MARTIN NERY AND LEONCIA L. DE LEON, PETITIONERS, VS. ROSARIO, ALFREDO, MARIANO, PACIFICO, ONOFRE, TEOFILO, LOLOY AND TRINIDAD, ALL SURNAMED LORENZO, RESPONDENTS.

Nery versus Lorenzo

The Case

This is a case about the limits of a guardian's power to sell the real property of her wards, and about the rights of a buyer who happens to be a lawyer. The spouses Martin Nery and Leoncia de Leon bought a parcel of land from Bienvenida de la Isla, who was acting both in her own right and as guardian of her minor children. The children, together with the heirs of a co-owner who never sold her share, challenged the sale. The case matters because it fixes the rule that the notice of hearing in a guardianship proceeding is jurisdictional, and because it applies the doctrine that a trustee cannot acquire an interest adverse to his principal. It is a staple in examinations on guardianship, on the rights of minors, and on the parens patriae role of the State, meaning the State as guardian of those who cannot protect themselves.

Procedural History

The guardianship proceeding was instituted in the Court of First Instance of Rizal in December 1950. The probate court authorized the guardian to sell, and later approved the deed of sale. The children and the Ferrer heirs brought suit to invalidate the transaction, and the trial court, in a decision rendered in June 1961, ruled for them. It held that the guardianship court never acquired jurisdiction over the persons of the minors who were not notified, at least two of them being over fourteen years of age, and never acquired jurisdiction over their real property because the inventory stated that the minors had no real estate. The trial court declared the sale void as to the minors' share, recognized the Ferrer heirs as co-owners of one-fourth, and recognized the children as owners of one-half of the remaining three-fourths.

The buyers, the spouses Nery and de Leon, elevated the matter to the Court of Appeals. That court modified the judgment. It declared the deed of sale valid as to the whole three-fourths, without prejudice to the children demanding from their mother their participation in the amount paid, and confirmed the Ferrer heirs in one-fourth. Both the buyers and the children then came to the Supreme Court by petitions for review. The Supreme Court decided the case in April 1972.

Facts

The land, about four hectares in Malaking Kahoy, Parañaque, originally belonged to Florentino Ferrer and his siblings. In December 1943, three-fourths of the land was sold to Leoncio Lorenzo by Agueda, by Tomasa, and by the children of a deceased brother. Silvestra Ferrer did not sign that document and did not sell her one-fourth share. When Silvestra died in 1952, her one-fourth passed to her nearest relatives, the children of her deceased sister Tomasa, namely Rosario, Alfredo, Mariano, Pacifico, Onofre, Teofilo, Loloy and Trinidad, all surnamed Lorenzo.

Leoncio Lorenzo later died. His widow, Bienvenida de la Isla, became guardian of their six minor children. In May 1953 she petitioned the guardianship court for authority to sell, representing that her minor children owned one-half of the land and that the other half belonged to her. The probate court authorized the sale in June 1953, and the sale was made to the spouses Martin Nery and Leoncia de Leon. Martin Nery was a lawyer.

The guardianship proceeding had been instituted in December 1950 without notice to the two elder children, Dionisio and Perfecto, although they were then already more than fourteen years of age. The inventory submitted by the guardian stated that the minors had no real estate. On these facts the children and the Ferrer heirs challenged the sale, and the litigation wound its way from the trial court to the Court of Appeals and finally to the Supreme Court.

Issues

• Whether or not the guardianship court validly acquired jurisdiction to authorize the sale of the minors' real property, considering that the elder children above fourteen years of age were not notified of the petition for guardianship and that the inventory stated the minors had no real estate.
• Whether or not the deed of sale executed by the guardian in favor of the spouses Nery and de Leon is valid as to the entire three-fourths share.
• Whether or not the heirs of Silvestra Ferrer are entitled to one-fourth of the land, and whether or not their action has prescribed.

Applicable Provisions

Section 3 of Rule 93 of the Rules of Court, as quoted in the decision, provides:

When a petition for the appointment of a general guardian is filed, the court shall fix a time and place for hearing the same, and shall cause reasonable notice thereof to be given to the persons mentioned in the petition residing in the province, including the minor if above 14 years of age or the incompetent himself, and may direct other general or special notice thereof to be given.

This is the provision whose notice requirement the Court treats as jurisdictional, so that without it the guardianship court acquires no power to appoint a guardian or to authorize a sale of the ward's property.

Ruling

On the first issue, the Court held that the notice is jurisdictional. Speaking through Justice Fernando, it adopted the teaching of Chief Justice Moran that service of the notice upon the minor above fourteen years of age is jurisdictional, and that without such notice the court acquires no jurisdiction to appoint a guardian. The Court quoted with approval the rule as worded above, and stressed that the jurisdictional infirmity was too patent to be overcome. It added that where minors are involved the State acts as parens patriae, and that their immaturity calls for every procedural principle to be observed before their interest in property could be adversely affected. It noted that even a mother may have an interest opposed to that of her children.

On the second issue, the Court held that the Court of Appeals erred in validating the sale as to the whole three-fourths. The trial court had acted correctly in respecting the rights of the children. The Court restored the trial court's ruling that the children are co-owners to the extent of one-half of the three-fourths of the property. It also observed that the buyer, Martin Nery, was a lawyer and could not have been unaware that his vendor could not sell to him more than she rightfully could dispose of, and it invoked the settled principle that a trustee cannot acquire an interest opposed to that of his principal.

On the third issue, the Court held that the Ferrer heirs are entitled to one-fourth. Leoncio Lorenzo never denied holding that portion as trustee for them, and his widow could assert no greater right than her husband had. As to prescription, the Court found the trial court's resolution satisfactory: barely six years had elapsed from Silvestra's death in 1952 to the filing of the third-party complaint in September 1958, and there was no clear and satisfactory evidence of continuous, adverse, and open possession under claim of ownership sufficient to acquire the portion by prescription.

Doctrine

First, the notice of hearing in a petition for the appointment of a general guardian, including notice to the minor if above fourteen years of age, is jurisdictional. Without it the court acquires no jurisdiction to appoint a guardian, and any order authorizing the sale of the ward's real property is void. Second, where the inventory states that the minors have no real estate, the guardianship court does not acquire jurisdiction over their real property and cannot validly authorize its sale. Third, the State acts as parens patriae over minors, and procedural safeguards in their favor must be strictly observed. Fourth, a trustee cannot acquire an interest opposed to that of his principal, and a buyer who is a lawyer is held to knowledge of the limits of his vendor's title. These rules flow from the quoted Section 3 of Rule 93, which the Court read as a jurisdictional requirement rather than a mere directory one.

Disposition

The petition of the spouses Nery and de Leon failed and the children prevailed: the Court affirmed the decision of the Court of Appeals but modified it by adjudging the Lorenzo children co-owners of one-half of the three-fourths of the property, as the trial court had decreed, with costs against Martin Nery and Leoncia de Leon.

Remember This

The one line to memorize is that notice to the minor above fourteen years of age in a guardianship proceeding is jurisdictional, so that a sale authorized without it is void. Examiners use this case to test guardianship jurisdiction, the parens patriae doctrine, and the rule that a trustee cannot buy what he holds in trust.