13

SECOND DIVISION
G.R. No. 149926
February 23, 2005
UNION
BANK
OF
THE
vs.
EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:

PHILIPPINES, petitioner,

On December 7, 1988, respondent Florence S. Ariola filed her Answer and alleged that the loan documents did
not bind her since she was not a party thereto. Considering that the joint agreement signed by her and her
brother Edmund was not approved by the probate court, it was null and void; hence, she was not liable to the
petitioner under the joint agreement.
14

On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch 63. Consequently,
trial on the merits ensued and a decision was subsequently rendered by the court dismissing the complaint for
lack of merit. The decretal portion of the RTC decision reads:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the
1
reversal of the Decision of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the
2
dismissal of the petitioners complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City,
Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered into a loan
3
agreement in the amount of P128,000.00. The amount was intended for the payment of the purchase price of
one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund,
executed a promissory note in favor of the FCCC, the principal sum payable in five equal annual amortizations
of P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.
4

On December 13, 1980, the FCCC and Efraim entered into another loan agreement, this time in the amount
ofP123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford 6600 Agricultural
All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim
and his son, Edmund, executed a promissory note for the said amount in favor of the FCCC. Aside from such
5
promissory note, they also signed a Continuing Guaranty Agreement for the loan dated December 13, 1980.
6

Sometime in February 1981, Efraim died, leaving a holographic will. Subsequently in March 1981, testate
proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On
April 9, 1981, Edmund, as one of the heirs, was appointed as the special administrator of the estate of the
7
decedent. During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister Florence
8
Santibaez Ariola, executed a Joint Agreement dated July 22, 1981, wherein they agreed to divide between
themselves and take possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor
for Florence. Each of them was to assume the indebtedness of their late father to FCCC, corresponding to the
tractor respectively taken by them.

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit.

15

The trial court found that the claim of the petitioner should have been filed with the probate court before which
the testate estate of the late Efraim Santibaez was pending, as the sum of money being claimed was an
obligation incurred by the said decedent. The trial court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a partition of the estate of the
decedent. However, the said agreement was void, considering that it had not been approved by the probate
court, and that there can be no valid partition until after the will has been probated. The trial court further
declared that petitioner failed to prove that it was the now defunct Union Savings and Mortgage Bank to which
the FCCC had assigned its assets and liabilities. The court also agreed to the contention of respondent Florence S.
Ariola that the list of assets and liabilities of the FCCC assigned to Union Savings and Mortgage Bank did not
clearly refer to the decedents account. Ruling that the joint agreement executed by the heirs was null and void,
the trial court held that the petitioners cause of action against respondent Florence S. Ariola must necessarily
fail.
The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA), assigning the
following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A) SHOULD BE
APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS
UNTIL AFTER THE WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED HER RIGHT TO
16
HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities was executed by and between FCCC
and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, among others, assigned all its assets
and liabilities to Union Savings and Mortgage Bank.
10

Demand letters for the settlement of his account were sent by petitioner Union Bank of the Philippines (UBP)
to Edmund, but the latter failed to heed the same and refused to pay. Thus, on February 5, 1988, the petitioner
11
filed a Complaint for sum of money against the heirs of Efraim Santibaez, Edmund and Florence, before the
RTC of Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were issued against both, but the
one intended for Edmund was not served since he was in the United States and there was no information on his
12
address or the date of his return to the Philippines. Accordingly, the complaint was narrowed down to
respondent Florence S. Ariola.

The petitioner asserted before the CA that the obligation of the deceased had passed to his legitimate children
and heirs, in this case, Edmund and Florence; the unconditional signing of the joint agreement marked as Exhibit
"A" estopped respondent Florence S. Ariola, and that she cannot deny her liability under the said document; as
the agreement had been signed by both heirs in their personal capacity, it was no longer necessary to present
the same before the probate court for approval; the property partitioned in the agreement was not one of those
enumerated in the holographic will made by the deceased; and the active participation of the heirs, particularly
respondent Florence S. Ariola, in the present ordinary civil action was tantamount to a waiver to re-litigate the
claim in the estate proceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner should have
17
been presented before the probate court.
The appellate court found that the appeal was not meritorious and held that the petitioner should have filed its
claim with the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held
that the partition made in the agreement was null and void, since no valid partition may be had until after the
will has been probated. According to the CA, page 2, paragraph (e) of the holographic will covered the subject
properties (tractors) in generic terms when the deceased referred to them as "all other properties." Moreover,
the active participation of respondent Florence S. Ariola in the case did not amount to a waiver. Thus, the CA
affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City, Branch 63, is
hereby AFFIRMED in toto.
SO ORDERED.

18

In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT SHOULD BE APPROVED
BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS OF
THE LATE EFRAIM SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE
CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided in Article
774 of the Civil Code; there was thus no need for the probate court to approve the joint agreement where the
heirs partitioned the tractors owned by the deceased and assumed the obligations related thereto. Since
respondent Florence S. Ariola signed the joint agreement without any condition, she is now estopped from
asserting any position contrary thereto. The petitioner also points out that the holographic will of the deceased
did not include nor mention any of the tractors subject of the complaint, and, as such was beyond the ambit of
the said will. The active participation and resistance of respondent Florence S. Ariola in the ordinary civil action
against the petitioners claim amounts to a waiver of the right to have the claim presented in the probate
proceedings, and to allow any one of the heirs who executed the joint agreement to escape liability to pay the
value of the tractors under consideration would be equivalent to allowing the said heirs to enrich themselves to
the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to consider the fact
that respondent Florence S. Ariola and her brother Edmund executed loan documents, all establishing
the vinculum juris or the legal bond between the late Efraim Santibaez and his heirs to be in the nature of a
solidary obligation. Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980 executed by
the late Efraim Santibaez, together with his heirs, Edmund and respondent Florence, made the obligation
solidary as far as the said heirs are concerned. The petitioner also proffers that, considering the express
provisions of the continuing guaranty agreement and the promissory notes executed by the named respondents,
the latter must be held liable jointly and severally liable thereon. Thus, there was no need for the petitioner to
file its money claim before the probate court. Finally, the petitioner stresses that both surviving heirs are being
sued in their respective personal capacities, not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to recover a
sum of money from the deceased Efraim Santibaez; thus the claim should have been filed with the probate
court. She points out that at the time of the execution of the joint agreement there was already an existing
probate proceedings of which the petitioner knew about. However, to avoid a claim in the probate court which
might delay payment of the obligation, the petitioner opted to require them to execute the said
agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring that the agreement was null and
void. She asserts that even if the agreement was voluntarily executed by her and her brother Edmund, it should
still have been subjected to the approval of the court as it may prejudice the estate, the heirs or third parties.
Furthermore, she had not waived any rights, as she even stated in her answer in the court a quo that the claim
should be filed with the probate court. Thus, the petitioner could not invoke or claim that she is in estoppel.

IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATE
EFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF
PETITIONER-APPELLANT UNION BANK.

Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty agreement, nor
was there any document presented as evidence to show that she had caused herself to be bound by the
obligation of her late father.
The petition is bereft of merit.

V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 AND DECEMBER 13, 1980 IN THE
AMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND
THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF
19
PETITIONER UNION BANK.

The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed by
the heirs is valid; b) whether or not the heirs assumption of the indebtedness of the deceased is valid; and c)
whether the petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.nt

At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties of
the deceased, to determine whether they should or should not be included in the inventory or list of properties
20
to be administered. The said court is primarily concerned with the administration, liquidation and distribution
21
of the estate.
In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has been
probated:
In testate succession, there can be no valid partition among the heirs until after the will has been probated. The
law enjoins the probate of a will and the public requires it, because unless a will is probated and notice thereof
given to the whole world, the right of a person to dispose of his property by will may be rendered nugatory. The
authentication of a will decides no other question than such as touch upon the capacity of the testator and the
22
compliance with those requirements or solemnities which the law prescribes for the validity of a will.
This, of course, presupposes that the properties to be partitioned are the same properties embraced in the
23
24
will. In the present case, the deceased, Efraim Santibaez, left a holographic will which contained, inter alia,
the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall be
distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and Florence,
my children.
We agree with the appellate court that the above-quoted is an all-encompassing provision embracing all the
properties left by the decedent which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3) subject tractors. This being so, any
25
partition involving the said tractors among the heirs is not valid. The joint agreement executed by Edmund and
Florence, partitioning the tractors among themselves, is invalid, specially so since at the time of its execution,
there was already a pending proceeding for the probate of their late fathers holographic will covering the said
tractors.
It must be stressed that the probate proceeding had already acquired jurisdiction over all the properties of the
deceased, including the three (3) tractors. To dispose of them in any way without the probate courts approval is
26
tantamount to divesting it with jurisdiction which the Court cannot allow. Every act intended to put an end to
indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be
27
a sale, an exchange, a compromise, or any other transaction. Thus, in executing any joint agreement which
appears to be in the nature of an extra-judicial partition, as in the case at bar, court approval is imperative, and
the heirs cannot just divest the court of its jurisdiction over that part of the estate. Moreover, it is within the
28
jurisdiction of the probate court to determine the identity of the heirs of the decedent. In the instant case,
there is no showing that the signatories in the joint agreement were the only heirs of the decedent. When it was
executed, the probate of the will was still pending before the court and the latter had yet to determine who the
heirs of the decedent were. Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto themselves
the three (3) tractors was a premature act, and prejudicial to the other possible heirs and creditors who may
have a valid claim against the estate of the deceased.
The question that now comes to fore is whether the heirs assumption of the indebtedness of the decedent is
binding. We rule in the negative. Perusing the joint agreement, it provides that the heirs as parties thereto "have
agreed to divide between themselves and take possession and use the above-described chattel and each of them

to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First
29
Countryside Credit Corp." The assumption of liability was conditioned upon the happening of an event, that is,
that each heir shall take possession and use of their respective share under the agreement. It was made
dependent on the validity of the partition, and that they were to assume the indebtedness corresponding to the
chattel that they were each to receive. The partition being invalid as earlier discussed, the heirs in effect did not
receive any such tractor. It follows then that the assumption of liability cannot be given any force and effect.
The Court notes that the loan was contracted by the decedent.l^vvphi1.net The petitioner, purportedly a creditor
of the late Efraim Santibaez, should have thus filed its money claim with the probate court in accordance with
Section 5, Rule 86 of the Revised Rules of Court, which provides:
Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. All claims for money
against the decedent, arising from contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses for the last sickness of the decedent, and judgment for money against
the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that
they may be set forth as counterclaims in any action that the executor or administrator may bring against the
claimants. Where an executor or administrator commences an action, or prosecutes an action already
commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has against the
decedent, instead of presenting them independently to the court as herein provided, and mutual claims may be
set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount
so determined shall be considered the true balance against the estate, as though the claim had been presented
directly before the court in the administration proceedings. Claims not yet due, or contingent, may be approved
at their present value.
30

The filing of a money claim against the decedents estate in the probate court is mandatory. As we held in the
31
vintage case of Py Eng Chong v. Herrera:
This requirement is for the purpose of protecting the estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling him to examine each claim and to determine whether it is a
proper one which should be allowed. The plain and obvious design of the rule is the speedy settlement of the
affairs of the deceased and the early delivery of the property to the distributees, legatees, or heirs. `The law
strictly requires the prompt presentation and disposition of the claims against the decedent's estate in order to
32
settle the affairs of the estate as soon as possible, pay off its debts and distribute the residue.
Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola accountable
for any liability incurred by her late father. The documentary evidence presented, particularly the promissory
notes and the continuing guaranty agreement, were executed and signed only by the late Efraim Santibaez and
his son Edmund. As the petitioner failed to file its money claim with the probate court, at most, it may only go
after Edmund as co-maker of the decedent under the said promissory notes and continuing guaranty, of course,
subject to any defenses Edmund may have as against the petitioner. As the court had not acquired jurisdiction
over the person of Edmund, we find it unnecessary to delve into the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the successor33
in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and liabilities. The
petitioner in its complaint alleged that "by virtue of the Deed of Assignment dated August 20, 1981 executed by
34
and between First Countryside Credit Corporation and Union Bank of the Philippines" However, the
35
documentary evidence clearly reflects that the parties in the deed of assignment with assumption of liabilities

were the FCCC, and the Union Savings and Mortgage Bank, with the conformity of Bancom Philippine Holdings,
Inc. Nowhere can the petitioners participation therein as a party be found. Furthermore, no documentary or
testimonial evidence was presented during trial to show that Union Savings and Mortgage Bank is now, in fact,
petitioner Union Bank of the Philippines. As the trial court declared in its decision:
*T+he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present
evidence to prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines. Judicial
notice does not apply here. "The power to take judicial notice is to [be] exercised by the courts with caution;
care must be taken that the requisite notoriety exists; and every reasonable doubt upon the subject should be
36
promptly resolved in the negative." (Republic vs. Court of Appeals, 107 SCRA 504).
This being the case, the petitioners personality to file the complaint is wanting. Consequently, it failed to
establish its cause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in affirming
the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Court of Appeals Decision is
AFFIRMED. No costs.

of for every __________ months or fractions thereof, this ________ or any renewal or substitution thereof is in
effect.
Indemnity. The undersigned, jointly and severally, agree at all times to indemnify the COMPANY and keep it
indemnified and hold and save it harmless from and against any and all damages, losses, costs, stamps, taxes,
penalties, charges, and expenses of whatsoever kind and nature which the COMPANY shall or may, at any time
sustain or incur in consequence of having become surety upon this bond or any extension, renewal, substitution
or alteration thereof made at the instance of the undersigned or any of them or any order executed on behalf of
the undersigned or any of them; chan roblesvirtualawlibraryand to pay, reimburse and make good to the
COMPANY, its successors and assigns, all sums and amount of money which it or its representatives shall pay or
cause to be paid, or become liable to pay, on account of the undersigned or any of them, of whatsoever kind and
nature, including 15% of the amount involved in the litigation or other matters growing out of or connected
therewith for counsel or attorneys fees, but in no case less than P25. It is hereby further agreed that in case of
extension or renewal of this ________ we equally bind ourselves for the payment thereof under the same terms
and conditions as above mentioned without the necessity of executing another indemnity agreement for the
purpose and that we hereby equally waive our right to be notified of any renewal or extension of this ________
which may be granted under this indemnity agreement.

SO ORDERED.
EN BANC
[G.R. No. L-8437. November 28, 1956.]
ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-Appellant.

Interest on amount paid by the Company. Any and all sums of money so paid by the company shall bear
interest at the rate of 12% per annum which interest, if not paid, will be accummulated and added to the capital
quarterly order to earn the same interests as the capital and the total sum thereof, the capital and interest, shall
be paid to the COMPANY as soon as the COMPANY shall have become liable therefore, whether it shall have paid
out such sums of money or any part thereof or not.
xxx

DECISION
REYES, J. B. L., J.:
Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance of Rizal, presided by Judge
Hermogenes Caluag, dismissing its claim against the Estate of K. H. Hemady (Special Proceeding No. Q-293) for
failure to state a cause of action.
The Luzon Surety Co. had filed a claim against the Estate based on twenty different indemnity agreements, or
counter bonds, each subscribed by a distinct principal and by the deceased K. H. Hemady, a surety solidary
guarantor) in all of them, in consideration of the Luzon Surety Co.s of having guaranteed, the various principals
in favor of different creditors. The twenty counterbonds, or indemnity agreements, all contained the following
stipulations:chanroblesvirtuallawlibrary
Premiums. As consideration for this suretyship, the undersigned jointly and severally, agree to pay the
COMPANY the sum of ________________ (P______) pesos, Philippines Currency, in advance as premium there

xxx

xxx

Waiver. It is hereby agreed upon by and between the undersigned that any question which may arise between
them by reason of this document and which has to be submitted for decision to Courts of Justice shall be
brought before the Court of competent jurisdiction in the City of Manila, waiving for this purpose any other
venue. Our right to be notified of the acceptance and approval of this indemnity agreement is hereby likewise
waived.
xxx

xxx

xxx

Our Liability Hereunder. It shall not be necessary for the COMPANY to bring suit against the principal upon his
default, or to exhaust the property of the principal, but the liability hereunder of the undersigned indemnitor
shall be jointly and severally, a primary one, the same as that of the principal, and shall be exigible immediately
upon the occurrence of such default. (Rec. App. pp. 98- 102.)
The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of the twenty bonds it had
executed in consideration of the counterbonds, and further asked for judgment for the unpaid premiums and
documentary stamps affixed to the bonds, with 12 per cent interest thereon.

Before answer was filed, and upon motion of the administratrix of Hemadys estate, the lower court, by order of
September 23, 1953, dismissed the claims of Luzon Surety Co., on two grounds:chanroblesvirtuallawlibrary (1)
that the premiums due and cost of documentary stamps were not contemplated under the indemnity
agreements to be a part of the undertaking of the guarantor (Hemady), since they were not liabilities incurred
after the execution of the counterbonds; chan roblesvirtualawlibraryand (2) that whatever losses may occur
after Hemadys death, are not chargeable to his estate, because upon his death he ceased to be guarantor.
Taking up the latter point first, since it is the one more far reaching in effects, the reasoning of the court below
ran as follows:chanroblesvirtuallawlibrary
The administratrix further contends that upon the death of Hemady, his liability as a guarantor terminated, and
therefore, in the absence of a showing that a loss or damage was suffered, the claim cannot be considered
contingent. This Court believes that there is merit in this contention and finds support in Article 2046 of the new
Civil Code. It should be noted that a new requirement has been added for a person to qualify as a guarantor, that
is:chanroblesvirtuallawlibrary integrity. As correctly pointed out by the Administratrix, integrity is something
purely personal and is not transmissible. Upon the death of Hemady, his integrity was not transmitted to his
estate or successors. Whatever loss therefore, may occur after Hemadys death, are not chargeable to his estate
because upon his death he ceased to be a guarantor.
Another clear and strong indication that the surety company has exclusively relied on the personality, character,
honesty and integrity of the now deceased K. H. Hemady, was the fact that in the printed form of the indemnity
agreement there is a paragraph entitled Security by way of first mortgage, which was expressly waived and
renounced by the security company. The security company has not demanded from K. H. Hemady to comply with
this requirement of giving security by way of first mortgage. In the supporting papers of the claim presented by
Luzon Surety Company, no real property was mentioned in the list of properties mortgaged which appears at the
back of the indemnity agreement. (Rec. App., pp. 407-408).
We find this reasoning untenable. Under the present Civil Code (Article 1311), as well as under the Civil Code of
1889 (Article 1257), the rule is that
Contracts take effect only as between the parties, their assigns and heirs, except in the case where the rights
and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision
of law.
While in our successional system the responsibility of the heirs for the debts of their decedent cannot exceed the
value of the inheritance they receive from him, the principle remains intact that these heirs succeed not only to
the rights of the deceased but also to his obligations. Articles 774 and 776 of the New Civil Code (and Articles 659
and 661 of the preceding one) expressly so provide, thereby confirming Article 1311 already quoted.
ART. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the
extent of the value of the inheritance, of a person are transmitted through his death to another or others either
by his will or by operation of law.

ART. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.
In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:chanroblesvirtuallawlibrary
Under the Civil Code the heirs, by virtue of the rights of succession are subrogated to all the rights and
obligations of the deceased (Article 661) and cannot be regarded as third parties with respect to a contract to
which the deceased was a party, touching the estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).
xxx

xxx

xxx

The principle on which these decisions rest is not affected by the provisions of the new Code of Civil Procedure,
and, in accordance with that principle, the heirs of a deceased person cannot be held to be third persons in
relation to any contracts touching the real estate of their decedent which comes in to their hands by right of
inheritance; chan roblesvirtualawlibrarythey take such property subject to all the obligations resting thereon in
the hands of him from whom they derive their rights.
(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs. Salak, 91 Phil., 265).
The binding effect of contracts upon the heirs of the deceased party is not altered by the provision in our Rules
of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is
distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from the estate is
ultimately a payment by the heirs and distributees, since the amount of the paid claim in fact diminishes or
reduces the shares that the heirs would have been entitled to receive.
Under our law, therefore, the general rule is that a partys contractual rights and obligations are transmissible to
the successors. The rule is a consequence of the progressive depersonalization of patrimonial rights and duties
that, as observed by Victorio Polacco, has characterized the history of these institutions. From the Roman
concept of a relation from person to person, the obligation has evolved into a relation from patrimony to
patrimony, with the persons occupying only a representative position, barring those rare cases where the
obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its performance by a specific
person and by no other. The transition is marked by the disappearance of the imprisonment for debt.
Of the three exceptions fixed by Article 1311, the nature of the obligation of the surety or guarantor does not
warrant the conclusion that his peculiar individual qualities are contemplated as a principal inducement for the
contract. What did the creditor Luzon Surety Co. expect of K. H. Hemady when it accepted the latter as surety in
the counterbonds? Nothing but the reimbursement of the moneys that the Luzon Surety Co. might have to
disburse on account of the obligations of the principal debtors. This reimbursement is a payment of a sum of
money, resulting from an obligation to give; chan roblesvirtualawlibraryand to the Luzon Surety Co., it was
indifferent that the reimbursement should be made by Hemady himself or by some one else in his behalf, so long
as the money was paid to it.
The second exception of Article 1311, p. 1, is intransmissibility by stipulation of the parties. Being exceptional
and contrary to the general rule, this intransmissibility should not be easily implied, but must be expressly

established, or at the very least, clearly inferable from the provisions of the contract itself, and the text of the
agreements sued upon nowhere indicate that they are non-transferable.
(b) Intransmisibilidad por pacto. Lo general es la transmisibilidad de darechos y obligaciones; chan
roblesvirtualawlibraryle excepcion, la intransmisibilidad. Mientras nada se diga en contrario impera el principio
de la transmision, como elemento natural a toda relacion juridica, salvo las personalisimas. Asi, para la no
transmision, es menester el pacto expreso, porque si no, lo convenido entre partes trasciende a sus herederos.
Siendo estos los continuadores de la personalidad del causante, sobre ellos recaen los efectos de los vinculos
juridicos creados por sus antecesores, y para evitarlo, si asi se quiere, es indespensable convension terminante
en tal sentido.
Por su esencia, el derecho y la obligacion tienden a ir ms all de las personas que les dieron vida, y a ejercer
presion sobre los sucesores de esa persona; chan roblesvirtualawlibrarycuando no se quiera esto, se impone una
estipulacion limitativa expresamente de la transmisibilidad o de cuyos tirminos claramente se deduzca la
concresion del concreto a las mismas personas que lo otorgon. (Scaevola, Codigo Civil, Tomo XX, p. 541-542)
(Emphasis supplied.)
Because under the law (Article 1311), a person who enters into a contract is deemed to have contracted for
himself and his heirs and assigns, it is unnecessary for him to expressly stipulate to that effect; chan
roblesvirtualawlibraryhence, his failure to do so is no sign that he intended his bargain to terminate upon his
death. Similarly, that the Luzon Surety Co., did not require bondsman Hemady to execute a mortgage indicates
nothing more than the companys faith and confidence in the financial stability of the surety, but not that his
obligation was strictly personal.
The third exception to the transmissibility of obligations under Article 1311 exists when they are not
transmissible by operation of law. The provision makes reference to those cases where the law expresses that
the rights or obligations are extinguished by death, as is the case in legal support (Article 300), parental authority
(Article 327), usufruct (Article 603), contracts for a piece of work (Article 1726), partnership (Article 1830 and
agency (Article 1919). By contract, the articles of the Civil Code that regulate guaranty or suretyship (Articles
2047 to 2084) contain no provision that the guaranty is extinguished upon the death of the guarantor or the
surety.
The lower court sought to infer such a limitation from Art. 2056, to the effect that one who is obliged to furnish
a guarantor must present a person who possesses integrity, capacity to bind himself, and sufficient property to
answer for the obligation which he guarantees. It will be noted, however, that the law requires these qualities
to be present only at the time of the perfection of the contract of guaranty. It is self-evident that once the
contract has become perfected and binding, the supervening incapacity of the guarantor would not operate to
exonerate him of the eventual liability he has contracted; chan roblesvirtualawlibraryand if that be true of his
capacity to bind himself, it should also be true of his integrity, which is a quality mentioned in the article
alongside the capacity.
The foregoing concept is confirmed by the next Article 2057, that runs as follows:chanroblesvirtuallawlibrary

