SPECPRO| RULE 72| 1

G.R. No. 109373

March 20, 1995

PACIFIC BANKING CORPORATION EMPLOYEES ORGANIZATION,

PAULA S. PAUG, and its officers and members, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and VITALIANO N. NAAGAS
II, as Liquidator of Pacific Banking Corporation, respondents.
G.R. No. 112991

March 20, 1995

THE PRESIDENT OF THE PHILIPPINE DEPOSIT INSURANCE

CORPORATION, as Liquidator of the Pacific Banking Corporation ,
petitioner,
vs.
COURT OF APPEALS, HON. JUDGE REGINO T. VERIDIANO II,
DEPUTY SHERIFF RAMON ENRIQUEZ and ANG ENG JOO, ANG KEONG
LAN and E.J ANG INT'L. LTD., represented by their Attorney-in-fact,
GONZALO C. SY, respondents.
MENDOZA, J.:
These cases have been consolidated because the principal question involved
is the same: whether a petition for liquidation under 29 of Rep. Act No.
265, otherwise known as the Central Bank Act, is a special proceeding or an
ordinary civil action. The Fifth and the Fourteenth Divisions of the Court of
Appeals reached opposite results on this question and consequently applied
different periods for appealing.
The facts are as follows:
I.
Proceedings in the CB and the RTC
On July 5, 1985, the Pacific Banking Corporation (PaBC) was placed under
receivership by the Central Bank of the Philippines pursuant to Resolution
No. 699 of its Monetary Board. A few months later, it was placed under
liquidation 1 and a Liquidator was appointed. 2
On April 7, 1986, the Central Bank filed with the Regional Trial Court of
Manila Branch 31, a petition entitled "Petition for Assistance in the

Liquidation of Pacific Banking Corporation." 3 The petition was approved,

after which creditors filed their claims with the court.
On May 17, 1991, a new Liquidator, Vitaliano N. Naagas, 4 President of the
Philippine Deposit Insurance Corporation (PDIC), was appointed by the
Central Bank.
On March 13, 1989 the Pacific Banking Corporation Employees Organization
(Union for short), petitioner in G.R. No. 109373, filed a complaint-inintervention seeking payment of holiday pay, 13th month pay differential,
salary increase differential, Christmas bonus, and cash equivalent of Sick
Leave Benefit due its members as employees of PaBC. In its order dated
September 13, 1991, the trial court ordered payment of the principal claims
of the Union. 5
The Liquidator received a copy of the order on September 16, 1991. On
October 16, 1991, he filed a Motion for Reconsideration and Clarification of
the order. In his order of December 6, 1991, the judge modified his
September 13, 1991 6 but in effect denied the Liquidator's motion for
reconsideration. This order was received by the Liquidator on December 9,
1991. The following day, December 10, 1991, he filed a Notice of Appeal
and a Motion for Additional Time to Submit Record on Appeal. On December
23, 1991, another Notice of Appeal was filed by the Office of the Solicitor
General in behalf of Naagas.
In his order of February 10, 1992, respondent judge disallowed the
Liquidator's Notice of Appeal on the ground that it was late, i.e., more than
15 days after receipt of the decision. The judge declared his September 13,
1991 order and subsequent orders to be final and executory and denied
reconsideration. On March 27, 1992, he granted the Union's Motion for
issuance of a writ of Execution.
Ang Keong Lan and E.J. Ang Int'l., private respondents in G.R. No. 112991,
likewise filed claims for the payment of investment in the PaBC allegedly in
the form of shares of stocks amounting to US$2,531,632.18. The shares of
stocks, consisting of 154,462 common shares, constituted 11% of the total
subscribed capital stock of the PaBC. They alleged that their claim
constituted foreign exchange capital investment entitled to preference in
payment under the Foreign Investments Law.

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In his order dated September 11, 1992, respondent judge of the RTC
directed the Liquidator to pay private respondents the total amount of their
claim as preferred creditors. 7

deducting the period during which his motion for reconsideration was
pending, the notice of appeal was filed late. Accordingly, the Fourteenth
Division dismissed the Liquidator's petition.

The Liquidator received the order on September 16, 1992. On September

30, 1992 he moved for reconsideration, but his motion was denied by the
court on October 2, 1992. He received the order denying his Motion for
Reconsideration on October 5, 1992. On October 14, 1992 he filed a Notice
of Appeal from the orders of September 16, 1992 and October 2, 1992. As
in the case of the Union, however, the judge ordered the Notice of Appeal
stricken off the record on the ground that it had been filed without authority
of the Central Bank and beyond 15 days. In his order of October 28, 1992,
the judge directed the execution of his September 11, 1992 order granting
the Stockholders/ Investors' claim.

III.
Present Proceedings
The Union and the Liquidator then separately filed petitions before this
Court.
In G.R. No. 109373 the Union contends that:
1.
The Court of Appeals acted without jurisdiction over the subject
matter or nature of the suit.

II.
Proceedings in the Court of Appeals
The Liquidator filed separate Petitions for Certiorari, Prohibition and
Mandamus in the Court of Appeals to set aside the orders of the trial court
denying his appeal from the orders granting the claims of Union and of the
Stockholders/Investors. The two Divisions of the Court of Appeals, to which
the cases were separately raffled, rendered conflicting rulings.
In its decision of November 17, 1992 in CA-G.R. SP No. 27751 (now G.R.
No. 09373) the Fifth Division 8 held in the case of the Union that the
proceeding before the trial court was a special proceeding and, therefore,
the period for appealing from any decision or final order rendered therein is
30 days. Since the notice of appeal of the Liquidator was filed on the 30th
day of his receipt of the decision granting the Union's claims, the appeal
was brought on time. The Fifth Division, therefore, set aside the orders of
the lower court and directed the latter to give due course to the appeal of
the Liquidator and set the Record on Appeal he had filed for hearing.
On the other hand, on December 16, 1993, the Fourteenth Division 9 ruled
in CA-G.R. SP No. 29351 (now G.R. No. 112991) in the case of the
Stockholders/Investors that a liquidation proceeding is an ordinary action.
Therefore, the period for appealing from any decision or final order
rendered therein is 15 days and that since the Liquidator's appeal notice
was filed on the 23rd day of his receipt of the order appealed from,

2.
The Court of Appeals gravely erred in taking cognizance of the
petition for certiorari filed by Naagas who was without any legal authority
to file it.
3.
The Court of Appeals erred in concluding that the case is a special
proceeding governed by Rules 72 to 109 of the Revised Rules of Court.
4.
The Court of Appeals erred seriously in concluding that the notice of
appeal filed by Naagas was filed on time.
5.
The Court of Appeals erred seriously in declaring that the second
notice of appeal filed on December 23, 1991 by the Solicitor General is a
superfluity.
On the other hand, in G.R. No. 112991 the Liquidator contends that:
1.
The Petition for Assistance in the Liquidation of the Pacific Banking
Corporation s a Special Proceeding case and/or one which allows multiple
appeals, in which case the period of appeal is 30 days and not 15 days from
receipt of the order/judgment appealed from.
2.
Private respondents are not creditors of PaBC but are plain
stockholders whose right to receive payment as such would accrue only
after all the creditors of the insolvent bank have been paid.

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3.
The
claim
of
private
respondents
in
the
amount
of
US$22,531,632.18 is not in the nature of foreign investment as it is
understood in law.

(a)
All appeals, except in habeas corpus cases and in the cases referred
to in paragraph (b) hereof, must be taken within fifteen (15) days from
notice of the judgment, order, resolution or award appealed from.

4.
The claim of private respondents has not been clearly established
and proved.

(b)
In appeals in special proceedings in accordance with Rule 109 of the
Rules of Court and other cases wherein multiple appeals are allowed, the
period of appeals shall be thirty (30) days, a record on appeal being
required.

5.
The issuance of a writ of execution against the assets of PaBC was
made with grave abuse of discretion.
The petitions in these cases must be dismissed.

