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G.R. No. L-33172 October 18, 1979

ERNESTO CEASE, CECILIA CEASE, MARION CEASE, TERESA CEASE-LACEBAL and the F.L.CEASE PLANTATION CO., INC. as Trustee of properties of the defunct TIAONG MILLING &PLANTATION CO.,petitioners,vs.

HONORABLE COURT OF APPEALS, (Special Seventh Division), HON. MANOLO L. MADDELA,Presiding Judge, Court of First Instance of Quezon, BENJAMIN CEASE and FLORENCECEASE, respondents.

Appeal by certiorari from the decision of the Court of Appeals in CA-G.R. No. 45474, entitled "ErnestoCease, et al. vs. Hon. Manolo L. Maddela, Judge of the Court of First Instance of Quezon, et al."

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dismissed the petition for certiorari, mandamus, and prohibition instituted by the petitioners against therespondent judge and the private respondents.

The antecedents of the case, as found by the appellate court, are as follows:

IT RESULTING: That the antecedents are not difficult to understand; sometime in June1908, one Forrest L. Cease common predecessor in interest of the parties together with

five (5) other American citizens organized the Tiaong Milling and Plantation Companyand in the course of its corporate existence the company acquired various properties butat the same time all the other original incorporators were bought out by Forrest L. Ceasetogether with his children namely Ernest, Cecilia, Teresita, Benjamin, Florence and oneBonifacia Tirante also considered a member of the family; the charter of the companylapsed in June 1958; but whether there were steps to liquidate it, the record is silent; on13 August 1959, Forrest L. Cease died and by extrajudicial partition of his shares, amongthe children, this was disposed of on 19 October 1959; it was here where the troubleamong them came to arise because it would appear that Benjamin and Florence wantedan actual division while the other children wanted reincorporation; and proceeding onthat, these other children Ernesto, Teresita and Cecilia and aforementioned otherstockholder Bonifacia Tirante proceeded to incorporate themselves into the F.L. CeasePlantation Company and registered it with the Securities and Exchange Commission on 9

December, 1959; apparently in view of that, Benjamin and Florence for their part initiateda Special Proceeding No. 3893 of the Court of First Instance of Tayabas for thesettlement of the estate of Forest L. Cease on 21 April, 1960 and one month afterwardson 19 May 1960 they filed Civil Case No. 6326 against Ernesto, Teresita and CeciliaCease together with Bonifacia Tirante asking that the Tiaong Milling and PlantationCorporation be declared Identical to F.L. Cease and that its properties be divided amonghis children as his intestate heirs; this Civil Case was resisted by aforestated defendantsand notwithstanding efforts of the plaintiffs to have the properties placed underreceivership, they were not able to succeed because defendants filed a bond to remainas they have remained in possession; after that and already, during the pendency of CivilCase No. 6326 specifically on 21 May, 1961 apparently on the eve of the expiry of thethree (3) year period provided by the law for the liquidation of corporations, the board ofliquidators of Tiaong Milling executed an assignment and conveyance of properties andtrust agreement in favor of F.L. Cease Plantation Co. Inc. as trustee of the Tiaong Millingand Plantation Co. so Chat upon motion of the plaintiffs trial Judge ordered that thisalleged trustee be also included as party defendant; now this being the situation, it will beremembered that there were thus two (2) proceedings pending in the Court of FirstInstance of Quezon namely Civil Case No. 6326 and Special Proceeding No. 3893 butboth of these were assigned to the Honorable Respondent Judge Manolo L. Maddela p.43 and the case was finally heard and submitted upon stipulation of facts pp, 34-110,rollo; and trial Judge by decision dated 27 December 1969 held for the plaintiffs Benjaminand Florence, the decision containing the following dispositive part:


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VIEWED IN THE LIGHT OF ALL THE FOREGOING, judgment is herebyrendered in favor of plaintiffs and against the defendants declaring that:

1) The assets or properties of the defunct Tiaong Milling and PlantationCompany now appearing under the name of F.L. Cease PlantationCompany as Trustee, is the estate also of the deceased Forrest L.

Cease and ordered divided, share and share alike, among his sixchildren the plaintiffs and the defendants in accordance with Rule 69,Rules of Court;

2) The Resolution to Sell dated October 12, 1959 and the Transfer andConveyance with Trust Agreement is hereby set aside as improper andillegal for the purposes and effect that it was intended and, therefore, nulland void;

3) That F.L. Cease Plantation Company is removed as 'Trustee forinterest against the estate and essential to the protection of plaintiffs'rights and is hereby ordered to deliver and convey all the properties andassets of the defunct Tiaong Milling now under its name, custody and

control to whomsoever be appointed as Receiver - disqualifying and ofthe parties herein - the latter to act accordingly upon proper assumptionof office; and

4) Special Proceedings No. 3893 for administration is terminated anddismissed; the instant case to proceed but on issues of damages onlyand for such action inherently essential for partition.

SO ORDERED.

Lucena City, December 27, 1969., pp. 122-a-123, rollo.

upon receipt of that, defendants there filled a notice of appeal p. 129, rollo together withan appeal bond and a record on appeal but the plaintiffs moved to dismiss the appeal onthe ground that the judgment was in fact interlocutory and not appealable p. 168 rollo andthis position of defendants was sustained by trial Judge, His Honor ruling that

IN VIEW OF THE FOREGOING, the appeal interposed by plaintiffs ishereby dismissed as premature and the Record on Appeal is necessarilydisapproved as improper at this stage of the proceedings.

SO ORDERED.

Lucena City, April 27, 1970.

and so it was said defendants brought the matter first to the Supreme Court, onmandamus on 20 May, 1970 to compel the appeal and certiorari and prohibition to annulthe order of 27 April, 1970 on the ground that the decision was "patently erroneous" p.16, rollo; but the Supreme Court remanded the case to this Court of Appeals byresolution of 27 May 1970, p. 173, and this Court of Appeals on 1 July 1970 p. 175dismissed the petition so far as the mandamus was concerned taking the view that thedecision sought to be appealed dated 27 December, 1969 was interlocutory and notappealable but on motion for reconsideration of petitioners and since there was possiblemerit so far as its prayer for certiorari and prohibition was concerned, by resolution of the


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Court on 19 August, 1970, p. 232, the petition was permitted to go ahead in that capacity;and it is the position of petitioners that the decision of 27 December, 1969 as well as theorder of 27 April, 1970 suffered of certain fatal defects, which respondents deny and ontheir part raise the preliminary point that this Court of Appeals has no authority to giverelief to petitioners because not

in aid of its appellate jurisdiction,

and that the questions presented cannot be raised for the first time before this Court ofAppeals;

Respondent Court of Appeals in its decision promulgated December 9, 1970 dismissed the petition withcosts against petitioners, hence the present petition to this Court on the following assignment of errors:

THE COURT OF APPEALS ERRED -

I. IN SANCTIONING THE WRONGFUL EXERCISE OF JURISDICTION BEYOND THE LIMITS OFAUTHORITY CONFERRED BY LAW UPON THE LOWER COURT, WHEN IT PROCEEDED TO HEAR,ADJUDGE AND ADJUDICATE -

(a) Special Proceedings No. 3893 for the settlement of the Estate of Forrest L. Cease,simultaneously and concurrently with -

(b) Civil Case No. 6326, wherein the lower Court ordered Partition under Rule 69, Rulesof Court -

THE ISSUE OF LEGAL OWNERSHIP OF THE PROPERTIES COMMONLY INVOLVED IN BOTHACTIONS HAVING BEEN RAISED AT THE OUTSET BY THE TIAONG MILLING AND PLANTATIONCOMPANY, AS THE REGISTERED OWNER OF SUCH PROPERTIES UNDER ACT 496.

II. IN AFFIRMING - UNSUPPORTED BY ANY EVIDENCE WHATSOEVER NOR CITATION OF ANY

LAW TO JUSTIFY - THE UNWARRANTED CONCLUSION THAT SUBJECT PROPERTIES, FOUND BYTHE LOWER COURT AND THE COURT OF APPEALS AS ACTUALLY REGISTERED IN THE NAMEOF PETITIONER CORPORATION AND/OR ITS PREDECESSOR IN INTEREST, THE TIAONG MILLINGAND PLANTATION COMPANY, DURING ALL THE 50 YEARS OF ITS CORPORATE EXISTENCE "AREALSO PROPERTIES OF THE ESTATE OF FOREST L. CEASE."

