G.R. No. 156407 – 713 SCRA 194 – 724 Phil. 174 – Remedial Law – Special Proceedings – Settlement of Estate – Jurisdiction of the Probate Court; The probate court is authorized to determine the issue of ownership of properties for purposes of their inclusion or exclusion from the inventory
Order excluding or including properties to the estate inventory is interlocutory; An interlocutory order is not appealable but may be subject to certiorari under Rule 65 if tainted with grave abuse of discretion or issued without jurisdiction
In 1991, Emigdio Mercado died. Later, a special proceedings case was had to settle his estate. His widow, Teresita Mercado was appointed as the administrator of the estate. In 1992, Teresita submitted an inventory of the estate but it only included personal properties. Thelma Aranas, one of the children of Emigdio in his first family, opposed the approval of the inventory on the ground that a real property was excluded.
In her defense, Teresita explained that the real property in question was already sold in 1989 and that the title over the said property was already under a corporation.
The RTC ruled in favor of the opposition of Thelma. The RTC then issued an order including the real property into the estate inventory.
Teresita filed a certiorari case under Rule 65 against the order of the judge on the ground that the same was tainted with grave abuse of discretion. Teresita argued that the probate court cannot ignore the fact that the real property has long been sold to the corporation and the corporation (third party) is already in possession of the real property. The Court of Appeals ruled in favor of Teresita.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. Section 1, Rule 83 of the Rules of Court requires the inclusion of all the real and personal properties of the decedent in the inventory. However, the word all is qualified by the phrase which has come into his possession or knowledge, which signifies that the properties must be known to the administrator to belong to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the phrase true inventory implies that no properties appearing to belong to the decedent can be excluded from the inventory, regardless of their being in the possession of another person or entity.
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. The patent rationale for this rule is that such court merely exercises special and limited jurisdiction. A probate court cannot adjudicate or determine title to properties claimed to be a part of the estate and which are claimed to belong to outside parties, not by virtue of any right of inheritance from the deceased but by title adverse to that of the deceased and his estate. All that the said court could do as regards said properties is to determine whether or not they should be included in the inventory of properties to be administered by the administrator. If there is no dispute, there poses no problem, but if there is, then the parties, the administrator, and the opposing parties have to resort to an ordinary action before a court exercising general jurisdiction for a final determination of the conflicting claims of title.
By way of exception:
- 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.
- 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.
SIDE ISSUE: Is the remedy of Teresita in questioning the order of inclusion issued by the RTC proper?
Yes. An order including or excluding a property into or from the estate inventory is an interlocutory order. As such, it is not final and may be subject to change throughout the proceedings. An interlocutory order is not subject to appeal. However, it may be subject to a petition for certiorari under Rule 65 of the Rules of Court if there are allegations of grave abuse of discretion amounting to lack of jurisdiction. In this case however, Teresita was not able to prove that the probate court acted with grave abuse of discretion.
