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Republic of the Philippines actual damages, moral damages and attorney's fees, respectively
SUPREME COURT and (b) the resolution of said appellate court dated May 30, 1984,
Manila denying the motion for reconsideration of its decision.

THIRD DIVISION 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
G.R. No. L-68053 May 7, 1990 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).
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO
ALVAREZ, petitioners,
vs. Aniceto Yanes was survived by his children, Rufino, Felipe and
THE HONORABLE INTERMEDIATE APELLATE COURT and Teodora. Herein private respondents, Estelita, Iluminado and
JESUS YANES, ESTELITA YANES, ANTONIO YANES, Jesus, are the children of Rufino who died in 1962 while the other
ROSARIO YANES, and ILUMINADO YANES, respondents. 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.
Francisco G. Banzon for petitioner.
Aniceto left his children Lots 773 and 823. Teodora cultivated only
Renecio R. Espiritu for private respondents.
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
FERNAN, C.J.: established that Rufino and his children left the province to settle
in other places as a result of the outbreak of World War II.
This is a petition for review on certiorari seeking the reversal of: According to Estelita, from the "Japanese time up to peace time",
(a) the decision of the Fourth Civil Cases Division of the they did not visit the parcels of land in question but "after
Intermediate Appellate Court dated August 31, 1983 in AC-G.R. liberation", when her brother went there to get their share of the
CV No. 56626 entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason sugar produced therein, he was informed that Fortunato
et al." affirming the decision dated July 8, 1974 of the Court of Santiago, Fuentebella (Puentevella) and Alvarez were in
First Instance of Negros Occidental insofar as it ordered the possession of Lot 773. 2
petitioners to pay jointly and severally the private respondents the
sum of P20,000.00 representing the actual value of Lots Nos. It is on record that on May 19, 1938, Fortunato D. Santiago was
773-A and 773-B of the cadastral survey of Murcia, Negros issued Transfer Certificate of Title No. RF 2694 (29797) covering
Occidental and reversing the subject decision insofar as it Lot 773-A with an area of 37,818 square meters. 3 TCT No. RF
awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as
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2694 describes Lot 773-A as a portion of Lot 773 of the cadastral During the pendency in court of said case or on November 13,
survey of Murcia and as originally registered under OCT No. 8804. 1961, Alvarez sold Lots 773-A, 773-B and another lot for
P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos. 30919
The bigger portion of Lot 773 with an area of 118,831 square and 30920 were issued to Siason, 13 who thereafter, declared the two
meters was also registered in the name of Fortunato D. Santiago lots in his name for assessment purposes. 14
on September 6, 1938 Under TCT No. RT-2695 (28192 ). 4 Said
transfer certificate of title also contains a certification to the effect that Meanwhile, on November 6, 1962, Jesus Yanes, in his own
Lot 773-B was originally registered under OCT No. 8804. behalf and in behalf of the other plaintiffs, and assisted by their
counsel, filed a manifestation in Civil Case No. 5022 stating that
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico the therein plaintiffs "renounce, forfeit and quitclaims (sic) any
B. Fuentebella, Jr. in consideration of the sum of claim, monetary or otherwise, against the defendant Arsenia Vda.
P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T- de Fuentebella in connection with the above-entitled case." 15
19291 and T-19292 were issued in Fuentebella's name. 6
On October 11, 1963, a decision was rendered by the Court of
After Fuentebella's death and during the settlement of his estate, First Instance of Negros Occidental in Civil Case No. 5022, the
the administratrix thereof (Arsenia R. Vda. de Fuentebella, his dispositive portion of which reads:
wife) filed in Special Proceedings No. 4373 in the Court of First
Instance of Negros Occidental, a motion requesting authority to WHEREFORE, judgment is rendered, ordering
sell Lots 773-A and 773-B. 7 By virtue of a court order granting said the defendant Rosendo Alvarez to reconvey to the
motion, 8 on March 24, 1958, Arsenia Vda. de Fuentebella sold said plaintiffs lots Nos. 773 and 823 of the Cadastral
lots for P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT Survey of Murcia, Negros Occidental, now
Nos. T-23165 and T-23166 covering Lots 773-A and 773-B were covered by Transfer Certificates of Title Nos. T-
respectively issued to Rosendo Alvarez. 10 23165 and T-23166 in the name of said
defendant, and thereafter to deliver the
Two years later or on May 26, 1960, Teodora Yanes and the possession of said lots to the plaintiffs. No special
children of her brother Rufino, namely, Estelita, Iluminado and pronouncement as to costs.
Jesus, filed in the Court of First Instance of Negros Occidental a
complaint against Fortunato Santiago, Arsenia Vda. de SO ORDERED. 16
Fuentebella, Alvarez and the Register of Deeds of Negros
Occidental for the "return" of the ownership and possession of
It will be noted that the above-mentioned manifestation of Jesus
Lots 773 and 823. They also prayed that an accounting of the
Yanes was not mentioned in the aforesaid decision.
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 However, execution of said decision proved unsuccessful with
delivered to them, and that defendants be ordered to pay plaintiffs respect to Lot 773. In his return of service dated October 20,
P500.00 as damages in the form of attorney's fees. 11 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,
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and that Lot 773 could not be delivered to the plaintiffs as Siason a new certificate of title in the name of the Yaneses "in accordance
was "not a party per writ of execution." 17 with the sheriffs return of service dated October 20, 1965;" Siason's
delivery of possession of Lot 773 to the Yaneses; and if, delivery
The execution of the decision in Civil Case No. 5022 having met thereof could not be effected, or, if the issuance of a new title could
a hindrance, herein private respondents (the Yaneses) filed on 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
July 31, 1965, in the Court of First Instance of Negros Occidental
render an accounting of the fruits of Lot 773 from November 13,
a petition for the issuance of a new certificate of title and for a
1961 until the filing of the complaint; and that the defendants jointly
declaration of nullity of TCT Nos. T-23165 and T-23166 issued to and severally pay the Yaneses moral damages of P20,000.00 and
Rosendo Alvarez. 18 Thereafter, the court required Rodolfo Siason to exemplary damages of P10,000.00 plus attorney's fees of P4,
produce the certificates of title covering Lots 773 and 823. 000.00. 25

Expectedly, Siason filed a manifestation stating that he purchased In his answer to the complaint, Siason alleged that the validity of
Lots 773-A, 773-B and 658, not Lots 773 and 823, "in good faith his titles to Lots 773-A and 773-B, having been passed upon by
and for a valuable consideration without any knowledge of any the court in its order of September 4, 1965, had become res
lien or encumbrances against said properties"; that the decision judicata and the Yaneses were estopped from questioning said
in the cadastral proceeding 19 could not be enforced against him as order. 26 On their part, the Alvarez stated in their answer that the
he was not a party thereto; and that the decision in Civil Case No. Yaneses' cause of action had been "barred by res judicata, statute of
5022 could neither be enforced against him not only because he was limitation and estoppel." 27
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 In its decision of July 8, 1974, the lower court found that Rodolfo
previous order requiring Siason to surrender the certificates of title Siason, who purchased the properties in question thru an agent
mentioned therein. 21 as he was then in Mexico pursuing further medical studies, was a
buyer in good faith for a valuable consideration. Although the
In 1968, the Yaneses filed an ex-parte motion for the issuance of Yaneses were negligent in their failure to place a notice of lis
an alias writ of execution in Civil Case No. 5022. Siason opposed pendens "before the Register of Deeds of Negros Occidental in
it. 22 In its order of September 28, 1968 in Civil Case No. 5022, the order to protect their rights over the property in question" in Civil
lower court, noting that the Yaneses had instituted another action for Case No. 5022, equity demanded that they recover the actual
the recovery of the land in question, ruled that at the judgment value of the land because the sale thereof executed between
therein could not be enforced against Siason as he was not a party Alvarez and Siason was without court approval. 28 The dispositive
in the case. 23 portion of the decision states:

The action filed by the Yaneses on February 21, 1968 was for IN VIEW OF THE FOREGOING
recovery of real property with damages. 24 Named defendants CONSIDERATION, judgment is hereby rendered
therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, in the following manner:
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
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A. The case against the defendant Dr. Rodolfo WHEREFORE, the decision appealed from is
Siason and the Register of Deeds are (sic) hereby affirmed insofar as it ordered defendants-
dismmissed, appellants to pay jointly and severally the
plaintiffs- appellees the sum of P20,000.00
B. The defendants, Laura, Flora and Raymundo, representing the actual value of Lots Nos. 773-A
all surnamed Alvarez being the legitimate children and 773-B of the cadastral survey of Murcia,
of the deceased Rosendo Alvarez are hereby Negros Occidental, and is reversed insofar as it
ordered to pay jointly and severally the plaintiffs awarded the sums of P2,000.00, P5,000.00 and
the sum of P20,000.00 representing the actual P2,000.00 as actual damages, moral damages
value of Lots Nos. 773-A and 773-B of Murcia and attorney's fees, respectively. No costs.
Cadastre, Negros Occidental; the sum of
P2,000.00 as actual damages suffered by the SO ORDERED. 32
plaintiff; the sum of P5,000.00 representing moral
damages and the sum of P2.000 as attorney's Finding no cogent reason to grant appellants motion for
fees, all with legal rate of interest from date of the reconsideration, said appellate court denied the same.
filing of this complaint up to final payment.
Hence, the instant petition. ln their memorandum petitioners
C. The cross-claim filed by the defendant Dr. raised the following issues:
Rodolfo Siason against the defendants, Laura,
Flora and Raymundo, all surnamed Alvarez is 1. Whethere or not the defense of prescription
hereby dismissed. and estoppel had been timely and properly
invoked and raised by the petitioners in the lower
D. Defendants, Laura, Flora and Raymundo, all court.
surnamed Alvarez are hereby ordered to pay the
costs of this suit. 2. Whether or not the cause and/or causes of
action of the private respondents, if ever there are
SO ORDERED. 29 any, as alleged in their complaint dated February
21, 1968 which has been docketed in the trial
The Alvarez appealed to the then Intermediate Appellate Court court as Civil Case No. 8474 supra, are forever
which in its decision of August 31, 1983 30 affirmed the lower court's barred by statute of limitation and/or prescription
decision "insofar as it ordered defendants-appellants to pay jointly of action and estoppel.
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 3. Whether or not the late Rosendo Alvarez, a
cadastral survey of Murcia, Negros Occidental, and is reversed defendant in Civil Case No. 5022, supra and
insofar as it awarded the sums of P2,000.00, P5,000.00 and father of the petitioners become a privy and/or
P2,000.00 as actual damages, moral damages and attorney's fees,
party to the waiver (Exhibit 4-defendant Siason) in
respectively." 31 The dispositive portion of said decision reads:
Civil Case No. 8474, supra where the private
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respondents had unqualifiedly and absolutely subsequent suits. For, if endless litigation were to be allowed,
waived, renounced and quitclaimed all their unscrupulous litigations will multiply in number to the detriment of the
alleged rights and interests, if ever there is any, on administration of justice. 36
Lots Nos. 773-A and 773-B of Murcia Cadastre as
appearing in their written manifestation dated There is no dispute that the rights of the Yaneses to the
November 6, 1962 (Exhibits "4" Siason) which properties in question have been finally adjudicated in Civil Case
had not been controverted or even impliedly or No. 5022. As found by the lower court, from the uncontroverted
indirectly denied by them. evidence presented, the Yaneses have been illegally deprived of
ownership and possession of the lots in question. 37 In fact, Civil
4. Whether or not the liability or liabilities of Case No. 8474 now under review, arose from the failure to execute
Rosendo Alvarez arising from the sale of Lots Civil Case No. 5022, as subject lots can no longer be reconveyed to
Nos. 773-A and 773-B of Murcia Cadastre to Dr. private respondents Yaneses, the same having been sold during the
Rodolfo Siason, if ever there is any, could be pendency of the case by the petitioners' father to Dr. Siason who did
legally passed or transmitted by operations (sic) not know about the controversy, there being no lis pendens
annotated on the titles. Hence, it was also settled beyond question
of law to the petitioners without violation of law
that Dr. Siason is a purchaser in good faith.
and due process . 33
Under the circumstances, the trial court did not annul the sale
The petition is devoid of merit.
executed by Alvarez in favor of Dr. Siason on November 11, 1961
but in fact sustained it. The trial court ordered the heirs of
As correctly ruled by the Court of Appeals, it is powerless and for Rosendo Alvarez who lost in Civil Case No. 5022 to pay the
that matter so is the Supreme Court, to review the decision in plaintiffs (private respondents herein) the amount of P20,000.00
Civil Case No. 5022 ordering Alvarez to reconvey the lots in representing the actual value of the subdivided lots in dispute. It
dispute to herein private respondents. Said decision had long did not order defendant Siason to pay said amount. 38
become final and executory and with the possible exception of Dr.
Siason, who was not a party to said case, the decision in Civil
As to the propriety of the present case, it has long been
Case No. 5022 is the law of the case between the parties thereto.
established that the sole remedy of the landowner whose
It ended when Alvarez or his heirs failed to appeal the decision
property has been wrongfully or erroneously registered in
against them. 34
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
Thus, it is axiomatic that when a right or fact has been judicially hands of an innocent purchaser for value, for damages. 39 "It is
tried and determined by a court of competent jurisdiction, so long one thing to protect an innocent third party; it is entirely a different
as it remains unreversed, it should be conclusive upon the parties matter and one devoid of justification if deceit would be rewarded by
and those in privity with them in law or estate. 35 As consistently allowing the perpetrator to enjoy the fruits of his nefarious decided As
ruled by this Court, every litigation must come to an end. Access to clearly revealed by the undeviating line of decisions coming from this
the court is guaranteed. But there must be a limit to it. Once a Court, such an undesirable eventuality is precisely sought to be
litigant's right has been adjudicated in a valid final judgment of a guarded against." 40
competent court, he should not be granted an unbridled license to
return for another try. The prevailing party should not be harassed by
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The issue on the right to the properties in litigation having been not liable beyond the value of the property
finally adjudicated in Civil Case No. 5022 in favor of private received from the decedent.
respondents, it cannot now be reopened in the instant case on
the pretext that the defenses of prescription and estoppel have As explained by this Court through Associate Justice J.B.L.
not been properly considered by the lower court. Petitioners could Reyes in the case of Estate of Hemady vs. Luzon Surety Co.,
have appealed in the former case but they did not. They have Inc. 41
therefore foreclosed their rights, if any, and they cannot now be
heard to complain in another case in order to defeat the The binding effect of contracts upon the heirs of
enforcement of a judgment which has longing become final and the deceased party is not altered by the provision
executory. of our Rules of Court that money debts of a
deceased must be liquidated and paid from his
Petitioners further contend that the liability arising from the sale of estate before the residue is distributed among
Lots No. 773-A and 773-B made by Rosendo Alvarez to Dr. said heirs (Rule 89). The reason is that whatever
Rodolfo Siason should be the sole liability of the late Rosendo payment is thus made from the state is ultimately
Alvarez or of his estate, after his death. a payment by the heirs or distributees, since the
amount of the paid claim in fact diminishes or
Such contention is untenable for it overlooks the doctrine reduces the shares that the heirs would have
obtaining in this jurisdiction on the general transmissibility of the been entitled to receive.
rights and obligations of the deceased to his legitimate children
and heirs. Thus, the pertinent provisions of the Civil Code state: Under our law, therefore. the general rule is that a
party's contractual rights and obligations are
Art. 774. Succession is a mode of acquisition by transmissible to the successors.
virtue of which the property, rights and obligations
to the extent of the value of the inheritance, of a The rule is a consequence of the progressive
person are transmitted through his death to "depersonalization" of patrimonial rights and
another or others either by his will or by operation duties that, as observed by Victorio Polacco has
of law. characterized the history of these institutions.
From the Roman concept of a relation from
Art. 776. The inheritance includes all the property, person to person, the obligation has evolved into
rights and obligations of a person which are not a relation from patrimony to patrimony with the
extinguished by his death. persons occupying only a representative position,
barring those rare cases where the obligation is
Art. 1311. Contract stake effect only between the strictly personal, i.e., is contracted intuitu
parties, their assigns and heirs except in case personae, in consideration of its performance by a
where the rights and obligations arising from the specific person and by no other.
contract are not transmissible by their nature, or
by stipulation or by provision of law. The heir is xxx xxx xxx
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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
Republic of the Philippines
their totality for the payment of the debts of the estate. 42
SUPREME COURT
Manila
It must, however, be made clear that petitioners are liable only to
the extent of the value of their inheritance. With this clarification
SECOND DIVISION
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 G.R. No. 77029 August 30, 1990
cogent reason to disturb the findings and conclusions of the Court
of Appeals. BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE,
ENRIQUITA and CLAUDIO, all surnamed,
WHEREFORE, subject to the clarification herein above stated, GEVERO, petitioners,
the assailed decision of the Court of Appeals is hereby vs.
AFFIRMED. Costs against petitioners. INTERMEDIATE APPELLATE COURT and DEL MONTE
DEVELOPMENT CORPORATION, respondents.
SO ORDERED.
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,
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containing an area of Seven Thousand Eight Hundred Seventy Eight others, was adjudicated to Ricardo Gevero who
(7,878) square meters more or less. was then alive at the time of extra-judicial
settlement and partition in 1966. Plaintiff (private
As found by the Appellate Court, the facts are as follows: respondent herein) filed an action with the CFI
(now RTC) of Misamis Oriental to quiet title and/or
The parcel of land under litigation is Lot No. 2476 annul the partition made by the heirs of Teodorica
of the Subdivision Plan Psd-37365 containing an Babangha insofar as the same prejudices the land
area of 20,119 square meters and situated at which it acquired a portion of lot 2476.
Gusa, Cagayan de Oro City. Said lot was acquired
by purchase from the late Luis Lancero on Plaintiff now seeks to quiet title and/or annul the
September 15, 1964 as per Deed of Absolute partition made by the heirs of Teodorica
Sale executed in favor of plaintiff and by virtue of Babangha insofar as the same prejudices the land
which Transfer Certificate of Title No. 4320 was which it acquired, a portion of Lot 2476. Plaintiff
issued to plaintiff (DELCOR for brevity). Luis proved that before purchasing Lot 2476-A it first
Lancero, in turn acquired the same parcel from investigated and checked the title of Luis Lancero
Ricardo Gevero on February 5, 1952 per deed of and found the same to be intact in the office of the
sale executed by Ricardo Gevero which was duly Register of Deeds of Cagayan de Oro City. The
annotated as entry No. 1128 at the back of same with the subdivision plan (Exh. "B"), the
Original Certificate of Title No. 7610 covering the corresponding technical description (Exh. "P") and
mother lot identified as Lot No. 2476 in the names the Deed of Sale executed by Ricardo Gevero
of Teodorica Babangha 1/2 share and her all of which were found to be unquestionable. By
children: Maria; Restituto, Elena, Ricardo, reason of all these, plaintiff claims to have bought
Eustaquio and Ursula, all surnamed surnamed the land in good faith and for value, occupying the
Gevero, 1/2 undivided share of the whole area land since the sale and taking over from Lancero's
containing 48,122 square meters. possession until May 1969, when the defendants
Abadas forcibly entered the property. (Rollo, p.
Teodorica Babangha died long before World War 23)
II and was survived by her six children
aforementioned. The heirs of Teodorica Babangha After trial the court a quo on July 18, 1977 rendered judgment,
on October 17,1966 executed an Extra-Judicial the dispositive portion of which reads as follows:
Settlement and Partition of the estate of Teodorica
Babangha, consisting of two lots, among them WHEREFORE, premises considered, judgment is
was lot 2476. By virtue of the extra-judicial hereby rendered declaring the plaintiff corporation
settlement and partition executed by the said as the true and absolute owner of that portion of
heirs of Teodorica Babangha, Lot 2476-A to Lot Lot No. 2476 of the Cagayan Cadastre,
2476-I, inclusive, under subdivision plan (LRC) particularly Lot No. 2476-D of the subdivision plan
Psd-80450 duly approved by the Land (LRC) Psd-80450, containing an area of SEVEN
Registration Commission, Lot 2476-D, among THOUSAND EIGHT HUNDRED SEVENTY
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EIGHT (7,878) square meters, more or less. The Hence, the present petition.
other portions of Lot No. 2476 are hereby
adjudicated as follows: This petition is devoid of merit.

