Special Proceeding Cases

SPECIAL PROCEEDING CASES: I.

SETTLEMENT OF ESTATE 1. SAN LUIS V. SAN LUIS (GR 133743/134029) Who Died: Felicisimo T. San Luis, former governor of the Province of Laguna Who Claimed: Felicidad San Luis – third wife of Felicisimo with whom he lived with in Alabang Who Opposed: Rodolfo and Edgar San Luis, joined by Mila San Luis – children of Felicisimo from first marriage Contention: Improper venue – Petitioners claim that the petition for letters of administration should have been filed in Laguna as Felicisimo was the duly elected governor of Laguna, to which it is declared that he is the resident of Laguna. Respondent, having filed assailed petition in Makati, countered with documentary evidence showing that Felicisimo’s actual residence is in Alabang including billing statements, proof of membership in Ayala Alabang Country Club, letter envelopes sent by decedent’s children to Alabang house, and calling cards stating that his home address is in Alabang. Issue: Was the petition filed in the right venue? Held: YES, petitioners claim that residence under the Rules of Court is synonymous to domicile as held in election cases is unmeritorious. Under the rules, residence pertains to actual residence (ex vi termini), or the personal or physical habitation of a person, which respondent was able to successfully prove with documentary evidence. Further, Supreme Court Administrative Order No. 3, 1983, provided that since Muntinlupa was still a municipality, the Regional Trial Courts who had jurisdiction over Muntinlupa were seated in Makati. 2. GARCIA – QUIAZON V. BELEN (GR 189121) Who Died: Eliseo Quiazon Who Claimed: Elise Quiazon represented by her mother Ma. Lourdes Belen – daughter of Eliseo Quiazon with Belen (common law wife)

Who Opposed: Amelia Quiazon, joined by her daughters Jenneth and Jennifer, - wife and children of Eliseo Contention: Improver venue – Petitioners claim that the petition for letters of administration should have been filed in Tarlac as the death certificate of Eliseo shows that he is a resident of Tarlac. Respondents contend that they properly filed said petition in Las Pinas as it was the actual residence of Eliseo. Issue: Was the petition filed in the right venue? Held: YES, while recitals in the death certificate can be considered proof of decedent’s residence at the time of his death, the contents thereof is not binding on the courts. Further, that Eliseo went to the extent of taking his marital feud (petition for declaration of nullity against Amelia) before the courts of law renders untenable the petitioner’s position that Eliseo spent the final days of his life in Tarlac with Amelia and her children. 3. AGTARAP V. AGTARAP (GR 177099/ 177192) Who Died: Joaquin Agtarap Who Claimed: Eduardo Agtarap – child of second marriage with Caridad (after first wife, Lucia, died) Who Opposed: Joseph, Gloria and Teresa – grandchildren of Joaquin from first marriage; Abelardo Dagoro – husband of Mercedes (deceased child of Joaquin with second marriage) Contention: On Jurisdiction of probate courts – Appellants assail that the probate courts has no jurisdiction to decide on the ownership of the two properties which were disputed to be whether it was a conjugal property under the first or second marriage Issue: Do probate/intestate courts have jurisdiction over settling dispute of ownership? Held: YES, probate/intestate courts may decide upon disputes of ownership. The general rule is that the jurisdiction of the trial court, either as a probate or an intestate court, relates only to matters having to do with the probate of the will and/or settlement of the estate of deceased persons, but does not extend to the determination of questions of ownership that arise during the proceedings. The patent rationale for is rule is that

such court merely exercises special and limited jurisdiction. However, this general rule is subject to exceptions as justified by expediency and convenience. First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of inclusion in or exclusion from the inventory of a piece of property without prejudice to the final determination of ownership in a separate action. Second, if the interested parties are all heirs to the estate, 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 resolve issues on ownership. 4. SUNTAY III V. CONJUANCO-SUNTAY (GR 183053) Who Died: Cristina Aguinaldo-Suntay – daughter of Emilio Aguinaldo Who Claimed: Isabel granddaughter of decedent

