Morales v. Olondriz G.R. No. 198994, February 3, 2016 Second Division — Brion, J.

 

FACTS

Alfonso Juan P. Olondriz, Sr. died on June 9, 2003, leaving his widow, Ana Maria Ortigas de Olondriz, and several children. Believing that he died intestate, his heirs filed a petition for partition of his estate and for the appointment of a special administrator before the Regional Trial Court of Las Piñas City. Iris Morales later filed a separate petition alleging that the decedent had left a will dated July 23, 1991, and sought its probate and her appointment as special administratrix. The two proceedings were subsequently consolidated.

The will provided that the entire estate would be divided into six equal parts among Iris Morales Olondriz, four of the decedent's children, and their mother. The will, however, omitted Francisco Javier Maria Bautista Olondriz, an illegitimate son of the decedent. The respondent heirs moved to dismiss the probate proceedings on the ground that Francisco had been preterited.

The RTC ordered the parties to present evidence regarding the alleged preterition. Morales agreed to the evidentiary hearing but failed to appear on the scheduled hearing dates and thereby waived her opportunity to present evidence on the issue. The RTC subsequently found that Francisco was a compulsory heir in the direct line, that he had been completely omitted from the will, and that he had therefore been preterited.

The RTC consequently reinstated Alfonso Jr. as administrator and ordered the case to proceed as an intestate proceeding. The Court of Appeals affirmed. Morales then went to the Supreme Court, arguing that probate of a will was mandatory, that the probate court could not determine its intrinsic validity, and that Francisco had not been preterited because he had allegedly received a house and lot from the decedent as an advance on his legitime.

ISSUE

The first issue was whether Francisco Javier Maria Bautista Olondriz had been preterited from the will.

The second issue was whether the probate court could pass upon the intrinsic validity of the will before its formal probate when the preterition of a compulsory heir would render the will ineffective.

The third issue was whether the RTC properly ordered the estate to proceed intestate despite its previous order setting the case for probate.

HELD

The Supreme Court DISMISSED the petition and affirmed the ruling of the Court of Appeals. It held that Francisco had been preterited. Preterition consists of the complete and total omission of a compulsory heir in the direct line from the inheritance, without express disinheritance. It requires that the heir receive nothing under the will, including no legacy, devise, or advance on his legitime.

Francisco, being the decedent's illegitimate son, was a compulsory heir in the direct line. He was completely omitted from the will and was not instituted as an heir, legatee, or devisee. Morales had been given the opportunity to prove that Francisco had received donations inter vivos or advances on his legitime, but she failed to appear at the evidentiary hearings. The Court therefore found no reason to disturb the factual findings of the RTC and the Court of Appeals that Francisco had been preterited.

Under Article 854 of the Civil Code, preterition of a compulsory heir in the direct line annuls the institution of heirs. Since the will contained no specific legacies or devises that could remain valid after the annulment of the institution of heirs, the preterition resulted in the total abrogation of the will and total intestacy.

The Court held that although the general rule is that a probate court determines only the extrinsic validity of a will, this rule is not absolute. When exceptional circumstances make it apparent that probate would be an idle ceremony because the will is intrinsically void, the probate court may determine its intrinsic validity even before probate. In this case, Francisco's preterition annulled the institution of heirs and rendered the will ineffective, making separate proceedings on its intrinsic validity unnecessary.

The Court also held that the earlier order setting the case for probate was merely interlocutory. It had not become final and executory and could still be modified or rescinded by the RTC before final judgment. Thus, the RTC did not commit grave abuse of discretion when it subsequently ordered the estate to proceed intestate. The Supreme Court accordingly dismissed Morales' petition, with costs against her.

Celedonia Solivio v. Court of Appeals and Concordia Javellana-Villanueva G.R. No. 83484, February 12, 1990 First Division — Medialdea, J.

 

FACTS

Esteban Javellana, Jr., a bachelor who died without descendants, ascendants, brothers, sisters, nephews, or nieces, left an estate consisting largely of properties inherited from his mother, Salustia Solivio. His surviving relatives were his maternal aunt, Celedonia Solivio, and his paternal aunt, Concordia Javellana-Villanueva. During his lifetime, Esteban had expressed his desire to establish a foundation in his mother's name to help poor but deserving students. After his death, Celedonia and Concordia agreed to carry out this plan.

Pursuant to their agreement, Celedonia initiated Special Proceeding No. 2540 for the settlement of Esteban's estate. She was appointed administratrix and later filed a petition to be declared the sole heir. On April 3, 1978, the probate court declared Celedonia the sole legal heir. Celedonia subsequently sold some estate properties to pay the deceased's obligations and established the Salustia Solivio Vda. de Javellana Foundation, which was registered with the Securities and Exchange Commission.

Concordia later filed a motion for reconsideration of the order declaring Celedonia the sole heir, claiming that she was also an heir of Esteban. The probate court denied the motion for having been filed late. Instead of appealing that order, Concordia subsequently filed Civil Case No. 13207 before another branch of the same Regional Trial Court for partition, recovery of ownership and possession, and damages. The trial court ruled in Concordia's favor and ordered the estate divided equally between her and Celedonia. The Court of Appeals affirmed the decision.

