FELIX UY CHUA, ROBERT IPING CHUA, RICHARD UY CHUA AND ATTY. FEDERICO C. CABILAO, JR., PETITIONERS, VS., COURT OF APPEALS, SOFIA O. SANCHEZ, ASSISTED BY HUSBAND FORTUNATO SANCHEZ…

This petition for certiorari under Rule 45 of the Rules of Court seeks
the reversal of the Decision dated December 15, 1994 and the Resolution dated
July 21, 1995 of the Court of Appeals in CA-G.R. SP No. 28171 which reversed the
decision of the Regional Trial Court of Cebu, Branch 12, in Sp. Proc. No.
417-CEB.

In its decision, the appellate court decreed as follows:

“WHEREFORE, the petition for certiorari is GRANTED. The orders dated November
15, 1991, January 13, 1992 and February 25, 1992 are declared null and void. The
Deed of Absolute Sale in favor of private respondents Felix Uy Chua, Robert
Iping Chua and Richard Uy Chua are declared null and void. The Deed of Absolute
Sale dated April 15, 1991 executed by the Administratrix in favor of petitioner
Sofia O. Sanchez is declared valid and binding upon the parties. The order dated
May 3, 1991 approving the Deed of Absolute Sale dated April 15, 1991 is AFFIRMED
AND REINSTATED.

SO ORDERED.”^[1]

The facts of the case, based on the records, are as follows: Fernando B.
Morada owned Lot 832-B-1-C-2 located in Cebu City. His only heirs were his wife,
Aida N. Morada, and two minor children. After his death, the probate court
presided by Judge Leoncio P. Abarquez appointed Aida as administratrix of her
husband’s estate. On July 20, 1984, the probate court allowed the sale of the
lot for P200,000.00 to the spouses Precioso and Consolacion Enriquez. Later, the
spouses and Aida agreed to rescind the said sale. On January 20, 1988, the
probate court again issued an order allowing the re-sale of said lot, the
proceeds of which shall be used to pay the P200,000.00 already paid by the
Enriquez spouses. On April 15, 1991, a Deed of Absolute Sale thereof was
executed in favor of Sofia Sanchez, herein private respondent, for one million
pesos (P1,000,000.00) payable with a down payment of P500,000.00 and the balance
to be paid after the lot was cleared of squatters.^[2] On May 7, 1991, the court, after approving
the sale to Sanchez,^[3] directed Aida to
submit an accounting within thirty days, deposit the proceeds of the sale in a
reputable bank in Cebu, and then inform the court of the name of the bank where
the money was deposited.

On July 16, 1991, after more than two months from the date of approval of the
sale, Intervenor Sagrario Morelos, filed a motion for reconsideration opposing
the sale alleging that the sale was prejudicial to the minor heirs of Fernando.
He claimed that the lot could be sold for P1.5 million pesos. Judge Abarquez
held a conference in chambers attended by Aida and her counsel Atty. Recto de
Dios, Atty. Rodolfo M. Morelos, counsel of Sagrario Morelos, and Atty. Federico
Cabilao, another intervenor who represented undisclosed clients interested to
purchase the land. During the conference, Atty. Cabilao revealed that he offered
P2 million pesos for the lot with the seller undertaking the eviction of the
present occupants, or P1.5 million with the buyer shouldering the expenses to
clear the lot of its present occupants. Aida objected to Atty. Cabilao’s
statement. She explained that the latter’s offer was made only after the sale to
Sanchez was already approved by the court.

