Emigdio S. Mercado (Emigdio) died intestate, survived by his second wife, Teresita V. Mercado (Teresita), and their five children; and his two children by his first marriage, namely: respondent Franklin L. Mercado and petitioner Thelma M. Aranas (Thelma).
Emigdio inherited and acquired real properties during his lifetime. He owned corporate shares in Mervir Realty and Cebu Emerson. He assigned his real properties in exchange for corporate stocks of Mervir Realty, and sold his real property in Badian, Cebu to Mervir Realty.
On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the appointment of Teresita as the administrator of Emigdio’s estate. The RTC granted the petition considering that there was no opposition. The letters of administration in favor of Teresita were issued on September 7, 1992.
As the administrator, Teresita submitted an inventory of the estate of Emigdio for consideration and approval by the RTC. Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved that the RTC direct Teresita to amend the inventory, and to be examined regarding it. The RTC granted Thelma’s motion. Teresita filed a compliance with the order supporting her inventory. Thelma again moved to require Teresita to be examined under oath on the inventory, and that she (Thelma) be allowed 30 days within which to file a formal opposition to or comment on the inventory and the supporting documents Teresita had submitted.
The RTC issued an order expressing the need for the parties to present evidence and for Teresita to be examined to enable the court to resolve the motion for approval of the inventory. Thelma opposed the approval of the inventory and asked leave of court to examine Teresita on the inventory. With the parties agreeing to submit themselves to the jurisdiction of the court on the issue of what properties should be included in or excluded from the inventory, the RTC set dates for the hearing on that issue.
The RTC denies the administratrix’s motion for approval of inventory and orders the said administratrix to re-do the inventory of properties which are supposed to constitute as the estate of the late Emigdio S. Mercado by including therein the properties mentioned in the last five immediately preceding paragraphs hereof and then submit the revised inventory within sixty (60) days from notice of this order.
The Court also directs the said administratrix to render an account of her administration of the estate of the late Emigdio S. Mercado which had come to her possession. She must render such accounting within sixty (60) days from notice hereof.
Alleging that the RTC thereby acted with grave abuse of discretion in refusing to approve the inventory, and in ordering her as administrator to include real properties that had been transferred to Mervir Realty, Teresita, joined by her four children and her stepson Franklin, assailed the adverse orders of the RTC by petition for certiorari.
The CA partly granted the said petition. CA ruled that the RTC erred when it ruled that petitioners are estopped from questioning its jurisdiction considering that they have already agreed to submit themselves to its jurisdiction of determining what properties are to be included in or excluded from the inventory to be submitted by the administratrix, because actually, a reading of petitioners’ Motion for Reconsideration dated March 26, 2001 filed before public respondent court clearly shows that petitioners are not questioning its jurisdiction but the manner in which it was exercised for which they are not estopped, since that is their right, considering that there is grave abuse of discretion amounting to lack or in excess of limited jurisdiction when it issued the assailed Order dated March 14, 2001 denying the administratrix’s motion for approval of the inventory of properties which were already titled and in possession of a third person that is, Mervir Realty Corporation, a private corporation, which under the law possessed a personality distinct and separate from its stockholders, and in the absence of any cogency to shred the veil of corporate fiction, the presumption of conclusiveness of said titles in favor of Mervir Realty Corporation should stand undisturbed.
Whether the RTC as a probate court may provisionally pass upon in an intestate or a testate proceeding the question of ownership.
Yes. The general rule is that the jurisdiction of the trial court, either as a probate court or an intestate court, relates only to matters having to do with the probate of the will and/or settlement of the estate of deceased persons, but does not extend to the determination of questions of ownership that arise during the proceedings.
However, this general rule is subject to exceptions as justified by expediency and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice to final determination of ownership in a separate action.
Second, if the interested parties are all heirs to the estate, or the question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and the rights of third parties are not impaired, then the probate court is competent to resolve issues on ownership. Verily, its jurisdiction extends to matters incidental or collateral to the settlement and distribution of the estate, such as the determination of the status of each heir and whether the property in the inventory is conjugal or exclusive property of the deceased spouse.
The probate court is authorized to determine the issue of ownership of properties for purposes of their inclusion or exclusion from the inventory to be submitted by the administrator, but its determination shall only be provisional unless the interested parties are all heirs of the decedent, or the question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and the rights of third parties are not impaired. Its jurisdiction extends to matters incidental or collateral to the settlement and distribution of the estate, such as the determination of the status of each heir and whether property included in the inventory is the conjugal or exclusive property of the deceased spouse.