Remedial Law Review 2 || Rule 72-91: Settlement of Estate and Escheats

G.R. No. 128781 August 6, 2002

TERESITA N. DE LEON, ZENAIDA C. NICOLAS and the HEIRS OF ANTONIO NICOLAS,petitioners,vs. HON. COURT OF APPEALS, HON. PABLO P. INVENTOR and RAMON NICOLAS,respondents.

AUSTRIA-MARTINEZ,J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court which prays that the Decision dated February 28, 1997 and the Resolution dated April 3, 1997 issued by the Court of Appeals in CA-G.R. SP No. 42958,1be set aside; and, that another judgment be entered ordering the Presiding Judge of Branch 123 of the Regional Trial Court of Caloocan City to give due course to petitioners notice of appeal, to approve their record on appeal and to elevate the records of Sp. Proc. No. C-1679 to respondent appellate court for further proceedings.

The factual background:

Herein petitioner Teresita N. de Leon was appointed administratrix of the estate of Rafael C. Nicolas in Sp. Proc. No. C-1679, entitled, "In the Matter of the Intestate Estate of Rafael C. Nicolas". Said case was subsequently consolidated with Sp. Proc No. C-18102and Civil Case No. C-17407.3Deceased spouses Rafael and Salud Nicolas were the parents of petitioner Teresita N. de Leon, Estrellita N. Vizconde, Antonio Nicolas (deceased husband of petitioner Zenaida Nicolas and predecessor of the petitioners Heirs of Antonio Nicolas), Ramon Nicolas and Roberto Nicolas.

On September 19, 1994, private respondent Ramon G. Nicolas, an oppositorapplicant in the intestate proceedings, filed a "Motion for Collation," claiming that deceased Rafael Nicolas, during his lifetime, had given the following real properties to his children by gratuitous title and that administratrix-petitioner Teresita failed to include the same in the inventory of the estate of the decedent:

"1. Title No. T-36734 located at Polo, Bulacan with an area of 14,119 sq. m. distributed as follows:

1.1 10,110 sq. m. given to daughter Estrellita N. Visconde

1.2 4,009 sq. m. given to son Antonio Nicolas

2. Title No. T-40333 located at Polo, Bulacan with an area of 1,000 sq. m. given to son Antonio Nicolas

3. Title No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. given to daughter Teresita N. de Leon (herein petitioner)

4. Title No. T-36987 located at Polo, Bulacan with an area of 283 sq. m. given to son Antonio Nicolas

5. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. given to daughter Teresita N. de Leon

6. T-68554 located at Caloocan City with an area of 690 sq. m. given to son Ramon (Oppositor-Applicant herein)

7. T-10907 located at Caloocan City with an area of 310 sq. m. given to son Ramon but was somehow transferred to Antonio Nicolas, and the property is now titled in the name of the latters widow, Zenaida Carlos Nicolas."

x x x x x x x x x."4On September 27, 1994, the RTC issued an Order directing Ramon "to submit pertinent documents relative to the transfer of the properties from the registered owners during their lifetime for proper determination of the court if such properties should be collated, and set it for hearing with notice to the present registered owners to show cause why their properties may not be included in the collation of properties."5On October 10, 1994, respondent Ramon filed an Amended Motion for Collation specifying the properties to be collated and attaching to said motion, the documents in support thereof, to wit:

"3. A more complete list of the properties to be collated is as follows:

1. Title No. T-36734 located at Polo, Bulacan with an area of 14,119 sq. m., xerox copy hereto attached as Annex "A", distributed as follows:

1.1 10,110 sq. m. given to daughter Estrellita N. Visconde, under TCT No. V-554 of Valenzuela Bulacan (Annex "B"), and later sold by Estrellita to Amelia Lim Sy for P3,405,612.00 and the Deed of Sale hereto attached as Annex "B-1";

"1.2 4,009 sq. m. given to son Antonio Nicolas, xerox copy hereto attached as Annex "C";

2. Two lots, covered by TCT No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. and TCT No. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. "given to daughter Teresita N. de Leon by a Deed of Sale, xerox copies are hereto attached as Annex "D", "D-1" and "D-2";

The 4,000 sq. m. lot was sold by Petitioner Teresita for the amount of P1,888,000.00, xerox copy of the Deed of Sale is hereto attached as Annex "D-3";

4. Son Antonio received additional properties under a Deed of Sale, hereto attached as Annex "E", which are those covered by TCT No. T-36987 located at Polo, Bulacan with an area of 283 sq. m.; TCT No. T-40333 located at Polo, Bulacan with an area of 1,000 sq. m. and TCT No. T-10907 located at Caloocan City with an area of 310 sq. m., xerox copies hereto attached as Annexes "E-1", "E-2" and "E-3";

The lot with an area of 310 sq. m. is supposedly earmarked for Oppositor-applicant Ramon but was somehow included in the Deed of Sale to son Antonio, and the property is now titled in the name of the latters widow, Zenaida Carlos Nicolas;

5. TCT No. T-68554 located at Caloocan City with an area of 690 sq. m. where the ancestral home is presently located;

6. Son Antonio received another property with an area of 1,876 sq. m. and sold for P850,000.00, hereto attached as Annex "F";

7. Son Antonio received another property with an area of 1,501 sq. m. and sold for P200,000.00, hereto attached as Annex "G";

x x x x x x x x x."6A comparison with the original motion for collation reveals that the amended motion refers to the same real properties enumerated in the original except Nos. 6 and 7 above which are not found in the original motion.

On November 11, 1994, the RTC issued an Order, to wit:

"Acting on the Amended Motion for Collation filed by oppositor-applicant Ramon G. Nicolas and the comment thereto filed by petitioner-administratrix, the Court finds the following properties to be collated to the estate properties under present administration, to wit:

(1). 4,009 sq. m. given to son Antonio Nicolas described in paragraph 1.2 of the Amended Motion For Collation, marked as Annex "C"; (the xerox copy of the transfer certificate of title in the name of Antonio Nicolas did not state "the number and the technical description of the property. The administratrix should get hold of a certified copy of the title of Antonio Nicolas about subject property;

(2). Two lots, covered by TCT No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. and TCT No. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. given to daughter Teresita N. de Leon by a Deed of Sale;

(3). The property covered by TCT No. T-36987 located at Polo, Bulacan, with an area of 283 sq. m.; the property covered by TCT No. T-40333 located at Polo, Bulacan, with an area of 1,000 sq. m. and another property covered by TCT No. T-10907 located at Caloocan City with an area of 310 sq. m. xerox copies of which are attached to the Amended Motion For Collation, marked as Annexes "E1", "E-2" and "E-3";

(4). The lot with an area of 310 sq. m. given to son Antonio Nicolas which property is now titled in the name of the latters widow, Zenaida Carlos Nicolas.

"Accordingly, the Administratrix is hereby ordered to include the foregoing properties which were received from the decedent for collation in the instant probate proceedings.

"SO ORDERED."7We note that only those lots described under paragraphs 3.1.2, 3.2 and 4 of the "Amended Motion for Collation" were ordered included for collation.1wphi1.ntOn November 18, 1994, petitioner Teresita N. de Leon filed a Motion for Reconsideration alleging that the properties subject of the Order "were already titled in their names years ago"8and that titles may not be collaterally attacked in a motion for collation. On February 23, 1995, the RTC issued an Order denying said motion, ruling that it is within the jurisdiction of the court to determine whether titled properties should be collated,9citing Section 2, Rule 90 of the Rules of Court which provides that the final order of the court concerning questions as to advancements made shall be binding on the person raising the question and on the heir.

Petitioner Teresita N. de Leon filed a Motion for Reconsideration of the Order dated February 23, 199510which respondent opposed.11On July 18, 1995, the RTC issued an Order, pertinent portions of which read:

"x x x Foremost to be resolved is the issue of collation of the properties of the deceased Rafael Nicolas which were disposed by the latter long before his death. The oppositor-applicant Ramon Nicolas should prove to the satisfaction of the Court whether the properties disposed of by the late Rafael Nicolas before the latters death was gratuitous or for valuable consideration. The Court believes that he or she who asserts should prove whether the disposition of the properties was gratuitously made or for valuable consideration.

