SALIGUMBA VS. PALANOG

GR. 143365, DECEMBER 4, 2008

Facts:

Spouses Palanog filed a complaint for Quieting of Title with Damages against

defendants, spouses Valeria Saligumba and Eliseo Saligumba, Sr. (spouses Saligumbas),

before the Regional Trial Court. In the complaint, spouses Palanog alleged that they have

been in actual, open, adverse and continuous possession as owners for more than 50 years of

a parcel of land. The spouses Saligumbas allegedly prevented them from entering and

residing on the subject premises and had destroyed the barbed wires enclosing the land.

At the trial, only the counsel for spouses Palanogs appeared. It appeared that Eliseo

Saligumba, Sr. and Valeria Saligumba died. No motion for the substitution of the spouses

was filed nor an order issued for the substitution of the deceased spouses Saligumbas despite

notices sent to them to appear, never confirmed the death of Eliseo Saligumba, Sr. and

Valeria Saligumba.

After a lapse of more than two years, the trial court rendered a judgment declaring

spouses Palanog the lawful owners of the subject land. No motion for reconsideration nor

appeal having been filed.

After 10 years, Palanog filed a Complaint seeking to revive and enforce the said

decision. She further requested that the heirs and children of spouses Saligumbas be

impleaded as defendants.

Petitioners thus question the decision as being void and of no legal effect because

their parents were not duly represented by counsel of record. Petitioners further argue that

they have never taken part in the proceedings nor did they voluntarily appear or participate in

the case. It is unfair to bind them in a decision rendered against their deceased parents.

Therefore, being a void judgment, it has no legal nor binding effect on petitioners. Hence,

this petition.

Issue:

WON an action for quieting of title, which is an action involving real property, is

extinguished upon death of the party?

Ruling:

No. The case is an action for quieting of title with damages which is an action

involving real property. It is an action that survives pursuant to Section 1, Rule 87 as the

claim is not extinguished by the death of a party. And when a party dies in an action that

survives, Section 17 of Rule 3 of the Revised Rules of Court provides that after a party dies

and the claim is not thereby extinguished, the court shall order, upon proper notice, the legal

representative of the deceased to appear and to be substituted for the deceased, within a

period of thirty (30) days, or within such time as may be granted. If the legal representative

fails to appear within said time, the court may order the opposing party to procure the

appointment of a legal representative of the deceased within a time to be specified by the

court, and the representative shall immediately appear for and on behalf of the interest of the

deceased. The court charges involved in procuring such appointment, if defrayed by the

opposing party, may be recovered as costs. The heirs of the deceased may be allowed to be

substituted for the deceased, without requiring the appointment of an executor or

administrator and the court may appoint guardian ad litem for the minor heirs.

EPIFANIO SAN JUAN, JR. vs. JUDGE RAMON A. CRUZ

G.R. No. 167321 July 31, 2006

Facts:

Loreto Samia San Juan executed a Last Will and Testament naming Oscar Casa as

one of the devisees therein. Upon Loreto‘s death a certain Atty. Teodorico A. Aquino filed a

petition for the probate of the will. While the petition for the probate of the will was pending,

the devisee Oscar Casa died, intestate. Aquino filed a pleading entitled ―Appointment of

Administrator‖ signed by Candelaria, Jesus, Arlyn, Nestor, Edna, Benhur, Federico, Rafael

and Ma. Eden, all surnamed Casa, praying that one of them, Federico Casa, Jr., be designated

as administrator of the estate of the deceased and that he be substituted for the deceased.

Petitioner contested the same.

Issue:

WON a person nominated as ―administrator‖ by purported heirs of a devisee or

legatee in a will under probate may validly substitute for that devisee or legatee in the probate

proceedings despite the fact that such administrator is not the court-appointed administrator

of the estate of the devisee or legatee?

Ruling:

The heirs of the estate of Oscar Casa do not need to first secure the appointment of an

administrator of his estate, because from the very moment of his death, they stepped into his

shoes and acquired his rights as devisee/legatee of the deceased Loreto San Juan. Thus, a

prior appointment of an administrator or executor of the estate of Oscar Casa is not necessary

for his heirs to acquire legal capacity to be substituted as representatives of the estate. Said

heirs may designate one or some of them as their representative before the trial court.

ATTY. ROGELIO E. SARSABA vs FE VDA. DE TE

G.R. No. 175910 July 30, 2009

Facts:

Respondent Fe Vda.deTe, represented by her attorney-in-fact, Faustino Castañeda,

filed with the RTC, a Complaint for recovery of motor vehicle, damages with prayer for the

delivery of the truck pendente lite against petitioner (Atty. Sarsaba), Sereno, Lavarez and the

NLRC of Davao City.

Respondent alleged, among others, that: (1) she is the wife of the late Pedro Te, the

registered owner of the truck, as evidenced by the Official Receipt and Certificate of

Registration.

Petitioner Sarsaba alleges that that there was no showing that the heirs have filed an

intestate estate proceedings of the estate of Pedro Te, or that respondent was duly authorized

by her co-heirs to file the case; and that the truck was already sold to Gasing on March 11,

1986 by one Jesus Matias, who bought the same from the Spouses Te. Corollarily, Gasing

was already the lawful owner of the truck when it was levied on execution and, later on, sold

at public auction.

On October 17, 2005, petitioner Sarsaba filed an Omnibus Motion to Dismiss the

Case on the following grounds: (1) lack of jurisdiction over one of the principal defendants;

and (2) to discharge respondent's attorney-in-fact for lack of legal personality to sue.

It appeared that the respondent, Fe Vda. deTe, died on April 12, 2005.

Respondent, through her lawyer, argues that respondent's death did not render functus

officio her right to sue since her attorney-in-fact, Faustino Castañeda, had long testified on the

complaint on March 13, 1998 for and on her behalf and, accordingly, submitted documentary

exhibits in support of the complaint.

Issue:

What is the legal effect of death of the plaintiff during the pendency of the case?

Held:

When a party to a pending action dies and the claim is not extinguished, the Rules of

Court require a substitution of the deceased.

Section 1, Rule 87 of the Rules of Court enumerates the actions that survived and may be

filed against the decedent's representatives as follows:

1. actions to recover real or personal property or an interest thereon;

2. actions to enforce liens thereon, and

3. actions to recover damages for an injury to a person or a property.

In such cases, a counsel is obliged to inform the court of the death of his client and give

the name and address of the latter's legal representative.

The rule on substitution of parties is governed by Section 16, 46 Rule 3 of the 1997 Rules

of Civil Procedure, as amended.

The rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due

process.

The rule on substitution was crafted to protect every party's right to due process.

It was designed to ensure that the deceased party would continue to be properly

represented in the suit through his heirs or the duly appointed legal representative of his

estate.

It is only when there is a denial of due process, as when the deceased is not

represented by any legal representative or heir, that the court nullifies the trial proceedings

and the resulting judgment therein.

In the case before Us, it appears that respondent's counsel did not make any

manifestation before the RTC as to her death. In fact, he had actively participated in the

proceedings. Neither had he shown any proof that he had been retained by respondent's legal

representative or any one who succeeded her.

However, such failure of counsel would not lead Us to invalidate the proceedings that

have long taken place before the RTC. The Court has repeatedly declared that failure of the

counsel to comply with his duty to inform the court of the death of his client, such that no

substitution is effected, will not invalidate the proceedings and the judgment rendered thereon

if the action survives the death of such party. The trial court's jurisdiction over the case

subsists despite the death of the party.

The purpose behind this rule is the protection of the right to due process of every

party to the litigation who may be affected by the intervening death. The deceased litigants

are themselves protected as they continue to be properly represented in the suit through the

duly appointed legal representative of their estate.

Despite the special power of attorney given to Castaneda by Fe Vda. De Te has been

extinguished due to the death of the principal, the case at hand is an action for the recovery of

a personal property, a motor vehicle, is an action that survives and is not extinguished by the

death of a party.

THE HEIRS OF MARCELINO DORONIO vs.HEIRS OF FORTUNATO

DORONIOG.R. No. 169454, December 27, 2007

Facts:

Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the registered

owners of a parcel of land located at Asingan, Pangasinan covered by Original Certificate of

Title (OCT) No. 352. MarcelinoDoronio and Fortunato Doronio, now both deceased, were

among their children and herein represented by their heirs, petitioners and respondents

respectively.

In 1919, a private deed of donation propter nuptiaswas executed by spouses Simeon Doronio

and Cornelia Gante in favor of MarcelinoDoronio and the latter‘s wife on the subject property

which was occupied by both parties for several decades. Petitioners now claim ownership of

the land in view of the private deed of donation propter nuptias in favor of their predecessors,

MarcelinoDoronio and wife.

Respondents, on the other hand, contends that they acquired one-half of the property covered

by OCT No. 352 by tradition and/or intestate succession; that the deed of donation was null

and void; that assuming that the deed of donation was valid, only one-half of the property

was actually donated to MarcelinoDoronio and Veronica Pico; and that respondents acquired

ownership of the other half portion of the property by acquisitive prescription and that the

subject land is different from what was donated as the descriptions of the property under

OCT No. 352 and under the private deed of donation were different..

Petitioners filed before RTC in Urdaneta, Pangasinan a petition "For the Registration of a

Private Deed of Donation". Petition was granted and TCT 4481 issued to petitioners.

Respondent‘s MR denied. Respondents, in turn, filed an action for reconveyance and

damages with prayer for preliminary injunctionagainst petitioner. RTC ruled in favor of

petitioner heirs of MarcelinoDoronio. CA reversed RTC. Hence, this petition with petitioners

contending that the RTC no jurisdiction to hear the case since issues on Impairment of

Legitime Should Be Threshed Out in a Special Proceeding, Not in Civil Action for

Reconveyance and Damages.

Issues:

1. Whether or not issue on Impairment of LegitimeShould properly be threshed out in

Civil Action for Reconveyance and Damages thus within the jurisdiction of RTC.

