SPECIAL PROCEEDINGS/Rule 72 1 of 42
1. THIRD DIVISION
G.R. No. 189538 February 10, 2014
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
MERLINDA L. OLAYBAR, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the
Rules of Court are the Regional Trial Court1(RTC) Decision2 dated
May 5, 2009 and Order3 dated August 25, 2009 in SP. Proc. No.
16519-CEB. The assailed decision granted respondent Merlinda L.
Olaybar's petition for cancellation of entries in the latter's marriage
contract; while the assailed order denied the motion for
reconsideration filed by petitioner Republic of the Philippines
through the Office of the Solicitor General (OSG).
The facts of the case are as follows:
Respondent requested from the National Statistics Office (NSO) a
Certificate of No Marriage (CENOMAR) as one of the requirements
for her marriage with her boyfriend of five years. Upon receipt
thereof, she discovered that she was already married to a certain Ye
Son Sune, a Korean National, on June 24, 2002, at the Office of the
Municipal Trial Court in Cities (MTCC), Palace of Justice. She denied
having contracted said marriage and claimed that she did not know
the alleged husband; she did not appear before the solemnizing
officer; and, that the signature appearing in the marriage certificate
is not hers.4 She, thus, filed a Petition for Cancellation of Entries in
the Marriage Contract, especially the entries in the wife portion
thereof.5 Respondent impleaded the Local Civil Registrar of Cebu
City, as well as her alleged husband, as parties to the case.
During trial, respondent testified on her behalf and explained that
she could not have appeared before Judge Mamerto Califlores, the
supposed solemnizing officer, at the time the marriage was allegedly
celebrated, because she was then in Makati working as a medical
distributor in Hansao Pharma. She completely denied having known
the supposed husband, but she revealed that she recognized the
named witnesses to the marriage as she had met them while she
was working as a receptionist in Tadels Pension House. She believed
that her name was used by a certain Johnny Singh, who owned a
travel agency, whom she gave her personal circumstances in order
for her to obtain a passport.6 Respondent also presented as witness
a certain Eufrocina Natinga, an employee of MTCC, Branch 1, who
confirmed that the marriage of Ye Son Sune was indeed celebrated
in their office, but claimed that the alleged wife who appeared was
definitely not respondent.7 Lastly, a document examiner testified
that the signature appearing in the marriage contract was forged. 8
On May 5, 2009, the RTC rendered the assailed Decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, the petition is granted in
favor of the petitioner, Merlinda L. Olaybar. The Local Civil Registrar
of Cebu City is directed to cancel all the entries in the WIFE portion
of the alleged marriage contract of the petitioner and respondent Ye
Son Sune.
SO ORDERED.9
Finding that the signature appearing in the subject marriage
contract was not that of respondent, the court found basis in
granting the latter’s prayer to straighten her record and rectify the
terrible mistake.10
Petitioner, however, moved for the reconsideration of the assailed
Decision on the grounds that: (1) there was no clerical spelling,
typographical and other innocuous errors in the marriage contract
for it to fall within the provisions of Rule 108 of the Rules of Court;
and (2) granting the cancellation of all the entries in the wife portion
of the alleged marriage contract is, in effect, declaring the marriage
void ab initio.11
In an Order dated August 25, 2009, the RTC denied petitioner’s
motion for reconsideration couched in this wise:
WHEREFORE, the court hereby denies the Motion for
Reconsideration filed by the Republic of the Philippines. Furnish
copies of this order to the Office of the Solicitor General, the
petitioner’s counsel, and all concerned government agencies.
SO ORDERED.12
Contrary to petitioner’s stand, the RTC held that it had jurisdiction to
take cognizance of cases for correction of entries even on
substantial errors under Rule 108 of the Rules of Court being the
appropriate adversary proceeding required. Considering that
respondent’s identity was used by an unknown person to contract
marriage with a Korean national, it would not be feasible for
respondent to institute an action for declaration of nullity of
marriage since it is not one of the void marriages under Articles 35
and 36 of the Family Code.13
Petitioner now comes before the Court in this Petition for Review on
Certiorari under Rule 45 of the Rules of Court seeking the reversal of
the assailed RTC Decision and Order based on the following grounds:
I.
RULE 108 OF THE REVISED RULES OF COURT APPLIES ONLY WHEN
THERE ARE ERRORS IN THE ENTRIES SOUGHT TO BE CANCELLED OR
CORRECTED.
II.
GRANTING THE CANCELLATION OF "ALL THE ENTRIES IN THE WIFE
PORTION OF THE ALLEGED MARRIAGE CONTRACT," IS IN EFFECT
DECLARING THE MARRIAGE VOID AB INITIO.14
Petitioner claims that there are no errors in the entries sought to be
cancelled or corrected, because the entries made in the certificate
of marriage are the ones provided by the person who appeared and
represented herself as Merlinda L. Olaybar and are, in fact, the
latter’s personal circumstances.15 In directing the cancellation of the
entries in the wife portion of the certificate of marriage, the RTC, in
effect, declared the marriage null and void ab initio.16Thus, the
petition instituted by respondent is actually a petition for
declaration of nullity of marriage in the guise of a Rule 108
proceeding.17

We deny the petition.
At the outset, it is necessary to stress that a direct recourse to this
Court from the decisions and final orders of the RTC may be taken
where only questions of law are raised or involved. There is a
question of law when the doubt arises as to what the law is on a
certain state of facts, which does not call for the examination of the
probative value of the evidence of the parties.18 Here, the issue
raised by petitioner is whether or not the cancellation of entries in
the marriage contract which, in effect, nullifies the marriage may be
undertaken in a Rule 108 proceeding. Verily, petitioner raised a pure
question of law.
Rule 108 of the Rules of Court sets forth the rules on cancellation or
correction of entries in the civil registry, to wit:
SEC. 1. Who may file petition. – Any person interested in
any act, event, order or decree concerning the civil status
of persons which has been recorded in the civil register,
may file a verified petition for the cancellation or
correction of any entry relating thereto, with the Regional
Trial Court of the province where the corresponding civil
registry is located.
SEC. 2. Entries subject to cancellation or correction. –
Upon good and valid grounds, the following entries in the
civil register may be cancelled or corrected: (a) births; (b)
marriages; (c) deaths; (d) legal separations; (e) judgments
of annulments of marriage; (f) judgments declaring
marriages void from the beginning; (g) legitimations; (h)
adoptions; (i) acknowledgments of natural children; (j)
naturalization; (k) election, loss or recovery of citizenship;
(l) civil interdiction; (m) judicial determination of filiation;
(n) voluntary emancipation of a minor; and (o) changes of
name.
SEC. 3. Parties. – When cancellation or correction of an
entry in the civil register is sought, the civil registrar and all
persons who have or claim any interest which would be
affected thereby shall be made parties to the proceeding.
SEC. 4. Notice and Publication. – Upon the filing of the
petition, the court shall, by an order, fix the time and place
for the hearing of the same, and cause reasonable notice
thereof to be given to the persons named in the petition.
The court shall also cause the order to be published once a
week for three (3) consecutive weeks in a newspaper of
general circulation in the province.
SEC. 5. Opposition. – The civil registrar and any person
having or claiming any interest under the entry whose
cancellation or correction is sought may, within fifteen
(15) days from notice of the petition, or from the last date
of publication of such notice, file his opposition thereto.
SEC. 6. Expediting proceedings. – The court in which the
proceedings is brought may make orders expediting the
proceedings, and may also grant preliminary injunction for
the preservation of the rights of the parties pending such
proceedings.
SEC. 7. Order. – After hearing, the court may either dismiss
the petition or issue an order granting the cancellation or
SPECIAL PROCEEDINGS/Rule 72 2 of 42
correction prayed for. In either case, a certified copy of the
judgment shall be served upon the civil registrar
concerned who shall annotate the same in his record.
Rule 108 of the Rules of Court provides the procedure for
cancellation or correction of entries in the civil registry. The
proceedings may either be summary or adversary. If the correction
is clerical, then the procedure to be adopted is summary. If the
rectification affects the civil status, citizenship or nationality of a
party, it is deemed substantial, and the procedure to be adopted is
adversary. Since the promulgation of Republic v. Valencia19 in 1986,
the Court has repeatedly ruled that "even substantial errors in a civil
registry may be corrected through a petition filed under Rule 108,
with the true facts established and the parties aggrieved by the error
availing themselves of the appropriate adversarial proceeding." 20 An
appropriate adversary suit or proceeding is one where the trial court
has conducted proceedings where all relevant facts have been fully
and properly developed, where opposing counsel have been given
opportunity to demolish the opposite party’s case, and where the
evidence has been thoroughly weighed and considered. 21
It is true that in special proceedings, formal pleadings and a hearing
may be dispensed with, and the remedy [is] granted upon mere
application or motion. However, a special proceeding is not always
summary. The procedure laid down in Rule 108 is not a summary
proceeding per se. It requires publication of the petition; it
mandates the inclusion as parties of all persons who may claim
interest which would be affected by the cancellation or correction; it
also requires the civil registrar and any person in interest to file their
opposition, if any; and it states that although the court may make
orders expediting the proceedings, it is after hearing that the court
shall either dismiss the petition or issue an order granting the same.
Thus, as long as the procedural requirements in Rule 108 are
followed, it is the appropriate adversary proceeding to effect
substantial corrections and changes in entries of the civil register. 22
In this case, the entries made in the wife portion of the certificate of
marriage are admittedly the personal circumstances of respondent.
The latter, however, claims that her signature was forged and she
was not the one who contracted marriage with the purported
husband. In other words, she claims that no such marriage was
entered into or if there was, she was not the one who entered into
such contract. It must be recalled that when respondent tried to
obtain a CENOMAR from the NSO, it appeared that she was married
to a certain Ye Son Sune. She then sought the cancellation of entries
in the wife portion of the marriage certificate.
In filing the petition for correction of entry under Rule 108,
respondent made the Local Civil Registrar of Cebu City, as well as her
alleged husband Ye Son Sune, as parties-respondents. It is likewise
undisputed that the procedural requirements set forth in Rule 108
were complied with. The Office of the Solicitor General was likewise
notified of the petition which in turn authorized the Office of the
City Prosecutor to participate in the proceedings. More importantly,
trial was conducted where respondent herself, the stenographer of
the court where the alleged marriage was conducted, as well as a
document examiner, testified. Several documents were also
considered as evidence. With the testimonies and other evidence
presented, the trial court found that the signature appearing in the
subject marriage certificate was different from respondent’s
signature appearing in some of her government issued identification
cards.23 The court thus made a categorical conclusion that
respondent’s signature in the marriage certificate was not hers and,

therefore, was forged. Clearly, it was established that, as she
claimed in her petition, no such marriage was celebrated.
Indeed the Court made a pronouncement in the recent case of
Minoru Fujiki v. Maria Paz Galela Marinay, Shinichi Maekara, Local
Civil Registrar of Quezon City, and the Administrator and Civil
Registrar General of the National Statistics Office24 that:
To be sure, a petition for correction or cancellation of an entry in the
civil registry cannot substitute for an action to invalidate a marriage.
A direct action is necessary to prevent circumvention of the
substantive and procedural safeguards of marriage under the Family
Code, A.M. No. 02-11-10-SC and other related laws. Among these
safeguards are the requirement of proving the limited grounds for
the dissolution of marriage, support pendente lite of the spouses
and children, the liquidation, partition and distribution of the
properties of the spouses and the investigation of the public
prosecutor to determine collusion. A direct action for declaration of
nullity or annulment of marriage is also necessary to prevent
circumvention of the jurisdiction of the Family Courts under the
Family Courts Act of 1997 (Republic Act No. 8369), as a petition for
cancellation or correction of entries in the civil registry may be filed
in the Regional Trial Court where the corresponding civil registry is
located. In other words, a Filipino citizen cannot dissolve his
marriage by the mere expedient of changing his entry of marriage in
the civil registry.
Aside from the certificate of marriage, no such evidence was
presented to show the existence of marriage.1âwphi1 Rather,
respondent showed by overwhelming evidence that no marriage
was entered into and that she was not even aware of such
existence. The testimonial and documentary evidence clearly
established that the only "evidence" of marriage which is the
marriage certificate was a forgery. While we maintain that Rule 108
cannot be availed of to determine the validity of marriage, we
cannot nullify the proceedings before the trial court where all the
parties had been given the opportunity to contest the allegations of
respondent; the procedures were followed, and all the evidence of
the parties had already been admitted and examined. Respondent
indeed sought, not the nullification of marriage as there was no
marriage to speak of, but the correction of the record of such
marriage to reflect the truth as set forth by the evidence. Otherwise
stated, in allowing the correction of the subject certificate of
marriage by cancelling the wife portion thereof, the trial court did
not, in any way, declare the marriage void as there was no marriage
to speak of.
WHEREFORE, premises considered, the petition is DENIED for lack of
merit. The Regional Trial Court Decision dated May 5, 2009 and
Order dated August 25, 2009 in SP. Proc. No. 16519-CEB, are
AFFIRMED.
SO ORDERED.
2. SECOND DIVISION
G.R. No. 170498 January 9, 2013
METROPOLITAN BANK & TRUST COMPANY, Petitioner,
vs.
ABSOLUTE MANAGEMENT CORPORATION, Respondent.
DECISION
SPECIAL PROCEEDINGS/Rule 72 3 of 42
BRION, J.:
We resolve petitioner Metropolitan Bank & Trust Company's (Metro
bank's) petition for review on certiorari1 seeking the reversal of the
decision2 dated August 25, 2005 and the resolution3 dated
November 17, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
86336. The assailed decision affirmed the order4 dated May 7, 2004
of the Regional Trial Court (RTC) of Quezon City, Branch 80. The RTC
had denied the admission of Metrobank's Fourth-Party
Complaint5 against the Estate of Jose L. Chua for being a money
claim that falls under Section 5, Rule 86 of the Rules of Court; the
claim should have been filed in the pending judicial settlement of
Chua’s estate before the RTC of Pasay City. The CA affirmed the
RTC’s order based on the same ground.
Factual Antecedents
On October 5, 2000, Sherwood Holdings Corporation, Inc. (SHCI)
filed a complaint for sum of money against Absolute Management
Corporation (AMC). The complaint was docketed as Civil Case No. Q-
00-42105 and was assigned to the RTC of Quezon City, Branch 80.6
SHCI alleged in its complaint that it made advance payments to AMC
for the purchase of 27,000 pieces of plywood and 16,500 plyboards
in the sum of ₱12,277,500.00, covered by Metrobank Check Nos.
1407668502, 140768507, 140768530, 140768531, 140768532,
140768533 and 140768534. These checks were all crossed, and were
all made payable to AMC. They were given to Chua, AMC’s General
Manager, in 1998.7
Chua died in 1999, 8 and a special proceeding for the settlement of
his estate was commenced before the RTC of Pasay City. This
proceeding was pending at the time AMC filed its answer with
counterclaims and third-party complaint.9
SHCI made demands on AMC, after Chua’s death, for allegedly
undelivered items worth ₱8,331,700.00. According to AMC, these
transactions could not be found in its records. Upon investigation,
AMC discovered that in 1998, Chua received from SHCI 18
Metrobank checks worth ₱31,807,500.00. These were all payable to
AMC and were crossed or "for payee’s account only."10
In its answer with counterclaims and third-party complaint,11 AMC
averred that it had no knowledge of Chua’s transactions with SHCI
and it did not receive any money from the latter. AMC also asked
the RTC to hold Metrobank liable for the subject checks in case it is
adjudged liable to SHCI.
Metrobank filed a motion for bill of particulars,12 seeking to clarify
certain ambiguous statements in AMC’s answer. The RTC granted
the motion but AMC failed to submit the required bill of particulars.
Hence, Metrobank filed a motion to strike out the third-party
complaint.13
In the meantime, Metrobank filed a motion to dismiss14 against AMC
on the ground that the latter engaged in prohibited forum shopping.
According to Metrobank, AMC’s claim against it is the same claim
that it raised against Chua’s estate in Special Proceedings No. 99-
0023 before the RTC of Pasay City, Branch 112. The RTC
subsequently denied this motion.15

The RTC of Quezon City opted to defer consideration16of
Metrobank’s motion to strike out third-party complaint17and it
instead granted AMC’s motion for leave to serve written
interrogatories on the third-party defendant.18 While Metrobank
filed its answer to the written interrogatories, AMC was again
directed by the RTC, in an order19 dated August 13, 2003, to submit
its bill of particulars. Instead, AMC filed a motion for
reconsideration20 which was denied in an order21 dated October 28,
2003. AMC still did not file its bill of particulars. The RTC, on the
other hand, did not act on Metrobank’s motion to strike out AMC’s
third-party complaint.22
In its answer23 dated December 1, 2003, Metrobank admitted that it
deposited the checks in question to the account of Ayala Lumber
and Hardware, a sole proprietorship Chua owned and managed. The
deposit was allegedly done with the knowledge and consent of AMC.
According to
Metrobank, Chua then gave the assurance that the arrangement for
the handling of the checks carried AMC’s consent. Chua also
submitted documents showing his position and interest in AMC.
These documents, as well as AMC’s admission in its answer that it
allowed Chua to manage AMC with a relative free hand, show that it
knew of Chua’s arrangement with Metrobank. Further, Chua’s
records show that the proceeds of the checks were remitted to AMC
which cannot therefore now claim that it did not receive these
proceeds.
Metrobank also raised the defense of estoppel. According to
Metrobank, AMC had knowledge of its arrangements with Chua for
several years. Despite this arrangement, AMC did not object to nor
did it call the attention of Metrobank about Chua’s alleged lack of
authority to deposit the checks in Ayala Lumber and Hardware’s
account. At this point, AMC is already estopped from questioning
Chua’s authority to deposit these checks in Ayala Lumber and
Hardware’s account.
Lastly, Metrobank asserted that AMC gave Chua unbridled control in
managing AMC’s affairs. This measure of control amounted to gross
negligence that was the proximate cause of the loss that AMC must
now bear.
Subsequently, Metrobank filed a motion for leave to admit fourth-
party complaint24 against Chua’s estate. It alleged that Chua’s estate
should reimburse Metrobank in case it would be held liable in the
third-party complaint filed against it by AMC.
The RTC’s Ruling
In an order25 dated May 7, 2004, the RTC denied Metrobank’s
motion. It likewise denied Metrobank’s motion for reconsideration
in an order26 dated July 7, 2004.
The RTC categorized Metrobank’s allegation in the fourth-party
complaint as a "cobro de lo indebido"27 – a kind of quasi-contract
that mandates recovery of what has been improperly paid. Quasi-
contracts fall within the concept of implied contracts that must be
included in the claims required to be filed with the judicial
settlement of the deceased’s estate under Section 5, Rule 86 of the
Rules of Court. As such claim, it should have been filed in Special
Proceedings No. 99-0023, not before the RTC as a fourth-party
complaint. The RTC, acting in the exercise of its general jurisdiction,
does not have the authority to adjudicate the fourth-party
SPECIAL PROCEEDINGS/Rule 72 4 of 42
complaint. As a trial court hearing an ordinary action, it cannot
resolve matters pertaining to special proceedings because the latter
is subject to specific rules.
Metrobank responded to the RTC ruling by filing a petition for
certiorari28 under Rule 65 before the CA.
The CA’s Ruling
The CA affirmed the RTC’s ruling that Metrobank’s fourth-party
complaint should have been filed in Special Proceedings No. 99-
0023.29 According to the CA, the relief that Metrobank prayed for
was based on a quasi-contract and was a money claim categorized
as an implied contract that should be filed under Section 5, Rule 86
of the Rules of Court.
Based on the statutory construction principle of lex specialis derogat
generali, the CA held that Section 5, Rule 86 of the Rules of Court is a
special provision that should prevail over the general provisions of
Section 11, Rule 6 of the Rules of Court. The latter applies to money
claims in ordinary actions while a money claim against a person
already deceased falls under the settlement of his estate that is
governed by the rules on special proceedings. If at all, rules for
ordinary actions only apply suppletorily to special proceedings.
The Present Petition
In its present petition for review on certiorari,30 Metrobank asserts
that it should be allowed to file a fourth-party complaint against
Chua’s estate in the proceedings before the RTC; its fourth-party
complaint was filed merely to enforce its right to be reimbursed by
Chua’s estate in case Metrobank is held liable to AMC. Hence,
Section 11, Rule 6 of the Rules of Court should apply.
AMC, in its comment,31 maintains the line that the CA and the RTC
rulings should be followed, i.e., that Metrobank’s claim is a quasi-
contract that should be filed as a claim under Section 5, Rule 86 of
the Rules of Court.
AMC also challenges the form of Metrobank’s petition for failure to
comply with Section 4, Rule 45 of the Rules of Court. This provision
requires petitions filed before the Supreme Court to be
accompanied by "such material portions of the record as would
support the petition."
According to AMC, the petition’s annexes are mostly Metrobank’s
pleadings and court issuances. It did not append all relevant AMC
pleadings before the RTC and the CA. For this reason, the petition
should have been dismissed outright.
Issues
The parties’ arguments, properly joined, present to us the following
issues:
1) Whether the petition for review on certiorari filed by
Metrobank before the Supreme Court complies with
Section 4, Rule 45 of the Rules of Court; and
2) Whether Metrobank’s fourth-party complaint against
Chua’s estate should be allowed.

