civil law blog

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"x x x a compulsory counterclaim is auxiliary to the proceeding in the original suit

and derives its jurisdictional support therefrom, inasmuch as it arises out of or is

necessarily connected with the transaction or occurrence that is the subject matter of

the complaint. It follows that if the court does not have jurisdiction to entertain the

main action of the case and dismisses the same, then the compulsory counterclaim,being ancilliary to the main action, must likewise be dismissed since no jurisdiction

remained for any grant of relief under the counterclaim.[15]

"The aforementioned doctrine is in consonance with the primary objective of a

counterclaim which is to avoid and prevent circuity of action by allowing the entire

controversy between the parties to be litigated and finally determined in one action,

wherever this can be done with justice to all parties concerned."[16]

Furthermore, there is no denying the fact that it was private respondent herself who

caused the dismissal of her counterclaim for not only did she fail to object to, but she

actually moved for the dismissal of the complaint.[17] In the words of Justice Abad

Santos,

"x x x The petitioner (private respondent in this case) does not object to the

dismissal of the civil case but nonetheless wants her counterclaim therein to subsist.

Impossible. A person cannot eat his cake and have it at the same time. If the civil

case is dismissed, so also is the counterclaim filed therein."[18]

THIRD DIVISIONG.R. No. 115088. June 20, 1996

INTESTATE ESTATE OF AMADO B. DALISAY, represented by Special Administratrix

PRECIOSA D. TIROL, petitioner, vs. HON. ROMEO D. MARASIGAN and LOURDES

OPPUS, respondents.

Section 3, Rule 17 of the 1997 Rules of Court

provides:

SEC. 3. Dismissal due to fault of plaintiff. – If, for no

justifiable cause, the plaintiff failsto appear on the

date of the presentation of his evidence in chief on the

complaint, orto prosecute his action for an

unreasonable length of time, or to comply with these

Rules or any order of the court, the complaint may be

dismissed upon motion of the defendant or upon the

court’s own motion, without prejudice to the right of



the defendant to prosecute his counterclaim in the

same or in a separate action. This dismissal

shall have the effect of an adjudication upon the

merits, unless otherwise declared by the

court. (Emphases supplied)

A judgment is revived only when the same cannot be enforced by motion, that is,

after five years from the time it becomes final. A revived judgment can be enforced

by motion within five years from its finality. After said five years, how may the revived

judgment be enforced? Appellee contends that by that time ten years or more would

have elapsed since the first judgment becomes final, so that an action to enforcesaid judgment would then be barred by the statute of limitations.

Appellee's theory relates the period of prescription to the date the original judgment

became final. Such a stand is inconsistent with the accepted view that a judgment

reviving a previous one is a new and different judgment. The inconsistency becomes

clearer when we consider that the causes of action in the three cases are different.

In the original case, the action was premised on the unpaid promissory note signed

by Joaquin Bondoc in favor of the Philippine National Bank; in the second case, the

Philippine National Bank's cause of action was the judgment rendered in Civil Case

No. 8040; and in the present case, the basis is the judgment rendered in Civil Case

No. 30663. Parenthetically, even the amounts involved are different.

The source of Section 6 aforecited is Section 447 of the Code of Civil Procedure

which in turn was derived from the Code of Civil Procedure of California. The rule

followed in California in this regard is that a proceeding by separate ordinary action

to revive a judgment is a new action rather than a continuation of the old, and results

in a new judgment constituting a new cause of action, upon which a new period of

limitations begins to run.3

The judgment in Civil Case No. 30663, which provided the cause of action in thecase at bar, was rendered on February 20, 1957 and became final in the same year.

Pursuant to Article 1144(3) of the New Civil Code the action upon such judgment

must be brought within ten years from 1957 or until 1967. The instant case instituted

in the courta quo on June 7, 1962 is well within the prescriptive period.

rtc-special agrarian court must adopt the proper

procedure in determining just compensation

Here, the RTC failed to observe the basic rules of procedure and the fundamentalrequirements in determining just compensation for the property. Firstly, it dispensed

with the hearing and merely ordered the parties to submit their respective

memoranda. Such action is grossly erroneous since the determination of just

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compensation involves the examination of the following factors specified in Section

17 of RA 6657, as amended:

1. the cost of the acquisition of the land;

2. the current value of like properties;

3. its nature, actual use and income;

4. the sworn valuation by the owner, the tax declarations;

5. the assessment made by government assessors;

6. the social and economic benefits contributed by the farmers and the farmworkers

and by the government to the property, and;

7. the non-payment of taxes or loans secured from any government financing

institution on the said land, if any.

Obviously, these factors involve factual matters which can be established only during

a hearing wherein the contending parties present their respective evidence. In fact,

to underscore the intricate nature of determining the valuation of the land, Section 58

of the same law even authorizes the Special Agrarian Courts to appoint

commissioners for such purpose. [Emphasis supplied].

X X X

In determining the valuation of the subject property, the RTC-SAC should consider

the factors provided under Section 1725 of RA 6657 mentioned above. We fully

explained the current doctrine in the proper determination of just compensation in

Lee v. Land Bank of the Philippines26 using the formula provided in AO No. 5-

98.27 Furthermore, upon its own initiative, or at the instance of any of the parties, the

RTC-SAC may appoint one or more commissioners to examine, investigate and

ascertain facts relevant to the dispute pursuant to Section 5828 of RA 6657.

SECOND DIVISION

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[G.R. NO. 160394 : November 27, 2009]

LAND BANK OF THE PHILIPPINES, Petitioner,v. AGUSTIN C.

DIZON, Respondent.

D E C I S I O N

the party who seeks to challenge the foreclosure

proceedings has the burden of evidence to rebut

the sameAt the outset, it bears emphasis that foreclosure proceedings have in their favor the

presumption of regularity and the party who seeks to challenge the proceedings hasthe burden of evidence to rebut the same.15 In this case, respondent failed to prove

that Prudential Bank has not complied with the notice requirement of the law.

Sections 2, 3, and 4 of Act No. 3135 laid down the procedure regarding foreclosure

sale:chanroblesvirtuallawlibrary

Sec. 2. Said sale cannot be made legally outside of the province in which the

property sold is situated; and in case the place within said province in which the sale

is to be made is subject to stipulation, such sale shall be made in said place or in the

municipal building of the municipality in which the property or part thereof is situated.

Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty

days in at least three public places of the municipality or city where the property is

situated, and if such property is worth more than four hundred pesos, such notice

shall also be published once a week for at least three consecutive weeks in a

newspaper of general circulation in the municipality or city.

Sec. 4. The sale shall be made at public auction, between the hours of nine in the

morning and four in the afternoon; and shall be under the direction of the sheriff of

the province, the justice or auxiliary justice of the peace of the municipality in which

such sale has to be made, or a notary public of said municipality, who shall be

entitled to collect a fee of five pesos each day of actual work performed, in addition

to his expenses.

InPhilippine National Bank v. Maraya, Jr.,16 we elucidated that one of the most

important requirements of Act No. 3135 is that the notice of the time and place of

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sale shall be given. If the sheriff acts without notice, or at a time and place other than

that designated in the notice, the sheriff acts without warrant of law.17 In this case,

the property sold in the public auction is located in Quezon City and the foreclosure

sale proceeded as scheduled at 10:00 o’clock in the morning on 26 August 1996 at

the Hall of Justice in Quezon City with Prudential Bank as the winning bidder,

registering the highest bid of P396,000.00.

InCentury Savings Bank v. Samonte18 citing Olizon v. Court of Appeals,

19 the Court

reiterated the purpose of the rule on notice, to wit:chanroblesvirtuallawlibrary

The object of a notice of sale is to inform the public of the nature and condition of the

property to be sold, and of the time, place and terms of the sale. Notices are givenfor the purpose of securing bidders and to prevent a sacrifice of the property. If these

objects are attained, immaterial errors and mistakes will not affect the sufficiency of

the notice; but if mistakes or omissions occur in the notices of sale, which are

calculated to deter or mislead bidders, to depreciate the value of the property, or to

prevent it from bringing a fair price, such mistakes or omissions will be fatal to the

validity of the notice, and also to the sale made pursuant thereto.20

The mistakes and omissions referred to in the above-cited ruling which would

invalidate notice pertain to those which: 1) are calculated to deter or mislead bidders,

2) to depreciate the value of the property, or 3) to prevent it from bringing a fair price.

BANK OF THE PHILIPPINE ISLANDS (FORMERLY PRUDENTIAL

BANK), Petitioner, v. SPOUSES DAVID M. CASTRO AND CONSUELO B.

CASTRO , Respondents,FIRST DIVISION/G.R. No. 195!, "#$%#&'

1, 15

whether to go into declaration of nullity of marriageHere are “steps” or suggestions in deciding whether to step out of the ring or not:

1. Make sure it is the last resort. As stated in aprevious post, love and marriage are

supposed to be forever. Try all options, like counseling, to make it work. If there’s no

progress, weigh your options. On the other side of the scale is the reality that getting

into another relationship or marriage, while the first marital bond is still existing, is a

sure way of courting criminal liability (adultery, concubinage, bigamy). A subsequent

petition for declaration of nullity/annulment of marriage isnot a defense in the

criminal action.

http://civillawabc.blogspot.com/2015/03/whether-to-go-into-declaration-of.html

http://jlp-law.com/blog/divorce-annulment-philippines/

http://jlp-law.com/blog/effect-annulment-criminal-case-bigamy/

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2. Realize that it will cost you. Getting out of marriage is sometimes more expensive

than getting into one. Expenses include the fees for your lawyer or counsel, filing

fees, professional fees for the psychiatrist or psychologist (if the ground

ispsychological incapacity), etc.

3. Discuss the custody of children, visitation rights, property arrangements

andsupport.Custody over children and separation of properties in annulment are

among the most bitter issues in annulment. As much as possible, discuss and agree

on these matters beforehand.

4. Make sure to invoke a valid ground. Marriage is an inviolable social institution and

any doubt is resolved in its favor. Hence, make sure there’s sufficient basis to go

through the procedure discussed below.

The procedure provided under the Rules on Declaration of Absolute Nullity of Void

Marriages and Annulment of Voidable Marriages is discussed below. Please note

that a petition for “annulment” refers to voidable marriages, which are valid until

annulled by the court, while a petition for “declaration of nullity” refers to marriages

that are considered void or inexistent from the very beginning. There are other

differences (e.g., legitimate status of children, property relations between the

spouses, prescription and ratification), but let’s leave those for another day. For

convenience, we shall refer to both petitions as “annulment”.

1. Preparation and filing of the petition. The petition may be filed, at the option of the

spouse who filed it (called the “petitioner”), in the Family Court of the province or city

where the petitioner or the other spouse (called the “respondent”) resides for the last

6 months prior to the date of filing, or in the case of a non-resident respondent,

7where he/she may be found in the Philippines. An Overseas Filipino Worker (OFW)

may file the petition even while abroad. Incidentally, upon filing of the petition or

anytime thereafter, the court may issue provisional and protective orders.

2. Service of Summons. In simplest terms, this is giving notice to the respondent.

Where the respondent cannot be located at the given address or the whereabouts

are unknown and cannot be ascertained by diligent inquiry, service of summons may

be done by publication. This is crucial because the court cannot validly proceed

without service of summons.

3. Answer. The respondent must answer within 15 days from service of summons

(or within 30 days from the last issue of publication in case of service of summons by

publication). Unlike in civil cases, the respondent in annulment proceedings is not

http://jlp-law.com/blog/guidelines-psychological-incapacity-article-36-family-code/

http://jlp-law.com/blog/legal-support-child-ra-9262/

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declared in default if no answer is filed, but the public prosecutor shall be ordered to

investigate whether collusion exists between the parties.

4. Investigation report of public prosecutor. The public prosecutor prepares a report

on whether there is collusion between the parties. If the court is convinced that

collusion exists, it shall dismiss the petition; otherwise, the court shall set the case

for pre-trial conference. TheRules dispensed with the requirement, as provided

inMolina, that the Solicitor General issue a certification stating his reasons for his

agreement or opposition to the petition.

5. Pre-trial conference. During the mandatory pre-trial conference, the court and the

parties deal with certain matters, such as stipulation of facts, for the purpose of

expediting the proceedings. The petition may be dismissed if the petitioner fails to

appear during pre-trial. At this stage, the court may also refer the issues to a

mediator who shall assist the parties in reaching an agreement on matters not

prohibited by law (no compromise allowed in civil status of persons, validity of

marriage or of legal separation, grounds for legal separation, jurisdiction of courts,

and future support and legitime). The court may also require a social worker to

conduct a case study and submit a report at least 3 days before the pre-trial

conference, or at any stage of the case whenever necessary.

6. Trial. This is the stage where the ground for annulment is proved and opposed.

The court may order the exclusion from the courtroom of all persons, including

members of the press, who do not have a direct interest in the case.

7. Decision. After the trial proper, the court renders its decision, which is different

from the Decree of annulment. A decision, whether granting or dismissing the

petition, becomes final upon the expiration of 15 days from notice to the parties.

8. Appeal. The aggrieved party or the Solicitor General may appeal from the

decision within 15 days from notice of denial of the motion for reconsideration or new

trial.

9. Liquidation, partition and distribution, custody, support of common children and

delivery of their presumptive legitimes. These are done upon entry of the judgment

granting the petition.

10. Issuance of Decree of annulment. The court issues the Decree after: (i)

registration of the entry of judgment granting the annulment in the Civil Registry

where the marriage was celebrated and in the Civil Registry of the place where the

court is located; (ii) registration of the approved partition and distribution of the

properties of the spouses in the proper Register of Deeds where the real properties



are located; and (iii) delivery of the children’s presumptive legitimes in cash,

property, or sound securities.

11. Registration of the Decree. The Decree must be registered in the Civil Registry

where the marriage was registered, the Civil Registry of the place where the court is

situated, and in the National Census and Statistics Office

Valerio E. Kalaw vs. Ma. Elena Fernandez (G.R. No.

166357, 14 January 2015)“SC relaxes rules on psychological incapacity as ground to annul marriages,” says

the news title in a popular newspaper. The title naturally got my interest, not because

I am filing a petition for nullity of marriage, but because we are handling petitionsbased on psychological incapacity under under Article 36 of the Family Code. While

the news article does not mention the title of the case, it is clearly abundant that it

refers to the 2015 case ofValerio E. Kalaw vs. Ma. Elena Fernandez (G.R. No.

166357, 14 January 2015). I combed the case to check how the Supreme Court

“relaxed” the rules on petitions for declaration of nullity of marriage based on

psychological incapacity. Unfortunately, I cannot find a confirmation of such

“relaxation” in the rules. To have a fruitful discussion, allow me to humbly point to ten

matters in the case that might be of interest to those who are searching for answers.

1. The rules provided in Molina remains valid

Practitioners refer to the guidelines for the interpretation and application of Article 36

as theMolina Doctrine, considering that the set of guidelines were first compiled in

the 1997 case ofRepublic vs. Court of Appeals and Roridel Olaviano Molina (G.R.

No. 108763). There are eight guidelines, as follows:

(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff.

(2) The root cause of the psychological incapacity must be medically or clinically

identified, alleged in the complaint, sufficiently proven by experts and clearly

explained in the decision.

(3) The incapacity must be proven to be existing at “the time of the celebration” of

the marriage.

(4) Such incapacity must also be shown to be medically or clinically permanent or

incurable.

(5) Such illness must be grave enough to bring about the disability of the party to

assume the essential obligations of marriage.

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(6) The essential marital obligations must be those embraced by Articles 68 up to 71

of the Family Code as regards the husband and wife, as well as Articles 220, 221

and 225 of the same Code in regard to parents and their children.

(7) Interpretations given by the National Appellate Matrimonial Tribunal of the

Catholic Church in the Philippines, while not controlling or decisive, should be given

great respect by our courts.

(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor

General to appear as counsel for the state.

InKalaw, the Supreme Court categorically stated that “we are not suggesting the

abandonment ofMolina in this case.” The set of guidelines inMolina, therefore,

stays. The pronouncement inKalaw that is closest to “relaxation” of the guidelines is

this: “The foregoing guidelines have turned out to be rigid, such that their application

to every instance practically condemned the petitions for declaration of nullity to the

fate of certain rejection.” There is no doubt that theMolina Doctrine is strict, but there

is also no doubt that countless petitions have been granted pursuant to its

guidelines. In other words, there appears to be no “relaxation” of the rules.

2. Expert testimony is decisiveIf there’s anything inKalaw that can be construed as a “relaxation” or departure from

theMolina Doctrine, it’s the rule on expert witnesses. Guideline No. 2

inMolina provides that the “root cause of the psychological incapacity must be

medically or clinically identified, alleged in the complaint, sufficiently proven by

experts and clearly explained in the decision.” However, it has been established in

previous cases that expert testimony is not a requisite in psychological incapacity

cases. In other words, the absence of an expert witness does not automaticallyresult to a denial of the petition. In a number of cases, including the case

ofMendoza vs. Republic (G.R. No. 157649, 12 November 2012), the Supreme Court

had the occasion to state that “the expert opinions of psychologists are not

conditions sine qua non in the granting of petitions for declaration of nullity of

marriage,” although the Court added that “the actual medical examination…was to

be dispensed with only if the totality of evidence presented was enough to support a

finding of his psychological incapacity.”

The requirement of the “totality of evidence,” on the other hand, is not new. It has

been discussed in similar cases prior toKalaw.

Going back to the value of expert testimonies, the Supreme Court inKalaw restated

the rule that “in the task of ascertaining the presence of psychological incapacity as

a ground for the nullity of marriage, the courts, which are concededly not endowed



with expertise in the field of psychology, must of necessity rely on the opinions of

experts in order to inform themselves on the matter, and thus enable themselves to

arrive at an intelligent and judicious judgment.”

Incidentally, in one of our cases, the judge noted that it is for the court — not the

psychologist — to conclude that one or both parties is/are psychologically

incapacitated. Indeed, the existence of psychological incapacity is a legal

conclusion, which is within the exclusive province of the court, but this does not

preclude the expert witness from expressing a similar “opinion,” pointing to the exact

condition or personality disorder of the spouse/s.

3. The psychologist need not personally examine the incapacitated

spouseThe usual objection raised against the testimony of the expert witness, especially

when the services of the expert witness has been obtained by the petitioner-spouse

and there is a conclusion that the respondent-spouse is psychologically

incapacitated, is the usual inability of the psychologist to examine or interview the

respondent spouse. InKalaw, the Supreme Court reiterated the rule that “the lack of

personal examination and interview of the person diagnosed with personality

disorder…did not per se invalidate the findings of the experts.”The opinion of the expert opinion should not be lightly brushed aside in the presence

of the “totality of evidence” in the case. This is the reason why, in the cases we are

handling, we require the client to present other witnesses to corroborate the client’s

testimony on the facts which constitute the basis for the finding of the personality

disorder and, ultimately, psychological incapacity. While clients initially complain

about the presentation of other witnesses, we make it a point to carefully explain that

this is needed to avoid an outright denial of the petition.

4. Article 36 is patterned after Church doctrines

It has been said that the Philippines is the only country in the whole world that does

not have divorce. This, of course, did not deter the Office of the Solicitor General

(OSG) to make, in the language of the Supreme Court, an “exaggeration”

inMolina that Article 36 is the “most liberal divorce procedure in the world.” InKalaw,

the Supreme Court noted that it was sensitive to the “exaggeration” of the OSG

when it enunciated the “rigid” rules inMolina. “The unintended consequences

ofMolina, however, has taken its toll on people who have to live with deviant

behavior, moral insanity and sociopathic personality anomaly, which, like termites,

consume little by little the very foundation of their families, our basic social

institutions. Far from what was intended by the Court,Molina has become a strait-



jacket, forcing all sizes to fit into and be bound by it. Wittingly or unwittingly, the

Court, in conveniently applying Molina, has allowed diagnosed sociopaths,

schizophrenics, nymphomaniacs, narcissists and the like, to continuously debase

and pervert the sanctity of marriage. Ironically, the Roman Rota has annulled

marriages on account of the personality disorders of the said individuals.”

Article 36 is patterned after Church rules. As noted inMolina, “Since the purpose of

including such provision in our Family Code is to harmonize our civil laws with the

religious faith of our people, it stands to reason that to achieve such harmonization,

great persuasive weight should be given to decisions of such appellate tribunal.

Ideally — subject to our law on evidence — what is decreed as canonically invalid

should also be decreed civilly void.”

5. Article 36 protects the family

The usual argument against Article 36, providing for psychological incapacity as a

ground to declare the nullity of marriage, is that it weakens the family. On the

contrary, as reiterated by the Supreme Court inKalaw, Article 36 protects the

institution of marriage. According to the Supreme Court, “the fulfillment of the

constitutional mandate for the State to protect marriage as an inviolable social

institution only relates to a valid marriage. No protection can be accorded to amarriage that is null and void ab initio, because such a marriage has no legal

existence.”

“Indeed, Article 36 of the Family Code, in classifying marriages contracted by a

psychologically incapacitated person as a nullity, should be deemed as an

implement of this constitutional protection of marriage. Given the avowed State

interest in promoting marriage as the foundation of the family, which in turn serves

as the foundation of the nation, there is a corresponding interest for the State to

defend against marriages ill-equipped to promote family life. Void ab initio marriages

under Article 36 do not further the initiatives of the State concerning marriage and

family, as they promote wedlock among persons who, for reasons independent of

their will, are not capacitated to understand or comply with the essential obligations

of marriage.”

[Part 1 of 2]

Ademption, or ademption by extinction, i s a common lawdoctrine used in

thelawofwillsto determine what happens when property bequeathed under a will is

no longer in the testator'sestateat the time of the testator's death.[1]

For a devise

(bequest) of a specific item of property (aspecific gift), such property is

considered adeemed , and the gift fails. For example, if a will bequeathed the

testator's car to a specific beneficiary, but the testator owned no car at the time of his

http://en.wikipedia.org/wiki/Common_law

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or her death, the gift would be adeemed and the aforementioned beneficiary would

receive no gift at all.

General bequests or general gifts gifts of cash amounts are never adeemed. !f

the cash in the testator's estate is not sufficient to satisfy the gift, then other assets

in theresiduary estatewill need to be sold to raise the necessary cash."ome property lies in a #gray# area, in which the testator's specific intent must be

determined. For example, where the testator bequeathes #$%% shares of stoc&# in a

company, this may be read as a general bequest (that the estate should purchase

and convey the particular stoc&s to the beneficiary), or it may be read as a specific

bequest, particularly if the testator used a possessive (#my $%% shares#). "uch a gift

is deemed to be a demonstrative gift. "uch demonstrative gifts are deemed to be a

hybrid of both specific and general gifts. !f one were to bequeath #$%% shares of

stoc&,# most states would deem that to be a demonstrative gift. he resultant gift to

the heir receiving #$%% shares,# would be the date of death value of $%% shares of

that particular stoc&.

demption may be waived if the property leaves the estate after the testator has

been declared incompetent. Furthermore, in some cases the beneficiary will be

entitled to the proceeds from the sale of property, or to theinsurancepayout for

property that is lost or destroyed.

o avoid confusion as to what may or may not be adeemed, sometimes the phrase

#if owned by me at my death# is placed into the articles of a will in which property is

being bequeathed. s for the sale of land under an executory contract, traditionalcase lawagrees that

ademption occurs upon the death of the testator and that the proceeds of sale, when

the closing occurs, should not pass to the specific devisee of the property. owever,

the more modern view and the Uniform Probate Code, which has been adopted by

some states, disagrees. hese *urisdictions find that when property sub*ect to

specific devise is placed under contract of sale before the decedent's death, the

proceeds of the sale will pass to the specific devisee.

corre cases

G.R. No. 142403 March 26, 2003

ALEJANDRO GABRIEL and ALFREDO GABRIEL, pe!!oner",

#".

$%O&$E$ %ABLO MABAN'A and E$(OLA$'I(A (OLOBONG, DE)ELO%MEN'

BAN* OF '+E %+ILI%%INE$ I"a-ea Branch/ and ENAIDA 'ANREE$,

re"ponden".

FA('$

http://en.wikipedia.org/wiki/Residuary_estate

http://en.wikipedia.org/w/index.php?title=Demonstrative_gift&action=edit&redlink=1

http://en.wikipedia.org/wiki/Insurance

http://en.wikipedia.org/wiki/Executory_contract

http://en.wikipedia.org/wiki/Case_law

http://en.wikipedia.org/wiki/Uniform_Probate_Code

http://civillawabc.blogspot.com/2014/10/corre-cases.html

http://en.wikipedia.org/wiki/Residuary_estate

http://en.wikipedia.org/w/index.php?title=Demonstrative_gift&action=edit&redlink=1

http://en.wikipedia.org/wiki/Insurance

http://en.wikipedia.org/wiki/Executory_contract

http://en.wikipedia.org/wiki/Case_law

http://en.wikipedia.org/wiki/Uniform_Probate_Code

http://civillawabc.blogspot.com/2014/10/corre-cases.html



On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as

collateral for a P1,!!! loan" #n 19$!, the% sold the lots to &usana &oriano with the

right to repurchase the propert% within 2 %ears" 'he% failed to do repurchase" #n

19$, the% con(inced petitioner )le*andro +abriel to purchase the lot from &oriano

as a result, DBP had to restructure the loan maing +abriel as the mortgagor" #n

19$2 howe(er, one lot was sold to -enaida 'an./e%es b% the spouses Mabanta who

in turn 0led an inter(ention to the case after not being a part% in the instant case"

)s a result, the petitioners 0led for damages, and speci0c performance which the

trial court ruled in their fa(or holding that the sale between the spouses Mabanta

and 'an./e%es null and (oid" On appeal, the ) modi0ed the trial courts decision

holding that the second sale was indeed (alid"

I$$&E

3hether or not the second sale in 19$2 to 'an./e%es is (alid"

+ELD

)rticle 15 of the i(il ode pro(ides that should immo(able propert% be sold to

di4erent (endees, the ownership shall belong to the 0rst person in good faith to

record it in the registr% of propert%" nfortunatel%, the registration made b% -enaida

'an./e%es of her deed of sale was not in good faith, and for this reason in

accordance with the same )rticle 15, the land shall pertain to the person who in

good faith was 0rst in possession" 'here is no 6uestion that it is the +abriels who

are in possession of the land"

G.R. No. 3432 Ma5 20, 11

RADIO7EAL'+ FINAN(E (OM%AN, pe!!oner,

#".

MAN&ELI'O $. %ALILEO, re"ponden.

FA('$

#n )pril 197!, defendant spouses nri6ue astro and 8erminio /" astro spouse

astro: sold to herein respondent Manuelito Palileo a parcel of unregistered coconut

land in &urigao del ;orte" 'he sale is e(idenced b% a notari<ed Deed of )bsolute

&ale, but the deed was not registered in the /egistr% of Propert% for unregistered



lands in the pro(ince of &urigao del ;orte" &ince the e=ecution of the deed of sale,

Palileo who was then emplo%ed in >ianga, &urigao del &ur, e=ercised acts of

ownership o(er the land through his mother /afaela Palileo, as administratri= or

o(erseer" Manuelito Palileo has continuousl% paid the real estate ta=es on said land

from 1971 until the present"

#n ;o(ember 197?, the @# of Manila rendered a *udgment was rendered against

defendant nri6ue '" astro to pa% herein petitioner /adiowealth @inance ompan%

/adiowealth:, the sum of P22,A5!"A5 with interest rate of 1? per annum from

;o(ember 2, 1975 until full% paid, and upon the 0nalit% of the *udgment, a writ of

e=ecution was issued" 'he Pro(incial &heri4 Marietta " (iota, through defendant

Deput% Pro(incial &heri4 >eopoldo /isma, le(ied upon and 0nall% sold at public

auction the sub*ect land that defendant nri6ue astro had sold to Palileo in 197!" 'he said Pro(incial &heri4 e=ecuted a certi0cate of sale was b% the in fa(or of

/adiowealth as the onl% bidder, and upon e=piration of the redemption period, she

also e=ecuted a deed of 0nal sale" Both documents were registered with the

/egistr% of Deeds"

>earning of what happened to the land, Palileo 0led an action for reco(er% of the

sub*ect propert%" 'he court a 6uo rendered a decision in fa(or of Palileo, which the

ourt of )ppeals aCrmed"

I$$&E

3ho is the rightful owner of the sub*ect propert%

(O&R' R&LING

'he &upreme ourt liewise aCrmed the appellate courts decision on this case"

'here is no doubt that had the sub*ect propert% been a registered land, this case

would ha(e been decided in fa(or of /adiowealth since it was the compan% that had

its claim 0rst recorded in the /egistr% of Deeds for it is the act of registration that

operates to con(e% and a4ect registered land" 'herefore, a bona0de purchaser of a

registered land at an e=ecution sale ac6uires a good title as against a prior

transferee, if such transfer was unrecorded"

8owe(er, a di4erent set of rules applies in the case at bar which deals with a parcelof unregistered land" nder )ct ;o" AA, registration of instruments a4ecting

unregistered lands is Ewithout pre*udice to a third part% with a better right"E 'he

afore 6uoted phrase has been held b% the &upreme ourt to mean that the mere

registration of a sale in oneFs fa(or does not gi(e him an% right o(er the land if the

(endor was not an%more the owner of the land ha(ing pre(iousl% sold the same to



somebod% else e(en if the earlier sale was unrecorded" )ppl%ing this principle, the

ourt of )ppeals correctl% held that the e=ecution sale of the unregistered land in

fa(or of petitioner is of no e4ect because the land no longer belonged to the

*udgment debtor as of the time of the said e=ecution sale"

G.R. No. 180409 Fe-r:ar5 2, 2010

RAM&NDO $. DE LEON, %e!!oner,

#".

BENI'A '. ONG. Re"ponden.

Fac"

On March 1!, 199A, /a%mundo &" De >eon petitioner: sold A parcels of land to

Benita '" Ong respondent:" 'he said properties were mortgaged to a 0nancial

institutionG /eal &a(ings H >oan )ssociation #nc" /&>)#:" 'he parties then e=ecuted

a notari<ed deed of absolute sale with assumption of mortgage" )s indicated in the

deed of mortgage, the parties stipulated that the petitioner de leon: shall e=ecute a

deed of assumption of mortgage in fa(or of Ong respondent: after full pa%ment of

the P15,!!!"!! 'he% also agreed that the respondent Ong: shall assume the

mortgage" 'he respondent then subse6uentl% ga(e petitioner P15,!!!"!! as

partial pa%ment" On the other hand, de leon handed the e%s to Ong and de leon

wrote a letter to inform /&>)# that the mortgage will be assumed b% Ong"

'hereafter, the respondent too repairs and made impro(ements in the properties"

&ubse6uentl%, respondent learned that the same properties were sold to a certain

Iiloria after March 1!, 199A and changed the locs, rendering the e%s gi(en to her

useless" /espondent proceeded to /&>)# but she was informed that the mortgage

has been full% paid and that the titles ha(e been gi(en to the said person"

/espondent then 0led a complaint for speci0c performance and declaration of

nullit% of the second sale and damages" 'he petitioner contended that respondent

does not ha(e a cause of action against him because the sale was sub*ect to a

condition which re6uires the appro(al of /&>)# of the mortgage" Petitioner reiterated

that the% onl% entered into a contract to sell" 'he /' dismissed the case" On

appeal, the ) upheld the sale to respondent and nulli0ed the sale to Iiloria"

Petitioner mo(ed for reconsideration to the &"

I"":e

3hether the parties entered into a contract of sale or a contract to sell



+ed

#n a contract of sale, the seller con(e%s ownership of the propert% to the bu%er upon

the perfection of the contract" 'he non.pa%ment of the price is a negati(e resolutor%

condition" ontract to sell is sub*ect to a positi(e suspensi(e condition" 'he bu%er

does not ac6uire ownership of the propert% until he full% pa%s the purchase price" #n

the present case, the deed e=ecuted b% the parties did not show that the owner

intends to reser(e ownership of the properties" 'he terms and conditions a4ected

onl% the manner of pa%ment and not the immediate transfer of ownership" #t was

clear that the owner intended a sale because he un6uali0edl% deli(ered and

transferred ownership of the properties to the respondent"

(RB #". (A and +EIR$ OF DELA (R&

G.R. No. 132161

Jan:ar5 18, 2009

FA('$ 'he Madrid brothers were the registered owners of >ot ) situated in

#sabela"

&aid lot was subdi(ided into se(eral lots" /i<al Madrid sold part of his share

identi0ed lot ).7 to +amiao and Da%ag b% (irtue of a Deed of Sale, to which his

brothers o4ered no ob*ection as e(idenced b% their Joint Adavit "'he deed of sale

was not registered with the O/D of #sabela" 8owe(er, +amiao and Da%ag declared

the propert% in their names on a 'a= Declaration" +amiao and Da%ag sold the

sub*ect southern half of lot to 'eodoro dela ru<, and the northern half to

8ernande<" 'hereupon, 'eodoro dela ru< and 8ernande< too possession of and

culti(ated the portions of the propert% respecti(el% sold to them >ater /estituto

8ernande< donated the northern half to his daughter" 'he children of 'eodoro dela

ru< continued possession of the southern half after their fathers death": #n a Deed

of Sale the Madrid brothers con(e%ed all their rights and interests o(er lot ).7 to

Mar6ue< which the former con0rmed" 'he deed of sale was registered with the O/D

of #sabela" &ubse6uentl%, Mar6ue< subdi(ided lot ).7 into eight $: lots" On the

same date, Mar6ue< and his spouse, Mercedita Mariana, mortgaged lots to the

onsolidated /ural Ban, #nc" of aga%an Ialle% hereafter, /B: to secure a loan"

'hese deeds of real estate mortgage were registered with the O/D" )s Mar6ue<

defaulted in the pa%ment of his loan, /B caused the foreclosure of the mortgages

in its fa(or and the lots were sold to it as the highest bidder" 'he 8eirs.nowrespondents 0led a case for recon(e%ance and damages for the southern portion of

>ot ;o" 7!A?.) hereafter, the sub*ect propert%: against Mar6ue< and /B" 'he /'

handed down a decision in fa(or of Mar6ue<" 'he 8eirs interposed an appeal with

the ), which upheld the claim of the 8eirs" 8ence, the instant /B petition"

I$$&E 3O; )rt" 15 of the i(il ode double sale: applicable in this case



+ELD ;O"

'he petition is denied, and the decision as modi0ed is aCrmed" >ie the lower

court, the appellate court resol(ed the present contro(ers% b% appl%ing the rule on

double sale pro(ided in )rticle 15 of the i(il ode" 'he%, howe(er, arri(ed at

di4erent conclusions" 'he /' made /B and the other defendants win, while theourt of )ppeals decided the case in fa(or of the 8eirs"

)rticle 15 of the i(il ode reads, thusJ

)/'" 15" #f the same thing should ha(e been sold to di4erent (endees, the

ownership shall be transferred to the person who ma% ha(e 0rst taen possession

thereof in good faith, if it should be mo(able propert%" &hould it be immo(able

propert%, the ownership shall belong to the person ac6uiring it who in good faith

0rst recorded it in the /egistr% of Propert%"

&hould there be no inscription, the ownership shall pertain to the person who in

good faith was 0rst in possessionG and, in the absence thereof, to the person who

presents the oldest title, pro(ided there is good faith" 'he pro(ision is not applicable

in the present case" #t contemplates a case of double or multiple sales b% a single

(endor" #t cannot be in(oed where the two di4erent contracts of sale are made b%

two di4erent persons, one of them not being the owner of the propert% sold" )nd

e(en if the sale was made b% the same person, if the second sale was made when

such person was no longer the owner of the propert%, because it had been ac6uired

b% the 0rst purchaser in full dominion, the second purchaser cannot ac6uire an%

right" #n the case at bar, the sub*ect propert% was not transferred to se(eral

purchasers b% a single (endor" #n the 0rst deed of sale, the (endors were +amiao

and Da%ag whose right to the sub*ect propert% originated from their ac6uisitionthereof from /i<al Madrid with the conformit% of all the other Madrid brothers" On

the other hand, the (endors in the other or later deed were the Madrid brothers but

at that time the% were no longer the owners since the% had long before disposed of

the propert% in fa(or of +amiao and Da%ag"

#n a situation where not all the re6uisites are present which would warrant the

application of )rt" 15, the principle of prior tempore, potior jure or simpl% Khe

who is 0rst in time is preferred in right, should appl%"L 'he onl% essential re6uisite of

this rule is priorit% in timeG in other words, the onl% one who can in(oe this is the

0rst (endee" ndisputedl%, he is a purchaser in good faith because at the time he

bought the real propert%, there was still no sale to a second (endee" #n the instantcase, the sale to the 8eirs b% +amiao and Da%ag, who 0rst bought it from /i<al

Madrid, was anterior to the sale b% the Madrid brothers to Mar6ue<" 'he 8eirs also

had possessed the sub*ect propert% 0rst in time" 'hus, appl%ing the principle, the

8eirs, without a scintilla of doubt, ha(e a superior right to the sub*ect propert%"

Moreo(er, it is an established principle that no one can gi(e what one does not

ha(enemo dat quod non habet " )ccordingl%, one can sell onl% what one owns or is

authori<ed to sell, and the bu%er can ac6uire no more than what the seller can

transfer legall%"5A #n this case, since the Madrid brothers were no longer the owners

of the sub*ect propert% at the time of the sale to Mar6ue<, the latter did not ac6uire

an% right to it"

Balatbat (" )

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http://www.lawphil.net/judjuris/juri2005/jan2005/gr_132161_2005.html#fnt53



Fac"

parcel of land was acquired by plaintiff urelio +oque and aria esina during their con*ugal

union. aria died on ugust -, /011. 2n 3une /$, /044, urelio filed a case for partition. he

trial court held that urelio is entitled to the 5 portion at his share in the con*ugal property, and

/6$ of the other half which formed part of aria7s estate, divided equally among him at his 8

children. he decision having become final and executory, the +egister of 9eeds of anila

issued a transfer certificate of title on 2ctober $, /040 according to the ruling of the court. 2n

pril /, /0%, urelio sold his 16/% share to spouses urora ua:on+epuyan and 3ose

+epuyan, as evidenced by a deed of absolute sale. 2n 3une -/, /0%, urora caused the

annotation of her affidavit of adverse claim. 2n ugust -%, /0%, urelio filed a complaint for

rescission of contract grounded on the buyers7 failure to pay the balance of the purchase price.

2n February 8, /0-, another deed of absolute sale was executed between urelio and his

children, and herein petitioner ;lara <alatbat, involving the entire lot. <alatbat filed a motion for

the issuance of writ of possession, which was granted by the court on "eptember -%, /0-,

sub*ect to valid rights and interests of third persons. <alatbat filed a motion to intervene in the

rescission case, but did not file her complaint in intervention. he court ruled that the sale

between urelio and urora is valid.

Issues:(/) =hether the alleged sale to private respondents was merely executory(-) =hether

there was double sale(>) =hether petitioner is a buyer in good faith and for value

Held:(/) ;ontrary to petitioner's contention that the sale dated pril /, /0% in favor of private

respondents +epuyan was merely executory for the reason that there was no delivery of the

sub*ect property and that consideration6price was not fully paid, we find the sale as

consummated, hence, valid and enforceable. he ;ourt dismissed vendor's urelio +oque

complaint for rescission of the deed of sale and declared that the "ale dated pril /, /0%, as

valid and enforceable. ?o appeal having been made, the decision became final and

executory.he execution of the public instrument, without actual delivery of the thing, transfers

the ownership from the vendor to the vendee, who may thereafter exercise the rights of an

owner over the same. !n the instant case, vendor +oque delivered the owner's certificate of title

to herein private respondent. he provision of rticle />$ on the necessity of a publicdocument is only for convenience, not for validity or enforceability. !t is not a requirement for the

validity of a contract of sale of a parcel of land that this be embodied in a public instrument.

contract of sale being consensual, it is perfected by the mere consent of the parties. 9elivery of

the thing bought or payment of the price is not necessary for the perfection of the contract@ and

failure of the vendee to pay the price after the execution of the contract does not ma&e the sale

null and void for lac& of consideration but results at most in default on the part of the vendee, for

which the vendor may exercise his legal remedies.

(-) rticle /$88 of the ;ivil ;ode provides that in case of double sale of an immovable property,

ownership shall be transferred (/) to the person acquiring it who in good faith first recorded it in

the +egistry of Aroperty@ (-) in default thereof, to the person who in good faith was first in

possession@ and (>) in default thereof, to the person who presents the oldest title, provided there

is good faith. !n the case at bar, vendor urelio +oque sold 16/% portion of his share to private



respondents +epuyan on pril /, /0%. "ubsequently, the same lot was sold again by vendor

urelio +oque (16/%) and his children (86/%), represented by the ;ler& of ;ourt pursuant to

"ection /%, +ule >0 of the +ules of ;ourt, on February 8, /0-. Bndoubtedly, this is a case of

double sale contemplated under rticle /$88 of the ?ew ;ivil ;ode. Cvidently, private

respondents +epuyan's caused the annotation of an adverse claim on the title of the sub*ect

property on 3uly -/, /0%. he annotation of the adverse claim in the +egistry of Aroperty is

sufficient compliance as mandated by law and serves notice to the whole world. 2n the other

hand, petitioner filed a notice of lis pendens only on February -, /0-. ccordingly, private

respondents who first caused the annotation of the adverse claim in good faith shall have a

better right over herein petitioner. s between two purchasers, the one who has registered the

sale in his favor, has a preferred right over the other who has not registered his title even if the

latter is in actual possession of the immovable property. Further, even in default of the first

registrant or first in possession, private respondents have presented the oldest title. hus,

private respondents who acquired the sub*ect property in good faith and for valuable

consideration established a superior right as against the petitioner.

(>) Aetitioner cannot be considered as a buyer in good faith. !f petitioner did investigate before

buying the land on February 8, /0-, she should have &nown that there was a pending case

and an annotation of adverse claim was made in the title of the property before the +egister of

9eeds and she could have discovered that the sub*ect property was already sold to the private

respondents. !t is incumbent upon the vendee of the property to as& for the delivery of the

owner's duplicate copy of the title from the vendor. 2ne who purchases real estate with

&nowledge of a defect or lac& of title in his vendor cannot claim that he has acquired title thereto

in good faith as against the true owner of the land or of an interest therein@ and the same rule

must be applied to one who has &nowledge of facts which should have put him upon such

inquiry and investigation as might be necessary to acquaint him with the defects in the title of his

vendor. Good faith, or the want of it is not a visible, tangible fact that can be seen or touched,

but rather a state or condition of mind which can only be *udged of by actual or fancied to&ens or

signs.

ANAMA )$. (O&R' OF A%%EAL$

+/" ;o" 12$?!9, Nanuar% 29, 2!!

Fac"

'he propert% was pre(iousl% owned b% Douglas )namas parents, whomortgaged it to Philippine &a(ings Ban and later was foreclosed" Douglas and theP&Ban entered into an agreement denominated as a ontract to Bu% whereb% theban agreed to sell to Douglas the said land with all the impro(ements thereon" 'heontract to Bu% pro(ides that )nama shall purchase the propert% of a certainamount and shall pa% to the P&BanG it also pro(ides that )nama shall appl% withthe ban for a loan, the proceeds of which answer for the balance of the purchasepriceG should the petitioner fail to compl% with an% of the terms of contract, all



amounts paid are forfeited in fa(or of P&Ban, the latter ha(ing the option either todemand full pa%ment of total price or to rescind the contract" )nama was able topa% the 0rst and second installmentsG howe(er, he failed to pa% the thirdinstallment when it became due" 'here were se(eral transactions between them tosettle the amount due" But later, the ban e=ecuted an )Cda(it of ancellationrescinding the contract, and forfeited the pa%ments made b% )nama which were

applied as rentals of the use of the propert%" )nama was then ad(ised to (acate thepropert% despite his opposition to the rescission of the ontract to Bu%" 'he bansold the propert% to spouses o, in whose fa(or '' was issued" )nama then 0led acase for Declaration of ;ullit% of Deed of &ale, ancellation of '',and &peci0cPerformance with Damages"

I"":e

3hether the rescission of the ontract to Bu% was (alid"

+ed

&ince )nama failed to pa% the third installment, P&Ban was entitled to

rescind the ontract to Bu%" 'he contract pro(ides the Ban two options in the e(ent

that petitioner fails to pa% an% of the installments" 'his was either 1: to rescind the

contract outright and forfeit all amounts paid b% the petitioner, or 2: to demand the

satisfaction of the contract and insist on the full pa%ment of the total price" )fter

petitioner repeatedl% failed to pa% the third installment, the Ban chose to e=ercise

the 0rst option"

'he ontract to Bu% is actuall% a contract to sell whereb% the (endor reser(es

ownership of the propert% and is not to pass until full pa%ment" &uch pa%ment is a

positi(e suspensi(e condition, the failure of which is not a breach but simpl% an

e(ent that pre(ents the obligation of the (endor to con(e% title from ac6uiring

binding force" &ince ownership of the sub*ect propert% was not pass to petitioner

until full pa%ment of the purchase price, his failure to pa% on the date stipulated, or

in the e=tension granted, pre(ented the obligation for the Ban to pass title of the

propert% to )nama" 'he ban could (alidl% sell the propert% to the spouses o, the

right of the ban to sell the propert% being une6ui(ocal"

corre's cases

I$AIA$ F. FABRIGA$ AND MAR(ELINA R. FABRIGA$

)$. $AN FRAN(I$(O DEL MON'E, IN(.

+"/" ;o" 152A?, ;o(ember 25, 2!!5

@)'&J

&pouses @abrigaspetitioner: and respondent &an francisco Del Monte, #nc"

Del Monte: entered into an agreement, denominated as ontract to &ell

;o" 2$2.I, whereb% the latter agreed to sell to &pouses @abrigas a parcel

of residential land" 'he said lot was worth P1!9,2!!"!! and it was

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registered in the name of respondent Del Monte" 'he agreement

stipulated that &pouses @abrigas shall pa% PA!,!!!"!! as downpa%ment

and the balance within ten %ears in monthl% successi(e installments of

P1,2$5"?9" )fter pa%ing PA!,!!!"!!, &pouses @abrigas too possession of

the propert% but failed to mae an% installment pa%ments on the balanceof the purchase price" Despite the demand letter made b% Del Monte and

the grace period gi(en still the said &pouses did not compl% with their

obligations"

On Nanuar% 21, 19$5, petitioner Marcelina and Del Monte entered into

another agreement denominated as ontract to &ell ;o" 291.I, co(ering

the same propert% but under restructed terms of pa%ment" nder the

second contract, the parties agreed on a new purchase price of P1A1,?2"5$, the amount of P2?,A2$"52 as downpa%ment and the balance

to be paid in monthl% installments of P2,9$"?! each" )fter the said deal,

the petitioner made some delin6uent installments pa%ing less than the

stated amount, to which Del Monte made a demand letter to the

petitioners" )nd this time the% ordered the cancellation of the ontract to

&ell ;o" 291.I

#&&J

3hether or not the ontract to &ell ;o" 291.I was (alid"

8>DJ

'he ourt 6uotes with appro(al the following factual obser(ations of the

trial court, which cannot be disturbed in this case, to witJ'he ourt notes

that defendant, Marcelina @abrigas, although she had to sign contract ;o"291.I, to a(oid forfeiture of her downpa%ment, and her other monthl%

amorti<ations, was entirel% free to refuse to accept the new contract"

'here was no clear case of intimidation or threat on the part of plainti4 in

o4ering the new contract to her" )t most, since she was of suCcient

intelligence to discern the agreement she is entering into, her signing

of ontract ;o" 291.I is taen to be (alid and binding" 'he fact that she

has paid monthl% amorti<ations subse6uent to the e=ecution

of ontract to &ell ;o" 291.I, is an indication that she had recogni<ed

the (alidit% of such contract" " " "

#n sum, Contract to Sell No. 2491- is (alid and binding" 'here is nothing

to pre(ent respondent Del Monte from enforcing its contractual



stipulations and pursuing the proper court action to hold petitioners liable

for their breach thereof"

MRNA RAMO$ )$. $&$ANA $. $ARAO AND JONA$ RAMO$+"/" ;O"1975?, @ebruar% 11, 2!!5

@)'&J

On @ebruar% 21, 1991, &pouses Nonas /amos and M%rna /amos e=ecuted

a contract o(er their con*ugal house and lot in fa(or of &usana &" &araofor and in consideration of P1,A1!,A!" ntitled KDD O@ &)>

;D/ P)'O D /'/O,L the contract,inter alia, granted the /amos

spouses the option to repurchase the propert% within si= months from

@ebruar% 21, 1991, for P1,A1!,A! plus an interest of "5 percent a

month" #t was further agreed that should the spouses fail to pa% the

monthl% interest or to e=ercise the right to repurchase within the

stipulated period, the con(e%ance would be deemed an absolute sale"On

Nul% A!, 1991, M%rna /amos tendered to &arao the amount of

P1,?AA,!A"2! in the form of two managers checs, which the latterrefused to accept for being allegedl% insuCcient"

#&&J 3hether or not the sub*ect Deed of &ale under Pacto de /etro was,

and is in realit% and under the law an e6uitable mortgage"

8>DJ 'he pi(otal issue in the instant case is whether the parties

intended the contract to be a bona 0de !acto de retro sale or an e6uitable

mortgage" #n a !acto de retro, ownership of the propert% sold is

immediatel% transferred to the (endee a retro, sub*ect onl% to the

repurchase b% the (endor a retro within the stipulated period" 'he

(endor a retro"# failure to e=ercise the right of repurchase within the

agreed time (ests upon the (endee a retro, b% operation of law, absolute

title to the propert%" &uch title is not impaired e(en if the

(endee a retro fails to consolidate title under )rticle 1?!7 of the i(il

ode" On the other hand, an e6uitable mortgage is a contract that

..although lacing the formalit%, the form or words, or other re6uisites

demanded b% a statute .. ne(ertheless re(eals the intention of the parties

to burden a piece or pieces of real propert% as securit% for a debt" 'he

essential re6uisites of such a contract are as followsJ 1: the parties enter

into what appears to be a contract of sale, but 2: their intention is to

secure an e=isting debt b% wa% of a mortgage" 'he nonpa%ment of the



debt when due gi(es the mortgagee the right to foreclose the mortgage,

sell the propert%, and appl% the proceeds of the sale to the satisfaction of

the loan obligation" 'here is no single conclusi(e test to determine

whether a deed absolute on its face is reall% a simple loan

accommodation secured b% a mortgage" 8owe(er, the law enumeratesse(eral instances that show when a contract is presumed to be an

e6uitable mortgage, as followsJ

)rticle 1?!2" 'he contract shall be presumed to be an e6uitable

mortgage, in an% of the following casesJ

1: 3hen the price of a sale with right to repurchase is unusuall%

inade6uateG2: 3hen the (endor remains in possession as lessee or

otherwiseGA: 3hen upon or after the e=piration of the right to repurchase

another instrument e=tending the period of redemption or granting a new

period is e=ecutedG: 3hen the purchaser retains for himself a part of thepurchase priceG5: 3hen the (endor binds himself to pa% the ta=es on the

thing soldG?: #n an% other case where it ma% be fairl% inferred that the

real intention of the parties is that the transaction shall secure the

pa%ment of a debt or the performance of an% other obligation"

RIALINO, $&B$'I'&'ED B +I$ +EIR$, JO$EFINA, ROLANDO AND

FERNANDO, ERNE$'O, LEONORA, BIBIANO, JR., LIBRADO AND

ENRI;&E'A, ALL $&RNAMED OE$MER )$. %ARAI$O DE)ELO%MEN'

(OR%ORA'ION

+"/" ;O" 1579A, @ebruar% !5, 2!!7

@)'&J

Petitioners /i<alino, rnesto, >eonora, Bibiano, Nr", >ibrado, and nri6uita,

all surnamed Oesmer, together with )dolfo Oesmer and Nesus Oesmer,

are brothers and sisters, and the co.owners of undi(ided shares of two

parcel of land" /espondent Paraiso De(elopment orporation bought from

petitioners their respecti(e share of the lot e=cept the )dolfo and Nesus

share" )fter the said meeting, a ontract to &ell was created between the

parties, on which the petitioners aCrming their signatures in the said

contract"

'hen the petitioners withdrew from the said contract and as for the

rescission to which the% allege that the% ne(er sign the contract, theagent has no authorit% from the petitioners, that said petitioner was

illiterate to sign the contract, etc"

#&&J



3hether or not there was a perfected contract between petitioners and

respondents"

8>DJ

#t is well.settled that contracts are perfected b% mere consent, upon the

acceptance b% the o4eree of the o4er made b% the o4eror" @rom that

moment, the parties are bound not onl% to the ful0llment of what has

been e=pressl% stipulated but also to all the conse6uences which,

according to their nature, ma% be in eeping with good faith, usage and

law" 'o produce a contract, the acceptance must not 6ualif% the terms of

the o4er" 8owe(er, the acceptance ma% be e=press or implied" @or

a contract to arise, the acceptance must be made nown to the o4eror"

)ccordingl%, the acceptance can be withdrawn or re(oed before it is

made nown to the o4eror" #n the case at bar, the ontract to &ell was

perfected when the petitioners consented to the sale to the respondent of

their shares in the sub*ect parcels of land b% aC=ing their signatures on

the said contract" &uch signatures show their acceptance of what has

been stipulated in the ontract to &ell and such acceptance was made

nown to respondent corporation when the duplicate cop% of

the ontract to &ell was returned to the latter bearing petitionersF

signatures"

(ARLO$ B. DE G&MAN )$. 'OO'A (&BAO, IN(.

+"/" ;O" 11$!, ;o(ember 29, 2!!?

@)'&J

On ;o(ember 27, 1997, petitioner purchased from respondent a brand

new white 'o%ota 8i.>u= 2" && double cab motor (ehicle, 199? model, in

the amount of P5!$,!!!" Petitioner made a down pa%ment of P152,!!,

lea(ing a balance of PA55,?!! which was pa%able in A? months with 5

interest" 'he (ehicle was deli(ered to petitioner two da%s later" On

October 1$, 199$, petitioner demanded the replacement of the engine of

the (ehicle because it de(eloped a crac after tra(ersing Marcos 8ighwa%

during a hea(% rain" Petitioner asserted that respondent should replace

the engine with a new one based on an implied warrant%" /espondent

countered that the alleged damage on the engine was not co(ered b% a

warrant%"



#&&J

3hether or not there was an implied warrant%"

@)'&J

nder )rticle 1599 of the i(il ode, once an e=press warrant% is

breached, the bu%er can accept or eep the goods and maintain an action

against the seller for damages" #n the absence of an e=isting e=press

warrant% on the part of the respondent, as in this case, the allegations in

petitionerFs complaint for damages were clearl% anchored on the

enforcement of an implied warrant% against hidden defects, i.e., that the

engine of the (ehicle which respondent had sold to him was not defecti(e"

B% 0ling this case, petitioner wants to hold respondent responsible for

breach of implied warrant% for ha(ing sold a (ehicle with defecti(e

engine" &uch being the case, petitioner should ha(e e=ercised this right

within si= months from the deli(er% of the thing sold" 7 &ince petitioner

0led the complaint on )pril 2!, 1999, or more than nineteen months

counted from ;o(ember 29, 1997 the date of the deli(er% of the motor

(ehicle:, his cause of action had become time.barred"

Petitioner contends that the sub*ect motor (ehicle comes within the

conte=t of /epublic )ct ;o" 7A9" 'hus, petitioner relies on )rticle ?$ f:

2: in relation to )rticle 1?9 of /epublic )ct ;o" 7A9" )rticle 6: of thesaid law de0nes Econsumer products and ser(icesE as goods, ser(ices and

credits, debts or obligations which are primaril% for personal, famil%,

household or agricultural purposes, which shall include, but not limited to,

food, drugs, cosmetics, and de(ices" 'he following pro(isions of /epublic

)ct ;o" 7A9 stateJ )rt" ?7" A!!licable $a% on &arrantie#. Q 'he

pro(isions of the i(il ode on conditions and warranties shall go(ern all

contracts of sale with conditions and warranties" )rt" ?$" Additional

'rovi#ion# on &arrantie#. Q #n addition to the i(il ode pro(isions on

sale with warranties, the following pro(isions shall go(ern the sale of consumer products with warrant%Je: Duration of warrant%" 'he seller and

the consumer ma% stipulate the period within which the e=press warrant%

shall be enforceable" #f the implied warrant% on merchantabilit%

accompanies an e=press warrant%, both will be of e6ual duration")n%

other implied warrant% shall endure not less than si=t% ?!: da%s nor more

than one 1: %ear following the sale of new consumer products" f: Breach

of warranties"



NA'ALIA (AR%ENA O%&LEN(IA )$. (O&R' OF A%%EAL$, ALADIN

$IM&NDA( AND MIG&EL OLI)AN

+"/" ;o" 125$A5, Nul% A!, 199$

@)'&J

;atalie arpena Opulenciapetitioner: e=ecuted a contract to sell in fa(or

of the respondents namel% )ladin &imundac and Miguel Oli(en a lot" &aid

respondents had alread% paid petitioner a downpa%ment worth

PA!!,!!!"!!" )nd said respondents brought an action for speci0c

perfrormance to the petitioner" 8owe(er, she put forward the following

aCrmati(e defensesJ that the propert% sub*ect of the contract formed part

of the state of Demetrio arpena petitioners father:, in respect of which a petition for probate was 0led with the /egional 'rial ourtG that at

the time the contract was e=ecuted, the parties were aware of the

pendenc% of the probate proceedingG that the contract to sell was not

appro(ed b% the probate courtG that reali<ing the nullit% of the contract

petitioner had o4ered to return the downpa%ment recei(ed from pri(ate

respondents, but the latter refused to accept it"

#&&J

3hether or not the ontract to &ell e=ecuted b% the petitioner and pri(ate

respondents without the re6uisite probate court appro(al is (alid"

@)'&J

8ereditar% rights are (ested in the heir or heirs from the moment of the

decedents death" Petitioner, therefore, became the owner of herhereditar% share the moment her father died" 'hus, the lac of *udicial

appro(al does not in(alidate the ontract to &ell, because the petitioner

has the substanti(e right to sell the whole or a part of her share in the

estate of her late father" nder the old i(il ode K)rticle ! of the i(il

ode pro(ides that Rthe possession of hereditar% propert% is deemed to be

transmitted to the heir without interruption from the instant of the death

of the decedent, in case the inheritance be accepted" )nd Manresa with

reason states that upon the death of a person, each of his heirs Rbecomes

the undi(ided owner of the whole estate left with respect to the part orportion which might be ad*udicated to him, a communit% of ownership

being thus formed among the coowners of the estate while it remains

undi(ided" === )nd according to article A99 of the i(il ode, e(er% part

owner ma% assign or mortgage his part in the common propert%, and the

e4ect of such assignment or mortgage shall be limited to the portion



which ma% be allotted him in the partition upon the dissolution of the

communit%"

8ence, where some of the heirs, without the concurrence of the others,sold a propert% left b% their deceased father, this ourt, speaing thru its

then hief Nustice a%etano )rellano, said that the sale was (alid, but that

the e4ect thereof was limited to the share which ma% be allotted to the

(endors upon the partition of the estate"L

cases for reading

G.R. No. 196438 March 1, 2004

NA'IONAL +O&$ING A&'+ORI',

#".

GRA(E BA%'I$' (+&R(+ and he (O&R' OF A%%EAL$,

Fac" On Nune 1A, 19$?, respondent +race Baptist hurch hereinafter,

the hurch: wrote a letter to petitioner ;ational 8ousing )uthorit% ;8):,

manifesting its interest in ac6uiring >ots and 17 of the +eneral Mariano)l(are< /esettlement Pro*ect in a(ite" #n its letter.repl% dated Nul% 9,

19$?, petitioner informed respondentJ #n reference to %our re6uest letter

dated 1A Nune 19$?, regarding %our application for >ots and 17, Bloc .

A.>, we are glad to inform %ou that %our re6uest was granted and %ou

ma% now (isit our Pro*ect OCce at +eneral Mariano )l(are< for processing

of %our application to purchase said lots" On February 22, 1991, the NHA’s

Board of Directors passed Resolution No. 2126, approving the sale of the subject

lots to respondent Church at the price of P700.00 per square meter, or a total price

of P430,500.00. The Church was duly informed of this Resolution through a letter

sent by the NHA.On )pril $, 1991, the hurch tendered to the ;8) a

managers chec in the amount of P55,A5!"!!, purportedl% in full

pa%ment of the sub*ect properties" 'he hurch insisted that this was the

price 6uoted to them b% the ;8) @ield OCce, as shown b% an unsigned

piece of paper with a handwritten computation scribbled

thereon"Petitioner ;8) returned the chec, stating that the amount was

insuCcient considering that the price of the properties ha(e changed" 'he

hurch made se(eral demands on the ;8) to accept their tender of pa%ment, but the latter refused" 'hus, the hurch instituted a complaint

for speci0c performance and damages against the ;8) with the /egional

'rial ourt of Sue<on it%"

http://civillawabc.blogspot.com/2014/10/normal-0-false-false-false-en-us-x-none.html

http://civillawabc.blogspot.com/2014/10/normal-0-false-false-false-en-us-x-none.html



I"":e an the ;8) be compelled to sell the sub*ect lots to +race Baptist

hurch in the absence of an% perfected contract of sale between the

parties

R:!n< ;o" 'he contract has not been perfected"#n the case at bar, the

o4er of the ;8) to sell the sub*ect propert%, as embodied in /esolution

;o" 212?, was similarl% not accepted b% the respondent" 'hus, the alleged

contract in(ol(ed in this case should be more accuratel% denominated

as ine(i#tent " 'here being no concurrence of the o4er and acceptance, it

did not pass the stage of generation to the point of perfection" )s such, it

is without force and e4ect from the (er% beginning or from its incipienc%,

as if it had ne(er been entered into, and hence, cannot be (alidated

either b% lapse of time or rati0cation" 6uit% can not gi(e (alidit% to a (oid

contract, and this rule should appl% with e6ual force to ine=istentcontracts" 3e note from the records, howe(er, that the hurch, despite

nowledge that its intended contract of sale with the ;8) had not been

perfected, proceeded to introduce impro(ements on the disputed land" On

the other hand, the ;8) nowingl% granted the hurch temporar% use of

the sub*ect properties and did not pre(ent the hurch from maing

impro(ements thereon" 'hus, the hurch and the ;8), who both acted in

bad faith, shall be treated as if the% were both in good faith" #n this

connection, )rticle $ of the i(il ode pro(idesJ'he owner of the land

on which an%thing has been built, sown or planted in good faith, shall

ha(e the right to appropriate as his own the wors, sowing or planting,

after pa%ment of the indemnit% pro(ided for in articles 5? and 5$, or to

oblige the one who built or planted to pa% the price of the land, and the

one who sowed, the proper rent" 8owe(er, the builder or planter cannot

be obliged to bu% the land and if its (alue is considerabl% more than that

of the building or trees" #n such case, he shall pa% reasonable rent, if the

owner of the land does not choose to appropriate the building or trees

after proper indemnit%" 'he parties shall agree upon the terms of the

lease and in case of disagreement, the court shall 0= the terms thereof"

G.R. No. 19119 Fe-r:ar5 23, 2009

$%O&$E$ J&AN N&G&ID AND ERLINDA '. N&G&ID,

#".

+ON. (O&R' OF A%%EAL$ AND %EDRO %. %E($ON

Fac"J Pedro P" Pecson owned a commercial lot located at 27 Tamias

/oad, Sue<on it%, on which he built a four.door two.store% apartment

building" @or failure to pa% realt% ta=es, the lot was sold at public auction

b% the it% 'reasurer of Sue<on it% to Mamerto ;epomuceno, who in



turn sold it for P1!A,!!! to the spouses Nuan and rlinda ;uguid"Pecson

challenged the (alidit% of the auction sale before the /' of Sue<on it% "

#n its Decision, dated @ebruar% $, 19$9, the /' upheld the spouses title

but declared that the four.door two.store% apartment building was not

included in the auction sale" 'his was aCrmed in toto b% the ourt of )ppeals and thereafter b% this ourt, in its Decision dated Ma% 25, 199A,

in +"/" ;o" 1!5A?! entitled Pecson (" ourt of )ppeals"

On Nune 2A, 199A, b% (irtue of the ntr% of Nudgment of the aforesaid

decision in +"/" ;o" 1!5A?!, the ;uguids became the uncontested owners

of the 25?.s6uare meter commercial lot"

)s a result, the ;uguid spouses mo(ed for deli(er% of possession of the

lot and the apartment building"

#n the same order the /' also directed Pecson to pa% the same amount

of monthl% rentals to the ;uguids as paid b% the tenants occup%ing the

apartment units or P21,!!! per month from Nune 2A, 199A, and allowed

the o4set of the amount of P5A,!!! due from the ;uguids against the

amount of rents collected b% Pecson from Nune 2A, 199A to &eptember 2A,

199A from the tenants of the apartment"

Pecson dul% mo(ed for reconsideration, but on ;o(ember $, 199A, the

/' issued a 3rit of Possession, directing the deput% sheri4 to put thespouses ;uguid in possession of the sub*ect propert% with all the

impro(ements thereon and to e*ect all the occupants therein"

I"":e 3U;ot the ;uguids should reimburse Pecson for the bene0ts

deri(ed from the apartment building"

R:!n<J Ves" #t is not disputed that the construction of the four.door two.

store% apartment, sub*ect of this dispute, was undertaen at the timewhen Pecson was still the owner of the lot" 3hen the ;uguids became the

uncontested owner of the lot on Nune 2A, 199A, b% (irtue of entr% of

*udgment of the ourts decision, dated Ma% 25, 199A, in +"/" ;o" 1!5A?!,

the apartment building was alread% in e=istence and occupied b% tenants"

#n its decision dated Ma% 2?, 1995 in +"/" ;o" 115$1, the ourt declared

the rights and obligations of the litigants in accordance with )rticles $

and 5? of the i(il ode" 'hese pro(isions of the ode are directl%

applicable to the instant case"

nder )rticle $, the landowner is gi(en the option, either to

appropriate the impro(ement as his own upon pa%ment of the proper

amount of indemnit% or to sell the land to the possessor in good faith"

/elatedl%, )rticle 5? pro(ides that a builder in good faith is entitled to

full reimbursement for all the necessar% and useful e=penses incurredG it



also gi(es him right of retention until full reimbursement is made" 3hile

the law aims to concentrate in one person the ownership of the land and

the impro(ements thereon in (iew of the impracticabilit% of creating a

state of forced co.ownership, it guards against un*ust enrichment insofar

as the good.faith builders impro(ements are concerned" 'he right of retention is considered as one of the measures de(ised b% the law for the

protection of builders in good faith" #ts ob*ect is to guarantee full and

prompt reimbursement as it permits the actual possessor to remain in

possession while he has not been reimbursed b% the person who

defeated him in the case for possession of the propert%: for those

necessar% e=penses and useful impro(ements made b% him on the thing

possessed" )ccordingl%, a builder in good faith cannot be compelled to

pa% rentals during the period of retention nor be disturbed in his

possession b% ordering him to (acate" #n addition, as in this case, the

owner of the land is prohibited from o4setting or compensating the

necessar% and useful e=penses with the fruits recei(ed b% the builder.

possessor in good faith" Otherwise, the securit% pro(ided b% law would be

impaired" 'his is so because the right to the e=penses and the right to the

fruits both pertain to the possessor, maing compensation *uridicall%

impossibleG and one cannot be used to reduce the other"

)s we earlier held, since petitioners opted to appropriate the

impro(ement for themsel(es as earl% as Nune 199A, when the% applied for

a writ of e=ecution despite nowledge that the auction sale did not

include the apartment building, the% could not bene0t from the lots

impro(ement, until the% reimbursed the impro(er in full, based on the

current maret (alue of the propert%"+i(en the circumstances of the

instant case where the builder in good faith has been clearl% denied his

right of retention for almost half a decade, we 0nd that the increased

award of rentals b% the /' was reasonable and e6uitable" 'he petitioners

had reaped all the bene0ts from the impro(ement introduced b% the

respondent during said period, without pa%ing an% amount to the latter as

reimbursement for his construction costs and e=penses" 'he% should

account and pa% for such bene0ts"



%ROGRAMME IN(OR%ORA'ED, #". %RO)IN(E OF BA'AAN

G.R. No. 144639 J:ne 26, 2006

Fac" B)&O was the owner of Pia<<a 8otel and Mari(eles >odge, both

located in Mari(eles, Bataan" On Ma% 1, 19$?, B)&O granted

petitioner a contract of lease o(er Pia<<a 8otel at a monthl% rentalof P?,5!! for three %ears,i.e., from Nanuar% 1, 19$? to Nanuar% 1, 19$9,

sub*ect to renewal b% mutual agreement of the parties" )fter the

e=piration of the three.%ear lease period, petitioner was allowed to

continue operating the hotel on monthl% e=tensions of the lease"

#n )pril 19$9, howe(er, the Presidential ommission on +ood

+o(ernment P++: issued a se6uestration order against B)&O

pursuant to =ecuti(e Order ;o" 1 of former President ora<on

" )6uino" )mong the properties pro(isionall% sei<ed and taen o(er was

the lot on which Pia<<a 8otel stood"On Nul% 19, 19$9, howe(er, Pia<<a

8otel was sold at a public auction for non.pa%ment of ta=es to respondent

Pro(ince of Bataan" 'he title of the propert% was transferred to

respondent" B)&Os 'ransfer erti0cate of 'itle '': ;o" '.59?A1 was

cancelled and a new one, '' ;o" '.12$5?, was issued to the Pro(ince

of Bataan"

On Nul% 21, 19$9, petitioner 0led a complaint for preliminar%

in*unction and collection of sum of mone% against B)&O i(il ase ;o"

129.M>:" /espondent, as the new owner of the propert%, 0led a motion

for lea(e to inter(ene on ;o(ember 22, 199!" )fter its motion was

granted, respondent 0led a complaint.in.inter(ention pra%ing, inter alia,

that petitioner be ordered to (acate Pia<<a 8otel and Mari(eles >odge for

lac of legal interest"



I"":e 3U;ot the petitioner is a possessor in goodfaith of the Pia<<a 8otel

and Mari(eles >odge"

R:!n< 'he e(idence clearl% established respondents ownership of

Pia<<a 8otel" @irst, the title of the land on which Pia<<a 8otel stands was

in the name of respondent" &econd, 'a= Declaration ;o" 127$2 was in the

name of respondent as owner of Pia<<a 8otel"'hird, petitioner was

doubtlessl% *ust a lessee" #n the lease contract anne=ed to the complaint,

petitioner in fact admittedB)&Os respondents predecessor.in.

interest: ownership then of the sub*ect propert%"

@urthermore, petitioners reference to )rticle $ of the

i(il ode to *ustif% its supposed rights as Kpossessor in good faithL was

erroneous"

'he bene0ts granted to a possessor in good faith cannot be maintained

b% the lessee against the lessor because, such bene0ts are intended to

appl% onl% to a case where one builds or sows or plants on land which he

belie(es himself to ha(e a claim of title and not to lands wherein ones

onl% interest is that of a tenant under a rental contract, otherwise, itwould alwa%s be in the power of a tenant to impro(e his landlord out of

his propert%" Besides, as between lessor and lessee, the ode applies

speci0c pro(isions designed to co(er their rights"

8ence, the lessee cannot claim reimbursement, as a matter of right, for

useful impro(ements he has made on the propert%, nor can he assert a

right of retention until reimbursed" 8is onl% remed% is to remo(e the

impro(ement if the lessor does not choose to pa% its (alueG but the court

cannot gi(e him the right to bu% the land"

Petitioners assertion that Pia<<a 8otel was constructed Kat its:

e=penseL found no support in the records" ;either did an% document or

testimon% pro(e this claim" )t best, what was con0rmed was that

petitioner mana)ed and o!erated the hotel" 'here was no e(idence that

petitioner was the one which spent for the construction or reno(ation of

the propert%" )nd since petitioners alleged e=penditures were ne(er

pro(en, it could not e(en see reimbursement of one.half of the (alue of

the impro(ements upon termination of the lease under )rticle 1?7$ of thei(il ode"

@inall%, both the trial and appellate courts declared that the land as well

as the impro(ement thereon Pia<<a 8otel: belonged to respondent" 3e

0nd no reason to o(erturn this factual conclusion"



G.R. No. 10938 No#e=-er 11, 13

JO+ANNE$ $(+&BA(* > $ON$ %+ILI%%INE 'RADING

(OR%ORA'ION

(s"

'+E +ON. (O&R' OF A%%EAL$, RAMON $AN JO$E, JR.,

Fac" &ometime in 19$1, defendant established contact with

plainti4 through the Philippine onsulate +eneral in 8amburg, 3est

+erman%, because he wanted to purchase M); bus spare parts from

+erman%" Plainti4 communicated with its trading partner" Nohannes&chubac and &ohne 8andelsgesellschaft m"b"n" H o" &chubac

8amburg: regarding the spare parts defendant wanted to order"On

October 1?, 19$1, defendant submitted to plainti4 a list of the parts

=hibit B: he wanted to purchase with speci0c part numbers and

description" Plainti4 referred the list to &chubac 8amburg for 6uotations"

pon receipt of the 6uotations, plainti4 sent to defendant a letter dated

25 ;o(ember, 19$1 =h" : enclosing its o4er on the items listed b%

defendant"On December , 19$1, defendant informed plainti4 that he

preferred genuine to replacement parts, and re6uested that he be gi(en15 on all items =h" D:"On December 17, 19$1, plainti4 submitted its

formal o4er =h" : containing the item number, 6uantit%, part number,

description, unit price and total to defendant" On December, 2, 19$1,

defendant informed plainti4 of his desire to a(ail of the prices of the parts

at that time and enclosed Purchase Order ;o" !1!1 dated 1 December

19$1 =h" @ to @.:" &aid Purchase Order contained the item number,

part number and description" Defendant promised to submit the 6uantit%

per unit he wanted to order on December 2$ or 29 =h" @:"

On October 1$, 19$2, Plainti4 again reminded defendant of his order and

ad(ised that the case ma% be endorsed to its law%ers =h" >:"

Defendant replied that he did not mae an% (alid Purchase Order and

that there was no de0nite contract between him and plainti4 =h" M:"

Plainti4 sent a re*oinder e=plaining that there is a (alid Purchase Order

and suggesting that defendant either proceed with the order and open a

letter of credit or cancel the order and pa% the cancellation fee of A! of

@"O"B" (alue, or plainti4 will endorse the case to its law%ers =h" ;:"

I"":e whether or not a contract of sale has been perfected between the

parties"



R:!n< )rticle 1A19 of the i(il ode statesJ Eonsent is manifested b%

the meeting of the o4er and acceptance upon the thing and the cause

which are to constitute the contract" 'he o4er must be certain and the

acceptance absolute" ) 6uali0ed acceptance constitutes a counter o4er"E

'he facts presented to us indicate that consent on both sides has beenmanifested"'he o4er b% petitioner was manifested on December 17, 19$1

when petitioner submitted its proposal containing the item number,

6uantit%, part number, description, the unit price and total to pri(ate

respondent" On December 2, 19$1, pri(ate respondent informed

petitioner of his desire to a(ail of the prices of the parts at that time and

simultaneousl% enclosed its Purchase Order ;o" !l!1 dated December 1,

19$1" )t this stage, a meeting of the minds between (endor and (endee

has occurred, the ob*ect of the contractJ being the spare parts and the

consideration, the price stated in petitionerFs o4er dated December 17,

19$1 and accepted b% the respondent on December 2,19$1")lthough

said purchase order did not contain the 6uantit% he wanted to order,

pri(ate respondent made good, his promise to communicate the same on

December 29, 19$1" )t this *uncture, it should be pointed out that pri(ate

respondent was alread% in the process of e=ecuting the agreement

pre(iousl% reached between the parties" 3hile we agree with the trial

courtFs conclusion that indeed a perfection of contract was reached

between the parties, we di4er as to the e=act date when it occurred, forperfection too place, not on December 29, 19$1" )lthough the 6uantit%

to be ordered was made determinate onl% on December 29, 19$1,

6uantit% is immaterial in the perfection of a sales contract" 3hat is of

importance is the meeting of the minds as to the ob*ect and cau#e, which

from the facts disclosed, show that as of December 2, 19$1, these

essential elements had alread% occurred"

On the part of the bu%er, the situation re(eals that pri(ate respondent

failed to open an irre(ocable letter of credit without recourse in fa(or of

Nohannes &chubac of 8amburg, +erman%" 'his omission, howe(er" does

not pre(ent the perfection of the contract between the parties, for the

opening of the letter of credit is not to be deemed a suspensi(e condition"

'he facts herein do not show that petitioner reser(ed title to the goods

until pri(ate respondent had opened a letter of credit" Petitioner, in the

course of its dealings with pri(ate respondent, did not incorporate an%

pro(ision declaring their contract of sale without e4ect until after the

ful0llment of the act of opening a letter of credit"



G.R. No. 84480 March , 1

NA'IONAL GRAIN$ A&'+ORI' and 7ILLLAM (ABAL,

#".

