Ancheta vs. Guersey-Dalaygon

An ancillary administrator's failure to prove and apply the decedent's national law, resulting in a distribution contrary to the will and depriving an heir of successional rights, constitutes extrinsic fraud warranting the annulment of a final probate decree.

Spouses Audrey O’Neill and W. Richard Guersey were American citizens domiciled in Maryland, U.S.A., who resided in the Philippines for 30 years. Audrey died on July 29, 1979, leaving a will that bequeathed her entire estate to Richard. Richard subsequently married respondent Candelaria Guersey-Dalaygon in 1981, with whom he had two children. Richard died on July 20, 1984, bequeathing his entire estate to respondent, except for his rights and interests over A/G Interiors, Inc. shares, which he left to Kyle, his and Audrey's adopted daughter.

• Audrey's Estate: Audrey died in 1979, devising her entire estate to Richard. Her will was probated in Maryland and reprobated in the Philippines (Sp. Proc. No. 9625). Petitioner, as ancillary administrator, filed an inventory of Audrey's Philippine properties, including the Makati property, a Citibank account, and A/G Interiors shares.
• The Flawed Partition: In 1987, petitioner filed a motion to declare Richard and Kyle as heirs and submitted a project of partition applying Philippine succession law. Under this partition, Richard received a ¾ undivided interest in the Makati property, and Kyle received a ¼ undivided interest as her legitime. The trial court approved this partition in 1988 and ordered the Register of Deeds to issue a new title reflecting these shares.
• Richard's Estate: Richard died in 1984, leaving his estate to respondent, save for the A/G Interiors shares left to Kyle. In Sp. Proc. No. M-888, the ancillary administrator filed a project of partition allocating 2/5 of Richard's ¾ interest in the Makati property to respondent and 3/5 to Richard's children. Respondent opposed, citing Maryland law providing that a legacy passes the entire interest of the testator to the legatee. The trial court agreed and adjudicated Richard's entire ¾ interest to respondent in 1991.
• Annulment of Audrey's Estate Orders: Realizing that petitioner's application of Philippine law in Audrey's estate deprived her of the entire Makati property, respondent filed a complaint for annulment of judgment with the CA in 1993, targeting the 1988 RTC orders in Sp. Proc. No. 9625.

• Finality of Judgment: Petitioner argued that the 1988 RTC orders are final, executory, and fully implemented, precluding annulment.
• Good Faith and Absence of Fraud: Petitioner maintained that he acted in good faith, lacking knowledge of Maryland law, and merely presumed it to be the same as Philippine law; thus, no extrinsic or intrinsic fraud was committed.
• Prescription: Petitioner contended that respondent's cause of action prescribed because she knew the terms of Audrey's will as early as 1984 but filed the complaint only in 1993.

• Extrinsic Fraud: Respondent countered that petitioner's breach of fiduciary duty as ancillary administrator—failing to apply the terms of Audrey's will and Maryland law—amounted to extrinsic fraud.
• Lack of Opportunity to Oppose: Respondent argued she was not a party to Sp. Proc. No. 9625 and had no opportunity to oppose the project of partition; she only discovered the ramifications of petitioner's omission in 1991 during the partition of Richard's estate.

• Extrinsic Fraud: Whether the ancillary administrator's failure to prove and apply the decedent's national law, resulting in a distribution contrary to the will, constitutes extrinsic fraud warranting the annulment of a final judgment.
• Prescription: Whether the action for annulment of judgment has prescribed given the respondent's prior knowledge of the will's terms.

• Extrinsic Fraud: Extrinsic fraud was established because the ancillary administrator's failure to prove and apply the decedent's national law prevented a fair submission of the case and deprived the respondent of her successional rights. The fiduciary nature of the administrator's position, combined with the resultant frustration of the decedent's will, creates a circumstance tantamount to extrinsic fraud, even if the omission was not maliciously intended. The administrator's duty was to distribute the estate according to the will and Maryland law under Article 16 of the Civil Code, not to apply Philippine law to benefit the adopted daughter.
• Prescription: The action has not prescribed. The prescriptive period for annulment based on extrinsic fraud runs from the discovery of the fraudulent act. The fraud complained of was not respondent's knowledge of the will's terms, but petitioner's failure to introduce Maryland law. Respondent discovered this fraud only in 1991 during the proceedings in Sp. Proc. No. M-888, making the 1993 filing timely.

• Extrinsic Fraud in Annulment of Judgment — Fraud that prevents a party from having a day in court or presenting their case, such as an ancillary administrator's failure to prove foreign law, which results in a judgment procured without a fair submission of the real issues. The overriding consideration is that the fraudulent scheme prevented a party from having their day in court.
• National Law Principle in Succession — Under Article 16 of the Civil Code, the intrinsic validity of testamentary provisions and successional rights is governed by the national law of the decedent, whatever may be the nature of the property and regardless of the country wherein said property is found. Philippine rules on legitimes do not extend to the succession of foreign nationals.

• "While such breach of duty admittedly cannot be considered extrinsic fraud under ordinary circumstances, the fiduciary nature of the said defendant’s position, as well as the resultant frustration of the decedent’s last will, combine to create a circumstance that is tantamount to extrinsic fraud." — Articulates the standard for finding extrinsic fraud in the context of a fiduciary's breach of duty in probate proceedings.
• "A will is the testator speaking after death. Its provisions have substantially the same force and effect in the probate court as if the testator stood before the court in full life making the declarations by word of mouth as they appear in the will." — Underscores the imperative of respecting the testator's intent over the administrator's personal notions of equity.

• Cosmic Lumber Corporation v. Court of Appeals, 332 Phil. 948 (1996) — Followed for the definition of extrinsic fraud as a fraudulent act that prevents a party from having a real contest or fair submission of the controversy.
• Bellis v. Bellis, 126 Phil. 726 (1967) — Followed for the rule that the national law of the decedent governs successional rights, and Philippine public policy on legitimes does not extend to foreign nationals.
• Bohanan v. Bohanan, 106 Phil. 997 (1960) — Followed for the principle that courts may take judicial notice of a foreign law if it has been brought to record in related proceedings and is undisputed by the parties.

• Article 16, Civil Code — Governs the intrinsic validity of testamentary provisions and successional rights by the national law of the decedent. Applied to mandate that Maryland law, not Philippine law, should govern the distribution of Audrey's estate.
• Section 9(2), Batas Pambansa Blg. 129 — Provides the jurisdictional basis for the Court of Appeals to annul judgments obtained by extrinsic fraud. Applied to justify the CA's annulment of the 1988 RTC orders.
• Section 4, Rule 77, Rules of Court — Mandates that an estate allowed in the Philippines be disposed of according to the will, so far as such will may operate upon it. Applied to reinforce the ancillary administrator's duty to adhere to the terms of Audrey's will.

Artemio V. Panganiban, Consuelo Ynares-Santiago, Romeo J. Callejo, Sr., Minita V. Chico-Nazario.