On  3  November  1954  Angelina  F.  de  Lopez, Pacita F. de Villavicencio and Corazon F. del Castillo, children of the late  Jacobo  Fajardo  y Puno, filed a  petition in the  Court of First  Instance  of  Manila in  Special  Proceedings No. 59819,  alleging that, pursuant to an agreement dated  18  November 1952,  as amended  by another dated  30  September  1953, entered into by  and  between the  widow  and heirs of the  deceased,  they agreed to subdivide into  several  lots the  parcel of land covered by transfer certificate of title  No.  352  and  the parcel of land leased by the deceased in  his  lifetime from the Government, all situate in the province of Cotabato,  and adjudicate the lots thus subdivided to the groups of heirs; that  in  order to  arrive  at a  fair distribution of  the estate, a  committee  to appraise the value of the  share adjudicated  to  each  group of  heirs was formed;  that the committee formed was composed of  Demetrio Fajardo, representing the first group of heirs, and Lucio R.  Ildefonso, representing the second group of  heirs;  that the parties agreed  further that in  case of   conflict in  the reports of the  two members, Edgardo  Villavicencio shall submit a  report on  the value of  the  lots as appraised by him and his report shall  be final  and binding upon the parties; that as  the two members  of the committee submitted different and conflicting reports, Edgardo  Villavicencio submitted his own report on 6 September 1954; that in this report the widow Antonia J. Vda. de Fajardo, who is  the administratrix  of  the estate, is  called upon to pay to the petitioners the sum of P44,539.68, to settle the  difference  in  value  between the  share  adjudicated to the former and  the latter;  and that all the heirs  are about to register the  two agreements mentioned  and to secure the corresponding certificates  of  title  to  the  respective parcels of  land adjudicated to them.  Upon  the foregoing allegations the petitioners prayed that the probate court direct the  Registrar of Deeds in  and for  the province of  Cotabato  to annotate on the transfer certificate of title to be issued to Antonia J.  Vda.  de Fajardo for  the  lots adjudicated to her  her  obligation  to pay the  sum of P44,539.68 due  and owing to the  petitioners.

On 12 November 1954 the  administratrix  objected to the  motion  to annotate  the  lien on the  ground that  the sum of P44,539.68   awarded to  the petitioners has  not yet  been  approved  by the  Court,  and for that  reason the order to annotate  the lien  would be  premature; that the sum  of P44,539.68  awarded  to  the petitioners  is unreasonable because  the coconut trees planted  in  the parcel of  land  owned by  the deceased  are given  the same valuation  as  those planted in the parcel of land leased from the Government; that  the administratrix has  a claim still unpaid in the sum of P3,631.76 against each  of  the petitioners which may  be set  off  partially against  the sum of P44,539.68; that the administratrix has  made  certain  advances reimbursible by the heirs which  may  also be set off partially against the  sum claimed by  the  heirs  due them;  that in the project  of partition dated  24  November  1952  already approved by the Court, the petitioner Angelina F. de Lopez is required to pay the  estate of the deceased Abelardo Fajardo  the sum of P2,018.40, but  the said sum still remains unpaid; and  that the report submitted by Edgardo  Villavicencio has  not yet been approved  by  the Court.

On  12  January  1955,  the  petitioners  filed  a  reply to the  opposition alleging  that  the  report  of  Edgardo Villaviceneio was submitted  in compliance with the agreement entered  into  by the  heirs duly  approved by  the Court on 10 October 1953; that in accordance with article 2044 of the new Civil Code, the report need not be  approved  by  the Court to bind the  parties  therein; that granting that  the sum of P44.539.68 awarded to the petitioners is unreasonable, the objection thereto is not well taken,  because unreasonableness is  not a  ground upon which the validity of the report may be assailed pursuant to article 2038 of the  same  Code; that the administratrix has  waived her  right to collect from each  of the heirs the  sum of P3,631.76; that even  if  there  is a sum of money  due the estate  of the  deceased  Abelardo Fajardo from petitioners  Angelina F.  de Lopez, the  same  cannot be  set  up  as  ground to object to the  report filed  by Edgardo  Villaviceneio because the  creditor  is  a different estate; and that if  any sum of  money is due the  estate of the  late Abelardo  Fajardo from the petitioners, their individual  liability  does  not exceed P672.80  which they are  willing to pay  to the  said estate.

