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 773B. 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 4defendant 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 773B 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
p a r t y ' s c o n t ra c t u a l r i g h t s a n d o b l i g a t i o n s a r e
transmissible to the successors.
T h e r u l e i s a c o n s e q u e n c e o f t h e p r o g r e s s i ve
"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.

Republic of the Philippines

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. CAG.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.

Republic of the Philippines

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 CAG.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 LorayesCornelio 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 LorayesCornelio 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.

Republic of the Philippines

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.

Republic of the Philippines

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 letter21 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.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 113725
June 29, 2000
1
JOHNNY S. RABADILLA, petitioner,
vs.
COURT OF APPEALS AND MARIA MARLENA 2
COSCOLUELLA Y BELLEZA VILLACARLOS,
respondents.
DECISION
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, predecessorin-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;
For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1989-90;
For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1990-91; and
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before
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 nonperformance 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; defendantsappellee'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 8438 and 8459 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 decedent10 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 successorsin-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 nonperformance 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 nonfulfillment 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.

Republic of the Philippines

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.
DECISION
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
Decision1 of the Court of Appeals2 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 defendantsappellees 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 plaintiffsappellants 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 offtangent"?
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 memorandum4 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, plaintiffsappellants 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 selfserving, 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 wellsettled 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.

Republic of the Philippines

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.
DECISION
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 Decision1
and Resolution2 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 Decision3 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. 817297 of the
Registry of Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through
counsel, sent a formal demand letter8 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 Damages9 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.
150810 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
L U M B A O S ] A C T I O N F O R R E C O N V E YA N C E W I T H
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 exceptions14 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. 14-9315 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 noncompliance 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 crossexamination, 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
document25 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 coowner, 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 107square 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 131132 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.

Republic of the Philippines

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.
DECISION
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 HerreraMercado 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
p a m a m a g i t a n n g p a g h u h u l o g s a L a n d Te n u r e
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
thumbmark5 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 Resolution8 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
M a r c h 8 , 1 9 6 6 w i t h t h e d e f u n c t L a n d Te n u r e
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 reraised the fact that Francisca Herrera's declaration of selfadjudication 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
j u r i s p r u d e n c e h a s a l s o r e c o g n i ze d t h e r u l e o f
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 198026 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 resolution35 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 Sell36 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 void40 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.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 84450
February 4, 1991
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
GLORIA UMALI y AMADO AND SUZETH UMALI y
AMADO, defendants-appellants.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for defendants-appellants.
MEDIALDEA, J.:
In Criminal Case No. 85-473 of the Regional Trial Court,
Branch 53, Lucena City, Gloria Umali and Suzeth Umali
were charged for violation of Section 4, Article 1 of the
Dangerous Drugs Act of 1972 under an information which
reads:
That on or about the 22nd day of April, 1985, at Recto
Street, Poblacion, Municipality of Tiaong, Province of
Quezon, Philippines, and within the jurisdiction of this
Honorable Court, the abovenamed accused, conspiring
and confederating together and mutually helping each
other, did then and there willfully, unlawfully and
feloniously sell, deliver and give marijuana or Indian
Hemp, a prohibited drug to one Francisco Manalo y
Arellano, without authority of law.
Contrary to law. (Rollo, pp. 7-8)
Upon arraignment, Gloria Umali entered a plea of "not,
guilty" as accused Suzeth Umali remained at large. After
trial, the lower court rendered a decision on September
9, 1987, the dispositive portion thereof states:
WHEREFORE, premises considered, this Court finds
accused Gloria Umali guilty beyond reasonable doubt of
violating Sec. 4, Art. 1 (sic) of RA 6425 as amended,
otherwise known as the Dangerous Drugs Act of 1972,
and is hereby sentenced to suffer the penalty of
Reclusion Perpetua. Accused being a detention prisoner is

