Succession Cases Compilation Part I

8/12/2019 Succession Cases Compilation Part I

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SUCCESSION

LIST OF C SES1. Bonilla vs. Barcena 71 SCRA 490

2. Estate of Hermady vs. Luzon Surety 100 Phil 388

3. Alvarez vs. IAC G.R. No. L-68053 May 7, 1990

4. Lee vs. RTC 423 SCRA 497 (2004)

5. De Borja vs. Vda. de Borja 46 SCRA 577

6. Butte vs. Manuel Uy & Sons 4 SCRA 526

7. Uson vs. Del Rosario 92 Phil 531

8. Blas vs. Santos 1 SCRA 899

9. Sicad vs. Court of Appeals 294 SCRA 183

10.Dizon-Rivera vs. Dizon 33 SCRA 554

11.Bellis vs. Bellis 20 SCRA 358

12.Torres vs. Lopez 48 Phil 772

13.National Housing Authority vs. Almelda 525 SCRA 383 (2007)

14.Vitug vs. CA 183 SCRA 755

15.Natividad Nazareno vs. CA 343 SCRA 637 (2000)

16.Pacio vs. Billon 1 SCRA 284

17.Heirs of Sps. Sandejas vs. Lina 351 SCRA 183 (2001)

18.Reganon vs. Imperial 22 SCRA 80 (1968)

19.Salvador vs. Maria 20 SCRA 603 (1967)

20.Ramirez vs. Baltazar 24 SCRA 918 (1968)

21.Puno vs. Puno Enterprises 599 SCRA 585 (2009)

22.Reyes vs. RT of Makati Br. 142 561 SCRA 593 (2008)

23.Santos vs. Lumbao 513 SCRA 408 (2007)


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SUCCESSION LIST OF C SES P RT I

Bonilla vs. Barcena 71 SCRA 490

FIRST DIVISION

G.R. No. L-41715 June 18, 1976

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA (their father) whorepresents the minors, petitioners,vs.LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI,widow of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court of First Instance of Abra,respondents.

Federico Paredes for petitioners.

Demetrio V. Pre for private respondents.

MARTIN, J :

This is a petition for review1

of the Order of the Court of First Instance of Abra in Civil Case No. 856, entitled FortunataBarcena vs. Leon Barcena, et al., denying the motions for reconsideration of its order dismissing the complaint in theaforementioned case.

On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla,instituted a civil action in the Court of First Instance of Abra, to quiet title over certain parcels of land located in Abra.

On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before the hearing of the motion to dismiss,the counsel for the plaintiff moved to amend the complaint in order to include certain allegations therein. The motion toamend the complaint was granted and on July 17, 1975, plaintiffs filed their amended complaint.

On August 4, 1975, the defendants filed another motion to dismiss the complaint on the ground that Fortunata Barcena isdead and, therefore, has no legal capacity to sue. Said motion to dismiss was heard on August 14, 1975. In said hearing,counsel for the plaintiff confirmed the death of Fortunata Barcena, and asked for substitution by her minor children and herhusband, the petitioners herein; but the court after the hearing immediately dismissed the case on the ground that a deadperson cannot be a real party in interest and has no legal personality to sue.

On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the complaint and on August 23, 1975,he moved to set aside the order of the dismissal pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court.

2

On August 28, 1975, the court denied the motion for reconsideration filed by counsel for the plaintiff for lack of merit. OnSeptember 1, 1975, counsel for deceased plaintiff filed a written manifestation praying that the minors Rosalio Bonilla andSalvacion Bonilla be allowed to substitute their deceased mother, but the court denied the counsel's prayer for lack of merit.From the order, counsel for the deceased plaintiff filed a second motion for reconsideration of the order dismissing thecomplaint claiming that the same is in violation of Sections 16 and 17 of Rule 3 of the Rules of Court but the same wasdenied.

Hence, this petition for review.

The Court reverses the respondent Court and sets aside its order dismissing the complaint in Civil Case No. 856 and itsorders denying the motion for reconsideration of said order of dismissal. While it is true that a person who is dead cannotsue in court, yet he can be substituted by his heirs in pursuing the case up to its completion. The records of this case showthat the death of Fortunata Barcena took place on July 9, 1975 while the complaint was filed on March 31, 1975. This meansthat when the complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore, the court had

acquired jurisdiction over her person. If thereafter she died, the Rules of Court prescribes the procedure whereby a partywho died during the pendency of the proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court"whenever a party to a pending case dies ... it shall be the duty of his attorney to inform the court promptly of such death ...and to give the name and residence of his executor, administrator, guardian or other legal representatives." This duty wascomplied with by the counsel for the deceased plaintiff when he manifested before the respondent Court that FortunataBarcena died on July 9, 1975 and asked for the proper substitution of parties in the case. The respondent Court, however,instead of allowing the substitution, dismissed the complaint on the ground that a dead person has no legal personality tosue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the succession are transmitted from themoment of the death of the decedent." From the moment of the death of the decedent, the heirs become the absoluteowners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of their rightsthereto except by the methods provided for by law.

3The moment of death is the determining factor when the heirs acquire a


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definite right to the inheritance whether such right be pure or contingent.4The right of the heirs to the property of the

deceased vests in them even before judicial declaration of their being heirs in the testate or intestate proceedings.5When

Fortunata Barcena, therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856, was notextinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in theproperties in litigation and became parties in interest in the case. There is, therefore, no reason for the respondent Court notto allow their substitution as parties in interest for the deceased plaintiff.

Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished, the court shall

order, upon proper notice, the legal representative of the deceased to appear and be substituted for the deceased, withinsuch time as may be granted ... ." The question as to whether an action survives or not depends on the nature of the actionand the damage sued for.

6In the causes of action which survive the wrong complained affects primarily and principally

property and property rights, the injuries to the person being merely incidental, while in the causes of action which do notsurvive the injury complained of is to the person, the property and rights of property affected being incidental.

7Following the

foregoing criterion the claim of the deceased plaintiff which is an action to quiet title over the parcels of land in litigationaffects primarily and principally property and property rights and therefore is one that survives even after her death. It is,therefore, the duty of the respondent Court to order the legal representative of the deceased plaintiff to appear and to besubstituted for her. But what the respondent Court did, upon being informed by the counsel for the deceased plaintiff that thelatter was dead, was to dismiss the complaint. This should not have been done for under the same Section 17, Rule 3 of theRules of Court, it is even the duty of the court, if the legal representative fails to appear, to order the opposing party toprocure the appointment of a legal representative of the deceased. In the instant case the respondent Court did not have tobother ordering the opposing party to procure the appointment of a legal representative of the deceased because hercounsel has not only asked that the minor children be substituted for her but also suggested that their uncle be appointed asguardian ad litemfor them because their father is busy in Manila earning a living for the family. But the respondent Courtrefused the request for substitution on the ground that the children were still minors and cannot sue in court. This is another

grave error because the respondent Court ought to have known that under the same Section 17, Rule 3 of the Rules ofCourt, the court is directed to appoint a guardian ad litemfor the minor heirs. Precisely in the instant case, the counsel forthe deceased plaintiff has suggested to the respondent Court that the uncle of the minors be appointed to act as guardian adlitemfor them. Unquestionably, the respondent Court has gravely abused its discretion in not complying with the clearprovision of the Rules of Court in dismissing the complaint of the plaintiff in Civil Case No. 856 and refusing the substitutionof parties in the case.

IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the complaint in Civil Case No. 856 of theCourt of First Instance of Abra and the motions for reconsideration of the order of dismissal of said complaint are set asideand the respondent Court is hereby directed to allow the substitution of the minor children, who are the petitioners therein forthe deceased plaintiff and to appoint a qualified person as guardian ad litemfor them. Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Esguerra and Muoz Palma, JJ., concur.

Footnotes

1 Which this Court treats as special civil action as per its Resolution dated February 11, 1976.

2 Section 16. Duty of Attorney upon which death, incapacity or incompetency of party. - Whenever aparty to a pending case dies, becomes incapacitated or incompetent, it shall be the duty of his attorney toinform the court promptly of such death, incapacity or incompetency, and to give the name and residenceof his executor, administrator, guardian or other legal representative.

Section 17. Death of party.After a party dies and the claim is not thereby extinguished, the court shallorder, upon proper notice, the legal representative of the deceased to appear and to be substituted fordeceased, within a period of thirty (30) days, or within such time as may be granted. If the legalrepresentative fails to appear within said time, the court may order the opposing party to procure theappointment of a legal representative of the within a time to be specified by the court, and therepresentative shall immediately appear for and on behalf of the interest of the deceased. The courtcharges involved in procuring such appointment, if defrayed by the opposing party, may be recovered ascosts. The heirs of the deceased may be allowed to be substituted for the deceased, without requiring theappointment of an executor or administrator and the court may appoint guardianad litemfor the minor

heirs.

3 Buan vs. Heirs of Buan, 53 Phil. 654.

4 Ibarle vs. Po, 92 Phil. 721.

5 Morales, et al. vs. Ybanez, 98 Phil. 677.

6 Iron Gate Bank vs. Brady, 184 U.S. 665, 22 SCT 529, 46 L. ed. 739.

7 Wenber vs. St. Paul City Co., 97 Feb. 140 R. 39 C.C.A. 79.


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Estate of Hermady vs. Luzon Surety 100 Phil 388

EN BANC

[G.R. No. L-8437. November 28, 1956.]

ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-Appel lant .

D E C I S I O N

REYES, J. B. L., J .:

Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance of Rizal, presided by Judge HermogenesCaluag, dismissing its claim against the Estate of K. H. Hemady (Special Proceeding No. Q-293) for failure to state a causeof action.

The Luzon Surety Co. had filed a claim against the Estate based on twenty different indemnity agreements, or counterbonds, each subscribed by a distinct principal and by the deceased K. H. Hemady, a surety solidary guarantor) in all ofthem, in consideration of the Luzon Surety Co.s of having guaranteed, the various principals in favor of different creditors.The twenty counterbonds, or indemnity agreements, all contained the following stipulations:

Premiums. As consideration for this suretyship, the undersigned jointly and severally, agree to pay the COMPANY thesum of ________________ (P______) pesos, Philippines Currency, in advance as premium there of for every __________months or fractions thereof, this ________ or any renewal or substitution thereof is in effect.

Indemnity. The undersigned, jointly and severally, agree at all times to indemnify the COMPANY and keep it indemnifiedand hold and save it harmless from and against any and all damages, losses, costs, stamps, taxes, penalties, charges, andexpenses of whatsoever kind and nature which the COMPANY shall or may, at any time sustain or incur in consequence ofhaving become surety upon this bond or any extension, renewal, substitution or alteration thereof made at the instance ofthe undersigned or any of them or any order executed on behalf of the undersigned or any of them; chanroblesvirtualawlibraryand to pay, reimburse and make good to the COMPANY, its successors and assigns, all sums andamount of money which it or its representatives shall pay or cause to be paid, or become liable to pay, on account of theundersigned or any of them, of whatsoever kind and nature, including 15% of the amount involved in the litigation or othermatters growing out of or connected therewith for counsel or attorneys fees, but in no case less than P25. It is herebyfurther agreed that in case of extension or renewal of this ________ we equally bind ourselves for the payment thereofunder the same terms and conditions as above mentioned without the necessity of executing another indemnity agreementfor the purpose and that we hereby equally waive our right to be notified of any renewal or extension of this ________ whichmay be granted under this indemnity agreement.

Interest on amount paid by the Company. Any and all sums of money so paid by the company shall bear interest at therate of 12% per annum which interest, if not paid, will be accummulated and added to the capital quarterly order to earn the

same interests as the capital and the total sum thereof, the capital and interest, shall be paid to the COMPANY as soon asthe COMPANY shall have become liable therefore, whether it shall have paid out such sums of money or any part thereof ornot.

x x x x x x x x x

Waiver. It is hereby agreed upon by and between the undersigned that any question which may arise between them byreason of this document and which has to be submitted for decision to Courts of Justice shall be brought before the Court ofcompetent jurisdiction in the City of Manila, waiving for this purpose any other venue. Our right to be notified of theacceptance and approval of this indemnity agreement is hereby likewise waived.

x x x x x x x x x

Our Liability Hereunder. It shall not be necessary for the COMPANY to bring suit against the principal upon his default, orto exhaust the property of the principal, but the liability hereunder of the undersigned indemnitor shall be jointly andseverally, a primary one, the same as that of the principal, and shall be exigible immediately upon the occurrence of suchdefault. (Rec. App. pp. 98- 102.)

The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of the twenty bonds it had executed inconsideration of the counterbonds, and further asked for judgment for the unpaid premiums and documentary stamps affixedto the bonds, with 12 per cent interest thereon.

Before answer was filed, and upon motion of the administratrix of Hemadys estate, the lower court, by order of September23, 1953, dismissed the claims of Luzon Surety Co., on two grounds: (1) that the premiums due and cost of documentarystamps were not contemplated under the indemnity agreements to be a part of the undertaking of the guarantor (Hemady),since they were not liabilities incurred after the execution of the counterbonds; and (2) that whatever losses may occur afterHemadys death, are not chargeable to his estate, because upon his death he ceased to be guarantor.

Taking up the latter point first, since it is the one more far reaching in effects, the reasoning of the court below ran as follows:


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The administratrix further contends that upon the death of Hemady, his liability as a guarantor terminated, and therefore, inthe absence of a showing that a loss or damage was suffered, the claim cannot be considered contingent. This Courtbelieves that there is merit in this contention and finds support in Article 2046 of the new Civil Code. It should be noted that anew requirement has been added for a person to qualify as a guarantor, that is: integrity. As correctly pointed out by the

Administratrix, integrity is something purely personal and is not transmissible. Upon the death of Hemady, his integrity wasnot transmitted to his estate or successors. Whatever loss therefore, may occur after Hemadys death, are not chargeable tohis estate because upon his death he ceased to be a guarantor.

