Estate Tax Cases

(TAX 2)

Velchez, Jaimee Lizza P.

MWF 5:00-6:00 PM

Prof.Calayan

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 161746 September 1, 2010

EUGENIO FELICIANO, substituted by his wife CEFERINA DE PALMA- FELICIANO, ANGELINA DE LEON, representing the heirs of ESTEBAN FELICIANO, TRINIDAD VALIENTE, AND BASILIA TRINIDAD, represented by her son DOMINADOR T. FELICIANO, Petitioners, vs.PEDRO CANOZA, DELIA FELICIANO, ROSAURO FELICIANO, ELSA FELICIANO AND PONCIANO FELICIANO, Respondents.

D E C I S I O N

VILLARAMA, JR., J.:

Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to annul and set aside the Decision1 dated June 26, 2003 and Resolution2 dated January 15, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61888. The CA had reversed the Decision3 dated August 3, 1998 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 11, in Civil Case No. 819-M-93 and dismissed petitioners’ complaint on the ground of prescription.

The facts are as follows:

When Antonio Feliciano passed away on May 20, 1930, he left behind his only property, a parcel of land located at Bunga4 Mayor, Bustos, Bulacan. The land had an area of 1,125 square meters and was evidenced by Tax Declaration No. 14025 in his name. On March 28, 1972, Leona, Maria, Pedro and Salina, all surnamed Feliciano, declared themselves to be the only surviving heirs of Antonio Feliciano, with the exception of Salina. They executed an extrajudicial settlement of Antonio Feliciano’s estate6 and appropriated among themselves the said parcel of land, to the exclusion of the heirs of Esteban Feliciano and Doroteo Feliciano, deceased children of Antonio Feliciano. On even date, Leona, Maria, Pedro and Salina executed a deed of absolute sale or Kasulatan sa Ganap Na Bilihan over the property in favor of the late Jacinto Feliciano (Pedro’s portion), Felisa Feliciano (Salina’s portion) and Pedro Canoza (Leona and Maria’s portions).7

During his lifetime, Jacinto Feliciano applied for a free patent over the portion of land he bought, declaring that the same was a public land, first occupied and cultivated by Pedro Feliciano.8 Jacinto was issued Free Patent No. (IV-4) 012293 on November 28, 19779 and the same was forwarded to the Register of Deeds of Malolos, Bulacan, but unfortunately, it was burned on March 7, 1987. Pedro Canoza, for his part, also applied for a free patent over the portion of land

which he bought, claiming that the same was public land, first occupied and cultivated by Leona and Maria Feliciano.10 He was issued Free Patent No. (IV-4) 012292, now covered by Original Certificate of Title (OCT) No. P-364,11 on February 23, 1979.

On October 18, 1993, Eugenio Feliciano and Angelina Feliciano-de Leon, surviving heirs of the late Esteban Feliciano, and Trinidad Feliciano-Valiente and Basilia Feliciano-Trinidad, surviving children of the late Doroteo Feliciano, filed a complaint12 against Salina Feliciano, Felisa Feliciano, Pedro Canoza and the heirs of the late Jacinto Feliciano, namely Delia, Rosauro, Elsa, Nardo and Ponciano, all surnamed Feliciano, for the Declaration of Nullity of Documents and Title, Recovery of Real Property and Damages. They alleged that the settlement of the estate and sale were done without their participation and consent as heirs of Esteban and Doroteo. Likewise, they averred that the ancestral home of the Felicianos is erected on the subject property and that they have occupied the same since birth. Canoza and Jacinto falsely declared that the property was not occupied, so their titles to the property should be declared null and void on the ground that they have made false statements in their respective applications for free patent.

On November 4, 1993, before an Answer could be filed, the petitioners amended their complaint to include the allegation that they sought to recover the shares of their fathers, Esteban and Doroteo, which they could have acquired as heirs of Antonio Feliciano.13

In their Answer,14 respondent Pedro Canoza and his spouse, respondent Delia Feliciano, alleged that they were buyers in good faith and for value. They likewise contended that assuming that there was preterition of legal heirs, they never took part in it. As affirmative defenses, they alleged that the complaint failed to state a cause of action; the lower court had no jurisdiction as the subject of the case were free patents and therefore prior exhaustion of administrative remedies was required; the case was prematurely filed; no effort was exerted towards a settlement; plaintiffs’ right has prescribed; Eugenio Feliciano was a mere squatter who should be ordered to vacate; the deed of sale was validly, genuinely and duly executed; Eugenio and Angelina were guilty of misleading the court because there were other heirs who were indispensable parties but who were not included; and Presidential Decree No. 1508 or the Revised Katarungang Pambarangay Law was not resorted to by plaintiffs.

Respondents Rosauro Feliciano, Elsa Feliciano and Ponciano Feliciano likewise filed an Answer15 containing the same allegations and defenses as respondents Pedro Canoza and Delia Feliciano. The other defendants, Salina Feliciano, Felisa Feliciano and Nardo Feliciano were declared in default.

On August 3, 1998, the trial court rendered a Decision, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows:

1. Declaring the extra-judicial settlement of estate of Antonio Feliciano null and void;

2. Declaring the sale of the property in question to Pedro Canoza, Felisa Feliciano and Jacinto Feliciano null and void;

3. Declaring the original certificate of Title No. 364 in the name of Pedro Canoza and the certificates of titles in the name of defendants over Lot 1874-Cad-344, Bustos Cadastre (Tax Declaration No. 1402) as null and void;

4. Ordering defendants to reconvey ownership and possession of said property to plaintiffs subject to a just and equitable partition thereof by and between all interested parties.

No pronouncement as to cost.

SO ORDERED.16

The trial court explained that by operation of law, the plaintiffs (herein petitioners) have as much right as Leona, Maria, Pedro and Salina Feliciano to inherit the property in question, and they cannot be deprived of their right unless by disinheritance for causes set forth in the law. When Leona Feliciano, Pedro Feliciano, Maria Feliciano and Salina Feliciano appropriated the disputed lot solely to themselves through the extrajudicial settlement of estate, they committed a fraudulent act. To the extent that Doroteo and Esteban were deprived of their rightful share, the said out-of-court settlement was annullable, said the trial court. The trial court also declared that Pedro Canoza was not a buyer in good faith of Leona and Maria’s shares. Records show that Pedro Canoza’s live-in partner, Delia Feliciano, was a relative of the petitioners and the other defendants; thus, he could be reasonably charged with the knowledge of petitioners’ status vis-à-vis the subject property. The acquisition by Canoza and Jacinto Feliciano of free patent titles over portions of the contested lot also did not legitimize their ownership thereof, as they acquired no greater rights over the property than their predecessors-in-interest, having merely stepped into their shoes.17

Aggrieved, respondents appealed to the CA with the following assignment of errors:

I. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ADMITTING IN EVIDENCE THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]

II. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND VOID THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]

III. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND VOID THE DEED OF SALE (EXHIBIT "C") IN FAVOR OF JACINTO FELICIANO, FELISA FELICIANO AND PEDRO CANOZA[;]

IV. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING O.C.T. NO. 364 IN THE NAME OF PEDRO CANOZA AND CERTIFICATES OF TITLE OF DEFENDANTS AS NULL AND VOID[; AND]

V. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ORDERING DEFENDANTS TO RECONVEY OWNERSHIP AND POSSESSION OF THE SUBJECT PROPERTY TO PLAINTIFFS SUBJECT TO A JUST AND EQUITABLE PARTITION THEREOF BY AND BETWEEN ALL INTERESTED PARTIES.18

On June 26, 2003, the appellate court rendered the assailed Decision reversing the trial court’s decision. The CA held,

WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the Decision dated August 3, 1998 of the Regional Trial Court, Branch 11 (XI), Malolos, Bulacan in Civil Case No. 819-M-93 is hereby REVERSED AND SET ASIDE and plaintiffs-appellees’ complaint is ordered DISMISSED for being time-barred.

SO ORDERED.19

The CA ruled that prescription had set in, citing the case of Pedrosa v. Court of Appeals,20 which held that the applicable prescriptive period to annul a deed of extrajudicial settlement is four (4) years from the discovery of the fraud. It reasoned that when petitioners filed the instant complaint for the annulment of the extrajudicial settlement of Antonio Feliciano’s estate, more than four (4) years had elapsed from the issuance of the free patents. As regards the portion claimed by the late Jacinto Feliciano, sixteen (16) years had elapsed from the time the free patent was issued to him before petitioners filed the complaint, while in the case of Canoza, fourteen (14) years had elapsed from the issuance of the free patent in Canoza’s favor. Hence, according to the CA, the action for the annulment of the documents had prescribed.

Petitioners filed a motion for reconsideration of the aforesaid Decision but it was denied by the CA in the Resolution dated January 15, 2004 for lack of merit.

Hence, this petition.

The grounds relied upon by the petitioners are the following:

A. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN GRANTING THE APPEAL BY ORDERING THE DISMISSAL OF THE COMPLAINT ON GROUND OF PRESCRIPTION OF ACTION, DESPITE THE FACT THAT THE ISSUE OF PRESCRIPTION OF ACTION HAS NOT BEEN RAISED ON APPEAL AS AN ISSUE, NOR ASSIGNED AS AN ERROR, NOR DEFINED IN THE PRE-TRIAL ORDER AS AMONG THE ISSUES TO BE RESOLVED;

B. ASSUMING THAT PRESCRIPTION OF ACTION MAY BE TAKEN AS A GROUND FOR DISMISSING THE COMPLAINT EVEN IF NOT RAISED ON APPEAL, NOR ASSIGNED AS AMONG THE ERRORS COMMITTED, THE COURT

OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE ACTION PRESCRIBES IN FOUR YEARS, OR IN NOT HOLDING THAT THE ACTION IS IMPRESCRIPTIBLE;

C. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT AFFIRMING THE DECISION OF THE TRIAL COURT.21

Essentially, the issue for our resolution is whether the CA erred in reversing the trial court’s decision.

Petitioners allege that the CA gravely erred in granting the appeal and in dismissing the complaint on the ground of prescription of action because that issue was never raised on appeal, nor defined as one (1) of the issues outlined and limited in the pre-trial order.

We do not agree.

While respondents have not assigned the defense of prescription in their appeal before the CA, they raised such defense in their December 1, 1993 Answer as one (1) of their affirmative defenses.22 In their brief before the CA, respondents specifically prayed for the reliefs mentioned in their respective answers before the trial court. Thus, by reference, they are deemed to have adopted the defense of prescription, and could not properly be said to have waived the defense of prescription.

Moreover, Rule 9, Section 1 of the 1997 Rules of Civil Procedure, as amended, provides that when it appears from the pleadings or the evidence on record that the action is already barred by the statute of limitations, the court shall dismiss the claim. Thus, in Gicano v. Gegato,23 we held:

We have ruled that trial courts have authority and discretion to dismiss an action on the ground of prescription when the parties’ pleadings or other facts on record show it to be indeed time-barred x x x; and it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative defense; or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or where a defendant has been declared in default. What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on the record: either in the averments of the plaintiffs complaint, or otherwise established by the evidence. (Underscoring supplied.)

But did the CA nonetheless commit error when it held that the applicable prescriptive period is four (4) years?

Petitioners argue that the CA erroneously treated the action they filed at the trial court as one (1) for annulment of the extrajudicial settlement and applied the four (4)-year prescriptive period in dismissing the same. They contend that the action they filed was one (1) for Declaration of Nullity of Documents and Titles, Recovery of Real Property and Damages, and as such, their action was imprescriptible pursuant to Article 141024 of the Civil Code.

Respondents, for their part, maintain that the CA did not err in holding that the deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of the partition and did not consent thereto, is merely fraudulent and not void. They stress that the action to rescind the partition based on fraud prescribes in four (4) years counted from the date of registration, which is constructive notice to the whole world.

We affirm the ruling of the CA. As the records show, the heirs of Doroteo and Esteban did not participate in the extrajudicial partition executed by Salina with the other compulsory heirs, Leona, Maria and Pedro. Undeniably, the said deed was fraudulently obtained as it deprived the known heirs of Doroteo and Esteban of their shares in the estate. A deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and vicious.25 Hence, an action to set it aside on the ground of fraud could be instituted. Such action for the annulment of the said partition, however, must be brought within four (4) years from the discovery of the fraud.1avvphi1

In Gerona v. De Guzman,26 respondents therein executed a deed of extrajudicial settlement declaring themselves to be the sole heirs of the late Marcelo de Guzman. They secured new transfer certificates of title in their own names, thereby excluding the petitioners therein from the estate of the deceased. The petitioners brought an action for the annulment of the said deed upon the ground that the same is tainted with fraud. The Court held,

Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial settlement" upon the ground of fraud in the execution thereof, the action therefor may be filed within four (4) years from the discovery of the fraud (Mauricio v. Villanueva, L-11072, September 24, 1959). Such discovery is deemed to have taken place, in the case at bar, on June 25, 1948, when said instrument was filed with the Register of Deeds and new certificates of title were issued in the name of respondents exclusively, for the registration of the deed of extra-judicial settlement constitute constructive notice to the whole world.27 (Emphasis and underscoring supplied.)

Evidently, the applicable prescriptive period to institute the action to annul the deed of extrajudicial settlement was four (4) years counted from the discovery of fraud as held in the case of Gerona v. De Guzman.28 However, the records show that petitioners’ complaint was filed only on October 18, 1993, or almost sixteen (16) years after Jacinto Feliciano was issued Free Patent No. (IV-4) 012293 on November 28, 1977, and almost fourteen (14) years from the time Pedro Canoza was issued OCT No. P-364 on November 28, 1979. As petitioners are deemed to have obtained constructive notice of the fraud upon the registration of the Free Patent, they clearly failed to institute the present civil action within the allowable period. The same result obtains even if their complaint is treated as one (1) essentially for reconveyance as more than ten (10) years have passed since petitioners’ cause of action accrued. The CA committed no error in dismissing their complaint.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated June 26, 2003 and Resolution dated January 15, 2004, of the Court of Appeals in CA-G.R. CV No. 61888 are AFFIRMED.

With costs against petitioners.

SO ORDERED.

MARTIN S. VILLARAMA, JR.Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALESAssociate Justice

Chairperson

LUCAS P. BERSAMINAssociate Justice

MARIANO C. DEL CASTILLO*

Associate Justice

MARIA LOURDES P. A. SERENOAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONCHITA CARPIO MORALESAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONAChief Justice

1. Source: http://www.lawphil.net/judjuris/juri2010/sep2010/gr_161746_2010.html

http://www.lawphil.net/judjuris/juri2010/sep2010/gr_161746_2010.html


Manila

SECOND DIVISION

G.R. No. 183852 October 20, 2010

CARMELA BROBIO MANGAHAS, Petitioner, vs.EUFROCINA A. BROBIO, Respondent.

R E S O L U T I O N

NACHURA, J.:

This petition for review on certiorari seeks to set aside the Court of Appeals (CA) Decision1 dated February 21, 2008, which dismissed petitioner’s action to enforce payment of a promissory note issued by respondent, and Resolution2 dated July 9, 2008, which denied petitioner’s motion for reconsideration.

The case arose from the following facts:

On January 10, 2002, Pacifico S. Brobio (Pacifico) died intestate, leaving three parcels of land. He was survived by his wife, respondent Eufrocina A. Brobio, and four legitimate and three illegitimate children; petitioner Carmela Brobio Mangahas is one of the illegitimate children.

On May 12, 2002, the heirs of the deceased executed a Deed of Extrajudicial Settlement of Estate of the Late Pacifico Brobio with Waiver. In the Deed, petitioner and Pacifico’s other children, in consideration of their love and affection for respondent and the sum of P150,000.00, waived and ceded their respective shares over the three parcels of land in favor of respondent. According to petitioner, respondent promised to give her an additional amount for her share in her father’s estate. Thus, after the signing of the Deed, petitioner demanded from respondent the promised additional amount, but respondent refused to pay, claiming that she had no more money.3

A year later, while processing her tax obligations with the Bureau of Internal Revenue (BIR), respondent was required to submit an original copy of the Deed. Left with no more original copy of the Deed, respondent summoned petitioner to her office on May 31, 2003 and asked her to countersign a copy of the Deed. Petitioner refused to countersign the document, demanding that respondent first give her the additional amount that she promised. Considering the value of the three parcels of land (which she claimed to be worth P20M), petitioner asked for P1M, but respondent begged her to lower the amount. Petitioner agreed to lower it to P600,000.00. Because respondent did not have the money at that time and petitioner refused to countersign the Deed without any assurance that the amount would be paid, respondent executed a promissory

note. Petitioner agreed to sign the Deed when respondent signed the promissory note which read —

31 May 2003

This is to promise that I will give a Financial Assistance to CARMELA B. MANGAHAS the amount of P 600,000.00 Six Hundred Thousand only on June 15, 2003.

(SGD)

EUFROCINA A. BROBIO4

When the promissory note fell due, respondent failed and refused to pay despite demand. Petitioner made several more demands upon respondent but the latter kept on insisting that she had no money.

On January 28, 2004, petitioner filed a Complaint for Specific Performance with Damages5 against respondent, alleging in part—

2. That plaintiff and defendant are legal heirs of the deceased, Pacifico S. Brobio[,] who died intestate and leaving without a will, on January 10, 2002, but leaving several real and personal properties (bank deposits), and some of which were the subject of the extra-judicial settlement among them, compulsory heirs of the deceased, Pacifico Brobio. x x x.

3. That in consideration of the said waiver of the plaintiff over the listed properties in the extra-judicial settlement, plaintiff received the sum of P150,000.00, and the defendant executed a "Promissory Note" on June 15, 2003, further committing herself to give plaintiff a financial assistance in the amount of P600,000.00. x x x.

4. That on its due date, June 15, 2003, defendant failed to make good of her promise of delivering to the plaintiff the sum of P600,000.00 pursuant to her "Promissory Note" dated May 31, 2003, and despite repeated demands, defendant had maliciously and capriciously refused to deliver to the plaintiff the amount [of] P600,000.00, and the last of which demands was on October 29, 2003. x x x.6

In her Answer with Compulsory Counterclaim,7 respondent admitted that she signed the promissory note but claimed that she was forced to do so. She also claimed that the undertaking was not supported by any consideration. More specifically, she contended that —

10. Defendant was practically held "hostage" by the demand of the plaintiff. At that time, defendant was so much pressured and was in [a] hurry to submit the documents to the Bureau of Internal Revenue because of the deadline set and for fear of possible penalty if not complied with. Defendant pleaded understanding but plaintiff was adamant. Her hand could only move in exchange for 1 million pesos.

11. Defendant, out of pressure and confused disposition, was constrained to make a promissory note in a reduced amount in favor of the plaintiff. The circumstances in the execution of the promissory note were obviously attended by involuntariness and the same was issued without consideration at all or for illegal consideration.8

On May 15, 2006, the Regional Trial Court (RTC) rendered a decision in favor of petitioner. The RTC found that the alleged "pressure and confused disposition" experienced by respondent and the circumstances that led to the execution of the promissory note do not constitute undue influence as would vitiate respondent’s consent thereto. On the contrary, the RTC observed that —

It is clear from all the foregoing that it is the defendant who took improper advantage of the plaintiff’s trust and confidence in her by resorting to a worthless written promise, which she was intent on reneging. On the other hand, plaintiff did not perform an unlawful conduct when she insisted on a written commitment from the defendant, as embodied in the promissory note in question, before affixing her signature that was asked of her by the defendant because, as already mentioned, that was the only opportunity available to her or which suddenly and unexpectedly presented itself to her in order to press her demand upon the defendant to satisfy the correct amount of consideration due to her. In other words, as the defendant had repeatedly rebuffed her plea for additional consideration by claiming lack of money, it is only natural for the plaintiff to seize the unexpected opportunity that suddenly presented itself in order to compel the defendant to give to her [what is] due [her]. And by executing the promissory note which the defendant had no intention of honoring, as testified to by her, the defendant clearly acted in bad faith and took advantage of the trust and confidence that plaintiff had reposed in her.9

The RTC also brushed aside respondent’s claim that the promissory note was not supported by valuable consideration. The court maintained that the promissory note was an additional consideration for the waiver of petitioner’s share in the three properties in favor of respondent. Its conclusion was bolstered by the fact that the promissory note was executed after negotiation and haggling between the parties. The dispositive portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered as follows:

1. Ordering the defendant to pay to plaintiff the sum of Six Hundred Thousand Pesos (P600,000.00) which she committed to pay to plaintiff under the promissory note in question, plus interest thereon at the rate of 12% per annum computed from the date of the filing of the complaint;

2. Ordering the defendant to pay to plaintiff the sum of P50,000.00 as attorney’s fees; and

3. Ordering the defendant to pay to plaintiff the costs of this suit.

SO ORDERED.10

On February 21, 2008, the CA reversed the RTC decision and dismissed the complaint.11 The CA found that there was a complete absence of consideration in the execution of the promissory

note, which made it inexistent and without any legal force and effect. The court noted that "financial assistance" was not the real reason why respondent executed the promissory note, but only to secure petitioner’s signature. The CA held that the waiver of petitioner’s share in the three properties, as expressed in the deed of extrajudicial settlement, may not be considered as the consideration of the promissory note, considering that petitioner signed the Deed way back in 2002 and she had already received the consideration of P150,000.00 for signing the same. The CA went on to hold that if petitioner disagreed with the amount she received, then she should have filed an action for partition.

