Succession Cases Under Arts. 838 - 839

8/22/15, 4:08 PMSUPREME COURT REPORTS ANNOTATED VOLUME 281

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VOL. 281, OCTOBER 30, 1997 277

Reyes vs. Court of Appeals

G.R. No. 124099. October 30, 1997.*

MANUEL G. REYES, MILA G. REYES, DANILO G.REYES, LYN AGAPE, MARITES AGAPE, ESTEBANAGALOLO, and CELSA AGAPE, petitioners, vs. COURT OFAPPEALS and JULIO VIVARES, respondents.

Courts; Jurisdiction; Settlement of Estates; Wills; Probate; As a

general rule, courts in probate proceedings are limited to passing

only upon the extrinsic validity of the will sought to be probated.·

As a general rule, courts in probate proceedings are limited to passonly upon the extrinsic validity of the will sought to be probated.Thus, the court merely inquires on its due execution, whether or notit complies with the formalities prescribed by law, and thetestamentary capacity of the testator. It does not determine noreven by implication prejudge the validity or efficacy of the willÊsprovisions. The intrinsic validity is not considered since theconsideration thereof usually comes only after the will has beenproved and allowed.

Same; Same; Same; Same; Same; The intrinsic validity of a will

may be passed upon where „practical considerations‰ demanded it as

when there is preterition of heirs or the testamentary provisions are

of doubtful legality, or where the parties agree that the intrinsic

validity be first determined.·There are, however, notablecircumstances wherein the intrinsic validity was first determined aswhen the defect of the will is apparent on its face and the probate ofthe will may become a useless ceremony if it is intrinsically invalid.The intrinsic validity of a will may be passed upon because„practical considerations‰ demanded it as when there is preteritionof heirs or the testamentary provisions are of doubtful legality.Where the parties agree that the intrinsic validity be first

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determined, the probate court may also do so. Parenthetically, therule on probate is not inflexible and absolute. Under exceptionalcircumstances, the probate court is not powerless to do what thesituation constrains it to do and pass upon certain provisions of thewill.

Same; Same; Same; Same; Same; The propriety of the

institution of the devisees/legatees already involves inquiry on the

willÊs intrinsic validity which the probate court need not inquire

upon.·The case at bar arose from the institution of the petition forthe

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* SECOND DIVISION.

278

278 SUPREME COURT REPORTS ANNOTATED


probate of the will of the late Torcuato Reyes. Perforce, the onlyissues to be settled in the said proceeding were: (1) whether or notthe testator had animus testandi; (2) whether or not vices of consentattended the execution of the will; and (3) whether or not theformalities of the will had been complied with. Thus, the lowercourt was not asked to rule upon the intrinsic validity or efficacy ofthe provisions of the will. As a result, the declaration of the testatorthat Asuncion „Oning‰ Reyes was his wife did not have to bescrutinized during the probate proceedings. The propriety of theinstitution of Oning Reyes as one of the devisees/legatees alreadyinvolved inquiry on the willÊs intrinsic validity and which need notbe inquired upon by the probate court.

Same; Same; Same; Same; Same; Words and Phrases; A will is

the testator speaking after his death.·In the elegant language ofJustice Moreland written decades ago, he said·„A will is thetestator speaking after death. Its provisions have substantially thesame force and effect in the probate court as if the testator stoodbefore the court in full life making the declarations by word of



mouth as they appear in the will. That was the special purpose ofthe law in the creation of the instrument known as the last will andtestament. Men wished to speak after they were dead and the law,by the creation of that instrument, permitted them to do so. x x xAll doubts must be resolved in favor of the testatorÊs having meantjust what he said.‰(Santos vs. Manarang, 27 Phil. 209).

Same; Same; Same; Same; Same; Evidence; The failure of a

party to present a document before the probate court to support his

position constitutes a waiver and the same evidence can no longer be

entertained on appeal, much less in a petition for review before the

Supreme Court.·Petitioners tried to refute this conclusion of theCourt of Appeals by presenting belatedly a copy of the marriagecertificate of Asuncion Reyes and Lupo Ebarle. Their failure topresent the said certificate before the probate court to support theirposition that Asuncion Reyes had an existing marriage with Ebarleconstituted a waiver and the same evidence can no longer beentertained on appeal, much less in this petition for review. ThisCourt would not try the case anew or settle factual issues since itsjurisdiction is confined to resolving questions of law which havebeen passed upon by the lower courts. The settled rule is that thefactual findings of the appellate court will not be disturbed unlessshown to be contrary to the evidence on the record, whichpetitioners have not shown in this case.

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PETITION for review on certiorari of a decision of theCourt of Appeals.

The facts are stated in the opinion of the Court. Quimpo, Willkom, Borja, Neri, Calejesan & Oclarit

Law Offices for petitioners. Algarra, Mutia & Trinidad Law Offices for private

respondent.

TORRES, JR., J.:

Unless legally flawed, a testatorÊs intention in his last willand testament is its „life and soul‰ which deserves



reverential observance.The controversy before us deals with such a case.Petitioners Manuel G. Reyes, Mila G. Reyes, Danilo G.

Reyes, Lyn Agape, Marites Agape, Estebana Galolo andCelsa Agape, the oppositors in Special Proceedings No. 112for the probate of the will of Torcuato J. Reyes, assail inthis petition for review the decision of the Court of Appeals

1

dated November 29, 1995, the dispositive portion of whichreads:

„WHEREFORE, premises considered, the judgment appealed fromallowing or admitting the will of Torcuato J. Reyes to probate anddirecting the issuance of Letters Testamentary in favor of petitionerJulio A. Vivares as executor without bond is AFFIRMED butmodified in that the declaration that paragraph II of the TorcuatoReyesÊ last will and testament, including subparagraphs (a) and (b)are null and void for being contrary to law is hereby SET ASIDE,said paragraph II and subparagraphs (a) and (b) are declaredVALID. Except as above modified, the judgment appealed from isAFFIRMED.

SO ORDERED.‰2

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1 Penned by Associate Justice Jose C. dela Rama, concurred in by

Associate Justices Jaime M. Lantin (Chairman), and Eduardo G.

Montenegro.2 Rollo, p. 29.

280



The antecedent facts:On January 3, 1992, Torcuato J. Reyes executed his last

will and testament declaring therein in part, to wit:

„x x x

II. I give and bequeath to my wife Asuncion „Oning‰ R. Reyes thefollowing properties to wit:





a.

b.

All my shares of our personal properties consisting amongothers of jewelries, coins, antiques, statues, tablewares,furnitures, fixtures and the building;

All my shares consisting of one half (1/2) or 50% of all thereal estates I own in common with my brother Jose, situatedin Municipalities of Mambajao, Mahinog, Guinsiliban,Sagay all in Camiguin; real estates in Lunao, Gingoog,Caamulan, Sugbongcogon, Boloc-Boloc, Kinoguitan,Balingoan, Sta. Ines, Caesta, Talisayan, all in the provinceof Misamis Oriental.‰

3

The will consisted of two pages and was signed by TorcuatoReyes in the presence of three witnesses: Antonio Veloso,Gloria Borromeo, and Soledad Gaputan. Privaterespondent Julio A. Vivares was designated the executorand in his default or incapacity, his son Roch Alan S.Vivares.

Reyes died on May 12, 1992 and on May 21, 1992,private respondent filed a petition for probate of the willbefore the Regional Trial Court of Mambajao, Camiguin.The petition was set for hearing and the order waspublished in the Mindanao Daily Post, a newspaper ofgeneral circulation, once a week for three consecutiveweeks. Notices were likewise sent to all the persons namedin the petition.

On July 21, 1992, the recognized natural children ofTorcuato Reyes with Estebana Galolo, namely Manuel,Mila, and Danilo all surnamed Reyes, and the deceasedÊsnatural children with Celsa Agape, namely Lyn andMarites Agape, filed an opposition with the followingallegations: a) that the last will and testament of Reyeswas not executed and attested in accordance with theformalities of law; and b) that Asuncion Reyes Ebarleexerted undue and improper influence upon the

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3 Exhibit „F,‰ Records, p. 4.

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VOL. 281, OCTOBER 30, 1997 281





testator at the time of the execution of the will. Theopposition further averred that Reyes was never married toand could never marry Asuncion Reyes, the woman heclaimed to be his wife in the will, because the latter wasalready married to Lupo Ebarle who was still then aliveand their marriage was never annulled. Thus, Asuncioncan not be a compulsory heir for her open cohabitation withReyes was violative of public morals.

On July 22, 1992, the trial court issued an orderdeclaring that it had acquired jurisdiction over the petitionand, therefore, allowed the presentation of evidence. Afterthe presentation of evidence and submission of therespective memoranda, the trial court issued its decision onApril 23, 1993.

The trial court declared that the will was executed inaccordance with the formalities prescribed by law. It,however, ruled that Asuncion Reyes, based on thetestimonies of the witnesses, was never married to thedeceased Reyes and, therefore, their relationship was anadulterous one. Thus:

„The admission in the will by the testator to the illicit relationshipbetween him and ASUNCION REYES EBARLE who is somebodyelseÊs wife, is further bolstered, strengthened, and confirmed by thedirect testimonies of the petitioner himself and his two „attesting‰witnesses during the trial.

In both cases, the common denominator is the immoral,meretrecious, adulterous and illicit relationship existing betweenthe testator and the devisee prior to the death of the testator, whichconstituted the sole and primary consideration for the devise orlegacy, thus making the will intrinsically invalid.‰

4

The will of Reyes was admitted to probate except forparagraph II (a) and (b) of the will which was declared nulland void for being contrary to law and morals. Hence, JulioVivares filed an appeal before the Court of Appeals withthe allegation that the oppositors failed to present anycompetent evidence that Asuncion Reyes was legallymarried to another person during the period of hercohabitation with Torcuato Reyes.




_______________

4 Decision, Records, p. 141.

282



On November 29, 1995, the Court of Appeals promulgatedthe assailed decision which affirmed the trial courtÊsdecision admitting the will for probate but with themodification that paragraph II including subparagraphs (a)and (b) were declared valid. The appellate court stated:

„Considering that the oppositors never showed any competent,documentary or otherwise during the trial to show that Asuncion„Oning‰ ReyesÊ marriage to the testator was inexistent or void,either because of a pre-existing marriage or adulterous relationship,the trial court gravely erred in striking down paragraph II (a) and(b) of the subject Last Will and Testament, as void for beingcontrary to law and morals. Said declarations are not sufficient todestroy the presumption of marriage. Nor is it enough to overcomethe very declaration of the testator that Asuncion Reyes is hiswife.‰

5

Dissatisfied with the decision of the Court of Appeals, theoppositors filed this petition for review.

Petitioners contend that the findings and conclusion ofthe Court of Appeals was contrary to law, public policy andevidence on record. Torcuato Reyes and Asuncion „Oning‰Reyes were collateral relatives up to the fourth civil degree.Witness Gloria Borromeo testified that Oning Reyes washer cousin as her mother and the latterÊs father were sisterand brother. They were also nieces of the late TorcuatoReyes. Thus, the purported marriage of the deceased Reyesand Oning Reyes was void ab initio as it was against publicpolicy pursuant to Article 38 (1) of the Family Code.Petitioners further alleged that Oning Reyes was alreadymarried to Lupo Ebarle at the time she was cohabitingwith the testator hence, she could never contract any validmarriage with the latter. Petitioners argued that thetestimonies of the witnesses as well as the personal




declaration of the testator, himself, were sufficient todestroy the presumption of marriage. To further supporttheir contention, petitioners attached a copy of themarriage certificate of Asuncion Reyes and Lupo Ebarle.

6

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5 Decision, Rollo, p. 29.6 Annex „A,‰ Rollo, p. 103.

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The petition is devoid of merit.As a general rule, courts in probate proceedings are

limited to pass only upon the extrinsic validity of the willsought to be probated.

7 Thus, the court merely inquires on

its due execution, whether or not it complies with theformalities prescribed by law, and the testamentarycapacity of the testator. It does not determine nor even byimplication prejudge the validity or efficacy of the willÊsprovisions.

8 The intrinsic validity is not considered since

the consideration thereof usually comes only after the willhas been proved and allowed. There are, however, notablecircumstances wherein the intrinsic validity was firstdetermined as when the defect of the will is apparent on itsface and the probate of the will may become a uselessceremony if it is intrinsically invalid.

9 The intrinsic validity

of a will may be passed upon because „practicalconsiderations‰ demanded it as when there is preterition ofheirs or the testamentary provisions are of doubtfullegality.

10 Where the parties agree that the intrinsic

validity be first determined, the probate court may also doso.

11 Parenthetically, the rule on probate is not inflexible

and absolute. Under exceptional circumstances, theprobate court is not powerless to do what the situationconstrains it to do and pass upon certain provisions of thewill.

12

The case at bar arose from the institution of the petitionfor the probate of the will of the late Torcuato Reyes.










Perforce, the only issues to be settled in the said proceedingwere: (1) whether or not the testator had animus testandi;

(2) whether or not vices of consent attended the executionof the will; and (3) whether or not the formalities of the willhad been com-

_______________

7 Ajero vs. Court of Appeals, 236 SCRA 488; Cayetano vs. Leonidas,

129 SCRA 522.8 Palacios vs. Palacios, 106 Phil. 739.9 Nepomuceno vs. Court of Appeals, 139 SCRA 206; Nuguid vs.

Nuguid, 17 SCRA 499.10 Balanay vs. Martinez, 64 SCRA 452; Cayetano vs. Leonidas, 129

SCRA 522.11 Nuguid vs. Nuguid, supra.

12 Nepomuceno vs. Court of Appeals, supra.

284



plied with. Thus, the lower court was not asked to ruleupon the intrinsic validity or efficacy of the provisions ofthe will. As a result, the declaration of the testator thatAsuncion „Oning‰ Reyes was his wife did not have to bescrutinized during the probate proceedings. The proprietyof the institution of Oning Reyes as one of thedevisees/legatees already involved inquiry on the willÊsintrinsic validity and which need not be inquired upon bythe probate court.

The lower court erroneously invoked the ruling inNepomuceno vs. Court of Appeals (139 SCRA 206) in theinstant case. In the case aforesaid, the testator himself,acknowledged his illicit relationship with the devisee, towit:

„Art. IV. That since 1952, I have been living, as man and wife, withone Sofia J. Nepomuceno, whom I declare and avow to be entitled tomy love an [sic] affection, for all the things which she has done forme, now and in the past; that while Sofia J. Nepomuceno has with



my full knowledge and consent, did comfort and represent myself asher own husband, in truth and in fact, as well as in the eyes of thelaw, I could not bind her to me in the holy bonds of matrimonybecause of my aforementioned previous marriage.‰

Thus, the very tenor of the will invalidates the legacybecause the testator admitted he was disposing of theproperties to a person with whom he had been living inconcubinage.

13 To remand the case would only be a waste of

time and money since the illegality or defect was alreadypatent. This case is different from the Nepomuceno case.Testator Torcuato Reyes merely stated in his will that hewas bequeathing some of his personal and real propertiesto his wife, Asuncion „Oning‰ Reyes. There was never anopen admission of any illicit relationship. In the case ofNepomuceno, the testator admitted that he was alreadypreviously married and that he had an adulterousrelationship with the devisee.

We agree with the Court of Appeals that the trial courtrelied on uncorroborated testimonial evidence thatAsuncion Reyes was still married to another during thetime she co-

_______________

13 Ibid.

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VOL. 281, OCTOBER 30, 1997 285


habited with the testator. The testimonies of the witnesseswere merely hearsay and even uncertain as to thewhereabouts or existence of Lupo Ebarle, the supposedhusband of Asuncion. Thus:

„The foregoing testimony cannot go against the declaration of thetestator the Asuncion „Oning‰ Reyes is his wife. In Alvarado v. CityGovernment of Tacloban (supra) the Supreme Court stated that thedeclaration of the husband is competent evidence to show the fact ofmarriage.




Considering that the oppositors never showed any competentevidence, documentary or otherwise during the trial to show thatAsuncion „Oning‰ ReyesÊ marriage to the testator was inexistent orvoid, either because of a pre-existing marriage or adulterousrelationship, the trial court gravely erred in striking downparagraph II (a) and (b) of the subject Last Will and Testament, asvoid for being contrary to law and morals. Said declarations are notsufficient to destroy the presumption of marriage. Nor is it enoughto overcome the very declaration of the testator that AsuncionReyes is his wife.‰

14

In the elegant language of Justice Moreland writtendecades ago, he said·

„A will is the testator speaking after death. Its provisions havesubstantially the same force and effect in the probate court as if thetestator stood before the court in full life making the declarations byword of mouth as they appear in the will. That was the specialpurpose of the law in the creation of the instrument known as thelast will and testament. Men wished to speak after they were deadand the law, by the creation of that instrument, permitted them todo so. x x x All doubts must be resolved in favor of the testatorÊshaving meant just what he said.‰ (Santos vs. Manarang, 27 Phil.209).

Petitioners tried to refute this conclusion of the Court ofAppeals by presenting belatedly a copy of the marriagecertificate of Asuncion Reyes and Lupo Ebarle. Theirfailure to present the said certificate before the probatecourt to support their position that Asuncion Reyes had anexisting marriage

_______________

14 CA decision, Rollo, p. 29.

286



with Ebarle constituted a waiver and the same evidencecan no longer be entertained on appeal, much less in this




petition for review. This Court would not try the case anewor settle factual issues since its jurisdiction is confined toresolving questions of law which have been passed upon bythe lower courts. The settled rule is that the factualfindings of the appellate court will not be disturbed unlessshown to be contrary to the evidence on the record, whichpetitioners have not shown in this case.

15

Considering the foregoing premises, we sustain thefindings of the appellate court it appearing that it did notcommit a reversible error in issuing the challengeddecision.

ACCORDINGLY, decision appealed from datedNovember 29, 1995, is hereby AFFIRMED and the instantpetition for review is DENIED for lack of merit.

SO ORDERED.

Regalado (Chairman), Romero, Puno and Mendoza,

JJ., concur.

Petition denied, judgment affirmed.

Notes.·Attestation clause is valid even if in a languagenot known to testator.(Caneda vs. Court of Appeals, 222SCRA 781 [1993])

Proof that wills executed abroad conform with theformalities prescribed by laws in the foreign jurisdiction orby Philippine laws is imperative. (Vda. de Perez vs. Tolete,

232 SCRA 722 [1994])The object of the solemnities surrounding the execution

of wills is to close the door against bad faith and fraud,accordingly, laws on this subject should be interpreted toattain these primordial ends. (Ajero vs. Court of Appeals,

236 SCRA 488 [1994])

··o0o··

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15 Mercado vs. Court of Appeals, 234 SCRA 98, G.R. No. 108802. July

12, 1994.

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Balanay, Jr. vs. Martinez

No.L-39247. June 27, 1975.*

In the Matter of the Petition to Approve the Will ofLeodegaria Julian. FELIX BALANAY, JR., petitioner,vs.HON. ANTONIO M. MARTINEZ, Judge of the Court ofFirst Instance of Davao, Branch VI; AVELINA B.ANTONIO and DELIA B. LANABAN, respondents.

Special proceedings; Testate succession; Probate court may passupon intrinsic validity of a will before passing upon its formalvalidity.·The trial court acted correctly in passing upon the willÊsintrinsic validity even before its formal validity had beenestablished. The probate of a will might become an idle ceremony ifon its face it appears to be intrinsically void. Where practicalconsiderations demand that the intrinsic validity of the will bepassed upon, even before it is probated, the court should meet theissue.

Same; Same; Invalidity of one testamentary disposition does notnecessarily invalidate all other dispositions made therein.·The ruleis that „the invalidity of one of several dispositions contained in awill does not result in the invalidity of the other dispositions, unlessit is to be presumed that the testator would not have made suchother dispositions if the first invalid disposition had not been made‰(Art 792, Civil Code).

Same; Same; Statement that testator owns „southern half ofconjugal state is contrary to law because spouses are proindivisoowners thereof.·The statement of the testatrix that she owned the„southern half‰ of the conjugal lands is contrary to law because,although she was a coowner thereof, her share was inchoate andproindiviso (Art. 143, Civil Code). But that illegal declaration doesnot nullify the entire will. It may be disregarded.

