SUILIONG AND CO.

VS CHIO TAYSAN 12 PHIL

13
Avelina Caballero, deceased, owned during her lifetime
a certain tract of land, which was duly inscribed in her
name in the land registry of the city of Manila. On
March 27, 1903, she borrowed from Francisca Jose, the
intervener and appellant in this action, 1,000 pesos,
Mexican currency, and turned over her title deeds to this
tract of land to the lender as security for the loan, but no
entry touching the transaction was noted in the land
registry.
Avelina Caballero died on the 5th day of June, 1903, and
thereafter Silvina Chio-Taysan, the defendant in this
action, instituted in the Court of First Instance of Manila
an action, known, under the system of civil procedure in
existence prior to the adoption of the present code, as an
"action for the declaration of heirship" and on the 5th
day of August, 1903, the following order declaring her to
be the only and exclusive heir of Avelina Caballero,
deceased, was issued in that proceeding:
[United States of America, Philippine Islands. In
the Court of First Instance of Manila. Part III.]
It having been proven by both documental and
oral evidence introduced in the above-cited case,
that the petitioner Silvina Chio-Taysan y
Caballero is the daughter of Jose Chio-Taysan
and Avelina Caballero, who died on the 29th of
April, 1895, and on the 5th of June, 1903,
respectively, without leaving any other
descendant or having executed any will; and
there being no objection whatever to the claim
of the petitioner, it is hereby declared that the
said Silvina Chio-Taysan y Caballero is the legal
heir abintestato of her deceased parents, the said
Jose Chio-Taysan and Avelina Caballero, in
conformity with the provisions of the Civil Code
now in force. Let a certificate of this decision be
issued to the interested party and those who may
hereafter apply for the same. So ordered.
A.S. CROSSFIELD, Judge.
On March 9, 1904, the registrar of deeds of the city of
Manila by virtue of this order entered the following
inscription in the land registry whereby the said Silvina
Chio-Taysan is made to appear as the owner of the land
in question:
Ninth inscription. Urban property. A
parcel of land and a house of a strong materials,
tile roofed, built thereon, marked number eight,
situated in Calle Lavezares of the district of

Binondo, this city, the remaining description of

which appears in the first inscription of this
number. It has no encumbrances. Doa
Avelina Caballero y Bugnot, of age, widow, of
this vicinity, is the owner of this property under
a title of repurchase, according to the proceeding
inscription. Said lady and her husband, Don Jose
Chio-Taysan, died on June 5, 1903, and April
29, 1895, respectively, and neither of them
having executed a will, the corresponding
intestate proceedings were instituted, in which
an order was issued on August 5, 1903, by A.S.
Crossfield, judge of the third sala of the Court of
First Instance of this city, declaring their
daughter, Silvina Chio-Taysan y Caballero, their
intestate heir. By virtue thereof, I inscribe, in
favor of the said Silvina Chio-Taysan y
Caballero, the right she was acquired over the
property of this number, under title by intestate
inheritance. All the above appears from the
previous records and from the copy of the above
judicial order, issued by Don Salvador Chofre,
assistant clerk of the Court of First Instance of
this city, on August 5, 1903, which document
was presented to this registry at 8:50 a. m. on the
25th day of February last, as per record No. 452,
page 266, of the 7th volume of the Diario. And
all the above being in accordance with the
document above referred to, I sign these presents
in Manila, on March 9, 1904 Fees: $7.50, No.
7, Tariff of Fees. Alberto Barretto.
On the 26th day of May, 1904, the said Silvina ChioTaysan borrowed the sum of P2,500 from the Fire and
Marine Insurance and Loan Co., of which the plaintiff is
the lawfully appointed liquidator, and mortgaged the
land in question as security for the repayment of the
loan.
Thereafter the husband of Silvina Chio-Taysan instituted
special proceedings under the provisions of the present
Code of Civil Procedure, for the administration of the
estate of Avelina Caballero, deceased, and on the 16th
day of October, 1905, he was, in accordance with his
petition, appointed administrator; and thereupon,
submitted as such administrator, an inventory of the
property of the estate, in which was included the land in
question; and on the 28th of November, 1905, Francisca
Jose, the intervener in this action, submitted her claim to
the commissioner appointed in these proceedings, for the
sum of 1,000 pesos, Mexican currency, loaned the
deceased, as above set out, on the 28th day of March,
1904, which claim was duly approved on the 31st of
August, 1906.

On the 10th day of October, 1906, the plaintiff in this

action filed its complaint against the defendant, Silvina
Chio-Taysan, praying for judgment for the amount
loaned her as above set out, and the foreclosure of its
mortgage upon the land. To this complaint the defendant,
Silvina Chio-Taysan, filed her answer, admitting the
facts alleged in the complaint and declining to interpose
any objection to the prayer of the complaint; but on the
30th of October, 1907, Francisca Jose was permitted to
intervene and file her separate "complaint in
intervention" wherein she set out the facts touching the
loan made by her to Avelina Caballero, deceased, and
prayed that the court declare the mortgage executed by
Silvina Chio-Taysan rescinded and of no effect; and
further that it annul the inscription in the land registry of
the title of Silvina Chio-Taysan to the land in question;
and declare this land subject to her claim against the
estate of Avelina Caballero, deceased. lawphil.net

the land, for the payment of their claims against the

deceased, the intervener is clearly entitled to at least so
much of the relief she seeks in this action as will have
the effect of preventing the sale of this land under the
plaintiff's foreclosure proceedings, free of the claims of
creditors of the deceased, because, if the plaintiffs in this
action were permitted to foreclosure their mortgage and
to recover their debt from the sale of the land in
question, it might well be that there would not be
sufficient property in the estate to pay the amount of the
claim of the intervener against the estate.

We do not think that the judgment of the trial court can

be sustained in so far as it wholly denies relief to the
intervener, Francisca Jose. The trial judge denied the
relief prayed for by the intervener, on the ground that her
intervention in this action was for the purpose of the
written title deeds on the land, and that, since she
admitted that she had admitted her claim against the
estate of Avelina Caballero, deceased, to the committee
appointed in the administration proceedings, she must be
taken to have abandoned, whatever lien she may have
held as security therefor, in accordance with the
provisions of section 708 of the Code of Civil Procedure.

Had the transactions above set out in taken place under

the system of law in force in these Islands immediately
prior to the 1st day of October, 1901, when the new
Code of Civil Procedure went into effect, there would be
no difficulty in determining the respective rights of the
various parties to this action. Article 657 of the Civil
Code provides that Los derechos a la succession de una
persona se transmiten desde el momento de su
muerte. (The rights to the succession of another are
transmitted from the moment of his death); and article
661 provides thatLos herederos suceden al difunto por el
hecho solo de su muerte en todos sus derechos y
obligaciones. (Heirs succeed the deceased by the mere
fact of his death, in all rights and obligations). Under
these, and co-related provisions of the Civil Code, a sole
and exclusive heir (as defined in article 660 of the Civil
Code) became the owner of the property and was
charged with the obligations of the deceased at the
moment of his death, upon precisely the same terms and
conditions as the property was held and as the
obligations had been incurred by the deceased prior to
his death, save only that when he accepted the
inheritance, "with benefit of an inventory" he was not
held liable for the debts and obligations of the deceased
beyond the value of the property which came into his
hands.

The prayer of her complaint in intervention, however, is

merely for the rescission and annulment of the mortgage
contract between the loan company and the defendant
and of the inscription in the land registry of the title of
the defendant, and a declaration that as a creditor of the
estate she has a superior right to that of the plaintiff
company in the proceeds of any sale of the land in
question. She does not seek to enforce her claim and
recover her debt in this proceeding, but merely to
prevent the plaintiff from securing a judgment in this
action which would take out of the estate property which
she believes to be subject to her claim set up in the
administration proceedings. If her contentions are well
founded, and if the estate of the deceased is subject to
the payment of the debts of the deceased in such form
that the heirs of the deceased could not alienate this land
free of the claims of the creditors of the deceased against

The property of the deceased, both real and personal,

became the property of the heir by the mere fact of death
of his prodecessor in interest, and he could deal with it in
precisely the same way in which the deceased could
have dealt with it, subject only to the limitations which
by law or by contract were imposed upon the deceased
himself. He could alienate or mortgage it with the same
freedom as could the deceased in his lifetime; the
unsecured debts and other personal obligations of the
deceased becoming the unsecured debts and personal
obligations of the heir for which he was held personally
responsible in precisely the same manner as the
deceased, save only, as has been said before, where he
availed himself of the privilege of taking the estate "with
the benefit of an inventory," in which case the extent of
his liability was limited to the value of the estate which
came into his hands, though in other respects its

The trial court entered judgment in favor of the plaintiff

and against both the defendant and the intervener in
conformity with the prayer of the complaint, and the
intervener brings that judgment before this court for
review upon her bill of exceptions duly signed and
certified.

character as a personal liability remained unchanged.

Thus death created no new lien in favor of creditors
upon the property of the deceased, which was not in
existence at the time of his death; personal debts and
obligations of the deceased becoming the personal debts
and obligations of the heir, to whom the creditor was
compelled to look for payment, with no new right in or
to the property of the decease, in the hands of the heir,
which he did not have in or to such property in the hands
of the deceased. (Title 3, Book of the Civil Code.)
Spanish procedural law provided an action known as an
action for the declaration of heirship (declaracion de
herederos) whereby one claiming the status of heir could
have his right thereto judicially declared, and this
judicial declaration of heirship unless and until set aside
or modified in a proper judicial proceeding, was
evidence of the fact of heirship which the officials
charged with the keeping of the public records, including
the land registry, were bound to accept as a sufficient
basis for the formal entry, in the name of the heir, of
ownership of the property of the deceased.
It is evident therefore that, unless the provisions of
Spanish procedural and substantive law, in force when
the new Code of Civil Procedure went into effect, have
been repealed or modified thereby, the defendant in this
action, Silvina Chio-Taysan, who was judicially declared
to be the sole and universal heir of Avelina Caballero,
deceased, became, by the mere fact of the death of
Caballero, the absolute owner of the tract of land in
question, subject only to such liens thereon as may have
existed prior thereto, the personal obligations of the
deceased also passing to her at the same time; that, upon
proof of such judicial declaration of heirship, the register
of deeds of the city of Manila properly entered ChioTaysan in the land registry as the owner of this land by
right of inheritance; and that the Loan Company, of
which the plaintiffs are the duly appointed liquidators,
was entitled to rely on the properly noted entries in the
land registry and that the company's mortgage deed from
Chio-Taysan, in whose name the land is registered, could
not be affected by the unrecorded claim of the
indebtedness of the intervener, who must look to the
heirs for the recovery of her debt.
But both the substantive and procedural law touching
rights of succession and their enforcement, which were
in force in these Islands when the new Code of Civil
Procedure went into effect, have, to a greater or less
degree, been repealed or modified by its enactment; and
we are of opinion that, under the provisions of the new
code, the heir is not a such personally responsible for the
debts of the deceased, in whole or in part; and on the
other hand, the property of the deceased comes to him
charged with the debts of the deceased, so that he can

not alienate or charge it free of such debts, until and

unless they are extinguished either by payment,
prescription, or satisfaction in one or other of the modes
recognized by law.
It must be admitted that we can not point out the specific
section of the new Code of Civil Procedure which in
express terms repeals the old law and formally enacts the
new doctrine of succession just laid down; but we think
that an examination of the various provisions of that
code touching the administration of the estates of
deceased person leaves no room for doubt that they do
so by necessary implication.
The legislators who enacted this code were more
especially acquainted with the American and English
systems of legislation, and in most of its provisions
closely adhered to American precedent. It substantially
repeals in toto the proceedings prescribed under the old
law for the administration of estates of deceased persons,
and substitutes therefor a system similar to that generally
adopted in the United States; most of its provisions
having been borrowed word for word from the codes of
one or other of the various States. The substantive law in
force in these Islands being in many respects, and
especially in regard to rights of inheritance, wholly
different from that in force in the various States from
which the new system of administration of the estates of
deceased persons was adopted, many irreconcilable
conflicts are to be found between the provisions of the
new and the old law, so that it becomes necessary either
to declare a great part of the provisions of the new Code
of Procedure void and no effect, as wholly inapplicable,
or to hold that in such cases the provisions of substantive
as well as procedural law in conflict or inconsistent with
the provisions of the new Code of Procedure are
repealed, or amended by the substitution of such other
provisions as are clearly necessary as a basis upon which
the new provisions of procedural law are predicated.
An examination more especially of sections 597, 644,
695, 727, 729, 731, 733, and 749 of the Code of Civil
Procedure, read together with the remaining provisions
for the administration of the estates of deceased persons,
clearly indicates that the provisions of articles 660 and
661 of the Civil Code have been abrogated.
These provisions of the new code clearly demonstrate
that the terms heredero and legatario, as defined in the
Civil Code (art. 660), are not synonymous with the
words "heir" and "legatee," as used in the new code; the
word "heir" in the new code being technically and
applicable only to a relative taking property of an
intestate by virtue of the laws of descent, devisee and
legatee being reserved for all persons whether relatives
or not, taking respectively real or personal property by

virtue of a will; while heredero in the Civil Code was

applicable not only to one who would be called an
"heir," under the provisions of the new code, but also to
one, whether relative or not, who took what might be
called "a residuary estate under a will" (el que sucede a
titulo universal).
It appears also from an examination of these provisions
that the legislature has provided no machinery whereby
an absolute right on the part of the heir to succeed by the
mere fact of death to all the rights and property of the
deceased may be enforced, without previous payment or
provision of the payment of the debts; and on the other
hand, it has provided machinery for the enforcement of
the debts and other obligations of the deceased, not as
debts or obligations of the heir, but as debt or obligations
of the deceased, to the payment of which the property of
the deceased may be subjected wherever it be found.
Thus section 597 expressly provides that, in those cases
where settlement of an intestate estate may be made
without legal proceedings, either by a family council, as
known under the Spanish law, or by an agreement in
writing executed by all the heirs, the real estate of the
deceased remains charged with liability to creditors of
the deceased for two years after the settlement,
"notwithstanding any transfers thereof that may have
been made;" and we think the inference is clear that the
legislator in this section recognizes and affirms the
doctrine that, prior to the date of such settlement, the real
estate at least was charged in like manner with the debts
of the deceased. So it will be found that, where the legal
proceedings are had looking to the settlement of testate
or intestate estates, provision is made for the recovery of
claims against the deceased, not by proceedings directed
against the heir, but by proceedings looking directly to
the subjection of the property of the deceased to the
payment of such claims; the property both real and
personal being, in express terms, made chargeable with
the payment of these debts, the executor or administrator
having the right to the possession of the real as well as
the personal property, to the exclusion of the heirs, so
long as may be necessary for that purpose (secs. 727 and
729).
For practical purposes it may well be said that in the eye
of the law, where there is no remedy to enforce an
alleged right when it is invaded, the existence of the
right may safely be denied; and where the law furnishes
a remedy whereby one may enforce a claim, that claim is
a right recognized and established by the law. The new
Code of Procedure furnishing no remedy whereby the
provisions of article 661 of the of the Civil Code may be
enforced, in so far as they impose upon
the heredero (heir) the duty of assuming as a personal
obligation all the debts of the deceased, at least to the
extent of the value of the property received from the

estate; or in so far as they give to the heredero the

reciprocal right to receive the property of the deceased,
without such property being specifically subjected to the
payment of the debts to the deceased by the very fact of
his deceased, these provisions of article 661 may
properly be held to have been abrogated; and the new
code having provided a remedy whereby the property of
the deceased may always be subjected to the payment of
his debts in whatever hands it may be found, the right of
a creditor to a lien upon the property of the deceased, for
the payment of the debts of the deceased, created by the
mere fact of his death, may be said to be recognized and
created by the provisions of the new code. (Pavia vs. De
la Rosa, 8 Phil. Rep., 70).
It is evident, therefore, that a judgement in an action for
the declaration of heirship in favor of one or more heirs
could not entitle such persons to be recognized as the
owner or owners of the property of the deceased on the
same terms as such property was held by the deceased,
for it passes to the heir, under the new code, burdened
with all the debts of the deceased, his death having
created a lien thereon for the benefit of creditor; and
indeed an examination of the proceedings prescribed in
the new Code of Civil Procedure for the administration
and distribution of the estates of deceased persons leaves
no room for doubt that those proceedings are exclusive
of all other judicial proceedings looking to that end, and
supersede the judicial proceeding for the declaration of
heirship, as recognized in the old procedure, at least so
far as that proceeding served as a remedy whereby the
right of specific persons to succeed to the rights and
obligations of the deceased as his heirs might be
judicially determined and enforced.
Examining the facts in the case at bar, in the light of the
doctrine as to the law of succession as thus modified and
amended by the new Code of Civil Procedure, which
went into effect prior to the death of Avelina Caballero,
it is evident that her death created a lien upon her
property in favor of the intervener Francisca Jose, for the
payment of the debt contracted by her during her
lifetime, and that this lien ought to have and has priority
to any lien created upon this property by the heir of the
deceased; that the judicial declaration of heirship in
favor of Silvina Chio-Taysan, could not and did not
furnish a basis for an entry in the land registry of the
name of Silvina Chio-Taysan as the absolute owner of
the property of Avelina Caballero; that such entry,
improperly made, could not and did not prejudice the
lien of the intervener, Francisca Jose, for the debt due
her by the deceased (Mortgage Law, art. 33); and that the
mortgage of the property of the deceased by her heir,
Silvina Chio-Taysan, was subject to the prior lien of the
intervener, Francisca Jose, for the payment of her debt.