On August 6, 1991 Atty. Cabilao, on instructions of Judge Abarquez, filed his
Proposal to Purchase the Property. In her comment and opposition to the proposal
of Atty. Cabilao, Aida Morada said that the court’s order approving the sale to
Sofia Sanchez had already become final and executory, and that she had bought
the land from the administratrix in good faith and for value. She added that she
should not suffer whatever missteps were committed by the administratrix. On
November 15, 1991, Judge Abarquez issued an order revoking his approval of the
sale and declared void and without effect the deed of absolute sale he had
earlier approved. In his Order, he stated:

“From the aforementioned facts, the Court finds that the Administratrix and
Sanchez are both guilty of misrepresentation. On her part, the Administratrix
deliberately concealed from the Court the fact that Sanchez had extended to her
a loan of P300,000.00 before the execution of the Deed of Sale and that the said
amount was already deducted by Sanchez from the down payment of P500,000.00.
Likewise, she deliberately withheld from the Court the fact that she previously
committed the lot in question as a guaranty for the payment of such loan of
P300,000.00. As admitted by Sanchez in Court, she understood and was aware that
in accordance with the terms of the Deed of Sale, she was supposed to deliver
the P500,000.00 to the Estate thru the Administratrix on the date of the
execution of the Deed of Sale. Under such knowledge of her corresponding
obligation as vendee, she should have told the Court that she was to deliver
only P200,000.00 for down payment and not P500,000.00, or she would have caused
the insertion of a proviso to this effect in the Deed of Sale in order that the
Court could have been properly apprised of the true circumstances of the sale.
But she instead kept her silence obviously to eliminate any hindrance to the
Court’s approval of the Deed of Sale. Hence, Sanchez could not claim that she is
a buyer in good faith.

From the foregoing circumstances, the conclusion is incapable that the
Administratrix and Sanchez had a community of interest in misleading the Court,
as a result of which, they were able to achieve the true purposes of sale which
were, a) to surrender the lot as an indirect payment of previous loan; and b) so
that the Administratrix could receive an additional amount of P150,000.00 which
she planned to keep for herself. Ostensibly their consortium amounted to
fraud.

Fraud has been defined, among others, as an inducement through insidious
machination. Insidious machination refers to a deceitful scheme or plot with an
evil or devious purpose. Deceit exists where the party, who obtains consent,
does so by concealing or omitting to state MATERIAL FACTS which, with intent to
deceive, by reason of such omission or concealment, the other party was induced
to give his consent which he would otherwise have not given. (Strong v.
Gutierres Repido, 213 U.S. 419; 41 Phil 947).

True it is that Sanchez had a valid credit in her favor. That such loan was
legitimate would even be considered. But such loan, as a valid credit, should
first be presented to the Court as an obligation of the Estate, either as an
administration expense or as an expense for the preservation of the property.
Only thereafter would it be paid by the Estate, according to any of the modes
provided for by Rule 88 of the Rules of Court. The sale in question is
apparently a contrivance availed of by the Administratrix and Sanchez as a
surreptitious liquidation of the loan of the Administratrix, in the guise of an
account of the Estate, taking a shortcut of the legal requirements provided for
by the Rules of Court. It is a general rule that notwithstanding the presence of
a valid consideration, a contract is considered to be stained with fraud if
there is no bona fide intent. Both valid consideration and bona fide intent must
exist. If lacking in any of these particulars the contract is voidable.

Moreover, the procedure jointly resorted to by the Administratrix and by
Sanchez was tantamount to a foreclosure of their loose mortgage agreement, a
procedure that is not allowed to take place in a probate court.

While it may be correct that the Intervenor, who is either an heir, devisee
or legatee to the will, has no personality to intervene in probate proceedings,
once the Court’s attention is called upon to remedy a situation where the
interest of justice is affected, the Court must institute just remedial
measures, on its own accord. Its corresponding action thereto is well within its
inherent power to amend its order so as to make it conformable to law and
justice.

The Court finds no merit in the contention of Sanchez that the annulment of
the sale would create an instability of probate proceedings. Since the Court’s
action in annulling the sale in question is impelled by its own duty to right a
wrong, such action, on the contrary, would give more strength to the probate
mechanism.”^[4] .

