THIRD DIVISION

[G.R. No. 139587. November 22, 2000]

IN THE MATTER OF THE INTESTATE ESTATE OF DECEASED ISMAEL

REYES, THE HEIRS OF OSCAR R. REYES, petitioners,
vs. CESAR R. REYES, respondent.
DECISION
GONZAGA-REYES, J.:

In this petition for review on certiorari, petitioners seek to annul the decision of the
respondent Court of Appeals in CA-G.R. CV No. 46761 which affirmed the
Order dated January 26, 1994 of the Regional Trial Court, Branch 96, Quezon City, in
Special Proceeding No. 89-2519, a petition for issuance of letters of administration, and
the resolution dated July 28, 1999 denying their motion for reconsideration.
[1]

[2]

[3]

Spouses Ismael Reyes and Felisa Revita Reyes are the registered owners of
parcels of land situated in Arayat Street, Cubao, Quezon City covered by Transfer
Certificates of Title Nos. 4983 and 3598 (39303). The spouses have seven children,
namely: Oscar, Araceli, Herminia, Aurora, Emmanuel, Cesar and Rodrigo, all surnamed
Reyes.
On April 18, 1973, Ismael Reyes died intestate. Prior to his death, Ismael Reyes
was notified by the Bureau of Internal Revenue (BIR) of his income tax deficiency which
arose out of his sale of a parcel land located in Tandang Sora, Quezon City. For failure
to settle his tax liability, the amount increased to about P172,724.40 and since no
payment was made by the heirs of deceased Ismael Reyes, the property covered by
TCT No. 4983 was levied sold and eventually forfeited by the Bureau of Internal
Revenue in favor of the government.
[4]

[5]

Sometime in 1976, petitioners predecessor Oscar Reyes availed of the BIRs tax
amnesty and he was able to redeem the property covered by TCT No. 4983 upon
payment of the reduced tax liability in the amount of about P18,000.
[6]

[7]

On May 18, 1982, the Office of the City Treasurer of Quezon City sent a notice to
Felisa Revita Reyes informing her that the Arayat properties will be sold at public
auction on August 25, 1982 for her failure to settle the real estate tax delinquency from
1974-1981.
[8]

On December 15, 1986, petitioners predecessor Oscar Reyes entered into an

amnesty compromise agreement with the City Treasurer and settled the accounts of
Felisa R. Reyes.
[9]

On May 10, 1989, private respondent Cesar Reyes, brother of Oscar Reyes, filed a
petition for issuance of letters of administration with the Regional Trial Court of Quezon
City praying for his appointment as administrator of the estate of the deceased Ismael
Reyes which estate included 50% of the Arayat properties covered by TCT Nos. 4983
and 3598. Oscar Reyes filed his conditional opposition thereto on the ground that the
Arayat properties do not form part of the estate of the deceased as he (Oscar) had
acquired the properties by redemption and or purchase.
[10]

[11]

The probate court subsequently issued letters of administration in favor of Cesar

Reyes where the latter was ordered to submit a true and complete inventory of
properties pertaining to the estate of the deceased and the special powers of attorney
executed by the other heirs who reside in the USA and that of Aurora Reyes-Dayot
conforming to his appointment as administrator. Cesar Reyes filed an inventory of real
and personal properties of the deceased which included the Arayat properties with a
total area of 1,009 sq. meters. On the other hand, Oscar Reyes filed his objection to
the inventory reiterating that the Arayat properties had been forfeited in favor of the
government and he was the one who subsequently redeemed the same from the BIR
using his own funds.
[12]

[13]

[14]

A hearing on the inventory was scheduled where administrator Cesar Reyes was
required to present evidence to establish that the properties belong to the estate of
Ismael Reyes and the oppositor to adduce evidence in support of his objection to the
inclusion of certain properties in the inventory. After hearing the parties respective
arguments, the probate court issued its Order dated January 26, 1994, the dispositive
portion of which reads:
[15]

[16]

WHEREFORE, pursuant to the foregoing findings, the Court hereby modifies

the inventory submitted by the administrator and declares to belong to the
estate of the late Ismael Reyes the following properties, to wit:
1. One half (1/2) of the agricultural land located in Montalban, Rizal containing an area
of 31,054 square meters, covered by TCT 72730 with an approximate value of
P405,270.00;
2. One half (1/2) of two (2) adjoining residential lots located on Arayat Street, Cubao,
Quezon City, with total area of 1,009 square meters, more or less, covered by TCTs
No. 4983 AND 3598 (39303), with an approximate value of P3,027,000.00; but this
determination is provisional in character and shall be without prejudice to the
outcome of any action to be brought hereafter in the proper Court on the issue of
ownership of the properties; and,
3. The building constructed by and leased to Sonny Bernardo and all its rental income
from the inception of the lease, whether such income be in the possession of
oppositor, in which case he is hereby directed to account therefor, or if such income
be still unpaid by Bernardo, in which case the administrator should move to collect
the same.

