G.R. No.

114217               October 13, 2009

HEIRS OF JOSE SY BANG, HEIRS OF JULIAN SY and OSCAR SY,1 Petitioners,

vs.
ROLANDO SY, ROSALINO SY, LUCIO SY, ENRIQUE SY, ROSAURO SY,
BARTOLOME SY, FLORECITA SY, LOURDES SY, JULIETA SY, and ROSITA
FERRERA-SY, Respondents.

Facts:
On May 28, 1980, respondent Rolando Sy filed a Complaint for Partition before the
then Court of First Instance of Quezon, Branch 2, docketed as Civil Case No. 8578.

Sy Bang died intestate in 1971, leaving behind real and personal properties,
including several businesses. 6

During an out-of-court conference between petitioners and respondents, it was

agreed that the management, supervision or administration of the common
properties and/or the entire estate of the deceased Sy Bang shall be placed
temporarily in the hands of petitioner Jose Sy Bang, as trustee, with authority to
delegate some of his functions to any of petitioners or private respondents. Thus,
the function or duty of bookkeeper was delegated by Jose Sy Bang to his co-
petitioner Julian Sy, and the duty or function of management and operation of the
business of cinema of the common ownership was delegated by petitioner Jose Sy
Bang to respondent Rosauro Sy.7

Herein petitioners and respondents also agreed that the income of the three cinema
houses, namely, Long Life, SBS and Sy-Co Theaters, shall exclusively pertain to
respondents for their support and sustenance, pending the termination of Civil Case
No. 8578, for Judicial Partition, and the income from the vast parts of the entire
estate and other businesses of their common father, to pertain exclusively to
petitioners. Hence, since the year 1980, private respondents, through respondent
Rosauro Sy, had taken charge of the operation and management of the three
cinema houses, with the income derived therefrom evenly divided among
themselves for their support and maintenance.

On March 30, 1981, the Judge rendered a First Partial Decision based on the
Compromise Agreement dated November 10, 1980, submitted in Civil Case No.
8578 by plaintiff Rolando Sy and defendants Jose Sy Bang and Julian Sy. On April 2,
1981, the Judge rendered a Second Partial Decision based on the pretrial order of
the court, dated March 25, 1981, entered into by and between respondent Renato
Sy and petitioner spouses. Said First Partial Decision and Second Partial Decision
had long become final, without an appeal having been interposed by any of the
parties
On June 8, 1982, the Judge rendered a Third Partial Decision:

(a) Declaring that all the properties, businesses or assets, their income,
produce and improvements, as well as all the rights, interests or
 participations (sic) in the names of defendants Jose Sy Bang and his wife
Iluminada Tan and their children, defendants Zenaida and Ma. Emma; both
surnamed Sy, and defendants Julian Sy and his wife Rosa Tan, as belonging
to the estate of Sy Bang, including the properties in the names of said
defendants which are enumerated in the Complaints in this case and all those
properties, rights and interests which said defendants may have concealed or
fraudulently transferred in the names of other persons, their agents or
representatives;

(b) Declaring the following as the heirs of Sy Bang, namely: his surviving
widow, Maria Rosita Ferrera-Sy and her children, Enrique, Bartolome,
Rosalino, Rolando, Rosauro, Maria Lourdes, Florecita and Julieta, all surnamed
Sy, and his children by his first wife, namely: Jose Sy Bang, Julian Sy, Lucio
Sy, Oscar Sy and Renato Sy;

(c) Ordering the partition of the Estate of Sy Bang among his heirs entitled
thereto after the extent thereof shall have been determined at the conclusion
of the proper accounting which the parties in this case, their agents and
representatives, shall render and after segregating and delivering to Maria
Rosita Ferrera-Sy her one-half (1/2) share in the conjugal partnership
between her and her deceased husband Sy Bang;

(d) Deferring resolution on the question concerning the inclusion for partition
of properties in the names of Rosalino, Bartolome, Rolando and Enrique, all
surnamed Sy.

On August 17, 1982, the Judge issued two Orders: (1) in the first Order, 13 Mrs. Lucita
L. Sarmiento was appointed as Receiver, and petitioners’ Motion for New Trial
and/or Reconsideration, dated July 9, 1982 and their Supplemental Motion, dated
July 12, 1982, were denied for lack of merit; and (2) in the second Order, 14 the Judge
ordered the immediate cancellation of the lis pendens annotated at the back of the
certificates of title in the names of Bartolome Sy, Rosalino Sy and Rolando Sy.

On August 18, 1982, the trial court approved the bond posted by the receiver, Mrs.
Lucita L. Sarmiento, Bartolome Sy, Rolando Sy and Rosalino Sy

On September 11, 1982, an Urgent Manifestation and Motion was filed by Mrs.
Lucita L. Sarmiento, the appointed receiver, which was opposed by petitioners on
September 24, 1982. 16

After several incidents in the case, the Court, on May 8, 1989, referred the petition
to the CA for proper determination and disposition.

The CA rendered the assailed Decision17 on May 6, 1993, denying due course to and
dismissing the petition for lack of merit. It held that Judge Puno acted correctly in
issuing the assailed Third Partial Decision. 
The CA also upheld the judge’s appointment of a receiver, saying that the judge did
so after both parties had presented their evidence and upon verified petition filed
by respondents, and in order to preserve the properties under litigation. Further, the
CA found proper the order to cancel the notice of lis pendens annotated in the
certificates of title in the names of Rosalino, Rolando and Bartolome.
On April 22, 1994, petitioners filed this Petition for Review on Certiorari under Rule
43 of the Rules of Court.

