G.R. No. 32638 - Jose Jimenez dela Peña, et al. vs. Marina Yulo, et al.

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 32638             November 14, 1930

JOSE JIMENEZ DELA PEÑA and MARIA INES JIMENEZ DELA PEÑA,plaintiffs-appellees,
vs.
MARINA YULO, ET AL.,defendants-appellants.

Hilado and Hilado and Vicente Varela for appellants.
Montinola, Montinola and Hidalgo for appellees.

ROMUALDEZ,J.:

The plaintiffs claim an unpaid credit against the deceased spousesGregorio Yulo and Filomena Ortiz in the amount of P3,261.59, alleging that they have filed their claim with the committee of claims and appraisal appointed in the intestate proceedings of Gregorio Yulo, that it was admitted by said committee and approvedby the court; that although the intestate proceedings of Filomena Ortizwere instituted in 1913, the conjugal partnership between the twospouses has not yet been liquidated, and certain lots described in thecomplaint belong to said partnership; that after Filomena Ortiz'sdeath but during the lifetime of her husband, Gregorio Yulo, thoselots were registered one-half in undivided ownership in the name of thelatter, and the other half in the name of his six children, thedefendants herein; that the balance mentioned above remains unsatisfiedbecause as the intestate administrator of Gregorio Yulo alleges, he has not funds enough in his possession, and because the inventory valueof the lands still unsold is not sufficient to meet the mortgage andordinary obligations; that to be able to comply with the order of thecourt that the lots aforesaid be sold so as to satisfy the obligations of said estate, the administrator proposed that certainof the lots owned in common by the decedent Gregorio Yulo and by his sixchildren, be turned over wholly and exclusively to said deceased'sestate, and certain others to the children as heirs of their deceasedmother; that the court approved the proposal providing that theproperty adjudicated to the children should remain subject tothe payment of the obligations of said intestate estate; thatsubsequently, on petition of the administrator, that order was amendedto read that the property adjudicated to the children should be theirsfree of all liens and encumbrances; that all this was done withoutthe knowledge or consent of the creditors nor the plaintiffs; that up to that timethe plaintiffs had not filed their claim because foreclosureproceedings on the mortgage executed by the deceased spouses in favorof the plaintiffs' predecessor in interest, were pending; that when theaforesaid property was divided into two equal partspro indiviso, onein favor of Gregorio Yulo and the other in favor of his children andnot of their deceased mother's estate, the mortgage credit, of which thepresent claims is an unpaid balance, already existed, and the defendantswere aware that such adjudication was based upon the proposition thatthe property thus divided was conjugal property, and that they, thedefendants, were heirs of their deceased mother; that inasmuch asthe original partnership has not yet been dissolved, and the presentclaim is an obligation against it, all the estate of said spouses answersfor the claim, which is a lawful lien upon it that the approval of theaforementioned barter would defraud the creditors, especially theplaintiffs, who were not notified and did not consent to it; that theproperty adjudicated to the defendants in that barter was really a partof the conjugal property; that according to the administrator's report,the estate of Gregorio Yulo is insolvent, for which reason theplaintiffs will be unable to collect their credit unless it isenforced as a lawful lien on the said property adjudicated to thedefendants individually. And plaintiffs pray for judgment: (a) That theorder dated August 7, 1926, as well as that dated September 1, 1926,amending the former given in proceeding No. 1322 entitled Estate ofGregorio Yulo be annulled; (b) that the plaintiffs' claim of threethousand two hundred sixty-one pesos and fifty-nine centavos(P3,261.59), with legal interest from August 8, 1926, constitutes alawful lien on lots Nos. 361, 578, 924, 427, 852, 16, 86, 625,626, 8710, 233 of the cadastre of Iloilo, 1167, 1169, 1170, 3245, 3365of the cadastre of Jaro, 3759, 3494 of the cadastre of La Paz, the twoparcels of land situated in the municipality of Jaro Province ofIloilo, described above, the eight parcels of land situated in the municipality of Buenavista, Province of Iloilo,described above, and the eight parcels of land situated in the municipality of Jordan, Province of Iloilo, described above; (c) thatif the aforesaid order of August 7, 1926, and the one amending itcannot be annulled, that the aforesaid claim of the plaintiffs be deemeda lawful lien on lots Nos. 16, 86, 625, 626, 87, 233 of the cadastre ofIloilo, 3759, 3494 of the cadastre of La Paz, the six parcels of landsituated in the municipality of Buenavista, Province of Iloilo, andthe six parcels of land situated in the municipality of Jordan,Province of Iloilo, adjudicated in the municipality of Jordan,Province of Iloilo, adjudicated to the children of the Filomena Ortiz;and (d)the defendants be ordered to pay the plaintiffs jointly andseverally the amount of three thousand two hundred sixty-one pesos andfifty-nine centavos (P3,261.59) and the costs, and that the sale of theaforementioned lands be ordered to satisfy the claim of the plaintiffs,granting to the plaintiffs such other relief as may be just andequitable.

