The Heirs of Loreto San Jose Ferrer vs. Rosita San Jose Ferrer

Manila

SECOND DIVISION

[ G.R. No. 234203, June 26, 2023 ]

THE HEIRS OF LORETO SAN JOSE FERRER, NAMELY, ROBERTO B. FERRER, MELCHOR B. FERRER, ARTURO B. FERRER, MARIA ANGELITA B. FERRER, CHARITO B. FERRER, AND OWEN BRIAN B. FERRER, PETITIONERS, VS. ROSITA SAN JOSE FERRER, RESPONDENT.

DECISION

KHO, JR., J.:

This resolves the Petition for Review on Certiorari1 filed by the heirs of Loreto San Jose Ferrer (Heirs of Loreto; collectively, petitioners), assailing the Decision2 dated December 9, 2016 and the Resolution3 dated September 15, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 136959, which affirmed the Amended Order4 dated April 11, 2014 and the Order5 dated August 8, 2014 of the Regional Trial Court of Manila, Branch 26 (RTC-Manila) in Civil Case No. 97-85291. The Orders of the RTC-Manila granted the motion for recusal6 filed by respondent Rosita San Jose Ferrer (Rosita).

The Facts

Loreto, Alfredo, Rosita, siblings and all surnamed Ferrer, along with their mother Enrica, were the heirs of Fernando Ferrer (Fernando), the family patriarch. Another sibling, Rodolfo Ferrer, predeceased their parents. When Fernando died intestate in 1975, the heirs agreed to extrajudicially settle the undivided one-half of his estate as follows: five-eighths (5/8) in favor of Enrica and one-eighth (1/8) each to Loreto, Alfredo, and Rosita.7

The present case arose when Loreto filed an action for annulment of sale, partition, accounting, and damages against their sister Rosita and their mother Enrica San Jose vda. de Ferrer (Enrica). He also impleaded as "unwilling plaintiffs" the heirs of his brother, Alfredo, who died in 1984. The civil case was filed with the RTC-Manila.8

In their complaint,9 Loreto alleged that after Alfredo's death, Rosita took over the management and administration of the real properties in Fernando's estate. Further, Rosita, allegedly through fraud, also acquired ownership of Enrica's 5/8 share in Fernando's estate by tricking Enrica into signing a deed conveying her share in the estate to Rosita. New titles reflecting the purportedly fraudulent conveyance were issued covering the properties in Fernando's estate, which comprise of three (3) parcels of land in Makati, Manila, and Pasay ("subject properties").10

In a Decision11 dated February 14, 2006, the RTC-Manila granted their complaint and disposed as follows:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of plaintiff and unwilling co-plaintiffs and against the defendants, to wit:

a) Defendant Rosita San Jose Ferrer is hereby ordered to render a complete accounting of all income, fruits and benefits, disbursements or expenses on the said real properties, including the improvements thereon from 1983 to the present;

b) To deliver to the plaintiff Loreto San Jose Ferrer and to the heirs of Alfredo San Jose Ferrer their due shares from all the income, fruits and benefits from the subject real properties;

c) The three (3) Deeds of Conveyance executed by Enrica San Jose vda de Ferrer in favor of Rosita San Jose Ferrer is (sic) hereby declared null and void;

d) Consequently, Transfer Certificate of Title No. 168142, Book 839 Page 142 of the Registry of Deeds of Makati City; Transfer Certificate of Title No. 130709, Book 625 page 9 of the Registry of Deeds of Pasay City; and Transfer Certificate of Titles (sic) No. 224957-ind., Book T-1391, Page 157 and Transfer Certificate of Title No. 224958, Book T-1391, Page 138 of the Registry of Deeds of Manila are hereby cancelled;

e) The Register of Deeds of Makati City, Pasay City and Manila is (sic) hereby ordered to cancel the titles above-mentioned and reinstate it (sic) to their prior titles;