entitled to enjoy the privileges of her preventive

imprisonment. The case against Suzeth Umali, her coaccused in this case is hereby ordered ARCHIVED to be
revived until the arrest of said accused is effected. The
warrant of arrest issued against her is hereby ordered
reiterated.
SO ORDERED. (Rollo, p. 30)
Hence, this appeal from the lower court's decision with
the following assignment of errors:
I
THE COURT A QUO GRAVELY ERRED IN GIVING WEIGHT
AND CREDENCE TO THE BIASED TESTIMONY OF
FRANCISCO MANALO
II
THE COURT A QUO GRAVELY ERRED IN ADMITTING THE
PROSECUTION'S EVIDENCE WHICH WERE OBTAINED IN
VIOLATION OF ACCUSED'S CONSTITUTIONAL RIGHTS
AGAINST ILLEGAL SEARCH AND SEIZURE
III
THE COURT A QUO GRAVELY ERRED IN DECLARING THAT
ACCUSED NEVER DISPUTED THE CLAIM THAT SHE WAS
THE SOURCE OF MARIJUANA LEAVES FOUND IN THE
POSSESSION OF FRANCISCO MANALO ON APRIL 5, 1985
AND THAT WHICH WAS USED BY PIERRE PANGAN
RESULTING TO THE LATTER'S DRUG DEPENDENCY
IV
THE COURT A QUO GRAVELY ERRED IN FINDING
ACCUSED GLORIA 1, GUILTY OF VIOLATION OF
DANGEROUS DRUGS ACT OF 1972 ON THE BASIS OF
M E R E C O N J E C T U R E S A N D N OT O N FA C TS A N D
CIRCUMSTANCES PROVEN
V
THE COURT A QUO GRAVELY ERRED IN NOT FINDING
THAT THE GUILT OF THE ACCUSED DID NOT PASS THE
TEST OF MORAL CERTAINTY. (Rollo, p. 49)
The antecedent facts of this case as recounted by the
trial court are as follows:

On April 27, 1985 Pierre Pangan a minor was investigated

by Pat. Felino Noguerra for drug dependency and for an
alleged crime of robbery. In the course of the
investigation, the policemen discovered that Pierre
Pangan was capable of committing crime against
property, only if under the influence of drug (sic). As
Pierre Pangan is a minor, the police investigators sought
the presence of his parents. Leopoldo Pangan, father of
the minor was invited to the police headquarters and was
informed about the problem of his son. Mr. Pangan asked
the police investigators if something could be done to
determine the source of the marijuana which has not only
socially affected his son, but other minors in the
community. Previous to the case of Pierre Pangan was the
case of Francisco Manalo, who was likewise investigated
by operatives of the Tiaong, Quezon Police Department
and for which a case for violation of the Dangerous Drug
Act was filed against him, covered by Criminal Case No.
85-516 before Branch 60 of the Regional Trial Court of
Lucena City. Aside from said case, accused Francisco
Manalo was likewise facing other charges such as
concealment of deadly weapon and other crimes against
property. Pat. Felino Noguerra went to the Tiaong
Municipal Jail, and sought the help of Francisco Manalo
and told him the social and pernicious effect of prohibited
drugs like marijuana being peddled to minors of Tiaong,
Quezon. Manalo although a detention prisoner was
touched by the appeal made to him by the policeman and
agreed to help in the identification of the source of the
marijuana. In return he asked the policeman to help him
in some cases pending against him. He did not negotiate
his case for violating the dangerous drug act, as he has
entered a plea of guilty to the charged (sic) before the
sala of Judge Eriberto Rosario.
With the consent of Francisco Manalo, Pfc. Sarmiento,
Chief of the Investigation Division gave him four (4)
marked P5.00 bills to buy marijuana from sources known
to him. The serial numbers of the money was entered in

the police blotter. The instruction was (sic) for Manalo to

bring back the prohibited drug purchased by him to the
police headquarters. Few minutes there after (sic),
Manalo returned with two (2) foils of dried marijuana
which lie allegedly bought from the accused Gloria Umali.
Thereafter, he was asked by the police investigators to
give a statement on the manner and circumstances of
how he was able to purchase two (2) marijuana foils from
accused Gloria Umali. With the affidavit of Francisco
Manalo, supported by the two (2) foils of marijuana. the
Chief of the Investigation Division petitioned the Court for
the issuance of a search warrant as a justification for
them to search the house of Gloria Umali located at
Rector (sic) Street. Poblacion, Tiaong, Quezon. After
securing the same, the police operatives, went to the
house of Gloria Umali and served the search warrant on
her. Confiscated from the person of Gloria Umali were the
four P5.00 bills with serial numbers BA26943, DT388005,
CC582000 and EW69873, respectively as reflected in the
police blotter. Likewise, present in the four (4) P5.00 bills
were the letters T which were placed by the police
investigators to further identify the marked four (4)
P5.00 bills. The searched (sic) in the house was made in
the presence of Brgy. Capt. Punzalan. The search resulted
in the confiscation of a can of milo, containing sixteen
(16) foils of dried marijuana leaves which were placed in
a tupperware and kept in the kitchen where rice was
being stored. The return of the search warrant reads as
follows:
DATE: 22 April 1985
WHAT: "RAID"
WHERE: Residence of Dr. Emiliano Umali
Poblacion, Tiaong, Quezon
WHO: MBRS. OF TIAONG INP
TIME STARTED/ARRIVED AT SAID PLACE:
221410H Apr '85
SERVED TO: MRS. GLORIA UMALI
MR. EMILIANO UMALI

