Francisco G. Banzon For Petitioner. Renecio R. Espiritu For Private Respondents

Today is Friday, June 20, 2014
Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. L-68053 May 7, 1990
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO
YANES, ROSARIO YANES, and ILUMINADO YANES, respondents.
Francisco G. Banzon for petitioner.
Renecio R. Espiritu for private respondents.

FERNAN, C.J.:
This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division
of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al.
v. Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of Negros
Occidental insofar as it ordered the petitioners to pay jointly and severally the private respondents the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental and reversing the subject decision insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees, respectively and (b) the resolution of said
appellate court dated May 30, 1984, denying the motion for reconsideration of its decision.
The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally
known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square
meters, was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858
(8804) issued on October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A).
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita,
Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio
and Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib.
1
It is not clear
why the latter is not included as a party in this case.
Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not
attend to the other portions of the two lots which had a total area of around twenty-four hectares. The record does
not show whether the children of Felipe also cultivated some portions of the lots but it is established that Rufino
and his children left the province to settle in other places as a result of the outbreak of World War II. According to
Estelita, from the "Japanese time up to peace time", they did not visit the parcels of land in question but "after
liberation", when her brother went there to get their share of the sugar produced therein, he was informed that
Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were in possession of Lot 773.
2
It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694
(29797) covering Lot 773-A with an area of 37,818 square meters.
3
TCT No. RF 2694 describes Lot 773-A as a
portion of Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804.
The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of
Fortunato D. Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ).
4
Said transfer certificate of title
also contains a certification to the effect that Lot 773-B was originally registered under OCT No. 8804.
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum
of P7,000.00.
5
Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebella's name.
6
After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de
Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a
motion requesting authority to sell Lots 773-A and 773-B.
7
By virtue of a court order granting said motion,
8
on March
24, 1958, Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez.
9
Hence, on April 1, 1958 TCT Nos.
T-23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo Alvarez.
10
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita,
Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato
Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of
the ownership and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the
land from 1944 up to the filing of the complaint be made by the defendants, that after court approval of said
accounting, the share or money equivalent due the plaintiffs be delivered to them, and that defendants be
ordered to pay plaintiffs P500.00 as damages in the form of attorney's fees.
11
During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another
lot for P25,000.00 to Dr. Rodolfo Siason.
12
Accordingly, TCT Nos. 30919 and 30920 were issued to Siason,
13
who
thereafter, declared the two lots in his name for assessment purposes.
14
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs, and
assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce,
forfeit and quitclaims (sic) any claim, monetary or otherwise, against the defendant Arsenia Vda. de Fuentebella
in connection with the above-entitled case."
15
On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case
No. 5022, the dispositive portion of which reads:
WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the
plaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered
by Transfer Certificates of Title Nos. T-23165 and T-23166 in the name of said defendant, and
thereafter to deliver the possession of said lots to the plaintiffs. No special pronouncement as to
costs.
SO ORDERED.
16
It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid
decision.
However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated
October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and
773-B; that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773
could not be delivered to the plaintiffs as Siason was "not a party per writ of execution."
17
The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the
Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a
new certificate of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo
Alvarez.
18
Thereafter, the court required Rodolfo Siason to produce the certificates of title covering Lots 773 and 823.
Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and
823, "in good faith and for a valuable consideration without any knowledge of any lien or encumbrances against
said properties"; that the decision in the cadastral proceeding
19
could not be enforced against him as he was not a
party thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only because he was
not a party-litigant therein but also because it had long become final and executory.
20
Finding said manifestation to be well-
founded, the cadastral court, in its order of September 4, 1965, nullified its previous order requiring Siason to surrender the
certificates of title mentioned therein.
21
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022.
Siason opposed it.
22
In its order of September 28, 1968 in Civil Case No. 5022, the lower court, noting that the Yaneses
had instituted another action for the recovery of the land in question, ruled that at the judgment therein could not be enforced
against Siason as he was not a party in the case.
23
The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages.
24
Named
defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of Deeds of
Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to Siason (sic) for
being null and void; the issuance of a new certificate of title in the name of the Yaneses "in accordance with the sheriffs
return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery
thereof could not be effected, or, if the issuance of a new title could not be made, that the Alvarez and Siason jointly and
severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason render an accounting of the fruits of Lot
773 from November 13, 1961 until the filing of the complaint; and that the defendants jointly and severally pay the Yaneses
moral damages of P20,000.00 and exemplary damages of P10,000.00 plus attorney's fees of P4, 000.00.
25
In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been
passed upon by the court in its order of September 4, 1965, had become res judicata and the Yaneses were
estopped from questioning said order.
26
On their part, the Alvarez stated in their answer that the Yaneses' cause of
action had been "barred by res judicata, statute of limitation and estoppel."
27
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in
question thru an agent as he was then in Mexico pursuing further medical studies, was a buyer in good faith for a
valuable consideration. Although the Yaneses were negligent in their failure to place a notice of lis pendens
"before the Register of Deeds of Negros Occidental in order to protect their rights over the property in question" in
Civil Case No. 5022, equity demanded that they recover the actual value of the land because the sale thereof
executed between Alvarez and Siason was without court approval.
28
The dispositive portion of the decision states:
IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following
manner:
A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby
dismmissed,
B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children
of the deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the
sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre,
Negros Occidental; the sum of P2,000.00 as actual damages suffered by the plaintiff; the sum of
P5,000.00 representing moral damages and the sum of P2.000 as attorney's fees, all with legal rate
of interest from date of the filing of this complaint up to final payment.
C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora
and Raymundo, all surnamed Alvarez is hereby dismissed.
D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the
costs of this suit.
SO ORDERED.
29
The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31, 1983
30
affirmed
the lower court's decision "insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffs-appellees the
sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages,
moral damages and attorney's fees, respectively."
31
The dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to
pay jointly and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual value
of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed
insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral
damages and attorney's fees, respectively. No costs.
SO ORDERED.
32
Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same.
Hence, the instant petition. ln their memorandum petitioners raised the following issues:
1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked
and raised by the petitioners in the lower court.
2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any,
as alleged in their complaint dated February 21, 1968 which has been docketed in the trial court as
Civil Case No. 8474 supra, are forever barred by statute of limitation and/or prescription of action and
estoppel.
3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of
the petitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil Case
No. 8474, supra where the private respondents had unqualifiedly and absolutely waived, renounced
and quitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and
773-B of Murcia Cadastre as appearing in their written manifestation dated November 6, 1962
(Exhibits "4" Siason) which had not been controverted or even impliedly or indirectly denied by them.
4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A
and 773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed or
transmitted by operations (sic) of law to the petitioners without violation of law and due process .
33
The petition is devoid of merit.
As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review
the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents.
Said decision had long become final and executory and with the possible exception of Dr. Siason, who was not a
party to said case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended
when Alvarez or his heirs failed to appeal the decision against them.
34
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with
them in law or estate.
35
As consistently ruled by this Court, every litigation must come to an end. Access to the court is
guaranteed. But there must be a limit to it. Once a litigant's right has been adjudicated in a valid final judgment of a
competent court, he should not be granted an unbridled license to return for another try. The prevailing party should not be
harassed by subsequent suits. For, if endless litigation were to be allowed, unscrupulous litigations will multiply in number to
the detriment of the administration of justice.
36
There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in
Civil Case No. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have
been illegally deprived of ownership and possession of the lots in question.
37
In fact, Civil Case No. 8474 now under
review, arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private
respondents Yaneses, the same having been sold during the pendency of the case by the petitioners' father to Dr. Siason
who did not know about the controversy, there being no lis pendens annotated on the titles. Hence, it was also settled
beyond question that Dr. Siason is a purchaser in good faith.
Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on
November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil
Case No. 5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the
actual value of the subdivided lots in dispute. It did not order defendant Siason to pay said amount.
38
As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose
property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser
for value, for damages.
39
"It is one thing to protect an innocent third party; it is entirely a different matter and one devoid
of justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious decided As clearly
revealed by the undeviating line of decisions coming from this Court, such an undesirable eventuality is precisely sought to
be guarded against."
40
The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor
of private respondents, it cannot now be reopened in the instant case on the pretext that the defenses of
prescription and estoppel have not been properly considered by the lower court. Petitioners could have appealed
in the former case but they did not. They have therefore foreclosed their rights, if any, and they cannot now be
heard to complain in another case in order to defeat the enforcement of a judgment which has longing become
final and executory.
Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo
Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his
death.
Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus, the
pertinent provisions of the Civil Code state:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law.
Art. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.
Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case
where the rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not liable beyond the value of the property received from
the decedent.
As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon
Surety Co., Inc.
41
The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of
our Rules of Court that money debts of a deceased must be liquidated and paid from his estate
before the residue is distributed among said heirs (Rule 89). The reason is that whatever payment is
thus made from the state is ultimately a payment by the heirs or distributees, since the amount of the
paid claim in fact diminishes or reduces the shares that the heirs would have been entitled to receive.
Under our law, therefore. the general rule is that a party's contractual rights and obligations are
transmissible to the successors.
The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties
that, as observed by Victorio Polacco has characterized the history of these institutions. From the
Roman concept of a relation from person to person, the obligation has evolved into a relation from
patrimony to patrimony with the persons occupying only a representative position, barring those rare
cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of
its performance by a specific person and by no other.
xxx xxx xxx
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their
father's transaction, which gave rise to the present claim for damages. That petitioners did not inherit the property
involved herein is of no moment because by legal fiction, the monetary equivalent thereof devolved into the mass
of their father's hereditary estate, and we have ruled that the hereditary assets are always liable in their totality for
the payment of the debts of the estate.
42
It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance. With
this clarification and considering petitioners' admission that there are other properties left by the deceased which
are sufficient to cover the amount adjudged in favor of private respondents, we see no cogent reason to disturb
the findings and conclusions of the Court of Appeals.
WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Gutierrez, Jr., Feliciano and Cortes, JJ., concur.
Bidin J., took no part.

Footnotes
1 TSN, October 17, 1973, pp. 4-5.
2 TSN, December 11, 1973, pp. 11 & 55.
3 Exhibits 26 and 28.
4 Exhibit 27.
5 Exhibit B Alvarez.
6 Exhibits 23 and 24-Siason.
7 Exh. I-Alvarez Exh. 17-Siason.
8 Exh. 2-Alvarez.
9 Exh. 3-Alvarez.
10 Exh. 2-Siason.
11 Civil Case No. 5022; Exhibit B.
12 Exhibit F.
13 Exhibits 12 and 13.
14 Exhibits 10, 11, 14 and 15.
15 Exhibit 4-Alvarez.
16 Record on Appeal, p. 25.
17 Exhibit E.
18 Cad. Case No. 6; Exhibit 3.
19 Cad. Case No. 6.
20 Exhibit 5.
21 Exhibit 6.
22 Exhibit 78.
23 Exhibit 9.
24 Civil Case No. 8474.
25 Record on Appeal, pp. 8-9.
26 Record on Appeal, p. 36.
27 Ibid., p. 63.
28 Ibid, pp. 95-99.
30 Porfirio V. Siason, Jr. J., ponente. Abdulwahid A. Bidin, Marcelino R. Velocio and Desiderio P.
Jurado, JJ., concurring.
31 Rollo, p. 32.
32 Rollo, p. 32.
33 Rollo, p. 119.
34 Rollo, p. 27.
35 Miranda v. C.A., 141 SCRA 302 [1986].
36 Ngo Bun Tiong v. Judge Sayo, G.R. No. 45825, June 30, 1988.
38 Rollo, p. 27.
39 Quiniano et al. v. C.A., 39 SCRA 221 [1971].
40 Ibid.
41 100 Phil. 388.
42 Lopez vs. Enriquez, 16 Phil. 336 (1910).
The Lawphil Project - Arellano Law Foundation
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77029 August 30, 1990
BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO, all surnamed, GEVERO,
petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT CORPORATION, respondents.
Carlito B. Somido for petitioners.
Benjamin N. Tabios for private respondent.