The Court’s Ruling
The Present Petition Complies With Section 4, Rule 45 of the Rules
of Court
AMC posits that Metrobank’s failure to append relevant AMC
pleadings submitted to the RTC and to the CA violated Section 4,
Rule 45 of the Rules of Court,32 and is a sufficient ground to dismiss
the petition under Section 5, Rule 45 of the Rules of Court.33
We disagree with AMC’s position.
In F.A.T. Kee Computer Systems, Inc. v. Online Networks
International, Inc.,34 Online Networks International, Inc. similarly
assailed F.A.T. Kee Computer Systems, Inc.’s failure to attach the
transcript of stenographic notes (TSN) of the RTC proceedings, and
claimed this omission to be a violation of Section 4, Rule 45 of the
Rules of Court that warranted the petition’s dismissal. The Court
held that the defect was not fatal, as the TSN of the proceedings
before the RTC forms part of the records of the case. Thus, there
was no incurable omission that warranted the outright dismissal of
the petition.
The Court significantly pointed out in F.A.T. Kee that the
requirement in Section 4, Rule 45 of the Rules of Court is not meant
to be an absolute rule whose violation would automatically lead to
the petition’s dismissal.35 The Rules of Court has not been intended
to be totally rigid. In fact, the Rules of Court provides that the
Supreme Court "may require or allow the filing of such pleadings,
briefs, memoranda or documents as it may deem necessary within
such periods and under such conditions as it may consider
appropriate";36 and "[i]f the petition is given due course, the
Supreme Court may require the elevation of the complete record of
the case or specified parts thereof within fifteen (15) days from
notice."37 These provisions are in keeping with the overriding
standard that procedural rules should be liberally construed to
promote their objective and to assist the parties in obtaining a just,
speedy and inexpensive determination of every action or
proceeding.38
Under this guiding principle, we do not see Metrobank’s omission to
be a fatal one that should warrant the petition’s outright dismissal.
To be sure, the omission to submit the adverse party’s pleadings in a
petition before the Court is not a commendable practice as it may
lead to an unduly biased narration of facts and arguments that
masks the real issues before the Court. Such skewed presentation
could lead to the waste of the Court’s time in sifting through the
maze of the parties’ narrations of facts and arguments and is a
danger the Rules of Court seeks to avoid.
Our examination of Metrobank’s petition shows that it contains
AMC’s opposition to its motion to admit fourth-party complaint
among its annexes. The rest of the pleadings have been
subsequently submitted as attachments in Metrobank’s Reply. A
reading of these pleadings shows that their arguments are the same
as those stated in the orders of the trial court and the Court of
Appeals. Thus, even if Metrobank’s petition did not contain some of
AMC’s pleadings, the Court still had the benefit of a clear narration
of facts and arguments according to both parties’ perspectives. In
this broader view, the mischief that the Rules of Court seeks to avoid
has not really been present. If at all, the omission is not a grievous
one that the spirit of liberality cannot address.
SPECIAL PROCEEDINGS/Rule 72 5 of 42
The Merits of the Main Issue
The main issue poses to us two essential points that must be
addressed. First, are quasi-contracts included in claims that should
be filed pursuant to Rule 86, Section 5 of the Rules of Court? Second,
if so, is Metrobank’s claim against the Estate of Jose Chua based on a
quasi-contract?
Quasi-contracts are included in
claims that should be filed under Rule
86, Section 5 of the Rules of Court
In Maclan v. Garcia,39 Gabriel Maclan filed a civil case to recover
from Ruben Garcia the necessary expenses he spent as possessor of
a piece of land. Garcia acquired the land as an heir of its previous
owner. He set up the defense that this claim should have been filed
in the special proceedings to settle the estate of his predecessor.
Maclan, on the other hand, contended that his claim arises from law
and not from contract, express or implied. Thus, it need not be filed
in the settlement of the estate of Garcia’s predecessor, as mandated
by Section 5, Rule 87 of the Rules of Court (now Section 5, Rule 86).
The Court held under these facts that a claim for necessary expenses
spent as previous possessor of the land is a kind of quasi-contract.
Citing Leung Ben v. O’Brien,40 it explained that the term "implied
contracts," as used in our remedial law, originated from the
common law where obligations derived from quasi-contracts and
from law are both considered as implied contracts. Thus, the term
quasi-contract is included in the concept "implied contracts" as used
in the Rules of Court. Accordingly, liabilities of the deceased arising
from quasi-contracts should be filed as claims in the settlement of
his estate, as provided in Section 5, Rule 86 of the Rules of Court.41
Metrobank’s fourth-party complaint is
based on quasi-contract
Both the RTC and the CA described Metrobank’s claim against
Chua’s estate as one based on quasi-contract. A quasi-contract
involves a juridical relation that the law creates on the basis of
certain voluntary, unilateral and lawful acts of a person, to avoid
unjust enrichment.42 The Civil Code provides an enumeration of
quasi-contracts,43 but the list is not exhaustive and merely provides
examples.44
According to the CA, Metrobank’s fourth-party complaint falls under
the quasi-contracts enunciated in Article 2154 of the Civil
Code.45 Article 2154 embodies the concept "solutio indebiti" which
arises when something is delivered through mistake to a person who
has no right to demand it. It obligates the latter to return what has
been received through mistake.46
Solutio indebiti, as defined in Article 2154 of the Civil Code, has two
indispensable requisites: first, that something has been unduly
delivered through mistake; and second, that something was
received when there was no right to demand it.47
In its fourth-party complaint, Metrobank claims that Chua’s estate
should reimburse it if it becomes liable on the checks that it
deposited to Ayala Lumber and Hardware’s account upon Chua’s
instructions.
 SPECIAL PROCEEDINGS/Rule 72 6 of 42
This fulfills the requisites of solutio indebiti. First, Metrobank acted Court should prevail over the general provisions of Section 11, Rule
in a manner akin to a mistake when it deposited the AMC checks to 6 of the Rules of Court; the settlement of the estate of deceased
Ayala Lumber and Hardware’s account; because of Chua’s control persons (where claims against the deceased should be filed) is
over AMC’s operations, Metrobank assumed that the checks payable primarily governed by the rules on special proceedings, while the
to AMC could be deposited to Ayala Lumber and Hardware’s rules provided for ordinary claims, including Section 11, Rule 6 ofthe
account. Second, Ayala Lumber and Hardware had no right to Rules of Court, merely apply suppletorily.49
demand and receive the checks that were deposited to its account;
despite Chua’s control over AMC and Ayala Lumber and Hardware, In sum, on all counts in the considerations material to the issues
the two entities are distinct, and checks exclusively and expressly posed, the resolution points to the affirmation of the assailed CA
payable to one cannot be deposited in the account of the other. This decision and resolution. Metrobank's claim in its fourth-party
disjunct created an obligation on the part of Ayala Lumber and complaint against Chua's estate is based on quasi-contract. It is also
Hardware, through its sole proprietor, Chua, to return the amount of a contingent claim that depends on another event. Both belong to
these checks to Metrobank. the category of claims against a deceased person that should be
filed under Section 5, Rule 86 of the Rules of Comi and, as such,
The Court notes, however, that its description of Metrobank’s should have been so filed in Special Proceedings No. 99-0023.
fourth-party complaint as a claimclosely analogous to solutio
indebiti is only to determine the validity of the lower courts’ orders WHEREFORE, premises considered, we hereby DENY the petition for
denying it. It is not an adjudication determining the liability of Chua’s lack of merit. The decision of the Court of Appeals dated August 25,
estate against Metrobank. The appropriate trial court should still 2005, holding that the Regional Trial Court of Quezon City, Branch
determine whether Metrobank has a lawful claim against Chua’s 80, did not commit grave abuse of discretion in denying
estate based on quasi-contract.1âwphi1 Metropolitan Bank & Trust Company's motion for leave to admit
fourth-party complaint Is
Metrobank’s fourth-party complaint,
as a contingent claim, falls within the AFFIRMED. Costs against Metropolitan Bank & Trust Company.
claims that should be filed under
Section 5, Rule 86 of the Rules of
SO ORDERED.
Court

3. FIRST DIVISION
A distinctive character of Metrobank’s fourth-party complaint is its
contingent nature – the claim depends on the possibility that
Metrobank would be adjudged liable to AMC, a future event that G.R. No. 174975 January 20, 2009
may or may not happen. This characteristic unmistakably marks the
complaint as a contingent one that must be included in the claims LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR., LILLIBETH
falling under the terms of Section 5, Rule 86 of the Rules of Court: MONTAÑER-BARRIOS, AND RHODORA ELEANOR MONTAÑER-
DALUPAN, Petitioners,
Sec. 5. Claims which must be filed under the notice. If not filed, vs.
barred; exceptions. – All claims for money against the decedent, SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL DISTRICT,
arising from contract, express or implied, whether the same be due, MARAWI CITY, LILING DISANGCOPAN, AND ALMAHLEEN LILING S.
not due, or contingent, all claims for funeral expenses and expenses MONTAÑER, Respondents.
for the last sickness of the decedent, and judgment for money
against the decedent, must be filed within the time limited in the DECISION
notice. [italics ours]
PUNO, C.J.:
Specific provisions of Section 5, Rule
86 of the Rules of Court prevail over This Petition for Certiorari and Prohibition seeks to set aside the
general provisions of Section 11, Rule Orders of the Shari’a District Court, Fourth Shari’a Judicial District,
6 of the Rules of Court Marawi City, dated August 22, 20061 and September 21, 2006.2

Metrobank argues that Section 11, Rule 6 of the Rules of Court
should apply because it impleaded Chua’s estate for reimbursement
in the same transaction upon which it has been sued by AMC. On
this point, the Court supports the conclusion of the CA, to wit:
Notably, a comparison of the respective provisions of Section 11,
Rule 6 and Section 5, Rule 86 of the Rules of Court readily shows
that Section 11, Rule 6 applies to ordinary civil actions while Section
5, Rule 86 specifically applies to money claims against the estate.
The specific provisions of Section 5, Rule 86 x x x must therefore
prevail over the general provisions of Section 11, Rule 6.48
We read with approval the CA’s use of the statutory construction
principle of lex specialis derogat generali, leading to the conclusion
that the specific provisions of Section 5, Rule 86 of the Rules of
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.
SPECIAL PROCEEDINGS/Rule 72 7 of 42
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.21The designation given by parties to their
own pleadings does not necessarily bind the courts to treat it
according to the said 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 answer25 or a motion to dismiss.26 Otherwise, jurisdiction
would depend almost entirely on the defendant27 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
SPECIAL PROCEEDINGS/Rule 72 8 of 42
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 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
SPECIAL PROCEEDINGS/Rule 72 9 of 42
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.
4. 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 defendant-appellee
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.1âwphi1.nêt
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
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.
1860594 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.
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 /
SPECIAL PROCEEDINGS/Rule 72 10 of 42
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 and Mendoza 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.
SPECIAL PROCEEDINGS/Rule 72 11 of 42
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.1âwphi1.nêt
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.
5. SECOND DIVISION
G.R. No. 109373 March 20, 1995
PACIFIC BANKING CORPORATION EMPLOYEES ORGANIZATION,
PAULA S. PAUG, and its officers and members, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and VITALIANO N. NAÑAGAS
II, as Liquidator of Pacific Banking Corporation, respondents.
G.R. No. 112991 March 20, 1995
THE PRESIDENT OF THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION, as Liquidator of the Pacific Banking Corporation
, petitioner,
vs.

COURT OF APPEALS, HON. JUDGE REGINO T. VERIDIANO II, DEPUTY
SHERIFF RAMON ENRIQUEZ and ANG ENG JOO, ANG KEONG LAN
and E.J ANG INT'L. LTD., represented by their Attorney-in-fact,
GONZALO C. SY, respondents.
MENDOZA, J.:
These cases have been consolidated because the principal question
involved is the same: whether a petition for liquidation under §29 of
Rep. Act No. 265, otherwise known as the Central Bank Act, is a
special proceeding or an ordinary civil action. The Fifth and the
Fourteenth Divisions of the Court of Appeals reached opposite
results on this question and consequently applied different periods
for appealing.
The facts are as follows:
I.
Proceedings in the CB and the RTC
On July 5, 1985, the Pacific Banking Corporation (PaBC) was placed
under receivership by the Central Bank of the Philippines pursuant
to Resolution No. 699 of its Monetary Board. A few months later, it
was placed under liquidation1 and a Liquidator was appointed.2
On April 7, 1986, the Central Bank filed with the Regional Trial Court
of Manila Branch 31, a petition entitled "Petition for Assistance in
the Liquidation of Pacific Banking Corporation." 3 The petition was
approved, after which creditors filed their claims with the court.
On May 17, 1991, a new Liquidator, Vitaliano N. Nañagas,4 President
of the Philippine Deposit Insurance Corporation (PDIC), was
appointed by the Central Bank.
On March 13, 1989 the Pacific Banking Corporation Employees
Organization (Union for short), petitioner in G.R. No. 109373, filed a
complaint-in-intervention seeking payment of holiday pay, 13th
month pay differential, salary increase differential, Christmas bonus,
and cash equivalent of Sick Leave Benefit due its members as
employees of PaBC. In its order dated September 13, 1991, the trial
court ordered payment of the principal claims of the Union.5
The Liquidator received a copy of the order on September 16, 1991.
On October 16, 1991, he filed a Motion for Reconsideration and
Clarification of the order. In his order of December 6, 1991, the
judge modified his September 13, 19916 but in effect denied the
Liquidator's motion for reconsideration. This order was received by
the Liquidator on December 9, 1991. The following day, December
10, 1991, he filed a Notice of Appeal and a Motion for Additional
Time to Submit Record on Appeal. On December 23, 1991, another
Notice of Appeal was filed by the Office of the Solicitor General in
behalf of Nañagas.
In his order of February 10, 1992, respondent judge disallowed the
Liquidator's Notice of Appeal on the ground that it was late, i.e.,
more than 15 days after receipt of the decision. The judge declared
his September 13, 1991 order and subsequent orders to be final and
executory and denied reconsideration. On March 27, 1992, he
granted the Union's Motion for issuance of a writ of Execution.
SPECIAL PROCEEDINGS/Rule 72 12 of 42
Ang Keong Lan and E.J. Ang Int'l., private respondents in G.R. No.
112991, likewise filed claims for the payment of investment in the
PaBC allegedly in the form of shares of stocks amounting to
US$2,531,632.18. The shares of stocks, consisting of 154,462
common shares, constituted 11% of the total subscribed capital
stock of the PaBC. They alleged that their claim constituted foreign
exchange capital investment entitled to preference in payment
under the Foreign Investments Law.
In his order dated September 11, 1992, respondent judge of the RTC
directed the Liquidator to pay private respondents the total amount
of their claim as preferred creditors.7
The Liquidator received the order on September 16, 1992. On
September 30, 1992 he moved for reconsideration, but his motion
was denied by the court on October 2, 1992. He received the order
denying his Motion for Reconsideration on October 5, 1992. On
October 14, 1992 he filed a Notice of Appeal from the orders of
September 16, 1992 and October 2, 1992. As in the case of the
Union, however, the judge ordered the Notice of Appeal stricken off
the record on the ground that it had been filed without authority of
the Central Bank and beyond 15 days. In his order of October 28,
1992, the judge directed the execution of his September 11, 1992
order granting the Stockholders/ Investors' claim.
II.
Proceedings in the Court of Appeals
The Liquidator filed separate Petitions for Certiorari, Prohibition
and Mandamus in the Court of Appeals to set aside the orders of the
trial court denying his appeal from the orders granting the claims of
Union and of the Stockholders/Investors. The two Divisions of the
Court of Appeals, to which the cases were separately raffled,
rendered conflicting rulings.
In its decision of November 17, 1992 in CA-G.R. SP No. 27751 (now
G.R. No. 09373) the Fifth Division8 held in the case of the Union that
the proceeding before the trial court was a special proceeding and,
therefore, the period for appealing from any decision or final order
rendered therein is 30 days. Since the notice of appeal of the
Liquidator was filed on the 30th day of his receipt of the decision
granting the Union's claims, the appeal was brought on time. The
Fifth Division, therefore, set aside the orders of the lower court and
directed the latter to give due course to the appeal of the Liquidator
and set the Record on Appeal he had filed for hearing.
On the other hand, on December 16, 1993, the Fourteenth
Division9 ruled in CA-G.R. SP No. 29351 (now G.R. No. 112991) in the
case of the Stockholders/Investors that a liquidation proceeding is
an ordinary action. Therefore, the period for appealing from any
decision or final order rendered therein is 15 days and that since the
Liquidator's appeal notice was filed on the 23rd day of his receipt of
the order appealed from, deducting the period during which his
motion for reconsideration was pending, the notice of appeal was
filed late. Accordingly, the Fourteenth Division dismissed the
Liquidator's petition.
III.
Present Proceedings
 SPECIAL PROCEEDINGS/Rule 72 13 of 42
The Union and the Liquidator then separately filed petitions before ordinary action, the period of appeal is 15 days from notice of the
this Court. decision or final order appealed from.

In G.R. No. 109373 the Union contends that: BP Blg. 129 provides:

1. The Court of Appeals acted without §39. Appeals. — The period for appeal from final
jurisdiction over the subject matter or nature of orders, resolutions, awards, judgments, or
the suit. decisions of any court in all cases shall be fifteen
(15) days counted from the notice of the final
2. The Court of Appeals gravely erred in taking order, resolution, award, judgment or decision
cognizance of the petition for certiorari filed by appealed from: Provided, however, that
Nañagas who was without any legal authority to in habeas corpus cases the period for appeal
file it. shall be forty-eight (48) hours from the notice of
the judgment appealed from.
3. The Court of Appeals erred in concluding that
the case is a special proceeding governed by No record on appeal shall be required to take an
Rules 72 to 109 of the Revised Rules of Court. appeal. In lieu thereof, the entire record shall be
transmitted with all the pages prominently
numbered consecutively, together with an index
4. The Court of Appeals erred seriously in
of the contents thereof.
concluding that the notice of appeal filed by
Nañagas was filed on time.
This section shall not apply in appeals in special
proceedings and in other cases wherein multiple
5. The Court of Appeals erred seriously in
appeals are allowed under applicable provisions
declaring that the second notice of appeal filed
of the Rules of Court.
on December 23, 1991 by the Solicitor General is
a superfluity.
The Interim Rules and Guidelines to implement BP Blg. 129 provides:
On the other hand, in G.R. No. 112991 the Liquidator contends that:
19. Period of Appeals. —
1. The Petition for Assistance in the Liquidation
of the Pacific Banking Corporation s a Special (a) All appeals, except
Proceeding case and/or one which allows in habeas corpus cases and in
multiple appeals, in which case the period of the cases referred to in
appeal is 30 days and not 15 days from receipt of paragraph (b) hereof, must
the order/judgment appealed from. be taken within fifteen (15)
days from notice of the
judgment, order, resolution
2. Private respondents are not creditors of PaBC
or award appealed from.
but are plain stockholders whose right to receive
payment as such would accrue only after all the
creditors of the insolvent bank have been paid. (b) In appeals in special
proceedings in accordance
with Rule 109 of the Rules of
3. The claim of private respondents in the
Court and other cases
amount of US$22,531,632.18 is not in the nature
wherein multiple appeals are
of foreign investment as it is understood in law.
allowed, the period of
appeals shall be thirty (30)
4. The claim of private respondents has not been days, a record on appeal
clearly established and proved. being required.

5. The issuance of a writ of execution against the The Fourteenth Division of the Court of Appeals held that the
assets of PaBC was made with grave abuse of proceeding is an ordinary action similar to an action for interpleader
discretion. under Rule 63. 10 The Fourteenth Division stated:

The petitions in these cases must be dismissed. The petition filed is akin to an interpleader under
Rule 63 of the Rules of Court where there are
First. As stated in the beginning, the principal question in these conflicting claimants or several claims upon the
cases is whether a petition for liquidation under §29 of Rep. Act No. same subject matter, a person who claims no
265 is in the nature of a special proceeding. If it is, then the period of interest thereon may file an action for
appeal is 30 days and the party appealing must, in addition to a interpleader to compel the claimants to
notice of appeal, file with the trial court a record on appeal in order "interplead" and litigate their several claims
to perfect his appeal. Otherwise, if a liquidation proceeding is an among themselves. (Section I Rule 63).

An interpleader is in the category of a special
civil action under Rule 62 which, like an ordinary
action, may be appealed only within fifteen (15)
days from notice of the judgment or order
appealed from. Under Rule 62, the preceding
rules covering ordinary civil actions which are
not inconsistent with or may serve to
supplement the provisions of the rule relating to
such civil actions are applicable to special civil
actions. This embraces Rule 41 covering appeals
from the regional trial court to the Court of
Appeals.
xxx xxx xxx
Thus, under Section 1 Rule 2 of the Rules of
Court, an action is defined as "an ordinary suit in
a court of justice by which one party prosecutes
another for the enforcement or protection of a
right or the prevention or redress of a wrong."
On the other hand, Section 2 of the same Rule
states that "every other remedy including one to
establish the status or right of a party or a
particular fact shall be by special proceeding."
To our mind, from the aforequoted definitions of
an action and a special proceeding, the petition
for assistance of the court in the liquidation of
an asset of a bank is not "one to establish the
status or right of a party or a particular fact."
Contrary to the submission of the petitioner, the
petition is not intended to establish the fact of
insolvency of the bank. The insolvency of the
bank had already been previously determined by
the Central Bank in accordance with Section 9 of
the CB Act before the petition was filed. All that
needs to be done is to liquidate the assets of the
bank and thus the assistance of the respondent
court is sought for that purpose.
It should be pointed out that this petition filed is
not among the cases categorized as a special
proceeding under Section 1, Rule 72 of the Rules
of Court, nor among the special proceedings that
may be appealed under Section 1, Rule 109 of
the Rules.
We disagree with the foregoing view of the Fourteenth Division.
Rule 2 of the Rules of Court provide:
§1. Action defined. — Action means an ordinary
suit in a court of justice, by which the party
prosecutes another for the enforcement or
protection of a right, or the prevention or
redress of a wrong.
§2. Special Proceeding Distinguished. — Every
other remedy, including one to establish the
status or right of a party or a particular fact, shall
be by special proceeding.
Elucidating the crucial distinction between an ordinary action and a
special proceeding, Chief Justice Moran states:" 11
SPECIAL PROCEEDINGS/Rule 72 14 of 42
Action is the act by which one sues another in a
court of justice for the enforcement or
protection of a right, or the prevention or
redress of a wrong while special proceeding is
the act by which one seeks to establish the
status or right of a party, or a particular fact.
Hence, action is distinguished from special
proceeding in that the former is a formal
demand of a right by one against another, while
the latter is but a petition for a declaration of a
status, right or fact. Where a party litigant seeks
to recover property from another, his remedy is
to file an action. Where his purpose is to seek
the appointment of a guardian for an insane, his
remedy is a special proceeding to establish the
fact or status of insanity calling for an
appointment of guardianship.
Considering this distinction, a petition for liquidation of an insolvent
corporation should be classified a special proceeding and not an
ordinary action. Such petition does not seek the enforcement or
protection of a right nor the prevention or redress of a wrong
against a party. It does not pray for affirmative relief for injury
arising from a party's wrongful act or omission nor state a cause of
action that can be enforced against any person.
What it seeks is merely a declaration by the trial court of the
corporation's insolvency so that its creditors may be able to file their
claims in the settlement of the corporation's debts and obligations.
Put in another way, the petition only seeks a declaration of the
corporation's debts and obligations. Put in another way, the petition
only seeks a declaration of the corporation's state of insolvency and
the concomitant right of creditors and the order of payment of their
claims in the disposition of the corporation's assets.
Contrary to the rulings of the Fourteenth Division, liquidation
proceedings do not resemble petitions for interpleader. For one, an
action for interpleader involves claims on a subject matter against a
person who has no interest therein. 12 This is not the case in a
liquidation proceeding where the Liquidator, as representative of
the corporation, takes charge of its assets and liabilities for the
benefit of the creditors.13 He is thus charged with insuring that the
assets of the corporation are paid only to rightful claimants and in
the order of payment provided by law.
Rather, a liquidation proceeding resembles the proceeding for the
settlement of state of deceased persons under Rules 73 to 91 of the
Rules of Court. The two have a common purpose: the determination
of all the assets and the payment of all the debts and liabilities of
the insolvent corporation or the estate. The Liquidator and the
administrator or executor are both charged with the assets for the
benefit of the claimants. In both instances, the liability of the
corporation and the estate is not disputed. The court's concern is
with the declaration of creditors and their rights and the
determination of their order of payment.
Furthermore, as in the settlement of estates, multiple appeals are
allowed in proceedings for liquidation of an insolvent corporation.
As the Fifth Division of the Court of Appeals, quoting the Liquidator,
correctly noted:
A liquidation proceeding is a single proceeding
which consists of a number of cases properly