The Fourteenth Division of the Court of Appeals held that the proceeding is
an ordinary action similar to an action for interpleader under Rule 63. 10
The Fourteenth Division stated:

First. As stated in the beginning, the principal question in these cases is

whether a petition for liquidation under 29 of Rep. Act No. 265 is in the
nature of a special proceeding. If it is, then the period of appeal is 30 days
and the party appealing must, in addition to a notice of appeal, file with the
trial court a record on appeal in order to perfect his appeal. Otherwise, if a
liquidation proceeding is an ordinary action, the period of appeal is 15 days
from notice of the decision or final order appealed from.

The petition filed is akin to an interpleader under Rule 63 of the Rules of

Court where there are conflicting claimants or several claims upon the same
subject matter, a person who claims no interest thereon may file an action
for interpleader to compel the claimants to "interplead" and litigate their
several claims among themselves. (Section I Rule 63).

BP Blg. 129 provides:

39.
Appeals. The period for appeal from final orders, resolutions,
awards, judgments, or decisions of any court in all cases shall be fifteen
(15) days counted from the notice of the final order, resolution, award,
judgment or decision appealed from: Provided, however, that in habeas
corpus cases the period for appeal shall be forty-eight (48) hours from the
notice of the judgment appealed from.

An interpleader is in the category of a special civil action under Rule 62

which, like an ordinary action, may be appealed only within fifteen (15)
days from notice of the judgment or order appealed from. Under Rule 62,
the preceding rules covering ordinary civil actions which are not
inconsistent with or may serve to supplement the provisions of the rule
relating to such civil actions are applicable to special civil actions. This
embraces Rule 41 covering appeals from the regional trial court to the
Court of Appeals.
xxx

No record on appeal shall be required to take an appeal. In lieu thereof, the

entire record shall be transmitted with all the pages prominently numbered
consecutively, together with an index of the contents thereof.
This section shall not apply in appeals in special proceedings and in other
cases wherein multiple appeals are allowed under applicable provisions of
the Rules of Court.
The Interim Rules and Guidelines to implement BP Blg. 129 provides:
19.

Period of Appeals.

xxx

xxx

Thus, under Section 1 Rule 2 of the Rules of Court, an action is defined as

"an ordinary suit in a court of justice by which one party prosecutes another
for the enforcement or protection of a right or the prevention or redress of
a wrong." On the other hand, Section 2 of the same Rule states that "every
other remedy including one to establish the status or right of a party or a
particular fact shall be by special proceeding."
To our mind, from the aforequoted definitions of an action and a special
proceeding, the petition for assistance of the court in the liquidation of an
asset of a bank is not "one to establish the status or right of a party or a
particular fact." Contrary to the submission of the petitioner, the petition is

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not intended to establish the fact of insolvency of the bank. The insolvency
of the bank had already been previously determined by the Central Bank in
accordance with Section 9 of the CB Act before the petition was filed. All
that needs to be done is to liquidate the assets of the bank and thus the
assistance of the respondent court is sought for that purpose.
It should be pointed out that this petition filed is not among the cases
categorized as a special proceeding under Section 1, Rule 72 of the Rules of
Court, nor among the special proceedings that may be appealed under
Section 1, Rule 109 of the Rules.
We disagree with the foregoing view of the Fourteenth Division. Rule 2 of
the Rules of Court provide:
1.
Action defined. Action means an ordinary suit in a court of
justice, by which the party prosecutes another for the enforcement or
protection of a right, or the prevention or redress of a wrong.
2.
Special Proceeding Distinguished. Every other remedy, including
one to establish the status or right of a party or a particular fact, shall be
by special proceeding.
Elucidating the crucial distinction between an ordinary action and a special
proceeding, Chief Justice Moran states:" 11
Action is the act by which one sues another in a court of justice for the
enforcement or protection of a right, or the prevention or redress of a
wrong while special proceeding is the act by which one seeks to establish
the status or right of a party, or a particular fact. Hence, action is
distinguished from special proceeding in that the former is a formal demand
of a right by one against another, while the latter is but a petition for a
declaration of a status, right or fact. Where a party litigant seeks to recover
property from another, his remedy is to file an action. Where his purpose is
to seek the appointment of a guardian for an insane, his remedy is a special
proceeding to establish the fact or status of insanity calling for an
appointment of guardianship.
Considering this distinction, a petition for liquidation of an insolvent
corporation should be classified a special proceeding and not an ordinary
action. Such petition does not seek the enforcement or protection of a right
nor the prevention or redress of a wrong against a party. It does not pray

for affirmative relief for injury arising from a party's wrongful act or
omission nor state a cause of action that can be enforced against any
person.
What it seeks is merely a declaration by the trial court of the corporation's
insolvency so that its creditors may be able to file their claims in the
settlement of the corporation's debts and obligations. Put in another way,
the petition only seeks a declaration of the corporation's debts and
obligations. Put in another way, the petition only seeks a declaration of the
corporation's state of insolvency and the concomitant right of creditors and
the order of payment of their claims in the disposition of the corporation's
assets.
Contrary to the rulings of the Fourteenth Division, liquidation proceedings
do not resemble petitions for interpleader. For one, an action for
interpleader involves claims on a subject matter against a person who has
no interest therein. 12 This is not the case in a liquidation proceeding where
the Liquidator, as representative of the corporation, takes charge of its
assets and liabilities for the benefit of the creditors. 13 He is thus charged
with insuring that the assets of the corporation are paid only to rightful
claimants and in the order of payment provided by law.
Rather, a liquidation proceeding resembles the proceeding for the
settlement of state of deceased persons under Rules 73 to 91 of the Rules
of Court. The two have a common purpose: the determination of all the
assets and the payment of all the debts and liabilities of the insolvent
corporation or the estate. The Liquidator and the administrator or executor
are both charged with the assets for the benefit of the claimants. In both
instances, the liability of the corporation and the estate is not disputed. The
court's concern is with the declaration of creditors and their rights and the
determination of their order of payment.
Furthermore, as in the settlement of estates, multiple appeals are allowed
in proceedings for liquidation of an insolvent corporation. As the Fifth
Division of the Court of Appeals, quoting the Liquidator, correctly noted:
A liquidation proceeding is a single proceeding which consists of a number
of cases properly classified as "claims." It is basically a two-phased
proceeding. The first phase is concerned with the approval and disapproval
of claims. Upon the approval of the petition seeking the assistance of the
proper court in the liquidation of a close entity, all money claims against the

SPECPRO| RULE 72| 5

bank are required to be filed with the liquidation court. This phase may end
with the declaration by the liquidation court that the claim is not proper or
without basis. On the other hand, it may also end with the liquidation court
allowing the claim. In the latter case, the claim shall be classified whether it
is ordinary or preferred, and thereafter included Liquidator. In either case,
the order allowing or disallowing a particular claim is final order, and may
be appealed by the party aggrieved thereby.
The second phase involves the approval by the Court of the distribution
plan prepared by the duly appointed liquidator. The distribution plan
specifies in detail the total amount available for distribution to creditors
whose claim were earlier allowed. The Order finally disposes of the issue of
how much property is available for disposal. Moreover, it ushers in the final
phase of the liquidation proceeding payment of all allowed claims in
accordance with the order of legal priority and the approved distribution
plan.
Verily, the import of the final character of an Order of allowance or
disallowance of a particular claim cannot be overemphasized. It is the
operative fact that constitutes a liquidation proceeding a "case where
multiple appeals are allowed by law." The issuance of an Order which, by its
nature, affects only the particular claims involved, and which may assume
finality if no appeal is made therefrom, ipso facto creates a situation where
multiple appeals are allowed.
A liquidation proceeding is commenced by the filing of a single petition by
the Solicitor General with a court of competent jurisdiction entitled,
"Petition for Assistance in the Liquidation of e.g., Pacific Banking
Corporation. All claims against the insolvent are required to be filed with
the liquidation court. Although the claims are litigated in the same
proceeding, the treatment is individual. Each claim is heard separately. And
the Order issued relative to a particular claim applies only to said claim,
leaving the other claims unaffected, as each claim is considered separate
and distinct from the others. Obviously, in the event that an appeal from an
Order allowing or disallowing a particular claim is made, only said claim is
affected, leaving the others to proceed with their ordinary course. In such
case, the original records of the proceeding are not elevated to the
appellate court. They remain with the liquidation court. In lieu of the
original record, a record of appeal is instead required to be prepared and
transmitted to the appellate court.