On 28 January  1955 the Court issued an  order,  the dispositive part  of  which provides:

Premises considered this Court finds' that the report of Edgardo Villavicencio  in question does not require judicial approval in  view of the terms of the  agreement above quoted, and that the unreasonableness of the amount awarded  is not one of the grounds provided for by law to contest the award or decision of an arbitrator.

However,  it appearing' that  there are  amounts  allegedly  due and  payable to  the oppositor from  each of the movants,  and in order to avoid multiplicity of incidents  and actions, this Court is of the  opinion  that  the matter  should be  set for  hearing,  as it is  hereby set for hearing; on February 17, 1955, at 8:30  a.m., for the  purpose of  adjusting respective  claims of the movants and the  oppositor indicated  above.

On 9  March 1955,  acting upon  the various  pleadings filed by  the  parties,  namely,  motion for reconsideration, reply  thereto, rejoinder to reply, and opposition  to the rejoinder, the Court issued an order denying the  motion for reconsideration.

The administratrix has appealed.

The aforequoted dispositive part  of the order  of the probate  court appealed from holds in  effect  that  the rejiort of Edgardo Villavicencio is final and binding upon the parties and  that the sum of P44,539.68  is  due and payable by the administratrix to the petitioners.

The appellant contends that the said report is  not final and binding upon  the parties; that  it must be  approved by the Court to  be so;  and that  that  part of the  agreement  stipulating  that  the decision  of  the arbitrator  is final,  is  contrary  to  public  policy,  for it deprives the courts of  jurisdiction, and for that reason null and void. The appellees, on the other hand,  invoke article 2044  of the new Civil Code which provides that "Any stipulation that  the  arbitrators'  award or  decision shall  be  final, is valid *  *  *."

Paragraphs  7  and  8  of  the agreement entered  into by and between  the parties on  18  November  1952, as amended by another on 30 September  1953, provide:

7.^o Para  la  igualacion  de Yalores  tanto  del terreno corno  de sus mejoras y  plantacioncs, queda  constituido  un comite  de dos micmbros, o sea: uno  por parte de la viuda, hijo y nietos (primer grupo)  y otro por parte de  las trcs hijas  (segvmdo grupo).  Para el primer grupo  queda nombrado el heredero Dn. Demetrio Fajardo y para el segundo grupo, Dn. Lucio Ildefonso;

8^o En caso de desaeuerdo en  su actuacion entre los dos comsionadoa, actuara como arbitro Edgardo  Villavicencio, euya decision sera decisiva y final.

Nowhere in the  aforequoted  stipulations of  the agreement,  as amended,  is the arbitrator empowered to award. to any heir the  sum of money  he did  award to  the petitioners.  The  purpose  in  forming the  committee of two was to appraise the value of the estate  as a step leading to its  just and  fair  partition  among  the heirs. At most that part of the report of the  arbitrator awarding  to  the  herein  petitioners the sum of P44,539.68  as due  from  the administratrix,  would  merely  be recommendatory but  could  not be  deemed  final and  binding upon the administratrix.  What is final and binding upon the  parties is that part  of the report  appraising  the subdivided parcels of  land and  improvements  thereon. Section 24(d), Republic Act No. 876, known as the Arbitration Law,  which took effect  on 19  December  1953, and  may  be  retroactively applied to the case  at  bar because  it  is procedural in  character,  provides that  the court may vacate  an  award of an  arbitrator when he has  exceeded  his powers.   The probate  court in effect awards to the petitioners the sum  of  P44,539.68 as due from the administratrix upon the  ground "that the report of Edgardo Villavicencio  in question  does not  require judicial approval in view of the terms of the agreement above quoted, and that the unreasonableness of the amount awarded is not  one  of  the grounds  provided  for  by law  to  contest the award or decision  of  an  arbitrator." As  already  adverted to,  this  is  an error, because the agreement entered  into by  the parties  does not give the arbitrator the power to do  so.

The order  appealed  from  in  so far  as it holds "that the  report  of Edgardo  Villavicencio  in question  does not  require judicial approval  in  view of the  terms of the agreement above quoted, and that the unreasonableness of the amount awarded is not one of the grounds provided for  by law  to  contest  the award  or  decision of an arbitrator,"  is  set  aside.  Let  the  probate court proceed with  the hearing of the case "for the  purpose of adjusting the respective  claims  of  the movants  and the  oppositor indicated  above," without  pronouncement as to costs.

Paras, C.J., Bengzon, Montemayor, Reyes, A., Bautista Angela, Labrador, Concepcion, Reyes, J.B.L., and Endencia, JJ.,  concur.