Pasco Emnace
Pasco Emnace
Pasco Emnace
Section 1. Subject of Appeal An appeal may be taken from a WHEREFORE, it is most respectfully prayed that:
judgment or final order that completely disposes of the case,
or of a particular matter therein when declared by these 1) A Temporary Restraining Order and/or Preliminary
Rules to be appealable. Injunction issue ex parte directing the respondents to cease
and desist from enforcing, executing, or implementing in any
No appeal may be taken from: manner the Decision dated April 4, 2002 and acting in Civil
Case No. MM-3191 until further orders from this Honorable
xxxx Court.
(e) an order denying a motion to set aside a judgment by
consent, confession or compromise on the ground of fraud, 2) After hearing, the temporary restraining order/ex
mistake or duress, or any other ground vitiating consent. parte injunction be replaced by a writ of preliminary
injunction.
xxxx
3) After hearing on the merits, judgment be rendered:
In all the above instances where the judgment or final order
is not appealable, the aggrieved party may file an appropriate a. Making the injunction permanent.
special civil action under Rule 65.
From the express language of Rule 41, therefore, the MTCs Since the RTC found at the preliminary injunction phase that
denial of petitioners Motion to Set Aside Decision could not petitioners were not entitled to an injunction (whether
have been appealed. Indeed, a decision based on a preliminary or permanent), that petitioners arguments were
compromise agreement is immediately final and executory insufficient to support the relief sought, and that the MTCs
and cannot be the subject of appeal,[32] for when parties approval of the Compromise Agreement was not done in a
enter into a compromise agreement and request a court to capricious, whimsical, or arbitary manner, the RTC was not
render a decision on the basis of their agreement, it is required to engage in unnecessary duplication of
presumed that such action constitutes a waiver of the right to proceedings. As such, it rightly dismissed the petition.
appeal said decision.[33] While there may have been other
remedies available to assail the decision,[34]petitioners were In addition, nothing in the Rules of Court commands the RTC
well within their rights to institute a special civil action under to require the parties to file Memoranda. Indeed, Rule 65,
Rule 65. Sec. 8 is explicit in that the court may dismiss the petition if it
finds the same to be patently without merit, prosecuted
The Regional Trial Court rightly dismissed the petition for manifestly for delay, or that the questions raised therein are
certiorari. too unsubstantial to require consideration.[36]
Cresencia was authorized to enter into the Compromise
Agreement.
On the second issue, petitioners argue that the RTC, in
reconsidering the order granting the application for writ of
preliminary injunction, should not have gone so far as As regards the third issue, petitioners maintain that the SPA
dismissing the main case filed by the petitioners. They claim was fatally defective because Cresencia was not specifically
that the issue in their application for writ of preliminary authorized to enter into a compromise agreement. Here, we
injunction was different from the issues in the main case fully concur with the findings of the CA that:
for certiorari, and that the dissolution of the preliminary
injunction should have been without prejudice to the conduct x x x It is undisputed that Cresencias co-heirs executed a
of further proceedings in the main case. They also claim that Special Power of Attorney, dated 6 April 1999, designating
the RTC did not have the power to dismiss the case without the former as their attorney-in-fact and empowering her to
requiring the parties to file memoranda. file cases for collection of all the accounts due to Filomena or
her estate. Consequently, Cresencia entered into the subject
Compromise Agreement in order to collect the overdue loan
obtained by Pasco from Filomena. In so doing, Cresencia was initio for being violative of Article 1306 of the Civil Code. x x
merely performing her duty as attorney-in-fact of her co-heirs x (citations omitted)
pursuant to the Special Power of Attorney given to her.[37]
This is the main question raised in this petition for review 1. That on February 3, 1989, [private respondents] and
before us, assailing the Decision[1] of the Court of [petitioner] entered into a contract to sell involving a parcel
Appeals[2] in CA-GR CV No. 41994 promulgated on February of land situated in Sta. Rosa, Laguna, otherwise known as Lot
6, 1996 and its Resolution[3] dated July 19, 1996. The No. 2125 of the Sta. Rosa Estate.
challenged Decision disposed as follows:
2. That the price or consideration of the said sell [sic]
WHEREFORE, premises considered, the order of the lower is P150.00 per square meters;
court dismissing the complaint is SET ASIDE and judgment is
hereby rendered declaring the CONTRACT TO SELL 3. That the amount of P300,000.00 had already been received
executed by appellee in favor of appellants as valid and by [petitioner];
binding, subject to the result of the administration
proceedings of the testate Estate of Demetrio Carpena. 4. That the parties have knowledge that the property subject
of the contract to sell is subject of the probate proceedings;
SO ORDERED. [4]
5. That [as] of this time, the probate Court has not yet issued
Petitioners Motion for Reconsideration was denied in the an order either approving or denying the said sale. (p. 3,
challenged Resolution.[5] appealed Order of September 15, 1992, pp. 109-112, record).
Petitioner raises only one issue: We emphasize that hereditary rights are vested in the heir or
heirs from the moment of the decedents
Whether or not the Contract to Sell dated 03 February 1989 death.[14] Petitioner, therefore, became the owner of her
executed by the [p]etitioner and [p]rivate [r]espondent[s] hereditary share the moment her father died. Thus, the lack
without the requisite probate court approval is valid. of judicial approval does not invalidate the Contract to Sell,
because the petitioner has the substantive right to sell the
The Courts Ruling whole or a part of her share in the estate of her late
father.[15] Thus, in Jakosalem vs. Rafols,[16] the Court
resolved an identical issue under the old Civil Code and held:
The petition has no merit.
Estoppel
JUSTICE AQUINO:
What we have here is a situation where some of the heirs of
the decedent without securing court approval have
Counsel for petitioner, when the Memorandum of Agreement appropriated as their own personal property the properties
was executed, did the children of Juliana Salgado know of [the] Estate, to the exclusion and the extreme prejudice of
already that there was a claim for share in the inheritance of the other claimant/heirs. In other words, these heirs, without
the children of Novicio? court approval, have distributed the asset of the estate
among themselves and proceeded to dispose the same to
ATTY. CALIMAG: third parties even in the absence of an order of distribution
by the Estate Court. As admitted by petitioners counsel, there
Your Honor please, at that time, Your Honor, it is already was absolutely no legal justification for this action by the
known to them. heirs. There being no legal justification, petitioner has no
basis for demanding that public respondent [the intestate
JUSTICE AQUINO: court] approve the sale of the Philinterlife shares of the
Estate by Juliana and Jose Ortaez in favor of the Filipino Loan
What can be your legal justification for extrajudicial Assistance Group.
settlement of a property subject of intestate proceedings
when there is an adverse claim of another set of heirs, It is an undisputed fact that the parties to the Memorandum
alleged heirs? What would be the legal justification for extra- of Agreement dated March 4, 1982 (see Annex 7 of the
judicially settling a property under administration without the Comment). . . are not the only heirs claiming an interest in
approval of the intestate court? the estate left by Dr. Juvencio P. Ortaez. The records of this
case. . . clearly show that as early as March 3, 1981 an
ATTY. CALIMAG: Opposition to the Application for Issuance of Letters of
Administration was filed by the acknowledged natural
children of Dr. Juvencio P. Ortaez with Ligaya Novicio. . . This
Well, Your Honor please, in that extra-judicial settlement
claim by the acknowledged natural children of Dr. Juvencio P.
there is an approval of the honorable court as to the
Ortaez is admittedly known to the parties to the
propertys partition x x x. There were as mentioned by the
Memorandum of Agreement before they executed the same.
respondents counsel, Your Honor.
This much was admitted by petitioners counsel during the
oral argument. xxx
ATTY. BUYCO:
Given the foregoing facts, and the applicable jurisprudence,
No
public respondent can never be faulted for not approving. . .
the subsequent sale by the petitioner [Jose Ortaez] and his
JUSTICE AQUINO: mother [Juliana Ortaez] of the Philinterlife shares belonging
to the Estate of Dr. Juvencio P. Ortaez. (pages 3-4 of Private fishponds as among the real properties of the estate in her
Respondents Memorandum; pages 243-244 of the Rollo) inventory submitted on August 13, 1981. In fact, as stated by
the Court of Appeals, petitioner, at the time of the sale of the
Amidst the foregoing, We found no grave abuse of discretion fishponds in question, knew that the same were part of the
amounting to excess or want of jurisdiction committed by estate under administration.
respondent judge.[19]
xxxxxxxxx
From the above decision, it is clear that Juliana Ortaez, and
her three sons, Jose, Rafael and Antonio, all surnamed The subject properties therefore are under the jurisdiction of
Ortaez, invalidly entered into a memorandum of agreement the probate court which according to our settled
extrajudicially partitioning the intestate estate among jurisprudence has the authority to approve any disposition
themselves, despite their knowledge that there were other regarding properties under administration. . . More emphatic
heirs or claimants to the estate and before final settlement of is the declaration We made in Estate of Olave vs. Reyes (123
the estate by the intestate court. Since the appropriation of SCRA 767) where We stated that when the estate of the
the estate properties by Juliana Ortaez and her children (Jose, deceased person is already the subject of a testate or
Rafael and Antonio Ortaez) was invalid, the subsequent sale intestate proceeding, the administrator cannot enter into any
thereof by Juliana and Jose to a third party (FLAG), without transaction involving it without prior approval of the probate
court approval, was likewise void. court.