2. Whether or not the Donation Propter Nuptias is valid.

Held:

1. No. Issue regarding the impairment of legitime of Fortunato Doronio must be

resolved in an action for the settlement of estates of spouses Simeon Doronio and

Cornelia Gante. It may not be passed upon in an action for reconveyance and

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

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

matters involving the settlement of estate.40

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

settlement of the estate of a deceased person such as advancement of property made

by the decedent, partake of the nature of a special proceeding. Special proceedings

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

Under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or

alleged to have been made by the deceased to any heir may be heard and determined

by the court having jurisdiction of the estate proceedings, and the final order of the

court thereon shall be binding on the person raising the questions and on the heir.

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

the same provision contemplates a probate court when it speaks of the "court having

jurisdiction of the estate proceedings ."Corollarily, the Regional Trial Court in the

instant case, acting in its general jurisdiction, is devoid of authority to render an

adjudication and resolve the issue of advancement of the real property .

Before any conclusion about the legal share due to a compulsory heir may be reached,

it is necessary that certain steps be taken first.43

The net estate of the decedent must be

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

property owned by the deceased at the time of his death; then, all donations subject to

collation would be added to it. With the partible estate thus determined, the legitime

of the compulsory heir or heirs can be established; and only then can it be ascertained

whether or not a donation had prejudiced the legitimes.

2. No.1avvphi1 It is settled that only laws existing at the time of the execution of a

contract are applicable to it and not the later statutes, unless the latter are specifically

intended to have retroactive effect. Accordingly, the Old Civil Code applies in this

case as the donation propter nuptias was executed in 1919, while the New Civil Code

took effect only on August 30, 1950. Under the Old Civil Code, donations propter

nuptias must be made in a public instrument in which the property donated must be

specifically described.

In the instant case, the donation propter nuptias did not become valid since it is made

in a private instrument. Neither did it create any right because it was not made in a

public instrument.74

Hence, it conveyed no title to the land in question to petitioners‘

predecessors.

However, as of this time, direct reconveyance to any of the parties is not possible as it

has not yet been determined in a proper proceeding who among the heirs of spouses

Simeon Doronio and Cornelia Gante is entitled to it. It is still unproven whether or not

the parties are the only ones entitled to the properties of spouses Simeon Doronio and

Cornelia Gante. As earlier intimated, there are still things to be done before the legal

share of all the heirs can be properly adjudicated.

BERNARDO vs. CA

February 28, 1963

Facts:

EusebioCapili and Hermogena Reyes were husband and wife. Eusebio died and his

properties were disposed in his will to his wife Hermogena and his 6 cousins which included

Deogracias Bernardo, the executor. The wife died and she was substituted by her collateral

relatives, upon executor Bernardo's petition. Petitioner-executor filed his project of partition,

but was opposed by collateral relatives claiming that ½ of the properties disposed of in the

will are part of the spouses‘ conjugal partnership. Probate court heard evidence. Petitioner

contended that it was donated by the wife to the husband so it was not part of CPG and that

the oppositors cannot question the validity of the donation in the probate proceedings.

Oppositors rebutted that since it was donated during marriage, it was void; hence, the

husband did not own it and cannot dispose it by will. Probate court ordered the donation

voided and that executor submit another project of partition. Petitioner filed Motion for New

trial (MNT) on the ground that probate court had no jurisdiction, but was denied. Petitioner

filed for appeal to CA, but was also denied. Hence, this petition for review by certiorari

before the SC.

Issue:

Whether or not a probate court can determine a question of ownership over property during

distribution.

Held:

YES. Probate court has to liquidate the conjugal partnership to determine the testator's estate

to be distributed to the heirs who are parties to the proceedings.

As a general rule, question as to title to property cannot be passed upon on testate or intestate

proceedings," except:

a. where one of the parties prays merely for the inclusion or exclusion from the inventory of

the property, in which case the probate court may pass provisionally upon the question

without prejudice to its final determination in a separate action.

b. when the parties interested are all heirs of the deceased, it is optional to them to submit to

the probate court a question as to title to property, and when so submitted, said probate court

may definitely pass judgment thereon

c. all parties give consent so that matters affecting property under judicial administration may

be taken cognizance of by the court in the course of intestate proceeding, provided interests

of third persons are not prejudiced

ANCHETA VS. DALAYGON

G.R. 139868

Facts:

Spouses Audrey O‘Neill (Audrey) and W. Richard Guersey (Richard) were American

citizens who have resided in the Philippines for 30 years. They have an adopted daughter,

Kyle Guersey Hill (Kyle). Audrey died, leaving a will and she bequeathed her entire estate to

Richard (husband), who was also designated as executor. The will was admitted to probate

before the Orphan‘s Court of Baltimore, Maryland, U.S.A, which named James N. Phillips as

executor due to Richard‘s renunciation of his appointment. The court also named Atty.

Alonzo Q. Ancheta (petitioner) of the QuashaAsperilla Ancheta Pena &Nolasco Law Offices

as ancillary administrator.

Richard married CandelariaGuersey-Dalaygon (respondent) with whom he has two

children, namely, Kimberly and Kevin.

Audrey‘s will was also admitted reprobate by then to Court of First Instance of Rizal,

Branch 25, Seventh Judicial District, Pasig, in Special Proceeding. As administrator of

Audrey‘s estate in the Philippines, petitioner filed an inventory and appraisal of the following

properties: (1) Audrey‘s conjugal share in real estate with improvements located at Forbes

Park, Makati, Metro Manila, (Makati property); (2) a current bank account in Audrey‘s name;

and (3) shares of stock.

Richard died, leaving a will, wherein he bequeathed his entire estate to respondent,

save for his rights and interests over the A/G Interiors, Inc. shares, which he left to Kyle. The

will was also admitted to probate by the Orphan‘s Court of Ann Arundel, Maryland, U.S.A,

and James N. Phillips was likewise appointed as executor, who in turn, designated Atty.

William Quasha or any member of the QuashaAsperillaAncheta Pena &NolascoLaw

Offices, as ancillary administrator.

Richard‘s will was then submitted for probate before the Regional Trial Court of

Makati, Branch 138, Atty. Ancheta was appointed as ancillary administrator.

Petitioner filed in Special Proceeding, a motion to declare Richard and Kyle as heirs

of Audrey and project of partition of Audrey‘s estate, with Richard being apportioned the ¾

undivided interest in the Makati property, 48.333 shares in A/G Interiors, Inc., and P9,313.48

from the Citibank current account; and Kyle, the ¼ undivided interest in the Makati property,

16,111 shares in A/G Interiors, Inc., and P3,104.49 in cash.

The motion and project of partition was granted and approved by the trial court and

directing the Register of Deeds of Makati to cancel TCT No. 69792 in the name of Richard

and to issue a new title in the joint names of the Estate of W. Richard Guersey (¾ undivided

interest) and Kyle (¼ undivided interest); directing the Secretary of A/G Interiors, Inc. to

transfer 48.333 shares to the Estate of W. Richard Guersey and 16.111 shares to Kyle; and

directing the Citibank to release the amount of P12,417.97 to the ancillary administrator for

distribution to the heirs.12

Meanwhile, the ancillary administrator in Special Proceeding also filed a project of

partition wherein 2/5 of Richard‘s ¾ undivided interest in the Makati property was allocated

to respondent, while 3/5 thereof were allocated to Richard‘s three children. This was opposed

by respondent on the ground that under the law of the State of Maryland, "a legacy passes to

the legatee the entire interest of the testator in the property subject of the legacy. Since

Richard left his entire estate to respondent, except for his rights and interests over the A/G

Interiors, Inc, shares, then his entire ¾ undivided interest in the Makati property should be

given to respondent.

The trial court found merit in respondent‘s opposition, and in its Order disapproved

the project of partition insofar as it affects the Makati property. The trial court also

adjudicated Richard‘s entire ¾ undivided interest in the Makati property to respondent.

Respondent filed with the Court of Appeals (CA) an amended complaint for the

annulment of the trial court‘s Orders. Respondent contended that petitioner willfully breached

his fiduciary duty when he disregarded the laws of the State of Maryland on the distribution

of Audrey‘s estate in accordance with her will. Respondent argued that since Audrey devised

her entire estate to Richard, then the Makati property should be wholly adjudicated to him,

and not merely ¾ thereof, and since Richard left his entire estate, except for his rights and

interests over the A/G Interiors, Inc., to respondent, then the entire Makati property should

now pertain to respondent.

CA annulled the trial court‘s Order, petitioner filed motion for reconsideration, but

this was denied by the CA and they filed a petition for review.

Issue:

WON the Petitioner commits a fraud in the performance of duties as Ancillary

Administrator of Audrey‘s Estate?

Held:

Petitioner is the ancillary administrator of Audrey‘s estate. As such, he occupies a

position of the highest trust and confidence, and he is required to exercise reasonable

diligence and act in entire good faith in the performance of that trust. Although he is not a

guarantor or insurer of the safety of the estate nor is he expected to be infallible, yet the same

degree of prudence, care and judgment which a person of a fair average capacity and ability

exercises in similar transactions of his own, serves as the standard by which his conduct is to

be judged.

Petitioner‘s failure to proficiently manage the distribution of Audrey‘s estate according to the

terms of her will and as dictated by the applicable law amounted to extrinsic fraud.

Audrey‘ s was an American citizen domiciled in Maryland U.S.A and she was residing in the

Phil. The last Will and Testament probate before the MaryLand Court and reprobate in the

Phil. Court. Clear showing that petitioner knows the national law of the decedent.

Well-intentioned though it may be, defendant Alonzo H. Ancheta‘s action appears to have

breached his duties and responsibilities as ancillary administrator of the subject estate. While

such breach of duty admittedly cannot be considered extrinsic fraud under ordinary

circumstances, the fiduciary nature of the said defendant’s position, as well as the

resultant frustration of the decedent’s last will, combine to create a circumstance that is

tantamount to extrinsic fraud. Defendant Alonzo H. Ancheta‘s omission to prove the

national laws of the decedent and to follow the latter‘s last will, in sum, resulted in the

procurement of the subject orders without a fair submission of the real issues involved in the

case.