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Same; Same; Provision in a will that testatorÊs estate be keptintact and legitimes of heirs be paid in cash is contrary to Art. 1080of Civil Code where whole estate was not assigned to one or moreheirs.·The provision of the will that the properties of the testatrixshould not be divided among her heirs during her husbandÊslifetime but should be kept intact and that the legitimes should bepaid in cash is contrary to article 1080 of the Civil Code. ... Thetestatrix in her will made a partition of the entire conjugal estateamong her six children (her husband had renounced his hereditaryrights and his one-half conjugal share). She did not assign thewhole estate to one or

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* SECOND DIVISION.

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VOL. 64, JUNE 27, 1975 453


more children as envisaged in article 1080. Hence, she had no rightto require that the legitimes be paid in cash. On the other hand, herestate may remain undivided only for a period of 20 years.

Same; Same; Renunciation of inheritance by widower subject tolimitation for his support and maintenance and preservation of hislegitime.·Felix Balanay, Sr. could validly renounce his hereditaryrights and his one-half share of the conjugal partnership but insofaras said renunciation partakes of a donation of his hereditary rightsand his one-half share in the conjugal estate, it should be subject tothe limitations prescribed in articles 750 and 752 of the Civil Code.A portion of the estate should be adjudicated to the widower for hissupport and maintenance. Or at least his legitime should berespected.

Same; Same; HusbandÊs renunciation of hereditary rights andshare in conjugal estate make these assets part of testatorÊs estate,but without prejudice to creditors and other heirs.·It should bestressed that by reason of the surviving husbandÊs conformity to his



wifeÊs will and his renunciation of his hereditary rights, his one-halfconjugal share became a part of his deceased wifeÊs estate. Hisconformity had the effect of validating the partition made inparagraph V of the will without prejudice, of course, to the rights ofthe creditors and the legitimes of the compulsory heirs.

Same; Same; Preterition of surviving spouse who conformedthereto does not produce intestacy.·In the instant case, thepreterited heir was the surviving spouse. His preterition did notproduce intestacy. Moreover, he signified his conformity to his wifeÊswill and renounced his hereditary rights.

Same; Same; Testacy is prefereable to intestacy.·Testacy isfavored. Doubts are resolved in favor of testacy especially where thewill evinces an intention on the part of the testator to dispose ofpractically his whole estate. So compelling is the principle thatintestacy should be avoided and that the wishes of the testatorshould prevail that sometimes the language of the will can bevaried for the purpose of giving it effect.

Same; Same; Probate court should not issue notice to creditors ifonly special administrator has been appointed.·A notice tocreditors is not in order if only a special administrator has beenappointed. Section 1, Rule 86 x x x clearly contemplates theappointment of an executor or regular administrator and not that ofa special administrator.

454



Same; Same; Courts; A court employee should not be appointedas administrator of decedentÊs estate.·The probate courtÊsappointment of its branch clerk of court as special administrator isnot a salutary practice because it might engender the suspicion thatthe probate Judge and his clerk of court are in cahoots in milkingthe decedentÊs estate. x x x A court employee should devote hisofficial time to his official duties and should not have as a sidelinethe administration of a decedentÊs estate.

PETITION for certiorari from an order of the Court of FirstInstance of Davao.



The facts are stated in the opinion of the Court. Roberto M. Sarenas for petitioner. Jose B. Guyo for private respondents.

AQUINO, J.:

Felix Balanay, Jr. appealed by certiorari from the order ofthe Court of First Instance of Davao dated February 28,1974, declaring illegal and void the will of his mother,Leodegaria Julian, converting the testate proceeding intoan intestate proceeding and ordering the issuance of thecorresponding notice to creditors (Special Case No. 1808).The antecedents of the appeal are as follows:

Leodegaria Julian, a native of Sta. Maria, Ilocos Sur,died on February 12, 1973 in Davao City at the age of sixty-seven. She was survived by her husband, Felix Balanay,Sr., and by their six legitimate children named FelixBalanay, Jr., Avelina B. Antonio, Beatriz B. Solamo,Carolina B. Manguiob, Delia B. Lanaban and Emilia B.Pabaonon.

Felix J. Balanay, Jr. filed in the lower court a petitiondated February 27, 1973 for the probate of his motherÊsnotarial will dated September 5, 1970 which is written inEnglish. In that will Leodegaria Julian declared (a) thatshe was. the owner of the „southern half‰ of nine conjugallots (par. II); (b) that she was the absolute owner of twoparcels of land which she inherited from her father (par.III), and (c) that it was her desire that her propertiesshould not be divided among her heirs during herhusbandÊs lifetime and that their legitimes should besatisfied out of the fruits of her properties (Par. IV).

Then, in paragraph V of the will she stated that afterher husbandÊs death (he was eighty-two years old in 1973)her

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VOL. 64, JUNE 27, 1975 455


paraphernal lands and all the conjugal lands (which shedescribed as „my properties‰) should be divided and



distributed in the manner set forth in that part of her will.She devised and partitioned the conjugal lands as if theywere all owned by her. She disposed of in the will herhusbandÊs one-half share of the conjugal assets.

*

Felix Balanay, Sr. and Avelina B. Antonio opposed theprobate of the will on the grounds of lack of testamentarycapacity, undue influence, preterition of the husband andalleged improper partition of the conjugal estate. Theoppositors claimed that Felix Balanay, Jr. should collatecertain properties which he had received from the testatrix.

Felix Balanay, Jr., in his reply to the opposition,attached thereto an affidavit of Felix Balanay, Sr. datedApril 18, 1973 wherein he withdrew his opposition to theprobate of the will and affirmed that he was interested inits probate. On the same date Felix Balanay, Sr. signed aninstrument captioned „Conformation (sic) of Division andRenunciation of Hereditary Rights‰ wherein he manifestedthat out of respect for his wifeÊs will he „waived andrenounced‰ his hereditary

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* The pertinent provisions of the will are as follows: „II. That I am the

absolute owner of the southern half of the following conjugal properties

which I acquired during my married life with my husband, Felix

Balanay, Sr., namely: (Here follows an enumeration of nine lots).

„III. I am the absolute owner of the following paraphernal properties which I

inherited from my deceased father, Cecilio Julian, namely: (Here follows a

description of two lots).

„IV. It is my desire and I direct that in the interest of my family, my

properties shall not be divided among my heirs during the lifetime of my

husband, Felix Balanay, Sr. but should be kept intact. The respective legitimes

of my husband and my children should be paid in cash out of the proceeds of

sale of the produce and rents derived from said properties.

„V. After the death of my husband, Felix Balanay, Sr., my properties shall be

divided and distributed in the manner as follows:‰ (Here follows a partition of

the nine conjugal lots and the two paraphernal lots. The testatrix divided

among her six children not only her two paraphernal lots, one of which she

devised to Emilia Pabaonon and the other lot to Felix Balanay, Jr., but also the

nine conjugal lots. She did not restrict the partition to her one-half conjugal

share but included her husbandÊs one-half share.).

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456



rights in her estate in favor of their six children. In thatsame instrument he confirmed the agreement, which heand his wife had perfected before her death, that theirconjugal properties would be partitioned in the mannerindicated in her will.

Avelina B. Antonio, an oppositor, in her rejoindercontended that the affidavit and „conformation‰ of FelixBalanay, Sr. were void. The lower court in its order of June18, 1973 „denied‰ the opposition and reset for hearing theprobate of the will. It gave effect to the affidavit andconformity of Felix Balanay, Sr. In an order dated August28, 1973 it appointed its branch clerk of court as specialadministrator of the decedentÊs estate.

Mrs. Antonio moved for the reconsideration of the lowercourtÊs order of June 18, 1973 on the grounds (a) that thetestatrix illegally claimed that she was the owner of thesouthern half of the conjugal lots and (b) that she could notpartition the conjugal estate by allocating portions of thenine lots to her children. Felix Balanay, Jr., through hiscounsel, Hermenegildo Cabreros, opposed that motion. Thelower court denied it in its order of October 15, 1973.

In the meanwhile, another lawyer appeared in the case.David O. Montaña, Sr., claiming to be the lawyer ofpetitioner Felix Balanay, Jr. (his counsel of record was Atty.Cabreros), filed a motion dated September 25, 1973 for„leave of court to withdraw probate of alleged will ofLeodegaria Julian and requesting authority to proceed byintestate estate proceeding.‰ In that motion Montañaclaimed to be the lawyer not only of the petitioner but alsoof Felix Balanay, Sr., Beatriz B. Solamo, Carolina B.Manguiob and Emilia B. Pabaonon.

Montaña in his motion assailed the provision of the willwhich partitioned the conjugal assets or allegedly effected acompromise of future legitimes. He prayed that the probateof the will be withdrawn and that the proceeding beconverted into an intestate proceeding. In another motion



of the same date he asked that the corresponding notice tocreditors be issued.

Avelina B. Antonio and Delia B. Lanaban, through Atty.Jose B. Guyo, in their comments dated October 15, 1973manifested their conformity with the motion for theissuance of a notice to creditors. They prayed that the willbe declared void for being contrary to law and that anintestacy be declared.

The lower court, acting on the motions of Atty. Montaña,assumed that the issuance of a notice to creditors was inorder

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VOL. 64, JUNE 27, 1975 457


since the parties had agreed on that point. It adopted theview of Attys. Montaña and Guyo that the will was void.So, in its order of February 28, 1974 it dismissed thepetition for the probate, converted the testate proceedinginto an intestate proceeding, ordered the issuance of anotice to creditors and set the intestate proceeding forhearing on April 1 and 2, 1974. The lower court did notabrogate its prior orders of June 18 and October 15, 1973.The notice to creditors was issued on April 1, 1974 andpublished on May 2, 9 and 16 in the Davao Star in spite ofpetitionerÊs motion of April 17, 1974 that its publication beheld in abeyance.

Felix Balanay, Jr., through a new counsel, Roberto M.Sarenas, in a verified motion dated April 15, 1974, askedfor the reconsideration of the lower courtÊs order ofFebruary 28, 1974 on the ground that Atty. Montaña hadno authority to withdraw the petition for the allowance ofthe will. Attached to the motion was a copy of a letter datedMarch 27, 1974 addressed to Atty. Montaña and signed byFelix Balanay, Jr., Beatriz V. Solamo, Carolina B.Manguiob and Emilia B. Pabaonon, wherein theyterminated MontañaÊs services and informed him that hiswithdrawal of the petition for the probate of the will waswithout their consent and was contrary to their repeatedreminder to him that their motherÊs will was „very sacredÊ



to them.Avelina B. Antonio and Delia B. Lanaban opposed the

motion for reconsideration. The lower court denied themotion in its order of June 29, 1974. It clarified that itdeclared the will void on the basis of its own independentassessment of its provisions and not because of Atty.MontañaÊs arguments.

The basic issue is whether the probate court erred inpassing upon the intrinsic validity of the will, before rulingon its allowance or formal validity, and in declaring it void.

We are of the opinion that in view of certain unusualprovisions of the will, which are of dubious legality, andbecause of the motion to withdraw the petition for probate(which the lower court assumed to have been filed with thepetitionerÊs authorization), the trial court acted correctly inpassing upon the willÊs intrinsic validity even before itsformal validity had been established. The probate of a willmight become an idle ceremony if on its face it appears tobe intrinsically void. Where practical considerationsdemand that the intrinsic validity of the will be passedupon, even before it

458



is probated, the court should meet the issue (Nuguid vs.Nuguid, 64 O.G. 1527, 17 SCRA 449. Compare withSumilang vs. Ramagosa, L-23135, December 26, 1967, 21SCRA 1369; Cacho vs. Udan, L-19996, April 30, 1965, 13SCRA 693).

But the probate court erred in declaring in its order ofFebruary 28, 1974 that the will was void and in convertingthe testate proceeding into an intestate proceedingnotwithstanding the fact that in its order of June 18, 1973it gave effect to the surviving husbandÊs conformity to thewill and to his renunciation of his hereditary rights whichpresumably included his one-half share of the conjugalestate.

The rule is that „the invalidity of one of severaldispositions contained in a will does not result in the



invalidity of the other dispositions, unless it is to bepresumed that the testator would not have made suchother dispositions if the first invalid disposition had notbeen made‰ (Art. 792, Civil Code). „Where some of theprovisions of a will are valid and others invalid, the validparts will be upheld if they can be separated from theinvalid without defeating the intention of the testator orinterfering with the general testamentary scheme, or doinginjustice to the beneficiaries‰ (95 C.J.S. 873).

The statement of the testatrix that she owned the„southern half‰ of the conjugal lands is contrary to lawbecause, although she was a coowner thereof, her sharewas inchoate and proindiviso (Art. 143, Civil Code;Madrigal and Paterno vs. Rafferty and Concepcion, 38 Phil.414). But that illegal declaration does not nullify the entirewill. It may be disregarded.

The provision of the will that the properties of thetestatrix should not be divided among her heirs during herhusbandÊs lifetime but should be kept intact and that thelegitimes should be paid in cash is contrary to article 1080of the Civil Code which reads:

„ART. 1080. Should a person make a partition of his estate by an actinter vivos, or by will, such partition shall be respected, insofar as itdoes not prejudice the legitime of the compulsory heirs. „A parentwho, in the interest of his or her family, desires to keep anyagricultural, industrial, or manufacturing enterprise intact, mayavail himself of the right granted him in this article, by orderingthat the legitime of the other children to whom the property is notassigned, be paid in cash. (1056a)‰

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VOL. 64, JUNE 27, 1975 459


The testatrix in her will made a partition of the entireconjugal estate among her six children (her husband hadrenounced his hereditary rights and his one-half conjugalshare). She did not assign the whole estate to one or morechildren as envisaged in article 1080. Hence, she had noright to require that the legitimes be paid in cash. On the



other hand, her estate may remain undivided only for aperiod of twenty years. So, the provision that the estateshould not be divided during her husbandÊs lifetime wouldat most be effective only for twenty years from the date ofher death unless there are compelling reasons forterminating the coownership (Art. 1083, Civil Code).

Felix Balanay, Sr. could validly renounce his hereditaryrights and his one-half share of the conjugal partnership(Arts. 179[1] and 1041, Civil Code) but insofar as saidrenunciation partakes of a donation of his hereditary rightsand his one-half share in the conjugal estate (Art. 1050[1],Civil Code), it should be subject to the limitationsprescribed in articles 750 and 752 of the Civil Code. Aportion of the estate should be adjudicated to the widowerfor his support and maintenance. Or at least his legitimeshould be respected.

Subject to the foregoing observations and the rules oncollation, the will is intrinsically valid and the partitiontherein may be given effect if it does not prejudice thecreditors and impair the legitimes. The distribution andpartition would become effective upon the death of FelixBalanay, Sr. In the meantime, the net income should beequitably divided among the children and the survivingspouse.

It should be stressed that by reason of the survivinghusbandÊs conformity to his wifeÊs will and his renunciationof his hereditary rights, his one-half conjugal share becamea part of his deceased wifeÊs estate. His conformity had theeffect of validating the partition made in paragraph V ofthe will without prejudice, of course, to the rights of thecreditors and the legitimes of the compulsory heirs.

Article 793 of the Civil Code provides that „propertyacquired after the making of a will shall only pass thereby,as if the testator had possessed it at the time of making thewill, should it expressly appear by the will that such washis intention‰. Under article 930 of the Civil Code „thelegacy or devise of a thing belonging to another person isvoid, if the testator erroneously believed that the thingpertained to him. But if the thing bequeathed, though notbelonging to the testator when he

460





made the will, afterwards becomes his, by whatever title,the disposition shall take effect.‰

In the instant case there is no doubt that the testatrixand her husband intended to partition the conjugal estatein the manner set forth in paragraph V of her will. It istrue that she could dispose of by will only her half of theconjugal estate (Art. 170, Civil Code) but since thehusband, after the dissolution of the conjugal partnership,had assented to her testamentary partition of the conjugalestate, such partition has become valid, assuming that thewill may be probated.

The instant case is different from the Nuguid case,supra, where the testatrix instituted as heir her sister andpreterited her parents. Her will was intrinsically voidbecause it preterited her compulsory heirs in the directline. Article 854 of the Civil Code provides that „thepreterition or omission of one, some, or all of thecompulsory heirs in the direct line, whether living at thetime of the execution of the will or born after the death ofthe testator, shall annul the institution of heir; but thedevises and legacies shall be valid insofar as they are notinofficious.‰ Since the preterition of the parents annulledthe institution of the sister of the testatrix and there wereno legacies and devises, total intestacy resulted (Art.960[2], Civil Code).

In the instant case, the preterited heir was the survivingspouse. His preterition did not produce intestacy. Moreover,he signified his conformity to his wifeÊs will and renouncedhis hereditary rights.

It results that the lower court erred in not proceedingwith the probate of the will as contemplated in itsuncancelled order of June 18, 1973. Save in an extremecase where the will on its face is intrinsically void, it is theprobate courtÊs duty to pass first upon the formal validity ofthe will. Generally, the probate of the will is mandatory(Art. 838, Civil Code; Guevara vs. Guevara, 74 Phil. 479and 98 Phil. 249; Fernandez vs. Dimagiba, L-23638,October 12, 1967, 21 SCRA 428).

As aptly stated by Mr. Justice Barredo, „the very



existence of a purported testament is in itself prima facieproof that the supposed testator has willed that his estateshould be distributed in the manner therein provided, andit is incumbent upon the state that, if legally tenable, suchdesire be given effect independent of the attitude of theparties affected thereby‰ (Resolution, Vda. de Precilla vs.Narciso, L-27200,

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VOL. 64, JUNE 27, 1975 461


August 18, 1972, 46 SCRA 538, 565).To give effect to the intention and wishes of the testatrix

is the first and principal law in the matter of testaments(Dizon-Rivera vs. Dizon, L-24561, June 30, 1970, 33 SCRA554, 561). Testacy is preferable to intestacy. Aninterpretation that will render a testamentary dispositionoperative takes precedence over a construction that willnullify a provision of the will (Arts. 788 and 791, CivilCode).

Testacy is favored. Doubts are resolved in favor oftestacy especially where the will evinces an intention onthe part of the testator to dispose of practically his wholeestate. So compelling is the principle that intestacy shouldbe avoided and that the wishes of the testator shouldprevail that sometimes the language of the will can bevaried for the purpose of giving it effect (Austria vs. Reyes,L-23079, February 27, 1970, 31 SCRA 754, 762).

As far as is legally possible, the expressed desire of thetestator must be followed and the dispositions of theproperties in his will should be upheld (Estorque vs.Estorque, L-19573, June 30, 1970, 33 SCRA 540, 546).

The law has a tender regard for the wishes of thetestator as expressed in his will because any dispositiontherein is better than that which the law can make (Castrovs. Bustos, L-25913, February 28, 1969, 27 SCRA 327, 341).

Two other errors of the lower court may be noticed. Iterred in issuing a notice to creditors although no executoror regular administrator has been appointed. The recordreveals that it appointed a special administrator. A notice



to creditors is not in order if only a special administratorhas been appointed. Section 1, Rule 86 of the Rules ofCourt, in providing that „immediately after granting lettersof testamentary or of administration, the court shall issue anotice requiring all persons having money claims againstthe decedent to file them in the office of the clerk of saidcourt‰ clearly contemplates the appointment of an executoror regular administrator and not that of a specialadministrator.

It is the executor or regular administrator who issupposed to oppose the claims against the estate and to paysuch claims when duly allowed (Sec. 10, Rule 86 and see. 1,Rule 88, Rules of Court).

We also take this occasion to point out that the probatecourtÊs appointment of its branch clerk of court as special

462



administrator (p. 30, Rollo) is not a salutary practicebecause it might engender the suspicion that the probateJudge and his clerk of court are in cahoots in milking thedecedentÊs estate. Should the branch clerk of court commitany abuse or devastavit in the course of his administration,the probate Judge might find it difficult to hold him to astrict accountability. A court employee should devote hisofficial time to his official duties and should not have as asideline the administration of a decedentÊs estate.