The Court has already set for hearing on July 21, 1995, at 8:30 a.m., the reception and/or presentation of evidence in the issue of collated properties disposed before the death of Rafael Nicolas."12On November 4, 1996, the RTC removed petitioner from her position as administratrix on ground of conflict of interest considering her claim that she paid valuable consideration for the subject properties acquired by her from their deceased father and therefore the same should not be included in the collation;13and, ordered the hearing on the collation of properties covered by TCT No. T-V-1211 and T-V-1210 only.14On November 28, 1996, acting on the impression that the collation of the real properties enumerated in the Order dated November 11, 1994 is maintained by the RTC, petitioner Teresita N. de Leon filed a Motion for Reconsideration praying that her appointment as administratrix be maintained; and that the properties covered by TCT Nos. T-36989, T-33658, T-36987, T-40333, T-10907 and a portion of TCT No. T-13206 described as Lot 4-A with 4,009 square meters be declared and decreed as the exclusive properties of the registered owners mentioned therein and not subject to collation.15The RTC denied said motion in its Order dated December 23, 1996.16Petitioners Teresita N. de Leon, Zenaida Nicolas (the surviving spouse of Antonio Nicolas) and the Heirs of Antonio Nicolas filed with the Court of Appeals a petition for certiorari, prohibition and mandamus with prayer for a temporary restraining order and writ of preliminary injunction claiming that:

"I

"RESPONDENT JUDGE HAS ACTED IN EXCESS OF HIS JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION WHEN WITHOUT GIVING PETITIONERS OPPORTUNITY TO VENTILATE THEIR APPEAL HE INSISTED ON HEARING THE MATTERS ON THE APPOINTMENT OF A REGULAR ADMINISTRATOR AND COLLATION ON DECEMBER 24, 1996 AND RESETTING ITS CONTINUATION TO JANUARY 21 and 28, 1997 INSPITE OF THE PENDENCY OF THE NOTICE OF APPEAL AND/OR RE-AFFIRMATION OF THE NOTICE OF APPEAL FROM WHICH ACTS THERE IS NO APPEAL NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW."

"II

"RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION WHEN HE DID NOT INCLUDE IN HIS ORDER-ANNEX J THE HEARING ON THE FINAL DETERMINATION OF TCT NOS. T-36734, T-36989, T-33658, T-36987, T-40333 and T-10907 (WHETHER THEY ARE STILL PART OF THE ESTATE OR SHOULD BE EXCLUDED FROM THE INVENTORY/ESTATE) THEREBY ASSUMING WITHOUT ANY BASIS THAT THESE PROPERTIES TO BE STILL PART OF THE ESTATE OF RAFAEL NICOLAS WHEN THEY ARE NOT BECAUSE THEY HAVE BEEN SOLD WAY BACK IN 1979 FOR VALUABLE CONSIDERATIONS TO PETITIONER TERESITA N. DE LEON AND ANTONIO NICOLAS HUSBAND OF PETITIONER ZENAIDA NICOLAS."17After private respondent Ramon had filed his comment, and petitioners, their reply, and after hearing the oral arguments of the parties, the Special Fourth Division of the Court of Appeals found the petition devoid of merit, ruling that the Order dated November 11, 1994 directing the inclusion of the properties therein enumerated in the estate of the deceased Rafael Nicolas had already become final for failure of petitioners to appeal from the order of collation; that the appeal of the petitioner from the Orders dated November 4, 1996 and December 3, 1996 removing petitioner as administratrix is timely appealed; and, observing that the notice of appeal and record on appeal appear to be unacted upon by the RTC, the appellate court resolved:

"WHEREFORE, while finding no grave abuse of discretion on the part of respondent Judge, he is hereby ORDERED to act on petitioners appeal on the matter of the removal of petitioner as administratrix.

SO ORDERED."18Hence, herein petition anchored on the following assignments of error:

"FIRST ASSIGNMENT OF ERROR"RESPONDENT HONORABLE COURT ERRED WHEN IT DECLARED IN THE QUESTIONED DECISION THAT THE ORDER OF THE COURTA QUODATED NOVEMBER 11, 1994 WAS FINAL.

"SECOND ASSIGNMENT OF ERROR

"RESPONDENT HONORABLE COURT ERRED WHEN IT DECLARED IN THE QUESTIONED RESOLUTION THAT THERE WAS NO COGENT OR COMPELLING REASON TO DISTURB THE QUESTIONED DECISION."19Petitioners claim that: private respondent never presented any document to prove that the properties transferred by their deceased parents to petitioners are by gratuitous title; private respondent never notified petitioner of any hearing on said documents to give them opportunity to show cause why their properties should not be collated; the assailed Order dated November 11, 1994 is arbitrary, capricious, whimsical, confiscatory, depriving them of due process; the said order is interlocutory in nature and therefore non-appealable; the properties acquired by petitioner Teresita N. de Leon and her deceased brother Antonio Nicolas, married to petitioner Zenaida C. Nicolas and their children, were sold to them as evidenced by public documents; and, the properties were already titled in their respective names or sold to third persons.

Private respondent contends that: due process has been afforded the petitioners when the RTC resolved the issue of collation of the subject properties after hearing; petitioner deliberately omitted certain material facts in the petition to mislead the Court because petitioners were actually given at least three (3) times the opportunity to ventilate and oppose the issue of collation; as stated by the appellate court in the Resolution promulgated on February 10, 1997, both parties affirmed that the RTC had proceeded to conduct hearings on January 21 and 28, 1997 as originally scheduled; presentation of evidence had been terminated and the twin issues of the appointment of a new administratrix and the collation of two (2) properties covered by TCT No. T-V-1210 and T-V-1211 were already submitted for resolution to the court below;20subject properties are collatable under Articles 1601 and 1071 of the Civil Code and Section 2 of Rule 90 of the Rules of Court and the ruling inGuinguing v. Abuton and Abuton, 48 Phil. 144; petitioner failed to present evidence that there was valuable consideration for these properties and failed to rebut the evidence that petitioners do not have the financial capability to pay for these properties as evidenced by the testimony of credible witnesses who are relatives of spouses decedents.

We find the petition partly meritorious.

Contrary to the finding of the Court of Appeals that the Order of November 11, 1994 had become final for failure of petitioners to appeal therefrom in due time, we hold that said Order is interlocutory in nature. Our pronouncement inGarcia v. Garciasupports this ruling:

"The court which acquires jurisdiction over the properties of a deceased person through the filing of the corresponding proceedings, has supervision and control over the said properties, and under the said power, it is its inherent duty to see that the inventory submitted by the administrator appointed by it contains all the properties, rights and credits which the law requires the administrator to set out in his inventory. In compliance with this duty the court has also inherent power to determine what properties, rights and credits of the deceased should be included in or excluded from the inventory.Should an heir or person interested in the properties of a deceased person duly call the courts attention to the fact that certain properties, rights or credits have been left out in the inventory, it is likewise the courts duty to hear the observations, with power to determine if such observations should be attended to or not and if the properties referred to therein belongprima facieto the intestate, but no such determination is final and ultimate in nature as to the ownership of the said properties."21(Emphasis supplied)

A probate court, whether in a testate or intestate proceeding,22can only pass upon questions of title provisionally.23The rationale therefor and the proper recourse of the aggrieved party are expounded inJimenez v. Court of Appeals:

"The patent reason is the probate courts limited jurisdiction and the principle that questions of title or ownership, which result in inclusion or exclusion from the inventory of the property, can only be settled in a separate action.

"All that the said court could do as regards said properties is 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 a dispute as to the ownership, then the opposing parties and the administrator have to resort to an ordinary action for a final determination of the conflicting claims of title because the probate court cannot do so."24Further, InSanchez v. Court of Appeals, we held:

"[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 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."25Guided by the above jurisprudence, it is clear that the Court of Appeals committed an error in considering the assailed Order dated November 11, 1994 as final or binding upon the heirs or third persons who dispute the inclusion of certain properties in the intestate estate of the deceased Rafael Nicolas. Under the foregoing rulings of the Court, any aggrieved party, or a third person for that matter, may bring an ordinary action for a final determination of the conflicting claims.

Private respondents reliance on Section 2, Rule 90 of the Rules of Court, to wit:

"SEC. 2.Questions as to advancement to be determined. 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 question and on the heir."

in support of his claim that the assailed Order is a final order and therefore appealable and that due to petitioners failure to appeal in due time, they are now bound by said Order, is not feasible.

