TESTATE ESTATE OF NARCISO A. PADILLA, DECEASED; YSABEL B. DE PADILLA, EXECUTRIX AND APPELLANT, VS. CONCEPCION PATERNO, DEFENDANT AND APPELLEE.

Narciso A. Padilla died February 12, 1934, leaving a childless widow,
Concepcion Paterno, whom he had married in 1912. His last will, which
was probated in due course, instituted his mother, Ysabel Bibby Vda. de
Padilla as universal heiress.

In the proceedings for the
settlement of his estate in Manila (civil cases 46058-63) his widow
moved for delivery of her paraphernal property together with some
reimbursements and indemnities, and for one-half of the conjugal
partnership property. She also asked that her usufructuary right as
surviving spouse be imposed on the corresponding portion of her
husband’s assets. The heiress, who was executrix, opposed several such
claims.

After hearing evidence on both sides, the court
rendered on January 15, 1940, a decision which, as amended by its
resolution of April 24, 1940, declared as paraphernal certain personal
and real properties. Other realties, although originally paraphernal,
were considered part of the conjugal assets because of buildings
erected thereon during coverture, but reimbursement of their value was
directed. The main bulk was adjudged conjugal property. The court
ordered the appointment of commissioners to estimate the amounts to be
reimbursed, to divide the matrimonial assets into two equal parts for
the spouses, and to determine the specific portion of the deceased’s
estate to be encumbered with the widow’s usufruct (?). Other
minor directives are omitted for the sake of brevity.

The
executrix appealed to this Supreme Court, wherein, dated October 4,
1943, a decision was promulgated upholding the judgment of the Manila
court with a slight modification as to payment of interest.

(That year Concepcion Paterno died. She is no represented by her testate heirs and legatees.)

For compliance with the decision, the records went back to the Manila
court. Therein three commissioners were duly appointed: Vicente A.
Rufino, chosen by the widow’s side, Augusto J. D. Cortes by the
heiress-executrix and V. H. Endaya by the court.

After
hearings held before the said committee, (May-November, 1947) Vicente
A. Rufino submitted his report dated July 9, 1948 which was concurred in toto
by V. H. Endaya. A few days later Augusto J. D. Cortes filed his own
report, wholly at variance with his collegues’ recommendations on many
important particulars.

In December, 1948, counsel for the
executrix interposed legal and factual objections to the Rufino report.
In May, 1949, Atty. Claro M. Recto, for the Paterno relatives, replied
to said objections, and prayed that they be overruled with the approval
of the aforesaid report.

On July 3, 1950, Judge Rafael
Amparo of the Manila court approved the majority report except that he
declared: (1) lot No. 50 on Juan Luna Street was conjugal and (2) the
usufruct of the widow shall be constituted on one-third of the estate.

Before us presently lies the appeal by the executrix. According to her
counsel, “only six (6) pieces of realty are now in controversy” namely,
“those at Arquiza, Juan Luna, Martin Ocampo, Camba, R. Hidalgo and De
la Fe.”

1. The first two lots (Arquiza and Juan Luna) are subject-matter of the second assignment of error.

   The decision of the court of first instance in 1940 as confirmed by this Court in 1943 in effect declared: (a) Both lots were originally paraphernal property of Concepcion Paterno; (b) during coverture buildings were constructed thereon by the conjugal partnership; (c)
   therefore, the buildings and the lots were conjugal assets, but
   indemnity must be made to the wife for the value of the lots including
   that of the camarin previously existing on the Arquiza lot which was demolished; and (d) the commissioner shall determine such indemnity.

   The Rufino report which is printed in full on pages 169-192 of the
   Record on Appeal, states that the buildings constructed by the
   partnership on the two lots were destroyed by fire during the battle of
   liberation of Manila in 1945. Then it goes on to adjudicate:

   “As already stated, the conjugal improvements on the lots on Arquiza
   and Juan Luna have been destroyed by fire, and the Supreme Court having
   held that the lands on which said improvements were erected remained
   paraphernal until the value of said lands were paid to the widow
   Concepcion Paterno Vda. de Padilla, said lands must be returned to the
   testate estate of Concepcion Paterno Vda. de Padilla.

