FIRST DIVISION
G.R. No. 125835 July
30, 1998
NATALIA CARPENA OPULENCIA, petitioner,
vs.
COURT OF APPEALS, ALADIN SIMUNDAC and MIGUEL OLIVAN,
respondents.
PANGANIBAN, J.:
Is a contract to sell a real property involved in restate
proceedings valid and binding without the approval of the probate court?
Statement of the Case
This is the main question raised in this petition for review
before us, assailing the Decision 1 of the Court of Appeals 2 in CA-GR CV No.
41994 promulgated on February 6, 1996 and its Resolution 3 dated July 19, 1996.
The challenged Decision disposed as follows:
WHEREFORE, premises considered, the order of the lower court
dismissing the complaint is SET ASIDE and judgment is hereby rendered declaring
the CONTRACT TO SELL executed by appellee in favor of appellants as valid and
binding, subject to the result of the administration proceedings of the testate
Estate of Demetrio Carpena.
SO ORDERED. 4
Petitioner's Motion for Reconsideration was denied in the
challenged Resolution. 5
The Facts
The antecedent facts, as succinctly narrated by Respondent
Court of Appeals, are:
In a complaint for specific performance filed with the court
a quo [herein private respondents] Aladin Simundac and Miguel Oliven alleged
that [herein petitioner] Natalia Carpena Opulencia executed in their favor a
"CONTRACT TO SELL" Lot 2125 of the Sta. Rosa Estate, consisting of
23,766 square meters located in Sta. Rosa, Laguna at P150.00 per square meter;
that plaintiffs paid a downpayment of P300,000.00 but defendant, despite
demands, failed to comply with her obligations under the contract. [Private
respondents] therefore prayed that [petitioner] be ordered to perform her
contractual obligations and to further pay damages, attorney's fee and
litigation expenses.
In her traverse, [petitioner] admitted the execution of the
contract in favor of plaintiffs and receipt of P300,000.00 as downpayment.
However, she put forward the following affirmative defenses: that the property
subject of the contract formed part of the Estate of Demetrio Carpena
(petitioner's father), in respect of which a petition for probate was filed
with the Regional Trial Court, Branch 24, Biñan, Laguna; that at the time the
contract was executed, the parties were aware of the pendency of the probate
proceeding; that the contract to sell was not approved by the probate court;
that realizing the nullity of the contract [petitioner] had offered to return
the downpayment received from [private respondents], but the latter refused to
accept it; that [private respondents] further failed to provide funds for the
tenant who demanded P150,00.00 in payment of his tenancy rights on the land;
that [petitioner] had chosen to rescind the contract.
At the pre-trial conference the parties stipulated on [sic]
the following facts:
1. That on February
3, 1989, [private respondents] and [petitioner] entered into a contract to sell
involving a parcel of land situated in Sta. Rosa, Laguna, otherwise known as
Lot No. 2125 of the Sta. Rosa Estate.
2. That the price
or consideration of the said sell [sic] is P150.00 per square meters;
3. That the amount
of P300,000.00 had already been received by [petitioner];
4. That the parties
have knowledge that the property subject of the contract to sell is subject of
the probate proceedings;
5. That [as] of
this time, the probate Court has not yet issued an order either approving or
denying the said sale. (p. 3, appealed Order of September 15, 1992, pp.
109-112, record).
