FIRST DIVISION

[G.R. No. 125835. July 30, 1998.]

NATALIA CARPENA OPULENCIA, petitioner, vs. COURT OF
APPEALS, ALADIN SIMUNDAC and MIGUEL OLIVAN, respondents.

Padlan, Sutton & Associates for petitioner.

Gilbert S. Obmina for private respondent.
SYNOPSIS
Petitioner Opulencia executed in favor of private respondents a "Contract to Sell"
covering a piece of land, for which petitioner received P300,000.00 as
downpayment. Petitioner having failed to comply with her obligations under the
contract, private respondents filed a complaint for specific performance. Petitioner
put forward the defense that the property subject of the contract formed part of the
Estate of Demetrio Carpena, petitioner's father, in respect of which a petition for
probate was filed with the RTC of Bian, Laguna.
The trial court dismissed the complaint because the Contract to Sell was null and
void for want of approval by the probate court, in violation of Sec. 7, Rule 89 of the
Rules of Court. On appeal, the Court of Appeals set aside the trial court's dismissal of
the complaint. Hence, this petition.
As correctly ruled by the Court of Appeals, Sec. 7 of Rule 89 of the Rules of Court is
not applicable, because petitioner entered into the Contract to Sell in her capacity as
an heiress, not as an executrix or administratrix of the estate. In the contract, she
represented herself as the "lawful owner" and seller of the subject parcel of land.
These representations clearly evince that she was not acting on behalf of the estate
under probate when she entered into the Contract to Sell.
Although the Contract to Sell was perfected during the pendency of the probate
proceedings, the consummation of the sale is subject to the full payment of the
purchase price and to the termination and outcome of the testate proceedings.
Hence, there is no basis for petitioner's apprehension that the Contract to Sell may
result in a premature partition and distribution of the estate.
SYLLABUS
1. CIVIL LAW; CONTRACT; SALES; CONTRACT TO SELL ENTERED INTO BY
PETITIONER AS HEIRESS, NOT AS AN EXECUTRIX OR ADMINISTRATRIX. As
correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the Rules of Court is
not applicable, because petitioner entered into the Contract to Sell in her capacity as
an heiress, not as an executrix or administratrix of the estate. In the contract, she

represented herself as the "lawful owner" and seller of the subject parcel of land.
She also explained the reason for the sale to be "difficulties in her living" conditions
and consequent "need of cash." These representations clearly evince that she was
not acting on behalf of the estate under probate when she entered into the Contract
to Sell.
2. ID.; WILLS AND SUCCESSION; HEREDITARY RIGHTS ARE VESTED IN THE HEIRS
FROM THE MOMENT OF THE DECEDENT'S DEATH. We emphasize that hereditary
rights are vested in the heir or heirs from the moment of the decedent's death.
Petitioner, therefore, became the owner of her hereditary share the moment her
father died. Thus, the lack of judicial approval does not invalidate the Contract to
Sell, because the petitioner has the substantive right to sell the whole or a part of
her share in the estate of her late father.
3. ID.; ADMINISTRATION OF THE ESTATE NOT PREJUDICED BY THE CONTRACT TO
SELL. The Contract to Sell stipulates that petitioner's offer to sell is contingent on
the "complete clearance of the court on the Last Will Testament of her father."
Consequently, although the Contract to Sell was perfected between the petitioner
and private respondents during the pendency of the probate proceedings, the
consummation of the sale or the transfer of ownership over the parcel of land to the
private respondents is subject to the full payment of the purchase price and to the
termination and outcome of the testate proceedings. Therefore, there is no basis for
petitioner's apprehension that the Contract to Sell may result in a premature
partition and distribution of the properties of the estate.
DECISION
PANGANIBAN, J :
p

Is a contract to sell a real property involved in testate proceedings valid and binding
without the approval of the probate court?
cda

Statement of the Case

This is the main question raised in this petition for review before us, assailing the
Decision 1 of the Court of Appeals 2 in CA-GR CV No. 41994 promulgated on
February 6, 1996 and its Resolution 3 dated July 19, 1996. The challenged Decision
disposed as follows:
"WHEREFORE, premises considered, the order of the lower court dismissing
the complaint is SET ASIDE and judgment is hereby rendered declaring the
CONTRACT TO SELL executed by appellee in favor of appellants as valid and
binding, subject to the result of the administration proceedings of the
testate Estate of Demetrio Carpena.
SO ORDERED." 4

