ROLANDO SANCHEZ, FLORIDA MIERLY SANCHEZ, ALFREDO T. SANCHEZ and MYRNA T. SANCHEZ, petitioners, vs. THE HONORABLE COURT OF APPEALS, ROSALIA S. LUGOD, ARTURO S. LUGOD, EVELYN LUGOD-RANISES and ROBERTO S. LUGOD, respondents.

Facts:

Rosalia filed a petition for letters of administration over the estate of her mother Maria Villafranca and father Juan Sanchez after the former’s death. Before the proceedings could be terminated, Juan Sanchez died and the petitioners, Juan Sanchez’ illegitimate children, filed a petition for letters of administration.

Rosalia S. Lugod and the petitioners herein executed a compromise agreement wherein they agreed to divide the properties enumerated therein of the late Juan C. Sanchez. When Rosalia was appointed as an administratix of the said estate, the petitioners demanded the remaining 24 hectares and or to set aside the said compromise agreement entered by them. Nine years later, the petitioners filed, through their counsel, a motion to require Rosalia to submit a new inventory and accounting over properties not included in the compromise agreement. They likewise filed a motion to defer the approval of the compromise agreement in which they prayed for the annulment of the said agreement on the ground of fraud. That purportedly, some deed of absolute sales were issued by the spouses Maria Villafranca and Juan Sanchez on July 26, 1963 and June 26, 1967, in favour of the private respondents.

Among other things, the trial court rendered a judgment that all the deed of absolute sales in favor of the respondents are fictitious and must be subject to collation and partition among all heirs and ordered that the administratrix should prepare a project partition of the estate of Juan C. Sanchez and to submit 2 certified true and correct accounting of the estate of Maria Villafranca and Juan Sanchez. 

Issue:

W/N the probate court can determine with finality the question of ownership arising from the deed of absolute sales in favor of the respondents.

Held:

It is hornbook doctrine that "in a special proceeding for the probate of a will, the question of ownership is an extraneous matter which the probate court cannot resolve with finality. This pronouncement no doubt applies with equal force to an intestate proceeding as in the case at bar."  In the instant case, the trial court rendered a decision declaring as simulated and fictitious all the deeds of absolute sale which, on July 26, 1963 and June 26, 1967, Juan C. Sanchez and Maria Villafranca executed in favor of their daughter, Rosalia Sanchez Lugod; and grandchildren, namely, Arturo S. Lugod, Evelyn S. Lugod and Roberto S. Lugod. The trial court ruled further that the properties covered by the said sales must be subject to collation. Citing Article 1409 (2) of the Civil Code, the lower court nullified said deeds of sale and determined with finality the ownership of the properties subject thereof . In doing so, it clearly overstepped its jurisdiction as a probate court.