   “However, any amount due or that may be received from the War Damage
   Commission for the improvements that were destroyed on those two pieces
   of property shall be divided share and share alike between the estate
   of Ysabel Bibby Vda. de Padilla and the estate of Concepcion Paterno
   Vda. de Padilla.” (Record on Appeal, p. 177.)

   The executrix earnestly challenges the first paragraph, contending that
   the lots became conjugal properties from the time buildings were
   erected thereon, and the subsequent destruction of such buildings did
   not make them paraphernal. She also argues that the indemnity to the
   widow for said lots should be their value at the time of the
   construction of the buildings, or at most, at the time of the
   dissolution of the partnership in 1934.

   These contentions may not be upheld in view of the decision of the
   Manila court and the confirmatory decision of this tribunal in 1943.
   There are, to be sure, some propositions in said decision which we may
   now hesitate to ratify, especially the pronouncement that the lot
   continued to be paraphernal until its value had been actually paid.^[1]
   But that judgment is now the law of the case. It specifically ordered
   that the indemnity shall be the value at the time of the liquidation.
   Yet it would be of no profit presently to discuss whether the lot
   continues to be paraphernal to be returned to the wife, or it is
   conjugal and its value should be handed to her, because whether one or
   the other, no substantial advantage accrues to the herein appellant,
   assuming, as we must, that the lots are properly appraised.

   As to lot No. 50 we find no error in the Rufino report. It was
   correctly treated as conjugal property, although in the division it
   fell to the half-share of the Paternos for the amount of P987.50, and
   such appraisal is not disputed.

2. Arguing that as to the Camba lot the previous decision of the Manila Court as amended had said:

   “*
   * * la sociedad conyugal construyo en dicha parcela de terreno un
   edificio de dos pisos avaluado aproximadamante en P4,000, segun se
   demuestra por el Exhibit 24, cuyo edificio se puso a nombre de Narciso
   Padilla, aunque la misma heredera admite que el mencionado edificio
   pertenece a la sociedad conyugal.”

   counsel for the appellant
   contends it was erroneous for the Rufino report to approve and
   recommend approval of the division of said lot into two portions 6-A
   and 6-B measuring 106.3 square meters and 83.3 square meters
   respectively, the first to be declared paraphernal and the second
   conjugal upon reimbursement of its value.

   This argument must be overruled, because that decision had found:

   “5.
   En cuanto a la finca en la Calle Camba, la viuda Concepcion Paterno
   pide una aclaracion con respecto a las mejora que en la decision se
   declaran gananciales. En los documentos de adquisicion consta que al
   tiempo de comprarse dicha finca por la viuda Concepcion Paterno ya
   existian en el solar tres accesorias de materiales fuertes y una bodega
   de mamposteria. Presumiendo a falta de prueba en contrario que estas
   edificaciones aun existen, el suelo y las expresadas edificaciones se
   declara que son de la propiedad exclusiva de la mujer. Las pruebas de
   la madre Isable Bibby demuestran que durante el matrimonio se construyo
   en dicho solar una edificacion de cuatro mil pesos (P4,000). A esta
   mejora se ha referido el Juzgado al declarar que la construccion
   levantada (durante el matrimonio) tenia el caracter de ganancial. El
   valor actual del suelo ocupada por dicha construccion se debe
   determinar por los Comisionados y se debe adjudicar a la mujer en
   concepto de indemnizacion.”

   It was therefor necessary to divide the
   Camba lot into two parts. The part of the lot occupied by the buildings
   of the wife could not obviously become attached to the conjugal
   structure. It continued forming part of the wife’s paraphernal
   belongings.

   The same situation obtains as to the Martin Ocampo property. It was
   divided into two parts, the majority report of the commissioners
   explaining:

   “According
   to the evidence the portion of the lot occupied by paraphernal building
   or the accesoria otherwise known as Nos. 612, 614, 616, 620, 624, 626,
   628, Quezon Boulevard, has a total area of 360.5 square meters; while
   the interior portion of said lot actually occupied by the accesoria
   constructed during the marriage of the spouses contained an area of
   528.1 square meters. This interior portion is the one which must be
   appraised by the Commissioners, and its value reimbursed to the Estate
   of Concepcion Paterno Vda. de Padilla, in view of the ruling of the
   court that ‘el valor actual del suelo ocupando por dicha accesoria
   construida durante el matrimonio se determinara por los comisionados y
   se adjudicara a la viuda en concepto de indemnizacion.’ The outer
   portion of 360.5 square meters having been declared paraphernal
   property, should be delivered to the Estate of Concepcion Paterno Vda.
   de Padilla.”