The defendant Francisco Ortiz answered the complaint with a generaldenial.

The defendant administrator of the intestate estate of Gregorio Yuloanswered that if the barter (permuta) referred to in the complaint wassolicited and approved by the court, it was only done to comply withthe urgent judicial orders, so as to be able to sell property of theinheritance and to pay its obligations, the barter aforesaid being it theadequate means to bring it about; that some of the property listed inthe complaint has already been sold by proper deeds of conveyance tothird persons with the approval of the court; that the acts of saidadministrator were all done in good faith and in pursuance of the justorders of the court. This defendant prays that the complaint bedismissed and that he absolved therefrom with costs against theplaintiffs.

The defendants Marina Yulo and Jorge B. Vargas demurred on the groundthat the complaint did not set forth facts sufficient to constitute acause of action, and that the court had no jurisdiction over the subject matter of the action. Afterthe plaintiff had replied to this demurrer, and after due hearing, thecourt overruled it with the exception of said defendants.

The defendants Gloria Yulo and Jose Varela also demurred to thecomplaint on the ground that the court had no jurisdiction over thelitigation; that the plaintiffs had no personality to bring the action;that there was another case pending between the same parties upon thesame cause of action; that there was a defect of parties defendantin that the administrator of the estate of Filomena Ortiz was notincluded, and that the facts alleged in the complaint did notconstitute a cause of action. The plaintiffs replied, and after duehearing, the court also overruled this demurrer, the defendantsexcepting.

Mariano Yulo and Jorge B. Vargas answered the complaint with a generaldenial and a special defense to the effect that the court had nojurisdiction; that the plaintiffs did not file their claim in theintestate proceeding instituted upon the death of Filomena Ortiz butelected to foreclose the mortgage, and therefore they are nowprecluded from enforcing said claim against the property of the heirsof said Filomena Ortiz; that said property is duly registered inaccordance with the Land Registration Law with a certificate of title andwithout any lien or encumbrance in favor of the plaintiffs; that boththe motion referred to in paragraph 9 of the complaint and the ordersgiven by the court with regard to said petition were known to theattorneys of the plaintiffs at the time they were filed in thecourse of the proceedings or immediately thereafter; thatnotwithstanding said knowledge, that plaintiffs did not object to saidmotion nor ask for the reconsideration of said orders during theperiod prescribed by the law and regulations, for which reason saidrulings became final and binding on the plaintiffs; that more than ayear from the filing of the complaint in the instant case, Yap Tico &Co., alleging a claim against the property of the heirs of FilomenaOrtiz, deceased, filed amotion to enforce their claim, and that as well as of the court'saction thereon, the plaintiffs were fully aware, and still they failed tomake any claim to said property, for which reason, in view of suchabandonment, they lost their right to present such a claim, if theyever had it; and that the ruling of the court on the partition of theproperty between the estate of Gregorio Yulo on the one hand, and theheirs of Filomena Ortiz on the other, has long since been final. Thesedefendants pray for the dismissal of the action with costs against theplaintiffs.