It is not necessary for us to consider the action of the

court below in ordering the foreclosure of the mortgage,
in so far as it affects the defendant Silvina Chio-Taysan
who did not appeal; but we think that the intervener, who
is seeking to subject the property of the deceased to the
payment of her debt in the administration proceedings
now pending, is clearly entitled to so much of the relief
prayed for as will have the effect of preventing the
application of the proceeds of the sale of this land under
foreclosure proceedings to the payment of debts
contracted by the heir until and unless it shall appear that
the residue of the estate of the deceased is sufficient to
satisfy her claim. Such provision for the protection of
her rights having been made, the other relief prayed for
by her may properly be denied, since a provision
subjecting the land in question to the payment of her
claim against the estate of Avelina Caballero, deceased,
fully and sufficiently protects her rights in the premises,
and her rights having been secured, she has no proper
interest in the rescission of the mortgage contract
between plaintiff and defendant, or the cancellation of
the inscription of the defendant's title as heir in the land
registry.
The judgment of the trial court should, therefore, be
modified in accordance with the foregoing principles,
and the record will be returned to the trial court where
judgment will be entered modifying the judgment, by
providing that the proceeds of the sale of the land under
the foreclosure proceedings will be deposited with the
clerk of the court, where it will be retained until the
amount of the debt due the intervener and unpaid in the
course of the administration of the estate of Avelina
Caballero shall have been ascertained, whereupon the
said funds shall be applied: first, to extinguish the unpaid
residue, if any, of the claim of the intervener; second, to
pay the debt due the plaintiff in this action; and finally,
the residue, if any, to be paid to the estate of the
deceased; the intervener to have her costs in this action
in both instances. So ordered.
SANTOS VS MANARANG 27 PHIL 213
Statute of Non Claims A rule of procedure requiring
creditors of a deceased person to present their claims
for examination and allowance within a specified
period, the purpose thereof being to settle the affairs of
the estate with dispatch, so that the residue may be
delivered to the persons entitled thereto without their
being afterwards called upon to respond in actions of
claims, which, under the ordinary statute of limitations,
have not yet prescribed.
Don Lucas de Ocampo died on November 18, 1906,
possessed of certain real and personal property which,
by his last will and testament dated July 26, 1906, he left

to his three children. The fourth clause of this will reads

as follows:
I also declare that I have contracted the debts
detailed below, and it is my desire that they may
be religiously paid by my wife and executors in
the form and at the time agreed upon with my
creditors.
Among the debts mentioned in the list referred to are
two in favor of the plaintiff, Isidro Santos; one due on
April 14, 1907, for P5,000, and various other described
as falling due at different dates (the dates are not given)
amounting to the sum of P2,454. The will was duly
probated and a committee was regularly appointed to
hear and determine such claims against the estate as
might be presented. This committee submitted its report
to the court on June 27, 1908. On July 14, 1908, the
plaintiff, Isidro Santos, presented a petition to the court
asking that the committee be required to reconvene and
pass upon his claims against the estate which were
recognized in the will of testator. This petition was
denied by the court, and on November 21, 1910, the
plaintiff instituted the present proceedings against the
administratrix of the estate to recover the sums
mentioned in the will as due him. Relief was denied in
the court below, and now appeals to this court.
In his first assignment of error, the appellant takes
exception to the action of the court in denying his
petition asking that the committee be reconvened to
consider his claim. In support of this alleged error
counsel say that it does not appear in the committee's
report that the publications required by section 687 of
the Code of Civil Procedure had been duly made. With
reference to this point the record affirmatively shows
that the committee did make the publications required by
law. It is further alleged that at the time the appellant
presented his petition the court had not approved the
report of the committee. If this were necessary we might
say that, although the record does not contain a formal
approval of the committee's report, such approval must
undoubtedly have been made, as will appear from an
inspection of the various orders of the court approving
the annual accounts of the administratrix, in which
claims allowed against the estate by the committee were
written off in accordance with its report. This is shown
very clearly from the court's order of August 1, 1912, in
which the account of the administratrix was approved
after reducing final payments of some of the claims
against the estate to agree with the amounts allowed by
the committee. It is further alleged that at the time this
petition was presented the administration proceedings
had not been terminated. This is correct.

In his petition of July 14, 1909, asking that the

committee be reconvened to consider his claims,
plaintiff states that his failure to present the said claims
to the committee was due to his belief that it was
unnecessary to do so because of the fact that the testator,
in his will, expressly recognized them and directed that
they should be paid. The inference is that had plaintiff's
claims not been mentioned in the will he would have
presented to the committee as a matter of course; that
plaintiff was held to believe by this express mention of
his claims in the will that it would be unnecessary to
present them to the committee; and that he did not
become aware of the necessity of presenting them to the
committee until after the committee had made its final
report.
Under these facts and circumstances, did the court err in
refusing to reconvene the committee for the purpose of
considering plaintiff's claim? The first step towards the
solution of this question is to determine whether
plaintiff's claims were such as a committee appointed to
hear claims against an estate is, by law, authorized to
pass upon. Unless it was such a claim plaintiff's
argument has no foundation. Section 686 empowers the
committee to try and decide claims which survive
against the executors and administrators, even though
they be demandable at a future day "except claims for
the possession of or title to real estate." Section 700
provides that all actions commenced against the
deceased person for the recovery of money, debt, or
damages, pending at the time the committee is
appointed, shall be discontinued, and the claims
embraced within such actions presented to the
committee. Section 703 provides that actions to recover
title or possession of real property, actions to recover
damages for injury to person or property, real and
personal, and actions to recover the possession of
specified articles of personal property, shall survive, and
may be commenced and prosecuted against the executor
or administrator; "but all other actions commenced
against the deceased before his death shall be
discontinued and the claims therein involved presented
before the committee as herein provided." Section 708
provides that a claim secured by a mortgage or other
collateral security may be abandoned and the claim
prosecuted before the committee, or the mortgage may
be foreclosed or the security be relied upon, and in the
event of a deficiency judgment, the creditor may, after
the sale of mortgage or upon the insufficiency of the
security, prove such deficiency before the committee on
claims. There are also certain provisions in section 746
et seq., with reference to the presentation of contingent
claims to the committee after the expiration of the time
allowed for the presentation of claims not contingent. Do
plaintiff's claims fall within any of these sections? They
are described in the will as debts. There is nothing in the

will to indicate that any or all of them are contingent

claims, claims for the possession of or title to real
property, damages for injury to person or property, real
or personal, or for the possession of specified articles of
personal property. Nor is it asserted by the plaintiff that
they do. The conclusion is that they were claims proper
to be considered by the committee.
This being true, the next point to determine is, when and
under what circumstances may the committee be
recalled to consider belated claims? Section 689
provides:
That court shall allow such time as the
circumstances of the case require for the
creditors to present their claims the committee
for examination and allowance; but not, in the
first instance, more than twelve months, or less
than six months; and the time allowed shall be
stated in the commission. The court may extend
the time as circumstances require, but not so that
the whole time shall exceed eighteen months.
It cannot be questioned that thus section supersedes the
ordinary limitation of actions provided for in chapter 3
of the Code. It is strictly confined, in its application, to
claims against the estate of deceased persons, and has
been almost universally adopted as part of the probate
law of the United States. It is commonly termed the
statute of nonclaims, and its purpose is to settle the
affairs of the estate with dispatch, so that residue may be
delivered to the persons entitled thereto without their
being afterwards called upon to respond in actions for
claims, which, under the ordinary statute of limitations,
have not yet prescribed.
The object of the law in fixing a definite period
within which claims must be presented is to
insure the speedy settling of the affairs of a
deceased person and the early delivery of the
property of the estate in the hands of the persons
entitled to receive it. (Estate of De Dios, 24 Phil.
Rep., 573.)
Due possibly to the comparative shortness of the period
of limitation applying to such claims as compared with
the ordinary statute of limitations, the statute of
nonclaims has not the finality of the ordinary statute of
limitations. It may be safely said that a saving provision,
more or less liberal, is annexed to the statute of
nonclaims in every jurisdiction where is found. In this
country its saving clause is found in section 690, which
reads as follows:
On application of a creditor who has failed to
present his claim, if made within six months

after the time previously limited, or, if a

committee fails to give the notice required by
this chapter, and such application is made before
the final settlement of the estate, the court may,
for cause shown, and on such terms as are
equitable, renew the commission and allow
further time, not exceeding one month, for the
committee to examine such claim, in which case
it shall personally notify the parties of the time
and place of hearing, and as soon as may be
make the return of their doings to the court.
If the committee fails to give the notice required, that is
a sufficient cause for reconvening it for further
consideration of claims which may not have been
presented before its final report was submitted to the
court. But, as stated above, this is not the case made by
the plaintiff, as the committee did give the notice
required by law. Where the proper notice has been given
the right to have the committee recalled for the
consideration of a belated claim appears to rest first
upon the condition that it is presented within six months
after the time previously limited for the presentation of
claims. In the present case the time previously limited
was six months from July 23, 1907. This allowed the
plaintiff until January 23, 1908, to present his claims to
the committee. An extension of this time under section
690 rested in the discretion of the court. (Estate of De
Dios, supra.) In other words, the court could extend this
time and recall the committee for a consideration of the
plaintiff's claims against the estate of justice required it,
at any time within the six months after January 23, 1908,
or until July 23, 1908. Plaintiff's petition was not
presented until July 14, 1909. The bar of the statute of
nonclaims is an conclusive under these circumstances as
the bar of the ordinary statute of limitations would be. It
is generally held that claims are not barred as to property
not included in the inventory. (Waughop vs. Bartlett, 165
III., 124; Estate of Reyes, 17 Phil. Rep., 188.) So also, as
indicated by this court in the case last cited, fraud would
undoubtedly have the same effect. These exceptions to
the operation of the statute are, of course, founded upon
the highest principles of equity. But what is the plea of
the plaintiff in this case? Simply this: That he was
laboring under a mistake of law a mistake which
could easily have been corrected had he sought to inform
himself; a lack of information as to the law governing
the allowance of claims against estate of the deceased
persons which, by proper diligence, could have been
remedied in ample to present the claims to the
committee. Plaintiff finally discovered his mistake and
now seeks to assert his right when they have been lost
through his own negligence. Ignorantia legis neminem
excusat. We conclude that the learned trial court made no
error in refusing to reconvene the committee for the

purpose of considering plaintiff's claims against the

estate.
In his second assignment of error the appellant insists
that the court erred in dismissing his petition filed on
November 21, 1910, wherein he asks that the
administratrix be compelled to pay over to him the
amounts mentioned in the will as debts due him. We
concede all that is implied in the maxim, dicat testor et
erit lex. But the law imposes certain restrictions upon the
testator, not only as to the disposition of his estate, but
also as to the manner in which he may make such
disposition. As stated in Rood on Wills, sec. 412: "Some
general rules have been irrevocably established by the
policy of the law, which cannot be exceeded or
transgressed by any intention of the testator, be it ever so
clearly expressed."
It may be safely asserted that no respectable authority
can be found which holds that the will of the testator
may override positive provisions of law and imperative
requirements of public policy. (Page on Wills, sec. 461.)
Impossible conditions and those contrary to law
and good morals shall be considered as not
imposed, . . . (Art. 792, Civil Code.)
Conceding for the moment that it was the testator's
desire in the present case that the debts listed by him in
his will should be paid without referring them to a
committee appointed by the court, can such a provision
be enforced? May the provisions of the Code of Civil
Procedure relating to the settlement of claims against an
estate by a committee appointed by the court be
superseded by the contents of a will?
It is evident from the brief outline of the sections
referred to above that the Code of Civil Procedure has
established a system for the allowance of claims against
the estates of decedents. Those are at least two
restrictions imposed by law upon the power of the
testator to dispose of his property, and which pro
tanto restrict the maxim that "the will of the testator law:
(1) His estate is liable for all legal obligations incurred
by him; and (2) he can not dispose of or encumber the
legal portion due his heirs by force of law. The former
take precedence over the latter. (Sec. 640, Code Civ,
Proc.) In case his estate is sufficient they must be paid.
(Sec, 734, id.) In case the estate is insolvent they must be
paid in the order named in section 735. It is hardly
necessary to say that a provision in an insolvent's will
that a certain debt be paid would not entitle it to
preference over other debts. But, if the express mention
of a debt in the will requires the administrator to pay it
without reference to the committee, what assurance is

there, in the case of an insolvent estate, that it will not

take precedence over preferred debts?
If it is unnecessary to present such claim to the
committee, the source of nonclaims is not applicable. It
is not barred until from four to ten years, according to its
classification in chapter 3 of the Code of Civil
Procedure, establishing questions upon actions. Under
such circumstances, when then the legal portion is
determined? If, in the meantime the estate has been
distributed, what security have the differences against
the interruption of their possession? Is the administrator
required to pay the amount stipulated in the will
regardless of its correctness? And, if not, what authority
has he to vise the claim? Section 706 of the Code of
Civil Procedure provides that an executor may, with the
approval of the court, compound with a debtor of
deceased for a debt due the estate, But he is nowhere
permitted or directed to deal with a creditor of the estate.
On the contrary, he is the advocate of the estate before
an impartial committee with quasi-judicial power to
determine the amount of the claims against the estate,
and, in certain cases, to equitably adjust the amounts
due. The administrator, representing the debtor estate,
and the creditor appear before this body as parties
litigant and, if either is dissatisfied with its decision, an
appeal to the court is their remedy. To allow the
administrator to examine and approve a claim against the
estate would put him in the dual role of a claimant and a
judge. The law in this jurisdiction has been so framed
that this may not occur. The most important restriction,
in this jurisdiction, on the disposition of property by will
are those provisions of the Civil Code providing for the
preservation of the legal portions due to heirs by force of
law, and expressly recognized and continued in force by
sections 614, 684, and 753 of the Code of Civil
Procedure. But if a debt is expressly recognized in the
will must be paid without its being verified, there is
nothing to prevent a partial or total alienation of the legal
portion by means of a bequest under a guise of a debt,
since all of the latter must be paid before the amount of
the legal portion can be determined.
We are aware that in some jurisdictions executors and
administrators are, by law, obligated to perform the
duties which, in this jurisdiction, are assign to the
committee on claims; that in some other jurisdictions it
is the probate court itself that performs these duties; that
in some jurisdictions the limitation upon the presentment
of claims for allowance is longer and, possibly, in some
shorter; and that there is a great divergence in the
classification of actions which survive and actions which
do not survive the death of the testator. It must be further
remembered that there are but few of the United States
which provide for heirs by force of law. These
differences render useless as authorities in this

jurisdiction many of the cases coming from the United

States. The restriction imposed upon the testator's power
to dispose of his property when they are heirs by force of
law is especially important. The rights of these heirs by
force law pass immediately upon the death of the
testator. (Art. 657, Civil Code.) The state intervenes and
guarantees their rights by many stringent provisions of
law to the extent mentioned in article 818 of the Civil
Code. Having undertaken the responsibility to deliver
the legal portion of the net assets of the estate to the
heirs by force of law, it is idle to talk of substituting for
the procedure provided by law for determining the legal
portion, some other procedure provided in the will of the
testator. The state cannot afford to allow the performance
of its obligations to be directed by the will of an
individual. There is but one instance in which the
settlement of the estate according to the probate
procedure provided in the Code of Civil Procedure may
be dispense with, and it applies only to intestate estates.
(Sec. 596, Code Civ. Proc.) A partial exemption from the
lawful procedure is also contained in section 644, when
the executor or administrator is the sole residuary
legatee. Even in such case, and although the testator
directs that no bond be given, the executor is required to
give a bond for the payment of the debts of the testator.
The facts of the present case do not bring it within either
of this sections. We conclude that the claims against the
estate in the case at bar were enforceable only when the
prescribed legal procedure was followed.
But we are not disposed to rest our conclusion upon this
phase of the case entirely upon legal grounds. On the
contrary we are strongly of the opinion that the
application of the maxim, "The will of the testator is the
law of the case," but strengthens our position so far as
the present case is concerned.
It will ordinarily be presumed in construing a
will that the testator is acquainted with the rules
of law, and that he intended to comply with them
accordingly. If two constructions of a will or a
part thereof are possible, and one of these
constructions is consistent with the law, and the
other is inconsistent, the presumption that the
testator intended to comply with the law will
compel that construction which is consistent
with the law to be adopted. (Page on Wills, sec.
465.)
Aside from this legal presumption, which we believe
should apply in the present case as against any
construction of the will tending to show an intention of
the testator that the ordinary legal method of probating
claims should be dispensed with, it must be remembered
that the testator knows that the execution of his will in
no way affects his control over his property. The dates of