Issue:
(1) Whether or not the CA erred in upholding the RTC ruling regarding the Third
Partial Decision?
(2) Whether or not the CA erred in upholding the RTC’s appointment of a receiver?
(3) Whether or not the CA erred in cancelling the lis pendens?

Held:
Finding no reversible error therein, we affirm the CA Decision.

Section 4, Rule 36 of the Revised Rules on Civil Procedure states:

SEC. 4. Several judgments. – In an action against several defendants, the

court may, when a several judgment is proper, render judgment against one
or more of them, leaving the action to proceed against the others.

The trial court’s Third Partial Decision is in the nature of a several judgment as
contemplated by the rule quoted above. The trial court ruled on the status of the
properties in the names of petitioners (defendants below) while deferring the ruling
on the properties in the names of respondents pending the presentation of
evidence.

A several judgment is proper when the liability of each party is clearly separable
and distinct from that of his co-parties, such that the claims against each of them
could have been the subject of separate suits, and judgment for or against one of
them will not necessarily affect the other.84

Petitioners, although sued collectively, each held a separate and separable interest
in the properties of the Sy Bang estate.

The pronouncement as to the obligation of one or some petitioners did not affect
the determination of the obligations of the others. That the properties in the names
of petitioners were found to be part of the Sy Bang estate did not preclude any
further findings or judgment on the status or nature of the properties in the names
of the other heirs.

The trial court painstakingly examined the evidence on record and narrated the
details, then carefully laid out the particulars in the assailed Decision. The evidence
that formed the basis for the trial court’s conclusion is embodied in the Decision
itself – evidence presented by the parties themselves, including petitioners.

However, notwithstanding the trial court’s pronouncement, the Sy Bang estate

cannot be partitioned or distributed until the final determination of the extent of the
estate and only until it is shown that the obligations under Rule 90, Section
1,88 have been settled.89

In the settlement of estate proceedings, the distribution of the estate properties can
only be made: (1) after all the debts, funeral charges, expenses of administration,
allowance to the widow, and estate tax have been paid; or (2) before payment of
said obligations only if the distributees or any of them gives a bond in a sum fixed
by the court conditioned upon the payment of said obligations within such time as
the court directs, or when provision is made to meet those obligations. 90

Settling the issue of ownership is the first stage in an action for partition. 91 

The issue of ownership or co-ownership, to be more precise, must first be resolved

in order to effect a partition of properties. This should be done in the action for
partition itself. 

Moreover, the Third Partial Decision does not have the effect of terminating the
proceedings for partition. By its very nature, the Third Partial Decision is but a
determination based on the evidence presented thus far. There remained issues to
be resolved by the court. There would be no final determination of the extent of the
Sy Bang estate until the court’s examination of the properties in the names of
Rosalino, Bartolome, Rolando, and Enrique. Based on the evidence presented, the
trial court will have to make a pronouncement whether the properties in the names
of Rosalino, Bartolome, Rolando, and Enrique indeed belong to the Sy Bang estate.
Only after the full extent of the Sy Bang estate has been determined can the trial
court finally order the partition of each of the heirs’ share.

(2) As to the issue of the judge’s appointment of a receiver, suffice it to say that the
CA conclusively found thus:

The records show that the petitioners were never deprived of their day in court.
Upon Order of the respondent Judge, counsel for the petitioners submitted their
opposition to [the] petition for appointment of a receiver filed by private
respondents. x x x.

Moreover, evidence on record shows that respondent Judge appointed the receiver
after both parties have presented their evidence and after the Third Partial Decision
has been promulgated. Such appointment was made upon verified petition of herein
private respondents, alleging that petitioners are mismanaging the properties in
litigation by either mortgaging or disposing the same, hence, the said properties are
in danger of being lost, wasted, dissipated, misused, or disposed of. The respondent
Judge acted correctly in granting the appointment of a receiver in Civil Case No.
8578, in order to preserve the properties in litis pendentia and neither did he abuse
his discretion nor acted arbitrarily in doing s. On the contrary, We find that it was
the petitioners who violated the status quo sought to be maintained by the
Supreme Court, in G.R. No. 61519, by their intrusion and unwarranted seizures of
the 3 theaters, subject matter of the litigation, and which are admittedly under the
exclusive management and operation of private respondent, Rosauro Sy.

(3) While the trial court has an inherent power to cancel a notice of lis pendens,
such power is to be exercised within the express confines of the law. As provided in
Section 14, Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may
be cancelled on two grounds: (1) when the annotation was for the purpose of
molesting the title of the adverse party, or (2) when the annotation is not necessary
to protect the title of the party who caused it to be recorded. 96

This Court has interpreted the notice as:

The notice is but an incident in an action, an extrajudicial one, to be sure. It does

not affect the merits thereof. It is intended merely to constructively advise, or warn,
all people who deal with the property that they so deal with it at their own risk, and
whatever rights they may acquire in the property in any voluntary transaction are
subject to the results of the action, and may well be inferior and subordinate to
those which may be finally determined and laid down therein. The cancellation of
such a precautionary notice is therefore also a mere incident in the action, and may
be ordered by the Court having jurisdiction of it at any given time. And its
continuance or removal-like the continuance or removal of a preliminary
attachment of injunction-is not contingent on the existence of a final judgment in
the action, and ordinarily has no effect on the merits thereof.