ART. 2057. If the guarantor should be convicted in first instance of a crime involving dishonesty or should
become insolvent, the creditor may demand another who has all the qualifications required in the preceding
article. The case is excepted where the creditor has required and stipulated that a specified person should be
guarantor.
From this article it should be immediately apparent that the supervening dishonesty of the guarantor (that is to
say, the disappearance of his integrity after he has become bound) does not terminate the contract but merely
entitles the creditor to demand a replacement of the guarantor. But the step remains optional in the
creditor:chanroblesvirtuallawlibrary it is his right, not his duty; chan roblesvirtualawlibraryhe may waive it if he
chooses, and hold the guarantor to his bargain. Hence Article 2057 of the present Civil Code is incompatible with
the trial courts stand that the requirement of integrity in the guarantor or surety makes the latters undertaking
strictly personal, so linked to his individuality that the guaranty automatically terminates upon his death.
The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety Co. not being rendered
intransmissible due to the nature of the undertaking, nor by the stipulations of the contracts themselves, nor by
provision of law, his eventual liability thereunder necessarily passed upon his death to his heirs. The contracts,
therefore, give rise to contingent claims provable against his estate under section 5, Rule 87 (2 Moran, 1952 ed.,
p. 437; chan roblesvirtualawlibraryGaskell & Co. vs. Tan Sit, 43 Phil. 810, 814).
The most common example of the contigent claim is that which arises when a person is bound as surety or
guarantor for a principal who is insolvent or dead. Under the ordinary contract of suretyship the surety has no
claim whatever against his principal until he himself pays something by way of satisfaction upon the obligation
which is secured. When he does this, there instantly arises in favor of the surety the right to compel the principal
to exonerate the surety. But until the surety has contributed something to the payment of the debt, or has
performed the secured obligation in whole or in part, he has no right of action against anybody no claim that
could be reduced to judgment. (May vs. Vann, 15 Pla., 553; chan roblesvirtualawlibraryGibson vs. Mithell, 16
Pla., 519; chan roblesvirtualawlibraryMaxey vs. Carter, 10 Yarg. [Tenn.], 521 Reeves vs. Pulliam, 7 Baxt. [Tenn.],
119; chan roblesvirtualawlibraryErnst vs. Nou, 63 Wis., 134.)
For Defendant administratrix it is averred that the above doctrine refers to a case where the surety files claims
against the estate of the principal debtor; chan roblesvirtualawlibraryand it is urged that the rule does not apply
to the case before us, where the late Hemady was a surety, not a principal debtor. The argument evinces a
superficial view of the relations between parties. If under the Gaskell ruling, the Luzon Surety Co., as guarantor,
could file a contingent claim against the estate of the principal debtors if the latter should die, there is absolutely
no reason why it could not file such a claim against the estate of Hemady, since Hemady is a solidary co-debtor
of his principals. What the Luzon Surety Co. may claim from the estate of a principal debtor it may equally claim
from the estate of Hemady, since, in view of the existing solidarity, the latter does not even enjoy the benefit of
exhaustion of the assets of the principal debtor.
The foregoing ruling is of course without prejudice to the remedies of the administratrix against the principal
debtors under Articles 2071 and 2067 of the New Civil Code.
Our conclusion is that the solidary guarantors liability is not extinguished by his death, and that in such event,
the Luzon Surety Co., had the right to file against the estate a contingent claim for reimbursement. It becomes

unnecessary now to discuss the estates liability for premiums and stamp taxes, because irrespective of the
solution to this question, the Luzon Suretys claim did state a cause of action, and its dismissal was erroneous.

question but "after liberation", when her brother went there to get their share of the sugar produced therein, he
2
was informed that Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were in possession of Lot 773.

Wherefore, the order appealed from is reversed, and the records are ordered remanded to the court of origin,
with instructions to proceed in accordance with law. Costs against the Administratrix- Appellee. SO ORDERED.

It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694
3
(29797) covering Lot 773-A with an area of 37,818 square meters. TCT No. RF 2694 describes Lot 773-A as a
portion of Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804.

G.R. No. L-68053 May 7, 1990

LAURA
ALVAREZ,
FLORA
ALVAREZ
and
RAYMUNDO
ALVAREZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO YANES,
ROSARIO YANES, and ILUMINADO YANES, respondents.
Francisco G. Banzon for petitioner.
Renecio R. Espiritu for private respondents.

FERNAN, C.J.:
This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division
of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v.
Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of Negros
Occidental insofar as it ordered the petitioners to pay jointly and severally the private respondents the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental and reversing the subject decision insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees, respectively and (b) the resolution of said
appellate court dated May 30, 1984, denying the motion for reconsideration of its decision.
The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally
known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square
meters, was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858
(8804) issued on October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A).
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita,
Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio
1
and Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib. It is not clear
why the latter is not included as a party in this case.
Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not
attend to the other portions of the two lots which had a total area of around twenty-four hectares. The record
does not show whether the children of Felipe also cultivated some portions of the lots but it is established that
Rufino and his children left the province to settle in other places as a result of the outbreak of World War II.
According to Estelita, from the "Japanese time up to peace time", they did not visit the parcels of land in

The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of
4
Fortunato D. Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ). Said transfer certificate of title
also contains a certification to the effect that Lot 773-B was originally registered under OCT No. 8804.
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum of
5
P7,000.00. Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebella's
6
name.
After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de
Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a
7
8
motion requesting authority to sell Lots 773-A and 773-B. By virtue of a court order granting said motion, on
9
March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez. Hence, on April 1,
1958 TCT Nos. T-23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo
10
Alvarez.
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita,
Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato
Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of
the ownership and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the
land from 1944 up to the filing of the complaint be made by the defendants, that after court approval of said
accounting, the share or money equivalent due the plaintiffs be delivered to them, and that defendants be
11
ordered to pay plaintiffs P500.00 as damages in the form of attorney's fees.
During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another
12
13
lot for P25,000.00 to Dr. Rodolfo Siason. Accordingly, TCT Nos. 30919 and 30920 were issued to Siason, who
14
thereafter, declared the two lots in his name for assessment purposes.
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs, and
assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce,
forfeit and quitclaims (sic) any claim, monetary or otherwise, against the defendant Arsenia Vda. de Fuentebella
15
in connection with the above-entitled case."
On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case
No. 5022, the dispositive portion of which reads:
WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the plaintiffs lots
Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered by Transfer Certificates of

Title Nos. T-23165 and T-23166 in the name of said defendant, and thereafter to deliver the possession of said
lots to the plaintiffs. No special pronouncement as to costs.
SO ORDERED.

16

It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid
decision.
However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated
October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and
773-B; that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773
17
could not be delivered to the plaintiffs as Siason was "not a party per writ of execution."
The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the
Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a
new certificate of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo
18
Alvarez. Thereafter, the court required Rodolfo Siason to produce the certificates of title covering Lots 773 and
823.
Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and
823, "in good faith and for a valuable consideration without any knowledge of any lien or encumbrances against
19
said properties"; that the decision in the cadastral proceeding could not be enforced against him as he was not
a party thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only
20
because he was not a party-litigant therein but also because it had long become final and executory. Finding
said manifestation to be well-founded, the cadastral court, in its order of September 4, 1965, nullified its
21
previous order requiring Siason to surrender the certificates of title mentioned therein.
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022.
22
Siason opposed it. In its order of September 28, 1968 in Civil Case No. 5022, the lower court, noting that the
Yaneses had instituted another action for the recovery of the land in question, ruled that at the judgment therein
23
could not be enforced against Siason as he was not a party in the case.
24

The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages. Named
defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of
Deeds of Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to
Siason (sic) for being null and void; the issuance of a new certificate of title in the name of the Yaneses "in
accordance with the sheriffs return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773
to the Yaneses; and if, delivery thereof could not be effected, or, if the issuance of a new title could not be made,
that the Alvarez and Siason jointly and severally pay the Yaneses the sum of P45,000.00. They also prayed that
Siason render an accounting of the fruits of Lot 773 from November 13, 1961 until the filing of the complaint;
and that the defendants jointly and severally pay the Yaneses moral damages of P20,000.00 and exemplary
25
damages of P10,000.00 plus attorney's fees of P4, 000.00.

In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been
passed upon by the court in its order of September 4, 1965, had become res judicata and the Yaneses were
26
estopped from questioning said order. On their part, the Alvarez stated in their answer that the Yaneses' cause
27
of action had been "barred byres judicata, statute of limitation and estoppel."
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in
question thru an agent as he was then in Mexico pursuing further medical studies, was a buyer in good faith for a
valuable consideration. Although the Yaneses were negligent in their failure to place a notice of lis
pendens "before the Register of Deeds of Negros Occidental in order to protect their rights over the property in
question" in Civil Case No. 5022, equity demanded that they recover the actual value of the land because the
28
sale thereof executed between Alvarez and Siason was without court approval. The dispositive portion of the
decision states:
IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following manner:
A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby dismmissed,
B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children of the
deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre, Negros Occidental; the sum of
P2,000.00 as actual damages suffered by the plaintiff; the sum of P5,000.00 representing moral damages and the
sum of P2.000 as attorney's fees, all with legal rate of interest from date of the filing of this complaint up to final
payment.
C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora and Raymundo,
all surnamed Alvarez is hereby dismissed.
D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the costs of this suit.
SO ORDERED.

29

The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31,
30
1983 affirmed the lower court's decision "insofar as it ordered defendants-appellants to pay jointly and
severally the plaintiffs-appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and
773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of
31
P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively." The
dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to pay jointly
and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and
773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of
P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively. No
costs.

SO ORDERED.

32

Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same.
Hence, the instant petition. ln their memorandum petitioners raised the following issues:
1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked and raised by
the petitioners in the lower court.
2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any, as alleged
in their complaint dated February 21, 1968 which has been docketed in the trial court as Civil Case No.
8474 supra, are forever barred by statute of limitation and/or prescription of action and estoppel.
3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of the
petitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil Case No.
8474,supra where the private respondents had unqualifiedly and absolutely waived, renounced and quitclaimed
all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and 773-B of Murcia Cadastre as
appearing in their written manifestation dated November 6, 1962 (Exhibits "4" Siason) which had not been
controverted or even impliedly or indirectly denied by them.
4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and 773-B
of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed or transmitted by
33
operations (sic) of law to the petitioners without violation of law and due process .
The petition is devoid of merit.
As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review
the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents.
Said decision had long become final and executory and with the possible exception of Dr. Siason, who was not a
party to said case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended
34
when Alvarez or his heirs failed to appeal the decision against them.
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with
35
them in law or estate. As consistently ruled by this Court, every litigation must come to an end. Access to the
court is guaranteed. But there must be a limit to it. Once a litigant's right has been adjudicated in a valid final
judgment of a competent court, he should not be granted an unbridled license to return for another try. The
prevailing party should not be harassed by subsequent suits. For, if endless litigation were to be allowed,
36
unscrupulous litigations will multiply in number to the detriment of the administration of justice.
There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in
Civil Case No. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have
37
been illegally deprived of ownership and possession of the lots in question. In fact, Civil Case No. 8474 now
under review, arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed

to private respondents Yaneses, the same having been sold during the pendency of the case by the petitioners'
father to Dr. Siason who did not know about the controversy, there being no lis pendens annotated on the titles.
Hence, it was also settled beyond question that Dr. Siason is a purchaser in good faith.
Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on
November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil
Case No. 5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the
38
actual value of the subdivided lots in dispute. It did not order defendant Siason to pay said amount.
As to the propriety of the present case, it has long been established that the sole remedy of the landowner
whose property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in
the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent
39
purchaser for value, for damages. "It is one thing to protect an innocent third party; it is entirely a different
matter and one devoid of justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits
of his nefarious decided As clearly revealed by the undeviating line of decisions coming from this Court, such an
40
undesirable eventuality is precisely sought to be guarded against."
The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor
of private respondents, it cannot now be reopened in the instant case on the pretext that the defenses of
prescription and estoppel have not been properly considered by the lower court. Petitioners could have
appealed in the former case but they did not. They have therefore foreclosed their rights, if any, and they cannot
now be heard to complain in another case in order to defeat the enforcement of a judgment which has longing
become final and executory.
Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo
Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his
death.
Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus, the
pertinent provisions of the Civil Code state:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent
of the value of the inheritance, of a person are transmitted through his death to another or others either by his
will or by operation of law.
Art. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished
by his death.
Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case where the rights
and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision
of law. The heir is not liable beyond the value of the property received from the decedent.

As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon Surety
41
Co., Inc.

Priscilo
Brigido G. Estrada for appellant.

The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules
of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is
distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from the state is
ultimately a payment by the heirs or distributees, since the amount of the paid claim in fact diminishes or
reduces the shares that the heirs would have been entitled to receive.

BAUTISTA ANGELO, J.:

Under our law, therefore. the general rule is that a party's contractual rights and obligations are transmissible to
the successors.
The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties that, as
observed by Victorio Polacco has characterized the history of these institutions. From the Roman concept of a
relation from person to person, the obligation has evolved into a relation from patrimony to patrimony with the
persons occupying only a representative position, barring those rare cases where the obligation is strictly
personal, i.e., is contracted intuitu personae, in consideration of its performance by a specific person and by no
other.

Evangelista

for

appellee.

This is an action for recovery of the ownership and possession of five (5) parcels of land situated in the
Municipality of Labrador, Province of Pangasinan, filed by Maria Uson against Maria del Rosario and her four
children named Concepcion, Conrado, Dominador, and Faustino, surnamed Nebreda, who are all of minor age,
before the Court of First Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands involved in this
litigation. Faustino Nebreda left no other heir except his widow Maria Uson. However, plaintiff claims that when
Faustino Nebreda died in 1945, his common-law wife Maria del Rosario took possession illegally of said lands
thus depriving her of their possession and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson and her husband,
the late Faustino Nebreda, executed a public document whereby they agreed to separate as husband and wife
and, in consideration of their separation, Maria Uson was given a parcel of land by way of alimony and in return
she renounced her right to inherit any other property that may be left by her husband upon his death (Exhibit 1).

xxx xxx xxx

Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their
father's transaction, which gave rise to the present claim for damages. That petitioners did not inherit the
property involved herein is of no moment because by legal fiction, the monetary equivalent thereof devolved
into the mass of their father's hereditary estate, and we have ruled that the hereditary assets are always liable in
42
their totality for the payment of the debts of the estate.
It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance.
With this clarification and considering petitioners' admission that there are other properties left by the deceased
which are sufficient to cover the amount adjudged in favor of private respondents, we see no cogent reason to
disturb the findings and conclusions of the Court of Appeals.
WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
EN BANC
G.R. No. L-4963

January 29, 1953

MARIA
USON, plaintiff-appellee,
vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO
NEBREDA, Jr., defendants-appellants.

After trial, at which both parties presented their respective evidence, the court rendered decision ordering the
defendants to restore to the plaintiff the ownership and possession of the lands in dispute without special
pronouncement as to costs. Defendants interposed the present appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda, former owner of
the five parcels of lands litigated in the present case. There is likewise no dispute that Maria del Rosario, one of
the defendants-appellants, was merely a common-law wife of the late Faustino Nebreda with whom she had
four illegitimate children, her now co-defendants. It likewise appears that Faustino Nebreda died in 1945 much
prior to the effectivity of the new Civil Code. With this background, it is evident that when Faustino Nebreda died
in 1945 the five parcels of land he was seized of at the time passed from the moment of his death to his only
heir, his widow Maria Uson (Article 657, old Civil Code).As this Court aptly said, "The property belongs to the
heirs at the moment of the death of the ancestor as completely as if the ancestor had executed and delivered to
them a deed for the same before his death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment,
therefore, the rights of inheritance of Maria Uson over the lands in question became vested.
The claim of the defendants that Maria Uson had relinquished her right over the lands in question because she
expressly renounced to inherit any future property that her husband may acquire and leave upon his death in
the deed of separation they had entered into on February 21, 1931, cannot be entertained for the simple reason
that future inheritance cannot be the subject of a contract nor can it be renounced (1 Manresa, 123, sixth
edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio and Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are illegitimate children of the late
Faustino Nebreda and under the old Civil Code are not entitled to any successional rights, however, under the
new Civil Code which became in force in June, 1950, they are given the status and rights of natural children and

are entitled to the successional rights which the law accords to the latter (article 2264 and article 287, new Civil
Code), and because these successional rights were declared for the first time in the new code, they shall be given
retroactive effect even though the event which gave rise to them may have occurred under the prior legislation
(Article 2253, new Civil Code).
There is no merit in this claim. Article 2253 above referred to provides indeed that rights which are declared for
the first time shall have retroactive effect even though the event which gave rise to them may have occurred
under the former legislation, but this is so only when the new rights do not prejudice any vested or acquired
right of the same origin. Thus, said article provides that "if a right should be declared for the first time in this
Code, it shall be effective at once, even though the act or event which gives rise thereto may have been done or
may have occurred under the prior legislation, provided said new right does not prejudice or impair any vested
or acquired right, of the same origin." As already stated in the early part of this decision, the right of ownership
of Maria Uson over the lands in question became vested in 1945 upon the death of her late husband and this is
so because of the imperative provision of the law which commands that the rights to succession are transmitted
from the moment of death (Article 657, old Civil Code). The new right recognized by the new Civil Code in favor
of the illegitimate children of the deceased cannot, therefore, be asserted to the impairment of the vested right
of Maria Uson over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was lying in state, in a gesture of pity or
compassion, agreed to assign the lands in question to the minor children for the reason that they were acquired
while the deceased was living with their mother and Maria Uson wanted to assuage somewhat the wrong she
has done to them, this much can be said; apart from the fact that this claim is disputed, we are of the opinion
that said assignment, if any, partakes of the nature of a donation of real property, inasmuch as it involves no
material consideration, and in order that it may be valid it shall be made in a public document and must be
accepted either in the same document or in a separate one (Article 633, old Civil Code). Inasmuch as this
essential formality has not been followed, it results that the alleged assignment or donation has no valid effect.

G.R. No. L-28611 August 18, 1972

TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate Estate of the late Francisco de Borja, plaintiffappellee,
vs.
JOSE DE BORJA, as Administrator of the Testate Estate of the late Josefa Tangco, defendant-appellant.
L-28040
Pelaez, Jalandoni & Jamir for administrator-appellee.
Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
L-28568
Sevilla & Aquino for special administratrix-appellee.
Pelaez, Jalandoni & Jamir for oppositor-appellant.
L-28611
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant.

WHEREFORE, the decision appealed from is affirmed, without costs.

G.R. No. L-28040 August 18, 1972

REYES, J.B.L., J.:p

TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administrator-appellee; JOSE DE BORJA, as

administrator, CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO DE BORJA (deceased) as Children of
Josefa
Tangco, appellees,
vs.
TASIANA VDA. DE DE BORJA, Special Administratrix of the Testate Estate of Francisco de Borja, appellant. .

Of these cases, the first, numbered L-28040 is an appeal by Tasiana Ongsingco Vda. de de Borja, special
1
administratrix of the testate estate of Francisco de Borja, from the approval of a compromise agreement by the
Court of First Instance of Rizal, Branch I, in its Special Proceeding No. R-7866, entitled, "Testate Estate of Josefa
Tangco, Jose de Borja, Administrator".

G.R. No L-28568 August 18, 1972

TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA. DE DE BORJA, special Administratrix
appellee,
vs.
JOSE DE BORJA, oppositor-appellant.