Being a foreign national, the intrinsic validity of Audrey‘s will, especially with regard as to

who are her heirs, is governed by her national law, i.e., the law of the State of Maryland, as

provided in Article 16 of the Civil Code, to wit:

Art. 16. Real property as well as personal property is subject to the law of the country where

it is situated.

However, intestate and testamentary succession, both with respect to the order of succession

and to the amount of successional rights and to the intrinsic validity of testamentary

provisions, shall be regulated by the national law of the person whose succession is

under consideration, whatever may be the nature of the property and regardless of the

country wherein said property may be found. (Emphasis supplied)

Article 1039 of the Civil Code further provides that "capacity to succeed is governed by the

law of the nation of the decedent."

As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of Will Proved

Outside the Philippines and Administration of Estate Thereunder, states:

SEC. 4. Estate, how administered.—Whena will is thus allowed, the court shall grant letters

testamentary, or letters of administration with the will annexed, and such letters testamentary

or of administration, shall extend to all the estate of the testator in the Philippines. Such

estate, after the payment of just debts and expenses of administration, shall be disposed

of according to such will, so far as such will may operate upon it; and the residue, if any,

shall be disposed of as is provided by law in cases of estates in the Philippines belonging to

persons who are inhabitants of another state or country.

Petitioner is ADMONISHED to be more circumspect in the performance of his duties as an

official of the court.

QUASHA ANCHETA PEÑA AND NOLASCO LAW OFFICE FOR ITS OWN

BEHALF, AND REPRESENTING THE HEIRS OF RAYMOND TRIVIERE vs. LCN

CONSTRUCTION CORP.

7. G.R. No. 174873, August 26, 2008

Facts:

Raymond Triviere passed away, a proceedings for the settlement of his intestate estate

were instituted by his widow, Amy Consuelo Triviere. Atty. Enrique P. Syquia (Syquia) and

Atty. William H. Quasha (Quasha) of the Quasha Law Office, representing the widow and

children of the late Raymond Triviere, respectively, were appointed administrators of the

estate of the deceased.As administrators, Atty. Syquia and Atty. Quasha incurred expenses

for the payment of real estate taxes, security services, and the preservation and administration

of theestate, as well as litigation expenses. Atty. Syquia and Atty. Quasha filed before the

RTC a Motion for Payment of their litigation expenses. Citing their failure to submit an

accounting of the assets and liabilities of the estate under administration, the RTC denied in

May 1995 the Motion for Payment of Atty. Syquia and Atty.Quasha.

In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the Quasha

Law Office, took over as the counsel of the Triviere children, and continued to help Atty.

Syquia in the settlement of the estate. On 6 September 2002, Atty. Syquia and Atty. Zapata

filed another Motion for Payment, for their own behalf and for their respective clients,

claiming for the payment of attorney‘s fees and litigation expenses.

LCN, as the only remaining claimant against the Intestate Estate of the Late Raymond

Triviere in Special Proceedings Case No. M-1678, filed its Comment on/Opposition to the

afore-quoted Motion on 2 October 2002.

LCN contends that RTC had already resolved the issue of payment of litigation expenses

when it denied the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for

failure of the administrators to submit an accounting of the assetsand expenses of the estate as

required by the court. LCN also averred that the administrators and the heirs of the late

RaymondTriviere had earlier agreed to fix the former's fees at only 5% of the gross estate,

based on which, per the computation of LCN, the administrators were even overpaid

P55,000.00 contrary to what was stated in the second Motion for Payment, Section 7, Rule85

of the Revised Rules of Court was inapplicable, since the administrators failed to establish

that the estate was large, or that its settlement was attended with great difficulty, or required a

high degree of capacity on the part of the administrators. Its claims are still outstanding and

chargeable against the estate of the late Raymond Triviere thus, no distribution should be

allowed until they have been paid

Issue:

WHETHER OR NOT THE AWARD OF ATTORNEY'S FEES IN FAVOR OF THE

CO-ADMINISTRATORS SHOULD HAVE BEEN NULLIFIED

Held:

Nothing in the records, however, reveals that any one of the lawyers of Quasha Law

Office was indeed a substitute administrator for Atty. Quasha upon his death.

The court has jurisdiction to appoint an administrator of an estate by granting letters of

administration to a person not otherwise disqualified or incompetent to serve as such,

following the procedure laid down in Section 6, Rule 78 of theRules of Court.

Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and unequivocal

terms the modes for replacing an administrator of an estate upon the death of an

administrator, to wit: Section 2. Court may remove or accept resignation of executor or

administrator. Proceedings upon death, resignation, or removal.

When an executor or administrator dies, resigns, or is removed the remaining executor or

administrator may administer the trust alone, unless the court grants letters to someone to act

with him. If there is no remaining executor or administrator, administration may be granted to

any suitable person.

The records of the case are wanting in evidence that Quasha Law Office or any of its lawyers

substituted Atty. Quasha as co-administrator of the estate. None of the documents attached

pertain to the issuance of lettersof administration to petitioner Quasha Law Office or any of

its lawyers at anytime after the demise of Atty. Quasha in 1996.

This Court is thus inclined to give credence to petitioner's contention that while it rendered

legal services for the settlement of the estate of Raymond Triviere since the time of Atty.

Quasha's death in 1996, it did not serve as co-administrator thereof, granting that it was never

even issued letters of administration.

The attorney's fees, therefore, cannot be covered by the prohibition in the third paragraph of

Section 7, Rule 85 of the Revised Rules of Court against anattorney, to charge against the

estate professional fees for legal services rendered by them. However, while petitioner

Quasha Law Office, serving as counsel of the Triviere children from the time of death of

Atty. Quasha in 1996, is entitled to attorney's fees and litigation expenses of P100,000.00 as

prayed for in the Motion for Payment dated 3 September 2002, and as awarded by the RTC in

its 12 June2003 Order, the same may be collected from the shares of the Triviere children,

upon final distribution of the estate, in consideration of the fact that the Quasha Law Office,

indeed, served as counsel (not anymore as co-administrator), representing and performing

legal services for the Triviere children in the settlement of the estate of their deceased father.

Ariagavda. De Guerrea, Et al. vs. Suplico

G.R. No 144320, April 26, 2006

Facts:

Ricardo Gurrea, represented by and through his counsel Atty. Enrique Suplico (the

defendant), filed an Opposition in Special Proc. No. 7185. Inconsideration of said

representation, Ricardo Gurrea agreed to pay Atty. Suplico "a contingent fee of twenty (20%)

of whatever is due me, either real or personal property" . During the pendency of the

proceedings and upon the oral instructions of Ricardo Gurrea, Atty. Supliconegotiated with

the other heirs of AdelinaGurrea regarding the transfer of the piso (apartment building) in

Spain to Ricardo Gurrea‘s daughter, Juliet Gurrea de Melendres. Ricardo Gurrea further

instructed Atty. Suplico not to enter into any settlement with the heirs unless the piso is

transferred to his daughter. Finally, the transfer of the piso worth P64,000.00 was executed

and the heirs arrived at an amicable settlement regarding the estate of AdelinaGurrea. Hence,

Ricardo Gurrea withdrew his Opposition and the heirs then drew up a project of partition

which was eventually approved by the probate court.

As payment of his attorney‘s fees, Ricardo Gurrea offered the San Juan lot to Atty. Suplico

who was initially hesitant to accept the same as the property is occupied by squatters.

However, in order not to antagonize his client, Atty. Suplico agreed to Ricardo Gurrea‘s

proposal with the further understanding that he will receive an additional commission of 5%

if he sells the Baguio property. Thereafter, the deed of Transfer of Rights and Interest was

drafted. The said deed was presented to Ricardo Gurrea for his signature.

On August 20, 1975, the deed was finally signed by Ricardo Gurrea at the office of Atty.

Pama, in the presence of the latter, Atty. Suplico, Victor Tupas and another person, the last

two acting as witnesses.Later, on October 7, 1980, Atty. Suplico registered the deed and

obtained a title/TCT to the San Juan property under his name. Ricardo Gurrea died on

October 22, 1980. After his death, his heirs instituted Special Pro. No. 2722 for the settlement

of Ricardo Gurrea‘s estate.

In the said proceedings, Atty. Suplico filed several claims for unpaid attorney‘s fees (no

claim was filed relative to Special Proc. No. 7185); however, all were dismissed withfinality .

Also in the same case, the estate‘s administrator, Carlos Gurrea, filed an Inventory of

Properties left by the decedent, which did not initially include the property subject of this

case. The said lot was included only subsequently in the Amended Inventory.

Issue:

WHETHER OR NOT, ASSUMING THE ‗TRANSFER OF RIGHTS AND

INTERESTS‘ DULY EXECUTED BY RICARDO GURREA VIOLATES ARTICLE 1491

OF THE NEW CIVIL CODE AND, THEREFORE, NULL AND VOID.

Held:

Article 1491(5) of the Civil Code provides:1491. The following persons cannot

acquire by purchase, even at a public or judicial auction, either in person or through the

mediation of another:(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with the administration of justice,

the property and rights in litigation or levied upon an execution before the court within whose

jurisdiction or territory they exercise their respective functions; this prohibition includes the

act of acquiring by assignment and shall apply to lawyers, with respect to the property and

rights which may be the object of any litigation in which they may take part by virtue of their

profession. According to the evidence for the defendant, a Motion for Termination of

Proceeding and Discharge of the Executor and Bond dated June 20, 1975was filed in the

case, alleging in paragraphs 3 and 5 thereof, that the executor Angel E. Ordoñez has already

turned over to the respective heirs and devisees all their respective shares in accordance with

the Project of Partition duly approved by the Court. Thereafter, more than one month from

the filing thereof, the Transfer of Rights and Interest was executed on August 20, 1975.

Hence, at the time of the execution of the questioned document, it may be concluded that

Special Proceedings No. 7185 had been terminated. The property in San Juan is no longer the

subject of a litigation and may be alienated by the client to his lawyer as payment of

attorney‘s fees rendered. It is clear from the above-quoted ruling of the trial court that its sole

basis in concluding that Special Proceedings No. 7185 had been terminated and that the

subject property is no longer the object of litigation at the time the deed of Transfer of Rights

and Interest was executed on August 20, 1975 is the allegation of the executor, Angel E.

