Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-68053 May 7, 1990

LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,

vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES,
ANTONIO YANES, ROSARIO YANES, and ILUMINADO YANES, respondents.

Francisco G. Banzon for petitioner.

Renecio R. Espiritu for private respondents.

FERNAN, C.J.:

This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division
of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v.
Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of Negros
Occidental insofar as it ordered the petitioners to pay jointly and severally the private respondents the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental and reversing the subject decision insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00
as actual damages, moral damages and attorney's fees, respectively and (b) the resolution of said appellate court
dated May 30, 1984, denying the motion for reconsideration of its decision.

The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally
known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square
meters, was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858
(8804) issued on October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A).

Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita,
Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio and
Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib. 1 It is not clear why
the latter is not included as a party in this case.

Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not attend
to the other portions of the two lots which had a total area of around twenty-four hectares. The record does not show
whether the children of Felipe also cultivated some portions of the lots but it is established that Rufino and his
children left the province to settle in other places as a result of the outbreak of World War II. According to Estelita,
from the "Japanese time up to peace time", they did not visit the parcels of land in question but "after liberation",
when her brother went there to get their share of the sugar produced therein, he was informed that Fortunato
Santiago, Fuentebella (Puentevella) and Alvarez were in possession of Lot 773. 2

It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694
(29797) covering Lot 773-A with an area of 37,818 square meters. 3 TCT No. RF 2694 describes Lot 773-A as a
portion of Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804.
The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of Fortunato D.
Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ). 4 Said transfer certificate of title also contains a
certification to the effect that Lot 773-B was originally registered under OCT No. 8804.

On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum of
P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebella's
name. 6

After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de
Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a
motion requesting authority to sell Lots 773-A and 773-B. 7 By virtue of a court order granting said motion, 8 on
March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1,
1958 TCT Nos. T-23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo
Alvarez. 10

Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita,
Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato
Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of
the ownership and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the land
from 1944 up to the filing of the complaint be made by the defendants, that after court approval of said accounting,
the share or money equivalent due the plaintiffs be delivered to them, and that defendants be ordered to pay
plaintiffs P500.00 as damages in the form of attorney's fees. 11

During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another
lot for P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos. 30919 and 30920 were issued to Siason, 13 who
thereafter, declared the two lots in his name for assessment purposes. 14

Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs, and assisted
by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce, forfeit and
quitclaims (sic) any claim, monetary or otherwise, against the defendant Arsenia Vda. de Fuentebella in connection
with the above-entitled case." 15

On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case No.
5022, the dispositive portion of which reads:

WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the
plaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now
covered by Transfer Certificates of Title Nos. T-23165 and T-23166 in the name of said
defendant, and thereafter to deliver the possession of said lots to the plaintiffs. No special
pronouncement as to costs.

SO ORDERED. 16

It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid decision.

However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated
October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and 773-B;
that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773 could not
be delivered to the plaintiffs as Siason was "not a party per writ of execution." 17

The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the
Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a
new certificate of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo
Alvarez. 18 Thereafter, the court required Rodolfo Siason to produce the certificates of title covering Lots 773 and
823.

Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and
823, "in good faith and for a valuable consideration without any knowledge of any lien or encumbrances against said
properties"; that the decision in the cadastral proceeding 19 could not be enforced against him as he was not a party
thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only because he was
not a party-litigant therein but also because it had long become final and executory. 20 Finding said manifestation to
be well-founded, the cadastral court, in its order of September 4, 1965, nullified its previous order requiring Siason
to surrender the certificates of title mentioned therein. 21

In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022.
Siason opposed it. 22 In its order of September 28, 1968 in Civil Case No. 5022, the lower court, noting that the
Yaneses had instituted another action for the recovery of the land in question, ruled that at the judgment therein
could not be enforced against Siason as he was not a party in the case. 23

The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages. 24 Named
defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of
Deeds of Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to
Siason (sic) for being null and void; the issuance of a new certificate of title in the name of the Yaneses "in
accordance with the sheriffs return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773 to
the Yaneses; and if, delivery thereof could not be effected, or, if the issuance of a new title could not be made, that
the Alvarez and Siason jointly and severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason
render an accounting of the fruits of Lot 773 from November 13, 1961 until the filing of the complaint; and that the
defendants jointly and severally pay the Yaneses moral damages of P20,000.00 and exemplary damages of
P10,000.00 plus attorney's fees of P4, 000.00. 25

In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been
passed upon by the court in its order of September 4, 1965, had become res judicata and the Yaneses were estopped
from questioning said order. 26 On their part, the Alvarez stated in their answer that the Yaneses' cause of action had
been "barred by res judicata, statute of limitation and estoppel." 27

In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in question
thru an agent as he was then in Mexico pursuing further medical studies, was a buyer in good faith for a valuable
consideration. Although the Yaneses were negligent in their failure to place a notice of lis pendens "before the
Register of Deeds of Negros Occidental in order to protect their rights over the property in question" in Civil Case
No. 5022, equity demanded that they recover the actual value of the land because the sale thereof executed between
Alvarez and Siason was without court approval. 28 The dispositive portion of the decision states:

IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the

following manner:

A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby
dismmissed,

B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate
children of the deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the
plaintiffs the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of
Murcia Cadastre, Negros Occidental; the sum of P2,000.00 as actual damages suffered by the
plaintiff; the sum of P5,000.00 representing moral damages and the sum of P2.000 as attorney's
fees, all with legal rate of interest from date of the filing of this complaint up to final payment.

C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora
and Raymundo, all surnamed Alvarez is hereby dismissed.
 D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the
costs of this suit.

SO ORDERED. 29

The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31, 1983 30 affirmed
the lower court's decision "insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffs-
appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey
of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00
as actual damages, moral damages and attorney's fees, respectively." 31 The dispositive portion of said decision
reads:

WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants

to pay jointly and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual
value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is
reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages,
moral damages and attorney's fees, respectively. No costs.

SO ORDERED. 32

Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same.

Hence, the instant petition. ln their memorandum petitioners raised the following issues:

1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked
and raised by the petitioners in the lower court.

2. Whether or not the cause and/or causes of action of the private respondents, if ever there are
any, as alleged in their complaint dated February 21, 1968 which has been docketed in the trial
court as Civil Case No. 8474 supra, are forever barred by statute of limitation and/or prescription
of action and estoppel.

3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father
of the petitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil
Case No. 8474, supra where the private respondents had unqualifiedly and absolutely waived,
renounced and quitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos.
773-A and 773-B of Murcia Cadastre as appearing in their written manifestation dated November
6, 1962 (Exhibits "4" Siason) which had not been controverted or even impliedly or indirectly
denied by them.

4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos.
773-A and 773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally
passed or transmitted by operations (sic) of law to the petitioners without violation of law and due
process . 33

The petition is devoid of merit.

As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review the
decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents. Said
decision had long become final and executory and with the possible exception of Dr. Siason, who was not a party to
said case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended when
Alvarez or his heirs failed to appeal the decision against them. 34
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them
in law or estate. 35 As consistently ruled by this Court, every litigation must come to an end. Access to the court is
guaranteed. But there must be a limit to it. Once a litigant's right has been adjudicated in a valid final judgment of a
competent court, he should not be granted an unbridled license to return for another try. The prevailing party should
not be harassed by subsequent suits. For, if endless litigation were to be allowed, unscrupulous litigations will
multiply in number to the detriment of the administration of justice. 36

There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in Civil
Case No. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have been
illegally deprived of ownership and possession of the lots in question. 37 In fact, Civil Case No. 8474 now under
review, arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private
respondents Yaneses, the same having been sold during the pendency of the case by the petitioners' father to Dr.
Siason who did not know about the controversy, there being no lis pendens annotated on the titles. Hence, it was
also settled beyond question that Dr. Siason is a purchaser in good faith.

Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on
November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil
Case No. 5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the actual
value of the subdivided lots in dispute. It did not order defendant Siason to pay said amount. 38

As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose
property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for
value, for damages. 39 "It is one thing to protect an innocent third party; it is entirely a different matter and one
devoid of justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious
decided As clearly revealed by the undeviating line of decisions coming from this Court, such an undesirable
eventuality is precisely sought to be guarded against." 40

The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor
of private respondents, it cannot now be reopened in the instant case on the pretext that the defenses of prescription
and estoppel have not been properly considered by the lower court. Petitioners could have appealed in the former
case but they did not. They have therefore foreclosed their rights, if any, and they cannot now be heard to complain
in another case in order to defeat the enforcement of a judgment which has longing become final and executory.

Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo
Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his
death.

Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus, the pertinent
provisions of the Civil Code state:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance, of a person are transmitted through his
death to another or others either by his will or by operation of law.

Art. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.

Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case
where the rights and obligations arising from the contract are not transmissible by their nature, or
by stipulation or by provision of law. The heir is not liable beyond the value of the property
received from the decedent.
As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon Surety
Co., Inc.  41

The binding effect of contracts upon the heirs of the deceased party is not altered by the provision
of our Rules of Court that money debts of a deceased must be liquidated and paid from his estate
before the residue is distributed among said heirs (Rule 89). The reason is that whatever payment
is thus made from the state is ultimately a payment by the heirs or distributees, since the amount of
the paid claim in fact diminishes or reduces the shares that the heirs would have been entitled to
receive.

Under our law, therefore. the general rule is that a party's contractual rights and obligations are
transmissible to the successors.

The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties
that, as observed by Victorio Polacco has characterized the history of these institutions. From the
Roman concept of a relation from person to person, the obligation has evolved into a relation from
patrimony to patrimony with the persons occupying only a representative position, barring those
rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in
consideration of its performance by a specific person and by no other.

xxx xxx xxx

Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father's
transaction, which gave rise to the present claim for damages. That petitioners did not inherit the property involved
herein is of no moment because by legal fiction, the monetary equivalent thereof devolved into the mass of their
father's hereditary estate, and we have ruled that the hereditary assets are always liable in their totality for the
payment of the debts of the estate. 42

It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance. With
this clarification and considering petitioners' admission that there are other properties left by the deceased which are
sufficient to cover the amount adjudged in favor of private respondents, we see no cogent reason to disturb the
findings and conclusions of the Court of Appeals.

WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.

SO ORDERED.

Gutierrez, Jr., Feliciano and Cortes, JJ., concur.

Bidin J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 77029 August 30, 1990

BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO, all surnamed,
GEVERO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT
CORPORATION, respondents.

Carlito B. Somido for petitioners.

Benjamin N. Tabios for private respondent.

PARAS, J.:

This is a petition for review on certiorari of the March 20, 1988 decision 1 of the then Intermediate Appellate Court
(now Court of Appeals) in AC-GR CV No. 69264, entitled Del Monte Development Corporation vs. Enrique Ababa,
et al., etc. affirming the decision 2 of the then Court of First Instance (now Regional Trial Court) of Misamis
Oriental declaring the plaintiff corporation as the true and absolute owner of that portion of Lot 476 of the Cagayan
Cadastre, particularly Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an area of Seven
Thousand Eight Hundred Seventy Eight (7,878) square meters more or less.

As found by the Appellate Court, the facts are as follows:

The parcel of land under litigation is Lot No. 2476 of the Subdivision Plan Psd-37365 containing
an area of 20,119 square meters and situated at Gusa, Cagayan de Oro City. Said lot was acquired
by purchase from the late Luis Lancero on September 15, 1964 as per Deed of Absolute Sale
executed in favor of plaintiff and by virtue of which Transfer Certificate of Title No. 4320 was
issued to plaintiff (DELCOR for brevity). Luis Lancero, in turn acquired the same parcel from
Ricardo Gevero on February 5, 1952 per deed of sale executed by Ricardo Gevero which was duly
annotated as entry No. 1128 at the back of Original Certificate of Title No. 7610 covering the
mother lot identified as Lot No. 2476 in the names of Teodorica Babangha — 1/2 share and her
children: Maria; Restituto, Elena, Ricardo, Eustaquio and Ursula, all surnamed surnamed Gevero,
1/2 undivided share of the whole area containing 48,122 square meters.

