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G.R. No. 174975 January 20, 2009
LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR., LILLIBETH MONTAÑER-
BARRIOS, AND RHODORA ELEANOR MONTAÑER-DALUPAN, Petitioners,
vs.
SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL DISTRICT, MARAWI CITY,
LILING DISANGCOPAN, AND ALMAHLEEN LILING S. MONTAÑER, Respondents.
DECISION
PUNO, C.J.:
This Petition for Certiorari and Prohibition seeks to set aside the Orders of the Shari’a District
Court, Fourth Shari’a Judicial District, Marawi City, dated August 22, 20061 and September
21, 2006.2
On August 17, 1956, petitioner Luisa Kho Montañer, a Roman Catholic, married Alejandro
Montañer, Sr. at the Immaculate Conception Parish in Cubao, Quezon City. 3 Petitioners
Alejandro Montañer, Jr., Lillibeth Montañer-Barrios, and Rhodora Eleanor Montañer-Dalupan
are their children.4 On May 26, 1995, Alejandro Montañer, Sr. died.5
On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen
Liling S. Montañer, both Muslims, filed a "Complaint" for the judicial partition of properties
before the Shari’a District Court.6 The said complaint was entitled "Almahleen Liling S.
Montañer and Liling M. Disangcopan v. the Estates and Properties of Late Alejandro
Montañer, Sr., Luisa Kho Montañer, Lillibeth K. Montañer, Alejandro Kho Montañer, Jr., and
Rhodora Eleanor K. Montañer," and docketed as "Special Civil Action No. 7-05."7 In the said
complaint, private respondents made the following allegations: (1) in May 1995, Alejandro
Montañer, Sr. died; (2) the late Alejandro Montañer, Sr. is a Muslim; (3) petitioners are the
first family of the decedent; (4) Liling Disangcopan is the widow of the decedent; (5)
Almahleen Liling S. Montañer is the daughter of the decedent; and (6) the estimated value of
and a list of the properties comprising the estate of the decedent. 8 Private respondents
prayed for the Shari’a District Court to order, among others, the following: (1) the partition of
the estate of the decedent; and (2) the appointment of an administrator for the estate of the
decedent.9
Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the
Shari’a District Court has no jurisdiction over the estate of the late Alejandro Montañer, Sr.,
because he was a Roman Catholic; (2) private respondents failed to pay the correct amount
of docket fees; and (3) private respondents’ complaint is barred by prescription, as it seeks to
establish filiation between Almahleen Liling S. Montañer and the decedent, pursuant to Article
175 of the Family Code.10
On November 22, 2005, the Shari’a District Court dismissed the private respondents’
complaint. The district court held that Alejandro Montañer, Sr. was not a Muslim, and its
jurisdiction extends only to the settlement and distribution of the estate of deceased
Muslims.11
On December 12, 2005, private respondents filed a Motion for Reconsideration.12 On
December 28, 2005, petitioners filed an Opposition to the Motion for Reconsideration,
alleging that the motion for reconsideration lacked a notice of hearing.13 On January 17,
2006, the Shari’a District Court denied petitioners’ opposition. 14 Despite finding that the said
motion for reconsideration "lacked notice of hearing," the district court held that such defect
was cured as petitioners "were notified of the existence of the pleading," and it took
cognizance of the said motion.15 The Shari’a District Court also reset the hearing for the
motion for reconsideration.16
In its first assailed order dated August 22, 2006, the Shari’a District Court reconsidered its
order of dismissal dated November 22, 2005.17 The district court allowed private respondents
to adduce further evidence.18 In its second assailed order dated September 21, 2006, the
Shari’a District Court ordered the continuation of trial, trial on the merits, adducement of
further evidence, and pre-trial conference.19
Seeking recourse before this Court, petitioners raise the following issues:
I.
RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY LACKS JURISDICTION
OVER PETITIONERS WHO ARE ROMAN CATHOLICS AND NON-MUSLIMS.
II.
RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY DID NOT ACQUIRE
JURISDICTION OVER "THE ESTATES AND PROPERTIES OF THE LATE ALEJANDRO
MONTAÑER, SR." WHICH IS NOT A NATURAL OR JURIDICAL PERSON WITH CAPACITY
TO BE SUED.
III.
RESPONDENT SHARI’A DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER
THE COMPLAINT OF PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-
PAYMENT OF THE FILING AND DOCKETING FEES.
IV.
RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE

OPPOSITION OF PETITIONERS AND THEN GRANTED THE MOTION FOR
RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET AL. WHICH WAS
FATALLY DEFECTIVE FOR LACK OF A "NOTICE OF HEARING."
V.
RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL
ACTION 7-05 FOR TRIAL EVEN IF THE COMPLAINT PLAINLY REVEALS THAT
RESPONDENT ALMAHLEEN LILING S. MONTAÑER SEEKS RECOGNITION FROM
ALEJANDRO MONTAÑER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE
DEATH OF ALEJANDRO MONTAÑER, SR. ON MAY 26, 1995.
In their Comment to the Petition for Certiorari, private respondents stress that the Shari’a
District Court must be given the opportunity to hear and decide the question of whether the
decedent is a Muslim in order to determine whether it has jurisdiction. 20
Jurisdiction: Settlement of the Estate of Deceased Muslims
Petitioners’ first argument, regarding the Shari’a District Court’s jurisdiction, is dependent on
a question of fact, whether the late Alejandro Montañer, Sr. is a Muslim. Inherent in this
argument is the premise that there has already been a determination resolving such a
question of fact. It bears emphasis, however, that the assailed orders did not determine
whether the decedent is a Muslim. The assailed orders did, however, set a hearing for the
purpose of resolving this issue.
Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim
Personal Laws of the Philippines, provides that the Shari’a District Courts have exclusive
original jurisdiction over the settlement of the estate of deceased Muslims:
ARTICLE 143. Original jurisdiction. — (1) The Shari'a District Court shall have exclusive
original jurisdiction over:
xxxx
(b) All cases involving disposition, distribution and settlement of the estate of deceased
Muslims, probate of wills, issuance of letters of administration or appointment of
administrators or executors regardless of the nature or the aggregate value of the property.
The determination of the nature of an action or proceeding is controlled by the averments and
character of the relief sought in the complaint or petition.21 The designation given by parties to
their own pleadings does not necessarily bind the courts to treat it according to the said
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designation. Rather than rely on "a falsa descriptio or defective caption," courts are "guided
by the substantive averments of the pleadings."22
Although private respondents designated the pleading filed before the Shari’a District Court
as a "Complaint" for judicial partition of properties, it is a petition for the issuance of letters of
administration, settlement, and distribution of the estate of the decedent. It contains sufficient
jurisdictional facts required for the settlement of the estate of a deceased Muslim, 23 such as
the fact of Alejandro Montañer, Sr.’s death as well as the allegation that he is a Muslim. The
said petition also contains an enumeration of the names of his legal heirs, so far as known to
the private respondents, and a probable list of the properties left by the decedent, which are
the very properties sought to be settled before a probate court. Furthermore, the reliefs
prayed for reveal that it is the intention of the private respondents to seek judicial settlement
of the estate of the decedent.24 These include the following: (1) the prayer for the partition of
the estate of the decedent; and (2) the prayer for the appointment of an administrator of the
said estate.
We cannot agree with the contention of the petitioners that the district court does not have
jurisdiction over the case because of an allegation in their answer with a motion to dismiss
that Montañer, Sr. is not a Muslim. Jurisdiction of a court over the nature of the action and its
subject matter does not depend upon the defenses set forth in an answer 25 or a motion to
dismiss.26 Otherwise, jurisdiction would depend almost entirely on the defendant 27 or result in
having "a case either thrown out of court or its proceedings unduly delayed by simple
stratagem.28 Indeed, the "defense of lack of jurisdiction which is dependent on a question of
fact does not render the court to lose or be deprived of its jurisdiction."29
The same rationale applies to an answer with a motion to dismiss.30 In the case at bar, the
Shari’a District Court is not deprived of jurisdiction simply because petitioners raised as a
defense the allegation that the deceased is not a Muslim. The Shari’a District Court has the
authority to hear and receive evidence to determine whether it has jurisdiction, which requires
an a priori determination that the deceased is a Muslim. If after hearing, the Shari’a District
Court determines that the deceased was not in fact a Muslim, the district court should dismiss
the case for lack of jurisdiction.
Special Proceedings
The underlying assumption in petitioners’ second argument, that the proceeding before the
Shari’a District Court is an ordinary civil action against a deceased person, rests on an
erroneous understanding of the proceeding before the court a quo. Part of the confusion may
be attributed to the proceeding before the Shari’a District Court, where the parties were
designated either as plaintiffs or defendants and the case was denominated as a special civil

action. We reiterate that the proceedings before the court a quo are for the issuance of letters
of administration, settlement, and distribution of the estate of the deceased, which is a special
proceeding. Section 3(c) of the Rules of Court (Rules) defines a special proceeding as "a
remedy by which a party seeks to establish a status, a right, or a particular fact." This Court
has applied the Rules, particularly the rules on special proceedings, for the settlement of the
estate of a deceased Muslim.31 In a petition for the issuance of letters of administration,
settlement, and distribution of estate, the applicants seek to establish the fact of death of the
decedent and later to be duly recognized as among the decedent’s heirs, which would allow
them to exercise their right to participate in the settlement and liquidation of the estate of the
decedent.32 Here, the respondents seek to establish the fact of Alejandro Montañer, Sr.’s
death and, subsequently, for private respondent Almahleen Liling S. Montañer to be
recognized as among his heirs, if such is the case in fact.
Petitioners’ argument, that the prohibition against a decedent or his estate from being a party
defendant in a civil action33 applies to a special proceeding such as the settlement of the
estate of the deceased, is misplaced. Unlike a civil action which has definite adverse parties,
a special proceeding has no definite adverse party. The definitions of a civil action and a
special proceeding, respectively, in the Rules illustrate this difference. A civil action, in which
"a party sues another for the enforcement or protection of a right, or the prevention or redress
of a wrong"34necessarily has definite adverse parties, who are either the plaintiff or
defendant.35 On the other hand, a special proceeding, "by which a party seeks to establish a
status, right, or a particular fact,"36 has one definite party, who petitions or applies for a
declaration of a status, right, or particular fact, but no definite adverse party. In the case at
bar, it bears emphasis that the estate of the decedent is not being sued for any cause of
action. As a special proceeding, the purpose of the settlement of the estate of the decedent is
to determine all the assets of the estate,37pay its liabilities,38 and to distribute the residual to
those entitled to the same.39
Docket Fees
Petitioners’ third argument, that jurisdiction was not validly acquired for non-payment of
docket fees, is untenable. Petitioners point to private respondents’ petition in the proceeding
before the court a quo, which contains an allegation estimating the decedent’s estate as the
basis for the conclusion that what private respondents paid as docket fees was insufficient.
Petitioners’ argument essentially involves two aspects: (1) whether the clerk of court correctly
assessed the docket fees; and (2) whether private respondents paid the correct assessment
of the docket fees.
Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a
trial court with jurisdiction over the subject matter. 40 If the party filing the case paid less than
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the correct amount for the docket fees because that was the amount assessed by the clerk of
court, the responsibility of making a deficiency assessment lies with the same clerk of
court.41 In such a case, the lower court concerned will not automatically lose jurisdiction,
because of a party’s reliance on the clerk of court’s insufficient assessment of the docket
fees.42 As "every citizen has the right to assume and trust that a public officer charged by law
with certain duties knows his duties and performs them in accordance with law," the party
filing the case cannot be penalized with the clerk of court’s insufficient
assessment.43 However, the party concerned will be required to pay the deficiency.44
In the case at bar, petitioners did not present the clerk of court’s assessment of the docket
fees. Moreover, the records do not include this assessment. There can be no determination
of whether private respondents correctly paid the docket fees without the clerk of court’s
assessment.
Exception to Notice of Hearing
Petitioners’ fourth argument, that private respondents’ motion for reconsideration before the
Shari’a District Court is defective for lack of a notice of hearing, must fail as the unique
circumstances in the present case constitute an exception to this requirement. The Rules
require every written motion to be set for hearing by the applicant and to address the notice of
hearing to all parties concerned.45 The Rules also provide that "no written motion set for
hearing shall be acted upon by the court without proof of service thereof." 46 However, the
Rules allow a liberal construction of its provisions "in order to promote [the] objective of
securing a just, speedy, and inexpensive disposition of every action and
proceeding."47 Moreover, this Court has upheld a liberal construction specifically of the rules
of notice of hearing in cases where "a rigid application will result in a manifest failure or
miscarriage of justice especially if a party successfully shows that the alleged defect in the
questioned final and executory judgment is not apparent on its face or from the recitals
contained therein."48 In these exceptional cases, the Court considers that "no party can even
claim a vested right in technicalities," and for this reason, cases should, as much as possible,
be decided on the merits rather than on technicalities.49
The case at bar falls under this exception. To deny the Shari’a District Court of an opportunity
to determine whether it has jurisdiction over a petition for the settlement of the estate of a
decedent alleged to be a Muslim would also deny its inherent power as a court to control its
process to ensure conformity with the law and justice. To sanction such a situation simply
because of a lapse in fulfilling the notice requirement will result in a miscarriage of justice.
In addition, the present case calls for a liberal construction of the rules on notice of hearing,
because the rights of the petitioners were not affected. This Court has held that an exception

to the rules on notice of hearing is where it appears that the rights of the adverse party were
not affected.50 The purpose for the notice of hearing coincides with procedural due
process,51 for the court to determine whether the adverse party agrees or objects to the
motion, as the Rules do not fix any period within which to file a reply or opposition.52 In
probate proceedings, "what the law prohibits is not the absence of previous notice, but the
absolute absence thereof and lack of opportunity to be heard."53 In the case at bar, as evident
from the Shari’a District Court’s order dated January 17, 2006, petitioners’ counsel received a
copy of the motion for reconsideration in question. Petitioners were certainly not denied an
opportunity to study the arguments in the said motion as they filed an opposition to the same.
Since the Shari’a District Court reset the hearing for the motion for reconsideration in the
same order, petitioners were not denied the opportunity to object to the said motion in a
hearing. Taken together, these circumstances show that the purpose for the rules of notice of
hearing, procedural process, was duly observed.
Prescription and Filiation
Petitioners’ fifth argument is premature. Again, the Shari’a District Court has not yet
determined whether it has jurisdiction to settle the estate of the decedent. In the event that a
special proceeding for the settlement of the estate of a decedent is pending, questions
regarding heirship, including prescription in relation to recognition and filiation, should be
raised and settled in the said proceeding.54 The court, in its capacity as a probate court, has
jurisdiction to declare who are the heirs of the decedent.55 In the case at bar, the
determination of the heirs of the decedent depends on an affirmative answer to the question
of whether the Shari’a District Court has jurisdiction over the estate of the decedent.
IN VIEW WHEREOF, the petition is DENIED. The Orders of the Shari’a District Court, dated
August 22, 2006 and September 21, 2006 respectively, are AFFIRMED. Cost against
petitioners.
SO ORDERED.
G.R. No. 42108 December 29, 1989
OSCAR D. RAMOS and LUZ AGUDO, petitioners,
vs.
HON. COURT OF APPEALS, ADELAIDA RAMOS and LAZARO E. MENESES, respodents.
Godofredo V. Magbiray for petitioners.
Joselito Lim for private respondents.
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REGALADO, J.:
The instant petition for review on certiorari impugns the decision of the Court of Appeals
dated October 7, 1975, 1which affirmed in toto the decision of the Court of First Instance of
Tarlac in Civil Case No. 4168, entitled "Adelaida Ramos, et al. vs. Oscar D. Ramos, et al.,"
holding that the contracts between the parties are not ventas con pacto de retro but are
equitable mortgages.
Sometime in January 1959, private respondent Adelaida Ramos borrowed from her brother,
petitioner Oscar D. Ramos, the amounts of P 5,000.00 and P 9,000.00 in connection with her
business transaction with one Flor Ramiro, Fred Naboa and Atty. Ruperto Sarandi involving
the recovery of a parcel of land in Tenejeros, Malabon. The said amount was used to finance
the trip to Hawaii of Ramiro, Naboa and Atty. Sarandi. As security for said loan, private
respondent Adelaida Ramos executed in favor of petitioners two (2) deeds of conditional sale
dated May 27, 1959 and August 30, 1959, of her rights, shares, interests and participation
respectively over Lot No. 4033 covered by Original Certificate of Title No. 5125 registered in
the name of their parents, Valente Ramos and Margarita Denoga, now deceased; 2 and Lot
No. 4221 covered by Transfer Certificate of Title No. 10788 then registered in the names of
Socorro Ramos, Josefina Ramos and Adelaida Ramos, 3 said properties being of the
Cadastral Survey of Paniqui, Tarlac.
Upon the failure of said private respondent as vendor a retro to exercise her right of
repurchase within the redemption period, aforenamed petitioner filed a petition for
consolidation and approval of the conditional sale of Lot No. 4033 in Special Proceedings No.
5174, entitled "Intestate Estate of the late Margarita Denoga," 4 and a petition for approval of
the pacto de retro sale of Lot No. 4221 in the former Court of First Instance of Tarlac acting
as a cadastral court. 5 On January 22, 1960, the said probate court issued an order with the
following disposition:
WHEREFORE, the deed of CONDITIONAL SALE executed on May 27, 1959, by
Adelaida Ramos in favor of spouses Oscar D. Ramos and Luz Agudo, conveying to the
latter by way of pacto de retro sale whatever rights and interests the former may have in
Lot No. 4033 of the Cadastral Survey of Paniqui, which deed of conditional sale is known
as Document No. 14, Page 26, Book VI, Series of 1959, of the notarial register of Notary
Public Jose P. Sibal, is hereby approved. 6
The cadastral Court also issued a similar order dated April 18, 1960, the dispositive portion of
which reads:

