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Republic of the Philippines

SUPREME COURT
Manila

On 20 March 1980, Graciano married herein petitioner Patricia Natcher. During their marriage, Graciano sold the
land covered by TCT No. 107443 to his wife Patricia as a result of which TCT No. 186059 4 was issued in the latter's
name. On 07 October 1985,Graciano died leaving his second wife Patricia and his six children by his first marriage,
as heirs.

SECOND DIVISION
G.R. No. 133000

October 2, 2001

PATRICIA NATCHER, petitioner,


vs.
HON. COURT OFAPPEALS AND THE HEIR OF GRACIANO DEL ROSARIO LETICIA DEL ROSARIO, EMILIA
DEL RESORIO MANANGAN, ROSALINDA FUENTES LLANA, RODOLFO FUENTES, ALBERTO FUENTES,
EVELYN DEL ROSARIO, and EDUARDO DEL ROSARIO, respondent..
BUENA, J.:
May a Regional Trial Court, acting as a court of general jurisdiction in an action for reconveyance annulment of title
with damages, adjudicate matters relating to the settlement of the estate of a deceased person particularly on
questions as to advancement of property made by the decedent to any of the heirs?
Sought to be reversed in this petition for review on certiorari under Rule 45 is the decision1 of public respondent
Court of Appeals, the decretal portion of which declares:
"Wherefore in view of the foregoing considerations, judgment appealed from is reversed and set aside and
another one entered annulling the Deed of Sale executed by Graciano Del Rosario in favor of defendantappellee Patricia Natcher, and ordering the Register of Deeds to Cancel TCT No. 186059 and reinstate
TCT No. 107443 without prejudice to the filing of a special proceeding for the settlement of the estate of
Graciano Del Rosario in a proper court. No costs.
"So ordered."
Spouses Graciano del Rosario and Graciana Esguerra were registered owners of a parcel of land with an area of
9,322 square meters located in Manila and covered by Transfer Certificate of Title No. 11889. Upon the death of
Graciana in 1951, Graciano, together with his six children, namely: Bayani, Ricardo, Rafael, Leticia, Emiliana and
Nieves, entered into an extrajudicial settlement of Graciana's estate on 09 February 1954 adjudicating and dividing
among themselves the real property subject of TCT No. 11889. Under the agreement, Graciano received 8/14 share
while each of the six children received 1/14 share of the said property. Accordingly, TCT No. 11889 was cancelled,
and in lieu thereof, TCT No. 35980 was issued in the name of Graciano and the Six children.1wphi1.nt
Further, on 09 February 1954, said heirs executed and forged an "Agreement of Consolidation-Subdivision of Real
Property with Waiver of Rights" where they subdivided among themselves the parcel of land covered by TCT No.
35980 into several lots. Graciano then donated to his children, share and share alike, a portion of his interest in the
land amounting to 4,849.38 square meters leaving only 447.60 square meters registered under Graciano's name, as
covered by TCT No. 35988. Subsequently, the land subject of TCT No. 35988 was further subdivided into two
separate lots where the first lot with a land area of 80.90 square meter was registered under TCT No. 107442 and
the second lot with a land area of 396.70 square meters was registered under TCT No. 107443. Eventually, Graciano
sold the first lot2 to a third person but retained ownership over the second lot.3

In a complaint5 filed in Civil Case No. 71075 before the Regional Trial Court of Manila, Branch 55, herein private
respondents alleged that upon Graciano's death, petitioner Natcher, through the employment of fraud,
misrepresentation and forgery, acquired TCT No. 107443, by making it appear that Graciano executed a Deed of
Sale dated 25 June 19876 in favor herein petitioner resulting in the cancellation of TCT No. 107443 and the issuance
of TCT no. 186059 in the name of Patricia Natcher. Similarly, herein private respondents alleged in said complaint
that as a consequence of such fraudulent sale, their legitimes have been impaired.
In her answer7 dated 19 August 1994, herein petitioner Natcher averred that she was legally married to Graciano in
20 March 1980 and thus, under the law, she was likewise considered a compulsory heir of the latter. Petitioner
further alleged that during Graciano's lifetime, Graciano already distributed, in advance, properties to his children,
hence, herein private respondents may not anymore claim against Graciano's estate or against herein petitioner's
property.
After trial, the Regional Trial Court of Manila, Branch 55, rendered a decision dated 26 January 1996 holding: 8
"1) The deed of sale executed by the late Graciano del Rosario in favor of Patricia Natcher is prohibited by
law and thus a complete nullity. There being no evidence that a separation of property was agreed upon in
the marriage settlements or that there has been decreed a judicial separation of property between them,
the spouses are prohibited from entering (into) a contract of sale;
"2) The deed as sale cannot be likewise regarded as a valid donation as it was equally prohibited by law
under Article 133 of the New Civil Code;
"3) Although the deed of sale cannot be regarded as such or as a donation, it may however be regarded as
an extension of advance inheritance of Patricia Natcher being a compulsory heir of the deceased."
On appeal, the Court of Appeals reversed and set aside the lower court's decision ratiocinating, inter alia:
"It is the probate court that has exclusive jurisdiction to make a just and legal distribution of the estate. The
court a quo, trying an ordinary action for reconveyance / annulment of title, went beyond its jurisdiction
when it performed the acts proper only in a special proceeding for the settlement of estate of a deceased
person. XXX
"X X X Thus the court a quo erred in regarding the subject property as advance inheritance. What the court
should have done was merely to rule on the validity of (the) sale and leave the issue on advancement to
be resolved in a separate proceeding instituted for that purpose. XXX"
Aggrieved, herein petitioner seeks refuge under our protective mantle through the expediency of Rule 45 of the
Rules of Court and assails the appellate court's decision "for being contrary to law and the facts of the case."
We concur with the Court of Appeals and find no merit in the instant petition.

Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special proceedings, in this wise:
"XXX a) A civil action is one by which a party sues another for the enforcement or protection of a right, or
the prevention or redress of a wrong.
"A civil action may either be ordinary or special. Both are government by the rules for ordinary civil actions,
subject to specific rules prescribed for a special civil action.
"XXX
"c) A special proceeding is a remedy by which a party seeks to establish a status, a right or a particular
fact."
As could be gleaned from the foregoing, there lies a marked distinction between an action and a special proceeding.
An action is a formal demand of one's right in a court of justice in the manner prescribed by the court or by the law. It
is the method of applying legal remedies according to definite established rules. The term "special proceeding" may
be defined as an application or proceeding to establish the status or right of a party, or a particular fact. Usually, in
special proceedings, no formal pleadings are required unless the statute expressly so provides. In special
proceedings, the remedy is granted generally upon an application or motion." 9
Citing American Jurisprudence, a noted authority in Remedial Law expounds further:
"It may accordingly be stated generally that actions include those proceedings which are instituted and
prosecuted according to the ordinary rules and provisions relating to actions at law or suits in equity, and
that special proceedings include those proceedings which are not ordinary in this sense, but is instituted
and prosecuted according to some special mode as in the case of proceedings commenced without
summons and prosecuted without regular pleadings, which are characteristics of ordinary actions. XXX A
special proceeding must therefore be in the nature of a distinct and independent proceeding for particular
relief, such as may be instituted independently of a pending action, by petition or motion upon notice." 10
Applying these principles, an action for reconveyance and annulment of title with damages is a civil action, whereas
matters relating to settlement of the estate of a deceased person such as advancement of property made by the
decedent, partake of the nature of a special proceeding, which concomitantly requires the application of specific
rules as provided for in the Rules of Court.
Clearly, 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.
Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or alleged to have been
made by the deceased to any heir may be heard and determined by the court having jurisdiction of the estate
proceedings; and the final order of the court thereon shall be binding on the person raising the questions and on the
heir.
While it may be true that the Rules used the word "may", it is nevertheless clear that the same
provision11contemplates a probate court when it speaks of the "court having jurisdiction of the estate proceedings".

Corollarily, the Regional Trial Court in the instant case, acting in its general jurisdiction, is devoid of authority to
render an adjudication and resolve the issue of advancement of the real property in favor of herein petitioner
Natcher, inasmuch as Civil Case No. 471075 for reconveyance and annulment of title with damages is not, to our
mind, the proper vehicle to thresh out said question. Moreover, under the present circumstances, the RTC of Manila,
Branch 55 was not properly constituted as a probate court so as to validly pass upon the question of advancement
made by the decedent Graciano Del Rosario to his wife, herein petitioner Natcher.
At this point, the appellate court's disquisition is elucidating:
"Before a court can make a partition and distribution of the estate of a deceased, it must first settle the
estate in a special proceeding instituted for the purpose. In the case at hand, the court a quo determined
the respective legitimes of the plaintiffs-appellants and assigned the subject property owned by the estate
of the deceased to defendant-appellee without observing the proper proceedings provided (for) by the
Rules of Court. From the aforecited discussions, 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.
Thus, the court a quo erred in regarding the subject property as an advance inheritance." 12
In resolving the case at bench, this Court is not unaware of our pronouncement in Coca vs.
Borromeo13 andMendoza vs. Teh14 that whether a particular matter should be resolved by the Regional Trial Court
(then Court of First Instance) in the exercise of its general jurisdiction or its limited probate jurisdiction is not a
jurisdictional issue but a mere question of procedure. In essence, it is procedural question involving a mode of
practice "which may be waived".15
Notwithstanding, we do not see any waiver on the part of herein private respondents inasmuch as the six children of
the decedent even assailed the authority of the trail court, acting in its general jurisdiction, to rule on this specific
issue of advancement made by the decedent to petitioner.
Analogously, in a train of decisions, this Court has consistently enunciated the long standing principle that 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, then the probate court is competent to decide the
question of ownership.16
Similarly in Mendoza vs. Teh, we had occasion to hold:
"In the present suit, no settlement of estate is involved, but merely an allegation seeking appointment as
estate administratrix which does not necessarily involve settlement of estate that would have invited
the exercise of the limited jurisdiction of a probate court.17 (emphasis supplied)
Of equal importance is that before any conclusion about the legal share due to a compulsory heir may be reached, it
is necessary that certain steps be taken first.18 The net estate of the decedent must be ascertained, by deducting all
payable obligations and charges from the value of the property owned by the deceased at the time of his death; then,
all donations subject to collation would be added to it. With the partible estate thus determined, the legitime of the
compulsory heir or heirs can be established; and only thereafter can it be ascertained whether or not a donation had
prejudiced the legitimes.19
A perusal of the records, specifically the antecedents and proceedings in the present case, reveals that the trial court
failed to observe established rules of procedure governing the settlement of the estate of Graciano Del Rosario. This

Court sees no cogent reason to sanction the non-observance of these well-entrenched rules and hereby holds that
under the prevailing circumstances, a probate court, in the exercise of its limited jurisdiction, is indeed the best forum
to ventilate and adjudge the issue of advancement as well as other related matters involving the settlement of
Graciano Del Rosario's estate.1wphi1.nt
WHEREFORE, premises considered, the assailed decision of the Court of Appeals is hereby AFFIRMED and the
instant petition is DISMISSED for lack of merit.
SO ORDERED.
Bellosillo, Mendoza, Quisumbing, De Leon, Jr., Davide, Jr., JJ., concur.

