TIRSO T. REYES, AS GUARDIAN OF THE MINORS, AZUCENA, FLOR-DE-LIS AND TIRSO, JR., ALL SURNAMED REYES Y BARRETTO, PLAINTIFF-APPELLANT, VS. LUCIA MILAGROS BARRETTO-DATU, DEFENDANT-A…

Reyes versus Barretto-Datu

The Case

This is a direct appeal from a judgment of the Court of First Instance of Bulacan in a civil action for the recovery of one-half share in a fishpond in Hagonoy, Bulacan. The plaintiff, Tirso Reyes, suing as guardian of the minor children of his deceased wife Salud Barretto, sought partition of the fishpond against Lucia Milagros Barretto-Datu. The defendant countered by attacking the validity of the project of partition approved in the settlement of the estate of her father, Bibiano Barretto, and asked that all properties received by Salud be returned to her. The case matters because it teaches the finality of a decree of distribution, the binding effect of a probate proceeding in rem, and the proper application of the old Civil Code provisions on partition and compromise.

Procedural History

The action was filed in the Court of First Instance of Bulacan. The trial court dismissed the complaint and ordered the plaintiff to deliver to the defendant the properties received by his deceased wife under the terms of the will of Bibiano Barretto. The trial court held that the project of partition was null and void ab initio because Salud Barretto was not a daughter of the spouses Bibiano Barretto and Maria Gerardo, relying on Article 1081 of the Civil Code of 1889. It also applied Article 1456 of the new Civil Code on implied trust. The plaintiff appealed directly to the Supreme Court. The defendant also appealed from the denial of her prayer for damages.

Facts

Bibiano Barretto was married to Maria Gerardo. During their lifetime they acquired a vast estate consisting of real properties in Manila, Pampanga, and Bulacan. When Bibiano died in February 1936, he left his share of these properties in a will to Salud Barretto, mother of the plaintiff's wards, and to Lucia Milagros Barretto, with a small portion as legacies to his sisters and his nephew and nieces. The usufruct of the fishpond in Hagonoy, Bulacan was reserved for his widow, Maria Gerardo.

Maria Gerardo was appointed administratrix. She prepared a project of partition, which she signed in her own behalf and as guardian of the minor Milagros Barretto. The Court of First Instance of Manila approved the project of partition in November 1939. The distribution of the estate and the delivery of the shares of the heirs followed. Salud Barretto took immediate possession of her share and secured the cancellation of the original certificates of title and the issuance of new titles in her own name.

No complaint was heard until Maria Gerardo died in March 1948. Upon her death, it was discovered that she had executed two wills. The later will, which left all her properties to Milagros Barretto alone, was allowed, and the first will, which instituted Salud and Milagros as heirs, was rejected. In rejecting the first will, the lower court held that Salud was not the daughter of Maria Gerardo by her husband Bibiano Barretto. This ruling was affirmed by the Supreme Court. Having lost that fight, the plaintiff now falls back upon the remnant of the estate of Bibiano Barretto, which was given in usufruct to his widow Maria Gerardo. Hence, this action for the recovery of one-half portion thereof.

Issues

• Whether or not the project of partition approved in the settlement of the estate of Bibiano Barretto is null and void under Article 1081 of the Civil Code of 1889 because Salud Barretto was not a daughter of the testator.
• Whether or not the partition was void as a compromise on the civil status of Salud in violation of Article 1814 of the old Civil Code.
• Whether or not the decree of distribution, once final, vests title in the distributees and bars a collateral attack.
• Whether or not the action of Milagros Barretto to contest the partition and the decree of distribution is barred by the statute of limitations.
• Whether or not the plaintiff guardian is a possessor in bad faith and should account for the fruits received from the properties inherited by Salud Barretto.

Applicable Provisions

Article 1081 of the Civil Code of 1889 provides:

A partition in which a person was believed to be an heir, without being so, has been included, shall be null and void.

This provision was the basis of the trial court's ruling that the project of partition was void ab initio, but the Supreme Court held it was misapplied because Salud was a testamentary heir expressly instituted in the will.

Section 640 of Act 190, in force in 1939, provides:

SEC. 640. Estate, How Administered.—When a will is thus allowed, the court shall grant letters testamentary, or letters of administration with the will annexed, and such letters testamentary or of administration, shall extend to all the estate of the testator in the Philippine Islands. Such estate, after the payment of just debts and expenses of administration, shall be disposed of according to such will, so far as such will may operate upon it; and the residue, if any, shall be disposed of as is provided by law in cases of estates in these Islands belonging to persons who are inhabitants of another state or country.