Case No. L-28568 is an appeal by administrator Jose Borja from the disapproval of the same compromise
agreement by the Court of First Instance of Nueva Ecija, Branch II, in its Special Proceeding No. 832, entitled,
"Testate Estate of Francisco de Borja, Tasiana O. Vda. de de Borja, Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de Borja from the decision of the Court of First Instance
of Rizal, Branch X, in its Civil Case No. 7452, declaring the Hacienda Jalajala Poblacion, which is the main object of
the aforesaid compromise agreement, as the separate and exclusive property of the late Francisco de Borja and
not a conjugal asset of the community with his first wife, Josefa Tangco, and that said hacienda pertains

exclusively to his testate estate, which is under administrator in Special Proceeding No. 832 of the Court of First
Instance of Nueva Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his wife Josefa Tangco on 6 October 1940, filed a
petition for the probate of her will which was docketed as Special Proceeding No. R-7866 of the Court of First
Instance of Rizal, Branch I. The will was probated on 2 April 1941. In 1946, Francisco de Borja was appointed
executor and administrator: in 1952, their son, Jose de Borja, was appointed co-administrator. When Francisco
died, on 14 April 1954, Jose became the sole administrator of the testate estate of his mother, Josefa Tangco.
While a widower Francisco de Borja allegedly took unto himself a second wife, Tasiana Ongsingco. Upon
Francisco's death, Tasiana instituted testate proceedings in the Court of First Instance of Nueva Ecija, where, in
1955, she was appointed special administratrix. The validity of Tasiana's marriage to Francisco was questioned in
said proceeding.
The relationship between the children of the first marriage and Tasiana Ongsingco has been plagued with several
court suits and counter-suits; including the three cases at bar, some eighteen (18) cases remain pending
determination in the courts. The testate estate of Josefa Tangco alone has been unsettled for more than a
quarter of a century. In order to put an end to all these litigations, a compromise agreement was entered into on
2
12 October 1963, by and between "[T]he heir and son of Francisco de Borja by his first marriage, namely, Jose
de Borja personally and as administrator of the Testate Estate of Josefa Tangco," and "[T]he heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer,
Atty. Luis Panaguiton Jr." The terms and conditions of the compromise agreement are as follows:
AGREEMENT
THIS AGREEMENT made and entered into by and between
The heir and son of Francisco de Borja by his first marriage, namely, Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco,
AND
The heir and surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de Borja,
assisted by her lawyer, Atty. Luis Panaguiton Jr.
WITNESSETH
THAT it is the mutual desire of all the parties herein terminate and settle, with finality, the various court
litigations, controversies, claims, counterclaims, etc., between them in connection with the administration,
settlement, partition, adjudication and distribution of the assets as well as liabilities of the estates of Francisco
de Borja and Josefa Tangco, first spouse of Francisco de Borja.
THAT with this end in view, the parties herein have agreed voluntarily and without any reservations to enter into
and execute this agreement under the following terms and conditions:

1. That the parties agree to sell the Poblacion portion of the Jalajala properties situated in Jalajala, Rizal,
presently under administration in the Testate Estate of Josefa Tangco (Sp. Proc. No. 7866, Rizal), more
specifically described as follows:
Linda al Norte con el Rio Puwang que la separa de la jurisdiccion del Municipio de Pililla de la Provincia de Rizal, y
con el pico del Monte Zambrano; al Oeste con Laguna de Bay; por el Sur con los herederos de Marcelo de Borja;
y por el Este con los terrenos de la Familia Maronilla
with a segregated area of approximately 1,313 hectares at the amount of P0.30 per square meter.
2. That Jose de Borja agrees and obligates himself to pay Tasiana Ongsingco Vda. de de Borja the total amount of
Eight Hundred Thousand Pesos (P800,000) Philippine Currency, in cash, which represent P200,000 as his share in
the payment and P600,000 as pro-rata shares of the heirs Crisanto, Cayetano and Matilde, all surnamed de Borja
and this shall be considered as full and complete payment and settlement of her hereditary share in the estate of
the late Francisco de Borja as well as the estate of Josefa Tangco, Sp. Proc. No. 832-Nueva Ecija and Sp. Proc. No.
7866-Rizal, respectively, and to any properties bequeathed or devised in her favor by the late Francisco de Borja
by Last Will and Testament or by Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise. The funds for this payment shall be taken from and shall depend upon the receipt of
full payment of the proceeds of the sale of Jalajala, "Poblacion."
3. That Tasiana Ongsingco Vda. de de Borja hereby assumes payment of that particular obligation incurred by the
late Francisco de Borja in favor of the Rehabilitation Finance Corporation, now Development Bank of the
Philippines, amounting to approximately P30,000.00 and also assumes payment of her 1/5 share of the Estate
and Inheritance taxes on the Estate of the late Francisco de Borja or the sum of P3,500.00, more or less, which
shall be deducted by the buyer of Jalajala, "Poblacion" from the payment to be made to Tasiana Ongsingco Vda.
de Borja under paragraph 2 of this Agreement and paid directly to the Development Bank of the Philippines and
the heirs-children of Francisco de Borja.
4. Thereafter, the buyer of Jalajala "Poblacion" is hereby authorized to pay directly to Tasiana Ongsingco Vda. de
de Borja the balance of the payment due her under paragraph 2 of this Agreement (approximately P766,500.00)
and issue in the name of Tasiana Ongsingco Vda. de de Borja, corresponding certified checks/treasury warrants,
who, in turn, will issue the corresponding receipt to Jose de Borja.
5. In consideration of above payment to Tasiana Ongsingco Vda. de de Borja, Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco, and Tasiana Ongsingco Vda. de de Borja, for themselves
and for their heirs, successors, executors, administrators, and assigns, hereby forever mutually renounce,
withdraw, waive, remise, release and discharge any and all manner of action or actions, cause or causes of
action, suits, debts, sum or sums of money, accounts, damages, claims and demands whatsoever, in law or in
equity, which they ever had, or now have or may have against each other, more specifically Sp. Proceedings Nos.
7866 and 1955, CFI-Rizal, and Sp. Proc. No. 832-Nueva Ecija, Civil Case No. 3033, CFI Nueva Ecija and Civil Case
No. 7452-CFI, Rizal, as well as the case filed against Manuel Quijal for perjury with the Provincial Fiscal of Rizal,
the intention being to completely, absolutely and finally release each other, their heirs, successors, and assigns,
from any and all liability, arising wholly or partially, directly or indirectly, from the administration, settlement,
and distribution of the assets as well as liabilities of the estates of Francisco de Borja and Josefa Tangco, first

spouse of Francisco de Borja, and lastly, Tasiana Ongsingco Vda. de de Borja expressly and specifically renounce
absolutely her rights as heir over any hereditary share in the estate of Francisco de Borja.
6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the payment under paragraph 4 hereof, shall deliver
to the heir Jose de Borja all the papers, titles and documents belonging to Francisco de Borja which are in her
possession and said heir Jose de Borja shall issue in turn the corresponding receive thereof.
7. That this agreement shall take effect only upon the fulfillment of the sale of the properties mentioned under
paragraph 1 of this agreement and upon receipt of the total and full payment of the proceeds of the sale of the
Jalajala property "Poblacion", otherwise, the non-fulfillment of the said sale will render this instrument NULL
AND VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have her unto set their hands in the City of Manila, Philippines, the
12th of October, 1963.
On 16 May 1966, Jose de Borja submitted for Court approval the agreement of 12 October 1963 to the Court of
First Instance of Rizal, in Special Proceeding No. R-7866; and again, on 8 August 1966, to the Court of First
Instance of Nueva Ecija, in Special Proceeding No. 832. Tasiana Ongsingco Vda. de de Borja opposed in both
instances. The Rizal court approved the compromise agreement, but the Nueva Ecija court declared it void and
unenforceable. Special administratrix Tasiana Ongsingco Vda. de de Borja appealed the Rizal Court's order of
approval (now Supreme Court G.R. case No. L-28040), while administrator Jose de Borja appealed the order of
disapproval (G.R. case No. L-28568) by the Court of First Instance of Nueva Ecija.
The genuineness and due execution of the compromised agreement of 12 October 1963 is not disputed, but its
validity is, nevertheless, attacked by Tasiana Ongsingco on the ground that: (1) the heirs cannot enter into such
kind of agreement without first probating the will of Francisco de Borja; (2) that the same involves a compromise
on the validity of the marriage between Francisco de Borja and Tasiana Ongsingco; and (3) that even if it were
valid, it has ceased to have force and effect.
In assailing the validity of the agreement of 12 October 1963, Tasiana Ongsingco and the Probate Court of Nueva
Ecija rely on this Court's decision in Guevara vs. Guevara. 74 Phil. 479, wherein the Court's majority held the view
that the presentation of a will for probate is mandatory and that the settlement and distribution of an estate on
the basis of intestacy when the decedent left a will, is against the law and public policy. It is likewise pointed out
by appellant Tasiana Ongsingco that Section 1 of Rule 74 of the Revised Rules explicitly conditions the validity of
an extrajudicial settlement of a decedent's estate by agreement between heirs, upon the facts that "(if) the
decedent left no will and no debts, and the heirs are all of age, or the minors are represented by their judicial
and legal representatives ..." The will of Francisco de Borja having been submitted to the Nueva Ecija Court and
still pending probate when the 1963 agreement was made, those circumstances, it is argued, bar the validity of
the agreement.
Upon the other hand, in claiming the validity of the compromise agreement, Jose de Borja stresses that at the
time it was entered into, on 12 October 1963, the governing provision was Section 1, Rule 74 of the original
Rules of Court of 1940, which allowed the extrajudicial settlement of the estate of a deceased person regardless
of whether he left a will or not. He also relies on the dissenting opinion of Justice Moran, in Guevara vs. Guevara,

74 Phil. 479, wherein was expressed the view that if the parties have already divided the estate in accordance
with a decedent's will, the probate of the will is a useless ceremony; and if they have divided the estate in a
different manner, the probate of the will is worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar. This is apparent from an
examination of the terms of the agreement between Jose de Borja and Tasiana Ongsingco. Paragraph 2 of said
agreement specifically stipulates that the sum of P800,000 payable to Tasiana Ongsingco
shall be considered as full complete payment settlement of her hereditary share in the estate of the late
Francisco de Borja as well as the estate of Josefa Tangco, ... and to any properties bequeathed or devised in her
favor by the late Francisco de Borja by Last Will and Testament or by Donation Inter Vivos or Mortis Causa or
purportedly conveyed to her for consideration or otherwise.
This provision evidences beyond doubt that the ruling in the Guevara case is not applicable to the cases at bar.
There was here no attempt to settle or distribute the estate of Francisco de Borja among the heirs thereto
before the probate of his will. The clear object of the contract was merely the conveyance by Tasiana Ongsingco
of any and all her individual share and interest, actual or eventual in the estate of Francisco de Borja and Josefa
Tangco. There is no stipulation as to any other claimant, creditor or legatee. And as a hereditary share in a
decedent's estate is transmitted or vested immediately from the moment of the death of such causante or
3
predecessor in interest (Civil Code of the Philippines, Art. 777) there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or his hereditary share immediately after such death, even if the
4
actual extent of such share is not determined until the subsequent liquidation of the estate. Of course, the
effect of such alienation is to be deemed limited to what is ultimately adjudicated to the vendor heir. However,
the aleatory character of the contract does not affect the validity of the transaction; neither does the
coetaneous agreement that the numerous litigations between the parties (the approving order of the Rizal Court
enumerates fourteen of them, Rec. App. pp. 79-82) are to be considered settled and should be dismissed,
although such stipulation, as noted by the Rizal Court, gives the contract the character of a compromise that the
law favors, for obvious reasons, if only because it serves to avoid a multiplicity of suits.
It is likewise worthy of note in this connection that as the surviving spouse of Francisco de Borja, Tasiana
Ongsingco was his compulsory heir under article 995 et seq. of the present Civil Code. Wherefore, barring
unworthiness or valid disinheritance, her successional interest existed independent of Francisco de Borja's last
will and testament and would exist even if such will were not probated at all. Thus, the prerequisite of a previous
probate of the will, as established in the Guevara and analogous cases, can not apply to the case of Tasiana
Ongsingco Vda. de de Borja.
Since the compromise contract Annex A was entered into by and between "Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco" on the one hand, and on the other, "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de de Borja", it is clear that the
transaction was binding on both in their individual capacities, upon the perfection of the contract, even without
previous authority of the Court to enter into the same. The only difference between an extrajudicial compromise
and one that is submitted and approved by the Court, is that the latter can be enforced by execution
proceedings. Art. 2037 of the Civil Code is explicit on the point:

8. Art. 2037. A compromise has upon the parties the effect and authority of res judicata; but there shall be no
execution except in compliance with a judicial compromise.

of whomsoever she chose. Such alienation is expressly recognized and provided for by article 1088 of the
present Civil Code:

It is argued by Tasiana Ongsingco that while the agreement Annex A expressed no definite period for its
performance, the same was intended to have a resolutory period of 60 days for its effectiveness. In support of
such contention, it is averred that such a limit was expressly stipulated in an agreement in similar terms entered
into by said Ongsingco with the brothers and sister of Jose de Borja, to wit, Crisanto, Matilde and Cayetano, all
surnamed de Borja, except that the consideration was fixed at P600,000 (Opposition, Annex/Rec. of Appeal, L28040, pp. 39- 46) and which contained the following clause:

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the coheirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided
they do so within the period of one month from the time they were notified in writing of the sale of the vendor.

III. That this agreement shall take effect only upon the consummation of the sale of the property mentioned
herein and upon receipt of the total and full payment of the proceeds of the sale by the herein owner heirschildren of Francisco de Borja, namely, Crisanto, Cayetano and Matilde, all surnamed de Borja; Provided that if
no sale of the said property mentioned herein is consummated, or the non-receipt of the purchase price thereof
by the said owners within the period of sixty (60) days from the date hereof, this agreement will become null and
void and of no further effect.

Tasiana Ongsingco further argues that her contract with Jose de Borja (Annex "A") is void because it amounts to
a compromise as to her status and marriage with the late Francisco de Borja. The point is without merit, for the
very opening paragraph of the agreement with Jose de Borja (Annex "A") describes her as "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de de Borja", which is in itself
definite admission of her civil status. There is nothing in the text of the agreement that would show that this
recognition of Ongsingco's status as the surviving spouse of Francisco de Borja was only made in consideration of
the cession of her hereditary rights.

Ongsingco's argument loses validity when it is considered that Jose de Borja was not a party to this particular
contract (Annex 1), and that the same appears not to have been finalized, since it bears no date, the day being
left blank "this day of October 1963"; and while signed by the parties, it was not notarized, although plainly
intended to be so done, since it carries a proposed notarial ratification clause. Furthermore, the compromise
contract with Jose de Borja (Annex A), provides in its par. 2 heretofore transcribed that of the total consideration
of P800, 000 to be paid to Ongsingco, P600,000 represent the "prorata share of the heirs Crisanto, Cayetano and
Matilde all surnamed de Borja" which corresponds to the consideration of P600,000 recited in Annex 1, and that
circumstance is proof that the duly notarized contract entered into wit Jose de Borja under date 12 October 1963
(Annex A), was designed to absorb and supersede the separate unformalize agreement with the other three
Borja heirs. Hence, the 60 days resolutory term in the contract with the latter (Annex 1) not being repeated in
Annex A, can not apply to the formal compromise with Jose de Borja. It is moreover manifest that the stipulation
that the sale of the Hacienda de Jalajala was to be made within sixty days from the date of the agreement with
Jose de Borja's co-heirs (Annex 1) was plainly omitted in Annex A as improper and ineffective, since the Hacienda
de Jalajala (Poblacion) that was to be sold to raise the P800,000 to be paid to Ongsingco for her share formed
part of the estate of Francisco de Borja and could not be sold until authorized by the Probate Court. The Court of
First Instance of Rizal so understood it, and in approving the compromise it fixed a term of 120 days counted
from the finality of the order now under appeal, for the carrying out by the parties for the terms of the contract.
This brings us to the plea that the Court of First Instance of Rizal had no jurisdiction to approve the compromise
with Jose de Borja (Annex A) because Tasiana Ongsingco was not an heir in the estate of Josefa Tangco pending
settlement in the Rizal Court, but she was an heir of Francisco de Borja, whose estate was the object of Special
Proceeding No. 832 of the Court of First Instance of Nueva Ecija. This circumstance is irrelevant, since what was
sold by Tasiana Ongsingco was only her eventual share in the estate of her late husband, not the estate itself;
and as already shown, that eventual share she owned from the time of Francisco's death and the Court of Nueva
Ecija could not bar her selling it. As owner of her undivided hereditary share, Tasiana could dispose of it in favor

If a sale of a hereditary right can be made to a stranger, then a fortiori sale thereof to a coheir could not be
forbidden.

It is finally charged by appellant Ongsingco, as well as by the Court of First Instance of Nueva Ecija in its order of
21 September 1964, in Special Proceedings No. 832 (Amended Record on Appeal in L-28568, page 157), that the
compromise agreement of 13 October 1963 (Annex "A") had been abandoned, as shown by the fact that, after
its execution, the Court of First Instance of Nueva Ecija, in its order of 21 September 1964, had declared that "no
amicable settlement had been arrived at by the parties", and that Jose de Borja himself, in a motion of 17 June
1964, had stated that the proposed amicable settlement "had failed to materialize".
It is difficult to believe, however, that the amicable settlement referred to in the order and motion abovementioned was the compromise agreement of 13 October 1963, which already had been formally signed and
executed by the parties and duly notarized. What the record discloses is that some time after its formalization,
Ongsingco had unilaterally attempted to back out from the compromise agreement, pleading various reasons
restated in the opposition to the Court's approval of Annex "A" (Record on Appeal, L-20840, page 23): that the
same was invalid because of the lapse of the allegedly intended resolutory period of 60 days and because the
contract was not preceded by the probate of Francisco de Borja's will, as required by this Court's Guevarra vs.
Guevara ruling; that Annex "A" involved a compromise affecting Ongsingco's status as wife and widow of
Francisco de Borja, etc., all of which objections have been already discussed. It was natural that in view of the
widow's attitude, Jose de Borja should attempt to reach a new settlement or novatory agreement before seeking
judicial sanction and enforcement of Annex "A", since the latter step might ultimately entail a longer delay in
attaining final remedy. That the attempt to reach another settlement failed is apparent from the letter of
Ongsingco's counsel to Jose de Borja quoted in pages 35-36 of the brief for appellant Ongsingco in G.R. No.
28040; and it is more than probable that the order of 21 September 1964 and the motion of 17 June 1964
referred to the failure of the parties' quest for a more satisfactory compromise. But the inability to reach a
novatory accord can not invalidate the original compromise (Annex "A") and justifies the act of Jose de Borja in
finally seeking a court order for its approval and enforcement from the Court of First Instance of Rizal, which, as

heretofore described, decreed that the agreement be ultimately performed within 120 days from the finality of
the order, now under appeal.
We conclude that in so doing, the Rizal court acted in accordance with law, and, therefore, its order should be
upheld, while the contrary resolution of the Court of First Instance of Nueva Ecija should be, and is, reversed.
In her brief, Tasiana Ongsingco also pleads that the time elapsed in the appeal has affected her unfavorably, in
that while the purchasing power of the agreed price of P800,000 has diminished, the value of the Jalajala
property has increased. But the fact is that her delay in receiving the payment of the agreed price for her
hereditary interest was primarily due to her attempts to nullify the agreement (Annex "A") she had formally
entered into with the advice of her counsel, Attorney Panaguiton. And as to the devaluation de facto of our
currency, what We said in Dizon Rivera vs. Dizon, L-24561, 30 June 1970, 33 SCRA 554, that "estates would never
be settled if there were to be a revaluation with every subsequent fluctuation in the values of currency and
properties of the estate", is particularly opposite in the present case.
Coming now to Case G.R. No. L-28611, the issue is whether the Hacienda de Jalajala (Poblacion), concededly
acquired by Francisco de Borja during his marriage to his first wife, Josefa Tangco, is the husband's private
property (as contended by his second spouse, Tasiana Ongsingco), or whether it forms part of the conjugal
(ganancial) partnership with Josefa Tangco. The Court of First Instance of Rizal (Judge Herminio Mariano,
presiding) declared that there was adequate evidence to overcome the presumption in favor of its conjugal
character established by Article 160 of the Civil Code.
We are of the opinion that this question as between Tasiana Ongsingco and Jose de Borja has become moot and
academic, in view of the conclusion reached by this Court in the two preceding cases (G.R. No. L-28568),
upholding as valid the cession of Tasiana Ongsingco's eventual share in the estate of her late husband, Francisco
de Borja, for the sum of P800,000 with the accompanying reciprocal quit-claims between the parties. But as the
question may affect the rights of possible creditors and legatees, its resolution is still imperative.
It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, had been originally acquired jointly by
Francisco de Borja, Bernardo de Borja and Marcelo de Borja and their title thereto was duly registered in their
names as co-owners in Land Registration Case No. 528 of the province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo
vs. Jugo, 54 Phil. 465). Subsequently, in 1931, the Hacienda was partitioned among the co-owners: the Punta
section went to Marcelo de Borja; the Bagombong section to Bernardo de Borja, and the part in Jalajala proper
(Poblacion) corresponded to Francisco de Borja (V. De Borja vs. De Borja 101 Phil. 911, 932).
The lot allotted to Francisco was described as

described declared exclusive private property of Francisco, while in his answer defendant (now appellant) Jose
de Borja claimed that it was conjugal property of his parents (Francisco de Borja and Josefa Tangco), conformably
to the presumption established by Article 160 of the Philippine Civil Code (reproducing Article 1407 of the Civil
Code of 1889), to the effect that:
Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that
it pertains exclusively to the husband or to the wife.
Defendant Jose de Borja further counterclaimed for damages, compensatory, moral and exemplary, as well as
for attorney's fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio Mariano, held that the plaintiff had adduced
sufficient evidence to rebut the presumption, and declared the Hacienda de Jalajala (Poblacion) to be the
exclusive private property of the late Francisco de Borja, and his Administratrix, Tasiana Ongsingco Vda. de Borja,
to be entitled to its possession. Defendant Jose de Borja then appealed to this Court.
The evidence reveals, and the appealed order admits, that the character of the Hacienda in question as owned
by the conjugal partnership De Borja-Tangco was solemnly admitted by the late Francisco de Borja no less than
two times: first, in the Reamended Inventory that, as executor of the estate of his deceased wife Josefa Tangco,
he filed in the Special Proceedings No. 7866 of the Court of First Instance of Rizal on 23 July 1953 (Exhibit "2");
and again, in the Reamended Accounting of the same date, also filed in the proceedings aforesaid (Exhibit "7").
Similarly, the plaintiff Tasiana O. Vda. de Borja, herself, as oppositor in the Estate of Josefa Tangco, submitted
therein an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala property among the "Conjugal
Properties of the Spouses Francisco de Borja and Josefa Tangco". And once more, Tasiana Ongsingco, as
administratrix of the Estate of Francisco de Borja, in Special Proceedings No. 832 of the Court of First Instance of
Nueva Ecija, submitted therein in December, 1955, an inventory wherein she listed the Jalajala Hacienda under
the heading "Conjugal Property of the Deceased Spouses Francisco de Borja and Josefa Tangco, which are in the
possession of the Administrator of the Testate Estate of the Deceased Josefa Tangco in Special Proceedings No.
7866 of the Court of First Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that they are plain admissions against interest made
by both Francisco de Borja and the Administratrix of his estate, in the course of judicial proceedings in the Rizal
and Nueva Ecija Courts, supporting the legal presumption in favor of the conjugal community, the Court below
declared that the Hacienda de Jalajala (Poblacion) was not conjugal property, but the private exclusive property
of the late Francisco de Borja. It did so on the strength of the following evidences: (a) the sworn statement by
Francis de Borja on 6 August 1951 (Exhibit "F") that

Una Parcela de terreno en Poblacion, Jalajala: N. Puang River; E. Hermogena Romero; S. Heirs of Marcelo de
Borja O. Laguna de Bay; containing an area of 13,488,870 sq. m. more or less, assessed at P297,410. (Record on
Appeal, pages 7 and 105)

He tomado possession del pedazo de terreno ya delimitado (equivalente a 1/4 parte, 337 hectareas) adjunto a
mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal).

