23.

JOSEPHINE PAHAMOTANG and ELEANOR PAHAMOTANG-BASA manager of PLEI; (3) attorney-in-fact of spouses Isabelita
vs. THE PHILIPPINE NATIONAL BANK (PNB) and the HEIRS OF ARTURO Pahamotang and Orlando Ruiz, and spouses Susana Pahamotang
ARGUNA and Octavio Zamora; and (4) guardian of daughters Concepcion and
Topic: Settlement of Decedent’s Estate Genoveva and petitioners Josephine and Eleonor. Offered as
securities for the additional loan are three (3) parcels of registered
Doctrine: [Bold in Held] land.
8. On February 19, 1980, Agustin filed with the intestate court a Petition
Facts: (Request for Judicial Authority To Sell Certain Properties of the
1. On July 1, 1972, Melitona Pahamotang died. She was survived by her Estate), therein praying for authority to sell to Arturo Arguna the
husband Agustin Pahamotang, and their eight (8) children, among properties of the estate. On February 27, 1980, Agustin yet filed with
which are herein petitioners Josephine and Eleonor, surnamed the intestate court another petition, this time a Petition To Sell the
Pahamotang. Properties of the Estate, more specifically referring to the property
2. On September 15, 1972, Agustin filed a petition for issuance of letters covered by OCT No. P-7131, in favor of PLEI.
administration over the estate of his deceased wife, Melitona. In his 9. On February 25, 1980, the intestate court granted Agustin authority
petition, Agustin identified petitioners Josephine and Eleonor as to sell estate properties, in which the court also required all the heirs
among the heirs of his deceased spouse. It appears that Agustin was of Melitona to give their express conformity to the disposal of the
appointed petitioners' judicial guardian in an earlier case - Special Civil subject properties of the estate and to sign the deed of sale.
Case No. 1785. (Strangely, the two (2) orders were dated two (2) days earlier than
3. On December 7, 1972, the intestate court issued an order granting February 27, 1980, the day Agustin supposedly filed his petition.)
Agustins petition. 10. In a motion for reconsideration, Agustin prayed for the amendment of
4. The intestate court approved the mortgage to PNB of certain assets one of its February 25, 1980 Order by canceling the requirement of
of the estate to secure an obligation in the amount of P570,000.00. express conformity of the heirs as a condition for the disposal of the
Hence, on July 6, 1973, respondent Philippine National Bank (PNB) aforesaid properties. This was granted.
and Agustin executed an Amendment of Real and Chattel 11. Hence, on March 4, 1981, various estate properties were sold to
Mortgages with Assumption of Obligation. Agustin signed the respondent Arturo Arguna, while the property covered by OCT No.
document in behalf of (1) the estate of Melitona; (2) his daughters; and P-7131 was sold to PLEI. Consequent to such sales, vendees Arguna
(3) a logging company named Pahamotang Logging Enterprises, Inc. and PLEI filed with the intestate court a motion for the approval of the
(PLEI) which appeared to have an interest in the properties of the corresponding deeds of sale in their favor, which the intestate court
estate. Offered as securities are twelve (12) parcels of registered land. granted the motion.
5. On October 5, 1974, Agustin again filed with the intestate court 12. Thereafter, three (3) daughters of Agustin, namely, Ana, Isabelita and
another petition, Petition for Declaration of Heirs And For Corazon petitioned the intestate court for the payment of their
Authority To Increase Indebtedness, where he alleged the respective shares from the sales of estate properties, which was
necessity for an additional loan from PNB to capitalize the business of granted by the intestate court.
the estate. Such loan was said to be secured by a parcel of land 13. Meanwhile, the obligation secured by mortgages on the subject
covered by Original Certificate of Title (OCT) No. P-7131 registered in properties of the estate was never satisfied. Hence, on the basis of the
the name of Heirs of Melitona Pahamotang. In the same petition, real estate mortgage contracts, mortgagor PNB filed a petition for the
Agustin prayed the intestate court to declare him and Ana, Genoveva, extrajudicial foreclosure of the mortgage, which was granted. Hence,
Isabelita, Corazon, Susana, Concepcion and herein petitioners PNB was able to foreclose the mortgage in its favor.