An heir can sell his right, interest, or participation in the Only recently, in Manotok Realty, Inc. vs. Court of Appeals
property under administration under Art. 533 of the Civil (149 SCRA 174), We held that the sale of an immovable
Code which provides that possession of hereditary property is property belonging to the estate of a decedent, in a special
deemed transmitted to the heir without interruption from proceedings, needs court approval. . . This pronouncement
the moment of death of the decedent.[20] However, an heir finds support in the previous case of Dolores Vda. De Gil vs.
can only alienate such portion of the estate that may be Agustin Cancio (14 SCRA 797) wherein We emphasized that it
allotted to him in the division of the estate by the probate or is within the jurisdiction of a probate court to approve the
intestate court after final adjudication, that is, after all sale of properties of a deceased person by his prospective
debtors shall have been paid or the devisees or legatees shall heirs before final adjudication. x x x
have been given their shares.[21]This means that an heir may
only sell his ideal or undivided share in the estate, not any It being settled that property under administration needs the
specific property therein. In the present case, Juliana Ortaez approval of the probate court before it can be disposed of,
and Jose Ortaez sold specific properties of the estate (1,014 any unauthorized disposition does not bind the estate and is
and 1,011 shares of stock in Philinterlife) in favor of petitioner null and void. As early as 1921 in the case of Godoy vs.
FLAG. This they could not lawfully do pending the final Orellano (42 Phil 347), We laid down the rule that a sale by an
adjudication of the estate by the intestate court because of administrator of property of the deceased, which is not
the undue prejudice it would cause the other claimants to the authorized by the probate court is null and void and title does
estate, as what happened in the present case. not pass to the purchaser.
Juliana Ortaez and Jose Ortaez sold specific properties of the There is hardly any doubt that the probate court can declare
estate, without court approval. It is well-settled that court null and void the disposition of the property under
approval is necessary for the validity of any disposition of the administration, made by private respondent, the same having
decedents estate. In the early case of Godoy vs. been effected without authority from said court. It is the
Orellano,[22] we laid down the rule that the sale of the probate court that has the power to authorize and/or
property of the estate by an administrator without the order approve the sale (Section 4 and 7, Rule 89), hence, a fortiori,
of the probate court is void and passes no title to the it is said court that can declare it null and void for as long as
purchaser. And in the case of Dillena vs. Court of the proceedings had not been closed or terminated. To
Appeals,[23] we ruled that: uphold petitioners contention that the probate court cannot
annul the unauthorized sale, would render meaningless the
[I]t must be emphasized that the questioned properties power pertaining to the said court. (Bonga vs. Soler, 2 SCRA
(fishpond) were included in the inventory of properties of the 755). (emphasis ours)
estate submitted by then Administratrix Fausta Carreon
Herrera on November 14, 1974. Private respondent was Our jurisprudence is therefore clear that (1) any disposition of
appointed as administratrix of the estate on March 3, 1976 in estate property by an administrator or prospective heir
lieu of Fausta Carreon Herrera. On November 1, 1978, the pending final adjudication requires court approval and (2) any
questioned deed of sale of the fishponds was executed unauthorized disposition of estate property can be annulled
between petitioner and private respondent without notice by the probate court, there being no need for a separate
and approval of the probate court. Even after the sale, action to annul the unauthorized disposition.
administratrix Aurora Carreon still included the three
The question now is: can the intestate or probate court We are not dealing here with the issue of inclusion or
execute its order nullifying the invalid sale? exclusion of properties in the inventory of the estate because
there is no question that, from the very start, the Philinterlife
We see no reason why it cannot. The intestate court has the shares of stock were owned by the decedent, Dr. Juvencio
power to execute its order with regard to the nullity of an Ortaez. Rather, we are concerned here with the effect of the
unauthorized sale of estate property, otherwise its power to sale made by the decedents heirs, Juliana Ortaez and Jose
annul the unauthorized or fraudulent disposition of estate Ortaez, without the required approval of the intestate
property would be meaningless. In other words, enforcement court. This being so, the contention of petitioners that the
is a necessary adjunct of the intestate or probate courts determination of the intestate court was merely provisional
power to annul unauthorized or fraudulent transactions to and should have been threshed out in a separate proceeding
prevent the dissipation of estate property before final is incorrect.
adjudication.
The petitioners Jose Lee and Alma Aggabao next contend that
Moreover, in this case, the order of the intestate court the writ of execution should not be executed against them
nullifying the sale was affirmed by the appellate courts (the because they were not notified, nor they were aware, of the
Court of Appeals in CA-G.R. SP No. 46342 dated June 23, 1998 proceedings nullifying the sale of the shares of stock.
and subsequently by the Supreme Court in G.R. No. 135177
dated October 9, 1998). The finality of the decision of the We are not persuaded. The title of the purchaser like herein
Supreme Court was entered in the book of entry of petitioner FLAG can be struck down by the intestate court
judgments on February 23, 1999. Considering the finality of after a clear showing of the nullity of the alienation. This is
the order of the intestate court nullifying the sale, as affirmed the logical consequence of our ruling in Godoy and in several
by the appellate courts, it was correct for private respondent- subsequent cases.[26] The sale of any property of the estate
Special Administratrix Enderes to thereafter move for a writ by an administrator or prospective heir without order of the
of execution and for the intestate court to grant it. probate or intestate court is void and passes no title to the
purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto,
Petitioners Jose Lee, Alma Aggabao and FLAG, however, G.R. No. 56451, June 19, 1985, we ordered the probate court
contend that the probate court could not issue a writ of to cancel the transfer certificate of title issued to the vendees
execution with regard to its order nullifying the sale because at the instance of the administrator after finding that the sale
said order was merely provisional: of real property under probate proceedings was made
without the prior approval of the court. The dispositive
The only authority given by law is for respondent judge to portion of our decision read:
determine provisionally whether said shares are included or
excluded in the inventory In ordering the execution of the IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed
orders, respondent judge acted in excess of his jurisdiction Order dated February 18, 1981 of the respondent Judge
and grossly violated settled law and jurisprudence, i.e., that approving the questioned Amicable Settlement is declared
the determination by a probate or intestate court of whether NULL and VOID and hereby SET ASIDE. Consequently, the sale
a property is included or excluded in the inventory of the in favor of Sotero Dioniosio III and by the latter to William Go
estate being provisional in nature, cannot be the subject of is likewise declared NULL and VOID. The Transfer Certificate
execution.[24] (emphasis ours) of Title issued to the latter is hereby ordered cancelled.
Petitioners argument is misplaced. There is no question, It goes without saying that the increase in Philinterlifes
based on the facts of this case, that the Philinterlife shares of authorized capital stock, approved on the vote of petitioners
stock were part of the estate of Dr. Juvencio Ortaez from the non-existent shareholdings and obviously calculated to make
very start as in fact these shares were included in the it difficult for Dr. Ortaezs estate to reassume its controlling
inventory of the properties of the estate submitted by Rafael interest in Philinterlife, was likewise void ab initio.
Ortaez after he and his brother, Jose Ortaez, were appointed
special administrators by the intestate court.[25] Petitioners next argue that they were denied due process.
The controversy here actually started when, during the We do not think so.
pendency of the settlement of the estate of Dr. Ortaez, his
wife Juliana Ortaez sold the 1,014 Philinterlife shares of stock The facts show that petitioners, for reasons known only to
in favor petitioner FLAG without the approval of the intestate them, did not appeal the decision of the intestate court
court. Her son Jose Ortaez later sold the remaining 1,011 nullifying the sale of shares of stock in their favor. Only the
Philinterlife shares also in favor of FLAG without the approval vendor, Jose Ortaez, appealed the case. A careful review of
of the intestate court. the records shows that petitioners had actual knowledge of
the estate settlement proceedings and that they knew private
respondent Enderes was questioning therein the sale to them filed their answer which contained statements showing that
of the Philinterlife shares of stock. they knew of the pending intestate proceedings:
It must be noted that private respondent-Special [T]he subject matter of the complaint is not within the
Administratrix Enderes filed before the intestate court (RTC of jurisdiction of the SEC but with the Regional Trial Court;
Quezon City, Branch 85) a Motion to Declare Void Ab Ligaya Novicio and children represented themselves to be the
Initio Deeds of Sale of Philinterlife Shares of Stock on March common law wife and illegitimate children of the late Ortaez;
22, 1996. But as early as 1994, petitioners already knew of that on March 4, 1982, the surviving spouse Juliana Ortaez,
the pending settlement proceedings and that the shares they on her behalf and for her minor son Antonio, executed a
bought were under the administration by the intestate court Memorandum of Agreement with her other sons Rafael and
because private respondent Ma. Divina Ortaez-Enderes and Jose, both surnamed Ortaez, dividing the estate of the
her mother Ligaya Novicio had filed a case against them at deceased composed of his one-half (1/2) share in the
the Securities and Exchange Commission on November 7, conjugal properties; that in the said Memorandum of
1994, docketed as SEC No. 11-94-4909, for annulment of Agreement, Jose S. Ortaez acquired as his share of the estate
transfer of shares of stock, annulment of sale of corporate the 1,329 shares of stock in Philinterlife; that on March 4,
properties, annulment of subscriptions on increased capital 1982, Juliana and Rafael assigned their respective shares of
stocks, accounting, inspection of corporate books and records stock in Philinterlife to Jose; that contrary to the contentions
and damages with prayer for a writ of preliminary injunction of petitioners, private respondents Jose Lee, Carlos Lee,
and/or temporary restraining order.[27] In said case, Enderes Benjamin Lee and Alma Aggabao became stockholders of
and her mother questioned the sale of the aforesaid shares of Philinterlife on March 23, 1983 when Jose S. Ortaez, the
stock to petitioners. The SEC hearing officer in fact, in his principal stockholder at that time, executed a deed of sale of
resolution dated March 24, 1995, deferred to the jurisdiction his shares of stock to private respondents; and that the right
of the intestate court to rule on the validity of the sale of of petitioners to question the Memorandum of Agreement
shares of stock sold to petitioners by Jose Ortaez and Juliana and the acquisition of shares of stock of private respondent is
Ortaez: barred by prescription.[29]
Petitioners also averred that. . . the Philinterlife shares of Dr. Also, private respondent-Special Administratrix Enderes
Juvencio Ortaez who died, in 1980, are part of his estate offered additional proof of actual knowledge of the
which is presently the subject matter of an intestate settlement proceedings by petitioners which petitioners
proceeding of the RTC of Quezon City, Branch 85. Although, never denied: (1) that petitioners were represented by Atty.