III. IN AFFIRMING THE ARBITRARY CONCLUSION OF THE LOWER COURT THAT ITS DECISION OFDECEMBER 27,1969 IS AN "INTERLUCUTORY DECISION." IN DISMISSED NG THE PETITION FORWRIT OF MANDAMUS, AND IN AFFIRMING THE MANIFESTLY UNJUST JUDGMENT RENDEREDWHICH CONTRADICTS THE FINDINGS OF ULTIMATE FACTS THEREIN CONTAINED.

During the period that ensued after the filing in this Court of the respective briefs and the subsequentsubmission of the case for decision, some incidents had transpired, the summary of which may be stated

as follows:

1. Separate from this present appeal, petitioners filed a petition for certiorari and prohibition in this Court,docketed as G.R. No. L-35629 (Ernesto Cease, et al. vs. Hon. Manolo L. Maddela, et al.) whichchallenged the order of respondent judge dated September 27, 1972 appointing his Branch Clerk ofCourt, Mr. Eleno M. Joyas, as receiver of the properties subject of the appealed civil case, which order,petitioners saw as a virtual execution of the lower court's judgment (p. 92, rollo). In Our resolution ofNovember 13, 1972, issued in G.R. No. L-35629, the petition was denied since respondent judge merelyappointed an auxilliary receiver for the preservation of the properties as well as for the protection of the


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interests of all parties in Civil Case No. 6326; but at the same time, We expressed Our displeasure in theappointment of the branch clerk of court or any other court personnel for that matter as receiver. (p. 102,rollo).

2. Meanwhile, sensing that the appointed receiver was making some attempts to take possession of theproperties, petitioners filed in this present appeal an urgent petition to restrain proceedings in the lower

court. We resolved the petition on January 29, 1975 by issuing a corresponding temporary restrainingorder enjoining the court a quo from implementing its decision of December 27, 1969, more particularly,the taking over by a receiver of the properties subject of the litigation, and private respondents Benjaminand Florence Cease from proceeding or taking any action on the matter until further orders from thisCourt (pp. 99-100, rollo). Private respondents filed a motion for reconsideration of Our resolution ofJanuary 29, 1975. After weighing the arguments of the parties and taking note of Our resolution in G.R.No. L-35629 which upheld the appointment of a receiver, We issued another resolution dated April 11,1975 lifting effective immediately Our previous temporary restraining order which enforced the earlierresolution of January 29, 1975 (pp. 140-141, rollo).

3. On February 6, 1976, private respondents filed an urgent petition to restrain proceedings below in viewof the precipitate replacement of the court appointed receiver Mayor Francisco Escueta (vice Mr. ElenoM. Joyas) and the appointment of Mr. Guillermo Lagrosa on the eve of respondent Judge Maddela's

retirement (p. 166, rollo). The urgent petition was denied in Our resolution of February 18, 1976 (p. 176,rollo).

4. Several attempts at a compromise agreement failed to materialize. A Tentative CompromiseAgreement dated July 30, 1975 was presented to the Court on August 6, 1976 for the signature of theparties, but respondents "unceremoniously" repudiated the same by leaving the courtroom without thepermission of the court (Court of First Instance of Quezon, Branch 11) as a result of which respondentsand their counsel were cited for contempt (p. 195, 197, rollo) that respondents' reason for the repudiationappears to be petitioners' failure to render an audited account of their administration covering the periodfrom May 31, 1961 up to January 29, 1974, plus the inclusion of a provision on waiver and relinquishmentby respondents of whatever rights that may have accrued to their favor by virtue of the lower court'sdecision and the affirmative decision of the appellate court.

We go now to the alleged errors committed by the respondent Court of Appeals.

As can be gleaned from petitioners' brief and the petition itself , two contentions underlie the first assignederror. First, petitioners argue that there was an irregular and arbitrarte termination and dismissal of thespecial proceedings for judicial administration simultaneously ordered in the lower court . s decision inCivil Case No. 6326 adjudicating the partition of the estate, without categorically, reasoning the oppositionto the petition for administration Second, that the issue of ownership had been raised in the lower courtwhen Tiaong Milling asserted title over the properties registered in its corporate name adverse to ForrestL. Cease or his estate, and that the said issue was erroneously disposed of by the trial court in thepartition proceedings when it concluded that the assets or properties of the defunct company is also theestate of the deceased proprietor.

The propriety of the dismissal and termination of the special proceedings for judicial administration must

be affirmed in spite of its rendition in another related case in view of the established jurisprudence whichfavors partition when judicial administration become, unnecessary. As observed by the Court of Appeals,the dismissal at first glance is wrong, for the reason that what was actually heard was Civil Case No.6326. The technical consistency, however, it is far less importance than the reason behind the doctrinalrule against placing an estate under administration. Judicial rulings consistently hold the view that wherepartition is possible, either judicial or extrajudicial, the estate should not be burdened with anadministration proceeding without good and compelling reason. When the estate has no creditors orpending obligations to be paid, the beneficiaries in interest are not bound to submit the property to judicialadministration which is always long and costly, or to apply for the appointment of an administrator by thecourt, especially when judicial administration is unnecessary and superfluous. Thus -


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When a person dies without leaving pending obligations to be paid, his heirs, whether ofage or not, are bound to submit the property to a judicial administration, which is alwayslong and costly, or to apply for the appointment of an administrator by the court. It hasbeen uniformly held that in such case the judicial administration and the appointment ofan administrator are superfluous and unnecessary proceedings (Ilustre vs. AlarasFrondosa, 17 Phil., 321; Malahacan vs. Ignacio, 19 Phil, 434; Bondad vs. Bondad, 34Phil., 232; Baldemor vs. Malangyaon, 34 Phil., 367; Fule vs. Fule, 46 Phil., 317).Syllabus, Intestate estate of the deceased Luz Garcia. Pablo G. Utulo vs. Leona PasionViuda de Garcia, 66 Phil. 302.

Where the estate has no debts, recourse may be had to an administration proceedingonly if the heirs have good reasons for not resorting to an action for partition. Wherepartition is possible, either in or out of court, the estate should not be burdened with anadministration proceeding without good and compelling reasons. (Intestate Estate ofMercado vs. Magtibay, 96 Phil. 383)

In the records of this case, We find no indication of any indebtedness of the estate. No creditor has comeup to charge the estate within the two-year period after the death of Forrest L. Cease, hence, thepresumption under Section 1, Rule 74 that the estate is free from creditors must apply. Neither has the

status of the parties as legal heirs, much less that of respondents, been raised as an issue. Besides,extant in the records is the stipulation of the parties to submit the pleadings and contents of theadministration proceedings for the cognizance of the trial judge in adjudicating the civil case for partition(Respondents' Brief, p, 20, rollo). As respondents observe, the parties in both cases are the same, so arethe properties involved; that actual division is the primary objective in both actions; the theory anddefense of the respective parties are likewise common; and that both cases have been assigned to thesame respondent judge. We feel that the unifying effect of the foregoing circumstances invites thewholesome exception to the structures of procedural rule, thus allowing, instead, room for judicialflexibility. Respondent judge's dismissal of the administration proceedings then, is a judicious move,appreciable in today's need for effective and speedy administration of justice. There being ample reasonto support the dismissal of the special proceedings in this appealed case, We cannot see in the recordsany compelling reason why it may not be dismissed just the same even if considered in a separate action.This is inevitably certain specially when the subject property has already been found appropriate forpartition, thus reducing the petition for administration to a mere unnecessary solicitation.