Ordoñez, in his Motion for Termination of Proceeding and Discharge of the Executor and

Bond dated June 20, 1975, that he had already turned over to the respective heirs and

devisees all their respective shares in accordance with the project of partition duly approved

by the probate court.

In the present case, there is no proof to show that at the time the deed of Transfer of Rights

and Interest was executed, the probate court had issued an order granting the Motion for

Termination of Proceeding and Discharge of the Executor and Bond. Since the judge has yet

to act on the above-mentioned motion, it follows that the subject property which is the subject

matter of the deed of Transfer of Rights and Interest, is still the object of litigation, that is

Special Proceedings No. 7185. Furthermore, we agree with the petitioners‘ undisputed

contention that when the deed of Transfer of Rights and Interest was executed, the title over

the subject lot was still in the name of AdelinaGurrea and that it was only on October 7, 1980

that the title was transferred in the name of Ricardo. The probate court loses jurisdiction of an

estate under administration only after the payment of all the debts and the remaining estate

delivered to the heirs entitled to receive the same. In the present case, while the subject lot

was assigned as Ricardo‘s share in the project of partition executed by the heirs of

AdelinaGurrea, the title over the subject lot was still in the name of the latter and was not yet

conveyed to Ricardo when the Transfer of Rights and Interest was executed. It having been

established that the subject property was still the object of litigation at the time the subject

deed of Transfer of Rights and Interest was executed, the assignment of rights and interest

over the subject property in favor of respondent is null and void for being violative of the

provisions of Article 1491 of the Civil Code which expressly prohibits lawyers from

acquiring property or rights which may be the object of any litigation in which they may take

part by virtue of their profession.

TIMBOL V. CANO

Facts:

Mercedes Cano died leaving her only son FlorantoTimbol as sole heir. Her brother,

Jose Cano, was appointed judicial administrator. Jose proposed that the agricultural lands of

the estate be leased to him at P4,000 which was approved by the court. The court later on

approved the reduction of rent to P2,400 and the conversion of some of the agricultural lands

to a subdivision. A year later, a project of partition was approved by court designating

Florante as the sole heir and he was appointed judicial administrator. He then proposed

moved that the area designated for the subdivision be increased but was opposed by Jose

because the enlargement of the subdivision would reduce the land leased to him and his

tenants will lose their landholdings. Nevertheless, the court approved Florante‘s petition

hence the case at bar.

Issue:

WON the probate court has jurisdiction to annul rights under the contract of lease

though it would prejudice the lessee

Held:

Yes. In probate proceedings, the court orders the probate of the will of the decedent,

grants letters of administration of the party best entitled thereto, supervises and controls all

acts of administration, hears and approves claims against the estate of the deceased, orders

payment of lawful debts, authorizes sale, mortgage, or any encumbrance or real estate, directs

the delivery of the estate to those entitled. The lease was obtained with the court‘s approval

hence if the probate court has the right to approve the lease, so may it order its revocation or

reduction of the subject of the lease.

And though lessee may be prejudiced by the reduction, reduction alone cannot bar the

reduction of the land leased because such reduction is necessary to raise funds to pay and

liquidate the debts of the estate under administration.

JUANITA LOPEZ GUILAS vs JUDGE OF THE COURT OF FIRST

INSTANCE OF PAMPANGA AND ALEJANDRO LOPEZ

G.R. No. L-26695 January 31, 1972

Facts:

Jacinta Limson de Lopez was married to Alejandro Lopez y Siongco. They had no

children but they have legally adopted Juanita Lopez then single but now married to Federico

Guilas. Before the adoption of Juanita, Jacinta executed a will instituting her husband

Alejandro as her sole heir and executor. Doña Jacinta did not execute another will or codicil

so as to include Juanita Lopez as one of her heirs.

Nevertheless, in a project of partition executed by both Alejandro Lopez and Juanita

Lopez Guilas, the right of Juanita Lopez to inherit from Jacinta was recognized and Lots Nos.

3368 and 3441, both situated in Bacolor Pampanga — were adjudicated to Juanita Lopez-

Guilas as her share in the estate of Dona Jacinta. The rest of the estate of the deceased was

allotted to Don Alejandro.

On April 23, 1960, the trial court approved the said project of partition and on August

28, 1961, the same court approved the correction of clerical errors appearing in the project of

partition. On April 10, 1964, Juanita filed a separate ordinary action to compel Alejandro to

deliver immediately to her lots nos. 3368 and 3441 which were allocated to her under the

project of partition.

Alejandro opposed and claims that by virtue of the order dated April 23, 1960 and

order of December 15, 1960 which "ordered closed and terminated the present case", the

testate proceedings had already been closed and terminated; and that Juanita Lopez is guilty

of laches and negligence in filing the petition of the delivery of her share 4 years after such

closure of the estate, when she could have filed a petition for relief of judgment within sixty

(60) days from December 15, 1960 under Rule 38 of the old Rules of Court.

Juanita contends that the actual delivery and distribution of the hereditary shares to

the heirs, and not the order of the court declaring as closed and terminated the proceedings,

determines the termination of the probate proceedings; and that she is not guilty of laches,

because when she filed on July 20, 1964, her petition for the delivery of her share allocated to

her under the project of partition, less than 3 years had elapsed from August 28, 1961 when

the amended project of partition was approved, which is within the 5-year period for the

execution of judgment by motion .

The trial court issued an order suspending the consideration of the action for delivery

of the shares considering that the action for the annulment of the project of partition is a

prejudicial question. Juanita then filed an amended complaint on the action for delivery,

where she acknowledges the partial legality and validity of the project of partition insofar as

the allocation in her favor of the Lots Nos. 3368 and 3441, the delivery of which she is

seeking. She then filed a motion seeking to set aside the order suspending the consideration

of the action for delivery on the ground that she already admitted the partial legality and

validity of the project of partition and it is longer a prejudicial question to her petition of July

20, 1964 for the delivery of her share.

The trial court denied Juanita's motion on the ground that the parties themselves

agreed to suspend resolution of her petition for the delivery of her shares until after the civil

action for annulment of the project of partition has been finally settled and decided. The MR

was denied

Issue:

WON Juanita is guilty of latches.

Held:

NO. The probate court loses jurisdiction of an estate under administration only after

the payment of all the debts and the remaining estate delivered to the heirs entitled to receive

the same. The finality of the approval of the project of partition by itself alone does not

terminate the probate proceeding. As long as the order of the distribution of the estate has not

been complied with, the probate proceedings cannot be deemed closed and terminated;

because a judicial partition is not final and conclusive and does not prevent the heir from

bringing an action to obtain his share, provided the prescriptive period therefor has not

elapsed. The better practice, however, for the heir who has not received his share, is to

demand his share through a proper motion in the same probate or administration proceedings,

or for re-opening of the probate or administrative proceedings if it had already been closed,

and not through an independent action, which would be tried by another court or Judge which

may thus reverse a decision or order of the probate on intestate court already final and

executed and re-shuffle properties long ago distributed and disposed of.

Section 1 of Rule 90 of the Revised Rules of Court of 1964 as worded, which secures

for the heirs or legatees the right to "demand and recover their respective shares from the

executor or administrator, or any other person having the same in his possession", re-states

the aforecited doctrines.

In the case at bar, the motion filed by petitioner for the delivery of her share was filed

on July 20, 1964, which is just more than 3 years from August 28, 1961 when the amended

project of partition was approve and within 5 years from April 23, 1960 when the original

project of partition was approved. Clearly, her right to claim the two lots allocated to her

under the project of partition had not yet expired. And in the light of Section 1 of Rule 90 of

the Revised Rules of Court of 1964 and the jurisprudence above cited, the order dated

December 15, 1960 of the probate court closing and terminating the probate case did not

legally terminate the testate proceedings, for her share under the project of partition has not

been delivered to her.

RICARDO S. SILVERIO, JR. vs. COURT OF APPEALS and

NELIA S. SILVERIO-DEE

Facts:

The instant controversy stemmed from the settlement of estate of the deceased Beatriz

Silverio. After her death, her surviving spouse, Ricardo Silverio, Sr., filed an intestate

proceeding for the settlement of her estate.

On November 16, 2004, during the pendency of the case, Ricardo Silverio, Jr. filed a petition

to remove Ricardo C. Silverio, Sr. as the administrator of the subject estate. On January 3,

2005, the RTC issued an Order granting the petition and removing Ricardo Silverio, Sr. as

administrator of the estate, while appointing Ricardo Silverio, Jr. as the new administrator.

On January 26, 2005, Nelia S. Silverio-Dee filed a Motion for Reconsideration of the Order

dated January 3, 2005, as well as all other related orders.

On May 31, 2005, the RTC issued an Omnibus Order ordering NeliaSilverio-Dee to vacate

the premises of the property located at No. 3, Intsia Road, Forbes Park, Makati City. She

received a copy of the said Order on June 8, 2005. Instead of filing a Notice of Appeal and

Record on Appeal, private respondent filed a motion for reconsideration of the Order. This

motion for reconsideration was denied in an Order dated December 12, 2005. This Order

was received by private respondent on December 22, 2005. On January 6, 2006, private

respondent filed her Notice of Appeal while she filed her Record on Appeal on January 23,

2006.

Thus, on April 2, 2007, the RTC issued an Order denying the appeal on the ground that it

was not perfected within the reglementary period. The RTC further issued a writ of execution

for the enforcement of the Order dated May 31, 2005 against private respondent to vacate the

premises. Consequently, private respondent filed a Petition for Certiorari and Prohibition

dated May 2, 2007 with the CA. On May 4, 2007, the CA issued the assailed Resolution

granting the prayer for the issuance of a TRO.

Issue:

W/N the Omnibus Order dated May 31, 2005 and the Order dated December 12, 2005 are

Interlocutory Orders which are not subject to appeal under Sec. 1 of Rule 41.

Held:

The Orders are interlocutory and thus, cannot be appealed.

