Title
Arroyo vs. Gerona
Case
G.R. No. 36059
Decision Date
Mar 31, 1933
Concepcion Gerona, mentally incapacitated, died intestate. Her guardian, Ignacio Arroyo, allegedly defrauded her paternal relatives by concealing estate value and transferring assets. Courts voided partition contracts due to fraud and fiduciary breach, granting relief to relatives for parental inheritance but not for brother's estate.
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Case Digest (G.R. No. 36059)

Facts:

  1. Death of Concepcion Gerona: On June 16, 1927, Concepcion Gerona died in Iloilo, leaving no ascendants or descendants. She had suffered from mental alienation from birth and was under the guardianship of her uncle, Ignacio Arroyo, her only maternal relative. Her paternal relatives included her aunts Clara, Ciriaca, Jacoba, and Patricia Gerona, as well as Maria G. and Blas G., children of Victor Gerona, a deceased brother of the aunts.

  2. Intestate Proceedings: Shortly after Concepcion's death, Ignacio Arroyo closed the guardianship and initiated intestate proceedings on September 5, 1928. On October 8, 1928, he was declared the owner of all her property, and the proceedings were closed.

  3. Petition to Annul Documents: On July 9, 1929, Jacoba, Patricia, Ciriaca, and Clara Gerona filed a petition to annul two documents, Exhibits A (dated June 13, 1913) and D (dated September 27, 1928), which effectively deprived them of any share in Concepcion's estate. They also sought to set aside the order adjudicating the estate to Ignacio Arroyo and to appoint a judicial administrator.

  4. Exhibit A (1913 Contract): This was a contract of partition executed between Ignacio Arroyo and the Gerona siblings, dividing the estate of Concepcion's parents, Blas Gerona and Manuela Arroyo. It assigned certain properties to the Geronas and the remainder to Ignacio Arroyo, including the Hacienda Manolita, which later increased in value due to the establishment of the Binalbagan Sugar Central.

  5. Exhibit D (1928 Ratification): This document ratified the 1913 contract, with the Gerona sisters waiving any rights to Concepcion's estate in favor of Ignacio Arroyo.

  6. Fraud Allegations: The Geronas alleged that Ignacio Arroyo misrepresented the value of Concepcion's estate and concealed material facts, exploiting his fiduciary relationship as her guardian.

  7. Property Transfers: Ignacio Arroyo transferred much of the disputed property to his son, Jose Maria Arroyo, complicating the recovery of assets.

Issue:

  1. Whether the contracts Exhibits A (1913) and D (1928) are valid and enforceable.
  2. Whether Ignacio Arroyo committed fraud or breached his fiduciary duty as Concepcion Gerona's guardian.
  3. Whether the Gerona sisters are entitled to relief from the contracts and to a share in Concepcion's estate.
  4. Whether the appointment of a judicial administrator for Concepcion's estate is proper.

Ruling:

  1. Validity of Contracts:

    • Exhibit A (1913): The court declared this contract null and void because it was an agreement to partition the estate of a living person (Concepcion Gerona), which is prohibited under Article 1271 of the Civil Code. Additionally, Ignacio Arroyo's fiduciary relationship with Concepcion rendered the contract presumptively invalid.
    • Exhibit D (1928): The court held that the ratification in Exhibit D was valid only with respect to the property inherited from Salvador Gerona (Concepcion's brother). However, it was void as to the property directly inherited by Concepcion from her parents, due to Ignacio Arroyo's fraudulent conduct.
  2. Fraud and Fiduciary Duty: The court found that Ignacio Arroyo concealed material facts and misrepresented the value of Concepcion's estate, breaching his fiduciary duty as her guardian.

  3. Relief for the Geronas:

    • The Geronas were entitled to relief regarding the property directly inherited by Concepcion from her parents, as they were not complicit in Ignacio Arroyo's fraudulent acts.
    • They were not entitled to recover the property inherited from Salvador Gerona, as they had actively participated in the 1913 contract.
  4. Appointment of Administrator: The court affirmed the appointment of a judicial administrator for Concepcion's estate and abrogated the summary distribution of her property to Ignacio Arroyo.

Ratio:

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