The second point raised by petitioners in their first assigned error is equally untenable. In effect,petitioners argue that the action for partition should not have prospered in view of the repudiation of theco-ownership by Tiaong Milling and Plantation Company when, as early in the trial court, it alreadyasserted ownership and corporate title over the properties adverse to the right of ownership of Forrest L.Cease or his estate. We are not unmindful of the doctrine relied upon by petitioners in Rodriguez vs.Ravilan,17 Phil. 63 wherein this Court held that in an action for partition, it is assumed that the parties bywhom it is prosecuted are all co-owners or co-proprietors of the property to be divided, and that thequestion of common ownership is not to be argued, not the fact as to whether the intended parties are orare not the owners of the property in question, but only as to how and in what manner and proportion thesaid property of common ownership shall be distributed among the interested parties by order of theCourt. Consistent with this dictum, it has been field that if any party to a suit for partition denies thepro-indivisocharacter of the estate whose partition is sought, and claims instead, exclusive title thereto the

action becomes one for recovery of property cognizable in the courts of ordinary jurisdiction. 2

Petitioners' argument has only theoretical persuasion, to say the least, rather apparent than real. It mustbe remembered that when Tiaong Milling adduced its defense and raised the issue of ownership, itscorporate existence already terminated through the expiration of its charter. It is clear in Section 77 of ActNo. 1459 (Corporation Law) that upon the expiration of the charter period, the corporation ceases to existand is dissolvedipso factoexcept for purposes connected with the winding up and liquidation. Theprovision allows a three year, period from expiration of the charter within which the entity gradually settlesand closes its affairs, disposes and convey its property and to divide its capital stock, but not for the


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purpose of continuing the business for which it was established. At this terminal stage of its existence,Tiaong Milling may no longer persist to maintain adverse title and ownership of the corporate assets asagainst the prospective distributees when at this time it merely holds the property in trust, its assertion ofownership is not only a legal contradiction, but more so, to allow it to maintain adverse interest wouldcertainly thwart the very purpose of liquidation and the final distribute loll of the assets to the proper,parties.

We agree with the Court of Appeals in its reasoning that substance is more important than form when itsustained the dismissal of Special Proceedings No. 3893, thus -

a) As to the dismissal of Special Proceedings No. 3893, of course, at first glance, thiswas wrong, for the reason that the case trial had been heard was Civil Case No. 6326;but what should not be overlooked either is Chat respondent Judge was the same Judgethat had before him in his own sala, said Special Proceedings No. 3893, p. 43 rollo, andthe parties to the present Civil Case No. 6326 had themselves asked respondent Judgeto take judicial notice of the same and its contents page 34, rollo; it is not difficult to seethat when respondent Judge in par. 4 of the dispositive part of his decision complainedof, ordered that,

4) Special Proceedings No. 3893 for administration is terminated anddismissed; the instant case to proceed but on issues of damages onlyand for such action inherently essential or partition. p. 123, rollo,

in truth and in fact, His Honor was issuing that order also within Civil Case No. 632 but inconnection with Special Proceedings No. 389:3: for substance is more important Chanform, the contending par ties in both proceedings being exactly the same, but not onlythis, let it not be forgotten that when His Honor dismissed Special Proceedings No. 3893,that dismissal precisely was a dismissal that petitioners herein had themselves soughtand solicited from respondent Judge as petitioners themselves are in their presentpetition pp. 5-6, rollo; this Court must find difficulty in reconciling petitioners' attack withthe fact that it was they themselves that had insisted on that dismissal; on the principlethat not he who is favored but he who is hurt by a judicial order is he only who should be

heard to complain and especially since extraordinary legal remedies are remedies inextermies granted to parties ' who have been the victims not merely of errors but of gravewrongs, and it cannot be seen how one who got what he had asked could be heard toclaim that he had been the victim of a wrong, petitioners should not now complain of anorder they had themselves asked in order to attack such an order afterwards; if at all,perhaps, third parties, creditors, the Bureau of Internal Revenue, might have beenprejudiced, and could have had the personality to attack that dismissal of SpecialProceedings No. 3893, but not petitioners herein, and it is not now for this Court ofAppeals to protect said third persons who have not come to the Court below or sought tointervene herein;

On the second assigned error, petitioners argue that no evidence has been found to support theconclusion that the registered properties of Tiaong Milling are also properties of the estate of Forrest L.

Cease; that on the contrary, said properties are registered under Act No. 496 in the name of TiaongMilling as lawful owner and possessor for the last 50 years of its corporate existence.

We do not agree. In reposing ownership to the estate of Forrest L. Cease, the trial court indeed foundstrong support, one that is based on a well-entrenched principle of law. In sustaining respondents' theoryof "merger of Forrest L. Cease and The Tiaong Milling as one personality", or that "the company is onlythe business conduit and alter ego of the deceased Forrest L. Cease and the registered properties ofTiaong Milling are actually properties of Forrest L. Cease and should be divided equally, share and sharealike among his six children, ... ", the trial court did aptly apply the familiar exception to the general rule bydisregarding the legal fiction of distinct and separate corporate personality and regarding the corporation


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and the individual member one and the same. In shredding the fictitious corporate veil, the trial judgenarrated the undisputed factual premise, thus:

While the records showed that originally its incorporators were aliens, friends or third-parties in relation of one to another, in the course of its existence, it developed into aclose family corporation. The Board of Directors and stockholders belong to one family

the head of which Forrest L. Cease always retained the majority stocks and hence thecontrol and management of its affairs. In fact, during the reconstruction of its records in1947 before the Security and Exchange Commission only 9 nominal shares out of 300appears in the name of his 3 eldest children then and another person close to them. It islikewise noteworthy to observe that as his children increase or perhaps become of age,he continued distributing his shares among them adding Florence, Teresa and Marionuntil at the time of his death only 190 were left to his name. Definitely, only the membersof his family benefited from the Corporation.

The accounts of the corporation and therefore its operation, as well as that of the familyappears to be indistinguishable and apparently joined together. As admitted by thedefendants (Manifestation of Compliance with Order of March 7, 1963 [Exhibit "21"] thecorporation 'never' had any account with any banking institution or if any account was

carried in a bank on its behalf, it was in the name of Mr. Forrest L. Cease. In brief, theoperation of the Corporation is merged with those of the majority stockholders, the latterusing the former as his instrumentality and for the exclusive benefits of all his family.From the foregoing indication, therefore, there is truth in plaintiff's allegation that thecorporation is only a business conduit of his father and an extension of his personality,they are one and the same thing. Thus, the assets of the corporation are also the estateof Forrest L. Cease, the father of the parties herein who are all legitimate children of fullblood.

A rich store of jurisprudence has established the rule known as the doctrine of disregarding or piercingthe veil of corporate fiction. Generally, a corporation is invested by law with a personality separate anddistinct from that of the persons composing it as well as from that of any other legal entity to which it maybe related. By virtue of this attribute, a corporation may not, generally, be made to answer for acts or

liabilities of its stockholders or those of the legal entities to which it may be connected, and viceversa.This separate and distinct personality is, however, merely a fiction created by law for convenienceand to promote the ends of justice (Laguna Transportation Company vs. Social Security System, L-14606, April 28, 1960; La Campana Coffee Factory, Inc. vs. Kaisahan ng mga Manggagawa sa LaCampana, L-5677, May 25, 1953). For this reason, it may not be used or invoked for ends subversive ofthe policy and purpose behind its creation (Emiliano Cano Enterprises, Inc. vs. CIR, L-20502, Feb. 26,1965) or which could not have been intended by law to which it owes its being McConnel vs. Court ofAppeals, L- 10510, March 17, 1961, 1 SCRA 722). This is particularly true where the fiction is used todefeat public convenience, justify wrong, protect fraud, defend crime (Yutivo Sons Hardware Companyvs. Court of Tax Appeals, L-13203, Jan. 28, 1961, 1 SCRA 160), confuse legitimate legal or judicialissues (R. F. Sugay & Co. vs. Reyes, L-20451, Dec. 28, 1964), perpetrate deception or otherwisecircumvent the law (Gregorio Araneta, Inc. vs. reason de Paterno, L-2886, Aug. 22, 1952, 49 O.G. 721).This is likewise true where the corporate entity is being used as an alter ego, adjunct, or business conduitfor the sole benefit of the stockholders or of another corporate entity (McConnel vs. Court of

Appeals, supra; Commissioner of Internal Revenue vs. Norton Harrison Co., L-7618, Aug. 31, 1964).

In any of these cases, the notion of corporate entity will be pierced or disregarded, and the corporationwill be treated merely as an association of persons or, where there are two corporations, they will bemerged as one, the one being merely regarded as part or the instrumentality of the otter (Koppel [Phil.]Inc. vs. Yatco, 77 Phil. 496, Yutivo Sons Hardware Company vs. Court of Tax Appeals, supra).