Lot No. 2476 B to the heirs of Elena Gevero; Basically, the issues to be resolved in the instant case
are: 1) whether or not the deed of sale executed by
Lot No. 2476 C to the heirs of Restituto Ricardo Gevero to Luis Lancero is valid; 2) in the
Gevero; affirmative, whether or not the 1/2 share of interest of
Teodorica Babangha in one of the litigated lots, lot no.
Lot No. 2476 E to the defendant spouses 2476 under OCT No. 7610 is included in the deed of sale;
Enrique C. Torres and Francisca Aquino; and 3) whether or not the private respondents' action is
barred by laches.
Lot No. 2476 F to the defendant spouses
Eduard Rumohr and Emilia Merida Rumohf ; Petitioners maintain that the deed of sale is entirely
invalid citing alleged flaws thereto, such as that: 1) the signature
Lot Nos. 2476-H, 2476-I and 2476 G to of Ricardo was forged without his knowledge of such fact; 2)
defendant spouses Enrique Abada and Lilia Lancero had recognized the fatal defect of the 1952 deed of sale
Alvarez Abada. 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
No adjudication can be made with respect to Lot
Lot No. is 2470 instead of the correct number being Lot No. 2476;
No. 2476-A considering that the said lot is the
5) the deed of sale included the share of Eustaquio Gevero
subject of a civil case between the Heirs of Maria
without his authority; 6) T.C.T. No. 1183 of Lancero segregated
Gevero on one hand and the spouses Daniel
the area of 20,119 square meters from the bigger area (OCT No.
Borkingkito and Ursula Gevero on the other hand,
7616) without the consent of the other co-owners; 7) Lancero
which case is now pending appeal before the
caused the 1952 Subdivision survey without the consent of the
Court of Appeals. No pronouncement as to costs,
Geveros' to bring about the segregation of the 20,119 square
meters lot from the mother lot 2476 which brought about the
SO ORDERED. (Decision, Record on Appeal, p. issuance of his title T-1183 and to DELCOR's title T4320, both of
203; Rollo, pp. 21-22) which were illegally issued; and 8) the area sold as per document
is 20,649 square meters whereas the segregated area covered
From said decision, defendant heirs of Ricardo Gevero by TCT No. T-1183 of Lancero turned out to be 20,119 square
(petitioners herein) appealed to the IAC (now Court of Appeals) meters (Petitioners Memorandum, pp. 62-78).
which subsequently, on March 20, 1986, affirmed the decision
appealed from. As to petitioners' claim that the signature of Ricardo in the 1952
deed of sale in favor of Lancero was forged without Ricardo's
Petitioners, on March 31, 1986, filed a motion for reconsideration knowledge of such fact (Rollo, p. 71) it will be observed that the
(Rollo, p. 28) but was denied on April 21, 1986. deed of sale in question was executed with all the legal
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formalities of a public document. The 1952 deed was duly 71) involves a question of fact already raised and passed upon by
acknowledged by both parties before the notary public, yet both the trial and appellate courts. Said the Court of Appeals:
petitioners did not bother to rebut the legal presumption of the
regularity of the notarized document (Dy v. Sacay, 165 SCRA 473 Contrary to the allegations of the appellants, the
[1988]); Nuguid v. C.A., G.R. No. 77423, March 13, 1989). In fact trial court found that Luis Lancero had taken
it has long been settled that a public document executed and possession of the land upon proper investigation
attested through the intervention of the notary public is evidence by plaintiff the latter learned that it was indeed
of the facts in clear, unequivocal manner therein expressed. It has Luis Lancero who was the owner and possessor
the presumption of regularity and to contradict all these, evidence of Lot 2476 D. . . . (Decision, C.A., p. 6).
must be clear, convincing and more than merely preponderant
(Rebuleda v. I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot As a finding of fact, it is binding upon this Court (De Gola-Sison v.
be presumed, it must be proven (Siasat v. IAC, No. 67889, Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14 SCRA 282
October 10, 1985). Likewise, petitioners allegation of absence of [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A.,
consideration of the deed was not substantiated. Under Art. 1354 20 SCRA 54 [1967]; Ramirez Tel. Co. v. Bank of America, 33
of the Civil Code, consideration is presumed unless the contrary SCRA 737 [1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero
is proven. v. C.A., 142 SCRA 130 [1986]).

As to petitioners' contention that Lancero had recognized the fatal Suffice it to say that the other flaws claimed by the petitioners
defect of the 1952 deed when he signed the document in 1968 which allegedly invalidated the 1952 deed of sale have not been
entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic raised before the trial court nor before the appellate court. It is
rule of evidence that the right of a party cannot be prejudiced by settled jurisprudence that an issue which was neither averred in
an act, declaration, or omission of another (Sec. 28. Rule 130, the complaint nor raised during the trial in the court below cannot
Rules of Court). This particular rule is embodied in the be raised for the first time on appeal as it would be offensive to
maxim "res inter alios acta alteri nocere non debet." Under the basic rules of fair play, justice and due process. (Matienzo v.
Section 31, Rule 130, Rules of Court "where one derives title to Servidad, 107 SCRA 276 [1981]; Dela Santa v. C.A., 140 SCRA
property from another, the act, declaration, or omission of the 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v.
latter, while holding the title, in relation to the property is evidence IAC, 147 SCRA 434 [1987]; Dulos Realty and Development
against the former." It is however stressed that the admission of Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R. No.
the former owner of a property must have been made while he 78282, July 5, 1989).
was the owner thereof in order that such admission may be
binding upon the present owner (City of Manila v. del Rosario, 5
Petitioners aver that the 1/2 share of interest of Teodorica (mother
Phil. 227 [1905]; Medel v. Avecilla, 15 Phil. 465 [1910]). Hence,
of Ricardo) in Lot 2476 under OCT No. 7610 was not included in
Lanceros' declaration or acts of executing the 1968 document
the deed of sale as it was intended to limit solely to Ricardos'
have no binding effect on DELCOR, the ownership of the land
proportionate share out of the undivided 1/2 of the area pertaining
having passed to DELCOR in 1964.
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
Petitioners' claim that they remained in the property, Teodorica, because the Deed did not recite that she was
notwithstanding the alleged sale by Ricardo to Lancero (Rollo, p. deceased at the time it was executed (Rollo, pp. 67-68).
Page 11 of 64

The hereditary share in a decedents' estate is transmitted or An instrument notarized by a notary public as in the case at bar is
vested immediately from the moment of the death of the a public instrument (Eacnio v. Baens, 5 Phil. 742). The execution
"causante" or predecessor in interest (Civil Code of the of a public instrument is equivalent to the delivery of the thing
Philippines, Art. 777), and there is no legal bar to a successor (Art. 1498, 1st Par., Civil Code) and is deemed legal delivery.
(with requisite contracting capacity) disposing of his hereditary Hence, its execution was considered a sufficient delivery of the
share immediately after such death, even if the actual extent of property (Buencamino v. Viceo, 13 Phil. 97; [1906]; Puato v.
such share is not determined until the subsequent liquidation of Mendoza, 64 Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca, 108
the estate (De Borja v. Vda. de Borja, 46 SCRA 577 [1972]). Phil. 900 [1960]; Phil. Suburban Development Corp. v. Auditor
Gen., 63 SCRA 397 (1975]).
Teodorica Babangha died long before World War II, hence, the
rights to the succession were transmitted from the moment of her Besides, the property sold is a registered land. It is the act of
death. It is therefore incorrect to state that it was only in 1966, the registration that transfers the ownership of the land sold. (GSIS v.
date of extrajudicial partition, when Ricardo received his share in C.A., G.R. No. 42278, January 20, 1989). If the property is a
the lot as inheritance from his mother Teodorica. Thus, when registered land, the purchaser in good, faith has a right to rely on
Ricardo sold his share over lot 2476 that share which he inherited the certificate of title and is under no duty to go behind it to look
from Teodorica was also included unless expressly excluded in for flaws (Mallorca v. De Ocampo, No. L-26852, March 25, 1970;
the deed of sale. Unchuan v. C.A., 161 SCRA 710 [1988]; Nuguid v. CA-G.R. No.
77427, March 13, 1989).
Petitioners contend that Ricardo's share from Teodorica was
excluded in the sale considering that a paragraph of the Under the established principles of land registration law, the
aforementioned deed refers merely to the shares of Ricardo and person dealing with registered land may generally rely on the
Eustaquio (Rollo, p. 67-68). correctness of its certificate of title and the law will in no way
oblige him to go behind the certificate to determine the condition
It is well settled that laws and contracts shall be so construed as of the property (Tiongco v. de la Merced, L-2446, July 25, 1974;
to harmonize and give effect to the different provisions thereof Lopez vs. CA., G.R. No. 49739, January 20, 1989; Davao Grains
(Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 Inc. vs. IAC, 171 SCRA 612 [1989]). This notwithstanding,
[1970]), to ascertain the meaning of the provisions of a contract, DELCOR did more than that. It did not only rely on the certificate
its entirety must be taken into account (Ruiz v. Sheriff of Manila, of title. The Court of Appeals found that it had first investigated
34 SCRA 83 [1970]). The interpretation insisted upon by the and checked the title (T.C.T. No. T-1183) in the name of Luis
petitioners, by citing only one paragraph of the deed of sale, Lancero. It likewise inquired into the Subdivision Plan, the
would not only create contradictions but also, render meaningless corresponding technical description and the deed of sale
and set at naught the entire provisions thereof. executed by Ricardo Gevero in favor of Luis Lancero and found
everything in order. It even went to the premises and found Luis
Petitioners claim that DELCOR's action is barred by laches Lancero to be in possession of the land to the exclusion of any
considering that the petitioners have remained in the actual, other person. DELCOR had therefore acted in good faith in
open, uninterrupted and adverse possession thereof until at purchasing the land in question.
present (Rollo, p. 17).
Consequently, DELCOR's action is not barred by laches.
Page 12 of 64

The main issues having been disposed of, discussion of the other Republic of the Philippines
issues appear unnecessary. SUPREME COURT
Manila
PREMISES CONSIDERED, the instant petition is hereby
DISMISSED and the decision of the Court of Appeals is hereby FIRST DIVISION
AFFIRMED.

SO ORDERED.
G.R. No. 89783 February 19, 1992

MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN,


AUREA B. LOCSIN, MATILDE L. CORDERO, SALVADOR B.
LOCSIN and MANUEL V. DEL ROSARIO, petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN,
FLORENTINO JAUCIAN, MERCEDES JAUCIAN ARBOLEDA,
HEIRS OF JOSEFINA J. BORJA, HEIRS OF EDUARDO
JAUCIAN and HEIRS OF VICENTE JAUCIAN, respondents.

Aytona Law Office and Siquia Law Offices for petitioners.

Mabella, Sangil & Associates for private respondents.

NARVASA, C.J.:

Reversal of the decision of the Court of Appeals in CA-G.R. No.


CV-11186 affirming with modification the judgment of the
Regional Trial Court of Albay in favor of the plaintiffs in Civil Case
No. 7152 entitled "Jose Jaucian, et al. v. Mariano B. Locsin, et
al.," an action for recovery of real property with damages is
sought. in these proceedings initiated by petition for review
on certiorari in accordance with Rule 45 of the Rules of Court.

The petition was initially denied due course and dismissed by this
Court. It was however reinstated upon a second motion for
Page 13 of 64

reconsideration filed by the petitioners, and the respondents were Mariano Locsin executed a Last Will and Testament instituting his
required to comment thereon. The petition was thereafter given wife, Catalina, as the sole and universal heir of all his
due course and the parties were directed to submit their properties. 3 The will was drawn up by his wife's nephew and trusted
memorandums. These, together with the evidence, having been legal adviser, Attorney Salvador Lorayes. Attorney Lorayes disclosed
carefully considered, the Court now decides the case. that the spouses being childless, they had agreed that their
properties, after both of them shall have died should revert to their
First, the facts as the Court sees them in light of the evidence on respective sides of the family, i.e., Mariano's properties would go to
record: his "Locsin relatives" (i.e., brothers and sisters or nephews and
nieces), and those of Catalina to her "Jaucian relatives." 4
The late Getulio Locsin had three children named Mariano, Julian
Don Mariano Locsin died of cancer on September 14, 1948 after
and Magdalena, all surnamed Locsin. He owned extensive
a lingering illness. In due time, his will was probated in Special
residential and agricultural properties in the provinces of Albay
Proceedings No. 138, CFI of Albay without any opposition from
and Sorsogon. After his death, his estate was divided among his
both sides of the family. As directed in his will, Doa Catalina was
three (3) children as follows:
appointed executrix of his estate. Her lawyer in the probate
proceeding was Attorney Lorayes. In the inventory of her
(a) the coconut lands of some 700 hectares in Bual, Pilar, husband's estate 5 which she submitted to the probate court for
Sorsogon, were adjudicated to his daughter, Magdalena Locsin; approval, 6Catalina declared that "all items mentioned from Nos. 1 to
33 are the private properties of the deceased and form part of his
(b) 106 hectares of coconut lands were given to Julian Locsin, capital at the time of the marriage with the surviving spouse, while
father of the petitioners Julian, Mariano, Jose, Salvador, Matilde, items Nos. 34 to 42 are conjugal." 7
and Aurea, all surnamed Locsin;
Among her own and Don Mariano's relatives, Doa Catalina was
(c) more than forty (40) hectares of coconut lands in Bogtong, closest to her nephew, Attorney Salvador Lorayes, her nieces,
eighteen (18) hectares of riceland in Daraga, and the residential Elena Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco,
lots in Daraga, Albay and in Legazpi City went to his son Mariano, and the husbands of the last two: Hostilio Cornelio and Fernando
which Mariano brought into his marriage to Catalina Jaucian in Velasco. 8 Her trust in Hostilio Cornelio was such that she made him custodian of all the
1908. Catalina, for her part, brought into the marriage untitled 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
properties which she had inherited from her parents, Balbino documents and, more often than not, the witnesses to the transactions were her niece
Jaucian and Simona Anson. These were augmented by other Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes-Velasco, or their husbands. Her niece,
Elena Jaucian, was her life-long companion in her house.
properties acquired by the spouses in the course of their
union, 1 which however was not blessed with children.
Don Mariano relied on Doa Catalina to carry out the terms of
Eventually, the properties of Mariano and Catalina were brought their compact, hence, nine (9) years after his death, as if in
under the Torrens System. Those that Mariano inherited from his obedience to his voice from the grave, and fully cognizant that
father, Getulio Locsin, were surveyed cadastrally and registered she was also advancing in years, Doa Catalina began
in the name of "Mariano Locsin, married to Catalina Jaucian.'' 2 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
Page 14 of 64

which she had received from her husband's estate, to his Locsin 6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto -
nephews and nieces: favor of Aurea B. Locsin

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE 7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto -
WITNESSES favor of Aurea B. Locsin

23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481 15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto -
favor of Mariano Locsin Aurea Locsin

1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000 16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina
Jose R. Locsin Anson
Aurea Locsin M. Acabado
1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000
Hostilio Cornello 17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor
Julian Locsin (Lot 2020) Helen M. Jaucian Satuito
Aurea Locsin Mariano B. Locsin
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin, 19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto -
Matilde L. Cordero favor of Mariano Locsin
and Salvador Locsin
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P
2 Feb. 4, 1975 Deed of Donation in 34,045 1,000 Delfina Anson
favor Aurea Locsin, in favor of Manuel V. del (Lot 2155) Antonio Illegible
Matilde L. Cordero Rosario whose maternal
and Salvador Locsin grandfather was Getulio
Locsin
3 Sept. 9, 1975 Deed of Donation in (Lot 2059)
favor Aurea Locsin, 2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500
Matilde L. Cordero Antonio Illegible
and Salvador Locsin in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals
4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio from bigger portion of
favor of Aurea B. Locsin Fernando Velasco Lot 2155 leased to Filoil
Refinery were assigned to
5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Maria Jaucian Lorayes
Cornelio Cornelio
favor of Aurea B. Locsin Elena Jaucian
Page 15 of 64

Of her own properties, Doa Catalina conveyed the following to 25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500
her own nephews and nieces and others: of Rogelio Marticio

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE Doa Catalina died on July 6, 1977.

2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000 Four years before her death, she had made a will on October 22,
Vicente Jaucian (lot 2020) 1973 affirming and ratifying the transfers she had made during
(6,825 sqm. when her lifetime in favor of her husband's, and her own, relatives. After
resurveyed) 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
24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000 devised to them under the will had already been conveyed to
in favor of Francisco M. them by the deceased when she was still alive, except some
Maquiniana legacies which the executor of her will or estate, Attorney
Salvador Lorayes, proceeded to distribute.
26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300
favor of Francisco In 1989, or six (6) years after Doa Catalina's demise, some of
Maquiniana her Jaucian nephews and nieces who had already received their
legacies and hereditary shares from her estate, filed action in the
27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000 Regional Trial Court of Legaspi City (Branch VIII, Civil Case No.
favor of Ireneo Mamia 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
28 May 3, 1973 Deed of Absolute Sale in 75 P 750
circumvent the laws on succession. Those who were closest to
favor of Zenaida Buiza
Doa Catalina did not join the action.
29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500
After the trial, judgment was rendered on July 8, l985 in favor of
favor of Felisa Morjella
the plaintiffs (Jaucian), and against the Locsin defendants, the
dispositive part of which reads:
30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000
favor of Inocentes Motocinos
WHEREFORE, this Court renders judgment for
the plaintiffs and against the defendants:
31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500
favor of Casimiro Mondevil
(1) declaring the, plaintiffs, except the heirs of
Josefina J. Borja and Eduardo Jaucian, who
32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200 withdrew, the rightful heirs and entitled to the
favor of Juan Saballa entire estate, in equal portions, of Catalina
Jaucian Vda. de Locsin, being the nearest
Page 16 of 64

collateral heirs by right of representation of Juan (6) ordering the defendants to pay the plaintiffs
and Gregorio, both surnamed Jaucian, and full- attorney's fees and litigation expenses, in the
blood brothers of Catalina; amount of P30,000.00 without prejudice to any
contract between plaintiffs and counsel.
(2) declaring the deeds of sale, donations,
reconveyance and exchange and all other Costs against the defendants. 9
instruments conveying any part of the estate of
Catalina J. Vda. de Locsin including, but not The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-
limited to those in the inventory of known 11186) which rendered its now appealed judgment on March 14,
properties (Annex B of the complaint) as null and 1989, affirming the trial court's decision.
void ab-initio;
The petition has merit and should be granted.
(3) ordering the Register of Deeds of Albay and/or
Legazpi City to cancel all certificates of title and The trial court and the Court of Appeals erred in declaring the
other transfers of the real properties, subject of private respondents, nephews and nieces of Doa Catalina J.
this case, in the name of defendants, and Vda. de Locsin, entitled to inherit the properties which she had
derivatives therefrom, and issue new ones to the already disposed of more than ten (10) years before her death.
plaintiffs; For those properties did not form part of her hereditary
estate, i.e., "the property and transmissible rights and
(4) ordering the defendants, jointly and severally, obligations existing at the time of (the decedent's) death and
to reconvey ownership and possession of all such those which have accrued thereto since the opening of the
properties to the plaintiffs, together with all succession." 10 The rights to a person's succession are transmitted
muniments of title properly endorsed and from the moment of his death, and do not vest in his heirs until such
delivered, and all the fruits and incomes received time. 11 Property which Doa Catalina had transferred or conveyed to
by the defendants from the estate of Catalina, other persons during her lifetime no longer formed part of her estate
with legal interest from the filing of this action; and at the time of her death to which her heirs may lay claim. Had she
where reconveyance and delivery cannot be died intestate, only the property that remained in her estate at the
effected for reasons that might have intervened time of her death devolved to her legal heirs; and even if those
and prevent the same, defendants shall pay for transfers were, one and all, treated as donations, the right arising
the value of such properties, fruits and incomes under certain circumstances to impugn and compel the reduction or
received by them, also with legal interest from the revocation of a decedent's gifts inter vivos does not inure to the
filing, of this case respondents since neither they nor the donees are compulsory (or
forced) heirs. 12
(5) ordering each of the defendants to pay the
plaintiffs the amount of P30,000.00 as exemplary There is thus no basis for assuming an intention on the part of
damages; and the further sum of P20,000.00 Doa Catalina, in transferring the properties she had received
each as moral damages; and from her late husband to his nephews and nieces, an intent to
circumvent the law in violation of the private respondents' rights
Page 17 of 64

to her succession. Said respondents are not her compulsory On March 27, 1967, Lot 2020 16 was partitioned by and among
heirs, and it is not pretended that she had any such, hence there Doa Catalina, Julian Locsin, Vicente Jaucian and Agapito
were no legitimes that could conceivably be impaired by any Lorete. 17 At least Vicente Jaucian, among the other respondents in
transfer of her property during her lifetime. All that the this case, is estopped from assailing the genuineness and due
respondents had was an expectancy that in nowise restricted her execution of the sale of portions of Lot 2020 to himself, Julian Locsin,
freedom to dispose of even her entire estate subject only to the and Agapito Lorete, and the partition agreement that he (Vicente)
limitation set forth in Art. 750, Civil Code which, even if it were concluded with the other co-owners of Lot 2020.
breached, the respondents may not invoke:
Among Doa, Catalina's last transactions before she died in 1977
Art. 750. The donation may comprehend all the were the sales of property which she made in favor of Aurea
present property of the donor or part thereof, Locsin and Mariano Locsin in 1975. 18
provided he reserves, in full ownership or in
usufruct, sufficient means for the support of There is not the slightest suggestion in the record that Doa
himself, and of all relatives who, at the time of the Catalina was mentally incompetent when she made those
acceptance of the donation, are by law entitled to dispositions. Indeed, how can any such suggestion be made in
be supported by the donor. Without such light of the fact that even as she was transferring properties to the
reservation, the donation shall be reduced on Locsins, she was also contemporaneously disposing of her other
petition of any person affected. (634a) properties in favor of the Jaucians? She sold to her nephew,
Vicente Jaucian, on July 16, 1964 (21 years before her death)
The lower court capitalized on the fact that Doa Catalina was one-half (or 5,000 sq.m.) of Lot 2020. Three years later, or on
already 90 years old when she died on July 6, 1977. It insinuated March 22, 1967, she sold another 5000 sq.m. of the same lot to
that because of her advanced years she may have been imposed Julian Locsin. 19
upon, or unduly influenced and morally pressured by her
husband's nephews and nieces (the petitioners) to transfer to From 1972 to 1973 she made several other transfers of her
them the properties which she had inherited from Don Mariano's properties to her relatives and other persons, namely: Francisco
estate. The records do not support that conjecture. Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella,
Inocentes Motocinos, Casimiro Mondevil, Juan Saballa and
For as early as 1957, or twenty-eight (28) years before her death, Rogelio Marticio. 20 None of those transactions was impugned by the
Doa Catalina had already begun transferring to her Locsin private respondents.
nephews and nieces the properties which she received from Don
Mariano. She sold a 962-sq.m. lot on January 26, 1957 to his In 1975, or two years before her death, Doa Catalina sold some
nephew and namesake Mariano Locsin II. 13 On April 7, 1966, or 19 lots not only to Don Mariano's niece, Aurea Locsin, and his
years before she passed away, she also sold a 43 hectare land to nephew, Mariano Locsin
another Locsin nephew, Jose R. Locsin. 14 The next year, or on II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was
March 22, 1967, she sold a 5,000-sq.m. portion of Lot 2020 to Julian competent to make that conveyance to Mercedes, how can there be
Locsin. 15 any doubt that she was equally competent to transfer her other
pieces of property to Aurea and Mariano II?
Page 18 of 64