f) The restored properties of Defendant Enrica San Jose vda de Ferrer be partitioned among her legal heirs, namely Loreto San Jose Ferrer, Rosita San Jose Ferrer and the heirs of the late Alfredo San Jose Ferrer in accordance to (sic) Intestate Succession Law or by agreement of the parties;

g) Defendant Rosita San Jose Ferrer is hereby ordered to pay plaintiff Loreto San Jose Ferrer the amount of P1,000,000.00 for actual and compensatory damages, the amount of P150,000.00 for moral damages; the amount of P200,000.00 for exemplary damages; the amount of P100,000.00 for attorney's fees;

h) Defendant Rosita San Jose Ferrer is hereby ordered to pay unwilling co-plaintiffs the amount of P250,000.00 for moral damages and the amount of P100,000.00 for attorney's fees.

SO ORDERED.12

Rosita appealed13 the decision with the CA. In the meantime, on September 11, 2008, Enrica died.14

In a Decision15 dated August 13, 2009, the CA denied Rosita's appeal with modification as to the amount awarded as moral damages and attorney's fees. On February 18, 2010, Rosita filed a manifestation16 stating that the subject matter of the litigation is now with the RTC of Makati City, Branch 141 (RTC-Makati), which is the trial court hearing the petition for probate of Enrica's will.17 She also moved for the remand of the case to the RTC-Makati. The CA merely noted Rosita's manifestation since its decision had already become final and executory. Undeterred, Rosita filed a petition for review on certiorari18 with this Court. In a Resolution19 dated September 15, 2010, the Court denied Rosita's petition for review on certiorari for being prosecuted manifestly for delay. Her motion for reconsideration20 was given the same treatment in the Court's subsequent Resolution21 dated December 6, 2010.22

In the meantime, on August 24, 2010, Loreto filed a motion23 with the RTC-Manila for the execution of its decision. Rosita opposed the motion, arguing that the res of the civil case is within the jurisdiction of the RTC-'Makati, and that the issue of remanding the case to the RTC-Manila is pending with this Court.24

The RTC-Manila granted Loreto's motion for execution and issued a writ of execution on October 18, 2010. As part of the execution proceedings, Rosita subsequently submitted a Report of an Independent Auditor25 on the income and expenses regarding the subject properties.26

After examining the report and the comments submitted by the parties, the RTC-Manila ordered27 Rosita to deposit the amount of ₱7,158,485.79 and ₱9,294,146.35, representing the shares of Loreto and the heirs of Alfredo, respectively, in the income from the subject properties. Rosita moved for reconsideration,28 which the RTC-Manila denied in an Order29 dated January 3, 2014. The court also ordered Rosita to deposit the amounts within ten (10) days from notice.30

Rosita then filed mother Motion for Reconsideration, which included a Motion to Recuse in favor of the Estate Court after the Order of Admission (Probate) of the Decedent's Will.31 She argued that since Enrica's will was already admitted by the RTC-Makati, then the execution of the judgment in the civil case, particularly the delivery of shares in the subject properties, must be transferred to that court.Lαwρhi৷

In an Amended Order32 dated April 11, 2014, the RTC-Manila denied the motion for reconsideration and cited Rosita in indirect contempt for failing to comply with the order to deposit the shares. However, it granted the motion to recuse in favor of the RTC-Makati "in order to prevent useless duplicity in the administration of the assets of the deceased Enrica x x x."33 The RTC-'Manila added that "Court's Decision which has become final and the order pertaining to the accounting both of which should be presented to the estate court."34

Loreto filed a Partial Motion for Reconsideration of the Amended Order.35 He argued that the motion to recuse should not have been granted and that recusing in favor of the RTC-Makati is unjustified and legally baseless. The RTC-Manila denied Loreto's motion in an Order36 dated August 8, 2014.

Consequently, Loreto filed a Petition for Certiorari37 under Rule 65 of the Rules of Court with the CA, arguing that the RTC-Manila committed grave abuse of discretion in granting the motion to recuse in favor of the RTC'-Makati.