What seems to be a conflict between the above-quoted Rule and the aforediscussed jurisprudence that the Order in question is an interlocutory and not a final order is more apparent than real. This is because the questioned Order was erroneously referred to as an order of collation both by the RTC and the appellate court. For all intents and purposes, said Order is a mere order including the subject properties in the inventory of the estate of the decedent.

The Court held inValero Vda. de Rodriguez v. Court of Appeals26that the order of exclusion (or inclusion) is not a final order; that it is interlocutory in the sense that it did not settle once and for all the title to the subject lots; that the prevailing rule is that for the purpose of determining whether a certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which may be instituted by the parties.

In the Rodriguez case, the Court distinguished between an order of collation and an order of exclusion from or inclusion in the estates inventory, thus:

"We hold further that the dictum of the Court of Appeals and the probate court that the two disputed lots are not subject to collation was a supererogation and was not necessary to the disposition of the case which merely involved the issue of inclusion in, or exclusion from, the inventory of the testators estate. The issue of collation was not yet justiciable at that early stage of the testate proceeding. It is not necessary to mention in the order of exclusion the controversial matter of collation.

"Whether collation may exist with respect to the two lots and whether Mrs. Rustias Torrens titles thereto are indefeasible are matters that may be raised later or may not be raised at all. How those issues should be resolved, if and when they are raised, need not be touched upon in the adjudication of this appeal.

"The intestate and testate proceedings for the settlement of the estates of the deceased Valero spouses were consolidated, as ordered by the lower court on November 21, 1974, so that the conjugal estate of the deceased spouses may be properly liquidated, as contemplated in section 2, Rule 73 of the Rules of Court and Act No. 3176.

"We have examined theexpedientesof the two cases. We found that the proceedings have not yet reached the stage when the question of collation or advancement to an heir may be raised and decided. The numerous debts of the decedents are still being paid. The net remainder (remanente liquido) of their conjugal estate has not yet been determined. On the other hand, up to this time, no separate action has been brought by the appellants to nullify Mrs. Rustias Torrens titles to the disputed lots or to show that the sale was in reality a donation.

"In this appeal, it is not proper to pass upon the question of collation and to decide whether Mrs. Rustias titles to the disputed lots are questionable. The proceedings below have not reached the stage of partition and distribution when the legitimes of the compulsory heirs have to be determined."27In the light of the foregoing, Section 2, Rule 90 should be interpreted in the context of Section 1 of the same Rule, to wit:

"Section 1.When order for distribution of residue made. When the debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law, have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such person may demand and recover their respective shares from the executor or administrator, or any other person having the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributes, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs."

Based thereon, we find that what the parties and the lower courts have perceived to be as an Order of Collation is nothing more than an order of inclusion in the inventory of the estate which, as we have already discussed, is an interlocutory order. The motion for collation was filed with the probate court at the early stage of the intestate estate proceedings. We have examined the records of the case and we found no indication that the debts of the decedents spouses have been paid and the net remainder of the conjugal estate have already been determined, and the estates of the deceased spouses at the time filing of the motion for collation were ready for partition and distribution. In other words, the issue on collation is still premature.

And even if we consider,en arguendo, that said assailed Order is a collation order and a final order, still, the same would have no force and effect upon the parties. It is a hornbook doctrine that a final order is appealable. As such, the Order should have expressed therein clearly and distinctly the facts and the laws on which it is based as mandated by Section 14, Article VIII of the 1987 Constitution of the Republic of the Philippines, which provides:

"SEC. 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.

No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefore."

An examination of the subject Order as quoted earlier,28readily reveals that the presiding Judge failed to comply with the said constitutional mandate. The assailed Order did not state the reasons for ordering the collation of the properties enumerated therein. The Order simply directed the inclusion of certain real properties in the estate of the deceased. It did not declare that the properties enumerated therein were given to the children of the deceased gratuitously, despite the title in the childrens names or deeds of sale in their favor. Moreover, in his Comment, private respondent makes mention of the testimonies of his witnesses but these were not even mentioned in the Order of November 11, 1994. Petitioner would have been deprived of due process as they would be divested of the opportunity of being able to point out in a motion for reconsideration or on appeal, any errors of facts and/or law considering that there were no facts or laws cited in support of the assailed Order of collation. As a final Order, it is, on its face patently null and void. It could have never become final. A void judgment is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or declared inoperative by any tribunal in which effect is sought to be given to it.29For it to be considered as a valid final order, the RTC must then first rule and state in its order whether the properties covered by TCT Nos. T-36734, T-36989, T-33658, T-36987, T-40333, T-10907 and the 4,009 square meter lot were acquired by petitioners from the deceased parents of the parties by onerous or gratuitous title; and must specifically state in its order the reasons why it ordered the subject properties collated. It is only then that the order of collation may be the subject of a motion for reconsideration and/or appeal within the 15-day reglementary period. Until and unless the constitutional mandate is complied with, any appeal from said Order would have been premature.

Either way therefore, whether the Order in question is a final or interlocutory order, it is a reversible error on the part of the appellate court to rule that the so-called order of collation dated November 11, 1994 had already attained finality.

As to the prayer of petitioners that the RTC be ordered to give due course to their notice of appeal from the Orders dated November 4, 1996 and December 23, 1996 removing petitioner Teresita N. de Leon as administratrix of the estate of private parties deceased parents,30to approve their record on appeal31and to elevate the records of Special Proceeding No. C-1679 to the Court of Appeals It is not disputed by the parties that said Orders are appealable. In fact, the Court of Appeals had correctly directed the RTC to give due course to petitioners appeal and this is not assailed by the private respondent.

But, the approval or disapproval of the record on appeal is not a proper subject matter of the present petition for review on certiorari as it is not even a subject-matter in CA-G.R. SP No. 42958. Whether or not the record on appeal should be approved is a matter that is subject to the sound discretion of the RTC, provided that Sections 6 to 9, Rule 41 of the Rules of Court are observed by appellant.

Finally, the elevation of the records of Special Proceedings No. C-1679 to the Court of Appeals for the purpose of petitioners appeal from the order removing the administratrix is unnecessary where a record on appeal is allowed under the Rules of Court. The courta quoloses jurisdiction over the subject of the appeal upon the approval of the record on appeal and the expiration of the time to appeal of the other parties; but retains jurisdiction over the remaining subject matter not covered by the appeal.32WHEREFORE,the petition is partlyGRANTED. The assailed Decision dated February 28, 1997 and Resolution dated April 3, 1997 of the Court of Appeals areMODIFIED. The Order dated November 11, 1994 issued by the Regional Trial Court and all other orders of said court emanating from said Order which involve the properties enumerated therein are considered merely provisional or interlocutory, without prejudice to any of the heirs, administrator or approving parties to resort to an ordinary action for a final determination of the conflicting claims of title.

The Regional Trial Court of Caloocan City (Branch 123) is directed to immediately act, without further delay, on petitioners appeal from the Orders dated November 4, 1996 and December 23, 1996, subject to Sections 6 to 9, Rule 41 of the Rules of Court.1wphi1.ntNo costs.

SO ORDERED.

G.R. No. 150164 November 26, 2002GLORIOSA V. VALARAO,petitioner, vs. CONRADO C. PASCUAL and MANUEL C. DIAZ,1respondents.

D E C I S I O N

BELLOSILLO,J.:

FELICIDAD C. PASCUAL died at seventy-one (71) years, femme sole, leaving a substantial inheritance for her querulous collateral relatives who all appear disagreeable to any sensible partition of their windfall.

To divide the disputed estate are five (5) groups of legal heirs which include respondents Conrado C. Pascual, a brother of the deceased, and Manuel C. Diaz, a nephew, son of her sister Carmen P. Diaz, and petitioner Gloriosa V. Valarao who is the decedent's niece. The bloodlines marking the groups of heirs are: (a) the legitimate children of her late sister Leoncia P. Villanueva, including petitioner Gloriosa V. Valarao; (b) the legitimate children of her late sister Carmen P. Diaz including respondent Manuel C. Diaz; (c) the legitimate children of her late brother Macario Pascual; (d) the legitimate children of her late sister Milagros P. de Leon; and, (e) the decedent's surviving sister Augustia C. Pascual and brothers Leonardo C. Pascual and Conrado C. Pascual, the latter being one of respondents herein.

