Compilation Rule 87-Rule 96 (Complete)

8/10/2019 Compilation Rule 87-Rule 96 (Complete)

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Rule87 nos.1-4 MelMel Bernardino (submitted)Rule87 no.5 and rule no. 88 nos.1-3 Ortiz (submitted)Rule89 nos.1-4 Zarah Maglines (submitted)Rule89 nos.5-8 Delight Calimot (submitted)

Rule89 nos.9,10 and rule 90 nos. 1,2 Emman Cahilog (Submitted)Rule 90 nos.3-6 macmac Manabat (submitted)Rule90 nos. 7-10 Charmaine Barcelona (submitted)Rule 90 nos.11-14 Mary ann constantino (submitted)Rule91 nos.1-4 Mac-Mac Combista (submitted)Rule92 no. 5, all cases general guardians and guardianships and 1 case underrule96- nino Nio Gonzaga Ortonio. (submitted)

Rule 87:

ACTIONS BY AND AGAINST EXECUTORS ANDADMINISTRATORS

RULE 87, CASE NO. 1De Bautista vs. De Guzman

Ponente: Gutierrez, Jr.,

FACTS:

Numeriano Bautista, husband and father of the plaintiffs-appellees, respectively,was a passenger of jeepney, owned and operated by Rosendo de Guzman,deceased husband and father of defendants-appellants, respectively, as one ofthe jeepneys used in his transportation business. Eugenio Medrano y Torres wasemployed by said Rosendo de Guzman as the driver of said jeepney. Said driverdrove and managed said jeepney in a negligent and reckless manner and, as aresult, the jeepney turned turtle and, consequently, passenger Numeriano

Bautista sustained physical injuries which caused his death. Eugenio Medrano, the driver, was convicted of homicide through reckless

imprudence and to indemnify the heirs of Numeriano Bautista, plaintiffs-appelleesherein. A writ of execution was issued against said driver, Eugenio Medrano butthe same was returned to the Court unsatisfied.

Rosendo de Guzman died.

Plaintiffs-appellees filed a complaint against defendants-appellants allegingsubsidiary liability but Rosendo de Guzman and later the herein defendants-appellants refused to pay the same.

Defendants-appellants through counsel filed a motion to dismiss predicated ontwo grounds, namely, that the lower court had no jurisdiction over the subjectmatter of the litigation and that the complaint stated no cause of action. Insupport of said motion, they maintained that the suit was for a money claimagainst the supposed debtor who was already dead and as such it should befiled in testate or intestate proceedings or, in the absence of such proceedings,after the lapse of thirty (30) days, the creditors should initiate such proceedings,that the heirs could not be held liable therefor since there was no allegation thatthey assumed the alleged obligation.


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The lower court sustained the motion to dismiss.

Plaintiffs- appellants filed a second complaint they further allege that on June 12,1952, Rosendo de Guzman died intestate and that intestate proceedings werefiled in the same court.

Defendants-appellants again filed a motion to dismiss alleging the same grounds

as those interposed in the first complaint but adding the further ground of resjudicata.

ISSUE:

WHETHER OR NOT PLAINTIFFS-APPELLEES CAN STILL CLAIM DAMAGES OVERTHE ESTATE OF ROSENDO DE GUZMAN DESPITE THE ESTATE WAS FINALLYDISTRIBUTED TO THE HEIRS.

HELD:

The requirement therein is for the purpose of protecting the estate of the deceased. Theexecutor or administrator is informed of the claims against it, thus enabling him toexamine each claim and to determine whether it is a proper one which should beallowed. Therefore, upon the dismiss of the first complaint of herein plaintiffs-appelleesin Civil Case No. 2050, they should have presented their claims before the intestateproceedings filed in the same court and docketed as Special Proceedings No. 1303-P.Instead of doing so, however. the plaintiffs-appellees slept on their right. They allowedsaid proceedings to terminate and the properties to be distributed to the heirs pursuantto a project of partition before instituting this separate action. Such do not sanctioned bythe above rule for it strictly requires the prompt presentation and disposition of claims

against the decedent's estate in order to settle the affairs of the estate as soon aspossible, pay off its debts and distribute the residue. (See Py Eng Chong v. Herrera, 70SCRA 130). With the exception provided for in the above rule, the failure of hereinplaintiffs-appellees to present their claims before the intestate proceedings of the estateof Rosendo de Guzman within the prescribed period constituted a bar to a subsequentclaim against the estate or a similar action of the same import.

Therefore, it was an error on the part of the trial court to hold that the plaintiffs-appelleeshad a cause of action against the defendants-appellants who are the heirs of thedeceased against whom the liability is sought to be enforced, much less takecognizance of the complaint. As in the first complaint, said court could not have

assumed jurisdiction over the second case for the simple reason that it was no longeracting as a probate court which was the proper forum to file such complaint. Thetermination of the intestate proceedings and the distribution of the estate to the heirs didnot alter the fact that plaintiffs-appellees' claim was a money claim which should havebeen presented before the probate court. The liability of the late Rosendo de Guzmanarose from the breach of his obligations under the contract of carriage between him andthe unfortunate passenger. The obligations are spelled out by law but the liability arosefrom a breach of contractual obligations. The resulting claim is a money claim.

The contingent claims must first have been established and allowed in the probate courtbefore the creditors can file an action directly, against the distributees. Such is not the

situation, however, in the case at bar. The complaint herein was filed after the intestateproceedings had terminated and the estate finally distributed to the heirs. If we are toallow the complaint to prosper and the trial court to take cognizance of the same, thenthe rules providing for the claims against the estate in a testate or intestate proceedingswithin a specific period would be rendered nugatory as a subsequent action for moneyagainst the distributees may be filed independently of such proceedings. This preciselyis what the rule seeks to prevent so as to avoid further delays in the settlement of the


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possession of the decedents assets. In case of fraudulent conveyances, a separateaction is necessary to recover these assets.Taken in this light, there is no reason why the trial court should disallow the examinationof the alleged transferees of the shares of stocks. This is only for purposes of elicitinginformation or securing evidence from persons suspected of concealing or conveying

some of the decedents properties to the prejudice of creditors. Petitioners admissionthat these persons are the decedents assignees does not automatically negateconcealment of the decedents assets on their part. The assignment might be simulatedso as to place the shares beyond the reach of creditors. In case the shares areeventually included in the estate, this inventory is merely provisional and is notdeterminative of the issue of ownership. A separate action is necessary fordetermination of ownership and recovery of possession.

RULE 87, CASE NO. 3Marshall vs. Antal

Ponente: Street, J.

FACTS:

Walter Toehl, for several years was the Manila manager of Behn, Meyer & Co.,H. Mij., a foreign corporation engaged in business in the Philippine Islands. At thesame time Carl Antholtz was a chemist and oil technologist, also living in Manila.

Toehl contracted for the services of Antholtz as manager of an oil mill.

It was therefore agreed that Antholtz would conduct the business in his ownname. Antholtz installed for Toehl a factory for the manufacture of coconut oil onthe property mentioned, and he proceeded thereafter to operate the concern inhis own name.

Toehl decided to establish the business in corporate form with a capital.

Antholtz happened to be the owner and holder of all the certificates of stock of acorporation known as A. Murray & Co., Ltd., a concern without capital, which hadtotally ceased to function.

Toehl assumed possession of the documents relating to this corporation with aview to reviving it as corporate owner of the oil plant above-mentioned.

Toehl transferred to it the parcel of land above-mentioned, with the factory and

machinery established thereon. Toehl died before the rehabilitation of A. Murray & Co., Ltd., was completed, but

a conveyance was executed by Toehl placing the land, with improvements, in thename of A. Murray & Co., Ltd.,

Meanwhile Antholtz was operating the oil mill under his contract with Toehl.

After Toehl's death the then manager of Behn, Meyer & Co., H. Mij., procuredEugen Marschall to be appointed administrator of the estate, and the presentaction was instituted by him the recover possession of the oil mill property above-mentioned and to hold Antholtz personally liable for certain personal propertypertaining to the oil mill and products of the same which have been sold by

Antholtz in the continuation of his duties as manager.

The plaintiff's case supposes that Toehl and Antholtz were in collusion. As a consequence of this supposed collusion, it is insisted for the plaintiff that

Antholtz is liable for everything which Toehl had taken from Behn, Meyer & Co.,H. Mij., and placed in the oil mill business.