'+E IN'ERMEDIA'E A%%ELLA'E (O&R' and LEON $ORIANO

Fac" On )ugust 2A, 1979, pri(ate respondent >eon &oriano o4ered to

sell pala% grains to the ;@), through 3illiam abal, the Pro(incial

Manager of ;@) stationed at 'uguegarao, aga%an" 8e submitted the

documents re6uired b% the ;@) for pre.6ualif%ing as a seller, namel%J 1:

@armerFs #nformation &heet accomplished b% &oriano and certi0ed b% a

Bureau of )gricultural =tension B)W: technician, ;apoleon allangan,

2: Wero= copies of four : ta= declarations of the riceland leased to him

and copies of the lease contract between him and Nudge oncepcion

&alud, and A: his /esidence 'a= erti0cate" Pri(ate respondent &orianoFs

documents were processed and accordingl%, he was gi(en a 6uota of

2,?! ca(ans of pala%" 'he 6uota noted in the @armerFs #nformation &heet

represented the ma=imum number of ca(ans of pala% that &oriano ma%



sell to the ;@)"#n the afternoon of )ugust 2A, 1979 and on the following

da%, )ugust 2, 1979, &oriano deli(ered ?A! ca(ans of pala%" 'he pala%

deli(ered during these two da%s were not rebagged, classi0ed and

weighed" when &oriano demanded pa%ment of the ?A! ca(ans of pala%,

he was informed that its pa%ment will be held in abe%ance since Mr" abalwas still in(estigating on an information he recei(ed that &oriano was not

a bona tide farmer and the pala% deli(ered b% him was not produced from

his farmland but was taen from the warehouse of a rice trader, Ben de

+u<man" On )ugust 2$, 1979, abal wrote &oriano ad(ising him to

withdraw from the ;@) warehouse the ?A! ca(ans &oriano deli(ered

stating that ;@) cannot legall% accept the said deli(er% on the basis of the

subse6uent certi0cation of the B)W technician, ;apoleon allangan that

&oriano is not a bona 0de farmer"#nstead of withdrawing the ?A! ca(ans

of pala%, pri(ate respondent &oriano insisted that the pala% grains

deli(ered be paid" 8e then 0led a complaint for speci0c performance

andUor collection of mone% with damages on ;o(ember 2, 1979, against

the ;ational @ood )uthorit% and Mr" 3illiam abal, Pro(incial Manager of

;@) with the ourt of @irst #nstance of 'uguegarao"

I"":e whether or not there was a contract of sale in the case at bar"

R:!n< )rticle 15$ of the i(il ode of the Philippines de0nes sale as a

contract whereb% one of the contracting parties obligates himself to

transfer the ownership of and to deli(er a determinate thing, and the

other part% to pa% therefore a price certain in mone% or its e6ui(alent" )

contract, on the other hand, is a meeting of minds between two 2:

persons whereb% one binds himself, with respect to the other, to gi(e

something or to render some ser(ice )rt" 1A!5, i(il ode of the

Philippines:" 'he essential re6uisites of contracts areJ 1: consent of the

contracting parties, 2: ob*ect certain which is the sub*ect matter of the

contract, and A: cause of the obligation which is established )rt" 1A1$,

i(il ode of the Philippines"

#n the case at bar, &oriano initiall% o4ered to sell pala% grains

produced in his farmland to ;@)" 3hen the latter accepted the o4er b%

noting in &orianoFs @armerFs #nformation &heet a 6uota of 2,?! ca(ans,

there was alread% a meeting of the minds between the parties" 'he ob*ect

of the contract, being the pala% grains produced in &orianoFs farmland and

the ;@) was to pa% the same depending upon its 6ualit%" 'he fact that the

e=act number of ca(ans of pala% to be deli(ered has not been determined

does not a4ect the perfection of the contract" )rticle 1A9 of the ;ew

i(il ode pro(idesJ E" " "" 'he fact that the 6uantit% is not determinate

shall not be an obstacle to the e=istence of the contract, pro(ided it is



possible to determine the same, without the need of a new contract

between the parties"E #n this case, there was no need for ;@) and &oriano

to enter into a new contract to determine the e=act number of ca(ans of

pala% to be sold" &oriano can deli(er so much of his produce as long as it

does not e=ceed 2,?! ca(ans"

'he acceptance referred to which determines consent is the acceptance

of the o4er of one part% b% the other and not of the goods deli(ered as

contended b% petitioners"@rom the moment the contract of sale is

perfected, it is incumbent upon the parties to compl% with their mutual

obligations or Ethe parties ma% reciprocall% demand performanceE thereof"

)rticle 175, i(il ode, 2nd par":"'he reason wh% ;@) initiall% refused

acceptance of the ?A! ca(ans of pala% deli(ered b% &oriano is that it

;@): cannot legall% accept the said deli(er% because &oriano is allegedl%not a bona 0de farmer" 'he trial court and the appellate court found that

&oriano was a bona 0de farmer and therefore, he was 6uali0ed to sell

pala% grains to ;@)"

what is brought to collation is not the donated

property itself, but the value of the property at the

time it was donated.

'+IRD DI)I$ION

? G.R. No. 11243, Oco-er 0, 1 @

ELO IM%ERIAL, %E'I'IONER )$. (O&R' OF A%%EAL$,

REGIONAL 'RIAL (O&R' OF LEGA$%I (I', (E$AR )ILLALON,

JR., 'ERE$A )ILLALON, AN'ONIO )ILLALON, A&G&$'O

)ILLALON, ROBER'O )ILLALON, RI(ARDO )ILLALON AND

E$'+ER )ILLALON, RE$%ONDEN'$.

D E ( I $ I O N

GONAGAREE$, J.

Petitioner sees to set aside the Decision of the ourt of )ppeals in ")".+"/" I ;o"

A197?[1], aCrming the Decision of the /egional 'rial ourt of >ega<pi it%[2], which

rendered inoCcious the donation made b% >eoncio #mperial in fa(or of herein

petitioner, to the e=tent that it impairs the

legitime of Iictor #mperial, and ordering

http://civillawabc.blogspot.com/2014/10/what-is-brought-to-collation-is-not.html



http://elibrary.judiciary.gov.ph/documents-dtsearch/SUPREME_COURT/Decisions/1999.zip%3E3ad,df%7C1999/12635393711567353907.html#_edn1









petitioner to con(e% to herein pri(ate respondents, heirs of said Iictor #mperial, that

portion of the donated land proportionate to Iictor #mperials legitime"

>eoncio #mperial was the registered owner of a A2,$A7.s6uare meter parcel of land

co(ered b% Original erti0cate of 'itle ;o" 2!!, also nown as >ot 5 of the

adastral &ur(e% of )lba%" On Nul% 7, 1951, >eoncio sold the said lot for P1"!! to hisacnowledged natural son, petitioner herein, who then ac6uired title o(er the land

and proceeded to subdi(ide it into se(eral lots" Petitioner and pri(ate respondents

admit that despite the contracts designation as one of K)bsolute &aleL, the

transaction was in fact a donation"

On Nul% 2$, 195A, or barel% two %ears after the donation, >eoncio 0led a complaint

for annulment of the said Deed of )bsolute &ale, doceted as i(il ase ;o" 1177, in

the then ourt of @irst #nstance of )lba%, on the ground that he was decei(ed b%

petitioner herein into signing the said document" 'he dispute, howe(er, was

resol(ed through a compromise agreement, appro(ed b% the ourt of @irst #nstance

of )lba% on ;o(ember A, 19?1[3], under which termsJ 1: >eoncio recogni<ed thelegalit% and (alidit% of the rights of petitioner to the land donatedG and 2: petitioner

agreed to sell a designated 1,!!!.s6uare meter portion of the donated land, and to

deposit the proceeds thereof in a ban, for the con(enient disposal of >eoncio" #n

case of >eoncios death, it was agreed that the balance of the deposit will be

withdrawn b% petitioner to defra% burial costs"

On Nanuar% $, 19?2, and pending e=ecution of the abo(e *udgment, >eoncio died,

lea(ing onl% two heirs ... the herein petitioner, who is his acnowledged natural son,

and an adopted son, Iictor #mperial" On March $, 19?2, Iictor was substituted in

place of >eoncio in the abo(e.mentioned case, and it was he who mo(ed for

e=ecution of *udgment" On March 15, 19?2, the motion for e=ecution was dul%

granted"

@ifteen %ears thereafter, or on Nul% 2?, 1977, Iictor died single and without issue,

sur(i(ed onl% b% his natural father, /icardo Iillalon, who was a lessee of a portion of

the disputed land" @our %ears hence, or on &eptember 25, 19$1, /icardo died,

lea(ing as his onl% heirs his two children, esar and 'eresa Iillalon"

@i(e %ears thereafter, or sometime in 19$?, esar and 'eresa 0led a complaint for

annulment of the donation with the /egional 'rial ourt of >ega<pi it%, doceted as

i(il ase ;o" 7??" Petitioner mo(ed to dismiss on the ground of re# *udicata, b%

(irtue of the compromise *udgment rendered b% the ourt of @irst #nstance of )lba%"

'he trial court granted the motion to dismiss, but the ourt of )ppeals re(ersed the

trial courts order and remanded the case for further proceedings"

On October 1$, 19$9, esar and 'eresa 0led an amended complaint in the same

case, i(il ase ;o" 7??, for K)nnulment of Documents, /econ(e%ance and

/eco(er% of PossessionL with the /egional 'rial ourt of >ega<pi it%, seeing the

nulli0cation of the Deed of )bsolute &ale a4ecting the abo(e propert%, on grounds

of fraud, deceit and inoCciousness" #n the amended complaint, it was alleged that

petitioner caused >eoncio to e=ecute the donation b% taing undue ad(antage of

the latters ph%sical weaness and mental un0tness, and that the con(e%ance ofsaid propert% in fa(or of petitioner impaired the

legitime of Iictor #mperial, their

natural brother and predecessor.in.interest"[4]

#n his )nswer, petitionerJ 1: alleged that >eoncio had con(e%ed suCcient propert%

to Iictor to co(er his

legitime, consisting of 5?A hectares of agricultural land in







Manito, )lba%G 2: reiterated the defense of re# *udicata, and A: raised the

additional defenses of prescription and laches"

Plainti4 esar Iillalon died on December 2?, 19$9, while the case was pending in

the /egional 'rial ourt, and was substituted in this action b% his sons, namel%,

)ntonio, /oberto, )ugusto, /icardo and esar, Nr", all surnamed Iillalon, and hiswidow, sther 8" Iillalon"

'he /' held the donation to be inoCcious and impairing the legitime of Iictor, on

the basis of its 0nding that at the time of >eoncios death, he left no propert% other

than the A2,$A7.s6uare meter parcel of land which he had donated to petitioner"

'he /' went on further to state that petitioners allegation that other properties

e=isted and were inherited b% Iictor was not substantiated b% the e(idence"[5]

'he

legitime of Iictor was determined b% the trial court in this mannerJ

onsidering that the propert% donated is A2,$A7 s6uare meters, one half of that or

1?,1$ s6uare meters becomes the free portion of >eoncio which could be absorbed

in the donation to defendant" 'he other half, which is also 1?,1$ s6uare meters is

where the legitime of the adopted son Iictor #mperial has to be taen"

'he proportion of the legitime of the legitimate child including the adopted child: in

relation to the acnowledged natural child defendant: is 1! is to 5, with the

acnowledged natural child getting X of thelegitime of the legitimate adopted:

child, in accordance with )rt" $95 of the ;ew i(il ode which pro(idesJ

K'he legitime of each of the acnowledged natural children and each of the natural

children b% legal 0ction shall consist of one.half of the legitime of each of the

legitimate children or descendants"L

@rom the 1?,1$ s6uare meters left after the free portion has been taen: plainti4s

are therefore entitled to 1!,9! s6uare meters while defendant gets 5,2! s6uare

meters"[6]

'he trial court liewise held that the applicable prescripti(e period is A! %ears under

)rticle 111 of the i(il ode[7], reconed from March 15, 19?2, when the writ of

e=ecution of the compromise *udgment in i(il ase 1177 was issued, and that the

original complaint ha(ing been 0led in 19$?, the action has not %et prescribed" #n

addition, the trial court regarded the defense of prescription as ha(ing been wai(ed,this not being one of the issues agreed upon at pre.trial"

'hus, the dispositi(e portion of the /'s Decision of December 1A, 199! readsJ

38/@O/, premises considered, the Deed of )bsolute &ale otherwise nown as

Doc" ;o" $G Boo ;o" 1G Page ;o" 1G &eries of 1951 of the ;otarial 0le of Pompe%o

B" alle*a which is considered a donation, is hereb% reduced proportionatel% insofar

as it a4ected the

legitime of the late Iictor #mperial, which share is inherited b% the

plainti4s herein, to the e=tent that plainti4s are ordered to be gi(en b% defendant a

portion of 1!,9! s6uare meters thereof"

#n order to a(oid further conYict, the 1!,9! share to be gi(en to plainti4s should

include the portion which the% are presentl% occup%ing, b% (irtue of the e=tended

lease to their father /icardo Iillalon, where the bungalow in 6uestion stands"

'he remaining portion to be gi(en to plainti4s ma% come from an% other portion

that ma% be agreed upon b% the parties, otherwise, this court will appoint a

commissioner to undertae the partition"









'he other 21,$97 s6uare meters should go to the defendant as part of

his legitime and b% (irtue of the reduced donation"

;o pronouncement as to damages as the% were not suCcientl% pro(ed"

&O O/D/D"[8]

'he ourt of )ppeals aCrmed the /' Decision in toto"

Before us, petitioner 6uestions the following 0ndings of respondent courtJ 1: that

there was no re# *udicata, there being no identit% of parties and cause of action

between the instant case and i(il ase ;o" 1177G 2: that pri(ate respondents had

a right to 6uestion the donationG A: that pri(ate respondents action is barred b%

prescription, laches and estoppelG and : that the donation was inoCcious and

should be reduced"

#t is an indispensable re6uirement in re# *udicata that there be, between the 0rst

and second action, identit% of parties, of sub*ect matter and of cause of action"[9] )

perusal of the records leads us to conclude that there is no identit% of parties and of

cause of action as between i(il ase ;o" 1177 and i(il ase ;o" 7??" i(il ase

;o" 1177 was instituted b% >eoncio in his capacit% as donor of the 6uestioned

donation" 3hile it is true that upon his death, Iictor was substituted as plainti4 of

the action, such does not alter the fact that Iictors participation in the case was in

representation of the interests of the original plainti4, >eoncio" 'he purpose behind

the rule on substitution of parties is to ensure that the deceased part% would

continue to be properl% represented in the suit through the dul% appointed legal

representati(e of the estate[10], or his heir, as in this case, for which no court

appointment is re6uired"[11] Petitioners argument, therefore, that there is substantial

identit% between >eoncio and pri(ate respondents, being heirs and successors.in.

interest of Iictor, is una(ailing"

Moreo(er, >eoncios cause of action as donor of the propert% was fraud, purportedl%

emplo%ed upon him b% petitioner in the e=ecution of the donation" 3hile the same

circumstances of fraud and deceit are alleged in pri(ate respondents complaint, it

also raises the additional ground of inoCciousness of donation"

ontrar% to petitioners contentions, inoCciousness of donation does not, and could

not, form part of >eoncios cause of action in i(il ase ;o" 1177" #noCciousness as

a cause of action ma% arise onl% upon the death of the donor, as the (alue of the

donation will then be contrasted with the net (alue of the estate of the donor.

deceased"[12]

onse6uentl%, while in i(il ase ;o" 1177, >eoncio sought the re(ocation in full of

the donation on ground of fraud, the instant case actuall% has two alternati(e

causes of action" @irst, for fraud and deceit, under the same circumstances as

alleged in >eoncios complaint, which sees the annulment in full of the donation,

and which the trial court correctl% dismissed because the compromise agreement in

i(il ase ;o" 1177 ser(ed as a rati0cation and wai(er on the part of >eoncio of

whate(er defects in (oluntariness and consent ma% ha(e been attendant in themaing of the donation" 'he second cause of action is the alleged inoCciousness of

the donation, resulting in the impairment of Iictors

legitime, which sees the

annulment, not of the entire donation, but onl% of that portion diminishing

the legitime"[13] #t is on the basis of this second cause of action that pri(ate

respondents pre(ailed in the lower courts"















Petitioner ne=t 6uestions the right of pri(ate respondents to contest the donation"

Petitioner sources his argument from )rticle 772 of the i(il ode, thusJ

Onl% those who at the time of the donors death ha(e a right to the legitime and

their heirs and successors in interest ma% as for the reduction of inoCcious

donations" ===

)s argued b% petitioner, when >eoncio died on Nanuar% $, 19?2, it was onl% Iictor

who was entitled to 6uestion the donation" 8owe(er, instead of 0ling an action to

contest the donation, Iictor ased to be substituted as plainti4 in i(il ase ;o"

1177 and e(en mo(ed for e=ecution of the compromise *udgment therein"

;o renunciation of legitime ma% be presumed from the foregoing acts" #t must be

remembered that at the time of the substitution, the *udgment appro(ing the

compromise agreement has alread% been rendered" Iictor merel% participated in

the e=ecution of the compromise *udgment" 8e was not a part% to the compromise

agreement"

More importantl%, our law on succession does not countenance tacit repudiation of

inheritance" /ather, it re6uires ane=press act on the part of the heir" 'hus, under

)rticle 1!51 of i(il odeJ

'he repudiation of an inheritance shall be made in a public or authentic instrument,

or b% petition presented to the court ha(ing *urisdiction o(er the testamentar% or

intestate proceedings"

'hus, when Iictor substituted >eoncio in i(il ase ;o" 1177 upon the latters

death, his act of mo(ing for e=ecution of the compromise *udgment cannot be

considered an act of renunciation of his

legitime" 8e was, therefore, not precluded

or estopped from subse6uentl% seeing the reduction of the donation, under )rticle

772" ;or are Iictors heirs, upon his death, precluded from doing so, as their right to

do so is e=pressl% recogni<ed under )rticle 772, and also in )rticle 1!5AJ

#f the heir should die without ha(ing accepted or repudiated the inheritance, his

right shall be transmitted to his heirs"

Be that as it ma%, we 0nd merit in petitioners other assignment of errors" 8a(ing

ascertained this action as one for reduction of an inoCcious donation, we cannot

sustain the holding of both the trial court and the ourt of )ppeals that the

applicable prescripti(e period is thirt% %ears, under )rticle 111 of the i(il ode" 'he sense of both courts that this case is a Kreal action o(er an immo(ableL allots

undue credence to pri(ate respondents description of their complaint, as one for

K)nnulment of Documents, /econ(e%ance and /eco(er% of Possession of Propert%L,

which suggests the action to be, in part, a real action enforced b% those with claim

of title o(er the disputed land"

nfortunatel% for pri(ate respondents, a claim for legitime does not amount to a

claim of title" #n the recent case of i+conde v#. Court of A!!eal#[14], we declared that

what is brought to collation is not the donated propert% itself, but the (alue of the

propert% at the time it was donated" 'he rationale for this is that the donation is areal alienation which con(e%s ownership upon its acceptance, hence, an% increase

in (alue or an% deterioration or loss thereof is for the account of the heir or donee"[15]

3hat, then, is the prescripti(e period for an action for reduction of an inoCcious

donation 'he i(il odespecifies the following instances of







reduction or revocation of donations: (1) four years, in

cases of subseuent birth, appearance, recognition or

adoption of a child![16]

(") four years, for non#

compliance with conditions of the donation![17] and ($)

at any time during the lifetime of the donor and his

relatives entitled to support, for failure of the donor to

reserve property for his or their support%[18]

Interestingly, donations as in the instant case,[19]

the

reduction of which hinges upon the allegation of

impairment of

legitime, are not controlled by a

particular prescriptive period, for which reason we

must resort to the ordinary rules of prescription%

nder )rticle 11 of the i(il ode, actions upon an obligation created b% law must

be brought within ten %ears from the time the right of action accrues" 'hus, the ten.

%ear prescripti(e period applies to the obligation to reduce inoCcious donations,

re6uired under )rticle 771 of the i(il ode, to the e=tent that the% impair

the legitime of compulsor% heirs"

@rom when shall the ten.%ear period be reconed 'he case of ,ateo v#. $a)ua, 29

SCA /4, which in(ol(ed the reduction for inoCciousness of a donation !ro!ter

nu!tia#, recogni<ed that the cause of action to enforce a legitimeaccrues upon the

death of the donor.decedent" learl% so, since it is onl% then that the net estate ma%

be ascertained and on which basis, the legitimes ma% be determined"

#t too pri(ate respondents 2 %ears since the death of >eoncio to initiate this case"

'he action, therefore, has long prescribed"

)s for the trial courts holding that the defense of prescription had been wai(ed, it

not being one of the issues agreed upon at pre.trial, suCce it to sa% that while theterms of the pre.trial order bind the parties as to the matters to be taen up in trial,

it would be the height of in*ustice for us to adhere to this technicalit% when the fact

of prescription is manifest in the pleadings of the parties, as well as the 0ndings of

fact of the lower courts"[20]

) perusal of the factual antecedents re(eals that not onl% has prescription set in,

pri(ate respondents are also guilt% of estoppel b% laches" #t ma% be recalled that

>eoncio died on Nanuar% $, 19?2" @ifteen %ears later, Iictor died, lea(ing as his sole

heir /icardo Iillalon, who also died four %ears later" 3hile Iictor was ali(e, he ga(e

no indication of an% interest to contest the donation of his deceased father" )s weha(e discussed earlier, the fact that he acti(el% participated in i(il ase ;o" 1177

did not amount to a renunciation of his inheritance and does not preclude him from

bringing an action to claim his

legitime" 'hese are matters that Iictor could not

possibl% be unaware of, considering that he is a law%er[21]" /icardo Iillalon was e(en

a lessee of a portion of the donated propert%, and could ha(e instituted the action

as sole heir of his natural son, or at the (er% least, raised the matter of

legitime b%















wa% of counterclaim in an e*ectment case[22] 0led against him b% petitioner in 1979"

;either does it help pri(ate respondents cause that 0(e %ears ha(e elapsed since

the death of /icardo in 19$1 before the% 0led their complaint with the /'"

stoppel b% laches is the failure or neglect for an unreasonable or une=plained

length of time to do that which, b% e=ercising due diligence, could or should ha(ebeen done earlier, warranting a presumption that the person has abandoned his

right or declined to assert it"[23] 3e 0nd the necessit% for the application of the

principle of estoppel b% laches in this case, in order to a(oid an in*ustice"

) 0nal word on collation of donations" 3e obser(e that after 0nding the donation to

be inoCcious because >eoncio had no other propert% at the time of his death, the

/' computed the

legitime of Iictor based on the area of the donated propert%"

8ence, in its dispositi(e portion, it awarded a portion of the propert% to pri(ate

respondents as Iictors legitime" 'his was upheld b% the ourt of )ppeals"

Our rules of succession re6uire that before an% conclusion as to the legal share dueto a compulsor% heir ma% be reached, the following steps must be taenJ 1: the net

estate of the decedent must be ascertained, b% deducting all the pa%able

obligations and charges from the (alue of the propert% owned b% the deceased at

the time of his deathG 2: the (alue of all donations sub*ect to collation would be

added to it"[24]

'hus, it is the value of the propert% at the time it is donated, and not the propert%

itself, which is brought to collation" onse6uentl%, e(en when the donation is found

inoCcious and reduced to the e=tent that it impaired Iictors

legitime, pri(ate

respondents will not recei(e a corresponding share in the propert% donated" 'hus, in

this case where the collatable propert% is an immo(able, what ma% be recei(ed isJ

1: an e6ui(alent, as much as possible, in propert% of the same nature, class and

6ualit%G[25] 2: if such is impracticable, the e6ui(alent (alue of the

impaired

legitime in cash or maretable securitiesG[26] or A: in the absence of cash or

securities in the estate, so much of such other propert% as ma% be necessar%, to be

sold in public auction"[27]

3e belie(e this worth mentioning, e(en as we grant the petition on grounds of

prescription and laches"

A((ORDINGL , the decision of the ourt of )ppeals in ")" +"/" I ;o" A197?,

aCrming in toto the decision of the /egional 'rial ourt in i(il ase ;o" 7??, is

re(ersed and set aside" ;o costs"

&O O/D/D"

THIRD DIVISION

[ G.R. NO. 154942, August 16, 2005 ]ROLANDO SANTOS, PETITIONER, VS. CONSTANCIA SANTOS ALANA,

RESPONDENT.

D E C I S I O N

SANDOVALG!TIERRE", #.$

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil

Procedure, as amended, assailing the Decision1! dated "arch 7, #$$# and Resolution dated %ul&















#4, #$$# of the Court of 'ppeals in C('()*(R( C+ o( 4$7#-(

' .rief narration of the factual antecedents follows/

Rolando 0antos, petitioner, and Constancia 0antos 'lana, respondent, are half).lood si.lings

.oth asserting their claim over a 9)s2uare meter lot located at 19)B 'ndalucia 0t(, 0ta( Cru3,"anila( t was registered in the name of their father, *regorio 0antos, under ransfer Certificate

of itle 6C o( 14#7- of the Registr& of Deeds of "anila( 8e died intestate on "arch 1$,

19-(

During his lifetime, or on %anuar& 1, 197-, *regorio donated the lot to petitioner which the

latter accepted on %une $, 19-1( he deed of donation 6: Pagsasalin ng Karapatan at Pag-aari:

was annotated on *regorio;s title(

<n 'pril -, 19-1, *regorio sold the lot to petitioner as per a Deed of '.solute 0ale(

<n %une #, 19-1, .& virtue of the annotated deed of donation, C o( 14#7- in *regorio;sname was cancelled and in lieu thereof, C o( 1447$ was issued .& the Registr& of Deeds of

"anila in petitioner;s name(

<n %anuar& 11, 1991, respondent Constancia 0antos filed with the Regional rial Court of

"anila, Branch 15, a complaint for partition and reconve&ance against petitioner( 0he allegedthat during his lifetime, her father *regorio denied having sold the lot to petitioner= that she

learned of the donation in 197-= and that the donation is inofficious as she was deprived of

her legitime(

n his answer, petitioner countered that respondent;s suit is .arred .& prescription considering

that she is aware that he has .een in possession of the lot as owner for more than ten 61$ &ears=

and that the lot was sold to him .& his father, hence, respondent can no longer claim her legitime(

he trial court found that the Deed of '.solute 0ale was not signed .& the parties nor was it

registered in the Registr& of Deeds( hus, it is not a valid contract( >hat is valid is the deed ofdonation as it was dul& e?ecuted .& the parties and registered(

he trial court then held that since *regorio did not own an& other propert&, the donation to

petitioner is inofficious .ecause it impaired respondent;s legitime(

he dispositive portion of the trial court;s Decision reads/

:>8@R@A<R@, premises considered, udgment is here.& rendered declaring the Deed ofDonation inofficious insofar as it impair the legitime of the plaintiff which is the of the su.ect

propert&(

he Registr& of Deeds of "anila is here.& ordered to cancel the entr& in C o( 14#7- of the

Deed of Donation dated %anuar& 1, 197- and to cancel C o( 1447$ issued .ased on said

entr&(

he parties are enoined to institute the proper action for the settlement of the @state of *regorio

0antos and for the eventual partition of the estate(:#!

<n appeal, the Court of 'ppeals affirmed the trial court;s Decision, holding that/:here are in the instant case two documents .& which the su.ect propert& was purportedl&

transferred to the defendant ) a deed of donation and a deed of sale(

? ? ?

T%&'& ()*, t%&'&+'&, -& * )/ -/ %(% t%& )&)*t 3)/ su((&ss+u/ (**(& us t%)t

G'&g' S)*ts s t%& '&'t/ * sut& t %3 )* su(% s)& ()* -* t%& )&&& s

)s t '&3& t%& ()s& +'3 t%& '&)3 + t%& ) * *)t*s.



"oreover, as aptl& put .& the trial court/

;n general one who has disposed his propert& would not and could not have disposed the sameagain unless the previous act was rendered invalid or ineffective(

he validit& of the Deed of Donation was never assailed .& the defendant( n fact, it wasimpliedl& recogni3ed as valid .& defendant .& registering the same to the Registr& of Deeds(

t is the honest .elief of this Court, given the circumstances, i(e(, the e?istence of the vendor andthe vendee in the Deed of '.solute 0ale and the registration of the Deed of Donation despite the

supposed previous e?ecution of 6the Deed of '.solute 0ale, t%)t t%&'& )s * ) && +

s)& &&(ut& )* t%)t t%& t'u& )* '&) )g'&&3&*t -&t&&* G'&g' S)*ts )* R)*

S)*ts )s t%)t + ) *)t*.

Aurthermore, considering that defendant himself registered the Deed of Donation, he cannot now

close his e&es and den& the e?istence of the same .& alleging that there had .een a deed of sale

e?ecuted previousl&(: 6'ppealed Decision, supra, at pp( #-)#9? ? ?

>hile a person ma& dispose of his propert& .& donation, there is a limitation to the same( he

law provides that no person ma& give or receive, .& wa& of donation, more than he ma& give or

receive .& will, and an& donation which ma& e?ceed the foregoing is considered inofficious( ? ?? he donation shall .e inofficious in all that it ma& e?ceed this limitation( 6'rticle 75#, Civil

Code he said donation ma& correspondingl& .e reduced insofar as it e?ceeds the portion that

ma& .e freel& disposed of .& will 6'R( 71(

? ? ?

t has .een undisputedl& shown that the su.ect propert& was the onl& propert& of the deceased*regorio 0antos at the time of his death on "arch 1$, 19- 6@?hi.it ::, <riginal Record, p(

1= and that he made no reservation for the legitime of the plaintiff)appellee, his daughter 60ee

paragraph #, Complaint and paragraph #, 'nswer, .id(, at pp 1 and 1# and compulsor&heir( C&)'/, t%& 'u& * ++(us*&ss )&s. ? ? ?

? ? ?

Defendant)appellant finall& argues that since plaintiff)appellee Enew of the donation since 197-,

while the donor *regorio 0antos was still alive, her assailing the said donation onl& on %anuar&

11, 1991 or thirteen &ears after, has effectivel& .arred her from instituting the present action( he

foregoing is apparentl& groundless and without merit(

he inofficiousness of a donation cannot .e determined until after the death of the donor .ecause prior to his death, the value of his estate cannot .e determined or computed( Determination of the

value of the deceased;s estate will re2uire the collation of all properties or rights, donated or

conve&ed .& gratuitous title to the compulsor& heirs in order that the& ma& .e included in the

computation for the determination of the legitime of each heir and for the account of partition6'rt( 1$1, Civil Code(:!

8ence, the instant petition(

he findings of the courts .elow that 61 *regorio donated to petitioner the su.ect lot= 6# the

Deed of '.solute 0ale is void= and 6 *regorio;s onl& propert& is the said lot ) are all factual innature which are not within the domain of this Court for it is not a trier of facts(4! Basic is it thatfindings of fact .& the trial court, especiall& when affirmed on appeal, as in this case, are

conclusive and .inding upon this Court( 5!

he issues which involve 2uestions of law are/ 61 whether the donation is inofficious= and 6#

whether the respondent;s action has prescri.ed(



( >hether the donation is inofficious(

t .ears reiterating that under 'rticle 75# of the Civil Code, the donation is inofficoius if it

e?ceeds this limitation )* &'s* 3)/ g& ' '&(&&, -/ )/ + *)t*, 3'& t%)* %&

3)/ g& ' '&(&& -/ . n Imperial vs. Court of Appeals,!

we held that inofficiousnessma& arise onl& upon the death of the donor as the value of donation ma& then .e contrasted with

the net value of the estate of the donor deceased(

't this point, we emphasi3e that as found .& the trial court, *regorio did not sell the lot to

petitioner( 8e donated it( he trial court also found that the donation is inofficious as it impairs

respondent;s legitime= that at the time of *regorio;s death, he left no propert& other than the lot

now in controvers& he donated to petitioner= and that the deceased made no reservation forthe legitime of respondent, his daughter and compulsor& heir( hese findings were affirmed .&

the Court of 'ppeals(

Pursuant to 'rticle 75# earlier cited, *regorio could not donate more than he ma& give .& will(Clearl&, .& donating the entire lot to petitioner, we agree with .oth lower courts that *regorio;s

donation is inofficious as it deprives respondent of her legitime, which, under 'rticle --- of theCivil Code, consists of one)half 61F# of the hereditar& estate of the father and the mother( 0ince

the parents of .oth parties are alread& dead, the& will inherit the entire lot, each .eing entitled to

one)half 61F# thereof(

( >hether respondent;s suit is .arred .& prescription(

n Imperial vs. Court of Appeals,7! we held that :donations, the reduction of which hinges uponthe allegation of impairment of legitime 6as in this case, are not controlled .& a particular

prescriptive period, for which reason, we must resort to the ordinar& rules of prescription( Gnder

'rticle 1144 of the Civil Code, actions upon an o.ligation created .& law must .e .rought withinten &ears from the time the right of action accrues( hus, the ten)&ear prescriptive period applies

to the o.ligation to reduce inofficious donations, re2uired under 'rticle 771 of the Civil Code,-! to the e?tent that the& impair the legitime of compulsor& heirs(

Arom when shall the ten)&ear period .e recEonedH n "ateo vs( Iagua,9! involving the reduction,

for inofficiousness, of a donation propter nuptias, we held that the cause of action to enforce

a legitime accrues upon the death of the donor)decedent( Clearl& so, since it is onl& then that thenet estate ma& .e ascertained and on which .asis, the legitimes ma& .e determined(

8ere, *regorio died in 19-( Conse2uentl&, respondent had until 199 within which to file theaction( Records show that she filed her suit in 199#, well within the prescriptive period(

7HERE8ORE, the petition is DENIED. he challenged Decision and Resolution of the Courtof 'ppeals in C')*(R( C+ o( 4$7#- are here.& A88IRED, with modification in the sense

that the su.ect deed of donation .eing inofficious, one half 61F# of the lot covered .& C o(

14#7- of the Registr& of Deeds of "anila is awarded to Constancia 0antos 'lana, respondent,

the same .eing her legitime( he remaining one)half 61F# shall .e retained .& petitioner,Rolando 0antos, as his legitime and .& virtue of the donation(

Costs against petitioner(

0< <RD@R@D(

THIRD DIVISION

[ G.R. N. 1:9;;6, D&(&3-&' 15, 2010 ]AELIA P. ARELLANO, REPRESENTED <= HER D!L= APPOINTED

G!ARDIANS, AGNES P. ARELLANO AND NONA P. ARELLANO,



PETITIONER, VS. 8RANCISCO PASC!AL AND IG!EL PASC!AL,

RESPONDENTS.

D E C I S I O N

CARPIO ORALES, #.$

'ngel ( Pascual %r( died intestate on %anuar& #, 1999 leaving as heirs his si.lings, namel&/

petitioner 'melia P( 'rellano who is represented .& her daughters1! 'gnes P( 'rellano 6'gnes

and ona P( 'rellano, and respondents Arancisco Pascual and "iguel ( Pascual(#!

n a petition for :%udicial 0ettlement of ntestate @state and ssuance of Ietters of

'dministration,: docEeted as 0pecial Proceeding Case o( ")5$4, filed .& respondents on'pril #-, #$$$ .efore the Regional rial Court 6RC of "aEati, respondents alleged, inter alia,

that a parcel of land 6the donated propert& located in eresa +illage, "aEati, which was, .&

Deed of Donation, transferred .& the decedent to petitioner the validit& of which donation

respondents assailed, :ma& .e considered as an advance legitime: of petitioner(

Respondent;s nephew +ictor was, as the& pra&ed for, appointed as 'dministrator of the estate .&

Branch 15 of the "aEati RC(!

Respecting the donated propert&, now covered in the name of petitioner .& ransfer Certificate

of itle o( 1-1--9 of the Register of Deeds of "aEati, which respondents assailed .ut whichthe&, in an& event, posited that it :ma& .e considered as an advance legitime: to petitioner, the

trial court, acting as pro.ate court, held that it was precluded from determining the validit& of the

donation(

Provisionall& passing, however, upon the 2uestion of title to the donated propert& onl& for the purpose of determining whether it formed part of the decedent;s estate,4! the pro.ate court foundthe Deed of Donation valid in light of the presumption of validit& of notari3ed documents( t

thus went on to hold that it is su.ect to collation following 'rticle 1$1 of the ew Civil Code

which reads/5!

@ver& compulsor& heir, who succeeds with other compulsor& heirs, must .ring into the mass of

the estate an& propert& or right which he ma& have received from the decedent, during the

lifetime of the latter, .& wa& of donation, or an& other gratuitous title in order that it ma& .ecomputed in the determination of the

legitime of each heir, and in the account of the partition(

he pro.ate court thereafter partitioned the properties of the intestate estate( hus it disposed/

>8@R@A<R@, premises considered, udgment is here.& rendered declaring that/

1.he propert& covered .& C o( 1-1--9 of the Register of Deeds of "aEati as part of

the estate of 'ngel ( Pascual=

2.he propert& covered .& C o( 1-1--9 to .e su.ect to collation=

3.1F of the rental receiva.les due on the propert& at the me33anine and the rd floor of Gnit

111$ ana& 0t(, "aEati Cit& form part of the estate of 'ngel ( Pascual=

4.he following properties form part of the estate of 'ngel ( Pascual/

1( 1F share in the 8ouse and Iot at 111$ ana& 0t(, Ri3al +illage "aEati C o(

4-41 and 1F share in the rental income thereon=

#( 1F share in the +acant Iot with an area of #71 s2uare meters located at ana& 0t(,

Ri3al +illage, "aEati Cit&, C o( 119$=



( 'gricultural land with an area of (- hectares located at Puerta *alera "indoro

covered .& <C o( P)#159=

4( 0hares of stocEs in 0an "iguel Corporation covered .& the following Certificate

um.ers/ '$$11$, '$$144, '$-#9$, '$$$-7, '$579, '11979, '$495#1,

C-95$, C$9, C551, C54-#4, C1#$#-, '$11$#, C1#-5, '1$49, '$#14$1,'$$7#1-, '$71, 0#9#9, 04$1#-, 05-$-, 09$9=

5( 0hares of stocEs in Paper ndustries Corp( covered .& the following Certificate

um.ers/ 0#9#9, 04$1#-, 05-$-, 09$9, '$$7$-, $7-$, '$#$7-, 01-59,

01449=

( J share in @duardo Pascual;s shares in Baguio *old "ining Co(=

7( Cash in Banco De <ro 0avings 'ccount o( # $14 1##9# 4 in the name of ona

'rellano=

-( Propert& previousl& covered .& C o( 119$5 now covered .& C o(1-1--9, Register of Deeds of "aEati Cit&=

9( Rental receiva.les from Raul 'rellano per <rder issued .& Branch 4 of the Courton ovem.er 17, 1995(

5. AND t%& '&'t&s )'& )'tt*& )s +s$

1. o heir 'melia P( 'rellano)the propert& covered .& C o( 1-1--9=

2. o heirs Arancisco ( Pascual and "iguel ( Pascual)the real properties covered

.& C os( 4-41 and 119$ of the Register of Deeds of "aEati Cit& and the

propert& covered .& <C o( #159, to .e divided e2uall& .etween them up to the e?tent

that each of their share have .een e2uali3ed with the actual value of the propert& in 56aat the time of donation, the value of which shall .e determined .& an independent

appraiser to .e designated .& 'melia P( 'rellano, "iguel ( Pascual and Arancisco (

Pascual( f the real properties are not sufficient to e2uali3e the shares, then Arancisco;sand "iguel;s shares ma& .e satisfied from either in cash propert& or shares of stocEs, at

the rate of 2uotation( he remaining properties shall .e divided e2uall& among

Arancisco, "iguel and 'melia( 6emphasis and underscoring supplied

Before the Court of 'ppeals, petitioner faulted the trial court in holding that

( ( ( 8@ PR<P@RK D<'@D < 'PP@II' '"@I' P'0CG'I 'R@II'<

0 P'R <A 8@ @0'@ <A '*@I P'0CG'I, %R(

( ( ( 8@ PR<P@RK D<'@D < 'PP@II' 0 0GB%@C < C<II'< GD@R

'RCI@ 1$1 <A 8@ @> C+I C<D@(

( ( ( 'PP@II@@0 >8< 'R@ "@R@IK C<II'@R'I R@I'+@0 <A D@C@'0@D '*@I

( P'0CG'I %R( '0 80 C<"PGI0<RK 8@R0 @I@D < I@*"@0(

? ? ? ?

and+



( ( ( < P'R<* 8@ @0'@ <A '*@I ( P'0CG'I

%R( @LG'IIK '"<* 80 I@*'I <R @0'@ 8@R0( ! 6underscoring supplied

B& Decision7! of %ul& #$, #$$9, the Court of 'ppeals found petitioner;s appeal :partl&

meritorious(: t sustained the pro.ate court;s ruling that the propert& donated to petitioner issu.ect to collation in this wise/

Bearing in mind that in intestate succession, what governs is the rule on e2ualit& of division, >ehold that the'&'t/ su->&(t + *)t* inter vivos * +)' + A3&) s su->&(t t

()t*( 'melia cannot .e considered a creditor of the decedent and we .elieve that under the

circumstances, the value of such immova.le though not strictl& in the concept of

advance

legitime, should .e deducted from her share in the net hereditar& estate( he trial courttherefore committed no reversi.le error when it included the said propert& as forming part of the

estate of 'ngel ( Pascual(-! 6citation omitted= emphasis and underscoring supplied

he appellate court, however, held that, contrar& to the ruling of the pro.ate court, herein

petitioner :was a.le to su.mit prima facie evidence of shares of stocEs owned .& the decedent!

which have not .een included in the inventor& su.mitted .& the administrator(:

hus, the appellate court disposed, quoted verbatim/

>8@R@A<R@, premises considered, the present appeal is here.& P'RIK *R'@D( he

Decision dated %anuar& #9, #$$- of the Regional rial Court of "aEati Cit&, Branch 15 in

0pecial Proceeding Case o( ")5$4 is here.& R@+@R0@D and 0@ '0D@ insofar as the

order of inclusion of properties of the ntestate @state of 'ngel ( Pascual, %r( as well asthe partition and distri.ution of the same to the co)heirs are concerned(

he case is here.& R@"'D@D to the said court for further proceedings in accordance with thedis2uisitions herein(9! 6underscoring supplied

Petitioner;s Partial "otion for Reconsideration1$! having .een denied .& the appellate court .&Resolution11! of <cto.er 7, #$$9, the present petition for review on certiorari was filed, ascri.ing

as errors of the appellate court its ruling

( ( ( 8' 8@ PR<P@RK D<'@D BK '*@I ( P'0CG'I, %R( < P@<@R

'"@I' P'0CG'I 'R@II'< 0 P'R <A 80 @0'@ ' 8@ "@ <A 80 D@'8(

( ( ( 8' 8@ PR<P@RK D<'@D < P@<@R 0 0GB%@C <

C<II'< GD@R 'RCI@ 1$1 <A 8@ @> C+I C<D@(

( ( ( 8' R@0P<D@0 'R@ C<"PGI0<RK 8@R0 <A 8@R D@C@'0@D

BR<8@R '*@I ( P'0CG'I %R( 'D 'R@ @I@D < I@*"@0(

+

( ( ( < P'R<* 8@ @0'@ <A '*@I ( P'0CG'I,

%R( @LG'IIK '"<* P@<@R 'D R@0P<D@0, '0 80 I@*'I <R

@0'@ 8@R0(1#! 6underscoring supplied

Petitioners thus raise the issues of whether the propert& donated to petitioner is su.ect to

collation= and whether the propert& of the estate should have .een ordered e2uall& distri.uted

among the parties(



<n the first issue/

he term collation has two distinct concepts/ first , it is a mere mathematical operation .& the

addition of the value of donations made .& the testator to the value of the hereditar& estate=

and second , it is the return to the hereditar& estate of propert& disposed of .& lucrative title .& thetestator during his lifetime(1!

he purposes of collation are to secure e2ualit& among the compulsor& heirs in so far as is possi.le, and to determine the free portion, after finding the legitime, so that inofficious

donations ma& .e reduced(14!

Collation taEes place when there are compulsory heirs, one of its purposes .eing to determinethe legitime and the free portion( f there is no compulsor& heir, there is no legitime to .e

safeguarded(15!

he records do not show that the decedent left an& primar&, secondar&, or concurring compulsor&heirs( 8e was onl& survived .& his si.lings, who are his collateral relatives and, therefore, are

not entitled to an& legitime ) that part of the testator;s propert& which he cannot dispose of .ecause the law has reserved it for compulsory heirs(1!

he compulsor& heirs ma& .e classified into 61 primar&, 6# secondar&, and 6 concurring( he primar& compulsor& heirs are those who have precedence over and e?clude other compulsor&

heirs= legitimate children and descendants are primar& compulsor& heirs( he secondar&

compulsor& heirs are those who succeed onl& in the a.sence of the primar& heirs= the legitimate

parents and ascendants are secondar& compulsor& heirs( he concurring compulsor& heirs arethose who succeed together with the primar& or the secondar& compulsor& heirs= the illegitimate

children, and the surviving spouse are concurring compulsor& heirs(17!

he decedent not having left an& compulsor& heir who is entitled to an& legitime, he was at

li.ert& to donate all his properties, even if nothing was left for his si.lings)collateral relatives to

inherit( 8is donation to petitioner, assuming that it was valid,1-! is deemed as donation made to a:stranger,: chargea.le against the free portion of the estate(19! here .eing no compulsor& heir,

however, the donated propert& is not su.ect to collation(

<n the second issue/

he decedent;s remaining estate should thus .e partitioned equally among his heirs)si.lings)

collateral relatives, herein petitioner and respondents, pursuant to the provisions of the Civil

Code, viz /

A't. 100?. f there are no descendants, ascendants, illegitimate children, or a survivingspouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance

with the following articles( 6underscoring supplied

A't. 1004. 0hould the onl& survivors .e .rothers and sisters of the full .lood, the& shall *%&'t

* &@u) s%)'&s( 6emphasis and underscoring supplied

7HERE8ORE, the petition is GRANTED( he Court of 'ppeals Decision ordering thecollation of the propert& donated to petitioner, 'melia ( 'rellano, to the estate of the deceased

'ngel ( Pascual, %r( is set aside(

Iet the records of the case .e R@"'D@D to the court of origin, Branch 15 of the "aEati

Regional rial Court, which is ordered to conduct further proceedings in the case for the purpose

of determining what finall& forms part of the estate, and thereafter to divide whatever remains ofit e2uall& among the parties(



SO ORDERED.

8IRST DIVISION

[ G.R. N. 126?;6, N&3-&' 20, 200? ]SPO!SES <ERNARDO <!ENAVENT!RA AND CONSOLACION #OA!IN,

SPO!SES #!ANITO EDRA AND NORA #OA!IN, SPO!SES R!8INO

VALDO" AND EA #OA!IN, AND NATIVIDAD #OA!IN,

PETITIONERS, VS. CO!RT O8 APPEALS, SPO!SES LEONARDO

#OA!IN AND 8ELICIANA LANDRITO, SPO!SES 8IDEL #OA!IN AND

CONCHITA <ERNARDO, SPO!SES TOAS #OA!IN AND SOLEDAD

ALCORAN, SPO!SES ARTEIO #OA!IN AND SOCORRO ANGELES,

SPO!SES ALEBANDER ENDO"A AND CLARITA #OA!IN, SPO!SES

TELES8ORO CARREON AND 8ELICITAS #OA!IN, SPO!SES DANILO

VALDO" AND 8E #OA!IN, AND SPO!SES GAVINO #OA!IN AND LEAASIS, RESPONDENTS.

D E C I S I O N

CARPIO, #.$

T%& C)s&

his is a petition for review on certiorari1! to annul the Decision#! dated # %une 199 of theCourt of 'ppeals in C')*(R( C+ o( 4199( he Court of 'ppeals affirmed the Decision! dated

1- Ae.ruar& 199 rendered .& Branch 5 of the Regional rial Court of "aEati 6:trial court: inCivil Case o( -9)5174( he trial court dismissed the case after it found that the parties e?ecuted

the Deeds of 0ale for valid consideration and that the plaintiffs did not have a cause of actionagainst the defendants(

T%& 8)(ts

he Court of 'ppeals summari3ed the facts of the case as follows/

Defendant spouses Ieonardo %oa2uin and Aeliciana Iandrito are the parents of plaintiffsConsolacion, ora, @mma and atividad as well as of defendants Aidel, omas, 'rtemio, Clarita,

Aelicitas, Ae, and *avino, all surnamed %<'LG( he married %oa2uin children are oined in

this action .& their respective spouses(

0ought to .e declared null and void a. initio are certain deeds of sale of real propert& e?ecuted

.& defendant parents Ieonardo %oa2uin and Aeliciana Iandrito in favor of their co)defendant

children and the corresponding certificates of title issued in their names, to wit/

1.Deed of '.solute 0ale covering Iot 1-)C)7 of su.division plan 6IRC Psd)#595

e?ecuted on 11 %ul& 197-, in favor of defendant Aelicitas %oa2uin, for a consideration of

P,$$$($$ 6@?h( :C:, pursuant to which C o( 11F)17#! was issued in her name

6@?h( :C)1:=

2.Deed of '.solute 0ale covering Iot 1-)) of su.division plan 6IRC Psd)#594

e?ecuted on 7 %une 1979, in favor of defendant Clarita %oa2uin, for a consideration ofP1#!,$$$($$ 6@?h( :D:, pursuant to which C o( 0)1$977# was issued in her name

6@?h( :D)1:=

3.Deed of '.solute 0ale covering Iot 1-))1 of su.division plan 6IRC Psd)#594

e?ecuted on 1# "a& 19--, in favor of defendant spouses Aidel %oa2uin and Conchita



Bernardo, for a consideration of P54,!$$($$ 6@?h( :@:, pursuant to which C o(

155#9 was issued to them 6@?h( :@)1:=

4.Deed of '.solute 0ale covering Iot 1-))# of su.division plan 6IRC Psd)#594

e?ecuted on 1# "a& 19--, in favor of defendant spouses 'rtemio %oa2uin and 0ocorro

'ngeles, for a consideration of P54,!$$($$ 6@?h( :A:, pursuant to which C o(155$ was issued to them 6@?h( :A)1:= and

5.'.solute 0ale of Real Propert& covering Iot 1-)C)4 of su.division plan 6IRC Psd)

#595 e?ecuted on 9 0eptem.er 19--, in favor of omas %oa2uin, for a consideration of

P#$,$$$($$ 6@?h( :*:, pursuant to which C o( 157#$ was issued in her name 6@?h(

:*)1:(( Deed of '.solute 0ale covering Iot 1-)C)1 of su.division plan 6IRC Psd)#595 e?ecuted

on 7 <cto.er 19--, in favor of *avino %oa2uin, for a consideration of P#5,$$$($$ 6@?h( ::,

pursuant to which C o( 157779 was issued in his name 6@?h( :)1:(!

n seeEing the declaration of nullit& of the aforesaid deeds of sale and certificates of title,

plaintiffs, in their complaint, aver/) MM)

The deeds of sale, Annexes "C," "D," "E," "F," and "G," [and "K"] are simulated as

they are, are NULL AND VOID AB INITIO because -

a Airstl&, there was no actual valid consideration for the deeds of sale ??? over the

properties in litis=

. 0econdl&, assuming that there was consideration in the sums reflected in the 2uestioned

deeds, the properties are more than three)fold times more valua.le than the measl&sums appearing therein=

c hirdl&, the deeds of sale do not reflect and e?press the true intent of the parties

6vendors and vendees= and

d Aourthl&, the purported sale of the properties in litis was the result of a deli.erate

conspirac& designed to unustl& deprive the rest of the compulsor& heirs 6plaintiffs

herein of their legitime(

) MM ) ecessaril&, and as an inevita.le conse2uence, ransfer Certificates of itle os( 11F)17#,

0)1$977#, 155#9, 155$, 157#$ and 157779! issued .& the Registrar of Deeds over the

properties in litis ??? are GII 'D +<D 'B <(

Defendants, on the other hand aver 61 that plaintiffs do not have a cause of action against them

as well as the re2uisite standing and interest to assail their titles over the properties in litis= 6#

that the sales were with sufficient considerations and made .& defendants parents voluntaril&, ingood faith, and with full Enowledge of the conse2uences of their deeds of sale= and 6 that the

certificates of title were issued with sufficient factual and legal .asis(4! 6@mphasis in the original

T%& Ru*g + t%& T') Cu't

Before the trial, the trial court ordered the dismissal of the case against defendant spouses*avino %oa2uin and Iea 'sis(5! nstead of filing an 'nswer with their co) defendants, *avino%oa2uin and Iea 'sis filed a "otion to Dismiss(! n granting the dismissal to *avino %oa2uin

and Iea 'sis, the trial court noted that :compulsor& heirs have the right to a

legitime .ut such

right is contingent since said right commences onl& from the moment of death of the decedent pursuant to 'rticle 777 of the Civil Code of the Philippines(:7!



'fter trial, the trial court ruled in favor of the defendants and dismissed the complaint( he trial

court stated/

n the first place, the testimon& of the defendants, particularl& that of the ??? father will showthat the Deeds of 0ale were all e?ecuted for valua.le consideration( his assertion must prevail

over the negative allegation of plaintiffs(

'nd then there is the argument that plaintiffs do not have a valid cause of action against

defendants since there can .e no legitime to speaE of prior to the death of their parents( he court

finds this contention tena.le( n determining the legitime, the value of the propert& left at thedeath of the testator shall .e considered 6'rt( 9$- of the ew Civil Code( 8ence, the legitime of

a compulsor& heir is computed as of the time of the death of the decedent( Plaintiffs therefore

cannot claim an impairment of their legitime while their parents live(

'll the foregoing considered, this case is D0"00@D(

n order to preserve whatever is left of the ties that should .ind families together, the

counterclaim is liEewise D0"00@D(

o costs(

0< <RD@R@D(-!

T%& Ru*g + t%& Cu't + A&)s

he Court of 'ppeals affirmed the decision of the trial court( he appellate court ruled/

o the mind of the Court, appellants are sEirting the real and decisive issue in this case, which is,

whether ??? the& have a cause of action against appellees(

Gpon this point, there is no 2uestion that plaintiffs)appellants, liEe their defendant .rothers and

sisters, are compulsor& heirs of defendant spouses, Ieonardo %oa2uin and Aeliciana Iandrito,who are their parents( 8owever, their right to the properties of their defendant parents, as

compulsor& heirs, is merel& inchoate and vests onl& upon the latter;s death( >hile still alive,

defendant parents are free to dispose of their properties, provided that such dispositions are notmade in fraud of creditors(

Plaintiffs)appellants are definitel& not parties to the deeds of sale in 2uestion( either do the&

claim to .e creditors of their defendant parents( Conse2uentl&, the& cannot .e considered as real parties in interest to assail the validit& of said deeds either for gross inade2uac& or lacE of

consideration or for failure to e?press the true intent of the parties( n point is the ruling of the

0upreme Court in +elarde, et al( vs( Pae3, et al(, 1$1 0CR' 7, thus/

he plaintiffs are not parties to the alleged deed of sale and are not principall& or su.sidiaril&

.ound there.&= hence, the& have no legal capacit& to challenge their validit&(

Plaintiffs)appellants anchor their action on the supposed impairment of their

legitime .& the

dispositions made .& their defendant parents in favor of their defendant .rothers and sisters( But,

as correctl& held .& the court a 2uo, :the

legitime of a compulsor& heir is computed as of the timeof the death of the decedent( Plaintiffs therefore cannot claim an impairment of

their legitime while their parents live(:

>ith this posture taEen .& the Court, consideration of the errors assigned .& plaintiffs)appellants

is inconse2uential(

>8@R@A<R@, the decision appealed from is here.& 'AAR"@D, with costs against plaintiffs)

appellants(

0< <RD@R@D(9!

8ence, the instant petition(



Issu&s

Petitioners assign the following as errors of the Court of 'ppeals/

1.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ C<+@K'C@

LG@0< 8'D < +'ID C<0D@R'<(

2.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' @+@ '00G"*

8' 8@R@ >'0 ' C<0D@R'<, 8@ 0'"@ 0 *R<00IK 'D@LG'@(

3.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ D@@D0 <A

0'I@ D< < @MPR@00 8@ RG@ @ <A 8@ P'R@0(

4.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' 8@ C<+@K'C@

>'0 P'R 'D P'RC@I <A ' C<0PR'CK '"@D ' G%G0IK D@PR+*

8@ R@0 <A 8@ C8IDR@ <A 8@ 0P<G0@0 I@<'RD< %<'LG 'D

A@IC'' I'DR< <A 8@R @R@0 <+@R 8@ 0GB%@CPR<P@R@0(

5.8@ C<GR <A 'PP@'I0 @RR@D < 8<ID* 8' P@<@R0 8'+@

' *<<D, 0GAAC@ 'D +'ID C'G0@ <A 'C< '*'0 8@ PR+'@

R@0P<D@0(1$!

T%& Ru*g + t%& Cu't

>e find the petition without merit(

>e will discuss petitioners; legal interest over the properties su.ect of the Deeds of 0ale .eforediscussing the issues on the purported lacE of consideration and gross inade2uac& of the prices of

the Deeds of 0ale(

Whether Petitioners have a legal interest

over the properties subject of the Deeds of Sale

Petitioners; Complaint .etra&s their motive for filing this case( n their Complaint, petitioners

asserted that the :purported sale of the properties in litis was the result of a deli.erate conspirac&

designed to unustl& deprive the rest of the compulsor& heirs 6plaintiffs herein of their

legitime(:

Petitioners; strateg& was to have the Deeds of 0ale declared void so that ownership of the lotswould eventuall& revert to their respondent parents( f their parents die still owning the lots,

petitioners and their respondent si.lings will then co)own their parents; estate .& hereditar&

succession(11!

t is evident from the records that petitioners are interested in the properties su.ect of the Deeds

of 0ale, .ut the& have failed to show an& legal right to the properties( he trial and appellatecourts should have dismissed the action for this reason alone( 'n action must .e prosecuted in

the name of the real part&)in)interest(1#!

!he 2uestion as to :real part&)in)interest: is whether he is :the part& who would .e .enefitted

or inured .& the udgment, or the Npart& entitled to the avails of the suit(;:

? ? ?

n actions for the annulment of contracts, such as this action, the real parties are those who are parties to the agreement or are .ound either principall& or su.sidiaril& or are preudiced in their

rights with respect to one of the contracting parties and can show the detriment which would positivel& result to them from the contract even though the& did not intervene in it 6.aOe3 v(

8ongEong 0hanghai BanE, ## Phil( 57# 191#! ???(

hese are parties with :a present su.stantial interest, as distinguished from a mere e?pectanc& or



future, contingent, su.ordinate, or conse2uential interest(((( he phrase Npresent su.stantial

interest; more concretel& is meant such interest of a part& in the su.ect matter of the action as

will entitle him, under the su.stantive law, to recover if the evidence is sufficient, or that he hasthe legal title to demand and the defendant will .e protected in a pa&ment to or recover& .&

him(:1!

Petitioners do not have an& legal interest over the properties su.ect of the Deeds of 0ale( 's theappellate court stated, petitioners; right to their parents; properties is merel& inchoate and vests

onl& upon their parents; death( >hile still living, the parents of petitioners are free to dispose of

their properties( n their over3ealousness to safeguard their future legitime, petitioners forget thattheoreticall&, the sale of the lots to their si.lings does not affect the value of their parents; estate(

>hile the sale of the lots reduced the estate, cash of e2uivalent value replaced the lots taEen from

the estate(

Whether the Deeds of Sale are void

for lack of consideration

Petitioners assert that their respondent si.lings did not actuall& pa& the prices stated in the Deeds

of 0ale to their respondent father( hus, petitioners asE the court to declare the Deeds of 0ale

void(

' contract of sale is not a real contract, .ut a consensual contract( 's a consensual contract, a

contract of sale .ecomes a .inding and valid contract upon the meeting of the minds as to price(f there is a meeting of the minds of the parties as to the price, the contract of sale is valid,

despite the manner of pa&ment, or even the .reach of that manner of pa&ment( f the real price is

not stated in the contract, then the contract of sale is valid .ut su.ect to reformation( f there is

no meeting of the minds of the parties as to the price, .ecause the price stipulated in the contractis simulated, then the contract is void(14! 'rticle 1471 of the Civil Code states that if the price in

a contract of sale is simulated, the sale is void(

t is not the act of pa&ment of price that determines the validit& of a contract of sale( Pa&ment of

the price has nothing to do with the perfection of the contract( Pa&ment of the price goes into the

performance of the contract( Aailure to pa& the consideration is different from lacE ofconsideration( he former results in a right to demand the fulfillment or cancellation of the

o.ligation under an e?isting valid contract while the latter prevents the e?istence of a valid

contract(15!

Petitioners failed to show that the prices in the Deeds of 0ale were a.solutel& simulated( o

prove simulation, petitioners presented @mma %oa2uin +aldo3;s testimon& stating that their

father, respondent Ieonardo %oa2uin, told her that he would transfer a lot to her through a deed

of sale without need for her pa&ment of the purchase price(1!he trial court did not find theallegation of a.solute simulation of price credi.le( Petitioners; failure to prove a.solute

simulation of price is magnified .& their lacE of Enowledge of their respondent si.lings; financialcapacit& to .u& the 2uestioned lots(17! <n the other hand, the Deeds of 0ale which petitioners

presented as evidence plainl& showed the cost of each lot sold( ot onl& did respondents; minds

meet as to the purchase price, .ut the real price was also stated in the Deeds of 0ale( 's of the

filing of the complaint, respondent si.lings have also full& paid the price to their respondentfather(1-!

Whether the Deeds of Sale are void

for gross inadequacy of price

Petitioners asE that assuming that there is consideration, the same is grossl& inade2uate as toinvalidate the Deeds of 0ale(

'rticles 155 of the Civil Code states/'rt( 155( @?cept in cases specified .& law, lesion or inadequacy of cause shall not invalidate a

contract , unless there has .een fraud, mistaEe or undue influence( 6@mphasis supplied



'rticle 147$ of the Civil Code further provides/

'rt( 147$( Gross inadequacy of price does not affect a contract of sale, e?cept as ma& indicate a

defect in the consent, or that the parties reall& intended a donation or some other act or contract(6@mphasis supplied

Petitioners failed to prove an& of the instances mentioned in 'rticles 155 and 147$ of the Civil

Code which would invalidate, or even affect, the Deeds of 0ale( ndeed, there is no re2uirementthat the price .e e2ual to the e?act value of the su.ect matter of sale( 'll the respondents

.elieved that the& received the commutative value of what the& gave( 's we stated in Vales v.

Villa/ 19!

Courts cannot follow one ever& step of his life and e?tricate him from .ad .argains, protect him

from unwise investments, relieve him from one)sided contracts, or annul the effects of foolish

acts( Courts cannot constitute themselves guardians of persons who are not legall& incompetent(

Courts operate not .ecause one person has .een defeated or overcome .& another, .ut .ecause hehas .een defeated or overcome illegally( "en ma& do foolish things, maEe ridiculous contracts,

use misera.le udgment, and lose mone& .& them ) indeed, all the& have in the world= .ut not for

that alone can the law intervene and restore( here must .e, in addition, a violation of the law,

the commission of what the law Enows as an actionable wrong, .efore the courts are authori3edto la& hold of the situation and remed& it( 6@mphasis in the original

"oreover, the factual findings of the appellate court are conclusive on the parties and carr&greater weight when the& coincide with the factual findings of the trial court( his Court will not

weigh the evidence all over again unless there has .een a showing that the findings of the lower

court are totall& devoid of support or are clearl& erroneous so as to constitute serious a.use ofdiscretion(#$! n the instant case, the trial court found that the lots were sold for a valid

consideration, and that the defendant children actuall& paid the purchase price stipulated in their

respective Deeds of 0ale( 'ctual pa&ment of the purchase price .& the .u&er to the seller is a

factual finding that is now conclusive upon us(

7HERE8ORE, we A88IR the decision of the Court of 'ppeals in toto( SO ORDERED.

8IRST DIVISION

[ G.R. N. 65:00, O(t-&' 0?, 19:6 ]PARTEN"A L!CERNA VDA. DE T!PAS, PETITIONERAPPELLANT, VS.

<RANCH BLIII O8 THE HON. REGIONAL TRIAL CO!RT O8 NEGROS

OCCIDENTAL, RESPONDENT, AND T!PAS 8O!NDATION, INC., PRIVATE

RESPONDENTAPPELLEE.

D E C I S I O N

NARVASA, #.$

nvolved in this appeal is the 2uestion of whether or not a donation inter vivos .& a donor now

deceased is inofficious and should .e reduced at the instance of the donor;s widow(@pifanio R( upas died on 'ugust #$, 197- in Bacolod Cit&, childless, leaving his widow,

Parten3a Iucerna, as his onl& surviving compulsor& heir( 8e also left a will dated "a& 1-, 197,

which was admitted to pro.ate on 0eptem.er $, 19-$ in 0pecial Proceedings o( 1994 of theCourt of Airst nstance of egros <ccidental( 'mong the assets listed in his will were lots os(

-7, -- and -9 of the 0aga& Cadastre, admittedl& his private capital( 8owever, at the time of

his death, these lots were no longer owned .& him, he having donated them the &ear .efore 6on

'ugust #, 1977 to the upas Aoundation, nc(, which had thereafter o.tained title to said lots(Claiming that said donation had left her practicall& destitute of an& inheritance, upas; widow

.rought suit against upas Aoundation, nc( in the same Court of Airst nstance of egros

<ccidental 6docEeted as Civil Case o( 1$-9 to have the donation declared inofficious insofaras it preudiced her legitime, therefore reduci.le :Q Q Q .& one)half or such proportion as Q Q Q

6might .e deemed ustified Q Q Q: and :Q Q Q the resulting deduction Q Q Q: restored and

conve&ed or delivered to her( he complaint also pra&ed for attorne&;s fees and such other reliefas might .e proper(



he rial Court did not see things her wa&( Gpon the facts a.ove stated, on which the parties

stipulated[1], said Court dismissed the complaint for lacE of merit, reecting her claim on several

grounds, vi3(/:Q Q Q 61 'rticle 9$$ relied upon .& plaintiff is not applica.le .ecause the properties which were

disposed of .& wa& of donation one &ear .efore the death of @pifanio upas were no longer part

of his hereditar& estateat the time of his death on 'ugust #$, 197-= 6# the donated propertieswere @pifanio;s capital or separate estate= and 6 upas Aoundation, nc( .eing a stranger and not

a compulsor& heir, the donation inter vivosmade in its favor was not su.ect to collation under

'rt( 1$1, C(C(:[2]

he rial Court is in error on all counts and must .e reversed(

' person;s prerogative to maEe donations is su.ect to certain limitations, one of which is that he

cannot give .& donation more than he can give .& will 6'rt( 75#, Civil Code[3]( f he does, somuch of what is donated as e?ceeds what he can give .& will is deemed inofficious and the

donation is reduci.le to the e?tent of such e?cess, though without preudice to its taEing effect in

the donor;s lifetime or the donee;s appropriating the fruits of the thing donated 6'rt( 771, CivilCode( 0uch a donation is, moreover, collationa.le, that is, its value is imputa.le into the

hereditar& estate of the donor at the time of his death for the purpose of determining the legitimeof the forced or compulsor& heirs and the freel& disposa.le portion of the estate( his is true as

well of donations to strangers as of gifts to compulsor& heirs, although the language of 'rticle1$1 of the Civil Code would seem to limit collation to the latter class of donations( 'nd this

has .een held to .e a long)esta.lished rule in Iigue3 vs( 8onora.le Court of 'ppeals, et al(, [4],

where this Court said/:Q Q Q 8ence, the forced heirs are entitled to have the donation set aside in so far as inofficious/

i(e(, in e?cess of the portion of free disposal 6Civil Code of 1--9, 'rticles , 45, computed as

provided in 'rticles -1- and -19, and .earing in mind that ;collationa.le gifts; under 'rticle -1-should include gifts made not onl& in favor of the forced heirs, .ut even those made in favor of

strangers, as decided .& the 0upreme Court of 0pain in its decisions of 4 "a& 1-99 and 1 %une

19$#( 0o that in computing the legitimes, the value of the propert& donated to herein appellant,Conchita Iigue3, should .e considered part of the donor;s estate( <nce again, onl& the court oforigin has the re2uisite data to determine whether the donation is inofficious or not(:[5]

he fact, therefore, that the donated propert& no longer actuall& formed part of the estate of thedonor at the time of his death cannot .e asserted to prevent its .eing .rought to collation(

ndeed, it is an o.vious proposition that collation contemplates and particularl& applies to

gifts inter vivos[6]( he further fact that the lots donated were admittedl& capital separate propert&

of the donor is of no moment, .ecause a claim of inofficiousness does not assert that the donorgave what was not his, .ut that he gave more than what was within his power to give(

0ince it is clear that the 2uestioned donation is collationa.le and that, having .een made to a

stranger 6to the donor it is, .& law[7] chargea.le to the freel& disposa.le portion of the donor;s

estate, to .e reduced insofar as inofficious, i(e(, it e?ceeds said portion and thus impairs thelegitime of the compulsor& heirs, in order to find out whether it is inofficious or not, recourse

must .e had to the rules esta.lished .& the Civil Code for the determination of the legitime and, .& e?tension, of the disposa.le portion( hese rules are set forth in 'rticles 9$-, 9$9 and 91$ of

the Code, on the .asis of which the following step).&)step procedure has .een correctl& outlined/

61 determination of the value of the propert& which remains at the time of the testator;s death=

6# determination of the o.ligations, de.ts, and charges which have to .e paid out or deducted

from the value of the propert& thus left=

6 the determination of the difference .etween the assets and the lia.ilities, giving rise to thehereditar& estate=

64 the addition to the net value thus found, of the value, at the time the& were made, ofdonations su.ect to collation= and

65 the determination of the amount of the legitimes .& getting from the total thus found the

portion that the law provides as the legitime of each respective compulsor& heir ([8]

Deducting the legitimes from the net value of the hereditar& estate leaves the freel& disposa.le

portion .& which the donation in 2uestion here must .e measured( f the value of the donation at

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the time it was made does not e?ceed that difference, then it must .e allowed to stand( But if it

does, the donation is inofficious as to the e?cess and must .e reduced .& the amount of said

e?cess( n this case, if an& e?cess .e shown, it shall .e returned or reverted to the petitioner)appellant as the sole compulsor& heir of the deceased @pifanio R( upas(

Aor o.vious reasons, this determination cannot now .e made, as it re2uires appreciation of data

not .efore this Court and ma& necessitate the production of evidence in the Court a 2uo(7HERE8ORE, the appealed decision is reversed and petitioner)appellant Parten3a Iucerna

+da( de upas is adudged entitled to so much of the donated propert& in 2uestion, as ma& .e

found in e?cess of the freel& disposa.le portion of the estate of @pifanio B( upas, determined inthe manner a.ove)indicated( Iet the case .e remanded to the rial Court for further appropriate

proceedings in accordance with this decision(

SO ORDERED.

‘The rule regarding prescription cannot be pleaded

between them except when one heir openly and

adversely occupies the property for a period

sufficiently long to entitle him to ownership under

the law. In other words, as long as other heirs

acknowledge their ownership or do not set up any

adverse title to the property, prescription is

unavailable.’

$E(OND DI)I$ION

? G.R. No. 46, Jan:ar5 24, 12 @

RE). FR. )I(EN'E (ORONEL, RODOLFO (ORONEL, GERARDO

(ORONEL, $AN'O$ (ORONEL AND DOMINGA (ORONEL,

%E'I'IONER$, )$. +ON. (O&R' OF A%%EAL$, RE). FR.

R&$'I(O (&E)A$, %RI$(ILLANO (&E)A$, LO&RDE$ (&E)A$

$EBA$'IAN, NA'ALIA (&E)A$ GAR(IA AND BRIGIDA (&E)A$

J&DI, RE$%ONDEN'$.

D E ( I $ I O N

%ARA$, J.

'his is a petition for re(iew of the decision*of the ourt of )ppeals dated Nul% A1,

199! in ).+"/" ;o" 1AA12 entitled E/e(" @r" /ustico ue(as, et al", Plainti4s.