Almost immediately after his order, Judge Abarquez also approved the proposal
of Atty. Cabilao to purchase the property for P1.5 million. However, on December
5, 1991, before Judge Abarquez inhibited himself and before the case was
re-raffled to Branch 12, the Branch Clerk of Court, Branch 19, issued a
certification that the Order dated November 15, 1991 of Judge Abarquez declaring
the Deed of Sale dated April 15, 1991 executed by Aida Morada in favor of Sofia
Sanchez was void and without effect; and that the Order dated November 15, 1991
approving the sale to Atty. Cabilao issued by Judge Abarquez had become final
and executory since there was no motion for reconsideration filed by the parties
and no appeal was taken therefrom.^[5]
Atty. Cabilao then filed a motion for execution.

On January 13, 1992, Judge Portia Aliño-Hormachuelos, presiding over Branch
12 where the case was re-raffled, issued an Omnibus Order granting the motion
for execution and dismissing the urgent motion of Sanchez. The Order stated:

“WHEREFORE, considering that the order sought to be executed has become final
and executory, the offeror’s urgent motion for execution dated December 18, 1991
(p. 109, Ibid) is hereby granted. Atty. Federico Cabilao is hereby ordered to
prepare, for the approval [of] the court, the corresponding Deed of Sale to be
signed for and in behalf of the Estate by the Clerk of Court, Atty. Nicolas
Jomuad, pursuant to sec. 10. Rule 39, Rules of Court, it appearing to be
unlikely that the administratrix will appear before the court to execute the
Deed of Sale having failed to comply with her promise to do so as contained in
the Order dated December 12, 1991 (p. 115, Record).

The Manifestation and the Urgent Motion filed by Mrs. Sofia Sanchez is hereby
dismissed.

SO ORDERED.”^[6]

On January 29, 1992, Sanchez filed a motion for reconsideration and made a
counter-offer of P1.6 million, a hundred thousand pesos more than the amount
offered by Atty. Cabilao. The motion was denied in an order dated February 25,
1992. The court said that the Order approving the sale to Atty. Cabilao had
become final and executory and that the counter offer was not a compelling
reason for the court to vacate its order. As it turned out, the property was
bought by Felix Uy Chua, Roberto Iping Chua and Richard Uy Chua, the clients of
Atty. Cabilao who are now petitioners before this Court.

Sanchez filed a petition for certiorari before the Court of Appeals
alleging that respondent Judges Abarquez and Aliño-Hormachelos abused their
discretion amounting to lack of jurisdiction when they issued the questioned
orders dated November 15, 1991, January 13, 1992 and February 25, 1992.

As earlier stated, the appellate court granted the petition in favor of
private respondent Sanchez and the Deed of Absolute Sale in her favor was
affirmed and reinstated. Reconsideration was denied. Hence, the instant
petition, alleging that the appellate court committed the following errors:

“1. THE COURT OF APPEALS GRAVELY ERRED WHEN IT DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS WHEN IT GRANTED PRIVATE RESPONDENT’S
PETITION FOR CERTIORARI FILED UNDER RULE 65 AFTER MORE THAN 6 MONTHS HAD ELAPSED
SINCE HER RECEIPT OF THE ORDER COMPLAINED OF AND AFTER MORE THAN 5 MONTHS AFTER
SAID ORDER WAS CERTIFIED AS FINAL AND EXECUTORY.

2. THE COURT OF APPEALS GRAVELY ERRED IN NULLIFYING A FINAL AND EXECUTED
ORDER OF A PROBATE COURT ISSUED AFTER SUMMARY HEARING AND EVIDENCE OF FRAUD WAS
UNEARTHED AND AFTER PRIVATE RESPONDENT THRU NEGLIGENCE OR INDIFFERENCE LOST THE
PRIVILEGE TO APPEAL WHERE SUCH AN APPEAL WAS THE ADEQUATE AND APPROPRIATE REMEDY
IN THE ORDINARY COURSE OF LAW.

