G.R. NO. 145379




Republic of the Philippines SUPREME COURT SECOND DIVISION G.R. NO. 145379 December 9, 2005 DAMIANA INTO, Petitioner, vs. MARIO VALLE, OCTAVIO VALLE, ALBERTO VALLE, OLIVER VALLE, BRENDA VALLE, and LUISA VDA. DE VALLE, Respondents. D E C I S I O N AUSTRIA-MARTINEZ, J.: This refers to the petition for review by certiorari under Rule 45 of the Rules of Court assailing the Decision1 of the Court of Appeals (CA) dated May 5, 2000 and its Resolution2 dated August 31, 2000 denying petitioner’s motion for reconsideration. The facts are as follows: On August 13, 1990, petitioner Damiana Into (petitioner) obtained a judgment from the Regional Trial Court (RTC), Davao City, Branch 14, in Civil Case No. 19-896-89, whereby Eleanor Valle Siapno (Eleanor) and Oscar Siapno were ordered to pay to petitioner the total amount of ₱283,000.00 plus interests.3 The judgment became final and executory. On August 6, 1992, Sheriffs Alberto C. Esguerra and Diosdado A. Cajes sold at public auction "all the rights, interests, title, claims and participation pro-indiviso by Eleanor Valle Siapno, married to Oscar Siapno over the following real properties subject of Special Proceedings No. 63, In Re: In the Matter of the Intestate Estate of Victorio Valle, Luisa vda. de Valle – Petitioner which is pending consideration before RTC, Branch 2, Tagum..."4 consisting of six parcels of land covered by certificates of title. On August 7, 1992, Sheriff Esguerra executed a Provisional Certificate of Sale in favor of petitioner as the highest bidder.5 On November 23, 1992, herein respondent Luisa vda. de Valle as the surviving spouse of the late Victorio Valle together with their children, namely, Mario, Octavio, Alberto, Oliver and Brenda, all surnamed Valle (respondents), filed a complaint against petitioner and the Sheriffs, docketed as Civil Case No. 2671, for "Declaration of Nullity of Sheriff’s Sale and/or Recovery of Hereditary Shares, Damages and Attorney’s fees" with the RTC of Tagum, Davao City, raffled to Branch 1. Respondents claim that on February 2, 1991, Eleanor, daughter of Victorio and Luisa, for valuable consideration, waived her rights to, interests in and participation in all properties, real and personal, which include the six parcels of land sold at public auction; that at the time of the execution of the "Waiver of Hereditary Shares and/or Rights" (Waiver) of Eleanor to her co-heirs, her shares in the subject properties were free from any burden voluntary or involuntary there being no indication of any writ of attachment or levy annotated or inscribed in the Torrens titles; that in June 1992, respondent Luisa, as administratrix of the Estate of her husband Victorio Valle, was served a Sheriff’s Notice of Sale of Real Properties; that despite their verbal notice to petitioner that the shares of Eleanor have been conveyed, waived and ceded to respondents, the Sheriffs proceeded with the public auction; that the auction sale conducted by the Sheriffs was null and void for being irregular and illegal as the subject properties were not validly attached and levied, and, at the time of the sale, judgment debtor Eleanor had no more rights and interests on the properties subject of the auction sale.6 On February 3, 1993, petitioner together with the defendant Sheriffs filed a Motion to Dismiss on the following grounds: that respondents have no capacity to sue considering the pendency of the settlement of the estate of the late Victorio Valle; that the repudiation made by Eleanor was invalid as it was not made pursuant to Article 1051 of the Civil Code; that the Waiver executed by Eleanor cannot prevail over the judgment credit of the petitioner.7 On March 12, 1993, the RTC, Branch 1, issued an Order transferring Civil Case No. 2671 to Branch 2 where SP Proc. No. 63 is pending.8 Over the objections of respondents, the RTC issued an Order dated August 31, 1993 in Civil Case No. 2671, portions of which read as follows: It will be noted that the judgment in Civil Case No. 19-896-89 was rendered on August 13, 1990 while the waiver of her proprietary rights in favor of the plaintiffs was only on February 2, 1991. Clearly, the obligation of Eleanor Siapno to Damiana Into already existed at the time the waiver of her hereditary rights was executed in favor of her co-heirs. The execution, therefore, of the waiver by Eleanor Siapno, naturally, prejudiced