THELMA M. ARANAS vs. TERESIT TERESITA A V. V. MERCADO [G.R. No. 156407. Janua! 15" #014$ %ACTS& The decedent, Emigdio S. Mercado, died intestate on January 12, 1991. He was survived by his second wife, Teresita . Mercado, res!ondent, and their "ve chi#dren$ and his two chi#dren by his "rst marriage, name#y% res!ondent &ran'#in (. Mercado and !etitioner The#ma M. )ranas. Emigdi Emigdio o inheri inherited ted and ac*uir ac*uired ed rea# !ro!e !ro!ert rties ies durin during g his #ifeti #ifetime. me. He owned owned cor! cor!or orat ate e shar shares es in Merv Mervir ir +ea#t ea#ty y and and ebu ebu Emer Emerso son. n. He assi assign gned ed his his rea# ea# !ro!e !ro!erti rties es in e-cha e-change nge for cor!or cor!orate ate stoc's stoc's of Mervir Mervir +ea#ty, ea#ty, and so#d so#d his rea# rea# !ro!erty in adian, ebu to Mervir +ea#ty. /etitioner "#ed in the +T in ebu ity a !etition for the a!!ointment of Teresita as the administrator of Emigdio0s estate. The +T +T granted the !etition considering that there there was was no o!!os o!!ositi ition on.. The #etter #etters s of admini administr strati ation on was was grant granted ed in favor favor of Teresita. Teresita. )s the administrator, Teresita submitted an inventory of the decedents estate for the consideration and a!!rova# by the +T. She indicated in the inventory that at the time of the decedents death that the #atter #eft no rea# !ro!erties but on#y !ersona# !ro!erties. /etitioner c#aimed that the decedent owned other !ro!erties which are e-c#uded from the inventory and moved that the +T direct Teresita to amend the inventory, and be e-amined regarding it. Teresita "#ed a com!#iance with the order of January 3, 1994, su!!orting her inventory with co!ies of three certi"cates of stoc's covering the 55,367 Mervir +ea#ty shares of stoc'$ the deed of assignment e-ecuted by Emigdio on January 16, 1991 invo#ving rea# !ro!erties with the mar'et va#ue of /5,556,781.16 in e-change for 55,56 Mervir +ea#ty shares of stoc' with tota# !ar va#ue of /5,556,66.66$ 8 and the certi"cate of stoc' issued on January 46, 199 for 466 shares of stoc' of ebu Emerson worth /46,666.66. )gain, )gain, !etiti !etition oner er moved moved to re*u re*uir ire e Teresi eresita ta to be e-amin e-amined ed under under oath oath on the inventory. The +T issued an order e-!ressing the need for the !arties to !resent evidence and for Teresita to be e-amined to enab#e the court to reso#ve the motion for a!!rova# of the inventory. The#ma o!!osed the a!!rova# of the inventory, and as'ed, with #eave of court, to e-amine Teresita on the inventory. The +T issued on March 15, 2661 an order "nding and ho#ding that the inventory submitted by Teresita had e-c#uded !ro!erties that shou#d be inc#uded. The +T deni denied ed the the moti motion on for for a!!r a!!rov ova# a# of inve invent ntor ory y and and orde orders rs the the Teres eresit ite, e, the the administratri-, administratri-, to re:do the inventory of !ro!erties which are su!!osed to constitute as the the esta estate te of the the #ate #ate Emig Emigdi dio o S. Mer Mercado cado.. The The +T a#so a#so dir directe ected d the the admini administ strat ratriri- to rende renderr an accou account nt of her admini administr strati ation on of the estate estate of the decedent which had come to her !ossession. Teresita, Teresita, ;oined by other heirs of Emigdio, time#y sought the reconsideration reconsideration of the order of March 15, 2661 on the ground that one of the rea# !ro!erties a
>n a!!ea#, the ) reversed the +T decision insofar as the inc#usion of !arce#s of #and that are the sub;ect matter of the ?eed of )bso#ute Sa#e dated, and the various !arce#s of #and that are the sub;ect matter of the ?eeds of )ssignment in the revised inventory to be submitted by the administratri- is concerned.