So must the case at bar add to this jurisprudence. An indubitable deduction from the findings of the trialcourt cannot but lead to the conclusion that the business of the corporation is largely, if not wholly, the


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personal venture of Forrest L. Cease. There is not even a shadow of a showing that his children weresubscribers or purchasers of the stocks they own. Their participation as nominal shareholders emanatedsolely from Forrest L. Cease's gratuitous dole out of his own shares to the benefit of his children andultimately his family.

Were we sustain the theory of petitioners that the trial court acted in excess of jurisdiction or abuse of

discretion amounting to lack of jurisdiction in deciding Civil Case No. 6326 as a case for partition whenthe defendant therein, Tiaong Milling and Plantation Company, Inc. as registered owner assertedownership of the assets and properties involved in the litigation, which theory must necessarily be basedon the assumption that said assets and properties of Tiaong Milling and Plantation Company, Inc. nowappearing under the name of F. L. Cease Plantation Company as Trustee are distinct and separate fromthe estate of Forrest L. Cease to which petitioners and respondents as legal heirs of said Forrest L.Cease are equally entitled share and share alike, then that legal fiction of separate corporate personalityshall have been used to delay and ultimately deprive and defraud the respondents of their successionalrights to the estate of their deceased father. For Tiaong Milling and Plantation Company shall have beenable to extend its corporate existence beyond the period of its charter which lapsed in June, 1958 underthe guise and cover of F. L, Cease Plantation Company, Inc. as Trustee which would be against the law,and as Trustee shall have been able to use the assets and properties for the benefit of the petitioners, tothe great prejudice and defraudation. of private respondents. Hence, it becomes necessary andimperative to pierce that corporate veil.

Under the third assigned error, petitioners claim that the decision of the lower court in the partition case isnot interlocutory but rather final for it consists of final and determinative dispositions of the contentions ofthe parties. We find no merit in petitioners' stand.

Under the 1961 pronouncement and ruling of the Supreme Court in Vda. de Zaldarriaga vs. Enriquez, 1SCRA 1188 (and the sequel case of Vda. de Zaldarriaga vs. Zaldarriaga, 2 SCRA 356), the lower court'sdismissal of petitioners' proposed appeal from its December 27, 1969 judgment as affirmed by the Courtof Appeals on the ground of prematurity in that the judgment was not final but interlocutory was in order.As was said in said case:

It is true that inAfrica vs. Africa, 42 Phil. 934 and other cases it was held - contrary to the

rule laid down in Ron vs. Mojica, 8 Phil. 328;Rodriguez vs. Ravilan, 17 Phil. 63 - that in apartition case where defendant relies on the defense of exclusive ownership, the actionbecomes one for title and the decision or order directing partition is final, but the ruling tothis effect has been expressly reversed in the Fuentebella case which, in our opinion,expresses the correct view, considering that a decision or order directing partition is notfinal because it leaves something more to be done in the trial court for the completedisposition of the case, namely, the appointment of commissioners, the proceedings tobe had before them, the submission of their report which, according to law, must be setfor hearing. In fact, it is only after said hearing that the court may render a final judgmentfinally disposing of the action (Rule 71, section 7, Rules of Court). (1 SCRA at page1193).

It should be noted, however, that the said ruling in Zaldarriaga as based on Fuentebella vs. Carrascoso,

XIV Lawyers Journal 305 (May 27, 1942), has been expressly abandoned by the Court in Miranda vs.Court of Appeals, 71 SCRA 295; 331-333 (June 18, 1976) wherein Mr. Justice Teehankee, speaking forthe Court, laid down the following doctrine:

The Court, however, deems it proper for the guidance of the bench and bar to nowdeclare as is clearly indicated from the compelling reasons and considerationshereinabove stated:


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- that the Court considers the better rule to be that stated in H. E. Heacock Co. vs.American Trading Co., to wit, that where the primary purpose of a case is to ascertainand determine who between plaintiff and defendant is the true owner and entitled to theexclusive use of the disputed property, "the judgment . . . rendered by the lower court [is]a judgment on the meritsas to those questions, and [that] the order of the court foran accountingwas based upon, and is incidental to the judgment on the merits. That is tosay, that the judgment . . . [is] a final judgment ... that in this kind of a case an accountingis a mere incident to the judgment; that an appeal liesfrom the rendition of the judgmentas rendered ... "(as is widely held by a great number of judges and members of the bar,as shown by the cases so decided and filed and still pending with the Court) for thefundamental reasons therein stated that "this is more in harmony with the administrationof justiceand the spirit and intent of the [Rules]. If on appeal the judgment of the lowercourt is affirmed, it would not in the least work an injustice to any of the legal rights of[appellee]. On the other hand, if for any reason this court should reverse the judgment ofthe lower court, the accounting would be a waste of time and money, and might work amaterial injury to the [appellant]; and

- that accordingly, the contrary ruling in Fuentebella vs. Carrascosowhich expresslyreversed the Heacock case and a line of similar decisions and ruled that such a decisionfor recovery of property with accounting "is not final but merely interlocutory and thereforenot appealable" and subsequent cases adhering to the same must be nowinturn abandoned and set aside.

Fuentebellaadopted instead the opposite line of conflicting decisions mostly in partitionproceedings and exemplified by Ron vs. Mojica8 Phil. 928 (under the old Code of CivilProcedure) that an order for partition of real property is not final and appealable until afterthe actual partitionof the property as reported by the court appointed commissioners andapproved by the court in itsjudgmentaccepting the report. lt must be especially noted thatsuch rule governing partitions is now so expressly provided and spelled out in Rule 69 ofthe Rules of Court, with special reference to Sections 1, 2, 3, 6, 7 and 11, to wit, thatthere must first be a preliminar, order for partition of the real estate (section 2) and wherethe parties-co-owners cannot agree, the court appointed commissioners make a plan ofactual partition which must first be passed upon and accepted by the trial court andembodied in a judgment to be rendered by it (sections 6 and 11). In partition cases, itmust be further borne in mind that Rule 69, section 1 refers to "a person havingthe rightto compel thepartitionof real estate," so that the general rule of partition that anappeal will not lie until the partition or distribution proceedings are terminated will notapply where appellant claims exclusive ownershipof the whole property and denies theadverse party's right to any partition, as was the ruling in Villanueva vs.CapistranoandAfrica vs .Africa, supra, Fuentebellas express rehearsal of these casesmust likewise be deemed now also abandoned in view of the Court's expressedpreference for the rationale of the Heacock case.

The Court's considered opinion is that imperativeconsiderations ofpublic policy andof sound practice in the courts and adherence to the constitutional mandate of simplified,just, speedy and inexpensive determination of every action call for considering such

judgments for recovery of property with accounting as finaljudgments which areduly appealable (and would therefore become final and executory if not appealed withinthe reglementary period) with the accounting as a mere incident of the judgment to berendered during the course of the appeal as provided in Rule 39, section 4 or to beimplemented at the execution stage upon final affirmance on appeal of the judgment (asin Court of Industrial Relations unfair labor practice cases ordering the reinstatement ofthe worker with accounting, computation and payment of his backwages less earningselsewhere during his layoff) and that the only reason given in Fuentebelia for the contrary


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ruling, viz, "the general harm that would follow from throwing the door open to multiplicityof appeals in a single case" of lesser import and consequence. (Emphasis copied).

The miranda ruling has since then been applied as the new rule by a unanimous Court in Valdez vs.Bagasao, 82 SCRA 22 (March 8, 1978).

If there were a valid genuine claim of Exclusive ownership of the inherited properties on the part ofpetitioners to respondents' action for partition, then under the Miranda ruling, petitioners would besustained, for as expressly held therein " the general rule of partition that an appeal will not lie until thepartition or distribution proceedings are terminated will not apply where appellant claims exclusiveownership of the whole property and denies the adverse party's right to any partition."

But this question has now been rendered moot and academic for the very issue of exclusive ownershipclaimed by petitioners to deny and defeat respondents' right to partition - which is the very core of theirrejected appeal - has been squarely resolved herein against them, as if the appeal had been given duecourse. The Court has herein expressly sustained the trial court's findings, as affirmed by the Court ofAppeals, that the assets or properties of the defunct company constitute the estate of the deceasedproprietor (supra at page 7) and the defunct company's assertion of ownership of the properties is a legalcontradiction and would but thwart the liquidation and final distribution and partition of the properties

among the parties hereof as children of their deceased father Forrest L. Cease. There is therefore nofurther hindrance to effect the partition of the properties among the parties in implementation of theappealed judgment.