On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate Estate of Francisco de Borja,
instituted a complaint in the Court of First Instance of Rizal (Civil Case No. 7452) against Jose de Borja, in his
capacity as Administrator of Josefa Tangco (Francisco de Borja's first wife), seeking to have the Hacienda above

and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, that the entire Hacienda had been bought
at a foreclosure sale for P40,100.00, of which amount P25,100 was contributed by Bernardo de Borja and
P15,000. by Marcelo de Borja; that upon receipt of a subsequent demand from the provincial treasurer for realty
taxes the sum of P17,000, Marcelo told his brother Bernardo that Francisco (son of Marcelo) wanted also to be a

co-owner, and upon Bernardo's assent to the proposal, Marcelo issue a check for P17,000.00 to pay the back
taxes and said that the amount would represent Francisco's contribution in the purchase of the Hacienda. The
witness further testified that
Marcelo de Borja said that that money was entrusted to him by Francisco de Borja when he was still a
bachelor and which he derived from his business transactions. (Hearing, 2 February 1965, t.s.n., pages 13-15)
(Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn statement overweighed the admissions in the
inventories relied upon by defendant-appellant Jose de Borja since probate courts can not finally determine
questions of ownership of inventoried property, but that the testimony of Gregorio de Borja showed that
Francisco de Borja acquired his share of the original Hacienda with his private funds, for which reason that share
can not be regarded as conjugal partnership property, but as exclusive property of the buyer, pursuant to Article
1396(4) of Civil Code of 1889 and Article 148(4) of the Civil Code of the Philippines.
The following shall be the exclusive property of each spouse:
xxx xxx xxx
(4) That which is purchased with exclusive money of the wife or of the husband.
We find the conclusions of the lower court to be untenable. In the first place, witness Gregorio de Borja's
testimony as to the source of the money paid by Francisco for his share was plain hearsay, hence inadmissible
and of no probative value, since he was merely repeating what Marcelo de Borja had told him (Gregorio). There
is no way of ascertaining the truth of the statement, since both Marcelo and Francisco de Borja were already
dead when Gregorio testified. In addition, the statement itself is improbable, since there was no need or
occasion for Marcelo de Borja to explain to Gregorio how and when Francisco de Borja had earned the
P17,000.00 entrusted to Marcelo. A ring of artificiality is clearly discernible in this portion of Gregorio's
testimony.

Hacienda de Jalajala (Poblacion) declared property of the conjugal partnership of Francisco de Borja and Josefa
Tangco.
No error having been assigned against the ruling of the lower court that claims for damages should be ventilated
in the corresponding special proceedings for the settlement of the estates of the deceased, the same requires no
pro announcement from this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of Rizal in Case No. L-28040 is
hereby affirmed; while those involved in Cases Nos. L-28568 and L-28611 are reversed and set aside. Costs
against the appellant Tasiana Ongsingco Vda. de Borja in all three (3) cases.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.
Fernando, J., took no part.
G.R. No. L-41715 June 18, 1976
ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA (their father) who
represents
the
minors, petitioners,
vs.
LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow
of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court of First Instance of Abra, respondents.
Federico Paredes for petitioners.
Demetrio V. Pre for private respondents.

MARTIN, J:
1

As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion thereof (ante, page 14) does not clearly
demonstrate that the "mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal) " refers precisely to the
Hacienda in question. The inventories (Exhibits 3 and 4) disclose that there were two real properties in Jalajala
owned by Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a much bigger one of 1,357.260.70
sq. m., which is evidently the Hacienda de Jalajala (Poblacion). To which of these lands did the affidavit of
Francisco de Borja (Exhibit "F") refer to? In addition, Francisco's characterization of the land as "mi terreno
personal y exclusivo" is plainly self-serving, and not admissible in the absence of cross examination.

This is a petition for review of the Order of the Court of First Instance of Abra in Civil Case No. 856, entitled
Fortunata Barcena vs. Leon Barcena, et al., denying the motions for reconsideration of its order dismissing the
complaint in the aforementioned case.

It may be true that the inventories relied upon by defendant-appellant (Exhibits "2", "3", "4" and "7") are not
conclusive on the conjugal character of the property in question; but as already noted, they are clear admissions
against the pecuniary interest of the declarants, Francisco de Borja and his executor-widow, Tasiana Ongsingco,
and as such of much greater probative weight than the self-serving statement of Francisco (Exhibit "F"). Plainly,
the legal presumption in favor of the conjugal character of the Hacienda de Jalajala (Poblacion) now in dispute
has not been rebutted but actually confirmed by proof. Hence, the appealed order should be reversed and the

On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before the hearing of the
motion to dismiss, the counsel for the plaintiff moved to amend the complaint in order to include certain
allegations therein. The motion to amend the complaint was granted and on July 17, 1975, plaintiffs filed their
amended complaint.

On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of
Ponciano Bonilla, instituted a civil action in the Court of First Instance of Abra, to quiet title over certain parcels
of land located in Abra.

On August 4, 1975, the defendants filed another motion to dismiss the complaint on the ground that Fortunata
Barcena is dead and, therefore, has no legal capacity to sue. Said motion to dismiss was heard on August 14,
1975. In said hearing, counsel for the plaintiff confirmed the death of Fortunata Barcena, and asked for
substitution by her minor children and her husband, the petitioners herein; but the court after the hearing
immediately dismissed the case on the ground that a dead person cannot be a real party in interest and has no
legal personality to sue.
On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the complaint and on
August 23, 1975, he moved to set aside the order of the dismissal pursuant to Sections 16 and 17 of Rule 3 of the
2
Rules of Court.
On August 28, 1975, the court denied the motion for reconsideration filed by counsel for the plaintiff for lack of
merit. On September 1, 1975, counsel for deceased plaintiff filed a written manifestation praying that the minors
Rosalio Bonilla and Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied the
counsel's prayer for lack of merit. From the order, counsel for the deceased plaintiff filed a second motion for
reconsideration of the order dismissing the complaint claiming that the same is in violation of Sections 16 and 17
of Rule 3 of the Rules of Court but the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order dismissing the complaint in Civil Case No. 856
and its orders denying the motion for reconsideration of said order of dismissal. While it is true that a person
who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion.
The records of this case show that the death of Fortunata Barcena took place on July 9, 1975 while the complaint
was filed on March 31, 1975. This means that when the complaint was filed on March 31, 1975, Fortunata
Barcena was still alive, and therefore, the court had acquired jurisdiction over her person. If thereafter she died,
the Rules of Court prescribes the procedure whereby a party who died during the pendency of the proceeding
can be substituted. Under Section 16, Rule 3 of the Rules of Court "whenever a party to a pending case dies ... it
shall be the duty of his attorney to inform the court promptly of such death ... and to give the name and
residence of his executor, administrator, guardian or other legal representatives." This duty was complied with
by the counsel for the deceased plaintiff when he manifested before the respondent Court that Fortunata
Barcena died on July 9, 1975 and asked for the proper substitution of parties in the case. The respondent Court,
however, instead of allowing the substitution, dismissed the complaint on the ground that a dead person has no
legal personality to sue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the
succession are transmitted from the moment of the death of the decedent." From the moment of the death of
the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the
3
decedent, and they cannot be deprived of their rights thereto except by the methods provided for by law. The
moment of death is the determining factor when the heirs acquire a definite right to the inheritance whether
4
such right be pure or contingent. The right of the heirs to the property of the deceased vests in them even
5
before judicial declaration of their being heirs in the testate or intestate proceedings. When Fortunata Barcena,
therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856, was not extinguished by
her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the

properties in litigation and became parties in interest in the case. There is, therefore, no reason for the
respondent Court not to allow their substitution as parties in interest for the deceased plaintiff.
Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal representative of the deceased to appear and be substituted for
the deceased, within such time as may be granted ... ." The question as to whether an action survives or not
6
depends on the nature of the action and the damage sued for. In the causes of action which survive the wrong
complained affects primarily and principally property and property rights, the injuries to the person being merely
incidental, while in the causes of action which do not survive the injury complained of is to the person, the
7
property and rights of property affected being incidental. Following the foregoing criterion the claim of the
deceased plaintiff which is an action to quiet title over the parcels of land in litigation affects primarily and
principally property and property rights and therefore is one that survives even after her death. It is, therefore,
the duty of the respondent Court to order the legal representative of the deceased plaintiff to appear and to be
substituted for her. But what the respondent Court did, upon being informed by the counsel for the deceased
plaintiff that the latter was dead, was to dismiss the complaint. This should not have been done for under the
same Section 17, Rule 3 of the Rules of Court, it is even the duty of the court, if the legal representative fails to
appear, to order the opposing party to procure the appointment of a legal representative of the deceased. In the
instant case the respondent Court did not have to bother ordering the opposing party to procure the
appointment of a legal representative of the deceased because her counsel has not only asked that the minor
children be substituted for her but also suggested that their uncle be appointed as guardian ad litem for them
because their father is busy in Manila earning a living for the family. But the respondent Court refused the
request for substitution on the ground that the children were still minors and cannot sue in court. This is another
grave error because the respondent Court ought to have known that under the same Section 17, Rule 3 of the
Rules of Court, the court is directed to appoint a guardian ad litem for the minor heirs. Precisely in the instant
case, the counsel for the deceased plaintiff has suggested to the respondent Court that the uncle of the minors
be appointed to act as guardian ad litem for them. Unquestionably, the respondent Court has gravely abused its
discretion in not complying with the clear provision of the Rules of Court in dismissing the complaint of the
plaintiff in Civil Case No. 856 and refusing the substitution of parties in the case.
IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the complaint in Civil Case No. 856 of
the Court of First Instance of Abra and the motions for reconsideration of the order of dismissal of said complaint
are set aside and the respondent Court is hereby directed to allow the substitution of the minor children, who
are the petitioners therein for the deceased plaintiff and to appoint a qualified person as guardian ad litem for
them. Without pronouncement as to costs.
SO ORDERED.
G.R. No. L-14070

March 29, 1961

MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS, LEONCIO GERVACIO BLAS and LODA GERVACIO
BLAS,plaintiffs-appellants,
vs.
ROSALINA SANTOS, in her capacity as Special Administratrix of the Estate of the deceased MAXIMA SANTOS

VDA. DE BLAS, in Sp. Proc. No. 2524, Court of First Instance of Rizal, defendants-appellants. MARTA GERVACIO
BLAS and DR. JOSE CHIVI, defendants-appellants.
Teofilo
Sison
and
Nicanor
Sison
De los Santos, Caluag, Pascal and Felizardo for defendants-appellees.

for

plaintiffs-appellants.

LABRADOR, J.:
This action was instituted by plaintiffs against the administration of the estate of Maxima Santos, to secure a
judicial declaration that one-half of the properties left by Maxima Santos Vda. de Blas, the greater bulk of which
are set forth and described in the project of partition presented in the proceedings for the administration of the
estate of the deceased Simeon Blas, had been promised by the deceased Maxima Santos to be delivered upon
her death and in her will to the plaintiffs, and requesting that the said properties so promised be adjudicated to
the plaintiffs. The complaint also prays for actual damages in the amount of P50,000. (Record on Appeal, pp. 165.) The alleged promise of the deceased Maxima Santos is contained in a document executed by Maxima Santos
on December 26, 1936 attached to the complaint as Annex "H" and introduced at the trial as Exhibit "A". (Ibid.,
pp. 258-259.) The complaint also alleges that the plaintiffs are entitled to inherit certain properties enumerated
in paragraph 3 thereof, situated in Malabon, Rizal and Obando, Bulacan, but which properties have already been
in included in the inventory of the estate of the deceased Simeon Blas and evidently partitioned and conveyed to
his heirs in the proceedings for the administration of his (Simeon Blas) estate.

The facts essential to an understanding of the issues involved in the case may be briefly summarized as follows:
Simeon Blas contracted a first marriage with Marta Cruz sometime before 1898. They had three children, only
one of whom, Eulalio, left children, namely, Maria Gervacio Blas, one of the plaintiffs, Marta Gervacio Blas, one
of the defendants, and Lazaro Gervacio Blas. Lazaro died in 1950, and is survived by three legitimate children
who are plaintiffs herein, namely, Manuel Gervacio Blas, Leoncio Gervacio Blas and Loida Gervacio Blas. Marta
Cruz died in 1898, and the following year, Simeon Blas contracted a second marriage with Maxima Santos. At the
time of this second marriage, no liquidation of the properties required by Simeon Blas and Marta Cruz was made.
Three of the properties left are fishponds located in Obando, Bulacan. Maxima Santos does not appear to have
apported properties to her marriage with Simeon Blas.
On December 26, 1936, only over a week before over a week before his death on January 9, 1937, Simeon Blas
executed a last will and testament. In the said testament Simeon Blas makes the following declarations:
I
2. Sa panahon ng aking pangalawang asawa, MAXIMA SANTOS DE BLAS, ay nagkaroon ako at nakatipon ng mga
kayamanan (bienes) at pag-aari (propriedades) na ang lahat ng lupa, palaisdaan at iba pang pag-aari ay umaabot
sa halagang ANIM NA RAAN PITONG PU'T WALONG DAAN LIBO WALONG DAAN WALONG PUNG PISO (678,88000) sang-ayon sa mga halaga sa amillarimento (valor Amillarado.)
II

Defendant, who is the administratrix of the estate of the deceased Maxima Santos Vda. de Blas, filed an answer
with a counterclaim, and later, an amended answer and a counterclaim. The said amended answer admits the
allegations of the complaint as to her capacity as administratrix the death of Simeon Blas on January 3, 1937; the
fact that Simeon Blas and Marta Cruz begot three children only one of whom, namely, Eulalio Blas, left legitimate
descendants; that Simeon Blas contracted a second marriage with Maxima Santos on June 28, 1898. She denies
for lack of sufficient information and belief, knowledge edge of the first marriage of Simeon Blas to Marta Cruz,
the averment that Simeon Blas and Marta Cruz acquired properties situated in Obando, Bulacan, that said
properties were utilized as capital, etc. As special defenses, she alleges that the properties of the spouses Blas
and Santos had been settled and liquidated in the project of partition of the estate of said Simeon Blas; that
pursuant to the project of partition, plaintiffs and some defendants had already received the respective
properties adjudicated to them; that the plaintiffs and the defendants Marta Geracio and Jose Chivi are
estopped from impugning the validity of the project of partition of the estate of the deceased Simeon Blas and
from questioning the ownership in the properties conveyed in the project of partition to Maxima Santos as her
own exclusive property; that the testament executed by Maxima Santos is valid, the plain plaintiffs having no
right to recover any portion of Maxima Santos' estate now under administration by the court. A counterclaim for
the amount of P50,000 as damages is also included in the complaint, as also a cross-claim against Marta Gervacio
Blas and Jose Chivi.
Trial of the case was Conducted and, thereafter, the court, Hon. Gustave Victoriano, presiding, rendered
judgment dismissing the complaint, with costs against plaintiff, and dismissing also the counterclaim and crossclaim decision ,the plaintiffs filed by the defendants. From this district have appealed to this Court.

1. Ang kalahati ng lahat ng aming pag-aari, matapos mabayaran ang lahat ng aking o aming pag-kakautang na
mag-asawa, kung mayroon man, yayamang ang lahat ng ito ay kita sa loob ng matrimonio (bienes ganaciales) ay
bahagi ng para sa aking asawa, MAXIMA SANTOS DE BLAS, sang-ayon sa batas. (Record on Appeal, pp. 250-251.)
The above testamentary provisions may be translated as follows:
I
2. During my second marriage with Maxima Santos de Blas, I possessed and acquired wealth and properties,
consisting of lands, fishponds and other kinds of properties, the total assessed value of which reached the
amount P678,880.00.
II
1. One-half of our properties, after the payment of my and our indebtedness, all these properties having been
acquired during marriage (conjugal properties), constitutes the share of my wife Maxima Santos de Blas,
according to the law.
At the time of the execution of said will, Andres Pascual a son-in-law of the testator, and Avelina Pascual and
others, were present. Andres Pascual had married a descendant by the first marriage. The will was prepared by
Andres Pascual, with the help of his nephew Avelino Pascual. The testator asked Andres Pascual to prepare a
document which was presented in court as Exhibit "A", thus:

Q Was there anybody who asked you to prepare this document?

SA KATUNAYAN NG LAHAT NG ITO ay nilagdaan ko ang kasulatang ito ngayon ika 26 ng Diciembre ng taong 1936,
dito sa San Francisco del Monte, San Juan, Rizal, Philippines. (Exh. "A", pp. 29-30 Appellant's brief).

A Don Simeon Blas asked me to prepare this document (referring to Exhibit "A"), (t.s.n., Sarmiento to, P. 24).
(Fdo.) MAXIMA SANTOS DE BLAS

The reason why the testator ordered the preparation of Exhibit "A" was because the properties that the testator
had acquired during his first marriage with Marta Cruz had not been liquidated and were not separated from
those acquired during the second marriage. Pascual's testimony is as follows:

and which, translated into English, reads as follows:

Q To whom do you refer with the word "they"?

KNOW ALL MEN BY THESE PRESENTS:

A Simeon Blas and his first wife, Marta Cruz. When Marta Cruz died they had not made a liquidation of their
conjugal properties and so all those properties were included all in the assets of the second marriage, and that is
the reason why this document was prepared. (t.s.n., Sarmiento, p. 36.)

That I MAXIMA SANTOS DE BLAS, of legal age, married to SIMEON BLAS, resident of Malabon, Rizal, Philippines,
voluntarily state:

The above testimony is fully corroborated by that of Leoncio Gervacio, son-in-law of Simeon Blas.
Q Please state to the Court?
A My children were claiming from their grandfather Simeon Blas the properties left by their grandmother
Marta Cruz in the year 1936.
Q And what happened with that claim of your children against Simeon Blas regarding the assets or properties
of the first marriage that were left after the death of Marta Cruz in 1936?
A The claim was not pushed through because they reached into an agreement whereby the parties Simeon
Blas Maxima Santos, Maria Gervacio Bias, Marta Gervacio Blas and Lazaro Gervacio Blas agreed that Simeon Blas
and Maxima Blas will give one-half of the estate of Simeon Blas. (t.s.n., Sarmiento, pp. 143-144).
The document which was thus prepared and which is marked as Exhibit "A" reads in Tagalog, thus:

That I have read and knew the contents of the will signed by my husband, SIMEON BLAS, (2) and I promise on my
word of honor in the presence of my husband that I will respect and obey all and every disposition of said will (3)
and furthermore, I promise in this document that all the properties my husband and I will leave, the portion and
share corresponding to me when I make my will, I will give one-half () to the heirs and legatees or the
beneficiaries named in the will of my husband, (4) and that I can select or choose any of them, to whom I will
give depending upon the respect, service and treatment accorded to me.
IN WITNESS WHEREOF, I signed this document this 26th day of December, 1936 at San Francisco del Monte, San
Juan, Rizal, Philippines. (Exh. "A", pp. 30-31, Appellant's brief).
(Sgd.) MAXIMA SANTOS DE BLAS
The court below held that said Exhibit "A" has not created any right in favor of plaintiffs which can serve as basis
for the complaint; that neither can it be considered as a valid and enforceable contract for lack of consideration
and because it deals with future inheritance. The court also declared that Exhibit "A" is not a will because it does
not comply with the requisites for the execution of a will; nor could it be considered as a donation, etc.

MAUNAWA NG SINO MANG MAKABABASA:

Na akong si MAXIMA SANTOS DE BLAS, nasa hustong gulang, kasal kay SIMEON BLAS, taga bayan ng Malabon,
Rizal, Philippines, sa pamamagitan ng kasulatang ito ay malaya kong ipinahahayag:
Na aking nabasa at naunawa ang testamento at huling kalooban na nilagdaan ng aking asawa, SIMEON BLAS, at
ipinahahayag ko sa ilalim ng aking karangalan at sa harap ng aking asawa na igagalang at pagpipitaganan ang
lahat at bawa't isang bahagi ng nabanggit na testamento at ipinangangako ko pa sa pamamagitan ng kasulatang
ito na ang lahat ng maiiwang pag-aari at kayamanan naming mag-asawa, na nauukol at bahaging para sa akin sa
paggawa ko naman ng aking testamento ay ipagkakaloob ko ang kalahati () sa mga herederos at legatarios o
pinamamanahan ng aking nabanggit na asawa, SIMEON BLAS, sa kaniyang testamento, na ako'y makapipili o
makahihirang na kahit kangino sa kanila ng aking pagbibigyan at pamamanahan sang-ayon sa paggalang,
paglilingkod, at pakikisama ng gagawin sa akin.