Petitioner's Motion for Reconsideration was denied in the challenged Resolution. 5

The Facts
The antecedent facts, as succinctly narrated by Respondent Court of Appeals, are:
"In a complaint for specific performance filed with the court a quo [herein
private respondents] Aladin Simundac and Miguel Oliven alleged that [herein
petitioner] Natalia Carpena Opulencia executed in their favor a "CONTRACT
TO SELL" Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square
meters located in Sta. Rosa, Laguna at P150.00 per square meter; that
plaintiffs paid a downpayment of P300,000.00 but defendant, despite
demands, failed to comply with her obligations under the contract. [Private
respondents] therefore prayed that [petitioner] be ordered to perform her
contractual obligations and to further pay damages, attorney's fee and
litigation expenses.
In her traverse, [petitioner] admitted the execution of the contract in favor
of plaintiffs and receipt of P300,000.00 as downpayment. However, she put
forward the following affirmative defenses: that the property subject of the
contract formed part of the Estate of Demetrio Carpena (petitioner's father),
in respect of which a petition for probate was filed with the Regional Trial
Court, Branch 24, Bian, Laguna; that at the time the contract was
executed, the parties were aware of the pendency of the probate
proceeding; that the contract to sell was not approved by the probate court;
that realizing the nullity of the contract [petitioner] had offered to return the
downpayment received from [private respondents], but the latter refused to
accept it; that [private respondents] further failed to provide funds for the
tenant who demanded P150,00.00 in payment of his tenancy rights on the
land; that [petitioner] had chosen to rescind the contract.
At the pre-trial conference the parties stipulated on [sic] the following facts:
1. That on February 3, 1989, [private respondents] and [petitioner]
entered into a contract to sell involving a parcel of land situated in Sta.
Rosa, Laguna, otherwise known as Lot No. 2125 of the Sta. Rosa
Estate.
2. That the price or consideration of the said sell [sic] is P150.00 per
square meters;
3. That the amount of P300,000.00 had already been received by
[petitioner];
4. That the parties have knowledge that the property subject of the
contract to sell is subject of the probate proceedings;
5. That [as] of this time, the probate Court has not yet issued an
order either approving or denying the said sale. (p. 3, appealed Order
of September 15, 1992, pp. 109-112, record).

[Private respondents] submitted their evidence in support of the material

allegations of the complaint. In addition to testimonies of witnesses, [private
respondents] presented the following documentary evidences: (1) Contract
to Sell (Exh A); (2) machine copy of the last will and testament of Demetrio
Carpena (defendant's father) to show that the property sold by defendant
was one of those devised to her in said will (Exh B); (3) receipts signed by
defendant for the downpayment in the total amount of P300,000.00 (Exhs
C, D & E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her evidence, filed a
Demurrer to Evidence. In essence, defendant maintained that the contract
to sell was null and void for want of approval by the probate court. She
further argued that the contract was subject to a suspensive condition,
which was the probate of the will of defendant's father Demetrio Carpena.
An Opposition was filed by [private respondents]. It appears further that in
an Order dated December 15, 1992 the court a quo granted the demurrer
to evidence and dismissed the complaint. It justified its action in dismissing
the complaint in the following manner:
It is noteworthy that when the contract to sell was consummated, no
petition was filed in the Court with notice to the heirs of the time and
place of hearing, to show that the sale is necessary and beneficial. A
sale of properties of an estate as beneficial to the interested parties
must comply with the requisites provided by law, (Sec. 7, Rule 89,
Rules of Court) which are mandatory, and without them, the authority
to sell, the sale itself, and the order approving it, would be null and
void ab initio. (Arcilla vs. David, 77 Phil. 718, Gabriel, et al., vs.
Encarnacion, et al., L-6736, May 4, 1954; Bonaga vs. Soler, 2 Phil.
755) Besides, it is axiomatic that where the estate of a deceased
person is already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it without
prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123
SCRA 767).
As held by the Supreme Court, a decedent's representative
(administrator) is not estopped from questioning the validity of his
own void deed purporting to convey land. (Bona vs. Soler, 2 Phil, 755).
In the case at bar, the [petitioner,] realizing the illegality of the
transaction[,] has interposed the nullity of the contract as her
defense, there being no approval from the probate Court, and, in
good faith offers to return the money she received from the [private
respondents]. Certainly, the administratrix is not estop[ped] from
doing so and the action to declare the inexistence of contracts do not
prescribe. This is what precipitated the filing of [petitioner's] demurrer
to evidence." 6