WHEREFORE, by way of granting the petition, the Court orders the consolidation of
ownership and dominion in petitioners-spouses Oscar D. Ramos and Luz Agudo over
the rights, shares and interests of Adelaida Ramos in Lot No. 4221 of the Cadastral
Survey of Paniqui, Tarlac, which the latter sold to the former under a pacto de retro sale
executed in a public instrument known as Document No. 22, Page 28, Book No. VI.
Series of 1959, of the Notarial Registry of Notary Public Jose P. Sibal but which she
failed to repurchase within the period specified in said Document. 7
Private respondents had been and remained in possession of these properties until sometime
in 1964 when petitioner took possession thereof.
On February 28, 1968, private respondent filed Civil Case No. 4168 with the then Court of
First Instance of Tarlac for declaration of nullity of orders, reformation of instrument, recovery
of possession with preliminary injunction and damages. The complaint therein alleged that
the deeds of conditional sale, dated May 27, 1959 and August 30, 1959, are mere mortgages
and were vitiated by misrepresentation, fraud and undue influence and that the orders dated
January 22, 1960 and April 18, 1960, respectively issued by the probate and cadastral courts,
were null and void for lack of jurisdiction. Petitioners, in their answer to the complaint,
specifically deny the allegations of fraud and misrepresentation and interposed as defense
the fact that the questioned conditional sales of May 27, 1959 and August 30, 1959 were
voluntarily executed by private respondent Adelaida Ramos and truly expressed the intention
of the parties; that the action, if any, has long prescribed; that the questioned orders of
January 22, 1960 and April 18, 1960, approving the consolidation of ownership of the lands in
question in favor of petitioner were within the jurisdiction of the lower court, in its capacity as
a probate court insofar as Lot No. 4033 is concerned, and acting as a cadastral court with
respect to Lot No. 4221; and that said lands subject of the conditional sales were in custodia
legis in connection with the settlement of the properties of the late Margarita Denoga, the
predecessor in interest of both petitioners and private respondents.
On January 7, 1970, the court below issued a pre-trial order to the effect that petitioners
admit the genuineness and due execution of the promissory notes marked as Exhibits "F"
and "F-1 " and that the principal triable issue is whether or not the documents purporting to be
deeds of conditional sale, marked as Exhibits "B", "B-1" and "G" were in fact intended to be
equitable mortgages. 8 In its order dated February 17, 1971, the trial court also declared:
"Both parties agreed and manifested in open court the principal obligation in the transaction
reflected in Exhibits 'B' and 'B-l' and 'G' is one of loan. The parties differ, however, on the
nature of the security described therein. 9
On May 17, 1971, the court a quo rendered a decision the decretal part of which reads:
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WHEREFORE, judgment is hereby rendered:
1) Denying defendants' motion to dismiss of February 23, 1970;
2) Declaring Exhibits 'B', 'B-I' and 'G' as loan transaction secured by real estate
mortgages;
3) Annulling and setting aside Exhibits 'D', 'D-l', 'I', 'I-l' and 'I-2';
4) Ordering plaintiffs, jointly and severally to pay (within ninety [90] days from receipt of a
copy of this judgment) defendants the sum of P 5,000.00 specified in Exhibit 'B', with
interest thereon at the legal rate from November 28, 1959 until full payment together with
the sum of P 9,308.00 specified in Exhibit 'G' with interest thereon at the legal rate from
December 1, 1959 until full payment, and in default of such payment, let the properties
mortgaged under Exhibits 'B', 'B-1' and 'G' be sold to realize the mortgage debt and costs;
and
5) Dismissing defendants' counter-claim.
With costs against defendants. 10
On June 14, 1971, petitioners appealed said decision to the Court of Appeals which, on
October 7, 1975; affirmed in all respects the judgment of the trial court. Petitioners' motion for
reconsideration of said decision was denied on November 27, 1975. 11
On January 8, 1976, petitioners filed the petition at bar anchored on the following
assignments of errors:
1. The Hon. Court of Appeals erred in not applying the correct provisions of law
interpreting the conditional sales dated May 27, 1959 and August 30, 1959, Exhibits 'B'
and 'G' as equitable mortgages.
2. That as a consequence of its ruling that the conditional sales, Exhibits 'B' and 'G', are
equitable mortgages, the Hon. Court of Appeals erred in ordering the reformation of the
same.
3. The Honorable Court of Appeals erred in holding that the order dated January 22, 1960,
Exhibit C or 2, and the order dated April 18, 1960, Exhibit H or 6, issued by the probate
court in Sp. Proc. No. 5174 and by the cadastral court in G.L.R.O. Rec. No. 395,
respectively, are null and void for lack of jurisdiction.

4. The Hon. Court of Appeals erred in not applying the applicable provisions of law on the
prescription of action and in not dismissing the complaint filed in the lower court. 12
We find the petition devoid of merit.
Article 1602 of the Civil Code provides:
The contract shall be presumed to be an equitable mortgage, in any of the following cases:
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other
obligation.
In any of the foregoing cases, any money, fruits or other benefit to be received by the
vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.
The Court of Appeals, in holding that the two (2) deeds purporting to be pacto de retro sale
contracts are equitable mortgages, relied on the following factual findings of the trial court, to
wit:
Several undisputed circumstances persuade this Court (that) the questioned
deeds should be construed as equitable mortgages as contemplated in
Article 1602 of the Civil Code, namely: (1) plaintiff vendor remained in
possession until 1964 of the properties she allegedly sold in 1959 to
defendants; (2) the sums representing the alleged purchase price were
actually advanced to plaintiff by way of loans, as expressly admitted by the
parties at the hearing of February 17, 1971, reflected in an Order of the same
date: and (3) the properties allegedly purchased by defendant Oscar Ramos
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and his wife have never been declared for taxation purposes in their names.
Exhibits K, K-1, L and L-1. 13
Even if we indulge the petitioners in their contention that they are justified in not taking
possession of the lots considering that what were allegedly sold to them were only the rights,
shares, interests and participation of private respondent Adelaida Ramos in the said lots
which were under administration, 14 however, such fact will not justify a reversal of the
conclusion reached by respondent court that the purported deeds of sale con pacto de retro
are equitable mortgages. Such a conclusion is buttressed by the other circumstances
catalogued by respondent court especially the undisputed fact that the two deeds were
executed by reason of the loan extended by petitioner Oscar Ramos to private respondent
Adelaida Ramos and that the purchase price stated therein was the amount of the loan itself.
The above-stated circumstances are more than sufficient to show that the true intention of the
parties is that the transaction shall secure the payment of said debt and, therefore, shall be
presumed to be an equitable mortgage under Paragraph 6 of Article 1602 hereinbefore
quoted. Settled is the rule that to create the presumption enunciated by Article 1602, the
existence of one circumstance is enough.15 The said article expressly provides therefor "in
any of the following cases," hence the existence of any of the circumstances enumerated
therein, not a concurrence nor an overwhelming number of such circumstances, suffices to
give rise to the presumption that the contract with the right of repurchase is an equitable
mortgage. As aptly stated by the Court of Appeals:
Thus, it may be fairly inferred that the real intention of the parties is that the transactions
in question were entered into to secure the payment of the loan and not to sell the
property (Article 1602, Civil Code). Under Article 1603 of the Civil Code it is provided that
'in case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage' in this case, we have no doubt that the transaction
between the parties is that of a loan secured by said properties by way of mortgage.
Hence, we find that Exhibits B and G do not reflect the true and real intention of the
parties and should accordingly be reformed and construed as equitable mortgages. 16
Equally puerile is the other contention of petitioners that respondent court erred in not
applying the exclusionary parol evidence rule in ascertaining the true intendment of the
contracting parties. The present case falls squarely under one of the exceptions to said rule
as provided in then Section 7 of Rule 130, thus:
xxx xxx xxx

(a) Where a mistake or imperfection of the writing or its failure to express the true intent
and agreement of the parties, or the validity of the agreement is put in issue by the
pleadings;17
xxx xxx xxx
Moreover, it is a well entrenched principle in the interpretation of contracts that if the terms
thereof are clear and leave no doubt as to the intention of the contracting parties the literal
meaning of the stipulation shall control but when the words appear to be contrary to the
evident intention of the parties, the latter shall prevail over the former. 18
The admission of parol testimony to prove that a deed, absolute in form, was in fact given and
accepted as a mortgage does not violate the rule against the admission of oral evidence to
vary or contradict the terms of a written instrument.19 Sales with a right to repurchase, as
defined by the Civil Code, are not favored. We will not construe instruments to be sales with a
right to repurchase, with the stringent and onerous effects which follow, unless the terms of
the document and the surrounding circumstances require it. Whenever, under the terms of
the writing, any other construction can fairly and reasonably be made, such construction will
be adopted and the contract will be construed as a mere loan unless the court can see that, if
enforced according to its terms, it is not an unconscionable one. 20
On the faces thereof, the contracts purport to be sales with pacto de retro; however, since the
same were actually executed in consideration of the aforesaid loans said contracts are
indubitably equitable mortgages. The rule is firmly settled that whenever it is clearly shown
that a deed of sale with pacto de retro, regular on its face, is given as security for a loan, it
must be regarded as an equitable mortgage. 21
With respect to the orders dated January 22, 1960 and April 18, 1960, issued by the Court
below acting as a probate court and cadastral court, respectively, the same could not
preclude the institution of the case now under review.
A reading of the order of the probate court will show that it is merely an approval of the deed
of conditional sale dated May 27, 1959 executed by petitioner Adelaida Ramos in favor of
petitioners. There is nothing in said order providing for the consolidation of ownership over
the lots allegedly sold to petitioners nor was the issue of the validity of said contract
discussed or resolved therein. "To give approval" means in its essential and most obvious
meaning, to confirm, ratify, sanction or consent to some act or thing done by another. 22 The
approval of the probate court of the conditional sale is not a conclusive determination of the
intrinsic or extrinsic validity of the contract but a mere recognition of the right of private
respondent Adelaida Ramos as an heir, to dispose of her rights and interests over her
Page |7
inheritance even before partition. 23 As held in Duran, et al., vs. Duran 24 the approval by the
settlement court of the assignment pendente lite, made by one heir in favor of the other
during the course of the settlement proceedings, is not deemed final until the estate is closed
and said order can still be vacated, hence the assigning heir remains an interested person in
the proceeding even after said approval.
Moreover, the probate jurisdiction of the former court of first instance or the present regional
trial court relates only to matters having to do with the settlement of the estate and probate of
wills of deceased persons, and the appointment and removal of administrators, executors,
guardians and trustees. Subject to settled exceptions not present in this case, the law does
not extend the jurisdiction of a probate court to the determination of questions of ownership
that arise during the proceeding. The parties concerned may choose to bring a separate
action as a matter of convenience in the preparation or presentation of
evidence. 25 Obviously, the approval by the probate court of the conditional sale was without
prejudice to the filing of the proper action for consolidation of ownership and/or reformation of
instrument in the proper court within the statutory period of prescription.
The same jurisdictional flaw obtains in the order of consolidation issued by the cadastral
court. The court of first instance or the regional trial court, acting as cadastral court, acts with
limited competence. It has no jurisdiction to take cognizance of an action for consolidation of
ownership, much less to issue an order to that effect, such action must have been filed in the
former court of first instance, now in the regional trial court, in the exercise of its general
jurisdiction. That remedy, and the procedure therefor, is now governed by Rule 64 of the
Rules of Court as a special civil action cognizable by the regional trial court in the exercise of
original general jurisdiction.
Antecedent thereto, Article 1607 of the Civil Code provided for consolidation as follows:
In case of real property, the consolidation of ownership in the vendee by virtue of the
failure of the vendor to comply with the provisions of article 1616 shall not be recorded
in the Registry of Property without a judicial order, after the vendor has been duly
heard.
Hence in Crisologo, et al. vs. Centeno, et al., 26 we ruled that said Article 1607 contemplates
a contentious proceeding wherein the vendor a retro must be named respondent in the
caption and title of the petition for consolidation of ownership and duly summoned and heard.
An order granting the vendee's petition for consolidation of ownership, without the vendor a
retro being named as respondent, summoned and heard, is a patent nullity for want of
jurisdiction of the court over the person of the latter.

The questioned order of consolidation issued by the cadastral court, being void for lack of
jurisdiction, is in contemplation of law non-existent and may be wholly disregarded. Such
judgment may be assailed any time, either directly or collaterally, by means of a separate
action or by resisting such judgment in any action or proceeding whenever it is invoked. 27 It
is not necessary to take any step to vacate or avoid a void judgment; it may simply be
ignored. 28
On the issue of prescription, in addition to what has been said, the present case, having been
filed on February 28, 1960, approximately seven (7) years from the execution of the
questioned deeds, was seasonably instituted. The prescriptive period for actions based upon
a written contract and for reformation is ten (10) years under Article 1144 of the Civil Code.
Such right to reformation is expressly recognized in Article 1365 of the same code. 29
Article 1602 of the Civil Code is designed primarily to curtail the evils brought about by
contracts of sale with right of repurchase, such as the circumvention of the laws against usury
and pactum commissorium.30 In the present case before us, to rule otherwise would
contravene the legislative intent to accord the vendor a retro maximum safeguards for the
protection of his legal rights under the true agreement of the parties. The judicial experience
in cases of this nature and the rationale for the remedial legislation are worth reiterating,
considering that such nefarious practices still persist:
It must be admitted that there are some cases where the parties really intend a sale with
right to repurchase. Although such cases are rare, still the freedom of contract must be
maintained and respected. Therefore, the contract under consideration is preserved, but
with adequate safeguards and restrictions.
One of the gravest problems that must be solved is that raised by the contract of sale with
right of repurchase or pacto de retro. The evils arising from this contract have festered like
a sore on the body politic. ...
xxx xxx xxx
It is a matter of common knowledge that in practically all of the so-called contracts of sale
with right of repurchase, the real intention of the parties is that the pretended purchase-
price is money loaned, and in order to secure the payment of the loan a contract
purporting to be a sale with pacto de retro is drawn up. It is thus that the provisions
contained in articles 1859 and 1858 of the present Civil Code which respectively prohibit
the creditor from appropriating the things given in pledge or mortgage and ordering that
said things be sold or alienated when the principal obligation becomes due, are
circumvented.
Page |8
Furthermore, it is well-known that the practice in these so-called contracts of sale with
pacto de retro is to draw up another contract purporting to be a lease of the property to the
supposed vendor, who pays in money or in crops a so-called rent. It is, however, no secret
to anyone that this simulated rent is in truth and in fact interest on the money loaned. In
many instances, the interest is usurious. Thus, the usury law is also circumvented.
It is high time these transgressions of the law were stopped. It is believed by the
Commission that the plan submitted for the solution of the problem will meet with the
approval of an enlightened public opinion, and in general, of everyone moved by a sense
of justice.
During the deliberations of the Commission the question arose as to whether the contract
of purchase with pacto de retro should be abolished and forbidden. On first impression,
this should be done, but there is every reason to fear that in such a case the usurious
money-lenders would demand of the borrowers that, although the real agreement is one of
loan secured with a mortgage, the instrument to be signed should purport to be an
absolute sale of the property involved. Should this happen, the problem would become
aggravated. Moreover, it must be admitted that there are some cases where the parties
really intend a sale with right to repurchase. Although such cases are rare, still the
freedom of contract must be maintained and respected. Therefore, the contract under
consideration is preserved in the Project of Civil Code, but with adequate safeguards and
restrictions. 31
WHEREFORE, the instant petition is hereby DENIED and the assailed decision of the Court
of Appeals is hereby AFFIRMED.
OSCAR C. REYES,
- versus -
HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142, ZENITH INSURANCE
CORPORATION, and RODRIGO C. REYES,
G.R. No. 165744
Promulgated:
August 11, 2008
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set
aside the Decision of the Court of Appeals (CA)[1] promulgated on May 26, 2004 in CA-G.R.

SP No. 74970. The CA Decision affirmed the Order of the Regional Trial Court (RTC), Branch
142, Makati City dated November 29, 2002[2] in Civil Case No. 00-1553 (entitled "Accounting
of All Corporate Funds and Assets, and Damages") which denied petitioner Oscar C. Reyes
(Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the
spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned
shares of stock of Zenith Insurance Corporation (Zenith), a domestic corporation established
by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedros estate was
judicially partitioned among his heirs sometime in the 1970s, no similar settlement and
partition appear to have been made with Anastacias estate, which included her shareholdings
in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and
Rodrigo owned 8,715,637 and 4,250 shares, respectively.[3]
On May 9, 2000, Zenith and Rodrigo filed a complaint[4] with the Securities and Exchange
Commission (SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint
stated that it is a derivative suit initiated and filed by the complainant Rodrigo C. Reyes to
obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATION
which are now or formerly in the control, custody, and/or possession of respondent [herein
petitioner Oscar] and to determine the shares of stock of deceased spouses Pedro and
Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for himself
[and] which were not collated and taken into account in the partition, distribution, and/or
settlement of the estate of the deceased spouses, for which he should be ordered to account
for all the income from the time he took these shares of stock, and should now deliver to his
brothers and sisters their just and respective shares.[5] [Emphasis supplied.]
In his Answer with Counterclaim,[6] Oscar denied the charge that he illegally acquired the
shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares
with his own funds from the unissued stocks of Zenith, and that the suit is not a bona
fide derivative suit because the requisites therefor have not been complied with. He thus
questioned the SECs jurisdiction to entertain the complaint because it pertains to the
settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 8799[7]
took effect, the SECs exclusive and original jurisdiction
over cases enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred
to the RTC designated as a special commercial court.[8] The records of Rodrigos SEC case
Page |9
were thus turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No. 00-
1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment
Suit.[9] He claimed that the complaint is a mere nuisance or harassment suit and should,
according to the Interim Rules of Procedure for Intra-Corporate Controversies, be dismissed;
and that it is not a bona fide derivative suit as it partakes of the nature of a petition for
the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special
commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the
motion in part and declared:
A close reading of the Complaint disclosed the presence of two (2) causes of
action, namely: a) a derivative suit for accounting of the funds and assets of
the corporation which are in the control, custody, and/or possession of the
respondent [herein petitioner Oscar] with prayer to appoint a management
committee; and b) an action for determination of the shares of stock of
deceased spouses Pedro and Anastacia Reyes allegedly taken by
respondent, its accounting and the corresponding delivery of these shares to
the parties brothers and sisters. The latter is not a derivative suit and should
properly be threshed out in a petition for settlement of estate.
Accordingly, the motion is denied. However, only the derivative suit
consisting of the first cause of action will be taken cognizance of by this
Court.[10]
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus[11] and
prayed that the RTC Order be annulled and set aside and that the trial court be prohibited
from continuing with the proceedings. The appellate court affirmed the RTC Order and denied
the petition in its Decision dated May 26, 2004. It likewise denied Oscars motion for
reconsideration in a Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through a petition for review on certiorari under
Rule 45 of the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made:

1. that the complaint is a mere nuisance or harassment suit that should be
dismissed under the Interim Rules of Procedure of Intra-Corporate
Controversies; and
2. that the complaint is not a bona fide derivative suit but is in fact in the nature of
a petition for settlement of estate; hence, it is outside the jurisdiction of the RTC
acting as a special commercial court.
Accordingly, he prays for the setting aside and annulment of the CA decision and resolution,
and the dismissal of Rodrigos complaint before the RTC.
THE COURTS RULING
We find the petition meritorious.
The core question for our determination is whether the trial court, sitting as a special
commercial court, has jurisdiction over the subject matter of Rodrigos complaint. To resolve
it, we rely on the judicial principle that jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations of the complaint, irrespective of
whether the plaintiff is entitled to all or some of the claims asserted therein.[12]
JURISDICTION OF SPECIAL COMMERCIAL COURTS
P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special
commercial court) exercises exclusive jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative
functions of the Securities and Exchange Commission over
corporations, partnership, and other forms of associations
registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving:
a) Devices or schemes employed by or any acts of
the board of directors, business associates, its officers or
partners, amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the stockholders,
partners, members of associations or organizations registered
with the Commission.
b) Controversies arising out of intra-corporate or
partnership relations, between and among stockholders,
members, or associates; between any or all of them and the
corporation, partnership or association of which they are
P a g e | 10
stockholders, members, or associates, respectively; and between
such corporation, partnership or association and the State insofar
as it concerns their individual franchise or right to exist as such
entity; and
c) Controversies in the election or appointment of
directors, trustees, officers, or managers of such corporations,
partnerships, or associations.
The allegations set forth in Rodrigos complaint principally invoke Section 5, paragraphs (a)
and (b) above as basis for the exercise of the RTCs special court jurisdiction. Our focus in
examining the allegations of the complaint shall therefore be on these two provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate
facts constituting the plaintiffs cause of action and must specify the relief sought.[13]Section 5,
Rule 8 of the Revised Rules of Court provides that in all averments of fraud or mistake, the
circumstances constituting fraud or mistake must be stated with particularity.[14] These
rules find specific application to Section 5(a) of P.D. No. 902-A which speaks of corporate
devices or schemes that amount to fraud or misrepresentation detrimental to the public
and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint
the following:
3. This is a complaint to determine the shares of stock of the deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and
fraudulently appropriated for himself [herein petitioner Oscar] which
were not collated and taken into account in the partition, distribution, and/or
settlement of the estate of the deceased Spouses Pedro and Anastacia
Reyes, for which he should be ordered to account for all the income from the
time he took these shares of stock, and should now deliver to his brothers
and sisters their just and respective shares with the corresponding
equivalent amount of P7,099,934.82 plus interest thereon from 1978
representing his obligations to the Associated Citizens Bank that was paid
for his account by his late mother, Anastacia C. Reyes. This amount was not
collated or taken into account in the partition or distribution of the estate of
their late mother, Anastacia C. Reyes.

3.1. Respondent Oscar C. Reyes, through other schemes of
fraud including misrepresentation, unilaterally, and for his own benefit,
capriciously transferred and took possession and control of the
management of Zenith Insurance Corporation which is considered as a
family corporation, and other properties and businesses belonging to
Spouses Pedro and Anastacia Reyes.
xxxx
4.1. During the increase of capitalization of Zenith Insurance
Corporation, sometime in 1968, the property covered by TCT No. 225324
was illegally and fraudulently used by respondent as a collateral.
xxxx
5. The complainant Rodrigo C. Reyes discovered that by some
manipulative scheme, the shareholdings of their deceased mother, Doa
Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate
books at P7,699,934.28, more or less, excluding interest and/or
dividends, had been transferred solely in the name of respondent. By
such fraudulent manipulations and misrepresentation, the shareholdings of
said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic]
and becomes [sic] the majority stockholder of Zenith Insurance Corporation,
which portion of said shares must be distributed equally amongst the
brothers and sisters of the respondent Oscar C. Reyes including the
complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes
and Anastacia C. Reyes valued at P7,099,934.28 were illegally and
fraudulently transferred solely to the respondents [herein petitioner
Oscar] name and installed himself as a majority stockholder of
Zenith Insurance Corporation [and] thereby deprived his brothers and
sisters of their respective equal shares thereof including complainant
hereto.
xxxx
10.1 By refusal of the respondent to account of his [sic]
shareholdings in the company, he illegally and fraudulently
transferred solely in his name wherein [sic] the shares of stock of the
P a g e | 11
deceased Anastacia C. Reyes [which] must be properly collated
and/or distributed equally amongst the children, including the
complainant Rodrigo C. Reyes herein, to their damage and prejudice.
xxxx
11.1 By continuous refusal of the respondent to account of his
[sic] shareholding with Zenith Insurance Corporation[,] particularly
the number of shares of stocks illegally and fraudulently
transferred to him from their deceased parents Sps. Pedro and
Anastacia Reyes[,] which are all subject for collation and/or
partition in equal shares among their children. [Emphasis
supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely
conclusions of law that, without supporting statements of the facts to which the allegations of
fraud refer, do not sufficiently state an effective cause of action.[15] The late Justice Jose
Feria, a noted authority in Remedial Law, declared that fraud and mistake are required to be
averred with particularity in order to enable the opposing party to controvert the particular
facts allegedly constituting such fraud or mistake.[16]
Tested against these standards, we find that the charges of fraud against Oscar were not
properly supported by the required factual allegations. While the complaint contained
allegations of fraud purportedly committed by him, these allegations are not particular enough
to bring the controversy within the special commercial courts jurisdiction; they are not
statements of ultimate facts, but are mere conclusions of law: how and why the alleged
appropriation of shares can be characterized as illegal and fraudulent were not explained nor
elaborated on.
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers
will bring the case within the special commercial courts jurisdiction. To fall within this
jurisdiction, there must be sufficient nexus showing that the corporations nature, structure, or
powers were used to facilitate the fraudulent device or scheme. Contrary to this concept, the
complaint presented a reverse situation. No corporate power or office was alleged to have
facilitated the transfer of the shares; rather, Oscar, as an individual and without reference to
his corporate personality, was alleged to have transferred the shares of Anastacia to his
name, allowing him to become the majority and controlling stockholder of Zenith, and
eventually, the corporations President. This is the essence of the complaint read as a whole
and is particularly demonstrated under the following allegations:

5. The complainant Rodrigo C. Reyes discovered that by some
manipulative scheme, the shareholdings of their deceased mother, Doa
Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate
books at P7,699,934.28, more or less, excluding interest and/or dividends,
had been transferred solely in the name of respondent. By such
fraudulent manipulations and misrepresentation, the shareholdings of
said respondent Oscar C. Reyes abruptly increased to P8,715,637.00
[sic] and becomes [sic] the majority stockholder of Zenith Insurance
Corporation, which portion of said shares must be distributed equally
amongst the brothers and sisters of the respondent Oscar C. Reyes
including the complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes
and Anastacia C. Reyes valued at P7,099,934.28 were illegally
and fraudulently transferred solely to the respondents
[herein petitioner Oscar] name and installed himself as a
majority stockholder of Zenith Insurance Corporation [and]
thereby deprived his brothers and sisters of their respective equal
shares thereof including complainant hereto. [Emphasis
supplied.]
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a
ground for dismissal since such defect can be cured by a bill of particulars. In cases governed
by the Interim Rules of Procedure on Intra-Corporate Controversies, however, a bill of
particulars is a prohibited pleading.[17] It is essential, therefore, for the complaint to show on
its face what are claimed to be the fraudulent corporate acts if the complainant wishes to
invoke the courts special commercial jurisdiction.
We note that twice in the course of this case, Rodrigo had been given the opportunity to study
the propriety of amending or withdrawing the complaint, but he consistently refused. The
courts function in resolving issues of jurisdiction is limited to the review of the allegations of
the complaint and, on the basis of these allegations, to the determination of whether they are
of such nature and subject that they fall within the terms of the law defining the courts
jurisdiction. Regretfully, we cannot read into the complaint any specifically alleged corporate
fraud that will call for the exercise of the courts special commercial jurisdiction. Thus, we
cannot affirm the RTCs assumption of jurisdiction over Rodrigos complaint on the basis of
Section 5(a) of P.D. No. 902-A.[18]
P a g e | 12
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Courts approach in classifying
what constitutes an intra-corporate controversy. Initially, the main consideration in
determining whether a dispute constitutes an intra-corporate controversy was limited to a
consideration of the intra-corporate relationship existing between or among the
parties.[19] The types of relationships embraced under Section 5(b), as declared in the case
of Union Glass & Container Corp. v. SEC,[20] were as follows:
a) between the corporation, partnership, or association and the
public;
b) between the corporation, partnership, or association and its
stockholders, partners, members, or officers;
c) between the corporation, partnership, or association and the
State as far as its franchise, permit or license to operate is
concerned; and
d) among the stockholders, partners, or associates
themselves. [Emphasis supplied.]
The existence of any of the above intra-corporate relations was sufficient to confer
jurisdiction to the SEC, regardless of the subject matter of the dispute. This came to be
known as the RELATIONSHIP test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve,
Inc.,[21] the Court introduced the nature of the controversy test. We declared in this case
that it is not the mere existence of an intra-corporate relationship that gives rise to an intra-
corporate controversy; to rely on the relationship test alone will divest the regular courts of
their jurisdiction for the sole reason that the dispute involves a corporation, its directors,
officers, or stockholders. We saw that there is no legal sense in disregarding or minimizing
the value of the nature of the transactions which gives rise to the dispute.
Under the nature of the controversy test, the incidents of that relationship must also be
considered for the purpose of ascertaining whether the controversy itself is intra-
corporate.[22] The controversy must not only be rooted in the existence of an intra-corporate
relationship, but must as well pertain to the enforcement of the parties correlative rights and
obligations under the Corporation Code and the internal and intra-corporate regulatory rules
of the corporation. If the relationship and its incidents are merely incidental to the controversy

or if there will still be conflict even if the relationship does not exist, then no intra-corporate
controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined by
considering not only the status or relationship of the parties, but also the nature of the
question under controversy.[23] This two-tier test was adopted in the recent case of Speed
Distribution, Inc. v. Court of Appeals:[24]
To determine whether a case involves an intra-corporate controversy,
and is to be heard and decided by the branches of the RTC specifically
designated by the Court to try and decide such cases, two elements must
concur: (a) the status or relationship of the parties; and (2) the nature of the
question that is the subject of their controversy.
The first element requires that the controversy must arise out of intra-
corporate or partnership relations between any or all of the parties and the
corporation, partnership, or association of which they are stockholders,
members or associates; between any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or
associates, respectively; and between such corporation, partnership, or
association and the State insofar as it concerns their individual franchises. The
second element requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. If the nature of the
controversy involves matters that are purely civil in character, necessarily, the
case does not involve an intra-corporate controversy.
Given these standards, we now tackle the question posed for our determination under the
specific circumstances of this case:
Application of the Relationship Test
Is there an intra-corporate relationship between the parties that would characterize the case
as an intra-corporate dispute?
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in
two capacities: in his own right with respect to the 4,250 shares registered in his name, and
as one of the heirs of Anastacia Reyes with respect to the 136,598 shares registered in her
name. What is material in resolving the issues of this case under the allegations of the
complaint is Rodrigos interest as an heir since the subject matter of the present controversy
centers on the shares of stocks belonging to Anastacia, not on Rodrigos personally-owned
shares nor on his personality as shareholder owning these shares. In this light, all reference
P a g e | 13
to shares of stocks in this case shall pertain to the shareholdings of the deceased Anastacia
and the parties interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are transmitted from the
moment of death of the decedent. Accordingly, upon Anastacias death, her children acquired
legal title to her estate (which title includes her shareholdings in Zenith), and they are, prior to
the estates partition, deemed co-owners thereof.[25] This status as co-owners, however, does
not immediately and necessarily make them stockholders of the corporation. Unless and until
there is compliance with Section 63 of the Corporation Code on the manner of transferring
shares, the heirs do not become registered stockholders of the corporation. Section 63
provides:
Section 63. Certificate of stock and transfer of shares. The capital
stock of stock corporations shall be divided into shares for which
certificates signed by the president or vice-president,
countersigned by the secretary or assistant secretary, and sealed
with the seal of the corporation shall be issued in accordance
with the by-laws. Shares of stock so issued are personal property
and may be transferred by delivery of the certificate or certificates
indorsed by the owner or his attorney-in-fact or other person
legally authorized to make the transfer. No transfer, however,
shall be valid, except as between the parties, until the
transfer is recorded in the books of the corporation so as to
show the names of the parties to the transaction, the date of
the transfer, the number of the certificate or certificates, and
the number of shares transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any
unpaid claim shall be transferable in the books of the corporation.
Simply stated, the transfer of title by means of succession, though effective and valid
between the parties involved (i.e., between the decedents estate and her heirs), does not
bind the corporation and third parties. The transfer must be registered in the books of the
corporation to make the transferee-heir a stockholder entitled to recognition as such both by
the corporation and by third parties.[26]
We note, in relation with the above statement, that in Abejo v. Dela Cruz[27] and TCL Sales
Corporation v. Court of Appeals[28] we did not require the registration of the transfer before
considering the transferee a stockholder of the corporation (in effect upholding the existence
of an intra-corporate relation between the parties and bringing the case within the jurisdiction

of the SEC as an intra-corporate controversy). A marked difference, however, exists between
these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a
specific number of shares of the corporation; after the transferee had established prima
facie ownership over the shares of stocks in question, registration became a mere formality in
confirming their status as stockholders. In the present case, each of Anastacias heirs holds
only an undivided interest in the shares. This interest, at this point, is still inchoate and
subject to the outcome of a settlement proceeding; the right of the heirs to specific,
distributive shares of inheritance will not be determined until all the debts of the estate of the
decedent are paid. In short, the heirs are only entitled to what remains after payment of the
decedents debts;[29] whether there will be residue remains to be seen. Justice Jurado aptly
puts it as follows:
No succession shall be declared unless and until a liquidation of
the assets and debts left by the decedent shall have been made
and all his creditors are fully paid. Until a final liquidation is made
and all the debts are paid, the right of the heirs to inherit remains
inchoate. This is so because under our rules of
procedure, liquidation is necessary in order to determine
whether or not the decedent has left any liquid assets which
may be transmitted to his heirs.[30] [Emphasis supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of
Zenith with respect to the shareholdings originally belonging to Anastacia. First, he must
prove that there are shareholdings that will be left to him and his co-heirs, and this can be
determined only in a settlement of the decedents estate. No such proceeding has been
commenced to date. Second, he must register the transfer of the shares allotted to him to
make it binding against the corporation. He cannot demand that this be done unless and until
he has established his specific allotment (and prima facie ownership) of the shares. Without
the settlement of Anastacias estate, there can be no definite partition and distribution of the
estate to the heirs. Without the partition and distribution, there can be no registration of the
transfer. And without the registration, we cannot consider the transferee-heir a stockholder
who may invoke the existence of an intra-corporate relationship as premise for an intra-
corporate controversy within the jurisdiction of a special commercial court.
In sum, we find that insofar as the subject shares of stock (i.e., Anastacias shares) are
concerned Rodrigo cannot be considered a stockholder of Zenith. Consequently, we cannot
declare that an intra-corporate relationship exists that would serve as basis to bring this case
within the special commercial courts jurisdiction under Section 5(b) of PD 902-A, as
amended. Rodrigos complaint, therefore, fails the relationship test.
P a g e | 14
Application of the Nature of Controversy Test
The body rather than the title of the complaint determines the nature of an action.[31] Our
examination of the complaint yields the conclusion that, more than anything else, the
complaint is about the protection and enforcement of successional rights. The controversy it
presents is purely civil rather than corporate, although it is denominated as a complaint for
accounting of all corporate funds and assets.
Contrary to the findings of both the trial and appellate courts, we read only one cause of
action alleged in the complaint. The derivative suit for accounting of the funds and assets of
the corporation which are in the control, custody, and/or possession of the respondent [herein
petitioner Oscar] does not constitute a separate cause of action but is, as correctly claimed by
Oscar, only an incident to the action for determination of the shares of stock of deceased
spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the
corresponding delivery of these shares to the parties brothers and sisters. There can be no
mistake of the relationship between the accounting mentioned in the complaint and the
objective of partition and distribution when Rodrigo claimed in paragraph 10.1 of the
complaint that:
10.1 By refusal of the respondent to account of [sic] his
shareholdings in the company, he illegally and fraudulently
transferred solely in his name wherein [sic] the shares of stock of
the deceased Anastacia C. Reyes [which] must be properly
collated and/or distributed equally amongst the children including
the complainant Rodrigo C. Reyes herein to their damage and
prejudice.
We particularly note that the complaint contained no sufficient allegation that justified the
need for an accounting other than to determine the extent of Anastacias shareholdings for
purposes of distribution.
Another significant indicator that points us to the real nature of the complaint are Rodrigos
repeated claims of illegal and fraudulent transfers of Anastacias shares by Oscar to the
prejudice of the other heirs of the decedent; he cited these allegedly fraudulent acts as basis
for his demand for the collation and distribution of Anastacias shares to the heirs.These
claims tell us unequivocally that the present controversy arose from the parties
relationship as heirs of Anastacia and not as shareholders of Zenith. Rodrigo, in filing the
complaint, is enforcing his rights as a co-heir and not as a stockholder of Zenith. The injury he