3. THE COURT OF APPEALS ACTED WITH MANIFEST PARTIALITY AND BEYOND THE BOUNDS
OF SOUND DISCRETION WHEN IT RENDERED THE QUESTIONED JUDGMENT PREMISED ON
MISAPPREHENSION OF FACTS, OR A SUPPOSED ABSENCE OF EVIDENCE BUT IS CONTRADICTED
BY EVIDENCE OF RECORD.”^[7]

First, petitioners challenge the appellate court’s decision to reinstate the
sale of Lot 832 in favor of Sanchez arguing that the November 15, 1991 order
approving the sale to them had become final and executory. Ironically, it is the
same argument private respondent used to plead her claim, that the much earlier
May 3, 1991 order of Judge Abarquez approving the sale to her had become final
and executory. Ironically too, both rely on the same doctrine enunciated in
Pan Realty Corporation vs. Court of Appeals^[8] where we ruled, “

…[T]he order of the Probate Court authorizing, or subsequently approving,
the absolute sale of property of the estate in favor of a specified buyer
undoubtedly constitutes a final determination of the rights not only of the
buyer and the estate but also of any heir or party claiming to be prejudiced by
the sale. For obviously, once the sale is consummated and approved by the
Court, the buyer will acquire title to the property to the exclusion of the
estate and the heirs or other party participating or otherwise involved in the
proceedings for settlement of the estate, unless the authority to sell or the
approval of the sale by the Court be reversed seasonably and by the proper
adjective mode. After its approval of the sale, nothing is left to be done
by the Probate Court with respect to the merits thereof; and it is thus in this
sense, a final order `subject to appeal’ pursuant to Sec. 2, Rule 41 of the
Rules of Court.”^[9]

It will be recalled that the probate court declared the sale to Sanchez, null
and void due to fraud and misrepresentation, then it entertained the offer of
Atty. Cabilao to purchase the property at a higher price. The Court of Appeals
ruled that the sale of the property to Atty. Cabilao was void because the
court was already without jurisdiction to enter the same after the sale to
Sanchez, which was previously approved by the same court, was consummated and
the intervenors failed to seasonably appeal therefrom.

Section 1, Rule 109 of the Rules of Court^[10] provides that an interested person may
appeal from an order or judgment rendered by the probate court where such order
constitutes the settlement of the estate of a deceased person. In the case
before us, the probate court approved the Deed of Sale in favor of Sanchez on
May 3, 1991. In special proceedings under Rule 109 of the Rules of Court and in
other cases where multiple appeals are allowed, the period of appeal is thirty
days. A record on appeal is required.^[11]
Recall that Atty. Rodolfo M. Morelos did not appeal but filed a motion for
reconsideration only on July 16, 1991, while Atty. Cabilao intervened and
offered to buy the property on August 6, 1991. By then, the sale of the property
to Sanchez was already consummated and final. When the probate court allowed
Atty. Cabilao to propose to buy the land and allowed the sale to the latter, the
probate court, at this juncture, had clearly gravely abused its discretion. All
other proceedings thereafter were conducted by the probate court without
jurisdiction including the erroneous nullification of the sale to Sanchez and
the subsequent sale to petitioners. The Court of Appeals, therefore did not err
in its order nullifying and voiding the orders dated November 15, 1991, January
13, 1992 and February 25, 1992.

Additionally, the belated proposal to buy the property was filed by an
offeror, Atty. Federico Cabilao, who had no legal personality to impugn the
validity of the sale between the administratrix and Sanchez. In CFI of Rizal,
Br. IX vs. Court of Appeals,^[12]
when an intervenor-offeror sought to annul a private sale duly authorized by
the probate court, this Court said: “

. . . It is well settled that for a person to be able to intervene in an
administration proceeding concerning the estate of a deceased person, it is
necessary for him to have an interest in such estate. An interested party in the
estate of a decedent has been defined as one who would be benefited by the
estate, such as an heir, or one who has a claim against the estate, such as a
creditor (Saguinsin vs. Lindayag, 116 Phil. 1193).”^[13]

