RULE 74 Digests

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RULE 74

Utolo vs Pasion

Nature:

This is an appeal taken by the Leona Pasion Vda de Garcia from the order of the Court of First Instance of the Province of Tarlac appointing the applicant as

judicial administrator of the property left by the deceased Luz Garcia.

Facts:

Juan Garcia Sanchez died intestate, and in the proceedings instituted in theCourt of First Instance of Tarlac for the administration of his property. LeonaPasion Vda. de Garcia, the surviving spouse and the herein oppositor, wasappointed judicial administratrix. The said deceased left legitimate children,named Juan Garcia, jr., Patrocinio Garcia and Luz Garcia who, with the widow,are the presumptive forced heirs. Luz Garcia married the applicant Pablo G.Utulo and during the pendency of the administration proceedings of the saiddeceased, she died in the province without any legitimate descendants, her

only forced heirs being her mother and her husband. The latter commenced inthe same court the judicial administration of the property of his deceased wife(special proceedings No. 4188), stating in his petition that her only heirs werehe himself and his mother-in-law, the oppositor, and that the only property leftby the deceased consisted in the share due her from the intestate of her father,Juan Garcia Sanchez, and asking that he be named administrator of theproperty of said deceased. Leona Pasion Vda de Garcia objected to thepetition, opposing the judicial administration of the property of her daughter andthe appointment of the applicant as administrator. She alleged that inasmuchas the said deceased left no indebtedness, there was no occasion for the said

judicial administration.

Issue:

Whether or not there is a need of appointing judicial administrator

Ruling:

There is no need to appoint judicial administrator. As a general rule that when aperson dies living property in the Philippine Islands, his property should be

judicially administered and the competent court should appoint a qualifiedadministrator, in the order established in the section, in case the deceased leftno will, or in case he had left one should he fail to name an executor therein.This rule, however, is subject to the exceptions established by sections 596 and597 of the Code of Civil Procedure, as finally amended. According to the first,

when all the heirs are of lawful age and there are no debts due from the estate,

they may agree in writing to partition the property without instituting the judicialadministration or applying for the appointment of an administrator.

Construing the scope of section 596, this court repeatedly held that when aperson dies without leaving pending obligations to be paid, his heirs, whether of age or not, are not bound to submit the property to a judicial administration andthe appointment of an administrator are superfluous and unnecessaryproceedings (Ilustre vs.Alaras Frondosa, 17 Phil., 321; Malahacan vs. Ignacio,19 Phil., 434; Bondad vs. Bondad, 34 Phil., 232; Baldemor vs. Malangyaon, 34Phil., 367; Fule vs. Fule, 46 Phil., 317).

The SC finally held that, there is no weight in the argument adduced by theappellee to the effect that his appointment as judicial administrator is necessaryso that he may have legal capacity to appear in the intestate of the deceasedJuan Garcia Sanchez. As he would appear in the said intestate by the right of the representation, it would suffice for him to allege in proof of his interest thathe is a usufructuary forced heir of his deceased wife who, in turn, would be aforced heir and an interested and necessary party if she were living. In order tointervene in said intestate and to take part in the distribution of the property it isnot necessary that the administration of the property of his deceased wife be

instituted — an administration which will take up time and occasioninconvenience and unnecessary expenses.

N B: This case was decided on Sept 30, 1938

Asuncion vs Dela Cruz

Nature: Summary Settlement of the Estate (Rule 74 Sec.2)

Facts:

The above-entitled proceedings originated with a petition presented in the Courtof First Instance of Tarlac for the summary settlement of the estate of the

deceased Benedicta de la Cruz. The petition alleges that said deceased left atthe time of her death five parcels of land all with original certificates of title inthe name of the said deceased. When moved to dismiss the proceedings onthe ground that the said oppositor had filed claims in the cadastral proceedingsfor three of the parcels of land mentioned in the petition. Subsequently thesame oppositor filed another opposition on the ground that the said propertiesdid not belong to the deceased Benedicta de la Cruz but to oppositor's father;that if the deceased had any right over the three parcels of land already beentransferred by her to the oppositor; that an undivided two-thirds of the other twolots had also been ceded to the oppositor for a valuable consideration and thesaid decedent had not repurchased the same; etc. After hearing the saidopposition the court found that two of the lots mentioned in the petition had

been mortgaged to one Juan Cojuangco and another mortgaged also to oneSantiago Nicolas, and for this reason the court denied the petition for summary



settlement. But a motion for reconsideration was presented, and in accordancetherewith the court reconsidered its order of dismissal and granted thesummary distribution prayed for, declaring the children of the decedent as her heirs and assigning to all of them in equal shares, a one-half undivided interestin each of the parcels mentioned in the petition.

Contention of the appellant:

The lower court erred in finding that the three lots were owned by the deceasedand ordering their distribution to her heirs, in the face of the claim of ownershipasserted by the oppositor-appellant; that it erred in giving course to thesettlement in spite of the fact that the petition in cadastral proceedings hadbeen presented wherein the oppositor-appellant had claimed the three parcelsof land in question; and that it erred in not denying the summary settlement inso far as the three lots claimed by the oppositor-appellant are concerned.

Issue:

1.Whether or not the lower court erred in finding that the three lots were ownedby the deceased and ordering their distribution to her heirs, in the face of the

claim of ownership asserted by the oppositor-appellant

2 Whether or not summary settlement should be held in abeyance if there werethird party claiming for the title of the property subject of the said settlement.

Ruling:

1.No. it did not make a definite finding or conclusion to that effect as against theoppositor-appellant. The court only went to say that there was a presumptionthat said properties were still owned by the deceased at the time of her deathand are free from all incumbrances; but it makes the reservation in favor of theoppositor's claim of the right to a separate action if the claims proprietary rights

over said properties. The court states thus in its order:

If Celestino de la Cruz claims some proprietary rights over theseproperties, he can pursue his remedy in a separate and ordinary actionwhich he should bring against the proper parties.

2.No.In the same manner that the court in an administration proceedingdetermines only in a prima facie manner if a property alleged to belong to thestate really belongs to the decedent (Corodova Vda. De Mañalac vs. Ocampo,73 Phil., 661; Baquial vs. Amihan, 49 Off. Gaz., No. 2, p. 511),so also the courtin a summary settlement proceeding only determines prima facie the ownership

and possession of the properties; but such determination does not prevent theheirs or third parties from claiming title adverse to the decedent's, which title or

claims must be decided in a separate suit. (Intestate estate of Miguel Guzman.Guzman vs. Anog and Anog, 37 Phil., 61.) In consonance with these principlesthe orders appealed from found prima facie that the lots sought to be distributedamong the heirs of the decedent belong to and were in the possession of thesaid decedent at the time of her death. The orders do not deprive the oppositor-appellant of his right to claim said properties as his own and to institute aseparate action to assert his title thereto as against the decedent or her heirs.

ADELAIDA S. MANECLANG vs. JUAN T. BAUN and AMPARO S. BAUN, ETAL., defendants. CITY OF DAGUPAN

Facts: On 12 June 1947, Margarita Suri Santos died intestate. She was survived byher husband Severo Maneclang and nine (9) children. On 30 July 1947, a petitionfor the settlement of her estate was filed by Hector S. Maneclang, one of her legitimate children. At the time of the filing of the petition, the ages of her childrenwere as follows:

Hector Maneclang - 21, Cesar Maneclang – 19, Oscar Maneclang – 17, AmandaManeclang – 16, Adelaida Meneclang – 13, Linda Maneclang – 7, PriscilaManeclang – 6, Natividad Maneclang – 3, Teresita Maneclang – 2

No guardian ad litem was appointed by the court for the minor children.

On 2 September 1949, Pedro M. Feliciano, the administrator of the intestate estateof Margarita, filed a petition in asking the court to give him "the authority to disposeof so much of the estate that is necessary to meet the debts enumerated" in thepetition. While notice thereof was given to the surviving spouse, Severo Maneclang,no such notice was sent to the heirs of Margarita.

On 9 September 1949, despite the absence of notice to the heirs, the intestatecourt issued an Order "authorizing the administrator to mortgage or sell so much of the properties of the estate for the purposes (sic) of paying off the obligations"

referred to in the petition.

Pursuant to this Order, Oscar Maneclang, the new administrator of the intestateestate, executed on 4 October 1952 a deed of sale 1 in favor of the City of Dagupan,represented by its mayor, Angel B. Fernandez involving the lot in dispute.

The City of Dagupan immediately took possession of the land and constructedthereon a public market.

On 28 September 1965 (13 yrs after the sale), the new judicial administratrix of theintestate estate, Adelaida S. Maneclang, daughter of the late Margarita Suri Santos,filed an action for the annulment of the sales made by the previous administrator

Ruling:



As to the notification issue. It does not follow that for purposes of complying withthe requirement of notice under Rule 89 of the Rules of the Court, notice to thefather is notice to the children. Sections 2, 4 and 7 of said Rule state explicitly thatthe notice, which must be in be writing, must be given to the heirs, devisees, andlegatees and that the court shall fix a time and place for hearing such petition andcause notice to be given to the interested parties.

There can be no dispute that if the heirs were duly represented by counsel or by aguardian ad litem in the case of the minors, the notice may be given to suchcounsel or guardian ad litem. In this case, however, only the surviving spouse,Severo Maneclang, was notified through his counsel. Two of the heirs, Hector Maneclang and Oscar Maneclang, who were then of legal age, were notrepresented by counsel. The remaining seven (7) children were still minors with noguardian ad litem having been appointed to represent them. Obviously then, therequirement of notice was not satisfied. The requisite set forth in the aforesaidsections of Rule 89 are mandatory and essential. Without them, the authority to sell,the sale itself and the order approving it would be null and void ab initio. 19 Thereason behind this requirement is that the heirs, as the presumptive owners sincethey succeed to all the rights and obligations of the deceased from the moment of the latter's death, are the persons directly affected by the sale or mortage andtherefore cannot be deprived of the property except in the manner provided by law.

For want of notice to the children, the Order approving the sale are all void abinitio as against said children. Severo Maneclang, however, stands on differentground altogether. Having been duly notified of the application, he was bound bythe said order, sale and approval of the latter.

As to whether the plaintiff is in estoppel from assailing the validity of thesale. Estoppel is unavailable as an argument against the administratrix of theestate and against the children.

As to the former, this Court, in Boñaga vs. Soler, supra, reiterated the rule "that adecedent's representative is not estopped to question the validity of his own void

deed purporting to convey land; and if this be true of the administrator as to hisown acts, a fortiori , his successor can not be estopped to question the acts of hispredecessor are not conformable to law." Not being the party who petitioned thecourt for authority to sell and who executed the sale, she cannot be held liable for any act or omission which could give rise to estoppel.

Considering that, except as to Oscar Maneclang who executed the deed of sale inhis capacity as judicial administrator, the rest of the heirs did not participate in suchsale, and considering further that the action was filed solely by the administratrixwithout the children being impleaded as parties plaintiffs or intervenors, there isneither rhyme nor reason to hold these heirs in estoppel. For having executed thedeed of sale, Oscar Maneclang is deemed to have assented to both the motion for and the actual order granting the authority to sell. Estoppel operates solely againsthim.

As to prescription.As to prescription, this Court ruled in the Boñaga case that"[a]ctions to declare the inexsistence of contracts do not prescribe (Art. 1410,N.C.C.), a principle applied even before the effectivity of the new Civil Code(Eugenio, et al. vs. Perdido, et al., supra, citing Tipton vs. Velasco, 6 Phil. 67, andSabas vs. Germa , 66 Phil. 471 )."

As to laches. Laches is different from prescription. As the court held in Nielsen &Co. Inc . vs. Lepanto Consolidated Mining Co., 26 the defense of laches appliesindependently of prescription. While prescription is concerned with the fact of delay,laches is concerned with the effect of delay.