Further, the CA found that intimidation attended the signing of the promissory note. Respondent needed the Deed countersigned by petitioner in order to comply with a BIR requirement; and, with petitioner’s refusal to sign the said document, respondent was forced to sign the promissory note to assure petitioner that the money promised to her would be paid.

Petitioner moved for the reconsideration of the CA Decision. In a Resolution dated July 9, 2008, the CA denied petitioner’s motion.12

In this petition for review, petitioner raises the following issues:

1. The Honorable Court of Appeals erred in the appreciation of the facts of this case when it found that intimidation attended the execution of the promissory note subject of this case.

2. The Honorable Court of Appeals erred when it found that the promissory note was without consideration.

3. The Honorable Court of Appeals erred when it stated that petitioner should have filed [an action] for partition instead of a case for specific performance.13

The petition is meritorious.

Contracts are voidable where consent thereto is given through mistake, violence, intimidation, undue influence, or fraud. In determining whether consent is vitiated by any of these circumstances, courts are given a wide latitude in weighing the facts or circumstances in a given case and in deciding in favor of what they believe actually occurred, considering the age, physical infirmity, intelligence, relationship, and conduct of the parties at the time of the execution of the contract and subsequent thereto, irrespective of whether the contract is in a public or private writing.14

Nowhere is it alleged that mistake, violence, fraud, or intimidation attended the execution of the promissory note. Still, respondent insists that she was "forced" into signing the promissory note because petitioner would not sign the document required by the BIR. In one case, the Court – in characterizing a similar argument by respondents therein – held that such allegation is tantamount to saying that the other party exerted undue influence upon them. However, the Court said that the fact that respondents were "forced" to sign the documents does not amount to vitiated consent.15

There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice.16 For undue influence to be present, the influence exerted must have so overpowered or subjugated the mind of a contracting party as to destroy his free agency, making him express the will of another rather than his own.17

Respondent may have desperately needed petitioner’s signature on the Deed, but there is no showing that she was deprived of free agency when she signed the promissory note. Being forced into a situation does not amount to vitiated consent where it is not shown that the party is deprived of free will and choice. Respondent still had a choice: she could have refused to execute the promissory note and resorted to judicial means to obtain petitioner’s signature. Instead, respondent chose to execute the promissory note to obtain petitioner’s signature, thereby agreeing to pay the amount demanded by petitioner.

The fact that respondent may have felt compelled, under the circumstances, to execute the promissory note will not negate the voluntariness of the act. As rightly observed by the trial court, the execution of the promissory note in the amount of P600,000.00 was, in fact, the product of a negotiation between the parties. Respondent herself testified that she bargained with petitioner to lower the amount:

ATTY. VILLEGAS:

Q And is it not that there was even a bargaining from P1-M to P600,000.00 before you prepare[d] and [sign[ed] that promissory note marked as Exhibit "C"?

A Yes, sir.

Q And in fact, you were the one [who] personally wrote the amount of P600,000.00 only as indicated in the said promissory note?

A Yes, sir.

COURT:

Q So, just to clarify. Carmela was asking an additional amount of P1-M for her to sign this document but you negotiated with her and asked that it be lowered to P600,000.00 to which she agreed, is that correct?

A Yes, Your Honor. Napilitan na po ako.

Q But you negotiated and asked for its reduction from P1-M to P600,000.00?

A Yes, Your Honor.18

Contrary to the CA’s findings, the situation did not amount to intimidation that vitiated consent.1awphil There is intimidation when one of the contracting parties is compelled to give his consent by a reasonable and well-grounded fear of an imminent and grave evil upon his

person or property, or upon the person or property of his spouse, descendants, or ascendants.19 Certainly, the payment of penalties for delayed payment of taxes would not qualify as a "reasonable and well-grounded fear of an imminent and grave evil."

We join the RTC in holding that courts will not set aside contracts merely because solicitation, importunity, argument, persuasion, or appeal to affection was used to obtain the consent of the other party. Influence obtained by persuasion or argument or by appeal to affection is not prohibited either in law or morals and is not obnoxious even in courts of equity.20

On the issue that the promissory note is void for not being supported by a consideration, we likewise disagree with the CA.

A contract is presumed to be supported by cause or consideration.21 The presumption that a contract has sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. To overcome the presumption, the alleged lack of consideration must be shown by preponderance of evidence.22 The burden to prove lack of consideration rests upon whoever alleges it, which, in the present case, is respondent.

Respondent failed to prove that the promissory note was not supported by any consideration. From her testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or consideration, which, at the very least, was petitioner’s signature on the document.1avvphi1

It may very well be argued that if such was the consideration, it was inadequate. Nonetheless, even if the consideration is inadequate, the contract would not be invalidated, unless there has been fraud, mistake, or undue influence.23 As previously stated, none of these grounds had been proven present in this case.

The foregoing discussion renders the final issue insignificant. Be that as it may, we would like to state that the remedy suggested by the CA is not the proper one under the circumstances. An action for partition implies that the property is still owned in common.24 Considering that the heirs had already executed a deed of extrajudicial settlement and waived their shares in favor of respondent, the properties are no longer under a state of co-ownership; there is nothing more to be partitioned, as ownership had already been merged in one person.

WHEREFORE, premises considered, the CA Decision dated February 21, 2008 and its Resolution dated July 9, 2008 are REVERSED and SET ASIDE. The RTC decision dated May 15, 2006 is REINSTATED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

WE CONCUR:

RENATO C. CORONA*

Chief Justice

ANTONIO T. CARPIOAssociate Justice

TERESITA J. LEONARDO-DE CASTRO**

Associate Justice

JOSE CATRAL MENDOZAAssociate Justice


I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIOAssociate JusticeChairperson, Second Division


Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


2.Source: http://www.lawphil.net/judjuris/juri2010/oct2010/gr_183852_2010.html

http://www.lawphil.net/judjuris/juri2010/oct2010/gr_183852_2010.html


Manila

SECOND DIVISION

G.R. No. 152266 July 2, 2010

HEIRS OF PEDRO DE GUZMAN, Petitioners, vs.ANGELINA PERONA and HEIRS OF ROSAURO DE GUZMAN; BATAAN DEVELOPMENT BANK; and REPUBLIC PLANTERS BANK, Respondents.

D E C I S I O N

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 and Resolution2 of the Court of Appeals (CA), dated May 30, 2001 and January 25, 2002, respectively, in CA-G.R. CV No. 46144.

The antecedent facts are as follows:

On April 15, 1985, Pedro de Guzman filed a Complaint with application for temporary restraining order and preliminary injunction against respondents before the Regional Trial Court (RTC) of Bataan docketed as Civil Case No. 5247. He sought reconveyance of a parcel of land measuring about 300 square meters from the heirs of Rosauro de Guzman and his surviving spouse, Angelina Perona.

Pedro alleged that through unlawful machination, fraud, deceit, and evident bad faith, respondent spouses Rosauro and Angelina caused the cancellation of Original Certificate of Title (OCT) No. 10075 and subdivided the said property into three (3) parcels of land covered by separate Transfer Certificate of Titles in their name.

Records show that OCT No. 100753 was issued by the Office of the Register of Deeds for the Province of Bataan on July 25, 1933, containing an area of 3,242 square meters, more or less, half of which was registered under the name of Andrea de Guzman, and the other half in the names of Servando de Guzman's children, namely, Pablo (married to Amelia Alarcon), Jose, Canuto, Cirilo, Leopoldo, David and Maximino.

In 1942, Andrea, Cirilo, Leopoldo and David died intestate. On July 26, 1950, a petition for the issuance of a new owner's duplicate of OCT No. 10075 was filed by Jose de Guzman, one of the registered owners, due to the loss of the owner's copy of OCT No. 10075. Pursuant to the Order4 of the Court of First Instance of Bataan, dated August 22, 1950, the Register of Deeds of Bataan was directed to issue a new owner's duplicate of OCT No. 10075. Thereafter, by virtue of an Extrajudicial Settlement of Estate5 executed on October 16, 1952 by Pablo, Jose, Canuto,

Veronica Cruz (surviving spouse of Cirilo and in her capacity as legal administratix of their minor children, Ernesto, Rosauro and Mercedita), Rogelio and Maximino, wherein they agreed to divide and adjudicate among themselves, in equal parts, the property covered by OCT No. 10075, the latter title was canceled and TCT No. T-3885 was issued in its stead. TCT No. T-3885 was later on divided into three parcels of land covered by TCT Nos. 78181, 78182 and 78183.

TCT No. 78181,6 registered in the name of the spouses Rosauro and Angelina, was mortgaged by the said Spouses to Bataan Development Bank (BD Bank) on March 25, 1980.7 Due to the failure of the Spouses to pay their indebtedness to BD Bank, the mortgaged property was foreclosed and sold to the bank as the highest bidder.

TCT No. 78182,8 also registered in the name of the spouses Rosauro and Angelina, was sold by the said Spouses to a certain Carlito Pangilinan and Candida Ramos by virtue of a Kasulatan ng Bilihang Tuluyan,9 dated August 12, 1982. By virtue of the sale, TCT No. 78182 was canceled and superseded by TCT No. 105347.

TCT No. 7818310 in the name of Pablo, Canuto, Ernesto, Rosauro, Mercedita, Rogelio and Maximino, all surnamed De Guzman, was canceled and superseded by TCT No. T-9204811 and registered in the name of the spouses Rosauro and Angelina. TCT No. 92048 was mortgaged by Rita A. Paguio, attorney-in-fact of the spouses Rosauro and Angelina,12 to Republic Planters Bank (RP Bank) on August 11, 1982.131avvphi1

Pedro alleged that he is the grandson of one Zacarias de Guzman who is the brother of one Servando de Guzman. Servando is the grandfather of Rosauro. In other words, Pedro's father (Ildefonso) and Rosauro's father (Cirilo) are first cousins. Zacarias, Servando, and Andrea were siblings.

Pedro, allegedly acting in behalf of his co-heirs, maintained that he is entitled to share in the estate of Andrea. He claimed that, during the lifetime of Andrea, the house which he occupied had already been adjudicated in his favor. He said that he took care of Andrea, who died in his own house. He prayed that he be recognized as the owner and legitimate possessor of a parcel of land, containing an area of 300 square meters, where his house stands. He alleged that BD Bank accepted the land as collateral from the spouses Angelina and Rosauro without conducting the necessary investigation and verification of the actual status of the land. He further prayed for the cancellation of the corresponding title or titles issued, which may affect the area where his house stands. He, likewise, prayed for payment of damages.

Respondent Angelina and the heirs of Rosauro did not answer the complaint despite service of summons, hence, they were declared in default. In its Answer,14 BD Bank alleged that Pedro's complaint stated no cause of action, as there was no clear allegation that the parcel of land covered by TCT No. 78181 is the same parcel of land over which he has some right or interest. It also failed to show that Pedro was an heir of Andrea and that he was acting in behalf of his co-heirs. RP Bank, in its defense,15 alleged that Pedro had no cause of action against the bank. The bank acted in good faith and exercised due diligence and verified that the mortgagor has a good title over the property covered by TCT No. 92048.

In its Decision16 dated April 14, 1994, the RTC dismissed the complaint. Aggrieved by the Decision, Pedro filed a Notice of Appeal,17 which the CA dismissed in a Resolution dated May 30, 2001, for lack of merit. A motion for reconsideration was filed, which the CA denied in a Resolution dated January 25, 2002.

Pedro died in the interim, thus, his heirs and successors-in-interest (herein petitioners) elevated the case to this Court via Petition for Review on Certiorari18 under Rule 45 of the Rules of Court, with the following issues:

A. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE PETITIONERS HAVE ACQUIRED THE LAND COVERED BY TCT NO. 78181 AGAINST ANGELINA PERONA AND HEIRS OF ROSAURO DE GUZMAN THRU ORAL PARTITION.

B. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE RESPONDENT BANKS ARE MORTGAGEES IN BAD FAITH.

In the present case, petitioners allege that Pedro acquired the property subject of this case covered by TCT No. 78181 through oral partition. They maintain that respondent BD bank is a mortgagee in bad faith. They, likewise, said that Pedro acquired ownership over the property by virtue of a document executed by Andrea transferring ownership of the property to him. Finally, they are asking for the reconveyance of a parcel of land where Pedro's house is situated.

In its Comment, respondent BD Bank alleges that the issue on whether or not it is a mortgagee in bad faith is a question of fact, and it is not proper for appeal under Rule 45 which deal only with questions of law.

The petition lacks merit.

The petitioner raises two issues in this case, however, upon perusal of the petition, the only issue in this case is whether or not respondent BD Bank is a mortgagee in bad faith.

Petitioners’ allegation that their predecessor Pedro acquired the land covered by TCT No. 78181 by means of oral partition cannot be taken cognizance by this Court. This allegation was never raised before the RTC. In the trial court, Pedro's theory was that the property subject of this case was adjudicated to him by virtue of a document executed by Andrea in his favor. Well settled is the rule that issues and arguments not brought before the trial court cannot be raised for the first time on appeal. Basic considerations of due process impel this rule.19

Pedro also claims that Andrea transferred to him the parcel of land measuring about 300 square meters, where his house was erected. However, as correctly pointed out by the CA, this claim was not substantiated by evidence.

Records show that Pedro only paid the real property taxes over the properties on March 13, 1984 and January 16, 1985.20 Prior to 1984, he never paid any taxes over the property which he alleged as his. The Court, therefore, finds that Pedro's payment of real estate taxes in 1984 and 1985 was

only an afterthought to give a semblance of his alleged right over the property, and in preparation for the filing of the complaint for reconveyance in April 15, 1985.

Nonetheless, as between respondents' title, embodied in a certificate of title, and Pedro's title, evidenced only by a tax declaration, the former is evidently far superior and is conclusive and an indefeasible proof of respondents’ ownership over the property subject of this case. Respondents' certificate of title is binding upon the whole world. Time and again, the Court has ruled that tax declarations and corresponding tax receipts cannot be used to prove title to or ownership of a real property inasmuch as they are not conclusive evidence of the same.21

Pedro's allegation that the spouses Rosauro and Angelina resorted to fraud when they caused the cancellation of OCT No. 10075 and the issuance of TCT Nos. 17181, 17182 and 17183 in their name is equally unsupported by evidence. It must be stressed that mere allegations of fraud are insufficient. Intentional acts to deceive and deprive another of his right, or in some manner injure him, must be specifically alleged and proved.22 For an action for reconveyance based on fraud to prosper, the party seeking reconveyance must prove by clear and convincing evidence his title to the property and the fact of fraud.23

Petitioners likewise allege that the heirs of Rosauro and Angelina's failure to answer the complaint before the RTC is an admission of the allegations in Pedro's complaint. The argument does not persuade Us. In civil cases, basic is the rule that the party making allegations has the burden of proving them by a preponderance of evidence. Moreover, parties must rely on the strength of their own evidence, not upon the weakness of the defense offered by their opponent. This principle equally holds true, even if the defendant had not been given the opportunity to present evidence because of a default order. The extent of the relief that may be granted can only be as much as has been alleged and proved with preponderant evidence required under Section 1 of Rule 133 of the Revised Rules on Evidence.24

In Luxuria Homes, Inc., v. Court of Appeals,25 the Court held that a judgment by default against a defendant does not imply a waiver of rights, except that of being heard and of presenting evidence in his favor. It does not imply admission by the defendant of the facts and causes of action of the plaintiff, because the codal section requires the latter to adduce his evidence in support of his allegations as an indispensable condition before final judgment could be given in his favor. Nor could it be interpreted as an admission by the defendant that the plaintiff’s causes of action finds support in the law, or that the latter is entitled to the relief prayed for.

Additionally, in Pascua v. Florendo,26 the Court held that complainants are not automatically entitled to the relief prayed for, once the defendants are declared in default. Favorable relief can be granted only after the court has ascertained that the relief is warranted by the evidence offered and the facts proven by the presenting party. Otherwise, it would be meaningless to require presentation of evidence if every time the other party is declared in default, a decision would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his prayer. This is not contemplated by the Rules nor is it sanctioned by the due process clause.

Clearly, the heirs of Rosauro and Angelina's failure to answer cannot be equivalent to an implied admission of the allegations in Pedro's complaint.

Petitioners’ submission that respondents merely hold the title to the properties in trust for their predecessor Pedro is without merit. Pedro failed to prove by clear and convincing evidence that the spouses Rosauro and Angelina managed, through fraud, to have the real properties subject of this case registered in their name. In the absence of fraud, no implied trust was established between Pedro and the spouses Rosauro and Angelina under Article 145627 of the New Civil Code. TCT Nos. 17181, 17182 and 17183 are deemed to be fairly and regularly issued.

Delving now on the main issue, petitioners claim that respondent BD Bank is a mortgagee in bad faith, because at the time the property was mortgaged by the spouses Rosauro and Angelina to respondent bank, the said Spouses were not residing in the mortgaged property. As correctly argued by respondent BD Bank, petitions for review under Rule 45 of the Rules of Court may be brought only on questions of law, not on questions of fact.28 The question on whether the respondent is a mortgagee in bad faith is clearly a question of fact and, therefore, not proper for appeals under Rule 45.

Further, the trial court found that respondent BD Bank made an inspection of the property that was subsequently accepted as collateral for the loan,29 which defeated petitioners' argument that respondent BD Bank did not exercise due diligence in inspecting and ascertaining the status of the mortgage property. The factual findings of trial courts are entitled to great weight and respect on appeal, especially when established by unrebutted testimonial and documentary evidence.30 The Court finds the foregoing conclusion drawn by the trial court supported by documentary evidence. Records show that after the spouses Rosauro and Angelina applied for a loan with respondent BD bank, the latter, through its appraiser Oscar M. Ronquillo, conducted an inspection and appraisal31 of the property covered by TCT No. 78181, together with the existing improvements thereon. After the said inspection and appraisal of the property, respondent BD Bank approved the loan32 in favor of the spouses Rosauro and Angelina and, thereafter, executed a Real Estate Mortgage33 with the said Spouses. Clearly, respondent bank was able to present sufficient evidence that the mortgage contract emanated from a valid and regular transaction. Respondent bank, before it accepted the collateral, exercised due diligence in verifying the ownership and status of the land and the improvements existing in the property mortgaged. From the above, it is crystal clear that no fraud can be attributed to respondent BD Bank in approving the Real Estate Mortgage and later on extrajudicially foreclosing the subject property.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 46144, dated May 30, 2001 and January 25, 2002, respectively, are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTAAssociate Justice

WE CONCUR:


Chairperson


ROBERTO A. ABADAssociate Justice




ANTONIO T. CARPIOAssociate JusticeSecond Division, Chairperson


Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


3.Source: http://www.lawphil.net/judjuris/juri2010/jul2010/gr_152266_2010.html

http://www.lawphil.net/judjuris/juri2010/jul2010/gr_152266_2010.html


Manila

SECOND DIVISION

A.M. No. RTJ-10-2242 August 6, 2010[Formerly OCA IPI No. 09-3149-RTJ]

ATTY. RAUL L. CORREA, Complainant, vs.JUDGE MEDEL ARNALDO B. BELEN, REGIONAL TRIAL COURT, BRANCH 36, CALAMBA CITY, LAGUNA, Respondent.

R E S O L U T I O N

NACHURA, J.:

Before us is a Verified-Complaint dated February 20, 2009 filed by complainant Atty. Raul L. Correa charging respondent Judge Medel Arnaldo B. Belen of the Regional Trial Court, Branch 36, Calamba City, Laguna of Misconduct.

