Page 1 of 9

WILLS and SUCCESSION (Atty.
Lielanie Yangyang-Espejo) 1
COMPILATION OF CASES (Page 1 of 9)
SUCCESSION IN GENERAL
RAMIREZ v. RAMIREZ
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-27952
February 15, 1982
TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA

LUISA PALACIOS, Administratrix, petitioner-appellee,
vs.
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors,
JORGE and ROBERTO RAMIREZ, legatees, oppositorsappellants.
ABAD SANTOS, J.:

The main issue in this appeal is the manner of partitioning
the testate estate of Jose Eugenio Ramirez among the
principal beneficiaries, namely: his widow Marcelle Demoron
de Ramirez; his two grandnephews Roberto and Jorge
Ramirez; and his companion Wanda de Wrobleski.
The task is not trouble-free because the widow Marcelle is a
French who lives in Paris, while the companion Wanda is an
Austrian who lives in Spain. Moreover, the testator provided
for substitutions.
Jose Eugenio Ramirez, a Filipino national, died in Spain on
December 11, 1964, with only his widow as compulsory heir.
His will was admitted to probate by the Court of First
Instance of Manila, Branch X, on July 27, 1965. Maria Luisa
Palacios was appointed administratrix of the estate. In due
time she submitted an inventory of the estate as follows:
XXXXX
On June 23, 1966, the administratrix submitted a project of
partition as follows: the property of the deceased is to be
divided into two parts. One part shall go to the widow 'en
pleno dominio" in satisfaction of her legitime; the other part
or "free portion" shall go to Jorge and Roberto Ramirez "en
nuda propriedad." Furthermore, one third (1/3) of the free
portion is charged with the widow's usufruct and the
remaining two-thirds (2/3) with a usufruct in favor of Wanda.
Jorge and Roberto opposed the project of partition on the
grounds: (a) that the provisions for vulgar substitution in
favor of Wanda de Wrobleski with respect to the widow's
usufruct and in favor of Juan Pablo Jankowski and Horacio
V. Ramirez, with respect to Wanda's usufruct are invalid
because the first heirs Marcelle and Wanda) survived the
testator; (b) that the provisions for fideicommissary
substitutions are also invalid because the first heirs are not
related to the second heirs or substitutes within the first
degree, as provided in Article 863 of the Civil Code; (c) that
the grant of a usufruct over real property in the Philippines in
favor of Wanda Wrobleski, who is an alien, violates Section
5, Article III of the Philippine Constitution; and that (d) the
proposed partition of the testator's interest in the Santa Cruz
(Escolta) Building between the widow Marcelle and the
appellants, violates the testator's express win to give this
property to them Nonetheless, the lower court approved the
project of partition in its order dated May 3, 1967. It is this
order which Jorge and Roberto have appealed to this Court.
1. The widow's legitime.
The appellant's do not question the legality of giving Marcelle
one-half of the estate in full ownership. They admit that the
testator's dispositions impaired his widow's legitime. Indeed,
under Art. 900 of the Civil Code "If the only survivor is the
widow or widower, she or he shall be entitled to one-half of
the hereditary estate." And since Marcelle alone survived the
deceased, she is entitled to one-half of his estate over which
he could impose no burden, encumbrance, condition or
substitution of any kind whatsoever. (Art. 904, par. 2, Civil
Code.)
It is the one-third usufruct over the free portion which the
appellants question and justifiably so. It appears that the
court a quo approved the usufruct in favor of Marcelle
because the testament provides for a usufruct in her favor of
one-third of the estate. The court a quo erred for Marcelle
who is entitled to one-half of the estate "en pleno dominio" as
her legitime and which is more than what she is given under
the will is not entitled to have any additional share in the
estate. To give Marcelle more than her legitime will run
counter to the testator's intention for as stated above his
dispositions even impaired her legitime and tended to favor
Wanda.
2. The substitutions.
It may be useful to recall that "Substitution is the appointjudgment of another heir so that he may enter into the
inheritance in default of the heir originally instituted." (Art.
857, Civil Code. And that there are several kinds of
substitutions, namely: simple or common, brief or
compendious, reciprocal, and fideicommissary (Art. 858,
Civil Code.) According to Tolentino, "Although the Code
enumerates four classes, there are really only two principal
classes of substitutions: the simple and the fideicommissary.
The others are merely variations of these two." (111 Civil
Code, p. 185 [1973].)
The simple or vulgar is that provided in Art. 859 of the Civil
Code which reads:
ART. 859. The testator may designate one or more persons
to substitute the heir or heirs instituted in case such heir or
heirs should die before him, or should not wish, or should be
incapacitated to accept the inheritance.
WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 2

A simple substitution, without a statement of the cases to
which it refers, shall comprise the three mentioned in the
preceding paragraph, unless the testator has otherwise
provided.
The fideicommissary substitution is described in the Civil
Code as follows:
ART. 863. A fideicommissary substitution by virtue of which
the fiduciary or first heir instituted is entrusted with the
obligation to preserve and to transmit to a second heir the
whole or part of inheritance, shall be valid and shall take
effect, provided such substitution does not go beyond one
degree from the heir originally instituted, and provided further
that the fiduciary or first heir and the second heir are living at
time of the death of the testator.
It will be noted that the testator provided for a vulgar
substitution in respect of the legacies of Roberto and Jorge
Ramirez, the appellants, thus: con sustitucion vulgar a favor
de sus respectivos descendientes, y, en su defecto, con
substitution vulgar reciprocal entre ambos.
The appellants do not question the legality of the substitution
so provided. The appellants question the sustitucion vulgar y
fideicomisaria a favor de Da. Wanda de Wrobleski" in
connection with the one-third usufruct over the estate given
to the widow Marcelle However, this question has become
moot because as We have ruled above, the widow is not
entitled to any usufruct.
The appellants also question the sustitucion vulgar y
fideicomisaria in connection with Wanda's usufruct over two
thirds of the estate in favor of Juan Pablo Jankowski and
Horace v. Ramirez.
They allege that the substitution in its vulgar aspect as void
because Wanda survived the testator or stated differently
because she did not predecease the testator. But dying
before the testator is not the only case for vulgar substitution
for it also includes refusal or incapacity to accept the
inheritance as provided in Art. 859 of the Civil Code, supra.
Hence, the vulgar substitution is valid.
As regards the substitution in its fideicommissary aspect, the
appellants are correct in their claim that it is void for the
following reasons:
(a) The substitutes (Juan Pablo Jankowski and Horace V.
Ramirez) are not related to Wanda, the heir originally
instituted. Art. 863 of the Civil Code validates a
fideicommissary substitution "provided such substitution
does not go beyond one degree from the heir originally
instituted."
What is meant by "one degree" from the first heir is
explained by Tolentino as follows:
Scaevola Maura, and Traviesas construe "degree" as

designation, substitution, or transmission. The Supreme
Court of Spain has decidedly adopted this construction.
From this point of view, there can be only one tranmission or
substitution, and the substitute need not be related to the
first heir. Manresa, Morell and Sanchez Roman, however,
construe the word "degree" as generation, and the present
Code has obviously followed this interpretation. by providing
that the substitution shall not go beyond one degree "from
the heir originally instituted." The Code thus clearly indicates
that the second heir must be related to and be one
generation from the first heir.
From this, it follows that the fideicommissary can only be
either a child or a parent of the first heir. These are the only
relatives who are one generation or degree from the fiduciary
(Op. cit., pp. 193-194.)
(b) There is no absolute duty imposed on Wanda to transmit
the usufruct to the substitutes as required by Arts. 865 and
867 of the Civil Code. In fact, the appellee admits "that the
testator contradicts the establishment of a fideicommissary
substitution when he permits the properties subject of the
usufruct to be sold upon mutual agreement of the
usufructuaries and the naked owners." (Brief, p. 26.)
3. The usufruct of Wanda.
The appellants claim that the usufruct over real properties of
the estate in favor of Wanda is void because it violates the
constitutional prohibition against the acquisition of lands by
aliens.
The 1935 Constitution which is controlling provides as
follows:
SEC. 5. Save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to acquire
or hold lands of the public domain in the Philippines. (Art.
XIII.)
The court a quo upheld the validity of the usufruct given to
Wanda on the ground that the Constitution covers not only
succession by operation of law but also testamentary
succession. We are of the opinion that the Constitutional
provision which enables aliens to acquire private lands does
not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless. Any alien
would be able to circumvent the prohibition by paying money
to a Philippine landowner in exchange for a devise of a piece
of land.
This opinion notwithstanding, We uphold the usufruct in favor
of Wanda because a usufruct, albeit a real right, does not
vest title to the land in the usufructuary and it is the vesting
of title to land in favor of aliens which is proscribed by the
Constitution.

IN VIEW OF THE FOREGOING, the estate of Jose Eugenio
Ramirez is hereby ordered distributed as follows:
One-half (1/2) thereof to his widow as her legitime;
One-half (1/2) thereof which is the free portion to Roberto
and Jorge Ramirez in naked ownership and the usufruct to
Wanda de Wrobleski with a simple substitution in favor of
Juan Pablo Jankowski and Horace V. Ramirez.
The distribution herein ordered supersedes that of the court
a quo. No special pronouncement as to costs.
SO ORDERED.
ARTICLE 728
CUEVAS v. CUEVAS
SUPREME COURT
Manila
EN BANC
G.R. No. L-8327
December 14, 1955
ANTONINA CUEVAS, plaintiff-appellant,

vs.
CRISPULO CUEVAS, defendant-appellee.
Pedro D. Maldia for appellant.
Teodoro P. Santiago for appellee.
Issues having been joined, and trial had, the Court of First
Instance denied the recovery sought, and Antonina Cuevas
thereupon appealed. The Court of Appeals forwarded the
case to this Court because, the case having been submitted
on a stipulation of facts, the appellant raised only questions
of law.
The first issue tendered converns the true nature of the deed
"Exhibit A"; whether it embodies a donation inter vivos, or a
disposition of property mortis causa revocable freely by the
transferor at any time before death. 1
It has been rules that neither the designation mortis causa,
nor the provision that a donation is "to take effect at the
death of the donor", is a controlling criterion in defining the
true nature of donations (Laureta vs. Mata, 44 Phil., 668;
Concepcion vs. Concepcion, 91 Phil., 823). Hence, the crux
of the controversy revolves around the following provisions
of the deed of donation:
Dapat maalaman ni Crispulo Cuevas na samantalang ako ay
nabubuhay, and lupa na ipinagkakaloob ko sa kaniya ay ako
pa rin and patuloy na mamomosecion, makapagparatrabaho,
makikinabang at ang iba pang karapatan sa pagmamayari
ay sa akin pa rin hanggang hindo ko binabawian ny buhay
ng Maykapal at ito naman ay hindi ko nga iya-alis pagkat
kung ako ay mamatay na ay inilalaan ko sa kaniya.
There is an apparent conflict in the expression above
quoted, in that the donor reserves to herself "the right of
possession, cultivation, harvesting and other rights and
attributes of ownership while I am not deprived of life by the
Almighty"; but right after, the same donor states that she "will
not takle away" (the property) "because I reserve it for him
(the donee) when I die."
On September 18, 1950, Antonina Cuevas executed a

notarized conveyance entitled "Donacin Mortis Causa,"
ceding to her nephew Crispulo Cuevas the northern half of a
parcel of unregistered land in barrio Sinasajan, municipality
of Penaranda, Province of Nueva Ecija (Exhibit A). In the
same instrument appears the acceptance of Crispulo
Cuevas.
The question to be decided is whetehr the donor intended to

part with the title to the property immediately upon the
execution of the deed, or only later, when she had died. If the
first, the donation is operative inter vivos; if the second, we
would be confronted with a disposition mortis causa, void
from the beginning because the formalities of testaments
were not observed (new Civil Code, Arts. 728 and 828; heirs
of Bonsato vs. Court of Appeals, 250 Off. Gaz. (8), p. 3568;
Tuason vs. Posadas, 54 Phil., 289; Sent. Trib. Sup. of Spain,
8 July 1943).
"Subsequently, on May 26, 1952, the donor executed

another notarial instrument entitled "Revocacion de
Donacion Mortis Causa" (Exhibit B) purporting to set aside
the preceding conveyance; and on August 26, 1952, she
brought action in the Court of First Instance to recover the
land conveyed, on the ground (1) that the donation being
mortis causa, it had been lawfully revoked by the donor; and
(2) even it if were a donation inter vivos, the same was
invalidated because (a) it was not properly accepted; (b)
because the donor did not reserve sufficient property for her
own maintenance, and (c) because the donee was guilty of
ingratitute, for having refused to support the donor.
We agree with the Court below that the decisive proof that
the present donation is operative inter vivor lies in the final
phrase to the effect that the donor will not dispose or take
away ("hindi ko nga iya-alis" in the original) the land
"because I am reserving it to him upon my death." By these
words the donor expressly renounced the right to freely
dispose of the property in favor of another (a right essential
to full ownership) and manifested the irrevocability of the
conveyance of the naked title to the property in favor of the
donee. As stated in our decision in Bonsato vs. Court of
Appeals, ante, such irrevocability is characteristic of
donations inter vivos, because it is incompatible with the idea
REYES, J. B. L., J.:

of a disposition post mortem. Witness article 828 of the New
Civil Code, that provides:
ART. 828. A will may be revoked by the testator at any time
before his death. Any waiver or restriction of this right is void.
It is apparent from the entire context of the deed of donation
that the donor intended that she should retain the entire
beneficial ownership during her lifetime, but that the naked
title should irrevocably pass to the donee. It is only thus that
all the expressions heretofore discussed can be given full
effect; and when the donor stated that she would continue to
retain the "possession, cultivation, harvesting and all other
rights and attributes of ownership," she meant only the
dominium utile, not the full ownership. As the Court below
correctly observed, the words "rights and attributes of
ownership" should be construed ejusdem generis with the
preceding rights of "possession, cultivation and harvesting"
expressly enumerated in the deed. Had the donor meant to
retain full or absolute ownership she had no need to specify
possession, cultivation and harvesting, since all these rights
are embodied in full or absolute ownership; nor would she
then have excluded the right of free disposition from the
"rights and attributes of ownership" that she reserved for
herself.lawphi1.net
Hence, the Court below rightly concluded that the deed
Exhibit A was a valid donation inter vivos, with reservation of
beneficial title during the lifetime of the donor. We may add
that it is highly desirable that all those who are called to
prepare or notarize deeds of donation should call the
attention of the donors to the necessity of clearly specifying
whether, notwithstanding the donation, they wish to retain
the right to control and dispose at will of the property before
their death, without need of the consent or intervention of the
beneficiary, since the express reservation of such right would
be conclusive indication that the liberality is to exist only at
the donor's death, and therefore, the formalities of
testaments should be observed; while, a converso, the
express waiver of the right of free disposition would place the
inter vivos character of the donation beyond dispute (Heirs of
Bonsato vs. Court of Appeals, 50 Off. Gaz. (8), p. 3568).
The argument that there was no sufficient acceptance,
because the deed "merely recites that (1) the donee has duly
read all the contents of this donation; (2) that he 'shall fully
respect all its terms'; and (3) that 'for the act of benevolence'
he is expressing his gratitude" but there is no show of
acceptance (Appellant's brief, p. 7), is without basis. To
respect the terms of the donation, and at the same time
express gratitude for the donor's benevolence, constitutes
sufficient acceptance, If the donee did not accept, what had
he to be grateful about? We are no longer under the
formulary system of the Roman law, when specific
expressions had to be used under paid of nullity.
Also unmeritoriious is the contention that the donation is void
because the donor failed to reserve enough for ther own
support. As we have seen, she expressly reserved to herself
all the benefits derivable from the donated property as long
as she lived. During that time, she suffered no diminution of

income. If that was not enough to support her, the deficiency
was not dur to the donation.
Finally, the donee is not rightfully chargeaboe with
ingratitude, because it was expressly stipulated that the
donee had a total income of only P30 a month, out of which
he had to support himself, his wife and his two children.
Evidently his means did not allow him to add the donor's
support to his own burdens.
Wherefore, the decision appealed from is affirmed. No costs
in this instance, appellant having obtained leave to litigate as
a pauper. So ordered.
JUTIC v. CA
SUPREME COURT
Manila
EN BANC
G.R. No. L-8327
December 14, 1955
ANTONINA CUEVAS, plaintiff-appellant,

vs.
CRISPULO CUEVAS, defendant-appellee.
Pedro D. Maldia for appellant.
Teodoro P. Santiago for appellee.
REYES, J. B. L., J.:

On September 18, 1950, Antonina Cuevas executed a
notarized conveyance entitled "Donacin Mortis Causa,"
ceding to her nephew Crispulo Cuevas the northern half of a
parcel of unregistered land in barrio Sinasajan, municipality
of Penaranda, Province of Nueva Ecija (Exhibit A). In the
same instrument appears the acceptance of Crispulo
Cuevas.
"Subsequently, on May 26, 1952, the donor executed
another notarial instrument entitled "Revocacion de
Donacion Mortis Causa" (Exhibit B) purporting to set aside
the preceding conveyance; and on August 26, 1952, she
brought action in the Court of First Instance to recover the
land conveyed, on the ground (1) that the donation being
mortis causa, it had been lawfully revoked by the donor; and
(2) even it if were a donation inter vivos, the same was
invalidated because (a) it was not properly accepted; (b)
because the donor did not reserve sufficient property for her
own maintenance, and (c) because the donee was guilty of
ingratitute, for having refused to support the donor.
Issues having been joined, and trial had, the Court of First
Instance denied the recovery sought, and Antonina Cuevas

thereupon appealed. The Court of Appeals forwarded the
case to this Court because, the case having been submitted
on a stipulation of facts, the appellant raised only questions
of law.
The first issue tendered converns the true nature of the deed
"Exhibit A"; whether it embodies a donation inter vivos, or a
disposition of property mortis causa revocable freely by the
transferor at any time before death. 1
It has been rules that neither the designation mortis causa,
nor the provision that a donation is "to take effect at the
death of the donor", is a controlling criterion in defining the
true nature of donations (Laureta vs. Mata, 44 Phil., 668;
Concepcion vs. Concepcion, 91 Phil., 823). Hence, the crux
of the controversy revolves around the following provisions
of the deed of donation:
Dapat maalaman ni Crispulo Cuevas na samantalang ako ay
nabubuhay, and lupa na ipinagkakaloob ko sa kaniya ay ako
pa rin and patuloy na mamomosecion, makapagparatrabaho,
makikinabang at ang iba pang karapatan sa pagmamayari
ay sa akin pa rin hanggang hindo ko binabawian ny buhay
ng Maykapal at ito naman ay hindi ko nga iya-alis pagkat
kung ako ay mamatay na ay inilalaan ko sa kaniya.
There is an apparent conflict in the expression above
quoted, in that the donor reserves to herself "the right of
possession, cultivation, harvesting and other rights and
attributes of ownership while I am not deprived of life by the
Almighty"; but right after, the same donor states that she "will
not takle away" (the property) "because I reserve it for him
(the donee) when I die."
The question to be decided is whetehr the donor intended to
part with the title to the property immediately upon the
execution of the deed, or only later, when she had died. If the
first, the donation is operative inter vivos; if the second, we
would be confronted with a disposition mortis causa, void
from the beginning because the formalities of testaments
were not observed (new Civil Code, Arts. 728 and 828; heirs
of Bonsato vs. Court of Appeals, 250 Off. Gaz. (8), p. 3568;
Tuason vs. Posadas, 54 Phil., 289; Sent. Trib. Sup. of Spain,
8 July 1943).
We agree with the Court below that the decisive proof that
the present donation is operative inter vivor lies in the final
phrase to the effect that the donor will not dispose or take
away ("hindi ko nga iya-alis" in the original) the land
"because I am reserving it to him upon my death." By these
words the donor expressly renounced the right to freely
dispose of the property in favor of another (a right essential
to full ownership) and manifested the irrevocability of the
conveyance of the naked title to the property in favor of the
donee. As stated in our decision in Bonsato vs. Court of
Appeals, ante, such irrevocability is characteristic of
donations inter vivos, because it is incompatible with the idea
of a disposition post mortem. Witness article 828 of the New
Civil Code, that provides:
ART. 828. A will may be revoked by the testator at any time

before his death. Any waiver or restriction of this right is void.
It is apparent from the entire context of the deed of donation
that the donor intended that she should retain the entire
beneficial ownership during her lifetime, but that the naked
title should irrevocably pass to the donee. It is only thus that
all the expressions heretofore discussed can be given full
effect; and when the donor stated that she would continue to
retain the "possession, cultivation, harvesting and all other
rights and attributes of ownership," she meant only the
dominium utile, not the full ownership. As the Court below
correctly observed, the words "rights and attributes of
ownership" should be construed ejusdem generis with the
preceding rights of "possession, cultivation and harvesting"
expressly enumerated in the deed. Had the donor meant to
retain full or absolute ownership she had no need to specify
possession, cultivation and harvesting, since all these rights
are embodied in full or absolute ownership; nor would she
then have excluded the right of free disposition from the
"rights and attributes of ownership" that she reserved for
herself.lawphi1.net
Hence, the Court below rightly concluded that the deed
Exhibit A was a valid donation inter vivos, with reservation of
beneficial title during the lifetime of the donor. We may add
that it is highly desirable that all those who are called to
prepare or notarize deeds of donation should call the
attention of the donors to the necessity of clearly specifying
whether, notwithstanding the donation, they wish to retain
the right to control and dispose at will of the property before
their death, without need of the consent or intervention of the
beneficiary, since the express reservation of such right would
be conclusive indication that the liberality is to exist only at
the donor's death, and therefore, the formalities of
testaments should be observed; while, a converso, the
express waiver of the right of free disposition would place the
inter vivos character of the donation beyond dispute (Heirs of
Bonsato vs. Court of Appeals, 50 Off. Gaz. (8), p. 3568).
The argument that there was no sufficient acceptance,
because the deed "merely recites that (1) the donee has duly
read all the contents of this donation; (2) that he 'shall fully
respect all its terms'; and (3) that 'for the act of benevolence'
he is expressing his gratitude" but there is no show of
acceptance (Appellant's brief, p. 7), is without basis. To
respect the terms of the donation, and at the same time
express gratitude for the donor's benevolence, constitutes
sufficient acceptance, If the donee did not accept, what had
he to be grateful about? We are no longer under the
formulary system of the Roman law, when specific
expressions had to be used under paid of nullity.
Also unmeritoriious is the contention that the donation is void
because the donor failed to reserve enough for ther own
support. As we have seen, she expressly reserved to herself
all the benefits derivable from the donated property as long
as she lived. During that time, she suffered no diminution of
income. If that was not enough to support her, the deficiency
was not dur to the donation.

Finally, the donee is not rightfully chargeaboe with
ingratitude, because it was expressly stipulated that the
donee had a total income of only P30 a month, out of which
he had to support himself, his wife and his two children.
Evidently his means did not allow him to add the donor's
support to his own burdens.
Wherefore, the decision appealed from is affirmed. No costs
in this instance, appellant having obtained leave to litigate as
a pauper. So ordered.
MAGLASANG v. CABATINGAN
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 131953
June 5, 2002
MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and

MERLY S. CABATINGAN, petitioners,
vs.
THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M.
BOQUIA, PERLA M. ABELLA, ESTRELLA M. CAETE,
LOURDES M. YUSON, and JULIA L. MAYOL, HEIRS OF
GENOVIVA C. NATIVIDAD namely, OSCAR C.
NATIVIDAD, OLGA NATIVIDAD, ODETTE NATIVIDAD,
OPHELIA NATIVIDAD, RICHARD NATIVIDAD, RAYMUND
NATIVIDAD, RICHIE NATIVIDAD, SONIA NATIVIDAD and
ENCARNACION CABATINGAN VDA. DE TRINIDAD,
ALFREDO CABATINGAN and JESUSA C. NAVADA,
respondents.
AUSTRIA-MARTINEZ, J.:
Posed for resolution before the Court in this petition for
review on certiorari filed under Rule 45 of the Rules of Court
is the sole issue of whether the donations made by the late
Conchita Cabatingan are donations inter vivos or mortis
causa.
The facts of the case are as follows:
On February 17, 1992, Conchita Cabatingan executed in
favor of her brother, petitioner Nicolas Cabatingan, a "Deed
of Conditional of Donation (sic) Inter Vivos for House and
Lot" covering one-half () portion of the former's house and
lot located at Cot-cot, Liloan, Cebu.1 Four (4) other deeds of
donation were subsequently executed by Conchita
Cabatingan on January 14, 1995, bestowing upon: (a)
petitioner Estela C. Maglasang, two (2) parcels of land - one
located in Cogon, Cebu (307 sq. m.) and the other, a portion
of a parcel of land in Masbate (50,232 sq. m.); (b) petitioner
Nicolas Cabatingan, a portion of a parcel of land located in
Masbate (80,000 sq. m.); and (c) petitioner Merly S.
Cabatingan, a portion of the Masbate property (80,000 sq.

m.).2 These deeds of donation contain similar provisions, to
wit:
"That for and in consideration of the love and affection of the
DONOR for the DONEE, x x x the DONOR does hereby, by
these presents, transfer, convey, by way of donation, unto
the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become
effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die
before the DONOR, the present donation shall be
deemed automatically rescinded and of no further force
and effect; x x x"3 (Emphasis Ours)
On May 9, 1995, Conchita Cabatingan died.
Upon learning of the existence of the foregoing donations,
respondents filed with the Regional Trial Court of Mandaue,
Branch 55, an action for Annulment And/Or Declaration of
Nullity of Deeds of Donations and Accounting, docketed as
Civil Case No. MAN-2599, seeking the annulment of said
four (4) deeds of donation executed on January 14, 1995.
Respondents allege, inter alia, that petitioners, through their
sinister machinations and strategies and taking advantage of
Conchita Cabatingan's fragile condition, caused the
execution of the deeds of donation, and, that the documents
are void for failing to comply with the provisions of the Civil
Code regarding formalities of wills and testaments,
considering that these are donations mortis causa.4
Respondents prayed that a receiver be appointed in order to
preserve the disputed properties, and, that they be declared
as co-owners of the properties in equal shares, together with
petitioner Nicolas Cabatingan.5
Petitioners in their Amended Answer, deny respondents'
allegations contending that Conchita Cabatingan freely,
knowingly and voluntarily caused the preparation of the
instruments.6
On respondents' motion, the court a quo rendered a partial
judgment on the pleadings on December 2, 1997 in favor of
respondents, with the following dispositive portion:
"WHEREREFORE, and in consideration of all the foregoing,
judgment is hereby rendered in favor of the plaintiffs and
against the defendant and unwilling co-plaintiff with regards
(sic) to the four Deeds of Donation Annexes "A", "A-1", "B"
and Annex "C" which is the subject of this partial decision by:
Declaring the four Deeds of Donation as null and void ab
initio for being a donation Mortis Causa and for failure to
comply with formal and solemn requisite under Art. 806 of
the New Civil Code;
b) To declare the plaintiffs and defendants as well as
unwilling co-plaintiff as the heirs of the deceased Conchita
Cabatingan and therefore hereditary co-owners of the
properties subject of this partial decision, as mandated under
Art. 777 of the New Civil Code;

SO ORDERED."7
The court a quo ruled that the donations are donations
mortis causa and therefore the four (4) deeds in question
executed on January 14, 1995 are null and void for failure to
comply with the requisites of Article 806 of the Civil Code on
solemnities of wills and testaments.8
Raising questions of law, petitioners elevated the court a
quo's decision to this Court,9 alleging that:
confirmed the donations as mortis causa in the following

Acceptance and Attestation clauses, uniformly found in the
subject deeds of donation, to wit:
"That the DONEE does hereby accept the foregoing
donation mortis causa under the terms and conditions set
forth therein, and avail herself of this occasion to express her
profound gratitude for the kindness and generosity of the
DONOR."
xxx
"THE LOWER COURT PALPABLY DISREGARDED THE

LONG-AND-WELL-ESTABLISHED RULINGS OF THIS
HONORABLE
SUPREME
COURT
ON
THE
CHARACTERIZATION OF DONATIONS AS INTER VIVOS
OR MORTIS CAUSA AND, INSTEAD, PROCEEDED TO
INTERPRET THE DONATIONS IN QUESTION IN A
MANNER CONTRARY THERETO."10
Petitioners insist that the donations are inter vivos donations
as these were made by the late Conchita Cabatingan "in
consideration of the love and affection of the donor" for the
donee, and there is nothing in the deeds which indicate that
the donations were made in consideration of Cabatingan's
death.11 In addition, petitioners contend that the stipulation
on rescission in case petitioners die ahead of Cabatingan is
a resolutory condition that confirms the nature of the
donation as inter vivos.
Petitioners' arguments are bereft of merit.
In a donation mortis causa, "the right of disposition is not
transferred to the donee while the donor is still alive."12 In
determining whether a donation is one of mortis causa, the
following characteristics must be taken into account:
(1) It conveys no title or ownership to the transferee before
the death of the transferor; or what amounts to the same
thing, that the transferor should retain the ownership (full or
naked) and control of the property while alive;
(2) That before his death, the transfer should be revocable
by the transferor at will, ad nutum; but revocability may be
provided for indirectly by means of a reserved power in the
donor to dispose of the properties conveyed;
and
(3) That the transfer should be void if the transferor should
survive the transferee.13
In the present case, the nature of the donations as mortis
causa is confirmed by the fact that the donations do not
contain any clear provision that intends to pass proprietary
rights to petitioners prior to Cabatingan's death. 14 The phrase
"to become effective upon the death of the DONOR" admits
of no other interpretation but that Cabatingan did not intend
to transfer the ownership of the properties to petitioners
during her lifetime. Petitioners themselves expressly
"SIGNED by the above-named DONOR and DONEE at the

foot of this Deed of Donation mortis causa, which consists of
two (2) pages x x x."15
That the donations were made "in consideration of the love
and affection of the donor" does not qualify the donations as
inter vivos because transfers mortis causa may also be
made for the same reason.16
Well in point is National Treasurer of the Phils. v. Vda. de
Meimban.17 In said case, the questioned donation contained
the provision:
"That for and in consideration of the love and affection which
the DONOR has for the DONEE, the said Donor by these
presents does hereby give, transfer, and convey unto the
DONEE, her heirs and assigns a portion of ONE HUNDRED
THOUSAND (100,000) SQUARE METERS, on the
southeastern part Pro-indiviso of the above described
property. (The portion herein donated is within Lot 2-B of the
proposed amendment Plan Subdivision of Lots Nos. 1 and 2,
Psu-109393), with all the buildings and improvements
thereon, to become effective upon the death of the DONOR.
(italics supplied.)"18
Notably, the foregoing provision is similar to that contained in
the donation executed by Cabatingan. We held in Meimban
case that the donation is a mortis causa donation, and that
the above quoted provision establishes the donor's intention
to transfer the ownership and possession of the donated
property to the donee only after the former's death. Further:
"As the donation is in the nature of a mortis causa
disposition, the formalities of a will should have been
complied with under Article 728 of the Civil Code, otherwise,
the donation is void and would produce no effect. As we
have held in Alejandro v. Geraldez (78 SCRA 245,253), "If
the donation is made in contemplation of the donor's death,
meaning that the full or naked ownership of the donated
properties will pass to the donee because of the donor's
death, then it is at that time that the donation takes effect,
and it is a donation mortis causa which should be embodied
in a last will and testament. (Citing Bonsato v. Court of
Appeals, 95 Phil. 481)."19
We apply the above rulings to the present case. The herein
subject deeds expressly provide that the donation shall be
rescinded in case petitioners predecease Conchita

Cabatingan. As stated in Reyes v. Mosqueda,20 one of the
decisive characteristics of a donation mortis causa is that the
transfer should be considered void if the donor should
survive the donee. This is exactly what Cabatingan provided
for in her donations. If she really intended that the donation
should take effect during her lifetime and that the ownership
of the properties donated be transferred to the donee or
independently of, and not by reason of her death, she would
have not expressed such proviso in the subject
deeds.1wphi1.nt
Considering that the disputed donations are donations mortis
causa, the same partake of the nature of testamentary
provisions21 and as such, said deeds must be executed in
accordance with the requisites on solemnities of wills and
testaments under Articles 805 and 806 of the Civil Code, to
wit:
"ART. 805. Every will, other than a holographic will, must be
subscribed at the end thereof by the testator himself or by
the testator's name written by some other person in his
presence, and by his express direction, and attested and
subscribed by three or more credible witnesses in the
presence of the testator and of one another.
The testator or the person requested by him to write his
name and the instrumental witnesses of the will, shall also
sign, as aforesaid, each and every page thereof, except the
last, on the left margin, and all the pages shall be numbered
correlatively in letters placed on the upper part of each page.
The attestation shall state the number of pages used upon
which the will is written , and the fact that the testator signed
the will and every page thereof, or caused some other
person to write his name, under his express direction, in the
presence of the instrumental witnesses, and that the latter
witnessed and signed the will and all the pages thereof in the
presence of the testator and of one another.
If the attestation clause is in a language not known to the
witnesses, it shall be interpreted to them. (n)
ART. 806. Every will must be acknowledged before a notary
public by the testator and the witnesses. The notary public
shall not be required to retain a copy of the will, or file
another with the office of the Clerk of Court. (n)"
The deeds in question although acknowledged before a
notary public of the donor and the donee, the documents
were not executed in the manner provided for under the
above-quoted provisions of law.
Thus, the trial court did not commit any reversible error in
declaring the subject deeds of donation null and void.
WHEREFORE, the petition is hereby DENIED for lack of
merit.
SO ORDERED.
GANUELAS v. CAWED
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 123968
April 24, 2003
URSULINA GANUELAS, METODIO GANUELAS and

ANTONIO GANUELAS, petitioners,
vs.
HON. ROBERT T. CAWED, Judge of the Regional Trial
Court of San Fernando, La Union (Branch 29),
LEOCADIA G. FLORES, FELICITACION G. AGTARAP,
CORAZON G. SIPALAY and ESTATE OF ROMANA
GANUELAS DE LA ROSA, represented by GREGORIO
DELA ROSA, Administrator, respondents.
CARPIO MORALES, J.:

The present petition for review under Rule 45 of the Rules of
Court assails, on a question of law, the February 22, 1996
decision 1 of the Regional Trial Court of San Fernando, La
Union, Branch 29, in Civil Case No. 3947, an action for
declaration of nullity of a deed of donation.
The facts, as culled from the records of the case, are as
follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin
(Celestina) executed a Deed of Donation of Real Property 2
covering seven parcels of land in favor of her niece Ursulina
Ganuelas (Ursulina), one of herein petitioners.
The pertinent provision of the deed of donation reads,
quoted verbatim:
xxx
xxx
xxx
That, for and in consideration of the love and affection which

the DONOR has for the DONEE, and of the faithful services
the latter has rendered in the past to the former, the said
DONOR does by these presents transfer and convey, by way
of DONATION, unto the DONEE the property above,
described, to become effective upon the death of the
DONOR; but in the event that the DONEE should die before
the DONOR, the present donation shall be deemed
rescinded and of no further force and effect.
xxx
xxx
xxx.3
On June 10, 1967, Celestina executed a document

denominated as Revocation of Donation4 purporting to set
aside the deed of donation. More than a month later or on