Another clear and strong indication that the surety company has exclusively relied on the personality, character, honesty andintegrity of the now deceased K. H. Hemady, was the fact that in the printed form of the indemnity agreement there is aparagraph entitled Security by way of first mortgage, which was expressly waived and renounced by the security company.The security company has not demanded from K. H. Hemady to comply with this requirement of giving security by way offirst mortgage. In the supporting papers of the claim presented by Luzon Surety Company, no real property was mentionedin the list of properties mortgaged which appears at the back of the indemnity agreement. (Rec. App., pp. 407-408).

We find this reasoning untenable. Under the present Civil Code (Article 1311), as well as under the Civil Code of 1889(Article 1257), the rule is that

Contracts take effect only as between the parties, their assigns and heirs, except in the case where the rights andobligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.

While in our successional system the responsibility of the heirs for the debts of their decedent cannot exceed the value ofthe inheritance they receive from him, the principle remains intact that these heirs succeed not only to the rights of thedeceased but also to his obligations. Articles 774 and 776 of the New Civil Code (and Articles 659 and 661 of the precedingone) expressly so provide, thereby confirming Article 1311 already quoted.

ART. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of thevalue of the inheritance, of a person are transmitted through his death to another or others either by his will or by operationof law.

ART. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by hisdeath.

In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:chanroblesvirtuallawlibrary

Under the Civil Code the heirs, by virtue of the rights of succession are subrogated to al l the rights and obligations of thedeceased (Article 661) and cannot be regarded as third parties with respect to a contract to which the deceased was a party,touching the estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).

x x x x x x x x x

The principle on which these decisions rest is not affected by the provisions of the new Code of Civil Procedure, and, inaccordance with that principle, the heirs of a deceased person cannot be held to be third persons in relation to any

contracts touching the real estate of their decedent which comes in to their hands by right of inheritance; chanroblesvirtualawlibrarythey take such property subject to all the obligations resting thereon in the hands of him from whomthey derive their rights.

(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs. Salak, 91 Phil., 265).

The binding effect of contracts upon the heirs of the deceased party is not altered by the provision in our Rules of Court thatmoney debts of a deceased must be liquidated and paid from his estate before the residue is distributed among said heirs(Rule 89). The reason is that whatever payment is thus made from the estate is ultimately a payment by the heirs anddistributees, since the amount of the paid claim in fact diminishes or reduces the shares that the heirs would have beenentitled to receive.

Under our law, therefore, the general rule is that a partys contractual rights and obligations are transmissible to thesuccessors. The rule is a consequence of the progressive depersonalization of patrimonial rights and duties that, asobserved by Victorio Polacco, has characterized the history of these institutions. From the Roman concept of a relation fromperson to person, the obligation has evolved into a relation from patrimony to patrimony, with the persons occupying only arepresentative position, barring those rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae,

in consideration of its performance by a specific person and by no other. The transition is marked by the disappearance ofthe imprisonment for debt.

Of the three exceptions fixed by Article 1311, the nature of the obligation of the surety or guarantor does not warrant theconclusion that his peculiar individual qualities are contemplated as a principal inducement for the contract. What did thecreditor Luzon Surety Co. expect of K. H. Hemady when it accepted the latter as surety in the counterbonds? Nothing butthe reimbursement of the moneys that the Luzon Surety Co. might have to disburse on account of the obligations of theprincipal debtors. This reimbursement is a payment of a sum of money, resulting from an obligation to give; chanroblesvirtualawlibraryand to the Luzon Surety Co., it was indifferent that the reimbursement should be made by Hemadyhimself or by some one else in his behalf, so long as the money was paid to it.


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The second exception of Article 1311, p. 1, is intransmissibility by stipulation of the parties. Being exceptional and contraryto the general rule, this intransmissibility should not be easily implied, but must be expressly established, or at the very least,clearly inferable from the provisions of the contract itself, and the text of the agreements sued upon nowhere indicate thatthey are non-transferable.

(b) Intransmisibilidad por pacto. Lo general es la transmisibilidad de darechos y obligaciones; chanroblesvirtualawlibraryle excepcion, la intransmisibilidad. Mientras nada se diga en contrario impera el principio de latransmision, como elemento natural a toda relacion juridica, salvo las personalisimas. Asi, para la no transmision, es

menester el pacto expreso, porque si no, lo convenido entre partes trasciende a sus herederos.

Siendo estos los continuadores de la personalidad del causante, sobre ellos recaen los efectos de los vinculos juridicoscreados por sus antecesores, y para evitarlo, si asi se quiere, es indespensable convension terminante en tal sentido.

Por su esencia, el derecho y la obligacion tienden a ir ms all de las personas que les dieron vida, y a ejercer presionsobre los sucesores de esa persona; chan roblesvirtualawlibrarycuando no se quiera esto, se impone una estipulacionlimitativa expresamente de la transmisibilidad o de cuyos tirminos claramente se deduzca la concresion del concreto a lasmismas personas que lo otorgon. (Scaevola, Codigo Civil, Tomo XX, p. 541-542) (Emphasis supplied.)

Because under the law (Article 1311), a person who enters into a contract is deemed to have contracted for himself and hisheirs and assigns, it is unnecessary for him to expressly stipulate to that effect; chan roblesvirtualawlibraryhence, his failureto do so is no sign that he intended his bargain to terminate upon his death. Similarly, that the Luzon Surety Co., did notrequire bondsman Hemady to execute a mortgage indicates nothing more than the companys faith and confidence in thefinancial stability of the surety, but not that his obligation was strictly personal.

The third exception to the transmissibility of obligations under Article 1311 exists when they are not transmissible by

operation of law. The provision makes reference to those cases where the law expresses that the rights or obligations areextinguished by death, as is the case in legal support (Article 300), parental authority (Article 327), usufruct (Article 603),contracts for a piece of work (Article 1726), partnership (Article 1830 and agency (Article 1919). By contract, the articles ofthe Civil Code that regulate guaranty or suretyship (Articles 2047 to 2084) contain no provision that the guaranty isextinguished upon the death of the guarantor or the surety.

The lower court sought to infer such a limitation from Art. 2056, to the effect that one who is obliged to furnish a guarantormust present a person who possesses integrity, capacity to bind himself, and sufficient property to answer for the obligationwhich he guarantees. It will be noted, however, that the law requires these qualities to be present only at the time of theperfection of the contract of guaranty. It is self-evident that once the contract has become perfected and binding, thesupervening incapacity of the guarantor would not operate to exonerate him of the eventual liability he has contracted; chanroblesvirtualawlibraryand if that be true of his capacity to bind himself, it should also be true of his integrity, which is a qualitymentioned in the article alongside the capacity.

The foregoing concept is confirmed by the next Article 2057, that runs as follows:chanroblesvirtuallawlibrary

ART. 2057. If the guarantor should be convicted in first instance of a crime involving dishonesty or should become

insolvent, the creditor may demand another who has all the qualifications required in the preceding article. The case isexcepted where the creditor has required and stipulated that a specified person should be guarantor.