Celedonia then appealed to the Supreme Court. She questioned, among others, whether the second RTC branch had jurisdiction to entertain Concordia's separate action while the settlement proceedings involving the same estate were still pending before another branch of the RTC.

ISSUE

The first issue was whether Branch 26 of the Regional Trial Court had jurisdiction to entertain Concordia's separate action for partition and recovery of her share in Esteban Javellana, Jr.'s estate while the settlement proceedings were still pending before Branch 23.

The second issue was whether Concordia's remedy was to seek relief within the pending probate proceedings rather than institute a separate action before another branch of the same court.

The third issue was whether the probate court retained exclusive jurisdiction over the estate until the administration had been completed, the residue distributed, and the proceedings terminated.

HELD

The Supreme Court GRANTED the petition and held that Branch 26 lacked jurisdiction to entertain Concordia's separate action for partition and recovery while the probate proceedings remained pending before Branch 23. The Court found that there were still no orders approving the administratrix's inventory and accounting, distributing the residue of the estate to the heirs, and terminating the administration proceedings.

The Court explained that it is the order of distribution directing delivery of the residue to the persons entitled to it that brings intestate proceedings to a close and terminates the administrator's duties. The order declaring Celedonia the sole heir did not terminate the proceedings because the same order expressly directed her, as administratrix, to proceed with the settlement of the estate.

The Court held that Concordia's motion to set aside the order declaring Celedonia the sole heir and to have herself declared a co-heir was properly filed in the pending special proceeding. When that motion was denied, her remedy was to elevate the denial for appellate review, rather than file a separate action before another branch of the court. The probate court has exclusive jurisdiction to make a just and legal distribution of the estate.

The Court emphasized that a court should not interfere with probate proceedings pending before a co-equal court, in order to avoid conflicting dispositions and multiplicity of suits. A separate action for the declaration of heirs or recovery of an estate share is improper while the probate proceedings remain pending. The proper procedure is to seek the desired relief through a motion in the same probate or administration proceeding, or, if already closed, through reopening of that proceeding when legally proper.

Accordingly, the Supreme Court ruled that the separate action filed by Concordia was improperly filed, and the judgment rendered by Branch 26 and affirmed by the Court of Appeals could not stand

Tai Tong Chuache & Co. v. Insurance Commission and Travellers Multi-Indemnity Corporation G.R. No. L-55397, February 29, 1988 First Division — Gancayco, J.

 

FACTS

Spouses Pedro and Azucena Palomo acquired a parcel of land and a building in San Rafael Village, Davao City, and assumed an existing mortgage over the building in favor of the Social Security System. On April 19, 1975, Azucena Palomo obtained a ₱100,000.00 loan from Tai Tong Chuache & Co., a partnership, and executed a mortgage over the property to secure the loan.

To protect its mortgage interest, Tai Tong Chuache & Co., through its managing partner Arsenio Lopez Chua, obtained Fire Insurance Policy No. 599-DV from Travellers Multi-Indemnity Corporation for ₱100,000.00. The policy covered the building and its contents. Other fire insurance policies covering the same property were also obtained from other insurance companies.

On July 31, 1975, the building and its contents were totally destroyed by fire. The other insurers paid their respective portions of the insurance claims, but Travellers refused to pay under Policy No. 599-DV. Travellers claimed that Tai Tong no longer had an insurable interest because the Palomos had allegedly already paid their mortgage indebtedness before the fire.

Tai Tong filed a complaint in intervention before the Insurance Commission to recover the proceeds of its policy. The Insurance Commission dismissed the claim, reasoning that the evidence showed a civil case involving the Palomos had been filed by Arsenio Lopez Chua rather than Tai Tong Chuache & Co., and inferred from this that the mortgage obligation had already been paid. Tai Tong elevated the matter to the Supreme Court.

ISSUE

The first issue was whether Tai Tong Chuache & Co. had an insurable interest in the property at the time of the fire.

The second issue was whether Travellers Multi-Indemnity Corporation sufficiently proved its affirmative defense that the mortgage debt had already been paid before the occurrence of the fire.

The third issue was whether Arsenio Lopez Chua's filing of a civil action against the Palomos in his own name established that the mortgage obligation to Tai Tong had already been paid.

HELD

The Supreme Court GRANTED the petition and SET ASIDE the decision of the Insurance Commission. It ordered Travellers Multi-Indemnity Corporation to pay Tai Tong Chuache & Co. the face value of Fire Insurance Policy No. 599-DV amounting to ₱100,000.00.

The Court held that Tai Tong had an insurable interest in the property. As mortgagee, it had a financial interest in the preservation of the property because the property secured the ₱100,000.00 loan extended to the Palomos. The insurance policy obtained by Tai Tong was valid and was in force when the fire occurred.

The Court further held that Travellers failed to prove its affirmative defense that the mortgage debt had already been paid. The Insurance Commission merely inferred payment from the fact that a civil action against the Palomos had been filed by Arsenio Lopez Chua. The Court found this inference insufficient. The mortgage document presented by Tai Tong had not been cancelled or released, and when a creditor remains in possession of the document evidencing the credit, nonpayment is presumed. Azucena Palomo likewise testified that the debt remained unpaid.