private respondents [Jose Lee et al.] presented the Ricardo Calimag previously hired by the mother of private
documents of partition whereby the foregoing share of stocks respondent Enderes to initiate cases against petitioners Jose
were allegedly partitioned and conveyed to Jose S. Ortaez Lee and Alma Aggaboa for the nullification of the sale of the
who allegedly assigned the same to the other private shares of stock but said counsel made a conflicting turn-
respondents, approval of the Court was not presented. Thus, around and appeared instead as counsel of petitioners, and
the assignments to the private respondents [Jose Lee et al.] (2) that the deeds of sale executed between petitioners and
of the subject shares of stocks are void. the heirs of the decedent (vendors Juliana Ortaez and Jose
Ortaez) were acknowledged before Atty. Ramon Carpio who,
xxxxxxxxx during the pendency of the settlement proceedings, filed a
motion for the approval of the sale of Philinterlife shares of
With respect to the alleged extrajudicial partition of the stock to the Knights of Columbus Fraternal Association, Inc.
shares of stock owned by the late Dr. Juvencio Ortaez, we (which motion was, however, later abandoned).[30] All this
rule that the matter properly belongs to the jurisdiction of sufficiently proves that petitioners, through their counsels,
the regular court where the intestate proceedings are knew of the pending settlement proceedings.
currently pending.[28]
Finally, petitioners filed several criminal cases such as libel
With this resolution of the SEC hearing officer dated as early (Criminal Case No. 97-7179-81), grave coercion (Criminal Case
as March 24, 1995 recognizing the jurisdiction of the intestate No. 84624) and robbery (Criminal Case No. Q-96-67919)
court to determine the validity of the extrajudicial partition of against private respondents mother Ligaya Novicio who was a
the estate of Dr. Ortaez and the subsequent sale by the heirs director of Philinterlife,[31] all of which criminal cases were
of the decedent of the Philinterlife shares of stock to related to the questionable sale to petitioners of the
petitioners, how can petitioners claim that they were not Philinterlife shares of stock.
aware of the intestate proceedings?
Considering these circumstances, we cannot accept
Futhermore, when the resolution of the SEC hearing officer petitioners claim of denial of due process. The essence of due
reached the Supreme Court in 1996 (docketed as G.R. process is the reasonable opportunity to be heard. Where the
128525), herein petitioners who were respondents therein opportunity to be heard has been accorded, there is no denial
of due process.[32] In this case, petitioners knew of the
pending instestate proceedings for the settlement of Dr.
Juvencio Ortaezs estate but for reasons they alone knew,
they never intervened. When the court declared the nullity of
the sale, they did not bother to appeal. And when they were
notified of the motion for execution of the Orders of the
intestate court, they ignored the same. Clearly, petitioners
alone should bear the blame.
SO ORDERED.
CELESTINO BALUS, G.R. No. 168970 line 12-13 by Lot 4649, Csd-292; and along line 12-1, by Lot
4661, Csd-292. x x x [2]
Petitioner,
Rufo failed to pay his loan. As a result, the mortgaged
Present: property was foreclosed and was subsequently sold to the
Bank as the sole bidder at a public auction held for that
purpose. On November 20, 1981, a Certificate of Sale[3] was
executed by the sheriff in favor of the Bank. The property was
CORONA, J., not redeemed within the period allowed by law. More than
Chairperson, two years after the auction, or on January 25, 1984, the
- versus - sheriff executed a Definite Deed of Sale[4] in the Bank's favor.
VELASCO, JR., Thereafter, a new title was issued in the name of the Bank.
The facts of the case are as follows: WHEREFORE, judgment is hereby rendered, ordering the
Herein petitioner and respondents are the children of the plaintiffs to execute a Deed of Sale in favor of the defendant,
spouses Rufo and Sebastiana Balus. Sebastiana died the one-third share of the property in question, presently
on September 6, 1978, while Rufo died on July 6, 1984. possessed by him, and described in the deed of partition, as
On January 3, 1979, Rufo mortgaged a parcel of land, which follows:
he owns, as security for a loan he obtained from the Rural
Bank of Maigo, Lanao del Norte (Bank). The said property was A one-third portion of Transfer Certificate of Title No. T-
originally covered by Original Certificate of Title No. P- 39,484 (a.f.), formerly Original Certificate of Title No. P-788,
439(788) and more particularly described as follows: now in the name of Saturnino Balus and Leonarda B. Vda. de
Calunod, situated at Lagundang, Bunawan, Iligan City,
A parcel of land with all the improvements thereon, bounded on the North by Lot 5122; East by shares of
containing an area of 3.0740 hectares, more or less, situated Saturnino Balus and Leonarda Balus-Calunod; South by Lot
in the Barrio of Lagundang, Bunawan, Iligan City, and 4649, Dodiongan River; West by Lot 4661, consisting of
bounded as follows: Bounded on the NE., along line 1-2, by 10,246 square meters, including improvements thereon.
Lot 5122, Csd-292; along line 2-12, by Dodiongan River; along
and dismissing all other claims of the parties. agreement, petitioner contends, is the law between the
parties and, as such, binds the respondents. As a result,
The amount of P6,733.33 consigned by the defendant with petitioner asserts that respondents' act of buying the
the Clerk of Court is hereby ordered delivered to the disputed property from the Bank without notifying him inures
plaintiffs, as purchase price of the one-third portion of the to his benefit as to give him the right to claim his rightful
land in question. portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they
Plaintiffs are ordered to pay the costs. paid to the Bank.
The RTC held that the right of petitioner to purchase from the Petitioner and respondents are arguing on the wrong premise
respondents his share in the disputed property was that, at the time of the execution of the Extrajudicial
recognized by the provisions of the Extrajudicial Settlement Settlement, the subject property formed part of the estate of
of Estate, which the parties had executed before the their deceased father to which they may lay claim as his heirs.
respondents bought the subject lot from the Bank.
At the outset, it bears to emphasize that there is no dispute
Aggrieved by the Decision of the RTC, herein respondents with respect to the fact that the subject property was
filed an appeal with the CA. exclusively owned by petitioner and respondents' father,
Rufo, at the time that it was mortgaged in 1979. This was
On May 31, 2005, the CA promulgated the presently assailed stipulated by the parties during the hearing conducted by the
Decision, reversing and setting aside the Decision of the RTC trial court on October 28, 1996.[12] Evidence shows that a
and ordering petitioner to immediately surrender possession Definite Deed of Sale[13] was issued in favor of the Bank
of the subject property to the respondents. The CA ruled that on January 25, 1984, after the period of redemption
when petitioner and respondents did not redeem the subject expired. There is neither any dispute that a new title was
property within the redemption period and allowed the issued in the Bank's name before Rufo died on July 6,
consolidation of ownership and the issuance of a new title in 1984. Hence, there is no question that the Bank acquired
the name of the Bank, their co-ownership was extinguished. exclusive ownership of the contested lot during the lifetime
of Rufo.
Hence, the instant petition raising a sole issue, to wit:
The rights to a person's succession are transmitted from the
WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER moment of his death.[14] In addition, the inheritance of a
AND THE RESPONDENTS OVER THE PROPERTY person consists of the property and transmissible rights and
PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE obligations existing at the time of his death, as well as those
TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF THE which have accrued thereto since the opening of the
PARTIES' AGREEMENT PRIOR TO THE REPURCHASE THEREOF succession.[15] In the present case, since Rufo lost ownership
BY THE RESPONDENTS; THUS, WARRANTING THE of the subject property during his lifetime, it only follows that
PETITIONER'S ACT OF ENFORCING THE AGREEMENT BY at the time of his death, the disputed parcel of land no longer
REIMBURSING THE RESPONDENTS OF HIS (PETITIONER'S) formed part of his estate to which his heirs may lay claim.