Consistent with the foregoing things, either of the administrator oppositor, or

heir Felisa R. Reyes, in her personal capacity as apparent co-owner of the

Arayat Street properties, may commence the necessary proper action for
settling the issue of ownership of such properties in the Regional Trial Court in
Quezon City and to inform the Court of the commencement thereof by any of
them as soon as possible.
The administrator is hereby directed to verify and check carefully on whether
other properties, particularly the real properties allegedly situated in
Montalban, Rizal; in Marikina, Metro Manila (near Boys Town); and in Bulacan,
otherwise referred to as the Hi-Cement property truly pertained to the estate;
to determine their present condition and the status of their ownership; and to
render a report thereon in writing within thirty (30) days from receipt of this
Order.
The motion demanding for accounting to be done by oppositor Oscar Reyes is
hereby denied for being unwarranted, except whatever incomes he might
have received from Sonny Bernardo, which he is hereby directed to turn over
to the administrator within thirty (30) days from finality of this Order.
A motion for reconsideration was filed by Oscar Reyes which was denied in an
Order dated May 30, 1994. He then filed his appeal with the respondent Court of
Appeals. While the appeal was pending, Oscar died and he was substituted by his
heirs, herein petitioners.
[17]

On May 6, 1999, the respondent Court issued its assailed decision which affirmed
the probate courts order. It ruled that the probate courts order categorically stated that
the inclusion of the subject properties in the inventory of the estate of the deceased
Ismael Reyes is provisional in character and shall be without prejudice to the outcome
of any action to be brought hereafter in the proper court on the issue of ownership of the
properties; that the provisional character of the inclusion of the contested properties in
the inventory as stressed in the order is within the jurisdiction of intestate court.It further
stated that although the general rule that question of title to property cannot be passed
upon in the probate court admits of exceptions, i.e. if the claimant and all other parties
having legal interest in the property consent, expressly or impliedly, to the submission of
the question to the probate court for adjudication, such has no application in the instant
case since petitioner-appellee and oppositor-appellant are not the only parties with legal
interest in the subject property as they are not the only heirs of the decedent; that it was
never shown that all parties interested in the subject property or all the heirs of the
decedent consented to the submission of the question of ownership to the intestate
court.
Petitioners filed their motion for reconsideration which was denied in a resolution
dated July 28, 1999. Hence this petition for review on certiorari alleging that the
respondent Court erred (1) in ruling that the court a quo correctly included one half (1/2)
of the Arayat properties covered by TCT Nos. 4983 and 3598 (39303) in the inventory of

the estate of the deceased Ismael Reyes (2) in upholding that the court a quo has no
jurisdiction to determine the issue of ownership.
Petitioners argue that a probate courts jurisdiction is not limited to the determination
of who the heirs are and what shares are due them as regards the estate of a deceased
person since the probate court has the power and competence to determine whether a
property should be excluded from the inventory of the estate or not, thus the Court a
quo committed a reversible error when it included the Arayat properties in the inventory
of the estate of Ismael Reyes despite the overwhelming evidence presented by
petitioner-oppositor Oscar Reyes proving his claim of ownership. Petitioners contend
that their claim of ownership over the Arayat properties as testified to by their
predecessor Oscar Reyes was based on two (2) grounds, to wit (1) his redemption of
the Arayat properties and (2) the abandonment of the properties by his co-heirs; that his
act of redeeming the properties from the BIR in 1976 and thereafter from the City
Treasurer of Quezon City using his own funds have the effect of vesting ownership to
him. Petitioners claim that private respondent is already barred from claiming the Arayat
properties since he only filed this petition 16 years after the death of Ismael Reyes and
after the prices of the real properties in Cubao have already escalated tremendously.
We find no merit in this argument.
The jurisdiction of the probate court merely relates to matters having to do with the
settlement of the estate and the probate of wills of deceased persons, and the
appointment and removal of administrators, executors, guardians and trustees. The
question of ownership is as a rule, an extraneous matter which the Probate Court
cannot resolve with finality. Thus, for the purpose of determining whether a certain
property should or should not be included in the inventory of estate proceeding, the
probate court may pass upon the title thereto, but such determination is provisional, not
conclusive, and is subject to the final decision in a separate action to resolve title.
[18]

[19]

[20]