classified as "claims." It is basically a two-phased
proceeding. The first phase is concerned with
the approval and disapproval of claims. Upon the
approval of the petition seeking the assistance of
the proper court in the liquidation of a close
entity, all money claims against the bank are
required to be filed with the liquidation court.
This phase may end with the declaration by the
liquidation court that the claim is not proper or
without basis. On the other hand, it may also
end with the liquidation court allowing the claim.
In the latter case, the claim shall be classified
whether it is ordinary or preferred, and
thereafter included Liquidator. In either case,
the order allowing or disallowing a particular
claim is final order, and may be appealed by the
party aggrieved thereby.
The second phase involves the approval by the
Court of the distribution plan prepared by the
duly appointed liquidator. The distribution plan
specifies in detail the total amount available for
distribution to creditors whose claim were
earlier allowed. The Order finally disposes of the
issue of how much property is available for
disposal. Moreover, it ushers in the final phase
of the liquidation proceeding — payment of all
allowed claims in accordance with the order of
legal priority and the approved distribution plan.
Verily, the import of the final character of an
Order of allowance or disallowance of a
particular claim cannot be overemphasized. It is
the operative fact that constitutes a liquidation
proceeding a "case where multiple appeals are
allowed by law." The issuance of an Order which,
by its nature, affects only the particular claims
involved, and which may assume finality if no
appeal is made therefrom, ipso factocreates a
situation where multiple appeals are allowed.
A liquidation proceeding is commenced by the
filing of a single petition by the Solicitor General
with a court of competent jurisdiction entitled,
"Petition for Assistance in the Liquidation of e.g.,
Pacific Banking Corporation. All claims against
the insolvent are required to be filed with the
liquidation court. Although the claims are
litigated in the same proceeding, the treatment
is individual. Each claim is heard separately. And
the Order issued relative to a particular claim
applies only to said claim, leaving the other
claims unaffected, as each claim is considered
separate and distinct from the others. Obviously,
in the event that an appeal from an Order
allowing or disallowing a particular claim is
made, only said claim is affected, leaving the
others to proceed with their ordinary course. In
such case, the original records of the proceeding
are not elevated to the appellate court. They
remain with the liquidation court. In lieu of the
original record, a record of appeal is instead
required to be prepared and transmitted to the
appellate court.
SPECIAL PROCEEDINGS/Rule 72 15 of 42
Inevitably, multiple appeals are allowed in
liquidation proceedings. Consequently, a record
on appeal is necessary in each and every appeal
made. Hence, the period to appeal therefrom
should be thirty (30) days, a record on appeal
being required. (Record pp. 162-164).
In G.R. No. 112991 (the case of the Stockholders/Investors), the
Liquidator's notice of appeal was filed on time, having been filed on
the 23rd day of receipt of the order granting the claims of the
Stockholders/Investors. However, the Liquidator did not file a record
on appeal with the result that he failed to perfect his appeal. As
already stated a record on appeal is required under the Interim
Rules and Guidelines in special proceedings and for cases where
multiple appeals are allowed. The reason for this is that the several
claims are actually separate ones and a decision or final order with
respect to any claim can be appealed. Necessarily the original record
on appeal must remain in the trial court where other claims may still
be pending.
Because of the Liquidator's failure to perfect his appeal, the order
granting the claims of the Stockholders/Investors became final.
Consequently. the Fourteenth Division's decision dismissing the
Liquidator's Petition for Certiorari,Prohibition and Mandamus must
be affirmed albeit for a different reason.
On the other hand, in G.R. No. 109373 (case of the Labor Union), we
find that the Fifth Division correctly granted the Liquidator's Petition
for Certiorari. Prohibition and Mandamus. As already noted, the
Liquidator filed a notice of appeal and a motion for extension to file
a record on appeal on December 10, 1991, i.e., within 30 days of his
receipt of the order granting the Union's claim. Without waiting for
the resolution of his motion for extension, he filed on December 20,
1991 within the extension sought a record on appeal. Respondent
judge thus erred in disallowing the notice on appeal and denying the
Liquidator's motion for extension to file a record on appeal.
The Fifth Division of the Court of Appeals correctly granted the
Liquidator's Petition for Certiorari, Prohibition and Mandamus and
its decision should, therefore, be affirmed.
Second. In G.R. No. 109373, The Union claims that under §29 of Rep.
Act No. 265, the court merely assists in adjudicating the claims of
creditors, preserves the assets of the institution, and implements the
liquidation plan approved by the Monetary Board and that,
therefore, as representative of the Monetary Board, the Liquidator
cannot question the order of the court or appeal from it. It contends
that since the Monetary Board had previously admitted PaBC's
liability to the laborers by in fact setting aside the amount of
P112,234,292.44 for the payment of their claims, there was nothing
else for the Liquidator to do except to comply with the order of the
court.
The Union's contention is untenable. In liquidation proceedings, the
function of the trial court is not limited to assisting in the
implementation of the orders of the Monetary Board. Under the
same section (§29) of the law invoked by the Union, the court has
authority to set aside the decision of the Monetary Board "if there is
a convincing proof that the action is plainly arbitrary and made in
bad faith." 14 As this Court held in Rural Bank of Buhi, Inc. v. Court of
Appeals: 15

There is no question, that the action of the
monetary Board in this regard may be subject to
judicial review. Thus, it has been held that the
Court's may interfere with the Central Bank's
exercise of discretion in determining whether or
not a distressed bank shall be supported or
liquidated. Discretion has its limits and has never
been held to include arbitrariness, discrimination
or bad faith (Ramos v. Central Bank of the
Philippines, 41 SCRA 567 [1971]).
In truth, the Liquidator is the representative not only of the Central
Bank but also of the insolvent bank. Under §§28A-29 of Rep. Act No.
265 he acts in behalf of the bank "personally or through counsel as
he may retain, in all actions or proceedings or against the
corporation" and he has authority "to do whatever may be
necessary for these purposes." This authority includes the power to
appeal from the decisions or final orders of the court which he
believes to be contrary to the interest of the bank.
Finally the Union contends that the notice of appeal and motion for
extension of time to file the record on appeal filed in behalf of the
Central Bank was not filed by the office of the Solicitor General as
counsel for the Central Bank. This contention has no merit. On
October 22, 1992, as Assistant Solicitor General Cecilio O. Estoesta
informed the trial court in March 27, 1992, the OSG had previously
authorized lawyers of the PDIC to prepare and sign pleadings in the
case. 16 Conformably thereto the Notice of Appeal and the Motion
for Additional Time to submit Record on Appeal filed were jointly
signed by Solicitor Reynaldo I. Saludares in behalf of the OSG and by
lawyers of the PDIC. 17
WHEREFORE, in G.R. No. 109373 and G.R. No 112991, the decisions
appealed from are AFFIRMED.
SO ORDERED.
6. THIRD DIVISION
G.R. No. 163604 May 6, 2005
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HON. COURT OF APPEALS (Twentieth Division), HON.
PRESIDING JUDGE FORTUNITO L. MADRONA, RTC-BR. 35 and
APOLINARIA MALINAO JOMOC, respondents.
DECISION
CARPIO-MORALES, J.:
In "In the Matter of Declaration of Presumptive Death of Absentee
Spouse Clemente P. Jomoc, Apolinaria Malinao Jomoc, petitioner,"
the Ormoc City, Regional Trial Court, Branch 35, by Order of
September 29, 1999,1 granted the petition on the basis of the
Commissioner’s Report2 and accordingly declared the absentee
spouse, who had left his petitioner-wife nine years earlier,
presumptively dead.
In granting the petition, the trial judge, Judge Fortunito L. Madrona,
cited Article 41, par. 2 of the Family Code. Said article provides
that for the purpose of contracting a valid subsequent
SPECIAL PROCEEDINGS/Rule 72 16 of 42
marriage during the subsistence of a previous marriage where the
prior spouse had been absent for four consecutive years, the spouse
present must institute summary proceedings for the declaration of
presumptive death of the absentee spouse, without prejudice to the
effect of the reappearance of the absent spouse.
The Republic, through the Office of the Solicitor General, sought to
appeal the trial court’s order by filing a Notice of Appeal.3
By Order of November 22, 1999s,4 the trial court, noting that no
record of appeal was filed and served "as required by and pursuant
to Sec. 2(a), Rule 41 of the 1997 Rules of Civil Procedure, the present
case being a special proceeding," disapproved the Notice of Appeal.
The Republic’s Motion for Reconsideration of the trial court’s order
of disapproval having been denied by Order of January 13, 2000,5 it
filed a Petition for Certiorari6 before the Court of Appeals, it
contending that the declaration of presumptive death of a person
under Article 41 of the Family Code is not a special proceeding or a
case of multiple or separate appeals requiring a record on appeal.
By Decision of May 5, 2004,7 the Court of Appeals denied the
Republic’s petition on procedural and substantive grounds in this
wise:
At the outset, it must be stressed that the petition is not
sufficient in form. It failed to attach to its petition a
certified true copy of the assailed Order dated January 13,
2000 [denying its Motion for Reconsideration of the
November 22, 1999 Order disapproving its Notice of
Appeal]. Moreover, the petition questioned the [trial
court’s] Order dated August 15, 1999, which declared
Clemente Jomoc presumptively dead, likewise for having
been issued with grave abuse of discretion amounting to
lack of jurisdiction, yet, not even a copy could be found in
the records. On this score alone, the petition should have
been dismissed outright in accordance with Sec. 3, Rule 46
of the Rules of Court.
However, despite the procedural lapses, the Court
resolves to delve deeper into the substantive issue of the
validity/nullity of the assailed order.
The principal issue in this case is whether a petition for
declaration of the presumptive death of a person is in the
nature of a special proceeding. If it is, the period to appeal
is 30 days and the party appealing must, in addition to a
notice of appeal, file with the trial court a record on appeal
to perfect its appeal. Otherwise, if the petition is an
ordinary action, the period to appeal is 15 days from
notice or decision or final order appealed from and the
appeal is perfected by filing a notice of appeal (Section 3,
Rule 41, Rules of Court).
As defined in Section 3(a), Rule 1 of the Rules of Court, "a
civil action is one by which a party sues another for the
enforcement or protection of a right, or the prevention of
redress of a wrong" while a special proceeding under
Section 3(c) of the same rule is defined as "a remedy by
which a party seeks to establish a status, a right or a
particular fact (Heirs of Yaptinchay, et al. v. Del Rosario, et
al., G.R. No. 124320, March 2, 1999).

Considering the aforementioned distinction, this Court
finds that the instant petition is in the nature of a special
proceeding and not an ordinary action. The petition
merely seeks for a declaration by the trial court of the
presumptive death of absentee spouse Clemente Jomoc. It
does not seek the enforcement or protection of a right or
the prevention or redress of a wrong. Neither does it
involve a demand of right or a cause of action that can be
enforced against any person.
On the basis of the foregoing discussion, the subject Order
dated January 13, 2000 denying OSG’s Motion for
Reconsideration of the Order dated November 22, 1999
disapproving its Notice of Appeal was correctly issued. The
instant petition, being in the nature of a special
proceeding, OSG should have filed, in addition to its
Notice of Appeal, a record on appeal in accordance with
Section 19 of the Interim Rules and Guidelines to
Implement BP Blg. 129 and Section 2(a), Rule 41 of the
Rules of Court . . . (Emphasis and underscoring supplied)
The Republic (petitioner) insists that the declaration of presumptive
death under Article 41 of the Family Code is not a special proceeding
involving multiple or separate appeals where a record on appeal
shall be filed and served in like manner.
Petitioner cites Rule 109 of the Revised Rules of Court which
enumerates the cases wherein multiple appeals are allowed and a
record on appeal is required for an appeal to be perfected. The
petition for the declaration of presumptive death of an absent
spouse not being included in the enumeration, petitioner contends
that a mere notice of appeal suffices.
By Resolution of December 15, 2004,8 this Court, noting that copy of
the September 27, 2004 Resolution9 requiring respondent to file her
comment on the petition was returned unserved with postmaster’s
notation "Party refused," Resolved to consider that copy deemed
served upon her.
The pertinent provisions on the General Provisions on Special
Proceedings, Part II of the Revised Rules of Court entitled SPECIAL
PROCEEDINGS, read:
RULE 72
SUBJECT MATTER AND APPLICABILITY
OF GENERAL RULES
Section 1. Subject matter of special proceedings. – Rules of
special proceedings are provided for in the following:
(a) Settlement of estate of deceased persons;
(b) Escheat;
(c) Guardianship and custody of children;
(d) Trustees;
(e) Adoption;
(f) Rescission and revocation of adoption;
SPECIAL PROCEEDINGS/Rule 72 17 of 42
(g) Hospitalization of insane persons;
(h) Habeas corpus;
(i) Change of name;
(j) Voluntary dissolution of corporations;
(k) Judicial approval of voluntary recognition of
minor natural children;
(l) Constitution of family home;
(m) Declaration of absence and death;
(n) Cancellation or correction of entries in the
civil registry.
Sec. 2. Applicability of rules of civil actions. – In the
absence of special provisions, the rules provided for in
ordinary actions shall be, as far as practicable, applicable
in special proceedings. (Underscoring supplied)
The pertinent provision of the Civil Code on presumption of death
provides:
Art. 390. After an absence of seven years, it being
unknown whether or not the absentee still lives, he shall
be presumed dead for all purposes, except for those of
succession.
x x x (Emphasis and underscoring supplied)
Upon the other hand, Article 41 of the Family Code, upon which the
trial court anchored its grant of the petition for the declaration of
presumptive death of the absent spouse, provides:
Art. 41. A marriage contracted by any person during the
subsistence of a previous marriage shall be null and void,
unless before the celebration of the subsequent marriage,
the prior spouses had been absent for four consecutive
years and the spouse present had a well-founded belief
that the absent spouses was already dead. In case of
disappearance where there is danger of death under the
circumstances set forth in the provisions of Article 391 of
the Civil Code, an absence of only two years shall be
sufficient.
For the purpose pf contracting the subsequent marriage
under the preceding paragraph, the spouses present must
institute a summary proceeding as provided in this
Code for the declaration of presumptive death of the
absentee, without prejudice to the effect of a
reappearance of the absent spouse. (Emphasis and
underscoring supplied)
Rule 41, Section 2 of the Revised Rules of Court, on Modes of
Appeal, invoked by the trial court in disapproving petitioner’s Notice
of Appeal, provides:
Sec. 2. Modes of appeal. -

(a) Ordinary appeal. - The appeal to the Court of Appeals
in cases decided by the Regional Trial Court in the exercise
of its original jurisdiction shall be taken by filing a notice of
appeal with the court which rendered the judgment or
final order appealed from and serving a copy thereof upon
the adverse party. No record on appeal shall be required
except in special proceedings and other cases of multiple
or separate appeals where the law or these Rules so
require. In such cases, the record on appeal shall be filed
and served in like manner. (Emphasis and underscoring
supplied)
xxx
By the trial court’s citation of Article 41 of the Family Code, it is
gathered that the petition of Apolinaria Jomoc to have her absent
spouse declared presumptively dead had for its purpose her desire
to contract a valid subsequent marriage. Ergo, the petition for that
purpose is a "summary proceeding," following above-quoted Art.
41, paragraph 2 of the Family Code.
Since Title XI of the Family Code, entitled SUMMARY JUDICIAL
PROCEEDING IN THE FAMILY LAW, contains the following
provision, inter alia:
xxx
Art. 238. Unless modified by the Supreme Court, the
procedural rules in this Title shall apply in all
casesprovided for in this Codes requiring summary court
proceedings. Such cases shall be decided in an
expeditious manner without regard to technical
rules. (Emphasis and underscoring supplied)
x x x,
there is no doubt that the petition of Apolinaria Jomoc required, and
is, therefore, a summary proceeding under the Family Code, not a
special proceeding under the Revised Rules of Court appeal for
which calls for the filing of a Record on Appeal. It being a summary
ordinary proceeding, the filing of a Notice of Appeal from the trial
court’s order sufficed.
That the Family Code provision on repeal, Art. 254, provides as
follows:
Art. 254. Titles III, IV, V, VI, VII, VIII, IX, XI and XV of Book I
of Republic Act No. 386, otherwise known as the Civil Code
of the Philippines, as amended, and Articles 17, 18, 19, 27,
28, 29, 30, 31, 39, 40, 41 and 42 of Presidential Decree No.
603, otherwise known as the Child and Youth Welfare
Code, as amended, and all laws, decrees, executive orders,
proclamations rules and regulations, or parts
thereof, inconsistent therewith are
hereby repealed, (Emphasis and underscoring supplied),
seals the case in petitioner’s favor.
Finally, on the alleged procedural flaw in petitioner’s petition before
the appellate court. Petitioner’s failure to attach to his petition
before the appellate court a copy of the trial court’s order denying
its motion for reconsideration of the disapproval of its Notice of
SPECIAL PROCEEDINGS/Rule 72 18 of 42
Appeal is not necessarily fatal, for the rules of procedure are not to
be applied in a technical sense. Given the issue raised before it by
petitioner, what the appellate court should have done was to direct
petitioner to comply with the rule.
As for petitioner’s failure to submit copy of the trial court’s order
granting the petition for declaration of presumptive death, contrary
to the appellate court’s observation that petitioner was also
assailing it, petitioner’s 8-page petition10filed in said court does not
so reflect, it merely having assailed the order disapproving the
Notice of Appeal.
WHEREFORE, the assailed May 5, 2004 Decision of the Court of
Appeals is hereby REVERSED and SET ASIDE. Let the case be
REMANDED to it for appropriate action in light of the foregoing
discussion.
SO ORDERED.
7. FIRST DIVISION
G.R. No. 141396 April 9, 2002
DEOGRACIAS MUSA, ROMEO and ANDRO MUSA, as represented by
their Attorney-in-fact, MARILYN MUSA,petitioners,
vs.
SYLVIA AMOR, respondent.
KAPUNAN, J.:
Assailed in this petition for review on certiorari is the Decision of the
Court of Appeals dated September 27, 1999 in C.A. G.R. S.P. No.
49263 which modified in part the decision of the Department of
Agrarian Reform Adjudication Board (DARAB) and ruled that herein
petitioners Deogracias, Romeo and Andro Musa are not tenants of
the subject landholding; as well as the Resolution dated December
29, 1999 denying petitioners’ motion for reconsideration.
This case involves an agricultural landholding with a total area of
9.9611 hectares located at Dancalan, Donsol, Sorsogon formerly
owned by one Antonio Dasig, two hectares of which are ricelands
and the rest are devoted to coconuts. When Antonio Dasig migrated
to the United States, his mother, Rosario Dasig, acted as
administratrix of the said property.
On March 5, 1993, Rosario, representing her son, sold the subject
property to herein respondent Sylvia Amor for the total amount of
P300,000.00. This prompted petitioners, claiming to be tenants of
the landholding, to file a case for redemption against respondent
and Rosario Dasig with the Department of Agrarian Reform Regional
Adjudicator. Later on, respondent tried to eject petitioners from the
property so the latter withdrew the case for redemption and filed
against respondent a complaint for annulment of sale,
reinstatement and damages with a prayer for preliminary injunction,
docketed as DARAB Case No. 05-154-S.
In their complaint, petitioners averred that in 1979, Deogracias
Musa entered into a verbal tenurial arrangement with Antonio
Dasig, through Rosario Dasig. Deogracias’ tenancy continued
uninterrupted under a 2/3-1/3 sharing arrangement per harvest on
the riceland portion and a 60-40 sharing in the produce of the
coconut plantation. Deogracias was helped by his two sons, Andro

and Romeo Musa. When Deogracias fell ill due to a stroke in 1990,
his sons took over the cultivation and continued the previous
arrangement with Rosario Dasig who duly acknowledged the same
and received the share pertaining to her as landowner. Petitioners
were thus surprised when the landholding was later on sold by
Rosario Dasig to respondent without their knowledge and consent.
They tried to redeem the property as tenants but during the
pendency of the case, a notice dated September 8, 1993 was issued
by the Department of Agrarian Reform placing the entire property
under the Comprehensive Agrarian Reform Program (CARP). This
prompted petitioners to file a complaint for annulment of the sale.
Finally, petitioners asseverated that the sale of the land to private
respondent was illegal and void since the land was subject to the
Voluntary Offer To Sell scheme of the DAR as evidenced by the CARP
VOS Form No. 1 signed by Antonio Dasig.
Rosario Dasig, though impleaded as a party, did not participate in
the proceedings before the Regional Adjudicator. Only respondent
Amor filed an answer. Respondent maintained that the sale of the
subject landholding was valid because petitioners were
not bonafide tenants of the same but merely worked thereon as
hired workers on a "pakyaw" basis; that Deogracias Musa admitted
in an affidavit executed on July 4, 1982 that he was a hired worker;
that the CARP Voluntary Offer To Sell allegedly executed by Antonio
Dasig was forged as attested to by the latter in his affidavit dated
November 23, 1993; and that petitioners are not qualified
beneficiaries under P.D. 27 and R.A. 6637 because they are
landowners themselves.
On June 30, 1994, the Regional Adjudicator of DAR ruled in favor of
petitioners declaring them as tenants of the subject landholding and
nullifying the deed of absolute sale between Rosario Dasig and
respondent. The dispositive portion of the said decision reads:
WHEREFORE, judgment is hereby rendered:
1) Declaring complainant as tenants in the subject
landholding;
2) Declaring the Deed of Absolute Sale Null and Void
without prejudice to the filing with another forum of
appropriate jurisdiction for the parties thereto to recover
whatever rights that may pertain to them;
3) Ordering respondent and all persons acting in their
behalf to reinstate complainants in the subject landholding
and to maintain the latter in peaceful possession therein;
4) Directing the PARO of Sorsogon, the Regional Director
DAR Region V to generate transfer action on the portion of
land in question covered by Operation Land Transfer
subject to matter of this case.
5) No pronouncement as to Costs and Damages.
SO ORDERED.1
On appeal, the Department of Agrarian Reform Adjudication Board
(DARAB) modified the ruling of the Regional Adjudicator by declaring
that petitioners are bonafide tenants of the land in question and are
thus entitled to security of tenure.2 Not satisfied with the ruling of
the DARAB, respondent brought the case on appeal to the Court of
SPECIAL PROCEEDINGS/Rule 72 19 of 42
Appeals alleging that DARAB erred in declaring that petitioners
are bonafide tenants of the subject landholding and in holding that
the Secretary of Agrarian Reform has authority to determine
whether the said land is covered by P.D. No. 27 and RA
6657.1âwphi1.nêt
In their Comment on the petition, petitioners pointed out that the
petition should not be given due course since (1) it was not
accompanied by a written explanation why the petition was not
served personally to them and (2) the certification on non-forum
shopping was inadequate for failure to conform with the prescribed
contents set forth under Section 2, Rule 42 of the Revised Rules of
Court.
On September 27, 1999, the Court of Appeals rendered a decision
modifying the DARAB’s ruling only insofar as petitioners’ status is
concerned and holding that they "should not be considered tenants
of the subject landholding."3The decision of the DARAB was affirmed
in all other respects.4 As to whether or not the subject landholding is
covered by P.D. 27 and R.A. 6657, the Court of Appeals sustained the
DARAB’s ruling that the matter involves an administrative
determination within the exclusive jurisdiction of the Secretary of
the Department of Agrarian Reform. With regard to the procedural
error raised by petitioners, the Court of Appeals held that the Rules
of Court, particularly on modes of service and filing of pleadings,
does not apply to agrarian cases.
Petitioners sought a reconsideration of the above ruling but the
Court of Appeals denied the motion and affirmed its decision. In
rejecting petitioners’ contention that the case has been rendered
moot and academic by the declaration of the Department of
Agrarian Reform that the subject landholding is covered by CARP,
the Court of Appeals reasoned that such development has no
significance because petitioners "have already been declared not to
be tenants of the landowner and therefore not qualified beneficiaries
of the provisions of CARP."5
Petitioners thus found their way to this Court through the present
petition praying for the reversal of the Court of Appeals’ decision
and resolution. They assigned the following errors:
THE HONORABLE COURT OF APPEALS ERRED IN
DECLARING THAT SINCE PETITIONERS HAVE ALREADY
BEEN DECLARED NOT TO BE TENANTS OF THE
LANDOWNER, THEY ARE NOT QUALIFIED BENEFICIARIES
OF THE PROVISIONS OF THE CARP.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
DISMISSING RESPONDENTS PETITION FILED BEFORE SAID
FORUM FOR FAILURE TO CITE AN EXPLANATION AS TO THE
MODES OF SERVICE.6
First, as to the issue of tenancy, we find no reason to depart from
the findings of the Court of Appeals that herein petitioners were not
bonafide tenants of the landholding. Petitioners gave conflicting
statements as to their alleged tenancy over the landholding. At first,
they maintained that they had been tilling the land since 1979.
However, Deogracias Musa executed an affidavit on July 4, 1982
attesting the contrary- that he was not a tenant of Rosario
Dasig.7 Later on, petitioners admitted the execution of such affidavit
and claimed that there was no inconsistency because their
cultivation of the subject property was commenced after the
execution of affidavit.8 In another instance, petitioners alleged that