the right of Damiana Into which was already in existence. "Rights may be waived unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law" (Art. 6, New Civil Code). There cannot be any doubt that Damiana Into had a right to the properties of Siapno which is recognized by law. Article 1051 of the New Civil Code also provides that "The repudiation of an inheritance shall be made in a public or authentic instrument, or by petition presented to the court having jurisdiction over the testamentary or intestate proceedings." Construing the said provision of law, in view of the pendency of the intestate proceedings of the estate of the late Victorio Valle, the waiver of her hereditary rights in favor of her co-heirs should have been by petition filed with this court which has acquired jurisdiction over Special Proceedings No. 63 (Intestate Estate of Victorio Valle). Nevertheless, since Eleanor Valle Siapno has not yet received her share of the estate of the late Victorio Valle, the claim of Damiana Into should have been filed with the intestate estate proceeding and not the auction sale of a portion of the property which is still very much a part of the subject of Special Proceedings No. 63. In the light of the foregoing, while it is hereby ordered that the present case be dismissed, the nullity of the questioned auction sale and the provisional sheriff’s sale is also hereby ordered. SO ORDERED.9 Parties filed their respective motions for reconsideration. On April 28, 1994, the RTC issued an Order which reads: In their motion, the plaintiffs contended that the repudiation by Eleanor Siapno of her share in the estate was for consideration and not gratuitous. Therefore, according to the plaintiffs, Article 6 of the New Civil Code has no application. This Court is of the view that whether or not there was consideration, there was an act of repudiation and, therefore, the requirements of the law should have been observed. The order of dismissal stands. The defendants, in their motion for reconsideration, cited Section 7(f), Rule 57 of the Rules of Court, among others, which reads: "Properties shall be attached by the officer executing the order in the following manner: . . . (f) The interest of the party against whom attachment is issued in property belonging to the estate of the decedent, whether as heir, legatee, or devisee, by serving the executor or administrator or other personal representative of the decedent with a copy of the order and notice that said interest is attached. A copy of said order of attachment and of said notice shall be filed in the office of the clerk of the court in which said estate is being settled and served upon the heir, legatee or devisee concerned." In the light of the said provision of law, the order declaring as null and void the auction sale and the provisional sheriff’s sale is hereby set aside and reconsidered. SO ORDERED.10 Respondents appealed to the CA, docketed as CA-G.R. CV No. 46382. On May 5, 2000, the CA promulgated its Decision, portions of which read: After due study, the Court finds merit in the appeal. In ruling for the dismissal of the complaint below, the lower court committed grave, but correctible conclusions and applications of law, which directly bear on the validity of its judgment. Firstly, the lower court erred in ruling that Eleanor Valle Siapno’s alleged repudiation of her inheritance is invalid, having been improperly made. A close scrutiny of the act of Eleanor, taking into consideration the statements appearing in her "Waiver of Hereditary Shares and/or Rights" (p. 8, Records) shows that she did not repudiate her inheritance, but had actually accepted the same, but had waived its enjoyment in exchange for valuable consideration which she had already received and enjoyed. (Id., at 10) Furthermore, even if such act may be construed as a repudiation of her inheritance, the same has been validly made through a public document pursuant to Article 1051 of the Civil Code, which states: "Article 1051. The repudiation of an inheritance shall be made in a public or authentic instrument, or by a petition duly presented to the court having jurisdiction over the testamentary or intestate proceedings." It is undeniable that Eleanor’s act was made through a document duly signed by her and executed before notary public Hermenegildo Monja, (p. 11, Records) which sufficiently qualifies the same