total------------------------ 64/64
3) That the amount of P250,000.00 given to Neng “Kagui Kadiguia” Malang by way
of advance be charged against her share and if her share is not sufficient, to return
the excess; and
4) That the heirs are hereby ordered to submit to this court their Project of Partition
for approval, not later than three (3) months from receipt of this order.
SO ORDERED.
On October 4, 1994, petitioner filed a motion for the reconsideration of that Order.
The oppositors objected to that motion. On January 10, 1995, the Shari’a District
Court denied petitioner’s motion for reconsideration. Unsatisfied, petitioner filed anotice of appeal. However, on January 19, 1995, she filed a manifestation
withdrawing the notice of appeal on the strength of the following provisions of P.D.
No. 1083:
Art. 145.Finality of Decisions – The decisions of the Shari’a District Courts whether
on appeal from the Shari’a Circuit Court or not shall be final. Nothing herein
contained shall affect the original and appellate jurisdiction of the Supreme Court as
provided in the Constitution.
Petitioner accordingly informed the court that she would be filing “an original action
ofcertiorari with the Supreme Court.”
On March 1, 1995, petitioner filed the instant petition forcertiorari with preliminary
injunction and/or restraining order. She contends that the Shari’a District Court
gravely erred in: (a) ruling that when she married Hadji Abdula Malang, the latter
had three existing marriages with Jubaida Kado Malang, Nayo Omar Malang and
Mabay Ganap Malang and therefore the properties acquired during her marriage
could not be considered conjugal, and (b) holding that said properties are not
conjugal because under Islamic Law, the regime of relationship is complete
separation of property, in the absence of stipulation to the contrary in the marriagesettlement or any other contract.
As petitioner sees it, “the law applicable on issues of marriage and property regime
is the New Civil Code”, under which all property of the marriage is presumed to
belong to the conjugal partnership. The Shari’a Court, meanwhile, viewed the Civil
Code provisions on conjugal partnership as incompatible with plural marriage, which
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is permitted under Muslim law, and held the applicable property regime to be
complete separation of property under P.D. 1083.
Owing to the complexity of the issue presented, and the fact that the case is one of
first impression --- this is a singular situation where the issue on what law governs
the property regime of a Muslim marriage celebrated prior to the passage of theMuslim Code has been elevated from a Shari’a court for the Court’s resolution --- the
Court decided to solicit the opinions of twoamici curiae, Justice Ricardo C.
Puno and former Congressman Michael O. Mastura.The Court extends its warmest
thanks to theamici curiae for their valuable inputs in their written memoranda and in
the hearing of June 27, 2000.
Resolution of the instant case is made more difficult by the fact that very few of the
pertinent dates of birth, death, marriage and divorce are established by the record.
This is because, traditionally, Muslims do not register acts, events or judicial decrees
affecting civil status. It also explains why the evidence in the instant case consisted
substantially of oral testimonies.
What is not disputed is that: Hadji Abdula contracted a total of eight marriages,
counting the three which terminated in divorce; all eight marriages were celebrated
during the effectivity of the Civil Code and before the enactment of the Muslim Code;
Hadji Abdula divorced four wives --- namely, Aida, Saaga, Mayumbai and Sabai ---
all divorces of which took place before the enactment of the Muslim Code; and, Hadji
Abdula died on December 18, 1993, after the Muslim Code and Family Code took
effect, survived by four wives (Jubaida, Nayo, Mabay and Neng) and five children,four of whom he begot with Aida and one with Mabay. It is also clear that the
following laws were in force, at some point or other, during the marriages of Hadji
Abdula: the Civil Code, which took effect on August 30, 1950; Republic Act No. 394
(“R.A. 394”), authorizing Muslim divorces, which was effective from June 18, 1949 to
June 13, 1969; the Muslim Code, which took effect February 4, 1977; and the Family
Code, effective August 3, 1988.
Proceeding upon the foregoing, the Court has concluded that the record of the case
is simply inadequate for purposes of arriving at a fair and complete resolution of the
petition. To our mind, any attempt at this point to dispense with the basic issue given
the scantiness of the evidence before us could result in grave injustice to the parties
in this case, as well as cast profound implications on Muslim families similarly or
analogously situated to the parties herein. Justice and accountability dictate a
remand; trial must reopen in order to supply the factual gaps or, in Congressman
Mastura’s words, “missing links”, that would be the bases for judgment and
accordingly, allow respondent court to resolve the instant case. In ordering thus,
however, we take it as an imperative on our part to set out certain guidelines in the
interpretation and application of pertinent laws to facilitate the task of respondentcourt.
It will also be recalled that the main issue presented by the petition --- concerning the
property regime applicable to two Muslims married prior to the effectivity of the
Muslim Code --- was interposed in relation to the settlement of the estate of the
deceased husband. Settlement of estates of Muslims whose civil acts predate the
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enactment of the Muslim Code may easily result in the application of the Civil Code
and other personal laws, thus convincing the Court that it is but propitious to go
beyond the issue squarely presented and identify such collateral issues as are
required to be resolved in a settlement of estate case. Asamicus
curiae Congressman Mastura puts it, the Court does not often come by a case asthe one herein, and jurisprudence will be greatly enriched by a discussion of the
“watershed of collateral issues” that this case presents.
The Court has identified the following collateral issues, which we hereby present in
question form: (1) What law governs the validity of a Muslim marriage celebrated
under Muslim rites before the effectivity of the Muslim Code? (2) Are multiple
marriages celebrated before the effectivity of the Muslim Code valid? (3) How do the
Court’s pronouncements inPeople vs. Subano,73 Phil. 692 (1942), andPeople vs.
Dumpo,62 Phil. 246 (1935), affect Muslim marriages celebrated before the
effectivity of the Muslim Code? (4) What laws govern the property relationship of
Muslim multiple marriages celebrated before the Muslim Code? (5) What
law governs the succession to the estate of a Muslim who died after the Muslim
Code and the Family Code took effect? (6) What laws apply to the dissolution of
property regimes in the cases of multiple marriages entered into before the Muslim
Code but dissolved (by the husband’s death) after the effectivity of the Muslim
Code? and (7) Are Muslim divorces effected before the enactment of the Muslim
Code valid?
The succeeding guidelines, which derive mainly from the Compliance ofamicuscuriae Justice Puno, are hereby laid down by the Court for the reference of
respondent court, and for the direction of the bench and bar:First Collateral Issue: The Law(s) Governing Validity of Muslim Marriages Celebrated Before the Muslim Code
The time frame in which all eight marriages of Hadji Abdula were celebrated was
during the effectivity of the Civil Code which, accordingly, governs the marriages.
Article 78 of the Civil Code recognized the right of Muslims to contract marriage in
accordance with their customs and rites, by providing that ---
Marriages between Mohammedans or pagans who live in the non-Christian
provinces may be performed in accordance with their customs, rites or practices. No
marriage license or formal requisites shall be necessary. Nor shall the persons
solemnizing these marriages be obliged to comply with article 92.
However, thirty years after the approval of this Code, all marriages performed
between Muslims or other non-Christians shall be solemnized in accordance with the
provisions of this Code. But the President of the Philippines, upon recommendation
of the Commissioner of National Integration, may at any time before the expiration of
said period, by proclamation, make any of said provisions applicable to the Muslims
and non-Christian inhabitants of any of the non-Christian provinces.Notably, before the expiration of the thirty-year period after which Muslims are
enjoined to solemnize their marriages in accordance with the Civil Code, P.D. 1083
or the Muslim Code was passed into law. The enactment of the Muslim Code on
February 4, 1977 rendered nugatory the second paragraph of Article 78 of the Civil
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Code which provides that marriages between Muslims thirty years after the approval
of the Civil Code shall be solemnized in accordance with said Code.Second and Third Collateral Issues: The Validity of Muslim Multiple Marriages Celebrated Before the Muslim Code; The Effect of People vs.
Subanoand People vs. Dumpo
Prior to the enactment of P.D. 1083, there was no law in this jurisdiction whichsanctioned multiple marriages. It is also not to be disputed that the only law in force
governing marriage relations between Muslims and non-Muslims alike was the Civil
Code of 1950.
The Muslim Code, which is the first comprehensive codification of Muslim personal
laws, also provides in respect of acts that transpired prior to its enactment:
Art. 186.Effect of code on past acts. --- (1) Acts executed prior to the effectivity of
this Code shall be governed by the laws in force at the time of their execution, and
nothing herein except as otherwise specifically provided, shall affect their validity or
legality or operate to extinguish any right acquired or liability incurred thereby.
The foregoing provisions are consistent with the principle that all laws operate
prospectively, unless the contrary appears or is clearly, plainly and unequivocably
expressed or necessarily implied; accordingly, every case of doubt will be resolved
against the retroactive opertion of laws. Article 186 aforecited enunciates the general
rule of the Muslim Code to have its provisions applied prospectively, and implicitly
upholds the force and effect of a pre-existing body of law, specifically, the Civil Code
--- in respect of civil acts that took place before the Muslim Code’s enactment.
Admittedly, an apparent antagonism arises when we consider that what theprovisions of the Civil Code contemplate and nurture is a monogamous marriage.
“Bigamous or polygamous marriages” are considered void and inexistent from the
time of their performance. The Family Code which superseded the Civil Code
provisions on marriage emphasizes that a subsequent marriage celebrated before
the registration of the judgment declaring a prior marriage void shall likewise be
void. These provisions illustrate that the marital relation perceived by the Civil Code
is one that is monogamous, and that subsequent marriages entered into by a person
with others while the first one is subsisting is by no means countenanced.
Thus, when the validity of Muslim plural marriages celebrated before the enactment
of the Muslim Code was touched upon in two criminal cases, the Court applied the
perspective in the Civil Code that only one valid marriage can exist at any given
time.
InPeople vs. Subano,supra, the Court convicted the accused of homicide, not
parricide, since ---
(f)rom the testimony of Ebol Subano, father of the deceased, it appears that the
defendant has three wives and that the deceased was the last in point of time.
Although the practice of polygamy is approved by custom among these non-Christians, polygamy, however, is not sanctioned by the Marriage Law, which merely
recognizes tribal marriage rituals. The deceased, under our law, is not thus the
lawful wife of the defendant and this precludes conviction for the crime of parricide.
InPeople vs. Dumpo,supra, Mora Dumpo was prosecuted for bigamy when, legally
married to Moro Hassan, she allegedly contracted a second marriage with Moro
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Sabdapal. The Court acquitted her on the ground that it was not duly proved that
the alleged second marriage had all the essential requisites to make it valid were it
not for the subsistence of the first marriage. As it appears that the consent of the
bride’s father is an indispensable requisite to the validity of a Muslim marriage, and
as Mora Dumpo’s father categorically affirmed that he did not give his consent to herunion with Moro Sabdapal, the Court held that such union could not be a marriage
otherwise valid were it not for the existence of the first one, and resolved to acquit
her of the charge of bigamy.
The ruling inDumpo indicates that, had it been proven as a fact that the second
marriage contained all the essential requisites to make it valid, a conviction for
bigamy would have prospered.Fourth Collateral Issue: Law(s) Governing Property Relations of Muslim Marriages Celebrated Before the Muslim Code
This is the main issue presented by the instant petition. In keeping with our holding
that the validity of the marriages in the instant case is determined by the Civil Code,
we hold that it is the same Code that determines and governs the property relations
of the marriages in this case, for the reason that at the time of the celebration of the
marriages in question the Civil Code was the only law on marriage relations,
including property relations between spouses, whether Muslim or non-Muslim.
Inasmuch as the Family Code makes substantial amendments to the Civil Code
provisions on property relations, some of its provisions are also material, particularly
to property acquired from and after August 3, 1988.
Which law would govern depends upon: (1) when the marriages took place; (2)whether the parties lived together as husband and wife; and (3) when and how the
subject properties were acquired.
Following are the pertinent provisions of the Civil Code:
Art. 119. The future spouses may in the marriage settlements agree upon absolute
or relative community of property, or upon complete separation of property, or upon
any other regime. In the absence of marriage settlements, or when the same are
void, the system of relative community or conjugal partnership of gains as
established in this Code shall govern the property relations between husband and
wife.
Art. 135. All property brought by the wife to the marriage, as well as all property she
acquires during the marriage, in accordance with article 148, is paraphernal.
Art. 136. The wife retains the ownership of the paraphernal property.
Art. 142. By means of the conjugal partnership of gains the husband and wife place
in a common fund the fruits of their separate property and the income from their
work or industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage.Art. 143. All property of the conjugal partnership of gains is owned in common by
the husband and wife.
The Civil Code also provides in Article 144:
When a man and a woman live together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by either
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or both of them through their work or industry or their wages and salaries shall be
governed by the rules on co-ownership.
In a long line of cases, this Court has interpreted the co-ownership provided in
Article 144 of the Civil Code to require that the man and woman living together as
husband and wife without the benefit of marriage or under a void marriage must notin any way be incapacitated to marry. Situating these rulings to the instant case,
therefore, the co-ownership contemplated in Article 144 of the Civil Code cannot
apply to Hadji Abdula’s marriages celebrated subsequent to a valid and legally
existing marriage, since from the point of view of the Civil Code Hadji Abdula is not
capacitated to marry. However, the wives in such marriages are not precluded from
proving that property acquired during their cohabitation with Hadji Abdula is
theirexclusive property, respectively. Absent such proof, however, the presumption is
that property acquired during the subsistence of a valid marriage --- and in the Civil
Code, there can only be one validly existing marriage at any given time --- is
conjugal property of such subsisting marriage.
With the effectivity of the Family Code on August 3, 1988, the following provisions of
the said Code are pertinent:
Art. 147. When a man and a woman who are capacitated to marry each other live
exclusively with each other as husband and wife without the benefit of marriage or
under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry shall
be governed by the rules on co-ownership.In the absence of proof to the contrary, properties acquired while they lived together
shall be presumed to have been obtained by their joint efforts, work or industry, and
shall be owned by them in equal shares. For purposes of this Article, a party who
did not participate in the acquisition of the other party of any property shall be
deemed to have contributed jointly in the acquisition thereof if the former’s efforts
consisted in the care and maintenance of the family and of the household.
Neither party can encumber or dispose by actsinter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of
the other, until after the termination of the cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default or of waiver by any or all of the common children or their
descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation.
Art. 148. In cases of cohabitation not falling under the preceding Article, only theproperties acquired by both of the parties through their actual joint contribution of
money, property, or industry shall be owned by them in common in proportion to their
respective contributions. In the absence of proof to the contrary, their contributions
and corresponding shares are presumed to be equal. The same rule and
presumption shall apply to joint deposits of money and evidences of credit.
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If one of the parties is validly married to another, his or her share in the co-ownership
shall accrue to the absolute community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly married to another, his or
her share shall be forfeited in the manner provided in the last paragraph of the
preceding Article.The foregoing rules on forfeiture shall likewise apply even if both parties are in bad
faith.
It will be noted that while the Civil Code merely requires that the parties “live together
as husband and wife” the Family Code in Article 147 specifies that they
“liveexclusivelywith each other as husband and wife.” Also, in contrast to Article
144 of the Civil Code as interpreted by jurisprudence, Article 148 of the Family Code
allows for co-ownership in cases of cohabitation where, for instance, one party has a
pre-existing valid marriage, provided that the parties prove their “actual joint
contribution of money, property, or industry” and only to the extent of their
proportionate interest therein. The rulings in Juaniza vs. Jose, 89 SCRA
306, Camporodendo vs. Garcia, 102 Phil. 1055, and related cases are embodied in
the second paragraph of Article 148, which declares that the share of the party
validly married to another shall accrue to the property regime of such existing
marriage.Fifth and Sixth Collateral Issues: Law(s) on Succession and Dissolution of Property Regimes
Hadji Abdula died intestate on December 16, 1993. Thus, it is the Muslim Code
which should determine the identification of the heirs in theorder of intestate succession and the respective shares of the heirs.
Meanwhile, the status and capacity to succeed on the part of the individual parties
who entered into each and every marriage ceremony will depend upon the law in
forceat the time of the performance of the marriage rite.
The status and capacity to succeed of the children will depend upon the law in
forceat the time of conception or birthof the child. If the child was conceived or born
during the period covered by the governance of the Civil Code, the Civil Code
provisions on the determination of the legitimacy or illegitimacy of the child would
appear to be in point. Thus, the Civil Code provides:
Art. 255. Children born after one hundred and eighty days following the celebration
of the marriage, and before three hundred days following its dissolution or the
separation of the spouses shall be presumed to be legitimate.
Against this presumption no evidence shall be admitted other than that of the
physical impossibility of the husband’s having access to his wife within the first one
hundred and twenty days of the three hundred which preceded the birth of the child.
This physical impossibility may be caused:
(1) By the impotence of the husband;(2) By the fact that the husband and wife were living separately, in such a way that
access was not possible;
(3) By the serious illness of the husband.
Art. 256. The child shall be presumed legitimate, although the mother may have
declared against its legitimacy or may have been sentenced as an adulteress.
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If the child was conceived or born during the period covered by the governance of
the Muslim Code,i.e., from February 4, 1977 up to the death of Hadji Abdula on
December 18, 1993, the Muslim Code determines the legitimacy or illegitimacy of
the child. Under the Muslim Code:
Art. 58.Legitimacy, how established.--- Legitimacy of filiation is established by theevidence of valid marriage between the father and the mother at the time of the
conception of the child.
Art. 59.Legitimate children.---
(1) Children conceived in lawful wedlock shall be presumed to be legitimate.
Whoever claims illegitimacy of or impugns such filiation must prove his allegation.