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ISSUE:

WHETHER ANTHOLTZ IS LIABLE FOR THE PROCEEDS OF CERTAIN EFFECTSSOLD BY HIM AFTER THE DEATH OF TOEHL, AS WELL AS THE PROCEEDS OFTHE OUTPUT OF THE MILL WHILE ANTHOLTZ CONTINUED IN THE

MANAGEMENT.

HELD:

Any person, before the granting of letters testamentary or of administration on theestate of a deceased person, embezzles, or alienates, any of the effects of suchdeceased person, such person shall be liable to an action in favor of the executor oradministrator of such estate for double the value of the property sold, embezzled, oralienated, to be recovered for the benefit of the estate. But this provision has referenceprimarily to funds that are lost by embezzlement or alienation, and it cannot beunderstood as making the manager of a going concern liable for proceeds of sales

applied by him to the proper uses of the business, as occurred in this case. The proofshows that the personal property other than the products of the mill, sold by Antholtz inthe manner mentioned, was sold with the consent of the manager of Behn, Meyer &Co., H. Mij., and with the consent of the administrator of Walter Toehl, and the proceedsof these sales, as well as the proceeds of the products of the mill, were applied by

Antholtz to the obligations incurred by him in running the business, without the improperdiversion of a single cent. In article 280 of the Code of Commerce, it is provided that acontract of agency shall not be rescinded by the death or incapacity of the principal,although it may be revoked by his representatives. As the oil mill in Santo Ana was agoing concern, it was apparently to the interest of all persons concerned that itsoperation should continue, at least until the authority of Antholtz should be revoked bythe representative of Toehl, which does not appear to have been done prior to theaccomplishment of the acts complained of. Nor was there error in the action of the trialcourt in requiring the estate, as a condition of the taking over of this property, that itshould compensate or reimburse Antholtz to the extent stated in the dispositive part ofthe appealed decision.


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RULE 87, CASE NO. 4

Gutierrez vs. Barretto

Ponente: Makalintal, J.

FACTS:

Maria Gerardo Vda. de Barretto, owner of hectares of fishpond leased the same

to appellant Gutierrez.

The lessor having died, Gutierrez filed a claim.

Appellant commenced the instant ordinary civil action against the executrix of thetestate for the recovery of the amount. The complaint specifically charges

decedent Manila Gerardo Vda. de Barretto, is lessor, was having violated a

warranty in the lease contract again any damages the lessee might suffer by

reason of the claim of the government that several rivers and creeks of the public

domain were included in the fishponds.

ISSUE:

WHETHER OR NOT APPELLANTS CLAIM FOR DAMAGES BASED ON

UNREALIZED PROFITS IS A MONEY CLAIM AGAINST THE ESTATE OF THE

DECEASED MARIA GERARDO VDA. DE BARRETTO WITHIN THE PURVIEW OF

RULE 87, SECTION 5.

HELD:

The word "claims" as used in statutes requiring the presentation of claims against a

decedent's estate is generally construed to mean debts or demands of a pecuniary

nature which could have been enforced against the deceased in his lifetime and could

have been reduced to simple money judgments; and among these are those founded

upon contract. 21 Am. Jur. 579. The claim in this case is based on contract specifically, on a breach thereof. It falls squarely under section 5 of Rule 87 "Upon all

contracts by the decedent broken during his lifetime, even though they were personal to

the decedent in liability, the personal representative is answerable for the breach out of

the assets." 3 Schouler on Wills, Executors and Administrators, 6th Ed., 2395. A claim

for breach of a covenant in a deed of the decedent must be presented under a statute

requiring such presentment of all claims grounded on contract. Id. 2461; Clayton v.

Dinwoody, 93 P. 723; James v. Corvin, 51 P. 2nd 689.1

The only actions that may be instituted against the executor or administrator are those

to recover real or personal property from the estate, or to enforce a lien thereon, andactions to recover damages for an injury to person or property, real or personal. Rule

88, section 1. The instant suit is not one of them.


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CASE NO 5

RIOFERIOvs.COURT OF APPEALS[G.R. No. 129008. January 13, 2004]

Facts:

Alfonso P. Orfinada, Jr. died without a will leaving several personal and real properties. Privaterespondents discovered that petitioner Teodora Rioferio (the paramour) and her children executed an

Extrajudicial Settlement of Estate of a Deceased Person with Quitclaim, real estate mortgages and

transfers involving the properties of the estate of the decedent. To recover their rights, Alfonso Clyde P.Orfinada III filed a Petition for Letters of Administration praying that letters of administration

encompassing the estate of Alfonso P. Orfinada, Jr. be issued to him.

Issue: Whether the heirs (respondents) may bring suit to recover property of the estate pending theappointment of an administrator.

Ruling: YES.

Pending the filing of administration proceedings, the heirs without doubt have legal personality to

bring suit in behalf of the estate of the decedent in accordance with the provision of Article 777 of theNew Civil Code that (t)he rights to succession are transmitted from the moment of the death of thedecedent. The provision in turn is the foundation of the principle that the property, rights and obligations

to the extent and value of the inheritance of a person are transmitted through his death to another or othersby his will or by operation of law. Even if administration proceedings have already been commenced, the

heirs may still bring the suit if an administrator has not yet been appointed. The heirs cannot be expectedto wait for the appointment of an administrator; then wait further to see if the administrator appointedwould care enough to file a suit to protect the rights and the interests of the deceased; and in the meantime

do nothing while the rights and the properties of the decedent are violated or dissipated.

RULE 88: PAYMENT OF THE DEBTS OF THEESTATECASE 1(1) ARKONCEL v. LAGAMON

204 SCRA 560

FACTS: The late Casimiro F. Arkoncel died intestate on July 20, 1976 at Davao City (his residence at the time of hisdeath), leaving behind an estate with a probable value of about P241,020.00. Casimiro V. Arkoncel, Jr., the eldest

son, was appointed as judicial administrator. The Court of First Instance allowed him one year within which to dispose

of the estate and to pay the debts of the deceased.

FNCB Finance, respondent herein, filed on October 7, 1977 with the court a quoits claim against the estate for the

payment of certain debts incurred by the decedent during his lifetime. Casimiro Jr. and FNCB entered into an

amicable settlement. The intestate Court approved the amicable settlement in, directing the parties to strictly comply

with the terms thereof and the Judicial Administrator, "to pay the amounts agreed upon out of the estate finds and/or

properties within 30 days from receipt" of the said order.

Casimiro Jr. failed to settle the claim. Thus, on November 26, 1978 private respondent filed with the intestate court a

motion for execution praying for the issuance of a writ of execution to satisfy its claims, which the court granted.


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ISSUE: WON a writ of execution is the property remedy/procedure to satisfy money claims or for the payment ofdebts before an intestate court in an administration proceedings.

HELD: YES.

The Judicial Administrator voluntarily entered into an amicable settlement with the claimant FNCB Finance, which

was duly approved by the intestate Court. The rule is that a judgment rendered in accordance with a compromise

agreement is immediately executory unless a motion is filed to set aside the agreement on the ground of fraud,

mistake or duress in which case an appeal may be taken against the order denying the motion. It then becomes

ministerial for the lower court to order the execution of its final executory judgment.

Even more than a contract which may be enforced by ordinary action for specific performance, the compromise

agreement is part and parcel of the judgment, and may therefore be enforced as such by a writ of execution.

Finally, when the terms of an amicable settlement are violated, as in the case at bar, the remedy of the aggrievedparty is to move for its execution.

CASE 2(2) SANTOS v. MANARANG

27 Phil. 209

FACTS:Don Lucas de Ocampo died on November 18, 1906, possessed of certain real and personal property which,by his last will and testament, he left to his three children. The fourth clause of this will reads as follows:

I also declare that I have contracted the debts detailed below, and it is my desire that they may be religiously

paid by my wife and executors in the form and at the time agreed upon with my creditors.

Among the debts mentioned in the list referred to are two in favor of the plaintiff, Isidro Santos; one due on April 14,

1907, for P5,000, and various other described as falling due at different dates (the dates are not given) amounting to

the sum of P2,454. The will was duly probated and a committee was regularly appointed to hear and determine such

claims against the estate as might be presented. This committee submitted its report to the court on June 27, 1908.

On July 14, 1908, the plaintiff, Isidro Santos, presented a petition to the court asking that the committee be required

to reconvene and pass upon his claims against the estate which were recognized in the will of testator. This petition

was denied by the court, and on November 21, 1910, the plaintiff instituted the present proceedings against the

administratrix of the estate to recover the sums mentioned in the will as due him. Relief was denied in the courtbelow, and now appeals to this court.