WHEREFORE, the lower courtÊs orders of February 28,and June 29, 1974 are set aside and its order of June 18,1973, setting for hearing the petition for probate, isaffirmed. The lower court is directed to conduct furtherproceedings in Special Case No. 1808 in consonance withthis opinion. Costs, against the private respondents.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio andConcepcion Jr., JJ., concur

Orders set aside.



Notes.·A will may be allowed even if some witnesses donot remember having attested to it, if other evidencesatisfactorily show due execution; and the failure of awitness to identify his signature does not bar probate.(Maravilla vs. Maravilla, 37 SCRA 672). The test whethera witness to a will is deemed to have signed in the presenceof each other is not whether a witness did see the signing ofthe will but whether he was in a position to see if he choseto do so. (Ibid.)

Where a testatrix had no ascendants or descendants,and was accordingly free to leave her property to whom shesaw fit, the fact that she left it to a niece and the grand-daughter of another niece who lived with her during thelatter part of her life did not, of itself, establish undueinfluence or pressure on

the part of the said nieces. (Linsangan vs. Ortiz, 89 Phil.698). There may be an estoppel to contest the provisions ofa will where the contestant has accepted benefits under it,where the rights of innocent third persons will be undulyprejudiced, or where has been an unreasonable delay in theexercise of the right to contest the will. (See 57 Am Jur.544).

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Rodriguez vs. Rodriguez

G.R. No. 175720. September 11, 2007.*

CRESENCIANA TUBO RODRIGUEZ (now deceased),substituted by SUSANA A. LLAGAS, petitioner, vs.EVANGELINE RODRIGUEZ, BELEN RODRIGUEZ andBUENAVENTURA RODRIGUEZ, respondents.

Actions; Unlawful Detainer; Words and Phrases; An action forunlawful detainer exists when a person unlawfully withholdspossession of any land or building against or from a lessor, vendor,vendee or other persons, after the expiration or termination of theright to hold possession, by virtue of any contract, express or implied.·An action for unlawful detainer exists when a person unlawfullywithholds possession of any land or building against or from alessor,

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* THIRD DIVISION.

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VOL. 532, SEPTEMBER 11, 2007 643


vendor, vendee or other persons, after the expiration or terminationof the right to hold possession, by virtue of any contract, express orimplied. The sole issue to be resolved is the question as to who is

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entitled to the physical or material possession of the premises orpossession de facto. Being a summary proceeding intended toprovide an expeditious means of protecting actual possession orright to possession of property, the question of title is not involvedand should be raised by the affected party in an appropriate actionin the proper court.

Same; Same; Jurisdictions; When the issue of ownership israised in an unlawful detainer case, the court is not ousted of itsjurisdiction·all that the trial court can do is to make an initialdetermination of who is the owner of the property so that it canresolve who is entitled to its possession absent other evidence toresolve ownership.·When the issue of ownership is raised the courtis not ousted of its jurisdiction. Section 16 of Rule 70 of the Rules ofCourt provides: SEC. 16. Resolving defense of ownership.·Whenthe defendant raises the defense of ownership in his pleadings andthe question of possession cannot be resolved without deciding theissue of ownership, the issue of ownership shall be resolved only todetermine the issue of possession. Thus, all that the trial court cando is to make an initial determination of who is the owner of theproperty so that it can resolve who is entitled to its possessionabsent other evidence to resolve ownership. But this adjudication isonly provisional and does not bar or prejudice an action between thesame parties involving title to the property.

Same; Same; Wills and Succession; Probate Proceedings; Beforeany will can have force or validity it must be probated·this cannotbe dispensed with and is a matter of public policy; A PartitionAgreement which was executed pursuant to a will that was notprobated can not be given effect.·The lower courts considered thefollowing documentary evidence in arriving at their respectivedecisions, albeit the RTC decision contradicts that of the MTC andCourt of Appeals: 1) Huling Habilin at Testamento executed byJuanito Rodriguez on October 27, 1983; 2) Deed of Sale of theproperty executed by Juanito Rodriguez and the petitioner on June14, 1984; 3) TCT No. 150431 in the name of the petitioner; and 4)the August 23, 1990 Partition Agreement executed by both therespondents and the petitioner. Based on the foregoingdocumentary evidence, we find

644





that there is preponderance of evidence in favor of the petitionerÊsclaim. Respondents failed to prove their right of possession, as theHuling Habilin at Testamento and the Partition Agreement have nolegal effect since the will has not been probated. Before any will canhave force or validity it must be probated. This cannot be dispensedwith and is a matter of public policy. Article 838 of the Civil Codemandates that „[n]o will shall pass either real or personal propertyunless it is proved and allowed in accordance with the Rules ofCourt.‰ As the will was not probated, the Partition Agreementwhich was executed pursuant thereto can not be given effect. Thus,the fact that petitioner was a party to said agreement becomesimmaterial in the determination of the issue of possession.

Same; Same; Same; Sales; Ownership would only pass to theheirs at the time of the death of the testator.·At the time the deed ofsale was executed in favor of the petitioner, Juanito Rodriguezremained the owner thereof since ownership would only pass to hisheirs at the time of his death. Thus, as owner of the property, hehad the absolute right to dispose of it during his lifetime. Now,whether or not the disposition was valid is an issue that can beresolved only in Civil Case No. 01-1641, an action instituted by therespondents for that purpose.

Same; Same; Land Titles; A certificate of title is a conclusiveevidence of ownership of the land described therein, the validity ofwhich shall not be subject to a collateral attack, especially in anejectment case which is summary in nature.·We agree with theRTC that a certificate of title is a conclusive evidence of ownershipof the land described therein; the validity of which shall not besubject to a collateral attack, especially in an ejectment case whichis summary in nature. In Ross Rica Sales Center, Inc. v. Ong, 467SCRA 35 (2005), the Court held that: The long settled rule is thatthe issue of ownership cannot be subject of a collateral attack.

PETITION for review on certiorari of the decision andresolution of the Court of Appeals.

The facts are stated in the opinion of the Court. Jaso, Dorillo & Associates for petitioner.



Divina Paz S. Cacapit-Sacramento for respondents.

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VOL. 532, SEPTEMBER 11, 2007 645


YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the Decision1

of the Court of Appeals in CA-G.R. SP No. 91442 datedJune 27, 2006, which set aside the Decision of the RegionalTrial Court (RTC) of Makati City, Branch 134, in Civil CaseNo. 03-517, and reinstated the Decision of the MetropolitanTrial Court (MTC) of Makati City, Branch 63, in Civil CaseNo. 75717, dismissing the complaint for ejectment; as wellas the Resolution denying the motion for reconsideration.

Juanito Rodriguez owned a five-door apartment locatedat San Jose Street, Guadalupe Nuevo, Makati City, andcovered by TCT No. 144865.

2 On October 27, 1983, Juanito

executed a „Huling Habilin at Testamento‰ givingpetitioner Cresenciana Tubo Rodriguez, his live-in partner,apartments D and E, and his children Benjamin Rodriguez(the deceased husband of respondent EvangelineRodriguez), apartment A, respondent BuenaventuraRodriguez, apartment B, and respondent Belen Rodriguez,apartment C.

3

However, on June 14, 1984, Juanito executed a Deed ofAbsolute Sale over the property in favor of petitioner.

4

Thus, TCT No. 144865 was cancelled and a new TCT No.150431 was issued in the name of the petitioner.

5

The case arose when petitioner filed on September 20,2001 a complaint for unlawful detainer against therespondents, alleging that she is the lawful and registeredowner of the property; and that in 1984, she allowedrespondents Evangeline, Buenaventura and Belen, out ofkindness and tolerance, to personally occupy units A, B andD, respectively. However,

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1 Rollo, pp. 39-49. Penned by Associate Justice Jose L. Sabio, Jr. and








concurred in by Associate Justices Rosalinda Asuncion-Vicente and

Sesinando E. Villon.2 Id., at pp. 157.3 Id., at pp. 160-162.4 Id., at p. 168.5 Id., at p. 145.

646



without her knowledge and consent, respondentsseparately leased the units to Montano Magpantay, MelNavarro and Socorro Escota, who despite repeateddemands, failed and refused to vacate the premises and topay the rentals thereof.

6

In their Answer, respondents claimed ownership overthe subject property by succession. They alleged that whilepetitioner is the registered owner of the property, however,she is not the lawful owner thereof because the June 14,1984 Deed of Absolute Sale was simulated and void. As inCivil Case No. 01-1641 now pending before the RTC ofMakati City, Branch 141, which they filed to assail thevalidity of the said sale, respondents maintain thatpetitioner exerted undue influence over their father, who atthat time was seriously ill, to agree to the sale of theproperty for only P20,000.00 after knowing that only twoapartments were given to her in the Huling Habilin atTestamento. Further, she had no cause of action againstthem for being a party to the August 23, 1990 PartitionAgreement wherein they recognized each other as coownersand partitioned the property in accordance with theprovision of the last will and testament.

7

On February 26, 2002, the MTC rendered a judgment infavor of the respondents and held that the deed of sale wassimulated otherwise petitioner would not have entered intothe Partition Agreement, which legally conferred upon eachheir exclusive ownership over their respective shares, thus:

„WHEREFORE, the Complaint is DISMISSED. Plaintiff is orderedto pay attorneyÊs fees of P10,000.00 and the costs of suit in favor of





defendants.SO ORDERED.‰

8

On appeal, the RTC reversed the decision of the MTC. Itheld that petitionerÊs certificate of title is a conclusive evi-

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6 Id., at pp. 78-82.7 Id., at pp. 92-97.8 Id., at p. 177. Penned by Judge Evelyn S. Arcaya-Chua.

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VOL. 532, SEPTEMBER 11, 2007 647


dence of ownership of the land described therein; and thatunless and until said title has been annulled by a court ofcompetent jurisdiction, such title is existing and valid. Thisis true also with respect to the deed of sale. The presentaction, which involves only the issue of physical or materialpossession, is not the proper action to challenge it. Further,the MTC erred when it relied heavily on the „HulingHabilin at Testamento,‰ which was not probated hence hasno effect and no right can be claimed therein. The PartitionAgreement which was allegedly entered into pursuant tothe Huling Habilin at Testamento should not also beconsidered. Thus:

„WHEREFORE, premises considered, the decision rendered by theMetropolitan Trial Court, Branch 63, Makati City, is hereby orderedREVERSED AND SET ASIDE. Consequently, judgment is herebyrendered ordering the defendants and all persons claiming rightsunder them to vacate the premises and surrender the possessionthereof to the plaintiff. Defendants are likewise ordered to payjointly and severally the plaintiff an amount of P5,000.00 a monthper unit beginning 13 August 2001 until they finally vacate thepremises and the costs of this suit.

SO ORDERED.‰9

Aggrieved, respondents filed a petition for review beforethe Court of Appeals which reversed and set aside the





decision of the RTC and reinstated the decision of the MTC.It held that the MTC correctly received evidence onownership since the question of possession could not beresolved without deciding the issue of ownership. Further,the Huling Habilin at Testamento transmitted ownership ofthe specific apartments not only to the respondents butalso to the petitioner; and pursuant thereto, the partiesexecuted the Partition Agreement in accordance with thewishes of the testator, thus:

_______________

9 Id., at pp. 217. Penned by Judge Perpetua Atal-Paño.

648



„WHEREFORE, this Court resolves to REVERSE and SET ASIDEthe Decision of the Regional Trial Court. The decision datedFebruary 26, 2002 of the Metropolitan Trial Court, Branch 63,Makati City in Civil Case No. 75717 dismissing the complaint forejectment is hereby REINSTATED.

SO ORDERED.‰10

The motion for reconsideration was denied hence,petitioner filed the present petition for review raising thefollowing errors:

I.

THE COURT OF APPEALS COMMITTED A REVERSIBLEERROR OF LAW AND GRAVE ABUSE OF DISCRETION INREVERSING AND SETTING ASIDE THE DECISION OF THEREGIONAL TRIAL COURT AND REINSTATING THE DECISIONOF THE METROPOLITAN TRIAL COURT DISMISSINGPETITIONERÊS COMPLAINT FOR UNLAWFUL DETAINER.

II.

THE COURT OF APPEALS COMMITTED A REVERSIBLEERROR OF LAW AND GRAVE ABUSE OF DISCRETION IN




DECLARING THAT THE PROPERTY, A PARCEL OF LANDUPON WHICH A FIVE-UNIT APARTMENT STANDS, BECAMETHE SUBJECT OF JUANITO RODRIGUEZÊS HULING HABILINAT TESTAMENTO WHEREIN THE PROPERTY WASDISTRIBUTED TO HIS HEIRS (HEREIN RESPONDENTS)INCLUDING THE RESPONDENT (PETITIONER HEREIN).

11

Petitioner alleges that as the registered owner of thesubject property, she enjoys the right of possession thereofand that question of ownership cannot be raised in anejectment case unless it is intertwined with the issue ofpossession. While the court may look into the evidence oftitle or ownership and possession de jure to determine thenature of possession, it cannot resolve the issue ofownership because the

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10 Id., at p. 48.11 Id., at p. 18.

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VOL. 532, SEPTEMBER 11, 2007 649


resolution of said issue would effect an adjudication onownership which is not proper in the summary action forunlawful detainer. Petitioner insists that the Court ofAppeals erred in ruling that the Huling Habilin atTestamento transmitted ownership of the specificapartments disregarding the fact that the same is notprobated yet and that the testator changed or revoked hiswill by selling the property to petitioner prior to his death.

Contrarily, respondents pray that the instant petitionfor review be dismissed since the resolution of the questionof ownership by the MTC and the Court of Appeals wasprovisional only to resolve the issue of possession.Petitioner can always avail of legal remedies to have theissue of ownership passed upon by the proper court. Awareof the provisional nature of the resolution on ownership inejectment cases, respondents filed Civil Case No. 01-1641




to assail the validity of the deed of sale of the property andthe registration thereof in petitionerÊs name.

The petition has merit.An action for unlawful detainer exists when a person

unlawfully withholds possession of any land or buildingagainst or from a lessor, vendor, vendee or other persons,after the expiration or termination of the right to holdpossession, by virtue of any contract, express or implied.

12

The sole issue to be resolved is the question as to who isentitled to the physical or material possession of thepremises or possession de facto.

13 Being a summary

proceeding intended to provide an expeditious means ofprotecting actual possession or right to possession ofproperty, the question of title is not involved

14

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12 Racaza v. Gozum, G.R. No. 148759, June 8, 2006, 490 SCRA 302,

312.13 Domalsin v. Valenciano, G.R. No. 158687, January 25, 2006, 480

SCRA 114, 131.14 Id.

650



and should be raised by the affected party in anappropriate action in the proper court.

15

However, when the issue of ownership is raised the courtis not ousted of its jurisdiction. Section 16 of Rule 70 of theRules of Court provides:

„SEC. 16. Resolving defense of ownership.·When the defendantraises the defense of ownership in his pleadings and the question ofpossession cannot be resolved without deciding the issue ofownership, the issue of ownership shall be resolved only todetermine the issue of possession.‰

Thus, all that the trial court can do is to make an initialdetermination of who is the owner of the property so that it







can resolve who is entitled to its possession absent otherevidence to resolve ownership.

16 But this adjudication is

only provisional and does not bar or prejudice an actionbetween the same parties involving title to the property.

17

In the case at bar, petitionerÊs cause of action forunlawful detainer was based on her alleged ownership ofland covered by TCT No. 150431 and that she merelytolerated respondentsÊ stay thereat. However, whenrespondents leased the apartments to other personswithout her consent, their possession as well as thosepersons claiming right under them became unlawful upontheir refusal to vacate the premises and to pay the rent. Onthe other hand, respondents assailed petitionerÊs title byclaiming that the deed of sale upon which it was based wassimulated and void. They insisted that they were co-ownersthus, they have the right to possess the said property. Toprove their claim, they presented the Huling

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15 Ocampo v. Tirona, G.R. No. 147812, April 6, 2005, 455 SCRA 62, 74.16 Arambulo v. Gungab, G.R. No. 156581, September 30, 2005, 471

SCRA 640, 649.17 Ross Rica Sales Center, Inc. v. Ong, G.R. No. 132197, August 16,

2005, 467 SCRA 35, 50.

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VOL. 532, SEPTEMBER 11, 2007 651


Habilin at Testamento of Juanito Rodriguez and thePartition Agreement.

The lower courts considered the following documentaryevidence in arriving at their respective decisions, albeit theRTC decision contradicts that of the MTC and Court ofAppeals: 1) Huling Habilin at Testamento executed byJuanito Rodriguez on October 27, 1983; 2) Deed of Sale ofthe property executed by Juanito Rodriguez and thepetitioner on June 14, 1984; 3) TCT No. 150431 in thename of the petitioner; and 4) the August 23, 1990Partition Agreement executed by both the respondents and





the petitioner.Based on the foregoing documentary evidence, we find

that there is preponderance of evidence in favor of thepetitionerÊs claim. Respondents failed to prove their right ofpossession, as the Huling Habilin at Testamento and thePartition Agreement have no legal effect since the will hasnot been probated. Before any will can have force orvalidity it must be probated. This cannot be dispensed withand is a matter of public policy.

18 Article 838 of the Civil

Code mandates that „[n]o will shall pass either real orpersonal property unless it is proved and allowed inaccordance with the Rules of Court.‰ As the will was notprobated, the Partition Agreement which was executedpursuant thereto can not be given effect. Thus, the fact thatpetitioner was a party to said agreement becomesimmaterial in the determination of the issue of possession.

Moreover, at the time the deed of sale was executed infavor of the petitioner, Juanito Rodriguez remained theowner thereof since ownership would only pass to his heirsat the time of his death. Thus, as owner of the property, hehad the absolute right to dispose of it during his lifetime.Now, whether or not the disposition was valid is an issuethat can be resolved only in Civil Case No. 01-1641, anaction instituted by the respondents for that purpose.

_______________

18 Tolentino, Civil Code of the Philippines, Vol. III (1979), pp. 151-152.

652



We are, thus, left with the deed of sale and the certificate oftitle over the property to consider.

We agree with the RTC that a certificate of title is aconclusive evidence of ownership of the land describedtherein; the validity of which shall not be subject to acollateral attack, especially in an ejectment case which issummary in nature.

In Ross Rica Sales Center, Inc. v. Ong,19

the Court held





that:

„The long settled rule is that the issue of ownership cannot besubject of a collateral attack.

In Apostol v. Court of Appeals, this Court had the occasion toclarify this:

„. . . Under Section 48 of Presidential Decree No. 1529, a certificate of

title shall not be subject to collateral attack. It cannot be altered,

modified or cancelled, except in a direct proceeding for that purpose in

accordance with law. The issue of the validity of the title of the

respondents can only be assailed in an action expressly instituted for

that purpose. Whether or not the petitioners have the right to claim

ownership over the property is beyond the power of the court a quo to

determine in an action for unlawful detainer.‰

Further, in Co v. Militar,20

it was held that:

„[T]he Torrens System was adopted in this country because it wasbelieved to be the most effective measure to guarantee the integrityof land titles and to protect their indefeasibility once the claim ofownership is established and recognized.

It is settled that a Torrens Certificate of title is indefeasible andbinding upon the whole world unless and until it has been nullifiedby a court of competent jurisdiction. Under existing statutory anddecisional law, the power to pass upon the validity of suchcertificate of title at the first instance properly belongs to theRegional Trial Courts in a direct proceeding for cancellation of title.

_______________

19 Supra note 17 at p. 51.20 G.R. No. 149912, January 29, 2004, 421 SCRA 455, 459-460.

653

VOL. 532, SEPTEMBER 11, 2007 653


As the registered owner, petitioner had a right to the possession ofthe property, which is one of the attributes of ownership. x x x‰

We emphasize, however, that our ruling on the issue of




ownership is only provisional to determine who betweenthe parties has the better right of possession. It is,therefore, not conclusive as to the issue of ownership,which is the subject matter of Civil Case No. 01-1641. Ourruling that petitioner has a better right of possession wasarrived at on the basis of evidence without prejudice to theeventual outcome of the annulment case, where the issueas to who has title to the property in question is fullythreshed out. As the law now stands, in an ejectment suit,the question of ownership may be provisionally ruled uponfor the sole purpose of determining who is entitled topossession de facto.

