Ong v. Court of Appeals
REITERATIONFacts
The Antecedents: Two parcels of land, covered by TCT No. 188705 in the name of Alfredo Ong Bio Hong married to Julita Go Ong, were involved. Alfredo Ong Bio Hong died on January 18, 1975, and Julita Go Ong was appointed administratrix of his estate. Julita Go Ong sold one parcel (Lot No. 12) and subsequently mortgaged the other parcel (Lot No. 1) to Allied Banking Corporation to secure a P900,000.00 loan obtained by JK Exports, Inc. The mortgage was registered with a notation requiring the mortgagee's consent for subsequent alienation or encumbrance. Allied Banking Corporation attempted to collect the outstanding loan amount of P828,000.00 from Julita Go Ong. Procedural History: Julita Go Ong filed a complaint alleging the nullity of the mortgage contract for lack of judicial approval, which the bank allegedly promised to secure. The bank countered that Julita Go Ong was the one who promised to secure the approval and that she had received P300,000.00 from JK Exports, Inc. The Regional Trial Court (RTC) ruled that the property was conjugal, and the mortgage constituted by Julita Go Ong in her personal capacity, notwithstanding the lack of judicial approval, was valid with respect to her conjugal share and hereditary rights. The Court of Appeals (CA) affirmed the RTC decision with modification, holding that extrajudicial foreclosure proceedings should be held in abeyance pending the final result of the intestate estate proceedings of Alfredo Ong Bio Hong, and continuing the restraining order on the sale of the properties. The CA denied Julita Go Ong's motion for reconsideration. The Petition: Julita Go Ong filed a petition for review on certiorari, assailing the CA decision and raising the sole issue of whether the mortgage constituted over the property under her administration is null and void for want of judicial approval.
Issue(s)
Whether or not the mortgage constituted over the parcel of land under petitioner's administration is null and void for want of judicial approval. Whether Section 7 of Rule 89 of the Rules of Court, requiring judicial approval for the sale or mortgage of property under administration, applies to the conjugal share and hereditary rights of the surviving spouse.
Ruling
The petition is devoid of merit. The assailed decision of the Court of Appeals is affirmed.
Ratio Decidendi
On whether the mortgage constituted over the parcel of land under petitioner's administration is null and void for want of judicial approval: The Court held that the mortgage constituted by Julita Go Ong was valid with respect to her conjugal share and hereditary rights. The RTC found that the property was conjugal, not the separate property of the deceased husband. The mortgage was constituted by Julita Go Ong in her personal capacity, not as administratrix. She willingly and voluntarily mortgaged the property, having received P300,000.00 from JK Exports, Inc. The Court reiterated the rule that findings of fact of the trial court, especially when affirmed by the Court of Appeals, are entitled to great weight. The Court applied Article 493 of the Civil Code, which states that heirs, as co-owners, have full ownership of their part and the fruits pertaining thereto, and may alienate, assign, or mortgage it, with the effect limited to their allotted portion upon termination of co-ownership. The fact that the property was in custodia legis was deemed immaterial concerning her conjugal and hereditary shares, as she was the absolute owner thereof. On whether Section 7 of Rule 89 of the Rules of Court applies to the conjugal share and hereditary rights of the surviving spouse: The Court clarified that Section 7 of Rule 89 of the Rules of Court, which requires judicial approval for the sale or mortgage of property under administration, is not applicable to the surviving spouse's conjugal share and hereditary rights. The Court reasoned that these rights accrued to the wife from the moment of her husband's death (Art. 777, Civil Code) and she had absolute ownership over her share. The requirement for judicial approval pertains to the administration of the deceased's estate for purposes like paying debts, but it does not negate the surviving spouse's substantive right to dispose of her own share. The Court also noted that petitioner was estopped from questioning the mortgage, as she willingly entered into the transaction, and refusing to enforce it would sanction injustice.
Main Doctrine
A mortgage constituted by a surviving spouse on conjugal property, in her personal capacity and not as administratrix, is valid with respect to her conjugal share and hereditary rights, even without judicial approval, provided no prejudice is caused to others.