)ppellees (" /e(" @r" Iicente oronel, et al", Defendants.)ppellants,E which

con0rmed the decision of the trial court with slight modi0cation"

'he facts are as followsJ Z

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'he petitioners are the children and compulsor% heirs of the late +audencio oronelG

while the respondents are the children and compulsor% heirs of the late Suerubin

ue(as" #n turn, their respecti(e ascendants +audencio oronel and Suerubin

ue(as are the legitimate, e=clusi(e and compulsor% heirs of Bernarda Da(id >im

who died on Nune 2!, 19A in Betis, +uagua, Pampanga"

)mong the properties left b% Bernarda Da(id >im, sub*ect to a Deed of Partition and

+rant dated March 12, 19!, is a parcel of land situated at the Barrio of &an ;icolas,

Municipalit% of +uagua, Pro(ince of Pampanga, containing an area of 115$ s6uare

meters more or less designated as #tem ;o" I###"

#n accordance with the aforesaid deed, the lot in 6uestion was distributed and

ad*udicated as followsJ Z

Ea: A! s6uare meters to 'eodora 8enson, in consideration of the ser(ices rendered

to the late Bernarda >imG

b: 'he remaining portion of said lot clearl% remain a communit% propert% among

the heirs, that is, the part% of the 0rst part Bernarda &unglao and /osario &unglao:,

the part% of the second part Nose ue(as, Patricia ue(as, esar ue(as, atalina

ue(as and Suerubin ue(as: or the part% of the third part, +audenciooronel and

&al(ador oronelG and part% of the fourth part Bonifacia Da(id, and >ucia Da(id:"E

p" 5$, /ollo: nderscoring supplied:"

@urther, the father of the respondents was gi(en the right to occup% the whole lot as

his house where his famil% resides was built on lot 59?7 and inasmuch as the lot

shall remain intact sta%ing as a communit% propert% for ten 1!: %ears"

'hen on Nune 2, 1971 +audencio oronel % Da(id 0led an application for original

registration of title under )ct ;o" 9? swearing among others that he was the owner

in fee simple and the onl% one in occupation of the lot which resulted in Original

erti0cate of 'itle ;o" 577! dated @ebruar% 7, 1972" )fter +audencio oronel died,

his heirs, herein petitioners, e=ecuted a Deed of Partition among themsel(es and a

'ransfer erti0cate of 'itle ;o" 1519A1./ was issued in their names on December 7,

197$"

/espondents learned of this fraudulent transfer onl% on @ebruar% 19$ when ;atalia

ue(as.+arcia and her husband were being sued b% petitioners for unlawful

detainer before the Municipal 'rial ourt of +uagua, Pampanga, Branch ##, alleging

that on the strength of the aforestated '' ;o" 1519A1./ the% now ha(e a right to

e*ect the present occupants ;atalia ue(as.+arcia, her husband and famil%" &o the

ue(as clan sought the help of their baranga% court but the oronel clan refused to

gi(e up the lot in(ol(ed forcing the former to litigate"

'his led to herein respondents 0ling of i(il ase ;o" +.15AA entitled /e(" @r"

/ustico ue(as, et al", Plainti4s, (" /e(" @r" Iicente oronel, et al", Defendants, 0led

before the /egional 'rial ourt of +uagua, Pampanga, Branch >###, culminating in the

following dispositi(e portion of its decision dated Nul% 1$, 19$?, to witJ Z

EP/M#&& O;&#D/D, *udgment is hereb% rendered in fa(or of the plainti4s

against the defendants"

1: Ordering the defendants to recon(e% to the plainti4s one twel(e 1U12: portion of

the lot in 6uestion co(ered b% ''"

2: Ordering the defendants to pa% litigation e=penses in the amount of P1!,!!!"!!,

attorne%Fs fee in the amount of P5,!!!"!! and P2,!!!"!! appearance fees"



A: osts against the defendants"E p" 71, /ollo:

8erein petitioners appealed to the ourt of )ppeals, which rendered a decision, with

the following dispositi(e portionJ

E#n (iew of the foregoing, no re(ersible error ha(ing been found, the appeal is

dismissed" 'he decision is aCrmed with the modi0cation that the award of litigation

e=penses is reduced to ight 'housand P$,!!!"!!: Pesos"E

8ence, this petition with three assigned errorsJ Z

#

'he 8onorable ourt of )ppeals committed a serious error of law in not holding that

the action for recon(e%ance based on trust had prescribed andUor is barred b%

laches, because the action was brought more ten 1!: %ears after the repudiation of

the trustG

##

'he 8onorable ourt of )ppeals committed a serious error of law in not holding that

the present action constitutes a collateral attac on the transfer erti0cate of 'itle

which is not allowed b% lawG

###

'he 8onorable ourt of )ppeals committed a serious error of law in awarding

litigation e=penses, attorne%Fs fees and appearance fees, without maing e=press

0ndings of facts and law in (iolation of the rule that such 0ndings must be made to

*ustif% such awards" p" 1, /ollo:

all of which had pre(iousl% been correctl% answered b% the trial court and

respondent ourt of )ppeals"

'he petition is actuall% without merit"

'his case is go(erned b% )rticle 9 of the i(il ode, to witJ Z

E;o prescription shall run in fa(or of a co.owner or co.heir against his co.owners or

co.heirs so long as he e=pressl% or impliedl% recogni<es the co.ownership"E

) careful anal%sis of the instant action actuall% %ields a simple case" /ecords bear

out that herein petitioners merel% stepped into the shoes of their late father

+audencio oronel who co.owned together with the late father of the respondents

and others, the designated communit% of propert% ad*udicated b% their late

ancestor and ascendant Bernarda Da(id >im" 3hen +audencio oronel applied for

the 'orrens 'itle of the propert%, he was merel% the designated administrator, and

at the same time, one of the co.owners along with those enumerated in the 0rst,

second, third, and fourth parts" pp" 5$, ?2, /ollo:"

#n fact, the petitioners late father lied upon swearing in the aforesaid application

that he was the owner in fee simple and sole occupant of the lot in(ol(ed, the truth

of the matter being that all those %ears, it was the late Suerubin ue(as and famil%

who were occup%ing the lot" @or his misrepresentation the 'orrens 'itle was issued

which act should not be tolerated much less rewarded with the awarding of the

whole lot instead of being deser(ingl% punished" ;e(ertheless, the law is still lenient

to petitioners as the onl% EpunishmentE meted out to them despite the

aforementioned fraud of their late ascendant +audencio oronel: is the



recon(e%ance of 1U12 of the lot in 6uestion plus their being ordered to pa% damages

in the form of P$,!!!"!! litigation fees, P5,!!!"!! attorne%Fs fees, and P2,!!!"!!

appearance fees all dul% pro(en: instead of su4ering a forfeiture of an% part of the

lot the% share in common with respondents >ope<, et al" (s" +on<aga, et al", 1!

&/) 1?7 and araga%.>a%no (s" ), 1AA &/) 71$:"

Suoting from the respondentsF Memorandum dated )ugust 9, 1991 Z

E#n the case of ordo(a et al", (s" ordo(a, et al", >.99??, Nanuar% 1, 195$ this

8onorable ourt ruled Z

'he r:e re<ard!n< pre"cr!p!on canno -e

peaded -eeen he= eCcep hen one he!r

open5 and ad#er"e5 occ:p!e" he proper5or a per!od ":c!en5 on< o en!e h!= o

oner"h!p :nder he a. In oher ord", a"

on< a" oher he!r" acnoed<e he!r

oner"h!p or do no "e :p an5 ad#er"e !e

o he proper5, pre"cr!p!on !" :na#a!a-e.

Pursuant to the foregoing, it is necessar% that who pleads prescription against co.

owners or co.heirs, must be in possession and occup%ing the propert% openl% and

ad(ersel% to the e=clusion of his co.owner or co.heir" But in the instant case,

+audencio oronel and his children who are the herein petitioners are ne(er sic: in

possession of the propert% in 6uestion" )s a matter of fact, it is being occupied then

b% Suerubin ue(as and his famil%, respondents herein, up to the present time"

'hus, in the cases of &antos (s" 8eirs of risostomo, 1 Phil" A2 and Barga%o (s"

ommot ! Phil" $57 this 8onorable ourt held Z

R'he other re6uirement of prescription in fa(or of a co.owner is continuous, open,

peaceful, public ad(erse possession for a period of time re6uired under the law"

= = = =

#n this instant case, it is indubitable that +audencio oronel, the late father of the

herein petitioners, fraudulentl% depri(ed Suerubin ue(as, the late father of the

herein respondents, of his lawful share o(er the land in 6uestion when he solel%

applied for the registration of the whole lot in his name, nowingl% full% well that he

onl% owned One 'wel(e 1U12: share of >ot ;o" 5?97" 'he fraudulent acts

deliberatel% committed b% +audencio oronel directl% caused damage to Suerubin

ue(as and to his heirs" )s such the herein respondents are entitled to reco(er their

share and the damages the% su4ered"E pp"1?2.1?A, /ollo:



@urther, no one should enrich himself at the e=pense of another" A he co

oner" ho are he e<!!=aehe!r" "ho:d -e

<!#en he!r d:e "hare.

'hus, the appealed decision further statesJ

E#t bears repetition that in registering the lot in 6uestion e=clusi(el% in his name to

the e=clusion of the otherheirs the late +audencio oronel actuall% committed fraud

and misrepresentation with respect to that remaining portion of $A5 s6uare meters

owned b% him and the other co.heirs" #n the partition and grant the other co.

heirs who are entitled to the remaining portion are Bernarda &unglao, /osario

&unglao, the plainti4sheirs of Suerubin ue(as, Nose ue(as, Patria ue(as, esar

ue(as, atalina ue(as, +audencio oronel and &al(ador oronel, Bonifacia Da(id

and 0nall% >ucia Da(id, all twel(e 12: of them" ach of them owns 1U12 portion of

the lot in 6uestion"E Decision dated Nul% 1$, 19$? of /', Br" >###, +uagua,Pampanga, penned b% Nudge )braham )bonas:"

7+EREFORE, the decision of the ourt of )ppeals is hereb% )@@#/MD with costs

against petitioners"

$O ORDERED.

SECOND DIVISION

[ G.R. N. 129505, #)*u)'/ ?1, 2000 ]OCTAVIO S. ALOLES II, PETITIONER, VS. PACITA DE LOS RE=ES

PHILLIPS, RESPONDENT.

[G.R. NO. 1???59. #AN!AR= ?1, 2000]

OCTAVIO S. ALOLES II, PETITIONER, VS. CO!RT O8 APPEALS, HON.

8ERNANDO V. GOROSPE, #R., IN HIS O88ICIAL CAPACIT= AS

PRESIDING #!DGE O8 RTCAATI, <RANCH 61, AND PACITA

PHILLIPS AS THE ALLEGED EBEC!TRIB O8 THE ALLEGED 7ILL O8

THE LATE DR. ART!RO DE SANTOS, RESPONDENTS.

D E C I S I O N

ENDO"A, #.$

hese are petitions for review on certiorari of the decisions of the hirteenth and the 0pecial

@ighth Divisions of the Court of 'ppeals which ruled that petitioner has no right to intervene in

the settlement of the estate of Dr( 'rturo de 0antos( he cases were consolidated considering thatthe& involve the same parties and some of the issues raised are the same(

he facts which gave rise to these two petitions are as follows/

<n %ul& #$, 1995, Dr( 'rturo de 0antos, Ailipino and a resident of "aEati Cit&, filed a petition for

pro.ate of his will1! in the Regional rial Court, Branch 1, "aEati, docEeted as 0p( Proc( o(")4##( n his petition, Dr( De 0antos alleged that he had no compulsor& heirs= that he had

named in his will as sole legatee and devisee the 'rturo de 0antos Aoundation, nc(= that he

disposed .& his will his properties with an appro?imate value of not less than P#,$$$,$$$($$= and

that copies of said will were in the custod& of the named e?ecutri?, private respondent Pacita delos Re&es Phillips( ' cop& of the will#! was anne?ed to the petition for pro.ate(



<n Ae.ruar& 1, 199, %udge Aernando +( *orospe, %r( of RC)"aEati, Branch 1 issued an

order granting the petition and allowing the will( he order reads/<n $ 'ugust 1995, the Court issued an <rder setting the hearing of the petition on 1#

0eptem.er 1995, at -/$ oclocE in the morning, copies of which were served to 'rturo de

0antos Aoundation, nc( and "s( Pacita de los Re&es Phillips 6<fficers Return, dated $40eptem.er 1995 attached to the records( >hen the case was called for hearing on the date set,

no oppositor appeared nor an& written opposition was ever filed and on motion of petitioner, he

was allowed to adduce his evidence in support of the petition(

Petitioner personall& appeared .efore this Court and was placed on the witness stand and was

directl& e?amined .& the Court through :free wheeling: 2uestions and answers to give this Court

a .asis to determine the state of mind of the petitioner when he e?ecuted the su.ect will( 'fterthe e?amination, the Court is convinced that petitioner is of sound and disposing mind and not

acting on duress, menace and undue influence or fraud, and that petitioner signed his Iast >ill

and estament on his own free and voluntar& will and that he was neither forced nor influenced

.& an& other person in signing it(

Aurthermore, it appears from the petition and the evidence adduced that petitioner in his lifetime,e?ecuted his Iast >ill and estament 6@?hs( :':, :')1:, :')#:, :')4:, :')5: at his residence

situated at 9 Bauhinia corner ntsia 0treets, Aor.es ParE, "aEati Cit&= said Iast >ill and

estament was signed in the presence of his three 6 witnesses, namel&, to wit/ Dr( @lpidio+alencia 6@?hs( :'):, :')7:, :')-:, :')1:, :')1)':, 'tt&( @dward %( Berenguer 6@?hs( :')

:, :'))':, :')9:, :')1$:, :')11:, and 'tt&( +ictoria C( delos Re&es 6@?hs( :')1#:, :')

1:, :')14:, :')17:, :')1-:, who in turn, in the presence of the testator and in the presence

of each and all of the witnesses signed the said Iast >ill and estament and dul& notari3ed .efore otar& Pu.lic 'nna "elissa I( Rosario 6@?h( :')15:= on the actual e?ecution of the Iast

>ill and estament, pictures were taEen 6@?hs( :B: to :B):(

Petitioner has no compulsor& heirs and 'rturo de 0antos Aoundation, nc(, with address at o( 9

Bauhinia corner ntsia 0treets, Aor.es ParE, "aEati Cit& has .een named as sole legatee and

devisee of petitioners properties, real and personal, appro?imatel& valued at not less than P#million, "s( Pacita de los Re&es Phillips was designated as e?ecutor and to serve as such without

a .ond(

Arom the foregoing facts, the Court finds that the petitioner has su.stantiall& esta.lished thematerial allegations contained in his petition( he Iast >ill and estament having .een e?ecuted

and attested as re2uired .& law= that testator at the time of the e?ecution of the will was of sane

mind andFor not mentall& incapa.le to maEe a >ill= nor was it e?ecuted under duress or underthe influence of fear or threats= that it was in writing and e?ecuted in the language Enown and

understood .& the testator dul& su.scri.ed thereof and attested and su.scri.ed .& three 6

credi.le witnesses in the presence of the testator and of another= that the testator and all theattesting witnesses signed the Iast >ill and estament freel& and voluntaril& and that the testator

has intended that the instrument should .e his >ill at the time of affi?ing his signature thereto(

>8@R@A<R@, as pra&ed for .& the petitioner 6testator himself the petition for the allowance of the Iast >ill and estament of 'rturo de 0antos is here.& 'PPR<+@D and 'II<>@D(

0hortl& after the pro.ate of his will, Dr( De 0antos died on Ae.ruar& #, 199(

<n 'pril , 199, petitioner <ctavio 0( "aloles filed a motion for intervention claiming that,

as the onl& child of 'licia de 0antos 6testators sister and <ctavio I( "aloles, 0r(, he was the

sole full).looded nephew and nearest of Ein of Dr( De 0antos( 8e liEewise alleged that he was acreditor of the testator( Petitioner thus pra&ed for the reconsideration of the order allowing the

will and the issuance of letters of administration in his name(

<n the other hand, private respondent Pacita de los Re&es Phillips, the designated e?ecutri? of

the will, filed a motion for the issuance of letters testamentar& with Branch 1( Iater, however,



private respondent moved to withdraw her motion( his was granted, while petitioner was

re2uired to file a memorandum of authorities in support of his claim that said court 6Branch 1

still had urisdiction to allow his intervention(!

Petitioner filed his memorandum of authorities on "a& 1, 199( <n the other hand, private

respondent, who earlier withdrew her motion for the issuance of letters testamentar& in Branch1, refiled a petition for the same purpose with the Regional rial Court, "aEati, which was

docEeted as 0p( Proc( o( ")44 and assigned to Branch 5(

Gpon private respondents motion, %udge 0alvador '.ad 0antos of Branch 5 issued an order,

dated %une #-, 199, appointing her as special administrator of Dr( De 0antoss estate(

<n %ul& #9, 199, petitioner sought to intervene in 0p( Proc( o( ")44 and to set aside theappointment of private respondent as special administrator( 8e reiterated that he was the sole and

full .looded nephew and nearest of Ein of the testator= that he came to Enow of the e?istence of

0p( Proc( o( ")44 onl& .& accident= that the pro.ate proceedings in 0p( Proc( o( ")4##

.efore Branch 1 of the same court was still pending= that private respondent misdeclared thetrue worth of the testators estate= that private respondent was not fit to .e the special

administrator of the estate= and that petitioner should .e given letters of administration for theestate of Dr( De 0antos(

<n 'ugust #-, 199, %udge '.ad 0antos ordered the transfer of 0p( Proc( o( ")44 to Branch1, on the ground that :it! is related to the case .efore %udge *orospe of RC Branch 1 ( ( (:

t appears, however, that in 0p( Proc( o( ")4##, %udge *orospe had denied on 'ugust #,

199 petitioners motion for intervention( Petitioner .rought this matter to the Court of 'ppealswhich, in a decision4! promulgated on Ae.ruar& 1, 199-, upheld the denial of petitioners

motion for intervention(

"eanwhile, %udge *orospe issued an order, dated 0eptem.er 4, 199, returning the records of

0p( Proc( o( ")44 to Branch 5 on the ground that there was a pending case involving the

@state of Decedent 'rturo de 0antos pending .efore said court( he order reads/'cting on the <RD@R dated #- 'ugust 199 of Branch 5, this Court, transferring this case to

this Branch 1 on the ground that this case is related with a case .efore this Court, let this case

.e returned to Branch 5 with the information that there is no related case involving the @0'@

<A D@C@D@ 'RGR< D@ 0'<0 pending .efore this Branch(

here is, however, a case filed .& 'RGR< D@ 0'<0, as petitioner under Rule 7 of the

Rules of Court for the 'llowance of his will during his lifetime docEeted as 0P( PR<C( <( ")4## which was alread& decided on 1 Ae.ruar& 199 and has .ecome final(

t is noted on records of Case o( ")4## that after it .ecame final, herein Petitioner Pacita delos Re&es Phillips filed a "<< A<R 8@ 00G'C@ <A I@@R0 @0'"@'RK,

which was su.se2uentl& withdrawn after this Court, during the hearing, alread& ruled that the

motion could not .e admitted as the su.ect matter involves a separate case under Rule 7- of the

Rules of Court, and movant withdrew her motion and filed this case 6o( 44(

<ctavio de 0antos "aloles ! filed a "<< A<R @R+@< .efore Case o( ")

4## and this motion was alread& D@@D in the order 6Branch 1 of # 'ugust 199 liEewisefor the same grounds that the matter is for a separate case to .e filed under Rule 7- of the Rules

of Court and cannot .e included in this case filed under Rule 7 of the Rules of Court(

t is further noted that it is a matter of polic& that consolidation of cases must .e approved .& the

Presiding %udges of the affected Branches(

nitiall&, in his decision dated 0eptem.er #, 199,5! %udge '.ad 0antos appeared firm in his position that : ( ( ( it would .e improper for 6Branch 5 to hear and resolve the petition 60p(

Proc( o( ")44,: considering that the pro.ate proceedings were commenced with Branch 1(



8e thus ordered the transfer of the records .acE to the latter .ranch( 8owever, he later recalled

his decision and tooE cogni3ance of the case :to e?pedite the proceedings(: hus, in his <rder,

dated <cto.er #1, 199, he stated/Considering the refusal of the 8on( Aernando +( *orospe, %r( of Branch 1 to continue hearing

this case notwithstanding the fact that said .ranch .egan the pro.ate proceedings of the estate of

the deceased and must therefore continue to e?ercise its urisdiction to the e?clusion of all others,until the entire estate of the testator had .een partitioned and distri.uted as per <rder dated #

0eptem.er 199, this .ranch 6Regional rial Court Branch 5 shall taEe cogni3ance of the

petition if onl& to e?pedite the proceedings, and under the concept that the Regional rial Courtof "aEati Cit& is .ut one court(

Aurnish a cop& of this order to the <ffice of the Chief ustice and the <ffice of the Court

'dministrator, of the 0upreme Court= the 8on( Aernando +( *orospe, %r(= Pacita De Ios Re&esPhillips, Petitioner= and <ctavio de 0antos "aloles, ntervenor(

<n ovem.er 4, 199, %udge '.ad 0antos granted petitioners motion for intervention( Private

respondent moved for a reconsideration .ut her motion was denied .& the trial court( 0he then

filed a petition for certiorari in the Court of 'ppeals which, on Ae.ruar& #, 1997, rendered adecision! setting aside the trial courts order on the ground that petitioner had not shown an&

right or interest to intervene in 0p( Proc( o( ")44(

8ence, these petitions which raise the following issues/

1( >hether or not the 8onora.le Regional rial Court ) "aEati, Branch 1 has lost urisdiction to proceed with the pro.ate proceedings upon its issuance of an order

allowing the will of Dr( 'rturo de 0antos

#( >hether or not the 8onora.le 6Regional rial Court ) "aEati, Branch 5 ac2uired

urisdiction over the petition for issuance of letters testamentar& filed .& 6private

respondent(

( >hether or not the petitioner, .eing a creditor of the late Dr( 'rturo de 0antos, has a right

to intervene and oppose the petition for issuance of letters testamentar& filed .& therespondent(

4( >hether or not 6private respondent is guilt& of forum shopping in filing her petition for

issuance of letters testamentar& with the Regional rial Court ) "aEati, Branch 5

Enowing full& well that the pro.ate proceedings involving the same testate estate of thedecedent is still pending with the Regional rial Court ) "aEati, Branch 1(

First ( Petitioner contends that the pro.ate proceedings in Branch 1 of RC)"aEati did not

terminate upon the issuance of the order allowing the will of Dr( De 0antos( Citing the cases

of Santiesteban v. Santiesteban7! andTagle v. analo,-! he argues that the proceedings mustcontinue until the estate is full& distri.uted to the lawfulheirs, devisees, and legatees of the

testator, pursuant to Rule 7, S1 of the Rules of Court( Conse2uentl&, petitioner contends that

Branch 5 could not lawfull& act upon private respondents petition for issuance of letterstestamentar&(

he contention has no merit(

n cases for the pro.ate of wills, it is well)settled that the authorit& of the court is limited to

ascertaining the e?trinsic validit& of the will, i(e(, whether the testator, .eing of sound mind,freel& e?ecuted the will in accordance with the formalities prescri.ed .& law(9!

<rdinaril&, pro.ate proceedings are instituted onl& after the death of the testator, so much so that,

after approving and allowing the will, the court proceeds to issue letters testamentar& and settlethe estate of the testator( he cases cited .& petitioner are of such nature( n fact, in most

urisdictions, courts cannot entertain a petition for pro.ate of the will of a living testator under

the principle of am.ulator& nature of wills(1$!



8owever, 'rt( -- of the Civil Code authori3es the filing of a petition for pro.ate of the will

filed .& the testator himself( t provides/

Civil Code, 'rt( --( o will shall pass either real or personal propert& unless it is proved andallowed in accordance with the Rules of Court(

he testator himself ma&, during his lifetime, petition the court having urisdiction for theallowance of his will( n such case, the pertinent provisions of the Rules of Court for the

allowance of wills after the testators death shall govern(

he 0upreme Court shall formulate such additional Rules of Court as ma& .e necessar& for the

allowance of wills on petition of the testator(

0u.ect to the right of appeal, the allowance of the will, either during the lifetime of the testatoror after his death, shall .e conclusive as to its due e?ecution(

Rule 7, S1 liEewise provides/

0ec( 1 !"o may petition for t"e allo#ance of #ill ( ) 'n& e?ecutor, devisee, or legatee named in a

will, or an& other person interested in the estate, ma&, at an& time after the death of the testator, petition the court having urisdiction to have the will allowed, whether the same .e in his

possession or not, or is lost or destro&ed(

he testator himself ma&, during his lifetime, petition in the court for the allowance of his will(

he rationale for allowing the pro.ate of wills during the lifetime of testator has .een e?plained .& the Code Commission thus/

"ost of the cases that reach the courts involve either the testamentar& capacit& of the testator or

the formalities adopted in the e?ecution of wills( here are relativel& few cases concerning the

intrinsic validit& of testamentar& dispositions( t is far easier for the courts to determine themental condition of a testator during his lifetime than after his death( Araud, intimidation and

undue influence are minimi3ed( Aurthermore, if a will does not compl& with the re2uirements

prescri.ed .& law, the same ma& .e corrected at once( he pro.ate during the testators life,therefore, will lessen the num.er of contest upon wills( <nce a will is pro.ated during the

lifetime of the testator, the onl& 2uestions that ma& remain for the courts to decide after the

testators death will refer to the intrinsic validit& of the testamentar& dispositions( t is possi.le,of course, that even when the testator himself asEs for the allowance of the will, he ma& .e acting

under duress or undue influence, .ut these are rare cases(

'fter a will has .een pro.ated during the lifetime of the testator, it does not necessaril& meanthat he cannot alter or revoEe the same .efore his death( 0hould he maEe a new will, it would

also .e allowa.le on his petition, and if he should die .efore he has had a chance to present such

petition, the ordinar& pro.ate proceeding after the testators death would .e in order(11!

hus, after the allowance of the will of Dr( De 0antos on Ae.ruar& 1, 199, there was nothing

else for Branch 1 to do e?cept to issue a certificate of allowance of the will pursuant to Rule 7,

S1# of the Rules of Court( here is, therefore, no .asis for the ruling of %udge '.ad 0antos ofBranch 5 of RC)"aEati that )

Branch 1 of the Regional rial Court of "aEati having .egun the pro.ate proceedings of the

estate of the deceased, it continues and shall continue to e?ercise said urisdiction to the

e?clusion of all others( t should .e noted that pro.ate proceedings do not cease upon theallowance or disallowance of a will .ut continues up to such time that the entire estate of the

testator had .een partitioned and distri.uted(

he fact that the will was allowed during the lifetime of the testator meant merel& that the

partition and distri.ution of the estate was to .e suspended until the latters death( n other

words, the petitioner, instead of filing a new petition for the issuance of letters testamentar&,should have simpl& filed a manifestation for the same purpose in the pro.ate court(1#!

Petitioner, who defends the order of Branch 5 allowing him to intervene, cites Rule 7, S1

which states/

!"ere estate of deceased persons settled. ) f the decedent is an inha.itant of the Philippines at

the time of his death, whether a citi3en or an alien, his will shall .e proved, or letters of



administration granted, and his estate settled, in the Court of Airst nstance in the province in

which he resides at the time of his death, and if he is an inha.itant of a foreign countr&, the Court

of Airst nstance of an& province in which he had estate( he court first taEing cogni3ance of thesettlement of the estate of a decedent, shall e?ercise urisdiction to the e?clusion of all other

courts( he urisdiction assumed .& a court, so far as it depends on the place of residence of the

decedent, or of the location of his estate, shall not .e contested in a suit or proceeding, e?cept inan appeal from that court, in the original case, or when the want of urisdiction appears on the

record(

he a.ove rule, however, actuall& provides for the venue of actions for the settlement of theestate of deceased persons( n *arcia Aule v( Court of 'ppeals, it was held/1!

he afore2uoted 0ection 1, Rule 7 6formerl& Rule 75, 0ection 1, specificall& the clause :so far

as it depends on the place of residence of the decedent, or of the location of the state,: is in

realit& a matter of venue, as the caption of the Rule indicates/ :0ettlement of @state of DeceasedPersons( +enue and Processes(: t could not have .een intended to define the urisdiction over the

su.ect matter, .ecause such legal provision is contained in a law of procedure dealing merel&

with procedural matters( Procedure is one thing, urisdiction over the su.ect matter is another(

he power or authorit& of the court over the su.ect matter :e?isted was fi?ed .efore procedurein a given cause .egan(: hat power or authorit& is not altered or changed .& procedure, which

simpl& directs the manner in which the power or authorit& shall .e full& and ustl& e?ercised(here are cases though that if the power is not e?ercised conforma.l& with the provisions of the

procedural law, purel&, the court attempting to e?ercise it loses the power to e?ercise it legall&(

8owever, this does not amount to a loss of urisdiction over the su.ect matter( Rather, it meansthat the court ma& there.& lose urisdiction over the person or that the udgment ma& there.& .e

rendered defective for lacE of something essential to sustain it( he appearance of this provision

in the procedural law at once raises a strong presumption that it has nothing to do with the

urisdiction of the court over the su.ect matter( n plain words, it is ust a matter of method, ofconvenience to the parties(

ndeed, the urisdiction over pro.ate proceedings and settlement of estates with appro?imate

value of over P1$$,$$$($$ 6outside "etro "anila or P#$$,$$$($$ 6in "etro "anila .elongs tothe regional trial courts under B(P( Blg( 1#9, as amended( he different .ranches comprising each

court in one udicial region do not possess urisdictions independent of and incompati.le with

each other(14!

t is noteworth& that, although Rule 7, S1 applies insofar as the venue of the petition for pro.ate

of the will of Dr( De 0antos is concerned, it does not .ar other .ranches of the same court from

taEing cogni3ance of the settlement of the estate of the testator after his death( 's held in theleading case of $acalso v. %amolote/15!

he various .ranches of the Court of Airst nstance of Ce.u under the Aourteenth %udicial

District, are a coordinate and co)e2ual courts, and the totalit& of which is onl& one Court of Airstnstance( he urisdiction is vested in the court, not in the udges( 'nd when a case is filed in one

.ranch, urisdiction over the case does not attach to the .ranch or udge alone, to the e?clusion of

the other .ranches( rial ma& .e held or proceedings continue .& and .efore another .ranch or udge( t is for this reason that 0ection 57 of the %udiciar& 'ct e?pressl& grants to the 0ecretar& of

%ustice, the administrative right or power to apportion the cases among the different .ranches,

.oth for the convenience of the parties and for the coordination of the worE .& the different

.ranches of the same court( he apportionment and distri.ution of cases does not involve a grantor limitation of urisdiction, the urisdiction attaches and continues to .e vested in the Court of

Airst nstance of the province, and the trials ma& .e held .& an& .ranch or udge of the court(

ecessaril&, therefore, Branch 5 of the RC of "aEati Cit& has urisdiction over 0p( Proc( o(")44(

Second ( Petitioner claims the right to intervene in and oppose the petition for issuance of letterstestamentar& filed .& private respondent( 8e argues that, as the nearest ne?t of Ein and creditor of

the testator, his interest in the matter is material and direct( n ruling that petitioner has no right

to intervene in the proceedings .efore Branch 5 of RC)"aEati Cit&, the Court of 'ppeals held/he private respondent herein is not an heir or legatee under the will of the decedent 'rturo de

0antos( either is he a compulsor& heir of the latter( 's the onl& and nearest collateral relative of



the decedent, he can inherit from the latter onl& in case of intestac&( 0ince the decedent has left a

will which has alread& .een pro.ated and disposes of all his properties the private respondent

can inherit onl& if the said will is annulled( 8is interest in the decedents estate is, therefore, notdirect or immediate(

8is claim to .eing a creditor of the estate is a .elated one, having .een raised for the first timeonl& in his repl& to the opposition to his motion to intervene, and, as far as the records show, not

supported .& evidence(

( ( ( ( !he opposition must come from one with a direct interest in the estate or the will, and the

private respondent has none( "oreover, the ground cited in the private respondents opposition,

that the petitioner has deli.eratel& misdeclared the truth worth and value of the estate, is not

relevant to the 2uestion of her competenc& to act as e?ecutor( 0ection #, Rule 7 of the Rules ofCourt re2uires onl& an allegation of the pro.a.le value and character of the propert& of the

estate( he true value can .e determined later on in the course of the settlement of the estate(1!

Rule 79, S1 provides/

&pposition to issuance of letters testamentary. Simultaneous petition for administration. ) 'n& person interested in a will ma& state in writing the grounds wh& letters testamentar& should not

issue to the persons named therein as e?ecutors, or an& of them, and the court, after hearing uponnotice, shall pass upon the sufficienc& of such grounds( ' petition ma&, at the same time, .e filed

for letters of administration with the will anne?ed(

Gnder this provision, it has .een held that an :interested person: is one who would .e .enefited .& the estate, such as an heir, or one who has a claim against the estate, such as a creditor, and

whose interest is material and direct, not merel& incidental or contingent( 17!

@ven if petitioner is the nearest ne?t of Ein of Dr( De 0antos, he cannot .e considered an :heir: of the testator( t is a fundamental rule of testamentar& succession that one who has

no compulsor& or forced heirs ma& dispose of his entire estate .& will( hus, 'rt( -4# of the Civil

Code provides/<ne who has no compulsor& heirs ma& dispose .& will of all his estate or an& part of it in favor

of an& person having capacit& to succeed(

<ne who has compulsor& heirs ma& dispose of his estate provided he does not contravene the

provisions of this Code with regard to the legitimate of said heirs(

Compulsor& heirs are limited to the testators )

61 Iegitimate children and descendants, with respect to their legitimate parents and ascendants=

6# n default of the foregoing, legitimate parents and ascendants, with respect to their

legitimate children and descendants=

6 he widow or widower=

64 'cEnowledged natural children, and natural children .& legal fiction=

65 <ther illegitimate children referred to in 'rticle #-7 of the Civil Code(1-!

Petitioner, as nephew of the testator, is not a compulsor& heir who ma& have .een preterited in

the testators will(

or does he have an& right to intervene in the settlement proceedings .ased on his allegation thathe is a creditor of the deceased( 0ince the testator instituted or named an e?ecutor in his will, it is

incum.ent upon the Court to respect the desires of the testator( 's we stated in &zaeta v. Pecson/19!

he choice of his e?ecutor is a precious prerogative of a testator, a necessar& concomitant of his

right to dispose of his propert& in the manner he wishes( t is natural that the testator should

desire to appoint one of his confidence, one who can .e trusted to carr& out his wishes in thedisposal of his estate( he curtailment of this right ma& .e considered a curtailment of the right

to dispose(



<nl& if the appointed e?ecutor is incompetent, refuses the trust, or fails to give .ond ma& the

court appoint other persons to administer the estate(#$! one of these circumstances is present in

this case(

hird ( Petitioner contends that private respondent is guilt& of forum shopping when she filed the

petition for issuance of letters testamentar& 60p( Proc( o( ")44 while the pro.ate proceedings 60p( Proc( o( ")4## were still pending( 'ccording to petitioner, there is identit&

of parties, rights asserted, and reliefs pra&ed for in the two actions which are founded on the

same facts, and a udgment in either will result in res 'udicata in the other(

his contention has no merit( 's stated earlier, the petition for pro.ate was filed .& Dr( De

0antos, the testator, solel& for the purpose of authenticating his will( Gpon the allowance of his

will, the proceedings were terminated(

<n the other hand, the petition for issuance of letters testamentar& was filed .& private

respondent, as e?ecutor of the estate of Dr( De 0antos, for the purpose of securing authorit& from

the Court to administer the estate and put into effect the will of the testator( he estate settlement proceedings commenced .& the filing of the petition terminates upon the distri.ution and

deliver& of the legacies and devises to the persons named in the will( Clearl&, there is no identit& .etween the two petitions, nor was the latter filed during the pendenc& of the former( here was,

conse2uentl&, no forum shopping(

>8@R@A<R@, the petition is D@@D and the decisions of the Court of 'ppeals are here.&

'AAR"@D(

0< <RD@R@D(

SECOND DIVISION[ G.R. N. 1;;099, #u*& 0:, 2011 ]ED!ARDO G. AGTARAP, PETITIONER, VS. SE<ASTIAN AGTARAP,

#OSEPH AGTARAP, TERESA AGTARAP, 7ALTER DE SANTOS, AND

A<ELARDO DAGORO, RESPONDENTS.

[G.R. NO. 1;;192]

SE<ASTIAN G. AGTARAP, PETITIONER, VS. ED!ARDO G. AGTARAP,

#OSEPH AGTARAP, TERESA AGTARAP, 7ALTER DE SANTOS, AND

A<ELARDO DAGORO, RESPONDENTS.

D E C I S I O N

NACH!RA, #.$

Before us are the consolidated petitions for review on certiorari of petitioners 0e.astian *('gtarap 60e.astian 1!and @duardo *( 'gtarap 6@duardo, #! assailing the Decision dated

ovem.er #1, #$$ ! and the Resolution dated "arch #7, #$$7 4! of the Court of 'ppeals 6C'

in C')*(R( C+ o( 791(

he antecedent facts and proceedings))

<n 0eptem.er 15, 1994, @duardo filed with the Regional rial Court 6RC, Branch 114, Pasa&

Cit&, a verified petition for the udicial settlement of the estate of his deceased father %oa2uin

'gtarap 6%oa2uin( t was docEeted as 0pecial Proceedings o( 94)4$55(

he petition alleged that %oa2uin died intestate on ovem.er #1, 194 in Pasa& Cit& without an&



Enown de.ts or o.ligations( During his lifetime, %oa2uin contracted two marriages, first with

Iucia *arcia 6Iucia, 5! and second with Caridad *arcia 6Caridad( Iucia died on 'pril #4,

19#4( %oa2uin and Iucia had three children))%esus 6died without issue, "ilagros, and %ose6survived .& three children, namel&, *loria, ! %oseph, and eresa 7!( %oa2uin married Caridad

on Ae.ruar& 9, 19#( he& also had three children))@duardo, 0e.astian, and "ercedes 6survived

.& her daughter Cecile( 't the time of his death, %oa2uin left two parcels of land withimprovements in Pasa& Cit&, covered .& ransfer Certificates of itle 6C os( -7)6-#54

and -74)6-#55( %oseph, a grandson of %oa2uin, had .een leasing and improving the said

realties and had .een appropriating for himself P#,$$$($$ per month since 'pril 1994(

@duardo further alleged that there was an imperative need to appoint him as special administrator

to taEe possession and charge of the estate assets and their civil fruits, pending the appointment

of a regular administrator( n addition, he pra&ed that an order .e issued 6a confirming anddeclaring the named compulsor& heirs of %oa2uin who would .e entitled to participate in the

estate= 6. apportioning and allocating unto the named heirs their ali2uot shares in the estate in

accordance with law= and 6c entitling the distri.utees the right to receive and enter into

possession those parts of the estate individuall& awarded to them(

<n 0eptem.er #, 1994, the RC issued an order setting the petition for initial hearing anddirecting @duardo to cause its pu.lication(

<n Decem.er #-, 1994, 0e.astian filed his comment, generall& admitting the allegations in the petition, and conceding to the appointment of @duardo as special administrator(

%oseph, *loria, and eresa filed their answerFopposition( he& alleged that the two su.ect lots

.elong to the conugal partnership of %oa2uin with Iucia, and that, upon Iucia;s death in 'pril19#4, the& .ecame the pro indivisoowners of the su.ect properties( he& said that their

residence was .uilt with the e?clusive mone& of their late father %ose, and the e?penses of the

e?tensions to the house were shouldered .& *loria and eresa, while the restaurant 6"anong;sRestaurant was .uilt with the e?clusive mone& of %oseph and his .usiness partner( he&

opposed the appointment of @duardo as administrator on the following grounds/ 61 he is not

ph&sicall& and mentall& fit to do so= 6# his interest in the lots is minimal= and 6 he does not possess the desire to earn( he& claimed that the .est interests of the estate dictate that %oseph .e

appointed as special or regular administrator(

<n Ae.ruar& 1, 1995, the RC issued a resolution appointing @duardo as regular administratorof %oa2uin;s estate( Conse2uentl&, it issued him letters of administration(

<n 0eptem.er 1, 1995, '.elardo Dagoro filed an answer in intervention, alleging that "ercedesis survived not onl& .& her daughter Cecile, .ut also .& him as her hus.and( 8e also averred that

there is a need to appoint a special administrator to the estate, .ut claimed that @duardo is not the

person .est 2ualified for the tasE(

'fter the parties were given the opportunit& to .e heard and to su.mit their respective proposed

proects of partition, the RC, on <cto.er #, #$$$, issued an <rder of Partition, -! with the

following disposition))

n the light of the filing .& the heirs of their respective proposed proects of partition and the

pa&ment of inheritance ta?es due the estate as earl& as 195, and there .eing no claim in Courtagainst the estate of the deceased, the estate of %<'LG '*'R'P is now conse2uentl& ) ripe

) for distri.ution among the heirs minus the surviving spouse Caridad *arcia who died on'ugust #5, 1999(

Considering that the .ulE of the estate propert& were ac2uired during the e?istence of the second

marriage as shown .& C o( 6-#54 and C o( 6-#55 which showed on its face thatdecedent was married to Caridad *arcia, which fact oppositors failed to contradict .& evidence

other than their negative allegations, the greater part of the estate is perforce accounted .& the



second marriage and the compulsor& heirs thereunder(

he 'dministrator, @duardo 'gtarap rendered a true and ust accounting of his administrationfrom his date of assumption up to the &ear ending Decem.er 1, 199 per Ainancial and

'ccounting Report dated %une #, 1997 which was approved .& the Court( he accounting report

included the income earned and received for the period and the e?penses incurred in theadministration, sustenance and allowance of the widow( n accordance with said Ainancial and

'ccounting Report which was dul& approved .& this Court in its Resolution dated %ul& #-, 199-

) the deceased %<'LG '*'R'P left real properties consisting of the following/

I'D/

wo lots and two .uildings with one garage 2uarter located at T$$ 'gtarap 0t(, Pasa& Cit&,covered .& ransfer Certificate of itle os( -#54 and -#55 and registered with the Registr&

of Deeds of Pasa& Cit&, "etro "anila, descri.ed as follows/

C <( I< <( 'R@'F0L("( U<'I +'IG@ '"<G

-#54 745)B)1 1,5 s2( m( P5,$$$($$ P,75,$$$($$

-#55 745)B)# 1,1 s2( m( P5,$$$($$ P,55,$$$($$<'I)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) P1,$,$$$($$

BGID*0 'D "PR<+@"@0/

BGID* 6Iot T 745)B)1 )))))))))))))))))))))))))))))))))))))))) P5$,$$$($$

BGID* 6Iot T 745)B)# ))))))))))))))))))))))))))))))))))))))) #$,$$$($$Building mprovements )))))))))))))))))))))))))))))))))))))))))))))))) 97,5$$($$

Restaurant )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) -$,$$$($$

<'I ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) P-47,5$$($$<'I @ ><R8 ))))))))))))))))))))))))))))))))))))))))))))))) P14,177,5$$($$

>8@R@A<R@, the net assets of the estate of the late %<'LG '*'R'P with a total value of

P14,177,5$$($$, together with whatever interest from .anE deposits and all other incomes or

increments thereof accruing after the 'ccounting Report of Decem.er 1, 199, after deducting

therefrom the compensation of the administrator and other e?penses allowed .& the Court, arehere.& ordered distri.uted as follows/

<'I @0'@ ) P14,177,5$$($$

C'RD'D '*'R'P ) of the estate as her conugal share ) P7,$--,75$($$, the other half of

P7,$--,75$($$ ) to .e divided among the

compulsor& heirs as follows/

1 %<0@ 6deceased )P1,1-1,54-($

# "I'*R<0 6deceased )P1,1-1,54-($ "@RC@D@0 6deceased )P1,1-1,54-($

4 0@B'0' )P1,1-1,54-($

5 @DG'RD< )P1,1-1,54-($

C'RD'D )P1,1-1,54-($

he share of "ilagros 'gtarap as compulsor& heir in the amount of P1,1-1,54-($ and who diedin 199 will go to eresa 'gtarap and %oseph 'gtarap, >alter de 0antos and half .rothers

@duardo and 0e.astian 'gtarap in e2ual proportions(

@R@0' '*'R'P ) P#,#91(

%<0@P8 '*'R'P ) P#,#91(

>'I@R D@ 0'<0 ) P#,#91(



0@B'0' '*'R'P ) P#,#91(

@DG'RD< '*'R'P ) P#,#91(

%ose 'gtarap died in 197( 8is compulsor& heirs are as follows/

C<"PGI0<RK 8@R0 /

1*I<R' ) 6deceased ) represented .&

>alter de 0antos ))

) P#95,4(57

# %<0@P8 '*'R'P ) P#95,4(57

@R@0' '*'R'P ) P#95,4(57

4 PR0CII' '*'R'P ) P#95,4(57

8ence, Priscilla 'gtarap will inherit P#95,4(57(

'dding their share from "ilagros 'gtarap, the following heirs of the first marriage stand to

receive the total amount of/

8@R0 <A 8@ AR0 "'RR'*@/

1 %<0@P8 '*'R'P ) P#,#91( )share from "ilagros 'gtarap

P#95,4(57 ) as

compulsor& heir of

P51,5(# %ose 'gtarap

# @R@0' '*'R'P ) P#,#91( ) share from "ilagros 'gtarap

P#95,4(57 ) as

compulsor& heir of

P51,5(# %ose 'gtarap

>'I@R D@ 0'<0 ) P#,#91( ) share from "ilagros 'gtarap

P#95,4(57 ) as

compulsor& heir of P51,5(# %ose 'gtarap

8@R0 <A 8@ 0@C<D "'RR'*@/

a C'RD'D '*'R'P ) died on 'ugust #5, 1999

P7,$--,75$($$ ) as conugal share

P1,1-1,45-($ ) as

compulsor& heir

otal of P-,#7$,#$-($

. 0@B'0' '*'R'P )

P1,1-1,45-(-

) as compulsor& heir

P #,#91() share from "ilagros

c @DG'RD< '*'R'P )

P1,1-1,45-(-

) as compulsor& heir

P #,#91() share from "ilagros

d "@RC@D@0 ) as represented .& '.elardo Dagoro asthe surviving spouse of a compulsor& heir

P1,1-1,45-(-



R@"'* 8@R0 <A C'RD'D '*'R'P/

1 0@B'0' '*'R'P

# @DG'RD< '*'R'P

"@RC@D@0 '*'R'P 6Predeceased Caridad 'gtarap

n sum, 0e.astian 'gtarap and @duardo 'gtarap stand to inherit/

0@B'0' ) P4,15,1$4(1$ ) share from Caridad *arcia

P1,1-1,45-($ ) as compulsor& heir

P #,#91( ) share from "ilagros

P5,5##,-54($

@DG'RD< ) P4,15,1$4(1$ ) share from Caridad *arcia

P1,1-1,45-($ ) as

compulsor& heir P #,#91( ) share from "ilagros

P5,5##,-54($

0< <RD@R@D( 9!

@duardo, 0e.astian, and oppositors %oseph and eresa filed their respective motions forreconsideration(

<n 'ugust #7, #$$1, the RC issued a resolution 1$! den&ing the motions for reconsideration of

@duardo and 0e.astian, and granting that of %oseph and eresa( t also declared that the realestate properties .elonged to the conugal partnership of %oa2uin and Iucia( t also directed the

modification of the <cto.er #, #$$$ <rder of Partition to reflect the correct sharing of

the

heirs( 8owever, .efore the RC could issue a new order of partition, @duardo and 0e.astian .oth appealed to the C'(

<n ovem.er #1, #$$, the C' rendered its Decision, the dispositive portion of which reads))

7HERE8ORE, premises considered, the instant appeals are DISISSED for lacE of merit(

he assailed Resolution dated 'ugust #7, #$$1 is A88IRED and pursuant thereto, the su.ect

properties 6Iot o( 745)B)1 C o( -#54! and Iot o( 745)B)# C o( -#55! and theestate of the late %oa2uin 'gtarap are here.& partitioned as follows/

he two 6# properties, together with their improvements, em.raced .& C o( -#54 and C

o( -#55, respectivel&, are first to .e distri.uted among the following/

Iucia "endietta ) of the propert&( But since she is deceased, her share shall .einherited .& %oa2uin, %esus, "ilagros and %ose in e2ual shares(

%oa2uin 'gtarap ) of the propert& and J of the other half of the propert& which pertains to Iucia "endietta;s share(

%esus 'gtarap ) J of Iucia "endietta;s share( But since he is alread& deceased

6and died without issue, his inheritance shall, in turn, .eac2uired .& %oa2uin 'gtarap(

"ilagros 'gtarap ) J of Iucia "endietta;s share( But since she died in 199without issue, 5F- of her inheritance shall .e inherited .&

*loria 6represented .& her hus.and >alter de 0antos and her

daughter 0amantha, %oseph 'gtarap and eresa 'gtarap, 6inrepresentation of "ilagros; .rother %ose 'gtarap and 1F- each

shall .e inherited .& "ercedes 6represented .& her hus.and

'.elardo Dagoro and her daughter Cecile, 0e.astian @duardo,



all surnamed 'gtarap(

%ose 'gtarap ) J of Iucia "endietta;s share( But since he died in 197, hisinheritance shall .e ac2uired .& his wife Priscilla, and children

*loria 6represented .& her hus.and >alter de 0antos and her

daughter 0amantha, %oseph 'gtarap and eresa in e2ualshares(

hen, %oa2uin 'gtarap;s estate, comprising three)fourths 6F4 of the su.ect properties and itsimprovements, shall .e distri.uted as follows/

Caridad *arcia ) 1F of the estate( But since she died in 1999, her share shall .e

inherited .& her children namel& "ercedes 'gtarap6represented .& her hus.and '.elardo Dagoro and her

daughter Cecilia, 0e.astian 'gtarap and @duardo 'gtarap in

their own right, dividing the inheritance in e2ual shares(

"ilagros 'gtarap ) 1F of the estate( But since she died in 199 without issue, 5F-

of her inheritance shall .e inherited .& *loria 6represented .&her hus.and >alter de 0antos and her daughter 0amantha,

%oseph 'gtarap and eresa 'gtarap, 6in representation of

"ilagros; .rother %ose 'gtarap and 1F- each shall .e inherited .& "ercedes 6represented .& her hus.and '.elardo Dagoro

and her daughter Cecile, 0e.astian and @duardo, all surnamed

'gtarap(

%ose 'gtarap ) 1F of the estate( But since he died in 197, his inheritance

shall .e ac2uired .& his wife Priscilla, and children *loria

6represented .& her hus.and >alter de 0antos and her daughter 0amantha, %oseph 'gtarap and eresa 'gtarap in e2ual shares(

"ercedes 'gtarap ) 1F of the estate( But since she died in 19-4, her inheritanceshall .e ac2uired .& her hus.and '.elardo Dagoro and her

daughter Cecile in e2ual shares(

0e.astian 'gtarap ) 1F of the estate(

@duardo 'gtarap ) 1F of the estate(

SO ORDERED. 11!

'ggrieved, 0e.astian and @duardo filed their respective motions for reconsideration(

n its Resolution dated "arch #7, #$$7, the C' denied .oth motions( 8ence, these petitions

ascri.ing to the appellate court the following errors/

G.R. N. 1;;192

1( ) he Court of 'ppeals erred in not considering the aforementioned important facts 1#! whichalter its Decision=

#( ) he Court of 'ppeals erred in not considering the necessit& of hearing the issue oflegitimac& of respondents as heirs=

( ) he Court of 'ppeals erred in allowing violation of the law and in not appl&ing thedoctrines of collateral attacE, estoppel, and res udicata( 1!



G.R. N. 1;;099

8@ C<GR <A 'PP@'I0 6A<R"@R >@IA8 D+0< DD < 'CLGR@%GR0DC< <+@R 8@ @0'@ <A "I'*R<0 *( '*'R'P 'D @RR@D

D0RBG* 8@R 8@R'C@ AR<" 8@ @0'@ <A %<'LG '*'R'P

<>80'D* 8@ @M0@C@ <A 8@R I'0 >II 'D @0'"@ +<I'< <A 8@ D<CR@ <A PR@C@D@C@ <A @0'@ PR<C@@D*0 <+@R

@0'@ PR<C@@D*0(

(

8@ C<GR <A 'PP@'I0 6A<R"@R >@IA8 D+0< @RR@D D0"00*

8@ D@C0< 'PP@'I@D AR<" A<R I'C <A "@R 'D 'AAR"* 8@'00'I@D R@0<IG< D'@D 'G*G0 #7, #$$1 <A 8@ I<>@R C<GR 8<ID*

8' 8@ P'RC@I0 <A I'D C<+@R@D BK C <( -#54 'D C 6<( -#55 <A

8@ R@*0RK <A D@@D0 A<R 8@ CK <A P'0'K B@I<* < 8@ C<%G*'IP'R@R08P <A %<'LG '*'R'P "'RR@D < IGC' *'RC' "@D@'

<>80'D* 8@R R@*0R'< GD@R 8@R @M0*

C@RAC'@0 <A I@ '0 R@*0@R@D 8@ '"@ <A %<'LG'*'R'P, CASA(& C&) C'RD'D *'RC'( GD@R @M0* %GR0PRGD@C@,

8@ PR<B'@ C<GR 8'0 < P<>@R < D@@R"@ 8@ <>@R08P <A 8@

PR<P@RK D@0CRB@D 8@0@ C@RAC'@0 <A I@ >8C8 08<GID B@R@0<I+@D ' 'PPR<PR'@ 0@P'R'@ 'C< A<R ' <RR@0 I@ GD@R

8@ I'> 0 @D<>@D >8 C<@0'BIK GI 8'0 B@@ 0@ '0D@

8@ "'@R DC'@D 8@ I'> 0@IA( 14!

's regards his first and second assignments of error, 0e.astian contends that %oseph and eresa

failed to esta.lish .& competent evidence that the& are the legitimate heirs of their father %ose,

and thus of their grandfather %oa2uin( 8e draws attention to the certificate of title 6C o(-$# the& su.mitted, stating that the wife of their father %ose is Presentacion *arcia, while the&

claim that their mother is Priscilla( 8e avers that the marriage contracts proffered .& %oseph and

eresa do not 2ualif& as the .est evidence of %ose;s marriage with Priscilla, inasmuch as the&were not authenticated and formall& offered in evidence( 0e.astian also asseverates that he

actuall& 2uestioned the legitimac& of %oseph and eresa as heirs of %oa2uin in his motion to

e?clude them as heirs, and in his repl& to their opposition to the said motion( 8e further claims

that the failure of '.elardo Dagoro and >alter de 0antos to oppose his motion to e?clude themas heirs had the effect of admitting the allegations therein( 8e points out that his motion was

denied .& the RC without a hearing(

>ith respect to his third assigned error, 0e.astian maintains that the certificates of title of realestate properties su.ect of the controvers& are in the name of %oa2uin 'gtarap, married to

Caridad *arcia, and as such are conclusive proof of their ownership thereof, and thus, the& arenot su.ect to collateral attacE, .ut should .e threshed out in a separate proceeding for that

purpose( 8e liEewise argues that estoppel applies against the children of the first marriage, since

none of them registered an& o.ection to the issuance of the Cs in the name of Caridad and

%oa2uin onl&( 8e avers that the estate must have alread& .een settled in light of the pa&ment ofthe estate and inheritance ta? .& "ilagros, %oseph, and eresa, resulting to the issuance of C

o( -9#5 in "ilagros; name and of C o( -$# in the names of "ilagros and %ose( 8e also

alleges that res 'udicata is applica.le as the court order directing the deletion of the name ofIucia, and replacing it with the name of Caridad, in the Cs had long .ecome final and

e?ecutor&(

n his own petition, with respect to his first assignment of error, @duardo alleges that the C'

erroneousl& settled, together with the settlement of the estate of %oa2uin, the estates of Iucia,

%esus, %ose, "ercedes, *loria, and "ilagros, in contravention of the principle of settling onl& oneestate in one proceeding( 8e particularl& 2uestions the distri.ution of the estate of "ilagros in

the intestate proceedings despite the fact that a proceeding was conducted in another court for the



pro.ate of the will of "ilagros, .e2ueathing all to @duardo whatever share that she would

receive from %oa2uin;s estate( 8e states that this violated the rule on precedence of testate over

intestate proceedings(

'nent his second assignment of error, @duardo contends that the C' gravel& erred when it

affirmed that the .ulE of the realties su.ect of this case .elong to the first marriage of %oa2uin toIucia, notwithstanding that the certificates of title were registered in the name of %oa2uin

'gtarap casado con 6:married to: Caridad *arcia( 'ccording to him, the RC, acting as an

intestate court with limited urisdiction, was not vested with the power and authorit& todetermine 2uestions of ownership, which properl& .elongs to another court with general

urisdiction(

he !ourt"s #uling

's to 0e.astian;s and @duardo;s common issue on the ownership of the su.ect real properties,

we hold that the RC, as an intestate court, had urisdiction to resolve the same(

he general rule is that the urisdiction of the trial court, either as a pro.ate or an intestate court,

relates onl& to matters having to do with the pro.ate of the will andFor settlement of the estate ofdeceased persons, .ut does not e?tend to the determination of 2uestions of ownership that arise

during the proceedings( 15! he patent rationale for this rule is that such court merel& e?ercises

special and limited urisdiction( 1! 's held in several cases, 17! a pro.ate court or one in chargeof estate proceedings, whether testate or intestate, cannot adudicate or determine title to

properties claimed to .e a part of the estate and which are claimed to .elong to outside parties,

not .& virtue of an& right of inheritance from the deceased .ut .& title adverse to that of the

deceased and his estate( 'll that the said court could do as regards said properties is to determinewhether or not the& should .e included in the inventor& of properties to .e administered .& the

administrator( f there is no dispute, there poses no pro.lem, .ut if there is, then the parties, the

administrator, and the opposing parties have to resort to an ordinar& action .efore a courte?ercising general urisdiction for a final determination of the conflicting claims of title(

8owever, this general rule is su.ect to e?ceptions as ustified .& e?pedienc& and convenience(

Airst, the pro.ate court ma& provisionall& pass upon in an intestate or a testate proceeding the

2uestion of inclusion in, or e?clusion from, the inventor& of a piece of propert& without preudice

to the final determination of ownership in a separate action( 1-! 0econd, if the interested partiesare all heirs to the estate, or the 2uestion is one of collation or advancement, or the parties

consent to the assumption of urisdiction .& the pro.ate court and the rights of third parties are

not impaired, then the pro.ate court is competent to resolve issues on ownership( 19! +eril&, its

urisdiction e?tends to matters incidental or collateral to the settlement and distri.ution of theestate, such as the determination of the status of each heir and whether the propert& in the

inventor& is conugal or e?clusive propert& of the deceased spouse( #$!

>e hold that the general rule does not appl& to the instant case considering that the parties are

all heirs of %oa2uin and that no rights of third parties will .e impaired .& the resolution of the

ownership issue( "ore importantl&, the determination of whether the su.ect properties areconugal is .ut collateral to the pro.ate court;s urisdiction to settle the estate of %oa2uin(

t should .e remem.ered that when @duardo filed his verified petition for udicial settlement of%oa2uin;s estate, he alleged that the su.ect properties were owned .& %oa2uin and Caridad since

the Cs state that the lots were registered in the name of %oa2uin 'gtarap, married to Caridad*arcia( 8e also admitted in his petition that %oa2uin, prior to contracting marriage with Caridad,contracted a first marriage with Iucia( <ppositors to the petition, %oseph and eresa, however,

were a.le to present proof .efore the RC that C os( -#54 and -#55 were derived from a

mother title, C o( 5#9, dated "arch 17, 19#$, in the name of *%A)CISC& +ICT&%

$A%),S &A/0I) A1TA%AP2 el primero casado con ,milia uscat2 y el Segundo con 3ucia1arcia endietta 6AR'C0C< +C<R B'R@0 y %<'LG '*'R'P, the first married



to @milia "uscat, and the second married to Iucia *arcia "endietta( #1! >hen C o( 5#9

was divided .etween Arancisco Barnes and %oa2uin 'gtarap, C o( 1$-4, in the name of

%oa2uin 'gtarap, married to Iucia *arcia "endietta, was issued for a parcel of land, identified asIot o( 745 of the Cadastral 0urve& of Pasa&, Cadastral Case o( #, *(I(R(<( Cadastral Record

o( 1-, consisting of -,-7# s2uare meters( his same lot was covered .& C o( 5577

6#1-4##!

issued on 'pril #, 197, also in the name of %oa2uin 'gtarap, married to Iucia*arcia "endietta(

he findings of the RC and the C' show that Iucia died on 'pril #4, 19#4, and su.se2uentl&,on Ae.ruar& 9, 19#, %oa2uin married Caridad( t is worth& to note that C o( 5577 6#1-4

contained an annotation, which reads))

'p)49 ) <'/ 0e ha enmendado el presente certificado de titulo, tal como aparece,tanchando las pala.ras :con Iucia *arcia "endiett!a: & poniendo en su lugar, entre lineas & en

tinta encarnada, las pala.ras :en segundas nupcias con Caridad *arcia:, en complimiento de un

orden de fecha #- de a.ril de 197, dictada por el 8on( 0i?to de la Costa, ue3 del %u3gado dePrimera nstancia de Ri3al, en el e?pediente cadastal o( #, *(I(R(<( Cad( Record o( 1-=

copia de cual orden has sido presentada con el o( 49 del Ii.ro Diario, omo ($ &, archivada

en el Iegao )o( #1-4(

Pasig, Ri3al, a #9 a.ril de 197( #!

hus, per the order dated 'pril #-, 197 of 8on( 0i?to de la Costa, presiding udge of the Court

of Airst nstance of Ri3al, the phrase con 3ucia 1arcia endiet4t5a was crossed out and replaced

.& en segundas nuptias con Caridad 1arcia, referring to the second marriage of %oa2uin to

Caridad( t cannot .e gainsaid, therefore, that prior to the replacement of Caridad;s name in C o( #1-4, Iucia, upon her demise, alread& left, as her estate, one)half 61F# conugal share in

C o( #1-4( Iucia;s share in the propert& covered .& the said C was carried over to the

properties covered .& the certificates of title derivative of C o( #1-4, now C os( -#54and -#55( 'nd as found .& .oth the RC and the C', Iucia was survived .&

her compulsor& heirs ) %oa2uin, %esus, "ilagros, and %ose(

0ection #, Rule 7 of the Rules of Court provides that when the marriage is dissolved .& the

death of the hus.and or the wife, the communit& propert& shall .e inventoried, administered, and

li2uidated, and the de.ts thereof paid= in the testate or intestate proceedings of the deceased

spouse, and if .oth spouses have died, the conugal partnership shall .e li2uidated in the testateor intestate proceedings of either( hus, the RC had urisdiction to determine whether the

properties are conugal as it had to li2uidate the conugal partnership to determine the estate of

the decedent( n fact, should %oseph and eresa institute a settlement proceeding for the intestate

estate of Iucia, the same should .e consolidated with the settlement proceedings of %oa2uin, .eing Iucia;s spouse( #4! 'ccordingl&, the C' correctl& distri.uted the estate of Iucia, with

respect to the properties covered .& C os( -#54 and -#55 su.ect of this case, toher compulsor& heirs(

herefore, in light of the foregoing evidence, as correctl& found .& the RC and the C', the

claim of 0e.astian and @duardo that C os( -#54 and -#55 conclusivel& show that theowners of the properties covered therein were %oa2uin and Caridad .& virtue of the registration

in the name of %oa2uin 'gtarap casado con 6married to Caridad *arcia, deserves scant

consideration( his cannot .e said to .e a collateral attacE on the said Cs( ndeed, simple possession of a certificate of title is not necessaril& conclusive of a holder;s true ownership of

propert&( #5! ' certificate of title under the orrens s&stem aims to protect dominion= it cannot .eused as an instrument for the deprivation of ownership( #! hus, the fact that the properties wereregistered in the name of %oa2uin 'gtarap, married to Caridad *arcia, is not sufficient proof that

the properties were ac2uired during the spouses; coverture( #7! he phrase :married to Caridad

*arcia: in the Cs is merel& descriptive of the civil status of %oa2uin as the registered owner,and does not necessaril& prove that the realties are their conugal properties( #-!



either can 0e.astian;s claim that %oa2uin;s estate could have alread& .een settled in 195 after

the pa&ment of the inheritance ta? .e upheld( Pa&ment of the inheritance ta?, per se, does not

settle the estate of a deceased person( 's provided in 0ection 1, Rule 9$ of the Rules of Court))

0@C< 1( !"en order for distribution of residue made. )) >hen the de.ts, funeral charges,

and e?penses of administration, the allowance to the widow, and inheritance ta?, if an&,chargea.le to the estate in accordance with law, have .een paid, the court, on the application of

the e?ecutor or administrator, or of a person interested in the estate, and after hearing upon

notice, shall assign the residue of the estate to the persons entitled to the same, naming them andthe proportions, or parts, to which each is entitled, and such persons ma& demand and recover

their respective shares from the e?ecutor or administrator, or an& other person having the same in

his possession( f there is a controvers& .efore the court as to who are the lawful heirs of the

deceased person or as to the distri.utive share to which each person is entitled under the law, thecontrovers& shall .e heard and decided as in ordinar& cases(

o distri.ution shall .e allowed until the pa&ment of the o.ligations a.ove mentioned has .eenmade or provided for, unless the distri.utees, or an& of them, give a .ond, in a sum to .e fi?ed .&

the court, conditioned for the pa&ment of said o.ligations within such time as the court directs(

hus, an estate is settled and distri.uted among the heirs onl& after the pa&ment of the de.ts of

the estate, funeral charges, e?penses of administration, allowance to the widow, and inheritance

ta?( he records of these cases do not show that these were complied with in 195(

's regards the issue raised .& 0e.astian on the legitimac& of %oseph and eresa, suffice it to sa&

that .oth the RC and the C' found them to .e the legitimate children of %ose( he RC found

that 0e.astian did not present clear and convincing evidence to support his averments in hismotion to e?clude them as heirs of %oa2uin, aside from his negative allegations( he RC also

noted the fact of %oseph and eresa .eing the children of %ose was never 2uestioned .& 0e.astian

and @duardo, and the latter two even admitted this in their petitions, as well as in the stipulationof facts in the 'ugust #1, 1995 hearing( #9! Aurthermore, the C' affirmed this finding of fact in

its ovem.er #1, #$$ Decision( $!

'lso, 0e.astian;s insistence that '.elardo Dagoro and >alter de 0antos are not heirs to the estate

of %oa2uin cannot .e sustained( Per its <cto.er #, #$$$ <rder of Partition, the RC found that

*loria 'gtarap de 0antos died on "a& 4, 1995, and was later su.stituted in the proceedings

.elow .& her hus.and >alter de 0antos( *loria .egot a daughter with >alter de 0antos,*eorgina 0amantha de 0antos( he RC liEewise noted that, on 0eptem.er 1, 1995, '.elardo

Dagoro filed a motion for leave of court to intervene, alleging that he is the surviving spouse of

"ercedes 'gtarap and the father of Cecilia 'gtarap Dagoro, and his answer in intervention( he

RC later granted the motion, there.& admitting his answer on <cto.er 1-, 1995( 1! he C'also noted that, during the hearing of the motion to intervene on <cto.er 1-, 1995, 0e.astian and

@duardo did not interpose an& o.ection when the intervention was su.mitted to the RC forresolution( #!

ndeed, this Court is not a trier of facts, and there appears no compelling reason to hold that .oth

courts erred in ruling that %oseph, eresa, >alter de 0antos, and '.elardo Dagoro rightfull& participated in the estate of %oa2uin( t was incum.ent upon 0e.astian to present competent

evidence to refute his and @duardo;s admissions that %oseph and eresa were heirs of %ose, and

thus rightful heirs of %oa2uin, and to timel& o.ect to the participation of >alter de 0antos and'.elardo Dagoro( Gnfortunatel&, 0e.astian failed to do so( evertheless, >alter de 0antos and

'.elardo Dagoro had the right to participate in the estate in representation of the%oa2uin;s compulsor& heirs, *loria and "ercedes, respectivel&( !

his Court also differs from @duardo;s asseveration that the C' erred in settling, together with

%oa2uin;s estate, the respective estates of Iucia, %esus, %ose, "ercedes, and *loria( ' perusal ofthe ovem.er #1, #$$ C' Decision would readil& show that the disposition of the properties

related onl& to the settlement of the estate of %oa2uin( Pursuant to 0ection 1, Rule 9$ of the Rules



of Court, as cited a.ove, the RC was specificall& granted urisdiction to determine who are the

lawful heirs of %oa2uin, as well as their respective shares after the pa&ment of the o.ligations of

the estate, as enumerated in the said provision( he inclusion of Iucia, %esus, %ose, "ercedes,and *loria in the distri.ution of the shares was merel& a necessar& conse2uence of the settlement

of %oa2uin;s estate, the& .eing his legal heirs(

8owever, we agree with @duardo;s position that the C' erred in distri.uting %oa2uin;s estate

pertinent to the share allotted in favor of "ilagros( @duardo was a.le to show that a separate

proceeding was instituted for the pro.ate of the will allegedl& e?ecuted .& "ilagros .efore theRC, Branch 1$-, Pasa& Cit&( 4! >hile there has .een no showing that the alleged will of

"ilagros, .e2ueathing all of her share from %oa2uin;s estate in favor of @duardo, has alread&

.een pro.ated and approved, prudence dictates that this Court refrain from distri.uting "ilagros;

share in %oa2uin;s estate(

t is also worth& to mention that 0e.astian died on %anuar& 15, #$1$, per his Certificate of

Death( 5! 8e is survived .& his wife eresita B( 'gtarap 6eresita and his children %oa2uin

%ulian B( 'gtarap 6%oa2uin %ulian and 'na "a( 'gtarap Panlilio 6'na "a((

8enceforth, in light of the foregoing, the assailed ovem.er #1, #$$ Decision and the "arch#7, #$$7 Resolution of the C' should .e affirmed with modifications such that the share of

"ilagros shall not &et .e distri.uted until after the final determination of the pro.ate of her

purported will, and that 0e.astian shall .e represented .& hiscompulsor& heirs(

7HERE8ORE, the petition in *(R( o( 17719# is DENIED for lacE of merit, while the

petition in *(R( o( 177$99 is PARTIALL= GRANTED, such that the Decision dated

ovem.er #1, #$$ and the Resolution dated "arch #7, #$$7 of the Court of 'ppealsare A88IRED with the following ODI8ICATIONS/ that the share awarded in favor of

"ilagros 'gtarap shall not .e distri.uted until the final determination of the pro.ate of her will,

and that petitioner 0e.astian *( 'gtarap, in view of his demise on %anuar& 15, #$1$, shall .erepresented .& his wife eresita B( 'gtarap and his children %oa2uin %ulian B( 'gtarap and 'na

"a( 'gtarap Panlilio(

hese cases are here.& remanded to the Regional rial Court, Branch 114, Pasa& Cit&, for further

proceedings in the settlement of the estate of %oa2uin 'gtarap( o pronouncement as to costs(

SO ORDERED(

8IRST DIVISION

[ G.R. N. 6?6:0, )'(% 2?, 1990 ]#ACO<A T. PATERNO, TOAS T. PATERNO, AND ARIA L!CIA

PATERNO, PETITIONERS, VS. <EATRI" PATERNO, <ERNARDO

PATERNO AND THE INTEREDIATE APPELLATE CO!RT,

RESPONDENTS.