WHEREFORE, in view of the foregoing, the Decision ofthe Court of Appeals in CA-G.R. SP No. 91442 dated June27, 2006 is REVERSED and SET ASIDE. The Decision ofthe Regional Trial Court of Makati City, Branch 134, inCivil Case No. 03-517, reversing the Decision of theMetropolitan Trial Court (MTC) of Makati City, Branch 63,in Civil Case No. 75717, is REINSTATED.

SO ORDERED.

Austria-Martinez, Chico-Nazario, Nachura andReyes, JJ., concur.

Judgment reversed and set aside, that of Regional TrialCourt of Makati City, Br. 134 reinstated.

Notes.·A judgment in an ejectment suit is binding notonly upon the defendants in the suit but also against thosenot made parties thereto, if they are: (a) trespassers,squatters or agents of the defendant fraudulentlyoccupying the property to frustrate the judgment; (b)guests or other occupants of the premises with thepermission of the defendant;

654


People vs. Torres

(c) transferees pendente lite; (d) sub-lessees; (e) co-lessees;or (f) members of the family, relatives and other privies of



the defendant. (Equitable PCI Bank vs. Ku, 355 SCRA 309[2001])

The best way to verify the ownership of houses is torefer to the certificates of title in the Register of Deeds.(Español vs. Mupas, 442 SCRA 13 [2004])

··o0o··



Page 1 of 55http://www.central.com.ph/sfsreader/session/0000014f5475800ece227a6d000a0094004f00ee/p/AML766/?username=Guest

G.R. No. 165748. September 14, 2011.*

HEIRS OF POLICRONIO M. URETA, SR., namely:CONRADO B. URETA, MACARIO B. URETA, GLORIAURETA-GONZALES, ROMEO B. URETA, RITA URETA-SOLANO, NENA URETA-TONGCUA, VENANCIO B.URETA, LILIA URETA-TAYCO, and HEIRS OFPOLICRONIO B. URETA, JR., namely: MIGUEL T.URETA, RAMON POLICRONIO T. URETA, EMMANUELT. URETA, and BERNADETTE T. URETA, petitioners, vs.HEIRS OF LIBERATO M. URETA, namely: TERESA F.URETA, AMPARO URETA-CASTILLO, IGNACIO F.URETA, SR., EMIRITO F. URETA, WILKIE F. URETA,LIBERATO F. URETA, JR., RAY F. URETA, ZALDY F.URETA, and MILA JEAN URETA CIPRIANO; HEIRS OFPRUDENCIA URETA PARADERO, namely: WILLIAM U.PARADERO, WARLITO U. PARADERO, CARMENCITA P.PERLAS, CRISTINA P. CORDOVA, EDNA P. GALLARDO,LETICIA P. REYES; NARCISO M. URETA; VICENTE M.

_______________

** Per Special Order No. 1077-A dated 12 September 2011.

* THIRD DIVISION.

556


Heirs of Policronio M. Ureta, Sr. vs. Heirs of Liberato M.Ureta

URETA; HEIRS OF FRANCISCO M. URETA, namely:EDITA T. URETA-REYES and LOLLIE T. URETA-VILLARUEL; ROQUE M. URETA; ADELA URETA-GONZALES; HEIRS OF INOCENCIO M. URETA, namely:BENILDA V. URETA, ALFONSO V. URETA II, DICK

http://www.central.com.ph/sfsreader/session/0000014f5475800ece227a6d000a0094004f00ee/p/AML766/?username=Guest#ftn2

http://www.central.com.ph/sfsreader/session/0000014f5475800ece227a6d000a0094004f00ee/p/AML766/?username=Jeric#body_ftn1




RICARDO V. URETA, and ENRIQUE V. URETA;MERLINDA U. RIVERA; JORGE URETA; ANDRESURETA, WENEFREDA U. TARAN; and BENEDICTURETA, respondents.

G.R. No. 165930. September 14, 2011.*

HEIRS OF LIBERATO M. URETA, namely: TERESA F.URETA, AMPARO URETA-CASTILLO, IGNACIO F.URETA, SR., EMIRITO F. URETA, WILKIE F. URETA,LIBERATO F. URETA, JR., RAY F. URETA, ZALDY F.URETA, and MILA JEAN URETA CIPRIANO; HEIRS OFPRUDENCIA URETA PARADERO, namely: WILLIAM U.PARADERO, WARLITO U. PARADERO, CARMENCITA P.PERLAS, CRISTINA P. CORDOVA, EDNA P. GALLARDO,LETICIA P. REYES; NARCISO M. URETA; VICENTE M.URETA; HEIRS OF FRANCISCO M. URETA, namely:EDITA T. URETA-REYES and LOLLIE T. URETA-VILLARUEL; ROQUE M. URETA; ADELA URETA-GONZALES; HEIRS OF INOCENCIO M. URETA, namely:BENILDA V. URETA, ALFONSO V. URETA II, DICKRICARDO V. URETA, and ENRIQUE V. URETA;MERLINDA U. RIVERA; JORGE URETA; ANDRESURETA, WENEFREDA U. TARAN; and BENEDICTURETA, petitioners, vs. HEIRS OF POLICRONIO M.URETA, SR., namely: CONRADO B. URETA, MACARIO B.URETA, GLORIA URETA-GONZALES, ROMEO B.URETA, RITA URETA-SOLANO, NENA URETA-TONGCUA, VENANCIO B. URETA, LILIA URETA-TAYCO, and HEIRS OF POLICRONIO B. URETA, JR.,namely: MIGUEL T. URETA, RAMON POLICRONIO T.URETA, EMMANUEL T. URETA, and BERNADETTE T.URETA, respondents.

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VOL. 657, SEPTEMBER 14, 2011 557


Civil Law; Contracts; Void Contracts; Simulated Contracts; Inabsolute simulation, there is a colorable contract but it has no



substance as the parties have no intention to be bound by it; Themain characteristic of an absolute simulation is that the apparentcontract is not really desired or intended to produce legal effect or inany way alter the juridical situation of the parties·lacking in anabsolutely simulated contract is consent which is essential to a voidand enforceable contract.·Valerio v. Refresca, 485 SCRA 494 (2006),is instructive on the matter of simulation of contracts: In absolutesimulation, there is a colorable contract but it has no substance asthe parties have no intention to be bound by it. The maincharacteristic of an absolute simulation is that the apparentcontract is not really desired or intended to produce legal effect orin any way alter the juridical situation of the parties. As a result,an absolutely simulated or fictitious contract is void, and the partiesmay recover from each other what they may have given under thecontract. However, if the parties state a false cause in the contractto conceal their real agreement, the contract is relatively simulatedand the parties are still bound by their real agreement. Hence,where the essential requisites of a contract are present and thesimulation refers only to the content or terms of the contract, theagreement is absolutely binding and enforceable between theparties and their successors in interest. Lacking, therefore, in anabsolutely simulated contract is consent which is essential to avalid and enforceable contract. Thus, where a person, in order toplace his property beyond the reach of his creditors, simulates atransfer of it to another, he does not really intend to divest himselfof his title and control of the property; hence, the deed of transfer isbut a sham. Similarly, in this case, Alfonso simulated a transfer toPolicronio purely for taxation purposes, without intending totransfer ownership over the subject lands.

Same; Same; Same; Same; The primary consideration indetermining the true nature of a contract is the intention of theparties·if the words of a contract appear to contravene the evidentintention of the parties, the latter shall prevail.·The primaryconsideration in determining the true nature of a contract is theintention of the parties. If the words of a contract appear tocontravene the evident intention of the parties, the latter shallprevail. Such intention is determined not only from the expressterms of their agreement, but also from the contemporaneous andsubsequent acts of the

558




Heirs of Policronio M. Ureta, Sr. vs. Heirs of Liberato M. Ureta

parties. The true intention of the parties in this case wassufficiently proven by the Heirs of Alfonso. The Heirs of Alfonsoestablished by a preponderance of evidence that the Deed of Salewas one of the four (4) absolutely simulated Deeds of Sale whichinvolved no actual monetary consideration, executed by Alfonso infavor of his children, Policronio, Liberato, and Prudencia, and hissecond wife, Valeriana, for taxation purposes.

Same; Same; Same; Same; The most protuberant index ofsimulation of contract is the complete absence of an attempt in anymanner on the part of the ostensible buyer to assert rights ofownership over the subject properties.·The most protuberant indexof simulation of contract is the complete absence of an attempt inany manner on the part of the ostensible buyer to assert rights ofownership over the subject properties. PolicronioÊs failure to takeexclusive possession of the subject properties or, in the alternative,to collect rentals, is contrary to the principle of ownership. Suchfailure is a clear badge of simulation that renders the wholetransaction void.

Same; Same; Same; Same; Fundamental Characteristics of Voidor Inexistent Contracts.·For guidance, the following are the mostfundamental characteristics of void or inexistent contracts: 1) As ageneral rule, they produce no legal effects whatsoever in accordancewith the principle „quod nullum est nullum producit effectum.‰ 2)They are not susceptible of ratification. 3) The right to set up thedefense of inexistence or absolute nullity cannot be waived orrenounced. 4) The action or defense for the declaration of theirinexistence or absolute nullity is imprescriptible. 5) The inexistenceor absolute nullity of a contract cannot be invoked by a personwhose interests are not directly affected.

Same; Same; Same; It is well-settled in a long line of cases thatwhere a deed of sale states that the purchase price has been paid butin fact has never been paid, the deed of sale is null and void for lackof consideration.·It is well-settled in a long line of cases that wherea deed of sale states that the purchase price has been paid but infact has never been paid, the deed of sale is null and void for lack ofconsideration. Thus, although the contract states that the purchaseprice of P2,000.00 was paid by Policronio to Alfonso for the subject



properties, it has been proven that such was never in fact paid as

559

VOL. 657, SEPTEMBER 14, 2011 559


there was no money involved. It must, therefore, follow that theDeed of Sale is void for lack of consideration.

Pleadings; Practice and Procedure; Objection to Admission ofEvidence; The objection against the admission of any evidence mustbe made at the proper time, as soon as the grounds therefor becomereasonably apparent, and if not so made, it will be understood tohave been waived.·The objection against the admission of anyevidence must be made at the proper time, as soon as the groundstherefor become reasonably apparent, and if not so made, it will beunderstood to have been waived. In the case of testimonial evidence,the objection must be made when the objectionable question isasked or after the answer is given if the objectionable featuresbecome apparent only by reason of such answer. In this case, theHeirs of Policronio failed to timely object to the testimony ofAmparo Castillo and they are, thus, deemed to have waived thebenefit of the parol evidence rule.

Parol Evidence; The exception in paragraph (b), Sec. 9, Rule 130of the Rules of Court·failure of the written agreement to express thetrue intent and agreement of the parties thereto·is allowed toenable the court to ascertain the true intent of the parties, and oncethe intent is clear, it shall prevail over what the document appears tobe on its face.·The failure of the Deed of Sale to express the trueintent and agreement of the parties was clearly put in issue in theAnswer of the Heirs of Alfonso to the Complaint. It was alleged thatthe Deed of Sale was only made to lessen the payment of estate andinheritance taxes and not meant to transfer ownership. Theexception in paragraph (b) is allowed to enable the court toascertain the true intent of the parties, and once the intent is clear,it shall prevail over what the document appears to be on its face. Asthe true intent of the parties was duly proven in the present case, itnow prevails over what appears on the Deed of Sale.

Same; The operation of the parol evidence rule requires theexistence of a valid written agreement·it is not applicable in a



proceeding where the validity of such agreement is the fact indispute, such as when a contract may be void for lack ofconsideration.·The validity of the Deed of Sale was also put inissue in the Answer, and was precisely one of the issues submittedto the RTC for resolution. The operation of the parol evidence rulerequires the existence of a valid written agreement. It is, thus, notapplicable in a proceeding where

560



the validity of such agreement is the fact in dispute, such as when acontract may be void for lack of consideration. Considering that theDeed of Sale has been shown to be void for being absolutelysimulated and for lack of consideration, the Heirs of Alfonso are notprecluded from presenting evidence to modify, explain or add to theterms of the written agreement.

Hearsay Evidence Rule; While hearsay evidence whetherobjected to or not cannot be given credence for having no probativevalue, such principle has been relaxed in cases where, in addition tothe failure to object to the admissibility of the subject evidence, therewere other pieces of evidence presented or there were othercircumstances prevailing to support the fact in issue.·It has indeedbeen held that hearsay evidence whether objected to or not cannotbe given credence for having no probative value. This principle,however, has been relaxed in cases where, in addition to the failureto object to the admissibility of the subject evidence, there wereother pieces of evidence presented or there were othercircumstances prevailing to support the fact in issue. In Top-WeldManufacturing, Inc. v. ECED S.A., 138 SCRA 118 (1985), this Courtheld: Hearsay evidence alone may be insufficient to establish a factin an injunction suit (Parker v. Furlong, 62 P. 490) but, when noobjection is made thereto, it is, like any other evidence, to beconsidered and given the importance it deserves. (Smith v.Delaware & Atlantic Telegraph & Telephone Co., 51 A 464).Although we should warn of the undesirability of issuing judgmentssolely on the basis of the affidavits submitted, where as here, saidaffidavits are overwhelming, uncontroverted by competent evidence



and not inherently improbable, we are constrained to uphold theallegations of the respondents regarding the multifarious violationsof the contracts made by the petitioner.

Civil Law; Contracts; Void Contracts; Simulated Contracts;Rescission; A simulated contract of sale is without any cause orconsideration, and is, therefore, null and void·no independentaction to rescind or annul the contract is necessary, and it may betreated as non-existent for all purposes.·A simulated contract ofsale is without any cause or consideration, and is, therefore, nulland void; in such case, no independent action to rescind or annulthe contract is necessary, and it may be treated as non-existent forall purposes. A void or inexistent contract is one which has no forceand effect from

561

VOL. 657, SEPTEMBER 14, 2011 561


the beginning, as if it has never been entered into, and whichcannot be validated either by time or ratification. A void contractproduces no effect whatsoever either against or in favor of anyone;it does not create, modify or extinguish the juridical relation towhich it refers. Therefore, it was not necessary for the Heirs ofAlfonso to first file an action to declare the nullity of the Deed ofSale prior to executing the Deed of Extra-Judicial Partition.

Same; Same; Same; Same; The right to set up the nullity of avoid or non-existent contract is not limited to the parties, as in thecase of annullable or voidable contracts·it is extended to thirdpersons who are directly affected by the contract; Where a contract isabsolutely simulated, even third persons who may be prejudicedthereby may set up its inexistence.·Article 1311 and Article 1421 ofthe Civil Code provide: Art. 1311. Contracts take effect onlybetween the parties, their assigns and heirs, x x x Art. 1421. Thedefense of illegality of contracts is not available to third personswhose interests are not directly affected. The right to set up thenullity of a void or non-existent contract is not limited to theparties, as in the case of annullable or voidable contracts; it isextended to third persons who are directly affected by the contract.Thus, where a contract is absolutely simulated, even third persons



who may be prejudiced thereby may set up its inexistence. TheHeirs of Alfonso are the children of Alfonso, with his deceasedchildren represented by their children (AlfonsoÊs grandchildren).The Heirs of Alfonso are clearly his heirs and successors-in-interestand, as such, their interests are directly affected, thereby givingthem the right to question the legality of the Deed of Sale.

Same; Same; Same; Same; Wills and Succession; Art. 842 of theCivil Code refers to the principle of freedom of disposition by willand has no application to a disposition by Deed of Sale.·Article 842of the Civil Code provides: Art. 842. One who has no compulsoryheirs may dispose by will of all his estate or any part of it in favor ofany person having capacity to succeed. One who has compulsoryheirs may dispose of his estate provided he does not contravene theprovisions of this Code with regard to the legitime of said heirs.This article refers to the principle of freedom of disposition by will.What is involved in the case at bench is not a disposition by will butby Deed of Sale. Hence, the Heirs of Alfonso need not first provethat the disposition substantially diminished their successionalrights or unduly prejudiced their legitimes.

562



Same; Same; Same; Same; Article 1412 of the Civil Code refersto contracts with an illegal cause or subject-matter, presupposing theexistence of a cause·it is not applicable to fictitious or simulatedcontracts which are in reality non-existent.·Article 1412 is notapplicable to fictitious or simulated contracts, because they refer tocontracts with an illegal cause or subject-matter. This articlepresupposes the existence of a cause, it cannot refer to fictitious orsimulated contracts which are in reality non-existent. As it hasbeen determined that the Deed of Sale is a simulated contract, theprovision cannot apply to it.

Same; Same; Same; Same; Prescription; Waiver; Where the Deedof Sale is a void contract, the action for the declaration of its nullity,even if filed 21 years after its execution, cannot be barred byprescription for it is imprescriptible; The right to set up the defenseof inexistence or absolute nullity cannot be waived or renounced.·



Article 1410 of the Civil Code provides: Art. 1410. The action for thedeclaration of the inexistence of a contract does not prescribe. Thisis one of the most fundamental characteristics of void or inexistentcontracts. As the Deed of Sale is a void contract, the action for thedeclaration of its nullity, even if filed 21 years after its execution,cannot be barred by prescription for it is imprescriptible.Furthermore, the right to set up the defense of inexistence orabsolute nullity cannot be waived or renounced. Therefore, theHeirs of Alfonso cannot be precluded from setting up the defense ofits inexistence.

Appeals; Pleadings, Practice and Procedure; The rule that onlytheories raised in the initial proceedings may be taken up by a partythereto on appeal should refer to independent, not concomitantmatters, to support or oppose the cause of action.·To begin,although the defenses of unenforceability, ratification andpreterition were raised by the Heirs of Alfonso for the first time onappeal, they are concomitant matters which may be taken up. Aslong as the questioned items bear relevance and close relation tothose specifically raised, the interest of justice would dictate thatthey, too, must be considered and resolved. The rule that onlytheories raised in the initial proceedings may be taken up by aparty thereto on appeal should refer to independent, notconcomitant matters, to support or oppose the cause of action.

Succession; Partition; Extra-Judicial Partition; Special Powerof Attorney; Partition among heirs is not legally deemed aconveyance

563

VOL. 657, SEPTEMBER 14, 2011 563


of real property resulting in change of ownership·it is not a transferof property from one to the other, but rather, it is a confirmation orratification of title or right of property that an heir is renouncing infavor of another heir who accepts and receives the inheritance; Sincea Deed of Extra-Judicial Partition cannot be considered as an act ofstrict dominion, a special power of attorney is not necessary.·ThisCourt finds that Article 1878 (5) and (15) is inapplicable to the caseat bench. It has been held in several cases that partition among



heirs is not legally deemed a conveyance of real property resultingin change of ownership. It is not a transfer of property from one tothe other, but rather, it is a confirmation or ratification of title orright of property that an heir is renouncing in favor of another heirwho accepts and receives the inheritance. It is merely a designationand segregation of that part which belongs to each heir. The Deed ofExtra-Judicial Partition cannot, therefore, be considered as an actof strict dominion. Hence, a special power of attorney is notnecessary. In fact, as between the parties, even an oral partition bythe heirs is valid if no creditors are affected. The requirement of awritten memorandum under the statute of frauds does not apply topartitions effected by the heirs where no creditors are involvedconsidering that such transaction is not a conveyance of propertyresulting in change of ownership but merely a designation andsegregation of that part which belongs to each heir.

Same; Preterition; Words and Phrases; Preterition is the totalomission of a compulsory heir from the inheritance·it consists inthe silence of the testator with regard to a compulsory heir, omittinghim in the testament, either by not mentioning him at all, or by notgiving him anything in the hereditary property but without expresslydisinheriting him, even if he is mentioned in the will in the lattercase.·Preterition has been defined as the total omission of acompulsory heir from the inheritance. It consists in the silence ofthe testator with regard to a compulsory heir, omitting him in thetestament, either by not mentioning him at all, or by not giving himanything in the hereditary property but without expresslydisinheriting him, even if he is mentioned in the will in the lattercase. Preterition is thus a concept of testamentary succession andrequires a will. In the case at bench, there is no will involved.Therefore, preterition cannot apply.