they took over the cultivation of the land from Juan Manlangit in
1984.9 These conflicting assertions detract from the veracity of
petitioners’ claim of tenancy.
The Court of Appeals also noted that the testimony of Juan
Manlangit, presented by petitioners, cannot be given credence
because he varied his statements three times. On June 21, 1994, he
executed an affidavit attesting to the tenancy of Deogracias Musa
over the landholding. He retracted his statement on July 29, 1994
claiming that he was misled into signing his June 24, 1994 affidavit.
On August 24, 1994, Manlangit executed another affidavit re-
affirming his first statement. The vacillating attitude of the witness
does not help petitioners any. As correctly ruled by the Court of
Appeals, petitioners’ evidence failed to substantially prove their
claim of tenancy over the subject landholding.
Petitioners dispute the Court of Appeals’ statement in its resolution
denying petitioners’ motion for reconsideration that since they are
not tenants of the subject landholding, they are not qualified
beneficiaries under CARP.10 They argue that such a conclusion is
contrary to the Court of Appeals’ pronouncement that the issue of
whether the subject landholding is covered by P.D. 27 or R.A. 6657 is
within the exclusive jurisdiction of the Secretary of the Department
of Agrarian Reform. Moreover, assuming arguendo that petitioners
are not tenants of the landholding, they are still qualified
beneficiaries as farmworkers because R.A. 6657 does not limit the
scope of qualified beneficiaries to tenants alone.11 On this score, the
Court of Appeals itself stated in its decision that it is "in full accord
with [the DARAB] ruling that the DAR Secretary has authority to
determine whether the subject landholding is subject to the
provisions of P.D. No. 27 or R.A. 6657."12
It should be pointed out that identification of actual and potential
beneficiaries under CARP is vested in the DAR Secretary.
Administrative Order No. 10, Series of 1989 provides:
ADMINISTRATIVE ORDER NO. 10
Series of 1989
SUBJECT: RULES AND PROCEDURES GOVERNING THE
REGISTRATION OF BENEFICIARIES
I. PREFATORY STATEMENT
Pursuant to Section 15, Chapter IV, of the Comprehensive
Agrarian Reform Law of 1988, the DAR, in coordination
with the Barangay Agrarian Reform Committee (BARC), as
organized pursuant to RA 6657, shall register all
agricultural lessees, tenants and farmworkers who are
qualified beneficiaries of the CARP. This Administrative
Order provides the Implementing Rules and Procedures
for the said registration.
II. OBJECTIVES.
A. General
1. Develop a data bank of potential and qualified
beneficiaries of the CARP for the effective implementation
of the program.
SPECIAL PROCEEDINGS/Rule 72 20 of 42
B. Specific
1. Identify the actual and potential farmer-beneficiaries of
the CARP. (Underscoring ours.)
xxx
It is significant to note that on September 3, 1993, the DAR Secretary
through the Municipal Agrarian Reform Office (MARO) issued a
Notice of Coverage placing the entire agricultural landholding,
including the subject property, under CARP. Such being the case, the
appellate court’s pronouncement that petitioners are not qualified
beneficiaries under CARP is just an obiter dictum and not necessary
in the resolution of the issues.
Petitioners also allege that the Court of Appeals should not have
given due course to the petition because the respondent failed to
attach thereto a written explanation why personal service was not
done, thereby violating Section 11, Rule 13, of the Rules of Court.
The Court of Appeals found the service of petition by registered mail
sufficient notwithstanding the absence of an explanation why
service by mail was resorted to. Citing the case of Reyes vs. Court of
Appeals,13 it declared that "the Rules of Court shall not be applicable
in agrarian cases even in suppletory character."
The issue of sufficiency of service of pleadings pertains to the
proceedings of the Court of Appeals which are governed by the
Rules of Court. Section 11, Rule 13 of said Rules provides:
SEC. 11. Priorities in modes of service and filing. -
Whenever practicable, the service and filing of pleadings
and other papers shall be done personally. Except with
respect to papers emanating from the court, a resort to
other modes must be accompanied by a written
explanation why the service or filing was not done
personally. A violation of this Rule may be cause to
consider the paper as not filed.
As the above-quoted provision requires, service and filing of
pleadings must be done personally whenever practicable. The Court
notes that in the present case, personal service would not be
practicable. Considering the distance between the Court of Appeals
and Donsol, Sorsogon where the petition was posted, clearly, service
by registered mail would have entailed considerable time, effort and
expense. A written explanation why service was not done personally
might have been superfluous. In any case, as the rule is so worded
with the use of "may," signifying permissiveness, a violation thereof
gives the court discretion whether or not to consider the paper as
not filed. While it is true that procedural rules are necessary to
secure an orderly and speedy administration of justice,14rigid
application of Section 11, Rule 13 may be relaxed in this case in the
interest of substantial justice.1âwphi1.nêt
WHEREFORE, the petition is hereby DENIED and the decision of the
Court of Appeals in C.A. G.R. S.P. No. 49263 dated September 27,
1999 is AFFIRMED.
SO ORDERED.
8. VENTURA VS. VENTURA SEPTEMBER 24, 1969
9. EN BANC

G.R. No. 26751 January 31, 1969
JOSE S. MATUTE, petitioner,
vs.
THE COURT OF APPEALS (Third Division) and MATIAS S.
MATUTE, respondents.
---------------------------
G.R. No. L-26085 January 31, 1969
JOSE S. MATUTE, in his personal capacity and as Judicial Co-
Administrator of the Estate of AMADEO MATUTE
OLAVE, petitioner,
vs.
HON. JUDGE VICENTE P. BULLECER, Judge of the Court of First
Instance of Davao, Branch IV, and MARIANO NASSER, respondents.
---------------------------
G.R. No. L-26106 January 31, 1969
JOSE S. MATUTE AND LUIS S. MATUTE, as Intervenors in their
personal capacities in Civil Case No. 4252 of the Court of First
Instance of Davao, petitioners,
vs.
HON. VICENTE P. BULLECER, Judge of the Court of First Instance of
Davao, Branch IV; ATTY. PATERNO R. CANLAS, DANIEL RIVERA, SR.,
PABLO V. DEL ROSARIO and NICANOR D. VERGARA, as Defendants
in Civil Case No. 4252, of the Court of First Instance of
Davao, respondents.
Antonio Enrile Inton for petitioners.
Paterno R. Canlas for and in his own behalf as respondent.
CASTRO, J.:
The present three petitions for certiorari with preliminary
injunction (L-26571, L-26085 and L-26106) were separately
interposed within the short span of five months by Jose S. Matute,
one of the fifteen heirs to the Amadeo Matute Olave estate.
Because these petitions are intertwined in several material aspects
and arose from a common environmental setting — the intra-
fraternal strife among the Matute heirs which has unduly delayed
for more than a decade the settlement of the Matute estate — this
Court has decided to embody in a single decision the independently
discussed resolutions of the issues raised in the said petitions.
L-26751
Although the petition in L-26751 was filed the latest (October 27,
1966), we shall dispose of it first because our pronouncements and
observations in this case have direct and concrete relevance to the
other two.
The antecedent events trace their origin to August 20, 1965 when
Carlos S. Matute, one of the Matute heirs and a full-blood brother of
both the petitioner and the herein respondent Matias S. Matute,
filed in special proceeding 25876 (settlement of the Matute estate) a
petition praying for the removal of Matias as co-administrator and
his (Carlos') appointment in such capacity. Carlos alleged that "for a
SPECIAL PROCEEDINGS/Rule 72 21 of 42
period of more than two years from the date of his appointment (on
May 29, 1963), said Matias S. Matute has neglected to render a true,
just and complete account of his administration," and that he "is not
only incompetent but also negligent in his management of the
estate under his charge consisting of five haciendas on account of a
criminal charge for murder filed against him which is occupying most
of his time."1awphil.ñêt
The respondent Matias claims that he forthwith interposed an
opposition to the aforesaid petition, and the record discloses that he
later filed an amended opposition dated August 25, 1965 wherein he
contended.
1. That the allegation ... that the herein co-administrator
for the two years of his administration, 1963 and 1964, did
not render any accounting is completely without basis and
false, because the records show that under date of May
20,1964, he submitted to this Honorable Court with copies
furnished to all the parties concerned, including Carlos S.
Matute, his accounting for 1963, that on Feb. 8, 1965, he
filed his accounting for 1964, which accounts for 1963 and
1964 have been approved by majority of the heirs
composing of 63% interests in the estate as shown by the
attached manifestation....
2. That his competence to act as administrator has been
established to the satisfaction of this Honorable Court as
evidenced by his appointment by a fixed,
final and executory order dated May 29, 1963; and Carlos
S. Matute is now estopped from denying his [Matias S.
Matute's] competence and qualification by reason of his
failure to object to the appointment of herein Judicial
Administrator at the time the application was made
therefor;
3. .... The records of the pertinent case in the Court of First
Instance ofDavao will easily discover that the "criminal
charge" supported by perjuredtestimony is nothing but a
trumped-up affair initiated by persons intent
onintimidating the herein Judicial Administrator into
betraying his sworn dutyto protect and safeguard the
interest of the Estate. The records of the saidcase will also
reveal that it has not occupied any time at all of the herein
Judicial Administrator, for aside from a single hearing last
December 1964 onhis application for bail ... no hearing has
been held on the said case up tothe present.
Subsequently, Matias filed a memorandum dated September 12,
1965 in support of his foregoing opposition.
On September 21, 1965 the heirs of Agustina Matute Candelario,
Elena MatuteCandelario and Amadeo Matute Candelario and their
mother and legatee AnunciacionCandelario, moved for the
immediate appointment of Agustina Matute Candelario,Carlos S.
Matute and Jose S. Matute, herein petitioner, as joint co-
administratorsor anyone of them in place of Matias S. Matute,
whose removal they also soughttogether with the ouster of the
general administrator Carlos V. Matute, on thefollowing additional
grounds:
1. Despite the vast resources and income of the estate, the
present administrators have failed to pay even the annual
real property tax for the years 1964 and 1965;

2. The financial statements of both administrators were
not properly signed andauthenticated by a certified public
accountant, and do not contain the exactentries as filed by
former administrators containing the daily and monthly
entriesof receipts and disbursements;
3. Both administrators have deliberately failed to file their
inventories andstatements of accounts of time, and did so
only when ordered by the probatecourt;
4. Both administrators have made unauthorized
disbursements as shown by theirfinancial statements; and
5. The probate court has discretion to remove the
administrator.
It appears that during the reception of evidence conducted on
December 29, 1965by the probate court (Branch IV of the Court of
First Instance of Manila withHonorable Emigdio Nietes as the then
presiding judge), Carlos S. Matute and theCandelario-Matute heirs
submitted respective lists of exhibits in support oftheir motion to
oust Matias. On January 8, 1966 Matias filed a written objectionto
the admission of the movants' exhibits on the ground that the same
were hearsay,self-serving, irrelevant and/or mere photostatic copies
of supposed originalswhich were never properly identified nor
shown in court. Four days later, or onJanuary 12, 1966, the counsel
for Matias filed with leave of court a "Motion toDismiss and/or
Demurrer to Evidence" which avers that "there is no
sufficientevidence on record to justify and support the motions for
the removal of theherein co-administrator Matias S. Matute." In the
same motion, said counselreserved the right to introduce evidence
in behalf of his client should theforegoing motion be denied.
On January 31, 1966 the probate court issued an order, the
dispositive portionof which reads:
FOR ALL THE FOREGOING, the Court hereby removes co-
administrator, Matias S.Matute, as such co-administrator
of the estate and orders him to submit a finalaccounting of
his administration together with his past administration
accountswhich have not been approved, and, in his stead
appoints Jose S. Matute, a brother by the same mother of
Matias S. Matute, as co-administrator, who ishereby
required to put up a bond of P15,000.00, and thereafter
immediatelyqualify in his commission and assume the
responsibility of co-administrator....
Forthwith, Matias interposed with the Court of Appeals a petition
for certiorari with preliminary mandatory injunction (CA-G.R. 37039-
R) dated February 1, 1966, praying that the aforesaid order of
January 31, 1966 be set aside as a nullityfor having decreed his
removal without due process and the appointment of JoseS. Matute
without the requisite hearing.
On March 4, 1966 the Court of Appeals gave due course to the
aforesaid petitionand resolved to grant a writ of preliminary
injunction against Jose S. Matuteand the Honorable Judge Emigdio
Nietes, respondents in CA-G.R. 37039-R, conditioned on the filing of
a P1,000 bond by the therein petitioner Matias, the
respondentherein. On March 22, 1966 Jose S. Matute moved for the
dismissal of the abovementionedpetition on the ground that the
Court of Appeals does not have jurisdiction totake cognizance of the
same since the value of the estate involved is more thanP200,000.
SPECIAL PROCEEDINGS/Rule 72 22 of 42
He further contended that the value of the Amadeo Matute Olave
estatefor purposes of jurisdiction had already been resolved in CA-
G.R. 35124-R wherethe Court of Appeals refused to take jurisdiction
over a petition for certiorari contesting the appointment of Matias
Matute as co-administrator, on the groundthat the value of the
Matute estate was placed at P2,132,282.72 as evidenced by a
"Compromise Agreement" dated April 12, 1956 which was duly
signed by all of the heirs.
Despite repeated urgent motions filed by Jose S. Matute praying
that the Courtof Appeals resolve with dispatch the issue of
jurisdiction, the said appelatetribunal instead required then
respondent Jose S. Matute to answer, which he did.However, on
October 27, 1966 herein petitioner Jose S. Matute interposed
theinstant petition for certiorari with preliminary injunction against
the Court of Appeals and Matias Matute, challenging the jurisdiction
of the respondentCourt of Appeals upon two basic contentions:
The Court of Appeals has no jurisdiction to entertain, give
due course, andmuch more to issue a writ of preliminary
injunction, against the petitioner, Jose S. Matute, and
respondent Judge Emigdio Nietes in CA-G.R. No. 37039-R
... because the estate of Amadeo Matute Olave is worth
more than P200,000.00; and
The same Court of Appeals in CA-G.R. No. 35124-R, on
January 27, 1965, specialfourth division, has ruled that the
Court of Appeals has no jurisdiction on theestate of
Amadeo Matute Olave in the matter of the appointment
and removal ofits administrators.
The respondent Matias Matute does not controvert the petitioner's
claim that thevalue of the estate of their deceased father exceeds
P200,000. He maintains,however, that the respondent Court of
Appeals has jurisdiction over CA-G.R.37039-R "because the subject
matter involved is merely ... the right to collectthe (monthly) rentals
due the Estate in the sum of P5,000.00" pursuant to acontract of
lease which he executed in favor of one Mariano Nasser
coveringfive haciendas of the estate under his separate
administration.
The foregoing assertion does not merit credence. A searching
review of the record — from the initial petition filed by Carlos
Matute to oust the respondentas co-administrator up to the latter's
petition for certiorari filed with theCourt of Appeals impugning the
validity of the abovementioned order of January31, 1966 which
removed him as co-administrator and appointed the petitioner inhis
place — reveals no single pleading, statement, contention, reference
or eveninference which would justify the respondent's pretension
that the instantcontroversy is a mere contest over the right to
collect a P5,000 rental. In bold contrast, the record vividly chronicles
the controversy as a bitter fight for co-administration: the removal
of the respondent as co-administrator and the appointment of
anyone of the movants and the herein petitioner as new co-
administrator. Indeed, the principal conflict gravitates over the right
to co-administer the vast Amadeo Matute Olave estate. This is the
same issue underlying the respondent'sabovementioned petition in
CA-G.R. 37039-R. The respondent's prayer in said petition
unmistakably indicates that the dispute pertains to the right to co-
administer in general, not the mere authority to collect a P5,000
monthly rental.The said prayer reads:

1. That an ex parte writ of preliminary mandatory
injunction be issued enjoiningand/or prohibiting the
respondent Judge from approving the administrator's
bondthat will be filed by respondent Jose S. Matute and in
issuing the letters ofadministration of the latter, and from
issuing Orders incidental and/or connectedwith the
exercise and performance of acts of administration of said
respondent Jose S. Matute; likewise enjoining and
prohibiting respondent Jose S. Matutehimself, and/or
through his counsels, agents and representatives from
takingphysical possession of the different haciendas under
the exclusive administrationand management of herein
petitioner and from performing and exercising acts ofa
duly and legally appointed administrator, upon filing a
bond in such amountthat this Honorable Tribunal may fix;
2. That the Order of the respondent Judge dated January
31, 1966, removing herein petitioner as co-administrator
of the Estate of Amadeo Matute Olave andappointing
respondent Jose S. Matute as co-administrator without
presentationof evidence, be declared null and void and of
no force and effect....
In fine, the pith of the controversy is the right to co-administer the
entire estate. In this regard, the ruling in Fernandez, et al. vs.
Maravilla 1 is determinative of the jurisdictional issue posed here. In
said case, this Courtruled that in a contest for the administration of
an estate, the amount incontroversy is deemed to be the value of
the whole estate, which total valueshould be the proper basis of the
jurisdictional amount. Consequently the Courtproceeded to
conclude that the Court of Appeals does not have jurisdiction
toissue writs of certiorari and preliminary injunction prayed for in a
petition concerning a conflict over administration arising as an
incident in the mainprobate or settlement proceeding if in the first
place the principal case or proceeding falls outside its appelate
jurisdiction considering the total value of the subject estate. This
Court in the aforesaid Maravilla case elaborated thus:
The Court of Appeals, in the decision appealed from,
assumed jurisdiction overthe present case on the theory
that "the amount in controversy relative to
theappointment of Eliezar Lopez as special co-
administrator to protect the interestsof the respondents
(herein petitioners) is only P90,000.00 more or less,
i.e.,one fourth of the conjugal property" (of respondent
and the deceased DignaMaravilla) which, as per inventory
submitted by the respondent as special administrator, is
valued at P362,424.90. This theory is untenable. Note that
theproceedings had on the appointment of Eliezar Lopez as
special co-administrator are merely incidental to the
probate or testate proceedings of the deceased Digna
Maravilla.
That the Court of Appeals have no appelate jurisdiction
over the said testateproceedings cannot be doubted,
considering the properties therein involved arevalued at
P362,424.00, as per inventory of the special administrator.
... Not having appelate jurisdiction over the proceedings
in probate (CA-G.R.No. 27478-R), considering that the
amount involved therein is more than P200,000.00,the
SPECIAL PROCEEDINGS/Rule 72 23 of 42
Court of Appeals cannot also have original jurisdiction to
grant the writsof certiorari and prohibition prayed for by
respondent in the instant case, whichare merely incidental
thereto....
Note also that the present proceedings under review were
for the annulment ofthe appointment of Eliezar Lopez as
special co-administrator and to restrain theprobate court
from removing respondent as special administrator. It is
therefore,a contest for the administration of the estate
and, consequently, the amount orvalue of the assets of the
whole estate is the value in controversy. (4 C.J.S. 204.) It
appearing that the value of the estate in dispute is much
more than P200,000.00, the Court of Appeals clearly had
no original jurisdiction to issuethe writs in question.
(emphasis supplied)
Like in the aforecited Maravilla case, the instant intra-fraternal
controversy involves a contest over administration, an incident in
the settlement of the vast Matute estate. Considering that the value
of the said estate is more thanP200,000, and considering further
that as enunciated in the Maravilla case thetotal value of the subject
estate determines the jurisdictional amount anentdisputes over
administration arising as incidents in a probate or
settlementproceeding, like the case at bar, then it is indubitable that
the respondent Court of Appeals does not have jurisdiction over CA-
G.R. 37039-R nor the judicial authority to grant the writs
of certiorari and prohibition prayed fortherein.
Herein respondent insists, however, that even granting that the
actual controversy pertains to administration, such contested
administration does not encompassthe whole estate but is limited to
the collection of a P5,000 monthly rental,which sum should be the
basis of the jurisdictional amount, not the value ofthe whole estate.
In support of his thesis, the respondent alleges that duringhis
incumbency as co-administrator, five haciendas in Davao belonging
to theestate of his deceased father were consigned to his separate
administration; that in his capacity as co-administrator he leased on
February 10, 1965 said haciendas to one Mariano Nasser for P5,000
a month; that by virtue of said leasecontract, the possession,
management and administration of the said properties were
transferred to the lessee until the expiration of the contract; that
consequently, only the collection of the monthly rental of P5,000
remains asthe subject of the administration.
The foregoing contention of the respondent is patently untenable.
1. The averment of the respondent that the controversy
centers on the collectionof the alleged P5,000 monthly
rental and that the contest over administrationis limited
thereto, does not find any support in the record.
2. The rule remains that the jurisdictional amount is
determined by the totalvalue of the estate, not by value of
the particular property or portion of the estate subject to
administration, since the question of administration is
merely incidental to the principal proceeding for the
settlement and distribution ofthe whole estate.
3. The respondent's impression that a co-administrator's
trust and responsibilityare circumscribed and delimited by
the size and value of the particular propertyor portion of
the estate subject to his separate administration, is

erroneous. Although a co-administrator is designated to
admininister a portion of theestate, he is no less an
administrator of the whole because his
judiciousmanagement of a mere parcel enhances the value
of the entire estate, while hisinefficient or corrupt
administration thereof necessarily diminishes the valueof
the whole estate. Moreover, when two or more
administrators are appointed toadminister separate parts
of a large estate they are not to discharge theirfunctions in
distant isolation but in close cooperation so as to
safeguard andpromote the general interests of the entire
estate. The teaching in Sison vs.Teodoro 2 is of positive
relevance. In the said case, the probate court
chargedagainst the entire estate the compensation of an
administrator who was assignedas judicial administrator
representing the interests of one of the two heiresses.The
other heiress whose interest was represented by the
executor opposed theaward on the ground that the said
administrator had not rendered service to theestate but
only to his wife, the heiress whom he represented. On
appeal, this Court upheld the award and dismissed the
opposition:
This argument erroneously assumes that because Carlos
Moran Sison was "judicial administrator representing the
interests of Priscilla F. Sison" he was such administrator
"solely for the purpose of protecting Priscilla's interests,"
and not to protect those of the estate. No words are
needed to explain that in general,the interest of the heir
coincides with those of the estate — the bigger theestate
the better for the heir. Therefore to protect the interest of
heiressPriscilla usually meant to favor the interest of the
estate (sic).... Again, the argument presumes that an
administrator appointed by the Court for thepurpose of
giving representation to designated heirs, is not deemed
administratorof the estate. This assumption has no legal
foundation, because it is admitted practice, where the
estate is large, to appoint two or more administrators
ofsuch estate to have different interests represented and
satisfied, and furthermore,to have such representatives
work in harmony for the best interests of such estate. (In re
Drew's Estate, 236 N.W. 701, 2 C.J. p. 1183) (emphasis
supplied)
Verily, therefore, the scope of a co-administrator's trust
encompasses the entireestate and is co-extensive in effect with
those of the other administrators; consequently, the value of the
entire estate should be the proper basis of the jurisdictional amount
irrespective of the value of the particular property orassets of the
estate which are the objects of a separate administration pending
the settlement proceedings.
In view of all the foregoing, we are of the consensus that the
respondent Courtof Appeals has no jurisdiction to take cognizance of
CA-G.R. 37039-R, and consequently was without power to issue or
grant the writs of certiorariand prohibition prayed for in said case.
Notwithstanding that the herein petitioner delimited the issue, as
set forth inhis petition of certiorari, to one of jurisdiction of the
respondent Court of Appeals over CA-G.R. 37039-R, in subsequent
pleadings and manifestations, however, the parties therein mutually
expanded the issue to include the question of the legality of the
controverted order of January 31, 1966 in CA-G.R. 37039-R. As a
matter of fact, the respondent, in a "Petition to Resolve" dated July
SPECIAL PROCEEDINGS/Rule 72 24 of 42
18,1967, prayed "that a decision on the merits in this case be now
rendered." To this manifestation, the petitioner replied "that he
has no objection, as in fact, he also prays that this case be decided at
the earliest by the Highest Tribunal."
Since the respondent Court of Appeals does not have jurisdiction
over CA-G.R. 37039-R, we are of the considered opinion that this
Court can forestall further delay in the already protracted
proceedings regarding the settlement of the Matute estate if it now
proceeds to resolve the issue of legality of the abovementioned
disputed order, rather than wait for the parties to come anew on a
separate petition in quest for a verdict on the said issue. Moreover,
both the petitioner and the respondent private party have
manifested and elaborated their respective views on this issue and
prayed and pressed for a decision thereon.
We shall now discuss separately the twin aspects of the foregoing
controverted order, namely, (1) the removal of the respondent as
co-administrator of the Matute estate, and (2) the appointment of
the petitioner as the new co-administrator.
The respondent contends that the disputed order removing him as
co-administrator is a patent nullity for the following reasons:
(1) He was removed in wanton disregard of due process of
law because the probatejudge arbitrarily deprived him of
his day in court;
(2) The evidence adduced by the movants is manifestly
insufficient, if not devoid of probative value, to warrant his
removal; and
(3) He was removed not on the grounds specifically
invoked by the movants but for causes discovered motu
propio by the probate judge in the records of
specialproceeding 25876 and without affording him the
opportunity to rebut the findingsof the said judge.
Upon the other hand, the petitioner advances the following
reasons in support of the order of removal:
(1) The probate judge accorded the respondent all the
opportunity to adduce hisevidence but the latter resorted
to dilatory tactics such as filing a "motion to dismiss or
demurrer to evidence";
(2) The evidences presented to sustain the removal of the
respondent are incontrovertible since aside from being
documentary, they are parts of the record of special
proceeding 25876; and
(3) The evidence on record conclusively supports the
findings of the probate judge.
The settled rule is that the removal of an administrator under
section 2 of Rule 82 lies within the discretion of the court appointing
him. As aptly expressed in one case, 3 "The sufficiency of any ground
for removal should thus be determined by the said court, whose
sensibilities are, in the first place, affected by any act or omission on
the part of the administrator not conformable to or in disregard of
the rules or the orders of the court." Consequently, appellate
tribunals are disinclined to interfere with the action taken by a