From this article it should be immediately apparent that the supervening dishonesty of the guarantor (that is to say, thedisappearance of his integrity after he has become bound) does not terminate the contract but merely entitles the creditor todemand a replacement of the guarantor. But the step remains optional in the creditor:chanroblesvirtuallawlibrary it is hisright, not his duty; chan roblesvirtualawlibraryhe may waive it if he chooses, and hold the guarantor to his bargain. Hence

Article 2057 of the present Civil Code is incompatible with the trial courts stand that the requirement of integrity in theguarantor or surety makes the latters undertaking strictly personal, so linked to his individuality that the guarantyautomatically terminates upon his death.

The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety Co. not being rendered intransmissibledue to the nature of the undertaking, nor by the stipulations of the contracts themselves, nor by provision of law, his eventualliability thereunder necessarily passed upon his death to his heirs. The contracts, therefore, give rise to contingent claimsprovable against his estate under section 5, Rule 87 (2 Moran, 1952 ed., p. 437; chan roblesvirtualawlibraryGaskell & Co.vs. Tan Sit, 43 Phil. 810, 814).

The most common example of the contigent claim is that which arises when a person is bound as suretyor guarantor for aprincipal who is insolvent or dead. Under the ordinary contract of suretyship the surety has no claim whatever against hisprincipal until he himself pays something by way of satisfaction upon the obligation which is secured. When he does this,there instantly arises in favor of the surety the right to compel the principal to exonerate the surety. But until the surety hascontributed something to the payment of the debt, or has performed the secured obligation in whole or in part, he has noright of action against anybody no claim that could be reduced to judgment. (May vs. Vann, 15 Pla., 553; chanroblesvirtualawlibraryGibson vs. Mithell, 16 Pla., 519; chan roblesvirtualawlibraryMaxey vs. Carter, 10 Yarg. [Tenn.], 521Reeves vs. Pulliam, 7 Baxt. [Tenn.], 119; chan roblesvirtualawlibraryErnst vs. Nou, 63 Wis., 134.)

For Defendantadministratrix it is averred that the above doctrine refers to a case where the surety files claims against theestate of the principal debtor; chan roblesvirtualawlibraryand it is urged that the rule does not apply to the case before us,


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where the late Hemady was a surety, not a principal debtor. The argument evinces a superficial view of the relationsbetween parties. If under the Gaskell ruling, the Luzon Surety Co., as guarantor, could file a contingent claim against theestate of the principal debtors if the latter should die, there is absolutely no reason why it could not file such a claim againstthe estate of Hemady, since Hemady is a solidary co-debtor of his principals. What the Luzon Surety Co. may claim from theestate of a principal debtor it may equally claim from the estate of Hemady, since, in view of the existing solidarity, the latterdoes not even enjoy the benefit of exhaustion of the assets of the principal debtor.

The foregoing ruling is of course without prejudice to the remedies of the administratrix against the principal debtors under

Articles 2071 and 2067 of the New Civil Code.

Our conclusion is that the solidary guarantors liability is not extinguished by his death, and that in such event, the LuzonSurety Co., had the right to file against the estate a contingent claim for reimbursement. It becomes unnecessary now todiscuss the estates liability for premiums and stamp taxes, because i rrespective of the solution to this question, the LuzonSuretys claim did state a cause of action, and its dismissal was erroneous.

Wherefore, the order appealed from is reversed, and the records are ordered remanded to the court of origin, withinstructions to proceed in accordance with law. Costs against the Administratrix-Appellee. SO ORDERED.

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia and Felix, JJ .,concur.


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Alvarez vs. IAC G.R. No. L-68053 May 7, 1990

THIRD DIVISION

G.R. No. L-68053 May 7, 1990

LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners, vs. THE HONORABLE INTERMEDIATEAPELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO YANES, and ILUMINADO

YANES, respondents.

Francisco G. Banzon for petitioner. Renecio R. Espiritu for private respondents.

FERNAN, C.J.:

This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division of theIntermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v. Dr. RodolfoSiason et al." affirmingthe decision dated July 8, 1974 of the Court of First Instance of Negros Occidental insofar as itordered the petitioners to pay jointly and severally the private respondents the sum of P20,000.00 representing the actualvalue of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental and reversingthe subject decisioninsofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney'sfees, respectively and (b) the resolution of said appellate court dated May 30, 1984, denying the motion for reconsiderationof its decision.

The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally known asLot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square meters, wasregistered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued on

October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A).

Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita, Iluminadoand Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio and Rosario Yanes, arechildren of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib.

1It is not clear why the latter is not included as a

party in this case.

Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not attend to theother portions of the two lots which had a total area of around twenty-four hectares. The record does not show whether thechildren of Felipe also cultivated some portions of the lots but it is established that Rufino and his children left the province tosettle in other places as a result of the outbreak of World War II. According to Estelita, from the "Japanese time up to peacetime", they did not visit the parcels of land in question but "after liberation", when her brother went there to get their share ofthe sugar produced therein, he was informed that Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were inpossession of Lot 773.

2

It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694 (29797)covering Lot 773-A with an area of 37,818 square meters.

3TCT No. RF 2694 describes Lot 773-A as a portion of Lot 773 of

the cadastral survey of Murcia and as originally registered under OCT No. 8804.

The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of Fortunato D.Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ).

4Said transfer certificate of title also contains a

certification to the effect that Lot 773-B was originally registered under OCT No. 8804.

On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum ofP7,000.00.

5Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebella's name.

6

After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de Fuentebella,his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a motion requestingauthority to sell Lots 773-A and 773-B.

7By virtue of a court order granting said motion,

8on March 24, 1958, Arsenia Vda.

de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez.9Hence, on April 1, 1958 TCT Nos. T-23165 and T-23166

covering Lots 773-A and 773-B were respectively issued to Rosendo Alvarez.10

Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita, Iluminado andJesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato Santiago, Arsenia Vda. deFuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of the ownership and possession ofLots 773 and 823. They also prayed that an accounting of the produce of the land from 1944 up to the filing of the complaintbe made by the defendants, that after court approval of said accounting, the share or money equivalent due the plaintiffs bedelivered to them, and that defendants be ordered to pay plaintiffs P500.00 as damages in the form of attorney's fees.

11

During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another lot forP25,000.00 to Dr. Rodolfo Siason.

12Accordingly, TCT Nos. 30919 and 30920 were issued to Siason,

13who thereafter,

declared the two lots in his name for assessment purposes.14

Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs, and assisted by theircounsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce, forfeit and quitclaims ( sic)


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any claim, monetary or otherwise, against the defendant Arsenia Vda. de Fuentebella in connection with the above-entitledcase."

15

On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case No. 5022,the dispositive portion of which reads:

WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to theplaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered byTransfer Certificates of Title Nos. T-23165 and T-23166 in the name of said defendant, and thereafter todeliver the possession of said lots to the plaintiffs. No special pronouncement as to costs.