JUST SHARE OF THE REPURCHASE PRICE.[11] Stated differently, petitioner and respondents never inherited
The main issue raised by petitioner is whether co-ownership the subject lot from their father.
by him and respondents over the subject property persisted
even after the lot was purchased by the Bank and title Petitioner and respondents, therefore, were wrong in
thereto transferred to its name, and even after it was assuming that they became co-owners of the subject lot.
eventually bought back by the respondents from the Bank. Thus, any issue arising from the supposed right of petitioner
as co-owner of the contested parcel of land is negated by the
Petitioner insists that despite respondents' full knowledge of fact that, in the eyes of the law, the disputed lot did not pass
the fact that the title over the disputed property was already into the hands of petitioner and respondents as compulsory
in the name of the Bank, they still proceeded to execute the heirs of Rufo at any given point in time.
subject Extrajudicial Settlement, having in mind the intention
of purchasing back the property together with petitioner and The foregoing notwithstanding, the Court finds a necessity for
of continuing their co-ownership thereof. a complete determination of the issues raised in the instant
case to look into petitioner's argument that the Extrajudicial
Petitioner posits that the subject Extrajudicial Settlement is, Settlement is an independent contract which gives him the
in and by itself, a contract between him and respondents, right to enforce his right to claim a portion of the disputed lot
because it contains a provision whereby the parties agreed to bought by respondents.
continue their co-ownership of the subject property by
redeeming or repurchasing the same from the Bank. This
It is true that under Article 1315 of the Civil Code of the In addition, it appears from the recitals in the Extrajudicial
Philippines, contracts are perfected by mere consent; and Settlement that, at the time of the execution thereof, the
from that moment, the parties are bound not only to the parties were not yet aware that the subject property was
fulfillment of what has been expressly stipulated but also to already exclusively owned by the Bank. Nonetheless, the lack
all the consequences which, according to their nature, may of knowledge on the part of petitioner and respondents that
be in keeping with good faith, usage and law. the mortgage was already foreclosed and title to the property
was already transferred to the Bank does not give them the
Article 1306 of the same Code also provides that the right or the authority to unilaterally declare themselves as co-
contracting parties may establish such stipulations, clauses, owners of the disputed property; otherwise, the disposition
terms and conditions as they may deem convenient, provided of the case would be made to depend on the belief and
these are not contrary to law, morals, good customs, public conviction of the party-litigants and not on the evidence
order or public policy. adduced and the law and jurisprudence applicable thereto.
In the present case, however, there is nothing in the subject Furthermore, petitioner's contention that he and his siblings
Extrajudicial Settlement to indicate any express stipulation intended to continue their supposed co-ownership of the
for petitioner and respondents to continue with their subject property contradicts the provisions of the subject
supposed co-ownership of the contested lot. Extrajudicial Settlement where they clearly manifested their
intention of having the subject property divided or
On the contrary, a plain reading of the provisions of the partitioned by assigning to each of the petitioner and
Extrajudicial Settlement would not, in any way, support respondents a specific 1/3 portion of the same. Partition calls
petitioner's contention that it was his and his sibling's for the segregation and conveyance of a determinate portion
intention to buy the subject property from the Bank and of the property owned in common. It seeks a severance of
continue what they believed to be co-ownership thereof. It is the individual interests of each co-owner, vesting in each of
a cardinal rule in the interpretation of contracts that the them a sole estate in a specific property and giving each one
intention of the parties shall be accorded primordial a right to enjoy his estate without supervision or interference
consideration.[16] It is the duty of the courts to place a from the other.[20] In other words, the purpose of partition is
practical and realistic construction upon it, giving due to put an end to co-ownership,[21] an objective which
consideration to the context in which it is negotiated and the negates petitioner's claims in the present case.
purpose which it is intended to serve.[17] Such intention is
determined from the express terms of their agreement, as WHEREFORE, the instant petition is DENIED. The assailed
well as their contemporaneous and subsequent Decision of the Court of Appeals, dated May 31, 2005 in CA-
acts.[18] Absurd and illogical interpretations should also be G.R. CV No. 58041, is AFFIRMED.
avoided.[19]
SO ORDERED.
For petitioner to claim that the Extrajudicial Settlement is an
agreement between him and his siblings to continue what
they thought was their ownership of the subject property,
even after the same had been bought by the Bank, is
stretching the interpretation of the said Extrajudicial
Settlement too far.
xxxxxxxxx Since Evarista died ahead of her brother Francisco, the latter
inherited a portion of the estate of the former as one of her
It is a basic principle embodied in Article 777, New Civil Code heirs. Subsequently, when Francisco died, his heirs, namely:
that the rights to the succession are transmitted from the his spouse, legitimate children, and the private respondent,
moment of the death of the decedent, so that Francisco dela Joselito, an illegitimate child, inherited his (Franciscos) share
Merced inherited 1/3 of his sisters estate at the moment of in the estate of Evarista. It bears stressing that Joselito does
the latters death. Said 1/3 of Evaristas estate formed part of not claim to be an heir of Evarista by right of representation
Franciscos estate which was subsequently transmitted upon but participates in his own right, as an heir of the late
his death on March 23, 1987 to his legal heirs, among whom Francisco, in the latters share (or portion thereof) in the
is appellant as his illegitimate child. Appellant became estate of Evarista.
entitled to his share in Franciscos estate from the time of the
latters death in 1987. The extrajudicial settlement therefore Petitioners argue that if Joselito desires to assert successional
is void insofar as it deprives plaintiff-appellant of his share in rights to the intestate estate of his father, the proper forum
the estate of Francisco M. dela Merced. As a consequence, should be in the settlement of his own fathers intestate
the cancellation of the notice of lis pendens is not in order estate, as this Court held in the case of Gutierrez vs.
because the property is directly affected.Appellant has the Macandog (150 SCRA 422 [1987])
right to demand a partition of his fathers estate which
includes 1/3 of the property inherited from Evarista dela Petitioners reliance on the case of Gutierrez vs. Macandog
Merced. (supra) is misplaced. The said case involved a claim for
support filed by one Elpedia Gutierrez against the estate of
WHEREFORE, premises considered, the appealed decision is the decedent, Agustin Gutierrez, Sr., when she was not even
hereby REVERSED and SET ASIDE. Defendants-appellees are an heir to the estate in question, at the time, and the
hereby ordered to execute an amendatory decedent had no obligation whatsoever to give her support.
agreement/settlement to include herein plaintiff-appellant Thus, this Court ruled that Elpedia should have asked for
Joselito dela Merced as co-heir to the estate of Francisco dela support pendente lite before the Juvenile and Domestic
Merced which includes 1/3 of the estate subject of the Relations Court in which court her husband (one of the legal
questioned Deed of Extrajudicial Settlement of the Estate of heirs of the decedent) had instituted a case for legal
Evarista M. dela Merced dated April 20, 1989. The separation against her on the ground of an attempt against
amendatory agreement/settlement shall form part of the his life. When Mauricio (her husband) died, she should have
original Extrajudicial Settlement. With costs against commenced an action for the settlement of the estate of her
defendants-appellees. husband, in which case she could receive whatever allowance
the intestate court would grant her.
SO ORDERED. (Rollo, p. 41)
The present case, however, relates to the rightful and
In the Petition under consideration, petitioners insist that undisputed right of an heir to the share of his late father in
being an illegitimate child, private respondent Joselito the estate of the decedent Evarista, ownership of which had
is barred from inheriting from Evarista because of the been transmitted to his father upon the death of
provision of Article 992 of the New Civil Code, which lays Evarista. There is no legal obstacle for private respondent
down an impassable barrier between the legitimate and Joselito, admittedly the son of the late Francisco, to inherit in
illegitimate families. his own right as an heir to his fathers estate, which estate
includes a one-third (1/3) undivided share in the estate
The Petition is devoid of merit. of Evarista.
Article 992 of the New Civil Code is not applicable because WHEREFORE, for lack of merit, the Petition is hereby DENIED
involved here is not a situation where an illegitimate child and the Appealed Decision of the Court of Appeals
would inherit ab intestato from a legitimate sister of his AFFIRMED in toto.
father, which is prohibited by the aforesaid provision of
law. Rather, it is a scenario where an illegitimate child SO ORDERED.
inherits from his father, the latters share in or
G.R. No. 103577. October 7, 1996] Clearly, the conditions appurtenant to the sale are the
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. following:
CORONEL, ANNABELLE C. GONZALES (for herself and on
behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A. 1. Ramona will make a down payment of Fifty Thousand
CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAIS (P50,000.00) pesos upon execution of the document
MABANAG, petitioners, aforestated;
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ and 2. The Coronels will cause the transfer in their names of the
RAMONA PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as title of the property registered in the name of their deceased
attorney-in-fact, respondents. father upon receipt of the Fifty Thousand (P50,000.00) Pesos
down payment;
DECISION
MELO, J.:
3. Upon the transfer in their names of the subject property,
the Coronels will execute the deed of absolute sale in favor of
The petition before us has its roots in a complaint for specific
Ramona and the latter will pay the former the whole balance
performance to compel herein petitioners (except the last
of One Million One Hundred Ninety Thousand
named, Catalina Balais Mabanag) to consummate the sale of
(P1,190,000.00) Pesos.
a parcel of land with its improvements located along
Roosevelt Avenue in Quezon City entered into by the parties
On the same date (January 15, 1985), plaintiff-appellee
sometime in January 1985 for the price of P1,240,000.00.
Concepcion D. Alcaraz (hereinafter referred to as
Concepcion), mother of Ramona, paid the down payment of
The undisputed facts of the case were summarized by
Fifty Thousand (P50,000.00) Pesos (Exh. B, Exh. 2).
respondent court in this wise:
On February 6, 1985, the property originally registered in the
On January 19, 1985, defendants-appellants Romulo
name of the Coronels father was transferred in their names
Coronel, et. al. (hereinafter referred to as Coronels) executed
under TCT No. 327043 (Exh. D; Exh 4)
a document entitled Receipt of Down Payment (Exh. A) in
favor of plaintiff Ramona Patricia Alcaraz (hereinafter
On February 18, 1985, the Coronels sold the property covered
referred to as Ramona) which is reproduced hereunder:
by TCT No. 327043 to intervenor-appellant Catalina B.
Mabanag (hereinafter referred to as Catalina) for One Million
RECEIPT OF DOWN PAYMENT
Five Hundred Eighty Thousand (P1,580,000.00) Pesos after
the latter has paid Three Hundred Thousand (P300,000.00)
P1,240,000.00 - Total amount Pesos (Exhs. F-3; Exh. 6-C)
50,000.00 - Down payment For this reason, Coronels canceled and rescinded the contract
(Exh. A) with Ramona by depositing the down payment paid
------------------------------------------ by Concepcion in the bank in trust for Ramona Patricia
Alcaraz.