Atty. Cabilao was neither a creditor nor an heir of the decedent. He had no
right to intervene in the probate hearings nor in the settlement of the
succession. As correctly observed by the Court of Appeals:

“x x x In this case, the only heirs of the late Fernando B. Morada are his
surviving spouse, Administratrix Aida N. Morada and their two (2) minor
children. Intervenor Sagrario Morelos and Atty. Federico Cabilao are not heirs,
devisees and legatees of the deceased Fernando B. Morada. Under Section 2 of
Rule 89 of the Revised Rules of Court, both Morelos and Atty. Cabilao are not
entitled to notice of the orders of the court on the sale of the subject
property, not being heirs, devisees and legatees of the late Fernando Morada.
The record of this case shows that Administratrix Aida Morada thru her counsel
received the order of May 3, 1991 on May 7, 1991. . . . [T]he order dated May 3,
1991 became final and executory. It was no longer subject to a motion for
reconsideration nor an appeal therefrom. It is thus clear that respondent Judge
Abarquez had no more jurisdiction to alter or annul the order of May 3, 1991
when he entertained the motion for reconsideration that was filed by Intervenor
Morelos on July 23, 1991 and the `Proposal to Purchase Property’ that was filed
by Atty. Federico Cabilao on August 6, 1991. These two (2) papers or `pleadings’
were filed more than two (2) months after the order dated May 3, 1991 had become
final and executory.”^[14]

Second, petitioners contend the respondent court erred when it disregarded
the finding of the trial court that there was fraud. The probate court, on its
own, concluded there was connivance between Aida and Sanchez in not disclosing
to the court that Aida owed money from Sanchez and that the loan was to be paid
from the proceeds of the sale. On this matter, Section 5 of Rule 8 is pertinent.
The rule states:

“Sec. 5. Fraud, mistake, condition of the mind — In all
averments of fraud or mistake, the circumstances constituting fraud or
mistake must be stated with particularity. Malice, intent, knowledge or
other condition of mind of a person may be averred generally.”^[15]

Fraud must be both alleged and proven, it is never presumed.^[16] Fraud and mistake must be averred to
enable the opposing party to controvert the particular facts allegedly
constituting the same. Affidavits must show the fraud, accident, mistake or
excusable negligence relied upon. The Court of Appeals noted that fraud was not
stated specifically in the pleadings, either in the motion for reconsideration
by Morelos or in the proposal to buy the property by Atty. Cabilao.

While a sale by an administrator of the personal property of the estate,
without the authority of an order of court, or of a will, or under an order of
court is void for want of jurisdiction, and does not confer on the purchaser a
title,^[17] in this case, the probate
court was not unaware of the loan from Sanchez and the agreement that part of
the proceeds of the sale will be applied to the loan. In fact, the probate court
had full knowledge that part of the proceeds of the sale to Sanchez was to be
used to reimburse the Enriquez spouses for P200,000.00. In its order dated
November 15, 1991 the probate court acknowledged that it issued an order dated
January 20, 1988 allowing the re-sale so the Enriquez spouses could be
reimbursed.^[18] In our view, this
improperly alleged and unproved “fraud” cannot be the basis of the probate court
for nullifying the sale to Sanchez after it had already become final and
executory.

Petitioners argue that private respondent, by filing a motion for
reconsideration and making a counter-offer of P1.6 million against petitioner’s
P1.5 million, waived whatever rights she had acquired under the deed of sale in
her favor and had in effect consented to the re-opening of the sale. They aver
that Sanchez by so doing is now estopped from raising the validity and finality
of the sale to her. We need not delve on this disingenuous proposition. As we
have discussed, all proceedings before the probate court after the sale to
Sanchez became final and executory, and after said court had lost jurisdiction,
were null and void. All subsequent events by legal contemplation were
non-events, immaterial to this case.