The CA Ruling

In a Decision38 dated December 9, 2016, the CA denied the petition. It found no grave abuse of discretion on the part of the RTC-Manila in recusing from the case in favor of the RTC-Makati. Citing Natcher v. CA,39 it ruled that the properties subject of the civil case form part of Enrica's estate and consequently, a final judgment concerning such properties must be submitted to the RTC-Makati for enforcement.

The CA also held that referring the decision of the RTC-Manila to the RTC-Makati will not prejudice Loreto and the heirs of Alfredo since the RTC-'Makati will only enforce the judgment. The judgment, the CA noted, would be in the nature of a claim against the estate of Enrica.40

Petitioners, who substituted Loreto when he died on May 23, 2016,41 filed a motion for reconsideration,42 which the CA denied in a Resolution43 dated September 15, 2017.

Hence, this petition.

The Issue Before the Court

The sole issue for the Court's resolution is whether the CA erred in finding no grave abuse of discretion in the RTC-Manila's order of recusal in favor of the RTC-Makati.

The Court's Ruling

The petition is partly meritorious.

Generally, only questions of law are entertained in petitions for review on certiorari. In certain exceptions,44 however, the Court may review the factual issues presented and allegations made by the parties. As the present petition comes to this Court via a decision of the CA in a petition for certiorari under Rule 65 of the Rules of Court, the Court's review is focused primarily on whether the CA correctly ruled on the presence or absence of grave abuse of discretion on the part of the assailed orders of the RTC-Manila.45 In this regard, it is well to stress that "[t]he term 'grave abuse of discretion' has a specific meaning. An act of a court or tribunal can only be considered as with grave abuse of discretion when such act is done in a 'capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction.' The abuse of discretion must be so patent and gross as to amount to an 'evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.'"46

Relatedly, in Presidential Decree No. 1271 Committee, et al. v. De Guzman,47 the Court held that in a Rule 45 petition assailing a decision of the CA under a Rule 65 petition, factual findings of the CA may not generally be disturbed unless upon a showing that "the factual findings complained of are completely devoid of support from the evidence on record, or the assailed judgment is based on a gross misapprehension of facts."48

Guided by the foregoing considerations, the Court rules that the CA erred in not ascribing grave abuse of discretion on the part of the RTC-Manila in totally recusing from the case in favor of the RTC-Makati.

At this juncture, it is well to point out that the Decision49 dated February 14, 2006 of the RTC-Manila had attained finality as early as 2009, when neither party timely lodged an appeal from the CA Decision in August of the same year.50 Thus, the principle of finality of judgments, which considers final judgments as immutable and unalterable even in the face of perceived errors in factual or legal conclusions,51 applies squarely to this case. Since the aforesaid RTC-Manila Decision had attained finality, the prevailing party is entitled to execution as a matter of right.52

However, it bears noting that the principle of immutability of judgments has recognized exceptions, one of which is whenever circumstances transpire after the finality of the decision, rendering its execution unjust and inequitable.(awÞhi(53 These circumstances, which refer to supervening events, are acts that transpire after judgment has become final and executory or to new circumstances which developed after the judgment has acquired finality, including matters which the parties were not aware of prior to or during the trial as they were not yet in existence at that time.54 To be sufficient to stay or stop the execution, the supervening event must create a substantial change in the rights or relations of the parties which would render the execution of a final judgment unjust, impossible, or inequitable making it imperative to stay immediate execution in the interest of justice.55 There are two (2) requisites for this exception to apply, namely: (a) the fact constituting the supervening event must have transpired after the judgment has become final and executory, and should not have existed prior to the finality of judgment; and (b) it must be shown that the supervening event affects or changes the substance of the judgment and renders its execution inequitable.56