The trial court's belief that Don Mariano Locsin bequeathed his made the conveyances in favor of the petitioners. In fact,
entire estate to his wife, from a "consciousness of its real origin" considering their closeness to Doa Catalina it would have been
which carries the implication that said estate consisted of well-nigh impossible for the petitioners to employ "fraud, undue
properties which his wife had inherited from her parents, flies in pressure, and subtle manipulations" on her to make her sell or
the teeth of Doa Catalina's admission in her inventory of that donate her properties to them. Doa Catalina's niece, Elena
estate, that "items 1 to 33 are the private properties of the Jaucian, daughter of her brother, Eduardo Jaucian, lived with her
deceased (Don Mariano) and forms (sic) part of his capital at the in her house. Her nephew-in-law, Hostilio Cornelio, was the
time of the marriage with the surviving spouse, while items 34 to custodian of the titles of her properties. The sales and donations
42 are conjugal properties, acquired during the marriage." She which she signed in favor of the petitioners were prepared by her
would have known better than anyone else whether the listing trusted legal adviser and nephew, Attorney Salvador Lorayes.
included any of her paraphernal property so it is safe to assume The (1) deed of donation dated November 19,
that none was in fact included. The inventory was signed by her 1974 23 in favor of Aurea Locsin, (2) another deed of donation dated
under oath, and was approved by the probate court in Special February 4, 1975 24 in favor of Matilde Cordero, and (3) still another
Proceeding No. 138 of the Court of First Instance of Albay. It was deed dated September 9, 1975 25 in favor of Salvador Lorayes, were
prepared with the assistance of her own nephew and counsel, all witnessed by Hostilio Cornelio (who is married to Doa Catalina's
Atty. Salvador Lorayes, who surely would not have prepared a niece, Maria Lorayes) and Fernando Velasco who is married to
false inventory that would have been prejudicial to his aunt's another niece, Maria Olbes. 26The sales which she made in favor of
interest and to his own, since he stood to inherit from her Aurea Locsin on July 15, 1974 27 were witnessed by Hostilio Cornelio
eventually. and Elena Jaucian. Given those circumstances, said transactions
could not have been anything but free and voluntary acts on her part.
This Court finds no reason to disbelieve Attorney Lorayes'
testimony that before Don Mariano died, he and his wife (Doa Apart from the foregoing considerations, the trial court and the
Catalina), being childless, had agreed that their respective Court of Appeals erred in not dismissing this action for annulment
properties should eventually revert to their respective lineal and reconveyance on the ground of prescription. Commenced
relatives. As the trusted legal adviser of the spouses and a full- decades after the transactions had been consummated, and six
blood nephew of Doa Catalina, he would not have spun a tale (6) years after Doa Catalina's death, it prescribed four (4) years
out of thin air that would also prejudice his own interest. 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
Little significance, it seems, has been attached to the fact that respondents may not feign ignorance of said transactions because
among Doa Catalina's nephews and nieces, those closest to the registration of the deeds was constructive notice thereof to them
her: (a) her lawyer-nephew Attorney Salvador Lorayes; (b) her and the whole world. 29
niece and companion Elena Jaucian: (c) her nieces Maria Olbes-
Velasco and Maria Lorayes-Cornelio and their respective WHEREFORE, the petition for review is granted. The decision
husbands, Fernando Velasco and Hostilio Cornelio, did not join dated March 14, 1989 of the Court of Appeals in CA-G.R. CV No.
the suit to annul and undo the dispositions of property which she 11186 is REVERSED and SET ASIDE. The private respondents'
made in favor of the Locsins, although it would have been to their complaint for annulment of contracts and reconveyance of
advantage to do so. Their desistance persuasively demonstrates properties in Civil Case No. 7152 of the Regional Trial Court,
that Doa Catalina acted as a completely free agent when she
Page 19 of 64

Branch VIII of Legazpi City, is DISMISSED, with costs against the Republic of the Philippines
private respondents, plaintiffs therein. SUPREME COURT
Manila
SO ORDERED.
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 2in 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
Page 20 of 64

appellee in favor of appellants as valid and in respect of which a petition for probate was filed
binding, subject to the result of the administration with the Regional Trial Court, Branch 24, Bian,
proceedings of the testate Estate of Demetrio Laguna; that at the time the contract was
Carpena. executed, the parties were aware of the pendency
of the probate proceeding; that the contract to sell
SO ORDERED. 4 was not approved by the probate court; that
realizing the nullity of the contract [petitioner] had
Petitioner's Motion for Reconsideration was denied in the offered to return the downpayment received from
challenged Resolution. 5 [private respondents], but the latter refused to
accept it; that [private respondents] further failed
to provide funds for the tenant who demanded
The Facts
P150,00.00 in payment of his tenancy rights on
the land; that [petitioner] had chosen to rescind
The antecedent facts, as succinctly narrated by Respondent the contract.
Court of Appeals, are:
At the pre-trial conference the parties stipulated
In a complaint for specific performance filed with on [sic] the following facts:
the court a quo [herein private respondents]
Aladin Simundac and Miguel Oliven alleged that
1. That on February 3, 1989,
[herein petitioner] Natalia Carpena Opulencia
[private respondents] and
executed in their favor a "CONTRACT TO SELL"
[petitioner] entered into a contract
Lot 2125 of the Sta. Rosa Estate, consisting of
to sell involving a parcel of land
23,766 square meters located in Sta. Rosa,
situated in Sta. Rosa, Laguna,
Laguna at P150.00 per square meter; that
otherwise known as Lot No. 2125
plaintiffs paid a downpayment of P300,000.00 but
of the Sta. Rosa Estate.
defendant, despite demands, failed to comply with
her obligations under the contract. [Private
respondents] therefore prayed that [petitioner] be 2. That the price or consideration
ordered to perform her contractual obligations and of the said sell [sic] is P150.00 per
to further pay damages, attorney's fee and square meters;
litigation expenses.
3. That the amount of
In her traverse, [petitioner] admitted the execution P300,000.00 had already been
of the contract in favor of plaintiffs and receipt of received by [petitioner];
P300,000.00 as downpayment. However, she put
forward the following affirmative defenses: that the 4. That the parties have
property subject of the contract formed part of the knowledge that the property
Estate of Demetrio Carpena (petitioner's father), subject of the contract to sell is
Page 21 of 64

subject of the probate It is noteworthy that when the contract to sell was
proceedings; consummated, no petition was filed in the Court
with notice to the heirs of the time and place of
5. That [as] of this time, the hearing, to show that the sale is necessary and
probate Court has not yet issued beneficial. A sale of properties of an estate as
an order either approving or beneficial to the interested parties must comply
denying the said sale. (p. 3, with the requisites provided by law, (Sec. 7, Rule
appealed Order of September 15, 89, Rules of Court) which are mandatory, and
1992, pp. 109-112, record). without them, the authority to sell, the sale itself,
and the order approving it, would be null and
[Private respondents] submitted their evidence in void ab initio. (Arcilla vs. David, 77 Phil. 718,
support of the material allegations of the Gabriel, et al., vs. Encarnacion, et al., L-6736,
complaint. In addition to testimonies of witnesses, May 4, 1954; Bonaga vs. Soler, 2 Phil. 755)
[private respondents] presented the following Besides, it is axiomatic that where the estate of a
documentary evidences: (1) Contract to Sell (Exh deceased person is already the subject of a
A); (2) machine copy of the last will and testament testate or intestate proceeding, the administrator
of Demetrio Carpena (defendant's father) to show cannot enter into any transaction involving it
that the property sold by defendant was one of without prior approval of the probate Court.
those devised to her in said will (Exh B); (3) (Estate of Obave, vs. Reyes, 123 SCRA 767).
receipts signed by defendant for the
downpayment in the total amount of P300,000.00 As held by the Supreme Court, a decedent's
(Exhs C, D & E); and (4) demand letters sent to representative (administrator) is not estopped
defendant (Exhs F & G). from questioning the validity of his own void deed
purporting to convey land. (Bona vs. Soler, 2 Phil,
It appears that [petitioner], instead of submitting 755). In the case at bar, the [petitioner,] realizing
her evidence, filed a Demurrer to Evidence. In the illegality of the transaction[,] has interposed
essence, defendant maintained that the contract the nullity of the contract as her defense, there
to sell was null and void for want of approval by being no approval from the probate Court, and, in
the probate court. She further argued that the good faith offers to return the money she received
contract was subject to a suspensive condition, from the [private respondents]. Certainly, the
which was the probate of the will of defendant's administratrix is not estop[ped] from doing so and
father Demetrio Carpena. An Opposition was filed the action to declare the inexistence of contracts
by [private respondents]. It appears further that in do not prescribe. This is what precipitated the
an Order dated December 15, 1992 the court a filing of [petitioner's] demurrer to evidence. 6
quo granted the demurrer to evidence and
dismissed the complaint. It justified its action in The trial court's order of dismissal was elevated to the Court of
dismissing the complaint in the following manner: Appeals by private respondents who alleged:
Page 22 of 64

1. The lower court erred in concluding that the therefor with notice to the heirs, devisees and
contract to sell is null and void, there being no legatees.
approval of the probate court.
However, as adverted to by appellants in their
2. The lower court erred in concluding that brief, the contract to sell in question is not covered
[petitioner] in good faith offers to return the money by Rule 89 of the Revised Rules of Court since it
to [private respondents]. was made by appellee in her capacity as an heir,
of a property that was devised to her under the
3. The lower court erred in concluding that will sought to be probated. Thus, while the
[petitioner] is not under estoppel to question the document inadvertently stated that appellee
validity of the contract to sell. executed the contract in her capacity as "executrix
and administratrix" of the estate, a cursory
4. The lower court erred in not ruling on the reading of the entire text of the contract would
consideration of the contract to sell which is unerringly show that what she undertook to sell to
tantamount to plain unjust enrichment of appellants was one of the "other properties given
[petitioner] at the expense of [private to her by her late father," and more importantly, it
respondents]. 7 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
Public Respondent's Ruling
preliminary portion of the document, which reads:
Declaring the Contract to Sell valid, subject to the outcome of the
WHEREAS, the SELLER is the
testate proceedings on Demetrio Carpena's estate, the appellate
lawful owner of a certain parcel of
court set aside the trial court's dismissal of the complaint and
land, which is more particularly
correctly ruled as follows:
described as follows:
It is apparent from the appealed order that the
xxx xxx xxx
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 xxx xxx xxx
the estate. Hence, its main reason for voiding the
contract in question was the absence of the xxx xxx xxx
probate court's approval. Presumably, what the
lower court had in mind was the sale of the estate WHEREAS, the SELLER suffers
or part thereof made by the administrator for the difficulties in her living and has
benefit of the estate, as authorized under Rule 89 forced to offer the sale of the
of the Revised Rules of Court, which requires the above-described property, "which
approval of the probate court upon application property was only one among the
Page 23 of 64

other properties given to her by It is noteworthy that in a Manifestation filed with


her late father," to anyone who can this court by appellants, which is not controverted
wait for complete clearance of the by appellee, it is mentioned that the last will and
court on the Last Will Testament of testament of Demetrio Carpena was approved in
her father. a final judgment rendered in Special Proceeding
No. B-979 by the Regional Trial Court, Branch 24
WHEREAS, the SELLER in order Bian, Laguna. But of course such approval does
to meet her need of cash, has not terminate the proceeding[s] since the
offered for sale the said property settlement of the estate will ensue. Such
at ONE HUNDRED FIFTY PESOS proceedings will consist, among others, in the
(150.00) Philippine Currency, per issuance by the court of a notice to creditors (Rule
square meter unto the BUYERS, 86), hearing of money claims and payment of
and with this offer, the latter has taxes and estate debts (Rule 88) and distribution
accepted to buy and/or purchase of the residue to the heirs or persons entitled
the same, less the area for the thereto (Rule 90). In effect, the final execution of
road and other easements the deed of sale itself upon appellants' payment of
indicated at the back of Transfer the balance of the purchase price will have to wait
Certificate of Title No. 2125 duly for the settlement or termination of the
confirmed after the survey to be administration proceedings of the Estate of
conducted by the BUYER's Demetrio Carpena. Under the foregoing premises,
Licensed Geodetic Engineer, and what the trial court should have done with the
whatever area [is] left. (Emphasis complaint was not to dismiss it but to simply put
added). on hold further proceedings until such time that
the estate or its residue will be distributed in
To emphasize, it is evident from the foregoing accordance with the approved will.
clauses of the contract that appellee sold Lot
2125 not in her capacity as executrix of the will or The rule is that when a demurrer to the evidence
administratrix of the estate of her father, but as an is granted by the trial court but reversed on
heir and more importantly as owner of said lot appeal, defendant loses the right to adduce his
which, along with other properties, was devised to evidence. In such a case, the appellate court will
her under the will sought to be probated. That decide the controversy on the basis of plaintiff's
being so, the requisites stipulated in Rule 89 of evidence. In the case at bench, while we find the
the Revised Rules of Court which refer to a sale contract to sell valid and binding between the
made by the administrator for the benefit of the parties, we cannot as yet order appellee to
estate do not apply. perform her obligations under the contract
because the result of the administration
xxx xxx xxx proceedings of the testate Estate of Demetrio
Carpena has to be awaited. Hence, we shall
Page 24 of 64

confine our adjudication to merely declaring the xxx xxx xxx


validity of the questioned Contract to Sell.
Insisting that the above rule should apply to this case, petitioner
Hence, this appeal. 8 argues that the stipulations in the Contract to Sell require her to
act in her capacity as an executrix or administratrix. She avers
The Issue that her obligation to eject tenants pertains to the administratrix or
executrix, the estate being the landlord of the said
Petitioner raises only one issue: 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
Whether or not the Contract to Sell dated 03 and secure the necessary clearances from government offices.
February 1989 executed by the [p]etitioner and Petitioner alleges that these obligations can be undertaken only by
[p]rivate [r]espondent[s] without the requisite an executor or administrator of an estate, and not by an heir. 11
probate court approval is valid.
The Court is not persuaded. As correctly ruled by the Court of
The Court's Ruling Appeals, Section 7 of Rule 89 of the Rules of Court is not
applicable, because petitioner entered into the Contract to Sell in
The petition has no merit. her capacity as an heiress, not as an executrix or administratrix of
the estate. In the contract, she represented herself as the "lawful
Contract to Sell Valid owner" and seller of the subject parcel of land. 12 She also
explained the reason for the sale to be "difficulties in her living"
In a nutshell, petitioner contends that "where the estate of the conditions and consequent "need of cash." 13 These representations
deceased person is already the subject of a testate or intestate clearly evince that she was not acting on behalf of the estate under
proceeding, the administrator cannot enter into any transaction probate when she entered into the Contract to Sell. Accordingly, the
jurisprudence cited by petitioners has no application to the instant
involving it without prior approval of the Probate Court." 9 She
case.
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: We emphasize that hereditary rights are vested in the heir or
heirs from the moment of the decedent's death. 14Petitioner,
Sec. 7. Regulations for granting authority to sell, therefore, became the owner of her hereditary share the moment her
father died. Thus, the lack of judicial approval does not invalidate the
mortgage, or otherwise encumber estate. The
Contract to Sell, because the petitioner has the substantive right to
court having jurisdiction of the estate of the
sell the whole or a part of her share in the estate of her late
deceased may authorize the executor or father. 15 Thus, in Jakosalem vs. Rafols, 16 the Court resolved an
administrator to sell, mortgage, or otherwise identical issue under the old Civil Code and held:
encumber real estate, in cases provided by these
rules and when it appears necessary or beneficial,
Art. 440 of the Civil Code provides that "the
under the following regulations:
possession of hereditary property is deemed to be
Page 25 of 64

transmitted to the heir without interruption from father." 19 Consequently, although the Contract to Sell was perfected
the instant of the death of the decedent, in case between the petitioner and private respondents during the pendency
the inheritance be accepted." And Manresa with of the probate proceedings, the consummation of the sale or the
reason states that upon the death of a person, transfer of ownership over the parcel of land to the private
each of his heirs "becomes the undivided owner respondents is subject to the full payment of the purchase price and
of the whole estate left with respect to the part or to the termination and outcome of the testate proceedings.
portion which might be adjudicated to him, a Therefore, there is no basis for petitioner's apprehension that the
community of ownership being thus formed Contract to Sell may result in a premature partition and distribution of
among the coowners of the estate while it remains 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
undivided." . . . And according to article 399 of the
administration, in no wise stands in the way of such
Civil Code, every part owner may assign or
administration." 20
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 Estoppel
in the partition upon the dissolution of the
community. Hence, where some of the heirs, Finally, petitioner is estopped from backing out of her
without the concurrence of the others, sold a representations in her valid Contract to Sell with private
property left by their deceased father, this Court, respondents, from whom she had already received P300,000 as
speaking thru its then Chief Justice Cayetano initial payment of the purchase price. Petitioner may not renege
Arellano, said that the sale was valid, but that the on her own acts and representations, to the prejudice of the
effect thereof was limited to the share which may private respondents who have relied on them. 21 Jurisprudence
be allotted to the vendors upon the partition of the teaches us that neither the law nor the courts will extricate a party
estate. from an unwise or undesirable contract he or she entered into with all
the required formalities and with full awareness of its
consequences. 22
Administration of the Estate Not
WHEREFORE, the petition is hereby DENIED and the assailed
Prejudiced by the Contract to Sell Decision of the Court of Appeals AFFIRMED. Costs against
petitioner.
Petitioner further contends that "[t]o sanction the sale at this
stage would bring about a partial distribution of the decedent's SO ORDERED.
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
Page 26 of 64

Republic of the Philippines sum of P10,000,000.00, despite formal demand for payment
SUPREME COURT thereof.2
Manila
Consequently, Tabanao' s heirs, respondents herein, filed against
FIRST DIVISION petitioner an action for accounting, payment of shares, division of
assets and damages.3 In their complaint, respondents prayed as
G.R. No. 126334 November 23, 2001 follows:

EMILIO EMNACE, petitioner, 1. Defendant be ordered to render the proper accounting


vs. of all the assets and liabilities of the partnership at bar;
COURT OF APPEALS, ESTATE OF VICENTE TABANAO, and
SHERWIN TABANAO, VICENTE WILLIAM TABANAO,
JANETTE TABANAO DEPOSOY, VICENTA MAY TABANAO 2. After due notice and hearing defendant be ordered to
VARELA, ROSELA TABANAO and VINCENT pay/remit/deliver/surrender/yield to the plaintiffs the
TABANAO, respondents. following:

YNARES-SANTIAGO, J.: A. No less than One Third (1/3) of the assets,


properties, dividends, cash, land(s), fishing
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto vessels, trucks, motor vehicles, and other forms
Divinagracia were partners in a business concern known as Ma. and substance of treasures which belong and/or
Nelma Fishing Industry. Sometime in January of 1986, they should belong, had accrued and/or must accrue to
decided to dissolve their partnership and executed an agreement the partnership;
of partition and distribution of the partnership properties among
them, consequent to Jacinto Divinagracia's withdrawal from the B. No less than Two Hundred Thousand Pesos
partnership.1 Among the assets to be distributed were five (5) (P200,000.00) as moral damages;
fishing boats, six (6) vehicles, two (2) parcels of land located at
Sto. Nio and Talisay, Negros Occidental, and cash deposits in C. Attorney's fees equivalent to Thirty Percent
the local branches of the Bank of the Philippine Islands and (30%) of the entire share/amount/award which the
Prudential Bank. Honorable Court may resolve the plaintiffs as
entitled to plus P1,000.00 for every appearance in
Throughout the existence of the partnership, and even after court.4
Vicente Tabanao's untimely demise in 1994, petitioner failed to
submit to Tabanao's heirs any statement of assets and liabilities Petitioner filed a motion to dismiss the complaint on the grounds
of the partnership, and to render an accounting of the of improper venue, lack of jurisdiction over the nature of the
partnership's finances. Petitioner also reneged on his promise to action or suit, and lack of capacity of the estate of Tabanao to
turn over to Tabanao's heirs the deceased's 1/3 share in the total sue.5 On August 30, 1994, the trial court denied the motion to
assets of the partnership, amounting to P30,000,000.00, or the dismiss. It held that venue was properly laid because, while
Page 27 of 64

realties were involved, the action was directed against a particular I. Whether or not respondent Judge acted without
person on the basis of his personal liability; hence, the action is jurisdiction or with grave abuse of discretion in taking
not only a personal action but also an action in personam. As cognizance of a case despite the failure to pay the
regards petitioner's argument of lack of jurisdiction over the action required docket fee;
because the prescribed docket fee was not paid considering the
huge amount involved in the claim, the trial court noted that a II. Whether or not respondent Judge acted without
request for accounting was made in order that the exact value of jurisdiction or with grave abuse of discretion in insisting to
the partnership may be ascertained and, thus, the correct docket try the case which involve (sic) a parcel of land situated
fee may be paid. Finally, the trial court held that the heirs of outside of its territorial jurisdiction;
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 III. Whether or not respondent Judge acted without
rights to the succession are transmitted from the moment of the jurisdiction or with grave abuse of discretion in allowing
death of the decedent.6 the estate of the deceased to appear as party plaintiff,
when there is no intestate case and filed by one who was
The following day, respondents filed an amended never appointed by the court as administratrix of the
complaint,7 incorporating the additional prayer that petitioner be estates; and
ordered to "sell all (the partnership's) assets and thereafter
pay/remit/deliver/surrender/yield to the plaintiffs" their IV. Whether or not respondent Judge acted without
corresponding share in the proceeds thereof. In due time, jurisdiction or with grave abuse of discretion in not
petitioner filed a manifestation and motion to dismiss, 8arguing that dismissing the case on the ground of prescription.
the trial court did not acquire jurisdiction over the case due to the
plaintiffs' failure to pay the proper docket fees. Further, in a
On August 8, 1996, the Court of Appeals rendered the assailed
supplement to his motion to dismiss,9 petitioner also raised
decision,12 dismissing the petition for certiorari, upon a finding that
prescription as an additional ground warranting the outright
no grave abuse of discretion amounting to lack or excess of
dismissal of the complaint.
jurisdiction was committed by the trial court in issuing the
questioned orders denying petitioner's motions to dismiss.
On June 15, 1995, the trial court issued an Order,10 denying the
motion to dismiss inasmuch as the grounds raised therein were
Not satisfied, petitioner filed the instant petition for review, raising
basically the same as the earlier motion to dismiss which has
the same issues resolved by the Court of Appeals, namely:
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, I. Failure to pay the proper docket fee;
prescription has not set in the absence of a final accounting.
Moreover, an action based on a written contract prescribes in ten II. Parcel of land subject of the case pending before
years from the time the right of action accrues. the trial court is outside the said court's territorial
jurisdiction;
Petitioner filed a petition for certiorari before the Court of
Appeals,11 raising the following issues:
Page 28 of 64

III. Lack of capacity to sue on the part of plaintiff heirs fees, we see no attempt to cheat the courts on the part of
of Vicente Tabanao; and respondents. In fact, the lower courts have noted their expressed
desire to remit to the court "any payable balance or lien on
IV. Prescription of the plaintiff heirs' cause of action. whatever award which the Honorable Court may grant them in
this case should there be any deficiency in the payment of the
It can be readily seen that respondents' primary and ultimate docket fees to be computed by the Clerk of Court."17 There is
objective in instituting the action below was to recover the evident willingness to pay, and the fact that the docket fee paid so
decedent's 1/3 share in the partnership' s assets. While they ask far is inadequate is not an indication that they are trying to avoid
for an accounting of the partnership' s assets and finances, what paying the required amount, but may simply be due to an inability
they are actually asking is for the trial court to compel petitioner to to pay at the time of filing. This consideration may have moved
pay and turn over their share, or the equivalent value thereof, the trial court and the Court of Appeals to declare that the unpaid
from the proceeds of the sale of the partnership assets. They also docket fees shall be considered a lien on the judgment award.
assert that until and unless a proper accounting is done, the exact
value of the partnership' s assets, as well as their corresponding Petitioner, however, argues that the trial court and the Court of
share therein, cannot be ascertained. Consequently, they feel Appeals erred in condoning the non-payment of the proper legal
justified in not having paid the commensurate docket fee as fees and in allowing the same to become a lien on the monetary
required by the Rules of Court. 1wphi1.nt
or property judgment that may be rendered in favor of
respondents. There is merit in petitioner's assertion. The third
We do not agree. The trial court does not have to employ paragraph of Section 16, Rule 141 of the Rules of Court states
guesswork in ascertaining the estimated value of the that:
partnership's assets, for respondents themselves voluntarily
pegged the worth thereof at Thirty Million Pesos The legal fees shall be a lien on the monetary or property
(P30,000,000.00). Hence, this case is one which is really not judgment in favor of the pauper-litigant.
beyond pecuniary estimation, but rather partakes of the nature of
a simple collection case where the value of the subject assets or Respondents cannot invoke the above provision in their favor
amount demanded is pecuniarily determinable.13 While it is true because it specifically applies to pauper-litigants. Nowhere in the
that the exact value of the partnership's total assets cannot be records does it appear that respondents are litigating as paupers,
shown with certainty at the time of filing, respondents can and and as such are exempted from the payment of court fees.18
must ascertain, through informed and practical estimation, the
amount they expect to collect from the partnership, particularly The rule applicable to the case at bar is Section 5(a) of Rule 141
from petitioner, in order to determine the proper amount of docket of the Rules of Court, which defines the two kinds of claims as:
and other fees.14 It is thus imperative for respondents to pay the (1) those which are immediately ascertainable; and (2) those
corresponding docket fees in order that the trial court may acquire which cannot be immediately ascertained as to the exact amount.
jurisdiction over the action.15 This second class of claims, where the exact amount still has to
be finally determined by the courts based on evidence presented,
Nevertheless, unlike in the case of Manchester Development falls squarely under the third paragraph of said Section 5(a),
Corp. v. Court of Appeals,16 where there was clearly an effort to which provides:
defraud the government in avoiding to pay the correct docket
Page 29 of 64

In case the value of the property or estate or the sum Rules of Court specifically provides that the court may refund the
claimed is less or more in accordance with the appraisal 'excess or exact additional fees should the initial payment be
of the court, the difference of fee shall be refunded or paid insufficient. It is clear that it is only the difference between the
as the case may be. (Underscoring ours) amount finally awarded and the fees paid upon filing of this
complaint that is subject to adjustment and which may be
In Pilipinas Shell Petroleum Corporation v. Court of Appeals,19 this subjected to alien.
Court pronounced that the above-quoted provision "clearly
contemplates an Initial payment of the filing fees corresponding to In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon.
the estimated amount of the claim subject to adjustment as to Maximiano Asuncion,22 this Court held that when the specific
what later may be proved."20 Moreover, we reiterated therein the claim "has been left for the determination by the court, the
principle that the payment of filing fees cannot be made additional filing fee therefor shall constitute a lien on the judgment
contingent or dependent on the result of the case. Thus, an initial and it shall be the responsibility of the Clerk of Court or his duly
payment of the docket fees based on an estimated amount must authorized deputy to enforce said lien and assess and collect the
be paid simultaneous with the filing of the complaint. Otherwise, additional fee." Clearly, the rules and jurisprudence contemplate
the court would stand to lose the filing fees should the judgment the initial payment of filing and docket fees based on the
later turn out to be adverse to any claim of the respondent heirs. estimated claims of the plaintiff, and it is only when there is a
deficiency that a lien may be constituted on the judgment award
The matter of payment of docket fees is not a mere triviality. until such additional fee is collected.
These fees are necessary to defray court expenses in the
handling of cases. Consequently, in order to avoid tremendous Based on the foregoing, the trial court erred in not dismissing the
losses to the judiciary, and to the government as well, the complaint outright despite their failure to pay the proper docket
payment of docket fees cannot be made dependent on the fees. Nevertheless, as in other procedural rules, it may be
outcome of the case, except when the claimant is a pauper- liberally construed in certain cases if only to secure a just and
litigant. speedy disposition of an action. While the rule is that the payment
of the docket fee in the proper amount should be adhered to,
Applied to the instant case, respondents have a specific claim - there are certain exceptions which must be strictly construed.23
1/3 of the value of all the partnership assets - but they did not
allege a specific amount. They did, however, estimate the In recent rulings, this Court has relaxed the strict adherence to
partnership's total assets to be worth Thirty Million Pesos the Manchester doctrine, allowing the plaintiff to pay the proper
(P30,000,000.00), in a letter21 addressed to petitioner. docket fees within a reasonable time before the expiration of the
Respondents cannot now say that they are unable to make an applicable prescriptive or reglementary period.24
estimate, for the said letter and the admissions therein form part
of the records of this case. They cannot avoid paying the initial In the recent case of National Steel Corp. v. Court of
docket fees by conveniently omitting the said amount in their Appeals,25 this Court held that:
amended complaint. This estimate can be made the basis for the
initial docket fees that respondents should pay. Even if it were The court acquires jurisdiction over the action if the filing
later established that the amount proved was less or more than of the initiatory pleading is accompanied by the payment
the amount alleged or estimated, Rule 141, Section 5(a) of the
Page 30 of 64

of the requisite fees, or, if the fees are not paid at the time contention is not well-taken. The records indubitably show that
of the filing of the pleading, as of the time of full payment respondents are asking that the assets of the partnership be
of the fees within such reasonable time as the court may accounted for, sold and distributed according to the agreement of
grant, unless, of course, prescription has set in the the partners. The fact that two of the assets of the partnership are
meantime. parcels of land does not materially change the nature of the
action. It is an action in personam because it is an action against
It does not follow, however, that the trial court should have a person, namely, petitioner, on the basis of his personal liability.
dismissed the complaint for failure of private respondent It is not an action in rem where the action is against the thing
to pay the correct amount of docket fees. Although the itself instead of against the person.27 Furthermore, there is no
payment of the proper docket fees is a jurisdictional showing that the parcels of land involved in this case are being
requirement, the trial court may allow the plaintiff in an disputed. In fact, it is only incidental that part of the assets of the
action to pay the same within a reasonable time before partnership under liquidation happen to be parcels of land.
the expiration of the applicable prescriptive or
reglementary period. If the plaintiff fails to comply within The time-tested case of Claridades v. Mercader, et al.,28 settled
this requirement, the defendant should timely raise the this issue thus:
issue of jurisdiction or else he would be considered in
estoppel. In the latter case, the balance between the The fact that plaintiff prays for the sale of the assets of the
appropriate docket fees and the amount actually paid by partnership, including the fishpond in question, did not
the plaintiff will be considered a lien or any award he may change the nature or character of the action, such sale
obtain in his favor. (Underscoring ours) being merely a necessary incident of the liquidation of the
partnership, which should precede and/or is part of its
Accordingly, the trial court in the case at bar should determine the process of dissolution.
proper docket fee based on the estimated amount that
respondents seek to collect from petitioner, and direct them to The action filed by respondents not only seeks redress against
pay the same within a reasonable time, provided the applicable petitioner. It also seeks the enforcement of, and petitioner's
prescriptive or reglementary period has not yet expired, Failure to compliance with, the contract that the partners executed to
comply therewith, and upon motion by petitioner, the immediate formalize the partnership's dissolution, as well as to implement
dismissal of the complaint shall issue on jurisdictional grounds. the liquidation and partition of the partnership's assets. Clearly, it
is a personal action that, in effect, claims a debt from petitioner
On the matter of improper venue, we find no error on the part of and seeks the performance of a personal duty on his part. 29 In
the trial court and the Court of Appeals in holding that the case fine, respondents' complaint seeking the liquidation and partition
below is a personal action which, under the Rules, may be of the assets of the partnership with damages is a personal action
commenced and tried where the defendant resides or may be which may be filed in the proper court where any of the parties
found, or where the plaintiffs reside, at the election of the latter.26 reside.30 Besides, venue has nothing to do with jurisdiction for
venue touches more upon the substance or merits of the
Petitioner, however, insists that venue was improperly laid since case.31 As it is, venue in this case was properly laid and the trial
the action is a real action involving a parcel of land that is located court correctly ruled so.
outside the territorial jurisdiction of the court a quo. This
Page 31 of 64

On the third issue, petitioner asserts that the surviving spouse of The three (3) final stages of a partnership are: (1) dissolution; (2)
Vicente Tabanao has no legal capacity to sue since she was winding-up; and (3) termination.36 The partnership, although
never appointed as administratrix or executrix of his estate. dissolved, continues to exist and its legal personality is retained,
Petitioner's objection in this regard is misplaced. The surviving at which time it completes the winding up of its affairs, including
spouse does not need to be appointed as executrix or the partitioning and distribution of the net partnership assets to
administratrix of the estate before she can file the action. She and the partners.37 For as long as the partnership exists, any of the
her children are complainants in their own right as successors of partners may demand an accounting of the partnership's
Vicente Tabanao. From the very moment of Vicente Tabanao' s business. Prescription of the said right starts to run only upon the
death, his rights insofar as the partnership was concerned were dissolution of the partnership when the final accounting is done. 38
transmitted to his heirs, for rights to the succession are
transmitted from the moment of death of the decedent.32 Contrary to petitioner's protestations that respondents' right to
inquire into the business affairs of the partnership accrued in
Whatever claims and rights Vicente Tabanao had against the 1986, prescribing four (4) years thereafter, prescription had not
partnership and petitioner were transmitted to respondents by even begun to run in the absence of a final accounting. Article
operation of law, more particularly by succession, which is a 1842 of the Civil Code provides:
mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance of a The right to an account of his interest shall accrue to any
person are transmitted.33Moreover, respondents became owners partner, or his legal representative as against the winding
of their respective hereditary shares from the moment Vicente up partners or the surviving partners or the person or
Tabanao died.34 partnership continuing the business, at the date of
dissolution, in the absence of any agreement to the
A prior settlement of the estate, or even the appointment of contrary.
Salvacion Tabanao as executrix or administratrix, is not
necessary for any of the heirs to acquire legal capacity to sue. As Applied in relation to Articles 1807 and 1809, which also deal with
successors who stepped into the shoes of their decedent upon the duty to account, the above-cited provision states that the right
his death, they can commence any action originally pertaining to to demand an accounting accrues at the date of dissolution in the
the decedent.35 From the moment of his death, his rights as a absence of any agreement to the contrary. When a final
partner and to demand fulfillment of petitioner's obligations as accounting is made, it is only then that prescription begins to run.
outlined in their dissolution agreement were transmitted to In the case at bar, no final accounting has been made, and that is
respondents. They, therefore, had the capacity to sue and seek precisely what respondents are seeking in their action before the
the court's intervention to compel petitioner to fulfill his trial court, since petitioner has failed or refused to render an
obligations. accounting of the partnership's business and assets. Hence, the
said action is not barred by prescription.
Finally, petitioner contends that the trial court should have
dismissed the complaint on the ground of prescription, arguing In fine, the trial court neither erred nor abused its discretion when
that respondents' action prescribed four (4) years after it accrued it denied petitioner's motions to dismiss. Likewise, the Court of
in 1986. The trial court and the Court of Appeals gave scant Appeals did not commit reversible error in upholding the trial
consideration to petitioner's hollow arguments, and rightly so. court's orders. Precious time has been lost just to settle this
Page 32 of 64

preliminary issue, with petitioner resurrecting the very same Republic of the Philippines
arguments from the trial court all the way up to the Supreme SUPREME COURT
Court. The litigation of the merits and substantial issues of this Manila
controversy is now long overdue and must proceed without
further delay. THIRD DIVISION

WHEREFORE, in view of all the foregoing, the instant petition G.R. No. 113725 June 29, 2000
is DENIED for lack of merit, and the case is REMANDED to the
Regional Trial Court of Cadiz City, Branch 60, which JOHNNY S. RABADILLA,1 petitioner,
is ORDERED to determine the proper docket fee based on the vs.
estimated amount that plaintiffs therein seek to collect, and direct COURT OF APPEALS AND MARIA
said plaintiffs to pay the same within a reasonable time, provided MARLENA2 COSCOLUELLA Y BELLEZA
the applicable prescriptive or reglementary period has not yet VILLACARLOS, respondents.
expired. Thereafter, the trial court is ORDERED to conduct the
appropriate proceedings in Civil Case No. 416-C.
DECISION
Costs against petitioner.
PURISIMA, J.:
1wphi1.nt

SO ORDERED.
This is a petition for review of the decision of the Court of
Appeals,3 dated December 23, 1993, in CA-G.R. No. CV-35555,
which set aside the decision of Branch 52 of the Regional Trial
Court in Bacolod City, and ordered the defendants-
appellees (including herein petitioner), as heirs of Dr. Jorge
Rabadilla, to reconvey title over Lot No. 1392, together with its
fruits and interests, to the estate of Aleja Belleza.

The antecedent facts are as follows:

In a Codicil appended to the Last Will and Testament of testatrix


Aleja Belleza, Dr. Jorge Rabadilla, predecessor-in-interest of the
herein petitioner, Johnny S. Rabadilla, was instituted as a devisee
of 511, 855 square meters of that parcel of land surveyed as Lot
No. 1392 of the Bacolod Cadastre. The said Codicil, which was
duly probated and admitted in Special Proceedings No. 4046
before the then Court of First Instance of Negros Occidental,
contained the following provisions:
Page 33 of 64

"FIRST of his testament, to Maria Marlina Coscolluela y Belleza on the


month of December of each year.
I give, leave and bequeath the following property owned by me to
Dr. Jorge Rabadilla resident of 141 P. Villanueva, Pasay City: SIXTH

(a) Lot No. 1392 of the Bacolod Cadastre, covered by I command, in this my addition (Codicil) that the Lot No. 1392, in
Transfer Certificate of Title No. RT-4002 (10942), which is the event that the one to whom I have left and bequeathed, and
registered in my name according to the records of the his heir shall later sell, lease, mortgage this said Lot, the buyer,
Register of Deeds of Negros Occidental. lessee, mortgagee, shall have also the obligation to respect and
deliver yearly ONE HUNDRED (100) piculs of sugar to Maria
(b) That should Jorge Rabadilla die ahead of me, the Marlina Coscolluela y Belleza, on each month of December,
aforementioned property and the rights which I shall set SEVENTY FIVE (75) piculs of Export and TWENTY FIVE (25)
forth hereinbelow, shall be inherited and acknowledged by piculs of Domestic, until Maria Marlina shall die, lastly should the
the children and spouse of Jorge Rabadilla. buyer, lessee or the mortgagee of this lot, not have respected my
command in this my addition (Codicil), Maria Marlina Coscolluela
xxx 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
FOURTH
give the ONE HUNDRED (100) piculs of sugar until Maria Marlina
shall die. I further command in this my addition (Codicil) that my
(a)....It is also my command, in this my addition (Codicil), that heir and his heirs of this Lot No. 1392, that they will obey and
should I die and Jorge Rabadilla shall have already received the follow that should they decide to sell, lease, mortgage, they
ownership of the said Lot No. 1392 of the Bacolod Cadastre, cannot negotiate with others than my near descendants and my
covered by Transfer Certificate of Title No. RT-4002 (10942), and sister."4
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
Pursuant to the same Codicil, Lot No. 1392 was transferred to the
dies, every year to give to Maria Marlina Coscolluela y Belleza,
deceased, Dr. Jorge Rabadilla, and Transfer Certificate of Title
Seventy (75) (sic) piculs of Export sugar and Twenty Five (25)
No. 44498 thereto issued in his name.
piculs of Domestic sugar, until the said Maria Marlina Coscolluela
y Belleza dies.
Dr. Jorge Rabadilla died in 1983 and was survived by his wife
Rufina and children Johnny (petitioner), Aurora, Ofelia and
FIFTH
Zenaida, all surnamed Rabadilla.
(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot
On August 21, 1989, Maria Marlena Coscolluela y Belleza
No. 1392 of the Bacolod Cadastre, covered by Transfer
Villacarlos brought a complaint, docketed as Civil Case No. 5588,
Certificate of Title No. RT-4002 (10492), shall have the obligation
before Branch 52 of the Regional Trial Court in Bacolod City,
to still give yearly, the sugar as specified in the Fourth paragraph
against the above-mentioned heirs of Dr. Jorge Rabadilla, to
Page 34 of 64

enforce the provisions of subject Codicil. The Complaint alleged On November 15, 1998, the plaintiff (private respondent) and a
that the defendant-heirs violated the conditions of the Codicil, in certain Alan Azurin, son-in-law of the herein petitioner who was
that: lessee of the property and acting as attorney-in-fact of defendant-
heirs, arrived at an amicable settlement and entered into a
1. Lot No. 1392 was mortgaged to the Philippine National Memorandum of Agreement on the obligation to deliver one
Bank and the Republic Planters Bank in disregard of the hundred piculs of sugar, to the following effect:
testatrix's specific instruction to sell, lease, or mortgage
only to the near descendants and sister of the testatrix. "That for crop year 1988-89, the annuity mentioned in Entry No.
49074 of TCT No. 44489 will be delivered not later than January
2. Defendant-heirs failed to comply with their obligation to of 1989, more specifically, to wit:
deliver one hundred (100) piculs of sugar (75 piculs
export sugar and 25 piculs domestic sugar) to plaintiff 75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in
Maria Marlena Coscolluela y Belleza from sugar crop any of our names, Mary Rose Rabadilla y Azurin or Alan Azurin,
years 1985 up to the filing of the complaint as mandated during December of each sugar crop year, in Azucar Sugar
by the Codicil, despite repeated demands for compliance. Central; and, this is considered compliance of the annuity as
mentioned, and in the same manner will compliance of the
3. The banks failed to comply with the 6th paragraph of annuity be in the next succeeding crop years.
the Codicil which provided that in case of the sale, lease,
or mortgage of the property, the buyer, lessee, or That the annuity above stated for crop year 1985-86, 1986-87,
mortgagee shall likewise have the obligation to deliver and 1987-88, will be complied in cash equivalent of the number of
100 piculs of sugar per crop year to herein private piculs as mentioned therein and which is as herein agreed upon,
respondent. taking into consideration the composite price of sugar during each
sugar crop year, which is in the total amount of ONE HUNDRED
The plaintiff then prayed that judgment be rendered ordering FIVE THOUSAND PESOS (P105,000.00).
defendant-heirs to reconvey/return-Lot No. 1392 to the surviving
heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 That the above-mentioned amount will be paid or delivered on a
in the name of the deceased, Dr. Jorge Rabadilla, and the staggered cash installment, payable on or before the end of
issuance of a new certificate of title in the names of the surviving December of every sugar crop year, to wit:
heirs of the late Aleja Belleza.
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY
On February 26, 1990, the defendant-heirs were declared in (P26,250.00) Pesos, payable on or before December of crop year
default but on March 28, 1990 the Order of Default was lifted, with 1988-89;
respect to defendant Johnny S. Rabadilla, who filed his Answer,
accordingly. For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY
(P26,250.00) Pesos, payable on or before December of crop year
During the pre-trial, the parties admitted that: 1989-90;
Page 35 of 64

