Jose Valero had two daughters from his first marriage. They were Flora Valero and Rosie Valero. After his first wife died, Jose married Beatriz. Beatriz had an adopted child, Carmen who, with the permission of Jose, used the surname Valero.
Before he died, Jose executed a will where he bequeathed properties to Beatriz, Flora, and Rosie. Prior to executing the will, Jose however sold two parcels of lot to Carmen at a discounted price. Carmen had the lots titled in her name.
Jose died and his two daughters petitioned for the settlement of his estate. They moved for the inclusion (collation) to the estate of the two parcels of lot sold by Jose to Carmen. It was their argument that the sales were actually donations because the selling price was quite low and that the donated properties should be considered as advancements. The trial court and the Court of Appeals excluded the titled properties from the estate. The sisters are appealing the order of exclusion as they deemed the same as final and executory order.
ISSUE: Whether or not the arguments of Flora and Rosie are correct.
HELD: No. The order is merely interlocutory in the sense that it did not decide as to who between the sisters and Carmen are the rightful owners. As an interlocutory order, the same cannot be appealed. In fact, it was still premature for Flora and Rosie to question the exclusion. They can raise that issue later in the later part of the proceedings (or not at all for it could also be raised in a separate action).
The prevailing rule is that for the purpose of determining whether a certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which may be instituted by the parties.
The proceedings have not yet reached the stage when the question of collation or advancement to an heir may be raised and decided. The numerous debts of the decedents are still being paid. The net of the estate has not yet been determined. On the other hand, no separate action has been brought by the Flora and Rosie to nullify Carmen’s Torrens titles to the disputed lots or to show that the sale was in reality a donation.
SIDE ISSUE: Before Jose died, his wife Beatriz also died. Beatriz died intestate. May the settlement of estate of Beatriz be consolidated with Jose’s?
HELD: Yes. The consolidation is allowed under Sec. 2, Rule 73 which reads:
When the marriage is dissolved by the death of the husband or wife, the community property shall be inventoried, administered, and liquidated, and the debts thereof paid, in the testate or intestate proceedings of the deceased spouse. If both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either.