probate court in the matter of the removal of an executor or
administrator unless positive error or gross abuse of discretion is
shown. 4
In the case at bar, we are constrained, however to nullify the
disputed order of removal because it is indubitable that the probate
judge ousted the respondent from his trust without affording him
the full benefit of a day in court, thus denying him his cardinal right
to due process.
It appears that shortly after the reception of evidence for the
movants Carlos Matute and the Candelario-Matute heirs, the
respondent filed on January 8, 1966a verified objection to the
admission in evidence of the movants' exhibits on the ground that
the same were hearsay, self-serving, irrelevant and/or mere
photostatic copies of supposed originals which were never properly
identified nor produced in court. Four days later, or on January 12,
1966, the respondent filed with leave of court a "Motion to Dismiss
and/or Demurrer to Evidence", the pertinent and material portion of
which reads:
... considering the specific objection to each exhibit
contained in said Objections to Admission of Movants'
Exhibits and considering further the ruling of this
Honorable Court in open court that pleadings filed in this
case are evidence only of the fact of their filing and not of
the truth of the statements contained therein and
considering still further the fact that no competent single
witness was presented by movants in support of their
respective contentions, we submit that there is no
sufficient evidence on record to justify and support the
motions for removal of the herein co-administrator Matias
S. Matute and in the light of the authorities hereinbelow
cited, the motions to remove Matias S. Matute must be
dismissed for insufficiency of evidence.
... However, in the remote possibility that this instant
motion be denied by this Honorable Court, the herein co-
administrator expressly reserves his right to present his
own evidence ... at least five (5) days from the receipt of
said denial.... (emphasis supplied)
Instead of resolving the foregoing motion, the probate judge issued
the controverted order removing the respondent as co-
administrator without giving him the opportunity to adduce his own
evidence despite his explicit reservation that he be afforded the
chance to introduce evidence in his behalf in the event of denial of
his motion to dismiss and/or demurrer to evidence. We are of the
view that the above actuation of the probate judge constituted
grave abuse of discretion which dooms his improvident order as a
nullity. In fact, even without the respondent's reservation, it was the
bounden duty of the probate judge to schedule the presentation
and reception of the respondent's evidence before disposing of the
case on the merits because only the movants at that time had
presented their evidence. This duty is projected into bolder relief if
we consider, which we must, that the aforesaid motion is in form as
well as in substance a demurrer to evidence allowed by Rule 35, by
virtue of which the defendant does not lose his right to offer
evidence in the event that his motion is denied. Said Rule states:
SPECIAL PROCEEDINGS/Rule 72 25 of 42
After the plaintiff has completed the presentation of his
evidence, the defendant without waiving his right to offer
evidence in the event the motion is not granted, may move
for a dismissal on the ground that upon the facts and law
the plaintiff has shown no right to relief. (emphasis
supplied)
The application of the abovecited Rule in special proceedings, like
the case at bar, is authorized by section 2 of Rule 72 which direct
that in the "absence of special provisions, the rules provided for in
ordinary civil actions shall be, as far as practicable, applicable in
special proceedings."
But what is patently censurable is the actuation of the probate
judge in removing the respondent, not on the strength of the
evidence adduced by the movants (not a single exhibit or document
introduced by the movants was specifically cited in the disputed
order as a justification of the respondent's ouster), but on the basis
of his (judge's) findings, which he motu propio gleaned from the
records of special proceeding 25876, without affording the
respondent an opportunity to controvert said findings or in the very
least to explain why he should not be removed on the basis thereof.
The probate judge did find, as essayed in his disputed order, that
the respondent "has shown indifference to his duties as such co-
administrator of the estate" as evidenced by:
(1) the disapproval of his 1964 account by the probate
court in an order dated January 5, 1966 due to his "non-
appearance and non-submission of evidence to sustain his
account on the date set for the presentation of the same;"
(2) the considerable decrease in the income of the
properties under his charge, as reflected in said 1964
account, which circumstance "does not speak well of his
diligence and attention to the administration of said
properties;" and
(3) the failure of said 1964 account to disclose the number
of calves born during the accounting period, "thereby
indicating a palpable omission of fact which directly
reduced the value of the income or the increase of the
assets of the estate."
But, significantly, the movants did not specifically invoke the
aforesaid grounds in support of their petition to oust the
respondent. All of the said grounds, which in the mind of the
probate judge exposed the supposed indifference and incompetence
of the respondent in the discharge of his trust, are based on alleged
defects of the respondent's 1964 account. Under these
circumstances, it behooved the probate judge to inform the
respondent of his findings before ordering the latter's removal. We
concede that the probate judge enjoys a wide latitude of discretion
in the matter of the removal of executors and administrators and he
can cause their ouster at his own instance. However, before they are
deprived of their office they must be given the full benefit of a day in
court, an opportunity not accorded to the respondent herein.
Without forgetting such patent denial of due process, which
rendered the order of removal a nullity, let us examine the merits of
the probate judge's motu propio findings to determine whether they
warrant the ouster of the respondent.

As proof of the respondent's "indifference" in the discharge of his
duties, the probate judge cited the court's order of January 5, 1966
disapproving the respondent's 1964 account for his failure to
personally appear on the date set for the submission of evidence in
support of the said account. It must be emphasized, however, that
the respondent, two days before the issuance of the aforesaid order
removing him as co-administrator, seasonably moved for the
reconsideration of the aforecited order of January 5, 1966 on the
ground that his failure to personally attend the scheduled hearing
was due to illness on his part. Evidently, when the probate court
decreed the removal of the respondent, the order disapproving his
1964 account, which was used as one of the principal justifications
for his removal as co-admininistrator, was not yet final as it was still
subject to possible reconsideration. As a matter of fact, on February
19, 1966 the same probate judge set aside the aforesaid order of
January 5, 1966, thus:
Considering that it will be the benefit of all the parties
concerned if former co-administrator Matias S. Matute will
be allowed to substantiate the accounting which he
submitted to this Court but which was disapproved on
January 5, 1966 for his failure to personally appear at the
hearing held for the purpose of substantiating said
accounting, his motion for reconsideration filed on January
28, 1966 is hereby granted and the order dated January 5,
1966 disapproving the accounting submitted by Matias S.
Matute is set aside. (emphasis supplied)
With the order of January 5, 1966 thus revoked, the probate
judge's conclusion that the respondent was "indifferent" to his
duties as co-administrator as evidenced by the disapproval of his
1964 account loses its principal basis.
Again using the 1964 account of the respondent as basis of his
finding that the respondent was guilty of disinterest in the discharge
of his trust, the probate judge stressed that "a verification of said
accounting shows the income of the properties under his
(respondent's) charge were very much reduced which does not
speak well of his diligence and attention to the administration of the
said properties," and that said account failed to report the number
of "offspring of the cattle during the period of accounting belonging
to the estate, thereby indicating a palpable omission of fact which
directly reduced the value of the income or increase of the assets of
the estate." It is pertinent to emphasize here that the said 1964
account is still pending approval, hence it was premature to use
alleged defects in said account as grounds for the removal of the
respondent. If it is now ruled that the respondent is unfit to
continue as co-administrator because of the alleged infirmities in his
account for 1964, the respondent will be greatly prejudiced in the
event that said account is finally approved and the said defects are
found to be nonexistent or so trivial as not to affect the general
validity and veracity of the account. Assuming, however, that the
probate judge correctly observed that the said account reflects a big
reduction in the income of the haciendas under the separate
administration of the respondent, this fact alone does not justify the
conclusion that the latter did not exercise due care and zeal. There is
no proof that the decrease in income had been caused by the
respondent's willful negligence or dishonesty. Needless to stress,
varied factors, some beyond the control of an administrator, may
cause the diminution of an estate's income.
Anent the failure to report the number of calves born during the
accounting period, granting that the same is true, there is however
no evidence on record to prove that the said omission was
SPECIAL PROCEEDINGS/Rule 72 26 of 42
deliberate or designed to prejudice the estate. It could have been
either an honest mistake or mere inadvertence. In the absence of
competent proof to the contrary, good faith must be presumed. The
probate judge should have required the respondent to explain the
said omission instead of branding outright said omission as
"palpable."
In his excursion into the records of special proceeding 25876, the
probate judge also found a copy of a so-called "Compliance"
submitted by the respondent which reported "a very staggering
amount of over One Million Pesos supposedly given to the heirs" as
advances. The probate judge proceeded to observe that the "record
does not show that the said advances to the heirs were authorized
by the Court in the amounts made to appear in the 'Compliance.'"
He added that a "verification of the record will show that may be
part of this amount supposedly paid by the co-administrator to the
heirs were authorized by the Court but a greater volume of the same
was obviously not authorized." On account of this particular finding,
the probate court concluded, without equivocation, that the
respondent had been acting without previous authority from the
probate court. Unfortunately again, the respondent was not
afforded the opportunity to present his side and if possible to
controvert the said finding or correct the impressions of the judge.
Hearing the respondent on this point is imperative because, like the
other grounds upon which the probate judge anchored the order of
removal, it was not put in issue by the movants, neither was a copy
of said "Compliance" submitted in evidence. It bears emphasis that
it there were unauthorized payments of advances to some heirs or
simulated grants as the probate judge appears to theorize, then it is
most surprising why the prejudiced Matute heirs, litigation-proned
as they are, did not impugn the so-called "Compliance."
Furthermore, not one of the movants interested in the removal of
the respondent specifically charged the latter with unauthorized or
fictitious payments of advances. It should also be noted that the said
"Compliance" was submitted by the respondent in response to the
probate court's order for the submission of "a list of the heirs who
have personally received the advances from the administration," not
from the respondent alone. It stands to reason, therefore, that the
said "Compliance" could very well be a cumulative list of all the
advances given and received by the Matute heirs from the several
administrators of the Matute estate since 1955. In the absence of
concrete evidence that the said "staggering amount" of over a
million pesos advances was disbursed by the respondent alone
during his beleaguered term which commenced only in 1963, we
have no recourse but to jettison the adverse conclusion of the
probate judge. What the probate judge should have done was to
afford Matias the chance to explain and substantiate the facts and
the figures appearing in the aforesaid "Compliance," which
unfortunately does not form part of the record before us. The
respondent asserts that if only the probate judge "took pains to
examine fully the voluminous records of the Matute estate, and as
reflected in the very 'Compliance' submitted to the Court ... any
disbursement given to the heirs by all the administrators of the
Estate were by virtue of the several Orders of the Probate Court
issued upon joint motion of all the heirs for their monthly
maintenance and support."
It likewise appears that the respondent was removed partly due to
his failure to pay the inheritance and estate taxes. In this regard, it
bears emphasis that the failure to pay the taxes due from the estate
is per se not a compelling reason for the removal of an
administrator, for "it may be true that the respondent administrator
failed to pay all the taxes due from the estate, but said failure may
be due to lack of funds, and not to a willful omission." 5 In the case at

bar there is no evidence that the non-payment of taxes was willful.
On the contrary, the respondent alleged, and this was unchallenged
by the movants, that while the previous administrators left the taxes
unpaid, he had paid the real property taxes in Davao covering the
years 1954 to 1966.
We now come to the second part of the controverted order — the
appointment of the petitioner as co-administrator vice the
respondent. Since the removal of Matias was done with inordinate
haste and without due process, aside from the fact that the grounds
upon which he was removed have no evidentiary justification, the
same is void, and, consequently, there is no vacancy to which the
petitioner could be appointed.
Even granting arguendo that the removal of Matias is free from
infirmity, this Court is not prepared to sustain the validity of the
appointment of the petitioner in place of the former. To start with,
the record does not disclose that any hearing was conducted, much
less that notices were sent to the other heirs and interested parties,
anent the petition for the appointment of Jose S. Matute, among
others, as co-administrator vice Matias S. Matute. In this regard, it is
pertinent to observe that any hearing conducted by the probate
court was confined solely to the primary prayers of the separate
petitions of Carlos S. Matute, and the Candelario-Matute heirs
seeking the ouster of Matias S. Matute. The corollary prayers
contained in the same petitions for the appointment of Carlos S.
Matute, Jose S. Matute and Agustina Matute Candelario or anyone
of them as co-administrator were never even considered at any of
the hearings. The requirement of a hearing and the notification to all
known heirs and other interested parties as to the date thereof is
essential to the validity of the proceeding for the appointment of
and administrator "in order that no person may be deprived of his
right or property without due process of law." (Eusebio vs.
Valmores, 97 Phil. 163) Moreover, a hearing is necessary in order to
fully determine the suitability of the applicant to the trust, by giving
him the opportunity to prove his qualifications and affording
oppositors, if any, to contest the said application.
The provision of Rule 83 that if "there is no remaining executor or
administrator, administration may be granted to any suitable
person," cannot be used to justify the institution of Jose S. Matute
even without a hearing, because such institution has no factual basis
considering that there was a general administrator (Carlos V.
Matute) who remained in charge of the affairs of the Matute estate
after the removal of Matias S. Matute. The abovecited provision
evidently envisions a situation when after the removal of the
incumbent administrator no one is left to administer the estate, thus
empowering the probate court, as a matter of necessity, to name a
temporary administrator (or caretaker), pending the appointment of
a new administrator after due hearing. Such circumstance does not
obtain in the case at bar.
Upon the foregoing disquisition, we hold that the respondent Court
of Appeals was without jurisdiction over CA-G.R. 37039-R, and that
the controverted order of January 31, 1966 is a nullity and must
therefore be set aside in its entirety.
L-26085
L-26085 is a petition for certiorari with preliminary injunction
interposed on May 19, 1966 by the same petitioner Jose S. Matute,
praying that the controverted order of default dated April 16, 1966,
judgment by default dated April 23, 1966 and order of execution
SPECIAL PROCEEDINGS/Rule 72 27 of 42
dated May 3, 1966, all issued by the Court of First Instance of Davao,
be set aside.
The sequence of events, like in L-26751, commenced with the
issuance by the probate court (Court of First Instance of Manila) of
the order of January 31, 1966 removing Matias S. Matute as co-
administrator and replacing him with Jose S. Matute. Armed with
the letters of co-administration awarded to him on February 3,
1966, Jose attempted to take possession of and exercise
administration over the five haciendas La Union, Sigaboy,
Monserrat, Colatinan and Pundaguitan, all belonging to the Matute
estate and situated in Governor Generoso, Davao. Said five
haciendas were previously assigned to the separate administration
of the deposed co-administrator, Matias S. Matute.
Mariano Nasser, herein plaintiff-respondent, who was in actual
possession of the said haciendas, opposed the projected takeover by
the defendant-petitioner Jose S. Matute in the latter's capacity as
co-administrator. Subsequently, on February 15, 1966, Nasser
instituted civil case 4968 in the Court of First Instance of Davao, a
complain for injunction, alleging that the defendant-petitioner was
forcibly wresting possession of the said haciendaswith the aid of
hired goons, and praying that the said defendant-petitioner be
enjoined from taking physical possession, management and
administration of the aforesaid five haciendas. On February 16, 1966
the court a quoissued a writ of preliminary injunction ex parte,
prohibiting "Jose S. Matute and/or his counsels, agents,
representatives or employees from taking physical possession,
management and administration" of the abovementioned
properties.
On February 23, 1966, seven days after he received on February 16,
1966, the summons in civil case 4968, the defendant-petitioner
moved to dismiss the aforesaid complaint for injunction and to
dissolve the ex parte writ of injunction. Said motion to dismiss was
predicated mainly on the contention that the court a quo did not
have jurisdiction over the subject haciendas considering that the
same "are properties in custodia legis under the jurisdiction of the
Probate Court of Manila, in Sp. Proc. No. 25876 since 1955 up to the
present time," and consequently the probate court has exclusive
jurisdiction over all cases, like the one at bar, involving possession
and administration of the aforesaid haciendas. In the same motion
to dismiss, the defendant-petitioner averred that the alleged
contract of lease is simulated and fictitious for which reason not
even a copy of the said contract was attached to the complaint, and
that granting that such a contract was actually executed, the same is
invalid as it was never approved by the probate court. On February
28, 1966 the defendant-petitioner was furnished a copy of the
plaintiff-respondent's opposition to the abovementioned motion to
dismiss and to lift the ex parte writ of injunction.
Failing to receive any notice of a court resolution on his client's
motion to dismiss during the period of about 1-½ months after the
filing of the said motion, the defendant-petitioner's counsel on April
11, 1966 wrote the clerk of court of the court a quo, requesting that
any resolution or order of the trial court be mailed to him by airmail
at his expense, instead of by surface mail, in order to minimize
postal delay. Sometime between April 11 and 19, 1966, the said
counsel also dispatched an emissary to Davao to inquire about the
status of civil case 4968. After personal verification of the record,
the said emissary reported to the defendant-petitioner's counsel
that the abovementioned motion to dismiss had been denied by the
court a quo in an order dated March 31, 1966. It was also discovered
from the record that the plaintiff-respondent's counsel had been
 SPECIAL PROCEEDINGS/Rule 72 28 of 42
sent a copy of the order of denial on the very day it was rendered salaries of security guards employed by the plaintiff in the
(March 31, 1966) but the record was silent as to the mailing of the haciendas leased plus P7,000.00 representing
corresponding copy for the defendant-petitioner's counsel, which transportation hotel and representation expenses incurred
copy until then had not been received by the latter. Forthwith, on by the plaintiff for plaintiff's counsel and another P700.00
April 19, 1966, although he had not yet been furnished his copy of representing the yearly premiums on the injunction bond
the said order of denial, defendant-petitioner's counsel interposed filed by plaintiff.
the requisite answer with counterclaim. Then on April 23, 1966 he
filed a manifestation calling the attention of the court a quo that as the defendant-petitioner interposed the instant petition
of the said date he had not received a copy of the order denying his for certiorari with preliminary injunction to annul the order of
client's motion to dismiss. It was only two days later, or on April 25, default, the judgment by default, and the order of execution, and to
1966, that the said counsel claims, uncontroverted by the restrain the execution of the aforesaid judgment pending the
respondent Judge and the plaintiff-respondent, that he received his resolution of the instant petition.
copy of the aforesaid order.
On May 23, 1966 this Court granted the writ of preliminary
In a "Motion to Strike" dated April 26, 1966, the plaintiff- injunction prayed for, conditioned on the petitioner's posting a bond
respondent urged that the aforementioned answer with of P5,000, which he did on June 4, 1966.
counterclaim be stricken from the record on the grounds that
on April 16, 1966 the court a quo had declared defendant-
We are of the consensus that the herein petition should be
petitioner in default for failure to answer the complaint in civil case
granted.
4928 and that subsequently, on April 23, 1966, a judgment by
default had been entered against the latter.
Rule 11, section 1 of the Revised Rules of Court gives the defendant
a period of fifteen (15) days after service of summons within which
Immediately after receipt on May 5, 1966 of a copy of the said
to file his answer and serve a copy thereof upon the plaintiff, unless
"Motion to Strike," the defendant-petitioner filed his opposition,
a different period is fixed by the court. However, within the period
asserting that it was legally impossible to declare him in default as of
of time for pleading, the defendant is entitled to move for dismissal
April 16, 1966 for failure to file his responsive pleading, considering
of the action on any of the ground enumerated in Rule 16. If the
that it was only after the said date, that is, on April 25, 1966, that he
motion to dismiss is denied or if determination thereof is deferred,
received, through his counsel, a copy of the order denying his
the movant shall file his answer within the period prescribed by Rule
motion to dismiss. On the same day, May 5, 1966, the defendant-
11, computed from the time he received notice of the denial or
petitioner's counsel dispatched a rush telegram to the clerk of court
deferment, unless the court provides a different period (Rule 16,
of the Court of First Instance of Davao inquiring whether the trial
section 4). In other words, the period for filing a responsive pleading
court had really rendered the order of default dated April 16, 1966
commence to run all over again from the time the defendant
and the subsequent judgment by default dated April 23, 1966,
received notice of the denial of his motion to dismiss. 6
copies of which had not been received by him. On the following day,
May 6, 1966, the defendant-petitioner filed an "Urgent Motion to
Investigate the Office of the Clerk of Court for Mailing Discrepancy." Reverting to the case at bar, the defendant-petitioner was served
with summons in connection with civil case 4968 on February 16,
1966, hence he had until March 3, 1966 to file his responsive
The defendant-petitioner's counsel claims — and this is not
pleading. Instead of filing an answer, he seasonably interposed a
controverted by the respondent Judge and the plaintiff-respondent
motion to dismiss on February 23, 1966. Although the aforesaid
— that it was only May 17, 1966 that he received a copy of the
motion to dismiss was denied as early as March 31, 1966, he
judgment by default and at the same time a copy of the order of
received notice of the denial, through his counsel of record, only on
execution dated May 3, 1966, and that a copy of the order of default
April 25, 1966, a fact not traversed by either the respondent Judge
had never been furnished him.
or the plaintiff-respondent. Consequently, the defendant-petitioner
had fifteen (15) days from April 25, 1966, or up to May 10, 1966, to
Because of the impending execution of the judgment by default file his answer.
with the following dispositive portion —
The delay in the mailing of a copy of the order of denial to the
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, defendant-petitioner's counsel was confirmed by the court a quo in
judgment is hereby rendered in favor of the plaintiff and a report rendered after an investigation of the office of the clerk of
against the defendant confirming the right of the plaintiff court upon urgent motion of the defendant-petitioner. The report
to the possession of the premises leased in his favor by the reads in part:
judicial administrator, Matias S. Matute and the injunction
against the defendant issued in this case is hereby
From its investigation of the employee in charge of Civil
declared permanent and defendant is hereby permanently
Cases, the Court found out that, indeed, there was a delay
enjoined from interfering in the peaceful possession of the
in the mailing of the Order of this Court dated March 31,
plaintiff over the haciendas La Union, Sigaboy, Monserrrat,
1966 to counsel for the defendant, Atty. Antonio Enril
Golatinan and Pundaguitan of the estate of Amadeo
Inton. This Court, however, is convinced of the sincerity of
Matute Olave, all situated in Governor Generoso, Davao
the reasons given by the employee concerned, and that is:
and from doing any act of taking any step against the
that her failure to cause to be mailed the copy intended
peaceful possession of said properties by the plaintiff. The
for Atty. Antonio Enrile Inton on the same date that she
defendant is likewise ordered to pay the plaintiff the
caused to be mailed the copy for Atty. Paterno Canlas
amount of P50,000.00 as attorney's fees due and payable
(plaintiff-respondent's counsel) was purely a case of an
to plaintiff's counsel for filing this action: P2,400.00 a
honest mistake and inadvertene on her part owing to the
month beginning February, 1966, representing monthly