PERSON APPREHENDED/PROPERTY SEIZED/RECOVERED

Mrs. Gloria Umali 16 Aluminum Foils of
Mr. Emiliano Umali Suspected Marijuana leaves
TIME/DATE LEFT SAID PLACE: 221450H Apr '85
WITNESSES (sic) BY:
1. (Sgd) Reynaldo S. Pasumbal
2. (Sgd) Luisabel P. Punzalan
3. (Sgd) Arnulfo C. Veneracion
4. (Sgd) Isidro C. Capino
Samples of the marijuana leaves confiscated were
submitted to the PC Came Laboratory for examination.
Capt. Rosalinda Royales of the PC crime Laboratory took
the witness stand, testified and identified the marijuana
submitted to her and in a written report which was
marked as Exhibit "G" she gave the following findings:
Qualitative examination conducted on the specimen
mentioned above gave POSITIVE result to the tests fur
marijuana.
In Criminal Case No. 85-516, Francisco Manalo was
charged of having in his possession Indian Hemp on April
5, 1985, in violation of Section 8, Article 11 of Republic
Act 6425 as amended, otherwise as the Dangerous Drugs
Act of 1972. The Court in rendering against him disposed
the case as follows:
In view of the foregoing, the Court hereby finds the
accused Guilty beyond reasonable doubt of the crime of
illegal possession of "Indian Hemp" penalized under Sec.
8 of Article 6425 (sic); as amended otherwise known as
the Dangerous Drugs Act of 1972 and the Court hereby
sentences him to suffer an imprisonment of two (2) years
and four (4) months of prision correccional to six (6)
years and one (1) day of Prision Mayor and to pay a fine
of Six Thousand Pesos (P6,000.00). Let the period of
detention of the accused be credited to his sentence.
Accused never disputed the claim of Francisco Manalo
that the marijuana found in his possession on April 5,
1985 in the municipality of Tiaong, Quezon was sold to
him by the accused Gloria Umali. The defense also did

not dispute the claim of the prosecution that in the

investigation of Pierre Pangan, the police investigator
came to know that Gloria Umali was the source of the
marijuana leaves which he used and smoked resulting in
his present drug dependency. (Rollo, pp. 22-27)
The appellant vehemently denied the findings of the
lower court and insisted that said court committed
reversible errors in convicting her. She alleged that
witness Francisco Manalo is not reputed to be trustworthy
and reliable and that his words should not be taken on its
face value. Furthermore, he stressed that said witness
has several charges in court and because of his desire to
have some of his cases dismissed, he was likely to tell
falsehood.
However, the plaintiff-appellee through the Solicitor
General said that even if Francisco Manalo was then
facing several criminal charges when he testified, such
fact did not in any way disqualify him as a witness. "His
testimony is not only reasonable and probable but more
so, it was also corroborated in its material respect by the
other prosecution witnesses, especially the police
officers." (Rollo, pp. 83-84)
The appellant also claimed that the marked money as
well as the marijuana were confiscated for no other
purpose than using them as evidence against the accused
in the proceeding for violation of Dangerous Drugs Act
and therefore the search warrant issued is illegal from the
very beginning. She stressed that there can be no other
plausible explanation other than that she was a victim of
a frame-up.
In relation to this contention, the Solicitor General noted
that it is not true that the evidences submitted by the
prosecution were obtained in violation of her
constitutional right against illegal search and seizure.
Furthermore, the appellant contended that the essential
elements of the crime of which she was charged were
never established by clear and convincing evidence to
warrant the findings of the court a quo. She also stressed

that the court's verdict of conviction is merely based on

surmises and conjectures.
However, the Solicitor General noted that the positive and
categorical testimonies of the prosecution witnesses who
had personal knowledge of the happening together with
the physical evidence submitted clearly prove the guilt
beyond reasonable doubt of accused-appellant for
violation of the Dangerous Drugs Act.
Time and again, it is stressed that this Court is enjoined
from casually modifying or rejecting the trial court's
factual findings. Such factual findings, particularly the
trial judge's assessment of the credibility of the testimony
of the witnesses are accorded with great respect on
appeal for the trial judge enjoys the advantage of directly
and at first hand observing and examining the testimonial
and other proofs as they are presented at the trial and is
therefore better situated to form accurate impressions
and conclusions on the basis thereof (See People v.
Bravo, G.R. No. 68422, 29 December, 1989,180 SCRA
694,699). The findings of the trial court are entitled to
great weight, and should not be disturbed on appeal
unless it is shown that the trial court had overlooked
certain facts of weight and importance, it being
acknowledged that the court below, having seen and
heard the witnesses during the trial, is in a better
position to evaluate their testimonies (People v. Alverez y
Soriano, G.R. No. 70831, 29 July 1988, 163 SCRA 745,
249; People v. Dorado, G.R. No. L-23464, October 31,
1969, 30 SCRA 53; People v. Espejo, G.R. No. L-27708,
December 19, 1970, 36 SCRA 400). Hence, in the
absence of any showing that the trial court had
overlooked certain substantial facts, said factual findings
are entitled to great weight, and indeed are binding even
on this Court.
Rule 130, Section 20 of the Revised Rules of Court
provides that:

Except as provided in the next succeeding section, all

persons who can perceive, and perceiving can make
known their perception to others may be witnesses.
Religious or political belief, interest in the outcome of the
case, or conviction of a crime unless otherwise provided
by law, shall not be a ground for disqualification.
The phrase "conviction of a crime unless otherwise
provided by law" takes into account Article 821 of the
Civil Code which states that persons 91 convicted of
falsification of a document, perjury or false testimony"
are disqualified from being witnesses to a will." (Paras,
RULES OF COURT ANNOTATED, Vol. IV First Ed., p. 44)
Since the witness Francisco Manalo is not convicted of
any of the above-mentioned crimes to disqualify him as a
witness and this case does not involve the probate of a
will, We rule that the fact that said witness is facing
several criminal charges when he testified did not in any
way disqualify him as a witness.
The testimony of a witness should be given full faith and
credit, in the absence of evidence that he was actuated
by improper motive (People v. Melgar, G.R. No. 75268,29
January 1988, 157 SCRA 718). Hence, in the absence of
any evidence that witness Francisco Manalo was actuated
by improper motive, his testimony must be accorded full
credence.
Appellant's contention that she was a victim of a "frameup" is devoid of merit.1wphi1 "Courts must be vigilant.
A handy defense in such cases is that it is a frame-up and
that the police attempted to extort from the accused.
Extreme caution must be exercised in appreciating such
defense. It is just as easy to concoct as a frame-up. At all
times the police, the prosecution and the Courts must be
always on guard against these hazards in the
administration of criminal justice." (People v. Rojo, G.R.
No. 82737, 5 July 1989, 175 SCRA 119)
The appellant's allegation that the search warrant is
illegal cannot also be given any merit. "Where marked
peso bills were seized by the police as a result of the

search made on the appellant, the admissibility of these

marked peso bills hinges on the legality of the arrest and
search on the person of the appellant" (People v. Paco,
G.R. No. 76893, 27 February 1989, 170 SCRA 681).
Since the search is predicated on a valid search warrant,
absent any showing that such was procured maliciously
the things seized are admissible in evidence.
Appellant argues that the lower court's verdict is based
on surmises and conjectures, hence the essential
elements of the crime were never established by clear
and convincing evidence.
Conviction cannot be predicated on a presumption or
speculation. A conviction for a criminal offense must be
based on clear and positive evidence and not on mere
presumptions (Gaerlan v. Court of Appeals, G.R. No.
57876, 6 November 1989, 179 SCRA 20). The
prosecution's evidence consisted of the testimony of
witness Manalo and the law enforcers as well as the
physical evidence consisting of the seized marked peso
bills, the two (2) foils of marijuana purchased and the
can containing sixteen (16) aluminum foils of dried
marijuana.
Credence is accorded to the prosecution's evidence more
so as it consisted mainly of testimonies of policemen. Law
enforcers are presumed to have regularly performed their
duty in the absence of proof to the contrary (People v.
Tejada, G.R. No. 81520, 21 February 1989, 170 SCRA
497). Hence, in the absence of proof to the contrary, full
credence should be accorded to the prosecution's
evidence. The evidence on record sufficiently established
that Umali gave two (2) foils of marijuana to witness
Manalo for which she was given and received four (4)
marked five peso (P5.00) bills, and fully supports
conviction for drug pushing in violation of Section 4
Article II of the Dangerous Drugs Act.
Thus, the Court has no option but to declare that the trial
court did not err in finding, on the basis of the evidence

on record, that the accused-appellant Gloria Umali

violated Section 4, Article II of the Dangerous Drugs Act.
Pursuant to recent jurisprudence and law, the case is
covered by Section 4 of Republic Act No. 6425 as
amended by Presidential Decree No. 1675, effective
February 17, 1980, which raised the penalty for selling
prohibited drugs from life imprisonment to death and a
fine ranging from twenty to thirty thousand pesos (People
v. Adriano, G.R. No. 65349, October 31, 1984, 133 SCRA
132) Thus, the trial court correctly imposed the penalty
of life imprisonment but failed to impose a fine.
ACCORDINGLY, the appealed decision is AFFIRMED with
the modification that a fine of twenty thousand pesos
(P20,000.00) be imposed, as it is hereby imposed, on the
accused-appellant.
SO ORDERED.
Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.