On 27 May 1998 petitioner Gloriosa V. Valarao initiated before the Regional Trial Court of Paraaque City special proceedings docketed as SP No. 98-061 for the issuance of letters of administration in her favor over the estate of Felicidad C. Pascual. On 29 September 1998 respondent Conrado C. Pascual and some of his co-heirs, including respondent Diaz, filed with the same probate court a petition for probate, docketed as SP No. 98-0124, of an alleged holographic will of Felicidad C. Pascual. The two (2) special proceedings were consolidated.

On 26 January 1999, by agreement of the parties in the proceedings a quo, petitioner Valarao and respondent Diaz were appointed joint administrators of the estate of Felicidad C. Pascual. On 8 February 2000, RTC-Br. 260 of Paraaque City rendered a Decision which dismissed SP No. 98-0124, denying probate of the alleged holographic will of the decedent and giving due course to the intestate settlement of the estate.2On 22 March 2000 respondent Pascual appealed the Decision to the Court of Appeals by notice of appeal.

On 2 May 2000, in view of the appeal taken from the disallowance of the holographic will, petitioner Valarao moved in the probate court for her appointment as special administratrix of the estate. On 9 May 2000 respondent Diaz also asked for his designation as special co-administrator of the estate alongside petitioner. On 10 May 2000 the motions were heard wherein petitioner opposed the request of respondent Diaz on the ground that he had allegedly neglected his previous assignment as co-administrator of the estate.

On 7 June 2000 the probate court issued an Order appointing petitioner Valarao as special administratrix based on this observation -

Weighing the pros and cons of the situation, considering the unanimity of choice by the heirs, of Mrs. Valarao as special administratrix, and the vigorous objection to Mr. Diaz as co-administrator, not to mention the fact that the heirs on the side of Mrs. Valarao represent a numerical majority of the legal heirs of the deceased, the Court believes that it will be to the best interest of the estate and the heirs themselves if Mrs. Gloriosa Valarao is appointed special administratrix.3On 29 June 2000 the probate court approved petitioner's bond ofP500,000.00, and on 6 July 2000 she took her oath of office as special administratrix.

On 19 July 2000 respondent Diaz moved for reconsideration of his rejection as special co-administrator of the estate. He contested the allegation of petitioner Valarao that he had been remiss in his duties as co-administrator. He cited as examples of his services the collection of rentals for properties included in the estate, the payment of estate taxes and the deposit of aboutP4,000,000.00 in a joint bank account held in trust for the estate by him and petitioner as co-administrators. Respondent Diaz further alleged that justice and equity demanded that his group of heirs be also represented in the management of the estate.

On the other hand, petitioner reiterated the alleged uncooperative conduct of respondent Diaz in discharging his tasks as co-administrator, and at the same time moved that he and his group of sympathetic heirs be compelled to surrender to her as special administratrix the books and records of a corporation where the estate owned substantial interests.

On 11 September 2000 the probate court denied the motion for reconsideration and ordered respondent Diaz and all the heirs to respect the authority of petitioner Valarao as special administratrix, especially by furnishing her with copies of documents pertinent to the properties comprising the estate. Anent the charges of nonfeasance in his tasks as co-administrator, the probate court found -

x x x [respondent] Diaz has not disputed these charges beyond making a mere general denial, stating that he had been diligent and regular in the performance of his duties when he was still the estates co-administrator. Considering the allegations of both Manuel Diaz and Gloriosa Valarao and assessing the circumstances surrounding the case, this Court is of the considered view that the best interest of the estate will be best protected if only one administrator is appointed for, in that way, conflicting interests which might work to the detriment of the estate may be avoided.4On 25 September 2000 respondents Pascual and Diaz along with other heirs moved for reconsideration of the 11 September 2000 Order on the ground that petitioner Valarao as special administratrix was not authorized to dispossess the heirs of their rightful custody of properties in the absence of proof that the same properties were being dissipated by them, and that the possessory right of petitioner as special administratrix had already been exercised by her "constructively" when the heirs on her side took possession of the estate supposedly in her behalf. Respondents further alleged that the motion was pending resolution by the probate court.

On 10 October 2000, while the motion for reconsideration was pending resolution, respondents filed a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure with the Court of Appeals, docketed as CA-G.R. SP No. 61193, to reverse and set aside the Orders dated 7 June 2000 and 11 September 2000 insofar as the probate court appointed only petitioner Valarao as special administratrix, and to order the appointment of respondent Diaz as special co-administrator of the estate.

On 15 May 2001 the probate court upon motion cited respondents for indirect contempt of court for refusing to turn over to petitioner Valarao documents covering properties belonging to the estate and ordered them arrested until compliance with the order to hand over the documents. The warrant of arrest was subsequently lifted by the probate court after respondents promised to deliver the documents.

On 13 June 2001 respondents filed their supplemental petition for certiorari in CA-G.R. SP No. 61193 seeking permanent injunction against the enforcement of the Orders of 7 June 2000 and 11 September 2000 also as they mandated the turn over of documents to petitioner Valarao.

On 28 September 2001 the Court of Appeals promulgated its Decision reversing and setting aside the Order of 7 June 2000 of RTC-Br. 260, Paraaque City, appointing petitioner Valarao as lone special administratrix although the fallo of the CA Decision was silent on whether the probate court should also appoint respondent Diaz as special co-administrator of the estate of Felicidad C. Pascual.5The appellate court explained that since the heirs were divided into two (2) scrappy factions, justice and equity demanded that both factions be represented in the management of the estate of the deceased, citing Matias v. Gonzales,6Corona v. Court of Appeals,7and Vda. de Dayrit v. Ramolete.8Hence, this petition for review on certiorari.

Petitioner Valarao claims that the probate court did not commit grave abuse of discretion when it rejected the application of respondent Diaz for appointment as special co-administrator of the estate because of his indubitable uncooperative attitude towards effective administration of the estate. She also argues that diverse interests among different groups of heirs do not give each of them the absolute right to secure the appointment of a co-administrator from within their ranks since it remains the discretion of the probate court to designate the administrators of an estate. She further asserts that as special administratrix of the estate she possesses the authority to demand the surrender of documents pertinent to the estate insofar as necessary to fulfill her mandate.

On 26 February 2002 respondents filed their Comment on the petition alleging the absence of special reasons to justify a review of the assailed Decision and of the partiality of the trial judge in favor of petitioner.

We grant the petition. To begin with, the probate court had ample jurisdiction to appoint petitioner Valarao as special administratrix and to assist her in the discharge of her functions, even after respondents had filed a notice of appeal from the Decision disallowing probate of the holographic will of Felicidad C. Pascual. This is because the appeal is one where multiple appeals are allowed and a record on appeal is required.9In this mode of appeal, the probate court loses jurisdiction only over the subject matter of the appeal but retains jurisdiction over the special proceeding from which the appeal was taken for purposes of further remedies which the parties may avail of, including the appointment of a special administrator.10Moreover, there is nothing whimsical nor capricious in the action of the probate court not to appoint respondent Diaz as special co-administrator since the Orders of 7 June 2000 and 11 September 2000 clearly stipulate the grounds for the rejection. The records also manifest that the probate court weighed the evidence of the applicants for special administrator before concluding not to designate respondent Diaz because the latter was found to have been remiss in his previous duty as co-administrator of the estate in the early part of his administration. Verily, the process of decision-making observed by the probate court evinces reason, equity, justice and legal principle unmistakably opposite the core of abusive discretion correctible by the special civil action of certiorari under which the appellate court was bound to act. Finally, the extraordinary writ does not operate to reverse factual findings where evidence was assessed in the ordinary course of the proceedings since perceived errors in the appreciation of evidence do not embroil jurisdictional issues.11Respondents cannot take comfort in the cases of Matias v. Gonzales,12Corona v. Court of Appeals13and Vda. de Dayrit v. Ramolete,14cited in the assailed Decision. Contrary to their claim, these cases do not establish an absolute right demandable from the probate court to appoint special co-administrators who would represent the respective interests of squabbling heirs. Rather, the cases constitute precedents for the authority of the probate court to designate not just one but also two or more special co-administrators for a single estate. Now whether the probate court exercises such prerogative when the heirs are fighting among themselves is a matter left entirely to its sound discretion.15Furthermore, the cases of Matias, Corona and Vda. de Dayrit hinge upon factual circumstances other than the incompatible interests of the heirs which are glaringly absent from the instant case. In Matias this Court ordered the appointment of a special co-administrator because of the applicant's status as the universal heir and executrix designated in the will, which we considered to be a "special interest" deserving protection during the pendency of the appeal. Quite significantly, since the lower court in Matias had already deemed it best to appoint more than one special administrator, we found grave abuse of discretion in the act of the lower court in ignoring the applicant's distinctive status in the selection of another special administrator.

