Republic of the Philippines court dated May 30, 1984, denying the motion for reconsideration of
SUPREME COURT its decision.
Manila
THIRD DIVISION
 
G.R. No. L-68053 May 7, 1990
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO
ALVAREZ, petitioners, 
vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and
JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO
YANES, and ILUMINADO YANES, respondents.
Francisco G. Banzon for petitioner.
Renecio R. Espiritu for private respondents.
 
FERNAN, C.J.:
This is a petition for review on certiorari seeking the reversal of: (a)
the decision of the Fourth Civil Cases Division of the Intermediate
Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626
entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al." affirming the
decision dated July 8, 1974 of the Court of First Instance of Negros
Occidental insofar as it ordered the petitioners to pay jointly and
severally the private respondents the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of the
cadastral survey of Murcia, Negros Occidental and reversing the
subject decision insofar as it awarded the sums of P2,000.00,
P5,000.00 and P2,000.00 as actual damages, moral damages and
attorney's fees, respectively and (b) the resolution of said appellate
The real properties involved are two parcels of land identified as Lot
773-A and Lot 773-B which were originally known as Lot 773 of the
cadastral survey of Murcia, Negros Occidental. Lot 773, with an area
of 156,549 square meters, was registered in the name of the heirs of
Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804)
issued on October 9, 1917 by the Register of Deeds of Occidental
Negros (Exh. A).
Aniceto Yanes was survived by his children, Rufino, Felipe and
Teodora. Herein private respondents, Estelita, Iluminado and Jesus,
are the children of Rufino who died in 1962 while the other private
respondents, Antonio and Rosario Yanes, are children of Felipe.
Teodora was survived by her child, Jovita (Jovito) Alib. 1 It is not
clear why the latter is not included as a party in this case.
Aniceto left his children Lots 773 and 823. Teodora cultivated only
three hectares of Lot 823 as she could not attend to the other
portions of the two lots which had a total area of around twenty-four
hectares. The record does not show whether the children of Felipe
also cultivated some portions of the lots but it is established that
Rufino and his children left the province to settle in other places as a
result of the outbreak of World War II. According to Estelita, from the
"Japanese time up to peace time", they did not visit the parcels of
land in question but "after liberation", when her brother went there to
get their share of the sugar produced therein, he was informed that
Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were in
possession of Lot 773. 2
It is on record that on May 19, 1938, Fortunato D. Santiago was
issued Transfer Certificate of Title No. RF 2694 (29797) covering Lot
773-A with an area of 37,818 square meters. 3 TCT No. RF 2694
describes Lot 773-A as a portion of Lot 773 of the cadastral survey of
Murcia and as originally registered under OCT No. 8804.
The bigger portion of Lot 773 with an area of 118,831 square meters
was also registered in the name of Fortunato D. Santiago on
September 6, 1938 Under TCT No. RT-2695 (28192 ). 4 Said transfer
certificate of title also contains a certification to the effect that Lot
773-B was originally registered under OCT No. 8804.
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B.
Fuentebella, Jr. in consideration of the sum of
P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T-
19291 and T-19292 were issued in Fuentebella's name. 6
After Fuentebella's death and during the settlement of his estate, the
administratrix thereof (Arsenia R. Vda. de Fuentebella, his wife) filed
in Special Proceedings No. 4373 in the Court of First Instance of
Negros Occidental, a motion requesting authority to sell Lots 773-A
and 773-B. 7 By virtue of a court order granting said motion, 8 on
March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for
P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT Nos.
T-23165 and T-23166 covering Lots 773-A and 773-B were
respectively issued to Rosendo Alvarez. 10
Two years later or on May 26, 1960, Teodora Yanes and the children
of her brother Rufino, namely, Estelita, Iluminado and Jesus, filed in
the Court of First Instance of Negros Occidental a complaint against
Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the
Register of Deeds of Negros Occidental for the "return" of the
ownership and possession of Lots 773 and 823. They also prayed
that an accounting of the produce of the land from 1944 up to the
filing of the complaint be made by the defendants, that after court
approval of said accounting, the share or money equivalent due the
plaintiffs be delivered to them, and that defendants be ordered to pay
plaintiffs P500.00 as damages in the form of attorney's fees. 11
During the pendency in court of said case or on November 13, 1961,
Alvarez sold Lots 773-A, 773-B and another lot for P25,000.00 to Dr.
Rodolfo Siason. 12 Accordingly, TCT Nos. 30919 and 30920 were
issued to Siason, 13 who thereafter, declared the two lots in his name
for assessment purposes. 14
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf
and in behalf of the other plaintiffs, and assisted by their counsel,
filed a manifestation in Civil Case No. 5022 stating that the therein
plaintiffs "renounce, forfeit and quitclaims (sic) any claim, monetary
or otherwise, against the defendant Arsenia Vda. de Fuentebella in
connection with the above-entitled case." 15
On October 11, 1963, a decision was rendered by the Court of First
Instance of Negros Occidental in Civil Case No. 5022, the dispositive
portion of which reads:
WHEREFORE, judgment is rendered, ordering the
defendant Rosendo Alvarez to reconvey to the
plaintiffs lots Nos. 773 and 823 of the Cadastral
Survey of Murcia, Negros Occidental, now covered
by Transfer Certificates of Title Nos. T-23165 and T-
23166 in the name of said defendant, and thereafter
to deliver the possession of said lots to the plaintiffs.
No special pronouncement as to costs.
SO ORDERED. 16
It will be noted that the above-mentioned manifestation of Jesus
Yanes was not mentioned in the aforesaid decision.
However, execution of said decision proved unsuccessful with
respect to Lot 773. In his return of service dated October 20, 1965,
the sheriff stated that he discovered that Lot 773 had been
subdivided into Lots 773-A and 773-B; that they were "in the name"
of Rodolfo Siason who had purchased them from Alvarez, and that
Lot 773 could not be delivered to the plaintiffs as Siason was "not a
party per writ of execution." 17
The execution of the decision in Civil Case No. 5022 having met a
hindrance, herein private respondents (the Yaneses) filed on July 31,
1965, in the Court of First Instance of Negros Occidental a petition
for the issuance of a new certificate of title and for a declaration of
nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo
Alvarez. 18 Thereafter, the court required Rodolfo Siason to produce
the certificates of title covering Lots 773 and 823.
Expectedly, Siason filed a manifestation stating that he purchased
Lots 773-A, 773-B and 658, not Lots 773 and 823, "in good faith and
for a valuable consideration without any knowledge of any lien or
encumbrances against said properties"; that the decision in the
cadastral proceeding 19 could not be enforced against him as he was
not a party thereto; and that the decision in Civil Case No. 5022
could neither be enforced against him not only because he was not a
party-litigant therein but also because it had long become final and
executory. 20 Finding said manifestation to be well-founded, the
cadastral court, in its order of September 4, 1965, nullified its
previous order requiring Siason to surrender the certificates of title
mentioned therein. 21
In 1968, the Yaneses filed an ex-parte motion for the issuance of an
alias writ of execution in Civil Case No. 5022. Siason opposed it. 22 In
its order of September 28, 1968 in Civil Case No. 5022, the lower
court, noting that the Yaneses had instituted another action for the
recovery of the land in question, ruled that at the judgment therein
could not be enforced against Siason as he was not a party in the
case. 23
The action filed by the Yaneses on February 21, 1968 was for
recovery of real property with damages. 24 Named defendants therein
were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo
Alvarez and the Register of Deeds of Negros Occidental. The
Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292
issued to Siason (sic) for being null and void; the issuance of a new
certificate of title in the name of the Yaneses "in accordance with the
sheriffs return of service dated October 20, 1965;" Siason's delivery
of possession of Lot 773 to the Yaneses; and if, delivery thereof
could not be effected, or, if the issuance of a new title could not be
made, that the Alvarez and Siason jointly and severally pay the
Yaneses the sum of P45,000.00. They also prayed that Siason
render an accounting of the fruits of Lot 773 from November 13,
1961 until the filing of the complaint; and that the defendants jointly
and severally pay the Yaneses moral damages of P20,000.00 and
exemplary damages of P10,000.00 plus attorney's fees of P4,
000.00. 25
In his answer to the complaint, Siason alleged that the validity of his
titles to Lots 773-A and 773-B, having been passed upon by the
court in its order of September 4, 1965, had become res judicata and
the Yaneses were estopped from questioning said order. 26 On their
part, the Alvarez stated in their answer that the Yaneses' cause of
action had been "barred by res judicata, statute of limitation and
estoppel." 27
In its decision of July 8, 1974, the lower court found that Rodolfo
Siason, who purchased the properties in question thru an agent as
he was then in Mexico pursuing further medical studies, was a buyer
in good faith for a valuable consideration. Although the Yaneses
were negligent in their failure to place a notice of lis pendens "before
the Register of Deeds of Negros Occidental in order to protect their
rights over the property in question" in Civil Case No. 5022, equity
demanded that they recover the actual value of the land because the
sale thereof executed between Alvarez and Siason was without court
approval. 28 The dispositive portion of the decision states:
IN VIEW OF THE FOREGOING CONSIDERATION,
judgment is hereby rendered in the following
manner:
A. The case against the defendant Dr. Rodolfo
Siason and the Register of Deeds are (sic) hereby
dismmissed,
B. The defendants, Laura, Flora and Raymundo, all
surnamed Alvarez being the legitimate children of
the deceased Rosendo Alvarez are hereby ordered
to pay jointly and severally the plaintiffs the sum of
P20,000.00 representing the actual value of Lots
Nos. 773-A and 773-B of Murcia Cadastre, Negros
Occidental; the sum of P2,000.00 as actual
damages suffered by the plaintiff; the sum of
P5,000.00 representing moral damages and the sum
of P2.000 as attorney's fees, all with legal rate of
interest from date of the filing of this complaint up to
final payment.
 C. The cross-claim filed by the defendant Dr.
Rodolfo Siason against the defendants, Laura, Flora
and Raymundo, all surnamed Alvarez is hereby
dismissed.
D. Defendants, Laura, Flora and Raymundo, all
surnamed Alvarez are hereby ordered to pay the
costs of this suit.
SO ORDERED. 29
The Alvarez appealed to the then Intermediate Appellate Court which
in its decision of August 31, 1983 30 affirmed the lower court's
decision "insofar as it ordered defendants-appellants to pay jointly
and severally the plaintiffs-appellees the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of the
cadastral survey of Murcia, Negros Occidental, and is reversed
insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees,
respectively." 31 The dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is
affirmed insofar as it ordered defendants-appellants
to pay jointly and severally the plaintiffs- appellees
the sum of P20,000.00 representing the actual value
of Lots Nos. 773-A and 773-B of the cadastral
survey of Murcia, Negros Occidental, and is
reversed insofar as it awarded the sums of
P2,000.00, P5,000.00 and P2,000.00 as actual
damages, moral damages and attorney's fees,
respectively. No costs.
SO ORDERED. 32
Finding no cogent reason to grant appellants motion for
reconsideration, said appellate court denied the same.
Hence, the instant petition. ln their memorandum petitioners raised
the following issues:
1. Whethere or not the defense of prescription and
estoppel had been timely and properly invoked and
raised by the petitioners in the lower court.
2. Whether or not the cause and/or causes of action
of the private respondents, if ever there are any, as
alleged in their complaint dated February 21, 1968
which has been docketed in the trial court as Civil
Case No. 8474 supra, are forever barred by statute
of limitation and/or prescription of action and
estoppel.
3. Whether or not the late Rosendo Alvarez, a
defendant in Civil Case No. 5022, supra and father
of the petitioners become a privy and/or party to the
waiver (Exhibit 4-defendant Siason) in Civil Case
No. 8474, supra where the private respondents had
unqualifiedly and absolutely waived, renounced and
quitclaimed all their alleged rights and interests, if
ever there is any, on Lots Nos. 773-A and 773-B of
Murcia Cadastre as appearing in their written
manifestation dated November 6, 1962 (Exhibits "4"
Siason) which had not been controverted or even
impliedly or indirectly denied by them.
4. Whether or not the liability or liabilities of Rosendo
Alvarez arising from the sale of Lots Nos. 773-A and
773-B of Murcia Cadastre to Dr. Rodolfo Siason, if
ever there is any, could be legally passed or
transmitted by operations (sic) of law to the
petitioners without violation of law and due
process . 33
The petition is devoid of merit.
As correctly ruled by the Court of Appeals, it is powerless and for that
matter so is the Supreme Court, to review the decision in Civil Case
No. 5022 ordering Alvarez to reconvey the lots in dispute to herein
private respondents. Said decision had long become final and
executory and with the possible exception of Dr. Siason, who was
not a party to said case, the decision in Civil Case No. 5022 is the
law of the case between the parties thereto. It ended when Alvarez
or his heirs failed to appeal the decision against them. 34
Thus, it is axiomatic that when a right or fact has been judicially tried
and determined by a court of competent jurisdiction, so long as it
remains unreversed, it should be conclusive upon the parties and
those in privity with them in law or estate. 35 As consistently ruled by
this Court, every litigation must come to an end. Access to the court
is guaranteed. But there must be a limit to it. Once a litigant's right
has been adjudicated in a valid final judgment of a competent court,
he should not be granted an unbridled license to return for another
try. The prevailing party should not be harassed by subsequent suits.
For, if endless litigation were to be allowed, unscrupulous litigations
will multiply in number to the detriment of the administration of
justice. 36
There is no dispute that the rights of the Yaneses to the properties in
question have been finally adjudicated in Civil Case No. 5022. As
found by the lower court, from the uncontroverted evidence
presented, the Yaneses have been illegally deprived of ownership
and possession of the lots in question. 37 In fact, Civil Case No. 8474
now under review, arose from the failure to execute Civil Case No.
5022, as subject lots can no longer be reconveyed to private
respondents Yaneses, the same having been sold during the
pendency of the case by the petitioners' father to Dr. Siason who did
not know about the controversy, there being no lis pendens
annotated on the titles. Hence, it was also settled beyond question
that Dr. Siason is a purchaser in good faith.
Under the circumstances, the trial court did not annul the sale
executed by Alvarez in favor of Dr. Siason on November 11, 1961
but in fact sustained it. The trial court ordered the heirs of Rosendo
Alvarez who lost in Civil Case No. 5022 to pay the plaintiffs (private
respondents herein) the amount of P20,000.00 representing the
actual value of the subdivided lots in dispute. It did not order
defendant Siason to pay said amount. 38
As to the propriety of the present case, it has long been established
that the sole remedy of the landowner whose property has been
wrongfully or erroneously registered in another's name is to bring an
ordinary action in the ordinary court of justice for reconveyance or, if
the property has passed into the hands of an innocent purchaser for
value, for damages. 39 "It is one thing to protect an innocent third
party; it is entirely a different matter and one devoid of justification if
deceit would be rewarded by allowing the perpetrator to enjoy the
fruits of his nefarious decided As clearly revealed by the undeviating
line of decisions coming from this Court, such an undesirable
eventuality is precisely sought to be guarded against." 40
The issue on the right to the properties in litigation having been
finally adjudicated in Civil Case No. 5022 in favor of private
respondents, it cannot now be reopened in the instant case on the
pretext that the defenses of prescription and estoppel have not been
properly considered by the lower court. Petitioners could have
appealed in the former case but they did not. They have therefore
foreclosed their rights, if any, and they cannot now be heard to
complain in another case in order to defeat the enforcement of a
judgment which has longing become final and executory.
Petitioners further contend that the liability arising from the sale of
Lots No. 773-A and 773-B made by Rosendo Alvarez to Dr. Rodolfo
Siason should be the sole liability of the late Rosendo Alvarez or of
his estate, after his death.
Such contention is untenable for it overlooks the doctrine obtaining in
this jurisdiction on the general transmissibility of the rights and
obligations of the deceased to his legitimate children and heirs. Thus,
the pertinent provisions of the Civil Code state:
Art. 774. Succession is a mode of acquisition by
virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person
are transmitted through his death to another or
others either by his will or by operation of law.
 Art. 776. The inheritance includes all the property,
rights and obligations of a person which are not
extinguished by his death.
Art. 1311. Contract stake effect only between the
parties, their assigns and heirs except in case where
the rights and obligations arising from the contract
are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not
liable beyond the value of the property received from
the decedent.
As explained by this Court through Associate Justice J.B.L. Reyes in
the case of Estate of Hemady vs. Luzon Surety Co., Inc.  41
The binding effect of contracts upon the heirs of the
deceased party is not altered by the provision of our
Rules of Court that money debts of a deceased must
be liquidated and paid from his estate before the
residue is distributed among said heirs (Rule 89).
The reason is that whatever payment is thus made
from the state is ultimately a payment by the heirs or
distributees, since the amount of the paid claim in
fact diminishes or reduces the shares that the heirs
would have been entitled to receive.
Under our law, therefore. the general rule is that a
party's contractual rights and obligations are
transmissible to the successors.
The rule is a consequence of the progressive
"depersonalization" of patrimonial rights and duties
that, as observed by Victorio Polacco has
characterized the history of these institutions. From
the Roman concept of a relation from person to
person, the obligation has evolved into a relation
from patrimony to patrimony with the persons
occupying only a representative position, barring
those rare cases where the obligation is strictly
personal, i.e., is contracted intuitu personae, in
consideration of its performance by a specific person
and by no other.
xxx xxx xxx
Petitioners being the heirs of the late Rosendo Alvarez, they cannot
escape the legal consequences of their father's transaction, which
gave rise to the present claim for damages. That petitioners did not
inherit the property involved herein is of no moment because by legal
fiction, the monetary equivalent thereof devolved into the mass of
their father's hereditary estate, and we have ruled that the hereditary
assets are always liable in their totality for the payment of the debts
of the estate. 42
It must, however, be made clear that petitioners are liable only to the
extent of the value of their inheritance. With this clarification and
considering petitioners' admission that there are other properties left
by the deceased which are sufficient to cover the amount adjudged
in favor of private respondents, we see no cogent reason to disturb
the findings and conclusions of the Court of Appeals.
WHEREFORE, subject to the clarification herein above stated, the
assailed decision of the Court of Appeals is hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.
G.R. No. 77029 August 30, 1990
BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE,
ENRIQUITA and CLAUDIO, all surnamed, GEVERO, petitioners, 
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE
DEVELOPMENT CORPORATION, respondents.
Carlito B. Somido for petitioners.
Benjamin N. Tabios for private respondent.
PARAS,  J.:
This is a petition for review on certiorari of the March 20, 1988
decision 1 of the then Intermediate Appellate Court (now Court of
Appeals) in AC-GR CV No. 69264, entitled Del Monte Development
Corporation vs. Enrique Ababa, et al., etc. affirming the decision 2 of
the then Court of First Instance (now Regional Trial Court) of
Misamis Oriental declaring the plaintiff corporation as the true and
absolute owner of that portion of Lot 476 of the Cagayan Cadastre,
particularly Lot No. 2476-D of the subdivision plan (LRC) Psd-80450,
containing an area of Seven Thousand Eight Hundred Seventy Eight
(7,878) square meters more or less.