In the instant case, from time the deed of sale in favor of the City of Dagupan wasexecuted on 4 October 1952, up to the time of the filing of the complaint for annulment on 28 September 1965, twelve (12) years, ten (10) months and twenty-four (24) days had elapsed.

It is an undisputed fact that the City of Dagupan immediately took possession of theproperty and constructed thereon a public market; such possession was open,uninterrupted and continuous. Obviously, Hector, Cesar, Oscar and Amanda werealready of legal age when the deed of sale was executed. As it was Oscar whoexecuted the deed of sale, he cannot be expected to renounce his own act. With

respect to Hector, Cesar and Amanda, they should have taken immediate steps toprotect their rights. Their failure to do so for thirteen (13) years amounted to suchinaction and delay as to constitute laches. This conclusion, however, cannot applyto the rest of the children — who were then minors and not represented by anylegal representative. They could not have filed an action to protect their interests;hence, neither delay nor negligence could be attributed to them as a basis for laches. Accordingly, the estate is entitled to recover 5/9 of the questioned property.

JULIAN BOÑAGA vs. ROBERTO SOLER, ET AL.

Facts: Spouses Alejandro Ros and Maria Isaac died in 1935 and 1940,respectively. Intestate proceedings for the settlement of their estate were

commenced. Juan Garza was appointed administrator of the estate. Uponapplication, Juan Garza was authorized by the probate court on to sell certainparcels of land pertaining to the estate. Pursuant hereto, Garza sold said parcels of land on in favor of appellee Roberto Soler. The heirs of the deceased wife, MariaIsaac, sold all their shares and interests over certain parcels of land in favor of appellee Soler.

Sometime during the war, the records of Special Proceeding were destroyed. Uponreconstitution of these records by court order, Julian Boñaga was issued letters of administration. The instant action was filed by Boñaga in his capacity asadministrator, seeking to annul the sales in favor of Roberto Soler on the groundthat said transactions were fraudulent made without notice to the heirs of AlejandroRos of the hearing of the application to sell.



Nothing in the record would show whether, as required by Rule 90, sections 4 and7, the application for authority to sell was set for hearing, or that the court ever caused notice thereof to be issued to the heirs of Alejandro Ros.

Ruling:

A sale of properties of an estate as beneficial to the interested parties, under Sections 4 and 7, Rule 90, must comply with the requisites therein provided, which

are mandatory. Among these requisites, the fixing of the time and place of hearingfor an application to sell, and the notice thereof to the heirs, are essential; andwithout them, the authority to sell, the sale itself, and the order approving it, wouldbe null and void ab initio.

Rule 90, Section 4, does not distinguish between heirs residing in and thoseresiding outside the Philippines. Therefore, its requirements should applyregardless of the place of residence of those required to be notified under said rule.

The contention that the sale was made under Section 2, Rule 90 (wherein notice isrequired only to those heirs, etc., residing in the Philippines), is not substantiated bythe record. Neither the deed of sale on August 30, 1944, nor the orders issued bythe probate court in connection there with, show whether, as required by saidSection 2, the personal properties were insufficient to pay the debts and expensesof administration. There is not even a showing, to start with, that the sale was madefor the purpose of paying debts or expenses of administration (or legacies), acondition which circumscribes the applicability of that section. On the face of thereamended complaint at any rate, it does not appear that the contested sale wasone under section 2 of Rule 90; and the same can not be invoked to sustain themotion to dismiss. Without reception of further evidence to determine whether therequisites of the applicable provisions of the Rules had been followed, the dismissalof the action was erroneous and improvident. Plaintiff should at least have beengiven a chance to prove his case.

As to the plea of estoppel, the rule is that a decedent's representative is not

estopped to question the validity of his own void deed purporting to convey land(Chase vs. Cartwright, 22 Am. St. Rep. 207, and cases cited; Meeks vs. Olpherts,25 L. Ed. (U.S.) 735; 21 Am. Jur. 756, s. 667); and if this be true of theadministrator as to his own acts, a fortiori , his successor can not be estopped toquestion the acts of his predecessor are not conformable to law (cf. Walker vs.Portland Savings Bank, L.R.A. 1915 E, p. 840; 21 Am. Jur. p. 820, s. 785).

As to the plea of prescription. We also find untenable the claim of prescription of the action. Actions to declare the inexistence of contracts do not prescribe (Art.1410, N.C.C.), a principle applied even before the effectivity of the new Civil Code(Eugenio, et al. vs. Perdido, et al., supra., citing Tipton vs. Velasco, 6 Phil. 67 andSabas vs. Germa, 66 Phil. 471). The sale on October 14, 1944 by the heirs of MariaIsaac of whatever interests or participation they might have in the four parcels of land covered by the deed may be valid (De Guanzon vs. Jalandoni and Ramos, L-

5049, October 31, 1953; De Jesus vs. Daza, 77 Phil. 152; Cea vs. C.A., 84 Phil.798), yet it could not have effected an immediate absolute transfer of title toappellee Soler over any part of the parcels of land themselves, much less over their entirety. Necessarily, the sale was subject to the result of the administrationproceedings, a contingency upon which the deed of sale itself expressly foundedthe transaction. By its terms, not only was the existence of possible heirs of Alejandro Ros recognized, but it also provided for the contingency that said heirscould yet be declared or adjudicated in the administration proceedings as the soleowners of the four parcels being sold.

The subsequent registration of those lands covered by the sale, allegedly in theexclusive name of appellee Roberto Soler, gave rise to an action for reconveyancebased on trust. Assuming that this case is one of constructive trust, and under thetheory that actions to recover property held in constructive trust would prescribe,there is here no showing as to when the alleged fraud was discovered (Article 1391,N.C.C.). Hence, it cannot be said that prescription has tolled the action.

Kalalo v. Luz, 34 SCRA 337

On November 17, 1959, plaintiff-appellee Octavio A. Kalalo (hereinafter referred to as appellee), a licensed civil engineer doing business under the firmname of O. A. Kalalo and Associates, entered into an agreement (Exhibit A) 1with defendant-appellant Alfredo J. Luz (hereinafter referred to as appellant), alicensed architect, doing business under firm name of A. J. Luz and Associates,whereby the former was to render engineering design services to the latter for fees, as stipulated in the agreement. Thereafter, Kalalo rendered engineeringservices to Luz.

On December 11, 1961, appellee sent to appellant a statement of account(Exhibit "1"), 3 to which was attached an itemized statement of defendant-appellant's account (Exh. "1-A"), according to which the total engineering feeasked by appellee for services rendered amounted to P116,565.00 from whichsum was to be deducted the previous payments made in the amount of P57,000.00, thus leaving a balance due in the amount of P59,565.00.

On May 18, 1962 appellant sent appellee a resume of fees due to the latter.Said fees, according to appellant, amounted to P10,861.08 instead of theamount claimed by the appellee. On June 14, 1962 appellant sent appellee acheck for said amount, which appellee refused to accept as full payment of thebalance of the fees due him.

On August 10, 1962, appellee filed a complaint against, appellant, containingfour causes of action. In one of the causes of action, appellee alleged that for services rendered in connection with the different projects therein mentioned

there was due him fees in sums consisting of $28,000 (U.S.) and



P100,204.46, excluding interests, of which sums only P69,323.21 had beenpaid, thus leaving unpaid the $28,000.00 and the balance of P30,881.25.

The trial court rendered judgment in favor of Kalalo and against Luz, byordering the latter to pay plaintiff the sum of P51,539.91 and $28,000.00, fromwhich shall be deducted the sum of P69,475.46, which the defendant had paidthe plaintiff,

As to this issue, Luz contends that Kalalo was in estoppel and cannot modifythe statements of accounts that he previously gave to Luz

Issue:

W/N Kalalo is in estoppels.

Held:

"Art. 1431. Through estoppel an admission or representation is renderedconclusive upon the person making it, and cannot be denied or disproved as

against the person relying thereon."

An essential element of estoppel is that the person invoking it has beeninfluenced and has relied on the representations or conduct of the personsought to be estopped, and this element is wanting in the instant case. InCristobal vs. Gomez, 5 this Court held that no estoppel based on a documentcan be invoked by one who has not been mislead by the false statementscontained therein. And in Republic of the Philippines vs. Garcia, et al., 6 thisCourt ruled that there is no estoppel when the statement or action invoked asits basis did not mislead the adverse party. Estoppel has been characterized asharsh or odious, and not favored in law. 7 When misapplied, estoppel becomesa most effective weapon to accomplish an injustice, inasmuch as it shuts a

man's mouth from speaking the truth and debars the truth in a particular case. 8Estoppel cannot be sustained by mere argument or doubtful inference; it mustbe clearly proved in all its essential elements by clear, convincing andsatisfactory evidence. 9 No party should be precluded from making out his caseaccording to its truth unless by force of some positive principle of law, and,consequently, estoppel in pains must be applied strictly and should not beenforced unless substantiated in every particular. 10

The essential elements of estoppel in pais may be considered In relation tothe party sought to be estopped, and in relation to the party invoking theestoppel in his favor. As related to the party to be estopped, the essentialelements are: (1) conduct amounting to false representation or concealment of

material facts or at least calculated to convey the impression that the facts areotherwise than, and inconsistent with, those which the party subsequently

attempts to assert; (2) intent, or at least expectation that this conduct shall beacted upon by, or at least influence, the other party; and (3) knowledge, actualor constructive, of the real facts. As related to the party claiming the estoppel,the essential elements are (1) lack of knowledge and of the means of knowledge of the truth as the facts in question; (2), reliance, in good faith, uponthe conduct or statements of the party to be estopped; (3) action or inactionbased thereon of such character as to change the position or status of the partyclaiming the estoppel, to his injury, detriment or prejudice. 11

The first essential element in relation to the party sought to be estopped doesnot obtain in the instant case, for, as appears in the Report of theCommissioner, appellee testified "that when he wrote Exhibit 1 and preparedExhibit 1-A, he had not yet consulted the services of his counsel and it was onlyupon advice of counsel that the terms of the contract were interpreted to himresulting in his subsequent letters to the defendant demanding payments of hisfees pursuant to the contract Exhibit A." 12 This finding of the Commissioner was adopted by the trial court. 13 It is established, therefore, that Exhibit 1-Awas written by appellee through ignorance or mistake, Anent this matter, it hasbeen held that if an act, conduct or misrepresentation of the party sought to beestopped is due to ignorance founded on innocent mistake, estoppel will not

arise. 14 Regarding the essential elements of estoppel in relation to the partyclaiming the estoppel, the first element does not obtain in the instant case, for itcannot be said that appellant did not know, or at least did not have the meansof knowing, the services rendered, to him by appellee and the fees due thereonas provided in Exhibit A. The second element is also wanting, for, as advertedto, appellant did not rely on Exhibit 1-A but consistently denied the accountsstated therein. Neither does the third element obtain, for appellant did not acton the basis of the representations in Exhibit 1-A, and there was no change inhis position, to his own injury or prejudice

De Castro v. Ginete, 27 SCRA 623

Facts:

Petitioner Luis G. De Castro and respondent Julio G. Ginete were opposingcandidates for the office of municipal mayor of the municipality of Bulan,province of Sorsogon, in the general elections held on November 14, 1967. OnJanuary 1, 1968 the board of canvassers, as constituted by the Commission onElections, proclaimed De Castro as the winning candidate with a margin of 12votes over Ginete.

Ginete filed a motion of protest against the election of De Castro before theCourt of First Instance of Sorsogon, alleging the commission of frauds andirregularities to favor the candidacy of De Castro.



De Castro then filed a so-called "Manifestation and Motion," which is practicallya motion to dismiss the protest upon the ground of estoppel. It is alleged in the"Manifestation and Motion" that Ginete filed his protest after he had made awritten concession of the election of De Castro, and after he had publiclydeclared during the inauguration and induction of De Castro as Mayor that DeCastro had won by a margin of 12 votes and on that occasion he urged thepeople of Bulan to cooperate with the administration of De Castro.