Inevitably, multiple appeals are allowed in liquidation proceedings.

Consequently, a record on appeal is necessary in each and every appeal
made. Hence, the period to appeal therefrom should be thirty (30) days, a
record on appeal being required. (Record pp. 162-164).
In G.R. No. 112991 (the case of the Stockholders/Investors), the
Liquidator's notice of appeal was filed on time, having been filed on the
23rd day of receipt of the order granting the claims of the
Stockholders/Investors. However, the Liquidator did not file a record on
appeal with the result that he failed to perfect his appeal. As already stated
a record on appeal is required under the Interim Rules and Guidelines in
special proceedings and for cases where multiple appeals are allowed. The
reason for this is that the several claims are actually separate ones and a
decision or final order with respect to any claim can be appealed.
Necessarily the original record on appeal must remain in the trial court
where other claims may still be pending.
Because of the Liquidator's failure to perfect his appeal, the order granting
the claims of the Stockholders/Investors became final. Consequently. the
Fourteenth Division's decision dismissing the Liquidator's Petition for
Certiorari, Prohibition and Mandamus must be affirmed albeit for a different
reason.
On the other hand, in G.R. No. 109373 (case of the Labor Union), we find
that the Fifth Division correctly granted the Liquidator's Petition for
Certiorari. Prohibition and Mandamus. As already noted, the Liquidator filed
a notice of appeal and a motion for extension to file a record on appeal on
December 10, 1991, i.e., within 30 days of his receipt of the order granting
the Union's claim. Without waiting for the resolution of his motion for
extension, he filed on December 20, 1991 within the extension sought a
record on appeal. Respondent judge thus erred in disallowing the notice on
appeal and denying the Liquidator's motion for extension to file a record on
appeal.
The Fifth Division of the Court of Appeals correctly granted the Liquidator's
Petition for Certiorari, Prohibition and Mandamus and its decision should,
therefore, be affirmed.
Second. In G.R. No. 109373, The Union claims that under 29 of Rep. Act
No. 265, the court merely assists in adjudicating the claims of creditors,
preserves the assets of the institution, and implements the liquidation plan

SPECPRO| RULE 72| 6

approved by the Monetary Board and that, therefore, as representative of

the Monetary Board, the Liquidator cannot question the order of the court
or appeal from it. It contends that since the Monetary Board had previously
admitted PaBC's liability to the laborers by in fact setting aside the amount
of P112,234,292.44 for the payment of their claims, there was nothing else
for the Liquidator to do except to comply with the order of the court.
The Union's contention is untenable. In liquidation proceedings, the function
of the trial court is not limited to assisting in the implementation of the
orders of the Monetary Board. Under the same section (29) of the law
invoked by the Union, the court has authority to set aside the decision of
the Monetary Board "if there is a convincing proof that the action is plainly
arbitrary and made in bad faith." 14 As this Court held in Rural Bank of
Buhi, Inc. v. Court of Appeals: 15
There is no question, that the action of the monetary Board in this regard
may be subject to judicial review. Thus, it has been held that the Court's
may interfere with the Central Bank's exercise of discretion in determining
whether or not a distressed bank shall be supported or liquidated.
Discretion has its limits and has never been held to include arbitrariness,
discrimination or bad faith (Ramos v. Central Bank of the Philippines, 41
SCRA 567 [1971]).
In truth, the Liquidator is the representative not only of the Central Bank
but also of the insolvent bank. Under 28A-29 of Rep. Act No. 265 he acts
in behalf of the bank "personally or through counsel as he may retain, in all
actions or proceedings or against the corporation" and he has authority "to
do whatever may be necessary for these purposes." This authority includes
the power to appeal from the decisions or final orders of the court which he
believes to be contrary to the interest of the bank.
Finally the Union contends that the notice of appeal and motion for
extension of time to file the record on appeal filed in behalf of the Central
Bank was not filed by the office of the Solicitor General as counsel for the
Central Bank. This contention has no merit. On October 22, 1992, as
Assistant Solicitor General Cecilio O. Estoesta informed the trial court in
March 27, 1992, the OSG had previously authorized lawyers of the PDIC to
prepare and sign pleadings in the case. 16 Conformably thereto the Notice
of Appeal and the Motion for Additional Time to submit Record on Appeal
filed were jointly signed by Solicitor Reynaldo I. Saludares in behalf of the
OSG and by lawyers of the PDIC. 17

WHEREFORE, in G.R. No. 109373 and G.R. No 112991, the decisions

appealed from are AFFIRMED.
SO ORDERED.

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G.R. No. 192828

November 28, 2011

RAMON S. CHING AND PO WING PROPERTIES, INC., Petitioners,

vs.
HON. JANSEN R. RODRIGUEZ, in his capacity as Presiding Judge of
the Regional Trial Court of Manila, Branch 6, JOSEPH CHENG, JAIME
CHENG, MERCEDES IGNE AND LUCINA SANTOS, substituted by her
son, EDUARDO S. BALAJADIA, Respondents.
RESOLUTION
REYES, J.:
The Case
Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules
of Court assailing the December 14, 2009 Decision2 and July 8, 2010
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 99856. The
dispositive portion of the assailed Decision reads:
WHEREFORE, in view of all the foregoing premises, judgment is hereby
rendered by us DENYING the petition filed in this case and AFFIRMING the
assailed Orders dated March 15, 2007 and May 16, 2007 issued by the
respondent Judge of the Regional Trial Court (RTC), Branch 6, in Manila in
Civil Case No. 02-105251.4
The assailed Resolution denied the petitioners' Motion for Reconsideration.
The Factual Antecedents
Sometime between November 25, 2002 and December 3, 2002,5 the
respondents filed a Complaint6 against the petitioners and Stronghold
Insurance Company, Global Business Bank, Inc. (formerly PhilBank), Elena
Tiu Del Pilar, Asia Atlantic Resources Ventures, Inc., Registers of Deeds of
Manila and Malabon, and all persons claiming rights or titles from Ramon
Ching (Ramon) and his successors-in-interest.
The Complaint, captioned as one for "Disinheritance, Declaration of Nullity
of Agreement and Waiver, Affidavit of Extra-Judicial Settlement, Deed of
Absolute Sale, Transfer Certificates of Title with Prayer for [the] Issuance of
[a] Temporary Restraining Order and [a] Writ of Preliminary Injunction,"

was docketed as Civil Case No. 02-105251 and raffled to Branch 8 of the
Regional Trial Court of Manila (RTC).
In the Complaint, the respondents alleged the following as causes of action:
First Cause of Action. They are the heirs of Lim San, also known as Antonio
Ching / Tiong Cheng / Ching Cheng Suy (Antonio). Respondents Joseph
Cheng (Joseph) and Jaime Cheng (Jaime) are allegedly the children of
Antonio with his common-law wife, respondent Mercedes Igne (Mercedes).
Respondent Lucina Santos (Lucina) claimed that she was also a commonlaw wife of Antonio. The respondents averred that Ramon misrepresented
himself as Antonio's and Lucina's son when in truth and in fact, he was
adopted and his birth certificate was merely simulated. On July 18, 1996,
Antonio died of a stab wound. Police investigators identified Ramon as the
prime suspect and he now stands as the lone accused in a criminal case for
murder filed against him. Warrants of arrest issued against him have
remained unserved as he is at large. From the foregoing circumstances and
upon the authority of Article 9197 of the New Civil Code (NCC), the
respondents concluded that Ramon can be legally disinherited, hence,
prohibited from receiving any share from the estate of Antonio.
Second Cause of Action. On August 26, 1996, prior to the conclusion of the
police investigations tagging Ramon as the prime suspect in the murder of
Antonio, the former made an inventory of the latter's estate. Ramon
misrepresented that there were only six real estate properties left by
Antonio. The respondents alleged that Ramon had illegally transferred to his
name the titles to the said properties. Further, there are two other parcels
of land, cash and jewelries, plus properties in Hongkong, which were in
Ramon's possession.
Third Cause of Action. Mercedes, being of low educational attainment, was
sweet-talked by Ramon into surrendering to him a Global Business Bank,
Inc. (Global Bank) Certificate of Time Deposit of P4,000,000.00 in the name
of Antonio, and the certificates of title covering two condominium units in
Binondo which were purchased by Antonio using his own money but which
were registered in Ramon's name. Ramon also fraudulently misrepresented
to Joseph, Jaime and Mercedes that they will promptly receive their
complete shares, exclusive of the stocks in Po Wing Properties, Inc. (Po
Wing), from the estate of Antonio. Exerting undue influence, Ramon had
convinced them to execute an Agreement8 and a Waiver9 on August 20,
1996. The terms and conditions stipulated in the Agreement and Waiver,