his will and of his death may be separated by a period of

time more or less appreciable. In the meantime, as the
testator well knows, he may acquire or dispose of
property, pay or assume additional debts, etc. In the
absence of anything to the contrary, it is only proper to
presume that the testator, in his will, is treating of his
estate at the time and in the condition it is in at his death.
Especially is this true of his debts. Debts may accrue and
be paid in whole or in part between the time the will is
made and the death of the testator. To allow a debt
mentioned in the will in the amount expressed therein on
the ground that such was the desire of the testator, when,
in fact, the debt had been wholly or partly paid, would
be not only unjust to the residuary heirs, but a reflection
upon the good sense of the testator himself. Take the
present case for example. It would be absurd to say that
the testator knew what the amount of his just debt would
be at a future and uncertain date. A mere comparison of
the list of the creditors of the testator and the amounts
due them as described in his will, with the same list and
amounts allowed by the committee on claims, shows that
the testator had creditors at the time of his death not
mention in the will at all. In other instances the amounts
due this creditors were either greater or less than the
amounts mentioned as due them in the will. In fact, of
those debts listed in the will, not a single one was
allowed by the committee in the amount named in the
will. This show that the testator either failed to list in his
will all his creditors and that, as to those he did include,
he set down an erroneous amount opposite their names;
or else, which is the only reasonable view of the matter,
he overlooked some debts or contracted new ones after
the will was made and that as to others he did include he
made a partial payments on some and incurred additional
indebtedness as to others.
While the testator expresses the desire that his debts be
paid, he also expressly leaves the residue of his estate, in
equal parts, to his children. Is it to be presumed that he
desired to overpay some of his creditors notwithstanding
his express instructions that his own children should
enjoy the net assets of his estate after the debts were
paid? Again, is the net statement of the amount due some
of his creditors and the omission all together of some of
his creditors compatible with his honorable and
commendable desire, so clearly expressed in his will,
that all his debts be punctually paid? We cannot conceive
that such conflicting ideas were present in the testator's
mind when he made his will.
Again, suppose the testator erroneously charged himself
with a debt which he was under no legal or even moral
obligation to pay. The present case suggests, if it does
not actually present, such a state of affairs. Among the
assets of the estate mentioned in the will is a parcel of
land valued at P6,500; while in the inventory of the

administratrix the right to repurchase this land from one

Isidro Santos is listed as an asset. Counsel for the
administratrix alleges that he is prepared to prove that
this is the identical plaintiff in the case at bar; that the
testator erroneously claimed the fee of this land in his
last will and stated Santos' rights in the same as a mere
debt due him of P5,000; that in reality, the only asset of
the testator regard to this land was the value of the right
to repurchase, while the ownership of the land, subject
only to that right of redemption, belonged to Santos; that
the right to repurchase this land expired in 1907, after
the testator's death. Assuming, without in the least
asserting, that such are the underlying facts of this case,
the unjust consequences of holding that a debt expressly
mentioned in the will may be recovered without being
presented to the committee on claims, is at once
apparent. In this supposed case, plaintiff needed only
wait until the time for redemption of the land had
expired, when he would acquired an absolute title to the
land, and could also have exacted the redemption price.
Upon such a state of facts, the one item of P5,000 would
be a mere fictitious debt, and as the total net value of the
estate was less than P15,000, the legal portion of the
testator's children would be consumed in part in the
payment of this item. Such a case cannot occur if the
prescribed procedure is followed of requiring of such
claims be viseed by the committee on claims.
The direction in the will for the executor to pay
all just debts does not mean that he shall pay
them without probate. There is nothing in the
will to indicate that the testator in tended that his
estate should be administered in any other than
the regular way under the statute, which requires
"all demands against the estates of the deceased
persons," "all such demands as may be
exhibited," etc. The statute provides the very
means for ascertaining whether the claims
against
the
estate
or
just
debts.
(Kaufman vs. Redwine, 97 Ark., 546.)
See also Collamore vs. Wilder (19
O'Neil vs. Freeman (45 N. J. L., 208).

Kan.,

67);

The petition of the plaintiff filed on November 21, 1910,

wherein he asks that the administratrix be compelled to
pay over to him the amounts mentioned in the will as
debts due him appears to be nothing more nor less than a
complaint instituting an action against the administratrix
for the recovery of the sum of money. Obviously, the
plaintiff is not seeking possession of or title to real
property or specific articles of personal property.
When a committee is appointed as herein
provided, no action or suit shall be commenced
or prosecute against the executor or

administrator upon a claim against the estate to

recover a debt due from the state; but actions to
recover the seizing and possession of real estate
and personal chattels claimed by the estate may
be commenced against him. (Sec. 699, Code
Civ. Proc.)
The sum of money prayed for in the complaint must be
due the plaintiff either as a debt of a legacy. If it is a
debt, the action was erroneously instituted against the
administratrix. Is it a legacy?
Plaintiff's argument at this point becomes obviously
inconsistent. Under his first assignment of error he
alleges that the committee on claims should have been
reconvened to pass upon his claim against the estate. It is
clear that this committee has nothing to do with legacies.
It is true that a debt may be left as a legacy, either to the
debtor (in which case it virtually amounts to a release),
or to a third person. But this case can only arise when
the debt is an asset of the estate. It would be absurd to
speak of a testator's leaving a bare legacy of his own
debt. (Arts. 866, 878, Civil Code.) The creation of a
legacy depends upon the will of the testator, is an act of
pure beneficence, has no binding force until his death,
and may be avoided in whole or in part by the mere with
whim of the testator, prior to that time. A debt arises
from an obligation recognized by law (art. 1089, Civil
Code) and once established, can only be extinguished in
a lawful manner. (Art. 1156, id.) Debts are demandable
and must be paid in legal tender. Legacies may, and
often do, consist of specific articles of personal property
and must be satisfied accordingly. In order to collect as
legacy the sum mentioned in the will as due him, the
plaintiff must show that it is in fact a legacy and not a
debt. As he has already attempted to show that this sum
represents a debt, it is an anomaly to urge now it is a
legacy.
Was it the intention of the testator to leave the plaintiff a
legacy of P7,454? We have already touched upon this
question. Plaintiff's claim is described by the testator as a
debt. It must be presumed that he used this expression in
its ordinary and common acceptation; that is, a legal
liability existing in favor of the plaintiff at the time the
will was made, and demandable and payable in legal
tender. Had the testator desired to leave a legacy to the
plaintiff, he would have done so in appropriate language
instead of including it in a statement of what he owed
the plaintiff. The decedent's purpose in listing his debts
in his will is set forth in the fourth clause of the will,
quoted above. There is nothing contained in that clause
which indicates, even remotely, a desire to pay his
creditors more than was legally due them.

A construction leading to a legal, just and

sensible result is presumed to be correct, as
against one leading to an illegal, unnatural, or
absurd effect. (Rood on Wills, sec. 426.)
The testator, in so many words, left the total net assets of
his estate, without reservation of any kind, to his
children per capita. There is no indication that he desired
to leave anything by way of legacy to any other person.
These considerations clearly refute the suggestion that
the testator intended to leave plaintiff any thing by way
of legacy. His claim against the estate having been a
simple debt, the present action was improperly instituted
against the administratrix. (Sec. 699, Code Civ. Proc.)
But it is said that the plaintiff's claims should be
considered as partaking of the nature of a legacy and
disposed of accordingly. If this be perfect then the
plaintiff would receive nothing until after all debts had
been paid and the heirs by force of law had received
their shares. From any point of view the inevitable result
is that there must be a hearing sometime before some
tribunal to determine the correctness of the debts
recognized in the wills of deceased persons. This
hearing, in the first instance, can not be had before the
court because the law does not authorize it. Such debtors
must present their claims to the committee, otherwise
their claims will be forever barred.
For the foregoing reasons the orders appealed from are
affirmed, with costs against the appellant.
METROPOLITAN TRUST AND COMPANY VS
ABSOLUTE MANAGEMENT CORPORATION 688
SCRA 225
Factual Antecedents
On October 5, 2000, Sherwood Holdings Corporation,
Inc. (SHCI) filed a complaint for sum of money against
Absolute Management Corporation (AMC). The
complaint was docketed as Civil Case No. Q-00-42105
and was assigned to the RTC of Quezon City, Branch
80.6
SHCI alleged in its complaint that it made advance
payments to AMC for the purchase of 27,000 pieces of
plywood and 16,500 plyboards in the sum
of P12,277,500.00, covered by Metrobank Check Nos.
1407668502, 140768507, 140768530, 140768531,
140768532, 140768533 and 140768534. These checks
were all crossed, and were all made payable to AMC.
They were given to Chua, AMCs General Manager, in
1998.7

Chua died in 1999, 8 and a special proceeding for the

settlement of his estate was commenced before the RTC
of Pasay City. This proceeding was pending at the time
AMC filed its answer with counterclaims and third-party
complaint.9
SHCI made demands on AMC, after Chuas death, for
allegedly undelivered items worth P8,331,700.00.
According to AMC, these transactions could not be
found in its records. Upon investigation, AMC
discovered that in 1998, Chua received from SHCI 18
Metrobank checks worth P31,807,500.00. These were all
payable to AMC and were crossed or "for payees
account only." 10
In its answer with counterclaims and third-party
complaint,11 AMC averred that it had no knowledge of
Chuas transactions with SHCI and it did not receive any
money from the latter. AMC also asked the RTC to hold
Metrobank liable for the subject checks in case it is
adjudged liable to SHCI.
Metrobank
filed
a
motion
for
bill
of
particulars,12 seeking to clarify certain ambiguous
statements in AMCs answer. The RTC granted the
motion but AMC failed to submit the required bill of
particulars. Hence, Metrobank filed a motion to strike
out the third-party complaint.13
In the meantime, Metrobank filed a motion to
dismiss14 against AMC on the ground that the latter
engaged in prohibited forum shopping. According to
Metrobank, AMCs claim against it is the same claim
that it raised against Chuas estate in Special
Proceedings No. 99-0023 before the RTC of Pasay City,
Branch 112. The RTC subsequently denied this motion. 15
The RTC of Quezon City opted to defer
consideration16 of Metrobanks motion to strike out
third-party complaint17 and it instead granted AMCs
motion for leave to serve written interrogatories on the
third-party defendant.18 While Metrobank filed its
answer to the written interrogatories, AMC was again
directed by the RTC, in an order 19 dated August 13,
2003, to submit its bill of particulars. Instead, AMC filed
a motion for reconsideration20 which was denied in an
order21 dated October 28, 2003. AMC still did not file its
bill of particulars. The RTC, on the other hand, did not
act on Metrobanks motion to strike out AMCs thirdparty complaint.22
In its answer23 dated December 1, 2003, Metrobank
admitted that it deposited the checks in question to the
account of Ayala Lumber and Hardware, a sole
proprietorship Chua owned and managed. The deposit

was allegedly done with the knowledge and consent of

AMC. According to
Metrobank, Chua then gave the assurance that the
arrangement for the handling of the checks carried
AMCs consent. Chua also submitted documents
showing his position and interest in AMC. These
documents, as well as AMCs admission in its answer
that it allowed Chua to manage AMC with a relative free
hand, show that it knew of Chuas arrangement with
Metrobank. Further, Chuas records show that the
proceeds of the checks were remitted to AMC which
cannot therefore now claim that it did not receive these
proceeds.
Metrobank also raised the defense of estoppel.
According to Metrobank, AMC had knowledge of its
arrangements with Chua for several years. Despite this
arrangement, AMC did not object to nor did it call the
attention of Metrobank about Chuas alleged lack of
authority to deposit the checks in Ayala Lumber and
Hardwares account. At this point, AMC is already
estopped from questioning Chuas authority to deposit
these checks in Ayala Lumber and Hardwares account.
Lastly, Metrobank asserted that AMC gave Chua
unbridled control in managing AMCs affairs. This
measure of control amounted to gross negligence that
was the proximate cause of the loss that AMC must now
bear.
Subsequently, Metrobank filed a motion for leave to
admit fourth-party complaint24 against Chuas estate. It
alleged that Chuas estate should reimburse Metrobank
in case it would be held liable in the third-party
complaint filed against it by AMC.
The RTCs Ruling
In an order25 dated May 7, 2004, the RTC denied
Metrobanks motion. It likewise denied Metrobanks
motion for reconsideration in an order26 dated July 7,
2004.
The RTC categorized Metrobanks allegation in the
fourth-party complaint as a "cobro de lo indebido" 27 a
kind of quasi-contract that mandates recovery of what
has been improperly paid. Quasi-contracts fall within the
concept of implied contracts that must be included in the
claims required to be filed with the judicial settlement of
the deceaseds estate under Section 5, Rule 86 of the
Rules of Court. As such claim, it should have been filed
in Special Proceedings No. 99-0023, not before the RTC
as a fourth-party complaint. The RTC, acting in the
exercise of its general jurisdiction, does not have the
authority to adjudicate the fourth-party complaint. As a

trial court hearing an ordinary action, it cannot resolve

matters pertaining to special proceedings because the
latter is subject to specific rules.

the CA. For this reason, the petition should have been
dismissed outright.
Issues

Metrobank responded to the RTC ruling by filing a

petition for certiorari28 under Rule 65 before the CA.

The parties arguments, properly joined, present to us the

following issues:

The CAs Ruling

The CA affirmed the RTCs ruling that Metrobanks
fourth-party complaint should have been filed in Special
Proceedings No. 99-0023.29 According to the CA, the
relief that Metrobank prayed for was based on a quasicontract and was a money claim categorized as an
implied contract that should be filed under Section 5,
Rule 86 of the Rules of Court.
Based on the statutory construction principle of lex
specialis derogat generali, the CA held that Section 5,
Rule 86 of the Rules of Court is a special provision that
should prevail over the general provisions of Section 11,
Rule 6 of the Rules of Court. The latter applies to money
claims in ordinary actions while a money claim against a
person already deceased falls under the settlement of his
estate that is governed by the rules on special
proceedings. If at all, rules for ordinary actions only
apply suppletorily to special proceedings.
The Present Petition
In
its
present
petition
for
review
on
certiorari,30 Metrobank asserts that it should be allowed
to file a fourth-party complaint against Chuas estate in
the proceedings before the RTC; its fourth-party
complaint was filed merely to enforce its right to be
reimbursed by Chuas estate in case Metrobank is held
liable to AMC. Hence, Section 11, Rule 6 of the Rules of
Court should apply.
AMC, in its comment,31 maintains the line that the CA
and the RTC rulings should be followed, i.e., that
Metrobanks claim is a quasi-contract that should be
filed as a claim under Section 5, Rule 86 of the Rules of
Court.
AMC also challenges the form of Metrobanks petition
for failure to comply with Section 4, Rule 45 of the
Rules of Court. This provision requires petitions filed
before the Supreme Court to be accompanied by "such
material portions of the record as would support the
petition."
According to AMC, the petitions annexes are mostly
Metrobanks pleadings and court issuances. It did not
append all relevant AMC pleadings before the RTC and