In Corona we gave "highest consideration" to the "executrix's choice of Special Administrator, considering her own inability to serve and the wide latitude of discretion given her by the testatrix in her will,"16for this Court to compel her appointment as special co-administrator. It is also manifest from the decision in Corona that the presence of conflicting interests among the heirs therein was not per se the key factor in the designation of a second special administrator as this fact was taken into account only to disregard or, in the words of Corona, to "overshadow" the objections to the appointment on grounds of "impracticality and lack of kinship."17Finally in Vda. de Dayrit we justified the designation of the wife of the decedent as special co-administrator because it was "our considered opinion that inasmuch as petitioner-wife owns one-half of the conjugal properties and that she, too, is a compulsory heir of her husband, to deprive her of any hand in the administration of the estate prior to the probate of the will would be unfair to her proprietary interests."18The special status of a surviving spouse in the special administration of an estate was also emphasized in Fule v. Court of Appeals19where we held that the widow would have more interest than any other next of kin in the proper administration of the entire estate since she possesses not only the right of succession over a portion of the exclusive property of the decedent but also a share in the conjugal partnership for which the good or bad administration of the estate may affect not just the fruits but more critically the naked ownership thereof. And in Gabriel v. Court of Appeals20we recognized the distinctive status of a surviving spouse applying as regular administrator of the deceased spouse's estate when we counseled the probate court that "there must be a very strong case to justify the exclusion of the widow from the administration."

Clearly, the selection of a special co-administrator in Matias, Corona and Vda. de Dayrit was based upon the independent proprietary interests and moral circumstances of the appointee that were not necessarily related to the demand for representation being repeatedly urged by respondents.

We also rule that the probate court in issuing the Order of 11 September 2000 did not err in commanding respondents to turn over all documents pertinent to the estate under special administration and in enforcing such order by means of contempt of court. The powers of a special administrator are plainly delineated in Sec. 2, Rule 80 of the Rules of Court, vesting upon him the authority to "take possession and charge of the goods, chattels, rights, credits and estate of the deceased and preserve the same for the executor or administrator afterwards appointed x x x x"

Contrary to respondents' assertion, there is nothing in Sec. 2 requiring a special administrator to take possession of the estate only upon a prior finding that the heirs have been wasting properties of the estate which are in their possession. The law explicitly authorizes him to take possession of the properties in whatever state they are, provided he does so to preserve them for the regular administrator appointed afterwards. Clearly, the special administrator enjoys not merely subsidiary possession to be carried out when the heirs dissipate the properties but the primary and independent discretion of keeping them so they may be preserved for regular administration.

Moreover, respondents cannot deprive the special administratrix of access to and custody of essential documents by arguing that their possession thereof allegedly in behalf of petitioner is already the equivalent of "constructive possession" which constitutes full compliance with the possessory powers of petitioner as special administratrix under Sec. 2 of Rule 80. Contrary to what respondents seem to understand by "constructive possession," the right of possession whether characterized as actual or constructive invariably empowers the special administrator with the discretion at any time to exercise dominion or control over the properties and documents comprising the estate.21Hence, even if we are to give credence to the theory that petitioner also has "constructive possession" of the documents alongside respondents' actual possession thereof, respondents would nonetheless be under the obligation to turn them over whenever the special administratrix requires their actual delivery.

In any event, as we have held in De Guzman v. Guadiz,22the partisan possession exercised by litigants over properties of the estate differs greatly from the neutral possession of a special administrator under the Rules of Court. Quite obviously, with this distinction, the possession of portions of the estate by respondents as heirs necessarily excludes the possessory right over the same properties inherent in the mandate of a special administrator.

The language of Sec. 2, Rule 80 of the Rules of Court, also unmistakably gives a special administrator the discretion to take actual custody of the properties of the estate for the purpose of preserving them for regular administration. This appreciation of the powers of a special administrator is fairly evident from the combination of the words "possession" and "charge" in Sec. 2, so much so that even if we have to concede that "possession" means only the fictitious custody of a thing as respondents suggest, the word "charge," i.e., the commitment of a thing to the care and custody of another,23would emphasize the requirement of actual possession of the properties of the estate whenever vital according to the discretion of the special administrator. When taken together, the words "possession" and "charge" serve to highlight the fact that a special administrator must be able to subject the properties of the estate to his control and management when in his good judgment such action is needed. Indeed, this understanding of the possessory right of a special administrator is indispensable in fulfilling his mandate to preserve the properties of the estate until a regular administrator is designated, for fiction and illusion cannot stand in place of the concrete and tangible exercise of possession if he is to function effectively.

Finally, respondents cannot disobey the reasonable exercise of the authority of a special administrator on the dubious ground that the order appointing petitioner Valarao as special administratrix had not in the meantime become final and executory because of a pending motion for reconsideration filed by them. The fallacy of this reasoning is apparent, for an interlocutory order is not instantly appealable and therefore there is no period nor action to suspend or interrupt by a motion for reconsideration;24it is even well settled that a special civil action for certiorari does not suspend the immediate enforceability of an interlocutory order absent a temporary restraining order or an injunction.25In the same manner, the appointment of a special administrator being an interlocutory order is not interrupted by a motion for reconsideration and thus must be obeyed as the proceedings in the probate court progress.26The ruling in PAFLU v. Salvador27reiterated in Republic Commodities Corporation v. Oca28is enlightening -

[The] refusal to accord due respect and yield obedience to what a court or administrative tribunal ordains is fraught with such grave consequences x x x x If such a conduct were not condemned, some other group or groups emboldened by the absence of any reproof or disapproval may conduct themselves similarly. The injury to the rule of law may well-nigh be irreparable x x x x When judicial or quasi-judicial tribunals speak, what they decree must be obeyed; what they ordain must be followed. A party dissatisfied may ask for reconsideration and, if denied, may go on to higher tribunal. As long as the orders stand unmodified, however, they must, even if susceptible to well-founded doubts on jurisdictional grounds be faithfully complied with.

Needless to state, the special administratrix appointed by the probate court must be constantly aware that she is not a representative nor the agent of the parties suggesting the appointment but the administrator in charge of the estate and in fact an officer of the court. As an officer of the court, she is subject to the supervision and control of the probate court and is expected to work for the best interests of the entire estate, especially its smooth administration and earliest settlement.29Whatever differences that may exist between the heirs shall be ironed out fairly and objectively for the attainment of that end. She ought to be sensitive to her position as special administratrix and neutral possessor which under the Rules of Court is both fiduciary and temporary in character upon which accountability attaches in favor of the estate as well as the other heirs, especially respondents Pascual and Diaz in light of her alleged rivalry with them.

WHEREFORE, the instant Petition for Review is GRANTED. The Decision of the Court of Appeals dated 28 September 2001 in CA-G.R. SP No. 61193, "Conrado C. Pascual and Manuel P. Diaz v. The Hon. RTC of Paraaque City, Branch 260, and Gloriosa V. Valarao," is REVERSED and SET ASIDE. The Orders dated 7 June 2000 and 11 September 2000 of the Regional Trial Court, Branch 260, of Paraaque City, rejecting the application of respondent Manuel C. Diaz30as special co-administrator of the estate of Felicidad C. Pascual and ordering respondents Conrado C. Pascual and Manuel C. Diaz and all other heirs who may have in their possession or custody papers, records, certificates of titles over parcels of land, etc., pertaining to properties of the estate of the late Felicidad C. Pascual to turn over such papers, records and titles to petitioner Gloriosa V. Valarao as special administratrix thereof, are REINSTATED and AFFIRMED. No costs.

SO ORDERED.

G.R. No. 149926 February 23, 2005UNION BANK OF THE PHILIPPINES,petitioner,vs. EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA,respondents.

