Succession Cases B August 5, 2020-1 PDF

EN BANC
[G.R. No. L-8437. November 28, 1956.]
ESTATE OF K. H. HEMADY , deceased, vs . LUZON SURETY CO., INC. ,

claimant-appellant.
Claro M. Recto for appellee.

Tolentino & Garcia and D. R. Cruz for appellant.
SYLLABUS
1. CONTRACTS; BINDING EFFECT OF CONTRACTS UPON HEIRS OF

DECEASED PARTY. — The binding effect of contracts upon the heirs of the deceased
party is not altered by the provision in the 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 39). The reason is that whatever payment is thus made from the
estate is ultimately a payment is thus made from the estate is ultimately a payment by
the heirs and distributes, since the amount of the paid claim in fact diminishes or
reduces the shares that the heirs would have been entitled to receive. The general rule,
therefore, is that a party's contractual rights and obligations are transmissible to the
successors.
2. ID.; SURETYHIP; NATURE OF OBLIGATION OF SURETY. — The nature of the
obligation of the surety or guarantor does not warrant the conclusion that his peculiar
individual qualities are contemplated as a principal inducement for the contract. The
creditor expects of the surety nothing but the reimbursement of the moneys that said
creditor might have to disburse on account of the obligations of the principal debtors.
This reimbursement is a payment of a sum of money, resulting from an obligation to
give; and to the creditor, it was indifferent that the reimbursement should be made by
the surety himself or by some one else in his behalf, so long as the money was paid to
it.
3. ID.; ID.; QUALIFICATION OF GUARANTOR; SUPERVENING INCAPACITY OF
GUARANTOR, EFFECT ON CONTRACT. — The quali cation of integrity in the guarantor
or surety is required to be present only at the time of the perfection of the contract of
guaranty. Once the contract of guaranty has become perfected and binding, the
supervening dishonesty of the guarantor (that is to say, the disappearance of his
integrity after he has become bound) does not terminate the contract but merely
entitles the creditor to demand a replacement of the guarantor. But the step remains
optional in the creditor; it is his right, not his duty, he may waive it if he chooses, and
hold the guarantor to his bargain.
DECISION
REYES, J. B. L. , J : p
Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance of
CD Technologies Asia, Inc. 2018 cdasiaonline.com
Rizal, presided by Judge Hermogenes Caluag, dismissing its claim against the Estate of
K. H. Hemady (Special Proceeding No. Q-293) for failure to state a cause of action.
The Luzon Surety Co. had led a claim against the Estate based on twenty
different indemnity agreements, or counter bonds, each subscribed by a distinct
principal and by the deceased K. H. Hemady, a surety solidary guarantor) in all of them,
in consideration of the Luzon Surety Co.'s of having guaranteed, the various principals in
favor of different creditors. The twenty counterbonds, or indemnity agreements, all
contained the following stipulations:
"Premiums. — As consideration for this suretyship, the undersigned jointly
and severally, agree to pay the COMPANY the sum of ________________ (P______)
pesos, Philippines Currency, in advance as premium there of for every __________
months or fractions thereof, this ________ or any renewal or substitution thereof is
in effect.
Indemnity. — The undersigned, jointly and severally, agree at all times to
indemnify the COMPANY and keep it indemni ed and hold and save it harmless
from and against any and all damages, losses, costs, stamps, taxes, penalties,
charges, and expenses of whatsoever kind and nature which the COMPANY shall
or may, at any time sustain or incur in consequence of having become surety
upon this bond or any extension, renewal, substitution or alteration thereof made
at the instance of the undersigned or any of them or any order executed on behalf
of the undersigned or any of them; and to pay, reimburse and make good to the
COMPANY, its successors and assigns, all sums and amount of money which it
or its representatives shall pay or cause to be paid, or become liable to pay, on
account of the undersigned or any of them, of whatsoever kind and nature,
including 15% of the amount involved in the litigation or other matters growing
out of or connected therewith for counsel or attorney's fees, but in no case less
than P25. It is hereby further agreed that in case of extension or renewal of this
________ we equally bind ourselves for the payment thereof under the same terms
and conditions as above mentioned without the necessity of executing another
indemnity agreement for the purpose and that we hereby equally waive our right
to be noti ed of any renewal or extension of this ________ which may be granted
under this indemnity agreement.
Interest on amount paid by the Company. — Any and all sums of money so
paid by the company shall bear interest at the rate of 12% per annum which
interest, if not paid, will be accummulated and added to the capital quarterly order
to earn the same interests as the capital and the total sum thereof, the capital and
interest, shall be paid to the COMPANY as soon as the COMPANY shall have
become liable therefore, whether it shall have paid out such sums of money or
any part thereof or not.
xxx xxx xxx
Waiver. — It is hereby agreed upon by and between the undersigned that
any question which may arise between them by reason of this document and
which has to be submitted for decision to Courts of Justice shall be brought
before the Court of competent jurisdiction in the City of Manila, waiving for this
purpose any other venue. Our right to be notified of the acceptance and approval
of this indemnity agreement is hereby likewise waived.
xxx xxx xxx
Our Liability Hereunder. — It shall not be necessary for the COMPANY to
bring suit against the principal upon his default, or to exhaust the property of the
principal, but the liability hereunder of the undersigned indemnitor shall be jointly
and severally, a primary one, the same as that of the principal, and shall be
exigible immediately upon the occurrence of such default." (Rec. App. pp. 98-
102.)
The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of
the twenty bonds it had executed in consideration of the counterbonds, and further
asked for judgment for the unpaid premiums and documentary stamps a xed to the
bonds, with 12 per cent interest thereon.
Before answer was led, and upon motion of the administratrix of Hemady's
estate, the lower court, by order of September 23, 1953, dismissed the claims of Luzon
Surety Co., on two grounds: (1) that the premiums due and cost of documentary
stamps were not contemplated under the indemnity agreements to be a part of the
undertaking of the guarantor (Hemady), since they were not liabilities incurred after the
execution of the counterbonds; and (2) that "whatever losses may occur after
Hemady's death, are not chargeable to his estate, because upon his death he ceased to
be guarantor."
Taking up the latter point rst, since it is the one more far reaching in effects, the
reasoning of the court below ran as follows:
"The administratrix further contends that upon the death of Hemady, his
liability as a guarantor terminated, and therefore, in the absence of a showing that
a loss or damage was suffered, the claim cannot be considered contingent. This
Court believes that there is merit in this contention and nds support in Article
2046 of the new Civil Code. It should be noted that a new requirement has been
added for a person to qualify as a guarantor, that is: integrity. As correctly pointed
out by the Administratrix, integrity is something purely personal and is not
transmissible. Upon the death of Hemady, his integrity was not transmitted to his
estate or successors. Whatever loss therefore, may occur after Hemady's death,
are not chargeable to his estate because upon his death he ceased to be a
guarantor.
Another clear and strong indication that the surety company has
exclusively relied on the personality, character, honesty and integrity of the now
deceased K. H. Hemady, was the fact that in the printed form of the indemnity
agreement there is a paragraph entitled 'Security by way of rst mortgage, which
was expressly waived and renounced by the security company. The security
company has not demanded from K. H. Hemady to comply with this requirement
of giving security by way of rst mortgage. In the supporting papers of the claim
presented by Luzon Surety Company, no real property was mentioned in the list of
properties mortgaged which appears at the back of the indemnity agreement."
(Rec. App., pp. 407-408).
We nd this reasoning untenable. Under the present Civil Code (Article 1311), as
well as under the Civil Code of 1889 (Article 1257), the rule is that —
"Contracts take effect only as between the parties, their assigns and heirs,
except in the case where the rights and obligations arising from the contract are
not transmissible by their nature, or by stipulation or by provision of law."
While in our successional system the responsibility of the heirs for the debts of
their decedent cannot exceed the value of the inheritance they receive from him, the
principle remains intact that these heirs succeed not only to the rights of the deceased
but also to his obligations. Articles 774 and 776 of the New Civil Code (and Articles
659 and 661 of the preceding one) expressly so provide, thereby con rming Article
1311 already quoted.
"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."
In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:
"Under the Civil Code the heirs, by virtue of the rights of succession are
subrogated to all the rights and obligations of the deceased (Article 661) and can
not be regarded as third parties with respect to a contract to which the deceased
was a party, touching the estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).
xxx xxx xxx
"The principle on which these decisions rest is not affected by the
provisions of the new Code of Civil Procedure, and, in accordance with that
principle, the heirs of a deceased person cannot be held to be "third persons" in
relation to any contracts touching the real estate of their decedent which comes in
to their hands by right of inheritance; they take such property subject to all the
obligations resting thereon in the hands of him from whom they derive their
rights."
(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs.
Salak, 91 Phil., 265).
The binding effect of contracts upon the heirs of the deceased party is not
altered by the provision in 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 estate is
ultimately a payment by the heirs and 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 speci c person
and by no other. The transition is marked by the disappearance of the imprisonment for
debt.
Of the three exceptions xed by Article 1311, the nature of the obligation of the
surety or guarantor does not warrant the conclusion that his peculiar individual qualities
are contemplated as a principal inducement for the contract. What did the creditor
Luzon Surety Co. expect of K. H. Hemady when it accepted the latter as surety in the
counterbonds? Nothing but the reimbursement of the moneys that the Luzon Surety Co.
might have to disburse on account of the obligations of the principal debtors. This
reimbursement is a payment of a sum of money, resulting from an obligation to give;
and to the Luzon Surety Co., it was indifferent that the reimbursement should be made
by Hemady himself or by some one else in his behalf, so long as the money was paid to
it.
The second exception of Article 1311, p. 1, is intransmissibility by stipulation of
the parties. Being exceptional and contrary to the general rule, this intransmissibility
should not be easily implied, but must be expressly established, or at the very least,
clearly inferable from the provisions of the contract itself, and the text of the
agreements sued upon nowhere indicate that they are non-transferable.
"(b) Intransmisibilidad por pacto. — Lo general es la transmisibilidad
de darechos y obligaciones; le excepcion, la intransmisibilidad. Mientras nada se
diga en contrario impera el principio de la transmision, como elemento natural a
toda relacion juridica, salvo las personalisimas. Asi, para la no transmision, es
menester el pacto expreso, porque si no, lo convenido entre partes trasciende a
sus herederos.
Siendo estos los continuadores de la personalidad del causante, sobre
ellos recaen los efectos de los vinculos juridicos creados por sus antecesores, y
para evitarlo, si asi se quiere, es indispensable convension terminante en tal
sentido.
Por su esencia, el derecho y la obligacion tienden a ir más allá de las
personas que les dieron vida, y a ejercer presion sobre los sucesores de esa
persona; cuando no se quiera esto, se impone una estipulacion limitativa
expresamente de la transmisibilidad o de cuyos tirminos claramente se deduzca
la concresion del concreto a las mismas personas que lo otorgon." (Scaevola,
Codigo Civil, Tomo XX, p. 541-542) (Emphasis supplied.)
Because under the law (Article 1311), a person who enters into a contract is
deemed to have contracted for himself and his heirs and assigns, it is unnecessary for
him to expressly stipulate to that effect; hence, his failure to do so is no sign that he
intended his bargain to terminate upon his death. Similarly, that the Luzon Surety Co.,
did not require bondsman Hemady to execute a mortgage indicates nothing more than
the company's faith and con dence in the nancial stability of the surety, but not that
his obligation was strictly personal.
The third exception to the transmissibility of obligations under Article 1311
exists when they are "not transmissible by operation of law". The provision makes
reference to those cases where the law expresses that the rights or obligations are
extinguished by death, as is the case in legal support (Article 300), parental authority
(Article 327), usufruct (Article 603), contracts for a piece of work (Article 1726),
partnership (Article 1830 and agency (Article 1919). By contract, the articles of the Civil
Code that regulate guaranty or suretyship (Articles 2047 to 2084) contain no provision
that the guaranty is extinguished upon the death of the guarantor or the surety.
The lower court sought to infer such a limitation from Art. 2056, to the effect that
"one who is obliged to furnish a guarantor must present a person who possesses
integrity, capacity to bind himself, and su cient property to answer for the obligation
which he guarantees". It will be noted, however, that the law requires these qualities to
be present only at the time of the perfection of the contract of guaranty. It is self-
evident that once the contract has become perfected and binding, the supervening
incapacity of the guarantor would not operate to exonerate him of the eventual liability
he has contracted; and if that be true of his capacity to bind himself, it should also be
true of his integrity, which is a quality mentioned in the article alongside the capacity.
The foregoing concept is con rmed by the next Article 2057, that runs as
follows:
"ART. 2057. — If the guarantor should be convicted in rst instance of a
crime involving dishonesty or should become insolvent, the creditor may demand
another who has all the quali cations required in the preceding article. The case
is excepted where the creditor has required and stipulated that a speci ed person
should be guarantor."
From this article it should be immediately apparent that the supervening
dishonesty of the guarantor (that is to say, the disappearance of his integrity after he
has become bound) does not terminate the contract but merely entitles the creditor to
demand a replacement of the guarantor. But the step remains optional in the creditor: it
is his right, not his duty; he may waive it if he chooses, and hold the guarantor to his
bargain. Hence Article 2057 of the present Civil Code is incompatible with the trial
court's stand that the requirement of integrity in the guarantor or surety makes the
latter's undertaking strictly personal, so linked to his individuality that the guaranty
automatically terminates upon his death.
The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety
Co. not being rendered intransmissible due to the nature of the undertaking, nor by the
stipulations of the contracts themselves, nor by provision of law, his eventual liability
thereunder necessarily passed upon his death to his heirs. The contracts, therefore,
give rise to contingent claims provable against his estate under section 5, Rule 87 (2
Moran, 1952 ed., p. 437; Gaskell & Co. vs. Tan Sit, 43 Phil. 810, 814).
"The most common example of the contigent claim is that which arises
when a person is bound as surety or guarantor for a principal who is insolvent or
dead. Under the ordinary contract of suretyship the surety has no claim whatever
against his principal until he himself pays something by way of satisfaction upon
the obligation which is secured. When he does this, there instantly arises in favor
of the surety the right to compel the principal to exonerate the surety. But until the
surety has contributed something to the payment of the debt, or has performed
the secured obligation in whole or in part, he has no right of action against
anybody — no claim that could be reduced to judgment. (May vs. Vann, 15 Pla.,
553; Gibson vs. Mithell, 16 Pla., 519; Maxey vs. Carter, 10 Yarg. [Tenn.], 521
Reeves vs. Pulliam, 7 Baxt. [Tenn.], 119; Ernst vs. Nou, 63 Wis., 134.)"
For defendant administratrix it is averred that the above doctrine refers to a case
where the surety les claims against the estate of the principal debtor; and it is urged
that the rule does not apply to the case before us, where the late Hemady was a surety,
not a principal debtor. The argument evinces a super cial view of the relations between
parties. If under the Gaskell ruling, the Luzon Surety Co., as guarantor, could le a
contingent claim against the estate of the principal debtors if the latter should die,
there is absolutely no reason why it could not le such a claim against the estate of
Hemady, since Hemady is a solidary co-debtor of his principals. What the Luzon Surety
Co. may claim from the estate of a principal debtor it may equally claim from the estate
of Hemady, since, in view of the existing solidarity, the latter does not even enjoy the
benefit of exhaustion of the assets of the principal debtor.
The foregoing ruling is of course without prejudice to the remedies of the
administratrix against the principal debtors under Articles 2071 and 2067 of the New
Civil Code.
Our conclusion is that the solidary guarantor's liability is not extinguished by his
death, and that in such event, the Luzon Surety Co., had the right to le against the
estate a contingent claim for reimbursement. It becomes unnecessary now to discuss
the estate's liability for premiums and stamp taxes, because irrespective of the solution
to this question, the Luzon Surety's claim did state a cause of action, and its dismissal
was erroneous.
Wherefore, the order appealed from is reversed, and the records are ordered
remanded to the court of origin, with instructions to proceed in accordance with law.
Costs against the Administratrix- Appellee. So ordered.
Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador,
Concepcion, Endencia and Felix, JJ., concur.