seeks to remedy is one suffered by an heir (for the impairment of his successional rights) and
not by the corporation nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through
his allegations of illegal acquisition by Oscar is the distribution of Anastacias shareholdings
without a prior settlement of her estate an objective that, by law and established
jurisprudence, cannot be done. The RTC of Makati, acting as a special commercial court, has
no jurisdiction to settle, partition, and distribute the estate of a deceased. A relevant provision
Section 2 of Rule 90 of the Revised Rules of Court that contemplates properties of the
decedent held by one of the heirs declares:
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.
[Emphasis supplied.]
Worth noting are this Courts statements in the case of Natcher v. Court of Appeals:[32]
Matters which involve settlement and distribution of the
estate of the decedent fall within the exclusive province of
the probate court in the exercise of its limited jurisdiction.
xxxx
It is clear that trial courts trying an ordinary action cannot
resolve to perform acts pertaining to a special
proceeding because it is subject to specific prescribed rules.
[Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and value of
Anastacias shareholdings will be undertaken by a probate court and not by a special
commercial court is completely consistent with the probate courts limited jurisdiction. It has
the power to enforce an accounting as a necessary means to its authority to determine the
properties included in the inventory of the estate to be administered, divided up, and
distributed. Beyond this, the determination of title or ownership over the subject shares
(whether belonging to Anastacia or Oscar) may be conclusively settled by the probate court
P a g e | 15
as a question of collation or advancement. We had occasion to recognize the courts authority
to act on questions of title or ownership in a collation or advancement situation in Coca v.
Pangilinan[33] where we ruled:
It should be clarified that whether a particular matter should be resolved by
the Court of First Instance in the exercise of its general jurisdiction or of its
limited probate jurisdiction is in reality not a jurisdictional question. In
essence, it is a procedural question involving a mode of practice "which may
be waived."
As a general rule, the question as to title to property should not be passed
upon in the testate or intestate proceeding. That question should be
ventilated in a separate action. That general rule has qualifications or
exceptions justified by expediency and convenience.
Thus, the probate court may provisionally pass upon in an intestate or testate
proceeding the question of inclusion in, or exclusion from, the inventory of a
piece of property without prejudice to its final determination in a separate
action.
Although generally, a probate court may not decide a question of title
or ownership, yet if the interested parties are all heirs, or the question is
one of collation or advancement, or the parties consent to the assumption
of jurisdiction by the probate court and the rights of third parties are not
impaired, the probate court is competent to decide the question of
ownership. [Citations omitted. Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one which may be classified
as an intra-corporate dispute and is beyond the jurisdiction of the special commercial court to
resolve. In short, Rodrigos complaint also fails the nature of the controversy test.
DERIVATIVE SUIT
Rodrigos bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction
on the RTC (as a special commercial court) if he cannot comply with the requisites for the
existence of a derivative suit. These requisites are:
a. the party bringing suit should be a shareholder during the time
of the act or transaction complained of, the number of shares not
being material;

b. the party has tried to exhaust intra-corporate remedies, i.e., has
made a demand on the board of directors for the appropriate
relief, but the latter has failed or refused to heed his plea; and
c. the cause of action actually devolves on the corporation; the
wrongdoing or harm having been or being caused to the
corporation and not to the particular stockholder bringing the
suit.[34]
Based on these standards, we hold that the allegations of the present complaint do not
amount to a derivative suit.
First, as already discussed above, Rodrigo is not a shareholder with respect to the
shareholdings originally belonging to Anastacia; he only stands as a transferee-heir whose
rights to the share are inchoate and unrecorded. With respect to his own individually-held
shareholdings, Rodrigo has not alleged any individual cause or basis as a shareholder on
record to proceed against Oscar.
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he
must allege with some particularity in his complaint that he has exhausted his remedies within
the corporation by making a sufficient demand upon the directors or other officers for
appropriate relief with the expressed intent to sue if relief is denied.[35]Paragraph 8 of the
complaint hardly satisfies this requirement since what the rule contemplates is the exhaustion
of remedies within the corporate setting:
8. As members of the same family, complainant Rodrigo
C. Reyes has resorted [to] and exhausted all legal means of
resolving the dispute with the end view of amicably settling the
case, but the dispute between them ensued.
Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation
due to Oscars acts. If indeed he illegally and fraudulently transferred Anastacias shares in his
own name, then the damage is not to the corporation but to his co-heirs; the wrongful transfer
did not affect the capital stock or the assets of Zenith. As already mentioned, neither has
Rodrigo alleged any particular cause or wrongdoing against the corporation that he can
champion in his capacity as a shareholder on record.[36]
In summary, whether as an individual or as a derivative suit, the RTC sitting as special
commercial court has no jurisdiction to hear Rodrigos complaint since what is involved is the
determination and distribution of successional rights to the shareholdings of Anastacia
Reyes. Rodrigos proper remedy, under the circumstances, is to institute a special proceeding
for the settlement of the estate of the deceased Anastacia Reyes, a move that is not
foreclosed by the dismissal of his present complaint.
P a g e | 16
WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of
Appeals dated May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional
Trial Court, Branch 142, Makati, docketed as Civil Case No. 00-1553, is
ordered DISMISSED for lack of jurisdiction.
x------------------------------------------------------------------------------------x
JOSELITO MUSNI PUNO
(as heir of the late Carlos Puno),
Petitioner,
- versus -
PUNO ENTERPRISES, INC., represented by JESUSA PUNO,
Respondent.
G.R. No. 177066 September 11, 2009
NACHURA, J.
Upon the death of a stockholder, the heirs do not automatically become stockholders
of the corporation; neither are they mandatorily entitled to the rights and privileges of a
stockholder. This, we declare in this petition for review on certiorari of the Court of Appeals
(CA) Decision[1] dated October 11, 2006 and Resolution dated March 6, 2007 in CA-G.R. CV
No. 86137.
The facts of the case follow:
Carlos L. Puno, who died on June 25, 1963, was an incorporator of respondent Puno
Enterprises, Inc. On March 14, 2003, petitioner Joselito Musni Puno, claiming to be an heir of
Carlos L. Puno, initiated a complaint for specific performance against respondent. Petitioner
averred that he is the son of the deceased with the latters common-law wife, Amelia Puno. As
surviving heir, he claimed entitlement to the rights and privileges of his late father as
stockholder of respondent. The complaint thus prayed that respondent allow petitioner to
inspect its corporate book, render an accounting of all the transactions it entered into from
1962, and give petitioner all the profits, earnings, dividends, or income pertaining to the
shares of Carlos L. Puno.[2]
Respondent filed a motion to dismiss on the ground that petitioner did not have the
legal personality to sue because his birth certificate names him as Joselito Musni Muno.
Apropos, there was yet a need for a judicial declaration that Joselito Musni Puno and Joselito
Musni Muno were one and the same.
 P a g e | 17

The court ordered that the proceedings be held in abeyance, ratiocinating that RELIEFS DEMANDED HE BEING THE HEIR OF THE LATE
petitioners certificate of live birth was no proof of his paternity and relation to Carlos L. Puno. CARLOS PUNO, ONE OF THE INCORPORATORS [OF]
RESPONDENT CORPORATION.
Petitioner submitted the corrected birth certificate with the name Joselito M. Puno,
certified by the Civil Registrar of the City of Manila, and the Certificate of Finality thereof. To II. HONORABLE COURT OF APPEALS ERRED IN RULING THAT
hasten the disposition of the case, the court conditionally admitted the corrected birth FILIATION OF JOSELITO PUNO, THE PETITIONER[,] IS NOT
certificate as genuine and authentic and ordered respondent to file its answer within fifteen DULY PROVEN OR ESTABLISHED.
days from the order and set the case for pretrial.[3]
III. THE HONORABLE COURT ERRED IN NOT RULING THAT
On October 11, 2005, the court rendered a Decision, the dispositive portion of which JOSELITO MUNO AND JOSELITO PUNO REFERS TO THE ONE
reads: AND THE SAME PERSON.

WHEREFORE, judgment is hereby rendered ordering Jesusa Puno

and/or Felicidad Fermin to allow the plaintiff to inspect the corporate books
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT
and records of the company from 1962 up to the present including the
RULING THAT WHAT RESPONDENT MERELY DISPUTES IS THE
financial statements of the corporation.
SURNAME OF THE PETITIONER WHICH WAS MISSPELLED AND
THE FACTUAL ALLEGATION E.G. RIGHTS OF PETITIONER AS
HEIR OF CARLOS PUNO ARE DEEMED ADMITTED
The costs of copying shall be shouldered by the plaintiff. Any
HYPOTHETICALLY IN THE RESPONDENT[S] MOTION TO
expenses to be incurred by the defendant to be able to comply with this order
DISMISS.
shall be the subject of a bill of costs.
V. THE HONORABLE COURT OF APPEALS THEREFORE
ERRED I[N] DECREEING THAT PETITIONER IS NOT ENTITLED
SO ORDERED.[4] TO INSPECT THE CORPORATE BOOKS OF DEFENDANT
CORPORATION.[7]
On appeal, the CA ordered the dismissal of the complaint in its Decision dated October 11,
2006. According to the CA, petitioner was not able to establish the paternity of and his filiation The petition is without merit. Petitioner failed to establish the right to inspect
to Carlos L. Puno since his birth certificate was prepared without the intervention of and the respondent corporations books and receive dividends on the stocks owned by Carlos L.
participatory acknowledgment of paternity by Carlos L. Puno. Accordingly, the CA said that Puno.
petitioner had no right to demand that he be allowed to examine respondents books.
Petitioner anchors his claim on his being an heir of the deceased
Moreover, petitioner was not a stockholder of the corporation but was merely claiming rights
stockholder. However, we agree with the appellate court that petitioner was not able to prove
as an heir of Carlos L. Puno, an incorporator of the corporation. His action for specific
satisfactorily his filiation to the deceased stockholder; thus, the former cannot claim to be an
performance therefore appeared to be premature; the proper action to be taken was to prove
heir of the latter.
the paternity of and his filiation to Carlos L. Puno in a petition for the settlement of the estate
of the latter.[5] Incessantly, we have declared that factual findings of the CA supported by
substantial evidence, are conclusive and binding.[8] In an appeal via certiorari, the Court may
Petitioners motion for reconsideration was denied by the CA in its Resolution [6] dated March
not review the factual findings of the CA. It is not the Courts function under Rule 45 of the
6, 2007.
Rules of Court to review, examine, and evaluate or weigh the probative value of the evidence
In this petition, petitioner raises the following issues: presented.[9]

I. THE HONORABLE COURT OF APPEALS ERRED IN NOT A certificate of live birth purportedly identifying the putative father is not competent
RULING THAT THE JOSELITO PUNO IS ENTITLED TO THE evidence of paternity when there is no showing that the putative father had a hand in the

preparation of the certificate. The local civil registrar has no authority to record the paternity of
an illegitimate child on the information of a third person. [10] As correctly observed by the CA,
only petitioners mother supplied the data in the birth certificate and signed the same. There
was no evidence that Carlos L. Puno acknowledged petitioner as his son.
As for the baptismal certificate, we have already decreed that it can only serve as
evidence of the administration of the sacrament on the date specified but not of the veracity
of the entries with respect to the childs paternity. [11]
In any case, Sections 74 and 75 of the Corporation Code enumerate the persons
who are entitled to the inspection of corporate books, thus
Sec. 74. Books to be kept; stock transfer agent. x x x.
The records of all business transactions of the corporation and the
minutes of any meeting shall be open to the inspection of any director,
trustee, stockholder or member of the corporation at reasonable hours on
business days and he may demand, in writing, for a copy of excerpts from
said records or minutes, at his expense.
xxxx
Sec. 75. Right to financial statements. Within ten (10) days from
receipt of a written request of any stockholder or member, the corporation
shall furnish to him its most recent financial statement, which shall include a
balance sheet as of the end of the last taxable year and a profit or loss of
statement for said taxable year, showing in reasonable detail its assets and
liabilities and the result of its operations.[12]
The stockholders right of inspection of the corporations books and records is based
upon his ownership of shares in the corporation and the necessity for self-protection. After all,
a shareholder has the right to be intelligently informed about corporate affairs. [13] Such right
rests upon the stockholders underlying ownership of the corporations assets and property.[14]
Similarly, only stockholders of record are entitled to receive dividends declared by the
corporation, a right inherent in the ownership of the shares. [15]
Upon the death of a shareholder, the heirs do not automatically become stockholders
of the corporation and acquire the rights and privileges of the deceased as shareholder of the
corporation. The stocks must be distributed first to the heirs in estate proceedings, and the
transfer of the stocks must be recorded in the books of the corporation. Section 63 of the
Corporation Code provides that no transfer shall be valid, except as between the parties, until
the transfer is recorded in the books of the corporation.[16] During such interim period, the
heirs stand as the equitable owners of the stocks, the executor or administrator duly
P a g e | 18
appointed by the court being vested with the legal title to the stock. [17]Until a settlement and
division of the estate is effected, the stocks of the decedent are held by the administrator or
executor.[18] Consequently, during such time, it is the administrator or executor who is entitled
to exercise the rights of the deceased as stockholder.
Thus, even if petitioner presents sufficient evidence in this case to establish that he is
the son of Carlos L. Puno, he would still not be allowed to inspect respondents books and be
entitled to receive dividends from respondent, absent any showing in its transfer book that
some of the shares owned by Carlos L. Puno were transferred to him. This would only be
possible if petitioner has been recognized as an heir and has participated in the settlement of
the estate of the deceased.
Corollary to this is the doctrine that a determination of whether a person, claiming
proprietary rights over the estate of a deceased person, is an heir of the deceased must be
ventilated in a special proceeding instituted precisely for the purpose of settling the estate of
the latter. The status of an illegitimate child who claims to be an heir to a decedents estate
cannot be adjudicated in an ordinary civil action, as in a case for the recovery of
property.[19] The doctrine applies to the instant case, which is one for specific performance to
direct respondent corporation to allow petitioner to exercise rights that pertain only to the
deceased and his representatives.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals
Decision dated October 11, 2006 and Resolution dated March 6, 2007 are AFFIRMED.
HEIRS OF ARTURO REYES, G .R . No. 17 6 47 4
represented by Evelyn R. San
Buenaventura,
Petitioners, November 27, 2008
- versus -
ELENA SOCCO-BELTRAN,
Res p on d en t.
x-------------------------------------------------x
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Decision[1] dated 31 January 2006 rendered by the Court of Appeals in CA-G.R. SP No.

87066, which affirmed the Decision[2] dated 30 June 2003 of the Office of the President, in
O.P. Case No. 02-A-007, approving the application of respondent Elena Socco-Beltran to
purchase the subject property.
The subject property in this case is a parcel of land originally identified as Lot No. 6-
B, situated in Zamora Street, Dinalupihan, Bataan, with a total area of 360 square meters. It
was originally part of a larger parcel of land, measuring 1,022 square meters, allocated to the
Spouses Marcelo Laquian and Constancia Socco (Spouses Laquian), who paid for the same
with Japanese money. When Marcelo died, the property was left to his
wife Constancia. Upon Constancias subsequent death, she left the original parcel of land,
along with her other property, with her heirs her siblings, namely: Filomena Eliza Socco,
Isabel Socco de Hipolito, Miguel R. Socco, and Elena Socco-Beltran.[3] Pursuant to
an unnotarized document entitled Extrajudicial Settlement of the Estate of the
Deceased Constancia R. Socco, executed by Constancias heirs sometime in 1965, the parcel
of land was partitioned into three lotsLot No. 6-A, Lot No. 6-B, and Lot No. 6-C.[4] The subject
property, Lot No. 6-B, was adjudicated to respondent, but no title had been issued in her
name.
On 25 June 1998, respondent Elena Socco-Beltran filed an application for the
purchase of Lot No. 6-B before the Department of Agrarian Reform (DAR), alleging that it was
adjudicated in her favor in the extra-judicial settlement of Constancia Soccos estate.[5]
Petitioners herein, the heirs of the late Arturo Reyes, filed their protest to respondents
petition before the DAR on the ground that the subject property was sold by respondents
brother, Miguel R. Socco, in favor of their father, Arturo Reyes, as evidenced by the Contract
to Sell, dated 5 September 1954, stipulating that:[6]
That I am one of the co-heirs of the Estate of the
deceased Constancia Socco; and that I am to inherit as such a portion of
her lot consisting of Four Hundred Square Meters (400) more or less located
on the (sic) Zamora St., Municipality of Dinalupihan, Province of Bataan,
bounded as follows:
xxxx
That for or in consideration of the sum of FIVE PESOS (P5.00) per square
meter, hereby sell, convey and transfer by way of this conditional sale the
said 400 sq.m. more or less unto Atty. Arturo C. Reyes, his heirs,
administrator and assigns x x x. (Emphasis supplied.)
P a g e | 19
Petitioners averred that they took physical possession of the subject property in 1954 and
had been uninterrupted in their possession of the said property since then.
Legal Officer Brigida Pinlac of the DAR Bataan Provincial Agrarian Reform Office
conducted an investigation, the results of which were contained in her Report/
Recommendation dated 15 April 1999. Other than recounting the afore-mentioned facts,
Legal Officer Pinlac also made the following findings in her Report/Recommendation:[7]
Further investigation was conducted by the undersigned and based
on the documentary evidence presented by both parties, the following facts
were gathered: that the house of [the] Reyes family is adjacent to the
landholding in question and portion of the subject property consisting of
about 15 meters [were] occupied by the heirs of Arturo Reyes were a kitchen
and bathroom [were] constructed therein; on the remaining portion a skeletal
form made of hollow block[s] is erected and according to the heirs of late
Arturo Reyes, this was constructed since the year (sic) 70s at their expense;
that construction of the said skeletal building was not continued and left
unfinished which according to the affidavit of Patricia Hipolito the Reyes
family where (sic) prevented by Elena Socco in their attempt of occupancy of
the subject landholding; (affidavit of Patricia Hipolito is hereto attached as
Annex F); that Elena Socco cannot physically and personally occupy the
subject property because of the skeletal building made by the Reyes family
who have been requesting that they be paid for the cost of the construction
and the same be demolished at the expense of Elena Socco; that according
to Elena Socco, [she] is willing to waive her right on the portion where [the]
kitchen and bathroom is (sic) constructed but not the whole of Lot [No.] 6-B
adjudicated to her; that the Reyes family included the subject property to the
sworn statement of value of real properties filed before the municipality
of Dinalupihan, Bataan, copies of the documents are hereto attached as
Annexes G and H; that likewise Elena Socco has been continuously and
religiously paying the realty tax due on the said property.
In the end, Legal Officer Pinlac recommended the approval of respondents petition
for issuance of title over the subject property, ruling that respondent was qualified to own the
subject property pursuant to Article 1091 of the New Civil Code.[8] Provincial Agrarian Reform
Officer (PARO) Raynor Taroy concurred in the said recommendation in
his Indorsement dated 22 April 1999. [9]
In an Order dated 15 September 1999, DAR Regional Director Nestor R. Acosta,
however, dismissed respondents petition for issuance of title over the subject property on the