PARAS, J.:
This is a petition for review on certiorari of the March 20, 1988 decision
1
of the then Intermediate Appellate Court
(now Court of Appeals) in AC-GR CV No. 69264, entitled Del Monte Development Corporation vs. Enrique Ababa, et al., etc.
affirming the decision
2
of the then Court of First Instance (now Regional Trial Court) of Misamis Oriental declaring the
plaintiff corporation as the true and absolute owner of that portion of Lot 476 of the Cagayan Cadastre, particularly Lot No.
2476-D of the subdivision plan (LRC) Psd-80450, containing an area of Seven Thousand Eight Hundred Seventy Eight
(7,878) square meters more or less.
As found by the Appellate Court, the facts are as follows:
The parcel of land under litigation is Lot No. 2476 of the Subdivision Plan Psd-37365 containing an
area of 20,119 square meters and situated at Gusa, Cagayan de Oro City. Said lot was acquired by
purchase from the late Luis Lancero on September 15, 1964 as per Deed of Absolute Sale executed
in favor of plaintiff and by virtue of which Transfer Certificate of Title No. 4320 was issued to plaintiff
(DELCOR for brevity). Luis Lancero, in turn acquired the same parcel from Ricardo Gevero on
February 5, 1952 per deed of sale executed by Ricardo Gevero which was duly annotated as entry
No. 1128 at the back of Original Certificate of Title No. 7610 covering the mother lot identified as Lot
No. 2476 in the names of Teodorica Babangha 1/2 share and her children: Maria; Restituto,
Elena, Ricardo, Eustaquio and Ursula, all surnamed surnamed Gevero, 1/2 undivided share of the
whole area containing 48,122 square meters.
Teodorica Babangha died long before World War II and was survived by her six children
aforementioned. The heirs of Teodorica Babangha on October 17,1966 executed an Extra-Judicial
Settlement and Partition of the estate of Teodorica Babangha, consisting of two lots, among them
was lot 2476. By virtue of the extra-judicial settlement and partition executed by the said heirs of
Teodorica Babangha, Lot 2476-A to Lot 2476-I, inclusive, under subdivision plan (LRC) Psd-80450
duly approved by the Land Registration Commission, Lot 2476-D, among others, was adjudicated to
Ricardo Gevero who was then alive at the time of extra-judicial settlement and partition in 1966.
Plaintiff (private respondent herein) filed an action with the CFI (now RTC) of Misamis Oriental to
quiet title and/or annul the partition made by the heirs of Teodorica Babangha insofar as the same
prejudices the land which it acquired a portion of lot 2476.
Plaintiff now seeks to quiet title and/or annul the partition made by the heirs of Teodorica Babangha
insofar as the same prejudices the land which it acquired, a portion of Lot 2476. Plaintiff proved that
before purchasing Lot 2476-A it first investigated and checked the title of Luis Lancero and found the
same to be intact in the office of the Register of Deeds of Cagayan de Oro City. The same with the
subdivision plan (Exh. "B"), the corresponding technical description (Exh. "P") and the Deed of Sale
executed by Ricardo Gevero all of which were found to be unquestionable. By reason of all these,
plaintiff claims to have bought the land in good faith and for value, occupying the land since the sale
and taking over from Lancero's possession until May 1969, when the defendants Abadas forcibly
entered the property. (Rollo, p. 23)
After trial the court a quo on July 18, 1977 rendered judgment, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the plaintiff corporation
as the true and absolute owner of that portion of Lot No. 2476 of the Cagayan Cadastre, particularly
Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an area of SEVEN THOUSAND
EIGHT HUNDRED SEVENTY EIGHT (7,878) square meters, more or less. The other portions of Lot
No. 2476 are hereby adjudicated as follows:
Lot No. 2476 B to the heirs of Elena Gevero;
Lot No. 2476 C to the heirs of Restituto Gevero;
Lot No. 2476 E to the defendant spouses Enrique C. Torres and Francisca Aquino;
Lot No. 2476 F to the defendant spouses Eduard Rumohr and Emilia Merida Rumohf ;
Lot Nos. 2476-H, 2476-I and 2476 G to defendant spouses Enrique Abada and Lilia Alvarez
Abada.
No adjudication can be made with respect to Lot No. 2476-A considering that the said lot is the
subject of a civil case between the Heirs of Maria Gevero on one hand and the spouses Daniel
Borkingkito and Ursula Gevero on the other hand, which case is now pending appeal before the
Court of Appeals. No pronouncement as to costs,
SO ORDERED. (Decision, Record on Appeal, p. 203; Rollo, pp. 21-22)
From said decision, defendant heirs of Ricardo Gevero (petitioners herein) appealed to the IAC (now Court of
Appeals) which subsequently, on March 20, 1986, affirmed the decision appealed from.
Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, p. 28) but was denied on April 21, 1986.
Hence, the present petition.
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are: 1) whether or not the deed of sale executed by
Ricardo Gevero to Luis Lancero is valid; 2) in the affirmative, whether or not the 1/2 share of interest of
Teodorica Babangha in one of the litigated lots, lot no. 2476 under OCT No. 7610 is included in the deed of
sale; and 3) whether or not the private respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely invalid citing alleged flaws thereto, such as that: 1) the
signature of Ricardo was forged without his knowledge of such fact; 2) Lancero had recognized the fatal defect of
the 1952 deed of sale when he signed the document in 1968 entitled "Settlement to Avoid the Litigation"; 3)
Ricardo's children remained in the property notwithstanding the sale to Lancero; 4) the designated Lot No. is
2470 instead of the correct number being Lot No. 2476; 5) the deed of sale included the share of Eustaquio
Gevero without his authority; 6) T.C.T. No. 1183 of Lancero segregated the area of 20,119 square meters from
the bigger area (OCT No. 7616) without the consent of the other co-owners; 7) Lancero caused the 1952
Subdivision survey without the consent of the Geveros' to bring about the segregation of the 20,119 square
meters lot from the mother lot 2476 which brought about the issuance of his title T-1183 and to DELCOR's title
T4320, both of which were illegally issued; and 8) the area sold as per document is 20,649 square meters
whereas the segregated area covered by TCT No. T-1183 of Lancero turned out to be 20,119 square meters
(Petitioners Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the 1952 deed of sale in favor of Lancero was forged
without Ricardo's knowledge of such fact (Rollo, p. 71) it will be observed that the deed of sale in question was
executed with all the legal formalities of a public document. The 1952 deed was duly acknowledged by both
parties before the notary public, yet petitioners did not bother to rebut the legal presumption of the regularity of
the notarized document (Dy v. Sacay, 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423, March 13, 1989).
In fact it has long been settled that a public document executed and attested through the intervention of the
notary public is evidence of the facts in clear, unequivocal manner therein expressed. It has the presumption of
regularity and to contradict all these, evidence must be clear, convincing and more than merely preponderant
(Rebuleda v. I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot be presumed, it must be proven (Siasat v. IAC,
No. 67889, October 10, 1985). Likewise, petitioners allegation of absence of consideration of the deed was not
substantiated. Under Art. 1354 of the Civil Code, consideration is presumed unless the contrary is proven.
As to petitioners' contention that Lancero had recognized the fatal defect of the 1952 deed when he signed the
document in 1968 entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule of evidence that the right
of a party cannot be prejudiced by an act, declaration, or omission of another (Sec. 28. Rule 130, Rules of Court).
This particular rule is embodied in the maxim "res inter alios acta alteri nocere non debet." Under Section 31, Rule
130, Rules of Court "where one derives title to property from another, the act, declaration, or omission of the
latter, while holding the title, in relation to the property is evidence against the former." It is however stressed that
the admission of the former owner of a property must have been made while he was the owner thereof in order
that such admission may be binding upon the present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905];
Medel v. Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of executing the 1968 document
have no binding effect on DELCOR, the ownership of the land having passed to DELCOR in 1964.
Petitioners' claim that they remained in the property, notwithstanding the alleged sale by Ricardo to Lancero
(Rollo, p. 71) involves a question of fact already raised and passed upon by both the trial and appellate courts.
Said the Court of Appeals:
Contrary to the allegations of the appellants, the trial court found that Luis Lancero had taken
possession of the land upon proper investigation by plaintiff the latter learned that it was indeed Luis
Lancero who was the owner and possessor of Lot 2476 D. . . . (Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De Gola-Sison v. Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A.,
14 SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54 [1967]; Ramirez Tel.
Co. v. Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA
130 [1986]).
Suffice it to say that the other flaws claimed by the petitioners which allegedly invalidated the 1952 deed of sale
have not been raised before the trial court nor before the appellate court. It is settled jurisprudence that an issue
which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the
first time on appeal as it would be offensive to the basic rules of fair play, justice and due process. (Matienzo v.
Servidad, 107 SCRA 276 [1981]; Dela Santa v. C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434
[1987]; Anchuelo v. IAC, 147 SCRA 434 [1987]; Dulos Realty and Development Corporation v. C.A., 157 SCRA
[1988]; Kamos v. IAC, G.R. No. 78282, July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of Ricardo) in Lot 2476 under OCT No. 7610
was not included in the deed of sale as it was intended to limit solely to Ricardos' proportionate share out of the
undivided 1/2 of the area pertaining to the six (6) brothers and sisters listed in the Title and that the Deed did not
include the share of Ricardo, as inheritance from Teodorica, because the Deed did not recite that she was
deceased at the time it was executed (Rollo, pp. 67-68).
The hereditary share in a decedents' estate is transmitted or vested immediately from the moment of the death of
the "causante" or predecessor in interest (Civil Code of the Philippines, Art. 777), and there is no legal bar to a
successor (with requisite contracting capacity) disposing of his hereditary share immediately after such death,
even if the actual extent of such share is not determined until the subsequent liquidation of the estate (De Borja v.
Vda. de Borja, 46 SCRA 577 [1972]).
Teodorica Babangha died long before World War II, hence, the rights to the succession were transmitted from the
moment of her death. It is therefore incorrect to state that it was only in 1966, the date of extrajudicial partition,
when Ricardo received his share in the lot as inheritance from his mother Teodorica. Thus, when Ricardo sold his
share over lot 2476 that share which he inherited from Teodorica was also included unless expressly excluded in
the deed of sale.
Petitioners contend that Ricardo's share from Teodorica was excluded in the sale considering that a paragraph of
the aforementioned deed refers merely to the shares of Ricardo and Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed as to harmonize and give effect to the different
provisions thereof (Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]), to ascertain the
meaning of the provisions of a contract, its entirety must be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA
83 [1970]). The interpretation insisted upon by the petitioners, by citing only one paragraph of the deed of sale,
would not only create contradictions but also, render meaningless and set at naught the entire provisions thereof.
Petitioners claim that DELCOR's action is barred by laches considering that the petitioners have remained in the
actual, open, uninterrupted and adverse possession thereof until at present (Rollo, p. 17).
An instrument notarized by a notary public as in the case at bar is a public instrument (Eacnio v. Baens, 5 Phil.
742). The execution of a public instrument is equivalent to the delivery of the thing (Art. 1498, 1st Par., Civil Code)
and is deemed legal delivery. Hence, its execution was considered a sufficient delivery of the property
(Buencamino v. Viceo, 13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca,
108 Phil. 900 [1960]; Phil. Suburban Development Corp. v. Auditor Gen., 63 SCRA 397 (1975]).
Besides, the property sold is a registered land. It is the act of registration that transfers the ownership of the land
sold. (GSIS v. C.A., G.R. No. 42278, January 20, 1989). If the property is a registered land, the purchaser in
good, faith has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws
(Mallorca v. De Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710 [1988]; Nuguid v. CA-
G.R. No. 77427, March 13, 1989).
Under the established principles of land registration law, the person dealing with registered land may generally
rely on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to
determine the condition of the property (Tiongco v. de la Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R. No.
49739, January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This notwithstanding, DELCOR did
more than that. It did not only rely on the certificate of title. The Court of Appeals found that it had first
investigated and checked the title (T.C.T. No. T-1183) in the name of Luis Lancero. It likewise inquired into the
Subdivision Plan, the corresponding technical description and the deed of sale executed by Ricardo Gevero in
favor of Luis Lancero and found everything in order. It even went to the premises and found Luis Lancero to be in
possession of the land to the exclusion of any other person. DELCOR had therefore acted in good faith in
purchasing the land in question.
Consequently, DELCOR's action is not barred by laches.
The main issues having been disposed of, discussion of the other issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby DISMISSED and the decision of the Court of Appeals is
hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairman), Padilla and Regalado, JJ., concur.
Sarmiento, J., is on leave.

Footnotes
1 Penned by Justice Jose C. Campos, Jr. with the concurrence of Justices Crisolito Pascual, Serapin
Camilon and Desiderio P. Jurado.
2 Penned by Judge Benjamin K. Gorospe.
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 89783 February 19, 1992
MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN, MATILDE L. CORDERO,
SALVADOR B. LOCSIN and MANUEL V. DEL ROSARIO, petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO JAUCIAN, MERCEDES JAUCIAN
ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF EDUARDO JAUCIAN and HEIRS OF VICENTE
JAUCIAN, respondents.
Aytona Law Office and Siquia Law Offices for petitioners.
Mabella, Sangil & Associates for private respondents.

NARVASA, C.J.:
Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-11186 affirming with modification the
judgment of the Regional Trial Court of Albay in favor of the plaintiffs in Civil Case No. 7152 entitled "Jose
Jaucian, et al. v. Mariano B. Locsin, et al.," an action for recovery of real property with damages is sought. in
these proceedings initiated by petition for review on certiorari in accordance with Rule 45 of the Rules of Court.
The petition was initially denied due course and dismissed by this Court. It was however reinstated upon a second
motion for reconsideration filed by the petitioners, and the respondents were required to comment thereon. The
petition was thereafter given due course and the parties were directed to submit their memorandums. These,
together with the evidence, having been carefully considered, the Court now decides the case.
First, the facts as the Court sees them in light of the evidence on record:
The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all surnamed Locsin. He
owned extensive residential and agricultural properties in the provinces of Albay and Sorsogon. After his death,
his estate was divided among his three (3) children as follows:
(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, were adjudicated to his daughter,
Magdalena Locsin;
(b) 106 hectares of coconut lands were given to Julian Locsin, father of the petitioners Julian, Mariano, Jose,
Salvador, Matilde, and Aurea, all surnamed Locsin;
(c) more than forty (40) hectares of coconut lands in Bogtong, eighteen (18) hectares of riceland in Daraga, and
the residential lots in Daraga, Albay and in Legazpi City went to his son Mariano, which Mariano brought into his
marriage to Catalina Jaucian in 1908. Catalina, for her part, brought into the marriage untitled properties which
she had inherited from her parents, Balbino Jaucian and Simona Anson. These were augmented by other
properties acquired by the spouses in the course of their union,
1
which however was not blessed with children.
Eventually, the properties of Mariano and Catalina were brought under the Torrens System. Those that Mariano
inherited from his father, Getulio Locsin, were surveyed cadastrally and registered in the name of "Mariano
Locsin, married to Catalina Jaucian.''
2
Mariano Locsin executed a Last Will and Testament instituting his wife, Catalina, as the sole and universal heir of
all his properties.
3
The will was drawn up by his wife's nephew and trusted legal adviser, Attorney Salvador Lorayes.
Attorney Lorayes disclosed that the spouses being childless, they had agreed that their properties, after both of them shall
have died should revert to their respective sides of the family, i.e., Mariano's properties would go to his "Locsin relatives"
(i.e., brothers and sisters or nephews and nieces), and those of Catalina to her "Jaucian relatives."
4
Don Mariano Locsin died of cancer on September 14, 1948 after a lingering illness. In due time, his will was