The defendants Gloria Yulo and Jose Varela answered the complaint witha general and several special defenses to the effect that the orderswhich the plaintiffs seek to annul were, in view of the facts andcircumstances of the case, justly rendered in said City of Iloilo wherethe attorneys of the plaintiffs reside, and no appeal having been takenfrom them, they became final and irrevocable; that in virtue thereof,third persons have acquired rights over a large part of the propertydealt with in said orders, and to annul the latter now would be totrample upon the rights of said third persons; that the plaintiffshave not complied with section 708 of the Code of Civil Procedure inthat, before filing their claim for P3,261.59 with the committee ofclaims and appraisal in the intestate proceedings of Gregorio Yulo,they did not obtain judgment for the unsecured portion of the creditafter the mortgage was foreclosed, for which reason said committee ofclaims had no jurisdiction to take cognizance of and approve saidclaim; that there is a defect of parties in that not all the thirdparties who acquired properly belonging to the estate of GregorioYulo in pursuance of the aforementioned orders of the court have beenincluded; that the credit claimed by the plaintiffs was one exclusivelyagainst Gregorio Yulo, and not against the conjugal partnership with hiswife;that in the course of the intestate proceedings of Gregorio Yulo there has been rendered an irrevocable ruling providing for the partition of the property of said deceased and his wife's children the defendants herein; that there is no judicial holding that said intestate estate is insolvent; that the property which the plaintiffs want brought to collation was adjudicated to the defendants under theTorrens system over four years ago, and the proper titles have beenissued; that, in like manner, lots Nos. 460, 883, and 4255 of thecadastre of Iloilo described in the complaint in civil case No. 5631have been registered; that far from objecting to such a determination ofthe share of Gregorio Yulo and that of his children in said property,the plaintiff's predecessors in interest acquiesced in it causing it toappear in the adjudication of said lots that there was a mortgageexecuted in their favor by the spouses Gregorio Yulo and Filomena Ortiz,which acquiescence was confirmed in the action brought in civil caseNo. 5631; that if the plaintiff's claim is debt chargeable to theconjugal partnership, the same has already prescribed for the reasonthat the plaintiffs have not asked for the liquidation of said conjugalpartnership dissolved on January 13, 1911, when Filomena Ortiz died. These defendants pray for the dismissal of the complaint with costsagainst the plaintiffs.

After hearing the case, the Court of First Instance of Iloilo renderedjudgment, the dispositive part of which is follows:

For all the foregoing considerations, judgment is hereby entered:

The defendants appealed from this judgment making several assignmentsof error.

The annulment made by the court below of the orders of August 7, 1926(Exhibit N), and September 1, 1926 (Exhibit O), issued in theintestate proceedings of Gregorio Yulo, at the instance of the judicialadministrator, is based on the contention that when the latter motionExhibit N, which gave rise to such judicial orders, he was aware thatthere had been a decision rendered in favor of the predecessors ininterest of the plaintiffs herein against the defendants in civil caseNo. 5631 (Exhibit D), and also that the selling price at the publicauction of the mortgaged property in said civil case No. 5631 was not enoughto satisfy that judgment, and lastly that the defendants had not yetpaid the mortgage balance in that case.

It is contended that the administrator being aware of said facts, he wasbound to give notice of his petition, Exhibit M, to the creditorAntonia Peña y Martinez, which he failed to do.

The court does not find that this reason is sufficient justification forannulling the previous orders. Since said creditor, Antonia Peña yMartinez, or her assigns, did not appear in the intestate proceedings ofGregorio Yulo where said motion was filed until then, the administratorwas notin duty bound to notify this creditor of the petition; and, in theabsence of fraud, which has neither been alleged nor proved, the lack ofthis notification does not vitiate that motion or the consequent ordersof the court.

This creditor could have put in a timely appearance to object to thispetition of the administrator's and thereby prevent the orders nowcomplained of. And unless it be shown that such an appearance was madeimpossible by the administrator or some other interested party, thesaid orders must stand like any other judicial order legally issued.

Moreover, the orders referred to, Exhibits N and O, dated August 7,1926, and September 1, 1926, were already final and irrevocable whenthe instant action was filed, having been neither excepted to norappealed from in due time.

From this it follows that, as these orders are valid, they subsist fully,and legal condition of the lands concerned as mentioned therein cannotnow be altered. Consequently, the lots, which, by virtue of the barterapproved in these order, passed to the ownership of the defendantsherein cannot now be deemed subject to a lien for the amount ofP3,261.59 owed to the plaintiffs.

Although this property was originally conjugal property of GregorioYulo and Filomena Ortiz, nevertheless, it was not included in themortgage executed in favor of the plaintiffs' predecessors in interestand even before the orders, Exhibits N and O, were issued that propertyand the other involved in the barter had been recorded under the LandRegistration Law as property of the defendants free from anyencumbrance in favor of the plaintiffs or their predecessors ininterest.

Having reached these conclusions, it is unnecessary to decide theother points of defense and error raised by the defendants, for whathas so far been held is sufficient definitely determine the rights of theparties.

Wherefore, the order appealed from is revoked, and the defendants areabsolved from the complaint without, prejudice to such rights as theplaintiffs may have against them by virtue of the personal obligationarising from the judgments obtained against them on September 9, 1925,and November 20, 1926, in civil case No. 5631. Without costs, soordered.

Avanceña, C.J., Street, Malcolm, Villamor, Ostrand, Johns, and Villa-Real,JJ., concur.