Josephine and Eleonor as the only heirs of Melitona. 14. Petitioners Josephine and Eleanor, together with their sister Susana
6. The intestate court granted Agustin authority to seek additional loan Pahamatong-Zamora, filed motions with the intestate court to set
from PNB in an amount not exceeding P5,000,000.00 to be secured aside its Orders. The intestate court denied the motions, as the
by the land, but denied Agustins prayer for declaration of heirs for defects are merely formal, and not substantial.
being premature. 15. On March 20, 1984, in the RTC, petitioners Josephine and Eleanor
7. On October 22, 1974, a real estate mortgage contract for and Susana, filed their complaint for Nullification of Mortgage
P4,500,000.00 was executed by PNB and Agustin in his several Contracts and Foreclosure Proceedings and Damages against
capacities as: (1) administrator of the estate of his late wife; (2) general Agustin, PNB, Arturo Arguna, PLEI, the several provincial sheriffs.
 The sisters alleged that they never consented to the mortgage 4. When an order authorizing the sale or encumbrance of real
and the subsequent sales of the properties. Also, they assert that property was issued by the testate or intestate court without
they are entitled to notice of Agustin’s several petitions as the previous notice to the heirs, devisees and legatees as required
heirs of Melitona. The sisters Josephine, Eleanor and Susana prayed by the Rules, it is not only the contract itself which is null and
that the various sales executed by Agustin, as well as the foreclosure void but also the order of the court authorizing the same.
proceedings be null and void. 5. In Maneclang vs. Baun, the intestate court granted authority to sell
16. PNB argues that petitioners availed of the wrong remedy, and that the portion of estate, despite lack of notice of hearing to the heirs of the
mortgage was made with the approval of the interstate court, and with decedent. The RTC held that the order of the intestate court granting
knowledge of the Melitona’s heirs. Arguna argues the same. authority to sell, as well as the deed of sale, were void. On appeal, SC
17. RTC ruled in favor of petitioners, stating that the Mortgage Contracts, held that without compliance with Sections 2, 4 and 7 of Rule 89 of the
as well as the Deeds of Sale, are void insofar as it affects the share, Rules of Court, the authority to sell, the sale itself and the order
interests and rights of petitioners. approving it would be null and void ab initio.
18. CA reversed the RTC, agreeing with PNB, stating that a collateral 6. In Liu vs. Loy, Jr., while the decedent was still living, his son and
attack of various RTC orders in the nullification was the incorrect attorney-in-fact sold in behalf of the alleged decedent certain parcels
remedy, as the correct remedy is a direct action to annul the court of land to Frank Liu. After the decedent died, the son sold the same
orders. Also, CA held that petitioners’ failure to assail the orders at the properties to two persons. Upon an ex parte motion filed by the 2nd
most opportune time constitutes laches, since it has been 2 years, 7 set of buyers of estate properties, the probate court approved the sale
months and 90 days. to them of said properties. SC declared the probate court's approval
19. Hence, this petition. of the sale as completely void due to the failure of the 2nd set of buyers
to notify the heir-administratrix of the motion and hearing for the sale
Issue: W/N petitioners can obtain relief from the effects of contracts of sale of estate property.
and mortgage entered into by Agustin without first initiating a direct action 7. Here, it appears that petitioners were never notified of the several
against the orders of the intestate court petitions filed by Agustin with the intestate court to mortgage and sell
the estate properties of his wife.
Held: Yes. 8. Agustin’s petitions do not contain information that petitioners were
furnished with copies of said petitions. Also, notices of hearings of
1. Contrary to the view of the CA, the action which petitioners lodged with those petitions were not sent to the petitioners.
the trial court is not an action to annul the orders of the intestate court, 9. Also, the CA erred in appreciating laches against petitioners. The
which, according to CA, cannot be done collaterally. It is the validity of element of delay in questioning the subject orders of the intestate court
the contracts of mortgage and sale which is directly attacked in the is sorely lacking. Petitioners were totally unaware of the plan of
action. Agustin to mortgage and sell the estate properties. sent any indication
2. As it were, the CA offered little explanation on why it did not believe of the point in time when petitioners acquired knowledge of those
the trial court in its finding that petitioners were ignorant of Agustins orders, their alleged delay in impugning the validity thereof certainly
scheme to mortgage and sell the estate properties. The CA cannot cannot be established. And the Court of Appeals cannot simply impute
casually set aside the findings of the trial court without stating clearly laches against them.
the reasons therefor. Findings of the trial court are entitled to great
weight, and absent any indication to believe otherwise, we simply WHEREFORE, the CA issuances are REVERSED.
cannot adopt the conclusion reached by the Court of Appeals.
3. Also, as correctly found by the RTC, the petitioners were, in fact, not
notified by their father Agustin of the filing of his petitions for
permission to mortgage/sell the estate properties. The RTC made the
correct conclusion of law that the challenged orders of the intestate
court granting Agustin’s petitions were null and void for lack of
compliance with the mandatory requirements of Rule 89 of the
Rules of Court, particularly Sections 2, 4, 7 [please just check your
Code].