probated in Special Proceedings No. 138, CFI of Albay without any opposition from both sides of the family. As
directed in his will, Doa Catalina was appointed executrix of his estate. Her lawyer in the probate proceeding was
Attorney Lorayes. In the inventory of her husband's estate
5
which she submitted to the probate court for approval,
6
Catalina declared that "all items mentioned from Nos. 1 to 33 are the private properties of the deceased and form part of his
capital at the time of the marriage with the surviving spouse, while items Nos. 34 to 42 are conjugal."
7
Among her own and Don Mariano's relatives, Doa Catalina was closest to her nephew, Attorney Salvador
Lorayes, her nieces, Elena Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the husbands of the
last two: Hostilio Cornelio and Fernando Velasco. 8 Her trust in Hostilio Cornelio was such that she made him custodian of all the titles of
her properties; and before she disposed of any of them, she unfailingly consulted her lawyer-nephew, Attorney Salvador Lorayes. It was Atty. Lorayes who
prepared the legal documents and, more often than not, the witnesses to the transactions were her niece Elena Jaucian, Maria Lorayes-Cornelio, Maria
Olbes-Velasco, or their husbands. Her niece, Elena Jaucian, was her life-long companion in her house.
Don Mariano relied on Doa Catalina to carry out the terms of their compact, hence, nine (9) years after his
death, as if in obedience to his voice from the grave, and fully cognizant that she was also advancing in years,
Doa Catalina began transferring, by sale, donation or assignment, Don Mariano's as well as her own, properties
to their respective nephews and nieces. She made the following sales and donation of properties which she had
received from her husband's estate, to his Locsin nephews and nieces:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES
23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481
favor of Mariano Locsin
1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000
Jose R. Locsin
1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
2 Feb. 4, 1975 Deed of Donation in 34,045
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
3 Sept. 9, 1975 Deed of Donation in (Lot 2059)
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio
favor of Aurea B. Locsin Fernando Velasco
5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Cornelio
favor of Aurea B. Locsin Elena Jaucian
6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto -
favor of Aurea B. Locsin
7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto -
favor of Aurea B. Locsin
15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto -
Aurea Locsin
16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson
Aurea Locsin M. Acabado
17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito
Aurea Locsin Mariano B. Locsin
19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto -
favor of Mariano Locsin
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 Delfina Anson
in favor of Manuel V. del (Lot 2155) Antonio Illegible
Rosario whose maternal
grandfather was Getulio
Locsin
2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio Illegible
in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals
from bigger portion of
Lot 2155 leased to Filoil
Refinery were assigned to
Maria Jaucian Lorayes
Cornelio
Of her own properties, Doa Catalina conveyed the following to her own nephews and nieces and others:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE
2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000
Vicente Jaucian (lot 2020)
(6,825 sqm. when
resurveyed)
24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000
in favor of Francisco M.
Maquiniana
26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300
favor of Francisco
Maquiniana
27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000
favor of Ireneo Mamia
28 May 3, 1973 Deed of Absolute Sale in 75 P 750
favor of Zenaida Buiza
29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500
favor of Felisa Morjella
30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000
favor of Inocentes Motocinos
31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500
favor of Casimiro Mondevil
32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200
favor of Juan Saballa
25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500
of Rogelio Marticio
Doa Catalina died on July 6, 1977.
Four years before her death, she had made a will on October 22, 1973 affirming and ratifying the transfers she
had made during her lifetime in favor of her husband's, and her own, relatives. After the reading of her will, all the
relatives agreed that there was no need to submit it to the court for probate because the properties devised to
them under the will had already been conveyed to them by the deceased when she was still alive, except some
legacies which the executor of her will or estate, Attorney Salvador Lorayes, proceeded to distribute.
In 1989, or six (6) years after Doa Catalina's demise, some of her Jaucian nephews and nieces who had already
received their legacies and hereditary shares from her estate, filed action in the Regional Trial Court of Legaspi
City (Branch VIII, Civil Case No. 7152) to recover the properties which she had conveyed to the Locsins during
her lifetime, alleging that the conveyances were inofficious, without consideration, and intended solely to
circumvent the laws on succession. Those who were closest to Doa Catalina did not join the action.
After the trial, judgment was rendered on July 8, l985 in favor of the plaintiffs (Jaucian), and against the Locsin
defendants, the dispositive part of which reads:
WHEREFORE, this Court renders judgment for the plaintiffs and against the defendants:
(1) declaring the, plaintiffs, except the heirs of Josefina J. Borja and Eduardo Jaucian, who withdrew,
the rightful heirs and entitled to the entire estate, in equal portions, of Catalina Jaucian Vda. de
Locsin, being the nearest collateral heirs by right of representation of Juan and Gregorio, both
surnamed Jaucian, and full-blood brothers of Catalina;
(2) declaring the deeds of sale, donations, reconveyance and exchange and all other instruments
conveying any part of the estate of Catalina J. Vda. de Locsin including, but not limited to those in the
inventory of known properties (Annex B of the complaint) as null and void ab-initio;
(3) ordering the Register of Deeds of Albay and/or Legazpi City to cancel all certificates of title and
other transfers of the real properties, subject of this case, in the name of defendants, and derivatives
therefrom, and issue new ones to the plaintiffs;
(4) ordering the defendants, jointly and severally, to reconvey ownership and possession of all such
properties to the plaintiffs, together with all muniments of title properly endorsed and delivered, and
all the fruits and incomes received by the defendants from the estate of Catalina, with legal interest
from the filing of this action; and where reconveyance and delivery cannot be effected for reasons
that might have intervened and prevent the same, defendants shall pay for the value of such
properties, fruits and incomes received by them, also with legal interest from the filing, of this case
(5) ordering each of the defendants to pay the plaintiffs the amount of P30,000.00 as exemplary
damages; and the further sum of P20,000.00 each as moral damages; and
(6) ordering the defendants to pay the plaintiffs attorney's fees and litigation expenses, in the amount
of P30,000.00 without prejudice to any contract between plaintiffs and counsel.
Costs against the defendants.
9
The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) which rendered its now appealed
judgment on March 14, 1989, affirming the trial court's decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring the private respondents, nephews and nieces of Doa
Catalina J. Vda. de Locsin, entitled to inherit the properties which she had already disposed of more than ten (10)
years before her death. For those properties did not form part of her hereditary estate, i.e., "the property and
transmissible rights and obligations existing at the time of (the decedent's) death and those which have accrued
thereto since the opening of the succession."
10
The rights to a person's succession are transmitted from the moment
of his death, and do not vest in his heirs until such time.
11
Property which Doa Catalina had transferred or conveyed to
other persons during her lifetime no longer formed part of her estate at the time of her death to which her heirs may lay
claim. Had she died intestate, only the property that remained in her estate at the time of her death devolved to her legal
heirs; and even if those transfers were, one and all, treated as donations, the right arising under certain circumstances to
impugn and compel the reduction or revocation of a decedent's gifts inter vivos does not inure to the respondents since
neither they nor the donees are compulsory (or forced) heirs.
12
There is thus no basis for assuming an intention on the part of Doa Catalina, in transferring the properties she
had received from her late husband to his nephews and nieces, an intent to circumvent the law in violation of the
private respondents' rights to her succession. Said respondents are not her compulsory heirs, and it is not
pretended that she had any such, hence there were no legitimes that could conceivably be impaired by any
transfer of her property during her lifetime. All that the respondents had was an expectancy that in nowise
restricted her freedom to dispose of even her entire estate subject only to the limitation set forth in Art. 750, Civil
Code which, even if it were breached, the respondents may not invoke:
Art. 750. The donation may comprehend all the present property of the donor or part thereof,
provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and
of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported
by the donor. Without such reservation, the donation shall be reduced on petition of any person
affected. (634a)
The lower court capitalized on the fact that Doa Catalina was already 90 years old when she died on July 6,
1977. It insinuated that because of her advanced years she may have been imposed upon, or unduly influenced
and morally pressured by her husband's nephews and nieces (the petitioners) to transfer to them the properties
which she had inherited from Don Mariano's estate. The records do not support that conjecture.
For as early as 1957, or twenty-eight (28) years before her death, Doa Catalina had already begun transferring
to her Locsin nephews and nieces the properties which she received from Don Mariano. She sold a 962-sq.m. lot
on January 26, 1957 to his nephew and namesake Mariano Locsin II.
13
On April 7, 1966, or 19 years before she
passed away, she also sold a 43 hectare land to another Locsin nephew, Jose R. Locsin.
14
The next year, or on March 22,
1967, she sold a 5,000-sq.m. portion of Lot 2020 to Julian Locsin.
15
On March 27, 1967, Lot 2020
16
was partitioned by and among Doa Catalina, Julian Locsin, Vicente Jaucian and
Agapito Lorete.
17
At least Vicente Jaucian, among the other respondents in this case, is estopped from assailing the
genuineness and due execution of the sale of portions of Lot 2020 to himself, Julian Locsin, and Agapito Lorete, and the
partition agreement that he (Vicente) concluded with the other co-owners of Lot 2020.
Among Doa, Catalina's last transactions before she died in 1977 were the sales of property which she made in
favor of Aurea Locsin and Mariano Locsin in 1975.
18
There is not the slightest suggestion in the record that Doa Catalina was mentally incompetent when she made
those dispositions. Indeed, how can any such suggestion be made in light of the fact that even as she was
transferring properties to the Locsins, she was also contemporaneously disposing of her other properties in favor
of the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964 (21 years before her death) one-half
(or 5,000 sq.m.) of Lot 2020. Three years later, or on March 22, 1967, she sold another 5000 sq.m. of the same
lot to Julian Locsin.
19
From 1972 to 1973 she made several other transfers of her properties to her relatives and other persons,
namely: Francisco Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos, Casimiro
Mondevil, Juan Saballa and Rogelio Marticio.
20
None of those transactions was impugned by the private respondents.
In 1975, or two years before her death, Doa Catalina sold some lots not only to Don Mariano's niece, Aurea
Locsin, and his nephew, Mariano Locsin
II,
21
but also to her niece, Mercedes Jaucian Arboleda.
22
If she was competent to make that conveyance to Mercedes,
how can there be any doubt that she was equally competent to transfer her other pieces of property to Aurea and Mariano
II?
The trial court's belief that Don Mariano Locsin bequeathed his entire estate to his wife, from a "consciousness of
its real origin" which carries the implication that said estate consisted of properties which his wife had inherited
from her parents, flies in the teeth of Doa Catalina's admission in her inventory of that estate, that "items 1 to 33
are the private properties of the deceased (Don Mariano) and forms (sic) part of his capital at the time of the
marriage with the surviving spouse, while items 34 to 42 are conjugal properties, acquired during the marriage."
She would have known better than anyone else whether the listing included any of her paraphernal property so it
is safe to assume that none was in fact included. The inventory was signed by her under oath, and was approved
by the probate court in Special Proceeding No. 138 of the Court of First Instance of Albay. It was prepared with
the assistance of her own nephew and counsel, Atty. Salvador Lorayes, who surely would not have prepared a
false inventory that would have been prejudicial to his aunt's interest and to his own, since he stood to inherit from
her eventually.
This Court finds no reason to disbelieve Attorney Lorayes' testimony that before Don Mariano died, he and his
wife (Doa Catalina), being childless, had agreed that their respective properties should eventually revert to their
respective lineal relatives. As the trusted legal adviser of the spouses and a full-blood nephew of Doa Catalina,
he would not have spun a tale out of thin air that would also prejudice his own interest.
Little significance, it seems, has been attached to the fact that among Doa Catalina's nephews and nieces, those
closest to her: (a) her lawyer-nephew Attorney Salvador Lorayes; (b) her niece and companion Elena Jaucian: (c)
her nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and their respective husbands, Fernando Velasco
and Hostilio Cornelio, did not join the suit to annul and undo the dispositions of property which she made in favor
of the Locsins, although it would have been to their advantage to do so. Their desistance persuasively
demonstrates that Doa Catalina acted as a completely free agent when she made the conveyances in favor of
the petitioners. In fact, considering their closeness to Doa Catalina it would have been well-nigh impossible for
the petitioners to employ "fraud, undue pressure, and subtle manipulations" on her to make her sell or donate her
properties to them. Doa Catalina's niece, Elena Jaucian, daughter of her brother, Eduardo Jaucian, lived with
her in her house. Her nephew-in-law, Hostilio Cornelio, was the custodian of the titles of her properties. The sales
and donations which she signed in favor of the petitioners were prepared by her trusted legal adviser and
nephew, Attorney Salvador Lorayes. The (1) deed of donation dated November 19,
1974
23
in favor of Aurea Locsin, (2) another deed of donation dated February 4, 1975
24
in favor of Matilde Cordero, and
(3) still another deed dated September 9, 1975
25
in favor of Salvador Lorayes, were all witnessed by Hostilio Cornelio (who
is married to Doa Catalina's niece, Maria Lorayes) and Fernando Velasco who is married to another niece, Maria Olbes.
26
The sales which she made in favor of Aurea Locsin on July 15, 1974
27
were witnessed by Hostilio Cornelio and Elena
Jaucian. Given those circumstances, said transactions could not have been anything but free and voluntary acts on her
part.
Apart from the foregoing considerations, the trial court and the Court of Appeals erred in not dismissing this action
for annulment and reconveyance on the ground of prescription. Commenced decades after the transactions had
been consummated, and six (6) years after Doa Catalina's death, it prescribed four (4) years after the subject
transactions were recorded in the Registry of Property,
28
whether considered an action based on fraud, or one to
redress an injury to the rights of the plaintiffs. The private respondents may not feign ignorance of said transactions
because the registration of the deeds was constructive notice thereof to them and the whole world.
29
WHEREFORE, the petition for review is granted. The decision dated March 14, 1989 of the Court of Appeals in
CA-G.R. CV No. 11186 is REVERSED and SET ASIDE. The private respondents' complaint for annulment of
contracts and reconveyance of properties in Civil Case No. 7152 of the Regional Trial Court, Branch VIII of
Legazpi City, is DISMISSED, with costs against the private respondents, plaintiffs therein.
SO ORDERED.
Cruz, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 Exhibit S.
2 p. 3, Annex A, RTC Decision in Civil Case No. 7152.
3 Exhibit A.
4 p. 5, Ibid.
5 Exh. 20.
6 Exh. 20-A.
7 p. 4, Ibid.
8 p. 4, Ibid.
9 pp. 83-84, Rollo.
10 Art. 781, Civil Code; emphasis supplied.
11 Art. 777, Civil Code; Mijares vs. Nery, 3 Phil. 195; Uson v. Del Rosario, 92 Phil. 530; -Edades vs.
Edades, 99 Phil. 675.
12 Art. 752, in relation to Arts. 1061, et seq., Civil Code.
13 Exh. 23.
14 Exh. 1-JRL.
15 Exh. 1-JJL.
16 Exh. 3-JJL.
17 Exhs. 1-JJL and 2-JJL.
18 Exhs. 16, 17 and 18.
19 Exh. 1 JJL.
20 Exhs. 1, MVRJ, 2-MVRJ, 24-32.
21 Exhs. 16, 17 & 19.
22 Exhs. S-9 and S-10.
23 Exh. 1.
24 Exh. 2.
25 Exh. 3.
26 pp. 35-38, Rollo.
27 Exhs. 4 to 7.
28 Art. 1146, Civil Code; Alarcon vs. Bidin, 120 SCRA 390; Esconde vs. Barlongay, 152 SCRA 613.
29 Heirs of Maria Marasigan vs. IAC, 152 SCRA 152; Board of Liquidators, et al. vs. Roxas, 179
SCRA 809 (1989).
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 125835 July 30, 1998
NATALIA CARPENA OPULENCIA, petitioner,
vs.
COURT OF APPEALS, ALADIN SIMUNDAC and MIGUEL OLIVAN, respondents.