1) Whether the petition for review on certiorari

filed by Metrobank before the Supreme Court
complies with Section 4, Rule 45 of the Rules of
Court; and
2) Whether Metrobanks fourth-party complaint
against Chuas estate should be allowed.
The Courts Ruling
The Present Petition Complies With Section 4, Rule 45
of the Rules of Court
AMC posits that Metrobanks failure to append relevant
AMC pleadings submitted to the RTC and to the CA
violated Section 4, Rule 45 of the Rules of Court, 32 and
is a sufficient ground to dismiss the petition under
Section 5, Rule 45 of the Rules of Court.33
We disagree with AMCs position.
In F.A.T. Kee Computer Systems, Inc. v. Online
Networks International, Inc.,34 Online Networks
International, Inc. similarly assailed F.A.T. Kee
Computer Systems, Inc.s failure to attach the transcript
of stenographic notes (TSN) of the RTC proceedings,
and claimed this omission to be a violation of Section 4,
Rule 45 of the Rules of Court that warranted the
petitions dismissal. The Court held that the defect was
not fatal, as the TSN of the proceedings before the RTC
forms part of the records of the case. Thus, there was no
incurable omission that warranted the outright dismissal
of the petition.
The Court significantly pointed out in F.A.T. Kee that
the requirement in Section 4, Rule 45 of the Rules of
Court is not meant to be an absolute rule whose violation
would
automatically lead
to
the
petitions
dismissal.35 The Rules of Court has not been intended to
be totally rigid. In fact, the Rules of Court provides that
the Supreme Court "may require or allow the filing of
such pleadings, briefs, memoranda or documents as it
may deem necessary within such periods and under such
conditions as it may consider appropriate"; 36 and "[i]f the
petition is given due course, the Supreme Court may
require the elevation of the complete record of the case
or specified parts thereof within fifteen (15) days from

notice."37 These provisions are in keeping with the

overriding standard that procedural rules should be
liberally construed to promote their objective and to
assist the parties in obtaining a just, speedy and
inexpensive determination of every action or
proceeding.38
Under this guiding principle, we do not see Metrobanks
omission to be a fatal one that should warrant the
petitions outright dismissal. To be sure, the omission to
submit the adverse partys pleadings in a petition before
the Court is not a commendable practice as it may lead
to an unduly biased narration of facts and arguments that
masks the real issues before the Court. Such skewed
presentation could lead to the waste of the Courts time
in sifting through the maze of the parties narrations of
facts and arguments and is a danger the Rules of Court
seeks to avoid.
Our examination of Metrobanks petition shows that it
contains AMCs opposition to its motion to admit fourthparty complaint among its annexes. The rest of the
pleadings have been subsequently submitted as
attachments in Metrobanks Reply. A reading of these
pleadings shows that their arguments are the same as
those stated in the orders of the trial court and the Court
of Appeals. Thus, even if Metrobanks petition did not
contain some of AMCs pleadings, the Court still had the
benefit of a clear narration of facts and arguments
according to both parties perspectives. In this broader
view, the mischief that the Rules of Court seeks to avoid
has not really been present. If at all, the omission is not a
grievous one that the spirit of liberality cannot address.
The Merits of the Main Issue
The main issue poses to us two essential points that must
be addressed. First, are quasi-contracts included in
claims that should be filed pursuant to Rule 86, Section
5 of the Rules of Court? Second, if so, is Metrobanks
claim against the Estate of Jose Chua based on a quasicontract?
Quasi-contracts are included in claims that should be
filed under Rule 86, Section 5 of the Rules of Court
In Maclan v. Garcia,39 Gabriel Maclan filed a civil case
to recover from Ruben Garcia the necessary expenses he
spent as possessor of a piece of land. Garcia acquired the
land as an heir of its previous owner. He set up the
defense that this claim should have been filed in the
special proceedings to settle the estate of his
predecessor. Maclan, on the other hand, contended that
his claim arises from law and not from contract, express
or implied. Thus, it need not be filed in the settlement of
the estate of Garcias predecessor, as mandated by

Section 5, Rule 87 of the Rules of Court (now Section 5,

Rule 86).
The Court held under these facts that a claim for
necessary expenses spent as previous possessor of the
land is a kind of quasi-contract. Citing Leung Ben v.
OBrien,40 it explained that the term "implied contracts,"
as used in our remedial law, originated from the common
law where obligations derived from quasi-contracts and
from law are both considered as implied contracts. Thus,
the term quasi-contract is included in the concept
"implied contracts" as used in the Rules of Court.
Accordingly, liabilities of the deceased arising from
quasi-contracts should be filed as claims in the
settlement of his estate, as provided in Section 5, Rule
86 of the Rules of Court.41
Metrobanks fourth-party complaint is based on quasicontract
Both the RTC and the CA described Metrobanks claim
against Chuas estate as one based on quasi-contract. A
quasi-contract involves a juridical relation that the law
creates on the basis of certain voluntary, unilateral and
lawful acts of a person, to avoid unjust enrichment. 42 The
Civil Code provides an enumeration of quasicontracts,43 but the list is not exhaustive and merely
provides examples.44
According to the CA, Metrobanks fourth-party
complaint falls under the quasi-contracts enunciated in
Article 2154 of the Civil Code. 45 Article 2154 embodies
the concept "solutio indebiti" which arises when
something is delivered through mistake to a person who
has no right to demand it. It obligates the latter to return
what has been received through mistake.46
Solutio indebiti, as defined in Article 2154 of the Civil
Code, has two indispensable requisites: first, that
something has been unduly delivered through mistake;
and second, that something was received when there was
no right to demand it.47
In its fourth-party complaint, Metrobank claims that
Chuas estate should reimburse it if it becomes liable on
the checks that it deposited to Ayala Lumber and
Hardwares account upon Chuas instructions.
This fulfills the requisites of solutio indebiti. First,
Metrobank acted in a manner akin to a mistake when it
deposited the AMC checks to Ayala Lumber and
Hardwares account; because of Chuas control over
AMCs operations, Metrobank assumed that the checks
payable to AMC could be deposited to Ayala Lumber
and Hardwares account. Second, Ayala Lumber and
Hardware had no right to demand and receive the checks

that were deposited to its account; despite Chuas control

over AMC and Ayala Lumber and Hardware, the two
entities are distinct, and checks exclusively and
expressly payable to one cannot be deposited in the
account of the other. This disjunct created an obligation
on the part of Ayala Lumber and Hardware, through its
sole proprietor, Chua, to return the amount of these
checks to Metrobank.
The Court notes, however, that its description of
Metrobanks fourth-party complaint as a claimclosely
analogous to solutio indebiti is only to determine the
validity of the lower courts orders denying it. It is not an
adjudication determining the liability of Chuas estate
against Metrobank. The appropriate trial court should
still determine whether Metrobank has a lawful claim
against Chuas estate based on quasi-contract.
Metrobanks fourth-party complaint, as a contingent
claim, falls within the claims that should be filed under
Section 5, Rule 86 of the Rules of Court
A distinctive character of Metrobanks fourth-party
complaint is its contingent nature the claim depends on
the possibility that Metrobank would be adjudged liable
to AMC, a future event that may or may not happen.
This characteristic unmistakably marks the complaint as
a contingent one that must be included in the claims
falling under the terms of Section 5, Rule 86 of the Rules
of Court:
Sec. 5. Claims which must be filed under the notice. If
not filed, barred; exceptions. All claims for money
against the decedent, arising from contract, express or
implied, whether the same be due, not due, or
contingent, all claims for funeral expenses and expenses
for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the
time limited in the notice. [italics ours]
Specific provisions of Section 5, Rule 86 of the Rules of
Court prevail over general provisions of Section 11, Rule
6 of the Rules of Court
Metrobank argues that Section 11, Rule 6 of the Rules of
Court should apply because it impleaded Chuas estate
for reimbursement in the same transaction upon which it
has been sued by AMC. On this point, the Court supports
the conclusion of the CA, to wit:
Notably, a comparison of the respective provisions of
Section 11, Rule 6 and Section 5, Rule 86 of the Rules of
Court readily shows that Section 11, Rule 6 applies to
ordinary civil actions while Section 5, Rule 86
specifically applies to money claims against the estate.
The specific provisions of Section 5, Rule 86 x x x must

therefore prevail over the general provisions of Section

11, Rule 6.48
We read with approval the CAs use of the statutory
construction principle of lex specialis derogat generali,
leading to the conclusion that the specific provisions of
Section 5, Rule 86 of the Rules of Court should prevail
over the general provisions of Section 11, Rule 6 of the
Rules of Court; the settlement of the estate of deceased
persons (where claims against the deceased should be
filed) is primarily governed by the rules on special
proceedings, while the rules provided for ordinary
claims, including Section 11, Rule 6 ofthe Rules of
Court, merely apply suppletorily.49
In sum, on all counts in the considerations material to
the issues posed, the resolution points to the affirmation
of the assailed CA decision and resolution. Metrobank's
claim in its fourth-party complaint against Chua's estate
is based on quasi-contract. It is also a contingent claim
that depends on another event. Both belong to the
category of claims against a deceased person that should
be filed under Section 5, Rule 86 of the Rules of Comi
and, as such, should have been so filed in Special
Proceedings No. 99-0023.
WHEREFORE, premises considered, we hereby DENY
the petition for lack of merit. The decision of the Court
of Appeals dated August 25, 2005, holding that the
Regional Trial Court of Quezon City, Branch 80, did not
commit grave abuse of discretion in denying
Metropolitan Bank & Trust Company's motion for leave
to admit fourth-party complaint Is AFFIRMED. Costs
against Metropolitan Bank & Trust Company.
HEIRS OF THE LATE SPS. FLAVIANO
MAGSALANG VS MANILA BANKING CORP GR
NO. 1711206 SEPTEMBER 23, 2013
SUMMARY: Sps. Maglasang obtained a credit line from
MBC secured by real estate mortgage. When Flaviano
Maglasang died, his son Edgar was appointed as Attyin-Fact by Flavianos heirs. He filed a petition for letters
of administration of Flavianos intestate estate which the
probate court granted. Court issued a Notice to
Creditors for filing of money claims against the estate.
MBC notified the court of its claim. When the court
terminated the proceedings and executed an extrajudicial partition over the properties, the loan
obligations owed to MBC remained unsatisfied though
the court recognized the rights of MBC to foreclose the
mortgage. MBC extrajudicially foreclosed the mortgage;
however, after auction sale, a deficiency remained on
Maglasangs obligation. Thus, it filed a suit to recover
the deficiency. RTC ruled in their favor so Maglasangs

appealed to CA contending that under Remedies

available to MBC, Sec. 7, Rule 86 of ROC are
alternative and exclusive, such that the election of one
operates as a waiver of the others and since MBC filed a
claim in the probate court, it has abandoned its right to
foreclose the property and is barred from recovering any
deficiency. CA denied the appeal and contended that
Act. 3135 applies which allows MBC to extrajudicially
foreclose and recover the deficiency. It was HELD that
MBC had a right to extrajudicially foreclose the
property by it cannot recover the deficiency. Both Sec. 7,
rule 86 of ROC includes extrajudicial foreclosure under
Act. 3135. However, upon choosing said remedy, the
creditor waives his right to recovery the deficiency.
When MBC sought to extrajudicially foreclose the
mortgage of the properties previously belonging to Sps.
Maglasang and it therefore, availed of the third option
waiving its right to recovery the deficiency.
DOCTRINE: There are 3 remedies/options by secured
creditor under Sec. 7, Rule 86; a) waive the mortgage
and claim the entire debt from the estate of the
mortgagor as an ordinary claim; b) foreclose the
mortgage judicially and prove the deficiency as an
ordinary claim; and c) rely on the mortgage exclusively,
or other security and foreclose the same before it is
barred by prescription, without the right to file a claim
for any deficiency. These may be ALTERNATIVELY
adopted for the satisfaction of his indebtedness.
However, these remedies are distinct, independent and
mutually EXCLUSIVE from each other; the election of
on effectively BARS the exercise of the others.
Sec. 7, Rule 86 lays down the option for the secured
creditor to claim against the estate and, according to
jurisprudence, the availment of the 3rd option BARS HIM
FROM CLAIMING ANY DEFICIENCY amount. After
3rd option is chosen, the procedure governing the
manner in which the extra-judicial foreclosure should
proceed and would still be governed by the provisions of
Act. No. 3135.
UNION BANK VS SANTIBANEZ AND ARIOLA
GR NO. 149926 FEBRUARY 23, 2005
On May 31, 1980, the First Countryside Credit
Corporation (FCCC) and Efraim M. Santibaez entered
into a loan agreement [3] in the amount of P128,000.00.
The amount was intended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural
All-Purpose Diesel Tractor. In view thereof, Efraim and
his son, Edmund, executed a promissory note in favor of
the FCCC, the principal sum payable in five equal
annual amortizations of P43,745.96 due on May 31,
1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim

entered into another loan agreement, [4] this time in the
amount of P123,156.00. It was intended to pay the
balance of the purchase price of another unit of Ford
6600 Agricultural All-Purpose Diesel Tractor, with
accessories, and one (1) unit Howard Rotamotor Model
AR 60K. Again, Efraim and his son, Edmund, executed
a promissory note for the said amount in favor of the
FCCC. Aside from such promissory note, they also
signed a Continuing Guaranty Agreement [5] for the loan
dated December 13, 1980.
Sometime in February 1981, Efraim died, leaving a
holographic will.[6] Subsequently in March 1981, testate
proceedings commenced before the RTC of Iloilo City,
Branch 7, docketed as Special Proceedings No. 2706. On
April 9, 1981, Edmund, as one of the heirs, was
appointed as the special administrator of the estate of the
decedent.[7] During the pendency of the testate
proceedings, the surviving heirs, Edmund and his sister
Florence Santibaez Ariola, executed a Joint
Agreement[8] dated July 22, 1981, wherein they agreed to
divide between themselves and take possession of the
three (3) tractors; that is, two (2) tractors for Edmund
and one (1) tractor for Florence. Each of them was to
assume the indebtedness of their late father to FCCC,
corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with
Assumption of Liabilities[9] was executed by and
between FCCC and Union Savings and Mortgage Bank,
wherein the FCCC as the assignor, among others,
assigned all its assets and liabilities to Union Savings
and Mortgage Bank.
Demand letters[10] for the settlement of his account
were sent by petitioner Union Bank of the Philippines
(UBP) to Edmund, but the latter failed to heed the same
and refused to pay. Thus, on February 5, 1988, the
petitioner filed a Complaint[11] for sum of money against
the heirs of Efraim Santibaez, Edmund and Florence,
before the RTC of Makati City, Branch 150, docketed as
Civil Case No. 18909. Summonses were issued against
both, but the one intended for Edmund was not served
since he was in the United States and there was no
information on his address or the date of his return to the
Philippines.[12] Accordingly, the complaint was narrowed
down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S.
Ariola filed her Answer[13] and alleged that the loan
documents did not bind her since she was not a party
thereto. Considering that the joint agreement signed by
her and her brother Edmund was not approved by the
probate court, it was null and void; hence, she was not
liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and reraffled to the RTC of Makati City, Branch 63.

[14]

Consequently, trial on the merits ensued and a

decision was subsequently rendered by the court
dismissing the complaint for lack of merit. The decretal
portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered
DISMISSING the complaint for lack of merit. [15]
The trial court found that the claim of the petitioner
should have been filed with the probate court before
which the testate estate of the late Efraim Santibaez was
pending, as the sum of money being claimed was an
obligation incurred by the said decedent. The trial court
also found that the Joint Agreement apparently executed
by his heirs, Edmund and Florence, on July 22, 1981,
was, in effect, a partition of the estate of the decedent.
However, the said agreement was void, considering that
it had not been approved by the probate court, and that
there can be no valid partition until after the will has
been probated. The trial court further declared that
petitioner failed to prove that it was the now defunct
Union Savings and Mortgage Bank to which the FCCC
had assigned its assets and liabilities. The court also
agreed to the contention of respondent Florence S.
Ariola that the list of assets and liabilities of the FCCC
assigned to Union Savings and Mortgage Bank did not
clearly refer to the decedents account. Ruling that the
joint agreement executed by the heirs was null and void,
the trial court held that the petitioners cause of action
against respondent Florence S. Ariola must necessarily
fail.
The petitioner appealed from the RTC decision and
elevated its case to the Court of Appeals (CA), assigning
the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING
THAT THE JOINT AGREEMENT
(EXHIBIT A) SHOULD BE APPROVED
BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING
THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS UNTIL
AFTER THE WILL HAS BEEN
PROBATED.
3. THE COURT A QUO ERRED IN NOT
FINDING THAT THE DEFENDANT
HAD WAIVED HER RIGHT TO HAVE
THE CLAIM RE-LITIGATED IN THE
ESTATE PROCEEDING.[16]
The petitioner asserted before the CA that the
obligation of the deceased had passed to his legitimate
children and heirs, in this case, Edmund and Florence;
the unconditional signing of the joint agreement marked
as Exhibit A estopped respondent Florence S. Ariola, and

that she cannot deny her liability under the said

document; as the agreement had been signed by both
heirs in their personal capacity, it was no longer
necessary to present the same before the probate court
for approval; the property partitioned in the agreement
was not one of those enumerated in the holographic will
made by the deceased; and the active participation of the
heirs, particularly respondent Florence S. Ariola, in the
present ordinary civil action was tantamount to a waiver
to re-litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola
maintained that the money claim of the petitioner should
have been presented before the probate court. [17]
The appellate court found that the appeal was not
meritorious and held that the petitioner should have filed
its claim with the probate court as provided under
Sections 1 and 5, Rule 86 of the Rules of Court. It
further held that the partition made in the agreement was
null and void, since no valid partition may be had until
after the will has been probated. According to the CA,
page 2, paragraph (e) of the holographic will covered the
subject properties (tractors) in generic terms when the
deceased referred to them as all other properties.
Moreover, the active participation of respondent
Florence S. Ariola in the case did not amount to a
waiver. Thus, the CA affirmed the RTC decision.
SO ORDERED.[18]
In the present recourse, the petitioner ascribes the
following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN
FINDING THAT THE JOINT AGREEMENT SHOULD
BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING
THAT THERE CAN BE NO VALID PARTITION
AMONG THE HEIRS OF THE LATE EFRAIM
SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN
PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT
FINDING THAT THE RESPONDENT HAD WAIVED
HER RIGHT TO HAVE THE CLAIM RE-LITIGATED
IN THE ESTATE PROCEEDING.
IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY

AND SEVERALLY LIABLE WITH THE PRINCIPAL
DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE
STRENGTH OF THE CONTINUING GUARANTY
AGREEMENT EXECUTED
IN FAVOR OF
PETITIONER-APPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980
IN THE SUM OF P128,000.00 AND DECEMBER 13,
1980
IN
THE
AMOUNT
OF P123,000.00
CATEGORICALLY ESTABLISHED THE FACT THAT
THE RESPONDENTS BOUND THEMSELVES
JOINTLY AND SEVERALLY LIABLE WITH THE
LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF
PETITIONER UNION BANK.[19]
The petitioner claims that the obligations of the
deceased were transmitted to the heirs as provided in
Article 774 of the Civil Code; there was thus no need for
the probate court to approve the joint agreement where
the heirs partitioned the tractors owned by the deceased
and assumed the obligations related thereto. Since
respondent Florence S. Ariola signed the joint agreement
without any condition, she is now estopped from
asserting any position contrary thereto. The petitioner
also points out that the holographic will of the deceased
did not include nor mention any of the tractors subject of
the complaint, and, as such was beyond the ambit of the
said will. The active participation and resistance of
respondent Florence S. Ariola in the ordinary civil action
against the petitioners claim amounts to a waiver of the
right to have the claim presented in the probate
proceedings, and to allow any one of the heirs who
executed the joint agreement to escape liability to pay
the value of the tractors under consideration would be
equivalent to allowing the said heirs to enrich
themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of
both the trial and appellate courts failed to consider the
fact that respondent Florence S. Ariola and her brother
Edmund executed loan documents, all establishing
the vinculum juris or the legal bond between the late
Efraim Santibaez and his heirs to be in the nature of a
solidary obligation. Furthermore, the Promissory Notes
dated May 31, 1980 and December 13, 1980 executed by
the late Efraim Santibaez, together with his heirs,
Edmund and respondent Florence, made the obligation
solidary as far as the said heirs are concerned. The
petitioner also proffers that, considering the express
provisions of the continuing guaranty agreement and the
promissory notes executed by the named respondents,
the latter must be held liable jointly and severally liable
thereon. Thus, there was no need for the petitioner to file
its money claim before the probate court. Finally, the

petitioner stresses that both surviving heirs are being

sued in their respective personal capacities, not as heirs
of the deceased.
In her comment to the petition, respondent Florence
S. Ariola maintains that the petitioner is trying to recover
a sum of money from the deceased Efraim Santibaez;
thus the claim should have been filed with the probate
court. She points out that at the time of the execution of
the joint agreement there was already an existing probate
proceedings of which the petitioner knew about.
However, to avoid a claim in the probate court which
might delay payment of the obligation, the petitioner
opted to require them to execute the said agreement.
According to the respondent, the trial court and the
CA did not err in declaring that the agreement was null
and void. She asserts that even if the agreement was
voluntarily executed by her and her brother Edmund, it
should still have been subjected to the approval of the
court as it may prejudice the estate, the heirs or third
parties. Furthermore, she had not waived any rights, as
she even stated in her answer in the court a quo that the
claim should be filed with the probate court. Thus, the
petitioner could not invoke or claim that she is in
estoppel.
Respondent Florence S. Ariola further asserts that
she had not signed any continuing guaranty agreement,
nor was there any document presented as evidence to
show that she had caused herself to be bound by the
obligation of her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues:
a) whether or not the partition in the Agreement
executed by the heirs is valid; b) whether or not the heirs
assumption of the indebtedness of the deceased is valid;
and c) whether the petitioner can hold the heirs liable on
the obligation of the deceased.
At the outset, well-settled is the rule that a probate
court has the jurisdiction to determine all the properties
of the deceased, to determine whether they should or
should not be included in the inventory or list of
properties to be administered.[20] The said court is
primarily concerned with the administration, liquidation
and distribution of the estate.[21]
In our jurisdiction, the rule is that there can be no
valid partition among the heirs until after the will has
been probated:
In testate succession, there can be no valid partition
among the heirs until after the will has been probated.
The law enjoins the probate of a will and the public
requires it, because unless a will is probated and notice
thereof given to the whole world, the right of a person to

dispose of his property by will may be rendered

nugatory. The authentication of a will decides no other
question than such as touch upon the capacity of the
testator and the compliance with those requirements or
solemnities which the law prescribes for the validity of a
will.[22]
This, of course, presupposes that the properties to
be partitioned are the same properties embraced in the
will.[23] In the present case, the deceased, Efraim
Santibaez,
left
a
holographic
will[24] which
contained, inter alia, the provision which reads as
follows:
(e) All other properties, real or personal, which I own
and may be discovered later after my demise, shall be
distributed in the proportion indicated in the
immediately preceding paragraph in favor of Edmund
and Florence, my children.
We agree with the appellate court that the abovequoted is an all-encompassing provision embracing all
the properties left by the decedent which might have
escaped his mind at that time he was making his will,
and other properties he may acquire thereafter. Included
therein are the three (3) subject tractors. This being so,
any partition involving the said tractors among the heirs
is not valid. The joint agreement [25]executed by Edmund
and Florence, partitioning the tractors among
themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for
the probate of their late fathers holographic will covering
the said tractors.
It must be stressed that the probate proceeding had
already acquired jurisdiction over all the properties of
the deceased, including the three (3) tractors. To dispose
of them in any way without the probate courts approval
is tantamount to divesting it with jurisdiction which the
Court cannot allow.[26] Every act intended to put an end
to indivision among co-heirs and legatees or devisees is
deemed to be a partition, although it should purport to be
a sale, an exchange, a compromise, or any other
transaction.[27] Thus, in executing any joint agreement
which appears to be in the nature of an extra-judicial
partition, as in the case at bar, court approval is
imperative, and the heirs cannot just divest the court of
its jurisdiction over that part of the estate. Moreover, it is
within the jurisdiction of the probate court to determine
the identity of the heirs of the decedent. [28] In the instant
case, there is no showing that the signatories in the joint
agreement were the only heirs of the decedent. When it
was executed, the probate of the will was still pending
before the court and the latter had yet to determine who
the heirs of the decedent were. Thus, for Edmund and
respondent Florence S. Ariola to adjudicate unto
themselves the three (3) tractors was a premature act,

and prejudicial to the other possible heirs and creditors

who may have a valid claim against the estate of the
deceased.
The question that now comes to fore is whether the
heirs assumption of the indebtedness of the decedent is
binding. We rule in the negative. Perusing the joint
agreement, it provides that the heirs as parties
thereto have agreed to divide between themselves and
take possession and use the above-described chattel and
each of them to assume the indebtedness corresponding
to the chattel taken as herein after stated which is in
favor of First Countryside Credit Corp.[29] The
assumption of liability was conditioned upon the
happening of an event, that is, that each heir shall take
possession and use of their respective share under the
agreement. It was made dependent on the validity of the
partition, and that they were to assume the indebtedness
corresponding to the chattel that they were each to
receive. The partition being invalid as earlier discussed,
the heirs in effect did not receive any such tractor. It
follows then that the assumption of liability cannot be
given any force and effect.
The Court notes that the loan was contracted by the
decedent. The petitioner, purportedly a creditor of the
late Efraim Santibaez, should have thus filed its money
claim with the probate court in accordance with Section
5, Rule 86 of the Revised Rules of Court, which
provides:
Section 5. Claims which must be filed under the notice.
If not filed barred; exceptions. All claims for money
against the decedent, arising from contract, express or
implied, whether the same be due, not due, or
contingent, all claims for funeral expenses for the last
sickness of the decedent, and judgment for money
against the decedent, must be filed within the time
limited in the notice; otherwise they are barred forever,
except that they may be set forth as counterclaims in any
action that the executor or administrator may bring
against the claimants. Where an executor or
administrator commences an action, or prosecutes an
action already commenced by the deceased in his
lifetime, the debtor may set forth by answer the claims
he has against the decedent, instead of presenting them
independently to the court as herein provided, and
mutual claims may be set off against each other in such
action; and if final judgment is rendered in favor of the
defendant, the amount so determined shall be considered
the true balance against the estate, as though the claim
had been presented directly before the court in the
administration proceedings. Claims not yet due, or
contingent, may be approved at their present value.

The filing of a money claim against the decedents

estate in the probate court is mandatory.[30] As we held in
the vintage case of Py Eng Chong v. Herrera:[31]
This requirement is for the purpose of protecting the
estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling him
to examine each claim and to determine whether it is a
proper one which should be allowed. The plain and
obvious design of the rule is the speedy settlement of the
affairs of the deceased and the early delivery of the
property to the distributees, legatees, or heirs. `The law
strictly requires the prompt presentation and disposition
of the claims against the decedent's estate in order to
settle the affairs of the estate as soon as possible, pay off
its debts and distribute the residue.[32]
Perusing the records of the case, nothing therein
could hold private respondent Florence S. Ariola
accountable for any liability incurred by her late father.
The documentary evidence presented, particularly the
promissory notes and the continuing guaranty
agreement, were executed and signed only by the late
Efraim Santibaez and his son Edmund. As the petitioner
failed to file its money claim with the probate court, at
most, it may only go after Edmund as co-maker of the
decedent under the said promissory notes and continuing
guaranty, of course, subject to any defenses Edmund
may have as against the petitioner. As the court had not
acquired jurisdiction over the person of Edmund, we
find it unnecessary to delve into the matter further.
We agree with the finding of the trial court that the
petitioner had not sufficiently shown that it is the
successor-in-interest of the Union Savings and Mortgage
Bank to which the FCCC assigned its assets and
liabilities.[33] The petitioner in its complaint alleged
that by virtue of the Deed of Assignment dated August
20, 1981 executed by and between First Countryside
Credit Corporation and Union Bank of the
Philippines[34] However,
the
documentary
evidence[35] clearly reflects that the parties in the deed of
assignment with assumption of liabilities were the
FCCC, and the Union Savings and Mortgage Bank, with
the conformity of Bancom Philippine Holdings, Inc.
Nowhere can the petitioners participation therein as a
party be found. Furthermore, no documentary or
testimonial evidence was presented during trial to show
that Union Savings and Mortgage Bank is now, in fact,
petitioner Union Bank of the Philippines. As the trial
court declared in its decision:
[T]he court also finds merit to the contention of
defendant that plaintiff failed to prove or did not present
evidence to prove that Union Savings and Mortgage
Bank is now the Union Bank of the Philippines. Judicial
notice does not apply here. The power to take judicial

notice is to [be] exercised by the courts with caution;

care must be taken that the requisite notoriety exists; and
every reasonable doubt upon the subject should be
promptly resolved in the negative. (Republic vs. Court of
Appeals, 107 SCRA 504).[36]
This being the case, the petitioners personality to
file the complaint is wanting. Consequently, it failed to
establish its cause of action. Thus, the trial court did not
err in dismissing the complaint, and the CA in affirming
the same.
IN LIGHT OF ALL THE FOREGOING, the
petition is hereby DENIED. The assailed Court of
Appeals Decision is AFFIRMED. No costs.
TEODORA RIOFERO ET AL. VS CA 129008
JANUARY 13, 2004
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a
will in Angeles City leaving several personal and real
properties located in Angeles City, Dagupan City and
Kalookan City.3 He also left a widow, respondent
Esperanza P. Orfinada, with whom he had seven
children who are the herein respondents, namely:
Lourdes, Alfonso "Clyde", Nancy, Alfonso James,
Christopher, Alfonso Mike, and Angelo P. Orfinada.
Apart from the respondents, the demise of the decedent
left in mourning his paramour and their children.
They are petitioner Teodora Riofero, who became a
part of his life when he entered into an extra-marital
relationship with her during the subsistence of his
marriage to Esperanza, and co-petitioners Veronica,
Alberto and Rowena.
On November 14, 1995, respondents Alfonso
James and Lourdes Orfinada discovered that petitioner
Teodora Rioferio and her children executed an
Extrajudicial Settlement of Estate of a Deceased Person
with Quitclaim involving the properties of the state of
the decedent located in Dagupan City and that
accordingly, the Registry of Deeds in Dagupan issued
Certificates of Titles Nos. 63983, 63984 and 63985 in
favor of petitioners. Respondents also found out that
petitioners were able to obtain a loan of P700,000.00
from the Rural Bank of Mangaldan Inc. by executing a
Real Estate Mortgage over the properties subject of the
extra-judicial settlement. On December 1, 1995,
respondent Alfonso "Clyde" P. Orfinada III filed a
Petition for Letters of Administration before the RTC of
Angeles City, praying that letters of administration
encompassing the estate of Alfonso P. Orfinada, Jr. be
issued to him. On December 4, 1995, respondents filed
a Complaint for the Annulment/Rescission of Extra
Judicial Settlement of Estate of a Deceased Person
with Quitclaim, Real Estate Mortgage and Cancellation
of Transfer Certificate of Titles with Nos. 63983, 63985

and 63984 and Other Related Documents with Damages

against petitioners.
Petitioners interposed the defense that the
property subject of the contested deed of extrajudicial settlement pertained to the properties
originally belonging to the parents of Teodora Riofero
and that the titles thereof were delivered to her as an
advance inheritance but the decedent had managed to
register them in his name. Petitioners also argued that
respondents are not the real parties-in-interest but rather
the Estate of Alfonso O. Orfinada, Jr. in view of the
pendency of the administration proceedings. Hence,
petitioners filed a Motion to Set Affirmative Defenses
for Hearing on the aforesaid ground. The lower court
denied the motion on the ground that respondents, as
heirs, are the real parties-in-interest especially in the
absence of an administrator who is yet to be appointed.
The CA found that the lower court committed no grave
abuse of discretion amounting to lack or excess of
jurisdiction.
ISSUE: WON the heirs have legal standing to prosecute
the rights belonging to the deceased subsequent to the
commencement ofthe administration proceedings.
RULING: YES. Petitioners vehemently fault the lower
court for denying their motion to set the case for
preliminary hearing on their affirmative defense that the
proper party to bring the action is the estate of the
decedent and not the respondents. It must be stressed
that the holding of a preliminary hearing on an
affirmative defense lies in the discretion of the court.
This is clear from the Rules of Court, thus:
SEC. 5. Pleadings grounds as affirmative defenses - Any
of the grounds for dismissal provided for in this rule,
except improper venue, may be pleaded as an
affirmative defense, and a preliminary hearing may
be had thereon as if a motion to dismiss had
been filed.
Certainly, the incorporation of the word "may" in the
provision is clearly indicative of the optional character
of
the
preliminary hearing. The word denotes
discretion and cannot be construed as having a
mandatory effect.
Just as no blame of abuse of discretion can be laid on the
lower courts doorstep for not hearing petitioners
affirmative defense, it cannot likewise be faulted for
recognizing the legal standing of the respondents as heirs
to bring the suit.
Pending the filing of administration proceedings, the
heirs without doubt have legal personality to bring suit

in behalf of the estate of the decedent in accordance with

the provision of Article 777 of the New Civil Code "that
(t)he rights to succession are transmitted from the
moment of the death of the decedent." The provision in
turn is the foundation of the principle that the property,
rights and obligations to the extent and value of the
inheritance of a person are transmitted through his death
to another or others by his will or by operation of law.
Even if administration proceedings have already been
commenced, the heirs may still bring the suit if an
administrator has not yet been appointed. This is the
proper modality despite the total lack of advertence
to the heirs in the rules on party representation, namely
Section 3, Rule 326 and Section 2, Rule 87 of the Rules
of Court. In fact, in the case of Gochan v. Young, this
Court recognized the legal standing of the heirs to
represent the rights and properties of the decedent under
administration pending the appointment of an
administrator. Thus: The above-quoted rules, while
permitting an executor or administrator to represent or
to bring suits on behalf of the deceased, do not
prohibit the heirs from representing the deceased.
These rules are easily applicable to cases in which an
administrator has already been appointed. But nor
ule categorically addresses the situation in which
special proceedings for the settlement of an estate
have already ybeen instituted, yet no administrator
has been appointed.
In such instances, the heirs cannot be expected
to wait for the appointment of an administrator; then
wait further to see if the administrator
appointed
would care enough to file a suit to protect the
rights and the interests of the deceased; and in the
meantime do nothing while the rights and the properties
of the decedent are violated or dissipated. Even if there
is an appointed administrator, jurisprudence recognizes
two exceptions, viz: (1) if the executor or administrator
is unwilling or refuses to bring suit; and (2)
when the administrator is alleged to have participated
in the act complained of and he is made a party
defendant.
Evidently, the necessity for the heirs to seek
judicial relief to recover property of the estate is as
compelling when there is no appointed administrator, if
not more, as where there is an appointed administrator
but he is either disinclined to bring suit or is one of the
guilty parties himself. All told, therefore, the rule that the
heirs have no legal standing to sue for the recovery of
property of the estate during the pendency of
administration proceedings has three exceptions, the
third being when there is no appointed administrator
such as in this case.

