property.

After the transfer of the shares of the co-

FIRST DIVISION
owners in the property, TCT 1 was cancelled and in
[G.R. No. L-5893. February 28, 1956.] lieu thereof TCT 2 inthe name of Tavera-Luna, Inc. was
CARMEN PARDO DE TAVERA y LOPEZ issued.
MANZANO, Plaintiff-Appellee, vs. EL HOGAR
FILIPINO, INC., MAGDALENA ESTATE, INC. and Upon application of the corporation, El Hogar Filipino,
ERNEST BERG, Defendants; EL HOGAR FILIPINO, INC. Inc., a loan and building association, granted it a loan
and MAGDALENA ESTATE, INC., Defendants- of P1,000,000 for the purpose of erecting a concrete
Appellants. building in lieu of the wooden building standing
thereon. Thisloan was secured by a first mortgage
registered on the certificate. An additional loan of
P300,000 was obtained bythe corporation from El
However, notice is not necessary where the next of
Hogar Filipino, Inc. secured by a mortgage on the
kin to ward and all persons interested in the estate same property. The period of the firstmortgage of
are her mother and guardian, uncles and aunts who P1,000,000 was extended. TCT 2 in the name of
agreed to make the transfer of their respective shares Tavera-Luna, Inc. was cancelled and in lieu
in the property to the corporation to be organized thereof TCT 3 was issued also in the name of Tavera-
(Pardo de Tavera vs. El Hogar Filipino, February 28, Luna, Inc., but the parcel of land was subdivided
1956) into several lots withtheir respective description.
Again, TCT 3 was partially cancelled as to one of the
several lots and TCT 4 was issuedin the name of
Tavera-Luna, Inc. Thereafter, partial cancellations
Tavera vs El Hogar were made of TCT 3 as to some of the small lotsand 7
| Padilla, J. (1956) new TCTs were issued in the name of Tavera-Luna,
Inc. The last certificates of title cover small parts of
FACTS theoriginal parcel of land. The larger part of the parcel
This case involves a parcel of land co-owned by the of land is described in TCTs 3 and 4.
Taveras. The co-owners agreed to organize a
corporation underthe name of Tavera-Luna, Inc. for Not long after the construction of the building known
the purpose of building a modern structure on the as “Crystal Arcade” was finished, El Hogar Filipino,
parcel of land and to that endthey also agreed to Inc., themortgagee, took over the possession
accept shares of stock of the corporation to be and management of the property to apply the
organized in exchange for their rents, after deductingmanagement expenses,
respectiveshares in the parcel of land and building to the payment of the mortgagee debt and
erected thereon to be transferred to the corporation. the mortgagee foreclosed
The mother andguardian of the minor co-owner filed the mortgageextrajudicially and purchased the
a petition in the probate court praying for the whole property at public auction sale. The mortgagor
approval of the agreement andseeking authority to having failed to redeem theproperty, the
accept shares of stock of the corporation in mortgagee consolidated its title and the TCTs 3
exchange for the share of the minor in and 4 in the name of Tavera-Luna, Inc.
theproperty. The probate court approved the werecancelled and in lieu thereof TCTs 5 and 6 were
agreement in so far as the minor was issued in the name of the mortgagee, El Hogar
concerned and authorized theguardian to accept Filipino, Inc. Nearlynine months after the filing of the
the shares of stock of the corporation in exchange original complaint in this case, El Hogar Filipino, Inc.
for the share of the minor in the property. sold the whole property toMagdalena Estate, Inc. The
TCTs 5 and 6 in the name of El Hogar Filipino, Inc.
Tavera-Luna, Inc., was actually incorporated and the were cancelled and lieu thereof TCTs7 and 8 were
guardian of the minor transferred her share in the issued in the name of Magdalena Estate, Inc.
Page 1 of 3
Magdalena Estate, Inc. sold one-third undivided
sharein the property to Ernest Berg. *Plaintiff contends that the probate court's order is
a nullity because:
The minor co-owner brought an action in the a.the provisions of section 569, Act No. 190,
CFI Manila to annul the transfer of her right, share and the law then in force, were not complied with
interest in theproperty made by her guardian to and for thatreason the probate court was without
Tavera-Luna, Inc. However, before judgment could be jurisdiction to order the transfer of her share in the
rendered by the Court,the battle for liberation of property to thecorporation to be organized and
Manila supervened and the record of the case was formed
destroyed. After reconstitution of therecord of the b.as the petition which brought about the entry of the
case, amendment to the pleadings were made to order of the probate court was not verified
include the Magdalena Estate, Inc. and Ernest c.it did not set forth the condition of the estate of the
Bergto party-defendants. ward and the facts and circumstances upon which
thepetition was founded tending to show the necessity or
CFI rendered judgment annulling the order of the expediency of the sale (transfer)
probate court that had granted authority to the
guardian of theplaintiff to transfer her ward’s d. Whether or not the Court did not direct “the
right, share interest in the parcel of land to next of kin to the ward, and all persons
Tavera-Luna, Inc. and the transferthereof interested in the estate, to appearbefore the
pursuant thereto; transfers of the ward’s share in the judge or court, at the time and place therein specified,
property to El Hogar Filipino, Inc., Magdalena not less than four nor more than eightweeks from the
Estate,Inc. and Ernest Berg; certificates of title issued time of making such order, to show cause why an
to the transferees in so far as the ward’s share in the order should not be granted for thesale or such
property isconcerned; and ordering cancellation of estate”
transfer certificates issued to the transferees and
issuance of new ones inthe name of the transferees
and the plaintiff with the statement in the certificates RATIO
to be issued that plaintiff’s sharein the property is That the probate court in guardianship proceedings
two-ninths, free from any lien or encumbrance, and had jurisdiction over the petition filed by the guardian
accounting of the income collected by thetransferees admits of no doubt. Only upon the ground of lack of
during the periods of their respective possession of jurisdiction may an order entered by a court be
the property and payment or delivery thereof to assailed collaterally. If the court had jurisdiction,
theplaintiff in so far as her share in the property is irregularities in the proceedings which would or could
concerned. The defendants have appealed. invalidate the court’s order may beassailed directly by
means of an appeal but not collaterally.