Milagros M. Terre, Belen M. Orillano, Isabelita Manalo, Rosalina M. Acuin, Romeo Manalo, Roberto Manalo, Amalia
Manalo, Orlando Manalo and Imelda Manalo, who are all of legal age.1wphi1.nt
At the time of his death on February 14, 1992, Troadio Manalo left several real properties located in Manila and in
the province of Tarlac including a business under the name and style Manalo's Machine Shop with offices at No. 19
Calavite Street, La Loma, Quezon City and at NO. 45 General Tinio Street, Arty Subdivision, Valenzuela, Metro
Manila.
On November 26, 1992, herein respondents, who are eight (8) of the surviving children of the late Troadio Manalo,
namely; Purita, Milagros, Belen Rocalina, Romeo, Roberto, Amalia, and Imelda filed a petition 6 with the respondent
Regional Trial Court of Manila 7 of the judicial settlement of the estate of their late father, Troadio Manalo, and for the
appointment of their brother, Romeo Manalo, as administrator thereof.
On December 15, 1992, the trial court issued an order setting the said petition for hearing on February 11, 1993 and
directing the publication of the order for three (3) consecutive weeks in a newspaper of general circulation in Metro
Manila, and further directing service by registered mail of the said order upon the heirs named in the petition at their
respective addresses mentioned therein.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. NO. 129242

January 16, 2001

PILAR S. VDA. DE MANALO, ANTONIO S. MANALO, ORLANDO S. MANALO, and ISABELITA


MANALO ,petitioners,
vs.
HON. COURT OF APPEALS, HON. REGIONAL TRIAL COURT OF MANILA (BRANCH 35), PURITA S. JAYME,
MILAGROS M. TERRE, BELEN M. ORILLANO, ROSALINA M. ACUIN, ROMEO S. MANALO, ROBERTO S.
MANALO, AMALIA MANALO and IMELDA MANALO, respondents.

On February 11, 1993, the date set for hearing of the petition, the trial court issued an order 'declaring the whole
world in default, except the government," and set the reception of evidence of the petitioners therein on March 16,
1993. However, the trial court upon motion of set this order of general default aside herein petitioners (oppositors
therein) namely: Pilar S. Vda. De Manalo, Antonio, Isabelita and Orlando who were granted then (10) days within
which to file their opposition to the petition.
Several pleadings were subsequently filed by herein petitioners, through counsel, culminating in the filling of an
Omnibus Motion8 on July 23, 1993 seeking; (1) to seat aside and reconsider the Order of the trial court dated July 9,
1993 which denied the motion for additional extension of time file opposition; (2) to set for preliminary hearing their
affirmative defenses as grounds for dismissal of the case; (3) to declare that the trial court did not acquire jurisdiction
over the persons of the oppositors; and (4) for the immediate inhibition of the presiding judge.
On July 30, 1993, the trial court issued an order9 which resolved, thus:
A. To admit the so-called Opposition filed by counsel for the oppositors on July 20, 1993, only for the
purpose of considering the merits thereof;

DE LEON, JR., J.:

B. To deny the prayer of the oppositors for a preliminary hearing of their affirmative defenses as ground for
the dismissal of this proceeding, said affirmative defenses being irrelevant and immaterial to the purpose
and issue of the present proceeding;

This is a petition for review on certiorari filed by petitioners Pilar S. Vda De Manalo, et. Al., seeking to annul the
Resolution 1 of the Court of Appeals 2 affirming the Orders 3 of the Regional Trial Court and the Resolution 4which
denied petitioner' motion for reconsideration.

C. To declare that this court has acquired jurisdiction over the persons of the oppositors;
D. To deny the motion of the oppositors for the inhibition of this Presiding Judge;

The antecedent facts are as follows:


Troadio Manalo, a resident of 1996 Maria Clara Street, Sampaloc, Manila died intestate on February 14, 1992. He
was survived by his wife, Pilar S. Manalo, and his eleven (11) children, namely: Purita M. Jayme, Antonio Manalo,

E. To set the application of Romeo Manalo for appointment as regular administrator in the intestate estate
of the deceased Troadio Manalo for hearing on September 9, 1993 at 2:00 o'clock in the afternoon.

Herein petitioners filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals,
docketed as CA-G.R. SP. No. 39851, after the trial court in its Order 10 dated September 15, 1993. In their petition for
improperly laid in SP. PROC. No. 92-63626; (2) the trial court did not acquire jurisdiction over their persons; (3) the
share of the surviving spouse was included in the intestate proceedings; (4) there was absence of earnest efforts
toward compromise among members of the same family; and (5) no certification of non-forum shopping was
attached to the petition.
Finding the contentions untenable, the Court of Appeals dismissed the petition for certiorari in its
Resolution11promulgated on September 30, 1996. On May 6, 1997 the motion for reconsideration of the said
resolution was likewise dismissed.12
The only issue raised by herein petitioners in the instant petition for review is whether or not the respondent Court of
Appeals erred in upholding the questioned orders of the respondent trial court which denied their motion for the
outright dismissal of the petition for judicial settlement of estate despite the failure of the petitioners therein to aver
that earnest efforts toward a compromise involving members of the same family have been made prior to the filling of
the petition but that the same have failed.
Herein petitioners claim that the petition in SP. PROC. No. 92-63626 is actually an ordinary civil action involving
members of the same family. They point out that it contains certain averments, which, according to them, are
indicative of its adversarial nature, to wit:

members of the same family prior to the filling of the petition pursuant to Article 222 14 of the Civil Code of the
Philippines.
The instant petition is not impressed with merit.
It is a fundamental rule that in the determination of the nature of an action or proceeding, the averments 15 and the
character of the relief sought 16 in the complaint, or petition, as in the case at bar, shall be controlling. A careful srutiny
of the Petition for Issuance of Letters of Administration, Settlement and Distribution of Estatein SP. PROC. No. 9263626 belies herein petitioners' claim that the same is in the nature of an ordinary civil action. The said petition
contains sufficient jurisdictional facts required in a petition for the settlement of estate of a deceased person such as
the fat of death of the late Troadio Manalo on February 14, 1992, as well as his residence in the City of Manila at the
time of his said death. The fact of death of the decedent and of his residence within he country are foundation facts
upon which all the subsequent proceedings in the administration of the estate rest.17The petition is SP.PROC No. 9263626 also contains an enumeration of the names of his legal heirs including a tentative list of the properties left by
the deceased which are sought to be settled in the probate proceedings. In addition, the relief's prayed for in the said
petition leave no room for doubt as regard the intention of the petitioners therein (private respondents herein) to seek
judicial settlement of the estate of their deceased father, Troadio Manalo, to wit;
PRAYER
WHEREFORE, premises considered, it is respectfully prayed for of this Honorable Court:

Par. 7. One of the surviving sons, ANTONIO MANALO, since the death of his father, TROADIO MANALO,
had not made any settlement, judicial or extra-judicial of the properties of the deceased father TROADIO
MANALO.
Par. 8. xxx the said surviving son continued to manage and control the properties aforementioned, without
proper accounting, to his own benefit and advantage xxx.
X

Par. 12. That said ANTONIO MANALO is managing and controlling the estate of the deceased TROADIO
MANALO to his own advantage and to the damage and prejudice of the herein petitioners and their coheirs xxx.
X

Par. 14. For the protection of their rights and interests, petitioners were compelled to bring this suit and
were forced to litigate and incur expenses and will continue to incur expenses of not less than,
P250,000.00 and engaged the services of herein counsel committing to pay P200,000.00 as and attorney's
fees plus honorarium of P2,500.00 per appearance in court xxx.13
Consequently, according to herein petitioners, the same should be dismissed under Rule 16, Section 1(j) of the
Revised Rules of Court which provides that a motion to dismiss a complaint may be filed on the ground that a
condition precedent for filling the claim has not been complied with, that is, that the petitioners therein failed to aver
in the petition in SP. PROC. No. 92-63626, that earnest efforts toward a compromise have been made involving

a. That after due hearing, letters of administration be issued to petitioner ROMEO MANALO for the
administration of the estate of the deceased TROADIO MANALO upon the giving of a bond in such
reasonable sum that this Honorable Court may fix.
b. That after all the properties of the deceased TROADIO MANALO have been inventoried and expenses
and just debts, if any, have been paid and the legal heirs of the deceased fully determined, that the said
estate of TROADIO MANALO be settled and distributed among the legal heirs all in accordance with law.
c. That the litigation expenses of these proceedings in the amount of P250,000.00 and attorney's fees in
the amount of P300,000.00 plus honorarium of P2,500.00 per appearance in court in the hearing and trial
of this case and costs of suit be taxed solely against ANTONIO MANALO. 18
Concededly, the petition in SP. PROC. No. 92-63626 contains certain averments which may be typical of an ordinary
civil action. Herein petitioners, as oppositors therein, took advantage of the said defect in the petition and filed their
so-called Opposition thereto which, as observed by the trial court, is actually an Answer containing admissions and
denials, special and affirmative defenses and compulsory counterclaims for actual, moral and exemplary damages,
plus attorney's fees and costs 19 in an apparent effort to make out a case of an ordinary civil action and ultimately
seek its dismissal under Rule 16, Section 1(j) of the Rules of Court vis--vis, Article 222 of civil of the Civil Code.

It is our view that herein petitioners may not be allowed to defeat the purpose of the essentially valid petition for the
settlement of the estate of the late Troadio Manalo by raising matters that as irrelevant and immaterial to the said
petition. It must be emphasized that the trial court, siting as a probate court, has limited and special jurisdiction 20 and
cannot hear and dispose of collateral matters and issues which may be properly threshed out only in an ordinary civil
action. In addition, the rule has always been to the effect that the jurisdiction of a court, as well as the concomitant
nature of an action, is determined by the averments in the complaint and not by the defenses contained in the
answer. If it were otherwise, it would not be too difficult to have a case either thrown out of court or its proceedings
unduly delayed by simple strategem.21 So it should be in the instant petition for settlement of estate.
Herein petitioners argue that even if the petition in SP. PROC. No. 92-63626 were to be considered as a special
proceeding for the settlement of estate of a deceased person, Rule 16, Section 1(j) of the Rules of Court vis-visArticle 222 of the Civil Code of the Philippines would nevertheless apply as a ground for the dismissal of the same
by virtue of ule 1, Section 2 of the Rules of Court which provides that the 'rules shall be liberally construed in order to
promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action
and proceedings.' Petitioners contend that the term "proceeding" is so broad that it must necessarily include special
proceedings.
The argument is misplaced. Herein petitioners may not validly take refuge under the provisions of Rule 1, Section 2,
of the Rules of Court to justify the invocation of Article 222 of the Civil Code of the Philippines for the dismissal of the
petition for settlement of the estate of the deceased Troadio Manalo inasmuch as the latter provision is clear enough.
To wit:
Art. 222. No suit shall be filed or maintained between members of the same family unless it should appear that
earnest efforts toward a compromise have been made, but that the same have failed, subject to the limitations in
Article 2035(underscoring supplied).22
The above-quoted provision of the law is applicable only to ordinary civil actions. This is clear from the term 'suit' that
it refers to an action by one person or persons against another or other in a court of justice in which the plaintiff
pursues the remedy which the law affords him for the redress of an injury or the enforcement of a right, whether at
law or in equity. 23 A civil action is thus an action filed in a court of justice, whereby a party sues another for the
enforcement of a right, or the prevention or redress of a wrong.24 Besides, an excerpt form the Report of the Code
Commission unmistakably reveals the intention of the Code Commission to make that legal provision applicable only
to civil actions which are essentially adversarial and involve members of the same family, thus:
It is difficult to imagine a sadder and more tragic spectacle than a litigation between members of the same
family. It is necessary that every effort should be made toward a compromise before litigation is allowed to
breed hate and passion in the family. It is know that lawsuit between close relatives generates deeper
bitterness than stranger.25
It must be emphasized that the oppositors (herein petitioners) are not being sued in SP. PROC. No. 92-63626 for any
cause of action as in fact no defendant was imploded therein. The Petition for issuance of letters of Administration,
Settlement and Distribution of Estate in SP. PROC. No. 92-63626 is a special proceeding and, as such, it is a remedy
whereby the petitioners therein seek to establish a status, a right, or a particular fact. 26 the petitioners therein (private
respondents herein) merely seek to establish the fat of death of their father and subsequently to be duly recognized
as among the heirs of the said deceased so that they can validly exercise their right to participate in the settlement
and liquidation of the estate of the decedent consistent with the limited and special jurisdiction of the probate
court.1wphi1.nt
WHEREFORE, the petition in the above-entitled case, is DENIED for lack of merit, Costs against petitioners.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 141297