Teodorica Babangha died long before World War II and was survived by her six children
aforementioned. The heirs of Teodorica Babangha on October 17,1966 executed an Extra-Judicial
Settlement and Partition of the estate of Teodorica Babangha, consisting of two lots, among them
was lot 2476. By virtue of the extra-judicial settlement and partition executed by the said heirs of
Teodorica Babangha, Lot 2476-A to Lot 2476-I, inclusive, under subdivision plan (LRC) Psd-
80450 duly approved by the Land Registration Commission, Lot 2476-D, among others, was
adjudicated to Ricardo Gevero who was then alive at the time of extra-judicial settlement and
partition in 1966. Plaintiff (private respondent herein) filed an action with the CFI (now RTC) of
Misamis Oriental to quiet title and/or annul the partition made by the heirs of Teodorica Babangha
insofar as the same prejudices the land which it acquired a portion of lot 2476.
 Plaintiff now seeks to quiet title and/or annul the partition made by the heirs of Teodorica
Babangha insofar as the same prejudices the land which it acquired, a portion of Lot 2476.
Plaintiff proved that before purchasing Lot 2476-A it first investigated and checked the title of
Luis Lancero and found the same to be intact in the office of the Register of Deeds of Cagayan de
Oro City. The same with the subdivision plan (Exh. "B"), the corresponding technical description
(Exh. "P") and the Deed of Sale executed by Ricardo Gevero — all of which were found to be
unquestionable. By reason of all these, plaintiff claims to have bought the land in good faith and
for value, occupying the land since the sale and taking over from Lancero's possession until May
1969, when the defendants Abadas forcibly entered the property. (Rollo, p. 23)

After trial the court a quo on July 18, 1977 rendered judgment, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered declaring the plaintiff

corporation as the true and absolute owner of that portion of Lot No. 2476 of the Cagayan
Cadastre, particularly Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an
area of SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT (7,878) square meters,
more or less. The other portions of Lot No. 2476 are hereby adjudicated as follows:

Lot No. 2476 – B – to the heirs of Elena Gevero;

Lot No. 2476 – C – to the heirs of Restituto Gevero;

Lot No. 2476 – E – to the defendant spouses Enrique C. Torres and Francisca Aquino;

Lot No. 2476 – F – to the defendant spouses Eduard Rumohr and Emilia Merida Rumohf ;

Lot Nos. 2476-H, 2476-I and 2476 — G — to defendant spouses Enrique Abada and Lilia Alvarez
Abada.

No adjudication can be made with respect to Lot No. 2476-A considering that the said lot is the
subject of a civil case between the Heirs of Maria Gevero on one hand and the spouses Daniel
Borkingkito and Ursula Gevero on the other hand, which case is now pending appeal before the
Court of Appeals. No pronouncement as to costs,

SO ORDERED. (Decision, Record on Appeal, p. 203; Rollo, pp. 21-22)

From said decision, defendant heirs of Ricardo Gevero (petitioners herein) appealed to the IAC (now Court of
Appeals) which subsequently, on March 20, 1986, affirmed the decision appealed from.

Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, p. 28) but was denied on April 21, 1986.

Hence, the present petition.

This petition is devoid of merit.

Basically, the issues to be resolved in the instant case are: 1) whether or not the deed of sale executed by
Ricardo Gevero to Luis Lancero is valid; 2) in the affirmative, whether or not the 1/2 share of interest of
Teodorica Babangha in one of the litigated lots, lot no. 2476 under OCT No. 7610 is included in the deed of
sale; and 3) whether or not the private respondents' action is barred by laches.

Petitioners maintain that the deed of sale is entirely invalid citing alleged flaws thereto, such as that: 1) the signature
of Ricardo was forged without his knowledge of such fact; 2) Lancero had recognized the fatal defect of the 1952
deed of sale when he signed the document in 1968 entitled "Settlement to Avoid the Litigation"; 3) Ricardo's
children remained in the property notwithstanding the sale to Lancero; 4) the designated Lot No. is 2470 instead of
the correct number being Lot No. 2476; 5) the deed of sale included the share of Eustaquio Gevero without his
authority; 6) T.C.T. No. 1183 of Lancero segregated the area of 20,119 square meters from the bigger area (OCT
No. 7616) without the consent of the other co-owners; 7) Lancero caused the 1952 Subdivision survey without the
consent of the Geveros' to bring about the segregation of the 20,119 square meters lot from the mother lot 2476
which brought about the issuance of his title T-1183 and to DELCOR's title T4320, both of which were illegally
issued; and 8) the area sold as per document is 20,649 square meters whereas the segregated area covered by TCT
No. T-1183 of Lancero turned out to be 20,119 square meters (Petitioners Memorandum, pp. 62-78).

As to petitioners' claim that the signature of Ricardo in the 1952 deed of sale in favor of Lancero was forged without
Ricardo's knowledge of such fact (Rollo, p. 71) it will be observed that the deed of sale in question was executed
with all the legal formalities of a public document. The 1952 deed was duly acknowledged by both parties before the
notary public, yet petitioners did not bother to rebut the legal presumption of the regularity of the notarized
document (Dy v. Sacay, 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423, March 13, 1989). In fact it has
long been settled that a public document executed and attested through the intervention of the notary public is
evidence of the facts in clear, unequivocal manner therein expressed. It has the presumption of regularity and to
contradict all these, evidence must be clear, convincing and more than merely preponderant (Rebuleda v. I.A.C., 155
SCRA 520-521 [1987]). Forgery cannot be presumed, it must be proven (Siasat v. IAC, No. 67889, October 10,
1985). Likewise, petitioners allegation of absence of consideration of the deed was not substantiated. Under Art.
1354 of the Civil Code, consideration is presumed unless the contrary is proven.

As to petitioners' contention that Lancero had recognized the fatal defect of the 1952 deed when he signed the
document in 1968 entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule of evidence that the right
of a party cannot be prejudiced by an act, declaration, or omission of another (Sec. 28. Rule 130, Rules of Court).
This particular rule is embodied in the maxim "res inter alios acta alteri nocere non debet." Under Section 31, Rule
130, Rules of Court "where one derives title to property from another, the act, declaration, or omission of the latter,
while holding the title, in relation to the property is evidence against the former." It is however stressed that the
admission of the former owner of a property must have been made while he was the owner thereof in order that such
admission may be binding upon the present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905]; Medel v.
Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of executing the 1968 document have no
binding effect on DELCOR, the ownership of the land having passed to DELCOR in 1964.

Petitioners' claim that they remained in the property, notwithstanding the alleged sale by Ricardo to Lancero ( Rollo,
p. 71) involves a question of fact already raised and passed upon by both the trial and appellate courts. Said the
Court of Appeals:

Contrary to the allegations of the appellants, the trial court found that Luis Lancero had taken
possession of the land upon proper investigation by plaintiff the latter learned that it was indeed
Luis Lancero who was the owner and possessor of Lot 2476 D. . . . (Decision, C.A., p. 6).

As a finding of fact, it is binding upon this Court (De Gola-Sison v. Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A.,
14 SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54 [1967]; Ramirez Tel.
Co. v. Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA
130 [1986]).

Suffice it to say that the other flaws claimed by the petitioners which allegedly invalidated the 1952 deed of sale
have not been raised before the trial court nor before the appellate court. It is settled jurisprudence that an issue
which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the first
time on appeal as it would be offensive to the basic rules of fair play, justice and due process. (Matienzo v. Servidad,
107 SCRA 276 [1981]; Dela Santa v. C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987];
Anchuelo v. IAC, 147 SCRA 434 [1987]; Dulos Realty and Development Corporation v. C.A., 157 SCRA [1988];
Kamos v. IAC, G.R. No. 78282, July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of Ricardo) in Lot 2476 under OCT No. 7610 was
not included in the deed of sale as it was intended to limit solely to Ricardos' proportionate share out of the
undivided 1/2 of the area pertaining to the six (6) brothers and sisters listed in the Title and that the Deed did not
include the share of Ricardo, as inheritance from Teodorica, because the Deed did not recite that she was deceased at
the time it was executed (Rollo, pp. 67-68).

The hereditary share in a decedents' estate is transmitted or vested immediately from the moment of the death of the
"causante" or predecessor in interest (Civil Code of the Philippines, Art. 777), and there is no legal bar to a
successor (with requisite contracting capacity) disposing of his hereditary share immediately after such death, even
if the actual extent of such share is not determined until the subsequent liquidation of the estate (De Borja v. Vda. de
Borja, 46 SCRA 577 [1972]).

Teodorica Babangha died long before World War II, hence, the rights to the succession were transmitted from the
moment of her death. It is therefore incorrect to state that it was only in 1966, the date of extrajudicial partition,
when Ricardo received his share in the lot as inheritance from his mother Teodorica. Thus, when Ricardo sold his
share over lot 2476 that share which he inherited from Teodorica was also included unless expressly excluded in the
deed of sale.

Petitioners contend that Ricardo's share from Teodorica was excluded in the sale considering that a paragraph of the
aforementioned deed refers merely to the shares of Ricardo and Eustaquio (Rollo, p. 67-68).

It is well settled that laws and contracts shall be so construed as to harmonize and give effect to the different
provisions thereof (Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]), to ascertain the
meaning of the provisions of a contract, its entirety must be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA
83 [1970]). The interpretation insisted upon by the petitioners, by citing only one paragraph of the deed of sale,
would not only create contradictions but also, render meaningless and set at naught the entire provisions thereof.

Petitioners claim that DELCOR's action is barred by laches considering that the petitioners have remained in the
actual, open, uninterrupted and adverse possession thereof until at present (Rollo, p. 17).

An instrument notarized by a notary public as in the case at bar is a public instrument (Eacnio v. Baens, 5 Phil. 742).
The execution of a public instrument is equivalent to the delivery of the thing (Art. 1498, 1st Par., Civil Code) and is
deemed legal delivery. Hence, its execution was considered a sufficient delivery of the property (Buencamino v.
Viceo, 13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca, 108 Phil. 900
[1960]; Phil. Suburban Development Corp. v. Auditor Gen., 63 SCRA 397 (1975]).

Besides, the property sold is a registered land. It is the act of registration that transfers the ownership of the land
sold. (GSIS v. C.A., G.R. No. 42278, January 20, 1989). If the property is a registered land, the purchaser in good,
faith has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws (Mallorca v.
De Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710 [1988]; Nuguid v. CA-G.R. No.
77427, March 13, 1989).

Under the established principles of land registration law, the person dealing with registered land may generally rely
on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to
determine the condition of the property (Tiongco v. de la Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R. No.
49739, January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This notwithstanding, DELCOR did
more than that. It did not only rely on the certificate of title. The Court of Appeals found that it had first investigated
and checked the title (T.C.T. No. T-1183) in the name of Luis Lancero. It likewise inquired into the Subdivision
Plan, the corresponding technical description and the deed of sale executed by Ricardo Gevero in favor of Luis
Lancero and found everything in order. It even went to the premises and found Luis Lancero to be in possession of
the land to the exclusion of any other person. DELCOR had therefore acted in good faith in purchasing the land in
question.

Consequently, DELCOR's action is not barred by laches.

The main issues having been disposed of, discussion of the other issues appear unnecessary.

PREMISES CONSIDERED, the instant petition is hereby DISMISSED and the decision of the Court of Appeals is
hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 89783 February 19, 1992

MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN, MATILDE L.

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

Aytona Law Office and Siquia Law Offices for petitioners.

Mabella, Sangil & Associates for private respondents.

NARVASA, C.J.:

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

The petition was initially denied due course and dismissed by this Court. It was however reinstated upon a second
motion for reconsideration filed by the petitioners, and the respondents were required to comment thereon. The
petition was thereafter given due course and the parties were directed to submit their memorandums. These, together
with the evidence, having been carefully considered, the Court now decides the case.

First, the facts as the Court sees them in light of the evidence on record:

The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all surnamed Locsin. He owned
extensive residential and agricultural properties in the provinces of Albay and Sorsogon. After his death, his estate
was divided among his three (3) children as follows:

(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, were adjudicated to his daughter, Magdalena
Locsin;
(b) 106 hectares of coconut lands were given to Julian Locsin, father of the petitioners Julian, Mariano, Jose,
Salvador, Matilde, and Aurea, all surnamed Locsin;

(c) more than forty (40) hectares of coconut lands in Bogtong, eighteen (18) hectares of riceland in Daraga, and the
residential lots in Daraga, Albay and in Legazpi City went to his son Mariano, which Mariano brought into his
marriage to Catalina Jaucian in 1908. Catalina, for her part, brought into the marriage untitled properties which she
had inherited from her parents, Balbino Jaucian and Simona Anson. These were augmented by other properties
acquired by the spouses in the course of their union,1 which however was not blessed with children.

