Cortes vs. Court of Appeals

A probate court may determine questions of ownership and possession of property claimed as part of the estate when all the parties are heirs of the decedent and the occupant's claim is not adverse to but merely asserts co-ownership with the decedent; nevertheless, where both spouses have died, the conjugal partnership must be liquidated in the probate proceedings before the estate of the deceased spouse is settled.

Milagros A. Cortes, Menandro A. Reselva, and Florante Reselva are siblings and compulsory heirs of the late spouses Teodoro T. Reselva and Lucrecia Aguirre Reselva. The estate included a house and lot at 173 Ilaw St., Balut, Tondo, Manila. Teodoro left a holographic will, and Milagros was appointed executrix in the probate proceedings. The case concerns the authority of a probate court, under Rule 73, Section 2 of the Revised Rules of Court, to resolve possession and ownership questions over property claimed as part of the estate and to liquidate the conjugal partnership of the deceased spouses.

Milagros A. Cortes, Menandro A. Reselva, and Florante Reselva are siblings and the children and heirs of the late spouses Teodoro T. Reselva and Lucrecia Aguirre Reselva. During their lifetime, Teodoro and Lucrecia acquired a house and lot of about 100 square meters at 173 Ilaw St., Balut, Tondo, Manila. Lucrecia died on May 13, 1987, ahead of Teodoro, who died on April 11, 1989.

Teodoro left a holographic will, which was probated on July 31, 1991, and Milagros was appointed executrix. After qualifying, Milagros filed a motion in the probate court asking that Menandro, who occupied the property, be ordered to vacate it and turn over possession to her as executrix. The probate court granted the motion on October 18, 1993, ordering Menandro and all those acting for or through him to vacate the house and lot and deliver possession, as well as the owner's duplicate certificate of title, to Milagros.

Menandro refused to vacate the house and lot, which was being eyed as part of Teodoro's estate. He is one of the three compulsory heirs of Teodoro, and his position was that he was a co-owner with the decedent, not that he held title adverse to the estate.

• Probate Court Jurisdiction Over Possession and Title: Whether the probate court exceeded its limited jurisdiction when it ordered Menandro A. Reselva, a compulsory heir occupying the property, to vacate and deliver possession and the owner's duplicate certificate of title to the executrix.
• Exception for All Heirs and Co-ownership Claim: Whether the probate court may decide the question of ownership and possession when all the parties are heirs of the decedent and the occupant's claim is not adverse but asserts co-ownership with the decedent.
• Liquidation of Conjugal Partnership: Whether the conjugal partnership of the deceased spouses must be liquidated in the probate proceedings before the estate of the deceased husband is settled.

• Probate Court Jurisdiction Over Possession and Title: No. The probate court did not exceed its jurisdiction in the circumstances; it was competent to decide the question of ownership because Menandro was a compulsory heir, not an outside party, and his claim merely advanced co-ownership with the decedent.
• Exception for All Heirs and Co-ownership Claim: Yes. When the parties are all heirs of the decedent, they may submit the question of title to the probate court, which is competent to decide ownership, especially where a separate action would be expensive and inexpedient.
• Liquidation of Conjugal Partnership: Yes. Under Rule 73, Section 2 of the Revised Rules of Court, if both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either; the case was remanded for that purpose before settlement of Teodoro's estate.

• Probate Court Jurisdiction Over Possession and Title: The long-standing rule limits probate courts from adjudicating title to properties claimed as part of the estate and claimed by outside parties; claims by heirs themselves by title adverse to the deceased, or by third persons, cannot be entertained. However, Menandro cannot be considered an outside party because he is one of three compulsory heirs of Teodoro. As such, he is involved in the settlement of the estate. His claim is not adverse to or in conflict with the decedent because his theory merely advances co-ownership with the latter. Therefore, the probate court was competent to decide the question of ownership. The Court also noted that this is more so when the opposing parties belong to the poor stratum of society and a separate action would be most expensive and inexpedient.
• Exception for All Heirs and Co-ownership Claim: By way of exception, when the parties are all heirs of the decedent, it is optional upon them to submit to the probate court the question of title to property. Here, the parties are all heirs, and Menandro's claim is not adverse but asserts co-ownership. Thus, the probate court had jurisdiction over the ownership question.
• Liquidation of Conjugal Partnership: When the controversy is whether the property belongs to the conjugal partnership or exclusively to the decedent, the matter is properly within the jurisdiction of the probate court, which necessarily has to liquidate the conjugal partnership to determine the estate of the decedent to be distributed among the heirs. Rule 73, Section 2 provides that if both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either. Because both Teodoro and Lucrecia died, their conjugal partnership must be liquidated in the probate proceedings prior to the settlement of Teodoro's estate. The Court cited Vita vs. Montanano, where it was held that no separate proceeding is necessary for the proper disposition of the estate and that the conjugal partnership should be liquidated in the testate proceedings of the deceased spouse. Consequently, the case was remanded to the probate court for liquidation of the conjugal partnership before settlement of Teodoro's estate.