FIRST DIVISION
[G.R. No. L-41715. June 18, 1976.]
ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and

PONCIANO BONILLA (their father) who represents the minors ,
petitioners, vs. LEON BARCENA, MAXIMA ARIAS BALLENA,
ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow
of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court
First Instance of Abra , respondents.
Federico Paredes for petitioners.

Demetrio V. Pre for private respondents.
SYNOPSIS
On March 31, 1975, Fortunata Barcena instituted a civil action to quiet title over
certain parcels of land. About three months later, Fortunata Barcena died and
defendants moved to dismiss the complaint. Counsels for plaintiff asked for
substitution by her minor children and her husband, but the court dismissed the case
and refused to reconsider. Hence this petition for review.
The Supreme Court reversed the respondent court, set aside the order of
dismissal and the orders denying the motion for reconsideration, and directed the
respondent court to allow the substitution of the minor children and to appoint a
qualified person as guardian ad litem for them.
SYLLABUS
1. CIVIL PROCEDURES; DEATH OF A PARTY; SUBSTITUTION OF PARTIES. —

While it is true that a a person who is dead cannot sue in court, yet he can be
substituted by his heirs in pursuing the case up to its completion. Where plaintiff was
still alive when the complaint was led, the Court acquires jurisdiction over the person.
If thereafter she dies, Section 16, Rule 3 of the Rules of Court, prescribes the
procedures whereby a party who dies during the pendency of the proceedings can be
substituted; and where proper substitution of parties had been asked for, it is grave
error for the court to dismiss the complaint on the ground that a dead person has no
legal personality to sue.
2. CIVIL LAW; SUCCESSION; RIGHTS TO SUCCESSION TRANSMITTED FROM
THE MOMENT OF DEATH OF DECEDENT. — From the moment of the death of the
decedent, the heirs become the absolute owners of his property, subject to the rights
and obligations of the decedent, and they cannot be deprived of right thereto except by
the methods provided for by law. The moment of death is the determining factor where
the heirs acquire a de nite right to the inheritance whether such right to be pure or
contingent. The right of the heirs to the property of the deceased vests in them even
before judicial declaration of their being heirs in the testate or intestate proceedings.
3. ID.; ID.; ID.; HEIRS BECOME PARTIES IN INTEREST. — The death of the
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
plaintiff during the pendency of an action to quiet title of a parcel of land did not
extinguish her claim or right to the parcels of land in litigation but was transmitted to
her heirs upon her death. Her heirs have thus acquired interest in the properties in
litigation and became parties in interest in the case. There is therefore, no reason for
the Court not to follow their substitution as parties in interest for the deceased plaintiff.
4. CIVIL PROCEDURE; ACTIONS; SURVIVAL OF ACTIONS. — The question as
to whether an action survives or not defends on the nature of the action and the
damaged sued for. In causes of action which survive the wrong complained, of affects
primarily and principally property and property rights, the injuries to the person being
merely incidental, while in the causes of action which do not survive the injury
complained of is to the person, the property and rights of property affected being
incidental.
5. ID.; ID.; ID.; ACTION TO QUIET TITLE. — An action to quiet title over a parcel
of land affects primarily and principally property and property rights and therefore, is
one that survives even after plaintiff's death. It is therefore, the duty of the trial. Court to
order the legal representative of the deceased plaintiff to appear and to be substituted
for said deceased, pursuant to Section 17, Rule 3 of the Rules of Court.
6. ID.; ID.; ID.; REFUSAL OF COURT TO ALLOW SUBSTITUTION ON THE
GROUND THAT THE HEIRS WERE STILL MINORS IS A GRAVE ERROR. — Where, upon the
death of the plaintiff in an action to quiet title, counsel has not only asked that the minor
children be substituted for her but also suggested that the uncle be appointed as
guardian ad litem for them because their father is busy earning a living for the family; it
is grave error for the respondent court to refuse the request for substitution on the
ground that the children were still minors and cannot sue, because it ought to know that
Section 17, Rule 3 of the Rules of Court, directs the Court to appoint a guardian ad litem
for the minor.
DECISION
MARTIN , J : p
This is a petition for review 1 of the Order of the Court of First Instance of Abra in
Civil Case No. 856, entitled Fortunata Barcena vs. Leon Barcena, et al., denying the
motions for reconsideration of its order dismissing the complaint in the
aforementioned case. cdll
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and
Salvacion Bonilla and wife of Ponciano Bonilla, instituted a civil action in the Court of
First Instance of Abra, to quiet title over certain parcels of land located in Abra.
On May 9, 1975, defendants led a written motion to dismiss the complaint, but
before the hearing of the motion to dismiss, the counsel for the plaintiff moved to
amend the complaint in order to include certain allegations therein. The motion to
amend the complaint was granted and on July 17, 1975, plaintiffs led their amended
complaint.
On August 4, 1975, the defendants led another motion to dismiss the complaint
on the ground that Fortunata Barcena is dead and, therefore, has no legal capacity to
sue. Said motion to dismiss was heard on August 14, 1975. In said hearing, counsel for
the plaintiff con rmed the death of Fortunata Barcena and asked for substitution by her
minor children and her husband, the petitioners herein; but the court after the hearing
immediately dismissed the case on the ground that a dead person cannot be a real
party in interest and has no legal personality to sue. LLjur
On August 19, 1975, counsel for the plaintiff received a copy of the order
dismissing the complaint and on August 23, 1975, he moved to set aside the order of
the dismissal pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court. 2
On August 28, 1975, the court denied the motion for reconsideration led by
counsel for the plaintiff for lack of merit. On September 1, 1975, counsel for deceased
plaintiff led a written manifestation praying that the minors Rosalio Bonilla and
Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied
the counsel's prayer for lack of merit. From the order, counsel for the deceased plaintiff
led a second motion for reconsideration of the order dismissing the complaint
claiming that the same is in violation of Sections 16 and 17 of Rule 3 of the Rules of
Court but the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order dismissing the
complaint in Civil Case No. 856 and its orders denying the motion for reconsideration
of said order of dismissal. While it is true that a person who is dead cannot sue in court,
yet he can be substituted by his heirs in pursuing the case up to its completion. The
records of this case show that the death of Fortunata Barcena took place on July 9,
1975 while the complaint was led on March 31, 1975. This means that when the
complaint was led on March 31, 1975, Fortunata Barcena was still alive, and therefore,
the court had acquired jurisdiction over her person. If thereafter she died, the Rules of
Court prescribes the procedure whereby a party who died during the pendency of the
proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court
"whenever a party to a pending case dies . . . it shall be the duty of his attorney to inform
the court promptly of such death . . . and to give the name and residence of his
executor, administrator, guardian or other legal representatives." This duty was
complied with by the counsel for the deceased plaintiff when he manifested before the
respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the proper
substitution of parties in the case. The respondent Court, however, instead of allowing
the substitution, dismissed the complaint on the ground that a dead person has no
legal personality to sue. This is a grave error. Article 777 of the Civil Code provides "that
the rights to the succession are transmitted from the moment of the death of the
decedent." From the moment of the death of the decedent, the heirs become the
absolute owners of his property, subject to the rights and obligations of the decedent,
and they cannot be deprived of their rights thereto except by the methods provided for
by law. 3 The moment of death is the determining factor when the heirs acquire a
de nite right to the inheritance whether such right be pure or contingent. 4 The right of
the heirs to the property of the deceased vests in them even before judicial declaration
of their being heirs in the testate or intestate proceedings. 5 When Fortunata Barcena,
therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856,
was not extinguished by her death but was transmitted to her heirs upon her death. Her
heirs have thus acquired interest in the properties in litigation and became parties in
interest in the case. There is, therefore, no reason for the respondent Court to allow
their substitution as parties in interest for the deceased plaintiff.
Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is
not thereby extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and be substituted for the deceased, within
such time as may be granted . . ." The question as to whether an action survives or not
depends on the nature of the action and the damage sued for. 6 In the causes of action
which survive the wrong complained affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in the causes of
action which do not survive the injury complained of is to the person, the property and
rights of property affected being incidental. 7 Following the foregoing criterion the
claim of the deceased plaintiff which is an action to quiet title over the parcels of land in
litigation affects primarily and principally property and property rights and therefore is
one that survives even after her death. It is, therefore, the duty of the respondent Court
to order the legal representative of the deceased plaintiff to appear and to be
substituted for her. But what the respondent Court did, upon being informed by the
counsel for the deceased plaintiff that the latter was dead, was to dismiss the
complaint. This should not have been done for under the same Section 17, Rule 3 of the
Rules of Court, it is even the duty of the court, if the legal representative fails to appear,
to order the opposing party to procure the appointment of a legal representative of the
deceased. In the instant case the respondent Court did not have to bother ordering the
opposing party to procure the appointment of a legal representative of the deceased
because her counsel has not only asked that the minor children be substituted for her
but also suggested that their uncle be appointed as guardian ad litem for them because
their father is busy in Manila earning a living for the family. But the respondent Court
refused the request for substitution on the ground that the children were still minors
and cannot sue in court. This is another grave error because the respondent Court
ought to have known that under the same Section 17, Rule 3 of the Rules of Court, the
court is directed to appoint a guardian ad litem for the minor heirs. Precisely in the
instant case, the counsel for the deceased plaintiff has suggested to the respondent
Court that the uncle of the minors be appointed to act as guardian ad litem for them.
Unquestionably, the respondent Court has gravely abused its discretion in not
complying with the clear provision of the Rules of Court dismissing the complaint of the
plaintiff in Civil Case No. 856 and refusing the substitution of parties in the case. prLL
IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the
complaint in Civil Case No. 856 of the Court of First Instance of Abra and the motions
for reconsideration of the order of dismissal of said complaint are set aside and the
respondent Court is hereby directed to allow the substitution of the minor children, who
are the petitioners therein for the deceased plaintiff and to appoint a quali ed person
as guardian ad litem for them. Without pronouncement as to costs.
SO ORDERED."
Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma, JJ., concur.
Footnotes
1. Which this Court treats as special civil action as per its Resolution dated February 11,
1976.
2. Section 16. Duty of Attorney upon death, incapacity, or incompetency of party . —
Whenever a party to a pending case; becomes incapacitated or incompetent, it shall be
the duty of his attorney to inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of his executor, administrator,
guardian or other legal representative.
Section 17. Death of party. — After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal representative of the
deceased to appear and to be substituted for deceased, within a period of thirty (30)
days, or within such time as may be granted. If the legal representative fails to appear
within said time, the court may order the opposing party to procure the appointment of a
legal representative of the deceased within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of the
deceased. The court charges involved in procuring such appointment, if defrayed by the
opposing party, may be recovered as costs. The heirs of the deceased may be allowed to
be substituted for the deceased, without requiring the appointment of an executor or
administrator and the court may appoint guardian ad litem for the minor heirs.
3. Buan vs. Heirs of Buan, 53 Phil. 654.
4. Ibarle vs. Po, 92 Phil. 721.

5. Morales, et al. vs. Ybañez, 98 Phil. 677.
6. Iron Gate Bank vs. Brady, 184 U.S. 665, 22 SCT 529, 46 L. ed. 739.
7. Wenber vs. St. Paul City Co., 97 Feb. 140 R. 39 C.C.A. 79.

FIRST DIVISION
[G.R. No. L-28040. August 18, 1972.]
TESTATE ESTATE OF JOSEFA TANGCO JOSE DE BORJA ,

administrator-appellee, JOSE DE BORJA, as administrator, CAYETANO
DE BORJA, MATILDE DE BORJA and CRISANTO DE BORJA
(deceased) as Children of Josefa Tangco, appellees, vs. TASIANA
VDA. DE DE BORJA, Special Administratrix of the Testate Estate of
Francisco de Borja , appellant.
[G.R. No. L-28568.]
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O.

VDA. DE DE BORJA, special Administratrix appellee, vs. JOSE DE
BORJA , oppositor-appellant.
[G.R. No. L-28611.]
TASIANA O. VDA. DE DE BORJA, as Administratrix of the Testate

Estate of the late Francisco de Borja , plaintiff-appellee, vs. JOSE DE
BORJA, as Administrator of the Testate Estate of the late Josefa
Tangco , defendant-appellant.
Pelaez, Jalandoni & Jamir for administrator-appellee.

Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
Sevilla & Aquino for special administratrix-appellee.
Pelaez, Jalandoni & Jamir for oppositor-appellant.
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Guevara for defendant-appellant.
SYLLABUS
1. CIVIL LAW; WILLS AND SUCCESSION; HEREDITARY SHARE IN ESTATE

VESTS FROM THE MOMENT OF DEATH OF DECEDENT; SHARE IMMEDIATELY
DISPOSABLE. — The hereditary share in a decedent's 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, [3], and there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or 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. The effect of such alienation is to be deemed
limited to what is ultimately adjudicated to the vendor heir, but the aleatory character of
the contract does not affect the validity of the transaction.
2. ID.; ID.: PRESENTATION OF WILL FOR PROBATE NOT NEEDED IN
CONVEYANCE BY HEIR OF HER SHARE. — The doctrine enunciated in Guevara vs.
Guevara (74 Phil. 749) which states that the presentation of a will for probate is
mandatory and that the settlement and distribution of an estate on the basis of
intestacy when the decedent left a will is against the law and public policy, is not
applicable to the cases at bar where there was no attempt to settle or distribute the
estate of Francisco De Borja among the heirs thereto before the probate of his will, the
clear object of the compromise contract between Jose de Borja and Tasiana
Ongsingco Vda. de Borja being merely the conveyance by the latter of any and all her
individual share and interest, actual or eventual, in the estates of Francisco de Borja and
Josefa Tangco.
3. ID.; ID.; ID.; COMPROMISE CONTRACT BINDING ON PARTIES EVEN IF
WITHOUT PROBATE COURT APPROVAL. — Since the compromise contract was
entered into by and between "Jose de Borja personally and as administrator of the
Testate Estate of Josefa Tangco" on the one hand, and on the other, "the heir and
surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco
Vda. de de Borja," it is clear that the transaction was binding on both in their individual
capacities, upon the perfection of the contract, even without previous authority of the
court to enter into the same.
4. ID.; ID.; ID.; ID.; DIFFERENCE BETWEEN EXTRAJUDICIAL COMPROMISE
AND ONE APPROVED BY THE COURT. — The only difference between an extrajudicial
compromise and one that is submitted and approved by the court, is that the latter can
be enforced by execution proceedings.
5. ID.; ID.; ID.; ID., EFFECT OF CONTRACT ON PERSON NOT PARTY THERETO,
INSTANT CASE. — The resolutory period of 60 days, allegedly intended to limit the
effectiveness of the compromise agreement between Tasiana Ongsingco and Jose de
Borja, but which was embodied in another agreement between Ongsingco and the
brothers and sisters of De Borja, does not have any validity as far as De Borja is
concerned since De Borja was not a party to the second agreement.
6. ID.; ID.; SUCCESSIONAL INTEREST OF COMPULSORY HEIR EXISTS
INDEPENDENT OF WILL OF TESTATOR, OR PROBATE THEREOF. — The prerequisite of a
previous probate of a will established in the Guevara and analogous cases, can not
apply to the case of Tasiana Ongsingco Vda. de de Borja who, as the surviving spouse
of Francisco de Borja was his compulsory heir under articles 995 et. seq. of the present
Civil Code and, barring unworthiness or valid disinheritance, her successional interest
existed independent of Francisco de Borja's last will and testament and would exist
even if such will were not probated at all.
7. ID.; ID.; HEREDITARY SHARE CAN BE SOLD TO A CO-HEIR. — The owner of
the undivided hereditary share could dispose of it in favor of whomsoever such owner
chose. Such alienation is expressly recognized and provided for by article 1088 of the
present Civil Code: "Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be subrogated to the rights
of the purchaser by reimbursing him for the price of the sale, provided they do so within
the period of one month from the time they were noti ed in writing of the sale by the
vendor." If a sale of a hereditary right can be made to a stranger, then a fortiori sale
thereof to a coheir could not be forbidden.
8. ID.: CONTRACTS; INABILITY TO REACH NOVATORY ACCORD DOES NOT
INVALIDATE ORIGINALLY VALID CONTRACT. — The inability to reach a novatory accord
can not invalidate the original compromise agreement entered into by the parties and
justi es the act of one of the parties in nally seeking a court order for its approval and
enforcement.
9. ID., PERSONS AND FAMILY RELATIONS; CONJUGAL PARTNERSHIP
PROPERTY; PRESUMPTION OF CONJUGAL CHARACTER OF PROPERTY CONFIRMED IN
INSTANT CASE. — The legal presumption in favor of the conjugal character of the
Hacienda de Jalajala concededly acquired by Francisco de Borja during his marriage to
his rst wife, cannot be rebutted by testimony which is plain hearsay having a clearly
discernible ring of arti ciality and a statement which is plainly self-serving and which is
not admissible in the absence of cross-examination. Such legal presumption has
actually been con rmed by the clear admissions against the pecuniary interest of the
declarants Francisco de Borja and his executor-widow Tasiana Ongsingco consisting of
solemn admissions by the former in the Reamended Inventory and Reamended
Accounting in Special Proceedings No. 7866 of the CFI of Rizal and the latter's
inventory submitted in court listing the Jalajala property as "Conjugal properties of the
Spouses Francisco de Borja and Josefa Tangco."
10. SPECIAL PROCEEDINGS; SETTLEMENT OF ESTATES; FLUCTUATION IN
VALUE OF CURRENCY DOES NOT WARRANT REVALUATION OF PROPERTIES OF
ESTATE. — The decision that "estates, would never be settled if there were to be a
revaluation with every subsequent uctuation in the values of currency and properties
of the estate," is particularly apposite in the present case where Tasiana Ongsingco
pleads that the time elapsed in the appeal has affected her unfavorably because, while
the purchasing power of the agreed price of P800,000 has diminished, the value of the
Jalajala property has increased. The fact is that her delay in receiving the payment of
the agreed price for her hereditary interest was primarily due to her attempts to nullify
the agreement she had formally entered into with the advice of her counsel.
DECISION
REYES , J.B.L. , J : p
Of these case, the rst, numbered L-28040 is an appeal by Tasiana Ongsico Vda.
de de Borja, special administratrix of the testate estate of Francisco de Borja, 1 from
the approval of a compromise agreement by the Court of First Instance of Rizal, Branch
I. In its Special Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco, Jose
de Borja, Administrator."
Case No. L-28568 is an appeal by administrator Jose de Borja from the
disapproval of the same compromise agreement by the Court of First Instance of
Nueva Ecija, Branch II, in its Special Proceeding No. 832, entitled, "Testate Estate of
Francisco de Borja, Tasiana O. Vda. de de Borja, Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de Borja from the
decision of the Court of First Instance of Rizal, Branch X, in its Civil Case No. 7452,
declaring the Hacienda Jalajala Poblacion, which is the main object of the aforesaid
compromise agreement, as the separate and exclusive property of the late Francisco
de Borja and not a conjugal asset of the community with his rst wife, Josefa Tangco,
and that said hacienda pertains exclusively to his testate estate, which is under
administration in Special Proceeding No. 832 of the Court of First Instance of Nueva
Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his wife Josefa
Tangco on 6 October 1940, led a petition for the probate of her will which was
docketed as Special Proceeding No. R-7866 of the Court of First Instance of Rizal,
Branch I. The will was probated on 2 April 1941. In 1946, Francisco de Borja was
appointed executor and administrator: in 1952, their son, Jose de Borja, was appointed
co-administrator. When Francisco died, on 14 April 1954, Jose became the sole
administrator of the testate estate of his mother, Jose Tangco While a widower
Francisco de Borja allegedly took unto himself a second wife, Tasiana Ongsingco. Upon
Francisco's death, Tasiana instituted testate proceedings in the Court of First Instance
of Nueva Ecija, where, in 1955, she was appointed special administratrix. The validity of
Tasiana's marriage to Francisco was questioned in said proceeding.
The relationship between the children of the rst marriage and Tasiana
Ongsingco has been plagued with several court suits and counter-suits; including the
three cases at bar, some eighteen (18) cases remain pending determination in the
courts. The testate estate of Josefa Tangco alone has been unsettled for more than a
quarter of a century. In order to put an end to all these litigations, a compromise
agreement was entered into on 12 October 1963, 2 by and between "[T]he heir and son
of Francisco de Borja by his rst marriage, namely, Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco," and "[T]he heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de
Borja, assisted by her lawyer, Atty. Luis Panaguiton, Jr." The terms and conditions of the
compromise agreement are as follows:
"A G R E E M E N T
THIS AGREEMENT made and entered into by and between
The heir and son of Francisco de Borja by his rst marriage namely, Jose
de Borja personally and as administrator of the Testate Estate of Josefa Tangco,
AND
The heir and surviving spouse of Francisco de Borja by his second
marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer, Atty. Luis
Panaguiton, Jr.
WITNESSETH
THAT it is the mutual desire of all the parties herein to terminate and settle,
with nality, the various court litigations, controversies, claims, counterclaims,
etc., between them in connection with the administration, settlement, partition,
adjudication and distribution of the assets as well as liabilities of the estates of
Francisco de Borja and Josefa Tangco, first spouse of Francisco de Borja.
THAT with this end in view, the parties herein have agreed voluntarily and
without any reservations to enter into and execute this agreement under the
following terms and conditions:
1. That the parties agree to sell the Poblacion portion of the Jalajala
properties situated in Jalajala, Rizal, presently under administration in the Testate
Estate of Josefa Tangco (SP. Proc. No. 7866, Rizal), more speci cally described
as follows:
'Linda al Norte con el Rio Puwang que la separa de la jurisdiccion
del Municipio de Pililla de la Provincia de Rizal, y con el pico del Monte
Zambrano; al Oeste con la Laguna de Bay; por el Sur con los herederos de
Marcelo de Borja; y por el Este con los terrenos de la Familia Maronilla'
with a segregated area of approximately 1,313 hectares at the amount of
P0.30 per square meter.
2. That Jose de Borja agrees and obligates himself to pay Tasiana
Ongsingco Vda. de de Borja the total amount of Eight Hundred Thousand Pesos
(P800,000) Philippine Currency, in cash, which represent P200,000 as his share in
the payment and P600,000 as pro-rata shares of the heirs Crisanto, Cayetano, and
Matilde, all surnamed de Borja and this shall be considered as full and complete
payment and settlement of her hereditary share in the estate of the late Francisco
de Borja as well as the estate of Josefa Tangco, Sp. Proc. No. 832-Nueva Ecija
and Sp. Proc. No. 7866-Rizal, respectively, and to any properties bequeathed or
devised in her favor by the late Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise. The funds for this payment shall be taken from and
shall depend upon the receipt of full payment of the proceeds of the sale of
Jalajala, 'Poblacion.'
3. That Tasiana Ongsinco Vda. de de Borja hereby assumes payment

of that particular obligation incurred by the late Francisco de Borja in favor of the
Rehabilitation Finance Corporation, now Development Bank of the Philippines,
amounting to approximately P30,000.00 and also assumes payment of her 1/5
share of the Estate and Inheritance taxes on the Estate of the late Francisco de
Borja or the sum of P3,500.00, more or less, which shall be deducted by the buyer
of Jalajala, 'Poblacion' from the payment to be made to Tasiana Ongsingco Vda.
de Borja under paragraph 2 of this Agreement and paid directly to the
Development Bank of the Philippines and the heirs-children of Francisco de Borja.
4. Thereafter, the buyer of Jalajala 'Poblacion' is hereby authorized to

pay directly Tasiana Ongsingco Vda. de de Borja the balance of the payment due
her under paragraph 2 of this Agreement (approximately P766,500.00) and issue
in the name of Tasiana Ongsingco Vda. de de Borja, corresponding certi ed
checks/treasury warrant, who, in turn, will issue the corresponding receipt to Jose
de Borja.
5. In consideration of above payment to Tasiana Ongsingco Vda. de

de Borja, Jose de Borja personally and as administrator of the Testate Estate of
Josefa Tangco, and Tasiana Ongsingco Vda. de de Borja, for themselves and for
their heirs, successors, executors, administrators, and assigns, hereby forever
mutually renounce, withdraw, waive, remise, release and discharge any and all
manner of action or actions, cause or causes of action, suits, debts, sum or sums
of money, accounts, damages, claims and demands whatsoever, in law or in
equity, which they ever had, or now have or may have against each other, more
speci cally Sp. Proceedings Nos. 7866 and 1955, CFI-Rizal, and Sp. Proc. No 832-
Nueva Ecija, Civil Case No. 3033, CFI-Nueva Ecija and Civil Case No. 7452-CFI,
Rizal, as well as the case led against Manuel Quijal for perjury with the
Provincial Fiscal of Rizal, the intention being to completely, absolutely and nally
release each other, their heirs, successors, and assigns, from any and all liability,
arising wholly or partially, directly or indirectly, from the administration,
settlement, and distribution of the assets as well as liabilities of the estates of
Francisco de Borja and Josefa Tangco, rst spouse of Francisco de Borja, and
lastly, Tasiana Ongsingco Vda. de de Borja expressly and speci cally renounce
absolutely her rights as heir over any hereditary share in the estate of Francisco
de Borja.
6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the
payment under paragraph 4 hereof, shall deliver to the heir Jose de Borja all the
papers, titles and documents belonging to Francisco de Borja which are in her
possession and said heir Jose de Borja shall issue in turn the corresponding
receipt thereof.
7. That this agreement shall take effect only upon the fulfillment of the
sale of the properties mentioned under paragraph 1 of this agreement and upon
receipt of the total and full payment of the proceeds of the sale of the Jalajala
property 'Poblacion', otherwise, the non-ful llment of the said sale will render this
instrument NULL AND VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands in
the City of Manila, Philippines, this 12th of October, 1963."
On 16 May 1966, Jose de Borja submitted for Court approval the agreement of
12 October 1963 to the Court of First Instance of Rizal, in Special Proceeding No. R-
7866; and again, on 8 August 1966, to the Court of First Instance of Nueva Ecija, in
Special Proceeding No. 832. Tasiana Ongsingco Vda. de de Borja opposed in both
instances. The Rizal court approved the compromise agreement, but the Nueva Ecija
court declared it void and unenforceable. Special administratrix Tasiana Ongsingco
Vda. de de Borja appealed the Rizal Court's order of approval (now Supreme Court G.R.
case No. L-28040), while administrator Jose de Borja appealed the order of
disapproval (G.R. case No. L-28568) by the Court of First Instance of Nueva Ecija.
The genuineness and due execution of the compromise agreement of 12
October 1963 is not disputed, but its validity is, nevertheless, attacked by Tasiana
Ongsingco on the ground that: (1) the heirs cannot enter into such kind of agreement
without rst probating the will of Francisco de Borja; (2) that the same involves a
compromise on the validity of the marriage between Francisco de Borja and Tasiana
Ongsingco; and (3) that even if it were valid, it has ceased to have force and effect.
In assailing the validity of the agreement of 12 October 1963, Tasiana Ongsingco
and the Probate Court of Nueva Ecija rely on this Court's decision in Guevara vs.
Guevara. 74 Phil. 479, wherein the Court's majority held the view that the presentation
of a will for probate is mandatory and that the settlement and distribution of an estate
on the basis of intestacy when the decedent left a will, is against the law and public
policy. It is likewise pointed out by appellant Tasiana Ongsingco that Section 1 of Rule
74 of the Revised Rules explicitly conditions the validity of an extrajudicial settlement of
a decedent's estate by agreement between heirs, upon the facts that "(if) the decedent
left no will and no debts, and the heirs are all of age, or the minors are represented by
their judicial and legal representatives . . ." The will of Francisco de Borja having been
submitted to the Nueva Ecija Court and still pending probate when the 1963 agreement
was made, those circumstances, it is argued, bar the validity of the agreement.
Upon the other hand, in claiming the validity of the compromise agreement, Jose
de Borja stresses that at the time it was entered into, on 12 October 1963, the
governing provision was Section 1, Rule 74 of the original Rules of Court of 1940, which
allowed the extrajudicial settlement of the estate of a deceased person regardless of
whether he left a will or not. He also relies on the dissenting opinion of Justice Moran, in
Guevara vs. Guevara, 74 Phil. 479, wherein was expressed the view that if the parties
have already divided the estate in accordance with a decedent's will, the probate of the
will is a useless ceremony; and if they have divided the estate in a different manner, the
probate of the will is worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar.
This is apparent from an examination of the terms of the agreement between Jose de
Borja and Tasiana Ongsingco. Paragraph 2 of said agreement speci cally stipulates
that the sum of P800,000 payable to Tasiana Ongsingco —
"shall be considered as full — complete payment — settlement of her
hereditary share in the estate of the late Francisco de Borja as well as the
estate of Josefa Tangco, . . . and to any properties bequeathed or devised in
her favor by the late Francisco de Borja by Last Will and Testament or by
Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise."
This provision evidences beyond doubt that the ruling in the Guevara case is not
applicable to the cases at bar. There was here no attempt to settle or distribute the
estate of Francisco de Borja among the heirs thereto before the probate of his will. The
clear object of the contract was merely the conveyance by Tasiana Ongsingco of any
and all her individual share and interest, actual or eventual, in the estate of Francisco de
Borja and Josefa Tangco. There is no stipulation as to any other claimant, creditor or
legatee And as a hereditary share in a decedent's estate is transmitted or vested
immediately from the moment of the death of such causante or predecessor in interest
(Civil Code of the Philippines, Art. 777) 3 there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or 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. 4 Of course, the effect of such alienation is to be
deemed limited to what is ultimately adjudicated to the vendor heir. However, the
aleatory character of the contract does not affect the validity of the transaction; neither
does the coetaneous agreement that the numerous litigations between the parties (the
approving order of the Rizal Court enumerates fourteen of them, Rec. App. pp. 79-82)
are to be considered settled and should be dismissed, although such stipulation, as
noted by the Rizal Court, gives the contract the character of a compromise that the law
favors, for obvious reasons, if only because it serves to avoid a multiplicity of suits.
It is likewise worthy of note in this connection that as the surviving spouse of
Francisco de Borja, Tasiana Ongsingco was his compulsory heir under article 995 et
seq. of the present Civil Code. Wherefore, barring unworthiness or valid disinheritance,
her successional interest existed independent of Francisco de Borja's last will and
testament, and would exist even if such will were not probated at all. Thus, the
prerequisite of a previous probate of the will, as established in the Guevara and
analogous cases, can not apply to the case of Tasiana Ongsingco Vda. de de Borja.
Since the compromise contract Annex A was entered into by and between "Jose
de Borja personally and as administrator of the Testate Estate of Josefa Tangco" on
the one hand, and on the other, "the heir and surviving spouse of Francisco de Borja by
his second marriage, Tasiana Ongsingco Vda. de de Borja", it is clear that the
transaction was binding on both in their individual capacities, upon the perfection of the
contract, even without previous authority of the Court to enter into the same The only
difference between an extrajudicial compromise and one that is submitted and
approved by the Court, is that the latter can be enforced by execution proceedings. Art.
2037 of the Civil Code is explicit on the point:

Art. 2037. A compromise has upon the parties the effect and authority
o f res judicata; but there shall be no execution except in compliance with a
judicial compromise.
It is argued by Tasiana Ongsingco that while the agreement Annex A expressed

no de nite period for its performance, the same was intended to have a resolutory
period of 60 days for its effectiveness. In support of such contention, it is averred that
such a limit was expressly stipulated in an agreement in similar terms entered into by
said Ongsingco with the brothers and sister of Jose de Borja, to wit, Crisanto, Matilde
and Cayetano, all surnamed de Borja, except that the consideration was xed at
P600,000 (Opposition, Annex/Rec. of Appeal, L-28040, pp. 39-46) and which contained
the following clause:
"III. That this agreement shall take effect only upon the consummation
of the sale of the property mentioned herein and upon receipt of the total and full
payment of the proceeds of the sale by the herein owner heirs-children of
Francisco de Borja, namely, Crisanto, Cayetano and Matilde, all surnamed de
Borja; Provided that if no sale of the said property mentioned herein is
consummated, or the non-receipt of the purchase price thereof by the said owners
within the period of sixty (60) days from the date hereof, this agreement will
become null and void and of no further effect."
Ongsingco's argument loses validity when it is considered that Jose de Borja

was not a party to this particular contract (Annex 1), and that the same appears not to
have been nalized, since it bears no date, the day being left blank "this — day of
October 1963"; and while signed by the parties, it was not notarized, although plainly
intended to be so done, since it carries a proposed notarial rati cation clause.
Furthermore, the compromise contract with Jose de Borja (Annex A), provides in its
par. 2 heretofore transcribed that of the total consideration of P800,000 to be paid to
Ongsingco, P600,000 represent the "pro rata share of the heirs Crisanto, Cayetano and
Matilde, all surnamed de Borja" which corresponds to the consideration of P600,000
recited in Annex 1, and that circumstance is proof that the duly notarized contract
entered into with Jose de Borja under date 12 October 1963 (Annex A), was designed
to absorb and supersede the separate unformalized agreement with the other three
Borja heirs. Hence, the 60 days resolutory term in the contract with the latter (Annex 1)
not being repeated in Annex A, can not apply to the formal compromise with Jose de
Borja. It is moreover manifest that the stipulation that the sale of the Hacienda de
Jalajala was to be made within sixty days from the date of the agreement with Jose de
Borja's coheirs (Annex 1) was plainly omitted in Annex A as improper and ineffective,
since the Hacienda de Jalajala (Poblacion) that was to be sold to raise the P800,000 to
be paid to Ongsingco for her share formed part of the estate of Francisco de Borja and
could not be sold until authorized by the Probate Court. The Court of First Instance of
Rizal so understood it, and in approving the compromise it xed a term of 120 days
counted from the nality of the order now under appeal, for the carrying out by the
parties of the terms of the contract.
This brings us to the plea that the Court of First In stance of Rizal had no
jurisdiction to approve the compromise with Jose de Borja (Annex A) because Tasiana
Ongsingco was not an heir in the estate of Josefa Tangco pending settlement in the
Rizal Court, but she was an heir of Francisco de Borja, whose estate was the object of
Special Proceeding No. 832 of the Court of First Instance of Nueva Ecija. This
circumstance is irrelevant, since what was sold by Tasiana Ongsingco was only her
eventual share in the estate of her late husband, not the estate itself; and as already
shown, that eventual share she owned from the time of Francisco's death and the Court
of Nueva Ecija could not bar her selling it. As owner of her undivided hereditary share,
Tasiana could dispose of it in favor of whomsoever she chose Such alienation is
expressly recognized and provided for by article 1088 of the present Civil Code:
Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for the price of the sale, provided they
do so within the period of one month from the time they were noti ed in writing of
the sale of the vendor."
If a sale of a hereditary right can be made to a stranger, then a fortiori sale

thereof to a coheir could not be forbidden.
Tasiana Ongsingco further argues that her contract with Jose de Borja (Annex
"A") is void because it amounts to a compromise as to her status and marriage with the
late Francisco de Borja. The point is without merit, for the very opening paragraph of
the agreement with Jose de Borja (Annex "A") describes her as "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de de
Borja", which is in itself de nite admission of her civil status. There is nothing in the text
of the agreement that would show that this recognition of Ongsingco's status as the
surviving spouse of Francisco de Borja was only made in consideration of the cession
of her hereditary rights.
It is nally charged by appellant Ongsingco, as well as by the Court of First
Instance of Nueva Ecija in its order of 21 September 1964, in Special Proceedings No.
832 (Amended Record on Appeal in L-28568, page 157), that the compromise
agreement of 13 October 1963 (Annex "A") had been abandoned, as shown by the fact
that, after its execution, the Court of First Instance of Nueva Ecija, in its order of 21
September 1964, had declared that "no amicable settlement had been arrived at by the
parties", and that Jose de Borja himself, in a motion of 17 June 1964, had stated that
the proposed amicable settlement "had failed to materialize".
It is di cult to believe, however, that the amicable settlement referred to in the
order and motion above-mentioned was the compromise agreement of 13 October
1963, which already had been formally signed and executed by the parties and duly
notarized. What the record discloses is that some time after its formalization,
Ongsingco had unilaterally attempted to back out from the compromise agreement,
pleading various reasons restated in the opposition to the Court's approval of Annex "A"
(Record on Appeal, L-20840, page 23): that the same was invalid because of the lapse
of the allegedly intended resolutory period of 60 days and because the contract was
not preceded by the probate of Francisco de Borja's will, as required by this Court's
Guevarra vs. Guevara ruling; that Annex "A" involved a compromise affecting
Ongsingco's status as wife and widow of Francisco de Borja, etc., all of which
objections have been already discussed. It was natural that in view of the widow's
attitude, Jose de Borja should attempt to reach a new settlement or novatory
agreement before seeking judicial sanction and enforcement of Annex "A", since the
latter step might ultimately entail a longer delay in attaining nal remedy. That the
attempt to reach another settlement failed is apparent from the letter of Ongsingco's
counsel to Jose de Borja quoted in pages 35-36 of the brief for appellant Ongsingco in
G.R. No. L-28040; and it is more than probable that the order of 21 September 1964
and the motion of 17 June 1964 referred to the failure of the parties' quest for a more
satisfactory compromise. But the inability to reach a novatory accord can not invalidate
the original compromise (Annex "A") and justi es the act of Jose de Borja in nally
seeking a court order for its approval and enforcement from the Court of First Instance
of Rizal, which, as heretofore described, decreed that the agreement be ultimately
performed within 120 days from the finality of the order, now under appeal.
We conclude that in so doing, the Rizal court acted in accordance with law, and,
therefore, its order should be upheld, while the contrary resolution of the Court of First
Instance of Nueva Ecija should be, and is, reversed.
In her brief, Tasiana Ongsingco also pleads that the time elapsed in the appeal
has affected her unfavorably, in that while the purchasing power of the agreed price of
P800,000 has diminished, the value of the Jalajala property has increased. But the fact
is that her delay in receiving the payment of the agreed price for her hereditary interest
was primarily due to her attempts to nullify the agreement (Annex "A") she had formally
entered into with the advice of her counsel, Attorney Panaguiton. And as to the
devaluation de facto of our currency, what We said in Dizon Rivera vs. Dizon, L-24561,
30 June 1970, 33 SCRA 554, that "estates would never be settled if there were to be a
revaluation with every subsequent uctuation in the values of currency and properties
of the estate", is particularly opposite in the present case.
Coming now to Case G.R. No. L-28611, the issue is whether the Hacienda de
Jalajala (Poblacion), concededly acquired by Francisco de Borja during his marriage to
his rst wife, Josefa Tangco, is the husband's private property (as contended by his
second spouse, Tasiana Ongsingco), or whether it forms part of the conjugal
(ganancial) partnership with Josefa Tangco The Court of First Instance of Rizal (Judge
Herminio Mariano, presiding) declared that there was adequate evidence to overcome
the presumption in favor of its conjugal character established by Article 160 of the Civil
Code.
We are of the opinion that this question as between Tasiana Ongsingco and Jose
de Borja has become moot and academic, in view of the conclusion reached by this
Court in the two preceding cases (G.R. No. L-28568), upholding as valid the cession of
Tasiana Ongsingco's eventual share in the estate of her late husband, Francisco de
Borja, for the sum of P800,000 with the accompanying reciprocal quit-claims between
the parties. But as the question may affect the rights of possible creditors and
legatees, its resolution is still imperative.
It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, had been
originally acquired jointly by Francisco de Borja, Bernardo de Borja and Marcelo de
Borja, and their title thereto was duly registered in their names as co-owners in Land
Registration Case No. 528 of the province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo vs.
Jugo, 54 Phil. 465). Subsequently, in 1931, the Hacienda was partitioned among the co-
owners: the Punta section went to Marcelo de Borja; the Bagombong section to
Bernardo de Borja, and the part in Jalajala proper (Poblacion) corresponded to
Francisco de Borja (V. De Borja vs. De Borja, 101 Phil. 911, 932).
The lot allotted to Francisco was described as —
"Una Parcela de terreno en Poblacion, jalajala: N. Puang Rier; E.
Hermogena Romero; S. Heirs of Marcelo de Borja, O. Laguna de Bay; containing
an area of 13,488,870 sq. m. more or less, assessed at P297,410." (Record on
Appeal, pages 7 and 105)
On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate

Estate of Francisco de Borja, instituted a complaint in the Court of First Instance of
Rizal (Civil Case No. 7452) against Jose de Borja, in his capacity as Administrator of
Josefa Tangco (Francisco de Borja's rst wife), seeking to have the Hacienda above
described declared exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was conjugal property of his
parents (Francisco de Borja and Josefa Tangco), conformably to the presumption
established by Article 160 of the Philippine Civil Code (reproducing Article 1407 of the
Civil Code of 1889), to the effect that:
"Art. 160. All property of the marriage is presumed to belong to
the conjugal partnership, unless it be proved that it pertains exclusively to
the husband or to the wife."
Defendant Jose de Borja further counterclaimed for damages, compensatory,

moral and exemplary, as well as for attorney's fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio Mariano, held
that the plaintiff had adduced su cient evidence to rebut the presumption, and
declared the Hacienda de Jalajala (Poblacion) to be the exclusive private property of
the late Francisco de Borja, and his Administratrix, Tasiana Ongsingco Vda. de Borja, to
be entitled to its possession. Defendant Jose de Borja then appealed to this Court.
The evidence reveals, and the appealed order admits, that the character of the
Hacienda in question as owned by the conjugal partnership De Borja-Tangco was
solemnly admitted by the late Francisco de Borja no less than two times: rst, in the
Reamended Inventory that, as executor of the estate of his deceased wife Josefa
Tangco, he led in the Special Proceedings No. 7866 of the Court of First Instance of
Rizal on 23 July 1953 (Exhibit "2"); and again, in the Reamended Accounting of the same
date, also led in the proceedings aforesaid (Exhibit "7"). Similarly, the plaintiff Tasiana
O. Vda. de Borja, herself, as oppositor in the Estate of Josefa Tangco, submitted therein
an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala property among
the "Conjugal Properties of the Spouses Francisco de Borja and Josefa Tangco". And
once more, Tasiana Ongsingco, as administratrix of the Estate of Francisco de Borja, in
Special Proceedings No. 832 of the Court of First Instance of Nueva Ecija, submitted
therein in December, 1955, an inventory wherein she listed the Jalajala Hacienda under
the heading "Conjugal Property of the Deceased Spouses Francisco de Borja and
Josefa Tangco, which are in the possession of the Administrator of the Testate Estate
of the Deceased Josefa Tangco in Special Proceedings No 7866 of the Court of First
Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that they are plain
admissions against interest made by both Francisco de Borja and the Administratrix of
his estate, in the course of judicial proceedings in the Rizal and Nueva Ecija Courts,
supporting the legal presumption in favor of the conjugal community, the Court below
declared that the Hacienda de Jalajala (Poblacion) was not conjugal property, but the
private exclusive property of the late Francisco de Borja. It did so on the strength of the
following evidences: (a) the sworn statement by Francisco de Borja on 6 August 1951
(Exhibit "F") that —
"He tomado posesion del pedazo de terreno ya delimitado
(equivalente a 1/4 parte, 337 hectareas) adjunto a mi terreno personal y
exclusivo (Poblacion de Jalajala, Rizal)."
and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, that the entire
Hacienda had been bought at a foreclosure sale for P40,100.00, of which amount
P25,100 was contributed by Bernardo de Borja and P15,000.00 by Marcelo de Borja;
that upon receipt of a subsequent demand from the provincial treasurer for realty taxes
in the sum of P17,000, Marcelo told his brother Bernardo that Francisco (son of
Marcelo) wanted also to be a co-owner, and upon Bernardo's assent to the proposal,
Marcelo issued a check for P17,000.00 to pay the back taxes and said that the amount
would represent Francisco's contribution in the purchase of the Hacienda. The witness
further testified that —
"Marcelo de Borja said that money was entrusted to him by Francisco
de Borja when he was still a bachelor and which he derived from his
business transactions." (Hearing, 2 February 1965, t.s.n., pages 13-15)
(Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn statement
overweighed the admissions in the inventories relied upon by defendant-appellant Jose
de Borja, since probate courts can not nally determine questions of ownership of
inventoried property, but that the testimony of Gregorio de Borja showed that
Francisco de Borja acquired his share of the original Hacienda with his own private
funds, for which reason that share can not be regarded as conjugal partnership
property, but as exclusive property of the buyer, pursuant to Article L-1396 (4) of the
Civil Code of 1889 and Article 148 (4) of the Civil Code of the Philippines.
"The following shall be the exclusive property of each spouse:
xxx xxx xxx