D E C I S I O N

NARVASA, #.$

n the %uvenile and Domestic Relations Court of "anila, now defunct, there was filed .& Aeli3a<rihuela, as guardian ad litem of her children, Beatri3 Paterno and Bernardo Paterno, a

complaint1! pra&ing that the latter .e declared illegitimate 6adulterous children of, and

conse2uentl& entitled to inherit from, the deceased %ose P( Paterno( 'ccording to Aeli3a, Beatri3and Bernardo had .een .egotten of her illicit liaison with %ose P( Paterno, a married man, and

should thus .e counted among the latter;s

compulsor& heirs in accordance with 'rticle --7[2] of

the Civil Code( Aeli3a pra&ed in her complaint for/ 61 the invalidation of the e?traudicial partition of %ose Paterno;s estate e?ecuted .& his widow, %aco.a ( Paterno, and his legitimate

http://elibrary.judiciary.gov.ph/documents-dtsearch/SUPREME_COURT/Decisions/1990.zip%3E2d7,df%7C1990/1263865882715460225.html#_ftn1






children, Iuis ( Paterno, +icente ( Paterno, omas ( Paterno, 0usana ( Paterno and "aria

Iucia ( Paterno, said partition having deprived the minor plaintiffs of their legitimes= 6# the

e?tension to Beatri3 and Bernardo of support= and 6 the pa&ment to them of actual, moral ande?emplar& damages, as well as attorne&;s fees([3]

he answer with counterclaim filed for the widow and her children aforenamed inter

alia asserted as affirmative defense that the :plaintiffs are guilt& of laches as the& should havee?ercised their right of action, if an&, against the deceased Dr( %ose P( Paterno during his lifetime

in order to give the latter an opportunit& to admit or den& the same, death having sealed his

lips(:[4]

t appears that :upon defendants; filing their answer, the 8onora.le ( 'lmeda)Iope3 started

reception of plaintiffs; evidence( 8owever, on %anuar& 11, 194, prior to a scheduled

continuation of the hearing, the 8onora.le %udge C( %uliano)'grava who QQ 6succeeded %udge

'lmeda)Iope3 re2uired the parties to show cause wh& the case should not .e dismissed for lacEof urisdiction( <n 'pril 4, 194, and after .oth parties had su.mitted their respective

memoranda, the court finall& ordered the dismissal of the case, for the reason that where an

illegitimate child seeEs to participate in the estate of the deceased putative father, the action

.ecomes essentiall& one for recover& of plaintiffs supposed share in the estate and the 2uestionof paternit& .ecomes merel& an incident thereto( 's the main issue falls within the urisdiction

of the ordinar& courts, the incidental 2uestion of paternit& should also .e resolved therein, if thesplitting of causes of action is to .e avoided(QQ(:[5]

he plaintiffs perfected an appeal to this Court, which was docEeted as *(R( o( I)#$$( he

appeal resulted in the reversal of the challenged order( n a decision rendered on %une $, 197,this Court set aside :the order of dismissal appealed from, insofar as it affects the issue of

paternit&,: and returned the case :to the %uvenile and Domestic Relations Court for determination

of that particular issue(: 0aid the Court/ [6]

:QQ he issue to .e determined QQ is which of plaintiffs; claim 6filiation or participation in thedecedent;s estate! constitutes the main cause and which is merel& an incident thereto(

:QQ:QQ Clearl& .efore the claim to participate in the estate ma& .e prosecuted, plaintiffs right to

succeed must first .e esta.lished( Differentl& stated, plaintiffs; main action is that for recognition

of their status as illegitimate children of the deceased, upon which the right to share in thehereditar& estate of the putative father would rest( 6his matter is without dou.t within the

urisdiction of the %DRC(

:QQ

:n granting to the %uvenile and Domestic Relations Court Vsuch incidental powers generall&

possessed .& the court of first instance, the law QQ 6however could not have intended to confer

on this special tri.unal urisdiction over all su.ect matter cogni3a.le .& the ordinar& court of

first instance( he term ;incidental powers; must refer to the authorit& to issue such orders orwrits and taEe such measures as might .e necessar& to carr& out the functions of the %uvenile and

Domestic Relations Court( 68ence, the matter of the participation in the estate of the decedent isnot within its competence= it is within the urisdiction of the court of first instance(

he a.ove conclusion will not constitute a violation of the rule against splitting of cause of

action( he prohi.ition provided in the Rules of Court is against the institution of more than onesuit for a single cause of action( 60ec( , Rule # QQ ( But, as alleged in the complaint, the .ases

for plaintiffs; various claims would not .e the same( B& the creation of the %uvenile and

Domestic Relations Court, with its e?clusive urisdiction over cases involving paternit& andacEnowledgment, recognition of children and recover& of hereditar& shares can no longer .e

properl& oined as cause of action, since each lies within the urisdiction of a different tri.unal(

he case having .een thereafter remanded to and tried .& the %uvenile and Domestic RelationsCourt 6%DRC, that Court rendered udgment on 'pril 14, 197$ dismissing the complaint on the

ground of prescription, its view .eing that the action for

compulsor& recognition should have

.een commenced within the lifetime of the alleged father, and on the ground that plaintiffs hadfailed to present :clear, strong and convincing: evidence of their filiation([7]Dismissed as well was

the defendants; counterclaim( he plaintiffs elevated the case to the Court of 'ppeals,[8]where

.asicall&, the& imputed to the %DRC two 6# errors,[9] to wit/



















1 holding that the& 6plaintiffs had lost whatever right of action the& might otherwise have had,

when the& failed to file the corresponding action during the lifetime of their putative parent, %ose

P( Paterno= and# ruling that plaintiffs; evidence was in part incompetent and in an& event did not constitute

:clear, strong and convincing proof: of plaintiffs; filiation(

he Court of 'ppeals reversed the udgment of the %DRC( n a decision promulgated on 'ugust1, 19-#,[10] said Court, after an e?tensive review of the evidence adduced .& the parties .efore

the %DRC )) o.serving in this connection that as against the plaintiffs; 6illegitimate children;s

:witnesses and documentar& evidence, "rs( %aco.a Paterno, widow of the decedent, stood aloneto den& the claim of the plaintiffs)appellants: )) reached the following conclusions/

:t is true there appear to .e certain inconsistencies in plaintiffs; evidence as pointed out .& the

trial court, .ut in the final anal&sis, these inconsistencies are onl& minor matters which, to <ur

mind, instead strengthened the entire plaintiffs; evidence( 8ad these witnesses .een ver&ela.orate, thorough and precise, >e would have entertain6ed some dou.ts( n fact, the evidence

is so convincing, clear, positive that >e noted that, after trial and assessment of the evidence, the

trial court was constrained, perhaps, in consonance with its conscience, to admit that ;in

evaluating plaintiffs; evidence QQ the court cannot definitel& state that their 6plaintiffs; claim isfalse(; he trial court was convinced that plaintiffs)appellants Beatri3 and Bernando and +irginia

are the children of Dr( %ose P( Paterno, .ut .eing of the opinion that spurious children;s right ofaction to compel recognition as such is lost forever upon the demise of the putative father, found

against the plaintiffs(

:>e hold, after going over the records, that there are sufficient evidence, clear and convincing,esta.lishing the filiation of plaintiffs)appellants Beatri3 and Bernardo Paterno as spurious

children of Dr( %ose P( Paterno= that %ose P( Paterno died when the& were still minors and the

present action for the esta.lishment of their filiation to Dr( %ose P( Paterno was filed .efore the&reach6ed the age of maorit& and within the period of limitation, within which cases of this

nature should .e instituted to esta.lish paternit& and filiation([11]

:>8@R@A<R@, finding the Court a quo in error, the decision appealed from is here.&R@+@R0@D and another one entered, declaring plaintiffs)appellants Beatri3 and Bernardo

Paterno illegitimate 6spurious children of Dr( %ose P( Paterno, deceased, .egotten out of wedlocE

with Aelisa <rihuela 6who is herein appointed guardian ad litem conceived and .orn when thedeceased was coha.iting with the latter, 6and having eno&ed and continued possessing the

status as children of the deceased Dr( %ose P( Paterno(

:>e are not in a position to pass on, much less, grant the other pra&ers of the appellantscontained in their .rief e?cept as to costs, inasmuch as the directive of <ur 0upreme Court in the

case of Paterno, et al( vs( Paterno, et al(, I)#$$, %une $, 194, $#$ 0CR' 5-5, returning this

case to the court of origin, specificall& states/

;>8@R@A<R@, the order of dismissal appealed from, insofar as it affects the issue of paternit&is here.& set aside, and the case returned to the %uvenile and Domestic Relations Court for

determination of that particular issue(;:"rs( %aco.a ( Paterno, the widow, and her legitimate children have appealed to this Court

on certiorari( n these proceedings, the& claim that the Court of 'ppeals erred in )

1 holding the evidence of the eno&ment .& Beatri3 and Bernardo Paterno of the status ofchildren of the deceased %ose Paterno, to .e strong, clear and convincing=

# failing to taEe account of )

a the suspicious nature of the alleged letter of the decedent to Aeli3a, mother of Beatri3 and

Bernardo 6@?h( *, it .eing in @nglish although Aeli3a was :not ade2uatel& conversant in@nglish=:

. the suspect character of Beatri3;s alleged .aptismal certificate in that it :does not even statethe given name: 6@?h( B=

c the lacE of specific evidence of coha.itation .etween the decedent and Aeli3a during the

periods of conception of their alleged children=

d the :contradictor& and conflicting evidence on direct acts .& petitioner vis-a-vis the status of

private respondents=:







failing to appl& the doctrine in Cleme6a v. Cleme6a2 #4 0CR' 619-, 7#$, to the effect that

dou.ts in paternit& suits are resolved against the claimant(

0uch 2uestions as whether certain items of evidence should .e accorded pro.ative value orweight, or reected as fee.le or spurious, or whether or not the proofs on one side or the other are

clear and convincing and ade2uate to esta.lish a proposition in issue, are without dou.t 2uestions

of fact([12]

>hether or not the .od& of proofs presented .& a part&, weighed and anal&3ed inrelation to contrar& evidence su.mitted .& adverse part&, ma& .e said to .e strong, clear and

convincing= whether or not certain documents presented .& one side should .e accorded full faith

and credit in the face of protests as to their spurious character .& the other side= whether or notinconsistencies in the .od& of proofs of a part& are of such gravit& as to ustif& refusing to give

said proofs weight )) all these are issues of fact( Luestions liEe these are not reviewa.le .& this

Court which, as a rule, confines its review of cases decided .& the Court of 'ppeals onl& to

2uestions of law raised in the petition and therein distinctl& set forth([13] But it is 2uestions of thist&pe which the petitioners have precisel& su.mitted for resolution to this Court( herefore, in

accordance with esta.lished rule and practice, those issues will not .e considered .& this Court,

the resolutions thereon .& the Court of 'ppeals .eing final([14]

t ma& however .e noted in passing that, as recapitulated in painstaEing detail in the Decision ofthe Court of 'ppeals,[15] the dovetailing and mutuall& corro.orative testimon& of the private

respondents, their mother Aelisa <rihuela, and eresa "iranda and 'nselmo "acapinlac, the lateDr( %ose P( Paterno;s retainers to whose care and compan& he entrusted his illegitimate famil&,

does indeed compel acceptance of the fact that from their .irth until Dr( Paterno;s death, said

respondents were treated as, and eno&ed the status of, his children .& .lood(he gist of that testimon& is to the effect that Dr( Paterno had .orne the e?penses of the .irth and

.aptism of said children, who were .orn in the same &ear 619- within eleven months of each

other= that in that &ear, after the .irth of the first child, Beatri3, mother and daughter had moved

from '( Iuna in 0an %uan, Ri3al, to Ru.i 0treet in 0an 'ndres BuEid, "anila, where the secondchild, Bernardo, and a third, +irginia, who died at four, were .orn= that in 194$, the famil&

moved to a house in '( IaEe 0treet in 0an %uan, Ri3al purchased .& Dr( Paterno= that in .oth

places, the& had lived with and .een maintained .& Dr( Paterno in the compan& of the "irandaand "acapinlac families= that shortl& .efore the out.reaE of the war in Decem.er 1941, Dr(

Paterno left for 8ongEong where he sta&ed until war;s end= that in his a.sence, mother and

children received monthl& support from Don +icente "adrigal at the instance of Dr( Paterno whowas "adrigal;s .rother)in)law= that for sometime after Ii.eration, the& lived in the "adrigal

compound in *en( Iuna, Paco, "anila= that when Dr( Paterno thereafter returned to the

Philippines and until he again left for 8ongEong, he lived with mother and children, first in

'ntipolo, Ri3al and later in "arilao, Bulacan= that when Aelisa decided to get married )) thiswhile Dr( Paterno was in 8ongEong on his second soourn there )) she sought and received the

forgiveness of his wife, DoOa %aco.a, who even consented to act as sponsor at her wedding= that

when Dr( Paterno returned once more from 8ongEong, to .e assigned to the "adrigal cement plant in Binangonan, Ri3al, he made it a point to see that Beatri3 and Bernardo went or were

.rought to visit him, especiall& during weeEends, and on these occasions, he and the children

slept in his room in the same .ed, he would tell them to come or send word to him for an&thingthe& might need, and would give them mone& when the& left= that Beatri3, then a.out thirteen or

fourteen, was .eing sent to school in 0ta( sa.el College .& Dr( Paterno, who did the same for

Bernardo, who was enrolled at the Gniversit& of 0anto omas= that these reunions continued until

he fell ill and had to Eeep to his house in "endo3a 0t(, Luiapo, "anila, and DoOa %aco.a for.adethe children to see him on the e?cuse that he might suffer a relapse= that on the some five

occasions that the& tried to see Dr( Paterno in his residence while he la& sicE, the children were

given mone& .& DoOa %aco.a upon leaving= and that after his death and .urial, DoOa %aco.a gavethem mone& for their tuition(

8ence, even if, against all applica.le law and precedent, this Court were minded to su.stitute its

own assessment of such testimon&, as supported .& the documents also presented .& the privaterespondents, for that of the Court of 'ppeals, it would reach no different conclusion( rue,

certain inconsistencies ma& .e noted in the testimon& given .& the witnesses for the private

respondents, .ut it is on the whole unanimous and consistent as to the reall& crucial fact that Dr(Paterno treated and acted towards said respondents, from their .irth onward, in a manner onl& a

real father would and leaving little dou.t that he recogni3ed and considered them as in truth his













children( he simple denials of the widow, petitioner %aco.a ( Paterno, do not suffice to refute

such proof(

he action for recognition 6or to esta.lish filiation having .een timel& filed )) having .eeninstituted after the demise of the putative parent and .efore the attainment of the age of maorit&

of the children concerned )) and the ground invoEed therefor having .een satisfactoril& proven,[16]

the Court of 'ppeals committed no error in declaring and confirming the status of the privaterespondents as illegitimate children of the late Dr( %ose P( Paterno(

7HERE8ORE, the appealed udgment of the Court of 'ppeals is 'AAR"@D, with costs

against the petitioners(

SO ORDERED.

THIRD DIVISION

[ G.R. N. 15420?, #u/ 0:, 200? ]RE= CARLO A. RIVERA AND GLAD=S A<AGA RIVERA, PETITIONERS,

VS. VIRGILIO RIVERA, RESPONDENT.

D E C I S I O N

P!NO, #.$

n this petition for review under Rule 45 of the Rules of Court, petitioners assail the "arch #1,

#$$# Decision of the Court of 'ppeals, in connection with an eectment case, docEeted as CivilCase o( 75#9, ordering them to vacate the disputed premises and pa& rentals(

he su.ect of the dispute is a ##-)s2uare meter lot with a two)store& duple? house located inPasig Cit&( he propert& was originall& owned .& spouses Remigio Rivera, 0r( and Consuelo

Rivera( he spouses had eleven 611 children, two of whom were Remigio, %r( 6petitioners;

father and respondent +irgilio Rivera(

n 1974, when the spouses migrated to the Gnited 0tates, the& asEed their son Remigio, %r( and

his children 6two of whom are petitioners Re& Carlo and *lad&s Rivera to occup& one unit of

the duple? house without pa&ment of rentals( n 19-5, respondent, another son of the spouses,moved into the other unit of the duple? house and liEewise occupied it gratuitousl&(

'fter Remigio, 0r( died in 199#, his widow Consuelo and their eleven 611 children e?ecuted ane?traudicial settlement1! where the children voluntaril& waived their hereditar& rights to four 64

real properties owned .& their parents, including the lot with the duple? house, in favor of their

mother Consuelo(

n 199, Remigio, %r( together with his three 6 sons migrated to the Gnited 0tates, leaving

.ehind petitioners who continued to reside in one of the units of the duple? house( Respondent

liEewise migrated to the G(0(

<n 'pril , 1999, Consuelo sold the duple? house and lot to respondent for five hundred

thousand pesos 6P5$$,$$$($$(#! 't the time of the sale, .oth Consuelo and respondent wereresiding in the same house in 0an %ose, California( n the Deed of 0ale, Consuelo and respondent

were represented .& respondent;s daughters "a( heresa R( Aerreria and "a( Dolores '( Rivera(

itle to the propert& was su.se2uentl& transferred in the name of respondent(

Respondent, represented .& his daughter Dolores, asEed petitioners to sign a lease contract over

the unit of the duple? house the& were occup&ing, covering the period from 'pril $, 1999 to%une $, 1999, with a monthl& rental of P,$$$($$(

's the petitioners refused to sign the lease contract or vacate the premises, respondent,! through

his daughter Dolores, filed an unlawful detainer case 6Civil Case o( 75#9 against them .eforethe "etropolitan rial Court 6"eC of Pasig Cit&( n the complaint,4! it was alleged/ that





respondent is the registered owner of the duple? house= that he merel& tolerated petitioners;

occupanc& of one of the units thereof, conditioned upon the e?ecution of the lease contract

.etween the parties= that petitioners initiall& agreed thereto as the& claimed the& would remain inthe unit onl& for a few more months= and that after respondent caused the preparation of the lease

contract, petitioners refused to sign it or vacate the propert&(

n their 'nswer with counterclaim,5! petitioners alleged that the deed of sale .etween Consuelo

and +irgilio Rivera was fictitious( he& claimed that their occupanc& of the premises was not .&

mere tolerance as the& have a right to occup& it as co)owners( 8ence, the& averred that the&could not .e compelled to pa& rentals for the use of the propert&( Petitioners liEewise raised the

affirmative defense that respondent had no cause of action against them as no title was conferred

to him .ecause/ the deed of sale was fictitious= the su.ect propert& was part of the conugal

propert& of Remigio, 0r( and Consuelo and after the former;s death, allthe compulsor& heirs e?ecuted an e?traudicial settlement transferring all the conugal properties

to Consuelo out of love and respect for her= Consuelo and all the compulsor& heirs have migrated

to the 0tates= Consuelo was living with respondent in the 0tates= Consuelo and respondent hid

from the other heirs the transfer of the su.ect propert& to respondent= the deed of sale wase?ecuted in the Philippines through a special power of attorne& granted .& respondent to his

daugthers, "a( heresa Rivera)Aerreria and "a( Dolores Rivera= assuming that the sale waslegitimate, Consuelo did not notif& petitioners thereof, with deli.erate intent and .ad faith to

disinherit her grandchildren, petitioners herein, in violation of their right of first refusal, having

resided in the premises since .irth, or for more than #$ &ears= the P5$$,$$$ consideration for thesale was clearl& inade2uate= assuming that the sale was valid, it nonetheless deprived the

othercompulsor& heirs of their share over the su.ect propert&= and with the attendant defects in

the sale of the propert&, no right or title was transferred to respondent(

he trial court rendered udgment in the eectment case in favor of respondent, thus/

>8@R@A<R@, premises considered, udgment is here.& rendered in favor of the plaintiff and

against defendants Re& Carlo Rivera and *lad&s Rivera in the manner following/1( <rdering the defendants and all persons claiming rights under them to immediatel&

vacate the su.ect premises unlawfull& withheld from the plaintiff=

#( <rdering the defendants to pa& plaintiff the sum of P5,$$$($$ as and .& wa& of unpaid

rentals from 'pril to 0eptem.er 1999, without preudice to collecting the reasona.le

compensation for occupanc& that ma& .e forthcoming until defendants vacate the premises=

( <rdering defendants to pa& plaintiff the sum of P1$,$$$($$ as and .& wa& of attorne&;s

fees= and

4( <rdering the defendants to pa& the costs of suit(

0< <RD@R@D(

Petitioners appealed the decision to the Regional rial Court 6RC on the grounds that/ 6a therespondent had no right over the propert& as he did not have actual or prior ph&sical possession

thereof= 6. the non)e?istent lease contract was not .inding .etween the parties= and 6c

respondent;s title was not indefeasi.le(

<n "arch 1, #$$1, the RC reversed the decision of the "eC and ruled in favor of the

petitioners( t held that there was no valid contract of lease .etween the parties and petitionersoccupied the su.ect propert& in the concept of a co)owner(!

<n appeal, the Court of 'ppeals, in its Decision dated "arch #1, #$$#, reversed the RC;s

decision and reinstated the original decision of the "eC(7! t held that as registered owner ofthe land, respondent is entitled to possession thereof(

8ence, this petition for review with petitioners raising the following issues/ 6a whether petitioners, .eing in actual ph&sical possession of the propert& since 1974, are entitled to



continue in possession of the premises until the issue of ownership thereof is resolved .& a court

of competent urisdiction= 6. whether Civil Case o( 75#9, the eectment case, is .e&ond the

urisdiction of the municipal trial court= 6c whether respondent holds the su.ect propert& in trustfor the legitimate heirs at the time the eectment case was filed= and 6d whether petitioners, who

are in actual ph&sical possession of the premises, e?ercised the right of a co)owner in

representation of their father, Remigio Rivera, %r(

>e find no merit in the petition(

>e cannot sustain petitioners; contention that as the& had actual, ph&sical possession of the

propert& as co)owners, in representation of their father Remigio, %r(, the& are entitled to remain in

the premises( n an unlawful detainer case, prior ph&sical possession .& the plaintiff is not

necessar&( t is enough that he shows that he has a .etter right of possession( 'ctual, prior ph&sical possession of a propert& .& a part& is indispensa.le onl& in forci.le entr& cases, not in

unlawful detainer cases where the defendant is necessaril& in prior lawful possession of the

propert& .ut his possession eventuall& .ecomes unlawful upon termination or e?piration of his

right to possess(

-!

hus, the fact that petitioners were in prior ph&sical possession of the duple?unit does not automaticall& entitle them to continue in said possession and does not give them a

.etter right to the propert&(

Petitioners claim that the unlawful detainer suit should have .een dismissed as the respondent

relied onl& on his title to the propert& in .ringing the action( he& contend that respondent;sassertion of ownership in the unlawful detainer case removed it from the urisdiction of the

"eC( "oreover, the& insist that their possession of the propert& was not merel& .& tolerance of

the original owners and later on .& the respondent as the& assert their father;s right as co)owner

of the propert&(

'gain, petitioners; arguments must fail( t is well)settled that a person who occupies the land of

another at the latter;s tolerance or permission, without an& contract .etween them, is necessaril& .ound .& an implied promise that he will vacate upon demand, failing which, a summar& action

for eectment ma& .e filed against him(9! n the case at .ar, respondent;s allegations in his

complaint specificall& show that petitioners occupied the su.ect unit onl& with the e?press permission of the spouses as the original owners( hus, when title to the propert& passed on to

respondent .& virtue of a contract of sale, petitioners; refusal to sign the lease contract prepared

.& the respondent for their use of the duple? unit rendered their continued occupation thereof

unlawful(

'lthough petitioners impugned the validit& of respondent;s title over the propert& as the& claimed

to have the right to occup& it as co)owner, this allegation did not divest the "eC of urisdictionover the unlawful detainer suit( t is settled that the sole issue in an eectment case is ph&sical or

material possession( either a claim of uridical possession nor an assertion of ownership .& the

defendant can deprive the court of urisdiction over the disputed propert&(1$! Courts in eectmentcases are mandated to decide 2uestions of ownership whenever it is necessar& to decide the

2uestion of possession( he& cannot .e divested of urisdiction over eectment cases ust .ecause

the defendants assert ownership over the litigated propert&(11!

he underl&ing reason for this ruling is to prevent the defendant from trifling with the summar&

nature of an eectment suit .& the simple e?pedient of asserting ownership over the disputed

propert&(1#!

n the case at .ar, the lower court properl& adudicated ownership of the propert& to respondent

in the unlawful detainer case on the .asis of his title thereto( Aull ownership of the su.ect propert& was surrendered to Consuelo Rivera upon the death of Remigio, 0r( through an

e?traudicial partition signed .& all the compulsor& heirs( hus, Consuelo had ever& right to

dispose of the propert& as she deemed fit( "oreover, the lower court correctl& ruled that petitioners had no hereditar& rights over the propert& in representation or su.stitution of their

father as the latter was still alive(



>e stress, however, that this adudication, is onl& an initial determination of ownership for the

purpose of settling the issue of possession, the issue of ownership .eing insepara.l& linEedthereto( he lower court;s adudication of ownership in the eectment case is merel& provisional

and would not .ar or preudice an action .etween the same parties involving title to the propert&(1!

Iastl&, respondent rightfull& omitted Remigio, %r( as part& in the illegal detainer case as he was

not the one in actual, ph&sical possession of the su.ect propert&, .ut petitioners( >hile petitioners insist that the C issued to respondent shows that the propert& was part of the

inheritance left .& Remigio, 0r( which gives them the right to assert and protect the interest of

their father Remigio, %r( over his share in the propert&, this issue, coupled with the alleged

fictitious or fraudulent sale of the propert& to respondent, must .e tried .& petitioners in aseparate proceeding onl& for that purpose as it is settled that an unlawful detainer case resolves

onl& the issue of ph&sical or material possession(14!

IN VIE7 7HEREO8, the petition is D@@D( he impugned decision of the Court of'ppeals, dated "arch #1, #$$#, is 'AAR"@D( Costs against petitioners(

SO ORDERED.

8IRST DIVISION

[ G.R. NO. 1524:?, #u/ 14, 2006 ]R!RAL <AN O8 SIATON, NEGROS ORIENTAL, INC., PETITIONER, VS.

8ELIB ACA#ILOS AND !IRICO ACA#ILOS, #R., RESPONDENTS.

D E C I S I O N

=NARESSANTIAGO, #.$

his petition for review on certiorari assails the 'pril 1-, #$$1 Decision1! of the Court of

'ppeals in C')*(R( C+ o( 51#9$, which affirmed the %ul& 1#, 1995 Decision #! of the Regionalrial Court of egros <riental, Dumaguete Cit&, Branch 9 in Civil Case o( 9$49, and the

ovem.er 1#, #$$1 Resolution! den&ing petitioner Rural BanE of 0iaton, nc(;s 6RB0 motion

for reconsideration(

he controvers& arose from the complaint for removal of cloud over title to andFor recover& of

real propert& and damages filed .& Aeli? "acailos and Luirico "acailos, %r( 6"acailos againstRB0 and Aidela "acalipa& 6Aidela on %ul& #7, 19-7(

n their complaint,4! "acailos alleged that the& are the children of the late *regoria "acalipa&

"acailos who during her lifetime owned and possessed a parcel of residential land situated atPo.lacion, 0iaton, egros <riental with an area of 441 s2uare meters= that upon *regoria;s death

on %ul& #5, 1959, "acailos inherited the su.ect propert& as compulsor& heirs of *regoria, their

father Luirico "acailos, 0r( having predeceased *regoria= that in 1975, "acailos allowed%uanito "acalipa&, a nephew of *regoria to .uild a house on the su.ect propert& where he lived

together with his wife Aidela, and their son, Iam.erto= that Aidela and Iam.erto continued to

live in the house even after the death of %uanito= that on Ae.ruar& 1#, 1975, Aidela e?ecuted an:'ffidavit of 8eirship: .efore a otar& Pu.lic at Dumaguete Cit& falsel& claiming to .e the sole

heir of *regoria "acalipa& and adudicating to herself the su.ect propert&= that the ta?

declaration in the name of *regoria "acalipa& was cancelled and transferred to the name ofAidela under a? Declaration o( $##47-= that Iam.erto was the manager of RB0 when Aidela

o.tained a loan using as collateral the su.ect propert&= that Aidela defaulted thus the su.ect

propert& was foreclosed and sold at pu.lic auction with RB0 as the onl& and highest .idder= that

Aidela failed to redeem the propert& thus RB0 was a.le to transfer the ta? declaration to itsname= that "acailos have alwa&s .een in actual possession under claim of ownership of the



su.ect propert& from the time of their mother;s death up to the present= that RB0 Enew that

Aidela did not own the su.ect propert&= that "acailos filed a criminal case for estafa through

falsification of pu.lic document 6Criminal Case o( 9$9 .efore the "unicipal rial Court inCities, Dumaguete Cit&, Branch against Aidela and Iam.erto immediatel& upon discover& of

the foreclosure sale= that in her counter affidavit in the preliminar& investigation of that criminal

case, Aidela denied that she signed the :'ffidavit of 8eirship:(

n its answer,5! RB0 claimed it considered Aidela to .e the owner of the su.ect propert& as she

was in actual ph&sical possession thereof when she applied for a loan= that "acailos maliciousl& .uilt a house on the su.ect propert& pretending to .e the owners thereof= that, if the& owned the

su.ect propert&, the& are alread& in estoppel since the mortgage document was dul& registered

with the Register of Deeds and the& have constructive notice thereof= that the e?traudicial

foreclosure and the pu.lic auction proceedings were dul& pu.lished and that the 0heriff;sCertificate of 0ale in favor of RB0 and the final deed of sale were registered with the Register

of Deeds of the Province of egros <riental(

<n the other hand, Aidela averred in her answer

!

that the propert& .elonged to her late hus.and,%uanito "acalipa&= that she lacEs formal education and an&thing she did was the worE of her son,

Iam.erto, who was at the time the manager of RB0(

'fter trial, the trial court found in favor of "acailos, thus/

>8@R@A<R@, on the .asis of the foregoing discussion, udgment is here.& rendered/

1( Declaring the foreclosure of the mortgaged propert& null and void a. initio=

#( Declaring "acailos! the rightful owners of the land su.ect matter of this case=

( <rdering the Provincial 'ssessor;s <ffice to cancel a? Dec( o( $##47- in the name of Aidela

"acalipa& and issue another a? Declaration in the name of Aeli? "acailos and Luirico"acailos covering the same propert&=

4( <rdering the Rural BanE of 0iaton, nc( to immediatel& release from mortgage the landcovered .& a? Dec( $##47- in the name of Aidela "acalipa&= and

5( <rdering the Rural BanE of 0iaton, nc( to pa& "acailos! the following/

a( P1$,$$$($$ as moral damages=

.( P1$,$$$($$ as e?emplar& damages=

c( P5,$$$($$ as attorne&;s fees= and

d( costs of the suit(

0< <RD@R@D(7!

he trial court noted that RB0 failed to ascertain whether Aidela was the lawful owner of the

propert& .eing mortgaged( Rather, it relied on the ta? declaration in Aidela;s name and the

:'ffidavit of <wnership and Possession: that she e?ecuted( o investigator inspected the

premises( hus, the trial court ruled that RB0 must suffer for its failure to investigate anddetermine the lawful owner of the su.ect propert& who turned out to .e "acailos(

he Court of 'ppeals denied RB0;s appeal and affirmed the decision of the trial court in toto(8ence, this petition(

he assigned errors revolve around four principal issues/ 61 who .etween "acailos and RB0has a superior right over the propert&, 6# assuming the "acailos .rothers have a .etter right,

whether RB0 was a mortgagee).u&er in good faith of the su.ect propert&, 6 assuming the

"acailos .rothers have a .etter right, whether the& are .arred from recovering the su.ect propert& due to estoppel and laches, and 64 whether the award of damages in favor of "acailos

was proper(



RB0 principall& raises 2uestions of fact that have .een settled .& the court a quo( 's a general

rule, 2uestions of fact are not covered .& a petition for review under Rule 45 of the Rules ofCourt .ecause it is limited to a review of errors of law committed .& the appellate court

especiall& so in the case at .ar where the findings of fact of the trial court and Court of 'ppeals

coincide and are, thus, .inding on this Court(-!

8owever, RB0 claims that the instant case fallsunder recogni3ed e?ceptions to this general rule .ecause the lower courts; conclusions are

grounded entirel& on speculations, surmises or conectures,9! and are .ased on a misapprehension

of facts(1$!

'fter a review of the records, we rule that RB0 failed to impugn the ruling of the lowers courts

on the main issue of ownership over the su.ect propert&( 8owever, the award of damages should

.e modified .& deleting the award of e?emplar& damages for lacE of factual and legal .ases(

'nent the first issue, RB0 contends that Aidela owned the mortgaged propert& .ased on her

answer to the complaint where she asserted that she inherited the su.ect propert& from her late

hus.and, %uanito "acalipa&( t argues that the lower courts should not have given credence to thesu.se2uent repudiation .& Aidela of her ownership over the su.ect propert& during the pre)trial

conference as the same was done allegedl& in e?change for her .eing dropped from the instantcase(

he contention lacEs merit(

o .egin with, Aidela was not dropped from the case( During the hearing on 'pril 1-, 19--, the

trial court sought to have Aidela dropped from the case considering her admission during the pre)

trial conference that "acailos owned the su.ect propert&( 8owever, counsel for "acailoso.ected(11! Conse2uentl&, 'tt&( Rosalinda K.aOe3 continued to represent Aidela throughout the

trial of this case(

"oreover, RB0 has failed to produce evidence to show that Aidela;s admission was not freel&

and Enowingl& given( >hile it is true that Aidela was no longer presented as a witness after the

pre)trial conference for reasons not .orne out .& the records, this does not necessaril& mean thather repudiation of ownership over the su.ect propert& was prompted .& ill)will against RB0(

he pre)trial order dated Decem.er #, 19-7 reflected Aidela;s admissions during the pre)trial

conference/

#( Co)defendant Aidela "acalipa&;s claims/ t"at t"e property in question did really belong to plaintiffs 4"erein respondents aca'ilos brot"ers5 by virtue of t"eir rig"tful succession to t"e

same7 that it was her own son, Iam.erto "acalipa&, who su.se2uentl& .ecame an officer)in)

charge as manager of co)defendant Rural BanE of 0iaton, who so maneuvered her into signingcertain documents, in effect maEing her a de.tor of Rural BanE of 0iaton, which circumstances

were never e?plained to her .& her son Iam.erto "acalipa&= and that as a conse2uence of it, said

Rural BanE of 0iaton did grant a loan to her although the proceeds of said loan onl& went into thehands of Iam.erto "acalipa&, her son= t"at *idela acalipay recognizes t"e fact t"at s"e

absolutely "ad not"ing2 and in fact still "as not"ing2 to do #it" t"e property in question2 t"e

same property8s o#ners"ip being al#ays t"at of plaintiffs2 #"ic" o#ners"ip s"e recognizes71#! 6talics supplied'lthough the records do not contain the transcript during the pre)trial conference, it should .e

noted that on 'pril 1-, 19--, the trial court recalled the events that transpired during the pre)trial

conference where Aidela freel& and Enowingl& acEnowledged that "acailos were the rightfulowners of the su.ect propert&, thus/

C<GR/

hen, what happened nowH! Did &ou convince Aidela that she was ust a daughter)in lawH n

this case, Aidela was a daughter)in)law of(((

Iogronio/1!



he first cousin of the plaintiffs(

C<GR/

Aidela "acalipa& whom &ou are representing is merel& the daughter(((

K.aOe3/14!

s the mother of Iam.erto(((

C<GR/

>ait a minute, ((( is the wife of the plaintiff;s cousinH

K.aOe3/

Kes, &our honor(

C<GR/

'nd even her hus.and, the plaintiff;s cousin, had nothing to do with this propert&, rightH

K.aOe3/

es2 t"at is #"at t"e defendant...

C<GR/

'nd even &our client, the co)defendant Aidela "acalipa&, admits that it was onl& her son,Iam.erto, who soon .ecame <C(((

Iogronio/

>ho was the <C at the time(

C<GR/

Kes, who soon .ecame the <C of the Rural BanE who did something using Aidela;s name( s that

correctH

Iogronio/

Kes, &our honor(

? ? ? ?

C<GR/

$ut *idela said2 9es2 t"e plaintiff really o#ned t"is property29 admitting it.

K.aOe3/

Kes, &our honor(

C<GR/

>hat is the pro.lem of this case nowH



Iogronio/

0o, we have no more pro.lem with Aidela, as far as ownership is concerned( <ur target now is

the Rural BanE of 0iaton who appears to have purchased this propert& and the foreclosure, and

have it transferred to their name and even threatening to eect the plaintiffs who are the realowners ? ? ?(15! 6@mphasis supplied

's regards Aidela;s initial assertion of ownership over the su.ect propert&, we agree with the

findings of the Court of 'ppeals that the same should not .e given weight( t .ears stressing thatonl& a thum. marE appears on top of her printed name at the last page of her answer and the

name of the law&er who prepared the same was not even indicated( he records also show that

Aidela;s answer was .elatedl& filed with the trial court( n her opposition1! to the motion to have

her declared in default, there was a plea for understanding and a statement that the attachedanswer was prepared .& an unnamed law&er, without .eing formall& engaged, out of pit& and

compassion for Aidela who was an indigent( hus, as .etween the allegations in the answer

which was merel& thum.marEed .& Aidela and prepared .& an unEnown law&er, and her

admissions in open court with the assistance of her counsel of record, 'tt&( Rosalinda K.aOe3,during the pre)trial conference of this case, the lower courts correctl& gave weight to the latter(

't an& rate, the lower courts; finding that the su.ect propert& rightl& .elonged to "acailos was

not principall& grounded on Aidela;s admission( Rather, this admission merel& confirmed the

undisputed documentar& evidence which showed *regoria "acalipa& as the owner of the su.ect propert& and the same passed on to her two sons upon her death( he records show that a?

Declaration o( -5-17! covering the period prior to the &ear 1949,1-! a? Declaration o(

1-9519! for the &ear 1949, a? Declaration o( #5-4#$! for the &ear 199 and a? Declaration

o( 1$51#1! for the &ear 1974 over the su.ect propert& were all in the name of *regoria"acalipa&( t is true that ta? declarations or realt& ta? pa&ments are not conclusive evidence of

ownership, however, the& constitute good indicia of possession in the concept of owner and a

claim of title over the su.ect propert&(##! Coupled with her uncontested actual possession of thesu.ect propert&, these ta? declarations constitute strong evidence of ownership over the su.ect

propert& .& *regoria "acalipa&,#! the mother of herein respondents "acailos(

he ta? declarations in the name of *regoria "acalipa& taEes on great significance .ecause

Aidela tacEed her claim of ownership to that of *regoria "acalipa&( n 1975, Aidela had a?

Declaration o( 1$51 in the name of *regoria "acalipa& cancelled through the e?ecution of an

:'ffidavit of 8eirship: where she claimed to .e the sole heir of *regoria "acalipa&( Ket, shewas merel& the wife of %uanito who was a nephew of *regoria( either she nor %uanito could

inherit from *regoria whose compulsor& heirs are respondents "acailos( Clearl&, the :'ffidavit

of 8eirship: was fraudulent and could never .e Aidela;s source of ownership over the su.ect propert&( either could a? Declaration o( $##47- in the name of Aidela and the :'ffidavit of

<wnership and Possession: .e the source of an& derivative right of ownership of RB0 over the

su.ect propert& considering that these documents were the products of the aforementionedfraudulent scheme( hus, the trial court correctl& ruled that the mortgage over the su.ect

propert& and the foreclosure proceedings were a nullit&, and that respondents "acailos .rothers

should .e declared the lawful owners of the su.ect propert&(

>e note that in its "emorandum,#4! RB0 contended, among others, that should this Court rule

in favor of "acailos, the mortgage should .e declared valid insofar as the one)half portion of

the su.ect propert& is concerned, .ased on the alleged admission .& respondent Luirico"acailos, %r( on cross)e?amination that there was an oral settlement of the estate of *regoria

"acalipa& where respondents "acailos .rothers agreed that the su.ect propert& should .e

apportioned .etween respondent Luirico "acailos, %r( and Aidela "acalipa&(

his issue is .eing raised .& RB0 for the first time on appeal and onl& .elatedl& in its

memorandum .efore this Court( >ell)settled is the rule that points of law, theories, issues andarguments not ade2uatel& .rought to the attention of the trial court need not .e, and ordinaril&

will not .e, considered .& a reviewing court as the& cannot .e raised for the first time on appeal(



#5! 'n issue which was neither averred in the complaint nor raised during the trial in the court

.elow cannot .e raised for the first time on appeal as it would .e offensive to the .asic rules of

fair pla&, ustice and due process(#! hus, we cannot .end .acEwards to e?amine this issueraised .& RB0 at this late stage in the proceedings(

Be that as it ma&, even if we were to consider RB0;s new theor& and, thus, assume that theaforementioned oral settlement did taEe place, the relin2uishment of respondent Aeli? "acailos;

one)half share in the su.ect propert& in favor of Aidela would amount to an oral donation of real

propert& which, under 'rticle 749#7! of the Civil Code, is null and void(#-! his void donation toAidela did not ripen into ownership through ac2uisitive prescription .ecause, as will .e discussed

in detail shortl&, RB0 was a mortgagee).u&er in .ad faith( <nl& si? &ears had elapsed from the

auction sale to the filing of the instant case, which is less than the re2uired $)&ear)period for

e?traordinar& ac2uisitive prescription#9! to set in(

'nent the second issue, we agree with the trial court and the Court of 'ppeals that RB0 was a

mortgagee).u&er in .ad faith( he su.ect propert& was mortgaged three times .& Aidela to

RB0, to wit/ in 1975 for P#,$$$($$, in 197 for 1$,$$$($$, and in 197- for P1#,$$($$( 'fterfull& pa&ing the first two mortgage de.ts, Aidela failed to pa& the third thus the propert& was

e?traudiciall& foreclosed and sold at pu.lic auction with RB0 as the onl& and highest .idder(8owever, in contracting the aforesaid mortgages, RB0 failed to e?ercise the proper diligence in

verif&ing the true owners of the su.ect propert&( Certainl&, a mortgagee is not e?pected to

conduct an e?haustive investigation on the histor& of the mortgagor;s title .ut RB0, especiall& .ecause it is a .anEing institution, must have at least e?ercised due diligence .efore entering into

said contract( BanEs are e?pected to e?ercise more care and prudence than private individuals in

their dealings .ecause their .usiness is impressed with pu.lic interest($!

t is a standard practice for .anEs .efore approving a loan to send representatives to the premises

of the land offered as collateral and to investigate who are the real owners thereof(1! 8owever,

in the case at .ar, no investigator was sent to the location of the su.ect propert& to verif& the realowners thereof( nstead, RB0 relied solel& on a? Declaration o( $##47- in the name of Aidela

as well as the :'ffidavit of Possession and <wnership: that RB0 re2uired her to e?ecute(#! 'tt&( eodoro 0ingson, a witness for RB0, e?plained that when RB0 was esta.lished in1974, there was so much mone& coming from the Central BanE that the .anE was in a hurr& to

grant loans and was not strict with the documents presented .& prospective .orrowers as

collateral(!

>hat is more, 'tt&( 0ingson admitted that RB0 was aware that a? Declaration o( $##47- in

the name of Aidela was previousl& in the name of *regoria "acalipa& and that the ta?

declaration was transferred to the name of Aidela through the :'ffidavit of 8eirship: shee?ecuted naming her as the sole heir of *regoria "acalipa&(4! 8owever, it did not taEe steps to

ascertain whether Aidela was, indeed, the sole heir of *regoria "acalipa&( Rather, it placed full

faith on the false representation of Aidela that her hus.and, %uanito "acalipa&, was the son of*regoria "acalipa&(5! o maEe matters worse, neither did it in2uire from Iam.erto, son of

Aidela, who was then the manager of the .anE when the first loan was granted to her in 1975, as

to whether his father, %uanito "acalipa&, was the son of *regoria "acalipa&(!

's its defense, RB0 dwells on the alleged error of the trial court in finding Iam.erto as the

manager of RB0 when the mortgage de.ts were contracted when in fact Iam.erto was a mere

clerE)t&pist( 8owever, the records show that RB0 categoricall& admitted during the pre)trialconference that Iam.erto was the manager of the .anE when the loan transactions tooE place(7! @ven in its Repl&-! dated %une #1, #$$# filed .efore this Court, RB0 admitted that Iam.erto

was the officer)in)charge 6<C of the .anE prior to 197- or when the first two mortgage de.tswere contracted .& his mother, Aidela, and that Iam.erto was demoted to the ranE of a clerE)

t&pist onl& in 197-(9!

't an& rate, we need not .ela.or this point .ecause whether Iam.erto was an <C or a mere

clerE)t&pist of the .anE when the mortgage de.ts were contracted will not e?cuse RB0 from



e?ercising prudence in verif&ing the true owners of the su.ect propert&( he fact that Iam.erto

was the son of its prospective de.tor, Aidela, should have prompted RB0 to .e more cautious in

granting the loan(

Based on the foregoing, it is clear that RB0 chose to close its e&es to facts which should have

put a reasona.le man on his guard(4$!

Aar from .eing prudent, RB0 hastil& granted the loanwithout investigation, and placed full faith on the false documents su.mitted .& Aidela(

Conse2uentl&, it cannot now claim that it acted in good faith on the .elief that there was no

defect in the title of Aidela(

>hile the findings of the lower courts that RB0 was a mortgagee).u&er in .ad faith is in accord

with the evidence on record, we must point out, however, that the& overlooEed the fact that the

su.ect propert& is an unregistered piece of land( 's we ruled in (avid v. $andin241! which wasreiterated in Sales v. Court of Appeals24#! :the issue of good faith or .ad faith of a .u&er is

relevant onl& where the su.ect of the sale is a registered land .ut not where the propert& is an

unregistered land( <ne who purchases an unregistered land does so at his peril( 8is claim of

having .ought the land in good faith, i.e.2 without notice that some other person has a right to, orinterest in, the propert&, would not protect him if it turns out that the seller does not actuall& own

the propert&(: evertheless, the application of this doctrine will not affect the outcome of thiscase( RB0 .ought the propert& during the auction sale at its own peril and must suffer the

conse2uences of its failure to investigate the true owners of the su.ect propert& who turned out

to .e respondents "acailos .rothers( 'lthough the discussion on RB0;s .ad faith would nowseem superfluous given the application of this doctrine, the finding of .ad faith is still relevant in

the resolution of the last issue with respect to the award of damages(

'nent the third issue, we liEewise agree with the findings of the Court of 'ppeals thatrespondent "acailos .rothers are not .arred .& laches or estoppel from recovering the

ownership of the su.ect propert&( he& are not estopped from den&ing the representations of

Aidela that she owns the su.ect propert& .ecause the& were never priv& to the loan agreements .etween the .anE and Aidela( he fact that the mortgages and su.se2uent foreclosure

proceedings were dul& registered with the register of deeds will not cure their nullit& .ecause

Aidela never owned the su.ect propert&(

either can respondent "acailos .rothers .e said to have slept on their rights( @ssentiall&,

laches is the failure or neglect, for an unreasona.le and une?plained length of time, to do that

which, .& the e?ercise of due diligence, could or should have .een done earlier= it is negligenceor omission to assert a right within a reasona.le time, warranting a presumption that the part&

entitled to assert it has either a.andoned or declined to assert it(4!

n the case at .ar, respondents "acailos .rothers performed acts which showed their intent to

assert their rightful ownership over the su.ect propert&( 0pecificall&, in 19-$, respondent

Luirico "acailos, %r( came across the notice of pu.lic auction of the su.ect propert& in the pu.lic marEet(44! Gpon investigation with the provincial assessor;s office, he discovered that

Aidela had mortgaged the su.ect propert& to RB0 .& transferring the ta? declaration to her

name after falsel& claiming in the :'ffidavit of 8eirship: that she was the sole heir of *regoria

"acalipa&(

Conse2uentl&, in 19-1 or within a &ear from the discover& of the fraudulent scheme perpetuated

.& Aidela, respondents "acailos .rothers filed a criminal case against Aidela and Iam.erto forestafa through falsification of pu.lic document(45! 'fter Enowing a.out the foreclosure of the

su.ect propert&, respondent Luirico "acailos, %r( tooE possession of the su.ect propert& 4! and

demanded Aidela to vacate( n 19-7, the instant case to remove cloud over the title andForrecover& of real propert& and damages was filed .& respondents "acailos .rothers against RB0

as an off)shoot of the latter;s demand on respondent Luirico "acailos to vacate the su.ect

propert&( 'll in all, these acts show that respondents "acailos .rothers did not sleep on theirrights .ut reasona.l& tooE steps to assert their ownership over the su.ect propert&(



'nent the fourth issue, we note that the tasE of fi?ing the amount of damages primaril& rests with

the trial court as the circumstances of each case ma& warrant provided that the .ases therefor are

full& esta.lished(47! n the case at .ar, the trial court awarded moral and e?emplar& damages aswell as attorne&;s fees in view of its finding that RB0 acted in .ad faith(4-! 's previousl&

discussed, this finding of .ad faith .& the trial court is sufficientl& supported .& the evidence on

record( 8owever, the award of e?emplar& damages should .e deleted since there is no clear andconvincing proof that RB0 acted in a wanton, fraudulent, recEless, oppressive or malevolent

manner to warrant the imposition of the same(49!

7HERE8ORE, the petition is PARTL= GRANTED( he 'pril 1-, #$$1 Decision and

ovem.er 1#, #$$1 Resolution of the Court of 'ppeals in C')*(R( C+ o( 51#9$ which

affirmed the %ul& 1#, 1995 Decision of the Regional rial Court of egros <riental, Dumaguete

Cit&, Branch 9 in Civil Case o( 9$49 declaring respondents Aeli? "acailos and Luirico"acailos, %r( the rightful owners of the su.ect propert&, are A88IRED with

theODI8ICATION that the award of e?emplar& damages is DELETED for lacE of .asis(

SO ORDERED(

The reserva troncal is a special rule designed

primarily to assure the return of the reservable

property to the third degree relatives belonging to

the line from which the property originally came,

and avoid its being dissipated into and by therelatives of the inheriting ascendant (reservista). "*

* *.

@#/&' D#I#&#O;

+"/" ;o" >.2$!A2" &eptember 2, 19$?

@/);#&) '#OO D P)P), M);> '#OO, ;#O>)& '#OO and N);)/#O P)P), !lainti0#-a!!ellee#, v#" D)>#&)V 'O;+TO )M)8O,

P/#MO 'O;+TO and +ODO@/DO )M)8O, defendant#-a!!ellant#"

D # & # O ;

;)/I)&), J.J

'his case which in(ol(es the application of )rticle $91 of the i(il ode

on reser(a troncal, was submitted for *udgment in the lower court b% all

the parties on the following E&tipulation of @acts and Partial ompromiseEJ

http://civillawabc.blogspot.com/2014/10/the-reserva-troncal-is-special-rule.html












E1" 'he% stipulate that the defendant Dalisa% D" 'ongo.amacho and the

plainti4s, @rancisca 'ioco de Papa, Manuel 'ioco and ;icolas 'ioco, are

legitimate relati(es, plainti4s being said defendantFs grandaunt and

granduncles"

2" 'he% stipulate that plainti4s and defendant Dalisa% D" 'ongo.amacho ha(e as a common ancestor the late Balbino 'ioco who had a

sister b% the name of /omana 'ioco:, father of plainti4s and great

grandfather of defendant" 'he famil% relationship of the parties is as

shown in the chart attached hereto as )nne= F)F and made an integral

part of this stipulation"

A" 'he% stipulate that /omana 'ioco during her lifetime gratuitousl%

donated four : parcels of land to her niece 'oribia 'ioco legitimate

sister of plainti4s:, which parcels of land are presentl% co(ered b% 'ransfererti0cates of 'itle ;os" ).?1?5, ?1?? and ?1?7 of the /egistr% of

Deeds of Manila, copies of which are attached to this stipulation as

)nne=es FBF, FB.1F, and FB.2F"

" 'he% stipulate that 'oribia 'ioco died intestate in 1915, sur(i(ed b% her

husband, ustacio Di<on, and their two legitimate children, @austino Di<on

and 'rinidad Di<on mother of defendant Dalisa% D" 'ongo.amacho: and

lea(ing the afore.mentioned four : parcels of land as the inheritance of

her said two children in e6ual pro.indi(iso shares"

5" 'he% stipulate that in 192$, Balbino 'ioco died intestate, sur(i(ed b%

his legitimate children b% his wife Marciana @eli= among them plainti4s:

and legitimate grandchildren @austino Di<on and 'rinidad Di<on" #n the

partition of his estate, three A: parcels of land now co(ered b% 'ransfer

erti0cates of 'itle ;os" 1?55 and 1?55 of the /egistr% of Deeds of

Manila, copies of which are attached hereto as )nne=es FF and F.1F, were

ad*udicated as the inheritance of the late 'oribia 'ioco, but as she had

predeceased her father, Balbino 'ioco, the said three A: parcels of land

de(ol(ed upon her two legitimate children @austino Di<on and 'rinidad

Di<on in e6ual pro.indi(iso shares"

?" 'he% stipulate that in 19A7, @austino Di<on died intestate, single and

without issue, lea(ing his one.half 1U2: pro.indi(iso share in the se(en 7:

parcels of land abo(e.mentioned to his father, ustacio Di<on, as his sole

intestate heir, who recei(ed the said propert% sub*ect to a reser(a troncal

which was subse6uentl% annotated on the 'ransfer erti0cates of 'itle

)nne=es FBF, FB.2F, FF and F.1F"

7" 'he% stipulate that in 19A9 'rinidad Di<on.'ongo died intestate, andher rights and interests in the parcels of land abo(e.mentioned were

inherited b% her onl% legitimate child, defendant Dalisa% D" 'ongo.

amacho, sub*ect to the usufructuar% right of her sur(i(ing husband,

defendant Primo 'ongo"



$" 'he% stipulate that on Nune 1, 19?5, ustacio Di<on died intestate,

sur(i(ed his onl% legitimate descendant, defendant Dalisa% D" 'ongo.

amacho"

9" 'he parties agree that defendant Dalisa% D" 'ongo.amacho now

owns one.half X: of all the se(en 7: parcels of land abo(e.mentioned asher inheritance from her mother, 'rinidad Di<on.'ongo"

1!" Defendant Dalisa% D" 'ongo.amacho also claims, upon legal ad(ice,

the other half of the said se(en 7: parcels of land abo(e.mentioned b%

(irtue of the reser(a troncal imposed thereon upon the death of @austino

Di<on and under the laws on intestatesuccessionG but the plainti4s, also

upon legal ad(ice, oppose her said claim because the% claim three.fourths

AU: of the one.half pro.indi(iso interest in said parcel of land, which

interest was inherited b% ustacio Di<on from @austino Di<on, or three.eights AU$: of the said parcels of land, b% (irtue of their being also third

degree relati(es of @austino Di<on"

11" 'he parties hereb% agree to submit for *udicial determination in this

case the legal issue of whether defendant Dalisa% D" 'ongo.amacho is

entitled to the whole of the se(en 7: parcels of land in 6uestion, or

whether the plainti4s, as third degree relati(es of @austino Di<on are

reser(atarios together with said defendant: of the one.half pro.indi(iso

share therein which was inherited b% ustacio Di<on from his son @austino

Di<on, and entitled to three.fourths AU: of said one.half pro.indi(isoshare, or three eights AU$: of said se(en 7: parcels of land, and,

therefore, to three.eights AU$: of the rentals collected and to be collected

b% defendant Dalisa% P" 'ongo amacho from the tenants of said parcels

of land, minus the e=penses andUor real estate ta=es corresponding to

plainti4sF share in the rentals"

12" #n (iew of the fact that the parties are close blood relati(es and ha(e

acted upon legal ad(ice in pursuing their respecti(e claims, and in order

to restore and preser(e harmon% in their famil% relations, the% hereb%

wai(e all their claims against each other for damages other than legal

interest on plainti4sF share in the rentals which this 8onorable ourt ma%

deem proper to award:, attorne%Fs fees and e=penses of litigation which

shall be borne b% the respecti(e parties"E

On the basis thereof, the lower ourt declared the plainti4s @rancisco

'ioco, Manuel 'ioco and ;icolas 'ioco, as well as the defendant Dalisa%

'ongo.amacho, entitled, as reser(atarios, to one.half of the se(en

parcels of land in dispute, in e6ual proportions, rendering *udgment as

followsJ

E[ [ [" /esol(ing, therefore, the legal 6uestion submitted b% the parties,

the court holds that plainti4s @rancisca 'ioco, Manuel 'ioco and ;icolas

'ioco are entitled to three.fourths AU: of one.half 1U2: pro.indi(iso

shares or three.eights AU$: of the se(en 7: parcels of land in(ol(ed in



this action" onse6uentl%, the% are, liewise, entitled to three.eights AU$:

of the rentals collected and to be collected b% the defendant Dalisa% D"

'ioco amacho from the tenants of the said parcels of land, minus the

e=penses andUor real estate ta=es corresponding to plainti4sF share in the

rentals"#; I#3 O@ '8 @O/+O#;+, and inasmuch as the parties e=pressl%

wai(ed all their claims against each other for damages including

attorne%Fs fees and e=penses of litigation other than the legal interests on

plainti4sF share in the rentals, the court renders *udgment ad*udging the

plainti4s entitled to three.eights AU$: of the se(en 7: parcels of land

described in 'ransfer erti0cate of 'itle ;os" '.?1?5, '.?1??, '.?1?7,

'.1?5? and '.1?55 of the /egistr% of Deeds of Manila" 'he defendant

Dalisa% D" 'ioco.amacho is hereb% ordered to mae an accounting of all

rents recei(ed b% her on the properties in(ol(ed in this action for thepurpose of determining the legal interests which should be paid to the

plainti4s on their shares in the rentals of the propert% in 6uestion"

&O O/D/D"E

;ot satis0ed, the defendant appealed to this ourt"

'he issue raised is whether, as contended b% the plainti4s.appellees and

ruled b% the lower ourt, all relati(es of the praeposituswithin the third

degree in the appropriate line succeed without distinction to thereser(able propert% upon the death of the reser(ista, as seems to be

implicit in )rt" $91 of the i(il ode, which readsJ

E)rt" $91" 'he ascendant who inherits from his descendant an% propert%

which the latter ma% ha(e ac6uired b% gratuitous title from another

ascendant, or a brother or sister, is obliged to reser(e such propert% as he

ma% ha(e ac6uired b% operation of law for the bene0t of relati(es who are

within the third degree and who belong to the line from which said

propert% came" $11:E,

or, as asserted b% the defendant.appellant, the rights of said relati(es are

sub*ect to, and should be determined b%, the

rules

onintestate succession"

&hat uestion has already been answered in 'adura vs% aldovino, where

the reservatario was survived by eleven nephews and nieces of

the praepositus in the line of origin, four of whole blood and seven of half

blood, and the claim was also made that all eleven were entitled to the

reversionary property in eual shares% &his ourt, spea*ing through +r%

ustice %%-% .eyes, declared the principles of intestacy to be controlling, andruled that the nephews and nieces of whole blood were each entitled to a

share double that of each of the nephews and nieces of half blood in

accordance with Article 1//0 of the ivil ode% aid the ourt:



2&he issue in this appeal may be formulated as follows: In a case of reserva

troncal, where the onlyreservatarios (reservees) surviving the reservista, and

belonging to the line of origin, are nephews of the descendant (prepositus),

but some are nephews of the half blood and the others are nephews of the

whole blood, should the reserved properties be apportioned among

then eually, or should the nephews of the whole blood ta*e a share twice as

large as that of the nephews of the half blood3

E[ [ ["

'he case is one of 0rst impression and has di(ided the &panish

commentators on the sub*ect" )fter mature reYection, we ha(e concluded

that the position of the appellants is

correct"

&he reserva troncal is a special rule designed

primarily to assure the return of the reservableproperty to the third degree relatives belonging to the

line from which the property originally came, and

avoid its being dissipated into and by the relatives of

the inheriting ascendant (reservista)%

E[ [ ["

'he stated purpose of the reser(a is accomplished once the propert% hasde(ol(ed to the speci0ed relati(es of the line of origin" But from this time

on, there is no further occasion for its application" #n the relations

between one reser(atario and another of the same degree there is no call

for appl%ing )rt" $91 an% longerG wherefore, the respecti(e share of each

in the re(ersionar% propert% should be go(erned b% the ordinar%

rules of intestate succession" #n this spirit the *urisprudence of this ourt

and that of &pain has resol(ed that upon the death of the

ascendant reser(ista, the reser(able propert% should pass, not to all

the reser(atarios as a class but onl% to those nearest in degree to thedescendant prepositus: e=cluding those reser(atarios of more remote

degree @lorentino (s" @lorentino, ! Phil" $9.9!G '"&" $ ;o(" 1$9G Dir"

+en" de los /egistros, /esol" 2! March 19!5:" )nd within the third degree

of relationship from the descendant prepositus:, the right of

representation operates in fa(or of nephews @lorentino (s"

@lorentino,supra:"

E@ollowing the order prescribed b% law

in legitimate

succession , when

there are relati(es of the descendant within the third degree, the right of

the nearest relati(e, called reser(atario, o(er the propert% which the

reser(ista person holding it sub*ect to reser(ation:should return to him,

e=cludes that of the one more remote" 'he right of representation cannot

be alleged when the one claiming same as a reser(atario of the

reser(able propert% is not among the relati(es within the third degree

belonging to the line from which such propert% came, inasmuch as the



right granted b% the i(il ode in )rticle $11 is in the highest degree

personal and for the e=clusi(e bene0t of designated persons who are

within the third degree of the person from whom the reser(able propert%

came" 'herefore, relati(es of the fourth and the succeeding degrees can

ne(er be considered as reser(atarios, since the law does not recogni<ethem as such"

E#n spite of what has been said relati(e to the right of representation on

the part of one alleging his right as reser(atario who is not within the third

degree of relationship, ne(ertheless there is right of representation on the

part of reser(atarios who are within the third degree mentioned b% law, as

in the case of nephews of the deceased person from whom the reser(able

propert% came" [ [ ["E @lorentino (s" @lorentino, ! Phil" $!, $9.9!:

mphasis supplied: &ee also ;ie(a and )lcala (s" )lcala and de Ocampo,

1 Phil" 915:

Pro=imit% of degree and right of representation are basic principles

of

ordinar% intestate successionG so is the rule that whole blood brothers

and nephews are entitled to a share double that of brothers and nephews

of half blood" #f in determining the rights of thereser(atarios inter se,

pro=imit% of degree and the right of representation of nephews are made

to appl%, the rule of double share for immediate collaterals of the whole

blood should be liewise operati(e"

#n other words, the reser(a troncal merel% determines the group of relati(es reser(atarios: to whom the propert% should be returnedG

but within that group, the indi(idual right to the propert% should be

decided b% the applicable rules of

ordinar% intestatesuccession, since )rt"

$91 does not specif% otherwise" 'his conclusion is strengthened b% the

circumstance that the reser(a being an e=ceptional case, its application

should be limited to what is strictl% needed to accomplish the purpose of

the law" )s e=pressed b% Manresa in his ommentaries Iol" ?, ?th d", p"

25!:J

E[ [ [ creandose un (erdadero estado e=cepcional del derecho, no debe

ampliarse, sino mas bien restringirse, el alcance del precepto,

manteniendo la e=cepcion mientras fuere necesaria % estu(iese

realmente contenida en la disposicion, % aplicando las reglas generales %

fundamentales del odigo en materia de sucesion, en a6uellos e=tremos

no resueltos de un modo e=preso, % 6ue 6uedan fuera de la propia esfera

de accion de la reser(a 6ue se crea"E

'he restricti(e interpretation is the more imperati(e in (iew of the new

i(il odeFs hostilit% to successional reser(as and re(ersions, ase=empli0ed b% the suppression of the reser(a (iudal and the re(ersion

legal of the ode of 1$$9 )rt" $12 and 9?$.9$!:"E

/e(ersion of the reser(able propert% being go(erned b% the

rules

on intestate succession, the plainti4s.appellees must be held



without an% right thereto because, as aunt and uncles, respecti(el%, of

@austino Di<on the praepositus:, the% are

e=cluded

from thesuccession b% his niece, the defendant.appellant,

although the% are related to him within the same degree as the latter" 'o

this e4ect is )bellana (s" @erraris where )rts" 1!!1, 1!!, 1!!5 and 1!!9of the i(il ode were cited and appliedJ

E;e(ertheless, the trial court was correct when it held that, in case of

intestac%, nephews and nieces of the de cu*us e=clude all other collaterals

aunts and uncles, 0rst cousins, etc":

from the succession" 'his is readil%

apparent from articles 1!!1, 1!!, 1!!5, and 1!!9 of the i(il ode of

the Philippines, that pro(ide as followsJ

E)rt" 1!!1" &hould brothers and sisters or their children sur(i(e with the

widow or widower, the latter shall be entitled to one.half of theinheritance and the brothers and sisters or their children to the other

half"E

E)rt" 1!!" &hould the onl% sur(i(ors be brothers and sisters of the full

blood, the% shall inherit in e6ual shares"E

E)rt" 1!!5" &hould brothers and sisters sur(i(e together with nephews

and nieces who are the children of the decedentFs brothers and sisters of

the full blood, the former shall inherit per capita, and the latter per

stirpes"E

E)rt" 1!!9" &hould there be neither brothers nor sisters, nor children of

brothers or sisters, the other collateral relati(es shall succeed to the

estate"E

nder the last article 1!!9:, the absence of brothers, sisters, nephews

and nieces of the decedent is a precondition to the other collaterals

uncles, cousins, etc": being called to the succession" 'his was also and

more clearl% the case under the &panish i(il ode of 1$$9, that

immediatel% preceded the i(il ode now in force /")" A$?:" 'hus,)rticles 952 and 95 of the ode of 1$$9 prescribed as followsJ

E)rt" 952" #n the absence of brothers or sisters and of nephews or nieces,

children of the former, whether of the whole blood or not, the sur(i(ing

spouse, if not separated b% a 0nal decree of di(orce shall succeed to the

entire estate of the deceased"E

E)rt" 95" &hould there be neither brothers nor sisters, nor children of

brothers or sisters, nor a sur(i(ing spouse, the other collateral relati(es

shall succeed to the estate of deceased"

'he latter shall succeed without distinction of lines or preference among

than b% reason of the whole blood"E

#t will be seen that under the preceding articles, brothers and sisters and

nephews and nieces inherited ab intestato ahead of the sur(i(ing spouse,



while other collaterals succeeded onl% after the widower or widow" 'he

present i(il ode of the Philippines merel% placed the spouse on a par

with the nephews and nieces and brothers and sisters of the deceased,

but without altering the preferred position of the latter (is a (is the other

collaterals"EE[ [ ["

3e, therefore, hold, and so rule, that under our laws of succession, a

decedentFs uncles and aunts ma% not succeed ab intestato so long as

nephews and nieces of the decedent sur(i(e and are willing and 6uali0ed

to succeed" [ [ [E

'his conclusion is forti0ed b% the obser(ation, also made in Padura, supra,

that as to the reser(able propert%, the reser(atarios do not inherit from

the reser(ista, but from the descendant praepositusJ

E[ [ [" #t is liewise clear that the reser(able propert% is no part of the

estate of the reser(ista, who ma% not dispose of it b% will, as long as there

are reser(atarios e=isting )rro%o (s" +erona, 5$ Phil" 2A7:" 'he latter,

therefore, do not inherit from the reser(ista, but from the

descendant prepositus, of whom the reser(atarios are the

heirs mortis causa, sub*ect to the condition that the% must sur(i(e

the reser(ista" &anche< /oman, Iol" I#, 'omo 2, p" 2$?G Manresa,

ommentaries, Iol" ?, ?th d", pp" 27, A1!: [ [ ["E

'o the same e4ect is ano (s" Director of >ands, where it was ruled that

intestac% proceedings to determine the right of areser(atario are not

necessar% where the 0nal decree of the land court ordering issuance of

title in the name of the reser(ista o(er propert% sub*ect

to reser(a troncal identi0es the reser(atario and there are no other

claimants to the latterFs rights as suchJ

E'he contention that an intestac% proceeding is still necessar% rests upon

the assumption that the reser(atario will succeed in, or inherit, thereser(able propert% from the reser(ista" 'his is not true"

'he reser(atario is not the reser(istaFs successor mortis causanor is the

reser(able propert% part of the reser(istaFs estateG

the reser(atario recei(es the propert% as a conditional heir of the

descendant prepositus:, said propert% merel% re(erting to the line of

origin from which it had temporaril% and accidentall% stra%ed during

the reser(istaFs lifetime" 'he authorities are all agreed that there

being reser(atarios that sur(i(e the reser(ista, the matter must be

deemed to ha(e en*o%ed no more than a life interest in the reser(ablepropert%"

#t is a conse6uence of these principles that upon the death of

the reser(ista, the reser(atario nearest to the prepositus the appellee in

this case: becomes, automaticall% and b% operation of law, the owner of

the reser(able propert%" )s alread% stated, that propert% is no part of the



estate of the reser(ista, and does not e(en answer for the debts of the

latter" [ [ ["E

8ad the re(ersionar% propert% passed directl% from the praepositus, there

is no doubt that the plainti4s.appellees would ha(e been e=cluded b% the

defendant.appellant under the rules

of intestate succession" 'here is noreason wh% a di4erent result should obtain simpl% because Ethe

transmission of the propert% was dela%ed b% the interregnum of

the reser(aEG i"e", the propert% too a EdetourE through an ascendant ..

thereb% gi(ing rise to the reser(ation .. before its transmission to

the reser(atario"

pon the stipulated facts, and b% (irtue of the rulings alread% cited, the

defendant.appellant Dalisa% 'ongo.amacho is entitled to the entiret% of

the re(ersionar% propert% to the e=clusion of the plainti4s.appellees"

7+EREFORE, the appealed *udgment of the lower ourt is re(ersed and

set aside and the complaint is dismissed, with costs against the plainti4s.

appellants"

&O O/D/D"

8IRST DIVISION

REP!<LIC O8 THE PHILIPPINES,

'&'&s&*t& -/ t%& DIRECTOR O8

LANDS,

Petitioner,

versus

REGISTER O8 DEEDS O8 ROBAS

CIT=, ELI"A<ETH LEE, )*

PACITA =!LEE,

Respondents(

G.R. N. 15:2?0

Present/

PG<, C..2 Chairperson,

C'RP<,

C<R<',

'UCG', and

I@<'RD<)D@ C'0R<, .

Promulgated/

%ul& 1, #$$-

? ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ?

D E C I S I O N

CARPIO, $.$



T%& C)s&

his is a petition for review of the Decision dated 1# %ul& #$$# and the

Resolution dated 9 "a& #$$ of the Court of 'ppeals in C')*(R( C+ o(

5-9$(

T%& 8)(ts

n "arch 19, Iee Iiong, a Chinese citi3en, .ought Iot o( 9-

from +icenta 'rcenas, Arancisco, Carmen Ramon, "ercedes, Concepcion,

"ariano, %ose, and "anuel, all surnamedDinglasan( Iot o( 9-, with an area of

1,574 s2uare meters, is located at the corner of Ro?as

'venue and Pavia 0treet in Ro?as Cit&( n Ae.ruar& 1944, Iee Iiong died intestate

and was survived .& his widow 'ng Chia, and his sons Iee Bing 8oo and Iee Bun

ing( <n $ %une 1947, the surviving heirs of Iee Iiong e?traudiciall& settled the

estate of the deceased and partitioned among themselves Iot o( 9-( >hen Iee

Bing 8oo and Iee Bun ing died, Iot o( 9- wastransferred .& succession to

their respective wives, @li3a.eth Iee [email protected] and Pacita Ku)Iee 6Pacita(

n the 195 case of (inglasan v. 3ee $un Ting , involving Iot o( 9-,

the Court held that even if the sale of the propert& was null and void for violating

the constitutional prohi.ition on the sale of land to an alien, still the doctrineof in pari delicto .arred the sellers from recovering the title to the propert&( @leven

&ears later, in the case of 3ee $un Ting v. udge Aligaen, the Court ordered the trial

court to dismiss the complaint of the Dinglasans for the recover& of Iot o( 9-(

'ppl&ing the doctrine of res 'udicata, the Court held that the case was a

mere relitigation of the same issues previousl& adudged with finalit& in

the (inglasan case, involving the same parties or their privies and concerning the

same su.ect matter(

<n 7 0eptem.er 199, @li3a.eth and Pacita 6private respondents filed a petition for reconstitution of title of Iot o( 9- .ecause the records of the

Register of Deeds, Ro?as Cit& were .urned during the war( <n <cto.er #$$1, the

Court held that the trial courts order of reconstitution was void for lacE of factual

support .ecause it was .ased merel& on the plan and technical description

approved .& the Iand Registration 'uthorit&(

"eanwhile, on # %anuar& 1995, petitioner Repu.lic of the Philippines

6petitioner, through the <ffice of the 0olicitor *eneral 6<0*, filed with the

Regional rial Court of Ro?as Cit& a Complaint for Reversion of itle against

private respondents and the Register of Deeds of Ro?asCit&, pra&ing that 61 the

sale of Iot o( 9- to Iee Iiong .e set aside for .eing null and void abinitio= and

6# Iot o( 9- .e reverted to the pu.lic domain for the 0tates disposal in

accordance with law(



n their 'nswer, private respondents invoEed as affirmative defenses/ 61

prescription= 6# private ownership of Iot o( 9-= and 6 Iee Iiongs .eing a

.u&er in good faith and for value( Aurthermore, private respondents claimed that

as Ailipino citi3ens, the& are 2ualified to ac2uire Iot o( 9- .& succession(

he Register of Deeds of Ro?as Cit& did not file an answer(

<n 7 "a& 199, the trial court rendered a decision ordering the reversion of

Iot o( 9- to the 0tate(

<n appeal, the Court of 'ppeals rendered its Decision dated 1# %ul& #$$#,

reversing the trial courts decision and declaring private respondents as the

a.solute and lawful owners of Iot o( 9-( Petitioner moved for reconsideration,

which the Court of 'ppeals denied in its Resolutiondated 9 "a& #$$(

8ence, this petition for review(

T%& Ru*g + t%& T') Cu't

he trial court ordered the reversion of Iot o( 9- to the 0tate( he trialcourt held that private respondents could not have ac2uired a valid title over Iot

o( 9- .ecause the sale of the lot to their predecessor)in)interest Iee Iiong was

null and void( Being an innocent purchaser in good faith and for value did not cure

Iee Iiongs dis2ualification as an alien who is prohi.ited from ac2uiring land

under the Constitution( he trial court further held that prescription cannot .e

invoEed against the 0tate as regards an action for reversion or reconve&ance of

land to the 0tate(

T%& Ru*g + t%& Cu't + A&)s

he Court of 'ppeals agreed with the trial court that the 0tate is not .arred

.& prescription( 8owever, the Court of 'ppeals held that the trial court erred in

ordering the reversion of Iot o( 9- to the 0tate( 'lthough the sale of Iot o(

9- to Iee Iiong violated the constitutional prohi.ition on aliens ac2uiring land,

the Court of 'ppeals noted that Iot o( 9- had alread& .een ac2uired .&

private

respondents through succession( he transfer of Iot o( 9- to private

respondents, who are Ailipino citi3ens 2ualified to ac2uire lands, can no longer .e

impugned on the .asis of the invalidit& of the initial transfer( he flaw in the

original transaction is considered cured and the title of the transferee is deemed

valid considering that the o.ective of the constitutional proscription against alien

ownership of lands, that is to Eeep our lands in Ailipino hands, has .een achieved(



T%& Issu&

Petitioner raises the lone issue that/

8@ C<GR <A 'PP@'I0 *R'+@IK @RR@D >8@ R@+@R0@D 'D 0@

'0D@ 8@ 'PP@'I@D D@C0< 'D D@CI'R@D PR+'@ R@0P<D@0 8@

'B0<IG@ 'D I'>AGI <>@R0 'D P<00@00<R0 <A I< <( 9- <A

R<M'0 CK C'D'0R@ C<0D@R* 8' I@@ I<*, >8< 0 ' 'I@,

'D 8G0, C<0G<'IIK PR<8B@D < <> R@'I PR<P@RK 8@

P8IPP@0, 'CLGR@D < R*8 <R I@ <+@R 0GB%@C I< >8C8 8@

C<GID 8'+@ R'0"@D BK 0GCC@00< < PR+'@ R@0P<D@0

PR@D@C@00<R0))@R@0(

T%& Ru*g + t%& Cu't

he petition is without merit(

Petitioner argues that since the sale of Iot o( 9- to Iee Iiong was void,

Iot o( 9- never .ecame part of the deceased Iee Iiongs estate( 8ence, Iot o(

9- could not .e

transmitted .&succession to Iee Iiongs surviving heirs andeventuall& to private respondents(

>e do not su.scri.e to petitioners position( he circumstances of this

case are similar to the case of (e Castro v. Teng /ueen Tan, wherein a residential

lot was sold to a Chinese citi3en( Gpon the death of the alien vendee, his heirs

entered into an e?traudicial settlement of the estate of the deceased and the su.ect

land was transferred to a son who was a naturali3ed Ailipino( 0u.se2uentl&, the

vendor of the lot filed a suit for annulment of sale for alleged violation of the

Constitution prohi.iting the sale of land to aliens( ndependentl& of the doctrineof in pari delicto, the Court sustained the sale, holding that while the vendee was

an alien at the time of the sale, the land has since .ecome the propert& of a

naturali3ed Ailipino citi3en who is constitutionall& 2ualified to own land(

0imilarl&, in this case, upon the death of the original vendee who was a

Chinese citi3en, his widow and two sons e?traudiciall& settled his estate, including

Iot o( 9-( >hen the two sons died, Iot o( 9-

was transferred .& succession to their respective spouses, herein private

respondents who are Ailipino citi3ens(

>e now discuss whether reversion proceedings is still via.le considering

that Iot o( 9- has alread& .een transfered to Ailipino citi3ens( n the

reconstitution case of 3ee v. %epublic of t"e P"ilippines involving Iot o( 9-, this



Court e?plained that the <0* ma& initiate an action for reversion or escheat of

lands which were sold to aliens dis2ualified from ac2uiring lands under the

Constitution( 8owever, in the case of Iot o( 9-, the fact that it was alread&

transferred to Ailipinos militates against escheat proceedings, thus/

'lthough ownership of the land cannot revert to the original sellers, .ecause of the

doctrine of pari delicto, the 0olicitor *eneral ma& initiate an action for reversion or escheat

of the land to the 0tate, su.ect to other defenses, as hereafter set forth(

I* t%s ()s&, su-s&@u&*t ('(u3st)*(&s 3t)t& )g)*st &s(%&)t '(&&*gs

-&()us& t%& )* s * * t%& %)*s + 8*s. T%& 'g*) &*&&, L&& L*g, %)s

s*(& & )* t%& )* %)s -&&* *%&'t& -/ %s %&'s )* su-s&@u&*t/ t%&' %&'s,

&tt*&'s %&'&* [EF)-&t% L&& )* P)(t) =u L&&]. P&tt*&'s )'& 8* (tF&*s, )

+)(t t%& S(t' G&*&') &s *t sut&.

he constitutional proscription on alien ownership of lands of the pu.lic or private

domain was intended to protect lands from falling in the hands of non)Ailipinos( n this case,

however, there would .e no more pu.lic polic& violated since the land is in the hands of

Ailipinos 2ualified to ac2uire and own such land( Wf land is invalidl& transferred to an alien

who su.se2uentl& .ecomes a citi3en or transfers it to a citi3en, the flaw in the original

transaction is considered cured and the title of the transferee is rendered valid(X hus, the

su.se2uent transfer of the propert& to 2ualified Ailipinos ma& no longer .e impugned on the .asis of invalidit& of the initial transfer( he o.ective of the constitutional provision to Eeep

our lands in Ailipino hands has .een achieved( 6@mphasis supplied

n this case, the reversion proceedings was initiated onl& after almost 4$

&ears from the promulgation of the case of (inglasan v. 3ee $un Ting , where the

Court held that the sale of Iot o( 9- was null and void for violating the

constitutional prohi.ition on the sale of land to an alien( f petitioner had

commenced reversion proceedings when Iot o( 9- was still in the hands of theoriginal vendee who was an alien dis2ualified to hold title thereto, then reversion

of the land to the 0tate would undou.tedl& .e allowed( 8owever, this is not the

case here( >hen petitioner instituted the action for reversion of title in 1995, Iot

o( 9- had alread& .een transferred .& succession to private respondents who are

Ailipino citi3ens(

0ince Iot o( 9- has alread& .een transferred to Ailipino citi3ens, the flaw

in the original transaction is considered cured( 's held in C"avez v. Public ,states

Aut"ority/

hus, the Court has ruled consistentl& that where a Ailipino citi3en sells land to an

alien who later sells the land to a Ailipino, the invalidit& of the first transfer is corrected .&

the su.se2uent sale to a citi3en( 0imilarl&, where the alien who .u&s the land su.se2uentl&



ac2uires Philippine citi3enship, the sale was validated since the purpose of the constitutional

.an to limit land ownership to Ailipinos has .een achieved( n short, t%& ) s'&g)'s t%&

(*sttut*) s@u)+()t* + t%& -u/&' t % )* + t%& )* s su-s&@u&*t/

t')*s+&''& t ) @u)+& )'t/, ' t%& -u/&' %3s&+ -&(3&s ) @u)+&

)'t/. 6@mphasis supplied

Clearl&, since Iot o( 9- has alread& .een transferred to private

respondents who are Ailipino citi3ens, the prior invalid sale to Iee Iiong can no

longer .e assailed( 8ence, reversion proceedings will no longer prosper since the

land is now in the hands of Ailipino citi3ens(

7HERE8ORE, we DEN= the petition( >e A88IR the Decision dated

1# %ul& #$$# and the Resolution dated 9 "a& #$$ of the Court of 'ppeals in

C')*(R( C+ o( 5-9$(

SO ORDERED(

*(R( <( 117#4( 'ugust #1, 1995!