PANGANIBAN, J.:
Is a contract to sell a real property involved in restate proceedings valid and binding without the approval of the
probate court?
Statement of the Case
This is the main question raised in this petition for review before us, assailing the Decision
1
of the Court of Appeals
2
in CA-GR CV No. 41994 promulgated on February 6, 1996 and its Resolution
3
dated July 19, 1996. The challenged
Decision disposed as follows:
WHEREFORE, premises considered, the order of the lower court dismissing the complaint is SET
ASIDE and judgment is hereby rendered declaring the CONTRACT TO SELL executed by appellee in
favor of appellants as valid and binding, subject to the result of the administration proceedings of the
testate Estate of Demetrio Carpena.
SO ORDERED.
4
Petitioner's Motion for Reconsideration was denied in the challenged Resolution.
5
The Facts
The antecedent facts, as succinctly narrated by Respondent Court of Appeals, are:
In a complaint for specific performance filed with the court a quo [herein private respondents] Aladin
Simundac and Miguel Oliven alleged that [herein petitioner] Natalia Carpena Opulencia executed in
their favor a "CONTRACT TO SELL" Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square
meters located in Sta. Rosa, Laguna at P150.00 per square meter; that plaintiffs paid a
downpayment of P300,000.00 but defendant, despite demands, failed to comply with her obligations
under the contract. [Private respondents] therefore prayed that [petitioner] be ordered to perform her
contractual obligations and to further pay damages, attorney's fee and litigation expenses.
In her traverse, [petitioner] admitted the execution of the contract in favor of plaintiffs and receipt of
P300,000.00 as downpayment. However, she put forward the following affirmative defenses: that the
property subject of the contract formed part of the Estate of Demetrio Carpena (petitioner's father), in
respect of which a petition for probate was filed with the Regional Trial Court, Branch 24, Bian,
Laguna; that at the time the contract was executed, the parties were aware of the pendency of the
probate proceeding; that the contract to sell was not approved by the probate court; that realizing the
nullity of the contract [petitioner] had offered to return the downpayment received from [private
respondents], but the latter refused to accept it; that [private respondents] further failed to provide
funds for the tenant who demanded P150,00.00 in payment of his tenancy rights on the land; that
[petitioner] had chosen to rescind the contract.
At the pre-trial conference the parties stipulated on [sic] the following facts:
1. That on February 3, 1989, [private respondents] and [petitioner] entered into a
contract to sell involving a parcel of land situated in Sta. Rosa, Laguna, otherwise known
as Lot No. 2125 of the Sta. Rosa Estate.
2. That the price or consideration of the said sell [sic] is P150.00 per square meters;
3. That the amount of P300,000.00 had already been received by [petitioner];
4. That the parties have knowledge that the property subject of the contract to sell is
subject of the probate proceedings;
5. That [as] of this time, the probate Court has not yet issued an order either approving
or denying the said sale. (p. 3, appealed Order of September 15, 1992, pp. 109-112,
record).
[Private respondents] submitted their evidence in support of the material allegations of the complaint.
In addition to testimonies of witnesses, [private respondents] presented the following documentary
evidences: (1) Contract to Sell (Exh A); (2) machine copy of the last will and testament of Demetrio
Carpena (defendant's father) to show that the property sold by defendant was one of those devised
to her in said will (Exh B); (3) receipts signed by defendant for the downpayment in the total amount
of P300,000.00 (Exhs C, D & E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her evidence, filed a Demurrer to Evidence. In
essence, defendant maintained that the contract to sell was null and void for want of approval by the
probate court. She further argued that the contract was subject to a suspensive condition, which was
the probate of the will of defendant's father Demetrio Carpena. An Opposition was filed by [private
respondents]. It appears further that in an Order dated December 15, 1992 the court a quo granted
the demurrer to evidence and dismissed the complaint. It justified its action in dismissing the
complaint in the following manner:
It is noteworthy that when the contract to sell was consummated, no petition was filed in the Court
with notice to the heirs of the time and place of hearing, to show that the sale is necessary and
beneficial. A sale of properties of an estate as beneficial to the interested parties must comply with
the requisites provided by law, (Sec. 7, Rule 89, Rules of Court) which are mandatory, and without
them, the authority to sell, the sale itself, and the order approving it, would be null and void ab initio.
(Arcilla vs. David, 77 Phil. 718, Gabriel, et al., vs. Encarnacion, et al., L-6736, May 4, 1954; Bonaga
vs. Soler, 2 Phil. 755) Besides, it is axiomatic that where the estate of a deceased person is already
the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction
involving it without prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123 SCRA 767).
As held by the Supreme Court, a decedent's representative (administrator) is not estopped from
questioning the validity of his own void deed purporting to convey land. (Bona vs. Soler, 2 Phil, 755).
In the case at bar, the [petitioner,] realizing the illegality of the transaction[,] has interposed the nullity
of the contract as her defense, there being no approval from the probate Court, and, in good faith
offers to return the money she received from the [private respondents]. Certainly, the administratrix is
not estop[ped] from doing so and the action to declare the inexistence of contracts do not prescribe.
This is what precipitated the filing of [petitioner's] demurrer to evidence.
6
The trial court's order of dismissal was elevated to the Court of Appeals by private respondents who alleged:
1. The lower court erred in concluding that the contract to sell is null and void, there being no
approval of the probate court.
2. The lower court erred in concluding that [petitioner] in good faith offers to return the money to
[private respondents].
3. The lower court erred in concluding that [petitioner] is not under estoppel to question the validity of
the contract to sell.
4. The lower court erred in not ruling on the consideration of the contract to sell which is tantamount
to plain unjust enrichment of [petitioner] at the expense of [private respondents].
7
Public Respondent's Ruling
Declaring the Contract to Sell valid, subject to the outcome of the testate proceedings on Demetrio Carpena's
estate, the appellate court set aside the trial court's dismissal of the complaint and correctly ruled as follows:
It is apparent from the appealed order that the lower court treated the contract to sell executed by
appellee as one made by the administratrix of the Estate of Demetrio Carpena for the benefit of the
estate. Hence, its main reason for voiding the contract in question was the absence of the probate
court's approval. Presumably, what the lower court had in mind was the sale of the estate or part
thereof made by the administrator for the benefit of the estate, as authorized under Rule 89 of the
Revised Rules of Court, which requires the approval of the probate court upon application therefor
with notice to the heirs, devisees and legatees.
However, as adverted to by appellants in their brief, the contract to sell in question is not covered by
Rule 89 of the Revised Rules of Court since it was made by appellee in her capacity as an heir, of a
property that was devised to her under the will sought to be probated. Thus, while the document
inadvertently stated that appellee executed the contract in her capacity as "executrix and
administratrix" of the estate, a cursory reading of the entire text of the contract would unerringly show
that what she undertook to sell to appellants was one of the "other properties given to her by her late
father," and more importantly, it was not made for the benefit of the estate but for her own needs. To
illustrate this point, it is apropos to refer to the preambular or preliminary portion of the document,
which reads:
WHEREAS, the SELLER is the lawful owner of a certain parcel of land, which is more
particularly described as follows:
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
WHEREAS, the SELLER suffers difficulties in her living and has forced to offer the sale
of the above-described property, "which property was only one among the other
properties given to her by her late father," to anyone who can wait for complete
clearance of the court on the Last Will Testament of her father.
WHEREAS, the SELLER in order to meet her need of cash, has offered for sale the said
property at ONE HUNDRED FIFTY PESOS (150.00) Philippine Currency, per square
meter unto the BUYERS, and with this offer, the latter has accepted to buy and/or
purchase the same, less the area for the road and other easements indicated at the
back of Transfer Certificate of Title No. 2125 duly confirmed after the survey to be
conducted by the BUYER's Licensed Geodetic Engineer, and whatever area [is] left.
(Emphasis added).
To emphasize, it is evident from the foregoing clauses of the contract that appellee sold Lot 2125 not
in her capacity as executrix of the will or administratrix of the estate of her father, but as an heir and
more importantly as owner of said lot which, along with other properties, was devised to her under
the will sought to be probated. That being so, the requisites stipulated in Rule 89 of the Revised
Rules of Court which refer to a sale made by the administrator for the benefit of the estate do not
apply.
xxx xxx xxx
It is noteworthy that in a Manifestation filed with this court by appellants, which is not controverted by
appellee, it is mentioned that the last will and testament of Demetrio Carpena was approved in a final
judgment rendered in Special Proceeding No. B-979 by the Regional Trial Court, Branch 24 Bian,
Laguna. But of course such approval does not terminate the proceeding[s] since the settlement of
the estate will ensue. Such proceedings will consist, among others, in the issuance by the court of a
notice to creditors (Rule 86), hearing of money claims and payment of taxes and estate debts (Rule
88) and distribution of the residue to the heirs or persons entitled thereto (Rule 90). In effect, the final
execution of the deed of sale itself upon appellants' payment of the balance of the purchase price will
have to wait for the settlement or termination of the administration proceedings of the Estate of
Demetrio Carpena. Under the foregoing premises, what the trial court should have done with the
complaint was not to dismiss it but to simply put on hold further proceedings until such time that the
estate or its residue will be distributed in accordance with the approved will.
The rule is that when a demurrer to the evidence is granted by the trial court but reversed on appeal,
defendant loses the right to adduce his evidence. In such a case, the appellate court will decide the
controversy on the basis of plaintiff's evidence. In the case at bench, while we find the contract to sell
valid and binding between the parties, we cannot as yet order appellee to perform her obligations
under the contract because the result of the administration proceedings of the testate Estate of
Demetrio Carpena has to be awaited. Hence, we shall confine our adjudication to merely declaring
the validity of the questioned Contract to Sell.
Hence, this appeal.
8
The Issue
Petitioner raises only one issue:
Whether or not the Contract to Sell dated 03 February 1989 executed by the [p]etitioner and [p]rivate
[r]espondent[s] without the requisite probate court approval is valid.
The Court's Ruling
The petition has no merit.
Contract to Sell Valid
In a nutshell, petitioner contends that "where the estate of the deceased person is already the subject of a testate
or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of
the Probate Court."
9
She maintains that the Contract to Sell is void because it was not approved by the probate court, as
required by Section 7, Rule 89 of the Rules of Court:
Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. The
court having jurisdiction of the estate of the deceased may authorize the executor or administrator to
sell, mortgage, or otherwise encumber real estate, in cases provided by these rules and when it
appears necessary or beneficial, under the following regulations:
xxx xxx xxx
Insisting that the above rule should apply to this case, petitioner argues that the stipulations in the Contract to Sell
require her to act in her capacity as an executrix or administratrix. She avers that her obligation to eject tenants
pertains to the administratrix or executrix, the estate being the landlord of the said tenants.
10
Likewise
demonstrating that she entered into the contract in her capacity as executor is the stipulation that she must effect the
conversion of subject land from irrigated rice land to residential land and secure the necessary clearances from government
offices. Petitioner alleges that these obligations can be undertaken only by an executor or administrator of an estate, and
not by an heir.
11
The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the Rules of Court
is not applicable, because petitioner entered into the Contract to Sell in her capacity as an heiress, not as an
executrix or administratrix of the estate. In the contract, she represented herself as the "lawful owner" and seller
of the subject parcel of land.
12
She also explained the reason for the sale to be "difficulties in her living" conditions and
consequent "need of cash."
13
These representations clearly evince that she was not acting on behalf of the estate under
probate when she entered into the Contract to Sell. Accordingly, the jurisprudence cited by petitioners has no application to
the instant case.
We emphasize that hereditary rights are vested in the heir or heirs from the moment of the decedent's death.
14
Petitioner, therefore, became the owner of her hereditary share the moment her father died. Thus, the lack of judicial
approval does not invalidate the Contract to Sell, because the petitioner has the substantive right to sell the whole or a part
of her share in the estate of her late father.
15
Thus, in Jakosalem vs. Rafols,
16
the Court resolved an identical issue under
the old Civil Code and held:
Art. 440 of the Civil Code provides that "the possession of hereditary property 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." And Manresa with reason states that upon the death of a person, each of
his heirs "becomes the undivided owner of the whole estate left with respect to the part or portion
which might be adjudicated to him, a community of ownership being thus formed among the
coowners of the estate while it remains undivided." . . . And according to article 399 of the Civil Code,
every part owner may assign or mortgage his part in the common property, and the effect of such
assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon
the dissolution of the community. Hence, where some of the heirs, without the concurrence of the
others, sold a property left by their deceased father, this Court, speaking thru its then Chief Justice
Cayetano Arellano, said that the sale was valid, but that the effect thereof was limited to the share
which may be allotted to the vendors upon the partition of the estate.
Administration of the Estate Not
Prejudiced by the Contract to Sell
Petitioner further contends that "[t]o sanction the sale at this stage would bring about a partial distribution of the
decedent's estate pending the final termination of the testate proceedings."
17
This becomes all the more significant
in the light of the trial court's finding, as stated in its Order dated August 20, 1997, that "the legitimate of one of the heirs
has been impaired."
18
Petitioner's contention is not convincing. The Contract to Sell stipulates that petitioner's offer to sell is contingent
on the "complete clearance of the court on the Last Will Testament of her father."
19
Consequently, although the
Contract to Sell was perfected between the petitioner and private respondents during the pendency of the probate
proceedings, the consummation of the sale or the transfer of ownership over the parcel of land to the private respondents is
subject to the full payment of the purchase price and to the termination and outcome of the testate proceedings. Therefore,
there is no basis for petitioner's apprehension that the Contract to Sell may result in a premature partition and distribution of
the properties of the estate. Indeed, it is settled that "the sale made by an heir of his share in an inheritance, subject to the
pending administration, in no wise stands in the way of such administration."
20
Estoppel
Finally, petitioner is estopped from backing out of her representations in her valid Contract to Sell with private
respondents, from whom she had already received P300,000 as initial payment of the purchase price. Petitioner
may not renege on her own acts and representations, to the prejudice of the private respondents who have relied
on them.
21
Jurisprudence teaches us that neither the law nor the courts will extricate a party from an unwise or
undesirable contract he or she entered into with all the required formalities and with full awareness of its consequences.
22
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED.
Costs against petitioner.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.
# Footnotes
1 Rollo, pp. 21-27.
2 Sixteenth Division composed of J. Godardo A. Jacinto, ponente; with the concurrence of J. Salome
A. Montoya, chairman; and J. Oswaldo D. Agcaoili, member.
3 Rollo, p. 29.
4 Decision, p. 8; rollo, p. 27.
5 Rollo, p. 29.
6 Decision of the Court of Appeals, pp. 1-3; rollo, pp. 21-23.
7 Appellants' Brief before the Court of Appeals, p. 1.
8 The case was deemed submitted for resolution on December 1, 1997 when the Court received
Petitioner's Memorandum.
9 Memorandum for the Petitioner, p. 7; rollo, p. 81.
10 Petitioner's Memorandum, pp. 5-6; rollo, pp. 79-80.
11 Ibid., p. 6; rollo, p. 80.
12 Contract to Sell, p. 1; record, p. 5.
13 Ibid.
14 Art. 777, Civil Code, provides:
The rights to the succession are transmitted from the moment of the death of the decedent.
15 Go Ong vs. Court of Appeals, 154 SCRA 270, 276-277, September 24, 1987; and De Borja vs.
Vda. de Borja, 46 SCRA 577, 589, August 18, 1972.
16 73 Phil. 628-629 (1942), per Moran, J.
17 Petitioner's Memorandum, p. 7; rollo, p. 81.
18 Ibid.
19 Record, p. 5.
20 Go Ong vs. Court of Appeals, per Paras, J., supra, p. 277; citing Jakosalem vs. Rafols, 73 Phil
628 (1942).
21 Laureano Investment and Development Corporation vs. Court of Appeals, 272 SCRA 253, 263,
May 6, 1997; citing Caltex (Philippines), Inc. vs. Court of Appeals, 212 SCRA 448, 457, August 10,
1992.
22 Esguerra vs. Court of Appeals, 267 SCRA 380, 393, February 3, 1997, citing Republic vs.
Sandiganbayan, 226 SCRA 314, September 10, 1993.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 126334 November 23, 2001
EMILIO EMNACE, petitioner,
vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM
TABANAO, JANETTE TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO and
VINCENT TABANAO, respondents.
YNARES-SANTIAGO, J.:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern known
as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their partnership and
executed an agreement of partition and distribution of the partnership properties among them, consequent to
Jacinto Divinagracia's withdrawal from the partnership.
1
Among the assets to be distributed were five (5) fishing
boats, six (6) vehicles, two (2) parcels of land located at Sto. Nio and Talisay, Negros Occidental, and cash
deposits in the local branches of the Bank of the Philippine Islands and Prudential Bank.
Throughout the existence of the partnership, and even after Vicente Tabanao's untimely demise in 1994,
petitioner failed to submit to Tabanao's heirs any statement of assets and liabilities of the partnership, and to
render an accounting of the partnership's finances. Petitioner also reneged on his promise to turn over to
Tabanao's heirs the deceased's 1/3 share in the total assets of the partnership, amounting to P30,000,000.00, or
the sum of P10,000,000.00, despite formal demand for payment thereof.
2
Consequently, Tabanao' s heirs, respondents herein, filed against petitioner an action for accounting, payment of
shares, division of assets and damages.
3
In their complaint, respondents prayed as follows:
1. Defendant be ordered to render the proper accounting of all the assets and liabilities of the partnership
at bar; and
2. After due notice and hearing defendant be ordered to pay/remit/deliver/surrender/yield to the plaintiffs
the following:
A. No less than One Third (1/3) of the assets, properties, dividends, cash, land(s), fishing vessels,
trucks, motor vehicles, and other forms and substance of treasures which belong and/or should
belong, had accrued and/or must accrue to the partnership;
B. No less than Two Hundred Thousand Pesos (P200,000.00) as moral damages;
C. Attorney's fees equivalent to Thirty Percent (30%) of the entire share/amount/award which the
Honorable Court may resolve the plaintiffs as entitled to plus P1,000.00 for every appearance in
court.
4
Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction over the
nature of the action or suit, and lack of capacity of the estate of Tabanao to sue.
5
On August 30, 1994, the trial
court denied the motion to dismiss. It held that venue was properly laid because, while realties were involved, the
action was directed against a particular person on the basis of his personal liability; hence, the action is not only a
personal action but also an action in personam. As regards petitioner's argument of lack of jurisdiction over the
action because the prescribed docket fee was not paid considering the huge amount involved in the claim, the
trial court noted that a request for accounting was made in order that the exact value of the partnership may be
ascertained and, thus, the correct docket fee may be paid. Finally, the trial court held that the heirs of Tabanao
had aright to sue in their own names, in view of the provision of Article 777 of the Civil Code, which states that the
rights to the succession are transmitted from the moment of the death of the decedent.
6
The following day, respondents filed an amended complaint,
7
incorporating the additional prayer that petitioner be
ordered to "sell all (the partnership's) assets and thereafter pay/remit/deliver/surrender/yield to the plaintiffs" their
corresponding share in the proceeds thereof. In due time, petitioner filed a manifestation and motion to dismiss,
8
arguing that the trial court did not acquire jurisdiction over the case due to the plaintiffs' failure to pay the proper
docket fees. Further, in a supplement to his motion to dismiss,
9
petitioner also raised prescription as an additional
ground warranting the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order,
10
denying the motion to dismiss inasmuch as the grounds
raised therein were basically the same as the earlier motion to dismiss which has been denied. Anent the issue of
prescription, the trial court ruled that prescription begins to run only upon the dissolution of the partnership when
the final accounting is done. Hence, prescription has not set in the absence of a final accounting. Moreover, an
action based on a written contract prescribes in ten years from the time the right of action accrues.
Petitioner filed a petition for certiorari before the Court of Appeals,
11
raising the following issues:
I. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the required docket fee;
II. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in
insisting to try the case which involve (sic) a parcel of land situated outside of its territorial jurisdiction;
III. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in
allowing the estate of the deceased to appear as party plaintiff, when there is no intestate case and filed by
one who was never appointed by the court as administratrix of the estates; and
IV. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in not
dismissing the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the assailed decision,
12
dismissing the petition for certiorari,
upon a finding that no grave abuse of discretion amounting to lack or excess of jurisdiction was committed by the
trial court in issuing the questioned orders denying petitioner's motions to dismiss.
Not satisfied, petitioner filed the instant petition for review, raising the same issues resolved by the Court of
Appeals, namely:
I. Failure to pay the proper docket fee;
II. Parcel of land subject of the case pending before the trial court is outside the said court's territorial
jurisdiction;
III. Lack of capacity to sue on the part of plaintiff heirs of Vicente Tabanao; and
IV. Prescription of the plaintiff heirs' cause of action.
It can be readily seen that respondents' primary and ultimate objective in instituting the action below was to
recover the decedent's 1/3 share in the partnership' s assets. While they ask for an accounting of the partnership'
s assets and finances, what they are actually asking is for the trial court to compel petitioner to pay and turn over
their share, or the equivalent value thereof, from the proceeds of the sale of the partnership assets. They also
assert that until and unless a proper accounting is done, the exact value of the partnership' s assets, as well as
their corresponding share therein, cannot be ascertained. Consequently, they feel justified in not having paid the
commensurate docket fee as required by the Rules of Court.1wphi1.nt
We do not agree. The trial court does not have to employ guesswork in ascertaining the estimated value of the
partnership's assets, for respondents themselves voluntarily pegged the worth thereof at Thirty Million Pesos
(P30,000,000.00). Hence, this case is one which is really not beyond pecuniary estimation, but rather partakes of
