ROLANDO SANCHEZ, et. al. v. THE HONORABLE COURT OF APPEALS, ROSALIA LUGOD, et. al.

G.R. No. 108947; September 29, 1997

PANGANIBAN, J.:

FACTS: Rosalia Lugod is the only child of spouses Juan Sanchez and Maria Villafranca while Arturo
Lugod, Evelyn Ranises and Roberto Lugod are the legitimate children of Rosalia.

Rolando, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez, are the illegitimate children of Juan
Sanchez. Following the death of her mother, Maria Villafranca, on 29 September 1967, private
respondent Rosalia filed on 22 January 1968, a petition for letters of administration over the estates of
her mother and father Juan Sanchez, who was at the time in state of senility.

For illustration purposes:

Juan Sanchez and Maria Villafranca (spouses)
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 (Respondent) Rosalia Lugod (only child of spouses Sanchez)
 (Petitioners) Rolando, Florida, Alfredo, and Myrna Sanchez (all illegitimate
children of Juan Sanchez)
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(Respondents) Arturo, Eveleyn, and Roberto (legitimate children of Rosalia)

(September 1968) Rosalia, as administratrix of the intestate estate of her mother, submitted an
inventory and appraisal of the real and personal estate of her late mother. Before the administration
proceedings Special (No. 44-M) could formally be terminated and closed, Juan died on 21 October 1968.

Petitioners, as heirs of Juan, filed a petition for letters of administration (Special Proceedings No.
1022) over the intestate estate of Juan, which petition was opposed by Rosalia. However, Rosalia and
petitioners, assisted by their respective counsels, executed a compromise agreement wherein they
agreed to divide Juan’s properties enumerated therein.

Rosalia was appointed by the trial court, and took her oath as the administratrix of her father's intestate
estate. (1970) Petitioners filed a motion to require administratrix Rosalia, to deliver deficiency of 24
hectares and or to set aside compromise agreement. Rosalia and petitioners entered into and executed
a memorandum of agreement which modified the compromise agreement.

Nine years later, petitioners filed a motion to require Rosalia to submit a new inventory and to
render an accounting over properties not included in the compromise agreement. They likewise
filed a motion to defer the approval of the compromise agreement praying for the annulment of
the compromise agreement on the ground of fraud.

The trial court issued an order directing Rosalia to submit a new inventory of properties under her
administration and an accounting of the fruits thereof, which prompted Rosalia to file a rejoinder.

Petitioners filed a motion to change administratrix to which Rosalia filed an opposition.

RTC Ruling: (only relevant point included)

 That all the Deeds of Absolute Sale executed by Juan Sanchez and Maria Villafranca in
favor of Rosalia, Arturo, Lugod, Evelyn, and Roberto (all surnamed Lugod) on July 1963
and June 1967 are all declared simulated and fictitious and must be subject to collation
and partition among all heirs.

The Memorandum of Agreement dated April 13, 1970, which the parties entered into with the assistance
of their counsel, amended the above compromise.
CA Ruling: initially dismissed private respondents' petition. However, on a motion for reconsideration, CA
set aside the trial court's decision and declaring the modified compromise agreement valid and binding.
Hence, this appeal to this Court under Rule 45 of the Rules of Court.

ISSUES: Whether or not:

1) the CA erred in allowing private respondent’s recourse to Rule 65 of the Rules of Court;
2) the Compromise Agreement was valid;
3) CA gravely abused its discretion in deeming Special Proceedings Nos. 44-M and 1022 “CLOSED
and TERMINATED;” and
4) provision on waiver contained in No. 8 of the aforequoted compromise is null and void.

HELD:
1) No. Since private respondents had neglected or failed to file an ordinary appeal within the
reglementary period, petitioners allege that the CA erred in allowing private respondent's
recourse to Rule 65 of the Rules of Court. They contend that private respondents' invocation
of certiorari was "procedurally defective." This Court disagrees.

Doctrinally entrenched is the general rule that  certiorari is not a substitute for a lost appeal.
However, Justice Florenz D. Regalado lists several exceptions to this rule. Even in a case
where the remedy of appeal was lost, the Court has issued the writ of  certiorari where the
lower court patently acted in excess of or outside its jurisdiction,  as in the present case. A
petition for certiorari under Rule 65 of the Rules of Court is appropriate and allowable when the
following requisites concur: (1) the writ is directed against a tribunal, board or officer exercising
judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary
course of law. All these requirements were met in this case.