SO ORDERED.16

It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid decision.

However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated October 20,1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and 773-B; that they were "inthe name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773 could not be delivered to the plaintiffsas Siason was "not a party per writ of execution."

17

The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the Yaneses) filedon July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a new certificate of titleand for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo Alvarez.

18Thereafter, the court

required Rodolfo Siason to produce the certificates of title covering Lots 773 and 823.

Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and 823, "in

good faith and for a valuable consideration without any knowledge of any lien or encumbrances against said properties"; thatthe decision in the cadastral proceeding

19could not be enforced against him as he was not a party thereto; and that the

decision in Civil Case No. 5022 could neither be enforced against him not only because he was not a party-litigant thereinbut also because it had long become final and executory.

20Finding said manifestation to be well-founded, the cadastral

court, in its order of September 4, 1965, nullified its previous order requiring Siason to surrender the certificates of titlementioned therein.

21

In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022. Siasonopposed it.

22In its order of September 28, 1968 in Civil Case No. 5022, the lower court, noting that the Yaneses had

instituted another action for the recovery of the land in question, ruled that at the judgment therein could not be enforcedagainst Siason as he was not a party in the case.

23

The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages.24

Named defendantstherein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of Deeds of NegrosOccidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to Siason (sic) for being nulland void; the issuance of a new certificate of title in the name of the Yaneses "in accordance with the sheriffs return ofservice dated October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery thereof couldnot be effected, or, if the issuance of a new title could not be made, that the Alvarez and Siason jointly and severally pay theYaneses the sum of P45,000.00. They also prayed that Siason render an accounting of the fruits of Lot 773 from November13, 1961 until the filing of the complaint; and that the defendants jointly and severally pay the Yaneses moral damages ofP20,000.00 and exemplary damages of P10,000.00 plus attorney's fees of P4, 000.00.

25

In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been passedupon by the court in its order of September 4, 1965, had become res judicataand the Yaneses were estopped fromquestioning said order.

26On their part, the Alvarez stated in their answer that the Yaneses' cause of action had been

"barred by res judicata, statute of limitation and estoppel."27

In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in question thru anagent as he was then in Mexico pursuing further medical studies, was a buyer in good faith for a valuable consideration.

Although the Yaneses were negligent in their failure to place a notice of lis pendens"before the Register of Deeds of NegrosOccidental in order to protect their rights over the property in question" in Civil Case No. 5022, equity demanded that theyrecover the actual value of the land because the sale thereof executed between Alvarez and Siason was without courtapproval.

28The dispositive portion of the decision states:

IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the followingmanner:

A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) herebydismmissed,

B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children of thedeceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the sum ofP20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre, NegrosOccidental; the sum of P2,000.00 as actual damages suffered by the plaintiff; the sum of P5,000.00


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representing moral damages and the sum of P2.000 as attorney's fees, all with legal rate of interest fromdate of the filing of this complaint up to final payment.

C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora andRaymundo, all surnamed Alvarez is hereby dismissed.

D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the costs ofthis suit.

SO ORDERED. 29

The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31, 198330

affirmed the lowercourt's decision "insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffs-appellees the sum ofP20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, NegrosOccidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages,moral damages and attorney's fees, respectively."

31The dispositive portion of said decision reads:

WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to payjointly and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual value of LotsNos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as itawarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages andattorney's fees, respectively. No costs.

SO ORDERED.32

Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same.

Hence, the instant petition. ln their memorandum petitioners raised the following issues:

1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked andraised by the petitioners in the lower court.

2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any, asalleged in their complaint dated February 21, 1968 which has been docketed in the trial court as CivilCase No. 8474 supra, are forever barred by statute of limitation and/or prescription of action andestoppel.

3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of thepetitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil Case No.8474, supra where the private respondents had unqualifiedly and absolutely waived, renounced andquitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and 773-B ofMurcia Cadastre as appearing in their written manifestation dated November 6, 1962 (Exhibits "4"Siason) which had not been controverted or even impliedly or indirectly denied by them.

4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-Aand 773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed ortransmitted by operations (sic) of law to the petitioners without violation of law and due process .

33

The petition is devoid of merit.

As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review the decisionin Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents. Said decision had longbecome final and executory and with the possible exception of Dr. Siason, who was not a party to said case, the decision inCivil Case No. 5022 is the law of the case between the parties thereto. It ended when Alvarez or his heirs failed to appealthe decision against them.

34

Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, solong as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate.

35As

consistently ruled by this Court, every litigation must come to an end. Access to the court is guaranteed. But there must be alimit to it. Once a litigant's right has been adjudicated in a valid final judgment of a competent court, he should not be granted

an unbridled license to return for another try. The prevailing party should not be harassed by subsequent suits. For, ifendless litigation were to be allowed, unscrupulous litigations will multiply in number to the detriment of the administration ofjustice.

36

There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in Civil CaseNo. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have been illegallydeprived of ownership and possession of the lots in question.

37In fact, Civil Case No. 8474 now under review, arose from

the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private respondents Yaneses, thesame having been sold during the pendency of the case by the petitioners' father to Dr. Siason who did not know about thecontroversy, there being no lis pendens annotated on the titles. Hence, it was also settled beyond question that Dr. Siason isa purchaser in good faith.


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Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on November 11,1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil Case No. 5022 to pay theplaintiffs (private respondents herein) the amount of P20,000.00 representing the actual value of the subdivided lots indispute. It did not order defendant Siason to pay said amount.

38

As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose propertyhas been wrongfully or erroneously registered in another's name is to bring an ordinary action in the ordinary court of justicefor reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages.

39"It is one

thing to protect an innocent third party; it is entirely a different matter and one devoid of justification if deceit would berewarded by allowing the perpetrator to enjoy the fruits of his nefarious decided As clearly revealed by the undeviating line ofdecisions coming from this Court, such an undesirable eventuality is precisely sought to be guarded against."

40

The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor of privaterespondents, it cannot now be reopened in the instant case on the pretext that the defenses of prescription and estoppelhave not been properly considered by the lower court. Petitioners could have appealed in the former case but they did not.They have therefore foreclosed their rights, if any, and they cannot now be heard to complain in another case in order todefeat the enforcement of a judgment which has longing become final and executory.

Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo Alvarez toDr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his death.

Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general transmissibility of therights and obligations of the deceased to his legitimate children and heirs. Thus, the pertinent provisions of the Civil Codestate:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to theextent of the value of the inheritance, of a person are transmitted through his death to another or otherseither by his will or by operation of law.

Art. 776. The inheritance includes all the property, rights and obligations of a person which are notextinguished by his death.

Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case wherethe rights and obligations arising from the contract are not transmissible by their nature, or by stipulationor by provision of law. The heir is not liable beyond the value of the property received from the decedent.

As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon Surety Co.,Inc.

41

The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of ourRules of Court that money debts of a deceased must be liquidated and paid from his estate before theresidue is distributed among said heirs (Rule 89). The reason is that whatever payment is thus madefrom the state is ultimately a payment by the heirs or distributees, since the amount of the paid claim infact diminishes or reduces the shares that the heirs would have been entitled to receive.