Eventually, the properties of Mariano and Catalina were brought under the Torrens System. Those that Mariano
inherited from his father, Getulio Locsin, were surveyed cadastrally and registered in the name of "Mariano Locsin,
married to Catalina Jaucian.'' 2

Mariano Locsin executed a Last Will and Testament instituting his wife, Catalina, as the sole and universal heir of
all his properties. 3 The will was drawn up by his wife's nephew and trusted legal adviser, Attorney Salvador
Lorayes. Attorney Lorayes disclosed that the spouses being childless, they had agreed that their properties, after both
of them shall have died should revert to their respective sides of the family, i.e., Mariano's properties would go to his
"Locsin relatives" (i.e., brothers and sisters or nephews and nieces), and those of Catalina to her "Jaucian
relatives." 4

Don Mariano Locsin died of cancer on September 14, 1948 after a lingering illness. In due time, his will was
probated in Special Proceedings No. 138, CFI of Albay without any opposition from both sides of the family. As
directed in his will, Doña Catalina was appointed executrix of his estate. Her lawyer in the probate proceeding was
Attorney Lorayes. In the inventory of her husband's estate 5 which she submitted to the probate court for
approval, 6 Catalina declared that "all items mentioned from Nos. 1 to 33 are the private properties of the deceased
and form part of his capital at the time of the marriage with the surviving spouse, while items Nos. 34 to 42 are
conjugal." 7

Among her own and Don Mariano's relatives, Doña Catalina was closest to her nephew, Attorney Salvador Lorayes,
her nieces, Elena Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the husbands of the last two:
Hostilio Cornelio and Fernando Velasco. 8 Her trust in Hostilio Cornelio was such that she made him custodian of
all the titles of her properties; and before she disposed of any of them, she unfailingly consulted her lawyer-nephew,
Attorney Salvador Lorayes. It was Atty. Lorayes who prepared the legal documents and, more often than not, the
witnesses to the transactions were her niece Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes-Velasco, or their
husbands. Her niece, Elena Jaucian, was her life-long companion in her house.

Don Mariano relied on Doña Catalina to carry out the terms of their compact, hence, nine (9) years after his death,
as if in obedience to his voice from the grave, and fully cognizant that she was also advancing in years, Doña
Catalina began transferring, by sale, donation or assignment, Don Mariano's as well as her own, properties to their
respective nephews and nieces. She made the following sales and donation of properties which she had received
from her husband's estate, to his Locsin nephews and nieces:

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES

23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481

favor of Mariano Locsin

1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000

Jose R. Locsin

1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

2 Feb. 4, 1975 Deed of Donation in 34,045

favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

3 Sept. 9, 1975 Deed of Donation in (Lot 2059)

favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio

favor of Aurea B. Locsin Fernando Velasco

5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Cornelio
favor of Aurea B. Locsin Elena Jaucian

6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto -

favor of Aurea B. Locsin

7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto -

favor of Aurea B. Locsin

15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto -

Aurea Locsin

16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson
Aurea Locsin M. Acabado

17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito
Aurea Locsin Mariano B. Locsin

19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto -

favor of Mariano Locsin

1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 Delfina Anson
in favor of Manuel V. del (Lot 2155) Antonio Illegible
Rosario whose maternal
grandfather was Getulio
Locsin

2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio Illegible
in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals
from bigger portion of
Lot 2155 leased to Filoil
Refinery were assigned to
Maria Jaucian Lorayes
Cornelio
Of her own properties, Doña Catalina conveyed the following to her own nephews and nieces and others:

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE

2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000

Vicente Jaucian (lot 2020)
(6,825 sqm. when
resurveyed)

24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000

in favor of Francisco M.
Maquiniana

26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300

favor of Francisco
Maquiniana

27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000

favor of Ireneo Mamia

28 May 3, 1973 Deed of Absolute Sale in 75 P 750

favor of Zenaida Buiza

29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Felisa Morjella

30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000

favor of Inocentes Motocinos

31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Casimiro Mondevil

32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200

favor of Juan Saballa

25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500

of Rogelio Marticio

Doña Catalina died on July 6, 1977.

Four years before her death, she had made a will on October 22, 1973 affirming and ratifying the transfers she had
made during her lifetime in favor of her husband's, and her own, relatives. After the reading of her will, all the
relatives agreed that there was no need to submit it to the court for probate because the properties devised to them
under the will had already been conveyed to them by the deceased when she was still alive, except some legacies
which the executor of her will or estate, Attorney Salvador Lorayes, proceeded to distribute.

In 1989, or six (6) years after Doña Catalina's demise, some of her Jaucian nephews and nieces who had already
received their legacies and hereditary shares from her estate, filed action in the Regional Trial Court of Legaspi City
(Branch VIII, Civil Case No. 7152) to recover the properties which she had conveyed to the Locsins during her
lifetime, alleging that the conveyances were inofficious, without consideration, and intended solely to circumvent
the laws on succession. Those who were closest to Doña Catalina did not join the action.
After the trial, judgment was rendered on July 8, l985 in favor of the plaintiffs (Jaucian), and against the Locsin
defendants, the dispositive part of which reads:

WHEREFORE, this Court renders judgment for the plaintiffs and against the defendants:

(1) declaring the, plaintiffs, except the heirs of Josefina J. Borja and Eduardo Jaucian, who
withdrew, the rightful heirs and entitled to the entire estate, in equal portions, of Catalina Jaucian
Vda. de Locsin, being the nearest collateral heirs by right of representation of Juan and Gregorio,
both surnamed Jaucian, and full-blood brothers of Catalina;

(2) declaring the deeds of sale, donations, reconveyance and exchange and all other instruments
conveying any part of the estate of Catalina J. Vda. de Locsin including, but not limited to those in
the inventory of known properties (Annex B of the complaint) as null and void ab-initio;

(3) ordering the Register of Deeds of Albay and/or Legazpi City to cancel all certificates of title
and other transfers of the real properties, subject of this case, in the name of defendants, and
derivatives therefrom, and issue new ones to the plaintiffs;

(4) ordering the defendants, jointly and severally, to reconvey ownership and possession of all
such properties to the plaintiffs, together with all muniments of title properly endorsed and
delivered, and all the fruits and incomes received by the defendants from the estate of Catalina,
with legal interest from the filing of this action; and where reconveyance and delivery cannot be
effected for reasons that might have intervened and prevent the same, defendants shall pay for the
value of such properties, fruits and incomes received by them, also with legal interest from the
filing, of this case

(5) ordering each of the defendants to pay the plaintiffs the amount of P30,000.00 as exemplary
damages; and the further sum of P20,000.00 each as moral damages; and

(6) ordering the defendants to pay the plaintiffs attorney's fees and litigation expenses, in the
amount of P30,000.00 without prejudice to any contract between plaintiffs and counsel.

Costs against the defendants.9

The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) which rendered its now appealed judgment
on March 14, 1989, affirming the trial court's decision.

The petition has merit and should be granted.

The trial court and the Court of Appeals erred in declaring the private respondents, nephews and nieces of Doña
Catalina J. Vda. de Locsin, entitled to inherit the properties which she had already disposed of more than ten (10)
years before her death. For those properties did not form part of her hereditary estate, i.e., "the property and
transmissible rights and obligations existing at the time of (the decedent's) death and those which have accrued
thereto since the opening of the succession." 10 The rights to a person's succession are transmitted from the moment
of his death, and do not vest in his heirs until such time. 11 Property which Doña Catalina had transferred or
conveyed to other persons during her lifetime no longer formed part of her estate at the time of her death to which
her heirs may lay claim. Had she died intestate, only the property that remained in her estate at the time of her death
devolved to her legal heirs; and even if those transfers were, one and all, treated as donations, the right arising under
certain circumstances to impugn and compel the reduction or revocation of a decedent's gifts inter vivos does not
inure to the respondents since neither they nor the donees are compulsory (or forced) heirs. 12

There is thus no basis for assuming an intention on the part of Doña Catalina, in transferring the properties she had
received from her late husband to his nephews and nieces, an intent to circumvent the law in violation of the private
respondents' rights to her succession. Said respondents are not her compulsory heirs, and it is not pretended that she
had any such, hence there were no legitimes that could conceivably be impaired by any transfer of her property
during her lifetime. All that the respondents had was an expectancy that in nowise restricted her freedom to dispose
of even her entire estate subject only to the limitation set forth in Art. 750, Civil Code which, even if it were
breached, the respondents may not invoke:

Art. 750. The donation may comprehend all the present property of the donor or part thereof,
provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself,
and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be
supported by the donor. Without such reservation, the donation shall be reduced on petition of any
person affected. (634a)

The lower court capitalized on the fact that Doña Catalina was already 90 years old when she died on July 6, 1977.
It insinuated that because of her advanced years she may have been imposed upon, or unduly influenced and morally
pressured by her husband's nephews and nieces (the petitioners) to transfer to them the properties which she had
inherited from Don Mariano's estate. The records do not support that conjecture.

For as early as 1957, or twenty-eight (28) years before her death, Doña Catalina had already begun transferring to
her Locsin nephews and nieces the properties which she received from Don Mariano. She sold a 962-sq.m. lot on
January 26, 1957 to his nephew and namesake Mariano Locsin II. 13 On April 7, 1966, or 19 years before she passed
away, she also sold a 43 hectare land to another Locsin nephew, Jose R. Locsin. 14 The next year, or on March 22,
1967, she sold a 5,000-sq.m. portion of Lot 2020 to Julian Locsin.15

On March 27, 1967, Lot 2020 16 was partitioned by and among Doña Catalina, Julian Locsin, Vicente Jaucian and
Agapito Lorete.17 At least Vicente Jaucian, among the other respondents in this case, is estopped from assailing the
genuineness and due execution of the sale of portions of Lot 2020 to himself, Julian Locsin, and Agapito Lorete, and
the partition agreement that he (Vicente) concluded with the other co-owners of Lot 2020.

Among Doña, Catalina's last transactions before she died in 1977 were the sales of property which she made in favor
of Aurea Locsin and Mariano Locsin in 1975.18

There is not the slightest suggestion in the record that Doña Catalina was mentally incompetent when she made
those dispositions. Indeed, how can any such suggestion be made in light of the fact that even as she was
transferring properties to the Locsins, she was also contemporaneously disposing of her other properties in favor of
the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964 (21 years before her death) one-half (or
5,000 sq.m.) of Lot 2020. Three years later, or on March 22, 1967, she sold another 5000 sq.m. of the same lot to
Julian Locsin.19

From 1972 to 1973 she made several other transfers of her properties to her relatives and other persons, namely:
Francisco Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos, Casimiro Mondevil,
Juan Saballa and Rogelio Marticio. 20 None of those transactions was impugned by the private respondents.

In 1975, or two years before her death, Doña Catalina sold some lots not only to Don Mariano's niece, Aurea Locsin,
and his nephew, Mariano Locsin
II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was competent to make that conveyance to
Mercedes, how can there be any doubt that she was equally competent to transfer her other pieces of property to
Aurea and Mariano II?

The trial court's belief that Don Mariano Locsin bequeathed his entire estate to his wife, from a "consciousness of its
real origin" which carries the implication that said estate consisted of properties which his wife had inherited from
her parents, flies in the teeth of Doña Catalina's admission in her inventory of that estate, that "items 1 to 33 are the
private properties of the deceased (Don Mariano) and forms (sic) part of his capital at the time of the marriage with
the surviving spouse, while items 34 to 42 are conjugal properties, acquired during the marriage." She would have
known better than anyone else whether the listing included any of her paraphernal property so it is safe to assume
that none was in fact included. The inventory was signed by her under oath, and was approved by the probate court
in Special Proceeding No. 138 of the Court of First Instance of Albay. It was prepared with the assistance of her own
nephew and counsel, Atty. Salvador Lorayes, who surely would not have prepared a false inventory that would have
been prejudicial to his aunt's interest and to his own, since he stood to inherit from her eventually.