The denial of due course by the RTC was based on two (2) grounds: (1) that NeliaSilverio-

Dee‘s appeal was against an order denying a motion for reconsideration which is disallowed

under Sec. 1(a), Rule 41 of the Rules of Court; and (2) that NeliaSilverio-Dee‘s Record on

Appeal was filed beyond the reglementary period to file an appeal provided under Sec. 3 of

Rule 41.

Petitioner argues that because private respondent filed a Notice of Appeal from the Order

dated December 12, 2005 which denied her motion for reconsideration of the Omnibus Order

dated May 31, 2005, her appeal is of an order denying a motion for reconsideration. Thus,

petitioner alleges that private respondent employed the wrong remedy in filing a notice of

appeal and should have filed a petition for certiorari with the CA under Rule 65 of the Rules

of Court instead.

A final order is one that disposes of the subject matter in its entirety or terminates a

particular proceeding or action, leaving nothing else to be done but to enforce by execution

what has been determined by the court, while an interlocutory order is one which does not

dispose of the case completely but leaves something to be decided upon.

Additionally, it is only after a judgment has been rendered in the case that the ground for the

appeal of the interlocutory order may be included in the appeal of the judgment itself. The

interlocutory order generally cannot be appealed separately from the judgment. It is only

when such interlocutory order was rendered without or in excess of jurisdiction or with grave

abuse of discretion that certiorari under Rule 65 may be resorted to.

In the instant case, NeliaSilverio-Dee appealed the May 31, 2005 Order of the RTC on the

ground that it ordered her to vacate the premises of the property located at No. 3 Intsia Road,

Forbes Park, Makati City. On that aspect the order is not a final determination of the case or

of the issue of distribution of the shares of the heirs in the estate or their rights therein. The

purported authority of NeliaSilverio-Dee, which she allegedly secured from Ricardo Silverio,

Sr., was never approved by the probate court. She, therefore, never had any real interest in the

specific property located at No. 3 IntsiaRoad,Forbes Park, Makati City. As such, the May 31,

2005 Order of the RTC must be considered as interlocutory and, therefore, not subject to an

appeal. Thus, private respondent employed the wrong mode of appeal by filing a Notice of

Appeal with the RTC. Hence, for employing the improper mode of appeal, the case should

have been dismissed.

The implication of such improper appeal is that the notice of appeal did not toll the

reglementary period for the filing of a petition for certiorari under Rule 65, the proper remedy

in the instant case. This means that private respondent has now lost her remedy of appeal

from the May 31, 2005 Order of the RTC.

Mari and Evangelista vs. Bonilla and Ordañez

March 19, 1949

FACTS:

Casimiro Evangelista is a registered owner of a parcel of land (homestead) as

evidenced by Original Certificate of Title No. 4905, of the register of deeds of Nueva Ecija,

consisting of 7.0652 hectares, more or less situated at Valdefuente, Cabanatuan, Nueva Ecija.

He was married to Leonida Mari, plaintiff herein on February 7, 1920 at Rizal, Nueva Ecija,

and during their marriage and while living together as spouses, they begot two children,

Caridad and Deogracias Evangelista. He died intestate.

On January 10, 1944, Deogracias Evangelista alleging to be the only heir of Casimiro

Evangelista, executed a declaration of heirship known as Doe. No. 9, Page 30, Book No. 18,

of Notary Public, Carlos M. Ferrer. For the sum of P2,400, Deogracias Evangelista sold on

the same date, the property in question to the defendants, spouses, Isaac Bonilla and Silvina

Ordafiez. Original certificate of title No. 4905 was cancelled and in lieu thereof transfer

certificate of title No. 19991 was issued to the spouses.

This action was brought to recover Leonida Mari and Caridad Evangelista‘s combined 3/4,

share in the parcel of land sold by Deogracias. The defendants did not know that Leonida

Mari is the mother of Deogracias Evangelista at the time when he bought the land as

Deogracias Evangelista was living with his grandfather, Matias Evangelista; and that Caridad

Evangelista was living with her mother, Leonida Mari;

ISSUES:

(1) WON good faith is a defense for the spouses – NO

(2) WON the judicial partition in favor of Deogracias bound Leonida Mari and Caridad

Evangelista. – NO

HELD:

(1) Good faith affords protection only to purchasers for value from the registered owner.

Deogracias Evangelista, defendants' grantor, is not a registered owner. The land was and still

is registered in the name of Casimiro Evangelista. In no way does the certificate of title state

that Deogracias owned the land; consequently defendants cannot summon to their aid the

theory of indefeasibility of Torrens title. There is nothing in the certificate and in the

circumstances of the transaction which warrant. them in supposing that they needed not

looked beyond the title. If anything, it should have put them on their guard, cautioned them to

ascertain and verify that the vendor was the only heir of his father, that there was no debt, and

that the latter was the sole owner of the parcel.

(2) If, as is probably the case, defendants relied on the court's order adjudicating to

Deogracias Evangelista the entire estate in the distribution held under Rule 74 of the Rules of

Court, their innocence avails them less as against the true owners of the land.

That was a summary settlement made on the faith and strength of the distributee's self-serving

affidavit; and section 4 of the above-mentioned rule provides that, "If it shall appear at

anytime within two years after the settlement and distribution of an estate that an heir or other

person has been unduly deprived of his lawful participation in the estate, such heir or other

person may compel the settlement of the estate in the court in the manner herein provided for

the purpose of satisfying such participation." Far from shielding defendants against loss, the

adjudication and the rule under which it was made gave them a clear warning that they were

acting at their peril. "A judicial partition in probate proceedings does not bind the heirs who

were not parties thereto. No partition, judicial or extrajudicial, could add one iota or particle

to the interest which the partitioners had during the joint possession.

Partition is of the nature of a conveyance of ownership, and certainly none of the co-owners

may convey to the others more than his own true right. A judicial partition in probate

proceedings is not final and conclusive, and not being of such definitive character as to stop

all means of redress for a co- heir who has been deprived of his lawful share, such co-heir

may still, within the prescriptive period, bring an action for reivindicacion in the province

where any of the real property of the deceased may be situated. Broad perspectives of public

policy are set out in the opinion of the court in support of the wisdom of allowing a co-heir

the benefits of the law of prescription even after a partition, judicial or extrajudicial, has been

had." (Lajom vs. Viola, 73 Phil., 563.)

Vda De Lopez vs Lopez

35 SCRA 81

Facts:

On October 13, 1962 Saturnina M. Vda.de Lopez, judicial administratrix of the estate

of the deceased, filed with the lower court a project of partition adjudicating the whole to

herself and her legitimate children with the deceased. The lower court approved the project of

partition and declared the intestate proceeding "terminated and closed for all legal purposes."

Seventeen days thereafter, the minors Dahlia and Roy, both surnamed Lopez, represented by

their mother, Lolita B. Bachar, filed a motion to reopen the proceeding, together with a

petition claiming that they were illegitimate children of the deceased Emilio Lopez, born out

of his extra-marital relations with Lolita B. Bachar, and asking that their rights as such be

recognized and their shares in the estate given to them. The motion was opposed by the

judicial administratrix on the ground that the proceeding had already been ordered terminated

and closed and the estate was already in the hands of the distributees; and that the reopening

of the intestate proceeding was not the proper remedy, which should be an independent action

against the individual distributees..

Issues:

(1) whether or not the motion to reopen the estate proceeding was filed too late; and

(2) whether or not such motion was the proper remedy.

Held:

1. The motion to reopen was not too late. The court's order declaring the intestate proceeding

closed did not become final immediately upon its issuance. It was no different from

judgments or orders in ordinary actions. Thus, Section 2 of Rule 72 provides that "in the

absence of special provisions, the rules provided for in ordinary actions shall be, as far as

practicable, applicable in Special Proceedings." And judgments or orders in ordinary actions

become final after thirty (30) days from notice to the party concerned. In this case appellants'

motion to reopen was led only seventeen (17) days from the date of the order of closure. The

remedy was therefore invoked on time.

2.In the recent case of Uriarte vs. Uriarte, et al., G.R. Nos. L-21938-39, May 29, 1970, this

Court, thru Justice Arsenio Dizon, pointed out that there are two alternatives for an

acknowledged natural child to prove his status and interest in the estate of the deceased

parent, to wit: (1) to intervene in the probate proceeding if it is still open; and (2) to ask for its

reopening if it has already been closed.

Demands and claims filed by any heir, legatee or party in interest to a testate or intestate

succession, shall be acted upon and decided in the same special proceedings, and not in a

separate action, and the judge who has jurisdiction over the administration of the inheritance,

and who, when the time comes, will be called upon to divide and adjudicate it to the

interested parties, shall take cognizance of all such questions.

Nuñal v. Court of Appeals

G.R. No. 94005

FACTS:

Case arose from a Civil Case filed by one Emma Lyon de Leon in her behalf and as

guardian ad litem of the minors Helen Sabarra and Kenny Sabarre, against Nuñal (now

deceased), as represented by her heirs. The subject parcel of land is located in Isabela,

Basilan City, subject for partition, to which Luisa Nuñal was in possession since 1946. She

made no accounting of the income derived from the property. It was petitioned that the

decisions be turned in their favor as Luisa is not a legitimate child. Hence the petition that the

right over the subject property be given to Lyon-de Leon and not of Nuñal‘sheirs, be

overturned.

ISSUE:

Whether or not the RTC has no jurisdiction over the matter and , and may not be

amended, or modified?

RULING:

REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; ONCE IT BECOMES

FINAL, MAY NO LONGER BE MODIFIED IN ANY RESPECT; EXCEPTIONS. — In the

case of Manning International Corporation v. NLRC, (195 SCRA 155, 161 [1991]) We held

that ". . ., nothing is more settled in the law than that when a final judgment becomes

executory, it thereby becomes immutable and unalterable. The judgment may no longer be

modified in any respect, even if the modification is meant to correct what is perceived to be

an erroneous conclusion of fact or law, and regardle

ss of whether the modification is attempted to be made by the Court rendering it or by the

highest Court of land. The only recognized exceptions are the correction of clerical errors or

the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of

course, where the judgment is void." Furthermore, "(a)ny amendment or alteration which

substantially affects a final and executory judgment is null and void for lack of jurisdiction,

including the entire proceedings held for that purpose."