ISSUE: WON petitioners claim is within the purview of the committees jurisdiction.

HELD: YES

The petition of the plaintiff filed on November 21, 1910, wherein he asks that the administratrix be compelled to pay

over to him the amounts mentioned in the will as debts due him appears to be nothing more nor less than a complaintinstituting an action against the administratrix for the recovery of the sum of money. Obviously, the plaintiff is not

seeking possession of or title to real property or specific articles of personal property. When a committee is appointed

as herein provided, no action or suit shall be commenced or prosecute against the executor or administrator upon a

claim against the estate to recover a debt due from the state; but actions to recover the seizing and possession of

real estate and personal chattels claimed by the estate may be commenced against him. (Sec. 699, Code Civ. Proc.)


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CASE 3

(3)WT CONSTRUCTION, INC. v. CAETE

GR 157287, February 12, 2008

FACTS: Juliana vda. De Cabahug filed a case for the settlement of the estate of her deceased husband, AlbertoCabahug, before the Regional Trial Court (RTC) of Mandaue City, Branch 55, presided by public respondent, Judge

Ulric R. Caete.

Ciriaco Cabahug, the administrator of the estate and heir of Alberto, was granted the authority to sell one of the

properties of the estate to defray the expenses for the payment of taxes due from the estate. Ciriaco entered into an

Agreement for Sale of Land with Downpayment with WT Construction, Inc. for P8,691,000. WT Construction made a

50% downpayment, while the balance was to be paid immediately after the land is free from all

occupants/obstructions . They also agreed that if the buyer will be the one to handle the clearing or ejectment of

occupants, all the expenses incurred thereto shall be charged to and be deducted from the remaining balance

payable.

WT Constuction took steps in clearing the property of its occupants by filing a complaint for ejectment in 1998 with

the Municipal Trial Court in Cities, Branch 3,Mandaue City. But it was discovered that Ciriaco did not inform his co-

heirs of the sale. He appropriated the amount paid by petitioner, so Judge Caete issued an Order on August 19,

1997, relieving Ciriaco of his functions as administrator and directing him to render an accounting of all the properties

and assets of the estate.

Consequently, Administrator Linda Cabahug-Antigue, along with her co-heirs, demanded from petitioner the paymentof the balance of the purchase price. Petitioner refused to pay.

Judge Caete ordered that if no manifestation is filed, WT Construction is further ordered to pay the estate of Alberto

Cabahug the amount of P4,259,400.00 less expenses incurred in the ejectment case within a period of fifteen (15)

days, otherwise, failure to do so will prompt the court to issue a writ of execution. WT construction motion for

reconsideration was denied, so a Writ of Execution was granted.

ISSUE: WON a probate court has the jurisdiction to determine the rights and obligations of the parties in acontract, one of which is a private corporation.

HELD: YES.

It is but logical that probate/estate courts can enforce obligations under such a deed of sale. Otherwise, they would

not be able to secure the proceeds to pay for the taxes and this would defeat the purpose of the proceedings to settle

the estate. Stated otherwise, the power to enforce obligations under the deed of sale of a property ordered sold to

pay debts of the estate is but a necessary incident of the power of a probate/estate court to order and effect such sale

in the first place.


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RULE 89: SALES, MORTGAGES,AND OTHERENCUMBRANCES OF PROPERTY OFDECEDENT

CASE 1Rule 89

Case No. 1

Julita Go Ong vs CA

G.R. No. L-75884 September 24, 1987

Ponente: Paras, J.

FACTS:

Two parcels of land under 1 TCT are in the name of Alfredo Ong married to Julita Go Ong. Alfredo died and Julita Go Ong was

appointed administratrix of her husbands estate. Julita thereafter mortgaged 1 lot to Allied Banking Corp. to secure a loan.

On the loan there was due a sum and Allied tried to collect it from Julita.

Hence, the complaint alleging nullity of the contract for lack of judicial approval which the bank had allegedly promised to secure

from the court. In response thereto, the bank averred that it was Julita who promised to secure the courts approval.

ISSUE: WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER PETITIONERS

ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL.

HELD: Mortgage is valid

Petitioner, asserting that the mortgage is void for want of judicial approval, quoted Section 7 of Rule 89 of the Rules of Court . The

CA aptly ruled that Section 7 of Rule 89 of the Rules of Court is not applicable, since the mortgage was constituted in her personal

capacity and not in her capacity as administratrix of the estate of her husband. Sec. 7, Art. 89 of the Civil Code applies in a case

where judicial approval has to be sought in connection with, for instance, the sale or mortgage of property under administration for

the payment, say of a conjugal debt, and even here, the conjugal and hereditary shares of the wife are excluded from the requisite

judicial approval for the reason already adverted to hereinabove, provided of course no prejudice is caused others, including the

government.

The mortgage constituted on the property under administration, by authority of the petitioner is valid, notwithstanding lack of judicial

approval with respect to her conjugal share and to her hereditary rights. The fact that what had been mortgaged was in custodial

legis is immaterial, insofar as her conjugal share and hereditary share in the property is concerned, for after all, she was the

absolute owner thereof.

Sec. 7, Rule 89 of the Rules of Court cannot adversely affect the substantiverights of private respondent to dispose of her ideal [not

inchoate, for the conjugal partnership ended with her husbands de ath and her hereditary rights accrued from the moment of the

death of the decedent.

CASE 2

Rule 89

Case No. 2

Maneclang vs Baun

G.R. No.27876. April 22, 1992


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Ponente: Davide Jr.

Gist: The Core issue of this case is the validity of a sale of a parcel of land by the administrator of an intestate estate made pursuant

to a petition for authority to sell and an order granting it which were filed and entered, respectively, without notice to the heirs of thedecedents.

Facts:

Margarita died intestate, leaving nine children. One of them, Oscar Maneclang, petitioned for the settlement of the estate. No

guardian ad litem was appointed for any of the minor heirs.

On September 1949, despite the absence of notice to the heirs, the intestate court issued an Order "authorizing the administrator tomortgage or sell so much of the properties of the estate for the purpose of paying off the obligations" referred to in the petition.

Come 1965, the newly appointed administratrix contested said sale, saying that no sale can be valid with the absence of notice to

the heirs, who did not even have a guardian ad litem to begin with.

The RTC ruled for the annulment of the sale. CA reversed the decision of the lower court. Hence, this petition.

Issue: whether or not the sale was valid, considering no notice of assailed sale was made to the heirs.

Held:

Without notice and hearing, the sale, mortgage or encumbrance is void. Notice is mandatory. Noncompliance therewith under the

sale is null and void.

It does not follow that for purposes of complying with the requirement of notice under Rule 89 of the Rules of Court, notice

to the father is notice to the children. Sections 2, 4 and 7 of said Rule state explicitly that the notice, which must be in be writing,must be given to the heirs, devisees, and legatees and that the court shall fix a time and place for hearing such petition and cause

notice to be given to the interested parties. There can be no dispute that if the heirs were duly represented by counsel or by a

guardian ad litem in the case of the minors, the notice may be given to such counsel or guardian ad litem.

In this case, however, only the surviving spouse, Severo Maneclang, was notified through his counsel. Two of the heirs, Hector

Maneclang and Oscar Maneclang, who were then of legal age, were not represented by counsel. The remaining seven (7) children

were still minors with no guardian ad litem having been appointed to represent them. Obviously then, the requirement of notice was

not satisfied.

The requisite set forth in the aforesaid sections of Rule 89 are mandatory and essential. Without them, the authority to sell, the sale

itself and the order approving it would be null and void ab initio. The reason behind this requirement is that the heirs, as the

presumptive owners since they succeed to all the rights and obligations of the deceased from the moment of the latter's deathare

the persons directly affected by the sale or mortage and therefore cannot be deprived of the property except in the manner provided

by law.

As to whether the plaintiff is in estoppel from assailing the validity of the sale. Estoppel is unavailable as an argument againstthe administratrix of the estate and against the children.


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As to prescription.As to prescription, this Court ruled in the Boagacase that "[a]ctions to declare the inexsistence of contracts donot prescribe (Art. 1410, N.C.C.)

As to laches. Laches is different from prescription. As the court held in Nielsen & Co. Inc . vs. Lepanto Consolidated MiningCo.,

26the defense of laches applies independently of prescription. While prescription is concerned with the fact of delay, laches is

concerned with the effect of delay.

