G.R. No. L-25952 June 30, 1967
MARGARITA SALVADOR, in her own behalf and as Attorney-in-fact of CANDIDA SALVADOR, ET AL., petitioners, vs. THE HON. JUDGE ANDRES STA. MARIA, DOMINADOR CARDENAS, REMEDIOS CABRERA, ALBERTO M. K. JAMIR and SIMEON ENRIQUEZ, respondents.

FACTS

Celestino Salvador owned seven titled and two untitled parcels of land in Bigaa, Bulacan. In 1941, he executed a deed of sale over them in favor of spouses Alfonso Salvador and Anatolia Halili. Alleging the sale was void for lack of consideration, Celestino filed a suit for reconveyance on May 12, 1955. Celestino died testate on April 27, 1956. Twenty-one alleged heirs were substituted as plaintiffs in the reconveyance action on May 18, 1956. Separate testate proceedings (Sp. Proc. No. 940) were instituted, wherein Dominador Cardenas was appointed special administrator (June 11, 1956) and later executor (September 7, 1956) of Celestino’s estate. The inventory filed in the testate proceedings included the same parcels of land. On November 26, 1956, the reconveyance court (CFI Br. I) ordered the defendants to reconvey the properties to the estate of Celestino Salvador. The Court of Appeals affirmed this judgment on August 12, 1961, but corrected it to order reconveyance in favor of the twenty-one substituted heirs. On April 21, 1964, the probate court (CFI Br. II) ordered the sale of one parcel, Lot 6, to pay estate debts. The Philippine National Bank (PNB) bought it for P41,184.00, which was deposited in the bank. On September 30, 1965, a new deed of reconveyance was executed in favor of the twenty-one persons as heirs. Subsequently, a new title (TCT No. 63734) was issued in their names. On December 7, 1965, the reconveyance court ordered PNB to release the P41,184.00 to the twenty-one plaintiffs. However, on March 30, 1966, the probate court ordered the passbook returned to the administrator and the PNB to release the funds to the administrator to pay approved estate debts totaling P38,872.58. The twenty-one substituted heirs filed this certiorari action to assail the probate court’s order and its power over the reconveyed properties.

ISSUE

1. Are the parcels of land and the proceeds from the sale of one of them properties of the estate or not?
2. Does the final judgment in the reconveyance suit in favor of the twenty-one substituted heirs bar the disposition of the reconveyed properties by the settlement (probate) court?

RULING

1. Yes, the parcels of land and the sale proceeds are properties of the estate. The petitioners’ claim of ownership is based solely on their status as heirs of Celestino Salvador. The reconveyance to them was a reconveyance to them as his heirs. Therefore, the properties they claim are part of Celestino’s estate. Their receipt of the properties in the reconveyance action was perforce in trust for the estate, subject to its obligations.
2. No, the final reconveyance judgment does not bar the probate court from disposing of the properties to pay estate debts. The right of heirs to specific distributive shares does not become finally determinable until all estate debts are paid. Until then, their rights are inchoate and subject to the existence of a residue after debt payment. The petitioners cannot distribute the properties among themselves without the estate’s debts being satisfied first. The question of each heir’s share is properly determinable by the settlement court after payment of debts.
Wherefore, the petition for certiorari is denied.