The Court rejected the argument that the civil action filed by Arsenio Chua demonstrated that the debt was his personal credit rather than Tai Tong's. Arsenio Chua was the managing partner of Tai Tong Chuache & Co. and could perform acts of administration for the partnership, including suing debtors for unpaid obligations. At the very least, as a partner, he was an agent of the partnership and acted for and on behalf of the firm.

Accordingly, because Travellers failed to establish the alleged lack of insurable interest and had issued a valid policy covering Tai Tong's mortgage interest, the insurer was bound by the terms and conditions of the policy. The Supreme Court ordered Travellers Multi-Indemnity Corporation to pay Tai Tong Chuache & Co. ₱100,000.00, with costs against the private respondent. 

Constantino C. Acain v. Hon. Intermediate Appellate Court, et al. G.R. No. L-72706, October 27, 1987 En Banc — Paras, J.

 

FACTS

Nemesio Acain died leaving a will allegedly executed on February 17, 1960. On May 29, 1984, Constantino C. Acain filed before the Regional Trial Court of Cebu City a petition for the probate of Nemesio's will and for the issuance of letters testamentary. The will instituted Constantino and his brothers and sisters as heirs. It was written in Bisaya and accompanied by an English translation.

The will contained provisions concerning the testator's burial, payment of debts, appointment of an executor, and disposition of his property. It stated that Nemesio's shares in the properties he had acquired jointly with his wife, Rosa Diongson, would be given to the children of his predeceased brother, Segundo Acain.

Virginia A. Fernandez, the legally adopted daughter of Nemesio, and Rosa Diongson, his surviving spouse, opposed the probate proceedings. They argued that the will completely omitted them and that such omission constituted preterition. They sought dismissal of the probate proceedings on the ground that the preterition of Virginia, a compulsory heir in the direct line, annulled the institution of heirs under Article 854 of the Civil Code.

The trial court denied the motion to dismiss. The respondents then filed a petition for certiorari and prohibition before the Intermediate Appellate Court. The appellate court granted the petition and ordered the dismissal of the probate proceeding. Constantino elevated the matter to the Supreme Court, arguing that the probate court could determine only the extrinsic validity of the will and that the respondents' remedy was improper.

ISSUE

The first issue was whether the probate court could consider the intrinsic validity of the will before its formal validity had been established through probate.

The second issue was whether the omission of Virginia Fernandez, the legally adopted daughter of Nemesio Acain, constituted preterition under Article 854 of the Civil Code.

The third issue was whether the preterition of Virginia annulled the institution of heirs and resulted in intestate succession, thereby depriving Constantino of legal standing to seek probate of the will.

HELD

The Supreme Court DENIED the petition and AFFIRMED the decision of the Intermediate Appellate Court ordering the dismissal of the probate proceeding. The Court held that although the general rule is that probate courts determine the extrinsic validity of a will, there are exceptional circumstances where the intrinsic validity may be determined before probate. The Court applied the practical considerations recognized in Nuguid v. Nuguid and Maninang v. Court of Appeals, where proceeding with probate would serve no useful purpose because the will was already shown to be intrinsically ineffective.

The Court held that Virginia Fernandez was the legally adopted daughter of Nemesio and therefore a compulsory heir in the direct line. Her complete omission from the will constituted preterition. The Court explained that preterition consists of the omission of compulsory heirs in the direct line, either because they are not mentioned or, although mentioned, they are neither instituted as heirs nor expressly disinherited. Adoption makes the adopted child the legal heir of the adopter.

Under Article 854 of the Civil Code, the preterition of one or all compulsory heirs in the direct line annuls the institution of heirs. Since the will contained a universal institution of Constantino and his brothers and sisters, the annulment of that institution resulted in intestate succession. The Court noted that the will contained no legacies or devises that could remain effective after the institution of heirs was annulled.

The Court distinguished the position of Rosa Diongson, the surviving spouse. Although she was also a compulsory heir, Article 854 does not apply to her because she is not a compulsory heir in the direct line. The preterition of Virginia, however, was sufficient to annul the institution of heirs. Consequently, Constantino, having been deprived of his status as an heir by the operation of Article 854, had no legal standing to continue the petition for probate.

The Supreme Court therefore denied Constantino Acain's petition and affirmed the dismissal of the probate proceeding. 

Sofia J. Nepomuceno v. Court of Appeals, et al. G.R. No. L-62952, October 9, 1985 First Division — Gutierrez, Jr., J.

 

FACTS

Martin Jugo died on July 16, 1974 in Malabon, Rizal, leaving a last will and testament. In the will, he acknowledged that he was legally married to Rufina Gomez, with whom he had two legitimate children, Oscar and Carmelita. The will further stated that Jugo had been separated from Rufina since 1952 and had been living with Sofia J. Nepomuceno as husband and wife. Jugo and Sofia were subsequently married in Victoria, Tarlac, despite his existing marriage to Rufina.

Jugo designated Sofia as the sole and only executor of his estate. In the will, he provided for his legal wife and children as his forced heirs and gave the free portion of his estate to Sofia. Sofia thereafter filed a petition for the probate of the will and for the issuance of letters testamentary. Rufina and her children opposed the probate, among other grounds, on the basis of the circumstances surrounding the relationship between Jugo and Sofia.