Complainant narrated that he was one of the Co-Administrators appointed by the court in Special Proceedings No. 660-01C, entitled "Intestate Estate of Hector Tan." He revealed that during the hearing of the case, respondent Judge Belen disagreed with various items in the Administrator’s Report, including the audited Financial Report covering the said estate, and immediately ruled that they should be disallowed. Complainant added that respondent Judge Belen scolded their accountant, branded her as an incompetent, and threatened to sue her before the regulatory body overseeing all certified public accountants.

Complainant further claimed that, in the course of the proceedings, he was asked by respondent Judge Belen to stand up while the latter dictated his order on their Administrator’s Report. Respondent Judge Belen even rebuked him for some mistakes in managing the affairs of the estate, adding that it is regrettable "because Atty. Raul Correa is a U.P. Law Graduate and a Bar Topnotcher at that." Complainant regrets the actuations and statements of respondent Judge Belen, especially because the remark was uncalled for, a left-handed compliment, and a grave insult to his Alma Mater. Worse, respondent Judge Belen ousted complainant as co-administrator of the estate of Hector Tan.

On June 18, 2008, respondent Judge Belen issued an Order citing complainant for indirect contempt, allegedly with administrator Rose Ang Tee, for surreptitiously and unlawfully withdrawing from and emptying the account of the estate of Hector Tan. The June 18, 2008 Order contained snide remarks, viz—

x x x. The action of Rose Tee and Atty. Raul Correa is contumacious and direct challenge to lawful orders, and judicial process of this [c]ourt and malicious assault to the orderly

administration of justice, more specifically abhorrent the act and deed of Atty. Raul Correa, a U.P. Law alumnus and Bar Topnotcher, who as a lawyer knows very well and fully understands that such action violates his oath of office which the Court cannot countenance. x x x

Lastly, complainant insisted that he should not have been cited for indirect contempt because he had fully explained to the court that he had done his part as co-administrator in good faith, and that, through his efforts, the estate was able to meet the deadline for the latest Tax Amnesty Program of the government, consequently saving the estate the amount of no less than P35 Million.

In his Comment dated August 18, 2009, respondent Judge Belen argued that a judge, having the heavy burden to always conduct himself in accordance with the ethical tenets of honesty, probity and integrity, is duty bound to remind counsel of their duties to the court, to their clients, to the adverse party, and to the opposing counsel.

Respondent Judge Belen claimed that the conduct of complainant in handling the settlement of the estate of Hector Tan violated and breached the tenets and standards of the legal profession and of the Lawyer’s Oath. He alleged that, despite the clear tenor of a lawyer-client relationship, complainant associated himself as corresponding counsel and member of the Ongkiko Law Office, the counsel of the opposing party in the settlement proceedings.

Respondent Judge Belen further alleged that complainant, in connivance with Rose Ang Tee, surreptitiously released millions of pesos for the now deceased Purification Tee Tan and to themselves, in clear violation of complainant’s legal and fiduciary relationship and responsibilities as court-appointed co-administrator.

Both the Verified-Complaint and the Comment were referred to the Office of the Court Administrator (OCA) for evaluation, report, and recommendation.

In its Report dated March 10, 2010, the OCA found respondent Judge Belen guilty of conduct unbecoming of a judge for his use of intemperate language and inappropriate actions in dealing with counsels, such as complainant, appearing in his sala. The OCA said that respondent Judge Belen should have just ruled on the motion filed by complainant instead of opting for a conceited display of arrogance. The OCA also noted that the incidents subject of this administrative matter were not the first time that respondent Judge Belen had uttered intemperate remarks towards lawyers appearing before him. It noted that in Mane v. Belen,1 the Court found respondent Judge Belen guilty of conduct unbecoming of a judge and was reprimanded for engaging in a supercilious legal and personal discourse.

Based on its evaluation, the OCA recommended that (a) the administrative case against respondent Judge Belen be re-docketed as a regular administrative matter; and (b) respondent Judge Belen be fined in the amount of P10,000.00 for conduct unbecoming of a judge, with a stern warning that a repetition of the same or similar act shall be dealt with more severely.

The findings and the recommendations of the OCA are well taken and, thus, should be upheld.

Indeed, the New Code of Judicial Conduct for the Philippine Judiciary exhorts members of the judiciary, in the discharge of their duties, to be models of propriety at all times. Canon 4 mandates –

CANON 4PROPRIETY

Propriety and the appearance of propriety are essential to the performance of all the activities of a judge.

SECTION 1. Judges shall avoid impropriety and the appearance of impropriety in all of their activities.

x x x

SEC. 6. Judges, like any other citizen, are entitled to freedom of expression, belief, association and assembly, but in exercising such rights, they shall always conduct themselves in such a manner as to preserve the dignity of the judicial office and the impartiality and independence of the judiciary.

The Code also calls upon judges to ensure equality of treatment to all before the courts. More specifically, Section 3, Canon 5 on Equality provides –

SEC. 3. Judges shall carry out judicial duties with appropriate consideration for all persons, such as the parties, witnesses, lawyers, court staff and judicial colleagues, without differentiation on any irrelevant ground, immaterial to the proper performance of such duties.

We join the OCA in noting that the incidents narrated by complainant were never denied by respondent Judge Belen, who merely offered his justification and asserted counter accusations against complainant.

Verily, we hold that respondent Judge Belen should be more circumspect in his language in the discharge of his duties. A judge is the visible representation of the law. Thus, he must behave, at all times, in such a manner that his conduct, official or otherwise, can withstand the most searching public scrutiny. The ethical principles and sense of propriety of a judge are essential to the preservation of the people’s faith in the judicial system.2

A judge must consistently be temperate in words and in actions. Respondent Judge Belen’s insulting statements, tending to project complainant’s ignorance of the laws and procedure, coming from his inconsiderate belief that the latter mishandled the cause of his client is obviously and clearly insensitive, distasteful, and inexcusable. Such abuse of power and authority could only invite disrespect from counsels and from the public. Patience is one virtue that members of the bench should practice at all times, and courtesy to everyone is always called for.1avvphi1

Conduct unbecoming of a judge is classified as a light offense under Section 10, Rule 140 of the Revised Rules of Court, penalized under Section 11 (c) thereof by any of the following: (1) a Fine of not less than P1,000.00 but not exceeding P10,000.00; (2) Censure; (3) Reprimand; and (4) Admonition with warning. Inasmuch as this is not respondent Judge Belen’s first offense, the penalty of fine of P10,000.00 is deemed appropriate.

WHEREFORE, we find Judge Medel Arnaldo B. Belen, Presiding Judge of the Regional Trial Court of Calamba City, Branch 36, GUILTY of Conduct Unbecoming of a Judge, and FINE him P10,000.00, with a stern warning that a repetition of the same or similar act shall be dealt with more severely.

SO ORDERED.


WE CONCUR:


Chairperson




4.Source: http://www.lawphil.net/judjuris/juri2010/aug2010/am_rtj-10-2242_2010.html

http://www.lawphil.net/judjuris/juri2010/aug2010/am_rtj-10-2242_2010.html


Manila

THIRD DIVISION

G.R. No. 161746 September 1, 2010

EUGENIO FELICIANO, substituted by his wife CEFERINA DE PALMA- FELICIANO, ANGELINA DE LEON, representing the heirs of ESTEBAN FELICIANO, TRINIDAD VALIENTE, AND BASILIA TRINIDAD, represented by her son DOMINADOR T. FELICIANO, Petitioners, vs.PEDRO CANOZA, DELIA FELICIANO, ROSAURO FELICIANO, ELSA FELICIANO AND PONCIANO FELICIANO, Respondents.

D E C I S I O N

VILLARAMA, JR., J.:

Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to annul and set aside the Decision1 dated June 26, 2003 and Resolution2 dated January 15, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61888. The CA had reversed the Decision3 dated August 3, 1998 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 11, in Civil Case No. 819-M-93 and dismissed petitioners’ complaint on the ground of prescription.

The facts are as follows:

When Antonio Feliciano passed away on May 20, 1930, he left behind his only property, a parcel of land located at Bunga4 Mayor, Bustos, Bulacan. The land had an area of 1,125 square meters and was evidenced by Tax Declaration No. 14025 in his name. On March 28, 1972, Leona, Maria, Pedro and Salina, all surnamed Feliciano, declared themselves to be the only surviving heirs of Antonio Feliciano, with the exception of Salina. They executed an extrajudicial settlement of Antonio Feliciano’s estate6 and appropriated among themselves the said parcel of land, to the exclusion of the heirs of Esteban Feliciano and Doroteo Feliciano, deceased children of Antonio Feliciano. On even date, Leona, Maria, Pedro and Salina executed a deed of absolute sale or Kasulatan sa Ganap Na Bilihan over the property in favor of the late Jacinto Feliciano (Pedro’s portion), Felisa Feliciano (Salina’s portion) and Pedro Canoza (Leona and Maria’s portions).7

During his lifetime, Jacinto Feliciano applied for a free patent over the portion of land he bought, declaring that the same was a public land, first occupied and cultivated by Pedro Feliciano.8 Jacinto was issued Free Patent No. (IV-4) 012293 on November 28, 19779 and the same was forwarded to the Register of Deeds of Malolos, Bulacan, but unfortunately, it was burned on March 7, 1987. Pedro Canoza, for his part, also applied for a free patent over the portion of land

which he bought, claiming that the same was public land, first occupied and cultivated by Leona and Maria Feliciano.10 He was issued Free Patent No. (IV-4) 012292, now covered by Original Certificate of Title (OCT) No. P-364,11 on February 23, 1979.

On October 18, 1993, Eugenio Feliciano and Angelina Feliciano-de Leon, surviving heirs of the late Esteban Feliciano, and Trinidad Feliciano-Valiente and Basilia Feliciano-Trinidad, surviving children of the late Doroteo Feliciano, filed a complaint12 against Salina Feliciano, Felisa Feliciano, Pedro Canoza and the heirs of the late Jacinto Feliciano, namely Delia, Rosauro, Elsa, Nardo and Ponciano, all surnamed Feliciano, for the Declaration of Nullity of Documents and Title, Recovery of Real Property and Damages. They alleged that the settlement of the estate and sale were done without their participation and consent as heirs of Esteban and Doroteo. Likewise, they averred that the ancestral home of the Felicianos is erected on the subject property and that they have occupied the same since birth. Canoza and Jacinto falsely declared that the property was not occupied, so their titles to the property should be declared null and void on the ground that they have made false statements in their respective applications for free patent.

On November 4, 1993, before an Answer could be filed, the petitioners amended their complaint to include the allegation that they sought to recover the shares of their fathers, Esteban and Doroteo, which they could have acquired as heirs of Antonio Feliciano.13

In their Answer,14 respondent Pedro Canoza and his spouse, respondent Delia Feliciano, alleged that they were buyers in good faith and for value. They likewise contended that assuming that there was preterition of legal heirs, they never took part in it. As affirmative defenses, they alleged that the complaint failed to state a cause of action; the lower court had no jurisdiction as the subject of the case were free patents and therefore prior exhaustion of administrative remedies was required; the case was prematurely filed; no effort was exerted towards a settlement; plaintiffs’ right has prescribed; Eugenio Feliciano was a mere squatter who should be ordered to vacate; the deed of sale was validly, genuinely and duly executed; Eugenio and Angelina were guilty of misleading the court because there were other heirs who were indispensable parties but who were not included; and Presidential Decree No. 1508 or the Revised Katarungang Pambarangay Law was not resorted to by plaintiffs.

Respondents Rosauro Feliciano, Elsa Feliciano and Ponciano Feliciano likewise filed an Answer15 containing the same allegations and defenses as respondents Pedro Canoza and Delia Feliciano. The other defendants, Salina Feliciano, Felisa Feliciano and Nardo Feliciano were declared in default.

On August 3, 1998, the trial court rendered a Decision, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows:

1. Declaring the extra-judicial settlement of estate of Antonio Feliciano null and void;

2. Declaring the sale of the property in question to Pedro Canoza, Felisa Feliciano and Jacinto Feliciano null and void;

3. Declaring the original certificate of Title No. 364 in the name of Pedro Canoza and the certificates of titles in the name of defendants over Lot 1874-Cad-344, Bustos Cadastre (Tax Declaration No. 1402) as null and void;

4. Ordering defendants to reconvey ownership and possession of said property to plaintiffs subject to a just and equitable partition thereof by and between all interested parties.

No pronouncement as to cost.

SO ORDERED.16

The trial court explained that by operation of law, the plaintiffs (herein petitioners) have as much right as Leona, Maria, Pedro and Salina Feliciano to inherit the property in question, and they cannot be deprived of their right unless by disinheritance for causes set forth in the law. When Leona Feliciano, Pedro Feliciano, Maria Feliciano and Salina Feliciano appropriated the disputed lot solely to themselves through the extrajudicial settlement of estate, they committed a fraudulent act. To the extent that Doroteo and Esteban were deprived of their rightful share, the said out-of-court settlement was annullable, said the trial court. The trial court also declared that Pedro Canoza was not a buyer in good faith of Leona and Maria’s shares. Records show that Pedro Canoza’s live-in partner, Delia Feliciano, was a relative of the petitioners and the other defendants; thus, he could be reasonably charged with the knowledge of petitioners’ status vis-à-vis the subject property. The acquisition by Canoza and Jacinto Feliciano of free patent titles over portions of the contested lot also did not legitimize their ownership thereof, as they acquired no greater rights over the property than their predecessors-in-interest, having merely stepped into their shoes.17

Aggrieved, respondents appealed to the CA with the following assignment of errors:

I. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ADMITTING IN EVIDENCE THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]

II. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND VOID THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]

III. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND VOID THE DEED OF SALE (EXHIBIT "C") IN FAVOR OF JACINTO FELICIANO, FELISA FELICIANO AND PEDRO CANOZA[;]

IV. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING O.C.T. NO. 364 IN THE NAME OF PEDRO CANOZA AND CERTIFICATES OF TITLE OF DEFENDANTS AS NULL AND VOID[; AND]

V. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ORDERING DEFENDANTS TO RECONVEY OWNERSHIP AND POSSESSION OF THE SUBJECT PROPERTY TO PLAINTIFFS SUBJECT TO A JUST AND EQUITABLE PARTITION THEREOF BY AND BETWEEN ALL INTERESTED PARTIES.18

On June 26, 2003, the appellate court rendered the assailed Decision reversing the trial court’s decision. The CA held,

WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the Decision dated August 3, 1998 of the Regional Trial Court, Branch 11 (XI), Malolos, Bulacan in Civil Case No. 819-M-93 is hereby REVERSED AND SET ASIDE and plaintiffs-appellees’ complaint is ordered DISMISSED for being time-barred.

SO ORDERED.19

The CA ruled that prescription had set in, citing the case of Pedrosa v. Court of Appeals,20 which held that the applicable prescriptive period to annul a deed of extrajudicial settlement is four (4) years from the discovery of the fraud. It reasoned that when petitioners filed the instant complaint for the annulment of the extrajudicial settlement of Antonio Feliciano’s estate, more than four (4) years had elapsed from the issuance of the free patents. As regards the portion claimed by the late Jacinto Feliciano, sixteen (16) years had elapsed from the time the free patent was issued to him before petitioners filed the complaint, while in the case of Canoza, fourteen (14) years had elapsed from the issuance of the free patent in Canoza’s favor. Hence, according to the CA, the action for the annulment of the documents had prescribed.

Petitioners filed a motion for reconsideration of the aforesaid Decision but it was denied by the CA in the Resolution dated January 15, 2004 for lack of merit.

Hence, this petition.

The grounds relied upon by the petitioners are the following:

A. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN GRANTING THE APPEAL BY ORDERING THE DISMISSAL OF THE COMPLAINT ON GROUND OF PRESCRIPTION OF ACTION, DESPITE THE FACT THAT THE ISSUE OF PRESCRIPTION OF ACTION HAS NOT BEEN RAISED ON APPEAL AS AN ISSUE, NOR ASSIGNED AS AN ERROR, NOR DEFINED IN THE PRE-TRIAL ORDER AS AMONG THE ISSUES TO BE RESOLVED;

B. ASSUMING THAT PRESCRIPTION OF ACTION MAY BE TAKEN AS A GROUND FOR DISMISSING THE COMPLAINT EVEN IF NOT RAISED ON APPEAL, NOR ASSIGNED AS AMONG THE ERRORS COMMITTED, THE COURT

OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE ACTION PRESCRIBES IN FOUR YEARS, OR IN NOT HOLDING THAT THE ACTION IS IMPRESCRIPTIBLE;

C. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT AFFIRMING THE DECISION OF THE TRIAL COURT.21

Essentially, the issue for our resolution is whether the CA erred in reversing the trial court’s decision.

Petitioners allege that the CA gravely erred in granting the appeal and in dismissing the complaint on the ground of prescription of action because that issue was never raised on appeal, nor defined as one (1) of the issues outlined and limited in the pre-trial order.

We do not agree.

While respondents have not assigned the defense of prescription in their appeal before the CA, they raised such defense in their December 1, 1993 Answer as one (1) of their affirmative defenses.22 In their brief before the CA, respondents specifically prayed for the reliefs mentioned in their respective answers before the trial court. Thus, by reference, they are deemed to have adopted the defense of prescription, and could not properly be said to have waived the defense of prescription.

Moreover, Rule 9, Section 1 of the 1997 Rules of Civil Procedure, as amended, provides that when it appears from the pleadings or the evidence on record that the action is already barred by the statute of limitations, the court shall dismiss the claim. Thus, in Gicano v. Gegato,23 we held:

We have ruled that trial courts have authority and discretion to dismiss an action on the ground of prescription when the parties’ pleadings or other facts on record show it to be indeed time-barred x x x; and it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative defense; or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or where a defendant has been declared in default. What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on the record: either in the averments of the plaintiffs complaint, or otherwise established by the evidence. (Underscoring supplied.)

But did the CA nonetheless commit error when it held that the applicable prescriptive period is four (4) years?

Petitioners argue that the CA erroneously treated the action they filed at the trial court as one (1) for annulment of the extrajudicial settlement and applied the four (4)-year prescriptive period in dismissing the same. They contend that the action they filed was one (1) for Declaration of Nullity of Documents and Titles, Recovery of Real Property and Damages, and as such, their action was imprescriptible pursuant to Article 141024 of the Civil Code.

Respondents, for their part, maintain that the CA did not err in holding that the deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of the partition and did not consent thereto, is merely fraudulent and not void. They stress that the action to rescind the partition based on fraud prescribes in four (4) years counted from the date of registration, which is constructive notice to the whole world.

We affirm the ruling of the CA. As the records show, the heirs of Doroteo and Esteban did not participate in the extrajudicial partition executed by Salina with the other compulsory heirs, Leona, Maria and Pedro. Undeniably, the said deed was fraudulently obtained as it deprived the known heirs of Doroteo and Esteban of their shares in the estate. A deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and vicious.25 Hence, an action to set it aside on the ground of fraud could be instituted. Such action for the annulment of the said partition, however, must be brought within four (4) years from the discovery of the fraud.1avvphi1

In Gerona v. De Guzman,26 respondents therein executed a deed of extrajudicial settlement declaring themselves to be the sole heirs of the late Marcelo de Guzman. They secured new transfer certificates of title in their own names, thereby excluding the petitioners therein from the estate of the deceased. The petitioners brought an action for the annulment of the said deed upon the ground that the same is tainted with fraud. The Court held,

Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial settlement" upon the ground of fraud in the execution thereof, the action therefor may be filed within four (4) years from the discovery of the fraud (Mauricio v. Villanueva, L-11072, September 24, 1959). Such discovery is deemed to have taken place, in the case at bar, on June 25, 1948, when said instrument was filed with the Register of Deeds and new certificates of title were issued in the name of respondents exclusively, for the registration of the deed of extra-judicial settlement constitute constructive notice to the whole world.27 (Emphasis and underscoring supplied.)

Evidently, the applicable prescriptive period to institute the action to annul the deed of extrajudicial settlement was four (4) years counted from the discovery of fraud as held in the case of Gerona v. De Guzman.28 However, the records show that petitioners’ complaint was filed only on October 18, 1993, or almost sixteen (16) years after Jacinto Feliciano was issued Free Patent No. (IV-4) 012293 on November 28, 1977, and almost fourteen (14) years from the time Pedro Canoza was issued OCT No. P-364 on November 28, 1979. As petitioners are deemed to have obtained constructive notice of the fraud upon the registration of the Free Patent, they clearly failed to institute the present civil action within the allowable period. The same result obtains even if their complaint is treated as one (1) essentially for reconveyance as more than ten (10) years have passed since petitioners’ cause of action accrued. The CA committed no error in dismissing their complaint.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated June 26, 2003 and Resolution dated January 15, 2004, of the Court of Appeals in CA-G.R. CV No. 61888 are AFFIRMED.