This Court finds no reason to disbelieve Attorney Lorayes' testimony that before Don Mariano died, he and his wife
(Doña Catalina), being childless, had agreed that their respective properties should eventually revert to their
respective lineal relatives. As the trusted legal adviser of the spouses and a full-blood nephew of Doña Catalina, he
would not have spun a tale out of thin air that would also prejudice his own interest.

Little significance, it seems, has been attached to the fact that among Doña Catalina's nephews and nieces, those
closest to her: (a) her lawyer-nephew Attorney Salvador Lorayes; (b) her niece and companion Elena Jaucian: (c)
her nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and their respective husbands, Fernando Velasco and
Hostilio Cornelio, did not join the suit to annul and undo the dispositions of property which she made in favor of the
Locsins, although it would have been to their advantage to do so. Their desistance persuasively demonstrates that
Doña Catalina acted as a completely free agent when she made the conveyances in favor of the petitioners. In fact,
considering their closeness to Doña Catalina it would have been well-nigh impossible for the petitioners to employ
"fraud, undue pressure, and subtle manipulations" on her to make her sell or donate her properties to them. Doña
Catalina's niece, Elena Jaucian, daughter of her brother, Eduardo Jaucian, lived with her in her house. Her nephew-
in-law, Hostilio Cornelio, was the custodian of the titles of her properties. The sales and donations which she signed
in favor of the petitioners were prepared by her trusted legal adviser and nephew, Attorney Salvador Lorayes. The
(1) deed of donation dated November 19,
197423 in favor of Aurea Locsin, (2) another deed of donation dated February 4, 1975 24 in favor of Matilde Cordero,
and (3) still another deed dated September 9, 1975 25 in favor of Salvador Lorayes, were all witnessed by Hostilio
Cornelio (who is married to Doña Catalina's niece, Maria Lorayes) and Fernando Velasco who is married to another
niece, Maria Olbes.26 The sales which she made in favor of Aurea Locsin on July 15, 1974 27 were witnessed by
Hostilio Cornelio and Elena Jaucian. Given those circumstances, said transactions could not have been anything but
free and voluntary acts on her part.

Apart from the foregoing considerations, the trial court and the Court of Appeals erred in not dismissing this action
for annulment and reconveyance on the ground of prescription. Commenced decades after the transactions had been
consummated, and six (6) years after Doña Catalina's death, it prescribed four (4) years after the subject transactions
were recorded in the Registry of Property, 28 whether considered an action based on fraud, or one to redress an injury
to the rights of the plaintiffs. The private respondents may not feign ignorance of said transactions because the
registration of the deeds was constructive notice thereof to them and the whole world.29

WHEREFORE, the petition for review is granted. The decision dated March 14, 1989 of the Court of Appeals in
CA-G.R. CV No. 11186 is REVERSED and SET ASIDE. The private respondents' complaint for annulment of
contracts and reconveyance of properties in Civil Case No. 7152 of the Regional Trial Court, Branch VIII of
Legazpi City, is DISMISSED, with costs against the private respondents, plaintiffs therein.

SO ORDERED.
 FIRST DIVISION

G.R. No. 125835. July 30, 1998

NATALIA CARPENA OPULENCIA, Petitioner, vs. COURT OF APPEALS, ALADIN SIMUNDAC and

MIGUEL OLIVAN, Respondents.

DECISION

PANGANIBAN, J.

Is a contract to sell a real property involved in testate proceedings valid and binding without the approval of the
probate court?

Statement of the Case

This is the main question raised in this petition for review before us, assailing the Decision 1 of the Court of
Appeals2 in CA-GR CV No. 41994 promulgated on February 6, 1996 and its Resolution 3 dated July 19, 1996. The
challenged Decision disposed as follows:

WHEREFORE, premises considered, the order of the lower court dismissing the complaint is SET ASIDE and
judgment is hereby rendered declaring the CONTRACT TO SELL executed by appellee in favor of appellants as
valid and binding, subject to the result of the administration proceedings of the testate Estate of Demetrio Carpena.

SO ORDERED. 4cräläwvirtualibräry

Petitioners Motion for Reconsideration was denied in the challenged Resolution.5

The Facts

The antecedent facts, as succinctly narrated by Respondent Court of Appeals are:

In a complaint for specific performance filed with the court a quo [herein private respondents] Aladin Simundac and
Miguel Oliven alleged that [herein petitioner] Natalia Carpena Opulencia executed in their favor a CONTRACT TO
SELL Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square meters located in Sta. Rosa, Laguna at  P150.00
per square meter; that plaintiffs paid a downpayment of P300,000.00 but defendant, despite demands, failed to
comply with her obligations under the contract. [Private respondents] therefore prayed that [petitioner] be ordered to
perform her contractual obligations and to further pay damages, attorneys fee and litigation expenses.

In her traverse, [petitioner] admitted the execution of the contract in favor of plaintiffs and receipt of P300,000.00 as
downpayment. However, she put forward the following affirmative defenses: that the property subject of the
contract formed part of the Estate of Demetrio Carpena (petitioners father), in respect of which a petition for probate
was filed with the Regional Trial Court, Branch 24, Bian, Laguna; that at the time the contract was executed, the
parties were aware of the pendency of the probate proceeding; that the contract to sell was not approved by the
probate court; that realizing the nullity of the contract [petitioner] had offered to return the downpayment received
from [private respondents], but the latter refused to accept it; that [private respondents] further failed to provide
funds for the tenant who demanded P150,00.00 in payment of his tenancy rights on the land; that [petitioner] had
chosen to rescind the contract.

At the pre-trial conference the parties stipulated on [sic] the following facts:

1. That on February 3, 1989, [private respondents] and [petitioner] entered into a contract to sell involving a parcel
of land situated in Sta. Rosa, Laguna, otherwise known as Lot No. 2125 of the Sta. Rosa Estate.

2. That the price or consideration of the said sell [sic] is P150.00 per square meters;

3. That the amount of P300,000.00 had already been received by [petitioner];

4. That the parties have knowledge that the property subject of the contract to sell is subject of the probate
proceedings;

5. That [as] of this time, the probate Court has not yet issued an order either approving or denying the said sale. (p.
3, appealed Order of September 15, 1992, pp. 109-112, record).

[Private respondents] submitted their evidence in support of the material allegations of the complaint. In addition to
testimonies of witnesses, [private respondents] presented the following documentary evidences: (1) Contract to Sell
(Exh A); (2) machine copy of the last will and testament of Demetrio Carpena (defendants father) to show that the
property sold by defendant was one of those devised to her in said will (Exh B); (3) receipts signed by defendant for
the downpayment in the total amount of P300,000.00 (Exhs C, D & E); and (4) demand letters sent to defendant
(Exhs F & G).

It appears that [petitioner], instead of submitting her evidence, filed a Demurrer to Evidence. In essence, defendant
maintained that the contract to sell was null and void for want of approval by the probate court. She further argued
that the contract was subject to a suspensive condition, which was the probate of the will of defendants father
Demetrio Carpena. An Opposition was filed by [private respondents]. It appears further that in an Order dated
December 15, 1992 the court a quo granted the demurrer to evidence and dismissed the complaint. It justified its
action in dismissing the complaint in the following manner:

It is noteworthy that when the contract to sell was consummated, no petition was filed in the Court with notice to the
heirs of the time and place of hearing, to show that the sale is necessary and beneficial. A sale of properties of an
estate as beneficial to the interested parties must comply with the requisites provided by law, (Sec. 7, Rule 89, Rules
of Court) which are mandatory, and without them, the authority to sell, the sale itself, and the order approving it,
would be null and void ab initio. (Arcilla vs. David, 77 Phil. 718, Gabriel, et al., vs. Encarnacion, et al., L-6736,
May 4, 1954; Bonaga vs. Soler, 2 Phil. 755) Besides, it is axiomatic that where the estate of a deceased person is
already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving
it without prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123 SCRA 767).

As held by the Supreme Court, a decedents representative (administrator) is not estopped from questioning the
validity of his own void deed purporting to convey land. (Bona vs. Soler, 2 Phil, 755). In the case at bar, the
[petitioner,] realizing the illegality of the transaction[,] has interposed the nullity of the contract as her defense, there
being no approval from the probate Court, and, in good faith offers to return the money she received from the
[private respondents]. Certainly, the administratrix is not estop[ped] from doing so and the action to declare the
inexistence of contracts do not prescribe. This is what precipitated the filing of [petitioners] demurrer to
evidence.6cräläwvirtualibräry
The trial courts order of dismissal was elevated to the Court of Appeals by private respondents who alleged:

1. The lower court erred in concluding that the contract to sell is null and void, there being no approval of the
probate court.

2. The lower court erred in concluding that [petitioner] in good faith offers to return the money to [private
respondents].

3. The lower court erred in concluding that [petitioner] is not under estoppel to question the validity of the contract
to sell.

4. The lower court erred in not ruling on the consideration of the contract to sell which is tantamount to plain unjust
enrichment of [petitioner] at the expense of [private respondents].7

Public Respondents Ruling

Declaring the Contract to Sell valid, subject to the outcome of the testate proceedings on Demetrio Carpenas estate,
the appellate court set aside the trial courts dismissal of the complaint and correctly ruled as follows:

It is apparent from the appealed order that the lower court treated the contract to sell executed by appellee as one
made by the administratrix of the Estate of Demetrio Carpena for the benefit of the estate. Hence, its main reason for
voiding the contract in question was the absence of the probate courts approval. Presumably, what the lower court
had in mind was the sale of the estate or part thereof made by the administrator for the benefit of the estate, as
authorized under Rule 89 of the Revised Rules of Court, which requires the approval of the probate court upon
application therefor with notice to the heirs, devisees and legatees.

However, as adverted to by appellants in their brief, the contract to sell in question is not covered by Rule 89 of the
Revised Rules of Court since it was made by appellee in her capacity as an heir, of a property that was devised to
her under the will sought to be probated. Thus, while the document inadvertently stated that appellee executed the
contract in her capacity as executrix and administratrix of the estate, a cursory reading of the entire text of the
contract would unerringly show that what she undertook to sell to appellants was one of the other properties given to
her by her late father, and more importantly, it was not made for the benefit of the estate but for her own needs. To
illustrate this point, it is apropos to refer to the preambular or preliminary portion of the document, which reads:

WHEREAS, the SELLER is the lawful owner of a certain parcel of land, which is more particularly described as
follows:

xxx
xxx
xxx

WHEREAS, the SELLER suffers difficulties in her living and has forced to offer the sale of the above-described
property, which property was only one among the other properties given to her by her late father, to anyone who can
wait for complete clearance of the court on the Last Will Testament of her father.

WHEREAS, the SELLER in order to meet her need of cash, has offered for sale the said property at ONE
HUNDRED FIFTY PESOS (150.00) Philippine Currency, per square meter unto the BUYERS, and with this offer,
the latter has accepted to buy and/or purchase the same, less the area for the road and other easements indicated at
the back of Transfer Certificate of Title No. 2125 duly confirmed after the survey to be conducted by the BUYERs
Licensed Geodetic Engineer, and whatever area [is] left. (Emphasis added).

To emphasize, it is evident from the foregoing clauses of the contract that appellee sold Lot 2125 not in her capacity
as executrix of the will or administratrix of the estate of her father, but as an heir and more importantly as owner of
said lot which, along with other properties, was devised to her under the will sought to be probated. That being so,
the requisites stipulated in Rule 89 of the Revised Rules of Court which refer to a sale made by the administrator for
the benefit of the estate do not apply.

xxx

It is noteworthy that in a Manifestation filed with this court by appellants, which is not controverted by appellee, it is
mentioned that the last will and testament of Demetrio Carpena was approved in a final judgment rendered in
Special Proceeding No. B-979 by the Regional Trial Court, Branch 24 Binan, Laguna. But of course such approval
does not terminate the proceeding[s] since the settlement of the estate will ensue. Such proceedings will consist,
among others, in the issuance by the court of a notice to creditors (Rule 86), hearing of money claims and payment
of taxes and estate debts (Rule 88) and distribution of the residue to the heirs or persons entitled thereto (Rule 90). In
effect, the final execution of the deed of sale itself upon appellants payment of the balance of the purchase price will
have to wait for the settlement or termination of the administration proceedings of the Estate of Demetrio Carpena.
Under the foregoing premises, what the trial court should have done with the complaint was not to dismiss it but to
simply put on hold further proceedings until such time that the estate or its residue will be distributed in accordance
with the approved will.