The trial court denied probate of the will. It held that because the will itself admitted that Jugo and Sofia had been living together as husband and wife while Jugo was still legally married to Rufina, the devise in favor of Sofia was intrinsically invalid. Sofia appealed. The Court of Appeals later set aside the trial court's denial of probate and declared the will validly drawn, but held that the devise in favor of Sofia was null and void under Article 739 in relation to Article 1028 of the Civil Code.

Sofia elevated the matter to the Supreme Court, arguing that the appellate court had no jurisdiction to determine the intrinsic validity of the devise during the probate proceeding. The Supreme Court noted that the parties no longer disputed the extrinsic validity of the will and that the principal issue was whether the probate court could determine the validity of the testamentary provision in Sofia's favor.

ISSUE

The first issue was whether the Court of Appeals had jurisdiction, in the probate proceeding, to determine the intrinsic validity of the devise in favor of Sofia Nepomuceno.

The second issue was whether the devise in favor of Sofia Nepomuceno was void under Article 739 of the Civil Code because the testator had been living with her in concubinage.

The third issue was whether the validity of the will's testamentary provisions should have been determined only in a separate proceeding after the will had been admitted to probate.

HELD

The Supreme Court DISMISSED the petition and AFFIRMED the decision of the Court of Appeals. It held that the appellate court acted within its jurisdiction when, after determining that the will was validly executed, it proceeded to determine the intrinsic validity of the devise in favor of Sofia.

The Court recognized the general rule that in probate proceedings, the court ordinarily determines only the extrinsic validity of the will, including the testamentary capacity of the testator and compliance with the formal requirements prescribed by law. However, the Court reiterated the exception recognized in Nuguid v. Nuguid and Balanay, Jr. v. Martinez: when practical considerations make it necessary to determine the intrinsic validity of a will during probate, the court may do so rather than subject the parties to unnecessary and prolonged litigation.

The Court held that the devise to Sofia was null and void under Article 739 of the Civil Code, in relation to Article 1028. Article 739 prohibits donations between persons who are guilty of adultery or concubinage. The Court applied this prohibition to testamentary dispositions because Article 1028 expressly extends the provisions concerning prohibited donations to testamentary dispositions. The testator himself had expressly admitted in his will that he had been living with Sofia as husband and wife while his marriage to Rufina remained subsisting.

The Court further held that the invalidity of the devise did not render the entire will void. The will was validly drawn, but the particular devise in favor of Sofia was void. The properties covered by the invalid devise therefore passed in intestacy to the proper heirs. The Court consequently dismissed Sofia's petition for certiorari and affirmed the Court of Appeals' decision, with no pronouncement as to costs.

Rafael E. Maninang and Soledad L. Maninang v. Court of Appeals, et al. G.R. No. L-57848, June 19, 1982 First Division — Melencio-Herrera, J.

 

FACTS

Clemencia Aseneta, single, died on May 21, 1977 at the age of 81. She left a holographic will in which she stated that all her real and personal properties would be inherited by Dra. Soledad L. Maninang, with whose family she had lived for about 30 years. The will also contained statements concerning Bernardo Aseneta, who claimed to be Clemencia's adopted son.

On June 9, 1977, Soledad Maninang filed a petition for the probate of Clemencia's will before the Court of First Instance of Quezon City. Meanwhile, Bernardo Aseneta instituted intestate proceedings before the Court of First Instance of Rizal, claiming that he was Clemencia's sole heir. The testate and intestate proceedings were subsequently consolidated.

Bernardo filed a motion to dismiss the testate proceeding, arguing that the holographic will was null and void because he, as the only compulsory heir, had been preterited. The trial court granted the motion and dismissed the petition for probate. It later denied reconsideration and appointed Bernardo as administrator of Clemencia's intestate estate.

Soledad and Rafael Maninang challenged the dismissal before the Court of Appeals through certiorari. The Court of Appeals denied the petition, holding that the trial court's dismissal was a final order that should have been challenged by appeal. The case was then elevated to the Supreme Court.

ISSUE

The first issue was whether the trial court acted with grave abuse of discretion or in excess of its jurisdiction when it dismissed the testate proceeding without first allowing the holographic will to undergo probate.

The second issue was whether the probate court could dismiss the petition for probate on the ground that Bernardo Aseneta had been preterited, considering that the issue of whether he had actually been preterited or validly disinherited had not been thoroughly determined.

The third issue was whether certiorari was a proper remedy to challenge the dismissal of the testate proceeding.

HELD

The Supreme Court GRANTED the petition. It held that the trial court acted in excess of its jurisdiction when it dismissed the testate proceeding. As a general rule, the probate of a will is mandatory under Article 838 of the Civil Code. No will may pass real or personal property unless it has been proved and allowed in accordance with the Rules of Court.

The Court explained that the ordinary function of probate is to determine the extrinsic validity of the will—its due execution, testamentary capacity, and compliance with the formal requirements prescribed by law. The intrinsic validity of the provisions of the will is normally considered only after the will has been authenticated.

The Court recognized the exception established in Nuguid v. Nuguid and Balanay v. Martinez, where practical considerations may justify determining intrinsic validity even before probate. However, those cases were exceptions rather than the general rule. In the present case, the issue of whether Bernardo had been preterited or disinherited required a determination that had not been thoroughly made by the trial court.