ground that respondent was not an actual tiller and had abandoned the said property for 40
years; hence, she had already renounced her right to recover the
same.[10] The dispositive part of the Order reads:
1. DISMISSING the claims of Elena Socco-Beltran, duly represented
by Myrna Socco for lack of merit;
2. ALLOCATING Lot No. 6-B under Psd-003-008565 with an area of
360 square meters, more or less, situated Zamora
Street, Dinalupihan, Bataan, in favor of the heirs of Arturo Reyes.
3. ORDERING the complainant to refrain from any act tending to
disturb the peaceful possession of herein respondents.
4. DIRECTING the MARO of Dinalupihan, Bataan to process the
pertinent documents for the issuance of CLOA in favor of the heirs of Arturo
Reyes.[11]
Respondent filed a Motion for Reconsideration of the foregoing Order, which was
denied by DAR Regional Director Acosta in another Order dated 15 September 1999.[12]
Respondent then appealed to the Office of the DAR Secretary. In an Order, dated 9
November 2001, the DAR Secretary reversed the Decision of DAR Regional Director Acosta
after finding that neither petitioners predecessor-in-interest, Arturo Reyes, nor respondent
was an actual occupant of the subject property. However, since it was respondent who
applied to purchase the subject property, she was better qualified to own said property as
opposed to petitioners, who did not at all apply to purchase the same. Petitioners were further
disqualified from purchasing the subject property because they were not landless. Finally,
during the investigation of Legal Officer Pinlac, petitioners requested that respondent pay
them the cost of the construction of the skeletal house they built on the subject property. This
was construed by the DAR Secretary as a waiver by petitioners of their right over the subject
property.[13] In the said Order, the DAR Secretary ordered that:
WHEREFORE, premises considered, the September 15, 1999 Order
is hereby SET ASIDE and a new Order is hereby issued APPROVING the
application to purchase Lot [No.] 6-B of Elena Socco-Beltran.[14]
Petitioners sought remedy from the Office of the President by appealing the 9
November 2001 Decision of the DAR Secretary. Their appeal was docketed as O.P. Case
No. 02-A-007. On 30 June 2003, the Office of the President rendered its Decision denying
P a g e | 20
petitioners appeal and affirming the DAR Secretarys Decision.[15] The fallo of the Decision
reads:
WHEREFORE, premises considered, judgment appealed from
is AFFIRMED and the instant appeal DISMISSED.[16]
Petitioners Motion for Reconsideration was likewise denied by the Office of the
President in a Resolution dated 30 September 2004.[17] In the said Resolution, the Office of
the President noted that petitioners failed to allege in their motion the date when they
received the Decision dated 30 June 2003. Such date was material considering that the
petitioners Motion for Reconsideration was filed only on 14 April 2004, or almost nine months
after the promulgation of the decision sought to be reconsidered. Thus, it ruled that
petitioners Motion for Reconsideration, filed beyond fifteen days from receipt of the decision
to be reconsidered, rendered the said decision final and executory.
Consequently, petitioners filed an appeal before the Court of Appeals, docketed as
CA-G.R. SP No. 87066. Pending the resolution of this case, the DAR already issued on 8
July 2005 a Certificate of Land Ownership Award (CLOA) over the subject property in favor of
the respondents niece and representative, Myrna Socco-Beltran.[18]Respondent passed away
on 21 March 2001,[19] but the records do not ascertain the identity of her legal heirs and her
legatees.
Acting on CA-G.R. SP No. 87066, the Court of Appeals subsequently promulgated its
Decision, dated 31 January 2006, affirming the Decision dated 30 June 2003 of the Office of
the President. It held that petitioners could not have been actual occupants of the subject
property, since actual occupancy requires the positive act of occupying and tilling the land,
not just the introduction of an unfinished skeletal structure thereon. The Contract to Sell on
which petitioners based their claim over the subject property was executed by Miguel Socco,
who was not the owner of the said property and, therefore, had no right to transfer the
same. Accordingly, the Court of Appeals affirmed respondents right over the subject property,
which was derived form the original allocatees thereof.[20] The fallo of the said Decision reads:
WHEREFORE, premises considered, the instant PETITION FOR
REVIEW is DISMISSED. Accordingly, the Decision dated 30 June 2003 and
the Resolution dated 30 December 2004 both issued by the Office of the
President are hereby AFFIRMED in toto.[21]
The Court of Appeals denied petitioners Motion for Reconsideration of its Decision in
a Resolution dated 16 August 2006.[22]

Hence, the present Petition, wherein petitioners raise the following issues:
I Sell. It was unmistakably stated in the Contract and made clear to both parties thereto that
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
THE FINDINGS OF THE OFFICE OF THE PRESIDENT THAT THE SUBJECT LOT IS
VACANT AND THAT PETITIONERS ARE NOT ACTUAL OCCUPANTS THEREOF BY
DENYING THE LATTERS CLAIM THAT THEY HAVE BEEN IN OPEN, CONTINUOUS,
EXCLUSIVE, NOTORIOUS AND AVDERSE POSSESSION THEREOF SINCE 1954 OR
FOR MORE THAN THIRTY (30) YEARS.
II
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT
PETITIONERS CANNOT LEGALLY ACQUIRE THE SUBJECT PROPERTY AS THEY ARE
NOT CONSIDERED LANDLESS AS EVIDENCED BY A TAX DECLARATION.
III
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT WHATEVER
RESERVATION WE HAVE OVER THE RIGHT OF MYRNA SOCCO TO SUCCEED WAS
ALREADY SETTLED WHEN NO LESS THAN MIGUEL SOCCO (PREDECESSOR-IN
INTEREST OF HEREIN PETITIONERS) EXECUTED HIS WAIVER OF RIGHT DATED
APRIL 19, 2005 OVER THE SUBJECT PROPERTY IN FAVOR OF MYRNA SOCCO.
IV
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DENIED PETITIONERS
MOTION FOR NEW TRIAL THEREBY BRUSHING ASIDE THE FACT THAT MYRNA V.
SOCCO-ARIZO GROSSLY MISREPRESENTED IN HER INFORMATION SHEET OF
BENEFICIARIES AND APPLICATION TO PURCHASE LOT IN LANDED ESTATES THAT
SHE IS A FILIPINO CITIZEN, WHEN IN TRUTH AND IN FACT, SHE IS ALREADY AN
AMERICAN NATIONAL.[23]
The main issue in this case is whether or not petitioners have a better right to the
subject property over the respondent. Petitioners claim over the subject property is anchored
on the Contract to Sell executed between Miguel Socco and Arturo Reyes on 5 September
1954. Petitioners additionally allege that they and their predecessor-in-interest, Arturo Reyes,
have been in possession of the subject lot since 1954 for an uninterrupted period of more
than 40 years.
P a g e | 21
The Court is unconvinced.
Petitioners cannot derive title to the subject property by virtue of the Contract to
the vendor, Miguel R. Socco, was not yet the owner of the subject property and was merely
expecting to inherit the same as his share as a co-heir of Constancias estate.[24] It was also
declared in the Contract itself that Miguel R. Soccos conveyance of the subject to the buyer,
Arturo Reyes, was a conditional sale. It is, therefore, apparent that the sale of the subject
property in favor of Arturo Reyes was conditioned upon the event that Miguel Socco would
actually inherit and become the owner of the said property. Absent such occurrence, Miguel
R. Socco never acquired ownership of the subject property which he could validly transfer to
Arturo Reyes.
Under Article 1459 of the Civil Code on contracts of sale, The thing must be licit and
the vendor must have a right to transfer ownership thereof at the time it is delivered.The law
specifically requires that the vendor must have ownership of the property at the time it is
delivered. Petitioners claim that the property was constructively delivered to them in 1954 by
virtue of the Contract to Sell. However, as already pointed out by this Court, it was explicit in
the Contract itself that, at the time it was executed, Miguel R. Socco was not yet the owner of
the property and was only expecting to inherit it. Hence, there was no valid sale from which
ownership of the subject property could have transferred from Miguel Socco to Arturo
Reyes. Without acquiring ownership of the subject property, Arturo Reyes also could not have
conveyed the same to his heirs, herein petitioners.
Petitioners, nevertheless, insist that they physically occupied the subject lot for more
than 30 years and, thus, they gained ownership of the property through acquisitive
prescription, citing Sandoval v. Insular Government [25] and San Miguel Corporation v. Court
of Appeals. [26]
In Sandoval, petitioners therein sought the enforcement of Section 54, paragraph 6 of
Act No. 926, otherwise known as the Land Registration Act, which required -- for the issuance
of a certificate of title to agricultural public lands -- the open, continuous, exclusive, and
notorious possession and occupation of the same in good faith and under claim of ownership
for more than ten years. After evaluating the evidence presented, consisting of the
testimonies of several witnesses and proof that fences were constructed around the property,
the Court in the afore-stated case denied the petition on the ground that petitioners failed to
prove that they exercised acts of ownership or were in open, continuous, and peaceful
possession of the whole land, and had caused it to be enclosed to the exclusion of other
persons. It further decreed that whoever claims such possession shall exercise acts of
dominion and ownership which cannot be mistaken for the momentary and accidental
enjoyment of the property. [27]

In San Miguel Corporation, the Court reiterated the rule that the open, exclusive, and
undisputed possession of alienable public land for the period prescribed by law creates the
legal fiction whereby land ceases to be public land and is, therefore, private property. It
stressed, however, that the occupation of the land for 30 years must
be conclusivelyestablished. Thus, the evidence offered by petitioner therein tax declarations,
receipts, and the sole testimony of the applicant for registration, petitioners predecessor-in-
interest who claimed to have occupied the land before selling it to the petitioner were
considered insufficient to satisfy the quantum of proof required to establish the claim of
possession required for acquiring alienable public land.[28]
As in the two aforecited cases, petitioners herein were unable to prove actual
possession of the subject property for the period required by law. It was underscored in San
Miguel Corporation that the open, continuous, exclusive, and notorious occupation of property
for more than 30 years must be no less than conclusive, such quantum of proof being
necessary to avoid the erroneous validation of actual fictitious claims of possession over the
property that is being claimed.[29]
In the present case, the evidence presented by the petitioners falls short of being
conclusive. Apart from their self-serving statement that they took possession of the subject
property, the only proof offered to support their claim was a general statement made in the
letter[30] dated 4 February 2002 of Barangay Captain Carlos Gapero, certifying that Arturo
Reyes was the occupant of the subject property since peace time and at present. The
statement is rendered doubtful by the fact that as early as 1997, when respondent filed her
petition for issuance of title before the DAR, Arturo Reyes had already died and was already
represented by his heirs, petitioners herein.
Moreover, the certification given by Barangay Captain Gapero that Arturo Reyes
occupied the premises for an unspecified period of time, i.e., since peace time until the
present, cannot prevail over Legal Officer Pinlacs more particular findings in her
Report/Recommendation. Legal Officer Pinlac reported that petitioners admitted that it was
only in the 1970s that they built the skeletal structure found on the subject property. She also
referred to the averments made by Patricia Hipolito in an Affidavit,[31] dated 26 February
1999, that the structure was left unfinished because respondent prevented petitioners from
occupying the subject property. Such findings disprove petitioners claims that their
predecessor-in-interest, Arturo Reyes, had been in open, exclusive, and continuous
possession of the property since 1954. The adverted findings were the result of Legal
Officer Pinlacs investigation in the course of her official duties, of matters within her expertise
which were later affirmed by the DAR Secretary, the Office of the President, and the Court of
Appeals. The factual findings of such administrative officer, if supported by evidence, are
entitled to great respect.[32]
P a g e | 22
In contrast, respondents claim over the subject property is backed by sufficient
evidence. Her predecessors-in-interest, the spouses Laquian, have been identified as the
original allocatees who have fully paid for the subject property. The subject property was
allocated to respondent in the extrajudicial settlement by the heirs of Constancias estate.The
document entitled Extra-judicial Settlement of the Estate of the
Deceased Constancia Socco was not notarized and, as a private document, can only bind the
parties thereto.However, its authenticity was never put into question, nor was its legality
impugned. Moreover, executed in 1965 by the heirs of Constancia Socco, or more than 30
years ago, it is an ancient document which appears to be genuine on its face and therefore its
authenticity must be upheld.[33] Respondent has continuously paid for the realty tax due on
the subject property, a fact which, though not conclusive, served to strengthen her claim over
the property.[34]
From the foregoing, it is only proper that respondents claim over the subject property
be upheld. This Court must, however, note that the Order of the DAR Secretary, dated 9
November 2001, which granted the petitioners right to purchase the property, is flawed and
may be assailed in the proper proceedings. Records show that the DAR affirmed that
respondents predecessors-in-interest, Marcelo Laquian and Constancia Socco, having been
identified as the original allocatee, have fully paid for the subject property as provided under
an agreement to sell. By the nature of a contract or agreement to sell, the title over the
subject property is transferred to the vendee upon the full payment of the stipulated
consideration. Upon the full payment of the purchase price, and absent any showing that
the allocatee violated the conditions of the agreement, ownership of the subject land should
be conferred upon the allocatee.[35] Since the extrajudicial partition
transferring Constancia Soccos interest in the subject land to the respondent is valid, there is
clearly no need for the respondent to purchase the subject property, despite the application
for the purchase of the property erroneously filed by respondent. The only act which remains
to be performed is the issuance of a title in the name of her legal heirs, now that she is
deceased.
Moreover, the Court notes that the records have not clearly established the right of
respondents representative, Myrna Socco-Arizo, over the subject property. Thus, it is not
clear to this Court why the DAR issued on 8 July 2005 a CLOA[36] over the subject property in
favor of Myrna Socco-Arizo. Respondents death does not automatically transmit her rights to
the property to Myrna Socco-Beltran. Respondent only authorized Myrna Socco-Arizo,
through a Special Power of Attorney[37] dated 10 March 1999, to represent her in the present
case and to administer the subject property for her benefit. There is nothing in the Special
Power of Attorney to the effect that Myrna Socco-Arizo can take over the subject property as
owner thereof upon respondents death. That Miguel V. Socco, respondents only nephew, the
son of the late Miguel R. Socco, and Myrna Socco-Arizosbrother, executed a waiver of his
right to inherit from respondent, does not automatically mean that the subject property will go

to Myrna Socco-Arizo, absent any proof that there is no other qualified heir to respondents
estate. Thus, this Decision does not in any way confirm the issuance of the CLOA in favor of
Myrna Socco-Arizo, which may be assailed in appropriate proceedings.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed
Decision of the Court of Appeals in CA-G.R. SP No. 87066, promulgated on 31 January
2006, is AFFIRMED with MODIFICATION. This Court withholds the confirmation of the
validity of title over the subject property in the name of Myrna Socco-Arizo pending
determination of respondents legal heirs in appropriate proceedings. No costs.
G.R. No. 104223 July 12, 2001
TIBURCIO SAMONTE, petitioner,
vs.
COURT OF APPEALS, EUGENIA DANGO GADIANO, TEOFILO GADIANO, PETRONILO
DANGO FELICIANA DANGO, NONILO MARAVE and GERONIMO DANGO, respondents.
KAPUNAN, J.:
Tiburcio Samonte (petitioner) filed this petition for review on certiorari seeking to reverse and
set aside the Decision, dated November 29, 1991, of the Court of Appeals (CA) in CA-G.R
CV No. 16645. He likewise seeks the reversal of CA Resolution, dated February 21, 1992,
which denied his motion for reconsideration.
The parcel of land (Lot No.216) subject of this dispute is situated in Nasipit, Agusan del
Norte, and originally covered by Original Certificate of Title No. RO-238(555) issue in the
names Apolonia Abao and her daughter Irenea Tolero, pro indiviso. It contained an area of
12,753 square meters. Two cases were separately filed in the Regional Trial Court, Branch II
of Nasipit, Agusan del Norte involving the entire lot. Both cases were filed by the surviving
heirs of Apolonia Abao and Irenea Tolero.1 These heirs, children of Irenea Tolero and grand
children of Apolonia Abao, are the respondents in this case.1âwphi1.nêt
The first case, Civil Case No.1672, was an action for quieting of title and recovery of
possession of a parcel of land which originally formed part of the entire property. Said parcel
of land was denominated as Lot 216-B-2-G and covered by Transfer Certificate of Title (TCT)
No. RT-899 in the name of Irenea Tolero. The defendants named therein were spouses
Andres and Amanda Lacho.
The second case, Civil Case No.1816, is similarly an action for quieting of title and recovery
of possession. Unlike the first case, however, Civil Case No.1816 involve the entire Lot 216.
P a g e | 23
The complaint therein sought the annulment of several certificates of title covering portions of
Lot 216 and the reinstatement of OCT No. RO-238 (555). The defendants in the second wase
were Nicolas Jadol, Beatriz Jadol, Jacobo Tagorda, Henry Jadol, Aurelio Rotor and herein
petitioner.
The present case stems only from the latter case (Civil Case No. 1816) and, as culled from
the CA decision, the facts relevant herein are as follows:
Civil Case No.1816
(CA-G.R CV No. 16645)
From the pleadings and the evidence adduced by the parties the following are not
disputed or deemed admitted: that Lot 216 of the Cadastral survey of Nasipit,
containing an area of 12,753 square meters, more or less, situated at Anislagan,
Nasipit, Agusan (now del Norte) is covered by Original Certificate of Title (OCT) No.
R0-238 issue in 1927 in the name of Apolonia Abao and Irenea Tolero in equal
undivided shares (Exhibit E); that OCT No. RO-238 was administratively
reconstituted on August 8, 1957 and the assigned number of the reconstituted title is
OCT No. RO-238 (555) (Exhibit D identical to Exhibit-Samonte); that on August 8,
1957, based on an affidavit of Extra-judicial Settlement and Confirmation of Sale
(Exhibit D-1), OCT No. RO-238 (555) was cancelled and lieu thereof Transfer
Certificate of Title (TCT) No. RT-476 was issued in the name of Irenea Tolero, 1/2
share and Nicolas Jadol, 1/2 share (Exhibit C identical to Exhibit 3-Samonte); that on
February 13, 1959, based on subdivision plan, subdividing Lot 216 into Lot 216-A
and Lot 216-B, the Register of Deeds of Agusan (now del Norte) cancelled TCT No.
RT-476 and issued in its place TCT No. RT-553 in the name of Tiburcio Samonte for
Lot 216-A (Exhibit 2-Samonte) and TCT No. RT-554, Irenea Tolero and Nicolas Jadol
for Lot 216-B (Exhibit B); that on February 13, 1959 based on a subdivision plan
subdividing Lot 216-B to 216-B-1 and 216-B-2, TCT No. RT-554 was cancelled and
in its place TCT No. RT-555 was issued in the name of Jacob B. Tagorda for Lot 216-
B-1 and TCT No. 556 in the name of Irenea Tolero and Nicolas Jadol for Lot 216- B-
2.
Plaintiffs in their evidence claim ownership over the entire lot, Lot 216, as one-
half(1/2) of the area of 12, 753 square meters was registered in the name of their
mother Irenea Tolero (Exhibit E) the other half was registered in the name of their
and grandmother, Apolonia Abao. After Apolonia Abao died during the Japanese
occupation and Irenea Tolero died in 1945, they inherited and became owners of Lot
216. Plaintiffs questioned the series of cancellation of the certificate of title starting
 P a g e | 24