CASE 3

RULE 89CASE NO. 3SANDEJAS VS LINAG.R. No. 141634 February 5, 2001

INTRODUCTION

A contract of sale is not invalidated by the fact that it is subject to probate court approval. The transaction remains binding on the

seller-heir, but not on the other heirs who have not given their consent to it. In settling the estate of the deceased, a probate court

has jurisdiction over matters incidental and collateral to the exercise of its recognized powers. Such matters include selling,

mortgaging or otherwise encumbering realty belonging to the estate. Rule 89, Section 8 of the Rules of Court, deals with the

conveyance of real property contracted by the decedent while still alive. In contrast with Sections 2 and 4 of the same Rule, the said

provision does not limit to the executor or administrator the right to file the application for authority to sell, mortgage or otherwise

encumber realty under administration. The standing to pursue such course of action before the probate court inures to any person

who stands to be benefited or injured by the judgment or to be entitled to the avails of the suit

FACTS:

- Eliodoro Sandejas, Sr. filed a petition in the lower court praying that letters of administration be issued in his favor for

the settlement of the estate of his wife, REMEDIOS R. SANDEJAS, who died on April 17, 1955

- Letters of Administration were issued and he took his oath as an administrator

- On April 19, 1983, an Omnibus Pleading for motion to intervene and petition-in-intervention was filed by [M]ovant Alex A.

Lina alleging among others that on June 7, 1982, movant and [A]dministrator Eliodoro P. Sandejas, in his capacity as

seller, bound and obligated himself, his heirs, administrators, and assigns, to sell forever and absolutely and in their

entirety the following parcels of land which formed part of the estate of the late Remedios R. Sandejas *(intervenor filed

an evidence of receipt of earnest money with promise to buy; P70,000.00 was given as earnest money and another

P100,000.00 in addition therewith)*

- "On January 7, 1985, the counsel for [A]dministrator Eliodoro P. Sandejas filed a [M]anifestation alleging among othersthat the administrator, Mr. Eliodoro P. Sandejas, died sometime in November 1984 in Canada. He also alleged, among

others that the matter of the claim of Intervenor Alex A. Lina becomes a money claim to be filed in the estate of the late

Mr. Eliodoro P. Sandejas

- Respondent Alex Lina moved for the consolidation of this civil case with the special proceedings case: 'IN RE:

INTESTATE ESTATE OF ELIODORO P. SANDEJAS, SR;

- The motion was granted by the court

- Intervenor Alex A. Lina filed [a] Motion for his appointment as a new administrator of the Intestate Estate of Remedios R.

Sandejas which was granted by the court. However, Sixto, the son of Sandejas, moved that he be the one to be assigned

as the administrator; such motion was granted by the court. Alex was replaced by Sixto

- Ruling of the Lower Court:

o The lower court upheld the sale between Sandejas and Alex Lina and directed to pay the balance of the

purchase price amounting to P729,000.00 within thirty (30) days from receipt of this Order and the

Administrator is directed to execute within thirty (30) days thereafter the necessary and proper deeds of

conveyancing- Ruling of the Court of Appeals:

o No sale involved. The CA held that the contract between Eliodoro

Sandejas Sr. and respondent was merely a contract to sell, not a perfected contract of sale.

o The CA held that Section 1, Rule 897of the Rules of Court was inapplicable, because the lack of written notice

to the other heirs showed the lack of consent of those heirs other than Eliodoro Sandejas Sr. For this reason,

bad faith was imputed to him, for no one is allowed to enjoyed a claim arising from ones own wrongdoing.

Thus, Eliodoro

Sr. was bound, as a matter of justice and good faith, to comply with his contractual commitments as an ownerand heir.

- Petitioner files a petition before the Supreme Court; contentions:

o jurisdiction over ordinary civil action seeking not merely to enforce a sale but to compel performance of acontract falls upon a civil court, not upon an intestate court; and (b) that Section 8 of Rule 89 allows theexecutor or administrator, and no one else, to file an application for approval of a sale of the property under

administration.

ISSUE:

Whether the [trial court] acting as a probate court could approve the sale and compel the petitioners to execute a deed of

conveyance even for the share alone of Eliodoro P. Sandejas Sr."YES.


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RULING:- Probate jurisdiction covers all matters relating to the settlement of estates (Rules 74 & 86-91) and the probate of wills (Rules

75-77) of deceased persons, including the appointment and the removal of administrators and executors (Rules 78-85). Italsoextends to matters incidental and collateral to the exercise of a probate court's recognized powers such as selling,mortgaging or otherwise encumbering realty belonging to the estate. Indeed, the rules on this point are intended tosettle the estate in a speedy manner, so that the benefits that may flow from such settlement may be immediatelyenjoyed by the heirs and the beneficiaries

- In the present case, the Motion for Approval was meant to settle the decedent's obligation to respondent; hence, thatobligation clearly falls under the jurisdiction of the settlement court. To require respondent to file a separate action -- on

whether petitioners should convey the title to Eliodoro Sr.'s share of the disputed realty -- will unnecessarily prolong the

settlement of the intestate estates of the deceased spouses.

- The suspensive condition did not reduce the conditional sale between Eliodoro Sr. and respondent to one that was "not a

definite, clear and absolute document of sale," as contended by petitioners. Upon the occurrence of the condition, the

conditional sale became a reciprocally demandable obligation that is binding upon the parties

CASE 4

RULE 89

CASE NO. 4

PAHAMOTANG VS. PNB

G.R. No. 156403, March 21, 2005

PONENTE: GARCIA, J.

FACTS:On July 1, 1972, Melitona Pahamotang died. She was survived by her husband Agustin Pahamotang, and their eight (8) children, namely:

Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and Eleonor, all surnamed Pahamotang. On September

15, 1972, Agustin filed with the then Court of First Instance of Davao City a petition for issuance of letters administration over the estate of his

deceased wife. The petition, docketed as Special Case No. 1792, was raffled to Branch VI of said court, hereinafter referred to as the intestate

court. In his petition, Agustin identified petitioners Josephine and Eleonor as among the heirs of his deceased spouse. It appears that Agustin

was appointed petitioners' judicial guardian in an earlier case - Special Civil Case No. 1785 also of the CFI of Davao City, Branch VI. On

December 7, 1972, the intestate court issued an order granting Agustins petition.

The late Agustin then executed several mortgages and later sale of the properties with the PNB and Arguna respectively. The heirs later

questioned the validity of the transactions prejudicial to them. The trial court found out that Agustin did not notify the petitioners of the filing

of his petitions for judicial authority to alienate estate assets. The court declared the real estate mortgage and the sale void but both were

valid with respect to the other parties. The decision was reversed by the Court of Appeals; to the appellate court, petitioners committed a fatal

error of mounting a collateral attack on the foregoing orders instead of initiating a direct action to annul them.

ISSUE: Whether or not authority to mortgage or sell the estate asset is valid without notice to the heirs.

RULING:

The requirements of Rule 89 of the Rules of Court are mandatory and failure to give notice to the heirs would invalidate the authority granted

by the intestate/probate court to mortgage or sell estate assets.

When an order authorizing the sale or encumbrance of real property was issue by the testate or intestate court without previous notice to

heirs, devisees and legatees, it is not only the contract itself which is null and void but also the order of the court authorizing the same.

***NOTICE TO HEIRS UNDER RULE 89 IS MANDATORY. FAILURE TO NOTIFY HEIRS INVALIDATES AUTHORITY TO MORTGAGE OR SELL ESTATE

ASSETS.

CASE 5

Liu vs. Loy (2003)

Ponente: Carpio

Facts:

While the decedent, Jose Vano was still living, his son and attorney in fact, Teodoro Vano sold (in

behalf of the decedent) certain parcels of land to Frank Liu.

After the decedent died, the son sold the same properties, specifically Lot nos. 5 and 6 to Alfredo

Loy and Teresita Loy, respectively.


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Upon an ex parte motion filed by the second set of buyers (Loys) of estate properties, the probate

court approved the sale in their favor.

Consequently, certificates of title covering the estate properties were cancelled and new titles issued

to the 2nd set of buyers.

Frank Liu filed a complaint for conveyance/annulment of title with the RTC.The trial court dismissed the complaint and the Court of appeals affirmed the dismissal.

Issue:

Whether or not the probate courts ex-parte approval of the contract of sale in favor of Loys was

valid.

Held: No.

The probate courts ex-parte approval of the sale of estate properties was not valid.

Section 8, Rule 89 makes it mandatory that notice be served on the heirs and other interested

persons of the application for approval of any conveyance of property held in trust by the deceased,

and where no such notice is given, the order authorizing the conveyance , as well as the

conveyance itself, is completely void.