PETITIONS for review on certiorari of the decision andresolution of the Court of Appeals.

564



The facts are stated in the opinion of the Court. SV Ramos Law Office for Heirs of Policronio M. Ureta,



Sr., et al. Ma. Regina Mercedes B. Gatmaytan for Heirs of

Liberato M. Ureta.

MENDOZA, J.:These consolidated petitions for review on certiorari

under Rule 45 of the 1997 Revised Rules of Civil Procedureassail the April 20, 2004 Decision1 of the Court of Appeals(CA), and its October 14, 2004 Resolution2 in CA-G.R. CVNo. 71399, which affirmed with modification the April 26,2001 Decision3 of the Regional Trial Court, Branch 9,Kalibo, Aklan (RTC) in Civil Case No. 5026.The Facts

In his lifetime, Alfonso Ureta (Alfonso) begot 14children, namely, Policronio, Liberato, Narciso, Prudencia,Vicente, Francisco, Inocensio, Roque, Adela, Wenefreda,Merlinda, Benedicto, Jorge, and Andres. The children ofPolicronio (Heirs of Policronio), are opposed to the rest ofAlfonsoÊs children and their descendants (Heirs of Alfonso).

Alfonso was financially well-off during his lifetime. Heowned several fishpens, a fishpond, a sari-sari store, apassenger jeep, and was engaged in the buying and sellingof copra. Policronio, the eldest, was the only child of Alfonsowho

_______________

1 Penned by Associate Justice Perlita J. Tria Tirona with Associate

Justice B.A. Adefuin-De La Cruz and Associate Justice Arturo D. Brion

(now a member of this Court), concurring.

2 Penned by Associate Justice Perlita J. Tria Tirona with Associate

Justice Ruben T. Reyes and Associate Justice Arturo D. Brion (now a

member of this Court), concurring.

3 Rollo (G.R. No. 165748), pp. 75-81.

565

VOL. 657, SEPTEMBER 14, 2011 565


failed to finish schooling and instead worked on his fatherÊslands.






Sometime in October 1969, Alfonso and four of hischildren, namely, Policronio, Liberato, Prudencia, andFrancisco, met at the house of Liberato. Francisco, who wasthen a municipal judge, suggested that in order to reducethe inheritance taxes, their father should make it appearthat he had sold some of his lands to his children.Accordingly, Alfonso executed four (4) Deeds of Salecovering several parcels of land in favor of Policronio,4

Liberato,5 Prudencia,6 and his common-law wife, ValerianaDela Cruz.7 The Deed of Sale executed on October 25, 1969,in favor of Policronio, covered six parcels of land, which arethe properties in dispute in this case.

Since the sales were only made for taxation purposesand no monetary consideration was given, Alfonsocontinued to own, possess and enjoy the lands and theirproduce.

When Alfonso died on October 11, 1972, Liberato actedas the administrator of his fatherÊs estate. He was latersucceeded by his sister Prudencia, and then by herdaughter, Carmencita Perlas. Except for a portion of parcel5, the rest of the parcels transferred to Policronio weretenanted by the Fernandez Family. These tenants neverturned over the produce of the lands to Policronio or any ofhis heirs, but to Alfonso and, later, to the administrators ofhis estate.

Policronio died on November 22, 1974. Except for thesaid portion of parcel 5, neither Policronio nor his heirsever took possession of the subject lands.

On April 19, 1989, AlfonsoÊs heirs executed a Deed ofExtra-Judicial Partition,8 which included all the lands thatwere covered by the four (4) deeds of sale that werepreviously

_______________

4 Exhibit „G,‰ records, p. 349.

5 Exhibit „5,‰ id., at p. 526.

6 Exhibit „11,‰ id., at p. 528.

7 Exhibit „6,‰ id., at p. 527.

8 Exhibit „7,‰ id., at pp. 529-539.

566










executed by Alfonso for taxation purposes. Conrado,PolicronioÊs eldest son, representing the Heirs of Policronio,signed the Deed of Extra-Judicial Partition in behalf of hisco-heirs.

After their fatherÊs death, the Heirs of Policronio foundtax declarations in his name covering the six parcels ofland. On June 15, 1995, they obtained a copy of the Deed ofSale executed on October 25, 1969 by Alfonso in favor ofPolicronio.

Not long after, on July 30, 1995, the Heirs of Policronioallegedly learned about the Deed of Extra-JudicialPartition involving AlfonsoÊs estate when it was publishedin the July 19, 1995 issue of the Aklan Reporter.

Believing that the six parcels of land belonged to theirlate father, and as such, excluded from the Deed of Extra-Judicial Partition, the Heirs of Policronio sought toamicably settle the matter with the Heirs of Alfonso.Earnest efforts proving futile, the Heirs of Policronio filed aComplaint for Declaration of Ownership, Recovery ofPossession, Annulment of Documents, Partition, andDamages9 against the Heirs of Alfonso before the RTC onNovember 17, 1995 where the following issues weresubmitted: (1) whether or not the Deed of Sale was valid;(2) whether or not the Deed of Extra-Judicial Partition wasvalid; and (3) who between the parties was entitled todamages.The Ruling of the RTC

On April 26, 2001, the RTC dismissed the Complaint ofthe Heirs of Policronio and ruled in favor of the Heirs ofAlfonso in a decision, the dispositive portion of which reads:

„WHEREFORE, the Court finds that the preponderance ofevidence tilts in favor of the defendants, hence the instant case ishereby DISMISSED.

_______________

9 Rollo (G.R. No. 165748), pp. 51-65.




567

VOL. 657, SEPTEMBER 14, 2011 567


The counterclaims are likewise DISMISSED.With costs against plaintiffs.SO ORDERED.‰

The RTC found that the Heirs of Alfonso clearlyestablished that the Deed of Sale was null and void. It heldthat the Heirs of Policronio failed to rebut the evidence ofthe Heirs of Alfonso, which proved that the Deed of Sale inthe possession of the former was one of the four (4) Deedsof Sale executed by Alfonso in favor of his 3 children andsecond wife for taxation purposes; that although taxdeclarations were issued in the name of Policronio, he orhis heirs never took possession of the subject lands except aportion of parcel 5; and that all the produce were turnedover by the tenants to Alfonso and the administrators of hisestate and never to Policronio or his heirs.

The RTC further found that there was no moneyinvolved in the sale. Even granting that there was, asclaimed by the Heirs of Policronio, P2,000.00 for six parcelsof land, the amount was grossly inadequate. It was alsonoted that the aggregate area of the subject lands wasmore than double the average share adjudicated to each ofthe other children in the Deed of Extra-Judicial Partition;that the siblings of Policronio were the ones who shared inthe produce of the land; and that the Heirs of Policronioonly paid real estate taxes in 1996 and 1997. The RTCopined that Policronio must have been aware that thetransfer was merely for taxation purposes because he didnot subsequently take possession of the properties evenafter the death of his father.

The Deed of Extra-Judicial Partition, on the other hand,was declared valid by the RTC as all the heirs of Alfonsowere represented and received equal shares and all therequirements of a valid extra-judicial partition were met.The RTC considered ConradoÊs claim that he did notunderstand the full significance of his signature when hesigned in behalf of his co-heirs, as a gratuitous assertion.



The RTC was of the

568



view that when he admitted to have signed all the pagesand personally appeared before the notary public, he waspresumed to have understood their contents.

Lastly, neither party was entitled to damages. The Heirsof Alfonso failed to present testimony to serve as factualbasis for moral damages, no document was presented toprove actual damages, and the Heirs of Policronio werefound to have filed the case in good faith.The Ruling of the CA

Aggrieved, the Heirs of Policronio appealed before theCA, which rendered a decision on April 20, 2004, thedispositive portion of which reads as follows:

„WHEREFORE, the appeal is PARTIALLY GRANTED. Theappealed Decision, dated 26 April 2001, rendered by Hon. JudgeDean R. Telan of the Regional Trial Court of Kalibo, Aklan, Branch9, is hereby AFFIRMED with MODIFICATION:

1.) The Deed of Sale in favor of Policronio Ureta, Sr., dated 25October 1969, covering six (6) parcels of land is hereby declaredVOID for being ABSOLUTELY SIMULATED;

2.) The Deed of Extra-Judicial Partition, dated 19 April 1989, isANNULLED;

3.) The claim for actual and exemplary damages areDISMISSED for lack of factual and legal basis.

The case is hereby REMANDED to the court of origin for theproper partition of ALFONSO URETAÊS Estate in accordance withRule 69 of the 1997 Rules of Civil Procedure. No costs at thisinstance.

SO ORDERED.‰

The CA affirmed the finding of the RTC that the Deed ofSale was void. It found the Deed of Sale to be absolutelysimulated as the parties did not intend to be legally boundby it. As such, it produced no legal effects and did not alter



the juridical situation of the parties. The CA also notedthat Al-

569

VOL. 657, SEPTEMBER 14, 2011 569


fonso continued to exercise all the rights of an owner evenafter the execution of the Deed of Sale, as it wasundisputed that he remained in possession of the subjectparcels of land and enjoyed their produce until his death.

Policronio, on the other hand, never exercised any rightspertaining to an owner over the subject lands from the timethey were sold to him up until his death. He never took orattempted to take possession of the land even after hisfatherÊs death, never demanded delivery of the producefrom the tenants, and never paid realty taxes on theproperties. It was also noted that Policronio never disclosedthe existence of the Deed of Sale to his children, as theywere, in fact, surprised to discover its existence. The CA,thus, concluded that Policronio must have been aware thatthe transfer was only made for taxation purposes.

The testimony of Amparo Castillo, as to thecircumstances surrounding the actual arrangement andagreement between the parties prior to the execution of thefour (4) Deeds of Sale, was found by the CA to beunrebutted. The RTCÊs assessment of the credibility of hertestimony was accorded respect, and the intention of theparties was given the primary consideration in determiningthe true nature of the contract.

Contrary to the finding of the RTC though, the CAannulled the Deed of Extra-Judicial Partition due to theincapacity of one of the parties to give his consent to thecontract. It held that before Conrado could validly bind hisco-heirs to the Deed of Extra-Judicial Partition, it wasnecessary that he be clothed with the proper authority. TheCA ruled that a special power of attorney was requiredunder Article 1878 (5) and (15) of the Civil Code. Without aspecial power of attorney, it was held that Conrado lackedthe legal capacity to give the consent of his co-heirs, thus,



rendering the Deed of Extra-Judicial Partition voidableunder Article 1390 (1) of the Civil Code.

As a consequence, the CA ordered the remand of thecase to the RTC for the proper partition of the estate, withthe option

570



that the parties may still voluntarily effect the partition byexecuting another agreement or by adopting the assailedDeed of Partition with the RTCÊs approval in either case.Otherwise, the RTC may proceed with the compulsorypartition of the estate in accordance with the Rules.

With regard to the claim for damages, the CA agreedwith the RTC and dismissed the claim for actual andcompensatory damages for lack of factual and legal basis.

Both parties filed their respective Motions forReconsideration, which were denied by the CA for lack ofmerit in a Resolution dated October 14, 2004.

In their Motion for Reconsideration, the Heirs ofPolicronio argued that the RTC violated the best evidencerule in giving credence to the testimony of Amparo Castillowith regard to the simulation of the Deed of Sale, and thatprescription had set in precluding any question on thevalidity of the contract.

The CA held that the oral testimony was admissibleunder Rule 130, Section 9 (b) and (c), which provides thatevidence aliunde may be allowed to explain the terms ofthe written agreement if the same failed to express the trueintent and agreement of the parties thereto, or when thevalidity of the written agreement was put in issue.Furthermore, the CA found that the Heirs of Policroniowaived their right to object to evidence aliunde havingfailed to do so during trial and for raising such only for thefirst time on appeal. With regard to prescription, the CAruled that the action or defense for the declaration of theinexistence of a contract did not prescribe under Article1410 of the Civil Code.



On the other hand, the Heirs of Alfonso argued that theDeed of Extra-Judicial Partition should not have beenannulled, and instead the preterited heirs should be giventheir share. The CA reiterated that ConradoÊs lack ofcapacity to give his co-heirsÊ consent to the extra-judicialsettlement rendered the same voidable.

Hence, the present Petitions for Review on Certiorari.

571

VOL. 657, SEPTEMBER 14, 2011 571


The Issues

The issues presented for resolution by the Heirs ofPolicronio in G.R. No. 165748 are as follows:

I.

Whether the Court of Appeals is correct in ruling that the

Deed of Absolute Sale of 25 October 1969 is void for being

absolutely fictitious and in relation therewith, may parol

evidence be entertained to thwart its binding effect after the

parties have both died?

Assuming that indeed the said document is simulated,

whether or not the parties thereto including their

successors in interest are estopped to question its validity,

they being bound by Articles 1412 and 1421 of the Civil

Code?

II.

Whether prescription applies to bar any question respecting

the validity of the Deed of Absolute Sale dated 25 October

1969? Whether prescription applies to bar any collateral

attack on the validity of the deed of absolute sale executed

21 years earlier?

III.

Whether the Court of Appeals correctly ruled in nullifying

the Deed of Extrajudicial Partition because Conrado Ureta

signed the same without the written authority from his

siblings in contravention of Article 1878 in relation to

Article 1390 of the Civil Code and in relation therewith,

whether the defense of ratification and/or preterition raised



for the first time on appeal may be entertained?

The issues presented for resolution by the Heirs ofAlfonso in G.R. No. 165930 are as follows:

I.

Whether or not grave error was committed by the Trial

Court and Court of Appeals in declaring the Deed of Sale of

subject

572



properties as absolutely simulated and null and void thru

parol evidence based on their factual findings as to its

fictitious nature, and there being waiver of any objection

based on violation of the parol evidence rule.

II.

Whether or not the Court of Appeals was correct in holding

that Conrado UretaÊs lack of capacity to give his co-heirsÊ

consent to the Extra-Judicial Partition rendered the same

voidable.

III.

Granting arguendo that Conrado Ureta was not authorized

to represent his co-heirs and there was no ratification,

whether or not the Court of Appeals was correct in ordering

the remand of the case to the Regional Trial Court for

partition of the estate of Alfonso Ureta.

IV.

Since the sale in favor of Policronio Ureta Sr. was null and

void ab initio, the properties covered therein formed part of

the estate of the late Alfonso Ureta and was correctly

included in the Deed of Extrajudicial Partition even if no

prior action for nullification of the sale was filed by the

heirs of Liberato Ureta.

V.

Whether or not the heirs of Policronio Ureta Sr. can claim

that estoppel based on Article 1412 of the Civil Code as well

as the issue of prescription can still be raised on appeal.

These various contentions revolve around two major



issues, to wit: (1) whether the Deed of Sale is valid, and (2)whether the Deed of Extrajudicial Partition is valid. Thus,the assigned errors shall be discussed jointly and inseriatim.

573

VOL. 657, SEPTEMBER 14, 2011 573


The Ruling of the Court

Validity of the Deed of SaleTwo veritable legal presumptions bear on the validity of

the Deed of Sale: (1) that there was sufficient considerationfor the contract; and (2) that it was the result of a fair andregular private transaction. If shown to hold, thesepresumptions infer prima facie the transactionÊs validity,except that it must yield to the evidence adduced.10

As will be discussed below, the evidence overcomes thesetwo presumptions.Absolute Simulation

First, the Deed of Sale was not the result of a fair andregular private transaction because it was absolutelysimulated.

The Heirs of Policronio argued that the land had beenvalidly sold to Policronio as the Deed of Sale contained allthe essential elements of a valid contract of sale, by virtueof which, the subject properties were transferred in hisname as evidenced by the tax declaration. There being noinvalidation prior to the execution of the Deed ofExtrajudicial Partition, the probity and integrity of theDeed of Sale should remain undiminished and accordedrespect as it was a duly notarized public instrument.

The Heirs of Policronio posited that his loyal services tohis father and his being the eldest among AlfonsoÊschildren, might have prompted the old man to sell thesubject lands to him at a very low price as an advanceinheritance. They explained that PolicronioÊs failure to takepossession of the subject lands and to claim their producemanifests a Filipino



_______________

10 Manila Banking Corporation v. Silverio, 504 Phil. 17, 25-26; 466

SCRA 438, 446-447 (2005), citing Suntay v. Court of Appeals, 321 Phil.

809; 251 SCRA 430 (1995) and Rules of Court, Rule 131, Sec. 3 (r) and

(p).

574



family practice wherein a child would take possession andenjoy the fruits of the land sold by a parent only after thelatterÊs death. Policronio simply treated the lands the sameway his father Alfonso treated them·where his childrenenjoyed usufructuary rights over the properties, as opposedto appropriating them exclusively to himself. Theycontended that PolicronioÊs failure to take actual possessionof the lands did not prove that he was not the owner as hewas merely exercising his right to dispose of them. Theyargue that it was an error on the part of the CA to concludethat ownership by Policronio was not established by hisfailure to possess the properties sold. Instead, emphasisshould be made on the fact that the tax declarations, beingindicia of possession, were in PolicronioÊs name.

They further argued that the Heirs of Alfonso failed toappreciate that the Deed of Sale was clear enough toconvey the subject parcels of land. Citing jurisprudence,they contend that there is a presumption that aninstrument sets out the true agreement of the partiesthereto and that it was executed for valuableconsideration,11 and where there is no doubt as to theintention of the parties to a contract, the literal meaning ofthe stipulation shall control.12 Nowhere in the Deed of Saleis it indicated that the transfer was only for taxationpurposes. On the contrary, the document clearly indicatesthat the lands were sold. Therefore, they averred that theliteral meaning of the stipulation should control.

The Court disagrees.The Court finds no cogent reason to deviate from the

finding of the CA that the Deed of Sale is null and void for




being absolutely simulated. The Civil Code provides:

_______________

11 Gatmaitan v. Court of Appeals, G.R. No. 76500, August 2, 1991, 200

SCRA 38.

12 Ascalon v. Court of Appeals, 242 Phil. 265; 158 SCRA 542 (1988).

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VOL. 657, SEPTEMBER 14, 2011 575


Art. 1345. Simulation of a contract may be absolute or relative. Theformer takes place when the parties do not intend to be bound atall; the latter, when the parties conceal their true agreement.Art. 1346. An absolutely simulated or fictitious contract is void. Arelative simulation, when it does not prejudice a third person and isnot intended for any purpose contrary to law, morals, good customs,public order or public policy binds the parties to their realagreement.

Valerio v. Refresca13 is instructive on the matter of

simulation of contracts:

„In absolute simulation, there is a colorable contract but it hasno substance as the parties have no intention to be bound by it. Themain characteristic of an absolute simulation is that the apparentcontract is not really desired or intended to produce legal effect orin any way alter the juridical situation of the parties. As a result,an absolutely simulated or fictitious contract is void, and the partiesmay recover from each other what they may have given under thecontract. However, if the parties state a false cause in the contractto conceal their real agreement, the contract is relatively simulatedand the parties are still bound by their real agreement. Hence,where the essential requisites of a contract are present and thesimulation refers only to the content or terms of the contract, theagreement is absolutely binding and enforceable between theparties and their successors in interest.‰

Lacking, therefore, in an absolutely simulated contract





is consent which is essential to a valid and enforceablecontract.14 Thus, where a person, in order to place hisproperty beyond the reach of his creditors, simulates atransfer of it to another, he does not really intend to divesthimself of his title and control of the property; hence, thedeed of transfer is but

_______________

13 G.R. No. 163687, March 28, 2006, 485 SCRA 494, 500-501; citing

Loyola v. Court of Appeals, 383 Phil. 171; 326 SCRA 285 (2000), and

Balite v. Lim, 487 Phil. 281; 446 SCRA 56 (2004).

14 Manila Banking Corporation v. Silverio, supra note 10 at p. 27; p.

448, citing PeopleÊs Aircargo and Warehousing Co., Inc. v. Court of

Appeals, 357 Phil. 850; 297 SCRA 170 (1998).