With costs against petitioners.

SO ORDERED.


WE CONCUR:


Chairperson


MARIANO C. DEL CASTILLO*

Associate Justice

MARIA LOURDES P. A. SERENOAssociate Justice



CONCHITA CARPIO MORALESAssociate JusticeChairperson, Third Division


Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


5.Source: http://www.lawphil.net/judjuris/juri2010/sep2010/gr_161746_2010.html

http://www.lawphil.net/judjuris/juri2010/sep2010/gr_161746_2010.html


Baguio City

FIRST DIVISION

G.R. No. 188471 April 20, 2010

FRANCISCO ALONSO, substituted by MERCEDES V. ALONSO, TOMAS V. ALONSO and ASUNCION V. ALONSO, Petitioners, vs.CEBU COUNTRY CLUB, INC., Respondent,REPUBLIC OF THE PHILIPPINES, represented by the OFFICE OF THE SOLICITOR GENERAL, Public Respondent.

D E C I S I O N

BERSAMIN, J.:

By petition for review on certiorari, the petitioners appeal the order dated December 28, 2007 of the Regional Trial Court (RTC), Branch 20, in Cebu City, denying the motion for issuance of writ of execution of the Office of the Solicitor General (OSG) in behalf of the Government, and the order dated April 24, 2009, denying their motion for reconsideration filed against the first order.

Antecedents

The antecedent facts are those established in Alonso v. Cebu Country Club,1 which follow.

Petitioner Francisco M. Alonso (Francisco) was the only son and sole heir of the late spouses Tomas N. Alonso and Asuncion Medalle. Francisco died during the pendency of this case, and was substituted by his legal heirs, namely: his surviving spouse, Mercedes V. Alonso, his son Tomas V. Alonso (Tomas) and his daughter Asuncion V. Alonso.2

In 1992, Francisco discovered documents showing that his father Tomas N. Alonso had acquired Lot No. 727 of the Banilad Friar Lands Estate from the Government in or about the year 1911; that the original vendee of Lot No. 727 had assigned his sales certificate to Tomas N. Alonso, who had been consequently issued Patent No. 14353; and that on March 27, 1926, the Director of Lands had executed a final deed of sale in favor of Tomas N. Alonso, but the final deed of sale had not been registered with the Register of Deeds because of lack of requirements, like the approval of the final deed of sale by the Secretary of Agriculture and Natural Resources, as required by law.3

Francisco subsequently found that the certificate of title covering Lot No. 727-D-2 of the Banilad Friar Lands Estate had been "administratively reconstituted from the owner’s duplicate" of Transfer Certificate of Title (TCT) No. RT-1310 in the name of United Service Country Club,

Inc., the predecessor of respondent Cebu Country Club, Inc (Cebu Country Club); and that upon the order of the court that had heard the petition for reconstitution of the TCT, the name of the registered owner in TCT No. RT-1310 had been changed to that of Cebu Country Club; and that the TCT stated that the reconstituted title was a transfer from TCT No. 1021.4

It is relevant to mention at this point that the current TCT covering Lot 727-D-2 in the name of Cebu Country Club is TCT No. 94905, which was entered in the land records of Cebu City on August 8, 1985.5

With his discoveries, Francisco formally demanded upon Cebu Country Club to restore the ownership and possession of Lot 727-D-2 to him. However, Cebu Country Club denied Francisco’s demand and claim of ownership, and refused to deliver the possession to him.6

On September 25, 1992, Francisco commenced against Cebu Country Club in the RTC in Cebu City an action for the declaration of nullity and non-existence of deed/title, the cancellation of certificates of title, and the recovery of property. On November 5, 1992, Cebu Country Club filed its answer with counterclaim.7

On May 7, 1993, the RTC decided in favor of Cebu Country Club.

Both parties appealed to the Court of Appeals (CA), which ultimately affirmed the RTC on March 31, 1997. Thus, Francisco filed a motion for reconsideration, which was denied on October 2, 1997.8

Nothing daunted, Francisco appealed to this Court (G.R. No. 130876).

On January 31, 2002, this Court decided G.R. No. 130876, decreeing:

WHEREFORE, we DENY the petition for review. However, we SET ASIDE the decision of the Court of Appeals and that of the Regional Trial Court, Cebu City, Branch 08.

IN LIEU THEREOF, we DISMISS the complaint and counterclaim of the parties in Civil Cases No. CEB 12926 of the trial court. We declare that Lot No. 727 D-2 of the Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251, 232, and 253 legally belongs to the Government of the Philippines. 9

The petitioners sought a reconsideration. On December 5, 2003, however, the Court denied their motion for reconsideration.10 Hence, the decision in G.R. No. 130876 became final and executory.

In late 2004, the Government, through the OSG, filed in the RTC a motion for the issuance of a writ of execution.11 Cebu Country Club opposed the motion for the issuance of a writ of execution in due course.

Later on, the proceedings on the OSG’s motion for the issuance of a writ of execution at the instance of Cebu Country Club in deference to the on-going hearings being conducted by the

Committee on Natural Resources of the House of Representatives on a proposed bill to confirm the TCTs and reconstituted titles covering the Banilad Friar Lands Estate in Cebu City.12 The Congress ultimately enacted a law to validate the TCTs and reconstituted titles covering the Banilad Friar Lands Estate in Cebu City. This was Republic Act No. 9443,13 effective on July 27, 2007.

Thereafter, both Cebu Country Club and the OSG brought the passage of R.A. No. 9443 to the attention of the RTC for its consideration in resolving the OSG’s motion for the issuance of a writ of execution.14 On December 28, 2007, therefore, the RTC denied the OSG’s motion for the issuance of a writ of execution through the first appealed order.15

The petitioners filed a motion for reconsideration dated February 1, 2008, questioning the denial of the OSG’s motion for the issuance of a writ of execution.16

Upon being directed by the RTC to comment on the petitioners’ motion for reconsideration, the OSG manifested in writing that the Government was no longer seeking the execution of the decision in G.R. No. 130876, subject to its reservation to contest any other titles within the Banilad Friar Lands Estate should clear evidence show such titles as having been obtained through fraud.17

After the filing of the OSG’s comment, the RTC issued the second appealed order, denying the petitioners’ motion for reconsideration, giving the following reasons:

1. The party who had a direct interest in the execution of the decision and the reconsideration of the denial of the motion for execution was the Government, represented only by the OSG; hence, the petitioners had no legal standing to file the motion for reconsideration, especially that they were not authorized by the OSG for that purpose;

2. R.A. No. 9443 "confirms and declares as valid" all "existing" TCTs and reconstituted titles; thereby, the State in effect waived and divested itself of whatever title or ownership over the Banilad Friar Lands Estate in favor of the registered owners thereof, including Lot 727 D-2; and

3. The situation of the parties had materially changed, rendering the enforcement of the final and executory judgment unjust, inequitable, and impossible, because Cebu Country Club was now recognized by the State itself as the absolute owner of Lot 727 D-2.18

Hence, the petitioners appeal by petition for review on certiorari.

Contentions of the Petitioners

The petitioners challenge the orders dated December 28, 2007 and April 29, 2009, because:

1. R.A. No. 9443 did not improve Cebu Country Club’s plight, inasmuch as R.A. No. 9443 presupposed first a sales certificate that lacked the required signature, but Cebu

Country Club did not have such sales certificate. Moreover, the titleholders were in fact the owners of the lands covered by their respective titles, which was not true with Cebu Country Club due to its being already adjudged with finality to be not the owner of Lot 727-D-2. Lastly, Cebu Country Club’s title was hopelessly defective, as found by the Supreme Court itself;

2. The doctrine of law of the case barred the application of R.A. No. 9443 to Cebu Country Club;

3. The RTC’s declaration that R.A. No. 9443 confirmed Cebu Country Club as the absolute owner of Lot 727-D-2 despite the prior and final judgment of the Supreme Court that Cebu Country Club was not the owner was unconstitutional, because it virtually allowed the legislative review of the Supreme Court’s decision rendered against Cebu Country Club;

4. The use of R.A. No. 9443 as a waiver on the part of the Government vis-à-vis Cebu Country Club was not only misplaced but downrightly repugnant to Act 1120, the law governing the legal disposition and alienation of Friar Lands; and

5. The petitioners had the requisite standing to question the patent errors of the RTC, especially in the face of the unholy conspiracy between the OSG and Cebu Country Club, on the one hand, and, on the other hand, the passage of R.A. No. 9443 and DENR Memorandum No. 16, both of which in fact made their predecessor Tomas N. Alonso’s sales certificate and patent valid.19

Issues

The Court confronts and resolves the following issues, to wit:

1. Whether or not the petitioners were the real parties-in-interest to question the denial by the RTC of the OSG’s motion for the issuance of a writ of execution;

2. Whether or not R.A. No. 9443 gave the petitioners a legal interest to assail the RTC’s orders; and

3. Whether or not the petitioners can appeal by petition for review on certiorari in behalf of the OSG.

Ruling

The petition for review is denied due course.

A. Preliminary Considerations:

Petitioners contravene the hierarchy of courts, and the petition is fatally defective

Before delving on the stated issues, the Court notes that the petitioners are guilty of two violations that warrant the immediate dismissal of the petition for review on certiorari.

The first refers to the petitioners’ breach of the hierarchy of courts by coming directly to the Court to appeal the assailed issuances of the RTC via petition for review on certiorari. They should not have done so, bypassing a review by the Court of Appeals (CA), because the hierarchy of courts is essential to the efficient functioning of the courts and to the orderly administration of justice. Their non-observance of the hierarchy of courts has forthwith enlarged the docket of the Court by one more case, which, though it may not seem burdensome to the layman, is one case too much to the Court, which has to devote time and effort in poring over the papers submitted herein, only to discover in the end that a review should have first been made by the CA. The time and effort could have been dedicated to other cases of importance and impact on the lives and rights of others.

The hierarchy of courts is not to be lightly regarded by litigants. The CA stands between the RTC and the Court, and its establishment has been precisely to take over much of the work that used to be done by the Court. Historically, the CA has been of the greatest help to the Court in synthesizing the facts, issues, and rulings in an orderly and intelligible manner and in identifying errors that ordinarily might escape detection. The Court has thus been freed to better discharge its constitutional duties and perform its most important work, which, in the words of Dean Vicente G. Sinco,20 "is less concerned with the decision of cases that begin and end with the transient rights and obligations of particular individuals but is more intertwined with the direction of national policies, momentous economic and social problems, the delimitation of governmental authority and its impact upon fundamental rights."21

The need to elevate the matter first to the CA is also underscored by the reality that determining whether the petitioners were real parties in interest entitled to bring this appeal against the denial by the RTC of the OSG’s motion for the issuance of a writ of execution was a mixed question of fact and law. As such, the CA was in the better position to review and to determine. In that regard, the petitioners violate Section 1, Rule 45 of the 1997 Rules of Civil Procedure, which demands that an appeal by petition for review on certiorari be limited to questions of law.22

The second violation concerns the omission of a sworn certification against forum shopping from the petition for review on certiorari. Section 4, Rule 45 of the 1997 Rules of Civil Procedure requires that the petition for review should contain, among others, the sworn certification on the undertakings provided in the last paragraph of Section 2, Rule 42 of the 1997 Rules of Civil Procedure, viz:

Section 2. xxx

The petitioner shall also submit together with the petition a certification under oath that he has not theretofore commenced any other action involving the same issues in the Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such other action or proceeding, he must state the status of the same; and if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, he undertakes to

promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days therefrom. (n)

Only petitioner Tomas V. Alonso has executed and signed the sworn certification against forum shopping attached to the petition. Although neither of his co-petitioners – Mercedes V. Alonso and Asuncion V. Alonso – has joined the certification, Tomas did not present any written express authorization in his favor authorizing him to sign the certification in their behalf. The signing of the certification by only one of the petitioners could not be presumed to reflect the personal knowledge by his co-petitioners of the filing or non-filing of any similar action or claim.23 Hence, the failure of Mercedes and Asuncion to sign and execute the certification along with Tomas warranted the dismissal of their petition.24

B. Petitioners are not proper parties to appeal and assail the order of the RTC

The petitioners are relentless in insisting that their claim to Lot No. 727-D-2 of the Banilad Friar Lands Estate should be preferred to that of Cebu Country Club, despite the final judgment in G.R. No. 130876 being adverse to their claim. Their insistence raises the need to resolve once and for all whether or not the petitioners retained any legal right to assert over Lot No. 727-D-2 following the Government’s manifest desistance from the execution of the judgment in G.R. No. 130876 against Cebu Country Club.

The above-noted defects of the petition for review notwithstanding, therefore, the Court has now to address and resolve the stated issues on the sole basis of the results the Court earlier reached in G.R. No. 130876. In this regard, whether or not the petitioners are the proper parties to bring this appeal is decisive.

After careful consideration, the Court finds that the cause of the petitioners instantly fails.

In G.R. No. 130876, the Court found that the petitioners did not validly acquire ownership of Lot No. 727-D-2, and declared that Lot No. 727 D-2 legally belonged to the Government, thus:

The second issue is whether the Court of Appeals erred in ruling that the Cebu Country Club, Inc. is owner of Lot No. 727.

Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that petitioners could claim was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The sales patent, however, and even the corresponding deed of sale were not registered with the Register of Deeds and no title was ever issued in the name of the latter. This is because there were basic requirements not complied with, the most important of which was that the deed of sale executed by the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources. Hence, the deed of sale was void. "Approval by the Secretary of Agriculture and Commerce is indispensable for the validity of the sale." Moreover, Cebu Country Club, Inc. was in possession of the land since 1931, and had been paying the real estate taxes thereon based on tax declarations in its name with the title number indicated thereon. Tax receipts and declarations of ownership for taxation purposes are strong evidence of ownership. This Court has ruled that although tax declarations or

realty tax payments are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind will be paying taxes for a property that is not in his actual or constructive possession.

Notwithstanding this fatal defect, the Court of Appeals ruled that "there was substantial compliance with the requirement of Act No. 1120 to validly convey title to said lot to Tomas N. Alonso."

On this point, the Court of Appeals erred.

Under Act No. 1120, which governs the administration and disposition of friar lands, the purchase by an actual and bona fide settler or occupant of any portion of friar land shall be "agreed upon between the purchaser and the Director of Lands, subject to the approval of the Secretary of Agriculture and Natural Resources (mutatis mutandis)."

In his Memorandum filed on May 25, 2001, the Solicitor General submitted to this Court certified copies of Sale Certificate No. 734, in favor of Leoncio Alburo, and Assignment of Sale Certificate No. 734, in favor of Tomas N. Alonso. Conspicuously, both instruments do not bear the signature of the Director of Lands and the Secretary of the Interior. They also do not bear the approval of the Secretary of Agriculture and Natural Resources.

Only recently, in Jesus P. Liao v. Court of Appeals, the Court has ruled categorically that approval by the Secretary of Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such approval made the sale null and void ab-initio. Necessarily, there can be no valid titles issued on the basis of such sale or assignment. Consequently, petitioner Francisco’s father did not have any registerable title to the land in question. Having none, he could not transmit anything to his sole heir, petitioner Francisco Alonso or the latter’s heirs.

In a vain attempt at showing that he had succeeded to the estate of his father, on May 4, 1991, petitioner Francisco Alonso executed an affidavit adjudicating the entire estate to himself (Exh. "Q"), duly published in a newspaper of general circulation in the province and city of Cebu (Exh. "Q-1"). Such affidavit of self-adjudication is inoperative, if not void, not only because there was nothing to adjudicate, but equally important because petitioner Francisco did not show proof of payment of the estate tax and submit a certificate of clearance from the Commissioner of Internal Revenue. Obviously, petitioner Francisco has not paid the estate taxes.

Consequently, we rule that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latter’s heirs are the lawful owners of Lot No. 727 in dispute. xxx.25

The pronouncement in G.R. No. 130876 renders beyond dispute that the non-execution of the judgment would not adversely affect the petitioners, who now hold no right whatsoever in Lot No. 727-D-2. Otherwise put, they are not the proper parties to assail the questioned orders of the RTC, because they stand to derive nothing from the execution of the judgment against Cebu Country Club.

Every action must be prosecuted or defended in the name of the real party in interest, unless otherwise authorized by law or the rules.26 A real party in interest is one who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.27 "Interest" within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. The rule refers to a real or present substantial interest, as distinguished from a mere expectancy; or from a future, contingent, subordinate, or consequential interest.28 One having no right or interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action.29

Thus, an appeal, like this one, is an action to be prosecuted by a party in interest before a higher court. In order for the appeal to prosper, the litigant must of necessity continue to hold a real or present substantial interest that entitles him to the avails of the suit on appeal. If he does not, the appeal, as to him, is an exercise in futility. So it is with the petitioners!

In contrast, the Government, being the legal owner of Lot No. 727-D-2, is the only party adversely affected by the denial, and is the proper party entitled to assail the denial.30 However, its manifest desistance from the execution of the decision effectively barred any challenge against the denial, for its non-appeal rendered the denial final and immutable.

C. R.A. No. 9443 gives petitioners no legal interest to assail the denial of the motion for execution

Section 1 of R.A. No. 9443 provides:

Section 1. All existing Transfer Certificates of Title and Reconstituted Certificates of Title duly issued by the Register of Deeds of Cebu Province and/or Cebu City covering any portion of the Banilad Friar Lands Estate, notwithstanding the lack of signatures and/or approval of the then Secretary of Interior (later Secretary of Agriculture and Natural Resources) and/or the then Chief of the Bureau of Public Lands (later Director of Public Lands) in the copies of the duly executed Sale Certificates and Assignments of Sale Certificates, as the case may be, now on file with the Community Environment and Natural Resources Office (CENRO), Cebu City, are hereby declared as valid titles and the registered owners recognized as absolute owners thereof.

The law expressly declares as valid "(a)ll existing Transfer Certificates of Title and Reconstituted Certificates of Title duly issued by the Register of Deeds of Cebu Province and/or Cebu City covering any portion of the Banilad Friar Lands Estate," and recognizes the registered owners as absolute owners. To benefit from R.A. No. 9443, therefore, a person must hold as a condition precedent a duly issued Transfer Certificate of Title or a Reconstituted Certificate of Title.

Although Lot 727-D-2 was earlier declared to be owned by the Government in G.R. No. 130876, R.A. No. 9443 later validated Cebu Country Club’s registered ownership due to its holding of TCT No. RT-1310 (T-11351) in its own name. As the OSG explained in its manifestation in lieu of comment31 (filed in the RTC vis-à-vis the petitioners’ motion for reconsideration against the

RTC’s denial of the OSG’s motion for issuance of a writ of execution), the enactment of R.A. No. 9443 had "mooted the final and executory Decision of the Supreme Court in "Alonso v. Cebu Country Club, Inc.," docketed as G.R. No. 130876, which declared the Government as the owner of Lot 727-D-2 based on the absence of signature and approval of the then Secretary of Interior;" and that the decision in G.R. No. 130876 had "ceased to have any practical effect" as the result of the enactment of R.A. No. 9443, and had thereby become "academic."32

On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another land, we agree with the Court of Appeals that there is nothing fraudulent with the fact that Cebu Country Club, Inc.’s reconstituted title bears the same number as the title of another parcel of land. This came about because under General Land Registration Office (GLRO) Circular No. 17, dated February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3, dated August 5, 1946, which were in force at the time the title was reconstituted on July 26, 1948, the titles issued before the inauguration of the Philippine Republic were numbered consecutively and the titles issued after the inauguration were numbered also consecutively starting with No. 1, so that eventually, the titles issued before the inauguration were duplicated by titles issued after the inauguration of the Philippine Republic. xxx.

xxx

Petitioners next argue that the reconstituted title of Cebu Country Club, Inc. had no lawful source to speak of; it was reconstituted through extrinsic and intrinsic fraud in the absence of a deed of conveyance in its favor. In truth, however, reconstitution was based on the owner’s duplicate of the title, hence, there was no need for the covering deed of sale or other modes of conveyance. Cebu Country Club, Inc. was admittedly in possession of the land since long before the Second World War, or since 1931. In fact, the original title (TCT No. 11351) was issued to the United Service Country Club, Inc. on November 19, 1931 as a transfer from Transfer Certificate of Title No. 1021. More importantly, Cebu Country Club, Inc. paid the realty taxes on the land even before the war, and tax declarations covering the property showed the number of the TCT of the land. Cebu Country Club, Inc. produced receipts showing real estate tax payments since 1949. On the other hand, petitioner failed to produce a single receipt of real estate tax payment ever made by his father since the sales patent was issued to his father on March 24, 1926. Worse, admittedly petitioner could not show any [T]orrens title ever issued to Tomas N. Alonso, because, as said, the deed of sale executed on March 27, 1926 by the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources and could not be registered. "Under the law, it is the act of registration of the deed of conveyance that serves as the operative act to convey the land registered under the Torrens system. The act of registration creates constructive notice to the whole world of the fact of such conveyance." On this point, petitioner alleges that Cebu Country Club, Inc. obtained its title by fraud in connivance with personnel of the Register of Deeds in 1941 or in 1948, when the title was administratively reconstituted. Imputations of fraud must be proved by clear and convincing evidence. Petitioner failed to adduce evidence of fraud. In an action for re-conveyance based on fraud, he who charges fraud must prove such fraud in obtaining a title. "In this jurisdiction, fraud is never presumed." The strongest suspicion cannot sway judgment or overcome the presumption of regularity. "The sea of suspicion has no shore, and the court that embarks upon it is without rudder or compass."