October 8, 2001

DOMINGO R. MANALO, petitioner,


vs.
COURT OF APPEALS (Special Twelfth Division) and PAIC SAVINGS AND MORTGAGE BANK,respondents.
PUNO, J.:
This petition for certiorari seeks the review of the Decision of the Court of Appeals in C.A.-G.R. SP. No. 50341
promulgated December 23, 1999, which affirmed an Order issued by the Regional Trial Court, Branch 112, Pasay
City, in Civil Case No. 9011 dated December 9, 1998.
On July 19, 1983, S. Villanueva Enterprises, represented by its president, Therese Villanueva Vargas, obtained a
loan of three million pesos (P3,000,000.00) and one million pesos (P1,000,000.00) from the respondent PAIC
Savings and Mortgage Bank and the Philippine American Investments Corporation (PAIC), respectively. To secure
payment of both debts, Vargas executed in favor of the respondent and PAIC a Joint First Mortgage 1 over two
parcels of land registered under her name. One of the lots, located in Pasay City with an area of nine hundred
nineteen square meters (919 sq. m.) and covered by TCT No. 6076, is the subject of the present case. Section 2 of
the mortgage contract states that "the properties mortgaged therein shall include all buildings and improvements
existing on the mortgaged property at the time of the execution of the mortgage contract and thereafter." 2
S. Villanueva Enterprises defaulted in paying the amortizations due. Despite repeated demands from the respondent,
it failed to settle its loan obligation. Accordingly, respondent instituted extrajudicial foreclosure proceedings over the
mortgaged lots. On August 22, 1984, the Pasay City property was sold at a public auction to the respondent itself,
after tendering the highest bid. The respondent then caused the annotation of the corresponding Sheriff's Certificate
of Sale3 on the title of the land on December 4, 1984. After the lapse of one year, or the statutory period extended by
law to a mortgagor to exercise his/her right of redemption, title was consolidated in respondent's name for failure of
Vargas to redeem.
On October 29, 1986, the Central Bank of the Philippines filed a Petition4 for assistance in the liquidation of the
respondent with the Regional Trial Court. The petition was given due course in an Order 5 dated May 19, 1987.
It appears that from the years 1986 to 1991, Vargas negotiated with the respondent (through its then liquidator, the
Central Bank) for the repurchase of the foreclosed property. The negotiations, however, fizzled out as Vargas cannot
afford the repurchase price fixed by the respondent based on the appraised value of the land at that time. On
October 4, 1991, Vargas filed a case for annulment of mortgage and extrajudicial foreclosure sale before Branch 116
of the Pasay City Regional Trial Court. On July 22, 1993, the court rendered a decision 6 dismissing the complaint and
upholding the validity of the mortgage and foreclosure sale. On appeal, the appellate court upheld the assailed
judgment and declared the said mortgage and foreclosure proceedings to be in accord with law.7 This decision of the
Court of Appeals subsequently became final and executory when we summarily dismissed Vargas' Petition for
Review on Certiorari for having been filed beyond the reglementary period.8