August 18, 1967, Celestina died without issue and any
surviving ascendants and siblings.
After Celestina's death, Ursulina had been sharing the
produce of the donated properties with private respondents
Leocadia G. Flores, et al., nieces of Celestina.
In 1982, or twenty-four years after the execution of the Deed
of Donation, Ursulina secured the corresponding tax
declarations, in her name, over the donated properties, to
wit: Tax Declarations Nos. 18108, 18109, 18110, 18111,
18112, 18113 and 18114, and since then, she refused to give
private respondents any share in the produce of the
properties despite repeated demands.
Private respondents were thus prompted to file on May 26,
1986 with the RTC of San Fernando, La Union a complaint 5
against Ursulina, along with Metodio Ganuelas and Antonio
Ganuelas who were alleged to be unwilling plaintiffs. The
complaint alleged that the Deed of Donation executed by
Celestina in favor of Ursulina was void for lack of
acknowledgment by the attesting witnesses thereto before
notary public Atty. Henry Valmonte, and the donation was a
disposition mortis causa which failed to comply with the
provisions of the Civil Code regarding formalities of wills and
testaments, hence, it was void. The plaintiffs-herein private
respondents thus prayed that judgment be rendered ordering
Ursulina to return to them as intestate heirs the possession
and ownership of the properties. They likewise prayed for the
cancellation of the tax declarations secured in the name of
Ursulina, the partition of the properties among the intestate
heirs of Celestina, and the rendering by Ursulina of an
accounting of all the fruits of the properties since 1982 and
for her to return or pay the value of their shares.
The defendants-herein petitioners alleged in their Answer 6
that the donation in favor of Ursulina was inter vivos as
contemplated under Article 729 of the Civil Code,7 hence, the
deed did not have to comply with the requirements for the
execution of a valid will; the Revocation of Donation is null
and void as the ground mentioned therein is not among
those provided by law to be the basis thereof; and at any
rate, the revocation could only be legally enforced upon filing
of the appropriate complaint in court within the prescriptive
period provided by law, which period had, at the time the
complaint was filed, already lapsed.
By Decision of February 22, 1996, the trial court, holding that
the provision in the Deed of Donation that in the event that
the DONEE should predecease the DONOR, the "donation
shall be deemed rescinded and of no further force and
effect" is an explicit indication that the deed is a donation
mortis causa,8 found for the plaintiffs-herein private
respondents, thus:
WHEREFORE the Court renders judgment declaring null
and void the Deed of Donation of Real Property executed by
Celestina Ganuelas, and orders the partition of the estate of
Celestina among the intestate heirs.
SO ORDERED.9
The trial court also held that the absence of a reservation
clause in the deed implied that Celestina retained complete
dominion over her properties, thus supporting the conclusion
that the donation is mortis causa,10 and that while the deed
contained an attestation clause and an acknowledgment
showing the intent of the donor to effect a postmortem
disposition, the acknowledgment was defective as only the
donor and donee appear to have acknowledged the deed
before the notary public, thereby rendering the entire
document void.11
Lastly, the trial court held that the subsequent execution by
Celestina of the Revocation of Donation showed that the
donor intended the revocability of the donation ad nutum,
thus sustaining its finding that the conveyance was mortis
causa.12
On herein petitioners' argument that the Revocation of
Donation was void as the ground mentioned therein is not
one of those allowed by law to be a basis for revocation, the
trial court held that the legal grounds for such revocation as
provided under the Civil Code arise only in cases of
donations inter vivos, but not in donations mortis causa
which are revocable at will during the lifetime of the donor.
The trial court held, in any event, that given the nullity of the
disposition mortis causa in view of a failure to comply with
the formalities required therefor, the Deed of Revocation was
a superfluity.13
Hence, the instant petition for review, petitioners contending
that the trial court erred:
I. . . . WHEN IT DECLARED NULL AND VOID THE
DONATION EXECUTED BY CELESTINA GANUELAS;
II. . . . WHEN IT UPHELD THE REVOCATION OF
DONATION;
III. . . . IN RENDERING ITS DECISION ADVERSE TO
PETITIONER URSULINA GANUELAS.14
Petitioners argue that the donation contained in the deed is
inter vivos as the main consideration for its execution was
the donor's affection for the donee rather than the donor's
death;15 that the provision on the effectivity of the donation
after the donor's death simply meant that absolute
ownership would pertain to the donee on the donor's death;16
and that since the donation is inter vivos, it may be revoked
only for the reasons provided in Articles 760,17 76418 and
76519 of the Civil Code.
In a letter of March 16, 1998,20 private respondent Corazon
Sipalay, reacting to this Court's January 28, 1998 Resolution
requiring private respondents "to SHOW CAUSE why they
should not be disciplinarily dealt with or held in contempt" for
failure to submit the name and address of their new counsel,
explains that they are no longer interested in pursuing the
case and are "willing and ready to waive whatever rights"

they have over the properties subject of the donation.
Petitioners, who were required to comment on the letter, by
Comment of October 28, 1998,21 welcome private
respondents' gesture but pray that "for the sake of enriching
jurisprudence, their [p]etition be given due course and
resolved."
The issue is thus whether the donation is inter vivos or
mortis causa.
Crucial in the resolution of the issue is the determination of
whether the donor intended to transfer the ownership over
the properties upon the execution of the deed.22
Donation inter vivos differs from donation mortis causa in
that in the former, the act is immediately operative even if the
actual execution may be deferred until the death of the
donor, while in the latter, nothing is conveyed to or acquired
by the donee until the death of the donor-testator.23 The
following ruling of this Court in Alejandro v. Geraldez is
illuminating:24
If the donation is made in contemplation of the donor's death,
meaning that the full or naked ownership of the donated
properties will pass to the donee only because of the donor's
death, then it is at that time that the donation takes effect,
and it is a donation mortis causa which should be embodied
in a last will and testament.
But if the donation takes effect during the donor's lifetime or
independently of the donor's death, meaning that the full or
naked ownership (nuda proprietas) of the donated properties
passes to the donee during the donor's lifetime, not by
reason of his death but because of the deed of donation,
then the donation is inter vivos.
The distinction between a transfer inter vivos and mortis
causa is important as the validity or revocation of the
donation depends upon its nature. If the donation is inter
vivos, it must be executed and accepted with the formalities
prescribed by Articles 74825 and 74926 of the Civil Code,
except when it is onerous in which case the rules on
contracts will apply. If it is mortis causa, the donation must be
in the form of a will, with all the formalities for the validity of
wills, otherwise it is void and cannot transfer ownership.27
The distinguishing characteristics of a donation mortis causa
are the following:
1. It conveys no title or ownership to the transferee before
the death of the transferor; or, what amounts to the same
thing, that the transferor should retain the ownership (full or
naked) and control of the property while alive;
2. That before his death, the transfer should be revocable by
the transferor at will, ad nutum; but revocability may be
provided for indirectly by means of a reserved power in the
donor to dispose of the properties conveyed;
3. That the transfer should be void if the transferor should

In the donation subject of the present case, there is nothing
therein which indicates that any right, title or interest in the
donated properties was to be transferred to Ursulina prior to
the death of Celestina.
The phrase "to become effective upon the death of the
DONOR" admits of no other interpretation but that Celestina
intended to transfer the ownership of the properties to
Ursulina on her death, not during her lifetime.29
More importantly, the provision in the deed stating that if the
donee should die before the donor, the donation shall be
deemed rescinded and of no further force and effect shows
that the donation is a postmortem disposition.
As stated in a long line of cases, one of the decisive
characteristics of a donation mortis causa is that the transfer
should be considered void if the donor should survive the
donee.30
More. The deed contains an attestation clause expressly
confirming the donation as mortis causa:
SIGNED by the above-named donor, Celestina Ganuelas, at
the foot of this deed of donation mortis causa, consisting of
two (2) pages and on the left margin of each and every page
thereof in the joint presence of all of us who at her request
and in her presence and that of each other have in like
manner subscribed our names as witnesses. 31 (Emphasis
supplied)
To classify the donation as inter vivos simply because it is
founded on considerations of love and affection is erroneous.
That the donation was prompted by the affection of the donor
for the donee and the services rendered by the latter is of no
particular significance in determining whether the deed
constitutes a transfer inter vivos or not, because a legacy
may have an identical motivation.32 In other words, love and
affection may also underline transfers mortis causa.33
In Maglasang v. Heirs of Cabatingan,34 the deeds of donation
contained provisions almost identical to those found in the
deed subject of the present case:
That for and in consideration of the love and affection of the
DONOR for the DONEE, x x x. the DONOR does hereby, by
these presents, transfer, convey, by way of donation, unto
the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become
effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die
before the DONOR, the present donation shall be deemed
automatically rescinded and of no further force and effect.
(Emphasis supplied)

In that case, this Court held that the donations were mortis
causa, for the above-quoted provision conclusively
establishes the donor's intention to transfer the ownership
and possession of the donated property to the donee only
after the former's death. Like in the present case, the deeds
therein did not contain any clear provision that purports to
pass proprietary rights to the donee prior to the donor's
death.
GONZALO VILLANUEVA, represented by his heirs,

Petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO,
Respondents.
DECISION
As the subject deed then is in the nature of a mortis causa

disposition, the formalities of a will under Article 728 of the
Civil Code should have been complied with, failing which the
donation is void and produces no effect.35
CARPIO, J.:
As noted by the trial court, the attesting witnesses failed to

acknowledge the deed before the notary public, thus
violating Article 806 of the Civil Code which provides:
This resolves the petition for review1 of the ruling2 of the

Court of Appeals dismissing a suit to recover a realty.
Art. 806. Every will must be acknowledged before a notary

public by the testator and the witnesses. The notary public
shall not be required to retain a copy of the will, or file
another with the office of the Clerk of Court. (Emphasis
supplied)
The trial court did not thus commit any reversible error in
declaring the Deed of Donation to be mortis causa.
WHEREFORE, the petition is hereby DENIED for lack of
merit.
SO ORDERED.
The Case
The Facts
Petitioner Gonzalo Villanueva (petitioner), here represented
by his heirs,3 sued respondents, spouses Froilan and Leonila
Branoco (respondents), in the Regional Trial Court of Naval,
Biliran (trial court) to recover a 3,492 square-meter parcel of
land in Amambajag, Culaba, Leyte (Property) and collect
damages. Petitioner claimed ownership over the Property
through purchase in July 1971 from Casimiro Vere (Vere),
who, in turn, bought the Property from Alvegia Rodrigo
(Rodrigo) in August 1970. Petitioner declared the Property in
his name for tax purposes soon after acquiring it.
In their Answer, respondents similarly claimed ownership
over the Property through purchase in July 1983 from
Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated
the Property in May 1965. The two-page deed of donation
(Deed), signed at the bottom by the parties and two
witnesses, reads in full.
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of
the late Juan Arcillas, a resident of Barrio Bool, municipality
of Culaba, subprovince of Biliran, Leyte del Norte,
Philippines, hereby depose and say:
VILLANUEVA v. SPS. BRANOCO

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 172804
January 24, 2011
That as we live[d] together as husband and wife with Juan

Arcillas, we begot children, namely: LUCIO, VICENTA,
SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS, and
by reason of poverty which I suffered while our children were
still young; and because my husband Juan Arcillas aware as
he was with our destitution separated us [sic] and left for
Cebu; and from then on never cared what happened to his
family; and because of that one EUFRACIA RODRIGUEZ,
one of my nieces who also suffered with our poverty,
obedient as she was to all the works in our house, and
because of the love and affection which I feel [for] her, I have
one parcel of land located at Sitio Amambajag, Culaba,
Leyte bearing Tax Decl. No. 1878 declared in the name of
Alvegia Rodrigo, I give (devise) said land in favor of
EUFRACIA RODRIGUEZ, her heirs, successors, and

assigns together with all the improvements existing thereon,
which parcel of land is more or less described and bounded
as follows:
1. Bounded North by Amambajag River; East, Benito Picao;
South, Teofilo Uyvico; and West, by Public land; 2. It has an
area of 3,492 square meters more or less; 3. It is planted to
coconuts now bearing fruits; 4. Having an assessed value of
P240.00; 5. It is now in the possession of EUFRACIA
RODRIGUEZ since May 21, 1962 in the concept of an
owner, but the Deed of Donation or that ownership be vested
on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land
above described, I already devise in favor of EUFRACIA
RODRIGUEZ since May 21, 1962, her heirs, assigns, and
that if the herein Donee predeceases me, the same land will
not be reverted to the Donor, but will be inherited by the heirs
of EUFRACIA RODRIGUEZ;
Rodrigos death but her "love and affection" for Rodriguez,

considering the services the latter rendered; (3) Rodrigo
waived dominion over the Property in case Rodriguez
predeceases her, implying its inclusion in Rodriguezs estate;
and (4) Rodriguez accepted the donation in the Deed itself,
an act necessary to effectuate donations inter vivos, not
devises.8 Accordingly, the CA upheld the sale between
Rodriguez and respondents, and, conversely found the sale
between Rodrigo and petitioners predecessor-in-interest,
Vere, void for Rodrigos lack of title.
In this petition, petitioner seeks the reinstatement of the trial
courts ruling. Alternatively, petitioner claims ownership over
the Property through acquisitive prescription, having
allegedly occupied it for more than 10 years.9
Respondents see no reversible error in the CAs ruling and
pray for its affirmance.
The Issue
That I EUFRACIA RODRIGUEZ, hereby accept the land

above described from Inay Alvegia Rodrigo and I am much
grateful to her and praying further for a longer life; however, I
will give one half (1/2) of the produce of the land to Apoy
Alve during her lifetime.4
Respondents entered the Property in 1983 and paid taxes
afterwards.
The Ruling of the Trial Court
The trial court ruled for petitioner, declared him owner of the
Property, and ordered respondents to surrender possession
to petitioner, and to pay damages, the value of the Propertys
produce since 1982 until petitioners repossession and the
costs.5 The trial court rejected respondents claim of
ownership after treating the Deed as a donation mortis
causa which Rodrigo effectively cancelled by selling the
Property to Vere in 1970.6 Thus, by the time Rodriguez sold
the Property to respondents in 1983, she had no title to
transfer.
Respondents appealed to the Court of Appeals (CA),
imputing error in the trial courts interpretation of the Deed as
a testamentary disposition instead of an inter vivos donation,
passing title to Rodriguez upon its execution.
Ruling of the Court of Appeals

The CA granted respondents appeal and set aside the trial
courts ruling. While conceding that the "language of the
[Deed is] x x x confusing and which could admit of possible
different interpretations,"7 the CA found the following factors
pivotal to its reading of the Deed as donation inter vivos: (1)
Rodriguez had been in possession of the Property as owner
since 21 May 1962, subject to the delivery of part of the
produce to Apoy Alve; (2) the Deeds consideration was not
The threshold question is whether petitioners title over the

Property is superior to respondents. The resolution of this
issue rests, in turn, on whether the contract between the
parties predecessors-in-interest, Rodrigo and Rodriguez,
was a donation or a devise. If the former, respondents hold
superior title, having bought the Property from Rodriguez. If
the latter, petitioner prevails, having obtained title from
Rodrigo under a deed of sale the execution of which
impliedly revoked the earlier devise to Rodriguez.
The Ruling of the Court
We find respondents title superior, and thus, affirm the CA.
Naked Title Passed from Rodrigo to Rodriguez Under a
Perfected Donation
We examine the juridical nature of the Deed whether it
passed title to Rodriguez upon its execution or is effective
only upon Rodrigos death using principles distilled from
relevant jurisprudence. Post-mortem dispositions typically
(1) Convey no title or ownership to the transferee before the
death of the transferor; or, what amounts to the same thing,
that the transferor should retain the ownership (full or naked)
and control of the property while alive;
(2) That before the [donors] death, the transfer should be
revocable by the transferor at will, ad nutum; but revocability
may be provided for indirectly by means of a reserved power
in the donor to dispose of the properties conveyed;
(3) That the transfer should be void if the transferor should
Further

[4] [T]he specification in a deed of the causes whereby the
act may be revoked by the donor indicates that the donation
is inter vivos, rather than a disposition mortis causa[;]
[5] That the designation of the donation as mortis causa, or a
provision in the deed to the effect that the donation is "to
take effect at the death of the donor" are not controlling
criteria; such statements are to be construed together with
the rest of the instrument, in order to give effect to the real
intent of the transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed
donation inter vivos rather than mortis causa, in order to
avoid uncertainty as to the ownership of the property subject
of the deed.11
It is immediately apparent that Rodrigo passed naked title to
Rodriguez under a perfected donation inter vivos. First.
Rodrigo stipulated that "if the herein Donee predeceases me,
the [Property] will not be reverted to the Donor, but will be
inherited by the heirs of x x x Rodriguez," signaling the
irrevocability of the passage of title to Rodriguezs estate,
waiving Rodrigos right to reclaim title. This transfer of title
was perfected the moment Rodrigo learned of Rodriguezs
acceptance of the disposition12 which, being reflected in the
Deed, took place on the day of its execution on 3 May 1965.
Rodrigos acceptance of the transfer underscores its
essence as a gift in presenti, not in futuro, as only donations
inter vivos need acceptance by the recipient.13 Indeed, had
Rodrigo wished to retain full title over the Property, she could
have easily stipulated, as the testator did in another case,
that "the donor, may transfer, sell, or encumber to any
person or entity the properties here donated x x x" 14 or used
words to that effect. Instead, Rodrigo expressly waived title
over the Property in case Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulations damning
effect on his case, petitioner tries to profit from it, contending
it is a fideicommissary substitution clause. 15 Petitioner
assumes the fact he is laboring to prove. The question of the
Deeds juridical nature, whether it is a will or a donation, is
the crux of the present controversy. By treating the clause in
question as mandating fideicommissary substitution, a mode
of testamentary disposition by which the first heir instituted is
entrusted with the obligation to preserve and to transmit to a
second heir the whole or part of the inheritance,16 petitioner
assumes that the Deed is a will. Neither the Deeds text nor
the import of the contested clause supports petitioners
theory.
Second. What Rodrigo reserved for herself was only the
beneficial title to the Property, evident from Rodriguezs
undertaking to "give one [half] x x x of the produce of the
land to Apoy Alve during her lifetime." 17 Thus, the Deeds
stipulation that "the ownership shall be vested on [Rodriguez]
upon my demise," taking into account the non-reversion
clause, could only refer to Rodrigos beneficial title. We
arrived at the same conclusion in Balaqui v. Dongso18 where,
as here, the donor, while "b[inding] herself to answer to the
[donor] and her heirs x x x that none shall question or disturb
[the donees] right," also stipulated that the donation "does

not pass title to [the donee] during my lifetime; but when I
die, [the donee] shall be the true owner" of the donated
parcels of land. In finding the disposition as a gift inter vivos,
the Court reasoned:
Taking the deed x x x as a whole, x x x x it is noted that in the
same deed [the donor] guaranteed to [the donee] and her
heirs and successors, the right to said property thus
conferred. From the moment [the donor] guaranteed the right
granted by her to [the donee] to the two parcels of land by
virtue of the deed of gift, she surrendered such right;
otherwise there would be no need to guarantee said right.
Therefore, when [the donor] used the words upon which the
appellants base their contention that the gift in question is a
donation mortis causa [that the gift "does not pass title during
my lifetime; but when I die, she shall be the true owner of the
two aforementioned parcels"] the donor meant nothing
else than that she reserved of herself the possession
and usufruct of said two parcels of land until her death,
at which time the donee would be able to dispose of
them freely.19 (Emphasis supplied)
Indeed, if Rodrigo still retained full ownership over the
Property, it was unnecessary for her to reserve partial
usufructuary right over it.20
Third. The existence of consideration other than the donors
death, such as the donors love and affection to the donee
and the services the latter rendered, while also true of
devises,
nevertheless
"corroborates
the
express
irrevocability of x x x [inter vivos] transfers."21 Thus, the CA
committed no error in giving weight to Rodrigos statement of
"love and affection" for Rodriguez, her niece, as
consideration for the gift, to underscore its finding.
It will not do, therefore, for petitioner to cherry-pick
stipulations from the Deed tending to serve his cause (e.g.
"the ownership shall be vested on [Rodriguez] upon my
demise" and "devise"). Dispositions bearing contradictory
stipulations are interpreted wholistically, to give effect to the
donors intent. In no less than seven cases featuring deeds
of donations styled as "mortis causa" dispositions, the Court,
after going over the deeds, eventually considered the
transfers inter vivos,22 consistent with the principle that "the
designation of the donation as mortis causa, or a provision in
the deed to the effect that the donation is to take effect at
the death of the donor are not controlling criteria [but] x x x
are to be construed together with the rest of the instrument,
in order to give effect to the real intent of the transferor." 23
Indeed, doubts on the nature of dispositions are resolved to
favor inter vivos transfers "to avoid uncertainty as to the
ownership of the property subject of the deed."24
Nor can petitioner capitalize on Rodrigos post-donation
transfer of the Property to Vere as proof of her retention of
ownership. If such were the barometer in interpreting deeds
of donation, not only will great legal uncertainty be visited on
gratuitous dispositions, this will give license to rogue
property owners to set at naught perfected transfers of titles,

which, while founded on liberality, is a valid mode of passing
ownership. The interest of settled property dispositions
counsels against licensing such practice.25
Accordingly, having irrevocably transferred naked title over
the Property to Rodriguez in 1965, Rodrigo "cannot
afterwards revoke the donation nor dispose of the said
property in favor of another."26 Thus, Rodrigos post-donation
sale of the Property vested no title to Vere. As Veres
successor-in-interest, petitioner acquired no better right than
him. On the other hand, respondents bought the Property
from Rodriguez, thus acquiring the latters title which they
may invoke against all adverse claimants, including
petitioner.
Petitioner Acquired No Title Over the Property
Alternatively, petitioner grounds his claim of ownership over
the Property through his and Veres combined possession of
the Property for more than ten years, counted from Veres
purchase of the Property from Rodrigo in 1970 until
petitioner initiated his suit in the trial court in February
1986.27 Petitioner anchors his contention on an unfounded
legal assumption. The ten year ordinary prescriptive period
to acquire title through possession of real property in the
concept of an owner requires uninterrupted possession
coupled with just title and good faith.28 There is just title when
the adverse claimant came into possession of the property
through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor
was not the owner or could not transmit any right. 29 Good
faith, on the other hand, consists in the reasonable belief that
the person from whom the possessor received the thing was
the owner thereof, and could transmit his ownership.30
Although Vere and petitioner arguably had just title having
successively acquired the Property through sale, neither was
a good faith possessor. As Rodrigo herself disclosed in the
Deed, Rodriguez already occupied and possessed the
Property "in the concept of an owner" ("como tag-iya"31)
since 21 May 1962, nearly three years before Rodrigos
donation in 3 May 1965 and seven years before Vere bought
the Property from Rodrigo. This admission against interest
binds Rodrigo and all those tracing title to the Property
through her, including Vere and petitioner. Indeed,
petitioners insistent claim that Rodriguez occupied the
Property only in 1982, when she started paying taxes, finds
no basis in the records. In short, when Vere bought the
Property from Rodrigo in 1970, Rodriguez was in possession
of the Property, a fact that prevented Vere from being a
buyer in good faith.
Lacking good faith possession, petitioners only other
recourse to maintain his claim of ownership by prescription is
to show open, continuous and adverse possession of the
Property for 30 years.32 Undeniably, petitioner is unable to
meet this requirement.1avvphil
Ancillary Matters Petitioner Raises Irrelevant
Petitioner brings to the Courts attention facts which,

according to him, support his theory that Rodrigo never
passed ownership over the Property to Rodriguez, namely,
that Rodriguez registered the Deed and paid taxes on the
Property only in 1982 and Rodriguez obtained from Vere in
1981 a waiver of the latters "right of ownership" over the
Property. None of these facts detract from our conclusion
that under the text of the Deed and based on the
contemporaneous acts of Rodrigo and Rodriguez, the latter,
already in possession of the Property since 1962 as Rodrigo
admitted, obtained naked title over it upon the Deeds
execution in 1965. Neither registration nor tax payment is
required to perfect donations. On the relevance of the waiver
agreement, suffice it to say that Vere had nothing to waive to
Rodriguez, having obtained no title from Rodrigo.
Irrespective of Rodriguezs motivation in obtaining the
waiver, that document, legally a scrap of paper, added
nothing to the title Rodriguez obtained from Rodrigo under
the Deed.
WHEREFORE, we DENY the petition. We AFFIRM the
Decision dated 6 June 2005 and the Resolution dated 5 May
2006 of the Court of Appeals.
SO ORDERED.
ARTICLE 774
CORONEL v. CA
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 103577 October 7, 1996
ROMULO A. CORONEL, ALARICO A. CORONEL,
ANNETTE A. CORONEL, ANNABELLE C. GONZALES (for
herself and on behalf of Florida C. Tupper, as attorneyin-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE,
and CATALINA BALAIS MABANAG, petitioners,
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ,
and RAMONA PATRICIA ALCARAZ, assisted by GLORIA
F. NOEL as attorney-in-fact, respondents.
1. Ramona will make a down payment of Fifty Thousand

(P50,000.00) Pesos upon execution of the document
aforestated;
2. The Coronels will cause the transfer in their names of the
title of the property registered in the name of their deceased
father upon receipt of the Fifty Thousand (P50,000.00)
Pesos down payment;
3. Upon the transfer in their names of the subject property,
the Coronels will execute the deed of absolute sale in favor
of Ramona and the latter will pay the former the whole
balance of One Million One Hundred Ninety Thousand
(P1,190,000.00) Pesos.
MELO, J.:p
The petition before us has its roots in a complaint for specific
performance to compel herein petitioners (except the last
named, Catalina Balais Mabanag) to consummate the sale
of a parcel of land with its improvements located along
Roosevelt Avenue in Quezon City entered into by the parties
sometime in January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by
respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo
Coronel, et al. (hereinafter referred to as Coronels) executed
a document entitled "Receipt of Down Payment" (Exh. "A") in
favor of plaintiff Ramona Patricia Alcaraz (hereinafter
referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 Total amount
50,000 Down payment
P1,190,000.00 Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog,
Quezon City, the sum of Fifty Thousand Pesos purchase
price of our inherited house and lot, covered by TCT No.
119627 of the Registry of Deeds of Quezon City, in the total
amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from
our deceased father, Constancio P. Coronel, the transfer
certificate of title immediately upon receipt of the down
payment above-stated.
On our presentation of the TCT already in or name, We will
immediately execute the deed of absolute sale of said
property and Miss Ramona Patricia Alcaraz shall
immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the
following:
On the same date (January 15, 1985), plaintiff-appellee

Concepcion D. Alcaraz (hereinafter referred to as
Concepcion), mother of Ramona, paid the down payment of
Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh. "2").
On February 6, 1985, the property originally registered in the
name of the Coronels' father was transferred in their names
under
TCT
No. 327043 (Exh. "D"; Exh. "4")
On February 18, 1985, the Coronels sold the property
covered by TCT No. 327043 to intervenor-appellant Catalina
B. Mabanag (hereinafter referred to as Catalina) for One
Million Five Hundred Eighty Thousand (P1,580,000.00)
Pesos after the latter has paid Three Hundred Thousand
(P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-C")
For this reason, Coronels canceled and rescinded the
contract (Exh. "A") with Ramona by depositing the down
payment paid by Concepcion in the bank in trust for Ramona
Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint
for specific performance against the Coronels and caused
the annotation of a notice of lis pendens at the back of TCT
No. 327403 (Exh. "E"; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice
of adverse claim covering the same property with the
Registry of Deeds of Quezon City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute
Sale over the subject property in favor of Catalina (Exh. "G";
Exh. "7").
On June 5, 1985, a new title over the subject property was
issued in the name of Catalina under TCT No. 351582 (Exh.
"H"; Exh. "8").
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court
(Branch 83, RTC, Quezon City) the parties agreed to submit
the case for decision solely on the basis of documentary

exhibits. Thus, plaintiffs therein (now private respondents)
proffered their documentary evidence accordingly marked as
Exhibits "A" through "J", inclusive of their corresponding
submarkings. Adopting these same exhibits as their own,
then defendants (now petitioners) accordingly offered and
marked them as Exhibits "1" through "10", likewise inclusive
of their corresponding submarkings. Upon motion of the
parties, the trial court gave them thirty (30) days within which
to simultaneously submit their respective memoranda, and
an additional 15 days within which to submit their
corresponding comment or reply thereof, after which, the
case would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution
before Judge Reynaldo Roura, who was then temporarily
detailed to preside over Branch 82 of the RTC of Quezon
City. On March 1, 1989, judgment was handed down by
Judge Roura from his regular bench at Macabebe,
Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby
rendered ordering defendant to execute in favor of plaintiffs a
deed of absolute sale covering that parcel of land embraced
in and covered by Transfer Certificate of Title No. 327403
(now TCT No. 331582) of the Registry of Deeds for Quezon
City, together with all the improvements existing thereon free
from all liens and encumbrances, and once accomplished, to
immediately deliver the said document of sale to plaintiffs
and upon receipt thereof, the said document of sale to
plaintiffs and upon receipt thereof, the plaintiffs are ordered
to pay defendants the whole balance of the purchase price
amounting to P1,190,000.00 in cash. Transfer Certificate of
Title No. 331582 of the Registry of Deeds for Quezon City in
the name of intervenor is hereby canceled and declared to
be without force and effect. Defendants and intervenor and
all other persons claiming under them are hereby ordered to
vacate the subject property and deliver possession thereof to
plaintiffs. Plaintiffs' claim for damages and attorney's fees, as
well as the counterclaims of defendants and intervenors are
hereby dismissed.
The fact that they were allowed to file memoranda at some

future date did not change the fact that the hearing of the
case was terminated before Judge Roura and therefore the
same should be submitted to him for decision; (2) When the
defendants and intervenor did not object to the authority of
Judge Reynaldo Roura to decide the case prior to the
rendition of the decision, when they met for the first time
before the undersigned Presiding Judge at the hearing of a
pending incident in Civil Case No. Q-46145 on November 11,
1988, they were deemed to have acquiesced thereto and
they are now estopped from questioning said authority of
Judge Roura after they received the decision in question
which happens to be adverse to them; (3) While it is true that
Judge Reynaldo Roura was merely a Judge-on-detail at this
Branch of the Court, he was in all respects the Presiding
Judge with full authority to act on any pending incident
submitted before this Court during his incumbency. When he
returned to his Official Station at Macabebe, Pampanga, he
did not lose his authority to decide or resolve such cases
submitted to him for decision or resolution because he
continued as Judge of the Regional Trial Court and is of coequal rank with the undersigned Presiding Judge. The
standing rule and supported by jurisprudence is that a Judge
to whom a case is submitted for decision has the authority to
decide the case notwithstanding his transfer to another
branch or region of the same court (Sec. 9, Rule 135, Rule of
Court).
Coming now to the twin prayer for reconsideration of the
Decision dated March 1, 1989 rendered in the instant case,
resolution of which now pertains to the undersigned
Presiding Judge, after a meticulous examination of the
documentary evidence presented by the parties, she is
convinced that the Decision of March 1, 1989 is supported
by evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for
Reconsideration and/or to Annul Decision and Render Anew
Decision by the Incumbent Presiding Judge" dated March
20, 1989 is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.
So Ordered.
Quezon City, Philippines, July 12, 1989.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, pp. 108-109)
(Rollo, p. 106)
Petitioners thereupon interposed an appeal, but on

December 16, 1991, the Court of Appeals (Buena, GonzagaReyes, Abad Santos (P), JJ.) rendered its decision fully
agreeing with the trial court.
A motion for reconsideration was filed by petitioner before

the new presiding judge of the Quezon City RTC but the
same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the
decision and to render anew decision by the undersigned
Presiding Judge should be denied for the following reasons:
(1) The instant case became submitted for decision as of
April 14, 1988 when the parties terminated the presentation
of their respective documentary evidence and when the
Presiding Judge at that time was Judge Reynaldo Roura.
Hence, the instant petition which was filed on March 5, 1992.

The last pleading, private respondents' Reply Memorandum,
was filed on September 15, 1993. The case was, however,
re-raffled to undersigned ponente only on August 28, 1996,
due to the voluntary inhibition of the Justice to whom the
case was last assigned.