For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY "Therefore, the evidence on record having established plaintiff-
(P26,250.00) Pesos, payable on or before December of crop year appellant's right to receive 100 piculs of sugar annually out of the
1990-91; and produce of Lot No. 1392; defendants-appellee's obligation under
Aleja Belleza's codicil, as heirs of the modal heir, Jorge Rabadilla,
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY to deliver such amount of sugar to plaintiff-appellant; defendants-
(P26,250.00) Pesos, payable on or before December of crop year appellee's admitted non-compliance with said obligation since
1991-92."5 1985; and, the punitive consequences enjoined by both the
codicil and the Civil Code, of seizure of Lot No. 1392 and its
However, there was no compliance with the aforesaid reversion to the estate of Aleja Belleza in case of such non-
Memorandum of Agreement except for a partial delivery of 50.80 compliance, this Court deems it proper to order the reconveyance
piculs of sugar corresponding to sugar crop year 1988 -1989. 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,
On July 22, 1991, the Regional Trial Court came out with a
secure the appointment of an administrator, and distribute Lot No.
decision, dismissing the complaint and disposing as follows:
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
"WHEREFORE, in the light of the aforegoing findings, the Court of sugar per year out of the produce of Lot No. 1392 until she
finds that the action is prematurely filed as no cause of action dies.
against the defendants has as yet arose in favor of plaintiff. While
there maybe the non-performance of the command as mandated
Accordingly, the decision appealed from is SET ASIDE and
exaction from them simply because they are the children of Jorge
another one entered ordering defendants-appellees, as heirs of
Rabadilla, the title holder/owner of the lot in question, does not
Jorge Rabadilla, to reconvey title over Lot No. 1392, together with
warrant the filing of the present complaint. The remedy at bar
its fruits and interests, to the estate of Aleja Belleza.
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 SO ORDERED."7
in order to give full meaning and semblance to her claim under
the Codicil. Dissatisfied with the aforesaid disposition by the Court of
Appeals, petitioner found his way to this Court via the present
In the light of the aforegoing findings, the Complaint being petition, contending that the Court of Appeals erred in ordering
prematurely filed is DISMISSED without prejudice. 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
SO ORDERED."6
institution within the purview of Article 882 of the New Civil Code.
On appeal by plaintiff, the First Division of the Court of Appeals
The petition is not impressed with merit.
reversed the decision of the trial court; ratiocinating and ordering
thus:
Page 36 of 64

Petitioner contends that the Court of Appeals erred in resolving compulsory heirs of the instituted heir, Dr. Jorge Rabadilla,
the appeal in accordance with Article 882 of the New Civil Code succeeded the latter by operation of law, without need of further
on modal institutions and in deviating from the sole issue raised proceedings, and the successional rights were transmitted to
which is the absence or prematurity of the cause of action. them from the moment of death of the decedent, Dr. Jorge
Petitioner maintains that Article 882 does not find application as Rabadilla.
there was no modal institution and the testatrix intended a mere
simple substitution - i.e. the instituted heir, Dr. Jorge Rabadilla, Under Article 776 of the New Civil Code, inheritance includes all
was to be substituted by the testatrix's "near descendants" should the property, rights and obligations of a person, not extinguished
the obligation to deliver the fruits to herein private respondent be by his death. Conformably, whatever rights Dr. Jorge Rabadilla
not complied with. And since the testatrix died single and without had by virtue of subject Codicil were transmitted to his forced
issue, there can be no valid substitution and such testamentary heirs, at the time of his death. And since obligations not
provision cannot be given any effect. extinguished by death also form part of the estate of the
decedent; corollarily, the obligations imposed by the Codicil on
The petitioner theorizes further that there can be no valid the deceased Dr. Jorge Rabadilla, were likewise transmitted to
substitution for the reason that the substituted heirs are not his compulsory heirs upon his death.
definite, as the substituted heirs are merely referred to as "near
descendants" without a definite identity or reference as to who In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to
are the "near descendants" and therefore, under Articles 843 8 and Dr. Jorge Rabadilla, subject to the condition that the usufruct
8459 of the New Civil Code, the substitution should be deemed as thereof would be delivered to the herein private respondent every
not written. year. Upon the death of Dr. Jorge Rabadilla, his compulsory heirs
succeeded to his rights and title over the said property, and they
The contentions of petitioner are untenable. Contrary to his also assumed his (decedent's) obligation to deliver the fruits of
supposition that the Court of Appeals deviated from the issue the lot involved to herein private respondent. Such obligation of
posed before it, which was the propriety of the dismissal of the the instituted heir reciprocally corresponds to the right of private
complaint on the ground of prematurity of cause of action, there respondent over the usufruct, the fulfillment or performance of
was no such deviation. The Court of Appeals found that the which is now being demanded by the latter through the institution
private respondent had a cause of action against the petitioner. of the case at bar. Therefore, private respondent has a cause of
The disquisition made on modal institution was, precisely, to action against petitioner and the trial court erred in dismissing the
stress that the private respondent had a legally demandable right complaint below.
against the petitioner pursuant to subject Codicil; on which issue
the Court of Appeals ruled in accordance with law. Petitioner also theorizes that Article 882 of the New Civil Code on
modal institutions is not applicable because what the testatrix
It is a general rule under the law on succession that successional intended was a substitution - Dr. Jorge Rabadilla was to be
rights are transmitted from the moment of death of the substituted by the testatrix's near descendants should there be
decedent10 and compulsory heirs are called to succeed by noncompliance with the obligation to deliver the piculs of sugar to
operation of law. The legitimate children and descendants, in private respondent.
relation to their legitimate parents, and the widow or widower, are
compulsory heirs.11 Thus, the petitioner, his mother and sisters, as Again, the contention is without merit.
Page 37 of 64

Substitution is the designation by the testator of a person or Another important element of a fideicommissary substitution is
persons to take the place of the heir or heirs first instituted. Under also missing here. Under Article 863, the second heir or the
substitutions in general, the testator may either (1) provide for the fideicommissary to whom the property is transmitted must not be
designation of another heir to whom the property shall pass in beyond one degree from the first heir or the fiduciary. A
case the original heir should die before him/her, renounce the fideicommissary substitution is therefore, void if the first heir is not
inheritance or be incapacitated to inherit, as in a simple related by first degree to the second heir.17 In the case under
substitution,12 or (2) leave his/her property to one person with the scrutiny, the near descendants are not at all related to the
express charge that it be transmitted subsequently to another or instituted heir, Dr. Jorge Rabadilla.
others, as in a fideicommissary substitution.13 The Codicil sued
upon contemplates neither of the two. 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
In simple substitutions, the second heir takes the inheritance in institution and therefore, Article 882 of the New Civil Code is the
default of the first heir by reason of incapacity, predecease or provision of law in point. Articles 882 and 883 of the New Civil
renunciation.14 In the case under consideration, the provisions of Code provide:
subject Codicil do not provide that should Dr. Jorge Rabadilla
default due to predecease, incapacity or renunciation, the Art. 882. The statement of the object of the institution or the
testatrix's near descendants would substitute him. What the application of the property left by the testator, or the charge
Codicil provides is that, should Dr. Jorge Rabadilla or his heirs not imposed on him, shall not be considered as a condition unless it
fulfill the conditions imposed in the Codicil, the property referred appears that such was his intention.
to shall be seized and turned over to the testatrix's near
descendants. That which has been left in this manner may be claimed at once
provided that the instituted heir or his heirs give security for
Neither is there a fideicommissary substitution here and on this compliance with the wishes of the testator and for the return of
point, petitioner is correct. In a fideicommissary substitution, the anything he or they may receive, together with its fruits and
first heir is strictly mandated to preserve the property and to interests, if he or they should disregard this obligation.
transmit the same later to the second heir.15 In the case under
consideration, the instituted heir is in fact allowed under the Art. 883. When without the fault of the heir, an institution referred
Codicil to alienate the property provided the negotiation is with to in the preceding article cannot take effect in the exact manner
the near descendants or the sister of the testatrix. Thus, a very stated by the testator, it shall be complied with in a manner most
important element of a fideicommissary substitution is lacking; the analogous to and in conformity with his wishes.
obligation clearly imposing upon the first heir the preservation of
the property and its transmission to the second heir. "Without this
The institution of an heir in the manner prescribed in Article 882 is
obligation to preserve clearly imposed by the testator in his will,
what is known in the law of succession as an institucion sub
there is no fideicommissary substitution."16 Also, the near
modo or a modal institution. In a modal institution, the testator
descendants' right to inherit from the testatrix is not definite. The
states (1) the object of the institution, (2) the purpose or
property will only pass to them should Dr. Jorge Rabadilla or his
application of the property left by the testator, or (3) the charge
heirs not fulfill the obligation to deliver part of the usufruct to
imposed by the testator upon the heir.18 A "mode" imposes an
private respondent.
Page 38 of 64

obligation upon the heir or legatee but it does not affect the In the interpretation of Wills, when an uncertainty arises on the
efficacy of his rights to the succession.19 On the other hand, in a face of the Will, as to the application of any of its provisions, the
conditional testamentary disposition, the condition must happen testator's intention is to be ascertained from the words of the Will,
or be fulfilled in order for the heir to be entitled to succeed the taking into consideration the circumstances under which it was
testator. The condition suspends but does not obligate; and the made.23 Such construction as will sustain and uphold the Will in all
mode obligates but does not suspend.20 To some extent, it is its parts must be adopted.24
similar to a resolutory condition.21
Subject Codicil provides that the instituted heir is under obligation
From the provisions of the Codicil litigated upon, it can be to deliver One Hundred (100) piculs of sugar yearly to Marlena
gleaned unerringly that the testatrix intended that subject property Belleza Coscuella. Such obligation is imposed on the instituted
be inherited by Dr. Jorge Rabadilla. It is likewise clearly worded heir, Dr. Jorge Rabadilla, his heirs, and their buyer, lessee, or
that the testatrix imposed an obligation on the said instituted heir mortgagee should they sell, lease, mortgage or otherwise
and his successors-in-interest to deliver one hundred piculs of negotiate the property involved. The Codicil further provides that
sugar to the herein private respondent, Marlena Coscolluela in the event that the obligation to deliver the sugar is not
Belleza, during the lifetime of the latter. However, the testatrix did respected, Marlena Belleza Coscuella shall seize the property
not make Dr. Jorge Rabadilla's inheritance and the effectivity of and turn it over to the testatrix's near descendants. The non-
his institution as a devisee, dependent on the performance of the performance of the said obligation is thus with the sanction of
said obligation. It is clear, though, that should the obligation be seizure of the property and reversion thereof to the testatrix's
not complied with, the property shall be turned over to the near descendants. Since the said obligation is clearly imposed by
testatrix's near descendants. The manner of institution of Dr. the testatrix, not only on the instituted heir but also on his
Jorge Rabadilla under subject Codicil is evidently modal in nature successors-in-interest, the sanction imposed by the testatrix in
because it imposes a charge upon the instituted heir without, case of non-fulfillment of said obligation should equally apply to
however, affecting the efficacy of such institution. the instituted heir and his successors-in-interest.

Then too, since testamentary dispositions are generally acts of Similarly unsustainable is petitioner's submission that by virtue of
liberality, an obligation imposed upon the heir should not be the amicable settlement, the said obligation imposed by the
considered a condition unless it clearly appears from the Will Codicil has been assumed by the lessee, and whatever obligation
itself that such was the intention of the testator. In case of doubt, petitioner had become the obligation of the lessee; that petitioner
the institution should be considered as modal and not is deemed to have made a substantial and constructive
conditional.22 compliance of his obligation through the consummated settlement
between the lessee and the private respondent, and having
Neither is there tenability in the other contention of petitioner that consummated a settlement with the petitioner, the recourse of the
the private respondent has only a right of usufruct but not the private respondent is the fulfillment of the obligation under the
right to seize the property itself from the instituted heir because amicable settlement and not the seizure of subject property.
the right to seize was expressly limited to violations by the buyer,
lessee or mortgagee. 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
Page 39 of 64

person intends how his properties be disposed, the wishes and Republic of the Philippines
desires of the testator must be strictly followed. Thus, a Will SUPREME COURT
cannot be the subject of a compromise agreement which would Manila
thereby defeat the very purpose of making a Will.
THIRD DIVISION
WHEREFORE, the petition is hereby DISMISSED and the
decision of the Court of Appeals, dated December 23, 1993, in G.R. No. 104482 January 22, 1996
CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to
costs BELINDA TAEDO, for herself and in representation of her
brothers and sisters, and TEOFILA CORPUZ TAEDO,
SO ORDERED. 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.
Page 40 of 64

The Facts 1978, stating that it was his desire that whatever inheritance
Lazaro would receive from him should be given to his (Lazaro's)
On October 20, 1962, Lazardo Taedo executed a notarized deed children (Exh. A); (2) a typewritten document dated March 10,
of absolute sale in favor of his eldest brother, Ricardo Taedo, 1979 signed by Lazaro in the presence of two witnesses, wherein
and the latter's wife, Teresita Barera, private respondents herein, he confirmed that he would voluntarily abide by the wishes of his
whereby he conveyed to the latter in consideration of P1,500.00, father, Matias, to give to his (Lazaro's) children all the property he
"one hectare of whatever share I shall have over Lot No. 191 of would inherit from the latter (Exh. B); and (3) a letter dated
the cadastral survey of Gerona, Province of Tarlac and covered January 1, 1980 of Lazaro to his daughter, Carmela, stating that
by Title T-13829 of the Register of Deeds of Tarlac", the said his share in the extrajudicial settlement of the estate of his father
property being his "future inheritance" from his parents (Exh. 1). was intended for his children, petitioners herein (Exh. C).
Upon the death of his father Matias, Lazaro executed an "Affidavit
of Conformity" dated February 28, 1980 (Exh. 3) to "re-affirm, Private respondents, however presented in evidence a "Deed of
respect, acknowledge and validate the sale I made in 1962." On Revocation of a Deed of Sale" dated March 12, 1981 (Exh. 6),
January 13, 1981, Lazaro executed another notarized deed of wherein Lazaro revoked the sale in favor of petitioners for the
sale in favor of private respondents covering his "undivided ONE reason that it was "simulated or fictitious without any
TWELVE (1/12) of a parcel of land known as Lot 191 . . . " (Exh. consideration whatsoever".
4). He acknowledged therein his receipt of P10,000.00 as
consideration therefor. In February 1981, Ricardo learned that Shortly after the case a quo was filed, Lazaro executed a sworn
Lazaro sold the same property to his children, petitioners herein, statement (Exh. G) which virtually repudiated the contents of the
through a deed of sale dated December 29, 1980 (Exh. E). On Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of
June 7, 1982, private respondents recorded the Deed of Sale Sale (Exh. 4) in favor of private respondents. However, Lazaro
(Exh. 4) in their favor in the Registry of Deeds and the testified that he sold the property to Ricardo, and that it was a
corresponding entry was made in Transfer Certificate of Title No. lawyer who induced him to execute a deed of sale in favor of his
166451 (Exh. 5). children after giving him five pesos (P5.00) to buy a "drink" (TSN
September 18, 1985, pp. 204-205).
Petitioners on July 16, 1982 filed a complaint for rescission (plus
damages) of the deeds of sale executed by Lazaro in favor of The trial court decided in favor of private respondents, holding
private respondents covering the property inherited by Lazaro that petitioners failed "to adduce a proponderance of evidence to
from his father. support (their) claim." On appeal, the Court of Appeals affirmed
the decision of the trial court, ruling that the Deed of Sale dated
Petitioners claimed that their father, Lazaro, executed an January 13, 1981 (Exh. 9) was valid and that its registration in
"Absolute Deed of Sale" dated December 29, 1980 (Exit. E). good faith vested title in said respondents.
Conveying to his ten children his allotted portion tinder the
extrajudicial partition executed by the heirs of Matias, which deed The Issues
included the land in litigation (Lot 191).
Petitioners raised the following "errors" in the respondent Court,
Petitioners also presented in evidence: (1) a private writing which they also now allege in the instant Petition:
purportedly prepared and signed by Matias dated December 28,
Page 41 of 64

I. The trial court erred in concluding that the Contract of The Court's Ruling
Sale of October 20, 1962 (Exhibit 7, Answer) is merely
voidable or annulable and not void ab initio pursuant to At the outset, let it be clear that the "errors" which are reviewable
paragraph 2 of Article 1347 of the New Civil Code by this Court in this petition for review on certiorariare only those
involving as it does a "future inheritance". allegedly committed by the respondent Court of Appeals and not
directly those of the trial court, which is not a party here. The
II. The trial court erred in holding that defendants- "assignment of errors" in the petition quoted above are therefore
appellees acted in good faith in registering the deed of totally misplaced, and for that reason, the petition should be
sale of January 13, 1981 (Exhibit 9) with the Register of dismissed. But in order to give the parties substantial justice we
Deeds of Tarlac and therefore ownership of the land in have decided to delve into the issues as above re-stated. The
question passed on to defendants-appellees. errors attributed by petitioners to the latter (trial) court will be
discussed only insofar as they are relevant to the appellate
III. The trial court erred in ignoring and failing to consider court's assailed Decision and Resolution.
the testimonial and documentary evidence of plaintiffs-
appellants which clearly established by preponderance of The sale made in 1962 involving future inheritance is not really at
evidence that they are indeed the legitimate and lawful issue here. In context, the assailed Decision conceded "it may be
owners of the property in question. legally correct that a contract of sale of anticipated future
inheritance is null and void."3
IV. The decision is contrary to law and the facts of the
case and the conclusions drawn from the established But to remove all doubts, we hereby categorically rule that,
facts are illogical and off-tangent. pursuant to Article 1347 of the Civil Code, "(n)o contract may be
entered into upon a future inheritance except in cases expressly
From the foregoing, the issues may be restated as follows: authorized by law."