P1,190,000.00 - Balance
On February 22, 1985, Concepcion, et. al., filed a complaint
Received from Miss Ramona Patricia Alcaraz of 146 Timog, for a specific performance against the Coronels and caused
Quezon City, the sum of Fifty Thousand Pesos purchase price the annotation of a notice of lis pendens at the back of TCT
of our inherited house and lot, covered by TCT No. 119627 of No. 327403 (Exh. E; Exh. 5).
the Registry of Deeds of Quezon City, in the total amount
of P1,240,000.00. On April 2, 1985, Catalina caused the annotation of a notice
of adverse claim covering the same property with the
We bind ourselves to effect the transfer in our names from Registry of Deeds of Quezon City (Exh. F; Exh. 6).
our deceased father, Constancio P. Coronel, the transfer
certificate of title immediately upon receipt of the down On April 25, 1985, the Coronels executed a Deed of Absolute
payment above-stated. Sale over the subject property in favor of Catalina (Exh. G;
Exh. 7).
On our presentation of the TCT already in or name, We will
immediately execute the deed of absolute sale of said On June 5, 1985, a new title over the subject property was
property and Miss Ramona Patricia Alcaraz shall immediately issued in the name of Catalina under TCT No. 351582 (Exh. H;
pay the balance of the P1,190,000.00. Exh. 8).
So Ordered. SO ORDERED.
Macabebe, Pampanga for Quezon City, March 1, 1989. Quezon City, Philippines, July 12, 1989.
A motion for reconsideration was filed by petitioners before Petitioners thereupon interposed an appeal, but
the new presiding judge of the Quezon City RTC but the same on December 16, 1991, the Court of Appeals (Buena,
was denied by Judge Estrella T. Estrada, thusly: Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its decision
fully agreeing with the trial court.
The prayer contained in the instant motion, i.e., to annul the
decision and to render anew decision by the undersigned
Hence, the instant petition which was filed on March 5, a) Consent or meeting of the minds, that is, consent to
1992. The last pleading, private respondents Reply transfer ownership in exchange for the price;
Memorandum, was filed on September 15, 1993. The case
was, however, re-raffled to undersigned ponente only b) Determinate subject matter; and
on August 28, 1996, due to the voluntary inhibition of the
Justice to whom the case was last assigned. c) Price certain in money or its equivalent.
While we deem it necessary to introduce certain refinements Under this definition, a Contract to Sell may not be
in the disquisition of respondent court in the affirmance of considered as a Contract of Sale because the first essential
the trial courts decision, we definitely find the instant petition element is lacking. In a contract to sell, the prospective seller
bereft of merit. explicitly reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree
The heart of the controversy which is the ultimate key in the or consent to transfer ownership of the property subject of
resolution of the other issues in the case at bar is the precise the contract to sell until the happening of an event, which for
determination of the legal significance of the document present purposes we shall take as the full payment of the
entitled Receipt of Down Payment which was offered in purchase price. What the seller agrees or obliges himself to
evidence by both parties. There is no dispute as to the fact do is to fulfill his promise to sell the subject property when
that the said document embodied the binding contract the entire amount of the purchase price is delivered to
between Ramona Patricia Alcaraz on the one hand, and the him. In other words the full payment of the purchase price
heirs of Constancio P. Coronel on the other, pertaining to a partakes of a suspensive condition, the non-fulfillment of
particular house and lot covered by TCT No. 119627, as which prevents the obligation to sell from arising and thus,
defined in Article 1305 of the Civil Code of the Philippines ownership is retained by the prospective seller without
which reads as follows: further remedies by the prospective buyer. In Roque vs.
Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Art. 1305. A contract is a meeting of minds between two
persons whereby one binds himself, with respect to the Hence, We hold that the contract between the petitioner and
other, to give something or to render some service. the respondent was a contract to sell where the ownership or
title is retained by the seller and is not to pass until the full
While, it is the position of private respondents that the payment of the price, such payment being a positive
Receipt of Down Payment embodied a perfected contract of suspensive condition and failure of which is not a breach,
sale, which perforce, they seek to enforce by means of an casual or serious, but simply an event that prevented the
action for specific performance, petitioners on their part obligation of the vendor to convey title from acquiring
insist that what the document signified was a mere executory binding force.
contract to sell, subject to certain suspensive conditions, and
because of the absence of Ramona P. Alcaraz, who left for the Stated positively, upon the fulfillment of the suspensive
United States of America, said contract could not possibly condition which is the full payment of the purchase price, the
ripen into a contract of absolute sale. prospective sellers obligation to sell the subject property by
entering into a contract of sale with the prospective buyer
Plainly, such variance in the contending parties contention is becomes demandable as provided in Article 1479 of the Civil
brought about by the way each interprets the terms and/or Code which states:
conditions set forth in said private instrument. Withal, based
on whatever relevant and admissible evidence may be Art. 1479. A promise to buy and sell a determinate thing for a
available on record, this Court, as were the courts below, is price certain is reciprocally demandable.
now called upon to adjudge what the real intent of the
parties was at the time the said document was executed. An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding upon the
The Civil Code defines a contract of sale, thus: promissor of the promise is supported by a consideration
distinct from the price.
Art. 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of and to A contract to sell may thus be defined as a bilateral contract
deliver a determinate thing, and the other to pay therefor a whereby the prospective seller, while expressly reserving the
price certain in money or its equivalent. ownership of the subject property despite delivery thereof to
the prospective buyer, binds himself to sell the said property
Sale, by its very nature, is a consensual contract because it is exclusively to the prospective buyer upon fulfillment of the
perfected by mere consent. The essential elements of a condition agreed upon, that is, full payment of the purchase
contract of sale are the following: price.
A contract to sell as defined hereinabove, may not even be With the above postulates as guidelines, we now proceed to
considered as a conditional contract of sale where the seller the task of deciphering the real nature of the contract
may likewise reserve title to the property subject of the sale entered into by petitioners and private respondents.
until the fulfillment of a suspensive condition, because in a
conditional contract of sale, the first element of consent is It is a canon in the interpretation of contracts that the words
present, although it is conditioned upon the happening of a used therein should be given their natural and ordinary
contingent event which may or may not occur. If the meaning unless a technical meaning was intended (Tan vs.
suspensive condition is not fulfilled, the perfection of the Court of Appeals, 212 SCRA 586 [1992]). Thus, when
contract of sale is completely abated (cf. Homesite and petitioners declared in the said Receipt of Down Payment
Housing Corp. vs. Court of Appeals, 133 SCRA 777 that they --
[1984]). However, if the suspensive condition is fulfilled, the
contract of sale is thereby perfected, such that if there had Received from Miss Ramona Patricia Alcaraz of 146 Timog,
already been previous delivery of the property subject of the Quezon City, the sum of Fifty Thousand Pesos purchase price
sale to the buyer, ownership thereto automatically transfers of our inherited house and lot, covered by TCT No. 1199627
to the buyer by operation of law without any further act of the Registry of Deeds of Quezon City, in the total amount
having to be performed by the seller. of P1,240,000.00.
In a contract to sell, upon the fulfillment of the suspensive without any reservation of title until full payment of the
condition which is the full payment of the purchase price, entire purchase price, the natural and ordinary idea conveyed
ownership will not automatically transfer to the buyer is that they sold their property.
although the property may have been previously delivered to
him. The prospective seller still has to convey title to the
When the Receipt of Down payment is considered in its
prospective buyer by entering into a contract of absolute
entirety, it becomes more manifest that there was a clear
sale.
intent on the part of petitioners to transfer title to the buyer,
but since the transfer certificate of title was still in the name
It is essential to distinguish between a contract to sell and a of petitioners father, they could not fully effect such transfer
conditional contract of sale specially in cases where the although the buyer was then willing and able to immediately
subject property is sold by the owner not to the party the pay the purchase price. Therefore, petitioners-sellers
seller contracted with, but to a third person, as in the case at undertook upon receipt of the down payment from private
bench. In a contract to sell, there being no previous sale of respondent Ramona P. Alcaraz, to cause the issuance of a
the property, a third person buying such property despite the new certificate of title in their names from that of their
fulfillment of the suspensive condition such as the full father, after which, they promised to present said title, now
payment of the purchase price, for instance, cannot be in their names, to the latter and to execute the deed of
deemed a buyer in bad faith and the prospective buyer absolute sale whereupon, the latter shall, in turn, pay the
cannot seek the relief of reconveyance of the property. There entire balance of the purchase price.
is no double sale in such case. Title to the property will
transfer to the buyer after registration because there is no
The agreement could not have been a contract to sell
defect in the owner-sellers title per se, but the latter, of
because the sellers herein made no express reservation of
course, may be sued for damages by the intending buyer.
ownership or title to the subject parcel of land. Furthermore,
the circumstance which prevented the parties from entering
In a conditional contract of sale, however, upon the into an absolute contract of sale pertained to the sellers
fulfillment of the suspensive condition, the sale becomes themselves (the certificate of title was not in their names)
absolute and this will definitely affect the sellers title and not the full payment of the purchase price. Under the
thereto. In fact, if there had been previous delivery of the established facts and circumstances of the case, the Court
subject property, the sellers ownership or title to the may safely presume that, had the certificate of title been in
property is automatically transferred to the buyer such that, the names of petitioners-sellers at that time, there would
the seller will no longer have any title to transfer to any third have been no reason why an absolute contract of sale could
person. Applying Article 1544 of the Civil Code, such second not have been executed and consummated right there and
buyer of the property who may have had actual or then.