While we deem it necessary to introduce certain refinements
in the disquisition of respondent court in the affirmance of the
trial court's decision, we definitely find the instant petition
bereft of merit.
The heart of the controversy which is the ultimate key in the
resolution of the other issues in the case at bar is the precise
determination of the legal significance of the document
entitled "Receipt of Down Payment" which was offered in
evidence by both parties. There is no dispute as to the fact
that said document embodied the binding contract between
Ramona Patricia Alcaraz on the one hand, and the heirs of
Constancio P. Coronel on the other, pertaining to a particular
house and lot covered by TCT No. 119627, as defined in
Article 1305 of the Civil Code of the Philippines which reads
as follows:
Art. 1305. A contract is a meeting of minds between two
persons whereby one binds himself, with respect to the
other, to give something or to render some service.
While, it is the position of private respondents that the
"Receipt of Down Payment" embodied a perfected contract
of sale, which perforce, they seek to enforce by means of an
action for specific performance, petitioners on their part insist
that what the document signified was a mere executory
contract to sell, subject to certain suspensive conditions, and
because of the absence of Ramona P. Alcaraz, who left for
the United States of America, said contract could not
possibly ripen into a contract absolute sale.
Plainly, such variance in the contending parties' contentions
is brought about by the way each interprets the terms and/or
conditions set forth in said private instrument. Withal, based
on whatever relevant and admissible evidence may be
available on record, this, Court, as were the courts below, is
now called upon to adjudge what the real intent of the parties
was at the time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefor a
price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because it
is perfected by mere consent. The essential elements of a
contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be
considered as a Contract of Sale because the first essential
element is lacking. In a contract to sell, the prospective seller

explicity reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree
or consent to transfer ownership of the property subject of
the contract to sell until the happening of an event, which for
present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to
do is to fulfill is promise to sell the subject property when the
entire amount of the purchase price is delivered to him. In
other words the full payment of the purchase price partakes
of a suspensive condition, the non-fulfillment of which
prevents the obligation to sell from arising and thus,
ownership is retained by the prospective seller without
further remedies by the prospective buyer. In Roque vs.
Lapuz (96 SCRA 741 [1980]), this Court had occasion to
rule:
Hence, We hold that the contract between the petitioner and
the respondent was a contract to sell where the ownership or
title is retained by the seller and is not to pass until the full
payment of the price, such payment being a positive
suspensive condition and failure of which is not a breach,
casual or serious, but simply an event that prevented the
obligation of the vendor to convey title from acquiring binding
force.
Stated positively, upon the fulfillment of the suspensive
condition which is the full payment of the purchase price, the
prospective seller's obligation to sell the subject property by
entering into a contract of sale with the prospective buyer
becomes demandable as provided in Article 1479 of the Civil
Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding upon the
promissor if the promise is supported by a consideration
distinct from the price.
A contract to sell may thus be defined as a bilateral contract
whereby the prospective seller, while expressly reserving the
ownership of the subject property despite delivery thereof to
the prospective buyer, binds himself to sell the said property
exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, that is, full payment of the purchase
price.
A contract to sell as defined hereinabove, may not even be
considered as a conditional contract of sale where the seller
may likewise reserve title to the property subject of the sale
until the fulfillment of a suspensive condition, because in a
conditional contract of sale, the first element of consent is
present, although it is conditioned upon the happening of a
contingent event which may or may not occur. If the
suspensive condition is not fulfilled, the perfection of the
contract of sale is completely abated (cf. Homesite and
housing Corp. vs. Court of Appeals, 133 SCRA 777 [1984]).
However, if the suspensive condition is fulfilled, the contract

of sale is thereby perfected, such that if there had already
been previous delivery of the property subject of the sale to
the buyer, ownership thereto automatically transfers to the
buyer by operation of law without any further act having to be
performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive
condition which is the full payment of the purchase price,
ownership will not automatically transfer to the buyer
although the property may have been previously delivered to
him. The prospective seller still has to convey title to the
prospective buyer by entering into a contract of absolute
sale.
It is essential to distinguish between a contract to sell and a
conditional contract of sale specially in cases where the
subject property is sold by the owner not to the party the
seller contracted with, but to a third person, as in the case at
bench. In a contract to sell, there being no previous sale of
the property, a third person buying such property despite the
fulfillment of the suspensive condition such as the full
payment of the purchase price, for instance, cannot be
deemed a buyer in bad faith and the prospective buyer
cannot seek the relief of reconveyance of the property. There
is no double sale in such case. Title to the property will
transfer to the buyer after registration because there is no
defect in the owner-seller's title per se, but the latter, of
course, may be used for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment
of the suspensive condition, the sale becomes absolute and
this will definitely affect the seller's title thereto. In fact, if
there had been previous delivery of the subject property, the
seller's ownership or title to the property is automatically
transferred to the buyer such that, the seller will no longer
have any title to transfer to any third person. Applying Article
1544 of the Civil Code, such second buyer of the property
who may have had actual or constructive knowledge of such
defect in the seller's title, or at least was charged with the
obligation to discover such defect, cannot be a registrant in
good faith. Such second buyer cannot defeat the first buyer's
title. In case a title is issued to the second buyer, the first
buyer may seek reconveyance of the property subject of the
sale.
With the above postulates as guidelines, we now proceed to
the task of deciphering the real nature of the contract
entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words
used therein should be given their natural and ordinary
meaning unless a technical meaning was intended (Tan vs.
Court of Appeals, 212 SCRA 586 [1992]). Thus, when
petitioners declared in the said "Receipt of Down Payment"
that they
Received from Miss Ramona Patricia Alcaraz of 146 Timog,
Quezon City, the sum of Fifty Thousand Pesos purchase
price of our inherited house and lot, covered by TCT No.
1199627 of the Registry of Deeds of Quezon City, in the total

amount of P1,240,000.00.
without any reservation of title until full payment of the entire
purchase price, the natural and ordinary idea conveyed is
that they sold their property.
When the "Receipt of Down Payment" is considered in its
entirety, it becomes more manifest that there was a clear
intent on the part of petitioners to transfer title to the buyer,
but since the transfer certificate of title was still in the name
of petitioner's father, they could not fully effect such transfer
although the buyer was then willing and able to immediately
pay the purchase price. Therefore, petitioners-sellers
undertook upon receipt of the down payment from private
respondent Ramona P. Alcaraz, to cause the issuance of a
new certificate of title in their names from that of their father,
after which, they promised to present said title, now in their
names, to the latter and to execute the deed of absolute sale
whereupon, the latter shall, in turn, pay the entire balance of
the purchase price.
The agreement could not have been a contract to sell
because the sellers herein made no express reservation of
ownership or title to the subject parcel of land. Furthermore,
the circumstance which prevented the parties from entering
into an absolute contract of sale pertained to the sellers
themselves (the certificate of title was not in their names)
and not the full payment of the purchase price. Under the
established facts and circumstances of the case, the Court
may safely presume that, had the certificate of title been in
the names of petitioners-sellers at that time, there would
have been no reason why an absolute contract of sale could
not have been executed and consummated right there and
then.
Moreover, unlike in a contract to sell, petitioners in the case
at bar did not merely promise to sell the properly to private
respondent upon the fulfillment of the suspensive condition.
On the contrary, having already agreed to sell the subject
property, they undertook to have the certificate of title
changed to their names and immediately thereafter, to
execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell
where the sellers, after compliance by the buyer with certain
terms and conditions, promised to sell the property to the
latter. What may be perceived from the respective
undertakings of the parties to the contract is that petitioners
had already agreed to sell the house and lot they inherited
from their father, completely willing to transfer full ownership
of the subject house and lot to the buyer if the documents
were then in order. It just happened, however, that the
transfer certificate of title was then still in the name of their
father. It was more expedient to first effect the change in the
certificate of title so as to bear their names. That is why they
undertook to cause the issuance of a new transfer of the
certificate of title in their names upon receipt of the down

payment in the amount of P50,000.00. As soon as the new
certificate of title is issued in their names, petitioners were
committed to immediately execute the deed of absolute sale.
Only then will the obligation of the buyer to pay the
remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is
most commonly entered into so as to protect the seller
against a buyer who intends to buy the property in
installment by withholding ownership over the property until
the buyer effects full payment therefor, in the contract
entered into in the case at bar, the sellers were the one who
were unable to enter into a contract of absolute sale by
reason of the fact that the certificate of title to the property
was still in the name of their father. It was the sellers in this
case who, as it were, had the impediment which prevented,
so to speak, the execution of an contract of absolute sale.
What is clearly established by the plain language of the
subject document is that when the said "Receipt of Down
Payment" was prepared and signed by petitioners Romeo A.
Coronel, et al., the parties had agreed to a conditional
contract of sale, consummation of which is subject only to
the successful transfer of the certificate of title from the name
of petitioners' father, Constancio P. Coronel, to their names.
The Court significantly notes this suspensive condition was,
in fact, fulfilled on February 6, 1985 (Exh. "D"; Exh. "4").
Thus, on said date, the conditional contract of sale between
petitioners and private respondent Ramona P. Alcaraz
became obligatory, the only act required for the
consummation thereof being the delivery of the property by
means of the execution of the deed of absolute sale in a
public instrument, which petitioners unequivocally committed
themselves to do as evidenced by the "Receipt of Down
Payment."
Article 1475, in correlation with Article 1181, both of the Civil
Code, plainly applies to the case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment
there is a meeting of minds upon the thing which is the
object of the contract and upon the price.
From the moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing
the form of contracts.
Art. 1181. In conditional obligations, the acquisition of rights,
as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event
which constitutes the condition.
Since the condition contemplated by the parties which is the
issuance of a certificate of title in petitioners' names was
fulfilled on February 6, 1985, the respective obligations of the
parties under the contract of sale became mutually
demandable, that is, petitioners, as sellers, were obliged to
present the transfer certificate of title already in their names
to private respondent Ramona P. Alcaraz, the buyer, and to
immediately execute the deed of absolute sale, while the

buyer on her part, was obliged to forthwith pay the balance
of the purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in page
9 of their petition, petitioners conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves "to
effect the transfer in our names from our deceased father
Constancio P. Coronel, the transfer certificate of title
immediately upon receipt of the downpayment abovestated". The sale was still subject to this suspensive
condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a
contract of sale subject to a suspensive condition. Only, they
contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of
first transferring the title to the property under their names,
there could be no perfected contract of sale. (Emphasis
supplied.)
(Ibid.)
not aware that they set their own trap for themselves, for
Article 1186 of the Civil Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is
more controlling than these mere hypothetical arguments is
the fact that the condition herein referred to was actually and
indisputably fulfilled on February 6, 1985, when a new title
was issued in the names of petitioners as evidenced by TCT
No. 327403 (Exh. "D"; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as
evidenced by the document denominated as "Receipt of
Down Payment" (Exh. "A"; Exh. "1"), the parties entered into
a contract of sale subject only to the suspensive condition
that the sellers shall effect the issuance of new certificate title
from that of their father's name to their names and that, on
February 6, 1985, this condition was fulfilled (Exh. "D"; Exh.
"4").
We, therefore, hold that, in accordance with Article 1187
which pertinently provides
Art. 1187. The effects of conditional obligation to give, once
the condition has been fulfilled, shall retroact to the day of
the constitution of the obligation . . .
In obligation to do or not to do, the courts shall determine, in
each case, the retroactive effect of the condition that has
been complied with.

the rights and obligations of the parties with respect to the
perfected contract of sale became mutually due and
demandable as of the time of fulfillment or occurrence of the
suspensive condition on February 6, 1985. As of that point in
time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected
contract on January 19, 1985 because they were then not
yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode
of transferring ownership as follows:
Art. 774. Succession is a mode of acquisition by virtue of
which the property, rights and obligations to be extent and
value of the inheritance of a person are transmitted through
his death to another or others by his will or by operation of
law.
Petitioners-sellers in the case at bar being the sons and
daughters of the decedent Constancio P. Coronel are
compulsory heirs who were called to succession by
operation of law. Thus, at the point their father drew his last
breath, petitioners stepped into his shoes insofar as the
subject property is concerned, such that any rights or
obligations pertaining thereto became binding and
enforceable upon them. It is expressly provided that rights to
the succession are transmitted from the moment of death of
the decedent (Article 777, Civil Code; Cuison vs. Villanueva,
90 Phil. 850 [1952]).
Be it also noted that petitioners' claim that succession may
not be declared unless the creditors have been paid is
rendered moot by the fact that they were able to effect the
transfer of the title to the property from the decedent's name
to their names on February 6, 1985.
Aside from this, petitioners are precluded from raising their
supposed lack of capacity to enter into an agreement at that
time and they cannot be allowed to now take a posture
contrary to that which they took when they entered into the
agreement with private respondent Ramona P. Alcaraz. The
Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation
is rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person relying
thereon.
Having represented themselves as the true owners of the
subject property at the time of sale, petitioners cannot claim
now that they were not yet the absolute owners thereof at
that time.
Petitioners also contend that although there was in fact a
perfected contract of sale between them and Ramona P.
Alcaraz, the latter breached her reciprocal obligation when
she rendered impossible the consummation thereof by going

to the United States of America, without leaving her address,
telephone number, and Special Power of Attorney
(Paragraphs 14 and 15, Answer with Compulsory
Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43),
for which reason, so petitioners conclude, they were correct
in unilaterally rescinding rescinding the contract of sale.
We do not agree with petitioners that there was a valid
rescission of the contract of sale in the instant case. We note
that these supposed grounds for petitioners' rescission, are
mere allegations found only in their responsive pleadings,
which by express provision of the rules, are deemed
controverted even if no reply is filed by the plaintiffs (Sec. 11,
Rule 6, Revised Rules of Court). The records are absolutely
bereft of any supporting evidence to substantiate petitioners'
allegations. We have stressed time and again that
allegations must be proven by sufficient evidence (Ng Cho
Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan,
2 SCRA 598 [1961]. Mere allegation is not an evidence
(Lagasca vs. De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the
United States of America on February 6, 1985, we cannot
justify petitioner-sellers' act of unilaterally and extradicially
rescinding the contract of sale, there being no express
stipulation authorizing the sellers to extarjudicially rescind
the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375
[1988]; Taguba vs. Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged
absence of Ramona P. Alcaraz because although the
evidence on record shows that the sale was in the name of
Ramona P. Alcaraz as the buyer, the sellers had been
dealing with Concepcion D. Alcaraz, Ramona's mother, who
had acted for and in behalf of her daughter, if not also in her
own behalf. Indeed, the down payment was made by
Concepcion D. Alcaraz with her own personal check (Exh.
"B"; Exh. "2") for and in behalf of Ramona P. Alcaraz. There
is no evidence showing that petitioners ever questioned
Concepcion's authority to represent Ramona P. Alcaraz
when they accepted her personal check. Neither did they
raise any objection as regards payment being effected by a
third person. Accordingly, as far as petitioners are
concerned, the physical absence of Ramona P. Alcaraz is not
a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be
in default, insofar as her obligation to pay the full purchase
price is concerned. Petitioners who are precluded from
setting up the defense of the physical absence of Ramona P.
Alcaraz as above-explained offered no proof whatsoever to
show that they actually presented the new transfer certificate
of title in their names and signified their willingness and
readiness to execute the deed of absolute sale in
accordance with their agreement. Ramona's corresponding
obligation to pay the balance of the purchase price in the
amount of P1,190,000.00 (as buyer) never became due and
demandable and, therefore, she cannot be deemed to have
been in default.

Article 1169 of the Civil Code defines when a party in a
contract involving reciprocal obligations may be considered
in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur
in delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation.
xxx xxx xxx
In reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him. From the moment
one of the parties fulfill his obligation, delay by the other
begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the
contract of sale between petitioners and respondents.
With the foregoing conclusions, the sale to the other
petitioner, Catalina B. Mabanag, gave rise to a case of
double sale where Article 1544 of the Civil Code will apply, to
wit:
Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good
faith, if it should be movable property.
Should if be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it in
Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and,
in the absence thereof to the person who presents the oldest
title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale
dated April 25, 1985 as proof of the second contract of sale
was registered with the Registry of Deeds of Quezon City
giving rise to the issuance of a new certificate of title in the
name of Catalina B. Mabanag on June 5, 1985. Thus, the
second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or
ownership to pass to the first buyer, the exceptions being: (a)
when the second buyer, in good faith, registers the sale
ahead of the first buyer, and (b) should there be no
inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property
ahead of the first buyer. Unless, the second buyer satisfies
these requirements, title or ownership will not transfer to him
to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority
on the subject, now a distinguished member of the Court,
Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in

time, stronger in right). Knowledge by the first buyer of the
second sale cannot defeat the first buyer's rights except
when the second buyer first registers in good faith the
second sale (Olivares vs. Gonzales, 159 SCRA 33).
Conversely, knowledge gained by the second buyer of the
first sale defeats his rights even if he is first to register, since
knowledge taints his registration with bad faith (see also
Astorga vs. Court of Appeals, G.R. No. 58530, 26 December
1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984,
129 SCRA 656), it has held that it is essential, to merit the
protection of Art. 1544, second paragraph, that the second
realty buyer must act in good faith in registering his deed of
sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99,
Crisostomo vs. CA, G.R. No. 95843, 02 September 1992).
(J. Vitug Compendium of Civil Law and Jurisprudence, 1993
Edition, p. 604).
Petitioner point out that the notice of lis pendens in the case
at bar was annoted on the title of the subject property only
on February 22, 1985, whereas, the second sale between
petitioners Coronels and petitioner Mabanag was
supposedly perfected prior thereto or on February 18, 1985.
The idea conveyed is that at the time petitioner Mabanag,
the second buyer, bought the property under a clean title,
she was unaware of any adverse claim or previous sale, for
which reason she is buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality
is not whether or not the second buyer was a buyer in good
faith but whether or not said second buyer registers such
second sale in good faith, that is, without knowledge of any
defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner
Mabanag could not have in good faith, registered the sale
entered into on February 18, 1985 because as early as
February 22, 1985, a notice of lis pendens had been
annotated on the transfer certificate of title in the names of
petitioners, whereas petitioner Mabanag registered the said
sale sometime in April, 1985. At the time of registration,
therefore, petitioner Mabanag knew that the same property
had already been previously sold to private respondents, or,
at least, she was charged with knowledge that a previous
buyer is claiming title to the same property. Petitioner
Mabanag cannot close her eyes to the defect in petitioners'
title to the property at the time of the registration of the
property.
This Court had occasions to rule that:
If a vendee in a double sale registers that sale after he has
acquired knowledge that there was a previous sale of the
same property to a third party or that another person claims
said property in a pervious sale, the registration will
constitute a registration in bad faith and will not confer upon
him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978];
citing Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs.

Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil.
581.)
Thus, the sale of the subject parcel of land between
petitioners and Ramona P. Alcaraz, perfected on February 6,
1985, prior to that between petitioners and Catalina B.
Mabanag on February 18, 1985, was correctly upheld by
both the courts below.
Although there may be ample indications that there was in
fact an agency between Ramona as principal and
Concepcion, her mother, as agent insofar as the subject
contract of sale is concerned, the issue of whether or not
Concepcion was also acting in her own behalf as a co-buyer
is not squarely raised in the instant petition, nor in such
assumption disputed between mother and daughter. Thus,
We will not touch this issue and no longer disturb the lower
courts' ruling on this point.
WHEREFORE, premises considered, the instant petition is
hereby DISMISSED and the appealed judgment AFFIRMED.
PERALTA, J.:
Assailed in the present petition for review on certiorari under
Rule 45 of the Rules of Court is the Decision1 of the Court of
Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041
which set aside the February 7, 1997 Decision of the
Regional Trial Court (RTC) of Lanao del Norte, Branch 4 in
Civil Case No. 3263.
The facts of the case are as follows:
Herein petitioner and respondents are the children of the
spouses Rufo and Sebastiana Balus. Sebastiana died on
September 6, 1978, while Rufo died on July 6, 1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which
he owns, as security for a loan he obtained from the Rural
Bank of Maigo, Lanao del Norte (Bank). The said property
was originally covered by Original Certificate of Title No. P439(788) and more particularly described as follows:
A parcel of land with all the improvements thereon,
containing an area of 3.0740 hectares, more or less, situated
in the Barrio of Lagundang, Bunawan, Iligan City, and
bounded as follows: Bounded on the NE., along line 1-2, by
Lot 5122, Csd-292; along line 2-12, by Dodiongan River;
along line 12-13 by Lot 4649, Csd-292; and along line 12-1,
by Lot 4661, Csd-292. x x x 2
SO ORDERED.
Rufo failed to pay his loan. As a result, the mortgaged

property was foreclosed and was subsequently sold to the
Bank as the sole bidder at a public auction held for that
purpose. On November 20, 1981, a Certificate of Sale 3 was
executed by the sheriff in favor of the Bank. The property
was not redeemed within the period allowed by law. More
than two years after the auction, or on January 25, 1984, the
sheriff executed a Definite Deed of Sale4 in the Bank's favor.
Thereafter, a new title was issued in the name of the Bank.
BALUS v. BALUS
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168970
January 15, 2010
CELESTINO BALUS, Petitioner,

vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE
CALUNOD, Respondents.
DECISION
On October 10, 1989, herein petitioner and respondents

executed an Extrajudicial Settlement of Estate5 adjudicating
to each of them a specific one-third portion of the subject
property consisting of 10,246 square meters. The
Extrajudicial Settlement also contained provisions wherein
the parties admitted knowledge of the fact that their father
mortgaged the subject property to the Bank and that they
intended to redeem the same at the soonest possible time.
Three years after the execution of the Extrajudicial
Settlement, herein respondents bought the subject property
from the Bank. On October 12, 1992, a Deed of Sale of
Registered Land6 was executed by the Bank in favor of
respondents. Subsequently, Transfer Certificate of Title
(TCT) No. T-39,484(a.f.)7 was issued in the name of
respondents. Meanwhile, petitioner continued possession of
the subject lot.
On June 27, 1995, respondents filed a Complaint8 for
Recovery of Possession and Damages against petitioner,
contending that they had already informed petitioner of the

fact that they were the new owners of the disputed property,
but the petitioner still refused to surrender possession of the
same to them. Respondents claimed that they had
exhausted all remedies for the amicable settlement of the
case, but to no avail.
On February 7, 1997, the RTC rendered a Decision 9
disposing as follows:
WHEREFORE, judgment is hereby rendered, ordering the
plaintiffs to execute a Deed of Sale in favor of the defendant,
the one-third share of the property in question, presently
possessed by him, and described in the deed of partition, as
follows:
A one-third portion of Transfer Certificate of Title No. T39,484 (a.f.), formerly Original Certificate of Title No. P-788,
now in the name of Saturnino Balus and Leonarda B. Vda.
de Calunod, situated at Lagundang, Bunawan, Iligan City,
bounded on the North by Lot 5122; East by shares of
Saturnino Balus and Leonarda Balus-Calunod; South by Lot
4649, Dodiongan River; West by Lot 4661, consisting of
10,246 square meters, including improvements thereon.
and dismissing all other claims of the parties.
The amount of P6,733.33 consigned by the defendant with
the Clerk of Court is hereby ordered delivered to the
plaintiffs, as purchase price of the one-third portion of the
land in question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
The RTC held that the right of petitioner to purchase from the
respondents his share in the disputed property was
recognized by the provisions of the Extrajudicial Settlement
of Estate, which the parties had executed before the
respondents bought the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents
filed an appeal with the CA.
On May 31, 2005, the CA promulgated the presently assailed
Decision, reversing and setting aside the Decision of the
RTC and ordering petitioner to immediately surrender
possession of the subject property to the respondents. The
CA ruled that when petitioner and respondents did not
redeem the subject property within the redemption period
and allowed the consolidation of ownership and the issuance
of a new title in the name of the Bank, their co-ownership
was extinguished.
AFTER THE TRANSFER OF TITLE TO THE BANK) BY

VIRTUE OF THE PARTIES' AGREEMENT PRIOR TO THE
REPURCHASE THEREOF BY THE RESPONDENTS;
THUS, WARRANTING THE PETITIONER'S ACT OF
ENFORCING THE AGREEMENT BY REIMBURSING THE
RESPONDENTS OF HIS (PETITIONER'S) JUST SHARE
OF THE REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership
by him and respondents over the subject property persisted
even after the lot was purchased by the Bank and title
thereto transferred to its name, and even after it was
eventually bought back by the respondents from the Bank.
Petitioner insists that despite respondents' full knowledge of
the fact that the title over the disputed property was already
in the name of the Bank, they still proceeded to execute the
subject Extrajudicial Settlement, having in mind the intention
of purchasing back the property together with petitioner and
of continuing their co-ownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is,
in and by itself, a contract between him and respondents,
because it contains a provision whereby the parties agreed
to continue their co-ownership of the subject property by
"redeeming" or "repurchasing" the same from the Bank. This
agreement, petitioner contends, is the law between the
parties and, as such, binds the respondents. As a result,
petitioner asserts that respondents' act of buying the
disputed property from the Bank without notifying him inures
to his benefit as to give him the right to claim his rightful
portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they
paid to the Bank.
The Court is not persuaded.
Petitioner and respondents are arguing on the wrong
premise that, at the time of the execution of the Extrajudicial
Settlement, the subject property formed part of the estate of
their deceased father to which they may lay claim as his
heirs.
At the outset, it bears to emphasize that there is no dispute
with respect to the fact that the subject property was
exclusively owned by petitioner and respondents' father,
Rufo, at the time that it was mortgaged in 1979. This was
stipulated by the parties during the hearing conducted by the
trial court on October 28, 1996.12 Evidence shows that a
Definite Deed of Sale13 was issued in favor of the Bank on
January 25, 1984, after the period of redemption expired.
There is neither any dispute that a new title was issued in the
Bank's name before Rufo died on July 6, 1984. Hence, there
is no question that the Bank acquired exclusive ownership of
the contested lot during the lifetime of Rufo.
Hence, the instant petition raising a sole issue, to wit:

WHETHER OR NOT CO-OWNERSHIP AMONG THE
PETITIONER AND THE RESPONDENTS OVER THE
PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN
The rights to a person's succession are transmitted from the

moment of his death.14 In addition, the inheritance of a
person consists of the property and transmissible rights and
obligations existing at the time of his death, as well as those

which have accrued thereto since the opening of the
succession.15 In the present case, since Rufo lost ownership
of the subject property during his lifetime, it only follows that
at the time of his death, the disputed parcel of land no longer
formed part of his estate to which his heirs may lay claim.
Stated differently, petitioner and respondents never inherited
the subject lot from their father.
stretching the interpretation

Settlement too far.
Petitioner and respondents, therefore, were wrong in

assuming that they became co-owners of the subject lot.
Thus, any issue arising from the supposed right of petitioner
as co-owner of the contested parcel of land is negated by the
fact that, in the eyes of the law, the disputed lot did not pass
into the hands of petitioner and respondents as compulsory
heirs of Rufo at any given point in time.
Moreover, petitioner's asseveration of his and respondents'

intention of continuing with their supposed co-ownership is
negated by no less than his assertions in the present petition
that on several occasions he had the chance to purchase the
subject property back, but he refused to do so. In fact, he
claims that after the Bank acquired the disputed lot, it offered
to re-sell the same to him but he ignored such offer. How
then can petitioner now claim that it was also his intention to
purchase the subject property from the Bank, when he
admitted that he refused the Bank's offer to re-sell the
subject property to him?
The foregoing notwithstanding, the Court finds a necessity

for a complete determination of the issues raised in the
instant case to look into petitioner's argument that the
Extrajudicial Settlement is an independent contract which
gives him the right to enforce his right to claim a portion of
the disputed lot bought by respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the
Philippines, contracts are perfected by mere consent; and
from that moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to
all the consequences which, according to their nature, may
be in keeping with good faith, usage and law.
Article 1306 of the same Code also provides that the
contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient,
provided these are not contrary to law, morals, good
customs, public order or public policy.
In the present case, however, there is nothing in the subject
Extrajudicial Settlement to indicate any express stipulation
for petitioner and respondents to continue with their
supposed co-ownership of the contested lot.
On the contrary, a plain reading of the provisions of the
Extrajudicial Settlement would not, in any way, support
petitioner's contention that it was his and his sibling's
intention to buy the subject property from the Bank and
continue what they believed to be co-ownership thereof. It is
a cardinal rule in the interpretation of contracts that the
intention of the parties shall be accorded primordial
consideration.16 It is the duty of the courts to place a practical
and realistic construction upon it, giving due consideration to
the context in which it is negotiated and the purpose which it
is intended to serve.17 Such intention is determined from the
express terms of their agreement, as well as their
contemporaneous and subsequent acts.18 Absurd and
illogical interpretations should also be avoided.19
For petitioner to claim that the Extrajudicial Settlement is an
agreement between him and his siblings to continue what
they thought was their ownership of the subject property,
even after the same had been bought by the Bank, is
of
the
said Extrajudicial
In the first place, as earlier discussed, there is no coownership to talk about and no property to partition, as the
disputed lot never formed part of the estate of their deceased
father.
In addition, it appears from the recitals in the Extrajudicial

Settlement that, at the time of the execution thereof, the
parties were not yet aware that the subject property was
already exclusively owned by the Bank. Nonetheless, the
lack of knowledge on the part of petitioner and respondents
that the mortgage was already foreclosed and title to the
property was already transferred to the Bank does not give
them the right or the authority to unilaterally declare
themselves as co-owners of the disputed property;
otherwise, the disposition of the case would be made to
depend on the belief and conviction of the party-litigants and
not on the evidence adduced and the law and jurisprudence
applicable thereto.
Furthermore, petitioner's contention that he and his siblings

intended to continue their supposed co-ownership of the
subject property contradicts the provisions of the subject
Extrajudicial Settlement where they clearly manifested their
intention of having the subject property divided or partitioned
by assigning to each of the petitioner and respondents a
specific 1/3 portion of the same. Partition calls for the
segregation and conveyance of a determinate portion of the
property owned in common. It seeks a severance of the
individual interests of each co-owner, vesting in each of them
a sole estate in a specific property and giving each one a
right to enjoy his estate without supervision or interference
from the other.20 In other words, the purpose of partition is to
put an end to co-ownership,21 an objective which negates
petitioner's claims in the present case.
WHEREFORE, the instant petition is DENIED. The assailed
Decision of the Court of Appeals, dated May 31, 2005 in CAG.R. CV No. 58041, is AFFIRMED.
SO ORDERED.
ARTICLE 776

MANUEL UY & SONS, INC. v. VALBUECO INC.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 179594
September 11, 2013
MANUEL UY & SONS, INC., Petitioner,

vs.
VALBUECO, INCORPORATED, Respondent.
1. The sum of FORTY-ONE THOUSAND ONE

HUNDREDEIGHTY-SEVEN and 25/100 (Php 41,187.25)
PESOS shall be paid upon signing of this conditional deed of
sale; and
2. The balance of ONE HUNDRED TWENTYTHREETHOUSAND FIVE HUNDRED SIXTY-ONE and
75/100 (Php123,561.75) PESOS shall be paid within a
period of one (1) year from November 15, 1973, with interest
of 12% per annum based on the balance, in the mode and
manner specified below:
a) January 4, 1974 P16,474.90 plus interest
b) On or before May 15, 1974 P53,543.43 plus interest
DECISION
PERALTA, J.:
This is a petition for review on certiorari 1 of the Court of
Appeals Decision2 dated December 11, 2006 in CA-G.R. CV
No. 85877, and its Resolution dated September 4, 2007,
denying petitioners motion for reconsideration.
The Court of Appeals reversed and set aside the Decision3 of
the Regional Trial Court (RTC) of Manila, Branch 1,
dismissing the Complaint for specific performance and
damages. The Court of Appeals reinstated the Complaint
and directed petitioner to execute deeds of absolute sale in
favor of respondent after payment of the purchase price of
the subject lots.
The facts, as stated by the Court of Appeals, are as follows:

Petitioner Manuel Uy & Sons, Inc. is the registered owner of
parcels of land located in Teresa, Rizal covered by Transfer
Certificate of Title(TCT) No. 59534, covering an area of
about 6,119 square meters; TCT No.59445, covering an area
of about 6,838 square meters; TCT No. 59446,covering an
area of about 12,389 square meters; and TCT No.
59444,covering an area of about 32,047 square meters.
On November 29, 1973, two Conditional Deeds of Sale were
executed by petitioner, as vendor, in favor of respondent
Valbueco, Incorporated, as vendee. The first Conditional
Deed of Sale4 covered TCT Nos. 59534, 59445 and 59446,
and contained the following terms and conditions:
That for and in consideration of the sum of ONE
HUNDREDSIXTY-FOUR THOUSAND SEVEN HUNDRED
FORTY-NINE(Php164,749.00) PESOS, Philippine currency,
the VENDOR hereby agrees to SELL, CEDE, TRANSFER
and CONVEY unto the VENDEE xx x the aforementioned
properties, payable under the following terms and conditions:
c) On or before November 15, 1974 P53,543.32 plus

interest
3. That the vendee shall be given a grace period of thirty
(30)days from the due date of any installment with
corresponding interest to be added, but should the VENDEE
fail to make such payment within the grace period this
contract shall be deemed rescinded and without force and
effect after notice in writing by VENDOR to VENDEE.
4. That the VENDOR agrees to have the existing Mortgages
on the properties subject of this sale released on or before
May 20, 1974.
5. That the VENDOR agrees to have the above-described
properties freed and cleared of all lessees, tenants, adverse
occupants or squatters within 100 days from the execution of
this conditional deed of sale. In case of failure by the
VENDOR to comply with the undertaking provided in this
paragraph and the VENDEE shall find it necessary to file a
case or cases in court to eject the said lessees, tenants,
occupants and/or squatters from the land, subject of this
sale, the VENDOR agrees to answer and pay for all the
expenses incurred and to be incurred in connection with said
cases until the same are fully and finally terminated.
6. That the VENDOR and the VENDEE agree that during the
existence of this Contract and without previous expressed
written permission from the other, they shall not sell, cede,
assign, transfer or mortgage, or in any way encumber unto
another person or party any right, interest or equity that they
may have in and to said parcels of land. x x x x
8. That it is understood that ownership of the properties
herein conveyed shall not pass to the VENDEE until after
payment of the full purchase price; provided, however, that
the VENDOR shall allow the annotation of this Conditional
Deed of Sale at the back of the titles of the above-described
parcels of land in the corresponding Registry of Deeds x xx.
9. That upon full payment of the total purchase price, a Deed
of Absolute Sale shall be executed in favor of the VENDEE
and the VENDOR agrees to pay the documentary stamps

and the science stamp tax of the Deed of Sale; while the
VENDEE agrees to pay the registration and other expenses
for the issuance of a new title.
10. That it is mutually agreed that in case of litigation, the
venue of the case shall be in the courts of Manila, having
competent jurisdiction, any other venue being expressly
waived.5
On the other hand, the second Conditional Deed of Sale 6
covering Lot No. 59444 provides, thus:
7. That the VENDOR and the VENDEE agree that during the
existence of this Contract and without previous expressed
written permission from the other, they shall not sell, cede,
assign, transfer or mortgage, or in any way encumber unto
another person or party any right, interest or equity that they
may have in and to said parcel of land.
xxxx
1. The sum of FIFTY-TWO THOUSAND SEVENTY-SIXAND

37/100 (Php 52,076.37) PESOS, shall be paid upon signing
of this conditional deed of sale; and
9. That it is understood that ownership of the property herein

conveyed shall not pass to the VENDEE until after payment
of the full purchase price, provided, however, that the
VENDOR shall allow the annotation of the Conditional Deed
of Sale at the back of the Title of the above-described parcel
of land in the corresponding Registry of Deeds; x xx.
2. The balance of ONE HUNDRED FIFTY-SIXTHOUSAND

TWO
HUNDRED
TWENTY-NINE
and
13/100
(Php156,229.13) PESOS shall be paid within a period of one
(1) year from November 15, 1973, with interest of 12% per
annum based on the balance, in the mode and manner
specified below:
10. That upon full payment of the total purchase price, a

Deed of Absolute Sale shall be executed in favor of the
VENDEE and the VENDOR agrees to pay the documentary
stamps and the science stamp tax of the Deed of Sale; while
the VENDEE agrees to pay the registration and other
expenses for the issuance of a new title.
a) January 4, 1974 P20,830.55 plus interest
11. That it is mutually agreed that in case of litigation, the

venue of the case shall be in the courts of Manila, having
competent jurisdiction, any other venue being expressly
waived.7
b) On or before May 15, 1974 P67,699.29 plus interest

c) On or before November 15, 1974, P67,699.29 plus
interest
3. That the VENDEE shall be given a grace period of thirty
(30) days from the due date of any installment with
corresponding interest to be added, but should the VENDEE
fail to make such payment within the grace period, this
contract shall be deemed rescinded and without force and
effect after notice in writing by VENDOR to VENDEE.
4. That the VENDOR agrees and acknowledges that any and
all payments to be made by the VENDEE by reason of this
presents unless hereafter advised by VENDOR to the
contrary, shall be made in favor of and to the Philippine Trust
Company by way of liquidation and payment of the existing
mortgage on the property subject of this sale.
5. That after each payment adverted to above the VENDOR
shall issue the corresponding receipt for the amount paid by
the VENDOR to the Philippine Trust Company.
6. That the VENDOR agrees to have the above-described
property freed and cleared of all lessees, tenants, adverse
occupants or squatters within 100 days from the execution of
this conditional deed of sale. In case of failure by the
VENDOR to comply with this undertaking provided in this
paragraph and the VENDEE shall find it necessary to file a
case or cases in court to eject the said lessees, tenants,
occupants and/or squatters from the land, subject of this
sale, the VENDOR agrees to answer and pay for all the
expenses incurred and to be incurred in connection with said
cases until the same are fully and finally terminated.
Respondent was able to pay petitioner the amount of

P275,055.558 as partial payment for the two properties
corresponding to the initial payments and the first
installments of the said properties.
At the same time, petitioner complied with its obligation
under the conditional deeds of sale, as follows: (1) the
mortgage for TCT No. 59446 was released on May 18, 1984,
while the mortgages for TCT Nos. 59445and 59534 were
released on July 19, 1974; (2) the unlawful occupants of the
lots covered by TCT Nos. 59444, 59534, 59445 and 59446
surrendered their possession and use of the said lots in
consideration of the amount of P6,000.00 in a document9
dated November 19, 1973, and they agreed to demolish their
shanties on or before December 7, 1973; and (3) the
mortgage with Philippine Trust Company covering TCT No.
59444 was discharged10 in 1984.
However, respondent suspended further payment as it was
not satisfied with the manner petitioner complied with its
obligations under the conditional deeds of sale.
Consequently, on March 17, 1978, petitioner sent respondent
a letter 11 informing respondent of its intention to rescind the
conditional deeds of sale and attaching therewith the original
copy of the respective notarial rescission.
On November 28, 1994, respondent filed a Complaint12 for
specific performance and damages against petitioner with
the RTC of Antipolo City. However, on January 15, 1996, the
case was dismissed without prejudice13 for lack of interest,
as respondent's counsel failed to attend the pre-trial
conference.