Worse, the imputation of fraud was so tardily brought, some forty-four (44) years or sixty-one (61) years after its supposed occurrence, that is, from the administrative reconstitution of title on July 26, 1948, or from the issuance of the original title on November 19, 1931, that verification is rendered extremely difficult, if not impossible, especially due to the supervening event of the second world war during which practically all public records were lost or destroyed, or no longer available.33

IN VIEW OF THE FOREGOING, the petition for review on certiorari is denied for lack of merit.

The Court declares that Cebu Country Club, Inc. is the exclusive owner of Lot No.727-D-2 of the Banilad Friar Lands Estate, as confirmed by Republic Act No. 9443.

Costs of suit to be paid by the petitioners.

SO ORDERED.


WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson


TERESITA J. LEONARDO-DE CASTRO

Associate Justice



Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

6.Source: http://www.lawphil.net/judjuris/juri2010/apr2010/gr_188471_2010.html

http://www.lawphil.net/judjuris/juri2010/apr2010/gr_188471_2010.html


Manila

SECOND DIVISION

G.R. No. 82027 March 29, 1990

ROMARICO G. VITUG, petitioner, vs.THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINO-CORONA, respondents.

Rufino B. Javier Law Office for petitioner.

Quisumbing, Torres & Evangelista for private respondent.

SARMIENTO, J.:

This case is a chapter in an earlier suit decided by this Court 1 involving the probate of the two wills of the late Dolores Luchangco Vitug, who died in New York, U. S.A., on November 10, 1980, naming private respondent Rowena Faustino-Corona executrix. In our said decision, we upheld the appointment of Nenita Alonte as co-special administrator of Mrs. Vitug's estate with her (Mrs. Vitug's) widower, petitioner Romarico G. Vitug, pending probate.

On January 13, 1985, Romarico G. Vitug filed a motion asking for authority from the probate court to sell certain shares of stock and real properties belonging to the estate to cover allegedly his advances to the estate in the sum of P667,731.66, plus interests, which he claimed were personal funds. As found by the Court of Appeals, 2 the alleged advances consisted of P58,147.40 spent for the payment of estate tax, P518,834.27 as deficiency estate tax, and P90,749.99 as "increment thereto." 3 According to Mr. Vitug, he withdrew the sums of P518,834.27 and P90,749.99 from savings account No. 35342-038 of the Bank of America, Makati, Metro Manila.

On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that the same funds withdrawn from savings account No. 35342-038 were conjugal partnership properties and part of the estate, and hence, there was allegedly no ground for reimbursement. She also sought his ouster for failure to include the sums in question for inventory and for "concealment of funds belonging to the estate." 4

Vitug insists that the said funds are his exclusive property having acquired the same through a survivorship agreement executed with his late wife and the bank on June 19, 1970. The agreement provides:

We hereby agree with each other and with the BANK OF AMERICAN NATIONAL TRUST AND SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money now or hereafter deposited by us or any or either of us with the BANK in our joint savings current account shall be the property of all or both of us and shall be payable to and collectible or withdrawable by either or any of us during our lifetime, and after the death of either or any of us shall belong to and be the sole property of the survivor or survivors, and shall be payable to and collectible or withdrawable by such survivor or survivors.

We further agree with each other and the BANK that the receipt or check of either, any or all of us during our lifetime, or the receipt or check of the survivor or survivors, for any payment or withdrawal made for our above-mentioned account shall be valid and sufficient release and discharge of the BANK for such payment or withdrawal. 5

The trial courts 6 upheld the validity of this agreement and granted "the motion to sell some of the estate of Dolores L. Vitug, the proceeds of which shall be used to pay the personal funds of Romarico Vitug in the total sum of P667,731.66 ... ." 7

On the other hand, the Court of Appeals, in the petition for certiorari filed by the herein private respondent, held that the above-quoted survivorship agreement constitutes a conveyance mortis causa which "did not comply with the formalities of a valid will as prescribed by Article 805 of the Civil Code," 8 and secondly, assuming that it is a mere donation inter vivos, it is a prohibited donation under the provisions of Article 133 of the Civil Code. 9

The dispositive portion of the decision of the Court of Appeals states:

WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex II, petition) is hereby set aside insofar as it granted private respondent's motion to sell certain properties of the estate of Dolores L. Vitug for reimbursement of his alleged advances to the estate, but the same order is sustained in all other respects. In addition, respondent Judge is directed to include provisionally the deposits in Savings Account No. 35342-038 with the Bank of America, Makati, in the inventory of actual properties possessed by the spouses at the time of the decedent's death. With costs against private respondent. 10

In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the strength of our decisions in Rivera v. People's Bank and Trust Co. 11 and Macam v. Gatmaitan 12 in which we sustained the validity of "survivorship agreements" and considering them as aleatory contracts. 13

The petition is meritorious.

The conveyance in question is not, first of all, one of mortis causa, which should be embodied in a will. A will has been defined as "a personal, solemn, revocable and free act by which a capacitated person disposes of his property and rights and declares or complies with duties to

take effect after his death." 14 In other words, the bequest or device must pertain to the testator. 15 In this case, the monies subject of savings account No. 35342-038 were in the nature of conjugal funds In the case relied on, Rivera v. People's Bank and Trust Co., 16 we rejected claims that a survivorship agreement purports to deliver one party's separate properties in favor of the other, but simply, their joint holdings:

xxx xxx xxx

... Such conclusion is evidently predicated on the assumption that Stephenson was the exclusive owner of the funds-deposited in the bank, which assumption was in turn based on the facts (1) that the account was originally opened in the name of Stephenson alone and (2) that Ana Rivera "served only as housemaid of the deceased." But it not infrequently happens that a person deposits money in the bank in the name of another; and in the instant case it also appears that Ana Rivera served her master for about nineteen years without actually receiving her salary from him. The fact that subsequently Stephenson transferred the account to the name of himself and/or Ana Rivera and executed with the latter the survivorship agreement in question although there was no relation of kinship between them but only that of master and servant, nullifies the assumption that Stephenson was the exclusive owner of the bank account. In the absence, then, of clear proof to the contrary, we must give full faith and credit to the certificate of deposit which recites in effect that the funds in question belonged to Edgar Stephenson and Ana Rivera; that they were joint (and several) owners thereof; and that either of them could withdraw any part or the whole of said account during the lifetime of both, and the balance, if any, upon the death of either, belonged to the survivor. 17

xxx xxx xxx

In Macam v. Gatmaitan, 18 it was held:

xxx xxx xxx

This Court is of the opinion that Exhibit C is an aleatory contract whereby, according to article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to give or do something as an equivalent for that which the other party is to give or do in case of the occurrence of an event which is uncertain or will happen at an indeterminate time. As already stated, Leonarda was the owner of the house and Juana of the Buick automobile and most of the furniture. By virtue of Exhibit C, Juana would become the owner of the house in case Leonarda died first, and Leonarda would become the owner of the automobile and the furniture if Juana were to die first. In this manner Leonarda and Juana reciprocally assigned their respective property to one another conditioned upon who might die first, the time of death determining the event upon which the acquisition of such right by the one or the other depended. This contract, as any other contract, is binding upon the parties thereto. Inasmuch as Leonarda had died before Juana, the

latter thereupon acquired the ownership of the house, in the same manner as Leonarda would have acquired the ownership of the automobile and of the furniture if Juana had died first. 19

xxx xxx xxx

There is no showing that the funds exclusively belonged to one party, and hence it must be presumed to be conjugal, having been acquired during the existence of the marita. relations. 20

Neither is the survivorship agreement a donation inter vivos, for obvious reasons, because it was to take effect after the death of one party. Secondly, it is not a donation between the spouses because it involved no conveyance of a spouse's own properties to the other.

It is also our opinion that the agreement involves no modification petition of the conjugal partnership, as held by the Court of Appeals, 21 by "mere stipulation" 22 and that it is no "cloak" 23

to circumvent the law on conjugal property relations. Certainly, the spouses are not prohibited by law to invest conjugal property, say, by way of a joint and several bank account, more commonly denominated in banking parlance as an "and/or" account. In the case at bar, when the spouses Vitug opened savings account No. 35342-038, they merely put what rightfully belonged to them in a money-making venture. They did not dispose of it in favor of the other, which would have arguably been sanctionable as a prohibited donation. And since the funds were conjugal, it can not be said that one spouse could have pressured the other in placing his or her deposits in the money pool.

The validity of the contract seems debatable by reason of its "survivor-take-all" feature, but in reality, that contract imposed a mere obligation with a term, the term being death. Such agreements are permitted by the Civil Code. 24

Under Article 2010 of the Code:

ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind themselves to give or to do something in consideration of what the other shall give or do upon the happening of an event which is uncertain, or which is to occur at an indeterminate time.

Under the aforequoted provision, the fulfillment of an aleatory contract depends on either the happening of an event which is (1) "uncertain," (2) "which is to occur at an indeterminate time." A survivorship agreement, the sale of a sweepstake ticket, a transaction stipulating on the value of currency, and insurance have been held to fall under the first category, while a contract for life annuity or pension under Article 2021, et sequentia, has been categorized under the second. 25 In either case, the element of risk is present. In the case at bar, the risk was the death of one party and survivorship of the other.

However, as we have warned:

xxx xxx xxx

But although the survivorship agreement is per se not contrary to law its operation or effect may be violative of the law. For instance, if it be shown in a given case that such agreement is a mere cloak to hide an inofficious donation, to transfer property in fraud of creditors, or to defeat the legitime of a forced heir, it may be assailed and annulled upon such grounds. No such vice has been imputed and established against the agreement involved in this case. 26

xxx xxx xxx

There is no demonstration here that the survivorship agreement had been executed for such unlawful purposes, or, as held by the respondent court, in order to frustrate our laws on wills, donations, and conjugal partnership.

The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her husband, the latter has acquired upon her death a vested right over the amounts under savings account No. 35342-038 of the Bank of America. Insofar as the respondent court ordered their inclusion in the inventory of assets left by Mrs. Vitug, we hold that the court was in error. Being the separate property of petitioner, it forms no more part of the estate of the deceased.

WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987, and its resolution, dated February 9, 1988, are SET ASIDE.

No costs.

SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Regalado JJ., concur.

7.Source: http://www.lawphil.net/judjuris/juri1990/mar1990/gr_82027_1990.html

http://www.lawphil.net/judjuris/juri1990/mar1990/gr_82027_1990.html


Manila

FIRST DIVISION

G.R. No. 183063 February 24, 2010

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.CAYETANO L. SERRANO,1 and HEIRS OF CATALINO M. ALAAN, represented by PAULITA P. ALAAN, Respondents.

D E C I S I O N

CARPIO MORALES, J.:

Respondent Cayetano L. Serrano (Cayetano) filed on September 21, 1988 before the Regional Trial Court (RTC) of Butuan City an application for registration,2 docketed as LRC Case No. 270, over a 533-square meter parcel of commercial land known as Lot 249 ([on Plan Psu-157485] the lot), located in Poblacion Cabadbaran, Agusan del Norte.

Cayetano claimed to have acquired the lot by inheritance from his deceased parents, Simeon Serrano (Simeon) and Agustina Luz; by virtue of a Deed of Exchange 3 dated February 10, 1961; and by a private deed of partition and extrajudicial settlement forged by him and his co-heirs.

Invoking the applicability of Presidential Decree No. 1529 or the Property Registration Decree or, in the alternative, the provisions of Chapter VIII, Section 48(b) of Commonwealth Act No. 141,4 Cayetano also claimed to have been in open, continuous, exclusive and notorious possession of the lot under a claim of ownership before 1917 by himself and through his deceased parents–predecessors-in-interest or for more than 70 years.

The Heirs of Catalino Alaan, represented by Paulita Alaan (Paulita),5 intervened and filed an application for registration,6 their predecessor-in-interest Catalino Alaan (Catalino) having purchased7 a 217.45-square meter undivided portion of the lot from Cayetano on February 27, 1989 during the pendency of Cayetano’s application for registration.

The intervenor-heirs of Catalino, also invoking the provisions of the Property Registration Decree or, alternatively, of Chapter VIII, Section 48(b) of Commonwealth Act No. 141, prayed that their application for confirmation of title be considered jointly with that of Cayetano’s, and

that, thereafter, original certificates of title be issued in both their names.

Cayetano raised no objection or opposition to the intervenor-Heirs of Catalino’s application for registration.8

Cayetano’s brother-attorney-in-fact Leonardo Serrano (Leonardo) represented him at the hearings of the application. During the pendency of the case, Cayetano passed away9 and was substituted by his heirs.

At the trial, the following pieces of documentary evidence, inter alia, were presented to support Cayetano’s claim of ownership over the lot: original survey plan dated January 3, 1957 and certified by the Department of Environment and Natural Resources (DENR), and Bureau of Lands Director Zoilo Castrillo,10 technical description of the lot (Psu-157485),11 Tax Declarations for the years 1924 (in the name of Simeon) and 1948-1997 (in the name of either Simeon [deceased] or Cayetano),12 official receipts showing real estate tax payments (from 1948-1997),13 and Surveyor’s Certificate No. 157485 dated January 1957.14

As Cayetano’s sole witness Leonardo was already physically infirm (hard of hearing and due to old age) at the time trial commenced, his testimony was taken by deposition on written interrogatories.15

In answer to the interrogatories,16 Leonardo declared that his family had lived on the lot since pre-war time, his father Simeon having built a house on it following his acquisition from Julian Ydulzura in 192317 who had purchased it from Lazaro Rañada in 1917;18 that the construction of a family home in 1923 was reflected in Tax Declaration No. 18,587 in the name of Simeon for the year 192419; that after his father’s death in 1931, his mother and his brother Cayetano continued to possess the lot in the concept of owners and Cayetano in fact built his own house and a bodega thereon; that Cayetano religiously paid real estate taxes from 1951 up to the current year 1997;20 that the lot was assigned to him and Cayetano as their share of the inheritance by virtue of a private document, "Kaligonan," dated June 16, 1951,21 which was executed by all of the heirs, the contents of which document were subsequently confirmed in a Deed of Extrajudicial Settlement dated August 24, 1988;22 and that on February 10, 1961, Cayetano exchanged a titled lot in Butuan City for his (Leonardo’s) half-share in the lot, thereby making Cayetano the sole and exclusive owner thereof.23

On the other hand, Paulita, wife of Catalino who represented the heirs of Catalino, declared that in February 1989, Cayetano sold to her husband a 217.45-sq. meter portion of the 533-sq. meter lot subject of the present case as embodied in a deed of absolute sale;24 and that Catalino religiously paid real estate taxes therefor. And she presented an approved Subdivision Plan of Lot 249,25 Cad-866 indicating therein the respective shares of Cayetano and Catalino based on a survey undertaken by Geodetic Engineer Armando Diola on May 9, 1997.26

The above-said Subdivision Plan of the lot, duly approved by Celso V. Loriega, Jr., Regional Technical Director of the DENR, Lands Management Services, Region Office XIII for Butuan City, carries the following annotation:

Surveyed in accordance with survey authority no. (X-2A) 77 issued by CENRO.

This survey is inside the alienable and disposable area as per project no. 5 L.C Map No. 550 certified on July 18, 1925.

Lot 249-A, Lot 9090, Lot 249-B, Lot 9091, CAD 866 Cabadbaran Cadastre. (emphasis and underscoring supplied)

Herein petitioner Republic of the Philippines, represented by Butuan provincial prosecutor Ambrosio Gallarde, did not present any evidence to oppose the applications.

By Decision of November 3, 2003,27 the RTC granted respondents’ applications, disposing as follows:

WHEREFORE, conformably with existing laws and jurisprudence, DECISION is hereby rendered:

1. Awarding a portion of Lot 249, Psu-15(5)7485 (now known as Lot 249-B, Csd-13-000443-D) containing an area of 316 sq. meters to applicant Cayetano L. Serrano, Sr., represented by his heirs;

2. Awarding a portion of Lot 249, Psu-157485 (now known as Lot 249-A, Csd-1-000443-D) containing an area of 217 sq. meters to applicant Catalina M. Alaan, represented by Paulita P. Alaan;

IT IS SO ORDERED.

The Office of the Solicitor General, on behalf of herein petitioner, appealed the RTC decision before the Court of Appeals on the grounds that respondents failed to present evidence that the property was alienable or that they possessed the same in the manner and duration required by the provisions of the Property Registration Decree.28

By Decision of May 13, 2008,29 the appellate court affirmed the decision of the RTC in this wise:

x x x x

. . . [F]rom the aforequoted annotation, the OSG’s assertion that there was no competent evidence that would clearly show the subject land was released as alienable and disposable land is unavailing. On the contrary, We HOLD that the said annotation would suffice to comply with the requirement of certification as the same is competent enough to show that the disputed land or the parcels of land (now Lot Nos. 249-A, Cad-866 and 249-B Cad-866, respectively) applied for by the applicants (Cayetano and Alaan) were already reclassified as alienable and disposable as early as 18 July 1925, under Project No. 5, L.C. Map No. 550.

x x x x

Records show that the subject land was first owned and possessed by Lazaro Rañada and the same was sold to Julian Ydulzura per untitled document executed on 15 May 1917. On 3 September 1923, Ydulzura sold the subject land for one hundred fifty pesos (Php150.00) to Simeon M. Serrano per untitled document, father of Cayetano. Simeon M. Serrano then had the subject land tax declared in his name in 1924 per Declaration of Real Property (Urban) No.

18,587. Upon the demise of Simeon Serrano on 9 January 1931, his heirs, including herein applicant Cayetano, partitioned by way of an Agreement on 16 June 1951 the properties of their deceased father. On 24 August 1988, the heirs of Simeon M. Serrano executed a Deed of Extrajudicial Settlement confirming further the Agreement executed on 16 June 1954 (sic). It is worth noting that from 1955 up to the filing of the Application for Registration in 21 June 1988 and until 1997, Cayetano religiously paid the real estate taxes of the said subject property. As held in a long line of cases, tax declarations or realty tax payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner. Undoubtedly, applicant Cayetano, through his predecessors-in-interest, having been in open, continuous, exclusive and notorious possession and occupation over the subject property under a bona fide claim of ownership since June 12, 1945, or earlier had met the requirements set forth in Section 14(1) of the Property Registration Decree.

In fine, We FIND and so HOLD that applicant Cayetano L. Serrano and intervenor-appellee heirs of Catalino M. Alaan, have registrable title to the aforesaid subject lands, Lot 249-B, Csd-13-000443-D and Lot 249-A, Csd-1-000443-D, respectively, as they were able to prove that they are qualified and had complied with the requirements set forth by the provisions of P.D. No. 1529 which amended Commonwealth Act No. 141, as amended and Presidential Decree No. 1073, which to Our mind merited the allowance of the application for registration of the said property by the trial court.30 (italics in the original; emphasis and underscoring supplied)

Hence, the present petition which raises the same grounds as those raised by petitioner before the appellate court.

The petition fails.

The requisites for the filing of an application for registration of title under Section 14(1) of the Property Registration Decree are: that the property is alienable and disposable land of the public domain; that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation thereof; and that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.31

The Court reiterates the doctrine which more accurately construes Section 14(1) in Republic of the Philippines v. Court of Appeals and Naguit,32 viz:

. . . the more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property.