(2) Children born after six months following the consummation of marriage or within
two years after the dissolution of the marriage shall be presumed to be legitimate.
Against this presumption no evidence shall be admitted other than that of physical
impossibility of access between the parents at or about the time of the conception of
the child.
Art. 60.Children of subsequent marriage.--- Should the marriage be dissolved and
the wife contracts another marriage after the expiration of her‘idda, the child born
within six months from the dissolution of the prior marriage shall be presumed to
have been conceived during the former marriage, and if born thereafter, during the
latter.
Art. 61.Pregnancy after dissolution.--- If, after the dissolution of marriage, the wife
believes that she is pregnant by her former husband, she shall, within thirty daysfrom the time she became aware of her pregnancy, notify the former husband or his
heirs of that fact. The husband or his heirs may ask the court to take measures to
prevent a simulation of birth.
Upon determination of status and capacity to succeed based on the foregoing
provisions, the provisions on legalsuccession in the Muslim Code will apply. Under
Article 110 of the said Code, the sharers to an inheritance include:
(a) The husband, the wife;
(b) The father, the mother, the grandfather, the grandmother;
(c) The daughter and the son’s daughter in the direct line;
(d) The full sister, the consanguine sister, the uterine sister and the uterine brother.
When the wife survives with a legitimate child or a child of the decedent’s son, she is
entitled to one-eighth of the hereditary estate; in the absence of such descendants,
she shall inherit one-fourth of the estate. The respective shares of the other sharers,
as set out in Article 110 abovecited, are provided for in Articles 113 to 122 of P.D.
1083.Seventh Collateral Issue: Muslim Divorces Before the Effectivity of the Muslim Code
R.A. 394 authorized absolute divorce among Muslims residing in non-Christianprovinces, in accordance with Muslim custom, for a period of 20 years from June 18,
1949 (the date of approval of R.A. 394) to June 13, 1969. Thus, a Muslim divorce
under R.A. 394 is valid if it took place from June 18, 1949 to June 13, 1969.
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From the seven collateral issues that we discussed, we identify four corollary issues
as to further situate the points of controversy in the instant case for the guidance of
the lower court. Thus:
1.Which of the several marriages was validly and legally existing at the time of the
opening of the succession of Hadji Abdula when he died in 1993? The validly andlegally existing marriage would be that marriage which was celebrated at a time
when there was no other subsisting marriage standing undissolved by a valid divorce
or by death. This is because all of the marriages were celebrated during the
governance of the Civil Code, under the rules of which only one marriage can exist
at any given time.
Whether or not the marriage was validly dissolved by a Muslim divorce depends
upon the time frame and the applicable law. A Muslim divorce under R.A. No. 394 is
valid if it took place from June 18, 1949 to June 13, 1969, and void if it took place
from June 14, 1969.
2.There being a dispute between the petitioner and the oppositors as regards the
heirship of the children begotten from different marriages, who among the surviving
children are legitimate and who are illegitimate? The children conceived and born of
a validly existing marriage as determined by the first corollary issue are legitimate.
The fact and time of conception or birth may be determined
by proof or presumption depending upon the time frame and the applicable law.
3.What properties constituted the estate of Hadji Abdula at the time of his death on
December 18, 1993? The estate of Hadji Abdula consists of the following:a. Properties acquired during the existence of a valid marriage as determined by the
first corollary issue are conjugal properties and should be liquidated and divided
between the spouses under the Muslim Code, this being the law in force at the time
of Hadji Abdula’s death.
b. Properties acquired under the conditions prescribed in Article 144 of the Civil
Code during the period August 30, 1950 to August 2, 1988 are conjugal properties
and should be liquidated and divided between the spouses under the Muslim Code.
However, the wives other than the lawful wife as determined under the first corollary
issue may submit their respective evidence to prove that any of such property is
theirs exclusively.
c. Properties acquired under the conditions set out in Articles 147 and 148 of the
Family Code during the period from and after August 3, 1988 are governed by the
rules on co-ownership.
d. Properties acquired under conditions not covered by the preceding paragraphs
and obtained from the exclusive efforts or assets of Hadji Abdula are his exclusive
properties.
4.Who are the legal heirs of Hadji Abdula, and what are their shares in intestacy? The following are Hadji Abdula’s legal heirs: (a) the lawful wife, as determined under
the first corollary issue, and (2) the children, as determined under the second
corollary issue. The Muslim Code, which was already in force at the time of Hadji
Abdula’s death, will govern the determination of their respective shares.
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As we have indicated early on, the evidence in this case is inadequate to resolve in
its entirety the main, collateral and corollary issues herein presented and a remand
to the lower court is in order. Accordingly, evidence should be received to supply the
following proofs: (1) the exact dates of the marriages performed in accordance with
Muslim rites or practices; (2) the exact dates of the dissolutions of the marriagesterminated by death or by divorce in accordance with Muslim rites and practices,
thus indicating which marriage resulted in a conjugal partnership under the criteria
prescribed by the first, second, and third collateral issues and the first corollary
issue; (3) the exact periods of actual cohabitation (“common life” under a “common
roof”) of each of the marriages during which time the parties lived together; (4) the
identification of specific properties acquired during each of the periods of
cohabitation referred to in paragraph 3 above, and the manner and source of
acquisition, indicating joint or individual effort, thus showing the asset as owned
separately, conjugally or in co-ownership; and (5) the identities of the children
(legitimate or illegitimate) begotten from the several unions, the dates of their
respective conceptions or births in relation to paragraphs 1 and 2 above, thereby
indicating their status as lawful heirs.
Amicus curiae Congressman Mastura agrees that since the marriage of petitioner to
decedent took place in 1972 the Civil Code is the law applicable on the issue of
marriage settlement, but espouses that customs or established practices among
Muslims in Mindanao must also be applied with the force of law to the instant
case.Congressman Mastura’s disquisition has proven extremely helpful inimpressing upon us the background in which Islamic law and the Muslim Code need
to be interpreted, particularly the interconnectedness of law and religion for
Muslims and the impracticability of a strict application of the Civil Code to plural
marriages recognized under Muslim law. Regrettably, the Court is duty-bound to
resolve the instant case applying such laws and rights as are in existence at the time
the pertinent civil acts took place. Corollarily, we are unable to supplant governing
law with customs, albeit how widely observed. In the same manner, we cannot
supply a perceived hiatus in P.D. 1083 concerning the distribution of property
between divorced spouses upon one of the spouses’ death.$/
WHEREFORE, the decision dated September 26, 1994 of the Fifth Shari’a District
Court of Cotabato City in Special Proceeding No. 94-40 is SET ASIDE, and the
instant petition is REMANDED for the reception of additional evidence and the
resolution of the issues of the case based on the guidelines set out in this Decision.
SO ORDERED.
recto lawEN BANC
G.R. No. L-25951 June 30, 1969
FILIPINAS INVESTMENT & FINANCE CORPORATION, plaintiff-appellant,
vs.
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JULIAN R. VITUG, JR. and SUPREME SALES & DEVELOPMENT
CORPORATION, defendants-appellees.
Wilhelmina V. Joven for plaintiff-appellant.
Antonio V. Borromeo for defendants-appellants.
BARREDO,J.:
Appeal from an order of dismissal by the Court of First Instance of Manila, in its Civil
Case No. 60915, entitled Filipinas Investment & Finance Corporation vs. Julian R.
Vitug, Jr. and Supreme Sales & Development Corporation, of the amended
complaint of July 16, 1965 of plaintiff-appellant Filipinas Investment & Finance
Corporation whereby it sought to recover from defendant-appellee Supreme Sales &
Development Corporation the deficiency that resulted after it had foreclosed the
chattel mortgage on and sold at public auction, the car of the other defendant, Julian
Vitug, Jr. who had failed to pay to appellee installments due on the promissory note
representing the purchase price of said car which he had bought from the same,
appellant being the assignee of appellee of its rights in the said promissory note.
The material allegations in appellant's amended complaint are:
The defendant, Julian R. Vitug, executed and delivered to appellee a promissory
note in the amount of P14,605.00 payable in monthly installments according to a
schedule of payments; the payment of the aforesaid amount which was the purchase
price of a motor vehicle, a 4-door Consul sedan, bought by said defendant from
appellee, was secured by a chattel mortgage over such automobile; on the same
day, appellee negotiated the above-mentioned promissory note in favor of appellant
Filipinas Investment & Finance Corporation, assigning thereto all its rights, title and
interests to the same,the assignment including the right of recourse against
appellee; defendant Vitug defaulted in the payment of part of the installment whichfell due on January 6, 1965, as well as the subsequent three consecutive monthly
installments which he was supposed to have paid on February 6, March 6 and April
6, 1965; there being a provision in the aforesaid promissory note and chattel
mortgage that failure to pay the installments due would result in the entire obligation
becoming due and demandable, appellant demanded from appellee the payment of
such outstanding balance; in turn, appellee "authorized (appellant) to take such
action as may be necessary to enable (it) to take possession of the ... motor
vehicle." Pursuant to such authority, appellant secured possession of the mortgaged
vehicle by means of a writ of replevin duly obtained from the court, preparatory to
the foreclosure of the mortgage, but said writ became unnecessary because upon
learning of the same, defendant Vitug voluntarily surrendered the car to appellant;
thereafter, the said car was sold at public auction, but the proceeds still left a
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deficiency of P8,349.35, plus interest of 12% per annum from April 21, 1965; and
appellant, the above foreclosure and sale notwithstanding, would hold appellee liable
for the payment of such outstanding balance, plus attorney's fees and costs.
On August 4, 1965, appellee filed an urgent motion to dismiss on the ground, inter
alia, that under Article 1484 of the Civil Code of the Philippines, which particular
provision is otherwise known as the Recto Law, appellant has no cause of action
against appellee. Said provision is as follows:
ART. 1484. In a contract of sale of personal property the price of which is
payable in installments, the vendor may exercise any of the following
remedies: (1) Exact fulfillment of the obligation should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more
installments; (3) Foreclose the chattel mortgage on the thing sold, if one has
been constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to the
contrary shall be void.
In its order of August 30, 1965, subject of this appeal, the lower court found the
aforesaid ground to be meritorious and, as already stated, the amended complaint
was dismissed as to appellee Supreme Sales & Development Corporation.
According to the order of dismissal:
It is undisputed in the instant case that the amount of P14,605.00 mentioned
as consideration in both the promissory note and the chattel mortgage in the
instant case represents the selling price of one (1) automobile New Ford
Consul 315 4-door Sedan, payable in the installments mentioned in said
documents. Under pars. 5 and 9 of the amended complaint, the writ of
replevin was obtained in the instant case for purposes of foreclosure of
mortgage. In applying for a writ of replevin, the plaintiff thereby made his
choice, namely, to foreclose the mortgage covering said automobile; and
having accepted said automobile from defendant Julian R. Vitug, Jr., what
remains is for the plaintiff to sell said automobile through either a judicial or an
extrajudicial foreclosure of said mortgage, without benefit of a deficiency
judgment or deficiency collection ... should the proceeds of the foreclosuresale be less than the balance of the installment sale price of said automobile
due and collectible.
On September 23, 1965, appellant filed a motion for reconsideration but this was
denied on October 26, 1965, hence, this appeal.
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The principal error assigned by appellant has reference to the applicability of Art.
1484 of the Civil Code, as amended, to the facts of this case. Appellant maintains
that: .
II
THE TRIAL COURT ERRED IN HOLDING THAT ARTICLE 1484 OF THE
CIVIL CODE OF THE PHILIPPINES IS APPLICABLE TO THE
TRANSACTION BETWEEN PLAINTIFF-APPELLANT AND DEFENDANT-
APPELLEE.
Under the facts alleged in the amended complaint which are deemed admitted by
the motion to dismiss,1this assignment of error must be sustained.
The specific allegations in the amended complaint which have material bearing on
the issue herein are:
4. On November 4, 1964, defendant Supreme Sales & Development
Corporation, with notice to defendant Julian R. Vitug, Jr. negotiated in favor of
(endorsed and delivered to) plaintiff the above-mentioned promissory note,
Annex "A", on a with recourse basis whereby in case of the failure and/or
refusal of the maker thereof, defendant Julian R. Vitug, Jr. to pay the
obligation under the said promissory note, plaintiff shall have the right to
recourse against the said defendant corporation.
On the same date, the said defendant corporation, with notice to
defendant Julian R. Vitug, Jr., assigned to plaintiff its rights, title, and interests
to the aforesaid promissory note and chattel mortgage, Annexes "A" and "B"
hereof, as shown by the Deed of Assignment executed by defendant Supreme
Sales & Development Corporation in favor of plaintiff, a copy of which is
hereto attached as Annex "C" and made an integral part hereof,which
assignment is also subject to the right of recourse above-mentioned.
13.The defendant corporation is liable to plaintiff for the entire balance of the
obligation covered by the promissory note, Annex "A", and secured by the
chattel mortgage, Annex "B", as a general endorser of the promissory note,
Annex "A", and assignor of the chattel mortgage on a with- recourse basis.
But should plaintiff be able to sell the above-described motor vehicle, then the
said defendant corporation is liable to the plaintiff for the payment of the
balance of the obligation after applying thereto the proceeds of the sale of the
said vehicle. (Record on Appeal, pp. 12 and 15.)
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Thus it can be seen that the assignment made by appellee to appellant of the
promissory note and mortgage of defendant Vitug was on a with-recourse basis. In
other words, there was a definite and clear agreement between appellant and
appellee that should appellant fail to secure full recovery from defendant Vitug, the
right was reserved to appellant to seek recourse for the deficiency against appellee.
Accordingly, the question for resolution by the Court now is whether or not this
provision regarding recourse contained in the agreement between appellant and
appellee violates the Recto Law which declares null and void any agreement in
contravention thereof. We do not believe that it does.
As pointed out in appellant's brief, the transaction between appellant and appellee
was purely an ordinary discounting transaction whereby the promissory note
executed by defendant Vitug was negotiated by appellee in favor of appellant for a
valuable consideration at a certain discount, accompanied by an assignment also of
the chattel mortgage executed by said defendant to secure the payment of his
promissory note and with the express stipulation that should there be any deficiency,
recourse could be had against appellee. Stated otherwise, the remedy presently
being sought is not against the buyer of the car or the defendant Vitug but against
the seller, independent of whether or not such seller may have a right of recovery
against the buyer, which, in this case, he does not have under the Recto Law. It is
clear to Us, on the other hand, that under said law, what Congress seeks to protect
are only the buyers on installment who more often than not have been victimized by
sellers who, before the enactment of this law, succeeded in unjustly enriching
themselves at the expense of the buyers because aside from recovering the goods
sold, upon default of the buyer in the payment of two installments, still retained for
themselves all amounts already paid, in addition, furthermore, to other damages,
such as attorney's fees, and costs. Surely, Congress could not have intended toimpair and much less do away with the right of the seller to make commercial use of
his credit against the buyer, provided said buyer is not burdened beyond what this
law allows.1awphil.nêt
We are not unmindful that in the case of Cruz, et al. vs. the same Filipinas
Investment & Finance Corporation, L-24772, May 27, 1968, 23 SCRA 791, this Court
broadened the scope of the Recto Law beyond its letter and held that within its spirit,
a seller of goods on installment does not have any right of action against a thirdparty who, in addition to the buyer's mortgage of the goods sold, furnishes additional
security for the payment of said installments or the purchase price of said goods. In
that case, it was held:.
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Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Sanchez, Castro, Capistrano
and Teehankee, JJ., concur.
Dizon and Fernando, JJ., took no part.
Footnotes
1Evidence seems to have been presented by appellee and admitted by the
trial court in connection with the motion to dismiss. While it is obvious that
said evidence is relevant, the same cannot be taken into account, since the
motion to dismiss is based on the ground that the amended complaint states
no cause of action and, therefore, all material facts alleged in the complaint
must be deemed admitted for purposes of said motion.
hidden defects
FIRST DIVISION
[ G.R. No. L-30965, November 29, 1983 ]
G.A. MACHINERIES, INC., PETITIONER, VS. HORACIO
YAPTINCHAY, DOING BUSINESS UNDER THE NAME AND
STYLE "HI-WAY EXPRESS" AND THE COURT OF APPEALS,
RESPONDENTS.
D E C I S I O N
GUTIERREZ, JR., J.:
Petitioner G. A. Machineries, Inc. (hereinafter referred to as GAMI) seeks the
reversal of the decision of the Court of First Instance of Rizal, affirmed by the Court
of Appeals in the original case entitled Horacio Yaptinchay , doing business under the
name and style "Hi-way Express", v. G. A. Machineries Inc. for recovery of damages.
The antecedent facts of the case are not seriously disputed and are summarized bythe Court of Appeals as follows:
"Sometime early in January, 1962 appellant GAMI, thru a duly authorized agent,
offered to sell a brand-new Fordson Diesel Engine to appellee Horacio Yaptinchay,
owner of the freight hauling business styled 'Hi-Way Express'. Relying on the
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representations of appellant's representative that the engine offered for sale was
brand-new, appellee agreed to purchase the same at the price of
P7,590.00. Pursuant to the contract of sale thus entered into, appellant delivered
to appellee, on January 27, 1962, one (1) FordsonDiesel Engine assembly, Model 6-
D, with Engine Serial No. A-212193, at 1500 RPM, with fly wheel, fly wheel housing,
fuel injection assembly, exhauster, fuel filter, oil filter, fuel lift pump, plus conversion
kit for F-500, subject to the standard warranties, particularly the representation,
relied upon by appellee, that the same was brand-new. Said engine was installed by
appellant in Unit No. 6 of the Hi-Way Express.