Five years later, or on March 16, 2001, respondent again
filed with the RTC of Manila, Branch 1 (trial court) a
Complaint14 for specific performance and damages, seeking
to compel petitioner to accept the balance of the purchase
price for the two conditional deeds of sale and to execute the
corresponding deeds of absolute sale. Respondent
contended that its non-payment of the installments was due
to the following reasons:(1) Petitioner refused to receive the
balance of the purchase price as the properties were
mortgaged and had to be redeemed first before a deed of
absolute sale could be executed; (2) Petitioner assured that
the existing mortgages on the properties would be
discharged on or before May 20,1974, or that petitioner did
not inform it (respondent) that the mortgages on the
properties were already released; and (3) Petitioner failed to
fully eject the unlawful occupants in the area.
In its Answer,15 petitioner argued that the case should be
dismissed, as it was barred by prior judgment. Moreover,
petitioner contended that it could not be compelled to
execute any deed of absolute sale, because respondent
failed to pay in full the purchase price of the subject lots.
Petitioner claimed that it gave respondent a notice of notarial
rescission of both conditional deeds of sale that would take
effect 30 days from receipt thereof. The notice of notarial
rescission was allegedly received by respondent on March
17,1978. Petitioner asserted that since respondent failed to
pay the full purchase price of the subject lots, both
conditional deeds of sale were rescinded as of April 16,
1978; hence, respondent had no cause of action against it.
In its Reply,16 respondent denied that it received the alleged
notice of notarial rescission. Respondent also denied that the
alleged recipient (one Wenna Laurenciana)17 of the letter
dated March 17, 1978, which was attached to the notice of
notarial rescission, was its employee. Respondent stated
that assuming arguendo that the notice was sent to it, the
address (6th Floor, SGC Bldg., Salcedo Street, Legaspi
Village, Makati, Metro Manila) was not the given address of
respondent. Respondent contended that its address on the
conditional deeds of sale and the receipts issued by it and
petitioner showed that its principal business address was the
7th Floor, Bank of P.I. Bldg, Ayala Avenue, Makati, Rizal.
On August 1, 2005, the trial court rendered a Decision,18
dismissing the complaint, as petitioner had exercised its right
to rescind the contracts. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the complaint is
DISMISSED for lack of merit.
Claims and counterclaims for damages are also dismissed.19
The trial court stated that the issues before it were: (1) Did
petitioner unlawfully evade its obligation to execute the final
deed of sale and to eject the squatters/occupants on the
properties; (2) Is the case barred by prior judgment; and (3)
Does respondent have a cause of action against petitioner.
The trial court said that both conditional deeds of sale clearly
provided that "ownership x x x shall not pass to the VENDEE
until after full payment of the purchase price." Respondent
admitted that it has not yet fully paid the purchase price. The
trial court held that the conditions in the conditional deeds of
sale being suspensive, that is, its fulfillment gives rise to the
obligation, the reasons for the inability of respondent to fulfill
its own obligations is material, in order that the obligation of
petitioner to execute the final deeds of absolute sale will
arise. The trial court stated that the evidence showed that
petitioner had exercised its right to rescind the contract by a
written notice dated March 17, 1978 and notarial acts both
dated March15, 1978. The trial court noted that respondent
denied having received the notice and disclaimed knowing
the recipient, Wenna Laurenciana. However, on crossexamination, respondent's witness, Gaudencio Juan, who
used to be respondent's Personnel Manager and Forester at
the same time, admitted knowing Laurenciana because she
was the secretary of Mr. Valeriano Bueno, respondent's
president at that time, although Laurenciana was not
employed by respondent, but she was employed by
Mahogany Products Corporation, presumably one of the 14
other companies being controlled by Mr. Bueno.20
The trial court held that the conditional deeds of sale were
executed on November 29, 1973 and were already covered
by Republic Act (R.A.) No. 6552, otherwise known as the
Realty Installment Buyer Act. Under Section 4 of the law, if
the buyer fails to pay the installments due at the expiration of
the grace period, which is not less than 60 days from the
date the installment became due, the seller may cancel the
contract after 30 days from receipt of the buyer of the notice
of cancellation or the demand for rescission of the contracts
by notarial act. The trial court found no lawful ground to grant
the relief prayed for and dismissed the complaint for lack of
merit.
Respondent appealed the decision of the trial court to the
Court of Appeals, and made these assignments of error: (1)
the trial court erred in holding that petitioner did not
unlawfully evade executing a final deed of sale, since
respondent's failure to fulfill its own obligation is material; (2)
the trial court erred in holding that it is unbelievable and a
self-contradiction that respondent was informed of the
mortgage only when it was paying the balance of the
properties; and (3) the trial court erred in holding that as
early as November 19, 1973, petitioner had already taken
necessary steps to evict the squatters/occupants through the
intercession of the agrarian reform officer.
On December 11, 2006, the Court of Appeals rendered a
Decision, reversing and setting aside the Decision of the trial
court. It reinstated the complaint of respondent, and directed
petitioner to execute deeds of absolute sale in favor of
respondent after payment of the balance of the purchase
price of the subject lots. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the August 1,
2005Decision of the Regional Trial Court of Manila, Branch

1, in Civil Case No. 01-100411, is hereby REVERSED and
SET ASIDE.
A new one is hereby entered: REINSTATING the complaint
and defendant-appellee MANUEL UY & SONS INC. is
hereby DIRECTED, pursuant to Sec. 4, R. A. No. 6552,
otherwise known as the Maceda Law, to EXECUTE and
DELIVER:
(1) Deeds of Absolute Sale in favor of VALBUECO, INC.; and
(2) Transfer Certificates of Title pertaining to Nos. 59534,
59445,59446 and 59444, in the name of plaintiff-appellant
VALBUECO, INC., after VALBUECO pays MANUEL UY &
SONS, without additional interest, within thirty days from
finality of this judgment, the balance of the contract price.
If MANUEL UY & SONS refuses to deliver the Deeds of
Absolute Sale and the co-owner's copy of the TCTs, the
Register of Deeds of Antipolo, Rizal is hereby DIRECTED to
CANCEL the latest TCTs issued derived from TCT Nos.
59534, 59445, 59446 and 59444, and to
corporations are two separate entities with a distinct

personality independent from each other. Thus, the Court of
Appeals held that the notarial rescission was in validly
served. It stated that it is a general rule that when service of
notice is an issue, the person alleging that the notice was
served must prove the fact of service by a preponderance of
evidence. In this case, the Court of Appeals held that there
was no evidence that the notice of cancellation by notarial
act was actually received by respondent. Thus, for
petitioner's failure to cancel the contract in accordance with
the procedure provided by law, the Court of Appeals held
that the contracts to sell on installment were valid and
subsisting, and respondent has the right to offer to pay for
the balance of the purchase price before actual cancellation.
Petitioner's motion for reconsideration was denied for lack of
merit by the Court of Appeals in a Resolution23 dated
September 4, 2007.
Petitioner filed this petition raising the following issues:
I
Only if VALBUECO fails in the payment directed above, then

defendant-appellee MANUEL UY & SONS INC. has the
opportunity to serve a valid notice of notarial rescission.
THE HONORABLE COURT OF APPEALS GRAVELY

ERRED INREVERSING THE RTC DECISION AND
REINSTATING THECOMPLAINT WHEN ON ITS FACE IT
HAS LONG BEENPRESCRIBED, AS IT WAS FILED AFTER
27 YEARS AND HAS NOJURISDICTION (SIC).
SO ORDERED.21
II
ISSUE new TCTS in the name of VALBUECO.
The Court of Appeals held that the two conditional deeds of

sale in this case are contracts to sell. It stated that the law
applicable to the said contracts to sell on installments is R.A.
No. 6552, specifically Section 4thereof, as respondent paid
less than two years in installments. It held that upon
repeated defaults in payment by respondent, petitioner had
the right to cancel the said contracts, but subject to the
proper receipt of respondent of the notice of cancellation or
the demand for the rescission of the contracts by notarial act.
However, the Court of Appeals found that petitioner sent the
notice of notarial rescission to the wrong address. The
business address of respondent, as used in all its
transactions with petitioner, was the 7th Floor, Bank of the
Philippine Islands Building, Ayala Avenue, Makati City, but
the notice of notarial rescission was sent to the wrong
address at the 6th Floor, SGC Building, Salcedo Street,
Legaspi Village, Makati, Metro Manila. Petitioner served the
notice to the address of Mahogany Products Corporation. It
was established that the person who received the notice,
one Wenna Laurenciana, was an employee of Mahogany
Products Corporation and not an employee of respondent or
Mr. Valeriano Bueno, the alleged president of Mahogany
Products Corporation and respondent company.22 The
appellate court stated that this cannot be construed as to
have been contructively received by respondent as the two
THE HONORABLE COURT OF APPEALS SERIOUSLY

ERRED ANDGRAVELY ABUSED ITS DISCRETION IN
COMPELLINGPETITIONER TO EXECUTE A FINAL DEED
OF ABSOLUTE SALE EVEN IF RESPONDENT JUDICIALLY
ADMITTED ITS NON-PAYMENT OF THE BALANCE OF
THE DEEDS OF CONDITIONALSALE DUE SINCE 1974.
III
ERRED INGRANTING THE RELIEFS PRAYED BY
RESPONDENT IN ITSCOMPLAINT FOR SPECIFIC
PERFORMANCE WHEN IT WASRESPONDENT WHO
BREACHED THE CONTRACT.
IV
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVEINJUSTICE WHEN IT PENALIZED PETITIONER
FOR EXERCISINGITS LEGAL RIGHT AND DID NOT
COMMIT AN ACTIONABLEWRONG WHILE IT HEFTILY
REWARDED RESPONDENT, WHOBREACHED THE
CONTRACT, AND ORDERED TO PAY WITHOUTINTEREST
PHP 97,998.95, WHICH IS DUE SINCE 1974 UNDER
THECONTRACT, FOR FOUR (4) PARCELS OF LAND
(57,393 SQUAREMETERS), NOW WORTH HUNDRED
MILLIONS.

V
ERRED INANNULING THE NOTARIAL RESCISSION
WHEN THE COMPLAINT IS ONLY FOR SPECIFIC
PERFORMANCE AND WAS NOT AN ISSUE RAISED IN
THE PLEADINGS OR DURING THETRIAL.24
The main issue is whether respondent is entitled to the relief
granted by the Court of Appeals. Petitioner contends that the
Court of Appeals erred in directing it to execute deeds of
absolute sale over the subject lots even if respondent
admitted non-payment of the balance of the purchase price.
As found by the Court of Appeals, the two conditional deeds
of sale entered into by the parties are contracts to sell, as
they both contained a stipulation that ownership of the
properties shall not pass to the vendee until after full
payment of the purchase price. In a conditional sale, as in a
contract to sell, ownership remains with the vendor and does
not pass to the vendee until full payment of the purchase
price.25 The full payment of the purchase price partakes of a
suspensive condition, and non-fulfillment of the condition
prevents the obligation to sell from arising. 26 To differentiate,
a deed of sale is absolute when there is no stipulation in the
contract that title to the property remains with the seller until
full payment of the purchase price.
right shall be exercised by the buyer only once in every five

years of the life of the contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund to the
buyer the cash surrender value of the payments on the
property equivalent to fifty per cent of the total payments
made, and, after five years of installments, an additional five
per cent every year but not to exceed ninety per cent of the
total payments made: Provided, That the actual cancellation
of the contract shall take place after thirty days from receipt
by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act and upon full
payment of the cash surrender value to the buyer.
Down payments, deposits or options on the contract shall be
included in the computation of the total number of installment
payments made. chanrobles a law library
Sec. 4. In case where less than two years of installments
were paid, the seller shall give the buyer a grace period of
not less than sixty days from the date the installment
became due.
If the buyer fails to pay the installments due at the expiration
of the grace period, the seller may cancel the contract after
thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a
notarial act.31
Ramos v. Heruela27 held that Articles 1191 and 1592 of the

Civil Code28 are applicable to contracts of sale, while R.A.
No. 6552 applies to contracts to sell.
The Court of Appeals correctly held that R.A. No. 6552,
otherwise known as the Realty Installment Buyer Act, applies
to the subject contracts to sell. R.A. No. 6552 recognizes in
conditional sales of all kinds of real estate (industrial,
commercial, residential) the right of the seller to cancel the
contract upon non-payment of an installment by the buyer,
which is simply an event that prevents the obligation of the
vendor to convey title from acquiring binding force.29
It also provides the right of the buyer on installments in case
he defaults in the payment of succeeding installments30 as
follows:
Section 3. In all transactions or contracts involving the sale
or financing of real estate on installment payments, including
residential condominium apartments but excluding industrial
lots, commercial buildings and sales to tenants under
Republic Act Numbered Thirty-eight hundred forty-four, as
amended by Republic Act Numbered Sixty-three hundred
eighty-nine, where the buyer has paid at least two years of
installments, the buyer is entitled to the following rights in
case he defaults in the payment of succeeding installments:
(a) To pay, without additional interest, the unpaid installments
due within the total grace period earned by him which is
hereby fixed at the rate of one month grace period for every
one year of installment payments made: Provided, That this
In this case, respondent has paid less than two years of

installments; therefore, Section 4 of R.A. No. 6552 applies.
The Court of Appeals held that even if respondent defaulted
in its full payment of the purchase price of the subject lots,
the conditional deeds of sale remain valid and subsisting,
because there was no valid notice of notarial rescission to
respondent, as the notice was sent to the wrong address,
that is, to Mahogany Products Corporation, and it was
received by a person employed by Mahogany Products
Corporation and not the respondent. The Court of Appeals
stated that the allegation that Mahogany Products
Corporation and respondent have the same President, one
Valeriano Bueno, is irrelevant and has not been actually
proven or borne by evidence. The appellate court held that
there was insufficient proof that respondent actually received
the notice of notarial rescission of the conditional deeds of
sale; hence, the unilateral rescission of the conditional deeds
of sale cannot be given credence.
However, upon review of the records of this case, the Court
finds that respondent had been served a notice of the
notarial rescission of the conditional deeds of sale when it
was furnished with the petitioner's Answer, dated February
16, 1995, to its first Complaint filed on November 28,
1994with the RTC of Antipolo City, which case was docketed
as Civil Case No.94-3426, but the complaint was later
dismissed without prejudice on January15, 1996.32

It appears that after respondent filed its first Complaint for
specific performance and damages with the RTC of Antipolo
City on November 28,1994, petitioner filed an Answer and
attached thereto a copy of the written notice dated March 17,
1978 and copies of the notarial acts of rescission dated
March 15, 1978, and that respondent received a copy of the
said Answer with the attached notices of notarial rescission.
However, to reiterate, the first Complaint was dismissed
without prejudice.
Five years after the dismissal of the first Complaint,
respondent again filed this case for specific performance and
damages, this time, with the RTC of Manila. Petitioner filed
an Answer, and alleged, among others, that the case was
barred by prior judgment, since respondent filed a complaint
on November 28, 1994 before the RTC of Antipolo City,
Branch 73, against it (petitioner) involving the same issues
and that the case, docketed as Civil Case No. 94-3426, was
dismissed on January 15, 1996 for lack of interest.
Respondent filed a Reply33 dated July 18, 2001, asserting
that petitioner prayed for the dismissal of the first case filed
on November 28, 1994 (Civil Case No. 94-3426) on the
ground of improper venue as the parties agreed in the deeds
of conditional sale that in case of litigation, the venue shall
be in the courts of Manila. To prove its assertion, respondent
attached to its Reply a copy of petitioners Answer to the first
Complaint in Civil Case No. 94-3426, which Answer included
the written notice dated March 17, 1978 and two notarial acts
of rescission, both dated March 15, 1978, of the two
conditional deeds of sale. Hence, respondent is deemed to
have had notice of the notarial rescission of the two
conditional deeds of sale when it received petitioners
Answer to its first complaint filed with the RTC of Antipolo,
since petitioners Answer included notices of notarial
rescission of the two conditional deeds of sale. The first
complaint was filed six years earlier before this complaint
was filed. As stated earlier, the first complaint was dismissed
without prejudice, because respondents counsel failed to
appear at the pre-trial. Since respondent already received
notices of the notarial rescission of the conditional deeds of
sale, together with petitioners Answer to the first Complaint
five years before it filed this case, it can no longer deny
having received notices of the notarial rescission in this
case, as respondent admitted the same when it attached the
notices of notarial rescission to its Reply in this case.
Consequently, respondent is not entitled to the relief granted
by the Court of Appeals.
Under R.A. No. 6552, the right of the buyer to refund accrues
only when he has paid at least two years of installments. 34 In
this case, respondent has paid less than two years of
installments; hence, it is not entitled to a refund.35
Moreover, petitioner raises the issue of improper venue and
lack of jurisdiction of the RTC of Manila over the case. It
contends that the complaint involved real properties in
Antipolo City and cancellation of titles; hence, it was
improperly filed in the RTC of Manila.
Petitioner's contention lacks merit, as petitioner and

respondent stipulated in both Conditional Deeds of Sale that
they mutually agreed that in case of litigation, the case shall
be filed in the courts of Manila.36
Further, petitioner contends that the action has prescribed.
Petitioner points out that the cause of action is based on a
written contract; hence, the complaint should have been
brought within 10 years from the time the right of action
accrues under Article 1144 of the Civil Code. Petitioner
argues that it is evident on the face of the complaint and the
two contracts of conditional sale that the cause of action
accrued in 1974; yet, the complaint for specific performance
was filed after 27 years. Petitioner asserts that the action has
prescribed.
The contention is meritorious.
Section 1, Rule 9 of the 1997 Rules of Civil Procedure
provides:
Section 1. Defense and objections not pleaded. - Defenses
and objections not pleaded whether in a motion to dismiss or
in the answer are deemed waived. However, when it appears
from the pleadings that the court has no jurisdiction over the
subject matter, that there is another action pending between
the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the
court shall dismiss the claim.37
In Gicano v. Gegato,38 the Court held:

x x x (T)rial courts have authority and discretion to dismiss
an action on the ground of prescription when the parties'
pleadings or other facts on record show it to be indeed timebarred; (Francisco v. Robles, Feb, 15,1954; Sison v. Mc
Quaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28,
1961;Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v.
NDC, Feb. 28, 1958;32 SCRA 529; Sinaon v. Sorongan, 136
SCRA 408); and it may do so on the basis of a motion to
dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer
which sets up such ground as an affirmative defense (Sec. 5,
Rule16), or even if the ground is alleged after judgment on
the merits, as in a motion for reconsideration (Ferrer v.
Ericta, 84 SCRA 705); or even if the defense has not been
asserted at all, as where no statement thereof is found in the
pleadings (Garcia v. Mathis, 100 SCRA 250;PNB v. Pacific
Commission House, 27 SCRA 766; Chua Lamco v.Dioso, et
al., 97 Phil. 821);
or where a defendant has been declared in default (PNB v.
Perez, 16 SCRA 270). What is essential only, to repeat, is
that the facts demonstrating the lapse of the prescriptive
period, be otherwise sufficiently and satisfactorily apparent
on the record; either in the averments of the plaintiff's
complaint, or otherwise established by the evidence.39
Moreover, Dino v. Court of Appeals40 held:

Even if the defense of prescription was raised for the first
time on appeal in respondent's Supplemental Motion for
Reconsideration of the appellate court's decision, this does
not militate against the due process right of the petitioners.
On appeal, there was no new issue of fact that arose in
connection with the question of prescription, thus it cannot
be said that petitioners were not given the opportunity to
present evidence in the trial court to meet a factual issue.
Equally important, petitioners had the opportunity to oppose
the defense of prescription in their Opposition to the
Supplemental Motion for Reconsideration filed in the
appellate court and in their Petition for Review in this Court.41
In this case, petitioner raised the defense of prescription for
the first time before this Court, and respondent had the
opportunity to oppose the defense of prescription in its
Comment to the petition. Hence, the Court can resolve the
issue of prescription as both parties were afforded the
opportunity to ventilate their respective positions on the
matter. The Complaint shows that the Conditional Deeds of
Sale were executed on November 29, 1973, and payments
were due on both Conditional Deeds of Sale on November
15, 1974. Article 114442 of the Civil Code provides that
actions based upon a written contract must be brought within
ten years from the time the right of action accrues. Nonfulfillment of the obligation to pay on the last due date, that
is, on November 15, 1974, would give rise to an action by
the vendor, which date of reckoning may also apply to any
action by the vendee to determine his right under R.A. No.
6552. The vendee, respondent herein, filed this case on
March 16, 2001, which is clearly beyond the 10-year
prescriptive period; hence, the action has prescribed.
WHEREFORE, the petition is GRANTED. The Decision of
the Court of Appeals, dated December 11, 2006, in CA-G.R.
CV No. 85877 and its Resolution dated September 4, 2007
are REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Manila, Branch I, dated August 1,
2005 in Civil Case No. 01-100411, dismissing the case for
lack of merit, is REINSTATED.
SO ORDERED.
LIU v. LOY
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 145982
July 3, 2003
FRANK N. LIU, deceased, substituted by his surviving

spouse Diana Liu, and children, namely: Walter, Milton,
Frank, Jr., Henry and Jockson, all surnamed Liu,
Rebecca Liu Shui and Pearl Liu Rodriguez, petitioners,
vs.
ALFREDO LOY, JR., TERESITA A. LOY and ESTATE OF

JOSE VAO, respondents.
CARPIO, J.:
The Case
This is a petition for review on certiorari of the Decision 1
dated 13 June 2000 and the Resolution dated 14 November
2002 of the Court of Appeals which affirmed the Decision 2 of
the Regional Trial Court, Branch 14, Cebu City. The Court of
Appeals agreed with the trial court that the sales by the late
Teodoro Vao to respondents Alfredo Loy, Jr. and Teresita A.
Loy of Lot Nos. 5 and 6, respectively, were valid. The Court
of Appeals also agreed with the trial court that the unilateral
extrajudicial rescission by the late Teodoro Vao of the
contract to sell involving five lots, including Lot Nos. 5 and 6,
between him and Benito Liu (predecessor-in-interest of
Frank Liu) was valid.
The Facts
On 13 January 1950, Teodoro Vao, as attorney-in-fact of
Jose Vao, sold seven lots of the Banilad Estate located in
Cebu City to Benito Liu and Cirilo Pangalo. 3 Teodoro Vao
dealt with Frank Liu, the brother of Benito Liu, in the sale of
the lots to Benito Liu and Cirilo Pangalo. The lots sold to
Benito Liu were Lot Nos. 5, 6, 13, 14, and 15 of Block 12 for
a total price of P4,900. Benito Liu gave a down payment of
P1,000, undertaking to pay the balance of P3,900 in monthly
installments of P100 beginning at the end of January 1950.
The lots sold to Cirilo Pangalo were Lot Nos. 14 and 15 of
Block 11 for a total price of P1,967.50. Cirilo Pangalo gave
P400 as down payment, undertaking to pay the balance of
P1,567.50 in monthly installments of P400 beginning at the
end of January 1950. Meanwhile, Jose Vao passed away.
Benito Liu subsequently paid installments totaling P2,900,
leaving a balance of P1,000.4 Apparently, Benito Liu stopped
further payments because Teodoro Vao admitted his
inability to transfer the lot titles to Benito Liu. Later, in a letter5
dated 16 October 1954, Teodoro Vao informed Frank Liu6
that the Supreme Court had already declared valid the will of
his father Jose Vao. Thus, Teodoro Vao could transfer the
titles to the buyers names upon payment of the balance of
the purchase price.
When Frank Liu failed to reply, Teodoro Vao sent him
another letter,7 dated 1 January 1955, reminding him of his
outstanding balance. It appears that it was only after nine
years that Frank Liu responded through a letter,8 dated 25
January 1964. In the letter, Frank Liu informed Teodoro Vao
that he was ready to pay the balance of the purchase price
of the seven lots. He requested for the execution of a deed
of sale of the lots in his name and the delivery of the titles to
him.

On 22 April 1966, Benito Liu sold to Frank Liu the five lots
(Lot Nos. 5, 6, 13, 14 and 15 of Block 12) which Benito Liu
purchased from Teodoro Vao.9 Frank Liu assumed the
balance of P1,000 for the five lots. Cirilo Pangalo likewise
sold to Frank Liu the two lots (Lot Nos. 14 and 15 of Block
11) that Pangalo purchased from Teodoro Vao. Frank Liu
likewise assumed the balance of P417 for the two lots.
On 24 February 1976, the probate court approved the claim

of Frank Liu. On 5 March 1976, Milagros Vao executed a
deed of conveyance covering the seven lots in favor of Frank
Liu, in compliance with the probate courts order.21 The deed
of conveyance included Lot Nos. 5 and 6, the same lots
Teodoro Vao sold respectively to Alfredo Loy, Jr. on 16
December 1969 and to Teresita Loy on 19 August 1968.
On 21 March 1968, Frank Liu reiterated in a letter 10 his

request for Teodoro Vao to execute the deed of sale
covering the seven lots so he could secure the
corresponding certificates of title in his name. He also
requested for the construction of the subdivision roads
pursuant to the original contract. In the letter, Frank Liu
referred to another letter, dated 25 June 1966, which he
allegedly sent to Teodoro Vao. According to Frank Liu, he
enclosed PBC Check No. D-782290 dated 6 May 1966 for
P1,417, which is the total balance of the accounts of Benito
Liu and Cirilo Pangalo on the seven lots. However, Frank Liu
did not offer in evidence the letter or the check. Frank Liu
sent two other letters,11 dated 7 June 1968 and 29 July 1968,
to Teodoro Vao reiterating his request for the execution of
the deed of sale in his favor but to no avail.
On 19 March 1976, the probate court, upon an ex-parte

motion filed by Teresita Loy, issued an Order 22 approving the
16 August 1968 sale by Teodoro Vao of Lot No. 6 in her
favor. Likewise, upon an ex-parte motion filed by Alfredo Loy,
Jr., the probate court issued on 23 March 1976 an Order 23
approving the 16 December 1969 sale of Lot No. 5 by
Teodoro Vao in his favor.
On 19 August 1968, Teodoro Vao sold Lot No. 6 to

respondent Teresita Loy for P3,930.12 The Register of Deeds
of Cebu City entered this sale in the Daybook on 24
February 1969.13
On 2 December 1968, Frank Liu filed a complaint against
Teodoro Vao for specific performance, execution of deed of
absolute sale, issuance of certificates of title and
construction of subdivision roads, before the Court of First
Instance of Davao. The case was docketed as Civil Case No.
6300.14
On 19 December 1968, Frank Liu filed with the Register of
Deeds of Cebu City a notice of lis pendens on the seven lots
due to the pendency of Civil Case No. 6300.15 However, the
Register of Deeds denied the registration of the lis pendens
"on the ground that the property is under administration and
said claim must be filed in court."16
On 16 December 1969, Teodoro Vao sold Lot No. 5 to
respondent Alfredo Loy for P3,910. 17 The Register of Deeds
of Cebu City entered this sale in the Daybook on 16 January
1970.18
On 3 October 1970, the Court of First Instance of Davao, on
motion of Teodoro Vao, dismissed Civil Case No. 6300 on
the ground that Frank Liu should have filed the claim with the
probate court.19 Thus, on 17 February 1972, Frank Liu filed
before the probate court a claim against the Estate of Jose
Vao for "Specific Performance, Execution of Deed of
Absolute Sale, Issuance of Certificate of Title, and
Construction of Subdivision Roads."20
During the proceedings, Teodoro Vao died. His widow,
Milagros Vao, succeeded as administratrix of the Estate of
Jose Vao.
On 10 May 1976, the Register of Deeds of Cebu City

cancelled TCT No. 44204 in the name of the Estate of Jose
Vao covering Lot No. 5 and issued a new title, TCT No.
64522, in the name of Alfredo Loy, Jr. and Perfeccion V.
Loy.24 Likewise, on the same date, the Register of Deeds
cancelled TCT No. 44205 in the name of the Estate of Jose
Vao covering Lot No. 6, and issued TCT No. 64523 in the
name of Teresita A. Loy.25
On 3 June 1976, Milagros Vao, as administratrix of the
estate, filed a motion for reconsideration of the Orders of the
probate court dated 19 and 23 March 1976. She contended
that she already complied with the probate courts Order
dated 24 February 1976 to execute a deed of sale covering
the seven lots, including Lot Nos. 5 and 6, in favor of Frank
Liu. She also stated that no one notified her of the motion of
the Loys, and if the Loys or the court notified her, she would
have objected to the sale of the same lots to the Loys.
On 4 June 1976, Frank Liu filed a complaint for
reconveyance or annulment of title of Lot Nos. 5 and 6.
Frank Liu filed the case in the Regional Trial Court of Cebu
City, Branch 14, which docketed it as Civil Case No. R15342.
On 5 August 1978, the probate court denied the motion for
reconsideration of Milagros Vao on the ground that the
conflicting claims regarding the ownership of Lot Nos. 5 and
6 were already under litigation in Civil Case No. R-15342.
On 8 April 1991, the Regional Trial Court of Cebu City ("trial
court"), Branch 14, rendered judgment against Frank Liu as
follows:
WHEREFORE, judgment is hereby rendered:
(1) Dismissing the complaint at bar; and
(2) Confirming the unilateral extrajudicial rescission of the
contract Exhibit A by the late Teodoro Vao, conditioned
upon the refund by the Estate of Jose Vao of one-half (1/2)
of what the plaintiff had paid under that contract.

The counterclaims by the defendants Alfredo A. Loy, Jr. and
Teresita A. Loy and by the defendant Estate of Jose Vao,
not having been substantiated, are hereby denied.
Without special pronouncement as to costs.
SO ORDERED.26
Frank Liu appealed to the Court of Appeals, which affirmed in
toto the decision of the trial court. Frank Liu 27 filed a motion
for reconsideration but the Court of Appeals denied the
same.
The Court of Appeals held that there is no basis for the claim
of moral damages and attorneys fees. The appellate court
found that Frank Liu failed to prove that he suffered mental
anguish due to the actuations of the Loys. The Court of
Appeals likewise disallowed the award of attorneys fees.
The fact alone that a party was compelled to litigate and
incur expenses to protect his claim does not justify an award
of attorneys fees. Besides, the Court of Appeals held that
where there is no basis to award moral damages, there is
also no basis to award attorneys fees.
The Issues
Hence, the instant petition.
Petitioners28 raise the following issues:29
The Trial Courts Ruling
1. Whether prior approval of the probate court is necessary

to validate the sale of Lot Nos. 5 and 6 to Loys;
The trial court held that the contract between Teodoro Vao
and Benito Liu was a contract to sell. Since title to Lot Nos. 5
and 6 never passed to Benito Liu due to non-payment of the
balance of the purchase price, ownership of the lots
remained with the vendor. Therefore, the trial cour ruled that
the subsequent sales to Alfredo Loy, Jr. and Teresita Loy of
Lot Nos. 5 and 6, respectively, were valid.
The trial court viewed the letter of Teodoro Vao dated 1
January 1995 addressed to Frank Liu as a unilateral
extrajudicial rescission of the contract to sell. The trial court
upheld the unilateral rescission subject to refund by the
Estate of Jose Vao of one-half (1/2) of what Frank Liu paid
under the contract.
2. Whether the Loys can be considered buyers and

registrants in good faith despite the notice of lis pendens;
3. Whether Frank Liu has a superior right over Lot Nos. 5
and 6;
4. Whether the Court of Appeals erred in not passing upon
the trial courts declaration that the extra-judicial rescission
by Teodoro Vao of the sale in favor of Frank Liu is valid;
5.Whether petitioners are entitled to moral damages and
attorneys fees.
The Courts Ruling
The trial court ruled that Teodoro Vao, as administrator of

the Estate of Jose Vao and as sole heir of Jose Vao, acted
both as principal and as agent when he sold the lots to
Alfredo Loy, Jr. and Teresita Loy. The probate court
subsequently approved the sales. The trial court also found
that Alfredo Loy, Jr. and Teresita Loy were purchasers in
good faith.
The Court of Appeals Ruling
In affirming in toto the trial courts decision, the appellate
court found no evidence of fraud or ill-motive on the part of
Alfredo Loy, Jr. and Teresita Loy. The Court of Appeals cited
the rule that "the law always presumes good faith such that
any person who seeks to be awarded damages due to the
acts of another has the burden of proving that the latter
acted in bad faith or ill-motive."
The Court of Appeals also held that the sales to Alfredo Loy,
Jr. and Teresita Loy of Lot Nos. 5 and 6, respectively, were
valid despite lack of prior approval by the probate court. The
Court of Appeals declared that Teodoro Vao sold the lots in
his capacity as heir of Jose Vao. The appellate court ruled
that an heir has a right to dispose of the decedents property,
even if the same is under administration, because the
hereditary property is deemed transmitted to the heir without
interruption from the moment of the death of the decedent.
The petition is meritorious.

