Iron and Steel Authority vs. Court of Appeals GR No. 102976 !"to#er 2$ 199$ %AC&S' The Iron and Steel Authority (ISA) was created by PD No. 272, in order, generally, to generally, to develo and ro!ote the iron and steel industry in the Philiines. Initially, Initially, it was created "or a ter! o" # years but when its ori$inal ter! e%ired, its ter! was e%tended "or another &' years by No. ###. The National Steel *ororation (NS*) then a wholly owned subsidiary subsidiary o" the National National Develo!ent Develo!ent *ororation *ororation which which is an entity entity wholly wholly owned by the National National +overn!ent +overn!ent e!bared on an e%ansion ro$ra! which includes the construction o" a steel !ill in Ili$an *ity. Procla!ation No. 22- was issued by the President withdrawin$ "ro! sale or settle!ent a tract o" land in Ili$an *ity to be used by the NS*. /owever, certain ortions o" the ublic land under Procla!ation 22- were occuied by 0aria *ristina 1ertilier *o. (0*1*). 3I No. &277 was issued directin$ NS* to ne$otiate with the owners o" 0*1* "or and on behal" o" the +overn!ent "or the co!ensation o" 0*1*4s resent occuancy ri$hts on the sub5ect land. The 3I directed that ISA !ay e%ercise the ower o" e!inent do!ain should the ne$otiations "ail. The ne$otiations "ailed and ISA co!!enced e%roriation roceedin$s a$ainst 0*1*. 6hile trial was on$oin$ the statutory e%istence o" ISA had e%ired ro!tin$ 0*1* to "ile the dis!issal o" the case since ISA has ceased to be a 5uridical erson. The trial court granted MCFC’s motion to dismiss anchoring on the Rules of Court that “only natural or juridical persons or entities authorized by law may be parties to a ciil case!" #$% moed for a reconsideration contending that despite despite the e&piration of its term, its juridicial juridicial e&istence continued until the winding up of its affairs could be completed! #n the a lternatie #$% urged that the Rep! of the 'hilippines should be allowed to be substituted in its place! The RTC denied its motion for reconsideration! This was affirmed by the C%!
ISS()' 6hether or not the 8eublic o" the Philiines is entitled to be substituted "or ISA in view o" the e%iration o" ISA4s ter!.
*)+,' There is no rovision in PD No. 272 reco$niin$ ISA as ossessin$ $eneral or co!rehensive 5uridical ersonality searate and distinct "ro! that o" the +overn!ent. ISA in "act aears to be a nonincororated a$ency or instru!entality o" the +overn!ent o" the 8eublic o" the Philiines. #t Philiines. #t is common (nowledge that other agencies or instrumentalities of the )oernment of the Republic are case in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes with and other times without capital stoc(, and accordingly ested with a juridical personality distinct from the personality of the Republic! The term “%uthority" has been used to designate both incorporated and non*incorporated agencies or instrumentalities of the )oernment! The *ourt considers that ISA is roerly re$arded as an a$ent or dele$ate o" the 8eublic o" the Philiines. The Republic itself is a body corporate and juridical person ested with full panoply of powers and attributes which are compendiously described as “legal personality!" personality!" 6hen the statutory ter! o" a nonincororated a$ency e%ires, the owers, duties and "unctions as well as the assets and liabilities o" that a$ency revert bac to, and are reassu!ed by, the the 8eublic o" the Philiines, in the absence o" secial rovisions rovisions o" law seci"yin$ seci"yin$ so!e other disosition disosition thereo" thereo" such as e!g! deolution or transmission of such powers, duties, functions, etc! to some other identified successor agency or instrumentality of the Republic of the 'hilippines! +hen the e&piring agency is an incorporated one, the conseuences of such e&piry must be loo(ed for, in the first instance, in the charter of that that agency and, by way of supplementation in the proisions of the the Corporation Code! Since ISA is a nonincororated a$ency or instru!entality o" the 8eublic, its owers, duties, "unctions, assets and liabilities are roerly re$arded as "olded bac into the +overn!ent o" the Philiines and hence assu!ed once a$ain by the 8eublic, no secial statutory rovision havin$ been shown to have !andated succession thereto by so!e other entity or a$ency o" the 8eublic. #t follows that the Republic of the 'hilippines is entitled to be substituted in the e&propriation proceedings as party*plaintiff in lieu of #$%, the statutory term of #$% haing e&pired! The e&piration of #$%’s #$%’s statutory did not by itself reuire or justify the dismissal of the eminent domain proceedings! Further, no new legislatie act is necessary should the Republic decide, upon being substituted for #$%, in fact to continue to prosecute the e&propriation proceedings!