"Within the week after its delivery, however, the engine in question started to have a
series of malfunctions which necessitated successive trips to appellant's repair
shop. Thus, it first sprang an oil leak such that, on February 6, 1962, it was brought
in to '1. Adjust idling of engine and tappete clearance; 2. Inspect and remedy oil
leaks of engine; 3. Replace clutch disc and pressure plate w/original; and
4. Replace release bearing hub trunion bolt' (Exhibit C). Thereafter, the
malfunctioning persisted and, on inspection, appellee's mechanic noticed a worn out
screw which made appellee suspicious about the age of the engine. This
prompted appellee, thru his lawyer, to write appellant a letter, dated February 10,
1962, protesting that the engine was not brand-new as represented (Exhibit
E). Because of the recurringdefects, the engine was again submitted to appellant's
shop to '1. Inspect engine oil leaks on cylinder head; 2. Check up propeller shaft
(vibrating at high speed); and 3. Tighten bolts of pump.' (Exhibit F). All these
notwithstanding, the engine could still not be returned into operation because it
continued not to function well. In fact, it was sent back to appellant's shop on the
same day it was delivered after the last repair work done on it. Another check up
was thereafter required to be made on March 5, 1962 (Exhibit G). Then, again,on March 10, 1962, the engine was back at the repair shop to '1. Inspect leaks on
No. 1 & 5 high pressure pipe; and 2. Change engine oil with flushing & oil element'
(Exhibit H). Still, the oil leaks remained unchecked and, on July 2, 1962, one last
effort to '1. Remedy engine oil leaks' (Exhibit 1) was made, but all to no avail
because, instead of improving, the engine's condition became worse as
itdeveloped engine knock and appellee had to stop its operation altogether
due to its unserviceability.
"These repeatedly recurring defects and continued failure of appellant to put the
engine in good operating condition only served to firm up in appellee's mind the
suspicion that the engine sold to him was not brand-new as represented. He then
sought the assistance of the PC Criminal Investigation Service to check on the
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authenticity of the serial number of the engine, with due notice to
appellant. Scientific examination and verification tests revealed that
the original motor number of the engine aforesaid was
tampered. Further inquiries by appellee from the Manila Trading Company, which
also handles theimportation and distribution of similar engines, also disclosed that,
unlike the engine delivered to appelleewhose engine body and injection pump were
painted with two different colors, brand-new engines are painted with only one color
all over.
"Thus convinced that a fraudulent misrepresentation as to the character of the
engine had been perpetrated upon him, appellee made demands from appellant for
indemnification for damages and eventually instituted the present suit.
"In its defense, appellant interposed prescription of the action, denied the imputation
of misrepresentation, and disputed the propriety and amount of damages claimed."
x x x
After trial on the merits, the trial court ruled in favor of plaintiff Yaptinchay as follows:
"FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders
judgment ordering the defendant, G.A. Machineries Inc., to pay the
plaintiff, Horacio Yaptinchay, actual damages sustained in the sum of P54,000.48; to
reimburse the purchase price of the Fordson diesel engine in the amount of
P7,590.00; and to pay attorney's fees to plaintiff's counsel on the sum of P2,000.00
and costs.
"Plaintiff is, likewise, ordered to return the Fordson diesel engine with serial number
A-21219 to the defendant."
Defendant GAMI appealed the decision to the Court of Appeals. As stated earlier,
the decision was affirmed by the Appellate Court. A motion for reconsideration was
denied. Hence, the instant petition.
Petitioner GAMI raises the following alleged errors of judgment of the respondent
court:
I
THE COURT OF APPEALS ERRED IN NOT APPLYING THE PRESCRIPTIVE
PERIOD OF ARTICLE 1571 OF THE CIVIL CODE TO THE CASE AT BAR.
II
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THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE IN THE CASE
OF ASOCIACION ZANJERA CASILIAN vs. CRUZ, 46 O.G. 4813, 4820
REGARDING ADMISSION BY FAILURE TO REBUT, TO THE ISSUE OF ACTUAL
DAMAGES, WHICH MUST BE PROVED BY THE BEST AND COMPETENT
EVIDENCE.
III
THE COURT OF APPEALS ERRED IN AWARDING ACTUAL DAMAGES IN THE
FORM OF UNREALIZED PROFITS (LUCRUM CESSANTE) WHEN THE ISSUE
RAISED BY THE PLEADINGS REFERS ONLY TO ALLEGED ACTUAL DAMAGES
IN THE FORM OF DAMNUM EMERGENTE.
IV
THE COURT OF APPEALS ERRED IN FINDING THAT THE FORDSON DIESEL
ENGINE DELIVERED BY PETITIONER TO RESPONDENT HORACIO
YAPTINCHAY WAS NOT BRAND NEW, REACHING SUCH FINDING BY WAY OF A
MANIFESTLY MISTAKEN INFERENCE AND ON THE BASIS
OF AMISAPPREHENSION OF FACTS AND SOLELY ON THE GROUND OF
SPECULATION, SURMISES ANDCONJECTURES.
The assignments of errors raise the following issues: 1) whether or not the
respondent's cause of action against the petitioner had already prescribed at the
time the complaint was filed in the trial court; 2) whether or not the factual findings of
both the trial and appellate courts as regards the subject Fordson diesel engine are
supported by evidence and 3) whether or not the award of damages was justified
considering evidence on record.
The first issue is premised on the petitioner's proposition that the respondent's cause
of action was for breach ofwarranty against hidden defects as provided under
Articles 1561 and 1566 of the Civil Code. Article 1571 of the Civil Code provides for
a six-month prescriptive period from the delivery of the thing sold for the filing of an
action for breach of warranty against hidden defects. According to
petitioner GAMI when respondent Yaptinchay filed the case with the trial court, more
than six months had already lapsed from the time the alleged defective engine was
delivered and, therefore, the action had prescribed.
The petitioner contends that Yaptinchay's asserted cause of action was premised
and anchored on the delivery by the defendant of a DEFECTIVE ENGINE and that
the allegations in the complaint that the engine was not brand new are clearly mere
specifications of the precise nature of the hidden defects.
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A cursory reading of the complaint shows that the petitioner's arguments are not
well-taken.
The main thrust of the complaint is the contention that the Fordson diesel engine
delivered by the petitioner to the respondent was not brand-new contrary to the
representations of the former and the expectations of the latter. The complaint was
couched in a manner which shows that instead of the brand-new Fordson diesel
engine which was bought by the respondent from the petitioner, another engine
which was not brand new was delivered resulting in the damages sought to be
recovered. It is evident therefore, that the complaint was for a breach of a contract
of sale rather than a breach of warranty against hidden defects. This is so because
an action for breach of warranty againsthidden defects presupposes that the thing
sold is the same thing delivered but with hidden defects. Consequently, the six-
month prescriptive period under Article 1571 of the Civil Code is not applicable.
The petitioner takes exception to the factual findings of the appellate court and
argues: 1) the fact that the Fordsondiesel engine developed oil leaks does not
necessarily imply that the said engine was not brand new and 2) the testimony of
laboratory technician Captain Garcia of the Philippine Constabulary to the effect that
the motor or serial number of the engine was tampered does not deserve credence.
The first argument is premised on the proposition that even brand-new engines in
many cases develop oil leaks. To support this proposition the petitioner presented
documentary evidence (Exhibits "5", "7", "8", "9", "10", "11", "12", "13", "14",
"15", "16", and "17") consisting of job orders for allegedly brand new engines which
developed oil leaks.
An examination of the documentary evidence shows that the job orders were for
twelve (12) different engines. Moreover, the petitioner's witness who testified on the
said job orders admitted that some engines were repaired only after a few
months. On the other hand, the subject Fordson diesel engine was repaired on the
complaint not only of oil leaks but also replacement of clutch disc and pressure
plate, replacement of release bearing hub trunion belt, and other defects within a
week after it was delivered to the respondents or on February 6, 1962 (Exhibit
"C"). Thereafter it was returned for more repairs on February 28, 1962 (Exhibit "F"),
on March 10, 1962 (Exhibit "H") and on July 2, 1962 (Exhibit "I"). The documentaryevidence of the petitioner consisting of the job orders of the supposed brand-new
engines which also developed oil leaks is no reason to doubt the trial court's and
appellate court's factual findings. Infact, the documentary evidence and the
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admissions of the petitioner's witness enhance the respondent's allegation that
the Fordson diesel engine sold to him was not brand-new.
The second argument questions Captain Garcia's findings that the original motor
number of the engine was tamperedas shown by the presence of fragmentary
numbers which appeared in the engine when he conducted a macro-etching test
thereon by applying acid on the surface of said engine. The petitioner
emphasizes Captain Garcia's alleged testimony that "x x x what he calls fragmentary
numeral" is not definitely a numeral or a fragment of a numeral and states that
the same could have been caused by any molecular pressure applied to the area of
the metal where it appeared. In effect, the petitioner insists that the supposed
fragmentary numerals could have been merely scratchesor indentations near the
serial number of the motor which might have been caused by sparks from
the welding process.
The arguments are not well-taken. First, the statements attributed to Captain Garcia
are not accurate. An examination of the record shows that Captain Garcia positively
stated the fragmentary numeral to be a numeral or anumber but in the absence of
key portions he could not positively identify the exact number or numeral. He
discounted the possibility that such fragmentary numerals could be mere
scratches. Second, the witness did not categorically state that any molecular
pressure could have caused the fragmentary numeral. Hence, Captain Garcia under
cross-examination stated:
"Q. This fragmentary numeral could be caused deliberately by tampering with the
engine number or by other factor such as scratches or burning by other foreign
element, is that right?
"A No, sir, they can be caused by scraping but not by scratching, because by
scraping there is molecular disturbance of metal.
"Q When you say molecular disturbance does it mean you first apply in the area, or
would it disturb the molecule in or around that area?
"A Once you stamped the number, you impressed it and there is molecular
disturbance in the structure of the metal.
"Q If the metal is burned, there is also molecular disturbance in the metal, is that
correct?
"A The metal will only expand.
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"Q There is no spark of the machine could not cause the molecular disturbance in
the steam, is that right?
"A It cannot"
(T.S.N., Iluminado C. Palisoc, February 5, 1965, pp. 99-100)
The petitioner's argument that the Court of Appeals findings are based on manifestly
mistaken inferences, misapprehension of facts, and purely on speculation, surmises,
and conjectures is without merit.
The Fordson diesel engine delivered to the respondent was not brand-new.
We agree with the Court of Appeals that:
"Indeed, it would be too much to say that the successive malfunctions of the engine,
the defects and other discrepancies therein that cropped up so soon after its
delivery, the numerous trips it had to appellant's repair shop the demonstrable
tampering with its serial number, and its ultimate breakdown despite appellant's
attempts to put it into good working order could be attributed to mere coincidence. If
all these mean anything at all, it can only be that the engine aforesaid was not really
brand new.
The petitioner committed a breach of contract against the respondent. The
misrepresentation of the quality of the subject Fordson diesel engine is tantamount
to fraud or bad faith. The return of the P7,590.00 purchase price with legal interest
from the date of purchase and computed pursuant to our ruling in Viloria v. Court of
Appeals (G.R. No. 63398, June 29, 1983) is justified. The next question refers to the
award of actual damages in the amount of P54,000.48. This amount covers the
probable income which the respondent failed to realize because of the breach of
contract. Is the award of damages in the form of lucro cessante justified?
The law on the matter is spelled out in Raagas v. Traya (22 SCRA 839), where we
stated:
"x x x In Abubakar Tan v. Tian Ho, L-18820, December 29, 1962
and Lim Giok v. Bataan Cigar and Cigarette Factory, L-15861, April 16, 1960, we
held that even if the allegations regarding the amount of damages in the complaint
are not specifically denied in the answer, such damages are not deemed
admitted. In Tomassi v. Villa- Abrille, L-7047, August 21,
1958, Suntay Tanjangco v. Jovellanos , et al., L-12332, June 30,1960, and Delfin v.
Court of Agrarian Relations, et al., L-23348, March 14, 1967, 1967 A PHILD 453, we
declared in no uncertain terms that actual damages must be proved, and that a court
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cannot rely on 'speculation, conjecture or guesswork' as to the fact and amount of
damages, but must depend on actual proof that damages had been suffered and on
evidence of the actual amount.x x x"
The fact that the defendant does not dispute the amount of this kind of damages
does not necessarily imply that the other party outright is entitled to the award of
damages.
Article 2200 of the Civil Code entitles the respondent to recover as
compensatory damages not only the value of the loss suffered but also prospective
profits while Article 2201 entitles the respondent to recover all damages which may
be attributed to the non-performance of the obligation. However, in order to recover
this kind of damages, the plaintiff must prove his case -
" 'When the existence of a loss is established, absolute certainty as to its amount is
not required. The benefit to be derived from a contract which one of the parties has
absolutely failed to perform is of necessity to some extent, a matter of speculation,
but the injured party is not to be denied all remedy for that reason alone. He must
produce the best evidence of which his case is susceptible and if that evidence
warrants the inference that he has been damaged by the loss of profits which he
might with reasonable certainty have anticipated but for the defendant's wrongful act,
he is entitled to recover." (Cerreno v. Tan Chuco, 28 Phil. 312 quoted in Central Bank
of the Philippines v. Court of Appeals, 63 SCRA 431, 457).
Applying the foregoing test to the instant case, we find the evidence of the
respondent insufficient to be considered within the purview of "best evidence". The
bare assertion of the respondent that he lost about P54,000.00 and the
accompanying documentary evidence presented to prove the amount lost are
inadequate if not speculative. The document itself merely shows that everytime a
truck travels, Mr. Yaptinchay earns P369.88. This amount is then multiplied by the
number of trips which the truck was allegedly unable to make. The estimates were
prepared by a certain Dionisio M. Macasieb whose identity was not even revealed by
the respondent. Mr. Yaptinchay was in the freight truck business. He had several
freight trucks among them the truck with the subject Fordson diesel engine, covering
the route from Manila to Baguio. To prove actual damages, it would have been easy
to present the averageactual profits realized by the other freight trucks plying theManila-Baguio route. With the presentation of such actual income the court could
have arrived with reasonable certainty at the amount of actual damages suffered by
the respondent. We rule that the award of actual damages in the amount of
P54,000.08 is not warranted by the evidence on record.
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WHEREFORE, the decision appealed from is hereby modified. The award of actual
damages in the amount of P54,000.48 is deleted. The petitioner shall also
pay six (6%) percent interest per annum on the P7,590.00 purchase price
from January 27, 1962 to July 29, 1974 and twelve (12%) percent
interest per annum from July 30, 1974 until the purchase
price is reimbursed. In all other respects, the appealed decision is affirmed.
SO ORDERED.
hidden defects
SECOND DIVISION
[ G.R. No. 173575, February 02, 2011 ]
IMMACULATE CONCEPTION ACADEMY AND THE LATE DR. PAULO
C. CAMPOS SUBSTITUTED BY HIS HEIRS, DR. JOSE PAULO
E. CAMPOS, ATTY. PAULO E. CAMPOS, JR. AND DR. ENRIQUE
E. CAMPOS,[1] PETITIONERS, VS. AMA COMPUTER COLLEGE,
INCORPORATED, RESPONDENT.
DECISION
ABAD, J.:
This case is about the rescission of a lease contract on the ground that the building
turned out to be structurally unsafe even as the lessee had previously inspected the
same.
The Facts and the Case
Immaculate Conception Academy (ICA) owned a three-storey building in
Dasmariñas, Cavite. The property caught the eye of AMA Computer College, Inc.
(AMA) and it sought to buy the same but did not succeed. Subsequently, after
inspecting the building, AMA settled on leasing it.[2] The parties signed a contract of
lease for 10 years from September 22, 1997 to September 21, 2007. The agreed
rent was P561,000.00 plus VAT per month. In accordance with the contract, AMA
paid ICA P500,000.00 in earnest money, three months advance rentals, and security
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deposit.
After the signing of the contract, officials of AMA re-inspected the building and began
renovating it for the upcoming school year. But during an inspection, AMA's Chief
Operating Officer for its Cavite Campus noted several cracks on the floor and walls
of the building's second storey. This prompted more inspections. Eventually, AMA
applied with the municipal engineer's office for an occupancy permit.[3] After
inspection, Municipal Engineer Gregorio C. Bermejo wrote AMA a letter dated
September 29, 1997, detailing his findings and conclusion, thus:
x x x x
[The] inspection reveals the following defects in the building, such as:
1. Multiple cracks in the second floor slabs showing signs of insufficient or
improper reinforcements.
2. Deflections in the second floor slabs and bears ranging from 20 mm to 50
mm which are beyond normal and allowable.
3. Unusual vibrations in the second floor level which are apparent when
subjected to live loadings.
Based from the above observations we are in doubt as to the structural
soundness and stability of that three-storey building. Whether it can
withstand against any natural calamity is presently under question. We are
convinced that the building is structurally unsafe for human occupancy.[4]
On the same date, September 29, 1997, AMA wrote ICA demanding the return of all
that it paid within 24 hours from notice. AMA cited the building's structural deficiency,
which it regarded as a violation of ICA's implied warranty againsthidden defects.
AMA did not pursue the lease contract and instead leased another property from a
different party.
When its request for reimbursement remained unheeded, AMA filed an action[5] for
breach of contract and damages with prayer for the issuance of a writ of preliminary
attachment against ICA before the Regional Trial Court (RTC) of Dasmariñas,
Cavite. In its complaint, AMA alleged that ICA (represented by the late Dr. Paulo C.