Suntay-Aguinaldo

–

legitimate

Who Opposed: Federico Suntay – surviving spouse of decedent, nominating adopted son (and illegitimate grandson), Emilio III Contention: Petitioner claims that she is more qualified to administer the estate of decedent as she possesses none of the disqualifications for heirship in the estate of decedent, and that Emilio III cannot inherit from decedent by virtue of Art. 992 of the New Civil Code (iron curtain bar rule). Respondent claims that by order of preference in selection of administrator of estate, the surviving spouse or his nominee shall be preferred. Issue: Does the iron curtain bar rule exclude Emilio III from being the administrator of the decedent’s estate? Held: NO, the iron curtain bar rule does not apply. Firstly, Emilio III’s interest in the estate of Cristina, as the adopted son of Federico is apparent. Secondly, the underlying philosophy of our law on intestate succession is to give preference to the wishes and presumed will of the decedent, absent a valid and effective will. Indeed, the factual antecedents of this case accurately reflect the basis of intestate succession, i.e. love first descends, for the decedent did not distinguish between her legitimate and illegitimate grandchildren.

5. LEE V. REGIONAL TRIAL COURT OF QUEZON CITY (GR 146006) Who Died: Dr. Juvencio P. Ortanez – 90% owner of Philippine International Life Insurance Company’s subscribed capital stocks Who Claimed: Rafael Ortanez – legitimate son of Dr. Ortanez Who Opposed: Divina Enderes – illegitimate daughter of Dr. Ortanez Contention: Petitioners contend that the sale of shares of stock by Juliana and Jose Ortanez to Filipino Loan Assistance Group is valid as evidenced by Memorandum of Agreement of extrajudicial settlement of estate signed by Juliana and her two sons, and that the intestate court exceeded its jurisdiction by declaring the sale void. Private respondent avers that the sale is invalid because the court has not yet passed upon the distribution of the estate. Issue: Whether or not the court has jurisdiction nullifying the sale of shares of stocks of Phlinterlife? Held: YES, the intestate court has the power to execute its order with regard to the nullity of an unauthorized sale of estate property. Under Section 4 and 7, Rule 89 of the ROC, it is the probate court that has the power to authorize and/or approve the sale. An heir may only sell his undivided share in the estate, not any specific property therein. 6. THE ESTATE OF HILARIO RUIZ V. CA (GR 118671) Who Died: Hilario Cruz Who Claimed: Maria Pilar Ruiz Montes – adopted daughter of decedent Who Opposed: Edmond Cruz – only son of decedent, executor of the will Contention: Respondents filed a motion for the release of titles of the real properties in Valle Verde, which was granted by the court, and upheld by the CA. Edmond Cruz alleges that the titles of land cannot be released prior to the payment of debts and finding of intrinsic validity of the will.

Issue: Whether or not the court can order the release of titles to respondents? Held: No, the titles cannot be released to respondents. No distribution shall be allowed until the payment of the obligations above-mentioned has been made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs. It was also too early in the day for the probate court to order the release of the titles six months after admitting the will to probate. The probate of a will is conclusive as to its due execution and extrinsic validity and settles only the question of whether the testator, being of sound mind, freely executed it in accordance with the formalities prescribed by law. Questions as to the intrinsic validity and efficacy of the provisions of the will, the legality of any devise or legacy may be raised even after the will has been authenticated. 7. Unionbank v. Santibanez (GR No. 149926) Who Died: Efraim Santibanez Who Claimed: Edmund Santibanez – son of Efraim, special executor Who Opposed: Unionbank – assignee of receivables due to FCCC Contention: Respondent Florence Ariola (sister of Edmund) avers that since the agreement between her and Edmund was not allowed by the probate court and Unionbank did not claim against the estate in the probate court, she cannot be held personally liable for the debts being claimed by petitioner. Issue: Whether or not Florence Ariola may be held personally liable for the debts incurred by the decedent. Held: No, she cannot be held personally liable. Perusing the joint agreement, it provides that the heirs as parties thereto "have agreed to divide between themselves and take possession and use the above-described chattel and each of them to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First Countryside Credit Corp." The assumption of liability was conditioned upon the happening of an event, that is, that each heir shall take possession and use of their respective share under the agreement. It was made dependent on the validity of the partition, and that they were to

