Py eng chong vs herrera
judgment debtors in favor of the mother of Eduardo
Facts:
The present proceedings stemmed from the writ of
execution issued pursuant to the judgment of the
Court of First Instance of Manila in Civil Case No.
65733, 1 dated June 6, 1967, wherein the
defendants-spouses Eduardo Uy Chiat and Cecilia G.
Uy Chiat were ordered to pay, "jointly and
severally", to petitioner Py Eng Chong the sum of
P23,796.00, with interest at the rate of 12% per
annum, plus 10% thereof as attorney's fees, and the
costs of suit. Pursuant to said judgment, petitioner
secured a writ of execution dated September 28,
1967, but it was returned unsatisfied by the
Provincial Sheriff of Negros Occidental. On
December 9, 1967, upon motion of the petitioner,
the trial court issued a First Alias Writ of Execution
directing the Sheriff of the City of Manila to levy on
the goods and chattels of Eduardo Uy Chiat and
Cecilia G. Uy Chiat, jointly and severally, especially
their participation in the general partnership of
"Julia So De Chiat and Sons", but this was likewise
returned unsatisfied.
Upon motion of the petitioner, on May 10, 1969, the
trial court issued a Second Alias Writ of Execution
directing the Sheriff of Negros Occidental to levy on
the properties of Eduardo Uy Chiat and Cecilia G. Uy
Chiat, jointly and severally, especially their
participation in the general partnership of the
respondent Julia So De Chiat & Sons. On June 23,
1969, the Provincial Sheriff of Negros Occidental
levied upon the rights, interests and participation of
Eduardo Uy Chiat and Cecilia G. Uy Chiat over the
twelve (12) parcels of land registered in the name of
respondent general partnership Julia So De Chiat &
Sons, which parcels of land are covered by Transfer
Certificates. On July 22, 1969, respondent
partnership Julia So De Chiat & Sons filed an Urgent
Motion to Lift Levy on Execution alleging, inter alia,
that the properties levied upon by the Sheriff belong
exclusively to said respondent and that judgment
debtors Eduardo Uy Chiat and Cecilia G. Uy Chiat
have ceased to be members of the partnership,
having sold all their rights and participation therein
to Julia So De Chiat, mother of judgment debtor
Eduardo Uy Chiat.
On July 29, 1969, petitioner filed his opposition to
said urgent motion, alleging, among others, that the
deed of sale dated June 25, 1966 adverted to in the
urgent motion and allegedly executed by the
Uy Chiat, Julia So De Chiat, is a simulated sale "which
the court has considered as such, and, therefore, is
not a legal obstacle to the continuance of the levy";
and that, since Julia So De Chiat & Sons is merely a
third-party claimant and is not one of the parties in
the case, said respondent cannot legally intervene in
the action, in consonance with the doctrine laid down
in Queblar v. Garduo. 2
On August 20, 1969, ****respondent partnership
filed a motion and manifestation stating that since
the judgment is only a money claim and the debtor,
Eduardo Uy Chiat, died "before final judgment has
been rendered" in the case, the court had no
jurisdiction to issue the writ of execution against
said deceased defendant. This motion was opposed
by petitioner who invited the attention of
respondent Judge to the fact that the judgment in
the case had long become final and executory
before Eduardo Uy Chiat died on March 30, 1968,
and that the judgment debt which is sought to be
enforced by the Second Alias Writ of Execution can
still be executed against the successors-in-interest
of Eduardo Uy Chiat.
On September 1, 1969, respondent Judge, after
hearing, issued an Order granting the motion to lift
the levy on execution filed by the respondent
partnership by ordering the recall of the Second Alias
Writ of Execution, stating that "Eduardo Uy Chiat
died on March 30, 1968, hence, a writ of execution
against him can no longer be enforced.
Issue:
Held:
The respondent court was correct in recalling the
Second Alias Writ of Execution. Defendant Eduardo
Uy Chiat having died on March 30, 1968, prior to the
levy which was made by the Provincial Sheriff of
Negros Occidental on June 23, 1969, the judgment in
favor of petitioner, being one for a sum of money,
may no longer be enforced by means of the said writ
of execution, but must be filed in the proper estate
proceedings." This is in consonance with the rule laid
down in Section 5 of Rule 86 of the Rules of Court, as
follows:
SEC. 5. Claims which must be filed under the
notice. If not filed, barred; exceptions. All claims
for money against the decedent, arising from
contract, express or implied, whether the same be
due, not due, or contingent, all claims for funeral
expenses and expenses for the last sickness of the
decedent, and judgment for money against the
decedent, must be filed within the time limited in the
notice; otherwise they are barred forever, except
that they may be set forth as counterclaims in any
action that the executor or administrator may bring
against the claimants. ... .(Emphasis supplied. See
also Agnes v. Lemas, 5 SCRA 959 where the court
held that judgments for money are abated by the
debtor's death.)
The above-quoted provision is mandatory. This
requirement is for the purpose of protecting the
estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling
him to examine each claim and to determine
whether it is a proper one which should be allowed.
5 The plain and obvious design of the rule is the
speedy settlement of the affairs of the deceased and
the early delivery of the property to the distributees,
legatees, or heirs. "The law strictly requires the
prompt presentation and disposition of claims
against the decedent's estate in order to settle the
affairs of the estate as soon as possible, pay off its
debts and distribute the residue." 6
Had the levy been made before the death of the
judgment debtor, the sale on execution could have
been carried to completion in accordance with
Section 7 (c) of Rule 39 which provides that in case
the judgment debtor dies after execution is actually
levied upon any of his property, the same may be
sold for the satisfaction of the judgment. However,
as observed by respondent court, such is not the
case here.///
Petitioner, however, contends that he could not
present his claim in the proper estate proceedings
because no such proceedings for the settlement of
the estate of the deceased Eduardo Uy Chiat have
been instituted. The infirmity of this argument is
evident from the fact that the Rules of Court amply
provides remedy for petitioner. He may initiate
proceedings under Section 1 of Rule 76 of the Rules
of Court 7 if Eduardo Uy Chiat died testate, or under
Section 6 (b) of Rule 78 8 if he died intestate.