Campos) fraudulently entered into the lease agreement, fraudulently breached the
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same, and violated its implied warranty against hiddendefects; that despite
knowledge of the instability of the building, ICA insisted on offering it to AMA; and
that ICA had been unable to produce the building's certificate of occupancy. AMA
prayed for restitution of the amounts it paid to ICA with interest and award of
exemplary damages and attorney's fees.
In its Answer, ICA denied that AMA asked for the building's certificate of occupancy.
ICA alleged that it was AMA's responsibility to secure the certificate from the
municipal government as stipulated in the contract. Further, ICA claims that it never
misrepresented the condition of the building and that AMA inspected it before
entering into the contract of lease.
In its Decision dated April 8, 2003, the RTC took AMA's side and ruled that the latter
entered into the lease contract without knowing the actual condition of the building.
The RTC held that ICA failed to disclose the building's condition, thus justifying
AMA's rescission of the contract. The RTC ordered ICA to return the P4,072,150.00
it got from AMA, representing five months security deposit and three months
advance rentals plus interest of 6% per annum, from January 19, 1998 until full
payment and, further, to pay AMA P300,000.00 and P200,000.00 as exemplarydamages and attorney's fees, respectively.[6]
On appeal,[7] the Court of Appeals (CA) rendered a Decision dated February 27,
2006, holding that ICA did not violate its implied warranty against hidden defects,
misrepresent the building's condition, or act in bad faith since AMA inspected the
building before it entered into the lease agreement. It should have noticed the
patent cracks on the second floor. Still, the CA ruled that AMA was justified in
rescinding the lease contract considering ICA's default in repairing the defects in the
building's structure. The CA held that AMA's demand for the certificate of
occupancy amounted to a demand for repairs. Thus, the CA affirmed the decision of
the RTC but deleted the grant of exemplary damages and attorney's fees. ICA now
turns to this Court for succor.
The Issues Presented
The issues presented in this case are:
1. Whether or not AMA was justified in rescinding the contract of lease either on
account of ICA's fraudulent representation regarding the condition of its building or
on account of its failure to make repairs on the same upon demand; and
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2. Whether or not ICA and Dr. Campos are entitled to their claims for
damages against AMA.
The Court's Rulings
One. The Court is not convinced that AMA was justified in rescinding the contract of
lease on account of ICA's alleged fraudulent representation regarding the true
condition of its building. The fact is that AMA's representatives inspected the building
to determine if it was suitable for their school's needs. The cracks on the floor and
on the walls were too obvious to suggest to them that something was amiss. It was
their fault that they did not check the significance of such signs. ICA for its part wascandid about the condition of the building and did not in fact deny AMA access to it.
Apparently, AMA did not, at the beginning, believe that the cracks on the floor and on
the walls were of a serious nature. It realized that such cracks were manifestations
of structural defects only when it sought the issuance of a municipal occupancy
permit. The local building official inspected the cracks and concluded that they
compromised the building's structural safety.
The CA ruled that, upon the discovery of the building's structural defects, AMA had
the right to seek their repair by ICA on the strength of the following stipulations in
their contract:[8]
x x x x
LESSEE shall comply with any and all laws, ordinances, regulations or orders
of national or local governments concerned arising from the occupation
and/or sanitation of the leased PROPERTY.
x x x x
8. REPAIRS - LESSEE hereby agrees that all minor repairs or those caused by
the use of the leased PROPERTY or use due to any ordinary wear and tear
shall be for the account of the LESSEE while the major repairs or thoseaffecting the structural condition of the building and those due to fortuitous
events shall be for the account of the LESSOR. (Underscoring supplied)
The CA ruled that AMA's demand for ICA to produce a certificate of occupancy
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covering the building from the local building official amounted to a demand for ICA to
undertake a repair of its structural defects.
But this ruling reads from AMA's letter a demand for repair that was not there. AMA
simply asked ICA to produce a certificate of occupancy for the building even when
the contract placed on AMA the responsibility for complying with the government's
occupancy requirement. Indeed, it was AMA that applied for the certificate of
occupancy.[9] A demand to repair the defects in the building's structure, a clearly
difficult and costly proposition, cannot be so easily implied from AMA's demand that
ICA produce such certificate.
True, the quoted provision of the lease contract requires ICA to undertake major
repairs "affecting the structural condition of the building and those due to fortuitous
events." But AMA's outright rescission of the lease contract and demand that ICA
return the deposit and advance rentals it got within 24 hours from such demand
precluded ICA, first, from contesting the findings of the local building official or
getting some structural specialists to verify such findings or,second, from making the
required repair. Clearly, AMA's hasty rescission of the contract gave ICA no chance
to exercise its options.
AMA belatedly invokes Article 1660 of the Civil Code which reads:
Art. 1660. If a dwelling place or any other building intended for human
habitation is in such a condition that its use brings imminent and serious
danger to life or health, the lessee may terminate the lease at once by
notifying the lessor, even if at the time the contract was perfected the former
knew of the dangerous condition or waived the right to rescind the lease onaccount of this condition.
AMA is actually changing its theory of the case. It claimed in its complaint that it
was entitled to rescind the contract of lease because ICA fraudulently hid from it the
structural defects of its building. The CA did not agree with this theory but held that
AMA was nonetheless entitled to rescind the contract for failure of ICA to make the
repairs mentioned in the contract. Now, AMA claims that it has a statutory right to
rescind the lease contract on the ground mentioned in Article 1660, even if it may be
deemed to have initially waived such right.
Article 1660 is evidently intended to protect human lives. If ICA's building was
structurally defective and in danger of crashing down during an earthquake or after it
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is made to bear the load of a crowd of students, AMA had no right to waive
those defects. It can rescind the lease contract under Article 1660. But this
assumes that the defects were irremediable and that the parties had no agreement
for rectifying them. As pointed out above, the lease contract implicitly gave ICA the
option to repair structural defects at its expense. If that had been done as the
contract provides, the risk to human lives would have been removed and the right to
rescind, rendered irrelevant.
In any event, the fact is that the local building official found ICA's building structurally
defective and unsafe. Such finding is presumably true.[10] For this reason, ICA has
no justification for keeping AMA's deposit and advance rentals. Still, the Court holds
that AMA is not entitled to recover more than the return of its deposit and advance
rental considering that, contrary to AMA's claim, ICA acted in good faith and did not
mislead it about the condition of the building.
Two. Aside from seeking the dismissal of the complaint, ICA and Dr. Campos
separately seek moral and exemplary damages in the amount of P90 million and
P10 million plus attorney's fees and cost of suit.
To be entitled to moral damages, ICA needed to prove that it had a good reputation
and that AMA's action besmirched the same.[11] Such proof is wanting in this case.
As for Dr. Campos, he has amply proved that he suffered mental anguish, serious
anxiety, and social humiliation following AMA's unfounded accusation that he
fraudulently misled AMA regarding the structural condition of ICA's building.
However, due to his untimely demise before the finality of this case, his claim for
moral damages does not survive and is not transmissible to his substitutes, for being
extremely personal to him.[12]
Since AMA acted in a reckless, wanton, oppressive, and malevolent manner in
imputing fraud and deceit on ICA and Dr. Campos, the Court finds ground for
awarding them exemplary damages. Further, the Court holds that, having been
compelled to litigate in order to protect their interests, ICA and Dr. Campos are also
entitled to attorney's fees.
WHEREFORE, the CourtGRANTS the petition andREVERSES andSETS
ASIDE the Decision of the Court of Appeals in CA-G.R. CV 82266 dated February
27, 2006. Further, the Court:
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1. DIRECTSpetitioner Immaculate Conception Academy to return to respondent
AMA Computer College, Inc. its security deposit and advance rentals for the lease of
the subject building totaling P4,072,150.00 plus interest of 6% per annum from the
date of the finality of this decision until it is fully paid; and
2.DIRECTS respondent AMA Computer College, Inc. to pay the heirs of Dr. Paulo
C. Campos, namely, Jose Paulo, Paulo, Jr., and Enrique, all surnamed Campos and
the Immaculate Conception Academy P100,000.00 as exemplary damages and
P50,000.00 as attorney's fees.
SO ORDERED.
warranty against hidden defects
THIRD DIVISION
[ G.R. No. 148173, December 10, 2004 ]
SUPERCARS MANAGEMENT & DEVELOPMENT CORPORATION,REPRESENTED BY ITS PRESIDENT BENIGNO CHAN,
PETITIONER, VS. THE LATE FILEMON FLORES,
SUBSTITUTED BY HIS SURVIVING SPOUSE, NORA C.
FLORES,[1] RESPONDENT.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review oncertiorari assailing the Decision[2] dated
November 29, 2000 and Resolution[3]dated April 26, 2001, both issued by the Court
of Appeals in CA-G.R. CV No. 40419, entitled“Filemon Flores vs. Supercars
Management & Development Corporation, Mamerto Catley, Pablito Marquez, and
Rizal Commercial Banking Corporation.”
In the second week of December 1988, Filemon Flores, respondent, purchased from
Supercars Management and Development Corporation, petitioner, an Isuzu Carter
Crew Cab for P212,000.00 payable monthly with a down payment equivalent to 30%
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of the price or P63,600.00. The balance was to be financed by the Rizal Commercial
Banking Corporation (RCBC). The sale was coursed through Pablito Marquez,
petitioner’s salesman.
Upon delivery of the vehicle on December 27, 1988, respondent paid petitioner the
30% down payment, plus premium for the vehicle’s comprehensive insurance policy
amounting to P7,374.80. The RCBC financed the balance of the purchase price. Its
payment was secured by a chattel mortgage of the same vehicle.
A day after the vehicle was delivered, respondent used it for his family’s trip to
Bauang, La Union. While traversing the national highway in Tarlac, Tarlac, the fan
belt of the vehicle snapped. Then its brakes hardened after several stops and did not
function properly; the heater plug did not also function; the engine could not start;
and the fuel consumption increased.[4]
Upon their return to Manila in the first week of January 1989, respondent complained
to petitioner about the defects of the vehicle. Marquez then had the vehicle repaired
and returned it to respondent that same day, assuring the latter that it was already in
good condition.
But after driving the vehicle for a few days, the same defects resurfaced, prompting
respondent to send petitioner a letter dated January 30, 1989 rescinding the contract
of sale and returning the vehicle due to breach of warrantyagainst hidden defects. A
copy of the letter was furnished RCBC.
In response to respondent’s letter, petitioner directed Marquez to have the vehicle
fixed. Thereafter, he returned the vehicle to respondent with the assurance that it
has no more defects. However, when respondent drove it for a few days, he found
that the vehicle was still defective.
Hence, on February 7, 1989, respondent sent petitioner another letter restating that
he is rescinding the contract of sale, a copy of which was furnished RCBC. On
February 9, 1989, he returned the vehicle to petitioner. Later, Marquez and Mamerto
Catley, petitioner’s salesman, tried to convince respondent to accept the vehicle as ithad been completely repaired. But respondent refused.
On March 1, 1989, respondent sent petitioner a letter demanding the refund of his
down payment, plus the premium he paid for the vehicle’s insurance.
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Petitioner failed to comply with petitioner’s demand. Consequently, respondent
stopped paying the monthly amortization for the vehicle.
On March 21, 1989, RCBC sent respondent a letter demanding that he settle his
past overdue accounts for February 15 and March 15, 1989. In reply, respondent,
through a letter dated March 31, 1989, informed RCBC that he had rescinded the
contract of sale and had returned the vehicle to petitioner. This prompted RCBC to
file with the Office of the Clerk of Court andEx-Officio Sheriff, Regional Trial Court,
Quezon City, aPetition for Extra-judicial Foreclosure of Chattel Mortgage.
On June 2, 1989, a Notice of Sheriff’s Sale of the vehicle was set.
On June 1, 1989, respondent filed with the same Office
aManifestation/Motion asking for the postponement of the scheduled auction sale
until such time that petitioner and/or RCBC shall have reimbursed him of the amount
he paid for the vehicle; and that should the auction sale be conducted, the proceeds
thereof equivalent to the amount he spent be withheld and turned over to him.
The auction sale proceeded as scheduled. RCBC, being the highest bidder,
purchased the vehicle. Subsequently, RCBC sold the vehicle to a third party.
On November 3, 1989, respondent filed with the Regional Trial Court (RTC), Branch
150, Makati City a complaint[5] for rescission of contract with
damages against petitioner, Marquez, Catley and RCBC, docketed as Civil Case No.
89-5566.
In their separate answers, petitioner, Marquez and Catley denied having committed
any breach of warranty againsthidden defects, claiming that the vehicle had only
“minor and inconsequential defects” which “were promptly and satisfactorily repaired
by petitioner Supercars pursuant to its warranty as the seller.”[6] For its part, RCBC
claimed that it has no liability whatsoever against respondent because it merely
enforced its right under the chattel mortgage law. All the defendants prayed for the
dismissal of the complaint.
On April 13, 1992, the RTC rendered its Decision in favor of respondent
and against the defendants, thus:
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“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants, ordering the latter to jointly and severally pay the plaintiff as follows:
1. the amount of P70,974.80 representing the 30% down payment and premiumpaid for one year comprehensive motor vehicle insurance plus interests at the rate of
14% per annum from date of filing of this complaint on October 30, 1989 until fully
paid;
2. the sum of P50,000.00 as moral damages;
3. the sum of P25,000.00 as exemplary damages;
4. the sum of P20,000.00 as attorney’s fees; and
5. the costs of suit.
SO ORDERED.”[7]
Upon motion for reconsideration by RCBC, the RTC, in an Order dated December
21, 1992, modified its Decision by absolving RCBC from any liability and dismissing
the complaint against it, thus:
x x x
“Going into the merits of defendant bank’s contention that it has valid and
meritorious defense which should ultimately exculpate it from any liability, jointly and
severally, with the other defendants, the Court, after a careful review of the evidence
on hand, reconsiders its Decision insofar as the said bank is concerned. The valid
exercise by the plaintiff of its right to rescind the contract of sale for the purchase of
the motor vehicle in question does not apply to defendant bank. Said contract is
effective only as againstdefendant Supercars Management and DevelopmentCorporation, which must principally suffer the consequence of its breach of the
contract.
This Court likewise takes notice of the fact that since the motor vehicle was
voluntarily surrendered by the plaintiff and that defendant bank merely exercised its
right under the chattel mortgage law, no fault can be attributed to the latter. The fact
that the plaintiff sent a letter to the Office of the City Sheriff of Quezon City, copy
furnished the bank, seeking the postponement of the auction sale of the subject
motor vehicle, will not and cannot be considered as a valid ground to hold said bank
liable for only exercising its rights under the law. At most, the liability must really be
imputed only against defendants Supercars Management and Development
Corporation, Mamerto Catley and Pablito Marquez.
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“WHEREFORE, considering the foregoing premises, the Decision of this Court dated
April 13, 1992, insofar as it holds defendant Rizal Commercial Banking Corporation
jointly and severally liable to the plaintiff, is hereby MODIFIED and the
case against said bank DISMISSED. Similarly, the compulsory
counterclaim against the plaintiff is likewise dismissed.
The dispositive portion of the same Decision insofar as the rest of the defendants
are concerned is hereby maintained and affirmedin toto.
SO ORDERED.”[8]
From the above Decision and Order, petitioner, Marquez and Catley interposed an
appeal to the Court of Appeals, docketed as CA-G.R. CV No. 40419. In a Decision
dated November 29, 2000, the Appellate Court affirmed the RTC Decision with
modification in the sense that the complaint against Marquez and Catley was
dismissed, thus:
x x x
“It is with respect to appellants Catley and Marquez’ liability that we are minded to
modify the (appealed) Decision. The two being mere employees (of appellant
Supercars Management and Development Corporation), they cannot be held liable
to refund the amount claimed by Flores. Nor can they be made liable for damages
and attorney’s fees, there being no clear evidence that they had a hand in giving rise
thereto.
WHEREFORE, the appealed Amended Decision is AFFIRMED, with the
MODIFICATION that the complaint insofar as defendants-appellants Mamerto Catley
and Pablito Marquez is hereby DISMISSED.
SO ORDERED.[9]
Petitioner filed a motion for reconsideration but denied in a Resolution dated April
26, 2001.[10]
Hence, the instant petition.
Petitioner contends that respondent has “no right to rescind the contract of
sale”[11] because “the motor vehicle in question, as found by the RTC and the Court
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of Appeals, is already in the hands of a third party, one Mr. Lim – an innocent
purchaser for value.”[12] Thus, both courts erred in ordering petitioner to refund
respondent of the amounts he paid for the vehicle.
The issue here is whether respondent has the right to rescind the contract of sale
and to claim damages as a result thereof.
We rule for respondent.
Respondent’s complaint filed with the RTC seeks to recover from petitioner the
money he paid for the vehicle due to the latter’s breach of
his warranty against hidden defects under Articles 1547,[13] 1561,[14] and 1566[15] of
the Civil Code. The vehicle, after it was delivered to respondent, malfunctioned
despite repeated repairs by petitioner. Obviously, the vehicle has hidden defects.
A hidden defect is one which is unknown or could not have been known to the
vendee.[16]
The findings of both the RTC and Court of Appeals that petitioner committed a
breach of warranty against hiddendefects are fully supported by the records. TheAppellate Court correctly ruled:
“The evidence clearly shows that Flores [now respondent] was justified in opting to
rescind the sale given the hidden defects of the vehicle, allowance for the repair of
which he patiently extended, but which repair did not turn out to be satisfactory.
x x x
For when by letters of January 30, 1989 and February 7, 1989, which were followed
up by another dated March 1, 1989, Flores declared his rescission of the sale, which
rescission was not impugned or opposed by appellants as in fact they accepted the
return of the vehicle on February 9, 1989, such extra-judicial rescission x x x
produced legal effect (UP vs. de los Angeles, 35 SCRA 102 [1970];Tolentino
Commentaries and Jurisprudence on the Civil Code, citing Magdalena Estate v.