as a public document. It must be noted that nowhere in the abovequoted article is it required that in case of the pendency of testamentary or intestate proceedings, any repudiation of inheritance must be made exclusively by petition in the estate court. Where the law is unambiguous and clear, it must be applied according to its plain and obvious meaning, according to its express terms. (Cecilleville Realty and Service Corporation v. Court of Appeals, 278 SCRA 819 [1997]) Furthermore, the fact that the RTC of Davao had ruled Eleanor Valle Siapno as a judgment debtor of Damiana Into prior to her waiver of inheritance does not render the subsequent levy and auction sale of the subject properties as a valid measure, not even vis-a-vis the prescription under Rule 57, Section 7(f) of the Rules of Court, which is hereby reproduced: Sec. 7. Attachment of real and personal property; recording thereof. – Properties shall be attached by the officer executing the order in the following manner: . . . (f) The interest of the party against whom attachment is issued in property belonging to the estate of the decedent, whether as heir, legatee, or devisee, by serving the executor or administrator or other personal representative of the decedent with a copy of the order and notice that said interest is attached. A copy of said order of attachment and of said notice shall be filed in the office of the clerk of court in which said estate is being settled and served upon the heir, legatee or devisee concerned. If the property sought to be attached is in custodia legis, copy of the order of attachment shall be filed with the proper court and notice of the attachment shall be filed with the proper court and notice of the attachment served upon the custodian of such property. Taken in its proper context, the abovequoted rule of procedure presents merely the remedy of a claiming party to attach the interests of a defending party in the properties belonging to the estate of a decedent. In no way, however, does the said provision set forth the rule that such inchoate interests of a person may be duly levied upon and sold to satisfy the execution of a judgment debt. It must be noted that an heir’s right of ownership over the properties of the decedent is merely inchoate as long as the estate has not been fully settled and partitioned. (Estate of Hilario M. Ruiz v. Court of Appeals, 252 SCRA 541 [1996]) This means that the impending heir has yet no absolute dominion over any specific property in the decedent’s estate that could be specifically levied upon and sold at public auction. Any encumbrance of attachment over the heir’s interests in the estate, therefore, remains a mere probability, and cannot summarily be satisfied without the final distribution of the properties in the estate. From the foregoing, it appears that plaintiffs-appellants have good reason to object from the premature dismissal of its action below. As prospective heirs of the properties of the late Victorio Valle, they certainly have the capacity to sue against any perceived impropriety or railroaded disposition of the properties under settlement proceedings, as their inheritance stand to be depleted by the execution even before the final decree of partition or distribution in the partition proceedings is issued. They have a right to be heard, and to present evidence to advance their rights. For this reason, the Court finds that the proceedings below regarding the appellant’s action for declaration of the nullity of the sheriff’s sale should be allowed to proceed. WHEREFORE, premises considered, the instant appeal is hereby GRANTED, and the appealed orders of the Regional Trial Court of Davao are hereby SET ASIDE. The said RTC is hereby ordered to REINSTATE the plaintiffs-appellants’ complaint, and to proceed with the trial of the same. SO ORDERED.11 Hence, the present petition on the following grounds: 1. The Court of Appeals erred in holding that the "Waiver of Hereditary Shares and/or Rights" executed by Eleanor Valle Siapno is valid and that it was properly made. It is not in accord with law (Articles 6; 1050; 1051 and 1082 of the Civil Code of the Philippines) and the applicable decisions of the Supreme Court; 2. The Court of Appeals erred in holding that Eleanor Valle Siapno’s interest in the assets of the estate of her late father, Victorio Valle as an heir is merely inchoate and therefore may not be levied upon and sold. It is not in accord with Section 7(f) of Rule 57 of the Rules of Court (now Section 7(e) of Rule 57 of the 1997 Rules of Civil Procedure) and the applicable decisions of the Supreme Court. 