G.R. No. L-22005 - Vda. de Arroyo vs. El Beaterio del Santissimo Rosario de Molo

Case Summary (G.R. No. L-22005)

Factual Background: The Partition, Donation, and Subsequent Litigation

The facts, as found by the Court of Appeals and substantially the same as those found by the trial court, began with an inter vivos partition. On July 2, 1924, Ignacio Arroyo executed a public instrument entitled “Convenio de Reparticion de Bienes y Adjudicacion de Herencia”, distributing his estate among three children: Jose Arroyo, Mariano Arroyo, and Sor Rosario (Arroyo) de la Visitacion. The instrument also reflected that the three children received in the same arrangement their inheritance from their deceased mother, Maria Pidal, the first wife of Ignacio Arroyo. The estate was apportioned in four parts: each of the children received specified properties, while the remaining properties were adjudicated to Ignacio Arroyo or reserved for himself as comprising his one-third portion of free disposal.

On March 8, 1927, Jose Arroyo died, leaving as heirs his widow, Jesusa Lacson Vda. de Arroyo, and their children.

On January 9, 1928, Ignacio Arroyo executed a public deed of donation, “Escritura de Donacion,” disposing of almost all of the properties previously adjudicated to him under the 1924 partition (Convenio de Reparticion) in favor of the Beaterio del Santissimo Rosario de Molo, a religious corporation. The donation, together with its conditions, was accepted by the donee on the same date and in the same instrument. Later, on August 11, 1931 and October 8, 1931, subsequent documents were executed to clarify the properties covered and to modify the conditions.

On October 22, 1931, Ignacio Arroyo executed his last will and testament. The 1924 Convenio de Reparticion was reproduced in the will as an integral part, with declarations confirming and reproducing it to ensure its validity would not be questioned. The 1928 donation, its acceptance, and the subsequent modifications were likewise related in the will.

Ignacio Arroyo died on January 8, 1935, and the will was probated by the Court of First Instance of Iloilo without opposition on February 25, 1935.

Earlier Proceedings (Civil Case No. 9137)

Before the present action, there was litigation regarding the properties implicated in the partition and the donation. On January 20, 1936, Ricardo Carreon, as administrator of the intestate estate of Concepcion Gerona, filed an amended complaint (Exh. G) against Lucio Lacson as executor of Ignacio Arroyo, Jose Arroyo, Jr. as administrator of the intestate estate of Jose Arroyo, the Beaterio del Santissimo Rosario de Molo, and the Municipality of Iloilo. The case was docketed as Civil Case No. 9137 of the Court of First Instance of Iloilo. The amended complaint sought, among others, recovery of one-half of the properties adjudicated to Jose Arroyo and Mariano Arroyo under the Convenio de Reparticion and one-half of the properties donated to the Beaterio under the Escritura de Donacion.

The trial court rendered judgment against the defendants but cleared the Beaterio and the municipality from liability and refrained from disturbing the status of the properties already donated to them. It reserved for plaintiffs the right to claim from the executor of Ignacio Arroyo one-half of the value of the donated properties. The Arroyos appealed to the Supreme Court, but the records were destroyed by war, prompting a new trial.

After the renewed trial, on November 3, 1949, the plaintiffs in Civil Case No. 9137 and Jesusa Lacson Vda. de Arroyo, as administratrix of the intestate estate of Jose Arroyo, entered into an agreement. Under that agreement, the former renounced and waived in favor of the latter all their rights and interests on any and all properties litigated in exchange for P65,000.00 and the assumption of the obligation to pay attorneys’ fees of P40,000.00 (Exh. M-1). Upon motion of both parties, the Court of First Instance dismissed the complaint in Civil Case No. 9137 on the same date (Exh. R).