Whether there was a valid cancellation of the contract to
sell
There was no valid cancellation of the contract to sell
because there was no written notice of the cancellation to
Benito Liu or Frank Liu. There was even no implied
cancellation of the contract to sell. The trial court merely
"viewed" the alleged "unilateral extrajudicial rescission" from
the letter of Teodoro Vao, dated 1 January 1955, addressed
to Frank Liu, stating that:
Two months, I believe, is ample for the allowance of delays
caused by your (sic) either too busy, or having been some
place else, or for consultations. These are the only reasons I
can think of that could have caused the delay in your answer,
unless you do not think an answer is necessary at all, as you
are not the party concerned in the matter.
I shall therefor (sic) appreciate it very much, if you will write
me within ten days from receipt of this letter, or enterprete
(sic) your silence as my mistake in having written to the
wrong party, and therefor (sic) proceed to write Misters: B.
Liu and C. Pangalo.30 (Emphasis supplied)

Obviously, we cannot construe this letter as a unilateral
extrajudicial rescission of the contract to sell. As clearly
stated in the letter, the only action that Teodoro Vao would
take if Frank Liu did not reply was that Teodoro Vao would
write directly to Benito Liu and Cirilo Pangalo. The letter does
not mention anything about rescinding or cancelling the
contract to sell.
in the middle of July, also this year, the Supreme Court again
declared that all the sales I have made of the properties of
my Father, were Legal, and that I should be empowered to
have the Titles transferred in the buyers names, should they
have paid in full. A few have already received their Titles.
And yours can be had too in two days time from the time you
have paid in full.
Although the law allows the extra-judicial cancellation of a

contract to sell upon failure of one party to comply with his
obligation, notice of such cancellation must still be given to
the party who is at fault.31 The notice of cancellation to the
other party is one of the requirements for a valid cancellation
of a contract to sell, aside from the existence of a lawful
cause. Even the case cited by the trial court emphasizes the
importance of such notice:
Nevertheless, the subsequent approval by the probate court

of the sale of Lot Nos. 5 and 6 to Frank Liu rendered moot
any question on the continuing validity of the contract to sell.
Of course, it must be understood that the act of a party in

treating a contract as cancelled or resolved on account of
infractions by the other contracting party must be made
known to the other and is always provisional, being ever
subject to scrutiny and review by the proper court. If the
other party denies that rescission is justified, it is free to
resort to judicial action in its own behalf, and bring the matter
to court. Then, should the court, after due hearing, decide
that the resolution of the contract was not warranted, the
responsible party will be sentenced to damages; in the
contrary case, the resolution will be affirmed, and the
consequent indemnity awarded to the party prejudiced. 32
(Emphasis supplied)
The fact that Teodoro Vao advised Frank Liu to file his claim
with the probate court is certainly not the conduct of one who
supposedly unilaterally rescinded the contract with Frank
Liu.33
In this case, there was prior delay or default by the seller. As
admitted by Teodoro Vao, he could not deliver the titles
because of a case questioning the authenticity of the will of
his father. In a letter33 to Frank Liu dated 16 October 1954,
Teodoro Vao stated:
Some time last May, if I remember correctly, you offered to
settle the whole balance of your account if I can have the
Titles transferred immediately in your brothers name, and to
that of Mr. Pangalos. I cannot blame you if you were
disappointed then, to know that I could not have the titles
transferred, even should you have paid in full. (Emphasis
supplied)
Whether the lis pendens in the Davao case served as

notice to the Loys
The lis pendens in the Davao case did not serve as notice to
the Loys. The Register of Deeds of Cebu City denied
registration of the lis pendens on 19 December 1968.35 Frank
Liu did not appeal to the Land Registration Commission 36 to
keep alive the lis pendens. Republic Act No. 1151,37 which
took effect 17 June 1954, provides:
SEC. 4. Reference of doubtful matters to Commissioner of
Land Registration. When the Register of Deeds is in doubt
with regard to the proper step to be taken or memorandum to
be made in pursuance of any deed, mortgage, or other
instrument presented to him for registration, or where any
party in interest does not agree with the Register of Deeds
with reference to any such matter, the question shall be
submitted to the Commissioner of Land Registration either
upon the certification of the Register of Deeds, stating the
question upon which he is in doubt, or upon the suggestion
in writing by the party in interest; and thereupon the
Commissioner, after consideration of the matter shown by
the records certified to him, and in case of registered lands,
after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be
made. His decision in such cases shall be conclusive and
binding upon all Registers of Deeds: Provided, however,
That when a party in interest disagrees with a ruling or
resolution of the Commissioner and the issue involves a
question of law, said decision may be appealed to the
Supreme Court within thirty days from and after receipt of the
notice thereof. (Emphasis supplied)
Frank Lius failure to appeal38 the denial of the registration
rendered the lis pendens ineffective. The Court of First
Instance of Davao City eventually dismissed Frank Lius
complaint on 3 October 1970.
In the same letter of 16 October 1954, Teodoro Vao

informed Frank Liu that the titles were ready for transfer,
thus:
Whether the registration by the Loys of their contracts of

sale made them the first registrants in good faith to
defeat prior buyers
However, last June 30, of this year, the Supreme Court,

unanimously concurred in the reversal of the decision of the
Court of First Instance, as regard the legality of the Will of
my father. Now that the Will of my Father has been declared
Legal, my opponents have lost their personality in the case,
and with it their power to harass me in court. Also, sometime
The registration by the Loys of their contracts of sale did not

defeat the right of prior buyers because the person who
signed the Loys contracts was not the registered owner. The
registered owner of Lot Nos. 5 and 6 was the "Estate of Jose
Vao." Teodoro Vao was the seller in the contract of sale
with Alfredo Loy, Jr. The Estate of Jose Vao was the seller

in the contract of sale with Teresita Loy. Teodoro Vao signed
both contracts of sale. The rule is well-settled that "one who
buys from a person who is not the registered owner is not a
purchaser in good faith."39 As held in Toledo-Banaga v. Court
of Appeals:40
To repeat, at the time of the sale, the person from whom
petitioner Tan bought the property is neither the registered
owner nor was the former authorized by the latter to sell the
same. She knew she was not dealing with the registered
owner or a representative of the latter. One who buys
property with full knowledge of the flaws and defects in the
title of his vendor is enough proof of his bad faith and cannot
claim that he acquired title in good faith as against the owner
or of an interest therein. When she nonetheless proceeded
to buy the lot, petitioner Tan gambled on the result of
litigation. She is bound by the outcome of her indifference
with no one to blame except herself if she looses her claim
as against one who has a superior right or interest over the
property. x x x.
The Loys were under notice to inquire why the land was not
registered in the name of the person who executed the
contracts of sale. They were under notice that the lots
belonged to the "Estate of Jose Vao" and any sale of the
lots required court approval. Any disposition would be
subject to the claims of creditors of the estate who filed
claims before the probate court.41
The contracts of the Loys did not convey ownership of the
lots to them as against third persons. The contracts were
binding only on the seller, Teodoro Vao. The contracts of
the Loys would become binding against third persons only
upon approval of the sale by the probate court and
registration with the Register of Deeds. Registration of the
contracts without court approval would be ineffective to bind
third persons, especially creditors of the estate. Otherwise,
this will open the door to fraud on creditors of the estate.
Whether the probate courts ex-parte approval of the
contracts of the Loys was valid
Section 8, Rule 89 of the 1964 Rules of Court 42 specifically
requires notice to all interested parties in any application for
court approval to convey property contracted by the
decedent in his lifetime. Thus:
SECTION 8. When court may authorize conveyance of realty
which deceased contracted to convey. Notice. Effect of deed.
Where the deceased was in his lifetime under contract,
binding in law, to deed real property, or an interest therein,
the court having jurisdiction of the estate may, on application
for that purpose, authorize the executor or administrator to
convey such property according to such contract, or with
such modifications as are agreed upon by the parties and
approved by the court; and if the contract is to convey real
property to the executor or administrator, the clerk of the
court shall execute the deed. The deed executed by such
executor, administrator, or clerk of court shall be as effectual
to convey the property as if executed by the deceased in his
lifetime; but no such conveyance shall be authorized until

notice of the application for that purpose has been given
personally or by mail to all persons interested, and such
further notice has been given, by publication or otherwise, as
the court deems proper; nor if the assets in the hands of the
executor or administrator will thereby be reduced so as to
prevent a creditor from receiving his full debt or diminish his
dividend. (Rule 89, 1964 Rules of Court) (Emphasis
supplied)
Despite the clear requirement of Section 8 of Rule 89, the
Loys did not notify the administratrix of the motion and
hearing to approve the sale of the lots to them. The
administratrix, who had already signed the deed of sale to
Frank Liu as directed by the same probate court, objected to
the sale of the same lots to the Loys. Thus, as found by the
trial court:
On June 3, 1976, Milagros H. Vao moved for the
reconsideration of the Order issued by Judge Ramolete on
March 19, 1976 and March 23, 1976, contending that she
had not been personally served with copies of the motions
presented to the Court by Alfredo Loy, Jr. and by Teresita Loy
seeking the approval of the sales of the lots in their favor, as
well as the Orders that were issued by the Court pursuant
thereto; that the Court in its Order of February 24, 1976 had
ordered her (Milagros H. Vao), to execute a deed of
absolute sale in favor of the plaintiff, which sale had been
approved by the Court; that she had not known of the sale of
Lots 5 and 6 to any other person except to the plaintiff; that
the sale of the two lots in favor of plaintiff was made earlier,
when there was yet no litigation with the Bureau of Internal
Revenue, while those in favor of the defendant Loys were
made when there was already a prohibition by the Court
against any sale thereof; that the sales in favor of the Loys
were made without Court authority; and that if the approval
of the sales had not been obtained ex-parte she would have
informed the Court of the complication arising therefrom, and
she would not have executed the sale in favor of plaintiff, and
she would have asked the Court to decide first as to who had
preference over said lots.43
The failure to notify the administratrix and other interested
persons rendered the sale to the Loys void. As explained by
Justice J.B.L. Reyes in De Jesus v. De Jesus:44
Section 9, Rule 90, however, provides that authority can be
given by the probate court to the administrator to convey
property held in trust by the deceased to the beneficiaries of
the trust only "after notice given as required in the last
preceding section"; i.e., that "no such conveyance shall be
authorized until notice of the application for that purpose has
been given personally or by mail to all persons interested,
and such further notice has been given, by publication or
otherwise, as the court deems proper" (sec. 8, Rule 90). This
rule makes it mandatory that notice be served on the heirs
and other interested persons of the application for approval
of any conveyance of property held in trust by the deceased,
and where no such notice is given, the order authorizing the

conveyance, as well as the conveyance itself, is completely
void. (Emphasis supplied)
Alfredo Loy, Jr., but subject to the outcome of the probate

proceedings.
In this case, the administratrix, the wife of the deceased

Teodoro Vao, was not notified of the motion and hearing to
approve the sale of the lots to the Loys. Frank Liu did not
also receive any notice, although he obviously was an
interested party. The issuance of new titles to the Loys on 10
May 1976 by the Registry of Deeds did not vest title to the
Loys because the "conveyance itself" was "completely void."
The consequences for the failure to notify the administratrix
and other interested parties must be borne by the Loys.
In Frank Lius case, as successor-in-interest of Benito Liu,

his seller was Jose Vao, who during his lifetime executed
the contract to sell through an attorney-in-fact, Teodoro
Vao. This is a disposition of property contracted by the
decedent during his lifetime. Section 8 of Rule 89 specifically
governs this sale:
Necessity of court approval of sales

Indisputably, an heir can sell his interest in the estate of the
decedent, or even his interest in specific properties of the
estate. However, for such disposition to take effect against
third parties, the court must approve such disposition to
protect the rights of creditors of the estate. What the
deceased can transfer to his heirs is only the net estate, that
is, the gross estate less the liabilities. As held in Baun v.
Heirs of Baun:45
The heir legally succeeds the deceased, from whom he
derives his right and title, but only after the liquidation of the
estate, the payment of the debts of the same, and the
adjudication of the residue of the estate of the deceased;
and in the meantime the only person in charge by law to
attend to all claims against the estate of the deceased debtor
is the executor or administrator appointed by the court.
In Opulencia v. Court of Appeals, 46 an heir agreed to convey
in a contract to sell her share in the estate then under
probate settlement. In an action for specific performance
filed by the buyers, the seller-heir resisted on the ground that
there was no approval of the contract by the probate court.
The Court ruled that the contract to sell was binding between
the parties, but subject to the outcome of the testate
proceedings. The Court declared:
x x x Consequently, although the Contract to Sell was
perfected between the petitioner (seller-heir) and private
respondents (buyers) during the pendency of the probate
proceedings, the consummation of the sale or the transfer of
ownership over the parcel of land to the private respondents
is subject to the full payment of the purchase price and to the
termination and outcome of the testate proceedings. x x x
Indeed, it is settled that the sale made by an heir of his
share in an inheritance, subject to the pending
administration, in no wise stands in the way of such
administration. (Emphasis supplied)
In Alfredo Loys case, his seller executed the contract of sale
after the death of the registered owner Jose Vao. The seller
was Teodoro Vao who sold the lot in his capacity as sole
heir of the deceased Jose Vao. Thus, Opulencia applies to
the sale of the lot to Alfredo Loy, Jr., which means that the
contract of sale was binding between Teodoro Vao and
SECTION 8. When court may authorize conveyance of realty

which deceased contracted to convey. Notice. Effect of deed.
Where the deceased was in his lifetime under contract,
binding in law, to deed real property, or an interest therein,
the court having jurisdiction of the estate may, on application
for that purpose, authorize the executor or administrator to
convey such property according to such contract, or with
such modifications as are agreed upon by the parties and
approved by the court; x x x
Thus, Frank Liu applied to the probate court for the grant of
authority to the administratrix to convey the lots in
accordance with the contract made by the decedent Jose
Vao during his lifetime. The probate court approved the
application.
In Teresita Loys case, her seller was the Estate of Jose

Vao. Teodoro Vao executed the contract of sale in his
capacity as administrator of the Estate of Jose Vao, the
registered owner of the lots. The Court has held that a sale
of estate property made by an administrator without court
authority is void and does not confer on the purchaser a title
that is available against a succeeding administrator.47
Manotok Realty, Inc. v. Court of Appeals 48 emphasizes the
need for court approval in the sale by an administrator of
estate property. The Court held in Manotok Realty:
We also find that the appellate court committed an error of
law when it held that the sale of the lot in question did not
need the approval of the probate court.
Although the Rules of Court do not specifically state that the
sale of an immovable property belonging to an estate of a
decedent, in a special proceeding, should be made with the
approval of the court, this authority is necessarily included in
its capacity as a probate court.
An administrator under the circumstances of this case
cannot enjoy blanket authority to dispose of real estate as he
pleases, especially where he ignores specific directives to
execute proper documents and get court approval for the
sales validity.
Section 91 of Act No. 496 (Land Registration Act) specifically
requires court approval for any sale of registered land by an
executor or administrator, thus:

SEC. 91. Except in case of a will devising the land to an

executor to his own use or upon some trust or giving to the
executor power to sell, no sale or transfer of registered land
shall be made by an executor or by an administrator in the
course of administration for the payment of debts or for any
other purpose, except in pursuance of an order of a court of
competent jurisdiction obtained as provided by law.
(Emphasis supplied)
Similarly, Section 88 of Presidential Decree No. 1529
(Property Registration Decree) provides:
SEC. 88. Dealings by administrator subject to court approval.
After a memorandum of the will, if any, and order allowing
the same, and letters testamentary or letters of
administration have been entered upon the certificate of title
as hereinabove provided, the executor or administrator may
alienate or encumber registered land belonging to the estate,
or any interest therein, upon approval of the court obtained
as provided by the Rules of Court. (Emphasis supplied)
may, during the pendency of a motion to set aside the

second sale, be appointed by the court when in its sound
judgment the grant of such temporary relief is reasonably
necessary to secure and protect the rights of its real owner
against any danger of loss or material injury to him arising
from the use and enjoyment thereof by another who
manifestly cannot acquire any right of dominion thereon
because the approving surrogate court had already lost
jurisdiction to authorize the further sale of such property.
(Emphasis supplied)
Similarly, in this case, the Loys cannot acquire any right of
dominion over Lot Nos. 5 and 6 because the probate court
had already lost jurisdiction to authorize the second sale of
the same lots. Moreover, the probate courts approval of the
sale to the Loys was completely void due to the failure to
notify the administratrix of the motion and hearing on the
sale.
Clearly, both the law and jurisprudence expressly require

court approval before any sale of estate property by an
executor or administrator can take effect.
Moreover, when the Loys filed in March 1976 their ex-parte
motions for approval of their contracts of sale, there was
already a prior order of the probate court dated 24 February
1976 approving the sale of Lot Nos. 5 and 6 to Frank Liu. In
fact, the administratrix had signed the deed of sale in favor of
Frank Liu on 5 March 1976 pursuant to the court approval.
This deed of sale was notarized on 5 March 1976, which
transferred ownership of Lot Nos. 5 and 6 to Frank Liu on the
same date.49
Thus, when the probate court approved the contracts of the
Loys on 19 and 23 March 1976, the probate court had
already lost jurisdiction over Lot Nos. 5 and 6 because the
lots no longer formed part of the Estate of Jose Vao.
In Dolar v. Sundiam,50 an heir sold parcels of land that were
part of the estate of the decedent. The probate court
approved the sale. Thereafter, the probate court authorized
the administrator to sell again the same parcels of land to
another person. The Court ruled that the probate court had
already lost jurisdiction to authorize the further sale of the
parcels of land to another person because such property no
longer formed part of the estate of the decedent. The Court
declared:
In our opinion, where, as in this case, a piece of property
which originally is a part of the estate of a deceased person
is sold by an heir of the deceased having a valid claim
thereto, and said piece of property is, by mistake,
subsequently inventoried or considered part of the
deceaseds estate subject to settlement, and, thereafter, with
the authority and approval of the probate court, it sold once
more to another person, a receiver of the property so sold
Whether the Loys were in good faith when they built on

the Lots.
The Civil Code describes a possessor in good faith as
follows:
Art. 526. He is deemed a possessor in good faith who is not
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in
any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be
the basis of good faith.
Art. 1127. The good faith of the possessor consists in the
reasonable belief that the person from whom he received the
thing was the owner thereof, and could transmit his
ownership.
In Duran v. Intermediate Appellate Court,51 the Court
explained possession in good faith in this manner:
Guided by previous decisions of this Court, good faith
consists in the possessors belief that the person from whom
he received the thing was the owner of the same and could
convey his title (Arriola vs. Gomez de la Serna, 14 Phil. 627).
Good faith, while it is always presumed in the absence of
proof to the contrary, requires a well-founded belief that the
person from whom title was received was himself the owner
of the land, with the right to convey it (Santiago vs. Cruz, 19

Phil. 148). There is good faith where there is an honest
intention to abstain from taking unconscientious advantage
from another (Fule vs. Legare, 7 SCRA 351).
The Loys were not in good faith when they built on the lots
because they knew that they bought from someone who was
not the registered owner. The registered owner on the TCTs
of the lots was the "Estate of Jose Vao," clearly indicating
that the sale required probate court approval. Teodoro Vao
did not show any court approval to the Loys when they
purchased the lots because there was none. To repeat, any
one who buys from a person who is not the registered owner
is not a purchaser in good faith. 52 If the Loys built on the lots
before the court approval, then they took the risk.
Contract to sell versus contract of sale
A prior contract to sell made by the decedent prevails over
the subsequent contract of sale made by the administrator
without probate court approval. The administrator cannot
unilaterally cancel a contract to sell made by the decedent in
his lifetime.53 Any cancellation must observe all legal
requisites, like written notice of cancellation based on lawful
cause.54
It is immaterial if the prior contract is a mere contract to sell
and does not immediately convey ownership. 55 If it is valid,
then it binds the estate to convey the property in accordance
with Section 8 of Rule 89 upon full payment of the
consideration.
Frank Lius contract to sell became valid and effective upon
its execution.56 The seller, Jose Vao, was then alive and
thus there was no need for court approval for the immediate
effectivity of the contract to sell. In contrast, the execution of
the contracts of sale of the Loys took place after the death of
the registered owner of the lots. The law requires court
approval for the effectivity of the Loys contracts of sale
against third parties. The probate court did not validly give
this approval since it failed to notify all interested parties of
the Loys motion for court approval of the sale. Besides, the
probate court had lost jurisdiction over the lots after it
approved the earlier sale to Frank Liu. Clearly, Frank Lius
contract to sell prevails over the Loys contracts of sale.
Whether petitioners are entitled to award of moral
damages and attorneys fees.
The Court upholds the ruling of the trial and appellate courts
that petitioners are not entitled to moral damages. Moral
damages should not enrich a complainant at the expense of
the defendant.57
Likewise, as found by the trial court and the appellate court,
there is no basis to award attorneys fees. The policy of the
law is to put no premium on the right to litigate. 58 The court
may award attorneys fees only in the instances mentioned in
Article 2208 of the Civil Code. The award of attorneys fees is
the exception rather than the rule.59 None of the instances
mentioned in Article 2208 apply to this case.
Conclusion
Since the Loys have no contract of sale validly approved by
the probate court, while Frank Liu has a contract of sale
approved by the probate court in accordance with Section 8
of Rule 89, Lot Nos. 5 and 6 belong to Frank Liu. The Estate
of Jose Vao should reimburse the Loys their payments on
Lot Nos. 5 and 6, with annual interest at 6% from 4 June
1976, the date of filing of the complaint, until finality of this
decision, and 12% thereafter until full payment.60
WHEREFORE, the Decision of the Court of Appeals is SET
ASIDE and a new one is RENDERED:
1. Declaring null and void the deeds of sale of Lot Nos. 5 and
6 executed by Teodoro Vao in favor of Alfredo Loy, Jr. and
Teresita Loy, respectively.
2.Ordering the Register of Deeds of Cebu City to cancel TCT
Nos. 64522 and 64523 and to issue a new one in the name
of petitioner Frank N. Liu;
3. Ordering the Estate of Jose Vao to reimburse to
respondent Loys the amounts paid on Lot Nos. 5 and 6, with
interest at 6% per annum from 4 June 1976 until finality of
this decision, and 12% per annum thereafter until full
payment.
SO ORDERED.
CONDE v. ABAYA
SUPREME COURT
Manila
EN BANC
G.R. No. L-4275
March 23, 1909
PAULA CONDE, plaintiff-appellee,

vs.
ROMAN ABAYA, defendant-appellant.
C. Oben for appellant.
L. Joaquin for appellee.
ARELLANO, C.J.:
From the hearing of the appeal interposed by Roman Abaya
in the special proceedings brought in the Court of First
Instance of La Laguna for the settlement of the intestate
estate and the distribution of the property of Casiano Abaya
it appears:

I. As antecedents: that Casiano Abaya, unmarried, the son of
Romualdo Abaya and Sabrina Labadia, died on the 6th of
April, 1899; that Paula Conde, as the mother of the natural
children Jose and Teopista Conde, whom the states she had
by Casiano Abaya, on the 6th of November, 1905, moved the
settlement of the said intestate succession; that an
administrator having been appointed for the said estate on
the 25th of November, 1905, Roman Abaya, a son of the
said Romualdo Abaya and Sabrina Labadia, the parents of
the late Casiano Abaya, came forward and opposed said
appointment and claimed it for himself as being the nearest
relative of the deceased; that this was granted by the court
below on the 9th of January, 1906; that on the 17th of
November, 1906, Roman Abaya moved that, after due
process of law, the court declare him to be the sole heir of
Casiano Abaya, to the exclusion of all other persons,
especially of Paula Conde, and to be therefore entitled to
take possession of all the property of said estate, and that it
be adjudicated to him; and that on November 22, 1906, the
court ordered the publication of notices for the declaration of
heirs and distribution of the property of the estate.
II. That on the 28th of November, 1906, Paula Conde, in
replying to the foregoing motion of Roman Abaya, filed a
petition wherein she stated that she acknowledged the
relationship alleged by Roman Abaya, but that she
considered that her right was superior to his and moved for a
hearing of the matter, and, in consequence of the evidence
that she intended to present she prayed that she be declared
to have preferential rights to the property left by Casiano
Abaya, and that the same be adjudicated to her together with
the corresponding products thereof.
III. That the trial was held, both parties presenting
documentary and oral evidence, and the court below entered
the following judgment:
That the administrator of the estate of Casiano Abaya should
recognize Teopista and Jose Conde as being natural children
of Casiano Abaya; that the petitioner Paula Conde should
succeed to the hereditary rights of her children with respect
to the inheritance of their deceased natural father Casiano
Abaya; and therefore, it is hereby declared that she is the
only heir to the property of the said intestate estate, to the
exclusion of the administrator, Roman Abaya.
IV. That Roman Abaya excepted to the foregoing judgment,
appealed to this court, and presented the following statement
of errors:
1. The fact that the court below found that an ordinary action
for the acknowledgment of natural children under articles
135 and 137 of the Civil Code, might be brought in special
probate proceedings.
2. The finding that after the death of a person claimed to be
an unacknowledged natural child, the mother of such
presumed natural child, as heir to the latter, may bring an
action to enforce the acknowledgment of her deceased child
in accordance with articles 135 and 137 of the Civil Code.
3. The finding in the judgment that the alleged continuos

possession of the deceased children of Paula Conde of the
status of natural children of the late Casiano Abaya, has
been fully proven in these proceedings; and
4. On the hypothesis that it was proper to adjudicate the
property of this intestate estate to Paula Conde, as
improperly found by the court below, the court erred in not
having declared that said property should be reserved in
favor of relatives of Casiano Abaya to the third degree, and
in not having previously demanded securities from Paula
Conde to guarantee the transmission of the property to those
who might fall within the reservation.
As to the first error assigned, the question is set up as to
whether in special proceedings for the administration and
distribution of an intestate estate, an action might be brought
to enforce the acknowledgment of the natural child of the
person from whom the inheritance is derived, that is to say,
whether one might appear as heir on the ground that he is a
recognized natural child of the deceased, not having been so
recognized by the deceased either voluntarily or
compulsorily by reason of a preexisting judicial decision, but
asking at the same time that, in the special proceeding itself,
he be recognized by the presumed legitimate heirs of the
deceased who claim to be entitled to the succession opened
in the special proceeding.
According to section 782 of the Code of Civil Procedure
If there shall be a controversy before the Court of First
Instance as to who the lawful heirs of the deceased person
are, or as to the distributive share to which each person is
entitled under the law, the testimony as to such controversy
shall be taken in writing by the judge, under oath, and signed
by the witness. Any party in interest whose distributive share
is affected by the determination of such controversy, may
appeal from the judgment of the Court of First Instance
determining such controversy to the Supreme Court, within
the time and in the manner provided in the last preceding
section.
This court has decided the present question in the manner
shown in the case of Juana Pimentel vs. Engracio Palanca
(5 Phil. Rep., 436.)
The main question with regard to the second error assigned,
is whether or not the mother of a natural child now
deceased, but who survived the person who, it is claimed,
was his natural father, also deceased, may bring an action
for the acknowledgment of the natural filiation in favor of
such child in order to appear in his behalf to receive the
inheritance from the person who is supposed to be his
natural father.
In order to decide in the affirmative the court below has
assigned the following as the only foundation:
In resolving a similar question Manresa says: "An
acknowledgment can only be demanded by the natural child

and his descendants whom it shall benefit, and should they
be minors or otherwise incapacitated, such person as legally
represents them; the mother may ask it in behalf of her child
so long as he is under her authority." On this point no
positive declaration has been made, undoubtedly because it
was not considered necessary. A private action is in question
and the general rule must be followed. Elsewhere the same
author adds: "It may so happen that the child dies before four
years have expired after attaining majority, or that the
document supporting his petition for acknowledgment is
discovered after his death, such death perhaps occurring
after his parents had died, as is supposed by article 137, or
during their lifetime. In any case such right of action shall
pertain to the descendants of the child whom the
acknowledgment may interest." (See Commentaries to arts.
135 and 137, Civil Code, Vol. I.)
The above doctrine, advanced by one of the most eminent
commentators of the Civil Code, lacks legal and doctrinal
foundation. The power to transmit the right of such action by
the natural child to his descendants can not be sustained
under the law, and still less to his mother.
It is without any support in law because the rule laid down in
the code is most positive, limiting in form, when establishing
the exception for the exercise of such right of action after the
death of the presumed parents, as is shown hereafter. It is
not supported by any doctrine, because up to the present
time no argument has been presented, upon which even an
approximate conclusion could be based.
Although the Civil Code considerably improved the condition
of recognized natural children, granting them rights and
actions that they did not possess under the former laws, they
were not, however, placed upon the same place as
legitimate ones. The difference that separates these two
classes of children is still great, as proven by so many
articles dealing with the rights of the family and the
succession in relation to the members thereof. It may be laid
down as legal maxim, that whatever the code does not grant
to the legitimate children, or in connection with their rights,
must still less be understood as granted to recognized
natural children or in connection with their rights. There is not
a single exception in its provisions.
If legitimacy is the attribute that constitutes the basis of the
absolute family rights of the child, the acknowledgment of the
natural child is, among illegitimate ones, that which unites
him to the family of the father or the mother who recognized
him, and affords him a participation in the rights of the family,
relatively advantageous according to whether they are alone
or whether they concur with other individuals of the family of
his purely natural father or mother.
Thus, in order to consider the spirit of the Civil Code, nothing
is more logical than to establish a comparison between an
action to claim the legitimacy, and one to enforce
acknowledgment.
ART. 118. The action to claim its legitimacy may be brought

by the child at any time of its lifetime and shall be transmitted
to its heirs, should it die during minority or in a state of
insanity. In such cases the heirs shall be allowed a period of
five years in which to institute the action.
The action already instituted by the child is transmitted by its
death to the heirs, if it has not lapsed before then.
ART. 137. The actions for the acknowledgment of natural
children can be instituted only during the life of the presumed
parents, except in the following cases:
1. If the father or mother died during the maturity of the child,
in which case the latter may institute the action before the
expiration of the first four years of its maturity.
2. If, after the death of the father or mother, some instrument,
before unknown, should be discovered in which the child is
expressly acknowledged.
In this case the action must be instituted with the six months
following the discovery of such instrument.
On this supposition the first difference that results between
one action and the other consists in that the right of action
for legitimacy lasts during the whole lifetime of the child, that
is, it can always be brought against the presumed parents or
their heirs by the child itself, while the right of action for the
acknowledgment of a natural child does not last his whole
lifetime, and, as a general rule, it can not be instituted
against the heirs of the presumed parents, inasmuch as it
can be exercised only during the life of the presumed
parents.
With regard to the question at issue, that is, the transmission
to the heirs of the presumed parents of the obligation to
admit the legitimate filiation, or to recognize the natural
filiation, there exists the most radical difference in that the
former continues during the life of the child who claims to be
legitimate, and he may demand it either directly and primarily
from the said presumed parents, or indirectly and
secondarily from the heirs of the latter; while the second
does not endure for life; as a general rule, it only lasts during
the life of the presumed parents. Hence the other difference,
derived as a consequence, that an action for legitimacy is
always brought against the heirs of the presumed parents in
case of the death of the latter, while the action for
acknowledgment is not brought against the heirs of such
parents, with the exception of the two cases prescribed by
article 137 transcribed above.
So much for the passive transmission of the obligation to
admit the legitimate filiation, or to acknowledge the natural
filiation.
As to the transmission to the heirs of the child of the latter's
action to claim his legitimacy, or to obtain the
acknowledgment of his natural filiation, it is seen that the
code grants it in the first case, but not in the second. It

contains provisions for the transmission of the right of action
which, for the purpose claiming his legitimacy inheres in the
child, but it does not say a word with regard to the
transmission of the right to obtain the acknowledgment of the
natural filiation.
Therefore, the respective corollary of each of the two abovecited articles is: (1) That the right of action which devolves
upon the child to claim his legitimacy under article 118, may
be transmitted to his heirs in certain cases designated in the
said article; (2) That the right of action for the
acknowledgment of natural children to which article 137
refers, can never be transmitted, for the reason that the code
makes no mention of it in any case, not even as an
exception.
It is most illogical and contrary to every rule of correct
interpretation, that the right of action to secure
acknowledgment by the natural child should be presumed to
be transmitted, independently, as a rule, to his heirs, while
the right of action to claim legitimacy from his predecessor is
not expressly, independently, or, as a general rule, conceded
to the heirs of the legitimate child, but only relatively and as
an exception. Consequently, the pretension that the right of
action on the part of the child to obtain the acknowledgment
of his natural filiation is transmitted to his descendants is
altogether unfounded. No legal provision exists to sustain
such pretension, nor can an argument of presumption be
based on the lesser claim when there is no basis for the
greater one, and when it is only given as an exception in
well-defined cases. It is placing the heirs of the natural child
on a better footing than the heirs of the legitimate one, when,
as a matter of fact, the position of a natural child is no better
than, no even equal to, that of a legitimate child.
From the express and precise precepts of the code the
following conclusions are derived:
The right of action that devolves upon the child to claim his
legitimacy lasts during his whole life, while the right to claim
the acknowledgment of a natural child lasts only during the
life of his presumed parents.
Inasmuch as the right of action accruing to the child to claim
his legitimacy lasts during his whole life, he may exercise it
either against the presumed parents, or their heirs; while the
right of action to secure the acknowledgment of a natural
child, since it does not last during his whole life, but depends
on that of the presumed parents, as a general rule can only
be exercised against the latter.
Usually the right of action for legitimacy devolving upon the
child is of a personal character and pertains exclusively to
him, only the child may exercise it at any time during his
lifetime. As an exception, and in three cases only, it may be
transmitted to the heirs of the child, to wit, if he died during
his minority, or while insane, or after action had been already
instituted.
An action for the acknowledgment of a natural child may, as

an exception, be exercised against the heirs of the presumed
parents in two cases: first, in the event of the death of the
latter during the minority of the child, and second, upon the
discovery of some instrument of express acknowledgment of
the child, executed by the father or mother, the existence of
which was unknown during the life of the latter.
But such action for the acknowledgment of a natural child
can only be exercised by him. It can not be transmitted to his
descendants, or his ascendants.
In support of the foregoing the following authorities may be
cited:
Sanchez Roman, in his Treatise of Civil Law, propounds the
question as to whether said action should be considered
transmissive to the heirs or descendants of the natural child,
whether he had or had not exercised it up to the time of his
death, and decides it as follows:
There is an entire absence of legal provisions, and at most, it
might be deemed admissible as a solution, that the right of
action to claim the acknowledgment of a natural child is
transmitted by the analogy to his heirs on the same
conditions and terms that it is transmitted to the descendants
of a legitimate child, to claim his legitimacy, under article 118,
but nothing more; because on this point nothing warrants
placing the heirs of a natural child on a better footing than
those of the legitimate child, and even to compare them
would not fail to be a strained and questionable matter, and
one of great difficulty for decision by the courts, for the
simple reason that for the heirs of the legitimate child, the
said article 118 exists, while for those of the natural child, as
we have said, there is no provision in the code authorizing
the same, although on the other hand there is none that
prohibits it. (Vol. V.)
Diaz Guijarro and Martinez Ruiz in their work on "The Civil
Code as construed by the supreme court of Spain,"
commenting upon article 137, say:
Article 118, taking into account the privileges due to the
legitimacy of children, grants them the right to claim said
legitimacy during their lifetime, and even authorizes the
transmission of said right for the space of five years to the
heirs thereof, if the child die during his minority or in a state
of insanity. But as article 137 is based on the consideration
that in the case of a natural child, ties are less strong and
sacred in the eyes of the law, it does not fix such a long and
indefinite period for the exercise of the action; it limits it to
the life of the parents, excepting in the two cases mentioned
in said article; and it does not allow, as does article 118, the
action to pass on to the heirs, inasmuch as, although it does
not prohibit it, and for that reason it might be deemed on
general principles of law to consent to it, such a supposition
is inadmissible for the reason that a comparison of both
articles shows that the silence of the law in the latter case is
not, nor it can be, an omission, but a deliberate intent to

establish a wide difference between the advantages granted
to a legitimate child and to a natural one.
(Ibid., Vol. II, 171.)
Navarro Amandi (Cuestionario del Cdigo Civil) raises the
question: "Can the heirs of a natural child claim the
acknowledgment in those cases wherein the father or mother
are under obligation to acknowledge"? And says:
Opinions are widely divergent. The court of Rennes held (on
April 13, 1844) that the right of investigation forms a part of
the estate of the child, and along with his patrimony is
transmitted to his heirs. The affirmation is altogether too
categorical to be admissible. If it were correct the same thing
would happen as when the legitimacy of a child is claimed,
and as already seen, the right of action to demand the
legitimacy is not transmitted to the heirs in every case and as
an absolute right, but under certain limitations and
circumstances. Now, were we to admit the doctrine of the
court of Rennes, the result would be that the claim for natural
filiation would be more favored than one for legitimate
filiation. This would be absurd, because it can not be
conceived that the legislator should have granted a right of
action to the heirs of the natural child, which is only granted
under great limitations and in very few cases to those of a
legitimate one. Some persons insist that the same rules that
govern legitimate filiation apply by analogy to natural child
are entitled to claim it in the cases prescribed by the article
118. The majority, however, are inclined to consider the right
to claim acknowledgment as a personal right, and
consequently, not transmissive to the heirs. Really there are
no legal grounds to warrant the transmission. (Vol. 2, 229.)
In a decision like the present one it is impossible to bring
forward the argument of analogy for the purpose of
considering that the heirs of the natural child are entitled to
the right of action which article 118 concedes to the heirs of
the legitimate child. The existence of a provision for the one
case and the absence thereof for the other is a conclusive
argument that inclusio unius est exclusio alterius, and it can
not be understood that the provision of law should be the
same when the same reason does not hold in the one case
as in the other.
The theory of law of transmission is also entirely inapplicable
in this case. This theory, which in the Roman Law expressed
the general rule than an heir who did not accept an
inheritance during his lifetime was incapacitated from
transmitting it to his own heirs, included at the same time the
idea that if the inheritance was not transmitted because the
heir did not possess it, there were, however, certain things
which the heir held and could transmit. Such was the law
and the right to accept the inheritance, for the existing
reason that all rights, both real and personal, shall pass to
the heir; quia haeres representat defunctum in omnibus et
per omnia. According to the article 659 of the Civil Code, "the
inheritance includes all the property, rights, and obligations of
a person, which are not extinguished by his death." If the
mother is the heir of her natural child, and the latter, among
other rights during his lifetime was entitled to exercise an

action of his acknowledgment against his father, during the
life of the latter, if after his death in some of the excepting
cases of article 137, such right, which is a portion of his
inheritance, is transmitted to his mother as being his heir,
and it was so understood by the court of Rennes when it
considered the right in question, not as a personal and
exclusive right of the child which is extinguished by his
death, but a any other right which might be transmitted after
his death. This right of supposed transmission is even less
tenable than that sought to be sustained by the argument of
analogy.
The right of action pertaining to the child to claim his
legitimacy is in all respects superior to that of the child who
claims acknowledgment as a natural child. And it is evident
that the right of action to claim his legitimacy is not one of
those rights which the legitimate child may transmit by
inheritance to his heirs; it forms no part of the component
rights of his inheritance. If it were so, there would have been
no necessity to establish its transmissibility to heirs as an
exception in the terms and conditions of article 118 of the
code. So that, in order that it may constitute a portion of the
child's inheritance, it is necessary that the conditions and the
terms contained in article 118 shall be present, since without
them, the right that the child held during his lifetime, being
personal and exclusive in principle, and therefore, as a
general rule not susceptible of transmission, would and
should have been extinguished by his death. Therefore,
where no express provision like that of article 118 exists, the
right of action for the acknowledgment of a natural child is, in
principle and without exception, extinguished by his death,
and can not be transmitted as a portion of the inheritance of
the deceased child.
On the other hand, if said right of action formed a part of the
child's inheritance, it would be necessary to establish the
doctrine that the right to claim such an acknowledgment from
the presumed natural father and from his heirs is an absolute
right of the heirs of the child, not limited by certain
circumstances as in the case of the heirs of a natural child
with a legitimate one to place the heirs of a natural child and
his inheritance on a better footing than those of a legitimate
child would not only be unreasonable, but, as stated in one
of the above citations, most absurd and illegal in the present
state of the law and in accordance with the general principles
thereof.
For all of the foregoing reasons we hereby reverse the
judgment appealed from in all its parts, without any special
ruling as to the costs of this instance.
JUNIO v. COLLECTOR
XXXXX
GREAT PACIFIC LIFE ASSURANCE CORP. v. CA