"(4) That which is purchased with exclusive money of the wife or
of the husband."
We nd the conclusions of the lower court to be untenable. In the rst place,

witness Gregorio de Borja's testimony as to the source of the money paid by Francisco
for his share was plain hearsay, hence inadmissible and of no probative value, since he
was merely repeating what Marcelo de Borja had told him (Gregorio). There is no way
of ascertaining the truth of the statement, since both Marcelo and Francisco de Borja
were already dead when Gregorio testi ed. In addition, the statement itself is
improbable, since there was no need or occasion for Marcelo de Borja to explain to
Gregorio how and when Francisco de Borja had earned the P17,000.00 entrusted to
Marcelo. A ring of arti ciality is clearly discernible in this portion of Gregorio's
testimony.
As to Francisco de Borja's a davit, Exhibit "F", the quoted portion thereof ( ante,
page 14) does not clearly demonstrate that the "mi terreno personal y exclusivo
(Poblacion de Jalajala, Rizal)" refers precisely to the Hacienda in question. The
inventories (Exhibits 3 and 4) disclose that there were two real properties in Jalajala
owned by Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a much
bigger one of 1,357.260.70 sq. m., which is evidently the Hacienda de Jalajala
(Poblacion). To which of these lands did the a davit of Francisco de Borja (Exhibit "F")
refer to? In addition, Francisco's characterization of the land as "mi terreno personal y
exclusivo" is plainly self-serving, and not admissible in the absence of cross
examination.
It may be true that the inventories relied upon by defendant-appellant (Exhibits
"2", "3", "4" and "7") are not conclusive on the conjugal character of the property in
question; but as already noted, they are clear admissions against the pecuniary interest
of the declarants, Francisco de Borja and his executor-widow, Tasiana Ongsingco, and
as such of much greater probative weight than the self-serving statement of Francisco
(Exhibit "F"). Plainly, the legal presumption in favor of the conjugal character of the
Hacienda de Jalajala (Poblacion) now in dispute has not been rebutted but actually
con rmed by proof. Hence, the appealed order should be reversed and the Hacienda de
Jalajala (Poblacion) declared property of the conjugal partnership of Francisco de Borja
and Josefa Tangco.
No error having been assigned against the ruling of the lower court that claims
for damages should be ventilated in the corresponding special proceedings for the
settlement of the estates of the deceased, the same requires no pronouncement from
this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of
Rizal in Case No. L-28040 is hereby a rmed; while those involved in Cases Nos. L-
28568 and L-28611 are reversed and set aside. Costs against the appellant Tasiana
Ongsingco Vda. de Borja in all three (3) cases.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Makasiar,
Antonio and Esguerra, JJ., concur.
Fernando, J., did not take part.
Footnotes
1. She died during the pendency of these appeals, being substituted by Atty. Luis
Panaguiton, Jr., administrator of her estate (S. C. Resolution, 27 February 1970).
2. Annex A, Record on Appeal, GR. No. L-28040, pp. 16-21.
3. Also: Osorio vs. Osorio Steamship Co., 41 Phil. 531; Baun vs. Heirs of Baun, 53 Phil. 654;
Barretto vs. Tuason, 59 Phil. 845; Cuevas vs. Abesamis, 71 Phil. 147; Jayme vs. Gamboa,
75 Phil. 479; Iballe vs. Po.
4. Garcia vs. David, 67 Phil. 279; Jakosalem vs. Rafols, 73 Phil. 628.

THIRD DIVISION
[G.R. No. 68053. May 7, 1990.]
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ ,

petitioners, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT
and JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO
YANES, and ILUMINADO YANES , respondents.
Francisco G. Banzon for petitioners.

Renecio R. Espiritu for private respondents.
DECISION
FERNAN , C.J : p
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 court
dated May 30, 1984, denying the motion for reconsideration of its decision. llcd
The real properties involved are two parcels of land identi ed 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 Certi cate 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, Ru no, Felipe and Teodora.
Herein private respondents, Estelita, Iluminado and Jesus, are the children of
Ru no 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 Ru no 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 Certi cate 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 certi cate of title also contains a
certi cation 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) led 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. 1 0
Two years later or on May 26, 1960, Teodora Yanes and the children of her
brother Ru no, namely, Estelita, Iluminado and Jesus, led 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 ling 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. 1 1
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. 1 2
Accordingly, TCT Nos. 30919 and 30920 were issued to Siason, 1 3 who, thereafter,
declared the two lots in his name for assessment purposes. 1 4
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in
behelf of the other plaintiffs, and assisted by their counsel, led 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." 1 5
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: cdll
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 Certi cates
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." 1 6
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." 1 7
The execution of the decision in Civil Case No. 5022 having met a hindrance,
herein private respondents (the Yaneses) led on July 31, 1965, in the Court of
First Instance of Negros Occidental a petition for the issuance of a new certi cate
of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to
Rosendo Alvarez. 1 8 Thereafter, the court required Rodolfo Siason to produce the
certificates of title covering Lots 773 and 823.
Expectedly, Siason led 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
propert(ies)"; that the decision in the cadastral proceeding 1 9 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 nal and executory. 2 0
Finding said manifestation to be well-founded, the cadastral court, in its order of
September 4, 1965, nulli ed its previous order requiring Siason to surrender the
certificates of title mentioned therein. 2 1
In 1968, the Yaneses led an ex-parte motion for the issuance of an alias
writ of execution in Civil Case No. 5022. Siason opposed it. 2 2 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 the judgment therein could not be enforced against Siason as he was
not a party in the case. 2 3
The action led by the Yaneses on February 21, 1968 was for recovery of
real property with damages. 2 4 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 certi cate of title in the name of the Yaneses "in accordance with the sheriff's
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 Alvarezes 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
ling 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. 2 5
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. 2 6 On their part, the Alvarezes stated in their answer
that the Yaneses' cause of action had been "barred by res judicata, statute of
limitation and estoppel." 2 7
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. 2 8 The
dispositive portion of the decision states: LexLib
"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 dismissed.
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 plaintiffs; 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 led 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." 2 9
The Alvarezes appealed to the then Intermediate Appellate Court which, in
its decision of August 31, 1983, 3 0 af rmed 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." 3 1
The dispositive portion of said decision reads:
"WHEREFORE, the decision appealed from is af rmed 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. 3 2
Finding no cogent reason to grant appellants' motion for reconsideration, said
appellate court denied the same.
Hence, the instant petition.
In their memorandum petitioners raised the following issues:
1. Whether 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 unquali edly 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." 3 3
The petition is devoid of merit. prcd
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 nal 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. 3 4
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. 3 5 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 nal 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. 3 6
There is no dispute that the rights of the Yaneses to the properties in
question have been nally 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. 3 7 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. 3 8
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. 3 9 "It is one thing to protect an
innocent third party; it is entirely a different matter and one devoid of justi cation
if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his
nefarious deed. As clearly revealed by the undeviating line of decisions coming
from this Court, such an undesirable eventuality is precisely sought to be guarded
against." 4 0
The issue on the right to the properties in litigation having been nally
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 long 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. llcd
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. Contracts take 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. 4 1
"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. . . ."
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 ction, 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. 4 2
It must, however, be made clear that petitioners are liable only to the extent
of the value of their inheritance. With this clari cation and considering petitioners'
admission that there are other properties left by the deceased which are suf cient
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. LibLex
WHEREFORE, subject to the clari cation herein above stated, the assailed
decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Gutierrez, Jr., Feliciano and Cortes, JJ., concur.
Bidin, J., took no part.
Footnotes
1. TSN, October 17, 1973, pp. 4-5.
2. TSN, December 11, 1973, pp. 11 & 55.

3. Exhibits 26 and 28.
4. Exhibit 27.
5. Exhibit B-Alvarez.
6. Exhibits 23 and 24-Siason.

7. Exhibits 1-Alvarez: Exh. 17-Siason.
8. Exh. 2-Alvarez.
9. Exh. 3-Alvarez.
10. Exh. 2-Siason.
11. Civil Case No. 5022; Exhibit B.
12. Exhibit F.
13. Exhibits 12 and 13.
14. Exhibits 10, 11, 14 and 15.

15. Exhibit 4-Alvarez.
16. Record on Appeal, p. 25.
17. Exhibit E.
18. Cad. Case No. 6; Exhibit 3.

19. Cad. Case No. 6.
20. Exhibit 5.
21. Exhibit 6.
22. Exhibit 78.
23. Exhibit 9.
24. Civil Case No. 8474.
25. Record on Appeal, pp. 8-9.
26. Record on Appeal, p. 36.
27. Ibid., p. 63.
28. Ibid., pp. 95-99.
30. Por rio V. Sison Jr. J., ponente Abdulwahid A. Bidin, Marcelino R. Veloso and
Desiderio P. Jurado , JJ. concurring.
31. Rollo, p. 32.
32. Rollo, p. 32.
33. Rollo, p. 119.
34. Rollo, p. 27.

35. Miranda v. C.A., 141 SCRA 302 [1986].
36. Ngo Bun Tiong v. Judge Sayo, G.R. No. 45825, June 30, 1988.

38. Rollo, p. 27.
39. Quiniano et al. v. C.A., 39 SCRA 221 [1971].
40. Ibid.
41. 100 Phil. 388.
42. Lopez vs. Enriquez, 16 Phil. 336 (1910).

EN BANC
[G.R. No. L-4963. January 29, 1953.]
MARIA USON , plaintiff-appellee, vs . MARIA DEL ROSARIO,

CONCEPCION NEBREDA, CONRADO NEBREDA, DOMINADOR
NEBREDA, and FAUSTINO NEBREDA, Jr. , defendants-appellants.
Priscilo Evangelista for appellee.

Brigido G. Estrada for appellant.
SYLLABUS
1. DESCENT AND DISTRIBUTION; HUSBAND AND WIFE; RIGHTS OF LAWFUL

WIFE AS AFFECTED BY THE NEW CIVIL CODE. — The right of ownership of the lawful
wife of a decedent who had died before the new Civil Code took effect became vested
in her upon his death, and this is so because of the imperative provision of the law
which commands that the rights of succession are transmitted from the moment of
death (Art. 657, old Civil Code; Ilustre vs. Frondosa, 17 Phil., 321). The new right
recognized by the new Civil Code in favor of the illegitimate children of the deceased
can not be asserted to the impairment of the vested right of the lawful wife over the
lands in dispute. While article 2253 of the new Civil Code provides that rights which are
declared for the rst time shall have retroactive effect even though the event which
gave rise to them may have occurred under the former legislation, yet this is so only
when the new rights do not prejudice any vested or acquired right of the same origin.
2. ID.; ID.; RENUNCIATION OF INHERITANCE MADE BY LAWFUL WIFE;
FUTURE INHERITANCE, NOT SUBJECT TO CONTRACT. — Although the lawful wife has
expressly renounced her right to inherit any future property that her husband may
acquire and leave upon his death, such renunciation cannot be entertained for the
simple reason that future inheritance cannot be the subject of a contract nor can it be
renounced (1 Manresa, 6th ed., 123; Osorio vs. Osorio, et al., 41 Phil., 531).
3. ID.; ID.; DONATIONS BY DECEASED; ESSENTIAL FORMALITIES OF
DONATION. — Assignments, if any, made by the deceased of real property for which
there was no material consideration, should be made in a public document and must be
accepted either in the same document or in a separate one (Art. 633, old Civil Code).
Assignments or donations which lack this essential formality have no valid effect.
DECISION
BAUTISTA ANGELO , J : p
This is an action for the recovery of the ownership and possession of ve (5)
parcels of land situated in the municipality of Labrador, Province of Pangasinan, led by
Maria Uson against Maria del Rosario and her four children named Concepcion,
Conrado, Dominador, and Faustino, surnamed Nebreda, who are all of minor age, before
the Court of First Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945
left the lands involved in this litigation. Faustino Nebreda left no other heir except his
widow Maria Uson. However, plaintiff claims that when Faustino Nebreda died in 1945,
his common- law wife Maria del Rosario took possession illegally of said lands thus
depriving her of their possession and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931,
Maria Uson and her husband, the late Faustino Nebreda, executed a public document
whereby they agreed to separate as husband and wife and, in consideration of their
separation, Maria Uson was given a parcel of land by way of alimony and in return she
renounced her right to inherit any other property that may be left by her husband upon
his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the court
rendered decision ordering the defendants to restore to the plaintiff the ownership and
possession of the lands in dispute without special pronouncement as to costs.
Defendants interposed the present appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of
Faustino Nebreda, former owner of the ve parcels of lands litigated in the present
case. There is likewise no dispute that Maria del Rosario, one of the defendants-
appellants, was merely a common-law wife of the late Faustino Nebreda with whom she
had four illegitimate children, her now co-defendants. It likewise appears that Faustino
Nebreda died in 1945 much prior to the effectivity of the new Civil Code. With this
background, it is evident that when Faustino Nebreda died in 1945 the ve parcels of
land he was seized of at the time passed from the moment of his death to his only heir,
his widow Maria Uson (Article 657, old Civil Code). As this Court aptly said, "The
property belongs to the heirs at the moment of the death of the ancestor as completely
as if the ancestor had executed and delivered to them a deed for the same before his
death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment, therefore, the
rights of inheritance of Maria Uson over the lands in question became vested.
The claim of the defendants that Maria Uson had relinquished her right over the
lands in question because she expressly renounced to inherit any future property that
her husband may acquire and leave upon his death in the deed of separation they had
entered into on February 21, 1931, cannot be entertained for the simple reason that
future inheritance cannot be the subject of a contract nor can it be renounced (1
Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio and
Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are
illegitimate children of the late Faustino Nebreda and under the old Civil Code are not
entitled to any successional rights, however, under the new Civil Code which became in
force in June, 1950, they are given the status and rights of natural children and are
entitled to the successional rights which the law accords to the latter (Article 2264 and
article 287, new Civil Code), and because these successional rights were declared for
the rst time in the new code, they shall be given retroactive effect even though the
event which gave rise to them may have occurred under the prior legislation (Article
2253, new Civil Code).
There is no merit in this claim. Article 2253 above referred to provides indeed
that rights which are declared for the first time shall have retroactive effect even though
the event which gave rise to them may have occurred under the former legislation, but
this is so only when the new rights do not prejudice any vested or acquired right of the
same origin. Thus, said article provides that "if a right should be declared for the rst
time in this Code, it shall be effective at once, even though the act or event which gives
rise thereto may have been done or may have occurred under the prior legislation,
provided said new right does not prejudice or impair any vested or acquired right, of the
same origin." As already stated in the early part of this decision, the right of ownership
of Maria Uson over the lands in question became vested in 1945 upon the death of her
late husband and this is so because of the imperative provision of the law which
commands that the rights to succession are transmitted from the moment of death
(Article 657, old Civil Code). The new right recognized by the new Civil Code in favor of
the illegitimate children of the deceased cannot, therefore, be asserted to the
impairment of the vested right of Maria Uson over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was lying in
state, in a gesture of pity or compassion, agreed to assign the lands in question to the
minor children for the reason that they were acquired while the deceased was living
with their mother and Maria Uson wanted to assuage somewhat the wrong she has
done to them, this much can be said; apart from the fact that this claim is disputed, we
are of the opinion that said assignment, if any, partakes of the nature of a donation of
real property, inasmuch as it involves no material consideration, and in order that it may
be valid it shall be made in a public document and must be accepted either in the same
document or in a separate one (Article 633, old Civil Code). Inasmuch as this essential
formality has not been followed, it results that the alleged assignment or donation has
no valid effect.
Wherefore, the decision appealed from is affirmed, without costs.
Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and
Labrador, JJ., concur.