constructive knowledge of such defect in the sellers title, or
at least was charged with the obligation to discover such
Moreover, unlike in a contract to sell, petitioners in the case
defect, cannot be a registrant in good faith. Such second
at bar did not merely promise to sell the property to private
buyer cannot defeat the first buyers title. In case a title is
respondent upon the fulfillment of the suspensive
issued to the second buyer, the first buyer may seek
condition. On the contrary, having already agreed to sell the
reconveyance of the property subject of the sale.
subject property, they undertook to have the certificate of
title change to their names and immediately thereafter, to
execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell From that moment, the parties may reciprocally demand
where the sellers, after compliance by the buyer with certain performance, subject to the provisions of the law governing
terms and conditions, promised to sell the property to the the form of contracts.
latter.What may be perceived from the respective
undertakings of the parties to the contract is that petitioners Art. 1181. In conditional obligations, the acquisition of rights,
had already agreed to sell the house and lot they inherited as well as the extinguishment or loss of those already
from their father, completely willing to transfer ownership of acquired, shall depend upon the happening of the event
the subject house and lot to the buyer if the documents were which constitutes the condition.
then in order. It just so happened, however, that the transfer
certificate of title was then still in the name of their father. It Since the condition contemplated by the parties which is the
was more expedient to first effect the change in the issuance of a certificate of title in petitioners names was
certificate of title so as to bear their names. That is why they fulfilled on February 6, 1985, the respective obligations of the
undertook to cause the issuance of a new transfer of the parties under the contract of sale became mutually
certificate of title in their names upon receipt of the down demandable, that is, petitioners, as sellers, were obliged to
payment in the amount of P50,000.00. As soon as the new present the transfer certificate of title already in their names
certificate of title is issued in their names, petitioners were to private respondent Ramona P. Alcaraz, the buyer, and to
committed to immediately execute the deed of absolute immediately execute the deed of absolute sale, while the
sale. Only then will the obligation of the buyer to pay the buyer on her part, was obliged to forthwith pay the balance
remainder of the purchase price arise. of the purchase price amounting to P1,190,000.00.
There is no doubt that unlike in a contract to sell which is It is also significant to note that in the first paragraph in page
most commonly entered into so as to protect the seller 9 of their petition, petitioners conclusively admitted that:
against a buyer who intends to buy the property in
installment by withholding ownership over the property until
3. The petitioners-sellers Coronel bound themselves to effect
the buyer effects full payment therefor, in the contract
the transfer in our names from our deceased father
entered into in the case at bar, the sellers were the ones who
Constancio P. Coronel, the transfer certificate of title
were unable to enter into a contract of absolute sale by
immediately upon receipt of the downpayment above-
reason of the fact that the certificate of title to the property
stated". The sale was still subject to this suspensive
was still in the name of their father. It was the sellers in this
condition. (Emphasis supplied.)
case who, as it were, had the impediment which prevented,
so to speak, the execution of an contract of absolute sale.
(Rollo, p. 16)
What is clearly established by the plain language of the
Petitioners themselves recognized that they entered into a
subject document is that when the said Receipt of Down
contract of sale subject to a suspensive condition. Only, they
Payment was prepared and signed by petitioners Romulo A.
contend, continuing in the same paragraph, that:
Coronel, et. al., the parties had agreed to a conditional
contract of sale, consummation of which is subject only to the
successful transfer of the certificate of title from the name of . . . Had petitioners-sellers not complied with this condition of
petitioners father, Constancio P. Coronel, to their names. first transferring the title to the property under their names,
there could be no perfected contract of sale. (Emphasis
supplied.)
The Court significantly notes that this suspensive condition
was, in fact, fulfilled on February 6, 1985 (Exh. D; Exh.
4). Thus, on said date, the conditional contract of sale (Ibid.)
between petitioners and private respondent Ramona P.
Alcaraz became obligatory, the only act required for the not aware that they have set their own trap for themselves,
consummation thereof being the delivery of the property by for Article 1186 of the Civil Code expressly provides that:
means of the execution of the deed of absolute sale in a
public instrument, which petitioners unequivocally Art. 1186. The condition shall be deemed fulfilled when the
committed themselves to do as evidenced by the Receipt of obligor voluntarily prevents its fulfillment.
Down Payment.
Besides, it should be stressed and emphasized that what is
Article 1475, in correlation with Article 1181, both of the Civil more controlling than these mere hypothetical arguments is
Code, plainly applies to the case at bench. Thus, the fact that the condition herein referred to was actually and
indisputably fulfilled on February 6, 1985, when a new title
Art. 1475. The contract of sale is perfected at the moment was issued in the names of petitioners as evidenced by TCT
there is a meeting of minds upon the thing which is the object No. 327403 (Exh. D; Exh. 4).
of the contract and upon the price.
The inevitable conclusion is that on January 19, 1985, as Aside from this, petitioners are precluded from raising their
evidenced by the document denominated as Receipt of Down supposed lack of capacity to enter into an agreement at that
Payment (Exh. A; Exh. 1), the parties entered into a contract time and they cannot be allowed to now take a posture
of sale subject to the suspensive condition that the sellers contrary to that which they took when they entered into the
shall effect the issuance of new certificate title from that of agreement with private respondent Ramona P. Alcaraz. The
their fathers name to their names and that, on February 6, Civil Code expressly states that:
1985, this condition was fulfilled (Exh. D; Exh. 4).
Art. 1431. Through estoppel an admission or representation
We, therefore, hold that, in accordance with Article 1187 is rendered conclusive upon the person making it, and cannot
which pertinently provides - be denied or disproved as against the person relying thereon.
Art. 1187. The effects of conditional obligation to give, once Having represented themselves as the true owners of the
the condition has been fulfilled, shall retroact to the day of subject property at the time of sale, petitioners cannot claim
the constitution of the obligation . . . now that they were not yet the absolute owners thereof at
that time.
In obligations to do or not to do, the courts shall determine,
in each case, the retroactive effect of the condition that has Petitioners also contend that although there was in fact a
been complied with. perfected contract of sale between them and Ramona P.
Alcaraz, the latter breach her reciprocal obligation when she
the rights and obligations of the parties with respect to the rendered impossible the consummation thereof by going to
perfected contract of sale became mutually due and the United States of America, without leaving her address,
demandable as of the time of fulfillment or occurrence of the telephone number, and Special Power of Attorney
suspensive condition on February 6, 1985. As of that point in (Paragraphs 14 and 15, Answer with Compulsory
time, reciprocal obligations of both seller and buyer arose. Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43),
for which reason, so petitioners conclude, they were correct
Petitioners also argue there could been no perfected contract in unilaterally rescinding the contract of sale.
on January 19, 1985 because they were then not yet the
absolute owners of the inherited property. We do not agree with petitioners that there was a valid
rescission of the contract of sale in the instant case. We note
We cannot sustain this argument. that these supposed grounds for petitioners rescission, are
mere allegations found only in their responsive pleadings,
which by express provision of the rules, are deemed
Article 774 of the Civil Code defines Succession as a mode of
controverted even if no reply is filed by the plaintiffs (Sec. 11,
transferring ownership as follows:
Rule 6, Revised Rules of Court). The records are absolutely
bereft of any supporting evidence to substantiate petitioners
Art. 774. Succession is a mode of acquisition by virtue of
allegations. We have stressed time and again that allegations
which the property, rights and obligations to the extent and
must be proven by sufficient evidence (Ng Cho Cio vs. Ng
value of the inheritance of a person are transmitted through
Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598
his death to another or others by his will or by operation of
[1961]). Mere allegation is not an evidence (Lagasca vs. De
law.
Vera, 79 Phil. 376 [1947]).
Whether the heirs may bring suit to recover property of the On February 5, 1996, petitioners filed their Answer to the
estate pending the appointment of an administrator is the aforesaid complaint interposing the defense that the
issue in this case. property subject of the contested deed of extra-judicial
settlement pertained to the properties originally belonging to
This Petition for Review on Certiorari, under Rule 45 of the the parents of Teodora Riofero[10] and that the titles thereof
Rules of Court, seeks to set aside the Decision[1] of the Court were delivered to her as an advance inheritance but the
of Appeals in CA-G.R. SP No. 42053 dated January 31, 1997, decedent had managed to register them in his
as well as its Resolution[2] dated March 26, 1997, denying name.[11] Petitioners also raised the affirmative defense that
petitioners motion for reconsideration. respondents are not the real parties-in-interest but rather the
Estate of Alfonso O. Orfinada, Jr. in view of the pendency of
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will the administration proceedings.[12] On April 29, 1996,
in Angeles City leaving several personal and real properties petitioners filed a Motion to Set Affirmative Defenses for
located in Angeles City, Dagupan City and Kalookan Hearing[13] on the aforesaid ground.
City.[3] He also left a widow, respondent Esperanza P.
Orfinada, whom he married on July 11, 1960 and with whom The lower court denied the motion in its Order[14] dated
he had seven children who are the herein respondents, June 27, 1996, on the ground that respondents, as heirs, are
namely: Lourdes P. Orfinada, Alfonso Clyde P. Orfinada, the real parties-in-interest especially in the absence of an
Nancy P. Orfinada-Happenden, Alfonso James P. Orfinada, administrator who is yet to be appointed in S.P. Case No.