SUPREME COURT
Manila
8. Are you now, to the best of your knowledge, in good

health?
Answer: [x] Yes [ ] NO. 4
SECOND DIVISION
G.R. No. 113899 October 13, 1999
GREAT PACIFIC LIFE ASSURANCE CORP., petitioner,
vs.
COURT OF APPEALS AND MEDARDA V. LEUTERIO,
respondents.
QUISUMBING, J.:
This petition for review, under Rule 45 of the Rules of Court,
assails the Decision 1 dated May 17, 1993, of the Court of
Appeals and its Resolution 2 dated January 4, 1994 in CAG.R. CV No. 18341. The appellate court affirmed in toto the
judgment of the Misamis Oriental Regional Trial Court,
Branch 18, in an insurance claim filed by private respondent
against Great Pacific Life Assurance Co. The dispositive
portion of the trial court's decision reads:
WHEREFORE, judgment is rendered adjudging the
defendant
GREAT
PACIFIC
LIFE
ASSURANCE
CORPORATION as insurer under its Group policy No. G1907, in relation to Certification B-18558 liable and ordered
to pay to the DEVELOPMENT BANK OF THE PHILIPPINES
as creditor of the insured Dr. Wilfredo Leuterio, the amount
of EIGHTY SIX THOUSAND TWO HUNDRED PESOS
(P86,200.00); dismissing the claims for damages, attorney's
fees and litigation expenses in the complaint and
counterclaim, with costs against the defendant and
dismissing the complaint in respect to the plaintiffs, other
than the widow-beneficiary, for lack of cause of action. 3
The facts, as found by the Court of Appeals, are as follows:
A contract of group life insurance was executed between
petitioner Great Pacific Life Assurance Corporation
(hereinafter Grepalife) and Development Bank of the
Philippines (hereinafter DBP). Grepalife agreed to insure the
lives of eligible housing loan mortgagors of DBP.
On November 11, 1983, Dr. Wilfredo Leuterio, a physician
and a housing debtor of DBP applied for membership in the
group life insurance plan. In an application form, Dr. Leuterio
answered questions concerning his health condition as
follows:
7. Have you ever had, or consulted, a physician for a heart
condition, high blood pressure, cancer, diabetes, lung;
kidney or stomach disorder or any other physical
impairment?
Answer: No. If so give details _____________.
On November 15, 1983, Grepalife issued Certificate No. B18558, as insurance coverage of Dr. Leuterio, to the extent
of his DBP mortgage indebtedness amounting to eighty-six
thousand, two hundred (P86,200.00) pesos.1wphi1.nt
On August 6, 1984, Dr. Leuterio died due to "massive
cerebral hemorrhage." Consequently, DBP submitted a death
claim to Grepalife. Grepalife denied the claim alleging that
Dr. Leuterio was not physically healthy when he applied for
an insurance coverage on November 15, 1983. Grepalife
insisted that Dr. Leuterio did not disclose he had been
suffering from hypertension, which caused his death.
Allegedly, such non-disclosure constituted concealment that
justified the denial of the claim.
On October 20, 1986, the widow of the late Dr. Leuterio,
respondent Medarda V. Leuterio, filed a complaint with the
Regional Trial Court of Misamis Oriental, Branch 18, against
Grepalife for "Specific Performance with Damages." 5 During
the trial, Dr. Hernando Mejia, who issued the death
certificate, was called to testify. Dr. Mejia's findings, based
partly from the information given by the respondent widow,
stated that Dr. Leuterio complained of headaches
presumably due to high blood pressure. The inference was
not conclusive because Dr. Leuterio was not autopsied,
hence, other causes were not ruled out.
On February 22, 1988, the trial court rendered a decision in
favor of respondent widow and against Grepalife. On May
17, 1993, the Court of Appeals sustained the trial court's
decision. Hence, the present petition. Petitioners interposed
the following assigned errors:
1. THE LOWER COURT ERRED IN HOLDING
DEFENDANT-APPELLANT
LIABLE
TO
THE
DEVELOPMENT BANK OF THE PHILIPPINES (DBP)
WHICH IS NOT A PARTY TO THE CASE FOR PAYMENT
OF THE PROCEEDS OF A MORTGAGE REDEMPTION
INSURANCE ON THE LIFE OF PLAINTIFF'S HUSBAND
WILFREDO LEUTERIO ONE OF ITS LOAN BORROWERS,
INSTEAD OF DISMISSING THE CASE AGAINST
DEFENDANT-APPELLANT [Petitioner Grepalife] FOR LACK
OF CAUSE OF ACTION.
2. THE LOWER COURT ERRED IN NOT DISMISSING THE
CASE FOR WANT OF JURISDICTION OVER THE
SUBJECT OR NATURE OF THE ACTION AND OVER THE
PERSON OF THE DEFENDANT.
3. THE LOWER COURT ERRED IN ORDERING
DEFENDANT-APPELLANT TO PAY TO DBP THE AMOUNT
OF P86,200.00 IN THE ABSENCE OF ANY EVIDENCE TO
SHOW HOW MUCH WAS THE ACTUAL AMOUNT
PAYABLE TO DBP IN ACCORDANCE WITH ITS GROUP

INSURANCE
APPELLANT.
CONTRACT
WITH
DEFENDANT-
4. THE LOWER COURT ERRED IN HOLDING THAT

THERE WAS NO CONCEALMENT OF MATERIAL
INFORMATION ON THE PART OF WILFREDO LEUTERIO
IN HIS APPLICATION FOR MEMBERSHIP IN THE GROUP
LIFE INSURANCE PLAN BETWEEN DEFENDANTAPPELLANT OF THE INSURANCE CLAIM ARISING FROM
THE DEATH OF WILFREDO LEUTERIO. 6
Synthesized below are the assigned errors for our resolution:
1. Whether the Court of Appeals erred in holding petitioner
liable to DBP as beneficiary in a group life insurance contract
from a complaint filed by the widow of the
decedent/mortgagor?
2. Whether the Court of Appeals erred in not finding that Dr.
Leuterio concealed that he had hypertension, which would
vitiate the insurance contract?
3. Whether the Court of Appeals erred in holding Grepalife
liable in the amount of eighty six thousand, two hundred
(P86,200.00) pesos without proof of the actual outstanding
mortgage payable by the mortgagor to DBP.
Petitioner alleges that the complaint was instituted by the
widow of Dr. Leuterio, not the real party in interest, hence the
trial court acquired no jurisdiction over the case. It argues
that when the Court of Appeals affirmed the trial court's
judgment, Grepalife was held liable to pay the proceeds of
insurance contract in favor of DBP, the indispensable party
who was not joined in the suit.
To resolve the issue, we must consider the insurable interest
in mortgaged properties and the parties to this type of
contract. The rationale of a group insurance policy of
mortgagors, otherwise known as the "mortgage redemption
insurance," is a device for the protection of both the
mortgagee and the mortgagor. On the part of the mortgagee,
it has to enter into such form of contract so that in the event
of the unexpected demise of the mortgagor during the
subsistence of the mortgage contract, the proceeds from
such insurance will be applied to the payment of the
mortgage debt, thereby relieving the heirs of the mortgagor
from paying the obligation. 7 In a similar vein, ample
protection is given to the mortgagor under such a concept so
that in the event of death; the mortgage obligation will be
extinguished by the application of the insurance proceeds to
the mortgage indebtedness. 8 Consequently, where the
mortgagor pays the insurance premium under the group
insurance policy, making the loss payable to the mortgagee,
the insurance is on the mortgagor's interest, and the
mortgagor continues to be a party to the contract. In this type
of policy insurance, the mortgagee is simply an appointee of
the insurance fund, such loss-payable clause does not make
the mortgagee a party to the contract. 9
Sec. 8 of the Insurance Code provides:
Unless the policy provides, where a mortgagor of property

effects insurance in his own name providing that the loss
shall be payable to the mortgagee, or assigns a policy of
insurance to a mortgagee, the insurance is deemed to be
upon the interest of the mortgagor, who does not cease to be
a party to the original contract, and any act of his, prior to the
loss, which would otherwise avoid the insurance, will have
the same effect, although the property is in the hands of the
mortgagee, but any act which, under the contract of
insurance, is to be performed by the mortgagor, may be
performed by the mortgagee therein named, with the same
effect as if it had been performed by the mortgagor.
The insured private respondent did not cede to the
mortgagee all his rights or interests in the insurance, the
policy stating that: "In the event of the debtor's death before
his indebtedness with the Creditor [DBP] shall have been
fully paid, an amount to pay the outstanding indebtedness
shall first be paid to the creditor and the balance of sum
assured, if there is any, shall then be paid to the
beneficiary/ies designated by the debtor." 10 When DBP
submitted the insurance claim against petitioner, the latter
denied payment thereof, interposing the defense of
concealment committed by the insured. Thereafter, DBP
collected the debt from the mortgagor and took the
necessary action of foreclosure on the residential lot of
private respondent. 11 In Gonzales La O vs. Yek Tong Lin
Fire & Marine Ins. Co. 12 we held:
Insured, being the person with whom the contract was made,
is primarily the proper person to bring suit thereon. * * *
Subject to some exceptions, insured may thus sue, although
the policy is taken wholly or in part for the benefit of another
person named or unnamed, and although it is expressly
made payable to another as his interest may appear or
otherwise. * * * Although a policy issued to a mortgagor is
taken out for the benefit of the mortgagee and is made
payable to him, yet the mortgagor may sue thereon in his
own name, especially where the mortgagee's interest is less
than the full amount recoverable under the policy, * * *.
And in volume 33, page 82, of the same work, we read the
following:
Insured may be regarded as the real party in interest,
although he has assigned the policy for the purpose of
collection, or has assigned as collateral security any
judgment he may obtain. 13
And since a policy of insurance upon life or health may pass
by transfer, will or succession to any person, whether he has
an insurable interest or not, and such person may recover it
whatever the insured might have recovered, 14 the widow of
the decedent Dr. Leuterio may file the suit against the
insurer, Grepalife.
The second assigned error refers to an alleged concealment
that the petitioner interposed as its defense to annul the
insurance contract. Petitioner contends that Dr. Leuterio
failed to disclose that he had hypertension, which might have

caused his death. Concealment exists where the assured
had knowledge of a fact material to the risk, and honesty,
good faith, and fair dealing requires that he should
communicate it to the assured, but he designedly and
intentionally withholds the same. 15
Petitioner merely relied on the testimony of the attending
physician, Dr. Hernando Mejia, as supported by the
information given by the widow of the decedent. Grepalife
asserts that Dr. Mejia's technical diagnosis of the cause of
death of Dr. Leuterio was a duly documented hospital record,
and that the widow's declaration that her husband had
"possible hypertension several years ago" should not be
considered as hearsay, but as part of res gestae.
On the contrary the medical findings were not conclusive
because Dr. Mejia did not conduct an autopsy on the body of
the decedent. As the attending physician, Dr. Mejia stated
that he had no knowledge of Dr. Leuterio's any previous
hospital confinement. 16 Dr. Leuterio's death certificate stated
that hypertension was only "the possible cause of death."
The private respondent's statement, as to the medical history
of her husband, was due to her unreliable recollection of
events. Hence, the statement of the physician was properly
considered by the trial court as hearsay.
The question of whether there was concealment was aptly
answered by the appellate court, thus:
The insured, Dr. Leuterio, had answered in his insurance
application that he was in good health and that he had not
consulted a doctor or any of the enumerated ailments,
including hypertension; when he died the attending physician
had certified in the death certificate that the former died of
cerebral hemorrhage, probably secondary to hypertension.
From this report, the appellant insurance company refused to
pay the insurance claim. Appellant alleged that the insured
had concealed the fact that he had hypertension.
Contrary to appellant's allegations, there was no sufficient
proof that the insured had suffered from hypertension. Aside
from the statement of the insured's widow who was not even
sure if the medicines taken by Dr. Leuterio were for
hypertension, the appellant had not proven nor produced any
witness who could attest to Dr. Leuterio's medical history . . .
xxx xxx xxx
Appellant insurance company had failed to establish that
there was concealment made by the insured, hence, it
cannot refuse payment of the claim. 17
The fraudulent intent on the part of the insured must be
established to entitle the insurer to rescind the contract. 18
Misrepresentation as a defense of the insurer to avoid
liability is an affirmative defense and the duty to establish
such defense by satisfactory and convincing evidence rests
upon the insurer. 19 In the case at bar, the petitioner failed to
clearly and satisfactorily establish its defense, and is
therefore
liable to
insurance.1wphi1.nt
pay
the
proceeds
of
the
And that brings us to the last point in the review of the case
at bar. Petitioner claims that there was no evidence as to the
amount of Dr. Leuterio's outstanding indebtedness to DBP at
the time of the mortgagor's death. Hence, for private
respondent's failure to establish the same, the action for
specific performance should be dismissed. Petitioner's claim
is without merit. A life insurance policy is a valued policy. 20
Unless the interest of a person insured is susceptible of
exact pecuniary measurement, the measure of indemnity
under a policy of insurance upon life or health is the sum
fixed in the policy. 21 The mortgagor paid the premium
according to the coverage of his insurance, which states
that:
The policy states that upon receipt of due proof of the
Debtor's death during the terms of this insurance, a death
benefit in the amount of P86,200.00 shall be paid.
In the event of the debtor's death before his indebtedness
with the creditor shall have been fully paid, an amount to pay
the outstanding indebtedness shall first be paid to the
Creditor and the balance of the Sum Assured, if there is any
shall then be paid to the beneficiary/ies designated by the
debtor." 22 (Emphasis omitted)
However, we noted that the Court of Appeals' decision was
promulgated on May 17, 1993. In private respondent's
memorandum, she states that DBP foreclosed in 1995 their
residential lot, in satisfaction of mortgagor's outstanding loan.
Considering this supervening event, the insurance proceeds
shall inure to the benefit of the heirs of the deceased person
or his beneficiaries. Equity dictates that DBP should not
unjustly enrich itself at the expense of another (Nemo cum
alterius detrimenio protest). Hence, it cannot collect the
insurance proceeds, after it already foreclosed on the
mortgage. The proceeds now rightly belong to Dr. Leuterio's
heirs represented by his widow, herein private respondent
Medarda Leuterio.
WHEREFORE, the petition is hereby DENIED. The Decision
and Resolution of the Court of Appeals in CA-G.R. CV 18341
is AFFIRMED with MODIFICATION that the petitioner is
ORDERED to pay the insurance proceeds amounting to
Eighty-six thousand, two hundred (P86,200.00) pesos to the
heirs of the insured, Dr. Wilfredo Leuterio (deceased), upon
presentation of proof of prior settlement of mortgagor's
indebtedness to Development Bank of the Philippines. Costs
against petitioner.1wphi1.nt
SO ORDERED.
ROBLES v. BATACAN
SUPREME COURT
Manila

FIRST DIVISION
G.R. No. L-46978
October 12, 1987
ERNESTO ROBLES, petitioner,

vs.
HON. DELFIN FL. BATACAN, HON. CONRADO M.
VASQUEZ, HON. JOSE B. JIMENEZ. ATANACIO
GERONIMO and BENEDICTO GERONIMO, respondents.
CRUZ, J.:
The central figure in this case is Severino Geronimo, who
worked in the petitioner's land for twenty years until 1969
and died the following year at the age of 86. The central
question in this case is the nature of the work he performed
and the compensation he was supposed to receive.
After his death, an ejectment suit was filed against his two
sons by the petitioner, who claimed they had no right to
remain in his land.1 Benedicto Geronimo did not choose to
answer and so was declared in default. 2 The other
defendant. Atanacio Geronimo, averred that he was entitled
to succeed his father as the petitioner's agricultural tenant in
accordance with R.A. No. 1199 and Section 9 of R.A. No.
3844.
The private respondent's position is that his father was an
agricultural tenant of the petitioner during the twenty years
the former worked in the latter"s land. Hence, in accordance
with the aforementioned laws, he could remain in the
petitioner"s land under the same terms and conditions of the
original tenancy share arrangement entered into between his
father and the petitioner. His share should also be P100.00
more or less per harvest every forty days during the time he
continued discharging his father"s work as his statutory
successor. 3
The petitioner, for his part, insists that Severino Geronimo
was never an agricultural tenant of his but worked merely as
a watcher in his land. He did receive the sum of P100.00
every harvest but not as his share therein for that amount
was given to him as a reward for his past services. The only
work he did was watch over the petitioner"s land and make
brooms out of the fallen coconut leaves he would gather. He
sold these brooms and kept the proceeds for himself without
sharing them with the petitioner. 4
After trial, the Court of Agrarian Relations * rendered
judgment recognizing the defendant as the agricultural
tenant of the plaintiff and ordering the payment to him of the
sum of P12,000.00 as his tenancy share. 5 Not satisfied, the
petitioner went to the Court of Appeals, ** which affirmed the
challenged decision in toto. 6 The petitioner is now before us
and faults the respondent court with grave abuse of
discretion for upholding the trial court.
We do not agree that the respondent court erred. On the

contrary, we find that its findings are supported by the
evidence of record and in accord with the applicable law and
doctrine.
Thus, on the nature of the work performed by Severino
Geronimo, it quoted with approval the conclusion of the trial
court that he "was the tenant on the subject parcel for quite a
time and was recognized by Ernesto Robles as such,"
discharging such tasks as supervising the harvest, cutting
down bushes, clearing the land, picking up the fallen nuts,
and paying the laborers, like the coconut gatherers and
huskers, from his 1/3 share. 7 This was based on the
declarations of several witnesses, 8 including the petitioner
himself, and the several documents presented by Atanacio in
which his father was described by the petitioner as his
"kasama" to whom was being given his "bahagui" or share. 9
As for the private respondent's right to succeed his father,
the respondent court was correct in affirming the ruling of the
trial court that, as the son of Severino Geronimo, Atanacio
had the right to take over as agricultural tenant in the
petitioner"s land in accordance with R.A. No. 1199 and R.A.
No. 3844.10 Obviously, Atanacio was the only heir interested
in succeeding his father as his brother, Benedicto, had not
seen fit to claim his right and in fact defaulted in resisting the
petitioner"s claims in the ejectment suit. Significantly, when
in his prayer the petitioner asks for authority to appoint the
said Benedicto to succeed his father, it is presumably as his
watcher only and not as agricultural tenant. The petitioner"s
consistent claim, it should be noted, is that Severino
Geronimo was not his tenant but only his watcher.
The Court gave cited due course to this petition to enable the
parties to argue on the amount of damages in view of the
apparent lack of a credible basis therefor as observed by the
trial court. 11 In his memorandum, the petitioner says the
basis should be the weight of the coconut harvested and
then, consistent with his main thesis, urges that no damages
should be awarded at all.12 The private respondent says
that the basis should be the number of nuts harvested and
then asks that the damages be doubled.13 In his reply,
realizing probably that the matter may have gotten out of
hand, the petitioner now counters that the private respondent
cannot claim an increase in the amount of damages because
he has not, providentially, appealed the same. 14 This is
correct and estops the private respondent.
In La Mallorca v. Court of Appeals,15 the Court said:
The increase of the award of damages from P3,000.00 to
P6,000.00 by the Court of Appeals, however, cannot be
sustained. Generally, the Appellate Court can only pass upon
the consider questions or issues raised and argued in
appellant"s brief, plaintiff did not appeal from that portion of
judgment of the trial court awarding them damages. Neither
does it appear that, as appellees to the Court of Appeals,
plaintiffs have pointed out in their brief inadequacy of the
award or that the inclusion of the figure P3,000.00 was
merely a clerical error, in order that the matter may be

treated as an exception to the general rule. Thus, the court of
Appeals committed error in raising the amount for damages.
QUISUMBING, J.:
In Dy v. Kuizon, 16 we declared:
It is a well-settled rule in this jurisdiction that whenever an
appeal is taken in a civil case, an appellee who has not
himself appealed cannot obtain from the appellate court any
affirmative relief other than the ones granted in the decision
of the court below. An appellee who is not appellant may
assign errors in his brief where his purpose is to maintain the
judgment on other grounds, but he may not do so if this
purpose is to have the judgment modified or reversed for, in
such a case, he must appeal. Here, the respondent did not
appeal and so it was error for the Court of Appeals to award
him a relief not granted by the lower court.
In Madrideo v. Hon. Court of Appeals, 17 our ruling was:
... whenever an appeal is taken in a civil case, an appellee
who has not appealed cannot obtain from the appellate court
any affirmative relief other than the ones granted in the
decision of the court below.
The latest decision on this matter is Aguilar v. Chan,18
where the Court noted that although the actual damages
suffered by the plaintiff-appellee exceeded the amount
awarded to her by the lower court, this amount could not be
increased because she had not appealed.
This petition for review on certiorari seeks the reversal of the

decision 1 of the Court of Appeals dated May 19, 1995,
affirming that of the Regional Trial Court in LRC Case No. R4659.
The relevant facts, as summarized by the CA, are as follows:
On February 11, 1974, the Government Service Insurance
System (GSIS) sold to a certain Macaria Vda. de Caiquep, a
parcel of residential land with an area of 168 square meters
located in Rosario, Pasig City and denominated as Lot 13,
Block 7, Pcs-5816 of the Government Service and Insurance
System Low Cost Housing Project (GSIS-LCHP). The sale is
evidenced by a Deed of Absolute Sale. 2 On February 19,
1974, the Register of Deeds of Rizal issued in the name of
Macaria Vda. de Caiquep. Transfer Certificate of Title (TCT)
No. 436465 with the following encumbrance annotated at the
back of the title:
This Deed of Absolute Sale is subject to the conditions
enumerated below which shall be permanent encumbrances
on the property, the violation of any of which shall entitle the
vendor to cancel x x x. this Deed of Absolute Sale and
reenter the property;
WHEREFORE, the petition is DENIED, with costs against

the petitioner. This decision is immediately executory.
The purpose of the sale be to aid the vendee in acquiring a

lot for himself/themselves and not to provide him/them with a
means for speculation or profit by a future assignment of
his/their right herein acquired or the resale of the lot through
rent, lease or subletting to others of the lot and subject of this
deed, and therefore, the vendee shall not sell, convey, lease
or sublease, or otherwise encumber the property in favor of
any other party within five (5) years from the dates final and
absolute ownership thereof becomes vested in the vendee,
except in cases of hereditary succession or resale in favor of
the vendor:
SO ORDERED.
x x x (emphasis supplied).3
The trial court had the opportunity to assess the evidence

first-hand and so was in the best position to determine the
factual relationship between the parties as well as the share
to which the private respondent was entitled. We do not find
that the respondent court committed grave abuse of
discretion in affirming the decision of the court a quo and see
no reason to reverse it. We too affirm.
SAN AGUSTIN v. CA
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 121940
December 4, 2001
JESUS SAN AGUSTIN, petitioner,

vs.
HON. COURT OF APPEALS and MAXIMO MENEZ, JR.,
respondents.
A day after We issuance of TCT No. 436465, or on February

20, 1974, Macaria Vda. de Caiquep sold the subject lot to
private respondent, Maximo Menez, Jr., as evidenced by a
Deed of Absolute Sale (Exhibit "D").4 This deed was
notarized but was not registered immediately upon its
execution in 1974 because GSIS prohibited him from
registering the same in view of the five-year prohibition to
sell during the period ending in 1979.
Sometime in 1979, for being suspected as a subversive, an
Arrest, Search and Seizure Order (ASSO) was issued
against private respondent. Military men ransacked his
house in Cainta, Rizal. Upon learning that he was wanted by
the military, he voluntarily surrendered and was detained for
two (2) years. When released, another order for his re-arrest
was issued so he hid in Mindanao for another four (4) years
or until March 1984. In December of 1990, he discovered

that the subject TCT was missing. He consulted a lawyer but
the latter did not act immediately on the matter. Upon
consulting a new counsel, an Affidavit of Loss 5 was filed with
the Register of Deeds of Pasig and a certified copy6 of TCT
No. 436465 was issued. Private respondent also declared
the property for tax purposes and obtained a certification
thereof from the Assessor's Office.7
Private respondent sent notices to the registered owner at
her address appearing in the title and in the Deed of Sale.
And, with his counsel, he searched for the ,registered owner
in Metro Manila and Rizal and as far as Samar, Leyte,
Calbayog City, Tacloban City, and in Eastern and Northern
Samar. However, their search proved futile.
On July 8, 1992 private respondent filed a petition docketed
as LRC Case No. R-4659 with the RTC, Branch 154, Pasig,
Metro Manila for the issuance of owner's duplicate copy of
TCT No. 436465 to replace the lost one. To show he was the
owner of the contested lot, he showed the Deed of Absolute
Sale, Exhibit "D". The petition was set for hearing and the
court's order dated July 10, 1992 was published once in
Malaya, a nationally circulated newspaper in the Philippines.8
During the hearing on September 3, 1992, only Menez and
his counsel appeared. The Register of Deeds who was not
served notice, and the Office of the Solicitor General and the
Provincial Prosecutor who were notified did not attend.
On September 18, 1992, there being no opposition, Menez
presented his evidence ex-parte. The trial court granted his
petition in its decision9 dated September 30, 1992, the
dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the
Registry of Deeds of Pasig, Metro Manila, is hereby directed
to issue a new Owner's Duplicate Copy of Transfer
Certificate of Title No. 436465 based on the original thereon
filed in his office which shall contain the memorandum of
encumbrance and an additional memorandum of the fact that
it was issued in place of the lost duplicate and which shall, in
all respect, be entitled to like faith and credit as the original
duplicate, for all legal intents and purposes.
On October 13, 1992, herein petitioner, Jesus San Agustin,

received a copy of the abovecited decision. He-claimed this
was the first time he became aware of the case of her aunt,
Macaria Vda. de Caiquep who, according to him, died
sometime in 1974. Claiming that he was the present
occupant of the property and the heir of Macaria, he filed his
"Motion to Reopen Reconstitution Proceedings''11 on October
27, 1992. On December 3, 1992, RTC issued an order
denying said motion.12
Petitioner filed an appeal with the Court of Appeals, which,
as earlier stated, was denied in its decision of May 19, 1995.
Petitioner moved for a reconsideration, but it was denied in a
resolution dated September 11, 1995.13
Thus, the present petition, attributing the following errors to
the court a quo:
A.
THE RESPONDENT COURT GRAVELY ERRED IN
HOLDING THAT LRC CASE NO. R-4659 BEING ONLY A
PETITION FOR THE ISSUANCE OF A NEW OWNER'S
DUPLICATE OF TITLE, THERE IS NO NEED OF
PERSONAL NOTICE TO THE PETITIONER, THE ACTUAL
POSSESSOR [WHO HAS] AND ACTUALLY BEEN PAYING
THE
REAL
ESTATE
TAX,
DESPITE
PRIVATE
RESPONDENT'S
KNOWLEDGE
OF
ACTUAL
POSSESSION OF AND INTEREST OVER THE PROPERTY
COVERED BY TCT NO. 436465.14
B.
RESPONDENT COURT GRAVELY ERRED IN HOLDING
THAT THE SALE BETWEEN THE PRIVATE RESPONDENT
AND MACARIA VDA. DE CAIQUEP IS NOT NULL AND
VOID AND UNDER ARTICLE 1409 OF THE CIVIL CODE
SPECIFICALLY PARAGRAPH (7) THEREOF WHICH
REFERS TO CONTRACTS EXPRESSLY PROHIBITED OR
DECLARED VOID BY LAW.15
Considering the above assignment of errors, let us resolve
the corresponding issues raised by petitioner.
Issuance of new owner's duplicate copy shall be made only

after this decision shall have become final and executory.
The said lost owner's duplicate is hereby declared null and
void.
The first issue involves private respondent's alleged failure to

send notice to petitioner who is the actual possessor of the
disputed lot. Stated briefly, is petitioner entitled to notice?
Our finding is in the negative.
Petitioner shall pay all legal fees in connection with the

issuance of the new owner's copy.
Presidential Decree No. 1529, otherwise known as the

"Property Registration Decree" is decisive. It provides:
Let copies of this Order be furnished the petitioner, the

registered owner of his given address in the title, in the deed
of sale, and in the tax declaration; the Registry of Deeds of
Pasig, the Office of the Solicitor General; and the Provincial
Fiscal of Pasig, Metro Manila.
Sec. 109. Notice and replacement of lost duplicate

certificate. In case of loss or theft of an owner's duplicate
certificate of title, due notice under oath shall be sent by the
owner or by someone in his behalf to the Register of Deeds
of the province or city where the land lies as soon as the loss
or theft is discovered. If a duplicate certificate is lost or
destroyed, or cannot be produced by a person applying for
SO ORDERED.10

the entry of a new certificate to him or for :the registration of
any instrument, a sworn statement of the fact of such loss or
destruction may be filed by the registered owner or other
person it interest and registered.
Upon the petition of the registered owner or other person in
interest, the court may, after notice and due hearing, direct
the issuance of a new duplicate certificate, which shall
contain a memorandum of the fact that it is issued in place of
the lost duplicate certificate, but shall in all respects be
entitled to like faith and credit as the original duplicate, and
shall thereafter be regarded as such for all purposes of this
decree.
In Office of Court Administrator vs. Matas, A.M. No. RTJ-92836, 247 SCRA 9, 16-17 (1995), we held:
In the case at bar, the respective certificate of title of the
properties in question on file with the Register of Deeds are
existing, and it is the owner's copy of the certificate of title
that was alleged to have been lost or destroyed. Thus, it is
Section 109 of P.D. 1529 which was approved on June 11,
1978 that becomes effective and is applicable, a reading of
which shows that it is practically the same as Section 109 of
Act No. 496, governing reconstitution of a duplicate
certificate of title lost or destroyed. Consequently, it is
sufficient that the notice under Section 109 is sent to the
Register of Deeds and to those persons who are known to
have, or appear to have, an interest in the property as shown
in the Memorandum of encumbrances at the back of the
original or transfer certificate of title on file in the office of the
Register of Deeds. From a legal standpoint, there are no
other interested parties who should be notified, except those
abovementioned since they are the only ones who may be
deemed to have a claim to the property involved. A person
dealing with registered is not charged with notice of
encumbrances not annotated on the back of the title.
(Emphasis supplied.)
Here, petitioner does not appear to have an interest in the
property based on the memorandum of encumbrances
annotated at the back of the title. His claim, that he is an heir
(nephew) of the original owner of the lot covered by the
disputed lot and the present occupant thereof is not
annotated in the said memorandum of encumbrances.
Neither was his claim entered on the Certificate of Titles in
the name of their original/former owners on file with the
Register of Deeds at the time of the filing or pendency of
LRC Case No. R-4659. Clearly, petitioner is not entitled to
notice.
Noteworthy is the fact that there was compliance by private
respondent of the RTC's order of publication of the petition in
a newspaper of general circulation. This is sufficient notice of
the petition to the public at large.
Petitioner contends that as possessor or actual occupant of
the lot in controversy, he is entitled under the law to be
notified. He relies on Alabang Development Corporation vs.
Valenzuela, G.R. No. L-54094, 116 SCRA 261, 277 (1982))
which held that in reconstitution proceedings, courts must

make sure that indispensable parties, i.e.. the actual owners
and possessors of the lands involved, are duly served with
actual and personal notice of the petition. As pointed out by
the appellate court, his reliance on Alabang is misplaced
because the cause of action in that case is based on
Republic Act i No. 26, entitled "An Act Providing A Special
Procedure for the Reconstitution of Torrens Certificate of Title
Lost or Destroyed," while the present case is based on
Section 109 of P.D. 1529 as above explained.
Under Republic Act No. 26, reconstitution is validly made
only in case the original copy of the certificate of title with the
Register of Deeds is lost or destroyed. And if no notice of the
date of hearing of a reconstitution case is served on a
possessor or one having interest in the property involved, he
is deprived of his day in court and the order of reconstitution
is null and void.16 The case at bar is not for reconstitution, but
merely for replacement of lost duplicate certificate.
On the second assigned error, petitioner contends that
Exhibit "D" is null and void under Article 1409 of the Civil
Code, specifically paragraph (7),17 because the deed of sale
was executed within the five-year prohibitory period under
Commonwealth Act No. 141, as amended, otherwise known
as "The Public Land Act."18
We find petitioner's contention less than meritorious. We
agree with respondent court that the proscription under Com.
Act No. 141 on sale within the 5-year restrictive period refers
to homestead lands only. Here the lot in dispute is not a
homestead land, as found by the trial and appellate courts.
Said lot is owned by GSIS, under TCT No. 10028 in its
proprietary capacity.
Moreover, as far as the violation of the 5-year restrictive
condition imposed by GSIS in its contract with petitioner's
predecessor-in-interest is concerned, it is the GSIS and not
petitioner who had a cause of action against private
respondent. Vide the instructive case of Sarmiento vs. Salud:
The condition that the appellees Sarmiento spouses could
not resell the property except to the People's Homesite and
Housing Corporation (PHHC for short) within the next 25
years after appellees' purchasing the lot is manifestly a
condition in favor of the PHHC, and not one in favor of the
Sarmiento spouses. The condition conferred no actionable
right on appellees herein, since it operated as a restriction
upon their jus disponendi of the property they bought, and
thus limited their right of ownership. It follows that on the
assumption that the mortgage to appellee Salud and the
foreclosure sale violated the condition in the Sarmiento
contract, only the PHHC was entitled to invoke the condition
aforementioned, and not the Sarmientos. The validity or
invalidity of the sheriff's foreclosure sale to appellant Salud
thus violative of its right of exclusive reacquisition; but it
(PHHC) also could waive the condition and treat the sale as
good, in which event, the sale can not be assailed for breach
of the condition aforestated.19