Present Action: Petitioners’ Claim of Inofficiousness and Recovery

On March 13, 1958, Jesusa Lacson Vda. de Arroyo and her children, as heirs of Jose Arroyo, filed the complaint that gave rise to this appeal. They sought a judicial declaration that the donation made in 1928 by Ignacio Arroyo to the Beaterio del Santissimo Rosario de Molo was inofficious and sought recovery of the excess. The principal defendant was the Beaterio, while the estate of Sor Rosario (Arroyo) de la Visitacion and the heirs of Mariano Arroyo were impleaded because they were allegedly unwilling co-plaintiffs.

Defendants filed their answer on March 24, 1958, with a counterclaim. Petitioners answered the counterclaim on April 14, 1958. After due trial, the Court of First Instance rendered judgment on August 29, 1960, dismissing the complaint because petitioners failed to establish a fair and reasonable basis upon which the donation could be justly declared inofficious. The counterclaim was likewise dismissed.

Proceedings on Appeal and the Scope of Review

Petitioners elevated the case to the Court of Appeals by affirming the trial court’s ruling. The Court of Appeals found that the decision appealed from did not err in concluding that there was no fair and reasonable basis to declare the Beaterio donation inofficious. The Court of Appeals treated the lone assignment of error as one that argued for the sufficiency of petitioners’ evidence as a basis for declaring the donation inofficious.

On further review, the Supreme Court emphasized the established limitation on appellate correction of factual determinations made by the Court of Appeals. It noted that review by the Supreme Court on appeal by certiorari is confined to errors of law, while the Court of Appeals’ findings of fact are conclusive. It characterized petitioners’ challenge as, in substance, an attempt to reverse the factual assessment of the evidence—an inquiry that necessarily requires evaluating the probative value of the evidence and substituting the Supreme Court’s judgment for that of the Court of Appeals.

Petitioners’ Theory on Review: Alleged Error in Declaring the Donation Not Inofficious

Petitioners attempted to recast the issue as a legal error by asserting that the Court of Appeals “gravely erred” for not declaring the donation inofficious and not ordering the return of the excess. They also insisted that the only question presented was whether the conclusions of the Court of Appeals drawn from the undisputed facts were correct. The Supreme Court rejected this framing. It held that a ruling that the donation was inofficious, on the evidence of record, would require weighing the evidence and determining that petitioners’ proof had sufficient probative value to satisfy the standard rejected by the Court of Appeals. Thus, the asserted legal question was dependent upon factual evaluation.

The Court explained that the authorities invoked by petitioners did not support their effort to convert the evidentiary evaluation into a question of law. It drew a distinction between the competency of a witness and the credibility or probative value the court assigns to the testimony. It also observed that petitioners’ cited points addressed competence to testify on value, but did not require the acceptance of testimony once the Court of Appeals found it unpersuasive.

With respect to the Court of Appeals’ refusal to give weight to testimony by witness Doromal, the Supreme Court held that the Court of Appeals had not ruled that the witness was incompetent. It had instead declined to believe the testimony or to accord it sufficient probative value to support the claimed inofficiousness. The Court reiterated that if a witness were incompetent, the testimony would have been disregarded entirely. The record showed otherwise because the Court of Appeals had actually weighed the testimony and concluded that the evidence did not meet the threshold sought by petitioners.

Similarly, regarding the Court of Appeals’ view that a sale between brothers could not be a reliable index of fair market value, the Supreme Court found that petitioners’ argument still reduced to an attack on the Court of Appeals’ evaluation of the evidence, including the inferences drawn from the circumstances of conveyanc

Case Syllabus (G.R. No. L-22005)

The case involved an attempt by the heirs of Jose Arroyo to declare a donation made by Ignacio Arroyo inofficious and to recover the alleged excess.
The heirs sought declaration of inofficiousness of the donation and corresponding recovery of the excess, after lower courts found the evidence insufficient.
The appeal sought reversal of the Court of Appeals decision that affirmed the Court of First Instance of Iloilo, which dismissed the complaint.