Myrick, 71 Phil. 344 [1940-1941]).
x x x”[17]
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It is well within respondent’s right to recover damages from petitioner who committed
a breach of warranty againsthidden defects. Article 1599 of the Civil Code partly
provides:
“Article 1599. Where there is a breach of warranty by the seller, the buyer may, at his
election:
x x x
(4) Rescind the contract of sale and refuse to receive the goods, or if the goods have
already been received, return them or offer to return them to the seller and recover
the price or any part thereof which has been paid.
When the buyer has claimed and been granted a remedy in anyone of these ways,
no other remedy can thereafter be granted, without prejudice to the provisions of the
second paragraph of Article 1191.
x x x.” (Underscoring supplied)
Petitioner’s contention that under Article 1191 of the Civil Code, rescission can no
longer be availed of as the vehicle was already in the hands of an innocent
purchaser for value lacks merit. Rescission is proper if one of the parties to a
contract commits a substantial breach of its provisions. It creates an obligation to
return the object of the contract. It can be carried out only when the one who
demands rescission can return whatever he may be obliged to restore. Rescission
abrogates the contract from its inception and requires a mutual restitution of the
benefits received.[18]Petitioner is thus mandated by law to give back to respondent
the purchase price upon his return of the vehicle. Records show that at the time
respondent opted to rescind the contract, the vehicle was still in his possession. He
returned it to petitioner who, without objection, accepted it. Accordingly, the 30%
down payment equivalent to P63,600.00, plus the premium for the comprehensive
insurance amounting to P7,374.80 paid by respondent should be returned by
petitioner.
As further stated by the Court of Appeals:
“Appellant’s invocation of Article 1191 of the Civil Code in support of his argument
that as the vehicle had been sold to a third party, rescission can no longer ensue is
misplaced.
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For, Flores is asking for the refund of the downpayment and payment for insurance
premiums. This brings us to appellant’s final argument.
Appellant’s professed excuse from their inability to give refund – that refund would
necessitate the return of the subject motor vehicle which is impossible because it is
now in the hands of an innocent purchaser for value – miserably fails.
x x x appellant Supercars was paid the balance of the purchase price by RCBC and,
therefore, in addition to the downpayment given by Flores, it had been fully paid for
the vehicle.
Ergo, Supercars had nothing more to do with the vehicle.”[19]
However, the lower court’s award of P50,000.00 as moral damages and P25,000.00
as exemplary damages to respondent is erroneous. While no proof of pecuniary loss
is necessary in order that moral damages may be awarded, the amount of indemnity
being left to the discretion of the court, it is nevertheless essential that the claimant
satisfactorily prove the existence of the factual basis of the damage and its causal
relation to defendant’s acts. Moral damages are in the category of an award
designed to compensate the claimant foractual injury suffered and not to impose a
penalty to the wrongdoer. This has not been proved by respondent.
In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent
manner.[20] Likewise, respondent failed to establish that petitioner acted in such
manner.
As to the award of attorney’s fees, the same must be deleted since the award of
moral and exemplary damages are eliminated.[21] Moreover, the trial court did not
give any justification for granting it in its decision. It is now settled that awards of
attorney’s fees must be based on findings of fact and law, stated in the decision of
the trial court.[22]
WHEREFORE, the petition isDENIED. The assailed Decision dated September 20,
1999 and Resolution dated February 1, 2000 of the Court of Appeals in CA-G.R. CV
No. 52177 areAFFIRMED withMODIFICATION. The award of moral and exemplary
damages and attorney’s fees areDELETED. Costs
against petitioner.
SO ORDERED.
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equitable mortgage 3
FIRST DIVISION
[ G.R. NO. 162112, July 03, 2007 ]
DOMINGO R. LUMAYAG AND FELIPA N. LUMAYAG, PETITIONERS,
VS. HEIRS OF JACINTO NEMEÑO AND DALMACIA
DAYANGCO-NEMEÑO, REPRESENTED BY MELITON NEMEÑO,
RESPONDENTS.
D E C I S I O N
GARCIA, J.:
Challenged and sought to be set aside in this petition for review on certiorari under
Rule 45 of the Rules of Court is the decision[1] dated September 30, 2003 of the
Court of Appeals (CA), as reiterated in its resolution[2] of January 9, 2004 inCA-G.R.
CV No. 63230, affirming, with modification, an earlier decision of the Regional Trial
Court (RTC) of Ozamiz City which ruled that the instrument entitledDeed of Sale
with Pacto De Retro executed in favor of the herein petitioners by the respondents is
actually an
equitable mortgage.
The facts:
During their lifetime, the spouses Jacinto Nemeño and Dalmacia Dayangco-
Nemeño, predecessors-in-interest of the herein respondent heirs, owned two (2)
parcels of coconut land located in Manaca, Ozamiz City. The parcels are: Lot No.
4049, with an area of five (5) hectares and covered by Original Certificate of Title
(OCT) No. 0-1743 and Lot No. 4035 C-4, consisting of 4,420 square meters and
covered by Tax Declaration No. 13750.
In 1979, Dalmacia died survived by her husband, Jacinto, and their six (6) children,to wit: Meliton, Eleuteria, Timoteo, Justo, Saturnino (now deceased) and Felipa.
On February 25, 1985, Jacinto, joined by his five (5) children, namely, Meliton,
Eleuteria, Timoteo, Justo and Saturnino, conveyed to his daughter Felipa and the
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latter's husband Domingo Lumayag the aforementioned Lot Nos. 4049 and 4035 C-
4. The instrument of conveyance is denominated asDeed of Sale with Pacto De
Retro.[3]Thereunder, it was stipulated that the consideration for the alleged sale of the
two (2) aforementioned lots was Twenty Thousand Pesos (P20,000.00) and that the
vendorsa retro have the right to repurchase the same lots within five (5) years from
the date of the execution of the instrument on February 25, 1985. It was likewise
agreed thereunder that in the event no purchase is effected within the said stipulated
period of five (5) years "conveyance shall become absolute and irrevocable without
the necessity of drawing up a new absolute deed of sale, subject to the requirements
of law regarding consolidation of ownership of real property."
On April 4, 1985, Jacinto died while undergoing treatment at theMHARS General
Hospital in Ozamiz City.
More than a decade later, or on August 28, 1996, the spouses Domingo Lumayag
and Felipa Nemeño-Lumayag filed with the RTC of Ozamiz City a petition for the
reconstitution of the owner's duplicate copy of OCT No. 0-1743 covering Lot No.
4049, one of the two lots subject of the earlierDeed of Sale with Pacto De Retro. In
that petition, the Lumayags alleged that said owner's duplicate copy of OCT No. 0-1743 was in Domingo's possession but the same was lost when a typhoon hit and
destroyed the couple's house in Talisay, Cebu on November 12, 1990. The petition
was opposed by the other heirs of Jacinto and Dalmacia who claimed that the
owner's duplicate copy of the same OCT was actually in the possession and custody
of their brother Meliton Nemeño, the administrator of the property, when it was
burned in a fire on May 22, 1992. In an order dated December 20, 1996,[4] the RTC
resolved said petition by ordering the issuance of a new owner's duplicate copy of
OCT No. 0-1743 and its delivery to the heirs of Jacinto and Dalmacia.
Such were the state of things when, on December 24, 1996, in the same RTC, the
heirs of Jacinto and Dalmacia, namely, their children Meliton, Eleuteria, Timoteo and
Justo and grandchildren Ricky and Daisy who are the heirs of Saturnino, (hereinafter
collectively referred to as the respondent heirs) filed against the spouses Domingo
Lumayag and Felipa N. Lumayag a complaint[5]forDeclaration of Contract
as Equitable Mortgage, Accounting and Redemption with Damages. In theircomplaint, docketed in the trial court as Civil Case No. 96-69 and raffled to Branch
35 thereof, the plaintiff heirs prayed that theDeed of Sale with Pacto De
Retro executed on February 25, 1985 in favor of the defendant spouses Domingo
Lumayag and Felipa N. Lumayag over Lot Nos. 4049 and 4035 C-4 be declared as
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anequitable mortgage and considered as already redeemed, with accounting and
damages.
Essentially, the complaint alleged that the subjectDeed of Sale with Pacto De
Retro was executed only for the purpose of securing the payment of a loan of
P20,000.00 obtained from the defendant spouses in connection with the medication
and hospitalization of the then ailing Jacinto Nemeño. To support their claim that the
contract in question was an equitable mortgage, the plaintiff heirs materially pointed
out the following: (1) the grossly inadequate price of the subject lots considering that
Lot No. 4049 with an area of 5 hectares has a market value of P40,760.00 and an
assessed value of P15,230.00, as shown by Tax Declaration No. 94-07335-A, while
Lot No. 4035 C-4 with an area of 4,420 square meters has a market value of
P4,120.00 and an assessed value of P1,460.00, per Tax Declaration No. 94-07355-
A; (2) their (plaintiffs') continued payment of realty taxes; (3) the land title and tax
declaration remained in the names of Jacinto Nemeño and Dalmacia Dayangco-
Nemeño; (4) their possession, particularly Justo Nemeño's, of the subject lots with
the petitioner spouses only given two-thirds share of the harvest therefrom; and (5)
the pactum commissorium stipulation in the subject contract. Thus, the heirs pray for
a judgment (a) declaring the subjectDeed of Sale with Pacto de Retro asan equitable mortgage and considering the lots subject thereof as redeemed; (b)
ordering the defendant spouses to render an accounting of the fruits and/or income
of the coconut lands from 1985 to 1996 and to return whatever remains of the
amount with interest at the legal rate after deducting the P20,000.00 loan; and (c)
ordering the same defendants to pay litigation expenses and attorney's fees.
In their Answer,[6] the spouses Lumayag denied that the contract in question was
an equitable mortgage and claimed that the amount of P20,000.00 received by the
plaintiff heirs was the consideration for the sale of the two lots and not a loan. By
way of affirmative defenses, the spouses Lumayag asserted that the action was
already barred by laches and prescription and the complaint itself states no cause of
action.
With the pre-trial conference having failed to bring the parties to any amicable
settlement, trial on the merits ensued.
Eventually, in a decision[7] dated February 3, 1999, the trial court adjudged the
subjectDeed of Sale with Pacto De Retro as an equitable mortgage and ordered the
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defendant spouses to reconvey Lot Nos. 4049 and 4035 C-4 to the plaintiff heirs for
P20,000.00. We quote thefallo of the decision:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered to wit:
1. Declaring the Deed of Sale with Pacto de Retro marked annex "A" to the
Complaint as equitablemortgage;
2. Ordering the defendants to reconvey the properties in litigation to the plaintiffs
in the amount of P20,000.00 within 30 days after the decision has become final and
executory;
3. Ordering the defendants to pay the cost of this suit.
SO ORDERED.
Dissatisfied, both parties appealed to the CA. Unfortunately, for failure of the plaintiff
heirs to submit their appeal brief, their appeal was dismissed, leaving that of the
defendant spouses which was docketed asCA-G.R. CV No. 63230.
As stated at the threshold hereof, the appellate court, in itsDecision of September
30, 2003, affirmed that of the trial court but with the modification that the mortgaged
properties are subject to foreclosure should the respondents fail to redeem the same
within thirty (30) days from finality of the decision. More specifically, the CA decisiondispositively reads:
WHEREFORE, premises considered, the Decision dated February 3, 1999 rendered
by the Regional Trial Court, Branch 35, Ozamiz City in Civil Case No. 96-69 is
herebyAFFIRMED withMODIFICATION, in that [petitioners] could foreclose the
mortgaged properties in the event [private respondents] fail to exercise their right of
redemption within thirty (30) days from the finality of this decision.
SO ORDERED. (Words in brackets supplied.)
Explains the CA in its decision:
xxx xxx xxx
In the instant case, we hold that the deed of sale with pacto de retro is actually
an equitable mortgage. For one, the supposed price for the sale with pacto de
retro in the amount of P20,000.00 is unusually inadequate for the two (2) parcels of
land, the total area of which is almost 5.5 hectares. Also, [respondents heirs]
remained in possession of the subject properties even after the execution of the
subject instrument. Not only did [respondent heirs] retain possession of the subject
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properties, they also paid for the realty taxes of the same. Indeed, as the trial court
found the transaction was one of anequitable mortgage,
Finally, the subject instrument provides that if the vendors a-retro, herein plaintiffs-
appellants, fails to exercise their right to redeem or repurchase the subject properties
within the period stipulated upon, then the conveyance shall be deemed to be an
absolute and irrevocable sale, without the necessity of executing any further deed.
Such stipulation is void for being a pactum commissorium. xxx
Having ruled that the instrument executed by the parties is one of
an equitable mortgage, [respondent heirs] can now redeem the mortgaged
properties from [petitioner spouses] within thirty (30) days from finality of this
decision. Otherwise, [petitioner spouses] would be given the option to foreclose the
mortgaged properties, for as a rule, in a real estate mortgage, when the principal
obligation is not paid when due, the mortgagee has the right to foreclose
the mortgage and to have the property seized and sold with the view of applying the
proceeds to the payment of the obligation. xxx. (Words in brackets supplied).
With their motion for reconsideration having been denied by the appellate court in its
equally impugned Resolution of January 9, 2004, petitioners are now with this
Courtvia the instant recourse on their submission that:
I
HON. COURT OF APPEALS GRAVELY ERRED IN NOT REVERSING THE
DECISION OF THE TRIAL COURT AND DISMISSING THE PRIVATE
RESPONDENTS' COMPLAINT ON GROUNDS OF LACHES AND OR
PRESCRIPTION.
II
HON. COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DEED OF
SALE WITH PACTO DE RETRO IS ACTUALLY AN EQUITABLE MORTGAGE.
III
THE DECISION RENDERED BY THE HON. COURT OF APPEALS IS NOT
SUPPORTED BY THE EVIDENCE AND CONTRARY TO LAW.[8]
WeDENY.
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Petitioners initially put the CA to task for not dismissing the case considering that the
titles to the subject parcels of land had already been consolidated to them by
operation of law because the five (5)-year prescriptive period for the respondents to
repurchase expired in 1990.
Under a pacto de retro sale, title to and ownership of property are immediately
vested in the vendeea retro, subject only to the resolutory condition that the vendor
repurchases it within the stipulated period.[9] The failure of the vendora retro to
repurchase the property vests upon the vendeea retro by operation of law the
absolute title and ownership over the property sold.[10]
Here, there is no issue as regards the fact that the subjectDeed of Sale with Pacto
De Retro provided for a 5-year redemption period which expired on February 25,
1990. Evidently, then, the failure of the respondent heirs to redeem the properties
within the stipulated period indubitably vested the absolute title to and ownership
thereof to the petitioners.But such consequence would only be true if the
contract that was executed between the parties was indeed a pacto de
retro sale and not an equitable mortgage.
The two (2) courts below unanimously found that the subjectDeed of Sale with
Pacto De Retro, while purporting to be a sale, is in truth and in fact
an equitable mortgage. Such factual finding, more so when supported by the
evidence, as here, commands not only respect but even finality and is binding on
this Court.[11]
An equitable mortgage has been defined "as one which although lacking in some
formality, or form or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law."[12]
Article 1602 of the Civil Code enumerates the instances when a contract, regardless
of its nomenclature, may be presumed to be an equitable mortgage, to wit:
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument
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extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the
parties is that the transaction shall secure the payment of a debt or the performance
of any other obligation.
In any of the foregoing case, any money, fruits, or other benefit to be received by the
vendee as rent or otherwise shall be considered as interest which shall be subject to
the usury laws.
Article 1604 of the Civil Code provides that the provisions of Article 1602 shall also
apply to a contract purporting to be an absolute sale, and, in case of doubt, a
contract purporting to be a sale with right to repurchase shall be construed as
an equitable mortgage.[13]
The law requires the presence of any one and not the concurrence of all of the
circumstances enumerated under Article 1602,supra, to conclude that the
transaction is one of equitable mortgage. So it is that inSocorro Taopo Banga v.
Sps. Jose and Emeline Bello,[14] this Court, citing Aguirre v. CA,
[15] unequivocally
ruled:
The presence of even one of the circumstances in Article 1602 is sufficient basis to
declare a contract as one of equitable mortgage. The explicit provision of Article
1602 that any of those circumstances would suffice to construe a contract of sale to
be one of equitable mortgage is in consonance with the rule that law favors the least
transmission of property rights.To stress, the existence of any one of the
conditions under Article 1602, not a concurrence, nor an overwhelming
number of such circumstances, suffices to give rise to the presumption that
the contract is an equitablemortgage. (Emphasis ours)
Here, the CA correctly found the presence of not merely one but four (4)
circumstances indicative of the true nature of the subject transaction as
an equitable mortgage, to wit: (a) gross inadequacy of the contract price of
P20,000.00 for two (2) parcels of land, the total area of which is almost 5.5 hectares;
(b) respondent heirs remained in possession of the subject property even after the
execution of the supposedlyDeed of Sale with Pacto de Retro; (c) said respondents'
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payment of realty taxes; and (d) the provision on pactum commissorium.
While we are not in full accord with the CA in its observation that the consideration of
the sale with right to repurchase is grossly inadequate since the market value and
assessed value of the two lots were not made on or before the date the subject
contract was executed on February 25, 1985 but only on June 8, 1994, still, there
are other circumstances convincing enough to support a conclusion that the
transaction in question is really an equitable mortgage.