576



a sham.15 Similarly, in this case, Alfonso simulated atransfer to Policronio purely for taxation purposes, withoutintending to transfer ownership over the subject lands.

The primary consideration in determining the truenature of a contract is the intention of the parties. If thewords of a contract appear to contravene the evidentintention of the parties, the latter shall prevail. Suchintention is determined not only from the express terms oftheir agreement, but also from the contemporaneous andsubsequent acts of the parties.16 The true intention of theparties in this case was sufficiently proven by the Heirs ofAlfonso.

The Heirs of Alfonso established by a preponderance ofevidence17 that the Deed of Sale was one of the four (4)absolutely simulated Deeds of Sale which involved noactual monetary consideration, executed by Alfonso infavor of his children, Policronio, Liberato, and Prudencia,and his second wife, Valeriana, for taxation purposes.

Amparo Castillo, the daughter of Liberato, testified, towit:





_______________

15 Tongoy v. Court of Appeals, 208 Phil. 95, 113; 123 SCRA 99, 118-119

(1983); citing Rodriguez v. Rodriguez, 127 Phil. 294, 301-302; 20 SCRA

908, 914-15 (1967).

16 Lopez v. Lopez, G.R. No. 161925, November 25, 2009, 605 SCRA

358, 367.

17 Rules of Court, Rule 133, Sec. 1. Preponderance of evidence, how

determined.·In civil cases, the party having the burden of proof must

establish his case by a preponderance of evidence. In determining where

the preponderance or superior weight of evidence on the issues involved

lies, the court may consider all the facts and circumstance of the case,

the witnessesÊ manner of testifying, their intelligence, their means and

opportunity of knowing the facts to which they are testifying, the nature

of the facts to which they testify, the probability of their testimony, their

interest or want of interest, and also their personal credibility so far as

the same may legitimately appear upon the trial. The court may also

consider the number of witnesses, though the preponderance is not

necessarily with the greater number.

577

VOL. 657, SEPTEMBER 14, 2011 577


Q: Now sometime in the year 1969 can you recall if your grandfather

and his children [met] in your house?

A: Yes sir, that was sometime in October 1969 when they [met] in our

house, my grandfather, my late uncle Policronio Ureta, my late

uncle Liberato Ureta, my uncle Francisco Ureta, and then my

auntie Prudencia Ureta they talk[ed] about, that idea came from

my uncle Francisco Ureta to [sell] some parcels of land to his

children to lessen the inheritance tax whatever happened to my

grandfather, actually no money involved in this sale

Q: Now you said there was that agreement, verbal agreement. [W]here

were you when this Alfonso Ureta and his children gather[ed] in

your house?

A: I was near them in fact I heard everything they were talking [about]

x x x

Q: Were there documents of sale executed by Alfonso Ureta in

furtherance of their verbal agreement?

A: Yes sir.






Q: To whom in particular did your grandfather Alfonso Ureta execute

this deed of sale without money consideration according to you?

A: To my uncle Policronio Ureta and to Prudencia Ureta Panadero.

Q: And who else?

A: To Valeriana dela Cruz.

Q: How about your father?

A: He has.18

The other Deeds of Sale executed by Alfonso in favor ofhis children Prudencia and Liberato, and second wifeValeriana, all bearing the same date of execution, wereduly presented in evidence by the Heirs of Alfonso, andwere uncontested by the Heirs of Policronio. The landswhich were the subject of these Deeds of Sale were in factincluded in the Deed of Extra-

_______________

18 TSN, April 6, 1998, pp. 9-10.

578



Judicial Partition executed by all the heirs of Alfonso,where it was expressly stipulated:

„That the above-named Amparo U. Castillo, Prudencia U.Paradero, Conrado B. Ureta and Merlinda U. Rivera do herebyrecognize and acknowledge as a fact that the properties presentlydeclared in their respective names or in the names of theirrespective parents and are included in the foregoing instrument areactually the properties of the deceased Alfonso Ureta and weretransferred only for the purpose of effective administration anddevelopment and convenience in the payment of taxes and,therefore, all instruments conveying or affecting the transfer of saidproperties are null and void from the beginning.‰19

As found by the CA, Alfonso continued to exercise all therights of an owner even after the execution of the Deeds ofSale. It was undisputed that Alfonso remained in




possession of the subject lands and enjoyed their produceuntil his death. No credence can be given to the contentionof the Heirs of Policrionio that their father did not takepossession of the subject lands or enjoyed the fruits thereofin deference to a Filipino family practice. Had this beentrue, Policronio should have taken possession of the subjectlands after his father died. On the contrary, it wasadmitted that neither Policronio nor his heirs ever tookpossession of the subject lands from the time they were soldto him, and even after the death of both Alfonso andPolicronio.

It was also admitted by the Heirs of Policronio that thetenants of the subject lands never turned over the produceof the properties to Policronio or his heirs but only toAlfonso and the administrators of his estate. Neither wasthere a demand for their delivery to Policronio or his heirs.Neither did Policronio ever pay real estate taxes on theproperties, the only payment on record being those made byhis heirs in 1996 and 1997 ten years after his death. Insum, Policronio never exer-

_______________

19 Exhibit „7-d,‰ records, p. 533.

579

VOL. 657, SEPTEMBER 14, 2011 579


cised any rights pertaining to an owner over the subjectlands.

The most protuberant index of simulation of contract isthe complete absence of an attempt in any manner on thepart of the ostensible buyer to assert rights of ownershipover the subject properties. PolicronioÊs failure to takeexclusive possession of the subject properties or, in thealternative, to collect rentals, is contrary to the principle ofownership. Such failure is a clear badge of simulation thatrenders the whole transaction void. 20

It is further telling that Policronio never disclosed the




existence of the Deed of Sale to his children. This, coupledwith PolicronioÊs failure to exercise any rights pertaining toan owner of the subject lands, leads to the conclusion thathe was aware that the transfer was only made for taxationpurposes and never intended to bind the parties thereto.

As the above factual circumstances remain unrebuttedby the Heirs of Policronio, the factual findings of the RTC,which were affirmed by the CA, remain binding andconclusive upon this Court.21

It is clear that the parties did not intend to be bound atall, and as such, the Deed of Sale produced no legal effectsand did not alter the juridical situation of the parties. TheDeed of Sale is, therefore, void for being absolutelysimulated pursuant to Article 1409 (2) of the Civil Codewhich provides:

„Art. 1409. The following contracts are inexistent and void fromthe beginning:

_______________

20 Manila Banking Corporation v. Silverio, supra note 10 at p. 31; p. 452-

453, citing Suntay v. Court of Appeals, 321 Phil. 809; 251 SCRA 430 (1995);

Santiago v. Court of Appeals, 343 Phil. 612; 278 SCRA 98 (1997); Cruz v.

Bancom Finance Corporation, 429 Phil. 225; 379 SCRA 490 (2002); and Ramos

v. Heirs of Ramos, 431 Phil. 337; 381 SCRA 594 (2002).

21 Samala v. Court of Appeals, 467 Phil. 563, 568; 423 SCRA 142, 145-146

(2004).

580



x x x(2) Those which are absolutely simulated or fictitious;

x x x

For guidance, the following are the most fundamentalcharacteristics of void or inexistent contracts:

1) As a general rule, they produce no legal effectswhatsoever in accordance with the principle „quodnullum est nullum producit effectum.‰

2) They are not susceptible of ratification.





3) The right to set up the defense of inexistence orabsolute nullity cannot be waived or renounced.

4) The action or defense for the declaration of theirinexistence or absolute nullity is imprescriptible.

5) The inexistence or absolute nullity of a contractcannot be invoked by a person whose interests are notdirectly affected.22

Since the Deed of Sale is void, the subject propertieswere properly included in the Deed of ExtrajudicialPartition of the estate of Alfonso.Absence and Inadequacy of Consideration

The second presumption is rebutted by the lack ofconsideration for the Deed of Sale.

In their Answer,23 the Heirs of Alfonso initially arguedthat the Deed of Sale was void for lack of consideration,and even granting that there was consideration, such wasinadequate. The Heirs of Policronio counter that thedefenses of absence

_______________

22 Tongoy v. Court of Appeals, supra note 15; Manila Banking

Corporation v. Silverio, 504 Phil. 17, 33; 466 SCRA 438, 454 (2005).

23 Rollo (G.R. No. 165748), p. 69-70.

581

VOL. 657, SEPTEMBER 14, 2011 581


or inadequacy of consideration are not grounds to render acontract void.

The Heirs of Policronio contended that under Article1470 of the Civil Code, gross inadequacy of the price doesnot affect a contract of sale, except as it may indicate adefect in the consent, or that the parties really intended adonation or some other act or contract. Citingjurisprudence, they argued that inadequacy of monetaryconsideration does not render a conveyance inexistent asliberality may be sufficient cause for a valid contract,whereas fraud or bad faith may render it either rescissible





or voidable, although valid until annulled.24 Thus, theyargued that if the contract suffers from inadequateconsideration, it remains valid until annulled, and theremedy of rescission calls for judicial intervention, whichremedy the Heirs of Alfonso failed to take.

It is further argued that even granting that the sale ofthe subject lands for a consideration of P2,000.00 wasinadequate, absent any evidence of the fair market value ofthe land at the time of its sale, it cannot be concluded thatthe price at which it was sold was inadequate.25 As there isnothing in the records to show that the Heirs of Alfonsosupplied the true value of the land in 1969, the amount ofP2,000.00 must thus stand as its saleable value.

On this issue, the Court finds for the Heirs of Alfonso.For lack of consideration, the Deed of Sale is once again

found to be void. It states that Policronio paid, and Alfonsoreceived, the P2,000.00 purchase price on the date of thesigning of the contract:

„That I, ALFONSO F. URETA, x x x for and in consideration ofthe sum of TWO THOUSAND (P2,000.00) PESOS, PhilippineCurrency, to me in hand paid by POLICRONIO M. URETA, x x x,do

_______________

24 Morales Development Company, Inc. v. Court of Appeals, 137 Phil. 307; 27

SCRA 484 (1969).

25 Acabal v. Acabal, 494 Phil. 528; 454 SCRA 555 (2005).

582



hereby CEDE, TRANSFER, and CONVEY, by way of absolute sale,x x x six (6) parcels of land x x x.‰26 [Emphasis ours]

Although, on its face, the Deed of Sale appears to besupported by valuable consideration, the RTC found thatthere was no money involved in the sale.27 This finding wasaffirmed by the CA in ruling that the sale is void for beingabsolutely simulated. Considering that there is no cogentreason to deviate from such factual findings, they are





binding on this Court.It is well-settled in a long line of cases that where a deed

of sale states that the purchase price has been paid but infact has never been paid, the deed of sale is null and voidfor lack of consideration.28 Thus, although the contractstates that the purchase price of P2,000.00 was paid byPolicronio to Alfonso for the subject properties, it has beenproven that such was never in fact paid as there was nomoney involved. It must, therefore, follow that the Deed ofSale is void for lack of consideration.

Given that the Deed of Sale is void, it is unnecessary todiscuss the issue on the inadequacy of consideration.Parol Evidence and Hearsay

The Heirs of Policronio aver that the rules on parolevidence and hearsay were violated by the CA in rulingthat the Deed of Sale was void.

_______________

26 Exhibit „G,‰ records, p. 349.

27 Rollo (G.R. No. 165748), p. 79; and TSN, April 6, 1998, p. 9.

28 Montecillo v. Reynes, 434 Phil. 456, 469; 385 SCRA 244, 256 (2002);

citing Ocejo Perez & Co. v. Flores, 40 Phil 921 (1920); Mapalo v. Mapalo,

123 Phil. 979; 17 SCRA 114 (1966); Vda. de Catindig v. Roque, 165 Phil.

707; 74 SCRA 83 (1976); Rongavilla v. Court of Appeals, 355 Phil. 721;

294 SCRA 289 (1998); and Yu Bu Guan v. Ong, 419 Phil. 845; 367 SCRA

559 (2001).

583

VOL. 657, SEPTEMBER 14, 2011 583


They argued that based on the parol evidence rule, theHeirs of Alfonso and, specifically, Amparo Castillo, were notin a position to prove the terms outside of the contractbecause they were not parties nor successors-in-interest inthe Deed of Sale in question. Thus, it is argued that thetestimony of Amparo Castillo violates the parol evidencerule.

Stemming from the presumption that the Heirs of






Alfonso were not parties to the contract, it is also arguedthat the parol evidence rule may not be properly invoked byeither party in the litigation against the other, where atleast one of the parties to the suit is not a party or a privyof a party to the written instrument in question and doesnot base a claim on the instrument or assert a rightoriginating in the instrument or the relation establishedthereby.29

Their arguments are untenable.The objection against the admission of any evidence

must be made at the proper time, as soon as the groundstherefor become reasonably apparent, and if not so made, itwill be understood to have been waived. In the case oftestimonial evidence, the objection must be made when theobjectionable question is asked or after the answer is givenif the objectionable features become apparent only byreason of such answer.30 In this case, the Heirs ofPolicronio failed to timely object to the testimony ofAmparo Castillo and they are, thus, deemed to have waivedthe benefit of the parol evidence rule.

Granting that the Heirs of Policronio timely objected tothe testimony of Amparo Castillo, their argument wouldstill fail.

Section 9 of Rule 130 of the Rules of Court provides:

„Section 9. Evidence of written agreements.·When the terms of anagreement have been reduced to writing, it is considered ascontaining all the terms agreed upon and there can be, between theparties

_______________

29 Lechugas v. Court of Appeals, 227 Phil. 310; 143 SCRA 335 (1986).

30 RULES OF COURT, Rule 132, Sec. 36.

584



and their successors in interest, no evidence of such terms otherthan the contents of the written agreement.

However, a party may present evidence to modify, explain or add





to the terms of written agreement if he puts in issue in his pleading:(a) An intrinsic ambiguity, mistake or imperfection in thewritten agreement;(b) The failure of the written agreement to express the trueintent and agreement of the parties thereto;(c) The validity of the written agreement; or(d) The existence of other terms agreed to by the parties ortheir successors in interest after the execution of the writtenagreement.The term „agreement‰ includes wills.‰[Emphasis ours]

Paragraphs (b) and (c) are applicable in the case atbench.

The failure of the Deed of Sale to express the true intentand agreement of the parties was clearly put in issue in theAnswer31 of the Heirs of Alfonso to the Complaint. It wasalleged that the Deed of Sale was only made to lessen thepayment of estate and inheritance taxes and not meant totransfer ownership. The exception in paragraph (b) isallowed to enable the court to ascertain the true intent ofthe parties, and once the intent is clear, it shall prevail overwhat the document appears to be on its face.32 As the trueintent of the parties was duly proven in the present case, itnow prevails over what appears on the Deed of Sale.

The validity of the Deed of Sale was also put in issue inthe Answer, and was precisely one of the issues submittedto the RTC for resolution.33 The operation of the parolevidence rule

_______________

31 Rollo (G.R. No. 165748), pp. 66-74.

32 Premier Insurance and Surety Corporation v. Intermediate

Appellate Court, 225 Phil. 370, 381; 141 SCRA 423, 434 (1986); citing

Labasan v. Lacuesta, 175 Phil. 216; 86 SCRA 16 (1978).

33 Rollo (G.R No. 165748), p. 77.

585

VOL. 657, SEPTEMBER 14, 2011 585







requires the existence of a valid written agreement. It is,thus, not applicable in a proceeding where the validity ofsuch agreement is the fact in dispute, such as when acontract may be void for lack of consideration.34

Considering that the Deed of Sale has been shown to bevoid for being absolutely simulated and for lack ofconsideration, the Heirs of Alfonso are not precluded frompresenting evidence to modify, explain or add to the termsof the written agreement.

The Heirs of Policronio must be in a state of confusion inarguing that the Heirs of Alfonso may not question theDeed of Sale for not being parties or successors-in-interesttherein on the basis that the parol evidence rule may not beproperly invoked in a proceeding or litigation where atleast one of the parties to the suit is not a party or a privyof a party to the written instrument in question and doesnot base a claim on the instrument or assert a rightoriginating in the instrument or the relation establishedthereby. If their argument was to be accepted, then theHeirs of Policronio would themselves be precluded frominvoking the parol evidence rule to exclude the evidence ofthe Heirs of Alfonso.

Indeed, the applicability of the parol evidence rulerequires that the case be between parties and theirsuccessors-in-interest.35 In this case, both the Heirs ofAlfonso and the Heirs of Policronio are successors-in-interest of the parties to the Deed of Sale as they claimrights under Alfonso and Policronio, respectively. The parolevidence rule excluding evidence aliunde, however, stillcannot apply because the present case falls under twoexceptions to the rule, as discussed above.

With respect to hearsay, the Heirs of Policroniocontended that the rule on hearsay was violated when thetestimony of Amparo Castillo was given weight in provingthat the subject

_______________

34 Herrera, Remedial Law, Vol. V, pp. 208-209, [1999].

35 Lechugas v. Court of Appeals, 227 Phil. 310, 319; 143 SCRA 335,

343 (1986).

586







lands were only sold for taxation purposes as she was aperson alien to the contract. Even granting that they didnot object to her testimony during trial, they argued that itshould not have been appreciated by the CA because it hadno probative value whatsoever.36

The Court disagrees.It has indeed been held that hearsay evidence whether

objected to or not cannot be given credence for having noprobative value.37 This principle, however, has been relaxedin cases where, in addition to the failure to object to theadmissibility of the subject evidence, there were otherpieces of evidence presented or there were othercircumstances prevailing to support the fact in issue. InTop-Weld Manufacturing, Inc. v. ECED S.A.,38 this Courtheld:

„Hearsay evidence alone may be insufficient to establish a fact inan injunction suit (Parker v. Furlong, 62 P. 490) but, when noobjection is made thereto, it is, like any other evidence, to beconsidered and given the importance it deserves. (Smith v.Delaware & Atlantic Telegraph & Telephone Co., 51 A 464).Although we should warn of the undesirability of issuing judgmentssolely on the basis of the affidavits submitted, where as here, saidaffidavits are overwhelming, uncontroverted by competent evidenceand not inherently improbable, we are constrained to uphold theallegations of the respondents regarding the multifarious violationsof the contracts made by the petitioner.‰

In the case at bench, there were other prevailingcircumstances which corroborate the testimony of AmparoCastillo. First, the other Deeds of Sale which were executedin favor of Liberato, Prudencia, and Valeriana on the sameday as that of PolicronioÊs were all presented in evidence.Second, all the

_______________

36 Eugenio v. Court of Appeals, G.R. No. 103737, December 15, 1994,




239 SCRA 207.

37 People v. Parungao, 332 Phil. 917, 924; 265 SCRA 140, 147 (1996).

38 222 Phil. 424, 437; 138 SCRA 118, 132 (1985).

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VOL. 657, SEPTEMBER 14, 2011 587


properties subject therein were included in the Deed ofExtra-Judicial Partition of the estate of Alfonso. Third,Policronio, during his lifetime, never exercised acts ofownership over the subject properties (as he neverdemanded or took possession of them, never demanded orreceived the produce thereof, and never paid real estatetaxes thereon). Fourth, Policronio never informed hischildren of the sale.

As the Heirs of Policronio failed to controvert theevidence presented, and to timely object to the testimony ofAmparo Castillo, both the RTC and the CA correctlyaccorded probative weight to her testimony.Prior Action Unnecessary

The Heirs of Policronio averred that the Heirs of Alfonsoshould have filed an action to declare the sale void prior toexecuting the Deed of Extra-Judicial Partition. Theyargued that the sale should enjoy the presumption ofregularity, and until overturned by a court, the Heirs ofAlfonso had no authority to include the land in theinventory of properties of AlfonsoÊs estate. By doing so, theyarrogated upon themselves the power of invalidating theDeed of Sale which is exclusively vested in a court of lawwhich, in turn, can rule only upon the observance of dueprocess. Thus, they contended that prescription, laches, orestoppel have set in to militate against assailing thevalidity of the sale.