As found by the Appellate Court, the facts are as follows:
The parcel of land under litigation is Lot No. 2476 of
the Subdivision Plan Psd-37365 containing an area
of 20,119 square meters and situated at Gusa,
Cagayan de Oro City. Said lot was acquired by
purchase from the late Luis Lancero on September
15, 1964 as per Deed of Absolute Sale executed in
favor of plaintiff and by virtue of which Transfer
Certificate of Title No. 4320 was issued to plaintiff
(DELCOR for brevity). Luis Lancero, in turn acquired
the same parcel from Ricardo Gevero on February
5, 1952 per deed of sale executed by Ricardo
Gevero which was duly annotated as entry No. 1128
at the back of Original Certificate of Title No. 7610
covering the mother lot identified as Lot No. 2476 in
the names of Teodorica Babangha — 1/2 share and
her children: Maria; Restituto, Elena, Ricardo,
Eustaquio and Ursula, all surnamed surnamed
Gevero, 1/2 undivided share of the whole area
containing 48,122 square meters.
Teodorica Babangha died long before World War II
and was survived by her six children
aforementioned. The heirs of Teodorica Babangha
on October 17,1966 executed an Extra-Judicial
Settlement and Partition of the estate of Teodorica
Babangha, consisting of two lots, among them was
lot 2476. By virtue of the extra-judicial settlement
and partition executed by the said heirs of Teodorica
Babangha, Lot 2476-A to Lot 2476-I, inclusive, under
subdivision plan (LRC) Psd-80450 duly approved by
the Land Registration Commission, Lot 2476-D,
among others, was adjudicated to Ricardo Gevero
who was then alive at the time of extra-judicial
settlement and partition in 1966. Plaintiff (private
respondent herein) filed an action with the CFI (now
RTC) of Misamis Oriental to quiet title and/or annul
the partition made by the heirs of Teodorica
Babangha insofar as the same prejudices the land
which it acquired a portion of lot 2476.
Plaintiff now seeks to quiet title and/or annul the
partition made by the heirs of Teodorica Babangha
insofar as the same prejudices the land which it
acquired, a portion of Lot 2476. Plaintiff proved that
before purchasing Lot 2476-A it first investigated and
checked the title of Luis Lancero and found the
same to be intact in the office of the Register of
Deeds of Cagayan de Oro City. The same with the
subdivision plan (Exh. "B"), the corresponding
technical description (Exh. "P") and the Deed of Sale
executed by Ricardo Gevero — all of which were
found to be unquestionable. By reason of all these,
plaintiff claims to have bought the land in good faith
and for value, occupying the land since the sale and
taking over from Lancero's possession until May
 1969, when the defendants Abadas forcibly entered
the property. (Rollo, p. 23)
After trial the court a quo on July 18, 1977 rendered judgment, the
dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is
hereby rendered declaring the plaintiff corporation as
the true and absolute owner of that portion of Lot No.
2476 of the Cagayan Cadastre, particularly Lot No.
2476-D of the subdivision plan (LRC) Psd-80450,
containing an area of SEVEN THOUSAND EIGHT
HUNDRED SEVENTY EIGHT (7,878) square
meters, more or less. The other portions of Lot No.
2476 are hereby adjudicated as follows:
Lot No. 2476 – B – to the heirs of Elena Gevero;
Lot No. 2476 – C – to the heirs of Restituto Gevero;
Lot No. 2476 – E – to the defendant spouses
Enrique C. Torres and Francisca Aquino;
Lot No. 2476 – F – to the defendant spouses Eduard
Rumohr and Emilia Merida Rumohf ;
Lot Nos. 2476-H, 2476-I and 2476 — G — to
defendant spouses Enrique Abada and Lilia Alvarez
Abada.
No adjudication can be made with respect to Lot No.
2476-A considering that the said lot is the subject of
a civil case between the Heirs of Maria Gevero on
one hand and the spouses Daniel Borkingkito and
Ursula Gevero on the other hand, which case is now
pending appeal before the Court of Appeals. No
pronouncement as to costs,
SO ORDERED. (Decision, Record on Appeal, p.
203; Rollo, pp. 21-22)
From said decision, defendant heirs of Ricardo Gevero (petitioners
herein) appealed to the IAC (now Court of Appeals) which
subsequently, on March 20, 1986, affirmed the decision appealed
from.
Petitioners, on March 31, 1986, filed a motion for reconsideration
(Rollo, p. 28) but was denied on April 21, 1986.
Hence, the present petition.
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are:
1) whether or not the deed of sale executed by Ricardo
Gevero to Luis Lancero is valid; 2) in the affirmative, whether
or not the 1/2 share of interest of Teodorica Babangha in one
of the litigated lots, lot no. 2476 under OCT No. 7610 is
included in the deed of sale; and 3) whether or not the
private respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely
invalid citing alleged flaws thereto, such as that: 1) the signature of
Ricardo was forged without his knowledge of such fact; 2) Lancero
had recognized the fatal defect of the 1952 deed of sale when he
signed the document in 1968 entitled "Settlement to Avoid the
Litigation"; 3) Ricardo's children remained in the property
notwithstanding the sale to Lancero; 4) the designated Lot No. is
2470 instead of the correct number being Lot No. 2476; 5) the deed
of sale included the share of Eustaquio Gevero without his authority;
6) T.C.T. No. 1183 of Lancero segregated the area of 20,119 square
meters from the bigger area (OCT No. 7616) without the consent of
the other co-owners; 7) Lancero caused the 1952 Subdivision survey
without the consent of the Geveros' to bring about the segregation of
the 20,119 square meters lot from the mother lot 2476 which brought
about the issuance of his title T-1183 and to DELCOR's title T4320,
both of which were illegally issued; and 8) the area sold as per
document is 20,649 square meters whereas the segregated area
covered by TCT No. T-1183 of Lancero turned out to be 20,119
square meters (Petitioners Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the 1952 deed
of sale in favor of Lancero was forged without Ricardo's knowledge
of such fact (Rollo, p. 71) it will be observed that the deed of sale in
question was executed with all the legal formalities of a public
document. The 1952 deed was duly acknowledged by both parties
before the notary public, yet petitioners did not bother to rebut the
legal presumption of the regularity of the notarized document (Dy v.
Sacay, 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423,
March 13, 1989). In fact it has long been settled that a public
document executed and attested through the intervention of the
notary public is evidence of the facts in clear, unequivocal manner
therein expressed. It has the presumption of regularity and to
contradict all these, evidence must be clear, convincing and more
than merely preponderant (Rebuleda v. I.A.C., 155 SCRA 520-521
[1987]). Forgery cannot be presumed, it must be proven (Siasat v.
IAC, No. 67889, October 10, 1985). Likewise, petitioners allegation
of absence of consideration of the deed was not substantiated.
Under Art. 1354 of the Civil Code, consideration is presumed unless
the contrary is proven.
As to petitioners' contention that Lancero had recognized the fatal
defect of the 1952 deed when he signed the document in 1968
entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule
of evidence that the right of a party cannot be prejudiced by an act,
declaration, or omission of another (Sec. 28. Rule 130, Rules of
Court). This particular rule is embodied in the maxim "res inter alios
acta alteri nocere non debet." Under Section 31, Rule 130, Rules of
Court "where one derives title to property from another, the act,
declaration, or omission of the latter, while holding the title, in relation
to the property is evidence against the former." It is however
stressed that the admission of the former owner of a property must
have been made while he was the owner thereof in order that such
admission may be binding upon the present owner (City of Manila v.
del Rosario, 5 Phil. 227 [1905]; Medel v. Avecilla, 15 Phil. 465
[1910]). Hence, Lanceros' declaration or acts of executing the 1968
document have no binding effect on DELCOR, the ownership of the
land having passed to DELCOR in 1964.
Petitioners' claim that they remained in the property, notwithstanding
the alleged sale by Ricardo to Lancero (Rollo, p. 71) involves a
question of fact already raised and passed upon by both the trial and
appellate courts. Said the Court of Appeals:
Contrary to the allegations of the appellants, the trial
court found that Luis Lancero had taken possession
of the land upon proper investigation by plaintiff the
latter learned that it was indeed Luis Lancero who
was the owner and possessor of Lot 2476 D. . . .
(Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De Gola-Sison v.
Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14 SCRA 282 [1965];
Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA
54 [1967]; Ramirez Tel. Co. v. Bank of America, 33 SCRA 737
[1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142
SCRA 130 [1986]).
Suffice it to say that the other flaws claimed by the petitioners which
allegedly invalidated the 1952 deed of sale have not been raised
before the trial court nor before the appellate court. It is settled
jurisprudence that an issue which was neither averred in the
complaint nor raised during the trial in the court below cannot be
raised for the first time on appeal as it would be offensive to the basic
rules of fair play, justice and due process. (Matienzo v. Servidad, 107
SCRA 276 [1981]; Dela Santa v. C.A., 140 SCRA 44 [1985];
Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v. IAC, 147
SCRA 434 [1987]; Dulos Realty and Development Corporation v.
C.A., 157 SCRA [1988]; Kamos v. IAC, G.R. No. 78282, July 5,
1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of
Ricardo) in Lot 2476 under OCT No. 7610 was not included in the
deed of sale as it was intended to limit solely to Ricardos'
proportionate share out of the undivided 1/2 of the area pertaining to
the six (6) brothers and sisters listed in the Title and that the Deed
did not include the share of Ricardo, as inheritance from Teodorica,
because the Deed did not recite that she was deceased at the time it
was executed (Rollo, pp. 67-68).
The hereditary share in a decedents' estate is transmitted or vested
immediately from the moment of the death of the "causante" or
predecessor in interest (Civil Code of the Philippines, Art. 777), and
there is no legal bar to a successor (with requisite contracting
capacity) disposing of his hereditary share immediately after such
death, even if the actual extent of such share is not determined until
the subsequent liquidation of the estate (De Borja v. Vda. de Borja,
46 SCRA 577 [1972]).
Teodorica Babangha died long before World War II, hence, the rights
to the succession were transmitted from the moment of her death. It
is therefore incorrect to state that it was only in 1966, the date of
extrajudicial partition, when Ricardo received his share in the lot as
inheritance from his mother Teodorica. Thus, when Ricardo sold his
share over lot 2476 that share which he inherited from Teodorica
was also included unless expressly excluded in the deed of sale.
Petitioners contend that Ricardo's share from Teodorica was
excluded in the sale considering that a paragraph of the
aforementioned deed refers merely to the shares of Ricardo and
Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed as to
harmonize and give effect to the different provisions thereof
(Reparations Commission v. Northern Lines, Inc., 34 SCRA 203
[1970]), to ascertain the meaning of the provisions of a contract, its
entirety must be taken into account (Ruiz v. Sheriff of Manila, 34
SCRA 83 [1970]). The interpretation insisted upon by the petitioners,
by citing only one paragraph of the deed of sale, would not only
create contradictions but also, render meaningless and set at naught
the entire provisions thereof.
Petitioners claim that DELCOR's action is barred by laches
considering that the petitioners have remained in the actual, open,
uninterrupted and adverse possession thereof until at present (Rollo,
p. 17).
An instrument notarized by a notary public as in the case at bar is a
public instrument (Eacnio v. Baens, 5 Phil. 742). The execution of a
public instrument is equivalent to the delivery of the thing (Art. 1498,
1st Par., Civil Code) and is deemed legal delivery. Hence, its
execution was considered a sufficient delivery of the property
(Buencamino v. Viceo, 13 Phil. 97; [1906]; Puato v. Mendoza, 64
Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca, 108 Phil. 900 [1960];
Phil. Suburban Development Corp. v. Auditor Gen., 63 SCRA 397
(1975]).
Besides, the property sold is a registered land. It is the act of
registration that transfers the ownership of the land sold. (GSIS v.
C.A., G.R. No. 42278, January 20, 1989). If the property is a
registered land, the purchaser in good, faith has a right to rely on the
certificate of title and is under no duty to go behind it to look for flaws
(Mallorca v. De Ocampo, No. L-26852, March 25, 1970; Unchuan v.
C.A., 161 SCRA 710 [1988]; Nuguid v. CA-G.R. No. 77427, March
13, 1989).
Under the established principles of land registration law, the person
dealing with registered land may generally rely on the correctness of
its certificate of title and the law will in no way oblige him to go
behind the certificate to determine the condition of the property
(Tiongco v. de la Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R.
No. 49739, January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA
612 [1989]). This notwithstanding, DELCOR did more than that. It did
not only rely on the certificate of title. The Court of Appeals found
that it had first investigated and checked the title (T.C.T. No. T-1183)
in the name of Luis Lancero. It likewise inquired into the Subdivision
Plan, the corresponding technical description and the deed of sale
executed by Ricardo Gevero in favor of Luis Lancero and found
everything in order. It even went to the premises and found Luis
Lancero to be in possession of the land to the exclusion of any other
person. DELCOR had therefore acted in good faith in purchasing the
land in question.
Consequently, DELCOR's action is not barred by laches.
The main issues having been disposed of, discussion of the other
issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby
DISMISSED and the decision of the Court of Appeals is hereby
AFFIRMED.
SO ORDERED.
G.R. No. 89783 February 19, 1992
MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN,
AUREA B. LOCSIN, MATILDE L. CORDERO, SALVADOR B.
LOCSIN and MANUEL V. DEL ROSARIO, petitioners, 
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO
JAUCIAN, MERCEDES JAUCIAN ARBOLEDA, HEIRS OF
JOSEFINA J. BORJA, HEIRS OF EDUARDO JAUCIAN and HEIRS
OF VICENTE JAUCIAN, respondents.
Aytona Law Office and Siquia Law Offices for petitioners.
Mabella, Sangil & Associates for private respondents.
 
NARVASA, C.J.:
Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-
11186 — affirming with modification the judgment of the Regional
Trial Court of Albay in favor of the plaintiffs in Civil Case No. 7152
entitled "Jose Jaucian, et al. v. Mariano B. Locsin, et al.,"  an action
for recovery of real property with damages — is sought. in these
proceedings initiated by petition for review on certiorari in
accordance with Rule 45 of the Rules of Court.
The petition was initially denied due course and dismissed by this
Court. It was however reinstated upon a second motion for
reconsideration filed by the petitioners, and the respondents were
required to comment thereon. The petition was thereafter given due
course and the parties were directed to submit their memorandums.
These, together with the evidence, having been carefully considered,
the Court now decides the case.
First, the facts as the Court sees them in light of the evidence on
record:
The late Getulio Locsin had three children named Mariano, Julian
and Magdalena, all surnamed Locsin. He owned extensive
residential and agricultural properties in the provinces of Albay and
Sorsogon. After his death, his estate was divided among his three (3)
children as follows:
(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon,
were adjudicated to his daughter, Magdalena Locsin;
(b) 106 hectares of coconut lands were given to Julian Locsin, father
of the petitioners Julian, Mariano, Jose, Salvador, Matilde, and
Aurea, all surnamed Locsin;
(c) more than forty (40) hectares of coconut lands in Bogtong,
eighteen (18) hectares of riceland in Daraga, and the residential lots
in Daraga, Albay and in Legazpi City went to his son Mariano, which
Mariano brought into his marriage to Catalina Jaucian in 1908.
Catalina, for her part, brought into the marriage untitled properties
which she had inherited from her parents, Balbino Jaucian and
Simona Anson. These were augmented by other properties acquired
by the spouses in the course of their union, 1 which however was not
blessed with children.
Eventually, the properties of Mariano and Catalina were brought
under the Torrens System. Those that Mariano inherited from his
father, Getulio Locsin, were surveyed cadastrally and registered in
the name of "Mariano Locsin, married to Catalina Jaucian.'' 2
Mariano Locsin executed a Last Will and Testament instituting his
wife, Catalina, as the sole and universal heir of all his
properties. 3 The will was drawn up by his wife's nephew and trusted
legal adviser, Attorney Salvador Lorayes. Attorney Lorayes disclosed
that the spouses being childless, they had agreed that their
properties, after both of them shall have died should revert to their
respective sides of the family, i.e., Mariano's properties would go to
his "Locsin relatives" (i.e., brothers and sisters or nephews and
nieces), and those of Catalina to her "Jaucian relatives." 4
Don Mariano Locsin died of cancer on September 14, 1948 after a
lingering illness. In due time, his will was probated in Special
Proceedings No. 138, CFI of Albay without any opposition from both
sides of the family. As directed in his will, Doña Catalina was
appointed executrix of his estate. Her lawyer in the probate
proceeding was Attorney Lorayes. In the inventory of her husband's
estate 5 which she submitted to the probate court for
approval, 6Catalina declared that "all items mentioned from Nos. 1 to
33 are the private properties of the deceased and form part of his
capital at the time of the marriage with the surviving spouse, while
items Nos. 34 to 42 are conjugal." 7
Among her own and Don Mariano's relatives, Doña Catalina was
closest to her nephew, Attorney Salvador Lorayes, her nieces, Elena
Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the
husbands of the last two: Hostilio Cornelio and Fernando
Velasco. 8 Her trust in Hostilio Cornelio was such that she made him
custodian of all the titles of her properties; and before she disposed
of any of them, she unfailingly consulted her lawyer-nephew,
Attorney Salvador Lorayes. It was Atty. Lorayes who prepared the
legal documents and, more often than not, the witnesses to the
transactions were her niece Elena Jaucian, Maria Lorayes-Cornelio,
Maria Olbes-Velasco, or their husbands. Her niece, Elena Jaucian,
was her life-long companion in her house.
Don Mariano relied on Doña Catalina to carry out the terms of their
compact, hence, nine (9) years after his death, as if in obedience to
his voice from the grave, and fully cognizant that she was also
advancing in years, Doña Catalina began transferring, by sale,
donation or assignment, Don Mariano's as well as her own,
properties to their respective nephews and nieces. She made the
following sales and donation of properties which she had received
from her husband's estate, to his Locsin nephews and nieces:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES
23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481
favor of Mariano Locsin
1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000
Jose R. Locsin
1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio
Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
2 Feb. 4, 1975 Deed of Donation in 34,045
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
3 Sept. 9, 1975 Deed of Donation in (Lot 2059)
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio
favor of Aurea B. Locsin Fernando Velasco
5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Maria Jaucian Lorayes
Cornelio Cornelio
favor of Aurea B. Locsin Elena Jaucian
Of her own properties, Doña Catalina conveyed the following to her
6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto - own nephews and nieces and others:
favor of Aurea B. Locsin
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE
7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto -
favor of Aurea B. Locsin 2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000
Vicente Jaucian (lot 2020)
15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto - (6,825 sqm. when
Aurea Locsin resurveyed)

16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson 24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000
Aurea Locsin M. Acabado in favor of Francisco M.
Maquiniana
17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor
Satuito 26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300
Aurea Locsin Mariano B. Locsin favor of Francisco
Maquiniana
19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto -
favor of Mariano Locsin 27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000
favor of Ireneo Mamia
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000
Delfina Anson 28 May 3, 1973 Deed of Absolute Sale in 75 P 750
in favor of Manuel V. del (Lot 2155) Antonio Illegible favor of Zenaida Buiza
Rosario whose maternal
grandfather was Getulio 29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500
Locsin favor of Felisa Morjella

2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000
Antonio Illegible favor of Inocentes Motocinos
in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals 31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500
from bigger portion of favor of Casimiro Mondevil
Lot 2155 leased to Filoil
Refinery were assigned to
32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200
favor of Juan Saballa
25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500
of Rogelio Marticio
Doña Catalina died on July 6, 1977.
Four years before her death, she had made a will on October 22,
1973 affirming and ratifying the transfers she had made during her
lifetime in favor of her husband's, and her own, relatives. After the
reading of her will, all the relatives agreed that there was no need to
submit it to the court for probate because the properties devised to
them under the will had already been conveyed to them by the
deceased when she was still alive, except some legacies which the
executor of her will or estate, Attorney Salvador Lorayes, proceeded
to distribute.