   The appellant vigorously maintains that the above
   recommendation does not follow the judicial verdicts of 1940 and 1943.
   We are satisfied from a reading of the decisions that, as in the case
   of the Camba property, they contemplated a partition, one part being
   paraphernal with the buildings already there when the lot was acquired
   by the wife, and the other to be classified as conjugal with indemnity
   payments.

   There is no proof that the interior portion of 528.1 square meters does
   not cover the entire space occupied by the conjugal building, not that
   the line of demarcation has been unreasonably and inequitably drawn
   between the paraphernal and the conjugal constructions.

   There remains the contention of the appellant that the interior
   premises have no access to the public street. This is a good point; but
   probably it was not deemed material by the commissioners because they
   intended to assign in the final division both the interior and the
   exterior plots to one party, the Paternos, thereby rendering
   unnecessary any outside connection.

   Counsel for appellant complains of “the marked partialilty” of
   Commissioner Rufino and cites as example the case of the Martin Ocampo
   lot. He says: “This property is adjudicated to the wife’s estate for
   P76,012 (Report, R. on A., p. 190.) But the conjugal partnership has to
   pay as conjugal liability for the “value of Quezon land” the sum of
   P66,012. (R. on A., p. 187). Accordingly, the wife’s estate is given
   the Martin Ocampo property for only P10,000. While its purchase price
   was only P11,000 in 1915 or 1917, its value has increased considerably
   because of the Quezon Boulevard. The assessed value in the year 1941 of
   the lot alone was P61,300. (See Exhibit D-1; Exhibit M, R. on A. pp.
   111-112).”

   The argument, at first impressive, loses force upon careful examination
   of its premises and terms. In the first place, “this property” means
   only the interior portion (not the outer) of the land. In the second
   place, that property is given to the wife’s estate not for P10,000
   only, but for that amount plus one-half of P66,012 which totals
   P43,006. In the third place, the assessed value of the whole lot for
   1941 was P35,789. (R. A., 113). Wherefore that interior portion which
   is admittedly less valuable than the exterior could not be worth
   (assessed) more than one-half of P17,895.

   A similar complaint is made concerning the adjudication of the Camba
   property to the wife for P7,702.66. If analyzed in like manner, the
   complaint will exhibit no justifiable foundation.

3. In the fifth assignment of error it is maintained that the lower court
   erred in sustaining the recommendation of Commissioner Rufino requiring
   delivery of the lot at Callejon De la Fe to the estate of Concepcion
   Paterno.

   There is no merit to this assignment of error.
   The decisions of 1940 and 1943 found this property to be paraphernal
   property of the wife. Therefore, it should be turned over to her
   successors in interest.

4. Regarding the R. Hidalgo property, the decision of 1940 and 1943
   declared that the wife was owner of 9/29 thereof because of the
   purchase price she had contributed, P45,608.29. The Rufino report
   appraised the property at P189,240, computed 9/29 as P58,729.67,
   required the partnership to pay the wife that amount, listed the
   property as conjugal in its entirety, and then awarded it to the wife
   as part of her moiety of the conjugal estate.

   The
   appellant asserts that the indemnity should not exceed P45,608 the
   amount invested by her. Such position is contrary to the decisions that
   have declared her as owner of 9/29. It is too late presently to contend
   that her rights to that piece of property were of a different nature.