SPECPRO| RULE 72| 8

specifically, on the payment by Ramon to Joseph, Jaime and Mercedes of

the amount of P22,000,000.00, were not complied with. Further, Lucina was
not informed of the execution of the said instruments and had not received
any amount from Ramon. Hence, the instruments are null and void.
Fourth Cause of Action. Antonio's 40,000 shares in Po Wing, which
constitute 60% of the latter's total capital stock, were illegally transferred
by Ramon to his own name through a forged document of sale executed
after Antonio died. Po Wing owns a ten-storey building in Binondo. Ramon's
claim that he bought the stocks from Antonio before the latter died is
baseless. Further, Lucina's shares in Po Wing had also banished into thin air
through Ramon's machinations.
Fifth Cause of Action. On October 29, 1996, Ramon executed an Affidavit of
Extra-Judicial Settlement of Estate10 adjudicating solely to himself
Antonio's entire estate to the prejudice of the respondents. By virtue of the
said instrument, new Transfer Certificates of Title (TCTs) covering eight real
properties owned by Antonio were issued in Ramon's name. Relative to the
Po Wing shares, the Register of Deeds of Manila had required Ramon to
post a Surety Bond conditioned to answer for whatever claims which may
eventually surface in connection with the said stocks. Co-defendant
Stronghold Insurance Company issued the bond in Ramon's behalf.
Sixth Cause of Action. Ramon sold Antonio's two parcels of land in Navotas
to co-defendant Asia Atlantic Business Ventures, Inc. Another parcel of
land, which was part of Antonio's estate, was sold by Ramon to codefendant Elena Tiu Del Pilar at an unreasonably low price. By reason of
Ramon's lack of authority to dispose of any part of Antonio's estate, the
conveyances are null and void ab initio.
Since Ramon is at large, his wife, Belen Dy Tan Ching, now manages
Antonio's estate. She has no intent to convey to the respondents their
shares in the estate of Antonio.
The respondents thus prayed for the following in their Complaint:
1. x x x a temporary restraining order be issued restraining the defendant
RAMON CHING and/or his attorney-in-fact Belen Dy Tan Ching from
disposing, selling or alienating any property that belongs to the estate of
the deceased ANTONIO CHING;

xxx
4. x x x
a.) Declaring that the defendant RAMON CHING who murdered his father
ANTONIO CHING disqualified as heir and from inheriting to (sic) the estate
of his father;
b.) Declaring the nullity of the defendant RAMON CHING transfer (sic) of
the six [6] parcels of land from the name of his father ANTONIO CHING to
his name covered by TCT No. x x x;
c.) Declaring the nullity of the AGREEMENT and WAIVER executed by
plaintiffs x x x in favor of x x x RAMON CHING for being patently immoral,
invalid, illegal, simulated and (sic) sham;
d.) Declaring the nullity of the transfer of the shares of stocks at (sic) PO
WING from the names of ANTONIO CHING and LUCINA SANTOS to the
defendant ANTONIO CHING's name for having been illegally procured
through the falsification of their signatures in the document purporting the
transfer thereof;
e.) Declaring the nullity and to have no force and effect the AFFIDAVIT OF
SETTLEMENT OF ESTATE executed by x x x RAMON CHING for being
contrary to law and existing jurisprudence;
f.) Declaring the nullity of the DEED OF SALES (sic) executed by x x x
RAMON CHING (i) over two (2) parcels of land x x x to defendant ASIA
ATLANTIC BUSINESS VENTURES, Inc.; and (ii) one (1) parcel of land x x x
sold to x x x ELENA TIU DEL PILAR for having illegally procured the
ownership and titles of the above properties;
x x x.11
The petitioners filed with the RTC a Motion to Dismiss12 alleging forum
shopping, litis pendentia, res judicata and the respondents as not being the
real parties in interest.
On July 30, 2004, the RTC issued an Omnibus Order13 denying the
petitioners' Motion to Dismiss.

SPECPRO| RULE 72| 9

The respondents filed an Amended Complaint14 dated April 7, 2005

impleading Metrobank as the successor-in-interest of co-defendant Global
Bank. The Amended Complaint also added a seventh cause of action
relative to the existence of a Certificate of Premium Plus Acquisition (CPPA)
in the amount of P4,000,000.00 originally issued by PhilBank to Antonio.
The respondents prayed that they be declared as the rightful owners of the
CPPA and that it be immediately released to them. Alternatively, the
respondents prayed for the issuance of a hold order relative to the CPPA to
preserve it during the pendency of the case.
On April 22, 2005, the petitioners filed their Consolidated Answer with
Counterclaim.15
On October 28, 2005, the RTC issued an Order16 admitting the
respondents' Amended Complaint. The RTC stressed that Metrobank had
already filed Manifestations admitting that as successor-in-interest of Global
Bank, it now possesses custody of Antonio's deposits. Metrobank expressed
willingness to abide by any court order as regards the disposition of
Antonio's deposits. The petitioners' Motion for Reconsideration filed to assail
the aforecited Order was denied by the RTC on May 3, 2006.
On May 29, 2006, the petitioners filed their Consolidated Answer with
Counterclaim to the respondents' Amended Complaint.
On August 11, 2006, the RTC issued a pre-trial order.17
On January 18, 2007, the petitioners filed a Motion to Dismiss18 the
respondents' Amended Complaint on the alleged ground of the RTC's lack of
jurisdiction over the subject matter of the Complaint. The petitioners
argued that since the Amended Complaint sought the release of the CPPA to
the respondents, the latter's declaration as heirs of Antonio, and the
propriety of Ramon's disinheritance, the suit partakes of the nature of a
special proceeding and not an ordinary action for declaration of nullity.
Hence, jurisdiction pertains to a probate or intestate court and not to the
RTC acting as an ordinary court.
On March 15, 2007, the RTC issued an Order19 denying the petitioners'
Motion to Dismiss on grounds:
In the case at bar, an examination of the Complaint would disclose that the
action delves mainly on the question of ownership of the properties

described in the Complaint which can be properly settled in an ordinary civil

action. And as pointed out by the defendants, the action seeks to declare
the nullity of the Agreement, Waiver, Affidavit of Extra-Judicial Settlement,
Deed of Absolute Sale, Transfer Certificates of Title, which were all allegedly
executed by defendant Ramon Ching to defraud the plaintiffs. The relief of
establishing the status of the plaintiffs which could have translated this
action into a special proceeding was nowhere stated in the Amended
Complaint. With regard [to] the prayer to declare the plaintiffs as the
rightful owner[s] of the CPPA and that the same be immediately released to
them, in itself poses an issue of ownership which must be proved by
plaintiffs by substantial evidence. And as emphasized by the plaintiffs, the
Amended Complaint was intended to implead Metrobank as a co-defendant.
As regards the issue of disinheritance, the court notes that during the Pretrial of this case, one of the issues raised by the defendants Ramon Ching
and Po Wing Properties is: Whether or not there can be disinheritance in
intestate succession? Whether or not defendant Ramon Ching can be legally
disinherited from the estate of his father? To the mind of the Court, the
issue of disinheritance, which is one of the causes of action in the
Complaint, can be fully settled after a trial on the merits. And at this stage,
it has not been sufficiently established whether or not there is a will.20
(Emphasis supplied.)
The above Order, and a subsequent Order dated May 16, 2007 denying the
petitioners' Motion for Reconsideration, became the subjects of a petition
for certiorari filed with the CA. The petition, docketed as CA-G.R. SP No.
99856, raised the issue of whether or not the RTC gravely abused its
discretion when it denied the petitioners' Motion to Dismiss despite the fact
that the Amended Complaint sought to establish the status or rights of the
respondents which subjects are within the ambit of a special proceeding.
On December 14, 2009, the CA rendered the now assailed Decision21
denying the petition for certiorari on grounds:
Our in-depth assessment of the condensed allegations supporting the
causes of action of the amended complaint induced us to infer that nothing
in the said complaint shows that the action of the private respondents
should be threshed out in a special proceeding, it appearing that their
allegations were substantially for the enforcement of their rights against the
alleged fraudulent acts committed by the petitioner Ramon Ching. The
private respondents also instituted the said amended complaint in order to