In the meantime, on June 22, 1992, respondent petitioned the Regional Trial Court, Branch 112, of Pasay City, herein
court a quo, for the issuance of a writ of possession for the subject property in Civil Case No. 9011. This is in view of
the consolidation of its ownership over the same as mentioned earlier. Vargas and S. Villanueva Enterprises, Inc.
filed their opposition thereto. After which, trial ensued.
During the pendency of Civil Case No. 9011 (for the issuance of a writ of possession), Vargas, on December 23,
1992, executed a Deed of Absolute Sale9 selling, transferring, and conveying ownership of the disputed lot in favor of
a certain Armando Angsico. Notwithstanding this sale, Vargas, still representing herself to be the lawful owner of the
property, leased the same to petitioner Domingo R. Manalo on August 25, 1994. Pertinent provisions of the lease
agreement10 state:
"3. (a) The lease is for a period of ten year lease (sic), involving 450 square meters, a portion of the above
919 square meter property.
x x x (d) The LESSEE has to introduce into the said 450 square meter premises improvements thereon
(sic) consisting of one story building to house a Karaoke Music Restaurant Business, which improvements
constructed thereof (sic), upon the termination of the lease contract, by said LESSEE be surrendered in
favor of the LESSOR (sic).''11
Later, on June 29, 1997, Armando Angsico, as buyer of the property, assigned his rights therein to petitioner.12
On April 21, 1998, the court a quo granted the petition for the issuance of the Writ of Possession.13 The writ was
subsequently issued on April 24, 1998, the pertinent portion of which reads:14
"NOW THEREFORE you are hereby commanded that you cause oppositors THERESE VILLANUEVA
VARGAS and S. VILLANUEVA ENTERPRISES, INC. and any and all persons claiming rights or title under
them, to forthwith vacate and surrender the possession of subject premises in question known as that
parcel of land and improvements covered by TCT No. 6076 of the Registry of Deeds of Pasay City; you
are hereby further ordered to take possession and deliver to the petitioner PAIC SAVINGS AND
MORTGAGE BANK the subject parcel of land and improvements."
Shortly, on May 8, 1998, S. Villanueva Enterprises and Vargas moved for its quashal.15 Thereafter on June 25, 1998,
petitioner, on the strength of the lease contract and Deed of Assignment made in his favor, submitted a Permission to
File an Ex-parte Motion to Intervene.16 It bears mentioning, however, that before petitioner sought intervention in the
present case, he had separately instituted a Complaint for Mandamus, docketed as Civil Case No. 98-0868 before
another branch17 of the Pasay City RTC to compel PAIC Bank to allow him to repurchase the subject property.
On October 7, 1998, the court a quo denied the Motion to Quash and Motion to Intervene filed respectively by
Vargas and petitioner.18 A Motion for Reconsideration and a Supplemental Motion for Reconsideration were filed by
the petitioner which, however, were similarly denied on December 9, 1998.
Petitioner then sought relief with the Court of Appeals, filing therein a Petition for Certiorari. While this was awaiting
resolution, he entered into another lease agreement,19 this time with the respondent, represented by its liquidator,
over the same 450 sq. m. portion of the lot. The contract fixed a period of one month beginning January 28, 1999,
renewable for another month at the exclusive option of the lessor, respondent PAIC Bank.
On December 23, 1999, the appellate court rendered the impugned Decision, dismissing the petition, thus:

"All told, WE find the Order, subject of the instant Petition for Certiorari and Prohibition, to be not without
rational bases and we observe that the court a quo, in issuing its questioned Order, committed no grave
abuse of discretion amounting to lack of jurisdiction.
WHEREFORE, the Petition for Certiorari and Prohibition is hereby DISMISSED and the assailed
December 9, 1998 Order is AFFIRMED in all respects.
SO ORDERED."20
Hence, this appeal, where petitioner raises and argues the following legal issues:
"I. Whether or not public respondent acted without or in excess of its jurisdiction and/or was patently in
error when it affirmed the denial of petitioner's motion for intervention, despite the fact that he has a legal
interest, being a lessee and an assignee of the property subject matter of this case.
II. Whether or not the public respondent committed grave abuse of discretion when it held that what are
required to be instituted before the liquidation court are those claims against the insolvent banks only
considering that the private respondent bank is legally dead due to insolvency and considering further that
there is already a liquidation court (Regional Trial Court of Makati, Branch 57, docketed as Spec. Pro. No.
M-1280) which is exclusively vested with jurisdiction to hear all matters and incidents on liquidation
pursuant to Section 29, Republic Act No. 265, otherwise known as The Central Bank Act, as amended.
III. Whether or not the public respondent committed grave abuse of discretion and/or was patently in error
in affirming the ruling of the trial court, totally disregarding the arguments raised in petitioner's
supplemental motion for reconsideration only through a minute order and without taking into consideration
the fact that there is a pending action in another court (RTC, Pasay City, Branch 231 ) which presents a
prejudicial question to the case at bar.
IV. Whether or not the petitioner is estopped from questioning private respondent's ownership when it
entered into a contract of lease involving the property in question." 21
We will first resolve the jurisdictional and procedural questions raised by the petitioner.
I.
Petitioner postulates that the lower court should have dismissed respondent's "Ex-Parte Petition for Issuance of Writ
of Possession" in Civil Case No. P-9011 for want of jurisdiction over the subject matter of the claim. The power to
hear the same, he insists, exclusively vests with the Liquidation Court pursuant to Section 29 of Republic Act No.
265, otherwise known as The Central Bank Act.22 He then cites our decision in Valenzuela v. Court of
Appeals,23 where we held that "if there is a judicial liquidation of an insolvent bank, all claims against the bank should
be filed in the liquidation proceeding." For going to another court, the respondent, he accuses, is guilty of forum
shopping.
These contentions can not pass judicial muster. The pertinent portion of Section 29 states:
"x x x The liquidator designated as hereunder provided shall, by the Solicitor General, file a petition in the
Regional Trial Court reciting the proceedings which have been taken and praying the assistance of the