Intestate Estate of the deceased Lee Liong. RAFAEL A. DINGLASAN, ET ALS. v.s.

ANG CHIA, as Administratrix of the above intestate, LEE BING HOO alias CLARO

LEE, and LEE BUN TING

Facts:

Rafael Dinglasan filed a civil case in the CFI of Capiz against Ang Chia, her son

Claro Lee and one Lee Bun Ting to recover the ownership and possession of a parcel of land

located in Capiz. He also filed a motion for the appointment of a receiver. The counsel for

defendants objected on the basis that there was a pending case in the same court concerning

the intestate estate of Lee Liong. The plaintiffs withdrew the motion and filed an amended

complaint seeking the inclusion of Ang Chia (widow), the administratix of the estate, as a

party-defendant. The plaintiffs also filed in the intestate proceedings a verified claim in

intervention and a motion praying that a co-administrator of the estate be appointed and the

bond of the administratrix be increased. The plaintiffs made of record the pendency of the

civil case and prayed that the intestate proceedings be not closed until said civil case shall

have been terminated. Thereafter, the administratrix filed a motion to dismiss the claim in

intervention and objected to the motions made by the plaintiffs. The trial court denied the

petition for a co-administrator but increased the bond to P5,000 and stated that it would act

thereon if a motion to close the intestate proceedings is presented in due time and is objected

to by petitioners. It also took cognizance of the pendency of said civil case. The

administratrix did not appeal from said order nor file a new bond and instead moved for the

closing of the proceedings and her discharge as administratrix on the ground that the heirs

had already entered into an extrajudicial partition of the estate. The petitioners objected.

Subsequently, the CFI of Capiz issued in the intestate estate proceedings an order holding in

abeyance the approval of their petition for an extra-judicial partition the closing of said

proceedings until after the final termination of the civil case of the same court. Hence, this

appeal.

Issue:

WON the lower court may hold the closing of the intestate proceedings pending the

termination of the separate civil action.

Held:

Yes. A probate case may be held in abeyance pending determination of ordinary case

because to hold otherwise would render some rules in the ROC nugatory. Section 1, Rule 88,

of the Rules of Court, expressly provides that "action to recover real or personal property

from the estate or to enforce a lien thereon, and actions to recover damages for an injury to

person or property, real or personal, may be commenced against the executor or

administrator" What practical value would this provision have if the action against the

administrator cannot be prosecuted to its termination simply because the heirs desire to close

the intestate proceedings without first taking any step to settle the ordinary civil case? This

rule is but a corollary to the ruling which declares that questions concerning ownership of

property alleged to be part of the estate but claimed by another person should be determined

in a separate action and should be submitted to the court in the exercise of its general

jurisdiction. Section 17, Rule 3 also implies that a probate case may be held in abeyance

pending determination of an ordinary case wherein an administrator is made a party. To hold

otherwise would be also to render said rule nugatory. Thus, the court is justified in taking

cognizance of said civil case because of the unavoidable fact that whatever is determined in

said civil case will necessarily reflect and have a far reaching consequence in the

determination and distribution of the estate.

LORENZO vs. POSADAS

FACTS:

Thomas Hanley died, leaving a will and a considerable amount of real and personal

properties. Proceedings for the probate of his will and the settlement and distribution of his

estate were begun in the CFI of Zamboanga. The will was admitted to probate.

The CFI considered it proper for the best interests of the estate to appoint a trustee to

administer the real properties which, under the will, were to pass to nephew Matthew ten

years after the two executors named in the will was appointed trustee. Moore acted as trustee

until he resigned and the plaintiff Lorenzo herein was appointed in his stead.

During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue

(Posadas) assessed against the estate an inheritance tax, together with the penalties for

deliquency in payment. Lorenzo paid said amount under protest, notifying Posadas at the

same time that unless the amount was promptly refunded suit would be brought for its

recovery. Posadas overruled Lorenzo‘s protest and refused to refund the said amount.

Plaintiff went to court. The CFI dismissed Lorenzo‘s complaint and Posadas‘ counterclaim.

Both parties appealed to this court.

*Plaintiff contends that the lower court erred:

In not allowing as lawful deductions, in the determination of the net amount of the estate

subject to said tax, the amounts allowed by the court as compensation to the "trustees" and

paid to them from the decedent's estate.

ISSUE:

WON in determining the net value of the estate subject to tax, is it proper to deduct

the compensation due to trustees?

RULING:

The SC modified the lower court‘s decision with respect to the deduction of

compensation due to trustees.

Certain items are required by law to be deducted from the appraised gross in arriving at the

net value of the estate on which the inheritance tax is to be computed (sec. 1539, Revised

Administrative Code). In the case at bar, the defendant and the trial court allowed a deduction

of only P480.81. This sum represents the expenses and disbursements of the executors until

March 10, 1924, among which were their fees and the proven debts of the deceased. The

plaintiff contends that the compensation and fees of the trustees, which aggregate P1,187.28

(Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted under section 1539

of the Revised Administrative Code which provides, in part, as follows: "In order to

determine the net sum which must bear the tax, when an inheritance is concerned, there shall

be deducted, in case of a resident, . . . the judicial expenses of the testamentary or intestate

proceedings, . . . ."

A trustee, no doubt, is entitled to receive a fair compensation for his services (Barney vs.

Saunders, 16 How., 535; 14 Law. ed., 1047). But from this it does not follow that the

compensation due him may lawfully be deducted in arriving at the net value of the estate

subject to tax. There is no statute in the Philippines which requires trustees' commissions to

be deducted in determining the net value of the estate subject to inheritance tax (61 C. J., p.

1705). Furthermore, though a testamentary trust has been created, it does not appear that the

testator intended that the duties of his executors and trustees should be separated. (Ibid.; In

re Vanneck's Estate, 161 N. Y. Supp., 893; 175 App. Div., 363; In re Collard's Estate, 161 N.

Y. Supp., 455.) On the contrary, in paragraph 5 of his will, the testator expressed the desire

that his real estate be handled and managed by his executors until the expiration of the period

of ten years therein provided. Judicial expenses are expenses of administration (61 C. J., p.

1705) but, in State vs. Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it

was said: ". . . The compensation of a trustee, earned, not in the administration of the estate,

but in the management thereof for the benefit of the legatees or devises, does not come

properly within the class or reason for exempting administration expenses. . . . Service

rendered in that behalf have no reference to closing the estate for the purpose of a distribution

thereof to those entitled to it, and are not required or essential to the perfection of the rights of

the heirs or legatees. . . . Trusts . . . of the character of that here before the court, are created

for the the benefit of those to whom the property ultimately passes, are of voluntary creation,

and intended for the preservation of the estate. No sound reason is given to support the

contention that such expenses should be taken into consideration in fixing the value of the

estate for the purpose of this tax.

Salinas vs Tuazon

GR No. 33626, March 2, 1931

FACTS:

On May 31, 1911, Francisco Salinas died in Spain who has been a resident of the

Philippines. There were no records showing when he left the Philippines. Sometime in 1900,

Salinas appointed TeodosioPintado y Fernandez as his attorney-in-fact to administer his

properties with express authority to delegate his power as such attorney or to appoint his

successor.

On April 24, 1905, Fernandez appointed Jose Moreno Lahaba to administer the properties of

Salinas. Lahaba reported the administration of Salinas' properties. Upon the request of the

heirs of Salinas through Spanish consul Vicente Palmalori, Lahaba stated that he only had in

possession the amount of P2500 and ready to deliver to the heirs. Pending receipt, Lahaba

died. Only P2500 was paid and delivered to the Salinas' heirs upon intestation proceedings of

the deceased Lahaba.

Further inquiries were made by the heirs of Salinas and found out that on November 24,

1918, Lahaba sold two (2) parcels of land to Thomas Ortiz Luis paying only P5000 and

subject to annual installments of P5000 mortgaged the remaining P25000 to secure its

payment in favor of Lahaba. When Lahaba died, a balance of P20000 was still unpaid.

No report was further submitted by Lahaba from July 1911 up to his death in 1920 despite

inquiries made by the heirs of Salinas.

On May 26, 1928, Ana Callejon Salinas, et. al., through the Consul General of Spain in the

Philippines, initiated an action before the Court of First Instance (CFI) of Manila to recover

the sum of P30,000 with interest at 10% to be reckoned from November 24, 1918 and

claimed thatthey were the heirs os Francisco Salinas.

Defendants demurred to the complaint but the court overruled. Defendants filed their answer

on the following grounds:

(1) lack of jurisdiction as the court did not have jurisdiction of the subject matter

(2) res judicata as to plaintiff's claim for the heirs were already paid P2500

(3) prescription that the action has already prescribed

(4) Lahaba spent P16000 for clearing said lands and for the survey and registration thereof.

ISSUES:

(1) Whether or not the claim has already prescribed

(2) Whether or not P30000 is a claim against the estate of Lahaba

HELD:

(1)No.

"As a general rule, a trust estate is exempt from the operation of the statute of limitations. A

trustee, however, may acquire the trust estate by prescription provided there is repudiation of

the trust and this fact is known to the cestuique trust. The repudiation must be clear, open and

unequivocal. In that case the statute will commence to run from and after said repudiation and

the knowledge thereof by the cestui. Furthermore, prescription in order to be available as a

defense, the trustee must prove that there was a direct repudiation of the trust and that the

cestuique trust or beneficiary had knowledge thereof. Such is the rule as found in Vol. 37, C.

J., secs. 249, 295 and 296, pp. 923-926.