   However we find that appellant is in some measure justified in
   protesting against the award of both this R. Hidalgo property and the
   Martin Ocampo to the estate of Concepcion Paterno. Appellant argues
   that “the two most valuable properties of this testate estate” are
   these two lots, and consequently one should be given to her and the
   other to the Paterno estate. We find merit in this protest. One of
   these two lots should be awarded to the appellant. Now remembering that
   the R. Hidalgo lot has recently become valuable because of the
   construction of the Illusion Theatre due to efforts of appellant, this
   should be apportioned to her.^[2]
   It is inadvisable to adjudicate to her the interior portion of M.
   Ocampo lot because that would involve the problem of street connection
   and the consequent delay in the settlement of the estate, what with
   further friction that might develop between the contending families
   when it comes to the establishment and maintenance of such outlet. Of
   course this award will be in exchange for other properties of equal
   value assigned to her in the lower court’s decision.

5. In the sixth assignment of error it is argued that, in the liquidation,
   the realties should not have been appraised on the basis of the values
   of 1947 but of those at the time of the dissolution of the partnership
   (1934) or at least the figures stated in the inventory by the Committee
   on Claims and Appraisals.

   It is true that the report of
   the Committee on Claims and Appraisals adopted lower valuations for the
   disputed properties. But it needs no explanation that in the process of
   winding up a decedent’s estate such report is only the beginning. If
   the proceedings take a long time and the values have suffered some
   alteration, there is nothing to prevent a new valuation when the last
   stage, is reached, i.e.,
   the actual division or partition comes, so long as all the properties
   are newly appraised in reference to the same period of time. We are
   shown no law or doctrine making the Report of the Committee on Claims
   and Appraisals conclusive upon the parties and the courts. Perhaps
   there is some ground to contend that the rights of the surviving spouse
   and of the heirs of the deceased should be measured as of the time of
   dissolution (1934) and the values as well as indemnities should be
   fixed as of that date. As we peruse the record however, we realize that
   the adoption of such criterion would only profit the appellant in so
   far as it concerns the indemnities to be paid for the paraphernal lots
   on which buildings had been erected by the conjugal partnership,
   because lesser indemnities would mean greater conjugal assets to
   divide. But the decisions of 1940 and 1943, plainly implying that the
   said paraphernal lots continued to be so until payment was made, afford
   us no liberty to explore this field of the controversy.

6. Wherefore, applying the above views, the appealed decision should be
   modified so that to the estate of Narciso Padilla and to the estate of
   Concepcion Paterno shall be adjudicated:

   To the Estate of Narciso Padilla in payment						P230,579.69
   	of his net share of
   The following properties:
   	No. 2 (Juan Luna property)				P987.50
   	No. 5 (Gastambide property)				30,650.00
   	No. 13 (San Juan lot No. 1)				8,085.00
   	No. 10 (R. Hidalgo, P. Gomez property)				189,240.00
   					__________
   			Total		P228,962.50
   			Plus Cash		1,617.19
   					__________
   				Total		P230,579.69
   To the Estate of Concepcion Paterno in						P380,699.95
   	payment of her net share of
   The following properties:
   	No. 3 (Alvarez-Mangahan property)				P15,600.00
   	No. 7 (Reina Regente property)				120,000.00
   	No. 9 (Mendoza property)				55,000.00
   	No. 1 (Camba No. 401-7 property)				7,702.66
   	No. 4 (A. Flores property)				40,940.00
   	No. 6 (M. Ocampo property)				76,012.00
   	No. 8 (F. Huertas property)				16,000.00
   	No. 11 (S. Lazaro property)				30,000.00
   	No. 12 (S. Juan lot No. 2)				7,833.00
   	Monte de Piedad deposit withdrawn				9,229.48
   		by her
   	Advance for repairs of her paraphernal				4,000.00
   		property
   					__________
   			Total		P382,317.14
   			Less Cash Reimbursement		1,617.19
   					___________
   				Total		P380,699.95
   						==========

Modified as above indicated the judgment under review is affirmed in all other respects. So ordered.

Paras, C.J., Pablo, Tuason, Montemayor, Reyes, Jugo, Bautista Angelo and Labrador, JJ., concur.

---

^[1] and the matter of the husband’s gambling losses.

[2] This Illusion Theatre was not reckoned with in the
Rufino report. Apparently it would pass to the estate in 1952 upon the
occurrence of certain specified contingencies. If it has passed the
matter could undoubtedly be the subject of further deliberation upon
appropriate motions. It would only be a question of determining the
additional value of the R. Hidalgo property and of requiring the herein
appellant to pay the Paterno estate its corresponding share.