Under our law, therefore. the general rule is that a party's contractual rights and obligations aretransmissible to the successors.

The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties that, asobserved by Victorio Polacco has characterized the history of these institutions. From the Romanconcept of a relation from person to person, the obligation has evolved into a relation from patrimony topatrimony with the persons occupying only a representative position, barring those rare cases where theobligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its performance by aspecific person and by no other.

xxx xxx xxx

Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father'stransaction, which gave rise to the present claim for damages. That petitioners did not inherit the property involved herein isof no moment because by legal fiction, the monetary equivalent thereof devolved into the mass of their father's hereditary

estate, and we have ruled that the hereditary assets are always liable in their totality for the payment of the debts of theestate.

42

It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance. With thisclarification and considering petitioners' admission that there are other properties left by the deceased which are sufficient tocover the amount adjudged in favor of private respondents, we see no cogent reason to disturb the findings and conclusionsof the Court of Appeals.

WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is herebyAFFIRMED. Costs against petitioners.

SO ORDERED. Gutierrez, Jr., Feliciano and Cortes, JJ., concur. Bidin J., took no part.


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Lee vs. RTC 423 SCRA 497 (2004)

THIRD DIVISION

[G.R. No. 146006. April 22, 2005]

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary, respectively, of

Philippine International Life Insurance Company, and FILIPINO LOAN ASSISTANCEGROUP, peti t ioners, vs. REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 85 presided by JUDGEPEDRO 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. DIVINAENDERES claiming to be Special Administratrix, and other persons/public officers acting for and in theirbehalf, 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 indirectcontempt of Court and for the disbarment and/or imposition of disciplinary sanctions on petitioners counsel

[1]for 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 25years 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 (allsurnamed Ortaez), the surviving legitimate spouse and legitimate children of the decedent respectively, executed anextrajudicial 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 Group (FLAG).

[2]

However, private respondent, one of the illegitimate children of the decedent, was in the meantime appointed asspecial administratrix of the 2,029 Philinterlife shares of stock. When Jose Ortaez filed an omnibus motion seeking theapproval of the sale of the shares of stock to FLAG and the release of private respondent as special administratrix, the trialcourt in its August 11, 1997 order, denied said motion. On August 29, 1997, the intestate court declared the extrajudicialsettlement made by Juliana, Jose and Rafael partially void ab initio insofar as the transfer of the Philinterlife shares wasconcerned. These orders were later upheld by the Court of Appeals (CA) and this Court.

In its order dated July 6, 2000, the intestate court granted the motion for execution filed by private respondent:

WHEREFORE, premises considered, let a writ of execution issue as follows:

1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of the Estate of Dr. Juvencio

Ortaez to Filipino Loan Assistance Group (FLAG);2. Commanding the President and the Corporate Secretary of Philinterlife to reinstate in the stock and transfer

book of Philinterlife the 2,029 Philinterlife shares of stock in the name of the Estate of Dr. Juvencio P.Ortaez as the owner thereof without prejudice to other claims for violation of pre-emptive rights pertaining tothe said 2,029 Philinterlife shares;

3. Directing the President and the Corporate Secretary of Philinterlife to issue stock certificates of Philinterlife for2,029 shares in the name of the Estate of Dr. Juvencio P. Ortaez as the owner thereof without prejudice toother claims for violation of pre-emptive rights pertaining to the said 2,029 Philinterlife shares; and

4. Confirming that only the Special Administratrix, Ma. Divina Ortaez-Enderes, has the power to exercise all therights appurtenant to the said shares, including the right to vote and to receive dividends;

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledgeand allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrainfrom resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the free exercise

thereof under pain of contempt.6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or persons

claiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) days fromreceipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of executionwith dispatch to forestall any/or further damage to the Estate.

SO ORDERED.[3]

Unfortunately, however, the writ of execution was not enforced due to the resistance of herein petitioners. To blockthe execution, petitioners filed before the CA a petition for certiorari, docketed as CA G.R. SP No. 59736, questioning the
http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/146006.htm#_ftn1


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order of execution, among others. The petition was dismissed outright on July 26, 2000. Petitioners then elevated the caseto us. On February 23, 2004, a decision was promulgated by the Third Division of this Court:

[4]

WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in CA-G.R. S.P. No. 59736 dated July26, 2000, dismissing petitioners petition for certiorari and affirming the July 6, 2000 order of the trial court which ordered theexecution of its (trial courts) August 11 and 29, 1997 orders, is hereby AFFIRMED.

SO ORDERED.[5]

On April 27, 2004, petitioners filed an omnibus motion for reconsideration and referral of this case to the en bancallegedly in view of the conflicting rulings of two divisions of the Court. In a resolution dated May 26, 2004, the Court deniedthe motion for lack of merit:

The Court deliberated on the petitioners omnibus motion for reconsideration of the decision of February 23, 2004 whichdenied the petition for review on certiorari. It appears to the Court that the motion merely reiterates the same argumentsearlier raised and does not present any substantial reason not previously invoked nor any matter not already considered andpassed upon by the Court.

ACCORDINGLY, the Court Resolved to DENY the motion for reconsideration for lack of merit. This denial is FINAL.[6]

Thus on July 9, 2004, the February 23, 2004 decision became final and executory, and was recorded in the book ofentries of judgments. On October 1, 2004, an alias writ of execution was issued by the intestate court (the court of origin).In said writ, the deputy sheriffs were ordered to enforce the August 11 and 29, 1997 and July 6, 2000 orders of the intestatecourt.

Instead of complying with the writ, petitioners filed on October 15, 2004, a motion to suspend execution/period of

compliance by reason of supervening events, raising the following arguments: (1) the intestate court had already revokedthe appointment of private respondent as special administratrix; (2) there was a need to lay down the legal procedure in theimplementation of the writ and (3) there must be a declaration that the price per share of the 2,029 shares was only P1,000which was its book value at the time the shares were sold in 1989 and 1991 .

[7]

Private respondent went back to this Court and filed this omnibus motion asserting that petitioners made a travesty ofthe final and executory decisions of the Lower Courts and this Honorable Court when they refused to comply with the

Alias Writ of Execution issued by the Lower Court.[8]

Before we discuss the substance of private respondents motion, we note that attached to it were mere photocopies ofthe supporting documents and not certified true copies of documents or papers involved therein as required by the Rules ofCourt.

[9]However, given that the motion was verified and petitioners, who were given a chance to oppose or comment on it,

made no objection thereto, we brush aside the defect in form and proceed to discuss the merits of the motion.

Furthermore, as held in Remman Enterprises, Inc. v. CA,[10]

Section 3, Rule 71 of the Rules of Court outlines theprocedural requisites before the accused may be punished for indirect contempt: (1) the filing of a written charge and (2) anopportunity to be heard by himself or counsel. All that the law requires is that there is a charge in writing duly filed in court

and an opportunity given to the person charged to be heard by himself or counsel. What is important is that the allegedcontemner be granted an opportunity to meet the charges against him and to be heard in his defense.