SPECPRO| RULE 72| 10

protect them from the consequence of the fraudulent acts of Ramon Ching
by seeking to disqualify Ramon Ching from inheriting from Antonio Ching as
well as to enjoin him from disposing or alienating the subject properties,
including the P4 Million deposit with Metrobank. The intestate or probate
court has no jurisdiction to adjudicate such issues, which must be
submitted to the court in the exercise of its general jurisdiction as a
regional trial court. Furthermore, we agree with the trial court that the
probate court could not take cognizance of the prayer to disinherit Ramon
Ching, given the undisputed fact that there was no will to be contested in a
probate court.
The petition at bench apparently cavils the subject amended complaint and
complicates the issue of jurisdiction by reiterating the grounds or defenses
set up in the petitioners' earlier pleadings. Notwithstanding, the jurisdiction
of the court over the subject matter is determined by the allegations of the
complaint without regard to whether or not the private respondents
(plaintiffs) are entitled to recover upon all or some of the causes of action
asserted therein. In this regard, the jurisdiction of the court does not
depend upon the defenses pleaded in the answer or in the motion to
dismiss, lest the question of jurisdiction would almost entirely depend upon
the petitioners (defendants).22 Hence, we focus our resolution on the issue
of jurisdiction on the allegations in the amended complaint and not on the
defenses pleaded in the motion to dismiss or in the subsequent pleadings of
the petitioners.
In fine, under the circumstances of the present case, there being no
compelling reason to still subject the action of the petitioners in a special
proceeding since the nullification of the subject documents could be
achieved in the civil case, the lower court should proceed to evaluate the
evidence of the parties and render a decision thereon upon the issues that
it defined during the pre-trial in Civil Case No. 02-105251.23 (emphasis
supplied)

Whether or not the RTC should have granted the Motion to Dismiss filed by
the PETITIONERS on the alleged ground of the RTC's lack of jurisdiction
over the subject matter of the Amended Complaint, to wit, (a) filiations with
Antonio of Ramon, Jaime and Joseph; (b) rights of common-law wives,
Lucina and Mercedes, to be considered as heirs of Antonio; (c)
determination of the extent of Antonio's estate; and (d) other matters
which can only be resolved in a special proceeding and not in an ordinary
civil action.
The petitioners argue that only a probate court has the authority to
determine (a) who are the heirs of a decedent; (b) the validity of a waiver
of hereditary rights; (c) the status of each heir; and (d) whether the
property in the inventory is conjugal or the exclusive property of the
deceased spouse.26 Further, the extent of Antonio's estate, the status of
the contending parties and the respondents' alleged entitlement as heirs to
receive the proceeds of Antonio's CPPA now in Metrobank's custody are
matters which are more appropriately the subjects of a special proceeding
and not of an ordinary civil action.
The respondents opposed27 the instant petition claiming that the
petitioners are engaged in forum shopping. Specifically, G.R. Nos.
17550728 and 183840,29 both involving the contending parties in the
instant petition were filed by the petitioners and are currently pending
before this Court. Further, in Mendoza v. Hon. Teh,30 the SC declared that
whether a particular matter should be resolved by the RTC in the exercise
of its general jurisdiction or its limited probate jurisdiction, is not a
jurisdictional issue but a mere question of procedure. Besides, the
petitioners, having validly submitted themselves to the jurisdiction of the
RTC and having actively participated in the trial of the case, are already
estopped from challenging the RTC's jurisdiction over the respondents'
Complaint and Amended Complaint.31
The Court's Ruling

The petitioners' Motion for Reconsideration was denied by the CA through a

Resolution24 issued on July 8, 2010.
The Issue
The instant Petition for Review on Certiorari25 is anchored on the issue of:

We resolve to deny the instant petition.

The petitioners failed to comply with a lawful order of this Court directing
them to file their reply to the respondents' Comment/Opposition to the
instant Petition. While the prescribed period to comply expired on March 15,
2011, the petitioners filed their Manifestation that they will no longer file a
reply only on October 10, 2011 or after the lapse of almost seven months.

SPECPRO| RULE 72| 11

Further, no reversible errors were committed by the RTC and the CA when
they both ruled that the denial of the petitioners' second motion to dismiss
Civil Case No. 02-105251 was proper.
Even without delving into the procedural allegations of the respondents that
the petitioners engaged in forum shopping and are already estopped from
questioning the RTC's jurisdiction after having validly submitted to it when
the latter participated in the proceedings, the denial of the instant Petition
is still in order. Although the respondents' Complaint and Amended
Complaint sought, among others, the disinheritance of Ramon and the
release in favor of the respondents of the CPPA now under Metrobank's
custody, Civil Case No. 02-105251 remains to be an ordinary civil action,
and not a special proceeding pertaining to a settlement court.
An action for reconveyance and annulment of title 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, which concomitantly requires the
application of specific rules as provided for in the Rules of Court.32 A
special proceeding is a remedy by which a party seeks to establish a status,
a right, or a particular fact.33 It is distinguished from an ordinary civil
action where a party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong.34 To initiate a special
proceeding, a petition and not a complaint should be filed.
Under Article 916 of the NCC, disinheritance can be effected only through a
will wherein the legal cause therefor shall be specified. This Court agrees
with the RTC and the CA that while the respondents in their Complaint and
Amended Complaint sought the disinheritance of Ramon, no will or any
instrument supposedly effecting the disposition of Antonio's estate was ever
mentioned. Hence, despite the prayer for Ramon's disinheritance, Civil Case
No. 02-105251 does not partake of the nature of a special proceeding and
does not call for the probate court's exercise of its limited jurisdiction.
The petitioners also argue that the prayers in the Amended Complaint,
seeking the release in favor of the respondents of the CPPA under
Metrobank's custody and the nullification of the instruments subject of the
complaint, necessarily require the determination of the respondents' status
as Antonio's heirs.

It bears stressing that what the respondents prayed for was that they be
declared as the rightful owners of the CPPA which was in Mercedes'
possession prior to the execution of the Agreement and Waiver. The
respondents also prayed for the alternative relief of securing the issuance
by the RTC of a hold order relative to the CPPA to preserve Antonio's
deposits with Metrobank during the pendency of the case. It can thus be
said that the respondents' prayer relative to the CPPA was premised on
Mercedes' prior possession of and their alleged collective ownership of the
same, and not on the declaration of their status as Antonio's heirs. Further,
it also has to be emphasized that the respondents were parties to the
execution of the Agreement35 and Waiver36 prayed to be nullified. Hence,
even without the necessity of being declared as heirs of Antonio, the
respondents have the standing to seek for the nullification of the
instruments in the light of their claims that there was no consideration for
their execution, and that Ramon exercised undue influence and committed
fraud against them. Consequently, the respondents then claimed that the
Affidavit of Extra-Judicial Settlement of Antonios estate executed by
Ramon, and the TCTs issued upon the authority of the said affidavit, are
null and void as well. Ramon's averment that a resolution of the issues
raised shall first require a declaration of the respondents' status as heirs is
a mere defense which is not determinative of which court shall properly
exercise jurisdiction.
In Marjorie Cadimas v. Marites Carrion and Gemma Hugo,37 the Court
declared:
It is an elementary rule of procedural law that jurisdiction of the court over
the subject matter is determined by the allegations of the complaint
irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein. As a necessary consequence, the
jurisdiction of the court cannot be made to depend upon the defenses set
up in the answer or upon the motion to dismiss, for otherwise, the question
of jurisdiction would almost entirely depend upon the defendant. What
determines the jurisdiction of the court is the nature of the action pleaded
as appearing from the allegations in the complaint. The averments in the
complaint and the character of the relief sought are the matters to be
consulted.1wphi1
In sum, this Court agrees with the CA that the nullification of the
documents subject of Civil Case No. 02-105251 could be achieved in an
ordinary civil action, which in this specific case was instituted to protect the

