Heirs of Oscar R. Reyes vs. Cesar R. Reyes

A probate court may provisionally determine whether a property should be included in the inventory of the estate, but such determination is not conclusive and cannot finally adjudicate ownership, unless all parties with legal interest expressly or impliedly consent to the submission of the question to the probate court. Because the properties remained titled under the decedent and his spouse, and the parties did not consent to submit the ownership issue for final adjudication, the probate court correctly limited its ruling to the provisional inclusion of the properties.

Spouses Ismael and Felisa Reyes owned parcels of land in Cubao, Quezon City, covered by TCT Nos. 4983 and 3598. Ismael died intestate in 1973. Following his death, the Bureau of Internal Revenue levied and forfeited the property covered by TCT No. 4983 due to unpaid income tax deficiencies. Oscar Reyes, a son, redeemed the property in 1976 using his own funds and later settled real estate tax delinquencies on the Arayat properties in 1986.

• The Estate and Tax Delinquencies: Spouses Ismael and Felisa Reyes had seven children. Ismael died intestate on April 18, 1973. The BIR levied TCT No. 4983 for income tax deficiency and eventually forfeited it. In 1976, Oscar Reyes redeemed the property from the BIR for approximately P18,000. In 1986, Oscar Reyes settled the real estate tax delinquencies on the Arayat properties via an amnesty compromise agreement with the City Treasurer.
• Petition for Administration: On May 10, 1989, Cesar Reyes filed a petition for letters of administration, including the Arayat properties in the estate inventory. Oscar Reyes filed a conditional opposition, claiming ownership by redemption and purchase.
• Probate Court Proceedings: The probate court appointed Cesar Reyes as administrator and directed him to submit an inventory. Oscar objected to the inclusion of the Arayat properties. The probate court set a hearing for the parties to adduce evidence on whether the properties should be included in the inventory. The probate court explicitly limited the hearing's purpose to resolving the inventory.
• Probate Court Ruling: The probate court provisionally included one-half of the Arayat properties in the estate. It found that while Oscar's testimony had persuasive value, it was insufficient to warrant exclusion from the inventory. The court noted the lack of a specific document of transfer, the fact that the BIR levy only covered TCT No. 4983 and not TCT No. 3598, and its own lack of competence to finally adjudicate ownership.

• Petitioners maintained that the probate court has the competence to determine whether a property should be excluded from the inventory, and thus erred in including the Arayat properties despite evidence of Oscar's ownership.
• Petitioners argued that Oscar acquired ownership through redemption using his own funds and the co-heirs' abandonment of the properties.
• Petitioners contended that the exception to the probate court's limited jurisdiction applied because all parties were heirs and they submitted the issue of title to the probate court by presenting evidence.
• Petitioners claimed that private respondent was barred from claiming the properties due to delay, having filed the petition 16 years after Ismael's death.

• Respondent countered that the probate court's provisional inclusion of the properties in the inventory was within its jurisdiction.
• Respondent argued that the exception to the limited jurisdiction rule did not apply because not all parties with legal interest consented to the probate court's final adjudication of ownership.
• Respondent alleged that the petition was filed one day late and should be dismissed.

• Procedural Issues:
  • Whether the petition for review was filed out of time.
• Substantive Issues:
  • Whether the probate court correctly included one-half of the Arayat properties in the inventory of the estate of Ismael Reyes.
  • Whether the probate court has jurisdiction to conclusively determine the issue of ownership of the properties.

• Procedural: The Court found the petition timely. Petitioners received the denial of their motion for reconsideration on August 13, 1999, giving them until August 28, 1999 to file a petition. They filed a motion for extension on August 27, 1999, which the Court granted, extending the period to September 27, 1999. The petition filed on September 27, 1999 was within the reglementary period.
• Substantive: The Court ruled that the probate court correctly included the properties provisionally and lacked jurisdiction to conclusively determine ownership. The probate court's determination of title for inventory purposes is merely provisional and not conclusive. The exception allowing conclusive determination requires the consent of all parties with legal interest, which was absent here; the parties presented evidence only for the purpose of resolving the inventory, not for final adjudication of title. Furthermore, the properties remained titled under the Torrens system in the names of the spouses, and Oscar's evidence of transfer or abandonment was inconclusive and lacked a specific document of transfer.

• Provisional Determination of Title by Probate Court — A probate court may pass upon the title to property for the limited purpose of determining whether it should be included in or excluded from the inventory of the estate. Such determination is provisional and not conclusive, and is subject to the final decision in a separate action to resolve title. The Court applied this doctrine to uphold the probate court's inclusion of the Arayat properties in the inventory without prejudice to a subsequent action for ownership.
• Exception to the Limited Jurisdiction of Probate Courts — A probate court may conclusively determine the issue of title to property if the claimant and all other parties having legal interest in the property consent, expressly or impliedly, to the submission of the question to the probate court for adjudgment, provided the interests of third persons are not thereby prejudiced. The Court held this exception inapplicable because not all interested parties consented to the final resolution of ownership, and evidence was presented solely for inventory purposes.

• "The question of ownership is as a rule, an extraneous matter which the Probate Court cannot resolve with finality."
• "[F]or the purpose of determining whether a certain property should or should not be included in the inventory of estate proceeding, the probate court may pass upon the title thereto, but such determination is provisional, not conclusive, and is subject to the final decision in a separate action to resolve title."

• Ramos vs. CA, 180 SCRA 635 — Cited for the rule that probate court jurisdiction relates to matters of estate settlement and probate of wills.
• Spouses Alvaro Pastor, Jr. vs. CA, 122 SCRA 885; Baybayan vs. Aquino, 149 SCRA 186 — Cited for the principle that ownership is an extraneous matter which the probate court cannot resolve with finality.
• Pereira vs. CA, 174 SCRA 154; Bolisay vs. Alcid, 85 SCRA 213 — Cited for the rule that probate court determination of title for inventory purposes is provisional.
• Trinidad vs. CA, 202 SCRA 106 — Cited for the exception that probate courts may resolve ownership if all interested parties consent.
• Baybayan vs. Aquino, 149 SCRA 186 — Cited within the probate court's quoted ruling that ownership must be submitted to the RTC in its general jurisdiction.
• Valera, et al. vs. Judge Inserto, et al., 149 SCRA 533 — Cited for the limited jurisdiction of the probate court and the provisional character of inventory inclusions.

Melo, Vitug, and Panganiban, JJ.