In this case, the GSIS has not filed any action for the
annulment of Exhibit "D", nor for the forfeiture of the lot in
question. In our view, the contract of sale remains valid
between the parties, unless and until annulled in the proper
suit filed by the rightful party, the GSIS. For now, the said
contract of sale is binding upon the heirs of Macaria Vda. de
Caiquep, including petitioner who alleges to be one of her
heirs, in line with the rule that heirs are bound by contracts
entered into by their predecessors-in-interest.20
We are not unmindful of the social justice policy of R.A. 8291
otherwise known as "Government Service Insurance Act of
1997" in granting housing assistance to the less-privileged
GSIS members and their dependents payable at an
affordable payment scheme.21 This is the same policy which
the 5-year restrictive clause in the contract seeks to
implement by stating in the encumbrance itself annotated at
the back of TCT No. 436465 that, "The purpose of the sale is
to aid the vendee in acquiring a lot for himself/themselves
and not to provide him/them with a means for speculation or
profit by a future assignment of his/their right herein acquired
or the resale of the lot through rent, lease or subletting to
others of the lot and subject of this deed, . . . within five (5)
years from the date final and absolute ownership thereof
becomes vested in the vendee, except in cases of hereditary
succession or resale in favor of the vendor." 22 However,
absent the proper action taken by the GSIS as the original
vendor referred to, the contract between petitioner's
predecessor-in-interest and private respondent deserves to
be upheld. For as pointed out by said private respondent, it
is protected by the Constitution under Section 10, Article III,
of the Bill of Rights stating that, "No law impairing the
obligation of contracts shall be passed." Much as we would
like to see a salutary policy triumph, that provision of the
Constitution duly calls for compliance.
More in point, however, is the fact that, following Sarmiento
v. Salud,23 "Even if the transaction between the original
awardee and herein petitioner were wrongful, still, as
between themselves, the purchaser and the seller were both
in pari delicto, being participes criminis as it were." As in
Sarmiento, in this case both were aware of the existence of
the stipulated condition in favor of the original seller, GSIS,
yet both entered into an agreement violating said condition
and nullifying its effects. Similarly, as Acting Chief Justice
JBL Reyes concluded in Sarmiento, "Both parties being
equally guilty, neither is entitled to complain against the
other. Having entered into the transaction with open eyes,
and having benefited from it, said parties should be held in
estoppel to assail and annul their own deliberate acts."
WHEREFORE, the appeal is DENIED, and the decision of
the respondent court is AFFIRMED.
SO ORDERED.
RABADILLA v. CA

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 113725
June 29, 2000
JOHNNY S. RABADILLA,1 petitioner,

vs.
COURT OF APPEALS AND MARIA MARLENA2
COSCOLUELLA Y BELLEZA VILLACARLOS, respondents.
DECISION
PURISIMA, J.:
This is a petition for review of the decision of the Court of
Appeals,3 dated December 23, 1993, in CA-G.R. No. CV35555, which set aside the decision of Branch 52 of the
Regional Trial Court in Bacolod City, and ordered the
defendants-appellees (including herein petitioner), as heirs
of Dr. Jorge Rabadilla, to reconvey title over Lot No. 1392,
together with its fruits and interests, to the estate of Aleja
Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of
testatrix Aleja Belleza, Dr. Jorge Rabadilla, predecessor-ininterest of the herein petitioner, Johnny S. Rabadilla, was
instituted as a devisee of 511, 855 square meters of that
parcel of land surveyed as Lot No. 1392 of the Bacolod
Cadastre. The said Codicil, which was duly probated and
admitted in Special Proceedings No. 4046 before the then
Court of First Instance of Negros Occidental, contained the
following provisions:
"FIRST
I give, leave and bequeath the following property owned by
me to Dr. Jorge Rabadilla resident of 141 P. Villanueva,
Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10942), which is
registered in my name according to the records of the
Register of Deeds of Negros Occidental.
(b) That should Jorge Rabadilla die ahead of me, the
aforementioned property and the rights which I shall set forth
hereinbelow, shall be inherited and acknowledged by the
children and spouse of Jorge Rabadilla.
xxx

FOURTH
(a)....It is also my command, in this my addition (Codicil), that
should I die and Jorge Rabadilla shall have already received
the ownership of the said Lot No. 1392 of the Bacolod
Cadastre, covered by Transfer Certificate of Title No. RT4002 (10942), and also at the time that the lease of Balbinito
G. Guanzon of the said lot shall expire, Jorge Rabadilla shall
have the obligation until he dies, every year to give to Maria
Marlina Coscolluela y Belleza, Seventy (75) (sic) piculs of
Export sugar and Twenty Five (25) piculs of Domestic sugar,
until the said Maria Marlina Coscolluela y Belleza dies.
FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he shall
give Lot No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10492), shall have
the obligation to still give yearly, the sugar as specified in the
Fourth paragraph of his testament, to Maria Marlina
Coscolluela y Belleza on the month of December of each
year.
SIXTH
I command, in this my addition (Codicil) that the Lot No.
1392, in the event that the one to whom I have left and
bequeathed, and his heir shall later sell, lease, mortgage this
said Lot, the buyer, lessee, mortgagee, shall have also the
obligation to respect and deliver yearly ONE HUNDRED
(100) piculs of sugar to Maria Marlina Coscolluela y Belleza,
on each month of December, SEVENTY FIVE (75) piculs of
Export and TWENTY FIVE (25) piculs of Domestic, until
Maria Marlina shall die, lastly should the buyer, lessee or the
mortgagee of this lot, not have respected my command in
this my addition (Codicil), Maria Marlina Coscolluela y
Belleza, shall immediately seize this Lot No. 1392 from my
heir and the latter's heirs, and shall turn it over to my near
desendants, (sic) and the latter shall then have the obligation
to give the ONE HUNDRED (100) piculs of sugar until Maria
Marlina shall die. I further command in this my addition
(Codicil) that my heir and his heirs of this Lot No. 1392, that
they will obey and follow that should they decide to sell,
lease, mortgage, they cannot negotiate with others than my
near descendants and my sister."4
Pursuant to the same Codicil, Lot No. 1392 was transferred
to the deceased, Dr. Jorge Rabadilla, and Transfer
Certificate of Title No. 44498 thereto issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his
wife Rufina and children Johnny (petitioner), Aurora, Ofelia
and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza
Villacarlos brought a complaint, docketed as Civil Case No.
5588, before Branch 52 of the Regional Trial Court in
Bacolod City, against the above-mentioned heirs of Dr. Jorge
Rabadilla, to enforce the provisions of subject Codicil. The

Complaint alleged that the defendant-heirs violated the
conditions of the Codicil, in that:
1. Lot No. 1392 was mortgaged to the Philippine National
Bank and the Republic Planters Bank in disregard of the
testatrix's specific instruction to sell, lease, or mortgage only
to the near descendants and sister of the testatrix.
2. Defendant-heirs failed to comply with their obligation to
deliver one hundred (100) piculs of sugar (75 piculs export
sugar and 25 piculs domestic sugar) to plaintiff Maria
Marlena Coscolluela y Belleza from sugar crop years 1985
up to the filing of the complaint as mandated by the Codicil,
despite repeated demands for compliance.
3. The banks failed to comply with the 6th paragraph of the
Codicil which provided that in case of the sale, lease, or
mortgage of the property, the buyer, lessee, or mortgagee
shall likewise have the obligation to deliver 100 piculs of
sugar per crop year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering
defendant-heirs to reconvey/return-Lot No. 1392 to the
surviving heirs of the late Aleja Belleza, the cancellation of
TCT No. 44498 in the name of the deceased, Dr. Jorge
Rabadilla, and the issuance of a new certificate of title in the
names of the surviving heirs of the late Aleja Belleza.
On February 26, 1990, the defendant-heirs were declared in
default but on March 28, 1990 the Order of Default was
lifted, with respect to defendant Johnny S. Rabadilla, who
filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private respondent) and
a certain Alan Azurin, son-in-law of the herein petitioner who
was lessee of the property and acting as attorney-in-fact of
defendant-heirs, arrived at an amicable settlement and
entered into a Memorandum of Agreement on the obligation
to deliver one hundred piculs of sugar, to the following effect:
"That for crop year 1988-89, the annuity mentioned in Entry
No. 49074 of TCT No. 44489 will be delivered not later than
January of 1989, more specifically, to wit:
75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then
existing in any of our names, Mary Rose Rabadilla y Azurin
or Alan Azurin, during December of each sugar crop year, in
Azucar Sugar Central; and, this is considered compliance of
the annuity as mentioned, and in the same manner will
compliance of the annuity be in the next succeeding crop
years.
That the annuity above stated for crop year 1985-86, 198687, and 1987-88, will be complied in cash equivalent of the
number of piculs as mentioned therein and which is as
herein agreed upon, taking into consideration the composite

price of sugar during each sugar crop year, which is in the
total amount of ONE HUNDRED FIVE THOUSAND PESOS
(P105,000.00).
That the above-mentioned amount will be paid or delivered
on a staggered cash installment, payable on or before the
end of December of every sugar crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED
FIFTY (P26,250.00) Pesos, payable on or before December
of crop year 1988-89;
of crop year 1989-90;
of crop year 1990-91; and
of crop year 1991-92."5
However, there was no compliance with the aforesaid
Memorandum of Agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988
-1989.
On July 22, 1991, the Regional Trial Court came out with a
decision, dismissing the complaint and disposing as follows:
"WHEREFORE, in the light of the aforegoing findings, the
Court finds that the action is prematurely filed as no cause of
action against the defendants has as yet arose in favor of
plaintiff. While there maybe the non-performance of the
command as mandated exaction from them simply because
they are the children of Jorge Rabadilla, the title
holder/owner of the lot in question, does not warrant the filing
of the present complaint. The remedy at bar must fall.
Incidentally, being in the category as creditor of the left
estate, it is opined that plaintiff may initiate the intestate
proceedings, if only to establish the heirs of Jorge Rabadilla
and in order to give full meaning and semblance to her claim
under the Codicil.
In the light of the aforegoing findings, the Complaint being
prematurely filed is DISMISSED without prejudice.
SO ORDERED."6
On appeal by plaintiff, the First Division of the Court of
Appeals reversed the decision of the trial court; ratiocinating
and ordering thus:
"Therefore, the evidence on record having established
plaintiff-appellant's right to receive 100 piculs of sugar
annually out of the produce of Lot No. 1392; defendantsappellee's obligation under Aleja Belleza's codicil, as heirs of
the modal heir, Jorge Rabadilla, to deliver such amount of

sugar to plaintiff-appellant; defendants-appellee's admitted
non-compliance with said obligation since 1985; and, the
punitive consequences enjoined by both the codicil and the
Civil Code, of seizure of Lot No. 1392 and its reversion to the
estate of Aleja Belleza in case of such non-compliance, this
Court deems it proper to order the reconveyance of title over
Lot No. 1392 from the estates of Jorge Rabadilla to the
estate of Aleja Belleza. However, plaintiff-appellant must
institute separate proceedings to re-open Aleja Belleza's
estate, secure the appointment of an administrator, and
distribute Lot No. 1392 to Aleja Belleza's legal heirs in order
to enforce her right, reserved to her by the codicil, to receive
her legacy of 100 piculs of sugar per year out of the produce
of Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and
another one entered ordering defendants-appellees, as heirs
of Jorge Rabadilla, to reconvey title over Lot No. 1392,
together with its fruits and interests, to the estate of Aleja
Belleza.
SO ORDERED."7
Dissatisfied with the aforesaid disposition by the Court of
Appeals, petitioner found his way to this Court via the
present petition, contending that the Court of Appeals erred
in ordering the reversion of Lot 1392 to the estate of the
testatrix Aleja Belleza on the basis of paragraph 6 of the
Codicil, and in ruling that the testamentary institution of Dr.
Jorge Rabadilla is a modal institution within the purview of
Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in
resolving the appeal in accordance with Article 882 of the
New Civil Code on modal institutions and in deviating from
the sole issue raised which is the absence or prematurity of
the cause of action. Petitioner maintains that Article 882
does not find application as there was no modal institution
and the testatrix intended a mere simple substitution - i.e. the
instituted heir, Dr. Jorge Rabadilla, was to be substituted by
the testatrix's "near descendants" should the obligation to
deliver the fruits to herein private respondent be not
complied with. And since the testatrix died single and without
issue, there can be no valid substitution and such
testamentary provision cannot be given any effect.
The petitioner theorizes further that there can be no valid
substitution for the reason that the substituted heirs are not
definite, as the substituted heirs are merely referred to as
"near descendants" without a definite identity or reference as
to who are the "near descendants" and therefore, under
Articles 8438 and 8459 of the New Civil Code, the substitution
should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his
supposition that the Court of Appeals deviated from the issue
posed before it, which was the propriety of the dismissal of

the complaint on the ground of prematurity of cause of
action, there was no such deviation. The Court of Appeals
found that the private respondent had a cause of action
against the petitioner. The disquisition made on modal
institution was, precisely, to stress that the private
respondent had a legally demandable right against the
petitioner pursuant to subject Codicil; on which issue the
Court of Appeals ruled in accordance with law.
It is a general rule under the law on succession that
successional rights are transmitted from the moment of
death of the decedent10 and compulsory heirs are called to
succeed by operation of law. The legitimate children and
descendants, in relation to their legitimate parents, and the
widow or widower, are compulsory heirs.11 Thus, the
petitioner, his mother and sisters, as compulsory heirs of the
instituted heir, Dr. Jorge Rabadilla, succeeded the latter by
operation of law, without need of further proceedings, and
the successional rights were transmitted to them from the
moment of death of the decedent, Dr. Jorge Rabadilla.
Under Article 776 of the New Civil Code, inheritance includes
all the property, rights and obligations of a person, not
extinguished by his death. Conformably, whatever rights Dr.
Jorge Rabadilla had by virtue of subject Codicil were
transmitted to his forced heirs, at the time of his death. And
since obligations not extinguished by death also form part of
the estate of the decedent; corollarily, the obligations
imposed by the Codicil on the deceased Dr. Jorge Rabadilla,
were likewise transmitted to his compulsory heirs upon his
death.
In the said Codicil, testatrix Aleja Belleza devised Lot No.
1392 to Dr. Jorge Rabadilla, subject to the condition that the
usufruct thereof would be delivered to the herein private
respondent every year. Upon the death of Dr. Jorge
Rabadilla, his compulsory heirs succeeded to his rights and
title over the said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved
to herein private respondent. Such obligation of the instituted
heir reciprocally corresponds to the right of private
respondent over the usufruct, the fulfillment or performance
of which is now being demanded by the latter through the
institution of the case at bar. Therefore, private respondent
has a cause of action against petitioner and the trial court
erred in dismissing the complaint below.
Petitioner also theorizes that Article 882 of the New Civil
Code on modal institutions is not applicable because what
the testatrix intended was a substitution - Dr. Jorge Rabadilla
was to be substituted by the testatrix's near descendants
should there be noncompliance with the obligation to deliver
the piculs of sugar to private respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or
persons to take the place of the heir or heirs first instituted.
Under substitutions in general, the testator may either (1)
provide for the designation of another heir to whom the
property shall pass in case the original heir should die before
him/her, renounce the inheritance or be incapacitated to
inherit, as in a simple substitution, 12 or (2) leave his/her
property to one person with the express charge that it be
transmitted subsequently to another or others, as in a
fideicommissary substitution.13 The Codicil sued upon
contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance
in default of the first heir by reason of incapacity, predecease
or renunciation.14 In the case under consideration, the
provisions of subject Codicil do not provide that should Dr.
Jorge Rabadilla default due to predecease, incapacity or
renunciation, the testatrix's near descendants would
substitute him. What the Codicil provides is that, should Dr.
Jorge Rabadilla or his heirs not fulfill the conditions imposed
in the Codicil, the property referred to shall be seized and
turned over to the testatrix's near descendants.
Neither is there a fideicommissary substitution here and on
this point, petitioner is correct. In a fideicommissary
substitution, the first heir is strictly mandated to preserve the
property and to transmit the same later to the second
heir.15 In the case under consideration, the instituted heir is in
fact allowed under the Codicil to alienate the property
provided the negotiation is with the near descendants or the
sister of the testatrix. Thus, a very important element of a
fideicommissary substitution is lacking; the obligation clearly
imposing upon the first heir the preservation of the property
and its transmission to the second heir. "Without this
obligation to preserve clearly imposed by the testator in his
will, there is no fideicommissary substitution." 16 Also, the
near descendants' right to inherit from the testatrix is not
definite. The property will only pass to them should Dr. Jorge
Rabadilla or his heirs not fulfill the obligation to deliver part of
the usufruct to private respondent.
Another important element of a fideicommissary substitution
is also missing here. Under Article 863, the second heir or
the fideicommissary to whom the property is transmitted
must not be beyond one degree from the first heir or the
fiduciary. A fideicommissary substitution is therefore, void if
the first heir is not related by first degree to the second heir.17
In the case under scrutiny, the near descendants are not at
all related to the instituted heir, Dr. Jorge Rabadilla.
The Court of Appeals erred not in ruling that the institution of
Dr. Jorge Rabadilla under subject Codicil is in the nature of a
modal institution and therefore, Article 882 of the New Civil
Code is the provision of law in point. Articles 882 and 883 of
the New Civil Code provide:
Art. 882. The statement of the object of the institution or the
application of the property left by the testator, or the charge
imposed on him, shall not be considered as a condition
unless it appears that such was his intention.
That which has been left in this manner may be claimed at
once provided that the instituted heir or his heirs give
security for compliance with the wishes of the testator and

for the return of anything he or they may receive, together
with its fruits and interests, if he or they should disregard this
obligation.
Art. 883. When without the fault of the heir, an institution
referred to in the preceding article cannot take effect in the
exact manner stated by the testator, it shall be complied with
in a manner most analogous to and in conformity with his
wishes.
The institution of an heir in the manner prescribed in Article
882 is what is known in the law of succession as an
institucion sub modo or a modal institution. In a modal
institution, the testator states (1) the object of the institution,
(2) the purpose or application of the property left by the
testator, or (3) the charge imposed by the testator upon the
heir.18 A "mode" imposes an obligation upon the heir or
legatee but it does not affect the efficacy of his rights to the
succession.19 On the other hand, in a conditional
testamentary disposition, the condition must happen or be
fulfilled in order for the heir to be entitled to succeed the
testator. The condition suspends but does not obligate; and
the mode obligates but does not suspend. 20 To some extent,
it is similar to a resolutory condition.21
From the provisions of the Codicil litigated upon, it can be
gleaned unerringly that the testatrix intended that subject
property be inherited by Dr. Jorge Rabadilla. It is likewise
clearly worded that the testatrix imposed an obligation on the
said instituted heir and his successors-in-interest to deliver
one hundred piculs of sugar to the herein private respondent,
Marlena Coscolluela Belleza, during the lifetime of the latter.
However, the testatrix did not make Dr. Jorge Rabadilla's
inheritance and the effectivity of his institution as a devisee,
dependent on the performance of the said obligation. It is
clear, though, that should the obligation be not complied
with, the property shall be turned over to the testatrix's near
descendants. The manner of institution of Dr. Jorge
Rabadilla under subject Codicil is evidently modal in nature
because it imposes a charge upon the instituted heir without,
however, affecting the efficacy of such institution.
as will sustain and uphold the Will in all its parts must be
adopted.24
Subject Codicil provides that the instituted heir is under
obligation to deliver One Hundred (100) piculs of sugar
yearly to Marlena Belleza Coscuella. Such obligation is
imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs,
and their buyer, lessee, or mortgagee should they sell, lease,
mortgage or otherwise negotiate the property involved. The
Codicil further provides that in the event that the obligation to
deliver the sugar is not respected, Marlena Belleza
Coscuella shall seize the property and turn it over to the
testatrix's near descendants. The non-performance of the
said obligation is thus with the sanction of seizure of the
property and reversion thereof to the testatrix's near
descendants. Since the said obligation is clearly imposed by
the testatrix, not only on the instituted heir but also on his
successors-in-interest, the sanction imposed by the testatrix
in case of non-fulfillment of said obligation should equally
apply to the instituted heir and his successors-in-interest.
Similarly unsustainable is petitioner's submission that by
virtue of the amicable settlement, the said obligation
imposed by the Codicil has been assumed by the lessee,
and whatever obligation petitioner had become the obligation
of the lessee; that petitioner is deemed to have made a
substantial and constructive compliance of his obligation
through the consummated settlement between the lessee
and the private respondent, and having consummated a
settlement with the petitioner, the recourse of the private
respondent is the fulfillment of the obligation under the
amicable settlement and not the seizure of subject property.
Suffice it to state that a Will is a personal, solemn, revocable
and free act by which a person disposes of his property, to
take effect after his death.25 Since the Will expresses the
manner in which a person intends how his properties be
disposed, the wishes and desires of the testator must be
strictly followed. Thus, a Will cannot be the subject of a
compromise agreement which would thereby defeat the very
purpose of making a Will.
Then too, since testamentary dispositions are generally acts

of liberality, an obligation imposed upon the heir should not
be considered a condition unless it clearly appears from the
Will itself that such was the intention of the testator. In case
of doubt, the institution should be considered as modal and
not conditional.22
WHEREFORE, the petition is hereby DISMISSED and the

decision of the Court of Appeals, dated December 23, 1993,
in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement
as to costs
Neither is there tenability in the other contention of petitioner

that the private respondent has only a right of usufruct but
not the right to seize the property itself from the instituted
heir because the right to seize was expressly limited to
violations by the buyer, lessee or mortgagee.
ALVAREZ v. IAC
In the interpretation of Wills, when an uncertainty arises on

the face of the Will, as to the application of any of its
provisions, the testator's intention is to be ascertained from
the words of the Will, taking into consideration the
circumstances under which it was made.23 Such construction
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
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.
Fuentebella (Puentevella) and Alvarez were in possession of

Lot 773. 2
It is on record that on May 19, 1938, Fortunato D. Santiago
was issued Transfer Certificate of Title No. RF 2694 (29797)
covering Lot 773-A with an area of 37,818 square meters. 3
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.
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 ACG.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 and Rosario Yanes,
are children of Felipe. Teodora was survived by her child,
Jovita (Jovito) Alib. 1 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 question but "after liberation", when her
brother went there to get their share of the sugar produced
therein, he was informed that Fortunato Santiago,
The bigger portion of Lot 773 with an area of 118,831 square

meters was also registered in the name of Fortunato D.
Santiago on September 6, 1938 Under TCT No. RT-2695
(28192 ). 4 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
P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos.
T-19291 and T-19292 were issued in Fuentebella's name. 6
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 motion
requesting authority to sell Lots 773-A and 773-B. 7 By virtue
of a court order granting said motion, 8 on March 24, 1958,
Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to
Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT Nos. T23165 and T-23166 covering Lots 773-A and 773-B were
respectively issued to Rosendo Alvarez. 10
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 ordered to pay plaintiffs P500.00 as damages
in the form of attorney's fees. 11
During the pendency in court of said case or on November
13, 1961, Alvarez sold Lots 773-A, 773-B and another lot for
P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos.
30919 and 30920 were issued to Siason, 13 who thereafter,
declared the two lots in his name for assessment purposes.
14
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 in connection with
the above-entitled case." 15
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 could not be
delivered to the plaintiffs as Siason was "not a party per writ
of execution." 17
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 Alvarez. 18
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 said
properties"; that the decision in the cadastral proceeding 19
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 because he was not
a party-litigant therein but also because it had long become
final and executory. 20 Finding said manifestation to be wellfounded, the cadastral court, in its order of September 4,
1965, nullified its previous order requiring Siason to
surrender the certificates of title mentioned therein. 21
In 1968, the Yaneses filed an ex-parte motion for the
issuance of an alias writ of execution in Civil Case No. 5022.
Siason opposed it. 22 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 could not be
enforced against Siason as he was not a party in the case. 23
The action filed by the Yaneses on February 21, 1968 was

for recovery of real property with damages. 24 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 damages of P10,000.00 plus
attorney's fees of P4, 000.00. 25
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 estopped
from questioning said order. 26 On their part, the Alvarez
stated in their answer that the Yaneses' cause of action had
been "barred by res judicata, statute of limitation and
estoppel." 27
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 sale thereof executed between Alvarez and
Siason was without court approval. 28 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
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.
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 operations (sic) of law to the
petitioners without violation of law and due process . 33
The petition is devoid of merit.
SO ORDERED. 29
The Alvarez appealed to the then Intermediate Appellate
Court which in its decision of August 31, 1983 30 affirmed the
lower court's decision "insofar as it ordered defendantsappellants 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."
31
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
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 4defendant 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.
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 when Alvarez or
his heirs failed to appeal the decision against them. 34
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 them in
law or estate. 35 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, unscrupulous litigations will multiply in
number to the detriment of the administration of justice. 36
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 been
illegally deprived of ownership and possession of the lots in
question. 37 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 actual value of the subdivided
lots in dispute. It did not order defendant Siason to pay said
amount. 38
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 purchaser for value, for
damages. 39 "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 undesirable eventuality is precisely sought to be
guarded against." 40
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
Co., Inc. 41
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.
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.
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 their totality for the
payment of the debts of the estate. 42
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.
PAMPLONA v. MORETO
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33187
March 31, 1980
CORNELIO PAMPLONA alias GEMINIANO PAMPLONA

and APOLONIA ONTE, petitioners,
vs.
VIVENCIO MORETO, VICTOR MORETO, ELIGIO
MORETO, MARCELO MORETO, PAULINA MORETO,

ROSARIO MORETO, MARTA MORETO, SEVERINA
MENDOZA, PABLO MENDOZA, LAZARO MENDOZA,
VICTORIA TUIZA, JOSEFINA MORETO, LEANDRO
MORETO and LORENZO MENDOZA, respondents.
E.P. Caguioa for petitioners.
Benjamin C. Yatco for respondents.
GUERRERO, J.:
This is a petition for certiorari by way of appeal from the
decision of the Court of Appeals 1 in CA-G.R. No. 35962-R,
entitled "Vivencio Moreto, et al., Plaintiff-Appellees vs.
Cornelio Pamplona, et al., Defendants-Appellants," affirming
the decision of the Court of First Instance of Laguna, Branch
I at Bian.
The facts, as stated in the decision appealed from, show
that:
Flaviano Moreto and Monica Maniega were husband and
wife. During their marriage, they acquired adjacent lots Nos.
1495, 4545, and 1496 of the Calamba Friar Land Estate,
situated in Calamba, Laguna, containing 781-544 and 1,021
square meters respectively and covered by certificates of
title issued in the name of "Flaviano Moreto, married to
Monica Maniega."
The spouses Flaviano Moreto and Monica Maniega begot
during their marriage six (6) children, namely, Ursulo, Marta,
La Paz, Alipio, Pablo, and Leandro, all surnamed Moreto.
Ursulo Moreto died intestate on May 24, 1959 leaving as his

heirs herein plaintiffs Vivencio, Marcelo, Rosario, Victor,
Paulina, Marta and Eligio, all surnamed Moreto.
Marta Moreto died also intestate on April 30, 1938 leaving as
her heir plaintiff Victoria Tuiza.
La Paz Moreto died intestate on July 17, 1954 leaving the
following heirs, namely, herein plaintiffs Pablo, Severina,
Lazaro, and Lorenzo, all surnamed Mendoza.
Alipio Moreto died intestate on June 30, 1943 leaving as his
heir herein plaintiff Josefina Moreto.
Pablo Moreto died intestate on April 25, 1942 leaving no
issue and as his heirs his brother plaintiff Leandro Moreto
and the other plaintiffs herein.
On May 6, 1946, Monica Maniega died intestate in Calamba,
Laguna.
On July 30, 1952, or more than six (6) years after the death
of his wife Monica Maniega, Flaviano Moreto, without the
consent of the heirs of his said deceased wife Monica, and
before any liquidation of the conjugal partnership of Monica
and Flaviano could be effected, executed in favor of
Geminiano Pamplona, married to defendant Apolonia Onte,
the deed of absolute sale (Exh. "1") covering lot No. 1495 for
P900.00. The deed of sale (Exh. "1") contained a description
of lot No. 1495 as having an area of 781 square meters and
covered by transfer certificate of title No. 14570 issued in the
name of Flaviano Moreto, married to Monica Maniega,
although the lot was acquired during their marriage. As a
result of the sale, the said certificate of title was cancelled
and a new transfer certificate of title No. T-5671 was issued
in the name of Geminiano Pamplona married to Apolonia
Onte (Exh. "A").
After the execution of the above-mentioned deed of sale
(Exh. "1"), the spouses Geminiano Pamplona and Apolonia
Onte constructed their house on the eastern part of lot 1496
as Flaviano Moreto, at the time of the sale, pointed to it as
the land which he sold to Geminiano Pamplona. Shortly
thereafter, Rafael Pamplona, son of the spouses Geminiano
Pamplona and Apolonia Onte, also built his house within lot
1496 about one meter from its boundary with the adjoining
lot. The vendor Flaviano Moreto and the vendee Geminiano
Pamplona thought all the time that the portion of 781 square
meters which was the subject matter of their sale transaction
was No. 1495 and so lot No. 1495 appears to be the subject
matter in the deed of sale (Exh. "1") although the fact is that
the said portion sold thought of by the parties to be lot No.
1495 is a part of lot No. 1496.
From 1956 to 1960, the spouses Geminiano Pamplona and
Apolonio Onte enlarged their house and they even
constructed a piggery corral at the back of their said house
about one and one-half meters from the eastern boundary of
lot 1496.
On August 12, 1956, Flaviano Moreto died intestate. In 1961,
the plaintiffs demanded on the defendants to vacate the
premises where they had their house and piggery on the
ground that Flaviano Moreto had no right to sell the lot which
he sold to Geminiano Pamplona as the same belongs to the
conjugal partnership of Flaviano and his deceased wife and
the latter was already dead when the sale was executed
without the consent of the plaintiffs who are the heirs of
Monica. The spouses Geminiano Pamplona and Apolonia
Onte refused to vacate the premises occupied by them and
hence, this suit was instituted by the heirs of Monica
Maniega seeking for the declaration of the nullity of the deed
of sale of July 30, 1952 above-mentioned as regards onehalf of the property subject matter of said deed; to declare
the plaintiffs as the rightful owners of the other half of said
lot; to allow the plaintiffs to redeem the one-half portion
thereof sold to the defendants. "After payment of the other
half of the purchase price"; to order the defendants to vacate
the portions occupied by them; to order the defendants to
pay actual and moral damages and attorney's fees to the
plaintiffs; to order the defendants to pay plaintiffs P120.00 a

year from August 1958 until they have vacated the premises
occupied by them for the use and occupancy of the same.
The defendants claim that the sale made by Flaviano Moreto
in their favor is valid as the lot sold is registered in the name
of Flaviano Moreto and they are purchasers believing in
good faith that the vendor was the sole owner of the lot sold.
After a relocation of lots 1495, 1496 and 4545 made by
agreement of the parties, it was found out that there was
mutual error between Flaviano Moreto and the defendants in
the execution of the deed of sale because while the said
deed recited that the lot sold is lot No. 1495, the real
intention of the parties is that it was a portion consisting of
781 square meters of lot No. 1496 which was the subject
matter of their sale transaction.
After trial, the lower court rendered judgment, the dispositive
part thereof being as follows:
WHEREFORE, judgment is hereby rendered for the plaintiffs
declaring the deed of absolute sale dated July 30, 1952
pertaining to the eastern portion of Lot 1496 covering an
area of 781 square meters null and void as regards the
390.5 square meters of which plaintiffs are hereby declared
the rightful owners and entitled to its possession.
The sale is ordered valid with respect to the eastern one-half
(1/2) of 1781 square meters of Lot 1496 measuring 390.5
square meters of which defendants are declared lawful
owners and entitled to its possession.
After proper survey segregating the eastern one-half portion
with an area of 390.5 square meters of Lot 1496, the
defendants shall be entitled to a certificate of title covering
said portion and Transfer Certificate of Title No. 9843 of the
office of the Register of Deeds of Laguna shall be cancelled
accordingly and new titles issued to the plaintiffs and to the
defendants covering their respective portions.
Transfer Certificate of Title No. 5671 of the office of the
Register of Deeds of Laguna covering Lot No. 1495 and
registered in the name of Cornelio Pamplona, married to
Apolonia Onte, is by virtue of this decision ordered
cancelled. The defendants are ordered to surrender to the
office of the Register of Deeds of Laguna the owner's
duplicate of Transfer Certificate of Title No. 5671 within thirty
(30) days after this decision shall have become final for
cancellation in accordance with this decision.
Let copy of this decision be furnished the Register of Deeds
for the province of Laguna for his information and guidance.
With costs against the defendants. 2
The defendants-appellants, not being satisfied with said
judgment, appealed to the Court of Appeals, which affirmed
the judgment, hence they now come to this Court.
The fundamental and crucial issue in the case at bar is

whether under the facts and circumstances duly established
by the evidence, petitioners are entitled to the full ownership
of the property in litigation, or only one-half of the same.
There is no question that when the petitioners purchased the
property on July 30, 1952 from Flaviano Moreto for the price
of P900.00, his wife Monica Maniega had already been dead
six years before, Monica having died on May 6, 1946.
Hence, the conjugal partnership of the spouses Flaviano
Moreto and Monica Maniega had already been dissolved.
(Article 175, (1) New Civil Code; Article 1417, Old Civil
Code). The records show that the conjugal estate had not
been inventoried, liquidated, settled and divided by the heirs
thereto in accordance with law. The necessary proceedings
for the liquidation of the conjugal partnership were not
instituted by the heirs either in the testate or intestate
proceedings of the deceased spouse pursuant to Act 3176
amending Section 685 of Act 190. Neither was there an
extra-judicial partition between the surviving spouse and the
heirs of the deceased spouse nor was an ordinary action for
partition brought for the purpose. Accordingly, the estate
became the property of a community between the surviving
husband, Flaviano Moreto, and his children with the
deceased Monica Maniega in the concept of a co-ownership.
The community property of the marriage, at the dissolution of
this bond by the death of one of the spouses, ceases to
belong to the legal partnership and becomes the property of
a community, by operation of law, between the surviving
spouse and the heirs of the deceased spouse, or the
exclusive property of the widower or the widow, it he or she
be the heir of the deceased spouse. Every co-owner shall
have full ownership of his part and in the fruits and benefits
derived therefrom, and he therefore may alienate, assign or
mortgage it, and even substitute another person in its
enjoyment, unless personal rights are in question. (Marigsa
vs. Macabuntoc, 17 Phil. 107)
In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court
said that "(t)here is no reason in law why the heirs of the
deceased wife may not form a partnership with the surviving
husband for the management and control of the community
property of the marriage and conceivably such a partnership,
or rather community of property, between the heirs and the
surviving husband might be formed without a written
agreement." In Prades vs. Tecson, 49 Phil. 230, the
Supreme Court held that "(a)lthough, when the wife dies, the
surviving husband, as administrator of the community
property, has authority to sell the property withut the
concurrence of the children of the marriage, nevertheless
this power can be waived in favor of the children, with the
result of bringing about a conventional ownership in common
between the father and children as to such property; and any
one purchasing with knowledge of the changed status of the
property will acquire only the undivided interest of those
members of the family who join in the act of conveyance.
It is also not disputed that immediately after the execution of
the sale in 1952, the vendees constructed their house on the

eastern part of Lot 1496 which the vendor pointed out to
them as the area sold, and two weeks thereafter, Rafael who
is a son of the vendees, also built his house within Lot 1496.
Subsequently, a cemented piggery coral was constructed by
the vendees at the back of their house about one and onehalf meters from the eastern boundary of Lot 1496. Both
vendor and vendees believed all the time that the area of
781 sq. meters subject of the sale was Lot No. 1495 which
according to its title (T.C.T. No. 14570) contains an area of
781 sq. meters so that the deed of sale between the parties
Identified and described the land sold as Lot 1495. But
actually, as verified later by a surveyor upon agreement of
the parties during the proceedings of the case below, the
area sold was within Lot 1496.
Again, there is no dispute that the houses of the spouses
Cornelio Pamplona and Apolonia Onte as well as that of their
son Rafael Pamplona, including the concrete piggery coral
adjacent thereto, stood on the land from 1952 up to the filing
of the complaint by the private respondents on July 25, 1961,
or a period of over nine (9) years. And during said period, the
private respondents who are the heirs of Monica Maniega as
well as of Flaviano Moreto who also died intestate on August
12, 1956, lived as neighbors to the petitioner-vendees, yet
lifted no finger to question the occupation, possession and
ownership of the land purchased by the Pamplonas, so that
We are persuaded and convinced to rule that private
respondents are in estoppel by laches to claim half of the
property, in dispute as null and void. Estoppel by laches is a
rule of equity which bars a claimant from presenting his claim
when, by reason of abandonment and negligence, he
allowed a long time to elapse without presenting the same.
(International Banking Corporation vs. Yared, 59 Phil. 92)
We have ruled that at the time of the sale in 1952, the
conjugal partnership was already dissolved six years before
and therefore, the estate became a co-ownership between
Flaviano Moreto, the surviving husband, and the heirs of his
deceased wife, Monica Maniega. Article 493 of the New Civil
Code is applicable and it provides a follows:
Art. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involve. But the effect of the alienation or
the 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.
We agree with the petitioner that there was a partial partition
of the co-ownership when at the time of the sale Flaviano
Moreto pointed out the area and location of the 781 sq.
meters sold by him to the petitioners-vendees on which the
latter built their house and also that whereon Rafael, the son
of petitioners likewise erected his house and an adjacent
coral for piggery.
Petitioners point to the fact that spouses Flaviano Moreto
and Monica Maniega owned three parcels of land
denominated as Lot 1495 having an area of 781 sq. meters,