Christopher P. Orfinada, Alfonso Mike P. Orfinada (deceased) 5118. Petitioners moved for its reconsideration[15] but the
and Angelo P. Orfinada.[4] motion was likewise denied.[16]
Apart from the respondents, the demise of the decedent left This prompted petitioners to file before the Court of Appeals
in mourning his paramour and their children. They are their Petition for Certiorari under Rule 65 of the Rules of
petitioner Teodora Riofero, who became a part of his life Court docketed as CA G.R. S.P. No. 42053.[17] Petitioners
when he entered into an extra-marital relationship with her averred that the RTC committed grave abuse of discretion in
during the subsistence of his marriage to Esperanza issuing the assailed order which denied the dismissal of the
sometime in 1965, and co-petitioners Veronica[5], Alberto case on the ground that the proper party to file the complaint
and Rowena.[6] for the annulment of the extrajudicial settlement of the
estate of the deceased is the estate of the decedent and not
On November 14, 1995, respondents Alfonso James and the respondents.[18]
Lourdes Orfinada discovered that on June 29, 1995,
petitioner Teodora Rioferio The Court of Appeals rendered the
and her children executed an Extrajudicial Settlement of assailed Decision[19] dated January 31, 1997, stating that it
Estate of a Deceased Person with Quitclaim involving the discerned no grave abuse of discretion amounting to lack or
properties of the estate of the decedent located in Dagupan excess of jurisdiction by the public respondent judge when he
City and that accordingly, the Registry of Deeds in Dagupan denied petitioners motion to set affirmative defenses for
issued Certificates of Titles Nos. 63983, 63984 and 63985 in hearing in view of its discretionary nature.
favor of petitioners Teodora Rioferio, Veronica Orfinada-
Evangelista, Alberto Orfinada and Rowena Orfinada-Ungos. A Motion for Reconsideration was filed by petitioners but it
Respondents also found out that petitioners were able to was denied.[20] Hence, the petition before this Court.
obtain a loan of P700,000.00 from the Rural Bank of
Mangaldan Inc. by executing a Real Estate Mortgage over the
properties subject of the extra-judicial settlement.[7]
The issue presented by the petitioners before this Court is The above-quoted rules,[29] while permitting an executor or
whether the heirs have legal standing to prosecute the rights administrator to represent or to bring suits on behalf of the
belonging to the deceased subsequent to the deceased, do not prohibit the heirs from representing the
commencement of the administration proceedings.[21] deceased. These rules are easily applicable to cases in which
an administrator has already been appointed. But no rule
Petitioners vehemently fault the lower court for denying their categorically addresses the situation in which special
motion to set the case for preliminary hearing on their proceedings for the settlement of an estate have already
affirmative defense that the proper party to bring the action been instituted, yet no administrator has been appointed. In
is the estate of the decedent and not the respondents. It such instances, the heirs cannot be expected to wait for the
must be stressed that the holding of a preliminary hearing on appointment of an administrator; then wait further to see if
an affirmative defense lies in the discretion of the court. This the administrator appointed would care enough to file a suit
is clear from the Rules of Court, thus: to protect the rights and the interests of the deceased; and in
the meantime do nothing while the rights and the properties
SEC. 5. Pleadings grounds as affirmative defenses.- Any of the of the decedent are violated or dissipated.
grounds for dismissal provided for in this rule, except
improper venue, may be pleaded as an affirmative defense, Even if there is an appointed administrator, jurisprudence
and a preliminary hearing may be had thereon as if a motion recognizes two exceptions, viz: (1) if the executor or
to dismiss had been filed.[22] (Emphasis supplied.) administrator is unwilling or refuses to bring suit;[30] and (2)
when the administrator is alleged to have participated in the
Certainly, the incorporation of the word may in the provision act complained of[31] and he is made a party
is clearly indicative of the optional character of the defendant.[32] Evidently, the necessity for the heirs to seek
preliminary hearing. The word denotes discretion and cannot judicial relief to recover property of the estate is as
be construed as having a mandatory effect.[23] Subsequently, compelling when there is no appointed administrator, if not
the electivity of the proceeding was firmed up beyond cavil more, as where there is an appointed administrator but he is
by the 1997 Rules of Civil Procedure with the inclusion of the either disinclined to bring suit or is one of the guilty parties
phrase in the discretion of the Court, apart from the himself.
retention of the word may in Section 6,[24] in Rule 16
thereof. All told, therefore, the rule that the heirs have no legal
standing to sue for the recovery of property of the estate
Just as no blame of abuse of discretion can be laid on the during the pendency of administration proceedings has three
lower courts doorstep for not hearing petitioners affirmative exceptions, the third being when there is no appointed
defense, it cannot likewise be faulted for recognizing the legal administrator such as in this case.
standing of the respondents as heirs to bring the suit.
As the appellate court did not commit an error of law in
Pending the filing of administration proceedings, the heirs upholding the order of the lower court, recourse to this Court
without doubt have legal personality to bring suit in behalf of is not warranted.
the estate of the decedent in accordance with the provision
of Article 777 of the New Civil Code that (t)he rights to WHEREFORE, the petition for review is DENIED. The assailed
succession are transmitted from the moment of the death of decision and resolution of the Court of Appeals are hereby
the decedent. The provision in turn is the foundation of the AFFIRMED. No costs.
principle that the property, rights and obligations to the
extent and value of the inheritance of a person are SO ORDERED.
transmitted through his death to another or others by his will
or by operation of law.[25]
B. No less than Two Hundred Thousand Pesos (P200,000.00) I. Whether or not respondent Judge acted without
as moral damages; jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the required
C. Attorneys fees equivalent to Thirty Percent (30%) of the docket fee;
entire share/amount/award which the Honorable Court may
II. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in insisting to try
the case which involve (sic) a parcel of land situated outside partnerships total assets cannot be shown with certainty at
of its territorial jurisdiction; the time of filing, respondents can and must ascertain,
through informed and practical estimation, the amount they
III. Whether or not respondent Judge acted without expect to collect from the partnership, particularly from
jurisdiction or with grave abuse of discretion in allowing the petitioner, in order to determine the proper amount of
estate of the deceased to appear as party plaintiff, when docket and other fees.[14] It is thus imperative for
there is no intestate case and filed by one who was never respondents to pay the corresponding docket fees in order
appointed by the court as administratrix of the estates; and that the trial court may acquire jurisdiction over the
action.[15]
IV. Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in not dismissing Nevertheless, unlike in the case of Manchester Development
the case on the ground of prescription. Corp. v. Court of Appeals,[16] where there was clearly an
effort to defraud the government in avoiding to pay the
On August 8, 1996, the Court of Appeals rendered the correct docket fees, we see no attempt to cheat the courts on
assailed decision,[12] dismissing the petition for certiorari, the part of respondents. In fact, the lower courts have noted
upon a finding that no grave abuse of discretion amounting to their expressed desire to remit to the court any payable
lack or excess of jurisdiction was committed by the trial court balance or lien on whatever award which the Honorable
in issuing the questioned orders denying petitioners motions Court may grant them in this case should there be any
to dismiss. deficiency in the payment of the docket fees to be computed
by the Clerk of Court.[17] There is evident willingness to pay,
and the fact that the docket fee paid so far is inadequate is
Not satisfied, petitioner filed the instant petition for review,
not an indication that they are trying to avoid paying the
raising the same issues resolved by the Court of Appeals,
required amount, but may simply be due to an inability to pay
namely:
at the time of filing. This consideration may have moved the
trial court and the Court of Appeals to declare that the unpaid
I. Failure to pay the proper docket fee;
docket fees shall be considered a lien on the judgment award.
II. Parcel of land subject of the case pending before the trial Petitioner, however, argues that the trial court and the Court
court is outside the said courts territorial jurisdiction;
of Appeals erred in condoning the non-payment of the proper
legal fees and in allowing the same to become a lien on the
III. Lack of capacity to sue on the part of plaintiff heirs of monetary or property judgment that may be rendered in
Vicente Tabanao; and favor of respondents. There is merit in petitioners
assertion. The third paragraph of Section 16, Rule 141 of the
IV. Prescription of the plaintiff heirs cause of action. Rules of Court states that:
It can be readily seen that respondents primary and ultimate The legal fees shall be a lien on the monetary or property
objective in instituting the action below was to recover the judgment in favor of the pauper-litigant.
decedents 1/3 share in the partnerships assets. While they
ask for an accounting of the partnerships assets and finances, Respondents cannot invoke the above provision in their favor
what they are actually asking is for the trial court to compel because it specifically applies to pauper-litigants. Nowhere in
petitioner to pay and turn over their share, or the equivalent the records does it appear that respondents are litigating as
value thereof, from the proceeds of the sale of the paupers, and as such are exempted from the payment of
partnership assets. They also assert that until and unless a court fees.[18]
proper accounting is done, the exact value of the
partnerships assets, as well as their corresponding share
The rule applicable to the case at bar is Section 5(a) of Rule
therein, cannot be ascertained.Consequently, they feel
141 of the Rules of Court, which defines the two kinds of
justified in not having paid the commensurate docket fee as
claims as: (1) those which are immediately ascertainable; and
required by the Rules of Court.