One last consideration. Parties are brothers and sisters, legal heirs of their deceased father, Forrest L.Cease. By all rights in law and jurisprudence, each is entitled to share and share alike in the estate, whichthe trial court correctly ordained and sustained by the appellate court. Almost 20 years have lapsed sincethe filing of Special Proceedings No. 3893 for the administration of the Estate of Forrest L. Cease andCivil Case No. 6326 for liquidation and partition of the assets of the defunct Tiaong Milling and PlantationCo., Inc. A succession of receivers were appointed by the court to take, keep in possession, preserve andmanage properties of the corporation which at one time showed an income of P386,152.90 and expensesof P308,405.01 for the period covering January 1, 1960 to August 31, 1967 as per Summary ofOperations of Commissioner for Finance appointed by the Court (Brief for Respondents, p. 38). In the

meantime, ejectment cases were filed by and against the heirs in connection with the properties involved,aggravating the already strained relations of the parties. A prudent and practical realization of thesecircumstances ought and must constrain the parties to give each one his due in law and with fairness anddispatch that their basic rights be enjoyed. And by remanding this case to the court a quo for the actualpartition of the properties, the substantial rights of everyone of the heirs have not been impaired, for infact, they have been preserved and maintained.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED withcosts against the petitioners.

SO ORDERED.

Teehankee, Actg. C.J., (Chairman), Makasiar, Fernandez, De Castro and Melencio-Herrera, JJ., concur.

G.R. No. L-81147 June 20, 1989


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VICTORIA BRINGAS PEREIRA, petitioner,vs.THE HONORABLE COURT OF APPEALS and RITA PEREIRA NAGAC, respondents.

Is a judicial administration proceeding necessary when the decedent dies intestate without leaving anydebts? May the probate court appoint the surviving sister of the deceased as the administratrix of the

estate of the deceased instead of the surviving spouse? These are the main questions which need to beresolved in this case.

Andres de Guzman Pereira, an employee of the Philippine Air Lines, passed away on January 3, 1983 atBacoor, Cavite without a will. He was survived by his legitimate spouse of ten months, the hereinpetitioner Victoria Bringas Pereira, and his sister Rita Pereira Nagac, the herein private respondent.

On March 1, 1983, private respondent instituted before Branch 19 of the Regional Trial Court of Bacoor,Cavite, Special Proceeding No. RTC-BSP-83-4 for the issuance of letters of administration in her favorpertaining to the estate of the deceased Andres de Guzman Pereira.

1 In her verified petition, private

respondent alleged the following: that she and Victoria Bringas Pereira are the only surviving heirs of thedeceased; that the deceased left no will; that there are no creditors of the deceased; that the deceasedleft several properties, namely: death benefits from the Philippine Air Lines (PAL), the PAL Employees

Association (PALEA), the PAL Employees Savings and Loan Association, Inc. (PESALA) and the SocialSecurity System (SSS), as well as savings deposits with the Philippine National Bank (PNB) and thePhilippine Commercial and Industrial Bank (PCIB), and a 300 square meter lot located at BarangayPamplona, Las Pinas, Rizal and finally, that the spouse of the deceased (herein petitioner) had beenworking in London as an auxiliary nurse and as such one-half of her salary forms part of the estate of thedeceased.

On March 23,1983, petitioner filed her opposition and motion to dismiss the petition of privaterespondent

2alleging that there exists no estate of the deceased for purposes of administration and

praying in the alternative, that if an estate does exist, the letters of administration relating to the saidestate be issued in her favor as the surviving spouse.

In its resolution dated March 28, 1985, the Regional Trial Court, appointed private respondent Rita

Pereira Nagac administratrix of the intestate estate of Andres de Guzman Pereira upon a bond posted byher in the amount of Pl,000.00. The trial court ordered her to take custody of all the real and personalproperties of the deceased and to file an inventory thereof within three months after receipt of the order.

3

Not satisfied with the resolution of the lower court, petitioner brought the case to the Court of Appeals.The appellate court affirmed the appointment of private respondent as administratrix in its decision datedDecember 15, 1987.

4

Hence, this petition for review on certiorari where petitioner raises the following issues: (1) Whether or notthere exists an estate of the deceased Andres de Guzman Pereira for purposes of administration; (2)Whether or not a judicial administration proceeding is necessary where there are no debts left by thedecedent; and, (3) Who has the better right to be appointed as administratrix of the estate of thedeceased, the surviving spouse Victoria Bringas Pereira or the surviving sister Rita Pereira Nagac?

Anent the first issue, petitioner contends that there exists no estate of the deceased for purposes ofadministration for the following reasons: firstly, the death benefits from PAL, PALEA, PESALA and theSSS belong exclusively to her, being the sole beneficiary and in support of this claim she submitted letter-replies from these institutions showing that she is the exclusive beneficiary of said death benefits;secondly, the savings deposits in the name of her deceased husband with the PNB and the PCIB hadbeen used to defray the funeral expenses as supported by several receipts; and, finally, the only realproperty of the deceased has been extrajudicially settled between the petitioner and the privaterespondent as the only surviving heirs of the deceased.


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Private respondent, on the other hand, argues that it is not for petitioner to decide what properties formpart of the estate of the deceased and to appropriate them for herself. She points out that this function isvested in the court in charge of the intestate proceedings.

Petitioner asks this Court to declare that the properties specified do not belong to the estate of thedeceased on the basis of her bare allegations as aforestated and a handful of documents. Inasmuch as

this Court is not a trier of facts, We cannot order an unqualified and final exclusion or non-exclusion of theproperty involved from the estate of the deceased.5

The resolution of this issue is better left to the probate court before which the administration proceedingsare pending. The trial court is in the best position to receive evidence on the discordant contentions of theparties as to the assets of the decedent's estate, the valuations thereof and the rights of the transferees ofsome of the assets, if any.

6The function of resolving whether or not a certain property should be included

in the inventory or list of properties to be administered by the administrator is one clearly within thecompetence of the probate court. However, the court's determination is only provisional in character, notconclusive, and is subject to the final decision in a separate action which may be instituted by theparties.

7

Assuming, however, that there exist assets of the deceased Andres de Guzman Pereira for purposes of

administration, We nonetheless find the administration proceedings instituted by private respondent to beunnecessary as contended by petitioner for the reasons herein below discussed.

The general rule is that when a person dies leaving property, the same should be judicially administeredand the competent court should appoint a qualified administrator, in the order established in Section 6,Rule 78, in case the deceased left no will, or in case he had left one, should he fail to name an executortherein.

8An exception to this rule is established in Section 1 of Rule 74.

9Under this exception, when all

the heirs are of lawful age and there are no debts due from the estate, they may agree in writing topartition the property without instituting the judicial administration or applying for the appointment of anadministrator.

Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs from institutingadministration proceedings, even if the estate has no debts or obligations, if they do not desire to resort

for good reasons to an ordinary action for partition. While Section 1 allows the heirs to divide the estateamong themselves as they may see fit, or to resort to an ordinary action for partition, the said provisiondoes not compel them to do so if they have good reasons to take a different course of action.

10It shouldbe noted that recourse to an administration proceeding even if the estate has no debts is sanctioned onlyif the heirs have good reasons for not resorting to an action for partition. Where partition is possible, eitherin or out of court, the estate should not be burdened with an administration proceeding without good andcompelling reasons.

11

Thus, it has been repeatedly held that when a person dies without leaving pending obligations to be paid,his heirs, whether of age or not, are not bound to submit the property to a judicial administration, which isalways long and costly, or to apply for the appointment of an administrator by the Court. It has beenuniformly held that in such case the judicial administration and the appointment of an administrator aresuperfluous and unnecessary proceedings .

12

Now, what constitutes "good reason" to warrant a judicial administration of the estate of a deceased whenthe heirs are all of legal age and there are no creditors will depend on the circumstances of each case.