In this case, the administratrix, the wife of the deceased Teodoro Vano was not notified of the motion

and hearing to approve the sale of the lots to the Loys.

Frank Liu did not also receive any notice, although he obviously was an interested party. The

issuance of new titles to the Loys did not vest title because the conveyance itself was completely

void.

CASE 6

Orola vs. Rural Bank (2005)

Ponente: Callejo, Sr.

Facts:

Josephine Orola and her siblings, Mryna, Angeline, Manuel, Antonio and Althea filed a complaint

against the Rural bank of Pontevedra, their father Emilio Orola (the administrator of his wifes estate,

Trinidad Laserna) and the Ex-officio Provincial sheriff for the nullification of the promissory notes and

real estate mortgages executed by Josephine Manuel and Antonio Orola, and the sale of the

property subject of the said deed at public auction.

They alleged that the real estate mortgage contracts were null and void because the same were

never submitted to and approved by the RTC in a special proceeding. Moreover, they were

hoodwinked by their father-administrator Emilio Orola into signing the contracts of lease and

amended contracts of lease, promissory notes and deeds of real estate mortgages as security for

the P600,000 loan on the assurance that they would benefit therefrom but did not receive he

proceeds of the said loan. As such, the extra judicial foreclosure of the real estate mortgages and

the sale of the property covered by the said deeds were null and void. The RTC of Roxas City gave

their favor on the petitioner. But the CA reversed the RTC decision.

Issue:

Whether or not the mortagages constituted over the real estate properties of petitioners-appellees

are void

Held: Yes.

Any mortgage of the realty of the estate without the appropriate authority of the estate court has no

legal support and is void. The purchaser at public auction acquires no title over the realty. The real

estate mortgage contracts, as well as the extrajudicial foreclosure thereof and the sale of the

property described therein at public auction, can thus be attacked directly and collaterally.

The Court agrees with the petitioners contention that respondent Emilio Orola failed to secure an

order from the intestate estate court authorizing him to mortgage the subject lots and execute a real


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estate mortgage contract in favor of respondent bank.

What the intestate estate court approved was the authority incorporated in the amended contracts of

lease respondent Orola gave to petitoners Josephine, Manuel and Antonio Orola so that the said lots

could be mortgaged to the respondent Rural Bank as security for the P600,000 loan under their

respective names. In fine, intestate estate court authorized the petitioners, not respondent Orola, to

mortgage the said lots to respondent Rural Bank. Lastly, under Section 7 of Rule 89 of the Rules ofCourt, only the executor or administrator of the estate may be authorized by the intestate estate

court to mortgage real estate belonging to the estate; hence the order of the estate court authorizing

the petitioners to mortgage the realty of the estate to the respondent Rural Bank is a nullity.

CASE 7

Halili vs. Lloret (1954)

Ponente: Bautista Angelo

Facts:

Petitioner, Fortunato Halili filed an action against the defendants, Maria Lloret and Ricardo Gonzales

Lloret (administrator of the intestate estate of Francisco Gonzales ) to compel the latter to execute a

deed of sale of certain parcels of land.

Accordingly, Halili through Atty. Teofilo Sauco negotiated the sale of the 6 parcels of land with

Ricardo for P200,000. Hence, he gave two checks, one for the sum of P100,000 drawn against the

Philippine National Bank in favor of Maria Lloret and another for the same amount drawn against the

Philippine Trust Co. in favor of Ricardo Gonzales Lloret.

Later on, Ricardo refused to sign the deed of sale. That he could not carry out the agreement in view

of the fact that he had received other better offers of the purchase of the lands.

He denied that a definite understanding had ever been reached between him and the plaintiff or his

representative relative to the sale of the lands in question. In fact, Halili suspended the payment of

the two checks. And that the understanding he had with Teofilo Sauco regarding the sale did not

pass the stage of mere negotiation, and, as such it did not produce any legal relation by which the

defendants could be compelled to carry out the sale as now pretended by plaintiff in his complaint.

Issue: Whether or not the sale of lands can be compelled by specific performance.

Held:

The court ruled in the negative.

The parties knew well that the properties were subject to judicial administration and that the sale

could have no valid effect until it merits the approval of the court, so much so that before the lands

were opened for negotiation, the judicial administrator, with the conformity of the heirs, secured from

the court an authorization to that effect, and yet, as will be stated elsewhere, the terms that weremade to appear in the document (Exhibit D) differ substantially from the conditions prescribed in the

authorization given by the court, which indicates that said document cannot have any binding effect

upon the parties nor serve as basis for an action for specific performance, as now pretended by the

plaintiff, in the absence of such judicial approval.

And the court finally found that the authorization calls for the sale of six parcels of land belonging to

the estate, but in the document as drawn up by Sauco it appears that only five parcels would be sold

to the plaintiff, and the other parcel to Ricardo Gonzales Lloret. Undoubtedly, this cannot legally be

done for, as we know, the law prohibits that a land subject of administration be sold to its judicial

administrator.


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CASE 8

Opulencia vs. CA

Ponente: Panganiban

Facts:

Aladin Simundac and Miguel Oliven filed a complaint for specific performance against Natalia

Carpena Opulencia on the basis of a contract to sell of a lot in Sta. Rosa Laguna wherein a

downpayment of P300,000 was received by the latter.

Opulencia admitted the foregoing facts but claims that the subject property was formed part of the

estate of her father, in respect of which a petition for probate was filed in the RTC. And that this fact

was known by the respondents. She further added that the same should be approved by the probate

court and upon realization of the nullity of the contract, she wanted to have the contract rescinded

and was willing to give back the downpayment.

The RTC ruled in favor of the petitioner citing Rule 89 Section 7 which allows the sale of properties

subject of a probate proceeding provided that it is beneficial to the estate and complies with the

requirement of law. It further stated that where the administratrix realizes that nullity of the

transaction entered into, she is not estopped from interposing the contracts nullity.

The CA reversed the Trial courts decision. Hence, the appeal.

Issue:

Whether or not a contract to sell a real property involved in an estate proceeding is valid and binding

without the approval of probate court.

Held: Yes.

Section 7 of Rule 89 of the Rules of Court is not applicable in this case because petitioner entered

into the contract to sell in her capacity as an heiress, not as an executrix or administratrix of theestate. In the contract, she represented herself as the lawful owner and seller of the subject parcel of

land.

The Court emphasized that hereditary rights are vested in the heir or heirs from the moment of the

decedents death. 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.

CASE 9

JOSEPHINE OROLA, MYRNA OROLA, ANGELINE OROLA, MANUEL OROLA, ANTONIO OROLA and ALTHEA OROLA,Petitioners,

vs.

THE RURAL BANK OF PONTEVEDRA (CAPIZ), INC., EMILIO Q. OROLA, THE REGISTER OF DEEDS OF CAPIZ and THE

EX-OFFICIO PROVINCIAL SHERIFF OF CAPIZ,Respondent.

FACTS:

On July 16, 1969, Trinidad Laserna Orola died intestate. She was survived by her husband Emilio Orola and their six

minor children, namely, 10-year-old Antonio, 12-year-old Josephine, 16-year-old Manuel, and other siblings,

Myrna, Angeline and Althea.

Emilio Orola, who, in the meantime, had married anew, executed a waiver of all his rights and interests over thesaid property in favor of his children by Trinidad Laserna, namely, Josephine, Myrna, Angeline, Manuel, Antonio

and Althea, all surnamed Orola.

On September 12, 1980, the court granted the motion of the administrator and authorized him to negotiate the

loan through the Rural Bank of Capiz (Rural Bank of Pontevedra, Capiz) and to transfer the sugar account of the

estate to the RPB in Roxas City.9Emilio then filed an application with the Rural Bank for a financing loan of
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P600,000.00. However, the bank informed him that the said loan would have to be processed by the Central Bank

and that it would take some time. He was informed that there would be no need for the Central Bank to intervene

if the loan of P600,000.00 would be broken down into three parts of P200,000.00, each to be applied for by three

applicants to whom the property to be used as collateral would be leased by the estate. Emilio agreed and talked

to his children, Josephine, Manuel and Antonio, about the banks proposal. The three siblings agreed.10

The Estate

of Trinidad Laserna, through its administrator, Emilio, as lessor, and Josephine, Manuel and Antonio, all surnamedOrola, as lessees, executed separate contracts of lease over the aforesaid property of the estate. On September 20,

1982, the intestate estate court issued an Order approving the contracts.

