JULIAN BOÑAGA, PLAINTIFF AND APPELLANT VS. ROBERTO SOLER, ET AL., DEFENDANTS AND APPELLEES.

Boñaga versus Soler

The Case

This is the case of Boñaga versus Soler, decided by the Supreme Court in June 1961. Julian Boñaga, as administrator of the estate of the deceased spouses Alejandro Ros and Maria Isaac, sued Roberto Soler and others to annul two wartime sales of estate lands and to recover the properties, which had been registered in Soler's name. The trial court dismissed the complaint outright, without trial, on grounds of estoppel and prescription. The case matters because it fixes the mandatory character of the notice requirements for a probate sale of estate property, and because it reminds us that a complaint may not be dismissed on defenses that rest on facts still to be proven.

Procedural History

The action was filed in the Court of First Instance of Camarines Sur. Soler moved to dismiss three times. The first motion, grounded on lack of legal capacity to sue and failure to state a cause of action, was denied. He answered and set up a counterclaim. His second motion, on the same grounds, was likewise denied. His third motion, filed in July 1955, raised for the first time estoppel, prescription, and non-inclusion of necessary parties. The court ordered the plaintiff to include the vendors as parties, and denied that motion, but without resolving estoppel and prescription. In April 1959, acting on Soler's request for a resolution, the trial court dismissed the complaint, holding that the administrator was estopped and that the action had prescribed. Boñaga appealed directly to the Supreme Court, which reversed and remanded.

Facts

The spouses Alejandro Ros and Maria Isaac died in 1935 and 1940. Intestate proceedings for the settlement of their estate were commenced in the Court of First Instance of Camarines Sur, and Juan Garza was appointed administrator. On application, the probate court authorized Garza to sell certain parcels of land belonging to the estate. On August 30, 1944, Garza sold twenty-one parcels of abaca, coconut, forest and pasture land, more than one thousand and one hectares in all, for a lump sum of 142,800 pesos in Japanese currency. The sale was approved in October 1944. The plaintiff alleged, and the record showed nothing to the contrary, that these lands comprised almost the entire estate. Nothing in the record showed that the application to sell was set for hearing, or that notice was ever issued to the heirs of Alejandro Ros, who were then in Spain and appear to have received no part of the purchase price. In the order declaring the heirs of the wife and approving the sale, the declaration of the heirs of the husband was expressly held in abeyance.

On October 14, 1944, the heirs of Maria Isaac sold all their shares and interest over certain parcels of land to Soler. During the war the records of the proceedings were destroyed. Upon reconstitution, Boñaga was issued letters of administration in September 1951.

In May 1952, Boñaga, as administrator, sued to annul both sales as fraudulent, made without notice to the heirs of Alejandro Ros, and not beneficial to the heirs, and prayed for reconveyance of the lands, which had been registered in Soler's name, and for damages. The trial court dismissed the complaint. Hence the appeal.

Issues

• Whether or not the trial court erred in dismissing the action without a hearing on the merits, where it was not shown that the requisites for a sale of estate property for the benefit of the interested parties had been complied with.
• Whether or not the administrator was estopped to question the validity of the sales made by his predecessor.
• Whether or not the action had prescribed.
• Whether or not the defense of prescription was waived for not having been raised in the earlier motions to dismiss or in the answer.

Applicable Provisions

Section 4 of Rule 90, as discussed in the decision, governs a sale of estate property for the benefit of the interested parties, and it provides:

Rule 90, Section 4, does not distinguish between heirs residing in and residing outside the Philippines.

This is the provision whose hearing and notice requirements the Court held to be mandatory, so that their omission voids the authority to sell, the sale, and the order approving it.

Section 2 of Rule 90, which the appellees invoked, requires notice only to heirs residing in the Philippines, but the Court held it inapplicable because the record did not show that the personal properties were insufficient to pay the debts and expenses of administration.

Article 1410 of the new Civil Code, on actions to declare the inexistence of contracts, provides:

Actions to declare the inexistence of contracts do not prescribe.

The Court applied this to hold that the action to annul the void sales had not prescribed.

Article 1391 of the new Civil Code, on the prescriptive period for actions based on fraud, bears on the alternative theory of constructive trust, because the record showed no date when the alleged fraud was discovered.

Ruling

On the first issue, the Court held that the lower court erred in dismissing the action without a hearing on the merits. A sale of estate properties as beneficial to the interested parties must comply with the requisites of Sections 4 and 7 of Rule 90, which are mandatory. Among these, the fixing of the time and place of hearing of the application to sell, and notice thereof to the heirs, are essential; without them, the authority to sell, the sale itself, and the order approving it are null and void from the beginning. Section 4 does not distinguish between heirs residing in and outside the Philippines, so its requirements apply regardless of residence. The claim that the sale was made under Section 2 was not substantiated, since neither the deed nor the probate orders showed that the personal properties were insufficient to pay debts and expenses, or even that the sale was made for that purpose. The plaintiff should at least have been given a chance to prove his case.

On the second issue, the Court held that a decedent's representative is not estopped to question the validity of his own void deed purporting to convey land; and if this is true of the administrator as to his own acts, then all the more is his successor not estopped to question the acts of his predecessor that are not conformable to law.

On the third issue, the Court held that the claim of prescription was untenable. Actions to declare the inexistence of contracts do not prescribe, a principle applied even before the effectivity of the new Civil Code. The sale by the heirs of Maria Isaac of their interests may be valid, but it could not have effected an immediate and absolute transfer of title to Soler over any part of the parcels, much less their entirety; it was necessarily subject to the result of the administration proceedings. As to the theory of constructive trust, there was no showing of when the alleged fraud was discovered, so it could not be said that prescription had barred the action.

On the fourth issue, the Court held that prescription was deemed waived. It was not raised in the first motion to dismiss, in the answer, or in the second motion to dismiss; more than three years passed before Soler raised it. Not having been set up as an affirmative defense, it was waived. Prescription did not appear on the face of the pleadings, and the question of when the fraud was discovered raised an issue of fact requiring evidence.

Doctrine

A sale of estate property for the benefit of the interested parties must comply with the mandatory requisites of Sections 4 and 7 of Rule 90. The fixing of the time and place of hearing of the application to sell, and notice to the heirs, are essential; without them, the authority to sell, the sale, and the order approving it are null and void from the beginning. The notice requirement applies to heirs residing outside the Philippines as well.

An administrator is not estopped to question the validity of a void deed, and his successor is not estopped to question the unlawful acts of his predecessor.

An action to declare the inexistence of a void contract does not prescribe. Where the action rests on a constructive trust, prescription does not run until the fraud is discovered, and the plaintiff must be allowed to prove the date of discovery.

Prescription, being an affirmative defense, is waived if not raised in the motion to dismiss or in the answer, unless it appears on the face of the pleadings.

Disposition

The Supreme Court reversed the order dismissing the complaint and remanded the case to the trial court, with instructions to proceed in accordance with the decision, with costs against Roberto Soler.

Remember This

Memorize this line: without the hearing and notice required by Rule 90, the authority to sell, the sale, and the order approving it are void from the beginning. Examiners use this case on the mandatory notice to heirs in probate sales, on the non-prescription of actions to declare a contract inexistent, and on the waiver of prescription not pleaded seasonably.