The trial court's order of dismissal was elevated to the Court of Appeals by private
respondents who alleged:

"1. The lower court erred in concluding that the contract to sell is null and
void, there being no approval of the probate court.
2. The lower court erred in concluding that [petitioner] in good faith offers to
return the money to [private respondents].
3. The lower court erred in concluding that [petitioner] is not under estoppel
to question the validity of the contract to sell.
4. The lower court erred in not ruling on the consideration of the contract to
sell which is tantamount to plain unjust enrichment of [petitioner] at the
expense of [private respondents]." 7

Public Respondent's Ruling

Declaring the Contract to Sell valid, subject to the outcome of the testate
proceedings on Demetrio Carpena's estate, the appellate court set aside the trial
court's dismissal of the complaint and correctly ruled as follows:
"It is apparent from the appealed order that the lower court treated the
contract to sell executed by appellee as one made by the administratrix of
the Estate of Demetrio Carpena for the benefit of the estate. Hence, its main
reason for voiding the contract in question was the absence of the probate
court's approval. Presumably, what the lower court had in mind was the sale
of the estate or part thereof made by the administrator for the benefit of the
estate, as authorized under Rule 89 of the Revised Rules of Court, which
requires the approval of the probate court upon application therefor with
notice to the heirs, devisees and legatees.
However, as adverted to by appellants in their brief, the contract to sell in
question is not covered by Rule 89 of the Revised Rules of Court since it was
made by appellee in her capacity as an heir, of a property that was devised
to her under the will sought to be probated. Thus, while the document
inadvertently stated that appellee executed the contract in her capacity as
"executrix and administratrix" of the estate, a cursory reading of the entire
text of the contract would unerringly show that what she undertook to sell
to appellants was one of the "other properties given to her by her late
father," and more importantly, it was not made for the benefit of the estate
but for her own needs. To illustrate this point, it is apropos to refer to the
preambular or preliminary portion of the document, which reads:
cdasia

WHEREAS, the SELLER is the lawful owner of a certain parcel of land,

which is more particularly described as follows:
xxx xxx xxx
WHEREAS, the SELLER suffers difficulties in her living and has forced
to offer the sale of the above-described property, "which property
was only one among the other properties given to her by her late
father," to anyone who can wait for complete clearance of the court
on the Last Will Testament of her father.

WHEREAS, the SELLER in order to meet her need of cash, has offered
for sale the said property at ONE HUNDRED FIFTY PESOS (150.00)
Philippine Currency, per square meter unto the BUYERS, and with this
offer, the latter has accepted to buy and/or purchase the same, less
the area for the road and other easements indicated at the back of
Transfer Certificate of Title No. 2125 duly confirmed after the survey
to be conducted by the BUYER's Licensed Geodetic Engineer, and
whatever area [is] left. (Emphasis added).
To emphasize, it is evident from the foregoing clauses of the contract that
appellee sold Lot 2125 not in her capacity as executrix of the will or
administratrix of the estate of her father, but as an heir and more
importantly as owner of said lot which, along with other properties, was
devised to her under the will sought to be probated. That being so, the
requisites stipulated in Rule 89 of the Revised Rules of Court which refer to a
sale made by the administrator for the benefit of the estate do not apply.
xxx xxx xxx
It is noteworthy that in a Manifestation filed with this court by appellants,
which is not controverted by appellee, it is mentioned that the last will and
testament of Demetrio Carpena was approved in a final judgment rendered
in Special Proceeding No. B-979 by the Regional Trial Court, Branch 24
Bian, Laguna. But of course such approval does not terminate the
proceeding[s] since the settlement of the estate will ensue. Such
proceedings will consist, among others, in the issuance by the court of a
notice to creditors (Rule 86), hearing of money claims and payment of taxes
and estate debts (Rule 88) and distribution of the residue to the heirs or
persons entitled thereto (Rule 90). In effect, the final execution of the deed
of sale itself upon appellants' payment of the balance of the purchase price
will have to wait for the settlement or termination of the administration
proceedings of the Estate of Demetrio Carpena. Under the foregoing
premises, what the trial court should have done with the complaint was not
to dismiss it but to simply put on hold further proceedings until such time
that the estate or its residue will be distributed in accordance with the
approved will.
The rule is that when a demurrer to the evidence is granted by the trial court
but reversed on appeal, defendant loses the right to adduce his evidence. In
such a case, the appellate court will decide the controversy on the basis of
plaintiff's evidence. In the case at bench, while we find the contract to sell
valid and binding between the parties, we cannot as yet order appellee to
perform her obligations under the contract because the result of the
administration proceedings of the testate Estate of Demetrio Carpena has to
be awaited. Hence, we shall confine our adjudication to merely declaring the
validity of the questioned Contract to Sell."