Both the court below in its decision and the appellees in their brief before us, argue vehemently that the heirs of
Simeon Blas and his wife Marta Cruz can no longer make any claim for the unliquidated conjugal properties
acquired during said first marriage, because the same were already included in the mass of properties
constituting the estate of the deceased Simeon Blas and in the adjudications made by virtue of his will, and that
the action to recover the same has prescribed. This contention is correct. The descendants of Marta Cruz can no
longer claim the conjugal properties that she and her husband may have required during their marriage although
no liquidation of such properties and delivery thereof to the heirs of Marta Cruz have been made, no action to
recover said propertied having been presented in the proceedings for the settlement of the estate of Simeon
Blas.
But the principal basis for the plaintiffs' action in the case at bar is the document Exhibit "A". It is not disputed
that this document was prepared at the instance of Simeon Blas for the reason that the conjugal properties of
me on Blas for the reason his first marriage had not been liquidated; that it was prepared at the same time as
the will of Simeon Blas on December 26, 1936, at the instance of the latter himself. It is also not disputed that

the document was signed by Maxima Santos and one copy thereof, which was presented in court as Exhibit "A",
was kept by plaintiffs' witness Andres Pascual.
Plaintiffs-appellants argue before us that Exhibit "A" is both a trust agreement and a contract in the nature of a
compromise to avoid litigation. Defendants-appellees, in answer, claim that it is neither a trust agreement nor a
compromise a agreement. Considering that the properties of the first marriage of Simeon Blas had not been
liquidated when Simeon Blas executed his will on December 26, 1936', and the further fact such properties
where actually , and the further fact that included as conjugal properties acquired during the second marriage,
we find, as contended by plaintiffs-appellants that the preparation and execution of Exhibit "A" was ordered by
Simeon Blas evidently to prevent his heirs by his first marriage from contesting his will and demanding
liquidation of the conjugal properties acquired during the first marriage, and an accounting of the fruits and
proceeds thereof from the time of the death of his first wife.
Exhibit "A", therefore, appears to be the compromise defined in Article 1809 of the Civil Code of Spain, in force
at the time of the execution of Exhibit "A", which provides as follows:
Compromise is a contract by which each of the parties in interest, by giving, promising, or retaining something
avoids the provocation of a suitor terminates one which has already the provocation been instituted. (Emphasis
supplied.)
Exhibit "A" states that the maker (Maxima Santos) had read and knew the contents of the will of her husband
read and knew the contents of the will Simeon Blas she was evidently referring to the declaration in the will(of
Simeon Blas) that his properties are conjugal properties and one-half thereof belongs to her (Maxima Santos) as
her share of the conjugal assets under the law. The agreement or promise that Maxima Santos makes in Exhibit
"A" is to hold one-half of her said share in the conjugal assets in trust for the heirs and legatees of her husband in
his will, with the obligation of conveying the same to such of his heirs or legatees as she may choose in her last
will and testament. It is to be noted that the conjugal properties referred to are those that were actually existing
at that time, December 26, 1936. Simeon Blas died on January 9, 1937. On June 2, 1937, an inventory of the
properties left by him, all considered conjugal, was submitted by Maxima Santos herself as administratrix of his
estate. A list of said properties is found in Annex "E", the complete inventory submitted by Maxima Santos Vda.
de Blas, is administratrix of the estate of her husband, dated March 10, 1939. The properties which were given to
Maxima Santos as her share in the conjugal properties are also specified in the project of partition submitted by
said Maxima Santos herself on March 14, 1939. (Record on Appeal, pp. 195-241.) Under Exhibit "A", therefore,
Maxima Santos contracted the obligation and promised to give one-half of the above indicated properties to the
heirs and legatees of Simeon Blas.
Counsel for the defendant-appellee claims Exhibit "A" is a worthless piece of paper because it is not a will nor a
donationmortis causa nor a contract. As we have in indicated above, it is a compromise and at the same time a
contract with a sufficient cause or consideration. It is also contended that it deals with future inheritance. We do
not think that Exhibit "A" is a contract on future inheritance. it is an obligation or promise made by the maker to
transmit one-half of her share in the conjugal properties acquired with her husband, which properties are stated
or declared to be conjugal properties in the will of the husband. The conjugal properties were in existence at the
time of the execution of Exhibit "A" on December 26, 1936. As a matter of fact, Maxima Santos included these

properties in her inventory of her husband's estate of June 2, 1937. The promise does not refer to any properties
that the maker would inherit upon the death of her husband, because it is her share in the conjugal assets. That
the kind of agreement or promise contained in Exhibit "A" is not void under Article 1271 of the old Civil Code, has
been decided by the Supreme Court of Spain in its decision of October 8, 19154, thus:
Que si bien el art. 1271 del Codigo civil dispone que sobre la herenciafutura no se podra celebrar otros contratos
que aquellos cuyo objecto seapracticar entre vivos la division de un caudal, conforme al articulo 1056, esta
prohibicion noes aplicable al caso, porque la obligacion que contrajoel recurr en contrato privado de otorgar
testamento e instituir heredera a su subrina de los bienes que adquirio en virtud de herencia, procedentes desu
finada consorte que le quedasen sobrantes despues de pagar las deudas, y del ganacial que se expresa, asi como
de reconocer, ademas, con alguna cosaa otros sobrinos, se refiere a bienes conocidos y determinados existentes
cuando tal compromisi se otorgo, y no a la universalidad de una herencia que, sequn el art. 659 del citado Codigo
civil, as determina a muerte, constituyendola todos los bienes, derechos y obligaciones que por ella no sehayan
extinguido: ..." (Emphasis supplied.)
It will be noted that what is prohibited to be the subject matter of a contract under Article 1271 of the Civil Code
is " future inheritance." To us future inheritance is any property or right not in existence or capable of
determination at the time of the contract, that a person may in the future acquire by succession. The properties
subject of the contract Exhibit "A" are well defined properties, existing at the time of the agreement, which
Simeon Blas declares in his statement as belonging to his wife as her share in the conjugal partnership. Certainly
his wife's actual share in the conjugal properties may not be considered as future inheritance because they were
actually in existence at the time Exhibit "A" was executed.
The trial court held that the plaintiffs-appellants in the case at bar are concluded by the judgement rendered in
the proceedings for the settlement of the estate of Simeon Blas for the reason that the properties left by him
belonged to himself and his wife Maxima Santos; that the project of partition in the said case, adjudicating to
Maxima Santos one-half as her share in the conjugal properties, is a bar to another action on the same subject
matter, Maxima Santos having become absolute owner of the said properties adjudicated in her favor. As
already adverted to above, these contentions would be correct if applied to the claim of the plaintiffs-appellants
that said properties were acquired with the first wife of Simeon Blas, Marta Cruz. But the main ground upon
which plaintiffs base their present action is the document Exhibit "A", already fully considered above. As this
private document contains the express promise made by Maxima Santos to convey in her testament, upon her
death, one-half of the conjugal properties she would receive as her share in the conjugal properties, the action
to enforce the said promise did not arise until and after her death when it was found that she did not comply
with her above-mentioned promise. (Art. 1969, old Civil Code.) The argument that the failure of the plaintiffsappellants herein to oppose the project of partition in the settlement of the estate of Simeon Blas, especially
that portion of the project which assigned to Maxima Santos one-half of all the conjugal properties bars their
present action, is, therefore, devoid of merit. It may be added that plaintiffs-appellants did not question the
validity of the project of partition precisely because of the promise made by Maxima Santos in the compromise
Exhibit "A"; they acquised in the approval of said project of partition because they were relying on the promise
made by Maxima Santos in Exhibit "A", that she would transmit one-half of the conjugal properties that she was
going to receive as her share in the conjugal partnership upon her death and in her will, to the heirs and legatees
of her husband Simeon Blas.

Neither can the claim of prescription be considered in favor of the defendants. The right of action arose at the
time of the death of Maxima Santos on October 5,1956, when she failed to comply with the promise made by
her in Exhibit "A". The plaintiffs-appellants immediately presented this action on December 27, 1956, upon
learning of such failure on the part of Maxima Santos to comply with said promise. This defense is, therefore,
also without merit.
It is next contended by the defendant-appellee that Maxima Santos complied with her above-mentioned
promise, that Andres Pascual, Tomasa Avelino, Justo Garcia, Ludovico Pimpin and Marta Gervacio Blas were
given substancial legacies in the will and testament of Maxima Santos. To determine whether she had actually
complied with the promise made in Exhibit "A", there is herein set forth a list only of the fishponds and their
respective areas as contained in the list of properties she acquired as her share in the conjugal partnership,
which list includes, besides many ricelands as well as residential lots, thus:

46. Pinanganakan, Lubao, Pampanga

159.0078 "

47. Emigdio Lingid, Lubao, Pampanga

34.5229 "

48. Propios, Lubao, Pampanga

80.5382 "

49. Batang Mabuanbuan, Sexmoan, Pampanga

43.3350 "

50. Binatang Mabuanbuan, Sexmoan, Pampanga

3.5069 "

51. Sapang Magtua, Sexmoan, Pampanga

56,8242 "

31. Paco, Obando, Bulacan

5.8396 has.

52. Kay Limpin, Sexmoan, Pampanga

5.0130 "

32. Pangjolo, Obando

3.5857 "

53. Calise Mabalumbum, Sexmoan, Pampanga

23.8935 "

34. Batang Pirasuan, Lubao, Pampanga

11.9515 "

54. Messapinit Kineke, Sexmoan, Pampanga

35. Calangian, Lubao, Pampanga

30.2059 "

(b) 5.9230 "

38. Bakuling, Lubao, Pampanga

215.4325 "

(c) 1.4638 "

39. Bakuling, Lubao, Pampanga

8.3763 "

(d) 1.4638 "

40. Bangkal, Sinubli

23.0730 "

(e) 2.8316 "

41. Tagulod,

6.8692 "

(f) 10.4412 "

44. Bangkal Pugad

45. Magtapat Bangkal, Lubao, Pampanga

(a) 5.2972

"

(a) 34.2779 "

(g) 3.9033 "

(b) 51.7919 "

(h) 11.9263 "

(c) 2.5202 "

(i) 6.0574 "

(a) 18.0024 "

55. Dalang, Banga, Sexmoan, Pampanga

23.3989 "

(b) 7.3265 "

62. Alaminos, Pangasinan

147.1242 "

(c) 53.5180 "

80. Mangasu Sexmoan, Pampanga

10.000 "

81. Don Tomas, Sexmoan, Pampanga

21.6435 "

82. Matikling, Lubao, Pampanga

Total area ...............................

16.0000 "
1045.7863 "

(See Record on Record, pp. 195-241.)

In her will, Maxima Santos devised to Marta Gervacio Blas the 80-hectare fishpond situated in Lubao, Pampanga.
The fishpond devised is evidently that designated as "Propios" in Lubao, Pampanga, item No. 8 in the list of
properties adjudicated to her in the project of partition. (Record on Appeal, p. 215.) Considering that the total
area of the fishponds amount to 1045.7863 hectares, the 80 hectares devised to Marta Gervacio Blas is not even
one-tenth of the total area of the fishponds. Add to this the fact that in the will she imposed upon Marta
Gervacio Blas de Chivi an existing obligation on said fishponds, namely, its lease in 1957 and the duty to pay out
of the rentals thereof an obligation to the Rehabilitation Finance Corporation RFC (Ibid., pp. 262-263.) Angelina
Blas was given only a lot of 150 square meters in Hulong Duhat, Malabon, Rizal, and Leony Blas, the sum of
P300.00 (Ibid., p. 264.)
It is evident from a consideration of the above figures and facts that Maxima Santos did not comply with her
obligation to devise one-half of her conjugal properties to the heirs and legatees of her husband. She does not
state that she had complied with such obligation in her will. If she intended to comply therewith by giving some
of the heirs of Simeon Blas the properties mentioned above, the most that can be considered in her favor is to
deduct the value of said properties from the total amount of properties which she had undertaken to convey
upon her death.
All the issues in the pleadings of the parties and in their respective briefs, have now been fully discussed and
considered. Reiterating what we have stated above, we declare that by Exhibit "A", a compromise to avoid
litigation, Maxima Santos promised to devise to the heirs and legatees of her husband Simeon Blas, one-half of
the properties she received as her share in the conjugal partnership of herself and her husband, which share is
specified in the project of partition submitted by herself on March 14, 1939 in the settlement of the estate of her
husband, and which is found on pages 195 to 240 of the record on appeal and on pages 27 to 46 of the project of
partition, submitted by Maxima Santos herself before the Court of First Instance of Rizal in Civil Case No. 6707,
entitled "Testamentaria del Finado Don Simeon Blas, Maxima Santos Vda. de Bias, Administradora"; and that she
failed to comply with her aforementioned obligation. (Exhibit "A")
WHEREFORE, the judgment appealed from is hereby reversed and the defendant-appellee, administratrix of the
estate of Maxima Santos, is ordered to convey and deliver one-half of the properties adjudicated o Maxima
Santos as her share in the conjugal properties in said Civil Case No. 6707, entitled "Testamentaria del Finado Don
Simeon Blas, Maxima Santos Vda. de Blas, Administradora", to the heirs and the legatees of her husband Simeon
Blas. Considering that all said heirs and legatees, designated in the will of Simeon Blas as the persons for whose

benefit Exhibit "A" had been executed, have not appeared in these proceedings, the record is hereby remanded
to the court below, with instructions that, after the conveyance of the properties hereinabove ordered had been
effected, the said heirs and legatees (of Simeon Blas) file adversary pleadings to determine the participation of
each and every one of them in said properties. Costs against the defendant- appellee Rosalina Santos.
G.R. No. 75884 September 24, 1987
JULITA GO ONG, FOR HERSELF AND AS JUDICIAL GUARDIAN OF STEVEN GO ONG, petitioners,
vs.
THE HON. COURT OF APPEALS, ALLIED BANKING CORPORATION and the CITY SHERIFF OF QUEZON
CITY,respondents.

PARAS, J.:
This is a petition for review on certiorari of the March 21, 1986 Decision * of the Court of Appeals in AC-G.R. CV
No. 02635, "Julita Ong etc. vs. Allied Banking Corp. et al." affirming, with modification, the January 5, 1984
Decision of the Regional Trial Court of Quezon City in Civil Case No. Q-35230.
The uncontroverted facts of this case, as found by the Court of Appeals, are as follows:
...: Two (2) parcels of land in Quezon City Identified as Lot No. 12, Block 407, Psd 37326 with an area of 1960.6
sq. m. and Lot No. 1, Psd 15021, with an area of 3,660.8 sq. m. are covered by Transfer Certificate of Title No.
188705 in the name of "Alfredo Ong Bio Hong married to Julita Go Ong "(Exh. D). Alfredo Ong Bio Hong died on
January 18, 1975 and Julita Go Ong was appointed administratrix of her husband's estate in Civil Case No.
107089. The letters of administration was registered on TCT No. 188705 on October 23, 1979. Thereafter, Julita
Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705 was partially cancelled and TCT No. 262852 was
issued in favor of Lim Che Boon covering Lot No. 12 (Exh. D-4). On June 8, 1981 Julita Go Ong through her
attorney-in-fact Jovita K. Yeo (Exh. 1) mortgaged Lot No. 1 to the Allied Banking Corporation to secure a loan of
P900,000.00 obtained by JK Exports, Inc. The mortgage was registered on TCT No. 188705 on the same date with
the following notation: "... mortgagee's consent necessary in case of subsequent alienation or encumbrance of
the property other conditions set forth in Doc. No. 340, Page No. 69, Book No. XIX, of the Not. Public of
Felixberto Abad". On the loan there was due the sum of P828,000.00 and Allied Banking Corporation tried to
collect it from Julita Go Ong, (Exh. E). Hence, the complaint alleging nullity of the contract for lack of judicial
approval which the bank had allegedly promised to secure from the court. In response thereto, the bank averred
that it was plaintiff Julita Go Ong who promised to secure the court's approval, adding that Julita Go Ong
informed the defendant that she was processed the sum of P300,000.00 by the JK Exports, Inc. which will also
take charge of the interest of the loan.
Concluding, the trial court ruled:
Absent (of) any evidence that the property in question is the capital of the deceased husband brought into the
marriage, said property should be presumed as acquired during the marriage and, therefore, conjugal property,

After the dissolution of the marriage with the death of plaintiff's husband, the plaintiff acquired, by law, her
conjugal share, together with the hereditary rights thereon. (Margate vs. Rabacal, L-14302, April 30, 1963).
Consequently, the mortgage constituted on said property, upon express authority of plaintiff, notwithstanding
the lack of judicial approval, is valid, with respect to her conjugal share thereon, together with her hereditary
rights.
On appeal by petitioner, respondent Court of Appeals affirmed, with modification, the appealed decision
(Record, pp. 19-22). The dispositive portion of the appellate court's decision reads:
WHEREFORE, with the modification that the extrajudicial foreclosure proceedings instituted by defendant
against plaintiff shall be held in abeyance to await the final result of Civil Case No. 107089 of the Court of First
Instance of Manila, 6th Judicial District Branch XXXII, entitled "IN THE MATTER OF THE INTESTATE ESTATE OF THE
LATE ALFREDO ONG BIO: JULITA GO ONG, ADMINISTRATRIX". In pursuance with which the restraining order of
the lower court in this case restraining the sale of the properties levied upon is hereby ordered to continue in full
force and effect coterminous with the final result of Civil Case No. 107089, the decision appealed from is hereby
affirmed. Costs against plaintiff-appellant.
SO ORDERED.
On April 8, 1986, petitioner moved for the reconsideration of the said decision (Ibid., pp. 24-29), but in a
Resolution dated September 11, 1986, respondent court denied the motion for lack of merit (Ibid., p. 23). Hence,
the instant petition (Ibid.,pp. 6-17).
The Second Division of this Court, in a Resolution dated November 19, 1986 (Rollo, p. 30), without giving due
course to the petition, resolved to require private respondent to comment thereon and it did on February 19,
1987 (Ibid., pp. 37-42). Thereafter, in a Resolution dated April 6, 1987, the petition was given due course and the
parties were required to file their respective memoranda (Ibid., p. 43).
Petitioner filed her Memorandum on May 13, 1987 (Ibid., pp. 45-56), while private respondent filed its
Memorandum on May 20, 1987 (Ibid., pp. 62-68).
The sole issue in this case is
WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER PETITIONER'S
ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL.
The instant petition is devoid of merit.
The well-settled rule that the findings of fact of the trial court are entitled to great respect, carries even more
weight when affirmed by the Court of Appeals as in the case at bar.
In brief, the lower court found: (1) that the property under the administration of petitioner the wife of the
deceased, is a community property and not the separate property of the latter; (2) that the mortgage was
constituted in the wife's personal capacity and not in her capacity as administratrix; and (3) that the mortgage
affects the wife's share in the community property and her inheritance in the estate of her husband.

Petitioner, asserting that the mortgage is void for want of judicial approval, quoted Section 7 of Rule 89 of the
Rules of Court and cited several cases wherein this Court ruled that the regulations provided in the said section
are mandatory.
While petitioner's assertion may have merit insofar as the rest of the estate of her husband is concerned the
same is not true as regards her conjugal share and her hereditary rights in the estate. The records show that
petitioner willingly and voluntarily mortgaged the property in question because she was processed by JK Exports,
Inc. the sum of P300,000.00 from the proceeds of the loan; and that at the time she executed the real estate
mortgage, there was no court order authorizing the mortgage, so she took it upon herself, to secure an order.
Thus, in confirming the findings of the lower court, as supported by law and the evidence, the Court of Appeals
aptly ruled that Section 7 of Rule 89 of the Rules of Court is not applicable, since the mortgage was constituted in
her personal capacity and not in her capacity as administratrix of the estate of her husband.
Nevertheless, petitioner, citing the cases of Picardal, et al. vs. Lladas (21 SCRA 1483) and Fernandez, et al. vs.
Maravilla(10 SCRA 589), further argues that in the settlement proceedings of the estate of the deceased spouse,
the entire conjugal partnership property of the marriage is under administration. While such may be in a sense
true, that fact alone is not sufficient to invalidate the whole mortgage, willingly and voluntarily entered into by
the petitioner. An opposite view would result in an injustice. Under similar circumstances, this Court applied the
provisions of Article 493 of the Civil Code, where the heirs as co-owners shall each have the full ownership of his
part and the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and
even effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership (Philippine National Bank vs.
Court of Appeals, 98 SCRA 207 [1980]).
Consequently, in the case at bar, the trial court and the Court of Appeals cannot be faulted in ruling that the
questioned mortgage constituted on the property under administration, by authority of the petitioner, is valid,
notwithstanding the lack of judicial approval, with respect to her conjugal share and to her hereditary rights. The
fact that what had been mortgaged was in custodia legis is immaterial, insofar as her conjugal share and
hereditary share in the property is concerned for after all, she was the ABSOLUTE OWNER thereof. This
ownership by hers is not disputed, nor is there any claim that the rights of the government (with reference to
taxes) nor the rights of any heir or anybody else have been prejudiced for impaired. As stated by Associate
Justice (later Chief Justice) Manuel Moran in Jakosalem vs. Rafols, et al., 73 Phil. 618
The land in question, described in the appealed decision, originally belonged to Juan Melgar. The latter died and
the judicial administration of his estate was commenced in 1915 and came to a close on December 2, 1924, only.
During the pendency of the said administration, that is, on July 5, 1917, Susana Melgar, daughter of the
deceased Juan Melgar, sold the land with the right of repurchase to Pedro Cui, subject to the stipulation that
during the period for the repurchase she would continue in possession of the land as lessee of the purchase. On
December 12, 1920, the partition of the estate left by the deceased Juan Melgar was made, and the land in
question was adjudicated to Susana Melgar. In 1921, she conveyed, in payment of professional fees, one-half of
the land in favor of the defendant-appellee Nicolas Rafols, who entered upon the portion thus conveyed and has
been in possession thereof up to the present. On July 23, 1921, Pedro Cui brought an action to recover said half

of the land from Nicolas Rafols and the other half from the other defendants, and while that case was pending,
or about August 4, 1925, Pedro Cui donated the whole land in question to Generosa Teves, the herein plaintiffappellant, after trial, the lower court rendered a decision absolving Nicolas Rafols as to the one-half of the land
conveyed to him by Susana Melgar, and declaring the plaintiff owner of the other half by express
acknowledgment of the other defendants. The plaintiff appealed from that part of the judgment which is
favorable to Nicolas Rafols.
The lower court absolved Nicolas Rafols upon the theory that Susana Melgar could not have sold anything to
Pedro Cui because the land was then in custodia legis, that is, under judicial administration. This is error. That
the land could not ordinary be levied upon while in custodia legis, does not mean that one of the heirs may not
sell the right, interest or participation which he has or might have in the lands under administration. The
ordinary execution of property in custodia legis is prohibited in order to avoid interference with the possession
by the court. But the sale made by an heir of his share in an inheritance, subject to the result of the pending
administration, in no wise stands in the way of such administration.
The reference to judicial approval in Sec. 7, Rule 89 of the Rules of Court cannot adversely affect
the substantive rights of private respondent to dispose of her Ideal [not inchoate, for the conjugal partnership
ended with her husband's death, and her hereditary rights accrued from the moment of the death of the
decedent (Art. 777, Civil Code) share in the co-heirship and/or co-ownership formed between her and the other
heirs/co-owners (See Art. 493, Civil Code, supra.). Sec. 7, Art. 89 of the Civil Code applies in a case where judicial
approval has to be sought in connection with, for instance, the sale or mortgage of property under
administration for the payment, say of a conjugal debt, and even here, the conjugal and hereditary shares of the
wife are excluded from the requisite judicial approval for the reason already adverted to hereinabove, provided
of course no prejudice is caused others, including the government.
Moreover, petitioner is already estopped from questioning the mortgage. An estoppel may arise from the
making of a promise even though without consideration, if it was intended that the promise should be relied
upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetration
of fraud or would result in other injustice (Gonzalo Sy Trading vs. Central Bank, 70 SCRA 570).
PREMISES CONSIDERED, the instant petition is hereby DENIED and the assailed decision of the Court of Appeals
is hereby AFFIRMED.