D E C I S I O N

CALLEJO, SR.,J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the reversal of the Decision1of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the dismissal2of the petitioners complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.

The antecedent facts are as follows:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered into a loan agreement3in the amount ofP128,000.00. The amount was intended for the payment of the purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed a promissory note in favor of the FCCC, the principal sum payable in five equal annual amortizations ofP43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim entered into another loan agreement,4this time in the amount ofP123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and his son, Edmund, executed a promissory note for the said amount in favor of the FCCC. Aside from such promissory note, they also signed a Continuing Guaranty Agreement5for the loan dated December 13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will.6Subsequently in March 1981, testate proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs, was appointed as the special administrator of the estate of the decedent.7During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister Florence Santibaez Ariola, executed a Joint Agreement8dated July 22, 1981, wherein they agreed to divide between themselves and take possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor for Florence. Each of them was to assume the indebtedness of their late father to FCCC, corresponding to the tractor respectively taken by them.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities9was executed by and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, among others, assigned all its assets and liabilities to Union Savings and Mortgage Bank.

Demand letters10for the settlement of his account were sent by petitioner Union Bank of the Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to pay. Thus, on February 5, 1988, the petitioner filed a Complaint11for sum of money against the heirs of Efraim Santibaez, Edmund and Florence, before the RTC of Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were issued against both, but the one intended for Edmund was not served since he was in the United States and there was no information on his address or the date of his return to the Philippines.12Accordingly, the complaint was narrowed down to respondent Florence S. Ariola.

On December 7, 1988, respondent Florence S. Ariola filed her Answer13and alleged that the loan documents did not bind her since she was not a party thereto. Considering that the joint agreement signed by her and her brother Edmund was not approved by the probate court, it was null and void; hence, she was not liable to the petitioner under the joint agreement.

On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch 63.14Consequently, trial on the merits ensued and a decision was subsequently rendered by the court dismissing the complaint for lack of merit. The decretal portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit.15The trial court found that the claim of the petitioner should have been filed with the probate court before which the testate estate of the late Efraim Santibaez was pending, as the sum of money being claimed was an obligation incurred by the said decedent. The trial court also found that the Joint Agreement apparently executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a partition of the estate of the decedent. However, the said agreement was void, considering that it had not been approved by the probate court, and that there can be no valid partition until after the will has been probated. The trial court further declared that petitioner failed to prove that it was the now defunct Union Savings and Mortgage Bank to which the FCCC had assigned its assets and liabilities. The court also agreed to the contention of respondent Florence S. Ariola that the list of assets and liabilities of the FCCC assigned to Union Savings and Mortgage Bank did not clearly refer to the decedents account. Ruling that the joint agreement executed by the heirs was null and void, the trial court held that the petitioners cause of action against respondent Florence S. Ariola must necessarily fail.

The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA), assigning the following as errors of the trial court:

1. THE COURTA QUOERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A) SHOULD BE APPROVED BY THE PROBATE COURT.

2. THE COURTA QUOERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN PROBATED.

3. THE COURTA QUOERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16The petitioner asserted before the CA that the obligation of the deceased had passed to his legitimate children and heirs, in this case, Edmund and Florence; the unconditional signing of the joint agreement marked as Exhibit "A" estopped respondent Florence S. Ariola, and that she cannot deny her liability under the said document; as the agreement had been signed by both heirs in their personal capacity, it was no longer necessary to present the same before the probate court for approval; the property partitioned in the agreement was not one of those enumerated in the holographic will made by the deceased; and the active participation of the heirs, particularly respondent Florence S. Ariola, in the present ordinary civil action was tantamount to a waiver to re-litigate the claim in the estate proceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner should have been presented before the probate court.17The appellate court found that the appeal was not meritorious and held that the petitioner should have filed its claim with the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held that the partition made in the agreement was null and void, since no valid partition may be had until after the will has been probated. According to the CA, page 2, paragraph (e) of the holographic will covered the subject properties (tractors) in generic terms when the deceased referred to them as "all other properties." Moreover, the active participation of respondent Florence S. Ariola in the case did not amount to a waiver. Thus, the CA affirmed the RTC decision,viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City, Branch 63, is hereby AFFIRMEDin toto.

SO ORDERED.18In the present recourse, the petitioner ascribes the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONER-APPELLANT UNION BANK.

V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OFP128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OFP123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF PETITIONER UNION BANK.19The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided in Article 774 of the Civil Code; there was thus no need for the probate court to approve the joint agreement where the heirs partitioned the tractors owned by the deceased and assumed the obligations related thereto. Since respondent Florence S. Ariola signed the joint agreement without any condition, she is now estopped from asserting any position contrary thereto. The petitioner also points out that the holographic will of the deceased did not include nor mention any of the tractors subject of the complaint, and, as such was beyond the ambit of the said will. The active participation and resistance of respondent Florence S. Ariola in the ordinary civil action against the petitioners claim amounts to a waiver of the right to have the claim presented in the probate proceedings, and to allow any one of the heirs who executed the joint agreement to escape liability to pay the value of the tractors under consideration would be equivalent to allowing the said heirs to enrich themselves to the damage and prejudice of the petitioner.

The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to consider the fact that respondent Florence S. Ariola and her brother Edmund executed loan documents, all establishing thevinculum jurisor the legal bond between the late Efraim Santibaez and his heirs to be in the nature of a solidary obligation. Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980 executed by the late Efraim Santibaez, together with his heirs, Edmund and respondent Florence, made the obligation solidary as far as the said heirs are concerned. The petitioner also proffers that, considering the express provisions of the continuing guaranty agreement and the promissory notes executed by the named respondents, the latter must be held liable jointly and severally liable thereon. Thus, there was no need for the petitioner to file its money claim before the probate court. Finally, the petitioner stresses that both surviving heirs are being sued in their respective personal capacities, not as heirs of the deceased.

In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to recover a sum of money from the deceased Efraim Santibaez; thus the claim should have been filed with the probate court. She points out that at the time of the execution of the joint agreement there was already an existing probate proceedings of which the petitioner knew about. However, to avoid a claim in the probate court which might delay payment of the obligation, the petitioner opted to require them to execute the said agreement.1a\^/phi1.netAccording to the respondent, the trial court and the CA did not err in declaring that the agreement was null and void. She asserts that even if the agreement was voluntarily executed by her and her brother Edmund, it should still have been subjected to the approval of the court as it may prejudice the estate, the heirs or third parties. Furthermore, she had not waived any rights, as she even stated in her answer in the courta quothat the claim should be filed with the probate court. Thus, the petitioner could not invoke or claim that she is in estoppel.

Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty agreement, nor was there any document presented as evidence to show that she had caused herself to be bound by the obligation of her late father.

The petition is bereft of merit.

The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed by the heirs is valid; b) whether or not the heirs assumption of the indebtedness of the deceased is valid; and c) whether the petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.ntAt the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties of the deceased, to determine whether they should or should not be included in the inventory or list of properties to be administered.20The said court is primarily concerned with the administration, liquidation and distribution of the estate.21In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has been probated:

In testate succession, there can be no valid partition among the heirs until after the will has been probated. The law enjoins the probate of a will and the public requires it, because unless a will is probated and notice thereof given to the whole world, the right of a person to dispose of his property by will may be rendered nugatory. The authentication of a will decides no other question than such as touch upon the capacity of the testator and the compliance with those requirements or solemnities which the law prescribes for the validity of a will.22This, of course, presupposes that the properties to be partitioned are the same properties embraced in the will.23In the present case, the deceased, Efraim Santibaez, left a holographic will24which contained,inter alia, the provision which reads as follows:

(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall be distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and Florence, my children.

We agree with the appellate court that the above-quoted is an all-encompassing provision embracing all the properties left by the decedent which might have escaped his mind at that time he was making his will, and other properties he may acquire thereafter. Included therein are the three (3) subject tractors. This being so, any partition involving the said tractors among the heirs is not valid. The joint agreement25executed by Edmund and Florence, partitioning the tractors among themselves, is invalid, specially so since at the time of its execution, there was already a pending proceeding for the probate of their late fathers holographic will covering the said tractors.