from OCT No. RO-238 (555) and the Deed of Extrajudicial Settlement and b) directing the reinstatement of Original Certificate of Title No. RO-238(555);
Confirmation of Sale executed by Ignacio Atupan on August 7, 1957 (Exhibit D-1)
adjudicating one-half(1/2) of the area of Lot 216. Plaintiffs maintain that Ignacio c) directing the cancellation of Transfer Certificate of Title No. RT - 476 and all
Atupan is not a son of Apolonia Abao but he only grew up while living with Apolonia subsequent certificates of title derived therefrom which are all declared null and void;
Abao. That when Lot 216 was subdivided into two (2) lots, Lot 216-A and Lot 216-A
(sic) which was made as one of the basis in the cancellation of TCT No. 476 and d) declaring the subdivision survey of Lot 216 null and void and ineffectual;
issuance of TCT No. 553 and TCT No. 554 on February 13, 1959, the plaintiffs or
their predecessors-in-interest have not signed any document agreeing as to the e) directing the defendants to vacate the premises of Lot 216 and to remove all their
manner how Lot 216 was to be divided, nor have they consented to the partition of improvements therefrom as they are builders in bad faith;
the same.
f) directing defendants Jadol and Samonte to pay jointly and severally the plaintiffs
Defendant Samonte in his evidence claim that he bought portions of the Lot 216 in the sum of P20,000.00 for the use and occupation of the land;
good faith as he was made to believe that all the papers in possession of his vendors
were all in order. One of the documents presented by him is a Deed of Absolute Sale g) directing defendants Jadol and Samonte to pay P5,000.00 as attorney's fees;
executed in 1939 (Exhibit 8-Samonte ). He has been in open, continuous, adverse
and exclusive possession of the portions of Lot 216 he bought for more than 20 years h) ordering the dismissal of the counterclaims of defendants; and
and have declared the land for taxation purposes (Exhibits 5 and 7-Samonte) and
have paid the real estate taxes thereon (Exhibit 6 to 6-K, inclusive Samonte). The i) directing the defendants Jadol and Samonte to pay the costs.
portions he bought is now covered by TCT No. RT-553 (Exhibit 2-Samonte) and TCT
No. RT-1658 (Exhibit 4-Samonte).
SO ORDERED.3

Defendant Jadols claim that they became owners of one-half(1/2) portion of Lot 216
Plaintiffs were likewise declared the lawful owners of Lot 216-B-2-G in Civil Case No. 1672.
by purchase from Ignacio Atupan and Apolonia Abao on September 15, 1939 as
Defendants therein were ordered to, among others, vacate the premises and remove the
shown by a document notarized by Jacobo Bello (Exhibit 1-Jadol) and signed by
improvements made thereon.4
lrenea Tolero (Exhibit 1-D Jadol) as a witness. They were in possession since they
bought the land. The land is covered by Tax Declaration No. 1630 (Exhibit 2-Jadol)
The defendants in the two cases respectively appealed the aforesaid decisions to the CA.
and Tax Declaration No. 1676 (Exhibit 3-Jadol) in their name (Decision, pp. 36-39).2
The CA ordered the consolidation of the two appeals. Thereafter, the CA rendered the
decision of November 29, 1991 affirming the decisions of the trial court and dismissing the
Initially, the two cases were heard independently of each other. It was discovered, however,
appeals. Petitioner then filed the instant petition assailing particularly the decision in CA-G.R.
that they were intimately related. Accordingly, the court a quo jointly tried the two cases. After
CV No. 16645. He alleges that:
due trial, the trial court rendered separate decisions, both in favor of the plaintiffs therein. The
dispositive portion particularly of the decision in Civil Case No. 1816 reads:
I

Civil Case No. 1816

THE HONORABLE COURT OF APPEALS ERRED AS A MATTER OF LAW IN
DEPARTING FROM THE PREVAILING DOCTRINE SUPPORTED BY THE WEIGHT
IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiffs
OF AUTHORITIES THAT "THE DISCOVERY OF THE FRAUD IS DEEMED TO
and against the defendants:
HAVE TAKEN PLACE AT THE TIME OF THE REGISTRATION" (CARANTES VS.
COURT OF APPEALS, 76 SCRA 514);5
a) declaring plaintiffs co-owners of the entire of (sic ) Lot 216 being the surviving
heirs of Apolonia Abao and Irenea Tolero;
II

THE COURT OF APPEALS ERRED AS A MATTER OF LAW AND
JURISPRUDENCE IN NOT HOLDING THAT HEREIN PETITIONER WAS A BUYER
IN GOOD FAITH FOR VALUE, HENCE HE IS PROTECTED BY LAW.6
The petition is bereft of merit.
It is not disputed that Ignacio Atupan caused the fraudulent cancellation of OCT No. RO-238
(555). The trial court found that Atupan, on the basis of his Affidavit of Extrajudicial
Settlement and Confirmation Sale," adjudicated unto himself one-half of Lot 216 by
misrepresenting himself as the sole, heir of Apolonia Abao. Atupan, in said affidavit, likewise
confirmed the two deeds of sale allegedly executed by him and Abao on September 15 and
16, 1939, covering the latter's one-half lot in favor of Nicolas Jadol. The trial court found
Atupan's affidavit, dated August 7, 1957, to be tainted with fraud because he falsely claimed
therein that he was the sole heir of Abao when in fact, he merely lived and grew up with her.
Jadol and his wife, Beatriz, knew about this fact. Despite this knowledge, however, the Jadol
spouses still presented the affidavit of Atupan before the Register of Deeds of the Province of
Agusan when they caused the cancellation of OCT No. RO-238 (555) and issuance of TCT
No. RT-476 in their names covering that portion owned by Abao.
The trial court concluded that the incorporation of the statement in Atupan's affidavit
confirming the alleged execution of the aforesaid deeds of sale was intended solely to
facilitate the issuance of the certificate of title in favor of the Jadol spouses. It was noted that
the documents evidencing the alleged transactions were not presented in the Register of
Deeds. It was further pointed out that the Jadol spouses only sought the registration of these
transactions in 1957, eighteen (18) years supposedly took place or twelve (12) years after
Abao died.
Based on the foregoing facts, the CA, on appeal, ruled that the cancellation of OCT No. RO-
238(555) and the consequent issuance of TCT No. RT-476 in its place in the name of the
Jadol spouses were effected through fraudulent means and that they (spouses Jadol) not
only had actual knowledge of the fraud but were also guilty of bad faith. 7
Nonetheless, petitioner contends that respondent's action in the court a quo had already
prescribed. Generally, an action for reconveyance of real property based on the fraud may be
barred by the statute of limitations which require that the action must be commenced within
four (4) years from the discovery of fraud, and in case of registered land, such discovery is
deemed to have taken place from the date of the registration of title.8
Article 1456 of the Civil Code, however, provides:
P a g e | 25
Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an implied trust for the benefit of the person
from whom the property comes.
As it had been indubitably established that fraud attended the registration of a portion of the
subject property, it can be said that the Jadol spouses were trustees thereof on behalf of the
surviving heirs of Abao. An action based on implied or constructive trust prescribes in ten (10)
years from the time of its creation or upon the alleged fraudulent registration of the property. 9
Petitioner, as successor-in-interest of the Jadol Spouses, now argues that the respondents'
action for reconveyance, filed only in 1975, had long prescribed considering that the Jadol
spouses caused the registration of a portion of the subject lot in their names way back in
August 8, 1957. It is petitioner's contention that since eighteen years had already lapsed from
the issuance of TCT No. RT-476 until the time when respondents filed the action in the
court a quo in 1975, the same was time-barred.
Petitioner's defense of prescription is untenable. The general rule that the discovery of fraud
is deemed to have taken place upon the registration of real property because it is considered
a constructive notice to all persons"10does not apply in this case. Instead, the CA correctly
applied the ruling in Adille vs. Court of Appeals11 which is substantially on all fours with the
present case.
In Adille, petitioner therein executed a deed of extrajudicial partition misrepresenting himself
to be the sole heir of his mother when in fact she had other children. As a consequence,
petitioner therein was able to secure title to the land in his name alone. His siblings then filed
a case for partition on the ground that said petitioner was only a trustee on an implied trust of
the property. Among the issues resolved by the Court in that case was prescription. Said
petitioner registered the property in 1955 and the claim of private respondents therein was
presented in 1974.
The Court's resolution of whether prescription had set in therein is quite apropos to the
instant case:
It is true that registration under the Torrens system is constructive notice of title, but it
has likewise been our holding that the Torrens title does not furnish a shield for fraud.
It is therefore no argument to say that the act of registration is equivalent to notice of
repudiation, assuming there was one, notwithstanding the long-standing rule that
registration operates as a universal notice of title.

For the same reason, we cannot dismiss private respondents' claims commenced in
1974 over the estate registered in 1955. While actions to enforce a constructive trust
prescribes in ten years, reckoned from the date of the registration of the property, we,
as we said, are not prepared to count the period from such a date in this case. We
note the petitioner's sub rosa efforts to get hold of the property exclusively for himself
beginning with his fraudulent misrepresentation in his unilateral affidavit of
extrajudicial settlement that he is "the only heir and child of his mother Feliza with the
consequence that he was able to secure title in his name [alone]." Accordingly, we
hold that the right of the private respondents commenced from the time they actually
discovered the petitioner's act of defraudation. According to the respondent Court of
Appeals, they "came to know [of it] apparently only during the progress of the
litigation." Hence, prescription is not a bar. 12
In this case, the CA reckoned the prescriptive period from the time respondents had actually
discovered the fraudulent act of Atupan which was, as borne out by the records, only during
the trial of Civil Case No. 1672.13Citing Adille, the CA rightfully ruled that respondents' action
for reconveyance had not yet prescribed.
On the issue of whether petitioner is a buyer in bad faith as he claims, the Court likewise
holds in the negative: It was established during the trial by the court a quo that he knew that
respondents were the only surviving heirs of Irenea Tolero. Despite this knowledge, petitioner
still bought a portion of the subject lot from the Jadol spouses on July 20, 1957, when the
same was still registered under OCT No. RO-238(555) in the name of Abao and Tolero.
With respect to this particular lot therefore, petitioner cannot pretend to be a purchaser in
good faith. It is axiomatic that one who buys from a person who is not a registered owner is
not a purchaser in good faith. 14
Moreover, With respect to the other portion which petitioner bought from Jacobo Tagorda, the
trial court held that he was, as in the first case, a buyer in bad faith. The general rule is that a
person dealing with registered land has a right to rely on the Torrens certificate of title and to
dispense with the need of making further inquiries.15
This rule, however, admits of exceptions; when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to
induce a reasonably prudent man to inquire into the status of the title of the property in
litigation. 16 One who falls within the exception can neither be denominated an innocent
purchaser for value nor a purchaser in good faith; and hence does not merit the protection of
the law. 17
P a g e | 26
The CA established that petitioner is not a purchaser in good faith with respect to this portion
of the subject property, thus:
xxx While it may be true that the second portion was purchased by Samonte from
Tagorda in whose name the same was then registered under TCT No. RT -555,
Samonte was previously charged with the fact that Jadol lacked the capacity to
transmit title over any part of the subject property including that portion which the
latter sold to Tagorda. Thus, Samonte was clearly in bad faith when he sought the
registration of the deed of sale of July 10, 1972 which effected the cancellation of
TCT No. RT-555 and the issuance of TCT No. 1658 in his favor. xxx 18
Petitioner cannot now claim that he already acquired valid title to the property. The inscription
in the registry, to be effective, must be made in good faith. The defense of indefeasibility of a
Torrens Title does not extend to a transferee who takes the certificate of title with notice of a
flaw. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for
the law cannot be used as a shield for, frauds. 19
In fine, there is no compelling reason to deviate from the salutary rule that findings and
conclusions of the trial court, especially if affirmed by the appellate court, are accorded
utmost respect by this Court.1âwphi1.nêt
WHEREFORE, the instant petition is DENIED for lack of merit. The Decision, dated
November 29, 1991 of the Court of Appeals and its Resolution, dated February 21, 1992, in
CA-G.R. CV No. 16645 are AFFIRMED in toto.
G.R. No. L-58509 December 7, 1982
IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RICARDO B. BONILLA
deceased, MARCELA RODELAS, petitioner-appellant,
vs.
AMPARO ARANZA, ET AL., oppositors-appellees, ATTY. LORENZO
SUMULONG, intervenor.
RELOVA, J.:
This case was certified to this Tribunal by the Court of Appeals for final determination
pursuant to Section 3, Rule 50 of the Rules of Court.
As found by the Court of Appeals:

... On January 11, 1977, appellant filed a petition with the Court of First Instance of
Rizal for the probate of the holographic will of Ricardo B. Bonilla and the issuance of
letters testamentary in her favor. The petition, docketed as Sp. Proc. No. 8432, was
opposed by the appellees Amparo Aranza Bonilla, Wilferine Bonilla Treyes Expedita
Bonilla Frias and Ephraim Bonilla on the following grounds:
(1) Appellant was estopped from claiming that the deceased left a will by failing to
produce the will within twenty days of the death of the testator as required by Rule
75, section 2 of the Rules of Court;
(2) The alleged copy of the alleged holographic will did not contain a disposition of
property after death and was not intended to take effect after death, and therefore it
was not a will
(3) The alleged hollographic will itself,and not an alleged copy thereof, must be
produced, otherwise it would produce no effect, as held in Gam v. Yap, 104 Phil. 509;
and
(4 ) The deceased did not leave any will, holographic or otherwise, executed and
attested as required by law.
The appellees likewise moved for the consolidation of the case with another case Sp.
Proc. No, 8275). Their motion was granted by the court in an order dated April 4,
1977.
On November 13, 1978, following the consolidation of the cases, the appellees
moved again to dismiss the petition for the probate of the will. They argued that:
(1) The alleged holographic was not a last will but merely an instruction as to the
management and improvement of the schools and colleges founded by decedent
Ricardo B. Bonilla; and
(2) Lost or destroyed holographic wills cannot be proved by secondary evidence
unlike ordinary wills.
Upon opposition of the appellant, the motion to dismiss was denied by the court in its
order of February 23, 1979.
The appellees then filed a motion for reconsideration on the ground that the order
was contrary to law and settled pronouncements and rulings of the Supreme Court,
P a g e | 27
to which the appellant in turn filed an opposition. On July 23, 1979, the court set
aside its order of February 23, 1979 and dismissed the petition for the probate of the
will of Ricardo B. Bonilla. The court said:
... It is our considered opinion that once the original copy of the holographic will is
lost, a copy thereof cannot stand in lieu of the original.
In the case of Gam vs. Yap, 104 Phil. 509, 522, the Supreme Court held that 'in the
matter of holographic wills the law, it is reasonable to suppose, regards the document
itself as the material proof of authenticity of said wills.
MOREOVER, this Court notes that the alleged holographic will was executed on
January 25, 1962 while Ricardo B. Bonilla died on May 13, 1976. In view of the lapse
of more than 14 years from the time of the execution of the will to the death of the
decedent, the fact that the original of the will could not be located shows to our mind
that the decedent had discarded before his death his allegedly missing Holographic
Will.
Appellant's motion for reconsideration was denied. Hence, an appeal to the Court of Appeals
in which it is contended that the dismissal of appellant's petition is contrary to law and well-
settled jurisprudence.
On July 7, 1980, appellees moved to forward the case to this Court on the ground that the
appeal does not involve question of fact and alleged that the trial court committed the
following assigned errors:
I. THE LOWER COURT ERRED IN HOLDING THAT A LOST HOLOGRAPHIC WILL
MAY NOT BE PROVED BY A COPY THEREOF;
II. THE LOWER COURT ERRED IN HOLDING THAT THE DECEDENT HAS
DISCARDED BEFORE HIS DEATH THE MISSING HOLOGRAPHIC WILL;
III. THE LOWER COURT ERRED IN DISMISSING APPELLANT'S WILL.
The only question here is whether a holographic will which was lost or cannot be found can
be proved by means of a photostatic copy. Pursuant to Article 811 of the Civil Code, probate
of holographic wills is the allowance of the will by the court after its due execution has been
proved. The probate may be uncontested or not. If uncontested, at least one Identifying
witness is required and, if no witness is available, experts may be resorted to. If contested, at
least three Identifying witnesses are required. However, if the holographic will has been lost
 P a g e | 28

or destroyed and no other copy is available, the will can not be probated because the best
and only evidence is the handwriting of the testator in said will. It is necessary that there be a
comparison between sample handwritten statements of the testator and the handwritten will.
But, a photostatic copy or xerox copy of the holographic will may be allowed because
comparison can be made with the standard writings of the testator. In the case of Gam vs.
Yap, 104 PHIL. 509, the Court ruled that "the execution and the contents of a lost or
destroyed holographic will may not be proved by the bare testimony of witnesses who have
seen and/or read such will. The will itself must be presented; otherwise, it shall produce no
effect. The law regards the document itself as material proof of authenticity." But, in Footnote
8 of said decision, it says that "Perhaps it may be proved by a photographic or photostatic
copy. Even a mimeographed or carbon copy; or by other similar means, if any, whereby the
authenticity of the handwriting of the deceased may be exhibited and tested before the
probate court," Evidently, the photostatic or xerox copy of the lost or destroyed holographic
will may be admitted because then the authenticity of the handwriting of the deceased can be
determined by the probate court.
WHEREFORE, the order of the lower court dated October 3, 1979, denying appellant's
motion for reconsideration dated August 9, 1979, of the Order dated July 23, 1979,
dismissing her petition to approve the will of the late Ricardo B. Bonilla, is hereby SET
ASIDE.
The earlier Decision was rendered by the RTC of Quezon City, Branch 94, 2 in Sp.
Proc. No. Q-37171, and the instrument submitted for probate is the holographic will of
the late Annie Sand, who died on November 25, 1982.
In the will, decedent named as devisees, the following: petitioners Roberto and Thelma Ajero,
private respondent Clemente Sand, Meriam S. Arong, Leah Sand, Lilia Sand, Edgar Sand, Fe
Sand, Lisa S. Sand, and Dr. Jose Ajero, Sr., and their children.
On January 20, 1983, petitioners instituted Sp. Proc. No. Q-37171, for allowance of
decedent's holographic will. They alleged that at the time of its execution, she was of sound
and disposing mind, not acting under duress, fraud or undue influence, and was in every
respect capacitated to dispose of her estate by will.
Private respondent opposed the petition on the grounds that: neither the testament's body nor
the signature therein was in decedent's handwriting; it contained alterations and corrections
which were not duly signed by decedent; and, the will was procured by petitioners through
improper pressure and undue influence. The petition was likewise opposed by Dr. Jose Ajero.
He contested the disposition in the will of a house and lot located in Cabadbaran, Agusan Del
Norte. He claimed that said property could not be conveyed by decedent in its entirety, as she
was not its sole owner.