B@*< "'G@I, IB@R'< "'G@I, I<R@U< "'G@I, PI'CD'

"'G@I, "'DR<' "'G@I, @0P@R'U' "'G@I, '*'P' "'G@I,

B'0I0' "'G@I, @"I' "'G@I and G"@R''"'G@I, petitioners2 vs. 8<( C<D@"< ( A@RR@R, Presiding %udge, Regional rial

Court, Branch 7, Iinga&en, Pangasinan, "<D@0' B'I'U'R and @0'0I'<'

"'G@I, respondent s.

D @ C 0 <

+G*, (/

he propert& involved in this petition for review on certiorari is the inheritance left .& an

illegitimate child who died intestate without an& surviving descendant or ascendant(

Petitioners, the legitimate children of spouses 'ntonio "anuel and Beatri3 *uiling, initiated

this suit( During his marriage with Beatri3, 'ntonio had an e?tra)marital affair with one

Grsula Bautista( Arom this relationship, %uan "anuel was .orn( 0everal &ears passed .efore

'ntonio "anuel, his wife Beatri3, and his mistress Grsula finall& crossed the .ar on,

respectivel&, $ 'ugust 19$, $5 Ae.ruar& 19-1, and $4 ovem.er 197(

%uan "anuel, the illegitimate son of 'ntonio, married @speran3a *am.a( n consideration of

the marriage, a donation propter nuptias over a parcel of land, with an area of #,7$$ s2uare

meters, covered .& <riginal Certificate of itle 6:<C: o( P)#$594 was e?ecuted in favor

of %uan "anuel .& Iaurenciana "anuel( wo other parcels of land, covered .& <C P)

199$# and ransfer Certificate of itle 6:C: o( 4114, were later .ought .& %uan and

registered in his name( he couple were not .lessed with a child of their own( heir desire

to have one impelled the spouses to taEe private respondent "odesta "anuel)Balta3ar into

their fold and so raised her as their own :daughter(:

<n $ %une 19-$, %uan "anuel e?ecuted in favor of @stanislaoa "anuel a Deed of 0ale Con

Pacto de %etro 6with a 1$)&ear period of redemption over a one)half 61F# portion of his



land covered .& C o( 4114( %uan "anuel died intestate on #1 Ae.ruar& 199$( wo

&ears later, or on $4 Ae.ruar& 199#, @speran3a *am.a also passed awa&(

<n $5 "arch 199#, a month after the death of @speran3a, "odesta e?ecuted an 'ffidavit of

0elf)'dudication claiming for herself the three parcels of land covered .& <C P)#$594,

<C P)199$# and C o( 4114 6all still in the name of %uan "anuel( Aollowing theregistration of the document of adudication with the <ffice of the Register of Deeds, the

three titles 6<C P)#$594, <C P)199$# and C o( 4114 in the name of %uan "anuel

were canceled and new titles, C o( 1-4##, C o( 1-4##4 and C o( 1-4##5, were

issued in the name of "odesta "anuel)Balta3ar( <n 19 <cto.er 199#, "odesta e?ecuted in

favor of her co)respondent @stanislaoa "anuel a Deed of Renunciation and Luitclaim over

the unredeemed one)half 61F# portion of the land 6now covered .& C o( 1-4##5 that

was sold to the latter .& %uan "anuel under the 19-$ Deed of 0ale Con Pacto de %etro(

hese acts of "odesta apparentl& did not sit well with petitioners( n a complaint filed

.efore the Regional rial Court of Iinga&en, Pangasinan, the petitioners sought the

declaration of nullit& of the aforesaid instruments(

he case, there .eing no material dispute on the facts, was su.mitted to the court a 2uo for

summar& udgment(

he trial court, in its now assailed 15th 'ugust 1994 decision, s3ss& the complaint

holding that petitioners, not .eing heirs abintestato of their illegitimate .rother %uan "anuel,

were not the real parties)in)interest to institute the suit( Petitioners were also ordered to

ointl& and severall& 6solidaril& pa& 6a respondent "odesta "anuel)Balta3ar the sum of

P5,$$$($$ for moral damages, P5,$$$($$ for e?emplar& damages, P5,$$$($$ for attorne&;sfees and P5$$($$ for litigation e?penses and 6. @stanislaoa "anuel the sum of P5,$$$($$ for

moral damages, P5,$$$($$ for e?emplar& damages and P5$$($$ for attorne&;s fees(

Petitioners; motion for reconsideration was denied .& the trial court(

he petition .efore us raises the following contentions/ hat )

:1( 8@ I<>@R C<GR 68'0 A'I@D < C<0D@R 8@ I'0 P'R'*R'P8 <A

'RCI@ 994 <A 8@ @> C+I C<D@, '0 8@ C<R<II* I'>

'PPIC'BI@ BK +RG@ <A 8@ 'D"@D A'C0, 'D < 'RCI@ 99# <A

8@ 0'"@ C<D@(

W# 8@ I<>@R C<GR, < 'GII* 'II 8@ 'C0 <A, 'D +<D* 'IID<CG"@0 @M@CG@D BK, R@0P<D@ "<D@0' B'I'U'R, >8<

'RR<*'@D G< 8@R0@IA 8@ R*80 <A ' 8@R < 8@ @0'@ <A

D@C@D@ %G' "'G@I, 68'0 +RG'IIK *R'@D 0'D R@0P<D@

8@ 0'G0 <A ' 8@R "'A@0IK C<R'RK < I'>, "<R'I0 'D

PGBIC P<ICK(

W( < @A<RC@ <@;0 R*8 >8@ 8@K 'R@ +<I'@D 0 @+@R ' I@*'I

>R<*(:

Petitioners argue that the& are the legal heirs over one)half of %uan;s intestate estate 6while

the other half would pertain to %uan;s surviving spouse under the provision of the last

paragraph of 'rticle 994 of the Civil Code, providing thusl&/

:'rt( 994( n default of the father or mother, an illegitimate child shall .e succeeded .& his

or her surviving spouse, who shall .e entitled to the entire estate(



:f the widow or widower should survive with .rothers and sisters, nephews and nieces, she

or he shall inherit one)half of the estate, and the latter the other half(: 6Gnderscoring

supplied(

Respondents, in turn, su.mit that 'rticle 994 should .e read in conunction with 'rticle 99#

of the Civil Code, which reads/:'rt( 99#( 'n illegitimate child has no right to inherit ab intestato from the legitimate

children and relatives of his father or mother= nor shall such children or relative inherit in the

same manner from the illegitimate child(: 6Gnderscoring supplied(

'rticle 99#, a .asic postulate, enunciates what is so commonl& referred to in

the

rules on succession as the :principle of a.solute separation .etween the legitimate famil&

and the illegitimate famil&(: he doctrine reects succession a. intestato in the collateral

line .etween legitimate relatives, on the one hand, and illegitimate relatives, on other hand,

although it does not totall& disavowsuch succession in the direct line( 0ince the rule is

predicated on the presumed will of the decedent, it has no application, however, on

testamentar& dispositions(

his :.arrier: .etween the mem.ers of the legitimate and illegitimate famil& in intestac& is

e?plained .& a noted civilist( 8is thesis/

:>hat is meant .& the law when it speaEs of .rothers and sisters, nephews and nieces, as

legal or intestate heirs of an illegitimate childH t must .e noted that under 'rt( 99# of the

Code, there is a .arrier dividing mem.ers of the illegitimate famil& from mem.ers of the

legitimate famil&( t is clear that .& virtue of this .arrier, the legitimate .rothers and sisters

as well as the children, whether legitimate or illegitimate, of such .rothers and sisters, cannotinherit from the illegitimate child( C*s&@u&*t/, %&* t%& ) s&)s + -'t%&'s )*

sst&'s, *&%&s )* *&(&s )s &g) %&'s + )* &gt3)t& (%, t '&+&'s t &gt3)t&

-'t%&'s )* sst&'s )s & )s t t%& (%'&*, %&t%&' &gt3)t& ' &gt3)t&, + su(%

-'t%&'s )* sst&'s(: 6@mphasis supplied

he Court, too, has had occasions to e?plain this :iron curtain,: firstl&, in the earl& case of

*re& v( Aa.ie and, then, in the relativel& recent cases of Dia3 v( ntermediate 'ppellate Court

and De la Puerta v( Court of 'ppeals( n Dia3, we have said/

:'rticle 99# of the ew Civil Code ? ? ? prohi.its a.solutel& a succession ab

intestato .etween the illegitimate child and the legitimate children and relatives of the father or mother of said legitimate child( he& ma& have a natural tie of .lood, .ut this is not

recogni3ed .& law for the purposes of 'rticle 99#( Between the legitimate famil& and the

illegitimate famil& there is presumed to .e an intervening antagonism and incompati.ilit&(

he illegitimate child is disgracefull& looEed down upon .& the legitimate famil&= the

legitimate famil& is, in turn, hated .& the illegitimate child= the latter considers the privileged

condition of the former, and the resources of which it is there.& deprived= the former, in turn,

sees in the illegitimate child nothing .ut the product of sin, palpa.le evidence of a .lemish

.roEen in life= the law does no more than recogni3e this truth, .& avoiding further grounds of

resentment(:

he rule in 'rticle 99# has consistentl& .een applied .& the Court in several other cases(

hus, it has ruled that where the illegitimate child had half).rothers who were legitimate, the

latter had no right to the former;s inheritance= that the legitimate collateral relatives of the

mother cannot succeed from her illegitimate child= that a natural child cannot represent his



natural fatherin the succession to the estate of the legitimate grandparent= that the natural

daughter cannot succeed to the estate of her deceased uncle who is a legitimate .rother of her

natural father= and that an illegitimate child has no right to inherit ab intestato from the

legitimate children and relatives of his father( ndeed, the law on succession is animated .& a

uniform general intent, and thus no part should .e rendered inoperative .&, .ut must alwa&s .e construed in relation to, an& other part as to produce a harmonious whole(

n passing, we might, in eas& graphic presentation, collate the order of preference and

concurrence in intestac& e?pressed in 'rticle 97- through 'rticle 1$14, inclusive, of the Civil

Code= vi3/

%rder of Preference %rder of !oncurrence

6a Iegitimate Children and Descendants 6a 3egitimate C"ildren and (escendants, llegitimate Children

and Descendants, and 0urviving 0pouse

6. Iegitimate Parents and 'scendants 6. 3egitimate Parents and Ascendants2 llegitimate Childrenand Descendants, and 0urviving 0pouse

6c llegitimate Children and Descendants 6in the a.sence of CDs

and IP's, the llegitimate Parents

6c Illegitimate C"ildren and (escendants and 0urviving

0pouse

6d 0urviving 0pouse 6d Surviving Spouse and llegitimate Parents

6e Brothers and 0istersFephews and ieces 6e $rot"ers and Sisters:)ep"e#s and )ieces and 0urviving

0pouse

6f <ther Collateral Relatives 6within the fifth civil degree 6f 'lone

6g 0tate 6g 'lone

n her answer to the complaint, "odesta candidl& admitted that she herself is not an intestateheir of %uan "anuel( 0he is right( ' ward 6ampon, without the .enefit of formal 6udicial

adoption, is neither a compulsor& nor a legal heir(

>e must hold, nevertheless, that the complaint of petitioners seeEing the nullit& of the

'ffidavit of 0elf)'dudication e?ecuted .& "odesta, the three 6 C;s issued to her favor,

as well as the Deed of Renunciation and Luitclaim in favor of @stanislaoa "anuel, was

properl& dismissed .& the trial court( Petitioners, not .eing the real :parties)in)interestX in

the case, had neither the standing nor the cause of action to initiate the complaint(

he Court, however, sees no sufficient reason to sustain the award of amounts for moral and

e?emplar& damages, attorne&;s fees and litigation e?penses( 'n adverse result of a suit inlaw does not mean that its advocac& is necessaril& so wrongful as to ustif& an assessment of

damages against the actor(

7HERE8ORE, the appealed decision of the Regional rial Court of Pangasinan 6Branch

7 is 'AAR"@D, e?cept insofar as it has awarded moral and e?emplar& damages, as well

as attorne&;s fees and litigation e?penses, in favor of private respondents, which portion is

here.& D@I@@D( o special pronouncement on costs(

0< <RD@R@D(

*(R( o( 574( %une 17, 19-7!

'0@I"' D'U, guardian of +C<R, R<DR*<, '0@I"' and "*G@I, all

surnamed 0'@R<, petitioners, and A@IMB@R' P'CGR0', guardian of A@D@RC<

0'@R<, et al(, vs( @R"@D'@ 'PP@II'@ C<GR and A@I0' P'"G

%'RD, respondents(



D @ C 0 <

P'R'0, ./

Private respondent filed a Petition dated %anuar& #, 197 with the Court of Airst nstance of

Cavite in 0p( Proc( Case o( B)#1, :n he "atter of the ntestate @state of the late 0imona

Pamuti +da( de 0antero:, pra&ing among other things, that the corresponding letters of 'dministration .e issued in her favor and that she .e appointed as special administratri? of

the properties of the deceased 0imona Pamuti +da( de 0antero(

t is undisputed/ 1 that Aelisa Pamuti %ardin is a niece of 0imona Pamuti +da( de 0antero

who together with Aelisa;s mother %uliana were the onl& legitimate children of the spouses

Aelipe Pamuti and Petronila 'suncion= # that %uliana married 0imon %ardin and out of their

union were .orn Aelisa Pamuti and another child who died during infanc&= that 0imona

Pamuti +da( de 0antero is the widow of Pascual 0antero and the mother of Pa.lo 0antero= 4

that Pa.lo 0antero was the onl& legitimate son of his parents Pascual 0antero and 0imona

Pamuti +da( de 0antero= 5 that Pascual 0antero died in 197$= Pa.lo 0antero in 197 and 0i)

mona 0antero in 197; that Pa.lo 0antero, at the time of his death was survived .& his

mother 0imona 0antero and his si? minor natural children to wit/ four minor children with

'nselma Dia3 and two minor children with Aeli?.erta Pacursa(

%udge %ose Raval in his <rders dated Decem.er 1, 197 and Decem.er 9, 197 declared

Aelisa Pamuti %ardin as the sole legitimate heir of 0imona Pamuti +da( de 0antero(

Before the trial court, there were 4 interrelated cases filed to wit/

:a 0p( Proc( o( B)4 ) is the Petition for for the Ietters of 'dministration of the ntestate @state

of Pa.lo 0antero=:. 0p( Proc( o( B)5 ) is the Petition for the Ietters of 'dministration of the ntestate @state of

Pascual 0antero=

:c 0p( Proc( o( B)7 ) is the Petition for *uardianship over the properties of an ncompetent

Person, 0imona Pamuti +da( de 0antero=

:e 0p( Proc( o( B)#1 ) is the Petition for 0ettlement of the ntestate @state of 0imona Pamuti

+da( de 0antero(:

Aelisa %ardin upon her "otion to ntervene in 0p( Proceedings os( B)4 and B)5, was

allowed to intervene in the intestate estates of Pa.lo 0antero and Pascual 0antero .& <rder of

the Court dated 'ugust #4, 1977(Petitioner 'nselma Dia3, as guardian of her minor children, filed her :<pposition and

"otion to @?clude Aelisa Pamuti)%ardin dated "arch 1, 19-$, from further taEing part or

intervening in the settlement of the intestate estate of 0imona Pamuti +da( de 0antero, as

well as in the intestate estates of Pascual 0antero and Pa.lo 0antero(

Aeli?.erta Pacursa guardian for her minor children, filed thru counsel, her "anifestation of

"arch 14, 19-$ adopting the <pposition and "otion to @?clude Aelisa Pamuti, filed .&

'nselma Dia3(

<n "a& #$, 19-$, %udge ldefonso "( Ble3a issued an order e?cluding Aelisa %ardin :from

further taEing part or intervening in the settlement of the intestate estate of 0imona Pamuti

+da( de 0antero, as well as in the intestate estates of Pascual 0antero and Pa.lo 0antero and

declared her to .e, not an heir of the deceased 0imona Pamuti +da( de 0antero(:

'fter her "otion for Reconsideration was denied .& the trial court in its order dated

ovem.er 1, 19-$, Aelisa P( %ardin filed her appeal to the ntermediate 'ppellate Court in



C')*(R( o( 9-14)R( ' decision was rendered .& the ntermediate 'ppellate Court on

Decem.er 14, 19- 6reversing the decision of the trial court the dispositive portion of which

reads )

:>8@R@A<R@, finding the <rder appealed from not consistent with the facts and law

applica.le, the same is here.& set aside and another one entered sustaining the <rders of Decem.er 1 and 9, 197 declaring the petitioner as the sole heir of 0imona Pamuti +da( de

0antero and ordering oppositors)appellees not to interfere in the proceeding for the

declaration of heirship in the estate of 0imona Pamuti +da( de 0antero(:

:Costs against the oppositors)appellees(:

he "otion for Reconsideration filed .& oppositors)appellees 6petitioners herein was denied

.& the same respondent court in its order dated Ae.ruar& 17, 19-4 hence, the present petition

for Review with the following/

'00*"@ <A @RR<R0

( he Decision erred in ignoring the right to intestate succession of

petitioners grandchildren 0antero as direct descending line 6'rt( 97- andFor

naturalF:illegitimate children: 6'rt( 9-- and prefering a niece, who is a collateral relative

6'rt( 1$$=

( he Decision erred in den&ing the right of representation of the natural

grandchildren 0antero to represent their father Pa.lo 0antero

in the succession to the intestate

estate of their grandmother 0imona Pamuti +da( de 0antero 6'rt( 9-#=

( he Decision erred in mistaEing the intestate estate of the

grandmother 0imona Pamuti +da( de 0antero as the estate of :legitimate child or relative: of Pa.lo 0antero, her son and father of the petitioners grandchildren 0antero=

+( he Decision erred in ruling that petitioner)appellant Aelisa P( %ardin who is

a niece and therefore a collateral relative of 0imona Pamuti +da( de 0antero e?cludes the

natural children of her son Pa.lo 0antero, who are her

direct descendants andForgrand children=

+( he Decision erred in appl&ing 'rt( 99#, when 'rts( 9--, 9-9 and 99$ are the

applica.le provisions of law

onintestate succession= and

+( he Decision erred in considering the orders of Decem.er 1 and Decem.er 9,

197 which are provisional and interlocutor& as final and e?ecutor&(he real issue in this case ma& .e .riefl& stated as follows) who are the legal heirs of 0imona

Pamuti +da( de 0antero) her niece Aelisa Pamuti %ardin or her grandchildren 6the natural

children of Pa.lo 0anteroH

he dispute at .ar refers onl& to the intestate estate of 0imona Pamuti +da( de 0antero and

the issue here is whether oppositors)appellees 6petitioners herein as illegitimate children of

Pa.lo 0antero could inherit from 0imona Pamuti +da( de 0antero, .& right of representation

of their father Pa.lo 0antero who is a legitimate child of 0imona Pamuti +da( de 0antero(

ow then what is the appropriate law on the matterH Petitioners contend in their pleadings

that 'rt( 99$ of the ew Civil Code is the applica.le law on the case( he& contend that said

provision of the ew Civil Code modifies the rule in 'rticle 941 6<ld Civil Code and

recogni3es the right of representation 6'rt( 97$ to descendants, whether legitimate or

illegitimate and that 'rt( 941, 0panish Civil Code denied illegitimate children the right to

represent their deceased parents and inherit from their deceased grandparents, .ut that Rule



was e?pressl& changed andFor amended .& 'rt( 99$ ew Civil Code which e?pressl& grants

the illegitimate children the right to represent their deceased father 6Pa.lo 0antero in the

estate of their grandmother, 60imona Pamuti:

Petitioners; contention holds no water( 0ince the hereditar& conflict refers solel& to the

intestate estate of 0imona Pamuti +da( de 0antero, who is the legitimate mother of Pa.lo0antero, the applica.le law is the provision of 'rt( 99# of the Civil Code which reads as

follows/

'R( 99#( 'n illegitimate child has no right to inherit a. intestato from the legitimate

children and relatives of his father or mother= nor shall such children or relatives inherit in

the same manner from the illegitimate child( 694a

Pa.lo 0antero is a legitimate child, he is not an illegitimate child( <n the other hand, the

oppositors 6petitioners herein are the illegitimate children of Pa.lo 0antero(

'rticle 99# of the ew Civil Code provides a .arrier or iron curtain in that it

prohi.its a.solutel& a succession a. intestato .etween the illegitimate child and the

legitimate children and relatives of the father or mother of said legitimate child( he& ma&

have a natural tie of .lood, .ut this is not recogni3ed .& law for the purposes of 'rt( 99#(

Between the legitimate famil& and the illegitimate famil& there is presumed to .e an

intervening antagonism and incompati.ilit&( he illegitimate child is disgracefull& looEed

down upon .& the legitimate famil&= the famil& is in turn, hated .& the illegitimate child= the

latter considers the privileged condition of the former, and the resources of which it is

there.& deprived= the former, in turn, sees in the illegitimate child nothing .ut the product of

sin, palpa.le evidence of a .lemish .roEen in life= the law does no more than recogni3e thistruth, .& avoiding further grounds of resentment(

hus, petitioners herein cannot represent their father Pa.lo 0antero in the succession of the

latter to the intestate estate of his legitimate mother 0imona Pamuti +da( de 0antero, .ecause

of the .arrier provided for under 'rt( 99# of the ew Civil Code(

n answer to the erroneous contention of petitioners that 'rticle 941 of the 0panish Civil

Code is changed .& 'rticle 99$ of the ew Civil Code, >e are reproducing herewith the

Reflections of the illustrious 8on( %ustice %ose B(I( Re&es which also finds full support from

other civilists, to wit/

:n the 0panish Civil Code of 1--9 the right of representation was admitted onl& within thelegitimate famil&= so much so that 'rticle 94 of that Code prescri.ed that an illegitimate

child can not inherit a. intestato from the legitimate children and relatives of his father and

mother( he Civil Code of the Philippines apparentl& adhered to this principle since it

reproduced 'rticle 94 of the 0panish Code in its own 'rt( 99#, .ut with fine inconsistenc&,

in su.se2uent articles 699$, 995 and 99- our Code allows the hereditar& portion of the

illegitimate child to pass to his own descendants, whether legitimate or illegitimate( 0o that

while 'rt( 99# prevents the illegitimate issue of a legitimate child from representing him

in the intestate succession of the grandparent, the illegitimates of an illegitimate child can

now do so( his difference .eing indefensi.le and unwarranted, in the future revision of the

Civil Code we shall have to maEe a choice and decide either that the illegitimate issue eno&s

in all cases the right of representation, in which case 'rt( 99# must .e suppressed= or

contrariwise maintain said article and modif& 'rticles 995 and 99-( he first solution would

.e more in accord with an enlightened attitude vis)a)vis illegitimate children( 6Reflections



on the Reform of 8ereditar&

succession, %<GR'I of the ntegrated Bar of the Philippines,

Airst Luater, 197, +olume 4, um.er 1, pp( 4$)41(

t is therefore clear from 'rticle 99# of the ew Civil Code that the phrase :legitimate

children and relatives of his father or mother: includes 0imona Pamuti +da( de 0antero as

the word :relative: includes all the Eindred of the person spoEen of( he record shows thatfrom the commencement of this case the onl& parties who claimed to .e the legitimate heirs

of the late 0imona Pamuti +da( de 0antero are Aelisa Pamuti %ardin and the si? minor natural

or illegitimate children of Pa.lo 0antero( 0ince petitioners herein are .arred .& the

provisions of 'rticle 99#, the respondent ntermediate 'ppellate Court did not commit an&

error in holding Aelisa Pamuti)%ardin to .e the sole legitimate heir to the intestate estate of

the late 0imona Pamuti +da( de 0antero(

Iastl&, petitioners claim that the respondent ntermediate 'ppellate Court erred in ruling that

the <rders of the Court a 2uo dated Decem.er 1, 197 and Decem.er 9, 197 are final and

e?ecutor&( 0uch contention is without merit( he 8on( %udge %ose Raval in his order dated

Decem.er 1, 197 held that the oppositors 6petitioners herein are not entitled to intervene

and hence not allowed to intervene in the proceedings for the declaration of the heirship in

the intestate estate of 0imona Pamuti +da( de 0antero( 0u.se2uentl&, %udge %ose Raval

issued an <rder, dated Decem.er 9, 197, which declared Aelisa Pamuti)%ardin to .e the sole

legitimate heir of 0imona Pamuti( he said <rders were never made the su.ects of either a

motion for reconsideration or a perfected appeal( 8ence, said orders which long .ecame

final and e?ecutor& are alread& removed from the power of urisdiction of the lower court to

decide anew( he onl& power retained .& the lower court, after a udgment has .ecome finaland e?ecutor& is to order its e?ecution( he respondent Court did not err therefore in ruling

that the <rder of the Court a 2uo dated "a& $, 19-$ e?cluding Aelisa Pamuti)%ardin as

intestate heir of the deceased 0imona Pamuti +da( de 0antero :is clearl& a total reversal of an

<rder which has .ecome final and e?ecutor&, hence null and void(:

7HERE8ORE, this petition is here.& D0"00@D, and the assailed decision is here.&

'AAR"@D(

0< <RD@R@D(

ALONZO Q. ANCHETA, G.R. No. 139868

Petitioner,

Present:

PANGANIBAN,C.J.(Chairperson)

- versus - ∗YNARES-SANTIAGO,

AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO,JJ.

CANDELARIA GUERSEY-

DALAYGON, Promulgated:

Respondent. June 8, 2006

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D E C I S I O N

AUSTRIA-MARTINEZ,J.:

Spouses Audrey O’Neill (Audrey) and W. Richard Guersey (Richard) were

American citizens who have resided in the Philippines for 30 years. They have an

adopted daughter, Kyle Guersey Hill (Kyle). On July 29, 1979, Audrey died, leaving

a will. In it, she bequeathed her entire estate to Richard, who was also designated

as executor. The will was admitted to probate before the Orphan’s Court ofBaltimore, Maryland, U.S.A, which named James N. Phillips as executor due to

Richard’s renunciation of his appointment. The court also named Atty. Alonzo

Q. Ancheta (petitioner) of the Quasha Asperilla Ancheta Pena & Nolasco Law

Offices as ancillary administrator.

In 1981, Richard married Candelaria Guersey-Dalaygon (respondent) with

whom he has two children, namely, Kimberly and Kevin.

On October 12, 1982, Audrey’s will was also admitted to probate by the then

Court of First Instance of Rizal, Branch 25, Seventh Judicial District, Pasig, in

Special Proceeding No. 9625. As administrator of Audrey’s estate in the Philippines,

petitioner filed an inventory and appraisal of the following properties: (1) Audrey’s

conjugal share in real estate with improvements located at 28 Pili Avenue, Forbes

Park, Makati, Metro Manila, valued at P764,865.00 (Makati property); (2) a current

account in Audrey’s name with a cash balance of P12,417.97; and (3) 64,444 shares

of stock in A/G Interiors, Inc. worth P64,444.00.

On July 20, 1984, Richard died, leaving a will, wherein he bequeathed his entire

estate to respondent, save for his rights and interests over the A/G Interiors, Inc.

shares, which he left to Kyle. The will was also admitted to probate by the Orphan’s

Court of Ann Arundel, Maryland, U.S.A, and James N. Phillips was likewise

appointed as executor, who in turn, designated Atty. William Quasha or any member

of the Quasha Asperilla Ancheta Pena & Nolasco Law Offices, as ancillary

administrator.

Richard’s will was then submitted for probate before the Regional Trial Court of

Makati, Branch 138, docketed as Special Proceeding No. M-888. Atty. Quasha was

appointed as ancillary administrator on July 24, 1986.



On October 19, 1987, petitioner filed in Special Proceeding No. 9625, a

motion to declare Richard and Kyle as heirs of Audrey. Petitioner also filed on

October 23, 1987, a project of partition of Audrey’s estate, with Richard being

apportioned the ¾ undivided interest in the Makati property, 48.333 shares in A/G

Interiors, Inc., and P9,313.48 from the Citibank current account; and Kyle, the ¼undivided interest in the Makati property, 16,111 shares in A/G Interiors, Inc.,

and P3,104.49 in cash.

The motion and project of partition was granted and approved by the trial court

in its Order dated February 12, 1988. The trial court also issued an Order on April 7,

1988, directing the Register of Deeds of Makati to cancel TCT No. 69792 in the

name of Richard and to issue a new title in the joint names of the Estate of W.

Richard Guersey (¾ undivided interest) and Kyle (¼ undivided interest); directing the

Secretary of A/G Interiors, Inc. to transfer 48.333 shares to the Estate of W.

Richard Guersey and 16.111 shares to Kyle; and directing the Citibank to release the

amount of P12,417.97 to the ancillary administrator for distribution to the heirs.

Consequently, the Register of Deeds of Makati issued on June 23, 1988, TCT

No. 155823 in the names of the Estate of W. Richard Guersey and Kyle.

Meanwhile, the ancillary administrator in Special Proceeding No. M-888 also

filed a project of partition wherein2

/5 of Richard’s ¾ undivided interest in the Makatiproperty was allocated to respondent, while3 /5 thereof were allocated to Richard’s

three children. This was opposed by respondent on the ground that under the law of

the State of Maryland, “a legacy passes to the legatee the entire interest of the

testator in the property subject of the legacy.” Since Richard left his entire estate

to respondent, except for his rights and interests over the A/G Interiors, Inc, shares,

then his entire ¾ undivided interest in the Makati property should be given to

respondent.

The trial court found merit in respondent’s opposition, and in its Order dated

December 6, 1991, disapproved the project of partition insofar as it affects the

Makati property. The trial court also adjudicated Richard’s entire ¾ undivided

interest in the Makati property to respondent.

On October 20, 1993, respondent filed with the Court of Appeals (CA) an

amended complaint for the annulment of the trial court’s Orders dated February 12,

1988 and April 7, 1988, issued in Special Proceeding No. 9625. Respondent

contended that petitioner willfully breached his fiduciary duty when he disregardedthe laws of the State of Maryland on the distribution of Audrey’s estate in accordance

with her will. Respondent argued that since Audrey devised her entire estate to

Richard, then the Makati property should be wholly adjudicated to him, and not

merely ¾ thereof, and since Richard left his entire estate, except for his rights and



interests over the A/G Interiors, Inc., to respondent, then the entire Makati property

should now pertain to respondent.

Petitioner filed his Answer denying respondent’s allegations. Petitioner

contended that he acted in good faith in submitting the project of partition before thetrial court in Special Proceeding No. 9625, as he had no knowledge of the State of

Maryland’s laws on testate and intestate succession. Petitioner alleged that he

believed that it is to the “best interests of the surviving children that Philippine law be

applied as they would receive their just shares.” Petitioner also alleged that the

orders sought to be annulled are already final and executory, and cannot be set

aside.

On March 18, 1999, the CA rendered the assailed Decision annulling the trial

court’s Orders dated February 12, 1988 and April 7, 1988, in Special Proceeding No.

9625. The dispositive portion of the assailed Decision provides:

WHEREFORE, the assailed Orders of February 12, 1998 and April 7, 1988

are hereby ANNULLED and, in lieu thereof, a new one is entered ordering:

(a) The adjudication of the entire estate of Audrey O’Neill Guersey in favor of

the estate of W. Richard Guersey; and

(b) The cancellation of Transfer Certificate of Title No. 15583 of the Makati

City Registry and the issuance of a new title in the name of the estate of W. Richard

Guersey.

SO ORDERED.

Petitioner filed a motion for reconsideration, but this was denied by the CA per

Resolution dated August 27, 1999.

Hence, the herein petition for review oncertiorari under Rule 45 of the Rules

of Court alleging that the CA gravely erred in not holding that:

A) THE ORDERS OF 12 FEBRUARY 1988 AND 07 APRIL 1988 IN SPECIAL

PROCEEDINGS NO. 9625 “IN THE MATTER OF THE PETITION FOR PROBATE

OF THE WILL OF THE DECEASED AUDREY GUERSEY, ALONZO Q. ANCHETA,

ANCILLARY ADMINISTRATOR”, ARE VALID AND BINDING AND HAVE LONG

BECOME FINAL AND HAVE BEEN FULLY IMPLEMENTED AND EXECUTED ANDCAN NO LONGER BE ANNULLED.

B) THE ANCILLARY ADMINISTRATOR HAVING ACTED IN GOOD FAITH, DID

NOT COMMIT FRAUD, EITHER EXTRINSIC OR INTRINSIC, IN THE

PERFORMANCE OF HIS DUTIES AS ANCILLARY ADMINISTRATOR OF AUDREY



O’NEIL GUERSEY’S ESTATE IN THE PHILIPPINES, AND THAT NO FRAUD,

EITHER EXTRINSIC OR INTRINSIC, WAS EMPLOYED BY [HIM] IN PROCURING

SAID ORDERS.

Petitioner reiterates his arguments before the CA that the Ordersdated February 12, 1988 and April 7, 1988 can no longer be annulled

because it is a final judgment, which is “conclusive upon the administration

as to all matters involved in such judgment or order, and will determine for

all time and in all courts, as far as the parties to the proceedings are

concerned, all matters therein determined,” and the same has already been

executed.

Petitioner also contends that that he acted in good faith in performing

his duties as an ancillary administrator. He maintains that at the time of the

filing of the project of partition, he was not aware of the relevant laws of the

State of Maryland, such that the partition was made in accordance with

Philippine laws. Petitioner also imputes knowledge on the part of

respondent with regard to the terms of Aubrey’s will, stating that as early as

1984, he already apprised respondent of the contents of the will and how

the estate will be divided.

Respondent argues that petitioner’s breach of his fiduciary duty as

ancillary administrator of Aubrey’s estate amounted to extrinsic fraud.

According to respondent, petitioner was duty-bound to follow the express

terms of Aubrey’s will, and his denial of knowledge of the laws of Maryland

cannot stand because petitioner is a senior partner in a prestigious law firm

and it was his duty to know the relevant laws.

Respondent also states that she was not able to file any opposition to the

project of partition because she was not a party thereto and she learned of the

provision of Aubrey’s will bequeathing entirely her estate to Richard only after Atty.

Ancheta filed a project of partition in Special Proceeding No. M-888 for the

settlement of Richard’s estate.

A decree of distribution of the estate of a deceased person vests the title to

the land of the estate in the distributees, which, if erroneous may be corrected by a

timely appeal. Once it becomes final, its binding effect is like any other judgmentin

rem. However, in exceptional cases, a final decree of distribution of the estate may

be set aside for lack of jurisdiction or fraud. Further, inRamon v. Ortuzar, the Court

ruled that a party interested in a probate proceeding may have a final liquidation set



aside when he is left out by reason of circumstances beyond his control or through

mistake or inadvertence not imputable to negligence.

The petition for annulment was filed before the CA on October 20, 1993,

before the issuance of the 1997 Rules of Civil Procedure; hence, the applicable lawisBatas Pambansa Blg. 129 (B.P. 129) or the Judiciary Reorganization Act of 1980.

An annulment of judgment filed under B.P. 129 may be based on the ground that a

judgment is void for want of jurisdiction or that the judgment was obtained by

extrinsic fraud. For fraud to become a basis for annulment of judgment, it has to be

extrinsic or actual, and must be brought within four years from the discovery of the

fraud.

In the present case, respondent alleged extrinsic fraud as basis for the

annulment of the RTC Orders dated February 12, 1988 and April 7, 1988. The CA

found merit in respondent’s cause and found that petitioner’s failure to follow the

terms of Audrey’s will, despite the latter’s declaration of good faith, amounted to

extrinsic fraud. The CA ruled that under Article 16 of the Civil Code, it is the national

law of the decedent that is applicable, hence, petitioner should have distributed

Aubrey’s estate in accordance with the terms of her will. The CA also found that

petitioner was prompted to distribute Audrey’s estate in accordance with Philippine

laws in order to equally benefit Audrey and Richard Guersey’s adopted daughter,

Kyle Guersey Hill.

Petitioner contends that respondent’s cause of action had already prescribed

because as early as 1984, respondent was already well aware of the terms of

Audrey’s will, and the complaint was filed only in 1993. Respondent, on the other

hand, justified her lack of immediate action by saying that she had no opportunity to

question petitioner’s acts since she was not a party to Special Proceeding No. 9625,

and it was only after Atty. Anchetafiled the project of partition in Special Proceeding

No. M-888, reducing her inheritance in the estate of Richard that she was prompted

to seek another counsel to protect her interest.

It should be pointed out that the prescriptive period for annulment of judgment

based on extrinsic fraud commences to run from thediscovery of the fraud or

fraudulent act/s. Respondent’s knowledge of the terms of Audrey’s will is

immaterial in this case since it is not the fraud complained of. Rather, it is petitioner’s

failure to introduce in evidence the pertinent law of the State of Maryland that is the

fraudulent act, or in this case, omission, alleged to have been committed against

respondent, and therefore, the four-year period should be counted from the time ofrespondent’s discovery thereof.

Records bear the fact that the filing of the project of partition of Richard’s

estate, the opposition thereto, and the order of the trial court disallowing the project

of partition in Special Proceeding No. M-888 were all done in 1991. Respondent



cannot be faulted for letting the assailed orders to lapse into finality since it was only

through Special Proceeding No. M-888 that she came to comprehend the

ramifications of petitioner’s acts. Obviously, respondent had no other recourse

under the circumstances but to file the annulment case. Since the action for

annulment was filed in 1993, clearly, the same has not yet prescribed.

Fraud takes on different shapes and faces. InCosmic Lumber Corporation v.

Court of Appeals, the Court stated that “man in his ingenuity and fertile imagination

will always contrive new schemes to fool the unwary.”

There is extrinsic fraud within the meaning of Sec. 9 par. (2), of B.P. Blg. 129,

where it is one the effect of which prevents a party from hearing a trial, or real

contest, or from presenting all of his case to the court, or where it operates upon

matters, not pertaining to the judgment itself, but to the manner in which it was

procured so that there is not a fair submission of the controversy. In other words,

extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation

which is committed outside of the trial of the case, whereby the defeated party has

been prevented from exhibiting fully his side of the case by fraud or deception

practiced on him by his opponent. Fraud is extrinsic where the unsuccessful party

has been prevented from exhibiting fully his case, by fraud or deception practiced on

him by his opponent, as by keeping him away from court, a false promise of a

compromise; or where the defendant never had any knowledge of the suit, beingkept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or

without authority connives at his defeat; these and similar cases which show that

there has never been a real contest in the trial or hearing of the case are reasons for

which a new suit may be sustained to set aside and annul the former judgment and

open the case for a new and fair hearing.

The overriding consideration when extrinsic fraud is alleged is that the

fraudulent scheme of the prevailing litigant prevented a party from having his day in

court.

Petitioner is the ancillary administrator of Audrey’s estate. As such, he

occupies a position of the highest trust and confidence, and he is required to

exercise reasonable diligence and act in entire good faith in the performance of that

trust. Although he is not a guarantor or insurer of the safety of the estate nor is he

expected to be infallible, yet the same degree of prudence, care and judgment which

a person of a fair average capacity and ability exercises in similar transactions of his

own, serves as the standard by which his conduct is to be judged.

Petitioner’s failure to proficiently manage the distribution of Audrey’s estate

according to the terms of her will and as dictated by the applicable law amounted to

extrinsic fraud. Hence the CA Decision annulling the RTC Orders dated February

12, 1988 and April 7, 1988, must be upheld.



It is undisputed that Audrey Guersey was an American citizen domiciled in

Maryland, U.S.A. During the reprobate of her will in Special Proceeding No. 9625, it

was shown, among others, that at the time of Audrey’s death, she was residing in the

Philippines but is domiciled in Maryland, U.S.A.; her Last Will and Testament datedAugust 18, 1972 was executed and probated before the Orphan’s Court in Baltimore,

Maryland, U.S.A., which was duly authenticated and certified by the Register of Wills

of Baltimore City and attested by the Chief Judge of said court; the will was admitted

by the Orphan’s Court of Baltimore City on September 7, 1979; and the will was

authenticated by the Secretary of State of Maryland and the Vice Consul of the

Philippine Embassy.

Being a foreign national, the intrinsic validity of Audrey’s will, especially with

regard as to who are her heirs, is governed by her national law,i.e., the law of the

State of Maryland, as provided in Article 16 of the Civil Code, to wit:

Art. 16. Real property as well as personal property is subject to the law of the

country where it is situated.

However, intestate and testamentary succession, both with respect to

theorder of succession and to the amount of successional rights and to the

intrinsic validity of testamentary provisions, shall be regulated by the nationallaw of the

person

whose succession is under consideration, whatever may be

the nature of the property and regardless of the country wherein said property

may be found. (Emphasis supplied)

Article 1039 of the Civil Code further provides that “capacity to succeed is

governed by the law of the nation of the decedent.”

As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of

Will Proved Outside the Philippines and Administration of Estate Thereunder, states:

SEC.4. Estate, how administered.—When a will is thus allowed, the court

shall grant letters testamentary, or letters of administration with the will annexed, and

such letters testamentary or of administration, shall extend to all the estate of the

testator in the Philippines.Such estate, after the payment of just debts and

expenses of administration, shall be disposed of according to such will, so far

as such will may operate upon it; and the residue, if any, shall be disposed of as is

provided by law in cases of estates in the Philippines belonging to persons who areinhabitants of another state or country. (Emphasis supplied)

While foreign laws do not prove themselves in our jurisdiction and our courts

are not authorized to take judicial notice of them; however, petitioner, as ancillary



administrator of Audrey’s estate, was duty-bound to introduce in evidence the

pertinent law of the State of Maryland.

Petitioner admitted that he failed to introduce in evidence the law of the State

of Maryland on Estates and Trusts, and merely relied on the presumption that suchlaw is the same as the Philippine law on wills and succession. Thus, the trial court

peremptorily applied Philippine laws and totally disregarded the terms of Audrey’s

will. The obvious result was that there was no fair submission of the case before the

trial court or a judicious appreciation of the evidence presented.

Petitioner insists that his application of Philippine laws was made in good

faith. The Court cannot accept petitioner’s protestation. How can petitioner honestly

presume that Philippine laws apply when as early as the reprobate of Audrey’s will

before the trial court in 1982, it was already brought to fore that Audrey was a U.S.

citizen, domiciled in the State of Maryland. As asserted by respondent, petitioner is

a senior partner in a prestigious law firm, with a “big legal staff and a large library.”

He had all the legal resources to determine the applicable law. It was incumbent

upon him to exercise his functions as ancillary administrator with reasonable

diligence, and to discharge the trust reposed on him faithfully. Unfortunately,

petitioner failed to perform his fiduciary duties.

Moreover, whether his omission was intentional or not, the fact remains thatthe trial court failed to consider said law when it issued the assailed RTC Orders

dated February 12, 1988 and April 7, 1988, declaring Richard and Kyle as Audrey’s

heirs, and distributing Audrey’s estate according to the project of partition submitted

by petitioner. This eventually prejudiced respondent and deprived her of her

full successional right to the Makati property.

InGSIS v. Bengson Commercial Bldgs., Inc., the Court held that when the

rule that the negligence or mistake of counsel binds the client deserts its proper

office as an aid to justice and becomes a great hindrance and chief enemy, its rigors

must be relaxed to admit exceptions thereto and to prevent a miscarriage of justice,

and the court has the power to except a particular case from the operation of the rule

whenever the purposes of justice require it.

The CA aptly noted that petitioner was remiss in his responsibilities as

ancillary administrator of Audrey’s estate. The CA likewise observed that the

distribution made by petitioner was prompted by his concern over Kyle, whom

petitioner believed should equally benefit from the Makati property. The CA correctlystated, which the Court adopts, thus:

In claiming good faith in the performance of his duties and responsibilities,

defendant Alonzo H. Anchetainvokes the principle which presumes the law of the

forum to be the same as the foreign law (Beam vs. Yatco,82 Phil. 30, 38) in the



absence of evidence adduced to prove the latter law (Slade Perkins vs. Perkins,57

Phil. 205, 210). In defending his actions in the light of the foregoing principle,

however, it appears that the defendant lost sight of the fact that his primary

responsibility as ancillary administrator was to distribute the subject estate in

accordance with the will of Audrey O’Neill Guersey. Considering the principleestablished under Article 16 of the Civil Code of the Philippines, as well as the

citizenship and the avowed domicile of the decedent, it goes without saying that the

defendant was also duty-bound to prove the pertinent laws of Maryland on the

matter.

The record reveals, however, that no clear effort was made to prove the

national law of Audrey O’Neill Guerseyduring the proceedings before the courta

quo. While there is claim of good faith in distributing the subject estate in

accordance with the Philippine laws, the defendant appears to put his actuations in a

different light as indicated in a portion of his direct examination, to wit:

x x x

It would seem, therefore, that the eventual distribution of the estate of Audrey

O’Neill Guersey was prompted by defendant Alonzo H. Ancheta’s concern that the

subject realty equally benefit the plaintiff’s adopted daughter KyleGuersey.

Well-intentioned though it may be, defendant Alonzo H. Ancheta’s actionappears to have breached his duties and responsibilities as ancillary administrator of

the subject estate.While such breach of duty admittedly cannot be consideredextrinsic fraud under ordinary circumstances, the fiduciary nature of the said

defendant’s position, as well as the resultant frustration of the decedent’s last

will, combine to create a circumstance that is tantamount to extrinsic fraud.

Defendant Alonzo H. Ancheta’s omission to prove the national laws of the decedent

and to follow the latter’s last will, in sum, resulted in the procurement of the subject

orders without a fair submission of the real issues involved in the case. (Emphasis

supplied)

This is not a simple case of error of judgment or grave abuse of discretion, but

a total disregard of the law as a result of petitioner’s abject failure to discharge his

fiduciary duties. It does not rest upon petitioner’s pleasure as to which law should

be made applicable under the circumstances. Hisonus is clear. Respondent was

thus excluded from enjoying full rights to the Makati property through no fault or

negligence of her own, as petitioner’s omission was beyond her control. She was in

no position to analyze the legal implications of petitioner’s omission and it wasbelatedly that she realized the adverse consequence of the same. The end result

was a miscarriage of justice. In cases like this, the courts have the legal and moral

duty to provide judicial aid to parties who are deprived of their rights.



The trial court in its Order dated December 6, 1991 in Special Proceeding No.

M-888 noted the law of the State of Maryland on Estates and Trusts, as follows:

Under Section 1-301, Title 3, Sub-Title 3 of the Annotated Code of the Public

General Laws of Maryland on Estates and Trusts, “all property of a decedent shallbe subject to the estate of decedents law, and upon his death shall pass directly to

the personal representative, who shall hold the legal title for administration and

distribution,” while Section 4-408 expressly provides that “unless a contrary intent is

expressly indicated in the will, a legacy passes to the legatee the entire interest of

the testator in the property which is the subject of the legacy”. Section 7-101, Title 7,

Sub-Title 1, on the other hand, declares that “a personal representative is a

fiduciary” and as such he is “under the general duty to settle and distribute the estate

of the decedent in accordance with the terms of the will and the estate of decedents

law as expeditiously and with as little sacrifice of value as is reasonable under the

circumstances”.

In her will, Audrey devised to Richard her entire estate, consisting of the

following: (1) Audrey’s conjugal share in the Makati property; (2) the cash amount

of P12,417.97; and (3) 64,444 shares of stock in A/G Interiors, Inc.

worthP64,444.00. All these properties passed on to Richard upon Audrey’s death.

Meanwhile, Richard, in his will, bequeathed his entire estate to respondent, except

for his rights and interests over the A/G Interiors, Inc. shares, which he left to Kyle.When Richard subsequently died, the entire Makati property should have then

passed on to respondent. This, of course, assumes the proposition that the law of

the State of Maryland which allows “a legacy to pass to the legatee the entire estate

of the testator in the property which is the subject of the legacy,” was sufficiently

proven in Special Proceeding No. 9625. Nevertheless, the Court may take judicial

notice thereof in view of the ruling inBohanan v. Bohanan. Therein, the Court took

judicial notice of the law of Nevada despite failure to prove the same. The Court

held, viz.:

We have, however, consulted the records of the case in the court below and

we have found that during the hearing on October 4, 1954 of the motion of

Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law,

especially Section 9905, Compiled Nevada Laws, was introduced in evidence by

appellants' (herein) counsel as Exhibit "2" (See pp. 77-79, Vol. II, and t.s.n. pp. 24-

44, Records, Court of First Instance). Again said law was presented by the counsel

for the executor and admitted by the Court as Exhibit "B" during the hearing of the

case on January 23, 1950 before Judge Rafael Amparo (see Records, Court of FirstInstance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the

above-quoted provision of the laws of the State of Nevada. Under all the above

circumstances, we are constrained to hold that the pertinent law of Nevada,



especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial

notice of by us, without proof of such law having been offered at the hearing of the

project of partition.

In this case, given that the pertinent law of the State of Maryland has beenbrought to record before the CA, and the trial court in Special Proceeding No. M-888

appropriately took note of the same in disapproving the proposed project of partition

of Richard’s estate, not to mention that petitioner or any other interested person for

that matter, does not dispute the existence or validity of said law, then Audrey’s and

Richard’s estate should be distributed according to their respective wills, and not

according to the project of partition submitted by petitioner. Consequently, the entire

Makati property belongs to respondent.

Decades ago, Justice Moreland, in his dissenting opinion inSantos v.

Manarang, wrote:

A will is the testator speaking after death. Its provisions have substantially the

same force and effect in the probate court as if the testator stood before the court in

full life making the declarations by word of mouth as they appear in the will. That was

the special purpose of the law in the creation of the instrument known as the last will

and testament. Men wished to speak after they were dead and the law, by the

creation of that instrument, permitted them to do so x x x All doubts must beresolved in favor of the testator's having meant just what he said.

Honorable as it seems, petitioner’s motive in equitably distributing Audrey’s

estate cannot prevail over Audrey’s and Richard’s wishes. As stated inBellis v.

Bellis:

x x x whatever public policy or good customs may be involved in our system of

legitimes, Congress has not intended to extend the same to the succession of

foreign nationals. For it has specifically chosen to leave, inter alia, the amount of

successional rights, to the decedent's national Law. Specific provisions must prevail

over general ones.

Before concluding, the Court notes the fact that Audrey and Richard Guersey were

American citizens who owned real property in the Philippines, although records do

not show when and how the Guerseys acquired the Makati property.

Under Article XIII, Sections 1 and 4 of the 1935 Constitution, the privilege to acquireand exploit lands of the public domain, and other natural resources of the

Philippines, and to operate public utilities, were reserved to Filipinos and entities

owned or controlled by them. InRepublic v. Quasha, the Court clarified that the

Parity Rights Amendment of 1946, which re-opened to American citizens and

business enterprises the right in the acquisition of lands of the public domain, the



disposition, exploitation, development and utilization of natural resources of the

Philippines, does not include the acquisition or exploitation of private agricultural

lands. The prohibition against acquisition of private lands by aliens was carried on to

the 1973 Constitution under Article XIV, Section 14, with the exception of private

lands acquired by hereditary succession and when the transfer was made to aformer natural-born citizen, as provided in Section 15, Article XIV. As it now stands,

Article XII, Sections 7 and 8 of the 1986 Constitution explicitly prohibits non-Filipinos

from acquiring or holding title to private lands or to lands of the public domain,

except only by way of legalsuccession or if the acquisition was made by a former

natural-born citizen.

In any case, the Court has also ruled thatif land is invalidly transferred to an alien

who subsequently becomes a citizen or transfers it to a citizen, the flaw in the

original transaction is considered cured and the title of the transferee is rendered

valid. In this case, since the Makati property had already passed on to respondent

who is a Filipino, then whatever flaw, if any, that attended the acquisition by

the Guerseys of the Makati property is now inconsequential, as the objective of the

constitutional provision to keep our lands in Filipino hands has been achieved.

WHEREFORE, the petition is denied. The Decision dated March 18, 1999

and the Resolution dated August 27, 1999 of the Court of Appeals areAFFIRMED.

Petitioner isADMONISHED to be more circumspect in the performance of his

duties as an official of the court.

No pronouncement as to costs.

SO ORDERED.

[G.R. No. 140975. December 8, 2000]

OFELIA HERNANDO BAGUNU, petitioner, vs.PASTORA PIEDAD,respondent.

D E C I S I O N

VITUG, J.:

On 28 August 1995, herein petitioner Ofelia Hernando Bagunu moved to intervene in

Special Proceedings No. 3652, entitled "In the Matter of the Intestate Proceedings of

the Estate of Augusto H. Piedad," pending before the Regional Trial Court ("RTC"),

Branch 117, of Pasay City. Asserting entitlement to a share of the estate of the late

Augusto H. Piedad, petitioner assailed the finality of the order of the trial court

awarding the entire estate to respondent Pastora Piedad contending that the

proceedings were tainted with procedural infirmities, including an incompletepublication of the notice of hearing, lack of personal notice to the heirs and creditors,

and irregularity in the disbursements of allowances and withdrawals by the

administrator of the estate. The trial court denied the motion, prompting petitioner to

raise her case to the Court of Appeals. Respondent sought the dismissal of the

appeal on the thesis that the issues brought up on appeal only involved pure



questions of law. Finding merit in that argument, the appellate court dismissed the

appeal, citing Section 2(c) of Rule 41 of the 1997 Revised Rules on Civil Procedure

which would require all appeals involving nothing else but questions of law to be

raised before the Supreme Court by petition for review oncertiorariin accordance

with Rule 45 thereof and consistently with Circular 2-90 of the Court.In a well-written resolution, the Court of Appeals belabored the distinctions between

questions of law and questions of fact, thus:

"There is a question of law in a given case when the doubt or difference arises as to

what the law is on a certain state of facts, and there is a question of fact when the

doubt or difference arises as to the truth or the falsehood of alleged facts. There is

question of fact when the query necessarily invites calibration of the whole evidence

considering mainly the credibility of witnesses, existence and relevance of specific

surrounding circumstances, and their relation to each other and to the whole and the

probabilities of the situation."

Justice Eugenio S. Labitoria, speaking for the appellate court, ratiocinated that

whether or not the RTC erred in denying the intervention considering (1) that the

intervenor-appellant had a prima facieinterest over the case, (2) that the jurisdiction

over the person of the proper parties was not acquired in view of the deficient

publication or notice of hearing, and (3) that the proceedings had yet to be closed

and terminated, were issues which did not qualify as "questions of fact" as to place

the appeal within the jurisdiction of the appellate court; thus:

"The issues are evidently pure questions of law because their resolution are basedon facts not in dispute. Admitted are the facts that intervenor-appellant is a collateral

relative within the fifth degree of Augusto H. Piedad; that she is the daughter of the

first cousin of Augusto H. Piedad; that as such, intervenor-appellant seek to inherit

from the estate of Augusto H. Piedad; that the notice of hearing was published for

three consecutive weeks in a newspaper of general circulation; that there was no

order of closure of proceedings that has been issued by the intestate court; and that

the intestate court has already issued an order for the transfer of the remaining

estate of Augusto H. Piedad to petitioner-appellee.

"These facts are undisputed.

"In this case, there is no doubt nor difference that arise as to the truth or falsehood

on alleged facts. The question as to whether intervenor-appellant as a collateral

relative within the fifth civil degree, has legal interest in the intestate proceeding

which would justify her intervention; the question as to whether the publication of

notice of hearing made in this case is defective which would amount to lack of

jurisdiction over the persons of the parties and the question as to whether the

proceedings has already been terminated when the intestate court issued the order

of transfer of the estate of Augusto H. Piedad to petitioner-appellee, in spite theabsence of an order of closure of the intestate court, all call for the application and

interpretation of the proper law. There is doubt as to what law is applicable on a

certain undisputed state of facts.

"The resolution of the issues raised does not require the review of the evidence, nor

the credibility of witnesses presented, nor the existence and relevance of specific



surrounding circumstances. Resolution on the issues may be had even without

going to examination of facts on record."

Still unsatisfied, petitioner contested the resolution of the appellate court in the

instant petition for review oncertiorari.

The Court finds no reversible error in the ruling of the appellate court. But let us setaside the alleged procedural decrepitude and take on the basic substantive issue.

Specifically, can petitioner, a collateral relative of the fifth civil degree, inherit

alongside respondent, a collateral relative of the third civil degree? Elsewise stated,

does the rule of proximity in intestate succession find application among collateral

relatives?

Augusto H. Piedad died without any direct descendants or ascendants. Respondent

is the maternal aunt of the decedent, a third-degree relative of the decedent, while

petitioner is the daughter of a first cousin of the deceased, or a fifth-degree relative

of the decedent.

The various provisions of the Civil Code on succession embody an almost complete

set of law to govern, either by will or by operation of law, the transmission of

property, rights and obligations of a person upon his death. Each article is

construed in congruity with, rather than in isolation of, the system set out by the

Code.

The rule on proximity is a concept that favors the relatives nearest in degree to the

decedent and excludes the more distant ones except when and to the extent that the

right of representation can apply. Thus, Article 962 of the Civil Code provides:"ART. 962. In every inheritance, the relative nearest in degree excludes the

more distant ones, saving the right of representation when it properly takes

place.

"Relatives in the same degree shall inherit in equal shares, subject to the provisions

of article 1006 with respect to relatives of the full and half blood, and of article 987,

paragraph 2, concerning division between the paternal and maternal lines."

By right of representation, a more distant blood relative of a decedent is, by

operation of law, "raised to the same place and degree" of relationship as that of a

closer blood relative of the same decedent. The representative thereby steps into

the shoes of the person he represents and succeeds, not from the latter, but from the

person to whose estate the person represented would have succeeded.

"ART. 970. Representation is a right created by fiction of law, by virtue of

which the representative is raised to the place and the degree of the person

represented, and acquires the rights which the latter would have if he were

living or if he could have inherited."

"ART. 971. The representative is called to the succession by the law and not

by the person represented. The representative does not succeed the personrepresented but the one whom the person represented would have succeeded."

In the direct line, right of representation is proper only in the descending, never in the

ascending, line. In the collateral line, the right of representation may only take place

in favor of the children of brothers or sisters of the decedent when such children

survive with their uncles or aunts.



"ART. 972. The right of representation takes place in the direct

descending line, but never in the ascending.

"In the collateral line, it takes place only in favor of the children of brothers or

sisters, whether they be of the full or half blood."

"ART. 974. Whenever there is succession by representation, the division of theestate shall be made per stirpes, in such manner that the representative or

representatives shall not inherit more than what the person they represent would

inherit, if he were living or could inherit."

"ART. 975. When children of one or more brothers or sisters of the

deceased survive, they shall inherit from the latter by representation, if they

survive with their uncles or aunts. But if they alone survive, they shall inheritin equal portions."

The right of representation does not apply to "other collateral relatives within the fifth

civil degree" (to which group both petitioner and respondent belong) who aresixth in

the order of preference following,firstly, the legitimate children and

descendants,secondly, the legitimate parents and ascendants,thirdly, the

illegitimate children and descendants,fourthly,thesurviving spouse, andfifthly, the

brothers and sisters/nephews and nieces, of the decedent. Among collateral

relatives, except only in the case of nephews and nieces of the decedent concurring

with their uncles or aunts, the rule of proximity, expressed in Article 962,

aforequoted, of the Code, is an absolute rule. In determining the degree of

relationship of the collateral relatives to the decedent, Article 966 of the Civil Codegives direction.

"Article 966. x x x

"In the collateral line, ascent is made to the common ancestor and then descent is

made to the person with whom the computation is to be made. Thus, a person is

two degrees removed from his brother, three from his uncle, who is the brother of his

father, four from his first cousin and so forth."

Accordingly –

Respondent, being a relative within the third civil degree, of the late Augusto H.

Piedad excludes petitioner, a relative of the fifth degree, from succeedingabintestato to the estate of the decedent.

The provisions of Article 1009 and Article 1010 of the Civil Code –

"Article 1009. Should there be neither brothers nor sisters nor children of brothers or

sisters, the other collateral relatives shall succeed to the estate.



"The latter shall succeed without distinction of lines or preference among them by

reason of relationship by the whole blood."

"Article 1010. The right to inheritab intestato shall not extend beyond the fifth

degree of relationship in the collateral line." -

invoked by petitioner do not at all support her cause. The law means only thatamong theother collateral relatives(the sixth in the line of succession), no

preference or distinction shall beobserved "by reason ofrelationship by the whole

blood." In fine, a maternal aunt can inherit alongside a paternal uncle, and a first

cousin of the full blood can inherit equally with a first cousin of the half blood, but an

uncle or an aunt, being a third-degree relative, excludes the cousins of the decedent,

being in the fourth-degree of relationship; the latter, in turn, would

have priority in successionto a fifth-degree relative.

WHEREFORE, the instant Petition is DENIED. No costs.

SO ORDERED.

Melo, (Chairman), Panganiban, and Gonzaga-Reyes, JJ., concur.

Rollo, p. 30.

Rollo, p. 31.

Supreme Court E-Library SearchFIRST DIVISION

*(R( o( 1$997#( 'pril #9, 199!

U<0"' +@RD'D, petitioner , vs( 8@ 8<( C<GR <A 'PP@'I0, 0<C<RR< C(

R<0'I@0, 'GR<R' R<0'I@0, 'P<I@< R<0'I@0, '<< R<0'I@0,AI<R@D' R<0'I@0, @I@' R<0'I@0 'D +R*' R<0'I@0,respondents.

0KII'BG0

1( CIVIL LA7 S!CCESSION RIGHT TO REDEE PROPERT= AS LEGAL HEIR

O8 H!S<AND, PART O8 7HOSE ESTATE IS A SHARE IN HIS OTHERJS

INHERITANCE. he thrust of the petition .efore us is the alleged incapacit& of private

respondent 0ocorro C( Rosales to redeem the propert&, she .eing merel& the spouse of David

Rosales, a son of "acaria, and not .eing a co)heir herself in the intestate estate of "acaria(

0ocorros right to the propert& is not .ecause she rightfull& can claim heirship in "acarias

estate .ut that she is a legal heir of her hus.and, David Rosales, part of whose estate is a

share in his mothers inheritance( David Rosales, incontroverti.l&, survived his mothers

death( >hen "acaria died her estate passed on to her surviving children, among them David

Rosales, who thereupon .ecame co)owners of the propert&( >hen David Rosales himself

later died, his own estate, which included his undivided interest over the propert& inherited

from "acaria, passed on to his widow 0ocorro and her co)heirs pursuant to

the law on succession( 0ocorro and herein private respondents, along with the co)heirs of

David Rosales, thereupon .ecame co-o#ners of the propert& that originall& descended from

"acaria(#( ID. ID. RIGHT O8 REDEPTION 7RITTEN NOTICE O8 SALE,

ANDATOR=. >hen their interest in the propert& was sold .& the Burdeos heirs to

petitioner, a right of redemption arose in favor of private respondents( his right of

redemption was timel& e?ercised .& private respondents( Concededl&, no written notice of

the sale was given .& the Burdeos heirs 6vendors to the co)owners re2uired under 'rticle



1# of the Civil Code( he thirt&)da& period of redemption had &et to commence when

private respondent Rosales sought to e?ercise the right of redemption on 1 "arch 19-7, a

da& after she discovered the sale from the <ffice of the Cit& reasurer of Butuan Cit&, or

when the case was initiated, on 1 <cto.er 19-7, .efore the trial court( he written notice of

sale is mandator&( his Court has long esta.lished the rule that notwithstanding actualEnowledge of a co)owner, the latter is still entitled to a written notice from the selling co)

owner in order to remove all uncertainties a.out the sale, its terms and conditions, as well as

its efficac& and status(

'PP@'R'C@0 <A C<G0@I

%essie C( Iigan for petitioner(

Aederico '( Calo for private respondents(

D @ C 0 <

+G*, .;

he petitioner, Uosima +erdad, is the purchaser of a #4-)s2uare meter residential lot

6identified to .e Iot o( 5#9, s)5 of the Butuan Cadastre, located along "agallanes 0treet,

now "arcos "( Calo 0t(, Butuan Cit&( Private respondent, 0ocorro Cordero +da( de

Rosales, seeEs to e?ercise a right of legal redemption over the su.ect propert& and traces her

title to the late "acaria 'tega, her mother)in)law, who died intestate on $- "arch 195(

During her lifetime, "acaria contracted two marriages/ the first with 'ngel Burdeos and the

second, following the latters death, with Canuto Rosales( 't the time of her own death,

"acaria was survived .& her son Ramon '( Burdeos and her grandchild 6.& her daughter

Aelicidad '( Burdeos @stela Io3ada of the first marriage and her children of the secondmarriage, namel&, David Rosales, %usto Rosales, Romulo Rosales, and 'urora Rosales(

0ocorro Rosales is the widow of David Rosales who himself, some time after "acarias

death, died intestate without an issue(

n an instrument, dated 14 %une 19-#, the heirs of Ramon Burdeos, namel&, his widow

"anuela Iegaspi Burdeos and children Aelicidad and Ramon, %r(, sold to petitioner Uosima

+erdad 6their interest on the disputed lot supposedl& for the price of P55,4$($$( n a dul&

notari3ed deed of sale, dated 14 ovem.er 19-#, it would appear, however, that the lot was

sold for onl& P#,$$$($$( Petitioner e?plained that the second deed was intended merel& to

save on the ta? on capital gains(0ocorro discovered the sale on $ "arch 19-7 while she was at the Cit& reasurers <ffice(

<n 1 "arch 19-7, she sought the intervention of the Iupong agapa&apa of Baranga& 9,

Princess Grdua, for the redemption of the propert&( 0he tendered the sum of P#,$$$($$ to

Uosima( he latter refused to accept the amount for .eing much less than the lots current

value of P-$,$$$($$( o settlement having .een reached .efore the Iupong agapa&apa,

private respondents, on 1 <cto.er 19-7, initiated against petitioner an action for WIegal

Redemption with Preliminar& nunctionX .efore the Regional rial Court of Butuan Cit&(

<n #9 %une 199$, following the reception of evidence, the trial court handed down its

decision holding, in fine, that private respondents right to redeem the propert& had alread&

lapsed(

'n appeal to the Court of 'ppeals was interposed .& private respondents( the appellate court,

in its decision of ## 'pril 199, reversed the court a quo7 thus/



W>8@R@A<R@, premises considered, the udgment appealed from is here.& R@+@R0@D,

and a new one is accordingl& entered declaring plaintiff)appellant, 0ocorro C( Rosales,

entitled to redeem the inheritance rights 6'rt( 1$--, CC or pro indiviso share 6'rt( 1#$,

CC of the 8eirs of Ramon Burdeos, 0r( in Iot 5#9, s)5 of the Butuan Cadastre, within

the remaining @I@+@ 611 D'K0 from finalit& hereon, unless written notice of the saleand its terms are received in the interim, under the same terms and conditions appearing

under @?hi.it V% and after returning the purchase price of P#,$$$($$ within the foregoing

period( o cost(X

n her recourse to this Court, petitioner assigned the following Werrors/X hat Y

Xhe 8onora.le Court of 'ppeals erred in declaring 0ocorro C( Rosales is entitled to redeem

the inheritance rights 6'rticle 1$--, CC or pro)indiviso share 6'rticle 1#$, CC of the

heirs of Ramon Burdeos, 0r( in Iot 5#9, s)5 of the Butuan Cadastre, for .eing contrar& to

law and evidence(

Whe 8onora.le Court of 'ppeals erred in ignoring the peculiar circumstance, in that, the

respondents actual Enowledge, as a factor in the dela& constitutes laches(

Whe 8onora.le Court of 'ppeals erred in concluding that 0ocorro C( Rosales, in effect,

timel& e?ercised the right of legal redemption when referral to Baranga& .& respondent

signifies .onafide intention to redeem and= that, redemption is properl& made even if there is

no offer of redemption in legal tender(

Whe 8onora.le Court of 'ppeals erred in ruling that the running of the statutor& redemption

period is sta&ed upon commencement of Baranga& proceedings(X

0till, the thrust of the petition .efore us is the alleged incapacit& of private respondent0ocorro C( Rosales to redeem the propert&, she .eing merel& the spouse of David Rosales, a

son of "acaria, and not .eing a co)heir herself in the intestate estate of "acaria(

>e rule that 0ocorro can( t is true that 0ocorro, a daughter)in)law 6or, for that matter, a mere

relative .& affinit&, is not an intestate heir of her parents)in)law= however, 0ocorro s right to

the propert& is not .ecause she rightfull& can claim heirship in "acarias estate .ut that she

is a legal heir of her hus.and, David Rosales, part of whose estate is a share in his mothers

inheritance(

David Rosales, incontroverti.l&, survived his mothers death( >hen "acaria died on $-

"arch 195 her estate passed on to her surviving children, among them David Rosales, whothereupon .ecame co)owners of the propert&( >hen David Rosales himself later died, his

own estate, which included his undivided interest over the propert& inherited from "acaria,

passed on to his widow 0ocorro and her co)heirs pursuant to the law on succession(

W'R( 995( n the a.sence of legitimate descendants and ascendants, and illegitimate

children and their descendants, whether legitimate or illegitimate, the surviving spouse shall

inherit the entire estate, without preudice to the rights of .rothers and sisters, nephews and

nieces, should there .e an&, under 'rticle 1$$1(

W??? ??? ???

W'R( 1$$1( 0hould .rothers and sisters or their children survive with the widow or

widower, the latter shall .e entitled to one)half of the inheritance and the .rothers and sisters

or their children to the other half(X

0ocorro and herein private respondents, along with the co)heirs of David Rosales, thereupon

.ecame co-o#ners of the propert& that originall& descended from "acaria(



>hen their interest in the propert& was sold .& the Burdeos heirs to petitioner, a right of

redemption arose in favor of private respondents= thus/

W'R( 119( Iegal redemption is the right to .e su.rogated, upon the same terms and

conditions stipulated in the contract, in the place of one who ac2uires a thing .& purchase or

dation in pa&ment, or .& an& other transaction where.& ownership is transmitted .& oneroustitle(X

W'R( 1#$( ' co)owner of a thing ma& e?ercise the right of redemption in case the shares of

all the other co)owners or of an& of them, are sold to a third person( f the price of the

alienation is grossl& e?cessive, the redemptioner shall pa& onl& a reasona.le one(X

>e hold that the right of redemption was timel& e?ercised .& private respondents(

Concededl&, no written notice of the sale was given .& the Burdeos heirs 6vendors to the co)

owners re2uired under 'rticle 1# of the Civil Code Y

X'R( 1#( he right of legal pre)emption or redemption shall not .e e?ercised e?cept

within thirt& da&s from the notice in writing .& the prospective vendor, or .& the vendor, as

the case ma& .e( he deed of sale shall not .e recorded in the Registr& of Propert&, unless

accompanied .& an affidavit of the vendor that he has given written notice thereof to all

possi.le redemptioners(X

8ence, the thirt&)da& period of redemption had &et to commence when private respondent

Rosales sought to e?ercise the right of redemption on 1 "arch 19-7, a da& after she

discovered the sale from the <ffice of the Cit& reasurer of Butuan Cit&, or when the case

was initiated, on 1 <cto.er 19-7, .efore the trial court(

he written notice of sale is mandator&( his Court has long esta.lished the rule thatnotwithstanding actual Enowledge of a co)owner, the latter is still entitled to a written notice

from the selling co)owner in order to remove all uncertainties a.out the sale, its terms and

conditions, as well as its efficac& and status(

@ven in 'lon3o vs. ntermediate 'ppellate Court, relied upon .& petitioner in contending that

actual Enowledge should .e an e2uivalent to a written notice of sale, the Court made it clear

that it was not reversing the prevailing urisprudence= said the Court/

W>e reali3e that in arriving at our conclusion toda&, we are deviating from the strict letter of

the law, which the respondent court understanda.l& applied pursuant to e?isting

urisprudence( he said court acted properl& as it had no competence to reverse the doctrineslaid down .& this Court in the a.ove)cited cases( n fact, and this should .e clearl& stressed,

we ourselves are not a.andoning the De Coneero and Buttle doctrines( >hat we are doing

simpl& is adopting an e?ception to the general rule, in view of the peculiar circumstances of

this case(X

n A*F, the right of legal redemption was invoEed several &ears, notust da&s or months,

after the consummation of the contracts of sale( he complaint for legal redemption itself

was there filed more than thirteen &ears after the sales were concluded(

Relative to the 2uestion posed .& petitioner on private respondents tender of pa&ment, it is

enough that we 2uote, with approval, the appellate court= vi3/

Wn contrast, records clearl& show that an amount was offered, as re2uired in 0empio vs. Del

Rosario, 44 Phil( 1 and Da3a vs.omacru3, 5- Phil( 414, .& the redemptioner)appellant

during the .aranga& conciliation proceedings 6'nswer, par( - .ut was flatl& reected .& the

appellee, not on the ground that it was not the purchase price 6though it appeared on the face



of the deed of sale, @?h( V%)1, nor that it was offered as partial pa&ment thereof, .ut rather

that it was Vunconsciona.le .ased upon its Vpresent value( 6'nswer, par( -(X

'll given, we find no error in the appellate courts finding that private respondents are

entitled to the redemption of the su.ect propert&(

7HERE8ORE, the petition is D@@D and the assailed decision of the Court of 'ppeals is'AAR"@D( Costs against petitioner(

0< <RD@R@D(

*(R( o( 1#7$7( Ae.ruar& #5, 1999!

BI'LG' @( D@I' "@RC@D, IG0< @( D@I' "@RC@D, BI'LG' "(

"'C''*'K, "'( <I+' "( P'R@D@0, @R@0' P( RGP0', RGB@ "(

'DR'<, 8@R"< "( 'DR'<, %<0@I< "( 'DR'<, R<*@I< "(

'DR'<, >IAR@D< "( 'DR'<, +C<R "( 'DR'<, C<R'U< '(<*<C<, %'0" '( "@D<U' and C<0'< "( 'DR'<, petitioners2

vs. %<0@I< P( D@I' "@RC@D, respondent.