[Private respondents] submitted their evidence in support of
the material allegations of the complaint. In addition to testimonies of
witnesses, [private respondents] presented the following documentary evidences:
(1) Contract to Sell (Exh A); (2) machine copy of the last will and testament
of Demetrio Carpena (defendant's father) to show that the property sold by
defendant was one of those devised to her in said will (Exh B); (3) receipts
signed by defendant for the downpayment in the total amount of P300,000.00
(Exhs C, D & E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her
evidence, filed a Demurrer to Evidence. In essence, defendant maintained that
the contract to sell was null and void for want of approval by the probate
court. She further argued that the contract was subject to a suspensive
condition, which was the probate of the will of defendant's father Demetrio
Carpena. An Opposition was filed by [private respondents]. It appears further
that in an Order dated December 15, 1992 the court a quo granted the demurrer
to evidence and dismissed the complaint. It justified its action in dismissing
the complaint in the following manner:
It is noteworthy that when the contract to sell was
consummated, no petition was filed in the Court with notice to the heirs of the
time and place of hearing, to show that the sale is necessary and beneficial. A
sale of properties of an estate as beneficial to the interested parties must
comply with the requisites provided by law, (Sec. 7, Rule 89, Rules of Court)
which are mandatory, and without them, the authority to sell, the sale itself,
and the order approving it, would be null and void ab initio. (Arcilla vs.
David, 77 Phil. 718, Gabriel, et al., vs. Encarnacion, et al., L-6736, May 4,
1954; Bonaga vs. Soler, 2 Phil. 755) Besides, it is axiomatic that where the
estate of a deceased person is already the subject of a testate or intestate
proceeding, the administrator cannot enter into any transaction involving it
without prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123
SCRA 767).
As held by the Supreme Court, a decedent's representative
(administrator) is not estopped from questioning the validity of his own void
deed purporting to convey land. (Bona vs. Soler, 2 Phil, 755). In the case at
bar, the [petitioner,] realizing the illegality of the transaction[,] has
interposed the nullity of the contract as her defense, there being no approval
from the probate Court, and, in good faith offers to return the money she
received from the [private respondents]. Certainly, the administratrix is not
estop[ped] from doing so and the action to declare the inexistence of contracts
do not prescribe. This is what precipitated the filing of [petitioner's]
demurrer to evidence. 6
The trial court's order of dismissal was elevated to the
Court of Appeals by private respondents who alleged:
1. The lower court
erred in concluding that the contract to sell is null and void, there being no
approval of the probate court.
2. The lower court
erred in concluding that [petitioner] in good faith offers to return the money
to [private respondents].
3. The lower court
erred in concluding that [petitioner] is not under estoppel to question the
validity of the contract to sell.
4. The lower court
erred in not ruling on the consideration of the contract to sell which is
tantamount to plain unjust enrichment of [petitioner] at the expense of
[private respondents]. 7
Public Respondent's Ruling
Declaring the Contract to Sell valid, subject to the outcome
of the testate proceedings on Demetrio Carpena's estate, the appellate court
set aside the trial court's dismissal of the complaint and correctly ruled as
follows:
It is apparent from the appealed order that the lower court
treated the contract to sell executed by appellee as one made by the
administratrix of the Estate of Demetrio Carpena for the benefit of the estate.
Hence, its main reason for voiding the contract in question was the absence of
the probate court's approval. Presumably, what the lower court had in mind was
the sale of the estate or part thereof made by the administrator for the
benefit of the estate, as authorized under Rule 89 of the Revised Rules of
Court, which requires the approval of the probate court upon application
therefor with notice to the heirs, devisees and legatees.
However, as adverted to by appellants in their brief, the
contract to sell in question is not covered by Rule 89 of the Revised Rules of
Court since it was made by appellee in her capacity as an heir, of a property
that was devised to her under the will sought to be probated. Thus, while the
document inadvertently stated that appellee executed the contract in her
capacity as "executrix and administratrix" of the estate, a cursory
reading of the entire text of the contract would unerringly show that what she
undertook to sell to appellants was one of the "other properties given to
her by her late father," and more importantly, it was not made for the
benefit of the estate but for her own needs. To illustrate this point, it is
apropos to refer to the preambular or preliminary portion of the document,
which reads:
WHEREAS, the SELLER is the lawful owner of a certain parcel
of land, which is more particularly described as follows:
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
WHEREAS, the SELLER suffers difficulties in her living and
has forced to offer the sale of the above-described property, "which
property was only one among the other properties given to her by her late
father," to anyone who can wait for complete clearance of the court on the
Last Will Testament of her father.
