Case Summary (G.R. No. L-2598)
Petitioner
Thelma M. Aranas, child of Emigdio from his first marriage, objected to the inventory prepared by Teresita.
Respondents
Teresita V. Mercado (administratrix), her five children by Emigdio, and Franklin L. Mercado (Emigdio’s son from his first marriage).
Key Dates
• January 12, 1991 – Emigdio’s death
• June 3, 1991 – Petition for appointment of administratrix filed
• September 7, 1992 – Letters of administration issued
• December 14, 1992 – Initial inventory submitted
• January 8 to April 19, 1993 – Inventory amendment motions and hearings
• March 14, 2001 – RTC orders inclusion of properties in revised inventory
• May 18, 2001 – RTC denies reconsideration
• May 15, 2002 – CA partially grants certiorari
• January 15, 2014 – SC decision
Applicable Law
• 1987 Philippine Constitution (post-1990 decision)
• 1987 Rules of Court, Rules 78, 83, 90, 109; Rule 41 on finality of interlocutory orders
• Civil Code provisions on conveyance (Arts. 1477, 1498) and legitime (Art. 1061)
• National Internal Revenue Code, Sec. 78 (transfers in contemplation of death)
Antecedents
Emigdio’s estate comprised real properties, corporate shares in Mervir Realty and Cebu Emerson, and personal assets. Teresita’s inventory claimed only personal and corporate shares but omitted land previously sold or assigned to Mervir Realty and assets inherited by Emigdio from his mother. Thelma moved for amendment and examination of Teresita under oath. After eight years of hearings, the RTC provisionally ruled that excluded properties—shares in maternal inheritance, conjugal assets (stocks, bank account), Lot No. 3353 (title still in Emigdio’s name), and lands assigned two days before death—should be included in the inventory.
Procedural Issue
The CA held the RTC orders interlocutory and subject to certiorari under Rule 65 (grave abuse of discretion), partly reversing inclusion of lands sold or assigned to Mervir Realty but affirming the remainder. The Supreme Court confirmed certiorari as proper since approval of the inventory is provisional, and interlocutory orders are non-appealable unless final or specifically appealable under Rule 109.
Merits of Inclusion
- Inventory Scope and Duty: Under Rules 78 and 83, an administrator must submit a “true inventory” of all estate properties “in possession or knowledge.” The word “all” admits no unwarranted exclusion; provisional inclusion safeguards heirs’ legitime and ensures full accounting.
- Probate Court Jurisdiction: It holds limited but sufficient jurisdiction to determine provisional inclusion or exclusion of properties, subject to later separate actions on ownership. Inclusion orders are discretionary but reviewable only for grave abuse.
- Reasons for Inclusion:
a. Shares inherited from the decedent’s mother were admitted by the administratrix.
b. Corporate stocks and bank account opened during marriage formed conjugal partnership; one-half pertains to Emigdio’s estate absent clear proof of exclusive ownership.
c. Lot No. 3353 remained registered in Emigdio’s name; a related case affirmed the estate’s claim, and Mervir Realty never intervened.
d. Lands assigned two days before death constitute transfers in contemplation of death (NIRC Sec. 78) and must be included at death’s valuation.
e. Notarization of deeds or Torrens registration does not preclude contest in probate; the presumpt
Case Syllabus (G.R. No. L-2598)
Antecedents
- Emigdio S. Mercado died intestate on January 12, 1991, survived by his second wife Teresita and seven children (five by second marriage, two by first marriage including Thelma M. Aranas).
- He had acquired real properties and corporate shares in Mervir Realty Corporation and Cebu Emerson Transportation Corporation; exchanged real properties for Mervir Realty shares and sold Lot 3353 in Badian, Cebu to Mervir Realty.
- On June 3, 1991, Thelma filed in the RTC a petition for appointment of Teresita as administrator of Emigdio’s estate; letters of administration issued September 7, 1992.
- Teresita submitted an inventory (December 14, 1992) listing only personal properties worth ₱6,675,435.25, excluding alleged real properties.
Trial Court Proceedings
- Thelma moved to compel amendment of the inventory and to examine Teresita under oath; the RTC granted the motion on January 8, 1993.
- Teresita complied (January 21, 1993), submitting certificates of stock and deeds of assignment covering Mervir Realty and Cebu Emerson shares, and a deed of assignment for land parcels.
- Thelma renewed motions to examine and oppose the inventory; RTC ordered presentation of evidence and Teresita’s examination (February 4, 1993).
- With parties’ consent to jurisdiction on inclusion/exclusion issues, RTC set hearings from 1993 to 2001.
- On March 14, 2001, after prolonged hearings, RTC denied approval of the inventory and ordered the administratrix:
- To re-do the inventory including omitted properties (shares in mother’s estate, conjugal stocks, bank account, Lot 3353, land assignments in contemplation of death) within 60 days;
- To render an account of her administration within 60 days.
- Motion for reconsideration denied May 18, 2001, on grounds that heirs had submitted to jurisdiction and no cogent reason for reversal.
Court of Appeals Decision
- Petitioners (Teresa, her children, Franklin) filed for certiorari to annul the RTC orders dated March 14 and May 18, 2001, alleging grave abuse in including sold or assigned properties.
- CA held the RTC orders interlocutory; certiorari proper remedy.
- CA partially granted relief: reversed inclusion of Lot 3353 (subject of