The Court emphasized that preterition and disinheritance are different concepts. Preterition consists of the omission of compulsory heirs from the will without instituting them as heirs or expressly disinheriting them. Disinheritance, on the other hand, is a testamentary disposition depriving a compulsory heir of his legitime for a cause authorized by law. Their legal effects are also different.

Under Article 854 of the Civil Code, preterition annuls the institution of heirs, while under Article 918, ineffective disinheritance annuls the institution only insofar as it prejudices the disinherited heir. The Court found that the trial court prematurely concluded that Bernardo had been preterited. The contents of the will did not make that conclusion indubitable.

The Supreme Court further held that certiorari was a proper remedy because the probate court had acted in excess of its jurisdiction. It therefore set aside the Court of Appeals' decision and nullified the trial court's orders dismissing the testate case. The testate proceeding was ordered reinstated and consolidated with the intestate proceeding for further proceedings. 

In the Matter of the Petition to Approve the Will of Leodegaria Julian: Felix Balanay, Jr. v. Hon. Antonio M. Martinez, et al. G.R. No. L-39247, June 27, 1975 Second Division — Aquino, J

 

FACTS

Leodegaria Julian died on February 12, 1973, leaving a notarial will dated September 5, 1970. She was survived by her husband, Felix Balanay, Sr., and their six legitimate children. In her will, Leodegaria declared that she owned the southern half of nine conjugal lots and two parcels of land inherited from her father. She expressed her desire that her properties should not be divided among her heirs during her husband's lifetime and that their legitimes should be satisfied from the fruits of the properties.

In paragraph V of the will, Leodegaria provided for the division and distribution of her paraphernal and conjugal lands among her six children after her husband's death. She effectively disposed of her husband's one-half share in the conjugal properties. Felix Balanay, Sr. initially opposed the probate but later withdrew his opposition and executed an instrument entitled “Conformation of Division and Renunciation of Hereditary Rights,” by which he waived and renounced his hereditary rights in favor of their six children and confirmed the partition of the conjugal properties provided in the will.

The probate court initially gave effect to Felix Balanay, Sr.'s conformity and proceeded with the probate. Subsequently, another lawyer filed a motion seeking to withdraw the petition for probate and convert the proceeding into intestate proceedings. The trial court adopted the view that the will was void and, on February 28, 1974, dismissed the petition for probate, converted the proceeding into an intestate proceeding, and ordered the publication of notice to creditors. Felix Balanay, Jr. later sought reconsideration, asserting that the withdrawal of the probate petition had been made without his authority.

The trial court denied reconsideration and maintained that it had independently determined that the will was void. The Supreme Court considered whether the probate court properly passed upon the intrinsic validity of the will before determining its formal validity, and whether the provisions of the will were in fact sufficient to render the entire will void.

ISSUE

The first issue was whether the probate court erred in passing upon the intrinsic validity of the will before ruling on its formal validity and in declaring the will void.

The second issue was whether the invalidity of certain provisions of the will rendered the entire will void.

The third issue was whether the testatrix could validly provide for the partition of the conjugal properties and require that the legitimes of the compulsory heirs be satisfied in cash.

HELD

The Supreme Court held that, because of the unusual provisions of the will and the circumstances surrounding the withdrawal of the probate petition, the probate court could pass upon the intrinsic validity of the will before its formal validity had been established. The Court explained that where practical considerations demand it, particularly when the will appears on its face to be intrinsically void, the probate court may determine the intrinsic validity rather than allow the probate proceeding to become an idle ceremony.

However, the Supreme Court held that the probate court erred in declaring the entire will void. Under Article 792 of the Civil Code, the invalidity of one of several dispositions does not invalidate the other dispositions unless it appears that the testator would not have made the other dispositions had the invalid provision not been made. The Court found that the invalid provisions could be separated from the valid provisions without defeating the testatrix's general testamentary scheme.

The Court found that Leodegaria's statement that she owned the southern half of the conjugal properties was contrary to law because her share in the conjugal property was still inchoate and pro indiviso. This did not, however, invalidate the entire will. The Court likewise held that the provision requiring the estate to remain undivided during the husband's lifetime could not operate indefinitely. Under Article 1083 of the Civil Code, the estate could remain undivided only for the period allowed by law.

The Court further held that the provision requiring the legitimes to be paid in cash was contrary to Article 1080 of the Civil Code, because the testatrix had not assigned the whole estate to one or more children in the manner contemplated by that provision. Nevertheless, the will remained intrinsically valid subject to these limitations. The surviving husband could validly renounce his hereditary rights and his one-half share in the conjugal partnership under Articles 179(1) and 1041, although the renunciation, insofar as it constituted a donation, remained subject to Articles 750 and 752.

The Court therefore held that the will should proceed to probate. It emphasized that, except in an extreme case where a will is intrinsically void on its face, the probate court should first pass upon its formal validity. Under Article 838 of the Civil Code, probate is generally mandatory. The Court also applied the principle that testacy is preferred to intestacy, and that an interpretation which gives effect to a testamentary disposition is preferred over one that would nullify it. The trial court was therefore directed to proceed with the probate of Leodegaria Julian's will. 

Remedios Nuguid v. Felix Nuguid and Paz Salonga Nuguid G.R. No. L-23445, June 23, 1966 En Banc — Sanchez, J.