Antonio, Manuel and Josephine signed separate Promissory Notes17

on March 21, 1983 in which they promised

and bound themselves to pay their respective loans in 10 years in stated annual installments. This prompted the

Rural Bank to write separate letters of demand to Josephine, Manuel and Antonio, demanding payment of the

balance of their accounts within seven days from the receipt thereof, otherwise the Rural Bank would cause the

extrajudicial foreclosure of the real estate mortgages.25

Emilio Orola pleaded to the Rural Bank not to foreclose the

mortgages.

On October 1, 1987, Josephine Orola and her siblings, Myrna, Angeline, Manuel, Antonio and Althea, filed a

Complaint against the Rural Bank, their father Emilio and the Ex-OfficioProvincial Sheriff for the nullification of the

Promissory Notes and Real Estate Mortgages executed by Josephine, Manuel and Antonio Orola, and the sale of

the property subject of the said deed at public auction. They alleged therein that they became the sole owners of

Lots 1088 and 1071 when their father executed a waiver of his rights over the said lots in their favor. They also

alleged that the real estate mortgage contracts were null and void because the same were never submitted to and

approved by the RTC in Sp. Proc. Nos. V-3526 and V-3639. Moreover, they were hoodwinked by their father into

signing the contracts of lease and amended contracts of lease, promissory notes and deeds of real estate

mortgages as security for the P600,000.00 loan on the assurance that they would be benefited therefrom;

moreover, they did not receive the proceeds of the said loans. As such, the extrajudicial f oreclosure of the real

estate mortgages and the sale of the property covered by the said deeds were null and void.

ISSUE:

WHETHER OR NOT THE SUBJECT MORTGAGES CONSTITUTED OVER THE REAL ESTATE PROPERTIES OF PETITIONERS-

APPELLEES UNDER SECTION 7, RULE 89 OF THE RULES OF COURT ARE VOID FOR NON-COMPLIANCE WITH THE

MANDATORY REGULATIONS OF THE SAID PROVISION.

RULING:

Under Section 7 of Rule 89 of the Rules of Court, only the executor or administrator of the estate may be

authorized by the intestate estate court to mortgage real estate belonging to the estate; hence, the order of the

estate court authorizing the petitioners to mortgage the realty of the estate to the respondent Rural Bank is a

nullity.

Orola failed to submit the real estate mortgage contracts to the intestate estate court for its consideration and

approval. To give approval means to confirm, ratify, or to consent to some act or thing done by another.39

Unless

and until the said contracts are approved by the intestate estate court, the same cannot have any binding effect

upon the estate; nor serve as basis for any action against the estate and against the parcels of land described in the

said contracts belonging to it.40

It bears stressing that respondent Orola had no right or authority to mortgage the realty belonging to the estate.

He derived his authority from the order of the estate court which had jurisdiction to authorize the real estate

mortgage thereof under such terms and conditions and upon proper application. Any mortgage of realty of the

estate without the appropriate authority of the estate court has no legal support and is void.41

The purchaser at

public auction acquires no title over the realty.42

The real estate mortgage contracts, as well as the extrajudicialforeclosure thereof and the sale of the property described therein at public auction, can thus be attacked directly

and collaterally.

Had the real estate mortgage contracts been submitted to the intestate estate court for consideration and

approval after proper notice to the petitioners, the court would have been apprised of the terms and conditions

contained therein, and that about one-half of the loan would be used to pay the accommodation loan of

respondent Emilio Orola.
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IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Decision and Resolution of the Court of

Appeals are REVERSED AND SET ASIDE. The Decision of the Regional Trial Court is REINSTATED.

CASE 10

JOSEPHINE PAHAMOTANG and ELEANOR PAHAMOTANG-BASA,Petitioners,

vs.

THE PHILIPPINE NATIONAL BANK (PNB) and the HEIRS OF ARTURO ARGUNA,Respondents.

FACTS:

On July 1, 1972, Melitona Pahamotang died. She was survived by her husband Agustin Pahamotang, and their eight(8) children, namely: Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and

Eleonor, all surnamed Pahamotang. On September 15, 1972, Agustin filed with the then Court of First Instance of

Davao City a petition for issuance of letters administration over the estate of his deceased wife. The petition,

docketed as Special Case No. 1792, was raffled to Branch VI of said court, hereinafter referred to as the intestate

court. In his petition, Agustin identified petitioners Josephine and Eleonor as among the heirs of his deceasedspouse. It appears that Agustin was appointed petitioners' judicial guardian in an earlier case - Special Civil Case

No. 1785 also of the CFI of Davao City, Branch VI. On December 7, 1972, the intestate court issued an order

granting Agustins petition.

The late Agustin then executed several mortgages and later sale of the properties with the PNB and Arguna

respectively. The heirs later questioned the validity of the transactions prejudicial to them. The trial court declaredthe real estate mortgage and the sale void but both were valid with respect to the other parties. The decision was

reversed by the Court of Appeals; to the appellate court, petitioners committed a fatal error of mounting a

collateral attack on the foregoing orders instead of initiating a direct action to annul them.

ISSUE:

Whether or not petitioners can obtain relief from the effects of contracts of sale and mortgage entered into by

Agustin without first initiating a direct action against the orders of the intestate court authorizing the challenged

contracts.

RULING:

We answer the question in the affirmative.

It bears emphasizing that the action filed by the petitioners before the trial court in Civil Case No. 16,802is for the

annulment of several contracts entered into by Agustin for and in behalf of the estate of Melitona, namely: (a)

contract of mortgage in favor of respondent PNB, (b) contract of sale in favor of Arguna involving seven (7) parcels

of land; and (c) contract of sale of a parcel of land in favor of PLEI.

The trial court acquired jurisdiction over the subject matter of the case upon the allegations in the complaint that

said contracts were entered into despite lack of notices to the heirs of the petition for the approval of those

contracts by the intestate court.

Contrary to the view of the Court of Appeals, the action which petitioners lodged with the trial court in Civil Case

No. 16,802 is not an action to annul the orders of the intestate court, which, according to CA, cannot be done

collaterally. It is the validity of the contracts of mortgage and sale which is directly attacked in the action.

And, in the exercise of its jurisdiction, the trial court made a factual finding in its decision of August 7, 1998 that

petitioners were, in fact, not notified by their father Agustin of the filing of his petitions for permission tomortgage/sell the estate properties. The trial court made the correct conclusion of law that the challenged orders

of the intestate court granting Agustins petitions were null and void for lack of compliance with the mandatory

requirements of Rule 89 of the Rules of Court, particularly Sections 2, 4, 7 thereof, which respectively read:

"Sec. 2. When court may authorize sale, mortgage, or other encumbrance of realty to pay debts and legacies

through personalty not exhausted. - When the personal estate of the deceased is not sufficient to pay the debts,

expenses of administration, and legacies, or where the sale of such personal estate may injure the business or


20/51

other interests of those interested in the estate, and where a testator has not otherwise made sufficient provision

for the payment of such debts, expenses, and legacies, the court, on the application of the executor or

administrator and on written notice to the heirs, devisees, and legateesresiding in the Philippines, may authorize

the executor or administrator to sell, mortgage, or otherwise encumber so much as may be necessary of the real

estate, in lieu of personal estate, for the purpose of paying such debts, expenses, and legacies, if it clearly appears

that such sale, mortgage, or encumbrance would be beneficial to the persons interested; and if a part cannot besold, mortgaged, or otherwise encumbered without injury to those interested in the remainder, the authority may

be for the sale, mortgage, or other encumbrance of the whole of such real estate, or so much thereof as is

necessary or beneficial under the circumstances".

"Sec. 4. When court may authorize sale of estate as beneficial to interested persons. Disposal of proceeds. - When it

appears that the sale of the whole or a part of the real or personal estate, will be beneficial to the heirs, devisees,

legatees, and other interested persons, the court may, upon application of the executor or administrator and on

written notice to the heirs, devisees and legateeswho are interested in the estate to be sold, authorize the

executor or administrator to sell the whole or a part of said estate, although not necessary to pay debts, legacies,

or expenses of administration; but such authority shall not be granted if inconsistent with the provisions of a will.

In case of such sale, the proceeds shall be assigned to the persons entitled to the estate in the proper

proportions".

"Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. - The court having

jurisdiction of the estate of the deceased may authorize the executor or administrator to sell personal estate, or to

sell, mortgage, or otherwise encumber real estate; in cases provided by these rules and when it appears necessary

or beneficial, under the following regulations:

(a) The executor or administrator shall file a written petition setting forth the debts due from the deceased, the

expenses of administration, the legacies, the value of the personal estate, the situation of the estate to be sold,

mortgaged, or otherwise encumbered, and such other facts as show that the sale, mortgage, or other

encumbrance is necessary or beneficial;

(b) The court shall thereupon fix a time and place for hearing such petition, and causenoticestating the nature of

the petition, the reason for the same, and the time and place of hearing, to be given personally or by mail to the

persons interested, and may cause such further notice to be given, by publication or otherwise, as it shall deem

proper;


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RULE 90: DISTRIBUTION AND PARTITION OFTHE ESTATE

CASE 1

PATRICIA NATCHER, petitioner,

vs.

HON. COURT OFAPPEALS AND THE HEIR OF GRACIANO DEL ROSARIOLETICIA DEL ROSARIO, EMILIA DEL

RESORIOMANANGAN, ROSALINDA FUENTES LLANA, RODOLFO FUENTES, ALBERTO FUENTES, EVELYN DEL

ROSARIO, and EDUARDO DEL ROSARIO, respondent..

FACTS:

Spouses Graciano del Rosario and Graciana Esguerra were registered owners of a parcel of land with an area of

9,322 square meters located in Manila and covered by Transfer Certificate of Title No. 11889. Upon the death of

Graciana in 1951, Graciano, together with his six children, entered into an extrajudicial settlement of Graciana'sestate on 09 February 1954 adjudicating and dividing among themselves the real property.

On 20 March 1980, Graciano married herein petitioner Patricia Natcher. During their marriage, Graciano sold the

land covered by TCT No. 107443 to his wife Patricia as a result of which TCT No. 1860594was issued in the latter's

name. On 07 October 1985,Graciano died leaving his second wife Patricia and his six children by his first marriage,

as heirs.

In a complaint5filed in Civil Case No. 71075 before the Regional Trial Court of Manila, Branch 55, herein private

respondents alleged that upon Graciano's death, petitioner Natcher, through the employment of fraud,

misrepresentation and forgery, acquired TCT No. 107443, by making it appear that Graciano executed a Deed of

Sale dated 25 June 19876in favor herein petitioner resulting in the cancellation of TCT No. 107443 and the

issuance of TCT no. 186059 in the name of Patricia Natcher. Similarly, herein private respondents alleged in said

complaint that as a consequence of such fraudulent sale, their legitimes have been impaired.

In her answer7

dated 19 August 1994, herein petitioner Natcher averred that she was legally married to Graciano in

20 March 1980 and thus, under the law, she was likewise considered a compulsory heir of the latter. Petitioner

further alleged that during Graciano's lifetime, Graciano already distributed, in advance, properties to his children,

hence, herein private respondents may not anymore claim against Graciano's estate or against herein petitioner's

property.

After trial, the Regional Trial Court of Manila, Branch 55, rendered a decision dated 26 January 1996 holding:8

"1) The deed of sale executed by the late Graciano del Rosario in favor of Patricia Natcher is prohibited by

law and thus a complete nullity. There being no evidence that a separation of property was agreed upon

in the marriage settlements or that there has been decreed a judicial separation of property between

them, the spouses are prohibited from entering (into) a contract of sale;

"2) The deed as sale cannot be likewise regarded as a valid donation as it was equally prohibited by law

under Article 133 of the New Civil Code;

"3) Although the deed of sale cannot be regarded as such or as a donation, it may however be regarded as an

extension of advance inheritance of Patricia Natcher being a compulsory heir of the deceased."

ISSUE:

Whether or not the RTC acting as a regular court has jurisdiction to distribute the estates

RULING:

Clearly, matters which involve settlement and distribution of the estate of the decedent fall within the exclusive

province of the probate court in the exercise of its limited jurisdiction.


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Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or alleged to have been

made by the deceased to any heir may be heard and determined by the court having jurisdiction of the estate

proceedings;and the final order of the court thereon shall be binding on the person raising the questions and on

the heir.

While it may be true that the Rules used the word "may", it is nevertheless clear that the same provision11

contemplates a probate court when it speaks of the "court having jurisdiction of the estate proceedings".

Analogously, in a train of decisions, this Court has consistently enunciated the long standing principle that although

generally, a probate court may not decide a question of title or ownership, yet if the interested parties are all heirs,

or the question is one of collation or advancement,or the parties consent to the assumption of jurisdiction by the

probate court and the rights of third parties are not impaired, then the probate court is competent to decide the

question of ownership.

A perusal of the records, specifically the antecedents and proceedings in the present case, reveals that the trial

court failed to observe established rules of procedure governing the settlement of the estate of Graciano Del

Rosario. This Court sees no cogent reason to sanction the non-observance of these well-entrenched rules and

hereby holds that under the prevailing circumstances, a probate court, in the exercise of its limited jurisdiction, isindeed the best forum to ventilate and adjudge the issue of advancement as well as other related matters

involving the settlement of Graciano Del Rosario's estate.

It is the probate court that has exclusive jurisdiction to make a just and legal distribution of the estate. The court a

quo, trying an ordinary action for reconveyance / annulment of title, went beyond its jurisdiction when it

performed the acts proper only in a special proceeding for the settlement of estate of a deceased person.

CASE 2

EMILIA FIGURACION-GERILLA, Petitioner,

vs.

CAROLINA VDA. DE FIGURACION,*ELENA FIGURACION-ANCHETA,* HILARIA A. FIGURACION, FELIPA

FIGURACION-MANUEL, QUINTIN FIGURACION and MARY FIGURACION-GINEZ, Respondents.

FACTS:

On August 23, 1955, Leandro executed a deed of quitclaim over his real properties in favor of his six children.

When he died in 1958, he left behind two parcels of land in the name of "Leandro Figuracion, married to Carolina

Adviento" Leandro had inherited both lots from his deceased parents.

Leandro sold a portion of Lot 2299 to Lazaro Adviento, as a result of which TCT No. 4221-P was cancelled and TCT

No. 101331 was issued to "Lazaro Adviento, married to Rosenda Sagueped" as owner of the 162 sq. m. and

"Leandro Figuracion, married to Carolina Adviento" as owner of 7,385 sq. m. This lot continued to be in the name

of Leandro in Tax Declaration No. 616 for the year 1985.

What gave rise to the complaint for partition, however, was a dispute between petitioner and her sister,

respondent Mary, over the eastern half of Lot 707 of the Cadastral Survey of Urdaneta with an area of 3,164 sq. m.

Lot 707 belonged to Eulalio Adviento, as evidenced by OCT No. 15867 issued on February 9, 1916. When Adviento

died, his two daughters, Agripina Adviento (his daughter by his first wife) and respondent Carolina (his daughter by

his second wife), succeeded him to it. On November 28, 1961, Agripina executed a quitclaim in favor of petitioner

over the one-half eastern portion of Lot 707. Agripina died on July 28, 1963, single and without any issue. Before

her half-sisters death, however, respondent Carolina adjudicated unto herself, via affidavit under Rule 74 of the

Rules of Court, the entire Lot 707 which she later sold to respondents Felipa and Hilaria. The latter twoimmediately had OCT No. 15867 cancelled, on December 11, 1962. A new title, TCT No. 42244, was then issued in

the names of Felipa and Hilaria for Lot 707.

In February 1971, petitioner and her family went to the United States where they stayed for ten years. Returning in

1981,6she built a house made of strong materials on the eastern half-portion of Lot 707. She continued paying her

share of the realty taxes thereon.
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It was sometime later that this dispute erupted. Petitioner sought the extrajudicial partition of all properties held

in common by her and respondents. On May 23, 1994, petitioner filed a complaint in the RTC of Urdaneta City,

Branch 49, for partition, annulment of documents, reconveyance, quieting of title and damages against

respondents, praying, among others, for: (1) the partition of Lots 2299 and 705; (2) the nullification of the affidavit

of self-adjudication executed by respondent Carolina over Lot 707, the deed of absolute sale in favor of

respondents Felipa and Hilaria, and TCT No. 42244; (3) a declaration that petitioner was the owner of one-half ofLot 707 and (4) damages. The case was docketed as Civil Case No. U-5826.

On the other hand, respondents took the pos ition that Leandros estate should first undergo settlement

proceedings before partition among the heirs could take place. And they claimed that an accounting of expenses

chargeable to the estate was necessary for such settlement.

On June 26, 1997,7the RTC

8rendered judgment nullifying Carolinas affidavit of self-adjudication and deed of

absolute sale of Lot 707. It also declared Lots 2299 and 705 as exclusive properties of Leandro Figuracion and

therefore part of his estate. The RTC, however, dismissed the complaint for partition, reconveyance and damages

on the ground that it could not grant the reliefs prayed for by petitioner without any (prior) settlement

proceedings wherein the transfer of title of the properties should first be effected.