In this case, it is well to recapitulate that Rosita filed a motion57 before the RTC-Manila seeking for its recusal from the "pending incidents" of this case, particularly: (a) the partition of Enrica's 5/8 share in the subject properties and (b) the order of accounting for the "money of the decedent."58 According to Rosita, since Enrica had already died and that judicial settlement proceedings have already commenced in the RTC-Makati, the pending incidents are considered claims against the estate and may only be heard by the estate court to the exclusion of all other courts. Finding merit in Rosita's motion, the RTC-Manila issued its Amended Order59 dated April 11, 2014 where, inter alia, it recused itself from the entire case "in order to prevent useless duplicity in the administration of the assets of the deceased Enrica,"60 further adding that "the recusation will not in any way affect the validity of this Court's Decision which has become final and the order pertaining to the accounting both of which should be presented to the estate court."61 According to the CA, such blanket recusal was not tainted with grave abuse of discretion.

The Court disagrees.

It is true that the institution of the judicial settlement proceedings of Enrica's estate in the RTC-Makati constitutes a supervening event which shall halt the execution of the RTC-Manila ruling, because all matters pertaining to properties belonging to Enrica's estate should be rightfully decided by the RTC-Makati. This is pursuant to the well-settled rule that "a probate court has the jurisdiction to determine all the properties of the deceased, to determine whether they should or should not be included in the inventory or list of properties to be administered."62

However, it bears pointing out that Civil Case No. 97-85291 before the RTC-Manila did not solely involve properties belonging to Enrica. Aside from praying for the annulment of the sale of Enrica's 5/8 share in Fernando's estate to Rosita, the complaint also prayed for the partition of the subject properties between the parties as their co-owners. As stated earlier, in 1978, Enrica and her children Loreto, Alfredo, and Rosita, as intestate heirs of Fernando, extrajudicially agreed to settle his estate by dividing his properties in accordance to the 5/8 - 3/8 configuration.63 By virtue of Fernando's demise, as intestate heirs, they became co-owners of the subject properties64 and by the extrajudicial settlement they executed, each of the heirs determined their pro indiviso share in the properties. The case before the RTC-Manila, therefore, was also a special civil action for partition.

The RTC-Manila, despite being fully aware that the case before it concerned the properties in Fernando's estate ' and hence, only a portion thereof rightfully belonged to Enrica ' issued a blanket recusal from executing its own final judgment in favor of the RTC-Makati which was acting as a probate court hearing the settlement of Enrica's estate. Suffice it to say that the RTC-Makati had no jurisdiction over properties which do not belong to Enrica's estate. As the Court sees it, this blanket recusal on the part of RTC-Manila, which essentially amounted to a refusal to execute its own final judgment and handing the same to a tribunal that is not empowered to do so, is tantamount to an evasion of duty that is considered grave abuse of discretion65 ' at least insofar as those properties not belonging to Enrica's estate are concerned.

Consequently, the CA reversibly erred in finding no grave abuse of discretion on the part of the RTC-Manila. In doing so, it erroneously considered the subject properties to be wholly owned by Enrica, as shown by the statement in its decision that "[i]t is beyond question that the properties subject matter of the case a quo wherein the judgment of which became final and executory are part and parcel of the estate of [Enrica]."66 It is from this error of fact that the CA held that the entire final judgment referred solely to Enrica's properties and may be properly referred to the RTC-Makati for enforcement. A closer reading of the records, however, leads to the inescapable conclusion that Enrica did not entirely own, but only had a share ' 5/8 to be precise ' in the subject properties.

That the subject properties are part of Fernando's estate and not wholly owned by Enrica is also borne by the records. Rosita, in her Memorandum,67 averred that "[t]he late Enrica San Jose vda. de Ferrer was the 5/8 pro indiviso co-owner of 3 pieces of real estate which are referred to in the records as the [San] Lorenzo Village, Makati City; EDSA cor. Sarhento Mariano St., Pasay City; and Pedro Gil St., Paco, Manila properties. Each of the three children of Enrica owned 1/8 of these properties."68 Petitioners likewise recognized this agreed-upon division of the properties.69 In fact, Enrica herself, in her Huling Habilin at Testamento,70 referred to the subject properties as follows, albeit considering them as having been previously sold:

"1) Na ang mga ari-ariang aking maiiwan ay ang mga sumusunod:

1.1) 5/8 na bahagi ng lupa na matatagpuan sa Barrio ng San Roque, Pasay x x x

1.2) 5/8 na bahagi ng lupa na matatagpuan sa Sta. Rosa, Laguna x x x

1.3) Na ito na lamang ang nalalabi sa aking mga lupain dahil ang mga bahagi ko sa mga lupaing noon ay akin na matatagpuan sa San Lorenzo Village, Makati, Paco, Manila, at EDSA, Pasay, ay matagal ko nang ipinagbili ng (sic) kusang-loob at nang walang pumipilit sa akin."71 (Emphasis supplied)

In light of the foregoing, the Court hereby limits the RTC-Manila's recusal in favor of the probate court, the RTC-Makati, to only portions of Fernando's estate which rightfully belongs to Enrica's estate. The RTC'-Manila should continue with the execution proceedings insofar as the portion of Fernando's estate not belonging to Enrica's estate is concerned.

ACCORDINGLY, the petition is PARTLY GRANTED. The Decision dated December 9, 2016 and the Resolution dated September 15, 2017 of the Court of Appeals in CA-G.R. SP No. 136959 are hereby MODIFIED. Accordingly, the Amended Order dated April 11, 2014 of the Regional Trial Court of Manila, Branch 26 is PARTLY SET ASIDE insofar as the properties not belonging to the estate of Enrica San Jose vda. de Ferrer is concerned. Further, the Regional Trial Court of Manila, Branch 26 is ORDERED to resume execution proceedings insofar as the properties not belonging to the estate of Enrica San Jose vda. de Ferrer with REASONABLE DISPATCH.

SO ORDERED.

Leonen,* Acting C.J. (Chairperson), Lazaro-Javier** (Working Chairperson), M. Lopez, and J. Lopez, JJ., concur.

Footnotes

* Acting Chief Justice per Special Order No. 2989 dated June 24, 2023.

** Working Chairperson per Special Order No. 2993 dated June 26, 2023.

1 Rollo, pp. 3-25.

2 Id. at 28-39. Penned by Associate Justice Maria Elisa Sempio Diy and concurred in by Associate Justices Ramon M. Bato, Jr. and Manuel M. Barrios.

3 Id. at 42-46.

4 CA rollo, pp. 30-31. Penned by Presiding Judge Silvino T. Pampilo, Jr.

5 Id. at 32-33.

6 Id. at 90-102.

7 Id. at 34-35.

8 Docketed as Civil Case No. 97-85291.

9 Not attached to the rollo.

10 CA rollo, pp. 35-36.

11 Id. at 34-40. Penned by Presiding Judge Silvino T. Pampilo, Jr.

12 Id. at 39-40.

13 Not attached to the rollo.

14 Rollo, p. 83.

15 CA rollo, pp. 42-51. Penned by Associate Justice Monina Arevalo-Zenarosa and concurred in by Acting Chairman of the Eleventh Division Fernanda Lampas Peralta and Associate Justice Priscilla J. Baltazar-'Padilla (a former Member of this Court).

16 Not attached to the rollo.

17 Rollo, p. 9.

18 Docketed as G.R. No. 192680.

19 CA rollo, pp. 55-56.

20 Not attached to the rollo.

21 CA rollo, pp. 57-59.

22 Rollo, p. 9.

23 Not attached to the rollo.

24 Rollo, p. 9.

25 CA rollo, pp. 68-85.

26 Rollo, p. 10.

27 See Order dated October 8, 2013; CA rollo, pp. 86-87. Penned by Presiding Judge Silvino T. Pampilo, Jr.

28 Not attached to the rollo.

29 CA rollo, pp. 88-89.

30 Rollo, p. 10.

31 CA rollo, pp. 90-102.

32 Id. at 30-31.

33 Id. at 30.

34 Id.

35 CA rollo, pp. 125-135.

36 Id. at 32-33.

37 Id. at 3-27.

38 Rollo, pp. 28-39.

39 418 Phil. 669 (2001) [Per J. Buena, Second Division].