This reading aligns conformably with our holding in Republic v. Court of Appeals. Therein, the Court noted that "to prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute." In that case, the subject land had been certified by the DENR as alienable and disposable in 1980, thus the Court concluded that the alienable status of the land, compounded by the established fact that therein respondents had occupied the land even before 1927, sufficed to allow the application for registration of the said property. In the case at bar, even the petitioner admits that the subject property was released and certified as within alienable and disposable zone in 1980 by the DENR.33 (Citations omitted; emphasis and underscoring supplied)

While Cayetano failed to submit any certification which would formally attest to the alienable and disposable character of the land applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in evidence by Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that Lot 249 had been verified as belonging to the alienable and disposable area as early as July 18, 1925.

The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that no opposition was filed or registered by the Land Registration Authority or the DENR to contest respondents’ applications on the ground that their respective shares of the lot are inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the Certification may thus be equitably extended in favor of respondents.1avvphi1

Petitioner’s contention that respondents failed to adduce sufficient proof of possession and occupation as required under Section 14(1) of the Property Registration Decree does not lie.

Undeniably, respondents and/or their predecessors-in-interest must be shown to have exercised acts of dominion over the lot under a bona fide claim of ownership since June 12, 1945 or earlier. On what constitutes open, continuous, exclusive and notorious possession and occupation as required by statute, Republic v. Alconaba34 teaches:

The law speaks of possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of a land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. (emphasis and underscoring supplied)

Leonardo clearly established the character of the possession of Cayetano and his predecessors-in-interest over the lot. Thus he declared that the lot was first owned by Lazaro Rañada who sold the same to Julian Ydulzura in 1917 who in turn sold it to his and Cayetano’s father Simeon in 1923; that Simeon built a house thereon after its acquisition, which fact is buttressed by entries in

Tax Declaration No. 18,587 in the name of Simeon for the year 1924 indicating the existence of a 40-sq. meter residential structure made of nipa and mixed materials, and of coconut trees planted thereon; and that after Simeon’s demise in 1931, Cayetano built his own house beside the old nipa house before the war, and a bodega after the war, which claims find support in Tax Declarations made in 1948-1958.35

Finally, the official receipts of realty tax payments37 religiously made by Cayetano from 1948 to 1997 further serve as credible indicia that Cayetano, after his father’s death in 1931, continued to exercise acts of dominion over the lot.

The totality of the evidence thus points to the unbroken chain of acts exercised by Cayetano to demonstrate his occupation and possession of the land in the concept of owner, to the exclusion of all others.

WHEREFORE, the petition is DENIED.

No costs.

SO ORDERED.


WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

TERESITA J. LEONARDO-DE CASTRO

Associate Justice




Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


8.Source: http://www.lawphil.net/judjuris/juri2010/feb2010/gr_183063_2010.html

http://www.lawphil.net/judjuris/juri2010/feb2010/gr_183063_2010.html


Manila

SECOND DIVISION

G.R. No. 187879 July 5, 2010

DALISAY E. OCAMPO, VINCE E. OCAMPO, MELINDA CARLA E. OCAMPO, and LEONARDO E. OCAMPO, JR., Petitioners, vs.RENATO M. OCAMPO and ERLINDA M. OCAMPO, Respondents.

D E C I S I O N

NACHURA, J.:

This petition1 for review on certiorari under Rule 45 of the Rules of Court seeks to reverse and set aside the Decision2 dated December 16, 2008 and the Resolution3 dated April 30, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 104683. The Decision annulled and set aside the Order dated March 13, 20084 of the Regional Trial Court (RTC), Branch 24, Biñan, Laguna, in Sp. Proc. No. B-3089; while the Resolution denied the motion for reconsideration of the Decision.

The Antecedents

Petitioners Dalisay E. Ocampo (Dalisay), Vince E. Ocampo (Vince), Melinda Carla E. Ocampo (Melinda), and Leonardo E. Ocampo, Jr. (Leonardo, Jr.) are the surviving wife and the children of Leonardo Ocampo (Leonardo), who died on January 23, 2004. Leonardo and his siblings, respondents Renato M. Ocampo (Renato) and Erlinda M. Ocampo (Erlinda) are the legitimate children and only heirs of the spouses Vicente and Maxima Ocampo, who died intestate on December 19, 1972 and February 19, 1996, respectively. Vicente and Maxima left several properties, mostly situated in Biñan, Laguna. Vicente and Maxima left no will and no debts.

On June 24, 2004, five (5) months after the death of Leonardo, petitioners initiated a petition for intestate proceedings, entitled "In Re: Intestate Proceedings of the Estate of Sps. Vicente Ocampo and Maxima Mercado Ocampo, and Leonardo M. Ocampo," in the RTC, Branch 24, Biñan, Laguna, docketed as Spec. Proc. No. B-3089.5 The petition alleged that, upon the death of Vicente and Maxima, respondents and their brother Leonardo jointly controlled, managed, and administered the estate of their parents. Under such circumstance, Leonardo had been receiving his share consisting of one-third (1/3) of the total income generated from the properties of the estate. However, when Leonardo died, respondents took possession, control and management of the properties to the exclusion of petitioners. The petition prayed for the settlement of the estate of Vicente and Maxima and the estate of Leonardo. It, likewise, prayed for the appointment of an administrator to apportion, divide, and award the two estates among the lawful heirs of the decedents.

Respondents filed their Opposition and Counter-Petition dated October 7, 2004,6 contending that the petition was defective as it sought the judicial settlement of two estates in a single proceeding. They argued that the settlement of the estate of Leonardo was premature, the same being dependent only upon the determination of his hereditary rights in the settlement of his parents’ estate. In their counter-petition, respondents prayed that they be appointed as special joint administrators of the estate of Vicente and Maxima.

In an Order dated March 4, 2005,7 the RTC denied respondents’ opposition to the settlement proceedings but admitted their counter-petition. The trial court also clarified that the judicial settlement referred only to the properties of Vicente and Maxima.

Through a Motion for Appointment of Joint Special Administrators dated October 11, 2005,8 respondents reiterated their prayer for appointment as special joint administrators of the estate, and to serve as such without posting a bond.

In their Comment dated November 3, 2005,9 petitioners argued that, since April 2002, they had been deprived of their fair share of the income of the estate, and that the appointment of respondents as special joint administrators would further cause injustice to them. Thus, they prayed that, in order to avoid further delay, letters of administration to serve as joint administrators of the subject estate be issued to respondents and Dalisay.

In another Motion for Appointment of a Special Administrator dated December 5, 2005,10 petitioners nominated the Biñan Rural Bank to serve as special administrator pending resolution of the motion for the issuance of the letters of administration.

In its June 15, 2006 Order,11 the RTC appointed Dalisay and Renato as special joint administrators of the estate of the deceased spouses, and required them to post a bond of P200,000.00 each.12

Respondents filed a Motion for Reconsideration dated August 1, 200613 of the Order, insisting that Dalisay was incompetent and unfit to be appointed as administrator of the estate, considering that she even failed to take care of her husband Leonardo when he was paralyzed in 1997. They also contended that petitioners’ prayer for Dalisay’s appointment as special administrator was already deemed abandoned upon their nomination of the Biñan Rural Bank to act as special administrator of the estate.

In their Supplement to the Motion for Reconsideration,14 respondents asserted their priority in right to be appointed as administrators being the next of kin of Vicente and Maxima, whereas Dalisay was a mere daughter-in-law of the decedents and not even a legal heir by right of representation from her late husband Leonardo.

Pending the resolution of the Motion for Reconsideration, petitioners filed a Motion to Submit Inventory and Accounting dated November 20, 2006,15 praying that the RTC issue an order directing respondents to submit a true inventory of the estate of the decedent spouses and to render an accounting thereof from the time they took over the collection of the income of the estate.

Respondents filed their Comment and Manifestation dated January 15, 2007,16 claiming that they could not yet be compelled to submit an inventory and render an accounting of the income and assets of the estate inasmuch as there was still a pending motion for reconsideration of the June 15, 2006 Order appointing Dalisay as co-special administratrix with Renato.

In its Order dated February 16, 2007, the RTC revoked the appointment of Dalisay as co-special administratrix, substituting her with Erlinda. The RTC took into consideration the fact that respondents were the nearest of kin of Vicente and Maxima. Petitioners did not contest this Order and even manifested in open court their desire for the speedy settlement of the estate.

On April 23, 2007, or two (2) months after respondents’ appointment as joint special administrators, petitioners filed a Motion for an Inventory and to Render Account of the Estate,17 reiterating their stance that respondents, as joint special administrators, should be directed to submit a true inventory of the income and assets of the estate.

Respondents then filed a Motion for Exemption to File Administrators’ Bond18 on May 22, 2007, praying that they be allowed to enter their duties as special administrators without the need to file an administrators’ bond due to their difficulty in raising the necessary amount. They alleged that, since petitioners manifested in open court that they no longer object to the appointment of respondents as special co-administrators, it would be to the best interest of all the heirs that the estate be spared from incurring unnecessary expenses in paying for the bond premiums. They also assured the RTC that they would faithfully exercise their duties as special administrators under pain of contempt should they violate any undertaking in the performance of the trust of their office.

In an Order dated June 29, 2007,19 the RTC directed the parties to submit their respective comments or oppositions to the pending incidents, i.e., petitioners’ Motion for Inventory and to Render Account, and respondents’ Motion for Exemption to File Administrators’ Bond.

Respondents filed their Comment and/or Opposition,20 stating that they have already filed a comment on petitioners’ Motion for Inventory and to Render Account. They asserted that the RTC should, in the meantime, hold in abeyance the resolution of this Motion, pending the resolution of their Motion for Exemption to File Administrators’ Bond.

On October 15, 2007, or eight (8) months after the February 16, 2007 Order appointing respondents as special joint administrators, petitioners filed a Motion to Terminate or Revoke the Special Administration and to Proceed to Judicial Partition or Appointment of Regular Administrator.21 Petitioners contended that the special administration was not necessary as the estate is neither vast nor complex, the properties of the estate being identified and undisputed, and not involved in any litigation necessitating the representation of special administrators. Petitioners, likewise, contended that respondents had been resorting to the mode of special administration merely to delay and prolong their deprivation of what was due them. Petitioners cited an alleged fraudulent sale by respondents of a real property for P2,700,000.00, which the latter represented to petitioners to have been sold only for P1,500,000.00, and respondents’ alleged misrepresentation that petitioners owed the estate for the advances to cover the hospital expenses of Leonardo, but, in fact, were not yet paid.

Respondents filed their Opposition and Comment22 on March 10, 2008, to which, in turn, petitioners filed their Reply to Opposition/Comment23 on March 17, 2008.

In its Order dated March 13, 2008,24 the RTC granted petitioners’ Motion, revoking and terminating the appointment of Renato and Erlinda as joint special administrators, on account of their failure to comply with its Order, particularly the posting of the required bond, and to enter their duties and responsibilities as special administrators, i.e., the submission of an inventory of the properties and of an income statement of the estate. The RTC also appointed Melinda as regular administratrix, subject to the posting of a bond in the amount of P200,000.00, and directed her to submit an inventory of the properties and an income statement of the subject estate. The RTC likewise found that judicial partition may proceed after Melinda had assumed her duties and responsibilities as regular administratrix.

Aggrieved, respondents filed a petition for certiorari25 under Rule 65 of the Rules of Court before the CA, ascribing grave abuse of discretion on the part of the RTC in (a) declaring them to have failed to enter the office of special administration despite lapse of reasonable time, when in truth they had not entered the office because they were waiting for the resolution of their motion for exemption from bond; (b) appointing Melinda as regular administratrix, a mere granddaughter of Vicente and Maxima, instead of them who, being the surviving children of the deceased spouses, were the next of kin; and (c) declaring them to have been unsuitable for the trust, despite lack of hearing and evidence against them.

Petitioners filed their Comment to the Petition and Opposition to Application for temporary restraining order and/or writ of preliminary injunction,26 reiterating their arguments in their Motion for the revocation of respondents’ appointment as joint special administrators. Respondents filed their Reply.27

On December 16, 2008, the CA rendered its assailed Decision granting the petition based on the finding that the RTC gravely abused its discretion in revoking respondents’ appointment as joint special administrators without first ruling on their motion for exemption from bond, and for appointing Melinda as regular administratrix without conducting a formal hearing to determine her competency to assume as such. According to the CA, the posting of the bond is a prerequisite before respondents could enter their duties and responsibilities as joint special administrators, particularly their submission of an inventory of the properties of the estate and an income statement thereon.

Petitioners filed a Motion for Reconsideration of the Decision.28 The CA, however, denied it. Hence, this petition, ascribing to the CA errors of law and grave abuse of discretion for annulling and setting aside the RTC Order dated March 13, 2008.

Our Ruling

The pertinent provisions relative to the special administration of the decedents’ estate under the Rules of Court provide—

Sec. 1. Appointment of special administrator. – When there is delay in granting letters testamentary or of administration by any cause including an appeal from the allowance or disallowance of a will, the court may appoint a special administrator to take possession and charge of the estate of the deceased until the questions causing the delay are decided and executors or administrators appointed.29

Sec. 2. Powers and duties of special administrator. – Such special administrator shall take possession and charge of goods, chattels, rights, credits, and estate of the deceased and preserve the same for the executor or administrator afterwards appointed, and for that purpose may commence and maintain suits as administrator. He may sell only such perishable and other property as the court orders sold. A special administrator shall not be liable to pay any debts of the deceased unless so ordered by the court.30

Sec. 1. Bond to be given before issuance of letters; Amount; Conditions. – Before an executor or administrator enters upon the execution of his trust, and letters testamentary or of administration issue, he shall give a bond, in such sum as the court directs, conditioned as follows:

(a) To make and return to the court, within three (3) months, a true and complete inventory of all goods, chattels, rights, credits, and estate of the deceased which shall come to his possession or knowledge or to the possession of any other person for him;

(b) To administer according to these rules, and, if an executor, according to the will of the testator, all goods, chattels, rights, credits, and estate which shall at any time come to his possession or to the possession of any other person for him, and from the proceeds to pay and discharge all debts, legacies, and charges on the same, or such dividends thereon as shall be decreed by the court;

(c) To render a true and just account of his administration to the court within one (1) year, and at any other time when required by the court;

(d) To perform all orders of the court by him to be performed.31

Sec. 4. Bond of special administrator. – A special administrator before entering upon the duties of his trust shall give a bond, in such sum as the court directs, conditioned that he will make and return a true inventory of the goods, chattels, rights, credits, and estate of the deceased which come to his possession or knowledge, and that he will truly account for such as are received by him when required by the court, and will deliver the same to the person appointed executor or administrator, or to such other person as may be authorized to receive them.32

Inasmuch as there was a disagreement as to who should be appointed as administrator of the estate of Vicente and Maxima, the RTC, acting as a probate court, deemed it wise to appoint joint special administrators pending the determination of the person or persons to whom letters of administration may be issued. The RTC was justified in doing so considering that such disagreement caused undue delay in the issuance of letters of administration, pursuant to Section 1 of Rule 80 of the Rules of Court. Initially, the RTC, on June 15, 2006, appointed Renato and Dalisay as joint special administrators, imposing upon each of them the obligation to post an

administrator’s bond of P200,000.00. However, taking into account the arguments of respondents that Dalisay was incompetent and unfit to assume the office of a special administratrix and that Dalisay, in effect, waived her appointment when petitioners nominated Biñan Rural Bank as special administrator, the RTC, on February 16, 2007, revoked Dalisay’s appointment and substituted her with Erlinda.

A special administrator is an officer of the court who is subject to its supervision and control, expected to work for the best interest of the entire estate, with a view to its smooth administration and speedy settlement.33 When appointed, he or she is not regarded as an agent or representative of the parties suggesting the appointment.34 The principal object of the appointment of a temporary administrator is to preserve the estate until it can pass to the hands of a person fully authorized to administer it for the benefit of creditors and heirs, pursuant to Section 2 of Rule 80 of the Rules of Court.35

While the RTC considered that respondents were the nearest of kin to their deceased parents in their appointment as joint special administrators, this is not a mandatory requirement for the appointment. It has long been settled that the selection or removal of special administrators is not governed by the rules regarding the selection or removal of regular administrators.36 The probate court may appoint or remove special administrators based on grounds other than those enumerated in the Rules at its discretion, such that the need to first pass upon and resolve the issues of fitness or unfitness37 and the application of the order of preference under Section 6 of Rule 78,38 as would be proper in the case of a regular administrator, do not obtain. As long as the discretion is exercised without grave abuse, and is based on reason, equity, justice, and legal principles, interference by higher courts is unwarranted.39 The appointment or removal

of special administrators, being discretionary, is thus interlocutory and may be assailed through a petition for certiorari under Rule 65 of the Rules of Court.40

Granting the certiorari petition, the CA found that the RTC gravely abused its discretion in revoking respondents’ appointment as joint special administrators, and for failing to first resolve the pending Motion for Exemption to File Administrators’ Bond, ratiocinating that the posting of the administrators’ bond is a pre-requisite to respondents’ entering into the duties and responsibilities of their designated office. This Court disagrees.

It is worthy of mention that, as early as October 11, 2005, in their Motion for Appointment as Joint Special Administrators, respondents already prayed for their exemption to post bond should they be assigned as joint special administrators. However, the RTC effectively denied this prayer when it issued its June 15, 2006 Order, designating Renato and Dalisay as special administrators and enjoining them to post bond in the amount of P200,000.00 each. This denial was, in effect, reiterated when the RTC rendered its February 16, 2007 Order substituting Dalisay with Erlinda as special administratrix.

Undeterred by the RTC’s resolve to require them to post their respective administrators’ bonds, respondents filed anew a Motion for Exemption to File Administrators’ Bond on May 22, 2007, positing that it would be to the best interest of the estate of their deceased parents and all the heirs to spare the estate from incurring the unnecessary expense of paying for their bond

premiums since they could not raise the money themselves. To note, this Motion was filed only after petitioners filed a Motion for an Inventory and to Render Account of the Estate on April 23, 2007. Respondents then argued that they could not enter into their duties and responsibilities as special administrators in light of the pendency of their motion for exemption. In other words, they could not yet submit an inventory and render an account of the income of the estate since they had not yet posted their bonds.

Consequently, the RTC revoked respondents’ appointment as special administrators for failing to post their administrators’ bond and to submit an inventory and accounting as required of them, tantamount to failing to comply with its lawful orders. Inarguably, this was, again, a denial of respondents’ plea to assume their office sans a bond. The RTC rightly did so.

Pursuant to Section 1 of Rule 81, the bond secures the performance of the duties and obligations of an administrator namely: (1) to administer the estate and pay the debts; (2) to perform all judicial orders; (3) to account within one (1) year and at any other time when required by the probate court; and (4) to make an inventory within three (3) months. More specifically, per Section 4 of the same Rule, the bond is conditioned on the faithful execution of the administration of the decedent’s estate requiring the special administrator to (1) make and return a true inventory of the goods, chattels, rights, credits, and estate of the deceased which come to his possession or knowledge; (2) truly account for such as received by him when required by the court; and (3) deliver the same to the person appointed as executor or regular administrator, or to such other person as may be authorized to receive them.

Verily, the administration bond is for the benefit of the creditors and the heirs, as it compels the administrator, whether regular or special, to perform the trust reposed in, and discharge the obligations incumbent upon, him. Its object and purpose is to safeguard the properties of the decedent, and, therefore, the bond should not be considered as part of the necessary expenses chargeable against the estate, not being included among the acts constituting the care, management, and settlement of the estate. Moreover, the ability to post the bond is in the nature of a qualification for the office of administration.41

Hence, the RTC revoked respondents’ designation as joint special administrators, especially considering that respondents never denied that they have been in possession, charge, and actual administration of the estate of Vicente and Maxima since 2002 up to the present, despite the assumption of Melinda as regular administratrix. In fact, respondents also admitted that, allegedly out of good faith and sincerity to observe transparency, they had submitted a Statement of Cash Distribution42 for the period covering April 2002 to June 2006,43 where they indicated that Renato had received P4,241,676.00, Erlinda P4,164,526.96, and petitioners P2,486,656.60, and that the estate had advanced P2,700,000.00 for the hospital and funeral expenses of Leonardo.44 The latter cash advance was questioned by petitioners in their motion for revocation of special administration on account of the demand letter45 dated June 20, 2007 of Asian Hospital and Medical Center addressed to Dalisay, stating that there still remained unpaid hospital bills in the amount of P2,087,380.49 since January 2004. Undeniably, respondents had already been distributing the incomes or fruits generated from the properties of the decedents’ estate, yet they still failed to post their respective administrators’ bonds despite collection of the advances from their supposed shares. This state of affairs continued even after a considerable lapse of time from

the appointment of Renato as a special administrator of the estate on June 15, 2006 and from February 16, 2007 when the RTC substituted Erlinda, for Dalisay, as special administratrix.