In Sikat v. Vda. De Villanueva, 9 this court stated that
if a creditor, having knowledge, of the death of his
debtor and the fact that no administrator has been
appointed, permits more than three (3) years to
elapse without asking for the appointment of an
administrator or instituting the intestate proceedings
in the competent court for the settlement of the
latter's estate, he is guilty of laches and his claim
prescribes. 10 "To hold otherwise would be to permit
a creditor having knowledge of the debtor's death to
keep the latter's estate in suspense indefinitely, by
not instituting either estate or intestate proceedings
in order to present his claim, to the prejudice of the
heirs and legatees." 11
With respect to the claim of petitioner that the
respondent court arbitrarily amended or modified a
final and executory judgment, We note that the
statement in the order Of September 1, 1969 that the
judgment "is really a judgment against the conjugal
partnership ... " is merely an expression of opinion
which cannot in any way amend or modify the final
judgment in Civil Case No. 65733. It cannot be
construed otherwise, as it is well-settled that a final
judgment or order can no longer be altered or
amended, and the court loses jurisdiction over it,
save to order its execution. 12
Finally, on petitioner's contention that the private
respondent has not availed of the remedies provided
for in Section 17, Rule 39 of the Revised Rules of
Court, it must be noted that the aforecited rule does
not require that the title of ownership of the claimant
be produced, an affidavit of his title thereto being all
that is necessary to be presented with his claim.
Respondent's motion was under oath, supported by
two public instruments the Deed of Sale of June 25,
1966 executed by Eduardo S. Uy Chiat as vendor, and
Julio So de Chiat & Sons as vendee, duly
acknowledged before Notary Public Raymundo M.
Lozada, Jr., and the Amended Articles of Partnership
of Julia So de Chiat & Sons, dated June 25, 1966
stating the factual basis of private respondent's claim
of title over the real properties that were being levied
upon. Such requirement was undoubtedly
substantially complied with by the submission of said
pleading with the attached documents. In any event,
as stated previously, the recall of the writ of
execution was based on the fact of death of the
judgment debtor before the actual levy was made.
Under such circumstances, the judgment cannot be
executed, the remedy being, as stated in the
foregoing paragraphs, for the judgment creditor to
resort to the intestate or testate proceedings for the
settlement of the estate of the deceased debtor.

EVANGELISTA VS PROVEEDORA
FACTS:
On June 2, 1970 Manuel Abad Santos, the judgment
debtor, died in the City of Angeles. Subsequently, or
on September 30, 1970, the respondent Court issued
a writ of execution, pursuant to which respondent
Provincial Sheriff levied on a parcel of land and on
the house situated thereon, both owned by the
deceased Manuel Abad Santos and covered by
Transfer Certificate of Title No. 22937-M of the land
records of the City of Angeles. The auction sale was
scheduled for November 23, 1970.
In the meantime an intestate proceeding for the
settlement of the estate of Manuel Abad Santos was
filed in the Court of First Instance of Pampanga,
Branch n (Angeles City), docketed as Special
Proceeding No. A-40. On November 23, 1970 the
petitioner herein, Hollanda A. S. Evangelista, was
appointed special administratrix of the intestate.
On November 11, 1970, even prior to her
appointment, having been notified of the writ of
execution and the scheduled auction sale of the
properties levied upon, the petitioner informed the
respondent Provincial Sheriff of the death of the
judgment debtor and demanded that he desist from
proceeding with the sale. This was followed by an
urgent motion in court that the writ of execution be
recalled, but the motion was denied and the sale was
carried out, wherein respondent La Proveedora, Inc.
was the highest bidder.
ISSUE:
HELD:
The provisions of the Rules of Court on the matter at
hand are clear. Section 7 of Rule 39 says:
"SEC. 7. Execution in case of death of party. Where
a party dies after the entry of the judgment or order,
execution thereon may issue, or one already issued
may be enforced in the following cases:chanrob1es
virtual 1aw library
x x x
(c) In case of the death of the judgment debtor
after execution is actually levied upon any of his
property, the same may be sold for the satisfaction
thereof, and the officer making the sale shall account
to the corresponding executor or administrator for
any surplus in his hands."cralaw virtua1aw library
Note that the property levied upon in case the
judgment debtor dies after the entry of judgment, as
in this case, may be sold for the satisfaction of the
judgment in case death occurs "after execution is
actually levied." On the other hand, Section 5 of Rule
86 provides that a judgment for money against the
decedent must be filed with the court in the
proceeding for the settlement of the estate. In other
words, the cut-off date is the date of actual levy of
execution. If the judgment debtor dies after such
levy, the property levied upon may be sold; if before,
the money judgment must be presented as a claim
against the estate, although of course the same
need no longer be proved, the judgment itself being
conclusive. But the judgment creditor Will share the
estate with other creditors, subject only to such
preferences as are provided by law.
Since in this case the death of the deceased Manuel
Abad Santos preceded the levy of execution on his
properties, the judgment against him should be
presented as a claim against his estate, and the sale
at auction carried out by the sheriff is null and void.
TORRES VS CA
FACTS:
Judge Manuel Torres, Jr. owns about 81% of the
capital stocks of Tormil Realty & Development
Corporation (TRDC). TRDC is a small family owned
corporation and other stockholders thereof include
Judge Torres nieces and nephews. However, even
though Judge Torres owns the majority of TRDC and
was also the president thereof, he is only entitled to
one vote among the 9-seat Board of Directors,
hence, his vote can be easily overridden by minority
stockholders. So in 1987, before the regular election
of TRDC officers, Judge Torres assigned one share
(qualifying share) each to 5 outsiders for the
purpose of qualifying them to be elected as directors
in the board and thereby strengthen Judge Torres
power over other family members.
However, the said assignment of shares were not
recorded by the corporate secretary, Ma. Christina
Carlos (niece) in the stock and transfer book of TRDC.
When the validity of said assignments were
questioned, Judge Torres ratiocinated that it is
impractical for him to order Carlos to make the
entries because Carlos is one of his opposition. So
what Judge Torres did was to make the entries
himself because he was keeping the stock and
transfer book. He further ratiocinated that he can do
what a mere secretary can do because in the first
place, he is the president.
Since the other family members were against the
inclusion of the five outsiders, they refused to take
part in the election. Judge Torres and his five
assignees then decided to conduct the election
among themselves considering that the 6 of them
constitute a quorum.