D @ C 0 <

PGR0"', (/

his is a Petition for Review on Certiorari of the Decision of the Court of 'ppeals, dated

<cto.er 17, 199, in C')*(R( C+ o( 41#-, which reversed the decision, dated %une 1$,

199#, of the Regional rial Court, Branch 7, Pasig Cit&, in Civil Case o( 597$5(

he facts of the case are, as follows/

<n "arch #, 19-7, @varista "( dela "erced died intestate, without issue( 0he left five 65

parcels of land situated in <ram.o, Pasig Cit&(

't the time of her death, @varista was survived .& three sets of heirs, vi3/ 61 Arancisco "(

dela "erced, her legitimate .rother = 6# eresita P( Rupisan, her niece who is the onl&

daughter of Rosa de la "erced)Platon 6a sister who died in 194 = and 6 the legitimate

children of @ugenia dela "erced)'driano 6another sister of @varista who died in 195,

namel&/ 8erminio, Ru.en, %oselito, Rogelio, >ilfredo, +ictor and Constantino, all surnamed

'driano, Cora3on 'driano)<ngoco and %asmin 'driano)"endo3a(

'lmost a &ear later or on "arch 19, 19--, to .e precise, Arancisco 6@varistas .rother died(

8e was survived .& his wife Blan2uita @rrea dela "erced and their three legitimate children,

namel&, Iuisito @( dela "erced, Blan2uita "( "acatanga& and "a( <livia "( Paredes(

<n 'pril #$, 19-9, the three sets of heirs of the decedent, @varista "( dela "erced, referring

to 61 the a.ovenamed heirs of Arancisco= 6# eresita P( Rupisan and 6 the nine 9!

legitimate children of @ugenia, e?ecuted an e?traudicial settlement, entitled W@?traudicial

0ettlement of the @state of the Deceased @varista "( dela "ercedX adudicating the

properties of @varista to them, each set with a share of one)third 61F pro)indiviso(

<n %ul& # ,199$, private respondent %oselito P( Dela "erced , illegitimate son of the late

Arancisco de la "erced, filed a WPetition for 'nnulment of the @?traudicial 0ettlement of the@state of the Deceased @varista "( Dela "erced with Pra&er for a emporar& Restraining

<rderX, alleging that he was fraudulentl& omitted from the said settlement made .&

petitioners, who were full& aware of his relation to the late Arancisco( Claiming successional

rights, private respondent %oselito pra&ed that he .e included as one of the .eneficiaries, to



share in the one)third 61F pro)indiviso share in the estate of the deceased @varista,

corresponding to the heirs of Arancisco(

<n 'ugust , 199$, the trial court issued the temporar& restraining order pra&ed for .&

private respondent %oselito, enoining the sale of an& of the real properties of the deceased

@varista('fter trial, however, or on %une 1$, 199#, to .e definite, the trial court dismissed the petition,

lifted the temporar& restraining order earlier issued, and cancelled the notice of lis pendens

on the certificates of title covering the real properties of the deceased @varista(

n dismissing the petition, the trial court stated/

Whe factual setting of the instant motion after considering the circumstances of the entire

case and the other evidentiar& facts and documents presented .& the herein parties points

onl& to one issue which goes into the ver& sEeleton of the controvers&, to wit/ W>hether or

not the plaintiff ma& participate in the intestate estate of the late @varista "( Dela "erced in

his capacit& as representative of his alleged father, Arancisdo Dela "erced, .rother of

the deceased, whose succession is under consideration(

? ? ? ? ? ? ? ? ?

t is to .e noted that Arancisco Dela "erced, alleged father of the herein plaintiff, is a

legitimate child, not an illegitimate( Plaintiff, on the other hand, is admittedl& an illegitimate

child of the late Arancisco Dela "erced( 8ence, as such, he cannot represent his alleged

father in the succession of the latter in the intestate estate of the late @varista Dela "erced,

.ecause of the .arrier in 'rt( 99# of the ew Civil Code which states that/

V'n illegitimate child has no right to inherit ab intestato from the legitimate children andrelatives of his father or mother, nor shall such children or relatives inherit in the same

manner from the illegitimate child(

he application of 'rt( 99# cannot .e ignored in the instant case, it is clearl& worded in such

a wa& that there can .e no room for an& dou.ts and am.iguities( his provision of the law

imposes a .arrier .etween the illegitimate and the legitimate famil&( ? ? ?X 6Rollo, p( -7)--

ot satisfied with the dismissal of his petition, the private respondent appealed to the Court

of 'ppeals(

n its Decision of <cto.er 17,199, the Court of 'ppeals reversed the decision of the trial

court of origin and ordered the petitioners to e?ecute an amendator& agreement which shallform part of the original settlement, so as to include private respondent %oselito as a co)heir

to the estate of Arancisco, which estate includes one)third 61F pro indiviso of the latters

inheritance from the deceased @varista(

he relevant and dispositive part of the Decision of the Court of 'ppeals, reads/

W? ? ? ? ? ? ? ? ?

t is a .asic principle em.odied in 'rticle 777, ew Civil Code that the

rights to the succession are transmitted from the moment of the death of the decedent, so that

Arancisco dela "erced inherited 1F of his sisters estate at the moment of the latters death(

0aid 1F of @varistas estate formed part of Aranciscos estate which was su.se2uentl&

transmitted upon his death on "arch #, 19-7 to his legal heirs, among whom is appellant as

his illegitimate child( 'ppellant .ecame entitled to his share in Aranciscos estate from the

time of the latters death in 19-7( he e?traudicial settlement therefore is void insofar as it

deprives plaintiff)appellant of his share in the estate of Arancisco "( dela "erced( 's a



conse2uence, the cancellation of the notice of lis pendens is not in order .ecause the

propert& is directl& affected( 'ppellant has the right to demand a partition of his fathers

estate which includes 1F of the propert& inherited from @varista dela "erced(

W>8@R@A<R@, premises considered, the appealed decision is here.& R@+@R0@D and 0@

'0D@( Defendants)appellees are here.& ordered to e?ecute an amendator&agreementFsettlement to include herein plaintiff)appellant %oselito dela "erced as co)heir to

the estate of Arancisco dela "erced which includes 1F of the estate su.ect of the 2uestioned

Deed of @?traudicial 0ettlement of the @state of @varista "( dela "erced dated 'pril #$,

19-9( he amendator& agreementFsettlement shall form part of the original @?traudicial

0ettlement( >ith costs against defendants)appellees(

0< <RD@R@D(X 6Rollo, p( 41

n the Petition under consideration, petitioners insist that .eing an illegitimate child, private

respondent %oselito is .arred from inheriting from @varista .ecause of the provision of

'rticle 99# of the ew Civil Code, which la&s down an impassa.le .arrier .etween the

legitimate and illegitimate families(

he Petition is devoid of merit(

'rticle 99# of the ew Civil Code is not applica.le .ecause involved here is not a situation

where an illegitimate child would inherit ab intestato from a legitimate sister of his father,

which is prohi.ited .& the aforesaid provision of law( Rather, it is a scenario where an

illegitimate child inherits from his father, the latters share in or portion of, what the latter

alread& inherited from the deceased sister, @varista(

's opined .& the Court of 'ppeals, the law in point in the present case is 'rticle 777 of the ew Civil Code, which provides that the

rights to succession are transmitted from the

moment of death of the decedent(

0ince @varista died ahead of her .rother Arancisco, the latter inherited a portion of the estate

of the former as one of her heirs( 0u.se2uentl&, when Arancisco died, his heirs, namel&/ his

spouse, legitimate children, and the private respondent, %oselito, an illegitimate child,

inherited his 6Aranciscos share in the estate of @varista( t .ears stressing that %oselito does

not claim to .e an heir of @varista .& right of representation .ut participates in his own right,

as an heir of the late Arancisco, in the latters share 6or portion thereof in the estate of

@varista(Petitioners argue that if %oselito desires to assert successional rights to the intestate estate of

his father, the proper forum should .e in the settlement of his own fathers intestate estate, as

this Court held in the case of *utierre3 vs( "acandog 615$ 0CR' 4## 19-7!

Petitioners reliance on the case of *utierre3 vs( "acandog 6 supra is misplaced( he said

case involved a claim for support filed .& one @lpedia *utierre3 against the estate of the

decedent, 'gustin *utierre3, 0r(, when she was not even an heir to the estate in 2uestion, at

the time, and the decedent had no o.ligation whatsoever to give her support( hus, this Court

ruled that @lpedia should have asEed for support pendente lite .efore the %uvenile and

Domestic Relations Court in which court her hus.and 6one of the legal heirs of the decedent

had instituted a case for legal separation against her on the ground of an attempt against his

life( >hen "auricio 6her hus.and died, she should have commenced an action for the

settlement of the estate of her hus.and, in which case she could receive whatever allowance

the intestate court would grant her(



he present case, however, relates to the rightful and undisputed right of an heir to the share

of his late father in the estate of the decedent @varista, ownership of which had .een

transmitted to his father upon the death of @varista( here is no legal o.stacle for private

respondent %oselito, admittedl& the son of the late Arancisco, to inherit in his own right as an

heir to his fathers estate, which estate includes a one)third 61F undivided share in theestate of @varista(

7HERE8ORE, for lacE of merit, the Petition is here.& D@@D and the 'ppealed

Decision of the Court of 'ppeals 'AAR"@D in toto(

0< <RD@R@D(

*(R( o( 11-44( Decem.er #1, 199-!

8@R0 <A *'C< C< and R<0'R< CG'R<, petitioners2 vs( C<GR <A

'PP@'I0 and IKD' 0( R@K@0 as 'ttorne&)in)Aact of %<0@A' 0( R@K@0,B@R'RD' 0( P'II<, 8@R"' 0( P'II<, R@"@D<0 '( 0'"P'K<,

IG"'D' '( 0'"P'K<, @RC< '( 0'"P'K<, C'RI<0 '( 0'"P'K<,

*@@R<0< C( 0'"P'K<, "KR' C( 0'"P'K<, R<0'I< C( 0'"P'K<,

"'G@I C( 0'"P'K<, D@I' '( 0'"P'K<, C<R'U< C( 0'"P'K<, I< C(

0'"P'K<, and I<I' '( 0'"P'K< in her own .ehalf and as 'ttorne&)in)Aact of

<R"' '( 0'"P'K<, respondents(

D @ C 0 <

B@II<0II<, (/

his petition for review on certiorari seeEs to reverse the $ "arch 1994 Decision and #1

Decem.er 1994 Resolution of respondent Court of 'ppeals which upheld the right of

private respondents as heirs of Iourdes 0ampa&o to demand partition under 'rt( 494 of the

Civil Code(

Iourdes 0ampa&o and gnacio Conti, married to Rosario Cuario, were the co)owners of the

propert& in litigation consisting of a 59)s2uare meter lot at the corner of Uamora and

'.ellanosa 0treets, Iucena Cit&, covered .& C o( Y1574, with a house erected

thereon( <n 17 "arch 19- Iourdes 0ampa&o died intestate without issue( 0u.se2uentl&, on

1 'pril 19-7 private respondents %osefina 0( Re&es, Bernardita 0( Palilio, 8erminia 0(

Palilio, Remedios '( 0ampa&o, luminada '( 0ampa&o, @nrico '( 0ampa&o, Carlos '(

0ampa&o, *eneroso C( 0ampa&o, "&rna C( 0ampa&o, Rosalina C( 0ampa&o, "anuel C(

0ampa&o, Delia '( 0ampa&o, Cora3on C( 0ampa&o, ilo C( 0ampa&o, Iolita '( 0ampa&o

and orma '( 0ampa&o, all represented .& their 'ttorne&)in)Aact I&dia 0( Re&es, with Iolita

'( 0ampa&o acting also in her own .ehalf and as 'ttorne&)in)Aact of orma '( 0ampa&o, all

claiming to .e collateral relatives of the deceased Iourdes 0ampa&o, filed an action for

partition and damages .efore RCYBr( 54, Iucena Cit&(

he spouses gnacio Conti and Rosario Cuario refused the partition on the ground that

private respondents failed to produce an& document to prove that the& were the rightful heirsof Iourdes 0ampa&o( <n $ 'ugust 19-7 gnacio Conti died and was su.stituted as part&)

defendant .& his children 'suncion, Arancisco, "ilagros, %oselito, Iuisito, Diego and

eresita, all surnamed Conti(

't the trial, private respondents presented I&dia 0ampa&o Re&es and 'delaida 0ampa&o to

prove that the& were the collateral heirs of the deceased Iourdes 0ampa&o and therefore



entitled to her rights as co)owner of the su.ect lot( Bringing with her the original cop& of

her certificate of live .irth showing that her father was nocentes Re&es and her

mother was %osefina 0ampa&o, I&dia 0ampa&o Re&es testified that she was one of the

nieces of Iourdes 0ampa&o, .eing the daughter of %osefina 0ampa&o, the onl& living si.ling

of Iourdes( I&dia also testified that Iourdes had another sister named Remedios %(0ampa&o who died in 194-, and two .rothers, "anuel %( 0ampa&o and Iuis %( 0ampa&o who

died in 19- and 19$, respectivel&( o prove that %osefina, Remedios, Iuis and "anuel

were si.lings of Iourdes, their .aptismal certificates together with a photocop& of the .irth

certificate of "anuel 0ampa&o were offered in evidence( hese documents showed that

their father and mother, liEe Iourdes 0ampa&o, were 'ntonio 0ampa&o and Brigida %ara3a(

he certificates of .aptism presented as part of the testimon& of I&dia 0ampa&o Re&es were

prepared .& Rev( AranElin C( Rivero who dul& certified that all data therein written were in

accordance with the church records, hence, the lower left portion of the documents .earing

the seal of the church with the notation as to where the documents were logged in particular(

he .aptismal certificates were presented in lieu of the .irth certificates .ecause the

repositor& of those documents, the <ffice of the Civil Registrar of Iucena Cit&, had

.een ra3ed .& fire on two separate occasions, #7 ovem.er 1974 and $ 'ugust 19-, thus

all civil registration records were totall& .urned( <n the other hand, a photocop& of "anuel;s

.irth certificate dated #5 <cto.er 1919 6@?h( :: showed that it was issued .& the Iocal

Civil Registrar of Iucena, a&a.as 6now Iucena Cit&(

'delaida 0ampa&o, widow of "anuel 0ampa&o, testified that her hus.and "anuel was the

.rother of the deceased Iourdes, and with the death of "anuel, Iuis and Remedios, the onl&living si.ling of Iourdes was %osefina(

o re.ut whatever rights the alleged heirs of Iourdes had over the su.ect lot, petitioners

presented Rosario Cuario Conti, Rosa Iadines "alundas and Rodolfo @spineli( Rosario

testified that the su.ect propert& was co)owned in e2ual shares .& her hus.and gnacio

Conti and Iourdes 0ampa&o and that her famil& 6Rosario had .een sta&ing in the su.ect

propert& since 197( n fact, she said that her late hus.and gnacio Conti paid for the real

estate ta?es and spent for the necessar& repairs and improvements thereon.ecause .&

agreement Iourdes would leave her share of the propert& to them(

8owever, as correctl& found .& the trial court, no will, either testamentar& or holographic,was presented .& petitioners to su.stantiate this claim( Rosario also disclosed that

when Iourdes died her remains were taEen .& her relatives from their house( >hen cross

e?amined on who those relatives were, she replied that the onl& one she remem.ered was

%osefina since there were man& relatives who came( >hen asEed who %osefina;s parents

were, she said she could not recall( IiEewise, when asEed who the parents of Iourdes

were, Rosario denied having ever Enown them(

'nother witness, Rosa Iadines "alundas, narrated that she used to .e the neigh.or and

hairdresser of the deceased Iourdes 0ampa&o who told her that upon her death her share

would go to gnacio Conti whom she considered as her .rother since .oth of them were

:adopted: .& their foster parents *a.riel Cord and 'nastacia 'llare& Cord, although she

admitted that she did not Enow whether Iourdes had other relatives(

'ccording to another witness, Rodolfo @spineli, he tooE pictures of the tom.s .earing the

tom.stones of *a.riel Cord and 'nastacia 'llare& Cord and gnacio Conti as well as that of



Iourdes 0ampa&o who was supposed to have .een interred .eside her :adoptive: parents(

8owever, as revealed .& Rosario during her direct e?amination, Iourdes was not in fact

interred there .ecause her relatives tooE her remains(

<n 4 'pril 1991 the trial court declared private respondents as the rightful heirs of Iourdes

0ampa&o( t further ordered private respondents and petitioners to su.mit a proect of partition of the residential house and lot for confirmation .& the court(

Petitioners elevated the case to the Court of 'ppeals contending that the trial court erred

in finding that private respondents were the heirs of Iourdes 0ampa&o and that the& were

entitled to the partition of the lot and the improvements thereon(

<n $ "arch 1994 the Court of 'ppeals affirmed the assailed RC decision and held)

n the instant case, plaintiffs now private respondents! were a.le to prove and esta.lish .&

preponderance of evidence that the& are the collateral heirs of deceased Iourdes 0ampa&o

and therefore the lower court did not err in ordering herein plaintiffs now private

respondents! and defendants now petitioners! to su.mit a proect of partition of the

residential house and lot owned in common .& the deceased Iourdes 0ampa&o and defendant

spouses Conti for confirmation .& the court ? ? ? ? Considering our earlier finding that the

lower court did not err in declaring herein plaintiffs now private respondents! as heirs of

deceased 0ampa&o and therefore entitled to inherit her propert&, the argument of the

appellants now petitioners! that the plaintiffs now private respondents! are not entitled to

partition is devoid of merit 6insertions in 4 5 supplied (

Respondent court also ruled, citing 8ernande3 v( Padua and "ara.illes v( Luito, that a prior

and separate udicial declaration of heirship was not necessar& and that private respondents .ecame the co)owners of the portion of the propert& owned and registered in the name of

Iourdes 0ampa&o upon her death and, conse2uentl&, entitled to the immediate possession

thereof and all other incidentsFrights of ownership as provided for .& law including the right

to demand partition under 'rt( 777 of the Civil Code,and lustre v( 'laras

Arondosa holding that the propert& .elongs to the heirs at the moment of death of the

decedent, as completel& as if he had e?ecuted and delivered to them a deed for the same

.efore his death(

he appellate court su.se2uentl& den&ing a motion for reconsideration upheld the

pro.ative value of the documentar& and testimonial evidence of private respondents andfaulted petitioners for not having su.poenaed %osefina if the& .elieved that she was a vital

witness in the case( 8ence, petitioners pursued this case arguing that a complaint for partition

to claim a supposed share of the deceased co)owner cannot prosper without prior settlement

of the latter;s estate and compliance with all legal re2uirements, especiall& pu.lication, and

private respondents were not a.le to prove .& competent evidence their relationship with the

deceased(

here is no merit in the petition( ' prior settlement of the estate is not essential .efore the

heirs can commence an& action originall& pertaining to the deceased as we e?plained in

Luison v( 0alud )

Claro Luison died in 19$#( t was proven at the trial that the present plaintiffs are ne?t of

Ein and heirs, .ut it is said .& the appellants that the& are not entitled to maintain this action

.ecause there is no evidence that an& proceedings have .een taEen in court for the settlement

of the estate of Claro Luison, and that without such settlement, the heirs cannot maintain this



action( here is nothing in this point( 's well .& the Civil Code as .& the Code of Civil

Procedure, the title to the propert& owned .& a person who dies intestate passes at once to his

heirs( 0uch transmission is, under the present law, su.ect to the claims of

administration and the propert& ma& .e taEen from the heirs for the purpose of pa&ing

de.ts and e?penses, .ut this does not prevent an immediate passage of the title, upon thedeath of the intestate, from himself to his heirs( >ithout some showing that a udicial

administrator had .een appointed in proceedings to settle the estate of Claro Luison, the

right of the plaintiffs to maintain this action is esta.lished(

Conforma.l& with the foregoing and taEen in conunction with 'rts( 777 and 494 of the Civil

Code, from the death of Iourdes 0ampa&o her rights as a co)owner, incidental to which is the

right to asE for partition at an& time or to terminate the co)ownership, were transmitted to her

rightful heirs( n so demanding partition private respondents merel& e?ercised the right

originall& pertaining to the decedent, their predecessor)in)interest(

Petitioners; theor& as to the re2uirement of pu.lication would have .een correct had the

action .een for the partition of the estate of Iourdes 0ampa&o, or if we were dealing with

e?traudicial settlement .& agreement .etween heirs and the summar& settlement of estates of

small value( But what private respondents are pursuing is the mere segregation of Iourdes;

one)half share which the& inherited from her through intestate succession( his is a simple

case of ordinar& partition .etween co)owners( he applica.le law in point is 0ec( 1 of Rule

9 of the Rules of Court )

0ec( 1( Complaint in an action for partition of real estate( ) ' person having the right to

compel the partition of real estate ma& do so as in this rule prescri.ed, setting forth in hiscomplaint the nature and e?tent of his title and an ade2uate description of the real estate of

which partition is demanded and oining as defendants all the other persons interested in the

propert&(

' cursor& reading of the aforecited rule shows that pu.lication is not re2uired as erroneousl&

maintained .& petitioners( here are two 6# simultaneous issues in an action for partition(

Airst, whether the plaintiff is indeed a co)owner of the propert& sought to .e partitioned,

and second, if answered in the affirmative, the manner of the division of the propert&, i(e(,

what portion should go to which co)owner( hus, in this case, we must determine whether

private respondents, .& preponderance of evidence, have .een a.le to esta.lish that the& areco)owners .&

wa& of succession as collateral heirs of the late Iourdes 0ampa&o as the&

claim to .e, either a sister, a nephew or a niece( hese, private respondents were a.le to

prove in the trial court as well as .efore respondent Court of 'ppeals(

Petitioners however insist that there was no such proof of filiation .ecause/ 6a mere

photocopies of .irth certificates do not prove filiation= 6. certifications on non)availa.ilit&

of records of .irth do not prove filiation= 6c .aptismal certificates do not prove filiation of

alleged collateral relatives of the deceased= and, 6d the testimonies of I&dia 0( Re&es,

alleged daughter of %osefina Re&es, and 'delaida 0ampa&o, alleged sister)in)law of %osefina

and Iourdes, were incompetent as I&dia was made to testif& on events which happened

.efore her .irth while 'delaida testified on matters merel& narrated to her(

>e are not persuaded( 'ltogether, the documentar& and testimonial evidence su.mitted are

competent and ade2uate proofs that private respondents are collateral heirs of Iourdes



0ampa&o( Private respondents assert that the& are co)owners of one)half 61F# pro)indiviso

share of the su.ect propert& .& wa& of legal or intestate succession(

0uccession is a mode of ac2uisition .& virtue of which the propert&, rights and o.ligations to

the e?tent of the value of the inheritance of a person are transmitted through his death to

another or others either .& his will or .& operation of law( Iegal orintestate succession taEes place if a person dies without a will, or with a void will, or one which has su.se2uentl& lost

its validit&( f there are no descendants, ascendants, illegitimate children, or a surviving

spouse, the collateral relatives shall succeed to the entire estate of the decedent( t was

esta.lished during the trial that Iourdes died intestate and without issue( Private

respondents as sister, nephews and nieces now claim to .e the collateral relatives of Iourdes(

Gnder 'rt( 17# of the Aamil& Code, the filiation of legitimate children shall .e proved .&

an& other means allowed .& the Rules of Court and special laws, in the a.sence of a record

of .irth or a parents admission of such legitimate filiation in a pu.lic or private document

dul& signed .& the parent( 0uch other proof of ones filiation ma& .e a .aptismal certificate,

a udicial admission, a famil& Bi.le in which his name has .een entered, common reputation

respecting his pedigree, admission .& silence, the testimonies of witnesses and other Einds of

proof admissi.le under Rule 1$ of the Rules of Court( B& analog&, this method of

proving filiation ma& also .e utili3ed in the instant case(

Pu.lic documents are the written official acts, or records of the official acts of the sovereign

authorit&, official .odies and tri.unals, and pu.lic officers, whether of the Philippines, or of a

foreign countr&( he .aptismal certificates presented in evidence .& private respondents are

pu.lic documents( Parish priests continue to .e the legal custodians of the parish recordsand are authori3ed to issue true copies, in the form of certificates, of the entries contained

therein(

he admissi.ilit& of .aptismal certificates offered .& I&dia 0( Re&es, a.sent the

testimon& of the officiating priest or the official recorder, was settled in People v( Ritter,

citing G(0( v( de +era 6#- Phil( 1$5 1914!, thus )

? ? ? the entries made in the Registr& BooE ma& .e considered as entries made in the course

of the .usiness under 0ection 4 of Rule 1$, which is an e?ception to the hearsa& rule( he

.aptisms administered .& the church are one of its transactions in the e?ercise of

ecclesiastical duties and recorded in the .ooE of the church during the course of its .usiness(t ma& .e argued that .aptismal certificates are evidence onl& of the administration of the

sacrament, .ut in this case, there were four 64 .aptismal certificates which, when taEen

together, uniforml& show that Iourdes, %osefina, Remedios and Iuis had the same set of

parents, as indicated therein( Corro.orated .& the undisputed testimon& of 'delaida

0ampa&o that with the demise of Iourdes and her .rothers "anuel, Iuis and sister

Remedios, the onl& si.ling left was %osefina 0ampa&o Re&es, such .aptismal certificates

have ac2uired evidentiar& weight to prove filiation(

Petitioners; o.ection to the photocop& of the certificate of .irth of "anuel 0ampa&o was

properl& discarded .& the court a 2uo and respondent Court of 'ppeals( 'ccording to 0ec(

, par( 61, Rule 1$, of the Rules of Court, when the su.ect of in2uir& is the contents of a

document, no evidence shall .e admissi.le other than the original document itself e?cept

when the original has .een lost or destro&ed or cannot .e produced in court, without .ad

faith on the part of the offeror( he loss or destruction of the original certificate of .irth of



"anuel %( 0ampa&o was dul& esta.lished .& the certification issued .& the <ffice of the

Iocal Civil Registrar of Iucena Cit& to the effect that its office was completel& destro&ed .&

fire on #7 ovem.er 1974 and $ 'ugust 19-, respectivel&, and as a conse2uence thereof,

all civil registration records were totall& .urned(

'pparentl&, there seems to .e some merit in petitioners contention that the testimon& of 'delaida 0ampa&o cannot prove filiation for .eing hearsa& considering that there was no

declaration ante litem motam as re2uired .& the rules, i(e(, that the declaration relating to

pedigree was made .efore the controvers& occurred( onetheless, petitioners made no move

to dispute her testimon& in open court when she was mentioning who the .rothers and sisters

of Iourdes were( 's correctl& o.served .& the trial court in e?plicit terms, :the documentar&

and testimonial evidence were not disputed .& defendants: 6now petitioners( ota.l&, when

Rosario Cuario Conti tooE the witness stand, she admitted that she was not aware of the

identities of the parents of the deceased( Clearl&, this runs counter to the relationship aEin

to filial .onding which she professed she had eno&ed with the decedent( 's wife of

gnacio Conti, she was supposedl& a :sister)in)law: of the deceased Iourdes 0ampa&o who

regarded gnacio as a .rother( 8owever, in sum, we rule that all the pieces of evidence

adduced, taEen together, clearl& preponderate to the right of private respondents to maintain

the action for partition( '.sent an& reversi.le error in the assailed Decision and Resolution

of the Court of 'ppeals, this petition for review on certiorari will not lie(

7HERE8ORE, the petition is D@@D( he assailed Decision dated $ "arch 1994 and

Resolution dated #1 Decem.er 1994 of the Court of 'ppeals are 'AAR"@D( Costs

against petitioners(0< <RD@R@D(

IN THE ATTER O8 THE INTESTATE *(R( o( 1557

ESTATES O8 THE DECEASED #OSE8A

DELGADO AND G!ILLERO R!STIA

CARLOTA DELGADO VDA. DE DE LA ROSA )* t%&' HEIRS O8

L!IS DELGADO, *)3&/, HEIRS O8 CONCHA VDA. DE AREVALO, HEIRS

O8 L!ISA DELGADO VDA. DE DANAO, ANGELA DELGADO

ARESPACOCHAGA, TERESA DELGADO PERLAS, CAROLINA DELGADO

ARESPACOCHAGA, RODOL8O DELGADO, <EN#AIN DELGADO,

GLICERIA DELGADO )* CLEO8AS DELGADO )* HEIRS O8 GORGONIO

DELGADO, *)3&/, RAON DELGADO CAPO, CARLOS DELGADO

CAPO, CLARITA DELGADO CAPOREI"A, =OLANDA DELGADO

ENCINAS, 8ELISA DELGADO CAPOENCINAS )* ELINDA DELGADO

CAPOADARANG,

P&tt*&'s, Present /

PG<, (, C"airman,

0'D<+'I)*G@RR@U,

& ' s u s C<R<',

'UCG' and



*'RC', (

HEIRS OF MARCIANA RUSTIA VDA. DE DAMIAN, NAMELY, GUILLERMO R.

DAMIAN AND JOSE R. DAMIAN; HEIRS OF HORTENCIA RUSTIA CRUZ,

NAMELY, TERESITA CRUZ-SISON, HORACIO R. CRUZ, JOSEFINA CRUZ-

RODIL, AMELIA CRUZ-ENRIQUEZ AND FIDEL R. CRUZ, JR.; HEIRS OF

ROMAN RUSTIA, SR., NAMELY, JOSEFINA RUSTIA ALBANO, VIRGINIA

RUSTIA PARAISO, ROMAN RUSTIA, JR., SERGIO RUSTIA, FRANCISCO

RUSTIA, LETICIA RUSTIA-MIRANDA; AND GUILLERMINA RUSTIA, AS

OPPOSITORS;D/E AND GUILLERMA RUSTIA, AS INTERVENOR,D-E

R&s*&*ts.D>E Promulgated /

%anuar& #7, #$$

D E C I S I O N

CORONA, $ .$

n this petition for review on certiorari, petitioners seeE to reinstate the "a&

11, 199$ decision of the Regional rial Court 6RC of "anila, Branch 55, D8E in 0P

Case o( 97-, which was reversed and set aside .& the Court of 'ppeals in its

decisionD$E dated <cto.er #4, #$$#(

F&!S %F '( !&S(

his case concerns the settlement of the intestate estates of *uillermo Rustiaand %osefa Delgado(D1E he main issue in this case is relativel& simple/ who,

.etween petitioners and respondents, are the lawful heirs of the decedents(

8owever, it is attended .& several collateral issues that complicate its resolution(

he claimants to the estates of *uillermo Rustia and %osefa Delgado ma& .e

divided into two groups/ 61 the alleged heirs of %osefa Delgado, consisting of her

half) and full).lood si.lings, nephews and nieces, and grandnephews and

grandnieces, and 6# the alleged heirs of *uillermo Rustia, particularl&, his sisters,

D4E his nephews and nieces,DE his illegitimate child,D0E and the de factoadoptedchildD/%E 6ampun-ampunan of the decedents(

THE ALLEGED HEIRS O8 #OSE8A DELGADO

http://elibrary.supremecourt.gov.ph/DOCUMENTS/SUPREME_COURT/Decisions/2006.zip%3E1df,df%7C2006/JAN2006/155733.htm#_ftn1






















he deceased %osefa Delgado was the daughter of AelisaD//E Delgado .& one

Iucio Campo( 'side from %osefa, five other children were .orn to the couple,

namel&, a3ario, @dil.erta, %ose, %aco.a, and *orgonio, all surnamed Delgado(

Aelisa Delgado was never married to Iucio Campo, hence, %osefa and her full)

.lood si.lings were all natural children of Aelisa Delgado(8owever, Iucio Campo was not the first and onl& man in Aelisa Delgados

life( Before him was Ramon <sorioD/-E with whom Aelisa had a son, Iuis Delgado(

But, unliEe her relationship with Iucio Campo which was admittedl& one without

the .enefit of marriage, the legal status of Ramon <sorios and Aelisa Delgados

union is in dispute(

he 2uestion of whether Aelisa Delgado and Ramon <sorio ever got married

is crucial to the claimants .ecause the answer will determine whether their

successional rights fall within the am.it of the rule

against

reciprocal intestate succession .etween legitimate and illegitimate relatives(

D/>E f Ramon <sorio and Aelisa Delgado had .een validl& married, then their onl&

child Iuis Delgado was a legitimate half).lood .rother of %osefa Delgado and

therefore e?cluded from the latters intestate estate( 8e and his heirs would .e

.arred .& the principle of a.solute separation .etween the legitimate and

illegitimate families( Conversel&, if the couple were never married, Iuis Delgado

and his heirs would .e entitled to inherit from %osefa Delgados intestate estate, as

the& would all .e within the illegitimate line(Petitioners allege that Ramon <sorio and Aelisa Delgado were never

married( n support thereof, the& assert that no evidence was ever presented to

esta.lish it, not even so much as an allegation of the date or place of the alleged

marriage( >hat is clear, however, is that Aelisa retained the surname Delgado( 0o

did Iuis, her son with Ramon <sorio( Iater on, when Iuis got married, his Partida

de CasamientoD/8E stated that he was W"i'o natural de *elisa (elgado< 6the natural

child of Aelisa Delgado,D/$E significantl& omitting an& mention of the name and

other circumstances of his father(D/1E evertheless, oppositors 6now respondents

insist that the a.sence of a record of the alleged marriage did not necessaril& meanthat no marriage ever tooE place(

%osefa Delgado died on 0eptem.er -, 197# without a will( 0he was survived

.& *uillermo Rustia and some collateral relatives, the petitioners herein( 0everal

months later, on %une 15, 197, *uillermo Rustia e?ecuted an affidavit of

self)

adudication of the remaining properties comprising her estate(

THE ARRIAGE O8 G!ILLERO R!STIA AND #OSE8A DELGADO

0ometime in 1917, *uillermo Rustia proposed marriage to %osefa

DelgadoD/4E .ut whether a marriage in fact tooE place is disputed( 'ccording to

















petitioners, the two eventuall& lived together as hus.and and wife .ut were never

married( o prove their assertion, petitioners point out that no record of the

contested marriage e?isted in the civil registr&( "oreover, a .aptismal certificate

naming %osefa Delgado as one of the sponsors referred to her as WSe6orita< or

unmarried woman(

he oppositors 6respondents here, on the other hand, insist that the a.sence

of a marriage certificate did not of necessit& mean that no marriage transpired(

he& maintain that *uillermo Rustia and %osefa Delgado were married on %une ,

1919 and from then on lived together as hus.and and wife until the death of %osefa

on 0eptem.er -, 197#( During this period spanning more than half a centur&, the&

were Enown among their relatives and friends to have in fact .een married( o

support their proposition, oppositors presented the following pieces of evidence/

1. Certificate of Identity No. 9592 dated [December 1, 1944] issued to Mrs.

Guillermo J. Rustia by Carlos P. Romulo, then Resident Commissioner to the United

States of the Commonwealth of the Philippines;

2. Philippine Passport No. 4767 issued to Josefa D. Rustia on June 25, 1947;

3. Veterans Application for Pension or Compensation for Disability Resulting

from Service in the Active Military or Naval Forces of the United States- Claim No. C-4, 004, 503 (VA Form 526) filed with the Veterans Administration of the United States

of America by Dr. Guillermo J. Rustia wherein Dr. Guillermo J. Rustia himself [swore]

to his marriage to Josefa Delgado in Manila on 3 June 1919;D/E

4. Titles to real properties in the name of Guillermo Rustia indicated that he

was married to Josefa Delgado.

THE ALLEGED HEIRS O8 G!ILLERO R!STIA

*uillermo Rustia and %osefa Delgado never had an& children( >ith no

children of their own, the& tooE into their home the &oungsters *uillermina Rustia

Rustia and anie Rustia( hese children, never legall& adopted .& the couple, were

what was Enown in the local dialect as ampun-ampunan(

During his life with %osefa, however, *uillermo Rustia did manage to father

an illegitimate child,D/0E the intervenor)respondent *uillerma Rustia, with one'mparo 0agar.arria( 'ccording to *uillerma, *uillermo Rustia treated her as his

daughter, his own flesh and .lood, and she eno&ed open and continuous

possession of that status from her .irth in 19#$ until her fathers demise( n fact,

%osefa Delgados o.ituar& which was prepared .& *uillermo Rustia, named the







intervenor)respondent as one of their children( 'lso, her report card from the

Gniversit& of 0anto omas identified *uillermo Rustia as her parentFguardian(D-%E

<ppositors 6respondents here nonetheless posit that *uillerma Rustia has

no interest in the intestate estate of *uillermo Rustia as she was never dul&acEnowledged as an illegitimate child( he& contend that her right to compulsor&

acEnowledgement prescri.ed when *uillermo died in 1974 and that she cannot

claim voluntar& acEnowledgement since the documents she presented were not the

authentic writings prescri.ed .& the new Civil Code(D-/E

<n %anuar& 7, 1974, more than a &ear after the death of %osefa Delgado,

*uillermo Rustia filed a petition for the adoptionD--E of their ampun-

ampunan *uillermina Rustia( 8e stated under oath Wt!hat he had! no legitimate,

legitimated, acEnowledged natural children or natural children .& legal

fiction(XD->E he petition was overtaEen .& his death on Ae.ruar& #-, 1974(

IiEe %osefa Delgado, *uillermo Rustia died without a will( 8e was survived

.& his sisters "arciana Rustia vda. de Damian and 8ortencia Rustia)Cru3, and .&

the children of his predeceased .rother Roman Rustia 0r(, namel&, %osefina Rustia

'l.ano, +irginia Rustia Paraiso, Roman Rustia, %r(, 0ergio Rustia, Arancisco Rustia

and Ieticia Rustia "iranda(D-8E

&)(!(D() P#%!((D*)GS

<n "a& -, 1975, Iuisa Delgado vda. de Danao, the daughter of Iuis

Delgado, filed the original petition for letters of administration of the intestate

estates of the Wspouses %osefa Delgado and *uillermo RustiaX with the RC of

"anila, Branch 55(D-$E his petition was opposed .& the following/ 61 the sisters of

*uillermo Rustia, namel&, "arciana Rustia vda. de Damian and 8ortencia Rustia)

Cru3=D-1E 6# the heirs of *uillermo Rustias late .rother, Roman Rustia, 0r(, and 6the ampun-ampunan *uillermina Rustia Rustia( he opposition was grounded on

the theor& that Iuisa Delgado vda. de Danao and the other claimants were .arred

under the law from inheriting from their illegitimate half).lood relative %osefa

Delgado(

n ovem.er of 1975, *uillerma Rustia filed a motion to intervene in the

proceedings, claiming she was the onl& surviving descendant in the direct line of

*uillermo Rustia( Despite the o.ections of the oppositors 6respondents herein,

the motion was granted(

<n 'pril , 197-, the original petition for letters of administration was

amended to state that %osefa Delgado and *uillermo Rustia were never married .ut

had merel& lived together as hus.and and wife(

















<n %anuar& #4, 19-$, oppositors 6respondents herein filed a motion to

dismiss the petition in the RC insofar as the estate of *uillermo Rustia was

concerned( he motion was denied on the ground that the interests of the

petitioners and the other claimants remained in issue and should .e properl&threshed out upon su.mission of evidence(

<n "arch 14, 19--, Carlota Delgado vda. de de la Rosa su.stituted for her

sister, Iuisa Delgado vda. de Danao, who had died on "a& 1-, 19-7(

<n "a& 11, 199$, the RC appointed Carlota Delgado vda. de de la Rosa as

administratri? of .oth estates(D-4E he dispositive portion of the decision read/

WHEREFORE, in view of all the foregoing, petitioner and her co-claimants to

the estate of the late Josefa Delgado listed in the Petitions, and enumerated

elsewhere in this Decision, are hereby declared as the only legal heirs of the said

Josefa Delgado who died intestate in the City of Manila on September 8, 1972, and

entitled to partition the same among themselves in accordance with the proportions

referred to in this Decision.

Similarly, the intervenor Guillerma S. Rustia is hereby declared as the sole

and only surviving heir of the late Dr. Guillermo Rustia, and thus, entitled to theentire estate of the said decedent, to the exclusion of the oppositors and the other

parties hereto.

The Affidavit of Self-Adjudication of the estate of Josefa Delgado executed by

the late Guillermo J. Rustia on June 15, 1973 is hereby SET ASIDE and declared of

no force and effect.

As the estates of both dece[d]ents have not as yet been settled, and their

settlement [is] considered consolidated in this proceeding in accordance with law, a

single administrator therefor is both proper and necessary, and, as the petitioner

Carlota Delgado Vda. de dela Rosa has established her right to the appointment as

administratrix of the estates, the Court hereby APPOINTS her as the

ADMINISTRATRIX of the intestate estate of the decedent JOSEFA DELGADO in

relation to the estate of DR. GUILLERMO J. RUSTIA.

Accordingly, let the corresponding LETTERS OF ADMINISTRATION issue to

the petitioner CARLOTA DELGADO VDA. DE DE LA ROSA upon her filing of therequisite bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00).

Finally, oppositor GUILLERMINA RUSTIA RUSTIA is hereby ordered to cease

and desist from her acts of administration of the subject estates, and is likewise

ordered to turn over to the appointed administratix all her collections of the rentals





and income due on the assets of the estates in question, including all documents,

papers, records and titles pertaining to such estates to the petitioner and appointed

administratix CARLOTA DELGADO VDA. DE DE LA ROSA, immediately upon

receipt of this Decision. The same oppositor is hereby required to render an

accounting of her actual administration of the estates in controversy within a periodof sixty (60) days from receipt hereof.

SO ORDERED.D-E

<n "a& #$, 199$, oppositors filed an appeal which was denied on the

ground that the record on appeal was not filed on time(D-0E he& then filed a petition

for certiorari and mandamusD>%E which was dismissed .& the Court of 'ppeals(D>/E

8owever, on motion for reconsideration and after hearing the parties oral

arguments, the Court of 'ppeals reversed itself and gave due course to oppositors

appeal in the interest of su.stantial ustice(D>-E

n a petition for review to this Court, petitioners assailed the resolution of

the Court of 'ppeals, on the ground that oppositors failure to file the record on

appeal within the reglementar& period was a urisdictional defect which nullified

the appeal( <n <cto.er 1$, 1997, this Court allowed the continuance of the appeal(

he pertinent portion of our decisionD>>E read/

As a rule, periods prescribed to do certain acts must be followed. However,

under exceptional circumstances, a delay in the filing of an appeal may be excused

on grounds of substantial justice.

xxx xxx xxx

The respondent court likewise pointed out the trial court’s pronouncements as

to certain matters of substance, relating to the determination of the heirs of the

decedents and the party entitled to the administration of their estate, which were to

be raised in the appeal, but were barred absolutely by the denial of the record on

appeal upon too technical ground of late filing.

xxx xxx xxx

In this instance, private respondents’ intention to raise valid issues in the

appeal is apparent and should not have been construed as an attempt to delay orprolong the administration proceedings.

xxx xxx xxx

A review of the trial court’s decision is needed.















xxx xxx xxx

WHEREFORE, in view of the foregoing considerations, the Court

herebyAFFIRMS the Resolution dated November 27, 1991 of the Court of Appealsin CA-G.R. SP No. 23415, for theAPPROVAL of the private respondents’ Record on

Appeal and theCONTINUANCE of the appeal from the Manila, Branch LV Regional

Trial Court’s May 11, 1990 decision.

SO ORDERED.

'cting on the appeal, the Court of 'ppealsD>8E partiall& set aside the trial

courts decision( Gpon motion for reconsideration,D>$E the Court of 'ppeals

amended its earlier decision(D>1E he dispositive portion of the amended decision

read/

With the further modification, our assailed decision

isRECONSIDERED andVACATED. Consequently, the decision of the trial court

isREVERSED andSET ASIDE. A new one is herebyRENDEREDdeclaring: 1.)

Dr. Guillermo Rustia and Josefa Delgado Rustia to have been legally married; 2.)the intestate estate of Dr. Guillermo Rustia, Jacoba Delgado-Encinas and the

children of Gorgonio Delgado (Campo) entitled to partition among themselves the

intestate estate of Josefa D. Rustia in accordance with the proportion referred to in

this decision; 3.) the oppositors-appellants as the legal heirs of the late Dr. Guillermo

Rustia and thereby entitled to partition his estate in accordance with the proportion

referred to herein; and 4.) the intervenor-appellee Guillerma S. Rustia as ineligible to

inherit from the late Dr. Guillermo Rustia; thus revoking her appointment as

administratrix of his estate.

The letters of administration of the intestate estate of Dr. Guillermo Rustia in

relation to the intestate estate of Josefa Delgado shall issue to the nominee of the

oppositors-appellants upon his or her qualification and filing of the requisite bond in

the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00).

Oppositor-appellant Guillermina Rustia Rustia is hereby ordered to cease and

desist from her acts of administration of the subject estates and to turn over to the

appointed administrator all her collections of the rentals and incomes due on theassets of the estates in question, including all documents, papers, records and titles

pertaining to such estates to the appointed administrator, immediately upon notice of

his qualification and posting of the requisite bond, and to render an accounting of her

(Guillermina Rustia Rustia) actual administration of the estates in controversy within









a period of sixty (60) days from notice of the administrator’s qualification and posting

of the bond.

The issue of the validity of the affidavit of self-adjudication executed by Dr.

Guillermo Rustia on June 15, 1973 isREMANDEDto the trial court for further

proceedings to determine the extent of the shares of Jacoba Delgado-Encinas andthe children of Gorgonio Delgado (Campo) affected by the said adjudication.

8ence, this recourse(

he issues for our resolution are/

1. whether there was a valid marriage between Guillermo Rustia and Josefa Delgado;

2. who the legal heirs of the decedents Guillermo Rustia and Josefa Delgado are;

3. who should be issued letters of administration.

THE MARRIAGE OF GUILLERMO RUSTIA AND JOSEFA DELGADO

' presumption is an inference of the e?istence or non)e?istence of a fact

which courts are permitted to draw from proof of other facts( Presumptions areclassified into presumptions of law and presumptions of fact( Presumptions of law

are, in turn, either conclusive or disputa.le(D>4E

Rule 11, 0ection of the Rules of Court provides/

Sec. 3.Disputable presumptions. — The following presumptions are satisfactory if

uncontradicted, but may be contradicted and overcome by other evidence:

xxx xxx xxx

(aa) That a man and a woman deporting themselves as husband and wife have

entered into a lawful contract of marriage;

xxx xxx xxx

In this case, several circumstances give rise to the presumption that a validmarriage existed between Guillermo Rustia and Josefa Delgado. Their cohabitation

of more than 50 years cannot be doubted. Their family and friends knew them to be

married. Their reputed status as husband and wife was such that even the original

petition for letters of administration filed by Luisa Delgadovda. de Danao in 1975

referred to them as “spouses.”





Ket, petitioners maintain that %osefa Delgado and *uillermo Rustia had

simpl& lived together as hus.and and wife without the .enefit of marriage( he&

maEe much of the a.sence of a record of the contested marriage, the testimon& of a

witnessD>E attesting that the& were not married, and a .aptismal certificate whichreferred to %osefa Delgado as WSe6orita< or unmarried woman(D>0E

>e are not persuaded(

*irst , although a marriage contract is considered a primar& evidence of

marriage, its a.sence is not alwa&s proof that no marriage in fact tooE place(

D8%E <nce the presumption of marriage arises, other evidence ma& .e presented in

support thereof( he evidence need not necessaril& or directl& esta.lish the

marriage .ut must at least .e enough to strengthen the presumption of marriage(

8ere, the certificate of identit& issued to %osefa Delgado as "rs( *uillermo Rustia,

D8/E the passport issued to her as %osefa D( Rustia,D8-E the declaration under oath of no

less than *uillermo Rustia that he was married to %osefa Delgado D8>E and the titles

to the properties in the name of W*uillermo Rustia married to %osefa Delgado,X

more than ade2uatel& support the presumption of marriage( hese are pu.lic

documents which are prima facie evidence of the facts stated therein(D88E o clear

and convincing evidence sufficient to overcome the presumption of the truth of the

recitals therein was presented .& petitioners(

Second , @lisa vda. de 'nson, petitioners own witness whose testimon& the&

primaril& relied upon to support their position, confirmed that *uillermo Rustia

had proposed marriage to %osefa Delgado and that eventuall&, the two had Wlived

together as hus.and and wife(X his again could not .ut strengthen the

presumption of marriage(

T"ird , the .aptismal certificateD8$E was conclusive proof onl& of the .aptism

administered .& the priest who .apti3ed the child( t was no proof of the veracit&

of the declarations and statements contained therein,D81E such as the alleged single or unmarried 6WSe6oritaX civil status of %osefa Delgado who had no hand in its

preparation(

Petitioners failed to re.ut the presumption of marriage of *uillermo Rustia

and %osefa Delgado( n this urisdiction, ever& intendment of the law leans toward

legitimi3ing matrimon&( Persons dwelling together apparentl& in marriage are

presumed to .e in fact married( his is the usual order of things in societ& and, if

the parties are not what the& hold themselves out to .e, the& would .e living in

constant violation of the common rules of law and propriet&( Semper praesumitur

pro matrimonio( 'lwa&s presume marriage(D84E

THE LAWFUL HEIRS OF JOSEFA DELGADO























o determine who the lawful heirs of %osefa Delgado are, the 2uestioned

status of the coha.itation of her mother Aelisa Delgado with Ramon <sorio must

first .e addressed(

's mentioned earlier, presumptions of law are either conclusive or disputa.le( Conclusive presumptions are inferences which the law maEes so

peremptor& that no contrar& proof, no matter how strong, ma& overturn them(D8E <n

the other hand, disputa.le presumptions, one of which is the presumption of

marriage, can .e relied on onl& in the a.sence of sufficient evidence to the

contrar&(

Iittle was said of the coha.itation or alleged marriage of Aelisa Delgado and

Ramon <sorio( he oppositors 6now respondents chose merel& to rel& on the

disputa.le presumption of marriage even in the face of such countervailing

evidence as 61 the continued use .& Aelisa and Iuis 6her son with Ramon <sorio

of the surname Delgado and 6# Iuis Delgados and Caridad Concepcions Partida

de CasamientoD80E identif&ing Iuis as W"i'o natural de *elisa (elgadoX 6the natural

child of Aelisa Delgado(D$%E

'll things considered, we rule that these factors sufficientl& overcame the

re.utta.le presumption of marriage( Aelisa Delgado and Ramon <sorio were never

married( 8ence, all the children .orn to Aelisa Delgado out of her relations withRamon <sorio and Iucio Campo, namel&, Iuis and his half).lood si.lings

a3ario, @dil.erta, %ose, %aco.a, *orgonio and the decedent %osefa, all surnamed

Delgado,D$/E were her natural children(D$-E

Pertinent to this matter is the following o.servation/

Suppose, however, that A begets X with B, and Y with another woman, C; then X

and Y would be natural brothers and sisters, but of half-blood relationship. Can they

succeed each other reciprocally?

The law

prohibits reciprocal succession between illegitimate children and

legitimate children of the same parent, even though there is unquestionably a tie of

blood between them. It seems that to allow an illegitimate child to succeedab

intestato (from) another illegitimate child begotten with a parent different from that of

the former, would be allowing the illegitimate child greater rights than a legitimate

child. Notwithstanding this, however, we submit that

succession should be allowed, even when the illegitimate brothers and sisters are

only of the half-blood. The reason impelling the prohibition on reciprocal

successions between legitimate and illegitimate families does not apply to the case

under consideration. That prohibition has for its basis the difference in category

between illegitimate and legitimate relatives. There is no such difference when all

the children are illegitimate children of the same parent, even if begotten with













different persons. They all stand on the same footing before the law, just like

legitimate children of half-blood relation. We submit, therefore, that

the rules regarding succession of legitimate brothers and sisters should be

applicable to them. Full blood illegitimate brothers and sisters should receive double

the portion of half-blood brothers and sisters; and if all are either of the full blood orof the half-blood, they shall share equally.D$>E

8ere, the a.ove)named si.lings of %osefa Delgado were related to her .&

full).lood, e?cept Iuis Delgado, her half).rother( onetheless, since the& were all

illegitimate, the& ma& inherit from each other( 'ccordingl&, all of them are entitled

to inherit from %osefa Delgado(

>e note, however, that the petitioners .efore us are alread& the nephews,

nieces, grandnephews and grandnieces of %osefa Delgado( Gnder 'rticle 97# of the

new Civil Code, the right of representation in the collateral line taEes place onl& in

favor of the children of .rothers and sisters 6nephews and nieces( Conse2uentl&, it

cannot .e e?ercised .& grandnephews and grandnieces(D$8E herefore, the onl&

collateral relatives of %osefa Delgado who are entitled to partaEe of her intestate

estate are her brot"ers and sisters2 or t"eir c"ildren #"o #ere still alive at t"e time

of "er deat" on September =2 >?@( he& have a vested right to participate in the

inheritance(D$$E he records not .eing clear on this matter, it is now for the trialcourt to determine who were the surviving .rothers and sisters 6or their children of

%osefa Delgado at the time of her death( ogether with *uillermo Rustia, D$1E the&

are entitled to inherit from %osefa Delgado in accordance with 'rticle 1$$1 of the

new Civil Code/D$4E

Art. 1001. Should brothers and sisters or their children survive with the widow or

widower, the latter shall be entitled to one-half of the inheritance and the brothers

and sisters or their children to the other one-half.

0ince %osefa Delgado had heirs other than *uillermo Rustia, *uillermo

could not have validl& adudicated %osefas estate all to himself( Rule 74, 0ection 1

of the Rules of Court is clear( 'dudication .& an heir of the decedents entire

estate to himself .& means of an affidavit is allowed onl& if he is the s& heir to

the estate/

SECTION 1.Extrajudicial settlement by agreement between heirs. – If the decedent

left no will and no debts and the heirs are all of age, or the minors are represented

by their judicial or legal representatives duly authorized for the purpose, the parties

may, without securing letters of administration, divide the estate among themselves

as they see fit by means of a public instrument filed in the office of the register of













deeds, and should they disagree, they may do so in an ordinary action of partition.If

there is only one heir, he may adjudicate to himself the estate by means of an

affidavit filed in the office of the register of deeds.x x x (emphasis supplied)

THE LAWFUL HEIRS OF GUILLERMO RUSTIA

ntervenor 6now co)respondent *uillerma Rustia is an illegitimate

childD$E of *uillermo Rustia( 's such, she ma& .e entitled to successional rights

onl& upon proof of an admission or recognition of paternit&( D$0E 0he, however,

claimed the status of an acEnowledged illegitimate child of *uillermo Rustia

onl& )+t&' the death of the latter on Ae.ruar& #-, 1974 at which time it was alread&

the new Civil Code that was in effect(

Gnder the old Civil Code 6which was in force till 'ugust #9, 195$,

illegitimate children a.solutel& had no hereditar& rights( his draconian edict was,

however, later rela?ed in the new Civil Code which granted certain successional

rights to illegitimate children .ut onl& on condition that the& were first recogni3ed

or acEnowledged .& the parent(

Gnder the new law, recognition ma& .e compulsor& or voluntar&(

D1%E Recognition is compulsor& in an& of the following cases/

(1) in cases of rape, abduction or seduction, when the period of the offense

coincides more or less with that of the conception;

(2) when the child is in continuous possession of status of a child of the alleged

father (or mother)D1/E by the direct acts of the latter or of his family;

(3) when the child was conceived during the time when the mother cohabited with

the supposed father;

(4) when the child has in his favor any evidence or proof that the defendant is his

father.D1-E

<n the other hand, voluntar& recognition ma& .e made in the record of .irth, a

will, a statement .efore a court of record or in an& authentic writing(D1>E

ntervenor *uillerma sought recognition on two grounds/ first, compulsor&

recognition through the open and continuous possession of the status of anillegitimate child and second, voluntar& recognition through authentic writing(

here was apparentl& no dou.t that she possessed the status of an

illegitimate child from her .irth until the death of her putative father *uillermo

Rustia( 8owever, this did not constitute acEnowledgment .ut a mere ground by















#"ic" s"e could "ave compelled acBno#ledgment t"roug" t"e courts(

D18E Aurthermore, an& 6udicial action for compulsor& acEnowledgment has a dual

limitation/ the lifetime of the child and the lifetime of the putative parent(D1$E <n

the death of either, the action for compulsor& recognition can no longer .e filed(

D11E n this case, intervenor *uillermas right to claim compulsor& acEnowledgment prescri.ed upon the death of *uillermo Rustia on Ae.ruar& #-, 1974(

he claim of voluntar& recognition 6*uillermas second ground must

liEewise fail( 'n authentic writing, for purposes of voluntar& recognition, is

understood as a genuine or indu.ita.le writing of the parent 6in this case,

*uillermo Rustia( his includes a pu.lic instrument or a private writing admitted

.& the father to .e his(D14E Did intervenors report card from the Gniversit& of 0anto

omas and %osefa Delgados o.ituar& prepared .& *uillermo Rustia 2ualif& as

authentic writings under the new Civil CodeH Gnfortunatel& not( he report card of

intervenor *uillerma did not .ear the signature of *uillermo Rustia( he fact that

his name appears there as intervenors parentFguardian holds no weight since he

had no participation in its preparation( 0imilarl&, while witnesses testified that it

was *uillermo Rustia himself who drafted the notice of death of %osefa Delgado

which was pu.lished in the 0GD'K "@0 on 0eptem.er 1$, 197#, that

pu.lished o.ituar& was not the authentic writing contemplated .& the law(

>hat could have .een admitted as an authentic writing was the original

manuscript of the notice, in the handwriting of *uillermo Rustia himself andsigned .& him, not the newspaper clipping of the o.ituar&( he failure to present

the original signed manuscript was fatal to intervenors claim(

he same misfortune .efalls the ampun-ampunan, *uillermina Rustia

Rustia, who was never adopted in accordance with law( 'lthough a petition for her

adoption was filed .& *uillermo Rustia, it never came to fruition and was

dismissed upon the latters death( >e affirm the ruling of .oth the trial court and

the Court of 'ppeals holding her a legal stranger to the deceased spouses and

therefore not entitled to inherit from them ab intestato( >e 2uote/

Adoption is a juridical act, a proceeding in rem, which [created] between two

persons a relationship similar to that which results from legitimate paternity and

filiation. Only an adoption made through the court, or in pursuance with the

procedure laid down under Rule 99 of the Rules of Court is valid in this jurisdiction.

It is not of natural law at all, but is wholly and entirely artificial. To establish the

relation, the statutory requirements must be strictly carried out, otherwise, the

adoption is an absolute nullity. The fact of adoption is never presumed, but must be

affirmatively [proven] by the person claiming its existence.D1E

Premises considered, we rule that two of the claimants to the estate of

*uillermo Rustia, namel&, intervenor *uillerma Rustia and the ampun-













ampunan *uillermina Rustia Rustia, are not lawful heirs of the decedent( Gnder

'rticle 1$$# of the new Civil Code, if there are no descendants, ascendants,

illegitimate children, or surviving spouse, the collateral relatives shall succeed to

the entire estate of the deceased( herefore, the lawful heirs of *uillermo Rustia

are the remaining claimants, consisting of his sisters, D10E nieces and nephews(D4%E

ENTITLEMENT TO LETTERS OF ADMINISTRATION

'n administrator is a person appointed .& the court to administer the

intestate estate of the decedent( Rule 7-, 0ection of the Rules of Court prescri.es

an order of preference in the appointment of an administrator/

Sec. 6.When and to whom letters of administration granted. – If no executor is

named in the will, or the executor or executors are incompetent, refuse the trust, or

fail to give a bond, or a person dies intestate, administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in

the discretion of the court, or to such person as such surviving husband or wife, or

next of kin, requests to have appointed, if competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the

person selected by them, be incompetent or unwilling, or if the husband or widow or

next of kin, neglects for thirty (30) days after the death of the person to apply for

administration or to request that the administration be granted to some other person,

it may be granted to one or more of the principal creditors, if competent and willing to

serve;

(c) If there is no such creditor competent and willing to serve, it may be granted to

such other person as the court may select.

n the appointment of an administrator, the principal consideration is the

interest in the estate of the one to .e appointed( D4/E he order of preference does not

rule out the appointment of co)administrators, speciall& in cases where

ustice and e2uit& demand that opposing parties or factions .e represented in the

management of the estates,D4-E a situation which o.tains here(

It is in this light that we see fit to appoint joint administrators, in the persons of

Carlota Delgadovda. de de la Rosa and a nominee of the nephews and nieces of

Guillermo Rustia. They are the next of kin of the deceased spouses Josefa Delgado

and Guillermo Rustia, respectively.











7HERE8ORE, the petition 6which seeEs to reinstate the "a& 11, 199$

decision of the RC "anila, Branch 55 is here.& DENIED( he assailed <cto.er

#4, #$$# decision of the Court of 'ppeals is A88IRED with the following

modifications/

1( *uillermo Rustias %une 15, 197 affidavit of self)adudication is

here.& ANN!LLED(

#( the intestate estate of *uillermo Rustia shall inherit half of the intestate

estate of %osefa Delgado( he remaining half shall pertain to 6a the full and half)

si.lings of %osefa Delgado who survived her and 6. the children of an& of %osefa

Delgados full) or half)si.lings who ma& have predeceased her, also surviving at

the time of her death( %osefa Delgados grandnephews and grandnieces are

e?cluded from her estate( n this connection, the trial court is here.& ordered to

determine the identities of the relatives of %osefa Delgado who are entitled to share

in her estate(

( *uillermo Rustias estate 6including its one)half share of %osefa Delgados

estate shall .e inherited .& "arciana Rustia vda. de Damian and 8ortencia Rustia

Cru3 6whose respective shares shall .e per capita and the children of the late

Roman Rustia, 0r( 6who survived *uillermo Rustia and whose respective shares

shall .e per stirpes( Considering that "arciana Rustia vda. deDamian and

8ortencia Rustia Cru3 are now deceased, their respective shares shall pertain totheir estates(

4( Ietters of administration over the still unsettled intestate estates of

*uillermo Rustia and %osefa Delgado shall issue to Carlota Delgado vda. de de la

Rosa and to a nominee from among the heirs of *uillermo Rustia, as oint

administrators, upon their 2ualification and filing of the re2uisite .ond in such

amount as ma& .e determined .& the trial court(

No pronouncement as to costs.

SO ORDERED.

*(R( o( 149751( "arch 11, #$$5!

PGRAC'C< B'II<)"<@R< and %<+@C<∗ B'II<, petitioners2

vs. @G*@' 0@P"<, C<0G@I< R<BI@0 and PI'CD< R<BI@0, respondents(

D @ C 0 <

C'II@%<, 0R(, (/

%ose Balilo was the owner of a parcel of land, with an area of 7(7-7 hectares, located in 0an

%ose, <ccidental "indoro, covered .& 8omestead Patent o( 47-4 issued on Ae.ruar& #1,

19-( Based on the said patent, <riginal Certificate of itle 6<C o( $14 was issued to

and under his name .& the Register of Deeds(D/E

<n 'ugust 1#, 194, %ose Balilo died intestate( D-E 0ometime in 194-, iniana Balilo, the

sister of %ose Balilo, filed a petition in the Court of Airst nstance 6CA of Pampanga, for the

guardianship of the propert& and the person of %ovencio Balilo whom she alleged to .e the

http://elibrary.supremecourt.gov.ph/DOCUMENTS/SUPREME_COURT/Decisions/2005.zip%3E4b7,df%7C2005/MAR2005/149751.htm#_ftn1








son of her .rother, %ose Balilo= hence, her nephew( he case was docEeted as 0pecial

Proceeding o( ##( iniana filed a motion in the said case, for authorit& to e?ecute, for and

in .ehalf of her ward, a deed of a.solute sale over the propert& covered .& <C o( $14 in

favor of %ose 0eptimo for P75$($$( he CA granted the motion( iniana e?ecuted the deed

of a.solute sale over the propert& in favor of %ose 0eptimo who, thereafter, declared the propert& in his name for ta?ation purposes and paid the realt& ta?es thereon(

8owever, %ose 0eptimo failed to register the deed in the <ffice of the Register of Deeds and,

conse2uentl&, to secure a torrens title over the propert& in his name( he guardianship case

was terminated on 0eptem.er #4, 1951 per the <rder of the CA of even date(D>E

hereafter, on <cto.er 1#, 19, %ovencio Balilo filed a complaint against %ose 0eptimo in

the CA of <ccidental "indoro, to compel the latter to resell the propert& to him( he case

was docEeted as Civil Case o( R)159( %ovencio alleged therein that he was the onl&

legitimate child of the spouses %ose Balilo and %uana +illarama, and that the latter died on

'ugust $, 194( 8e pra&ed that, after due proceedings, udgment .e rendered in his favor,

thus/

>8@R@A<R@, it is most respectfull& pra&ed that an order .e issued re2uiring the Defendant

to resell the said Iot o( 149, Pls), situated in 0an %ose, <ccidental "indoro, to the

herein Plaintiff upon tender to the herein Defendant the sum of 0@+@ 8GDR@D AAK

6P75$($$ P@0<0, Philippine Currenc&, or an& such sum as this 8onora.le Court finds ust

and fair, and re2uiring said Defendant to deliver possession of said homestead land to the

herein Plaintiff(

Plaintiff further pra&s for other relief as ma& .e deemed ust and proper in the premises(D8E%ovencio amended the complaint and impleaded Placido Ro.les as part&)defendant, on his

claim that the latter purchased a five)hectare portion of the propert& .efore the complaint was

filed( <n ovem.er -, 19, the CA rendered udgment dismissing the complaint( he CA

ruled that %ovencio had no right to repurchase the propert&, the five)&ear period under

0ection 119 of Commonwealth 'ct o( 141 having long e?pired( %ovencio failed to appeal

the decision(D$E

<n "arch , 19-7, Purificacion Balilo)"ontero filed a complaint with the Regional rial

Court 6RC of 0an %ose, <ccidental "indoro, Branch 4, against the respondents, @ugenia

0eptimo, the surviving spouse of %ose 0eptimo, and the spouses Placido Ro.les andConsuelo Ro.les, for recover& of possession of the said propert&( 8owever, despite the

allegation in his complaint in Civil Case o( R)159 that he was the onl& legitimate child of

%ose Balilo, she impleaded %ovencio Balilo as part&)plaintiff(

he complaint alleged, inter alia, that the parties were the children and onl& legal heirs of the

late %ose Balilo who, .efore his death, was the owner of Iot o( 149 covered .& <C o(

$14 located in 0an %ose, <ccidental "indoro= onl& a &ear .efore the complaint was filed,

Purificacion learned that she was one of the co)owners of the propert&= that the respondents

claimed ownership over the propert& and installed tenants thereon= and despite their

demands, the respondents and their tenants refused to do so(

%ovencio and Purificacion pra&ed that, after due proceedings, udgment .e rendered in their

favor/

>8@R@A<R@, it is respectfull& pra&ed of this 8onora.le Court that udgment .e rendered

for the plaintiffs and against the defendants/









1( Restoring possession of the landholdings in 2uestion unto the plaintiffs=

#( <rdering defendants to reim.urse plaintiffs the rentals on the landholdings to .e

determined .& this 8onora.le Court=

( <rdering the defendants to pa& the plaintiffs the sum of P#$,$$$($$ as attorne&s fees

and litigation e?penses=4( <rdering the defendants to pa& the costs of suit= and

5( @?tending unto the plaintiffs such other reliefs to which the& ma& .e entitled in law

and e2uit&(D1E

he summons and complaint were served on respondents @ugenia 0eptimo and Consuelo

Ro.les( 's per the return of the sheriff, Placido Ro.les was alread& dead(

n her answer to the complaint, respondent @ugenia 0eptimo alleged that her late hus.and

%ose 0eptimo had purchased the propert& from %ovencio Balilo, through his guardian, and

that the sale was approved .& the CA of Pampanga in 0pecial Proceeding o( ##( 0he

specificall& denied, for lacE of information sufficient to form a .elief as to the truth thereof,

the allegation of Purificacion "ontero that she was one of %ose Balilos children and one of

his heirs( Consuelo Ro.les was declared in default for her failure to file her answer to the

complaint(D4E

<n <cto.er 15, 1991, the trial court rendered udgment in favor of %ovencio and

Purificacion( he fallo of the decision reads/

Premises thoroughl& and fairl& considered, udgment is here.& rendered/

1( <rdering defendant @ugenia 0eptimo as successor)in)interest of decedent %ose 0eptimo

to recover& 6 sic to plaintiff Purificacion Balilo)"ontero one)half of the parcel of agriculturalland covered .& <riginal Certificate of itle o( $14=

#( Den&ing claim for damages= and

( Dismissing counterclaim(

0< <RD@R@D(DE

<nl& respondent @ugenia 0eptimo appealed the decision to the Court of 'ppeals 6C', where

she alleged the following/

( hat the trial court erred in finding that the plaintiff Purificacion Balilo)"ontero did

not lost 6 sic her right to recover the propert& from the defendants, .ecause she was not a

part& to the sale and for not having actual Enowledge on the guardianship proceedings(( hat the trial court erred in ruling that the sale of the land .& the legal guardian of

%ovencio Balilo dul& authori3ed and approved .& the Court which 6 sic the guardianship

proceedings was .eing held did not affect the share of plaintiff Purificacion Balilo)"ontero

.ecause the sale was not registered(

( he trial court erred in ordering defendant @ugenia 0eptimo to reconve& 1F# of the

propert& in 2uestion covered .& C o( )$14 to plaintiff Purificacion Balilo)"ontero(D0E

n a Decision dated 'pril 11, #$$1, the C' affirmed with modification the decision of the

trial court( he C' applied the <ld Civil Code

on testate succession, and ruled that the

propert& was registered in the name of %ose Balilo whose civil status was stated as single(

Considering that he was survived .& Purificacion "ontero, his wife %uana +illarama and

their son %ovencio Balilo when he died in 194= and when %uana +illarama died intestate,

was, in turn, survived .& her son %ovencio Balilo and Purificacion "ontero, %ovencio was

entitled to two)thirds undivided portion of the propert&, while Purificacion "ontero was











entitled to one)third undivided portion of the propert&( Respondent @ugenia 0eptimo did not

file an& motion for the reconsideration of the decision( 8owever, Purificacion "ontero filed

a motion for the partial reconsideration of the decision, alleging that, appl&ing the provisions

of the <ld Civil Code on intestate succession, she was entitled to an undivided one)half

portion of the propert&( he C', however, denied the said motion(Purificacion "ontero, now the petitioner, filed the instant petition for review, contending

that/

8@ C<GR <A 'PP@'I0 *R'+@IK @RR@D 8<ID* 8' 8@ P@<@R

0 @I@D <IK < <@)8RD 61F 08'R@ <A 8@ PR<P@RK 0<G*8 <

B@ R@C<+@R@D 8@R@, 0'D 'D%GDC'< AD* < I@*'I 0GPP<R

GD@R 8@ C+I C<D@ <A 0P' >8C8 >'0 8@ I'> 8@ PR@+'I*( D/%E

he petitioner maintains that the C' should have applied the provisions of the <ld Civil

Code

on intestate succession .ecause %ose Balilo died intestate in 194 .efore the ew Civil

Code tooE effect( 0he posits that she and %ovencio Balilo were entitled to inherit the

propert& from %ose Balilo in e2ual shares, .ecause there is no competent evidence on record

to prove that %ose Balilo and %uana +illarama, the mother of %ovencio, were married(

he petition is granted(

>e agree with the contention of the petitioner that there is no evidence on record that %ose

Balilo and %uana +illarama were married, or that the& coha.ited with each other as hus.and

and wife( @ven %ovencio Balilo opted not to testif&( either was %ose Balilo survived .& an&

ascendants( 8owever, we agree with the ruling of the C' that %ose Balilo and *ertrudes

icdao were not, liEewise, married(he contention of the petitioner that the C' erred in appl&ing the

law on testate succession under the <ld Civil Code is, liEewise, correct( he appellate court

should have applied the provisions of the <ld Civil Code on intestate succession considering

that %ose Balilo died intestate in 194, .efore the effectivit& of the ew Civil Code(

'rticle 91 of the <ld Civil Code provides that when a person dies intestate, his legitimate

children and their descendants succeed him, without distinction of se?, or age, even though

the& spring from different marriages( 'rticle 9# of the same Code provides that the children

of the deceased shall alwa&s inherit from him in their own right, dividing the inheritance in

e2ual shares( "oreover, under 'rticle 99 of the <ld Civil Code, in the a.sence of legitimate descendants or ascendants, the natural children legall& acEnowledged and those

legitimated .& ro&al succession shall succeed to the entire estate of the deceased(

>hen %ose Balilo died intestate on 'ugust 1#, 194, he was survived .& his daughter, the

petitioner herein, his son %ovencio Balilo, and *ertrudes icdao and %uana +illarama(

Conforma.l& to 'rticle 99 of the <ld Civil Code, onl& the petitioner and %ovencio Balilo

inherited the propert& in e2ual shares, to the e?clusion of %uana +illarama and *ertrudes

icdao( either of them was the lawful wife of %ose Balilo( Besides, under 'rticle 94 of

the <ld Civil Code, the surviving spouse shall inherit onl& in default of the persons

enumerated Win the three sections ne?t preceding(X

Conse2uentl&, when %ovencio Balilo, through his guardian iniana Balilo, e?ecuted the deed

of a.solute sale over the entire propert& on "a& #, 194- in favor of %ose 0eptimo, the latter

did not ac2uire title over the entire propert&, .ut onl& to an undivided one)half portion

thereof which %ovencio Balilo had inherited from %ose Balilo( %ose 0eptimo could not have





purchased and ac2uired the other half of the propert& from %ovencio Balilo .ecause the latter

was not the owner thereof( 8ence, the C' erred in holding that %ovencio Balilo inherited an

undivided two)thirds portion of the propert&, and that %ose 0eptimo ac2uired title over the

said two)thirds undivided portion(

IN LIGHT O8 ALL THE 8OREGOING, the petition is GRANTED( he assailedDecision and Resolution of the Court of 'ppeals are R@+@R0@D 'D 0@ '0D@( he

Decision of the Regional rial Court is REINSTATED( o pronouncement as to costs(

0< <RD@R@D(

[G.R. No. 119064. August 22, 2000]

NENG “KAGUI KADIGUIA” MALANG, petitioner, vs.HON. COROCOY MOSON,

Presiding Judge of 5th Shari’a District Court, Cotabato City, HADJI MOHAMMAD

ULYSSIS MALANG, HADJI ISMAEL MALINDATU MALANG, FATIMA MALANG,DATULNA MALANG, LAWANBAI MALANG, JUBAIDA KADO MALANG, NAYO

OMAL MALANG and MABAY GANAP MALANG,respondents.

D E C I S I O N

GONZAGA-REYES, J.:

Presented for resolution in this special civil action ofcertiorari is the issue of whether

or not the regime of conjugal partnership of gains governed the property relationship

of two Muslims who contracted marriage prior to the effectivity of the Code of Muslim

Personal Laws of the Philippines (hereafter, “P.D. 1083” or “Muslim Code”). The

question is raised in connection with the settlement of the estate of the deceased

husband.

Hadji Abdula Malang, a Muslim, contracted marriage with Aida (Kenanday) Limba.

They begot three sons named Hadji Mohammad Ulyssis, Hadji Ismael Malindatu and

Datulna, and a daughter named Lawanbai. Hadji Abdula Malang was engaged in

farming, tilling the land that was Aida’s dowry (mahr or majar). Thereafter, he

bought a parcel of land in Sousa, Cotabato. Hadji Abdula and Aida already had two

children when he married for the second time another Muslim named Jubaida Kado

in Kalumamis, Talayan, Maguindanao. No child was born out of Hadji Abdula’ssecond marriage. When Aida, the first wife, was pregnant with their fourth child,

Hadji Abdula divorced her.