It must be stressed that the probate proceeding had already acquired jurisdiction over all the properties of the deceased, including the three (3) tractors. To dispose of them in any way without the probate courts approval is tantamount to divesting it with jurisdiction which the Court cannot allow.26Every act intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction.27Thus, in executing any joint agreement which appears to be in the nature of an extra-judicial partition, as in the case at bar, court approval is imperative, and the heirs cannot just divest the court of its jurisdiction over that part of the estate. Moreover, it is within the jurisdiction of the probate court to determine the identity of the heirs of the decedent.28In the instant case, there is no showing that the signatories in the joint agreement were the only heirs of the decedent. When it was executed, the probate of the will was still pending before the court and the latter had yet to determine who the heirs of the decedent were. Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto themselves the three (3) tractors was a premature act, and prejudicial to the other possible heirs and creditors who may have a valid claim against the estate of the deceased.

The question that now comes to fore is whether the heirs assumption of the indebtedness of the decedent is binding. We rule in the negative. Perusing the joint agreement, it provides that the heirs as parties thereto "have agreed to divide between themselves and take possession and use the above-described chattel and each of them to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First Countryside Credit Corp."29The assumption of liability was conditioned upon the happening of an event, that is, that each heir shall take possession and use of their respective share under the agreement. It was made dependent on the validity of the partition, and that they were to assume the indebtedness corresponding to the chattel that they were each to receive. The partition being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It follows then that the assumption of liability cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent.l^vvphi1.netThe petitioner, purportedly a creditor of the late Efraim Santibaez, should have thus filed its money claim with the probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court, which provides:

Section 5.Claims which must be filed under the notice. If not filed barred; exceptions. All claims for money against the decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral expenses for the last sickness of the decedent, and judgment for money against the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants. Where an executor or administrator commences an action, or prosecutes an action already commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has against the decedent, instead of presenting them independently to the court as herein provided, and mutual claims may be set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount so determined shall be considered the true balance against the estate, as though the claim had been presented directly before the court in the administration proceedings. Claims not yet due, or contingent, may be approved at their present value.

The filing of a money claim against the decedents estate in the probate court is mandatory.30As we held in the vintage case ofPy Eng Chong v. Herrera:31 This requirement is for the purpose of protecting the estate of the deceased by informing the executor or administrator of the claims against it, thus enabling him to examine each claim and to determine whether it is a proper one which should be allowed. The plain and obvious design of the rule is the speedy settlement of the affairs of the deceased and the early delivery of the property to the distributees, legatees, or heirs. `The law strictly requires the prompt presentation and disposition of the claims against the decedent's estate in order to settle the affairs of the estate as soon as possible, pay off its debts and distribute the residue.32Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola accountable for any liability incurred by her late father. The documentary evidence presented, particularly the promissory notes and the continuing guaranty agreement, were executed and signed only by the late Efraim Santibaez and his son Edmund. As the petitioner failed to file its money claim with the probate court, at most, it may only go after Edmund as co-maker of the decedent under the said promissory notes and continuing guaranty, of course, subject to any defenses Edmund may have as against the petitioner. As the court had not acquired jurisdiction over the person of Edmund, we find it unnecessary to delve into the matter further.

We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and liabilities.33The petitioner in its complaint alleged that "by virtue of the Deed of Assignment dated August 20, 1981 executed by and between First Countryside Credit Corporation and Union Bank of the Philippines"34However, the documentary evidence35clearly reflects that the parties in the deed of assignment with assumption of liabilities were the FCCC, and the Union Savings and Mortgage Bank, with the conformity of Bancom Philippine Holdings, Inc. Nowhere can the petitioners participation therein as a party be found. Furthermore, no documentary or testimonial evidence was presented during trial to show that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of the Philippines. As the trial court declared in its decision:

[T]he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present evidence to prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines. Judicial notice does not apply here. "The power to take judicial notice is to [be] exercised by the courts with caution; care must be taken that the requisite notoriety exists; and every reasonable doubt upon the subject should be promptly resolved in the negative." (Republic vs. Court of Appeals, 107 SCRA 504).36This being the case, the petitioners personality to file the complaint is wanting. Consequently, it failed to establish its cause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in affirming the same.

IN LIGHT OF ALL THE FOREGOING,the petition is hereby DENIED. The assailed Court of Appeals Decision is AFFIRMED. No costs.

SO ORDERED.

G.R. No. 140929 May 26, 2005MARGARITO R. JAMERO,petitioner, vs. THE HONORABLE ACHILLES L. MELICOR, in his capacity as Presiding Judge of the Regional Trial Court of Tagbilaran City, Branch 4, ATTY. ALBERTO BAUTISTA, in his capacity as the appointed SPECIAL ADMINISTRATOR, and ERNESTO R. JAMERO,respondent.

D E C I S I O N

AUSTRIA-MARTINEZ,J.:

This refers to the petition for review oncertiorariseeking that the Resolution1of the Court of Appeals (CA) promulgated on June 14, 1999 dismissing the petition forcertiorarifiled with it by petitioner Margarito R. Jamero and the Resolution promulgated on November 24, 1999 denying petitioners motion for reconsideration be set aside and declared null and void on the ground that said Resolutions were issued in a way not in accord with law and jurisprudence.

The antecedent facts of the case are as follows:

Petitioner filed Special Proceedings No. 1618 for the Administration and Settlement of the Estate of his deceased mother Consuelo Jamero with the Regional Trial Court (RTC), Branch 4, Tagbilaran City. Private respondent Ernesto R. Jamero, a brother of petitioner, opposed the latters petition for appointment as regular administrator of the estate.

Upon motion of private respondent Ernesto and over the objections of petitioner, the respondent court, in its Order dated December 4, 1998,2appointed Atty. Alberto Bautista as special administrator pending the appointment of a regular administrator. Petitioner received said Order on December 11, 1998 and filed a motion for reconsideration on December 28, 1998, the last day of the 15-day reglementary period, that is, December 26, 1998, falling on a Saturday during which, according to petitioner, the Bureau of Post Office held no office. The courta quodenied petitioners motion for reconsideration in its Order dated February 26, 1999 which petitioner received on March 4, 1999.3On April 21, 1999, petitioner filed a petition forcertiorariwith the CA, docketed as CA-G.R. SP No. 53020, entitledMargarito R. Jamero, Petitioner vs. Hon. Achilles L. Melicor, as Judge RTC of Tagbilaran City, Branch 4, and Alberto Bautista.

On June 14, 1999, the CA issued the herein assailed Resolution, to wit:

A perusal of the petition indicates no statement as to the date when the petitioner filed a Motion for Reconsideration of the public respondents decision, in violation of Section 3, paragraph 2, Rule 46 of the 1997 Rules of Civil Procedure as amended by Circular No. 39-98 dated August 18, 1998 of the Supreme Court, to wit:

In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject hereof was received when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received.

The attention of the petitioner is likewise called to the amended Section 4, Rule 65 (Ibid.).

SEC. 4. Where and when petition to be filed. The petition may be filed not later than sixty (60) days from notice of the judgment, order or resolution sought to be assailed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and unless otherwise provided by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals.

If the petitioner had filed a motion for new trial or reconsideration in due time after notice of said judgment, order or resolution the period herein fixed shall be interrupted. If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than five (5) days in any event, reckoned from notice of such denial. No extension of time to file the petition shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days.

Hence, pursuant to the last paragraph of Section 3, Rule 46, the petition may be dismissed outright. In any case, even if we consider the date of the Motion for Reconsideration (December 26, 1998) as the date of its filing, the petition would be late by three (3) days.

WHEREFORE, the petition is denied due course and accordingly DISMISSED.

SO ORDERED.4Petitioner filed a Motion for Reconsideration which the appellate court denied in its Resolution, promulgated on November 24, 1999, to wit:

The petitioner filed a Motion for Reconsideration of our Resolution of dismissal dated June 14, 1999, imploring us to use merciful discretion by relaxing the rules on technicality to effect substantial justice, and citing the importance of the legal issues involved herein.

We find the motion devoid of merit. This Court has no authority to extend the definitive period fixed in Sec. 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended.

In any case, the appointment of a special administrator is discretionary to the appointing court. Being an interlocutory order, the same is not appealable nor subject tocertiorari.

WHEREORE, the Motion for Reconsideration is DENIED for lack of merit.