We find that the respondent Court did not err in affirming the provisional inclusion of
the subject properties to the estate of the deceased Ismael Reyes without prejudice to
the outcome of any action to be brought thereafter in the proper court on the issue of
ownership considering that the subject properties are still titled under the torrens system
in the names of spouses Ismael and Felisa Revita Reyes which under the law is
endowed with incontestability until after it has been set aside in the manner indicated in
the law. The declaration of the provisional character of the inclusion of the subject
properties in the inventory as stressed in the order is within the jurisdiction of the
Probate Court.
[21]

Petitioners next claim that as an exception to the rule that the probate court is of
limited jurisdiction, the court has jurisdiction to resolve the issue of ownership when the
parties interested are all heirs of the deceased and they submitted the question of title
to the property, without prejudice to third persons. Petitioners allege that the parties
before the probate court were all the heirs of deceased Ismael Reyes and they were
allowed to present evidence proving ownership over the subject properties, thus private
respondent cannot argue that he did not in any way consent to the submission of the
issue of ownership to the probate court as the records of this case is replete with

evidence that he presented evidence in an attempt to prove ownership of the subject

properties.
We are not persuaded.
Settled is the rule that the Regional Trial Court acting as a probate court exercises
but limited jurisdiction, thus it has no power to take cognizance of and determine the
issue of title to property claimed by a third person adversely to the decedent, unless the
claimant and all other parties having legal interest in the property consent, expressly or
impliedly, to the submission of the question to the Probate Court for adjudgment, or the
interests of third persons are not thereby prejudiced.
[22]

The facts obtaining in this case, however, do not call for the application of the
exception to the rule. It bears stress that the purpose why the probate court allowed the
introduction of evidence on ownership was for the sole purpose of determining whether
the subject properties should be included in the inventory which is within the probate
courts competence. Thus, when private respondent Cesar Reyes was appointed as
administrator of the properties in the courts Order dated July 26, 1989, he was ordered
to submit a true inventory and appraisal of the real and personal properties of the estate
which may come into his possession or knowledge which private respondent complied
with. However, petitioner Oscar Reyes submitted his objection to the inventory on the
ground that it included the subject properties which had been forfeited in favor of the
government on April 21, 1975 and which he subsequently redeemed on August 19,
1976. The Court resolved the opposition as follows:

At the hearing today of the pending incidents, it was agreed that the said
incidents could not be resolved without introduction of evidence.
Accordingly, the hearing on the inventory of real and personal properties is
hereby set on April 24, 1990 at 10:00 A.M. at which date and time the
petitioner/administrator shall be required to present evidence to establish that
the properties stated in the inventory belong to the estate of Ismael
Reyes. The oppositor shall thereafter adduce his evidence in support of his
objection to the inclusion of certain properties of the estates in the inventory.
Notably, the Probate Court stated, from the start of the hearing, that the hearing was
for the merits of accounting and inventory, thus it had jurisdiction to hear the opposition
of Oscar Reyes to the inventory as well as the respective evidence of the parties to
determine for purposes of inventory alone if they should be included therein or excluded
therefrom. In fact, the probate court in its Order stated that for resolution is the matter of
the inventory of the estate, mainly to consider what properties should be included in the
inventory and what should not be included. There was nothing on record that both
parties submitted the issue of ownership for its final resolution. Thus the respondent
Court did not err in ruling that the trial court has no jurisdiction to pass upon the issue of
ownership conclusively.

In fact, the probate court, aware of its limited jurisdiction declared that its
determination of the ownership was merely provisional and suggested that either the
administrator or the widow Felisa Reyes may commence the proper action in the
Regional Trial Court. Moreover, the court admitted that it was not competent to pass
upon the ownership of the subject properties, thus:

Although the testimony of the oppositor should have greater persuasive value
than that of the petitioner/administrator, mainly because it agrees closely with
the recitals of facts found in the several public documents submitted as
evidence in this case and is corroborated to the greatest extent by the fact
that the properties were, indeed, abandoned in his possession since 1975
until the present, his alleged ownership of the Arayat Street properties cannot
still be sustained in a manner which would warrant their exclusion from the
administrators inventory.
To begin with, there are portions in the records which show that the oppositor
himself was somehow uncertain about his rights on the properties and the
basis therefor. During his cross-examination (tsn, Oct. 4, 1991), he gave the
following statements:
xx xx xx
(Atty. Habitan)
Q: And if we will add the other taxes you have paid, (you) are now claiming to be the owner
of the Arayat property because you have paid all these taxes?
A: The amounts I have paid and all the expenses I have and if I had not paid all these
amounts the property in question would have been lost, sir.
Q: So, in effect, you are now claiming ownership over the property, I want a categorical
answer, Mr. Witness?
A: If I am going to sum up all these expenses, my share in the Hi-Cement property, my share
in the Bulacan property, the amount of the property in Cubao is small and also all my
sufferings because of the property in Cubao, this cannot be paid in terms of money, sir.
(tsn, Oct. 4, 1991, pp. 10-12)

On re-direct examination (tsn, Sept. 18, 1992), he clarified his statements as

follows:
xx xx xx
(Atty, Javellana)
Q: Mr. Reyes, on cross-examination, you were asked by the petitioners counsel whether
because you had paid the BIR P17,872.44 you are now claiming to be the owner of the
property in Arayat Street to which you answered no, will you explain your answer?