• Probate Court's Limited Jurisdiction Over Title and Possession — General rule: probate courts, whether in testate or intestate proceedings, cannot adjudicate or determine title to properties claimed to be part of the estate and claimed to belong to outside parties. Claims for title to, or right of possession of, personal or real property made by heirs themselves by title adverse to the deceased, or by third persons, cannot be entertained by the probate court. In this case, the Court recognized the rule but found it inapplicable because Menandro was not an outside party.
• Exception Where All Parties Are Heirs — When the parties are all heirs of the decedent, it is optional upon them to submit to the probate court the question of title to property. The probate court is then competent to decide the question of ownership. The Court applied this exception because Menandro was a compulsory heir and his claim merely advanced co-ownership with the decedent, not an adverse title. The Court also considered that the opposing parties belonged to the poor stratum of society and that a separate action would be most expensive and inexpedient.
• Probate Court's Jurisdiction Over Conjugal Partnership Liquidation — When the controversy is whether the property in issue belongs to the conjugal partnership or exclusively to the decedent, the matter is properly within the jurisdiction of the probate court, which necessarily has to liquidate the conjugal partnership to determine the estate of the decedent to be distributed among the heirs. Under Rule 73, Section 2 of the Revised Rules of Court, if both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either. The Court applied this rule because both Teodoro and Lucrecia had died, requiring liquidation of their conjugal partnership in the probate proceedings before settlement of Teodoro's estate.

• "The long standing rule is that probate courts, or those in charge of proceedings whether testate or intestate, cannot adjudicate or determine title to properties claimed to be part of the estate and which are claimed to belong to outside parties." — This states the general rule on the limited jurisdiction of probate courts over title and possession disputes involving outside parties.
• "By way of exception to the above-mentioned rule, 'when the parties are all heirs of the decedent, it is optional upon them to submit to the probate court the question of title to property.'" — This articulates the exception applied by the Court because Menandro was a compulsory heir and not an outside party.
• "In the same way, when the controversy is whether the property in issue belongs to the conjugal partnership or exclusively to the decedent, the same is properly within the jurisdiction of the probate court, which necessarily has to liquidate the conjugal partnership in order to determine the estate of the decedent which is to be distributed among the heirs." — This explains why the probate court had jurisdiction over the conjugal partnership issue.
• "Consequently, this case before us should be returned to the probate court for the liquidation of the conjugal partnership of Teodoro and Lucrecia Reselva prior to the settlement of the estate of Teodoro." — This is the ratio for the remand to the probate court for further proceedings.

• Sanchez vs. Court of Appeals, 279 SCRA 647, 672-673 [1997] — Cited for the long-standing rule that probate courts cannot adjudicate title to properties claimed to be part of the estate and claimed by outside parties.
• Sebial vs. Sebial, 64 SCRA 385, 392 [1962] — Cited for the exception that when the parties are all heirs of the decedent, it is optional upon them to submit the question of title to the probate court.
• Coca vs. Borromeo, 81 SCRA 278, 283-284 [1978] — Cited for the proposition that the probate court is competent to decide ownership, more so when the opposing parties belong to the poor stratum of society and a separate action would be most expensive and inexpedient.
• Bernardo vs. Court of Appeals, 7 SCRA 367, 372 [1963] — Cited for the rule that when the controversy is whether the property belongs to the conjugal partnership or exclusively to the decedent, the matter is within the probate court's jurisdiction.
• Vita vs. Montanano, 194 SCRA 180, 189 [1991] — Cited for the rule under Rule 73, Section 2 that if both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either, and no separate proceeding is necessary for the proper disposition of the estate.

• Rule 73, Section 2, Revised Rules of Court — 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. The Court applied this provision because both Teodoro and Lucrecia Reselva had died, requiring liquidation of their conjugal partnership in the probate proceedings before the settlement of Teodoro's estate.

Justices Bellosillo (Chairman), Mendoza, Quisumbing, and De Leon, Jr. concurred.