BENGZON, J.P., J.:

This is an appeal from the orders dated June 9, 1964, July 14, 1964 and August 11, 1964, respectively, of the
Court of First Instance of Zamboanga del Norte (Dipolog, Branch II).
The facts of the case are admitted by both parties.
On February 22, 1963, the heirs of Pedro Reganon filed a complaint for recovery of ownership and possession of
about one-hectare portion of a parcel of land (Lot No. 1 or Lot No. 4952, situated at Miasi, Polanco, Zamboanga
del Norte, covered by O.T.C. No. 1447, with an area of 7.9954 hectares), with damages, against Rufino Imperial.
Defendant not having filed an answer within the reglementary period, the plaintiffs on April 8, 1963 filed a
motion to declare the former in default. The trial court granted the motion in its order dated April 10, 1963.
On April 23, 1963, the plaintiffs presented their evidence ex parte before the Clerk of Court acting as
Commissioner. The court a quo on May 6, 1963, rendered a decision declaring the plaintiffs lawful owners of the
land in question and entitled to its peaceful possession and enjoyment; ordering defendant immediately to
vacate the portion occupied by him and to restore the peaceful possession thereof to plaintiffs; and sentencing
defendant to pay plaintiffs the amount of P1,929.20 and the costs.
On November 29, 1963, the plaintiffs filed a motion for issuance of a writ of execution. This was granted by the
trial court in its order of December 9, 1963.
The Deputy Provincial Sheriff submitted on February 8, 1964 a sheriff's return of proceedings reporting the
garnishment and sale of a carabao and goat belonging to defendant for P153.00, and the attachment and sale of
defendant's parcel of land covered by Tax Declaration No. 4694, situated in Sicet, Polanco, Zamboanga del Norte,
for P500.00 both sales having been made to the only bidder, plaintiffs' counsel Atty. Vic T. Lacaya.
On March 13, 1964, the Philippine National Bank deposited in the Philippine National Bank-Dipolog Branch the
residuary estate of its former ward, Eulogio Imperial, in the sum of P10,303.80, pursuant to an order of Branch I
of the Court of First Instance of Zamboanga del Norte in Sp. Proc. No. R-145.
On May 25, 1964, the heirs of said Eulogio Imperial, one of whom is defendant, executed a Deed of Extrajudicial
Partition of the residuary estate, wherein was apportioned P1,471.97 as defendant Rufino Imperial's share.

SO ORDERED.
G.R. No. L-24434

January 17, 1968

HEIRS OF PEDRO REGANON, JOVENCIA REGANON, MENCIA REGANON, JOSEFA REGANON, VIOLETA REGANON,
and
FLORA
REGANON, plaintiffs-appellees,
vs.
RUFINO IMPERIAL, defendant-appellant.
Torcuato
L.
V. Lacaya for defendant-appellant.

Galon

for

plaintiffs-appellees.

Informed of this development, the plaintiffs filed on June 5, 1964 an ex parte motion for issuance of an alias writ
of execution and of an order directing the manager, or the representative, of the Philippine National BankDipolog Branch, to hold the share of defendant and deliver the same to the provincial sheriff of the province to
be applied to the satisfaction of the balance of the money judgment. This was granted by the trial court (Branch
II) in its order dated June 9, 1964.
On June 17, 1964, the Deputy Provincial Sheriff issued a sheriffs notification for levy addressed to defendant,
giving notice of the garnishment of the rights, interests, shares and participation that defendant may have over
the residuary estate of the late Eulogio Imperial, consisting of the money deposited in the Philippine National
Bank-Dipolog Branch.

Defendant, through counsel, appearing for the first time before the trial court, on June 24, 1964 filed a motion
for reconsideration of the order dated June 9, 1964, and to quash the alias writ of execution issued pursuant to
it, to which plaintiffs filed their opposition on July 6, 1964. On July 14, 1964, the trial court denied defendant's
aforesaid motion.

automatic transmission can not but proceed with greater ease and certainty than in this case where the parties
agree that the residuary estate is not burdened with any debt. For,

Defendant's second motion for reconsideration likewise having denied by the trial court in its order of August 11,
1964, defendant appealed to Us, raising the following issues:

The rights to the succession of a person are transmitted from the moment of death, and where, as in this case,
the heir is of legal age and the estate is not burdened with any debts, said heir immediately succeeds, by force of
law, to the dominion, ownership, and possession of the properties of his predecessor and consequently stands
8
legally in the shoes of the latter.

(1) Upon the death of a ward, is the money accumulated in his guardianship proceedings and deposited in a
bank, still considered in custodia legis and therefore cannot be attached?

That the interest of an heir in the estate of a deceased person may be attached for purposes of execution, even if
9
the estate is in the process of settlement before the courts, is already a settled matter in this jurisdiction.

(2) Is the residuary estate of a U.S. veteran, which consists in the aggregate accumulated sum from the monthly
allowances given him by the United States Veterans Administration (USVA) during his lifetime, exempt from
execution?

It is admitted that the heirs of Eulogio Imperial, including herein defendant-appellant, have on May 25, 1964
executed a Deed of Extrajudicial Partition. This instrument suffices to settle the entire estate of the decedent
10
provided all the requisites for its validity are fulfilled even without the approval of the court. Therefore, the
estate for all practical purposes have been settled. The heirs are at full liberty to withdraw the residuary estate
from the Philippine National Bank-Dipolog Branch and divide it among themselves. The only reason they have
not done so is because of the alleged illegal withdrawal from said estate of the amount of P1,080.00 by one
Gloria Gomez by authority of Branch I of the Court of First Instance of Zamboanga del Norte, which incident is
now on appeal before the Court of Appeals. This appeal, however, does not detract any from the fact that the
guardianship proceedings is closed and terminated and the residuary estate no longer under custodia legis.

Defendant-appellant argues that the property of an incompetent under guardianship is in custodia legis and
therefore can not be attached.
1

It is true that in a former case it was held that property under custodia legis can not be attached. But this was
2
under the old Rules of Court. The new Rules of Court now specifically provides for the procedure to be followed
3
in case what is attached is in custodia legis. The clear import of this new provision is that property
under custodia legis is now attachable, subject to the mode set forth in said rule.
Besides, the ward having died, the guardianship proceedings no longer subsist:
The death of the ward necessarily terminates the guardianship, and thereupon all powers and duties of the
guardian cease, except the duty, which remains, to make a proper accounting and settlement in the probate
4
court.
As a matter of fact, the guardianship proceedings was ordered conditionally closed by Branch I of the Court of
First Instance of Zamboanga del Norte in which it was pending, in its order of February 8, 1964, where it stated

In the meantime, the guardian Philippine National Bank is hereby directed to deposit the residuary estate of said
ward with its bank agency in Dipolog, this province, in the name of the estate of the deceased ward Eulogio
Imperial, preparatory to the eventual distribution of the same to the heirs when the latter shall be known,
and upon proof of deposit of said residuary estate, the guardian Philippine National Bank shall forthwith be
5
relieved from any responsibility as such, and this proceeding shall be considered closed and terminated.
And the condition has long been fulfilled, because on March 13, 1964 the Philippine National Bank-Manila
deposited the residuary estate of the ward with the Philippine National Bank-Dipolog Branch, evidenced by a
6
receipt attached to the records in Sp. Proc. No. R-145.
When Eulogio Imperial died on September 13, 1962, the rights to his succession from the moment of his
7
death were transmitted to his heirs, one of whom is his son and heir, defendant-appellant herein. This

Finally, it is defendant-appellant's position that the residuary estate of Eulogio Imperial, a former U.S. veteran,
having been set aside from the monthly allowances given him by the United States Veterans Administration
(USVA) during his lifetime, is exempt from execution.
Any pension, annuity, or gratuity granted by a Government to its officers or employees in recognition of past
services rendered, is primordially aimed at tiding them over during their old age and/or disability. This is
therefore a rightpersonalissima, purely personal because founded on necessity. It requires no argument to show
that where the recipient dies, the necessity motivating or underlying its grant necessarily ceases to be. Even
11
more so in this case where the law providing for the exemption is calculated to benefit U.S. veterans residing
here, and is therefore merely a manifestation of comity.
Besides, as earlier stated, the heirs of Eulogio Imperial, one of whom is appellant, have already executed a Deed
of Extrajudicial Partition the end result of which is that the property is no longer the property of the estate but
of the individual heirs. And it is settled that:
When the heirs by mutual agreement have divided the estate among themselves, one of the heirs can not
therefore secure the appointment of an administrator to take charge of and administer the estate or a part
thereof. The property is no longer the property of the estate, but of the individual heirs, whether it remains
12
undivided or not.
WHEREFORE, the orders appealed from are hereby affirmed, with costs against defendant-appellant. So ordered.
G.R. No. L-25049

August 30, 1968

FILEMON
RAMIREZ,
MONICA
RAMIREZ,
vs.
ARTEMIO BALTAZAR, ET AL., defendants-appellees.
Eduardo
M.
Peralta
Tomas
P.
Anonuevo
for
defendants-appellees
Tirso Caballero for defendant-appellee Artemio Diawan.

and

JOSE

EGUARAS, plaintiffs-appellants,

for
Artemio

Baltazar

and

plaintiffs-appellants.
Susana
Flores.

ANGELES, J.:
On appeal from an order dismissing the complaint, on motion to dismiss, in Civil Case No. SC-319 of the Court of
First Instance of Laguna.
It appears that on 6 January 1959, Victoriana Eguaras single, made and executed a real estate mortgage over a
parcel of land, owned by her in fee simple, as security for a loan of P2,170.00 in favor of the spouses Artemio
Baltazar and Susana Flores.
Upon the demise of the mortgagor, the mortgagees, as creditors of the deceased, on 16 September 1960 filed a
petition for the intestate proceedings of her estate, in the Court of First Instance of Laguna, docketed as Civil
Case No. SC-99 wherein said mortgages, as petitioners, alleged that Filemon Ramirez and Monica Ramirez are
the heirs of the deceased. Filemon Ramirez was appointed administrator of the estate; however, having failed to
qualify, on 16 January 1961, the court appointed Artemio Diawan, then a deputy clerk of court, administrator of
the estate who, in due time, qualified for the office.
On 19 April 1961, the mortgagees, Artemio Baltazar and Susana Flores, filed a complaint for foreclosure of the
aforesaid mortgage, against Artemio Diawan, in his capacity as administrator of the estate, docketed as Civil Case
No. SC-292 of the Court of First Instance of Laguna. The defendant-administrator was duly served with summons
but he failed to answer, whereupon, on petition of the plaintiffs said defendant was declared in default. The case
was referred to a commissioner to receive the evidence for the plaintiffs, and defendant-administrator, as
deputy clerk of court, acted as such hearing commissioner. 1wph1.t
On 16 August 1961, decision was rendered decreeing the foreclosure of the mortgaged property and the sale
thereof, if, within ninety days from finality of the decision, the obligation was not fully paid. The judgment not
having been satisfied, a writ of execution was issued for the sale of the mortgaged property, and after
compliance with the requirements of the law regarding the sending, posting and publication of the notice of sale,
the Sheriff sold the property at public auction to the highest bidder, who happened to be the plaintiffs
themselves, for the sum of P2,888.50 covering the amount of the judgment, plus the expenses of the sale and
the Sheriff's fees. On petition of the plaintiffs, the sale was confirmed by the court on 26 January 1962.
On 6 February 1962, Filemon Ramirez, Monica Ramirez and Jose Eguaras, the first two being the heirs named in
the petition for intestate proceedings, filed a complaint designated "For the Annulment of all Proceedings in said
Civil Case No. SC-292 for the Foreclosure of the Mortgage", against the spouses Artemio Baltazar and Susana
Flores, and Artemio Diawan, in his capacity as administrator of the estate of Victoriana Eguaras, deceased, and

Silverio Talabis, in his capacity as deputy provincial sheriff of Laguna, docketed as Civil Case No. SC-319 of the
Court of First Instance of Laguna.
The facts hereinabove narrated are, succinctly, contained in the complaint in said Civil Case No. SC-319, with the
additional averments that the defendant Diawan, the deputy clerk of court appointed as administrator of the
intestate estate of the deceased, acted in collusion with the other defendants Artemio Baltazar and Susana
Flores, deliberately and in fraud of the plaintiffs: (a) in allowing the reglementary period within which to file an
answer to lapse without notifying and/or informing the said plaintiffs of the complaint for foreclosure, as a result
of which he was declared in default to the prejudice of the estate which he represents; (b) that had the plaintiffs
(Monica and Filemon) been notified of the pendency of the case, the defendant administrator could have
interposed a counterclaim because payment in the sum of P1,548.52 had been made and received by the
mortgagees on account of the debt; (c) in presiding as hearing officer in the ex partehearing in Civil Case No. 292,
to receive evidence for plaintiffs therein, notwithstanding the fact that there was another deputy clerk of court
available who could have acted in his stead, as a result of which an anomalous situation was created whereby he
was a defendant and at the same time a commissioner receiving evidence against himself as administrator; (d) in
allowing judgment to become final without notifying the plaintiffs; (e) in deliberately, allowing the 90-day period
within which to make payment to expire without notifying the heirs, as a result of which the said heirs were not
afforded an opportunity to make payments ordered by the Court in its decision; and (f) in refusing to help the
heirs seek postponement of the auction sale. It is also alleged that it was only when the property foreclosed was
published for sale at public auction that the heirs came to know about the foreclosure proceedings.
The defendants spouses, Artemio Baltazar and Susana Flores, filed a motion to dismiss the complaint on the
ground that the plaintiffs have no legal capacity to sue; defendant Diawan likewise moved to dismiss on two
grounds: that plaintiffs have no legal capacity to sue and that the complaint states no cause of
action. 1wph1.t
Despite vigorous opposition interposed by the plaintiffs against the aforesaid motions to dismiss, the court, on
13 March 1962, dismissed the complaint with costs against the plaintiffs, reasoning thus: that "upon
consideration of the evidence, said defendant could not have offered any evidence to avoid the foreclosure of
the mortgage which the Court found to be in order. Under the circumstances and with the apparent
disinterestedness of Filemon and Rolando to qualify as administrator when appointed, there could not have
been any connivance and/or collusion between plaintiffs in this case and Artemio Diawan as administrator"; and
that plaintiffs have no legal capacity to sue since their status as legal heirs of the deceased has yet to be
determined precisely in Special Proceeding No. SC-99, and until such status is so fixed by the Court, they have no
cause of action against defendants.
In that order of 13 March 1962, the court also denied plaintiffs' petition for the issuance of a writ of preliminary
injunction to enjoin defendants from entering and taking physical possession of the land in question on the
ground "that possession thereof was effected and delivered by the Provincial Sheriff to Artemio Baltazar and
Susana Flores on February, 1962."
Reconsideration of the aforesaid order having been denied, the plaintiffs took the present appeal where they
assigned the following errors: (1) in holding that plaintiffs-appellants have no legal capacity to sue until their

status as legal heirs of the deceased is determined in Special Proceeding No. SC-99; (2) in ruling that there was
no collusion or connivance among the defendants-appellees, despite the fact that the issue in the motion to
dismiss is purely legal, not factual; and (3) in denying the petition for a writ of preliminary injunction.
At the outset, let it be remembered that the defendants-appellees, in availing themselves of the defense that the
plaintiffs-appellants had not been declared to be the heirs of the deceased Victoriana Eguaras, have overlooked
the fact that the (defendants-appellees) themselves in their petition for intestate proceedings (Case SC-99) have
alleged that Filemon Ramirez and Monica Ramirez, two of herein plaintiffs-appellants, are the heirs of the
deceased. Insofar as defendants-appellees are concerned, it is our opinion that they are estopped from
questioning the heirship of these two named persons to the estate of the deceased.
There is no question that the rights to succession are automatically transmitted to the heirs from the moment of
1
the death of the decedent. While, as a rule, the formal declaration or recognition to such successional rights
needs judicial confirmation, this Court has, under special circumstances, protected these rights from
2
3
encroachments made or attempted before the judicial declaration. In Pascual vs. Pascual, it was ruled that
although heirs have no legal standing in court upon the commencement of testate or intestate proceedings, this
rule admits of an exception as "when the administrator fails or refuses to act in which event the heirs may act in
his place."
A similar situation obtains in the case at bar. The administrator is being charged to have been in collusion and
connivance with the mortgagees of a property of the deceased, allowing its foreclosure without notifying the
heirs, to the prejudice of the latter. Since the ground for the present action to annul the aforesaid foreclosure
proceedings is the fraud resulting from such insidious machinations and collusion in which the administrator has
allegedly participated, it would be farfetched to expect the said administrator himself to file the action in behalf
of the estate. And who else but the heirs, who have an interest to assert and to protect, would bring the action?
Inevitably, this case should fall under the exception, rather than the general rule that pending proceedings for
the settlement of the estate, the heirs have no right to commence an action arising out of the rights belonging to
the deceased.
On the second point raised, We fully agree with the plaintiffs-appellants that the lower court had gone too far in
practically adjudicating the case on the merits when it made the observation that "there could not have been
any connivance and/or collusion between plaintiffs in this case and Artemio Diawan as administrator." A
thorough scrutiny of the allegations in the motions to dismiss filed by defendants-appellees does not indicate
that that question was ever put at issue therein. On the other hand, the controversy on the existence or
inexistence of collusion between the parties as a result of which judgment was rendered against the estate is
the very core of the complaint that was dismissed. Undoubtedly, the cause of action is based on Section 30, Rule
132 of the Rules of Court.
We are not, however, in accord with the third assigned error the denial of the motion for the issuance of
preliminary injunction for it puts at issue the factual finding made by the lower court that the defendants had
already been placed in possession of the property. At this stage of the proceeding, and considering the nature of
the case before Us, such a question is, at this time, beyond the competence of the Court.

PREMISES CONSIDERED, the order appealed from is hereby set aside insofar as it dismissed the complaint in Civil
Case No. SC-319, and the records be remanded to the lower court for further proceedings. Costs against
defendants-appellees. The Clerk of Court is directed to furnish a copy of this decision to the Department of
Justice for its information.
G.R. No. 134441 May 19, 1999
INDALICIO
vs.
HON. COURT OF APPEALS,
PHILIPPINES,respondents.

P.
CIVIL

SERVICE

CONTI, petitioner,
COMMISSION

and

POLYTECHNIC

UNIVERSITY

THE

VITUG, J.:
Petitioner Indalicio Conti would seek to nullify in this petition for certiorari and mandamus the resolution, dated
13 May 1998, of the Court of Appeals which dismissed his petition thereat for certiorari, prohibition
and mandamus assailing the resolution dated 02 November 1995, of the Civil Service Commission ("CSC"). In its
aforedated resolution, CSC dismissed petitioner Conti from the service.
Gathered from the pleadings, along with the annexes, and the assailed decision of the appellate court, the
following sequence of events would appear to haven taken place.
Sometime in 1989 the Polytechnic University of the Philippines ("PUP") appointed petitioner Indalicio P. Conti.
Assistant Professor IV, under National Compensation Circular ("NCC") 33. The circular, intended to be the criteria
in ranking the faculty members in state universities and colleges was issued by the Philippine Association of State
Universities and Colleges ("PASUC").
On 05 November 1992 Conti was one of the faculty members who filed with the Human Resources Management
Division ("HRMD") of PUP a personal data sheet required of members of the faculty who were reclassified or
promoted under NCC 68 which amended NCC 33. Conti, on the basis of points previously earned, was reclassified
from Assistant Professor IV to Professor I under NCC 68. For his "points" to be formally recognized that would
earn his promotion to Professor I, he had to submit himself to written and oral examinations conducted by the
PASUC evaluators who were tasked to make the due accreditation. The evaluation by the PASUC evaluators took
place the following year.
On 05 March 1993 Conti received a memorandum from the chairman of the Accreditors/Evaluators, directing
him to present himself for IAC Evaluation. He was also required to submit a personal data sheet which he
forthwith did. Conti undertook the tests conducted by the accreditation/evaluation committee. The result of the
accreditation/evaluation showed that Conti placed eight ("8th") among the candidates and was thereby
reclassified from Assistant Professor IV to Professor I. On 01 July 1993, Dr. Zenaida A. Olonan, President of PUP,
issued an appointment paper to Conti, confirming his promotional appointment with Dionisia P. Pingol, Director
II of CSFO-NCR, signing below the name of Dr. Olonan for the CSC.1wphi1.nt

During the first week of December 1993, Miss Dionisia P. Pingol sent a letter dated 02 December 1993, to Dr.
Zenaida Olonan asking for a copy of Conti's MBA diploma or transcript of records in order to verify an
"information" she had received to the effect that Mr. Conti was not a masteral degree holder. When furnished
with a copy of the letter of Ms. Pingol Conti sent a written reply, dated 11 December 1993, contending that a
masteral degree was not a requisite for the position of Professor I under NCC 68.

WHEREFORE, Indalicio P. Conti is hereby found guilty of Dishonesty. Accordingly, he is meted out the penalty of
dismissal from the service with all its accessory penalties. CSC-NCR, however, is thus directed to recall the
4
approval of said appointment of Conti as Professor I, Polytechnic University of the Philippines.

On 25 April 1994, Ms Benita O. Santos, Director IV of CSC-NCR, formally charged Conti with dishonesty which, in
part, read:

Several letters were thereafter sent by Conti to CSC calling its attention to his pending motion for
reconsideration. On 13 June 1995, Conti filed a formal motion for the resolution of his plea for reconsideration.
Still, the CSC had not acted. On 23 February 1998, Conti finally filed with this Court a petition for certiorari,
prohibition and mandamus, docketed G.R. No. 132531, in which he contended that

That in support of your promotional appointment to the position of Professor I, Polytechnic University of the
Philippines (PUP), you represented in your Personal Data Sheet that you finished Masteral degree in Business
Administration (MBA), however, after verification and evaluation of your transcript of records, it was found out
that you are not a graduate of MBA as you alleged. It would you appear then that you misrepresented yourself
to be an MBA degree holder. Such act is contrary to Civil Service law and rules.
Upon his receipt of a copy of the charge, Conti filed an answer with an explanation that since a masteral degree
was not necessary for the promotion of a faculty member to professorial level under PASUC Evaluation
Guidelines used in NCC 33, as amended by NCC 68, he had not benefited nor gained all undue advantage over
other faculty members. He averred that it was, given the limited time in the preparation of supporting papers for
his reclassification, an honest mistake on his part.
The CSC conducted a hearing and after the parties had submitted their respective pieces of evidence, a
2
resolution dated 02 November 1995, was issued by the CSC, certain pertinent portions of which read:
By writing "MBA" in his Personal Data Sheet (PDS), respondent intended to impress upon the reader, without
further qualifications like for a number of units only or without thesis especially the evaluators of his
appointment papers that he is a graduate of MBA. The defense that he did not claim completion of the aforesaid
degree but only for "units" of the same deserves no consideration. No proof was ever presented to substantiate
his defense. At most, it was a mere afterthought, for otherwise he would have written the number of units he
earned leading to said Masteral degree. Failing to do so, one cannot help but conclude that the omission is
intentional, deliberate and adopted by the respondent to support his appointment as Professor I.
On the basis of respondents misrepresentation, the Chief, Personnel Division, PUP, was led to believe that Conti
is qualified for appointment to the subject position.
Respondent ought to know the distinction between the word/phrase "MBA" and "MBA units." Accomplishment
or a filling up of public documents, such as the PDS must be done correctly and accurately. Any
misrepresentation in a material fact made with deliberate intent to mislead and to take undue advantage is plain
3
dishonesty.
Concluding, the CSC, in the dispositive portion of its resolution, held Conti guilty of dishonesty, thus:

On 13 December 1995 Conti moved for a reconsideration of the CSC resolution.