THIRD DIVISION
[G.R. No. 146006. February 23, 2004.]
JOSE C. LEE AND ALMA AGGABAO, in their capacities as President

and Corporate Secretary, respectively, of Philippines International
Life Insurance Company, and FILIPINO LOAN ASSISTANCE GROUP ,
petitioners, vs . REGIONAL TRIAL COURT OF QUEZON CITY BRANCH
85 presided by JUDGE PEDRO M. AREOLA, BRANCH CLERK OF
COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER G.
RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of
Quezon City Branch 85, MA. DIVINA ENDERES claiming to be
Special Administratrix, and other persons/public o cers acting for
and in their behalf , respondents.
DECISION
CORONA , J : p
This is a petition for review under Rule 45 of the Rules of Court seeking to reverse
and set aside the decision 1 of the Court of Appeals, First Division, dated July 26, 2000, in
CA G.R. 59736, which dismissed the petition for certiorari led by petitioners Jose C. Lee
and Alma Aggabao (in their capacities as president and secretary, respectively, of
Philippine International Life Insurance Company) and Filipino Loan Assistance Group. SDHacT
The antecedent facts follow.

Dr. Juvencio P. Ortañez incorporated the Philippine International Life Insurance
Company, Inc. on July 6, 1956. At the time of the company's incorporation, Dr. Ortañez
owned ninety percent (90%) of the subscribed capital stock.
On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana Salgado Ortañez),
three legitimate children (Rafael, Jose and Antonio Ortañez) and ve illegitimate children
by Ligaya Novicio (herein private respondent Ma. Divina Ortañez-Enderes and her siblings
Jose, Romeo, Enrico Manuel and Cesar, all surnamed Ortañez). 2
On September 24, 1980, Rafael Ortañez led before the Court of First Instance of
Rizal, Quezon City Branch (now Regional Trial Court of Quezon City) a petition for letters of
administration of the intestate estate of Dr. Ortañez, docketed as SP. Proc. Q-30884
(which petition to date remains pending at Branch 85 thereof).
Private respondent Ma. Divina Ortañez-Enderes and her siblings led an opposition
to the petition for letters of administration and, in a subsequent urgent motion, prayed that
the intestate court appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Paño, then presiding judge of Branch 85,
appointed Rafael and Jose Ortañez joint special administrators of their father's estate.
Hearings continued for the appointment of a regular administrator (up to now no regular
administrator has been appointed).
As ordered by the intestate court, special administrators Rafael and Jose Ortañez
submitted an inventory of the estate of their father which included, among other
properties, 2,029 3 shares of stock in Philippine International Life Insurance Company
(hereafter Philinterlife), representing 50.725% of the company's outstanding capital stock.
On April 15, 1989, the decedent's wife, Juliana S. Ortañez, claiming that she owned
1,014 4 Philinterlife shares of stock as her conjugal share in the estate, sold said shares
with right to repurchase in favor of herein petitioner Filipino Loan Assistance Group
(FLAG), represented by its president, herein petitioner Jose C. Lee. Juliana Ortañez failed to
repurchase the shares of stock within the stipulated period, thus ownership thereof was
consolidated by petitioner FLAG in its name.
On October 30, 1991, Special Administrator Jose Ortañez, acting in his personal
capacity and claiming that he owned the remaining 1,011 5 Philinterlife shares of stocks as
his inheritance share in the estate, sold said shares with right to repurchase also in favor of
herein petitioner FLAG, represented by its president, herein petitioner Jose C. Lee. After
one year, petitioner FLAG consolidated in its name the ownership of the Philinterlife shares
of stock when Jose Ortañez failed to repurchase the same.
It appears that several years before (but already during the pendency of the
intestate proceedings at the Regional Trial Court of Quezon City, Branch 85), Juliana
Ortañez and her two children, Special Administrators Rafael and Jose Ortañez, entered into
a memorandum of agreement dated March 4, 1982 for the extrajudicial settlement of the
estate of Dr. Juvencio Ortañez, partitioning the estate (including the Philinterlife shares of
stock) among themselves. This was the basis of the number of shares separately sold by
Juliana Ortañez on April 15, 1989 (1,014 shares) and by Jose Ortañez on October 30, 1991
(1,011 shares) in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina Ortañez-Enderes and her
siblings (hereafter referred to as private respondents Enderes et al.) led a motion for
appointment of special administrator of Philinterlife shares of stock. This move was
opposed by Special Administrator Jose Ortañez.
On November 8, 1995, the intestate court granted the motion of private respondents
Enderes et al. and appointed private respondent Enderes special administratrix of the
Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes led an urgent motion to
declare void ab initio the memorandum of agreement dated March 4, 1982. On January 9,
1996, she led a motion to declare the partial nullity of the extrajudicial settlement of the
decedent's estate. These motions were opposed by Special Administrator Jose Ortañez.
On March 22, 1996, Special Administratrix Enderes led an urgent motion to declare
void ab initio the deeds of sale of Philinterlife shares of stock, which move was again
opposed by Special Administrator Jose Ortañez.
On February 4, 1997, Jose Ortañez led an omnibus motion for (1) the approval of
the deeds of sale of the Philinterlife shares of stock and (2) the release of Ma. Divina
Ortañez-Enderes as special administratrix of the Philinterlife shares of stock on the ground
that there were no longer any shares of stock for her to administer.
On August 11, 1997, the intestate court denied the omnibus motion of Special
Administrator Jose Ortañez for the approval of the deeds of sale for the reason that:
Under the Godoy case, supra, it was held in substance that a sale of a
property of the estate without an Order of the probate court is void and passes no
title to the purchaser. Since the sales in question were entered into by Juliana S.
Ortañez and Jose S. Ortañez in their personal capacity without prior approval of
the Court, the same is not binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the sale of

Philinterlife shares of stock and release of Ma. Divina Ortañez-Enderes as Special
Administratrix is hereby denied. 6
On August 29, 1997, the intestate court issued another order granting the motion of
Special Administratrix Enderes for the annulment of the March 4, 1982 memorandum of
agreement or extrajudicial partition of estate. The court reasoned that:
In consonance with the Order of this Court dated August 11, 1997
DENYING the approval of the sale of Philinterlife shares of stocks and release of
Ma. Divina Ortañez-Enderes as Special Administratrix, the "Urgent Motion to
Declare Void Ab Initio Memorandum of Agreement" dated December 19, 1995. . .
is hereby impliedly partially resolved insofar as the transfer/waiver/renunciation
of the Philinterlife shares of stock are concerned, in particular, No. 5, 9(c), 10(b)
and 11(d)(ii) of the Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of Agreement

dated March 4, 1982 executed by Juliana S. Ortañez, Rafael S. Ortañez and Jose
S. Ortañez as partially void ab initio insofar as the transfer/waiver/renunciation
of the Philinterlife shares of stocks are concerned. 7
Aggrieved by the above-stated orders of the intestate court, Jose Ortañez led, on
December 22, 1997, a petition for certiorari in the Court of Appeals. The appellate court
denied his petition, however, ruling that there was no legal justi cation whatsoever for the
extrajudicial partition of the estate by Jose Ortañez, his brother Rafael Ortañez and mother
Juliana Ortañez during the pendency of the settlement of the estate of Dr. Ortañez, without
the requisite approval of the intestate court, when it was clear that there were other heirs
to the estate who stood to be prejudiced thereby. Consequently, the sale made by Jose
Ortañez and his mother Juliana Ortañez to FLAG of the shares of stock they invalidly
appropriated for themselves, without approval of the intestate court, was void. 8
Special Administrator Jose Ortañez led a motion for reconsideration of the Court
of Appeals decision but it was denied. He elevated the case to the Supreme Court via
petition for review under Rule 45 which the Supreme Court dismissed on October 5, 1998,
on a technicality. His motion for reconsideration was denied with nality on January 13,
1999. On February 23, 1999, the resolution of the Supreme Court dismissing the petition of
Special Administrator Jose Ortañez became nal and was subsequently recorded in the
book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the
FLAG-controlled board of directors, increased the authorized capital stock of Philinterlife,
diluting in the process the 50.725% controlling interest of the decedent, Dr. Juvencio
Ortañez, in the insurance company. 9 This became the subject of a separate action at the
Securities and Exchange Commission led by private respondent-Special Administratrix
Enderes against petitioner Jose Lee and other members of the FLAG-controlled board of
Philinterlife on November 7, 1994. Thereafter, various cases were led by Jose Lee as
president of Philinterlife and Juliana Ortañez and her sons against private respondent-
Special Administratrix Enderes in the SEC and civil courts. 1 0 Somehow, all these cases
were connected to the core dispute on the legality of the sale of decedent Dr. Ortañez's
Philinterlife shares of stock to petitioner FLAG, represented by its president, herein
petitioner Jose Lee who later became the president of Philinterlife after the controversial
sale.
On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings

led a motion for execution of the Orders of the intestate court dated August 11 and
August 29, 1997 because the orders of the intestate court nullifying the sale (upheld by the
Court of Appeals and the Supreme Court) had long became nal. Respondent-Special
Administratrix Enderes served a copy of the motion to petitioners Jose Lee and Alma
Aggabao as president and secretary, respectively, of Philinterlife, 1 1 but petitioners ignored
the same.
On July 6, 2000, the intestate court granted the motion for execution, the dispositive
portion of which read:
WHEREFORE, premises considered, let a writ of execution issue as follows:
1. Con rming the nullity of the sale of the 2,029 Philinterlife shares in
the name of the Estate of Dr. Juvencio Ortañez to Filipino Loan
Assistance Group (FLAG);
2. Commanding the President and the Corporate Secretary of
Philinterlife to reinstate in the stock and transfer book of Philinterlife
the 2,029 Philinterlife shares of stock in the name of the Estate of
Dr. Juvencio P. Ortañez as the owner thereof without prejudice to
other claims for violation of pre-emptive rights pertaining to the said
2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of Philinterlife to
issue stock certi cates of Philinterlife for 2,029 shares in the name
of the Estate of Dr. Juvencio P. Ortañez as the owner thereof
without prejudice to other claims for violations of pre-emptive rights
pertaining to the said 2,029 Philinterlife shares and,
4. Con rming that only the Special Administratrix, Ma. Divina Ortañez-
Enderes, has the power to exercise all the rights appurtenant to the
said shares, including the right to vote and to receive dividends.
5. Directing Philinterlife and/or any other person or persons claiming

to represent it or otherwise, to acknowledge and allow the said
Special Administratrix to exercise all the aforesaid rights on the said
shares and to refrain from resorting to any action which may tend
directly or indirectly to impede, obstruct or bar the free exercise
thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible o cer/s of
Philinterlife, or any other person or persons claiming to represent it
or otherwise, are hereby directed to comply with this order within
three (3) days from receipt hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby
directed to implement the writ of execution with dispatch to forestall
any and/or further damage to the Estate.

SO ORDERED. 1 2
In the several occasions that the sheriff went to the o ce of petitioners to execute
the writ of execution, he was barred by the security guard upon petitioners' instructions.
Thus, private respondent-Special Administratrix Enderes led a motion to cite herein
petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) in contempt. 1 3
Petitioners Lee and Aggabao subsequently led before the Court of Appeals a
petition for certiorari, docketed as CA G.R. SP No. 59736. Petitioners alleged that the
intestate court gravely abused its discretion in (1) declaring that the ownership of FLAG
over the Philinterlife shares of stock was null and void; (2) ordering the execution of its
order declaring such nullity and (3) depriving the petitioners of their right to due process.
On July 26, 2000, the Court of Appeals dismissed the petition outright:
We are constrained to DISMISS OUTRIGHT the present petition for
certiorari and prohibition with prayer for a temporary restraining order and/or writ
of preliminary injunction in the light of the following considerations:
1. The assailed Order dated August 11, 1997 of the respondent judge
had long become final and executory;
2. The certi cation on non-forum shopping is signed by only one (1) of

