Rule 89 Digest

G.R. No. 158566 September 20, 2005  JOSEPHINE OROLA, MYRNA OROLA, ANGELINE OROLA, MANUEL OROLA, ANONIO OROLA !"# ALHEA OROLA, Petitioners, OROLA, Petitioners, vs. HE RURAL $AN% O& PONE'E(RA )*API+, IN*., EMILIO -. OROLA, HE REGISER O& (EE(S O& *API+ !"# HE E/O&&I*IO PRO'IN*IAL SHERI&& O& *API+, Respondent. *API+, Respondent. *ALLEJO, SR., J SR., J. . &!t On July 16, 1969, Trinidad Laserna Orola died intesta intestate. te. She was survive survived d by her husband Eilio Orola and their si! inor "hildren, naely, 1#$year$old %ntonio, 1&$ year$old year$old Josephine Josephine,, 16$year 16$year$old $old 'anuel, 'anuel, and other siblin(s, siblin(s, 'yrna, 'yrna, %n(eline %n(eline and %lthea. Eilio Orola, who, in the eantie, had arried anew, e!e"uted e!e"uted a waiver o) all his ri(hts and interests over the said property in )avor o) his "hildren by Trinidad Laserna, nae naely ly,, Jose Joseph phin ine, e, 'yrn 'yrna, a, %n %n(e (eli line ne,, 'anuel, %ntonio and %lthea, all surnaed Orola. *n 19+, 19+, Eilio Eilio Orola Orola-s -s petiti petition on )or his appointent as (uardian over the persons and prope property rty o) his inor inor "hildr "hildren en was was (ranted. Eilio led a petition with the RT/ )or the settleent o) the estate o) his de"eased spouse, Trinidad Laserna, and his appo appoin int ten entt as adi adini nist stra rato torr o) her her estat estate. e. RT/ appoin appointed ted Eilio Eilio Orola Orola as adinistrator o) the estate o) his de"eased spouse. %s su"h su"h adini adinistr strato atorr o) the estate estate,, he open opened ed an a""o a""oun untt in the the nae nae o) the the estate with the P0, ebar2ed on su(ar produ"tion and, with prior approval o) the "ourt, ne(otiated with ban2in( institutions

)or )or nan nan"i "in( n( loans oans re3uired e3uipents4

to

pur"h ur"has ase e

the the

 To  To support his endeavors, he ne(otiated a loan throu(h the Rural an2 o) /api5 Eilio a(reed and tal2ed to his "hildren,  Josephine, 'anuel and %ntonio4 the three siblin(s siblin(s a(reed. a(reed. The Estate o) Trinidad rinidad Laserna, throu(h its adinistrator, Eilio, as less lessor or,, and and Jose Joseph phin ine, e, 'anu 'anuel el and and %ntonio, %ntonio, all surnae surnaed d Orola, Orola, as lessees, lessees, e!e"uted separate "ontra"ts o) lease over the a)oresai a)oresaid d property property o) the estate. On Septeber &#, 19&, the intestate estate "our "ourtt issu issued ed an Orde Orderr appr approv ovin in( ( the the "ontra"ts.  The periods o) the lease were e!tended to 1& years, to "oen"e )ro )ro their appro approva vall by the intest intestate ate estate estate "ourt. "ourt.  The lessees were also authori5ed to ne(otiate loans )or the developent o) the leased preises not to e!"eed P&## P&##,# ,### ##.# .##, #, and and to bind bind the the leas leased ed preises by way o) real estate ort(a(e as se"urity se"urity there)or4 there)or4 /ourt /ourt approved approved the aend ended "on "ontra tra"ts "ts o) lease. On 7e"e 7e"eb ber er &# &#,, 19 19& &,, the the Rural ural an2 an2 notied Eilio that the loan appli"ations o)  his "hildren had been approved. %ntoni %nto nio, o, 'anu 'anuel el and and Jose Joseph phin ine e si(n si(ned ed separate Proissory 0otes in whi"h they proised and bound theselves to pay4 %nto %n toni nio o Orol Orola, a, )or )or and and in beha behal) l) o) his his )ather Eilio Orola, e!e"uted a Real Estate 'ort(a(e over Lot 1# as se"urity )or the payent o) his loan4 'anuel Orola, also as attorney$in$)a"t o) the adinistrator o) the estate, estate, li2ewis li2ewise, e, e!e"ute e!e"uted d a real real estate estate ort(a(e in )avor o) the Rural an2 over the the said said lots lots as se"u se"uri rity ty )or )or his his loan loan44  Josephine Orola, as attorney$in$)a"t attorney$in$)a"t o) the adini adinistr strato atorr o) the estate estate,, e!e"u e!e"uted ted a separate real estate ort(a(e a(reeent over a portion o) Lot 1# and Lot 1#+1 as se"urity se"urity )or her loan. 8owever, 8owever, the real real esta estate te ort ort(a (a(e (e "ont "ontra ra"t "ts s wer were not not sub ubitt itted to the the (ua (uardian ianship ship and inte intest stat ate e esta estate te "our "ourts ts )or )or appr approv oval al.. 0either were 'yrna, %n(eline and %lthea aware o) the said loans.