ISS'E& @hether or not the +T committed grave abuse of discretion in directing the inc#usion of certain !ro!erties in the inventory by the decedent during his #ifetimeA R'LING& =o. The )0s conc#usion of grave abuse of discretion on the !art of the +T was unwarranted and erroneous. RATIO& The !robate court is authoriBed to determine the issue of ownershi! of !ro!erties for !ur!oses of their inc#usion or e-c#usion from the inventory to be submitted by the administrator, but its determination sha## on#y be !rovisiona# un#ess the interested !arties are a## heirs of the decedent, or the *uestion is one of co##ation or advancement, or the !arties consent to the assum!tion of ;urisdiction by the !robate court and the rights of third !arties are not im!aired. Cts ;urisdiction e-tends to matters incidenta# or co##atera# to the sett#ement and distribution of the estate, such as the determination of the status of each heir and whether !ro!erty inc#uded in the inventory is the con;uga# or e-c#usive !ro!erty of the deceased s!ouse. Dnder Section 7 aF, +u#e 3 of the +u#es of ourt, the #etters of administration may be granted at the discretion of the court to the surviving s!ouse, who is com!etent and wi##ing to serve when the !erson dies intestate. D!on issuing the #etters of administration to the surviving s!ouse, the +T becomes duty:bound to direct the !re!aration and submission of the inventory of the !ro!erties of the estate, and the surviving s!ouse, as the administrator, has the duty and res!onsibi#ity to submit the inventory within three months from the issuance of #etters of administration !ursuant to +u#e 34 of the +u#es of ourt, viB.% Section 1. Cnventory and a!!raisa# to be returned within three months. G @ithin three 4F months after his a!!ointment every e-ecutor or administrator sha## return to the court a true inventory and a!!raisa# of a## the rea# and !ersona# estate of the deceased which has come into his !ossession or 'now#edge. Cn the a!!raisement of such estate, the court may order one or more of the inheritance ta- a!!raisers to give his or their assistance. The usage of the word all in Section 1, su!ra, demands the inc#usion of all the rea# and !ersona# !ro!erties of the decedent in the inventory. However, the word all is *ua#i"ed by the !hrase which has come into his !ossession or 'now#edge, which signi"es that the !ro!erties must be 'nown to the administrator to be#ong to the decedent or are in her !ossession as the administrator. Section 1 a##ows no e-ce!tion, for the !hrase true inventory im!#ies that no !ro!erties a!!earing to be#ong to the decedent can be e-c#uded from the inventory, regard#ess of their being in the !ossession of another !erson or entity.
The ob;ective of the +u#es of ourt in re*uiring the inventory and a!!raisa# of the estate of the decedent is to aid the court in revising the accounts and determining the #iabi#ities of the e-ecutor or the administrator, and in ma#ting a "na# and e*uitab#e distribution !artitionF of the estate and otherwise to faci#itate the administration of the estate. Hence, the +T that !resides over the administration of an estate is vested with wide discretion on the *uestion of what !ro!erties shou#d be inc#uded in the inventory. )ccording to /era#ta v. /era#ta, the ) cannot im!ose its ;udgment in order to su!!#ant that of the +T on the issue of which !ro!erties are to be inc#uded or e-c#uded from the inventory in the absence of !ositive abuse of discretion, for in the administration of the estates of deceased !ersons, the ;udges en;oy am!#e discretionary !owers and the a!!e##ate courts shou#d not interfere with or attem!t to re!#ace the action ta'en by them, un#ess it be shown that there has been a !ositive abuse of discretion. )s #ong as the +T commits no !atent#y grave abuse of discretion, its orders must be res!ected as !art of the regu#ar !erformance of its ;udicia# duty. There is no dis!ute that the ;urisdiction of the tria# court as an intestate court is s!ecia# and #imited. The tria# court cannot ad;udicate tit#e to !ro!erties c#aimed to be a !art of the estate but are c#aimed to be#ong to third !arties by tit#e adverse to that of the decedent and the estate, not by virtue of any right of inheritance from the decedent. )## that the tria# court can do regarding said !ro!erties is to determine whether or not they shou#d be inc#uded in the inventory of !ro!erties to be administered by the administrator. Such determination is !rovisiona# and may be sti## revised. The inventory of the estate of Emigdio must be !re!ared and submitted for the im!ortant !ur!ose of reso#ving the dicu#t issues of co##ation and advancement to the heirs. )rtic#e 1671 of the ivi# ode re*uired every com!u#sory heir and the surviving s!ouse, herein Teresita herse#f, to bring into the mass of the estate any !ro!erty or right which he or sheF may have received from the decedent, during the #ifetime of the #atter, by way of donation, or any other gratuitous tit#e, in order that it may be com!uted in the determination of the #egitime of each heir, and in the account of the !artition. Section 2, +u#e 96 of the +u#es of ourt a#so !rovided that any advancement by the decedent on the #egitime of an heir may be heard and determined by the court having ;urisdiction of the estate !roceedings, and the fnal order o the court thereon shall be binding on the person raising the questions and on the heir . +u#e 96 thereby e-!anded the s!ecia# and #imited ;urisdiction of the +T as an intestate court about the matters re#ating to the inventory of the estate of the decedent by authoriBing it to direct the inc#usion of !ro!erties donated or bestowed by gratuitous tit#e to any com!u#sory heir by the decedent. The determination of which !ro!erties shou#d be e-c#uded from or inc#uded in the inventory of estate !ro!erties was we## within the authority and discretion of the +T as an intestate court. Cn ma'ing its determination, the +T acted with circums!ection, and !roceeded under the guiding !o#icy that it was best to inc#ude a## !ro!erties in the !ossession of the administrator or were 'nown to the administrator to be#ong to Emigdio rather than to e-c#ude !ro!erties that cou#d turn out in the end to be actua##y !art of the estate. )s #ong as the +T commits no !atent grave abuse of discretion, its orders must be res!ected as !art of the regu#ar !erformance of its ;udicia# duty.