SPECPRO| RULE 72| 12

respondents from the supposedly fraudulent acts of Ramon. In the event

that the RTC will find grounds to grant the reliefs prayed for by the
respondents, the only consequence will be the reversion of the properties
subject of the dispute to the estate of Antonio. Civil Case No. 02-105251
was not instituted to conclusively resolve the issues relating to the
administration, liquidation and distribution of Antonio's estate, hence, not
the proper subject of a special proceeding for the settlement of the estate
of a deceased person under Rules 73-91 of the Rules of Court.
The respondents' resort to an ordinary civil action before the RTC may not
be strategically sound, because a settlement proceeding should thereafter
still follow, if their intent is to recover from Ramon the properties alleged to
have been illegally transferred in his name. Be that as it may, the RTC, in
the exercise of its general jurisdiction, cannot be restrained from taking
cognizance of respondents' Complaint and Amended Complaint as the
issues raised and the prayers indicated therein are matters which need not
be threshed out in a special proceeding.
WHEREFORE, the instant petition is DENIED. The petitioners' (a) Opposition
to the respondents' Motion to Admit Substitution of Party;38 and (b)
Manifestation39 through counsel that they will no longer file a reply to the
respondents' Comment/Opposition to the instant petition are NOTED.
SO ORDERED.

G.R. No. 168913

March 14, 2007

SPECPRO| RULE 72| 13

ROLANDO
TING, Petitioner,
vs.
HEIRS OF DIEGO LIRIO, namely: FLORA A. LIRIO, AMELIA L.
ROSKA, AURORA L. ABEJO, ALICIA L. DUNQUE, ADELAIDA L. DAVID,
EFREN A. LIRIO and JOCELYN ANABELLE L. ALCOVER, Respondents.
DECISION
CARPIO MORALES, J.:
In a Decision of December 10, 1976 in Land Registration Case (LRC) No. N983, then Judge Alfredo Marigomen of the then Court of First Instance of
Cebu, Branch 7, granted the application filed by the Spouses Diego Lirio
and Flora Atienza for registration of title to Lot No. 18281 (the lot) of the
Cebu Cadastral 12 Extension, Plan Rs-07-000787.
The decision in LRC No. N-983 became final and executory on January 29,
1977. Judge Marigomen thereafter issued an order of November 10, 1982
directing the Land Registration Commission to issue the corresponding
decree of registration and the certificate of title in favor of the spouses
Lirio.
On February 12, 1997, Rolando Ting (petitioner) filed with the Regional Trial
Court (RTC) of Cebu an application for registration of title to the same lot.
The application was docketed as LRC No. 1437-N.1
The herein respondents, heirs of Diego Lirio, namely: Flora A. Lirio, Amelia
L. Roska, Aurora L. Abejo, Alicia L. Dunque, Adelaida L. David, Efren A. Lirio
and Jocelyn Anabelle L. Alcover, who were afforded the opportunity to file
an opposition to petitioners application by Branch 21 of the Cebu RTC, filed
their Answer2 calling attention to the December 10, 1976 decision in LRC
No. N-983 which had become final and executory on January 29, 1977 and
which, they argued, barred the filing of petitioners application on the
ground of res judicata.
After hearing the respective sides of the parties, Branch 21 of the Cebu
RTC, on motion of respondents, dismissed petitioners application on the
ground of res judicata. 31vvphi1.nt

Hence, the present petition for review on certiorari which raises the sole
issue of whether the decision in LRC No. N-983 constitutes res judicata in
LRC No. 1437-N.
Petitioner argues that although the decision in LRC No. N-983 had become
final and executory on January 29, 1977, no decree of registration has been
issued by the Land Registration Authority (LRA); 4 it was only on July 26,
2003 that the "extinct" decision belatedly surfaced as basis of respondents
motion to dismiss LRC No. 1437-N; 5and as no action for revival of the said
decision was filed by respondents after the lapse of the ten-year
prescriptive period, "the cause of action in the dormant judgment pass[d]
into extinction."6
Petitioner thus concludes that an "extinct" judgment cannot be the basis
of res judicata.7
The petition fails.
Section 30 of Presidential Decree No. 1529 or the Property Registration
Decree provides:
SEC. 30. When judgment becomes final; duty to cause issuance of
decree.
The
judgment
rendered
in
a land
registration
proceeding becomes final upon the expiration of thirty days 8 to be
counted from the date of receipt of notice of the judgment. An appeal may
be taken from the judgment of the court as in ordinary civil cases.
After judgment has become final and executory, it shall devolve upon the
court to forthwith issue an order in accordance with Section 39 of this
Decree to the Commissioner for the issuance of the decree of registration
and the corresponding certificate of title in favor of the person adjudged
entitled to registration. (Emphasis supplied)
In a registration proceeding instituted for the registration of a private land,
with or without opposition, the judgment of the court confirming the title of
the applicant or oppositor, as the case may be, and ordering its registration
in his name constitutes, when final, res judicata against the whole world.9 It
becomes final when no appeal within the reglementary period is taken from
a judgment of confirmation and registration.10

SPECPRO| RULE 72| 14

The land registration proceedings being in rem, the land registration courts
approval in LRC No. N-983 of spouses Diego Lirio and Flora Atienzas
application for registration of the lot settled its ownership, and is binding on
the whole world including petitioner.

is barred by the statute of limitations, a judgment may be enforced by

action. The revived judgment may also be enforced by motion within five
(5) years from the date of its entry and thereafter by action before it is
barred by the statute of limitations[,]

Explaining his position that the December 10, 1976 Decision in LRC No. N983 had become "extinct," petitioner advances that the LRA has not issued
the decree of registration, a certain Engr. Rafaela Belleza, Chief of the
Survey Assistance Section, Land Management Services, Department of
Environment and Natural Resources (DENR), Region 7, Cebu City having
claimed that the survey of the Cebu Cadastral Extension is erroneous and
all resurvey within the Cebu Cadastral extension must first be approved by
the Land Management Services of

the December 10, 1976 decision became "extinct" in light of the failure of
respondents and/or of their predecessors-in-interest to execute the same
within the prescriptive period, the same does not lie.

the DENR, Region 7, Cebu City before said resurvey may be used in court;
and that the spouses Lirio did not comply with the said requirement for they
instead submitted to the court a mere special work order.11
There is, however, no showing that the LRA credited the alleged claim of
Engineer Belleza and that it reported such claim to the land registration
court for appropriate action or reconsideration of the decision which was its
duty.
Petitioners insist that the duty of the respondent land registration officials
to issue the decree is purely ministerial. It is ministerial in the sense that
they act under the orders of the court and the decree must be in conformity
with the decision of the court and with the data found in the record, and
they have no discretion in the matter. However, if they are in doubt
upon any point in relation to the preparation and issuance of the
decree, it is their duty to refer the matter to the court. They act, in
this respect, as officials of the court and not as administrative
officials, and their act is the act of the court. They are specifically
called upon to "extend assistance to courts in ordinary and
cadastral land registration proceedings."12 (Emphasis supplied)
As for petitioners claim that under Section 6, Rule 39 of the Rules of Court
reading:
SEC. 6. Execution by motion or by independent action. A final and
executory judgment or order may be executed on motion within five (5)
years from the date of its entry. After the lapse of such time, and before it

