Heirs of Pedro Escanlar v.
Court of Appeals Chuas were purchasers in bad faith; and that the court approval of the sale to the Chuas was subject to
281 SCRA 176
Facts: Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924 and 1938,
respectively. Nombre’s heirs include his nephews and grandnephews. Victoriana Cari-an was
succeeded by her late brother’s son, Gregorio Cari-an. The latter was declared as Victoriana’s heir in
the estate proceedings for Nombre and his wife. After Gregorio died in 1971, his wife, Generosa
Martinez, and children, Rodolfo, Carmen, Leonardo and Fredisminda, all surnamed Cari-an, were
also adjudged as heirs by representation to Victoriana’s estate. Leonardo Cari-an passed away,
leaving his widow, Nelly Chua vda. de Cari-an and minor son Leonell, as his heirs.
Two parcels of land, denominated as Lot No. 1616 and 1617 of the Kabankalan Cadastre,
respectively, formed part of the estate of Nombre and Cari-an.
Gregorio Cari-an’s heirs, herein collectively referred to as private respondents Cari-an,
executed the Deed of Sale of Rights, Interests and Participation the one-half (1/2) portion pro-indiviso
of Lots Nos. 1616 and 1617 (Fishpond), of the Kabankalan Cadastre which is pertaining to the one-
half (1/2) portion pro-indiviso of the late Victoriana Cari-an unto and in favor of the Vendees Pedro
Escanlar and Francisco Holgado who were concurrently the lessees of the lots referred to above. Said
contract of sale shall be effective only upon the approval of the court.
Petitioners were unable to pay the Cari-an heirs’ individual shares, amounting to P55,000.00
each, by the due date. However, said heirs received at least 12 installments from petitioners. Rodolfo
Cari-an was fully paid. Generosa Martinez, Carmen Cari-an and Fredisminda Cari-an were likewise
fully compensated for their individual shares, per receipts given in evidence.
Being former lessees, petitioners continued in possession of Lot Nos. 1616 and 1617.
Interestingly, they continued to pay rent based on their lease contract. Petitioners moved to intervene
in the probate proceedings of Nombre and Cari-an as the buyers of private respondent Cari-an’s share
in Lot Nos. 1616 and 1617. Petitioners’ motion for approval of the sale before the same court, was
opposed by private respondents Cari-an.
The probate court approved a motion filed by the heirs of Cari-an and Nombre to sell their
respective shares in the estate. Private respondents Cari-an, in addition to some heirs of Guillermo
Nombre, sold their shares in eight parcels of land including Lot Nos. 1616 and 1617 to the spouses
Ney Sarrosa Chua and Paquito Chua. One week later, the vendor-heirs, including private respondents
Cari-an, filed a motion for approval of sale of hereditary rights, i.e. the sale made to the Chuas.
Private respondents Cari-an instituted this case for cancellation of sale against petitioners
(Escanlar and Holgado) they complained of petitioners’ failure to pay the balance of the purchase
price by May 31, 1979 and alleged that they only received a total of P132,551.00 in cash and goods.
Petitioners replied that the Cari-ans, having been paid, had no right to resell the subject lots; that the
their existing claim over said properties.
Petitioners Escanlar and Holgado also sold their rights and interests in the subject parcels of
land (Lot Nos. 1616 and 1617) to Edwin Jayme for P735,000.00 and turned over possession of both
lots to the latter. The Jaymes in turn, were included in the civil case as fourth-party defendants. The
certificates of title over the eight lots sold by the heirs of Nombre and Cari-an were later issued in the
name of respondents Ney Sarrosa Chua and Paquito Chua.
The Regional Trial Court ruling:
The probate court concluded that since all the properties of the estate were disposed of or sold by the
declared heirs of both spouses, the case is considered terminated and the intestate estate of Guillermo
Nombre and Victoriana Cari-an is closed. The court held:
Since the nature of the proceedings in this case is summary, this Court, being a Probate
Court, has no jurisdiction to pass upon the validity or invalidity of the sale of rights of the
declared heirs of Guillermo Nombre and Victoriana Cari-an to third parties. This issue must be
raised in another action where it can be properly ventilated and resolved. x x x Having
determined, after exhausted (sic) and lengthy hearings, the rightful heirs of Guillermo Nombre and
Victoriana Cari-an, the Court found out that the second issue has become moot and academic
considering that there are no more properties left to be partitioned among the declared heirs as that
had long ago been disposed of by the declared heirs x x x.” (Underscoring supplied)
The Deed of Sale executed by the heirs of Nombre and Cari-an in favor of Paquito and Ney
Chua, which was approved by the probate court, was upheld.
Petitioners raised the case to the Court of Appeals but the court affirmed the decision of the
trial court and held that the questioned deed of sale of rights, interests and participation is a contract
to sell because it shall become effective only upon approval by the probate court and upon full
payment of the purchase price.
Petitioners’ motion for reconsideration was denied by respondent court. Hence, this petition.
Issue: Are petitioners Escanlar and Holgado correct in saying that the sale to Chuas were null and
void because the court’s approval is necessary?
Ruling: NO.
There has arisen here confusion in the concepts of validity and the efficacy of a contract.
Under Art. 1318 of the Civil Code, the essential requisites of a contract are: consent of the contracting
parties; object certain which is the subject matter of the contract and cause of the obligation which is
established. Absent one of the above, no contract can arise. Conversely, where all are present, the
result is a valid contract. However, some parties introduce various kinds of restrictions or modalities,
the lack of which will not, however, affect the validity of the contract.

In the instant case, the Deed of Sale, complying as it does with the essential requisites, is a
valid one. However, it did not bear the stamp of approval of the court. This notwithstanding, the
contract’s validity was not affected for in the words of the stipulation, “ . . . this Contract of Sale of
rights, interests and participations shall become effective only upon the approval by the Honorable
Court . . .” In other words, only the effectivity and not the validity of the contract is affected.

Then, too, petitioners are correct in saying that the need for approval by the probate court
exists only where specific properties of the estate are sold and not when only ideal and indivisible
shares of an heir are disposed of.

In the case of Dillena v. Court of Appeals, the Court declared that it is within the jurisdiction
of the probate court to approve the sale of properties of a deceased person by his prospective heirs
before final adjudication.It is settled that court approval is necessary for the validity of any
disposition of the decedent’s estate. However, reference to judicial approval cannot adversely affect
the substantive rights of the heirs to dispose of their ideal share in the co-heirship and/or co-
ownership among the heirs.It must be recalled that during the period of indivision of a decedent’s
estate, each heir, being a co-owner, has full ownership of his part and may therefore alienate it. But
the effect of the alienation with respect to the co-owners shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.

From the foregoing, it is clear that hereditary rights in an estate can be validly sold without
need of court approval and that when private respondents Cari-an sold their rights, interests and
participation in Lot Nos. 1616 and 1617, they could legally sell the same without the approval of the
probate court.

Having provided the obstacle and the justification for the stipulated approval not to be
granted, private respondents Cari-an should not be allowed to cancel their first transaction with
petitioners because of lack of approval by the probate court, which lack is of their own making.