In one case,13

We said:

Again the petitioner argues that only when the heirs do not have any dispute as to thebulk of the hereditary estate but only in the manner of partition does section 1, Rule 74 ofthe Rules of Court apply and that in this case the parties are at loggerheads as to the


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corpus of the hereditary estate because respondents succeeded in sequestering someassets of the intestate. The argument is unconvincing, because, as the respondent judgehas indicated, questions as to what property belonged to the deceased (and therefore tothe heirs) may properly be ventilated in the partition proceedings, especially where suchproperty is in the hands of one heir.

In another case, We held that if the reason for seeking an appointment as administrator is merely to avoida multiplicity of suits since the heir seeking such appointment wants to ask for the annulment of certaintransfers of property, that same objective could be achieved in an action for partition and the trial court isnot justified in issuing letters of administration.

14 In still another case, We did not find so powerful a

reason the argument that the appointment of the husband, a usufructuary forced heir of his deceasedwife, as judicial administrator is necessary in order for him to have legal capacity to appear in theintestate proceedings of his wife's deceased mother, since he may just adduce proof of his being a forcedheir in the intestate proceedings of the latter.

15

We see no reason not to apply this doctrine to the case at bar. There are only two surviving heirs, a wifeof ten months and a sister, both of age. The parties admit that there are no debts of the deceased to bepaid. What is at once apparent is that these two heirs are not in good terms. The only conceivable reasonwhy private respondent seeks appointment as administratrix is for her to obtain possession of the alleged

properties of the deceased for her own purposes, since these properties are presently in the hands ofpetitioner who supposedly disposed of them fraudulently. We are of the opinion that this is not acompelling reason which will necessitate a judicial administration of the estate of the deceased. Tosubject the estate of Andres de Guzman Pereira, which does not appear to be substantial especiallysince the only real property left has been extrajudicially settled, to an administration proceeding for nouseful purpose would only unnecessarily expose it to the risk of being wasted or squandered. In mostinstances of a similar nature,

16the claims of both parties as to the properties left by the deceased may be

properly ventilated in simple partition proceedings where the creditors, should there be any, are protectedin any event.

We, therefore, hold that the court below before which the administration proceedings are pending was notjustified in issuing letters of administration, there being no good reason for burdening the estate of thedeceased Andres de Guzman Pereira with the costs and expenses of an administration proceeding.

With the foregoing ruling, it is unnecessary for us to delve into the issue of who, as between the survivingspouse Victoria Bringas Pereira and the sister Rita Pereira Nagac, should be preferred to be appointed asadministratrix.

WHEREFORE, the letters of administration issued by the Regional Trial Court of Bacoor to Rita PereiraNagac are hereby revoked and the administration proceeding dismissed without prejudice to the right ofprivate respondent to commence a new action for partition of the property left by Andres de GuzmanPereira. No costs.

SO ORDERED.

Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.


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[G.R. No. 155555. August 16, 2005]

ISABEL P. PORTUGAL and JOSE DOUGLAS PORTUGAL JR., peti t ioners, vs. LEONILAPORTUGAL-BELTRAN,respondent.

Petitioners Isabel P. Portugal and her son, Jose Douglas Portugal Jr., assail the September 24,2002

[1]Decision of the Court of Appeals affirming that of the Regional Trial Court (RTC) of Caloocan City,

Branch 124[2]

which dismissed, after trial, their complaint for annulment of titlefor failure to state a causeof action and lack of jurisdiction.

From the records of the case are gathered the following material allegations claims of the parties

which they sought to prove bytestimonial and documentary evidence during the trial of the case:

On November 25, 1942, Jose Q. Portugal (Portugal) married Paz Lazo.[3]

On May 22, 1948, Portugal married petitioner Isabel de la Puerta.[4]

On September 13, 1949, petitioner Isabel gave birth to a boy whom she named Jose DouglasPortugal Jr., her herein co-petitioner.

[5]

On April 11, 1950, Paz gave birth to a girl, Aleli,[6]

later baptized as Leonila Perpetua Aleli Portugal,herein respondent.

[7]

On May 16, 1968, Portugal and his four (4) siblings executed a Deed of Extra-Judicial Partition andWaiver of Rights

[8]over the estate of their father, Mariano Portugal, who died intestate on November 2,

1964.[9]

In the deed, Portugals siblings waived their rights, interests, and participation over a 155 sq. m.parcel of land located in Caloocan in his favor.

[10]

On January 2, 1970, the Registry of Deeds for Caloocan City issued Transfer Certificate of Title

(TCT) No. 34292 covering the Caloocan parcel of land in the name of Jose Q. Portugal, married to PazC. Lazo.[11]

On February 18, 1984, Paz died.

On April 21, 1985, Portugal died intestate.

On February 15, 1988, respondent executed an Affidavit of Adjudication by Sole Heir of Estate ofDeceased Person

[12]adjudicating to herself the Caloocan parcel of land. TCT No. 34292/T-172

[13]in

Portugals name was subsequently cancelled and in its stead TCT No. 159813[14]

was issued by theRegistry of Deeds for Caloocan City on March 9, 1988 in the name of respondent, Leonila Portugal-Beltran, married to Merardo M. Beltran, Jr.

Later getting wind of the death in 1985 of Portugal and still later of the 1988 transfer by respondentof the title to the Caloocan property in her name, petitioners filed before the RTC of Caloocan City on July23, 1996 a complaint[15]against respondent for annulment of the Affidavit of Adjudication executed by herand the transfer certificate of title issued in her name.

In their complaint, petitioners alleged that respondent is not related whatsoever to the deceasedPortugal, hence, not entitled to inherit the Caloocan parcel of land and that she perjured herself when shemade false representations in her Affidavit of Adjudication.

Petitioners accordingly prayed that respondents Affidavit of Adjudication and the TCT in her name bedeclared void and that the Registry of Deeds for Caloocan be ordered to cancel the TCT in respondents
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such cases, evidence must be adduced, testimonial or documentary, to prove the existence of grounds rendering such

a previous marriage an absolute nullity. These need not be limited solely to an earlier final judgment of a court

declaring such previous marriage void. (Domingo v. Court of Appeals, supra) (Emphasis and underscoring

supplied).

Conceding that the ruling in Cario was promulgated (in 2001) subsequent to that of Heirs of Guido

and Isabel Yaptinchay (in 1999), the appellate court found Carioto be inapplicable, however, to the casein this wise:

To be borne in mind is the fact that the main issue in the Cario case was the validityof the two marriages contracted

by the deceased SPO4 Santiago Cario, whose death benefits was the bone of contention between the two women

both named Susan (viz., Susan Nicdao Cario and Susan Yee Cario) both of whom he married. It is not disputed in

said case that SPO4 S. Cario contracted two marriages with said two women during his lifetime, and the only

question was: which of these two marriages was validly celebrated? The award of the death benefits of the deceased

Cario was thus, merely an incidentto the question of which of the two marriages was valid. Upon the other hand,

the case at bench is of a different milieu. The main issue here is theannulmentoftitletoproperty. The only

undisputed fact in this case is that the deceased Jose Portugal, during his lifetime, owned a parcel of land covered by

Transfer Certificate of Title (TCT) No. T-34292. However, here come two contending parties, herein plaintiffs-

appellants and defendant-appellee, both now insisting to be the legal heir(s) of the decedent. x x x. The status and

rights of the parties herein have not, therefore, been definitively established, as yet. x x x. Necessarily andnaturally, such questions as to such status or right must be properly ventilated in an appropriate special proceeding,

not in an ordinary civil action, whereunder a party sues another for the enforcement or protection of a right, or the

protection or redress of a wrong. The institution of an ordinary civil suit for that purpose in the present case is thus

impermissible. For it is axiomatic that what the law prohibits or forbids directly, it cannot permit or allow indirectly.

To permit, or allow, a declaration of heirship, or the establishment of the legitimacy or illegitimacy of a child to be

determined in an ordinary civil action, not in an appropriate special proceeding brought for that purpose, is thus to

impinge upon this axiom. x x x[21]

(Emphasis in the original, underscoring supplied).

The appellate court, by Decision of September 24, 2002,[22]

thus affirmed the trial courts dismissal ofthe case.

Hence, the present Petition for Review on Certiorari,[23]

faulting the appellate court to have erredwhen

I.

. . . it affirmed the RTC decision dismissing the initiatory complaint as it failed to state a cause of action.

II.