[11]Petitioners were

given this opportunity; they in fact filed their Opposition.[12]

Petitioners assert that private respondent engaged in forum-shopping because the latter had previously filed a similarmotion in the intestate court. The argument has no merit. The charge for indirect contempt must be filed before the courtagainst which the indirect contempt was committed. Section 4, Rule 71 states:

SEC. 5. Where charge to be filed. Where the charge for indirect contempt has been committed against a Regional TrialCourt or a court of equivalent or higher rank, or against an officer appointed by it, the charge may be filed with such court.xxx

Hence, the charge for indirect contempt for disobedience to our February 23, 2004 decision was correctly brought tous. As we explained in the case of Igot v. Court of Appeals:

In whatever context it may arise, contempt of court involves the doing of an act, or the failure to do an act, in such a manneras to create an affront to the court and the sovereign dignity with which it is clothed. As a matter of practical judicial

administration, jurisdiction has been felt to properly rest in only one tribunal at a time with respect to a given controversy.Only the court which rendered the order commanding the doing of a certain act is vested with the right to determine whetheror not the order has been complied with, or whether a sufficient reason has been given for noncompliance, and, therefore,whether a contempt has been committed. It is a well-established rule that the power to determine the existence of contemptof court rests exclusively with the court contemned. No court is authorized to punish a contempt against another.

The rationale that is usually advanced for the general rule ... is that, contempt proceedings are sui generisand are triableonly by the court against whose authority the contempts are charged; the power to punish for contempt exists for thepurpose of enabling a court to compel due decorum and respect in its presence and due obedience to its judgments, ordersand processes and in order that a court may compel obedience to its orders, it must have the right to inquire whether therehas been any disobedience thereof, for to submit the question of disobedience to another tribunal would operate to deprivethe proceeding of half its efficiency.

[13]
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We now proceed to the merits of the motion to cite for indirect contempt and for imposition of disciplinary sanctions.

The private respondent alleges that the following acts of the petitioners constituted indirect contempt under Section 3,Rule 71 of the Rules of Court: (1) petitioners failure to comply with the alias writ of execution served upon them on October12, 2004 and (2) their act of filing a patently baseless motion (to suspend execution/period of compliance by reason ofsupervening events) which was obviously intended to defeat the implementation of the final and executory decision of thisCourt.

On the other hand, petitioners allege that the immediate execution of the subject decision would be inequitable andshould be suspended pending an order of clarification of certain matters. According to them, the certificates of the shares ofstock were turned over to the intestate court and not to private respondent because her appointment as specialadministratrix had already been revoked by the court.

Petitioners obstinate refusal to abide by this Courts February 23, 2004 decision demonstrates a contumaciousattitude which this Court cannot countenance. This contumacy becomes all the more glaring because of the strongly wordedadmonition in our decision that (p)etitioners and all parties claiming rights under them are hereby warned not to furtherdelay the execution of the Orders of the intestate court dated August 11 and August 29, 1997.

[14]The previously quoted July

6, 2000 order of the intestate court, which was affirmed by this Court, also contained the following directives:

xxx xxx xxx

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledgeand allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrainfrom resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the freeexercise thereof under pain of contempt.

6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or personsclaiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) daysfrom receipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of executionwith dispatch to forestall any/or further damage to the Estate.

SO ORDERED.[15]

(Emphasis supplied)

Clearly, petitioners defiant non-compliance with these directives, as proved by the sheriffs report dated October 13,2004, constituted indirect contempt. The pertinent portion of this report stated:

That on October 12, 2004, when Sheriff Borja went to the Philenterlife (sic) Office to check whether there was alreadycompliance with the Alias Writ of Execution, one of their staff told Sheriff Borja that Mr. Jose Lee wanted to talk with SheriffBorja over the Telephone. In their telephone conversation, Mr. Jose Lee told Sheriff Borja that he had already consulted hislawyer regarding the matter.

WHEREFORE, we respectfully submit this report to the Honorable Court with the information that up to this writing,Philenterlife (sic) has not submitted their compliance to the Sheriff or to the Court.[16]

Petitioners act of filing their motion to suspend execution/period of compliance by reason of supervening events alsoshowed their continuing, stubborn resistance to this Courts judgment. Indeed, one of the exceptions to the principle ofimmutability of final judgments is the existence of superveningevents. Supervening events refer to facts whichtranspire after judgment has become final and executory or to new circumstances which develop after the judgment hasacquired finality.

[17]

The private respondent alleges that the revocation of her appointment as special administratrix was made by theintestate court in its May 12, 2003 and September 4, 2003 orders.

[18]This is not disputed by the petitioners. In short, this fact

already existed before the decision of this Court was promulgated on February 23, 2004 and before it became final andexecutory on July 9, 2004. Therefore, the revocation of the appointment of private respondent as special administratrix wasevidently not a supervening event.

Furthermore, this issue had already been raised in petitioners motion for reconsideration[19]

of this Courts February23, 2004 decision and passed upon by the Court in its resolution dated May 26, 2004 denying the motion for lack of merit.

Likewise, the increase in the value of the shares from P1,000 to P4,000 was also raised in the same motion forreconsideration.

[20]The Court stated that the motion merely reiterate(d) the same arguments earlier raised and (did) not

present any substantial reason not previously invoked nor any matter not already considered and passed upon by theCourt.

[21]

Petitioners insist that there must be an order laying down the legal procedure for the implementation of the writ, whichimplementation did not include taking over the management of Philinterlife and obtaining possession of office premises. Wedisagree. The execution should not be suspended for that reason.

Our February 23, 2004 ruling categorically stated that the estate of Dr. Juvencio P. Ortaez was the lawful owner of2,029 Philinterlife shares. As lawful owner of the Philinterlife shares, the estate can exercise all the rights of ownership,including the right to vote the shares. If, by voting the shares, the estate is able to elect its own representatives who
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succeed in attaining management control of Philinterlife, then let it be as such would be a legitimate consequence of ourFebruary 23, 2004 decision.

We call particular attention to the fact that in our February 23, 2004 decision, we noted that petitioners, with the rest ofthe FLAG-controlled directors and stockholders, increased the authorized capital stock of Philinterlife, diluting in the processthe 2,029 shares of the estate

[22]representing 50.725% of Philinterlife. We observed that this was obviously calculated to

make it difficult for the estate to reassume its controlling interest in Philinterlife. Thus, we ruled that, considering the nullity ofthe sale of the 2,029 shares to FLAG, the increase in Philinterlifes authorized capital stock was void ab

initio.[23]

Consequently, any approval by the Securities and Exchange Commission of this increase would likewise be void abinitio.