Hence, this appeal. 8

The Issue

Petitioner raises only one issue:

"Whether or not the Contract to Sell dated 03 February 1989 executed by
the [p]etitioner and [p]rivate [r]espondent[s] without the requisite probate
court approval is valid."

The Court's Ruling

The petition has no merit.

Contract to Sell Valid

In a nutshell, petitioner contends that "where the estate of the deceased person is
already the subject of a testate or intestate proceeding, the administrator cannot
enter into any transaction involving it without prior approval of the Probate Court."
9 She maintains that the Contract to Sell is void because it was not approved by the
probate court, as required by Section 7, Rule 89 of the Rules of Court:
"SEC. 7. Regulations for granting authority to sell, mortgage, or otherwise
encumber estate. The court having jurisdiction of the estate of the
deceased may authorize the executor or administrator to sell, mortgage, or
otherwise encumber real estate, in cases provided by these rules and when
it appears necessary or beneficial, under the following regulations:
xxx xxx xxx"

Insisting that the above rule should apply to this case, petitioner argues that the
stipulations in the Contract to Sell require her to act in her capacity as an executrix
or administratrix. She avers that her obligation to eject tenants pertains to the
administratrix or executrix, the estate being the landlord of the said tenants. 10
Likewise demonstrating that she entered into the contract in her capacity as
executor is the stipulation that she must effect the conversion of subject land from
irrigated rice land to residential land and secure the necessary clearances from
government offices. Petitioner alleges that these obligations can be undertaken only
by an executor or administrator of an estate, and not by an heir. 11
The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of
Rule 89 of the Rules of Court is not applicable, because petitioner entered into the
Contract to Sell in her capacity as an heiress, not as an executrix or administratrix
of the estate. In the contract, she represented herself as the "lawful owner" and
seller of the subject parcel of land. 12 She also explained the reason for the sale to
be "difficulties in her living" conditions and consequent "need of cash." 13 These
representations clearly evince that she was not acting on behalf of the estate under
probate when she entered into the Contract to Sell. Accordingly, the jurisprudence
cited by petitioner has no application to the instant case.
We emphasize that hereditary rights are vested in the heir or heirs from the
moment of the decedent's death. 14 Petitioner, therefore, became the owner of her
hereditary share the moment her father died. Thus, the lack of judicial approval
does not invalidate the Contract to Sell, because the petitioner has the substantive

right to sell the whole or a part of her share in the estate of her late father. 15 Thus,
in Jakosalem vs. Rafols, 16 the Court resolved an identical issue under the old Civil
Code and held:
"Article 440 of the Civil Code provides that 'the possession of hereditary
property is deemed to be transmitted to the heir without interruption from
the instant of the death of the decedent, in case the inheritance be
accepted.' And Manresa with reason states that upon the death of a person,
each of his heirs 'becomes the undivided owner of the whole estate left with
respect to the part or portion which might be adjudicated to him, a
community of ownership being thus formed among the co-owners of the
estate while it remains undivided.' . . . And according to article 399 of the
Civil Code, every part owner may assign or mortgage his part in the
common property, and the effect of such assignment or mortgage shall be
limited to the portion which may be allotted him in the partition upon the
dissolution of the community. Hence, where some of the heirs, without the
concurrence of the others, sold a property left by their deceased father, this
Court, speaking thru its then Chief Justice Cayetano Arellano, said that the
sale was valid, but that the effect thereof was limited to the share which may
be allotted to the vendors upon the partition of the estate."