The point
that the plaintiff’s action is barred by the Lack of verification of a petition filed in a probate
statute of limitations court for the sale of real property belonging to the
is no longer urged, because theplaintiff became estate of aminor is not a jurisdictional defect. It should
of age and released from guardianship and the action have been attacked directly and not collaterally.In her
was brought within the period provided forin section petition the guardian alleged that the transfer of
579, Act No. 190 her ward’s share in the property to the corporation
then tobe organized would be to or for her
benefit and she expected that the construction
ISSUE/HELD of a new building wouldenhance the value of her
ward’s share in the property and increase her income.
WON the probate court has jurisdiction to issue the No other consideration or motivecould have
disputed order / YES prompted the guardian, mother of the minor,
Page 2 of 3
to file the petition. It is not necessary for a
grant of authority to the guardian to sell the estate
of the ward to state that the income “is insufficient to
maintain the wardand his family or to maintain or
educate the ward when a minor.” It is enough, as the
other alternative of the lawprovides, that “it appears
to the satisfaction of the court that it is for the benefit
of the ward that his real estate orsome part thereof
should be sold, and the proceeds thereof put out at
interest, or invested in some productivesecurity.”
The petition of the guardian falls under the last
quoted part of section 569, Act No. 190. That part of
the section,requiring the probate court to enter an
order directing the next of kin to the ward and all
persons interested in theestate to appear before the
court at a time and place therein specified, was
substantially complied with, becausethe next kin to
the ward was her own guardian and mother and all
persons interested in the estate of the wardwere
her uncles and aunt who agreed to make the
transfer of their respective shares in the
property to thecorporation, Tavera-Luna, Inc.
Moreover, “next of kin” are those whose relationship
is such that they are entitled toshare in the estate as
distributees.
There were no creditors to the ward’s estate. Notice
to “the next of kin to the ward, and all persons
interested inthe estate, to appear before the
judge or court, at the time and place therein
specified,” was not necessary,because the next
of kin to the ward and all persons interested in the
estate were her mother and guardian, unclesand
aunt.
Under these circumstances, that part of the
provision of section 569, Act No. 190, has been
complied with. Hearingon the petition, as DISPOSITIVE
required in said section does not necessarily The judgment appealed from is reversed, the
mean that witnesses testify or documents complaint dismissed, with costs against the appellee.
beproduced or exhibited. If the court be
satisfied that the allegations of the petition
are true and the interestedpersons or close
relatives of the ward did not object because they
themselves were interested in the scheme toorganize
a corporation to which all their shares in the property
were to be transferred, the provisions of the law
onhearing were also complied with.
The conclusion arrived at renders it unnecessary to
pass upon the question whether El Hogar Filipino, Inc.
was apurchaser for value and in good faith. Suffice it
to say that even if the loan was granted when the
certificate of titlewas still in the name of the plaintiff
and her co-owners, the fact that the loan was
applied for by an entity that wasin the process of
organization and by the same persons who
were the registered owners of the property,
themortgagee was entitled to rely upon the order of
the probate court granting authority to the guardian
to make thetransfer of the share of her ward in the
property and was not bound to inquire further to find
out whether therewere irregularities committed or
defects or vices that would render the order null
and void.
So also the question whether the action brought by
Carlos Pardo de Tavera y Cembrano in his own behalf
and inbehalf of the minor, the herein plaintiff, is res
judicata need not be passed upon. Certainly, it
would be awkward forthis Court to review a final
decree or judgment which upheld the validity of the
mortgage in favor of the El Hogar Filipino, Inc., in the
case of Carlos Pardo de Tavera and Carmen Pardo de
Tavera Manzano vs. El Hogar Filipino,Inc. and to
declare null and void the order of the probate court as
far as the share in the property of the minor
isconcerned, a declaration which would partly reopen,
r
eview, reverse or set aside that final decree or
judgmentrendered by SC.This action would not have
been brought if the scheme and plan of the organizers
or incorporators of the Tavera-Luna, Inc. should have
met with success.
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