Case Summary (G.R. No. 154739)
Key Dates
- Death of Remedios R. Sandejas: April 17, 1955.
- Contract (Receipt of Earnest Money with Promise to Sell and to Buy): June 7, 1982.
- Letters of Administration initially issued to Eliodoro P. Sandejas, Sr.: July 1, 1981.
- Intervention and subsequent appointment and substitution of administrators, reconstitution of lost records, filing of motions for approval of sale, RTC order (January 13, 1995) approving the Receipt, and appellate proceedings culminating in modification by the Court of Appeals and later Supreme Court resolution.
Applicable Law (basis)
- 1987 Philippine Constitution (applicable because the decision under review is post-1990).
- Rules of Court, particularly Rule 89 (Sections 1, 2, 4 and 8) and related probate provisions (Rules 74; 86–91).
- Civil Code principles on contracts and conditions (Article 1458 cited).
- Family Code provisions on conjugal and hereditary shares (Article 129(7) cited).
- Precedent and treatises referenced in the decision (e.g., Acebedo v. Abesamis; Cheng v. Genato; Gil v. Cancio).
Factual Summary
- The seller (Eliodoro Sr.), in his individual capacity and expressly binding “his heirs, administrators and assigns,” executed the Receipt with Lina, acknowledging earnest money and stating a P1,000,000 purchase price with terms and a suspensive condition: court approval authorizing the administrator to sell the parcels then under administration in the intestate proceedings of Remedios.
- The instrument included a clause that, in the event the sale failed to proceed, the seller would return earnest money with 14% interest and that the terms would be binding on heirs and administrators.
- Procedural complications followed (including loss and reconstitution of records, death of the initially appointed administrator, substitution of administrators, consolidation of proceedings) and ultimately a motion by Lina for court approval of the conditional sale.
Trial Court Ruling
- The RTC (intestate/settlement court) granted Lina’s motion for approval of the Receipt and ordered Lina to pay the balance of the purchase price and ordered the administrator to execute the necessary deeds of conveyance (order dated January 13, 1995).
Court of Appeals Ruling
- The Court of Appeals held the instrument to be a contract to sell (not a perfected sale) and treated the court approval requirement as a positive suspensive condition. The CA concluded that, because other heirs had not consented and received no written notice, the sale could only bind the share of the seller-heir (Eliodoro Sr.). The CA therefore modified the RTC order to approve conveyance only as to the three-fifths (3/5) share it attributed to Eliodoro Sr., and directed payment and conveyance as to that share.
Issues on Review
- Whether the seller (Eliodoro Sr.) was legally obligated to convey title despite a suspensive condition (court approval) that had not been fulfilled at the time of contracting.
- Whether the seller acted in bad faith.
- Proper computation of the seller-heir’s undivided share (whether 3/5 or 11/20).
- Whether the probate/settlement court had jurisdiction to approve the sale and compel execution of deeds, and whether an intervenor like Lina had standing to seek such approval under Rule 89, Sec. 8.
Supreme Court’s Characterization of the Agreement
- The Supreme Court concluded that the instrument was a conditional sale (a sale subject to a suspensive condition) rather than a mere contract to sell. Key reasoning: the instrument contained an express obligation to deed the properties upon fulfillment of the condition (court approval), and there was no reservation of ownership clause suggesting retention of title pending full payment. Thus, once the probate court granted approval, the conditional sale became perfected and reciprocally demandable.
Effect of Probate Court Approval and the Nature of the Suspensive Condition
- The court treated the judicial approval requirement as a genuine suspensive condition whose fulfillment (granting of authority by the settlement court) effects the perfection of the conditional sale. Approval by the intestate court therefore converted the conditional sale into an enforceable obligation to convey.
- The Supreme Court emphasized that a stipulation requiring judicial approval does not impair an heir-seller’s right to dispose of his pro indiviso share; it limits removal of property from custodia legis but does not invalidate a sale binding on the selling heir once approval is obtained.