In 1989, or six (6) years after Doña Catalina's demise, some of her
Jaucian nephews and nieces who had already received their
legacies and hereditary shares from her estate, filed action in the
Regional Trial Court of Legaspi City (Branch VIII, Civil Case No.
7152) to recover the properties which she had conveyed to the
Locsins during her lifetime, alleging that the conveyances were
inofficious, without consideration, and intended solely to circumvent
the laws on succession. Those who were closest to Doña Catalina
did not join the action.
After the trial, judgment was rendered on July 8, l985 in favor of the
plaintiffs (Jaucian), and against the Locsin defendants, the
dispositive part of which reads:
WHEREFORE, this Court renders judgment for the
plaintiffs and against the defendants:
(1) declaring the, plaintiffs, except the heirs of
Josefina J. Borja and Eduardo Jaucian, who
withdrew, the rightful heirs and entitled to the entire
estate, in equal portions, of Catalina Jaucian Vda. de
Locsin, being the nearest collateral heirs by right of
representation of Juan and Gregorio, both surnamed
Jaucian, and full-blood brothers of Catalina;
(2) declaring the deeds of sale, donations,
reconveyance and exchange and all other
instruments conveying any part of the estate of
Catalina J. Vda. de Locsin including, but not limited
to those in the inventory of known properties (Annex
B of the complaint) as null and void ab-initio;
(3) ordering the Register of Deeds of Albay and/or
Legazpi City to cancel all certificates of title and
other transfers of the real properties, subject of this
case, in the name of defendants, and derivatives
therefrom, and issue new ones to the plaintiffs;
(4) ordering the defendants, jointly and severally, to
reconvey ownership and possession of all such
properties to the plaintiffs, together with all
muniments of title properly endorsed and delivered,
and all the fruits and incomes received by the
defendants from the estate of Catalina, with legal
interest from the filing of this action; and where
reconveyance and delivery cannot be effected for
reasons that might have intervened and prevent the
same, defendants shall pay for the value of such
properties, fruits and incomes received by them, also
with legal interest from the filing, of this case
(5) ordering each of the defendants to pay the
plaintiffs the amount of P30,000.00 as exemplary
damages; and the further sum of P20,000.00 each
as moral damages; and
(6) ordering the defendants to pay the plaintiffs
attorney's fees and litigation expenses, in the
amount of P30,000.00 without prejudice to any
contract between plaintiffs and counsel.
Costs against the defendants. 9
The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-
11186) which rendered its now appealed judgment on March 14,
1989, affirming the trial court's decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring the private
respondents, nephews and nieces of Doña Catalina J. Vda. de
Locsin, entitled to inherit the properties which she had already
disposed of more than ten (10) years before her death. For those
properties did not form part of her hereditary estate, i.e., "the
property and transmissible rights and obligations existing at the time
of (the decedent's) death and those which have accrued thereto
since the opening of the succession." 10 The rights to a person's
succession are transmitted from the moment of his death, and do not
vest in his heirs until such time. 11  Property which Doña Catalina had
transferred or conveyed to other persons during her lifetime no
longer formed part of her estate at the time of her death to which her
heirs may lay claim.  Had she died intestate, only the property that
remained in her estate at the time of her death devolved to her legal
heirs; and even if those transfers were, one and all, treated as
donations, the right arising under certain circumstances to impugn
and compel the reduction or revocation of a decedent's gifts inter
vivos does not inure to the respondents since neither they nor the
donees are compulsory (or forced) heirs. 12
There is thus no basis for assuming an intention on the part of Doña
Catalina, in transferring the properties she had received from her late
husband to his nephews and nieces, an intent to circumvent the law
in violation of the private respondents' rights to her succession. Said
respondents are not her compulsory heirs, and it is not pretended
that she had any such, hence there were no legitimes that could
conceivably be impaired by any transfer of her property during her
lifetime. All that the respondents had was an expectancy  that in
nowise restricted her freedom to dispose of even her entire estate
subject only to the limitation set forth in Art. 750, Civil Code which,
even if it were breached, the respondents may not invoke:
Art. 750. The donation may comprehend all the
present property of the donor or part thereof,
provided he reserves, in full ownership or in usufruct,
sufficient means for the support of himself, and of all
relatives who, at the time of the acceptance of the
donation, are by law entitled to be supported by the
donor. Without such reservation, the donation shall
be reduced on petition of any person affected.
(634a)
The lower court capitalized on the fact that Doña Catalina was
already 90 years old when she died on July 6, 1977. It insinuated
that because of her advanced years she may have been imposed
upon, or unduly influenced and morally pressured by her husband's
nephews and nieces (the petitioners) to transfer to them the
properties which she had inherited from Don Mariano's estate. The
records do not support that conjecture.
For as early as 1957, or twenty-eight (28) years before her death,
Doña Catalina had already begun transferring to her Locsin nephews
and nieces the properties which she received from Don Mariano. She
sold a 962-sq.m. lot on January 26, 1957 to his nephew and
namesake Mariano Locsin II. 13 On April 7, 1966, or 19 years before
she passed away, she also sold a 43 hectare land to another Locsin
nephew, Jose R. Locsin. 14 The next year, or on March 22, 1967, she
sold a 5,000-sq.m. portion of Lot 2020 to Julian Locsin.  15
On March 27, 1967, Lot 2020 16 was partitioned by and among Doña
Catalina, Julian Locsin, Vicente Jaucian and Agapito Lorete.  17 At
least Vicente Jaucian, among the other respondents in this case, is
estopped from assailing the genuineness and due execution of the
sale of portions of Lot 2020 to himself, Julian Locsin, and Agapito
Lorete, and the partition agreement that he (Vicente) concluded with
the other co-owners of Lot 2020.
Among Doña, Catalina's last transactions before she died in 1977
were the sales of property which she made in favor of Aurea Locsin
and Mariano Locsin in 1975. 18
There is not the slightest suggestion in the record that Doña Catalina
was mentally incompetent when she made those dispositions.
Indeed, how can any such suggestion be made in light of the fact
that even as she was transferring properties to the Locsins, she was
also contemporaneously disposing of her other properties in favor of
the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16,
1964 (21 years before her death) one-half (or 5,000 sq.m.) of Lot
2020. Three years later, or on March 22, 1967, she sold another
5000 sq.m. of the same lot to Julian Locsin. 19
From 1972 to 1973 she made several other transfers of her
properties to her relatives and other persons, namely: Francisco
Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella,
Inocentes Motocinos, Casimiro Mondevil, Juan Saballa and Rogelio
Marticio. 20 None of those transactions was impugned by the private
respondents.
In 1975, or two years before her death, Doña Catalina sold some lots
not only to Don Mariano's niece, Aurea Locsin, and his nephew,
Mariano Locsin
II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was
competent to make that conveyance to Mercedes, how can there be
any doubt that she was equally competent to transfer her other
pieces of property to Aurea and Mariano II?
The trial court's belief that Don Mariano Locsin bequeathed his entire
estate to his wife, from a "consciousness of its real origin" which
carries the implication that said estate consisted of properties which
his wife had inherited from her parents, flies in the teeth of Doña
Catalina's admission in her inventory of that estate, that "items 1 to
33 are the private properties of the deceased (Don Mariano) and
forms (sic) part of his capital at the time of the marriage with the
surviving spouse, while items 34 to 42 are conjugal properties,
acquired during the marriage." She would have known better than
anyone else whether the listing included any of her paraphernal
property so it is safe to assume that none was in fact included. The
inventory was signed by her under oath, and was approved by the
probate court in Special Proceeding No. 138 of the Court of First
Instance of Albay. It was prepared with the assistance of her own
nephew and counsel, Atty. Salvador Lorayes, who surely would not
have prepared a false inventory that would have been prejudicial to
his aunt's interest and to his own, since he stood to inherit from her
eventually.
This Court finds no reason to disbelieve Attorney Lorayes' testimony
that before Don Mariano died, he and his wife (Doña Catalina), being
childless, had agreed that their respective properties should
eventually revert to their respective lineal relatives. As the trusted
legal adviser of the spouses and a full-blood nephew of Doña
Catalina, he would not have spun a tale out of thin air that would also
prejudice his own interest.
Little significance, it seems, has been attached to the fact that among
Doña Catalina's nephews and nieces, those closest to her: (a) her
lawyer-nephew Attorney Salvador Lorayes; (b) her niece and
companion Elena Jaucian: (c) her nieces Maria Olbes-Velasco and
Maria Lorayes-Cornelio and their respective husbands, Fernando
Velasco and Hostilio Cornelio, did not join the suit to annul and
undo the dispositions of property which she made in favor of the
Locsins, although it would have been to their advantage to do so.
Their desistance persuasively demonstrates that Doña Catalina
acted as a completely free agent when she made the conveyances in
favor of the petitioners. In fact, considering their closeness to Doña
Catalina it would have been well-nigh impossible for the petitioners to
employ "fraud, undue pressure, and subtle manipulations" on her to
make her sell or donate her properties to them. Doña Catalina's
niece, Elena Jaucian, daughter of her brother, Eduardo Jaucian,
lived with her in her house. Her nephew-in-law, Hostilio Cornelio,
was the custodian of the titles of her properties. The sales and
donations which she signed in favor of the petitioners were prepared
by her trusted legal adviser and nephew, Attorney Salvador Lorayes.
The (1) deed of donation dated November 19, 
1974 23 in favor of Aurea Locsin, (2) another deed of donation dated
February 4, 1975 24 in favor of Matilde Cordero, and (3) still another
deed dated September 9, 1975 25 in favor of Salvador Lorayes, were
all witnessed by Hostilio Cornelio (who is married to Doña Catalina's
niece, Maria Lorayes) and Fernando Velasco who is married to
another niece, Maria Olbes. 26The sales which she made in favor of
Aurea Locsin on July 15, 1974 27 were witnessed by Hostilio Cornelio
and Elena Jaucian. Given those circumstances, said transactions
could not have been anything but free and voluntary acts on her part.
Apart from the foregoing considerations, the trial court and the Court
of Appeals erred in not dismissing this action for annulment and
reconveyance on the ground of prescription. Commenced decades
after the transactions had been consummated, and six (6) years after
Doña Catalina's death, it prescribed four (4) years after the subject
transactions were recorded in the Registry of Property,  28 whether
considered an action based on fraud, or one to redress an injury to
the rights of the plaintiffs. The private respondents may not feign
ignorance of said transactions because the registration of the deeds
was constructive notice thereof to them and the whole world.  29
WHEREFORE, the petition for review is granted. The decision dated
March 14, 1989 of the Court of Appeals in CA-G.R. CV No. 11186 is
REVERSED and SET ASIDE. The private respondents' complaint for
annulment of contracts and reconveyance of properties in Civil Case
No. 7152 of the Regional Trial Court, Branch VIII of Legazpi City, is
DISMISSED, with costs against the private respondents, plaintiffs
therein.
SO ORDERED.
NATALIA CARPENA OPULENCIA, petitioner,  vs. COURT OF
APPEALS, ALADIN SIMUNDAC and MIGUEL
OLIVAN, respondents.
DECISION
PANGANIBAN, J.
Is a contract to sell a real property involved in testate
proceedings valid and binding without the approval of the probate
court?
Statement of the Case
This is the main question raised in this petition for review before
us, assailing the Decision[1] of the Court of Appeals[2] in CA-GR CV
No. 41994 promulgated on February 6, 1996 and its
Resolution[3] dated July 19, 1996. The challenged Decision disposed
as follows:
WHEREFORE, premises considered, the order of the lower court
dismissing the complaint is SET ASIDE and judgment is hereby
rendered declaring the CONTRACT TO SELL executedby appellee
in favor of appellants as valid and binding, subject to the result of the
administration proceedings of the testate Estate of Demetrio
Carpena.
SO ORDERED. [4]
Petitioners Motion for Reconsideration was denied in the
challenged Resolution.[5]
The Facts
The antecedent facts, as succinctly narrated by Respondent
Court of Appeals are:
In a complaint for specific performance filed with the court a quo
[herein private respondents] Aladin Simundac and Miguel Oliven
alleged that [herein petitioner] Natalia Carpena Opulencia executed
in their favor a CONTRACT TO SELL Lot 2125 of the Sta. Rosa
Estate, consisting of 23,766 square meters located in Sta. Rosa,
Laguna at P150.00 per square meter; that plaintiffs paid a
downpayment of P300,000.00 but defendant, despite demands,
failed to comply with her obligations under the contract. [Private
respondents] therefore prayed that [petitioner] be ordered to perform
her contractual obligations and to further pay damages, attorneys fee
and litigation expenses.
In her traverse, [petitioner] admitted the execution of the contract in
favor of plaintiffs and receipt of P300,000.00 as
downpayment. However, she put forward the following affirmative
defenses: that the property subject of the contract formed part of the
Estate of Demetrio Carpena (petitioners father), in respect of which a
petition for probate was filed with the Regional Trial Court, Branch
24, Bian, Laguna; that at the time the contract was executed, the
parties were aware of the pendency of the probate proceeding; that
the contract to sell was not approved by the probate court; that
realizing the nullity of the contract [petitioner] had offered to return
the downpayment received from [private respondents], but the latter
refused to accept it; that [private respondents] further failed to
provide funds for the tenant who demanded P150,00.00 in payment
of his tenancy rights on the land; that [petitioner] had chosen to
rescind the contract.
At the pre-trial conference the parties stipulated on [sic] the following
facts:
1. That on February 3, 1989, [private respondents] and [petitioner]
entered into a contract to sell involving a parcel of land situated in
Sta. Rosa, Laguna, otherwise known as Lot No. 2125 of the Sta.
Rosa Estate.
2. That the price or consideration of the said sell [sic] is P150.00 per
square meters;
3. That the amount of P300,000.00 had already been received by
[petitioner];
4. That the parties have knowledge that the property subject of the
contract to sell is subject of the probate proceedings;
5. That [as] of this time, the probate Court has not yet issued an
order either approving or denying the said sale. (p. 3, appealed
Order of September 15, 1992, pp. 109-112, record).
[Private respondents] submitted their evidence in support of the
material allegations of the complaint. In addition to testimonies of
witnesses, [private respondents] presented the following
documentary evidences: (1) Contract to Sell (Exh A); (2) machine
copy of the last will and testament of Demetrio Carpena (defendants
father) to show that the property sold by defendant was one of those
devised to her in said will (Exh B); (3) receipts signed by defendant
for the downpayment in the total amount of P300,000.00 (Exhs C, D
& E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her evidence, filed a
Demurrer to Evidence. In essence, defendant maintained that the
contract to sell was null and void for want of approval by the probate
court. She further argued that the contract was subject to a
suspensive condition, which was the probate of the will of defendants
father Demetrio Carpena. An Opposition was filed by [private
respondents]. It appears further that in an Order dated December 15,
1992 the court a quo granted the demurrer to evidence and
dismissed the complaint. It justified its action in dismissing the
complaint in the following manner:
It is noteworthy that when the contract to sell was consummated, no
petition was filed in the Court with notice to the heirs of the time and
place of hearing, to show that the sale is necessary and beneficial. A
sale of properties of an estate as beneficial to the interested parties
must comply with the requisites provided by law, (Sec. 7, Rule 89,
Rules of Court) which are mandatory, and without them, the authority
to sell, the sale itself, and the order approving it, would be null and
void ab initio. (Arcilla vs. David, 77 Phil. 718, Gabriel, et al., vs.
Encarnacion, et al., L-6736, May 4, 1954; Bonaga vs. Soler, 2 Phil.
755) Besides, it is axiomatic that where the estate of a deceased
person is already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it without
prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123
SCRA 767).
As held by the Supreme Court, a decedents representative
(administrator) is not estopped from questioning the validity of his
own void deed purporting to convey land. (Bona vs. Soler, 2 Phil,
755). In the case at bar, the [petitioner,] realizing the illegality of the
transaction[,] has interposed the nullity of the contract as her
defense, there being no approval from the probate Court, and, in
good faith offers to return the money she received from the [private
respondents]. Certainly, the administratrix is not estop[ped] from
doing so and the action to declare the inexistence of contracts do not
prescribe. This is what precipitated the filing of [petitioners] demurrer
to evidence.[6]
The trial courts order of dismissal was elevated to the Court of
Appeals by private respondents who alleged:
1. The lower court erred in concluding that the contract to sell is null
and void, there being no approval of the probate court.
2. The lower court erred in concluding that [petitioner] in good faith
offers to return the money to [private respondents].
3. The lower court erred in concluding that [petitioner] is not under
estoppel to question the validity of the contract to sell.
4. The lower court erred in not ruling on the consideration of the
contract to sell which is tantamount to plain unjust enrichment of
[petitioner] at the expense of [private respondents]. [7]
Public Respondents Ruling
Declaring the Contract to Sell valid, subject to the outcome of
the testate proceedings on Demetrio Carpenas estate, the appellate
court set aside the trial courts dismissal of the complaint and
correctly ruled as follows:
It is apparent from the appealed order that the lower court treated the
contract to sell executed by appellee as one made by the
administratrix of the Estate of Demetrio Carpena for the benefit of the
estate. Hence, its main reason for voiding the contract in question
was the absence of the probate courts approval. Presumably, what
the lower court had in mind was the sale of the estate or part thereof
made by the administrator for the benefit of the estate, as authorized
under Rule 89 of the Revised Rules of Court, which requires the
approval of the probate court upon application therefor with notice to
the heirs, devisees and legatees.
However, as adverted to by appellants in their brief, the contract to
sell in question is not covered by Rule 89 of the Revised Rules of
Court since it was made by appellee in her capacity as an heir, of a
property that was devised to her under the will sought to be
probated. Thus, while the document inadvertently stated that
appellee executed the contract in her capacity as executrix and
administratrix of the estate, a cursory reading of the entire text of the
contract would unerringly show that what she undertook to sell to
appellants was one of the other properties given to her by her late
father, and more importantly, it was not made for the benefit of the
estate but for her own needs. To illustrate this point, it is apropos to
refer to the preambular or preliminary portion of the document, which
reads:
WHEREAS, the SELLER is the lawful owner of a certain parcel of
land, which is more particularly described as follows:
x x x x x x x x x
x x x x x x x x x
x x x x x x x x x
WHEREAS, the SELLER suffers difficulties in her living and has
forced to offer the sale of the above-described property, which
property was only one among the other properties given to her by her
late father, to anyone who can wait for complete clearance of the
court on the Last Will Testament of her father.
WHEREAS, the SELLER in order to meet her need of cash, has
offered for sale the said property at ONE HUNDRED FIFTY PESOS
(150.00) Philippine Currency, per square meter unto the BUYERS,
and with this offer, the latter has accepted to buy and/or purchase
the same, less the area for the road and other easements indicated
at the back of Transfer Certificate of Title No. 2125 duly confirmed
after the survey to be conducted by the BUYERs Licensed Geodetic
Engineer, and whatever area [is] left. (Emphasis added).