court in the liquidation of such institution. The court shall have jurisdiction in the same proceedings to
assist in the adjudication of disputed claims against the bank or non-bank financial intermediary performing
quasi-banking functions and the enforcement of individual liabilities of the stockholders and do all that is
necessary to preserve the assets of such institution and to implement the liquidation plan approved by the
Monetary Board, x x x"24 (emphasis supplied.)
Petitioner apparently failed to appreciate the correct meaning and import of the above-quoted law. The legal
provision only finds operation in cases where there are claims against an insolvent bank. In fine, the exclusive
jurisdiction of the liquidation court pertains only to the adjudication of claims against the bank. It does not cover the
reverse situation where it is the bank which files a claim against another person or legal entity.
This interpretation of Section 29 becomes more obvious in the light of its intent. The requirement that all claims
against the bank be pursued in the liquidation proceedings filed by the Central Bank is intended to prevent
multiplicity of actions against the insolvent bank and designed to establish due process and orderliness in the
liquidation of the bank, to obviate the proliferation of litigations and to avoid injustice and arbitrariness. 25 The
lawmaking body contemplated that for convenience, only one court, if possible, should pass upon the claims against
the insolvent bank and that the liquidation court should assist the Superintendents of Banks and regulate his
operations.26
It then ought to follow that petitioner's reliance on Section 29 and the Valenzuela case is misplaced. The Petition for
the Issuance of a Writ of Possession in Civil Case No. 9011 is not in the nature of a disputed claim against the bank.
On the contrary, it is an action instituted by the respondent bank itself for the preservation of its asset and protection
of its property. It was filed upon the instance of the respondent's liquidator in order to take possession of a tract of
land over which it has ownership claims.
To be sure, the liquidator took the proper course of action when it applied for a writ in the Pasay City RTC. Act
3135,27 entitled An Act to Regulate the Sale of Property Under Special Powers Inserted In or Annexed To Real Estate
Mortgages, mandates that jurisdiction over a Petition for Writ of Possession lies with the court of the province, city, or
municipality where the property subject thereof is situated. This is sanctioned by Section 7 of the said Act, thus:
"SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of
First Instance of the province or place where the property or any part thereof is situated, to give him
possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the
property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this Act x x x"28 (emphasis
supplied)
Since the land subject of this controversy is located in Pasay City, then the city's RTC should rightly take cognizance
of the case, to the exclusion of other courts.
Anent petitioner's auxiliary contention that respondent should be held guilty of forum shopping for not filing the case
in the liquidation court, suffice it to state here that the doctrine only ponders situations where two (or more) cases are
pending before different tribunals.29 Well to point, we have laid down the yardstick to determine whether a party
violated the rule against forum shopping as where the elements of litis pendentia are present or where a final
judgment in one case will amount to res judicata in the other.30 Inasmuch as the case at bar is the only one filed by
the respondent for the issuance of a writ of possession over the subject property, there is no occasion for the
doctrine to apply.

Petitioner next casts doubt on the capacity of the respondent to continue litigating the petition for the issuance of the
writ. He asserts that, being under liquidation, respondent bank is already a "dead" corporation that cannot maintain
the suit in the RTC. Hence, no writ may be issued in its favor.
The argument is devoid of merit. A bank which had been ordered closed by the monetary board retains its juridical
personality which can sue and be sued through its liquidator. The only limitation being that the prosecution or
defense of the action must be done through the liquidator.31 Otherwise, no suit for or against an insolvent entity would
prosper. In such situation, banks in liquidation would lose what justly belongs to them through a mere technicality.32
That the law allows a bank under liquidation to participate in an action can be clearly inferred from the third
paragraph of the same Section 29 of The Central Bank Act earlier quoted, which authorizes or empowers a
liquidator to institute actions, thus: "x x x and he (liquidator) may in the name of the bank or non-bank
financial intermediary performing quasi-banking functions and with the assistance of counsel as he may
retain, institute such actions as may be necessary in the appropriate court to collect and recover accounts
and assets of such institution or defend any action filed against the institution." 33 (emphasis supplied.)
It is therefore beyond dispute that respondent was legally capacitated to petition the court a quo for the issuance of
the writ.
II.
Petitioner likewise proffers one other procedural obstacle, which is the pendency of Civil Case No. 98-0868 in Branch
231 of Pasay City RTC. The said action is the complaint he filed against the respondent for the latter to receive and
accept the redemption price of eighteen million pesos for the subject property. He argues that the primary issue
therein constitutes a prejudicial question in relation to the present case in that if the Court therein will grant
petitioner's prayer, then this will necessarily negate the possessory writ issued by the court a quo.
Again, we are not persuaded. A prejudicial question is one which arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. 34 It generally
comes into play in a situation where a civil action and a criminal action are both pending and there exists in the
former an issue which must be preemptively resolved before the criminal action may proceed, because howsoever
the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the
accused in the criminal case. The rationale behind the principle of prejudicial question is to avoid two conflicting
decisions.35
Here, aside from the fact that Civil Case No. 98-0868 and the present one are both civil in nature and therefore no
prejudicial question can arise from the existence of the two actions,36 it is apparent that the former action was
instituted merely to frustrate the Court's ruling in the case at bar granting the respondent the right to possess the
subject property. It is but a canny and preemptive maneuver on the part of the petitioner to delay, if not prevent, the
execution of a judgment adverse to his interests. It bears stressing that the complaint for mandamus was filed only
on May 7, 1998, sixteen days after the lower court granted respondent's petition and thirteen days after it issued the
writ. It cannot then possibly prejudice a decided case.