3. The Court of Appeals erred in granting the appeal and denying the Petitioner’s Motion for Reconsideration and in ordering the RTC of Tagum, Davao . . ."to REINSTATE the plaintiffs-appellants’ complaint, and to proceed with the trial of the same . . ," because this is not accord with the applicable decisions of the Supreme Court and this is tantamount to allowing the RTC, Branch 2 of Tagum (now Tagum City), Province of Davao del Norte to interfere with the levy on attachment and levy on execution of the interests of Eleanor Valle Siapno in the assets of the estate of her late father, of the Deputy Sheriff of the RTC, Branch 14 in the City of Davao, which is a coordinate court.12 In their Comment, respondents contend that: the Waiver is not the waiver contemplated by Article 1051 of the Civil Code; the document is in fact an acknowledgment of the extent of her hereditary rights and interest to the estate of Eleanor’s deceased father; Eleanor has not actually repudiated her inheritance but had actually accepted the same and waived its enjoyment in exchange of a monetary consideration which she had already received long before the execution of the Waiver; the fact that Eleanor is adjudged as a judgment debtor of petitioner does not justify the subsequent levy and auction sale of the properties wherein the judgment debtor has a right or interest on, using Rule 39 of the Rules of Court; the right of heirs to specific distributive shares of inheritance does not become finally determinable until all the debts of the estate are paid, per Jimoga-on vs. Belmonte;13 until then their rights are inchoate and cannot be enforced, subject to the existence of a residue after payment of the debts; the heirs have yet no absolute dominion over any particular and definite property in the estate of the decedent which can be specifically attached, levied and sold; Section 7(f), Rule 57 of the Rules of Court requires that the attachment of the interest of the party against whom attachment is issued in property belonging to the estate of the decedent is effected by service of said writ of attachment and notice to the executor or administrator or other personal representative, and, by filing a copy thereof in the Office of the Clerk of Court in which the estate is being settled; the attachment and levy were not properly registered or annotated in the certificate of title; the obligation of Eleanor or the judgment against her was not known to them prior to the execution of the Waiver; the reinstatement of the complaint before the RTC, Branch 2, Tagum, Davao City does not interfere with the judgment of RTC, Branch 14, Davao City; the complaint in Branch 2 does not seek the reversal of the judgment of Branch 14; what is prayed for in respondents’ complaint is the invalidation of the act of the Sheriff in selling the real properties of the decedent, Victorio Valle; it appears in the "Sheriff’s Provisional Certificate of Sale" that he "sold at public auction the said real properties to the highest bidder;" RTC, Branch 2, Tagum, Davao City has jurisdiction to nullify the auction sale of the sheriff and therefore the CA did not err when it ordered the reinstatement of respondents’ complaint.14 Parties filed their respective memoranda, dwelling on the following issues: 1. Whether or not the "Waiver of Hereditary shares and/or Rights" executed by Eleanor Valle Siapno is valid and that it was properly made; 2. Whether or not Eleanor Valle Siapno’s interests in the assets of the Estate of her late father, Victorio Valle, as an heir is merely inchoate and therefore may not be levied upon and sold; 3. Whether or not the granting of the appeal and ordering the RTC of Tagum by the Court of Appeals to reinstate the Respondents’ complaint and to proceed with the trial of the same [is] tantamount to allowing the RTC, Branch 2 of Tagum (now Tagum City), Province of Davao del Norte, to interfere with the levy on attachment and levy on execution of the interests of Eleanor Valle Siapno in the assets of the estate of her late father of the Deputy Sheriff of the RTC Branch 14 of the City of Davao, which is a coordinate court.15 The first and second