the nature of a simple collection case where the value of the subject assets or amount demanded is pecuniarily
determinable.
13
While it is true that the exact value of the partnership's total assets cannot be shown with
certainty at the time of filing, respondents can and must ascertain, through informed and practical estimation, the
amount they expect to collect from the partnership, particularly from petitioner, in order to determine the proper
amount of docket and other fees.
14
It is thus imperative for respondents to pay the corresponding docket fees in
order that the trial court may acquire jurisdiction over the action.
15
Nevertheless, unlike in the case of Manchester Development Corp. v. Court of Appeals,
16
where there was clearly
an effort to defraud the government in avoiding to pay the correct docket fees, we see no attempt to cheat the
courts on the part of respondents. In fact, the lower courts have noted their expressed desire to remit to the court
"any payable balance or lien on whatever award which the Honorable Court may grant them in this case should
there be any deficiency in the payment of the docket fees to be computed by the Clerk of Court."
17
There is
evident willingness to pay, and the fact that the docket fee paid so far is inadequate is not an indication that they
are trying to avoid paying the required amount, but may simply be due to an inability to pay at the time of filing.
This consideration may have moved the trial court and the Court of Appeals to declare that the unpaid docket
fees shall be considered a lien on the judgment award.
Petitioner, however, argues that the trial court and the Court of Appeals erred in condoning the non-payment of
the proper legal fees and in allowing the same to become a lien on the monetary or property judgment that may
be rendered in favor of respondents. There is merit in petitioner's assertion. The third paragraph of Section 16,
Rule 141 of the Rules of Court states that:
The legal fees shall be a lien on the monetary or property judgment in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their favor because it specifically applies to pauper-litigants.
Nowhere in the records does it appear that respondents are litigating as paupers, and as such are exempted from
the payment of court fees.
18
The rule applicable to the case at bar is Section 5(a) of Rule 141 of the Rules of Court, which defines the two
kinds of claims as: (1) those which are immediately ascertainable; and (2) those which cannot be immediately
ascertained as to the exact amount. This second class of claims, where the exact amount still has to be finally
determined by the courts based on evidence presented, falls squarely under the third paragraph of said Section
5(a), which provides:
In case the value of the property or estate or the sum claimed is less or more in accordance with the
appraisal of the court, the difference of fee shall be refunded or paid as the case may be. (Underscoring
ours)
In Pilipinas Shell Petroleum Corporation v. Court of Appeals,
19
this Court pronounced that the above-quoted
provision "clearly contemplates an Initial payment of the filing fees corresponding to the estimated amount of the
claim subject to adjustment as to what later may be proved."
20
Moreover, we reiterated therein the principle that
the payment of filing fees cannot be made contingent or dependent on the result of the case. Thus, an initial
payment of the docket fees based on an estimated amount must be paid simultaneous with the filing of the
complaint. Otherwise, the court would stand to lose the filing fees should the judgment later turn out to be adverse
to any claim of the respondent heirs.
The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court expenses
in the handling of cases. Consequently, in order to avoid tremendous losses to the judiciary, and to the
government as well, the payment of docket fees cannot be made dependent on the outcome of the case, except
when the claimant is a pauper-litigant.
Applied to the instant case, respondents have a specific claim - 1/3 of the value of all the partnership assets - but
they did not allege a specific amount. They did, however, estimate the partnership's total assets to be worth Thirty
Million Pesos (P30,000,000.00), in a letter
21
addressed to petitioner. Respondents cannot now say that they are
unable to make an estimate, for the said letter and the admissions therein form part of the records of this case.
They cannot avoid paying the initial docket fees by conveniently omitting the said amount in their amended
complaint. This estimate can be made the basis for the initial docket fees that respondents should pay. Even if it
were later established that the amount proved was less or more than the amount alleged or estimated, Rule 141,
Section 5(a) of the Rules of Court specifically provides that the court may refund the 'excess or exact additional
fees should the initial payment be insufficient. It is clear that it is only the difference between the amount finally
awarded and the fees paid upon filing of this complaint that is subject to adjustment and which may be subjected
to alien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion,
22
this Court held that when the
specific claim "has been left for the determination by the court, the additional filing fee therefor shall constitute a
lien on the judgment and it shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce
said lien and assess and collect the additional fee." Clearly, the rules and jurisprudence contemplate the initial
payment of filing and docket fees based on the estimated claims of the plaintiff, and it is only when there is a
deficiency that a lien may be constituted on the judgment award until such additional fee is collected.
Based on the foregoing, the trial court erred in not dismissing the complaint outright despite their failure to pay the
proper docket fees. Nevertheless, as in other procedural rules, it may be liberally construed in certain cases if
only to secure a just and speedy disposition of an action. While the rule is that the payment of the docket fee in
the proper amount should be adhered to, there are certain exceptions which must be strictly construed.
23
In recent rulings, this Court has relaxed the strict adherence to the Manchester doctrine, allowing the plaintiff to
pay the proper docket fees within a reasonable time before the expiration of the applicable prescriptive or
reglementary period.
24
In the recent case of National Steel Corp. v. Court of Appeals,
25
this Court held that:
The court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the
payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the
time of full payment of the fees within such reasonable time as the court may grant, unless, of course,
prescription has set in the meantime.
It does not follow, however, that the trial court should have dismissed the complaint for failure of private
respondent to pay the correct amount of docket fees. Although the payment of the proper docket fees is a
jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same within a
reasonable time before the expiration of the applicable prescriptive or reglementary period. If the plaintiff
fails to comply within this requirement, the defendant should timely raise the issue of jurisdiction or else he
would be considered in estoppel. In the latter case, the balance between the appropriate docket fees and
the amount actually paid by the plaintiff will be considered a lien or any award he may obtain in his favor.
(Underscoring ours)
Accordingly, the trial court in the case at bar should determine the proper docket fee based on the estimated
amount that respondents seek to collect from petitioner, and direct them to pay the same within a reasonable
time, provided the applicable prescriptive or reglementary period has not yet expired, Failure to comply therewith,
and upon motion by petitioner, the immediate dismissal of the complaint shall issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part of the trial court and the Court of Appeals in holding
that the case below is a personal action which, under the Rules, may be commenced and tried where the
defendant resides or may be found, or where the plaintiffs reside, at the election of the latter.
26
Petitioner, however, insists that venue was improperly laid since the action is a real action involving a parcel of
land that is located outside the territorial jurisdiction of the court a quo. This contention is not well-taken. The
records indubitably show that respondents are asking that the assets of the partnership be accounted for, sold
and distributed according to the agreement of the partners. The fact that two of the assets of the partnership are
parcels of land does not materially change the nature of the action. It is an action in personam because it is an
action against a person, namely, petitioner, on the basis of his personal liability. It is not an action in rem where
the action is against the thing itself instead of against the person.
27
Furthermore, there is no showing that the
parcels of land involved in this case are being disputed. In fact, it is only incidental that part of the assets of the
partnership under liquidation happen to be parcels of land.
The time-tested case of Claridades v. Mercader, et al.,
28
settled this issue thus:
The fact that plaintiff prays for the sale of the assets of the partnership, including the fishpond in question,
did not change the nature or character of the action, such sale being merely a necessary incident of the
liquidation of the partnership, which should precede and/or is part of its process of dissolution.
The action filed by respondents not only seeks redress against petitioner. It also seeks the enforcement of, and
petitioner's compliance with, the contract that the partners executed to formalize the partnership's dissolution, as
well as to implement the liquidation and partition of the partnership's assets. Clearly, it is a personal action that, in
effect, claims a debt from petitioner and seeks the performance of a personal duty on his part.
29
In fine,
respondents' complaint seeking the liquidation and partition of the assets of the partnership with damages is a
personal action which may be filed in the proper court where any of the parties reside.
30
Besides, venue has
nothing to do with jurisdiction for venue touches more upon the substance or merits of the case.
31
As it is, venue
in this case was properly laid and the trial court correctly ruled so.
On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue
since she was never appointed as administratrix or executrix of his estate. Petitioner's objection in this regard is
misplaced. The surviving spouse does not need to be appointed as executrix or administratrix of the estate before
she can file the action. She and her children are complainants in their own right as successors of Vicente
Tabanao. From the very moment of Vicente Tabanao' s death, his rights insofar as the partnership was
concerned were transmitted to his heirs, for rights to the succession are transmitted from the moment of death of
the decedent.32
Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to
respondents by operation of law, more particularly by succession, which is a mode of acquisition by virtue of
which the property, rights and obligations to the extent of the value of the inheritance of a person are
transmitted.
33
Moreover, respondents became owners of their respective hereditary shares from the moment
Vicente Tabanao died.
34
A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is
not necessary for any of the heirs to acquire legal capacity to sue. As successors who stepped into the shoes of
their decedent upon his death, they can commence any action originally pertaining to the decedent.
35
From the
moment of his death, his rights as a partner and to demand fulfillment of petitioner's obligations as outlined in
their dissolution agreement were transmitted to respondents. They, therefore, had the capacity to sue and seek
the court's intervention to compel petitioner to fulfill his obligations.
Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of prescription,
arguing that respondents' action prescribed four (4) years after it accrued in 1986. The trial court and the Court of
Appeals gave scant consideration to petitioner's hollow arguments, and rightly so.
The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination.
36
The
partnership, although dissolved, continues to exist and its legal personality is retained, at which time it completes
the winding up of its affairs, including the partitioning and distribution of the net partnership assets to the
partners.
37
For as long as the partnership exists, any of the partners may demand an accounting of the
partnership's business. Prescription of the said right starts to run only upon the dissolution of the partnership
when the final accounting is done.
38
Contrary to petitioner's protestations that respondents' right to inquire into the business affairs of the partnership
accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a
final accounting. Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any partner, or his legal representative as against the
winding up partners or the surviving partners or the person or partnership continuing the business, at the
date of dissolution, in the absence of any agreement to the contrary.
Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited provision
states that the right to demand an accounting accrues at the date of dissolution in the absence of any agreement
to the contrary. When a final accounting is made, it is only then that prescription begins to run. In the case at bar,
no final accounting has been made, and that is precisely what respondents are seeking in their action before the
trial court, since petitioner has failed or refused to render an accounting of the partnership's business and assets.
Hence, the said action is not barred by prescription.
In fine, the trial court neither erred nor abused its discretion when it denied petitioner's motions to dismiss.
Likewise, the Court of Appeals did not commit reversible error in upholding the trial court's orders. Precious time
has been lost just to settle this preliminary issue, with petitioner resurrecting the very same arguments from the
trial court all the way up to the Supreme Court. The litigation of the merits and substantial issues of this
controversy is now long overdue and must proceed without further delay.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED for lack of merit, and the case is
REMANDED to the Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to determine the proper
docket fee based on the estimated amount that plaintiffs therein seek to collect, and direct said plaintiffs to pay
the same within a reasonable time, provided the applicable prescriptive or reglementary period has not yet
expired. Thereafter, the trial court is ORDERED to conduct the appropriate proceedings in Civil Case No. 416-C.
Costs against petitioner.1wphi1.nt
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan, Pardo, JJ., concur.
Footnotes
1
Record, pp. 30-31.
2
Ibid., pp. 32-33.
3
Civil Case No. 416-C before the RTC of Cadiz City, Branch 60.
4
Rollo, p. 41.
5
Ibid., pp. 44-47.
6
Id, pp. 108-112.
7
Appendix "H", Rollo, pp. 93-100.
8
Appendix "I", Rollo, pp.101-104.
9
Appendix "J", Rollo, pp. 105-107.
10
Appendix "L", Rollo, pp. 113-115.
11
CA-G.R. No. 37878. Records. pp. 2-18.
12
Rollo, pp. 119-126.
13
Colarina v. Court of Appeals, 303 SCRA 647, 652-653 (1999).
14
Gregorio v. Angeles, 180 SCRA 490. 494-495 (1989).
15
Ballatan v. Court of Appeals. 304 SCRA 34, 42 (1999).
16
149 SCRA 562 (1987).
17
Opposition to Motion to Dismiss, Records, p. 60.
18
Pilipinas Shell Petroleum Corp. v. Court of Appeals, 171 SCRA 674, 681 (1989).
19
Supra.
20
Ibid., p. 680.
21
Record, p. 32.
22
170 SCRA 274, 285 (1989).
23
Colarina, supra, p. 654.
24
Colarina, supra; De Zuzuarregui v. Court of Appeals, 174 SCRA 54, 59 ( 1989); Pantranco North
Express, Inc. v. Court of Appeals, 224 SCRA 477, 491 (1993); Talisay-Silay Milling Co. v. Asociacion de
Agricultores de Talisay-Silay, Inc., 247 SCRA 361, 384-385 (1995).
25
302 SCRA 522, 531 (1999).
26
Section 2(b), Rule 4 of the Rules of Court.
27
Asiavest Limited v. Court of Appeals, 296 SCRA 539, 552 (1998).
28
17 SCRA 1,4 (1966).
29
Ruiz v. Court of Appeals, 303 SCRA 637, 645 (1999).
30
La Tondena Distillers, Inc. v. Ponferrada, 264 SCRA 540, 545 (1996).
31
Philippine Banking Corp. v. Tensuan, 228 SCRA 385, 396 (1993).
32
Coronel v. Court of Appeals, 263 SCRA 15, 34 (1996); Article 777 of the Civil Code.
33
Civil Code, Art. 774.
34
Opulencia v. Court of Appeals, 293 SCRA 385, 394 (1998).
35
Heirs of Ignacio Conti v. Court of Appeals, 300 SCRA 345, 354 (1998).
36
Idos v. Court of Appeals. 296 SCRA 194.205 (1998).
37
Sy v. Court of Appeals. 313 SCRA 328. 347 (1999); Ortega v. Court of Appeals, 245 SCRA 529, 536
(1995).
38
Fue Leung v. IAC, 169 SCRA 746, 755 (1989).
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 113725 June 29, 2000
JOHNNY S. RABADILLA,
1
petitioner,
vs.
COURT OF APPEALS AND MARIA MARLENA
2
COSCOLUELLA Y BELLEZA VILLACARLOS, respondents.
D E C I S I O N
PURISIMA, J.:
This is a petition for review of the decision of the Court of Appeals,
3
dated December 23, 1993, in CA-G.R. No.
CV-35555, which set aside the decision of Branch 52 of the Regional Trial Court in Bacolod City, and ordered the
defendants-appellees (including herein petitioner), as heirs of Dr. Jorge Rabadilla, to reconvey title over Lot No.
1392, together with its fruits and interests, to the estate of Aleja Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr. Jorge Rabadilla, predecessor-
in-interest of the herein petitioner, Johnny S. Rabadilla, was instituted as a devisee of 511, 855 square meters of
that parcel of land surveyed as Lot No. 1392 of the Bacolod Cadastre. The said Codicil, which was duly probated
and admitted in Special Proceedings No. 4046 before the then Court of First Instance of Negros Occidental,
contained the following provisions:
"FIRST
I give, leave and bequeath the following property owned by me to Dr. Jorge Rabadilla resident of 141
P. Villanueva, Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002
(10942), which is registered in my name according to the records of the Register of Deeds of
Negros Occidental.
(b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights
which I shall set forth hereinbelow, shall be inherited and acknowledged by the children and
spouse of Jorge Rabadilla.
xxx
FOURTH
(a)....It is also my command, in this my addition (Codicil), that should I die and Jorge Rabadilla shall
have already received the ownership of the said Lot No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10942), and also at the time that the lease of Balbinito G.
Guanzon of the said lot shall expire, Jorge Rabadilla shall have the obligation until he dies, every
year to give to Maria Marlina Coscolluela y Belleza, Seventy (75) (sic) piculs of Export sugar and
Twenty Five (25) piculs of Domestic sugar, until the said Maria Marlina Coscolluela y Belleza dies.
FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod Cadastre,
covered by Transfer Certificate of Title No. RT-4002 (10492), shall have the obligation to still give
yearly, the sugar as specified in the Fourth paragraph of his testament, to Maria Marlina Coscolluela
y Belleza on the month of December of each year.
SIXTH
I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to whom I
have left and bequeathed, and his heir shall later sell, lease, mortgage this said Lot, the buyer,
lessee, mortgagee, shall have also the obligation to respect and deliver yearly ONE HUNDRED (100)
piculs of sugar to Maria Marlina Coscolluela y Belleza, on each month of December, SEVENTY FIVE
(75) piculs of Export and TWENTY FIVE (25) piculs of Domestic, until Maria Marlina shall die, lastly
should the buyer, lessee or the mortgagee of this lot, not have respected my command in this my
addition (Codicil), Maria Marlina Coscolluela y Belleza, shall immediately seize this Lot No. 1392 from
my heir and the latter's heirs, and shall turn it over to my near desendants, (sic) and the latter shall
then have the obligation to give the ONE HUNDRED (100) piculs of sugar until Maria Marlina shall
die. I further command in this my addition (Codicil) that my heir and his heirs of this Lot No. 1392,
that they will obey and follow that should they decide to sell, lease, mortgage, they cannot negotiate
with others than my near descendants and my sister."
4
Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and Transfer
Certificate of Title No. 44498 thereto issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner), Aurora,
Ofelia and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as Civil Case
No. 5588, before Branch 52 of the Regional Trial Court in Bacolod City, against the above-mentioned heirs of Dr.
Jorge Rabadilla, to enforce the provisions of subject Codicil. The Complaint alleged that the defendant-heirs
violated the conditions of the Codicil, in that:
1. Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic Planters Bank in disregard
of the testatrix's specific instruction to sell, lease, or mortgage only to the near descendants and sister of
the testatrix.
2. Defendant-heirs failed to comply with their obligation to deliver one hundred (100) piculs of sugar (75
piculs export sugar and 25 piculs domestic sugar) to plaintiff Maria Marlena Coscolluela y Belleza from
sugar crop years 1985 up to the filing of the complaint as mandated by the Codicil, despite repeated
demands for compliance.
3. The banks failed to comply with the 6th paragraph of the Codicil which provided that in case of the sale,
lease, or mortgage of the property, the buyer, lessee, or mortgagee shall likewise have the obligation to
deliver 100 piculs of sugar per crop year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return-Lot No. 1392 to
the surviving heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 in the name of the deceased, Dr.
Jorge Rabadilla, and the issuance of a new certificate of title in the names of the surviving heirs of the late Aleja
Belleza.
On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order of Default
was lifted, with respect to defendant Johnny S. Rabadilla, who filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law of the herein
petitioner who was lessee of the property and acting as attorney-in-fact of defendant-heirs, arrived at an amicable
settlement and entered into a Memorandum of Agreement on the obligation to deliver one hundred piculs of
sugar, to the following effect:
"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will be delivered not
later than January of 1989, more specifically, to wit:
75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our names, Mary Rose Rabadilla y
Azurin or Alan Azurin, during December of each sugar crop year, in Azucar Sugar Central; and, this is considered
compliance of the annuity as mentioned, and in the same manner will compliance of the annuity be in the next
succeeding crop years.
That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied in cash equivalent
of the number of piculs as mentioned therein and which is as herein agreed upon, taking into consideration the
composite price of sugar during each sugar crop year, which is in the total amount of ONE HUNDRED FIVE
THOUSAND PESOS (P105,000.00).
That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable on or before
the end of December of every sugar crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1988-89;
December of crop year 1989-90;
December of crop year 1990-91; and
December of crop year 1991-92."
5
However, there was no compliance with the aforesaid Memorandum of Agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988 -1989.
On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the complaint and disposing as
follows:
"WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is prematurely filed as no
cause of action against the defendants has as yet arose in favor of plaintiff. While there maybe the non-
performance of the command as mandated exaction from them simply because they are the children of Jorge
Rabadilla, the title holder/owner of the lot in question, does not warrant the filing of the present complaint. The
remedy at bar must fall. Incidentally, being in the category as creditor of the left estate, it is opined that plaintiff
may initiate the intestate proceedings, if only to establish the heirs of Jorge Rabadilla and in order to give full
meaning and semblance to her claim under the Codicil.
In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED without prejudice.
SO ORDERED."
6
On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial court;
ratiocinating and ordering thus:
"Therefore, the evidence on record having established plaintiff-appellant's right to receive 100 piculs of sugar
annually out of the produce of Lot No. 1392; defendants-appellee's obligation under Aleja Belleza's codicil, as
heirs of the modal heir, Jorge Rabadilla, to deliver such amount of sugar to plaintiff-appellant; defendants-
appellee's admitted non-compliance with said obligation since 1985; and, the punitive consequences enjoined by
both the codicil and the Civil Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in
case of such non-compliance, this Court deems it proper to order the reconveyance of title over Lot No. 1392
from the estates of Jorge Rabadilla to the estate of Aleja Belleza. However, plaintiff-appellant must institute
separate proceedings to re-open Aleja Belleza's estate, secure the appointment of an administrator, and
distribute Lot No. 1392 to Aleja Belleza's legal heirs in order to enforce her right, reserved to her by the codicil, to
receive her legacy of 100 piculs of sugar per year out of the produce of Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and another one entered ordering defendants-appellees,
as heirs of Jorge Rabadilla, to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate
of Aleja Belleza.
SO ORDERED."
7
Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this Court via the
present petition, contending that the Court of Appeals erred in ordering the reversion of Lot 1392 to the estate of
the testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in ruling that the testamentary institution