The rule is that when a demurrer to the evidence is granted by the trial court but reversed on appeal, defendant loses
the right to adduce his evidence. In such a case, the appellate court will decide the controversy on the basis of
plaintiffs evidence. In the case at bench, while we find the contract to sell valid and binding between the parties, we
cannot as yet order appellee to perform her obligations under the contract because the result of the administration
proceedings of the testate Estate of Demetrio Carpena has to be awaited. Hence, we shall confine our adjudication to
merely declaring the validity of the questioned Contract to Sell.

Hence, this appeal.8

The Issue

Petitioner raises only one issue:

Whether or not the Contract to Sell dated 03 February 1989 executed by the [p]etitioner and [p]rivate
[r]espondent[s] without the requisite probate court approval is valid.

The Courts Ruling

The petition has no merit.

Contract to Sell Valid

In a nutshell, petitioner contends that where the estate of the deceased person is already the subject of a testate or
intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the
Probate Court.9 She maintains that the Contract to Sell is void because it was not approved by the probate court, as
required by Section 7, Rule 89 of the Rules of Court:

SEC. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. The court having
jurisdiction of the estate of the deceased may authorize the executor or administrator to sell, mortgage, or otherwise
encumber real estate, in cases provided by these rules and when it appears necessary or beneficial, under the
following regulations:

xxx
Insisting that the above rule should apply to this case, petitioner argues that the stipulations in the Contract to Sell
require her to act in her capacity as an executrix or administratrix. She avers that her obligation to eject tenants
pertains to the administratrix or executrix, the estate being the landlord of the said tenants. 10 Likewise demonstrating
that she entered into the contract in her capacity as executor is the stipulation that she must effect the conversion of
subject land from irrigated rice land to residential land and secure the necessary clearances from government offices.
Petitioner alleges that these obligations can be undertaken only by an executor or administrator of an estate, and not
by an heir.11cräläwvirtualibräry

The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the Rules of Court is
not applicable, because petitioner entered into the Contract to Sell in her capacity as an heiress, not as an executrix
or administratrix of the estate. In the contract, she represented herself as the lawful owner and seller of the subject
parcel of land.12 She also explained the reason for the sale to be difficulties in her living conditions and consequent
need of cash.13 These representations clearly evince that she was not acting on behalf of the estate under probate
when she entered into the Contract to Sell. Accordingly, the jurisprudence cited by petitioner has no application to
the instant case.

We emphasize that hereditary rights are vested in the heir or heirs from the moment of the decedents
death.14 Petitioner, therefore, became the owner of her hereditary share the moment her father died. Thus, the lack of
judicial approval does not invalidate the Contract to Sell, because the petitioner has the substantive right to sell the
whole or a part of her share in the estate of her late father. 15 Thus, in Jakosalem vs. Rafols,16 the Court resolved an
identical issue under the old Civil Code and held:

Article 440 of the Civil Code provides that the possession of hereditary property is deemed to be transmitted to the
heir without interruption from the instant of the death of the decedent, in case the inheritance be accepted. And
Manresa with reason states that upon the death of a person, each of his heirs becomes the undivided owner of the
whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership
being thus formed among the coowners of the estate while it remains undivided. xxx And according to article 399 of
the Civil Code, every part owner may assign or mortgage his part in the common property, and the effect of such
assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon the
dissolution of the community. Hence, where some of the heirs, without the concurrence of the others, sold a property
left by their deceased father, this Court, speaking thru its then Chief Justice Cayetano Arellano, said that the sale
was valid, but that the effect thereof was limited to the share which may be allotted to the vendors upon the partition
of the estate.

Administration of the Estate Not Prejudiced by the Contract to Sell

Petitioner further contends that [t]o sanction the sale at this stage would bring about a partial distribution of the
decedents estate pending the final termination of the testate proceedings. 17 This becomes all the more significant in
the light of the trial courts finding, as stated in its Order dated August 20, 1997, that the legitime of one of the heirs
has been impaired.18cräläwvirtualibräry

Petitioners contention is not convincing. The Contract to Sell stipulates that petitioners offer to sell is contingent on
the complete clearance of the court on the Last Will Testament of her father. 19 Consequently, although the Contract
to Sell was perfected between the petitioner and private respondents during the pendency of the probate proceedings,
the consummation of the sale or the transfer of ownership over the parcel of land to the private respondents is
subject to the full payment of the purchase price and to the termination and outcome of the testate proceedings.
Therefore, there is no basis for petitioners apprehension that the Contract to Sell may result in a premature partition
and distribution of the properties of the estate. Indeed, it is settled that the sale made by an heir of his share in an
inheritance, subject to the pending administration, in no wise stands in the way of such administration. 20

Estoppel

Finally, petitioner is estopped from backing out of her representations in her valid Contract to Sell with private
respondents, from whom she had already received P300,000 as initial payment of the purchase price. Petitioner may
not renege on her own acts and representations, to the prejudice of the private respondents who have relied on
them.21 Jurisprudence teaches us that neither the law nor the courts will extricate a party from an unwise or
undesirable contract he or she entered into with all the required formalities and with full awareness of its
consequences.22cräläwvirtualibräry

WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED.
Costs against petitioner.

SO ORDERED.

FIRST DIVISION

[G.R. No. 126334. November 23, 2001.]

EMILIO EMNACE, Petitioner, v. COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN

TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO DEPOSOY, VICENTA MAY
TABANAO VARELA, ROSELA TABANAO and VINCENT TABANAO, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern known as
Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their partnership and executed
an agreement of partition and distribution of the partnership properties among them, consequent to Jacinto
Divinagracia’s withdrawal from the partnership. 1 Among the assets to be distributed were five (5) fishing boats, six
(6) vehicles, two (2) parcels of land located at Sto. Niño and Talisay, Negros Occidental, and cash deposits in the
local branches of the Bank of the Philippine Islands and Prudential Bank.chanrob1es virtua1 1aw 1ibrary

Throughout the existence of the partnership, and even after Vicente Tabanao’s untimely demise in 1994, petitioner
failed to submit to Tabanao’s heirs any statement of assets and liabilities of the partnership, and to render an
accounting of the partnership’s finances. Petitioner also reneged on his promise to turn over to Tabanao’s heirs the
deceased’s 1/3 share in the total assets of the partnership, amounting to P30,000,000.00, or the sum of
P10,000,000.00, despite formal demand for payment thereof. 2

Consequently, Tabanao’s heirs, respondents herein, filed against petitioner an action for accounting, payment of
shares, division of assets and damages. 3 In their complaint, respondents prayed as follows:chanrob1es virtual 1aw
library

1. Defendant be ordered to render the proper accounting of all the assets and liabilities of the partnership at bar; and

2. After due notice and hearing defendant be ordered to pay/remit/deliver/surrender/yield to the plaintiffs the
following:chanrob1es virtual 1aw library

A. No less than One Third (1/3) of the assets, properties, dividends, cash, land(s), fishing vessels, trucks, motor
vehicles, and other forms and substance of treasures which belong and/or should belong, had accrued and/or must
accrue to the partnership;

B. No less than Two Hundred Thousand Pesos (P200,000.00) as moral damages;

C. Attorney’s fees equivalent to Thirty Percent (30%) of the entire share/amount/award which the Honorable Court
may resolve the plaintiffs as entitled to plus P1,000.00 for every appearance in court. 4

Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction over the
nature of the action or suit, and lack of capacity of the estate of Tabanao to sue. 5 On August 30, 1994, the trial court
denied the motion to dismiss. It held that venue was properly laid because, while realties were involved, the action
was directed against a particular person on the basis of his personal liability; hence, the action is not only a personal
action but also an action in personam. As regards petitioner’s argument of lack of jurisdiction over the action
because the prescribed docket fee was not paid considering the huge amount involved in the claim, the trial court
noted that a request for accounting was made in order that the exact value of the partnership may be ascertained and,
thus, the correct docket fee may be paid. Finally, the trial court held that the heirs of Tabanao had a right to sue in
their own names, in view of the provision of Article 777 of the Civil Code, which states that the rights to the
succession are transmitted from the moment of the death of the decedent. 6

The following day, respondents filed an amended complaint, 7 incorporating the additional prayer that petitioner be
ordered to "sell all (the partnership’s) assets and thereafter pay/remit/deliver/surrender/yield to the plaintiffs" their
corresponding share in the proceeds thereof. In due time, petitioner filed a manifestation and motion to dismiss, 8
arguing that the trial court did not acquire jurisdiction over the case due to the plaintiffs’ failure to pay the proper
docket fees. Further, in a supplement to his motion to dismiss, 9 petitioner also raised prescription as an additional
ground warranting the outright dismissal of the complaint.

On June 15, 1995, the trial court issued an Order, 10 denying the motion to dismiss inasmuch as the grounds raised
therein were basically the same as the earlier motion to dismiss which has been denied. Anent the issue of
prescription, the trial court ruled that prescription begins to run only upon the dissolution of the partnership when the
final accounting is done. Hence, prescription has not set in the absence of a final accounting. Moreover, an action
based on a written contract prescribes in ten years from the time the right of action accrues.

Petitioner filed a petition for certiorari before the Court of Appeals, 11 raising the following issues:chanrob1es
virtual 1aw library

I. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in taking cognizance
of a case despite the failure to pay the required docket fee;

II. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in insisting to try
the case which involve (sic) a parcel of land situated outside of its territorial jurisdiction;

III. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in allowing the
estate of the deceased to appear as party plaintiff, when there is no intestate case and filed by one who was never
appointed by the court as administratrix of the estates; and

IV. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in not dismissing
the case on the ground of prescription.

On August 8, 1996, the Court of Appeals rendered the assailed decision, 12 dismissing the petition for certiorari,
upon a finding that no grave abuse of discretion amounting to lack or excess of jurisdiction was committed by the
trial court in issuing the questioned orders denying petitioner’s motions to dismiss.

Not satisfied, petitioner filed the instant petition for review, raising the same issues resolved by the Court of
Appeals, namely:chanrob1es virtual 1aw library

I. Failure to pay the proper docket fee;

II. Parcel of land subject of the case pending before the trial court is outside the said court’s territorial jurisdiction;

III. Lack of capacity to sue on the part of plaintiff heirs of Vicente Tabanao; and

IV. Prescription of the plaintiff heirs’ cause of action.

It can be readily seen that respondents’ primary and ultimate objective in instituting the action below was to recover
the decedent’s 1/3 share in the partnership’s assets. While they ask for an accounting of the partnership’s assets and
finances, what they are actually asking is for the trial court to compel petitioner to pay and turn over their share, or
the equivalent value thereof, from the proceeds of the sale of the partnership assets. They also assert that until and
unless a proper accounting is done, the exact value of the partnership’s assets, as well as their corresponding share
therein, cannot be ascertained. Consequently, they feel justified in not having paid the commensurate docket fee as
required by the Rules of Court.

We do not agree. The trial court does not have to employ guesswork in ascertaining the estimated value of the
partnership’s assets, for respondents themselves voluntarily pegged the worth thereof at Thirty Million Pesos
(P30,000,000.00). Hence, this case is one which is really not beyond pecuniary estimation, but rather partakes of the
nature of a simple collection case where the value of the subject assets or amount demanded is pecuniarily
determinable. 13 While it is true that the exact value of the partnership’s total assets cannot be shown with certainty
at the time of filing, respondents can and must ascertain, through informed and practical estimation, the amount they
expect to collect from the partnership, particularly from petitioner, in order to determine the proper amount of
docket and other fees. 14 It is thus imperative for respondents to pay the corresponding docket fees in order that the
trial court may acquire jurisdiction over the action. 15

Nevertheless, unlike in the case of Manchester Development Corp. v. Court of Appeals, 16 where there was clearly
an effort to defraud the government in avoiding to pay the correct docket fees, we see no attempt to cheat the courts
on the part of respondents. In fact, the lower courts have noted their expressed desire to remit to the court "any
payable balance or lien on whatever award which the Honorable Court may grant them in this case should there be
any deficiency in the payment of the docket fees to be computed by the Clerk of Court." 17 There is evident
willingness to pay, and the fact that the docket fee paid so far is inadequate is not an indication that they are trying to
avoid paying the required amount, but may simply be due to an inability to pay at the time of filing. This
consideration may have moved the trial court and the Court of Appeals to declare that the unpaid docket fees shall
be considered a lien on the judgment award.