Evidence is extant on record that the respondent heirs, as vendorsa retro, remained
in possession of the subject lots after the execution of the deed of sale with right to
repurchase. In stark contrast, evidence is wanting that petitioners ever enjoyed
possession thereof. If the transaction was really a sale with right to repurchase, as
claimed by the petitioners, then the latter should have asserted their rights for the
immediate delivery of the lots to them instead of allowing some of the respondents to
freely stay in the premises. Well-settled to the point of being elementary is the
doctrine that where the vendor remains in physical possession of the land as lessee
or otherwise, the contract should be treated as an equitable mortgage.[16]
As well, that the parties intended to enter into an equitable mortgage is further
accentuated by respondents' continued payment of the real property taxes
subsequent to the alleged sale. Payment of those taxes is a usual burden attached
to ownership and when, as here, such payment is coupled with continuous
possession of the property, it constitutes evidence of great weight that a person
under whose name the realty taxes were declared has a valid and rightful claim over
the land.[17]
Lastly, the stipulation in the subject deed reading: "if we fail to exercise our rights to
repurchase as herein granted within the period stipulated, then this conveyance shall
become absolute and irrevocable without the necessity of drawing a new absolute
Deed of Sale, subject to the requirements of law regarding consolidation of
ownership of real property," - is considered a pactum commissorium. This stipulation
is contrary to the nature of a true pacto de retrosale since in such sale, ownership of
the property sold is immediately transferred to the vendeea retro upon execution ofthe sale, subject only to the repurchase of a vendora retro within the stipulated
period.[18] Undoubtedly, the aforementioned stipulation is a pactum
commissorium because it enables the mortgagee to acquire ownership of the
mortgaged properties without need of any foreclosure proceedings which is a nullity
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being contrary to the provisions of Article 2088[19] of the Civil Code. Indeed, the
inclusion of such stipulation in the deed shows the intention to mortgagerather than
to sell.
WHEREFORE, the instant petition isDENIED, and the assailed decision and
resolution of theCA in CA-G.R. CV No. 63230 areAFFIRMED.
Costs against petitioners.
SO ORDERED.
equitable mortgage 2
THIRD DIVISION
[ G.R. NO. 159048, October 11, 2005 ]
BENNY GO, PETITIONER, VS. ELIODORO BACARON,
RESPONDENT.
D E C I S I O N
PANGANIBAN, J.:
The present Contract, which purports to be an absolute deed of sale, should be
deemed an
equitable mortgage for the following reasons: (1) the consideration has
been proven to be unusually inadequate; (2) the supposed vendor has remained in
possession of the property even after the execution of the instrument; and (3) the
alleged seller has continued to pay the real estate taxes on the property.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to
set aside the October 17, 2002 Decision[2] and the May 20, 2003 Resolution
[3] of the
Court of Appeals (CA) in CA-GR CV No. 67218. The assailed Decision disposed as
follows:
"WHEREFORE, premises considered, the Decision dated February 24, 2000 of the
Regional Trial Court of Davao City, Branch 12, in Civil Case No. 25,101-97 is hereby
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REVERSED and SET ASIDE and a new one is hereby rendered ordering the
reformation of the subject instrument, such that the same must be considered
a mortgage contract and not a transfer of right. Costs against [petitioner]."[4]
The assailed Resolution denied Reconsideration.
The Facts
The antecedents are narrated by the CA as follows:
"As evidenced by theTransfer of Rights dated October 1, 1993, Eliodoro Bacaron
conveyed a 15.3955-hectare parcel of land located in Langub, Talomo, Davao City,
in favor of Benny Go for P20,000.00.
"About a year thereafter, Bacaron, seeking to recover his property, went to Go to pay
his alleged P20,000.00 "loan" but the latter refused to receive the same and to return
his property saying that the transaction between the two of them was a sale and not
a mortgage as claimed by Bacaron.
"Consequently, on March 5, 1997, Eliodoro Bacaron, as plaintiff [herein respondent],
filed aComplaint for Reformation of Instrument with Damages and prayer for the
issuance of a writ of preliminary injunction, with the Regional Trial Court of Davao
City, Branch 12, against the [petitioner] Benny Go, which case was docketed as Civil
Case No. 25,101-97.
"In hisComplaint, [respondent] alleged that in the middle part of 1993, he suffered
business reversals which prompted him, being in urgent need of funds, to borrow
P20,000.00 from the [petitioner]. He however averred that prior to extending saidloan to him, the [petitioner] required him to execute a document purporting to be
aTransfer of Rights but was told that the same would only be a formality as he could
redeem the unregistered land the moment he pays the loan. Admitting that he signed
the instrument despite knowing that the same did not express the true intention of
the parties' agreement, i.e., that the transaction was a mere equitable mortgage, the
[respondent] explained that he did so only because he was in a very tight financial
situation and because he was assured by the [petitioner] that he could redeem his
property. To support this claim, [respondent] stressed the fact that the consideration
in the instrument was merely P20,000.00, which is grossly inadequate as the selling
price of a 15-hectare land considering that, at that time, the market value of land in
Davao City amounts to P100,000.00 per hectare. [Respondent] narrated that a year
thereafter, or in a middle part of 1994, he was able to raise the P20,000.00 and went
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to the [petitioner] to pay his loan but the latter refused to accept his payment,
insisting that the transaction entered into by the parties was not
an equitable mortgage, as the [respondent] insists, but a real transfer of right over
the property. Because of said refusal, [respondent] continued, he was compelled to
refer the matter to his lawyer in order to request the [petitioner] to accept his
payment otherwise he would file the necessary action in court. Despite said formal
demand by the [respondent], however, [petitioner] allegedly continued to refuse to
recognize the "equitable mortgage", prompting [respondent] to consign the
P20,000.00 with the Clerk of Court of the RTC of Davao City, Branch 12. He thus
insisted that it is [petitioner] who is "dead wrong" in not recognizing
the equitablemortgage since, aside from the fact that the consideration was
unusually inadequate, [respondent] allegedly remained in possession of the
property.
"[Respondent] thus prayed for an award for moral damages, in view of the
[petitioner's] evident bad faith in refusing to recognize the equitable mortgage, and
for attorney's fees as [petitioner's] alleged stubbornness compelled him to engage
the services of counsel. He likewise sought an award for exemplary damages to
deter others from committing similar acts and at the same time asked the court toissue a writ of preliminary injunction and/or temporary restraining order to prevent
[petitioner] from dispossessing [respondent] of the subject property or from
disposing of the same in favor of third parties as these acts would certainly work
injustice for and cause irreparable damage to the [respondent]. The prayer for the
issuance of a restraining order was however denied by the court in anOrder.
"[Petitioner] filed his Answer on May 5, 1997, denying [respondent's] claim that the
transaction was only an equitable mortgage and not an actual transfer of right. He
asserted that the truth of the matter was that when [respondent] suffered business
reverses, his accounts with the [petitioner], as evidenced by postdated checks, cash
vouchers and promissory notes, remained unpaid and his total indebtedness,
exclusive of interests, amounted to P985,423.70. [Petitioner] further averred that, in
order to avoid the filing of cases against him, [respondent] offered to pay his
indebtedness throughdacion en pago, giving the land in question as full payment
thereof. In addition, he stressed that considering that the property is still untitled andthe [respondent] bought the same from one Meliton Bacarro for only P50,000.00, it is
most unreasonable for him to agree to accept said land in exchange for over a
million pesos of indebtedness. He claimed though that he was only forced to do so
when [respondent] told him that if he did not accept the offer, other creditors would
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grab the same.
"By way of affirmative defenses, the [petitioner] pointed out that [respondent] has no
cause of action against him as the [respondent] failed to comply with the essential
requisites for an action for reformation of instrument. He moreover alleged that the
[respondent] is in estoppel because, by his own admission, he signed the document
knowing that the same did not express the true intention of the parties. Further,
[petitioner] claimed that there was a valid transfer of the property herein since the
consideration is not only the actual amount written in the instrument but it also
includes the outstanding obligation of [respondent] to the [petitioner] amounting to
almost P1 million.
"As counterclaim, [petitioner] averred that, because of this baseless complaint, he
suffered mental anguish, wounded feelings and besmirched reputation, entitling him
to moral damages amounting to P20,000.00, and that in order to deter others from
doing similar acts, exemplary damages amounting to P20,000.00 should likewise be
awarded in his favor. [Petitioner] also prayed for attorney's fees and litigation
expenses claiming that, because he was constrained to litigate, he was forced to hire
the services of counsel.
x x x x x x x x x
"Trial ensued and thereafter the trial court rendered itsDecision dated February 24,
2000 dismissing the complaint while finding the [petitioner's] counterclaim
meritorious. In making said ruling, the lower court, citing Article 1350 (should be
1359) of the New Civil Code, found that [respondent] failed to establish the existence
of all the requisites for an action for reformation by clear, convincing and competentevidence. Considering [respondent's] own testimony that he read the document and
fully understood the same, signing it without making any complaints to his lawyer,
the trial court held that the evidence on record shows that the subject instrument had
been freely and voluntarily entered into by the parties and that the same expresses
the true intention of the parties. The court further noted that the [respondent's] wife
even signed the document and that the same had been duly acknowledged by the
parties before a notary public as their "true act and voluntary deed."
"The trial court likewise observed that, contrary to [respondent's] claim that the
transaction was a meremortgage of the property, the terms of the instrument are
clear and unequivocable that the property subject of the document was "sold,
transferred, ceded and conveyed" to the [petitioner] "by way of absolute sale," and
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hence, no extrinsic aids are necessary to ascertain the intention of the parties as the
same is determinable from the document itself. Moreover, said court emphasized
that considering the fact that [respondent] is an educated person, having studied in
an exclusive school like Ateneo de Davao, and an experienced businessman, he is
presumed to have acted with due care and to have signed the instrument with full
knowledge of its contents and import. [Respondent's] claim that he merely borrowed
money from the [petitioner] and mortgaged the property subject of litigation to
guarantee said loan was thus found to be specious by the court, which found that
the [respondent] was actually indebted to the [petitioner] for almost a million pesos
and that the true consideration of the sale was in fact said outstanding obligation.
"With respect to [respondent's] alleged possession of the property and payment of
real estate taxes, both of which were relied upon by the [respondent] to boost his
assertion that the transaction was merely anequitable mortgage, the trial court said
that his claim of possession is belied by the fact that the actual occupants of the
property recognize that the [petitioner] owns the same and in fact said occupants
prevented [respondent's] wife from entering the premises. The court, noting that the
[petitioner] also paid the realty taxes, was also of the opinion that [respondent]
merely made such payments in order to lay the basis of his allegation that thecontract was a mere equitable mortgage.
"Accordingly, the court held that [respondent] is also not entitled to his other claims
and that his unfounded action caused [petitioner] to an award for moral damages, in
addition to the expenses he incurred in defending his cause, i.e. services of a lawyer
and transportation and other expenses, which justifies an award for the
reimbursement of his expenses and attorney's fees.'[5]
Ruling of the Court of Appeals
Granting respondent's appeal, the appellate court ruled that the Contract entered
into by the parties should be deemed an
equitable mortgage, because the
consideration for the sale was grossly inadequate. By continuing to harvest the
crops and supervise his workers, respondent remained in control of the property.
True, upon the institution of this case, petitioner paid the required real estate taxesthat were still in arrears. Respondent, however paid the taxes for 1995, 1996 and
1997 -- the years between the dates when the alleged absolute sale was entered
into on October 1, 1993, and when this case was instituted on March 5, 1997.[6]
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Granting respondent's prayer for reformation of the Contract, the CA ruled that the
instrument failed to reflect the true intention of the parties because of petitioner's
inequitable conduct.[7]
Hence, this Petition.[8]
The Issues
Petitioner raises the following issues for this Court's consideration:
"I.
Whether o[r] not the Court of Appeals erred in ruling that there was
inadequate consideration.
"II.
Whether o[r] not the Court of Appeals erred in ruling that the respondent
remained in possession of the land in question.
"III.
Whether or not the Court of Appeals erred in ruling that the taxes were not
paid by the petitioner.
"IV.
Whether or not the Court of Appeals erred in ruling that reformation is
proper."[9]
Simply put, these are the issues to be resolved: (1) whether the agreement entered
into by the parties was one forequitable mortgage or for absolute sale; and (2)
whether the grant of the relief of contract reformation was proper.
The Court's Ruling
The Petition has no merit.
First Issue:
Equitable
Mortgage
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An equitable mortgage has been defined "as one which although lacking in some
formality, or form or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law."[10]
The instances in which a contract of sale is presumed to be
an equitable mortgage are enumerated in Article 1602 of the Civil Code as follows:
"Art. 1602. The contract shall be presumed to be an equitable mortgage, in any
of the following cases:
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received
by the vendee as rent or otherwise shall be considered as interest which shall
be subject to the usury laws."
Furthermore, Article 1604 of the Civil Code provides that "[t]he provisions of Article
1602 shall also apply to a contract purporting to be an absolute sale."
In the present case, three of the instances enumerated in Article 1602 -- grossly
inadequate consideration, possession of the property, and payment of realty taxes
--attended the assailed transaction and thus showed that it was indeed
anequitable mortgage.
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Inadequate Consideration
Petitioner Go avers that the amount of P20,000 was not unusually inadequate. He
explains that the present parties entered into aDacion en Pago, whereby
respondent conveyed the subject property as payment for his outstanding debts to
petitioner -- debts supposedly amounting to P985,243.70.[11] To substantiate his
claim, petitioner presented the checks that respondent had issued, as well as the
latter's testimony purportedly admitting the genuineness and due execution of the
checks and the existence of the outstanding debts.[12] Petitioner Go contends that
respondent failed to establish by sufficient evidence that those debts had already
been paid.[13] Petitioner relies on the trial court's finding that respondent knowingly
and intentionally entered into a contract of sale, not an
equitable mortgage.[14]
On the other hand, Respondent Bacaron argues that the value of the property at the
time of the alleged sale was P120,000 per hectare, and that the indicated sale
amount of P20,000 was thus grossly iniquitous.[15] Allegedly, the previous cash
advances secured from petitioner's father had been settled, as evidenced by the fact
that petitioner did not negotiate further or encash the checks; the latter could havedone so, if the obligation was still extant.[16]Respondent points out that he paid for
that obligation with the coprax he had previously delivered to the father.[17]Petitioner
allegedly admitted this fact, though inadvertently, when he testified that respondent
had already paid some of the latter's previous cash advances.[18] Otherwise,
petitioner would have then set off his own debt to respondent (amounting to
P214,000) against the amount of almost one million pesos that the latter supposedly
owed him.[19]
Checks have the character of negotiability. At the same time, they may constitute
evidence of indebtedness.[20] Those presented by petitioner may indeed evince
respondent's indebtedness to him in the amounts stated on the faces of those
instruments. He, however, acknowledges (1) that respondent paid some of the
obligations through the coprax delivered to petitioner's father; and (2) that petitioner
owed and subsequently paid respondent P214,000.[21]
The parties' respective arguments show that the sum of P20,000, by itself, is
inadequate to justify the purported absolute Transfer of Rights.[22] Petitioner's claim
that there was a dacion en pago is not reflected on the instrument executed by the
parties. That claim, however, confirms the inadequacy of the P20,000 paid in
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consideration of the Transfer of Rights; hence, the Contract does not reflect the true
intention of the parties. As to what their true intention was -- whetherdacion en
pago or equitable mortgage -- will have to be determined by some other means.
Possession
According to Article 1602(2) of the New Civil Code, one of the instances showing
that a purported contract of sale is presumed to be an equitable mortgage is when
the supposed vendor remains in possession of the property even after the
conclusion of the transaction.
In general terms, possession is the holding of a thing or the enjoyment of a right,
whether by material occupation or by the fact that the right -- or, as in this case, the
property -- is subjected to the will of the claimant.[23] InDirector of Lands v. Heirs of
Abaldonado,[24] the gathering of the products of and the act of planting on the land
were held to constitute occupation, possession and cultivation.
In the present case, the witnesses of respondent swore that they had seen him
gather fruits and coconuts on the property. Based on the cited case, the witnesses'testimonies sufficiently establish that even after the execution of the assailed
Contract, respondent has remained in possession of the property. The testimonies
proffered by petitioner's witnesses merely indicated that they were tenants of the
property. Petitioner only informed them that he was the new owner of the property.
This attempt at a factual presentation hardly signifies that he exercised possession
over the property. As held by the appellate court, petitioner's other witness (Redoña)
was unconvincing, because he could not even say whether he resided within the
premises.[25]
The factual findings of the trial court and the CA are conflicting and, hence, may be
reviewed by this Court.[26]Normally, the findings of the trial court on the credibility of
witnesses should be respected. Here, however, their demeanor while testifying is not
at issue. What is disputed is the substance of their testimonies -- the facts to which
they testified. Assuming that the witnesses of petitioner were indeed credible, their
testimonies were insufficient to establish that he enjoyed possession over theproperty.
Payment of Realty Taxes
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Finally, petitioner asserts that the trial court's finding that he paid the realty taxes
should also be given corresponding weight.[27]
Respondent counters with the CA's findings that it was he who paid realty taxes on
the property. The appellate court concluded that he had paid taxes for the years
1995, 1996 and 1997 within each of those years; hence, before the filing of the
present controversy. In contrast, petitioner paid only the remaining taxes due on
October 17, 1997, or after the case had been instituted. This fact allegedly proves
that respondent has remained in possession of the property and continued to be its
owner.[28] He argues that if he had really transferred ownership, he would have been
foolish to continue paying for those taxes.[29]
On this point, we again rule for respondent.
Petitioner indeed paid the realty taxes on the property for the years 1980 to 1997.