the three (3) petitioners in violation of the Rules; and
3. Except for the assailed orders and writ of execution, deed of sale
with right to repurchase, deed of sale of shares of stocks and
omnibus motion, the petition is not accompanied by such pleadings,
documents and other material portions of the record as would
support the allegations therein in violation of the second paragraph,
Rule 65 of the 1997 Rules of Civil Procedure, as amended. aDSTIC
Petition is DISMISSED.
SO ORDERED. 1 4
The motion for reconsideration led by petitioners Lee and Aggabao of the above
decision was denied by the Court of Appeals on October 30, 2000:
This resolves the "urgent motion for reconsideration" led by the
petitioners of our resolution of July 26, 2000 dismissing outrightly the above-
entitled petition for the reason, among others, that the assailed Order dated
August 11, 1997 of the respondent Judge had long become final and executory.
Dura lex, sed lex.
WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for
lack of merit.
SO ORDERED. 1 5
On December 4, 2000, petitioners elevated the case to the Supreme Court through a
petition for review under Rule 45 but on December 13, 2000, we denied the petition
because there was no showing that the Court of Appeals in CA G.R. SP No. 59736
committed any reversible error to warrant the exercise by the Supreme Court of its
discretionary appellate jurisdiction. 1 6
However, upon motion for reconsideration led by petitioners Lee and Aggabao, the
Supreme Court granted the motion and reinstated their petition on September 5, 2001. The
parties were then required to submit their respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on July 19, 2000,
led a motion to direct the branch clerk of court in lieu of herein petitioners Lee and
Aggabao to reinstate the name of Dr. Ortañez in the stock and transfer book of Philinterlife
and issue the corresponding stock certi cate pursuant to Section 10, Rule 39 of the Rules
of Court which provides that "the court may direct the act to be done at the cost of the
disobedient party by some other person appointed by the court and the act when so done
shall have the effect as if done by the party." Petitioners Lee and Aggabao opposed the
motion on the ground that the intestate court should refrain from acting on the motion
because the issues raised therein were directly related to the issues raised by them in their
petition for certiorari at the Court of Appeals docketed as CA-G.R. SP No. 59736. On
October 30, 2000, the intestate court granted the motion, ruling that there was no
prohibition for the intestate court to execute its orders inasmuch as the appellate court did
not issue any TRO or writ of preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao led a petition for certiorari in
the Court of Appeals, docketed as CA-G.R. SP No. 62461, questioning this time the
October 30, 2000 order of the intestate court directing the branch clerk of court to issue
the stock certi cates. They also questioned in the Court of Appeals the order of the
intestate court nullifying the sale made in their favor by Juliana Ortañez and Jose Ortañez.
On November 20, 2002, the Court of Appeals denied their petition and upheld the power of
the intestate court to execute its order. Petitioners Lee and Aggabao then led motion for
reconsideration which at present is still pending resolution by the Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) and FLAG now raise the following errors for our consideration:
THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR:
A. IN FAILING TO RECONSIDER ITS PREVIOUS RESOLUTION DENYING
THE PETITION DESPITE THE FACT THAT THE APPELLATE
COURT'S MISTAKE IN APPREHENDING THE FACTS HAD BECOME
PATENT AND EVIDENT FROM THE MOTION FOR
RECONSIDERATION AND THE COMMENT OF RESPONDENT
ENDERES WHICH HAD ADMITTED THE FACTUAL ALLEGATIONS OF
PETITIONERS IN THE PETITION AS WELL AS IN THE MOTION FOR
RECONSIDERATION. MOREOVER, THE RESOLUTION OF THE
APPELLATE COURT DENYING THE MOTION FOR
RECONSIDERATION WAS CONTAINED IN ONLY ONE PAGE
WITHOUT EVEN TOUCHING ON THE SUBSTANTIVE MERITS OF
THE EXHAUSTIVE DISCUSSION OF FACTS AND SUPPORTING LAW
IN THE MOTION FOR RECONSIDERATION IN VIOLATION OF THE
RULE ON ADMINISTRATIVE DUE PROCESS;
B. IN FAILING TO SET ASIDE THE VOID ORDERS OF THE INTESTATE
COURT ON THE ERRONEOUS GROUND THAT THE ORDERS WERE
FINAL AND EXECUTORY WITH REGARD TO PETITIONERS EVEN AS
THE LATTER WERE NEVER NOTIFIED OF THE PROCEEDINGS OR
ORDER CANCELING ITS OWNERSHIP;
C. IN NOT FINDING THAT THE INTESTATE COURT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF
JURISDICTION (1) WHEN IT ISSUED THE OMNIBUS ORDER
NULLIFYING THE OWNERSHIP OF PETITIONER FLAG OVER
SHARES OF STOCK WHICH WERE ALLEGED TO BE PART OF THE
ESTATE AND (2) WHEN IT ISSUED A VOID WRIT OF EXECUTION
AGAINST PETITIONER FLAG AS PRESENT OWNER TO IMPLEMENT
MERELY PROVISIONAL ORDERS, THEREBY VIOLATING FLAG'S
CONSTITUTIONAL RIGHT AGAINST DEPRIVATION OF PROPERTY
WITHOUT DUE PROCESS;
D. IN FAILING TO DECLARE NULL AND VOID THE ORDERS OF THE
INTESTATE COURT WHICH NULLIFIED THE SALE OF SHARES OF
STOCK BETWEEN THE LEGITIMATE HEIR JOSE S. ORTAÑEZ AND
PETITIONER FLAG BECAUSE OF SETTLED LAW AND
JURISPRUDENCE, I.E., THAT AN HEIR HAS THE RIGHT TO DISPOSE
OF THE DECEDENT'S PROPERTY EVEN IF THE SAME IS UNDER
ADMINISTRATION PURSUANT TO CIVIL CODE PROVISION THAT
POSSESSION OF HEREDITARY PROPERTY IS TRANSMITTED TO
THE HEIR THE MOMENT OF DEATH OF THE DECEDENT (ACEDEBO
VS. ABESAMIS, 217 SCRA 194);
E. IN DISREGARDING THE FINAL DECISION OF THE SUPREME COURT
IN G.R. NO. 128525 DATED DECEMBER 17, 1999 INVOLVING
SUBSTANTIALLY THE SAME PARTIES, TO WIT, PETITIONERS JOSE
C. LEE AND ALMA AGGABAO WERE RESPONDENTS IN THAT CASE
WHILE RESPONDENT MA. DIVINA ENDERES WAS THE PETITIONER
THEREIN. THAT DECISION, WHICH CAN BE CONSIDERED LAW OF
THE CASE, RULED THAT PETITIONERS CANNOT BE ENJOINED BY
RESPONDENT ENDERES FROM EXERCISING THEIR POWER AS
DIRECTORS AND OFFICERS OF PHILINTERLIFE AND THAT THE
INTESTATE COURT IN CHARGE OF THE INTESTATE PROCEEDINGS
CANNOT ADJUDICATE TITLE TO PROPERTIES CLAIMED TO BE
PART OF THE ESTATE AND WHICH ARE EQUALLY CLAIMED BY
PETITIONER FLAG. 1 7
The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG, assail
before us not only the validity of the writ of execution issued by the intestate court dated
July 7, 2000 but also the validity of the August 11, 1997 order of the intestate court
nullifying the sale of the 2,029 Philinterlife shares of stock made by Juliana Ortañez and
Jose Ortañez, in their personal capacities and without court approval, in favor of petitioner
FLAG.
We cannot allow petitioners to reopen the issue of nullity of the sale of the
Philinterlife shares of stock in their favor because this was already settled a long time ago
by the Court of Appeals in its decision dated June 23, 1998 in CA-G.R. SP No. 46342. This
decision was effectively upheld by us in our resolution dated October 9, 1998 in G.R. No.
135177 dismissing the petition for review on a technicality and thereafter denying the
motion for reconsideration on January 13, 1999 on the ground that there was no
compelling reason to reconsider said denial. 1 8 Our decision became nal on February 23,
1999 and was accordingly entered in the book of entry of judgments. For all intents and
purposes therefore, the nullity of the sale of the Philinterlife shares of stock made by
Juliana Ortañez and Jose Ortañez in favor of petitioner FLAG is already a closed case. To
reopen said issue would set a bad precedent, opening the door wide open for dissatis ed
parties to relitigate unfavorable decisions no end. This is completely inimical to the orderly
and efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No. 46342 a rming the
nullity of the sale made by Jose Ortañez and his mother Juliana Ortañez of the Philinterlife
shares of stock read:
Petitioner's asseverations relative to said [memorandum] agreement were
scuttled during the hearing before this Court thus:
JUSTICE AQUINO:
Counsel for petitioner, when the Memorandum of Agreement was executed,
did the children of Juliana Salgado know already that there was a claim
for share in the inheritance of the children of Novicio?
ATTY. CALIMAG:
Your Honor please, at that time, Your Honor, it is already known to them. acTDCI
JUSTICE AQUINO:
What can be your legal justi cation for extrajudicial settlement of a property
subject of intestate proceedings when there is an adverse claim of another
set of heirs, alleged heirs? What would be the legal justi cation for extra
judicially settling a property under administration without the approval of
the intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement there is an approval
of the honorable court as to the property's partition . . .. There were as
mentioned by the respondents' counsel, Your Honor.
ATTY. BUYCO:
No . . .
JUSTICE AQUINO:
The point is, there can be no adjudication of a property under intestate
proceedings without the approval of the court. That is basic unless you
can present justi cation on that. In fact, there are two steps: rst, you ask
leave and then execute the document and then ask for approval of the
document executed. Now, is there any legal justi cation to exclude this
particular transaction from those steps?
ATTY. CALIMAG:
None, Your Honor.
ATTY. BUYCO:
With that admission that there is no legal justi cation, Your Honor, we rest
the case for the private respondent. How can the lower court be accused of
abusing its discretion? (pages 33-35, TSN of January 29, 1998).
Thus, We find merit in the following postulation by private respondent:
What we have here is a situation where some of the heirs of the
decedent without securing court approval have appropriated as their own
personal property the properties of [the] Estate, to the exclusion and the
extreme prejudice of the other claimant/heirs. In other words, these heirs,
without court approval, have distributed the asset of the estate among
themselves and proceeded to dispose the same to third parties even in the
absence of an order of distribution by the Estate Court. As admitted by
petitioner's counsel, there was absolutely no legal justi cation for this
action by the heirs. There being no legal justi cation, petitioner has no
basis for demanding that public respondent [the intestate court] approve
the sale of the Philinterlife shares of the Estate by Juliana and Jose
Ortañez in favor of the Filipino Loan Assistance Group.
It is an undisputed fact that the parties to the Memorandum of
Agreement dated March 4, 1982 (see Annex 7 of the Comment) . . . are not
the only heirs claiming an interest in the estate left by Dr. Juvencio P.
Ortañez. The records of this case . . . clearly show that as early as March 3,
1981 an Opposition to the Application for Issuance of Letters of
Administration was led by the acknowledged natural children of Dr.
Juvencio P. Ortañez with Ligaya Novicio . . . This claim by the
acknowledged natural children of Dr. Juvencio P. Ortañez is admittedly
known to the parties to the Memorandum of Agreement before they
executed the same. This much was admitted by petitioner's counsel during
the oral argument. . . .
Given the foregoing facts, and the applicable jurisprudence, public
respondent can never be faulted for not approving . . . the subsequent sale
by the petitioner [Jose Ortañez] and his mother [Juliana Ortañez] of the
Philinterlife shares belonging to the Estate of Dr. Juvencio P. Ortañez."
(pages 3-4 of Private Respondent's Memorandum; pages 243-244 of the
Rollo)
Amidst the foregoing, We found no grave abuse of discretion amounting to
excess or want of jurisdiction committed by respondent judge. 1 9
From the above decision, it is clear that Juliana Ortañez, and her three sons, Jose,
Rafael and Antonio, all surnamed Ortañez, invalidly entered into a memorandum of
agreement extrajudicially partitioning the intestate estate among themselves, despite their,
knowledge that there were other heirs or claimants to the estate and before nal
settlement of the estate by the intestate court. Since the appropriation of the estate
properties by Juliana Ortañez and her children (Jose, Rafael and Antonio Ortañez) was
invalid, the subsequent sale thereof by Juliana and Jose to a third party (FLAG), without
court approval, was likewise void.
An heir can sell his right, interest, or participation in the property under
administration under Art. 533 of the Civil Code which provides that possession of
hereditary property is deemed transmitted to the heir without interruption from the
moment of death of the decedent. 2 0 However, an heir can only alienate such portion of the
estate that may be allotted to him in the division of the estate by the probate or intestate
court after nal adjudication, that is, after all debtors shall have been paid or the devisees
or legatees shall have been given their shares. 2 1 This means that an heir may only sell his
ideal or undivided share in the estate, not any speci c property therein. In the present case,
Juliana Ortañez and Jose Ortañez sold speci c properties of the estate (1,014 and 1,011
shares of stock in Philinterlife) in favor of petitioner FLAG. This they could not lawfully do
pending the nal adjudication of the estate by the intestate court because of the undue
prejudice it would cause the other claimants to the estate, as what happened in the
present case.
Juliana Ortañez and Jose Ortañez sold speci c properties of the estate, without
court approval. It is well-settled that court approval is necessary for the validity of any
disposition of the decedent's estate. In the early case of Godoy vs. Orellano, 2 2 we laid
down the rule that the sale of the property of the estate by an administrator without the
order of the probate court is void and passes no title to the purchaser. And in the case of
Dillena vs. Court of Appeals, 2 3 we ruled that:
[I]t must be emphasized that the questioned properties ( shpond) were
included in the inventory of properties of the estate submitted by then
Administratrix Fausta Carreon Herrera on November 14, 1974. Private respondent
was appointed as administratrix of the estate on March 3, 1976 in lieu of Fausta
Carreon Herrera. On November 1, 1978, the questioned deed of sale of the
shponds was executed between petitioner and private respondent without notice
and approval of the probate court. Even after the sale, administratrix Aurora
Carreon still included the three shponds as among the real properties of the
estate in her inventory submitted on August 13, 1981. In fact, as stated by the
Court of Appeals, petitioner, at the time of the sale of the shponds in question,
knew that the same were part of the estate under administration.
xxx xxx xxx

The subject properties therefore are under the jurisdiction of the probate
court which according to our settled jurisprudence has the authority to approve
any disposition regarding properties under administration . . . More emphatic is
the declaration We made in Estate of Olave vs. Reyes (123 SCRA 767) where We
stated that when 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.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174),
We held that the sale of an immovable property belonging to the estate of a
decedent, in a special proceedings, needs court approval . . . This pronouncement
nds support in the previous case of Dolores Vda. De Gil vs. Agustin Cancio (14
SCRA 797) wherein We emphasized that it is within the jurisdiction of a probate
court to approve the sale of properties of a deceased person by his prospective
heirs before final adjudication. . . .
It being settled that property under administration needs the approval of
the probate court before it can be disposed of, any unauthorized disposition does
not bind the estate and is null and void. As early as 1921 in the case of Godoy vs.
Orellano (42 Phil 347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate court is null and
void and title does not pass to the purchaser.
There is hardly any doubt that the probate court can declare null and void
the disposition of the property under administration, made by private respondent,
the same having been affected without authority from said court. It is the probate
court that has the power to authorize and/or approve the sale (Section 4 and 7,
Rule 89), hence, a fortiori, it is said court that can declare it null and void for as
long as the proceedings had not been closed or terminated. To uphold petitioner's
contention that the probate court cannot annul the unauthorized sale, would
render meaningless the power pertaining to the said court. (Boñaga vs. Soler, 2
SCRA 755). (emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of estate property by an
administrator or prospective heir pending nal adjudication requires court approval and
(2) any unauthorized disposition of estate property can be annulled by the probate court,
there being no need for a separate action to annul the unauthorized disposition.
The question now is: can the intestate or probate court execute its order nullifying
the invalid sale?
We see no reason why it cannot. The intestate court has the power to execute its
order with regard to the nullity of an unauthorized sale of estate property, otherwise its
power to annul the unauthorized or fraudulent disposition of estate property would be
meaningless. In other words, enforcement is a necessary adjunct of the intestate or
probate court's power to annul unauthorized or fraudulent transactions to prevent the
dissipation of estate property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the sale was
a rmed by the appellate courts (the Court of Appeals in CA-G.R. SP No. 46342 dated June
23, 1998 and subsequently by the Supreme Court in G.R. No. 135177 dated October 9,
1998). The nality of the decision of the Supreme Court was entered in the book of entry
of judgments on February 23, 1999. Considering the nality of the order of the intestate
court nullifying the sale, as a rmed by the appellate courts, it was correct for private
respondent-Special Administratrix Enderes to thereafter move for a writ of execution and
for the intestate court to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the probate
court could not issue a writ of execution with regard to its order nullifying the sale because
said order was merely provisional:
The only authority given by law is for respondent judge to determine
provisionally whether said shares are included or excluded in the inventory . . . In
ordering the execution of the orders, respondent judge acted in excess of his
jurisdiction and grossly violated settled law and jurisprudence, i.e., that the
determination by a probate or intestate court of whether a property is included or
excluded in the inventory of the estate being provisional in nature, cannot be the
subject of execution. 2 4 (emphasis ours)
Petitioners' argument is misplaced. There is no question, based on the facts of this
case, that the Philinterlife shares of stock were part of the estate of Dr. Juvencio Ortañez
from the very start as in fact these shares were included in the inventory of the properties
of the estate submitted by Rafael Ortañez after he and his brother, Jose Ortañez, were
appointed special administrators by the intestate court. 2 5
The controversy here actually started when, during the pendency of the settlement
of the estate of Dr. Ortañez, his wife Juliana Ortañez sold the 1,014 Philinterlife shares of
stock in favor petitioner FLAG without the approval of the intestate court. Her son Jose
Ortañez later sold the remaining 1,011 Philinterlife shares also in favor of FLAG without the
approval of the intestate court.