(2) those which cannot be immediately ascertained as to the
exact amount. This second class of claims, where the exact
We do not agree. The trial court does not have to employ amount still has to be finally determined by the courts based
guesswork in ascertaining the estimated value of the on evidence presented, falls squarely under the third
partnerships assets, for respondents themselves voluntarily paragraph of said Section 5(a), which provides:
pegged the worth thereof at Thirty Million Pesos
(P30,000,000.00). Hence, this case is one which is really not
In case the value of the property or estate or the sum claimed
beyond pecuniary estimation, but rather partakes of the
is less or more in accordance with the appraisal of the court,
nature of a simple collection case where the value of the
the difference of fee shall be refunded or paid as the case
subject assets or amount demanded is pecuniarily
may be. (Underscoring ours)
determinable.[13] While it is true that the exact value of the
In Pilipinas Shell Petroleum Corporation v. Court of docket fees. Nevertheless, as in other procedural rules, it may
Appeals,[19] this Court pronounced that the above-quoted be liberally construed in certain cases if only to secure a just
provision clearly contemplates an initial payment of the filing and speedy disposition of an action. While the rule is that the
fees corresponding to the estimated amount of the claim payment of the docket fee in the proper amount should be
subject to adjustment as to what later may be adhered to, there are certain exceptions which must be
proved.[20] Moreover, we reiterated therein the principle strictly construed.[23]
that the payment of filing fees cannot be made contingent or
dependent on the result of the case. Thus, an initial payment In recent rulings, this Court has relaxed the strict adherence
of the docket fees based on an estimated amount must be to the Manchester doctrine, allowing the plaintiff to pay the
paid simultaneous with the filing of the complaint. Otherwise, proper docket fees within a reasonable time before the
the court would stand to lose the filing fees should the expiration of the applicable prescriptive or reglementary
judgment later turn out to be adverse to any claim of the period.[24]
respondent heirs.
In the recent case of National Steel Corp. v. Court of
The matter of payment of docket fees is not a mere Appeals,[25] this Court held that:
triviality. These fees are necessary to defray court expenses in
the handling of cases. Consequently, in order to avoid The court acquires jurisdiction over the action if the filing of
tremendous losses to the judiciary, and to the government as the initiatory pleading is accompanied by the payment of the
well, the payment of docket fees cannot be made dependent requisite fees, or, if the fees are not paid at the time of the
on the outcome of the case, except when the claimant is a filing of the pleading, as of the time of full payment of the
pauper-litigant. fees within such reasonable time as the court may grant,
unless, of course, prescription has set in the meantime.
Applied to the instant case, respondents have a specific claim
1/3 of the value of all the partnership assets but they did not It does not follow, however, that the trial court should have
allege a specific amount. They did, however, estimate the dismissed the complaint for failure of private respondent to
partnerships total assets to be worth Thirty Million Pesos pay the correct amount of docket fees. Although the payment
(P30,000,000.00), in a letter[21] addressed to of the proper docket fees is a jurisdictional requirement, the
petitioner. Respondents cannot now say that they are unable trial court may allow the plaintiff in an action to pay the same
to make an estimate, for the said letter and the admissions within a reasonable time before the expiration of the
therein form part of the records of this case. They cannot applicable prescriptive or reglementary period. If the plaintiff
avoid paying the initial docket fees by conveniently omitting fails to comply within this requirement, the defendant should
the said amount in their amended complaint. This estimate timely raise the issue of jurisdiction or else he would be
can be made the basis for the initial docket fees that considered in estoppel. In the latter case, the balance
respondents should pay. Even if it were later established that between the appropriate docket fees and the amount
the amount proved was less or more than the amount alleged actually paid by the plaintiff will be considered a lien or any
or estimated, Rule 141, Section 5(a) of the Rules of Court award he may obtain in his favor. (Underscoring ours)
specifically provides that the court may refund the excess or
exact additional fees should the initial payment be
Accordingly, the trial court in the case at bar should
insufficient. It is clear that it is only the difference between
determine the proper docket fee based on the estimated
the amount finally awarded and the fees paid upon filing of
amount that respondents seek to collect from petitioner, and
this complaint that is subject to adjustment and which may
direct them to pay the same within a reasonable time,
be subjected to a lien.
provided the applicable prescriptive or reglementary period
has not yet expired. Failure to comply therewith, and upon
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. motion by petitioner, the immediate dismissal of the
Maximiano Asuncion,[22] this Court held that when the complaint shall issue on jurisdictional grounds.
specific claim has been left for the determination by the
court, the additional filing fee therefor shall constitute a lien
On the matter of improper venue, we find no error on the
on the judgment and it shall be the responsibility of the Clerk
part of the trial court and the Court of Appeals in holding that
of Court or his duly authorized deputy to enforce said lien
the case below is a personal action which, under the Rules,
and assess and collect the additional fee. Clearly, the rules
may be commenced and tried where the defendant resides or
and jurisprudence contemplate the initial payment of filing
may be found, or where the plaintiffs reside, at the election
and docket fees based on the estimated claims of the
of the latter.[26]
plaintiff, and it is only when there is a deficiency that a lien
may be constituted on the judgment award until such
Petitioner, however, insists that venue was improperly laid
additional fee is collected.
since the action is a real action involving a parcel of land that
is located outside the territorial jurisdiction of the court a
Based on the foregoing, the trial court erred in not dismissing
quo. This contention is not well-taken. The records
the complaint outright despite their failure to pay the proper
indubitably show that respondents are asking that the assets of a person are transmitted.[33] Moreover, respondents
of the partnership be accounted for, sold and distributed became owners of their respective hereditary shares from
according to the agreement of the partners. The fact that two the moment Vicente Tabanao died.[34]
of the assets of the partnership are parcels of land does not
materially change the nature of the action. It is an action in A prior settlement of the estate, or even the appointment of
personam because it is an action against a person, namely, Salvacion Tabanao as executrix or administratrix, is not
petitioner, on the basis of his personal liability. It is not an necessary for any of the heirs to acquire legal capacity to
action in rem where the action is against the thing itself sue. As successors who stepped into the shoes of their
instead of against the person.[27] Furthermore, there is no decedent upon his death, they can commence any action
showing that the parcels of land involved in this case are originally pertaining to the decedent.[35] From the moment
being disputed. In fact, it is only incidental that part of the of his death, his rights as a partner and to demand fulfillment
assets of the partnership under liquidation happen to be of petitioners obligations as outlined in their dissolution
parcels of land. agreement were transmitted to respondents. They,
therefore, had the capacity to sue and seek the courts
The time-tested case of Claridades v. Mercader, et intervention to compel petitioner to fulfill his obligations.
al.,[28] settled this issue thus:
Finally, petitioner contends that the trial court should have
The fact that plaintiff prays for the sale of the assets of the dismissed the complaint on the ground of prescription,
partnership, including the fishpond in question, did not arguing that respondents action prescribed four (4) years
change the nature or character of the action, such sale being after it accrued in 1986. The trial court and the Court of
merely a necessary incident of the liquidation of the Appeals gave scant consideration to petitioners hollow
partnership, which should precede and/or is part of its arguments, and rightly so.
process of dissolution.
The three (3) final stages of a partnership are: (1) dissolution;
The action filed by respondents not only seeks redress against (2) winding-up; and (3) termination.[36] The partnership,
petitioner. It also seeks the enforcement of, and petitioners although dissolved, continues to exist and its legal personality
compliance with, the contract that the partners executed to is retained, at which time it completes the winding up of its
formalize the partnerships dissolution, as well as to affairs, including the partitioning and distribution of the net
implement the liquidation and partition of the partnerships partnership assets to the partners.[37] For as long as the
assets. Clearly, it is a personal action that, in effect, claims a partnership exists, any of the partners may demand an
debt from petitioner and seeks the performance of a personal accounting of the partnerships business. Prescription of the
duty on his part.[29] In fine, respondents complaint seeking said right starts to run only upon the dissolution of the
the liquidation and partition of the assets of the partnership partnership when the final accounting is done.[38]
with damages is a personal action which may be filed in the
proper court where any of the parties reside.[30] Besides, Contrary to petitioners protestations that respondents right
venue has nothing to do with jurisdiction for venue touches to inquire into the business affairs of the partnership accrued
more upon the substance or merits of the case.[31] As it is, in 1986, prescribing four (4) years thereafter, prescription had
venue in this case was properly laid and the trial court not even begun to run in the absence of a final
correctly ruled so. accounting. Article 1842 of the Civil Code provides:
On the third issue, petitioner asserts that the surviving The right to an account of his interest shall accrue to any
spouse of Vicente Tabanao has no legal capacity to sue since partner, or his legal representative as against the winding up
she was never appointed as administratrix or executrix of his partners or the surviving partners or the person or
estate. Petitioners objection in this regard is misplaced. The partnership continuing the business, at the date of
surviving spouse does not need to be appointed as executrix dissolution, in the absence of any agreement to the contrary.
or administratrix of the estate before she can file the
action. She and her children are complainants in their own Applied in relation to Articles 1807 and 1809, which also deal
right as successors of Vicente Tabanao. From the very with the duty to account, the above-cited provision states
moment of Vicente Tabanaos death, his rights insofar as the that the right to demand an accounting accrues at the date of
partnership was concerned were transmitted to his heirs, for dissolution in the absence of any agreement to the
rights to the succession are transmitted from the moment of contrary. When a final accounting is made, it is only then that
death of the decedent.[32] prescription begins to run. In the case at bar, no final
accounting has been made, and that is precisely what
Whatever claims and rights Vicente Tabanao had against the respondents are seeking in their action before the trial court,
partnership and petitioner were transmitted to respondents since petitioner has failed or refused to render an accounting
by operation of law, more particularly by succession, which is of the partnerships business and assets. Hence, the said
a mode of acquisition by virtue of which the property, rights action is not barred by prescription.
and obligations to the extent of the value of the inheritance
In fine, the trial court neither erred nor abused its discretion
when it denied petitioners motions to dismiss. Likewise, the
Court of Appeals did not commit reversible error in upholding
the trial courts orders. Precious time has been lost just to
settle this preliminary issue, with petitioner resurrecting the
very same arguments from the trial court all the way up to
the Supreme Court. The litigation of the merits and
substantial issues of this controversy is now long overdue and
must proceed without further delay.
SO ORDERED.