Parties and Procedural Posture

Petitioners were Jesusa Lacson Vda. de Arroyo and other heirs of the late Ignacio Arroyo, who appealed by certiorari from the Court of Appeals.
Respondents were El Beaterio del Santissimo Rosario de Molo and other impleaded parties, including the estate of Sor Rosario (Arroyo) de la Visitacion and the heirs of Mariano Arroyo.
The Court of Appeals affirmed the Court of First Instance decision dismissing the complaint, holding that plaintiffs failed to establish a fair and reliable basis to declare the donation inofficious.
The Supreme Court treated the controversy as raising an essentially factual inquiry involving assessment of evidence, and accordingly limited review.

Key Factual Background

On July 2, 1924, Ignacio Arroyo partitioned his estate inter vivos among three children—Jose Arroyo, Mariano Arroyo, and Sor Rosario (Arroyo) de la Visitacion—by executing a public instrument titled “Convenio de Repartición de Bienes y Adjudicación de Herencia” (Exh. A).
The partition included distributions of inheritance from Maria Pidal, the first wife of Ignacio Arroyo, to the three children.
The estate of Ignacio Arroyo was apportioned into four parts, with specified properties allotted to each child and the remaining properties reserved or adjudicated to Ignacio Arroyo as comprising his one-third portion of free disposal.
On March 8, 1927, Jose Arroyo died, leaving Jesusa Lacson Vda. de Arroyo and their children as his only heirs.
On January 9, 1928, Ignacio Arroyo executed a public “Escritura de Donación” (Exh. B) donating almost all of the properties adjudicated to him in Exh. A to El Beaterio del Santissimo Rosario de Molo, a religious corporation.
The donation in Exh. B was accepted by the donee on the same date and in the same instrument.
Subsequent documents clarified the properties covered by the donation and modified conditions imposed by the donation, executed on August 11, 1931 and October 8, 1931 (Exhs. C, D and E).
On October 22, 1931, Ignacio Arroyo executed his last will (Exh. F), reproducing the Convenio as an integral part of the will and stating that it was confirmed and reproduced so that its validity would not be questioned.
The donation and its acceptance and modifications were also related in the will.
On January 8, 1935, Ignacio Arroyo died, and his will was probated without opposition on February 25, 1935.
On January 20, 1936, Ricardo Carreon, as administrator of the intestate estate of Concepcion Gerona, filed Civil Case No. 9137 against multiple defendants including Lucio Lacson as executor of Ignacio Arroyo, Jose Arroyo, Jr. as administrator of the intestate estate of Jose Arroyo, El Beaterio del Santissimo Rosario de Molo, and the Municipality of Iloilo.
In Civil Case No. 9137, the amended complaint sought recovery of, among others, one-half of the properties adjudicated to Jose Arroyo and Mariano Arroyo in Exh. A, and one-half of the properties donated to El Beaterio in Exh. B.
The trial court rendered judgment against the defendants but cleared the Beaterio and the Municipality of Iloilo of liability and did not disturb the status of the donated properties, reserving the right to claim from Ignacio Arroyo’s executor the one-half value of the donated properties.
An appeal to the Supreme Court was rendered impracticable due to wartime destruction of the records, leading to a new trial.
On November 3, 1949, plaintiffs in Civil Case No. 9137 and Jesusa Lacson Vda. de Arroyo as administratrix of the intestate estate of Jose Arroyo entered into an agreement where the former renounced and waived their rights and interests in the litigated properties in exchange for P65,000.00, and the latter assumed payment of attorney’s fees of P40,000.00 (Exh. M-1).
Upon motion of both parties, the Court of First Instance dismissed the complaint in Civil Case No. 9137 on the same date (Exh. R).
On March 13, 1958, Jesusa Lacson Vda. de Arroyo and her children filed the present complaint, seeking to declare the 1928 donation in favor of El Beaterio inofficious and to recover the alleged excess.
The principal defendant was El Beaterio, while the estate of Sor Rosario (Arroyo) de la Visitacion and the heirs of Mariano Arroyo were impleaded as defendants for alleged unwillingness to join as co-plaintiffs.
After trial, the Court of First Instance dismissed the complaint on August 29, 1960, and the counter