To emphasize, it is evident from the foregoing clauses of the contract
that appellee sold Lot 2125 not in her capacity as executrix of the will
or administratrix of the estate of her father, but as an heir and more
importantly as owner of said lot which, along with other properties,
was devised to her under the will sought to be probated. That being
so, the requisites stipulated in Rule 89 of the Revised Rules of Court
which refer to a sale made by the administrator for the benefit of the
estate do not apply.
x x x x x x x x x
It is noteworthy that in a Manifestation filed with this court by
appellants, which is not controverted by appellee, it is mentioned that
the last will and testament of Demetrio Carpena was approved in a
final judgment rendered in Special Proceeding No. B-979 by the
Regional Trial Court, Branch 24 Binan, Laguna. But of course such
approval does not terminate the proceeding[s] since the settlement of
the estate will ensue. Such proceedings will consist, among others,
in the issuance by the court of a notice to creditors (Rule 86), hearing
of money claims and payment of taxes and estate debts (Rule
88) and distribution of the residue to the heirs or persons entitled
thereto (Rule 90). In effect, the final execution of the deed of sale
itself upon appellants payment of the balance of the purchase price
will have to wait for the settlement or termination of the
administration proceedings of the Estate of Demetrio
Carpena. Under the foregoing premises, what the trial court should
have done with the complaint was not to dismiss it but to simply put
on hold further proceedings until such time that the estate or its
residue will be distributed in accordance with the approved will.
The rule is that when a demurrer to the evidence is granted by the
trial court but reversed on appeal, defendant loses the right to
adduce his evidence. In such a case, the appellate court will decide
the controversy on the basis of plaintiffs evidence. In the case at
bench, while we find the contract to sell valid and binding between
the parties, we cannot as yet order appellee to perform her
obligations under the contract because the result of the
administration proceedings of the testate Estate of Demetrio
Carpena has to be awaited. Hence, we shall confine our adjudication
to merely declaring the validity of the questioned Contract to Sell.
Hence, this appeal.[8]
The Issue
Petitioner raises only one issue:
Whether or not the Contract to Sell dated 03 February 1989
executed by the [p]etitioner and [p]rivate [r]espondent[s] without
the requisite probate court approval is valid.
The Courts Ruling
The petition has no merit.
Contract to Sell Valid
In a nutshell, petitioner contends that where the estate of the
deceased person is already the subject of a testate or intestate
proceeding, the administrator cannot enter into any transaction
involving it without prior approval of the Probate Court. [9] She
maintains that the Contract to Sell is void because it was not
approved by the probate court, as required by Section 7, Rule 89 of
the Rules of Court:
SEC. 7. Regulations for granting authority to sell, mortgage, or
otherwise encumber estate. The court having jurisdiction of the
estate of the deceased may authorize the executor or administrator
to sell, mortgage, or otherwise encumber real estate, in cases
provided by these rules and when it appears necessary or beneficial,
under the following regulations:
xxx
Insisting that the above rule should apply to this case, petitioner
argues that the stipulations in the Contract to Sell require her to act
in her capacity as an executrix or administratrix. She avers that her
obligation to eject tenants pertains to the administratrix or executrix,
the estate being the landlord of the said tenants. [10] Likewise
demonstrating that she entered into the contract in her capacity as
executor is the stipulation that she must effect the conversion of
subject land from irrigated rice land to residential land and secure the
necessary clearances from government offices. Petitioner alleges
that these obligations can be undertaken only by an executor or
administrator of an estate, and not by an heir.[11]
The Court is not persuaded. As correctly ruled by the Court of
Appeals, Section 7 of Rule 89 of the Rules of Court is not applicable,
because petitioner entered into the Contract to Sell in her capacity as
an heiress, not as an executrix or administratrix of the estate. In the
contract, she represented herself as the lawful owner and seller of
the subject parcel of land. [12] She also explained the reason for the
sale to be difficulties in her living conditions and consequent need of
cash.[13] These representations clearly evince that she was not acting
on behalf of the estate under probate when she entered into the
Contract to Sell. Accordingly, the jurisprudence cited by petitioner
has no application to the instant case.
We emphasize that hereditary rights are vested in the heir or
heirs from the moment of the decedents death. [14] Petitioner,
therefore, became the owner of her hereditary share the moment her
father died. Thus, the lack of judicial approval does not invalidate the
Contract to Sell, because the petitioner has the substantive right to
sell the whole or a part of her share in the estate of her late father.
[15]
 Thus, in Jakosalem vs. Rafols,[16]  the Court resolved an identical
issue under the old Civil Code and held:
Article 440 of the Civil Code provides that the possession of
hereditary property is deemed to be transmitted to the heir without
interruption from the instant of the death of the decedent, in case the
inheritance be accepted. And Manresa with reason states that upon
the death of a person, each of his heirs becomes the undivided
owner of the whole estate left with respect to the part or portion
which might be adjudicated to him, a community of ownership being
thus formed among the coowners of the estate while it remains
undivided. xxx And according to article 399 of the Civil Code, every
part owner may assign or mortgage his part in the common property,
and the effect of such assignment or mortgage shall be limited to the
portion which may be allotted him in the partition upon the dissolution
of the community. Hence, where some of the heirs, without the
concurrence of the others, sold a property left by their deceased
father, this Court, speaking thru its then Chief Justice Cayetano
Arellano, said that the sale was valid, but that the effect thereof was
limited to the share which may be allotted to the vendors upon the
partition of the estate.
Administration of the Estate Not Prejudiced by the Contract to
Sell
Petitioner further contends that [t]o sanction the sale at this
stage would bring about a partial distribution of the decedents estate
pending the final termination of the testate proceedings. [17] This
becomes all the more significant in the light of the trial courts finding,
as stated in its Order dated August 20, 1997, that the legitime of one
of the heirs has been impaired.[18]
Petitioners contention is not convincing. The Contract to Sell
stipulates that petitioners offer to sell is contingent on the complete
clearance of the court on the Last Will Testament of her father.
[19]
 Consequently, although the Contract to Sell was perfected
between the petitioner and private respondents during the pendency
of the probate proceedings, the consummation of the sale or the
transfer of ownership over the parcel of land to the private
respondents is subject to the full payment of the purchase price and
to the termination and outcome of the testate
proceedings. Therefore, there is no basis for petitioners
apprehension that the Contract to Sell may result in a premature
partition and distribution of the properties of the estate. Indeed, it is
settled that the sale made by an heir of his share in an inheritance,
subject to the pending administration, in no wise stands in the way of
such administration.[20]
Estoppel
 Finally, petitioner is estopped from backing out of her
representations in her valid Contract to Sell with private respondents,
from whom she had already received P300,000 as initial payment of
the purchase price. Petitioner may not renege on her own acts and
representations, to the prejudice of the private respondents who
have relied on them.[21] Jurisprudence teaches us that neither the law
nor the courts will extricate a party from an unwise or undesirable
contract he or she entered into with all the required formalities and
with full awareness of its consequences.[22]
WHEREFORE, the petition is hereby DENIED  and the assailed
Decision of the Court of Appeals AFFIRMED. Costs against
petitioner.
SO ORDERED.
EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE
OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE
WILLIAM TABANAO, JANETTE TABANAO DEPOSOY,
VICENTA MAY TABANAO VARELA, ROSELA TABANAO
and VINCENT TABANAO, respondents.
DECISION
YNARES-SANTIAGO, J.:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto
Divinagracia were partners in a business concern known as Ma.
Nelma Fishing Industry. Sometime in January of 1986, they decided
to dissolve their partnership and executed an agreement of partition
and distribution of the partnership properties among them,
consequent to Jacinto Divinagracias withdrawal from the partnership.
[1]
 Among the assets to be distributed were five (5) fishing boats, six
(6) vehicles, two (2) parcels of land located at Sto. Nio and Talisay,
Negros Occidental, and cash deposits in the local branches of the
Bank of the Philippine Islands and Prudential Bank.
Throughout the existence of the partnership, and even after
Vicente Tabanaos untimely demise in 1994, petitioner failed to
submit to Tabanaos heirs any statement of assets and liabilities of
the partnership, and to render an accounting of the partnerships
finances. Petitioner also reneged on his promise to turn over to
Tabanaos heirs the deceaseds 1/3 share in the total assets of the
partnership, amounting to P30,000,000.00, or the sum of
P10,000,000.00, despite formal demand for payment thereof. [2]
Consequently, Tabanaos heirs, respondents herein, filed
against petitioner an action for accounting, payment of shares,
division of assets and damages. [3] In their complaint, respondents
prayed as follows:
1. Defendant be ordered to render the proper accounting of all the
assets and liabilities of the partnership at bar; and
2. After due notice and hearing defendant be ordered to
pay/remit/deliver/surrender/yield to the plaintiffs the following:
A. No less than One Third (1/3) of the assets, properties, dividends,
cash, land(s), fishing vessels, trucks, motor vehicles, and other forms
and substance of treasures which belong and/or should belong, had
accrued and/or must accrue to the partnership;
B. No less than Two Hundred Thousand Pesos (P200,000.00) as
moral damages;
C. Attorneys fees equivalent to Thirty Percent (30%) of the entire
share/amount/award which the Honorable Court may resolve the
plaintiffs as entitled to plus P1,000.00 for every appearance in court.
[4]
Petitioner filed a motion to dismiss the complaint on the grounds
of improper venue, lack of jurisdiction over the nature of the action or
suit, and lack of capacity of the estate of Tabanao to sue. [5] On
August 30, 1994, the trial court denied the motion to dismiss. It held
that venue was properly laid because, while realties were involved,
the action was directed against a particular person on the basis of his
personal liability; hence, the action is not only a personal action but
also an action in personam. As regards petitioners argument of lack
of jurisdiction over the action because the prescribed docket fee was
not paid considering the huge amount involved in the claim, the trial
court noted that a request for accounting was made in order that the
exact value of the partnership may be ascertained and, thus, the
correct docket fee may be paid. Finally, the trial court held that the
heirs of Tabanao had a right to sue in their own names, in view of the
provision of Article 777 of the Civil Code, which states that the rights
to the succession are transmitted from the moment of the death of
the decedent.[6]
The following day, respondents filed an amended complaint,
[7]
 incorporating the additional prayer that petitioner be ordered to sell
all (the partnerships) assets and thereafter
pay/remit/deliver/surrender/yield to the plaintiffs their corresponding
share in the proceeds thereof. In due time, petitioner filed a
manifestation and motion to dismiss,[8] arguing that the trial court did
not acquire jurisdiction over the case due to the plaintiffs failure to
pay the proper docket fees. Further, in a supplement to his motion to
dismiss,[9] petitioner also raised prescription as an additional ground
warranting the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order, [10] denying the
motion to dismiss inasmuch as the grounds raised therein were
basically the same as the earlier motion to dismiss which has been
denied. Anent the issue of prescription, the trial court ruled that
prescription begins to run only upon the dissolution of the partnership
when the final accounting is done.Hence, prescription has not set in
the absence of a final accounting. Moreover, an action based on a
written contract prescribes in ten years from the time the right of
action accrues.
Petitioner filed a petition for certiorari before the Court of
Appeals,[11] raising the following issues:
I. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the
required docket fee;
II. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in insisting
to try the case which involve (sic) a parcel of land
situated outside of its territorial jurisdiction;
III. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in allowing
the estate of the deceased to appear as party plaintiff,
when there is no intestate case and filed by one who
was never appointed by the court as administratrix of
the estates; and
IV. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in not
dismissing the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the assailed
decision,[12] dismissing the petition for certiorari, upon a finding that
no grave abuse of discretion amounting to lack or excess of
jurisdiction was committed by the trial court in issuing the questioned
orders denying petitioners motions to dismiss.
Not satisfied, petitioner filed the instant petition for review,
raising the same issues resolved by the Court of Appeals, namely:
I. Failure to pay the proper docket fee;
II. Parcel of land subject of the case pending before the
trial court is outside the said courts territorial jurisdiction;
III. Lack of capacity to sue on the part of plaintiff heirs of
Vicente Tabanao; and
IV. Prescription of the plaintiff heirs cause of action.
It can be readily seen that respondents primary and ultimate
objective in instituting the action below was to recover the decedents
1/3 share in the partnerships assets. While they ask for an
accounting of the partnerships assets and finances, what they are
actually asking is for the trial court to compel petitioner to pay and
turn over their share, or the equivalent value thereof, from the
proceeds of the sale of the partnership assets. They also assert that
until and unless a proper accounting is done, the exact value of the
partnerships assets, as well as their corresponding share therein,
cannot be ascertained. Consequently, they feel justified in not having
paid the commensurate docket fee as required by the Rules of Court.
We do not agree. The trial court does not have to employ
guesswork in ascertaining the estimated value of the partnerships
assets, for respondents themselves voluntarily pegged the worth
thereof at Thirty Million Pesos (P30,000,000.00). Hence, this case is
one which is really not beyond pecuniary estimation, but rather
partakes of the nature of a simple collection case where the value of
the subject assets or amount demanded is pecuniarily determinable.
[13]
 While it is true that the exact value of the partnerships total assets
cannot be shown with certainty at the time of filing, respondents can
and must ascertain, through informed and practical estimation, the
amount they expect to collect from the partnership, particularly from
petitioner, in order to determine the proper amount of docket and
other fees.[14] It is thus imperative for respondents to pay the
corresponding docket fees in order that the trial court may acquire
jurisdiction over the action.[15]
Nevertheless, unlike in the case of Manchester Development
Corp. v. Court of Appeals,[16] where there was clearly an effort to
defraud the government in avoiding to pay the correct docket fees,
we see no attempt to cheat the courts on the part of respondents. In
fact, the lower courts have noted their expressed desire to remit to
the court any payable balance or lien on whatever award which the
Honorable Court may grant them in this case should there be any
deficiency in the payment of the docket fees to be computed by the
Clerk of Court.[17] There is evident willingness to pay, and the fact
that the docket fee paid so far is inadequate is not an indication that
they are trying to avoid paying the required amount, but may simply
be due to an inability to pay at the time of filing. This consideration
may have moved the trial court and the Court of Appeals to declare
that the unpaid docket fees shall be considered a lien on the
judgment award.
Petitioner, however, argues that the trial court and the Court of
Appeals erred in condoning the non-payment of the proper legal fees
and in allowing the same to become a lien on the monetary or
property judgment that may be rendered in favor of
respondents. There is merit in petitioners assertion. The third
paragraph of Section 16, Rule 141 of the Rules of Court states that:
The legal fees shall be a lien on the monetary or property judgment
in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their favor
because it specifically applies to pauper-litigants. Nowhere in the
records does it appear that respondents are litigating as paupers,
and as such are exempted from the payment of court fees. [18]
The rule applicable to the case at bar is Section 5(a) of Rule
141 of the Rules of Court, which defines the two kinds of claims as:
(1) those which are immediately ascertainable; and (2) those which
cannot be immediately ascertained as to the exact amount. This
second class of claims, where the exact amount still has to be finally
determined by the courts based on evidence presented, falls
squarely under the third paragraph of said Section 5(a), which
provides:
In case the value of the property or estate or the sum claimed is less
or more in accordance with the appraisal of the court, the difference
of fee shall be refunded or paid as the case may be.(Underscoring
ours)
In Pilipinas Shell Petroleum Corporation v. Court of Appeals,
[19]
 this Court pronounced that the above-quoted provision clearly
contemplates an initial payment of the filing fees corresponding to
the estimated amount of the claim subject to adjustment as to what
later may be proved.[20] Moreover, we reiterated therein the principle
that the payment of filing fees cannot be made contingent or
dependent on the result of the case. Thus, an initial payment of the
docket fees based on an estimated amount must be paid
simultaneous with the filing of the complaint. Otherwise, the court
would stand to lose the filing fees should the judgment later turn out
to be adverse to any claim of the respondent heirs.
The matter of payment of docket fees is not a mere
triviality. These fees are necessary to defray court expenses in the
handling of cases. Consequently, in order to avoid tremendous
losses to the judiciary, and to the government as well, the payment of
docket fees cannot be made dependent on the outcome of the case,
except when the claimant is a pauper-litigant.
Applied to the instant case, respondents have a specific claim
1/3 of the value of all the partnership assets but they did not allege a
specific amount. They did, however, estimate the partnerships total
assets to be worth Thirty Million Pesos (P30,000,000.00), in a
letter[21] addressed to petitioner. Respondents cannot now say that
they are unable to make an estimate, for the said letter and the
admissions therein form part of the records of this case. They cannot
avoid paying the initial docket fees by conveniently omitting the said
amount in their amended complaint. This estimate can be made the
basis for the initial docket fees that respondents should pay. Even if it
were later established that the amount proved was less or more than
the amount alleged or estimated, Rule 141, Section 5(a) of the Rules
of Court specifically provides that the court may refund the excess or
exact additional fees should the initial payment be insufficient. It is
clear that it is only the difference between the amount finally awarded
and the fees paid upon filing of this complaint that is subject to
adjustment and which may be subjected to a lien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon.
Maximiano Asuncion,[22] this Court held that when the specific claim
has been left for the determination by the court, the additional filing
fee therefor shall constitute a lien on the judgment and it shall be the
responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee. Clearly,
the rules and jurisprudence contemplate the initial payment of filing
and docket fees based on the estimated claims of the plaintiff, and it
is only when there is a deficiency that a lien may be constituted on
the judgment award until such additional fee is collected.
Based on the foregoing, the trial court erred in not dismissing
the complaint outright despite their failure to pay the proper docket
fees. Nevertheless, as in other procedural rules, it may be liberally
construed in certain cases if only to secure a just and speedy
disposition of an action. While the rule is that the payment of the
docket fee in the proper amount should be adhered to, there are
certain exceptions which must be strictly construed. [23]
In recent rulings, this Court has relaxed the strict adherence to
the Manchester doctrine, allowing the plaintiff to pay the proper
docket fees within a reasonable time before the expiration of the
applicable prescriptive or reglementary period.[24]
In the recent case of National Steel Corp. v. Court of Appeals,
[25]
 this Court held that:
The court acquires jurisdiction over the action if the filing of the
initiatory pleading is accompanied by the payment of the requisite
fees, or, if the fees are not paid at the time of the filing of the
pleading, as of the time of full payment of the fees within such
reasonable time as the court may grant, unless, of course,
prescription has set in the meantime.
It does not follow, however, that the trial court should have dismissed
the complaint for failure of private respondent to pay the correct
amount of docket fees. Although the payment of the proper docket
fees is a jurisdictional requirement, the trial court may allow the
plaintiff in an action to pay the same within a reasonable time before
the expiration of the applicable prescriptive or reglementary period. If
the plaintiff fails to comply within this requirement, the defendant
should timely raise the issue of jurisdiction or else he would be
considered in estoppel. In the latter case, the balance between the
appropriate docket fees and the amount actually paid by the plaintiff
will be considered a lien or any award he may obtain in his favor.
(Underscoring ours)
Accordingly, the trial court in the case at bar should determine
the proper docket fee based on the estimated amount that
respondents seek to collect from petitioner, and direct them to pay
the same within a reasonable time, provided the applicable
prescriptive or reglementary period has not yet expired. Failure to
comply therewith, and upon motion by petitioner, the immediate
dismissal of the complaint shall issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part of
the trial court and the Court of Appeals in holding that the case below
is a personal action which, under the Rules, may be commenced and
tried where the defendant resides or may be found, or where the
plaintiffs reside, at the election of the latter. [26]
Petitioner, however, insists that venue was improperly laid since
the action is a real action involving a parcel of land that is located
outside the territorial jurisdiction of the court a quo.This contention is
not well-taken. The records indubitably show that respondents are
asking that the assets of the partnership be accounted for, sold and
distributed according to the agreement of the partners. The fact that
two of the assets of the partnership are parcels of land does not
materially change the nature of the action. It is an action in
personam because it is an action against a person, namely,
petitioner, on the basis of his personal liability. It is not an action in
rem where the action is against the thing itself instead of against the
person.[27]Furthermore, there is no showing that the parcels of land
involved in this case are being disputed. In fact, it is only incidental
that part of the assets of the partnership under liquidation happen to
be parcels of land.