G.R. No. 106720 September 15, 1994 Notwithstanding the oppositions, the trial court admitted the decedent's holographic will to
probate. It found, inter alia:
SPOUSES ROBERTO AND THELMA AJERO, petitioners,
vs. Considering then that the probate proceedings herein must decide only the question
THE COURT OF APPEALS AND CLEMENTE SAND, respondents. of identity of the will, its due execution and the testamentary capacity of the testatrix,
this probate court finds no reason at all for the disallowance of the will for its failure to
comply with the formalities prescribed by law nor for lack of testamentary capacity of
PUNO, J.: the testatrix.

This is an appeal by certiorari from the Decision of the Court of For one, no evidence was presented to show that the will in question is different from
Appeals 1 in CA-G.R. CV No. 22840, dated March 30, 1992, the dispositive portion of which the will actually executed by the testatrix. The only objections raised by the
reads; oppositors . . . are that the will was not written in the handwriting of the testatrix which
properly refers to the question of its due execution, and not to the question of identity
PREMISES CONSIDERED, the questioned decision of November 19, 1988 of will. No other will was alleged to have been executed by the testatrix other than the
of the trial court is hereby REVERSED and SET ASIDE, and the petition for will herein presented. Hence, in the light of the evidence adduced, the identity of the
probate is hereby DISMISSED. No costs. will presented for probate must be accepted, i.e., the will submitted in Court must be
deemed to be the will actually executed by the testatrix.

xxx xxx xxx


While the fact that it was entirely written, dated and signed in the handwriting of the
testatrix has been disputed, the petitioners, however, have satisfactorily shown in
Court that the holographic will in question was indeed written entirely, dated and
signed in the handwriting of the testatrix. Three (3) witnesses who have convincingly
shown knowledge of the handwriting of the testatrix have been presented and have
explicitly and categorically identified the handwriting with which the holographic will in
question was written to be the genuine handwriting and signature of the testatrix.
Given then the aforesaid evidence, the requirement of the law that the holographic
will be entirely written, dated and signed in the handwriting of the testatrix has been
complied with.
xxx xxx xxx
As to the question of the testamentary capacity of the testratix, (private respondent)
Clemente Sand himself has testified in Court that the testatrix was completely in her
sound mind when he visited her during her birthday celebration in 1981, at or around
which time the holographic will in question was executed by the testatrix. To be of
sound mind, it is sufficient that the testatrix, at the time of making the will, knew
the value of the estate to be disposed of, the proper object of her bounty, and
the characterof the testamentary act . . . The will itself shows that the testatrix even
had detailed knowledge of the nature of her estate. She even identified the lot
number and square meters of the lots she had conveyed by will. The objects of her
bounty were likewise identified explicitly. And considering that she had even written a
nursing book which contained the law and jurisprudence on will and succession,
there is more than sufficient showing that she knows the character of the
testamentary act.
In this wise, the question of identity of the will, its due execution and the testamentary
capacity of the testatrix has to be resolved in favor of the allowance of probate of the
will submitted herein.
Likewise, no evidence was presented to show sufficient reason for the disallowance
of herein holographic will. While it was alleged that the said will was procured by
undue and improper pressure and influence on the part of the beneficiary or of some
other person, the evidence adduced have not shown any instance where improper
pressure or influence was exerted on the testatrix. (Private respondent) Clemente
Sand has testified that the testatrix was still alert at the time of the execution of the
will, i.e., at or around the time of her birth anniversary celebration in 1981. It was also
established that she is a very intelligent person and has a mind of her own. Her
independence of character and to some extent, her sense of superiority, which has
P a g e | 29
been testified to in Court, all show the unlikelihood of her being unduly influenced or
improperly pressured to make the aforesaid will. It must be noted that the undue
influence or improper pressure in question herein only refer to the making of a will
and not as to the specific testamentary provisions therein which is the proper subject
of another proceeding. Hence, under the circumstances, this Court cannot find
convincing reason for the disallowance of the will herein.
Considering then that it is a well-established doctrine in the law on succession that in
case of doubt, testate succession should be preferred over intestate succession, and
the fact that no convincing grounds were presented and proven for the disallowance
of the holographic will of the late Annie Sand, the aforesaid will submitted herein
must be admitted to probate. 3 (Citations omitted.)
On appeal, said Decision was reversed, and the petition for probate of decedent's will was
dismissed. The Court of Appeals found that, "the holographic will fails to meet the
requirements for its validity." 4 It held that the decedent did not comply with Articles 813 and
814 of the New Civil Code, which read, as follows:
Art. 813: When a number of dispositions appearing in a holographic will are signed
without being dated, and the last disposition has a signature and date, such date
validates the dispositions preceding it, whatever be the time of prior dispositions.
Art. 814: In case of insertion, cancellation, erasure or alteration in a holographic will,
the testator must authenticate the same by his full signature.
It alluded to certain dispositions in the will which were either unsigned and undated, or signed
but not dated. It also found that the erasures, alterations and cancellations made thereon had
not been authenticated by decedent.
Thus, this appeal which is impressed with merit.
Section 9, Rule 76 of the Rules of Court provides that will shall be disallowed in any of the
following cases:
(a) If not executed and attested as required by law;
(b) If the testator was insane, or otherwise mentally incapable to make a will, at the
time of its execution;
(c) If it was executed under duress, or the influence of fear, or threats;

(d) If it was procured by undue and improper pressure and influence, on the part of
the beneficiary, or of some other person for his benefit;
(e) If the signature of the testator was procured by fraud or trick, and he did not
intend that the instrument should be his will at the time of fixing his signature thereto.
In the same vein, Article 839 of the New Civil Code reads:
Art. 839: The will shall be disallowed in any of the following cases;
(1) If the formalities required by law have not been complied with;
(2) If the testator was insane, or otherwise mentally incapable of making a will, at the
time of its execution;
(3) If it was executed through force or under duress, or the influence of fear, or
threats;
(4) If it was procured by undue and improper pressure and influence, on the part of
the beneficiary or of some other person;
(5) If the signature of the testator was procured by fraud;
(6) If the testator acted by mistake or did not intend that the instrument he signed
should be his will at the time of affixing his signature thereto.
These lists are exclusive; no other grounds can serve to disallow a will. 5 Thus, in a petition to
admit a holographic will to probate, the only issues to be resolved are: (1) whether the
instrument submitted is, indeed, the decedent's last will and testament; (2) whether said will
was executed in accordance with the formalities prescribed by law; (3) whether the decedent
had the necessary testamentary capacity at the time the will was executed; and, (4) whether
the execution of the will and its signing were the voluntary acts of the decedent. 6
In the case at bench, respondent court held that the holographic will of Anne Sand was not
executed in accordance with the formalities prescribed by law. It held that Articles 813 and
814 of the New Civil Code, ante, were not complied with, hence, it disallowed the probate of
said will. This is erroneous.
We reiterate what we held in Abangan vs. Abangan, 40 Phil. 476, 479 (1919), that:
P a g e | 30
The object of the solemnities surrounding the execution of wills is to close the door
against bad faith and fraud, to avoid substitution of wills and testaments and to
guaranty their truth and authenticity. Therefore, the laws on this subject should be
interpreted in such a way as to attain these primordial ends. But, on the other hand,
also one must not lose sight of the fact that it is not the object of the law to restrain
and curtail the exercise of the right to make a will. So when an interpretation already
given assures such ends, any other interpretation whatsoever, that adds nothing but
demands more requisites entirely unnecessary, useless and frustrative of the
testator's last will, must be disregarded.
For purposes of probating non-holographic wills, these formal solemnities include the
subscription, attestation, and acknowledgment requirements under Articles 805 and 806 of
the New Civil Code.
In the case of holographic wills, on the other hand, what assures authenticity is the
requirement that they be totally autographic or handwritten by the testator himself, 7 as
provided under Article 810 of the New Civil Code, thus:
A person may execute a holographic will which must be entirely written, dated, and
signed by the hand of the testator himself. It is subject to no other form, and may be
made in or out of the Philippines, and need not be witnessed. (Emphasis supplied.)
Failure to strictly observe other formalities will not result in the disallowance of a
holographic will that is unquestionably handwritten by the testator.
A reading of Article 813 of the New Civil Code shows that its requirement affects the validity
of the dispositions contained in the holographic will, but not its probate. If the testator fails to
sign and date some of the dispositions, the result is that these dispositions cannot be
effectuated. Such failure, however, does not render the whole testament void.
Likewise, a holographic will can still be admitted to probate, notwithstanding non-compliance
with the provisions of Article 814. In the case of Kalaw vs. Relova 132 SCRA 237 242 (1984),
this Court held:
Ordinarily, when a number of erasures, corrections, and interlineations made by the
testator in a holographic Will have not been noted under his signature, . . . the Will is
not thereby invalidated as a whole, but at most only as respects the particular words
erased, corrected or interlined. Manresa gave an identical commentary when he said
"la omission de la salvedad no anula el testamento, segun la regla de jurisprudencia
establecida en la sentencia de 4 de Abril de 1985." 8 (Citations omitted.)

Thus, unless the unauthenticated alterations, cancellations or insertions were made on the
date of the holographic will or on testator's signature, 9 their presence does not invalidate the
will itself. 10 The lack of authentication will only result in disallowance of such changes.
It is also proper to note that the requirements of authentication of changes and signing and
dating of dispositions appear in provisions (Articles 813 and 814) separate from that which
provides for the necessary conditions for the validity of the holographic will (Article 810). The
distinction can be traced to Articles 678 and 688 of the Spanish Civil Code, from which the
present provisions covering holographic wills are taken. They read as follows:
Art. 678: A will is called holographic when the testator writes it himself in the form and
with the requisites required in Article 688.
Art. 688: Holographic wills may be executed only by persons of full age.
In order that the will be valid it must be drawn on stamped paper corresponding to the
year of its execution, written in its entirety by the testator and signed by him, and
must contain a statement of the year, month and day of its execution.
If it should contain any erased, corrected, or interlined words, the testator must
identify them over his signature.
Foreigners may execute holographic wills in their own language.
This separation and distinction adds support to the interpretation that only the requirements of
Article 810 of the New Civil Code — and not those found in Articles 813 and 814 of the same
Code — are essential to the probate of a holographic will.
The Court of Appeals further held that decedent Annie Sand could not validly dispose of the
house and lot located in Cabadbaran, Agusan del Norte, in its entirety. This is correct and
must be affirmed.
As a general rule, courts in probate proceedings are limited to pass only upon the extrinsic
validity of the will sought to be probated. However, in exceptional instances, courts are not
powerless to do what the situation constrains them to do, and pass upon certain provisions of
the will. 11 In the case at bench, decedent herself indubitably stated in her holographic will
that the Cabadbaran property is in the name of her late father, John H. Sand (which led
oppositor Dr. Jose Ajero to question her conveyance of the same in its entirety). Thus, as
correctly held by respondent court, she cannot validly dispose of the whole property, which
she shares with her father's other heirs.
P a g e | 31
IN VIEW WHEREOF, the instant petition is GRANTED. The Decision of the Court of Appeals
in CA-G.R. CV No. 22840, dated March 30, 1992, is REVERSED and SET ASIDE, except
with respect to the invalidity of the disposition of the entire house and lot in Cabadbaran,
Agusan del Norte. The Decision of the Regional Trial Court of Quezon City, Branch 94 in Sp.
Proc. No. Q-37171, dated November 19, 1988, admitting to probate the holographic will of
decedent Annie Sand, is hereby REINSTATED, with the above qualification as regards the
Cabadbaran property. No costs.
G.R. No. L-12190 August 30, 1958
TESTATE ESTATE OF FELICIDAD ESGUERRA ALTO-YAP deceased. FAUSTO E.
GAN, petitioner-appellant,
vs.
ILDEFONSO YAP, oppositor-appellee.
Benedicto C. Belran, Crispin D. Baizas and Roberto H. Benitez for appellant.
Arturo M. Tolentino for appellee.
BENGZON, J.:
On November 20, 1951, Felicidad Esguerra Alto Yap died of heart failure in the University of
Santo Tomas Hospital, leaving properties in Pulilan, Bulacan, and in the City of Manila.
On March 17, 1952, Fausto E. Gan initiated them proceedings in the Manila court of first
instance with a petition for the probate of a holographic will allegedly executed by the
deceased, substantially in these words:
Opposing the petition, her surviving husband Ildefonso Yap asserted that the deceased had
not left any will, nor executed any testament during her lifetime.
After hearing the parties and considering their evidence, the Hon. Ramon R. San Jose,
Judge,1 refused to probate the alleged will. A seventy-page motion for reconsideration failed.
Hence this appeal.
The will itself was not presented. Petitioner tried to establish its contents and due execution
by the statements in open court of Felina Esguerra, Primitivo Reyes, Socorro Olarte and
Rosario Gan Jimenez, whose testimonies may be summarized as follows:
Sometime in 1950 after her last trip abroad, Felicidad Esguerra mentioned to her first cousin,
Vicente Esguerra, her desire to make a will. She confided however that it would be useless if

her husband discovered or knew about it. Vicente consulted with Fausto E. Gan, nephew of
Felicidad, who was then preparing for the bar examinations. The latter replied it could be
done without any witness, provided the document was entirely in her handwriting, signed and
dated by her. Vicente Esguerra lost no time in transmitting the information, and on the
strength of it, in the morning of November 5, 1951, in her residence at Juan Luna Street,
Manila, Felicidad wrote, signed and dated a holographic will substantially of the tenor above
transcribed, in the presence of her niece, Felina Esguerra (daughter of Vicente), who was
invited to read it. In the afternoon of that day, Felicidad was visited by a distant relative,
Primitivo Reyes, and she allowed him to read the will in the presence of Felina Esguerra, who
again read it.
Nine days later, he had other visitors: Socorro Olarte a cousin, and Rosario Gan Jimenez, a
niece. To these she showed the will, again in the presence of Felina Esguerra, who read it for
the third time.
When on November 19, 1951, Felicidad was confined at the U.S.T. Hospital for her last
illness, she entrusted the said will, which was contained in a purse, to Felina Esguerra. But a
few hours later, Ildefonso Yap, her husband, asked Felina for the purse: and being afraid of
him by reason of his well-known violent temper, she delivered it to him. Thereafter, in the
same day, Ildefonso Yap returned the purse to Felina, only to demand it the next day shortly
before the death of Felicidad. Again, Felina handed it to him but not before she had taken the
purse to the toilet, opened it and read the will for the last time.2
From the oppositor's proof it appears that Felicidad Esguerra had been suffering from heart
disease for several years before her death; that she had been treated by prominent
physicians, Dr. Agerico Sison, Dr. Agustin Liboro and others; that in May 1950 husband and
wife journeyed to the United States wherein for several weeks she was treated for the
disease; that thereafter she felt well and after visiting interesting places, the couple returned
to this country in August 1950. However, her ailment recurred, she suffered several attacks,
the most serious of which happened in the early morning of the first Monday of November
1951 (Nov. 5). The whole household was surprised and alarmed, even the teachers of the
Harvardian Colleges occupying the lower floors and of by the Yap spouses. Physician's help
was hurriedly called, and Dr. Tanjuaquio arrived at about 8:00 a.m., found the patient hardly
breathing, lying in bed, her head held high by her husband. Injections and oxygen were
administered. Following the doctor's advice the patient stayed in bed, and did nothing the
whole day, her husband and her personal attendant, Mrs. Bantique, constantly at her side.
These two persons swore that Mrs. Felicidad Esguerra Yap made no will, and could have
made no will on that day.
P a g e | 32
The trial judge refused to credit the petitioner's evidence for several reasons, the most
important of which were these: (a) if according to his evidence, the decedent wanted to keep
her will a secret, so that her husband would not know it, it is strange she executed it in the
presence of Felina Esguerra, knowing as she did that witnesses were unnecessary; (b) in the
absence of a showing that Felina was a confidant of the decedent it is hard to believe that the
latter would have allowed the former to see and read the will several times; (c) it is
improbable that the decedent would have permitted Primitivo Reyes, Rosario Gan Jimenez
and Socorro Olarte to read her will, when she precisely wanted its contents to remain a secret
during her lifetime; (d) it is also improbable that her purpose being to conceal the will from her
husband she would carry it around, even to the hospital, in her purse which could for one
reason or another be opened by her husband; (e) if it is true that the husband demanded the
purse from Felina in the U.S.T. Hospital and that the will was there, it is hard to believe that
he returned it without destroying the will, the theory of the petitioner being precisely that the
will was executed behind his back for fear he will destroy it.
In the face of these improbabilities, the trial judge had to accept the oppositor's evidence that
Felicidad did not and could not have executed such holographic will.
In this appeal, the major portion of appellant's brief discussed the testimony of the oppositor
and of his witnesses in a vigorous effort to discredit them. It appears that the same
arguments, or most of them, were presented in the motion to reconsider; but they failed to
induce the court a quo to change its mind. The oppositor's brief, on the other hand, aptly
answers the criticisms. We deem it unnecessary to go over the same matters, because in our
opinion the case should be decided not on the weakness of the opposition but on the strength
of the evidence of the petitioner, who has the burden of proof.
The Spanish Civil Code permitted the execution of holographic wills along with other forms.
The Code of Civil Procedure (Act 190) approved August 7, 1901, adopted only one form,
thereby repealing the other forms, including holographic wills.
The New Civil Code effective in 1950 revived holographic wills in its arts. 810-814. "A person
may execute a holographic will which must be entirely written, dated, and signed by the hand
of the testator himself. It is subject to no other form and may be made in or out of the
Philippines, and need not be witnessed."
This is indeed a radical departure from the form and solemnities provided for wills under Act
190, which for fifty years (from 1901 to 1950) required wills to be subscribed by the testator
and three credible witnesses in each and every page; such witnesses to attest to the number
of sheets used and to the fact that the testator signed in their presence and that they signed
in the presence of the testator and of each other.