1$. -A+! RA++A su#stituted #y his /ife and "odefendant CAR)N (!3RA++A and his le4al heirs *I+,A RA++AA+IN) )+IS&A R)N) RA++A)+IS&A and G)RAR,! . RA++A vs. -),R! RA++A su#stituted #y his le4al heirs +)!NI -)&)R and ARIN)+A all surna5ed RA++A and CA %AC&S' 8osendo 8alla had two sons, Pablo and Pedro. The "ather aarently loved the "or!er but not the latter, Pablo and his "a!ily lived with 8osendo, while Pedro lived with his !other, Pa scarella, in another town. /e was not on $ood ter!s with his "ather. Pa scarella died in  and the two brothers artitioned 9- arcels o" land she le"t as her arahernalia roerty. The artition was sustained by th e *ourt. 0eanwhile, 8osendo e%ecuted a will disinheritin$ Pedro and leavin$ everythin$ he owned to Pablo, to who! he said he had earlier sold a art o" his roerty "or P&','''.''. 8osendo hi!sel" "iled "or the robate o" the will but endente lite died on ctober &, &9'. The robate 5ud$e converted SP #9: into an intestate roceedin$. A creditor o" the deceased "iled a etition "or the robate o" 8osendo;s will in SP &&'9, which was heard 5ointly with SP #9:. The order was set aside. The last will and testa!ent o" 8osendo 8alla was allowed on uisites o" a valid disinheritance had been co!lied with in the will. The aellate court noted that Pedro had threatened to ill his "ather, who was a"raid o" hi! and had earlier sued hi! "or slander and $rave oral de"a!ation. The decision was assailed be"ore th e S*, which was dis!issed in a resolution. The !otion "or reconsideration was denied with "inality in a resolution. 6hat is involved in the resent etition is the correctness o" the decision o" the resondent court annullin$ the deed o" sale e%ecuted by 8osendo 8alla in "avor o" Pablo over &: arcels o" land. Pedro had "iled on 0ay &, &72, a co!laint to annul the transaction on the $round that it was si!ulated. The ori$inal decision o" the trial court declared the sale null and void. In the resolution o" the !otion "or reconsideration, however, uestion the transaction.
ISS()' 6hether or not Pedro 8alla has the roer ersonality to >uestion the validity o" the deed o" sale. R(+ING' No. The decision o" the *A aroved the disinheritance o" Pedro 8alla. That decision was aealed to S*, but the etition "or review was dis!issed. The decision has lon$ since beco!e "inal. Since then, Pedro 8alla no lon$er had the le$al standin$ to >uestion the validity o" the sale e%ecuted by 8osendo in "avor o" his other son Pablo. The real artyininterest is the arty who stands to be bene"ited or in5ured by the 5ud$!ent or the arty entitled to the avails o" the suit. @Interest@ within the !eanin$ o" the rule !eans !aterial interest, an interest in issue and to be a""ected by the decree, as distin$uished "ro! !ere interest in the >uestion involved, or a !ere incidental interest. As a $eneral rule, one havin$ no ri$ht or interest to rotect cannot invoe the 5urisdiction o" the court as a artylainti"" in an action. As the sole heir, Pablo 8alla had the ri$ht to inherit the totality o" his "ather;s estate a"ter ay!ent o" all its debts. ven i" it be assu!ed that the deed o" sale was indeed invalid, the sub5ect!atter thereo" nevertheless devolved uon Pablo as the universal successor o" his "ather 8osendo. In his wi$, 8osendo clai!ed the &: arcels as @art o" !y roerty@ as distin$uished "ro! the con5u$al estate which he had earlier sold to Pablo. Si$ni"icantly, Pedro did not deny this descrition o" the roerty in his *o!!ent to the resent etition, con"inin$ hi!sel" to assailin$ the validity o" the sale. The *ourt !ust note the lacadaisical attitude o" the heirs o" Pedro 8alla, who substituted hi! uon his death. They see! to have lost interest in this liti$ation, robably because o" the aroval o" their "ather;s disinheritance by the resondent court. 6hen the arties were re>uired to sub!it their resective !e!oranda a"ter we $ave due course to this etition, the etitioners did but not the rivate resondents. Althou$h the eriod to do so had already e%ired, the *ourt rela%ed its rules to $ive the rivate resondents another oortunity to co!ly with the re>uire!ent. The *ourt4s decision is that as a validly disinherited heir, and not clai!in$ to be a creditor o" his deceased "ather, Pedro 8alla had no le$al ersonality to >uestion the deed o" sale between 8osendo 8alla and his son Pablo. 3e$ally seain$, Pedro 8alla was a stran$er to the transaction as he did not stand to bene"it "ro! its annul!ent. /is disinheritance had rendered hi! hors de co!bat.
Spouses AN&*!N and -)RCI&A !C! vs. IC&!R +IARING %AC&S Sabas 3i!barin$ subdivided his 3ot 2-2#D into two lots deno!inated as 3ot Nos. 2-2#D& and 2-2#D2./e then e%ecuted in "avor o"
ISS() 6hether resondent, who was the lainti"" in the trial court, was a real arty in interest in the suit to rescind the Deeds o" 8econveyance
R(+ING To show !aterial interest, resondent ar$ues that a trust was created when he urchased the roerties "ro! Sabas 3i!barin$ in "avor o" his dau$hters. As trustor, he alle$edly stands to be bene"ited or in5ured by any decision in the case. 8esondent has resented only bare assertions that a trust was created. Notin$ the need to rove the e%istence o" a trust, this *ourt has held thusC @As a rule, the burden o" rovin$ the e%istence o" a trust is on the arty assertin$ its e%istence, and such roo" !ust be clear and satis"actorily show the e%istence o" the trust and its ele!ents. 6hile i!lied trusts !ay be roved by oral evidence, the evidence !ust be trustworthy and received by the courts with e%tre!e caution, and should not be !ade to rest on loose, e>uivocal or inde"inite declarations. Trustworthy evidence is re>uired because oral evidence can easily be "abricated.@
nder the last sentence o" Article &::=, resondent4s alle$ed acts ayin$ the rice o" the sub5ect roerties and, in the titles, na!in$ his children as owners raise the resu!tion that a $i"t was e""ected in their "avor. 8esondent "ailed to rebut this resu!tion. Absent any clear roo" that a trust was created, he cannot be dee!ed a real arty in interest.That he should be dee!ed a trustor on the basis !erely o" havin$ aid the urchase rice is lainly contradicted by the resu!tion based on Article &::= o" the *ivil *ode @that there is a $i"t in "avor o" the child,@ not a trust in "avor o" the arent.