In 1965, Hadji Abdula married another Muslim, Nayo H. Omar but they were

childless. Thereafter, Hadji Abdula contracted marriage with Hadji Mabai (Mabay) H.

Adziz in Kalumamis, Talayan, Maguindanao and soon they had a daughter named

Fatima (Kueng). Hadji Abdula and Hadji Mabai stayed in that place to farm while

Hadji Abdula engaged in the business of buying and selling of rice, corn and other

agricultural products. Not long after, Hadji Abdula married three other Muslim

women named Saaga, Mayumbai and Sabai but he eventually divorced them.

Hadji Abdula then migrated to Tambunan where, in 1972, he married petitioner Neng

“Kagui Kadiguia” Malang, his fourth wife, excluding the wives he had divorced. They

established residence in Cotabato City but they were childless. For a living, they

relied on farming and on the business of buying and selling of agricultural products.



Hadji Abdula acquired vast tracts of land in Sousa and Talumanis, Cotabato City,

some of which were cultivated by tenants. He deposited money in such banks as

United Coconut Planters Bank, Metrobank and Philippine Commercial and Industrial

Bank.

On December 18, 1993, while he was living with petitioner in Cotabato City, HadjiAbdula died without leaving a will. On January 21, 1994, petitioner filed with the

Shari’a District Court in Cotabato City a petition for the settlement of his estate with a

prayer that letters of administration be issued in the name of her niece, Tarhata

Lauban.

Petitioner claimed in that petition that she was the wife of Hadji Abdula; that his other

legal heirs are his three children named Teng Abdula, Keto Abdula and Kueng

Malang, and that he left seven (7) parcels of land, five (5) of which are titled in Hadji

Abdula’s name “married to Neng P. Malang,” and a pick-up jeepney.

On February 7, 1994, the Shari’a District Court ordered the publication of the

petition. After such publication or on March 16, 1994, Hadji Mohammad Ulyssis

Malang (“Hadji Mohammad”, for brevity), the eldest son of Hadji Abdula, filed his

opposition to the petition. He alleged among other matters that his father’s surviving

heirs are as follows: (a) Jubaida Malang, surviving spouse; (b) Nayo Malang,

surviving spouse; (c) Mabay Malang, surviving spouse; (d) petitioner Neng Malang,

surviving spouse; (e) oppositor Hadji Mohammad Ulyssis Malang who is also known

as “Teng Abdula,” son; (f) Hadji Ismael Malindatu Malang, also known as “Keto

Abdula,” son, (g) Fatima Malang, also known as “Kueng Malang,” daughter; (h)Datulna Malang, son, and (i) Lawanbai Malang, daughter. Oppositor Hadji

Mohammad Ulyssis Malang alleged that since he and his brother, Hadji Ismael

Malindatu Malang, had helped their father in his business, then they were more

competent to be administrators of his estate.

On March 30, 1994, Jubaida Malang, Ismael Malindatu Malang, Nayo Malang,

Fatima Malang, Mabay Malang, Datulna Malang and Lawanbai Malang filed an

opposition to the petition, adopting as their own the written opposition of Hadji

Mohammad.

On April 7, 1994, the Shari’a District Court issued an Order appointing Hadji

Mohammad administrator of his father’s properties outside Cotabato City. The same

order named petitioner and Hadji Ismael Malindatu Malang as joint administrators of

the estate in Cotabato City. Each administrator was required to post a bond in the

amount of P100,000.00. On April 13, 1994, letters of administration were issued to

Hadji Mohammad after he had posted the required bond. He took his oath on the

same day.The following day, Hadji Ismael and petitioner likewise filed their

respective bonds and hence, they were allowed to take their oath as administrators.

On April 25, 1994 and May 3, 1994, petitioner filed two motions informing the courtthat Hadji Abdula had outstanding deposits with nine (9) major banks. Petitioner

prayed that the managers of each of those banks be ordered to submit a bank

statement of the outstanding deposit of Hadji Abdula. The Shari’a District Court

having granted the motions,Assistant Vice President Rockman O. Sampuha of

United Coconut Planters Bank informed the court that as of April 24, 1994, the



outstanding deposit of Hadji Abdula amounted to one million five hundred twenty

thousand four hundred pesos and forty-eight centavos (P1,520,400.48). The Senior

Manager of the Cotabato branch of Metrobank also certified that as of December 18,

1993, “Hadji Abdula Malang or Malindatu Malang” had on savings deposit the

balance of three hundred seventy-eight thousand four hundred ninety-three pesosand 32/100 centavos (P378,493.32). PCIB likewise issued a certification that Hadji

Abdula had a balance of eight hundred fifty pesos (P850.00) in his current account

as of August 11, 1994.

During the pendency of the case, petitioner suffered a congestive heart failure that

required immediate medical treatment. On May 5, 1994, she filed a motion praying

that on account of her ailment, she be allowed to withdraw from UCPB the amount of

three hundred thousand pesos (P300,000.00) that shall constitute her advance

share in the estate of Hadji Abdula. After due hearing, the Sharia District Court

allowed petitioner to withdraw the sum of two hundred fifty thousand pesos

(P250,000.00).

On May 12, 1994, the Shari’a District Court required petitioner and Hadji Ismael as

joint administrators to submit an inventory and appraisal of all properties of Hadji

Abdula. In compliance therewith, Hadji Ismael submitted an inventory showing that in

Cotabato City, Hadji Abdula had seven (7) residential lots with assessed value

ranging from P5,020.00 to P25,800.00, an agricultural land with assessed value of

P860.00, three (3) one-storey residential buildings, and one (1) two-storey residential

building. All these properties were declared for taxation purposes in Hadji Abdula’sname.

For her part, petitioner submitted an inventory showing that Hadji Abdula “married to

Neng Malang” had seven (7) residential lots with a total assessed value of

P243,840.00 in Cotabato City, an Isuzu pick-up jeepney valued at P30,000.00 and

bank deposits.

In the Memorandum that she filed with the Shari’a District Court, petitioner asserted

that all the properties located in Cotabato City, including the vehicle and bank

deposits, were conjugal properties in accordance with Article 160 of the Civil Code

and Article 116 of the Family Code while properties located outside of Cotabato City

were exclusive properties of the decedent.

On the other hand, the oppositors contended in their own Memorandum that all the

properties left by Hadji Abdula were his exclusive properties for various reasons.

First, Hadji Abdula had no conjugal partnership with petitioner because his having

contracted eight (8) marriages with different Muslim women was in violation of the

Civil Code that provided for a monogamous marriage; a conjugal partnership

presupposes a valid civil marriage, not a bigamous marriage or a common-law

relationship. Second, the decedent adopted a “complete separation of propertyregime” in his marital relations; while his wives Jubaida Kado, Nayo Hadji Omal

and Mabay Ganap Hadji Adzis contributed to the decedent’s properties, there is

no evidence that petitioner had contributed funds for the acquisition of such

properties. Third, the presumption that properties acquired during the marriage are

conjugal properties is inapplicable because at the time he acquired the properties,



the decedent was married to four (4) women. Fourth, the properties are not conjugal

in nature notwithstanding that some of these properties were titled in the name of the

decedent “married to Neng Malang” because such description is not conclusive of

the conjugal nature of the property. Furthermore, because petitioner admitted in her

verified petition that the properties belonged “to the estate of decedent,” she wasestopped from claiming, after formal offer of evidence, that the properties were

conjugal in nature just because some of the properties were titled in Hadji Abdula’s

name “married to Neng Malang.” Fifth, if it is true that the properties were conjugal

properties, then these should have been registered in the names of both petitioner

and the decedent.

In its Order of September 26, 1994, the Shari’a District Court presided by Judge

Corocoy D. Moson held that there was no conjugal partnership of gains between

petitioner and the decedent primarily because the latter married eight times. The

Civil Code provision on conjugal partnership cannot be applied if there is more than

one wife because “conjugal partnership presupposes a valid civil marriage, not a

plural marriage or a common-law relationship.” The court further found that the

decedent was “the chief, if not the sole, breadwinner of his families” and that

petitioner did not contribute to the properties unlike the other wives named Jubaida,

Nayo and Mabay. The description “married to Neng Malang” in the titles to the real

properties is no more than that –-- the description of the relationship between

petitioner and the decedent. Such description is insufficient to prove that the

properties belong to the conjugal partnership of gains. The court stated:In the instant case, decedent had four (4) wives at the time he acquired the

properties in question. To sustain the contention of the petitioner that the properties

are her conjugal property with the decedent is doing violence to the provisions of the

Civil Code. Be it noted that at the time of the marriage of the petitioner with the

decedent, there were already three (3) existing marriages. Assuming for the

moment that petitioner and the decedent had agreed that the property regime

between them will be governed by the regime of conjugal partnership property, that

agreement is null and void for it is against the law, public policy, public order, good

moral(s) and customs.

Under Islamic law, the regime of property relationship is complete separation of

property, in the absence of any stipulation to the contrary in the marriage settlements

or any other contract (Article 38, P.D. 1083). There being no evidence of such

contrary stipulation or contract, this Court concludes as it had begun, that the

properties in question, both real and personal, are not conjugal, but rather, exclusive

property of the decedent.

Thus, the Shari’a District Court held that the Islamic law should be applied in the

distribution of the estate of Hadji Abdula and accordingly disposed of the case asfollows:

WHEREFORE, premises considered, the Court orders the following:

1) That the estate shall pay the corresponding estate tax, reimburse the funeral

expenses in the amount of P50,000.00, and the judicial expenses in the amount of

P2,040.80;



2) That the net estate, consisting of real and personal properties, located in Talayan,

Maguindanao and in Cotabato City, is hereby ordered to be distributed and

adjudicated as follows:

a) Jubaida Kado Malang ------------------------- 2/64 of the estate

b) Nayo Omar Malang ------------------------- 2/64 - do -c) Mabai Aziz Malang ------------------------- 2/64 - do -

d) Neng “Kagui Kadiguia” Malang ------------------- 2/64 - do -

e) Mohammad Ulyssis Malang-------------------------14/64 - do -

f) Ismael Malindatu Malang---------------------------14/64 - do -

g) Datulna Malang ------------------------- 14/64 - do -

h) Lawanbai Malang ------------------------- 7/64 - do -

i) Fatima (Kueng) Malang ------------------------- 7/64 - do -

Total------------------------ 64/64

3) That the amount of P250,000.00 given to Neng “Kagui Kadiguia” Malang by way

of advance be charged against her share and if her share is not sufficient, to return

the excess; and

4) That the heirs are hereby ordered to submit to this court their Project of Partition

for approval, not later than three (3) months from receipt of this order.

SO ORDERED.

On October 4, 1994, petitioner filed a motion for the reconsideration of that Order.

The oppositors objected to that motion. On January 10, 1995, the Shari’a District

Court denied petitioner’s motion for reconsideration. Unsatisfied, petitioner filed anotice of appeal. However, on January 19, 1995, she filed a manifestation

withdrawing the notice of appeal on the strength of the following provisions of P.D.

No. 1083:

Art. 145.Finality of Decisions – The decisions of the Shari’a District Courts whether

on appeal from the Shari’a Circuit Court or not shall be final. Nothing herein

contained shall affect the original and appellate jurisdiction of the Supreme Court as

provided in the Constitution.

Petitioner accordingly informed the court that she would be filing “an original action

ofcertiorari with the Supreme Court.”

On March 1, 1995, petitioner filed the instant petition forcertiorari with preliminary

injunction and/or restraining order. She contends that the Shari’a District Court

gravely erred in: (a) ruling that when she married Hadji Abdula Malang, the latter

had three existing marriages with Jubaida Kado Malang, Nayo Omar Malang and

Mabay Ganap Malang and therefore the properties acquired during her marriage

could not be considered conjugal, and (b) holding that said properties are not

conjugal because under Islamic Law, the regime of relationship is complete

separation of property, in the absence of stipulation to the contrary in the marriagesettlement or any other contract.

As petitioner sees it, “the law applicable on issues of marriage and property regime

is the New Civil Code”, under which all property of the marriage is presumed to

belong to the conjugal partnership. The Shari’a Court, meanwhile, viewed the Civil

Code provisions on conjugal partnership as incompatible with plural marriage, which



is permitted under Muslim law, and held the applicable property regime to be

complete separation of property under P.D. 1083.

Owing to the complexity of the issue presented, and the fact that the case is one of

first impression --- this is a singular situation where the issue on what law governs

the property regime of a Muslim marriage celebrated prior to the passage of theMuslim Code has been elevated from a Shari’a court for the Court’s resolution --- the

Court decided to solicit the opinions of twoamici curiae, Justice Ricardo C.

Puno and former Congressman Michael O. Mastura.The Court extends its warmest

thanks to theamici curiae for their valuable inputs in their written memoranda and in

the hearing of June 27, 2000.

Resolution of the instant case is made more difficult by the fact that very few of the

pertinent dates of birth, death, marriage and divorce are established by the record.

This is because, traditionally, Muslims do not register acts, events or judicial decrees

affecting civil status. It also explains why the evidence in the instant case consisted

substantially of oral testimonies.

What is not disputed is that: Hadji Abdula contracted a total of eight marriages,

counting the three which terminated in divorce; all eight marriages were celebrated

during the effectivity of the Civil Code and before the enactment of the Muslim Code;

Hadji Abdula divorced four wives --- namely, Aida, Saaga, Mayumbai and Sabai ---

all divorces of which took place before the enactment of the Muslim Code; and, Hadji

Abdula died on December 18, 1993, after the Muslim Code and Family Code took

effect, survived by four wives (Jubaida, Nayo, Mabay and Neng) and five children,four of whom he begot with Aida and one with Mabay. It is also clear that the

following laws were in force, at some point or other, during the marriages of Hadji

Abdula: the Civil Code, which took effect on August 30, 1950; Republic Act No. 394

(“R.A. 394”), authorizing Muslim divorces, which was effective from June 18, 1949 to

June 13, 1969; the Muslim Code, which took effect February 4, 1977; and the Family

Code, effective August 3, 1988.

Proceeding upon the foregoing, the Court has concluded that the record of the case

is simply inadequate for purposes of arriving at a fair and complete resolution of the

petition. To our mind, any attempt at this point to dispense with the basic issue given

the scantiness of the evidence before us could result in grave injustice to the parties

in this case, as well as cast profound implications on Muslim families similarly or

analogously situated to the parties herein. Justice and accountability dictate a

remand; trial must reopen in order to supply the factual gaps or, in Congressman

Mastura’s words, “missing links”, that would be the bases for judgment and

accordingly, allow respondent court to resolve the instant case. In ordering thus,

however, we take it as an imperative on our part to set out certain guidelines in the

interpretation and application of pertinent laws to facilitate the task of respondentcourt.

It will also be recalled that the main issue presented by the petition --- concerning the

property regime applicable to two Muslims married prior to the effectivity of the

Muslim Code --- was interposed in relation to the settlement of the estate of the

deceased husband. Settlement of estates of Muslims whose civil acts predate the



enactment of the Muslim Code may easily result in the application of the Civil Code

and other personal laws, thus convincing the Court that it is but propitious to go

beyond the issue squarely presented and identify such collateral issues as are

required to be resolved in a settlement of estate case. Asamicus

curiae Congressman Mastura puts it, the Court does not often come by a case asthe one herein, and jurisprudence will be greatly enriched by a discussion of the

“watershed of collateral issues” that this case presents.

The Court has identified the following collateral issues, which we hereby present in

question form: (1) What law governs the validity of a Muslim marriage celebrated

under Muslim rites before the effectivity of the Muslim Code? (2) Are multiple

marriages celebrated before the effectivity of the Muslim Code valid? (3) How do the

Court’s pronouncements inPeople vs. Subano,73 Phil. 692 (1942), andPeople vs.

Dumpo,62 Phil. 246 (1935), affect Muslim marriages celebrated before the

effectivity of the Muslim Code? (4) What laws govern the property relationship of

Muslim multiple marriages celebrated before the Muslim Code? (5) What

law governs the succession to the estate of a Muslim who died after the Muslim

Code and the Family Code took effect? (6) What laws apply to the dissolution of

property regimes in the cases of multiple marriages entered into before the Muslim

Code but dissolved (by the husband’s death) after the effectivity of the Muslim

Code? and (7) Are Muslim divorces effected before the enactment of the Muslim

Code valid?

The succeeding guidelines, which derive mainly from the Compliance ofamicuscuriae Justice Puno, are hereby laid down by the Court for the reference of

respondent court, and for the direction of the bench and bar:First Collateral Issue: The Law(s) Governing Validity of Muslim Marriages Celebrated Before the Muslim Code

The time frame in which all eight marriages of Hadji Abdula were celebrated was

during the effectivity of the Civil Code which, accordingly, governs the marriages.

Article 78 of the Civil Code recognized the right of Muslims to contract marriage in

accordance with their customs and rites, by providing that ---

Marriages between Mohammedans or pagans who live in the non-Christian

provinces may be performed in accordance with their customs, rites or practices. No

marriage license or formal requisites shall be necessary. Nor shall the persons

solemnizing these marriages be obliged to comply with article 92.

However, thirty years after the approval of this Code, all marriages performed

between Muslims or other non-Christians shall be solemnized in accordance with the

provisions of this Code. But the President of the Philippines, upon recommendation

of the Commissioner of National Integration, may at any time before the expiration of

said period, by proclamation, make any of said provisions applicable to the Muslims

and non-Christian inhabitants of any of the non-Christian provinces.Notably, before the expiration of the thirty-year period after which Muslims are

enjoined to solemnize their marriages in accordance with the Civil Code, P.D. 1083

or the Muslim Code was passed into law. The enactment of the Muslim Code on

February 4, 1977 rendered nugatory the second paragraph of Article 78 of the Civil



Code which provides that marriages between Muslims thirty years after the approval

of the Civil Code shall be solemnized in accordance with said Code.Second and Third Collateral Issues: The Validity of Muslim Multiple Marriages Celebrated Before the Muslim Code; The Effect of People vs.

Subanoand People vs. Dumpo

Prior to the enactment of P.D. 1083, there was no law in this jurisdiction whichsanctioned multiple marriages. It is also not to be disputed that the only law in force

governing marriage relations between Muslims and non-Muslims alike was the Civil

Code of 1950.

The Muslim Code, which is the first comprehensive codification of Muslim personal

laws, also provides in respect of acts that transpired prior to its enactment:

Art. 186.Effect of code on past acts. --- (1) Acts executed prior to the effectivity of

this Code shall be governed by the laws in force at the time of their execution, and

nothing herein except as otherwise specifically provided, shall affect their validity or

legality or operate to extinguish any right acquired or liability incurred thereby.

The foregoing provisions are consistent with the principle that all laws operate

prospectively, unless the contrary appears or is clearly, plainly and unequivocably

expressed or necessarily implied; accordingly, every case of doubt will be resolved

against the retroactive opertion of laws. Article 186 aforecited enunciates the general

rule of the Muslim Code to have its provisions applied prospectively, and implicitly

upholds the force and effect of a pre-existing body of law, specifically, the Civil Code

--- in respect of civil acts that took place before the Muslim Code’s enactment.

Admittedly, an apparent antagonism arises when we consider that what theprovisions of the Civil Code contemplate and nurture is a monogamous marriage.

“Bigamous or polygamous marriages” are considered void and inexistent from the

time of their performance. The Family Code which superseded the Civil Code

provisions on marriage emphasizes that a subsequent marriage celebrated before

the registration of the judgment declaring a prior marriage void shall likewise be

void. These provisions illustrate that the marital relation perceived by the Civil Code

is one that is monogamous, and that subsequent marriages entered into by a person

with others while the first one is subsisting is by no means countenanced.

Thus, when the validity of Muslim plural marriages celebrated before the enactment

of the Muslim Code was touched upon in two criminal cases, the Court applied the

perspective in the Civil Code that only one valid marriage can exist at any given

time.

InPeople vs. Subano,supra, the Court convicted the accused of homicide, not

parricide, since ---

(f)rom the testimony of Ebol Subano, father of the deceased, it appears that the

defendant has three wives and that the deceased was the last in point of time.

Although the practice of polygamy is approved by custom among these non-Christians, polygamy, however, is not sanctioned by the Marriage Law, which merely

recognizes tribal marriage rituals. The deceased, under our law, is not thus the

lawful wife of the defendant and this precludes conviction for the crime of parricide.

InPeople vs. Dumpo,supra, Mora Dumpo was prosecuted for bigamy when, legally

married to Moro Hassan, she allegedly contracted a second marriage with Moro



Sabdapal. The Court acquitted her on the ground that it was not duly proved that

the alleged second marriage had all the essential requisites to make it valid were it

not for the subsistence of the first marriage. As it appears that the consent of the

bride’s father is an indispensable requisite to the validity of a Muslim marriage, and

as Mora Dumpo’s father categorically affirmed that he did not give his consent to herunion with Moro Sabdapal, the Court held that such union could not be a marriage

otherwise valid were it not for the existence of the first one, and resolved to acquit

her of the charge of bigamy.

The ruling inDumpo indicates that, had it been proven as a fact that the second

marriage contained all the essential requisites to make it valid, a conviction for

bigamy would have prospered.Fourth Collateral Issue: Law(s) Governing Property Relations of Muslim Marriages Celebrated Before the Muslim Code

This is the main issue presented by the instant petition. In keeping with our holding

that the validity of the marriages in the instant case is determined by the Civil Code,

we hold that it is the same Code that determines and governs the property relations

of the marriages in this case, for the reason that at the time of the celebration of the

marriages in question the Civil Code was the only law on marriage relations,

including property relations between spouses, whether Muslim or non-Muslim.

Inasmuch as the Family Code makes substantial amendments to the Civil Code

provisions on property relations, some of its provisions are also material, particularly

to property acquired from and after August 3, 1988.

Which law would govern depends upon: (1) when the marriages took place; (2)whether the parties lived together as husband and wife; and (3) when and how the

subject properties were acquired.

Following are the pertinent provisions of the Civil Code:

Art. 119. The future spouses may in the marriage settlements agree upon absolute

or relative community of property, or upon complete separation of property, or upon

any other regime. In the absence of marriage settlements, or when the same are

void, the system of relative community or conjugal partnership of gains as

established in this Code shall govern the property relations between husband and

wife.

Art. 135. All property brought by the wife to the marriage, as well as all property she

acquires during the marriage, in accordance with article 148, is paraphernal.

Art. 136. The wife retains the ownership of the paraphernal property.

Art. 142. By means of the conjugal partnership of gains the husband and wife place

in a common fund the fruits of their separate property and the income from their

work or industry, and divide equally, upon the dissolution of the marriage or of the

partnership, the net gains or benefits obtained indiscriminately by either spouse

during the marriage.Art. 143. All property of the conjugal partnership of gains is owned in common by

the husband and wife.

The Civil Code also provides in Article 144:

When a man and a woman live together as husband and wife, but they are not

married, or their marriage is void from the beginning, the property acquired by either



or both of them through their work or industry or their wages and salaries shall be

governed by the rules on co-ownership.

In a long line of cases, this Court has interpreted the co-ownership provided in

Article 144 of the Civil Code to require that the man and woman living together as

husband and wife without the benefit of marriage or under a void marriage must notin any way be incapacitated to marry. Situating these rulings to the instant case,

therefore, the co-ownership contemplated in Article 144 of the Civil Code cannot

apply to Hadji Abdula’s marriages celebrated subsequent to a valid and legally

existing marriage, since from the point of view of the Civil Code Hadji Abdula is not

capacitated to marry. However, the wives in such marriages are not precluded from

proving that property acquired during their cohabitation with Hadji Abdula is

theirexclusive property, respectively. Absent such proof, however, the presumption is

that property acquired during the subsistence of a valid marriage --- and in the Civil

Code, there can only be one validly existing marriage at any given time --- is

conjugal property of such subsisting marriage.

With the effectivity of the Family Code on August 3, 1988, the following provisions of

the said Code are pertinent:

Art. 147. When a man and a woman who are capacitated to marry each other live

exclusively with each other as husband and wife without the benefit of marriage or

under a void marriage, their wages and salaries shall be owned by them in equal

shares and the property acquired by both of them through their work or industry shall

be governed by the rules on co-ownership.In the absence of proof to the contrary, properties acquired while they lived together

shall be presumed to have been obtained by their joint efforts, work or industry, and

shall be owned by them in equal shares. For purposes of this Article, a party who

did not participate in the acquisition of the other party of any property shall be

deemed to have contributed jointly in the acquisition thereof if the former’s efforts

consisted in the care and maintenance of the family and of the household.

Neither party can encumber or dispose by actsinter vivos of his or her share in the

property acquired during cohabitation and owned in common, without the consent of

the other, until after the termination of the cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the

party in bad faith in the co-ownership shall be forfeited in favor of their common

children. In case of default or of waiver by any or all of the common children or their

descendants, each vacant share shall belong to the respective surviving

descendants. In the absence of descendants, such share shall belong to the

innocent party. In all cases, the forfeiture shall take place upon termination of the

cohabitation.

Art. 148. In cases of cohabitation not falling under the preceding Article, only theproperties acquired by both of the parties through their actual joint contribution of

money, property, or industry shall be owned by them in common in proportion to their

respective contributions. In the absence of proof to the contrary, their contributions

and corresponding shares are presumed to be equal. The same rule and

presumption shall apply to joint deposits of money and evidences of credit.



If one of the parties is validly married to another, his or her share in the co-ownership

shall accrue to the absolute community or conjugal partnership existing in such valid

marriage. If the party who acted in bad faith is not validly married to another, his or

her share shall be forfeited in the manner provided in the last paragraph of the

preceding Article.The foregoing rules on forfeiture shall likewise apply even if both parties are in bad

faith.

It will be noted that while the Civil Code merely requires that the parties “live together

as husband and wife” the Family Code in Article 147 specifies that they

“liveexclusivelywith each other as husband and wife.” Also, in contrast to Article

144 of the Civil Code as interpreted by jurisprudence, Article 148 of the Family Code

allows for co-ownership in cases of cohabitation where, for instance, one party has a

pre-existing valid marriage, provided that the parties prove their “actual joint

contribution of money, property, or industry” and only to the extent of their

proportionate interest therein. The rulings in Juaniza vs. Jose, 89 SCRA

306, Camporodendo vs. Garcia, 102 Phil. 1055, and related cases are embodied in

the second paragraph of Article 148, which declares that the share of the party

validly married to another shall accrue to the property regime of such existing

marriage.Fifth and Sixth Collateral Issues: Law(s) on Succession and Dissolution of Property Regimes

Hadji Abdula died intestate on December 16, 1993. Thus, it is the Muslim Code

which should determine the identification of the heirs in theorder of intestate succession and the respective shares of the heirs.

Meanwhile, the status and capacity to succeed on the part of the individual parties

who entered into each and every marriage ceremony will depend upon the law in

forceat the time of the performance of the marriage rite.

The status and capacity to succeed of the children will depend upon the law in

forceat the time of conception or birthof the child. If the child was conceived or born

during the period covered by the governance of the Civil Code, the Civil Code

provisions on the determination of the legitimacy or illegitimacy of the child would

appear to be in point. Thus, the Civil Code provides:

Art. 255. Children born after one hundred and eighty days following the celebration

of the marriage, and before three hundred days following its dissolution or the

separation of the spouses shall be presumed to be legitimate.

Against this presumption no evidence shall be admitted other than that of the

physical impossibility of the husband’s having access to his wife within the first one

hundred and twenty days of the three hundred which preceded the birth of the child.

This physical impossibility may be caused:

(1) By the impotence of the husband;(2) By the fact that the husband and wife were living separately, in such a way that

access was not possible;

(3) By the serious illness of the husband.

Art. 256. The child shall be presumed legitimate, although the mother may have

declared against its legitimacy or may have been sentenced as an adulteress.



If the child was conceived or born during the period covered by the governance of

the Muslim Code,i.e., from February 4, 1977 up to the death of Hadji Abdula on

December 18, 1993, the Muslim Code determines the legitimacy or illegitimacy of

the child. Under the Muslim Code:

Art. 58.Legitimacy, how established.--- Legitimacy of filiation is established by theevidence of valid marriage between the father and the mother at the time of the

conception of the child.

Art. 59.Legitimate children.---

(1) Children conceived in lawful wedlock shall be presumed to be legitimate.

Whoever claims illegitimacy of or impugns such filiation must prove his allegation.

(2) Children born after six months following the consummation of marriage or within

two years after the dissolution of the marriage shall be presumed to be legitimate.

Against this presumption no evidence shall be admitted other than that of physical

impossibility of access between the parents at or about the time of the conception of

the child.

Art. 60.Children of subsequent marriage.--- Should the marriage be dissolved and

the wife contracts another marriage after the expiration of her‘idda, the child born

within six months from the dissolution of the prior marriage shall be presumed to

have been conceived during the former marriage, and if born thereafter, during the

latter.

Art. 61.Pregnancy after dissolution.--- If, after the dissolution of marriage, the wife

believes that she is pregnant by her former husband, she shall, within thirty daysfrom the time she became aware of her pregnancy, notify the former husband or his

heirs of that fact. The husband or his heirs may ask the court to take measures to

prevent a simulation of birth.

Upon determination of status and capacity to succeed based on the foregoing

provisions, the provisions on legalsuccession in the Muslim Code will apply. Under

Article 110 of the said Code, the sharers to an inheritance include:

(a) The husband, the wife;

(b) The father, the mother, the grandfather, the grandmother;

(c) The daughter and the son’s daughter in the direct line;

(d) The full sister, the consanguine sister, the uterine sister and the uterine brother.

When the wife survives with a legitimate child or a child of the decedent’s son, she is

entitled to one-eighth of the hereditary estate; in the absence of such descendants,

she shall inherit one-fourth of the estate. The respective shares of the other sharers,

as set out in Article 110 abovecited, are provided for in Articles 113 to 122 of P.D.

1083.Seventh Collateral Issue: Muslim Divorces Before the Effectivity of the Muslim Code

R.A. 394 authorized absolute divorce among Muslims residing in non-Christianprovinces, in accordance with Muslim custom, for a period of 20 years from June 18,

1949 (the date of approval of R.A. 394) to June 13, 1969. Thus, a Muslim divorce

under R.A. 394 is valid if it took place from June 18, 1949 to June 13, 1969.



From the seven collateral issues that we discussed, we identify four corollary issues

as to further situate the points of controversy in the instant case for the guidance of

the lower court. Thus:

1.Which of the several marriages was validly and legally existing at the time of the

opening of the succession of Hadji Abdula when he died in 1993? The validly andlegally existing marriage would be that marriage which was celebrated at a time

when there was no other subsisting marriage standing undissolved by a valid divorce

or by death. This is because all of the marriages were celebrated during the

governance of the Civil Code, under the rules of which only one marriage can exist

at any given time.

Whether or not the marriage was validly dissolved by a Muslim divorce depends

upon the time frame and the applicable law. A Muslim divorce under R.A. No. 394 is

valid if it took place from June 18, 1949 to June 13, 1969, and void if it took place

from June 14, 1969.

2.There being a dispute between the petitioner and the oppositors as regards the

heirship of the children begotten from different marriages, who among the surviving

children are legitimate and who are illegitimate? The children conceived and born of

a validly existing marriage as determined by the first corollary issue are legitimate.

The fact and time of conception or birth may be determined

by proof or presumption depending upon the time frame and the applicable law.

3.What properties constituted the estate of Hadji Abdula at the time of his death on

December 18, 1993? The estate of Hadji Abdula consists of the following:a. Properties acquired during the existence of a valid marriage as determined by the

first corollary issue are conjugal properties and should be liquidated and divided

between the spouses under the Muslim Code, this being the law in force at the time

of Hadji Abdula’s death.

b. Properties acquired under the conditions prescribed in Article 144 of the Civil

Code during the period August 30, 1950 to August 2, 1988 are conjugal properties

and should be liquidated and divided between the spouses under the Muslim Code.

However, the wives other than the lawful wife as determined under the first corollary

issue may submit their respective evidence to prove that any of such property is

theirs exclusively.

c. Properties acquired under the conditions set out in Articles 147 and 148 of the

Family Code during the period from and after August 3, 1988 are governed by the

rules on co-ownership.

d. Properties acquired under conditions not covered by the preceding paragraphs

and obtained from the exclusive efforts or assets of Hadji Abdula are his exclusive

properties.

4.Who are the legal heirs of Hadji Abdula, and what are their shares in intestacy? The following are Hadji Abdula’s legal heirs: (a) the lawful wife, as determined under

the first corollary issue, and (2) the children, as determined under the second

corollary issue. The Muslim Code, which was already in force at the time of Hadji

Abdula’s death, will govern the determination of their respective shares.



As we have indicated early on, the evidence in this case is inadequate to resolve in

its entirety the main, collateral and corollary issues herein presented and a remand

to the lower court is in order. Accordingly, evidence should be received to supply the

following proofs: (1) the exact dates of the marriages performed in accordance with

Muslim rites or practices; (2) the exact dates of the dissolutions of the marriagesterminated by death or by divorce in accordance with Muslim rites and practices,

thus indicating which marriage resulted in a conjugal partnership under the criteria

prescribed by the first, second, and third collateral issues and the first corollary

issue; (3) the exact periods of actual cohabitation (“common life” under a “common

roof”) of each of the marriages during which time the parties lived together; (4) the

identification of specific properties acquired during each of the periods of

cohabitation referred to in paragraph 3 above, and the manner and source of

acquisition, indicating joint or individual effort, thus showing the asset as owned

separately, conjugally or in co-ownership; and (5) the identities of the children

(legitimate or illegitimate) begotten from the several unions, the dates of their

respective conceptions or births in relation to paragraphs 1 and 2 above, thereby

indicating their status as lawful heirs.

Amicus curiae Congressman Mastura agrees that since the marriage of petitioner to

decedent took place in 1972 the Civil Code is the law applicable on the issue of

marriage settlement, but espouses that customs or established practices among

Muslims in Mindanao must also be applied with the force of law to the instant

case.Congressman Mastura’s disquisition has proven extremely helpful inimpressing upon us the background in which Islamic law and the Muslim Code need

to be interpreted, particularly the interconnectedness of law and religion for

Muslims and the impracticability of a strict application of the Civil Code to plural

marriages recognized under Muslim law. Regrettably, the Court is duty-bound to

resolve the instant case applying such laws and rights as are in existence at the time

the pertinent civil acts took place. Corollarily, we are unable to supplant governing

law with customs, albeit how widely observed. In the same manner, we cannot

supply a perceived hiatus in P.D. 1083 concerning the distribution of property

between divorced spouses upon one of the spouses’ death.$/

WHEREFORE, the decision dated September 26, 1994 of the Fifth Shari’a District

Court of Cotabato City in Special Proceeding No. 94-40 is SET ASIDE, and the

instant petition is REMANDED for the reception of additional evidence and the

resolution of the issues of the case based on the guidelines set out in this Decision.

SO ORDERED.

recto lawEN BANC

G.R. No. L-25951 June 30, 1969

FILIPINAS INVESTMENT & FINANCE CORPORATION, plaintiff-appellant,

vs.

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http://civillawabc.blogspot.com/2014/10/recto-law.html

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JULIAN R. VITUG, JR. and SUPREME SALES & DEVELOPMENT

CORPORATION, defendants-appellees.

Wilhelmina V. Joven for plaintiff-appellant.

Antonio V. Borromeo for defendants-appellants.

BARREDO,J.:

Appeal from an order of dismissal by the Court of First Instance of Manila, in its Civil

Case No. 60915, entitled Filipinas Investment & Finance Corporation vs. Julian R.

Vitug, Jr. and Supreme Sales & Development Corporation, of the amended

complaint of July 16, 1965 of plaintiff-appellant Filipinas Investment & Finance

Corporation whereby it sought to recover from defendant-appellee Supreme Sales &

Development Corporation the deficiency that resulted after it had foreclosed the

chattel mortgage on and sold at public auction, the car of the other defendant, Julian

Vitug, Jr. who had failed to pay to appellee installments due on the promissory note

representing the purchase price of said car which he had bought from the same,

appellant being the assignee of appellee of its rights in the said promissory note.

The material allegations in appellant's amended complaint are:

The defendant, Julian R. Vitug, executed and delivered to appellee a promissory

note in the amount of P14,605.00 payable in monthly installments according to a

schedule of payments; the payment of the aforesaid amount which was the purchase

price of a motor vehicle, a 4-door Consul sedan, bought by said defendant from

appellee, was secured by a chattel mortgage over such automobile; on the same

day, appellee negotiated the above-mentioned promissory note in favor of appellant

Filipinas Investment & Finance Corporation, assigning thereto all its rights, title and

interests to the same,the assignment including the right of recourse against

appellee; defendant Vitug defaulted in the payment of part of the installment whichfell due on January 6, 1965, as well as the subsequent three consecutive monthly

installments which he was supposed to have paid on February 6, March 6 and April

6, 1965; there being a provision in the aforesaid promissory note and chattel

mortgage that failure to pay the installments due would result in the entire obligation

becoming due and demandable, appellant demanded from appellee the payment of

such outstanding balance; in turn, appellee "authorized (appellant) to take such

action as may be necessary to enable (it) to take possession of the ... motor

vehicle." Pursuant to such authority, appellant secured possession of the mortgaged

vehicle by means of a writ of replevin duly obtained from the court, preparatory to

the foreclosure of the mortgage, but said writ became unnecessary because upon

learning of the same, defendant Vitug voluntarily surrendered the car to appellant;

thereafter, the said car was sold at public auction, but the proceeds still left a



deficiency of P8,349.35, plus interest of 12% per annum from April 21, 1965; and

appellant, the above foreclosure and sale notwithstanding, would hold appellee liable

for the payment of such outstanding balance, plus attorney's fees and costs.

On August 4, 1965, appellee filed an urgent motion to dismiss on the ground, inter

alia, that under Article 1484 of the Civil Code of the Philippines, which particular

provision is otherwise known as the Recto Law, appellant has no cause of action

against appellee. Said provision is as follows:

ART. 1484. In a contract of sale of personal property the price of which is

payable in installments, the vendor may exercise any of the following

remedies: (1) Exact fulfillment of the obligation should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more

installments; (3) Foreclose the chattel mortgage on the thing sold, if one has

been constituted, should the vendee's failure to pay cover two or more

installments. In this case, he shall have no further action against the

purchaser to recover any unpaid balance of the price. Any agreement to the

contrary shall be void.

In its order of August 30, 1965, subject of this appeal, the lower court found the

aforesaid ground to be meritorious and, as already stated, the amended complaint

was dismissed as to appellee Supreme Sales & Development Corporation.

According to the order of dismissal:

It is undisputed in the instant case that the amount of P14,605.00 mentioned

as consideration in both the promissory note and the chattel mortgage in the

instant case represents the selling price of one (1) automobile New Ford

Consul 315 4-door Sedan, payable in the installments mentioned in said

documents. Under pars. 5 and 9 of the amended complaint, the writ of

replevin was obtained in the instant case for purposes of foreclosure of

mortgage. In applying for a writ of replevin, the plaintiff thereby made his

choice, namely, to foreclose the mortgage covering said automobile; and

having accepted said automobile from defendant Julian R. Vitug, Jr., what

remains is for the plaintiff to sell said automobile through either a judicial or an

extrajudicial foreclosure of said mortgage, without benefit of a deficiency

judgment or deficiency collection ... should the proceeds of the foreclosuresale be less than the balance of the installment sale price of said automobile

due and collectible.

On September 23, 1965, appellant filed a motion for reconsideration but this was

denied on October 26, 1965, hence, this appeal.



The principal error assigned by appellant has reference to the applicability of Art.

1484 of the Civil Code, as amended, to the facts of this case. Appellant maintains

that: .

II

THE TRIAL COURT ERRED IN HOLDING THAT ARTICLE 1484 OF THE

CIVIL CODE OF THE PHILIPPINES IS APPLICABLE TO THE

TRANSACTION BETWEEN PLAINTIFF-APPELLANT AND DEFENDANT-

APPELLEE.

Under the facts alleged in the amended complaint which are deemed admitted by

the motion to dismiss,1this assignment of error must be sustained.

The specific allegations in the amended complaint which have material bearing on

the issue herein are:

4. On November 4, 1964, defendant Supreme Sales & Development

Corporation, with notice to defendant Julian R. Vitug, Jr. negotiated in favor of

(endorsed and delivered to) plaintiff the above-mentioned promissory note,

Annex "A", on a with recourse basis whereby in case of the failure and/or

refusal of the maker thereof, defendant Julian R. Vitug, Jr. to pay the

obligation under the said promissory note, plaintiff shall have the right to

recourse against the said defendant corporation.

On the same date, the said defendant corporation, with notice to

defendant Julian R. Vitug, Jr., assigned to plaintiff its rights, title, and interests

to the aforesaid promissory note and chattel mortgage, Annexes "A" and "B"

hereof, as shown by the Deed of Assignment executed by defendant Supreme

Sales & Development Corporation in favor of plaintiff, a copy of which is

hereto attached as Annex "C" and made an integral part hereof,which

assignment is also subject to the right of recourse above-mentioned.

13.The defendant corporation is liable to plaintiff for the entire balance of the

obligation covered by the promissory note, Annex "A", and secured by the

chattel mortgage, Annex "B", as a general endorser of the promissory note,

Annex "A", and assignor of the chattel mortgage on a with- recourse basis.

But should plaintiff be able to sell the above-described motor vehicle, then the

said defendant corporation is liable to the plaintiff for the payment of the

balance of the obligation after applying thereto the proceeds of the sale of the

said vehicle. (Record on Appeal, pp. 12 and 15.)



Thus it can be seen that the assignment made by appellee to appellant of the

promissory note and mortgage of defendant Vitug was on a with-recourse basis. In

other words, there was a definite and clear agreement between appellant and

appellee that should appellant fail to secure full recovery from defendant Vitug, the

right was reserved to appellant to seek recourse for the deficiency against appellee.

Accordingly, the question for resolution by the Court now is whether or not this

provision regarding recourse contained in the agreement between appellant and

appellee violates the Recto Law which declares null and void any agreement in

contravention thereof. We do not believe that it does.

As pointed out in appellant's brief, the transaction between appellant and appellee

was purely an ordinary discounting transaction whereby the promissory note

executed by defendant Vitug was negotiated by appellee in favor of appellant for a

valuable consideration at a certain discount, accompanied by an assignment also of

the chattel mortgage executed by said defendant to secure the payment of his

promissory note and with the express stipulation that should there be any deficiency,

recourse could be had against appellee. Stated otherwise, the remedy presently

being sought is not against the buyer of the car or the defendant Vitug but against

the seller, independent of whether or not such seller may have a right of recovery

against the buyer, which, in this case, he does not have under the Recto Law. It is

clear to Us, on the other hand, that under said law, what Congress seeks to protect

are only the buyers on installment who more often than not have been victimized by

sellers who, before the enactment of this law, succeeded in unjustly enriching

themselves at the expense of the buyers because aside from recovering the goods

sold, upon default of the buyer in the payment of two installments, still retained for

themselves all amounts already paid, in addition, furthermore, to other damages,

such as attorney's fees, and costs. Surely, Congress could not have intended toimpair and much less do away with the right of the seller to make commercial use of

his credit against the buyer, provided said buyer is not burdened beyond what this

law allows.1awphil.nêt

We are not unmindful that in the case of Cruz, et al. vs. the same Filipinas

Investment & Finance Corporation, L-24772, May 27, 1968, 23 SCRA 791, this Court

broadened the scope of the Recto Law beyond its letter and held that within its spirit,

a seller of goods on installment does not have any right of action against a thirdparty who, in addition to the buyer's mortgage of the goods sold, furnishes additional

security for the payment of said installments or the purchase price of said goods. In

that case, it was held:.



Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Sanchez, Castro, Capistrano

and Teehankee, JJ., concur.

Dizon and Fernando, JJ., took no part.

Footnotes

1Evidence seems to have been presented by appellee and admitted by the

trial court in connection with the motion to dismiss. While it is obvious that

said evidence is relevant, the same cannot be taken into account, since the

motion to dismiss is based on the ground that the amended complaint states

no cause of action and, therefore, all material facts alleged in the complaint

must be deemed admitted for purposes of said motion.

hidden defects

FIRST DIVISION

[ G.R. No. L-30965, November 29, 1983 ]

G.A. MACHINERIES, INC., PETITIONER, VS. HORACIO

YAPTINCHAY, DOING BUSINESS UNDER THE NAME AND

STYLE "HI-WAY EXPRESS" AND THE COURT OF APPEALS,

RESPONDENTS.

D E C I S I O N

GUTIERREZ, JR., J.:

Petitioner G. A. Machineries, Inc. (hereinafter referred to as GAMI) seeks the

reversal of the decision of the Court of First Instance of Rizal, affirmed by the Court

of Appeals in the original case entitled Horacio Yaptinchay , doing business under the

name and style "Hi-way Express", v. G. A. Machineries Inc. for recovery of damages.

The antecedent facts of the case are not seriously disputed and are summarized bythe Court of Appeals as follows:

"Sometime early in January, 1962 appellant GAMI, thru a duly authorized agent,

offered to sell a brand-new Fordson Diesel Engine to appellee Horacio Yaptinchay,

owner of the freight hauling business styled 'Hi-Way Express'. Relying on the

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http://civillawabc.blogspot.com/2014/09/hidden-defects_30.html



representations of appellant's representative that the engine offered for sale was

brand-new, appellee agreed to purchase the same at the price of

P7,590.00. Pursuant to the contract of sale thus entered into, appellant delivered

to appellee, on January 27, 1962, one (1) FordsonDiesel Engine assembly, Model 6-

D, with Engine Serial No. A-212193, at 1500 RPM, with fly wheel, fly wheel housing,

fuel injection assembly, exhauster, fuel filter, oil filter, fuel lift pump, plus conversion

kit for F-500, subject to the standard warranties, particularly the representation,

relied upon by appellee, that the same was brand-new. Said engine was installed by

appellant in Unit No. 6 of the Hi-Way Express.

"Within the week after its delivery, however, the engine in question started to have a

series of malfunctions which necessitated successive trips to appellant's repair

shop. Thus, it first sprang an oil leak such that, on February 6, 1962, it was brought

in to '1. Adjust idling of engine and tappete clearance; 2. Inspect and remedy oil

leaks of engine; 3. Replace clutch disc and pressure plate w/original; and

4. Replace release bearing hub trunion bolt' (Exhibit C). Thereafter, the

malfunctioning persisted and, on inspection, appellee's mechanic noticed a worn out

screw which made appellee suspicious about the age of the engine. This

prompted appellee, thru his lawyer, to write appellant a letter, dated February 10,

1962, protesting that the engine was not brand-new as represented (Exhibit

E). Because of the recurringdefects, the engine was again submitted to appellant's

shop to '1. Inspect engine oil leaks on cylinder head; 2. Check up propeller shaft

(vibrating at high speed); and 3. Tighten bolts of pump.' (Exhibit F). All these

notwithstanding, the engine could still not be returned into operation because it

continued not to function well. In fact, it was sent back to appellant's shop on the

same day it was delivered after the last repair work done on it. Another check up

was thereafter required to be made on March 5, 1962 (Exhibit G). Then, again,on March 10, 1962, the engine was back at the repair shop to '1. Inspect leaks on

No. 1 & 5 high pressure pipe; and 2. Change engine oil with flushing & oil element'

(Exhibit H). Still, the oil leaks remained unchecked and, on July 2, 1962, one last

effort to '1. Remedy engine oil leaks' (Exhibit 1) was made, but all to no avail

because, instead of improving, the engine's condition became worse as

itdeveloped engine knock and appellee had to stop its operation altogether

due to its unserviceability.

"These repeatedly recurring defects and continued failure of appellant to put the

engine in good operating condition only served to firm up in appellee's mind the

suspicion that the engine sold to him was not brand-new as represented. He then

sought the assistance of the PC Criminal Investigation Service to check on the



authenticity of the serial number of the engine, with due notice to

appellant. Scientific examination and verification tests revealed that

the original motor number of the engine aforesaid was

tampered. Further inquiries by appellee from the Manila Trading Company, which

also handles theimportation and distribution of similar engines, also disclosed that,

unlike the engine delivered to appelleewhose engine body and injection pump were

painted with two different colors, brand-new engines are painted with only one color

all over.

"Thus convinced that a fraudulent misrepresentation as to the character of the

engine had been perpetrated upon him, appellee made demands from appellant for

indemnification for damages and eventually instituted the present suit.

"In its defense, appellant interposed prescription of the action, denied the imputation

of misrepresentation, and disputed the propriety and amount of damages claimed."

x x x

After trial on the merits, the trial court ruled in favor of plaintiff Yaptinchay as follows:

"FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders

judgment ordering the defendant, G.A. Machineries Inc., to pay the

plaintiff, Horacio Yaptinchay, actual damages sustained in the sum of P54,000.48; to

reimburse the purchase price of the Fordson diesel engine in the amount of

P7,590.00; and to pay attorney's fees to plaintiff's counsel on the sum of P2,000.00

and costs.

"Plaintiff is, likewise, ordered to return the Fordson diesel engine with serial number

A-21219 to the defendant."

Defendant GAMI appealed the decision to the Court of Appeals. As stated earlier,

the decision was affirmed by the Appellate Court. A motion for reconsideration was

denied. Hence, the instant petition.

Petitioner GAMI raises the following alleged errors of judgment of the respondent

court:

I

THE COURT OF APPEALS ERRED IN NOT APPLYING THE PRESCRIPTIVE

PERIOD OF ARTICLE 1571 OF THE CIVIL CODE TO THE CASE AT BAR.

II



THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE IN THE CASE

OF ASOCIACION ZANJERA CASILIAN vs. CRUZ, 46 O.G. 4813, 4820

REGARDING ADMISSION BY FAILURE TO REBUT, TO THE ISSUE OF ACTUAL

DAMAGES, WHICH MUST BE PROVED BY THE BEST AND COMPETENT

EVIDENCE.

III

THE COURT OF APPEALS ERRED IN AWARDING ACTUAL DAMAGES IN THE

FORM OF UNREALIZED PROFITS (LUCRUM CESSANTE) WHEN THE ISSUE

RAISED BY THE PLEADINGS REFERS ONLY TO ALLEGED ACTUAL DAMAGES

IN THE FORM OF DAMNUM EMERGENTE.

IV

THE COURT OF APPEALS ERRED IN FINDING THAT THE FORDSON DIESEL

ENGINE DELIVERED BY PETITIONER TO RESPONDENT HORACIO

YAPTINCHAY WAS NOT BRAND NEW, REACHING SUCH FINDING BY WAY OF A

MANIFESTLY MISTAKEN INFERENCE AND ON THE BASIS

OF AMISAPPREHENSION OF FACTS AND SOLELY ON THE GROUND OF

SPECULATION, SURMISES ANDCONJECTURES.

The assignments of errors raise the following issues: 1) whether or not the

respondent's cause of action against the petitioner had already prescribed at the

time the complaint was filed in the trial court; 2) whether or not the factual findings of

both the trial and appellate courts as regards the subject Fordson diesel engine are

supported by evidence and 3) whether or not the award of damages was justified

considering evidence on record.

The first issue is premised on the petitioner's proposition that the respondent's cause

of action was for breach ofwarranty against hidden defects as provided under

Articles 1561 and 1566 of the Civil Code. Article 1571 of the Civil Code provides for

a six-month prescriptive period from the delivery of the thing sold for the filing of an

action for breach of warranty against hidden defects. According to

petitioner GAMI when respondent Yaptinchay filed the case with the trial court, more

than six months had already lapsed from the time the alleged defective engine was

delivered and, therefore, the action had prescribed.

The petitioner contends that Yaptinchay's asserted cause of action was premised

and anchored on the delivery by the defendant of a DEFECTIVE ENGINE and that

the allegations in the complaint that the engine was not brand new are clearly mere

specifications of the precise nature of the hidden defects.



A cursory reading of the complaint shows that the petitioner's arguments are not

well-taken.

The main thrust of the complaint is the contention that the Fordson diesel engine

delivered by the petitioner to the respondent was not brand-new contrary to the

representations of the former and the expectations of the latter. The complaint was

couched in a manner which shows that instead of the brand-new Fordson diesel

engine which was bought by the respondent from the petitioner, another engine

which was not brand new was delivered resulting in the damages sought to be

recovered. It is evident therefore, that the complaint was for a breach of a contract

of sale rather than a breach of warranty against hidden defects. This is so because

an action for breach of warranty againsthidden defects presupposes that the thing

sold is the same thing delivered but with hidden defects. Consequently, the six-

month prescriptive period under Article 1571 of the Civil Code is not applicable.

The petitioner takes exception to the factual findings of the appellate court and

argues: 1) the fact that the Fordsondiesel engine developed oil leaks does not

necessarily imply that the said engine was not brand new and 2) the testimony of

laboratory technician Captain Garcia of the Philippine Constabulary to the effect that

the motor or serial number of the engine was tampered does not deserve credence.

The first argument is premised on the proposition that even brand-new engines in

many cases develop oil leaks. To support this proposition the petitioner presented

documentary evidence (Exhibits "5", "7", "8", "9", "10", "11", "12", "13", "14",

"15", "16", and "17") consisting of job orders for allegedly brand new engines which

developed oil leaks.

An examination of the documentary evidence shows that the job orders were for

twelve (12) different engines. Moreover, the petitioner's witness who testified on the

said job orders admitted that some engines were repaired only after a few

months. On the other hand, the subject Fordson diesel engine was repaired on the

complaint not only of oil leaks but also replacement of clutch disc and pressure

plate, replacement of release bearing hub trunion belt, and other defects within a

week after it was delivered to the respondents or on February 6, 1962 (Exhibit

"C"). Thereafter it was returned for more repairs on February 28, 1962 (Exhibit "F"),

on March 10, 1962 (Exhibit "H") and on July 2, 1962 (Exhibit "I"). The documentaryevidence of the petitioner consisting of the job orders of the supposed brand-new

engines which also developed oil leaks is no reason to doubt the trial court's and

appellate court's factual findings. Infact, the documentary evidence and the



admissions of the petitioner's witness enhance the respondent's allegation that

the Fordson diesel engine sold to him was not brand-new.

The second argument questions Captain Garcia's findings that the original motor

number of the engine was tamperedas shown by the presence of fragmentary

numbers which appeared in the engine when he conducted a macro-etching test

thereon by applying acid on the surface of said engine. The petitioner

emphasizes Captain Garcia's alleged testimony that "x x x what he calls fragmentary

numeral" is not definitely a numeral or a fragment of a numeral and states that

the same could have been caused by any molecular pressure applied to the area of

the metal where it appeared. In effect, the petitioner insists that the supposed

fragmentary numerals could have been merely scratchesor indentations near the

serial number of the motor which might have been caused by sparks from

the welding process.

The arguments are not well-taken. First, the statements attributed to Captain Garcia

are not accurate. An examination of the record shows that Captain Garcia positively

stated the fragmentary numeral to be a numeral or anumber but in the absence of

key portions he could not positively identify the exact number or numeral. He

discounted the possibility that such fragmentary numerals could be mere

scratches. Second, the witness did not categorically state that any molecular

pressure could have caused the fragmentary numeral. Hence, Captain Garcia under

cross-examination stated:

"Q. This fragmentary numeral could be caused deliberately by tampering with the

engine number or by other factor such as scratches or burning by other foreign

element, is that right?

"A No, sir, they can be caused by scraping but not by scratching, because by

scraping there is molecular disturbance of metal.

"Q When you say molecular disturbance does it mean you first apply in the area, or

would it disturb the molecule in or around that area?

"A Once you stamped the number, you impressed it and there is molecular

disturbance in the structure of the metal.

"Q If the metal is burned, there is also molecular disturbance in the metal, is that

correct?

"A The metal will only expand.



"Q There is no spark of the machine could not cause the molecular disturbance in

the steam, is that right?

"A It cannot"

(T.S.N., Iluminado C. Palisoc, February 5, 1965, pp. 99-100)

The petitioner's argument that the Court of Appeals findings are based on manifestly

mistaken inferences, misapprehension of facts, and purely on speculation, surmises,

and conjectures is without merit.

The Fordson diesel engine delivered to the respondent was not brand-new.

We agree with the Court of Appeals that:

"Indeed, it would be too much to say that the successive malfunctions of the engine,

the defects and other discrepancies therein that cropped up so soon after its

delivery, the numerous trips it had to appellant's repair shop the demonstrable

tampering with its serial number, and its ultimate breakdown despite appellant's

attempts to put it into good working order could be attributed to mere coincidence. If

all these mean anything at all, it can only be that the engine aforesaid was not really

brand new.

The petitioner committed a breach of contract against the respondent. The

misrepresentation of the quality of the subject Fordson diesel engine is tantamount

to fraud or bad faith. The return of the P7,590.00 purchase price with legal interest

from the date of purchase and computed pursuant to our ruling in Viloria v. Court of

Appeals (G.R. No. 63398, June 29, 1983) is justified. The next question refers to the

award of actual damages in the amount of P54,000.48. This amount covers the

probable income which the respondent failed to realize because of the breach of

contract. Is the award of damages in the form of lucro cessante justified?

The law on the matter is spelled out in Raagas v. Traya (22 SCRA 839), where we

stated:

"x x x In Abubakar Tan v. Tian Ho, L-18820, December 29, 1962

and Lim Giok v. Bataan Cigar and Cigarette Factory, L-15861, April 16, 1960, we

held that even if the allegations regarding the amount of damages in the complaint

are not specifically denied in the answer, such damages are not deemed

admitted. In Tomassi v. Villa- Abrille, L-7047, August 21,

1958, Suntay Tanjangco v. Jovellanos , et al., L-12332, June 30,1960, and Delfin v.

Court of Agrarian Relations, et al., L-23348, March 14, 1967, 1967 A PHILD 453, we

declared in no uncertain terms that actual damages must be proved, and that a court



cannot rely on 'speculation, conjecture or guesswork' as to the fact and amount of

damages, but must depend on actual proof that damages had been suffered and on

evidence of the actual amount.x x x"

The fact that the defendant does not dispute the amount of this kind of damages

does not necessarily imply that the other party outright is entitled to the award of

damages.

Article 2200 of the Civil Code entitles the respondent to recover as

compensatory damages not only the value of the loss suffered but also prospective

profits while Article 2201 entitles the respondent to recover all damages which may

be attributed to the non-performance of the obligation. However, in order to recover

this kind of damages, the plaintiff must prove his case -

" 'When the existence of a loss is established, absolute certainty as to its amount is

not required. The benefit to be derived from a contract which one of the parties has

absolutely failed to perform is of necessity to some extent, a matter of speculation,

but the injured party is not to be denied all remedy for that reason alone. He must

produce the best evidence of which his case is susceptible and if that evidence

warrants the inference that he has been damaged by the loss of profits which he

might with reasonable certainty have anticipated but for the defendant's wrongful act,

he is entitled to recover." (Cerreno v. Tan Chuco, 28 Phil. 312 quoted in Central Bank

of the Philippines v. Court of Appeals, 63 SCRA 431, 457).

Applying the foregoing test to the instant case, we find the evidence of the

respondent insufficient to be considered within the purview of "best evidence". The

bare assertion of the respondent that he lost about P54,000.00 and the

accompanying documentary evidence presented to prove the amount lost are

inadequate if not speculative. The document itself merely shows that everytime a

truck travels, Mr. Yaptinchay earns P369.88. This amount is then multiplied by the

number of trips which the truck was allegedly unable to make. The estimates were

prepared by a certain Dionisio M. Macasieb whose identity was not even revealed by

the respondent. Mr. Yaptinchay was in the freight truck business. He had several

freight trucks among them the truck with the subject Fordson diesel engine, covering

the route from Manila to Baguio. To prove actual damages, it would have been easy

to present the averageactual profits realized by the other freight trucks plying theManila-Baguio route. With the presentation of such actual income the court could

have arrived with reasonable certainty at the amount of actual damages suffered by

the respondent. We rule that the award of actual damages in the amount of

P54,000.08 is not warranted by the evidence on record.



WHEREFORE, the decision appealed from is hereby modified. The award of actual

damages in the amount of P54,000.48 is deleted. The petitioner shall also

pay six (6%) percent interest per annum on the P7,590.00 purchase price

from January 27, 1962 to July 29, 1974 and twelve (12%) percent

interest per annum from July 30, 1974 until the purchase

price is reimbursed. In all other respects, the appealed decision is affirmed.

SO ORDERED.

hidden defects

SECOND DIVISION

[ G.R. No. 173575, February 02, 2011 ]

IMMACULATE CONCEPTION ACADEMY AND THE LATE DR. PAULO

C. CAMPOS SUBSTITUTED BY HIS HEIRS, DR. JOSE PAULO

E. CAMPOS, ATTY. PAULO E. CAMPOS, JR. AND DR. ENRIQUE

E. CAMPOS,[1] PETITIONERS, VS. AMA COMPUTER COLLEGE,

INCORPORATED, RESPONDENT.

DECISION

ABAD, J.:

This case is about the rescission of a lease contract on the ground that the building

turned out to be structurally unsafe even as the lessee had previously inspected the

same.

The Facts and the Case

Immaculate Conception Academy (ICA) owned a three-storey building in

Dasmariñas, Cavite. The property caught the eye of AMA Computer College, Inc.

(AMA) and it sought to buy the same but did not succeed. Subsequently, after

inspecting the building, AMA settled on leasing it.[2] The parties signed a contract of

lease for 10 years from September 22, 1997 to September 21, 2007. The agreed

rent was P561,000.00 plus VAT per month. In accordance with the contract, AMA

paid ICA P500,000.00 in earnest money, three months advance rentals, and security

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deposit.

After the signing of the contract, officials of AMA re-inspected the building and began

renovating it for the upcoming school year. But during an inspection, AMA's Chief

Operating Officer for its Cavite Campus noted several cracks on the floor and walls

of the building's second storey. This prompted more inspections. Eventually, AMA

applied with the municipal engineer's office for an occupancy permit.[3] After

inspection, Municipal Engineer Gregorio C. Bermejo wrote AMA a letter dated

September 29, 1997, detailing his findings and conclusion, thus:

x x x x

[The] inspection reveals the following defects in the building, such as:

1. Multiple cracks in the second floor slabs showing signs of insufficient or

improper reinforcements.

2. Deflections in the second floor slabs and bears ranging from 20 mm to 50

mm which are beyond normal and allowable.

3. Unusual vibrations in the second floor level which are apparent when

subjected to live loadings.

Based from the above observations we are in doubt as to the structural

soundness and stability of that three-storey building. Whether it can

withstand against any natural calamity is presently under question. We are

convinced that the building is structurally unsafe for human occupancy.[4]

On the same date, September 29, 1997, AMA wrote ICA demanding the return of all

that it paid within 24 hours from notice. AMA cited the building's structural deficiency,

which it regarded as a violation of ICA's implied warranty againsthidden defects.

AMA did not pursue the lease contract and instead leased another property from a

different party.

When its request for reimbursement remained unheeded, AMA filed an action[5] for

breach of contract and damages with prayer for the issuance of a writ of preliminary

attachment against ICA before the Regional Trial Court (RTC) of Dasmariñas,

Cavite. In its complaint, AMA alleged that ICA (represented by the late Dr. Paulo C.

Campos) fraudulently entered into the lease agreement, fraudulently breached the



same, and violated its implied warranty against hiddendefects; that despite

knowledge of the instability of the building, ICA insisted on offering it to AMA; and

that ICA had been unable to produce the building's certificate of occupancy. AMA

prayed for restitution of the amounts it paid to ICA with interest and award of

exemplary damages and attorney's fees.

In its Answer, ICA denied that AMA asked for the building's certificate of occupancy.

ICA alleged that it was AMA's responsibility to secure the certificate from the

municipal government as stipulated in the contract. Further, ICA claims that it never

misrepresented the condition of the building and that AMA inspected it before

entering into the contract of lease.

In its Decision dated April 8, 2003, the RTC took AMA's side and ruled that the latter

entered into the lease contract without knowing the actual condition of the building.

The RTC held that ICA failed to disclose the building's condition, thus justifying

AMA's rescission of the contract. The RTC ordered ICA to return the P4,072,150.00

it got from AMA, representing five months security deposit and three months

advance rentals plus interest of 6% per annum, from January 19, 1998 until full

payment and, further, to pay AMA P300,000.00 and P200,000.00 as exemplarydamages and attorney's fees, respectively.[6]

On appeal,[7] the Court of Appeals (CA) rendered a Decision dated February 27,

2006, holding that ICA did not violate its implied warranty against hidden defects,

misrepresent the building's condition, or act in bad faith since AMA inspected the

building before it entered into the lease agreement. It should have noticed the

patent cracks on the second floor. Still, the CA ruled that AMA was justified in

rescinding the lease contract considering ICA's default in repairing the defects in the

building's structure. The CA held that AMA's demand for the certificate of

occupancy amounted to a demand for repairs. Thus, the CA affirmed the decision of

the RTC but deleted the grant of exemplary damages and attorney's fees. ICA now

turns to this Court for succor.

The Issues Presented

The issues presented in this case are:

1. Whether or not AMA was justified in rescinding the contract of lease either on

account of ICA's fraudulent representation regarding the condition of its building or

on account of its failure to make repairs on the same upon demand; and



2. Whether or not ICA and Dr. Campos are entitled to their claims for

damages against AMA.

The Court's Rulings

One. The Court is not convinced that AMA was justified in rescinding the contract of

lease on account of ICA's alleged fraudulent representation regarding the true

condition of its building. The fact is that AMA's representatives inspected the building

to determine if it was suitable for their school's needs. The cracks on the floor and

on the walls were too obvious to suggest to them that something was amiss. It was

their fault that they did not check the significance of such signs. ICA for its part wascandid about the condition of the building and did not in fact deny AMA access to it.

Apparently, AMA did not, at the beginning, believe that the cracks on the floor and on

the walls were of a serious nature. It realized that such cracks were manifestations

of structural defects only when it sought the issuance of a municipal occupancy

permit. The local building official inspected the cracks and concluded that they

compromised the building's structural safety.

The CA ruled that, upon the discovery of the building's structural defects, AMA had

the right to seek their repair by ICA on the strength of the following stipulations in

their contract:[8]

x x x x

LESSEE shall comply with any and all laws, ordinances, regulations or orders

of national or local governments concerned arising from the occupation

and/or sanitation of the leased PROPERTY.

x x x x

8. REPAIRS - LESSEE hereby agrees that all minor repairs or those caused by

the use of the leased PROPERTY or use due to any ordinary wear and tear

shall be for the account of the LESSEE while the major repairs or thoseaffecting the structural condition of the building and those due to fortuitous

events shall be for the account of the LESSOR. (Underscoring supplied)

The CA ruled that AMA's demand for ICA to produce a certificate of occupancy



covering the building from the local building official amounted to a demand for ICA to

undertake a repair of its structural defects.

But this ruling reads from AMA's letter a demand for repair that was not there. AMA

simply asked ICA to produce a certificate of occupancy for the building even when

the contract placed on AMA the responsibility for complying with the government's

occupancy requirement. Indeed, it was AMA that applied for the certificate of

occupancy.[9] A demand to repair the defects in the building's structure, a clearly

difficult and costly proposition, cannot be so easily implied from AMA's demand that

ICA produce such certificate.

True, the quoted provision of the lease contract requires ICA to undertake major

repairs "affecting the structural condition of the building and those due to fortuitous

events." But AMA's outright rescission of the lease contract and demand that ICA

return the deposit and advance rentals it got within 24 hours from such demand

precluded ICA, first, from contesting the findings of the local building official or

getting some structural specialists to verify such findings or,second, from making the

required repair. Clearly, AMA's hasty rescission of the contract gave ICA no chance

to exercise its options.

AMA belatedly invokes Article 1660 of the Civil Code which reads:

Art. 1660. If a dwelling place or any other building intended for human

habitation is in such a condition that its use brings imminent and serious

danger to life or health, the lessee may terminate the lease at once by

notifying the lessor, even if at the time the contract was perfected the former

knew of the dangerous condition or waived the right to rescind the lease onaccount of this condition.

AMA is actually changing its theory of the case. It claimed in its complaint that it

was entitled to rescind the contract of lease because ICA fraudulently hid from it the

structural defects of its building. The CA did not agree with this theory but held that

AMA was nonetheless entitled to rescind the contract for failure of ICA to make the

repairs mentioned in the contract. Now, AMA claims that it has a statutory right to

rescind the lease contract on the ground mentioned in Article 1660, even if it may be

deemed to have initially waived such right.

Article 1660 is evidently intended to protect human lives. If ICA's building was

structurally defective and in danger of crashing down during an earthquake or after it



is made to bear the load of a crowd of students, AMA had no right to waive

those defects. It can rescind the lease contract under Article 1660. But this

assumes that the defects were irremediable and that the parties had no agreement

for rectifying them. As pointed out above, the lease contract implicitly gave ICA the

option to repair structural defects at its expense. If that had been done as the

contract provides, the risk to human lives would have been removed and the right to

rescind, rendered irrelevant.

In any event, the fact is that the local building official found ICA's building structurally

defective and unsafe. Such finding is presumably true.[10] For this reason, ICA has

no justification for keeping AMA's deposit and advance rentals. Still, the Court holds

that AMA is not entitled to recover more than the return of its deposit and advance

rental considering that, contrary to AMA's claim, ICA acted in good faith and did not

mislead it about the condition of the building.

Two. Aside from seeking the dismissal of the complaint, ICA and Dr. Campos

separately seek moral and exemplary damages in the amount of P90 million and

P10 million plus attorney's fees and cost of suit.

To be entitled to moral damages, ICA needed to prove that it had a good reputation

and that AMA's action besmirched the same.[11] Such proof is wanting in this case.

As for Dr. Campos, he has amply proved that he suffered mental anguish, serious

anxiety, and social humiliation following AMA's unfounded accusation that he

fraudulently misled AMA regarding the structural condition of ICA's building.

However, due to his untimely demise before the finality of this case, his claim for

moral damages does not survive and is not transmissible to his substitutes, for being

extremely personal to him.[12]

Since AMA acted in a reckless, wanton, oppressive, and malevolent manner in

imputing fraud and deceit on ICA and Dr. Campos, the Court finds ground for

awarding them exemplary damages. Further, the Court holds that, having been

compelled to litigate in order to protect their interests, ICA and Dr. Campos are also

entitled to attorney's fees.

WHEREFORE, the CourtGRANTS the petition andREVERSES andSETS

ASIDE the Decision of the Court of Appeals in CA-G.R. CV 82266 dated February

27, 2006. Further, the Court:



1. DIRECTSpetitioner Immaculate Conception Academy to return to respondent

AMA Computer College, Inc. its security deposit and advance rentals for the lease of

the subject building totaling P4,072,150.00 plus interest of 6% per annum from the

date of the finality of this decision until it is fully paid; and

2.DIRECTS respondent AMA Computer College, Inc. to pay the heirs of Dr. Paulo

C. Campos, namely, Jose Paulo, Paulo, Jr., and Enrique, all surnamed Campos and

the Immaculate Conception Academy P100,000.00 as exemplary damages and

P50,000.00 as attorney's fees.

SO ORDERED.

warranty against hidden defects

THIRD DIVISION

[ G.R. No. 148173, December 10, 2004 ]

SUPERCARS MANAGEMENT & DEVELOPMENT CORPORATION,REPRESENTED BY ITS PRESIDENT BENIGNO CHAN,

PETITIONER, VS. THE LATE FILEMON FLORES,

SUBSTITUTED BY HIS SURVIVING SPOUSE, NORA C.

FLORES,[1] RESPONDENT.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review oncertiorari assailing the Decision[2] dated

November 29, 2000 and Resolution[3]dated April 26, 2001, both issued by the Court

of Appeals in CA-G.R. CV No. 40419, entitled“Filemon Flores vs. Supercars

Management & Development Corporation, Mamerto Catley, Pablito Marquez, and

Rizal Commercial Banking Corporation.”

In the second week of December 1988, Filemon Flores, respondent, purchased from

Supercars Management and Development Corporation, petitioner, an Isuzu Carter

Crew Cab for P212,000.00 payable monthly with a down payment equivalent to 30%

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http://civillawabc.blogspot.com/2014/09/warranty-against-hidden-defects.html



of the price or P63,600.00. The balance was to be financed by the Rizal Commercial

Banking Corporation (RCBC). The sale was coursed through Pablito Marquez,

petitioner’s salesman.

Upon delivery of the vehicle on December 27, 1988, respondent paid petitioner the

30% down payment, plus premium for the vehicle’s comprehensive insurance policy

amounting to P7,374.80. The RCBC financed the balance of the purchase price. Its

payment was secured by a chattel mortgage of the same vehicle.

A day after the vehicle was delivered, respondent used it for his family’s trip to

Bauang, La Union. While traversing the national highway in Tarlac, Tarlac, the fan

belt of the vehicle snapped. Then its brakes hardened after several stops and did not

function properly; the heater plug did not also function; the engine could not start;

and the fuel consumption increased.[4]

Upon their return to Manila in the first week of January 1989, respondent complained

to petitioner about the defects of the vehicle. Marquez then had the vehicle repaired

and returned it to respondent that same day, assuring the latter that it was already in

good condition.

But after driving the vehicle for a few days, the same defects resurfaced, prompting

respondent to send petitioner a letter dated January 30, 1989 rescinding the contract

of sale and returning the vehicle due to breach of warrantyagainst hidden defects. A

copy of the letter was furnished RCBC.

In response to respondent’s letter, petitioner directed Marquez to have the vehicle

fixed. Thereafter, he returned the vehicle to respondent with the assurance that it

has no more defects. However, when respondent drove it for a few days, he found

that the vehicle was still defective.

Hence, on February 7, 1989, respondent sent petitioner another letter restating that

he is rescinding the contract of sale, a copy of which was furnished RCBC. On

February 9, 1989, he returned the vehicle to petitioner. Later, Marquez and Mamerto

Catley, petitioner’s salesman, tried to convince respondent to accept the vehicle as ithad been completely repaired. But respondent refused.

On March 1, 1989, respondent sent petitioner a letter demanding the refund of his

down payment, plus the premium he paid for the vehicle’s insurance.



Petitioner failed to comply with petitioner’s demand. Consequently, respondent

stopped paying the monthly amortization for the vehicle.

On March 21, 1989, RCBC sent respondent a letter demanding that he settle his

past overdue accounts for February 15 and March 15, 1989. In reply, respondent,

through a letter dated March 31, 1989, informed RCBC that he had rescinded the

contract of sale and had returned the vehicle to petitioner. This prompted RCBC to

file with the Office of the Clerk of Court andEx-Officio Sheriff, Regional Trial Court,

Quezon City, aPetition for Extra-judicial Foreclosure of Chattel Mortgage.

On June 2, 1989, a Notice of Sheriff’s Sale of the vehicle was set.

On June 1, 1989, respondent filed with the same Office

aManifestation/Motion asking for the postponement of the scheduled auction sale

until such time that petitioner and/or RCBC shall have reimbursed him of the amount

he paid for the vehicle; and that should the auction sale be conducted, the proceeds

thereof equivalent to the amount he spent be withheld and turned over to him.

The auction sale proceeded as scheduled. RCBC, being the highest bidder,

purchased the vehicle. Subsequently, RCBC sold the vehicle to a third party.

On November 3, 1989, respondent filed with the Regional Trial Court (RTC), Branch

150, Makati City a complaint[5] for rescission of contract with

damages against petitioner, Marquez, Catley and RCBC, docketed as Civil Case No.

89-5566.