A: When I paid almost P18,000.00, it does not mean that I claim the property already; on the
contrary, I have my own reasons to claim it now on other conditions which are the
following: number one, there was a levy by the BIR on the property, it was forfeited due
to delinquency of real estate taxes; number two, for abandonment, when my mother,
brother(s) and sisters left the property, they told me it is my problem and I should take
care of it. Number three, the disposition, my mother, my brothers and sisters sold the
property of my father, the Hi-Cement and the property in Visayas Street without giving
my share. And another thing I have to sell my own property, my own assets so that I can
redeem from the BIR the Arayat property and which I did with my personal funds, and
number five, nobody helped me in my problems regarding those properties, I was alone
and so I felt that the property in Arayat is mine.

xx xx xx

(tsn, Sept. 18, 1992, pp. 2-3)

Notwithstanding his clarifying statements on redirect examination, the
impression of the Court on the issue is not entirely favorable to him. Apart
from the absence of a specific document of transfer, the circumstances and
factors he gave may not suffice in and by themselves to convey or transfer
title, for, at best, they may only be the basis of such transfer. They may be
considered as proof of the intention to dispose in his favor or as evidence of a
set off among the heirs, which seems to be what he has in mind. There might
also be substance in his assertions about the abandonment in his favor,
which, if raised in the proper action, could constitute either prescription or
laches. It is hardly needed to stress, therefore, that more than these are
required to predicate the exclusion of the properties from the inventory.
Another obtrusive reality stands out to invite notice: the BIR levy was only
made on the property covered in TCT 4983 and did not include the
property covered in TCT 3598 (39303). This somehow detracts from the
logic of the oppositors assertion of ownership of the entire Arayat Street
properties; even if his assertion is valid and true, it can encompass, at most,
only the property subject of the BIRs levy and declaration of forfeiture (i.e.,
TCT 4983), not the property covered by TCT 3598 (39303).
These pronouncements should not by any means diminish or deprive the
oppositor of whatever rights or properties he believes or considers to be
rightfully his. Although the circumstances and factors he has given to the
Court herein may have legal consequences that could have defeated
opposing-claims and rendered oppositors claim on the properties
unassailable, this Courts competence to adjudicate thus in this proceedings is
clearly non-existent. In Baybayan vs. Aquino (149 SCRA 186), it was held
that the question of ownership of a property alleged to be part of the estate

must be submitted to the Regional Trial Court in the exercise of its general
jurisdiction.
This ruling then, cannot be a final adjudication on the present and existing
legal ownership of the properties. Whatever is declared herein ought not to
preclude oppositor from prosecuting an ordinary action for the purpose of
having his claims or rights established over the properties. If he still cares
hereafter to prosecute such claim of ownership adversely to the estate and
the apparent co-owner, his mother Felisa. As stated in Valera, et al. vs.
Judge Inserto, et al. (149 SCRA 533), this Court, acting as a probate court,
exercises but limited jurisdiction; accordingly, its determination that property
should be included in the inventory or not is within its probate jurisdiction, but
such determination is only provisional in character, not conclusive, and is
subject to the final decision in a separate action that may be instituted by the
parties.
xx xx xx

The aforecited findings clarify that there were several reasons for having the
issue of ownership ventilated elsewhere. Apart from the fact that only one-half
of the two lots known as the Arayat property (i.e., the half that could pertain to
the estate) could be settled herein, there was the realization that the evidence
adduced so far (including that bearing on the oppositors basis for excluding
from the estate the property) was inadequate or otherwise inconclusive.
A practical way of looking at the problem is that this Court, sitting herein as an
intestate court, does not consider itself competent to rule on the ownership of
the entire Arayat property.
Finally, anent private respondents allegation that the instant petition was filed one
day late, hence should be dismissed, we find the same to be devoid of merit. Petitioners
received copy of the decision denying their motion for reconsideration on August 13,
1999, thus they have until August 28, 1999 within which to file petition for review.
Petitioners filed their motion for extension on August 27, 1999 praying for 30 days
extension from August 28, 1999 or until September 27, 1999 to file their petition which
this Court granted. Petitioners filed their petition on September 27, 1999, which is within
the period given by the Court.
WHEREFORE, premises considered, the petition for review is DENIED.
SO ORDERED.