Moreover, the directives to petitioners Jose C. Lee and Alma Aggabao, as president and corporate secretary,respectively, of Philinterlife, were sufficiently clear and needed absolutely no clarification in order to exact their compliancethereto. Since the nullity of the sale of the 2,029 Philinterlife shares to FLAG had been confirmed, they were ordered to:

(1) reinstate the shares in the name of the estate in the stock and transfer book;

(2) issue stock certificates in the name of the estate;

(3) acknowledge and allow the special administratrix to exercise all the rights appurtenant to the shares;

(4) refrain from resorting to any action which may tend to directly or indirectly impede, obstruct or bar the freeexercise of these rights and

(5) comply with the order within three days from receipt.

The first two directives were undoubtedly covered by the duties and functions of the corporate secretary and presidentof a corporation. The next two ordered them not to resist the writ and the last directive provided a period for theircompliance. Given the foregoing, there was never any need to clarify the procedure for the implementation of the writ.

Pertinent portions of Section 3, Rule 71 of the Rules of Court read:

Sec. 3. Indirect contempt to be punished after charge and hearing.After a charge in writing has been filed, and anopportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard byhimself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:

xxx xxx xxx

(b) Disobedience of or resistance to a lawful writ, process, order or judgment of a court xxx

(c ) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contemptxxx

(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;

xxx xxx xxx

In the recent case of Heirs of Trinidad de Leon vda. de Roxas v. Court of Appeals , we explained the concept ofcontempt of court:

Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to bring the authorityand administration of the law into disrespect or to interfere with or prejudice parties litigant or their witnesses during litigation(12 Am. Jur. 389, cited in 14 SCRA 813).

Contempt of court is defined as a disobedience to the Court by acting in opposition to its authority, justice and dignity. Itsignifies not only a willful disregard or disobedience of the courts orders, but such conduct as tend s to bring the authority ofthe court and the administration of law into disrepute or in some manner to impede the due administration of justice (17C.J.S. 4).

This Court has thus repeatedly declared that the power to punish for contempt is inherent in all courts and is essential to thepreservation of order in judicial proceedings and to the enforcement of judgments, orders and mandates of the court, andconsequently, to the due administration of justice (Slade Perkins vs. Director of Prisons, 58 Phil. 271; In re Kelly, 35 Phil.

944; Commissioner of Immigration vs. Cloribel, 20 SCRA 1241; Montalban vs. Canonoy, 38 SCRA 1).[24]

Petitioners disobedience to thisCourts judgment is an affront to the Court and the dignity with which it is clothed.Their attempt to raise issues already laid to rest by a final and executory judgment of no less than the highest tribunal of theland constitutes a disrespectful and insolent defiance of the authority of this Court and impedes the speedy administration of

justice.[25]

As mentioned in the beginning of this Resolution, this controversy has been pending for 25 long years already.Apparently, petitioners want to prolong it to eternity.

In Sacdalan v. Court of Appeals, we said:
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Well-settled is the principle that a decision that has acquired finality becomes immutable and unalterable and may no longerbe modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether itwill be made by the court that rendered it or by the highest court of the land.

The reason for this is that litigation must end and terminate sometime and somewhere, and it is essential to an effective andefficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits ofthe verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt toprolong the controversies.

The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tuncentries which causeno prejudice to any party, void judgments, and whenever circumstances transpire afterthe finality of the decision renderingits execution unjust and inequitable.

[26]

This case does not fall under any of the recognized exceptions. Moreover, the immutability of the February 23, 2004decision is all the more emphasized in this case since it is this Court, the highest Court of the land and final arbiter of alllegal controversies, that promulgated it. Thus, petitioners are bound by the finality of our decision and cannot, under theguise of a phony motion to suspend execution/period of compliance by reason of supervening events, reopen a case alreadydecided with finality. Nor should they be permitted to litigate anew questions or issues already laid to rest.

The fact is that virtually the same issues have been elevated to this Court no less than three times: in G.R. Nos.128525, 135177 and 146006. Private respondent obtained a writ of execution in 2000 but her attempt to enforce the writwas unsuccessful. After our February 23, 2004 decision became final and executory, she obtained an alias writ of executionon October 1, 2004 but the petitioners again managed to frustrate her efforts to execute the decision and torpedo itsenforcement.

As we ruled in Beautifont, Inc. v. Court of Appeals: Considerable time has already elapsed and, to serve the ends of justice, it is time that [the] controversy is finally laid torest. Sound practice seeks to accommodate the theory which avoids waste of time, effort and expense, both to the partiesand the government, not to speak of delay in the disposal of the case. A marked characteristic of our judicial set-up is thatwhere the dictates of justice so demand ... the Supreme Court should act, and act with finality. In this case, the dictates of

justice do demand that this Court act, and act with finality.[27]

This Court is becoming impatient with the devious tricks and maneuvers of petitioners.

Section 7, Rule 71 of the Rules of Court penalizes indirect contempt as follows:

Sec. 7. Punishment for indirect contempt.If the respondent is adjudged guilty of indirect contempt committed against aRegional Trial Court or a court of equivalent or higher rank, he may be punished by a fine not exceeding thirty thousandpesos or imprisonment not exceeding six (6) months or both. xxx

Petitioners Jose C. Lee and Alma Aggabao, for their defiance and resistance to the October 1, 2004 alias writ ofexecution enforcing this Courts February 23, 2004 decision resulting in the frustration of its execution are hereby

adjudged guilty of indirect contempt.

Finally, with regard to the administrative charge against petitioners counsel, Atty. Teodorico Fernandez, pursuant toparagraph 2, Section 1, Rule 139-B of the Rules of Court, this Court resolves to refer it to the Commission on Bar Disciplineof the Integrated Bar of the Philippines for investigation, report and recommendation.

WHEREFORE, petitioners Jose C. Lee and Alma Aggabao, president and corporate secretary, respectively, ofpetitioner Philippine International Life Insurance Company, are hereby found GUILTY of INDIRECT CONTEMPT for whichthe maximum FINE of P30,000 is hereby imposed on each of them, payable in full within five days from receipt of thisresolution. They are furthermore given a final non-extendible period of five days from receipt of this resolution within whichto comply within our decision and orders as aforementioned. Petitioners are hereby warned not to file any more pleadings inconnection herewith. Failure to comply with our decision, orders and P30,000 fine within the five-day period will subjectthem to imprisonment till full compliance.

In view hereof, petitioners counsel, Atty. Teodorico Fernandez, is likewise strongly warned to refrain from any furtherattempts to make a mockery of our judicial processes.

SO ORDERED.

Panganiban, (Chairman), Carpio-Morales and Garcia, JJ., concur.

Sandoval-Gutierrez, J., no part.
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De Borja vs. Vda. de Borja 46 SCRA 577

EN BANC

G.R. No. L-28040 August 18, 1972

TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administrator-appellee; JOSE DE BORJA, as

administrator, CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO DE BORJA (deceased) as Children ofJosefa Tangco, appellees,vs.TASIANA VDA. DE DE BORJA, Special Administratrix of the Testate Estate of Francisco de Borja,appellant. .

G.R. No L-28568 August 18, 1972

TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA. DE DE BORJA, special Administratrixappellee,vs.JOSE DE BORJA, oppositor-appellant.

G.R. No. L-28611 August 18, 1972

TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate Estate of the late Franci

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