De Castro claims that Ginete is in estoppel due to the following:

Petitioner De Castro invited respondent Ginete to attend the ceremony on hisinauguration as municipal mayor, scheduled for January 6, 1968, and saidrespondent accepted the invitation. During the inauguration respondent Gineteaccompanied the petitioner to the municipal building and to the plaza where theinaugural program was held. Respondent Ginete went up the inaugural stagealong with other officials. Before turning over the symbolic key of responsibilityto petitioner De Castro, respondent Ginete delivered a speech saying that themayor elect had been proclaimed with a majority vote and that the people of Bulan should cooperate with his administration. The outgoing mayor Ginetepleaded with the people that if he had any shortcomings during the four years

of his incumbency that he be forgiven by the people.

It is now urged by petitioner De Castro before this Court that the lower courtshould have dismissed the protest because respondent Ginete, by his own actsand utterances, is estopped from contesting the election of herein petitioner.

Issue:

W/N respondent Ginete is estopped from contesting the election of petitioner De Castro.

Held:

We cannot sustain the contention of De Castro that Ginete is in estoppel tocontest his election. Estoppel rests on this rule: "Whenever a party has, by hisown declaration, act or omission, intentionally and deliberately led another tobelieve a particular thing true, and to act upon such belief, he cannot, in anylitigation arising out of such declaration, act, or omission, be permitted to falsifyit." 2 The elements of estoppel by conduct are: (1) that there must havebeen a representation or concealment of material facts; (2) that therepresentation must have been made with knowledge of the facts; (3) thatthe party to whom it was made must have been ignorant of the truth of thematter; and (4) that it must have been made with intention that the other

party would act upon it. 3

In the case now before Us, it cannot be said that Ginete had by his acts anddeclarations made representations of fact regarding De Castro's election whichwere not known to the latter. Ginete simply made a formal recognition of thefact that De Castro had been proclaimed winner by the municipal board of canvassers of Bulan, and congratulated him — and this Ginete did only after the board of canvassers had proclaimed De Castro winner. It can not be saidthat De Castro came to know about his having won the election because Ginetetold him so. Ginete did not mislead De Castro to the belief that he had won theelection. It can not be said that De Castro was led to act — in assuming theoffice as mayor — because Ginete has made representation to him that he (DeCastro) had won the election. De Castro assumed office as mayor by operationof law, because he was proclaimed elected by the municipal board of canvassers in accordance with law. Ginete, by his acts and/or utterances, hadnot induced De Castro to believe that his election was unquestionable. Gineteis not the one called upon to declare the election of De Castro valid, and so DeCastro can not claim that he was induced to believe that he was elected and heassumed office as mayor simply on the basis of Ginete's acts and utterances.Ginete never made any statement that he would not question the election of DeCastro. The election case, or the election protest, case that Ginete broughtagainst De Castro did not arise out of any act or declaration of Ginete. Theelection was that Ginete brought against De Castro has for its basiscircumstances that had taken place during the election held on November 14,1967, or long before Ginete had recognized the proclamation of De Castro aswinner. If De Castro was not the real winner in the elections it would not helphis case in the election protest to assert that Ginete had congratulated him after he was proclaimed winner by the board of canvassers. We do not see in thefacts and/or circumstances shown by the evidence in this case the elements of estoppel that would bar Ginete from questioning the election of De Castro.

NIELSON & COMPANY vs. LEPANTO CONSOLIDATED MINING COMPANYG.R. No. L-21601, Dec. 17, 1966

FACTS: On Jan. 30, 1937, a 5-year contract was executed between Nielsonand Lepanto whereby Nielson operated and managed the mining propertiesowned by the Lepanto for a management fee of P2,500.00 a month and a 10%participation in the net profits resulting from the operation of the miningproperties. This was later renewed in 1941 for another 5 years.

In January, 1942 operation of the mining properties was disrupted onaccount of the war. The Japanese occupied the mining properties during thewar and were ousted from the mining properties only in Aug. of 1945. Lepantotook possession of the properties and its rehabilitation and reconstruction wasnot completed until 1948. On June 26, 1948 the mines resumed operationunder the exclusive management of Lepanto.

Nielson and Lepanto had a disagreement as to the status of theoperating contract which as renewed expired in 1947. Under its terms themanagement contract shall remain in suspense in case of fortuitous event or



force majeure, such as war or civil commotion, adversely affects the work of mining and milling.

Nielson held the view that, on account of the war, the contract wassuspended during the war; hence the life of the contract should be consideredextended for such time of the period of suspension. On the other hand, Lepantocontended that the contract should expire in 1947 as originally agreed uponbecause the period of suspension accorded by virtue of the war did not operateto extend further the life of the contract.

On Feb. 6, 1958, Nielson brought an action against Lepanto to recover certain sums of money representing damages allegedly suffered by the former in view of the refusal of the latter to comply with the terms of a managementcontract.

ISSUES/ HELD:1. WON the management contract has been suspended as a result of thesupervening war? YES

In order that the management contract may be deemed suspended twoevents must take place which must be brought in a satisfactory manner to theattention of defendant within a reasonable time, to wit: (1) the event constitutingthe force majeure must be reasonably beyond the control of Nielson, and (2) itmust adversely affect the work of mining and milling the company is calledupon to undertake.

The Court take judicial notice that war supervened in our country andthat the mines in the Philippines were either destroyed or taken over by theoccupation forces with a view to their operation, the Lepanto mines included.

Reports by Mr. DeWitt (president of Lepanto) and Mr. Blessing (anofficial Nielson) stated that on February of 1942, the mill, power plant, supplieson hand, equipment, concentrates on hand, and mine, were destroyed uponorders of the U.S. Army to prevent their utilization by the enemy.

Beginning February, 1942 the operation of the Lepanto mines stoppedor became suspended as a result of the destruction of the mill, power plant andother important equipment necessary for such operation in view of a causewhich was clearly beyond the control of Nielson and that as a consequencesuch destruction adversely affected the work of mining and milling which thelatter was called upon to undertake under the management contract.Consequently, by virtue of the very terms of said contract the same may bedeemed suspended from February, 1942 and as of that month the contract stillhad 60 months to go.

The Lepanto mines were liberated on Aug. 1, 1945, but because of theperiod of rehabilitation and reconstruction it cannot be said that the suspensionof the contract ended on that date. Hence, the contract must still be deemedsuspended during the succeeding years of reconstruction and rehabilitation,and this period can only be said to have ended on June 26, 1948 when thecompany officially resumed the mining operations of the Lepanto. The period of suspension is from Feb. 1942 to June 26, 1948 as urged by Nielson.

2. WON such suspension extended the period of the managementcontract for the period of said suspension? YES.

The management contract was extended from June 27, 1948 to June26, 1953, or for a period of 60 months.

Schoely (officer of both companies) and Nestle (employee of Nelson)testified that the suspension had the effect of extending the period of thecontract. The standard force majeure clause embodied in the managementcontract was taken from similar mining contracts regarding mining operationsand the understanding regarding the nature and effect of said clause was thatwhen there is suspension of the operation that suspension meant the extensionof the contract.

Records or minutes of the Special Meeting of the Board of Directors of Lepanto where President DeWitt expressed the opinion that as a result of thesuspension of the mining operation because of the effects of the war the periodof the contract had been extended.

3. WON Nielson is guilty of laches? NO.The elements of laches are the following: (1) conduct on the part of the

defendant, or of one under whom he claims, giving rise to the situation of whichcomplaint is made and for which the complaint seeks a remedy; (2) delay in

asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity toinstitute a suit; (3) lack of knowledge or notice on the part of the defendant thatthe complainant would assert the right on which he bases his suit; and (4) injuryor prejudice to the defendant in the event relief is accorded to the complainant,or the suit is not held barred. Not all the elements are present in this case.

The 1st element is conceded by Nielson when it claimed that Lepantorefused to pay its management fees, its percentage of profits and refused toallow it to resume the management operation

As to the 2nd element, while Nielson knew since 1945 that Lepantorefused to permit it to resume management and that since 1948 Lepanto hasresumed operation of the mines and Nielson filed its complaint only onFebruary 6, 1958, the delay is justified and as such cannot constitute laches.Only a period of less than one year had elapsed from the date of the final denialof the claim[June 25, 1957] to the date of the filing of the complaint [Feb. 6,1958], which certainly cannot be considered as unreasonable delay.

As to the 3rd element, it cannot be said that Lepanto did not know thatNielson would assert its rights on which it based suit. Since March 10, 1945,Nielson already claimed its right to the extension of the contract.

Lastly if there has been some delay in bringing the case to court it wasmainly due to the attempts at arbitration and negotiation made by both parties.

4. WON the action of Nielson prescribed? NO.The defense of laches applies independently of prescription. Laches is

different from the statute of limitations. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a



matter of time; laches is principally a question of inequity of permitting a claimto be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not.Laches applies in equity, whereas prescription applies at law. Prescription isbased on fixed time, laches is not.

Lepanto contended that the period to be considered for the prescriptionof the claim regarding participation in the profits is only four years, because themodification of the sharing embodied in the management contract is merelyverbal, no written document to that effect having been presented. Thiscontention is untenable. A modification, was made in the management contractrelative to the participation in the profits by Nielson, as contained in the minutesof the special meeting of the Board of Directors of Lepanto held on Aug. 21,1940, should be considered as a written contract insofar as the application of the statutes of limitations is concerned. Hence, the action thereon prescribeswithin ten (10) years.

The right of Nielson to its 10% participation in the 1941 operationsaccrued on Dec. 21, 1941 and the right to commence an action thereon beganon Jan. 1, 1942 so that the action must be brought within 10 years from thelatter date.

In this case, even if complaint was filed only on Feb. 6, 1958 (16y, 1m,

5d), the SC held that the action has not yet prescribed for the followingreasons:

a. Operation of the Moratorium Law: moratorium may be imposed in timesof economic crisis or a natural disaster like a flood or earthquake, to allowpeople to return to normal before having to worry about preventingforeclosures and the like. Operation of the Moratorium Law suspends therunning of the statue of limitations. SC held that the Moratorium Law hadbeen enforced for 8 years, 2 months and 8 days. Deducting this period fromthe time that had elapsed since the accrual of the right of action to the dateof the filing of the complaint, there would be less than 8 years to be countedfor purposes of prescription. Hence appellant's action on its claim of 10%

on the 1941 profits had not yet prescribed.b. Arbitration clause in the management contract between Nielson andLepanto. It requires that any disagreement as to any amount of profits shallbe subject to arbitration before an action may be taken to court. Theevidence shows that an arbitration committee was constituted but it failed toaccomplish its purpose on June 25, 1957.

YUSINGCO vs. ONG HING LIANG.R. No. L-26523, Dec.24, 1971

FACTS: On Feb. 13, 1952 Pelagio Yusingco, filed a petition under R.A. No. 26for the reconstitution of certificates of title covering lots nos. 519, 520, 1014,

1015, 1016, and 1020, alleging, that Alfonso Yusingco having died, his childrenformed a partnership called Alfonso Yusingco Hermanos to continue hisbusiness; that the certificates of title to the said lots had also been transferredto Yusingco Hermanos and prayed, that the transfer certificates of title in thename of the Yusingco Hermanos which had been lost or destroyed bereconstituted and the same be cancelled and in lieu thereof transfer certificatesof title be issued in the name of the heirs of Alfonso.

The said petition was opposed by Ong Hing Lian, as administrator of the estate of the late Ong Bonpin, alleging in effect that he and his co-heirs arethe lawful owners and possessors of the lots covered by the certificates of titlesought to be reconstituted as successors of Ong Bonpin, who at the time of hisdeath was the lawful owner thereof.

The lower court issued an order denying the petition for reconstitution,predicated on a finding that Ong Bonpin and his heirs exercised possession of the lots in concept of owners. After remanding the case twice, the Court of Appeals affirmed the decision of the lower court on July 30, 1964.