. . . (t)he CSC acted withhout jurisdiction when it heard, tried, and decided the instant as a court of origin;
. . . (t)he CSC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it found the
petitioner guilty of dishonesty; and
. . . (t)he CSC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it has not
5
acted for more than a year on the petitioner's motion for reconsideration/new trial.
In a resolution, dated 03 March 1998, the Court referred the petition to the Court of Appeals. In its now
challenged resolution, the appellate court dismissed the petition for certiorari, prohibition and mandamus for
having been filed out of time, thusly:
For having been fried out of time, this petition for certiorari, prohibition and mandamus, which was originally
filed with but referred to this Court by the Honorable Supreme Court, must have to be DENIED DUE COURSE.
As no less admitted in the petition itself (at page one thereof), petitioner received copy of the assailed
Resolution of the respondents Civil Service Commission (CSC) on "06 December 1995." Under Supreme Court
(SC) Revised Circular No. 1-91, as amended by SC Revised Administrative Circular No. 1-95, now incorporated in
Rule 43 of the 1997 Rules of Civil Procedure, appeals from judgments, final orders or resolutions or quasi-judicial
agencies, like the Civil Service Commission, shall be taken to the Court of Appeals by way of a petition for review
within fifteen (15) days from notice of the assailed judgment, order or resolution (Mateo vs. Court of Appeals,
247 SCRA 284 [1995]).
With the very admission by the petitioner himself that copy of the challenged CSC Resolution was received by
him way back on December 6, 1995, it need no belaboring to understand that the present petition which was
6
filed only on February 23, 1996, was belatedly filed. In fact, it was filed almost three (3) months passed its due
date.
We may add that the mode of appeal resorted to certiorari, instead of a petition for review makes the
7
recourse even doubly dismissible.
Conti sought reconsideration but it was to no avail; hence, the instant recourse.

Conti explains that his petition before the appellate court for certiorari prohibition and mandamus is an original
action under Rule 65 of the Revised Rules on Civil Procedure and not an appeal under Rule 43 thereof.
Accordingly he insists the petition has not been filed out of time. This stance of Conti is shared by the Solicitor
General in his Manifestation in lieu of comment. PUP, upon the other hand argues that appeal via a petition for
review under Rule 43 of the Revised Rules on Civil Procedure, and not the special civil action
of certiorari prohibition and mandamus, is the proper remedy anent the final resolution of the CSC. Since Conti
has received the CSC resolution as early as 06 December 1995, the filing of his petition only on 23 February 1998
PUP argues, has clearly been out of time inasmuch as the rules mandate that "appeal shall be taken within
fifteen (15) days from notice of the final order or resolution, or of the denial of petitioner's motion for new trial
or reconsideration duly fried in accordance with the governing law of the court of agency a quo."
The instant petition has merit, and it must be granted.
Before
the
advent
of
Revised
Administrative
Circular
("RAC")
No.
8
1-95 and the eventual incorporation of its provisions in the 1997 Revised Civil Procedure under Rule
9
43 thereof, the established rule had been that a decision. order, or ruling of the CSC, the single arbiter of all
contests relating to the civil service, was unappealable subject only to this Court's certiorari jurisdiction. In other
words, no appeal could then lie from judgments of the CSC and that a party aggrieved thereby should proceed to
the Supreme Court alone on certiorari under Rule 65 of the Rules of Court within thirty (30) days from receipt of
a copy thereof.
RAC No 1-95 made effective as of 01 June 1995, now mandates, however that an appeal from judgments final
orders or resolutions of quasi-judicial agencies like the CSC may be taken to the Court of Appeals by way of a
petition for review within fifteen (15) days from notice of the assailed judgment order or resolution. Regarding
cases still pending with this Court via petitions for certiorari directed against CSC prior to the effectivity of RAC 195 and those that might have been filed soon thereafter, the Circular contains the following transitory
provisions, viz.:
14 Transitory Provisions All petitions for certiorari against the Civil Service Commission and the Central Board
of Assessment Appeals filed and pending in the Supreme Court prior to the effectivity of this Revised
Administrative Circular shall be treated as petitions for review hereunder and shall be transferred to the Court of
Appeals for appropriate disposition. Petitions for certiorari against the aforesaid agencies which may be filed
after the effectivity hereof and up to June 30, 1995 shall likewise be considered as petitions for review and shall
be referred to the Court of Appeals for the same purpose. (Emphasis supplied.)
Conti's initial petition for certiorari, prohibition and mandamus against CSC which he filed before this Court on
23 February 1998 could have thus been outrightly dismissed had there not been the attendance of an
exceptional circumstance, hereinafter explained, that justified his recourse to such special remedies.
Truly, an essential requisite for the availability of the extraordinary remedies under the Rules is an absence of an
appeal nor any "plain, speedy and adequate remedy" in the ordinary course of law, one which has been so
defined as a "remedy which (would) equally (be) beneficial, speedy and sufficient not merely a remedy which at
some time in the future will bring about a revival of the judgment . . . complained of in the certiorari proceeding,
but a remedy which will promptly relieve the petitioner from the petitioner from the injurious effects of that

judgment
and
the
acts
of
the
inferior
court
or
tribunal"
10
concerned. Illustrative of such a plain, speedy and adequate remedy in the ordinary course of law is a motion
11
for reconsideration that has thus often been considered a condition sine qua non for the grant of certiorari.
PUP capitalizes on the admission of Conti that he has a pending motion for reconsideration on the adverse
resolution of the CSC, contending that his petition for certiorari is thereby premature. Ironically, it is this very
argument that militates against PUP. As the Solicitor General so aptly points out, the continuous failure of
respondent CSC to resolve Conti's motion for reconsideration for so long a time has virtually amounted to a
denial of his right to due process and right to the speedy disposition of his case. In fact, there is yet no indication
on record that CSC has already resolved Conti's motion for reconsideration. It cannot be gainsaid that it is the
inadequacy not the total absence, of all other legal remedies and the danger of the failure of justice without the
12
writ, that should determine the propriety of certiorari. This Court has ruled that a recourse to certiorari is
13
proper not only where there is a clear deprivation of petitioner's fundamental right to due process; but so also
14
where other special circumstances warrant immediate and more direct action. Conti's motion for
reconsideration has been pending with the CSC for more than two years since 13 December 1995 up until his
petition with this Court on 28 February 1998.
Given the circumstances, it should behoove the appellate court to resolve the case on its merits
WHEREFORE, the case is REMANDED to the Court of Appeals for further proceedings. No costs.
SO ORDERED.
G.R. No. 178495

July 26, 2010

SPOUSES
RODOLFO
A.
NOCEDA
vs.
AURORA ARBIZO-DIRECTO, Respondent.

and

ERNA

T.

NOCEDA, Petitioners,

DECISION
NACHURA, J.:
1

Assailed in the instant petition is the Decision of the Court of Appeals (CA), dismissing the appeal on the ground
of res judicata.
On September 16, 1986, respondent Aurora Arbizo-Directo filed a complaint against her nephew, herein
petitioner Rodolfo Noceda, for "Recovery of Possession and Ownership and Rescission/Annulment of Donation"
with the Regional Trial Court (RTC) of Iba, Zambales, Branch 71, docketed as Civil Case No. RTC-354-I.
Respondent alleged that she and her co-heirs have extra-judicially settled the property they inherited from their
late father on August 19, 1981, consisting of a parcel of land, described as Lot No. 1121, situated in Bitoong, San
Isidro, Cabangan, Zambales. She donated a portion of her hereditary share to her nephew, but the latter
occupied a bigger area, claiming ownership thereof since September 1985.

Judgment was rendered in favor of respondent on November 6, 1991, where the RTC (a) declared the ExtraJudicial Settlement-Partition dated August 19, 1981 valid; (b) declared the Deed of Donation dated June 1, 1981
revoked; (c) ordered defendant to vacate and reconvey that donated portion of Lot 2, Lot 1121 subject of the
Deed of Donation dated June 1, 1981 to the plaintiff or her heirs or assigns; (d) ordered the defendant to remove
the house built inside the donated portion at the defendants expense or pay a monthly rental of P300.00
2
Philippine Currency; and (e) ordered the defendant to pay attorneys fees in the amount of P5,000.00. The
decision was appealed to the CA, docketed as CA-G.R. CV No. 38126.
On January 5, 1995, spouses Rodolfo Dahipon and Cecilia Obispo- Dahipon filed a complaint for recovery of
ownership and possession, and annulment of sale and damages against spouses Antonio and Dominga Arbizo,
spouses Rodolfo and Erna Noceda, and Aurora Arbizo-Directo with the RTC, Iba, Zambales, Branch 70. This was
docketed as Civil Case No. RTC-1106-I. In the complaint, spouses Dahipon alleged that they were the registered
owners of a parcel of land, consisting of 127,298 square meters, situated in Barangay San Isidro, Cabangan,
Zambales, designated as Lot 1121-A. The Original Certificate of Title No. P-9036 over the land was issued in the
name of Cecilia Obispo-Dahipon, pursuant to Free Patent No. 548781. Spouses Dahipon claimed that the
defendants therein purchased portions of the land from them without paying the full amount. Except for Aurora,
a compromise agreement was entered into by the parties, as a result of which, a deed of absolute sale was
executed, and TCT No. T-50730 was issued in the name of spouses Noceda for their portion of the land. For her
part, Aurora questioned Dahipons alleged ownership over the same parcel of land by filing an adverse claim.
In the meantime, a decision was rendered in CA-G.R. CV No. 38126 on March 31, 1995 with the following fallo:
WHEREFORE, judgment is hereby rendered, ORDERING defendant Rodolfo Noceda to VACATE the portion known
as Lot "C" of Lot 1121 per Exhibit E, which was allotted to plaintiff Aurora Arbizo-Directo. Except for this
modification, the Decision dated November 6, 1991 of the RTC, Iba, Zambales, Branch 71, in Civil Case No. RTC3
354-I, is hereby AFFIRMED in all other respects. Costs against defendant Rodolfo Noceda.
Undaunted, petitioners filed a petition for review with this Court, which was docketed as G.R. No. 119730. The
Court found no reversible error, much less grave abuse of discretion, with the factual findings of the two courts
4
below, and thus denied the petition on September 2, 1999. The decision became final and executory, and a writ
of execution was duly issued by the RTC on March 6, 2001 in Civil Case No. RTC-354-I.
On December 4, 2003, petitioners instituted an action for quieting of title against respondent, docketed as Civil
Case No. 2108-I. In the complaint, petitioners admitted that Civil Case No. RTC-354-I was decided in favor of
respondent and a writ of execution had been issued, ordering them to vacate the property. However, petitioners
claimed that the land, which was the subject matter of Civil Case No. RTC-354-I, was the same parcel of land
owned by spouses Dahipon from whom they purchased a portion; and that a title (TCT No. T-37468) was, in fact,
issued in their name. Petitioners prayed for the issuance of a writ of preliminary injunction to enjoin the
implementation of the Writ of Execution dated March 6, 2001 in Civil Case No. RTC-354-I, and that "a declaration
be made that the property bought, occupied and now titled in the name of [petitioners] was formerly part and
5
subdivision of Lot No. 1121 Pls-468-D, covered by OCT No. P-9036 in the name of Cecilia Obispo-Dahipon."

Respondent filed a Motion to Dismiss on the ground of res judicata. Respondent averred that petitioners, aware
of their defeat in Civil Case No. RTC-354-I, surreptitiously negotiated with Cecilia Obispo-Dahipon for the sale of
the land and filed the present suit in order to subvert the execution thereof.
The trial court denied the motion, holding that there was no identity of causes of action.
Trial thereafter ensued. On January 25, 2006, after petitioners presented their evidence, respondent filed a
Demurrer to Evidence, stating that the claim of ownership and possession of petitioners on the basis of the title
emanating from that of Cecilia Obispo-Dahipon was already raised in the previous case (Civil Case No. RTC-354-I).
On February 22, 2006, the trial court issued a resolution granting the demurrer to evidence.
The CA affirmed. Hence, petitioners now come to this Court, raising the following issues:
WHETHER OR NOT THE PRINCIPLE OF RES JUDICATA OR DOCTRINE OF CONCLUSIVENESS OF JUDGMENT IS
APPLICABLE UNDER THE FACTS OBTAINING IN THE PRESENT CASE[;]
WHETHER OR NOT THE RESPONDENT HAS A BETTER TITLE THAN THE PETITIONERS[; and]
WHETHER OR NOT THE RULING ON PURCHASERS IN BAD FAITH IS APPLICABLE IN THE PRESENT CASE[.]

Petitioners assert that res judicata does not apply, considering that the essential requisites as to the identity of
parties, subject matter, and causes of action are not present.
The petition is bereft of merit.
The doctrine of res judicata is set forth in Section 47 of Rule 39 of the Rules of Court, as follows:
Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other
matter that could have been raised in relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special proceeding, litigating for the same
thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have
been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or
which actually and necessarily included therein or necessary thereto.
The principle of res judicata lays down two main rules, namely: (1) the judgment or decree of a court of
competent jurisdiction on the merits concludes the litigation between the parties and their privies and
constitutes a bar to a new action or suit involving the same cause of action either before the same or any other

tribunal; and (2) any right, fact, or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which a judgment or decree is rendered on the merits is
conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies
whether or not the claims or demands, purposes, or subject matters of the two suits are the same. These two
main rules mark the distinction between the principles governing the two typical cases in which a judgment may
8]
operate as evidence. The first general rule above stated, and which corresponds to the afore-quoted paragraph
(b) of Section 47, Rule 39 of the Rules of Court, is referred to as "bar by former judgment"; while the second
general rule, which is embodied in paragraph (c) of the same section and rule, is known as "conclusiveness of
9
judgment."
10

The Court in Calalang v. Register of Deeds of Quezon City explained the second concept which we reiterate
herein, to wit:
The second concept conclusiveness of judgment states that a fact or question which was in issue in a
former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is
conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them
are concerned and cannot be again litigated in any future action between such parties or their privies, in the
same court or any other court of concurrent jurisdiction on either the same or different cause of action, while
the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one
action can be conclusive as to a particular matter in another action between the same parties or their privies, it is
essential that the issue be identical. If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a former judgment between the
same parties or their privies will be final and conclusive in the second if that same point or question was in issue
and adjudicated in the first suit (Nabus v. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is
not required but merely identity of issue.
Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals (197 SCRA 201, 210 [1991]),
reiteratedLopez v. Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment
which bars the prosecution of a second action upon the same claim, demand, or cause of action, and
conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between
the same parties on a different claim or cause of action.
The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in
former action are commonly applied to all matters essentially connected with the subject matter of the
litigation. Thus, it extends to questions necessarily implied in the final judgment, although no specific finding
may have been made in reference thereto and although such matters were directly referred to in the pleadings
and were not actually or formally presented. Under this rule, if the record of the former trial shows that the
judgment could not have been rendered without deciding the particular matter, it will be considered as having
settled that matter as to all future actions between the parties and if a judgment necessarily presupposes certain
11
premises, they are as conclusive as the judgment itself.
The foregoing disquisition finds application in the case at bar. Undeniably, the present case is closely related to
the previous case (Civil Case No. RTC-354-I), where petitioners raised the issue of ownership and possession of

Lot No. 1121 and the annulment of the donation of said lot to them. The RTC found for respondent, declaring the
deed of donation she executed in favor of petitioners revoked; and ordered petitioners to vacate and reconvey
the donated portion to respondent. The decision of the RTC was affirmed by the CA, and became final with the
denial of the petition for review by this Court in G.R. No. 119730. In that case, the Court noted the established
fact "that petitioner Noceda occupied not only the portion donated to him by respondent Aurora Arbizo-Directo,
but he also fenced the whole area of Lot C which belongs to private respondent Directo, thus, petitioners act of
occupying the portion pertaining to private respondent Directo without the latters knowledge and consent is an
act of usurpation which is an offense against the property of the donor and considered as an act of ingratitude of
12
a donee against the donor." Clearly, therefore, petitioners have no right of ownership or possession over the
land in question.1avvph!1
Under the principle of conclusiveness of judgment, such material fact becomes binding and conclusive on the
parties. When a right or fact has been judicially tried and determined by a court of competent jurisdiction, or
when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed,
13
should be conclusive upon the parties and those in privity with them. Thus, petitioners can no longer question
respondents ownership over Lot No. 1121 in the instant suit for quieting of title. Simply put, conclusiveness of
judgment bars the relitigation of particular facts or issues in another litigation between the same parties on a
14
different claim or cause of action.
Furthermore, we agree that petitioners instituted the instant action with unclean hands. Aware of their defeat in
the previous case, they attempted to thwart execution and assert their alleged ownership over the land through
their purported purchase of a lot from Cecilia Obispo-Dahipon. This later transaction appears to be suspect. A
perusal of G.R. No. 119730 reveals that the Court was not unaware of Dahipons alleged claim over the same
parcel of land. It noted that Dahipon did not even bother to appear in court to present her free patent upon
respondents request, or to intervene in the case, if she really had any legitimate interest over the land in
15
question. In any event, petitioners assertion of alleged good title over the land cannot stand considering that
they purchased the piece of land from Dahipon knowing fully well that the same was in the adverse possession
of another.
Thus, we find no reversible error in the appellate courts ruling that petitioners are in fact buyers in bad faith. We
quote:
With appellants actual knowledge of facts that would impel a reasonable man to inquire further on *a+ possible
defect in the title of Obispo, considering that she was found not to have been in actual occupation of the land in
CA-G.R. CV No. 38126, they cannot simply invoke protection of the law as purchasers in good faith and for value.
In a suit to quiet title, defendant may set up equitable as well as legal defenses, including acquisition of title by
adverse possession and a prior adjudication on the question under the rule on res judicata. Appellants status as
holders in bad faith of a certificate of title, taken together with the preclusive effect of the right of possession
and ownership over the disputed portion, which was adjudged in favor of appellee in Civil Case No. RTC-354-I,
thus provide ample justification for the court a quo to grant the demurrer to evidence and dismiss their suit for
16
quieting of title filed against the said appellee.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 87026 is AFFIRMED in toto.

SO ORDERED.
G.R. No. L-15499

on December 15, 1958 and having endorsed it to Mrs. Butte's counsel, the latter received the same on December
16, 1958. Appellant received the letter on December 19, 1958.
February 28, 1962

ANGELA
M.
vs.
MANUEL UY and SONS, INC., defendant-appellee.
Delgado,
Flores
and
Pelaez and Jalandoni for defendant-appellee.

BUTTE, plaintiff-appellant,

Macapagal

for

plaintiff-appellant.

REYES, J.B.L., J.:

Appeal from a decision of the Court of First instance of Manila dismissing the action for legal redemption filed by
plaintiff-appellant.
It appears that Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot located at Sta. Cruz,
Manila, as shown by Transfer Certificate of Title No. 52789, issued in the name of the following co-owners: Marie
Garnier Vda. de Ramirez, 1/6; Jose V. Ramirez, 1/6; Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6; and Jose Ma.
Ramirez, 1/6.
On October 20, 1951, Jose V. Ramirez died. Subsequently, Special Proceeding No. 15026 was instituted to settle
his estate, that included the one-sixth (1/6) undivided share in the aforementioned property. And although his
last will and testament, wherein he bequeathed his estate to his children and grandchildren and one-third (1/3)
of the free portion to Mrs. Angela M. Butte, hereinafter referred to as plaintiff-appellant, has been admitted to
probate, the estate proceedings are still pending up to the present on account of the claims of creditors which
exceed the assets of the deceased. The Bank of the Philippine Islands was appointed judicial administrator.
Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de Ramirez, one of the co-owners of the late Jose V.
Ramirez in the Sta. Cruz property, sold her undivided 1/6 share to Manuel Uy & Sons, Inc. defendant-appellant
herein, for the sum of P500,000.00. After the execution by her attorney-in-fact, Mrs. Elsa R. Chambers, of an
affidavit to the effect that formal notices of the sale had been sent to all possible redemptioners, the deed of
sale was duly registered and Transfer Certificate of Title No. 52789 was cancelled in lieu of which a new one was
issued in the name of the vendee and the other-co-owners.
On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent a letter to the Bank of the Philippine Islands
as judicial administrator of the estate of the late Jose V. Ramirez informing it of the above-mentioned sale. This
letter, together with that of the bank, was forwarded by the latter to Mrs. Butte c/o her counsel Delgado, Flores
& Macapagal, Escolta, Manila, and having received the same on December 10, 1958, said law office delivered
them to plaintiff-appellant's son, Mr. Miguel Papa, who in turn personally handed the letters to his mother, Mrs.
Butte, on December 11 and 12, 1958. Aside from this letter of defendant-appellant, the vendor, thru her
attorney-in-fact Mrs. Chambers, wrote said bank on December 11, 1958 confirming vendee's letter regarding the
sale of her 1/6 share in the Sta. Cruz property for the sum of P500,000.00. Said letter was received by the bank

On January 15, 1959, Mrs. Angela M. Butte, thru Atty. Resplandor Sobretodo, sent a letter and a Philippine
National Bank cashier's check in the amount of P500,000.00 to Manuel Uy & Sons, Inc. offering to redeem the
1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez. This tender having been refused, plaintiff on the same day
consigned the amount in court and filed the corresponding action for legal redemption. Without prejudice to the
determination by the court of the reasonable and fair market value of the property sold which she alleged to be
grossly excessive, plaintiff prayed for conveyance of the property, and for actual, moral and exemplary damages.
After the filing by defendant of its answer containing a counterclaim, and plaintiff's reply thereto, trial was held,
after which the court rendered decision on May 13, 1959, dismissing plaintiff's complaint on the grounds that
she has no right to redeem the property and that, if ever she had any, she exercised the same beyond the
statutory 30-day period for legal redemptions provided by the Civil Code. The counterclaim of defendant for
damages was likewise dismissed for not being sufficiently established. Both parties appealed directly to this
Court.
Based on the foregoing facts, the main issues posed in this appeal are: (1) whether or not plaintiff-appellant,
having been bequeathed 1/3 of the free portion of the estate of Jose V. Ramirez, can exercise the right of legal
redemption over the 1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez despite the presence of the judicial
administrator and pending the final distribution of her share in the testate proceedings; and (2) whether or not
she exercised the right of legal redemption within the period prescribed by law.
The applicable law involved in the present case is contained in Articles 1620, p. 1, and 1623 of the Civil Code of
the Philippines, which read as follows:
ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other-coowners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to
the share they may respectively have in the thing owned in common. (1522a)
ART. 1623. The right of legal predemption or redemption shall not be exercised except within thirty days from
the notice in writing by the respective vendor, or by the vendor, as the case may be. The deed of sale shall not be
accorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written
notice thereof at all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners. (1524a)
That the appellant Angela M. Butte is entitled to exercise the right of legal redemption is clear. As testamentary
heir of the estate of J.V. Ramirez, she and her co-heirs acquired an interest in the undivided one-sixth (1/6) share
owned by her predecessor (causante) in the Santa Cruz property, from the moment of the death of the aforesaid
co-owner, J.V. Ramirez. By law, the rights to the succession of a deceased persons are transmitted to his heirs

from the moment of his death, and the right of succession includes all property rights and obligations that
survive the decedent.
ART. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished
by his death. (659)
ART. 777. The rights to the succession are transmitted from the moment of the death of the decedent. (657a)
ART. 947. The legatee or devisee acquires a right to the pure and simple legacies or devisees from the death of
the testator, and transmits it to his heirs. (881a)
The principle of transmission as of the time of the predecessor's death is basic in our Civil Code, and is supported
by other related articles. Thus, the capacity of the heir is determined as of the time the decedent died (Art.
1034); the legitime is to be computed as of the same moment(Art. 908), and so is the in officiousness of the
donation inter vivos (Art. 771). Similarly, the legacies of credit and remission are valid only in the amount due
and outstanding at the death of the testator (Art. 935),and the fruits accruing after that instant are deemed to
pertain to the legatee (Art. 948).
As a consequence of this fundamental rule of succession, the heirs of Jose V. Ramirez acquired his undivided
share in the Sta. Cruz property from the moment of his death, and from that instant, they became co-owners in
the aforesaid property, together with the original surviving co-owners of their decedent (causante). A co-owner
of an undivided share is necessarily a co-owner of the whole. Wherefore, any one of the Ramirez heirs, as such
co-owner, became entitled to exercise the right of legal redemption (retracto de comuneros) as soon as another
co-owner (Maria Garnier Vda. de Ramirez) had sold her undivided share to a stranger, Manuel Uy & Sons, Inc.
This right of redemption vested exclusively in consideration of the redemptioner's share which the law nowhere
takes into account.
The situation is in no wise altered by the existence of a judicial administrator of the estate of Jose V. Ramirez
while under the Rules of Court the administrator has the right to the possession of the real and personal estate
of the deceased, so far as needed for the payment of the decedent's debts and the expenses of administration
(sec. 3, Rule 85), and the administrator may bring or defend actions for the recovery or protection of the
property or rights of the deceased (sec. 2, Rule 88), such rights of possession and administration do not include
the right of legal redemption of the undivided share sold to Uy & Company by Mrs. Garnier Ramirez. The reason
is obvious: this right of legal redemption only came into existence when the sale to Uy & Sons, Inc. was
perfected, eight (8) years after the death of Jose V. Ramirez, and formed no part of his estate. The redemption
right vested in the heirs originally, in their individual capacity, they did not derivatively acquire it from their
decedent, for when Jose V. Ramirez died, none of the other co-owners of the Sta. Cruz property had as yet sold
his undivided share to a stranger. Hence, there was nothing to redeem and no right of redemption; and if the
late Ramirez had no such right at his death, he could not transmit it to his own heirs. Much less could Ramirez
acquire such right of redemption eight years after his death, when the sale to Uy & Sons, Inc. was made; because
death extinguishes civil personality, and, therefore, all further juridical capacity to acquire or transmit rights and
obligations of any kind (Civil Code of the Phil., Art. 42).