ISSUE:
HELD:
Petitioners contend that the decisions of the SEC and
the Court of Appeals are null and void for being
rendered without the necessary substitution of
parties (for the deceased petitioner Manuel A. Torres,
Jr.) as mandated by Sec. 17, Rule 3 of the Revised
Rules of Court, which provides as follows:
Sec. 17. Death of party. After a party dies and the
claim is not thereby extinguished, the court shall
order, upon proper notice, the legal representative of
the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within
such time as may be granted. If the legal
representative fails to appear within said time, the
court may order the opposing party to procure the
appointment of a legal representative of the
deceased within a time to be specified by the court,
and the representative shall immediately appear for
and on behalf of the interest of the deceased. The
court charges involved in procuring such appointment,
if defrayed by the opposing party, may be recovered
as costs. The heirs of the deceased may be allowed to
be substituted for the deceased, without requiring the
appointment of an executor or administrator and the
court may appoint guardian ad litem for the minor
heirs.
It has been held that when a party dies in an action
that survives, and no order is issued by the Court for
the appearance of the legal representative or of the
heirs of the deceased to be substituted for the
deceased, and as a matter of fact no such
substitution has ever been effected, the trial held by
the court without such legal representative or heirs,
and the judgment rendered after such trial, are null
and void because the court acquired no jurisdiction
over the persons of the legal representative or of
the heirs upon whom the trial and the judgment are
not binding. 16
As early as 8 April 1988, Judge Torres instituted
Special Proceedings No. M-1768 before the Regional
Trial Court of Makati for the ante-mortem probate of
his holographic will which he had executed on 31
October 1986. Testifying in the said proceedings,
Judge Torres confirmed his appointment of petitioner
Edgardo D. Pabalan as the sole executor of his will
and administrator of his estate. The proceedings,
however, were opposed by the same parties, herein
private respondents Antonio P. Torres, Jr., Ma. Luisa
T. Morales and Ma. Cristina T. Carlos, 17 who are
nephew and nieces of Judge Torres, being the
children of his late brother Antonio A. Torres.
It can readily be observed therefore that the parties
involved in the present controversy are virtually the
same parties fighting over the representation of the
late Judge Torres estate. It should be recalled that
the purpose behind the rule on substitution of
parties is the protection of the right of every party
to due process. It is to ensure that the deceased
party would continue to be properly represented in
the suit through the duly appointed legal
representative of his estate. In the present case, this
purpose has been substantially fulfilled (despite the
lack of formal substitution) in view of the peculiar
fact that both proceedings involve practically the
same parties. Both parties have been fiercely
fighting in the probate proceedings of Judge Torres
holographic will for appointment as legal
representative of his estate. Since both parties claim
interests over the estate, the rights of the estate
were expected to be fully protected in the
proceedings before the SEC en banc and the Court of
Appeals. In either case, whoever shall be appointed
legal representative of Judge Torres estate
(petitioner Pabalan or private respondents) would
no longer be a stranger to the present case, the said
parties having voluntarily submitted to the
jurisdiction of the SEC and the Court of Appeals and
having thoroughly participated in the proceedings.
The foregoing rationale finds support in the recent
case of Vda. de Salazar v. CA, 18 wherein the Court
expounded thus:
****The need for substitution of heirs is based on
the right to due process accruing to every party in
any proceeding. The rationale underlying this
requirement in case a party dies during the
pendency of proceedings of a nature not
extinguished by such death, is that . . . the exercise
of judicial power to hear and determine a cause
implicitly presupposes in the trial court, amongst
other essentials, jurisdiction over the persons of the
parties. That jurisdiction was inevitably impaired
upon the death of the protestee pending the
proceedings below such that unless and until a legal
representative is for him duly named and within the
jurisdiction of the trial court, no adjudication in the
cause could have been accorded any validity or
binding effect upon any party, in representation of
the deceased, without trenching upon the
fundamental right to a day in court which is the very
essence of the constitutionally enshrined guarantee
of due process.
We are not unaware of several cases where we have
ruled that a party having died in an action that
survives, the trial held by the court without
appearance of the deceaseds legal representative or
substitution of heirs and the judgment rendered after
such trial, are null and void because the court
acquired no jurisdiction over the persons of the legal
representatives or of the heirs upon whom the trial
and the judgment would be binding. This general rule
notwithstanding, in denying petitioners motion for
reconsideration, the Court of Appeals correctly ruled
that formal substitution of heirs is not necessary
when the heirs themselves voluntarily appeared,
participated in the case and presented evidence in
defense of deceased defendant. Attending the case
at bench, after all, are these particular
circumstances which negate petitioners belated
and seemingly ostensible claim of violation of her
rights to due process. We should not lose sight of
the principle underlying the general rule that formal
substitution of heirs must be effectuated for them
to be bound by a subsequent judgment. Such had
been the general rule established not because the
rule on substitution of heirs and that on
appointment of a legal representative are
jurisdictional requirements per se but because
non-compliance therewith results in the undeniable
violation of the right to due process of those who,
though not duly notified of the proceedings, are
substantially affected by the decision rendered
therein . . . .
It is appropriate to mention here that when Judge
Torres died on April 3, 1991, the SEC en banc had
already fully heard the parties and what remained
was the evaluation of the evidence and rendition of
the judgment.
Further, petitioners filed their motions to suspend
proceedings only after more than two (2) years from
the death of Judge Torres. Petitioners counsel was
even remiss in his duty under Sec. 16, Rule 3 of the
Revised Rules of Court. 19 Instead, it was private
respondents who informed the SEC of Judge Torres
death through a manifestation dated 24 April 1991.
For the SEC en banc to have suspended the
proceedings to await the appointment of the legal
representative by the estate was impractical and
would have caused undue delay in the proceedings
and a denial of justice. There is no telling when the
probate court will decide the issue, which may still be
appealed to the higher courts.
In any case, there has been no final disposition of the
properties of the late Judge Torres before the SEC.
On the contrary, the decision of the SEC en banc as
affirmed by the Court of Appeals served to protect
and preserve his estate. Consequently, the rule that
when a party dies, he should be substituted by his
legal representative to protect the interests of his
estate in observance of due process was not violated
in this case in view of its peculiar situation where the
estate was fully protected by the presence of the
parties who claim interests therein either as directors,
stockholders or heirs.
Finally, we agree with petitioners contention that
the principle of negotiorum gestio 20 does not apply
in the present case. Said principle explicitly covers
abandoned or neglected property or business.