The Heirs of Policronio are mistaken.A simulated contract of sale is without any cause or

consideration, and is, therefore, null and void; in such case,no independent action to rescind or annul the contract isnecessary, and it may be treated as non-existent for allpurposes.39 A void





_______________

39 Ocejo Perez & Co. v. Flores, 40 Phil. 921 (1920); De Belen v.

Collector of Customs, 46 Phil. 241 (1924); Gallion v. Gayares, 53 Phil. 43

(1929); Escutin v. Escutin, 60 Phil. 922 (1934); Gonzales v. Trinidad, 67

Phil. 682 (1939); Portugal v. Intermediate Appellate Court, 242 Phil. 709;

159 SCRA 178 (1988).

588



or inexistent contract is one which has no force and effectfrom the beginning, as if it has never been entered into,and which cannot be validated either by time orratification. A void contract produces no effect whatsoevereither against or in favor of anyone; it does not create,modify or extinguish the juridical relation to which itrefers.40 Therefore, it was not necessary for the Heirs ofAlfonso to first file an action to declare the nullity of theDeed of Sale prior to executing the Deed of ExtrajudicialPartition.Personality to Question Sale

The Heirs of Policronio contended that the Heirs ofAlfonso are not parties, heirs, or successors-in-interestunder the contemplation of law to clothe them with thepersonality to question the Deed of Sale. They argued thatunder Article 1311 of the Civil Code, contracts take effectonly between the parties, their assigns and heirs. Thus, thegenuine character of a contract which personally binds theparties cannot be put in issue by a person who is not aparty thereto. They posited that the Heirs of Alfonso werenot parties to the contract; neither did they appear to bebeneficiaries by way of assignment or inheritance. Unlikethemselves who are direct heirs of Policronio, the Heirs ofAlfonso are not AlfonsoÊs direct heirs. For the Heirs ofAlfonso to qualify as parties, under Article 1311 of the CivilCode, they must first prove that they are either heirs orassignees. Being neither, they have no legal standing toquestion the Deed of Sale.

They further argued that the sale cannot be assailed for




being barred under Article 1421 of the Civil Code whichprovides that the defense of illegality of a contract is notavailable to third persons whose interests are not directlyaffected.

Again, the Court disagrees.Article 1311 and Article 1421 of the Civil Code provide:

_______________

40 Tongoy v. Court of Appeals, supra note 15.

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VOL. 657, SEPTEMBER 14, 2011 589


Art. 1311. Contracts take effect only between the parties, theirassigns and heirs, x x xArt. 1421. The defense of illegality of contracts is not available tothird persons whose interests are not directly affected.

The right to set up the nullity of a void or non-existentcontract is not limited to the parties, as in the case ofannullable or voidable contracts; it is extended to thirdpersons who are directly affected by the contract. Thus,where a contract is absolutely simulated, even thirdpersons who may be prejudiced thereby may set up itsinexistence.41 The Heirs of Alfonso are the children ofAlfonso, with his deceased children represented by theirchildren (AlfonsoÊs grandchildren). The Heirs of Alfonso areclearly his heirs and successors-in-interest and, as such,their interests are directly affected, thereby giving themthe right to question the legality of the Deed of Sale.Inapplicability of Article 842

The Heirs of Policronio further argued that evenassuming that the Heirs of Alfonso have an interest in theDeed of Sale, they would still be precluded fromquestioning its validity. They posited that the Heirs ofAlfonso must first prove that the sale of AlfonsoÊsproperties to Policronio substantially diminished theirsuccessional rights or that their legitimes would be undulyprejudiced, considering that under Article 842 of the Civil




Code, one who has compulsory heirs may dispose of hisestate provided that he does not contravene the provisionsof the Civil Code with regard to the legitime of said heirs.Having failed to do so, they argued that the Heirs ofAlfonso should be precluded from questioning the validityof the Deed of Sale.

_______________

41 Arsenal v. Intermediate Appellate Court, 227 Phil. 36, 46-47; 143

SCRA 40, 49 (1986); Tolentino, Civil Code of the Philippines, Vol. IV, p.

643, [2002].

590



Still, the Court disagrees.Article 842 of the Civil Code provides:

Art. 842. One who has no compulsory heirs may dispose by will ofall his estate or any part of it in favor of any person having capacityto succeed.One who has compulsory heirs may dispose of his estate providedhe does not contravene the provisions of this Code with regard tothe legitime of said heirs.

This article refers to the principle of freedom ofdisposition by will. What is involved in the case at bench isnot a disposition by will but by Deed of Sale. Hence, theHeirs of Alfonso need not first prove that the dispositionsubstantially diminished their successional rights orunduly prejudiced their legitimes.Inapplicability of Article 1412

The Heirs of Policronio contended that even assumingthat the contract was simulated, the Heirs of Alfonso wouldstill be barred from recovering the properties by reason ofArticle 1412 of the Civil Code, which provides that if theact in which the unlawful or forbidden cause does notconstitute a criminal offense, and the fault is both on thecontracting parties, neither may recover what he has given




by virtue of the contract or demand the performance of theotherÊs undertaking. As the Heirs of Alfonso alleged thatthe purpose of the sale was to avoid the payment ofinheritance taxes, they cannot take from the Heirs ofPolicronio what had been given to their father.

On this point, the Court again disagrees.Article 1412 of the Civil Code is as follows:

„Art. 1412. If the act in which the unlawful or forbidden cause consists

does not constitute a criminal offense, the following rules shall be

observed:

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VOL. 657, SEPTEMBER 14, 2011 591


(1) When the fault is on the part of both contracting parties, neither

may recover what he has given by virtue of the contract, or

demand the performance of the otherÊs undertaking;

(2) When only one of the contracting parties is at fault, he cannot

recover what he has given by reason of the contract, or ask for the

fulfillment of what has been promised him. The other, who is not

at fault, may demand the return of what he has given without any

obligation to comply with his promise.‰

Article 1412 is not applicable to fictitious or simulatedcontracts, because they refer to contracts with an illegalcause or subject-matter.42 This article presupposes theexistence of a cause, it cannot refer to fictitious orsimulated contracts which are in reality non-existent.43 Asit has been determined that the Deed of Sale is a simulatedcontract, the provision cannot apply to it.

Granting that the Deed of Sale was not simulated, theprovision would still not apply. Since the subject propertieswere included as properties of Alfonso in the Deed of Extra-Judicial Partition, they are covered by correspondinginheritance and estate taxes. Therefore, tax evasion, if atall present, would not arise, and Article 1412 would againbe inapplicable.Prescription



From the position that the Deed of Sale is valid and notvoid, the Heirs of Policronio argued that any questionregarding its validity should have been initiated throughjudicial process within 10 years from its notarization inaccordance with Article 1144 of the Civil Code. Since 21years had al-

_______________

42 Sta. Romana v. Imperio, 122 Phil. 1001, 1007; 15 SCRA 625, 630-

631 (1965); Tolentino, Civil Code of the Philippines, Vol. IV, p. 634,

(2002).

43 Gonzales v. Trinidad, 67 Phil. 682, 683-684 (1939); Castro v.

Escutin, 179 Phil. 277, 284; 90 SCRA 349, 355 (1979).

592



ready elapsed when the Heirs of Alfonso assailed thevalidity of the Deed of Sale in 1996, prescription had set in.Furthermore, since the Heirs of Alfonso did not seek tonullify the tax declarations of Policronio, they hadimpliedly acquiesced and given due recognition to the Heirsof Policronio as the rightful inheritors and should, thus, bebarred from laying claim on the land.

The Heirs of Policronio are mistaken.Article 1410 of the Civil Code provides:

„Art. 1410. The action for the declaration of the inexistence of acontract does not prescribe.‰

This is one of the most fundamental characteristics ofvoid or inexistent contracts.44As the Deed of Sale is a voidcontract, the action for the declaration of its nullity, even iffiled 21 years after its execution, cannot be barred byprescription for it is imprescriptible. Furthermore, theright to set up the defense of inexistence or absolute nullitycannot be waived or renounced.45 Therefore, the Heirs ofAlfonso cannot be precluded from setting up the defense ofits inexistence.





Validity of the Deed of Extra-Judicial PartitionThe Court now resolves the issue of the validity of the

Deed of Extra-Judicial Partition.Unenforceability

The Heirs of Alfonso argued that the CA was mistakenin annulling the Deed of Extra-Judicial Partition due to theincapacity of Conrado to give the consent of his co-heirs for

_______________

44 Tongoy v. Court of Appeals, supra note 15; Manila Banking

Corporation v. Silverio, 504 Phil. 17, 33; 466 SCRA 438, 454 (2005).

45 Id.

593

VOL. 657, SEPTEMBER 14, 2011 593


lack of a special power of attorney. They contended thatwhat was involved was not the capacity to give consent inbehalf of the co-heirs but the authority to represent them.They argue that the Deed of Extra-Judicial Partition is nota voidable or an annullable contract under Article 1390 ofthe Civil Code, but rather, it is an unenforceable or, morespecifically, an unauthorized contract under Articles 1403(1) and 1317 of the Civil Code. As such, the Deed of Extra-Judicial Partition should not be annulled but only berendered unenforceable against the siblings of Conrado.

They further argued that under Article 1317 of the CivilCode, when the persons represented without authorityhave ratified the unauthorized acts, the contract becomesenforceable and binding. They contended that the Heirs ofPolicronio ratified the Deed of Extra-Judicial Partitionwhen Conrado took possession of one of the parcels of landadjudicated to him and his siblings, and when anotherparcel was used as collateral for a loan entered into bysome of the Heirs of Policronio. The Deed of Extra-JudicialPartition having been ratified and its benefits accepted, thesame thus became enforceable and binding upon them.

The Heirs of Alfonso averred that granting arguendo





that Conrado was not authorized to represent his co-heirsand there was no ratification, the CA should not haveremanded the case to the RTC for partition of AlfonsoÊsestate. They argued that the CA should not have appliedthe Civil Code general provision on contracts, but thespecial provisions dealing with succession and partition.They contended that contrary to the ruling of the CA, theextrajudicial partition was not an act of strict dominion, asit has been ruled that partition of inherited land is not aconveyance but a confirmation or ratification of title orright to the land.46 Therefore, the law requiring a specialpower of attorney should not be applied to partitions.

_______________

46 Barcelona v. Barcelona, 100 Phil 251, 255 (1956).

594



On the other hand, the Heirs of Policronio insisted thatthe CA pronouncement on the invalidity of the Deed ofExtra-Judicial Partition should not be disturbed becausethe subject properties should not have been included in theestate of Alfonso, and because Conrado lacked the writtenauthority to represent his siblings. They argued with theCA in ruling that a special power of attorney was requiredbefore Conrado could sign in behalf of his co-heirs.

The Heirs of Policronio denied that they ratified theDeed of Extra-Judicial Partition. They claimed that there isnothing on record that establishes that they ratified thepartition. Far from doing so, they precisely questioned itsexecution by filing a complaint. They further argued thatunder Article 1409 (3) of the Civil Code, ratification cannotbe invoked to validate the illegal act of including in thepartition those properties which do not belong to the estateas it provides another mode of acquiring ownership notsanctioned by law.

Furthermore, the Heirs of Policronio contended that the




defenses of unenforceability, ratification, and preteritionare being raised for the first time on appeal by the Heirs ofAlfonso. For having failed to raise them during the trial,the Heirs of Alfonso should be deemed to have waived theirright to do so.

The Court agrees in part with the Heirs of Alfonso.To begin, although the defenses of unenforceability,

ratification and preterition were raised by the Heirs ofAlfonso for the first time on appeal, they are concomitantmatters which may be taken up. As long as the questioneditems bear relevance and close relation to those specificallyraised, the interest of justice would dictate that they, too,must be considered and resolved. The rule that onlytheories raised in the initial proceedings may be taken upby a party thereto on appeal

595

VOL. 657, SEPTEMBER 14, 2011 595


should refer to independent, not concomitant matters, tosupport or oppose the cause of action.47

In the RTC, the Heirs of Policronio alleged thatConradoÊs consent was vitiated by mistake and undueinfluence, and that he signed the Deed of Extra-JudicialPartition without the authority or consent of his co-heirs.

The RTC found that ConradoÊs credibility had faltered,and his claims were rejected by the RTC as gratuitousassertions. On the basis of such, the RTC ruled thatConrado duly represented his siblings in the Deed of Extra-Judicial Partition.

On the other hand, the CA annulled the Deed of Extra-Judicial Partition under Article 1390 (1) of the Civil Code,holding that a special power of attorney was lacking asrequired under Article 1878 (5) and (15) of the Civil Code.These articles are as follows:

„Art. 1878. Special powers of attorney are necessary in the followingcases:

x x x



(5) To enter into any contract by which the ownership of animmovable is transmitted or acquired either gratuitously or for avaluable consideration;

x x x(15) Any other act of strict dominion.Art. 1390. The following contracts are voidable or annullable, eventhough there may have been no damage to the contracting parties:(1) Those where one of the parties is incapable of giving consent to acontract;(2) Those where the consent is vitiated by mistake, violence,intimidation, undue influence or fraud.These contracts are binding, unless they are annulled by a properaction in court. They are susceptible of ratification.‰

_______________

47 Borbon II v. Servicewide Specialists, Inc., 328 Phil. 150, 160; 258

SCRA 634, 642 (1996).

596



This Court finds that Article 1878 (5) and (15) isinapplicable to the case at bench. It has been held inseveral cases48 that partition among heirs is not legallydeemed a conveyance of real property resulting in changeof ownership. It is not a transfer of property from one to theother, but rather, it is a confirmation or ratification of titleor right of property that an heir is renouncing in favor ofanother heir who accepts and receives the inheritance. It ismerely a designation and segregation of that part whichbelongs to each heir. The Deed of Extra-Judicial Partitioncannot, therefore, be considered as an act of strictdominion. Hence, a special power of attorney is notnecessary.

In fact, as between the parties, even an oral partition bythe heirs is valid if no creditors are affected. Therequirement of a written memorandum under the statuteof frauds does not apply to partitions effected by the heirs




where no creditors are involved considering that suchtransaction is not a conveyance of property resulting inchange of ownership but merely a designation andsegregation of that part which belongs to each heir.49

Neither is Article 1390 (1) applicable. Article 1390 (1)contemplates the incapacity of a party to give consent to acontract. What is involved in the case at bench though isnot ConradoÊs incapacity to give consent to the contract, butrather his lack of authority to do so. Instead, Articles 1403(1), 1404, and 1317 of the Civil Code find application to thecircumstances prevailing in this case. They are as follows:

_______________

48 Barcelona v. Barcelona, 100 Phil. 251, 255 (1956); Maestrado v.

Court of Appeals, 384 Phil. 418, 432; 327 SCRA 678, 691 (2000); Castro v.

Miat, 445 Phil. 282 297-298; 397 SCRA 271, 284 (2003), citing Pada-

Kilario v. Court of Appeals, 379 Phil. 515; 322 SCRA 481 (2000).

49 Maestrado v. Court of Appeals, 384 Phil. 418, 432; 327 SCRA 678,

691 (2000).

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VOL. 657, SEPTEMBER 14, 2011 597


„Art. 1403. The following contracts are unenforceable, unless theyare ratified:(1) Those entered into in the name of another person by one whohas been given no authority or legal representation, or who hasacted beyond his powers;Art. 1404. Unauthorized contracts are governed by Article 1317 andthe principles of agency in Title X of this Book.Art. 1317. No one may contract in the name of another withoutbeing authorized by the latter, or unless he has by law a right torepresent him.‰

A contract entered into in the name of another by one who has noauthority or legal representation, or who has acted beyond hispowers, shall be unenforceable, unless it is ratified, expressly orimpliedly, by the person on whose behalf it has been executed,before it is revoked by the other contracting party.





Such was similarly held in the case of Badillo v. Ferrer:

„The Deed of Extrajudicial Partition and Sale is not a voidable oran annullable contract under Article 1390 of the New Civil Code.Article 1390 renders a contract voidable if one of the parties isincapable of giving consent to the contract or if the contractingpartyÊs consent is vitiated by mistake, violence, intimidation, undueinfluence or fraud. x x x

The deed of extrajudicial partition and sale is an unenforceableor, more specifically, an unauthorized contract under Articles1403(1) and 1317 of the New Civil Code.‰50

Therefore, ConradoÊs failure to obtain authority from hisco-heirs to sign the Deed of Extra-Judicial Partition intheir behalf did not result in his incapacity to give consentso as to render the contract voidable, but rather, itrendered the contract valid but unenforceable againstConradoÊs co-heirs for having been entered into withouttheir authority.

_______________

50 236 Phil. 438, 447-448; 152 SCRA 407, 417 (1987).

598



A closer review of the evidence on record, however, willshow that the Deed of Extra-Judicial Partition is notunenforceable but, in fact, valid, binding and enforceableagainst all the Heirs of Policronio for having given theirconsent to the contract. Their consent to the Deed of Extra-Judicial Partition has been proven by a preponderance ofevidence.

Regarding his alleged vitiated consent due to mistakeand undue influence to the Deed of Extra-JudicialPartition, Conrado testified, to wit:

Q: Mr. Ureta you remember having signed a document entitled deed of




extra judicial partition consisting of 11 pages and which have

previously [been] marked as Exhibit I for the plaintiffs?

A: Yes sir.

Q: Can you recall where did you sign this document?

A: The way I remember I signed that in our house.

Q: And who requested or required you to sign this document?

A: My aunties.

Q: Who in particular if you can recall?

A: Nay Pruding Panadero.

Q: You mean that this document that you signed was brought to your

house by your Auntie Pruding Pa[r]adero [who] requested you to

sign that document?

A: When she first brought that document I did not sign that said

document because I [did] no[t] know the contents of that document.

Q: How many times did she bring this document to you [until] you

finally signed the document?

A: Perhaps 3 times.

Q: Can you tell the court why you finally signed it?

A: Because the way she explained it to me that the land of my

grandfather will be partitioned.

Q: When you signed this document were your brothers and sisters who

are your co-plaintiffs in this case aware of your act to sign this

document?

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VOL. 657, SEPTEMBER 14, 2011 599


A: They do not know.

x x x

Q: After you have signed this document did you inform your brothers

and sisters that you have signed this document?

A: No I did not. 51

x x x

Q: Now you read the document when it was allegedly brought to your

house by your aunt Pruding Pa[r]adero?

A: I did not read it because as I told her I still want to ask the advise of

my brothers and sisters.

Q: So do I get from you that you have never read the document itself or

any part thereof?

A: I have read the heading.

x x x



Q: And why is it that you did not read all the pages of this document

because I understand that you know also how to read in English?

A: Because the way Nay Pruding explained to me is that the property of

my grandfather will be partitioned that is why I am so happy.

x x x

Q: You mean to say that after you signed this deed of extra judicial

partition up to the present you never informed them?

A: Perhaps they know already that I have signed and they read already

the document and they have read the document.

Q: My question is different, did you inform them?

A: The document sir? I did not tell them.

Q: Even until now?

A: Until now I did not inform them.52

_______________

51 TSN, October 1, 1997, pp. 4-6.

52 Id., at pp. 8-11.

600



This Court finds no cogent reason to reverse the findingof the RTC that ConradoÊs explanations were meregratuitous assertions not entitled to any probative weight.The RTC found ConradoÊs credibility to have faltered whenhe testified that perhaps his siblings were already aware ofthe Deed of Extra-Judicial Partition. The RTC was in thebest position to judge the credibility of the witnessÊtestimony. The CA also recognized that ConradoÊs consentwas not vitiated by mistake and undue influence as itrequired a special power of attorney in order to bind his co-heirs and, as such, the CA thereby recognized that hissignature was binding to him but not with respect to his co-heirs. Findings of fact of the trial court, particularly whenaffirmed by the CA, are binding to this Court.53

Furthermore, this Court notes other peculiarities inConradoÊs testimony. Despite claims of undue influence,there is no indication that Conrado was forced to sign by





his aunt, Prudencia Paradero. In fact, he testified that hewas happy to sign because his grandfatherÊs estate wouldbe partitioned. Conrado, thus, clearly understood thedocument he signed. It is also worth noting that despite thedocument being brought to him on three separate occasionsand indicating his intention to inform his siblings about it,Conrado failed to do so, and still neglected to inform themeven after he had signed the partition. All thesecircumstances negate his claim of vitiated consent. Havingduly signed the Deed of Extra-Judicial Partition, Conradois bound to it. Thus, it is enforceable against him.