At any rate, it taxes our imagination why the questions raised in Case No. 98-0868 must be considered determinative
of Case No. 9011. The basic issue in the former is whether the respondent, as the purchaser in the extra-judicial
foreclosure proceedings, may be compelled to have the property repurchased or resold to a mortgagor's successorin-interest (petitioner): while that in the latter is merely whether the respondent, as the purchaser in the extrajudicial
foreclosure proceedings, is entitled to a writ of possession after the statutory period for redemption has expired. The
two cases, assuming both are pending, can proceed separately and take their own direction independent of each
other.
III.
Having disposed of the jurisdictional and procedural issues, we now come to the merits of the case. Petitioner seeks
intervention in this case by virtue of the lease agreement and the deed of assignment executed in his favor by the
mortgagor (Vargas) and an alleged buyer (Angsico) of the land, respectively. He posits that as a lessee and assignee
in possession of the foreclosed real estate, he automatically acquires interest over the subject matter of the litigation.
This interest is coupled with the fact that he introduced improvements thereon, consisting of a one-storey building
which houses a karaoke-music restaurant, allegedly to the tune of fifteen million pesos (P15,000,000.00). Enforcing
the writ, he adds, without hearing his side would be an injustice to him.
Intervention is a remedy by which a third party, not originally impleaded in the proceeding, becomes a litigant therein
to enable him to protect or preserve a right or interest which may be affected by such proceeding. 37 The pertinent
provision is stated in Section 1, Rule 19 of the 1997 Rules of Civil Procedure, thus:
"SECTION 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely affected by
a distribution or other disposition of property in the custody of the court or of an officer thereof may, with
leave of court, be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether
or not the intervenor's rights may be fully protected in a separate proceeding." 38
Intervention is not a matter of right but may be permitted by the courts only when the statutory conditions for the right
to intervene is shown.39 Thus, the allowance or disallowance of a motion to intervene is addressed to the sound
discretion of the court.40 In determining the propriety of letting a party intervene in a case, the tribunal should not limit
itself to inquiring whether "a person (1) has a legal interest in the matter in litigation; (2) or in the success of either of
the parties; (3) or an interest against both; (4) or when is so situated as to be adversely affected by a distribution or
other disposition of property in the custody of the court or of an officer thereof." 41 Just as important, as we have
stated in Big Country Ranch Corporation v. Court of Appeals,42 is the function to consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the
intervenor's rights may be fully protected in a separate proceeding.
The period within which a person may intervene is also restricted. Section 2, Rule 19 of the 1997 Rules of Civil
Procedure requires:
"SECTION 2. Time to intervene. The motion to intervene may be filed at any time before the rendition of
judgment by the trial court, x x x"
After the lapse of this period, it will not be warranted anymore. This is because, basically, intervention is not an
independent action but is ancillary and supplemental to an existing litigation.43

Taking into account these fundamental precepts, we rule that the petitioner may not properly intervene in the case at
bar. His insistence to participate in the proceeding is an unfortunate case of too little, too late.
In the first place, petitioner's Ex-parte Permission to File a Motion to Intervene was submitted to the RTC only on
June 25, 1998. At that stage, the lower court had already granted respondent's petition for the writ in an Order dated
April 21, 1998. It had issued the Writ of Possession on April 24, 1998. Petitioner's motion then was clearly out of
time, having been filed only at the execution stage. For that reason alone, it must meet the consequence of denial.
While it is true that on May 8, 1998, Vargas and S. Villanueva Enterprises moved to quash the writ, that did not in
any way affect the nature of the RTC's Order as an adjudication on the merits. The issuance of the Order is in
essence a rendition of judgment within the purview of Section 2, Rule 19.
Allowing petitioner to intervene, furthermore, will serve no other purpose but to unduly delay the execution of the writ,
to the prejudice of the respondent. This cannot be countenanced considering that after the consolidation of title in the
buyer's name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right. 44 Its issuance
to a purchaser in an extrajudicial foreclosure is merely a ministerial function. 45 As such, the court neither exercises its
official discretion nor judgment.46 If only to stress the writ's ministerial character, we have, in previous cases,
disallowed injunction to prohibit its issuance,47 just as we have held that issuance of the same may not be stayed by
a pending action for annulment of mortgage or the foreclosure itself.48
Even if he anchors his intervention on the purported interest he has over the land and the improvements thereon,
petitioner, still, should not be allowed to do so. He admits that he is a mere lessee and assignee. Whatever
possessory rights he holds only emanate from that of Vargas, from whom he leased the lot, and from whom his
assignor/predecessor-in-interest bought it. Therein lies the precariousness of his title. Petitioner cannot validly
predicate his supposed interest over the property in litigation on that of Vargas, for the simple reason that as early as
December 4, 1985, the latter has already been stripped of all her rights over the land when she, as mortgagor, failed
to redeem it. A mortgagor has only one year within which to redeem her foreclosed real estate. 49 After that period,
she loses all her interests over it. This is in consonance with Section 78 of the General Banking Act, 50 viz.:
"x x x In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate which
is security for any loan granted before the passage of this Act or the provisions of this Act, the mortgagor
or debtor whose real property has been sold at public auction, judicially or extrajudicially, for the full or
partial payment of an obligation to any bank, banking or credit institution, within the purview of this
Act shall have the right, within one year after the sale of the real estate mortgage as a result of the
foreclosure of the respective mortgage, to redeem the property by paying the amount fixed by the court in
the order or execution x x x"51 (emphasis supplied.)
Being herself bereft of valid title and rights, Vargas can not legitimately convey any to some other person. She could
not have lawfully sold the land to Angsico nor leased it to petitioner for her own account. It is axiomatic that one can
not transmit what one does not have.52 It ought to follow that petitioner could not have acquired any right or interest
from Vargas.
Withal, all is not lost for the petitioner. He can still fully protect his rights in Civil Case No. 98-0868 or the complaint
for mandamus he filed before Branch 231 of the Pasay City RTC. There, he can ventilate his side to a fuller extent as
that would be the more appropriate venue for elucidating whatever legal basis he alleges in compelling the
respondent to sell to him the currently disputed land.
IV.

This brings us to petitioner's final point. He briefly asserts that his act of entering into a lease contract with the
respondent should not affect his right to redeem the subject property.

IN VIEW WHEREOF, finding no cogent reason to disturb the assailed Decision, the instant petition is hereby
DENIED.

The possible legal implication of the lease on the petitioner's act of trying to redeem the disputed lot is a question
which, in our opinion, can best be resolved in the mandamus complaint. Whether the agreement must be construed
as a waiver on his part of exercising his purported right of redemption is an issue best left for the court therein to
decide. Whether by acknowledging the legality of the respondent's claim and title over the land at the time of the
execution of the contract, he likewise perpetually barred himself from redeeming the same is a matter which can be
addressed most aptly in that pending action. Hence, there is presently no need for us to squarely rule on this ultimate
point.

SO ORDERED.
Davide, Jr., C.J., Pardo, and Ynares-Santiago, JJ., concur.
Kapunan, J., on official leave.

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