WHEREAS, the SELLER in order to meet her need of cash, has
offered for sale the said property at ONE HUNDRED FIFTY PESOS (150.00)
Philippine Currency, per square meter unto the BUYERS, and with this offer, the
latter has accepted to buy and/or purchase the same, less the area for the road
and other easements indicated at the back of Transfer Certificate of Title No.
2125 duly confirmed after the survey to be conducted by the BUYER's Licensed
Geodetic Engineer, and whatever area [is] left. (Emphasis added).
To emphasize, it is evident from the foregoing clauses of
the contract that appellee sold Lot 2125 not in her capacity as executrix of
the will or administratrix of the estate of her father, but as an heir and more
importantly as owner of said lot which, along with other properties, was
devised to her under the will sought to be probated. That being so, the
requisites stipulated in Rule 89 of the Revised Rules of Court which refer to a
sale made by the administrator for the benefit of the estate do not apply.
xxx xxx xxx
It is noteworthy that in a Manifestation filed with this
court by appellants, which is not controverted by appellee, it is mentioned
that the last will and testament of Demetrio Carpena was approved in a final
judgment rendered in Special Proceeding No. B-979 by the Regional Trial Court,
Branch 24 Biñan, Laguna. But of course such approval does not terminate the
proceeding[s] since the settlement of the estate will ensue. Such proceedings
will consist, among others, in the issuance by the court of a notice to
creditors (Rule 86), hearing of money claims and payment of taxes and estate
debts (Rule 88) and distribution of the residue to the heirs or persons
entitled thereto (Rule 90). In effect, the final execution of the deed of sale
itself upon appellants' payment of the balance of the purchase price will have
to wait for the settlement or termination of the administration proceedings of
the Estate of Demetrio Carpena. Under the foregoing premises, what the trial
court should have done with the complaint was not to dismiss it but to simply
put on hold further proceedings until such time that the estate or its residue
will be distributed in accordance with the approved will.
The rule is that when a demurrer to the evidence is granted
by the trial court but reversed on appeal, defendant loses the right to adduce
his evidence. In such a case, the appellate court will decide the controversy
on the basis of plaintiff's evidence. In the case at bench, while we find the
contract to sell valid and binding between the parties, we cannot as yet order
appellee to perform her obligations under the contract because the result of
the administration proceedings of the testate Estate of Demetrio Carpena has to
be awaited. Hence, we shall confine our adjudication to merely declaring the
validity of the questioned Contract to Sell.
Hence, this appeal. 8
The Issue
Petitioner raises only one issue:
Whether or not the Contract to Sell dated 03 February 1989
executed by the [p]etitioner and [p]rivate [r]espondent[s] without the
requisite probate court approval is valid.
The Court's Ruling
The petition has no merit.
Contract to Sell Valid
In a nutshell, petitioner contends that "where the
estate of the deceased person is already the subject of a testate or intestate
proceeding, the administrator cannot enter into any transaction involving it
without prior approval of the Probate Court." 9 She maintains that the
Contract to Sell is void because it was not approved by the probate court, as
required by Section 7, Rule 89 of the Rules of Court:
Sec. 7. Regulations
for granting authority to sell, mortgage, or otherwise encumber estate. — The
court having jurisdiction of the estate of the deceased may authorize the
executor or administrator to sell, mortgage, or otherwise encumber real estate,
in cases provided by these rules and when it appears necessary or beneficial,
under the following regulations:
xxx xxx xxx
Insisting that the above rule should apply to this case,
petitioner argues that the stipulations in the Contract to Sell require her to
act in her capacity as an executrix or administratrix. She avers that her
obligation to eject tenants pertains to the administratrix or executrix, the
estate being the landlord of the said tenants. 10 Likewise demonstrating that
she entered into the contract in her capacity as executor is the stipulation
that she must effect the conversion of subject land from irrigated rice land to
residential land and secure the necessary clearances from government offices.