The records show that the payments were all simultaneously made only on October
31, 1997, evidently in the light of the Complaint respondent had filed before the trial
court on March 5, 1997.[30] On the other hand, respondent continued to pay for the
realty taxes due on the property for the years 1995, 1996 and 1997.
[31]
That the parties intended to enter into an equitable mortgage is bolstered by
respondent's continued payment of the real property taxes subsequent to the alleged
sale. Payment of those taxes is a usual burden attached to ownership. Coupled with
continuous possession of the property, it constitutes evidence of great weight that a
person under whose name the realty taxes were declared has a valid and rightful
claim over the land.[32]
That the parties intended to enter into an equitable mortgage is also shown by the
fact that the "seller" was driven to obtain the loan at a time when he was in urgent
need of money; and that he signed the Deed of Sale, despite knowing that it did not
express the real intention of the parties.[33] In the present proceedings, the collapse
of his business prompted respondent to obtain the loan.[34] Petitioner himself
admitted that at the time they entered into the alleged absolute sale, respondent had
suffered from serious business reversals.[35]
Second Issue:
Reformation of Instrument
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Petitioner claims that the CA erred in granting the remedy of reformation of
contracts. He avers that the failure of the instrument to express the parties' true
agreement was not due to his mistake; or to fraud, inequitable conduct, or accident.[36]
We rule for respondent.
Ultimately, it is theintention of the parties that determines whether a contract is one
of sale or of mortgage.[37] In the present case, one of the parties to the contract
raises as an issue the fact that their true intention or agreement is not reflected in the
instrument. Under this circumstance, parol evidence becomes admissible and
competent evidence to prove the true nature of the instrument.[38] Hence, unavailing
is the assertion of petitioner that the interpretation of the terms of the Contract is
unnecessary, and that the parties clearly agreed to execute an absolute deed of
sale. His assertion does not hold, especially in the light of the provisions of Article
1604 of the Civil Code, under which even contracts purporting to be absolute sales
are subject to the provisions of Article 1602.
Moreover, under Article 1605 of the New Civil Code, the supposed vendor may ask
for the reformation of the instrument, should the case be among those mentioned in
Articles 1602 and 1604. Because respondent has more than sufficiently established
that the assailed Contract is in fact an equitable mortgage rather than an absolute
sale, he is allowed to avail himself of the remedy of reformation of contracts.
WHEREFORE, the Petition is herebyDENIED, and the assailed Decision and
Resolution AFFIRMED.
SO ORDERED.
equitable mortgageThe Facts
The antecedents are narrated by the CA as follows:
"As evidenced by theTransfer of Rights dated October 1, 1993, Eliodoro Bacaron
conveyed a 15.3955-hectare parcel of land located in Langub, Talomo, Davao City,
in favor of Benny Go for P20,000.00.
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"About a year thereafter, Bacaron, seeking to recover his property, went to Go to pay
his alleged P20,000.00 "loan" but the latter refused to receive the same and to return
his property saying that the transaction between the two of them was a sale and not
a mortgage as claimed by Bacaron.
"Consequently, on March 5, 1997, Eliodoro Bacaron, as plaintiff [herein respondent],
filed aComplaint for Reformation of Instrument with Damages and prayer for the
issuance of a writ of preliminary injunction, with the Regional Trial Court of Davao
City, Branch 12, against the [petitioner] Benny Go, which case was docketed as Civil
Case No. 25,101-97.
"In hisComplaint, [respondent] alleged that in the middle part of 1993, he suffered
business reversals which prompted him, being in urgent need of funds, to borrow
P20,000.00 from the [petitioner]. He however averred that prior to extending said
loan to him, the [petitioner] required him to execute a document purporting to be
aTransfer of Rights but was told that the same would only be a formality as he could
redeem the unregistered land the moment he pays the loan. Admitting that he signed
the instrument despite knowing that the same did not express the true intention ofthe parties' agreement, i.e., that the transaction was a mere equitable mortgage, the
[respondent] explained that he did so only because he was in a very tight financial
situation and because he was assured by the [petitioner] that he could redeem his
property. To support this claim, [respondent] stressed the fact that the consideration
in the instrument was merely P20,000.00, which is grossly inadequate as the selling
price of a 15-hectare land considering that, at that time, the market value of land in
Davao City amounts to P100,000.00 per hectare. [Respondent] narrated that a year
thereafter, or in a middle part of 1994, he was able to raise the P20,000.00 and went
to the [petitioner] to pay his loan but the latter refused to accept his payment,
insisting that the transaction entered into by the parties was not
an equitable mortgage, as the [respondent] insists, but a real transfer of right over
the property. Because of said refusal, [respondent] continued, he was compelled to
refer the matter to his lawyer in order to request the [petitioner] to accept his
payment otherwise he would file the necessary action in court. Despite said formal
demand by the [respondent], however, [petitioner] allegedly continued to refuse torecognize the "equitable mortgage", prompting [respondent] to consign the
P20,000.00 with the Clerk of Court of the RTC of Davao City, Branch 12. He thus
insisted that it is [petitioner] who is "dead wrong" in not recognizing
the equitablemortgage since, aside from the fact that the consideration was
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unusually inadequate, [respondent] allegedly remained in possession of the
property.
"[Respondent] thus prayed for an award for moral damages, in view of the
[petitioner's] evident bad faith in refusing to recognize the equitable mortgage, and
for attorney's fees as [petitioner's] alleged stubbornness compelled him to engage
the services of counsel. He likewise sought an award for exemplary damages to
deter others from committing similar acts and at the same time asked the court to
issue a writ of preliminary injunction and/or temporary restraining order to prevent
[petitioner] from dispossessing [respondent] of the subject property or from
disposing of the same in favor of third parties as these acts would certainly work
injustice for and cause irreparable damage to the [respondent]. The prayer for the
issuance of a restraining order was however denied by the court in anOrder.
"[Petitioner] filed his Answer on May 5, 1997, denying [respondent's] claim that the
transaction was only an equitable mortgage and not an actual transfer of right. He
asserted that the truth of the matter was that when [respondent] suffered business
reverses, his accounts with the [petitioner], as evidenced by postdated checks, cash
vouchers and promissory notes, remained unpaid and his total indebtedness,exclusive of interests, amounted to P985,423.70. [Petitioner] further averred that, in
order to avoid the filing of cases against him, [respondent] offered to pay his
indebtedness throughdacion en pago, giving the land in question as full payment
thereof. In addition, he stressed that considering that the property is still untitled and
the [respondent] bought the same from one Meliton Bacarro for only P50,000.00, it is
most unreasonable for him to agree to accept said land in exchange for over a
million pesos of indebtedness. He claimed though that he was only forced to do so
when [respondent] told him that if he did not accept the offer, other creditors would
grab the same.
"By way of affirmative defenses, the [petitioner] pointed out that [respondent] has no
cause of action against him as the [respondent] failed to comply with the essential
requisites for an action for reformation of instrument. He moreover alleged that the
[respondent] is in estoppel because, by his own admission, he signed the document
knowing that the same did not express the true intention of the parties. Further,[petitioner] claimed that there was a valid transfer of the property herein since the
consideration is not only the actual amount written in the instrument but it also
includes the outstanding obligation of [respondent] to the [petitioner] amounting to
almost P1 million.
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"As counterclaim, [petitioner] averred that, because of this baseless complaint, he
suffered mental anguish, wounded feelings and besmirched reputation, entitling him
to moral damages amounting to P20,000.00, and that in order to deter others from
doing similar acts, exemplary damages amounting to P20,000.00 should likewise be
awarded in his favor. [Petitioner] also prayed for attorney's fees and litigation
expenses claiming that, because he was constrained to litigate, he was forced to hire
the services of counsel.
x x x x x x x x x
"Trial ensued and thereafter the trial court rendered itsDecision dated February 24,2000 dismissing the complaint while finding the [petitioner's] counterclaim
meritorious. In making said ruling, the lower court, citing Article 1350 (should be
1359) of the New Civil Code, found that [respondent] failed to establish the existence
of all the requisites for an action for reformation by clear, convincing and competent
evidence. Considering [respondent's] own testimony that he read the document and
fully understood the same, signing it without making any complaints to his lawyer,
the trial court held that the evidence on record shows that the subject instrument had
been freely and voluntarily entered into by the parties and that the same expresses
the true intention of the parties. The court further noted that the [respondent's] wife
even signed the document and that the same had been duly acknowledged by the
parties before a notary public as their "true act and voluntary deed."
"The trial court likewise observed that, contrary to [respondent's] claim that the
transaction was a meremortgage of the property, the terms of the instrument are
clear and unequivocable that the property subject of the document was "sold,transferred, ceded and conveyed" to the [petitioner] "by way of absolute sale," and
hence, no extrinsic aids are necessary to ascertain the intention of the parties as the
same is determinable from the document itself. Moreover, said court emphasized
that considering the fact that [respondent] is an educated person, having studied in
an exclusive school like Ateneo de Davao, and an experienced businessman, he is
presumed to have acted with due care and to have signed the instrument with full
knowledge of its contents and import. [Respondent's] claim that he merely borrowed
money from the [petitioner] and mortgaged the property subject of litigation to
guarantee said loan was thus found to be specious by the court, which found that
the [respondent] was actually indebted to the [petitioner] for almost a million pesos
and that the true consideration of the sale was in fact said outstanding obligation.
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"With respect to [respondent's] alleged possession of the property and payment of
real estate taxes, both of which were relied upon by the [respondent] to boost his
assertion that the transaction was merely anequitable mortgage, the trial court said
that his claim of possession is belied by the fact that the actual occupants of the
property recognize that the [petitioner] owns the same and in fact said occupants
prevented [respondent's] wife from entering the premises. The court, noting that the
[petitioner] also paid the realty taxes, was also of the opinion that [respondent]
merely made such payments in order to lay the basis of his allegation that the
contract was a mere equitable mortgage.
"Accordingly, the court held that [respondent] is also not entitled to his other claims
and that his unfounded action caused [petitioner] to an award for moral damages, in
addition to the expenses he incurred in defending his cause, i.e. services of a lawyer
and transportation and other expenses, which justifies an award for the
reimbursement of his expenses and attorney's fees.'[5]
Ruling of the Court of Appeals
Granting respondent's appeal, the appellate court ruled that the Contract entered
into by the parties should be deemed an
equitable mortgage, because the
consideration for the sale was grossly inadequate. By continuing to harvest the
crops and supervise his workers, respondent remained in control of the property.
True, upon the institution of this case, petitioner paid the required real estate taxes
that were still in arrears. Respondent, however paid the taxes for 1995, 1996 and
1997 -- the years between the dates when the alleged absolute sale was entered
into on October 1, 1993, and when this case was instituted on March 5, 1997.[6]
Granting respondent's prayer for reformation of the Contract, the CA ruled that the
instrument failed to reflect the true intention of the parties because of petitioner's
inequitable conduct.[7]
Hence, this Petition.[8]
The Issues
Petitioner raises the following issues for this Court's consideration:
"I.
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Whether o[r] not the Court of Appeals erred in ruling that there was
inadequate consideration.
"II.
Whether o[r] not the Court of Appeals erred in ruling that the respondent
remained in possession of the land in question.
"III.
Whether or not the Court of Appeals erred in ruling that the taxes were notpaid by the petitioner.
"IV.
Whether or not the Court of Appeals erred in ruling that reformation is
proper."[9]
Simply put, these are the issues to be resolved: (1) whether the agreement entered
into by the parties was one forequitable mortgage or for absolute sale; and (2)
whether the grant of the relief of contract reformation was proper.
The Court's Ruling
The Petition has no merit.
First Issue:
Equitable
Mortgage
An
equitable mortgage has been defined "as one which although lacking in some
formality, or form or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law."[10]
The instances in which a contract of sale is presumed to be
an equitable mortgage are enumerated in Article 1602 of the Civil Code as follows:
"Art. 1602. The contract shall be presumed to be an equitable mortgage, in any
of the following cases:
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(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received
by the vendee as rent or otherwise shall be considered as interest which shallbe subject to the usury laws."
Furthermore, Article 1604 of the Civil Code provides that "[t]he provisions of Article
1602 shall also apply to a contract purporting to be an absolute sale."
In the present case, three of the instances enumerated in Article 1602 -- grossly
inadequate consideration, possession of the property, and payment of realty taxes
--attended the assailed transaction and thus showed that it was indeedanequitable mortgage.
Inadequate Consideration
Petitioner Go avers that the amount of P20,000 was not unusually inadequate. He
explains that the present parties entered into aDacion en Pago, whereby
respondent conveyed the subject property as payment for his outstanding debts to
petitioner -- debts supposedly amounting to P985,243.70.[11] To substantiate his
claim, petitioner presented the checks that respondent had issued, as well as the
latter's testimony purportedly admitting the genuineness and due execution of the
checks and the existence of the outstanding debts.[12] Petitioner Go contends that
respondent failed to establish by sufficient evidence that those debts had already
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been paid.[13] Petitioner relies on the trial court's finding that respondent knowingly
and intentionally entered into a contract of sale, not an equitable mortgage.[14]
On the other hand, Respondent Bacaron argues that the value of the property at the
time of the alleged sale was P120,000 per hectare, and that the indicated sale
amount of P20,000 was thus grossly iniquitous.[15] Allegedly, the previous cash
advances secured from petitioner's father had been settled, as evidenced by the fact
that petitioner did not negotiate further or encash the checks; the latter could have
done so, if the obligation was still extant.[16]Respondent points out that he paid for
that obligation with the coprax he had previously delivered to the father.[17]Petitioner
allegedly admitted this fact, though inadvertently, when he testified that respondent
had already paid some of the latter's previous cash advances.[18] Otherwise,
petitioner would have then set off his own debt to respondent (amounting to
P214,000) against the amount of almost one million pesos that the latter supposedly
owed him.[19]
Checks have the character of negotiability. At the same time, they may constitute
evidence of indebtedness.[20] Those presented by petitioner may indeed evince
respondent's indebtedness to him in the amounts stated on the faces of thoseinstruments. He, however, acknowledges (1) that respondent paid some of the
obligations through the coprax delivered to petitioner's father; and (2) that petitioner
owed and subsequently paid respondent P214,000.[21]
The parties' respective arguments show that the sum of P20,000, by itself, is
inadequate to justify the purported absolute Transfer of Rights.[22] Petitioner's claim
that there was a dacion en pago is not reflected on the instrument executed by the
parties. That claim, however, confirms the inadequacy of the P20,000 paid in
consideration of the Transfer of Rights; hence, the Contract does not reflect the true
intention of the parties. As to what their true intention was -- whetherdacion en
pago or equitable mortgage -- will have to be determined by some other means.
Possession
According to Article 1602(2) of the New Civil Code, one of the instances showingthat a purported contract of sale is presumed to be an equitable mortgage is when
the supposed vendor remains in possession of the property even after the
conclusion of the transaction.
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In general terms, possession is the holding of a thing or the enjoyment of a right,
whether by material occupation or by the fact that the right -- or, as in this case, the
property -- is subjected to the will of the claimant.[23] InDirector of Lands v. Heirs of
Abaldonado,[24] the gathering of the products of and the act of planting on the land
were held to constitute occupation, possession and cultivation.
In the present case, the witnesses of respondent swore that they had seen him
gather fruits and coconuts on the property. Based on the cited case, the witnesses'
testimonies sufficiently establish that even after the execution of the assailed
Contract, respondent has remained in possession of the property. The testimonies
proffered by petitioner's witnesses merely indicated that they were tenants of the
property. Petitioner only informed them that he was the new owner of the property.
This attempt at a factual presentation hardly signifies that he exercised possession
over the property. As held by the appellate court, petitioner's other witness (Redoña)
was unconvincing, because he could not even say whether he resided within the
premises.[25]
The factual findings of the trial court and the CA are conflicting and, hence, may be
reviewed by this Court.
[26]
Normally, the findings of the trial court on the credibility ofwitnesses should be respected. Here, however, their demeanor while testifying is not
at issue. What is disputed is the substance of their testimonies -- the facts to which
they testified. Assuming that the witnesses of petitioner were indeed credible, their
testimonies were insufficient to establish that he enjoyed possession over the
property.
Payment of Realty Taxes
Finally, petitioner asserts that the trial court's finding that he paid the realty taxes
should also be given corresponding weight.[27]
Respondent counters with the CA's findings that it was he who paid realty taxes on
the property. The appellate court concluded that he had paid taxes for the years
1995, 1996 and 1997 within each of those years; hence, before the filing of the
present controversy. In contrast, petitioner paid only the remaining taxes due onOctober 17, 1997, or after the case had been instituted. This fact allegedly proves
that respondent has remained in possession of the property and continued to be its
owner.[28] He argues that if he had really transferred ownership, he would have been
foolish to continue paying for those taxes.[29]
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On this point, we again rule for respondent.
Petitioner indeed paid the realty taxes on the property for the years 1980 to 1997.
The records show that the payments were all simultaneously made only on October
31, 1997, evidently in the light of the Complaint respondent had filed before the trial
court on March 5, 1997.[30] On the other hand, respondent continued to pay for the
realty taxes due on the property for the years 1995, 1996 and 1997.[31]
That the parties intended to enter into an equitable mortgage is bolstered by
respondent's continued payment of the real property taxes subsequent to the alleged
sale. Payment of those taxes is a usual burden attached to ownership. Coupled with
continuous possession of the property, it constitutes evidence of great weight that a
person under whose name the realty taxes were declared has a valid and rightful
claim over the land.[32]
That the parties intended to enter into an equitable mortgage is also shown by the
fact that the "seller" was driven to obtain the loan at a time when he was in urgent
need of money; and that he signed the Deed of Sale, despite knowing that it did notexpress the real intention of the parties.[33] In the present proceedings, the collapse
of his business prompted respondent to obtain the loan.[34] Petitioner himself
admitted that at the time they entered into the alleged absolute sale, respondent had
suffered from serious business reversals.[35]
Second Issue:
Reformation of Instrument
Petitioner claims that the CA erred in granting the remedy of reformation of
contracts. He avers that the failure of the instrument to express the parties' true
agreement was not due to his mistake; or to fraud, inequitable conduct, or accident.[36]
We rule for respondent.