This provision shows that the court had the duty to dispose of the estate according to the will, so that the distribution could stand even without the project of partition.

Ruling

On the first issue, the Court held that Article 1081 of the old Civil Code was misapplied. Salud Barretto was instituted heir in the last will and testament of Bibiano Barretto together with the defendant Milagros. The partition between them could not be one had with a party who was believed to be an heir without really being one. The legal precept does not speak of children or descendants but of heirs, without distinction between forced, voluntary, or intestate ones. The fact that Salud happened not to be a daughter of the testator did not preclude her being one of the heirs expressly named in his testament, for Bibiano Barretto was at liberty to assign the free portion of his estate to whomsoever he chose. While the share assigned to Salud impinged on the legitime of Milagros, Salud did not for that reason cease to be a testamentary heir. Nor did the fact that Milagros was allotted a share smaller than her legitime invalidate the institution of Salud, since there was no preterition, or total omission, of a forced heir.

On the second issue, the Court held that the partition was not void as a compromise on civil status. A compromise presupposes the settlement of a controversy through mutual concessions. The condition of Salud as daughter of the testator, while untrue, was at no time disputed during the settlement of the estate. There can be no compromise over issues not in dispute. While a compromise over civil status is prohibited, the law nowhere forbids a settlement by the parties over the share that should correspond to a claimant to the estate.

On the third issue, the Court held that independently of a project of partition, which is merely a proposal for distribution that the court may accept or reject, it is the court alone that makes the distribution of the estate and determines the persons entitled thereto and the parts to which each is entitled. It is that judicial decree of distribution, once final, that vests title in the distributees. If the decree was erroneous or not in conformity with law or the testament, it should have been corrected by opportune appeal. Once it had become final, its binding effect is like that of any other judgment in rem, unless properly set aside for lack of jurisdiction or fraud. The Court also held that the probate proceeding is one in rem, and the court acquires jurisdiction over all persons interested through publication of notice, and any order entered therein is binding against all of them.

On the fourth issue, the Court held that the action of Milagros Barretto was barred by the statute of limitations. At the time of the distribution she was only sixteen years old, and she became of age five years later, in 1944. On that year her cause of action accrued to contest on the ground of fraud the decree of distribution, and the four-year period of limitation started to run, to expire in 1948. Even conceding that she only became aware of the true facts in 1946, her action still became extinct in 1950. The action was already barred when she filed her counterclaim in 1956. The alleged verbal promise of the plaintiff to reconvey the properties rested exclusively on her oral assertions and could not bind the minor children, since an abdicative waiver of rights by a guardian is an act of disposition, not of administration, and is null and void as to the wards unless duly authorized by the proper court.

On the fifth issue, the Court held that the claim that the plaintiff guardian is a possessor in bad faith and should account for the fruits received from the properties inherited by Salud Barretto is legally untenable.

Doctrine

A project of partition is merely a proposal for distribution of the estate that the court may accept or reject. It is the court alone that makes the distribution of the estate and determines the persons entitled thereto and the parts to which each is entitled. It is the judicial decree of distribution, once final, that vests title in the distributees. A final decree of distribution has the binding effect of a judgment in rem and may not be collaterally attacked, unless properly set aside for lack of jurisdiction or fraud. Article 1081 of the old Civil Code, which declares void a partition in which a person believed to be an heir without being so has been included, does not apply where the distributee was expressly instituted as a testamentary heir in the will, for the testator is at liberty to assign the free portion of his estate to whomsoever he chooses. A compromise requires a disputed issue, and there can be no compromise over issues not in dispute. The probate proceeding is one in rem, and the court acquires jurisdiction over all persons interested through publication of notice.

Disposition

The decision of the Court of First Instance of Bulacan was reversed and set aside insofar as it ordered the plaintiff to reconvey the properties to Milagros Barretto-Datu, and affirmed insofar as it denied any right of the appellee to accounting. The records were returned to the court of origin with instructions to proceed with the action for partition of the fishpond and for the accounting of its fruits, as prayed for in the complaint.

Remember This

The single line worth memorizing is that it is the final decree of distribution, not the project of partition, that vests title in the distributees, and it cannot be collaterally attacked. Examiners like to use this case to test the distinction between a project of partition and a decree of distribution, the binding effect of a probate proceeding in rem, and the application of Article 1081 of the old Civil Code.