On appeal, the CA upheld the dismissal of petitioners action for partition for being premature. The CA reversed

the decision, however, with respect to the nullification of the self-adjudication and the deed of sale. Upholding the

validity of the affidavit of self-adjudication and deed of sale as to Carolinas one-halfpro-indivisoshare, it instead

partitioned Lot 707. Dissatisfied, respondents elevated the CA decision to this Court in G.R. No. 151334, entitled

Carolina vda. de Figuracion, et al. v. Emilia Figuracion-Gerilla

ISSUE:

The issue for our consideration is whether or not there needs to be a prior settlement of Leandros intestate estate

(that is, an accounting of the income of Lots 2299 and 705, the payment of expenses, liabilities and taxes, plus

compliance with other legal requirements, etc.) before the properties can be partitioned or distributed.

RULING:

In any event, there appears to be a complication with respect to the partition of Lot 705. The records refer to a

case entitled Figuracion, et al. v. Alejo currently pending in the CA. The records, however, give no clue or

information regarding what exactly this case is all about. Whatever the issues may be, suffice it to say that

partition is premature when ownership of the lot is still in dispute.

The right to an inheritance is transmitted immediately to the heirs by operation of law, at the moment of death of

the decedent. There is no doubt that, as one of the heirs of Leandro Figuracion, petitioner has a legal interest in

Lot 2299. But can she compel partition at this stage?

There are two ways by which partition can take place under Rule 69: by agreement under Section 211and through

commissioners when such agreement cannot be reached, under Sections 3 to 6.12

Neither method specifies a procedure for determining expenses chargeable to the decedents estate. While

Section 8 of Rule 69 provides that there shall be an accounting of the real propertys income (rentals and profits) in

the course of an action for partition,13

there is no provision for the accounting of expenses for which property

belonging to the decedents estate may be answerable, such as funeral expenses, inheritance taxes and similar

expenses enumerated under Section 1, Rule 90 of the Rules of Court.

In a situation where there remains an issue as to the expenses chargeable to the estate, partition is inappropriate.

While petitioner points out that the estate is allegedly without any debt and she and respondents are Leandro

Figuracions only legal heirs, she does not dispute the finding of the CA that "certain expenses" including thoserelated to her fathers final illness and burial have not been properly settled.

14Thus, the heirs (petitioner and

respondents) have to submit their fathers estate to settlement because the determination of these expenses

cannot be done in an action for partition.

In estate settlement proceedings, there is a proper procedure for the accounting of all expenses for which the

estate must answer. If it is any consolation at all to petitioner, the heirs or distributees of the properties may take
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possession thereof even before the settlement of accounts, as long as they first file a bond conditioned on the

payment of the estates obligations.15

WHEREFORE, the petition is hereby DENIED. The Court of Appeals decision and resolution in CA-G.R. CV No.

58290 are AFFIRMED in so far as theissue of the partition of Lots 2299 and 705 is concerned.

But with respect to Lot 707, we make no ruling on the validity of Carolina vda. de Figuracions affidavit of self-adjudication and deed of sale in favor of Felipa and Hilaria Figuracion in view of the fact that Carolina vda. de

Figuracion, et al. v. Emilia Figuracion-Gerilla(G.R. No. 151334) is still pending in this Division.

CASE 3

RULE 90 - Case 3 - Heirs of Marcelino Donorio vs Heirs of Fortunato Donorio;

Ponente: REYES, R.T.

Ruling: Petitioners (Heirs of Marcelino Doronio) are correct in alleging that the issue regarding the

impairment of legitime of Fortunato Doronio must be resolved in an action for the settlement of

estates of spouses Simeon Doronio and Cornelia Gante. It may not be passed upon in an action for

reconveyance and damages. A probate court, in the exercise of its limited jurisdiction, is the best

forum to ventilate and adjudge the issue of impairment of legitime as well as other related matters

involving the settlement of estate.

An action for reconveyance with damages is a civil action, whereas matters relating to settlement of the

estate of a deceased person such as advancement of property made by the decedent, partake of the

nature of a special proceeding. Special proceedings require the application of specific rules as

provided for in the Rules of Court.

As explained by the Court in Natcher v. Court of Appeals:

Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special proceedings, in this wise:

a) A civil action is one by which a party sues another for the enforcement or protection of a right, or the

prevention or redress of a wrong.

A civil action may either be ordinary or special. Both are governed by the rules for ordinary civil actions,

subject to specific rules prescribed for a special civil action.

x x x x

c) A special proceeding is a remedy by which a party seeks to establish a status, a right or a particular fact.

As could be gleaned from the foregoing, there lies a marked distinction between an action and a special

proceeding. An action is a formal demand of ones right in a court of justice in the manner prescribed by the

court or by the law. It is the method of applying legal remedies according to definite established rules. The

term "special proceeding" may be defined as an application or proceeding to establish the status or right

of a party, or a particular fact. Usually, in special proceedings, no formal pleadings are required unless the

statute expressly so provides. In special proceedings, the remedy is granted generally upon an application or

motion.

Citing American Jurisprudence, a noted authority in Remedial Law expounds further:

It may accordingly be stated generally that actions include those proceedings which are instituted and

prosecuted according to the ordinary rules and provisions relating to actions at law or suits in equity, and

that special proceedings include those proceedings which are not ordinary in this sense, but is instituted and

prosecuted according to some special mode as in the case of proceedings commenced without summons and

prosecuted without regular pleadings, which are characteristics of ordinary actions x x x. A special

proceeding must therefore be in the nature of a distinct and independent proceeding for particular relief,

such as may be instituted independently of a pending action, by petition or motion upon notice.
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Applying these principles, an action for reconveyance and annulment of title with damages is a civil action,

whereas matters relating to settlement of the estate of a deceased person such as advancement of property

made by the decedent, partake of the nature of a special proceeding, which concomitantly requires the

application of specific rules as provided for in the Rules of Court.

Clearly, matters which involve settlement and distribution of the estate of the decedent fall within the

exclusive province of the probate court in the exercise of its limited jurisdiction.

Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or alleged to have

been made by the deceased to any heir may be heard and determined by the court having jurisdiction of

the estate proceedings,and the final order of the court thereon shall be binding on the person raising the

questions and on the heir.

While it may be true that the Rules used the word "may," it is nevertheless clear that the same provision

contemplates a probate court when it speaks of the "court having jurisdiction of the estate proceedings."

Corollarily, the Regional Trial Court in the instant case, acting in its general jurisdiction, is devoid of authority

to render an adjudication and resolve the issue of advancement of the real property in favor of herein

petitioner Natcher, inasmuch as Civil Case No. 71075 for reconveyance and annulment of title with damages

is not, to our mind, the proper vehicle to thresh out said question. Moreover, under the present

circumstances, the RTC of Manila, Branch 55, was not properly constituted as a probate court so as to validly

pass upon the question of advancement made by the decedent Graciano Del Rosario to his wife, herein

petitioner Natcher.

We likewise find merit in petitioners contention that before any conclusion about the legal share due to a

compulsory heir may be reached, it is necessary that certain steps be taken first. The net estate of the

decedent must be ascertained, by deducting all payable obligations and charges from the value of the

property owned by the deceased at the time of his death; then, all donations subjec t to collation would be

added to it. With the partible estate thus determined, the legitime of the compulsory heir or heirs can be

established; and only then can it be ascertained whether or not a donation had prejudiced the legitimes.

FACTS:Sps. Simeon Doronio and Cornelia Gante, now both deceased, were the registered owners of a

parcel of land. Among their children were Marcelino and Fortunato Donorio whose heirs are the

petitioners and respondents in this case, respectively. Petitioners filed a petition "For the Registration of

a Private Deed of Donation" claiming that the entire subject property has been donated to their

predecessors by virtue of the private deed of donation propter nuptias. Said petition was granted,

respondents filed thereafter a petition for the reconsideration of the registration of the donation, but

was denied. Respondents thereafter, filed an action for reconveyance and damages against petitioners.

Respondents contend that the subject land is different from what was donated based on the

descriptions of the property under the original title and the deed of donation. The respondents posited

that spouses Donorio intended to donate only one-half of the property. The RTC ruled in favor of the

petitioners (heirs of Marcelino) while on appeal, the CA ru

Documents

Compilation Rule 87-Rule 96 (Complete)