On Oct. 30, 1964, Yusingco filed this 2nd civil complaint (AccionReivindicatoria with damages and preliminary injunction) against Ong Hing

Lian, in his own behalf and/or as administrator of the estate of Ong Bonpin torecover possession and ownership of the lots.

On Jan. 12, 1965, the defendant filed a motion to dismiss the presentaction contending that the same is barred by prior judgment or by the statute of limitations. On Feb. 23, 1965, defendant filed an amended motion to dismiss,alleging further that the plaintiffs have no legal capacity to sue, the complaintstates no cause of action, the cause of action has been abandoned, and theplaintiffs are in estoppel and/or guilty of laches.

In an order dated June 17, 1965, the lower court dismissed the case.

ISSUES/HELD:

1. WON the 2nd civil complaint (Accion Reivindicatoria with damages andpreliminary injunction) was barred by res judicata? YES.

For a prior judgment to constitute a bar to a subsequent case thefollowing requisites must concur: (1) It must be a final judgment or order; (2) thecourt rendering the same must have jurisdiction over the subject matter andover the parties; (3) It must be a judgment or order of the merits; and (4) theremust be between the two case identity of parties, identity of subject matter, andidentify of action.



A prior judgment is conclusive in a subsequent suit between the sameparties on the same subject matter, and on the same cause of action, not onlyas to matters which were decided in the first action, but also as to every other matter which the parties could have properly set up in the prior suit.

The judgment in the reconstitution case was on the merits and is nowfinal and that the reconstitution court had jurisdiction over the subject matter and over the parties. The present case and the reconstitution suit refer to thesame subject matter — Lots Nos. 519, 520, 1014, 1015, and 1020.

Yusingco dispute the identity of cause of action between the two suits,contending that the 1st action was merely for the reconstitution of certificates,wherein the question of possession and ownership cannot be validly passedupon; whereas the present action is an accion reivindicatoria, the proper actionto determine the question of possession and ownership

In the petition for reconstitution, Yusingco not only asked for thereconstitution of the certificates of title in the name of Yusingco Hermanos butalso that the certificates, once reconstituted, be cancelled and new ones beissued in the name of the heirs of Alfonso Yusingco, asserting in effect their right of ownership over the disputed parcels of lands, and the same was

opposed by Ong Hing Lian who also asserted his right of ownership over thelands. It is patent that the issue of ownership became the determinative factor in the success of the petition for reconstitution.

Between the two suits, there is identity of cause of action — theYusingcos' claim of ownership over the disputed lost as opposed by Ong HingLian. What is different here is the form of action. But the employment of twodifferent forms of action, does not enable one to escape the operation of theprinciple that one and the same cause of action shall not be twice litigated.

The parties in the two cases are not entirely identical. The onlypetitioner in the reconstitution case was Pelagio Yusingco. The CA decision in

the reconstitution case, therefore does not bind his co-heirs, his co-plaintiffs inthe second case for reivindicacion; said decision therefore can only beconsidered as res judicata as far as Pelagio Yusingco is concerned, but not asagainst his co-heirs.

2. WON Yusingco’s claim over the disputed lots is barred by laches? YES.

The claim of ownership of Pelagio Yusingco over the disputed lots is alsobarred by the equitable principle of laches, which requires the ff essentialcomments:

a. conduct on the part of the defendant, or one under whom he claims,

giving rise to the situation that led to the complaint and for which thecomplaint seeks a remedy;

b. delay in asserting the complainant's rights, the complainant having hadknowledge or notice of the defendant's conduct and having been affordedan opportunity to institute a suit;c. lack of knowledge or notice on the part of the defendant that thecomplainant would assert the right on which he bases his suit; andd. injury or prejudice to the defendant in the event relief is accorded to thecomplainant, or the suit is not held barred.

The first element is present because Ong Hing Lian and their predecessors took possession in 1936 of the disputed parcels of land and sincethen have been exercising acts ownership over the same, which constitute aninvasion of Yusingco and his predecessors' alleged rights of ownership andpossession.

The second element is present because from 1936 Yusingco couldhave instituted the proper action to recover possession and ownership of thedisputed lots, but notwithstanding the invasion of their alleged rights of possession and ownership, Yusingco knowing of the intrusion because of theopen, adverse and continuous possession by the appellees and their predecessors instituted a suit only on Oct. 30, 1964 or after 28 years. The factthat a petition for reconstitution of certificates of title was filed by Yusingco onFeb. 13, 1952, does not alter the situation; because even if we count as of thatdate (Feb. 13, 1952), the fact of delay as an element of laches still obtainsconsidering that as of that date a period of 16 years had elapsed from 1936.

The third element is likewise present, since from the time Ong Bonpinand his predecessors took possession of the disputed lots, no voice of protestwas raised by Yusingco even though he knew of the construction of thebuildings being undertaken by the appellees on the disputed lots.

Clear also that the fourth element is present, considering that theappellees will, in the event relief is granted to the Yusingcos, be deprived notonly of the lots which they acquired for valuable consideration but also of thevaluable permanent improvements which they have introduced on the disputedlots.

VILLALUZ vs. NEMEG.R. No. L-14676 January 31, 1963

Facts: Maria Rocabo died intestate on February 17, 1937, leaving a parcel of land and granted her under Homestead Patent. She has 6 children: Pedro,Severina, Gregoria, Sinforosa, Patricia and Maria.

After the approval of her application, but before granting of the patent, MariaRocabo donated the southern portion of the land to Maria, and the northernportion to Patricia, in two notarial deeds donation, giving them the right topresent their deeds of donations to the Bureau of Lands. Maria and Patricia,however, forgot and cared not to present the deeds of donation to the Bureau

of Lands.



On March 27, 1930, the patent was granted and O.C.T. No. 217 was issued inthe name of Maria Rocabo. Carlos de Jesus, Maria, Patricia and Sinforosa (3sisters) executed a deed of extrajudicial partition among themselves, to theexclusion and without the knowledge and consent of their nephews and nieces,and in virtue thereof, O.C.T. No. 217 was cancelled and Transfer Certificate of Title No. 269 was issued in their names after having made representations thatthey were the only heirs of their mother, Maria Rocabo.

Plaintiffs filed a complaint for partition of said land and recovery of their respective shares on the property and accounting of the fruits thereof.

RTC held that the plaintiffs' cause of action had already prescribed.

Issue: WON there was prescription?

Held: No. Sec. 4, Rule 73 of the Rules refers only to the settlement anddistribution of the estate of the deceased by the heirs who make such partitionamong themselves in good faith, believing that they are the only heirs with theright succeed.

In the case at bar, however, the surviving sisters could not have ignored thatthey had co-heirs, the children of the 3 brothers who predeceased their mother.Considering that Maria Rocabo died during the regime of the Spanish CivilCode, the distribution of her properties should be governed by said Code,wherein it is provided that between co-heirs, the act to demand the partition of the inheritance does not prescribe. Verily the 3 living sisters were possessingthe property as administratrices or trustees for and in behalf of the other co-heirs, plaintiffs-appellants herein, who have the right to vindicate their inheritance, regardless of the lapse of time.

Moreover, the acquisition of the land in question is governed by the Public Land

Act No. 141 and the Land Registration Law Act No. 496. And considering thatthe deed of sale had not been registered in accordance with the said laws, thesame did not constitute a conveyance which would bind or affect the land,because the registration of a voluntary sale of land is the operative act thattransmits or transfers title.

JAVIER vs. MAGTIBAYG.R. No. L-6829 December 29, 1954

Facts: Rufina Mercado died intestate, survived by her second husband EulogioMagtibay, her only living daughter Catalina Javier and the descendants of her two deceased daughters — all three daughters being of the first marriage.Shortly after Rufinas' death, these heirs made an extrajudicial partition of her properties.

Alleging that there were some properties not included in the partition, one of theheirs, Catalina Javier, petitioned the court for letters of administration and theappointment of herself as administratrix. The other heirs opposed the petitionon the ground that there was not necessity for subjecting the estate to judicialadministration since, according to them, the decedent left no debts, all her properties had already been partitioned and the heirs were all of age or represented by guardian.

Issue: Is the court justified in issuing letters of administration?

Held: No. When a person dies without leaving pending obligations to be paid,his heirs, whether of age or not, are bound to submit the property to judicialadministration, which is always long and costly, or to apply for theappointment of an administrator by the court, "for in such the judicialadministration and the appointment of an administrator are superflousand unnecessary proceedings."

Where administration proceeding is unnecessary because the estate has nodebts and the more expeditious remedy by partition is available the heirs or themajority of them may not be compelled to submit the estate to such proceeding.

Since the property of the deceased belongs, from the moment of his death, tothe heirs, "what reason can there be," if there are no debts, "for theappointment of a judicial administrator to administer the estate for them and todeprive the real owners of their possession to which they are immediatelyentitled." Withholding the inheritance from the heirs by subjecting it to anadministration proceeding for no useful purpose, would only unnecessarilyexpose it to the risk of being wasted or squandered as not infrequentlyhappens.

Take note of the exception to the rule: Section 1 of Rule 74 "does notpreclude the heirs from instituting administration proceedings, even if the estatehas no debts or obligation, if they do not desire to resort for good reasons anordinary action of partition." That statement, it should be noted, sanctionsrecourse to an administration proceeding even if the estate has no debts onlyif , as heren expressly stated, the heirs have good reasons for not resortingto an action for partition, and is thus a reaffirmance rather than a repudiationof the doctrine being in line with its policy that where partition is possible, either in or out of court, the estate should not be burdened with an administrationproceeding without good and compelling reasons.

There appearing to be no good reason for burdening of the estate of thedeceased Rufina Mercado with the costs and expenses of an administrationproceeding, the trial court was not justified in issuing letters of administration.



JOSE McMICKING vs. BENITO SY CONBIENGG.R. No. L-6871 January 15, 191221 Phil 211

Road Map:

1902 – Margarita Jose (died) – Engracio Palanca (administrator) – MarianoOcampo Lao Sempco and Dy Cunyao (surities)1904 – Mariano Ocampo Lao Sempco (died) – Doroteo Velasco(administrator) - Mariano Velasco and Pio de la Guardia Barretto (surities)1905 - Pio de la Guardia Barretto (died) - Benito Sy Conbieng(administrator)

Facts: In 1902 one Margarita Jose, died and one Engracio Palanca wasappointed administrator with the will annexed of the estate of the said MargaritaJose, and Mariano Ocampo Lao Sempco and Dy Cunyao became hissureties.

After the execution of this bond said Palanca, as such administrator, tookpossession of all the property of the said Margarita Jose. In 1904, MarianoOcampo Lao Sempco died in the city of Manila. CFI made an order directingthe Palanca to furnish a bond to take the place of the undertaking upon whichsaid Mariano Ocampo and Dy Cuyao. The bond thus required was duly filedand the new surities thereon being Juan Fernandez, Luis Saenz deVismanos and Alejandro Palanca.

In the same year 1904, Doroteo Velasco was appointed administrator of Mariano Ocampo Lao Sempco and Mariano Velasco and Pio de la GuardiaBarretto qualified as sureties of the said administrator. Doroteo Velasco, asadministrator, filed with the court a complete report and inventory of theproperty of the deceased, together with a statement of all his debts andliabilities. As a part of this report and inventory said administrator filed aninstrument signed by all of the persons interested in the estate of the said

Mariano Ocampo agreeing to the partition of the estate among themselveswithout proceedings in court, at the same time assuming the payment of allobligations against the estate.

The CFI, upon the request of the administrator and of all parties interested inthe estate of the said Mariano Ocampo, entered an order in said agreement.Pursuant to such agreement and order of the court approving the same,Doroteo Velasco, as administrator, delivered to the devisees and legatees of Mariano Ocampo, all of the property of said decedent pursuant to the terms of said agreement of partition, leaving in the hands of the administrator noproperty or thing of value whatsoever belonging to the said estate. From thattime forward said administrator has not had in his possession or control any of

the assets of the said estate and has not had any participation in the

management thereof. At the time the agreement for participation was made andsigned and at the time of the distribution of the property of the estate pursuantthereto, no committee had been appointed to hear claims against the estate of the said Mariano Ocampo, and no notice had been published to creditors of thesaid deceased to present their claims against the said estate in the manner prescribed by law.