As a probate court, the trial court was exercising judicial functions when it issued its
assailed resolution. The said court had jurisdiction to act in the intestate proceedings
involved in this case with the caveat that, due to its limited jurisdiction, it could resolve
questions of title only provisionally. It is hornbook doctrine that in a special proceeding
for the probate of a will, the question of ownership is an extraneous matter which the
probate court cannot resolve with finality. This pronouncement no doubt applies with
equal force to an intestate proceeding as in the case at bar.

In the instant case, the trial court rendered a decision declaring as simulated and fictitious
all the deeds of absolute sale which, on 26 July 1963 and 26 June 1967, Juan Sanchez and
Maria Villafranca executed in favor of their daughter, Rosalia Sanchez Lugod; and grandchildren,
namely, Arturo, Evelyn, and Roberto Lugod. The trial court ruled further that the properties
covered by the said sales must be subject to collation. Citing Article 1409 (2) of the Civil Code,
the lower court nullified said deeds of sale and determined with finality the ownership of the
properties subject thereof. In doing so, it clearly overstepped its jurisdiction as a probate
court. Jurisprudence teaches:

[A] probate court or one in charge of proceedings whether testate or intestate cannot adjudicate or determine
title to properties claimed to be a part of the estate and which are claimed to belong to outside parties. All that
the said court could do as regards said properties is to determine whether they should or should not be
included in the inventory or list of properties to be administered by the administrator . If there is no
dispute, well and good, but if there is, then the parties, the administrator, and the opposing parties have to
resort to an ordinary action for a final determination of the conflicting claims of title because the probate court
cannot do so.

Furthermore, the trial court committed grave abuse of discretion when it rendered its
decision in disregard of the parties' compromise agreement. Such disregard, on the ground
that the compromise agreement "was not approved by the court," is tantamount to “an evasion of
positive duty or to a virtual refusal to perform the duty enjoined or to act in contemplation and
within the bounds of law.”
 Since the trial court exceeded its jurisdiction, a petition for certiorari is certainly a proper remedy.
Indeed, it is well-settled that an act done by a probate court in excess of its jurisdiction may
be corrected by  certiorari.

2) Yes. Since this compromise agreement was the result of a long drawn out process, with all the
parties ably striving to protect their respective interests and to come out with the best they could,
there can be no doubt that the parties entered into it freely and voluntarily. Accordingly, they
should be bound thereby. To be valid, it is merely required under the law to be based on real
claims and actually agreed upon in good faith by the parties thereto. However, although
denominated a compromise agreement, the document in this case is essentially a deed of
partition, pursuant to Article 1082 of the Civil Code which provides that "every act which is
intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a
partition, although it should purport to be a sale, an exchange, a compromise, or any other
transaction."

For a partition to be valid, Section 1, Rule 74 of the Rules of Court, requires the
concurrence of the following conditions:
1) the decedent left no will;
2) the decedent left no debts, or if there were debts left, all had been paid;
3) the heirs and liquidators are all of age, or if they are minors, the latter are represented by their
judicial guardian or legal representatives; and
4) the partition was made by means of a public instrument or affidavit duly filed with the Register
of Deeds.

All the foregoing requisites are present in this case. The parties’ compromise agreement/partition
in this case is affirmed.

3) No. Petitioners contend that the CA gravely abused its discretion in deeming Special Proceedings
Nos. 44-M and 1022 "CLOSED and TERMINATED," arguing that there was as yet no order of
distribution of the estate pursuant to Rule 90 of the Rules of Court. They add that they had not
received their full share thereto. The SC disagrees.

Under Section 1, Rule 90 of the Rules of Court, an order for the distribution of the estate
may be made when the "debts, funeral charges, and expenses of administration, the
allowance to the widow, and inheritance tax, if any," had been paid. This order for the
distribution of the estate's residue must contain the names and shares of the persons entitled
thereto. A perusal of the whole record, particularly the trial court's conclusion, reveals that all the
foregoing requirements already concurred in this case.

4) The petitioners likewise assail as void the provision on waiver contained in No. 8 of the
aforequoted compromise, because it allegedly constitutes a relinquishment by petitioners of
"a right to properties which were not known." They argue that such waiver is contrary to law,
public policy, morals or good custom. The Court disagrees. The assailed waiver pertained to
their hereditary right to properties belonging to the decedent's estate which were not
included in the inventory of the estate's properties. The waiver is valid because, contrary to
petitioners' protestation, the parties waived a known and existing interest — their hereditary right
which was already vested in them by reason of the death of their father pursuant to Art. 777.

All the foregoing show clearly that the probate court had essentially finished said intestate
proceedings which, consequently, should be deemed closed and terminated. In view of the above
discussion, the Court sees no reversible error on the part of the CA.