What is more, respondents’ insincerity in administering the estate was betrayed by the Deed of Conditional Sale dated January 12, 200446 discovered by petitioners. This Deed was executed between respondents, as the only heirs of Maxima, as vendors, thus excluding the representing heirs of Leonardo, and Spouses Marcus Jose B. Brillantes and Amelita Catalan-Brillantes, incumbent lessors, as vendees, over a real property situated in Biñan, Laguna, and covered by Transfer Certificate of Title No. T-332305 of the Registry of Deeds of Laguna, for a total purchase price of P2,700,000.00. The Deed stipulated for a payment of P1,500,000.00 upon the signing of the contract, and the balance of P1,200,000.00 to be paid within one (1) month from the receipt of title of the vendees. The contract also stated that the previous contract of lease between the vendors and the vendees shall no longer be effective; hence, the vendees were no longer obligated to pay the monthly rentals on the property. And yet there is a purported Deed of Absolute Sale47 over the same realty between respondents, and including Leonardo as represented by Dalisay, as vendors, and the same spouses, as vendees, for a purchase price of only P1,500,000.00. Notably, this Deed of Absolute Sale already had the signatures of respondents and vendee-spouses. Petitioners claimed that respondents were coaxing Dalisay into signing the same, while respondents said that Dalisay already got a share from this transaction in the amount of P500,000.00. It may also be observed that the time of the execution of this Deed of Absolute Sale, although not notarized as the Deed of Conditional Sale, might not have been distant from the execution of the latter Deed, considering the similar Community Tax Certificate Numbers of the parties appearing in both contracts.

Given these circumstances, this Court finds no grave abuse of discretion on the part of the RTC when it revoked the appointment of respondents as joint special administrators, the removal being grounded on reason, equity, justice, and legal principle. Indeed, even if special administrators had already been appointed, once the probate court finds the appointees no longer entitled to its confidence, it is justified in withdrawing the appointment and giving no valid effect thereto.48

On the other hand, the Court finds the RTC’s designation of Melinda as regular administratrix improper and abusive of its discretion.

In the determination of the person to be appointed as regular administrator, the following provisions of Rule 78 of the Rules of Court, state –

Sec. 1. Who are incompetent to serve as executors or administrators. – No person is competent to serve as executor or administrator who:

(a) Is a minor;

(b) Is not a resident of the Philippines; and

(c) Is in the opinion of the court unfit to execute the duties of the trust by reason of drunkenness, improvidence, or want of understanding or integrity, or by reason of conviction of an offense involving moral turpitude.

x x x x

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 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 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.

Further, on the matter of contest for the issuance of letters of administration, the following provisions of Rule 79 are pertinent –

Sec. 2. Contents of petition for letters of administration. – A petition for letters of administration must be filed by an interested person and must show, so far as known to the petitioner:

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, and the names and residences of the creditors, of the decedent;

(c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters of administration are prayed.

But no defect in the petition shall render void the issuance of letters of administration.

Sec. 3. Court to set time for hearing. Notice thereof. – When a petition for letters of administration is filed in the court having jurisdiction, such court shall fix a time and place for hearing the petition, and shall cause notice thereof to be given to the known heirs and creditors of the decedent, and to any other persons believed to have an interest in the estate, in the manner provided in Sections 3 and 4 of Rule 76.

Sec. 4. Opposition to petition for administration. – Any interested person may, by filing a written opposition, contest the petition on the ground of the incompetency of the person for whom letters are prayed therein, or on the ground of the contestant’s own right to the administration, and may pray that letters issue to himself, or to any competent person or persons named in the opposition.

Sec. 5. Hearing and order for letters to issue. – At the hearing of the petition, it must first be shown that notice has been given as herein-above required, and thereafter the court shall hear the proofs of the parties in support of their respective allegations, and if satisfied that the decedent left no will, or that there is no competent and willing executor, it shall order the issuance of letters of administration to the party best entitled thereto.1avvphi1

Admittedly, there was no petition for letters of administration with respect to Melinda, as the prayer for her appointment as co-administrator was embodied in the motion for the termination of the special administration. Although there was a hearing set for the motion on November 5, 2007, the same was canceled and reset to February 8, 2008 due to the absence of the parties’ counsels. The February 8, 2008 hearing was again deferred to March 10, 2008 on account of the ongoing renovation of the Hall of Justice. Despite the resetting, petitioners filed a Manifestation/Motion dated February 29, 2008,49 reiterating their prayer for partition or for the appointment of Melinda as regular administrator and for the revocation of the special administration. It may be mentioned that, despite the filing by respondents of their Opposition and Comment to the motion to revoke the special administration, the prayer for the appointment of Melinda as regular administratrix of the estate was not specifically traversed in the said pleading. Thus, the capacity, competency, and legality of Melinda’s appointment as such was not properly objected to by respondents despite being the next of kin to the decedent spouses, and was not threshed out by the RTC acting as a probate court in accordance with the above mentioned Rules.

However, having in mind the objective of facilitating the settlement of the estate of Vicente and Maxima, with a view to putting an end to the squabbles of the heirs, we take into account the fact that Melinda, pursuant to the RTC Order dated March 13, 2008, already posted the required bond of P200,000.00 on March 26, 2008, by virtue of which, Letters of Administration were issued to her the following day, and that she filed an Inventory of the Properties of the Estate dated April 15, 2008.50 These acts clearly manifested her intention to serve willingly as administratrix of the decedents’ estate, but her appointment should be converted into one of special administration, pending the proceedings for regular administration. Furthermore, since it appears that the only unpaid obligation is the hospital bill due from Leonardo’s estate, which is not subject of this case, judicial partition may then proceed with dispatch.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated December 16, 2008 and the Resolution dated April 30, 2009 of the Court of Appeals in CA-G.R. SP No. 104683 are AFFIRMED with the MODIFICATION that the Order dated March 13, 2008 of the Regional Trial Court, Branch 24, Biñan, Laguna, with respect to the revocation of the special administration in favor of Renato M. Ocampo and Erlinda M. Ocampo, is REINSTATED. The appointment of Melinda Carla E. Ocampo as regular administratrix is SET ASIDE. Melinda is designated instead as special administratrix of the estate under the same administrator’s bond she had posted. The trial court is directed to conduct with dispatch the proceedings for the

appointment of the regular administrator and, thereafter, to proceed with judicial partition. No costs.

SO ORDERED.


WE CONCUR:


Chairperson






ANTONIO T. CARPIOAssociate JusticeChairperson, Second Division


Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


9.Source: http://www.lawphil.net/judjuris/juri2010/jul2010/gr_187879_2010.html

http://www.lawphil.net/judjuris/juri2010/jul2010/gr_187879_2010.html


Manila

THIRD DIVISION

G.R. No. 181409 February 11, 2010

INTESTATE ESTATE OF MANOLITA GONZALES VDA. DE CARUNGCONG, represented by MEDIATRIX CARUNGCONG, as Administratrix, Petitioner, vs.PEOPLE OF THE PHILIPPINES and WILLIAM SATO, Respondents.

D E C I S I O N

CORONA, J.:

Article 332 of the Revised Penal Code provides:

ART. 332. Persons exempt from criminal liability. – No criminal, but only civil liability shall result from the commission of the crime of theft, swindling, or malicious mischief committed or caused mutually by the following persons:

1. Spouses, ascendants and descendants, or relatives by affinity in the same line;

2. The widowed spouse with respect to the property which belonged to the deceased spouse before the same shall have passed into the possession of another; and

3. Brothers and sisters and brothers-in-law and sisters-in-law, if living together.

The exemption established by this article shall not be applicable to strangers participating in the commission of the crime. (emphasis supplied)

For purposes of the aforementioned provision, is the relationship by affinity created between the husband and the blood relatives of his wife (as well as between the wife and the blood relatives of her husband) dissolved by the death of one spouse, thus ending the marriage which created such relationship by affinity? Does the beneficial application of Article 332 cover the complex crime of estafa thru falsification?

Mediatrix G. Carungcong, in her capacity as the duly appointed administratrix1 of petitioner intestate estate of her deceased mother Manolita Gonzales vda. de Carungcong, filed a complaint-affidavit2 for estafa against her brother-in-law, William Sato, a Japanese national. Her complaint-affidavit read:

I, MEDIATRIX CARUNGCONG Y GONZALE[S], Filipino, of legal age, single, and resident of Unit 1111, Prince Gregory Condominium, 105 12th Avenue, Cubao, Quezon City, after being duly sworn, depose and state that:

1. I am the duly appointed Administratrix of the Intestate Estate of Manolita Carungcong Y Gonzale[s], docketed as Spec. Procs. No. [Q]-95-23621[,] Regional Trial Court of Quezon City, Branch 104, being one (1) of her surviving daughters. Copy of the Letters of Administration dated June 22, 1995 is hereto attached as Annex "A" to form an integral part hereof.

2. As such Administratrix, I am duty bound not only to preserve the properties of the Intestate Estate of Manolita Carungcong Y Gonzale[s], but also to recover such funds and/or properties as property belonging to the estate but are presently in the possession or control of other parties.

3. After my appointment as Administratrix, I was able to confer with some of the children of my sister Zenaida Carungcong Sato[,] who predeceased our mother Manolita Carungcong Y Gonzales, having died in Japan in 1991.

4. In my conference with my nieces Karen Rose Sato and Wendy Mitsuko Sato, age[d] 27 and 24 respectively, I was able to learn that prior to the death of my mother Manolita Carungcong Y Gonzale[s], [s]pecifically on o[r] about November 24, 1992, their father William Sato, through fraudulent misrepresentations, was able to secure the signature and thumbmark of my mother on a Special Power of Attorney whereby my niece Wendy Mitsuko Sato, who was then only twenty (20) years old, was made her attorney-in-fact, to sell and dispose four (4) valuable pieces of land in Tagaytay City. Said Special Power of Attorney, copy of which is attached as ANNEX "A" of the Affidavit of Wendy Mitsuko Sato, was signed and thumbmark[ed] by my mother because William Sato told her that the documents she was being made to sign involved her taxes. At that time, my mother was completely blind, having gone blind almost ten (10) years prior to November, 1992.

5. The aforesaid Special Power of Attorney was signed by my mother in the presence of Wendy, my other niece Belinda Kiku Sato, our maid Mana Tingzon, and Governor Josephine Ramirez who later became the second wife of my sister’s widower William Sato.

6. Wendy Mitsuko Sato attests to the fact that my mother signed the document in the belief that they were in connection with her taxes, not knowing, since she was blind, that the same was in fact a Special Power of Attorney to sell her Tagaytay properties.

7. On the basis of the aforesaid Special Power of Attorney, William Sato found buyers for the property and made my niece Wendy Mitsuko Sato sign three (3) deeds of absolute sale in favor of (a) Anita Ng (Doc. 2194, Page No. 41, Book No. V, Series of 1992 of Notary Public Vicente B. Custodio), (b) Anita Ng (Doc. No. 2331, Page No. 68, Book No. V, Series of 1992 of Notary Public Vicente B. Custodio) and (c) Ruby Lee Tsai

(Doc. No. II, Page No. 65, Book No. II, Series of 1993 of Notary Public Toribio D. Labid). x x x

8. Per the statement of Wendy Mitsuko C. Sato, the considerations appearing on the deeds of absolute sale were not the true and actual considerations received by her father William Sato from the buyers of her grandmother’s properties. She attests that Anita Ng actually paid P7,000,000.00 for the property covered by TCT No. 3148 and P7,034,000.00 for the property covered by TCT No. 3149. All the aforesaid proceeds were turned over to William Sato who undertook to make the proper accounting thereof to my mother, Manolita Carungcong Gonzale[s].

9. Again, per the statement of Wendy Mitsuko C. Sato, Ruby Lee Tsai paid P8,000,000.00 for the property covered by Tax Declaration No. GR-016-0735, and the proceeds thereof were likewise turned over to William Sato.

10. The considerations appearing on the deeds of sale were falsified as Wendy Mitsuko C. Sato has actual knowledge of the true amounts paid by the buyers, as stated in her Affidavit, since she was the signatory thereto as the attorney-in-fact of Manolita Carungcong Y Gonzale[s].

11. Wendy was only 20 years old at the time and was not in any position to oppose or to refuse her father’s orders.

12. After receiving the total considerations for the properties sold under the power of attorney fraudulently secured from my mother, which total P22,034,000.00, William Sato failed to account for the same and never delivered the proceeds to Manolita Carungcong Y Gonzale[s] until the latter died on June 8, 1994.

13. Demands have been made for William Sato to make an accounting and to deliver the proceeds of the sales to me as Administratrix of my mother’s estate, but he refused and failed, and continues to refuse and to fail to do so, to the damage and prejudice of the estate of the deceased Manolita Carungcong Y Gonzale[s] and of the heirs which include his six (6) children with my sister Zenaida Carungcong Sato. x x x3

Wendy Mitsuko Sato’s supporting affidavit and the special power of attorney allegedly issued by the deceased Manolita Gonzales vda. de Carungcong in favor of Wendy were attached to the complaint-affidavit of Mediatrix.

In a resolution dated March 25, 1997, the City Prosecutor of Quezon City dismissed the complaint.4 On appeal, however, the Secretary of Justice reversed and set aside the resolution dated March 25, 1997 and directed the City Prosecutor of Quezon City to file an Information against Sato for violation of Article 315, paragraph 3(a) of the Revised Penal Code.5 Thus, the following Information was filed against Sato in the Regional Trial Court of Quezon City, Branch 87:6

I N F O R M A T I O N

The undersigned accuses WILLIAM SATO of the crime of ESTAFA under Article 315[,] par. 3(a) of the Revised Penal Code, committed as follows:

That on or about the 24th day of November, 1992, in Quezon City, Philippines, the above-named accused, by means of deceit, did, then and there, wil[l]fully, unlawfully and feloniously defraud MANOLITA GONZALES VDA. DE CARUNGCONG in the following manner, to wit: the said accused induced said Manolita Gonzales Vda. De Carungcong[,] who was already then blind and 79 years old[,] to sign and thumbmark a special power of attorney dated November 24, 1992 in favor of Wendy Mitsuko C. Sato, daughter of said accused, making her believe that said document involved only her taxes, accused knowing fully well that said document authorizes Wendy Mitsuko C. Sato, then a minor, to sell, assign, transfer or otherwise dispose of to any person or entity of her properties all located at Tagaytay City, as follows:

1. One Thousand Eight Hundred Seven(ty) One (1,871) square meters more or less and covered by T.C.T. No. 3147;

2. Five Hundred Forty (540) square meters more or less and covered by T.C.T. No. 3148 with Tax Declaration No. GR-016-0722, Cadastral Lot No. 7106;

3. Five Hundred Forty (540) square meters more or less and covered by T.C.T. No. 3149 with Tax Declaration No. GR-016-0721, Cadastral Lot No. 7104;

4. Eight Hundred Eighty Eight (888) square meters more or less with Tax Declaration No. GR-016-1735, Cadastral Lot No. 7062;

registered in the name of Manolita Gonzales Vda. De Carungcong, and once in the possession of the said special power of attorney and other pertinent documents, said accused made Wendy Mitsuko Sato sign the three (3) Deeds of Absolute Sale covering Transfer Certificate of Title [TCT] No. 3148 for P250,000.00, [TCT] No. 3149 for P250,000.00 and [Tax Declaration] GR-016-0735 for P650,000.00 and once in possession of the proceeds of the sale of the above properties, said accused, misapplied, misappropriated and converted the same to his own personal use and benefit, to the damage and prejudice of the heirs of Manolita Gonzales Vda. De Carungcong who died in 1994.

Contrary to law.7

Subsequently, the prosecution moved for the amendment of the Information so as to increase the amount of damages from P1,150,000, the total amount stated in the deeds of sale, to P22,034,000, the actual amount received by Sato.

Sato moved for the quashal of the Information, claiming that under Article 332 of the Revised Penal Code, his relationship to the person allegedly defrauded, the deceased Manolita who was his mother-in-law, was an exempting circumstance.

The prosecution disputed Sato’s motion in an opposition dated March 29, 2006.

In an order dated April 17, 2006,8 the trial court granted Sato’s motion and ordered the dismissal of the criminal case:

The Trial Prosecutor’s contention is that the death of the wife of the accused severed the relationship of affinity between accused and his mother-in-law. Therefore, the mantle of protection provided to the accused by the relationship is no longer obtaining.

A judicious and thorough examination of Article 332 of the Revised Penal Code convinces this Court of the correctness of the contention of the [d]efense. While it is true that the death of Zenaida Carungcong-Sato has extinguished the marriage of accused with her, it does not erase the fact that accused and Zenaida’s mother, herein complainant, are still son[-in-law] and mother-in-law and they remained son[-in-law] and mother-in-law even beyond the death of Zenaida.

Article 332(1) of the Revised Penal Code, is very explicit and states no proviso. "No criminal, but only civil liability[,] shall result from the commission of the crime of theft, swindling or malicious mischief committed or caused mutually by xxx 1) spouses, ascendants and descendants, or relatives by affinity in the same line."

Article 332, according to Aquino, in his Commentaries [to] Revised Penal Code, preserves family harmony and obviates scandal, hence even in cases of theft and malicious mischief, where the crime is committed by a stepfather against his stepson, by a grandson against his grandfather, by a son against his mother, no criminal liability is incurred by the accused only civil (Vicente Alavare, 52 Phil. 65; Adame, CA 40 OG 12th Supp. 63; Cristobal, 84 Phil. 473).

Such exempting circumstance is applicable herein.

WHEREFORE, finding the Motion to Quash Original Information meritorious, the same is GRANTED and, as prayed for, case is hereby DISMISSED.

SO ORDERED.9 (underlining supplied in the original)

The prosecution’s motion for reconsideration10 was denied in an order dated June 2, 2006.11

Dissatisfied with the trial court’s rulings, the intestate estate of Manolita, represented by Mediatrix, filed a petition for certiorari in the Court of Appeals12 which, however, in a decision13 dated August 9, 2007, dismissed it. It ruled:

[W]e sustain the finding of [the trial court] that the death of Zenaida did not extinguish the relationship by affinity between her husband, private respondent Sato, and her mother Manolita, and does not bar the application of the exempting circumstance under Article 332(1) of the Revised Penal Code in favor of private respondent Sato.

We further agree with the submission of the [Office of the Solicitor General (OSG)] that nothing in the law and/or existing jurisprudence supports the argument of petitioner that the fact of death of Zenaida dissolved the relationship by affinity between Manolita and private respondent Sato,

and thus removed the protective mantle of Article 332 of the Revised Penal Code from said private respondent; and that notwithstanding the death of Zenaida, private respondent Sato remains to be the son-in-law of Manolita, and a brother-in-law of petitioner administratrix. As further pointed out by the OSG, the filing of the criminal case for estafa against private respondent Sato already created havoc among members of the Carungcong and Sato families as private respondent’s daughter Wendy Mitsuko Sato joined cause with her aunt [Mediatrix] Carungcong y Gonzales, while two (2) other children of private respondent, William Francis and Belinda Sato, took the side of their father.

There is a dearth of jurisprudence and/or commentaries elaborating on the provision of Article 332 of the Revised Penal Code. However, from the plain language of the law, it is clear that the exemption from criminal liability for the crime of swindling (estafa) under Article 315 of the Revised Penal Code applies to private respondent Sato, as son-in-law of Manolita, they being "relatives by affinity in the same line" under Article 332(1) of the same Code. We cannot draw the distinction that following the death of Zenaida in 1991, private respondent Sato is no longer the son-in-law of Manolita, so as to exclude the former from the exempting circumstance provided for in Article 332 (1) of the Revised Penal Code.

Ubi lex non distinguit nec nos distinguere debemos. Basic is the rule in statutory construction that where the law does not distinguish, the courts should not distinguish. There should be no distinction in the application of law where none is indicated. The courts could only distinguish where there are facts or circumstances showing that the lawgiver intended a distinction or qualification. In such a case, the courts would merely give effect to the lawgiver’s intent. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein.

Further, it is an established principle of statutory construction that penal laws are strictly construed against the State and liberally in favor of the accused. Any reasonable doubt must be resolved in favor of the accused. In this case, the plain meaning of Article 332 (1) of the Revised Penal Code’s simple language is most favorable to Sato.14

The appellate court denied reconsideration.15 Hence, this petition.