It is argued that the actual share of appellant Mrs. Butte in the estate of Jose V. Ramirez has not been specifically
determined as yet, that it is still contingent; and that the liquidation of estate of Jose V. Ramirez may require the
alienation of the decedent's undivided portion in the Sta. Cruz property, in which event Mrs. Butte would have
no interest in said undivided portion. Even if it were true, the fact would remain that so long as that undivided
share remains in the estate, the heirs of Jose V. Ramirez own it, as the deceased did own it before his demise, so
that his heirs are now as much co-owners of the Sta. Cruz property as Jose V. Ramirez was himself a co-owner
thereof during his lifetime. As co-owners of the property, the heirs of Jose V. Ramirez, or any one of them,
became personally vested with right of legal redemption as soon as Mrs. Garnier sold her own pro-indiviso
interest to Uy & Sons. Even if subsequently, the undivided share of Ramirez (and of his heirs) should eventually
be sold to satisfy the creditors of the estate, it would not destroy their ownership of it before the sale, but would
only convey or transfer it as in turn sold (of it actually is sold) to pay his creditors. Hence, the right of any of the
Ramirez heirs to redeem the Garnier share will not be retroactively affected. All that the law requires is that the
legal redemptioner should be a co-owner at the time the undivided share of another co-owner is sold to a
stranger. Whether or not the redemptioner will continue being a co-owner after exercising the legal
redemptioner is irrelevant for the purposes of law.
Nor it can be argued that if the original share of Ramirez is sold by the administrator, his heirs would stand in law
as never having acquired that share. This would only be true if the inheritance is repudiated or the heir's quality
as such is voided. But where the heirship is undisputed, the purchaser of hereditary property is not deemed to
have acquired the title directly from the deceased Ramirez, because a dead man can not convey title, nor from
the administrator who owns no part of the estate; the purchaser can only derive his title from the Ramirez heirs,
represented by the administrator, as their trustee or legal representative.
The right of appellant Angela M. Butte to make the redemption being established, the next point of inquiry is
whether she had made or tendered the redemption price within the 30 days from notices as prescribed by law.
This period, be it noted, is peremptory, because the policy of the law is not to leave the purchaser's title in
uncertainty beyond the established 30-day period. In considering whether or not the offer to redeem was timely,
we think that the notice given by the vendee (buyer) should not be taken into account. The text of Article 1623
clearly and expressly prescribes that the thirty days for making the redemption are to be counted from notice in
writing by the vendor. Under the old law (Civ. Code of 1889, Art. 1524), it was immaterial who gave the notice;
so long as the redeeming co-owner learned of the alienation in favor of the stranger, the redemption period
began to run. It is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular
method of giving notice, and that method must be deemed exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W.
[2d] 528). As ruled in Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275)
Why these provisions were inserted in the statute we are not informed, but we may assume until the contrary is
shown, that a state of facts in respect thereto existed, which warranted the legislature in so legislating.
The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined.
The seller of an undivided interest is in the best position to know who are his co-owners that under the law must
be notified of the sale. Also, the notice by the seller removes all doubts as to the fact of the sale, its perfection;
and its validity, the notice being a reaffirmation thereof, so that the party need not entertain doubt that the
seller may still contest the alienation. This assurance would not exist if the notice should be given by the buyer.

The notice which became operative is that given by Mrs. Chambers, in her capacity as attorney-in-fact of the
vendor Marie Garnier Vda. de Ramirez. Under date of December 11, 1958, she wrote the Administrator Bank of
the Philippine Islands that her principal's one-sixth (1/6) share in the Sta. Cruz property had been sold to Manuel
Uy & Sons, Inc. for P500,000.00. The Bank received this notice on December 15, 1958, and on the same day
endorsed it to Mrs. Butte, care of Delgado, Flores and Macapagal (her attorneys), who received the same on
December 16, 1958. Mrs. Butte tendered redemption and upon the vendee's refusal, judicially consigned the
price of P500,000.00 on January 15, 1959. The latter date was the last one of the thirty days allowed by the Code
for the redemption, counted by excluding December 16, 1958 and including January 15, 1959, pursuant to Article
13 of the Civil Code. Therefore, the redemption was made in due time.
The date of receipt of the vendor's notice by the Administrator Bank (December 15) can not be counted as
determining the start of thirty days; for the Administrator of the estate was not a proper redemptioner, since, as
previously shown, the right to redeem the share of Marie Garnier did not form part of the estate of Jose V.
Ramirez.
We find no jurisdiction for appellant's claim that the P500,000,00. paid by Uy & Sons, Inc. for the Garnier share is
grossly excessive. Gross excess cannot be predicated on mere individual estimates of market price by a single
realtor.
The redemption and consignation having been properly made, the Uy counterclaim for damages and attorney's
fees predicated on the assumption that plaintiff's action was clearly unfounded, becomes untenable.
PREMISES CONSIDERED, the judgment appealed from is hereby reversed and set aside, and another one entered:
(a) Declaring the consignation of P500,000,00 made by appellant Angela M. Butte duly and properly made;
(b) Declaring that said appellant properly exercised in due time the legal redemption of the one-sixth (1/6)
undivided portion of the land covered by Certificate of Title No. 59363 of the Office of the Register of Deeds of
the City of Manila, sold on December 9, 1958 by Marie Garnier Vda. de Ramirez to appellant Manuel Uy & Sons,
Inc.
(c) Ordering appellant Manuel Uy & Sons, Inc. to accept the consigned price and to convey to Angela M. Butte
the undivided portion above referred to, within 30 days from the time our decision becomes final, and
subsequently to account for the rentals and fruits of the redeemed share from and after January 15, 1958, until
its conveyance; and.
(d) Ordering the return of the records to the court of origin for further proceedings conformable to this opinion.
Without finding as to costs.
G.R. No. 125888 August 13, 1998
SPOUSES
vs.

ERNESTO

and

EVELYN

SICAD, petitioners,

COURT OF APPEALS, CATALINO VALDERRAMA, JUDY CRISTINA M. VALDERRAMA and JESUS ANTONIO
VALDERRAMA, respondents.

NARVASA, C.J.:
The issue raised in the appeal by certiorari at bar centers on the character of a deed of donation executed by the
late Aurora Virto DA. de Motinola of the City of Iloilo as either inter vivos or mortis causa. That deed, entitled
1
"DEED OF DONATION INTER VIVOS," was executed by Montinola on December 11, 1979. It named as donees
her grandchildren, namely: Catalino Valderrama, Judy Cristina Valderrama and Jesus Antonio Valderrama: and
treated of a parcel of land, Lot 3231 of the Cadastral Survey of Panay, located at Brgy. Pawa, Panay, Capiz,
covered by Transfer Certificate of Title No. T-16105 in the name of Montinola. The deed also contained the
signatures of the donees in acknowledgment of their acceptance of the donation.
Montinola's Secretary, Gloria Salvilla, afterwards presented the deed for recording in the Property Registry, and
the Register of Deeds cancelled TCT No. T-16105 (the donor's title) and, in its place, issued TCT No. T-16622 on
2
February 7, 1980, in the names of the donees. Montinola however retained the owner's duplicate copy of the
new title (No. T-16622), as well as the property itself, until she transferred the same ten (10) years later, on July
10, 1990, to the spouses, Ernesto and Evelyn Sicad.
3

On March 12, 1987, Aurora Montinola drew up a deed of revocation of the donation, and caused it to be
annotated as an adverse claim on TCT No. T-16622 (issued, as aforestated, in her grandchildren's names). Then,
on August 24, 1990, she filed a petition with the Regional Trial Court in Roxas City for the cancellation of said TCT
No. T-16622 and the reinstatement of TCT No. T- 16105 (in her name), the case being docketed as Special
Proceeding No. 3311. Her petition was founded on the theory that the donation to her three (3) grandchildren
was one mortis causa which thus had to comply with the formalities of a will; and since it had not, the donation
was void and could not effectively serve as basis for the cancellation of TCT No. T-16105 and the issuance in its
place of TCT No. T-16622.
The donees (Montinola's grandchildren) opposed the petition. In their opposition dated August 29, 1990, they
averred that the donation in their favor was one inter vivos which, having fully complied with the requirements
therefor set out in Article 729 of the Civil Code, was perfectly valid and efficacious. They also expressed doubt
about the sincerity of their grandmother's intention to recover the donated property, since she had not pursued
the matter of its revocation after having it annotated as an adverse claim.
The case, originally treated as a special proceeding, was subsequently considered by the lower Court as an
ordinary civil action in view of the allegations and issues raised in the pleadings. Pre-trial was had, followed by
trial on the merits which was concluded with the filing of the parties' memoranda. The Trial Court then rendered
judgment on March 27, 1991, holding that the donation was indeed one inter vivos, and dismissing Aurora
4
Montinola's petition for lack of merit. The matter of its revocation was not passed upon.
Montinola elevated the case to the Court of Appeals, her appeal being docketed as CA-G.R. CV No. 33202. She
5
however died on March 10, 1993, while the appeal was pending.

Shortly after Montinola's demise, a "Manifestation and Motion" dated March 31, 1993 was filed by Ernesto Sicad
6
and Evelyn Bofill-Sicad, herein petitioners, in which they (a) alleged that they had become the owners of the
property covered by TCT No. T-16622 in virtue of a "deed of definite sale dated May 25, 1992" accomplished by
Montinola in their favor, which was confirmed by "an affidavit dated November 26, 1997 also executed by the
latter, and (b) prayed that they be substituted as appellants and allowed to prosecute the case in their own
behalf.
Another motion was subsequently presented under date of April 7, 1993, this time by the legal heirs of Aurora
Montinola, namely: Ofelia M. de Leon, Estela M. Jaen and Teresita M. Valderama. They declared that they were
not interested in pursuing the case, and asked that the appeal be withdrawn. Montinola's counsel opposed the
motion.
On June 21, 1993, the Court of Appeals issued a Resolution: (a) ordering the substitution of the persons above
mentioned Ofelia de Leon, Estela M, Jaen, and Teresita M. Valderama as plaintiffs-appellants in place of the
late Aurora Montinola, as well as the joinder of the spouses Ernesto and Evelyn Bofill-Sicad as additional
7
appellants; and (b) denying the motion for the withdrawal of the appeal.
On June 30, 1995, the Eighth Division of the Court of Appeals promulgated its Decision on the case affirming the
8
judgment of the Regional Trial Court; and on July 31, 1996, it denied the separate motions for reconsideration
filed by Ofelia M. de Leon, Estela M. Jaen, and Teresita M. Valderrama, on the one hand, and by the spouses,
9
Ernest and Evelyn Sicad, on the other.
The Sicad Spouses have appealed to this Court; and here, they contend that the following errors were committed
by the Appellate Tribunal, to wit:
1) ** in ruling that the donation was inter vivos and in not giving due weight to the revocation of the donation;
and
2) ** in not ordering that the case be remanded for further reception of evidence.

10

The Comment filed for private respondents (the donees) under date of December 19, 1996 deals with what they
consider the "principal issue in this case ** (i.e.) whether the donation is mortis causa or inter vivos," and sets
forth the argument that the "donor clearly intended to effect the immediate transfer of ownership to the
donees." that the prohibition in the deed of donation "against selling the property within ten (10) years after the
death of the donor does not indicate that the donation is mortis causa," that the donor's "alleged act of
physically keeping the title does not suggest any intention to defer the effectivity of the donation," that the
"payment of real property taxes is consistent with the donor's' reservation of the right of usufruct," that the
donor's intent "is not determined by ** (her) self-serving post-execution declarations," the "donation was never
11
effectively revoked," and petitioners "have waived their right to question the proceedings in the trial court."
The Reply of the Sicad Spouses dated March 14, 1997 reiterates their thesis that the donation was mortis causa,
that "the provisions of the deed of donation indicate that it was intended to take effect upon the death of the
donor," that "the circumstances surrounding the execution of the deed, and the subsequent actions of the donor
incontrovertibly signify the donor's intent to transfer the property only after her death," that the donor "did not

intend to give effect to the donation," and that the procedure adopted by the Trial Court in the case was fatally
12
defective. A "Rejoinder" dated April 3, 1997 was then submitted by the Valderramas, traversing the assertions
13
of the Reply.
Considering the focus of the opposing parties, and their conflicting theories, on the intention of Aurora
Montinola in executing the document entitled "Deed of Donation Inter Vivos," it is needful to review the
circumstances of the signing of that document by Montinola, as ostensible donor, and her grandchildren, as
ostensible donees.
The evidence establishes that on December 11, 1979, when the deed of donation prepared by Montinola's
lawyer (Atty. Treas) was read and explained by the latter to the parties, Montinola expressed her wish that the
donation take effect only after ten (10) years from her death, and that the deed include a prohibition on the sale
of the property for such period. Accordingly, a new proviso was inserted in the deed reading: "however, the
donees shall not sell or encumber the properties herein donated within 10 years after the death of the
14
donor." The actuality of the subsequent insertion of this new proviso is apparent on the face of the
instrument: the intercalation is easily perceived and identified it was clearly typed on a different machine, and
15
is crammed into the space between the penultimate paragraph of the deed and that immediately preceding it.
Not only did Aurora Montinola order the insertion in the deed of that restrictive proviso, but also, after
recordation of the deed of donation, she never stopped treating the property as her own. She continued, as
explicity authorized in the deed itself, to possess the property, enjoy its fruits and otherwise exercise the rights
of dominion, paying the property taxes as they fell due all these she did until she transferred the Property to
the Sicad Spouses on July 10, 1990. She did not give the new certificate of title to the ostensible donees but
retained it, too, until she delivered it to the Sicads on the occasion of the sale of the property to them. In any
event, the delivery of the title to the donees would have served no useful purpose since, as just stated, they
were prohibited to effect any sale or encumbrance thereof for a period of ten (10) years after the ostensible
donor's decease. And consistent with these acts denoting retention of ownership of the property was
Montinola's openly expressed view that the donation was ineffectual and could not be given effect even after
ten (10) years from her death. For this view she sought to obtain judicial approval. She brought suit on August
24, 1990 to cancel TCT No. T-16622 (issued to her grandchildren) premised precisely on the invalidity of the
donation for failure to comply with the requisites of testamentary dispositions. Before that, she attempted to
undo the conveyance to her grandchildren by executing a deed of revocation of the donation on March 12, 1987,
and causing annotation thereof as an adverse claim on said TCT No. T-16622. She also exercised indisputable acts
of ownership over said property by executing, as just stated, deeds intended to pass title over it to third parties
16
petitioners herein.
As already intimated, the real nature of a deed is to be ascertained by both its language and the intention of the
parties as demonstrated by the circumstances attendant upon its execution. In this respect, case law has laid
17
down significant parameters. Thus, in a decision handed down in 1946, this Court construed a deed purporting
to be a donation inter vivos to be in truth onemortis causa because it stipulated (like the one now being inquired
into) "that all rents, proceeds, fruits, of the donated properties shall remain for the exclusive benefit and
disposal of the donor, Margarita David, during her lifetime; and that, without the knowledge and consent of the
donor, the donated properties could not be disposed of in any way, whether by sale, mortgage, barter, or in any

other way possible," On these essential premises, the Court said, such a donation must be deemed one "mortis
causa, because the combined effect of the circumstances surrounding the execution of the deed of donation and
of the above-quoted clauses thereof ** (was that) the most essential elements of ownership the right to
dispose of the donated properties and the right to enjoy the products, profits, possession remained with
Margarita David during her lifetime, and would accrue to the donees only after Margarita David's death." So, too,
in the case at bar, did these rights remain with Aurora Montinola during her lifetime, and could not pass to the
donees until ten (10) years after her death.
18

In another case decided in 1954 involving a similar issue, Bonsato v. Court of Appeals, this Court emphasized
that the decisive characteristics of a donation mortis causa, which it had taken into account in David v. Sison,
were that "the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is
even more important, specially provided that "without the knowledge and consent of the donor, the donated
properties could not be disposed of in any way,; thereby denying to the transferees the most essential attribute
of ownership, the power to dispose of the properties."
A donation which purports to be one inter vivos but withholds from the donee the right to dispose of the
donated property during the donor's lifetime is in truth one mortis causa. In a donation mortis causa "the right
19
of disposition is not transferred to the donee while the donor is still alive."
In the instant case, nothing of any consequence was transferred by the deed of donation in question to
Montinola's grandchildren, the ostensible donees. They did not get possession of the property donated. They did
not acquire the right to the fruits thereof, or any other right of dominion over the property. More importantly,
they did not acquire the right to dispose of the property this would accrue to them only after ten (10) years
from Montinola's death. Indeed, they never even laid hands on the certificate of title to the same. They were
therefore simply "paper owners" of the donated property. All these circumstances, including, to repeat, the
explicit provisions of the deed of donation reserving the exercise of rights of ownership to the donee and
prohibiting the sale or encumbrance of the property until ten (10) years after her death ineluctably lead to the
conclusion that the donation in question was a donation mortis causa, contemplating a transfer of ownership to
the donees only after the donor's demise.
20

The case of Alejandro v. Geraldez cited by the Court of Appeals in support of its challenged judgment is not
quite relevant. For in the deed of donation there in issue, there was a partial relinquishment of the right to
dispose of the property, in the event only that this became necessary "to defray the expenses and support of the
donors." That limited right to dispose of the donated lots, said this Court, "implies that ownership had passed
to ** (the donees) by means of the donation and **, therefore, the donation was already effective during the
donors' lifetime. That is a characteristic of a donation inter vivos." On the other hand, in the case at bar, the
donees were expressly prohibited to make any disposition of any nature or for any purpose whatever during the
donor's lifetime, and until ten (10) years after her death a prohibition which, it may be added, makes
21
inapplicable the ruling in Castro v. Court of Appeals, where no such prohibition was imposed, and the donor
retained only the usufruct over the property.
The Valderramas' argument that the donation is inter vivos in character and that the prohibition against their
disposition of the donated property is merely a condition which, if violated, would give cause for its revocation,

begs the question. It assumes that they have the right to make a disposition of the property, which they do not.
The argument also makes no sense, because if they had the right to dispose of the property and did in fact
dispose of it to a third person, the revocation of the donation they speak of would be of no utility or benefit to
the donor, since such a revocation would not necessarily result in the restoration of the donor's ownership and
enjoyment of the property.
It is also error to suppose that the donation under review should be deemed one inter vivos simply because
22
founded on considerations of love and affection. In Alejandro v. Geraldez, supra, this Court also observed that
"the fact that the donation is given in consideration of love and affection ** is not a characteristic of
donations inter vivos (solely) because transfersmortis causa may also be made for the same reason." Similarly,
in Bonsato v. Court of Appeals, supra, this Court opined that the fact "that the conveyance was due to the
affection of the donor for the donees and the services rendered by the latter, is of no particular significance in
determining whether the deeds, Exhs. "1" and "2," constitute transfers inter vivos or not, because a legacy may
23
have identical motivation."
Finally, it is germane to advert to the legal principle in Article 1378 of the Civil Code to the effect that in case of
doubt relative to a gratuitous contract, the construction must be that entailing "the least transmission of rights
and
24
interests,"
The donation in question, though denominated inter vivos, is in truth one mortis causa; it is void because the
essential requisites for its validity have not been complied with.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 33202 dated June 30, 1995 as well as the
Resolution denying reconsideration thereof, and the Decision of the Regional Trial Court in Special Case No. 3311
are SET ASIDE. The Deed of Donation Inter Vivos (Exh. "A") executed by Aurora Virto Vda. de Montinola on
December 11, 1979 in favor of Catalino M. Valderrama, Judy Cristina M. Valderrama and Jesus Antonio M.
Valderrama is declared null and void. The Register of Deeds of Roxas City is directed to cancel Transfer Certificate
of Title No. T-16622, revive and reinstate Transfer Certificate of Title No. T-16105.
SO ORDERED.