The time-tested case of Claridades v. Mercader, et al.,[28] settled
this issue thus:
The fact that plaintiff prays for the sale of the assets of the
partnership, including the fishpond in question, did not change the
nature or character of the action, such sale being merely a necessary
incident of the liquidation of the partnership, which should precede
and/or is part of its process of dissolution.
The action filed by respondents not only seeks redress against
petitioner. It also seeks the enforcement of, and petitioners
compliance with, the contract that the partners executed to formalize
the partnerships dissolution, as well as to implement the liquidation
and partition of the partnerships assets. Clearly, it is a personal
action that, in effect, claims a debt from petitioner and seeks the
performance of a personal duty on his part. [29] In fine, respondents
complaint seeking the liquidation and partition of the assets of the
partnership with damages is a personal action which may be filed in
the proper court where any of the parties reside. [30] Besides, venue
has nothing to do with jurisdiction for venue touches more upon the
substance or merits of the case. [31] As it is, venue in this case was
properly laid and the trial court correctly ruled so.
On the third issue, petitioner asserts that the surviving spouse of
Vicente Tabanao has no legal capacity to sue since she was never
appointed as administratrix or executrix of his estate.Petitioners
objection in this regard is misplaced. The surviving spouse does not
need to be appointed as executrix or administratrix of the estate
before she can file the action. She and her children are complainants
in their own right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanaos death, his rights insofar as the
partnership was concerned were transmitted to his heirs, for rights to
the succession are transmitted from the moment of death of the
decedent.[32]
Whatever claims and rights Vicente Tabanao had against the
partnership and petitioner were transmitted to respondents by
operation of law, more particularly by succession, which is a mode of
acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance of a person are transmitted.
[33]
 Moreover, respondents became owners of their respective
hereditary shares from the moment Vicente Tabanao died. [34]
A prior settlement of the estate, or even the appointment of
Salvacion Tabanao as executrix or administratrix, is not necessary
for any of the heirs to acquire legal capacity to sue. As successors
who stepped into the shoes of their decedent upon his death, they
can commence any action originally pertaining to the decedent.
[35]
 From the moment of his death, his rights as a partner and to
demand fulfillment of petitioners obligations as outlined in their
dissolution agreement were transmitted to respondents. They,
therefore, had the capacity to sue and seek the courts intervention to
compel petitioner to fulfill his obligations.
Finally, petitioner contends that the trial court should have
dismissed the complaint on the ground of prescription, arguing that
respondents action prescribed four (4) years after it accrued in
1986. The trial court and the Court of Appeals gave scant
consideration to petitioners hollow arguments, and rightly so.
The three (3) final stages of a partnership are: (1) dissolution;
(2) winding-up; and (3) termination. [36] The partnership, although
dissolved, continues to exist and its legal personality is retained, at
which time it completes the winding up of its affairs, including the
partitioning and distribution of the net partnership assets to the
partners.[37] For as long as the partnership exists, any of the partners
may demand an accounting of the partnerships
business. Prescription of the said right starts to run only upon the
dissolution of the partnership when the final accounting is done. [38]
Contrary to petitioners protestations that respondents right to
inquire into the business affairs of the partnership accrued in 1986,
prescribing four (4) years thereafter, prescription had not even begun
to run in the absence of a final accounting. Article 1842 of the Civil
Code provides:
The right to an account of his interest shall accrue to any partner, or
his legal representative as against the winding up partners or the
surviving partners or the person or partnership continuing the
business, at the date of dissolution, in the absence of any agreement
to the contrary.
Applied in relation to Articles 1807 and 1809, which also deal
with the duty to account, the above-cited provision states that the
right to demand an accounting accrues at the date of dissolution in
the absence of any agreement to the contrary. When a final
accounting is made, it is only then that prescription begins to run. In
the case at bar, no final accounting has been made, and that is
precisely what respondents are seeking in their action before the trial
court, since petitioner has failed or refused to render an accounting
of the partnerships business and assets. Hence, the said action is
not barred by prescription.
In fine, the trial court neither erred nor abused its discretion
when it denied petitioners motions to dismiss. Likewise, the Court of
Appeals did not commit reversible error in upholding the trial courts
orders. Precious time has been lost just to settle this preliminary
issue, with petitioner resurrecting the very same arguments from the
trial court all the way up to the Supreme Court. The litigation of the
merits and substantial issues of this controversy is now long overdue
and must proceed without further delay.
WHEREFORE, in view of all the foregoing, the instant petition is
DENIED for lack of merit, and the case is REMANDED to the
Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to
determine the proper docket fee based on the estimated amount that
plaintiffs therein seek to collect, and direct said plaintiffs to pay the
same within a reasonable time, provided the applicable prescriptive
or reglementary period has not yet expired. Thereafter, the trial court
is ORDERED to conduct the appropriate proceedings in Civil Case
No. 416-C.
Costs against petitioner.
SO ORDERED.
JOHNNY S. RABADILLA,[1]  petitioner, vs. COURT OF
APPEALS AND MARIA MARLENA[2] COSCOLUELLA Y
BELLEZA VILLACARLOS, respondents.
DECISION
PURISIMA, J.:
This is a petition for review of the decision of the Court of
Appeals,[3] dated December 23, 1993, in CA-G.R. No. CV-
35555, which set aside the decision of Branch 52 of the
Regional Trial Court in Bacolod City, and ordered the
defendants-appellees (including herein petitioner),  as  heirs
of Dr. Jorge Rabadilla, to reconvey title over Lot No. 1392,
together with its fruits and interests, to the estate of Aleja
Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of
testatrix Aleja Belleza, Dr. Jorge Rabadilla, predecessor-in-
interest of the herein petitioner, Johnny S. Rabadilla, was
instituted as a devisee of 511, 855 square meters of that
parcel of land surveyed as Lot No. 1392 of the Bacolod
Cadastre. The said Codicil, which was duly probated and
admitted in Special Proceedings No. 4046 before the then
Court of First Instance of Negros Occidental, contained the
following provisions:
"FIRST
I give, leave and bequeath the following property
owned by me to Dr. Jorge Rabadilla resident of 141
P. Villanueva, Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered
by Transfer Certificate of Title No. RT-4002 (10942),
which is registered in my name according to the
records of the Register of Deeds of Negros
Occidental.
(b) That should Jorge Rabadilla die ahead of me, the
aforementioned property and the rights which I shall
set forth hereinbelow, shall be inherited and
acknowledged by the children and spouse of Jorge
Rabadilla.
xxx
FOURTH
(a)....It is also my command, in this my addition
(Codicil), that should I die and Jorge Rabadilla shall
have already received the ownership of the said Lot
No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10942),
and also at the time that the lease of Balbinito G.
Guanzon of the said lot shall expire, Jorge Rabadilla
shall have the obligation until he dies, every year to
give to Maria Marlina Coscolluela y Belleza, Seventy
(75) (sic) piculs of Export sugar and Twenty Five
(25) piculs of Domestic sugar, until the said Maria
Marlina Coscolluela y Belleza dies.
FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he
shall give Lot No. 1392 of the Bacolod Cadastre,
covered by Transfer Certificate of Title No. RT-4002
(10492), shall have the obligation to still give yearly,
the sugar as specified in the Fourth paragraph of his
testament, to Maria Marlina Coscolluela y Belleza on
the month of December of each year.
SIXTH
I command, in this my addition (Codicil) that the Lot
No. 1392, in the event that the one to whom I have
left and bequeathed, and his heir shall later sell,
lease, mortgage this said Lot, the buyer, lessee,
mortgagee, shall have also the obligation to respect
and deliver yearly ONE HUNDRED (100) piculs of
sugar to Maria Marlina Coscolluela y Belleza, on
each month of December, SEVENTY FIVE (75)
piculs of Export and TWENTY FIVE (25) piculs of
Domestic, until Maria Marlina shall die, lastly should
the buyer, lessee or the mortgagee of this lot, not
have respected my command in this my addition
(Codicil), Maria Marlina Coscolluela y Belleza, shall
immediately seize this Lot No. 1392 from my heir
and the latter's heirs, and shall turn it over to my
near desendants, (sic) and the latter shall then have
the obligation to give the ONE HUNDRED (100)
piculs of sugar until Maria Marlina shall die. I further
command in this my addition (Codicil) that my heir
and his heirs of this Lot No. 1392, that they will obey
and follow that should they decide to sell, lease,
mortgage, they cannot negotiate with others than my
near descendants and my sister."[4]
Pursuant to the same Codicil, Lot No. 1392 was transferred
to the deceased, Dr. Jorge Rabadilla, and Transfer
Certificate of Title No. 44498 thereto issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his
wife Rufina and children Johnny (petitioner), Aurora, Ofelia
and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza
Villacarlos brought a complaint, docketed as Civil Case No.
5588, before Branch 52 of the Regional Trial Court in
Bacolod City, against the above-mentioned heirs of Dr. Jorge
Rabadilla, to enforce the provisions of subject Codicil. The
Complaint alleged that the defendant-heirs violated the
conditions of the Codicil, in that:
1. Lot No. 1392 was mortgaged to the Philippine
National Bank and the Republic Planters Bank in
disregard of the testatrix's specific instruction to sell,
lease, or mortgage only to the near descendants and
sister of the testatrix.
2. Defendant-heirs failed to comply with their
obligation to deliver one hundred (100) piculs of
sugar (75 piculs export sugar and 25 piculs domestic
sugar) to plaintiff Maria Marlena Coscolluela y
Belleza from sugar crop years 1985 up to the filing of
the complaint as mandated by the Codicil, despite
repeated demands for compliance.
3. The banks failed to comply with the 6th paragraph
of the Codicil which provided that in case of the sale,
lease, or mortgage of the property, the buyer,
lessee, or mortgagee shall likewise have the
obligation to deliver 100 piculs of sugar per crop
year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering
defendant-heirs to reconvey/return-Lot No. 1392 to the
surviving heirs of the late Aleja Belleza, the cancellation of
TCT No. 44498 in the name of the deceased, Dr. Jorge
Rabadilla, and the issuance of a new certificate of title in the
names of the surviving heirs of the late Aleja Belleza.
On February 26, 1990, the defendant-heirs were declared in
default but on March 28, 1990 the Order of Default was
lifted, with respect to defendant Johnny S. Rabadilla, who
filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private
respondent) and a certain Alan Azurin, son-in-law of the
herein petitioner who was lessee of the property and acting
as attorney-in-fact of defendant-heirs, arrived at an amicable
settlement and entered into a Memorandum of Agreement
on the obligation to deliver one hundred piculs of sugar, to
the following effect:
"That for crop year 1988-89, the annuity mentioned
in Entry No. 49074 of TCT No. 44489 will be
delivered not later than January of 1989, more
specifically, to wit:
75 piculs of 'A' sugar, and 25 piculs
of 'B' sugar, or then existing in any
of our names, Mary Rose Rabadilla
y Azurin or Alan Azurin, during
December of each sugar crop year,
in Azucar Sugar Central; and, this is
considered compliance of the
annuity as mentioned, and in the
same manner will compliance of the
annuity be in the next succeeding
crop years.
That the annuity above stated for crop year 1985-86,
1986-87, and 1987-88, will be complied in cash
equivalent of the number of piculs as mentioned
therein and which is as herein agreed upon, taking
into consideration the composite price of sugar
during each sugar crop year, which is in the total
amount of ONE HUNDRED FIVE THOUSAND
PESOS (P105,000.00).
That the above-mentioned amount will be paid or delivered
on a staggered cash installment, payable on or before the
end of December of every sugar crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before December
of crop year 1988-89;
For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before December
of crop year 1989-90;
For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before December
of crop year 1990-91; and
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before December
of crop year 1991-92."[5]
However, there was no compliance with the aforesaid
Memorandum of Agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988
-1989.
On July 22, 1991, the Regional Trial Court came out with a
decision, dismissing the complaint and disposing as follows:
"WHEREFORE, in the light of the aforegoing
findings, the Court finds that the action is
prematurely filed as no cause of action against the
defendants has as yet arose in favor of plaintiff.
While there maybe the non-performance of the
command as mandated exaction from them simply
because they are the children of Jorge Rabadilla, the
title holder/owner of the lot in question, does not
warrant the filing of the present complaint. The
remedy at bar must fall. Incidentally, being in the
category as creditor of the left estate, it is opined
that plaintiff may initiate the intestate proceedings, if
only to establish the heirs of Jorge Rabadilla and in
order to give full meaning and semblance to her
claim under the Codicil.
In the light of the aforegoing findings, the Complaint
being prematurely filed is DISMISSED without
prejudice.
SO ORDERED."[6]
On appeal by plaintiff, the First Division of the Court of
Appeals reversed the decision of the trial court; ratiocinating
and ordering thus:
"Therefore, the evidence on record having
established plaintiff-appellant's right to receive 100
piculs of sugar annually out of the produce of Lot No.
1392; defendants-appellee's obligation under Aleja
Belleza's codicil, as heirs of the modal heir, Jorge
Rabadilla, to deliver such amount of sugar to
plaintiff-appellant; defendants-appellee's admitted
non-compliance with said obligation since 1985; and,
the punitive consequences enjoined by both the
codicil and the Civil Code, of seizure of Lot No. 1392
and its reversion to the estate of Aleja Belleza in
case of such non-compliance, this Court deems it
proper to order the reconveyance of title over Lot
No. 1392 from the estates of Jorge Rabadilla to the
estate of Aleja Belleza. However, plaintiff-appellant
must institute separate proceedings to re-open Aleja
Belleza's estate, secure the appointment of an
administrator, and distribute Lot No. 1392 to Aleja
Belleza's legal heirs in order to enforce her right,
reserved to her by the codicil, to receive her legacy
of 100 piculs of sugar per year out of the produce of
Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET
ASIDE and another one entered ordering
defendants-appellees, as heirs of Jorge Rabadilla, to
reconvey title over Lot No. 1392, together with its
fruits and interests, to the estate of Aleja Belleza.
 SO ORDERED."[7]
Dissatisfied with the aforesaid disposition by the Court of
Appeals, petitioner found his way to this Court via the
present petition, contending that the Court of Appeals erred
in ordering the reversion of Lot 1392 to the estate of the
testatrix Aleja Belleza on the basis of paragraph 6 of the
Codicil, and in ruling that the testamentary institution of Dr.
Jorge Rabadilla is a modal institution within the purview of
Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in
resolving the appeal in accordance with Article 882 of the
New Civil Code on modal institutions and in deviating from
the sole issue raised which is the absence or prematurity of
the cause of action. Petitioner maintains that Article 882
does not find application as there was no modal institution
and the testatrix intended a mere simple substitution - i.e. the
instituted heir, Dr. Jorge Rabadilla, was to be substituted by
the testatrix's "near descendants" should the obligation to
deliver the fruits to herein private respondent be not
complied with. And since the testatrix died single and without
issue, there can be no valid substitution and such
testamentary provision cannot be given any effect.
The petitioner theorizes further that there can be no valid
substitution for the reason that the substituted heirs are not
definite, as the substituted heirs are merely referred to as
"near descendants" without a definite identity or reference as
to who are the "near descendants" and therefore, under
Articles 843[8] and 845[9] of the New Civil Code, the
substitution should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his
supposition that the Court of Appeals deviated from the issue
posed before it, which was the propriety of the dismissal of
the complaint on the ground of prematurity of cause of
action, there was no such deviation. The Court of Appeals
found that the private respondent had a cause of action
against the petitioner. The disquisition made on modal
institution was, precisely, to stress that the private
respondent had a legally demandable right against the
petitioner pursuant to subject Codicil; on which issue the
Court of Appeals ruled in accordance with law.
It is a general rule under the law on succession that
successional rights are transmitted from the moment of
death of the decedent[10] and compulsory heirs are called to
succeed by operation of law. The legitimate children and
descendants, in relation to their legitimate parents, and the
widow or widower, are compulsory heirs.[11] Thus, the
petitioner, his mother and sisters, as compulsory heirs of the
instituted heir, Dr. Jorge Rabadilla, succeeded the latter by
operation of law, without need of further proceedings, and
the successional rights were transmitted to them from the
moment of death of the decedent, Dr. Jorge Rabadilla.
Under Article 776 of the New Civil Code, inheritance includes
all the property, rights and obligations of a person, not
extinguished by his death. Conformably, whatever rights Dr.
Jorge Rabadilla had by virtue of subject Codicil were
transmitted to his forced heirs, at the time of his death. And
since obligations not extinguished by death also form part of
the estate of the decedent; corollarily, the obligations
imposed by the Codicil on the deceased Dr. Jorge Rabadilla,
were likewise transmitted to his compulsory heirs upon his
death.
In the said Codicil, testatrix Aleja Belleza devised Lot No.
1392 to Dr. Jorge Rabadilla, subject to the condition that the
usufruct thereof would be delivered to the herein private
respondent every year. Upon the death of Dr. Jorge
Rabadilla, his compulsory heirs succeeded to his rights and
title over the said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved
to herein private respondent. Such obligation of the instituted
heir reciprocally corresponds to the right of private
respondent over the usufruct, the fulfillment or performance
of which is now being demanded by the latter through the
institution of the case at bar. Therefore, private respondent
has a cause of action against petitioner and the trial court
erred in dismissing the complaint below.
Petitioner also theorizes that Article 882 of the New Civil
Code on modal institutions is not applicable because what
the testatrix intended was a substitution - Dr. Jorge Rabadilla
was to be substituted by the testatrix's near descendants
should there be noncompliance with the obligation to deliver
the piculs of sugar to private respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or
persons to take the place of the heir or heirs first instituted.
Under substitutions in general, the testator may either (1)
provide for the designation of another heir to whom the
property shall pass in case the original heir should die before
him/her, renounce the inheritance or be incapacitated to
inherit, as in a simple substitution,[12] or (2) leave his/her
property to one person with the express charge that it be
transmitted subsequently to another or others, as in a
fideicommissary substitution.[13] The Codicil sued upon
contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance
in default of the first heir by reason of incapacity, predecease
or renunciation.[14] In the case under consideration, the
provisions of subject Codicil do not provide that should Dr.
Jorge Rabadilla default due to predecease, incapacity or
renunciation, the testatrix's near descendants would
substitute him. What the Codicil provides is that, should Dr.
Jorge Rabadilla or his heirs not fulfill the conditions imposed
in the Codicil, the property referred to shall be seized and
turned over to the testatrix's near descendants.
Neither is there a fideicommissary substitution here and on
this point, petitioner is correct. In a fideicommissary
substitution, the first heir is strictly mandated to preserve
the property and to transmit the same later to the second
heir.[15] In the case under consideration, the instituted heir is
in fact allowed under the Codicil to alienate the property
provided the negotiation is with the near descendants or the
sister of the testatrix. Thus, a very important element of a
fideicommissary substitution is lacking; the obligation clearly
imposing upon the first heir the preservation of the property
and its transmission to the second heir. "Without this
obligation to preserve clearly imposed by the testator in his
will, there is no fideicommissary substitution."[16] Also, the
near descendants' right to inherit from the testatrix is not
definite. The property will only pass to them should Dr. Jorge
Rabadilla or his heirs not fulfill the obligation to deliver part of
the usufruct to private respondent.
Another important element of a fideicommissary substitution
is also missing here. Under Article 863, the second heir or
the fideicommissary to whom the property is transmitted
must not be beyond one degree from the first heir or the
fiduciary. A fideicommissary substitution is therefore, void if
the first heir is not related by first degree to the second heir.