PAHAMOTANG VS. PNB AND THE HEIRS OF

ARGUNA GR NO. 156403 MARCH 31, 2005
On July 1, 1972, Melitona Pahamotang died. She was
survived by her husband Agustin Pahamotang, and their
eight (8) children, namely: Ana, Genoveva, Isabelita,
Corazon, Susana, Concepcion and herein petitioners
Josephine and Eleonor, all surnamed Pahamotang. On
September 15, 1972, Agustin filed with the then Court of
First Instance of Davao City a petition for issuance of
letters administration over the estate of his deceased
wife. The petition, docketed as Special Case No. 1792,
was raffled to Branch VI of said court, hereinafter
referred to as the intestate court. In his petition, Agustin
identified petitioners Josephine and Eleonor as among
the heirs of his deceased spouse. It appears that Agustin
was appointed petitioners' judicial guardian in an earlier
case - Special Civil Case No. 1785 also of the CFI of
Davao City, Branch VI. On December 7, 1972, the
intestate court issued an order granting Agustins
petition.
The late Agustin then executed several mortgages and
later sale of the properties with the PNB and Arguna
respectively. The heirs later questioned the validity of
the transactions prejudicial to them. The trial court
declared the real estate mortgage and the sale void but
both were valid with respect to the other parties. The
decision was reversed by the Court of Appeals; to the
appellate court, petitioners committed a fatal error of
mounting a collateral attack on the foregoing orders
instead of initiating a direct action to annul them.
ISSUE: Whether or not petitioners can obtain relief from
the effects of contracts of sale and mortgage entered into
by Agustin without first initiating a direct action against
the orders of the intestate court authorizing the
challenged contracts.
We answer the question in the affirmative. It bears
emphasizing that the action filed by the petitioners
before the trial court in Civil Case No. 16,802 is for the
annulment of several contracts entered into by Agustin
for and in behalf of the estate of Melitona, namely: (a)
contract of mortgage in favor of respondent PNB, (b)
contract of sale in favor of Arguna involving seven (7)
parcels of land; and (c) contract of sale of a parcel of
land in favor of PLEI.
The trial court acquired jurisdiction over the subject
matter of the case upon the allegations in the complaint
that said contracts were entered into despite lack of

notices to the heirs of the petition for the approval of

those contracts by the intestate court.
Contrary to the view of the Court of Appeals, the
action which petitioners lodged with the trial court in
Civil Case No. 16,802 is not an action to annul the
orders of the intestate court, which, according to CA,
cannot be done collaterally. It is the validity of the
contracts of mortgage and sale which is directly attacked
in the action.
And, in the exercise of its jurisdiction, the trial
court made a factual finding in its decision of August 7,
1998 that petitioners were, in fact, not notified by their
father Agustin of the filing of his petitions for
permission to mortgage/sell the estate properties. The
trial court made the correct conclusion of law that the
challenged orders of the intestate court granting Agustins
petitions were null and void for lack of compliance with
the mandatory requirements of Rule 89 of the Rules of
Court, particularly Sections 2, 4, 7 thereof, which
respectively read:
Sec. 2. When court may authorize sale, mortgage, or
other encumbrance of realty to pay debts and legacies
through personalty not exhausted. - When the personal
estate of the deceased is not sufficient to pay the debts,
expenses of administration, and legacies, or where the
sale of such personal estate may injure the business or
other interests of those interested in the estate, and where
a testator has not otherwise made sufficient provision for
the payment of such debts, expenses, and legacies, the
court, on the application of the executor or administrator
and on written notice to the heirs, devisees, and
legatees residing in the Philippines, may authorize the
executor or administrator to sell, mortgage, or otherwise
encumber so much as may be necessary of the real
estate, in lieu of personal estate, for the purpose of
paying such debts, expenses, and legacies, if it clearly
appears that such sale, mortgage, or encumbrance would
be beneficial to the persons interested; and if a part
cannot be sold, mortgaged, or otherwise encumbered
without injury to those interested in the remainder, the
authority may be for the sale, mortgage, or other
encumbrance of the whole of such real estate, or so
much thereof as is necessary or beneficial under the
circumstances.
Sec. 4. When court may authorize sale of estate as
beneficial to interested persons. Disposal of proceeds. When it appears that the sale of the whole or a part of
the real or personal estate, will be beneficial to the heirs,
devisees, legatees, and other interested persons, the court
may, upon application of the executor or administrator
and on written notice to the heirs, devisees and
legatees who are interested in the estate to be sold,
authorize the executor or administrator to sell the whole

or a part of said estate, although not necessary to pay

debts, legacies, or expenses of administration; but such
authority shall not be granted if inconsistent with the
provisions of a will. In case of such sale, the proceeds
shall be assigned to the persons entitled to the estate in
the proper proportions.
Sec. 7. Regulations for granting authority to sell,
mortgage, or otherwise encumber estate. - The court
having jurisdiction of the estate of the deceased may
authorize the executor or administrator to sell personal
estate, or to sell, mortgage, or otherwise encumber real
estate; in cases provided by these rules and when it
appears necessary or beneficial, under the following
regulations:
(a) The executor or administrator shall file a
written petition setting forth the debts
due from the deceased, the expenses of
administration, the legacies, the value of
the personal estate, the situation of the
estate to be sold, mortgaged, or otherwise
encumbered, and such other facts as
show that the sale, mortgage, or other
encumbrance is necessary or beneficial;
(b) The court shall thereupon fix a time and
place for hearing such petition,
and cause notice stating the nature of the
petition, the reason for the same, and the
time and place of hearing, to be given
personally or by mail to the persons
interested, and may cause such further
notice to be given, by publication or
otherwise, as it shall deem proper;
(Emphasis supplied).
Settled is the rule in this jurisdiction that when an
order authorizing the sale or encumbrance of real
property was issued by the testate or intestate court
without previous notice to the heirs, devisees and
legatees as required by the Rules, it is not only the
contract itself which is null and void but also the order
of the court authorizing the same. [11]
Thus, in Maneclang vs. Baun,[12] the previous
administrator of the estate filed a petition with the
intestate court seeking authority to sell portion of the
estate, which the court granted despite lack of notice of
hearing to the heirs of the decedent. The new
administrator of the estate filed with the Regional Trial
Court an action for the annulment of the sales made by
the previous administrator. After trial, the trial court held
that the order of the intestate court granting authority to
sell, as well as the deed of sale, were void. On appeal
directly to this Court, We held that without compliance

with Sections 2, 4 and 7 of Rule 89 of the Rules of

Court, the authority to sell, the sale itself and the order
approving it would be null and void ab initio.
In Liu vs. Loy, Jr.,[13] while the decedent was still
living, his son and attorney-in-fact sold in behalf of the
alleged decedent certain parcels of land to Frank Liu.
After the decedent died, the son sold the same properties
to two persons. Upon an ex parte motion filed by the
2nd set of buyers of estate properties, the probate court
approved the sale to them of said properties.
Consequently, certificates of title covering the estate
properties were cancelled and new titles issued to the
2nd set of buyers. Frank Liu filed a complaint for
reconveyance/ annulment of title with the Regional Trial
Court. The trial court dismissed the complaint and the
Court of Appeals affirmed the dismissal. When the case
was appealed to us, we set aside the decision of the
appellate court and declared the probate court's approval
of the sale as completely void due to the failure of the
2nd set of buyers to notify the heir-administratrix of the
motion and hearing for the sale of estate property.
Clearly, the requirements of Rule 89 of the Rules of
Court are mandatory and failure to give notice to the
heirs would invalidate the authority granted by the
intestate/probate court to mortgage or sell estate assets.
Here, it appears that petitioners were never notified
of the several petitions filed by Agustin with the intestate
court to mortgage and sell the estate properties of his
wife.
According to the trial court, the [P]etition for
Authority to Increase Mortgage and [P]etition for
Declaration of Heirs and for Authority to Increase
Indebtedness, filed by Agustin on July 16,
1973and October 5, 1974, respectively, do not contain
information that petitioners were furnished with copies
of said petitions. Also, notices of hearings of those
petitions were not sent to the petitioners. [14] The trial
court also found in Civil Case No. 16,802 that Agustin
did not notify petitioners of the filing of his petitions for
judicial authority to sell estate properties to Arturo
Arguna and PLEI.[15]
As it were, the appellate court offered little
explanation on why it did not believe the trial court in its
finding that petitioners were ignorant of Agustins
scheme to mortgage and sell the estate properties.
Aside from merely quoting the orders of July 18,
1973 and October 19, 1974 of the intestate court, the
Court of Appeals leaves us in the dark on its reason for
disbelieving the trial court. The appellate court did not
publicize its appraisal of the evidence presented by the
parties before the trial court in the matter regarding the
knowledge, or absence thereof, by the petitioners of
Agustins petitions. The appellate court cannot casually

set aside the findings of the trial court without stating

clearly the reasons therefor. Findings of the trial court
are entitled to great weight, and absent any indication to
believe otherwise, we simply cannot adopt the
conclusion reached by the Court of Appeals.
Laches is negligence or omission to assert a right
within a reasonable time, warranting the presumption
that the party entitled to assert it has either abandoned or
declined the right.[16] The essential elements of laches
are: (1) conduct on the part of the defendant, or of one
under whom he claims, giving rise to the situation of
which complaint is made and for which the complaint
seeks a remedy; (2) delay in asserting the complainant's
rights, the complainant having had knowledge or notice
of the defendant's conduct and having been afforded an
opportunity to institute a suit; (3) lack of knowledge or
notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and (4)
injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held
barred.[17]
In the present case, the appellate court erred in
appreciating laches against petitioners. The element of
delay in questioning the subject orders of the intestate
court is sorely lacking. Petitioners were totally unaware
of the plan of Agustin to mortgage and sell the estate
properties. There is no indication that mortgagor PNB
and vendee Arguna had notified petitioners of the
contracts they had executed with Agustin. Although
petitioners finally obtained knowledge of the subject
petitions filed by their father, and eventually challenged
the July 18, 1973, October 19, 1974, February 25, 1980
and January 7, 1981 orders of the intestate court, it is not
clear from the challenged decision of the appellate court
when they (petitioners) actually learned of the existence
of said orders of the intestate court. Absent any
indication of the point in time when petitioners acquired
knowledge of those orders, their alleged delay in
impugning the validity thereof certainly cannot be
established. And the Court of Appeals cannot simply
impute laches against them.
WHEREFORE, the assailed issuances of the Court
of Appeals are hereby REVERSED and SET ASIDE and
the decision dated August 7, 1998 of the trial court in its
Civil Case No. 16,802 REINSTATED
RICARDO SILVERIO JR VS. CA ET.AL. GR
NO. 178933 SEPTEMBER 16, 2009
The instant controversy stemmed from the
settlement of estate of the deceased Beatriz Silverio.
After her death, her surviving spouse, Ricardo Silverio,
Sr., filed an intestate proceeding for the settlement of her
estate. The case was docketed as SP. PROC. NO. M2629 entitled In Re: Estate of the Late Beatriz D.
Silverio, Ricardo C. Silverio, Sr. v. Ricardo S. Silverio

Jr., et al. pending before the Regional Trial Court (RTC)

of Makati City, Branch 57 (RTC).
On November 16, 2004, during the pendency of
the case, Ricardo Silverio, Jr. filed a petition to remove
Ricardo C. Silverio, Sr. as the administrator of the
subject estate. On November 22, 2004, Edmundo S.
Silverio also filed a comment/opposition for the removal
of Ricardo C. Silverio, Sr. as administrator of the estate
and for the appointment of a new administrator.
On January 3, 2005, the RTC issued an Order
granting the petition and removing Ricardo Silverio, Sr.
as administrator of the estate, while appointing Ricardo
Silverio, Jr. as the new administrator.
On January 26, 2005, Nelia S. Silverio-Dee filed
a Motion for Reconsideration of the Order dated January
3, 2005, as well as all other related orders.
On February 4, 2005, Ricardo Silverio Jr. filed
an Urgent Motion for an Order Prohibiting Any Person
to Occupy/Stay/Use Real Estate Properties Involved in
the Intestate Estate of the Late Beatriz Silverio, Without
Authority from this Honorable Court.[3]
Then, on May 31, 2005, the RTC issued an
Omnibus Order[4] affirming its Order dated January 3,
2005 and denying private respondents motion for
reconsideration. In the Omnibus Order, the RTC also
authorized Ricardo Silverio, Jr. to, upon receipt of the
order, immediately exercise his duties as administrator of
the subject estate. The Omnibus Order also directed
Nelia S. Silverio-Dee to vacate the property at No. 3,
Intsia, Forbes Park, Makati City within fifteen (15) days
from receipt of the order.
Nelia Silverio-Dee received a copy of the
Omnibus Order dated May 31, 2005 on June 8, 2005.
On June 16, 2005, private respondent filed a
Motion for Reconsideration dated June 15, 2005[5] of the
Omnibus Order. This was later denied by the RTC in an
Order dated December 12, 2005, which was received by
private respondent on December 22, 2005.
Notably, the RTC in its Order dated December
12, 2005[6] also recalled its previous order granting
Ricardo Silverio, Jr. with letters of administration over
the intestate estate of Beatriz Silverio and reinstating
Ricardo Silverio, Sr. as the administrator.
From the Order dated December 12, 2005,
Ricardo Silverio, Jr. filed a motion for reconsideration
which was denied by the RTC in an Order dated October
31, 2006. In the same order, the RTC also allowed the
sale of various properties of the intestate estate of the

late Beatriz Silverio to partially settle estate taxes,

penalties, interests and other charges due thereon.
Among the properties authorized to be sold was the one
located at No. 3 Intsia Road, Forbes Park, Makati City.[7]
Meanwhile, on January 6, 2006, Nelia SilverioDee filed a Notice of Appeal dated January 5,
2006[8] from the Order dated December 12, 2005 while
the Record on Appeal dated January 20, 2006 [9] was filed
on January 23, 2006.
Thereafter, on October 23, 2006, Ricardo
Silverio, Jr. filed a Motion to Dismiss Appeal and for
Issuance of a Writ of Execution[10] against the appeal of
Nelia Silverio-Dee on the ground that the Record on
Appeal was filed ten (10) days beyond the reglementary
period pursuant to Section 3, Rule 41 of the Rules of
Court.
Thus, on April 2, 2007, the RTC issued an
Order[11] denying the appeal on the ground that it was not
perfected within the reglementary period. The RTC
further issued a writ of execution for the enforcement of
the Order dated May 31, 2005 against private respondent
to vacate the premises of the property located at No. 3,
Intsia, Forbes Park, Makati City. The writ of execution
was later issued on April 17, 2007[12] and a Notice to
Vacate[13] was issued on April 19, 2007 ordering private
respondent to leave the premises of the subject property
within ten (10) days.
Consequently, private respondent filed a Petition
for Certiorari and Prohibition (With Prayer for TRO and
Writ of Preliminary Injunction) dated May 2,
2007[14] with the CA.
On May 4, 2007, the CA issued the assailed
Resolution granting the prayer for the issuance of a
TRO. In issuing the TRO, the CA ruled that the Notice
of Appeal was filed within the reglementary period
provided by the Rules of Court applying the fresh rule
period enunciated by this Court in Neypes v. Court of
Appeals[15] as reiterated in Sumaway v. Union Bank.[16]
Afterwards, on July 6, 2007, the CA issued the
assailed decision granting the petition of private
respondent. The dispositive portion reads:
WHEREFORE, in view of the
foregoing,
the
instant
petition
is GRANTED and GIVEN
DUE
COURSE. Accordingly, the Order,
dated April 2, 2007, the writ of
execution, dated April 17, 2007, and
theNotice to Vacate, dated April 19,
2007, are ANNULLED AND SET