40 Rollo, p. 36.

41 Id. at 5.

42 CA rollo, pp. 540-549.

43 Id. at 42-46.

44 Heirs of Feraren, et al. v. Court of Appeals (CA), et al., 674 Phil. 358, 365 (2011) [Per J. Peralta, Third Division], citing Spouses Andrada v. Pilhino Sales Corporation, 659 Phil. 70, 78-79 (2011) [Per J. Bersamin, Third Division].

45 See Denila v. Republic of the Philippines, G.R. No. 206077, July 15, 2020 [Per J. Gesmundo, Third Division].

46 Chua v. People, et al., 821 Phil. 271, 279-280 (2017) [Per J. Martires, Third Division], citing Yu v. Judge Reyes-Carpio, et al., 667 Phil. 474, 481-482 (2011) [Per J. Velasco, Jr., First Division].

47 801 Phil. 731 (2016) [Per J. Leonen, Second Division].

48 Id. at 759, citing Fuji Network Television, Inc. v. Espiritu, 749 Phil. 388, 416 (2014) [Per J. Leonen, Second Division] and Meralco Industrial Engineering Services Corp. v. National Labor Relations Commission, 572 Phil. 94, 117 (2008) [Per J. Chico-Nazario, Third Division].

49 CA rollo, pp. 34-40.

50 See Resolution of the Court in G.R. No. 192680 dated September 15, 2010; id. at 55-56.

51 Heirs of Maglaque v. CA, 551 Phil. 665 (2007) [Per J. Quisimbing, Second Division], citing Gallardo'-Corro v. Gallardo, 403 Phil. 498 (2001) [Per J. Bellosillo, Second Division].

52 See Mayor Vargas, et al. v. Cajucom, 761 Phil. 43 (2015) [Per J. Peralta, Third Division], citing Mindanao Terminal and Brokerage Service, Inc. v. CA, et al., 693 Phil. 25 (2012) [Per J. Perez, Second Division].

53 See Philippine Veterans Bank v. Bank of Commerce, G.R. No. 217938, September 15, 2021 [Per J. Inting, Second Division], citing Mercury Drug Corp., et al. v. Spouses Huang, et al., 817 Phil. 434, 445 (2017) [Per J. Leonen, Third Division].

54 See id., citing Natalia Realty, Inc. v. CA, 440 Phil. 1, 23 (2002) [Per J. Carpio, First Division].

55 See id., citing Remington Industrial Sales Corp. v. Maricalum Mining Corp., 761 Phil. 284, 294 (2015) [Per J. Reyes, Third Division].

56 See id., citing Mercury Drug Corp., et al. v. Spouses Huang, et al., supra, at 454.

57 CA rollo, pp. 90-102.

58 Id. at 91-96.

59 Id. at 30-31.

60 Id. at 30.

61 Id.

62 Union Bank of the Philippines v. Santiba'ez, 492 Phil. 329, 337 (2005) [Per J. Callejo, Sr., Second Division], citing Ortega v. Court of Appeals, 237 Phil. 99 (1987) [Per J. Paras, Second Division].

63 CA rollo, pp. 34-35.

64 CIVIL CODE, art. 1078, as cited in Heirs of Lopez v. Development Bank of the Philippines, 747 Phil. 427 (2014) [Per J. Leonen, Second Division] and Heirs of Caburnay v. Heirs of Sison, G.R. No. 230934, December 2, 2020 [Per J. Caguioa, First Division].

65 See Chieng Hung v. Tam Ten, 128 Phil. 248 (1967) [Per J. J.B.L. Reyes, En Banc].

66 Rollo, p. 36. Underscoring ours.

67 Id. at 203-212.

68 Id. at 203-204.

69 See Memorandum for Petitioners; id. at 177-200. See in particular; id. at 178.

70 Id. at 103-106.

71 Id. at 103.