SO ORDERED.5Hence, the present petition for review oncertiorarifiled by petitioner against Judge Achilles L. Melicor, Atty. Bautista and, this time, including oppositor Ernesto R. Jamero, based on the following grounds:

I

THE COURT OF APPEALS HAD DECIDED IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED JURISPRUDENCE WHEN IT ALLOWED TECHNICALITY TO OVERRIDE, AND TAKE PRECEDENCE OVER, THE DEMONSTRATED SUBSTANTIVE MERITS OF THE PETITION.

II

THE COURT OF APPEALS HAS DECIDED IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED JURISPRUDENCE WHEN IT RULED THAT THE APPOINTMENT OF SPECIAL ADMINISTRATOR IS DISCRETIONARY TO THE APPOINTING COURT, AND THAT BEING AN INTERLOCUTORY ORDER THE SAME IS NOT APPEALABLE NOR SUBJECT TOCERTIORARI.

III

THE COURT OF APPEALS HAD DECIDED IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED JURISPRUDENCE WHEN IT SUSTAINED THE ORDER OF THE TRIAL COURT APPOINTING ATTY. ALBERTO Y. BAUTISTA AS SPECIAL ADMINISTRATOR OF THE ESTATE OF THE LATE CONSUELO R. JAMERO, IN THAT:

(A) THE LATE CONSUELO R. JAMERO DIED INTESTATE, LEAVING NO DEBTS. HENCE, THE APPOINTMENT OF A SPECIAL ADMINISTRATOR IS NOT NECESSARY AS IT WOULD ONLY UNDULY BURDEN OR OTHERWISE EXPOSE THE ESTATE TO BEING WASTED OR SQUANDERED.

(B) ASSUMINGARGUENDOTHAT A SPECIAL ADMINISTRATOR IS NECESSARY, THE ORDER OF PREFERANCE PRESCRIBED BY THE RULES IN THE APPOINTMENT OF REGULAR ADMINISTRATOR SHOULD HAVE BEEN OBSERVED. THUS, THE TRIAL COURT SHOULD HAVE DESIGNATED THE PETITIONER WHO POSSESSES BENEFICIAL INTERESTS AS A CO-OWNER OF THE ESTATE, RATHER THAN ATTY. ALBERTO Y. BAUTISTA WHO IS ONLY A THIRD PARTY.

(C) ASSUMING, FURTHER, THAT THE DESIGNATION OF ATTY. ALBERTO BAUTISTA WHO IS A THIRD PARTY IS PROPER, THE AUTHORITY OF A SPECIAL ADMINISTRATOR CANNOT BE EXERCISED IN DEROGATION OF THE RIGHTS OF PETITIONER AS A CO-OWNER OF THE PROPERTIES FORMING PART OF THE ESTATE.6Private respondent Ernesto Jamero who was not a party in CA-G.R. SP No. 53020 filed his Comment contending that in the absence of clear, convincing and satisfactory proof that the decision is outrageously wrong, conspicuously mistaken and whimsically arrived at, the judgment of the CA must be regarded as final, citingMacapagal vs. CA, et al.7andBustamante, Jr. vs. NLRC.8In his Reply, petitioner pointed out that the issue on the timeliness of the filing of the petition forcertiorariwith the CA has now become moot and academic in view of A.M. Circular No. 00-2-03-SC which took effect on September 1, 2000, amending Section 4, Rule 65 of the Rules of Court, to wit:

SEC. 4. When and where petition filed. The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion.

. . .

Both petitioner and private respondent Ernesto filed their respective memoranda. Private respondent Bautista, the special administrator designated by the RTC, failed to submit his memorandum despite due notice of the Resolutions requiring him to do so. Consequently, on October 20, 2004, the Court issued a Resolution directing the Director of the National Bureau of Investigation (NBI) to arrest and detain him until he shall have paid the total amount ofP4,000.00 fine and shall have filed his explanation and memorandum.9The NBI has not submitted its return.

The Court is dispensing with the filing of the memorandum by private respondent Bautista in view of the Comments he filed on October 12, 2000 stating that he has no personal interest in the subject matter of the petition and the subject matter of Special Proceedings No. 1618, RTC, Bohol; and that he will abide by whatever judgment/order/resolution that the Court may issue in this case.10However, Atty. Bautista is not relieved from paying the amount of theP4,000.00 fine for his failure to comply with the Resolutions of the Court.

The issues in this case are: (1) whether or not the CA erred in dismissing CA-G.R. SP No. 53020 for having been filed out of time; (2) whether or not the CA erred in ruling that the appointment of special administrator is discretionary to the appointing court and that being an interlocutory order, the same is not appealable nor subject tocertiorari; and (3) whether or not the appointment of a special administrator is in accordance with law and jurisprudence.

As to the first issue, the Court finds merit to the claim of petitioner that A.M. Circular No. 00-2-03-SC as herein quoted earlier, further amending Section 4, Rule 65 of the Rules of Court, should be given retroactive effect. The Court held inRepublic vs. Court of Appeals:11The amendment under A.M. No. 00-2-03-SC quoted above is procedural or remedial in character. It does not create new or remove vested rights but only operates in furtherance of the remedy or confirmation of rights already existing. It is settled that procedural laws do not come within the legal conception of a retroactive law, or the general rule against retroactive operation of statutes. They may be given retroactive effect to actions pending and undetermined at the time of their passage and this will not violate any right of a person who may feel that he is adversely affected, insomuch as there is no vested rights in rules of procedure.12Thus, applying the same to CA-G.R. SP No. 53020, the petition forcertiorarifiled by petitioner with the CA should now be considered as having been filed within the reglementary period provided under said circular. Petitioner would have had sixty days from March 4, 1999 or until May 3, 1999 within which to file his petition in the CA. The petition forcertiorariwas filed on April 21, 1999.

However, far from rendering the petition in CA-G.R. SP No. 53020 moot and academic, as claimed by petitioner, the third issue will have to be passed upon by the CA in the petition forcertiorarifiled with it.

As to the second issue, suffice it to be stated that indeed, the appointment of a special administrator is interlocutory, discretionary on the part of the RTC and non-appealable. However, it may be subject ofcertiorariif it can be shown that the RTC committed grave abuse of discretion or lack of or in excess of jurisdiction. As the Court held inPefianco vs. Moral,13even as the trial courts order may merely be interlocutory and non-appealable,certiorariis the proper remedy to annul the same when it is rendered with grave abuse of discretion.14It is for this reason that the third issue, as already stated, will have to be considered and passed upon by the CA.

WHEREFORE, the petition is partially granted. The assailed Resolutions dated June 14, 1999 and November 24, 1999 are SET ASIDE and the case is remanded to the Court of Appeals for further proceedings. No pronouncement as to costs.

The Resolution of this Court dated October 20, 2004 is amended to the effect that the NBI is directed to arrest and detain the person of Atty. Alberto Bautista until full payment of the fine of Four Thousand Pesos (P4,000.00); and to submit its return within thirty (30) days from notice hereof.

SO ORDERED.

G.R. No. 146006. April 22, 2005JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary, respectively, of Philippine International Life Insurance Company, and FILIPINO LOAN ASSISTANCE GROUP,Petitioners,vs.REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 85 presided by JUDGE PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER G. RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of Quezon City Branch 85, MA. DIVINA ENDERES claiming to be Special Administratrix, and other persons/public officers acting for and in their behalf,Respondents.

R E S O L U T I O N

CORONA,J.:

For resolution is private respondent Ma. Divina Ortaez-Enderes omnibus motion to cite petitioners in indirect contempt of Court and for the disbarment and/or imposition of disciplinary sanctions on petitioners counsel1for their refusal to comply with the final and executory decision of this Court dated February 23, 2004.

This case began with a petition for letters of administration of the intestate estate of Dr. Juvencio P. Ortaez filed 25 years ago on September 24, 1980. Forming part of the inventory of the estate were 2,029 shares of stock in Philippine International Life Insurance Company (Philinterlife). During the pendency of these proceedings, Juliana, Jose and Rafael (all surnamed Ortaez), the surviving legitimate spouse and legitimate children of the decedent respectively, executed an extrajudicial settlement of the estate, partitioning it (including the Philinterlife shares of stock) among themselves. Thereafter, Juliana and Jose sold the 2,029 shares to the Filipino Loan Assistance