SEC. 294.(2) Repudiation of Trust and Assertion of Adverse Claim — (a) In General. — In

the case of an express trust limitations do not start to run in favor of the trustee until the trust

is repudiated. A doctrine, the validity of which has been questioned, applying to all express

trusts, regardless of the manner in which the trust was created, is that if the trustee openly

repudiates the trust and asserts an adverse claim to the trust property, these facts being known

to the cestuique trust, the statute begins to run in the trustee's favor, although not until then,

and even though the trust is a resulting one, or a trust ex maleficio, . . . . And the general rule

above stated applies in favor of persons who become trustees by construction of law, and in

case of a voluntary constructive trust. As the statute of limitations is an affirmative defense to

be alleged and proved, it is incumbent upon the trustee to show that there was a direct

repudiation of the trust and that the cestuique trust had knowledge thereof. Every intendment

and presumption is against a repudiation.

SEC. 295. (b) Necessity for Notice — But a trustee's repudiation of an express trust, or a trust

subject to the rule governing express trusts, and his assertion of an adverse interest will not be

sufficient to start the statute of limitations in motion, unless knowledge or notice of such

repudiation and claim is brought home to the cestuique trust, and the statute begins to run

when and only when the cestuique trust acquires the knowledge or receives the notice.

SEC. 296. (c) Character and Circumstances of Repudiation and Notice — To set the statute

in motion the trustee's repudiation and adverse claim, whether by acts or words —

repudiation may be proved by circumstances — must be clear, open and unequivocal, and

must be so clearly and fully made known to the cestuique trust as to make it incumbent upon

him to assert his equitable rights. Mere failure of the trustee to respond to repeated inquiries

addressed to him by the cestuique trust is not enough. To constitute a repudiation there must

be something said or done by the trustee in open contravention of the terms of the trust, and

of such character that the relations of the parties will become and continue hostile."

(2) No. The P30000 is not a claim against the estate of Lahaba because it is not indebtedness

of Lahaba but represents the price of trust property administered by Lahaba who failed and

refused to account the properties.

CABACUNGAN vs. LAIGO

G.R. No. 175073 , August 15, 2011

FACTS:

Margarita Cabacungan owned three parcels of unregistered land in La Union which

are covered by tax declaration all in her name. Sometime in 1968, Margarita‘s son, Roberto

Laigo, Jr. applied for a non-immigrant visa to the United States, and to support his

application, he allegedly asked Margarita to transfer the tax declarations of the properties in

his name. For said purpose, Margarita, unknown to her other children, executed an Affidavit

of Transfer of Real Property whereby the subject properties were transferred by donation to

Roberto.

Roberto adopted respondents Pedro Laigo and MarilouLaigo. In July 1990, Roberto sold the

aforementioned three parcel of land. One parcel of land was sold to spouses Mario and Julia

Campos and the rest were sold to Pedro Laigo and MarilouLaigo. These sales were not

known to Margarita and her other children.

During Roberto‘s wake, Margarita came to know of the sales as told by Pedro himself.

Margarita, represented by her daughter, Luz, instituted a complaint for the annulment of said

sales and for the recovery of ownership and possession of the subject properties as well as for

the cancellation of Ricardo‘s tax declarations.

Spouses Campos advanced that they were innocent purchasers for value and in good faith.

Further, they noted that Margarita‘s claim was already barred by prescription and laches

owing to her long inaction in recovering the subject properties.

Marilou and Pedro contends to be buyers in good faith and for value. They also believed that

Margarita‘s cause of action had already been barred by laches, and that even assuming the

contrary, the cause of action was nevertheless barred by prescription as the same had accrued

way back in 1968 upon the execution of the affidavit of transfer by virtue of which an

implied trust had been created. In this regard, they emphasized that the law allowed only a

period of ten (10) years within which an action to recover ownership of real property or to

enforce an implied trust thereon may be brought, but Margarita merely let it pass.

Margarita and the Spouses Campos amicably entered into a settlement whereby they waived

their respective claims against each other. Margarita died two days later and was substituted

by her estate.

On February 8, 1999, the trial court rendered a Partial Decision approving the compromise

agreement and dismissing the complaint against the Spouses Campos. Trial on the merits

ensued with respect to Pedro and Marilou.

Trial court rendered judgment dismissing the complaint. It explained that the 1968 Affidavit

of Transfer operated as a simple transfer of the subject properties from Margarita to Roberto.

It found no express trust created between Roberto and Margarita by virtue merely of the said

document as there was no evidence of another document showing Roberto‘s undertaking to

return the subject properties. It concluded that an "implied or constructive trust" was created

between the parties, as if affirming that there was indeed an agreement to have the properties

returned to Margarita in due time.

Moreover, the trial court barred recovery from respondents who were found to have acquired

the properties supposedly in good faith and for value. It also pointed out that recovery could

no longer be pursued in this case because Margarita had likewise exhausted the ten-year

prescriptive period for reconveyance based on an implied trust which had commenced to run

in 1968 upon the execution of the Affidavit of Transfer.

The appellate court had found no implied trust relation in the transaction between Margarita

and Roberto, nevertheless, it held that the ten-year prescriptive period under Article 1144 of

the Civil Code, in relation to an implied trust created under Article 1456, had already been

exhausted by Margarita because her cause of action had accrued way back in 1968 and that

while laches and prescription as defenses could have availed against Roberto, the same would

be unavailing against Pedro and Marilou because the latter were supposedly buyers in good

faith and for value.

ISSUES:

Whether or not an action for reconveyance under a constructive implied trust in accordance

with Article 1456 does not prescribe.

HELD:

The Court disagree with the Court of Appeals‘ finding that there was no evidence on record

showing that an implied trust relation arose between Margarita and Roberto. It finds that

petitioner had offered evidence to prove the intention of Margarita to transfer to Roberto only

the legal title to the properties in question, with expectation that Roberto would return the

same to her on accomplishment of that specific purpose for which the transaction was entered

into.

It explained that trust is the legal relationship between one person having an equitable

ownership of property and another person owning the legal title to such property, the

equitable ownership of the former entitling him to the performance of certain duties and the

exercise of certain powers by the latter. Express or direct trusts are created by the direct and

positive acts of the parties, by some writing or deed, or will, or by oral declaration in words

evincing an intention to create a trust. Implied trusts arise by legal implication based on the

presumed intention of the parties or on equitable principles independent of the particular

intention of the parties.

Constructive trusts, on the one hand, come about in the main by operation of law and not by

agreement or intention. They arise not by any word or phrase, either expressly or impliedly,

evincing a direct intention to create a trust, but one which arises in order to satisfy the

demands of justice. Constructive trusts are illustrated in Articles 1450, 1454, 1455 and 1456

Roberto is merely a depositary of legal title having no duties as to the management, control or

disposition of the property except to make a conveyance when called upon by the cestuique

trust. Hence, the sales he entered into with respondents are a wrongful conversion of the trust

property and a breach of the trust.

The Court finds that an action for reconveyance under a constructive implied trust in

accordance with Article 1456 does not prescribe unless and until the land is registered or the

instrument affecting the same is inscribed in accordance with law, inasmuch as it is what

binds the land and operates constructive notice to the world.

In the present case, however, the lands involved are unregistered lands. There is no way by

which Margarita, during her lifetime, could be notified of the furtive and fraudulent sales

made in 1992 by Roberto in favor of respondents, except by actual notice from Pedro himself

in August 1995. Hence, it is from that date that prescription began to toll. The filing of the

complaint in February 1996 is well within the prescriptive period. Finally, such delay of only

six (6) months in instituting the present action hardly be sufficient to justify a finding of

inexcusable delay or to create an inference that Margarita has allowed her claim to stale by

laches.

The Court granted the petition, affirming the judgment of the Regional Trial Court and

reversed the decision of the Court of Appeals. It also directed the cancellation of the tax

declarations covering the subject properties in the name of Roberto D. Laigo and his

transferees, nullified the deeds of sale executed by Roberto D. Laigo in favor of respondents

Pedro Roy Laigo and MarilouLaigo and directed said respondents to execute reconveyance in

favor of petitioner.

ANITA UNGAB-VALEROSO, joined in by her husband, RUSELO VALEROSO, vs.

AMANCIA UNGAB-GRADO, FELIX UNGAB, represented by his son ROSENDO

UNGAB, ESPENILA UNGAB-JAICTIN and RUSTICINA UNGAB-TAMALA,

G.R. No. 163081 June 15, 2007

Facts:

Subject of this case is a 14.3375-hectare land in Binuni, Kolambugan, Lanao (now Binuni,

Bacolod, Lanao del Norte) registered in the name of TimoteoUngab under Original

Certificate of Title (OCT) No. (P-41)-1,550. Petitioner Anita Ungab is the only child of

Timoteo, now deceased. Respondent Felix Ungab is the brother of Timoteo while the other

respondents are the heirs of Timoteo‘s other brothers and sisters, namely Simeona, Eugenia,

Lorenzo, Lazaro, and Margarito.

In 1972, the heirs of CiriacoUngab filed a complaint docketed as Civil Case No. II-74 in the

Court of First Instance (CFI) of Iligan City, Lanao del Norte against the brothers, sisters and

heirs of Timoteo for the partition, accounting and reconveyance of the subject land. When the

case was called for trial, the parties submitted a written compromise agreement.

On February 15, 1973, the CFI rendered judgment adopting in toto the compromise

agreement.

The parties did not have the land partitioned but divided the proceeds of the land in

accordance with the decision. However, in December 1996, Anita refused to give respondents

their respective shares. Respondents then filed against petitioners Anita and her husband

RuseloValeroso, a complaint for recovery of possession, partition, enforcement of

compromise agreement and damages docketed as Civil Case No. 4048 with the RTC of Iligan

City.

On December 1999, the RTC held that the compromise agreement bound all the parties

thereto including their heirs and assigns, and Timoteo‘s affidavit whose presumption of

regularity petitioners failed to overcome, and the compromise agreement created an express

trust which has not yet prescribed.

Petitioners elevated the case to the Court of Appeals, which affirmed the trial court‘s decision

but deleted the award of attorney‘s fees.

Petitioners moved for reconsideration but it was denied. Hence, this petition.

Issue:

Whether respondents are truly co-owners of the land, as shown by the Affidavit of

Acknowledgment signed by Anita herself?

Held:

YES.

We note, however, that even without the Affidavit of Timoteo, there is still evidence on

record proving that the respondents and Timoteo indeed own the land in common. For one,

there is the Affidavit of Acknowledgment dated August 4, 1960.