We are not dealing here with the issue of inclusion or exclusion of properties in the
inventory of the estate because there is no question that, from the very start, the
Philinterlife shares of stock were owned by the decedent, Dr. Juvencio Ortañez. Rather, we
are concerned here with the effect of the sale made by the decedent's heirs, Juliana
Ortañez and Jose Ortañez, without the required approval of the intestate court. This being
so, the contention of petitioners that the determination of the intestate court was merely
provisional and should have been threshed out in a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the writ of execution
should not be executed against them because they were not noti ed, nor they were aware,
of the proceedings nullifying the sale of the shares of stock.
We are not persuaded. The title of the purchaser like herein petitioner FLAG can be
struck down by the intestate court after a clear showing of the nullity of the alienation. This
is the logical consequence of our ruling in Godoy and in several subsequent cases. 2 6 The
sale of any property of the estate by an administrator or prospective heir without order of
the probate or intestate court is void and passes no title to the purchaser. Thus, in Juan
Lao et al. vs. Hon. Melencio Genato, G.R. No. 56451, June 19, 1985, we ordered the probate
court to cancel the transfer certi cate of title issued to the vendees at the instance of the
administrator after nding that the sale of real property under probate proceedings was
made without the prior approval of the court. The dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated
February 18, 1981 of the respondent Judge approving the questioned Amicable
Settlement is declared NULL and VOID and hereby SET ASIDE. Consequently, the
sale in favor of Sotero Dioniosio III and by the latter to William Go is likewise
declared NULL and VOID. The Transfer Certi cate of Title issued to the latter is
hereby ordered cancelled.
It goes without saying that the increase in Philinterlife's authorized capital stock,
approved on the vote of petitioners' non-existent shareholdings and obviously calculated
to make it di cult for Dr. Ortañez's estate to reassume its controlling interest in
Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them, did not appeal the
decision of the intestate court nullifying the sale of shares of stock in their favor. Only the
vendor, Jose Ortañez, appealed the case. A careful review of the records shows that
petitioners had actual knowledge of the estate settlement proceedings and that they knew
private respondent Enderes was questioning therein the sale to them of the Philinterlife
shares of stock. acAIES
It must be noted that private respondent-Special Administratrix Enderes led before

the intestate court (RTC of Quezon City, Branch 85) a "Motion to Declare Void Ab Initio
Deeds of Sale of Philinterlife Shares of Stock" on March 22, 1996. But as early as 1994,
petitioners already knew of the pending settlement proceedings and that the shares they
bought were under the administration by the intestate court because private respondent
Ma. Divina Ortañez-Enderes and her mother Ligaya Novicio had filed a case against them at
the Securities and Exchange Commission on November 7, 1994, docketed as SEC No. 11-
94-4909, for annulment of transfer of shares of stock, annulment of sale of corporate
properties, annulment of subscriptions on increased capital stocks, accounting, inspection
of corporate books and records and damages with prayer for a writ of preliminary
injunction and/or temporary restraining order. 2 7 In said case, Enderes and her mother
questioned the sale of the aforesaid shares of stock to petitioners. The SEC hearing
o cer in fact, in his resolution dated March 24, 1995, deferred to the jurisdiction of the
intestate court to rule on the validity of the sale of shares of stock sold to petitioners by
Jose Ortañez and Juliana Ortañez:
Petitioners also averred that . . . the Philinterlife shares of Dr. Juvencio
Ortañez who died, in 1980, are part of his estate which is presently the subject
matter of an intestate proceeding of the RTC of Quezon City, Branch 85. Although,
private respondents [Jose Lee et al.] presented the documents of partition
whereby the foregoing share of stocks were allegedly partitioned and conveyed to
Jose S. Ortañez who allegedly assigned the same to the other private
respondents, approval of the Court was not presented. Thus, the assignments to
the private respondents [Jose Lee, et al.] of the subject shares of stocks are void.
xxx xxx xxx
With respect to the alleged extrajudicial partition of the shares of stock

owned by the late Dr. Juvencio Ortañez, we rule that the matter properly belongs
to the jurisdiction of the regular court where the intestate proceedings are
currently pending. 2 8
With this resolution of the SEC hearing o cer dated as early as March 24, 1995
recognizing the jurisdiction of the intestate court to determine the validity of the
extrajudicial partition of the estate of Dr. Ortañez and the subsequent sale by the heirs of
the decedent of the Philinterlife shares of stock to petitioners, how can petitioners claim
that they were not aware of the intestate proceedings?
Furthermore, when the resolution of the SEC hearing o cer reached the Supreme
Court in 1996 (docketed as G.R. 128525), herein petitioners who were respondents therein
led their answer which contained statements showing that they knew of the pending
intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction of the
SEC but with the Regional Trial Court; Ligaya Novicio and children represented
themselves to be the common law wife and illegitimate children of the late
Ortañez; that on March 4, 1982, the surviving spouse Juliana Ortañez, on her
behalf and for her minor son Antonio, executed a Memorandum of Agreement
with her other sons Rafael and Jose, both surnamed Ortañez, dividing the estate
of the deceased composed of his one-half (1/2) share in the conjugal properties;
that in the said Memorandum of Agreement, Jose S. Ortañez acquired as his
share of the estate the 1,329 shares of stock in Philinterlife; that on March 4,
1982, Juliana and Rafael assigned their respective shares of stock in Philinterlife
to Jose; that contrary to the contentions of petitioners, private respondents Jose
Lee, Carlos Lee, Benjamin Lee and Alma Aggabao became stockholders of
Philinterlife on March 23, 1983 when Jose S. Ortañez, the principal stockholder at
that time, executed a deed of sale of his shares of stock to private respondents;
and that the right of petitioners to question the Memorandum of Agreement and
the acquisition of shares of stock of private respondent is barred by prescription.
29
Also, private respondent-Special Administratrix Enderes offered additional proof of

actual knowledge of the settlement proceedings by petitioners which petitioners never
denied: (1) that petitioners were represented by Atty. Ricardo Calimag previously hired by
the mother of private respondent Enderes to initiate cases against petitioners Jose Lee
and Alma Aggabao for the nulli cation of the sale of the shares of stock but said counsel
made a con icting turn-around and appeared instead as counsel of petitioners, and (2)
that the deeds of sale executed between petitioners and the heirs of the decedent
(vendors Juliana Ortañez and Jose Ortañez) were acknowledged before Atty. Ramon
Carpio who, during the pendency of the settlement proceedings, led a motion for the
approval of the sale of Philinterlife shares of stock to the Knights of Columbus Fraternal
Association, Inc. (which motion was, however, later abandoned). 3 0 All this su ciently
proves that petitioners, through their counsels, knew of the pending settlement
proceedings.
Finally, petitioners led several criminal cases such as libel (Criminal Case No. 97-
7179-81), grave coercion (Criminal Case No. 84624) and robbery (Criminal Case No. Q-96-
67919) against private respondent's mother Ligaya Novicio who was a director of
Philinterlife, 3 1 all of which criminal cases were related to the questionable sale to
petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners' claim of denial of
due process. The essence of due process is the reasonable opportunity to be heard.
Where the opportunity to be heard has been accorded, there is no denial of due process. 3 2
In this case, petitioners knew of the pending intestate proceedings for the settlement of
Dr. Juvencio Ortañez's estate but for reasons they alone knew, they never intervened. When
the court declared the nullity of the sale, they did not bother to appeal. And when they were
noti ed of the motion for execution of the Orders of the intestate court, they ignored the
same. Clearly, petitioners alone should bear the blame.
Petitioners next contend that we are bound by our ruling in G.R. No. 128525 entitled
Ma. Divina Ortañez-Enderes vs. Court of Appeals, dated December 17, 1999, where we
allegedly ruled that the intestate court "may not pass upon the title to a certain property for
the purpose of determining whether the same should or should not be included in the
inventory but such determination is not conclusive and is subject to nal decision in a
separate action regarding ownership which may be constituted by the parties."
We are not unaware of our decision in G.R. No. 128525. The issue therein was
whether the Court of Appeals erred in a rming the resolution of the SEC that Enderes et
al. were no, entitled to the issuance, of the writ of preliminary injunction. We ruled that the
Court of Appeals was correct in a rming the resolution of the SEC denying the issuance
of the writ of preliminary injunction because injunction is not designed to protect
contingent rights. Said case did not rule on the issue of the validity of the sale of shares of
stock belonging to the decedent's estate without court approval nor of the validity of the
writ of execution issued by the intestate court. G.R. No. 128525 clearly involved a different
issue and it does not therefore apply to the present case.
Petitioners and all parties claiming rights under them are hereby warned not to
further delay the execution of the Orders of the intestate court dated August 11 and
August 29, 1997.
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in
CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing petitioners' petition for certiorari
and a rming the July 6, 2000 order of the trial court which ordered the execution of its
(trial court's) August 11 and 29, 1997 orders, is hereby AFFIRMED.
SO ORDERED.
Vitug and Carpio Morales, JJ., concur.
Sandoval-Gutierrez, J., took no part.
Footnotes
1. Penned by Associate Justice Martin S. Villarama, concurred in by Associate Justices
Salome A. Montoya (Chairman of the First Division) and Romeo Callejo, Sr. (now
Associate Justice of the Supreme Court).
2. Recognized by the decedent, Dr. Juvencio P. Ortañez and declared by the intestate court
as lawful heirs of Dr. Ortañez in its resolution dated September 22, 2000; Rollo, pp. 203-
214.
3. Inventory and Accounting of Properties of the Estate; Rollo, p. 572.
4. Deed of Sale with Right to Repurchase; Rollo, pp. 55-56.

5. Deed of Sale of Shares of Stock; Rollo, pp. 57-58.
6. Rollo, pp. 39-41.

7. Cited in the decision of the Court of Appeals dated June 23, 1998 in CA-G.R. SP No.
46842, p. 3; Rollo, p. 240.
8. Rollo, pp. 238-258.

9. Rollo, p. 709.
10. Rollo, pp. 524-526.
11. Rollo, p. 70.
12. Rollo, p. 47-48.
13. Rollo, pp. 266-268.
14. Rollo, pp. 34-35.
15. Rollo, p. 38.
16. Rollo, p. 115.
17. Rollo, pp. 15-17.
18. Rollo, pp. 260-262.
19. Rollo, pp. 254-256.
20. Acebedo vs. Abesamis, 217 SCRA 186 [1993], citing Vda. De Gil vs. Cancio, 14 SCRA
796 [1965].
21. Based on the Civil Code provisions on co-ownership (Article 493). Acebedo vs.
Abesamis, 217 SCRA 186 [1993], citing Reyes vs. Concepcion, 190 SCRA 171 [1990],
PNB vs. Court of Appeals, 98 SCRA 207 [1980], Mercado vs. Liwanag, 5 SCRA 472
[1962].
22. 42 Phil 347 (1921].

23. 163 SCRA 631 (1988].
24. Rollo, pp. 603-604.
25. Inventory and Accounting of Properties of the Estate dated March 13, 1984, Rollo, pp.
571-754.
26. Dillena vs. Court of Appeals, 163 SCRA 630 [1988]; Manotok Realty vs. Court of
Appeals, 149 SCRA 174 [1987]; Leabres vs. Court of Appeals, 146 SCRA 158 [1986];
Estate of Olave vs. Reyes, 123 SCRA 767 [1983] and Vda. De Gil vs. Cancio, 14 SCRA 797
[1965].
27. Cited in Ma. Divina Ortañez-Enderes et al. vs. Court of Appeals et al., 321 SCRA 178
(1999].
28. Rollo, pp. 147-149.
29. Rollo, p. 136.
30. Rollo, pp. 728-729.
31. Rollo, pp. 524-526.
32. Salonga vs. Court of Appeals, 269 SCRA 534 [1997].

Succession Cases B August 5, 2020-1 PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Succession Cases B August 5, 2020-1 PDF

Uploaded by

Copyright:

Available Formats

EN BANC

[G.R. No. L-8437. November 28, 1956.]

ESTATE OF K. H. HEMADY , deceased, vs . LUZON SURETY CO., INC. ,

Claro M. Recto for appellee.

1. CONTRACTS; BINDING EFFECT OF CONTRACTS UPON HEIRS OF

CD Technologies Asia, Inc. 2018 cdasiaonline.com

[G.R. No. L-41715. June 18, 1976.]

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and

Federico Paredes for petitioners.

1. CIVIL PROCEDURES; DEATH OF A PARTY; SUBSTITUTION OF PARTIES. —

4. Ibarle vs. Po, 92 Phil. 721.

CD Technologies Asia, Inc. © 2018 cdasiaonline.com

[G.R. No. L-28040. August 18, 1972.]

TESTATE ESTATE OF JOSEFA TANGCO JOSE DE BORJA ,

[G.R. No. L-28568.]

TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O.

[G.R. No. L-28611.]

TASIANA O. VDA. DE DE BORJA, as Administratrix of the Testate

Pelaez, Jalandoni & Jamir for administrator-appellee.

1. CIVIL LAW; WILLS AND SUCCESSION; HEREDITARY SHARE IN ESTATE

3. That Tasiana Ongsinco Vda. de de Borja hereby assumes payment

4. Thereafter, the buyer of Jalajala 'Poblacion' is hereby authorized to

5. In consideration of above payment to Tasiana Ongsingco Vda. de

CD Technologies Asia, Inc. © 2018 cdasiaonline.com

It is argued by Tasiana Ongsingco that while the agreement Annex A expressed

Ongsingco's argument loses validity when it is considered that Jose de Borja

If a sale of a hereditary right can be made to a stranger, then a fortiori sale

On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate

Defendant Jose de Borja further counterclaimed for damages, compensatory,

xxx xxx xxx

We nd the conclusions of the lower court to be untenable. In the rst place,

CD Technologies Asia, Inc. © 2018 cdasiaonline.com

[G.R. No. 68053. May 7, 1990.]

LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ ,

Francisco G. Banzon for petitioners.

WHEREFORE, judgment is rendered, ordering the defendant Rosendo

"IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby

As correctly ruled by the Court of Appeals, it is powerless and for that

Such contention is untenable for it overlooks the doctrine obtaining in this

1. TSN, October 17, 1973, pp. 4-5.

2. TSN, December 11, 1973, pp. 11 & 55.

CD Technologies Asia, Inc. © 2016 cdasiaonline.com

14. Exhibits 10, 11, 14 and 15.

18. Cad. Case No. 6; Exhibit 3.

34. Rollo, p. 27.

CD Technologies Asia, Inc. © 2016 cdasiaonline.com

CD Technologies Asia, Inc. © 2016 cdasiaonline.com

[G.R. No. L-4963. January 29, 1953.]

MARIA USON , plaintiff-appellee, vs . MARIA DEL ROSARIO,

Priscilo Evangelista for appellee.

1. DESCENT AND DISTRIBUTION; HUSBAND AND WIFE; RIGHTS OF LAWFUL

CD Technologies Asia, Inc. 2018 cdasiaonline.com

[G.R. No. 146006. February 23, 2004.]

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President

The antecedent facts follow.

WHEREFORE, the OMNIBUS MOTION for the approval of the sale of

WHEREFORE, this Court hereby declares the Memorandum of Agreement

On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings

5. Directing Philinterlife and/or any other person or persons claiming

CD Technologies Asia, Inc. © 2020 cdasiaonline.com

2. The certi cation on non-forum shopping is signed by only one (1) of

The petition has no merit.