Although ConradoÊs co-heirs claimed that they did notauthorize Conrado to sign the Deed of Extra-JudicialPartition in their behalf, several circumstances militateagainst their contention.

_______________

53 Philippine Rabbit Bus Lines Inc. v. Macalinao, 491 Phil. 249, 255;

451 SCRA 63, 68 (2005).

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First, the Deed of Extra-Judicial Partition was executedon April 19, 1989, and the Heirs of Policronio claim thatthey only came to know of its existence on July 30, 1995through an issue of the Aklan Reporter. It is difficult tobelieve that Conrado did not inform his siblings about theDeed of Extra-Judicial Partition or at least broach itssubject with them for more than five years from the timehe signed it, especially after indicating in his testimonythat he had intended to do so.

Second, Conrado retained possession of one of theparcels of land adjudicated to him and his co-heirs in theDeed of Extra-Judicial Partition.

Third, after the execution of the partition on April 19,1989 and more than a year before they claimed to havediscovered the existence of the Deed of Extra-Judicial




Partition on July 30, 1995, some of the Heirs of Policronio,namely, Rita Solano, Macario Ureta, Lilia Tayco, andVenancio Ureta executed on June 1, 1994, a Special Powerof Attorney54 in favor of their sister Gloria Gonzales,authorizing her to obtain a loan from a bank and tomortgage one of the parcels of land adjudicated to them inthe Deed of Extra-Judicial Partition to secure payment ofthe loan. They were able to obtain the loan using the landas collateral, over which a Real Estate Mortgage55 wasconstituted. Both the Special Power of Attorney and theReal Estate Mortgage were presented in evidence in theRTC, and were not controverted or denied by the Heirs ofPolicronio.

Fourth, in the letter dated August 15, 1995, sent by thecounsel of the Heirs of Policronio to the Heirs of Alfonsorequesting for amicable settlement, there was no mentionthat ConradoÊs consent to the Deed of Extra-JudicialPartition was vitiated by mistake and undue influence orthat they had never authorized Conrado to represent themor sign the document on their behalf. It is questionable forsuch a perti-

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54 Exhibit „2,‰ records, p. 524.

55 Exhibit „3,‰ id., at p. 525.

602



nent detail to have been omitted. The body of said letter isreproduced hereunder as follows:

Greetings:

Your nephews and nieces, children of your deceased brotherPolicronio Ureta, has referred to me for appropriate legal action theproperty they inherited from their father consisting of six (6)parcels of land which is covered by a Deed of Absolute Sale dated





October 25, 1969. These properties ha[ve] already been transferredto the name of their deceased father immediately after the sale,machine copy of the said Deed of Sale is hereto attached for yourready reference.

Lately, however, there was published an Extra-judicial Partitionof the estate of Alfonso Ureta, which to the surprise of my clientsincluded the properties already sold to their father before the deathof said Alfonso Ureta. This inclusion of their property is erroneousand illegal because these properties were covered by the Deed ofAbsolute Sale in favor of their father Policronio Ureta no longerform part of the estate of Alfonso Ureta. Since Policronio Ureta has[sic] died in 1974 yet, these properties have passed by hereditarysuccession to his children who are now the true and lawful ownersof the said properties.

My clients are still entitled to a share in the estate of AlfonsoUreta who is also their grandfather as they have stepped into theshoes of their deceased father Policronio Ureta. But this estate ofAlfonso Ureta should already exclude the six (6) parcels of landcovered by the Deed of Absolute Sale in favor of Policronio Ureta.

My clients cannot understand why the properties of their latefather [should] be included in the estate of their grandfather and bedivided among his brothers and sisters when said properties shouldonly be divided among themselves as children of Policronio Ureta.

Since this matter involves very close members of the samefamily, I have counseled my clients that an earnest effort towards acompromise or amicable settlement be first explored before resort tojudicial remedy is pursued. And a compromise or amicablesettlement can only be reached if all the parties meet and discussthe problem with an open mind. To this end, I am suggesting ameeting of the parties on September 16, 1995 at 2:00 P.M. at BPlace Restaurant at C. Laserna St., Kalibo, Aklan. It would be bestif the parties

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VOL. 657, SEPTEMBER 14, 2011 603


can come or be represented by their duly designated attorney-in-fact together with their lawyers if they so desire so that the problemcan be discussed unemotionally and intelligently.

I would, however, interpret the failure to come to the said



meeting as an indication that the parties are not willing to orinterested in amicable settlement of this matter and as a go signalfor me to resort to legal and/or judicial remedies to protest therights of my clients.

Thank you very much.56

Based on the foregoing, this Court concludes that theallegation of ConradoÊs vitiated consent and lack ofauthority to sign in behalf of his co-heirs was a mereafterthought on the part of the Heirs of Policronio. Itappears that the Heirs of Policronio were not only aware ofthe existence of the Deed of Extra-Judicial Partition priorto June 30, 1995 but had, in fact, given Conrado authorityto sign in their behalf. They are now estopped fromquestioning its legality, and the Deed of Extra-JudicialPartition is valid, binding, and enforceable against them.

In view of the foregoing, there is no longer a need todiscuss the issue of ratification.Preterition

The Heirs of Alfonso were of the position that theabsence of the Heirs of Policronio in the partition or thelack of authority of their representative results, at the veryleast, in their preterition and not in the invalidity of theentire deed of partition. Assuming there was actualpreterition, it did not render the Deed of ExtrajudicialPartition voidable. Citing Article 1104 of the Civil Code,they aver that a partition made with preterition of any ofthe compulsory heirs shall not be rescinded, but the heirsshall be proportionately obliged to pay the share of theperson omitted. Thus, the Deed of Extra-

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56 Exhibit „A,‰ id., at pp. 335-336.

604



Judicial Partition should not have been annulled by theCA. Instead, it should have ordered the share of the heirs




omitted to be given to them.The Heirs of Alfonso also argued that all that remains to

be adjudged is the right of the preterited heirs to representtheir father, Policronio, and be declared entitled to hisshare. They contend that remand to the RTC is no longernecessary as the issue is purely legal and can be resolvedby the provisions of the Civil Code for there is no disputethat each of AlfonsoÊs heirs received their rightful share.Conrado, who received PolicronioÊs share, should then fullyaccount for what he had received to his other co-heirs andbe directed to deliver their share in the inheritance.

These arguments cannot be given credence.Their posited theory on preterition is no longer viable. It

has already been determined that the Heirs of Policroniogave their consent to the Deed of Extra-Judicial Partitionand they have not been excluded from it. Nonetheless, evengranting that the Heirs of Policronio were denied theirlawful participation in the partition, the argument of theHeirs of Alfonso would still fail.

Preterition under Article 854 of the Civil Code is asfollows:

„Art. 854. The preterition or omission of one, some, or all of thecompulsory heirs in the direct line, whether living at the time of theexecution of the will or born after the death of the testator, shallannul the institution of heir; but the devises and legacies shall bevalid insofar as they are not inofficious.If the omitted compulsory heirs should die before the testator, theinstitution shall be effectual, without prejudice to the right ofrepresentation.‰

Preterition has been defined as the total omission of acompulsory heir from the inheritance. It consists in thesilence of the testator with regard to a compulsory heir,omitting him in the testament, either by not mentioninghim at all, or by not

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VOL. 657, SEPTEMBER 14, 2011 605




giving him anything in the hereditary property but withoutexpressly disinheriting him, even if he is mentioned in thewill in the latter case.57 Preterition is thus a concept oftestamentary succession and requires a will. In the case atbench, there is no will involved. Therefore, preteritioncannot apply.Remand Unnecessary

The Deed of Extra-Judicial Partition is in itself valid forcomplying with all the legal requisites, as found by theRTC, to wit:

„A persual of the Deed of Extra-judicial Partition would revealthat all the heirs and children of Alfonso Ureta were representedtherein; that nobody was left out; that all of them received as muchas the others as their shares; that it distributed all the properties ofAlfonso Ureta except a portion of parcel 29 containing an area of14,000 square meters, more or less, which was expressly reserved;that Alfonso Ureta, at the time of his death, left no debts; that theheirs of Policronio Ureta, Sr. were represented by Conrado B. Ureta;all the parties signed the document, was witnessed and dulyacknowledged before Notary Public Adolfo M. Iligan of Kalibo,Aklan; that the document expressly stipulated that the heirs towhom some of the properties were transferred before for taxationpurposes or their children, expressly recognize and acknowledge asa fact that the properties were transferred only for the purpose ofeffective administration and development convenience in thepayment of taxes and, therefore, all instruments conveying oreffecting the transfer of said properties are null and void from thebeginning (Exhs. 1-4, 7-d).‰58

Considering that the Deed of Sale has been found voidand the Deed of Extra-Judicial Partition valid, with theconsent of all the Heirs of Policronio duly given, there is noneed to remand the case to the court of origin for partition.

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57 Neri v. Akutin, 72 Phil. 322, 325 (1914); Maninang v. Court of

Appeals, 199 Phil. 640, 647; 114 SCRA 478, 484 (1982).

58 Rollo (G.R. No. 165748), p. 80.

606







WHEREFORE, the petition in G.R. No. 165748 isDENIED. The petition in G.R. No. 165930 is GRANTED.The assailed April 20, 2004 Decision and October 14, 2004Resolution of the Court of Appeals in CA-G.R. CV No.71399, are hereby MODIFIED in this wise:

(1) The Deed of Extra-Judicial Partition, dated April 19,1989, is VALID, and

(2) The order to remand the case to the court of origin ishereby DELETED.

SO ORDERED.

Velasco, Jr. (Chairperson), Peralta, Abad and Sereno,**

JJ., concur.

Petition in G.R. No. 165748 denied, while petition inG.R. No. 165930 granted. Judgment and resolutionmodified.

Notes.·Gross inadequacy of price by itself will notresult in a void contract. (Bacungan vs. Court of Appeals,574 SCRA 642 [2008])

A void contract cannot give rise to a valid one. (Nool vs.Court of Appeals, 276 SCRA 149 [1997])

··o0o··

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** Designated as additional member of the Third Division per Special

Order No. 1028 dated June 21, 2011.


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Page 1 of 7http://www.central.com.ph/sfsreader/session/0000014f5475fb1aa4ada12b000a0094004f00ee/p/AME126/?username=Guest

G.R. No. 169144. January 26, 2011.*

IN RE: IN THE MATTER OF THE PETITION TOAPPROVE THE WILL OF RUPERTA PALAGANAS WITHPRAYER FOR THE APPOINTMENT OF SPECIALADMINISTRATOR, MANUEL MIGUEL PALAGANAS andBENJAMIN GREGORIO PALAGANAS, petitioners, vs.

ERNESTO PALAGANAS, respondent.

Civil Law; Probate Proceedings; Wills and Succession; Our laws

do not prohibit the probate of wills executed by foreigners abroad

although the same have not as yet been probated and allowed in the

countries of their execution.·But our laws do not prohibit theprobate of wills executed by foreigners abroad although the samehave not as yet been probated and allowed in the countries of theirexecution. A foreign will can be given legal effects in ourjurisdiction. Article 816 of the Civil Code states that the will of analien who is abroad produces effect in the Philippines if made inaccordance with the formalities prescribed by the law of the placewhere he resides, or according to the formalities observed in hiscountry.

Same; Same; Same; The rules do not require proof that the

foreign will has already been allowed and probated in the country of

its execution.·Our rules require merely that the petition for theallowance of a will must show, so far as known to the petitioner: (a)the jurisdictional facts; (b) the names, ages, and residences of theheirs, legatees, and devisees of the testator or decedent; (c) theprobable value and character of the property of the estate; (d) thename of the person for whom letters are prayed; and (e) if the willhas not been delivered to the court, the name of the person havingcustody of it. Jurisdictional facts refer to the fact of death of thedecedent, his residence at the time of his death in the provincewhere the probate court is sitting, or if he is an inhabitant of aforeign country, the estate he left in such province. The rules do not

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require proof that the foreign will has already been allowed andprobated in the country of its execution.

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* SECOND DIVISION.

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VOL. 640, JANUARY 26, 2011 539

Palaganas vs. Palaganas

PETITION for review on certiorari of a decision of theCourt of Appeals.

The facts are stated in the opinion of the Court. Alan Ramiro L. Guevara for petitioners. Fernandez, Fernandez and Associates Law Offices for

respondent.

ABAD, J.:This case is about the probate before Philippine court of

a will executed abroad by a foreigner although it has notbeen probated in its place of execution.

The Facts and the Case

On November 8, 2001 Ruperta C. Palaganas (Ruperta), aFilipino who became a naturalized United States (U.S.)citizen, died single and childless. In the last will andtestament she executed in California, she designated herbrother, Sergio C. Palaganas (Sergio), as the executor of herwill for she had left properties in the Philippines and in theU.S.

On May 19, 2003 respondent Ernesto C. Palaganas(Ernesto), another brother of Ruperta, filed with theRegional Trial Court (RTC) of Malolos, Bulacan, a petitionfor the probate of RupertaÊs will and for his appointment asspecial administrator of her estate.1 On October 15, 2003,however, petitioners Manuel Miguel Palaganas (Manuel)and Benjamin Gregorio Palaganas (Benjamin), nephews ofRuperta, opposed the petition on the ground that RupertaÊswill should not be probated in the Philippines but in the

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U.S. where she executed it. Manuel and Benjamin addedthat, assuming RupertaÊs will could be probated in thePhilippines, it is invalid nonetheless for having beenexecuted under duress and

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1 Docketed as Special Proceedings 112-M-2003, Branch 10, RTC of

Malolos, Bulacan.

540



without the testatorÊs full understanding of theconsequences of such act. Ernesto, they claimed, is also notqualified to act as administrator of the estate.

Meantime, since RupertaÊs foreign-based siblings, GloriaVillaluz and Sergio, were on separate occasions in thePhilippines for a short visit, respondent Ernesto filed amotion with the RTC for leave to take their deposition,which it granted. On April, 13, 2004 the RTC directed theparties to submit their memorandum on the issue ofwhether or not RupertaÊs U.S. will may be probated in andallowed by a court in the Philippines.

On June 17, 2004 the RTC issued an order:2 (a)admitting to probate RupertaÊs last will; (b) appointingrespondent Ernesto as special administrator at the requestof Sergio, the U.S.-based executor designated in the will;and (c) issuing the Letters of Special Administration toErnesto.

Aggrieved by the RTCÊs order, petitioner nephewsManuel and Benjamin appealed to the Court of Appeals(CA),3 arguing that an unprobated will executed by anAmerican citizen in the U.S. cannot be probated for thefirst time in the Philippines.

On July 29, 2005 the CA rendered a decision,4 affirmingthe assailed order of the RTC,5 holding that the RTCproperly allowed the probate of the will, subject torespondent ErnestoÊs submission of the authenticatedcopies of the documents specified in the order and his




posting of required bond. The CA pointed out that Section2, Rule 76 of the Rules of Court does not require priorprobate and allowance of the will in the country of itsexecution, before it can be probated in the

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2 Rollo, pp. 73-77.

3 CA-G.R. CV 83564.

4 Penned by Associate Justice Ruben T. Reyes and concurred in by

Associate Justices Rebecca De Guia Salvador and Fernanda Lampas

Peralta.

5 Rollo, pp. 26-39.

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VOL. 640, JANUARY 26, 2011 541


Philippines. The present case, said the CA, is different fromreprobate, which refers to a will already probated andallowed abroad. Reprobate is governed by different rules orprocedures. Unsatisfied with the decision, Manuel andBenjamin came to this Court.

The Issue Presented

The key issue presented in this case is whether or not awill executed by a foreigner abroad may be probated in thePhilippines although it has not been previously probatedand allowed in the country where it was executed.

The CourtÊs Ruling

Petitioners Manuel and Benjamin maintain that willsexecuted by foreigners abroad must first be probated andallowed in the country of its execution before it can beprobated here. This, they claim, ensures prior compliancewith the legal formalities of the country of its execution.They insist that local courts can only allow probate of suchwills if the proponent proves that: (a) the testator has beenadmitted for probate in such foreign country, (b) the willhas been admitted to probate there under its laws, (c) the







probate court has jurisdiction over the proceedings, (d) thelaw on probate procedure in that foreign country and proofof compliance with the same, and (e) the legal requirementsfor the valid execution of a will.

But our laws do not prohibit the probate of willsexecuted by foreigners abroad although the same have notas yet been probated and allowed in the countries of theirexecution. A foreign will can be given legal effects in ourjurisdiction. Article 816 of the Civil Code states that thewill of an alien who is abroad produces effect in thePhilippines if made in accordance with the formalitiesprescribed by the law of the place

542



where he resides, or according to the formalities observedin his country.6

In this connection, Section 1, Rule 73 of the 1997 Rulesof Civil Procedure provides that if the decedent is aninhabitant of a foreign country, the RTC of the provincewhere he has an estate may take cognizance of thesettlement of such estate. Sections 1 and 2 of Rule 76further state that the executor, devisee, or legatee namedin the will, or any other person interested in the estate,may, at any time after the death of the testator, petition thecourt having jurisdiction to have the will allowed, whetherthe same be in his possession or not, or is lost or destroyed.

Our rules require merely that the petition for theallowance of a will must show, so far as known to thepetitioner: (a) the jurisdictional facts; (b) the names, ages,and residences of the heirs, legatees, and devisees of thetestator or decedent; (c) the probable value and character ofthe property of the estate; (d) the name of the person forwhom letters are prayed; and (e) if the will has not beendelivered to the court, the name of the person havingcustody of it. Jurisdictional facts refer to the fact of deathof the decedent, his residence at the time of his death in theprovince where the probate court is sitting, or if he is aninhabitant of a foreign country, the estate he left in such



province.7 The rules do not require proof that the foreignwill has already been allowed and probated in the countryof its execution.

In insisting that RupertaÊs will should have been firstprobated and allowed by the court of California, petitionersManuel and Benjamin obviously have in mind theprocedure for the reprobate of will before admitting ithere. But, reprobate or re-authentication of a will alreadyprobated and al-

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6 Civil Code of the Philippines, Art. 816.

7 Cuenco v. Court of Appeals, 153 Phil. 115, 133; 53 SCRA 360, 377

(1973); Herrera, Remedial Law, Vol. III-A, Rex Bookstore, 1996 ed., p. 46.

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VOL. 640, JANUARY 26, 2011 543


lowed in a foreign country is different from that probatewhere the will is presented for the first time before acompetent court. Reprobate is specifically governed by Rule77 of the Rules of Court. Contrary to petitionersÊ stance,since this latter rule applies only to reprobate of a will, itcannot be made to apply to the present case. In reprobate,the local court acknowledges as binding the findings of theforeign probate court provided its jurisdiction over thematter can be established.

Besides, petitionersÊ stand is fraught with impractically.If the instituted heirs do not have the means to go abroadfor the probate of the will, it is as good as depriving themoutright of their inheritance, since our law requires that nowill shall pass either real or personal property unless thewill has been proved and allowed by the proper court.8

Notably, the assailed RTC order of June 17, 2004 isnothing more than an initial ruling that the court can takecognizance of the petition for probate of RupertaÊs will andthat, in the meantime, it was designating Ernesto asspecial administrator of the estate. The parties have yet topresent evidence of the due execution of the will, i.e. the





testatorÊs state of mind at the time of the execution andcompliance with the formalities required of wills by thelaws of California. This explains the trial courtÊs directivefor Ernesto to submit the duly authenticated copy ofRupertaÊs will and the certified copies of the Laws ofSuccession and Probate of Will of California.

WHEREFORE, the Court DENIES the petition andAFFIRMS the Court of Appeals decision in CA-G.R. CV83564 dated July 29, 2005.

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8 Civil Code of the Philippines, Art. 838; Rules of Court, Rule 75, Sec.

1.


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