Petitioners contend that respondents cannot use the Affidavit of Acknowledgment signed by

Anita and her mother as Anita was misled in signing it. A question involving the due

execution of the Affidavit of Acknowledgment would require an inquiry into the appreciation

of evidence by the trial court, a matter which this Court cannot do in a petition for review on

certiorari under Rule 45. The truth or falsehood of the Affidavit of Acknowledgment is a

question of fact, of which this Court cannot take cognizance. Moreover, the Affidavit of

Acknowledgment, being a notarized document, enjoys the presumption of regularity.

Petitioners‘ mere allegation that Anita was misled by her mother into signing the affidavit

could not overcome this presumption.

As properly held by the trial and appellate courts, the execution of the Affidavit of

Acknowledgment and the compromise agreement established an express trust wherein the

respondents, as trustors, reposed their confidence on petitioner Anita and her mother, as

trustees, that they will hold the land subject of the co-ownership. There are no particular

words required in the creation of an express trust, it being sufficient that a trust is clearly

intended. This express trust is shown in the two documents. Express trusts do not prescribe

except when the trustee repudiates the trust.

SPOUSES SHEIKDING BOOC and BILY BOOC, vs. FIVE STAR

MARKETING CO., INC.

G.R. No. 157806. November 22, 2007

FACTS

The petitioners are present occupants of the third floor of the building apparently owned by

Five Star marketing. They were allowed to live there for free. However, on March 15, 1999

the plaintiff notified all building occupants that it had withdrawn the privilege granted (rental

free) to them coupled with a notice of rental rates in each premises concerned, and further

required to any interested occupants to negotiate and sign a lease agreement with plaintiff.

The defendants failed and refused to lease and vacate the premises. They claim that they are

co-owners of the said building and that the respondent is merely holding the property in trust

for them.

An unlawful detainer case was filed by the respondents which were decided in favor of the

petitioners in the lower courts but was overturned by the CA finding in favor of Five Star

Marketing hence this appeal.

ISSUE

Whether the petitioners are co-owners of the building and therefore have a right of material

possession over the same

RULING

No. The court affirms the ruling of the CA that the petitioners fail to prove that petitioners

Booc, purchased the lot and constructed the building with their own money.

The petitioners claim that the subject property was being held in trust for them by Five Star

Marketing and as a rule, the burden of proving the existence of a trust is on the party

asserting its existence and such proof must be clear and satisfactorily show the existence of

the trust and its elements.

The petitioners were unable to present competent evidence to support their allegation of

ownership of the lot in question. And the preponderance of evidence lies in favor of

respondent's claim of ownership. Surely, the Deed of Sale, TCT, Tax Declarations and

Official Receipts of tax payments in the name of respondent are more convincing than the

evidence submitted by petitioners

EMILIA O'LACO and HUCO LUNA vs. VALENTIN CO CHO CHIT, O LAY KIA

and COURT OF APPEALS

G.R. No. 58010 March 31, 1993

FACTS:

Philippine Sugar Estate Development Company, Ltd., sold a parcel of land with the

Deed of Absolute Sale naming Emilia O'Laco as vendee. Private respondent-spouses Valentin

Co Cho Chit and O Lay Wa learned from the newspapers that Emilia O'Laco sold the same

property to the Roman Catholic Archbishop of Manila with assumption of the real estate

mortgage constituted thereon. Respondent-spouses asserting that petitioner Emilia O'Laco

knew that they were the real vendees of the Oroquieta property sold by Philippine Sugar

Estate Development Company, Ltd., and that the legal title thereto was merely placed in her

name. They contend that Emilia O'Laco breached the trust when she sold the land to the

Roman Catholic Archbishop of Manila. Emilia O‘Laco and Huco Luna deny the existence of

any form of trust relation. They averred that the property was actually bought using Emilia‘s

own money.

Finding no trust relation between the parties, the trial court dismissed the complaint

together with the counterclaim. Petitioners and respondents appealed to the Court of Appeals

which set aside the lower court‘s decision. When the motion for reconsideration was denied,

petitioners filed this instant petition to the Supreme Court for relief.

ISSUE:

Whether a trust relation existed between the half sisters.

RULING:

Yes. By definition, trust relations between parties may either be express or implied.

Express trusts are those which are created by the direct and positive acts of the parties, by

some writing or deed, or will, or by words evincing an intention to create a trust. Implied

trusts are those which, without being express, are deducible from the nature of the transaction

as matters of intent, or which are super induced on the transaction by operation of law as

matters of equity, independently of the particular intention of the parties.

Implied trusts may either be resulting or constructive trusts, both coming into being by

operation of law. Resulting trusts are based on the equitable doctrine that valuable

consideration and not legal title determines the equitable title or interest and are presumed

always to have been contemplated by the parties. They arise from the nature or circumstances

of the consideration involved in a transaction whereby one person thereby becomes invested

with legal title but is obligated in equity to hold his legal title for the benefit of another. On

the other hand, constructive trusts are created by the construction of equity in order to satisfy

the demands of justice and prevent unjust enrichment.

Unlike express trusts concerning immovables or any interest therein which cannot be

proved by parol evidence, implied trusts may be established by oral evidence. However, in

order to establish an implied trust in real property by parol evidence, the proof should be as

fully convincing as if the acts giving rise to the trust obligation were proven by an authentic

document. It cannot be established upon vague and inconclusive proof.

In this case, a resulting trust was intended by the parties under Art. 1448 which

provides that ―There is an implied trust when property is sold, and the legal estate is granted

to one party but the price is paid by another for the purpose of having the beneficial interest

of the property. The former is the trustee, while the latter is the beneficiary‖. As stipulated by

the parties, the document of sale, the owner's duplicate copy of the certificate of title,

insurance policies, receipt of initial premium of insurance coverage and real estate tax

receipts ware all in the possession of respondent spouses which they offered in evidence. As

emphatically asserted by respondent O Lay Kia, the reason why these documents of

ownership remained with her is that the land in question belonged to her.

ANTONIO ARANETA vs. ANTONIO M. PEREZ

G.R. Nos. L-16185-86 May 31, 1962

These are two (2) incidents of the trusteeship of the minors Benigno, Angela and Antonio, all

surnamed Perez Y Tuason:

A. G.R. No. L-16185

FACTS:

The law firm Araneta&Araneta, through its assistant, Atty. Francisco T. Papa, had rendered

services, as counsel for the appelleeAntonio Araneta, in connection with the approval of his

accounts for January to March 1956 and April to June 1957, which were objected to by

appellant but, was approved by the lower court, thereby authorizing the payment of

P5,500.00 for the services thus rendered by Araneta&Araneta.

Aggrieved, appellant filed a writ of certiorari and mandamus against the appellee, Antonio

Araneta and the lower court, the latter for sustaining the action of the appellee in withholding

said amount for the services rendered by Araneta&Araneta,from the shares of the minors

aforementioned in the net income of the trust on the following grounds: a) pursuant to

Section 7 of Rule 86 of the Rules of Court: ―When the executor or administrator is an

attorney he shall not charge against the estate any professional fees for legal services

rendered by him‖that the services above referred to inured to the benefit, not of the trust

estate, but of the trustee; b) that the amount of the award is excessive; and c) that the lower

court should have required the introduction of evidence on the extent of the services rendered

by the aforementioned law firm before making said award.

ISSUE:

Whether or not the trustee may be allowed to pay a sum of money to the law firm,

Araneta&Araneta, of which he is a member, for services rendered to him, in his capacity as

trustee, in several judicial proceedings.

HELD:

YES. Appellant's pretense is untenable because said Section 7 of Rule 86 refers only to

"executors or administrators" of the estate of deceased persons, and does not necessarily

apply to trustees. While It is true that some functions of the former bear a close analogy with

those of the latter, that a trustee, like, an executor or administrator, holds an office of trust,

particularly when the trustee acts as such under judicial authority, the duties of executors or

administrators are, however, fixed and/or limited by law, whereas those of trustee of an

express trust — like that which we have under consideration — are, usually, governed by the

intention of the trustor or of the parties, if established by contract (Art. 1441, Civil Code of

the Philippines). Duties of trustees may cover a much wider range than those of executors or

administrators of the estate of deceased persons. The application of Section 7 of Rule 86 to

all trusteeships without distinction may dissuade deserving persons from accepting the

position of trustee and consequently have a deterrent effect upon the establishment of trusts.

In the case at bar, considering that the appellee was merely defending himself in the

proceedings that required the services of counsel; that in each case the stand taken by the

appellee was upheld by the court; that the will creating the trust and designating the appellee

as trustee explicitly grants him the right to collect for his services such reasonable fees;

It is well settled that ―a trustee may be indemnified out of the trust estate for his expenses in

rendering and proving his accounts and for costs and counsel fees‖ in connection therewith

apart from the fact that the nature of the professional services in question appeared in the

records before the lower court and that the amount of P5,500 fixed by the same as

compensation for such services is not excessive.

B. G.R. No. L-16186

FACTS:

From July to September, 1958, the appellee, Araneta had bought for the trust estate, through a

broker 118 common shares of stock of the Philippine-American Drug Co. at P100 each, for

which account was objected by appellant upon the ground that the investment therein is

"unwise and is actually an act of self-dealing between the trustee and the beneficiaries of the

trust", because the appellee is, also, a stockholder of said company. Lower court overruled the

objection.

ISSUE: Whether the purchase of certain shares of stock nude by the appellee for the benefit

of the trusteeship merits judicial approval

HELD:

YES. Said purchase by the trustee may be considered as an indication that he had displayed

in the management of the trust estate the same interest he had in the protection of his own

property.

Upon the other hand, it has, also, been established that the book value of each of said 118

common shares of stock, purchased by the trustee at P100 each, is P202.80; that in 1954,

1955 and 1957, the Philippine-American Drug Co. had paid a cash dividends and stock

dividends. Furthermore, the statement of accounts of the company for the years 1954,-1957

satisfied the lower court that the enterprise "is financially stable and sound". Under the

circumstances, the investment in question cannot be said to be unwise.