of Dr. Jorge Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article 882 of the
New Civil Code on modal institutions and in deviating from the sole issue raised which is the absence or
prematurity of the cause of action. Petitioner maintains that Article 882 does not find application as there was no
modal institution and the testatrix intended a mere simple substitution - i.e. the instituted heir, Dr. Jorge Rabadilla,
was to be substituted by the testatrix's "near descendants" should the obligation to deliver the fruits to herein
private respondent be not complied with. And since the testatrix died single and without issue, there can be no
valid substitution and such testamentary provision cannot be given any effect.
The petitioner theorizes further that there can be no valid substitution for the reason that the substituted heirs are
not definite, as the substituted heirs are merely referred to as "near descendants" without a definite identity or
reference as to who are the "near descendants" and therefore, under Articles 843
8
and 845
9
of the New Civil
Code, the substitution should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals deviated from
the issue posed before it, which was the propriety of the dismissal of the complaint on the ground of prematurity
of cause of action, there was no such deviation. The Court of Appeals found that the private respondent had a
cause of action against the petitioner. The disquisition made on modal institution was, precisely, to stress that the
private respondent had a legally demandable right against the petitioner pursuant to subject Codicil; on which
issue the Court of Appeals ruled in accordance with law.
It is a general rule under the law on succession that successional rights are transmitted from the moment of death
of the decedent
10
and compulsory heirs are called to succeed by operation of law. The legitimate children and
descendants, in relation to their legitimate parents, and the widow or widower, are compulsory heirs.
11
Thus, the
petitioner, his mother and sisters, as compulsory heirs of the instituted heir, Dr. Jorge Rabadilla, succeeded the
latter by operation of law, without need of further proceedings, and the successional rights were transmitted to
them from the moment of death of the decedent, Dr. Jorge Rabadilla.
Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a person,
not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by virtue of subject Codicil
were transmitted to his forced heirs, at the time of his death. And since obligations not extinguished by death also
form part of the estate of the decedent; corollarily, the obligations imposed by the Codicil on the deceased Dr.
Jorge Rabadilla, were likewise transmitted to his compulsory heirs upon his death.
In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the condition that
the usufruct thereof would be delivered to the herein private respondent every year. Upon the death of Dr. Jorge
Rabadilla, his compulsory heirs succeeded to his rights and title over the said property, and they also assumed
his (decedent's) obligation to deliver the fruits of the lot involved to herein private respondent. Such obligation of
the instituted heir reciprocally corresponds to the right of private respondent over the usufruct, the fulfillment or
performance of which is now being demanded by the latter through the institution of the case at bar. Therefore,
private respondent has a cause of action against petitioner and the trial court erred in dismissing the complaint
below.
Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is not applicable because
what the testatrix intended was a substitution - Dr. Jorge Rabadilla was to be substituted by the testatrix's near
descendants should there be noncompliance with the obligation to deliver the piculs of sugar to private
respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or persons to take the place of the heir or heirs first
instituted. Under substitutions in general, the testator may either (1) provide for the designation of another heir to
whom the property shall pass in case the original heir should die before him/her, renounce the inheritance or be
incapacitated to inherit, as in a simple substitution,
12
or (2) leave his/her property to one person with the express
charge that it be transmitted subsequently to another or others, as in a fideicommissary substitution.
13
The
Codicil sued upon contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance in default of the first heir by reason of incapacity,
predecease or renunciation.
14
In the case under consideration, the provisions of subject Codicil do not provide
that should Dr. Jorge Rabadilla default due to predecease, incapacity or renunciation, the testatrix's near
descendants would substitute him. What the Codicil provides is that, should Dr. Jorge Rabadilla or his heirs not
fulfill the conditions imposed in the Codicil, the property referred to shall be seized and turned over to the
testatrix's near descendants.
Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a fideicommissary
substitution, the first heir is strictly mandated to preserve the property and to transmit the same later to the
second heir.
15
In the case under consideration, the instituted heir is in fact allowed under the Codicil to alienate
the property provided the negotiation is with the near descendants or the sister of the testatrix. Thus, a very
important element of a fideicommissary substitution is lacking; the obligation clearly imposing upon the first heir
the preservation of the property and its transmission to the second heir. "Without this obligation to preserve
clearly imposed by the testator in his will, there is no fideicommissary substitution."
16
Also, the near descendants'
right to inherit from the testatrix is not definite. The property will only pass to them should Dr. Jorge Rabadilla or
his heirs not fulfill the obligation to deliver part of the usufruct to private respondent.
Another important element of a fideicommissary substitution is also missing here. Under Article 863, the second
heir or the fideicommissary to whom the property is transmitted must not be beyond one degree from the first heir
or the fiduciary. A fideicommissary substitution is therefore, void if the first heir is not related by first degree to the
second heir.
17
In the case under scrutiny, the near descendants are not at all related to the instituted heir, Dr.
Jorge Rabadilla.
The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil is in the
nature of a modal institution and therefore, Article 882 of the New Civil Code is the provision of law in point.
Articles 882 and 883 of the New Civil Code provide:
Art. 882. The statement of the object of the institution or the application of the property left by the testator, or the
charge imposed on him, shall not be considered as a condition unless it appears that such was his intention.
That which has been left in this manner may be claimed at once provided that the instituted heir or his heirs give
security for compliance with the wishes of the testator and for the return of anything he or they may receive,
together with its fruits and interests, if he or they should disregard this obligation.
Art. 883. When without the fault of the heir, an institution referred to in the preceding article cannot take effect in
the exact manner stated by the testator, it shall be complied with in a manner most analogous to and in
conformity with his wishes.
The institution of an heir in the manner prescribed in Article 882 is what is known in the law of succession as an
institucion sub modo or a modal institution. In a modal institution, the testator states (1) the object of the
institution, (2) the purpose or application of the property left by the testator, or (3) the charge imposed by the
testator upon the heir.
18
A "mode" imposes an obligation upon the heir or legatee but it does not affect the
efficacy of his rights to the succession.
19
On the other hand, in a conditional testamentary disposition, the
condition must happen or be fulfilled in order for the heir to be entitled to succeed the testator. The condition
suspends but does not obligate; and the mode obligates but does not suspend.
20
To some extent, it is similar to a
resolutory condition.
21
From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the testatrix intended that
subject property be inherited by Dr. Jorge Rabadilla. It is likewise clearly worded that the testatrix imposed an
obligation on the said instituted heir and his successors-in-interest to deliver one hundred piculs of sugar to the
herein private respondent, Marlena Coscolluela Belleza, during the lifetime of the latter. However, the testatrix did
not make Dr. Jorge Rabadilla's inheritance and the effectivity of his institution as a devisee, dependent on the
performance of the said obligation. It is clear, though, that should the obligation be not complied with, the property
shall be turned over to the testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under
subject Codicil is evidently modal in nature because it imposes a charge upon the instituted heir without, however,
affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed upon the heir
should not be considered a condition unless it clearly appears from the Will itself that such was the intention of the
testator. In case of doubt, the institution should be considered as modal and not conditional.
22
Neither is there tenability in the other contention of petitioner that the private respondent has only a right of
usufruct but not the right to seize the property itself from the instituted heir because the right to seize was
expressly limited to violations by the buyer, lessee or mortgagee.
In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the application of any of its
provisions, the testator's intention is to be ascertained from the words of the Will, taking into consideration the
circumstances under which it was made.
23
Such construction as will sustain and uphold the Will in all its parts
must be adopted.
24
Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs of sugar
yearly to Marlena Belleza Coscuella. Such obligation is imposed on the instituted heir, Dr. Jorge Rabadilla, his
heirs, and their buyer, lessee, or mortgagee should they sell, lease, mortgage or otherwise negotiate the property
involved. The Codicil further provides that in the event that the obligation to deliver the sugar is not respected,
Marlena Belleza Coscuella shall seize the property and turn it over to the testatrix's near descendants. The non-
performance of the said obligation is thus with the sanction of seizure of the property and reversion thereof to the
testatrix's near descendants. Since the said obligation is clearly imposed by the testatrix, not only on the instituted
heir but also on his successors-in-interest, the sanction imposed by the testatrix in case of non-fulfillment of said
obligation should equally apply to the instituted heir and his successors-in-interest.
Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement, the said obligation
imposed by the Codicil has been assumed by the lessee, and whatever obligation petitioner had become the
obligation of the lessee; that petitioner is deemed to have made a substantial and constructive compliance of his
obligation through the consummated settlement between the lessee and the private respondent, and having
consummated a settlement with the petitioner, the recourse of the private respondent is the fulfillment of the
obligation under the amicable settlement and not the seizure of subject property.
Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person disposes of his
property, to take effect after his death.
25
Since the Will expresses the manner in which a person intends how his
properties be disposed, the wishes and desires of the testator must be strictly followed. Thus, a Will cannot be the
subject of a compromise agreement which would thereby defeat the very purpose of making a Will.
WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated December 23,
1993, in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to costs
SO ORDERED.
Melo, J., (Chairman), concur in the separate opinion of Justice Vitug.
Vitug, J., see separate opinion.
Panganiban, J., join the separate opinion of Justice Vitug.
Gonzaga-Reyes, J., no part.
Footnotes
1
Was spelled interchangeably in Rollo as Ravadilla.
2
Was spelled interchangeably in Rollo as Marlina.
3
Penned by Justice Santiago M. Kapunan (Chairman) and concurred in by Justices Minerva P. Gonzaga-
Reyes and Eduardo G. Montenegro, (Members)
4
Annex "C", Rollo, pp. 34-35.
5
Rollo, pp. 65-66.
6
RTC Decision, pp. 8-9.
7
CA Decision, p. 14.
8
Art. 843. The testator shall designate the heir by his name and surname, and when there are two persons
having the same names, he shall indicate some circumstance by which the instituted heir may be known.
Even though the testator may have omitted the name of the heir, should he designate him in such
manner that there can be no doubt as to who has been instituted, the institution shall be valid.
9
Art. 845. Every disposition in favor of an unknown person shall be void, unless by some event or
circumstance his identity becomes certain. However, a disposition in favor of a definite class or group of
persons shall be valid.
10
Article 777, New Civil Code.
11
Ibid., Article 887.
12
Ibid., Article 859.
13
Ibid., Article 863.
14
Ibid., Article 859.
15
Arturo Tolentino, Commentaries and Jurisprudence on the Civil Code, Volume III, p. 212.
16
Ibid., p. 212.
17
Ramirez vs. Vda. De Ramos, 111 SCRA 704.
18
Tolentino, supra, pp. 241-242.
19
Ibid., p. 242.
20
Ibid.
21
Jottings and Jurisprudence in Civil Law, Ruben Balane, p. 249.
22
Tolentino, supra, p. 242.
23
Article 789, NCC.
24
Tolentino, supra, p. 34.
25
Art. 783, NCC and Tolentino, p. 28-29.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 104482 January 22, 1996
BELINDA TAEDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ
TAEDO, representing her minor daughter VERNA TAEDO, petitioners,
vs.
THE COURT OF APPEALS, SPOUSES RICARDO M. TAEDO AND TERESITA BARERA TAEDO,
respondents.
D E C I S I O N
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in
ownership? What is the probative value of the lower court's finding of good faith in registration of such sales in the
registry of property? These are the main questions raised in this Petition for review on certiorari under Rule 45 of
the Rules of Court to set aside and reverse the Decision
1
of the Court of Appeals
2
in CA-G.R. CV NO. 24987
promulgated on September 26, 1991 affirming the decision of the Regional Trial Court, Branch 63, Third Judicial
Region, Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration thereof, promulgated on
May 27, 1992.
By the Court's Resolution on October 25, 1995, this case (along with several others) was transferred from the
First to the Third Division and after due deliberation, the Court assigned it to the undersigned ponente for the
writing of this Decision.
The Facts
On October 20, 1962, Lazardo Taedo executed a notarized deed of absolute sale in favor of his eldest brother,
Ricardo Taedo, and the latter's wife, Teresita Barera, private respondents herein, whereby he conveyed to the
latter in consideration of P1,500.00, "one hectare of whatever share I shall have over Lot No. 191 of the cadastral
survey of Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds of Tarlac", the said
property being his "future inheritance" from his parents (Exh. 1). Upon the death of his father Matias, Lazaro
executed an "Affidavit of Conformity" dated February 28, 1980 (Exh. 3) to "re-affirm, respect, acknowledge and
validate the sale I made in 1962." On January 13, 1981, Lazaro executed another notarized deed of sale in favor
of private respondents covering his "undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 . . . "
(Exh. 4). He acknowledged therein his receipt of P10,000.00 as consideration therefor. In February 1981, Ricardo
learned that Lazaro sold the same property to his children, petitioners herein, through a deed of sale dated
December 29, 1980 (Exh. E). On June 7, 1982, private respondents recorded the Deed of Sale (Exh. 4) in their
favor in the Registry of Deeds and the corresponding entry was made in Transfer Certificate of Title No. 166451
(Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by
Lazaro in favor of private respondents covering the property inherited by Lazaro from his father.
Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of Sale" dated December 29, 1980 (Exit.
E). Conveying to his ten children his allotted portion tinder the extrajudicial partition executed by the heirs of
Matias, which deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias dated
December 28, 1978, stating that it was his desire that whatever inheritance Lazaro would receive from him should
be given to his (Lazaro's) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed by Lazaro in
the presence of two witnesses, wherein he confirmed that he would voluntarily abide by the wishes of his father,
Matias, to give to his (Lazaro's) children all the property he would inherit from the latter (Exh. B); and (3) a letter
dated January 1, 1980 of Lazaro to his daughter, Carmela, stating that his share in the extrajudicial settlement of
the estate of his father was intended for his children, petitioners herein (Exh. C).
Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale" dated March 12,
1981 (Exh. 6), wherein Lazaro revoked the sale in favor of petitioners for the reason that it was "simulated or
fictitious without any consideration whatsoever".
Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually repudiated the
contents of the Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private
respondents. However, Lazaro testified that he sold the property to Ricardo, and that it was a lawyer who induced
him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a "drink" (TSN
September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that petitioners failed "to adduce a proponderance
of evidence to support (their) claim." On appeal, the Court of Appeals affirmed the decision of the trial court, ruling
that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid and that its registration in good faith vested title
in said respondents.
The Issues
Petitioners raised the following "errors" in the respondent Court, which they also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer) is
merely voidable or annulable and not void ab initio pursuant to paragraph 2 of Article 1347 of the New Civil
Code involving as it does a "future inheritance".
II. The trial court erred in holding that defendants-appellees acted in good faith in registering the deed of
sale of January 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of the
land in question passed on to defendants-appellees.
III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence of
plaintiffs-appellants which clearly established by preponderance of evidence that they are indeed the
legitimate and lawful owners of the property in question.
IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the established
facts are illogical and off-tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a
deed of sale covering the same property to the same buyers valid?
3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good faith
in registering the said subsequent deed of sale and (b) in "failing to consider petitioners' evidence"? Are the
conclusions of the respondent Court "illogical and off-tangent"?
The Court's Ruling
At the outset, let it be clear that the "errors" which are reviewable by this Court in this petition for review on
certiorari are only those allegedly committed by the respondent Court of Appeals and not directly those of the trial
court, which is not a party here. The "assignment of errors" in the petition quoted above are therefore totally
misplaced, and for that reason, the petition should be dismissed. But in order to give the parties substantial justice
we have decided to delve into the issues as above re-stated. The errors attributed by petitioners to the latter (trial)
court will be discussed only insofar as they are relevant to the appellate court's assailed Decision and Resolution.
The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision
conceded "it may be legally correct that a contract of sale of anticipated future inheritance is null and void."
3
But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, "(n)o
contract may be entered into upon a future inheritance except in cases expressly authorized by law."
Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of any
obligation between the parties.
Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the 1962
sale, is also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even private
respondents in their memorandum
4
concede this.
However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13,
1981 in favor of private respondents covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot
No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of sale dated December 29, 1980
in favor of petitioners covering the same property. These two documents were executed after the death of Matias
(and his spouse) and after a deed of extra-judicial settlement of his (Matias') estate was executed, thus vesting in
Lazaro actual title over said property. In other words, these dispositions, though conflicting, were no longer
infected with the infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No. 191, citing
as authority the trial court's decision. As earlier pointed out, what is on review in these proceedings by this Court
is the Court of Appeals' decision which correctly identified the subject matter of the January 13, 1981 sale to be
the entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the same property disposed of on
December 29, 1980 in favor of petitioners.
Critical in determining which of these two deeds should be given effect is the registration of the sale in favor of
private respondents with the register of deeds on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as follows:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good
faith.
The property in question is land, an immovable, and following the above-quoted law, ownership shall belong to
the buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor of
private respondents was later than the one in favor of petitioners, ownership would vest in the former because of
the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all.
Petitioners contend that they were in possession of the property and that private respondents never took
possession thereof. As between two purchasers, the one who 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.
5
As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it was done
in bad faith. On this issue, the respondent Court ruled;
Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in bad
faith when they registered the Deed of Sale in their favor as appellee Ricardo already knew of the execution
of the deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Taedo to the
effect that defendant Ricardo Taedo called her up on January 4 or 5, 1981 to tell her that he was already
the owner of the land in question "but the contract of sale between our father and us were (sic) already
consumated" (pp. 9-10, tsn, January 6, 1984). This testimony is obviously self-serving, and because it was
a telephone conversation, the deed of sale dated December 29, 1980 was not shown; Belinda merely told
her uncle that there was already a document showing that plaintiffs are the owners (p. 80). Ricardo Taedo
controverted this and testified that he learned for the first time of the deed of sale executed by Lazaro in
favor of his children "about a month or sometime in February 1981" (p. 111, tsn, Nov. 28, 1984). . . .
6
The respondent Court, reviewing the trial court's findings, refused to overturn the latter's assessment of the
testimonial evidence, as follows;
We are not prepared to set aside the finding of the lower court upholding Ricardo Taedo's testimony, as it
involves a matter of credibility of witnesses which the trial judge, who presided at the hearing, was in a
better position to resolve. (Court of Appeals' Decision, p. 6.)
In this connection, we note the tenacious allegations made by petitioners, both in their basic petition and in their
memorandum, as follows:
1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo "by fraud and deceit
and with foreknowledge" that the property in question had already been sold to petitioners, made Lazaro
execute the deed of January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was paid
at the time of the execution of the deed of sale, contrary to the written acknowledgment, thus showing bad
faith;
3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of
petitioners "was tainted with fraud or deceit."
4. There is allegedly enough evidence to show that private respondents "took undue advantage over the
weakness and unschooled and pitiful situation of Lazaro Taedo . . ." and that respondent Ricardo Taedo
"exercised moral ascendancy over his younger brother he being the eldest brother and who reached fourth
year college of law and at one time a former Vice-Governor of Tarlac, while his younger brother only
attained first year high school . . . ;
5. The respondent Court erred in not giving credence to petitioners' evidence, especially Lazaro Taedo's
Sinumpaang Salaysay dated July 27, 1982 stating that Ricardo Taedo deceived the former in executing
the deed of sale in favor of private respondents.
To be sure, there are indeed many conflicting documents and testimonies as well as arguments over their
probative value and significance. Suffice it to say, however, that all the above contentions involve questions of
fact, appreciation of evidence and credibility of witnesses, which are not proper in this review. It is well-settled that
the Supreme Court is not a trier of facts. In petitions for review under Rule 45 of the Revised Rules of Court, only
questions of law may be raised and passed upon. Absent any whimsical or capricious exercise of judgment, and
unless the lack of any basis for the conclusions made by the lower courts be amply demonstrated, the Supreme
Court will not disturb their findings. At most, it appears that petitioners have shown that their evidence was not
