Title
Alferez vs. Spouses Canencia
Case
G.R. No. 244542
Decision Date
Jun 28, 2021
Federico Alferez's intestate estate led to disputes over property sales, with petitioners alleging bad faith. SC upheld the Deed of Sale's validity, clarifying jurisdiction vs. venue and enforcing contract terms.
dispute
properties
estate

Case Summary (G.R. No. 244542)

Factual Background

Ma. Concepcion Alferez and her siblings were heirs of their father, Federico J. Alferez, who died intestate on September 23, 1980. The estate comprised several titled parcels in Goma and other portions of Digos City. Because of outstanding bank debts, Ma. Concepcion was appointed administratrix by Letters of Administration issued January 16, 1981 in Special Proceedings No. 437 before the Court of First Instance, Branch 5, Davao del Sur. An Extrajudicial Settlement with Donation was executed on January 15, 1982, allocating specific titled parcels to the mother, Teodora, and to the three children respectively. To satisfy debts, Ma. Concepcion, purporting to act for the estate and under special powers of attorney from her siblings, sought and obtained court authority on August 29, 1985 to sell certain adjudicated parcels.

The Transaction and Subsequent Dispute

On October 8, 1985, Ma. Concepcion executed a Deed of Sale with Assumption of Mortgage with the respondents, conveying three titled parcels for an expressed consideration of P300,000. Petitioners later contended that the parties intended only to sell the one-half interest of the late Federico and that the sale had been improperly extended to the conjugal share of Teodora; petitioners asserted the Deed was a temporary security instrument and that respondents acted in bad faith. Respondents maintained that the parties agreed to purchase the parcels in full, that additional consideration was reflected in a contemporaneous Memorandum of Agreement, and that full payment was completed on July 27, 1990.

Procedural History

Petitioners filed an action for annulment of the Deed, recovery of possession, damages, and attorney’s fees. An initial filing in RTC Branch 20 was dismissed without prejudice for failure to state the value of the property; the complaint was timely refiled on August 26, 2007 in RTC Branch 19. The RTC rendered judgment on May 17, 2016 declaring the Deed valid. Petitioners appealed to the Court of Appeals. The CA, however, declared the RTC judgment void for lack of jurisdiction under Section 1, Rule 73, and dismissed the complaint without prejudice. Petitioners sought reconsideration before the CA, which was denied, and then filed the instant petition for review on certiorari to the Supreme Court.

The Parties' Contentions to the Supreme Court

Petitioners argued that the CA erred in resolving the appeal on jurisdictional grounds instead of addressing the merits, and that the Deed should be annulled for not reflecting the parties’ true intent to limit sale to Federico’s half. Respondents defended the CA’s jurisdictional ruling as proper, asserting that when the Deed was executed the entire estate—including conjugal shares—was still under administration and without an approved partition, thus under the probate court’s cognizance; respondents further asserted the Deed and the Memorandum of Agreement demonstrate a valid sale in full.

Ruling of the Regional Trial Court

The RTC found the Deed of Sale with Assumption of Mortgage to be valid and enforceable. The trial court concluded that the Extrajudicial Settlement with Donation had made the parcels the exclusive property of the children and that Ma. Concepcion, armed with special powers of attorney from her siblings, was authorized to sell the parcels. The RTC therefore denied petitioners’ claims and rendered judgment in favor of respondents on May 17, 2016.

Ruling of the Court of Appeals

The Court of Appeals vacated the RTC judgment as void for lack of jurisdiction. The CA relied on Section 1, Rule 73, Rules of Court, and reasoned that the court first taking cognizance of settlement of the estate—here, the Court of First Instance, Branch 5—exclusively acquired jurisdiction over the estate and hence over the subject properties. The CA concluded that RTC Branch 19 encroached upon the probate court’s jurisdiction and ordered dismissal without prejudice.

Issue Presented to the Supreme Court

The dispositive issue was whether the CA correctly declared the RTC judgment void for lack of jurisdiction under Section 1, Rule 73, or whether the CA misapprehended the nature of the contested rule such that the RTC had competency to decide the ownership dispute and the merits of the Deed.

Supreme Court's Disposition

The Supreme Court granted the petition in part. The Court reversed and set aside the CA Decision dated June 29, 2018 and the Resolution dated January 16, 2019. The May 17, 2016 Judgment of the RTC in Civil Case No. 4805 was reinstated. The Court held that the Deed of Sale with Assumption of Mortgage executed on October 8, 1985 is valid.

Legal Reasoning on Jurisdiction and Venue

The Court held that the CA erred in treating Section 1, Rule 73 as a jurisdictional bar in this setting. The Court explained that jurisdiction is the power to hear and decide a case and is conferred by law, whereas venue concerns the proper geographical forum. The jurisprudence cited in the decision—including Uriarte v. CFI of Negros Occidental, et al. and Malig, et al. v. Bush—was invoked to show that Section 1, Rule 73 regulates venue for probate actions, not the subject-matter jurisdiction of trial courts. The Court emphasized that the CFI (now RTC) is a court of limited jurisdiction in probate matters and cannot adjudicate adverse title claims of third parties except in limited circumstances; however, the present controversy was essentially one of ownership and title which properly fell within the competence of the RTC. The Court also noted that respondents did not timely object to venue and actively participated in the proceedings, which precluded a later challenge to venue. Consequently, the CA’s outright dismissal for want of jurisdiction was improper.

Legal Reasoning on the Validity of the Deed

On the merits, the Court applied the rule that written agreements reduced to writing are the best evidence of the parties’ intent and are binding between the parties. The Court observed that th

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