FACTS

Rosario Nuguid, a resident of Quezon City, died on December 30, 1962, single and without descendants, whether legitimate or illegitimate. She was survived by her legitimate parents, Felix Nuguid and Paz Salonga Nuguid, and six brothers and sisters, including petitioner Remedios Nuguid. On May 18, 1963, Remedios filed before the Court of First Instance of Rizal a holographic will allegedly executed by Rosario on November 17, 1951. The will sought to give all of Rosario's property upon her death to Remedios, whom it described as her beloved sister.

Felix and Paz opposed the probate of the will. They were the legitimate parents of Rosario and therefore compulsory heirs in the direct ascending line. They argued that their complete omission from the will constituted preterition, and that under Article 854 of the Civil Code, such preterition would annul the institution of Remedios as universal heir. Before the probate hearing could take place, Felix and Paz moved to dismiss the proceeding on the ground of absolute preterition.

The Court of First Instance of Rizal granted the motion to dismiss. It held that the will was a complete nullity and that the estate would consequently pass by intestate succession. Remedios moved for reconsideration, but the motion was denied. She then appealed to the Supreme Court.

The Supreme Court noted that probate proceedings ordinarily concern the extrinsic validity of a will, such as its due execution, testamentary capacity, and compliance with the formal requirements of law. Ordinarily, the intrinsic validity of the testamentary provisions is considered only after probate. However, the Court decided to determine the intrinsic validity in this case because remanding the case for probate would merely prolong the proceedings, since the same issue concerning the nullity of the will would likely return to the Court.

ISSUE

The first issue was whether the complete omission of Rosario Nuguid's compulsory heirs in the direct ascending line constituted preterition under Article 854 of the Civil Code.

The second issue was whether the preterition of the compulsory heirs annulled the institution of Remedios Nuguid as universal heir and resulted in intestate succession.

The third issue was whether the case involved ineffective disinheritance rather than preterition, and whether the institution of Remedios as universal heir should merely be reduced to preserve the legitimes of Rosario's parents.

HELD

The Supreme Court AFFIRMED the order of the trial court declaring the will a complete nullity. It held that Rosario's parents, Felix and Paz, were compulsory heirs in the direct ascending line and that the will completely omitted them. They received nothing under the testament and were not expressly disinherited. The Court therefore found a clear case of preterition.

The Court applied Article 854 of the Civil Code, which provides that the preterition or omission of one, some, or all compulsory heirs in the direct line shall annul the institution of heirs, while devises and legacies remain valid insofar as they are not inofficious. The Court explained that preterition requires the complete omission of a compulsory heir, meaning that the heir receives nothing under the will. Since Felix and Paz received nothing and were not expressly disinherited, the requirements of preterition were present.

The Court held that the effect of preterition was the total annulment of the institution of Remedios as universal heir. The will contained only one testamentary disposition: the institution of Remedios as the sole and universal heir of Rosario's entire estate. There were no separate legacies or devises. Consequently, once that institution was annulled under Article 854, nothing remained in the will. The result was intestate succession.

The Court rejected Remedios' argument that the case involved ineffective disinheritance. It distinguished preterition from disinheritance: preterition is the omission of a compulsory heir without express disinheritance, while disinheritance is a testamentary disposition depriving a compulsory heir of the legitime for a cause authorized by law. The will did not expressly disinherit Rosario's parents; it simply omitted them. The Court therefore held that Article 854 governed, rather than the rules on ineffective disinheritance.

The Court also rejected the argument that Remedios' universal institution should merely be treated as a legacy or bequest and reduced to preserve the parents' legitimes. It held that an institution of heirs is distinct from a legacy. Because the will contained no other testamentary disposition apart from the institution of Remedios as universal heir, the annulment of that institution rendered the entire will null, and intestate succession followed. The order of the trial court was therefore affirmed, with no pronouncement as to costs. 

In the Matter of the Intestate Estate of Edward E. Christensen, deceased: Adolfo C. Aznar v. Maria Lucy Christensen Duncan G.R. No. L-24365, June 30, 1966 En Banc — Makalintal, J.

 

FACTS

Edward E. Christensen, a citizen of California domiciled in the Philippines, died leaving a will executed on March 5, 1951. The will was admitted to probate by the Court of First Instance of Davao. In the will, Christensen expressly recognized Maria Lucy Christensen Daney as his daughter. He also left Maria Helen Christensen a legacy of ₱3,600.00, although he expressly stated in the will that she was not related to him and had never been adopted by him. Maria Helen was subsequently judicially declared to be his natural child.

In an earlier proceeding involving the partition of the estate, the trial court approved a project of partition based on the provisions of the will and the law of California. On appeal, the Supreme Court reversed the order and held that the validity of the provisions of the will should be governed by Philippine law. The case was remanded to the trial court for partition in accordance with Philippine law.

The trial court thereafter approved a new project of partition that divided the properties equally between Maria Lucy Christensen Duncan and Maria Helen Christensen Garcia. It held that Helen Garcia had been preterited in the will and that the institution of Lucy Duncan as heir was therefore annulled under Article 854 of the Civil Code, resulting in intestate succession, subject to the legacies in the will. Lucy Duncan appealed.