In 1908, Palanca was removed from office as administrator of the estate of said

Margarita Jose and Jose McMicking, was appointed in his stead. Palancarefused to render an account of the property and funds of the estate of the saidMargarita Jose. Instead of so doing, he retained possession of said propertyand funds, absconded with the same, and never returned to the PhilippineIslands.

In 1909, Jose McMicking, as administrator, made an application to the court for the appointment of commissioners of the estate of said Mariano Ocampo for the purpose of hearing claims against the estate. The commission having beenappointed and qualified, a claim was presented to it by the plaintiff based uponthe defalcation of said Engracio Palanca, as administrator, which claim wasallowed by said commission and later approved by the court, which directed

that the said claim be paid by Doroteo Velasco, if he had sufficient funds tomake such payment. No part of the sum thus found to be due by thecommission has been paid to the representative of the estate of said MargaritaJose.

In 1905, Pio de la Barretto died and letters of administration were issued toBenito Sy Conbieng. In 1909, upon the application of McMicking, a committeewas appointed by CFI Manila to appraise the estate of the said Pio de laGuardia Barretto, deceased, and to hear claims presented against his estate.The claim so presented against the estate of Pio de la Guardia Barretto,deceased, was disallowed by the committee thereof.

Upon these facts the court having heard the evidence and the arguments of counsel, rendered judgment in favor of the defendant and against the plaintiff,dismissing the complaint upon merits, without costs.

Hence this appeal.

Held: The judgement must be affirmed base upon the ground that DoroteoVelasco, for whom the deceased Pio de la Guardia Barretto was surety, wouldnot have been liable himself had this action been commenced against him. If the principal is not liable upon the obligation, the surety cannot be.At the head of the law of administration of the Philippine Islands standssections 596 and 597 of the Code of Civil Procedure. They are as follows:

SEC. 596. Settlement of intestate estates, without legal proceedings, incertain cases. — Whatever all the heirs of a deceased person are of lawful



age and legal capacity, and their are no debts due from the intestate estate,or all the debts have been paid by the heirs, the heirs may, by a familycouncil as shown under Spanish law, or by agreement between themselves,duly executed in writing, apportion and divide the estate among themselves,as they may see fit, without proceedings in court.SEC. 597. In such case distributees liable for debts. — But if it shall appear,at any time within two years after such settlement and distribution of theestate, that there are debts outstanding against the estate which have notbeen paid, any creditor may compel the settlement of the estate in thecourts in the manner hereinafter provided, unless his debt shall be paid, withinterest; and the administrator appointed by the court may recover theassets of the estate from those who have received them, for the purpose of paying the debts; and the real estate belonging to the deceased shallremain charged with the liability to creditors for the full period of two yearsafter such distribution, notwithstanding any transfers thereof that may havebeen made.

These sections provide for the voluntary division of the whole property of thedecedent without proceedings in court. These provisions should, therefore, begiven the most liberal construction so that the intent of the framers may be fullycarried out. In the case at the bar we are of the opinion that, the decision of theproperty of Mariano Ocampo, deceased, falls within the provisions of saidsections and may be termed, a partition of the property of a decedent without legal proceedings within the meaning of those sections. The factof the prior appointment of an administrator and the filing of an inventory beforesuch partition is of no consequence so far as the right of the owners to partitionis concerned. The only requisite for such petition prescribed by the law isthat "there are no debts . . . or all the debts have been paid by the heirs." When the condition is fulfilled the partition can take place, no matter what stagethe administration may have reached.The basis of the liability of a surety on an administrators' bond is the faultor failure of the principal. The liability of the principal precedes that of thesurety. If Velasco incurred no liability, then his surety incurred none. When thepersons interested in the estate of Mariano Ocampo agreed voluntarily upon a

partition and division of the property of said estate and the actual partitionfollowed, the matter passed out of the hands of Velasco as administrator.Observance of the law discharges obligations; it does not create them; and anobligation once discharged cannot be re-acted by the act of others in which theperson as to whom it was discharged takes no part.

Moreover, the sureties of an administrator so appointed cannot be held liablefor property which by force of law has been taken from the principal and itsownership and control turned over to others. Their obligation is that their principal shall obey the law in the handling and distribution of the estate. Their obligation is discharged when the estate is legally turned over to those entitledthereto. The law requires the principal to turn it over to those who bring

themselves within the provisions of section 596. Having turned over the whole

estate under the compelling power of the law, his obligation ceased. Theresponsibility of the sureties ceased at the same time. Without their consentanother obligation could not be imposed upon them in relation to the sameprincipal, and the same property, or apart thereof, especially after the lapse of two years. Their undertaking was that their principal should discharge oneobligation, not two.

It requires no argument to demonstrate that the administration contemplated by

section 597 is a new administration and one entirely apart from any other administration theretofore had. This section requires the appointment of a newadministrator, with a new undertaking. The administration under the section isdistinct and separate from any administration which may have been in progressat the time of the partition and division under section 596.After the partition and division provided for in sections 596 and 597 have beenfully consummated, no further administration of the estate can be had unlessthere occur the following requisites:1. There must have been discovered a claim against the estate "within twoyears after such settlement and distribution of estate."2. The creditor holding the claim must be the person who moves the court for the appointment of an administrator.

In the case at bar:1. No debt was discovered during the prescribed period. It was nearly four

years after the partition of the estate and the taking possession by theheirs of their respective portions before it was even discovered thatPalanca had been guilty of converting the property of the estate to hisown use; and, so far as the records shows, it was nearly five yearsbefore the alleged claim against the estate of Mariano Ocampo wasfixed; and

2. No creditor made his application.

The necessary conclusion is that the appointment of commissioners to hear the

claim above referred to was beyond the powers of the court and was without jurisdiction. The finding of the commissioners had no force or effect. It gave noright against the estate and none against the so-called administrator.

This section creates a statute of limitations which deprives all debts which arenot discovered within the prescribed time of the power of requiring anadministration of the estate. The administration of the estate after the

partition under the law has been accomplished depends upon thediscovery of the debt "at any time within two years after such settlement and distribution of the estate." The law does not operate unless that discovery is made within the time prescribed.

The contention that upon the assumption that a partition is void unlessevery debt is paid or provided for by the petitioning parties, and may therefore



be entirely disregarded by the creditor holding a claim either unpaid or provided for. We do not believe that this assumption is warranted. In the first place, wemust remember that the partition proceedings in question are proceedings out of court. Consequently there is no prescribed method of ascertaining and settling claims. The appointment of commissioners, the publication of notice tocreditors, and all the other proceedings necessary in cases of administration incourt are not required in partition out of court .

Second, it was not the intention of the law to pronounce the partition void of noeffect simply because not all of the debts were paid before the partition wasmade. The fact of non payment cannot, then, because by the creditor as areason for attacking the partition directly ; that is, by asserting that, inasmuch asa payment of all the debts is a condition precedent to the right of partition, suchpartition cannot legally and validly take place while a debt is outstanding. Themere fact, therefore, that a creditor was not paid before the partition took placefurnishes no ground for a revocation of the partition. It simply provides a factwhich he may urge as a reason for the appointment of an administrator and theconsequent administration of so much of the estate as may be necessary topay the debt discovered.

DAMASA ALCALA vs. MODESTA PABALANG.R. No. L-6463 August 12, 191119 Phil 520

Facts: On April 23, 1897, Juan Banatin died, leaving a widow and seventeennieces and nephews. That on the June 13, 1987, the said widow and all of theseventeen nieces and nephews, except Tranquilina Banatin, entered into avoluntary agreement among themselves for the division "entre ellos," of all of the property left by the said Juan Banatin, deceased, except the house. That bythe terms of said agreement, the said house was to remain undivided and thewidow should receive the one-half of the usufruct of said house during her lifetime. That the other one-half of the usufruct should be distributed equallyamong the other seventeen heirs and Francisco Salgado, one of the nephews,should administer the said house, collecting the rents of the same and deliver one-half to the widow and the other one-half to the nieces and nephews.Francisco Salgado, having failed to pay to Damasa Alcala her share of theusufruct of said property, was sued by her and a judgment was finally renderedagainst him for the same.

In 1907, one-half of the undivided property in question was sold to one MacarioDecena. In October 1908, the said one-half of the property in question wasrepurchased by the heirs of Francisco Salgado. The money used inrepurchasing the property by the heirs of Francisco Salgado was the money of four of the heirs of Juan Banatin to wit: Modesta Pabalan, Procopio Pabalan,Basilio Salgado, and Juan Banay-banay and not the money of FranciscoSalgado. Thirteen of the nieces and nephews or heirs of Juan Banatin, by

means of a public document, recognized the right of the said Modesta Pabalan,Procopio Pabalan, Basilio Salgado, and Juan Banay-banay as the owners of the one-half of the undivided property in question, and thereafter appointedModesta Pabalan as "administradora" of all of the house in question, insubstitution of the said Francisco Salgado deceased.

Damasa Alcala presented a petition in the CFI of Laguna, praying that she beappointed administratrix of the property in question which was granted.

Issue: WON the appointment of Damasa Alcala as an administratrix correct.

Held: No.

The lower court in appointing the Alcala as administratrix of the property inquestion, evidently did so upon the theory that the said property was still theproperty of the estate of Juan Banatin. In this theory the lower court wasmistaken. There was nothing left of the estate of Juan Banatin to beadministered. The heirs by mutual agreement had divided the property amongthemselves.

After the actual division of the estate among themselves they became theabsolute owners of their respective allotments and were tenants in common of that portion of the property which remained pro indiviso. After the mutualagreement among themselves for the division of the estate, either actuallydistributing their respective shares or leaving the same undivided, the propertyin question was no longer the property of the estate of Juan Banatin, but theundivided property of the heirs.

There was no occasion and no reason for the appointment of an administrator by the probate court, and, therefore, the judgment of the lower court appointingDamasa Alcala as administratrix of the estate of Juan Banatin for the purposeof administering the property mentioned in paragraph 4 of the petition, is hereby

revoked.

Hernandez v, Andal, 78 Phil 196

Lajom v. Viola, 60 OG 452

VICENTA FALCATAN vs. ANASTACIO SANCHEZ (Unreported case)

Appeal from a decision of the CFI of the City of Zamboanga providing for thesummary settlement of the estate of Patricio Sanchez, deceased. The mainissue refers to the manner in which the lot in question shall be divided.

Appellant assails the decision upon the ground that in proceedings for thesummary settlement of the estate of a deceased person under section 2 Rule



74, the court has no jurisdiction to pass upon the question of title to realproperty. This is true only where the title is disputed by a third person, not bythe surviving spouse or heirs of the deceased, as successors of the latter.There are 2 conjugal partnerships involved here. Under the circumstances, itwould be fair to hold that the property in question belongs to the 2 conjugalpartnerships, share and share alike.

HEIRS OF JOAQUIN TEVES vs. COURT OF APPEALS and the HEIRS OF

ASUNCION IT-IT G.R. No. 109963 October 13, 1999

Marcelina Cimafranca and Joaquin Teves had nine children, namely Teotimo,

Felicia, Pedro, Andres, Asuncion, Gorgonio, Cresenciano, Arcadia and Maria.

After they died, intestate and without debts, in 1943 and 1953, respectively,

their children executed extrajudicial settlements purporting to adjudicate unto

themselves the ownership over two parcels of land belonging to their deceased

parents and to alienate their shares thereto in favor of their sister Asuncion

Teves.