VELASQUEZ VS GEORGE
FACTS:
The plaintiffs-appellants are the widow and
legitimate children of the late Benjamin B. George
whose estate is under intestate proceedings. The
case is docketed as Special Proceedings Nos. 18820
before the then Court of First Instance of Rizal at
Quezon City, Branch XVIII.
In their complaint, the plaintiffs-appellants alleged
that the five defendants- mortgagors are officers of
the Island Associates Inc. Andres Muoz, aside from
being the treasurer-director of said corporation, was
also appointed and qualified as administrator of the
estate of Benjamin George in the above special
proceedings. In life, the latter owned 64.8 percent or
636 shares out of the outstanding 980 shares of stock
in the corporation. Without the proper approval from
the probate court and without notice to the heirs and
their counsel, the defendants-mortgagors executed a
Deed of First Real Estate Mortgage in favor of the
defendant-mortgagee Erlinda Villanueva, covering
three parcels of land owned by Island Associates. In
said Deed, the defendants-mortgagors also expressly
waived their right to redeem the said parcels.
Subsequently, a power of attorney was executed by
the defendants-mortgagors in favor of Villanueva
whereby the latter was given the full power and
authority to cede, transfer, and convey the parcels of
land within the reglementary period provided by law
for redemption.
A certificate of sale was executed in favor of
Villanueva by the Provincial Sheriff of Bulacan after
she submitted the highest bids at the public auction.
This led to the execution of a Deed of Sale and
Affidavit of Consolidation of Ownership by virtue of
which Transfer Certificates of Titles Nos. T-16717 and
T-39162, covering the three parcels of land, were
cancelled and in lieu thereof, Transfer Certificates of
Titles Nos. T239675 and T-239674 were issued in
favor of Villanueva. The plaintiffs-appellants,
therefore, filed the complaint for the annulment of
the 1.) Deed of First Real Estate Mortgage; 2.)
Power of Attorney; 3.) Certificate of Sale; 4.)
Amended Certificate of Sale; 5.) Affidavit of
Consolidation of Ownership; and 6.) Transfer
Certificates of Title Nos. T-239674 and T-239675.
A motion to dismiss was filed by William George,
Robert George, and administrator Andres Muoz on
the ground that the trial court had no jurisdiction
over the case. The movants contended that the
subject matter of the complaint referred to the
corporate acts of the Board of Directors of Island
Associates, and, therefore, falls within the exclusive
jurisdiction of the Securities and Exchange
Commission. The trial court agreed with the movants
and dismissed the complaint. The
plaintiffs-appellants contend that the resolution of
the validity of a mortgage contract is within the
original and exclusive jurisdiction of civil courts, and
certainly not within the jurisdiction of the Securities
and Exchange Commission and that once jurisdiction
of the civil court whether in a civil or a criminal case,
has properly attached, the same cannot be ousted,
divested or removed. The appellants state that the
questioned composition of the board of directors, is
merely incidental to the determination of the main
issue and is insufficient cause for the trial court to
divest itself of its original and exclusive jurisdiction
that has already been acquired.
The defendants-appellees, on the other hand
maintain that since the complaint questions the
validity of a corporate contract which the appellants
contend to have been entered into as a fraudulent
and surreptitious scheme and devise to defraud them,
this issue places the entire case outside the
jurisdiction of the civil courts. According to them,
Presidential Decree No. 902-A gives the SEC exclusive
jurisdiction over such a controversy.
ISSUE:
HELD:
Villanueva further contends that the
plaintiffs-appellants have no capacity to file the
complaint because the general rule laid down in
Rule 87, Section 3 of the Rules of Court states that
only the administrator or executor of the estate may
bring actions of such nature as the one in the case at
bar. The only exception is when the executor or
administrator is unwilling or fails or refuses to act,
which exception according to the
mortgagee-appellee does not apply in the present
case.

We agree with the plaintiffs-appellants. What the
complaint sought to annul were documents of title
which vested ownership over the three parcels of
land in question to defendant-mortgagee Villanueva,
who is neither an officer, a stockholder nor a
director of the corporation, but a third party. Clearly,
the lower court had jurisdiction over the
controversy. The fact that the plaintiffs-appellants
subsequently questioned the legality of the
constitution of the board of directors of the
corporation did not divest the court of its
jurisdiction to take cognizance of the case. What
determines jurisdiction of the court are the
allegations in the complaint. If from the same, the
court has already acquired jurisdiction over the
subject-matter, jurisdiction is retained up to the end
of the litigation. (See Lat v. Phil. Long Distance Co.,
67 SCRA 425).
***Whether or not the mortgage contract, with an
unusual provision whereby the mortgagors waived
their right to redeem the mortgaged property, could
be executed without proper approval of the probate
court and without notice to the widow and
legitimate children of the deceased is a matter
clearly within the authority of a trial court to decide.
If in the course of trial, the court believes that the
validity of the composition of the board of directors
is absolutely necessary for resolution of the issues
before it, the remedy is, at most, to require that one
issue to be threshed out before the Securities and
Exchange Commission and to hold in abeyance, the
trial on the merits of the principal issues in the
meantime. Certainly, the solution is not for the
lower court to surrender its judicial questions to an
administrative agency for resolution.
We also find without merit the
defendant-mortgagee's contention that the proper
party to file the complaint is the administrator of the
estate of Benjamin George. ***The administrator,
Andres Muoz, is the same person charged by the
plaintiffs-appellants to have voted in the board of
directors without securing the proper authority
from the probate court to which he is accountable
as administrator. In Ramirez v. Baltazar (24 SCRA
918), we ruled that "since the ground for the
present action to annul the aforesaid foreclosure
proceedings is the fraud resulting from such
insidious machinations and collusion in which the
administrator has allegedly participated, it would be
far fetched to expect the said administrator himself
to file the action in behalf of the estate. And who
else but the heirs, who have an interest to assert
and to protect, would bring the action? Inevitably,
this case should fall under the exception, rather
than the general rule that pending proceedings for
the settlement of the estate, the heirs have no right
to commence an action arising out of the rights
belonging to the deceased." The case at bar falls
under such an exception.