assume the indebtedness corresponding to the chattel that they were each to receive. The partition being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It follows then that the assumption of liability cannot be given any force and effect. 8. Heirs of Maglasang v. MBC (GR No. 171206) Who Died: Flaviano Maglasang Who Claimed: Salud Maglasang (wife) and their children, Edgar Maglasang appointed as Administrator Who Opposed: Manila Bankers Corporation (on a separate civil action) Contention: Manila Bankers Corporation foreclosed properties mortgaged by the decedent and his spouse. After auctioning the property, they claimed deficiency for the deficiency between the debt and the winning bid. Petitioners allege that since repondent introduced a claim in the probate court, it has waived its option to foreclose the property. Issue: Whether or not respondent can foreclose the property and claim deficiency Held: No, respondent cannot foreclose the property and still claim deficiency of debt. Case law now holds that this rule grants to the mortgagee three distinct, independent and mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the mortgagor dies, among them: (1) To waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim; (2) To foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and (3) To rely on the mortgage exclusively, foreclosing the same at anytime before it is barred by prescription without right to file a claim for any deficiency In this case, respondent sought to extra-judicially foreclose the mortgage of the properties previously belonging to Sps. Maglasang (and now, their estates) and, therefore, availed of the third option. Lest it be misunderstood, it did not exercise the first option of directly filing a claim against the estate, as petitioners assert, since it merely notified the probate court of the

outstanding amount of its claim against the estate of Flaviano and that it was currently restructuring the account. Thus, having unequivocally opted to exercise the third option of extra-judicial foreclosure under Section 7, Rule 86, respondent is now precluded from filing a suit to recover any deficiency amount as earlier discussed. 9. Pilapil v. Heir of M. Briones (GR No. 150175) Who Died: Maximino Briones Who Claimed: Donata Ortiz-Briones (wife), succeeded by her Heirs Who Opposed: Silverio Briones, et al – collateral relatives of Maximino Contention: Silverio, along with other collateral relatives, claims that Donata, through fraud and misrepresentation, succeeded in registering properties of Maximino under her own name having obtained a court decision finding her as the sole heir of Maximino, which passed down to her heirs. Issue: Whether or not there was fraud on the part of Donata? If there was, can the oppositors claim? Held: No, there was no fraud. While it is true that since the CFI was not informed that Maximino still had surviving siblings and so the court was not able to order that these siblings be given personal notices of the intestate proceedings, it should be borne in mind that the settlement of estate, whether testate or intestate, is a proceeding in rem, and that the publication in the newspapers of the filing of the application and of the date set for the hearing of the same, in the manner prescribed by law, is a notice to the whole world of the existence of the proceedings and of the hearing on the date and time indicated in the publication. The publication requirement of the notice in newspapers is precisely for the purpose of informing all interested parties in the estate of the deceased of the existence of the settlement proceedings, most especially those who were not named as heirs or creditors in the petition, regardless of whether such omission was voluntarily or involuntarily made. Assuming, for the sake of argument, that Donata’s misrepresentation constitutes fraud that would impose upon her the implied trust provided in Article 1456 of the Civil Code, this

Court still cannot sustain respondents’ contention that their right to recover their shares in Maximino’s estate is imprescriptible. It is already settled in jurisprudence that an implied trust, as opposed to an express trust, is subject to prescription and laches. 10.