believed by both the trial and the appellate courts, and that the said courts tended to give more credence to the
evidence presented by private respondents. But this in itself is not a reason for setting aside such findings. We
are far from convinced that both courts gravely abused their respective authorities and judicial prerogatives.
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development
Corp.
7
The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final
and conclusive and may not be reviewed on appeal. Among the exceptional circumstances where a
reassessment of facts found by the lower courts is allowed are when the conclusion is a finding grounded entirely
on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible;
when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a
misapprehension of facts; when the findings went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee. After a careful study of the case at bench, we find none of the above
grounds present to justify the re-evaluation of the findings of fact made by the courts below.
In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. vs. Hon. Court
of Appeals, et al.
8
is equally applicable to the present case:
We see no valid reason to discard the factual conclusions of the appellate court. . . . (I)t is not the function
of this Court to assess and evaluate all over again the evidence, testimonial and documentary, adduced by
the parties, particularly where, such as here, the findings of both the trial court and the appellate court on
the matter coincide. (emphasis supplied)
WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. No Costs.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.
Footnotes
1
Rollo, pp. 58-64.
2
Thirteenth Division, composed of J. Minerva P. Gonzaga-Reyes, ponente, and JJ. Arturo B. Buena,
chairman, and Quirino D. Abad Santos, Jr., member.
3
CA Decision, p. 5; rollo, p. 62.
4
At pp. 11-12; rollo, pp. 145-146.
5
Nuguid vs. Court of Appeals, 171 SCRA 213 (March 13, 1989).
6
Court of Appeals' Decision, p. 6; rollo, p. 63.
7
G.R. No. 112130, March 31, 1995; J. Flerida Ruth P. Romero, ponente.
8
G.R. No. 102253, June 2, 1995; J. Jose C. Vitug, ponente.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 169129 March 28, 2007
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS.VICTORINO F. SANTOS, & LAGRIMAS
SANTOS, ERNESTO F. SANTOS, and TADEO F. SANTOS, Petitioners,
vs.
SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.
D E C I S I O N
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure
seeking to annul and set aside the Decision
1
and Resolution
2
of the Court of Appeals in CA-G.R. CV No. 60450
entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza Lati,
Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June
2005 and 29 July 2005, respectively, which granted the appeal filed by herein respondents Spouses Jose
Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered herein petitioners Spouses Virgilio F. Santos
and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F.
Santos to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorneys fees
and litigation expenses, thus, reversing the Decision
3
of the Regional Trial Court (RTC) of Pasig City, dated 17
June 1998 which dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses
Lumbao for lack of merit.
Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving
heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati and
Lagrimas Santos are the daughters-in-law of Rita.
Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square
meter lot (subject property), which they purportedly bought from Rita during her lifetime.
The facts of the present case are as follows:
On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property
which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who died intestate on 19
September 1978. On the first occasion, Rita sold 100 square meters of her inchoate share in her mothers estate
through a document denominated as "Bilihan ng Lupa," dated 17 August 1979.
4
Respondents Spouses Lumbao
claimed the execution of the aforesaid document was witnessed by petitioners Virgilio and Tadeo, as shown by
their signatures affixed therein. On the second occasion, an additional seven square meters was added to the
land as evidenced by a document also denominated as "Bilihan ng Lupa," dated 9 January 1981.
5
After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and erected
thereon a house which they have been occupying as exclusive owners up to the present. As the exclusive owners
of the subject property, respondents Spouses Lumbao made several verbal demands upon Rita, during her
lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents to effect the
issuance of a separate title in favor of respondents Spouses Lumbao insofar as the subject property is concerned.
Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina Lumbao she
could not deliver the title to the subject property because the entire property inherited by her and her co-heirs
from Maria had not yet been partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one
another, executed a Deed of Extrajudicial Settlement,
6
adjudicating and partitioning among themselves and the
other heirs, the estate left by Maria, which included the subject property already sold to respondents Spouses
Lumbao and now covered by TCT No. 81729
7
of the Registry of Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter
8
to petitioners
but despite receipt of such demand letter, petitioners still failed and refused to reconvey the subject property to
the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for Reconveyance with Damages
9
before the RTC of Pasig City.
Petitioners filed their Answer denying the allegations that the subject property had been sold to the respondents
Spouses Lumbao. They likewise denied that the Deed of Extrajudicial Settlement had been fraudulently executed
because the same was duly published as required by law. On the contrary, they prayed for the dismissal of the
Complaint for lack of cause of action because respondents Spouses Lumbao failed to comply with the Revised
Katarungang Pambarangay Law under Republic Act No. 7160, otherwise known as the Local Government Code
of 1991, which repealed Presidential Decree No. 1508
10
requiring first resort to barangay conciliation.
Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered that on 16
February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta
S. Esplana for the sum of P30,000.00. The said Deed of Real Estate Mortgage was annotated at the back of TCT
No. PT-81729 on 26 April 1991. Also, in answer to the allegation of the petitioners that they failed to comply with
the mandate of the Revised Katarungang Pambarangay Law, respondents Spouses Lumbao said that the
Complaint was filed directly in court in order that prescription or the Statute of Limitations may not set in.
During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their
witnesses, while the petitioners presented only the testimony of petitioner Virgilio.
The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows:
Premises considered, the instant complaint is hereby denied for lack of merit.
Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents spouses
Lumbao] are hereby directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as attorneys fees and
litigation expenses, and 2) costs of the suit.
11
Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the appellate court
rendered a Decision, thus:
WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision dated June
17, 1998 of the Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby REVERSED and
SET ASIDE. A new judgment is hereby entered ordering [petitioners] to reconvey 107 square meters of the
subject [property] covered by TCT No. PT-81729 of the Registry of Deeds of Pasig City, Metro Manila, and to pay
to [respondents spouses Lumbao] the sum of P30,000.00 for attorneys fees and litigation expenses.
No pronouncement as to costs.
12
Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied in the
Resolution of the appellate court dated 29 July 2005 for lack of merit.
Hence, this Petition.
The grounds relied upon by the petitioners are the following:
I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE DECISION
OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS OF FACTS OF
TWO COURTS.
II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE
PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS [SPOUSES
LUMBAO] AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT
RECOVER THE LOT ALLEGEDLY SOLD TO THEM.
III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING HEREIN
PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL
SETTLEMENT" DATED [2 MAY 1986].
IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN NG
LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED
BY THE LATE RITA CATOC.
V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
RESPONDENTS [SPOUSES LUMBAOS] ACTION FOR RECONVEYANCE WITH DAMAGES
CANNOT BE SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG
LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981].
VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
RESPONDENTS [SPOUSES LUMBAOS] COMPLAINT FOR RECONVEYANCE IS DISMISSABLE
(SIC) FOR NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic
Act No. 7160.
VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS CLAIM FOR
DAMAGES AND ATTORNEY[]S FEES.
Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual
findings of the trial court and the appellate court are conflicting. They allege that the findings of fact by the trial
court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents known as
"Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the appellate court. And even
assuming that they were witnesses to the aforesaid documents, still, respondents Spouses Lumbao were not
entitled to the reconveyance of the subject property because they were guilty of laches for their failure to assert
their rights for an unreasonable length of time. Since respondents Spouses Lumbao had slept on their rights for a
period of more than 12 years reckoned from the date of execution of the second "Bilihan ng Lupa," it would be
unjust and unfair to the petitioners if the respondents will be allowed to recover the subject property.
Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even
respondents Spouses Lumbaos witness, Carolina Morales, testified that neither petitioner Virgilio nor petitioner
Tadeo was present during the execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981.
Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation to
give notice to all creditors of the estate subject of partition to contest the same within the period prescribed by law.
Since no claimant appeared to interpose a claim within the period allowed by law, a title to the subject property
was then issued in favor of the petitioners; hence, they are considered as holders in good faith and therefore
cannot be barred from entering into any subsequent transactions involving the subject property.
Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa" because
the same were null and void for the following reasons: 1) for being falsified documents because one of those
documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that they
appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the
properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property
in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the right of
the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through
estoppel by laches; and 4) the respondents Spouses Lumbaos claim over the subject property had already
prescribed.
Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses
Lumbao was dismissible because they failed to comply with the mandate of Presidential Decree No. 1508, as
amended by Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160.
Given the foregoing, the issues presented by the petitioners may be restated as follows:
I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is
dismissible for their failure to comply with the mandate of the Revised Katarungang Pambarangay Law
under R.A. No. 7160.
II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can be
the bases of the respondents spouses Lumbaos action for reconveyance with damages.
III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17 August
1979 and 9 January 1981 and consequently, reconvey the subject property to herein respondents spouses
Lumbao.
It is well-settled that in the exercise of the Supreme Courts power of review, the court is not a trier of facts and
does not normally undertake the re-examination of the evidence presented by the contending parties during the
trial of the case considering that the findings of fact of the Court of Appeals are conclusive and binding on the
Court.
13
But, the rule is not without exceptions. There are several recognized exceptions
14
in which factual issues
may be resolved by this Court. One of these exceptions is when the findings of the appellate court are contrary to
those of the trial court. This exception is present in the case at bar.
Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for
Reconveyance with Damages filed by respondents Spouses Lumbao should be dismissed for failure to comply
with the barangay conciliation proceedings as mandated by the Revised Katarungang Pambarangay Law under
Republic Act No. 7160. This argument cannot be sustained.
Section 408 of the aforesaid law and Administrative Circular No. 14-93
15
provide that all disputes between parties
actually residing in the same city or municipality are subject to barangay conciliation. A prior recourse thereto is a
pre-condition before filing a complaint in court or any government offices. Non-compliance with the said condition
precedent could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to
dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of
competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants
failed to object to such exercise of jurisdiction.
16
While it is true that the present case should first be referred to the Barangay Lupon for conciliation because the
parties involved herein actually reside in the same city (Pasig City) and the dispute between them involves a real
property, hence, the said dispute should have been brought in the city in which the real property, subject matter of
the controversy, is located, which happens to be the same city where the contending parties reside. In the event
that respondents Spouses Lumbao failed to comply with the said condition precedent, their Complaint for
Reconveyance with Damages can be dismissed. In this case, however, respondents Spouses Lumbaos non-
compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their
answer that the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao should be
dismissed for their failure to comply with the condition precedent, which in effect, made the complaint prematurely
instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the
said complaint.
Emphasis must be given to the fact that the petitioners could have prevented the trial court from exercising
jurisdiction over the case had they filed a Motion to Dismiss. However, instead of doing so, they invoked the very
same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners actively participated in
the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the
respondents Spouses Lumbao. It is elementary that the active participation of a party in a case pending against
him before a court is tantamount to recognition of that courts jurisdiction and a willingness to abide by the
resolution of the case which will bar said party from later on impugning the courts jurisdiction.
17
It is also well-
settled that the non-referral of a case for barangay conciliation when so required under the law is not jurisdictional
in nature and may therefore be deemed waived if not raised seasonably in a motion to dismiss.
18
Hence, herein
petitioners can no longer raise the defense of non-compliance with the barangay conciliation proceedings to seek
the dismissal of the complaint filed by the respondents Spouses Lumbao, because they already waived the said
defense when they failed to file a Motion to Dismiss.
As regards the second issue, petitioners maintain that the "Bilihan ng Lupa," dated 17 August 1979 and 9 January
1981 are null and void for being falsified documents as it is made to appear that petitioners Virgilio and Tadeo
were present in the execution of the said documents and that the identities of the properties in those documents
in relation to the subject property has not been established by the evidence of the respondents Spouses Lumbao.
Petitioners also claim that the enforceability of those documents is barred by prescription of action and laches.
It is the petitioners incessant barking that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January
1981 were falsified because it was made to appear that petitioners Virgilio and Tadeo were present in the
executions thereof, and their allegation that even respondents Spouses Lumbaos witness Carolina Morales
proved that said petitioners were not present during the execution of the aforementioned documents. This is
specious.
Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17 August
1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners Answer and
Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made an
admission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa," dated 17 August 1979.
19
However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his cross-
examination, denied having knowledge of the sale transaction and claimed that he could not remember the same
as well as his appearance before the notary public due to the length of time that had passed. Noticeably,
petitioner Virgilio did not categorically deny having signed the "Bilihan ng Lupa," dated 17 August 1979 and in
support thereof, his testimony in the cross-examination propounded by the counsel of the respondents Spouses
Lumbao is quoted hereunder:
ATTY. CHIU:
Q. Now, you said, Mr. WitnessVirgilio Santos, that you dont know about this document which was marked as
Exhibit "A" for the [respondents spouses Lumbao]?
ATTY. BUGARING:
The question is misleading, your Honor. Counsel premised the question that he does not have any knowledge but
not that he does not know.
ATTY. CHIU:
Q. Being you are one of the witnesses of this document? [I]s it not?
WITNESS:
A. No, sir.
Q. I am showing to you this document, there is a signature at the left hand margin of this document Virgilio
Santos, will you please go over the same and tell the court whose signature is this?
A. I dont remember, sir, because of the length of time that had passed.
Q. But that is your signature?
A. I dont have eyeglasses My signature is different.
Q. You never appeared before this notary public Apolinario Mangahas?
A. I dont remember.
20
As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon
him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it
expects to prove, but it is not evidence.
21
And in spite of the presence of judicial admissions in a partys pleading,
the trial court is still given leeway to consider other evidence presented.
22
However, in the case at bar, as the
Court of Appeals mentioned in its Decision, "[herein petitioners] had not adduced any other evidence to override
the admission made in their [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa
dated 17 August 1979] except that they were just misled as to the purpose of the document, x x x."
23
Virgilios
answers were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading
are binding and conclusive upon him applies in this case.
On the testimony of respondents Spouses Lumbaos witness Carolina Morales, this Court adopts the findings
made by the appellate court. Thus -
[T]he trial court gave singular focus on her reply to a question during cross-examination if the [petitioners Virgilio
and Tadeo] were not with her and the vendor [Rita] during the transaction. It must be pointed out that earlier in
the direct examination of said witness, she confirmed that [respondents spouses Lumbao] actually bought the lot
from [Rita] ("nagkabilihan"). Said witness positively identified and confirmed the two (2) documents evidencing the
sale in favor of [respondents spouse Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and
Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo]
did not at any time sign as witnesses as to the deed of sale attesting to their mothers voluntary act of selling a
portion of her share in her deceased mothers property. The rule is that testimony of a witness must be
considered and calibrated in its entirety and not by truncated portions thereof or isolated passages therein.
24
Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly notarized
before a notary public. It is well-settled that a document acknowledged before a notary public is a public
document
25
that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated
therein and a conclusive presumption of its existence and due execution.
26
To overcome this presumption, there
must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be
upheld.
27
In addition, one who denies the due execution of a deed where ones signature appears has the burden
of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged
the deed to be a voluntary act. Nonetheless, in the present case petitioners denials without clear and convincing
evidence to support their claim of fraud and falsity were not sufficient to overthrow the above-mentioned
presumption; hence, the authenticity, due execution and the truth of the facts stated in the aforesaid "Bilihan ng
Lupa" are upheld.
The defense of petitioners that the identities of the properties described in the "Bilihan ng Lupa," dated 17 August
1979 and 9 January 1981 in relation to the subject property were not established by respondents Spouses
Lumbaos evidence is likewise not acceptable.
It is noteworthy that at the time of the execution of the documents denominated as "Bilihan ng Lupa," the entire
property owned by Maria, the mother of Rita, was not yet divided among her and her co-heirs and so the
description of the entire estate is the only description that can be placed in the "Bilihan ng Lupa, dated 17 August
1979 and 9 January 1981" because the exact metes and bounds of the subject property sold to respondents
Spouses Lumbao could not be possibly determined at that time. Nevertheless, that does not make the contract of
sale between Rita and respondents Spouses Lumbao invalid because both the law and jurisprudence have
categorically held that even while an estate remains undivided, co-owners have each full ownership of their
respective aliquots or undivided shares and may therefore alienate, assign or mortgage them.
28
The co-owner,
however, has no right to sell or alienate a specific or determinate part of the thing owned in common, because
such right over the thing is represented by an aliquot or ideal portion without any physical division. In any case,
the mere fact that the deed purports to transfer a concrete portion does not per se render the sale void. The sale
is valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject to the
results of the partition upon the termination of the co-ownership.
29
In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed of
Extrajudicial Settlement, the 107- square meter lot sold by the mother of the petitioners to respondents Spouses
Lumbao should be deducted from the total lot, inherited by them in representation of their deceased mother,
which in this case measures 467 square meters. The 107-square meter lot already sold to respondents Spouses
Lumbao can no longer be inherited by the petitioners because the same was no longer part of their inheritance as
it was already sold during the lifetime of their mother.
Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa" documents was described as "a portion
of a parcel of land covered in Tax Declarations No. A-018-01674," while the subject matter of the Deed of
Extrajudicial Settlement was the property described in Transfer Certificate of Title (TCT) No. 3216 of the Registry
of Deeds of the Province of Rizal in the name of Maria is of no moment because in the "Bilihan ng Lupa," dated
17 August 1979 and 9 January 1981, it is clear that there was only one estate left by Maria upon her death. And
this fact was not refuted by the petitioners. Besides, the property described in Tax Declaration No. A-018-01674
and the property mentioned in TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of
Rizal, and almost have the same boundaries. It is, thus, safe to state that the property mentioned in Tax
Declaration No. A-018-01674 and in TCT No. 3216 are one and the same.
The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance, the
decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its
title which has been wrongfully or erroneously registered in another persons name to its rightful or legal owner, or
to the one with a better right. It is, indeed, true that the right to seek reconveyance of registered property is not
absolute because it is subject to extinctive prescription. However, when the plaintiff is in possession of the land to
be reconveyed, prescription cannot set in. Such an exception is based on the theory that registration proceedings
could not be used as a shield for fraud or for enriching a person at the expense of another.
30
In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe
because the latter have been and are still in actual possession and occupation as owners of the property sought
to be reconveyed, which fact has not been refuted nor denied by the petitioners. Furthermore, respondents
Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square
meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title
into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the
flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria,
petitioners still included the 107-square meter lot in their inheritance which they divided among themselves
despite their knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao.
Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9
January 1981 are valid and enforceable and can be made the basis of the respondents Spouses Lumbaos action
for reconveyance. The failure of respondents Spouses Lumbao to have the said documents registered does not
affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the