Ultimately, it is theintention of the parties that determines whether a contract is one
of sale or of mortgage.[37] In the present case, one of the parties to the contract
raises as an issue the fact that their true intention or agreement is not reflected in the
instrument. Under this circumstance, parol evidence becomes admissible and
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competent evidence to prove the true nature of the instrument.[38] Hence, unavailing
is the assertion of petitioner that the interpretation of the terms of the Contract is
unnecessary, and that the parties clearly agreed to execute an absolute deed of
sale. His assertion does not hold, especially in the light of the provisions of Article
1604 of the Civil Code, under which even contracts purporting to be absolute sales
are subject to the provisions of Article 1602.
Moreover, under Article 1605 of the New Civil Code, the supposed vendor may ask
for the reformation of the instrument, should the case be among those mentioned in
Articles 1602 and 1604. Because respondent has more than sufficiently established
that the assailed Contract is in fact an equitable mortgage rather than an absolute
sale, he is allowed to avail himself of the remedy of reformation of contracts.
WHEREFORE, the Petition is herebyDENIED, and the assailed Decision and
Resolution AFFIRMED.
SO ORDERED.
A redhibitory defect must be an imperfection or defect
of such nature as to engender a certain degree of
importance.
SECOND DIVISION
[ G.R. No. 73913, January 31, 1989 ]
JERRY T.
MOLES, PETITIONER, VS. INTERMEDIATE APPELLATE
COURT AND MARIANO M. DIOLOSA, RESPONDENTS.
D E C I S I O N
REGALADO, J.:
This petition for review oncertiorari assails the decision of the then Intermediate
Appellate Court[1] dismissing the complaint filed by herein petitioner against the
herein private respondent in the former Court of First Instance of Negros Occidental
in Civil Case No. 13821 thereof.[2]
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The factual backdrop of this controversy, as culled from the records,[3] shows that on
May 17, 1978, petitioner Jerry T.Moles commenced a suit against private respondent
Mariano M. Diolosa in the aforesaid trial court, Branch IV in Bacolod City, for
rescission of contract with damages. Private respondent moved to dismiss on the
ground of improper venue, invoking therefor Sales Invoice No. 075A executed
between petitioner and private respondent on April 23, 1977 which provides that "all
judicial actions arising from this contract shall be instituted in the City of Iloilo".[4] This
was opposed by petitioner who averred that there is no formal document evidencing
the sale which is substantially verbal in character. In an order dated June 23, 1978,
the trial court denied the motion to dismiss, holding that the question of venue could
not be resolved at said stage of the case. The subsequent motion for
reconsideration was likewise denied.
Consequently, private respondent, invoking the aforesaid venue stipulation,
proceeded to this Court on a petition for prohibition with preliminary injunction in
G.R. No. 49078, questioning the validity of the order denying his aforesaid two
motions and seeking to enjoin the trial court from further proceeding with the case.
This petition was dismissed for lack of merit in a resolution of the Court, datedFebruary 7, 1979, and which became final on March 15, 1979. Thereafter, private
respondent filed his answer and proceeded to trial.
The aforecited records establish that sometime in 1977, petitioner needed a linotype
printing machine for his printing business, the LM Press at Bacolod City, and applied
for an industrial loan with the Development Bank of the Philippines (hereinafter,
DBP) for the purchase thereof. An agent of Smith, Bell and Co. who is a friend of
petitioner introduced the latter to private respondent, owner of the Diolosa Publishing
House in Iloilo City, who had two available machines. Thereafter, petitioner went to
Iloilo City to inspect the two machines offered for sale and was informed that the
same were secondhand but functional.
On his second visit to the Diolosa Publishing House, petitioner together with Rogelio
Yusay, a letterpress machine operator, decided to buy the linotype machine, Model
14. The transaction was basically verbal in nature but to facilitate the loanapplication with the DBP, a pro forma invoice, dated April 23, 1977 and reflecting the
amount of P50,000.00 as the consideration of the sale, was signed by petitioner with
an addendum that payment had not yet been made but that he promised to pay the
full amount upon the release of his loan from the aforementioned bank on or before
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the end of the month.[5] Although the agreed selling price was only P40,000.00, the
amount on the invoice was increased by P10,000.00, said increase being intended
for the purchase of new matrices for said machine.
Sometime between April and May, 1977, the machine was delivered to petitioner's
publishing house at Tangub, Bacolod City where it was installed by one Crispino
Escurido, an employee of respondent Diolosa. Another employee of the Diolosa
Publishing House, Tomas Plondaya, stayed at petitioner's house for almost a month
to train the latter's cousin in operating the machine.[6]
Under date of August 29, 1977, private respondent issued a certification wherein he
warranted that the machine sold was in "A-1 condition", together with other express
warranties.[7]
Prior to the release of the loan, a representative from the DBP, Bacolod Branch,
supposedly inspected the machine but he merely looked at it to see that it was there.[8] The inspector's recommendation was favorable and, thereafter, petitioner's loan of
P50,000.00 was granted and released. However, before payment was made to
private respondent, petitioner required the former, in a letter dated September 30,1977, to accomplish the following, with the explanations indicated by him:
1) Crossed check for P15,407.10 representing:
a: P1!,!!!"!! . O(erprice in the machineG
b: P 2!A"!! . @reight and handling of the machineG
c: P 2!A"!! . &hare in the electric repairG and
d: P 5,!!!"!! . #nsurance that rispin will come bac and repair the
linot%pe machine at sellerFs account as pro(ided in the
contractG after rispin has put e(er%thing in order when he
goes home on &unda% he will return the chec of
P15,!!!"!!"
2) Official receipt in the amount of P50,000.00 as full payment of the linotype
machine.
These were immediately complied with by private respondent and on the same day,
September 30, 1977, he received the DBP check for P50,000.00.[9]
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It is to be noted that aforesaid official receipt No. 0451, dated September 30, 1977
and prepared and signed by private respondent, expressly states that he received
from the petitioner "the DBP check for P50,000.00 issued in our favor in full payment
of one (1) Unit Model 14 Linotype Machine as perPro forma Invoice dated April 23,
1977".[10]
On November 29, 1977, petitioner wrote private respondent that the machine was
not functioning properly as it needed a new distributor bar. In the same letter,
petitioner unburdened himself of his grievances and sentiments in this wise:
"We bought this machine in good faith because we trusted you very much being our
elder brother in printing and publishing business. We did not hire anybody to look
over the machine, much more ask for a rebate in your price of P40,000.00 and
believed what your trusted two men, Tomas and Crispin, said although they were
hiding the real and actual condition of the machine for your business protection.
"Until last week, we found out the worst ever to happen to us. We have been
cheated because the expert of the Linotype machine from Manila says, that the most
he will buy your machine is at P5,000.00 only. x x x."[11]
Private respondent made no reply to said letter, so petitioner engaged the services
of other technicians. Later, after several telephone calls regarding the defects in the
machine, private respondent sent two technicians to make the necessary repairs but
they failed to put the machine in running condition. In fact, since then petitioner was
never able to use the machine.[12]
On February 18, 1978, not having received from private respondent the actionrequested in his preceding letter as hereinbefore stated, petitioner again wrote
private respondent, this time with the warning that he would be forced to seek legal
remedies to protect his interests.[13]
Obviously in response to the foregoing letter, private respondent decided to
purchase a new distributor bar and, on March 16, 1978, private respondent delivered
this spare part to petitioner through one Pedro Candido. However, when thereafter
petitioner asked private respondent to pay for the price of the distributor bar, the
latter asked petitioner to share the cost with him. Petitioner thus finally decided to
indorse the matter to his lawyer.
An expert witness for the petitioner, one Gil Legaspina, declared that he inspected
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the linotype machine involved in this case at the instance of petitioner. In his
inspection thereof, he found the following defects: (1) the vertical automatic stop
lever in the casting division was worn out; (2) the justification lever had a slight
breach (balanain the dialect); (3) the distributor bar was worn out; (4) the partition at
the entrance channel had a tear; (5) there was no "pie stacker" tube entrance; and
(6) the slouch arm lever in the driving division was worn out.
It turned out that the said linotype machine was the same machine that witness
Legaspina had previously inspected for Sy Brothers, a firm which also wanted to buy
a linotype machine for their printing establishment. Having found defects in said
machine, the witness informed Sy Brothers about his findings, hence the purchase
was aborted. In his opinion, major repairs were needed to put the machine back in
good running condition.[14]
After trial, the courta quo rendered a decision the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered
as follows:
(1) Decreeing the rescission of the contract of sale involving one linotype machine
No. 14 between the defendant as seller and the plaintiff as buyer;
(2) Ordering the plaintiff to return to the defendant at the latter's place of business
in Iloilo City the linotype machine aforementioned together with all accessories that
originally were delivered to the plaintiff;
(3) Ordering the defendant to return to the plaintiff the sum of Forty ThousandPesos (P40,000.00) representing the price of the linotype machine, plus interest at
the legal rate counted from May 17, 1978 when this action was instituted, until fully
paid;
(4) Ordering the defendant to indemnify the plaintiff the sum of Four Thousand
Five Hundred Pesos (P4,500.00) representing unearned income or actual damages;
(5) Ordering the defendant to pay the plaintiff the sum of One Thousand Pesos
(P1,000.00) for attorney's fees.
Costs against the defendant."[15]
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From this decision, private respondent appealed to the Intermediate Appellate Court
which reversed the judgment of the lower court and dismissed petitioner's complaint,
hence the present petition.
We find merit in petitioner's cause.
On the matter of venue, private respondent relies on the aforementioned Sales
Invoice No. 075A which allegedly requires that the proper venue should be Iloilo City
and not Bacolod City. We agree with petitioner that said document is not the
contract evidencing the sale of the linotype machine, it being merely a preliminary
memorandum of a proposal to buy one linotype machine, using for such purpose a
printed form used for printing job orders in private respondent's printing business.
As hereinbefore explained, this issue on venue was brought to Us by private
respondent in a special civil action for prohibition with preliminary injunction in G.R.
No. 49078. After considering the allegations contained, the issues raised and the
arguments adduced in said petition, as well as the comments thereto, the Court
dismissed the petition for lack of merit. Respondent court erred in reopening the
same issue on appeal, with a contrary ruling.
Furthermore, it was error for the respondent court, after adopting the factual findings
of the lower court, to reverse the latter's holding that the sales invoice is merely
a pro forma memorandum. The records do not show that this finding is grounded
entirely on speculation, surmises or conjectures as to warrant a reversal thereof.[16] In
fact, as hereinbefore stated, private respondent expressly admitted in his official
receipt No. 0451, dated September 30, 1977, that the said sales invoice was merely
a pro forma invoice. Consequently, the printed provisions therein, especially since
the printed form used was for purposes of other types of transactions, could not have
been intended by the parties to govern their transaction on the printing machine. It
is obvious that a venue stipulation, in order to bind the parties, must have been
intelligently and deliberately intended by them to exclude their case from the
reglementary rules on venue. Yet, even such intended variance may not necessarily
be given judicial approval, as, for instance, where there are no restrictive or
qualifying words in the agreement indicating that venue cannot be laid in any place
other than that agreed upon by the parties,[17]
and in contracts of adhesion.[18]
Now, when an article is sold as a secondhand item, a question arises as to whether
there is an implied warranty of its quality or fitness. It is generally held that in the
sale of a designated and specific article sold as secondhand, there is no implied
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warranty as to its quality or fitness for the purpose intended, at least where it is
subject to inspection at the time of the sale. On the other hand, there is also
authority to the effect that in a sale of secondhand articles there may be, under
some circumstances, an implied warranty of fitness for the ordinary purpose of the
article sold or for the particular purpose of the buyer.[19]
In a line of decisions rendered by the United States Supreme Court, it had
theretofore been held that there is no implied warranty as to the condition,
adaptation, fitness, or suitability for the purpose for which made, or the quality, of an
article sold as and for a secondhand article.[20]
Thus, in finding for private respondent, the respondent court cited the ruling inSison
vs. Ago, et al.[21] to the effect that unless goods are sold as to raise an implied
warranty, as a general rule there is no implied warranty in the sale of secondhand
articles.[22]
Said general rule, however, is not without exceptions. Article 1562 of our Civil Code,
which was taken from the Uniform Sales Act, provides:
"Art. 1562. In a sale of goods, there is an implied warranty or condition as to the
quality or fitness of the goods, as follows:
(1) Where the buyer, expressly or by implication, makes known to the seller the
particular purpose for which the goods are acquired, and it appears that the buyer
relies on the seller's skill or judgment (whether he be the grower or manufacturer or
not), there is an implied warranty that the goods shall be reasonably fit for such
purpose;"
x x x x x x x x x
InDrumar Mining Co. vs. Morris Ravine Mining Co.,[23] the District Court of Appeals,
3rd District, California, in applying a similar provision of law, ruled:
"There is nothing in the Uniform Sales Act declaring there is no implied warranty in
the sale of secondhand goods. Section 1735 of the Civil Code declares there is noimplied warranty or condition as to the quality or fitness for any particular purpose, of
goods supplied under a contract to sell, or a sale, except (this general statement is
followed by an enumeration of several exceptions). It would seem that the
legislature intended this section to apply to all sales of goods, whether new or
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secondhand. In subdivision 1 of this section, this language is used: 'Where the
buyer x x x makes known to the seller the particular purpose for which the goods are
required, and it appears that the buyer relies on the seller's skill or judgment x x x
there is an implied warranty that the goods shall be reasonably fit for such purpose.'"
Furthermore, and of a more determinative role in this case, a perusal of past
American decisions[24] likewise reveals a uniform pattern of rulings to the effect that
an express warranty can be made by and also be binding on the seller even in the
sale of a secondhand article.
In the aforecited case ofMarkman vs. Hallbeck, while holding that there was an
express warranty in the sale of a secondhand engine, the court said that it was not
error to refuse an instruction that upon the sale of secondhand goods no warranty
was implied, since secondhand goods might be sold under such circumstances as to
raise an implied warranty.
To repeat, in the case before Us, a certification to the effect that the linotype
machine bought by petitioner was in A-1 condition was issued by private respondent
in favor of the former. This cannot but be considered as an express warranty.
However, it is private respondent's submission, that the same is not binding on him,
not being a part of the contract of sale between them. This contention is bereft of
substance.
It must be remembered that the certification was a conditionsine qua non for the
release of petitioner's loan which was to be used as payment for the purchase price
of the machine. Private respondent failed to refute this material fact. Neither does
he explain why he made that express warranty on the condition of the machine if he
had not intended to be bound by it. In fact, the respondent court, in declaring thatpetitioner should have availed of the remedy of requiring repairs as provided for in
said certification, thereby considered the same as part and parcel of the verbal
contract between the parties.
On the basis of the foregoing circumstances, the inescapable conclusion is that
private respondent is indeed bound by the express warranty he executed in favor of
herein petitioner.
We disagree with respondent court that private respondent's express warranty as to
the A-1 condition of the machine was merely "dealer's talk". Private respondent was
not a dealer of printing or linotype machines to whom could be ascribed the
supposed resort to the usual exaggerations of trade in said items. His certification
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as to the condition of the machine was not made to induce petitioner to purchase it
but to confirm in writing for purposes of the financing aspect of the transaction his
representations thereon. Ordinarily, what does not appear on the face of the written
instrument should be regarded as dealer's or trader's talk;[25] conversely, what is
specifically represented as true said document, as in the instant case, cannot be
considered as mere dealer's talk.
On the question as to whether the hidden defects in the machine is sufficient to
warrant a rescission of the contract between the parties, We have to consider the
rule on redhibitory defects contemplated in Article 1561 of the Civil Code. A
redhibitory defect must be an imperfection or defect of such nature as to engender a
certain degree of importance. An imperfection or defect of little consequence does
not come within the category of being redhibitory.[26]
As already narrated, an expert witness for the petitioner categorically established
that the machine required major repairs before it could be used. This, plus the fact
that petitioner never made appropriate use of the machine from the time of purchase
until an action was filed, attest to the major defects in said machine, by reason of
which the rescission of the contract of sale is sought. The factual finding, therefore,of the trial court that the machine is not reasonably fit for the particular purpose for
which it was intended must be upheld, there being ample evidence to sustain the
same.
At a belated stage of this appeal, private respondent came up for the first time with
the contention that the action for rescission is barred by prescription. While it is true
that
Article 1571 of the Civil Code provides for a prescriptive
period of six months for a redhibitory action
, a cursory reading of
the ten preceding articles to which it refers will reveal that said rule may be applied
only in case of implied warranties.The present case involves one
with an express warranty. Consequently, the general rule
on rescission of contract, which is four years[27] shall
apply.Considering that the original case for rescission was filed only one year
after the delivery of the subject machine, the same is well within the prescriptive
period. This is aside from the doctrinal rule that the defense of prescription is waived
and cannot be considered on appeal if not raised in the trial court,[28] and this case
does not have the features for an exception to said rule.
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WHEREFORE, the judgment of dismissal of the respondent court is hereby
REVERSED and SET ASIDE, and the decision of the court a quo is hereby
REINSTATED.
SO ORDERED.