Jurisdiction of the Probate/Settlement Court
- The Court reaffirmed the broad probate jurisdiction: settlement courts have authority over matters incidental to estate settlement, including selling, mortgaging, or encumbering realty under administration. Rule 89 permits the court to authorize conveyances contemplated by contracts entered into by the decedent or by contracts affecting property under administration.
- The Court rejected petitioners’ contention that a separate civil action was required to enforce the sale, noting that requiring a separate suit would needlessly prolong estate settlement. Approval of the conditional sale as part of the settlement proceedings was consistent with the Rules’ purpose to expedite administration and allow heirs to enjoy benefits of settlement.
Standing to Seek Approval under Rule 89, Section 8
- Section 8 of Rule 89 differs from Sections 2 and 4 in that it does not expressly limit the application for approval to the executor or administrator. The Supreme Court interpreted Section 8 to allow an application by any person who stands to be benefited or injured by the judgment or who is entitled to the avails of the suit. Consequently, Lina, as purchaser and one directly affected, had standing to seek the court’s authorization to convey pursuant to the preexisting contract.
Bad Faith Allegation
- The petitioners argued that Eliodoro Sr. acted in bad faith by purporting to bind heirs without their consent. The Supreme Court found no evidence of bad faith: Eliodoro Sr. had informed Lina of the need for court approval and did not misrepresent ownership in fee simple. The Court held that the CA’s imputation of bad faith was unnecessary because judicial approval and binding effect as to the seller-heir’s own shares followed from the conditional sale and subsequent court action.
Computation of Seller‑Heir’s Share (3/5 vs. 11/20)
- The Court corrected the CA’s arithmetic. The proper method: first assign the conjugal share (one-half) to the surviving spouse; the remaining half (the decedent’s estate for distribution) is then divided among heirs. Eliodoro Sr., as surviving spouse, had a conjugal half and also a hereditary share as one of the ten legal heirs of the decedent. The hereditary share is
Case Syllabus (G.R. No. 154739)
Procedural Posture
- Petition for Review under Rule 45 of the Rules of Court seeking to reverse and set aside:
- Decision dated April 16, 1999, and
- Resolution dated January 12, 2000, both promulgated by the Court of Appeals in CA-GR CV No. 49491.
- The Court of Appeals had modified the lower court order approving a "Receipt of Earnest Money With Promise to Buy and Sell dated June 7, 1982," limiting its effect to the three-fifth (3/5) portion of the disputed lots covering the share of Administrator Eliodoro Sandejas, Sr., and directing payment and conveyance within specified times.
- The assailed Resolution denied reconsideration of the CA disposition.
- The petition was submitted with memoranda: Petitioners’ Memorandum signed October 12, 2000; Respondent’s Memorandum submitted October 5, 2000.
Case Facts (as narrated by the Court of Appeals)
- On February 17, 1981, Eliodoro Sandejas, Sr. filed a petition for letters of administration for the estate of his wife, Remedios R. Sandejas, who died April 17, 1955.
- Letters of Administration were issued July 1, 1981, and Eliodoro Sandejas, Sr. took his oath as administrator the same date.
- On November 19, 1981, the 4th floor of Manila City Hall burned, destroying Branch XI records; a Motion for Reconstitution of records was filed February 9, 1983 and granted February 16, 1983.
- On June 7, 1982, a "Receipt of Earnest Money with Promise to Sell and to Buy" was executed between Alex A. Lina (buyer) and Eliodoro P. Sandejas, Sr. (seller/administrator), covering four contiguous parcels in Makati registered in the name of seller, with total purchase price P1,000,000.00 and earnest money payments aggregating P170,000.00.
- The Receipt expressly acknowledged the existence of pending intestate proceedings (Spec. Proc. No. 138393 / Spec. Proc. No. R-83-15601) and stated that the seller, in his capacity as administrator, had filed a Motion with the Court for authority to sell, with an agreed period to execute deed after receipt of the court order authorizing sale.
- Specific recital in the Receipt bound the seller "himself, his heirs, administrators and assigns" to sell "forever and absolutely in their entirety (all of the four (4) parcels of land above described, which are contiguous to each other as to form one big lot) to said Mr. Alex A. Lina" for P1,000,000.00 under agreed terms.