1. Is the sale of a future inheritance valid? Consequently, said contract made in 1962 is not valid and cannot
be the source of any right nor the creator of any obligation
2. Was the subsequent execution on January 13, 1981 between the parties.
(and registration with the Registry of Property) of a deed
of sale covering the same property to the same buyers Hence, the "affidavit of conformity" dated February 28, 1980,
valid? insofar as it sought to validate or ratify the 1962 sale, is also
useless and, in the words of the respondent Court, "suffers from
3. May this Court review the findings of the respondent the same infirmity." Even private respondents in their
Court (a) holding that the buyers acted in good faith in memorandum4 concede this.
registering the said subsequent deed of sale and (b) in
"failing to consider petitioners' evidence"? Are the However, the documents that are critical to the resolution of this
conclusions of the respondent Court "illogical and off- case are: (a) the deed of sale of January 13, 1981 in favor of
tangent"? private respondents covering Lazaro's undivided inheritance of
Page 42 of 64

one-twelfth (1/12) share in Lot No. 191, which was subsequently possession; and, in the absence thereof, to the person
registered on June 7, 1982; and (b) the deed of sale dated who presents the oldest title, provided there is good faith.
December 29, 1980 in favor of petitioners covering the same
property. These two documents were executed after the death of The property in question is land, an immovable, and following the
Matias (and his spouse) and after a deed of extra-judicial above-quoted law, ownership shall belong to the buyer who in
settlement of his (Matias') estate was executed, thus vesting in good faith registers it first in the registry of property. Thus,
Lazaro actual title over said property. In other words, these although the deed of sale in favor of private respondents was
dispositions, though conflicting, were no longer infected with the later than the one in favor of petitioners, ownership would vest in
infirmities of the 1962 sale. 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 what was sold on January 13, 1981 was
only one-half hectare out of Lot No. 191, citing as authority the Petitioners contend that they were in possession of the property
trial court's decision. As earlier pointed out, what is on review in and that private respondents never took possession thereof. As
these proceedings by this Court is the Court of Appeals' decision between two purchasers, the one who registered the sale in his
which correctly identified the subject matter of the January 13, favor has a preferred right over the other who has not registered
1981 sale to be the entire undivided 1/12 share of Lazaro in Lot his title, even if the latter is in actual possession of the immovable
No. 191 and which is the same property disposed of on property.5
December 29, 1980 in favor of petitioners.
As to third issue, while petitioners conceded the fact of
Critical in determining which of these two deeds should be given registration, they nevertheless contended that it was done in bad
effect is the registration of the sale in favor of private respondents faith. On this issue, the respondent Court ruled;
with the register of deeds on June 7, 1982.
Under the second assignment of error, plaintiffs-
Article 1544 of the Civil Code governs the preferential rights of appellants contend that defendants-appellees acted in
vendees in cases of multiple sales, as follows: bad faith when they registered the Deed of Sale in their
favor as appellee Ricardo already knew of the execution
Art. 1544. If the same thing should have been sold to of the deed of sale in favor of the plaintiffs; appellants cite
different vendees, the ownership shall be transferred to the testimony of plaintiff Belinda Taedo to the effect that
the person who may have first taken possession thereof defendant Ricardo Taedo called her up on January 4 or
in good faith, if it should be movable property. 5, 1981 to tell her that he was already the owner of the
land in question "but the contract of sale between our
Should it be immovable property, the ownership shall father and us were (sic) already consumated" (pp. 9-10,
belong to the person acquiring it who in good faith first tsn, January 6, 1984). This testimony is obviously self-
recorded it in the Registry of Property. serving, and because it was a telephone conversation,
the deed of sale dated December 29, 1980 was not
Should there be no inscription, the ownership shall pertain shown; Belinda merely told her uncle that there was
to the person who in good faith was first in the already a document showing that plaintiffs are the owners
(p. 80). Ricardo Taedo controverted this and testified
Page 43 of 64

that he learned for the first time of the deed of sale Taedo . . ." and that respondent Ricardo Taedo
executed by Lazaro in favor of his children "about a "exercised moral ascendancy over his younger brother he
month or sometime in February 1981" (p. 111, tsn, Nov. being the eldest brother and who reached fourth year
28, 1984). . . .6 college of law and at one time a former Vice-Governor of
Tarlac, while his younger brother only attained first year
The respondent Court, reviewing the trial court's findings, refused high school . . . ;
to overturn the latter's assessment of the testimonial evidence, as
follows; 5. The respondent Court erred in not giving credence to
petitioners' evidence, especially Lazaro
We are not prepared to set aside the finding of the lower Taedo's Sinumpaang Salaysay dated July 27, 1982
court upholding Ricardo Taedo's testimony, as it involves stating that Ricardo Taedo deceived the former in
a matter of credibility of witnesses which the trial judge, executing the deed of sale in favor of private respondents.
who presided at the hearing, was in a better position to
resolve. (Court of Appeals' Decision, p. 6.) To be sure, there are indeed many conflicting documents and
testimonies as well as arguments over their probative value and
In this connection, we note the tenacious allegations made by significance. Suffice it to say, however, that all the above
petitioners, both in their basic petition and in their memorandum, contentions involve questions of fact, appreciation of evidence
as follows: and credibility of witnesses, which are not proper in this review. It
is well-settled that the Supreme Court is not a trier of facts. In
1. The respondent Court allegedly ignored the claimed petitions for review under Rule 45 of the Revised Rules of Court,
fact that respondent Ricardo "by fraud and deceit and with only questions of law may be raised and passed upon. Absent
foreknowledge" that the property in question had already any whimsical or capricious exercise of judgment, and unless the
been sold to petitioners, made Lazaro execute the deed lack of any basis for the conclusions made by the lower courts be
of January 13, 1981; 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
2. There is allegedly adequate evidence to show that only
courts, and that the said courts tended to give more credence to
1/2 of the purchase price of P10,000.00 was paid at the
the evidence presented by private respondents. But this in itself is
time of the execution of the deed of sale, contrary to the
not a reason for setting aside such findings. We are far from
written acknowledgment, thus showing bad faith;
convinced that both courts gravely abused their respective
authorities and judicial prerogatives.
3. There is allegedly sufficient evidence showing that the
deed of revocation of the sale in favor of petitioners "was
As held in the recent case of Chua Tiong Tay vs. Court of
tainted with fraud or deceit."
Appeals and Goldrock Construction and Development Corp.7
4. There is allegedly enough evidence to show that
The Court has consistently held that the factual findings of the
private respondents "took undue advantage over the
trial court, as well as the Court of Appeals, are final and
weakness and unschooled and pitiful situation of Lazaro
conclusive and may not be reviewed on appeal. Among the
Page 44 of 64

exceptional circumstances where a reassessment of facts found Republic of the Philippines


by the lower courts is allowed are when the conclusion is a SUPREME COURT
finding grounded entirely on speculation, surmises or conjectures; Manila
when the inference made is manifestly absurd, mistaken or
impossible; when there is grave abuse of discretion in the THIRD DIVISION
appreciation of facts; when the judgment is premised on a
misapprehension of facts; when the findings went beyond the G.R. No. 169129 March 28, 2007
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
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS,
bench, we find none of the above grounds present to justify the
SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS,
re-evaluation of the findings of fact made by the courts below.
ERNESTO F. SANTOS, and TADEO F. SANTOS, Petitioners,
vs.
In the same vein, the ruling in the recent case of South Sea SPS. JOSE LUMBAO and PROSERFINA
Surety and Insurance Company, Inc. vs. Hon. Court of Appeals, LUMBAO, Respondents.
et al.8 is equally applicable to the present case:
DECISION
We see no valid reason to discard the factual conclusions
of the appellate court. . . . (I)t is not the function of this
CHICO-NAZARIO, J.:
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 Before this Court is a Petition for Review on Certiorari under Rule
trial court and the appellate court on the matter coincide. 45 of the 1997 Revised Rules of Civil Procedure seeking to annul
(emphasis supplied) 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
WHEREFORE, the petition is DENIED and the assailed Decision
Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F.
of the Court of Appeals is AFFIRMED. No Costs.
Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June
2005 and 29 July 2005, respectively, which granted the appeal
SO ORDERED. 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.
Page 45 of 64

Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all deliver the title to the subject property because the entire property
surnamed Santos, are the legitimate and surviving heirs of the inherited by her and her co-heirs from Maria had not yet been
late Rita Catoc Santos (Rita), who died on 20 October 1985. The partitioned.
other petitioners Esperanza Lati and Lagrimas Santos are the
daughters-in-law of Rita. On 2 May 1986, the Spouses Lumbao claimed that petitioners,
acting fraudulently and in conspiracy with one another, executed
Herein respondents Spouses Jose Lumbao and Proserfina a Deed of Extrajudicial Settlement,6 adjudicating and partitioning
Lumbao are the alleged owners of the 107-square meter lot among themselves and the other heirs, the estate left by Maria,
(subject property), which they purportedly bought from Rita during which included the subject property already sold to respondents
her lifetime. Spouses Lumbao and now covered by TCT No. 817297 of the
Registry of Deeds of Pasig City.
The facts of the present case are as follows:
On 15 June 1992, respondents Spouses Lumbao, through
On two separate occasions during her lifetime, Rita sold to counsel, sent a formal demand letter8 to petitioners but despite
respondents Spouses Lumbao the subject property which is a receipt of such demand letter, petitioners still failed and refused to
part of her share in the estate of her deceased mother, Maria reconvey the subject property to the respondents Spouses
Catoc (Maria), who died intestate on 19 September 1978. On the Lumbao. Consequently, the latter filed a Complaint for
first occasion, Rita sold 100 square meters of her inchoate share Reconveyance with Damages9 before the RTC of Pasig City.
in her mothers estate through a document denominated as
"Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses Petitioners filed their Answer denying the allegations that the
Lumbao claimed the execution of the aforesaid document was subject property had been sold to the respondents Spouses
witnessed by petitioners Virgilio and Tadeo, as shown by their Lumbao. They likewise denied that the Deed of Extrajudicial
signatures affixed therein. On the second occasion, an additional Settlement had been fraudulently executed because the same
seven square meters was added to the land as evidenced by a was duly published as required by law. On the contrary, they
document also denominated as "Bilihan ng Lupa," dated 9 prayed for the dismissal of the Complaint for lack of cause of
January 1981.5 action because respondents Spouses Lumbao failed to comply
with the Revised Katarungang Pambarangay Law under Republic
After acquiring the subject property, respondents Spouses Act No. 7160, otherwise known as the Local Government Code of
Lumbao took actual possession thereof and erected thereon a 1991, which repealed Presidential Decree No. 150810 requiring
house which they have been occupying as exclusive owners up first resort to barangay conciliation.
to the present. As the exclusive owners of the subject property,
respondents Spouses Lumbao made several verbal demands Respondents Spouses Lumbao, with leave of court, amended
upon Rita, during her lifetime, and thereafter upon herein their Complaint because they discovered that on 16 February
petitioners, for them to execute the necessary documents to 1990, without their knowledge, petitioners executed a Deed of
effect the issuance of a separate title in favor of respondents Real Estate Mortgage in favor of Julieta S. Esplana for the sum
Spouses Lumbao insofar as the subject property is concerned. of P30,000.00. The said Deed of Real Estate Mortgage was
Respondents Spouses Lumbao alleged that prior to her death, annotated at the back of TCT No. PT-81729 on 26 April 1991.
Rita informed respondent Proserfina Lumbao she could not Also, in answer to the allegation of the petitioners that they failed
Page 46 of 64

to comply with the mandate of the Revised Katarungang Dissatisfied, petitioners filed a Motion for Reconsideration of the
Pambarangay Law, respondents Spouses Lumbao said that the aforesaid Decision but it was denied in the Resolution of the
Complaint was filed directly in court in order that prescription or appellate court dated 29 July 2005 for lack of merit.
the Statute of Limitations may not set in.
Hence, this Petition.
During the trial, respondents Spouses Lumbao presented
Proserfina Lumbao and Carolina Morales as their witnesses, The grounds relied upon by the petitioners are the following:
while the petitioners presented only the testimony of petitioner
Virgilio. I. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN REVERSING THE DECISION OF THE TRIAL
The trial court rendered a Decision on 17 June 1998, the COURT, THEREBY CREATING A VARIANCE ON THE
dispositive portion of which reads as follows: FINDINGS OF FACTS OF TWO COURTS.

Premises considered, the instant complaint is hereby denied for II. THE APPELLATE COURT COMMITTED A REVERSIBLE
lack of merit. ERROR IN ORDERING THE PETITIONERS TO RECONVEY
THE SUBJECT [PROPERTY] TO THE RESPONDENTS
Considering that [petitioners] have incurred expenses in order to [SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE
protect their interest, [respondents spouses Lumbao] are hereby GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE
directed to pay [petitioners], to wit: 1) the amount of P30,000.00 LOT ALLEGEDLY SOLD TO THEM.
as attorneys fees and litigation expenses, and 2) costs of the
suit.11 III. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN
Aggrieved, respondents Spouses Lumbao appealed to the Court GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL
of Appeals. On 8 June 2005, the appellate court rendered a SETTLEMENT" DATED [2 MAY 1986].
Decision, thus:
IV. THE APPELLATE COURT COMMITTED A REVERSIBLE
WHEREFORE, premises considered, the present appeal is ERROR IN NOT FINDING THAT PETITIONERS ARE NOT
hereby GRANTED. The appealed Decision dated June 17, 1998 LEGALLY BOUND TO COMPLY WITH THE SUPPOSED
of the Regional Trial Court of Pasig City, Branch 69 in Civil Case BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9
No. 62175 is hereby REVERSED and SET ASIDE. A new JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY
judgment is hereby entered ordering [petitioners] to reconvey 107 THE LATE RITA CATOC.
square meters of the subject [property] covered by TCT No. PT-
81729 of the Registry of Deeds of Pasig City, Metro Manila, and V. THE APPELLATE COURT COMMITTED A REVERSIBLE
to pay to [respondents spouses Lumbao] the sum of P30,000.00 ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES
for attorneys fees and litigation expenses. LUMBAOS] ACTION FOR RECONVEYANCE WITH DAMAGES
CANNOT BE SUPPORTED WITH AN UNENFORCEABLE
No pronouncement as to costs.12
Page 47 of 64

DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17 Settlement was published in a newspaper of general circulation to
AUGUST 1979] AND [9 JANUARY 1981]. give notice to all creditors of the estate subject of partition to
contest the same within the period prescribed by law. Since no
VI. THE APPELLATE COURT COMMITTED A REVERSIBLE claimant appeared to interpose a claim within the period allowed
ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES by law, a title to the subject property was then issued in favor of
LUMBAOS] COMPLAINT FOR RECONVEYANCE IS the petitioners; hence, they are considered as holders in good
DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE faith and therefore cannot be barred from entering into any
MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act subsequent transactions involving the subject property.
No. 7160.
Petitioners also contend that they are not bound by the
VII. THE APPELLATE COURT COMMITTED A REVERSIBLE documents denominated as "Bilihan ng Lupa" because the same
ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES were null and void for the following reasons: 1) for being falsified
LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS documents because one of those documents made it appear that
CLAIM FOR DAMAGES AND ATTORNEY[]S FEES. petitioners Virgilio and Tadeo were witnesses to its execution and
that they appeared personally before the notary public, when in
Petitioners ask this Court to scrutinize the evidence presented in truth and in fact they did not; 2) the identities of the properties in
this case, because they claim that the factual findings of the trial the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981
court and the appellate court are conflicting. They allege that the in relation to the subject property in litigation were not established
findings of fact by the trial court revealed that petitioners Virgilio by the evidence presented by the respondents Spouses Lumbao;
and Tadeo did not witness the execution of the documents known 3) the right of the respondents Spouses Lumbao to lay their claim
as "Bilihan ng Lupa"; hence, this finding runs counter to the over the subject property had already been barred through
conclusion made by the appellate court. And even assuming that estoppel by laches; and 4) the respondents Spouses Lumbaos
they were witnesses to the aforesaid documents, still, claim over the subject property had already prescribed.
respondents Spouses Lumbao were not entitled to the
reconveyance of the subject property because they were guilty of Finally, petitioners claim that the Complaint for Reconveyance
laches for their failure to assert their rights for an unreasonable with Damages filed by respondents Spouses Lumbao was
length of time. Since respondents Spouses Lumbao had slept on dismissible because they failed to comply with the mandate of
their rights for a period of more than 12 years reckoned from the Presidential Decree No. 1508, as amended by Republic Act No.
date of execution of the second "Bilihan ng Lupa," it would be 7160, particularly Section 412 of Republic Act No. 7160.
unjust and unfair to the petitioners if the respondents will be
allowed to recover the subject property. Given the foregoing, the issues presented by the petitioners may
be restated as follows:
Petitioners allege they are in good faith in executing the Deed of
Extrajudicial Settlement because even respondents Spouses I. Whether or not the Complaint for Reconveyance with
Lumbaos witness, Carolina Morales, testified that neither Damages filed by respondents spouses Lumbao is
petitioner Virgilio nor petitioner Tadeo was present during the dismissible for their failure to comply with the mandate of
execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9 the Revised Katarungang Pambarangay Law under R.A.
January 1981. Petitioners affirm that the Deed of Extrajudicial No. 7160.
Page 48 of 64

II. Whether or not the documents known as "Bilihan ng competent jurisdiction from exercising its power of adjudication
Lupa" are valid and enforceable, thus, they can be the over the case before it, where the defendants failed to object to
bases of the respondents spouses Lumbaos action for such exercise of jurisdiction.16
reconveyance with damages.
While it is true that the present case should first be referred to the
III. Whether or not herein petitioners are legally bound to Barangay Lupon for conciliation because the parties involved
comply with the "Bilihan ng Lupa" dated 17 August 1979 herein actually reside in the same city (Pasig City) and the
and 9 January 1981 and consequently, reconvey the dispute between them involves a real property, hence, the said
subject property to herein respondents spouses Lumbao. dispute should have been brought in the city in which the real
property, subject matter of the controversy, is located, which
It is well-settled that in the exercise of the Supreme Courts power happens to be the same city where the contending parties reside.
of review, the court is not a trier of facts and does not normally In the event that respondents Spouses Lumbao failed to comply
undertake the re-examination of the evidence presented by the with the said condition precedent, their Complaint for
contending parties during the trial of the case considering that the Reconveyance with Damages can be dismissed. In this case,
findings of fact of the Court of Appeals are conclusive and binding however, respondents Spouses Lumbaos non-compliance with
on the Court.13 But, the rule is not without exceptions. There are the aforesaid condition precedent cannot be considered fatal.
several recognized exceptions14 in which factual issues may be Although petitioners alleged in their answer that the Complaint for
resolved by this Court. One of these exceptions is when the Reconveyance with Damages filed by respondents spouses
findings of the appellate court are contrary to those of the trial Lumbao should be dismissed for their failure to comply with the
court. This exception is present in the case at bar. condition precedent, which in effect, made the complaint
prematurely instituted and the trial court acquired no jurisdiction
Going to the first issue presented in this case, it is the argument to hear the case, yet, they did not file a Motion to Dismiss the said
of the petitioners that the Complaint for Reconveyance with complaint.
Damages filed by respondents Spouses Lumbao should be
dismissed for failure to comply with the barangay conciliation Emphasis must be given to the fact that the petitioners could
proceedings as mandated by the Revised Katarungang have prevented the trial court from exercising jurisdiction over the
Pambarangay Law under Republic Act No. 7160. This argument case had they filed a Motion to Dismiss. However, instead of
cannot be sustained. doing so, they invoked the very same jurisdiction by filing an
answer seeking an affirmative relief from it. Worse, petitioners
Section 408 of the aforesaid law and Administrative Circular No. actively participated in the trial of the case by presenting their
14-9315 provide that all disputes between parties actually residing own witness and by cross-examining the witnesses presented by
in the same city or municipality are subject to barangay the respondents Spouses Lumbao. It is elementary that the active
conciliation. A prior recourse thereto is a pre-condition before participation of a party in a case pending against him before a
filing a complaint in court or any government offices. Non- court is tantamount to recognition of that courts jurisdiction and a
compliance with the said condition precedent could affect the willingness to abide by the resolution of the case which will bar
sufficiency of the plaintiffs cause of action and make his said party from later on impugning the courts jurisdiction.17 It is
complaint vulnerable to dismissal on ground of lack of cause of also well-settled that the non-referral of a case for barangay
action or prematurity; but the same would not prevent a court of conciliation when so required under the law is not jurisdictional in
Page 49 of 64

nature and may therefore be deemed waived if not raised appearance before the notary public due to the length of time that
seasonably in a motion to dismiss.18 Hence, herein petitioners can had passed. Noticeably, petitioner Virgilio did not categorically
no longer raise the defense of non-compliance with the barangay deny having signed the "Bilihan ng Lupa," dated 17 August 1979
conciliation proceedings to seek the dismissal of the complaint and in support thereof, his testimony in the cross-examination
filed by the respondents Spouses Lumbao, because they already propounded by the counsel of the respondents Spouses Lumbao
waived the said defense when they failed to file a Motion to is quoted hereunder:
Dismiss.
ATTY. CHIU:
As regards the second issue, petitioners maintain that the "Bilihan
ng Lupa," dated 17 August 1979 and 9 January 1981 are null and Q. Now, you said, Mr. WitnessVirgilio Santos, that you dont
void for being falsified documents as it is made to appear that know about this document which was marked as Exhibit "A" for
petitioners Virgilio and Tadeo were present in the execution of the the [respondents spouses Lumbao]?
said documents and that the identities of the properties in those
documents in relation to the subject property has not been ATTY. BUGARING:
established by the evidence of the respondents Spouses
Lumbao. Petitioners also claim that the enforceability of those
The question is misleading, your Honor. Counsel premised the
documents is barred by prescription of action and laches.
question that he does not have any knowledge but not that he
does not know.
It is the petitioners incessant barking that the "Bilihan ng Lupa"
documents dated 17 August 1979 and 9 January 1981 were
ATTY. CHIU:
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 Q. Being you are one of the witnesses of this document? [I]s it
Carolina Morales proved that said petitioners were not present not?
during the execution of the aforementioned documents. This is
specious. WITNESS:

Upon examination of the aforesaid documents, this Court finds A. No, sir.
that in the "Bilihan ng Lupa," dated 17 August 1979, the
signatures of petitioners Virgilio and Tadeo appeared thereon. Q. I am showing to you this document, there is a signature at the
Moreover, in petitioners Answer and Amended Answer to the left hand margin of this document Virgilio Santos, will you please
Complaint for Reconveyance with Damages, both petitioners go over the same and tell the court whose signature is this?
Virgilio and Tadeo made an admission that indeed they acted as
witnesses in the execution of the "Bilihan ng Lupa," dated 17 A. I dont remember, sir, because of the length of time that had
August 1979.19 However, in order to avoid their obligations in the passed.
said "Bilihan ng Lupa," petitioner Virgilio, in his cross-
examination, denied having knowledge of the sale transaction Q. But that is your signature?
and claimed that he could not remember the same as well as his
Page 50 of 64

A. I dont have eyeglasses My signature is different. Tadeo] were not with them during the transaction does not
automatically imply that [petitioners Virgilio and Tadeo] did not at
Q. You never appeared before this notary public Apolinario any time sign as witnesses as to the deed of sale attesting to their
Mangahas? mothers voluntary act of selling a portion of her share in her
deceased mothers property. The rule is that testimony of a
A. I dont remember.20 witness must be considered and calibrated in its entirety and not
by truncated portions thereof or isolated passages therein.24
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 Furthermore, both "Bilihan ng Lupa" documents dated 17 August
an absolute and inflexible rule. An answer is a mere statement of 1979 and 9 January 1981 were duly notarized before a notary
fact which the party filing it expects to prove, but it is not public. It is well-settled that a document acknowledged before a
evidence.21 And in spite of the presence of judicial admissions in a notary public is a public document25that enjoys the presumption of
partys pleading, the trial court is still given leeway to consider regularity. It is a prima facie evidence of the truth of the facts
other evidence presented.22 However, in the case at bar, as the stated therein and a conclusive presumption of its existence and
Court of Appeals mentioned in its Decision, "[herein petitioners] due execution.26 To overcome this presumption, there must be
had not adduced any other evidence to override the admission presented evidence that is clear and convincing. Absent such
made in their [A]nswer that [petitioners Virgilio and Tadeo] evidence, the presumption must be upheld.27 In addition, one who
actually signed the [Bilihan ng Lupa dated 17 August 1979] denies the due execution of a deed where ones signature
except that they were just misled as to the purpose of the appears has the burden of proving that contrary to the recital in
document, x x x."23 Virgilios answers were unsure and quibbled. the jurat, one never appeared before the notary public and
Hence, the general rule that the admissions made by a party in a acknowledged the deed to be a voluntary act. Nonetheless, in the
pleading are binding and conclusive upon him applies in this present case petitioners denials without clear and convincing
case. 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
On the testimony of respondents Spouses Lumbaos witness
the aforesaid "Bilihan ng Lupa" are upheld.
Carolina Morales, this Court adopts the findings made by the
appellate court. Thus -
The defense of petitioners that the identities of the properties
described in the "Bilihan ng Lupa," dated 17 August 1979 and 9
[T]he trial court gave singular focus on her reply to a question
January 1981 in relation to the subject property were not
during cross-examination if the [petitioners Virgilio and Tadeo]
established by respondents Spouses Lumbaos evidence is
were not with her and the vendor [Rita] during the transaction. It
likewise not acceptable.
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 It is noteworthy that at the time of the execution of the documents
positively identified and confirmed the two (2) documents denominated as "Bilihan ng Lupa," the entire property owned by
evidencing the sale in favor of [respondents spouse Lumbao]. Maria, the mother of Rita, was not yet divided among her and her
Thus, her subsequent statement that the [petitioners Virgilio and 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
Page 51 of 64

August 1979 and 9 January 1981" because the exact metes and refuted by the petitioners. Besides, the property described in Tax
bounds of the subject property sold to respondents Spouses Declaration No. A-018-01674 and the property mentioned in TCT
Lumbao could not be possibly determined at that time. No. 3216 are both located in Barrio Rosario, Municipality of
Nevertheless, that does not make the contract of sale between Pasig, Province of Rizal, and almost have the same boundaries.
Rita and respondents Spouses Lumbao invalid because both the It is, thus, safe to state that the property mentioned in Tax
law and jurisprudence have categorically held that even while an Declaration No. A-018-01674 and in TCT No. 3216 are one and
estate remains undivided, co-owners have each full ownership of the same.
their respective aliquots or undivided shares and may therefore
alienate, assign or mortgage them.28 The co-owner, however, has The defense of prescription of action and laches is likewise
no right to sell or alienate a specific or determinate part of the unjustifiable. In an action for reconveyance, the decree of
thing owned in common, because such right over the thing is registration is respected as incontrovertible. What is sought
represented by an aliquot or ideal portion without any physical instead is the transfer of the property or its title which has been
division. In any case, the mere fact that the deed purports to wrongfully or erroneously registered in another persons name to
transfer a concrete portion does not per se render the sale void. its rightful or legal owner, or to the one with a better right. It is,
The sale is valid, but only with respect to the aliquot share of the indeed, true that the right to seek reconveyance of registered
selling co-owner. Furthermore, the sale is subject to the results of property is not absolute because it is subject to extinctive
the partition upon the termination of the co-ownership. 29 prescription. However, when the plaintiff is in possession of the
land to be reconveyed, prescription cannot set in. Such an
In the case at bar, when the estate left by Maria had been exception is based on the theory that registration proceedings
partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial could not be used as a shield for fraud or for enriching a person
Settlement, the 107- square meter lot sold by the mother of the at the expense of another.30
petitioners to respondents Spouses Lumbao should be deducted
from the total lot, inherited by them in representation of their In the case at bar, the right of the respondents Spouses Lumbao
deceased mother, which in this case measures 467 square to seek reconveyance does not prescribe because the latter have
meters. The 107-square meter lot already sold to respondents been and are still in actual possession and occupation as owners
Spouses Lumbao can no longer be inherited by the petitioners of the property sought to be reconveyed, which fact has not been
because the same was no longer part of their inheritance as it refuted nor denied by the petitioners. Furthermore, respondents
was already sold during the lifetime of their mother. Spouses Lumbao cannot be held guilty of laches because from
the very start that they bought the 107-square meter lot from the
Likewise, the fact that the property mentioned in the two "Bilihan mother of the petitioners, they have constantly asked for the
ng Lupa" documents was described as "a portion of a parcel of transfer of the certificate of title into their names but Rita, during
land covered in Tax Declarations No. A-018-01674," while the her lifetime, and the petitioners, after the death of Rita, failed to
subject matter of the Deed of Extrajudicial Settlement was the do so on the flimsy excuse that the lot had not been partitioned
property described in Transfer Certificate of Title (TCT) No. 3216 yet. Inexplicably, after the partition of the entire estate of Maria,
of the Registry of Deeds of the Province of Rizal in the name of petitioners still included the 107-square meter lot in their
Maria is of no moment because in the "Bilihan ng Lupa," dated 17 inheritance which they divided among themselves despite their
August 1979 and 9 January 1981, it is clear that there was only knowledge of the contracts of sale between their mother and the
one estate left by Maria upon her death. And this fact was not respondents Spouses Lumbao.
Page 52 of 64

Under the above premises, this Court holds that the "Bilihan ng of the party when the other party has a property interest in the
Lupa" documents dated 17 August 1979 and 9 January 1981 are subject matter of the contract.34
valid and enforceable and can be made the basis of the
respondents Spouses Lumbaos action for reconveyance. The In the end, despite the death of the petitioners mother, they are
failure of respondents Spouses Lumbao to have the said still bound to comply with the provisions of the "Bilihan ng Lupa,"
documents registered does not affect its validity and dated 17 August 1979 and 9 January 1981. Consequently, they
enforceability. It must be remembered that registration is not a must reconvey to herein respondents Spouses Lumbao the 107-
requirement for validity of the contract as between the parties, for square meter lot which they bought from Rita, petitioners mother.
the effect of registration serves chiefly to bind third persons. The And as correctly ruled by the appellate court, petitioners must pay
principal purpose of registration is merely to notify other persons respondents Spouses Lumbao attorneys fees and litigation
not parties to a contract that a transaction involving the property expenses for having been compelled to litigate and incur
had been entered into. Where the party has knowledge of a prior expenses to protect their interest.35 On this matter, we do not find
existing interest which is unregistered at the time he acquired a reasons to reverse the said findings.
right to the same land, his knowledge of that prior unregistered
interest has the effect of registration as to him.31 Hence, the WHEREFORE, premises considered, the instant Petition is
"Bilihan ng Lupa" documents dated 17 August 1979 and 9 hereby DENIED. The Decision and Resolution of the Court of
January 1981, being valid and enforceable, herein petitioners are Appeals dated 8 June 2005 and 29 July 2005, respectively, are
bound to comply with their provisions. In short, such documents hereby AFFIRMED. Herein petitioners are ordered to reconvey to
are absolutely valid between and among the parties thereto. respondents Spouses Lumbao the subject property and to pay
the latter attorneys fees and litigation expenses. Costs against
Finally, the general rule that heirs are bound by contracts entered petitioners.
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 SO ORDERED.
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 Republic of the Philippines
liability affecting their common ancestor. Being heirs, there is SUPREME COURT
privity of interest between them and their deceased mother. They Manila
only succeed to what rights their mother had and what is valid
and binding against her is also valid and binding as against them. FIRST DIVISION
The death of a party does not excuse nonperformance of a
contract which involves a property right and the rights and G.R. No. 162784 June 22, 2007
obligations thereunder pass to the personal representatives of the
deceased. Similarly, nonperformance is not excused by the death
Page 53 of 64

NATIONAL HOUSING AUTHORITY, petitioner, The Deed of Self-Adjudication was based on a Sinumpaang
vs. Salaysay dated October 7, 1960, allegedly executed by Margarita
SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN Herrera. The pertinent portions of which are as follows:
PEDRO, LAGUNA, BR. 31, respondents.
SINUMPAANG SALAYSAY
DECISION
SA SINO MAN KINAUUKULAN;
PUNO, C.J.:
Akong si MARGARITA HERRERA, Filipina, may 83 taong
This is a Petition for Review on Certiorari under Rule 45 filed by gulang, balo, kasalukuyang naninirahan at tumatanggap
the National Housing Authority (NHA) against the Court of ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa
Appeals, the Regional Trial Court of San Pedro Laguna, Branch ilalim ng panunumpa ay malaya at kusang loob kong
31, and private respondent Segunda Almeida. isinasaysay at pinagtitibay itong mga sumusunod:

On June 28, 1959, the Land Tenure Administration (LTA) awarded 1. Na ako ay may tinatangkilik na isang lagay na lupang
to Margarita Herrera several portions of land which are part of the tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San
Tunasan Estate in San Pedro, Laguna. The award is evidenced Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T
by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. ISANG (771) METRONG PARISUKAT ang laki, humigit
3488, the LTA was succeeded by the Department of Agrarian kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at
Reform (DAR). On July 31, 1975, the DAR was succeeded by the pag-aari ng Land Tenure Administration;
NHA by virtue of Presidential Decree No. 757.2 NHA as the
successor agency of LTA is the petitioner in this case. 2. Na ang nasabing lote ay aking binibile, sa
pamamagitan ng paghuhulog sa Land Tenure
The records show that Margarita Herrera had two children: Administration, at noong ika 30 ng Julio, 1959, ang
Beatriz Herrera-Mercado (the mother of private respondent) and Kasunduang sa Pagbibile (AGREEMENT TO SELL No.
Francisca Herrera. Beatriz Herrera-Mercado predeceased her 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa
mother and left heirs. harap ng Notario Publico na si G. Jose C. Tolosa, at
lumalabas sa kaniyang Libro Notarial bilang Documento
Margarita Herrera passed away on October 27, 1971.3 No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959;

On August 22, 1974, Francisca Herrera, the remaining child of the 3. Na dahilan sa ako'y matanda na at walang ano mang
late Margarita Herrera executed a Deed of Self-Adjudication hanap buhay, ako ay nakatira at pinagsisilbihan nang
claiming that she is the only remaining relative, being the sole aking anak na si Francisca Herrera, at ang tinitirikan o
surviving daughter of the deceased. She also claimed to be the solar na nasasabi sa unahan ay binabayaran ng kaniyang
exclusive legal heir of the late Margarita Herrera. sariling cuarta sa Land Tenure Administration;
Page 54 of 64

4. Na alang-alang sa nasasaysay sa unahan nito, During trial on the merits of the case assailing the Deed of Self-
sakaling ako'y bawian na ng Dios ng aking buhay, ang Adjudication, Francisca Herrera filed an application with the NHA
lupang nasasabi sa unahan ay aking ipinagkakaloob sa to purchase the same lots submitting therewith a copy of the
nasabi kong anak na FRANCISCA HERRERA, Filipina, "Sinumpaang Salaysay" executed by her mother. Private
nasa katamtamang gulang, kasal kay Macario Berroya, respondent Almeida, as heir of Beatriz Herrera-Mercado,
kasalukuyang naninirahan at tumatanggap ng sulat sa protested the application.
Nayong ng San Vicente, San Pedro Laguna, o sa
kaniyang mga tagapagmana at; In a Resolution8 dated February 5, 1986, the NHA granted the
application made by Francisca Herrera, holding that:
5. Na HINIHILING KO sa sino man kinauukulan, na
sakaling ako nga ay bawian na ng Dios ng aking buhay From the evidence of the parties and the records of the
ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman lots in question, we gathered the following facts: the lots
sa pangalan ng aking anak na si Francisca Herrera ang in question are portions of the lot awarded and sold to the
loteng nasasabi sa unahan. late Margarita Herrera on July 28, 1959 by the defunct
Land Tenure Administration; protestant is the daughter of
SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki the late Beatriz Herrera Mercado who was the sister of
ng kanan kong kamay sa ibaba nito at sa kaliwang gilid the protestee; protestee and Beatriz are children of the
ng unang dahon, dito sa Lungsod ng Maynila, ngayong late Margarita Herrera; Beatriz was the transferee from
ika 7 ng Octubre, 1960.4 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
The said document was signed by two witnesses and notarized. of 148 square meters is in the name of the protestant;
The witnesses signed at the left-hand side of both pages of the protestant occupied the lots in question with the
document with the said document having 2 pages in total. permission of the protestee; protestee is a resident of the
Margarita Herrera placed her thumbmark5above her name in the Tunasan Homesite since birth; protestee was born on the
second page and at the left-hand margin of the first page of the lots in question; protestee left the place only after
document. marriage but resided in a lot situated in the same
Tunasan Homesite; her (protestee) son Roberto Herrera
The surviving heirs of Beatriz Herrera-Mercado filed a case for has been occupying the lots in question; he has been
annulment of the Deed of Self-Adjudication before the then Court there even before the death of the late Margarita
of First Instance of Laguna, Branch 1 in Binan, Laguna (now, Herrera; on October 7, 1960, Margarita Herrera
Regional Trial Court Branch 25). The case for annulment was executed a "Sinumpaang Salaysay" whereby she
docketed as Civil Case No. B-1263.6 waived or transferred all her rights and interest over
the lots in question in favor of the protestee; and
protestee had paid the lots in question in full on March 8,
On December 29, 1980, a Decision in Civil Case No. B-1263
1966 with the defunct Land Tenure Administration.
(questioning the Deed of Self-Adjudication) was rendered and the
deed was declared null and void.7
This Office finds that protestee has a better preferential right to
purchase the lots in question.9
Page 55 of 64

Private respondent Almeida appealed to the Office of the involving "title and possession to real property within its
President.10 The NHA Resolution was affirmed by the Office of the jurisdiction."18 The case was then remanded for further
President in a Decision dated January 23, 1987.11 proceedings on the merits.

On February 1, 1987, Francisca Herrera died. Her heirs executed A pre-trial was set after which trial ensued.
an extrajudicial settlement of her estate which they submitted to
the NHA. Said transfer of rights was approved by the NHA.12 The On March 9, 1998, the Regional Trial Court rendered a Decision
NHA executed several deeds of sale in favor of the heirs of setting aside the resolution of the NHA and the decision of the
Francisca Herrera and titles were issued in their Office of the President awarding the subject lots in favor of
favor.13 Thereafter, the heirs of Francisca Herrera directed Francisca Herrera. It declared the deeds of sale executed by NHA
Segunda Mercado-Almeida to leave the premises that she was in favor of Herrera's heirs null and void. The Register of Deeds of
occupying. Laguna, Calamba Branch was ordered to cancel the Transfer
Certificate of Title issued. Attorney's fees were also awarded to
Feeling aggrieved by the decision of the Office of the President private respondent.
and the resolution of the NHA, private respondent Segunda
Mercado-Almeida sought the cancellation of the titles issued in The Regional Trial Court ruled that the "Sinumpaang Salaysay"
favor of the heirs of Francisca. She filed a Complaint on February was not an assignment of rights but a disposition of property
8, 1988, for "Nullification of Government Lot's Award," with the which shall take effect upon death. It then held that the said
Regional Trial Court of San Pedro, Laguna, Branch 31. document must first be submitted to probate before it can transfer
property.
In her complaint, private respondent Almeida invoked her forty-
year occupation of the disputed properties, and re-raised the fact Both the NHA and the heirs of Francisca Herrera filed their
that Francisca Herrera's declaration of self-adjudication has been respective motions for reconsideration which were both denied on
adjudged as a nullity because the other heirs were disregarded. July 21, 1998 for lack of merit. They both appealed to the Court of
The defendant heirs of Francisca Herrera alleged that the Appeals. The brief for the heirs of Francisca Herrera was denied
complaint was barred by laches and that the decision of the admission by the appellate court in a Resolution dated June 14,
Office of the President was already final and executory.14 They 2002 for being a "carbon copy" of the brief submitted by the NHA
also contended that the transfer of purchase of the subject lots is and for being filed seventy-nine (79) days late.
perfectly valid as the same was supported by a consideration and
that Francisca Herrera paid for the property with the use of her On August 28, 2003, the Court of Appeals affirmed the decision of
own money.15 Further, they argued that plaintiff's occupation of the the Regional Trial Court, viz:
property was by mere tolerance and that they had been paying
taxes thereon.16
There is no dispute that the right to repurchase the
subject lots was awarded to Margarita Herrera in 1959.
The Regional Trial Court issued an Order dated June 14, 1988 There is also no dispute that Margarita executed a
dismissing the case for lack of jurisdiction.17 The Court of Appeals "Sinumpaang Salaysay" on October 7, 1960. Defendant
in a Decision dated June 26, 1989 reversed and held that the NHA claims that the "Sinumpaang Salaysay" is, in effect,
Regional Trial Court had jurisdiction to hear and decide the case
Page 56 of 64

a waiver or transfer of rights and interest over the subject Petitioner NHA raised the following issues:
lots in favor of Francisca Herrera. This Court is disposed
to believe otherwise. After a perusal of the "Sinumpaang A. WHETHER OR NOT THE RESOLUTION OF THE
Salaysay" of Margarita Herrera, it can be ascertained NHA AND THE DECISION OF THE OFFICE OF THE
from its wordings taken in their ordinary and grammatical PRESIDENT HAVE ATTAINED FINALITY, AND IF SO,
sense that the document is a simple disposition of her WHETHER OR NOT THE PRINCIPLE OF
estate to take effect after her death. Clearly the Court ADMINISTRATIVE RES JUDICATA BARS THE COURT
finds that the "Sinumpaang Salaysay" is a will of FROM FURTHER DETERMINING WHO BETWEEN THE
Margarita Herrera. Evidently, if the intention of Margarita PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD
Herrera was to merely assign her right over the lots to her OVER THE SUBJECT LOTS;
daughter Francisca Herrera, she should have given her
"Sinumpaang Salaysay" to the defendant NHA or to B. WHETHER OR NOT THE COURT HAS
Francisca Herrera for submission to the defendant NHA JURISDICTION TO MAKE THE AWARD ON THE
after the full payment of the purchase price of the lots or SUBJECT LOTS; AND
even prior thereto but she did not. Hence it is apparent
that she intended the "Sinumpaang Salaysay" to be her
C. WHETHER OR NOT THE AWARD OF THE SUBJECT
last will and not an assignment of rights as what the NHA
LOTS BY THE NHA IS ARBITRARY.
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 We rule for the respondents.
executed on August 22, 1974 a Deed of Self-Adjudication
claiming that she is her sole and legal heir. It was only Res judicata is a concept applied in review of lower court
when said deed was questioned in court by the surviving decisions in accordance with the hierarchy of courts. But
heirs of Margarita Herrera's other daughter, Beatriz jurisprudence has also recognized the rule of administrative res
Mercado, that Francisca Herrera filed an application to judicata: "the rule which forbids the reopening of a matter once
purchase the subject lots and presented the "Sinumpaang judicially determined by competent authority applies as well to the
Salaysay" stating that it is a deed of assignment of judicial and quasi-judicial facts of public, executive or
rights.19 administrative officers and boards acting within their jurisdiction
as to the judgments of courts having general judicial powers . . . It
The Court of Appeals ruled that the NHA acted arbitrarily in has been declared that whenever final adjudication of persons
awarding the lots to the heirs of Francisca Herrera. It upheld the invested with power to decide on the property and rights of the
trial court ruling that the "Sinumpaang Salaysay" was not an citizen is examinable by the Supreme Court, upon a writ of error
assignment of rights but one that involved disposition of property or a certiorari, such final adjudication may be pleaded as res
which shall take effect upon death. The issue of whether it was a judicata."20 To be sure, early jurisprudence were already mindful
valid will must first be determined by probate. 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
Petitioner NHA elevated the case to this Court.
and that the more equitable attitude is to allow extension of the
Page 57 of 64

defense to decisions of bodies upon whom judicial powers have Intermediate Appellate Court (now, Court of Appeals) shall
been conferred. exercise the "exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards, of the
In Ipekdjian Merchandising Co., Inc. v. Court of Tax Regional Trial Courts and Quasi-Judicial agencies,
Appeals,21 the Court held that the rule prescribing that instrumentalities, boards or commissions, except those falling
"administrative orders cannot be enforced in the courts in the within the jurisdiction of the Supreme Court in accordance with
absence of an express statutory provision for that purpose" was the Constitution"27 and contends that the Regional Trial Court
relaxed in favor of quasi-judicial agencies. has no jurisdiction to rule over awards made by the NHA.