issues go into the merits of the complaint for "Declaration of Nullity of Sheriff’s Sale and/or Recovery of Hereditary Shares, Damages and Attorney’s fees." It is gathered from the pleadings filed by the parties that the issues involve the determination of the following questions, although not exclusive: (1) Was SP Proc. No. 63 already instituted when the decision in Civil Case No. 19-896-89 was issued on August 13, 1990?; (2) If in the affirmative, was there a duly constituted administrator in SP Proc. No. 63 at that time?; (3) Did the Sheriffs in executing the final decision in Civil Case No. 19-896-89 notify the administratrix and the RTC (Branch 2), Tagum, Davao City in SP Proc. No. 63 of the final decision in Civil Case No. 19-896-89 in favor of petitioner and against Eleanor?; (4) Were the Sheriffs properly notified of the Waiver executed by Eleanor?; (5) Did the writ of attachment issued by RTC, Branch 14, Davao City, validly attach the properties pursuant to the Rules of Court?; (6) Was Eleanor duly notified of the decision against her in Civil Case No. 19-896-89?; (7) Was Eleanor in good faith when she executed the Waiver in favor of the other heirs of the late Victorio Valle?; (8) Was the Waiver submitted to the RTC in SP Proc. No. 63? If in the affirmative, when?; (9) Was there a proper and valid levy on the properties?; (10) Under the "Sheriff’s Provisional Certificate of Sale," what was actually sold at public auction by the sheriffs – the rights, interests, title, claims and participation pro-indiviso of Eleanor over the real properties subject of SP Proc. No. 63, as stated in the early portion of the "Sheriff’s Provisional Certificate of Sale," or, the six parcels of land enumerated and described in said document, as stated in the latter portion of the said certificate of sale?; (11) Were Eleanor’s interests in the assets of the Estate of Victorio Valle already defined by the court in SP Proc. No. 63 on the date of execution of the final judgment in Civil Case No. 19-896-89? Evidently, these matters cannot be resolved by this Court at the first instance. It is not a trier of facts.16 Such questions may be determined by the RTC only after a full- blown trial of the case Thus, the Court will resolve only the third issue, i.e., whether or not the CA erred in ordering the RTC, Branch 2, Tagum, Davao City to reinstate the complaint of respondents and to proceed with the trial. Corollary to this is the question whether respondents have a valid cause of action against petitioner. In her Memorandum, petitioner argues that the CA erred in ordering the RTC of Tagum to reinstate the complaint of respondents and to proceed with the trial of the same as it is tantamount to allowing the RTC, Branch 2, Tagum to interfere with the levy on attachment and levy on execution of the interests of Eleanor in the assets of the estate of her late father by the Deputy Sheriff of the RTC, Branch 14, Davao City which is a coordinate court.17 In their Memorandum, respondents contend that if ever the complaint is reinstated, it will not necessarily be in disagreement with the final judgment of RTC, Branch 14, Davao City in Civil Case No. 19-896-89, considering that the issue to be resolved by the RTC, Branch 2, Tagum, Davao City is limited in the determination of the validity or nullity of the Sheriff’s Sale.18 The petition lacks merit. The CA did not err in ordering the RTC to reinstate the complaint and to proceed with the trial of the same. Respondents have a valid cause of action against petitioner. Section 2, Rule 2 of the Rules of Court provides that a cause of action is the act or omission by which a party violates a right of another. In De Guzman, Jr. vs. Court of Appeals,19 this Court held: A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf. An action means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prosecution or redress of a wrong. The cause of action must always consist of two elements: (1) the plaintiff’s primary right and the defendant’s corresponding primary duty, whatever may be the subject to which they relate – person, character, property or contract; and (2) the delict or wrongful act or omission of the defendant, by which the primary right and duty have been violated. The cause of action is determined not by the prayer of the complaint but by the facts alleged. A cause of action exists if the following elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.20 In the present case, it is alleged in the complaint that herein respondents are the children and the wife of the late Victorio Valle whose real and personal properties are subject of SP Proc. No. 63. In a gist, respondents claim "that without having legal custody of the share or properties of Eleanor Valle Siapno by inscribing, annotating or indicating the attachment and levy in the certificate of titles of the properties mentioned in paragraph IV of this complaint, defendants Sheriff proceeded to sell the properties at public auction inspite of the prior verbal notice to them that the shares of Eleanor Valle Siapno has been conveyed, waived and ceded to the herein plaintiffs."21 It is clear, therefore, that respondents seek to protect their rights over the subject real properties as heirs of the deceased Victorio which the Sheriffs have allegedly violated by selling said properties or interests therein at public auction. The complaint satisfies the elements of a valid cause of action. The complaint was filed on November 23, 1992. Prior to the 1997 amendment of the Rules of Court, an executor or administrator may sue or be sued without joining the party for whose benefit the action is presented or defended. Section 3, Rule 3 of the old Rules of Court, provides: SEC. 3. Representative Parties.- A trustee of an express trust, a guardian, executor or administrator, or a party authorized by statute, may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may, at any stage of the proceedings, order such beneficiary to be made a party. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. Accordingly, in Ramos vs. Ramos,22 the Court held that the heirs of a decedent have no standing in court with respect to actions over a property of the estate, if the latter is represented by an executor or administrator. Considering that plaintiff-respondent Luisa vda. de Valle is admittedly the administratrix of the Estate of her late husband Victorio Valle, and considering further that the subject properties belong to the Estate, the complaint against the Sheriffs who sold the same at public auction constitutes a valid cause of action. The fact that the children of the decedent are co-plaintiffs is not a ground to dismiss the complaint. Pursuant to the present Section 3, Rule 3 of the Rules of Court which took effect on July 1, 1997, to wit: SEC. 3. Representatives as parties.- Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. and for orderly administration of justice, the administratrix should be allowed by the RTC to implead the Estate of the deceased Victorio Valle. However, this holds true only if, at this time, the Estate has not been finally settled in that debts have been paid and the heirs given their respective shares. In the event that the Estate has been settled, then the Heirs to whom the real properties or portions thereof, subject of the auction sale, had been adjudged by the probate court would have the legal personality to be included as plaintiffs in Civil Case No. 2671. WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED. MA. ALICIA AUSTRIA-MARTINEZ Associate Justice WE CONCUR: REYNATO S. PUNO Associate Justice ROMEO J. CALLEJO, SR. DANTE O. TINGA Associate Justice Associate Justice MINITA V. CHICO-NAZARIO Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. REYNATO S. PUNO Associate Justice Chairman, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. HILARIO G. DAVIDE, JR. Chief Justice Footnotes 1 Penned by Associate Justice Rodrigo V. Cosico and concurred in by Associate Justices Godardo A. Jacinto and Wenceslao I. Agnir, Jr. (now retired); Rollo, pp. 60-67. 2 Id., pp. 88-89. 3 Records, pp. 36-38. 4 Id., pp. 21-23. 5 Id., pp. 24-26. 6 Id., pp. 1-6. 7 Id., pp. 31-35. 8 Id., p. 52. 9 Id., pp. 54-55. 10 Id., pp. 72-73. 11 CA Rollo, pp. 90-93. 12 Rollo, p. 28. 13 No. L-1605, September 13, 1949, 84 Phil. 545. 14 Rollo, pp. 93-98. 15 Id., pp. 115 and 163. 16 Far East Bank & Trust Co. vs. Court of Appeals, G.R. No. 123569, April 1, 1996, 256 SCRA 15, 18. 17 Rollo, p. 163. 18 Id., p. 119. 19 G.R. No. 92029-30, December 20, 1990, 192 SCRA 507, 508. 20 Nadela vs. City of Cebu and Metro Cebu Development Project, G.R. No. 149627, September 18, 2003, 411 SCRA 315, 323. 21 Records, p. 5. 22 G.R. No. 144294, March 11, 2003, 399 SCRA 43, 48. The Lawphil Project - Arellano Law Foundation