Petitioner contends that the Court of Appeals erred in not reversing the orders of the trial court. It cites the commentary of Justice Luis B. Reyes in his book on criminal law that the rationale of Article 332 of the Revised Penal Code exempting the persons mentioned therein from criminal liability is that the law recognizes the presumed co-ownership of the property between the offender and the offended party. Here, the properties subject of the estafa case were owned by Manolita whose daughter, Zenaida Carungcong-Sato (Sato’s wife), died on January 28, 1991. Hence, Zenaida never became a co-owner because, under the law, her right to the three parcels of land could have arisen only after her mother’s death. Since Zenaida predeceased her mother, Manolita, no such right came about and the mantle of protection provided to Sato by the relationship no longer existed.

Sato counters that Article 332 makes no distinction that the relationship may not be invoked in case of death of the spouse at the time the crime was allegedly committed. Thus, while the death

of Zenaida extinguished her marriage with Sato, it did not dissolve the son-in-law and mother-in-law relationship between Sato and Zenaida’s mother, Manolita.

For his part, the Solicitor General maintains that Sato is covered by the exemption from criminal liability provided under Article 332. Nothing in the law and jurisprudence supports petitioner’s claim that Zenaida’s death dissolved the relationship by affinity between Sato and Manolita. As it is, the criminal case against Sato created havoc among the members of the Carungcong and Sato families, a situation sought to be particularly avoided by Article 332’s provision exempting a family member committing theft, estafa or malicious mischief from criminal liability and reducing his/her liability to the civil aspect only.

The petition has merit.

The resolution of this case rests on the interpretation of Article 332 of the Revised Penal Code. In particular, it calls for the determination of the following: (1) the effect of death on the relationship by affinity created between a surviving spouse and the blood relatives of the deceased spouse and (2) the extent of the coverage of Article 332.

Effect of Death on Relationship By Affinity as Absolutory Cause

Article 332 provides for an absolutory cause16in the crimes of theft, estafa (or swindling) and malicious mischief. It limits the responsibility of the offender to civil liability and frees him from criminal liability by virtue of his relationship to the offended party.

In connection with the relatives mentioned in the first paragraph, it has been held that included in the exemptions are parents-in-law, stepparents and adopted children.17 By virtue thereof, no criminal liability is incurred by the stepfather who commits malicious mischief against his stepson;18 by the stepmother who commits theft against her stepson;19 by the stepfather who steals something from his stepson;20 by the grandson who steals from his grandfather;21 by the accused who swindles his sister-in-law living with him;22 and by the son who steals a ring from his mother.23

Affinity is the relation that one spouse has to the blood relatives of the other spouse. It is a relationship by marriage or

a familial relation resulting from marriage.24 It is a fictive kinship, a fiction created by law in connection with the institution of marriage and family relations.

If marriage gives rise to one’s relationship by affinity to the blood relatives of one’s spouse, does the extinguishment of marriage by the death of the spouse dissolve the relationship by affinity?

Philippine jurisprudence has no previous encounter with the issue that confronts us in this case. That is why the trial and appellate courts acknowledged the "dearth of jurisprudence and/or commentaries" on the matter. In contrast, in the American legal system, there are two views on the subject. As one Filipino author observed:

In case a marriage is terminated by the death of one of the spouses, there are conflicting views. There are some who believe that relationship by affinity is not terminated whether there are children or not in the marriage (Carman vs. Newell, N.Y. 1 [Denio] 25, 26). However, the better view supported by most judicial authorities in other jurisdictions is that, if the spouses have no living issues or children and one of the spouses dies, the relationship by affinity is dissolved. It follows the rule that relationship by affinity ceases with the dissolution of the marriage which produces it (Kelly v. Neely, 12 Ark. 657, 659, 56 Am Dec. 288). On the other hand, the relationship by affinity is continued despite the death of one of the spouses where there are living issues or children of the marriage "in whose veins the blood of the parties are commingled, since the relationship of affinity was continued through the medium of the issue of the marriage" (Paddock vs. Wells, 2 Barb. Ch. 331, 333).25

The first view (the terminated affinity view) holds that relationship by affinity terminates with the dissolution of the marriage either by death or divorce which gave rise to the relationship of affinity between the parties.26 Under this view, the relationship by affinity is simply coextensive and coexistent with the marriage that produced it. Its duration is indispensably and necessarily determined by the marriage that created it. Thus, it exists only for so long as the marriage subsists, such that the death of a spouse ipso facto ends the relationship by affinity of the surviving spouse to the deceased spouse’s blood relatives.

The first view admits of an exception. The relationship by affinity continues even after the death of one spouse when there is a surviving issue.27 The rationale is that the relationship is preserved because of the living issue of the marriage in whose veins the blood of both parties is commingled.28

The second view (the continuing affinity view) maintains that relationship by affinity between the surviving spouse and the kindred of the deceased spouse continues even after the death of the deceased spouse, regardless of whether the marriage produced children or not.29 Under this view, the relationship by affinity endures even after the dissolution of the marriage that produced it as a result of the death of one of the parties to the said marriage. This view considers that, where statutes have indicated an intent to benefit step-relatives or in-laws, the "tie of affinity" between these people and their relatives-by-marriage is not to be regarded as terminated upon the death of one of the married parties.30

After due consideration and evaluation of the relative merits of the two views, we hold that the second view is more consistent with the language and spirit of Article 332(1) of the Revised Penal Code.

First, the terminated affinity view is generally applied in cases of jury disqualification and incest.31 On the other hand, the continuing affinity view has been applied in the interpretation of laws that intend to benefit step-relatives or in-laws. Since the purpose of the absolutory cause in Article 332(1) is meant to be beneficial to relatives by affinity within the degree covered under the said provision, the continuing affinity view is more appropriate.

Second, the language of Article 332(1) which speaks of "relatives by affinity in the same line" is couched in general language. The legislative intent to make no distinction between the spouse of one’s living child and the surviving spouse of one’s deceased child (in case of a son-in-law or daughter-in-law with respect to his or her parents-in-law)32 can be drawn from Article 332(1) of the Revised Penal Code without doing violence to its language.

Third, the Constitution declares that the protection and strengthening of the family as a basic autonomous social institution are policies of the State and that it is the duty of the State to strengthen the solidarity of the family.33 Congress has also affirmed as a State and national policy that courts shall preserve the solidarity of the family.34 In this connection, the spirit of Article 332 is to preserve family harmony and obviate scandal.35 The view that relationship by affinity is not affected by the death of one of the parties to the marriage that created it is more in accord with family solidarity and harmony.

Fourth, the fundamental principle in applying and in interpreting criminal laws is to resolve all doubts in favor of the accused. In dubio pro reo. When in doubt, rule for the accused.36 This is in consonance with the constitutional guarantee that the accused shall be presumed innocent unless and until his guilt is established beyond reasonable doubt.37

Intimately related to the in dubio pro reo principle is the rule of lenity.38 The rule applies when the court is faced with two possible interpretations of a penal statute, one that is prejudicial to the accused and another that is favorable to him. The rule calls for the adoption of an interpretation which is more lenient to the accused.

Lenity becomes all the more appropriate when this case is viewed through the lens of the basic purpose of Article 332 of the Revised Penal Code to preserve family harmony by providing an absolutory cause. Since the goal of Article 332(1) is to benefit the accused, the Court should adopt an application or interpretation that is more favorable to the accused. In this case, that interpretation is the continuing affinity view.

Thus, for purposes of Article 332(1) of the Revised Penal Code, we hold that the relationship by affinity created between the surviving spouse and the blood relatives of the deceased spouse survives the death of either party to the marriage which created the affinity. (The same principle applies to the justifying circumstance of defense of one’s relatives under Article 11[2] of the Revised Penal Code, the mitigating circumstance of immediate vindication of grave offense committed against one’s relatives under Article 13[5] of the same Code and the absolutory cause of relationship in favor of accessories under Article 20 also of the same Code.)

Scope of Article 332 of The Revised Penal Code

The absolutory cause under Article 332 of the Revised Penal Code only applies to the felonies of theft, swindling and malicious mischief. Under the said provision, the State condones the criminal responsibility of the offender in cases of theft, swindling and malicious mischief. As an act of grace, the State waives its right to prosecute the offender for the said crimes but leaves the private offended party with the option to hold the offender civilly liable.

However, the coverage of Article 332 is strictly limited to the felonies mentioned therein. The plain, categorical and unmistakable language of the provision shows that it applies exclusively to the simple crimes of theft, swindling and malicious mischief. It does not apply where any of the crimes mentioned under Article 332 is complexed with another crime, such as theft through falsification or estafa through falsification.39

The Information against Sato charges him with estafa. However, the real nature of the offense is determined by the facts alleged in the Information, not by the designation of the offense.40 What controls is not the title of the Information or the designation of the offense but the actual facts recited in the Information.41 In other words, it is the recital of facts of the commission of the offense, not the nomenclature of the offense, that determines the crime being charged in the Information.42 It is the exclusive province of the court to say what the crime is or what it is named.43 The determination by the prosecutor who signs the Information of the crime committed is merely an opinion which is not binding on the court.44

A reading of the facts alleged in the Information reveals that Sato is being charged not with simple estafa but with the complex crime of estafa through falsification of public documents. In particular, the Information states that Sato, by means of deceit, intentionally defrauded Manolita committed as follows:

(a) Sato presented a document to Manolita (who was already blind at that time) and induced her to sign and thumbmark the same;

(b) he made Manolita believe that the said document was in connection with her taxes when it was in fact a special power of attorney (SPA) authorizing his minor daughter Wendy to sell, assign, transfer or otherwise dispose of Manolita’s properties in Tagaytay City;

(c) relying on Sato’s inducement and representation, Manolita signed and thumbmarked the SPA in favor of Wendy Mitsuko Sato, daughter of Sato;

(d) using the document, he sold the properties to third parties but he neither delivered the proceeds to Manolita nor accounted for the same and

(d) despite repeated demands, he failed and refused to deliver the proceeds, to the damage and prejudice of the estate of Manolita.

The above averments in the Information show that the estafa was committed by attributing to Manolita (who participated in the execution of the document) statements other than those in fact made by her. Manolita’s acts of signing the SPA and affixing her thumbmark to that document were the very expression of her specific intention that something be done about her taxes. Her signature and thumbmark were the affirmation of her statement on such intention as she only signed and thumbmarked the SPA (a document which she could not have read) because of Sato’s representation that the document pertained to her taxes. In signing and thumbmarking the document, Manolita showed that she believed and adopted the representations of Sato as to what the document was all about, i.e., that it involved her taxes. Her signature and thumbmark,

therefore, served as her conformity to Sato’s proposal that she execute a document to settle her taxes.

Thus, by inducing Manolita to sign the SPA, Sato made it appear that Manolita granted his daughter Wendy a special power of attorney for the purpose of selling, assigning, transferring or otherwise disposing of Manolita’s Tagaytay properties when the fact was that Manolita signed and thumbmarked the document presented by Sato in the belief that it pertained to her taxes. Indeed, the document itself, the SPA, and everything that it contained were falsely attributed to Manolita when she was made to sign the SPA.

Moreover, the allegations in the Information that

(1) "once in the possession of the said special power of attorney and other pertinent documents, [Sato] made Wendy Mitsuko Sato sign the three (3) Deeds of Absolute Sale" and

(2) "once in possession of the proceeds of the sale of the above properties, said accused, misapplied, misappropriated and converted the same to his own personal use and benefit" raise the presumption that Sato, as the possessor of the falsified document and the one who benefited therefrom, was the author thereof.

Furthermore, it should be noted that the prosecution moved for the amendment of the Information so as to increase the amount of damages from P1,150,000 to P22,034,000. This was granted by the trial court and was affirmed by the Court of Appeals on certiorari. This meant that the amended Information would now state that, while the total amount of consideration stated in the deeds of absolute sale was only P1,150,000, Sato actually received the total amount of P22,034,000 as proceeds of the sale of Manolita’s properties.45 This also meant that the deeds of sale (which were public documents) were also falsified by making untruthful statements as to the amounts of consideration stated in the deeds.

Therefore, the allegations in the Information essentially charged a crime that was not simple estafa. Sato resorted to falsification of public documents (particularly, the special power of attorney and the deeds of sale) as a necessary means to commit the estafa.

Since the crime with which respondent was charged was not simple estafa but the complex crime of estafa through falsification of public documents, Sato cannot avail himself of the absolutory cause provided under Article 332 of the Revised Penal Code in his favor.

Effect of Absolutory Cause Under Article 332 on Criminal Liability For The Complex Crime of Estafa Through Falsification of Public Documents

The question may be asked: if the accused may not be held criminally liable for simple estafa by virtue of the absolutory cause under Article 332 of the Revised Penal Code, should he not be absolved also from criminal liability for the complex crime of estafa through falsification of public documents? No.

True, the concurrence of all the elements of the two crimes of estafa and falsification of public document is required for a proper conviction for the complex crime of estafa through falsification of public document. That is the ruling in Gonzaludo v. People.46 It means that the prosecution must establish that the accused resorted to the falsification of a public document as a necessary means to commit the crime of estafa.

However, a proper appreciation of the scope and application of Article 332 of the Revised Penal Code and of the nature of a complex crime would negate exemption from criminal liability for the complex crime of estafa through falsification of public documents, simply because the accused may not be held criminally liable for simple estafa by virtue of the absolutory cause under Article 332.

The absolutory cause under Article 332 is meant to address specific crimes against property, namely, the simple crimes of theft, swindling and malicious mischief. Thus, all other crimes, whether simple or complex, are not affected by the absolutory cause provided by the said provision. To apply the absolutory cause under Article 332 of the Revised Penal Code to one of the component crimes of a complex crime for the purpose of negating the existence of that complex crime is to unduly expand the scope of Article 332. In other words, to apply Article 332 to the complex crime of estafa through falsification of public document would be to mistakenly treat the crime of estafa as a separate simple crime, not as the component crime that it is in that situation. It would wrongly consider the indictment as separate charges of estafa and falsification of public document, not as a single charge for the single (complex) crime of estafa through falsification of public document.

Under Article 332 of the Revised Penal Code, the State waives its right to hold the offender criminally liable for the simple crimes of theft, swindling and malicious mischief and considers the violation of the juridical right to property committed by the offender against certain family members as a private matter and therefore subject only to civil liability. The waiver does not apply when the violation of the right to property is achieved through (and therefore inseparably intertwined with) a breach of the public interest in the integrity and presumed authenticity of public documents. For, in the latter instance, what is involved is no longer simply the property right of a family relation but a paramount public interest.

The purpose of Article 332 is to preserve family harmony and obviate scandal.47 Thus, the action provided under the said provision simply concerns the private relations of the parties as family members and is limited to the civil aspect between the offender and the offended party. When estafa is committed through falsification of a public document, however, the matter acquires a very serious public dimension and goes beyond the respective rights and liabilities of family members among themselves. Effectively, when the offender resorts to an act that breaches public interest in the integrity of public documents as a means to violate the property rights of a family member, he is removed from the protective mantle of the absolutory cause under Article 332.

In considering whether the accused is liable for the complex crime of estafa through falsification of public documents, it would be wrong to consider the component crimes separately from each other. While there may be two component crimes (estafa and falsification of documents), both felonies are animated by and result from one and the same criminal intent for which there is only

one criminal liability.48 That is the concept of a complex crime. In other words, while there are two crimes, they are treated only as one, subject to a single criminal liability.

As opposed to a simple crime where only one juridical right or interest is violated (e.g., homicide which violates the right to life, theft which violates the right to property),49 a complex crime constitutes a violation of diverse juridical rights or interests by means of diverse acts, each of which is a simple crime in itself.50 Since only a single criminal intent underlies the diverse acts, however, the component crimes are considered as elements of a single crime, the complex crime. This is the correct interpretation of a complex crime as treated under Article 48 of the Revised Penal Code.

In the case of a complex crime, therefore, there is a formal (or ideal) plurality of crimes where the same criminal intent results in two or more component crimes constituting a complex crime for which there is only one criminal liability.51 (The complex crime of estafa through falsification of public document falls under this category.) This is different from a material (or real) plurality of crimes where different criminal intents result in two or more crimes, for each of which the accused incurs criminal liability.52 The latter category is covered neither by the concept of complex crimes nor by Article 48.

Under Article 48 of the Revised Penal Code, the formal plurality of crimes (concursus delictuorum or concurso de delitos) gives rise to a single criminal liability and requires the imposition of a single penalty:

Although [a] complex crime quantitatively consists of two or more crimes, it is only one crime in law on which a single penalty is imposed and the two or more crimes constituting the same are more conveniently termed as component crimes.53 (emphasis supplied)

— ∞ — — ∞ — — ∞ —

In [a] complex crime, although two or more crimes are actually committed, they constitute only one crime in the eyes of the law as well as in the conscience of the offender. The offender has only one criminal intent. Even in the case where an offense is a necessary means for committing the other, the evil intent of the offender is only one.54

For this reason, while a conviction for estafa through falsification of public document requires that the elements of both estafa and falsification exist, it does not mean that the criminal liability for estafa may be determined and considered independently of that for falsification. The two crimes of estafa and falsification of public documents are not separate crimes but component crimes of the single complex crime of estafa and falsification of public documents.

Therefore, it would be incorrect to claim that, to be criminally liable for the complex crime of estafa through falsification of public document, the liability for estafa should be considered separately from the liability for falsification of public document. Such approach would disregard the nature of a complex crime and contradict the letter and spirit of Article 48 of the Revised Penal Code. It would wrongly disregard the distinction between formal plurality and material plurality, as it improperly treats the plurality of crimes in the complex crime of estafa through

falsification of public document as a mere material plurality where the felonies are considered as separate crimes to be punished individually.

Falsification of Public Documents May Be a Necessary Means for Committing Estafa Even Under Article 315 (3[a])

The elements of the offense of estafa punished under Article 315 (3[a]) of the Revised Penal Code are as follows:

(1) the offender induced the offended party to sign a document;

(2) deceit was employed to make the offended party sign the document;

(3) the offended party personally signed the document and

(4) prejudice is caused to the offended party.

While in estafa under Article 315(a) of the Revised Penal Code, the law does not require that the document be falsified for the consummation thereof, it does not mean that the falsification of the document cannot be considered as a necessary means to commit the estafa under that provision.

The phrase "necessary means" does not connote indispensable means for if it did, then the offense as a "necessary means" to commit another would be an indispensable element of the latter and would be an ingredient thereof.55 In People v. Salvilla,56 the phrase "necessary means" merely signifies that one crime is committed to facilitate and insure the commission of the other.57 In this case, the crime of falsification of public document, the SPA, was such a "necessary means" as it was resorted to by Sato to facilitate and carry out more effectively his evil design to swindle his mother-in-law. In particular, he used the SPA to sell the Tagaytay properties of Manolita to unsuspecting third persons.

Applying the above principles to this case, the allegations in the Information show that the falsification of public document was consummated when Sato presented a ready-made SPA to Manolita who signed the same as a statement of her intention in connection with her taxes. While the falsification was consummated upon the execution of the SPA, the consummation of the estafa occurred only when Sato later utilized the SPA. He did so particularly when he had the properties sold and thereafter pocketed the proceeds of the sale. Damage or prejudice to Manolita was caused not by the falsification of the SPA (as no damage was yet caused to the property rights of Manolita at the time she was made to sign the document) but by the subsequent use of the said document. That is why the falsification of the public document was used to facilitate and ensure (that is, as a necessary means for) the commission of the estafa.

The situation would have been different if Sato, using the same inducement, had made Manolita sign a deed of sale of the properties either in his favor or in favor of third parties. In that case, the damage would have been caused by, and at exactly the same time as, the execution of the document, not prior thereto. Therefore, the crime committed would only have been the simple crime of estafa.63 On the other hand, absent any inducement (such as if Manolita herself had been

the one who asked that a document pertaining to her taxes be prepared for her signature, but what was presented to her for her signature was an SPA), the crime would have only been the simple crime of falsification.64

WHEREFORE, the petition is hereby GRANTED. The decision dated August 9, 2007 and the resolution dated January 23, 2008 of the Court of Appeals in CA-G.R. S.P. No. 95260 are REVERSED and SET ASIDE. The case is remanded to the trial court which is directed to try the accused with dispatch for the complex crime of estafa through falsification of public documents.

SO ORDERED.

RENATO C. CORONAAssociate JusticeChairperson

WE CONCUR:

PRESBITERO J. VELASCO, JR.Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice


JOSE C. MENDOZAAssociate Justice



RENATO C. CORONAAssociate JusticeChairperson


Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.


10.Source: http://www.lawphil.net/judjuris/juri2010/feb2010/gr_181409_2010.html

http://www.lawphil.net/judjuris/juri2010/feb2010/gr_181409_2010.html

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