Petitioner, however, argues that the trial court and the Court of Appeals erred in condoning the non-payment of the
proper legal fees and in allowing the same to become a lien on the monetary or property judgment that may be
rendered in favor of respondents. There is merit in petitioner’s assertion. The third paragraph of Section 16, Rule
141 of the Rules of Court states that:chanrob1es virtual 1aw library

The legal fees shall be a lien on the monetary or property judgment in favor of the pauper-litigant.

Respondents cannot invoke the above provision in their favor because it specifically applies to pauper-litigants.
Nowhere in the records does it appear that respondents are litigating as paupers, and as such are exempted from the
payment of court fees. 18

The rule applicable to the case at bar is Section 5(a) of Rule 141 of the Rules of Court, which defines the two kinds
of claims as: (1) those which are immediately ascertainable; and (2) those which cannot be immediately ascertained
as to the exact amount. This second class of claims, where the exact amount still has to be finally determined be the
courts based on evidence presented, falls squarely under the third paragraph of said Section 5(a), which
provides:chanrob1es virtual 1aw library

In case the value of the property or estate or the sum claimed is less or more in accordance with the appraisal of the
court, the difference of fee shall be refunded or paid as the case may be. (Emphasis ours)

In Pilipinas Shell Petroleum Corporation v. Court of Appeals, 19 this Court pronounced that the above-quoted
provision "clearly contemplates an initial payment of the filing fees corresponding to the estimated amount of the
claim subject to adjustment as to what later may be proved." 20 Moreover, we reiterated therein the principle that
the payment of filing fees cannot be made contingent or dependent on the result of the case. Thus, an initial payment
of the docket fees based on an estimated amount must be paid simultaneous with the filing of the complaint.
Otherwise, the court would stand to lose the filing fees should the judgment later turn out to be adverse to any claim
of the respondent heirs.

The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court expenses in
the handling of cases. Consequently, in order to avoid tremendous losses to the judiciary, and to the government as
well, the payment of docket fees cannot be made dependent on the outcome of the case, except when the claimant is
a pauper-litigant.

Applied to the instant case, respondents have a specific claim — 1/3 of the value of all the partnership assets — but
they did not allege a specific amount. They did, however, estimate the partnership’s total assets to be worth Thirty
Million Pesos (P30,000,000.00), in a letter 21 addressed to petitioner. Respondents cannot now say that they are
unable to make an estimate, for the said letter and the admissions therein form part of the records of this case. They
cannot avoid paying the initial docket fees by conveniently omitting the said amount in their amended complaint.
This estimate can be made the basis for the initial docket fees that respondents should pay. Even if it were later
established that the amount proved was less or more than the amount alleged or estimated, Rule 141, Section 5(a) of
the Rules of Court specifically provides that the court may refund the excess or exact additional fees should the
initial payment be insufficient. It is clear that it is only the difference between the amount finally awarded and the
fees paid upon filing of this complaint that is subject to adjustment and which may be subjected to a lien.

In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion, 22 this Court held that when the
specific claim "has been left for the determination by the court, the additional filing fee therefor shall constitute a
lien on the judgment and it shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce
said lien and assess and collect the additional fee." Clearly, the rules and jurisprudence contemplate the initial
payment of filing and docket fees based on the estimated claims of the plaintiff, and it is only when there is a
deficiency that a lien may be constituted on the judgment award until such additional fee is collected.

Based on the foregoing, the trial court erred in not dismissing the complaint outright despite their failure to pay the
proper docket fees. Nevertheless, as in other procedural rules, it may be liberally construed in certain cases if only to
secure a just and speedy disposition of an action. While the rule is that the payment of the docket fee in the proper
amount should be adhered to, there are certain exceptions which must be strictly construed. 23

In recent rulings, this Court has relaxed the strict adherence to the Manchester doctrine, allowing the plaintiff to pay
the proper docket fees within a reasonable time before the expiration of the applicable prescriptive or reglementary
period. 24

In the recent case of National Steel Corp. v. Court of Appeals, 25 this Court held that:chanrob1es virtual 1aw library

The court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment
of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment
of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in the
meantime.

It does not follow, however, that the trial court should have dismissed the complaint for failure of private respondent
to pay the correct amount of docket fees. Although the payment of the proper docket fees is a jurisdictional
requirement, the trial court may allow the plaintiff in an action to pay the same within a reasonable time before the
expiration of the applicable prescriptive or reglementary period. If the plaintiff fails to comply within this
requirement, the defendant should timely raise the issue of jurisdiction or else he would be considered in estoppel. In
the latter case, the balance between the appropriate docket fees and the amount actually paid by the plaintiff will be
considered a lien or any award he may obtain in his favor. (Emphasis ours)
Accordingly, the trial court in the case at bar should determine the proper docket fee based on the estimated amount
that respondents seek to collect from petitioner, and direct them to pay the same within a reasonable time, provided
the applicable prescriptive or reglementary period has not yet expired. Failure to comply therewith, and upon motion
by petitioner, the immediate dismissal of the complaint shall issue on jurisdictional grounds.

On the matter of improper venue, we find no error on the part of the trial court and the Court of Appeals in holding
that the case below is a personal action which, under the Rules, may be commenced and tried where the defendant
resides or may be found, or where the plaintiffs reside, at the election of the latter. 26

Petitioner, however, insists that venue was improperly laid since the action is a real action involving a parcel of land
that is located outside the territorial jurisdiction of the court a quo. This contention is not well-taken. The records
indubitably show that respondents are asking that the assets of the partnership be accounted for, sold and distributed
according to the agreement of the partners. The fact that two of the assets of the partnership are parcels of land does
not materially change the nature of the action. It is an action in personam because it is an action against a person,
namely, Petitioner, on the basis of his personal liability. It is not an action in rem where the action is against the
thing itself instead of against the person. 27 Furthermore, there is no showing that the parcels of land involved in
this case are being disputed. In fact, it is only incidental that part of the assets of the partnership under liquidation
happen to be parcels of land.

The time-tested case of Claridades v. Mercader, Et Al., 28 settled this issue thus:chanrob1es virtual 1aw library

The fact that plaintiff prays for the sale of the assets of the partnership, including the fishpond in question, did not
change the nature or character of the action, such sale being merely a necessary incident of the liquidation of the
partnership, which should precede and/or is part of its process of dissolution.

The action filed by respondents not only seeks redress against petitioner. It also seeks the enforcement of, and
petitioner’s compliance with, the contract that the partners executed to formalize the partnership’s dissolution, as
well as to implement the liquidation and partition of the partnership’s assets. Clearly, it is a personal action that, in
effect, claims a debt from petitioner and seeks the performance of a personal duty on his part. 29 In fine,
respondents’ complaint seeking the liquidation and partition of the assets of the partnership with damages is a
personal action which may be filed in the proper court where any of the parties reside. 30 Besides, venue has
nothing to do with jurisdiction for venue touches more upon the substance or merits of the case. 31 As it is, venue in
this case was properly laid and the trial court correctly ruled so.

On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue since
she was never appointed as administratrix or executrix of his estate. Petitioner’s objection in this regard is
misplaced. The surviving spouse does not need to be appointed as executrix or administratrix of the estate before she
can file the action. She and her children are complainants in their own right as successors of Vicente Tabanao. From
the very moment of Vicente Tabanao’s death, his rights insofar as the partnership was concerned were transmitted to
his heirs, for rights to the succession are transmitted from the moment of death of the decedent. 32

Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to
respondents by operation of law, more particularly by succession, which is a mode of acquisition by virtue of which
the property, rights and obligations to the extent of the value of the inheritance of a person are transmitted. 33
Moreover, respondents became owners of their respective hereditary shares from the moment Vicente Tabanao died.
34

A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is not
necessary for any of the heirs to acquire legal capacity to sue. As successors who stepped into the shoes of their
decedent upon his death, they can commence any action originally pertaining to the decedent. 35 From the moment
of his death, his rights as a partner and to demand fulfillment of petitioner’s obligations as outlined in their
dissolution agreement were transmitted to respondents. They, therefore, had the capacity to sue and seek the court’s
intervention to compel petitioner to fulfill his obligations.

Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of prescription,
arguing that respondents’ action prescribed four (4) years after it accrued in 1986. The trial court and the Court of
Appeals gave scant consideration to petitioner’s hollow arguments, and rightly so.

The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination. 36 The
partnership, although dissolved, continues to exist and its legal personality is retained, at which time it completes the
winding up of its affairs, including the partitioning and distribution of the net partnership assets to the partners. 37
For as long as the partnership exists, any of the partners may demand an accounting of the partnership’s business.
Prescription of the said right starts to run only upon the dissolution of the partnership when the final accounting is
done. 38

Contrary to petitioner’s protestations that respondents’ right to inquire into the business affairs of the partnership
accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a
final accounting. Article 1842 of the Civil Code provides:chanrob1es virtual 1aw library

The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding
up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution,
in the absence of any agreement to the contrary.

Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited provision
states that the right to demand an accounting accrues at the date of dissolution in the absence of any agreement to the
contrary. When a final accounting is made, it is only then that prescription begins to run. In the case at bar, no final
accounting has been made, and that is precisely what respondents are seeking in their action before the trial court,
since petitioner has failed or refused to render an accounting of the partnership’s business and assets. Hence, the said
action is not barred by prescription.

In fine, the trial court neither erred nor abused its discretion when it denied petitioner’s motions to dismiss.
Likewise, the Court of Appeals did not commit reversible error in upholding the trial court’s orders. Precious time
has been lost just to settle this preliminary issue, with petitioner resurrecting the very same arguments from the trial
court all the way up to the Supreme Court. The litigation of the merits and substantial issues of this controversy is
now long overdue and must proceed without further delay.chanrob1es virtua1 1aw 1ibrary

WHEREFORE, in view of all the foregoing, the instant petition is DENIED for lack of merit, and the case is
REMANDED to the Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to determine the proper
docket fee based on the estimated amount that plaintiffs therein seek to collect, and direct said plaintiffs to pay the
same within a reasonable time, provided the applicable prescriptive or reglementary period has not yet expired.
Thereafter, the trial court is ORDERED to conduct the appropriate proceedings in Civil Case No. 416-C.

Costs against petitioner.

SO ORDERED.
 G.R. No. 113725               June 29, 2000

JOHNNY S. RABADILLA,1 petitioner,
vs.
COURT OF APPEALS AND MARIA MARLENA2 COSCOLUELLA Y BELLEZA
VILLACARLOS, respondents.

DECISION

PURISIMA, J.:

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

The antecedent facts are as follows:

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

"FIRST

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

(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942),
which is registered in my name according to the records of the Register of Deeds of Negros Occidental.

(b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights which I shall
set forth hereinbelow, shall be inherited and acknowledged by the children and spouse of Jorge Rabadilla.

xxx

FOURTH

(a)....It is also my command, in this my addition (Codicil), that should I die and Jorge Rabadilla shall have already
received the ownership of the said Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title
No. RT-4002 (10942), and also at the time that the lease of Balbinito G. Guanzon of the said lot shall expire, Jorge
Rabadilla shall have the obligation until he dies, every year to give to Maria Marlina Coscolluela y Belleza, Seventy
(75) (sic) piculs of Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said Maria Marlina
Coscolluela y Belleza dies.

FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10492), shall have the obligation to still give yearly, the sugar as
specified in the Fourth paragraph of his testament, to Maria Marlina Coscolluela y Belleza on the month of
December of each year.

SIXTH

I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to whom I have left and
bequeathed, and his heir shall later sell, lease, mortgage this said Lot, the buyer, lessee, mortgagee, shall have also
the obligation to respect and deliver yearly ONE HUNDRED (100) piculs of sugar to Maria Marlina Coscolluela y
Belleza, on each month of December, SEVENTY FIVE (75) piculs of Export and TWENTY FIVE (25) piculs of
Domestic, until Maria Marlina shall die, lastly should the buyer, lessee or the mortgagee of this lot, not have
respected my command in this my addition (Codicil), Maria Marlina Coscolluela y Belleza, shall immediately seize
this Lot No. 1392 from my heir and the latter's heirs, and shall turn it over to my near desendants, (sic) and the latter
shall then have the obligation to give the ONE HUNDRED (100) piculs of sugar until Maria Marlina shall die. I
further command in this my addition (Codicil) that my heir and his heirs of this Lot No. 1392, that they will obey
and follow that should they decide to sell, lease, mortgage, they cannot negotiate with others than my near
descendants and my sister."4

Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and Transfer
Certificate of Title No. 44498 thereto issued in his name.

Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner), Aurora,
Ofelia and Zenaida, all surnamed Rabadilla.

On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as Civil Case
No. 5588, before Branch 52 of the Regional Trial Court in Bacolod City, against the above-mentioned heirs of Dr.
Jorge Rabadilla, to enforce the provisions of subject Codicil. The Complaint alleged that the defendant-heirs
violated the conditions of the Codicil, in that:

1. Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic Planters Bank in
disregard of the testatrix's specific instruction to sell, lease, or mortgage only to the near descendants and
sister of the testatrix.

2. Defendant-heirs failed to comply with their obligation to deliver one hundred (100) piculs of sugar (75
piculs export sugar and 25 piculs domestic sugar) to plaintiff Maria Marlena Coscolluela y Belleza from
sugar crop years 1985 up to the filing of the complaint as mandated by the Codicil, despite repeated
demands for compliance.

3. The banks failed to comply with the 6th paragraph of the Codicil which provided that in case of the sale,
lease, or mortgage of the property, the buyer, lessee, or mortgagee shall likewise have the obligation to
deliver 100 piculs of sugar per crop year to herein private respondent.

The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return-Lot No. 1392 to the
surviving heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 in the name of the deceased, Dr. Jorge
Rabadilla, and the issuance of a new certificate of title in the names of the surviving heirs of the late Aleja Belleza.

On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order of Default was
lifted, with respect to defendant Johnny S. Rabadilla, who filed his Answer, accordingly.

During the pre-trial, the parties admitted that:

On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law of the herein
petitioner who was lessee of the property and acting as attorney-in-fact of defendant-heirs, arrived at an amicable
settlement and entered into a Memorandum of Agreement on the obligation to deliver one hundred piculs of sugar,
to the following effect:

"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will be delivered not
later than January of 1989, more specifically, to wit:

75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our names, Mary Rose Rabadilla y Azurin
or Alan Azurin, during December of each sugar crop year, in Azucar Sugar Central; and, this is considered
compliance of the annuity as mentioned, and in the same manner will compliance of the annuity be in the next
succeeding crop years.

That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied in cash equivalent of
the number of piculs as mentioned therein and which is as herein agreed upon, taking into consideration the
composite price of sugar during each sugar crop year, which is in the total amount of ONE HUNDRED FIVE
THOUSAND PESOS (P105,000.00).

That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable on or before the
end of December of every sugar crop year, to wit:

For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1988-89;

For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1989-90;

For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1990-91; and

For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1991-92."5

However, there was no compliance with the aforesaid Memorandum of Agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988 -1989.

On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the complaint and disposing as
follows:

"WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is prematurely filed as no
cause of action against the defendants has as yet arose in favor of plaintiff. While there maybe the non-performance
of the command as mandated exaction from them simply because they are the children of Jorge Rabadilla, the title
holder/owner of the lot in question, does not warrant the filing of the present complaint. The remedy at bar must fall.
Incidentally, being in the category as creditor of the left estate, it is opined that plaintiff may initiate the intestate
proceedings, if only to establish the heirs of Jorge Rabadilla and in order to give full meaning and semblance to her
claim under the Codicil.

In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED without prejudice.

SO ORDERED."6

On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial court;
ratiocinating and ordering thus:
"Therefore, the evidence on record having established plaintiff-appellant's right to receive 100 piculs of sugar
annually out of the produce of Lot No. 1392; defendants-appellee's obligation under Aleja Belleza's codicil, as heirs
of the modal heir, Jorge Rabadilla, to deliver such amount of sugar to plaintiff-appellant; defendants-appellee's
admitted non-compliance with said obligation since 1985; and, the punitive consequences enjoined by both the
codicil and the Civil Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in case of such
non-compliance, this Court deems it proper to order the reconveyance of title over Lot No. 1392 from the estates of
Jorge Rabadilla to the estate of Aleja Belleza. However, plaintiff-appellant must institute separate proceedings to re-
open Aleja Belleza's estate, secure the appointment of an administrator, and distribute Lot No. 1392 to Aleja
Belleza's legal heirs in order to enforce her right, reserved to her by the codicil, to receive her legacy of 100 piculs of
sugar per year out of the produce of Lot No. 1392 until she dies.

Accordingly, the decision appealed from is SET ASIDE and another one entered ordering defendants-appellees, as
heirs of Jorge Rabadilla, to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate of
Aleja Belleza.

SO ORDERED."7

Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this Court via the
present petition, contending that the Court of Appeals erred in ordering the reversion of Lot 1392 to the estate of the
testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in ruling that the testamentary institution of
Dr. Jorge Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code.

The petition is not impressed with merit.

Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article 882 of the
New Civil Code on modal institutions and in deviating from the sole issue raised which is the absence or prematurity
of the cause of action. Petitioner maintains that Article 882 does not find application as there was no modal
institution and the testatrix intended a mere simple substitution - i.e. the instituted heir, Dr. Jorge Rabadilla, was to
be substituted by the testatrix's "near descendants" should the obligation to deliver the fruits to herein private
respondent be not complied with. And since the testatrix died single and without issue, there can be no valid
substitution and such testamentary provision cannot be given any effect.

The petitioner theorizes further that there can be no valid substitution for the reason that the substituted heirs are not
definite, as the substituted heirs are merely referred to as "near descendants" without a definite identity or reference
as to who are the "near descendants" and therefore, under Articles 8438 and 8459 of the New Civil Code, the
substitution should be deemed as not written.

The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals deviated from the
issue posed before it, which was the propriety of the dismissal of the complaint on the ground of prematurity of
cause of action, there was no such deviation. The Court of Appeals found that the private respondent had a cause of
action against the petitioner. The disquisition made on modal institution was, precisely, to stress that the private
respondent had a legally demandable right against the petitioner pursuant to subject Codicil; on which issue the
Court of Appeals ruled in accordance with law.

It is a general rule under the law on succession that successional rights are transmitted from the moment of death of
the decedent10 and compulsory heirs are called to succeed by operation of law. The legitimate children and
descendants, in relation to their legitimate parents, and the widow or widower, are compulsory heirs.11 Thus, the
petitioner, his mother and sisters, as compulsory heirs of the instituted heir, Dr. Jorge Rabadilla, succeeded the latter
by operation of law, without need of further proceedings, and the successional rights were transmitted to them from
the moment of death of the decedent, Dr. Jorge Rabadilla.

Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a person,
not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by virtue of subject Codicil
were transmitted to his forced heirs, at the time of his death. And since obligations not extinguished by death also
form part of the estate of the decedent; corollarily, the obligations imposed by the Codicil on the deceased Dr. Jorge
Rabadilla, were likewise transmitted to his compulsory heirs upon his death.

In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the condition that
the usufruct thereof would be delivered to the herein private respondent every year. Upon the death of Dr. Jorge
Rabadilla, his compulsory heirs succeeded to his rights and title over the said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved to herein private respondent. Such obligation of the
instituted heir reciprocally corresponds to the right of private respondent over the usufruct, the fulfillment or
performance of which is now being demanded by the latter through the institution of the case at bar. Therefore,
private respondent has a cause of action against petitioner and the trial court erred in dismissing the complaint
below.

Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is not applicable because what
the testatrix intended was a substitution - Dr. Jorge Rabadilla was to be substituted by the testatrix's near
descendants should there be noncompliance with the obligation to deliver the piculs of sugar to private respondent.

Again, the contention is without merit.

Substitution is the designation by the testator of a person or persons to take the place of the heir or heirs first
instituted. Under substitutions in general, the testator may either (1) provide for the designation of another heir to
whom the property shall pass in case the original heir should die before him/her, renounce the inheritance or be
incapacitated to inherit, as in a simple substitution,12 or (2) leave his/her property to one person with the express
charge that it be transmitted subsequently to another or others, as in a fideicommissary substitution. 13 The Codicil
sued upon contemplates neither of the two.

In simple substitutions, the second heir takes the inheritance in default of the first heir by reason of incapacity,
predecease or renunciation.14 In the case under consideration, the provisions of subject Codicil do not provide that
should Dr. Jorge Rabadilla default due to predecease, incapacity or renunciation, the testatrix's near descendants
would substitute him. What the Codicil provides is that, should Dr. Jorge Rabadilla or his heirs not fulfill the
conditions imposed in the Codicil, the property referred to shall be seized and turned over to the testatrix's near
descendants.

Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a fideicommissary
substitution, the first heir is strictly mandated to preserve the property and to transmit the same later to the second
heir.15 In the case under consideration, the instituted heir is in fact allowed under the Codicil to alienate the property
provided the negotiation is with the near descendants or the sister of the testatrix. Thus, a very important element of
a fideicommissary substitution is lacking; the obligation clearly imposing upon the first heir the preservation of the
property and its transmission to the second heir. "Without this obligation to preserve clearly imposed by the testator
in his will, there is no fideicommissary substitution."16 Also, the near descendants' right to inherit from the testatrix
is not definite. The property will only pass to them should Dr. Jorge Rabadilla or his heirs not fulfill the obligation to
deliver part of the usufruct to private respondent.

Another important element of a fideicommissary substitution is also missing here. Under Article 863, the second
heir or the fideicommissary to whom the property is transmitted must not be beyond one degree from the first heir or
the fiduciary. A fideicommissary substitution is therefore, void if the first heir is not related by first degree to the
second heir.17 In the case under scrutiny, the near descendants are not at all related to the instituted heir, Dr. Jorge
Rabadilla.

The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil is in the
nature of a modal institution and therefore, Article 882 of the New Civil Code is the provision of law in point.
Articles 882 and 883 of the New Civil Code provide:

Art. 882. The statement of the object of the institution or the application of the property left by the testator, or the
charge imposed on him, shall not be considered as a condition unless it appears that such was his intention.
That which has been left in this manner may be claimed at once provided that the instituted heir or his heirs give
security for compliance with the wishes of the testator and for the return of anything he or they may receive,
together with its fruits and interests, if he or they should disregard this obligation.

Art. 883. When without the fault of the heir, an institution referred to in the preceding article cannot take effect in
the exact manner stated by the testator, it shall be complied with in a manner most analogous to and in conformity
with his wishes.

The institution of an heir in the manner prescribed in Article 882 is what is known in the law of succession as
an institucion sub modo or a modal institution. In a modal institution, the testator states (1) the object of the
institution, (2) the purpose or application of the property left by the testator, or (3) the charge imposed by the testator
upon the heir.18 A "mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy of his
rights to the succession.19 On the other hand, in a conditional testamentary disposition, the condition must happen or
be fulfilled in order for the heir to be entitled to succeed the testator. The condition suspends but does not obligate;
and the mode obligates but does not suspend.20 To some extent, it is similar to a resolutory condition.21

From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the testatrix intended that subject
property be inherited by Dr. Jorge Rabadilla. It is likewise clearly worded that the testatrix imposed an obligation on
the said instituted heir and his successors-in-interest to deliver one hundred piculs of sugar to the herein private
respondent, Marlena Coscolluela Belleza, during the lifetime of the latter. However, the testatrix did not make Dr.
Jorge Rabadilla's inheritance and the effectivity of his institution as a devisee, dependent on the performance of the
said obligation. It is clear, though, that should the obligation be not complied with, the property shall be turned over
to the testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under subject Codicil is
evidently modal in nature because it imposes a charge upon the instituted heir without, however, affecting the
efficacy of such institution.

Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed upon the heir should
not be considered a condition unless it clearly appears from the Will itself that such was the intention of the testator.
In case of doubt, the institution should be considered as modal and not conditional.22

Neither is there tenability in the other contention of petitioner that the private respondent has only a right of usufruct
but not the right to seize the property itself from the instituted heir because the right to seize was expressly limited to
violations by the buyer, lessee or mortgagee.