ASIDE. Further, the court a quo is

hereby directed to give due course to the
appeal of Nelia S. Silverio-Dee.
CORAZON GREGORIO VS. MADARANG
ET.AL GR NO. 185226 FEB 11, 2010
Casimiro V. Madarang, Sr. (Casimiro, Sr. or the
decedent) died intestate on June 3, 1995, leaving real
and personal properties with an estimated value
of P200,000.00.[1] He was survived by his wife Dolores
and their five children, namely Casimiro, Jr., Jose,
Ramiro, Vicente and Corazon.
In the intestate proceedings filed by the couples son Jose
which was lodged before the Regional Trial Court (RTC)
of Cebu City, Branch 57, Dolores was appointed as
administratrix of the intestate estate of Casimiro, Sr.[2]
Dolores submitted an Inventory Report listing the
properties of the decedents estate. Jose filed his
Comment on the Report, alleging that it omitted six lots
including Lot 829-B-4-B located in CebuCity which is
covered by Transfer Certificate of Title No. 125429.
A hearing was thus conducted to determine whether the
six lots formed part of the estate of the decedent. By
Order of April 5, 2002, [3] the RTC, noting the following:
x x x The said properties appear to have
been acquired by the spouses after [their
marriage
on] December
27,
1931 and during their marriage or
coverture. Article 160 of the New Civil
Code of the Philippines (which is the
governing law in this particular case) is
very explicit in providing that all
properties of the marriage are presumed
to belong to the conjugal partnership.
This presumption, to the mind of the
Court, has not been sufficiently rebutted
by the special administratrix. [Dolores]
This presumption applies and holds even
if the land is registered under the wifes
name as long as it was acquired during
marriage (De Guinoo vs. Court of
Appeals. G.R. No. L-5541, June 26,
1955) or even if the wife purchased the
land alone (Flores, et.al. Vs. Escudero,
et.al., G.R. No. L-5302, March 11,
1953).[4] (underscoring supplied),
instructed Dolores to revise her Inventory Report to
include the six lots.
Dolores and her children, except Jose who suggested
that the former be referred to as oppositors, [5] questioned

the RTC order of inclusion of the six lots via motion for
reconsideration during the pendency of which motion
the court appointed herein petitioner Corazon as coadministratrix of her mother Dolores.
As Dolores and her co-oppositors alleged that
the six lots had been transferred during the lifetime of
the decedent, they were ordered to submit their
affidavits, in lieu of oral testimony, to support the
allegation. Only herein respondent Vicente complied. In
his Affidavit, Vicente declared that one of the six
lots, Lot 829-B-4-B, was conveyed to him by a Deed of
Donation executed in August 1992 by his parents
Dolores and Casimiro, Sr.[6]
It appears that petitioners later manifested that they no
longer oppose the provisional inclusion of the six lots,
except Lot 829-B-4-B.
The RTC, by Order of January 20, 2003,[7] thus modified
its April 5, 2002 Order as follows:
Of the six lots directed included
in the inventory, Lot 829 B-4-B should
be excluded. The administratrix is
directed within sixty (60) days: (1) to
submit a revised inventory in
accordance with the Order datedApril 5,
2002, as here modified; and (2) to
render
an
accounting
of
her
administration of the estate of Casimiro
V. Madarang. (underscoring supplied),
Jose moved to reconsider the RTC January 20, 2003
Order, arguing that since the title to Lot 829-B-4-B
remained registered in the name of his parents, it should
not be excluded from the Inventory; and that the Deed of
Donation in Vicentes favor was not notarized nor
registered with the Register of Deeds. Joses motion for
reconsideration having been denied by Order
of February 5, 2003, he filed a Notice of Appeal.
In his Brief filed before the Court of Appeals,
Jose claimed that the RTC erred in excluding Lot 829-B4-B from the Inventory as what the lower court should
have done was to . . . maintain the order including said
lot in the inventory of the estate so Vicente can file an
ordinary action where its ownership can be threshed out.
Jose later filed before the appellate court a Motion to
Withdraw Petition which his co-heirs-oppositors-herein
petitioners opposed on the ground that, inter alia, a grant
thereof would end the administration proceedings. The
appellate court, by Resolution of January 18, 2008,
[8]
granted the withdrawal on the ground that it would not
prejudice the rights of the oppositors.

Petitioners motion for reconsideration of the appellate

courts grant of Joses Motion to Withdraw Petition
was, by Resolution of November 6, 2008,[9] denied in
this wise:
xxxx
In the instant case, the Probate
Court found that the parties of the case
interposed no objection to the noninclusion of Lot No. 829-B-4-B in the
inventory of the estate of Casimiro V.
Madarang, in effect, they have
consented thereto. x x x
xxxx
Moreover, [herein petitioners]
in
their
appeal
brief,
ha[ve]
extensively argued that . . . Vicente
Madarang [to whom the questioned
lot was donated] and his family have
been in continuous, actual and
physical possession of the donated
lot for over twenty (20) years, even
before the execution of the so called
donation inter vivos in 1992. . . . Vicente
Madarang has his residential house
thereon and that his ownership over the
donated lot has been fully recognized by
the entire Madarang Clan, including all
his brothers and sisters, except the much
belated objection by the appellant
(Jose), allegedly resorted to as an act of
harassment. [10] (emphasis
and
underscoring supplied),
thus affirming the RTC order of exclusion of the
questioned lot.
Hence, the present petition for review filed by
the oppositors-herein petitioners. Casimiro, Jr. having
died during the pendency of the case, he was substituted
by his wife petitioner Estrelita and co-petitioners
children Consuelo, Casimiro IV, and Jane Margaret.
Petitioners contend that since the only issue for
consideration by the appellate court was the merit of
Joses Motion to Withdraw Petition, it exceeded its
jurisdiction when it passed upon the merits of Joses
appeal from the RTC order excluding Lot 829-B-4-B
from the Inventory. Petitioners contention does not lie.
In their Motion for Reconsideration of the
appellate courts grant of Joses Motion to Withdraw
Petition, petitioners, oddly denying the existence of a

petition, raised the issue of the propriety of the RTC

Order
excluding Lot 829-B-4-B
from
the
Inventory. Their prayer in their Motion clearly states so:
WHEREFORE, premises considered,
Oppositors-Appellees
[petitioners]
respectfully PRAY for this Honorable
Court to RECONSIDER its questioned
Resolution
and rendering [sic], forthwith,a
decision resolving the merits of the
Partial Appeal of petitioner-appellant
Jose Madarang.[11] (capitalization in the
original; emphasis supplied)
The appellate court did not thus err in passing on the
said issue.
More specifically, petitioners question the appellate
courts finding that as the parties interposed no objection
to the non-inclusion of Lot No. 829-B-4-B in the
inventory of the estate of Casimiro V. Madarang, in
effect, they have consented thereto.[12]
A review of the voluminous records of the case
shows that, indeed, there was no accord among the
parties respecting the exclusion of Lot 829-B-4-B.
While a probate court, being of special and limited
jurisdiction, cannot act on questions of title and
ownership, it can, for purposes of inclusion or exclusion
in the inventory of properties of a decedent, make
a provisional determination of ownership, without
prejudice to a final determination through a separate
action in a court of general jurisdiction.
The facts obtaining in the present case, however, do not
call
for
the
probate
court
to
make
a provisional determination of ownership of Lot 829-B4-B. It bears stress that the question is one
ofcollation or advancement by the decedent to an heir
over which the question of title and ownership can be
passed upon by a probate court.[13]
As earlier reflected, Vicentes claim of ownership
over Lot 829-B-4-B rests upon a deed of donation by his
father (decedent) and his mother.
Article 1061 of the Civil Code expressly provides:
Article 1061. Every compulsory heir,
who succeeds with other compulsory
heirs, must bring into the mass of the
estate any property or right which he
may have received from the decedent,
during the lifetime of the latter, by way

of donation, or any other gratuitous title,

in order that it may be computed in the
determination of the legitime of each
heir and in the account of
partition. (underscoring supplied)
in relation to which, Section 2, Rule 90 of the Rules of
Court provides:
Sec. 2. Questions as to advancement to
be
determined.
Questions
as
to advancement made, or alleged to have
been made, by the deceased to any
heir may be heard and determined by the
court having jurisdiction of the estate
proceedings; and the final order of the
court thereon shall be binding on the
person raising the questions and on
the heir. (emphasis and underscoring
supplied)
By express provision of law then, Lot 829-B-4-B, which
was alleged to have been donated by the decedent and
his wife to their son-respondent Vicente, should not be
excluded from the inventory of the properties of the
decedent.
WHEREFORE, the petition is GRANTED. The
assailed November 6, 2008 Resolution of the Court of
Appeals is SET ASIDE. Petitioner Corazon M. Gregorio
and her co-administratrix Dolores Madarang are
DIRECTED to include Lot 829-B-4-B in the Inventory
of the properties of the intestate estate of Casimiro V.
Madarang, Sr.
ANITA REYES

MESUGAS

VS

ALEJANDRO

AQUINO REYES GR NO. 174835 MARCH 22, 2010

Petitioner Anita Reyes-Mesugas and respondent
Alejandro A. Reyes are the children of Lourdes Aquino
Reyes and Pedro N. Reyes. Lourdes died intestate,
leaving to her heirs, among others, three parcels of land,
including a lot covered by Transfer Certificate of Title
(TCT) No. 24475.
On February 3, 2000, respondent filed a petition
for settlement of the estate of Lourdes,[3] praying for his
appointment as administrator due to alleged irregularities
and fraudulent transactions by the other heirs. Petitioner,
her father Pedro and Arturo, a sibling of the petitioner,
opposed the petition.
On August 30, 2000, a compromise agreement [4] was
entered into by the parties whereby the estate of Lourdes
was partitioned. A decision[5] dated September 13, 2000
was rendered by the RTC pursuant to the said

compromise agreement. The compromise agreement

with respect to TCT No. 24475 is reproduced below:
5. That the parties hereto hereby agree
to recognize, acknowledge and respect:
5.1. the improvements found on
the parcel of land
covered under TCT No.
24475 of the Registry of
Deeds
of
Rizal
consisting of two lots
namely Lot 4-A and Lot
4-B of the new survey
with two (2) residential
houses
presently
occupied and possessed
as owners thereof by
Antonio Reyes and
Anita
ReyesMesugas to constitute
part of their shares in
the estate of Lourdes
Aquino Reyes;
5.2 further, the improvement
consisting of a bakerystore under lease to a
third
party.
The
proceeds thereof shall
be shared by Antonio
Reyes and Pedro N.
Reyes;
5.3 that the expenses for the
partition and titling of
the property between
Antonio Reyes and
Anita
ReyesMesugas shall
be
equally shared by them.
On December 7, 2004, petitioner filed a motion to
cancel lis pendens annotation for TCT No. 24475[6] in
the RTC in view of the finality of judgment in the
settlement of the estate. Petitioner argued that the
settlement of the estate proceeding had terminated;
hence, the annotation of lis pendens could already be
cancelled since it had served its purpose.
Respondent opposed the motion and claimed
that the parties, in addition to the compromise
agreement, executed side agreements which had yet to
be fulfilled. One such agreement was executed between
petitioner[7] and respondent granting respondent a onemeter right of way on the lot covered by TCT No.

24475. However, petitioner refused to give the right of

way and threatened to build a concrete structure to
prevent access. He argued that, unless petitioner
permitted the inscription of the right of way on the
certificate of title pursuant to their agreement, the notice
of lis pendens in TCT No. 24475 must remain.
In its order[8] dated January 26, 2006, the RTC denied the
motion to cancel the notice of lis pendens annotation for
lack of sufficient merit. It found that the cancellation of
the notice of lis pendenswas unnecessary as there were
reasons for maintaining it in view of petitioner's noncompliance with the alleged right of way agreement
between the parties. It stated that:
A careful perusal of the compromise
agreement dated September 13, 2000
revealed that one of the properties
mentioned is a parcel of land with
improvements consisting [of] two
hundred nine (209) square meters situated
in Makati covered under TCT No. 24475
of the Registry of Deeds [of] Rizal in the
name of Pedro N. Reyes married to
Lourdes Aquino Reyes and form[s] part
of the notarized right of way agreement
on TCT No. 24475, considering that
the movant Anita Reyes is still bound by
the right of way agreement, the same
should be complied with before the
cancellation of the subject annotation.
[9]
(Citations omitted)
Petitioner filed a notice of appeal. [10] Because the denial
of a motion to cancel the notice of lis pendens annotation
was an interlocutory order, the RTC denied the notice of
appeal as it could not be appealed until the judgment on
the main case was rendered. [11] A motion for
reconsideration was filed by petitioner but the same was
also denied.[12]
Hence, this petition.
We find for petitioner.
A compromise is a contract whereby the parties, by
making reciprocal concessions, avoid litigation or put an
end to one already commenced. [13] Once submitted to the
court and stamped with judicial approval, it becomes
more than a mere private contract binding upon the
parties; having the sanction of the court and entered as
its determination of the controversy, it has the force and
effect of any judgment.[14]
Consequently, a judgment rendered in accordance with a
compromise agreement is immediately executory as
there is no appeal from such judgment. [15] When both

parties enter into an agreement to end a pending

litigation and request that a decision be rendered
approving said agreement, such action constitutes an
implied waiver of the right to appeal against the said
decision.[16]
In this instance, the case filed with the RTC was
a special proceeding for the settlement of the estate of
Lourdes. The RTC therefore took cognizance of the case
as a probate court.
Settled is the rule that a probate court is a
tribunal of limited jurisdiction. It acts on matters
pertaining to the estate but never on the rights to
property arising from the contract. [17] It approves
contracts entered into for and on behalf of the estate or
the heirs to it but this is by fiat of the Rules of Court.
[18]
It is apparent therefore that when the RTC approved
the compromise agreement on September 13, 2000, the
settlement of the estate proceeding came to an end.
Moreover, a notice of lis pendens may be
cancelled when the annotation is not necessary to protect
the title of the party who caused it to be recorded. [19] The
compromise agreement did not mention the grant of a
right of way to respondent. Any agreement other than the
judicially approved compromise agreement between the
parties was outside the limited jurisdiction of the probate
court. Thus, any other agreement entered into by the
petitioner and respondent with regard to a grant of a
right of way was not within the jurisdiction of the RTC
acting as a probate court. Therefore, there was no reason
for the RTC not to cancel the notice of lis pendens on
TCT No. 24475 as respondent had no right which
needed to be protected. Any alleged right arising from
the side agreement on the right of way can be fully
protected by filing an ordinary action for specific
performance in a court of general jurisdiction.
More importantly, the order of the probate court
approving the compromise had the effect of directing the
delivery of the residue of the estate of Lourdes to the
persons entitled thereto under the compromise
agreement. As such, it brought to a close the intestate
proceedings[20] and the probate court lost jurisdiction
over the case, except only as regards to the compliance
and the fulfillment by the parties of their respective
obligations under the compromise agreement.

orders and judgments of the court

relating to the real estate or the partition
thereof shall be recorded in the registry
of deeds of the province where the
property is situated.
In line with the recording of the order for the
partition of the estate, paragraph 2, Section 77 of
Presidential Decree (PD) No. 1529[21] provides:
Section
77. Cancellation
of Lis Pendens xxx xxx xxx
xxx xxx
At any time after final
judgment in favor of the defendant, or
other disposition of the action such as
to terminate finally all rights of the
plaintiff in and to the land and/or
buildings involved, in any case in
which a memorandum or notice
of lis pendens has been registered as
provided in the preceding section, the
notice of lis pendens shall be deemed
cancelled upon the registration of a
certificate of the clerk of court in which
the action or proceeding was pending
stating the manner of disposal thereof.
(emphasis supplied)
Thus, when the September 13, 2000 decision
was recorded in the Registry of Deeds of Rizal pursuant
to Section 4, Rule 90 of the Rules of Court, the notice
of lis pendens inscribed on TCT No. 24475 was deemed
cancelled by virtue of Section 77 of PD No. 1529.
WHEREFORE,
the
petition
is
hereby GRANTED. The Orders of the Regional Trial
Court of Makati, Branch 62 dated June 23, 2006 and
September 21, 2006 are SET ASIDE. The notice
oflis pendens annotated on TCT No. 24475 is hereby
declared CANCELLED pursuant to Section 77 of the
PD No. 1529 in relation to Section 4, Rule 90 of the
Rules of Court.
EMILIO B. PACIOLES JR. VS. MIGUELA
CHUATOCO-CHING GR NO. 127920 AUGUST 9,
2005

Having established that the proceedings for the

settlement of the estate of Lourdes came to an end upon
the RTCs promulgation of a decision based on the
compromise agreement, Section 4, Rule 90 of the Rules
of Court provides:

On March 13, 1992, Miguelita died intestate,

leaving real properties with an estimated value of P10.5
million, stock investments worth P518,783.00, bank
deposits amounting to P6.54 million, and interests in
certain businesses. She was survived by her husband,
petitioner herein, and their two minor children.