[17]
 In the case under scrutiny, the near descendants are not
at all related to the instituted heir, Dr. Jorge Rabadilla.
The Court of Appeals erred not in ruling that the institution of
Dr. Jorge Rabadilla under subject Codicil is in the nature of a
modal institution and therefore, Article 882 of the New Civil
Code is the provision of law in point. Articles 882 and 883 of
the New Civil Code provide:
Art. 882. The statement of the object of the
institution or the application of the property left by
the testator, or the charge imposed on him, shall not
be considered as a condition unless it appears that
such was his intention.
 That which has been left in this manner may be
claimed at once provided that the instituted heir or
his heirs give security for compliance with the wishes
of the testator and for the return of anything he or
they may receive, together with its fruits and
interests, if he or they should disregard this
obligation.
Art. 883. When without the fault of the heir, an
institution referred to in the preceding article cannot
take effect in the exact manner stated by the
testator, it shall be complied with in a manner most
analogous to and in conformity with his wishes.
The institution of an heir in the manner prescribed in Article
882 is what is known in the law of succession as
an institucion sub modo or a modal institution. In a modal
institution, the testator states (1) the object of the institution,
(2) the purpose or application of the property left by the
testator, or (3) the charge imposed by the testator upon the
heir.[18] A "mode" imposes an obligation upon the heir or
legatee but it does not affect the efficacy of his rights to the
succession.[19] On the other hand, in a conditional
testamentary disposition, the condition must happen or be
fulfilled in order for the heir to be entitled to succeed the
testator. The condition suspends but does not obligate; and
the mode obligates but does not suspend.[20] To some extent,
it is similar to a resolutory condition.[21]
From the provisions of the Codicil litigated upon, it can be
gleaned unerringly that the testatrix intended that subject
property be inherited by Dr. Jorge Rabadilla. It is likewise
clearly worded that the testatrix imposed an obligation on the
said instituted heir and his successors-in-interest to deliver
one hundred piculs of sugar to the herein private respondent,
Marlena Coscolluela Belleza, during the lifetime of the latter.
However, the testatrix did not make Dr. Jorge Rabadilla's
inheritance and the effectivity of his institution as a devisee,
dependent on the performance of the said obligation. It is
clear, though, that should the obligation be not complied
with, the property shall be turned over to the testatrix's near
descendants. The manner of institution of Dr. Jorge
Rabadilla under subject Codicil is evidently modal in nature
because it imposes a charge upon the instituted heir without,
however, affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts
of liberality, an obligation imposed upon the heir should not
be considered a condition unless it clearly appears from the
Will itself that such was the intention of the testator. In case
of doubt, the institution should be considered as modal and
not conditional.[22]
Neither is there tenability in the other contention of petitioner
that the private respondent has only a right of usufruct but
not the right to seize the property itself from the instituted
heir because the right to seize was expressly limited to
violations by the buyer, lessee or mortgagee.
In the interpretation of Wills, when an uncertainty arises on
the face of the Will, as to the application of any of its
provisions, the testator's intention is to be ascertained from
the words of the Will, taking into consideration the
circumstances under which it was made.[23] Such
construction as will sustain and uphold the Will in all its parts
must be adopted.[24]
Subject Codicil provides that the instituted heir is under
obligation to deliver One Hundred (100) piculs of sugar
yearly to Marlena Belleza Coscuella. Such obligation is
imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs,
and their buyer, lessee, or mortgagee should they sell, lease,
mortgage or otherwise negotiate the property involved. The
Codicil further provides that in the event that the obligation to
deliver the sugar is not respected, Marlena Belleza
Coscuella shall seize the property and turn it over to the
testatrix's near descendants. The non-performance of the
said obligation is thus with the sanction of seizure of the
property and reversion thereof to the testatrix's near
descendants. Since the said obligation is clearly imposed by
the testatrix, not only on the instituted heir but also on his
successors-in-interest, the sanction imposed by the testatrix
in case of non-fulfillment of said obligation should equally
apply to the instituted heir and his successors-in-interest.
Similarly unsustainable is petitioner's submission that by
virtue of the amicable settlement, the said obligation
imposed by the Codicil has been assumed by the lessee,
and whatever obligation petitioner had become the obligation
of the lessee; that petitioner is deemed to have made a
substantial and constructive compliance of his obligation
through the consummated settlement between the lessee
and the private respondent, and having consummated a
settlement with the petitioner, the recourse of the private
respondent is the fulfillment of the obligation under the
amicable settlement and not the seizure of subject property.
Suffice it to state that a Will is a personal, solemn, revocable
and free act by which a person disposes of his property, to
take effect after his death.[25] Since the Will expresses the
manner in which a person intends how his properties be
disposed, the wishes and desires of the testator must be
strictly followed. Thus, a Will cannot be the subject of a
compromise agreement which would thereby defeat the very
purpose of making a Will.
WHEREFORE, the petition is hereby DISMISSED and the
decision of the Court of Appeals, dated December 23, 1993,
in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement
as to costs
SO ORDERED.
BELINDA TAREDO, for herself and in representation of her
brothers and sisters, and TEOFILA CORPUZ TANEDO,
representing her minor daughter VERNA
TANEDO, petitioners, vs. THE COURT OF APPEALS,
SPOUSES RICARDO M. TAREDO AND TERESITA
BARERA TAREDO, respondents.
DECISION
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the
same real property, who has preference in ownership? What is the
probative value of the lower courts finding of good faith in registration
of such sales in the registry of property? These are the main
questions raised in this Petition for review on certiorari under Rule 45
of the Rules of Court to set aside and reverse the Decision 1 of the
Court of Appeals2 in CA-G.R. CV NO. 24987 promulgated on
September 26, 1991 affirming the decision of the Regional Trial
Court, Branch 63, Third Judicial Region, Tarlac, Tarlac in Civil Case
No. 6328, and its Resolution denying reconsideration thereof,
promulgated on May 27, 1992.
By the Courts Resolution on October 25, 1995,  this case (along
with several others) was transferred from the First to the Third
Division and after due deliberation, the Court assigned it to the
undersigned ponenle for the writing of this Decision.
The Facts
On October 20, 1962, Lazardo Taedo executed a notarized
deed of absolute sale in favor of his eldest brother, Ricardo Taedo,
and the latters wife, Teresita Barera, private respondents herein,
whereby he conveyed to the latter in consideration of P1,500.00, one
hectare of whatever share I shall have over Lot No. 191 of the
cadastral survey of Gerona, Province of Tarlac and covered by Title
T-l3829 of the Register of Deeds of Tarlac, the said property being
his future inheritance from his parents (Exh. 1). Upon the death of his
father Matias, Lazaro executed an Affidavit of Conformity
dated February 28, 1980 (Exh. 3) to re-affirm, respect. acknowledge
and validate the sale I made in 1962. On January 13, 1981, Lazaro
executed another notarized deed of sale in favor of private
respondents covering his undivided ONE TWELVE (1/12) of a parcel
of land known as Lot 191 x x (Exh. 4). He acknowledged therein his
receipt of P 10,000.00 as consideration therefor. In February 1981,
Ricardo learned that Lazaro sold the same property to his children,
petitioners herein, through a deed of sale dated December 29,
1980 (Exh. E). On June 7, 1982, private respondents recorded the
Deed of Sale (Exh. 4) in their favor in the Registry of Deeds and the
corresponding entry was made in Transfer Certificate of Title No.
166451 (Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus
damages) of the deeds of sale executed by Lazaro in favor of private
respondents covering the property inherited by Lazaro from his
father.
Petitioners claimed that their father, Lazaro, executed an
Absolute Deed of Sale dated December 29, 1980 (Exit. E),
conveying to his ten children his allotted portion under the
extrajudicial partition executed by the heirs of Matias, which deed
included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing
purportedly prepared and signed by Matias dated December 28,
1978, stating that it was his desire that whatever inheritance Lazaro
would receive from him should be given to his (Lazaros) children
(Exh. A); (2) a typewritten document dated March 10, 1979 signed by
Lazaro in the presence of two witnesses, wherein he confirmed that
he would voluntarily abide by the wishes of his father, Matias, to give
to his (Lazaros) children all the property he would inherit from the
latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his
daughter, Carmela, stating that his share in the extrajudicial
settlement of the estate of his father was intended for his children,
petitioners herein (Exh. C).
Private respondents, however presented in evidence a Deed of
Revocation of a Deed of Sale dated March 12, 1981 (Exh. 6),
wherein Lazaro revoked the sale in favor of petitioners for the reason
that it was simulated or fictitious - without any consideration
whatsoever.
Shortly after the case a quo was filed, Lazaro executed a sworn
statement (Exh. G) which virtually repudiated the contents of the
Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale
(Exh. 4) in favor of private respondents. However, Lazaro testified
that he sold the property to Ricardo, and that it was a lawyer who
induced him to execute a deed of sale in favor of his children after
giving him five pesos (P5.00) to buy a drink (TSN September 18,
1985, pp. 204-205).
The trial court decided in favor of private respondents, holding
that petitioners failed to adduce a preponderance of evidence to
support (their) claim. On appeal, the Court of Appeals affirmed the
decision of the trial court, ruling that the Deed of Sale dated January
13, 1981 (Exh. 9) was valid and that its registration in good faith
vested title in said respondents.
The Issues
Petitioners raised the following errors in the respondent Court,
which they also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale of
October 20, 1962 (Exhibit 7, Answer) is merely voidable or annulable
and not void ab initio  pursuant to paragraph 2 of Article 1347 of the
New Civil Code involving as it does a future inheritance.
II. The trial court erred in holding that defendants-appellees acted in
good faith in registering the deed of sale of January 13, 1981 (Exhibit
9) with the Register of Deeds of Tarlac and therefore ownership of
the land in question passed on to defendants-appellees.
III. The trial court erred in ignoring and failing to consider the
testimonial and documentary evidence of plaintiffs-appellants which
clearly established by preponderance of evidence that they are
indeed the legitimate and lawful owners of the property in question.
IV. The decision is contrary to law and the facts of the case and the
conclusions drawn from the established facts are illogical and off-
tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13,
1981 (and registration with the Registry of Property) of a
deed of sale covering the same property to the same
buyers valid?
3. May this Court review the findings of the respondent
Court (a) holding that the buyers acted in good faith in
registering the said subsequent deed of sale and (b) in
failing to consider petitioners evidence? Are the
conclusions of the respondent Court illogical and off-
tangent?
The Courts Ruling
At the outset, let it be clear that the errors which are reviewable
by this Court in this petition for review on certiorari are only those
allegedly committed by the respondent Court of Appeals and not
directly those of the trial court, which is not a party here. The
assignment of errors in the petition quoted above are therefore totally
misplaced, and for that reason, the petition should be dismissed. But
in order to give the parties substantial justice we have decided to
delve into the issues as above re-stated. The errors attributed by
petitioners to the latter (trial) court will be discussed only insofar as
they are relevant to the appellate courts assailed Decision and
Resolution.
The sale made in 1962 involving future inheritance is not really
at issue here. In context, the assailed Decision conceded it may be
legally correct that a contract of sale of anticipated future inheritance
is null and void.3
But to remove all doubts, we hereby categorically rule that,
pursuant to Article 1347 of the Civil Code, (n)o contract may be
entered into upon a future inheritance except in cases expressly
authorized by law.
Consequently, said contract made in 1962 is not valid and
cannot be the source of any right nor the creator of any obligation
between the parties.
Hence, the affidavit of conformity dated February 28, 1980,
insofar as it sought to validate or ratify the 1962 sale, is also useless
and, in the words of the respondent Court, suffers from the same
infirmity. Even private respondents in their memorandum 4 concede
this.
However, the documents that are critical to the resolution of this
case are: (a) the deed of sale of January 13, 1981 in favor of private
respondents covering Lazaros undivided inheritance of one-twelfth
(1/12) share in Lot No. 191, which was subsequently registered on
June 7, 1982; and (b) the deed of sale dated December 29, 1980 in
favor of petitioners covering the same property. These two
documents were executed after the death of Matias (and his spouse)
and after a deed of extrajudicial settlement of his (Matias) estate was
executed, thus vesting in Lazaro actual title over said property. In
other words, these dispositions, though conflicting, were no longer
infected with the infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13,
1981 was only one-half hectare out of Lot No. 191, citing as authority
the trial courts decision. As earlier pointed out, what is on review in
these proceedings by this Court is the Court of Appeals decision -
which correctly identified the subject matter of the January 13, 1981
sale to be the entire undivided 1/12 share of Lazaro in Lot No. 191
and which is the same property disposed of on December 29, 1980
in favor of petitioners.
Critical in determining which of these two deeds should be given
effect is the registration of the sale in favor of private respondents
with the register of deeds on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of
vendees in cases of multiple sales, as follows:
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry
of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided
there is good faith.
The property in question is land, an immovable, and following
the above-quoted law, ownership shall belong to the buyer who in
good faith registers it first in the registry of property. Thus, although
the deed of sale in favor of private respondents was later than the
one in favor of petitioners, ownership would vest in the former
because of the undisputed fact of registration. On the other hand,
petitioners have not registered the sale to them at all.
Petitioners contend that they were in possession of the property
and that private respondents never took possession thereof. As
between two purchasers, the one who registered the sale in his favor
has a preferred right over the other who has not registered his title,
even if the latter is in actual possession of the immovable property. 5
As to third issue, while petitioners conceded the fact of
registration, they nevertheless contended that it was done in bad
faith. On this issue, the respondent Court ruled:
Under the second assignment of error, plaintiffs-appellants contend
that defendants-appellees acted in bad faith when they registered the
Deed of Sale in their favor as appellee Ricardo already knew of the
execution of the deed of sale in favor of the plaintiffs; appellants cite
the testimony of plaintiff Belinda Tafledo to the effect that defendant
Ricardo Taedo called her up on January 4 or 5,  1981 to tell her that
he was already the owner of the land in question but the contract of
sale between our father and us were (sic) already consumated (pp.
9-10, tsn, January 6, 1984). This testimony is obviously self-serving,
and because it was a telephone conversation, the deed of sale
dated December 29, 1980 was not shown; Belinda merely told her
uncle that there was already a document showing that plaintiffs are
the owners (p. 80). Ricardo Taedo controverted this and testified that
he learned for the first time of the deed of sale executed by Lazaro in
favor of his children about a month or sometime in February 1981 (p.
111, tsn, Nov. 28, 1984). x x x6
The respondent Court, reviewing the trial courts findings, refused to
overturn the latters assessment of the testimonial evidence, as
follows:
We are not prepared to set aside the finding of the lower court
upholding Ricardo Tanedos testimony, as it involves a matter of
credibility of witnesses which the trial judge, who presided at the
hearing, was in a better position to resolve. (Court of Appeals
Decision, p. 6.)
In this connection, we note the tenacious allegations made by
petitioners, both in their basic petition and in their memorandum, as
follows:
1. The respondent Court allegedly ignored the claimed fact
that respondent Ricardo by fraud and deceit and with
foreknowledge that the property in question had already
been sold to petitioners, made Lazaro execute the deed
of January 13, 1981;
2. There is allegedly adequate evidence to show that only
1/2 of the purchase price of P10,000.00 was paid at the
time of the execution of the deed of sale, contrary to the
written acknowledgment, thus showing bad faith;
3. There is allegedly sufficient evidence showing that the
deed of revocation of the sale in favor of petitioners was
tainted with fraud or deceit.
4. There is allegedly enough evidence to show that private
respondents took undue advantage over the weakness
and unschooled and pitiful situation of Lazaro Tafledo . .
 . and that respondent Ricardo Taedo exercised moral made is manifestly absurd, mistaken or Impossible; when there is
ascendancy over his younger brother he being the grave abuse of discretion in the appreciation of facts; when the
eldest brother and who reached fourth year college of judgment is premised on a misapprehension of facts; when the
law and at one time a former Vice-Governor of Tarlac, findings went beyond the issues of the case and the same are
while his younger brother only attained first year high contrary to the admissions of both appellant and appellee. After a
school x x x ; careful study of the case at bench, we find none of the above
grounds present to justify the re-evaluation of the findings of fact
5. The respondent Court erred in not giving credence to made by the courts below.
petitioners evidence, especially Lazaro
Taedos Sinumpaang Salaysay  dated July 27,
1982 stating that Ricardo Taedo deceived the former in In the same vein, the ruling in the recent case of South Sea
executing the deed of sale in favor of private Surety and Insurance Company, Inc. vs. Hon. Court of Appeals,
respondents. et al.[8] is equally applicable to the present case:

To be sure, there are indeed many conflicting documents and We see no valid reason to discard the factual conclusions of the
testimonies as well as arguments over their probative value and appellate court. x x x (I)t is not the function of this Court to assess
significance. Suffice it to say, however, that all the above contentions and evaluate all over again the evidence, testimonial and
involve questions of fact, appreciation of evidence and credibility of documentary, adduced by the parties, particularly where, such as
witnesses, which are not proper in this review. It is well-settled that here, the findings of both the trial court and the appellate court on
the Supreme Court is not a trier of facts. In petitions for review under the matter coincide. (italics supplied)
Rule 45 of the Revised Rules of Court, only questions of law may be
raised and passed upon. Absent any whimsical or capricious WHEREFORE, the petition is DENIED and the assailed
exercise of judgment, and unless the lack of any basis for the Decision of the Court of Appeals is AFFIRMED. No Costs.
conclusions made by the lower courts be amply demonstrated, the
Supreme Court will not disturb their findings. At most, it appears that SO ORDERED.
petitioners have shown that their evidence was not believed by both
the trial and the appellate courts, and that the said courts tended to
give more credence to the evidence presented by private
respondents. But this in itself is not a reason for setting aside such
findings. We are far from convinced that both courts gravely abused
their respective authorities and judicial prerogatives.
G.R. No. 169129             March 28, 2007
As held in the recent case of Chua Tiong Tay vs. Court of
Appeals and Goidrock Construction and Development Corp.: 7
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS,
SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO
The Court has consistently held that the factual findings of the trial F. SANTOS, and TADEO F. SANTOS, Petitioners, 
court, as well as the Court of Appeals, are final and conclusive and vs.
may not be reviewed on appeal. Among the exceptional SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.
circumstances where a reassessment of facts found by the lower
courts is allowed are when the conclusion is a finding grounded
DECISION
entirely on speculation, surmises or conjectures; when the inference
CHICO-NAZARIO,  J.:
Before this Court is a Petition for Review on Certiorari under Rule 45
of the 1997 Revised Rules of Civil Procedure seeking to annul and
set aside the Decision1 and Resolution2 of the Court of Appeals in
CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and
Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza
Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto
F. Santos and Tadeo F. Santos, dated 8 June 2005 and 29 July
2005, respectively, which granted the appeal filed by herein
respondents Spouses Jose Lumbao and Proserfina Lumbao
(Spouses Lumbao) and ordered herein petitioners Spouses Virgilio
F. Santos and Esperanza Lati, Spouses Victorino F. Santos and
Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to
reconvey to respondents Spouses Lumbao the subject property and
to pay the latter attorney’s fees and litigation expenses, thus,
reversing the Decision3 of the Regional Trial Court (RTC) of Pasig
City, dated 17 June 1998 which dismissed the Complaint for
Reconveyance with Damages filed by respondents Spouses Lumbao
for lack of merit.
Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all
surnamed Santos, are the legitimate and surviving heirs of the late
Rita Catoc Santos (Rita), who died on 20 October 1985. The other
petitioners Esperanza Lati and Lagrimas Santos are the daughters-
in-law of Rita.
