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ALONZO Q. ANCHETA v. CANDELARIA GUERSEY-DALAYGON

FACTS:

Spouses Audrey O'Neill and W. Richard Guersey, both American citizens residing in the Philippines, have an adopted daughter named Kyle Guersey Hill. Audrey passed away in 1979, leaving a will that bequeathed her entire estate to Richard. Richard renounced his appointment as executor, and the will was admitted to probate in the U.S. Richard later married Candelaria Guersey-Dalaygon, and they had two children. Audrey's will was also admitted to probate in the Philippines, with Atty. Alonzo Q. Ancheta appointed as ancillary administrator. Richard passed away in 1984, leaving a will that bequeathed his estate to Candelaria, except for his rights over certain shares which he left to Kyle. Richard's will was also admitted to probate in the U.S., with Atty. William Quasha appointed as ancillary administrator in the Philippines.

The petitioner filed a motion to declare Richard and Kyle as heirs of Audrey and filed a project of partition of Audrey's estate, which was granted by the trial court. A new title for the Makati property was issued in the names of the estate and Kyle. However, the ancillary administrator in Richard's estate filed a project of partition allocating a portion of the Makati property to Candelaria, which was opposed by her. The trial court disapproved the project of partition and adjudicated Richard's entire interest in the Makati property to Candelaria. Candelaria then filed a complaint for annulment of the trial court's orders, arguing that Richard's entire interest in the Makati property should belong to her. The petitioner denied the allegations and claimed good faith in submitting the project of partition.

The Court of Appeals (CA) annulled the trial court's orders, finding merit in Candelaria's cause. The CA held that the petitioner's failure to follow the terms of Audrey's will amounted to extrinsic fraud. The CA also ruled that the national law of the decedent, as stated in Article 16 of the Civil Code, should have been applied in the distribution of the estate. The petitioner argues that Candelaria's cause of action had already prescribed, while Candelaria justifies her delay in filing the complaint by stating that she had no opportunity to question the petitioner's actions since she was not a party to the initial proceeding.

In 1991, the trial court disallowed the project of partition which the respondent opposed, and it was through this proceeding that she became aware of the fraudulent act committed by the petitioner. In 1993, the respondent filed an action for annulment, arguing that the prescriptive period for annulment should commence from the time of her discovery of the fraudulent act. The petitioner argued that the prescriptive period should commence from the time the respondent discovered the terms of Audrey's will. The applicable law for the petition for annulment is the Judiciary Reorganization Act of 1980, which provides that an annulment of judgment may be based on lack of jurisdiction or extrinsic fraud, and must be brought within four years from the discovery of the fraud.

ISSUES:

  1. Whether the action for annulment has already prescribed.

  2. Whether there is extrinsic fraud in the case.

  3. Whether the petitioner, as the ancillary administrator of the estate, breached his duty in managing the distribution of the estate.

  4. Whether the petitioner should have introduced the law of the State of Maryland in evidence.

  5. Whether or not the trial court correctly applied Philippine laws in distributing Audrey's estate.

  6. Whether or not petitioner, as the ancillary administrator of Audrey's estate, acted in good faith.

  7. Whether the law of the State of Maryland allowing a legacy to pass to the legatee the entire estate of the testator in the property subject of the legacy should be applied in the distribution of the estates of Audrey and Richard.

  8. Whether or not the acquisition of the Makati property by non-Filipinos violated Article XII, Sections 7 and 8 of the 1986 Constitution.

  9. Whether or not the subsequent transfer of the Makati property to a Filipino citizen cured any flaw in the original acquisition.

RULING:

  1. The action for annulment has not yet prescribed since it was filed in 1993.

  2. There is extrinsic fraud in the case, as the petitioner's failure to proficiently manage the distribution of the estate amounted to extrinsic fraud.

  3. The petitioner breached his duty as the ancillary administrator by failing to manage the distribution of the estate according to the terms of the will and applicable law.

  4. The petitioner should have introduced the law of the State of Maryland on Estates and Trusts as evidence in the case.

  5. The trial court erred in applying Philippine laws instead of the law of the State of Maryland. The distribution of Audrey's estate should have been in accordance with her will and the law of her domicile.

  6. Petitioner did not act in good faith as he failed to exercise reasonable diligence in determining the applicable law and omitted to prove the national laws of the decedent. This omission resulted in a miscarriage of justice and the deprivation of respondent's full successional right to the Makati property.

  7. The Supreme Court held that the law of the State of Maryland should be applied in the distribution of the estates of Audrey and Richard. The court took judicial notice of the law, as it was sufficiently proven in Special Proceeding No. 9625. The court stated that the entire Makati property should pass on to the respondent, in accordance with the respective wills of Audrey and Richard, which devised their entire estates to each other.

  8. The Court ruled that the acquisition of the Makati property by non-Filipinos violated Article XII, Sections 7 and 8 of the 1986 Constitution. However, since the property had already been transferred to a Filipino citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid. Therefore, the Court affirmed the Decision of the Court of Appeals denying the petition.

PRINCIPLES:

  • Fraud takes on different forms, and extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, preventing a fair submission of the controversy.

  • The ancillary administrator of an estate is required to exercise reasonable diligence and act in entire good faith in the performance of their duties.

  • The intrinsic validity of a foreign national's will, especially with regard to who are the heirs, is governed by the national law of the decedent.

  • Foreign laws must be proven in our jurisdiction, and a duty-bound to introduce evidence of the pertinent law of the foreign jurisdiction falls on the party asserting its applicability.

  • When the negligence or mistake of counsel becomes a hindrance to justice, the courts have the power to relax the rigors of the rule that the negligence or mistake binds the client. - GSIS v. Bengson Commercial Bldgs., Inc.

  • The law of the forum is presumed to be the same as the foreign law in the absence of evidence to prove the latter. In defending his actions, the ancillary administrator has the duty to prove the pertinent laws of the decedent's domicile. - Beam vs. Yatco, Slade Perkins vs. Perkins

  • The fiduciary nature of the ancillary administrator's position and the frustration of the decedent's last will can constitute circumstances tantamount to extrinsic fraud, resulting in a miscarriage of justice.

  • A legacy passes to the legatee the entire interest of the testator in the property subject of the legacy, unless a contrary intent is expressly indicated in the will. (Section 4-408 of the Maryland Code)

  • A personal representative is a fiduciary and is under the general duty to settle and distribute the estate of the decedent in accordance with the terms of the will and the estate of decedents law. (Section 7-101 of the Maryland Code)

  • In the distribution of estates, the court may take judicial notice of foreign laws if they are sufficiently proven and if there is no dispute as to their existence or validity.

  • A will has the same force and effect in the probate court as if the testator made the declarations in person. Doubts in the interpretation of a will must be resolved in favor of the testator's having meant just what he said.

  • The succession of foreign nationals is governed by the decedent's national law, unless otherwise provided by Philippine law.

  • The acquisition of private lands by aliens is generally prohibited, except for certain exceptions provided by the Constitution.

  • Article XII, Sections 7 and 8 of the 1986 Constitution prohibit non-Filipinos from acquiring or holding title to private lands or lands of the public domain, except by way of legal succession or if the acquisition was made by a former natural-born citizen.

  • If land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.

  • The objective of the constitutional provision is to keep lands in Filipino hands.