Petitioner alleges that these obligations can be undertaken only by an executor
or administrator of an estate, and not by an heir. 11
The Court is not persuaded. As correctly ruled by the Court
of Appeals, Section 7 of Rule 89 of the Rules of Court is not applicable,
because petitioner entered into the Contract to Sell in her capacity as an
heiress, not as an executrix or administratrix of the estate. In the contract,
she represented herself as the "lawful owner" and seller of the
subject parcel of land. 12 She also explained the reason for the sale to be
"difficulties in her living" conditions and consequent "need of
cash." 13 These representations clearly evince that she was not acting on
behalf of the estate under probate when she entered into the Contract to Sell.
Accordingly, the jurisprudence cited by petitioners has no application to the
instant case.
We emphasize that hereditary rights are vested in the heir
or heirs from the moment of the decedent's death. 14 Petitioner, therefore,
became the owner of her hereditary share the moment her father died. Thus, the
lack of judicial approval does not invalidate the Contract to Sell, because the
petitioner has the substantive right to sell the whole or a part of her share
in the estate of her late father. 15 Thus, in Jakosalem vs. Rafols, 16 the
Court resolved an identical issue under the old Civil Code and held:
Art. 440 of the Civil Code provides that "the possession
of hereditary property is deemed to be transmitted to the heir without
interruption from the instant of the death of the decedent, in case the
inheritance be accepted." And Manresa with reason states that upon the
death of a person, each of his heirs "becomes the undivided owner of the
whole estate left with respect to the part or portion which might be
adjudicated to him, a community of ownership being thus formed among the
coowners of the estate while it remains undivided." . . . And according to
article 399 of the Civil Code, every part owner may assign or mortgage his part
in the common property, and the effect of such assignment or mortgage shall be
limited to the portion which may be allotted him in the partition upon the
dissolution of the community. Hence, where some of the heirs, without the
concurrence of the others, sold a property left by their deceased father, this
Court, speaking thru its then Chief Justice Cayetano Arellano, said that the
sale was valid, but that the effect thereof was limited to the share which may
be allotted to the vendors upon the partition of the estate.
Administration of the Estate Not
Prejudiced by the Contract to Sell
Petitioner further contends that "[t]o sanction the
sale at this stage would bring about a partial distribution of the decedent's
estate pending the final termination of the testate proceedings." 17 This
becomes all the more significant in the light of the trial court's finding, as
stated in its Order dated August 20, 1997, that "the legitimate of one of
the heirs has been impaired." 18
Petitioner's contention is not convincing. The Contract to
Sell stipulates that petitioner's offer to sell is contingent on the
"complete clearance of the court on the Last Will Testament of her
father." 19 Consequently, although the Contract to Sell was perfected
between the petitioner and private respondents during the pendency of the
probate proceedings, the consummation of the sale or the transfer of ownership
over the parcel of land to the private respondents is subject to the full
payment of the purchase price and to the termination and outcome of the testate
proceedings. Therefore, there is no basis for petitioner's apprehension that
the Contract to Sell may result in a premature partition and distribution of
the properties of the estate. Indeed, it is settled that "the sale made by
an heir of his share in an inheritance, subject to the pending administration,
in no wise stands in the way of such administration." 20
Estoppel
Finally, petitioner is estopped from backing out of her
representations in her valid Contract to Sell with private respondents, from
whom she had already received P300,000 as initial payment of the purchase
price. Petitioner may not renege on her own acts and representations, to the
prejudice of the private respondents who have relied on them. 21 Jurisprudence
teaches us that neither the law nor the courts will extricate a party from an
unwise or undesirable contract he or she entered into with all the required
formalities and with full awareness of its consequences. 22
WHEREFORE, the petition is hereby DENIED and the assailed
Decision of the Court of Appeals AFFIRMED. Costs against petitioner.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.