In their separate answers, petitioner, Marquez and Catley denied having committed

any breach of warranty againsthidden defects, claiming that the vehicle had only

“minor and inconsequential defects” which “were promptly and satisfactorily repaired

by petitioner Supercars pursuant to its warranty as the seller.”[6] For its part, RCBC

claimed that it has no liability whatsoever against respondent because it merely

enforced its right under the chattel mortgage law. All the defendants prayed for the

dismissal of the complaint.

On April 13, 1992, the RTC rendered its Decision in favor of respondent

and against the defendants, thus:



“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the

defendants, ordering the latter to jointly and severally pay the plaintiff as follows:

1. the amount of P70,974.80 representing the 30% down payment and premiumpaid for one year comprehensive motor vehicle insurance plus interests at the rate of

14% per annum from date of filing of this complaint on October 30, 1989 until fully

paid;

2. the sum of P50,000.00 as moral damages;

3. the sum of P25,000.00 as exemplary damages;

4. the sum of P20,000.00 as attorney’s fees; and

5. the costs of suit.

SO ORDERED.”[7]

Upon motion for reconsideration by RCBC, the RTC, in an Order dated December

21, 1992, modified its Decision by absolving RCBC from any liability and dismissing

the complaint against it, thus:

x x x

“Going into the merits of defendant bank’s contention that it has valid and

meritorious defense which should ultimately exculpate it from any liability, jointly and

severally, with the other defendants, the Court, after a careful review of the evidence

on hand, reconsiders its Decision insofar as the said bank is concerned. The valid

exercise by the plaintiff of its right to rescind the contract of sale for the purchase of

the motor vehicle in question does not apply to defendant bank. Said contract is

effective only as againstdefendant Supercars Management and DevelopmentCorporation, which must principally suffer the consequence of its breach of the

contract.

This Court likewise takes notice of the fact that since the motor vehicle was

voluntarily surrendered by the plaintiff and that defendant bank merely exercised its

right under the chattel mortgage law, no fault can be attributed to the latter. The fact

that the plaintiff sent a letter to the Office of the City Sheriff of Quezon City, copy

furnished the bank, seeking the postponement of the auction sale of the subject

motor vehicle, will not and cannot be considered as a valid ground to hold said bank

liable for only exercising its rights under the law. At most, the liability must really be

imputed only against defendants Supercars Management and Development

Corporation, Mamerto Catley and Pablito Marquez.



“WHEREFORE, considering the foregoing premises, the Decision of this Court dated

April 13, 1992, insofar as it holds defendant Rizal Commercial Banking Corporation

jointly and severally liable to the plaintiff, is hereby MODIFIED and the

case against said bank DISMISSED. Similarly, the compulsory

counterclaim against the plaintiff is likewise dismissed.

The dispositive portion of the same Decision insofar as the rest of the defendants

are concerned is hereby maintained and affirmedin toto.

SO ORDERED.”[8]

From the above Decision and Order, petitioner, Marquez and Catley interposed an

appeal to the Court of Appeals, docketed as CA-G.R. CV No. 40419. In a Decision

dated November 29, 2000, the Appellate Court affirmed the RTC Decision with

modification in the sense that the complaint against Marquez and Catley was

dismissed, thus:

x x x

“It is with respect to appellants Catley and Marquez’ liability that we are minded to

modify the (appealed) Decision. The two being mere employees (of appellant

Supercars Management and Development Corporation), they cannot be held liable

to refund the amount claimed by Flores. Nor can they be made liable for damages

and attorney’s fees, there being no clear evidence that they had a hand in giving rise

thereto.

WHEREFORE, the appealed Amended Decision is AFFIRMED, with the

MODIFICATION that the complaint insofar as defendants-appellants Mamerto Catley

and Pablito Marquez is hereby DISMISSED.

SO ORDERED.[9]

Petitioner filed a motion for reconsideration but denied in a Resolution dated April

26, 2001.[10]

Hence, the instant petition.

Petitioner contends that respondent has “no right to rescind the contract of

sale”[11] because “the motor vehicle in question, as found by the RTC and the Court



of Appeals, is already in the hands of a third party, one Mr. Lim – an innocent

purchaser for value.”[12] Thus, both courts erred in ordering petitioner to refund

respondent of the amounts he paid for the vehicle.

The issue here is whether respondent has the right to rescind the contract of sale

and to claim damages as a result thereof.

We rule for respondent.

Respondent’s complaint filed with the RTC seeks to recover from petitioner the

money he paid for the vehicle due to the latter’s breach of

his warranty against hidden defects under Articles 1547,[13] 1561,[14] and 1566[15] of

the Civil Code. The vehicle, after it was delivered to respondent, malfunctioned

despite repeated repairs by petitioner. Obviously, the vehicle has hidden defects.

A hidden defect is one which is unknown or could not have been known to the

vendee.[16]

The findings of both the RTC and Court of Appeals that petitioner committed a

breach of warranty against hiddendefects are fully supported by the records. TheAppellate Court correctly ruled:

“The evidence clearly shows that Flores [now respondent] was justified in opting to

rescind the sale given the hidden defects of the vehicle, allowance for the repair of

which he patiently extended, but which repair did not turn out to be satisfactory.

x x x

For when by letters of January 30, 1989 and February 7, 1989, which were followed

up by another dated March 1, 1989, Flores declared his rescission of the sale, which

rescission was not impugned or opposed by appellants as in fact they accepted the

return of the vehicle on February 9, 1989, such extra-judicial rescission x x x

produced legal effect (UP vs. de los Angeles, 35 SCRA 102 [1970];Tolentino

Commentaries and Jurisprudence on the Civil Code, citing Magdalena Estate v.

Myrick, 71 Phil. 344 [1940-1941]).

x x x”[17]



It is well within respondent’s right to recover damages from petitioner who committed

a breach of warranty againsthidden defects. Article 1599 of the Civil Code partly

provides:

“Article 1599. Where there is a breach of warranty by the seller, the buyer may, at his

election:

x x x

(4) Rescind the contract of sale and refuse to receive the goods, or if the goods have

already been received, return them or offer to return them to the seller and recover

the price or any part thereof which has been paid.

When the buyer has claimed and been granted a remedy in anyone of these ways,

no other remedy can thereafter be granted, without prejudice to the provisions of the

second paragraph of Article 1191.

x x x.” (Underscoring supplied)

Petitioner’s contention that under Article 1191 of the Civil Code, rescission can no

longer be availed of as the vehicle was already in the hands of an innocent

purchaser for value lacks merit. Rescission is proper if one of the parties to a

contract commits a substantial breach of its provisions. It creates an obligation to

return the object of the contract. It can be carried out only when the one who

demands rescission can return whatever he may be obliged to restore. Rescission

abrogates the contract from its inception and requires a mutual restitution of the

benefits received.[18]Petitioner is thus mandated by law to give back to respondent

the purchase price upon his return of the vehicle. Records show that at the time

respondent opted to rescind the contract, the vehicle was still in his possession. He

returned it to petitioner who, without objection, accepted it. Accordingly, the 30%

down payment equivalent to P63,600.00, plus the premium for the comprehensive

insurance amounting to P7,374.80 paid by respondent should be returned by

petitioner.

As further stated by the Court of Appeals:

“Appellant’s invocation of Article 1191 of the Civil Code in support of his argument

that as the vehicle had been sold to a third party, rescission can no longer ensue is

misplaced.



For, Flores is asking for the refund of the downpayment and payment for insurance

premiums. This brings us to appellant’s final argument.

Appellant’s professed excuse from their inability to give refund – that refund would

necessitate the return of the subject motor vehicle which is impossible because it is

now in the hands of an innocent purchaser for value – miserably fails.

x x x appellant Supercars was paid the balance of the purchase price by RCBC and,

therefore, in addition to the downpayment given by Flores, it had been fully paid for

the vehicle.

Ergo, Supercars had nothing more to do with the vehicle.”[19]

However, the lower court’s award of P50,000.00 as moral damages and P25,000.00

as exemplary damages to respondent is erroneous. While no proof of pecuniary loss

is necessary in order that moral damages may be awarded, the amount of indemnity

being left to the discretion of the court, it is nevertheless essential that the claimant

satisfactorily prove the existence of the factual basis of the damage and its causal

relation to defendant’s acts. Moral damages are in the category of an award

designed to compensate the claimant foractual injury suffered and not to impose a

penalty to the wrongdoer. This has not been proved by respondent.

In contracts and quasi-contracts, the court may award exemplary damages if the

defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent

manner.[20] Likewise, respondent failed to establish that petitioner acted in such

manner.

As to the award of attorney’s fees, the same must be deleted since the award of

moral and exemplary damages are eliminated.[21] Moreover, the trial court did not

give any justification for granting it in its decision. It is now settled that awards of

attorney’s fees must be based on findings of fact and law, stated in the decision of

the trial court.[22]

WHEREFORE, the petition isDENIED. The assailed Decision dated September 20,

1999 and Resolution dated February 1, 2000 of the Court of Appeals in CA-G.R. CV

No. 52177 areAFFIRMED withMODIFICATION. The award of moral and exemplary

damages and attorney’s fees areDELETED. Costs

against petitioner.

SO ORDERED.



equitable mortgage 3

FIRST DIVISION

[ G.R. NO. 162112, July 03, 2007 ]

DOMINGO R. LUMAYAG AND FELIPA N. LUMAYAG, PETITIONERS,

VS. HEIRS OF JACINTO NEMEÑO AND DALMACIA

DAYANGCO-NEMEÑO, REPRESENTED BY MELITON NEMEÑO,

RESPONDENTS.

D E C I S I O N

GARCIA, J.:

Challenged and sought to be set aside in this petition for review on certiorari under

Rule 45 of the Rules of Court is the decision[1] dated September 30, 2003 of the

Court of Appeals (CA), as reiterated in its resolution[2] of January 9, 2004 inCA-G.R.

CV No. 63230, affirming, with modification, an earlier decision of the Regional Trial

Court (RTC) of Ozamiz City which ruled that the instrument entitledDeed of Sale

with Pacto De Retro executed in favor of the herein petitioners by the respondents is

actually an

equitable mortgage.

The facts:

During their lifetime, the spouses Jacinto Nemeño and Dalmacia Dayangco-

Nemeño, predecessors-in-interest of the herein respondent heirs, owned two (2)

parcels of coconut land located in Manaca, Ozamiz City. The parcels are: Lot No.

4049, with an area of five (5) hectares and covered by Original Certificate of Title

(OCT) No. 0-1743 and Lot No. 4035 C-4, consisting of 4,420 square meters and

covered by Tax Declaration No. 13750.

In 1979, Dalmacia died survived by her husband, Jacinto, and their six (6) children,to wit: Meliton, Eleuteria, Timoteo, Justo, Saturnino (now deceased) and Felipa.

On February 25, 1985, Jacinto, joined by his five (5) children, namely, Meliton,

Eleuteria, Timoteo, Justo and Saturnino, conveyed to his daughter Felipa and the

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latter's husband Domingo Lumayag the aforementioned Lot Nos. 4049 and 4035 C-

4. The instrument of conveyance is denominated asDeed of Sale with Pacto De

Retro.[3]Thereunder, it was stipulated that the consideration for the alleged sale of the

two (2) aforementioned lots was Twenty Thousand Pesos (P20,000.00) and that the

vendorsa retro have the right to repurchase the same lots within five (5) years from

the date of the execution of the instrument on February 25, 1985. It was likewise

agreed thereunder that in the event no purchase is effected within the said stipulated

period of five (5) years "conveyance shall become absolute and irrevocable without

the necessity of drawing up a new absolute deed of sale, subject to the requirements

of law regarding consolidation of ownership of real property."

On April 4, 1985, Jacinto died while undergoing treatment at theMHARS General

Hospital in Ozamiz City.

More than a decade later, or on August 28, 1996, the spouses Domingo Lumayag

and Felipa Nemeño-Lumayag filed with the RTC of Ozamiz City a petition for the

reconstitution of the owner's duplicate copy of OCT No. 0-1743 covering Lot No.

4049, one of the two lots subject of the earlierDeed of Sale with Pacto De Retro. In

that petition, the Lumayags alleged that said owner's duplicate copy of OCT No. 0-1743 was in Domingo's possession but the same was lost when a typhoon hit and

destroyed the couple's house in Talisay, Cebu on November 12, 1990. The petition

was opposed by the other heirs of Jacinto and Dalmacia who claimed that the

owner's duplicate copy of the same OCT was actually in the possession and custody

of their brother Meliton Nemeño, the administrator of the property, when it was

burned in a fire on May 22, 1992. In an order dated December 20, 1996,[4] the RTC

resolved said petition by ordering the issuance of a new owner's duplicate copy of

OCT No. 0-1743 and its delivery to the heirs of Jacinto and Dalmacia.

Such were the state of things when, on December 24, 1996, in the same RTC, the

heirs of Jacinto and Dalmacia, namely, their children Meliton, Eleuteria, Timoteo and

Justo and grandchildren Ricky and Daisy who are the heirs of Saturnino, (hereinafter

collectively referred to as the respondent heirs) filed against the spouses Domingo

Lumayag and Felipa N. Lumayag a complaint[5]forDeclaration of Contract

as Equitable Mortgage, Accounting and Redemption with Damages. In theircomplaint, docketed in the trial court as Civil Case No. 96-69 and raffled to Branch

35 thereof, the plaintiff heirs prayed that theDeed of Sale with Pacto De

Retro executed on February 25, 1985 in favor of the defendant spouses Domingo

Lumayag and Felipa N. Lumayag over Lot Nos. 4049 and 4035 C-4 be declared as



anequitable mortgage and considered as already redeemed, with accounting and

damages.

Essentially, the complaint alleged that the subjectDeed of Sale with Pacto De

Retro was executed only for the purpose of securing the payment of a loan of

P20,000.00 obtained from the defendant spouses in connection with the medication

and hospitalization of the then ailing Jacinto Nemeño. To support their claim that the

contract in question was an equitable mortgage, the plaintiff heirs materially pointed

out the following: (1) the grossly inadequate price of the subject lots considering that

Lot No. 4049 with an area of 5 hectares has a market value of P40,760.00 and an

assessed value of P15,230.00, as shown by Tax Declaration No. 94-07335-A, while

Lot No. 4035 C-4 with an area of 4,420 square meters has a market value of

P4,120.00 and an assessed value of P1,460.00, per Tax Declaration No. 94-07355-

A; (2) their (plaintiffs') continued payment of realty taxes; (3) the land title and tax

declaration remained in the names of Jacinto Nemeño and Dalmacia Dayangco-

Nemeño; (4) their possession, particularly Justo Nemeño's, of the subject lots with

the petitioner spouses only given two-thirds share of the harvest therefrom; and (5)

the pactum commissorium stipulation in the subject contract. Thus, the heirs pray for

a judgment (a) declaring the subjectDeed of Sale with Pacto de Retro asan equitable mortgage and considering the lots subject thereof as redeemed; (b)

ordering the defendant spouses to render an accounting of the fruits and/or income

of the coconut lands from 1985 to 1996 and to return whatever remains of the

amount with interest at the legal rate after deducting the P20,000.00 loan; and (c)

ordering the same defendants to pay litigation expenses and attorney's fees.

In their Answer,[6] the spouses Lumayag denied that the contract in question was

an equitable mortgage and claimed that the amount of P20,000.00 received by the

plaintiff heirs was the consideration for the sale of the two lots and not a loan. By

way of affirmative defenses, the spouses Lumayag asserted that the action was

already barred by laches and prescription and the complaint itself states no cause of

action.

With the pre-trial conference having failed to bring the parties to any amicable

settlement, trial on the merits ensued.

Eventually, in a decision[7] dated February 3, 1999, the trial court adjudged the

subjectDeed of Sale with Pacto De Retro as an equitable mortgage and ordered the



defendant spouses to reconvey Lot Nos. 4049 and 4035 C-4 to the plaintiff heirs for

P20,000.00. We quote thefallo of the decision:

WHEREFORE, in the light of the foregoing, judgment is hereby rendered to wit:

1. Declaring the Deed of Sale with Pacto de Retro marked annex "A" to the

Complaint as equitablemortgage;

2. Ordering the defendants to reconvey the properties in litigation to the plaintiffs

in the amount of P20,000.00 within 30 days after the decision has become final and

executory;

3. Ordering the defendants to pay the cost of this suit.

SO ORDERED.

Dissatisfied, both parties appealed to the CA. Unfortunately, for failure of the plaintiff

heirs to submit their appeal brief, their appeal was dismissed, leaving that of the

defendant spouses which was docketed asCA-G.R. CV No. 63230.

As stated at the threshold hereof, the appellate court, in itsDecision of September

30, 2003, affirmed that of the trial court but with the modification that the mortgaged

properties are subject to foreclosure should the respondents fail to redeem the same

within thirty (30) days from finality of the decision. More specifically, the CA decisiondispositively reads:

WHEREFORE, premises considered, the Decision dated February 3, 1999 rendered

by the Regional Trial Court, Branch 35, Ozamiz City in Civil Case No. 96-69 is

herebyAFFIRMED withMODIFICATION, in that [petitioners] could foreclose the

mortgaged properties in the event [private respondents] fail to exercise their right of

redemption within thirty (30) days from the finality of this decision.

SO ORDERED. (Words in brackets supplied.)

Explains the CA in its decision:

xxx xxx xxx

In the instant case, we hold that the deed of sale with pacto de retro is actually

an equitable mortgage. For one, the supposed price for the sale with pacto de

retro in the amount of P20,000.00 is unusually inadequate for the two (2) parcels of

land, the total area of which is almost 5.5 hectares. Also, [respondents heirs]

remained in possession of the subject properties even after the execution of the

subject instrument. Not only did [respondent heirs] retain possession of the subject



properties, they also paid for the realty taxes of the same. Indeed, as the trial court

found the transaction was one of anequitable mortgage,

Finally, the subject instrument provides that if the vendors a-retro, herein plaintiffs-

appellants, fails to exercise their right to redeem or repurchase the subject properties

within the period stipulated upon, then the conveyance shall be deemed to be an

absolute and irrevocable sale, without the necessity of executing any further deed.

Such stipulation is void for being a pactum commissorium. xxx

Having ruled that the instrument executed by the parties is one of

an equitable mortgage, [respondent heirs] can now redeem the mortgaged

properties from [petitioner spouses] within thirty (30) days from finality of this

decision. Otherwise, [petitioner spouses] would be given the option to foreclose the

mortgaged properties, for as a rule, in a real estate mortgage, when the principal

obligation is not paid when due, the mortgagee has the right to foreclose

the mortgage and to have the property seized and sold with the view of applying the

proceeds to the payment of the obligation. xxx. (Words in brackets supplied).

With their motion for reconsideration having been denied by the appellate court in its

equally impugned Resolution of January 9, 2004, petitioners are now with this

Courtvia the instant recourse on their submission that:

I

HON. COURT OF APPEALS GRAVELY ERRED IN NOT REVERSING THE

DECISION OF THE TRIAL COURT AND DISMISSING THE PRIVATE

RESPONDENTS' COMPLAINT ON GROUNDS OF LACHES AND OR

PRESCRIPTION.

II

HON. COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DEED OF

SALE WITH PACTO DE RETRO IS ACTUALLY AN EQUITABLE MORTGAGE.

III

THE DECISION RENDERED BY THE HON. COURT OF APPEALS IS NOT

SUPPORTED BY THE EVIDENCE AND CONTRARY TO LAW.[8]

WeDENY.



Petitioners initially put the CA to task for not dismissing the case considering that the

titles to the subject parcels of land had already been consolidated to them by

operation of law because the five (5)-year prescriptive period for the respondents to

repurchase expired in 1990.

Under a pacto de retro sale, title to and ownership of property are immediately

vested in the vendeea retro, subject only to the resolutory condition that the vendor

repurchases it within the stipulated period.[9] The failure of the vendora retro to

repurchase the property vests upon the vendeea retro by operation of law the

absolute title and ownership over the property sold.[10]

Here, there is no issue as regards the fact that the subjectDeed of Sale with Pacto

De Retro provided for a 5-year redemption period which expired on February 25,

1990. Evidently, then, the failure of the respondent heirs to redeem the properties

within the stipulated period indubitably vested the absolute title to and ownership

thereof to the petitioners.But such consequence would only be true if the

contract that was executed between the parties was indeed a pacto de

retro sale and not an equitable mortgage.

The two (2) courts below unanimously found that the subjectDeed of Sale with

Pacto De Retro, while purporting to be a sale, is in truth and in fact

an equitable mortgage. Such factual finding, more so when supported by the

evidence, as here, commands not only respect but even finality and is binding on

this Court.[11]

An equitable mortgage has been defined "as one which although lacking in some

formality, or form or words, or other requisites demanded by a statute, nevertheless

reveals the intention of the parties to charge real property as security for a debt, and

contains nothing impossible or contrary to law."[12]

Article 1602 of the Civil Code enumerates the instances when a contract, regardless

of its nomenclature, may be presumed to be an equitable mortgage, to wit:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument



extending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the

parties is that the transaction shall secure the payment of a debt or the performance

of any other obligation.

In any of the foregoing case, any money, fruits, or other benefit to be received by the

vendee as rent or otherwise shall be considered as interest which shall be subject to

the usury laws.

Article 1604 of the Civil Code provides that the provisions of Article 1602 shall also

apply to a contract purporting to be an absolute sale, and, in case of doubt, a

contract purporting to be a sale with right to repurchase shall be construed as

an equitable mortgage.[13]

The law requires the presence of any one and not the concurrence of all of the

circumstances enumerated under Article 1602,supra, to conclude that the

transaction is one of equitable mortgage. So it is that inSocorro Taopo Banga v.

Sps. Jose and Emeline Bello,[14] this Court, citing Aguirre v. CA,

[15] unequivocally

ruled:

The presence of even one of the circumstances in Article 1602 is sufficient basis to

declare a contract as one of equitable mortgage. The explicit provision of Article

1602 that any of those circumstances would suffice to construe a contract of sale to

be one of equitable mortgage is in consonance with the rule that law favors the least

transmission of property rights.To stress, the existence of any one of the

conditions under Article 1602, not a concurrence, nor an overwhelming

number of such circumstances, suffices to give rise to the presumption that

the contract is an equitablemortgage. (Emphasis ours)

Here, the CA correctly found the presence of not merely one but four (4)

circumstances indicative of the true nature of the subject transaction as

an equitable mortgage, to wit: (a) gross inadequacy of the contract price of

P20,000.00 for two (2) parcels of land, the total area of which is almost 5.5 hectares;

(b) respondent heirs remained in possession of the subject property even after the

execution of the supposedlyDeed of Sale with Pacto de Retro; (c) said respondents'



payment of realty taxes; and (d) the provision on pactum commissorium.

While we are not in full accord with the CA in its observation that the consideration of

the sale with right to repurchase is grossly inadequate since the market value and

assessed value of the two lots were not made on or before the date the subject

contract was executed on February 25, 1985 but only on June 8, 1994, still, there

are other circumstances convincing enough to support a conclusion that the

transaction in question is really an equitable mortgage.

Evidence is extant on record that the respondent heirs, as vendorsa retro, remained

in possession of the subject lots after the execution of the deed of sale with right to

repurchase. In stark contrast, evidence is wanting that petitioners ever enjoyed

possession thereof. If the transaction was really a sale with right to repurchase, as

claimed by the petitioners, then the latter should have asserted their rights for the

immediate delivery of the lots to them instead of allowing some of the respondents to

freely stay in the premises. Well-settled to the point of being elementary is the

doctrine that where the vendor remains in physical possession of the land as lessee

or otherwise, the contract should be treated as an equitable mortgage.[16]

As well, that the parties intended to enter into an equitable mortgage is further

accentuated by respondents' continued payment of the real property taxes

subsequent to the alleged sale. Payment of those taxes is a usual burden attached

to ownership and when, as here, such payment is coupled with continuous

possession of the property, it constitutes evidence of great weight that a person

under whose name the realty taxes were declared has a valid and rightful claim over

the land.[17]

Lastly, the stipulation in the subject deed reading: "if we fail to exercise our rights to

repurchase as herein granted within the period stipulated, then this conveyance shall

become absolute and irrevocable without the necessity of drawing a new absolute

Deed of Sale, subject to the requirements of law regarding consolidation of

ownership of real property," - is considered a pactum commissorium. This stipulation

is contrary to the nature of a true pacto de retrosale since in such sale, ownership of

the property sold is immediately transferred to the vendeea retro upon execution ofthe sale, subject only to the repurchase of a vendora retro within the stipulated

period.[18] Undoubtedly, the aforementioned stipulation is a pactum

commissorium because it enables the mortgagee to acquire ownership of the

mortgaged properties without need of any foreclosure proceedings which is a nullity



being contrary to the provisions of Article 2088[19] of the Civil Code. Indeed, the

inclusion of such stipulation in the deed shows the intention to mortgagerather than

to sell.

WHEREFORE, the instant petition isDENIED, and the assailed decision and

resolution of theCA in CA-G.R. CV No. 63230 areAFFIRMED.

Costs against petitioners.

SO ORDERED.

equitable mortgage 2

THIRD DIVISION

[ G.R. NO. 159048, October 11, 2005 ]

BENNY GO, PETITIONER, VS. ELIODORO BACARON,

RESPONDENT.

D E C I S I O N

PANGANIBAN, J.:

The present Contract, which purports to be an absolute deed of sale, should be

deemed an

equitable mortgage for the following reasons: (1) the consideration has

been proven to be unusually inadequate; (2) the supposed vendor has remained in

possession of the property even after the execution of the instrument; and (3) the

alleged seller has continued to pay the real estate taxes on the property.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to

set aside the October 17, 2002 Decision[2] and the May 20, 2003 Resolution

[3] of the

Court of Appeals (CA) in CA-GR CV No. 67218. The assailed Decision disposed as

follows:

"WHEREFORE, premises considered, the Decision dated February 24, 2000 of the

Regional Trial Court of Davao City, Branch 12, in Civil Case No. 25,101-97 is hereby





REVERSED and SET ASIDE and a new one is hereby rendered ordering the

reformation of the subject instrument, such that the same must be considered

a mortgage contract and not a transfer of right. Costs against [petitioner]."[4]

The assailed Resolution denied Reconsideration.

The Facts

The antecedents are narrated by the CA as follows:

"As evidenced by theTransfer of Rights dated October 1, 1993, Eliodoro Bacaron

conveyed a 15.3955-hectare parcel of land located in Langub, Talomo, Davao City,

in favor of Benny Go for P20,000.00.

"About a year thereafter, Bacaron, seeking to recover his property, went to Go to pay

his alleged P20,000.00 "loan" but the latter refused to receive the same and to return

his property saying that the transaction between the two of them was a sale and not

a mortgage as claimed by Bacaron.

"Consequently, on March 5, 1997, Eliodoro Bacaron, as plaintiff [herein respondent],

filed aComplaint for Reformation of Instrument with Damages and prayer for the

issuance of a writ of preliminary injunction, with the Regional Trial Court of Davao

City, Branch 12, against the [petitioner] Benny Go, which case was docketed as Civil

Case No. 25,101-97.

"In hisComplaint, [respondent] alleged that in the middle part of 1993, he suffered

business reversals which prompted him, being in urgent need of funds, to borrow

P20,000.00 from the [petitioner]. He however averred that prior to extending saidloan to him, the [petitioner] required him to execute a document purporting to be

aTransfer of Rights but was told that the same would only be a formality as he could

redeem the unregistered land the moment he pays the loan. Admitting that he signed

the instrument despite knowing that the same did not express the true intention of

the parties' agreement, i.e., that the transaction was a mere equitable mortgage, the

[respondent] explained that he did so only because he was in a very tight financial

situation and because he was assured by the [petitioner] that he could redeem his

property. To support this claim, [respondent] stressed the fact that the consideration

in the instrument was merely P20,000.00, which is grossly inadequate as the selling

price of a 15-hectare land considering that, at that time, the market value of land in

Davao City amounts to P100,000.00 per hectare. [Respondent] narrated that a year

thereafter, or in a middle part of 1994, he was able to raise the P20,000.00 and went



to the [petitioner] to pay his loan but the latter refused to accept his payment,

insisting that the transaction entered into by the parties was not

an equitable mortgage, as the [respondent] insists, but a real transfer of right over

the property. Because of said refusal, [respondent] continued, he was compelled to

refer the matter to his lawyer in order to request the [petitioner] to accept his

payment otherwise he would file the necessary action in court. Despite said formal

demand by the [respondent], however, [petitioner] allegedly continued to refuse to

recognize the "equitable mortgage", prompting [respondent] to consign the

P20,000.00 with the Clerk of Court of the RTC of Davao City, Branch 12. He thus

insisted that it is [petitioner] who is "dead wrong" in not recognizing

the equitablemortgage since, aside from the fact that the consideration was

unusually inadequate, [respondent] allegedly remained in possession of the

property.

"[Respondent] thus prayed for an award for moral damages, in view of the

[petitioner's] evident bad faith in refusing to recognize the equitable mortgage, and

for attorney's fees as [petitioner's] alleged stubbornness compelled him to engage

the services of counsel. He likewise sought an award for exemplary damages to

deter others from committing similar acts and at the same time asked the court toissue a writ of preliminary injunction and/or temporary restraining order to prevent

[petitioner] from dispossessing [respondent] of the subject property or from

disposing of the same in favor of third parties as these acts would certainly work

injustice for and cause irreparable damage to the [respondent]. The prayer for the

issuance of a restraining order was however denied by the court in anOrder.

"[Petitioner] filed his Answer on May 5, 1997, denying [respondent's] claim that the

transaction was only an equitable mortgage and not an actual transfer of right. He

asserted that the truth of the matter was that when [respondent] suffered business

reverses, his accounts with the [petitioner], as evidenced by postdated checks, cash

vouchers and promissory notes, remained unpaid and his total indebtedness,

exclusive of interests, amounted to P985,423.70. [Petitioner] further averred that, in

order to avoid the filing of cases against him, [respondent] offered to pay his

indebtedness throughdacion en pago, giving the land in question as full payment

thereof. In addition, he stressed that considering that the property is still untitled andthe [respondent] bought the same from one Meliton Bacarro for only P50,000.00, it is

most unreasonable for him to agree to accept said land in exchange for over a

million pesos of indebtedness. He claimed though that he was only forced to do so

when [respondent] told him that if he did not accept the offer, other creditors would



grab the same.

"By way of affirmative defenses, the [petitioner] pointed out that [respondent] has no

cause of action against him as the [respondent] failed to comply with the essential

requisites for an action for reformation of instrument. He moreover alleged that the

[respondent] is in estoppel because, by his own admission, he signed the document

knowing that the same did not express the true intention of the parties. Further,

[petitioner] claimed that there was a valid transfer of the property herein since the

consideration is not only the actual amount written in the instrument but it also

includes the outstanding obligation of [respondent] to the [petitioner] amounting to

almost P1 million.

"As counterclaim, [petitioner] averred that, because of this baseless complaint, he

suffered mental anguish, wounded feelings and besmirched reputation, entitling him

to moral damages amounting to P20,000.00, and that in order to deter others from

doing similar acts, exemplary damages amounting to P20,000.00 should likewise be

awarded in his favor. [Petitioner] also prayed for attorney's fees and litigation

expenses claiming that, because he was constrained to litigate, he was forced to hire

the services of counsel.

x x x x x x x x x

"Trial ensued and thereafter the trial court rendered itsDecision dated February 24,

2000 dismissing the complaint while finding the [petitioner's] counterclaim

meritorious. In making said ruling, the lower court, citing Article 1350 (should be

1359) of the New Civil Code, found that [respondent] failed to establish the existence

of all the requisites for an action for reformation by clear, convincing and competentevidence. Considering [respondent's] own testimony that he read the document and

fully understood the same, signing it without making any complaints to his lawyer,

the trial court held that the evidence on record shows that the subject instrument had

been freely and voluntarily entered into by the parties and that the same expresses

the true intention of the parties. The court further noted that the [respondent's] wife

even signed the document and that the same had been duly acknowledged by the

parties before a notary public as their "true act and voluntary deed."

"The trial court likewise observed that, contrary to [respondent's] claim that the

transaction was a meremortgage of the property, the terms of the instrument are

clear and unequivocable that the property subject of the document was "sold,

transferred, ceded and conveyed" to the [petitioner] "by way of absolute sale," and



hence, no extrinsic aids are necessary to ascertain the intention of the parties as the

same is determinable from the document itself. Moreover, said court emphasized

that considering the fact that [respondent] is an educated person, having studied in

an exclusive school like Ateneo de Davao, and an experienced businessman, he is

presumed to have acted with due care and to have signed the instrument with full

knowledge of its contents and import. [Respondent's] claim that he merely borrowed

money from the [petitioner] and mortgaged the property subject of litigation to

guarantee said loan was thus found to be specious by the court, which found that

the [respondent] was actually indebted to the [petitioner] for almost a million pesos

and that the true consideration of the sale was in fact said outstanding obligation.

"With respect to [respondent's] alleged possession of the property and payment of

real estate taxes, both of which were relied upon by the [respondent] to boost his

assertion that the transaction was merely anequitable mortgage, the trial court said

that his claim of possession is belied by the fact that the actual occupants of the

property recognize that the [petitioner] owns the same and in fact said occupants

prevented [respondent's] wife from entering the premises. The court, noting that the

[petitioner] also paid the realty taxes, was also of the opinion that [respondent]

merely made such payments in order to lay the basis of his allegation that thecontract was a mere equitable mortgage.

"Accordingly, the court held that [respondent] is also not entitled to his other claims

and that his unfounded action caused [petitioner] to an award for moral damages, in

addition to the expenses he incurred in defending his cause, i.e. services of a lawyer

and transportation and other expenses, which justifies an award for the

reimbursement of his expenses and attorney's fees.'[5]

Ruling of the Court of Appeals

Granting respondent's appeal, the appellate court ruled that the Contract entered

into by the parties should be deemed an

equitable mortgage, because the

consideration for the sale was grossly inadequate. By continuing to harvest the

crops and supervise his workers, respondent remained in control of the property.

True, upon the institution of this case, petitioner paid the required real estate taxesthat were still in arrears. Respondent, however paid the taxes for 1995, 1996 and

1997 -- the years between the dates when the alleged absolute sale was entered

into on October 1, 1993, and when this case was instituted on March 5, 1997.[6]



Granting respondent's prayer for reformation of the Contract, the CA ruled that the

instrument failed to reflect the true intention of the parties because of petitioner's

inequitable conduct.[7]

Hence, this Petition.[8]

The Issues

Petitioner raises the following issues for this Court's consideration:

"I.

Whether o[r] not the Court of Appeals erred in ruling that there was

inadequate consideration.

"II.

Whether o[r] not the Court of Appeals erred in ruling that the respondent

remained in possession of the land in question.

"III.

Whether or not the Court of Appeals erred in ruling that the taxes were not

paid by the petitioner.

"IV.

Whether or not the Court of Appeals erred in ruling that reformation is

proper."[9]

Simply put, these are the issues to be resolved: (1) whether the agreement entered

into by the parties was one forequitable mortgage or for absolute sale; and (2)

whether the grant of the relief of contract reformation was proper.

The Court's Ruling

The Petition has no merit.

First Issue:

Equitable

Mortgage



An equitable mortgage has been defined "as one which although lacking in some




The instances in which a contract of sale is presumed to be

an equitable mortgage are enumerated in Article 1602 of the Civil Code as follows:

"Art. 1602. The contract shall be presumed to be an equitable mortgage, in any

of the following cases:



(3) When upon or after the expiration of the right to repurchase another

instrument extending the period of redemption or granting a new period is

executed;



(6) In any other case where it may be fairly inferred that the real intention of

the parties is that the transaction shall secure the payment of a debt or the

performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received

by the vendee as rent or otherwise shall be considered as interest which shall

be subject to the usury laws."

Furthermore, Article 1604 of the Civil Code provides that "[t]he provisions of Article

1602 shall also apply to a contract purporting to be an absolute sale."

In the present case, three of the instances enumerated in Article 1602 -- grossly

inadequate consideration, possession of the property, and payment of realty taxes

--attended the assailed transaction and thus showed that it was indeed

anequitable mortgage.



Inadequate Consideration

Petitioner Go avers that the amount of P20,000 was not unusually inadequate. He

explains that the present parties entered into aDacion en Pago, whereby

respondent conveyed the subject property as payment for his outstanding debts to

petitioner -- debts supposedly amounting to P985,243.70.[11] To substantiate his

claim, petitioner presented the checks that respondent had issued, as well as the

latter's testimony purportedly admitting the genuineness and due execution of the

checks and the existence of the outstanding debts.[12] Petitioner Go contends that

respondent failed to establish by sufficient evidence that those debts had already

been paid.[13] Petitioner relies on the trial court's finding that respondent knowingly

and intentionally entered into a contract of sale, not an

equitable mortgage.[14]

On the other hand, Respondent Bacaron argues that the value of the property at the

time of the alleged sale was P120,000 per hectare, and that the indicated sale

amount of P20,000 was thus grossly iniquitous.[15] Allegedly, the previous cash

advances secured from petitioner's father had been settled, as evidenced by the fact

that petitioner did not negotiate further or encash the checks; the latter could havedone so, if the obligation was still extant.[16]Respondent points out that he paid for

that obligation with the coprax he had previously delivered to the father.[17]Petitioner

allegedly admitted this fact, though inadvertently, when he testified that respondent

had already paid some of the latter's previous cash advances.[18] Otherwise,

petitioner would have then set off his own debt to respondent (amounting to

P214,000) against the amount of almost one million pesos that the latter supposedly

owed him.[19]

Checks have the character of negotiability. At the same time, they may constitute

evidence of indebtedness.[20] Those presented by petitioner may indeed evince

respondent's indebtedness to him in the amounts stated on the faces of those

instruments. He, however, acknowledges (1) that respondent paid some of the

obligations through the coprax delivered to petitioner's father; and (2) that petitioner

owed and subsequently paid respondent P214,000.[21]

The parties' respective arguments show that the sum of P20,000, by itself, is

inadequate to justify the purported absolute Transfer of Rights.[22] Petitioner's claim

that there was a dacion en pago is not reflected on the instrument executed by the

parties. That claim, however, confirms the inadequacy of the P20,000 paid in



consideration of the Transfer of Rights; hence, the Contract does not reflect the true

intention of the parties. As to what their true intention was -- whetherdacion en

pago or equitable mortgage -- will have to be determined by some other means.

Possession

According to Article 1602(2) of the New Civil Code, one of the instances showing

that a purported contract of sale is presumed to be an equitable mortgage is when

the supposed vendor remains in possession of the property even after the

conclusion of the transaction.

In general terms, possession is the holding of a thing or the enjoyment of a right,

whether by material occupation or by the fact that the right -- or, as in this case, the

property -- is subjected to the will of the claimant.[23] InDirector of Lands v. Heirs of

Abaldonado,[24] the gathering of the products of and the act of planting on the land

were held to constitute occupation, possession and cultivation.

In the present case, the witnesses of respondent swore that they had seen him

gather fruits and coconuts on the property. Based on the cited case, the witnesses'testimonies sufficiently establish that even after the execution of the assailed

Contract, respondent has remained in possession of the property. The testimonies

proffered by petitioner's witnesses merely indicated that they were tenants of the

property. Petitioner only informed them that he was the new owner of the property.

This attempt at a factual presentation hardly signifies that he exercised possession

over the property. As held by the appellate court, petitioner's other witness (Redoña)

was unconvincing, because he could not even say whether he resided within the

premises.[25]

The factual findings of the trial court and the CA are conflicting and, hence, may be

reviewed by this Court.[26]Normally, the findings of the trial court on the credibility of

witnesses should be respected. Here, however, their demeanor while testifying is not

at issue. What is disputed is the substance of their testimonies -- the facts to which

they testified. Assuming that the witnesses of petitioner were indeed credible, their

testimonies were insufficient to establish that he enjoyed possession over theproperty.

Payment of Realty Taxes



Finally, petitioner asserts that the trial court's finding that he paid the realty taxes

should also be given corresponding weight.[27]

Respondent counters with the CA's findings that it was he who paid realty taxes on

the property. The appellate court concluded that he had paid taxes for the years

1995, 1996 and 1997 within each of those years; hence, before the filing of the

present controversy. In contrast, petitioner paid only the remaining taxes due on

October 17, 1997, or after the case had been instituted. This fact allegedly proves

that respondent has remained in possession of the property and continued to be its

owner.[28] He argues that if he had really transferred ownership, he would have been

foolish to continue paying for those taxes.[29]

On this point, we again rule for respondent.

Petitioner indeed paid the realty taxes on the property for the years 1980 to 1997.

The records show that the payments were all simultaneously made only on October

31, 1997, evidently in the light of the Complaint respondent had filed before the trial

court on March 5, 1997.[30] On the other hand, respondent continued to pay for the

realty taxes due on the property for the years 1995, 1996 and 1997.

[31]

That the parties intended to enter into an equitable mortgage is bolstered by

respondent's continued payment of the real property taxes subsequent to the alleged

sale. Payment of those taxes is a usual burden attached to ownership. Coupled with

continuous possession of the property, it constitutes evidence of great weight that a

person under whose name the realty taxes were declared has a valid and rightful

claim over the land.[32]

That the parties intended to enter into an equitable mortgage is also shown by the

fact that the "seller" was driven to obtain the loan at a time when he was in urgent

need of money; and that he signed the Deed of Sale, despite knowing that it did not

express the real intention of the parties.[33] In the present proceedings, the collapse

of his business prompted respondent to obtain the loan.[34] Petitioner himself

admitted that at the time they entered into the alleged absolute sale, respondent had

suffered from serious business reversals.[35]

Second Issue:

Reformation of Instrument



Petitioner claims that the CA erred in granting the remedy of reformation of

contracts. He avers that the failure of the instrument to express the parties' true

agreement was not due to his mistake; or to fraud, inequitable conduct, or accident.[36]


Ultimately, it is theintention of the parties that determines whether a contract is one

of sale or of mortgage.[37] In the present case, one of the parties to the contract

raises as an issue the fact that their true intention or agreement is not reflected in the

instrument. Under this circumstance, parol evidence becomes admissible and

competent evidence to prove the true nature of the instrument.[38] Hence, unavailing

is the assertion of petitioner that the interpretation of the terms of the Contract is

unnecessary, and that the parties clearly agreed to execute an absolute deed of

sale. His assertion does not hold, especially in the light of the provisions of Article

1604 of the Civil Code, under which even contracts purporting to be absolute sales

are subject to the provisions of Article 1602.

Moreover, under Article 1605 of the New Civil Code, the supposed vendor may ask

for the reformation of the instrument, should the case be among those mentioned in

Articles 1602 and 1604. Because respondent has more than sufficiently established

that the assailed Contract is in fact an equitable mortgage rather than an absolute

sale, he is allowed to avail himself of the remedy of reformation of contracts.

WHEREFORE, the Petition is herebyDENIED, and the assailed Decision and

Resolution AFFIRMED.

SO ORDERED.

equitable mortgageThe Facts

The antecedents are narrated by the CA as follows:

"As evidenced by theTransfer of Rights dated October 1, 1993, Eliodoro Bacaron

conveyed a 15.3955-hectare parcel of land located in Langub, Talomo, Davao City,

in favor of Benny Go for P20,000.00.

http://civillawabc.blogspot.com/2014/09/equitable-mortgage.html

http://civillawabc.blogspot.com/2014/09/equitable-mortgage.html



"About a year thereafter, Bacaron, seeking to recover his property, went to Go to pay

his alleged P20,000.00 "loan" but the latter refused to receive the same and to return

his property saying that the transaction between the two of them was a sale and not

a mortgage as claimed by Bacaron.

"Consequently, on March 5, 1997, Eliodoro Bacaron, as plaintiff [herein respondent],

filed aComplaint for Reformation of Instrument with Damages and prayer for the

issuance of a writ of preliminary injunction, with the Regional Trial Court of Davao

City, Branch 12, against the [petitioner] Benny Go, which case was docketed as Civil

Case No. 25,101-97.

"In hisComplaint, [respondent] alleged that in the middle part of 1993, he suffered

business reversals which prompted him, being in urgent need of funds, to borrow

P20,000.00 from the [petitioner]. He however averred that prior to extending said

loan to him, the [petitioner] required him to execute a document purporting to be

aTransfer of Rights but was told that the same would only be a formality as he could

redeem the unregistered land the moment he pays the loan. Admitting that he signed

the instrument despite knowing that the same did not express the true intention ofthe parties' agreement, i.e., that the transaction was a mere equitable mortgage, the

[respondent] explained that he did so only because he was in a very tight financial

situation and because he was assured by the [petitioner] that he could redeem his

property. To support this claim, [respondent] stressed the fact that the consideration

in the instrument was merely P20,000.00, which is grossly inadequate as the selling

price of a 15-hectare land considering that, at that time, the market value of land in

Davao City amounts to P100,000.00 per hectare. [Respondent] narrated that a year

thereafter, or in a middle part of 1994, he was able to raise the P20,000.00 and went

to the [petitioner] to pay his loan but the latter refused to accept his payment,

insisting that the transaction entered into by the parties was not

an equitable mortgage, as the [respondent] insists, but a real transfer of right over

the property. Because of said refusal, [respondent] continued, he was compelled to

refer the matter to his lawyer in order to request the [petitioner] to accept his

payment otherwise he would file the necessary action in court. Despite said formal

demand by the [respondent], however, [petitioner] allegedly continued to refuse torecognize the "equitable mortgage", prompting [respondent] to consign the

P20,000.00 with the Clerk of Court of the RTC of Davao City, Branch 12. He thus

insisted that it is [petitioner] who is "dead wrong" in not recognizing

the equitablemortgage since, aside from the fact that the consideration was



unusually inadequate, [respondent] allegedly remained in possession of the

property.

"[Respondent] thus prayed for an award for moral damages, in view of the

[petitioner's] evident bad faith in refusing to recognize the equitable mortgage, and

for attorney's fees as [petitioner's] alleged stubbornness compelled him to engage

the services of counsel. He likewise sought an award for exemplary damages to

deter others from committing similar acts and at the same time asked the court to

issue a writ of preliminary injunction and/or temporary restraining order to prevent

[petitioner] from dispossessing [respondent] of the subject property or from

disposing of the same in favor of third parties as these acts would certainly work

injustice for and cause irreparable damage to the [respondent]. The prayer for the

issuance of a restraining order was however denied by the court in anOrder.

"[Petitioner] filed his Answer on May 5, 1997, denying [respondent's] claim that the

transaction was only an equitable mortgage and not an actual transfer of right. He

asserted that the truth of the matter was that when [respondent] suffered business

reverses, his accounts with the [petitioner], as evidenced by postdated checks, cash

vouchers and promissory notes, remained unpaid and his total indebtedness,exclusive of interests, amounted to P985,423.70. [Petitioner] further averred that, in

order to avoid the filing of cases against him, [respondent] offered to pay his

indebtedness throughdacion en pago, giving the land in question as full payment

thereof. In addition, he stressed that considering that the property is still untitled and

the [respondent] bought the same from one Meliton Bacarro for only P50,000.00, it is

most unreasonable for him to agree to accept said land in exchange for over a

million pesos of indebtedness. He claimed though that he was only forced to do so

when [respondent] told him that if he did not accept the offer, other creditors would

grab the same.

"By way of affirmative defenses, the [petitioner] pointed out that [respondent] has no

cause of action against him as the [respondent] failed to comply with the essential

requisites for an action for reformation of instrument. He moreover alleged that the

[respondent] is in estoppel because, by his own admission, he signed the document

knowing that the same did not express the true intention of the parties. Further,[petitioner] claimed that there was a valid transfer of the property herein since the

consideration is not only the actual amount written in the instrument but it also

includes the outstanding obligation of [respondent] to the [petitioner] amounting to

almost P1 million.



"As counterclaim, [petitioner] averred that, because of this baseless complaint, he

suffered mental anguish, wounded feelings and besmirched reputation, entitling him

to moral damages amounting to P20,000.00, and that in order to deter others from

doing similar acts, exemplary damages amounting to P20,000.00 should likewise be

awarded in his favor. [Petitioner] also prayed for attorney's fees and litigation

expenses claiming that, because he was constrained to litigate, he was forced to hire

the services of counsel.

x x x x x x x x x

"Trial ensued and thereafter the trial court rendered itsDecision dated February 24,2000 dismissing the complaint while finding the [petitioner's] counterclaim

meritorious. In making said ruling, the lower court, citing Article 1350 (should be

1359) of the New Civil Code, found that [respondent] failed to establish the existence

of all the requisites for an action for reformation by clear, convincing and competent

evidence. Considering [respondent's] own testimony that he read the document and

fully understood the same, signing it without making any complaints to his lawyer,

the trial court held that the evidence on record shows that the subject instrument had

been freely and voluntarily entered into by the parties and that the same expresses

the true intention of the parties. The court further noted that the [respondent's] wife

even signed the document and that the same had been duly acknowledged by the

parties before a notary public as their "true act and voluntary deed."

"The trial court likewise observed that, contrary to [respondent's] claim that the

transaction was a meremortgage of the property, the terms of the instrument are

clear and unequivocable that the property subject of the document was "sold,transferred, ceded and conveyed" to the [petitioner] "by way of absolute sale," and

hence, no extrinsic aids are necessary to ascertain the intention of the parties as the

same is determinable from the document itself. Moreover, said court emphasized

that considering the fact that [respondent] is an educated person, having studied in

an exclusive school like Ateneo de Davao, and an experienced businessman, he is

presumed to have acted with due care and to have signed the instrument with full

knowledge of its contents and import. [Respondent's] claim that he merely borrowed

money from the [petitioner] and mortgaged the property subject of litigation to

guarantee said loan was thus found to be specious by the court, which found that

the [respondent] was actually indebted to the [petitioner] for almost a million pesos

and that the true consideration of the sale was in fact said outstanding obligation.



"With respect to [respondent's] alleged possession of the property and payment of

real estate taxes, both of which were relied upon by the [respondent] to boost his

assertion that the transaction was merely anequitable mortgage, the trial court said

that his claim of possession is belied by the fact that the actual occupants of the

property recognize that the [petitioner] owns the same and in fact said occupants

prevented [respondent's] wife from entering the premises. The court, noting that the

[petitioner] also paid the realty taxes, was also of the opinion that [respondent]

merely made such payments in order to lay the basis of his allegation that the

contract was a mere equitable mortgage.

"Accordingly, the court held that [respondent] is also not entitled to his other claims

and that his unfounded action caused [petitioner] to an award for moral damages, in

addition to the expenses he incurred in defending his cause, i.e. services of a lawyer

and transportation and other expenses, which justifies an award for the

reimbursement of his expenses and attorney's fees.'[5]

Ruling of the Court of Appeals

Granting respondent's appeal, the appellate court ruled that the Contract entered

into by the parties should be deemed an

equitable mortgage, because the

consideration for the sale was grossly inadequate. By continuing to harvest the

crops and supervise his workers, respondent remained in control of the property.

True, upon the institution of this case, petitioner paid the required real estate taxes

that were still in arrears. Respondent, however paid the taxes for 1995, 1996 and

1997 -- the years between the dates when the alleged absolute sale was entered

into on October 1, 1993, and when this case was instituted on March 5, 1997.[6]

Granting respondent's prayer for reformation of the Contract, the CA ruled that the

instrument failed to reflect the true intention of the parties because of petitioner's

inequitable conduct.[7]

Hence, this Petition.[8]

The Issues

Petitioner raises the following issues for this Court's consideration:

"I.



Whether o[r] not the Court of Appeals erred in ruling that there was

inadequate consideration.

"II.

Whether o[r] not the Court of Appeals erred in ruling that the respondent

remained in possession of the land in question.

"III.

Whether or not the Court of Appeals erred in ruling that the taxes were notpaid by the petitioner.

"IV.

Whether or not the Court of Appeals erred in ruling that reformation is

proper."[9]

Simply put, these are the issues to be resolved: (1) whether the agreement entered

into by the parties was one forequitable mortgage or for absolute sale; and (2)

whether the grant of the relief of contract reformation was proper.

The Court's Ruling

The Petition has no merit.

First Issue:

Equitable

Mortgage

An

equitable mortgage has been defined "as one which although lacking in some




The instances in which a contract of sale is presumed to be

an equitable mortgage are enumerated in Article 1602 of the Civil Code as follows:

"Art. 1602. The contract shall be presumed to be an equitable mortgage, in any

of the following cases:





(3) When upon or after the expiration of the right to repurchase another

instrument extending the period of redemption or granting a new period is

executed;



(6) In any other case where it may be fairly inferred that the real intention of

the parties is that the transaction shall secure the payment of a debt or the

performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received

by the vendee as rent or otherwise shall be considered as interest which shallbe subject to the usury laws."

Furthermore, Article 1604 of the Civil Code provides that "[t]he provisions of Article

1602 shall also apply to a contract purporting to be an absolute sale."

In the present case, three of the instances enumerated in Article 1602 -- grossly

inadequate consideration, possession of the property, and payment of realty taxes

--attended the assailed transaction and thus showed that it was indeedanequitable mortgage.

Inadequate Consideration

Petitioner Go avers that the amount of P20,000 was not unusually inadequate. He

explains that the present parties entered into aDacion en Pago, whereby

respondent conveyed the subject property as payment for his outstanding debts to

petitioner -- debts supposedly amounting to P985,243.70.[11] To substantiate his

claim, petitioner presented the checks that respondent had issued, as well as the

latter's testimony purportedly admitting the genuineness and due execution of the

checks and the existence of the outstanding debts.[12] Petitioner Go contends that

respondent failed to establish by sufficient evidence that those debts had already



been paid.[13] Petitioner relies on the trial court's finding that respondent knowingly

and intentionally entered into a contract of sale, not an equitable mortgage.[14]

On the other hand, Respondent Bacaron argues that the value of the property at the

time of the alleged sale was P120,000 per hectare, and that the indicated sale

amount of P20,000 was thus grossly iniquitous.[15] Allegedly, the previous cash

advances secured from petitioner's father had been settled, as evidenced by the fact

that petitioner did not negotiate further or encash the checks; the latter could have

done so, if the obligation was still extant.[16]Respondent points out that he paid for

that obligation with the coprax he had previously delivered to the father.[17]Petitioner

allegedly admitted this fact, though inadvertently, when he testified that respondent

had already paid some of the latter's previous cash advances.[18] Otherwise,

petitioner would have then set off his own debt to respondent (amounting to

P214,000) against the amount of almost one million pesos that the latter supposedly

owed him.[19]

Checks have the character of negotiability. At the same time, they may constitute

evidence of indebtedness.[20] Those presented by petitioner may indeed evince

respondent's indebtedness to him in the amounts stated on the faces of thoseinstruments. He, however, acknowledges (1) that respondent paid some of the

obligations through the coprax delivered to petitioner's father; and (2) that petitioner

owed and subsequently paid respondent P214,000.[21]

The parties' respective arguments show that the sum of P20,000, by itself, is

inadequate to justify the purported absolute Transfer of Rights.[22] Petitioner's claim

that there was a dacion en pago is not reflected on the instrument executed by the

parties. That claim, however, confirms the inadequacy of the P20,000 paid in

consideration of the Transfer of Rights; hence, the Contract does not reflect the true

intention of the parties. As to what their true intention was -- whetherdacion en

pago or equitable mortgage -- will have to be determined by some other means.

Possession

According to Article 1602(2) of the New Civil Code, one of the instances showingthat a purported contract of sale is presumed to be an equitable mortgage is when

the supposed vendor remains in possession of the property even after the

conclusion of the transaction.



In general terms, possession is the holding of a thing or the enjoyment of a right,

whether by material occupation or by the fact that the right -- or, as in this case, the

property -- is subjected to the will of the claimant.[23] InDirector of Lands v. Heirs of

Abaldonado,[24] the gathering of the products of and the act of planting on the land

were held to constitute occupation, possession and cultivation.

In the present case, the witnesses of respondent swore that they had seen him

gather fruits and coconuts on the property. Based on the cited case, the witnesses'

testimonies sufficiently establish that even after the execution of the assailed

Contract, respondent has remained in possession of the property. The testimonies

proffered by petitioner's witnesses merely indicated that they were tenants of the

property. Petitioner only informed them that he was the new owner of the property.

This attempt at a factual presentation hardly signifies that he exercised possession

over the property. As held by the appellate court, petitioner's other witness (Redoña)

was unconvincing, because he could not even say whether he resided within the

premises.[25]

The factual findings of the trial court and the CA are conflicting and, hence, may be

reviewed by this Court.

[26]

Normally, the findings of the trial court on the credibility ofwitnesses should be respected. Here, however, their demeanor while testifying is not

at issue. What is disputed is the substance of their testimonies -- the facts to which

they testified. Assuming that the witnesses of petitioner were indeed credible, their

testimonies were insufficient to establish that he enjoyed possession over the

property.

Payment of Realty Taxes

Finally, petitioner asserts that the trial court's finding that he paid the realty taxes

should also be given corresponding weight.[27]

Respondent counters with the CA's findings that it was he who paid realty taxes on

the property. The appellate court concluded that he had paid taxes for the years

1995, 1996 and 1997 within each of those years; hence, before the filing of the

present controversy. In contrast, petitioner paid only the remaining taxes due onOctober 17, 1997, or after the case had been instituted. This fact allegedly proves

that respondent has remained in possession of the property and continued to be its

owner.[28] He argues that if he had really transferred ownership, he would have been

foolish to continue paying for those taxes.[29]



On this point, we again rule for respondent.

Petitioner indeed paid the realty taxes on the property for the years 1980 to 1997.

The records show that the payments were all simultaneously made only on October

31, 1997, evidently in the light of the Complaint respondent had filed before the trial

court on March 5, 1997.[30] On the other hand, respondent continued to pay for the

realty taxes due on the property for the years 1995, 1996 and 1997.[31]

That the parties intended to enter into an equitable mortgage is bolstered by

respondent's continued payment of the real property taxes subsequent to the alleged

sale. Payment of those taxes is a usual burden attached to ownership. Coupled with

continuous possession of the property, it constitutes evidence of great weight that a

person under whose name the realty taxes were declared has a valid and rightful

claim over the land.[32]

That the parties intended to enter into an equitable mortgage is also shown by the

fact that the "seller" was driven to obtain the loan at a time when he was in urgent

need of money; and that he signed the Deed of Sale, despite knowing that it did notexpress the real intention of the parties.[33] In the present proceedings, the collapse

of his business prompted respondent to obtain the loan.[34] Petitioner himself

admitted that at the time they entered into the alleged absolute sale, respondent had

suffered from serious business reversals.[35]

Second Issue:

Reformation of Instrument

Petitioner claims that the CA erred in granting the remedy of reformation of

contracts. He avers that the failure of the instrument to express the parties' true

agreement was not due to his mistake; or to fraud, inequitable conduct, or accident.[36]


Ultimately, it is theintention of the parties that determines whether a contract is one

of sale or of mortgage.[37] In the present case, one of the parties to the contract

raises as an issue the fact that their true intention or agreement is not reflected in the

instrument. Under this circumstance, parol evidence becomes admissible and



competent evidence to prove the true nature of the instrument.[38] Hence, unavailing

is the assertion of petitioner that the interpretation of the terms of the Contract is

unnecessary, and that the parties clearly agreed to execute an absolute deed of

sale. His assertion does not hold, especially in the light of the provisions of Article

1604 of the Civil Code, under which even contracts purporting to be absolute sales

are subject to the provisions of Article 1602.

Moreover, under Article 1605 of the New Civil Code, the supposed vendor may ask

for the reformation of the instrument, should the case be among those mentioned in

Articles 1602 and 1604. Because respondent has more than sufficiently established

that the assailed Contract is in fact an equitable mortgage rather than an absolute

sale, he is allowed to avail himself of the remedy of reformation of contracts.

WHEREFORE, the Petition is herebyDENIED, and the assailed Decision and

Resolution AFFIRMED.

SO ORDERED.

A redhibitory defect must be an imperfection or defect

of such nature as to engender a certain degree of

importance.

SECOND DIVISION

[ G.R. No. 73913, January 31, 1989 ]

JERRY T.

MOLES, PETITIONER, VS. INTERMEDIATE APPELLATE

COURT AND MARIANO M. DIOLOSA, RESPONDENTS.

D E C I S I O N

REGALADO, J.:

This petition for review oncertiorari assails the decision of the then Intermediate

Appellate Court[1] dismissing the complaint filed by herein petitioner against the

herein private respondent in the former Court of First Instance of Negros Occidental

in Civil Case No. 13821 thereof.[2]

http://civillawabc.blogspot.com/2014/09/a-redhibitory-defect-must-be.html








The factual backdrop of this controversy, as culled from the records,[3] shows that on

May 17, 1978, petitioner Jerry T.Moles commenced a suit against private respondent

Mariano M. Diolosa in the aforesaid trial court, Branch IV in Bacolod City, for

rescission of contract with damages. Private respondent moved to dismiss on the

ground of improper venue, invoking therefor Sales Invoice No. 075A executed

between petitioner and private respondent on April 23, 1977 which provides that "all

judicial actions arising from this contract shall be instituted in the City of Iloilo".[4] This

was opposed by petitioner who averred that there is no formal document evidencing

the sale which is substantially verbal in character. In an order dated June 23, 1978,

the trial court denied the motion to dismiss, holding that the question of venue could

not be resolved at said stage of the case. The subsequent motion for

reconsideration was likewise denied.

Consequently, private respondent, invoking the aforesaid venue stipulation,

proceeded to this Court on a petition for prohibition with preliminary injunction in

G.R. No. 49078, questioning the validity of the order denying his aforesaid two

motions and seeking to enjoin the trial court from further proceeding with the case.

This petition was dismissed for lack of merit in a resolution of the Court, datedFebruary 7, 1979, and which became final on March 15, 1979. Thereafter, private

respondent filed his answer and proceeded to trial.

The aforecited records establish that sometime in 1977, petitioner needed a linotype

printing machine for his printing business, the LM Press at Bacolod City, and applied

for an industrial loan with the Development Bank of the Philippines (hereinafter,

DBP) for the purchase thereof. An agent of Smith, Bell and Co. who is a friend of

petitioner introduced the latter to private respondent, owner of the Diolosa Publishing

House in Iloilo City, who had two available machines. Thereafter, petitioner went to

Iloilo City to inspect the two machines offered for sale and was informed that the

same were secondhand but functional.

On his second visit to the Diolosa Publishing House, petitioner together with Rogelio

Yusay, a letterpress machine operator, decided to buy the linotype machine, Model

14. The transaction was basically verbal in nature but to facilitate the loanapplication with the DBP, a pro forma invoice, dated April 23, 1977 and reflecting the

amount of P50,000.00 as the consideration of the sale, was signed by petitioner with

an addendum that payment had not yet been made but that he promised to pay the

full amount upon the release of his loan from the aforementioned bank on or before



the end of the month.[5] Although the agreed selling price was only P40,000.00, the

amount on the invoice was increased by P10,000.00, said increase being intended

for the purchase of new matrices for said machine.

Sometime between April and May, 1977, the machine was delivered to petitioner's

publishing house at Tangub, Bacolod City where it was installed by one Crispino

Escurido, an employee of respondent Diolosa. Another employee of the Diolosa

Publishing House, Tomas Plondaya, stayed at petitioner's house for almost a month

to train the latter's cousin in operating the machine.[6]

Under date of August 29, 1977, private respondent issued a certification wherein he

warranted that the machine sold was in "A-1 condition", together with other express

warranties.[7]

Prior to the release of the loan, a representative from the DBP, Bacolod Branch,

supposedly inspected the machine but he merely looked at it to see that it was there.[8] The inspector's recommendation was favorable and, thereafter, petitioner's loan of

P50,000.00 was granted and released. However, before payment was made to

private respondent, petitioner required the former, in a letter dated September 30,1977, to accomplish the following, with the explanations indicated by him:

1) Crossed check for P15,407.10 representing:

a: P1!,!!!"!! . O(erprice in the machineG

b: P 2!A"!! . @reight and handling of the machineG

c: P 2!A"!! . &hare in the electric repairG and

d: P 5,!!!"!! . #nsurance that rispin will come bac and repair the

linot%pe machine at sellerFs account as pro(ided in the

contractG after rispin has put e(er%thing in order when he

goes home on &unda% he will return the chec of

P15,!!!"!!"

2) Official receipt in the amount of P50,000.00 as full payment of the linotype

machine.

These were immediately complied with by private respondent and on the same day,

September 30, 1977, he received the DBP check for P50,000.00.[9]



It is to be noted that aforesaid official receipt No. 0451, dated September 30, 1977

and prepared and signed by private respondent, expressly states that he received

from the petitioner "the DBP check for P50,000.00 issued in our favor in full payment

of one (1) Unit Model 14 Linotype Machine as perPro forma Invoice dated April 23,

1977".[10]

On November 29, 1977, petitioner wrote private respondent that the machine was

not functioning properly as it needed a new distributor bar. In the same letter,

petitioner unburdened himself of his grievances and sentiments in this wise:

"We bought this machine in good faith because we trusted you very much being our

elder brother in printing and publishing business. We did not hire anybody to look

over the machine, much more ask for a rebate in your price of P40,000.00 and

believed what your trusted two men, Tomas and Crispin, said although they were

hiding the real and actual condition of the machine for your business protection.

"Until last week, we found out the worst ever to happen to us. We have been

cheated because the expert of the Linotype machine from Manila says, that the most

he will buy your machine is at P5,000.00 only. x x x."[11]

Private respondent made no reply to said letter, so petitioner engaged the services

of other technicians. Later, after several telephone calls regarding the defects in the

machine, private respondent sent two technicians to make the necessary repairs but

they failed to put the machine in running condition. In fact, since then petitioner was

never able to use the machine.[12]

On February 18, 1978, not having received from private respondent the actionrequested in his preceding letter as hereinbefore stated, petitioner again wrote

private respondent, this time with the warning that he would be forced to seek legal

remedies to protect his interests.[13]

Obviously in response to the foregoing letter, private respondent decided to

purchase a new distributor bar and, on March 16, 1978, private respondent delivered

this spare part to petitioner through one Pedro Candido. However, when thereafter

petitioner asked private respondent to pay for the price of the distributor bar, the

latter asked petitioner to share the cost with him. Petitioner thus finally decided to

indorse the matter to his lawyer.

An expert witness for the petitioner, one Gil Legaspina, declared that he inspected



the linotype machine involved in this case at the instance of petitioner. In his

inspection thereof, he found the following defects: (1) the vertical automatic stop

lever in the casting division was worn out; (2) the justification lever had a slight

breach (balanain the dialect); (3) the distributor bar was worn out; (4) the partition at

the entrance channel had a tear; (5) there was no "pie stacker" tube entrance; and

(6) the slouch arm lever in the driving division was worn out.

It turned out that the said linotype machine was the same machine that witness

Legaspina had previously inspected for Sy Brothers, a firm which also wanted to buy

a linotype machine for their printing establishment. Having found defects in said

machine, the witness informed Sy Brothers about his findings, hence the purchase

was aborted. In his opinion, major repairs were needed to put the machine back in

good running condition.[14]

After trial, the courta quo rendered a decision the dispositive portion of which reads:

"IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered

as follows:

(1) Decreeing the rescission of the contract of sale involving one linotype machine

No. 14 between the defendant as seller and the plaintiff as buyer;

(2) Ordering the plaintiff to return to the defendant at the latter's place of business

in Iloilo City the linotype machine aforementioned together with all accessories that

originally were delivered to the plaintiff;

(3) Ordering the defendant to return to the plaintiff the sum of Forty ThousandPesos (P40,000.00) representing the price of the linotype machine, plus interest at

the legal rate counted from May 17, 1978 when this action was instituted, until fully

paid;

(4) Ordering the defendant to indemnify the plaintiff the sum of Four Thousand

Five Hundred Pesos (P4,500.00) representing unearned income or actual damages;

(5) Ordering the defendant to pay the plaintiff the sum of One Thousand Pesos

(P1,000.00) for attorney's fees.

Costs against the defendant."[15]



From this decision, private respondent appealed to the Intermediate Appellate Court

which reversed the judgment of the lower court and dismissed petitioner's complaint,

hence the present petition.

We find merit in petitioner's cause.

On the matter of venue, private respondent relies on the aforementioned Sales

Invoice No. 075A which allegedly requires that the proper venue should be Iloilo City

and not Bacolod City. We agree with petitioner that said document is not the

contract evidencing the sale of the linotype machine, it being merely a preliminary

memorandum of a proposal to buy one linotype machine, using for such purpose a

printed form used for printing job orders in private respondent's printing business.

As hereinbefore explained, this issue on venue was brought to Us by private

respondent in a special civil action for prohibition with preliminary injunction in G.R.

No. 49078. After considering the allegations contained, the issues raised and the

arguments adduced in said petition, as well as the comments thereto, the Court

dismissed the petition for lack of merit. Respondent court erred in reopening the

same issue on appeal, with a contrary ruling.

Furthermore, it was error for the respondent court, after adopting the factual findings

of the lower court, to reverse the latter's holding that the sales invoice is merely

a pro forma memorandum. The records do not show that this finding is grounded

entirely on speculation, surmises or conjectures as to warrant a reversal thereof.[16] In

fact, as hereinbefore stated, private respondent expressly admitted in his official

receipt No. 0451, dated September 30, 1977, that the said sales invoice was merely

a pro forma invoice. Consequently, the printed provisions therein, especially since

the printed form used was for purposes of other types of transactions, could not have

been intended by the parties to govern their transaction on the printing machine. It

is obvious that a venue stipulation, in order to bind the parties, must have been

intelligently and deliberately intended by them to exclude their case from the

reglementary rules on venue. Yet, even such intended variance may not necessarily

be given judicial approval, as, for instance, where there are no restrictive or

qualifying words in the agreement indicating that venue cannot be laid in any place

other than that agreed upon by the parties,[17]

and in contracts of adhesion.[18]

Now, when an article is sold as a secondhand item, a question arises as to whether

there is an implied warranty of its quality or fitness. It is generally held that in the

sale of a designated and specific article sold as secondhand, there is no implied



warranty as to its quality or fitness for the purpose intended, at least where it is

subject to inspection at the time of the sale. On the other hand, there is also

authority to the effect that in a sale of secondhand articles there may be, under

some circumstances, an implied warranty of fitness for the ordinary purpose of the

article sold or for the particular purpose of the buyer.[19]

In a line of decisions rendered by the United States Supreme Court, it had

theretofore been held that there is no implied warranty as to the condition,

adaptation, fitness, or suitability for the purpose for which made, or the quality, of an

article sold as and for a secondhand article.[20]

Thus, in finding for private respondent, the respondent court cited the ruling inSison

vs. Ago, et al.[21] to the effect that unless goods are sold as to raise an implied

warranty, as a general rule there is no implied warranty in the sale of secondhand

articles.[22]

Said general rule, however, is not without exceptions. Article 1562 of our Civil Code,

which was taken from the Uniform Sales Act, provides:

"Art. 1562. In a sale of goods, there is an implied warranty or condition as to the

quality or fitness of the goods, as follows:

(1) Where the buyer, expressly or by implication, makes known to the seller the

particular purpose for which the goods are acquired, and it appears that the buyer

relies on the seller's skill or judgment (whether he be the grower or manufacturer or

not), there is an implied warranty that the goods shall be reasonably fit for such

purpose;"

x x x x x x x x x

InDrumar Mining Co. vs. Morris Ravine Mining Co.,[23] the District Court of Appeals,

3rd District, California, in applying a similar provision of law, ruled:

"There is nothing in the Uniform Sales Act declaring there is no implied warranty in

the sale of secondhand goods. Section 1735 of the Civil Code declares there is noimplied warranty or condition as to the quality or fitness for any particular purpose, of

goods supplied under a contract to sell, or a sale, except (this general statement is

followed by an enumeration of several exceptions). It would seem that the

legislature intended this section to apply to all sales of goods, whether new or



secondhand. In subdivision 1 of this section, this language is used: 'Where the

buyer x x x makes known to the seller the particular purpose for which the goods are

required, and it appears that the buyer relies on the seller's skill or judgment x x x

there is an implied warranty that the goods shall be reasonably fit for such purpose.'"

Furthermore, and of a more determinative role in this case, a perusal of past

American decisions[24] likewise reveals a uniform pattern of rulings to the effect that

an express warranty can be made by and also be binding on the seller even in the

sale of a secondhand article.

In the aforecited case ofMarkman vs. Hallbeck, while holding that there was an

express warranty in the sale of a secondhand engine, the court said that it was not

error to refuse an instruction that upon the sale of secondhand goods no warranty

was implied, since secondhand goods might be sold under such circumstances as to

raise an implied warranty.

To repeat, in the case before Us, a certification to the effect that the linotype

machine bought by petitioner was in A-1 condition was issued by private respondent

in favor of the former. This cannot but be considered as an express warranty.

However, it is private respondent's submission, that the same is not binding on him,

not being a part of the contract of sale between them. This contention is bereft of

substance.

It must be remembered that the certification was a conditionsine qua non for the

release of petitioner's loan which was to be used as payment for the purchase price

of the machine. Private respondent failed to refute this material fact. Neither does

he explain why he made that express warranty on the condition of the machine if he

had not intended to be bound by it. In fact, the respondent court, in declaring thatpetitioner should have availed of the remedy of requiring repairs as provided for in

said certification, thereby considered the same as part and parcel of the verbal

contract between the parties.

On the basis of the foregoing circumstances, the inescapable conclusion is that

private respondent is indeed bound by the express warranty he executed in favor of

herein petitioner.

We disagree with respondent court that private respondent's express warranty as to

the A-1 condition of the machine was merely "dealer's talk". Private respondent was

not a dealer of printing or linotype machines to whom could be ascribed the

supposed resort to the usual exaggerations of trade in said items. His certification



as to the condition of the machine was not made to induce petitioner to purchase it

but to confirm in writing for purposes of the financing aspect of the transaction his

representations thereon. Ordinarily, what does not appear on the face of the written

instrument should be regarded as dealer's or trader's talk;[25] conversely, what is

specifically represented as true said document, as in the instant case, cannot be

considered as mere dealer's talk.

On the question as to whether the hidden defects in the machine is sufficient to

warrant a rescission of the contract between the parties, We have to consider the

rule on redhibitory defects contemplated in Article 1561 of the Civil Code. A

redhibitory defect must be an imperfection or defect of such nature as to engender a

certain degree of importance. An imperfection or defect of little consequence does

not come within the category of being redhibitory.[26]

As already narrated, an expert witness for the petitioner categorically established

that the machine required major repairs before it could be used. This, plus the fact

that petitioner never made appropriate use of the machine from the time of purchase

until an action was filed, attest to the major defects in said machine, by reason of

which the rescission of the contract of sale is sought. The factual finding, therefore,of the trial court that the machine is not reasonably fit for the particular purpose for

which it was intended must be upheld, there being ample evidence to sustain the

same.

At a belated stage of this appeal, private respondent came up for the first time with

the contention that the action for rescission is barred by prescription. While it is true

that

Article 1571 of the Civil Code provides for a prescriptive

period of six months for a redhibitory action

, a cursory reading of

the ten preceding articles to which it refers will reveal that said rule may be applied

only in case of implied warranties.The present case involves one

with an express warranty. Consequently, the general rule

on rescission of contract, which is four years[27] shall

apply.Considering that the original case for rescission was filed only one year

after the delivery of the subject machine, the same is well within the prescriptive

period. This is aside from the doctrinal rule that the defense of prescription is waived

and cannot be considered on appeal if not raised in the trial court,[28] and this case

does not have the features for an exception to said rule.



WHEREFORE, the judgment of dismissal of the respondent court is hereby

REVERSED and SET ASIDE, and the decision of the court a quo is hereby

REINSTATED.

SO ORDERED.