Sta. Ana v. Menla, et al.13 enunciates the raison detre why Section 6, Rule
39 does not apply in land registration proceedings, viz:
THAT THE LOWER COURT ERRED IN ORDERING THAT THE DECISION
RENDERED IN THIS LAND REGISTRATION CASE ON NOVEMBER 28, 1931
OR TWENTY SIX YEARS AGO, HAS NOT YET BECOME FINAL AND
UNENFORCEABLE.
We fail to understand the arguments of the appellant in support of the
above assignment, except in so far as it supports his theory that after a
decision in a land registration case has become final, it may not be enforced
after the lapse of a period of 10 years, except by another proceeding to
enforce the judgment or decision. Authority for this theory is the provision
in the Rules of Court to the effect that judgment may be enforced within 5
years by motion, and after five years but within 10 years, by an action
(Sec. 6, Rule 39.) This provision of the Rules refers to civil actions
and is not applicable to special proceedings, such as a land
registration case. This is so because a party in a civil action must
immediately enforce a judgment that is secured as against the
adverse party, and his failure to act to enforce the same within a
reasonable time as provided in the Rules makes the decision
unenforceable against the losing party. In special proceedings the
purpose is to establish a status, condition or fact; in land
registration proceedings, the ownership by a person of a parcel of
land is sought to be established. After the ownership has been
proved and confirmed by judicial declaration, no further proceeding
to enforce said ownership is necessary, except when the adverse or
losing party had been in possession of the land and the winning
party desires to oust him therefrom.
Furthermore, there is no provision in the Land Registration Act similar to
Sec. 6, Rule 39, regarding the execution of a judgment in a civil action,

SPECPRO| RULE 72| 15

except the proceedings to place the winner in possession by virtue of a writ

of possession. The decision in a land registration case, unless the adverse
or losing party is in possession, becomes final without any further action,
upon the expiration of the period for perfecting an appeal.
x x x x (Emphasis and underscoring supplied)
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED.
Costs against petitioner, Rolando Ting.
SO ORDERED.

SPECPRO| RULE 72| 16

G.R. No. L-18799

March 31, 1964

HON. JOSE F. FERNANDEZ, Judge of the Court of First Instance,

Negros Occidental,
ASUNCION MARAVILLA, ET AL., petitioners,
vs.
HERMINIO MARAVILLA, respondent.
Jose Gutierrez David, A. Aveto, A. Mirasol and P. C. Ramos for
petitioners.
Paredes, Poblador, Cruz and Nazareno for respondent.
BARRERA, J.:
Petitioners herein appeal by certiorari from the decision of the Court of
Appeals (in CA-G.R. No. 27200-R) wherein, over their objection, raising the
question of jurisdiction petition, the appellate court took cognizance of the
petition for certiorari and prohibition filed by Herminio Maravilla and, in
consequence thereof, set aside the appointment of petitioner Eliezar Lopez
as a special co-administrator of the estate of the deceased Digna Maravilla.
The pertinent antecedent facts are as follows:
On August 25, 1958, respondent Herminio Maravilla filed with he Court of
First Instance of Negros Occidental a petition for probate of the will (Spec.
Proc. No. 4977) of his deceased wife Digna Maravilla who died on August 12
of that same year. In the will the surviving spouse was named as the
universal heir and executor.
On September 30, 1958, Pedro, Asuncion, and Regina Maravilla (brother
and sisters of the deceased Digna Maravilla) filed an opposition to the
probate of the will, on the ground, inter alia, that the will was not signed on
each page by the testatrix in the presence of the attesting witnesses and of
one another.
On March 16, 1959, on motion of respondent Herminio, which was opposed
by Pedro, Asuncion, and Regina Maravilla, the court issued an order
appointing him special administrator of the estate of the deceased, for the
reason that:
... all the properties subject of the will are conjugal properties of the
petitioner and his late wife, Digna Maravilla, and before any partition of the

conjugal property is done, the Court cannot pinpoint which of the property
subject of the Will belongs to Digna Maravilla, exclusively, that shall be
administered by the special administrator. Hence, although it is true that
the petitioner Herminio Maravilla has an adverse interest in the property
subject of the Will, the Court finds it impossible for the present time to
appoint any person other than the petitioner as special administrator of the
property until after the partition is ordered, for the reason that the
properties mentioned in the Will are in the name of the petitioner who is the
surviving spouse of the deceased.
On February 8, 1960, the court rendered a decision denying probate of the
will, as it was not duly signed on each page by the testatrix in the presence
of the attesting witnesses and of one another.
On February 17, 1960, Pedro, Asuncion, and Regina Maravilla, filed with the
court a petition for appointment of Eliezar Lopez (son of Asuncion Maravilla)
as special co-administrator to protect their interests, on the ground that the
will, having been denied probate, they are the legal heirs of the decedent.
Said petition was heard on February 20, at which hearing, respondent's
counsel orally moved for postponement, because respondent's principal
counsel (Salonga) had not been notified and was not present. The court
ordered presentation of oral evidence, consisting of the testimonies of
Eliezar Lopez, and Regina and Francisco Maravilla.
On February 26, 1960, respondent filed with the court his notice of appeal,
appeal bond and record on appeal, from the decision denying probate of the
will. Some devisees under the will, likewise, appealed from said decision.
On February 25, 1960, Pedro, Asuncion, and Regina Maravilla, filed with the
court a petition for the removal of respondent as special administrator, as
he failed to file an inventory within 3 months from his appointment and
qualification as special administrator, as provided for in Section 1, Rule 84,
of the Rules of Court. To this petition, respondent filed an opposition, on the
ground that said provision of the Rules of Court does not apply to a special
administrator, and an inventory had already been submitted by him, before
said petition for his removal was filed.1wph1.t
On February 27, 1960, the devisees Conchita and Rose Marie Kohlhaas filed
with the court a petition for appointment of Conchita as special coadministratrix. Devisee Adelina Sajo, likewise, filed a similar petition
February 29.

SPECPRO| RULE 72| 17

On March 5, 1960, the court held a joint hearing the (1) petition to appoint
Eliezar Lopez as special administrator, (2) approval of respondent's record
appeal and appeal bond, (3) petition to remove respondent as special
administrator, (4) petition to appoint Conchita Kohlhaas as special coadministratrix, and (5) petition to appoint Adelina Sajo as special coadministrator. At said hearing, respondent objected to the appointment of
Eliezar Lopez was special co-administratrix, on grounds that (a) the law
allows only one special co-administrator (b) the order of March 16, 1959
estops the court from appointing Eliezar Lopez as special co-administrator
(c) such appointment is unfair to respondent, because owns at least 3/4 of
the whole property, conjugal nature, which would be subjected to the
administrate of a stranger, and (d) a deadlock between two special
administrators would ruin the management of the property, including those
of respondent. On cross-examination of Eliezar Lopez, respondent's counsel
elicited the facts that (1) Lopez was employed full time in the PCAPE, with
office in Manila. and could not discharge the functions of a co-administrator,
and (2) there was merely intention on Lopez part to resign from office.
After said joint hearing, the court appointed Eliezar Lopez as special coadministrator in an order dictated open court, to protect the interests of
Pedro, Asuncion and Regina Maravilla.
From this order, respondent, on March 7, 1960, filed with the Court of
Appeals a petition for certiorari and prohibition (with prayer for preliminary
injunction) to annul the order appointing Eliezar Lopez as special coadministrator, and to prohibit the probate court from further proceeding
with the petition for the removal of respondent as special administrator. The
Court of Appeals issued a writ of preliminary injunction on March 9, 1960
which was amended on March 11, 1960 to make it more specific.
On October 6, 1960, petitioners Regina Maravilla, et al. filed with the Court
of Appeals a petition to certify the case to the Supreme Court, on the
grounds that the principal amount in controversy in this case exceeds
P200,000.00, and the writs (of certiorari and prohibition) prayed for are not
in aid of appellate jurisdiction of the Court of Appeals, since the probate
case is not on appeal before it. To this petition, respondent filed an
opposition. on the grounds that the amount in controversy is less than
P200,000.00 and the decision of the probate court (of February 8, 1960) is
now on appeal before the Court of Appeals (CA-G.R. No. 27478-R); hence,
the writ prayed for is in aid of its appellate jurisdiction, and the present