RIOFERO VS CA
FACTS:
On May 13, 1995, Alfonso P. Orfinada, Jr. died
without a will in Angeles City leaving several personal
and real properties located in Angeles City, Dagupan
City and Kalookan City.[3] He also left a widow,
respondent Esperanza P. Orfinada, whom he married
on July 11, 1960 and with whom he had seven
children who are the herein respondents, namely:
Lourdes P. Orfinada, Alfonso Clyde P. Orfinada, Nancy
P. Orfinada-Happenden, Alfonso James P. Orfinada,
Christopher P. Orfinada, Alfonso Mike P. Orfinada
(deceased) and Angelo P. Orfinada.[4]
Apart from the respondents, the demise of the
decedent left in mourning his paramour and their
children. They are petitioner Teodora Riofero, who
became a part of his life when he entered into an
extra-marital relationship with her during the
subsistence of his marriage to Esperanza sometime in
1965, and co-petitioners Veronica[5], Alberto and
Rowena.[6]
On November 14, 1995, respondents Alfonso James
and Lourdes Orfinada discovered that on June 29,
1995, petitioner Teodora Rioferio and her children
executed an Extrajudicial Settlement of Estate of a
Deceased Person with Quitclaim involving the
properties of the estate of the decedent located in
Dagupan City and that accordingly, the Registry of
Deeds in Dagupan issued Certificates of Titles Nos.
63983, 63984 and 63985 in favor of petitioners
Teodora Rioferio, Veronica Orfinada-Evangelista,
Alberto Orfinada and Rowena Orfinada-Ungos.
Respondents also found out that petitioners were
able to obtain a loan of P700,000.00 from the Rural
Bank of Mangaldan Inc. by executing a Real Estate
Mortgage over the properties subject of the
extra-judicial settlement.[7]
On December 1, 1995, respondent Alfonso Clyde P.
Orfinada III filed a Petition for Letters of
Administration docketed as S.P. Case No. 5118 before
the Regional Trial Court of Angeles City, praying that
letters of administration encompassing the estate of
Alfonso P. Orfinada, Jr. be issued to him.[8]
On December 4, 1995, respondents filed a Complaint
for the Annulment/Rescission of Extra Judicial
Settlement of Estate of a Deceased Person with
Quitclaim, Real Estate Mortgage and Cancellation of
Transfer Certificate of Titles with Nos. 63983, 63985
and 63984 and Other Related Documents with
Damages against petitioners, the Rural Bank of
Mangaldan, Inc. and the Register of Deeds of
Dagupan City before the Regional Trial Court, Branch
42, Dagupan City.[9]
On February 5, 1996, petitioners filed their Answer to
the aforesaid complaint interposing the defense that
the property subject of the contested deed of
extra-judicial settlement pertained to the properties
originally belonging to the parents of Teodora
Riofero[10] and that the titles thereof were delivered
to her as an advance inheritance but the decedent
had managed to register them in his name.[11]
Petitioners also raised the affirmative defense that
respondents are not the real parties-in-interest but
rather the Estate of Alfonso O. Orfinada, Jr. in view of
the pendency of the administration proceedings.[12]
On April 29, 1996, petitioners filed a Motion to Set
Affirmative Defenses for Hearing[13] on the aforesaid
ground.
The lower court denied the motion in its Order[14]
dated June 27, 1996, on the ground that respondents,
as heirs, are the real parties-in-interest especially in
the absence of an administrator who is yet to be
appointed in S.P. Case No. 5118. Petitioners moved
for its reconsideration[15] but the motion was
likewise denied.[1
ISSUE:
HELD:
Pending the filing of administration proceedings, the
heirs without doubt have legal personality to bring
suit in behalf of the estate of the decedent in
accordance with the provision of Article 777 of the
New Civil Code that (t)he rights to succession are
transmitted from the moment of the death of the
decedent. The provision in turn is the foundation of
the principle that the property, rights and obligations
to the extent and value of the inheritance of a person
are transmitted through his death to another or
others by his will or by operation of law.[25]
Even if administration proceedings have already been
commenced, the heirs may still bring the suit if an
administrator has not yet been appointed. This is the
proper modality despite the total lack of advertence
to the heirs in the rules on party representation,
namely Section 3, Rule 3[26] and Section 2, Rule
87[27] of the Rules of Court. In fact, in the case of
Gochan v. Young,[28] this Court recognized the legal
standing of the heirs to represent the rights and
properties of the decedent under administration
pending the appointment of an administrator. Thus:
***The above-quoted rules,[29] while permitting an
executor or administrator to represent or to bring
suits on behalf of the deceased, do not prohibit the
heirs from representing the deceased. These rules
are easily applicable to cases in which an
administrator has already been appointed. But no
rule categorically addresses the situation in which
special proceedings for the settlement of an estate
have already been instituted, yet no administrator
has been appointed. In such instances, the heirs
cannot be expected to wait for the appointment of
an administrator; then wait further to see if the
administrator appointed would care enough to file a
suit to protect the rights and the interests of the
deceased; and in the meantime do nothing while
the rights and the properties of the decedent are
violated or dissipated.
***Even if there is an appointed administrator,
jurisprudence recognizes two exceptions, viz: (1) if
the executor or administrator is unwilling or refuses
to bring suit;[30] and (2) when the administrator is
alleged to have participated in the act complained
of[31] and he is made a party defendant.[32]
Evidently, the necessity for the heirs to seek judicial
relief to recover property of the estate is as
compelling when there is no appointed
administrator, if not more, as where there is an
appointed administrator but he is either disinclined
to bring suit or is one of the guilty parties himself.
All told, therefore, the rule that the heirs have no
legal standing to sue for the recovery of property of
the estate during the pendency of administration
proceedings has three exceptions, the third being
when there is no appointed administrator such as in
this case.
VALERA VS INSERTO
FACTS:
In the proceedings for the settlement of the intestate
estate of the decedent spouses, Rafael Valera and
Consolacion Sarrosa 1 in which Eumelia Cabado
and Pompiro Valera had been appointed
administrators 2 the heirs of a deceased daughter
of the spouses, Teresa Garin, filed a motion asking
that the Administratrix, Cabado, be declared in
contempt for her failure to render an accounting of
her administration. 3 Cabado replied that no
accounting could be submitted unless Jose Garin,
Teresa's husband and the movant heirs' father,
delivered to the administrator an 18-hectare
fishpond in Baras, Barotoc Nuevo, Iloilo, belonging to
the estate and she in turn moved for the return
thereof to the estate, 4 so that it might be
partitioned among the decedents' heirs. Jose Garin
opposed the plea for the fishpond's return to the
estate, asserting that the property was owned by his
children and this was why it had never been included
in any inventory of the estate.