- The Receipt included provisions on: aggregation of earnest money (P100,000.00 additional to earlier P70,000.00), separate consideration of P1,000.00, a 90-day (extendible) period from receipt of court authorization to execute deed, and a clause (Paragraph 4) requiring return of earnest money with 14% interest if sale did not proceed for causes attributable to seller, with such sum to be considered a lien on the property or at least on the seller’s share.
- On April 19, 1983, Alex A. Lina filed Omnibus Pleading including motion to intervene in the settlement case; intervention was granted July 17, 1984.
- Eliodoro P. Sandejas, Sr. died sometime in November 1984; subsequent court orders addressed appointment of new administrator; Alex Lina filed petition for letters of administration consolidated with the original special proceedings.
- Alex A. Lina was appointed administrator on May 15, 1986, but later substituted by Sixto Sandejas; Sixto qualified and took oath January 16, 1989 and Letters of Administration were issued.
- On November 29, 1993, Alex A. Lina filed an Omnibus Motion to approve the June 7, 1982 deed/receipt and to compel heirs through their administrator to execute deed of absolute sale pursuant thereto; administrator opposed and/or moved to dismiss.
- On January 13, 1995, the lower court (intestate court) granted intervenor’s motion approving the Receipt of Earnest Money with Promise to Sell and To Buy dated June 7, 1982 and directed intervenor to pay balance (P729,000.00) within 30 days and the Administrator to execute deeds within 30 days thereafter.
Lower Court Order (RTC)
- The intestate court ordered approval of the June 7, 1982 Receipt and mandated:
- Intervenor to pay the balance of purchase price amounting to P729,000.00 within thirty (30) days from receipt of the Order; and
- Administrator to execute necessary and proper deeds of conveyancing within thirty (30) days thereafter.
Court of Appeals Ruling (as summarized)
- The Court of Appeals overturned the trial court’s ruling in part and modified it to apply only to the three-fifth (3/5) portion of the disputed lots covering the share of Administrator Eliodoro Sandejas, Sr.
- CA reasoning:
- The contract between Eliodoro Sandejas Sr. and respondent was “merely a contract to sell,” not a perfected contract of sale; ownership remained in the intestate estate until court approval was obtained.
- Court approval constituted a positive suspensive condition; nonfulfillment prevented the obligation from maturing and was not tantamount to breach.
- Section 1, Rule 89 was held inapplicable because lack of written notice to other heirs showed lack of consent of heirs other than Eliodoro Sr.
- Bad faith was imputed to Eliodoro Sr. for binding his heirs without their consent, invoking the principle that “no one is allowed to enjoy a claim arising from one’s own wrongdoing.”
- CA thus bound Eliodoro Sr. to the sale as owner and heir, but excluded the shares of nonconsenting heirs from the forced conveyance.
- CA directed payment and conveyance limited to Eliodoro Sr.’s 3/5 share: intervenor to pay balance for three-fifth (3/5) portion within thirty (30) days and administrator to execute deeds for that share.
Issues Presented by Petitioners
- Whether Eliodoro P. Sandejas Sr. is legally obligated to convey title where the suspensive condition (court approval) was not complied with.
- Whether Eliodoro P. Sandejas Sr. was guilty of bad faith despite CA placing burden on respondent to prove that a motion for authority to sell had been filed.
- Whether the undivided shares of Eliodoro P. Sandejas Sr. in the subject property is three-fifth (3/5) and whether the administrator should execute deeds of conveyance for that share within thirty days from receipt of the balance.
- Whether respondent's petition-in-intervention was converted to a money claim and whether the probate court could approve the sale and compel petitioners to execute deed even for the share alone of Eliodoro Sr.
Supreme Court Holding (dispositive)
- Petition is partially meritorious.
- The appealed Decision and Resolution are affirmed with modification: respondent is entitled to only a pro-indiviso share equivalent to 11/20 of the disputed lots (not 3/5), and the remainder of the CA remedy as modified remained in effect.
- Final disposition: Petition PARTIALLY GRANTED; CA Decisi