 Therea)ter, they )ailed to pay the aorti5ations o) the loans to the Rural an2. Rural an2 "aused the e!traudi"ial )ore"losure o) the real estate ort(a(es. Rural an2 was the winnin( bidder. Sheri:  e!e"uted separate "erti"ates o) sale in )avor o) the Rural an2.  Therea)ter, the (uardianship "ourt terinated the (uardianship and disissed the "ase. On Septeber &1, 19+, Josephine, 'yrna, 'anuel and %ntonio Orola e!e"uted a 7eed o)  %""eptan"e o) ;aiver or 7onation in whi"h they a""epted their )ather-s waiver o) his ri(hts, interests and parti"ipation over their other-s estate.  On O"tober 1, 19+, Josephine Orola and her siblin(s, 'yrna, %n(eline, 'anuel, %ntonio and %lthea, led a /oplaint a(ainst the Rural an2, their )ather Eilio and the Ex-Ofcio Provin"ial Sheri: )or the nulli"ation o) the Proissory 0otes and Real Estate 'ort(a(es e!e"uted by  Josephine, 'anuel and %ntonio Orola, and the sale o) the property sube"t o) the said deed at publi" au"tion. They alle(ed therein that they be"ae the sole owners o) Lots 1# and 1#+1 when their )ather e!e"uted a waiver o) his ri(hts over the said lots in their )avor4 that the real estate ort(a(e "ontra"ts were null and void be"ause the sae were never subitted to and approved by the RT/4 that they were hoodwin2ed by their )ather into si(nin( the "ontra"ts o) lease and aended "ontra"ts o) lease, proissory notes and deeds o) real estate ort(a(es as se"urity )or the P6##,###.## loan on the assuran"e that they would be beneted there)ro4 that they did not re"eive the pro"eeds o) the said loans. %s su"h, the e!traudi"ial )ore"losure o) the real estate ort(a(es and the sale o) the property "overed by the said deeds were null and void. *n its answer to the "oplaint, Rural an2 averred that the RT/ authori5ed and even approved the aended "ontra"ts o) sale e!e"uted by %ntonio, 'anuel and

 Josephine Orola and the de)endant Eilio Orola4 that the plainti:s had a(reed to the e!e"ution o) the ort(a(es o) the property sube"t o) the said deeds, and "on)ored to the said aended "ontra"ts be)ore the RT/ in the intestate estate pro"eedin(s approved the sae4 they were also notied o) the balan"e o) their a""ount, and o) the e!traudi"ial )ore"losure o) the real estate ort(a(es, and the subse3uent sale o) the property "overed by the said ort(a(es at publi" au"tion a)ter they re)used to pay their a""ount despite deands. %s su"h, the plainti:s were estopped )ro assailin( the real estate ort(a(es and the e!traudi"ial )ore"losure thereo) and the sale o) the lots "overed by the said deeds at publi" au"tion. *n his answer to the "oplaint, Eilio Orola aditted that the (uardianship pro"eedin(s terinated on Septeber 1, 19+. 8e alle(ed that he e!e"uted the ;aiver o) Ri(ht on O"tober &6, 19+6 only be"ause his brother and sister$in$law re3uired hi to do so as a "ondition to their si(nin( the partition a(reeent, with their assuran"e that the said waiver would ta2e e:e"t only a)ter his death. 'oreover, the plainti:s had a(reed to the e!e"ution o) the aended "ontra"ts o) lease to )a"ilitate the early release o) the loans as re3uired by the Rural an2. RT/ < )avor o) the plainti:s and de"lared the loans as well as the real estate ort(a(e null and void )or )ailure to "oply with the andatory re3uireents o) Se"tion +, Rule 9, Revised Rules o)  /ourt. /%< reversed RT/4 ruled that the intestate estate "ourt-s approval o) the aended "ontra"ts o) lease "arried with it the approval o) the real estate ort(a(es e!e"uted by Eilio Orola in )avor o) the Rural an2. %n(eline, 'yrna and %lthea even "on)ored to the aended "ontra"ts o) lease4 hen"e, were estopped )ro assailin( the, as well as the real estate ort(a(e "ontra"ts.

I3e 4 1 ;=0 the sube"t ort(a(es "onstituted over the real estate properties are void )or non "oplian"e with the andatory re(ulations o) Se"tion + Rule 9 R3"7  The /% de"ision is set aside. Se"tion &, Rule 9 o) the Rules o)  /ourt provides that, upon appli"ation o)  the adinistrator and on written noti"e to the heirs, the "ourt ay authori5e the adinistrator to ort(a(e so u"h as ay be ne"essary o) the real estate )or the e!penses o) the adinistrator, or i) it "learly appears that su"h ort(a(e would be bene"ial to the persons interested. %)ter the real estate ort(a(e is e!e"uted in a""ordan"e with the Se"tion & Rule 9, the said deed ust be subitted )or the "onsideration and approval or disapproval o) the "ourt >Se"tion +, Rule 9?.  The re"ords show that respondent Eilio Orola notied the petitioners o) his otion )or the approval o) the aended "ontra"ts o) lease. %lthou(h the otion was ex   parte, nonetheless, petitioners %n(eline, 'yrna and %lthea Orola led their Joint %@davit o) /on)ority, in whi"h they de"lared that they have no obe"tion and voluntarily "on)or to the aendent o)  the ter )ro ten >1#? to twelve >1&? years and )reely (ive our "onsent to havin( the Lessees e!e"ute a real estate ort(a(e over the leased property in )avor o) the ban2. 8owever, the /ourt a(rees with the petitioners- "ontention that repo"#e"t Oro! !e# to e3re !" or#er rom t9e "tet!te et!te o3rt !3t9or:"7 9m to mort7!7e t9e 3b;et ot !"# e