The Court, presided over by Hon. Judge Midpantao
Adil, viewed the Garin Heirs' motion for contempt, as
well as Cabado's prayer for the fishpond's return to
the estate, as having given rise to a claim for the
recovery of an asset of the estate within the purview
of Section 6, Rule 87 of the Rules of Court. 5 It
accordingly set said incidents for hearing during
which the parties presentee evidence in
substantiation of their positions. 6 Thereafter, the
Court issued an Order dated September 17, 1980
commanding the Heirs of Teresa Garin "to reconvey
immediately the fishpond in question * * to the
intestate Estate of the Spouses. 7
The Order was predicated upon the Court's factual
findings mainly derived from the testimony of the
two administrators that:
1. the fishpond originally belonged to the
Government, and had been given in lease to Rafael
Valera in his lifetime;
2. Rafael Valera ostensibly sold all his leasehold
rights in the fishpond to his daughter, Teresa Garin;
but the sale was fictitious, having been resorted to
merely so that she might use the property to provide
for her children's support and education, and was
subject to the resolutory term that the fishpond
should revert to Rafael Valera upon completion of
the schooling of Teresa Garin's Children; and
3. with the income generated by the fishpond, the
property was eventually purchased from the
Government by the Heirs of Teresa Garin, collectively
named as such in the Original Certificate of Title
issued in their favor.
Upon these facts, Judge Adil ruled that an implied
trust had been created, obligating Teresa Garin's
heirs to restore the property to the Valera Spouses'
Estate, in accordance with Articles 1453 and 1455 of
the Civil Code providing as follows:
Article 1453. When property is conveyed to a person
in reliance upon his declared intentions to hold it for,
or transfer it to another or the grantor, there is an
implied trust in favor of the person for whose benefit
it is contemplated.
Article 1455. When any trustee, guardian or other
person holding a fiduciary relationship uses trust
funds for the purchase of property and causes a
conveyance to be made to him or to a third person, a
trust is established by operation of law in favor of the
person to whom the fund belongs.
The Court also held that the action for reconveyance
based on constructive trust had not yet prescribed,
Cabado's motion for the fishpond's reversion to the
estate having been filed well within ten (10) years
from June 30, 1980, the date on which Teresa Garin's
heirs allegedly acquired title over it. 8
There seems little doubt, however, that the Court's
pronouncement regarding the estate's title to the
fishpond was merely provisional in character, made
solely to determine whether or not the fishpond
should be included in the inventory of estate assets.
So it was evidently understood by the administrators
who have more than once asserted that "the probate
court has jurisdiction to determine the ownership of
the fishpond for purposes of inclusion in the
inventory of the properties. 9 So it was made clear by
the Probate Court itself which, at the outset, stated
that the hearing on the matter 10 was meant "merely
to determine whether or not the fishpond should be
included as part of the estate and whether or not the
person holding it should be made to deliver and/or
return ** (it) to the estate. 11 And so it was
emphasized in another Order, denying
reconsideration of the Order of September 17, 1980,
which states that:
**(i)t is never the intendment of this court to write a
finish to the issue of ownership of the fishpond in
dispute. The movants may pursue their claim of
ownership over the same in an ordinary civil action.
Meanwhile, however, it is the finding of this probate
court that the fishpond must be delivered to the
estate.
Clearly, there is no incompatibility between the
exercise of the power of this probate court under
Section 6 in relation to Section 7, both of Rule 87, and
the contention of the movants that the proper forum
to settle the issue of ownership should be in a court
of general jurisdiction. 12
Judge Adil afterwards granted the administrators'
motion for execution of the order pending appeal,
and directed the sheriff to enforce the direction for
the Garin Heirs to reconvey the fishpond to the
estate. 13 The corresponding writ was served on
Manuel Fabiana, the supposed encargado or
caretaker. Voicing no objection to the writ, and
declaring to the sheriff that he was a mere lessee, 14
Fabiana voluntarily relinquished possession of the
fishpond to the sheriff. The latter, in turn, delivered it
to the administrators. 15
Later however, Fabiana filed a
complaint-in-intervention with the Probate Court
seeking vindication of his right to the possession of
the fishpond, based on a contract of lease between
himself, as lessee, and Jose Garin, as lessor. 16 But
Judge Adil dismissed his complaint on the following
grounds, to wit:
(1) it was filed out of time because not only had
judgment been rendered, but execution as regards
transfer of possession had already taken place; and
(2) the lease contract had not been registered and
hence was not binding as against the estate. 17
ISSUE:
WON THE PROBATE COURT HAS JURISDICTION IN
DETERMINING TITLE OVER THE PROPERTY
HELD:
As regards the first issue, settled is the rule that
****a Court of First Instance (now Regional Trial
Court), acting as a Probate Court, exercises but
limited jurisdiction, 28 and thus has no power to
take cognizance of and determine the issue of title
to property claimed by a third person adversely to
the decedent, unless the claimant and all the Other
parties having legal interest in the property consent,
expressly or impliedly, to the submission of the
question to the Probate Court for adjudgment, or
the interests of third persons are not thereby
prejudiced, 29 the reason for the exception being
that the question of whether or not a particular
matter should be resolved by the Court in the
exercise of its general jurisdiction or of its limited
jurisdiction as a special court (e.g., probate, land
registration, etc., is in reality not a jurisdictional but
in essence of procedural one, involving a mode of
practice which may be waived. 30
The facts obtaining in this case, however, do not call
for the application of the exception to the rule. As
already earlier stressed, ***it was at all times clear
to the Court as well as to the parties that if
cognizance was being taken of the question of title
over the fishpond, it was not for the purpose of
settling the issue definitely and permanently, and
writing "finis" thereto, the question being explicitly
left for determination "in an ordinary civil action,"
but merely to determine whether it should or
should not be included in the inventory. 31 This
function of resolving whether or not property
should be included in the estate inventory is, to be
sure, one clearly within the Probate Court's
competence, although the Court's determination is
only provisional in character, not conclusive, and is
subject to the final decision in a separate action that
may be instituted by the parties. 32
The same norm governs the situation contemplated
in Section 6, Rule 87 of the Rules of Court, expressly
invoked by the Probate Court in justification of its
holding a hearing on the issue arising from the
parties' conflicting claims over the fishpond. 33 The
examination provided in the cited section is
intended merely to elicit evidence relevant to
property of the decedent from persons suspected of
having possession or knowledge thereof, or of
having concealed, embezzled, or conveyed away the
same. Of course, if the latter lays no claim to the
property and manifests willingness to tum it over to
the estate, no difficulty arises; the Probate Court
simply issues the appropriate direction for the
delivery of the property to the estate. On the other
hand, if the third person asserts a right to the
property contrary to the decedent's, the Probate
Court would have no authority to resolve the issue; a
separate action must be instituted by the
administrator to recover the property. 34
Parenthetically, in the light of the foregoing
principles, the Probate Court could have admitted
and taken cognizance of Fabiana's complaint in
intervention after obtaining the consent of all
interested parties to its assumption of jurisdiction
over the question of title to the fishpond, or
ascertaining the absence of objection thereto. But it
did not. It dismissed the complaint in intervention
instead. And all this is now water under the bridge.