. . . (i) it applied the ruling inHeirs of Guido [and Isabel] Yaptingchaydespite the existence of a later and contrary

ruling in Cario, and (ii) when the Honorable CA and the lower court failed to render judgment based on the

evidence presented relative to the issuesraisedduringpre-trial, . . .[24]

(Emphasis and underscoring supplied).

Petitioners thus prayed as follows:

WHEREFORE, it is respectfully prayed of this Honorable Supreme Court that the questioned CA decision

be reversed, and a new one entered in accordance with the prayers set forth in the instant complaint based on the

above disquisition and evidence adduced by petitioners in the court a quo.

IN THE ALTERNATIVE, should the Honorable Supreme Court find that the pronouncements in Carioapply, a

decision be entered remanding to the court a quo the determination of the issues of which of the two marriages is

valid, and the determination of heirship and legitimacy of Jose Jr. and Leonila preparatory to the determination of

the annulment of title issued in the name of Leonila.
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Other relief and remedy just and equitable in the premises are likewise prayed for.[25]

(Underscoring supplied).

Petitioners, in the main, argue that the appellate court misapplied Heirs of Guido and IsabelYaptinchayand in effect encouraged multiplicity of suits which is discouraged by this Court as a readingof Carioshows; that Cario allows courts to pass on the determination of heirship and the legitimacy orillegitimacy of a child so long as it is necessary to the determination of the case; and that contrary to the

appellate courts ruling, they had established their status as compulsory heirs.In the main, the issue in the present petition is whether petitioners have to institute a special

proceeding to determine their status as heirs before they can pursue the case for annulment ofrespondents Affidavit of Adjudication and of the TCT issued in her name.

In the above-cited case of Heirs of Guido and Isabel Yaptinchay,[26]

the therein petitioners executedon March 17, 1994 an extrajudicial settlement of the estate of the deceased Guido and Isabel Yaptinchay,owners-claimants of the two lots mentioned therein. They later discovered on August 26, 1994 that aportion, if not all, of the two lots had been titled in the name of the therein respondent Golden Bay Realtyand Development Corporation which in turn sold portions thereof to the therein individual respondents.The therein petitioners Heirsthus filed a complaint for annulment of titles. The therein respondents movedto dismiss the case for failure of the therein petitioners to, inter alia, state a cause of action and provetheir status as heirs. The trial court granted the motion to dismiss in this wise:

But the plaintiffs who claimed to be the legal heirs of the said Guido and Isabel Yaptinchay have not shown any

proof or even a semblance of itexcept the allegations that they are the legal heirs of the aforementioned

Yaptinchaysthat they have been declared the legal heirs of the deceased couple. Now, the determination of who are

the legal heirs of the deceased couple must be made in the proper special proceedings in court, and not in an

ordinary suit for reconveyance of property. This must take precedence over the action for reconveyance . .

.[27]

(Italics in the original; underscoring supplied).

On petition for certiorariby the Heirs, this Court, albeit holding that the petition was an improper recourse,found that the trial court did not commit grave abuse of discretion in dismissing the case. Citing Litam etal. v. Rivera

[28]and Solivio v. Court of Appeals,

[29]this Court held that the declaration of heirship can be

made only in a special proceeding inasmuch as the petitioners here are seeking the establishment of astatus or right.

In the above-cited case of Litam,[30]Gregorio Dy Tam instituted a special proceeding for issuance ofletters of administration before the then Court of First Instance (CFI) of Rizal, alleging in his petition thathe is the son of Rafael Litam who died in Manila on January 10, 1951 and is survived by him and histherein named seven (7) siblings who are children of the decedent by his marriage to Sia Khin celebratedin China in 1911; that the decedent contracted in 1922 in the Philippines another marriage with MarcosaRivera; and that the decedent left neither a will nor debt. Dy Tam thus prayed for the issuance of letters ofadministration to Marcosa Rivera, the surviving spouse of the decedent. The CFI granted the petition andissued letters of administration to, on Marcosas request, her nephew Arminio Rivera.

While the special proceeding was pending, Dy Tam and his purported siblings filed a civilcase before the same court, against the estate of Rafael Litam administrator Arminio Rivera andRemedios R. Espiritu, duly appointed guardian of Marcosa. In their complaint, Dy Tam and his purportedsiblings substantially reproduced the allegations made in his petition in the special proceeding, with the

addition of a list of properties allegedly acquired during the marriage of the decedent and Marcosa.

Finding the issue raised in the civil case to be identical to some unresolved incidents in the specialproceeding, both were jointly heard by the trial court, following which it rendered a decision in the civilcase dismissing it, declaring, inter alia, that the plaintiffs Dy Tam et al. are not the children of thedecedent whose only surviving heir is Marcosa.

On appeal to this Court by Dy Tam et al., one of the two issues raised for determination was whetherthey are the legitimate children of Rafael Litam.
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This Court, holding that the issue hinged on whether Rafael Litam and Sia Khin were married in1911, and whether Rafael Litam is the father of appellants Dy Tam et al., found substantially correct thetrial courts findings of fact and its conclusion that, among other things, the birth certificates of Dy Tam etal. do not establish the identity of the deceased Rafael Litam and the persons named therein as father[and] it does not appear in the said certificates of birth that Rafael Litam had in any manner intervened inthe preparation and filing thereof; and that [t]he other documentary evidence presented by [them] [is]entirely immaterial and highly insufficient to prove the alleged marriage between the deceased RafaelLitam and Sia Khin and [their] alleged status . . . as children of said decedent.

This Court went on to opine in Litam, however, that the lower court should not have declared, in thedecision appealed from, that Marcosa is the only heir of the decedent, for such declaration is improper inthe [civil case], it being within the exclusive competence of the court in [the] [s]pecial [p]roceeding.

In Solivio,[31]

also cited in Heirs of Guido and Isabel Yaptinchay, therewas a special proceeding forthe settlement of the estate of the deceased, who was a soltero, filed before the RTC of Iloilo. In thespecial proceeding, Branch 23 of said court declared as sole heir Celedonia Solivio, the decedentsmaternal aunt-half sister of his mother. Concordia Javellana-Villanueva, the decedents paternal aunt-sister of his father, moved to reconsider the courts order declaring Celedonia Solivio as sole heir of thedecedent, she claiming that she too was an heir. The court denied the motion on the ground of tardiness.Instead of appealing the denial of her motion, Concordia filed a civil caseagainst Celedonia before thesame RTC, for partition, recovery of possession, ownership and damages. The civil case was raffled toBranch 26 of the RTC, which rendered judgment in favor of Concordia. On appeal by Celedonia, theappellate court affirmed the said judgment.

On petition for review filed before this Court by Celedonia who posed, among other issues, whetherBranch 26 of the RTC of Iloilo had jurisdiction to entertain [the civil action] for partition and recovery ofConcordia Villanuevas share of the estate of [the deceased] while the [estate] proceedings . . . were stillpending . . . in Branch 23 of the same court, this Court held that [i]n the interest of orderlyprocedureand to avoid confusing and conflicting dispositions of a decedents estate, a courtshould not interfere with [estate] proceedingspending in a co-equal court,citing Guilas v. CFI Judgeof Pampanga.

[32]

This Court, however, in Solivio, upon [c]onsidering that the estate proceedings are still pending, butnonetheless [therein private respondent-Concordia Villanueva] had lost her right to have herself declaredas co-heir in said proceedings, opted to proceed to discuss the merits of her claim in the interest of

justice,and declared her an heir of the decedent.

In Guilas[33]

cited in Solivio,a project of partition between an adopted daughter, the therein petitionerJuanita Lopez Guilas (Juanita), and her adoptive father was approved in the proceedings for thesettlement of the testate estate of the decedent-adoptive mother, following which the probate courtdirected that the records of the case be archived.

Juanita subsequently filed a civil action against her adoptive father to annul the project of partition onthe ground of lesion, preterition and fraud, andprayed that her adoptive father immediately deliver to herthe two lots allocated to her in the project of partition. She subsequently filed a motion in the testateestate proceedings for her adoptive father to deliver to her, among other things, the same two lots allottedto her.

After conducting pre-trial in the civil case, the trial court, noting the parties agreement to suspend

action or resolution on Juanitas motion in the testate estate proceedings for the delivery to her of the twolots alloted to her until after her complaint in the civil case had been decided, set said case for trial.