Herein respondents Spouses Jose Lumbao and Proserfina Lumbao
are the alleged owners of the 107-square meter lot (subject
property), which they purportedly bought from Rita during her
lifetime.
The facts of the present case are as follows:
On two separate occasions during her lifetime, Rita sold to
respondents Spouses Lumbao the subject property which is a part of
her share in the estate of her deceased mother, Maria Catoc (Maria),
who died intestate on 19 September 1978. On the first occasion, Rita
sold 100 square meters of her inchoate share in her mother’s estate
through a document denominated as "Bilihan ng Lupa," dated 17
August 1979.4 Respondents Spouses Lumbao claimed the execution
of the aforesaid document was witnessed by petitioners Virgilio and
Tadeo, as shown by their signatures affixed therein. On the second
occasion, an additional seven square meters was added to the land
as evidenced by a document also denominated as "Bilihan ng Lupa,"
dated 9 January 1981.5
After acquiring the subject property, respondents Spouses Lumbao
took actual possession thereof and erected thereon a house which
they have been occupying as exclusive owners up to the present. As
the exclusive owners of the subject property, respondents Spouses
Lumbao made several verbal demands upon Rita, during her lifetime,
and thereafter upon herein petitioners, for them to execute the
necessary documents to effect the issuance of a separate title in
favor of respondents Spouses Lumbao insofar as the subject
property is concerned. Respondents Spouses Lumbao alleged that
prior to her death, Rita informed respondent Proserfina Lumbao she
could not deliver the title to the subject property because the entire
property inherited by her and her co-heirs from Maria had not yet
been partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting
fraudulently and in conspiracy with one another, executed a Deed of
Extrajudicial Settlement,6 adjudicating and partitioning among
themselves and the other heirs, the estate left by Maria, which
included the subject property already sold to respondents Spouses
Lumbao and now covered by TCT No. 817297 of the Registry of
Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through counsel,
sent a formal demand letter8 to petitioners but despite receipt of such
demand letter, petitioners still failed and refused to reconvey the
subject property to the respondents Spouses Lumbao.
Consequently, the latter filed a Complaint for Reconveyance with
Damages9 before the RTC of Pasig City.
Petitioners filed their Answer denying the allegations that the subject
property had been sold to the respondents Spouses Lumbao. They
likewise denied that the Deed of Extrajudicial Settlement had been
fraudulently executed because the same was duly published as
required by law. On the contrary, they prayed for the dismissal of the
Complaint for lack of cause of action because respondents Spouses
Lumbao failed to comply with the Revised Katarungang
Pambarangay Law under Republic Act No. 7160, otherwise known
as the Local Government Code of 1991, which repealed Presidential
Decree No. 150810 requiring first resort to barangay conciliation.
Respondents Spouses Lumbao, with leave of court, amended their
Complaint because they discovered that on 16 February 1990,
without their knowledge, petitioners executed a Deed of Real Estate
Mortgage in favor of Julieta S. Esplana for the sum of P30,000.00.
The said Deed of Real Estate Mortgage was annotated at the back of
TCT No. PT-81729 on 26 April 1991. Also, in answer to the
allegation of the petitioners that they failed to comply with the
mandate of the Revised Katarungang Pambarangay Law,
respondents Spouses Lumbao said that the Complaint was filed
directly in court in order that prescription or the Statute of Limitations
may not set in.
During the trial, respondents Spouses Lumbao presented Proserfina
Lumbao and Carolina Morales as their witnesses, while the
petitioners presented only the testimony of petitioner Virgilio.
The trial court rendered a Decision on 17 June 1998, the dispositive
portion of which reads as follows:
Premises considered, the instant complaint is hereby denied for lack
of merit.
Considering that [petitioners] have incurred expenses in order to
protect their interest, [respondents spouses Lumbao] are hereby
directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as
attorney’s fees and litigation expenses, and 2) costs of the suit. 11
Aggrieved, respondents Spouses Lumbao appealed to the Court of
Appeals. On 8 June 2005, the appellate court rendered a Decision,
thus:
WHEREFORE, premises considered, the present appeal is hereby
GRANTED. The appealed Decision dated June 17, 1998 of the
Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175
is hereby REVERSED and SET ASIDE. A new judgment is hereby
entered ordering [petitioners] to reconvey 107 square meters of the
subject [property] covered by TCT No. PT-81729 of the Registry of
Deeds of Pasig City, Metro Manila, and to pay to [respondents
spouses Lumbao] the sum of P30,000.00 for attorney’s fees and
litigation expenses.
No pronouncement as to costs.12
G.R. No. 162784             June 22, 2007
NATIONAL HOUSING AUTHORITY, petitioner, 
vs.
SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN
PEDRO, LAGUNA, BR. 31, respondents.
DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 filed by the
National Housing Authority (NHA) against the Court of Appeals, the
Regional Trial Court of San Pedro Laguna, Branch 31, and private
respondent Segunda Almeida.
On June 28, 1959, the Land Tenure Administration (LTA) awarded to
Margarita Herrera several portions of land which are part of the
Tunasan Estate in San Pedro, Laguna. The award is evidenced by
an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488,
the LTA was succeeded by the Department of Agrarian Reform
(DAR). On July 31, 1975, the DAR was succeeded by the NHA by
virtue of Presidential Decree No. 757.2 NHA as the successor agency
of LTA is the petitioner in this case.
The records show that Margarita Herrera had two children: Beatriz
Herrera-Mercado (the mother of private respondent) and Francisca
Herrera. Beatriz Herrera-Mercado predeceased her mother and left
heirs.
Margarita Herrera passed away on October 27, 1971.3
On August 22, 1974, Francisca Herrera, the remaining child of the
late Margarita Herrera executed a Deed of Self-Adjudication claiming
that she is the only remaining relative, being the sole surviving
daughter of the deceased. She also claimed to be the exclusive legal
heir of the late Margarita Herrera.
The Deed of Self-Adjudication was based on a Sinumpaang
Salaysay dated October 7, 1960, allegedly executed by Margarita
Herrera. The pertinent portions of which are as follows:
SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;
Akong si MARGARITA HERRERA, Filipina, may 83 taong
gulang, balo, kasalukuyang naninirahan at tumatanggap ng
sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim
ng panunumpa ay malaya at kusang loob kong isinasaysay
at pinagtitibay itong mga sumusunod:
1. Na ako ay may tinatangkilik na isang lagay na lupang
tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San
Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T
ISANG (771) METRONG PARISUKAT ang laki, humigit
kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at
pag-aari ng Land Tenure Administration;
2. Na ang nasabing lote ay aking binibile, sa pamamagitan
ng paghuhulog sa Land Tenure Administration, at noong ika
30 ng Julio, 1959, ang Kasunduang sa Pagbibile
(AGREEMENT TO SELL No. 3787) ay ginawa at pinagtibay
sa Lungsod ng Maynila, sa harap ng Notario Publico na si G.
Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial
bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie
ng 1959;
3. Na dahilan sa ako'y matanda na at walang ano mang
hanap buhay, ako ay nakatira at pinagsisilbihan nang aking
anak na si Francisca Herrera, at ang tinitirikan o solar na
nasasabi sa unahan ay binabayaran ng kaniyang sariling
cuarta sa Land Tenure Administration;
4. Na alang-alang sa nasasaysay sa unahan nito, sakaling
ako'y bawian na ng Dios ng aking buhay, ang lupang
nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong
anak na FRANCISCA HERRERA, Filipina, nasa
katamtamang gulang, kasal kay Macario Berroya,
kasalukuyang naninirahan at tumatanggap ng sulat sa
Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang
mga tagapagmana at;
5. Na HINIHILING KO sa sino man kinauukulan, na sakaling
ako nga ay bawian na ng Dios ng aking buhay ay
KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa
pangalan ng aking anak na si Francisca Herrera ang loteng
nasasabi sa unahan.
SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki
ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng
unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng
Octubre, 1960.4
The said document was signed by two witnesses and notarized. The
witnesses signed at the left-hand side of both pages of the document
with the said document having 2 pages in total. Margarita Herrera
placed her thumbmark5above her name in the second page and at
the left-hand margin of the first page of the document.
The surviving heirs of Beatriz Herrera-Mercado filed a case for
annulment of the Deed of Self-Adjudication before the then Court of
First Instance of Laguna, Branch 1 in Binan, Laguna (now, Regional
Trial Court Branch 25). The case for annulment was docketed as
Civil Case No. B-1263.6
On December 29, 1980, a Decision in Civil Case No. B-1263
(questioning the Deed of Self-Adjudication) was rendered and the
deed was declared null and void.7
During trial on the merits of the case assailing the Deed of Self-
Adjudication, Francisca Herrera filed an application with the NHA to
purchase the same lots submitting therewith a copy of the
"Sinumpaang Salaysay" executed by her mother. Private respondent
Almeida, as heir of Beatriz Herrera-Mercado, protested the
application.
In a Resolution8 dated February 5, 1986, the NHA granted the
application made by Francisca Herrera, holding that:
From the evidence of the parties and the records of the lots
in question, we gathered the following facts: the lots in
question are portions of the lot awarded and sold to the late
Margarita Herrera on July 28, 1959 by the defunct Land
Tenure Administration; protestant is the daughter of the late
Beatriz Herrera Mercado who was the sister of the protestee;
protestee and Beatriz are children of the late Margarita
Herrera; Beatriz was the transferee from Margarita of Lot
Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots
transferred to Beatriz, e.g. Lot 47, with an area of 148 square
meters is in the name of the protestant; protestant occupied
the lots in question with the permission of the protestee;
protestee is a resident of the Tunasan Homesite since birth;
protestee was born on the lots in question; protestee left the
place only after marriage but resided in a lot situated in the
same Tunasan Homesite; her (protestee) son Roberto
Herrera has been occupying the lots in question; he has
been there even before the death of the late Margarita
Herrera; on October 7, 1960, Margarita Herrera executed
a "Sinumpaang Salaysay" whereby she waived or
transferred all her rights and interest over the lots in
question in favor of the protestee; and protestee had paid
the lots in question in full on March 8, 1966 with the defunct
Land Tenure Administration.
This Office finds that protestee has a better preferential right to
purchase the lots in question.9
Private respondent Almeida appealed to the Office of the
President.10 The NHA Resolution was affirmed by the Office of the
President in a Decision dated January 23, 1987.11
On February 1, 1987, Francisca Herrera died. Her heirs executed an
extrajudicial settlement of her estate which they submitted to the
NHA. Said transfer of rights was approved by the NHA. 12 The NHA
executed several deeds of sale in favor of the heirs of Francisca
Herrera and titles were issued in their favor.13 Thereafter, the heirs of
Francisca Herrera directed Segunda Mercado-Almeida to leave the
premises that she was occupying.
Feeling aggrieved by the decision of the Office of the President and
the resolution of the NHA, private respondent Segunda Mercado-
Almeida sought the cancellation of the titles issued in favor of the
heirs of Francisca. She filed a Complaint on February 8, 1988, for
"Nullification of Government Lot's Award," with the Regional Trial
Court of San Pedro, Laguna, Branch 31.
In her complaint, private respondent Almeida invoked her forty-year
occupation of the disputed properties, and re-raised the fact that
Francisca Herrera's declaration of self-adjudication has been
adjudged as a nullity because the other heirs were disregarded. The
defendant heirs of Francisca Herrera alleged that the complaint was
barred by laches and that the decision of the Office of the President
was already final and executory.14 They also contended that the
transfer of purchase of the subject lots is perfectly valid as the same
was supported by a consideration and that Francisca Herrera paid
for the property with the use of her own money. 15 Further, they
argued that plaintiff's occupation of the property was by mere
tolerance and that they had been paying taxes thereon. 16
The Regional Trial Court issued an Order dated June 14, 1988
dismissing the case for lack of jurisdiction.17 The Court of Appeals in
a Decision dated June 26, 1989 reversed and held that the Regional
Trial Court had jurisdiction to hear and decide the case involving "title
and possession to real property within its jurisdiction." 18 The case
was then remanded for further proceedings on the merits.
A pre-trial was set after which trial ensued.
On March 9, 1998, the Regional Trial Court rendered a Decision
setting aside the resolution of the NHA and the decision of the Office
of the President awarding the subject lots in favor of Francisca
Herrera. It declared the deeds of sale executed by NHA in favor of
Herrera's heirs null and void. The Register of Deeds of Laguna,
Calamba Branch was ordered to cancel the Transfer Certificate of
Title issued. Attorney's fees were also awarded to private
respondent.
The Regional Trial Court ruled that the "Sinumpaang Salaysay" was
not an assignment of rights but a disposition of property which shall
take effect upon death. It then held that the said document must first
be submitted to probate before it can transfer property.
Both the NHA and the heirs of Francisca Herrera filed their
respective motions for reconsideration which were both denied on
July 21, 1998 for lack of merit. They both appealed to the Court of
Appeals. The brief for the heirs of Francisca Herrera was denied
admission by the appellate court in a Resolution dated June 14, 2002
for being a "carbon copy" of the brief submitted by the NHA and for
being filed seventy-nine (79) days late.
On August 28, 2003, the Court of Appeals affirmed the decision of
the Regional Trial Court, viz:
There is no dispute that the right to repurchase the subject
lots was awarded to Margarita Herrera in 1959. There is also
no dispute that Margarita executed a "Sinumpaang
Salaysay" on October 7, 1960. Defendant NHA claims that
the "Sinumpaang Salaysay" is, in effect, a waiver or transfer
of rights and interest over the subject lots in favor of
Francisca Herrera. This Court is disposed to believe
otherwise. After a perusal of the "Sinumpaang Salaysay" of
Margarita Herrera, it can be ascertained from its wordings
taken in their ordinary and grammatical sense that the
document is a simple disposition of her estate to take effect
after her death. Clearly the Court finds that the "Sinumpaang
Salaysay" is a will of Margarita Herrera. Evidently, if the
intention of Margarita Herrera was to merely assign her right
over the lots to her daughter Francisca Herrera, she should
have given her "Sinumpaang Salaysay" to the defendant
NHA or to Francisca Herrera for submission to the defendant
NHA after the full payment of the purchase price of the lots
or even prior thereto but she did not. Hence it is apparent
that she intended the "Sinumpaang Salaysay" to be her last
will and not an assignment of rights as what the NHA in its
resolution would want to make it appear. The intention of
Margarita Herrera was shared no less by Francisca Herrera
who after the former's demise executed on August 22, 1974
a Deed of Self-Adjudication claiming that she is her sole and
legal heir. It was only when said deed was questioned in
court by the surviving heirs of Margarita Herrera's other
daughter, Beatriz Mercado, that Francisca Herrera filed an
application to purchase the subject lots and presented the
"Sinumpaang Salaysay" stating that it is a deed of
assignment of rights.19
The Court of Appeals ruled that the NHA acted arbitrarily in awarding
the lots to the heirs of Francisca Herrera. It upheld the trial court
ruling that the "Sinumpaang Salaysay" was not an assignment of
rights but one that involved disposition of property which shall take
effect upon death. The issue of whether it was a valid will must first
be determined by probate.
Petitioner NHA elevated the case to this Court.
Petitioner NHA raised the following issues:
A. WHETHER OR NOT THE RESOLUTION OF THE NHA
AND THE DECISION OF THE OFFICE OF THE
PRESIDENT HAVE ATTAINED FINALITY, AND IF SO,
WHETHER OR NOT THE PRINCIPLE OF
ADMINISTRATIVE RES JUDICATA BARS THE COURT
FROM FURTHER DETERMINING WHO BETWEEN THE
PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD
OVER THE SUBJECT LOTS;
B. WHETHER OR NOT THE COURT HAS JURISDICTION
TO MAKE THE AWARD ON THE SUBJECT LOTS; AND
C. WHETHER OR NOT THE AWARD OF THE SUBJECT
LOTS BY THE NHA IS ARBITRARY.
We rule for the respondents.
Res judicata is a concept applied in review of lower court decisions in
accordance with the hierarchy of courts. But jurisprudence has also
recognized the rule of administrative res judicata: "the rule which
forbids the reopening of a matter once judicially determined by
competent authority applies as well to the judicial and quasi-judicial
facts of public, executive or administrative officers and boards acting
within their jurisdiction as to the judgments of courts having general
judicial powers . . . It has been declared that whenever final
adjudication of persons invested with power to decide on the
property and rights of the citizen is examinable by the Supreme
Court, upon a writ of error or a certiorari, such final adjudication may
be pleaded as res judicata."20 To be sure, early jurisprudence were
already mindful that the doctrine of res judicata cannot be said to
apply exclusively to decisions rendered by what are usually
understood as courts without unreasonably circumscribing the scope
thereof and that the more equitable attitude is to allow extension of
the defense to decisions of bodies upon whom judicial powers have
been conferred.
In Ipekdjian Merchandising Co., Inc. v. Court of Tax
Appeals,21 the Court held that the rule prescribing that
"administrative orders cannot be enforced in the courts in the
absence of an express statutory provision for that purpose" was
relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will
always be subject to true judicial power—that which is held by the
courts. Quasi-judicial power is defined as that power of adjudication
of an administrative agency for the "formulation of a final
order."22 This function applies to the actions, discretion and similar
acts of public administrative officers or bodies who are required to
investigate facts, or ascertain the existence of facts, hold hearings,
and draw conclusions from them, as a basis for their official action
and to exercise discretion of a judicial nature.23 However,
administrative agencies are not considered courts, in their strict
sense. The doctrine of separation of powers reposes the three great
powers into its three (3) branches—the legislative, the executive, and
the judiciary. Each department is co-equal and coordinate, and
supreme in its own sphere. Accordingly, the executive department
may not, by its own fiat, impose the judgment of one of its agencies,
upon the judiciary. Indeed, under the expanded jurisdiction of the
Supreme Court, it is empowered to "determine whether or not there
has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government."24 Courts have an expanded role under the 1987
Constitution in the resolution of societal conflicts under the grave
abuse clause of Article VIII which includes that duty to check whether
the other branches of government committed an act that falls under
the category of grave abuse of discretion amounting to lack or
excess of jurisdiction.25
Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary
Reorganization Act of 198026 where it is therein provided that the
Intermediate Appellate Court (now, Court of Appeals) shall exercise
the "exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards, of the Regional Trial Courts
and Quasi-Judicial agencies, instrumentalities, boards or
commissions, except those falling within the jurisdiction of the
Supreme Court in accordance with the Constitution…" 27 and
contends that the Regional Trial Court has no jurisdiction to rule over
awards made by the NHA.
Well-within its jurisdiction, the Court of Appeals, in its decision of
August 28, 2003, already ruled that the issue of the trial court's
authority to hear and decide the instant case has already been
settled in the decision of the Court of Appeals dated June 26, 1989
(which has become final and executory on August 20, 1989 as per
entry of judgment dated October 10, 1989).28 We find no reason to
disturb this ruling. Courts are duty-bound to put an end to
controversies. The system of judicial review should not be misused
and abused to evade the operation of a final and executory
judgment.29 The appellate court's decision becomes the law of the
case which must be adhered to by the parties by reason of policy. 30
Next, petitioner NHA contends that its resolution was grounded on
meritorious grounds when it considered the application for the
purchase of lots. Petitioner argues that it was the daughter Francisca
Herrera who filed her application on the subject lot; that it considered
the respective application and inquired whether she had all the
qualifications and none of the disqualifications of a possible awardee.