MODESTO VS MODESTO
FACTS:
The facts in this case are not in dispute. It would
appear that Bruno Modesto died leaving several heirs,
among them, Cirilo Modesto and Jesus Modesto. In
the course of the intestate proceedings, Jesus
Modesto, acting as administrator of the estate of
Bruno, filed on November 7, 1953, in the Court of
First Instance of Tacloban, Leyte, a motion to cite and
examine under oath several persons, especially Cirilo
Modesto, regarding properties concealed embezzled
or fraudulently conveyed. On December 7, 1953 the
court issued an order appointing the Provincial
Sheriff of Leyte and the Chief of Police of Tanawan,
Leyte, as join commissioners, to verify and ascertain
persons who were holding, claiming or possessing
properties belonging to the estate of the deceased
Bruno Modesto. In said motion of Jesus Modesto he
listed said properties supposed to belong to the
estate, classified as follows: jewels under items 1, 2
and 3; furniture and other personal properties under
items 4-10; the 11th item is supposed to be cash
taken from a deposit in the Office of the Chief of
Police of Tanawan, Leyte, after taking funeral and
other expenses, in the amount of P1,700; and real
properties under items 12-26.
On January 12, 1954, the joint commissioners
submitted their report. On March 1, 1954 Jesus
Modesto, administrator, filed a motion in court to
require Cirilo Modesto to turn over to him as
administrator the personal properties belonging to
the intestate supposed to be in Cirilos possession.
Pursuant to said motion, the trial court, on March 8,
1954, issued an order requiring Cirilo Modesto to
deliver to the administrator personal properties listed
in the order, such as one narra aparador, 1 desk, 1
looking glass 5x3 ft., 1 trunk containing clothes, 1
bicycle, 11 pieces of steel matting and money said to
have been taken from a deposit made with the Chief
of Police in the amount of P1,700.00. Thereafter, on
April 27, 1954, a writ of execution was issued and on
May 10, 1955, a writ of execution was also issued by
the trial court. By virtue of said writ of execution the
Provincial Sheriff issued a Notice of Attachment
against the real property described in Certificate of
Title No. 30167 of the Register of Deeds of Leyte and
under Tax Assessment in the name of Cirilo Modesto.
On June 2, 1955 Cirilo Modesto filed an Urgent
Motion to Set Aside the Writ of Execution and for a
Writ of Preliminary Injunction, which motion was
opposed by Jesus. On June 4, 1955 the Provincial
Sheriff sold at public auction the real property
above-mentioned to the highest and only bidder
Jesus Modesto for P2,454.92 and on June 6, 1956,
the Provincial Sheriff issued a Sheriffs Certificate of
Final Sale in favor of Jesus. On June 29, 1956 Jesus
Modesto filed a Motion for a writ of Possession. On
July 11, 1956, in pursuance of the motion for a Writ
of Possession, the Provincial Sheriff issued a
notification to Cirilo placing Jesus in possession of the
real property sold to hem. Cirilo then filed the
present petition for certiorari to annul the
proceedings had before the Court of First Instance of
Leyte.
ISSUE:
WON THE DELIVERY OF PROPERTY BY CIRILO WAS
VALID (NO!)
HELD:
The trial court, in issuing its order of March 8, 1954
requiring Cirilo to deliver the properties listed
therein to Jesus as administrator, supposedly acted
under the provisions of Section 6, Rule 88 of the
Rules of Court which reads as follows:
"SEC. 6. Proceedings when property concealed,
embezzled, or fraudulently conveyed. If an
executor or administrator, heir, legatee, creditor, or
other individual interested in the estate of the
deceased, complains to the court having jurisdiction
of the estate that a person is suspected of having
concealed, embezzled, or conveyed away any of the
money, goods or chattels of the deceased, or that
such person has in his possession or has knowledge
of any deed, conveyance, bond, contract, or other
writing which contains evidence of or tends to
disclose the right, title, interest, or claim of the
deceased to real or personal estate, or the last will
and testament of the deceased, the court may cite
such suspected person to appear before it and may
examine him on oath on the matter of such
complaint; and of the person so cited refused to
appear, or to answer on such examination or such
interrogatories as are put to him, the court may
punish him for contempt, and may commit him to
prison until he submits to the order to the court.
The interrogatories put to any such person, and his
answers thereto, shall be in writing and shall be filed
in the clerks office."cralaw virtua1aw library
***In this the trial court committed error because
the purpose of the section above-reproduced, which
section was taken from Section 709 of Act 190, is
merely to elicit information or to secure evidence
from those persons suspected of having possessed
or having knowledge of the properties left by a
deceased person, or of having concealed, embezzled
or conveyed any of the said properties of the
deceased. In such proceedings the trial court has no
authority to decide whether or not said properties,
real or personal, belong to the estate or to the
persons examined. If, after such examination there
is good reason to believe that said person or
persons examined are keeping properties belonging
to the estate, then the next step to be taken should
be for the administrator to file an ordinary action in
court to recover the same (Alafriz v. Mina, 28 Phil.,
137; Cui v. Piccio, 91 Phil., 713; 48 Off. Gaz. [7] 2769;
Changco v. Madrelejos, 12 Phil., 543; Guanco v. PNB,
54 Phil., 244, cited in Morans Rules of Court, Vol. 2
1957 Edition, pp. 443-444.
The order requiring Cirilo to deliver the properties
and cash stated in the order, as belonging to the
estate, said that Cirilo was supposed to have
admitted having received or taken possession of
said properties after the death of Bruno. This
statement or findings of the lower court is not
supported by the evidence on record. As a matter of
fact, in the answer of Cirilo to the motion of the
administrator, he claimed that although he held the
aparador mentioned in Item 4 in the list of
properties, nevertheless, said furniture belonged to
their parents and so Bruno Modesto had only 1/6
share; that he, Cirilo, did not have the looking glass
mentioned in the motion because the same had
been taken by Jesus himself, neither did he have the
desk in question; that though he held a trunk, it was
empty and only contained clothes which were torn;
that the bicycle in question was in the possession of
Mauricio Modesto, the nephew of Bruno; that he,
Cirilo, did not keep the 11 pieces of steel matting;
neither did he ever receive the amount of P1,700.00
supposed to have been deposited in the office of the
Chief of Police. But, even if Cirilo had admitted
possession of the properties which he was required
by the court to deliver to Jesus, still it was necessary
for the ordinary courts, not the probate court, to
determine the title and ownership of said
properties.
