**Facts:**
Felipe Madlangawa occupied a parcel of land in the Clara de Tambunting de Legarda Subdivision since 1949 with the intent to purchase it. After Clara Tambunting’s death on April 2, 1950, her estate, including the disputed land, was under custodia legis. Madlangawa paid a deposit for the lot on April 22, 1950, received by Vicente Legarda, the husband of the deceased. However, due to disputes among the heirs, further payment was stalled.
Manotok Realty, Inc. acquired the subdivision, including the disputed lot, from the Philippine Trust Company in 1959, being aware of potential claims and disputes over the properties. Despite notices to vacate issued in 1966, Madlangawa did not vacate, prompting Manotok Realty to file an action to recover the lot.
The trial court dismissed Manotok Realty’s action, citing insufficient evidence of the land’s identity. The Court of Appeals confirmed the lot’s identity but ruled that Manotok could only enforce collection of the balance due to it from Madlangawa, taking into consideration the area possessed by him and the prior deposit made.
**Issues:**
1. Whether the sale by Vicente Legarda to Madlangawa was valid, binding, and enforceable against Manotok Realty.
2. Whether Vicente Legarda had the authority to sell the lot as either owner or administrator of Clara Tambunting’s estate.
**Court’s Decision:**
The Supreme Court ruled that:
1. The sale by Vicente Legarda to Madlangawa was void ab initio since Legarda was neither the owner nor the administrator of the property at the time of the sale.
2. Vicente Legarda could not have validly disposed of the lot in dispute without proper authority from a probate court.
Therefore, the Court reversed the decision of the Court of Appeals, ordering Madlangawa to surrender the lot to Manotok Realty and to pay the computed rentals from May 1950 until the surrender of the lot. Manotok Realty was ordered to reimburse Madlangawa’s initial deposit with legal interest.
**Doctrine:**
A sale of property belonging to an estate under probate is invalid unless made under a probate court’s order. A contract void ab initio cannot be ratified nor can the defense of its illegality be waived.
**Class Notes:**
1. **Custodia Legis & Paraphernal Property:** Property under judicial custody must be managed according to probate court rules. Paraphernal property remains under the wife’s ownership and management unless explicitly delegated.
2. **Authority in Estate Management:** Sale of estate property requires explicit authorization by the probate court.
3. **Void ab Initio Contracts:** These are legally nonexistent from their inception and cannot be validated by ratification or waiver of defenses.
4. **Rental Computation & Reimbursement:** In disputes over unlawful possession, rightful property owners may demand fair rental compensation, and any initial payment by the possessor should be reimbursed with interest if the initial transaction was void.
**Historical Background:**
The case highlights the complex legal challenges involved in property transactions within estates undergoing probate—a common issue in Philippine property law, particularly in cases where properties are entangled in inheritance disputes or unclear succession lines. The decision reiterates key principles surrounding the authority required to deal with estate properties and the status of agreements made without such authority.
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