Case Summary (G.R. No. 102380)
Key Dates and Procedural Milestones
October 4, 1989: heirs filed Motion for Approval of Sale (conditional sale to Yu Hwa Ping for P12 million; P6 million paid as earnest money and distributed among heirs). October 30, 1989 and subsequent: petitioners sought time to solicit higher offers. February–April 1990: administrator filed criminal and civil actions contesting notarization and seeking nullity of the sale instruments. August 17, 1990: trial court initially denied approval of the heirs’ motion and granted leave to mortgage some estate properties. January–March 1991: further conferences and negotiations culminated in the March 29, 1991 order approving the conditional sale and directing the administrator to sell remaining portions to the same buyer. April 4, 1991: buyer deposited balance. Motions for reconsideration were denied (August 23, 1991; October 17, 1991). Petition for certiorari followed.
Factual Background of the Proposed Sale
Several heirs executed a Deed of Conditional Sale covering certain titled lots (TCT Nos. 155569, 120145, 9145, 18709) in Quezon City in favor of Yu Hwa Ping for P12 million; P6 million was paid as earnest money and already distributed among the heirs. The heirs represented that the remaining P6 million could satisfy outstanding estate obligations. The sale instrument was conditional on court approval. Petitioners (two heirs and the administrator) opposed approval, alleging unauthorized, low-priced disposals by some heirs, alleged falsification of the administrator’s signature on the deed, and asserted alternative proposals (court-authorized sale by administrator, mortgage, or division).
Contentions of the Administrator/Petitioners
The administrator (Herodotus) asserted: (1) some heirs sold estate realty without administrator knowledge or court approval and at a shockingly low price; (2) the deed bore a signature attributed to the administrator that prompted a criminal complaint for falsification and revocation of the notarial act; (3) the administrator sought court authorization to pursue sale or mortgage at the best obtainable price subject to court approval, and proposed dividing the estate among heirs if sale was premature given political and market conditions; and (4) repeated requests for time to find a better purchaser were made but ultimately unsuccessful.
Trial Court Proceedings and Orders
The trial court initially denied the heirs’ motion to approve the sale (Order of August 17, 1990) while granting leave to mortgage some properties. After further conferences and continued negotiation among parties, the trial court issued an order on March 29, 1991: (1) approving the conditional sale dated September 10, 1989 by the heirs to Yu Hwa Ping; (2) ordering the administrator to sell the remaining portions of the subject properties to the same buyer at the same price; (3) directing the buyer to deposit the remaining purchase balance within twenty days; and (4) denying a motion to cite the former administrator in contempt. The buyer deposited P6,500,000 on April 4, 1991. Petitioners filed motions for reconsideration which were denied; execution of the March 29, 1991 order was later requested by private respondents.
Controlling Legal Issue
Whether a probate (trial) court, acting in its capacity over an estate under administration, has jurisdiction to approve a Deed of Conditional Sale executed by heirs (prior to a final adjudication or partition) and to order the estate administrator to sell remaining portions of the property in favor of the same purchaser, despite the sale having been executed by heirs without prior court approval.
Court’s Holding
The Supreme Court answered the issue in the affirmative: the probate court acted within its jurisdiction in approving the conditional sale executed by the heirs and in ordering the administrator to sell the remaining portions of the properties. The certiorari petition challenging that exercise of probate jurisdiction was dismissed for lack of merit.
Reasoning — Probate Court Authority and Jurisdiction
The Court relied on precedent (notably Dillena v. Court of Appeals, 163 SCRA 30 (1988)) holding that a probate court has authority to approve the sale of properties of a decedent by prospective heirs before final adjudication; such matters fall within the probate court’s jurisdiction and need not be litigated in a separate action. Although the Rules of Court do not expressly enumerate every instance in which the court must approve sale of immovable estate property in a special proceeding, the power to authorize or approve such dispositions is necessarily included in the court’s probate jurisdiction and administration of estates.
Reasoning — Heirs’ Substantive Rights to Dispose of Ideal Shares
The Court emphasized that while judicial approval is required for the validity of dispositions affecting the decedent’s estate in administration (per Section 7, Rule 89), that requirement does not eliminate or adversely affect an heir’s substantive right to alienate his ideal share in commonly held inheritance property. The Civil Code principle invoked is that, upon acceptance of the inheritance, possession of hereditary property is transmitted to heirs (Article 533), creating an undivided owners
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Procedural Posture and Central Relief Sought
- Petitioners Herodotus P. Acebedo and Demosthenes P. Acebedo filed a Petition for Certiorari challenging the jurisdiction of the respondent lower court (acting as a probate court) in approving a Deed of Conditional Sale executed by respondents-heirs and in ordering petitioner-administrator Herodotus Acebedo to sell remaining portions of estate properties without the sale having had prior court approval.
- The challenged interlocutory and final administrative orders culminated in a March 29, 1991 Order of the respondent Court approving a conditional sale and ordering further actions; petitioners filed motions for reconsideration which were denied; petitioners then sought relief by certiorari before the Court that rendered the Decision.