On May 9, 1984, plaintiffs-appellants Ricardo, son of Cresenciano, and Arcadia

Teves filed a complaint with the RTC of Negros Oriental for the partition andreconveyance of two parcels of land located in Dumaguete, designated as Lots769-A and 6409, against the heirs of Asuncion Teves. The complaint wassubsequently amended to include Maria Teves and the heirs of Teotimo,Felicia, Pedro, and Gorgonio Teves as plaintiffs. They alleged that defendants-appellees, without any justifiable reason, refused to partition the said parcels of land and to convey to plaintiffs their rightful shares. The present controversyinvolves only Marcelina Cimafranca's one-fourth (1/4) share in the land,designated as Lot 769-A.

On June 13, 1956, Teotimo, Felicia, Pedro, Asuncion, Gorgonio and ArcadiaTeves executed a document entitled "Settlement of Estate and Sale,"

adjudicating unto themselves, in equal shares, Lot 769-A and conveying their shares, interests and participations over the same in favor of Asuncion Tevesfor the consideration of P425.00. A similar deed denominated "ExtrajudicialSettlement and Sale” was signed by Maria Teves on April 21, 1959. Under suchdeed, Maria conveys her own share over Lot 769-A in favor of Asuncion Tevesfor the consideration of P80.00. The two settlements were denounced by theplaintiffs as spurious. In answer to plaintiffs-appellants' charges of fraud,defendants-appellees maintained that the assailed documents were executedwith all the formalities required by law and are therefore binding and legallyeffective as bases for acquiring ownership or legal title over the lots in question.Furthermore, it is contended that plaintiffs-appellants have slept on their rightsand should now be deemed to have abandoned such rights.

The trial court ruled in favor of defendants-appellees and rendered judgmentdismissing the complaint with costs against plaintiffs-appellants. The Court of Appeals upheld the trial court's decision.

Issue 1: Are the extrajudicial settlements executed by the heirs of Teves valid?

Held: YES. For a partition pursuant to section 1 of Rule 74 to be valid, thefollowing conditions must concur: (1) the decedent left no will; (2) the decedent

left no debts, or if there were debts left, all had been paid; (3) the heirs are all of age, or if they are minors, the latter are represented by their judicial guardian or legal representatives; (4) the partition was made by means of a publicinstrument or affidavit duly filed with the Register of Deeds.

We uphold, finding no cogent reason to reverse, the trial and appellate courts'factual finding that the evidence presented by plaintiffs-appellants is insufficient to overcome the evidentiary value of the extrajudicial settlements. The deedsare public documents and it has been held by this Court that a public documentexecuted with all the legal formalities is entitled to a presumption of truth as tothe recitals contained therein. In order to overthrow a certificate of a notarypublic to the effect that the grantor executed a certain document and

acknowledged the fact of its execution before him, mere preponderance of evidence will not suffice. Rather, the evidence must be so clear, strong and convincing as to exclude all reasonable dispute as to the falsity of thecertificate. When the evidence is conflicting, the certificate will be upheld. Theappellate court's ruling that the evidence presented by plaintiffs-appellants doesnot constitute the clear, strong, and convincing evidence necessary toovercome the positive value of the extrajudicial settlements executed by theparties, all of which are public documents, being essentially a finding of fact, isentitled to great respect by the appellate court and should not be disturbed onappeal.

The division of Lot 769-A was embodied in two deeds. The first extrajudicial

settlement was entered into by Teotimo, Felicia, Pedro, Gorgonio, Arcadia andAsuncion Teves in 1956 , while the second deed was executed in 1959 by

Maria Teves. Cresenciano was not a signatory to either settlement. However, in

contrast to the extrajudicial settlement covering Lot 6409, the two extrajudicial

settlements involving Lot 769-A do not purport to exclude Cresenciano from his

participation in Lot 769-A or to cede his share therein in favor of Asuncion. The

settlement clearly adjudicated the property in equal shares in favor of the eight

heirs of Marcelina Cimafranca. Moreover, the deeds were intended to convey to

Asuncion Teves only the shares of those heirs who affixed their signatures in

the two documents.



Issue 2: Does the non-registration of an extrajudicial settlement affect its

intrinsic validity?

Held: No. In the case of Vda. de Reyes vs. CA, the Court, interpreting section1 of Rule 74 of the Rules of Court, upheld the validity of an oral partition of thedecedent's estate and declared that the non-registration of an extrajudicialsettlement does not affect its intrinsic validity. It was held in this case that —

[t]he requirement that a partition be put in a public document and registered hasfor its purpose the protection of creditors and at the same time the protection of the heirs themselves against tardy claims. The object of registration is to serveas constructive notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities does not come into playwhen there are no creditors or the rights of creditors are not affected. Where nosuch rights are involved, it is competent for the heirs of an estate to enter intoan agreement for distribution in a manner and upon a plan different from thoseprovided by law.

Thus, despite its non-registration, the extrajudicial settlements involving Lot769-A are legally effective and binding among the heirs of Marcelina

Cimafranca since their mother had no creditors at the time of her death.

G.R. No. L-5217 May 13, 1953Intestate Estate of the deceased, CARLOS VELORIA. VICENTE VILORIA,petitioner-appelle, vs. ISIDRO VILORIA, oppositor-appellant.

FACTS:On May 10, 1948, petitioner Vicente Viloria filed in the CFI of

Pangasinan a petition for summary distribution of the properties left by thedeceased Carlos Viloria among the petitioner and Isidoro Viloria.

After several postponement of the hearing, the parties, assisted by their respective attorneys, submitted a written stipulation whereby one-fourth portionon the western side of lot No. 3436 and a one-fourth portion of the northeasternside of lot No. 3394 are ceded to the Isidoro Viloria and the remaining three-fourths of said lots are ceded to the petitioner Vicente Viloria.

In view of this stipulation, the CFI of Pangasinan rendered a decisionon March 8,1951, that the dispositive parts of which reads as follows: “… saidproperties be summarily adjudicated in accordance with the stipulatedagreement submitted by said heirs on February 26,1951 and which is herebyapproved, subject, however, to the provision of section 4, Rule 74 of the Rulesof Court.”

Notice of this decision was served on the parties, thru their respectiveattorneys, on March 13, 1951. On August 1, 1951, the oppositor, Isidoro Viloria,thru another counsel filed a petition praying that said decision be set aside and

a trial on the merits be ordered, on the ground that the oppositor, being

illiterate, does not know the true contents of the stipulation on which of thedecision was based, and that said decision came to his personal knowledgeonly on July 23, 1951.

ISSUE:Whether or not the stipulation or agreement is binding between the

parties.

RULING: YES.Appellant argued that his petition is one for relief under Rule 38 of the

Rules of Court, founded on fraud or mistake consisting in the fact that hesigned the stipulation in question in the belief that it adjudicated to him one-half of the entire estate left by the deceased Carlos Viloria. We cannot accept theappellant's position. The stipulation bore not only his signature but also that of his attorney, and during the hearing held on March 5, 1951, he confirmed, uponbeing questioned by the trial Judge, his thumbmark appearing on the documentcontaining the stipulation. His attorney was also present at the hearing, and itcannot be supposed, in the absence of any showing to the contrary, that thelatter acted irregularly. Indeed, the appellant did not ask for a change of attorney. The appellant cannot claim that he learned of the decision only onJuly 23, 1951, because he was represented by counsel who received notice on

March 13, 1951, and this is notice to the appellant. Much less can the latter claim that he was not timely apprised of the tenor of the appealed decision, buthe must have known that said decision was to conform to the stipulation inquestion.

G.R. No. L-10474 February 28, 1958BENNY SAMPILO and HONORATO SALACUP, petitioners, vs. THE COURTOF APPEALS and FELISA SINOPERA respondent.

FACTS:Teodoro Tolete died intestate in January, 1945. He left 4 parcels of

land in San Manuel, Pangasinan. He left as heirs his widow, Leoncia de Leon,

and several nephews and nieces, children of deceased brothers and sisters.On July 25, 1946, without any judicial proceedings, his widow executed

an affidavit stating that "the deceased Teodoro Tolete left no children or ascendants or acknowledged natural children neither brother, sisters, nephewsor nieces, but the, widow Leoncia de Leon, alone to inherit the aboveproperties". On the same day, she executed a deed of sale of all the aboveparcels of land in favor of Benny Sampilo for the sum of P10,000. On June 17,1950, Benny Sampilo, in turn, sold the said parcels of land to Honorato Salacupfor P50,000.

In March, 1950, Felisa Sinopera instituted proceedings for theadministration of the estate of Teodoro Tolete (Special Proceeding No. 3694,Pangasinan), and having secured her appointment as administratrix, brought

the present action on June 20, 1950. The complaint alleges that the widow



Leoncia de Leon, had no right to execute the affidavit of adjudication and theinvalidity of the sale. Sampilo and Salacup filed an amended answer allegingthat the complaint states no cause of action; and that if such a cause exists thesame is barred.

The CFI rendered judgment for the plaintiff, Felisa Sinopera, declaringthat the affidavit of adjudication and the deeds of sale as all null and void. Thecase was appealed to the CA. It held that the sale is valid as to the one-half share of the land.

ISSUE:Whether or not respondent Felisa Sinopera's right of action to recover

her and her co-heirs' participation to the lands in question had not prescribed atthe time the action to recover was filed.

RULING: YES.It is argued that as the action was instituted almost 4 years after the

affidavit of adjudication was registered in the Office of the Register of Deeds Of Pangasinan, the right of action of the administratrix has prescribed and lapsedbecause the same was not brought within the period of 2 years as prescribed inSection 4 of Rule 74 of the Rules of Court, and as decided in the cases of McMicking vs. Sy Conbieng, 21 Phil., 211 and Ramirez vs. Gmur, 42 Phil., 855

869.

Section 4 of Rule 74 provides, in part, as follows:SEC. 4. Liability of distributees and estate. — If it shall appear at any timewithin two years after the settlement and distribution of an estate inaccordance with the provisions of either of the first two sections of this rule,that an heir or other has been unduly deprived of his lawful participation of the such heir or such other person may compel the settlement estate in thecourts in the manner hereinafter provided for the purpose of satisfying suchlawful participation. . . .

Section 1, which is mentioned in Section 4, reads as follows:

SEC. 1. Extrajudcial settlement by agreement between the heirs. — If thedecedent left no debts and the heirs and legatees are all of age, or theminors are represented by their judicial guardians, the parties may, withoutsecuring letters of administration, divide the estate among themselves asthey see fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do so in an ordinary action of partition. If there is only one heir or one legatee, he may adjudicate tohimself the entire estate by means of an affidavit filed in the office of theregister of deeds. It shall be presumed that the decedent left no debts if nocreditor files a petition for letters of administration within two years after thedeath of the decedent.

There are two significant provisions in Sections 1 and 4 of Rule 74. InSection 1, it is required that if there are two or more heirs, both or all of themshould take part in the extrajudicial settlement. This requirement is made moreimperative in the old law (Section 596, Act No. 190) by the addition of theclause "and not otherwise." By the title of Section 4, the "distributees andestate" indicates the persons to answer for rights violated by the extrajudicialsettlement. On the other hand, it is also significant that no mention is madeexpressly of the effect of the extrajudicial settlement on persons who did nottake part therein or had no notice or knowledge thereof. There cannot be anydoubt that those who took part or had knowledge of the extrajudicial settlementare bound thereby. As to them the law is clear that if they claim to have been inany manner deprived of their lawful right or share in the estate by theextrajudicial settlement, they may demand their rights or interest within theperiod of two years, and both the distributees and estate would be liable tothem for such rights or interest.

But as to those who did not take part in the settlement or had no noticeof the death of the decedent or of the settlement, there is no direct or expressprovision. Thus, it is unreasonable and unjust that they also be required toassert their claims within the period of two years. To extend the effects of thesettlement to them, to those who did not take part or had no knowledge thereof,without any express legal provision to that effect , would be violative of the

fundamental right to due process of law.The procedure outlined in Section 1 of Rule 74 of extrajudicial

settlement, or by affidavit, is an ex parte proceeding. It cannot by any reason or logic be contended that such settlement or distribution would affect thirdpersons who had no knowledge either of the death of the decedent or of theextrajudicial settlement or affidavit, especially as no mention of such effect ismade, either directly or by implication.