case does not involve title to or possession of real estate exceeding in value
P200,000.00.1
On May 16, 1961, the Court of Appeals rendered a decision granting the
writs (certiorari and prohibition) prayed for by respondent, and declaring
null and void the appointment of Eliezar Lopez as special co-administrator.
Petitioners Regina Maravilla, et al. filed a motion for reconsideration of said
decision, but it was denied by the Court of Appeals. Hence, this appeal.
Petitioners claim that the Court of Appeals had no jurisdiction to issue the
writs of certiorari and prohibition prayed for by respondent, the same not
being in aid of its appellate jurisdiction.
We agree with petitioners. The Court of Appeals, in the decision appealed
from, assumed jurisdiction over the present case on the theory that "the
amount in controversy relative to the appointment of Eliezar Lopez as
special co-administrator to protect the interests of respondents (herein
petitioners) is only P90,000.00 more or less, i.e., one fourth of the conjugal
property" (of respondent and the deceased Digna Maravilla) which, is per
inventory submitted by respondent as special administrator is valued at
P362,424.90. This theory is untenable. Note that the proceedings had on
the appointment of Eliezar Lopez as special co-administrator are merely
incidental to the probate or testate proceedings of the deceased Digna
Maravilla presently on appeal before the Court of Appeals (CA-G.R. No.
27478-R) where petitioners' motion to elevate the same to the Supreme
Court, on the ground that the amount herein involved is within the latter's
exclusive jurisdiction, is still pending, resolution. That the Court of Appeals
has no appellate jurisdiction over said testate proceedings cannot be
doubted, considering that the properties therein involved are valued at
P362,424,90, as per inventory of the special administrator.
Under Section 2, Rule 75, of the Rules of Court, the property to be
administered and liquidated in testate or intestate proceedings of the
deceased spouse is, not only that part of the conjugal estate pertaining to
the deceased spouse, but the entire conjugal estate. This Court has already
held that even if the deceased had left no debts, upon the dissolution of the
marriage by the death of the husband or wife, the community property shall
be inventoried, administered, and liquidated in the testate or intestate
proceedings of the deceased spouse (Vda. de Roxas v. Pecson, et al., L2211, December 20, 1948; 82 Phil. 407; see also Vda. de Chantengco v.

SPECPRO| RULE 72| 18

Chantengco, et al., L-10663, October 31, 1958). In a number of cases

where appeal was taken from an order of a probate court disallowing a will,
this Court, in effect, recognized that the amount or value involved or in
controversy therein is that of the entire estate (Suntay v. Suntay, L-3087,
July 31, 1954, 50 O.G. 5321; Vano v. Vda. de Garces, et al., L-6303, June
30, 1954, 50 O.G. 3045). Not having appellate jurisdiction over the
proceedings in probate (CA-G.R. No. 27478-R), considering that the
amount involved therein is more than P200,000.00, the Court of Appeals
cannot also have original jurisdiction to grant the writs of certiorari and
prohibition prayed for by respondent in the instant case, which are merely
incidental thereto.
In the United States, the rule is that "proceedings in probate are appealable
where the amount or value involved is reducible to a pecuniary standard,
the amount involved being either the appellant's interest or the value of the
entire estate according as the issues on appeal involve only the appellant's
rights or the entire administration of the estate. ... In a contest for
administration of an estate the amount or value of the assets of the estate
is the amount in controversy for purposes of appeal." (4 C.J.S. 204). In line
with this ruling, it is to be observed that respondent's interest as appellant
in the probate proceedings (CA-G.R. No. 27478-R) is, according to his
theory, the whole estate amounting to P362,424.90, or, at least more than
3/4 thereof, or approximately P270,000.00. Such interest, reduced to a
pecuniary standard on the basis of the inventory, is the amount or value of
the matter in controversy, and such amount being more than P200,000.00,
it follows that the appeal taken in said proceedings falls within the exclusive
jurisdiction of the Supreme Court and should, therefore, be certified to it
pursuant to Section 17 of the Judiciary Act of 1948, as amended.
Note also that the present proceedings under review were for the
annulment of the appointment of Eliezar Lopez as special co-administrator
and to restrain the probate court from removing respondent as special
administrator. It is therefore, a contest for the administration of the estate
and, consequently, the amount or value of the assets of the whole estate is
the value in controversy (4 C.J.S. 204). It appearing that the value of the
estate in dispute is much more than P200,000.00, the Court of Appeals
clearly had no original jurisdiction to issue the writs in question.
The Court of Appeals, in the decision appealed from, arrived at the amount
of "P90,000.00 more or less", as the amount involved in the case, upon
authority of the case of Vistan v. Archbishop (73 Phil. 20). But this case is

inapplicable, as it does not refer to the question of administration of the

estate, nor to an order denying probate of a will, but only to the recovery of
a particular legacy consisting of the rentals of a fishpond belonging to the
estate. In an analogous case involving the administration of a trust fund,
the United States Supreme Court held:
Where the trust fund administered and ordered to be distributed by the
circuit court, in a suit to compel the stockholders of a corporation to pay
their subscriptions to stock to realize the fund, amounts to more than
$5,000.00, this court has jurisdiction of the appeal, which is not affected by
the fact that the amounts decreed to some of the creditors are less than
that sum (Handly et al. vs. Stutz, et al., 34 Law Ed. 706).
Respondent also contends that appeals in special proceedings, as
distinguished from ordinary civil cases, are within the exclusive appellate
jurisdiction of the Court of Appeals, since they are not enumerated in
Section 17 of the Judiciary Act, as amended. Granting, arguendo, that a
special proceeding is not a civil action, it has never been decided that a
special proceeding is not a "civil case" (Carpenter v. Jones, 121 Cal. 362;
58 p. 842). On the other hand, it has been held that the term "civil case"
includes special proceedings (Herkimer v. Keeler, 100 Iowa 680, N.W. 178).
Moreover, Section 2, Rule 73, of the Rules of Court provides that the rules
on ordinary civil actions are applicable in special proceedings where they
are not inconsistent with, or when they may serve to supplement the
provisions relating to special proceedings. Consequently, the procedure of
appeal is the same in civil actions as in special proceedings. (See Moran's
Comments on the Rules of Court, Vol. II, 1957 Ed., p. 326.)
The cases cited by respondent where this Court ruled that the separate
total claim of the parties and not the combined claims against each other
determine the appellate jurisdictional amount, are not applicable to, the
instant case, because Section 2, Rule 75 of the Rules of Court is explicit
that the amount or value involved or in controversy in probate proceedings
is that of the entire estate. Assuming, arguendo, that the rule in the cases
cited by respondent is here applicable, it should be noted that respondent
claims the whole estate of at least more than 3/4 thereof. Said claim,
reduced to a pecuniary standard, on the basis of the inventory, would
amount to more than P200,000.00 and, consequently, within the exclusive
jurisdiction of the Supreme Court.

SPECPRO| RULE 72| 19

The case of Ledesma v. Natividad (L-6115, May 10, 1954) cited by

respondent in his brief, is also inapplicable, because unlike the instant case,
it did not involve a contest in the administration of the estate.
While it is true that questions of fact have been raised in the probate
proceedings (Spec. Proc. No. 4977, CFI of Negros Occidental) which was
appealed by respondent to the Court of Appeals, it becomes immaterial, in
view of Sections 17 and 31 of the Judiciary Act of 1948, as amended,
providing that the Supreme Court shall have exclusive appellate jurisdiction
over "all cases in which the value in controversy exceeds two hundred
thousand pesos, exclusive of interests and costs", and that "all cases which
may be erroneously brought to the Supreme Court, or to the Court of
Appeals shall be sent to the proper court, which shall hear the same as if it
had originally been brought before it".
On the question of the appointment of petitioner Eliezar Lopez as special
administrator, we agree with respondent that there was no need for it. Note
that the Rules of Court contain no provision on special co-administrator, the
reason being, that the appointment of such special administrator is merely
temporary and subsists only until a regular executor or administrator is duly

appointed. Thus, it would not only be unnecessary but also impractical, if

for the temporary duration of the need for a special administrator, another
one is appointed aside from the husband, in this case, upon whom the duty
to liquidate the community property devolves merely to protect the
interests of petitioners who, in the event that the disputed will is allowed to
probate, would even have no right to participate in the proceedings at all.
(Roxas v. Pecson, 82 Phil. 407.)
In view of the conclusion herein reached, in connection with the amount
involved in the controversy, it is suggested that appropriate steps be taken
on the appeal pending in the Court of Appeals involving the probate of the
will (CA-G.R. No. 27478-R) to comply with the provisions of the Judiciary
Act on the matter.
WHEREFORE, the decision of the Court of Appeals of May 16, 1961 is set
aside and another one entered also setting aside the order of the trial court
of March 5, 1960, appointing Eliezar Lopez as special co-administrator.
Without costs. So ordered.