Sabidong v. Solas (AM No. P-01-1448)

Who Died: Charles Hodges – original owner of land Who Claimed: Nicolasito Solas – former Clerk of Court, then Sheriff of Iloilo Who Opposed: Rodolfo Sabidong – occupants of land of Hodges Estate Contention: Complainant alleges that respondent cannot purchase property as he, being an officer of the court, cannot purchase property under litigation within its jurisdiction. Respondent alleges that it is beyond the period of litigation as he purchased the land after there was a decision by the court to eject complainants. Issue: Whether or not Solas can purchase the disputed land? Held: No, Solas cannot purchase the disputed land. Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from acquiring property involved in litigation within the jurisdiction or territory of their courts. Said provision reads: Article 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: xxxx (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. xxxx

The rationale advanced for the prohibition is that public policy disallows the transactions in view of the fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised by these persons. “In so providing, the Code tends to prevent fraud, or more precisely, tends not to give occasion for fraud, which is what can and must be done.” For the prohibition to apply, the sale or assignment of the property must take place during the pendency of the litigation involving the property. Where the property is acquired after the termination of the case, no violation of paragraph 5, Article 1491 of the Civil Code attaches. In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decision in Civil Case No. 14706, which was promulgated on May 31, 1983 had long become final. Be that as it may, it can not be said that the property is no longer "in litigation" at that time considering that it was part of the Hodges Estate then under settlement proceedings (Sp. Proc. No. 1672). A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also from the moment that it becomes subject to the judicial action of the judge. A property forming part of the estate under judicial settlement continues to be subject of litigation until the probate court issues an order declaring the estate proceedings closed and terminated. The rule is that as long as the order for the distribution of the estate has not been complied with, the probate proceedings cannot be deemed closed and terminated. 11.

Aranas v. Mercado (GR No. 156407)

Who Died: Emigdio Mercado Who Claimed: Teresita Mercado – second wife of decedent Who Opposed: Thelma Aranas – child of decedent from first marriage Contention: Teresita, as administrator of the estate of Emigdio, submitted an inventory of the estate. This declared that there were no real properties in the estate. Thelma opposed. Teresita claims that the real properties were already sold to Melver Realty

in exchange for shares of stocks. Thelma claims that the real properties should be included in the inventory. Issue: (1) Whether or not the disputed real properties should be included in the inventory? (2) Whether or not the RTC had jurisdiction to include the disputed properties? Held: (1) Yes, the disputed real properties should be included. Upon issuing the letters of administration to the surviving spouse, the RTC becomes duty–bound to direct the preparation and submission of the inventory of the properties of the estate, and the surviving spouse, as the administrator, has the duty and responsibility to submit the inventory within three months from the issuance of letters of administration pursuant to Rule 83 of the Rules of Court, viz: Section 1. Inventory and appraisal to be returned within three months. – Within three (3) months after his appointment every executor or administrator shall return to the court a true inventory and appraisal of all the real and personal estate of the deceased which has come into his possession or knowledge. In the appraisement of such estate, the court may order one or more of the inheritance tax appraisers to give his or their assistance. The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties of the decedent in the inventory. However, the word all is qualified by the phrase which has come into his possession or knowledge, which signifies that the properties must be known to the administrator to belong to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the phrase true inventory implies that no properties appearing to belong to the decedent can be excluded from the inventory, regardless of their being in the possession of another person or entity. The RTC strictly followed the directives of the Rules of Court and the jurisprudence relevant to the procedure for preparing the inventory by the administrator. The aforequoted explanations indicated that the directive to include the properties in question in the inventory rested on good and valid reasons, and thus was far from whimsical, or arbitrary, or capricious. (2) Yes, the RTC has jurisdiction to include the disputed properties. There is no dispute that the jurisdiction of the trial

court as an intestate court is special and limited. The trial court cannot adjudicate title to properties claimed to be a part of the estate but are claimed to belong to third parties by title adverse to that of the decedent and the estate, not by virtue of any right of inheritance from the decedent. All that the trial court can do regarding said properties is to determine whether or not they should be included in the inventory of properties to be administered by the administrator.