In fine, it should be remembered that quasi-judicial powers will Well-within its jurisdiction, the Court of Appeals, in its decision of
always be subject to true judicial powerthat which is held by the August 28, 2003, already ruled that the issue of the trial court's
courts. Quasi-judicial power is defined as that power of authority to hear and decide the instant case has already been
adjudication of an administrative agency for the "formulation of a settled in the decision of the Court of Appeals dated June 26,
final order."22 This function applies to the actions, discretion and 1989 (which has become final and executory on August 20, 1989
similar acts of public administrative officers or bodies who are as per entry of judgment dated October 10, 1989). 28 We find no
required to investigate facts, or ascertain the existence of facts, reason to disturb this ruling. Courts are duty-bound to put an end
hold hearings, and draw conclusions from them, as a basis for to controversies. The system of judicial review should not be
their official action and to exercise discretion of a judicial misused and abused to evade the operation of a final and
nature.23 However, administrative agencies are not considered executory judgment.29 The appellate court's decision becomes the
courts, in their strict sense. The doctrine of separation of powers law of the case which must be adhered to by the parties by
reposes the three great powers into its three (3) branchesthe reason of policy.30
legislative, the executive, and the judiciary. Each department is
co-equal and coordinate, and supreme in its own sphere. Next, petitioner NHA contends that its resolution was grounded
Accordingly, the executive department may not, by its own fiat, on meritorious grounds when it considered the application for the
impose the judgment of one of its agencies, upon the judiciary. purchase of lots. Petitioner argues that it was the daughter
Indeed, under the expanded jurisdiction of the Supreme Court, it Francisca Herrera who filed her application on the subject lot; that
is empowered to "determine whether or not there has been grave it considered the respective application and inquired whether she
abuse of discretion amounting to lack or excess of jurisdiction on had all the qualifications and none of the disqualifications of a
the part of any branch or instrumentality of the possible awardee. It is the position of the petitioner that private
Government."24 Courts have an expanded role under the 1987 respondent possessed all the qualifications and none of the
Constitution in the resolution of societal conflicts under the grave disqualifications for lot award and hence the award was not done
abuse clause of Article VIII which includes that duty to check arbitrarily.
whether the other branches of government committed an act that
falls under the category of grave abuse of discretion amounting to The petitioner further argues that assuming that the "Sinumpaang
lack or excess of jurisdiction.25 Salaysay" was a will, it could not bind the NHA.31That, "insofar as
[the] NHA is concerned, it is an evidence that the subject lots
Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary were indeed transferred by Margarita Herrera, the original
Reorganization Act of 198026 where it is therein provided that the
Page 58 of 64

awardee, to Francisca Herrera was then applying to purchase the Herrera and NHA. Obligations are transmissible.37 Margarita
same before it."32 Herrera's obligation to pay became transmissible at the time of
her death either by will or by operation of law.
We are not impressed. When the petitioner received the
"Sinumpaang Salaysay," it should have noted that the effectivity If we sustain the position of the NHA that this document is not a
of the said document commences at the time of death of the will, then the interests of the decedent should transfer by virtue of
author of the instrument; in her words "sakaling ako'y bawian na an operation of law and not by virtue of a resolution by the NHA.
ng Dios ng aking buhay" Hence, in such period, all the interests For as it stands, NHA cannot make another contract to sell to
of the person should cease to be hers and shall be in the other parties of a property already initially paid for by the
possession of her estate until they are transferred to her heirs by decedent. Such would be an act contrary to the law on
virtue of Article 774 of the Civil Code which provides that: succession and the law on sales and obligations.38

Art. 774. Succession is a mode of acquisition by virtue of When the original buyer died, the NHA should have considered
which the property, rights and obligations to the extent the estate of the decedent as the next "person"39likely to stand in
of the value of the inheritance, of a person are to fulfill the obligation to pay the rest of the purchase price. The
transmitted through his death to another or others opposition of other heirs to the repurchase by Francisca Herrera
either by his will or by operation of law.33 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
By considering the document, petitioner NHA should have noted (questioning the Deed of Self-Adjudication) which rendered the
that the original applicant has already passed away. Margarita deed therein null and void40 should have alerted the NHA that
Herrera passed away on October 27, 1971.34 The NHA issued its there are other heirs to the interests and properties of the
resolution35 on February 5, 1986. The NHA gave due course to decedent who may claim the property after a testate or intestate
the application made by Francisca Herrera without considering proceeding is concluded. The NHA therefore acted arbitrarily in
that the initial applicant's death would transfer all her property, the award of the lots.
rights and obligations to the estate including whatever interest
she has or may have had over the disputed properties. To the We need not delve into the validity of the will. The issue is for the
extent of the interest that the original owner had over the probate court to determine. We affirm the Court of Appeals and
property, the same should go to her estate. Margarita Herrera had the Regional Trial Court which noted that it has an element of
an interest in the property and that interest should go to her testamentary disposition where (1) it devolved and transferred
estate upon her demise so as to be able to properly distribute property; (2) the effect of which shall transpire upon the death of
them later to her heirsin accordance with a will or by operation the instrument maker.41
of law.
IN VIEW WHEREOF, the petition of the National Housing
The death of Margarita Herrera does not extinguish her interest Authority is DENIED. The decision of the Court of Appeals in CA-
over the property. Margarita Herrera had an existing Contract to G.R. No. 68370 dated August 28, 2003, affirming the decision of
Sell36 with NHA as the seller. Upon Margarita Herrera's demise, the Regional Trial Court of San Pedro, Laguna in Civil Case No.
this Contract to Sell was neither nullified nor revoked. This B-2780 dated March 9, 1998, is hereby AFFIRMED.
Contract to Sell was an obligation on both partiesMargarita
Page 59 of 64

No cost. PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
SO ORDERED. 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)


Republic of the Philippines
SUPREME COURT Upon arraignment, Gloria Umali entered a plea of "not, guilty" as
Manila accused Suzeth Umali remained at large. After trial, the lower
court rendered a decision on September 9, 1987, the dispositive
FIRST DIVISION portion thereof states:

G.R. No. 84450 February 4, 1991 WHEREFORE, premises considered, this Court finds
accused Gloria Umali guilty beyond reasonable doubt of
Page 60 of 64

violating Sec. 4, Art. 1 (sic) of RA 6425 as amended, USED BY PIERRE PANGAN RESULTING TO THE
otherwise known as the Dangerous Drugs Act of 1972, LATTER'S DRUG DEPENDENCY
and is hereby sentenced to suffer the penalty
of Reclusion Perpetua. Accused being a detention IV
prisoner is entitled to enjoy the privileges of her
preventive imprisonment. The case against Suzeth Umali, THE COURT A QUO GRAVELY ERRED IN FINDING
her co-accused in this case is hereby ordered ARCHIVED ACCUSED GLORIA 1, GUILTY OF VIOLATION OF
to be revived until the arrest of said accused is effected. DANGEROUS DRUGS ACT OF 1972 ON THE BASIS OF
The warrant of arrest issued against her is hereby MERE CONJECTURES AND NOT ON FACTS AND
ordered reiterated. CIRCUMSTANCES PROVEN

SO ORDERED. (Rollo, p. 30) V

Hence, this appeal from the lower court's decision with the THE COURT A QUO GRAVELY ERRED IN NOT
following assignment of errors: FINDING THAT THE GUILT OF THE ACCUSED DID NOT
PASS THE TEST OF MORAL CERTAINTY. (Rollo, p. 49)
I
The antecedent facts of this case as recounted by the trial court
THE COURT A QUO GRAVELY ERRED IN GIVING are as follows:
WEIGHT AND CREDENCE TO THE BIASED
TESTIMONY OF FRANCISCO MANALO On April 27, 1985 Pierre Pangan a minor was investigated by Pat.
Felino Noguerra for drug dependency and for an alleged crime of
II robbery. In the course of the investigation, the policemen
discovered that Pierre Pangan was capable of committing crime
THE COURT A QUO GRAVELY ERRED IN ADMITTING against property, only if under the influence of drug (sic). As
THE PROSECUTION'S EVIDENCE WHICH WERE Pierre Pangan is a minor, the police investigators sought the
OBTAINED IN VIOLATION OF ACCUSED'S presence of his parents. Leopoldo Pangan, father of the minor
CONSTITUTIONAL RIGHTS AGAINST ILLEGAL was invited to the police headquarters and was informed about
SEARCH AND SEIZURE the problem of his son. Mr. Pangan asked the police investigators
if something could be done to determine the source of the
III marijuana which has not only socially affected his son, but other
minors in the community. Previous to the case of Pierre Pangan
THE COURT A QUO GRAVELY ERRED IN DECLARING was the case of Francisco Manalo, who was likewise investigated
THAT ACCUSED NEVER DISPUTED THE CLAIM THAT by operatives of the Tiaong, Quezon Police Department and for
SHE WAS THE SOURCE OF MARIJUANA LEAVES which a case for violation of the Dangerous Drug Act was filed
FOUND IN THE POSSESSION OF FRANCISCO against him, covered by Criminal Case No. 85-516 before Branch
MANALO ON APRIL 5, 1985 AND THAT WHICH WAS 60 of the Regional Trial Court of Lucena City. Aside from said
Page 61 of 64

case, accused Francisco Manalo was likewise facing other The search resulted in the confiscation of a can of milo,
charges such as concealment of deadly weapon and other crimes containing sixteen (16) foils of dried marijuana leaves which were
against property. Pat. Felino Noguerra went to the Tiaong placed in a tupperware and kept in the kitchen where rice was
Municipal Jail, and sought the help of Francisco Manalo and told being stored. The return of the search warrant reads as follows:
him the social and pernicious effect of prohibited drugs like
marijuana being peddled to minors of Tiaong, Quezon. Manalo DATE: 22 April 1985
although a detention prisoner was touched by the appeal made to
him by the policeman and agreed to help in the identification of WHAT: "RAID"
the source of the marijuana. In return he asked the policeman to
help him in some cases pending against him. He did not
WHERE: Residence of Dr. Emiliano Umali
negotiate his case for violating the dangerous drug act, as he has
Poblacion, Tiaong, Quezon
entered a plea of guilty to the charged (sic) before the sala of
Judge Eriberto Rosario.
WHO: MBRS. OF TIAONG INP
With the consent of Francisco Manalo, Pfc. Sarmiento, Chief of
the Investigation Division gave him four (4) marked P5.00 bills to TIME STARTED/ARRIVED AT SAID PLACE:
buy marijuana from sources known to him. The serial numbers of 221410H Apr '85
the money was entered in the police blotter. The instruction was
(sic) for Manalo to bring back the prohibited drug purchased by SERVED TO: MRS. GLORIA UMALI
him to the police headquarters. Few minutes there after (sic), MR. EMILIANO UMALI
Manalo returned with two (2) foils of dried marijuana which lie
allegedly bought from the accused Gloria Umali. Thereafter, he PERSON APPREHENDED/PROPERTY
was asked by the police investigators to give a statement on the SEIZED/RECOVERED
manner and circumstances of how he was able to purchase two
(2) marijuana foils from accused Gloria Umali. With the affidavit of Mrs. Gloria Umali 16 Aluminum Foils of
Francisco Manalo, supported by the two (2) foils of marijuana. the
Chief of the Investigation Division petitioned the Court for the Mr. Emiliano Umali Suspected Marijuana leaves
issuance of a search warrant as a justification for them to search
the house of Gloria Umali located at Rector (sic) Street. TIME/DATE LEFT SAID PLACE: 221450H Apr '85
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 WITNESSES (sic) BY:
Umali were the four P5.00 bills with serial numbers BA26943,
DT388005, CC582000 and EW69873, respectively as reflected in 1. (Sgd) Reynaldo S. Pasumbal
the police blotter. Likewise, present in the four (4) P5.00 bills were
the letters T which were placed by the police investigators to 2. (Sgd) Luisabel P. Punzalan
further identify the marked four (4) P5.00 bills. The searched (sic)
in the house was made in the presence of Brgy. Capt. Punzalan. 3. (Sgd) Arnulfo C. Veneracion
Page 62 of 64

4. (Sgd) Isidro C. Capino him by the accused Gloria Umali. The defense also did
not dispute the claim of the prosecution that in the
Samples of the marijuana leaves confiscated were investigation of Pierre Pangan, the police investigator
submitted to the PC Came Laboratory for examination. came to know that Gloria Umali was the source of the
Capt. Rosalinda Royales of the PC crime Laboratory took marijuana leaves which he used and smoked resulting in
the witness stand, testified and identified the marijuana his present drug dependency. (Rollo, pp. 22-27)
submitted to her and in a written report which was marked
as Exhibit "G" she gave the following findings: The appellant vehemently denied the findings of the lower court
and insisted that said court committed reversible errors in
Qualitative examination conducted on the convicting her. She alleged that witness Francisco Manalo is not
specimen mentioned above gave POSITIVE reputed to be trustworthy and reliable and that his words should
result to the tests fur marijuana. not be taken on its face value. Furthermore, he stressed that said
witness has several charges in court and because of his desire to
In Criminal Case No. 85-516, Francisco Manalo was have some of his cases dismissed, he was likely to tell falsehood.
charged of having in his possession Indian Hemp on April
5, 1985, in violation of Section 8, Article 11 of Republic However, the plaintiff-appellee through the Solicitor General said
Act 6425 as amended, otherwise as the Dangerous Drugs that even if Francisco Manalo was then facing several criminal
Act of 1972. The Court in rendering against him disposed charges when he testified, such fact did not in any way disqualify
the case as follows: him as a witness. "His testimony is not only reasonable and
probable but more so, it was also corroborated in its material
In view of the foregoing, the Court hereby finds respect by the other prosecution witnesses, especially the police
the accused Guilty beyond reasonable doubt of officers." (Rollo, pp. 83-84)
the crime of illegal possession of "Indian Hemp"
penalized under Sec. 8 of Article 6425 (sic); as The appellant also claimed that the marked money as well as the
amended otherwise known as the Dangerous marijuana were confiscated for no other purpose than using them
Drugs Act of 1972 and the Court hereby as evidence against the accused in the proceeding for violation of
sentences him to suffer an imprisonment of two Dangerous Drugs Act and therefore the search warrant issued is
(2) years and four (4) months of prision illegal from the very beginning. She stressed that there can be no
correccional to six (6) years and one (1) day other plausible explanation other than that she was a victim of a
of Prision Mayor and to pay a fine of Six frame-up.
Thousand Pesos (P6,000.00). Let the period of
detention of the accused be credited to his In relation to this contention, the Solicitor General noted that it is
sentence. not true that the evidences submitted by the prosecution were
obtained in violation of her constitutional right against illegal
Accused never disputed the claim of Francisco Manalo search and seizure.
that the marijuana found in his possession on April 5,
1985 in the municipality of Tiaong, Quezon was sold to
Page 63 of 64

Furthermore, the appellant contended that the essential elements Except as provided in the next succeeding section, all
of the crime of which she was charged were never established by persons who can perceive, and perceiving can make
clear and convincing evidence to warrant the findings of the known their perception to others may be witnesses.
court a quo. She also stressed that the court's verdict of
conviction is merely based on surmises and conjectures. Religious or political belief, interest in the outcome of the
case, or conviction of a crime unless otherwise provided
However, the Solicitor General noted that the positive and by law, shall not be a ground for disqualification.
categorical testimonies of the prosecution witnesses who had
personal knowledge of the happening together with the physical The phrase "conviction of a crime unless otherwise provided by
evidence submitted clearly prove the guilt beyond reasonable law" takes into account Article 821 of the Civil Code which states
doubt of accused-appellant for violation of the Dangerous Drugs that persons 91 convicted of falsification of a document, perjury or
Act. false testimony" are disqualified from being witnesses to a will."
(Paras, RULES OF COURT ANNOTATED, Vol. IV First Ed., p. 44)
Time and again, it is stressed that this Court is enjoined from
casually modifying or rejecting the trial court's factual findings. Since the witness Francisco Manalo is not convicted of any of the
Such factual findings, particularly the trial judge's assessment of above-mentioned crimes to disqualify him as a witness and this
the credibility of the testimony of the witnesses are accorded with case does not involve the probate of a will, We rule that the fact
great respect on appeal for the trial judge enjoys the advantage of that said witness is facing several criminal charges when he
directly and at first hand observing and examining the testimonial testified did not in any way disqualify him as a witness.
and other proofs as they are presented at the trial and is therefore
better situated to form accurate impressions and conclusions on The testimony of a witness should be given full faith and credit, in
the basis thereof (See People v. Bravo, G.R. No. 68422, 29 the absence of evidence that he was actuated by improper motive
December, 1989,180 SCRA 694,699). The findings of the trial (People v. Melgar, G.R. No. 75268,29 January 1988, 157 SCRA
court are entitled to great weight, and should not be disturbed on 718). Hence, in the absence of any evidence that witness
appeal unless it is shown that the trial court had overlooked Francisco Manalo was actuated by improper motive, his
certain facts of weight and importance, it being acknowledged testimony must be accorded full credence.
that the court below, having seen and heard the witnesses during
the trial, is in a better position to evaluate their testimonies
Appellant's contention that she was a victim of a "frame-up" is
(People v. Alverez y Soriano, G.R. No. 70831, 29 July 1988, 163
devoid of merit. "Courts must be vigilant. A handy defense in
SCRA 745, 249; People v. Dorado, G.R. No. L-23464, October
1wphi1

such cases is that it is a frame-up and that the police attempted to


31, 1969, 30 SCRA 53; People v. Espejo, G.R. No. L-27708,
extort from the accused. Extreme caution must be exercised in
December 19, 1970, 36 SCRA 400). Hence, in the absence of
appreciating such defense. It is just as easy to concoct as a
any showing that the trial court had overlooked certain substantial
frame-up. At all times the police, the prosecution and the Courts
facts, said factual findings are entitled to great weight, and indeed
must be always on guard against these hazards in the
are binding even on this Court.
administration of criminal justice." (People v. Rojo, G.R. No.
82737, 5 July 1989, 175 SCRA 119)
Rule 130, Section 20 of the Revised Rules of Court provides that:
Page 64 of 64

The appellant's allegation that the search warrant is illegal cannot accused-appellant Gloria Umali violated Section 4, Article II of the
also be given any merit. "Where marked peso bills were seized Dangerous Drugs Act.
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 Pursuant to recent jurisprudence and law, the case is covered by
the arrest and search on the person of the appellant" (People v. Section 4 of Republic Act No. 6425 as amended by Presidential
Paco, G.R. No. 76893, 27 February 1989, 170 SCRA 681). Since Decree No. 1675, effective February 17, 1980, which raised the
the search is predicated on a valid search warrant, absent any penalty for selling prohibited drugs from life imprisonment to
showing that such was procured maliciously the things seized are death and a fine ranging from twenty to thirty thousand pesos
admissible in evidence. (People v. Adriano, G.R. No. 65349, October 31, 1984, 133 SCRA
132) Thus, the trial court correctly imposed the penalty of life
Appellant argues that the lower court's verdict is based on imprisonment but failed to impose a fine.
surmises and conjectures, hence the essential elements of the
crime were never established by clear and convincing evidence. ACCORDINGLY, the appealed decision is AFFIRMED with the
modification that a fine of twenty thousand pesos (P20,000.00) be
Conviction cannot be predicated on a presumption or speculation. imposed, as it is hereby imposed, on the accused-appellant.
A conviction for a criminal offense must be based on clear and
positive evidence and not on mere presumptions (Gaerlan v. SO ORDERED.
Court of Appeals, G.R. No. 57876, 6 November 1989, 179 SCRA
20). The prosecution's evidence consisted of the testimony of Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.
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

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