Case Digest: National Housing Authority vs. Almeida, G.R. No. 162784, June 22, 2007

                                     Art. 774 | Succession, Sinumpaang Salaysay 

Provision:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.

Ponente:

Puno, C.J.

Facts:

In 1959, the Land Tenure Administration (LTA) awarded Margarita Herrera land portions in Tunasan Estate, San Pedro, Laguna.

LTA was succeeded by Department of Agrarian Reform (DAR). DAR was succeeded by National Housing Authority (NHA).

Margarita Herrera had two children: Beatriz Herrera-Mercado and Francisca Herrera.

Beatriz predeceased her mother, and left heirs. 

In 1971, Margarita Herrera passed away.

In 1974, Francisca Herrera claimed exclusive legal heir status via Deed of Self-Adjudication.

She based this on a Sinumpaang Salaysay (sworn statement) from Margarita Herrera in 1960. The Sinumpaang Salaysay was notarized and witnessed. Margarita supposedly waived her rights and interests to the land in the Salaysay.

Beatriz Herrera-Mercado's heirs contested and filed a civil case for the annulment the Deed of Self-Adjudication. 

In 1980, the deed was declared null and void by the Court.

During the trial, Francisca Herrera filed an application with the NHA to purchase the land. 

In 1986, NHA granted the application but Beatriz's heir, Segunda Mercado-Almeida protested. 

In 1987, NHA's decision was affirmed by the Office of the President.

In the same year, Francisca Herrera passed away. Her heirs were granted transfer of rights and titles by NHA. Segunda Mercado-Almeida was asked to leave the premises that she was occupying.

In 1988, Almeida filed a Complaint to cancel of the titles issued in favor of the heirs of Francisca (Nullification of Government Lot’s Award), invoking her forty-year occupation of the disputed properties, and re-raised the fact that the declaration of self-adjudication is null because the other heirs were disregarded. 

Lower Court: 

The Regional Trial Court initially dismissed the case, but the Court of Appeals reversed and remanded. 

In 1998, the Regional Trial Court declared NHA's resolution and Office of the President's decision null. 

It ruled Sinumpaang Salaysay was not an assignment of rights but a disposition of property which shall take effect upon death, which requires probate.

In 2003, the CA affirmed the decision. 

It held that the “Sinumpaang Salaysay” is a will of Margarita Herrera.

Nature: 

Petition for Review on Certiorari under Rule 45.

Issues:

(1) WoN the NHA's resolution and Office of the President's decision have attained finality and the principle of res judicata applies; (NO)

(2) WoN the Court has jurisdiction to Make the award on the subject lots; (YES)

(3) WoN the award of the subject lots by the NHA is arbitrary.  (YES)

Held:

Petition denied.

(1) Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata."

In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial power—that which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative agency for the "formulation of a final order."

This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.

However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branches—the legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." Courts have an expanded role under the 1987 Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of government committed an act that falls under the category of grave abuse of discretion amounting to lack or excess of jurisdiction.

(2) Petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 1980 where it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of the Supreme Court in accordance with the Constitution…" and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA.

Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per entry of judgment dated October 10, 1989). 

(3) Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her application on the subject lot; that it considered the respective application and inquired whether she had all the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award was not done arbitrarily.

The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the NHA. That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same before it."

We are not impressed. 

When the petitioner received the "Sinumpaang Salaysay," it should have noted that the effectivity of the said document commences at the time of death of the author of the instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay…" Hence, in such period, all the interests of the person should cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides that:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.

By considering the document, petitioner NHA should have noted that the original applicant has already passed away. Margarita Herrera passed away on October 27, 1971. The NHA issued its resolution on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without considering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirs—in accordance with a will or by operation of law.

The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an existing Contract to Sell with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both parties—Margarita Herrera and NHA. Obligations are transmissible. Margarita Herrera's obligation to pay became transmissible at the time of her death either by will or by operation of law.

If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property already initially paid for by the decedent. Such would be an act contrary to the law on succession and the law on sales and obligations.

When the original buyer died, the NHA should have considered the estate of the decedent as the next "person" likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the civil case questioning the Deed of Self-Adjudication which rendered the deed therein null and void should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots.

We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall transpire upon the death of the instrument maker.