volume of her work; the affidavit of the employee in
charge of Civil Cases being hereto attached.
The affidavit of the employee concerned mentioned in the above-
quoted portion of the report clearly admits the delay, thus:
That due to the fact that I am the only one handling
matters relative to Civil Cases and, because of the volume
of my work in the office, I must have inadvertently
misplaced the envelop containing a copy of the Order
intended for Atty. Antonio Enrile Inton, and only
discovered by (my) mistake on April 14, 1966, when I went
over some papers contained in the drawer of my table;
That upon discovery of the said envelope containing the
copy of the order dated March 31, 1966, among the
papers in my table drawer, I forthwith sent the same to
the one in charge of mailing and who mailed the same
on April 16, 1966, by registered air mail special delivery, as
evidenced by Registry Receipt No. 26897 now attached to
the records of this case. (emphasis supplied)
It is unmistakable from the foregoing exposition that when the
defendant-petitioner was declared in default on April 16, 1966 the
time for filing his answer had not yet even commenced to run anew
because on the said date his counsel had not yet received notice of
the denial of the motion to dismiss. The order of denial was received
only on April 25, 1966, or definitely after April 16, 1966, the day
when a copy of the said order was mailed to the defendant-
petitioner's counsel and when the defendant-petitioner was
declared in default.
No further elaboration is needed to show that the trial judge acted
in excess of jurisdiction when he declared the defendant-petitioner
in default. Consequently, the herein controverted order of default is
a patent nullity, an infirmity which likewise afflicts, necessarily, the
subsequent judgment by default and the order of execution.
It is not amiss to say that, at the very least, the defendant-
petitioner's motion to dismiss should have been considered as an
answer, since it raised issues on the merits of the case, such as the
invalidity of the alleged contract of lease. Consequently, the
defendant petitioner should have been notified of the hearing, and
failure to give him an opportunity to appear in the court below
tainted the subsequent proceedings not only with irregularity but
also with illegality. It follows, therefore, that the petitioner was
incorrectly declared in default, and the holding of the trial of the
case on the merits in his absences, without due notice to him, was a
denial of due process. 7
In opposing the instant petition, the plaintiff-respondent contends
that the remedy of the defendant-petitioner is not a petition
for certiorari but an ordinary appeal pursuant to Rule 41, section 2,
paragraph 3 which reads:
A party who has been declared in default may likewise
appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no petition
for relief to set aside the order of default has been
presented by him in accordance with Rule 38.
We do not agree. The remedy provided for in the abovequoted rule
is properly, though not exclusively, available to a defendant who has
SPECIAL PROCEEDINGS/Rule 72 29 of 42
been validly declared in default. It does not preclude a defendant
who has been illegallydeclared in default from pursuing a more
speedy and efficacious remedy, like a petition for certiorari to have
the judgment by default set aside as a nullity.
It should be emphasized that a defendant who is properly declared
in default is differently situated from one who is improvidently
declared in default. The former irreparably loses his right to
participate in the trial, while the latter rentals such right and may
exercise the same after having the order of default and the
subsequent judgment be default annulled and the case remanded to
the court of origin. Moreover the former is limited to the remedy set
forth in section 2, paragraph 3 of Rule 41 by virtue of which he can
contest only the judgment by default on the designated ground that
it is contrary to the evidence or the law; the latter, however, has the
option to avail of the same remedy or to forthwith interpose a
petition for certiorari seeking the nullification of the order of default
even before the promulgation of a judgment by default, or in the
event that the latter has been rendered, to have both court decrees
— the other of default and the judgment by default — declared
void. The defendant-petitioner's choice of the latter course of action
is correct for he controverts the judgment by default not on the
ground that it is not supported by evidence or it is contrary to law,
but on the ground that it is intrinsically void for having been
rendered pursuant to a patently invalid order of default.
Granting, however, that an appeal is open to the defendant-
petitioner, the same is no longer an adequate and speedy remedy
considering that the court a quo had already ordered the issuance of
a writ of execution and the carrying out of such writ loomed as a
great probability. This is in consonance with the doctrine enunciated
in Vda. de Saludes vs Pajarillo and Bautista 8 wherein this Court held
that an "appeal under the circumstances was not adequate remedy
there being an order of execution issued by the municipal court."
Hence, the rule that certioraridoes not lie when there is an appeal is
relaxed where, as in the instant case, the trial court had already
ordered the issuance of a writ of execution. 9
The plaintiff-respondent also argues that the instant petition
should be denied for failure of the defendant-petitioner to move for
a reconsideration of the challenged decrees so as to afford the
court a quo the chance to amend its errors. While as a matter of
policy a motion for reconsideration in the lower court has often
been considered a condition sine qua non for the granting of a writ
of certiorari, this rule does not apply "where the proceeding in
which the error occurred is a patent nullity," 10 or where "the
deprivation of petitioner's fundamental right to due process ... taints
the proceedings against him in the court below not only with
irregularly but with nullity," 11 or when special circumstances
warrant immediate and more direct action. 12 The fact that the
defendant-petitioner had been deprived of due process, taken
together with the circumstance that a writ of execution had already
been issued, perforce takes this case outside of the purview of the
rule requiring a previous motion for reconsideration.
The nullity of the challenged orders relieves the defendant-
petitioner from paying the damages assessed against him by the
court a quo; however, it does not entitle him to pursue further his
claim of possession and administration over the abovementioned
five haciendas, considering that we have declared in L-26751 that his
appointment as co-administrator is void.

In view of the foregoing disquisition, the controverted order of
default, judgment by default and order of execution should be
annulled and set aside.
L-26106
L-26106 is another petition for certiorari with preliminary
injunction instituted on May 25, 1966 by Jose S. Matute (the same
petitioner in L-26751 and L-26085) and his brother Luis S.
Matute, 13 praying for the nullification of the following orders of the
Court of First Instance of Davao:
1. The order of February 15, 1966 dismissing with
prejudice civil case 4252, a complaint filed by Matias S.
Matute in behalf of the Matute estate for the annulment
of a compromise agreement and for the reconveyance of
certain properties, in which case Jose and Luis Matute
appeared as intervenors in alliance with the plaintiff
estate;
2. The order of March 29, 1966 declaring in default the
intervenors in civil case 4252 for failure to answer the
defendant Paterno Canlas' counterclaim, and adjudging
them to jointly and severally pay the sum of P100,000 in
damages to the said Canlas; and
3. The order of April 12, 1966 directing the issuance of a
writ of execution against the intervenors to enforce the
abovementioned judgment by default.
The factual milieu follows:
On February 5, 1966 Matias S. Matute, in his capacity as co-
administrator, instituted in the name of the Matute estate civil case
4252 praying for, among others, (1) the annulment of the
compromise agreement dated November 26, 1962 entered into
between the co-administrator Julian V. Matute and Atty. Paterno R.
Canlas, one of the defendants-respondents herein, in full settlement
of the latter's claim for attorney's fees against the decedent Amadeo
Matute Olave; (2) the nullification of the compromise judgment of
December 5, 1962 approving the aforesaid compromise agreement;
(3) the voiding of the deed of conveyance and assignment of rights
dated December 20, 1962 by virtue of which the said Julian Matute
transferred to Canlas several parcels of land belonging to the Matute
estate pursuant to the compromise judgment; (4) the annulment of
the deed of conveyance covering the said parcels of land executed
on February 20, 1963 by Canlas in favor of Daniel Rivera, Sr., also
one of the defendants-respondents; (5) the nullification of the
unregistered deeds of mortgages, both date July 19, 1963, over said
properties executed by Rivera in favor of Pablo del Rosario and
Nicanor Vergara, also defendants-respondents herein; and (6) the
reconveyance of the said properties.
The aforesaid complaint was anchored on the grounds that (1) the
compromise agreement was entered into in fraud of the Matute
estate; (2) Julian Matute, as a mere co-administrator, had no
authority to enter into the said compromise agreement without the
consent of the then general administrator, Don Celestino Alonzo; (3)
the compromise agreement was approved by the Court of First
Instance of Manila (Branch X) without notice to the heirs and the
general administrator; and (4) the said agreement had neither prior
nor subsequent approval of the probate court which has custody of
the parcels of land involved in the said agreement.
SPECIAL PROCEEDINGS/Rule 72 30 of 42
The defendant-respondent Canlas subsequently interposed a
motion to dismiss dated February 24, 1964 predicated on the
ground of res judicata, among others. Anent the issue of res
judicata, said motion to dismiss averred:
The records of Civil Case No. 14208, entitled "Rosario
Matute, et al. v. Amadeo Matute Olave", Court of First
Instance of Manila, Branch X, will show that on December
5, 1962, the Honorable Judge Jose L. Moya, Presiding
Judge of Branch X, of the Court of First Instance of Manila,
rendered a Compromise Judgment ... pursuant to a
Compromise Agreement ... entered into between
defendant Paterno R. Canlas and the Estate of Amadeo
Matute Olave, duly represented by the General
Administrator of the Estate, the late Julian V. Matute and
his counsel of record in said Civil Case No. 14208, Atty.
Marcelo Rafols Javier involving the attorney's fees of
defendant Paterno R. Canlas in said Civil Case No. 14208,
secured with a charging lien on the properties involves
herein. Pursuant to said Compromise Judgment, the said
Julian V. Matute, as General Administrator of the Estate of
his deceased father, Amadeo Matute Olave, transferred
and conveyed the properties involved herein which were
ordered to be sold by the Probate Court of Manila for only
P144,000.00, in favor of defendant Paterno R. Canlas as
full payment of his attorney's fees in Civil Case No. 14208
in the amount of P200,000.00 agreed upon in the
Compromise Agreement. The said Compromise Judgment
of December 5, 1962 is immediately final and not
appeallable and has the effect and authority of Res
Judicata in this case filed by co-administrator, Matias S.
Matute, on behalf of the Estate, without authority of his
general administrator, Carlos V. Matute, who filed a
Motion to Dismiss the complaint in this case
That the records of Civil Case No. 14208 will show that
after the Compromise Judgment was rendered on
December 5, 1962, a Petition for relief to set aside the said
Compromise Judgment was filed by two (2) of the heirs
and full-blooded sisters of plaintiff co-administrator,
Matias S. Matute, namely, Rosario and Trinidad Suazo
Matute on June 6, 1963, on grounds of (a) fraud and (b)
lack of the probate court's approval to the Compromise
Agreement, the very same grounds alleged in the present
Complaint of plaintiff Estate, a copy of the Petition for
Relief is hereto attached as Annex "C" of this Motion to
Dismiss. That on June 13, 1963, herein defendant Paterno
R. Canlas filed his Opposition to petition for Relief, and, on
June 26, 1963, a Supplementary Opposition to Petition for
Relief and refuting all the above issues raised in the
Petition for Relief, copies of which are hereto attached as
Annexes "D" and "E". Rosario and Trinidad Suazo Matute
filed Reply and defendant Paterno R. Canlas filed his
Rejoinder on July 8, 1963 attaching therewith the letter-
conformity to the Compromise Judgment of co-
administrator, Matias S. Matute, copies of which are
hereto attached as Annexes "F" and "F-1" of this Motion to
Dismiss. That on July 13, 1963, Branch X of the Court of
First Instance of Manila, taking cognizance of Civil Case No.
14208, rightfully denied the Petition for Relief on all the
grounds stated in our Opposition to the Petition for Relief,
Supplementary Opposition, etc., and Rejoinder, a copy of

which order is hereto attached as Annex "G" of this
Motion to Dismiss.
In other words, it is the basic contention of Canlas that both
the compromise judgment of December 5, 1962rendered by the
Court of First Instance of Manila (Branch X) 14 and the order of the
same court dated July 13, 1963denying the aforecited petition for
relief from judgment which sought the setting aside of the said
compromise judgment, bar by virtue of res judicata the prosecution
of the abovementioned civil case 4252 which seeks anew the
annulment of the said compromise judgment on practically the
same grounds invoked in the aforesaid petition for relief, which
grounds were justifiably denied by the competent court.
It appears that on the same day Canlas filed his motion to dismiss,
the general administrator and heir, Carlos V. Matute, filed his own
motion to dismiss dated February 15, 1964, stating among other
things, that he had never authorized his co-administrator, Matias
Matute, to file civil case 4252 in the name of the estate and that said
complaint was filed without legal authority and is prejudicial to the
interests of the estate as it would only entail unnecessary litigation
expenses. He presented his written conformity to the compromise
judgment in his capacity as the succeeding general administrator.
On February 27, 1964 the defendants-respondents Daniel Rivera,
Sr., Pablo del Rosario and Nicanor Vergara filed their own joint
motion to dismiss, alleging among other things that they were
innocent transferees and mortgages for value of the properties
subject matter of the complaint and adopted as their own the
motions to dismiss filed by Canlas and Carlos V. Matute.
On April 11, 1964 the Honorable Judge Vicente N. Cusi, Jr.,
executive judge of the Court of First Instance of Davao, issued an
order deferring to after the trial the final hearing and determination
of the motions to dismiss since the grounds alleged therein "do not
appear to be indubitable." From this order, the defendants moved
for a reconsideration which was denied on January 16, 1965.
Meanwhile, on August 17, 1964 Jose and Luis Matute filed a motion
to intervene, asking that they be allowed to adopt the complaint of
the plaintiff-estate. Said motion was granted on September 5, 1964.
After the aforesaid rejection of the defendants' motion for
reconsideration of the order denying their separate motions to
dismiss, Canlas filed on February 15, 1965 his answer ad cautelam,
traversing the material allegations of the complaint in civil case 4252
and interposing the grounds stated in his motion to dismiss as
affirmative defenses. He also filed a counterclaim for damages in the
amount of P100,000 jointly against Matias Matute, for filing the
"frivolous and unfounded" action in the name of the estate, and
Jose an Luis Matute, for intervening in the case. All there were
charged in their personal capacities. On the same date, the other
defendants, Rivera, del Rosario and Vergara, filed their own
answer ad cautelam, denying the essential averments of the
complaint having relevance to them and adopting the affirmative
defenses interposed by Canlas. Said defendants similarly interposed
a counterclaim of P50,000 for damages, directed against the
plaintiff-estate.
On March 1, 1965 Matias Matute, representing the plaintiff-estate,
filed the corresponding answers to the foregoing counterclaims. The
answer to Canlas' counterclaim specifically denied.
SPECIAL PROCEEDINGS/Rule 72 31 of 42
that the above-entitled case is patently frivolous and
unfounded and was instituted in bad faith and calculated
to merely harass the defendant in order to satisfy the
personal revenge, hatred and vindictiveness of the co-
administrator Matias S. Matute, representing the plaintiff
estate, and intervenors Jose S. Matute and Luis S. Matute,
the truth being that the complaint in the above-entitled
case was instituted precisely to prevent defendants from
illegally and fraudulently transforming and conveying
themselves valuable properties of plaintiff estate worth
more than P500,000.00;
and disclaimed any
knowledge of any actual, moral and consequential
damage having been suffered by defendant Paterno R.
Canlas.
Meanwhile, upon motion of the counsels for the defendants, Judge
Cusi ordered on August 28, 1965 the reshuffle of civil case 4252 in
accordance with section 7, Rule 22 of the Rules of Court. Eventually,
the case was transferred to the sala of Judge Vicente P. Bullecer, the
respondent judge herein.
On January 22, 1966 Canlas filed a "Motion to Resolve: I. Motion to
Dismiss; II. Supplementary and/or Second Motion to Dismiss."
On February 3, 1966 Jose Matute interposed an urgent ex
parte motion for substitution as representative of the plaintiff-
estate in place of Matias Matute, citing the order of January 31,
1966 of the probate court of Manila which appointed him as co-
administrator in place of Matias Matute.
Subsequently, Matias Matute filed in behalf of the plaintiff-estate a
motion to withdraw and/or dismiss with prejudice the complaint in
civil case 4252, which, it will be recalled, he himself instituted in the
name of the Matute estate. The following grounds were advanced to
justify the said motion:
That after a thorough study of the documents presented
by the parties in this case, the undersigned Judicial
Administrator realized that he has expressly ratified and
confirmed any and all contracts and compromise for
attorney's fees that his co-administrator Julian V. Matute
has already entered into with the defendant Atty. Paterno
R. Canlas in his capacity as co-administrator of the said
testacy;
That the causes of action of the above-entitled complaint
against the defendants were based and predicated from
the compromise agreement entered into between
co-administrator Julian V. Matute and the defendant
Paterno R. Canlas on December 2, 1962 and which
compromise agreement was approved by Judge Jose
Moya, presiding Judge of Branch X of the Court of First
Instance of Manila, in Civil Case No. 14208 entitled Rosario
S. Matute, et al. vs. Amadeo Matute Olave, etc., in the
Compromise Judgment dated December 5, 1962.
On February 15, 1966 the respondent Judge dismissed with
prejudice the aforesaid complaint. The order of dismissal reads:

The records show that this action was filed by Matias S.
Matute in his capacity as co-administrator of the Estate of
Amadeo Matute Olave appointed in Sp. Proc. No. 25876,
Probate Court of Manila, to annul a compromise judgment
awarding attorney's fees to defendant Atty. Paterno R.
Canlas and rendered in Civil Case No. 14208, Court of First
Instance of Manila.
Pending incidents in this case, are the motion to dismiss
and supplementary motion to dismiss on the ground of res
judicata filed by the defendants and adopted by the
General Administrator of the Estate, Carlos V. Matute, and
the heirs Maria Luisa Matute, Conchita V. Matute, Carlos S.
Matute, Ramos S. Matute, Eduarda S. Matute and Mrs.
Cecilia Villanueva Matute.
It appears now that the co-administrator Matias S.
Matute who filed this action in the name of the Estate of
Don Amadeo Matute Olave filed a motion to withdraw
and/or dismiss dated January 8, 1966 and verified before
the acting Clerk of Court of Appeals stating that he is
withdrawing the complaint he filed in this case and prays
this Court to dismiss it with prejudice and further ratifying
and expressing conformity to the compromise judgment
subject matter of the complaint rendered in the Civil Case
14208, Court of First Instance of Manila.
As prayed for in defendants' motion to dismiss and
supplementary action (motion) to dismiss, the action filed
in this case is hereby dismissed with prejudice without cost
to plaintiff . (emphasis supplied).
On March 12, 1966 the respondent Judge issued another order
declaring that "all the other incidents pending in this case are hereby
terminated and closed." (Emphasis supplied) Said order reads:
Considering the order of this Court dated February 15,
1966 dismissing this case with prejudice on the ground
of res judicata in view of the final order of July 31, 1963
issued by the Court of First Instance of Manila, Branch X, in
Civil Case No. 14208, as alleged in the defendants' motion
to dismiss and supplementary motion to dismiss: and
considering further that the co-administrator Matias S.
Matute who filed the complaint in this case in the name of
the plaintiff Estate has withdrawn and/or prayed for the
dismissal of this case with prejudice, and considering
furthermore, that the said Order of this Court of February
15, 1966 is now fixed and final, all the other incidents
pending in this case are hereby terminated and closed.
However, on March 29, 1966 the respondent Judge promulgated
an order declaring in default both the intervenors and the plaintiff
estate, the former for failure to answer Canlas' counterclaim and the
latter for failure to respond to the other defendants' separate
counterclaim. The same decree included a judgment by default
condemning the intervenors to jointly and severally pay the sum of
P100,000 as damages to Canlas and likewise sentencing the plaintiff
estate to indemnify the other defendants Rivera, del Rosario and
Vergara in the sum of P50,000. Subsequently, on April 12, 1966 the
respondent Judge ordered the issuance of a writ of execution to
enforce the aforesaid judgment by default.
SPECIAL PROCEEDINGS/Rule 72 32 of 42
Hence, the interposition by the intervenors of the instant petition
for certiorari with preliminary injunction.
Anent the order of February 15, 1966 dismissing with prejudice civil
case 4252, the intervenors-petitioners (now Jose Matute alone, as
the other petitioner, Luis Matute, has already withdrawn) contend
that the said order is a nullity as it was predicated on a void motion
to dismiss and/or withdraw filed by Matias Matute on February 14,
1966, two weeks after the latter had been removed as co-
administrator by the probate court in an order dated January 31,
1966. It is further maintained that when Matias Matute interposed
the aforesaid motion to dismiss and/or to withdraw, he had no more
authority to represent the Matute estate as a consequence of his
ouster as co-administrator. The foregoing argument is irredeemably
foreclosed by our explicit ruling in L-26751 setting aside the
abovementioned order of January 31, 1966 and declaring as void the
removal of Matias Matute and the appointment of the herein
intervenor-petitioner Jose S. Matute as the new co-administrator.
Granting, therefore, that the controverted order of dismissal was
rendered on account of Matias Matute's aforesaid motion which
was filed in behalf of the plaintiff estate, the validity of such
dismissal order cannot be challenged on the ground that the movant
(Matias Matute) lacked the capacity to represent the plaintiff estate
considering that his personality and authority as co-administrator
remained unimpaired because the order of January 31, 1966 is a
nullity.
However, the intervenor-petitioner is of the mistaken impression
that the disputed order of dismissal was based on Matias Matute's
motion to dismiss and/or to withdraw. As correctly pointed out by
the defendants-respondents, the said order was anchored on their
own motion to dismiss and supplementary motion to dismiss.
Although both the motions of the co-administrator in representation
of the plaintiff estate and of the defendants, either of which could
justify the dismissal of the complaint in civil case 4252, were
prominently mentioned in the body of the said controverted order,
the unequivocal import of the dispositive portion of said decree,
however, is that the dismissal was predicated on the defendants'
motion to dismiss and supplementary motion to dismiss, thus:
As prayed for in defendants' motion to dismiss and
supplementary action to dismiss, the action filed in this
case is hereby dismissed with prejudice without cost to
plaintiff. (emphasis supplied)
Moreover, both the order of March 12, 1966 declaring the
termination of all other incidents in civil case 4252 and the order of
April 11, 1966 denying the intervenors' motion for reconsideration,
categorically affirm that the disputed order of dismissal was
anchored on the defendants' motion to dismiss on the ground of res
judicata. The order of April 11, 1966 specifically declares that the
dismissal of civil case 4252 was based
... on the ground of res judicata invoked by the
defendants in their Motion to Dismiss and Supplementary
Motion to Dismiss for the reason that the Compromise
Judgment rendered in Civil Case No. 14208, Court of First
Instance of Manila, sought to be annulled in this case, and
the Order of July 31, 1963 denying the Petition for Relief in
Civil Case No. 14208 and settling all the issues raised in the
Complaint, have both the force and effect of res judicata.