In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the application of any of its
provisions, the testator's intention is to be ascertained from the words of the Will, taking into consideration the
circumstances under which it was made.23 Such construction as will sustain and uphold the Will in all its parts must
be adopted.24

Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs of sugar
yearly to Marlena Belleza Coscuella. Such obligation is imposed on the instituted heir, Dr. Jorge Rabadilla, his
heirs, and their buyer, lessee, or mortgagee should they sell, lease, mortgage or otherwise negotiate the property
involved. The Codicil further provides that in the event that the obligation to deliver the sugar is not respected,
Marlena Belleza Coscuella shall seize the property and turn it over to the testatrix's near descendants. The non-
performance of the said obligation is thus with the sanction of seizure of the property and reversion thereof to the
testatrix's near descendants. Since the said obligation is clearly imposed by the testatrix, not only on the instituted
heir but also on his successors-in-interest, the sanction imposed by the testatrix in case of non-fulfillment of said
obligation should equally apply to the instituted heir and his successors-in-interest.

Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement, the said obligation
imposed by the Codicil has been assumed by the lessee, and whatever obligation petitioner had become the
obligation of the lessee; that petitioner is deemed to have made a substantial and constructive compliance of his
obligation through the consummated settlement between the lessee and the private respondent, and having
consummated a settlement with the petitioner, the recourse of the private respondent is the fulfillment of the
obligation under the amicable settlement and not the seizure of subject property.

Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person disposes of his property,
to take effect after his death.25 Since the Will expresses the manner in which a person intends how his properties be
disposed, the wishes and desires of the testator must be strictly followed. Thus, a Will cannot be the subject of a
compromise agreement which would thereby defeat the very purpose of making a Will.

WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated December 23,
1993, in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to costs

SO ORDERED.
 THIRD DIVISION

G.R. No. 104482             January 22, 1996

BELINDA TAÑEDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ
TAÑEDO, representing her minor daughter VERNA TAÑEDO, petitioners,
vs.
THE COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND TERESITA BARERA
TAÑEDO, respondents.

DECISION

PANGANIBAN, J.:

Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in ownership?
What is the probative value of the lower court's finding of good faith in registration of such sales in the registry of
property? These are the main questions raised in this Petition for review on certiorari under Rule 45 of the Rules of
Court to set aside and reverse the Decision1 of the Court of Appeals2 in CA-G.R. CV NO. 24987 promulgated on
September 26, 1991 affirming the decision of the Regional Trial Court, Branch 63, Third Judicial Region, Tarlac,
Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration thereof, promulgated on May 27, 1992.

By the Court's Resolution on October 25, 1995, this case (along with several others) was transferred from the First
to the Third Division and after due deliberation, the Court assigned it to the undersigned ponente for the writing of
this Decision.

The Facts

On October 20, 1962, Lazardo Tañedo executed a notarized deed of absolute sale in favor of his eldest brother,
Ricardo Tañedo, and the latter's wife, Teresita Barera, private respondents herein, whereby he conveyed to the latter
in consideration of P1,500.00, "one hectare of whatever share I shall have over Lot No. 191 of the cadastral survey
of Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds of Tarlac", the said property
being his "future inheritance" from his parents (Exh. 1). Upon the death of his father Matias, Lazaro executed an
"Affidavit of Conformity" dated February 28, 1980 (Exh. 3) to "re-affirm, respect, acknowledge and validate the
sale I made in 1962." On January 13, 1981, Lazaro executed another notarized deed of sale in favor of private
respondents covering his "undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 . . . " (Exh. 4). He
acknowledged therein his receipt of P10,000.00 as consideration therefor. In February 1981, Ricardo learned that
Lazaro sold the same property to his children, petitioners herein, through a deed of sale dated December 29, 1980
(Exh. E). On June 7, 1982, private respondents recorded the Deed of Sale (Exh. 4) in their favor in the Registry of
Deeds and the corresponding entry was made in Transfer Certificate of Title No. 166451 (Exh. 5).

Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by Lazaro
in favor of private respondents covering the property inherited by Lazaro from his father.

Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of Sale" dated December 29, 1980 (Exit.
E). Conveying to his ten children his allotted portion tinder the extrajudicial partition executed by the heirs of
Matias, which deed included the land in litigation (Lot 191).

Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias dated
December 28, 1978, stating that it was his desire that whatever inheritance Lazaro would receive from him should
be given to his (Lazaro's) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed by Lazaro in
the presence of two witnesses, wherein he confirmed that he would voluntarily abide by the wishes of his father,
Matias, to give to his (Lazaro's) children all the property he would inherit from the latter (Exh. B); and (3) a letter
dated January 1, 1980 of Lazaro to his daughter, Carmela, stating that his share in the extrajudicial settlement of the
estate of his father was intended for his children, petitioners herein (Exh. C).

Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale" dated March 12, 1981
(Exh. 6), wherein Lazaro revoked the sale in favor of petitioners for the reason that it was "simulated or fictitious
without any consideration whatsoever".

Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually repudiated the
contents of the Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private
respondents. However, Lazaro testified that he sold the property to Ricardo, and that it was a lawyer who induced
him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a "drink" (TSN
September 18, 1985, pp. 204-205).

The trial court decided in favor of private respondents, holding that petitioners failed "to adduce a proponderance of
evidence to support (their) claim." On appeal, the Court of Appeals affirmed the decision of the trial court, ruling
that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid and that its registration in good faith vested title in
said respondents.

The Issues

Petitioners raised the following "errors" in the respondent Court, which they also now allege in the instant Petition:

I. The trial court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer) is
merely voidable or annulable and not void ab initio pursuant to paragraph 2 of Article 1347 of the New
Civil Code involving as it does a "future inheritance".

II. The trial court erred in holding that defendants-appellees acted in good faith in registering the deed of
sale of January 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of the
land in question passed on to defendants-appellees.

III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence of
plaintiffs-appellants which clearly established by preponderance of evidence that they are indeed the
legitimate and lawful owners of the property in question.

IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the established
facts are illogical and off-tangent.

From the foregoing, the issues may be restated as follows:

1. Is the sale of a future inheritance valid?

2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a
deed of sale covering the same property to the same buyers valid?

3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good
faith in registering the said subsequent deed of sale and (b) in "failing to consider petitioners' evidence"?
Are the conclusions of the respondent Court "illogical and off-tangent"?

The Court's Ruling

At the outset, let it be clear that the "errors" which are reviewable by this Court in this petition for review
on certiorari are only those allegedly committed by the respondent Court of Appeals and not directly those of the
trial court, which is not a party here. The "assignment of errors" in the petition quoted above are therefore totally
misplaced, and for that reason, the petition should be dismissed. But in order to give the parties substantial justice
we have decided to delve into the issues as above re-stated. The errors attributed by petitioners to the latter (trial)
court will be discussed only insofar as they are relevant to the appellate court's assailed Decision and Resolution.

The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision
conceded "it may be legally correct that a contract of sale of anticipated future inheritance is null and void." 3

But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, "(n)o
contract may be entered into upon a future inheritance except in cases expressly authorized by law."

Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of any
obligation between the parties.

Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the 1962 sale,
is also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even private
respondents in their memorandum4 concede this.

However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13, 1981 in
favor of private respondents covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot No. 191,
which was subsequently registered on June 7, 1982; and (b) the deed of sale dated December 29, 1980 in favor of
petitioners covering the same property. These two documents were executed after the death of Matias (and his
spouse) and after a deed of extra-judicial settlement of his (Matias') estate was executed, thus vesting in Lazaro
actual title over said property. In other words, these dispositions, though conflicting, were no longer infected with
the infirmities of the 1962 sale.

Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No. 191, citing as
authority the trial court's decision. As earlier pointed out, what is on review in these proceedings by this Court is the
Court of Appeals' decision — which correctly identified the subject matter of the January 13, 1981 sale to be the
entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the same property disposed of on December 29,
1980 in favor of petitioners.

Critical in determining which of these two deeds should be given effect is the registration of the sale in favor of
private respondents with the register of deeds on June 7, 1982.

Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as follows:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good
faith.

The property in question is land, an immovable, and following the above-quoted law, ownership shall belong to the
buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor of
private respondents was later than the one in favor of petitioners, ownership would vest in the former because of the
undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all.
Petitioners contend that they were in possession of the property and that private respondents never took possession
thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other
who has not registered his title, even if the latter is in actual possession of the immovable property. 5

As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it was done in
bad faith. On this issue, the respondent Court ruled;

Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in bad
faith when they registered the Deed of Sale in their favor as appellee Ricardo already knew of the execution
of the deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Tañedo to the
effect that defendant Ricardo Tañedo called her up on January 4 or 5, 1981 to tell her that he was already
the owner of the land in question "but the contract of sale between our father and us were (sic) already
consumated" (pp. 9-10, tsn, January 6, 1984). This testimony is obviously self-serving, and because it was a
telephone conversation, the deed of sale dated December 29, 1980 was not shown; Belinda merely told her
uncle that there was already a document showing that plaintiffs are the owners (p. 80). Ricardo Tañedo
controverted this and testified that he learned for the first time of the deed of sale executed by Lazaro in
favor of his children "about a month or sometime in February 1981" (p. 111, tsn, Nov. 28, 1984). . . .6

The respondent Court, reviewing the trial court's findings, refused to overturn the latter's assessment of the
testimonial evidence, as follows;

We are not prepared to set aside the finding of the lower court upholding Ricardo Tañedo's testimony, as it
involves a matter of credibility of witnesses which the trial judge, who presided at the hearing, was in a
better position to resolve. (Court of Appeals' Decision, p. 6.)

In this connection, we note the tenacious allegations made by petitioners, both in their basic petition and in their
memorandum, as follows:

1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo "by fraud and deceit
and with foreknowledge" that the property in question had already been sold to petitioners, made Lazaro
execute the deed of January 13, 1981;

2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was paid
at the time of the execution of the deed of sale, contrary to the written acknowledgment, thus showing bad
faith;

3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of
petitioners "was tainted with fraud or deceit."

4. There is allegedly enough evidence to show that private respondents "took undue advantage over the
weakness and unschooled and pitiful situation of Lazaro Tañedo . . ." and that respondent Ricardo Tañedo
"exercised moral ascendancy over his younger brother he being the eldest brother and who reached fourth
year college of law and at one time a former Vice-Governor of Tarlac, while his younger brother only
attained first year high school . . . ;

5. The respondent Court erred in not giving credence to petitioners' evidence, especially Lazaro
Tañedo's Sinumpaang Salaysay dated July 27, 1982 stating that Ricardo Tañedo deceived the former in
executing the deed of sale in favor of private respondents.

To be sure, there are indeed many conflicting documents and testimonies as well as arguments over their probative
value and significance. Suffice it to say, however, that all the above contentions involve questions of fact,
appreciation of evidence and credibility of witnesses, which are not proper in this review. It is well-settled that the
Supreme Court is not a trier of facts. In petitions for review under Rule 45 of the Revised Rules of Court, only
questions of law may be raised and passed upon. Absent any whimsical or capricious exercise of judgment, and
unless the lack of any basis for the conclusions made by the lower courts be amply demonstrated, the Supreme Court
will not disturb their findings. At most, it appears that petitioners have shown that their evidence was not believed
by both the trial and the appellate courts, and that the said courts tended to give more credence to the evidence
presented by private respondents. But this in itself is not a reason for setting aside such findings. We are far from
convinced that both courts gravely abused their respective authorities and judicial prerogatives.

As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development
Corp.7

The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final
and conclusive and may not be reviewed on appeal. Among the exceptional circumstances where a reassessment of
facts found by the lower courts is allowed are when the conclusion is a finding grounded entirely on speculation,
surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible; when there is grave
abuse of discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; when
the findings went beyond the issues of the case and the same are contrary to the admissions of both appellant and
appellee. After a careful study of the case at bench, we find none of the above grounds present to justify the re-
evaluation of the findings of fact made by the courts below.

In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. vs. Hon. Court of
Appeals, et al.8 is equally applicable to the present case:

We see no valid reason to discard the factual conclusions of the appellate court. . . . (I)t is not the function
of this Court to assess and evaluate all over again the evidence, testimonial and documentary, adduced by
the parties, particularly where, such as here, the findings of both the trial court and the appellate court on
the matter coincide. (emphasis supplied)

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. No Costs.

SO ORDERED.