Hence, the provisions of Section 4 of Rule 74, barring distributees or heirs from objecting to an extrajudicial partition after the expiration of two yearsfrom such extrajudicial partition, is applicable only (1) to persons who haveparticipated or taken part or had notice of the extrajudicial partition, and, inaddition, (2) when the provisions of Section 1 of Rule 74 have been strictly

complied with, i.e., that all the persons or heirs of the decedent have taken partin the extrajudicial settlement or are represented by themselves or throughguardians. The case at bar fails to comply with both requirements because notall the heirs interested have participated in the extrajudicial settlement, theCourt of Appeals having found that the decedent left aside from his widow,nephews and nieces living at the time of his death.

BELTRAN, ET ALvs. AYSON and JEMINEZ G.R. No. L-14662

FACTS:

This action was commenced principally to set aside a deed of extrajudicialpartition registered with the proper Registry of Deeds, Pursuant to Section 1,



Rule 74, of the Rules of Court (extrajudicial settlement by agreement betweenheirs), and the Torrens title issued by virtue thereof.

The parties stipulated on the facts:

1. That there is no question about the Original Certificate of Title No.51521 in the name of Macario Beltran;2. That a deed of partition was made in the year 1943 by CorazonAyson and Jose de la Cruz;3. That pursuant to the deed of extrajudicial partition, the defendantsobtained Transfer Certificate of Title No. 23235;4. That the plaintiffs are the nephews and nieces of Macario Beltran,being the children of his brothers and sisters; Leonarda Beltran, sister of Macario Beltran, survived by Bartolome, Mariano, Felipe, Juan, Felix,Marcela, Pilar all surnamed Jeminez; Marcela died in 1950, survived byher children, Juanita and Gregorio, both surnamed Austria; GenovevaBeltran died survived by Damian, Petra Dionisio, and Donato, allsurnamed De la Cruz, as children;5. That the defendant is the widow of Macario Beltran;6. That the plaintiffs were not aware of the deed of extrajudicial partitionuntil shortly before the filing of the complaint;

The Court of First Instance handed down a decision, declaring theplaintiffs the co-owners of the land in litigation, subject to the usufruct of defendant Corazon Ayson over one-half of the share of each co-owner. 1ä

wphï1.ñët The defendants appealed directly to this Court.

ISSUE: WON the instant action has prescribed for failure of appellees (not aparty to the extrajudicial partition), to pursue the remedy within two years after the registration of the deed of extrajudicial partition.

RULING: No.

Appellants invoke Section 4 of Rule 74, which reads: .SEC. 4. Liability of distributees and estate. — If it shall appear at anytime within two years after the settlement and distribution of an estatein accordance with the provisions of either of the first two sections of this rule, that an heir or other person has been unduly deprived of hislawful participation in the estate, such heir or such other person maycompel the settlement of the estate in the courts in the manner hereinafter provided for the purpose of satisfying such lawfulparticipation. And if within the same time of two years, it shall appear that there are debts outstanding against the estate which have notbeen paid, or that an heir or other person has been unduly deprived of

his lawful participation payable in money, the court having jurisdiction of

the estate may, by order for that purpose, after hearing, settle theamount of such debts or lawful participation and order how much and inwhat manner each distributee shall contribute in the payment thereof,and may issue execution, if circumstances require, against the bondprovided in the preceding section or against the real estate belonging tothe deceased, or both. Such bond and such real estate shall remaincharged with a liability to creditors, heirs, or other persons for the fullperiod of two years after such distribution, notwithstanding anytransfers of the real estate that may have been made.

Appellants contend that the instant action has prescribed for failure of appellees to pursue the remedy pointed out by the Rules within two years after the registration of the deed of extrajudicial partition for the purpose of securingtheir lawful shares in the property.

... the provisions of Section 4 of Rule 74, barring distributees or heirsfrom objecting to an extrajudicial partition is applicable only (1) topersons who have participated or taken part or had notice of theextrajudicial partition, and, in addition, (2) when the provisions of Section 1 of Rule 74 have been strictly complied with, i.e., that all thepersons or heirs of the decedent have taken part in the extrajudicial

settlement or are represented by themselves or through guardians.

The next contention of appellants is that plaintiff's action is barred bythe statute of limitations. The origin of the provision (Section 4, Rule 74), uponwhich this contention is predicated, which is Section 596 of Act No. 190, fails tosupport the contention.

In the first place, there is nothing therein, or in its sources, which showsclearly a statute of limitations and a bar of action against third persons. It is onlya bar against the parties who had taken part in the extrajudicial proceedings,but not against third persons not parties thereto. In the second place, thestatute of limitations is contained in a different chapter of Act No. 190, Chapter

XL, and if Section 596 of the Act had been meant to be a statute of limitations,it would naturally have been included in the chapter which defines the statute.

In the instant case, both requirements were not complied with, becausenot all the interested heirs have participated in the extrajudicial settlement, itbeing admitted that the deceased left, aside from his widow, appellant CorazonAyson and his half-brother, Jose de la Cruz, nephews, nieces and a sister livingat the time of his death, and that the latter heirs were not aware of the deed of extrajudicial partition until shortly before the filing of their complaint.



ELIGIO LLANERA, vs.ANA LOPOS, ET AL. G.R. No. L-12588

FACTS:

Gorgonio Llanera died single and intestate on October 13, 1942. He leftan estate consisting of the proceeds of an insurance policy amounting to$5,150.00.

Upon the request of RemediosAyqueAltavano who claimed to be arelative of the deceased, a petition for settlement of his estate was filed in theCourt of First Instance of Albayon January 22, 1948, wherein one Elias Ayquewas appointed administrator of the estate.

After hearing, the Court found that the deceased died without parents,brothers, sisters, nephews or nieces, but left the following relatives: Ana,Eustaquio, Julia and Maximina, surnamed Lopos, brothers and sisters of AnicetaLopos, who was the mother of Gorgonio Llanera, and Casiana,Teodoro, Petronilo, Cenen, Felix, Sotero and Ambrosia, all surnamed Lopos,first degree cousin of the deceased, being the children of a brother and sister of AnicetaLopos.

The court ordered the balance of the estate to be distributed amongsaid heirs. And on May 28, 1949, the Court ordered the closure and terminationof the proceedings.

It developed later that the deceased had a brother by the name of Zacarias who died on June 19,1935 leaving a son, Eligio. And when in 1953Eligio came to know that his uncle Gorgonio died leaving an insurance policythe proceeds of which were distributed in the intestate proceedings instituted inthe Court of First Instance of Albay and were adjudicated to those who were notentitled thereto, Eligio on September 30, 1954 filed a motion in saidproceedings in order to assert his claim over the property as the sole heir of the

deceased, which motion however he later withdrew because he intended to filea separate civil action for the vindication of his right in the proper court.

And so on February 21, 1955, Eligio commenced this action in theCourt of First Instance of Laguna to recover the proceeds of the insurancepolicy left by his uncle against those to whom they were illegally adjudicatedalleging that the latter misrepresented that they were the only heirs of thedeceased when in fact they knew well that he left a nephew who was alive andwas the only one entitled to inherit his property.

On February 18, 1957, the court rendered decision dismissing thecomplaint on the ground that the venue was improperly laid and plaintiff's cause

of action had already prescribed.

ISSUE: WON the action already prescribed.

RULING:NO.

In holding that the present action has already prescribed, the trial courtsaid: "The claim of the plaintiff, in the opinion of the Court, was filed out of time.In summary settlement of the estate of a deceased person, any heir deprived of his lawful participation therein should file the corresponding petition in the courthaving jurisdiction of the estate within two years after the settlement anddistribution thereof (sec. 4, Rule 74, Rules of Court).While the Rules of theCourt do not prescribed any time limit during which an heir deprived of hislawful participation in the state of a person which was settled in a regular testate or intestate proceeding, Article 1100 of the Civil Code, however,provides that action for rescission on account of "lesion" shall prescribe after four years from the time the partition was made. Considering that judicialpartition of the estate of Gorgonio Llanera was made on May 17, 1949, henceplaintiff's action was commenced beyond the prescriptive period provided bylaw."

We find this reasoning incorrect, for it overlooks the fact that the

present action is not for rescission of a contract based on "lesion" but an actionto recover property based on fraud which under our law may be filed within aperiod of four years from the discovery of the fraud. (sec. 43 par. 3, Act 190).Since, as alleged in the complaint, fraud was discovered only in 1953 and theaction was brought in 1955, it is clear that plaintiff's action has not yetprescribed. It is therefore an error to dismiss the complaint based onprescription.

Esquivel v. CA, April 20, 1956

ANCOG vs. COURT OF APPEAL

G.R. No. 112260 June 30, 1997

Gregorio Yap died, leaving his wife, private respondent Rosario Diez,and children, petitioners Jovita Yap Ancog and Gregorio Yap, Jr.(who was aminor at this time), and private respondent Caridad Yap as his heirs.

Rosario Diez obtained loans from the Bank of Calape, secured by amortgage on the disputed land. The land, with improvements thereon, wasformerly the conjugal property of the spouses Gregorio Yap and Rosario Diez.

The bank's lawyer, Atty. Narciso de la Serna, suggested that shesubmit an extrajudicial settlement covering the disputed land as a means of

facilitating the approval of her application. The suggestion was accepted andAtty. de la Serna prepared an extrajudicial settlement, which the heirs, with the



exception of petitioner Gregorio Yap, Jr., then only 15 years old , signed.The loan was approved by the bank.

Rosario Diez exercised rights of ownership over the land. She broughtan ejectment suit against petitioner Jovita Yap Ancog's husband and son toevict them from the ground floor of the house built on the land for failure to payrent. Thereafter, petitioner Jovita Ancog learned that private respondentRosario Diez had offered the land for sale.

Petitioner Ancog immediately informed her younger brother, petitioner Gregorio Yap, Jr. of their mother's plan to sell the land. They filed this action for partition in the RTC. As private respondent Caridad Yap was unwilling to join inthe action against their mother, Caridad was impleaded as a defendant.

Petitioners alleged that the extrajudicial instrument was simulated andtherefore void. They claimed that in signing the instrument they did not reallyintend to convey their interests in the property to their mother, but only toenable her to obtain a loan on the security of the land to cover expenses for Caridad's school fees and for household repairs.

Issue:

1) Whether or not the extrajudicial settlement was valid. Yes.2) Whether or not Gregorio Yap is barred by laches? No.

Ruling:1) In this case, the trial court and the Court of Appeals found no evidenceto show that the extrajudicial settlement was required to enable privaterespondent Rosario Diez to obtain a loan from the Bank of Calape. Petitionersmerely claimed that the extrajudicial settlement was demanded by the bank.

To the contrary, that the heirs (Jovita Yap Ancog and Caridad Yap)meant the extrajudicial settlement to be fully effective is shown by the fact thatRosario Diez performed acts of dominion over the entire Land, beginning with

its registration, without any objection from them. Instead, petitioner JovitaAncog agreed to lease the land from her mother, private respondent RosarioDiez, and accepted from her a special power of attorney to use the land inquestion as collateral for a loan she was applying from the DBP. Indeed it wasprivate respondent Diez who paid the loan of the Ancogs in order to secure therelease of the property from mortgage.

2) The Court of Appeals erred in ruling that the claim of petitioner Gregorio Yap, Jr. was barred by laches. In accordance with Rule 74, Sec. 1 of the Rules of Court, as he did not take part in the partition, he is not bound bythe settlement. It is uncontroverted that, at the time the extrajudicial settlementwas executed, Gregorio Yap, Jr. was a minor. For this reason, he was not

included or even informed of the partition.

Instead, the registration of the land in Rosario Diez's name created animplied trust in his favor by analogy to Art. 1451 of the Civil Code.