Finally, was it error to bring the case before the Court of Appeals on
certiorari under Rule 65? Petitioners allege that the proper remedy for
respondent was to appeal under Rule 45 under which private respondent was
already time-barred and the Court of Appeals should not have taken cognizance of
the petition. Petitioners misread the applicable law, Rules and precedents. A
special civil action for certiorari challenging the RTC with grave abuse
of discretion may be instituted either in the Court of Appeals or the Supreme
Court. Both have original concurrent jurisdiction.^[19] Certiorari is an extraordinary
remedy available only when there is no appeal, nor any plain, speedy or adequate
remedy in the ordinary course of law.^[20]
While ordinarily, certiorari is unavailing where the appeal period has
lapsed, there are exceptions. Among them are (a) when public welfare and the
advancement of public policy dictates; (b) when the broader interest of justice
so requires;^[21] (c) when the writs
issued are null and void; (d) or when the questioned order amounts to an
oppressive exercise of judicial authority.^[22] As early as Crisostomo vs.
Endencia,^[23] we held: “

…The remedy by certiorari may be successfully invoked both in cases wherein
an appeal does not lie and in those wherein the right to appeal having been lost
with or without the appellant’s negligence, the court has no jurisdiction to
issue the order or decision which is the subject matter of the remedy.”^[24]

The questioned orders of the probate court nullifying the sale to Sanchez
after it approved the sale and after its order of approval had become final and
executory amount to oppressive exercise of judicial authority, a grave abuse of
discretion amounting to lack of jurisdiction. Further orders stemming therefrom
are also null and without effect.

WHEREFORE, the instant petition for certiorari is
DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 28171, are both AFFIRMED. Costs against petitioners.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr.,
JJ., concur.

^[2]Id. at 66-67.

^[3]Id. at 125-126.

^[4]Id. at 75-77.

^[5]Id. at 85.

^[6]Id. at 104.

^[7]Id. at 38.

^[8]167 SCRA 564 (1988).

^[9]Id. at 572.

^[10]Section 1. Orders or judgments
from which appeals may be taken.-An interested person may appeal in special
proceedings from an order or judgment rendered by a Regional Trial Court [or a
Juvenile and Domestic Relations Court], where such order or judgment:

x x x

(c) Allows or disallows, in whole or in part, any claim against the estate of
a deceased person, or any claim presented on behalf of the estate in offset to a
claim against it;

(d) Settles the account of an executor, administrator, trustee or
guardian;

(e) Constitutes, in proceedings relating to the settlement of the estate of a
deceased person, or the administration of a trustee or guardian, a final
determination in the lower court of the rights of the party appealing, except
that no appeal shall be allowed from the appointment of a special administrator;
and

(f) Is the final order or judgment rendered in the case, and affects the
substantial rights of the person appealing, unless it be an order granting or
denying a motion for a new trial or for reconsideration.

^[11]SECTION 19(B), THE INTERIM RULES
AND GUIDELINES, RULES OF COURT.

^[12]106 SCRA 114 (1981).

^[13]Id. at 117.

^[14]Rollo, p. 15.

^[15]See RULES OF COURT.

^[16]Atilano vs. Inclan, 45
Phil. 246, 252 (1923).

^[17]Godoy vs. Orellano, 42
Phil. 347, 350 (1921) citing Wyatt’s Adm’r vs. Rambo 29 Ala., 510.

^[18]Rollo, p. 73.

^[19]Sec. 9 (1), B.P. 129.

^[20]Section 1, Rule 65, RULES OF
COURT.

^[21]Marcelo vs. De Guzman, 114
SCRA 657, 663-664 (1982); Tirona vs. Nañawa, 21 SCRA 395 (1967).

^[22]Sunbeam Convenience Foods Inc.,
et al., vs. Court of Appeals, 181 SCRA 443, 449 (1990); Acain vs.
Intermediate Appellate Court, 155 SCRA 100 (1987).

^[23]66 Phil. 1 (1938).

^[24]Id. at 8.