It is the position of the petitioner that private respondent possessed
all the qualifications and none of the disqualifications for lot award
and hence the award was not done arbitrarily.
The petitioner further argues that assuming that the "Sinumpaang
Salaysay" was a will, it could not bind the NHA.31That, "insofar as
[the] NHA is concerned, it is an evidence that the subject lots were
indeed transferred by Margarita Herrera, the original awardee, to
Francisca Herrera was then applying to purchase the same before
it."32
We are not impressed. When the petitioner received the
"Sinumpaang Salaysay," it should have noted that the effectivity of
the said document commences at the time of death of the author of
the instrument; in her words "sakaling ako'y bawian na ng Dios ng
aking buhay…" Hence, in such period, all the interests of the person
should cease to be hers and shall be in the possession of her estate
until they are transferred to her heirs by virtue of Article 774 of the
Civil Code which provides that:
Art. 774. Succession is a mode of acquisition by virtue of
which the property, rights and obligations to the extent of
the value of the inheritance, of a person are transmitted
through his death to another or others either by his will
or by operation of law.33
By considering the document, petitioner NHA should have noted that
the original applicant has already passed away. Margarita Herrera
passed away on October 27, 1971.34 The NHA issued its
resolution35 on February 5, 1986. The NHA gave due course to the
application made by Francisca Herrera without considering that the
initial applicant's death would transfer all her property, rights and
obligations to the estate including whatever interest she has or may
have had over the disputed properties. To the extent of the interest
that the original owner had over the property, the same should go to
her estate. Margarita Herrera had an interest in the property and that
interest should go to her estate upon her demise so as to be able to
properly distribute them later to her heirs—in accordance with a will
or by operation of law.
The death of Margarita Herrera does not extinguish her interest over
the property. Margarita Herrera had an existing Contract to Sell 36 with
NHA as the seller. Upon Margarita Herrera's demise, this Contract to
Sell was neither nullified nor revoked. This Contract to Sell was an
obligation on both parties—Margarita Herrera and NHA. Obligations
are transmissible.37 Margarita Herrera's obligation to pay became
transmissible at the time of her death either by will or by operation of
law.
If we sustain the position of the NHA that this document is not a will,
then the interests of the decedent should transfer by virtue of an
operation of law and not by virtue of a resolution by the NHA. For as
it stands, NHA cannot make another contract to sell to other parties
of a property already initially paid for by the decedent. Such would be
an act contrary to the law on succession and the law on sales and
obligations.38
When the original buyer died, the NHA should have considered the
estate of the decedent as the next "person"39likely to stand in to fulfill
the obligation to pay the rest of the purchase price. The opposition of
other heirs to the repurchase by Francisca Herrera should have put
the NHA on guard as to the award of the lots. Further, the Decision in
the said Civil Case No. B-1263 (questioning the Deed of Self-
Adjudication) which rendered the deed therein null and void 40 should
have alerted the NHA that there are other heirs to the interests and
properties of the decedent who may claim the property after a testate
or intestate proceeding is concluded. The NHA therefore acted
arbitrarily in the award of the lots.
We need not delve into the validity of the will. The issue is for the
probate court to determine. We affirm the Court of Appeals and the
Regional Trial Court which noted that it has an element of
testamentary disposition where (1) it devolved and transferred
property; (2) the effect of which shall transpire upon the death of the
instrument maker.41
IN VIEW WHEREOF, the petition of the National Housing Authority is
DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370
dated August 28, 2003, affirming the decision of the Regional Trial
Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9,
1998, is hereby AFFIRMED.
No cost.
SO ORDERED.
G.R. No. 84450             February 4, 1991
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
GLORIA UMALI y AMADO AND SUZETH UMALI y
AMADO, defendants-appellants.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for defendants-appellants.
MEDIALDEA, J.:
In Criminal Case No. 85-473 of the Regional Trial Court, Branch 53,
Lucena City, Gloria Umali and Suzeth Umali were charged for
violation of Section 4, Article 1 of the Dangerous Drugs Act of 1972
under an information which reads:
That on or about the 22nd day of April, 1985, at Recto
Street, Poblacion, Municipality of Tiaong, Province of
Quezon, Philippines, and within the jurisdiction of this
Honorable Court, the abovenamed accused, conspiring and
confederating together and mutually helping each other, did
then and there willfully, unlawfully and feloniously sell,
deliver and give marijuana or Indian Hemp, a prohibited drug
to one Francisco Manalo y Arellano, without authority of law.
Contrary to law. (Rollo, pp. 7-8)
Upon arraignment, Gloria Umali entered a plea of "not, guilty" as
accused Suzeth Umali remained at large. After trial, the lower court
rendered a decision on September 9, 1987, the dispositive portion
thereof states:
WHEREFORE, premises considered, this Court finds
accused Gloria Umali guilty beyond reasonable doubt of
violating Sec. 4, Art. 1 (sic) of RA 6425 as amended,
otherwise known as the Dangerous Drugs Act of 1972, and
is hereby sentenced to suffer the penalty of Reclusion
Perpetua. Accused being a detention prisoner is entitled to
 enjoy the privileges of her preventive imprisonment. The
case against Suzeth Umali, her co-accused in this case is
hereby ordered ARCHIVED to be revived until the arrest of
said accused is effected. The warrant of arrest issued
against her is hereby ordered reiterated.
SO ORDERED. (Rollo, p. 30)
Hence, this appeal from the lower court's decision with the following
assignment of errors:
I
THE COURT A QUO GRAVELY ERRED IN GIVING
WEIGHT AND CREDENCE TO THE BIASED TESTIMONY
OF FRANCISCO MANALO
II
THE COURT A QUO GRAVELY ERRED IN ADMITTING
THE PROSECUTION'S EVIDENCE WHICH WERE
OBTAINED IN VIOLATION OF ACCUSED'S
CONSTITUTIONAL RIGHTS AGAINST ILLEGAL SEARCH
AND SEIZURE
III
THE COURT A QUO GRAVELY ERRED IN DECLARING
THAT ACCUSED NEVER DISPUTED THE CLAIM THAT
SHE WAS THE SOURCE OF MARIJUANA LEAVES
FOUND IN THE POSSESSION OF FRANCISCO MANALO
ON APRIL 5, 1985 AND THAT WHICH WAS USED BY
PIERRE PANGAN RESULTING TO THE LATTER'S DRUG
DEPENDENCY
IV
THE COURT A QUO GRAVELY ERRED IN FINDING
ACCUSED GLORIA 1, GUILTY OF VIOLATION OF
DANGEROUS DRUGS ACT OF 1972 ON THE BASIS OF
MERE CONJECTURES AND NOT ON FACTS AND
CIRCUMSTANCES PROVEN
V
THE COURT A QUO GRAVELY ERRED IN NOT FINDING
THAT THE GUILT OF THE ACCUSED DID NOT PASS THE
TEST OF MORAL CERTAINTY. (Rollo, p. 49)
The antecedent facts of this case as recounted by the trial court are
as follows:
On April 27, 1985 Pierre Pangan a minor was investigated by Pat.
Felino Noguerra for drug dependency and for an alleged crime of
robbery. In the course of the investigation, the policemen discovered
that Pierre Pangan was capable of committing crime against
property, only if under the influence of drug (sic). As Pierre Pangan is
a minor, the police investigators sought the presence of his parents.
Leopoldo Pangan, father of the minor was invited to the police
headquarters and was informed about the problem of his son. Mr.
Pangan asked the police investigators if something could be done to
determine the source of the marijuana which has not only socially
affected his son, but other minors in the community. Previous to the
case of Pierre Pangan was the case of Francisco Manalo, who was
likewise investigated by operatives of the Tiaong, Quezon Police
Department and for which a case for violation of the Dangerous Drug
Act was filed against him, covered by Criminal Case No. 85-516
before Branch 60 of the Regional Trial Court of Lucena City. Aside
from said case, accused Francisco Manalo was likewise facing other
charges such as concealment of deadly weapon and other crimes
against property. Pat. Felino Noguerra went to the Tiaong Municipal
Jail, and sought the help of Francisco Manalo and told him the social
and pernicious effect of prohibited drugs like marijuana being
peddled to minors of Tiaong, Quezon. Manalo although a detention
prisoner was touched by the appeal made to him by the policeman
and agreed to help in the identification of the source of the
marijuana. In return he asked the policeman to help him in some WHO: MBRS. OF TIAONG INP
cases pending against him. He did not negotiate his case for
violating the dangerous drug act, as he has entered a plea of guilty to TIME STARTED/ARRIVED AT SAID PLACE:
the charged (sic) before the sala of Judge Eriberto Rosario. 221410H Apr '85

With the consent of Francisco Manalo, Pfc. Sarmiento, Chief of the SERVED TO: MRS. GLORIA UMALI
Investigation Division gave him four (4) marked P5.00 bills to buy MR. EMILIANO UMALI
marijuana from sources known to him. The serial numbers of the
money was entered in the police blotter. The instruction was (sic) for PERSON APPREHENDED/PROPERTY
Manalo to bring back the prohibited drug purchased by him to the SEIZED/RECOVERED
police headquarters. Few minutes there after (sic), Manalo returned
with two (2) foils of dried marijuana which lie allegedly bought from
the accused Gloria Umali. Thereafter, he was asked by the police Mrs. Gloria Umali 16 Aluminum Foils of
investigators to give a statement on the manner and circumstances
of how he was able to purchase two (2) marijuana foils from accused Mr. Emiliano Umali Suspected Marijuana leaves
Gloria Umali. With the affidavit of Francisco Manalo, supported by
the two (2) foils of marijuana. the Chief of the Investigation Division TIME/DATE LEFT SAID PLACE: 221450H Apr '85
petitioned the Court for the issuance of a search warrant as a
justification for them to search the house of Gloria Umali located at WITNESSES (sic) BY:
Rector (sic) Street. Poblacion, Tiaong, Quezon. After securing the
same, the police operatives, went to the house of Gloria Umali and
1. (Sgd) Reynaldo S. Pasumbal
served the search warrant on her. Confiscated from the person of
Gloria Umali were the four P5.00 bills with serial numbers BA26943,
DT388005, CC582000 and EW69873, respectively as reflected in the 2. (Sgd) Luisabel P. Punzalan
police blotter. Likewise, present in the four (4) P5.00 bills were the
letters T which were placed by the police investigators to further 3. (Sgd) Arnulfo C. Veneracion
identify the marked four (4) P5.00 bills. The searched (sic) in the
house was made in the presence of Brgy. Capt. Punzalan. The 4. (Sgd) Isidro C. Capino
search resulted in the confiscation of a can of milo, containing
sixteen (16) foils of dried marijuana leaves which were placed in a Samples of the marijuana leaves confiscated were submitted
tupperware and kept in the kitchen where rice was being stored. The to the PC Came Laboratory for examination. Capt. Rosalinda
return of the search warrant reads as follows: Royales of the PC crime Laboratory took the witness stand,
testified and identified the marijuana submitted to her and in
DATE: 22 April 1985 a written report which was marked as Exhibit "G" she gave
the following findings:
WHAT: "RAID"
Qualitative examination conducted on the specimen
WHERE: Residence of Dr. Emiliano Umali  mentioned above gave POSITIVE result to the tests
Poblacion, Tiaong, Quezon fur marijuana.
 In Criminal Case No. 85-516, Francisco Manalo was charged
of having in his possession Indian Hemp on April 5, 1985, in
violation of Section 8, Article 11 of Republic Act 6425 as
amended, otherwise as the Dangerous Drugs Act of 1972.
The Court in rendering against him disposed the case as
follows:
In view of the foregoing, the Court hereby finds the
accused Guilty beyond reasonable doubt of the
crime of illegal possession of "Indian Hemp"
penalized under Sec. 8 of Article 6425 (sic); as
amended otherwise known as the Dangerous Drugs
Act of 1972 and the Court hereby sentences him to
suffer an imprisonment of two (2) years and four (4)
months of prision correccional to six (6) years and
one (1) day of  Prision Mayor and to pay a fine of Six
Thousand Pesos (P6,000.00). Let the period of
detention of the accused be credited to his sentence.
Accused never disputed the claim of Francisco Manalo that
the marijuana found in his possession on April 5, 1985 in the
municipality of Tiaong, Quezon was sold to him by the
accused Gloria Umali. The defense also did not dispute the
claim of the prosecution that in the investigation of Pierre
Pangan, the police investigator came to know that Gloria
Umali was the source of the marijuana leaves which he used
and smoked resulting in his present drug dependency.
(Rollo, pp. 22-27)
The appellant vehemently denied the findings of the lower court and
insisted that said court committed reversible errors in convicting her.
She alleged that witness Francisco Manalo is not reputed to be
trustworthy and reliable and that his words should not be taken on its
face value. Furthermore, he stressed that said witness has several
charges in court and because of his desire to have some of his cases
dismissed, he was likely to tell falsehood.
However, the plaintiff-appellee through the Solicitor General said that
even if Francisco Manalo was then facing several criminal charges
when he testified, such fact did not in any way disqualify him as a
witness. "His testimony is not only reasonable and probable but more
so, it was also corroborated in its material respect by the other
prosecution witnesses, especially the police officers." (Rollo, pp. 83-
84)
The appellant also claimed that the marked money as well as the
marijuana were confiscated for no other purpose than using them as
evidence against the accused in the proceeding for violation of
Dangerous Drugs Act and therefore the search warrant issued is
illegal from the very beginning. She stressed that there can be no
other plausible explanation other than that she was a victim of a
frame-up.
In relation to this contention, the Solicitor General noted that it is not
true that the evidences submitted by the prosecution were obtained
in violation of her constitutional right against illegal search and
seizure.
Furthermore, the appellant contended that the essential elements of
the crime of which she was charged were never established by clear
and convincing evidence to warrant the findings of the court a quo.
She also stressed that the court's verdict of conviction is merely
based on surmises and conjectures.
However, the Solicitor General noted that the positive and
categorical testimonies of the prosecution witnesses who had
personal knowledge of the happening together with the physical
evidence submitted clearly prove the guilt beyond reasonable doubt
of accused-appellant for violation of the Dangerous Drugs Act.
Time and again, it is stressed that this Court is enjoined from
casually modifying or rejecting the trial court's factual findings. Such
factual findings, particularly the trial judge's assessment of the
credibility of the testimony of the witnesses are accorded with great
respect on appeal for the trial judge enjoys the advantage of directly
and at first hand observing and examining the testimonial and other
proofs as they are presented at the trial and is therefore better
situated to form accurate impressions and conclusions on the basis
thereof (See People v. Bravo, G.R. No. 68422, 29 December,
1989,180 SCRA 694,699). The findings of the trial court are entitled
to great weight, and should not be disturbed on appeal unless it is
shown that the trial court had overlooked certain facts of weight and
importance, it being acknowledged that the court below, having seen
and heard the witnesses during the trial, is in a better position to
evaluate their testimonies (People v. Alverez y Soriano, G.R. No.
70831, 29 July 1988, 163 SCRA 745, 249; People v. Dorado, G.R.
No. L-23464, October 31, 1969, 30 SCRA 53; People v. Espejo, G.R.
No. L-27708, December 19, 1970, 36 SCRA 400). Hence, in the
absence of any showing that the trial court had overlooked certain
substantial facts, said factual findings are entitled to great weight,
and indeed are binding even on this Court.
Rule 130, Section 20 of the Revised Rules of Court provides that:
Except as provided in the next succeeding section, all
persons who can perceive, and perceiving can make known
their perception to others may be witnesses.
Religious or political belief, interest in the outcome of the
case, or conviction of a crime unless otherwise provided by
law, shall not be a ground for disqualification.
The phrase "conviction of a crime unless otherwise provided by law"
takes into account Article 821 of the Civil Code which states that
persons 91 convicted of falsification of a document, perjury or false
testimony" are disqualified from being witnesses to a will."
(Paras, RULES OF COURT ANNOTATED, Vol. IV First Ed., p. 44)
Since the witness Francisco Manalo is not convicted of any of the
above-mentioned crimes to disqualify him as a witness and this case
does not involve the probate of a will, We rule that the fact that said
witness is facing several criminal charges when he testified did not in
any way disqualify him as a witness.
The testimony of a witness should be given full faith and credit, in the
absence of evidence that he was actuated by improper motive
(People v. Melgar, G.R. No. 75268,29 January 1988, 157 SCRA
718). Hence, in the absence of any evidence that witness Francisco
Manalo was actuated by improper motive, his testimony must be
accorded full credence.
Appellant's contention that she was a victim of a "frame-up" is devoid
of merit.1âwphi1 "Courts must be vigilant. A handy defense in such
cases is that it is a frame-up and that the police attempted to extort
from the accused. Extreme caution must be exercised in appreciating
such defense. It is just as easy to concoct as a frame-up. At all times
the police, the prosecution and the Courts must be always on guard
against these hazards in the administration of criminal justice."
(People v. Rojo, G.R. No. 82737, 5 July 1989, 175 SCRA 119)
The appellant's allegation that the search warrant is illegal cannot
also be given any merit. "Where marked peso bills were seized by
the police as a result of the search made on the appellant, the
admissibility of these marked peso bills hinges on the legality of the
arrest and search on the person of the appellant" (People v. Paco,
G.R. No. 76893, 27 February 1989, 170 SCRA 681). Since the
search is predicated on a valid search warrant, absent any showing
that such was procured maliciously the things seized are admissible
in evidence.
Appellant argues that the lower court's verdict is based on surmises
and conjectures, hence the essential elements of the crime were
never established by clear and convincing evidence.
Conviction cannot be predicated on a presumption or speculation. A
conviction for a criminal offense must be based on clear and positive
evidence and not on mere presumptions (Gaerlan v. Court of
Appeals, G.R. No. 57876, 6 November 1989, 179 SCRA 20). The
prosecution's evidence consisted of the testimony of witness Manalo
and the law enforcers as well as the physical evidence consisting of
the seized marked peso bills, the two (2) foils of marijuana
purchased and the can containing sixteen (16) aluminum foils of
dried marijuana.
Credence is accorded to the prosecution's evidence more so as it
consisted mainly of testimonies of policemen. Law enforcers are
presumed to have regularly performed their duty in the absence of
proof to the contrary (People v. Tejada, G.R. No. 81520, 21 February
1989, 170 SCRA 497). Hence, in the absence of proof to the
contrary, full credence should be accorded to the prosecution's
evidence. The evidence on record sufficiently established that Umali
gave two (2) foils of marijuana to witness Manalo for which she was
given and received four (4) marked five peso (P5.00) bills, and fully
supports conviction for drug pushing in violation of Section 4 Article II
of the Dangerous Drugs Act.

Thus, the Court has no option but to declare that the trial court did
not err in finding, on the basis of the evidence on record, that the
accused-appellant Gloria Umali violated Section 4, Article II of the
Dangerous Drugs Act.

Pursuant to recent jurisprudence and law, the case is covered by

Section 4 of Republic Act No. 6425 as amended by Presidential
Decree No. 1675, effective February 17, 1980, which raised the
penalty for selling prohibited drugs from life imprisonment to death
and a fine ranging from twenty to thirty thousand pesos (People v.
Adriano, G.R. No. 65349, October 31, 1984, 133 SCRA 132) Thus,
the trial court correctly imposed the penalty of life imprisonment but
failed to impose a fine.

ACCORDINGLY, the appealed decision is AFFIRMED with the

modification that a fine of twenty thousand pesos (P20,000.00) be
imposed, as it is hereby imposed, on the accused-appellant.

SO ORDERED.