The issue before the Supreme Court was whether Helen Garcia's receipt of the ₱3,600.00 legacy constituted preterition, which would annul the institution of Lucy Duncan as heir, or whether Helen Garcia was merely entitled to demand the completion of her legitime under Article 906 of the Civil Code, leaving the institution of Lucy Duncan intact.

ISSUE

The first issue was whether Maria Helen Christensen Garcia was preterited within the meaning of Article 854 of the Civil Code, despite having been given a legacy of ₱3,600.00 in the will.

The second issue was whether Article 906 of the Civil Code applied, such that Helen Garcia would merely be entitled to demand the completion of her legitime rather than the annulment of the institution of Lucy Duncan as heir.

The third issue was whether Helen Garcia was entitled to one-half of the estate by intestate succession or only to her legitime equivalent to one-fourth of the hereditary estate.

HELD

The Supreme Court SET ASIDE the trial court's order approving the project of partition and remanded the case for a new partition. It held that Helen Garcia was not preterited because the testator had left her a legacy of ₱3,600.00. Preterition under Article 854 of the Civil Code requires the complete omission of a compulsory heir in the direct line from the will. Since Helen Garcia had received something under the will, there was no complete omission.

The Court explained that Article 906 applies when a compulsory heir is given by any title less than the legitime belonging to him. In such a case, the heir may demand that the legitime be fully satisfied. The Court distinguished this situation from preterition under Article 854, where the compulsory heir receives nothing under the will and the institution of heirs is annulled.

The Court held that although Helen Garcia was not named as an heir and her status as the testator's natural child was even denied in the will, the ₱3,600.00 legacy given to her prevented her from being considered completely omitted. The Court noted that the law had adopted the rule that a compulsory heir who receives something by any title, even if insufficient to cover the legitime, is not preterited but may only demand the completion of the legitime.

The Court therefore ruled that Helen Garcia was entitled only to her legitime, equivalent to one-fourth of the hereditary estate, rather than an equal share with Lucy Duncan as in intestate succession. The Court further held that Helen Garcia became the owner of her legitime upon the death of Christensen under Articles 774 and 777 of the Civil Code, and was consequently entitled to the corresponding portion of the fruits and increments of the estate, including stock dividends. The case was remanded for partition in accordance with the ruling.

Administration of the Estate of Agripino Neri y Chavez — Eleuterio Neri, et al. v. Ignacia Akutin and her Children G.R. No. L-47799, May 21, 1943 En Banc — Moran, J.

 

FACTS

Agripino Neri y Chavez left a will in which he left all his property by universal title to the children of his second marriage. The children of his first marriage were the petitioners. They claimed that they had been preterited because, without being expressly disinherited, they were left nothing, or at least some of them were left nothing, under the will. The Supreme Court had previously annulled the institution of heirs and declared total intestacy.

The respondents moved for reconsideration, arguing that there was no preterition because the children of the first marriage had already received their shares in the property left by the testator. They further argued that even assuming there was preterition, its effect should not be the annulment of the institution of heirs, but merely the reduction of the bequest made to the children of the second marriage.

The Court examined the findings of the trial court and the Court of Appeals concerning the properties allegedly received by the children of the first marriage. The Court found that the property remained claimed by children of both marriages and that the findings did not establish that the children of the first marriage had received their shares from the testator. The Court therefore concluded that the testator had left all his property to the children of the second marriage by universal title while leaving nothing to some of the children of the first marriage.

The Court accordingly found that the circumstances constituted preterition. It applied Article 814 of the Civil Code, which provided that the preterition of one or all forced heirs in the direct line annulled the institution of heirs, while legacies and betterments remained valid insofar as they were not inofficious.

ISSUE

The first issue was whether the children of the first marriage had been preterited, considering the respondents' claim that they had already received their shares in the property of the deceased.

The second issue was whether, assuming preterition existed, its effect was the annulment of the institution of heirs and the opening of intestate succession, or merely the reduction of the testamentary disposition in favor of the children of the second marriage.

The third issue was whether Articles 814, 817, and 851 of the Civil Code were applicable to the situation presented in the case.

HELD

The Supreme Court DENIED the motion for reconsideration. It held that the children of the first marriage had been preterited. The Court found that the testator left all his property by universal title to the children of his second marriage and, without expressly disinheriting the children of his first marriage, left nothing to them or at least to some of them. This constituted preterition under Article 814 of the Civil Code.

The Court explained that Article 814 expressly provided that the preterition of one or all forced heirs in the direct line annulled the institution of heirs, while legacies and betterments remained valid insofar as they were not inofficious. The Court further held that Article 851, which concerned unfounded disinheritance, could not be applied because the case involved preterition and not disinheritance.

The Court also rejected the argument that the testamentary disposition in favor of the children of the second marriage should merely be treated as legacies or betterments and simply reduced. It held that adopting that theory would render Articles 814 and 851 meaningless because every institution of heirs could then be converted into a legacy or betterment and merely reduced. The Court stated that this would not be a construction of the Civil Code but a destruction of integral provisions concerning preterition and disinheritance.