contract as between the parties, for the effect of registration serves chiefly to bind third persons. The principal
purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the
property had been entered into. Where the party has knowledge of a prior existing interest which is unregistered
at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of
registration as to him.
31
Hence, the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981,
being valid and enforceable, herein petitioners are bound to comply with their provisions. In short, such
documents are absolutely valid between and among the parties thereto.
Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in
the present case. Article 1311
32
of the NCC is the basis of this rule. It is clear from the said provision that
whatever rights and obligations the decedent have over the property were transmitted to the heirs by way of
succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of
the inheritance of the heirs.
33
Thus, the heirs cannot escape the legal consequence of a transaction entered into
by their predecessor-in-interest because they have inherited the property subject to the liability affecting their
common ancestor. Being heirs, there is privity of interest between them and their deceased mother. They only
succeed to what rights their mother had and what is valid and binding against her is also valid and binding as
against them. The death of a party does not excuse nonperformance of a contract which involves a property right
and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly,
nonperformance is not excused by the death of the party when the other party has a property interest in the
subject matter of the contract.
34
In the end, despite the death of the petitioners mother, they are still bound to comply with the provisions of the
"Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they must reconvey to herein
respondents Spouses Lumbao the 107-square meter lot which they bought from Rita, petitioners mother. And as
correctly ruled by the appellate court, petitioners must pay respondents Spouses Lumbao attorneys fees and
litigation expenses for having been compelled to litigate and incur expenses to protect their interest.
35
On this
matter, we do not find reasons to reverse the said findings.
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the
Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners
are ordered to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorneys
fees and litigation expenses. Costs against petitioners.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA MARTINEZ
Associate Justice
On leave
ROMEO J. CALLEJO, SR.
Asscociate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Courts Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation, it is hereby
certified that the conclusions in the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Foonotes
1
Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Lucas P. Bersamin and
Lucenito N. Tagle, concurring, rollo, pp. 47-62.
2
Id. at 64.
3
Penned by Judge Ma. Cristina C. Estrada, rollo, pp. 103-114.
4
Id. at 73-74.
5
Id. at 77-78.
6
Id. at 80-82.
7
Id. at 83.
8
Id. at 84-86.
9
Id. at 66-72.
10
A decree, "Establishing a System of Amicably Settling Disputes at the Barangay Level."
11
Rollo, p. 114.
12
Id. at 61.
13
Almendrala v. Ngo, G.R. No. 142408, 30 September 2005, 471 SCRA 311, 322.
14
Recognized exceptions to this rule are: (1) when the findings are grounded entirely on speculation,
surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3)
when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5)
when the finding of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond
the issues of the case, or its findings are contrary to the admissions of both the appellee and the appellant;
(7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record; or (11) when
the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion [Langkaan Realty Development, Inc. v. United
Coconut Planters Bank, G.R. No. 139437, 8 December 2000, 347 SCRA 542; Nokom v. National Labor
Relations Commissions, 390 Phil. 1228, 1243 (2000); Commissioner of Internal Revenue v. Embroidery
and Garments Industries (Phils.), Inc., 364 Phil. 541, 546-547 (1999); Sta. Maria v. Court of Appeals, 349
Phil. 275, 282-283 (1998); Almendrala v. Ngo, G.R. No. 142408, 30 September 2005, 471 SCRA 311, 322].
15
Guidelines on the Katarungang Pambarangay Conciliation Procedure to Prevent Circumvention of the
Revised Katarungang Pambarangay Law [Sections 399-442, Chapter VII, Title I, Book III, R.A. No.
7160,otherwise known as the Local Government Code of 1991] issued by the Supreme Court on 15 July
1993.
16
Royales v. Intermediate Appellate Court, G.R. No. L-65072, 31 January 1984, 127 SCRA 470, 473-474.
17
Sta. Rosa Realty Development Corporation v. Amante, G.R. No. 112526, 16 March 2005, 453 SCRA
432, 477.
18
Baares II v. Balising, G.R. No. 132624, 13 March 2000, 328 SCRA 36, 50-51.
19
Rollo, pp. 87, 97.
20
TSN, 12 September 1996. Records, pp. 13-14.
21
Atillo III v. Court of Appeals, G.R. No. 119053, 23 January 1997, 266 SCRA 596, 604.
22
Id. at 605.
23
Rollo, p. 55.
24
Id. at 55-56.
25
Rule 132, Section 19(b) of the Revised Rules on Evidence.
26
Id., Section 23 of the Revised Rules on Evidence; Medina v. Greenfield Development Corporation, G.R.
No. 140228, 19 November 2004, 443 SCRA 150, 160; Agasen v. Court of Appeals, G.R. No. 115508, 15
February 2000, 325 SCRA 504, 511.
27
Medina v. Greenfield Development Corporation, id.
28
Barcenas v. Tomas, G.R. No. 150321, 31 March 2005, 454 SCRA 593, 610-611.
29
Heirs of the Late Spouses Aurelio and Esperanza Balite v. Lim, G.R. No. 152168, 10 December 2004,
446 SCRA 56, 71.
30
Heirs of Pomposa Saludares v. Court of Appeals, G.R. No. 128254, 16 January 2004, 420 SCRA 51, 56-
58.
31
Heirs of Eduardo Manlapat v. Court of Appeals, G.R. No. 125585, 8 June 2005, 459 SCRA 412, 426.
32
Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where
the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or
by provision of law. The heir is not liable beyond the value of the property he received from the decedent.
33
Tanay Recreation Center and Development Corp. v. Fausto, G.R. No. 140182, 12 April 2005, 455 SCRA
436, 446
34
DKC Holdings Corporation v. Court of Appeals, G.R. No. 118248, 5 April 2000, 329 SCRA 666, 674-675.
35
Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial
costs cannot be recovered, except:
(1) x x x
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;
(3) x x x
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 162784 June 22, 2007
NATIONAL HOUSING AUTHORITY, petitioner,
vs.
SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents.
D E C I S I O N
PUNO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority (NHA) against the
Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and private respondent Segunda
Almeida.
On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several portions of land
which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced by an Agreement to Sell No.
3787.
1
By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian Reform (DAR).
On July 31, 1975, the DAR was succeeded by the NHA by virtue of Presidential Decree No. 757.
2
NHA as the
successor agency of LTA is the petitioner in this case.
The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private
respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left heirs.
Margarita Herrera passed away on October 27, 1971.
3
On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a Deed of
Self-Adjudication claiming that she is the only remaining relative, being the sole surviving daughter of the
deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera.
The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed
by Margarita Herrera. The pertinent portions of which are as follows:
SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;
Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at
tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay malaya at
kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod:
1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San
Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG
PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land
Tenure Administration;
2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration,
at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No. 3787) ay
ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G. Jose C. Tolosa, at
lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959;
3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan
nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran
ng kaniyang sariling cuarta sa Land Tenure Administration;
4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang
lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA,
Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap
ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana at;
5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay
ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si Francisca
Herrera ang loteng nasasabi sa unahan.
SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa
kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960.
4
The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand side of
both pages of the document with the said document having 2 pages in total. Margarita Herrera placed her
thumbmark
5
above her name in the second page and at the left-hand margin of the first page of the document.
The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-Adjudication before
the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now, Regional Trial Court Branch 25). The
case for annulment was docketed as Civil Case No. B-1263.
6
On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) was
rendered and the deed was declared null and void.
7
During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed an
application with the NHA to purchase the same lots submitting therewith a copy of the "Sinumpaang Salaysay"
executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the
application.
In a Resolution
8
dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding
that:
From the evidence of the parties and the records of the lots in question, we gathered the following facts:
the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28, 1959
by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz Herrera Mercado
who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera;
Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots
transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant;
protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the
Tunasan Homesite since birth; protestee was born on the lots in question; protestee left the place only after
marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee) son Roberto Herrera
has been occupying the lots in question; he has been there even before the death of the late Margarita
Herrera; on October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay" whereby she
waived or transferred all her rights and interest over the lots in question in favor of the protestee;
and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land Tenure
Administration.
This Office finds that protestee has a better preferential right to purchase the lots in question.
9
Private respondent Almeida appealed to the Office of the President.
10
The NHA Resolution was affirmed by the
Office of the President in a Decision dated January 23, 1987.
11
On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate which
they submitted to the NHA. Said transfer of rights was approved by the NHA.
12
The NHA executed several deeds
of sale in favor of the heirs of Francisca Herrera and titles were issued in their favor.
13
Thereafter, the heirs of
Francisca Herrera directed Segunda Mercado-Almeida to leave the premises that she was occupying.
Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent
Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed
a Complaint on February 8, 1988, for "Nullification of Government Lot's Award," with the Regional Trial Court
of San Pedro, Laguna, Branch 31.
In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed properties, and re-
raised the fact that Francisca Herrera's declaration of self-adjudication has been adjudged as a nullity because
the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged that the complaint was barred
by laches and that the decision of the Office of the President was already final and executory.
14
They also
contended that the transfer of purchase of the subject lots is perfectly valid as the same was supported by a
consideration and that Francisca Herrera paid for the property with the use of her own money.
15
Further, they
argued that plaintiff's occupation of the property was by mere tolerance and that they had been paying taxes
thereon.
16
The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of jurisdiction.
17
The
Court of Appeals in a Decision dated June 26, 1989 reversed and held that the Regional Trial Court had
jurisdiction to hear and decide the case involving "title and possession to real property within its jurisdiction."
18
The case was then remanded for further proceedings on the merits.
A pre-trial was set after which trial ensued.
On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the
decision of the Office of the President awarding the subject lots in favor of Francisca Herrera. It declared the
deeds of sale executed by NHA in favor of Herrera's heirs null and void. The Register of Deeds of Laguna,
Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded
to private respondent.
The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition
of property which shall take effect upon death. It then held that the said document must first be submitted to
probate before it can transfer property.
Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration which were
both denied on July 21, 1998 for lack of merit. They both appealed to the Court of Appeals. The brief for the heirs
of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002 for being
a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late.
On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz:
There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959.
There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant
NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and interest over the
subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise. After a perusal of the
"Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary
and grammatical sense that the document is a simple disposition of her estate to take effect after her
death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the
intention of Margarita Herrera was to merely assign her right over the lots to her daughter Francisca
Herrera, she should have given her "Sinumpaang Salaysay" to the defendant NHA or to Francisca Herrera
for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior
thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last
will and not an assignment of rights as what the NHA in its resolution would want to make it appear. The
intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's demise
executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was
only when said deed was questioned in court by the surviving heirs of Margarita Herrera's other daughter,
Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject lots and presented the
"Sinumpaang Salaysay" stating that it is a deed of assignment of rights.
19
The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It
upheld the trial court ruling that the "Sinumpaang Salaysay" was not an assignment of rights but one that involved
disposition of property which shall take effect upon death. The issue of whether it was a valid will must first be
determined by probate.
Petitioner NHA elevated the case to this Court.
Petitioner NHA raised the following issues:
A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE
PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT THE PRINCIPLE OF
ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO BETWEEN
THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS;
B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT
LOTS; AND
C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY.
We rule for the respondents.
Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But
jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of
a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of
public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts
having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with
power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error
or a certiorari, such final adjudication may be pleaded as res judicata."
20
To be sure, early jurisprudence were
already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what
are usually understood as courts without unreasonably circumscribing the scope thereof and that the more
equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have
been conferred.
In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,
21
the Court held that the rule prescribing that
"administrative orders cannot be enforced in the courts in the absence of an express statutory provision for that
purpose" was relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial powerthat
which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative
agency for the "formulation of a final order."
22
This function applies to the actions, discretion and similar acts of
public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts,
hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a
judicial nature.
23
However, administrative agencies are not considered courts, in their strict sense. The doctrine of
separation of powers reposes the three great powers into its three (3) branchesthe legislative, the executive,
and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the
executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary.
Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not
there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."
24
Courts have an expanded role under the 1987 Constitution in the resolution
of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the
other branches of government committed an act that falls under the category of grave abuse of discretion
amounting to lack or excess of jurisdiction.
25
Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 1980
26
where it is therein
provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate
jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and
Quasi-Judicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of
the Supreme Court in accordance with the Constitution"
27
and contends that the Regional Trial Court has no
jurisdiction to rule over awards made by the NHA.
Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of
the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court
of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per entry of
judgment dated October 10, 1989).
28
We find no reason to disturb this ruling. Courts are duty-bound to put an
end to controversies. The system of judicial review should not be misused and abused to evade the operation of a
final and executory judgment.
29
The appellate court's decision becomes the law of the case which must be
adhered to by the parties by reason of policy.
30
Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the
application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her
application on the subject lot; that it considered the respective application and inquired whether she had all the
qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private
respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award
was not done arbitrarily.
The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the
NHA.
31
That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by
Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same before
it."
32
We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted that the
effectivity of the said document commences at the time of death of the author of the instrument; in her words
"sakaling ako'y bawian na ng Dios ng aking buhay" Hence, in such period, all the interests of the person should
cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of
Article 774 of the Civil Code which provides that:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law.
33
By considering the document, petitioner NHA should have noted that the original applicant has already passed
away. Margarita Herrera passed away on October 27, 1971.
34
The NHA issued its resolution
35
on February 5,
1986. The NHA gave due course to the application made by Francisca Herrera without considering that the initial
applicant's death would transfer all her property, rights and obligations to the estate including whatever interest
she has or may have had over the disputed properties. To the extent of the interest that the original owner had
over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that
interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirsin
accordance with a will or by operation of law.
The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an
existing Contract to Sell
36
with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was
neither nullified nor revoked. This Contract to Sell was an obligation on both partiesMargarita Herrera and NHA.
Obligations are transmissible.
37
Margarita Herrera's obligation to pay became transmissible at the time of her
death either by will or by operation of law.
If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should
transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot
make another contract to sell to other parties of a property already initially paid for by the decedent. Such would
be an act contrary to the law on succession and the law on sales and obligations.
38
When the original buyer died, the NHA should have considered the estate of the decedent as the next "person"
39
likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the
repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the
Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed
therein null and void
40
should have alerted the NHA that there are other heirs to the interests and properties of
the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore
acted arbitrarily in the award of the lots.
We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court
of Appeals and the Regional Trial Court which noted that it has an element of testamentary disposition where (1)
it devolved and transferred property; (2) the effect of which shall transpire upon the death of the instrument
maker.
41
IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of
Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional Trial Court of San
Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED.
No cost.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna, Garcia, JJ., concur.
Footnotes
1
Rollo, at 8.
2
A Decree Creating the National Housing Authority and Dissolving the Existing Housing Agencies, Defining
Its Powers and Functions, Providing Funds Therefor, and for Other Purposes, Presidential Decree No. 757,
promulgated July 31, 1975.
3
Rollo, at 70.
4
Id.
5
It should be noted that a thumbmark is considered a valid signature. As held in Payad v. Tolentino, 62
Phil. 848 (1936): "The testator's thumbprint is always valid and sufficient signature for the purpose of
complying with the requirement of the article. While in most of these cases, the testator was suffering from
some infirmity which made the writing of the testator's name difficult or impossible, there seems to be no
basis for limiting the validity of thumbprints only to cases of illness or infirmity."
6
Rollo, at 49.
7
Vol. 1, Original Record, at 11-14.
8
Rollo, at 39-43.
9
Id., at 41-42 (emphasis supplied).
10
Id., at 9.
11
Id., at 9, 44-47.
12
Id., at 9.
13
Id., at 25-26. Francisca Herrera left behind her husband, Macario Berroya, and children: Ramon,
Antonio, Alberto, Rosita, Pacita, Bernabe, Gregorio, Josefina and Rustica. In the extra judicial settlement
made by the said heirs, Rosita, Pacita, Bernabe, Gregorio, Josefina and Rustica waived all their rights,
interest and participation therein in favor of their siblings Macario, Alberto, Ramon and Antonio. Deeds of
sale involving the subject lots were executed by the NHA in favor of Alberto, Antonio and Macario. Hence,
TCT Nos. T-173557, T-173579, T-173578 and T-183166 were issued to Macario, Alberto and Antonio,
respectively.
14
Id., at 27.
15
Id., at 27-28.
16
Id., at 28.
17
Id., at 5.
18
Id., at 6; see Annex "F."
19
Id., at 71-72.
20
Brillantes v. Castro, 99 Phil. 497, 503 (1956).
21
G.R. No. L-14791, September 30, 1963, 9 SCRA 75.
22
Administrative Code of 1987, Executive Order No. 292, Bk. VIII, ch. 1, 2(9).
23
Midland Insurance Corp. v. IAC, G.R. No. L-71905, August 13, 1986, 143 SCRA 458, 462.
24
1987 Phil. Const., art. VIII, 1 as explained in United Residents of Dominical Hills, Inc. v. Commission on
Settlement of Land Problems, G.R. No. 135945, March 7, 2001, 353 SCRA 783, 797-798.
25
1987 Phil. Const., art. VIII, 1 2.
26
An Act Reorganizing the Judiciary, Appropriating Funds Therefor and for Other Purposes, Batas
Pambansa Blg. 129, promulgated August 14, 1981.
27
Id. 9 (3).
28
Records, vol.1, at 80.
29
Buaya v. Stronghold Insurance, Corp., 396 Phil. 739 (2000).
30
Ayala Corp. v. Rosa-Diana Realty and Dev't. Corp., 400 Phil. 511 (2000).
31
Rollo, at 17.
32
Id.
33
Civil Code, art. 774 (emphasis supplied).
34
Rollo, at 70.
35
Id., at 39-43.
36
Id., at 24; C.A. G.R. No. 68370 citing Agreement No. 3787, dated July 28, 1959.
37
Araneta v. Montelibano, 14 Phil. 117 (1909).
38
Civil Code, arts. 1544 (which prohibit double sales) and 1165 (which established the obligation of the
seller to the buyer respecting a thing which is determinate in nature).
39
Because the estate acquires juridical personality to continue the transmissible obligations and rights of
the decedent.
40
Vol. 1, Original Record, at 11-14.
41
Rollo, at 34.

Francisco G. Banzon For Petitioner. Renecio R. Espiritu For Private Respondents

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Francisco G. Banzon For Petitioner. Renecio R. Espiritu For Private Respondents

Uploaded by

Copyright:

Available Formats

Today is Friday, June 20, 2014

Republic of the Philippines

You might also like