Undeniably, the aforesaid order of dismissal with prejudice
adjudicated civil case 4252 upon the merits. Since there is no
showing that the respondent Judge issued the said order with grave
abuse of discretion or without or in excess of jurisdiction, an
ordinary appeal, then, not a petition for certiorari, was the proper
remedy available to the intervenors Jose and Luis Matute who claim
to be aggrieved, by the dismissal. But having failed to seasonably
appeal from the aforesaid order of dismissal, the herein intervenor-
petitioner cannot avail of a petition for certiorarias a substitute
remedy 15 to challenge the said order, which in the meantime had
already become final.
The pretention of the intervenor-petitioner that his inability to
appeal on time was due to the failure of the court a quo to furnish
him a copy of the order of dismissal is a spurious, if not an utterly
perfidious, claim. To begin with, when the herein intervenor-
petitioner and his brother Luis filed their motion to intervene on
August 17, 1964, they were not represented by counsel, but they
failed to disclose their respective addresses or at least the address of
one of them, contrary to the requirement of section 5 of Rule 7 that
a "party who is not represented by an attorney shall sign his
pleadings and state his address." (emphasis supplied) Consequently,
if the pertinent orders and notices were not sent to the intervenors,
it was because of their failure to disclose their mailing addresses. At
all events, since the intervenors virtually allied with the plaintiff
estate by adopting in toto the latter's complaint without filing a
separate complaint in intervention, it is not without justification to
rule, considering the particular circumstances obtaining, that notice
to the plaintiff estate should be deemed sufficient notice to the
intervenors. Moreover, it is of record that both Attys. Wenceslao
Laureta and Robert Porter, who appeared on February 7, 1966 as
counsels for the intervenor Jose S. Matute in his capacity as alleged
co-administrator by virtue of the abovecited order of the probate
court dated January 31, 1966, were duly furnished with copies of all
orders of the court a quosubsequent to their appearance. Anent the
order of dismissal dated February 15, 1966, the lower court
reported, after an investigation of the deputy clerk of court for
alleged mailing discrepancies upon motion of the intervenors, that
copies of the said order were "each mailed to and received by Attys.
Wenceslao Laureta and Robert E. Porter on March 18 and 3, 1966,
respectively, per registry return cards duly attached to the records
of this case." In other words, the intervenor-petitioner Jose S.
Matute was furnished, through counsel, a copy of the order of
dismissal at the earliest on March 3, 1966 when Atty. Porter
received a copy of the order. After a lapse of twenty-three (23)
daysfrom the receipt of the said copy, Attys. Laureta and Porter filed
on March 26, 1966 a motion for reconsideration of the order of
dismissal. Hence, when the said motion was filed, the intervenor-
petitioner had still seven (7) days to perfect an appeal.
Subsequently, on April 11, 1966, the court a quo denied the
aforesaid motion for reconsideration. Separate copies of said denial
were received by Atty. Laureta on April 16, 1966 and by Atty. Porter
on April 18, 1966, respectively, as per registry receipts 25870 and
25872 and delivery No. 69785 and the reply-telegram dated July 2,
1966 from the Bureau of Posts addressed to the respondent Judge.
From April 16, 1966, the intervenor-petitioner still had seven (7)
days or up to April 23, 1966 to perfect an appeal. However, it was
only on April 25, 1966 that the requisite notice of appeal and appeal
bond were filed while the record on appeal was filed much later, on
May 26, 1966, clearly way beyond the reglementary period.
The intervenor-petitioner contends, however, that it was only on
April 25, 1966 that he received notice of the dismissal of civil case
4252 and on the very same day he caused the filing of the necessary
SPECIAL PROCEEDINGS/Rule 72 33 of 42
notice of appeal and appeal bond. Conceding that the foregoing
assertion is correct, the intervenor-petitioner's projected appeal was
still out of time since the requisite record on appeal was filed only
on May 26, 1966, or thirty-one days from April 25, 1966.
In passing, it is pertinent to note that the dismissal of the complaint
in civil case 4252m, after the issues were joined with the filing of the
responsive pleadings, upon the defendants' motion to resolve a
pending motion to dismiss, the resolution of which had been
previously deferred until after the trial by virtue of an order of the
same court under another judge, is a procedural deviation from the
standard sequence of trial in accordance with which the court a quo,
after the requisite answers were filed, should have proceeded with
the trial on the merits, and only thereafter resolved the motion to
dismiss as was the import of the order of defendant. Nevertheless, it
is relevant to emphasize, on the other hand, that an order deferring
the resolution of a motion to dismiss, being an interlocutory order,
may be altered or revoked by the trial court during the pendency of
the main action. It is settled that an "interlocutory order or decree
made in the progress of a case is always under the control of the
court until the final decision of the suit, and may be modified or
rescinded upon sufficient grounds shown at any time before final
judgment...." 16 Of similar import is the ruling of this Court declaring
that "it is rudimentary that such (interlocutory) orders are subject to
change in the discretion of the court. 17 Moreover, one of the
inherent powers of the court is "To amend and control its process
and orders so as to make them conformable to law and justice." 18 In
the language of Chief Justice Moran, paraphrasing the ruling in Veluz
vs. Justice of the Peace of Sariaya, 19 "since judges are human,
susceptible to mistakes, and are bound to administer justice in
accordance with law, they are given the inherent power of
amending their orders or judgments so as to make them
conformable to law and justice, and they can do so before they los
their jurisdiction of the case that is before the time to appeal has
expired and no appeal has been perfected." 20 And in the
abovecited Veluz case, this Court held that "If the trial court should
discover or be convinced that it had committed an error in its
judgment, or had done an injustice, before the same has become
final, it may, upon its own motion or upon a motion of the parties,
correct such error in order to do justice between the parties.... It
would seem to be the very height of absurdity to prohibit a trial
judge from correcting an error, mistake, or injustice which is called
to his attention before he has lost control of his judgment."
Corollarily, it has also been held "that a judge of first instance is not
legally prevented from revoking the interlocutory order of another
judge in the very litigation subsequently assigned to him for judicial
action." 21
In view of the foregoing rulings, it is then enough to say that the
abovementioned order of deferment, issued by the Honorable Judge
Vicente Cusi, Jr., to whose sala civil case 4252 was originally
assigned, is interlocutory in nature, and as such, the court a quo,
through the now respondent Judge Vicente Bullecer, had the power
to set it aside, as it did by finally deciding the pending motion to
dismiss on the ground of res judicata. Moreover, as previously
stated, there is no evidence to show that the respondent Judge, in
issuing the order of dismissal, acted with grave abuse of discretion
or without or in excess of jurisdiction.
We now come to the challenged order of default and judgment by
default, both contained in the abovementioned order dated March
29, 1966. Attacking the validity of the said order of default, the
intervenor-petitioner claims that the respondent Judge failed to
consider that Matias Matute, representing the plaintiff estate, filed

on time an answer dated March 1, 1965 traversing the allegations of
Canlas' counterclaim, which answer inured to the benefit of not only
Matias Matute but also to the intervenors who were jointly
impleaded as defendants in the said counterclaim. The defendant-
respondent Canlas, on the other hand, while not denying receipt of
the aforesaid answer to his counterclaim, contends that the herein
intervenor-petitioner's failure to personally answer said
counterclaim is fatal and that he could not take refuge under the
answer interposed by Matias Matute.
We are of the considered opinion that the herein disputed order of
default is illegal and void, and, consequently, the controverted
judgment by default and order of execution were improvidently
issued.
1. The counterclaim interposed by Canlas raised a common cause
of action for damages against Matias Matute, as the representative
of the plaintiff estate, and Jose and Luis Matute, as intervenors in
civil case 4252, all in their personal capacities. The counterclaim
reads:
That for instituting this patently frivolous and unfounded
action in bad faith calculated to merely harass answering
defendant Paterno R. Canlas in order to satisfy the
personal revenge, hatred and vindictiveness of the co-
administrator, Matias S. Matute, representing the plaintiff
Estate, and the intervenors Jose S. Matute and Luis S.
Matute, defendant Paterno R. Canlas suffered actual,
moral and consequential damages in the total amount of
P100,000.00, for which plaintiff Matias S. Matute and
intervenors Jose S. Matute and Luis S. Matute should be
held personally liable. (emphasis supplied)
Having been this jointly charged to pay the abovestated damages,
the brothers Matias, Jose and Luis Matute could validly file a
common responsive pleading, as in effect they did when Matias
Matute filed an answer to the aforesaid counterclaim, the receipt of
which Canlas admits. It is significant to note that the said answer
does not only deny the charge against Matias Matute but as well as
negates the claim against the intervenors.
2. Moreover, having successfully prayed for the resolution of his
pending motion to dismiss, even after the issues had been joined
with the filing of his answer, the defendant-respondent Canlas is
deemed to have abandoned his counterclaim and voluntarily
reverted himself to the time when he initially interposed his motion
to dismiss prior to the filing of his answer with counterclaim. Thus,
when the complaint in civil case 4252 was dismissed on the basis of
Canlas' motion, the entire proceeding was inevitably terminated
and there was nothing more to adjudge. In fact, the termination of
all the pending incidents in civil case 4252 was subsequently decreed
by the respondent Judge himself in the orders of March 12, 1966
and April 11, 1966. Consequently, the respondent Judge, to say the
least, acted in excess of jurisdiction when he issued, after having
dismissed the principal complaint, the herein controverted order of
default and judgment by default for then there was nothing left to
be adjudicated. Said decrees having been rendered in excess of
jurisdiction, certiorari will lie to have then annulled.
In view of the foregoing discussion, the finality of the order of
dismissal should be upheld, while the disputed order of default,
judgment by default and order of execution should be declared void
and set aside.
SPECIAL PROCEEDINGS/Rule 72 34 of 42
The motion interposed on June 14, 1966 by the herein intervenor-
petitioner, in his alleged capacity as co-administrator, in behalf of
the Amadeo Matute Olave estate, praying that the said estate be
allowed to adopt the instant petition for certiorari with preliminary
injunction and be admitted as co-petitioner, the resolution of which
we had previously deferred, should therefore be denied on the
ground that the intervenor-petitioner has no legal personality to
represent the Matute estate considering that his appointment as co-
administrator has been voided. Nevertheless, it is our considered
view that the declaration of total nullity of the abovementioned
judgment by default shall perforce bar the execution against the
Matute estate of that portion of the said void judgment which
condemns it to pay the sum of P50,000 in damages to the
defendants-respondents Rivera, del Rosario and Vergara.
ACCORDINGLY, (1) in L-26751 the petition for certiorari is hereby
granted; the respondent Court of Appeals is adjudged as without
jurisdiction over CA-G.R. 37039-R; the probate court's controverted
order of January 31, 1966 is hereby set aside in its entirety, thereby
maintaining the respondent Matias S. Matute in his trust as co-
administrator of the Amadeo Matute Olave estate; (2) in L-
26085 the petition for certiorari is hereby granted; the order of
default dated April 16, 1966, the judgment by default dated April 23,
1966, and the order of execution dated May 3, 1966, all issued in
excess of jurisdiction by the respondent Judge of the Court of First
Instance of Davao, are set aside; and (3) in L-26106 the petition
for certiorari is hereby denied in so far as it seeks to nullify the final
order of dismissal dated February 15, 1966; the order of default and
judgment by default dated March 29, 1966 and the order of
execution dated April 12, 1966, all similarly issued in excess of
jurisdiction by the same respondent Judge are set aside. No
pronouncement as to costs.
10. SECOND DIVISION
G.R. No. 172547 June 30, 2009
PRECY BUNYI and MILA BUNYI, Petitioners,
vs.
FE S. FACTOR, Respondent.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated January 16, 2006
and Resolution2 dated April 26, 2006 of the Court of Appeals in CA-
G.R. SP No. 90397, which had affirmed the Decision3 dated March 7,
2005 of the Regional Trial Court (RTC) of Las Piñas City, Branch 198
in Civil Case No. LP-04-0160.
The antecedent facts are as follows:
Respondent Fe S. Factor is one of the co-owners of an 18-hectare
piece of land located in Almanza, Las Piñas City. The ownership of
the land originated from respondent’s paternal grandparents
Constantino Factor and Maura Mayuga-Factor who had been in
actual, continuous, peaceful, public, adverse and exclusive
possession and occupation of the land even before 1906.4
On December 9, 1975, the children of Constantino Factor and Maura
Mayuga-Factor filed a Petition for Original Registration and

Confirmation of Imperfect Title to the said parcel of land, or Lots 1,
2, 3 and 4 of Psu-253567, before the RTC of Pasig City, Branch
71.5 On December 8, 1994, the trial court granted the petition in LRC
Case No. N-9049 and declared the children of Constantino Factor
and Maura Mayuga-Factor as co-owners of the property. 6 The
children of Constantino Factor and Maura Mayuga-Factor thereafter
sold seven (7) hectares of the Factor family property during the
same year. The siblings, except Enrique Factor, respondent’s father,
shared and divided the proceeds of the sale among themselves, with
the agreement that Enrique would have as his share the portion of
the property located in Antioch Street, Pilar Executive Village,
Almanza I, Las Piñas City, known as the Factor compound.
Following his acquisition thereof, Enrique caused the construction of
several houses in the compound including the subject property, a
rest house, where members of the Factor family stayed during get-
togethers and visits.7Petitioners Precy Bunyi and her mother, Mila
Bunyi, were tenants in one of the houses inside the compound,
particularly in No. 8 Antioch St., Pilar Village, Almanza, Las Piñas City
since 1999.8
When Enrique Factor died on August 7, 1993, the administration of
the Factor compound including the subject rest house and other
residential houses for lease was transferred and entrusted to
Enrique’s eldest child, Gloria Factor-Labao.
Gloria Factor-Labao, together with her husband Ruben Labao and
their son Reggie F. Labao, lived in Tipaz, Taguig, Metro Manila but
visited and sometimes stayed in the rest house because Gloria
collected the rentals of the residential houses and oversaw the
Factor compound. When Gloria died on January 15, 2001, the
administration and management of the Factor compound including
the subject rest house, passed on to respondent Fe S. Factor as co-
owner of the property. As an act of goodwill and compassion,
considering that Ruben Labao was sickly and had no means of
income, respondent allowed him to stay at the rest house for brief,
transient and intermittent visits as a guest of the Factor family.
On May 31, 2002, Ruben Labao married petitioner Precy Bunyi. On
November 10, 2002, Ruben Labao died.
At about this time, respondent discovered that petitioners forcibly
opened the doors of the rest house and stole all the personal
properties owned by the Factor family and then audaciously
occupied the premises. Respondent alleged that petitioners
unlawfully deprived her and the Factor family of the subject
property’s lawful use and possession. Respondent also added that
when she tried to enter the rest house on December 1, 2002, an
unidentified person who claimed to have been authorized by
petitioners to occupy the premises, barred, threatened and chased
her with a jungle bolo. Thus, on September 12, 2003, respondent Fe
S. Factor filed a complaint9 for forcible entry against herein
petitioners Precy Bunyi and Mila Bunyi.
Petitioners, for their part, questioned Fe’s claim of ownership of the
subject property and the alleged prior ownership of her father
Enrique Factor. They asserted that the subject property was owned
by Ruben Labao, and that petitioner Precy with her husband moved
into the subject property, while petitioner Mila Bunyi, mother of
Precy, remained in No. 8 Antioch St.
SPECIAL PROCEEDINGS/Rule 72 35 of 42
On July 13, 2004, the Metropolitan Trial Court (MeTC) of Las Piñas
City, Branch 79 ruled in favor of Fe S. Factor. The dispositive portion
of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
and against the defendants ordering the latter and all persons
claiming rights under them to:
1. To immediately vacate the subject premises and
surrender possession thereof to the plaintiff.
2. To pay the monthly rental of ₱2,000.00 from December
1, 2002 up to the time they finally vacate the premises.
3. To pay attorney’s fee of Php 10,000.00.
The counter-claim is dismissed for lack of merit.
SO ORDERED.10
Petitioners appealed the decision to the RTC of Las Piñas City,
Branch 198, which, however, affirmed in toto the decision of the
MeTC and later denied their motion for
reconsideration.11 Undaunted, petitioners filed a petition for review
before the Court of Appeals but it was denied also. Hence, the
instant petition before us.
Petitioners submit the following issues for the Court’s consideration:
I.
[WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
IN LAW AND JURISPRUDENCE WHEN IT AFFIRMED THE DECISION OF
THE REGIONAL TRIAL COURT THAT FORCE, THREAT, INTIMIDATION
AND STEALTH HAD BEEN COMMITTED BY THE PETITIONERS IN
OCCUPYING THE SUBJECT RESIDENTIAL HOUSE;
II.
[WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT MISAPPRECIATED THE FACT THAT THE RESPONDENT HAS A
BETTER RIGHT OF PHYSICAL AND MATERIAL POSSESSION OF THE
SUBJECT PROPERTY;
III.
[WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
IN AFFIRMING THE FINDING OF THE REGIONAL [TRIAL] COURT
HOLDING PETITIONERS LIABLE TO PAY THE MONTHLY RENTAL OF
₱2,000.00 FROM DECEMBER 1, 2002 UP TO THE TIME THEY FINALLY
VACATE PREMISES.12
The resolution of the first issue raised by petitioners requires us to
inquire into the sufficiency of the evidence presented below, a
course of action which this Court will not do, consistent with our
repeated holding that the Supreme Court is not a trier of facts.13 The
resolution of factual issues is the function of lower courts, whose
findings on these matters are received with respect and considered
binding by the Supreme Court subject only to certain exceptions,
none of which is present in the instant petition. 14 Noteworthy, in

this case, the cited findings of the RTC have been affirmed by the
Court of Appeals.
As to the second issue, the resolution thereof boils down to a
determination of who, between petitioners and respondent, would
be entitled to the physical possession of the subject property.
Both parties anchor their right of material possession of the
disputed property on their respective claims of ownership.
Petitioners insist that petitioner Precy has a better right of
possession over the subject property since she inherited the subject
property as the surviving spouse and sole heir of Ruben Labao, who
owned the property before his death.
Respondent, on the other hand, hinges her claim of possession on
the fact that her predecessor-in-interest had prior possession of the
property as early as 1975.
After careful consideration, we find in favor of the respondent.
In ejectment cases, the only issue for resolution is who is entitled to
the physical or material possession of the property involved,
independent of any claim of ownership set forth by any of the party-
litigants. The one who can prove prior possession de facto may
recover such possession even from the owner himself.15 Possession
de facto is the physical possession of real property. Possession de
facto and not possession de jure is the only issue in a forcible entry
case.16 This rule holds true regardless of the character of a party’s
possession, provided, that he has in his favor priority of time which
entitles him to stay on the property until he is lawfully ejected by a
person having a better right by either accion publiciana or accion
reivindicatoria.17
Petitioners argue that respondent was never in possession of the
subject property since the latter never occupied the same. They
claim that they have been in actual possession of the disputed
property from the time petitioner Precy married Ruben Labao in
2002.
In this instance, however, petitioners’ contention is unconvincing.
For one to be considered in possession, one need not have actual or
physical occupation of every square inch of the property at all
times.18 Possession can be acquired not only by material occupation,
but also by the fact that a thing is subject to the action of one’s will
or by the proper acts and legal formalities established for acquiring
such right.19 Possession can be acquired by juridical acts. These are
acts to which the law gives the force of acts of possession. Examples
of these are donations, succession, execution and registration of
public instruments, and the inscription of possessory information
titles.20
While petitioners claim that respondent never physically occupied
the subject property, they failed to prove that they had prior
possession of the subject property. On record, petitioner Precy
Bunyi admitted that Gloria Factor-Labao and Ruben Labao, as
spouses, resided in Tipaz, Taguig, Metro Manila and used the subject
property whenever they visit the same.21 Likewise, as pointed out by
the MeTC and the RTC, Ruben and petitioner Precy’s marriage
certificate revealed that at the time of their marriage, Ruben was
residing at 123 A. Lake St., San Juan, Metro Manila. Even Ruben’s
death certificate showed that his place of death and residence was
at #4 Labao St., Tipaz, Taguig, Metro Manila. Considering that her
SPECIAL PROCEEDINGS/Rule 72 36 of 42
husband was never a resident of the subject property, petitioner
Precy failed to explain convincingly how she was able to move in
with Ruben Labao in the subject property during their marriage.
On the other hand, it was established that respondent’s
grandparents, Constantino Factor and Maura Mayuga-Factor, had
been the occupants and in possession of various agricultural parcel
of lands situated in Almanza, Las Piñas City, in the concept of
owners, for more than thirty years prior to 1975. In fact, the RTC in
its Decision dated December 8, 1994 in LRC Case No. N-9049 has
confirmed the rights of respondent’s predecessors over the subject
property and ordered the issuance of the corresponding certificate
of title in their favor.22
The right of respondent’s predecessors over the subject property is
more than sufficient to uphold respondent’s right to possession over
the same. Respondent’s right to the property was vested in her
along with her siblings from the moment of their father’s death.23 As
heir, respondent had the right to the possession of the property,
which is one of the attributes of ownership. Such rights are enforced
and protected from encroachments made or attempted before the
judicial declaration since respondent acquired hereditary rights even
before judicial declaration in testate or intestate proceedings.24
After the death of Enrique Factor, it was his eldest child, Gloria
Factor-Labao who took over the administration of the subject
property. And as a consequence of co-ownership,25 soon after the
death of Gloria, respondent, as one of the surviving co-owners, may
be subrogated to the rights of the deceased co-owner, which
includes the right to the administration and management of the
subject property.
As found by the Court of Appeals, petitioners’ unsupported claim of
possession must yield to that of the respondent who traces her
possession of the subject property to her predecessors-in-interest
who have always been in possession of the subject property. Even
assuming that respondent was never a resident of the subject
property, she could legally continue possessing the property. Visiting
the property on weekends and holidays is evidence of actual or
physical possession.26 The fact of her residence somewhere else, by
itself, does not result in loss of possession of the subject property.
The law does not require one in possession of a house to reside in
the house to maintain his possession.27 For, again, possession in the
eyes of the law does not mean that a man has to have his feet on
every square meter of the ground before he is deemed in
possession.28 There is no cogent reason to deviate from this
doctrine.
All things considered, this Court finds that respondent Fe S. Factor
successfully proved the extent and character of her possession over
the disputed property. As a consequence of her ownership thereof,
respondent is entitled to its possession, considering petitioners’
failure to prove prior possession. The Court stresses, however, that
its determination of ownership in the instant case is not final. It is
only a provisional determination for the sole purpose of resolving
the issue of possession. It would not bar or prejudice a separate
action between the same parties involving the quieting of title to the
subject property.29
As regards the means upon which the deprivation took effect, it is
not necessary that the respondent must demonstrate that the taking
was done with force, intimidation threat, strategy or stealth. The