(just in case)In the case of O'Laco v . Co Cho Chit , Art. 1451 was held as creating a

resulting trust, which is founded on the presumed intention of the parties. As ageneral rule, it arises where such may be reasonably presumed to be theintention of the parties, as determined from the facts and circumstancesexisting at the time of the transaction out of which it is sought to beestablished. In this case, the records disclose that the intention of the parties tothe extrajudicial settlement was to establish a trust in favor of petitioner Yap, Jr.to the extent of his share. Rosario Diez testified that she did not claim the entireproperty, while Atty. de la Serna added that the partition only involved theshares of the three participants.

Arenas v. Roces, Gr no. 147468, April 9, 2003

FACTS:

Spouses Cesar and Lilia Roces were the owners of two contiguous parcels of

land located in Arayat St. Mandaluyong. It is cover by TCT nos. 57217 and

57218.

On Nov.13, 1962, GSIS caused the annotations of an affidavit of adverse claim

on the titles alleging that the spouses have mortgaged the same to it.

GSIS wrote a letter to Cesar Roces demanding that they surrender the owners

duplicate titles. Roces failed to surrender such, hence GSIS filed a petition to

then CFI of Rizal praying that the owners duplicate titles in possession of

Roces be declared null and void and a new TCT be issued in favor of GSIS.

The court issued and order granting the petition.

Cesar Roces died intestate on Jan. 26, 1980. He was survived by his widow

Lilia Roces and their children all of whom are respondents in this case.

On July 22, 1922, Reynaldo Montinola, a nephew of Lilia Roces executed an

affidavit of self adjudication over the Arayat properties alleging that the

properties were owned by Cesar and Lilia both of whom died intestate and left

no heirs except the brother of Lilia Roces who was his father, that neither of the

spouses left any will nor any debt and that he was the sole heir of the Roces

spouse.



On Jan. 5, 1993, Montinola filed a petition against GSIS with the RTC of Pasig

praying for the cancellations of the TCT’s in favor of GSIS. GSIS failed to

present any evidences that shows the properties were indeed mortgage to

them, hence the RTC rendered judgment in favor of Moninola of which the

TCT’s in favor of GSIS were declared null and void and a new owners duplicate

title be issued. The Registry of deeds of Mandaluyong issued TCT no. 7299 in

lieu of TCT no. 57218.

In July 1993, Montinola executed a deed of absolute sale of the propertycovered by TCT no. 7299 in favor of petitioner sps. Eduardo and Josefina

Domingo, thereafter TCT no. 7673 was issued in the name of the petitioners.

Both TCT nos. 7299 and 7673 contained the following annotations:

“Subject to the provsison of Sec.4 Rule 74 of the Rules of Court with respect to

the inheritance left by the deceased sps. Roces”.

When respondents learned of the sale of the property to petitioners, they filed acomplaint against Montinola and petitioners with the Regional Trial Court of Pasig. They argued that the affidavit of self-adjudication was fraudulent

because Montinola was not an heir of the Roces spouses and it was not truethat Lilia Roces was dead. Therefore, the affidavit of self-adjudication, as wellas the deed of absolute sale, TCT No. 7299, and TCT No. 7673, all coveringthe subject property, were null and void.

In their answer, petitioners alleged that they were buyers in good faith and thattheir action was barred by estoppel and laches.

The RTC ruled in favor of the respondents. Respondents appealed to the CAreiterating the reliefs prayed for. The CA granted the appeal and the decision of the RTC is set aside and reversed. The CA rendered a decision in favor of theappellants of which the affidavit of self adjudication, deed of absolute sale andTCT no. 7673 are declared null and void. The TCT no. 7218 under sps Roceswere reinstated. Petitioners filed a Motion for Recon but was denied hence thispetition.

ISSUE:

Whether or not the annotation in the TCT regarding Sec.4 Rule 74 of the Rulesof Court serves as an encumbrance that prevents Petitioners from being aninnocent purchaser for value?

HELD:

Well settled is the rule that one who deals with property registered under theTorrens system need not go beyond the same but must rely on the title.However such rule admits an exception such as the principle does not applywhen the party has actual knowledge of facts and circumstances that wouldimpel a reasonably cautious man to make such inquiry or when a the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient factsto induce a reasonably prudent man to inquire into the status of the title of theproperty in litigation. One who falls within the exception can neither bedenominated an innocent purchaser for value nor a purchaser in good faith.

As stated above, the titles, namely, TCT Nos. 7299 and 7673, containedannotations which made reference to the provisions of Rule 74, Section 4 of theRules of Court, viz :

SEC. 4. Liability of distributees and estate. — If it shall appear at anytime within two (2) years after the settlement and distribution of anestate in accordance with the provisions of either of the first twosections of this rule, that an heir or other person has been undulydeprived of his lawful participation in the estate, such heir or such other person may compel the settlement of the estate in the courts in the

manner hereinafter provided for the purpose of satisfying such lawfulparticipation. And if within the same time of two (2) years, it shallappear that there are debts outstanding against the estate which havenot been paid, or that an heir or other person has been unduly deprivedof his lawful participation payable in money, the court having jurisdictionof the estate may, by order for that purpose, after hearing, settle theamount of such debts or lawful participation and order how much and inwhat manner each distributee shall contribute in the payment thereof,and may issue execution, if circumstances require, against the bondprovided in the preceding section or against the real estate belonging tothe deceased, or both. Such bond and such real estate shall remaincharged with a liability to creditors, heirs, or other persons for the full

period of two (2) years after such distribution, notwithstanding any transfers of real estate that may have been made.

The foregoing rule clearly covers transfers of real property to any person, as long as the deprived heir or creditor vindicates his rightswithin two years from the date of the settlement and distribution of estate. Contrary to petitioners' contention, the effects of this provisionare not limited to the heirs or original distributees of the estateproperties, but shall affect any transferee of the properties.

Hence, petitioners cannot be considered buyers in good faith and cannot nowavoid the consequences brought about by the application of Rule 74, Section 4

of the Rules of Court.



Petitioner's claim that respondents were guilty of laches and estoppel islikewise untenable. Laches is the failure or neglect, for an unreasonable andunexplained length of time, to do that which, by exercising due diligence, couldor should have been done earlier. The essential elements of laches are: (1)conduct on the part of defendant or one under whom he claims, giving rise tothe situation complained of; (2) delay in asserting complainant's right after hehad knowledge of the defendant's conduct and after he has an opportunity tosue; (3) lack of knowledge or notice on the part of the defendant that thecomplainant would assert the right on which he bases his suit; and (4) injury or

prejudice to the defendant in the event relief is accorded to the complainant.

On the other hand, estoppel by laches arises from the negligence or omissionto assert a right within a reasonable time, warranting a presumption that theparty entitled to assert it either has abandoned it or declined to assert it. In thecase at bar, only four months elapsed from the time respondents discoveredMontinola's fraudulent acts, sometime in May 1993, to the time they filed their complaint on September 6, 1993. This relatively short span of time can hardlybe called unreasonable, especially considering that respondents used thisperiod of time to investigate the transfers of the property. Delay is anindispensable requisite for a finding of estoppel by laches, but to be barred frombringing suit on grounds of estoppel and laches, the delay must be lengthy andunreasonable. No unreasonable delay can be attributed to respondents in thiscase.

Cua v. Vargas, G.R. No. 156536, October 31, 2006

Facts:

A parcel of residential land with an area of 99 square meters located inSan Juan, Virac, Catanduanes was left behind by the late Paulina Vargas. OnFebruary 4, 1994, a notarized Extra Judicial Settlement Among Heirs wasexecuted by and among Paulina Vargas' heirs, namely Ester Vargas, Visitacion

Vargas, Juan Vargas, Zenaida V. Matienzo, Rosario V. Forteza, AndresVargas, Gloria Vargas, Antonina Vargas and Florentino Vargas, partitioningand adjudicating unto themselves the lot in question, each one of them gettinga share of 11 square meters. Florentino, Andres, Antonina and Gloria, however,did not sign the document. Only Ester, Visitacion, Juan, Zenaida and Rosariosigned it. The Extra Judicial Settlement Among Heirs was published in theCatanduanes Tribune for three consecutive weeks.3

On November 15, 1994, an Extra Judicial Settlement Among Heirs withSale4 was again executed by and among the same heirs over the sameproperty and also with the same sharings. Once more, only Ester, Visitacion,Juan, Zenaida and Rosario signed the document and their respective shares

totaling 55 square meters were sold to Joseph Cua, petitioner herein.

According to Gloria Vargas, the widow of Santiago Vargas and one of respondents herein, she came to know of the Extra Judicial Settlement AmongHeirs with Sale dated November 16, 1994 only when the original house built onthe lot was being demolished sometime in May 1995.5 She likewise claimed shewas unaware that an earlier Extra Judicial Settlement Among Heirs datedFebruary 4, 1994 involving the same property had been published in theCatanduanes Tribune.6

After knowing of the sale of the 55 square meters to petitioner, Gloria

Vargas tried to redeem the property, with a letter 7 sent to petitioner.

When the offer to redeem was refused and after having failed to reach

an amicable settlement at the barangay level,9 Gloria Vargas filed a case for

annulment of Extra Judicial Settlement and Legal Redemption of the lot with the

Municipal Trial Court (MTC) of Virac, Catanduanes against petitioner.

After trial on the merits, the MTC rendered a decision 13 in favor of

petitioner, dismissing the complaint as well as the complaint-in-intervention for

lack of merit, and declaring the Deed of Extra Judicial Settlement Among Heirs

with Sale valid and binding.

On appeal, the Regional Trial Court (RTC), Branch 42, of Virac,Catanduanes affirmed the MTC decision in a judgment dated November 25,1999. The matter was thereafter raised to the Court of Appeals (CA).

The CA reversed the ruling of both lower courts in the assailed decisiondated March 26, 2002, declaring that the Extra Judicial Settlement AmongHeirs and the Extra Judicial Settlement Among Heirs with Sale, dated February4, 1994 and November 15, 1994, respectively, were void and without any legaleffect. The CA held that, pursuant to Section 1, Rule 74 of the Rules of Court, 16

the extrajudicial settlement made by the other co-heirs is not binding upon

respondents considering the latter never participated in it nor did they ever signify their consent to the same.

His motion for reconsideration having been denied, petitioner filed the present

petition for review.

Issues:

Whether heirs are deemed constructively notified and bound,regardless of their failure to participate therein, by anextrajudicial settlement and partition of estate when the

extrajudicial settlement and partition has been duly published;and,

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Assuming a published extrajudicial settlement and partitiondoes not bind persons who did not participate therein, whether the written notice required to be served by an heir to his co-heirs in connection with the sale of hereditary rights to astranger before partition under Article 1088 of the Civil Code17

can be dispensed with when such co-heirs have actualknowledge of the sale such that the 30-day period within whicha co-heir can exercise the right to be subrogated to the rights of a purchaser shall commence from the date of actual knowledge

of the sale.

Ruling:

The petition lacks merit.

The procedure outlined in Section 1 of Rule 74 is an ex parteproceeding. The rule plainly states, however, that persons who do notparticipate or had no notice of an extrajudicial settlement will not be boundthereby.18 It contemplates a notice that has been sent out or issued before anydeed of settlement and/or partition is agreed upon (i.e., a notice calling all

interested parties to participate in the said deed of extrajudicial settlement andpartition), and not after such an agreement has already been executed19 aswhat happened in the instant case with the publication of the first deed of extrajudicial settlement among heirs.

The publication of the settlement does not constitute constructive notice

to the heirs who had no knowledge or did not take part in it because the same

was notice after the fact of execution. The requirement of publication is geared

for the protection of creditors and was never intended to deprive heirs of their

lawful participation in the decedent's estate. In this connection, the records of

the present case confirm that respondents never signed either of the settlement

documents, having discovered their existence only shortly before the filing of the present complaint. Following Rule 74, these extrajudicial settlements do not

bind respondents, and the partition made without their knowledge and consent

is invalid insofar as they are concerned







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