The Court further held that Article 814 was in force, noting that the provisions of the Civil Code affected by the Code of Civil Procedure had been restored by Act No. 2141. It therefore maintained its ruling that the institution of heirs was annulled and intestate succession was opened. The Court also considered the circumstances indicating that the testator had omitted the children of the first marriage because he believed that he had already given them more property than the children of the second marriage. The motion for reconsideration was consequently denied

CASE DIGEST : Abbott Laboratories, Philippines, et al. v. Pearlie Ann F. Alcaraz G.R. No. 192571, July 23, 2013 En Banc — Perlas-Bernabe, J.

 

FACTS

Abbott Laboratories, Philippines hired Pearlie Ann F. Alcaraz as Regulatory Affairs Manager on a probationary basis. On December 7, 2004, Abbott formally offered her the position, and she accepted it. Her employment contract, signed on February 12, 2005, expressly stated that she would be employed on probation for six months, from February 15, 2005 to August 14, 2005. Before and during her engagement, Abbott provided her with the organizational chart, job description, company policies, Code of Conduct, and Performance Modules.

During her employment, Alcaraz managed the staff of Abbott's Hospira Affiliate Local Surveillance Unit. Abbott's Performance Standards and Evaluation procedure required probationary employees to undergo formal performance reviews during the third and fifth months of their probationary period. Alcaraz was informed of Abbott's evaluation system and was given the materials concerning performance standards. Abbott later determined that she had problems in time management, people management, staff training, and decision-making necessary for her position.

On May 16, 2005, Alcaraz was informed that she failed to meet the standards for regularization. She was asked to resign, otherwise Abbott would terminate her services. She was also told not to report for work and was asked to surrender her identification cards. On May 23, 2005, she received a letter stating that her services had been terminated effective May 19, 2005 because she failed to meet the reasonable standards for regularization. She thereafter filed a complaint for illegal dismissal and damages.

The Labor Arbiter dismissed her complaint. The NLRC reversed and found that Alcaraz had been illegally dismissed, ordering her reinstatement with backwages and damages. The Court of Appeals affirmed the NLRC, holding that Abbott failed to inform Alcaraz at the beginning of her employment of the standards for regularization. Abbott then filed a petition for review on certiorari before the Supreme Court.

ISSUE

The first issue was whether the petitioners were guilty of forum shopping and violated the certification requirement under Section 5, Rule 7 of the Rules of Court.

The second issue was whether Alcaraz was sufficiently informed of the reasonable standards that she had to meet in order to qualify as a regular employee.

The third issue was whether Alcaraz was validly terminated from her probationary employment.

The fourth issue was whether the individual petitioners, as corporate officers, could be held personally liable for Alcaraz's termination.

HELD

The Supreme Court GRANTED the petition and REVERSED and SET ASIDE the Court of Appeals' decision and resolution. It reinstated the Labor Arbiter's decision, with the modification that Abbott Laboratories, Philippines was ordered to pay Alcaraz ₱30,000.00 in nominal damages because of its breach of its own company procedure.

The Court held that there was no forum shopping. The first Court of Appeals petition questioned the NLRC ruling finding that Alcaraz had been illegally dismissed, while the second petition concerned the propriety of enforcing the judgment award while the labor dispute was still pending. The two proceedings involved different subject matters and causes of action. The Court likewise found no violation of the certification requirement under Section 5, Rule 7 because the matter involved in the separate proceeding concerned the execution of the judgment and not the validity of Alcaraz's dismissal.

The Court held that a probationary employee enjoys security of tenure. Under Article 295 of the Labor Code, a probationary employee may be terminated for a just or authorized cause, or for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer at the time of engagement. Section 6(d), Rule I, Book VI of the Implementing Rules likewise provides that the employer must make the standards for regularization known to the probationary employee at the time of engagement; otherwise, the employee is deemed regular.

The Court found that Abbott had sufficiently informed Alcaraz of the standards for regularization. Among the circumstances considered were the job description published by Abbott, the statement in the offer sheet that her employment was probationary, the employment contract specifying the six-month probationary period, the organizational chart and job description given to her, her pre-employment orientation, the Code of Conduct and company policies provided to her, and the Performance Modules explaining Abbott's evaluation procedure. The Court held that adequate performance of one's duties is, by itself, an inherent and implied standard for a probationary employee to be regularized and need not always be literally spelled out in technical indicators.

The Court further held that Alcaraz's termination was valid because she failed to meet the standards required for regularization. The usual two-notice rule applicable to dismissals for just causes does not govern a probationary employee whose termination is based on failure to meet the employer's standards for regularization. A written notice served within a reasonable time from the effective date of termination is sufficient. Abbott's written termination letter stated the reasons for her termination and therefore satisfied this requirement.

However, Abbott failed to follow its own Performance Standards and Evaluation procedure. Its policy required formal performance reviews during the third and fifth months, a Performance Improvement Plan when necessary, and documentation of the employee's performance. The Court found no evidence that these procedures were followed in Alcaraz's case. The Court held that company personnel policies create an obligation on both employer and employee to abide by them. Abbott's failure to follow its own procedure constituted a breach of its contractual obligation.

Because the dismissal had a valid cause but Abbott violated its own company procedure, the Court awarded ₱30,000.00 nominal damages under Article 2221 of the Civil Code. The Court held that the dismissal itself remained valid because Alcaraz failed to meet the standards for regularization, but the contractual breach warranted nominal damages. The Court also held that the individual corporate officers were not personally liable because Alcaraz failed to prove that they acted in bad faith or were motivated by ill will.