The object of such requirements it has been said, is to close the door against bad faith and
fraud, to prevent substitution of wills, to guarantee their truth and authencity
(Abangan vs. Abangan, 40 Phil., 476) and to avoid those who have no right to succeed the
testator would succeed him and be benefited with the probate of same. (Mendoza vs. Pilapil,
40 Off. Gaz., 1855). However, formal imperfections may be brushed aside when authenticity
of the instrument is duly proved. (Rodriguez vs Yap, 40 Off. Gaz. 1st Supp. No. 3 p. 194.)
Authenticity and due execution is the dominant requirements to be fulfilled when such will is
submitted to the courts for allowance. For that purpose the testimony of one of the
subscribing witnesses would be sufficient if there is no opposition (Sec. 5, Rule 77). If there
is, the three must testify, if available. (Cabang vs. Delfinado, 34 Phil., 291;
Tolentino vs. Francisco, 57 Phil., 742). From the testimony of such witnesses (and of other
additional witnesses) the court may form its opinion as to the genuineness and authenticity of
the testament, and the circumstances its due execution.
Now, in the matter of holographic wills, no such guaranties of truth and veracity are
demanded, since as stated, they need no witnesses; provided however, that they are "entirely
written, dated, and signed by the hand of the testator himself." The law, it is reasonable to
suppose, regards the document itself as material proof of authenticity, and as its own
safeguard, since it could at any time, be demonstrated to be — or not to be — in the hands of
the testator himself. "In the probate of a holographic will" says the New Civil Code, "it shall be
necessary that at least one witness who knows the handwriting and signature of the testator
explicitly declare that the will and the signature are in the handwriting of the testator. If the will
is contested, at least three such witnesses shall be required. In the absence of any such
witnesses, (familiar with decedent's handwriting) and if the court deem it necessary, expert
testimony may be resorted to."
The witnesses so presented do not need to have seen the execution of the holographic will.
They may be mistaken in their opinion of the handwriting, or they may deliberately lie in
affirming it is in the testator's hand. However, the oppositor may present other witnesses who
also know the testator's handwriting, or some expert witnesses, who after comparing the will
with other writings or letters of the deceased, have come to the conclusion that such will has
not been written by the hand of the deceased. (Sec. 50, Rule 123). And the court, in view of
such contradictory testimony may use its own visual sense, and decide in the face of the
document, whether the will submitted to it has indeed been written by the testator.
Obviously, when the will itself is not submitted, these means of opposition, and of assessing
the evidence are not available. And then the only guaranty of authenticity3 — the testator's
handwriting — has disappeared.
P a g e | 33
Therefore, the question presents itself, may a holographic will be probated upon the
testimony of witnesses who have allegedly seen it and who declare that it was in the
handwriting of the testator? How can the oppositor prove that such document was not in the
testator's handwriting? His witnesses who know testator's handwriting have not examined it.
His experts can not testify, because there is no way to compare the alleged testament with
other documents admittedly, or proven to be, in the testator's hand. The oppositor will,
therefore, be caught between the upper millstone of his lack of knowledge of the will or the
form thereof, and the nether millstone of his inability to prove its falsity. Again the proponent's
witnesses may be honest and truthful; but they may have been shown a faked document, and
having no interest to check the authenticity thereof have taken no pains to examine and
compare. Or they may be perjurers boldly testifying, in the knowledge that none could convict
them of perjury, because no one could prove that they have not "been shown" a document
which they believed was in the handwriting of the deceased. Of course, the competency of
such perjured witnesses to testify as to the handwriting could be tested by exhibiting to them
other writings sufficiently similar to those written by the deceased; but what witness or lawyer
would not foresee such a move and prepare for it? His knowledge of the handwriting
established, the witness (or witnesses) could simply stick to his statement: he has seen and
read a document which he believed was in the deceased's handwriting. And the court and the
oppositor would practically be at the mercy of such witness (or witnesses) not only as to the
execution, but also as to the contents of the will. Does the law permit such a situation?
The Rules of Court, (Rule 77) approved in 1940 allow proof (and probate) of a lost or
destroyed will by secondary — evidence the testimony of witnesses, in lieu of the original
document. Yet such Rules could not have contemplated holographic wills which could not
then be validly made here. (See also Sec. 46, Rule 123; Art. 830-New Civil Code.)
Could Rule 77 be extended, by analogy, to holographic wills?
Spanish commentators agree that one of the greatest objections to the holographic will is that
it may be lost or stolen4 — an implied admission that such loss or theft renders it useless..
This must be so, because the Civil Code requires it to be protocoled and presented to the
judge, (Art. 689) who shall subscribe it and require its identity to be established by the three
witnesses who depose that they have no reasonable doubt that the will was written by the
testator (Art. 691). And if the judge considers that the identity of the will has been proven he
shall order that it be filed (Art. 693). All these, imply presentation of the will itself. Art. 692
bears the same implication, to a greater degree. It requires that the surviving spouse and the
legitimate ascendants and descendants be summoned so that they may make "any
statement they may desire to submit with respect to the authenticity of the will." As it is
universally admitted that the holographic will is usually done by the testator and by himself

alone, to prevent others from knowing either its execution or its contents, the above article
692 could not have the idea of simply permitting such relatives to state whether they know of
the will, but whether in the face of the document itself they think the testator wrote it.
Obviously, this they can't do unless the will itself is presented to the Court and to them.
Undoubtedly, the intention of the law is to give the near relatives the choice of either
complying with the will if they think it authentic, or to oppose it, if they think it spurious. 5 Such
purpose is frustrated when the document is not presented for their examination. If it be
argued that such choice is not essential, because anyway the relatives may oppose, the
answer is that their opposition will be at a distinct disadvantage, and they have the right and
privilege to comply with the will, if genuine, a right which they should not be denied by
withholding inspection thereof from them.
We find confirmation of these ideas--about exhibition of the document itself--in the decision of
the Supreme Court of Spain of June 5, 1925, which denied protocolization or probate to a
document containing testamentary dispositions in the handwriting of the deceased, but
apparently mutilated, the signature and some words having been torn from it. Even in the
face of allegations and testimonial evidence (which was controverted), ascribing the
mutilation to the opponents of the will. The aforesaid tribunal declared that, in accordance
with the provision of the Civil Code (Spanish) the will itself, whole and unmutilated, must be
presented; otherwise, it shall produce no effect.
This holding aligns with the ideas on holographic wills in the Fuero Juzgo, admittedly the
basis of the Spanish Civil Code provisions on the matter.6
(According to the Fuero above, the will itself must be compared with specimens of the
testators handwriting.)
All of which can only mean: the courts will not distribute the property of the deceased in
accordance with his holographic will, unless they are shown his handwriting and signature. 7
Parenthetically, it may be added that even the French Civil Law considers the loss of the
holographic will to be fatal. (Planiol y Ripert, Derecho Civil Frances, traduccion por Diaz Cruz,
1946, Tomo V, page 555).
Taking all the above circumstances together, we reach the conclusion that the execution and
the contents of a lost or destroyed holographic will may not be proved by the bare testimony
of witnesses who have seen and/or read such will.8
P a g e | 34
Under the provisions of Art. 838 of the New Civil Code, we are empowered to adopt this
opinion as a Rule of Court for the allowance of such holographic wills. We hesitate, however,
to make this Rule decisive of this controversy, simultaneously with its promulgation. Anyway,
decision of the appeal may rest on the sufficiency, rather the insufficiency, of the evidence
presented by petitioner Fausto E. Gan.
At this point, before proceeding further, it might be convenient to explain why, unlike
holographic wills, ordinary wills may be proved by testimonial evidence when lost or
destroyed. The difference lies in the nature of the wills. In the first, the only guarantee of
authenticity is the handwriting itself; in the second, the testimony of the subscribing or
instrumental witnesses (and of the notary, now). The loss of the holographic will entails the
loss of the only medium of proof; if the ordinary will is lost, the subscribing witnesses are
available to authenticate.
In the case of ordinary wills, it is quite hard to convince three witnesses (four with the notary)
deliberately to lie. And then their lies could be checked and exposed, their whereabouts and
acts on the particular day, the likelihood that they would be called by the testator, their
intimacy with the testator, etc. And if they were intimates or trusted friends of the testator they
are not likely to end themselves to any fraudulent scheme to distort his wishes. Last but not
least, they can not receive anything on account of the will.
Whereas in the case of holographic wills, if oral testimony were admissible 9 only one man
could engineer the fraud this way: after making a clever or passable imitation of the
handwriting and signature of the deceased, he may contrive to let three honest and credible
witnesses see and read the forgery; and the latter, having no interest, could easily fall for it,
and in court they would in all good faith affirm its genuineness and authenticity. The will
having been lost — the forger may have purposely destroyed it in an "accident" — the
oppositors have no way to expose the trick and the error, because the document itself is not
at hand. And considering that the holographic will may consist of two or three pages, and only
one of them need be signed, the substitution of the unsigned pages, which may be the most
important ones, may go undetected.
If testimonial evidence of holographic wills be permitted, one more objectionable feature —
feasibility of forgery — would be added to the several objections to this kind of wills listed by
Castan, Sanchez Roman and Valverde and other well-known Spanish Commentators and
teachers of Civil Law.10
One more fundamental difference: in the case of a lost will, the three subscribing witnesses
would be testifying to a fact which they saw, namely the act of the testator of subscribing the
will; whereas in the case of a lost holographic will, the witnesses would testify as to their

opinion of the handwriting which they allegedly saw, an opinion which can not be tested in
court, nor directly contradicted by the oppositors, because the handwriting itself is not at
hand.
Turning now to the evidence presented by the petitioner, we find ourselves sharing the trial
judge's disbelief. In addition to the dubious circumstances described in the appealed
decision, we find it hard to believe that the deceased should show her will precisely to
relatives who had received nothing from it: Socorro Olarte and Primitivo Reyes. These could
pester her into amending her will to give them a share, or threaten to reveal its execution to
her husband Ildefonso Yap. And this leads to another point: if she wanted so much to conceal
the will from her husband, why did she not entrust it to her beneficiaries? Opportunity to do so
was not lacking: for instance, her husband's trip to Davao, a few days after the alleged
execution of the will.
In fine, even if oral testimony were admissible to establish and probate a lost holographic will,
we think the evidence submitted by herein petitioner is so tainted with improbabilities and
inconsistencies that it fails to measure up to that "clear and distinct" proof required by Rule
77, sec. 6.11
Wherefore, the rejection of the alleged will must be sustained.
G.R. No. 169144 January 26, 2011
IN RE: IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RUPERTA
PALAGANAS WITH PRAYER FOR THE APPOINTMENT OF SPECIAL ADMINISTRATOR,
MANUEL MIGUEL PALAGANAS and BENJAMIN GREGORIO PALAGANAS, Petitioners,
vs.
ERNESTO PALAGANAS, Respondent.
ABAD, J.:
This case is about the probate before Philippine court of a will executed abroad by a foreigner
although it has not been probated in its place of execution.
The Facts and the Case
On November 8, 2001 Ruperta C. Palaganas (Ruperta), a Filipino who became a naturalized
United States (U.S.) citizen, died single and childless. In the last will and testament she
P a g e | 35
executed in California, she designated her brother, Sergio C. Palaganas (Sergio), as the
executor of her will for she had left properties in the Philippines and in the U.S.
On May 19, 2003 respondent Ernesto C. Palaganas (Ernesto), another brother of Ruperta,
filed with the Regional Trial Court (RTC) of Malolos, Bulacan, a petition for the probate of
Ruperta’s will and for his appointment as special administrator of her estate. 1 On October 15,
2003, however, petitioners Manuel Miguel Palaganas (Manuel) and Benjamin Gregorio
Palaganas (Benjamin), nephews of Ruperta, opposed the petition on the ground that
Ruperta’s will should not be probated in the Philippines but in the U.S. where she executed it.
Manuel and Benjamin added that, assuming Ruperta’s will could be probated in the
Philippines, it is invalid nonetheless for having been executed under duress and without the
testator’s full understanding of the consequences of such act. Ernesto, they claimed, is also
not qualified to act as administrator of the estate.
Meantime, since Ruperta’s foreign-based siblings, Gloria Villaluz and Sergio, were on
separate occasions in the Philippines for a short visit, respondent Ernesto filed a motion with
the RTC for leave to take their deposition, which it granted. On April, 13, 2004 the RTC
directed the parties to submit their memorandum on the issue of whether or not Ruperta’s
U.S. will may be probated in and allowed by a court in the Philippines.
On June 17, 2004 the RTC issued an order:2 (a) admitting to probate Ruperta’s last will; (b)
appointing respondent Ernesto as special administrator at the request of Sergio, the U.S.-
based executor designated in the will; and (c) issuing the Letters of Special Administration to
Ernesto.
Aggrieved by the RTC’s order, petitioner nephews Manuel and Benjamin appealed to the
Court of Appeals (CA),3arguing that an unprobated will executed by an American citizen in
the U.S. cannot be probated for the first time in the Philippines.
On July 29, 2005 the CA rendered a decision,4 affirming the assailed order of the
RTC,5 holding that the RTC properly allowed the probate of the will, subject to respondent
Ernesto’s submission of the authenticated copies of the documents specified in the order and
his posting of required bond. The CA pointed out that Section 2, Rule 76 of the Rules of Court
does not require prior probate and allowance of the will in the country of its execution, before
it can be probated in the Philippines. The present case, said the CA, is different from
reprobate, which refers to a will already probated and allowed abroad. Reprobate is governed
by different rules or procedures. Unsatisfied with the decision, Manuel and Benjamin came to
this Court.
The Issue Presented

The key issue presented in this case is whether or not a will executed by a foreigner abroad
may be probated in the Philippines although it has not been previously probated and allowed
in the country where it was executed.
The Court’s Ruling
Petitioners Manuel and Benjamin maintain that wills executed by foreigners abroad must first
be probated and allowed in the country of its execution before it can be probated here. This,
they claim, ensures prior compliance with the legal formalities of the country of its execution.
They insist that local courts can only allow probate of such wills if the proponent proves that:
(a) the testator has been admitted for probate in such foreign country, (b) the will has been
admitted to probate there under its laws, (c) the probate court has jurisdiction over the
proceedings, (d) the law on probate procedure in that foreign country and proof of compliance
with the same, and (e) the legal requirements for the valid execution of a will.
But our laws do not prohibit the probate of wills executed by foreigners abroad although the
same have not as yet been probated and allowed in the countries of their execution. A foreign
will can be given legal effects in our jurisdiction. Article 816 of the Civil Code states that the
will of an alien who is abroad produces effect in the Philippines if made in accordance with
the formalities prescribed by the law of the place where he resides, or according to the
formalities observed in his country.6
In this connection, Section 1, Rule 73 of the 1997 Rules of Civil Procedure provides that if the
decedent is an inhabitant of a foreign country, the RTC of the province where he has an
estate may take cognizance of the settlement of such estate. Sections 1 and 2 of Rule 76
further state that the executor, devisee, or legatee named in the will, or any other person
interested in the estate, may, at any time after the death of the testator, petition the court
having jurisdiction to have the will allowed, whether the same be in his possession or not, or
is lost or destroyed.
Our rules require merely that the petition for the allowance of a will must show, so far as
known to the petitioner: (a) the jurisdictional facts; (b) the names, ages, and residences of the
heirs, legatees, and devisees of the testator or decedent; (c) the probable value and
character of the property of the estate; (d) the name of the person for whom letters are
prayed; and (e) if the will has not been delivered to the court, the name of the person having
custody of it. Jurisdictional facts refer to the fact of death of the decedent, his residence at the
time of his death in the province where the probate court is sitting, or if he is an inhabitant of a
foreign country, the estate he left in such province. 7The rules do not require proof that the
foreign will has already been allowed and probated in the country of its execution.
P a g e | 36
In insisting that Ruperta’s will should have been first probated and allowed by the court of
California, petitioners Manuel and Benjamin obviously have in mind the procedure for the
reprobate of will before admitting it here. But, reprobate or re-authentication of a will already
probated and allowed in a foreign country is different from that probate where the will is
presented for the first time before a competent court. Reprobate is specifically governed by
Rule 77 of the Rules of Court. Contrary to petitioners’ stance, since this latter rule applies
only to reprobate of a will, it cannot be made to apply to the present case. In reprobate, the
local court acknowledges as binding the findings of the foreign probate court provided its
jurisdiction over the matter can be established.
Besides, petitioners’ stand is fraught with impractically.1âwphi1 If the instituted heirs do not
have the means to go abroad for the probate of the will, it is as good as depriving them
outright of their inheritance, since our law requires that no will shall pass either real or
personal property unless the will has been proved and allowed by the proper court.8
Notably, the assailed RTC order of June 17, 2004 is nothing more than an initial ruling that
the court can take cognizance of the petition for probate of Ruperta’s will and that, in the
meantime, it was designating Ernesto as special administrator of the estate. The parties have
yet to present evidence of the due execution of the will, i.e. the testator’s state of mind at the
time of the execution and compliance with the formalities required of wills by the laws of
California. This explains the trial court’s directive for Ernesto to submit the duly authenticated
copy of Ruperta’s will and the certified copies of the Laws of Succession and Probate of Will
of California.
WHEREFORE, the Court DENIES the petition and AFFIRMS the Court of Appeals decision in
CA-G.R. CV 83564 dated July 29, 2005.
SO ORDERED.