Supreme Court, in Bañes v. Lutheran Church in the
Philippines,30 explained:
In order to constitute force that would justify a forcible entry case,
the trespasser does not have to institute a state of war. The act of
going to the property and excluding the lawful possessor therefrom
necessarily implies the exertion of force over the property which is
all that is necessary and sufficient to show that the action is based
on the provisions of Section 1, Rule 70 of the Rules of Court.31
As expressly stated in David v. Cordova:32
The words ‘by force, intimidation, threat, strategy or stealth’ include
every situation or condition under which one person can wrongfully
enter upon real property and exclude another, who has had prior
possession therefrom. If a trespasser enters upon land in open
daylight, under the very eyes of the person already clothed with
lawful possession, but without the consent of the latter, and there
plants himself and excludes such prior possessor from the property,
the action of forcible entry and detainer can unquestionably be
maintained, even though no force is used by the trespasser other
than such as is necessarily implied from the mere acts of planting
himself on the ground and excluding the other party.33
Respondent, as co-owner, has the control of the subject property
even if she does not stay in it. So when petitioners entered said
property without the consent and permission of the respondent and
the other co-owners, the latter were deprived of its possession.
Moreover, the presence of an unidentified man forbidding
respondent from entering the subject property constitutes force
contemplated by Section 1,34 Rule 70 of the Rules of Court.1avvphi1
As to the last issue, we have previously ruled that while the courts
may fix the reasonable amount of rent for the use and occupation of
a disputed property, they could not simply rely on their own
appreciation of land values without considering any evidence. The
reasonable amount of any rent could not be determined by mere
judicial notice but by supporting evidence.35 In the instant case, we
find no evidence on record to support the MeTC’s award of rent.
On the matter of attorney’s fees awarded to the respondent, we are
in agreement to delete it. It is a well-settled rule that where
attorney’s fees are granted, the court must explicitly state in the
body of the decision, and not only in the dispositive portion thereof,
the legal reason for the award.36 Again, nothing in the body of both
decisions of RTC and MeTC explicitly stated the reasons for the
award of attorney’s fees.
WHEREFORE, the instant petition is DENIED. The challenged Decision
dated January 16, 2006 and Resolution dated April 26, 2006 of the
Court of Appeals in CA-G.R. SP No. 90397 are AFFIRMED with
MODIFICATION that the award of rentals and attorney’s fees are
DELETED.
No pronouncement as to costs.
SO ORDERED.
11. SECOND DIVISION
G.R. No. 124715 January 24, 2000
SPECIAL PROCEEDINGS/Rule 72 37 of 42
RUFINA LUY LIM, petitioner,
vs.
COURT OF APPEALS, AUTO TRUCK TBA CORPORATION, SPEED
DISTRIBUTING, INC., ACTIVE DISTRIBUTORS, ALLIANCE MARKETING
CORPORATION, ACTION COMPANY, INC. respondents.
BUENA, J.:
May a corporation, in its universality, be the proper subject of and
be included in the inventory of the estate of a deceased person?
Petitioner disputes before us through the instant petition for review
on certiorari, the decision1 of the Court of Appeals promulgated on
18 April 1996, in CA-GR SP No. 38617, which nullified and set aside
the orders dated 04 July 19952 , 12 September 19953 and 15
September 19954 of the Regional Trial Court of Quezon City, Branch
93, sitting as a probate court.
Petitioner Rufina Luy Lim is the surviving spouse of late Pastor Y. Lim
whose estate is the subject of probate proceedings in Special
Proceedings Q-95-23334, entitled, "In Re: Intestate Estate of Pastor
Y. Lim Rufina Luy Lim, represented by George Luy,
Petitioner".1âwphi1.nêt
Private respondents Auto Truck Corporation, Alliance Marketing
Corporation, Speed Distributing, Inc., Active Distributing, Inc. and
Action Company are corporations formed, organized and existing
under Philippine laws and which owned real properties covered
under the Torrens system.
On 11 June 1994, Pastor Y. Lim died intestate. Herein petitioner, as
surviving spouse and duly represented by her nephew George Luy,
fried on 17 March 1995, a joint petition5 for the administration of
the estate of Pastor Y. Lim before the Regional Trial Court of Quezon
City.
Private respondent corporations, whose properties were included in
the inventory of the estate of Pastor Y. Lim, then filed a motion6 for
the lifting of lis pendens and motion7 for exclusion of certain
properties from the estate of the decedent.
In an order8 dated 08 June 1995, the Regional Trial Court of Quezon
City, Branch 93, sitting as a probate court, granted the private
respondents' twin motions, in this wise:
Wherefore, the Register of Deeds of Quezon City is hereby
ordered to lift, expunge or delete the annotation of lis
pendens on Transfer Certificates of Title Nos. 116716,
116717, 116718, 116719 and 5182 and it is hereby further
ordered that the properties covered by the same titles as
well as those properties by (sic) Transfer Certificate of Title
Nos. 613494, 363123, 236236 and 263236 are excluded
from these proceedings.
SO ORDERED.
Subsequently, Rufina Luy Lim filed a verified amended
petition9 which contained the following averments:
3. The late Pastor Y. Lim personally owned during his
lifetime the following business entities, to wit:
 SPECIAL PROCEEDINGS/Rule 72 38 of 42
Copies of the above-mentioned Transfer Certificate of Title
Business Entity Address:
and/or Tax Declarations are hereto attached as Annexes
xxx xxx xxx "C" to "W".

Alliance Block 3, Lot 6, Dacca BF Homes, xxx xxx xxx

Marketing, Inc. Parañaque, Metro Manila.

xxx xxx xxx 7. The aforementioned properties and/or real interests left
by the late Pastor Y. Lim, are all conjugal in nature, having
Speed 910 Barrio Niog, Aguinaldo Highway, been acquired by him during the existence of his marriage
Distributing Inc. Bacoor, Cavite. with petitioner.

xxx xxx xxx 8. There are other real and personal properties owned by
Pastor Y. Lim which petitioner could not as yet identify.
Auto Truck TBA
2251 Roosevelt Avenue, Quezon City. Petitioner, however will submit to this Honorable Court
Corp.
the identities thereof and the necessary documents
xxx xxx xxx covering the same as soon as possible.

Active On 04 July 1995, the Regional Trial Court acting on petitioner's

Block 3, Lot 6, Dacca BF Homes,
Distributors, motion issued an order10 , thus:
Parañaque, Metro Manila.
Inc.
Wherefore, the order dated 08 June 1995 is hereby set
xxx xxx xxx
aside and the Registry of Deeds of Quezon City is hereby
Action 100 20th Avenue Murphy, Quezon directed to reinstate the annotation of lis pendens in case
Company City or 92-D Mc-Arthur Highway said annotation had already been deleted and/or
Valenzuela Bulacan. cancelled said TCT Nos. 116716, 116717, 116718, 116719
and 51282.

3.1 Although the above business entities dealt
and engaged in business with the public as
corporations, all their capital, assets and equity
were however, personally owned by the late
Pastor Y Lim. Hence the alleged stockholders and
officers appearing in the respective articles of
incorporation of the above business entities
were mere dummies of Pastor Y. Lim, and they
were listed therein only for purposes of
registration with the Securities and Exchange
Commission.
Further more (sic), said properties covered by TCT Nos.
613494, 365123, 236256 and 236237 by virtue of the
petitioner are included in the instant petition.
SO ORDERED.
On 04 September 1995, the probate court appointed Rufina Lim as
special administrator11 and Miguel Lim and Lawyer Donald Lee, as
co-special administrators of the estate of Pastor Y. Lim, after which
letters of administration were accordingly issued.

4. Pastor Lim, likewise, had Time, Savings and Current In an order12 dated 12 September 1995, the probate court denied
Deposits with the following banks: (a) Metrobank, Grace anew private respondents' motion for exclusion, in this wise:
Park, Caloocan City and Quezon Avenue, Quezon City
Branches and (b) First Intestate Bank (formerly Producers The issue precisely raised by the petitioner in her petition
Bank), Rizal Commercial Banking Corporation and in other is whether the corporations are the mere alter egos or
banks whose identities are yet to be determined. instrumentalities of Pastor Lim, Otherwise (sic) stated, the
issue involves the piercing of the corporate veil, a matter
5. That the following real properties, although registered that is clearly within the jurisdiction of this Honorable
in the name of the above entities, were actually acquired Court and not the Securities and Exchange Commission.
by Pastor Y. Lim during his marriage with petitioner, to wit: Thus, in the case of Cease vs. Court of Appeals, 93 SCRA
483, the crucial issue decided by the regular court was
whether the corporation involved therein was the mere
Corporation Title Location extension of the decedent. After finding in the affirmative,
the Court ruled that the assets of the corporation are also
xxx xxx xxx assets of the estate.
k. Auto Truck TCT No. Sto. Domingo
617726 TBA A reading of P.D. 902, the law relied upon by oppositors,
Corporation shows that the SEC's exclusive (sic) applies only to intra-
Cainta, Rizal corporate controversy. It is simply a suit to settle the
intestate estate of a deceased person who, during his
q. Alliance TCT No. Prance, Metro lifetime, acquired several properties and put up
Marketing 27896 Manila corporations as his instrumentalities.

SO ORDERED.

On 15 September 1995, the probate court acting on an ex
parte motion filed by petitioner, issued an order13 the dispositive
portion of which reads:
Wherefore, the parties and the following banks concerned
herein under enumerated are hereby ordered to comply
strictly with this order and to produce and submit to the
special administrators, through this Honorable Court
within (5) five days from receipt of this order their
respective records of the savings/current accounts/time
deposits and other deposits in the names of Pastor Lim
and/or corporations above-mentioned, showing all the
transactions made or done concerning savings/current
accounts from January 1994 up to their receipt of this
court order.
xxx xxx xxx
SO ORDERED.
Private respondent filed a special civil action for certiorari14 , with an
urgent prayer for a restraining order or writ of preliminary
injunction, before the Court of Appeals questioning the orders of the
Regional Trial Court, sitting as a probate court.
On 18 April 1996, the Court of Appeals, finding in favor of herein
private respondents, rendered the assailed decision15 , the decretal
portion of which declares:
Wherefore, premises considered, the instant special civil
action for certiorari is hereby granted, The impugned
orders issued by respondent court on July 4, 1995 and
September 12, 1995 are hereby nullified and set aside. The
impugned order issued by respondent on September 15,
1995 is nullified insofar as petitioner corporations" bank
accounts and records are concerned.
SO ORDERED.
Through the expediency of Rule 45 of the Rules of Court, herein
petitioner Rufina Luy Lim now comes before us with a lone
assignment of
error16 :
The respondent Court of Appeals erred in reversing the
orders of the lower court which merely allowed the
preliminary or provisional inclusion of the private
respondents as part of the estate of the late deceased (sic)
Pastor Y. Lim with the respondent Court of Appeals
arrogating unto itself the power to repeal, to disobey or to
ignore the clear and explicit provisions of Rules 81,83,84
and 87 of the Rules of Court and thereby preventing the
petitioner, from performing her duty as special
administrator of the estate as expressly provided in the
said Rules.
Petitioner's contentions tread on perilous grounds.
In the instant petition for review, petitioner prays that we affirm the
orders issued by the probate court which were subsequently set
aside by the Court of Appeals.
SPECIAL PROCEEDINGS/Rule 72 39 of 42
Yet, before we delve into the merits of the case, a review of the
rules on jurisdiction over probate proceedings is indeed in order.
The provisions of Republic Act 769117 , which introduced
amendments to Batas Pambansa Blg. 129, are pertinent:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise
known as the "Judiciary Reorganization Act of 1980", is
hereby amended to read as follows:
Sec. 19. Jurisdiction in civil cases. Regional Trial Courts
shall exercise exclusive jurisdiction:
xxx xxx xxx
(4) In all matters of probate, both testate and intestate,
where the gross value of the estate exceeds One Hundred
Thousand Pesos (P100,000) or, in probate matters in
Metro Manila, where such gross value exceeds Two
Hundred Thousand Pesos (P200,000);
xxx xxx xxx
Sec. 3. Section 33 of the same law is hereby amended to
read as follows:
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts in Civil Cases. — Metropolitan Trial
Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts shall exercise:
1. Exclusive original jurisdiction over civil actions
and probate proceedings, testate and intestate,
including the grant of provisional remedies in
proper cases, where the value of the personal
property, estate or amount of the demand does
not exceed One Hundred Thousand Pesos
(P100,000) or, in Metro Manila where such
personal property, estate or amount of the
demand does not exceed Two Hundred
Thousand Pesos (P200,000), exclusive of
interest, damages of whatever kind, attorney's
fees, litigation expenses and costs, the amount
of which must be specifically alleged, Provided,
that interest, damages of whatever kind,
attorney's, litigation expenses and costs shall be
included in the determination of the filing
fees, Provided further, that where there are
several claims or causes of actions between the
same or different parties, embodied in the same
complaint, the amount of the demand shall be
the totality of the claims in all the causes of
action, irrespective of whether the causes of
action arose out of the same or different
transactions;
xxx xxx xxx
Simply put, the determination of which court exercises jurisdiction
over matters of probate depends upon the gross value of the estate
of the decedent.

As to the power and authority of the probate court, petitioner relies
heavily on the principle that a probate court may pass upon title to
certain properties, albeit provisionally, for the purpose of
determining whether a certain property should or should not be
included in the inventory.
In a litany of cases, We defined the parameters by which the court
may extend its probing arms in the determination of the question of
title in probate proceedings.
This Court, in PASTOR, JR. vs. COURT OF APPEALS,18 held:
. . . As a rule, the question of ownership is an extraneous
matter which the probate court cannot resolve with
finality. Thus, for the purpose of determining whether a
certain property should or should not be included in the
inventory of estate properties, the Probate Court may pass
upon the title thereto, but such determination is
provisional, not conclusive, and is subject to the final
decision in a separate action to resolve title.
We reiterated the rule in PEREIRA vs. COURT OF APPEALS19 :
. . . The function of resolving whether or not a certain
property should be included in the inventory or list of
properties to be administered by the administrator is one
clearly within the competence of the probate court.
However, the court's determination is only provisional in
character, not conclusive, and is subject to the final
decision in a separate action which may be instituted by
the parties.
Further, in MORALES vs. CFI OF CAVITE20 citing CUIZON
vs. RAMOLETE21 , We made an exposition on the probate court's
limited jurisdiction:
It is a well-settled rule that a probate court or one in
charge of proceedings whether testate or intestate cannot
adjudicate or determine title to properties claimed to be a
part of the estate and which are equally claimed to belong
to outside parties. All that the said court could do as
regards said properties is to determine whether they
should or should not be included in the inventory or list of
properties to be administered by the administrator. If
there is no dispute, well and good; but if there is, then the
parties, the administrator and the opposing parties have
to resort to an ordinary action for a final determination of
the conflicting claims of title because the probate court
cannot do so.
Again, in VALERA vs. INSERTO22 , We had occasion to elucidate,
through Mr. Justice Andres Narvasa23 :
Settled is the rule that a Court of First Instance (now
Regional Trial Court), acting as a probate court, exercises
but limited jurisdiction, and thus has no power to take
cognizance of and determine the issue of title to property
claimed by a third person adversely to the decedent,
unless the claimant and all other parties having legal
interest in the property consent, expressly or impliedly, to
the submission of the question to the probate court for
adjudgment, or the interests of third persons are not
thereby prejudiced, the reason for the exception being
SPECIAL PROCEEDINGS/Rule 72 40 of 42
that the question of whether or not a particular matter
should be resolved by the court in the exercise of its
general jurisdiction or of its limited jurisdiction as a special
court (e.g. probate, land registration, etc.), is in reality not
a jurisdictional but in essence of procedural one, involving
a mode of practice which may be waived. . . .
. . . . These considerations assume greater cogency where,
as here, the Torrens title is not in the decedent's name but
in others, a situation on which this Court has already had
occasion to rule . . . . (emphasis Ours)
Petitioner, in the present case, argues that the parcels of land
covered under the Torrens system and registered in the name of
private respondent corporations should be included in the inventory
of the estate of the decedent Pastor Y. Lim, alleging that after all the
determination by the probate court of whether these properties
should be included or not is merely provisional in nature, thus, not
conclusive and subject to a final determination in a separate action
brought for the purpose of adjudging once and for all the issue of
title.
Yet, under the peculiar circumstances, where the parcels of land are
registered in the name of private respondent corporations, the
jurisprudence pronounced in BOLISAY vs., ALCID 24 is of great
essence and finds applicability, thus:
It does not matter that respondent-administratrix has
evidence purporting to support her claim of ownership,
for, on the other hand, petitioners have a Torrens title in
their favor, which under the law is endowed with
incontestability until after it has been set aside in the
manner indicated in the law itself, which of course, does
not include, bringing up the matter as a mere incident in
special proceedings for the settlement of the estate of
deceased persons. . . .
. . . . In regard to such incident of inclusion or exclusion,
We hold that if a property covered by Torrens title is
involved, the presumptive conclusiveness of such title
should be given due weight, and in the absence of strong
compelling evidence to the contrary, the holder thereof
should be considered as the owner of the property in
controversy until his title is nullified or modified in an
appropriate ordinary action, particularly, when as in the
case at bar, possession of the property itself is in the
persons named in the title. . . .
A perusal of the records would reveal that no strong compelling
evidence was ever presented by petitioner to bolster her bare
assertions as to the title of the deceased Pastor Y. Lim over the
properties. Even so, P.D. 1529, otherwise known as, "The Property
Registration Decree", proscribes collateral attack on Torrens Title,
hence:
xxx xxx xxx
Sec. 48. Certificate not subject to collateral attack. — A
certificate of title shall not be subject to collateral attack.
It cannot be altered, modified or cancelled except in a
direct proceeding in accordance with law.

In CUIZON vs. RAMOLETE, where similarly as in the case at bar, the
property subject of the controversy was duly registered under the
Torrens system, We categorically stated:
. . . Having been apprised of the fact that the property in
question was in the possession of third parties and more
important, covered by a transfer certificate of title issued
in the name of such third parties, the respondent court
should have denied the motion of the respondent
administrator and excluded the property in question from
the inventory of the property of the estate. It had no
authority to deprive such third persons of their possession
and ownership of the property. . . .
Inasmuch as the real properties included in the inventory of the
estate of the Late Pastor Y. Lim are in the possession of and are
registered in the name of private respondent corporations, which
under the law possess a personality separate and distinct from their
stockholders, and in the absence of any cogency to shred the veil of
corporate fiction, the presumption of conclusiveness of said titles in
favor of private respondents should stand undisturbed.
Accordingly, the probate court was remiss in denying private
respondents' motion for exclusion. While it may be true that the
Regional Trial Court, acting in a restricted capacity and exercising
limited jurisdiction as a probate court, is competent to issue orders
involving inclusion or exclusion of certain properties in the inventory
of the estate of the decedent, and to adjudge, albeit, provisionally
the question of title over properties, it is no less true that such
authority conferred upon by law and reinforced by jurisprudence,
should be exercised judiciously, with due regard and caution to the
peculiar circumstances of each individual case.
Notwithstanding that the real properties were duly registered under
the Torrens system in the name of private respondents, and as such
were to be afforded the presumptive conclusiveness of title, the
probate court obviously opted to shut its eyes to this gleamy fact
and still proceeded to issue the impugned orders.
By its denial of the motion for exclusion, the probate court in effect
acted in utter disregard of the presumption of conclusiveness of title
in favor of private respondents. Certainly, the probate court through
such brazen act transgressed the clear provisions of law and
infringed settled jurisprudence on this matter.
Moreover, petitioner urges that not only the properties of private
respondent corporations are properly part of the decedent's estate
but also the private respondent corporations themselves. To rivet
such flimsy contention, petitioner cited that the late Pastor Y. Lim
during his lifetime, organized and wholly-owned the five
corporations, which are the private respondents in the instant
case.25 Petitioner thus attached as Annexes "F"26 and "G"27 of the
petition for review affidavits executed by Teresa Lim and Lani
Wenceslao which among others, contained averments that the
incorporators of Uniwide Distributing, Inc. included on the list had
no actual and participation in the organization and incorporation of
the said corporation. The affiants added that the persons whose
names appeared on the articles of incorporation of Uniwide
Distributing, Inc., as incorporators thereof, are mere dummies since
they have not actually contributed any amount to the capital stock
of the corporation and have been merely asked by the late Pastor Y.
Lim to affix their respective signatures thereon.
SPECIAL PROCEEDINGS/Rule 72 41 of 42
It is settled that a corporation is clothed with personality separate
and distinct from that of the persons composing it. It may not
generally be held liable for that of the persons composing it. It may
not be held liable for the personal indebtedness of its stockholders
or those of the entities connected with it.28
Rudimentary is the rule that a corporation is invested by law with a
personality distinct and separate from its stockholders or members.
In the same vein, a corporation by legal fiction and convenience is an
entity shielded by a protective mantle and imbued by law with a
character alien to the persons comprising it.
Nonetheless, the shield is not at all times invincible. Thus, in FIRST
PHILIPPINE INTERNATIONAL BANK vs. COURT OF APPEALS29 , We
enunciated:
. . . When the fiction is urged as a means of perpetrating a
fraud or an illegal act or as a vehicle for the evasion of an
existing obligation, the circumvention of statutes, the
achievement or perfection of a monopoly or generally the
perpetration of knavery or crime, the veil with which the
law covers and isolates the corporation from the members
or stockholders who compose it will be lifted to allow for
its consideration merely as an aggregation of individuals. .
..
Piercing the veil of corporate entity requires the court to see
through the protective shroud which exempts its stockholders from
liabilities that ordinarily, they could be subject to, or distinguishes
one corporation from a seemingly separate one, were it not for the
existing corporate fiction.30
The corporate mask may be lifted and the corporate veil may be
pierced when a corporation is just but the alter ego of a person or of
another corporation. Where badges of fraud exist, where public
convenience is defeated; where a wrong is sought to be justified
thereby, the corporate fiction or the notion of legal entity should
come to naught.31
Further, the test in determining the applicability of the doctrine of
piercing the veil of corporate fiction is as follows: 1) Control, not
mere majority or complete stock control, but complete domination,
not only of finances but of policy and business practice in respect to
the transaction attacked so that the corporate entity as to this
transaction had at the time no separate mind, will or existence of its
own; (2) Such control must have been used by the defendant to
commit fraud or wrong, to perpetuate the violation of a statutory or
other positive legal duty, or dishonest and unjust act in
contravention of plaintiffs legal right; and (3) The aforesaid control
and breach of duty must proximately cause the injury or unjust loss
complained of. The absence of any of these elements prevent
"piercing the corporate veil".32
Mere ownership by a single stockholder or by another corporation
of all or nearly all of the capital stock of a corporation is not of itself
a sufficient reason for disregarding the fiction of separate corporate
personalities.33
Moreover, to disregard the separate juridical personality of a
corporation, the wrong-doing must be clearly and convincingly
established. It cannot be presumed.34
 SPECIAL PROCEEDINGS/Rule 72 42 of 42
Granting arguendo that the Regional Trial Court in this case was not
merely acting in a limited capacity as a probate court, petitioner
nonetheless failed to adduce competent evidence that would have
justified the court to impale the veil of corporate fiction. Truly, the
reliance reposed by petitioner on the affidavits executed by Teresa
Lim and Lani Wenceslao is unavailing considering that the
aforementioned documents possess no weighty probative value
pursuant to the hearsay rule. Besides it is imperative for us to stress
that such affidavits are inadmissible in evidence inasmuch as the
affiants were not at all presented during the course of the
proceedings in the lower court. To put it differently, for this Court to
uphold the admissibility of said documents would be to relegate
from Our duty to apply such basic rule of evidence in a manner
consistent with the law and jurisprudence.

Our pronouncement in PEOPLE BANK AND TRUST COMPANY

vs. LEONIDAS35 finds pertinence:

Affidavits are classified as hearsay evidence since they are

not generally prepared by the affiant but by another who
uses his own language in writing the affiant's statements,
which may thus be either omitted or misunderstood by
the one writing them. Moreover, the adverse party is
deprived of the opportunity to cross-examine the affiants.
For this reason, affidavits are generally rejected for being
hearsay, unless the affiant themselves are placed on the
witness stand to testify thereon.

As to the order36 of the lower court, dated 15 September 1995, the

Court of Appeals correctly observed that the Regional Trial Court,
Branch 93 acted without jurisdiction in issuing said order; The
probate court had no authority to demand the production of bank
accounts in the name of the private respondent corporations.

WHEREFORE, in view of the foregoing disquisitions, the instant

petition is hereby DISMISSED for lack of merit and the decision of
the Court of Appeals which nullified and set aside the orders issued
by the Regional Trial Court, Branch 93, acting as a probate court,
dated 04 July 1995 and 12 September 1995 is
AFFIRMED.1âwphi1.nêt

SO ORDERED.