FACTS:

Dr. Juvencio Ortañez incorporated the Philippine International Life Insurance Company, Inc. and owned 90% of the subscribed capital stock. After his death, his wife, Juliana Ortañez, and his children inherited his estate. Juliana Ortañez sold shares of Philinterlife stock to petitioner Filipino Loan Assistance Group (FLAG), but failed to repurchase them within the stipulated period. Special Administrators Rafael and Jose Ortañez sold the remaining shares to FLAG under similar conditions but also failed to repurchase them. It was later discovered that Juliana, Rafael, and Jose entered into a memorandum of agreement to settle the estate, including the Philinterlife shares. Private respondent Ma. Divina Ortañez Enderes and her siblings filed a motion to declare the memorandum of agreement and extrajudicial settlement of the estate void and to declare the deeds of sale of the Philinterlife shares void. The intestate court denied a motion for the approval of the deeds of sale, stating that the sales were void as they were made without prior court approval. Later on, the intestate court declared the memorandum of agreement partially void and ordered the execution of its order nullifying the sale of the Philinterlife shares. Petitioners Jose Lee and Alma Aggabao, who represent Philinterlife and FLAG, challenged the orders of the intestate court, claiming violation of their constitutional right to due process. They also argued that the intestate court disregarded a previous decision by the Supreme Court involving substantially the same parties.

ISSUES:

1. Whether or not the intestate court committed grave abuse of discretion amounting to excess of jurisdiction when it nullified the ownership of petitioner FLAG over shares of stock which were alleged to be part of the estate.

2. Whether or not the intestate court committed grave abuse of discretion amounting to excess of jurisdiction when it issued a void writ of execution against petitioner FLAG to implement provisional orders, thereby violating FLAG's constitutional right against deprivation of property without due process.

3. Whether or not the sale of shares of stock between the legitimate heir Jose S. Ortañez and petitioner FLAG should be declared null and void.

4. Whether or not the final decision of the Supreme Court in a previous case involving the same parties should be disregarded.

5. Whether there was legal justification for the sale of the shares of the estate without court approval.

6. Whether the sale of specific properties of the estate without court approval is valid.

7. Can the intestate or probate court execute its order nullifying an invalid sale of estate property?

8. Is the determination of the intestate court regarding the inclusion or exclusion of properties in the inventory of the estate provisional in nature and therefore cannot be the subject of execution?

9. Can a writ of execution be executed against the purchasers of the property even if they were not notified or aware of the proceedings nullifying the sale?

10. Whether or not petitioners were denied due process.

11. Whether or not the extrajudicial partition of the shares of stock owned by the late Dr. Juvencio Ortañez is valid.

12. Whether the petitioners were denied due process.

13. Whether the ruling in G.R. No. 128525 is applicable to the present case.

RULING:

1. The Court denied the petition and upheld the validity of the decisions rendered by the intestate court and the Court of Appeals. The Court held that the issues raised by the petitioners were already settled in previous decisions and that the nullity of the sale of the shares of stock by Juliana Ortañez and Jose Ortañez in favor of petitioner FLAG had already been established. The Court emphasized that reopening the issue would set a bad precedent and would be detrimental to the administration of justice.

2. There was no legal justification for the sale of the shares of the estate without court approval. The heirs entered into a memorandum of agreement, partitioning the estate among themselves, despite the knowledge that there were other heirs or claimants. Since the appropriation of the estate properties was invalid, the subsequent sale of the shares by the heirs to a third party without court approval was likewise void.

3. The sale of specific properties of the estate without court approval is not valid. Court approval is necessary for the validity of any disposition of the decedent's estate. An heir may only sell his ideal or undivided share in the estate, not any specific property. Any unauthorized disposition of property under administration is null and void.

4. The intestate or probate court can execute its order nullifying an invalid sale of estate property. The execution of such order is a necessary adjunct of the court's power to annul unauthorized or fraudulent transactions and prevent the dissipation of estate property before final adjudication. The enforcement of the order is essential to make the power to annul meaningful.

5. The determination of the intestate court regarding the inclusion or exclusion of properties in the inventory of the estate is not merely provisional. In this case, it is clear that the Philinterlife shares of stock were part of the estate from the start and were included in the inventory. The issue is not about the inclusion or exclusion of the property, but rather the effect of the sale made by the decedent's heirs without the required approval of the court. Therefore, the contention that the determination of the court was provisional and should have been the subject of a separate proceeding is incorrect.

6. A writ of execution can be executed against the purchasers of the property even if they were not notified or aware of the proceedings nullifying the sale. The title of the purchaser can be struck down by the intestate court after proving the nullity of the alienation. Any sale of property of the estate by an administrator or prospective heir without the order of the court is void and passes no title to the purchaser. Notification or awareness of the proceedings is not a requirement for the court to nullify the sale and execute its order to cancel the transaction.

7. The petitioners were not denied due process. They had actual knowledge of the estate settlement proceedings and were aware that their purchase of the Philinterlife shares of stock was being questioned. The petitioners did not appeal the decision nullifying the sale of shares in their favor. Therefore, they cannot claim denial of due process.

8. The matter of the extrajudicial partition of the shares of stock owned by the late Dr. Juvencio Ortañez belongs to the jurisdiction of the regular court where the intestate proceedings are pending. The SEC hearing officer recognized the jurisdiction of the intestate court to determine the validity of the extrajudicial partition and subsequent sale of the shares of stock. The petitioners, who were respondents in a related case before the Supreme Court, acknowledged their knowledge of the pending intestate proceedings. Therefore, the extrajudicial partition is subject to the determination of the regular court.

9. The petitioners were not denied due process. The essence of due process is the reasonable opportunity to be heard, and in this case, the petitioners had the opportunity to intervene in the pending intestate proceedings for the settlement of the estate but chose not to do so. The court also noted that the petitioners did not appeal the declaration of nullity of the sale and ignored the motion for execution of the court's orders.

10. The ruling in G.R. No. 128525 is not applicable to the present case. The said case dealt with the denial of the issuance of a writ of preliminary injunction and did not address the validity of the sale of shares of stock without court approval or the validity of the writ of execution. Thus, the ruling in G.R. No. 128525 does not apply to the present case.

PRINCIPLES:

• The nullity of a sale of shares of stock made without court approval in an intestate proceeding can be considered settled if it has already been decided in previous decisions and the matter has become final.

• The orderly and efficient administration of justice requires that unfavorable decisions should not be subject to endless relitigation.

• Property under intestate proceedings cannot be adjudicated without the approval of the court.

• Heirs have the right to dispose of the decedent's property even if it is under administration, as possession of hereditary property is transmitted to the heir upon the death of the decedent.

• An heir can sell his right, interest, or participation in the property under administration only after the final adjudication of the estate by the intestate court.

• Court approval is necessary for the validity of any disposition of the decedent's estate.

• Property under administration needs the approval of the probate court before it can be disposed of, and any unauthorized disposition is null and void.

• Actual knowledge of the proceedings and the opportunity to be heard constitute due process.

• Matters relating to the extrajudicial partition of shares of stock owned by a deceased person fall under the jurisdiction of the regular court where the intestate proceedings are pending.

• Due process requires a reasonable opportunity to be heard.

• When the opportunity to be heard has been accorded, there is no denial of due process.

• A different issue decided in a separate case does not apply to the present case.