Administration of the Estate Not

Prejudiced by the Contract to Sell
Petitioner further contends that "[t]o sanction the sale at this stage would bring
about a partial distribution of the decedent's estate pending the final termination of
the testate proceedings." 17 This becomes all the more significant in the light of the
trial court's finding, as stated in its Order dated August 20, 1997, that "the legitime
of one of the heirs has been impaired." 18
Petitioner's contention is not convincing. The Contract to Sell stipulates that
petitioner's offer to sell is contingent on the "complete clearance of the court on the
Last Will Testament of her father." 19 Consequently, although the Contract to Sell
was perfected between the petitioner and private respondents during the pendency
of the probate proceedings, the consummation of the sale or the transfer of
ownership over the parcel of land to the private respondents is subject to the full
payment of the purchase price and to the termination and outcome of the testate
proceedings. Therefore, there is no basis for petitioner's apprehension that the
Contract to Sell may result in a premature partition and distribution of the
properties of the estate. Indeed, it is settled that "the sale made by an heir of his
share in an inheritance, subject to the pending administration, in no wise stands in
the way of such administration." 20

Estoppel
Finally, petitioner is estopped from backing out of her representations in her valid
Contract to Sell with private respondents, from whom she had already received

P300,000 as initial payment of the purchase price. Petitioner may not renege on her
own acts and representations, to the prejudice of the private respondents who have
relied on them. 21 Jurisprudence teaches us that neither the law nor the courts will
extricate a party from an unwise or undesirable contract he or she entered into with
all the required formalities and with full awareness of its consequences. 22
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court
of Appeals AFFIRMED. Costs against petitioner.
SO ORDERED.

LexLib

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ ., concur.

Footnotes
1. Rollo, pp. 21-27.
2. Sixteenth Division composed of J . Godardo A. Jacinto, ponente; with the concurrence
of J . Salome A. Montoya, chairman; and J . Oswaldo D. Agcaoili, member.
3. Rollo, p. 29.
4. Decision, p. 8; Rollo, p. 27.
5. Rollo, p. 29.
6. Decision of the Court of Appeals, pp. 1-3; Rollo, pp. 21-23.
7. Appellants' Brief before the Court of Appeals, p. 1.
8. The case was deemed submitted for resolution on December 1, 1997 when the Court
received Petitioner's Memorandum.
9. Memorandum for the Petitioner, p. 7; Rollo, p. 81.
10. Petitioner's Memorandum, pp. 5-6; Rollo, pp. 79-80.
11. Ibid., p. 6; Rollo, p. 80.
12. Contract to Sell, p. 1; record, p. 5.
13. Ibid.
14. Art. 777, Civil Code, provides:
"The rights to the succession are transmitted from the moment of the
death of the decedent."
15. Go Ong vs . Court of Appeals , 154 SCRA 270, 276-277, September 24, 1987; and De
Borja vs . Vda. de Borja, 46 SCRA 577, 589, August 18, 1972.
16. 73 Phil. 628-629 (1942), per Moran, J .

17. Petitioner's Memorandum, p. 7; Rollo, p. 81.

18. Ibid.
19. Record, p. 5.
20. Go Ong vs . Court of Appeals , per Paras, J ., supra, p. 277; citing Jakosalem vs .
Rafols , 73 Phil 628 (1942).
21. Laureano Investment and Development Corporation vs . Court of Appeals , 272 SCRA
253, 263, May 6, 1997; citing Caltex (Philippines), Inc. vs . Court of Appeals , 212
SCRA 448, 457, August 10, 1992.
22. Esguerra vs . Court of Appeals , 267 SCRA 380, 393, February 3, 1997, citing Republic
vs . Sandiganbayan, 226 SCRA 314, September 10, 1993.