Aranas V Mercado

ARANAS V MERCADO With the parties agreeing to submit themselves to the jurisdiction of the court on
G.R. No. 156407 the issue of what properties should be included in or excluded from the inventory,
January 15, 2014; BERSAMIN, J. the RTC set dates for the hearing on that issue. After a series of hearings that ran for
almost eight years, the RTC issued on March 14, 2001 an order finding and holding
Topic: Executors and Administrators; Collation that the inventory submitted by Teresita had excluded properties that should be
included
Doctrine: The probate court is authorized to determine the issue of ownership Alleging that the RTC thereby acted with grave abuse of discretion in refusing to
of properties for purposes of their inclusion or exclusion from the inventory to approve the inventory, and in ordering her as administrator to include real
be submitted by the administrator, but its determination shall only be properties that had been transferred to Mervir Realty, Teresita, joined by her four
provisional unless the interested parties are all heirs of the decedent, or the children and her stepson Franklin assailed the adverse orders of the RTC by petition
question is one of collation or advancement, or the parties’ consent to the for certiorari. On May 15, 2002, the CA partly granted the petition for certiorari
assumption of jurisdiction by the probate court and the rights of third parties disposing that Teresita et al. had properly filed the petition for certiorari because the
are not impaired. Its jurisdiction extends to matters incidental or collateral to order of the RTC directing a new inventory of properties was interlocutory
the settlement and distribution of the estate, such as the determination of the
status of each heir and whether property included in the inventory is the Issue: WON the CA properly determined that the RTC committed grave abuse of
conjugal or exclusive property of the deceased spouse. discretion amounting to lack or excess of jurisdiction in directing the inclusion of
certain properties in the inventory notwithstanding that such properties had been
Facts: Emigdio S. Mercado died intestate on January 12, 1991, survived by his second either transferred by sale or exchanged for corporate shares in Mervir Realty by the
wife, Teresita V. Mercado (Teresita), and their five children, and his two children by decedent during his lifetime
his first marriage, namely: respondent Franklin L. Mercado and petitioner Thelma M.
Aranas (Thelma). Emigdio owned corporate shares in Mervir Realty Corporation Held: NO. The SC clarified that the assailed order of March 14, 2001 debying
(Mervir Realty) and Cebu Emerson Transportation Corporation (Cebu Emerson). He Teresita’s motion for the approval of the inventory and the order denying her motion
assigned his real properties in exchange for corporate stocks of Mervir Realty, and for reconsideration were interlocutory, this is because the inclusion of the properties
sold his real property in Cebu to Mervir Realty. in the inventory was not yet a final determination of their ownership. Hence, the
approval of the inventory and the concomitant determination of the ownership as
On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition basis for inclusion or exclusion from the inventory were provisional or subject to
for the appointment of Teresita as the administrator of Emigdio's estate. This was revision at any time during the course of the administration proceedings. The
granted by the RTC. As the administrator, Teresita submitted an inventory of the prevailing rule is that for the purpose of determining whether a certain property
estate of Emigdio on December 14, 1992 for the consideration and approval by the should or should not be included in the inventory, the probate court may pass upon
RTC. She indicated in the inventory that at the time of his death, Emigdio had "left no the title thereto but such determination is not conclusive and is subject to the final
real properties but only personal properties"Claiming that Emigdio had owned other decision in a separate action regarding ownership which may be instituted by the
properties that were excluded from the inventory, Thelma moved that the RTC direct parties. The probate court is authorized to determine the issue of ownership of
Teresita to amend the inventory, and to be examined regarding it. The RTC granted properties for purposes of their inclusion or exclusion from the inventory to be
Thelma's motion through the order of January 8, 1993. submitted by the administrator, but its determination shall only be provisional unless
the interested parties are all heirs of the decedent, or the question is one of collation
On January 21, 1993, Teresita filed a compliance with the order of the court or advancement, or the parties consent to the assumption of jurisdiction by the
supporting her inventory with copies of three certificates of stocks covering the probate court and the rights of third parties are not impaired. Its jurisdiction extends
44,806 Mervir Realty shares of stock; the deed of assignment executed by Emigdio to matters incidental or collateral to the settlement and distribution of the estate,
involving real properties in exchange for Mervir Realty shares of stock and the such as the determination of the status of each heir and whether property included
certificate of stock issued on January 30, 1979 for 300 shares of stock of Cebu in the inventory is the conjugal or exclusive property of the deceased spouse.
Emerson worth P30,000.00. The RTC did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in directing the inclusion of certain properties in the inventory
notwithstanding that such properties had been either transferred by sale or
exchanged for corporate shares in Mervir Realty by the decedent during his lifetime.
The usage of the word all in Section 1, Rule 78, demands the inclusion of all the real
and personal properties of the decedent in the inventory. However, the word all is
qualified by the phrase which has come into his possession or knowledge, which
signifies that the properties must be known to the administrator to belong to the
decedent or are in her possession as the administrator. Section 1 allows no
exception, for the phrase true inventory implies that no properties appearing to
belong to the decedent can be excluded from the inventory, regardless of their being
in the possession of another person or entity.
There is no dispute that the jurisdiction of the trial court as an intestate court is
special and limited. The trial court cannot adjudicate title to properties claimed to
be a part of the estate but are claimed to belong to third parties by title adverse to
that of the decedent and the estate, not by virtue of any right of inheritance from
the decedent. All that the trial court can do regarding said properties is to determine
whether or not they should be included in the inventory of properties to be
administered by the administrator. Such determination is provisional and may be still
revised.
The general rule is that the jurisdiction of the trial court, either as a probate court or
an intestate court, relates only to matters having to do with the probate of the will
and/or settlement of the estate of deceased persons, but does not extend to the
determination of questions of ownership that arise during the proceedings.
However, this general rule is subject to exceptions as justified by expediency and

convenience. First, the probate court may provisionally pass upon in an intestate or
a testate proceeding the question of inclusion in, or exclusion from, the inventory of
a piece of property without prejudice to final determination of ownership in a
separate action. Second, if the interested parties are all heirs to the estate, or the
question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are not
impaired, then the probate court is competent to resolve issues on ownership.
Verily, its jurisdiction extends to matters incidental or collateral to the settlement
and distribution of the estate, such as the determination of the status of each heir
and whether the property in the inventory is conjugal or exclusive property of the
deceased spouse

Aranas V Mercado

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ARANAS V MERCADO With the parties agreeing to submit themselves to the jurisdiction of the court on

However, this general rule is subject to exceptions as justified by expediency and

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