Juanita later filed in the civil case a motion to set aside the order setting it for trial on the ground thatin the amended complaint she, in the meantime, filed, she acknowledged the partial legality and validity ofthe project of partition insofar as she was allotted the two lots, the delivery of which she was seeking. Shethus posited in her motion to set aside the April 27, 1966 order setting the civil case for hearing that therewas no longer a prejudicial question to her motion in the testate estate proceedings for the delivery to herof the actual possession of the two lots. The trial court, by order of April 27, 1966, denied the motion.
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Juanita thereupon assailed the April 27, 1966 order before this Court.

The probate courts approval of the project of partition and directive that the records of the case besent to the archives notwithstanding, this Court held that the testate estate proceedings had not beenlegally terminated as Juanitas share under the project of partition had not been delivered to her.Explained this Court:

As long as the order of the distribution of the estate has not been complied with, the probate proceedings cannot be

deemed closed and terminated (Siguiong vs. Tecson, supra.); because a judicial partition is not final and conclusive

and does not prevent the heir from bringing an action to obtain his share, provided the prescriptive period therefor

has not elapse (Mari vs. Bonilla, 83 Phil., 137). The better practice, however, for the heir who has not received his

share, is to demand his share through a proper motion in the same probate or administration proceedings,or

for re-opening of the probate or administrative proceedings if it had already been closed, and not through an

independent action, which would be tried by another court or Judge which may thus reverse a decision or

order of the probate o[r] intestate court already final and executedand re-shuffle properties long ago distributed

and disposed of (Ramos vs. Ortuzar, 89 Phil. 730, 741-742; Timbol vs. Cano, supra,; Jingco vs. Daluz, L-5107,

April 24, 1953, 92 Phil. 1082; Roman Catholic vs. Agustines, L-14710, March 29, 1960, 107 Phil., 455, 460-

461).[34]

(Emphasis and underscoring supplied).

This Court thus set aside the assailed April 27, 1966 order of the trial court setting the civil case for

hearing, but allowed the civil case to continue because it involves no longer the two lots adjudicated toJuanita.

The common doctrine in Litam, Solivio and Guilasin which the adverse parties are putative heirs tothe estate of a decedent or parties to the special proceedings for its settlement is that if the specialproceedings are pending, or if there are no special proceedings filed but there is, under thecircumstances of the case, a need to file one, then the determination of, among other issues, heirshipshould be raised and settled in said special proceedings. Where special proceedings had been institutedbut had been finally closed and terminated, however, or if a putative heir has lost the right to have himselfdeclared in the special proceedings as co-heir and he can no longer ask for its re-opening, then anordinary civil action can be filed for his declaration as heir in order to bring about the annulment of thepartition or distribution or adjudication of a property or properties belonging to the estate of the deceased.

In the case at bar, respondent, believing rightly or wrongly that she was the sole heir to Portugals

estate, executed on February 15, 1988[35]the questioned Affidavit of Adjudication under the secondsentence of Rule 74, Section 1 of the Revised Rules of Court.

[36]Said rule is an exception to the general

rule that when a person dies leaving a property, it should be judicially administered and the competentcourt should appoint a qualified administrator, in the order established in Sec. 6, Rule 78 in case thedeceased left no will, or in case he did, he failed to name an executor therein.

[37]

Petitioners claim, however, to be the exclusive heirs of Portugal. A probate or intestate court, nodoubt, has jurisdiction to declare who are the heirs of a deceased.

It appearing, however, that in the present case the only property of the intestate estate of Portugal isthe Caloocan parcel of land,

[38]to still subject it, under the circumstances of the case, to a special

proceeding which could be long, hence, not expeditious, just to establish the status of petitioners as heirsis not only impractical; it is burdensome to the estate with the costs and expenses of an administrationproceeding. And it is superfluous in light of the fact that the parties to the civil case subject of the present

case, could and had already in fact presented evidence before the trial court which assumed jurisdictionover the case upon the issues it defined during pre-trial.

In fine, under the circumstances of the present case, there being no compelling reason to still subjectPortugals estate to administration proceedings since a determination of petitioners status as heirs couldbe achieved in the civil case filed by petitioners,

[39]the trial court should proceed to evaluate the evidence

presented by the parties during the trial and render a decision thereon upon the issues it defined duringpre-trial, which bear repeating, to wit:
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1. Which of the two (2) marriages contracted by the deceased Jose Q. Portugal, is valid;

2. Which of the plaintiff, Jose Portugal Jr. and defendant Leonila P. Beltran is the legal heir of the deceased

Jose Q. Portugal (Sr.);

3. Whether or not TCT No. 159813 was issued in due course and can still be contested by plaintiffs;

4. Whether or not plaintiffs are entitled to their claim under the complaint .[40]

WHEREFORE, the petition is hereby GRANTED. The assailed September 24, 2002 Decision of theCourt of Appeals is hereby SET ASIDE.

Let the records of the case be REMANDED to the trial court, Branch 124 of the Regional Trial Courtof Caloocan City, for it to evaluate the evidence presented by the parties and render a decision on theabove-enumerated issues defined during the pre-trial.

No costs.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, andGarcia, JJ., concur.
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[G.R. No. 115181. March 31, 2000]

MARIA SOCORRO AVELINO, peti t ioner, vs. COURT OF APPEALS, ANGELINA AVELINO, SHARONAVELINO, ANTONIO AVELINO, JR., TRACY AVELINO, PATRICK MICHAEL AVELINO and MARKANTHONY AVELINO,respondents.Sdaa miso

Before us is a petition for review on certiorariof the Decision of the Court of Appeals dated February 16,1994 in CA-G.R. SP No. 31574 as well as its Resolution dated April 28, 1994 denying petitioner's Motionfor Reconsideration. The assailed Decision affirmed the Order of the Regional Trial Court of Quezon City,Branch 78, in Sp. Proc. No. Q-91-10441 converting petitioner's petition for the issuance of letters ofadministration to an action for judicial partition.

Petitioner Maria Socorro Avelino is a daughter and compulsory heir of the late Antonio Avelino, Sr., andhis first wife private respondent Angelina Avelino.

The other private respondents, Sharon, Antonio Jr., Tracy, Patrick and Mark Anthony all surnamedAvelino are likewise compulsory heirs of Avelino, Sr. Sharon, an American, is the second wife of Avelino,Sr. The other private respondents are siblings of petitioner Ma. Socorro.

The records reveal that on October 24, 1991, Ma. Socorro filed before the Regional Trial Court of QuezonCity, Branch 78, docketed as SP Proc. No. Q-91-10441, a petition for the issuance of letters ofadministration of the estate of Antonio Avelino, Sr., who died intestate on April 10, 1989. She asked thatshe be appointed the administrator of the estate.

On December 3, 1992, Angelina, and the siblings filed their opposition by filing a motion to convert thesaid judicial proceedings to an action for judicial partition which petitioner duly opposed.

On February 16, 1993, public respondent judge issued the assailed Order which reads:

"Acting on the Motion to Convert Proceedings to Action for Judicial Partition, consideringthat the petitioner is the only heir not amenable to a simple partition, and all the other

compulsory heirs manifested their desire for an expeditious settlement of the estate of thedeceased Antonio Avelino, Sr., the same is granted.

"WHEREFORE, the petition is converted into judicial partition of the estate of deceasedAntonio Avelino, Sr. The parties are directed to submit a complete inventory of all the realand personal properties left by the deceased. Set the hearing of the judicial partition onAPRIL 13, 1993, at 8:30 o'clock in the morning. Notify all the parties and their counsel ofthis assignment.

"SO ORDERED."[1]

On March 17, 1993, petitioner filed a motion for reconsideration which was denied in an Order dated June16, 1993.

On July 23, 1993, Ma. Socorro filed before the Court of Appeals, a petition for certiorari, prohibition,and mandamusalleging grave abuse of discretion amounting to lack or excess of jurisdiction on the partof the trial court, in granting private respondents' motion to convert the judicial proceeding for theissuance of letters of administration to an action for judicial partition. Her petition was docketed as CA-G.R. SP No. 31574.Sdaad

On February 18, 1994, the respondent appellate court rendered the assailed decision, stating that the"petition is DENIED DUE COURSE" and accordingly dismissed."

[2]
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On March 1, 1994, petit

case 1 specpro

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