ABSCBN VS OFFICE OF THE OMBUDSMAN
FACTS:
Before us is a Motion for Reconsideration filed by
petitioners Eugenio, Jr., Oscar and Augusto Almeda,
all surnamed Lopez, in their capacity as officers and
on behalf of petitioner ABS-CBN Broadcasting
Corporation (ABS-CBN), of our Decision in G.R. No.
133347, dismissing their petition for certiorari
because of the absence of grave abuse of discretion
in the Ombudsman Resolution which, in turn, found
no probable cause to indict respondents for the
following violations of the Revised Penal Code (RPC):
(1) Article 298 Execution of Deeds by Means of
Violence or Intimidation; (2) Article 315, paragraphs
1[b], 2[a], and 3[a] Estafa; (3) Article 308 Theft; (4)
Article 302 Robbery; (5) Article 312 Occupation of
Real Property or Usurpation of Real Rights in
Property; and (6) Article 318 Other Deceits.
The assailed Decision disposed of the case on two (2)
points: (1) the dropping of respondents Roberto S.
Benedicto and Salvador (Buddy) Tan as respondents
in this case due to their death, consistent with our
rulings in People v. Bayotas[1] and Benedicto v. Court
of Appeals;[2] and (2) our finding that the
Ombudsman did not commit grave abuse of
discretion in dismissing petitioners criminal complaint
against respondents.
Undaunted, petitioners ask for a reconsideration of
our Decision on the following grounds:
I.
WITH DUE RESPECT, THE EXECUTION AND VALIDITY
OF THE LETTER-AGREEMENT DATED 8 JUNE 1973 ARE
PLAINLY IRRELEVANT TO ASCERTAINING THE
CRIMINAL LIABILITY OF THE RESPONDENTS AND,
THEREFORE, THE ISSUE AS TO WHETHER SAID
AGREEMENT WAS RATIFIED OR NOT IS IMMATERIAL
IN THE PRESENT CASE.
II.
WITH DUE RESPECT, RESPONDENTS BENEDICTO AND
TAN SHOULD NOT BE DROPPED AS RESPONDENTS
SIMPLY BECAUSE THEY MET THEIR UNTIMELY DEMISE
DURING THE PENDENCY OF THE CASE.[3]
Before anything else, we note that petitioners filed a
Motion to Refer the Case to the Court en banc.[4]
Petitioners aver that the arguments contained in
their Motion for Reconsideration, such as: (1) the
irrelevance of the civil law concept of ratification in
determining whether a crime was committed; and (2)
the continuation of the criminal complaints against
respondents Benedicto and Tan who have both died,
to prosecute their possible civil liability therefor,
present novel questions of law warranting resolution
by the Court en banc.
In the main, petitioners argue that the Decision is
contrary to law because: (1) the ratification of the
June 8, 1973 letter-agreement is immaterial to the
determination of respondents criminal liability for the
aforestated felonies in the RPC; and (2) the very case
cited in our Decision, i.e. People v. Bayotas,[5] allows
for the continuation of a criminal case to prosecute
civil liability based on law and is independent of the
civil liability arising from the crime.
We disagree with petitioners.
ISSUE:
HELD:
Finally, we take note of the conflicting claim of
petitioners by filing a separate civil action to enforce
a claim against the estate of respondent Benedicto.
Petitioners do not even specifically deny this fact and
simply sidestep this issue which was squarely raised
in the Decision. The Rules of Court has separate
provisions for different claims against the estate of a
decedent under Section 5 of Rule 86 and Section 1 of
Rule 87:
RULE 86.
SECTION 5. Claims which must be filed under the
notice. If not filed, barred; exceptions. All claims for
money against the decedent, arising from contract,
express or implied, whether the same be due, not
due, or contingent, all claims for funeral expenses
and expenses for the last sickness of the decedent,
and judgment for money against the decedent, must
be filed within the time limited in the notice;
otherwise they are barred forever, except that they
may be set forth as counter claims in any action that
the executor or administrator may bring against the
claimants. Xxx Claims not yet due, or contingent, may
be approved at their present value.
RULE 87.
SECTION 1. Actions which may and which may not
be brought against executor or administrator. No
action upon a claim for the recovery of money or
debt or interest thereon shall be commenced
against the executor or administrator; but actions to
recover real or personal property, or an interest
therein, from the estate, or to enforce a lien thereon,
and actions to recover damages for an injury to
person or property, real or personal, may be
commenced against him.
****If, as insisted by petitioners, respondents
committed felonies in forcing them to sign the
letter-agreement, petitioners should have filed an
action against the executor or administrator of
Benedictos estate based on Section 1, Rule 87 of the
Rules of Court. But they did not. Instead they filed a
claim against the estate based on contract, the
unambiguous letter-agreement, under Section 5,
Rule 86 of the Rules of Court. The existence of this
claim against the estate of Benedicto as opposed to
the filing of an action against the executor or
administrator of Benedictos estate forecloses all
issues on the circumstances surrounding the
execution of this letter- agreement.

We are not oblivious of the fact that, in the milieu

prevailing during the Marcos years, incidences
involving intimidation of businessmen were not
uncommon. Neither are we totally unaware of the
reputed closeness of Benedicto to President Marcos.
However, given the foregoing options open to them
under the Rules of Court, petitioners choice of
remedies by filing their claim under Section 5, Rule
86 after Marcos had already been ousted and full
democratic space restored works against their
contention, challenging the validity of the
letter-agreement. Now, petitioners must live with
the consequences of their choice.