Sec. 4. Recording the order of partition

of estate. - Certified copies of final

Consequently, on August 20, 1992, petitioner filed

with the RTC a verified petition [4] for the settlement of

Miguelitas estate. He prayed that (a) letters of

administration be issued in his name, and (b) that the net
residue of the estate be divided among the compulsory
heirs.
Miguelitas mother, Miguela Chuatoco-Ching,
herein respondent, filed an opposition, specifically to
petitioners prayer for the issuance of letters of
administration on the grounds that (a) petitioner is
incompetent and unfit to exercise the duties of an
administrator; and (b) the bulk of Miguelitas estate is
composed of paraphernal properties. Respondent
prayed that the letters of administration be issued to her
instead.[5] Afterwards, she also filed a motion for her
appointment as special administratrix.[6]
Petitioner moved to strike out respondents
opposition, alleging that the latter has no direct and
material interest in the estate, she not being a
compulsory heir, and that he, being the surviving spouse,
has the preferential right to be appointed as administrator
under the law.[7]
Respondent countered that she has direct and
material interest in the estate because she gave half of
her inherited properties to Miguelita on condition that
both of them would undertake whatever business
endeavor they decided to, in the capacity of business
partners.[8]
In her omnibus motion [9] dated April 23, 1993,
respondent nominated her son Emmanuel Ching to act
as special administrator.
On April 20, 1994, the intestate court issued an
order appointing petitioner and Emmanuel as joint
regular administrators of the estate. [10] Both were issued
letters of administration after taking their oath and
posting the requisite bond.
Consequently, Notice to Creditors was published in
the issues of the Manila Standard on September 12, 19,
and 26, 1994. However, no claims were filed against the
estate within the period set by the Revised Rules of
Court.
Thereafter, petitioner submitted to the intestate
court an inventory of Miguelitas estate. [11] Emmanuel
did not submit an inventory.
On May 17, 1995, the intestate court declared
petitioner and his two minor children as the only
compulsory heirs of Miguelita.[12]
On July 21, 1995, petitioner filed with the intestate
court an omnibus motion[13] praying, among others, that
an Order be issued directing the: 1) payment of estate
taxes; 2) partition and distribution of the estate
among the declared heirs; and 3) payment of attorneys
fees.

Respondent opposed petitioners motion on the

ground that the partition and distribution of the estate
is premature and precipitate, considering that there is
yet no determination whether the properties specified in
the inventory are conjugal, paraphernal or owned in a
joint venture.[14] Respondent claimed that she owns the
bulk of Miguelitas estate as an heir and co-owner.
Thus, she prayed that a hearing be scheduled.
On January 17, 1996, the intestate court allowed
the payment of the estate taxes and attorneys fees but
denied petitioners prayer for partition and distribution of
the estate, holding that it is indeedpremature. The
intestate court ratiocinated as follows:
On the partition and distribution of the deceaseds
properties, among the declared heirs, the Court finds the
prayer of petitioner in this regard to be premature. Thus,
a hearing on oppositors claim as indicated in her
opposition to the instant petition is necessary to
determine whether the properties listed in the
amended complaint filed by petitioner are entirely
conjugal or the paraphernal properties of the
deceased, or a co-ownership between the oppositor
and the petitioner in their partnership venture.
Petitioner filed a motion for reconsideration but it
was denied in the Resolution dated May 7, 1996.
Forthwith, petitioner filed with the Court of
Appeals a petition for certiorari seeking to annul and set
aside the intestate courts Order dated January 17, 1996
and Resolution dated May 7, 1996 which denied
petitioners prayer for partition and distribution of the
estate for being premature, indicating that it (intestate
court) will first resolve respondents claim of ownership.
The Appellate Court dismissed the petition
for certiorari, holding that in issuing the challenged
Order and Resolution, the intestate court did not commit
grave abuse of discretion.
The Appellate Court ruled:
Regarding the second issue raised, respondent judge did
not commit grave abuse of discretion in entertaining
private respondents unsupported claim of ownership
against the estate. In fact, there is no indication that the
probate court has already made a finding of title or
ownership. It is inevitable that in probate proceedings,
questions of collation or of advancement are involved
for these are matters which can be passed upon in the
course of the proceedings. The probate court in
exercising its prerogative to schedule a hearing, to
inquire into the propriety of private respondents claim, is
being extremely cautious in determining the composition
of the estate. This act is not tainted with an iota of grave
abuse of discretion.

Petitioner moved for a reconsideration but it was

likewise denied. Hence, this petition for review
on certiorari anchored on the following assignments of
error:
I
RESPONDENT COURTS DECISION WHICH
AFFIRMS THE INTESTATE COURTS ORDER IS A
GRAVE ERROR FOR BEING CONTRARY TO THE
SETTLED JURISPRUDENCE AND POLICY OF THE
LAW THAT ESTATE PROCEEDINGS MUST BE
SETTLED EXPEDITIOUSLY.
II
RESPONDENT COURT COMMITTED GRAVE
ERROR IN SUSTAINING THE INTESTATE COURTS
ORDER TO CONDUCT HEARING ON THE ISSUE
OF OWNERSHIP CLAIM AGAINST THE ESTATE,
AS SAID FUNCTION IS OUTSIDE AND BEYOND
THE JURISDICTION OF THE INTESTATE COURT.
III
RESPONDENT COURT GRAVELY ERRED IN
AFFIRMING THE INTESTATE COURTS ORDER
AND RESOLUTION NOTWITHSTANDING THAT
RESPONDENT CHINGS OWNERSHIP CLAIMS ARE
CONFLICTING, FRIVOLOUS AND BASELESS.
The fundamental issue for our resolution is: May a
trial court, acting as an intestate court, hear and pass
upon questions of ownership involving properties
claimed to be part of the decedents estate?
The general rule is that the jurisdiction of the trial
court either as an intestate or a probate court relates only
to matters having to do with the settlement of the estate
and probate of will of deceased persons but does not
extend to the determination of questions of
ownership that arise during the proceedings.[15] The
patent rationale for this rule is that such court exercises
special and limited jurisdiction.[16]
A well-recognized deviation to the rule is the
principle that an intestate or a probate court may hear
and pass upon questions of ownership when its purpose
is to determine whether or not a property should be
included in the inventory. In such situations the
adjudication is merely incidental and provisional. Thus,
in Pastor, Jr. vs. Court of Appeals,[17] we held:
x x x As a rule, the question of ownership is an
extraneous matter which the probate court cannot
resolve with finality. Thus, for the purpose of
determining whether a certain property should or

should not be included in the inventory of estate

properties, the probate court may pass upon the title
thereto, but such determination is provisional, not
conclusive, and is subject to the final decision in a
separate action to resolve title.
The Court of Appeals relied heavily on the above
principle in sustaining the jurisdiction of the intestate
court to conduct a hearing on respondents claim. Such
reliance is misplaced. Under the said principle, the key
consideration is that the purpose of the intestate or
probate court in hearing and passing upon questions of
ownership is merely to determine whether or not a
property should be included in the inventory. The
facts of this case show that such was not the purpose of
the intestate court.
First, the inventory was not disputed. In fact, in her
Manifestation and Opposition[18] dated September 18,
1995, respondent expressly adopted the inventory
prepared by petitioner, thus:
6. She adopts the inventory submitted by the
petitioner in his Amended Compliance dated October
6, 1994, and filed only on November 4, 1994 not
October 5, 1995 as erroneously asserted in Par. 12 of the
Omnibus Motion. Oppositor, however, takes exception
to the low valuation placed on the real estate properties
and reserves her right to submit a more accurate and
realistic pricing on each.
Respondent could have opposed petitioners
inventory and sought the exclusion of the specific
properties which she believed or considered to be
hers. But instead of doing so, she expressly adopted the
inventory, taking exception only to the low valuation
placed on the real estate properties.
And second, Emmanuel, respondents son and
representative in the settlement of Miguelitas estate, did
not submit his own inventory. His mandate, as coadministrator, is to submit within three (3) months after
his appointment a true inventory and appraisal of all the
real and personal estate of the deceased which have
come into his possession or knowledge. [19] He could
have submitted an inventory, excluding therefrom
those properties which respondent considered to be
hers. The fact that he did not endeavor to submit one
shows that he acquiesced with petitioners inventory.
Obviously, respondents purpose here was not to
obtain from the intestate court a ruling of what
properties should or should not be included in the
inventory. She wanted something else, i.e., to secure
from the intestate court a final determination of her
claim of ownership over properties comprising the
bulk of Miguelitas estate. The intestate court went

along with respondent on this point as evident in its

Resolution[20] dated May 7, 1996, thus:
On petitioners motion for partition and distribution of
the estate of the late Miguelita Ching Pacioles, it is
believed that since oppositor had interposed a claim
against the subject estate, the distribution thereof in
favor of the heirs could not possibly be implemented as
there is still a need for appropriate proceedings to
determine the propriety of oppositors claim. It must be
mentioned that if it is true that oppositor owns the bulk
of the properties, which she allegedly placed/registered
in the name of the deceased for convenience, Oppositor,
therefore, has a material and direct interest in the estate
and hence, should be given her day in Court.
It is apparent from the foregoing Resolution that the
purpose of the hearing set by the intestate court was
actually to determine the propriety of oppositors
(respondents) claim. According to the intestate court, if
it is true that the oppositor (respondent) owns the
bulk of (Miguelitas) properties, then it means that she
has a material and direct interest in the estate and,
hence, she should be given her day in court. The
intended day in court or hearing is geared towards
resolving the propriety of respondents contention that
she is the true owner of the bulk of Miguelitas estate.
Surely, we cannot be deluded by respondents
ingenious attempt to secure a proceeding for the purpose
of resolving her blanket claim against Miguelitas estate.
Although, she made it appear that her only intent was to
determine the accuracy of petitioners inventory,
however, a close review of the facts and the pleadings
reveals her real intention.
Clearly, the RTC, acting as an intestate court, had
overstepped its jurisdiction. Its proper course should
have been to maintain a hands-off stance on the matter. It
is well-settled in this jurisdiction, sanctioned and
reiterated in a long line of decisions, that when a
question arises as to ownership of property alleged to be
a part of the estate of the deceased person, but claimed
by some other person to be his property, not by virtue of
any right of inheritance from the deceased but by title
adverse to that of the deceased and his estate, such
question cannot be determined in the course of an
intestate or probate proceedings.The intestate or
probate court has no jurisdiction to adjudicate such
contentions, which must be submitted to the court in
the exercise of its general jurisdiction as a regional
trial court.[21]Jurisprudence teaches us that:
[A] probate court or one in charge of proceedings
whether testate or intestate cannot adjudicate or
determine title to properties claimed to be a part of
the estate and which are claimed to belong to outside

parties. All that the said court could do as regards said

properties is to determine whether they should or should
not be included in the inventory or list of properties to be
administered by the administrator. If there is no
dispute, well and good, but if there is, then the
parties, the administrator, and the opposing parties
have to resort to an ordinary action for a final
determination of the conflicting claims of title
because the probate court cannot do so.[22]
Hence, respondents recourse is to file a separate
action with a court of general jurisdiction. The intestate
court is not the appropriate forum for the resolution of
her adverse claim of ownership over properties
ostensibly belonging to Miguelita's estate.
Now, even assuming that the intestate court merely
intended
to
make
a
provisional
or prima
facie determination of the issue of ownership, still
respondents claim cannot prosper. It bears stressing that
the bulk of Miguelitas estate, as stated in petitioners
inventory, comprises real estates covered by the Torrens
System which are registered either in the name of
Miguelita alone or with petitioner. As such, they are
considered the owners of the properties until their
title is nullified or modified in an appropriate
ordinary action. We find this Courts pronouncement
in Bolisay vs. Alcid[23] relevant, thus:
It does not matter that respondent-administratrix has
evidence purporting to support her claim of ownership,
for, on the other hand, petitioners have a Torrens title in
their favor, which under the law is endowed with
incontestability until after it has been set aside in the
manner indicated in the law itself, which, of course, does
not include, bringing up the matter as a mere
incident in special proceedings for the settlement of
the estate of deceased persons. x x x
x x x In regard to such incident of inclusion or exclusion,
We hold that if a property covered by Torrens Title is
involved, the presumptive conclusiveness of such title
should be given due weight, and in the absence of strong
compelling evidence to the contrary, the holder thereof
should be considered as the owner of the property in
controversy until his title is nullified or modified in
an appropriate ordinary action, particularly, when as
in the case at bar, possession of the property itself is
in the persons named in the title. x x x
Corrolarily, P.D. 1529, otherwise known as, The
Property Registration Decree, proscribes collateral
attack against Torrens Title, hence:
Section 48. Certificate not subject to collateral attack.

A certificate of title shall not be subject to collateral

attack. It cannot be altered, modified or cancelled
except in a direct proceeding in accordance with law.
Significantly, a perusal of the records reveals that
respondent failed to present convincing evidence to
bolster her bare assertion of ownership. We quote her
testimony, thus:
Q: I now direct your attention to paragraph (5)
appearing on page 1 of this sworn
statement of yours which I quote: In
accordance with the Chinese tradition and
culture in the distribution of properties to
the legal heirs, we decided to give only a
token to our daughter Miguelita and leave
the rest to our only son Emmanuel, with
the undertaking that being the son he will
take full responsibility of the rest of the
family despite his marriage. Madame
witness, do you recall having stated that
in your sworn statement?
A: Yes sir, but it was not carried out.
Q What was actually given to your daughter
Miguelita is only a token, is that right?
A: Not a token, sir, but one half of the share of
the estate was given to Lita and the other
half was given to Emmanuel.
Q: What went to Emmanuel was also , is that
right?
A: Yes, sir.
Q: What makes up the one half share of Lita, if
you recall?
A: What was given to her were all checks,
sir, but I cannot remember any more
the amount.
xxxxxx
Q: Summing up your testimony, Madame,
you cannot itemize the one half share of
the estate of Miguelita, is that right?
A: Yes, sir.
Q: Was there any document covering this
partition of the estate among you,
Emmanuel and Miguelita with respect
to the estate of your late husband?
A: If I only knew that this will happen
Q: Samakatuwid po ay walang dokumento?
A: Wala po.[24]

She further testified as follows:

Q: Among the properties listed like the
various parcels of land, stocks,
investments, bank accounts and
deposits both here and abroad, interests
and
participation
in
IFS
Pharmaceuticals and Medical Supplies,
Inc. and various motor vehicles, per
your pleasure, Madam Witness, how
should these properties be partitioned
or what should be done with these
properties? According to you earlier,
you are agreeable for the partition of
the said properties with Emil on a 50-50
basis, is that right?
A: Kung ano po ang sa akin, iyon ang dapat na
bumalik sa akin, sir.
Q Halimbawa ay ano po iyon? Real estate
properties, parcels of land located in
Pag-Asa, in Silangan, in San Lazaro, in
Sta. Cruz, in San Francisco del Monte
and shares of stock. Alinsunod sa inyo,
paano po ang dapat na partihan o
hatian ninyo ni Emil?
A: Kung ano ang sa akin
xxxxxx
Q Ang tanong ko po sa inyo ay ganito, ito po
ba ang inyong iminungkahi kay Emil?
Ito po ba ang inyong paghahatian or
hindi?
A:

Iyo akin talaga

pinaghirapan, sir.[25]

na

hindi

nila

Unfortunately, respondent could not even specify

which of the properties listed in petitioners inventory
belong to her. Neither could she present any document to
prove her claim of ownership. The consistently changing
basis of her claim did nothing to improve her posture.
Initially, she insisted that the bulk of Miguelitas estate is
composed of paraphernal properties.[26] Sensing that such
assertion could not strengthen her claim of ownership,
she opted to change her submission and declare that she
and Miguelita were business partners and that she gave
to the latter most of her properties to be used in a joint
business venture.[27] Respondent must have realized early
on that if the properties listed in petitioners inventory are
paraphernal, then Miguelita had the absolute title and
ownership over them and upon her death, such
properties would be vested to her compulsory heirs,
petitioner herein and their two minor children.[28]

At any rate, we must stress that our

pronouncements herein cannot diminish or deprive
respondent of whatever rights or properties she believes
or considers to be rightfully hers. We reiterate that the
question of ownership of properties alleged to be part of
the estate must be submitted to the Regional Trial Court
in the exercise of its general jurisdiction. [29]
WHEREFORE, the instant petition is GRANTED.
The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 41571 are hereby
REVERSED.