- The petition sought review of the lower court’s authority to approve and enforce a conditional sale executed by heirs before final adjudication and without prior court authorization, and to compel the administrator to sell additional portions in the same transaction.
Parties and Roles
- Petitioners: Herodotus P. Acebedo (administrator of the estate) and Demosthenes P. Acebedo (heir).
- Respondents: Hon. Bernardo P. Abesamis (presiding judge in the respondent court), heirs Miguel Acebedo (former administrator), Alexander Acebedo, Napoleon Acebedo, Rizalino Acebedo, Republica Acebedo, Filipinas Acebedo, and purchaser Yu Hwa Ping.
- The late Felix Acebedo: decedent whose estate is subject of the administration.
- Notary public Eugenio Obon and purchaser Yu Hwa Ping figure in related criminal and notarial controversies mentioned in the proceedings.
Facts: Estate, Properties, and Estimated Value
- The decedent, Felix Acebedo, left an estate consisting of several real estate properties located in Quezon City and Caloocan City.
- The conservative estimated value of the estate was about P30 million.
- The estate included specific lots covered by Transfer Certificate of Title Nos. 155569, 120145, 9145, and 18709 (registered in Quezon City) which were the principal subject of the contested sale motions. (The dispositive portion of a later Order references TCT Nos. 155569, 120145, 1945 and 18709 as the properties covered by the conditional sale approval.)
Unsettled Claims and Liabilities Allegedly Remaining Against the Estate
- The estate allegedly had the following unsettled claims:
- Unpaid real estate taxes due Quezon City: P87,937.00.
- Unpaid real estate taxes due Caloocan City: P20,244.00.
- Unpaid salaries/allowances of former Administrator Miguel Acebedo and of incumbent Administrator Herodotus Acebedo.
- Inheritance taxes that may be due on the net estate.
- Respondents-heirs asserted that the remaining balance from the proposed sale was more than enough to pay these unsettled claims.
Motion for Approval of Sale by Respondents-Heirs (Key Pleadings and Terms)
- On October 4, 1989 respondents-heirs filed a "Motion for Approval of Sale" seeking court direction that the administrator sell the properties covered by the aforementioned TCT numbers in favor of buyer Yu Hwa Ping for a total consideration of P12,000,000.00.
- The Motion alleged that the heirs had already received their proportionate share of P6,000,000.00 paid by Yu Hwa Ping as earnest money, and that the remaining P6,000,000.00 balance would be sufficient to pay the estate’s unsettled claims, with residue to be distributed to heirs in final settlement.
- The prayer in the Motion asked the Court to direct the administrator to:
- sell the properties mentioned;
- use the balance of P6,000,000.00 to pay claims against the estate; and
- distribute remaining residue among heirs in final settlement of the estate.
Oppositions and Actions by the Administrator-Petitioner(s)
- Petitioner-administrator interposed an "Opposition to Approval of Sale" raising several grounds including:
- Allegation that some heirs had already sold estate property in Balintawak, Quezon City, without the administrator’s knowledge, without court approval, and at a shockingly low price;
- Vehement objection and warning of potential contempt liability for proponents of the sale;
- Request that the Court instead authorize the administrator to sell estate property (to generate funds to pay liabilities) and allow the heirs advances chargeable against their shares, and to permit the administrator and other heirs to search for a buyer (personally or through a broker) for the highest obtainable price, subject to court approval.
- Petitioners sought periods of time to seek a higher offer:
- On October 30, 1989 petitioners moved for a 45-day period to find a buyer at a higher price than P12,000,000.00.
- Hearing set for December 15, 1989; no higher offer found.
- On February 8, 1990 petitioners asked for an inextendible period of 30 days to look for a buyer.
- Petitioner-administrator filed a criminal complaint for falsification of a public document against buyer Yu Hwa Ping and notary Eugenio Obon on February 26, 1990, alleging a notarized Deed of Conditional Sale made petitioner's signature appear without proper authorization; the notary subsequently revoked his notarial act on the questioned document.
- On April 2, 1990 petitioner-administrator filed a civil action seeking declaration of nullity of the Deed of Conditional Sale and a Deed of Absolute Sale.
- On May 10, 1990 petitioner-administrator filed another "Opposition to Approval of Sale" stating the sale should wait for national recovery from effects of coup attempts or otherwise request division among heirs.
- On June 21, 1990 petitioners filed a "Motion for Leave of Court to Mortgage and Lease some of the Properties of the Estate."
Respondents’ Oppositions to Petitioner Motions and Related Assertions
- Respondents opposed the Motion for Leave to Mortgage/Lease on grounds including:
- Impropriety due to the pending motion to approve the sale of the same properties;
- Allegation that the conditional sale was initiated by petitioner-administrator who earlier signed a receipt for P500,000.00 as earnest money;
- Assertion that approval of the sale would shift realty tax payment obligations to purchaser Yu Hwa Ping;
- Claim that the estate had no further debts and that the in