Lot 1496 with an area of 1,021 sq. meters, and Lot 4545 with
an area of 544 sq. meters. The three lots have a total area of
2,346 sq. meters. These three parcels of lots are contiguous
with one another as each is bounded on one side by the
other, thus: Lot 4545 is bounded on the northeast by Lot
1495 and on the southeast by Lot 1496. Lot 1495 is bounded
on the west by Lot 4545. Lot 1496 is bounded on the west by
Lot 4545. It is therefore, clear that the three lots constitute
one big land. They are not separate properties located in
different places but they abut each other. This is not disputed
by private respondents. Hence, at the time of the sale, the
co-ownership constituted or covered these three lots
adjacent to each other. And since Flaviano Moreto was
entitled to one-half pro-indiviso of the entire land area or
1,173 sq. meters as his share, he had a perfect legal and
lawful right to dispose of 781 sq. meters of his share to the
Pamplona spouses. Indeed, there was still a remainder of
some 392 sq. meters belonging to him at the time of the
sale.
We reject respondent Court's ruling that the sale was valid
as to one-half and invalid as to the other half for the very
simple reason that Flaviano Moreto, the vendor, had the
legal right to more than 781 sq. meters of the communal
estate, a title which he could dispose, alienate in favor of the
vendees-petitioners. The title may be pro-indiviso or inchoate
but the moment the co-owner as vendor pointed out its
location and even indicated the boundaries over which the
fences were to be erectd without objection, protest or
complaint by the other co-owners, on the contrary they
acquiesced and tolerated such alienation, occupation and
possession, We rule that a factual partition or termination of
the co-ownership, although partial, was created, and barred
not only the vendor, Flaviano Moreto, but also his heirs, the
private respondents herein from asserting as against the
vendees-petitioners any right or title in derogation of the
deed of sale executed by said vendor Flaiano Moreto.
Equity commands that the private respondents, the
successors of both the deceased spouses, Flaviano Moreto
and Monica Maniega be not allowed to impugn the sale
executed by Flaviano Moreto who indisputably received the
consideration of P900.00 and which he, including his
children, benefitted from the same. Moreover, as the heirs of
both Monica Maniega and Flaviano Moreto, private
respondents are duty-bound to comply with the provisions of
Articles 1458 and 1495, Civil Code, which is the obligation of
the vendor of the property of delivering and transfering the
ownership of the whole property sold, which is transmitted on
his death to his heirs, the herein private respondents. The
articles cited provide, thus:
Art. 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other part to pay
therefore a price certain in money or its equivalent.
A contract of sale may be absolute or conditionial.

Art. 1495. The vendor is bound to transfer the ownership of
and deliver, as well as warrant the thing which is the object
of the sale.
Under Article 776, New Civil Code, the inheritance which
private respondents received from their deceased parents
and/or predecessors-in-interest included all the property
rights and obligations which were not extinguished by their
parents' death. And under Art. 1311, paragraph 1, New Civil
Code, the contract of sale executed by the deceased
Flaviano Moreto took effect between the parties, their
assigns and heirs, who are the private respondents herein.
Accordingly, to the private respondents is transmitted the
obligation to deliver in full ownership the whole area of 781
sq. meters to the petitioners (which was the original
obligation of their predecessor Flaviano Moreto) and not only
one-half thereof. Private respondents must comply with said
obligation.
The records reveal that the area of 781 sq. meters sold to
and occupied by petitioners for more than 9 years already as
of the filing of the complaint in 1961 had been re-surveyed
by private land surveyor Daniel Aranas. Petitioners are
entitled to a segregation of the area from Transfer Certificate
of Title No. T-9843 covering Lot 1496 and they are also
entitled to the issuance of a new Transfer Certificate of Title
in their name based on the relocation survey.
WHEREFORE, IN VIEW OF THE FOREGOING, the
judgment appealed from is hereby AFFIRMED with
modification in the sense that the sale made and executed
by Flaviano Moreto in favor of the petitioners-vendees is
hereby declared legal and valid in its entirely.
Petitioners are hereby declared owners in full ownership of
the 781 sq. meters at the eastern portion of Lot 1496 now
occupied by said petitioners and whereon their houses and
piggery coral stand.
The Register of Deeds of Laguna is hereby ordered to
segregate the area of 781 sq. meters from Certificate of Title
No. 9843 and to issue a new Transfer Certificate of Title to
the petitioners covering the segregated area of 781 sq.
meters.
No costs.
SO ORDERED.
LEDESMA v. MCLACHLIN
SUPREME COURT
Manila
SOCORRO LEDESMA and ANA QUITCO LEDESMA,

plaintiffs-appellees,
vs.
CONCHITA MCLACHLIN, ET AL., defendants-appellants.
Adriano T. de la Cruz for appellants.
Simeon Bitanga for appellees.
VILLA-REAL, J.:
This case is before us by virtue of an appeal taken by the
defendants Conchita McLachlin, Lorenzo Quitco, Jr., Sabina
Quitco, Rafael Quitco and Marcela Quitco, from the decision
of the Court of First Instance of Occidental Negros, the
dispositive part of which reads:
For the foregoing considerations, the court renders judgment
in this case declaring Ana Quitco Ledesma an acknowledged
natural daughter of the deceased Lorenzo M. Quitco, for
legal purposes, but absolving the defendants as to the
prayer in the first cause of action that the said Ana Quitco
Ledesma be declared entitled to share in the properties left
by the deceased Eusebio Quitco.
As to the second cause of action, the said defendants are
ordered to pay to the plaintiff Socorro Ledesma, jointly and
severally, only the sum of one thousand five hundred
pesos(P1,500), with legal interest thereon from the filing of
this complaint until fully paid. No pronouncement is made as
to the costs. So ordered.
In support of their appeal, the appellants assign the following
errors allegedly committed by the trial court in its aforesaid
decision:
1. That the trial court erred in holding, that the action for the
recovery of the sum of P1,500, representing the last
installment of the note Exhibit C has not yet prescribed.
2. That the trial court erred in holding that the property
inherited by the defendants from their deceased grandfather
by the right of representation is subject to the debts and
obligations of their deceased father who died without any
property whatsoever.lawphi1.net
3. That the trial court erred in condemning the defendants to
pay jointly and severally the plaintiff Socorro Ledesma the
sum of P1,500.
The only facts to be considered in the determination of the
legal questions raised in this appeal are those set out in the
appealed decision, which have been established at the trial,
namely:
EN BANC
G.R. No. L-44837
November 23, 1938
In the year 1916, the plaintiff Socorro Ledesma lived

maritally with Lorenzo M. Quitco, while the latter was still
single, of which relation, lasting until the year 1921, was born

a daughter who is the other plaintiff Ana Quitco Ledesma. In
1921, it seems hat the relation between Socorro Ledesma
and Lorenzo M. Quitco came to an end, but the latter
executed a deed (Exhibit A), acknowledging the plaintiff Ana
Quitco Ledesma as his natural daughter and on January 21,
1922, he issued in favor of the plaintiff Socorro Ledesma a
promissory note (Exhibit C), of the following tenor:
P2,000. For value received I promise to pay Miss Socorro
Ledesma the sum of two thousand pesos (P2,000).
Philippine currency under the following terms: Two hundred
and fifty pesos (P250) to be paid on the first day of March
1922; another two hundred and fifty pesos (P250)to be paid
on the first day of
November 1922; the remaining one
thousand and five hundred (P1,500) to be paid two years
from the date of the execution of this note. San Enrique,
Occ. Negros, P. I., Jan. 21, 1922.
Subsequently, Lorenzo M. Quitco married the defendant
Conchita McLachlin, with whom he had four children, who
are the other defendants. On March 9, 1930, Lorenzo M.
Quitco died (Exhibit 5), and, still later, that is, on December
15, 1932, his father Eusebio Quitco also died, and as the
latter left real and personal properties upon his death,
administration proceedings of said properties were instituted
in this court, the said case being known as the "Intestate of
the deceased Eusebio Quitco," civil case No. 6153 of this
court.
Upon the institution of the intestate of the deceased Eusebio
Quitco and the appointment of the committee on claims and
appraisal, the plaintiff Socorro Ledesma, on August 26, 1935,
filed before said committee the aforequoted promissory note
for payment, and the commissioners, upon receipt of said
promissory note, instead of passing upon it, elevated the
same to this court en consulta (Exhibit F), and as the
Honorable Jose Lopez Vito, presiding over the First Branch,
returned said consulta and refrained from giving his opinion
thereon (Exhibit C), the aforesaid commissioners on claims
and appraisal, alleging lack of jurisdiction to pass upon the
claim, denied he same (Exhibit H).
On
November 14, 1933 (Exhibit I), the court issued
an order of declaration of heirs in the intestate of the
deceased Eusebio Quitco, and as Ana Quitco Ledesma was
not included among the declared heirs, Socorro Ledesma, as
mother of Ana Quitco Ledesma, asked for the
reconsideration of said order, a petition which the court
denied. From the order denying the said petition no appeal
was taken, and in lieu thereof there was filed the complaint
which gives rise to this case.
The first question to be decided in this appeal, raised in the
first assignment of alleged error, is whether or not the action
to recover the sum of P1,500, representing the last
installment for the payment of the promissory note Exhibit C,
has prescribed.
According to the promissory note Exhibit C, executed by the
deceased Lorenzo M. Quitco, on January 21, 1922, the last
installment of P1,500 should be paid two years from the date

of the execution of said promissory note, that is, on January
21, 1924. The complaint in the present case was filed on
June 26, 1934, that is, more than ten years after he
expiration of the said period. The fact that the plaintiff
Socorro Ledesma filed her claim, on August 26, 1933, with
the committee on claims and appraisal appointed in the
intestate of Eusebio Quitco, does not suspend the running of
the prescriptive period of the judicial action for the recovery
of said debt, because the claim for the unpaid balance of the
amount of the promissory note should no have been
presented in the intestate of Eusebio Quitco, the said
deceased not being the one who executed the same, but in
the intestate of Lorenzo M. Quitco, which should have been
instituted by the said Socorro Ledesma as provided in
section 642 of the Code of Civil Procedure, authorizing a
creditor to institute said case through the appointment of an
administrator for the purpose of collecting his credit. More
than ten years having thus elapsed from the expiration of the
period for the payment of said debt of P1,500, the action for
its recovery has prescribed under section 43, No. 1, of the
Code of Civil Procedure.
The first assignment of alleged error is, therefore, wellfounded.
As to the second assignment of alleged error, consisting in
that the trial court erred in holding that the properties
inherited by the defendants from their deceased grandfather
by representation are subject to the payment of debts and
obligations of their deceased father, who died without leaving
any property, while it is true that under the provisions of
articles 924 to 927 of the Civil Code, a children presents his
father or mother who died before him in the properties of his
grandfather or grandmother, this right of representation does
not make the said child answerable for the obligations
contracted by his deceased father or mother, because, as
may be seen from the provisions of the Code of Civil
Procedure referring to partition of inheritances, the
inheritance is received with the benefit of inventory, that is to
say, the heirs only answer with the properties received from
their predecessor. The herein defendants, as heirs of
Eusebio Quitco, in representation of their father Lorenzo M.
Quitco, are not bound to pay the indebtedness of their said
father from whom they did not inherit anything.
The second assignment of alleged error is also well-founded.
Being a mere sequel of the first two assignments of alleged
errors, the third assignment of error is also well-founded.
For the foregoing considerations, we are of the opinion and
so hold: (1) That the filing of a claim before the committee on
claims and appraisal, appointed in the intestate of the father,
for a monetary obligation contracted by a son who died
before him, does not suspend the prescriptive period of the
judicial action for the recovery of said indebtedness; (2) that
the claim for the payment of an indebtedness contracted by
a deceased person cannot be filed for its collection before
the committee on claims and appraisal, appointed in the

intestate of his father, and the properties inherited from the
latter by the children of said deceased do not answer for the
payment of the indebtedness contracted during the lifetime
of said person.
Wherefore, the appealed judgment is reversed, and the
defendants are absolved from the complaint, with the costs
to the appellees. So ordered.
One who is merely related by affinity to the decedent does

not inherit from the latter and cannot become a co-owner of
the decedents property. Consequently, he cannot effect a
repudiation of the co-ownership of the estate that was
formed among the decedents heirs.
Assailed in this Petition for Review on Certiorari 1 are the
March 14, 2006 Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 74687 and its September 7, 2006
Resolution3 denying petitioners Motion for Reconsideration.4
Factual Antecedents
ARTICLE 777
INING, ET. AL v. VEGA
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174727
August 12, 2013
ANTIPOLO INING (DECEASED), SURVIVED BY MANUEL

VILLANUEVA, TEODORA VILLANUEVA-FRANCISCO,
CAMILO FRANCISCO, ADOLFO FRANCISCO, LUCIMO
FRANCISCO, JR., MILAGROS FRANCISCO,* CELEDONIO
FRANCISCO, HERMINIGILDO FRANCISCO; RAMON
TRESVALLES, ROBERTO TAJONERA, NATIVIDAD
INING-IBEA (DECEASED) SURVIVED BY EDILBERTO
IBEA, JOSEFA IBEA, MARTHA IBEA, CARMEN IBEA,
AMPARO IBEA-FERNANDEZ, HENRY RUIZ, EUGENIO
RUIZ AND PASTOR RUIZ; DOLORES INING-RIMON
(DECEASED) SURVIVED BY JESUS RIMON, CESARIA
RIMON GONZALES AND REMEDIOS RIMON CORDERO;
AND PEDRO INING (DECEASED) SURVIVED BY ELISA
TAN INING (WIFE) AND PEDRO INING, JR.,
PETITIONERS,
vs.
LEONARDO R. VEGA, SUBSTITUTED BY LOURDES
VEGA, RESTONILO I. VEGA, CRISPULO M. VEGA,
MILBUENA VEGA-RESTITUTO, AND LENARD VEGA,
RESPONDENTS.
DECISION
DEL CASTILLO, J.:
Leon Roldan (Leon), married to Rafaela Menez (Rafaela), is

the owner of a 3,120-square meter parcel of land (subject
property) in Kalibo, Aklan covered by Original Certificate of
Title No. (24071) RO-6305 (OCT RO-630). Leon and Rafaela
died without issue. Leon was survived by his siblings
Romana Roldan (Romana) and Gregoria Roldan Ining
(Gregoria), who are now both deceased.
Romana was survived by her daughter Anunciacion Vega
and grandson, herein respondent Leonardo R. Vega
(Leonardo) (also both deceased). Leonardo in turn is
survived by his wife Lourdes and children Restonilo I. Vega,
Crispulo M. Vega, Milbuena Vega-Restituto and Lenard
Vega, the substituted respondents.
Gregoria, on the other hand, was survived by her six
children: petitioners Natividad Ining-Ibea (Natividad), Dolores
Ining-Rimon (Dolores), Antipolo, and Pedro; Jose; and
Amando. Natividad is survived by Edilberto Ibea, Josefa
Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez,
Henry Ruiz and Pastor Ruiz. Dolores is survived by Jesus
Rimon, Cesaria Rimon Gonzales and Remedios Rimon
Cordero. Antipolo is survived by Manuel Villanueva, daughter
Teodora Villanueva-Francisco (Teodora), Camilo Francisco
(Camilo), Adolfo Francisco (Adolfo), Lucimo Francisco, Jr.
(Lucimo Jr.), Milagros Francisco, Celedonio Francisco, and
Herminigildo Francisco (Herminigildo). Pedro is survived by
his wife, Elisa Tan Ining and Pedro Ining, Jr. Amando died
without issue. As for Jose, it is not clear from the records if
he was made party to the proceedings, or if he is alive at all.
In short, herein petitioners, except for Ramon Tresvalles
(Tresvalles) and Roberto Tajonera (Tajonera), are Gregorias
grandchildren or spouses thereof (Gregorias heirs).
In 1997, acting on the claim that one-half of subject property
belonged to him as Romanas surviving heir, Leonardo filed
with the Regional Trial Court (RTC) of Kalibo, Aklan Civil
Case No. 52756 for partition, recovery of ownership and
possession, with damages, against Gregorias heirs. In his
Amended Complaint,7 Leonardo alleged that on several
occasions, he demanded the partition of the property but
Gregorias heirs refused to heed his demands; that the
matter reached the level of the Lupon Tagapamayapa, which
issued a certification to file a court action sometime in 1980;
that Gregorias heirs claimed sole ownership of the property;
that portions of the property were sold to Tresvalles and

Tajonera, which portions must be collated and included as
part of the portion to be awarded to Gregorias heirs; that in
1979, Lucimo Francisco, Sr. (Lucimo Sr.), husband of herein
petitioner Teodora, illegally claimed absolute ownership of
the property and transferred in his name the tax declaration
covering the property; that from 1988, Lucimo Sr. and
Teodora have deprived him (Leonardo) of the fruits of the
property estimated at P1,000.00 per year; that as a result, he
incurred expenses by way of attorneys fees and litigation
costs. Leonardo thus prayed that he be declared the owner
of half of the subject property; that the same be partitioned
after collation and determination of the portion to which he is
entitled; that Gregorias heirs be ordered to execute the
necessary documents or agreements; and that he
(Leonardo) be awarded actual damages in the amount of
P1,000.00 per year from 1988, attorneys fees of
P50,000.00, and lawyers appearance fees of P500.00 per
hearing.
In their Answer8 with counterclaim, Teodora, Camilo, Adolfo,
Lucimo Jr. and Herminigildo claimed that Leonardo had no
cause of action against them; that they have become the
sole owners of the subject property through Lucimo Sr. who
acquired the same in good faith by sale from Juan Enriquez
(Enriquez), who in turn acquired the same from Leon, and
Leonardo was aware of this fact; that they were in
continuous, actual, adverse, notorious and exclusive
possession of the property with a just title; that they have
been paying the taxes on the property; that Leonardos claim
is barred by estoppel and laches; and that they have suffered
damages and were forced to litigate as a result of Leonardos
malicious suit. They prayed that Civil Case No. 5275 be
dismissed; that Leonardo be declared to be without any right
to the property; that Leonardo be ordered to surrender the
certificate of title to the property; and that they be awarded
P20,000.00 as moral damages, P10,000.00 as temperate
and nominal damages, P20,000.00 as attorneys fees, and
double costs.
The other Gregoria heirs, as well as Tresvalles and Tajonera
were declared in default.9
As agreed during pre-trial, the trial court commissioned
Geodetic Engineer Rafael M. Escabarte to identify the metes
and bounds of the property.10 The resulting Commissioners
Report and Sketch,11 as well as the Supplementary
Commissioners Report,12 were duly approved by the parties.
The parties then submitted the following issues for resolution
of the trial court:
During the course of the proceedings, the following

additional relevant facts came to light:
1. In 1995, Leonardo filed against petitioners Civil Case No.
4983 for partition with the RTC Kalibo, but the case was
dismissed and referred to the Kalibo Municipal Trial Court
(MTC), where the case was docketed as Civil Case No.
1366. However, on March 4, 1997, the MTC dismissed Civil
Case No. 1366 for lack of jurisdiction and declared that only
the RTC can take cognizance of the partition case;15
2. The property was allegedly sold by Leon to Enriquez
through an unnotarized document dated April 4, 1943.16
Enriquez in turn allegedly sold the property to Lucimo Sr. on
November 25, 1943 via another private sale document;17
3. Petitioners were in sole possession of the property for
more than 30 years, while Leonardo acquired custody of
OCT RO-630;18
4. On February 9, 1979, Lucimo Sr. executed an Affidavit of
Ownership of Land19 claiming sole ownership of the property
which he utilized to secure in his name Tax Declaration No.
16414 (TD 16414) over the property and to cancel Tax
Declaration No. 20102 in Leons name;20
5. Lucimo Sr. died in 1991; and
6. The property was partitioned among the petitioners, to the
exclusion of Leonardo.21
Ruling of the Regional Trial Court
On November 19, 2001, the trial court rendered a Decision, 22
which decreed as follows:
WHEREFORE, premises considered, judgment is hereby
rendered:
Dismissing the complaint on the ground that plaintiffs right of
action has long prescribed under Article 1141 of the New
Civil Code;
Whether Leon sold the subject property to Lucimo Sr.; and
Declaring Lot 1786 covered by OCT No. RO-630 (24071) to

be the common property of the heirs of Gregoria Roldan
Ining and by virtue whereof, OCT No. RO-630 (24071) is
ordered cancelled and the Register of Deeds of the Province
of Aklan is directed to issue a transfer certificate of title to the
heirs of Natividad Ining, one-fourth (1/4) share; Heirs of
Dolores Ining, one-fourth (1/4) share; Heirs of Antipolo Ining,
one-fourth (1/4) share; and Heirs of Pedro Ining, one-fourth
(1/4) share.
Whether Leonardos claim has prescribed, or that he is

barred by estoppel or laches.13
For lack of sufficient evidence, the counterclaim is ordered

dismissed.
In the meantime, Leonardo passed away and was duly

substituted by his heirs, the respondents herein.14
With cost against the plaintiffs.
Whether Leonardo is entitled to a share in Leons estate;
SO ORDERED.23

The trial court found the April 4, 1943 and November 25,
1943 deeds of sale to be spurious. It concluded that Leon
never sold the property to Enriquez, and in turn, Enriquez
never sold the property to Lucimo Sr., hence, the subject
property remained part of Leons estate at the time of his
death in 1962. Leons siblings, Romana and Gregoria, thus
inherited the subject property in equal shares. Leonardo and
the respondents are entitled to Romanas share as the
latters successors.
However, the trial court held that Leonardo had only 30 years
from Leons death in 1962 or up to 1992 within which to
file the partition case. Since Leonardo instituted the partition
suit only in 1997, the same was already barred by
prescription. It held that under Article 1141 of the Civil
Code,24 an action for partition and recovery of ownership and
possession of a parcel of land is a real action over
immovable property which prescribes in 30 years. In
addition, the trial court held that for his long inaction,
Leonardo was guilty of laches as well. Consequently, the
property should go to Gregorias heirs exclusively.
Respondents moved for reconsideration25 but the same was
denied by the RTC in its February 7, 2002 Order.26
Ruling of the Court of Appeals
Only respondents interposed an appeal with the CA.
Docketed as CA-G.R. CV No. 74687, the appeal questioned
the propriety of the trial courts dismissal of Civil Case No.
5275, its application of Article 1141, and the award of the
property to Gregorias heirs exclusively.
On March 14, 2006, the CA issued the questioned
Decision,27 which contained the following decretal portion:
IN LIGHT OF ALL THE FOREGOING, this appeal is
GRANTED. The decision of the Regional Trial Court, Br. 8,
Kalibo, Aklan in Civil Case No. 5275 is REVERSED and SET
ASIDE. In lieu thereof, judgment is rendered as follows:
1. Declaring 1/2 portion of Lot 1786 as the share of the
plaintiffs as successors-in-interest of Romana Roldan;
2. Declaring 1/2 portion of Lot 1786 as the share of the
defendants as successors-in-interest of Gregoria Roldan
Ining;
3. Ordering the defendants to deliver the possession of the
portion described in paragraphs 8 and 9 of the
Commissioners Report (Supplementary) to the herein
plaintiffs;
4. Ordering the cancellation of OCT No. RO-630 (24071) in
the name of Leon Roldan and the Register of Deeds of Aklan
is directed to issue transfer certificates of title to the plaintiffs
in accordance with paragraphs 8 and 9 of the sketch plan as
embodied in the Commissioners Report (Supplementary)
and the remaining portion thereof be adjudged to the

defendants.
Other claims and counterclaims are dismissed.
Costs against the defendants-appellees.
SO ORDERED.28
The CA held that the trial courts declaration of nullity of the
April 4, 1943 and November 25, 1943 deeds of sale in favor
of Enriquez and Lucimo Sr., respectively, became final and
was settled by petitioners failure to appeal the same.
Proceeding from the premise that no valid prior disposition of
the property was made by its owner Leon and that the
property which remained part of his estate at the time of
his death passed on by succession to his two siblings,
Romana and Gregoria, which thus makes the parties herein
who are Romanas and Gregorias heirs co-owners of the
property in equal shares, the appellate court held that only
the issues of prescription and laches were needed to be
resolved.
The CA did not agree with the trial courts pronouncement
that Leonardos action for partition was barred by
prescription. The CA declared that prescription began to run
not from Leons death in 1962, but from Lucimo Sr.s
execution of the Affidavit of Ownership of Land in 1979,
which amounted to a repudiation of his co-ownership of the
property with Leonardo. Applying the fifth paragraph of
Article 494 of the Civil Code, which provides that "[n]o
prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership," the CA held that it
was only when Lucimo Sr. executed the Affidavit of
Ownership of Land in 1979 and obtained a new tax
declaration over the property (TD 16414) solely in his name
that a repudiation of his co-ownership with Leonardo was
made, which repudiation effectively commenced the running
of the 30-year prescriptive period under Article 1141.
The CA did not consider Lucimo Sr.s sole possession of the
property for more than 30 years to the exclusion of Leonardo
and the respondents as a valid repudiation of the coownership either, stating that his exclusive possession of the
property and appropriation of its fruits even his continuous
payment of the taxes thereon while adverse as against
strangers, may not be deemed so as against Leonardo in the
absence of clear and conclusive evidence to the effect that
the latter was ousted or deprived of his rights as co-owner
with the intention of assuming exclusive ownership over the
property, and absent a showing that this was effectively
made known to Leonardo. Citing Bargayo v. Camumot 29 and
Segura v. Segura,30 the appellate court held that as a rule,
possession by a co-owner will not be presumed to be
adverse to the other co-owners but will be held to benefit all,
and that a co-owner or co-heir is in possession of an
inheritance pro-indiviso for himself and in representation of
his co-owners or co-heirs if he administers or takes care of
the rest thereof with the obligation to deliver the same to his

co-owners or co-heirs, as is the case of a depositary, lessee
or trustee.
The CA added that the payment of taxes by Lucimo Sr. and
the issuance of a new tax declaration in his name do not
prove ownership; they merely indicate a claim of ownership.
Moreover, petitioners act of partitioning the property among
themselves to the exclusion of Leonardo cannot affect the
latter; nor may it be considered a repudiation of the coownership as it has not been shown that the partition was
made known to Leonardo.
Petitioners contend that Leonardos inaction from Lucimo

Sr.s taking possession in 1943, up to 1995, when Leonardo
filed Civil Case No. 4983 for partition with the RTC Kalibo
amounted to laches or neglect. They add that during the
proceedings before the Lupon Tagapamayapa in 1980,
Leonardo was informed of Lucimo Sr.s purchase of the
property in 1943; this notwithstanding, Leonardo did not take
action then against Lucimo Sr. and did so only in 1995, when
he filed Civil Case No. 4983 which was eventually
dismissed and referred to the MTC. They argue that, all this
time, Leonardo did nothing while Lucimo Sr. occupied the
property and claimed all its fruits for himself.
The CA held further that the principle of laches cannot apply

as against Leonardo and the respondents. It held that laches
is controlled by equitable considerations and it cannot be
used to defeat justice or to perpetuate fraud; it cannot be
utilized to deprive the respondents of their rightful
inheritance.
On the basis of the above pronouncements, the CA granted
respondents prayer for partition, directing that the manner of
partitioning the property shall be governed by the
Commissioners Report and Sketch and the Supplementary
Commissioners Report which the parties did not contest.
Petitioners filed their Motion for Reconsideration31 which the
CA denied in its assailed September 7, 2006 Resolution. 32
Hence, the present Petition.
Issues
Petitioners raise the following arguments:
I
THE APPELLATE COURT COMMITTED GRAVE ABUSE OF
DISCRETION IN REVERSING THE DECISION OF THE
TRIAL COURT ON THE GROUND THAT LUCIMO
FRANCISCO REPUDIATED THE CO-OWNERSHIP ONLY
ON FEBRUARY 9, 1979.
II
THE APPELLATE COURT ERRED IN NOT UPHOLDING
THE DECISION OF THE TRIAL COURT DISMISSING THE
COMPLAINT ON THE GROUND OF PRESCRIPTION AND
LACHES.33
Petitioners Arguments
Respondents Arguments
Respondents, on the other hand, argue in their Comment35
that
For purposes of clarity, if [sic] is respectfully submitted that
eighteen (18) legible copies has [sic] not been filed in this
case for consideration in banc [sic] and nine (9) copies in
cases heard before a division in that [sic] all copies of
pleadings served to the offices concern [sic] where said
order [sic] was issued were not furnished two (2) copies
each in violation to [sic] the adverse parties [sic] to the clerk
of court, Regional Trial Court, Branch 8, Kalibo, Aklan,
Philippines; to the Honorable Court of Appeals so that No
[sic] action shall be taken on such pleadings, briefs,
memoranda, motions, and other papers as fail [sic] to comply
with the requisites set out in this paragraph.
The foregoing is confirmed by affidavit of MERIDON F.
OLANDESCA, the law secretary of the Petitioner [sic] who
sent [sic] by Registered mail to Court of Appeals, Twentieth
Division, Cebu City; to Counsel for Respondent [sic] and to
the Clerk of Court Supreme Court Manila [sic].
These will show that Petitioner has [sic] violated all the
requirements of furnishing two (2) copies each concerned
party [sic] under the Rule of Courts [sic].36
Our Ruling
The Court denies the Petition.
34
Petitioners insist in their Petition and Reply that Lucimo

Sr.s purchase of the property in 1943 and his possession
thereof amounted to a repudiation of the co-ownership, and
that Leonardos admission and acknowledgment of Lucimo
Sr.s possession for such length of time operated to bestow
upon petitioners as Lucimo Sr.s successors-in-interest
the benefits of acquisitive prescription which proceeded from
the repudiation.
The finding that Leon did not sell the property to Lucimo Sr.
had long been settled and had become final for failure of
petitioners to appeal. Thus, the property remained part of
Leons estate.
One issue submitted for resolution by the parties to the trial
court is whether Leon sold the property to Lucimo
Sr.1wphi1 The trial court, examining the two deeds of sale

executed in favor of Enriquez and Lucimo Sr., found them to
be spurious. It then concluded that no such sale from Leon
to Lucimo Sr. ever took place. Despite this finding,
petitioners did not appeal. Consequently, any doubts
regarding this matter should be considered settled. Thus,
petitioners insistence on Lucimo Sr.s 1943 purchase of the
property to reinforce their claim over the property must be
ignored. Since no transfer from Leon to Lucimo Sr. took
place, the subject property clearly remained part of Leons
estate upon his passing in 1962.
Leon died without issue; his heirs are his siblings Romana
and Gregoria.
Since Leon died without issue, his heirs are his siblings,
Romana and Gregoria, who thus inherited the property in
equal shares. In turn, Romanas and Gregorias heirs the
parties herein became entitled to the property upon the
sisters passing. Under Article 777 of the Civil Code, the
rights to the succession are transmitted from the moment of
death.
Gregorias and Romanas heirs are co-owners of the subject
property.
Thus, having succeeded to the property as heirs of Gregoria
and Romana, petitioners and respondents became coowners thereof. As co-owners, they may use the property
owned in common, provided they do so in accordance with
the purpose for which it is intended and in such a way as not
to injure the interest of the co-ownership or prevent the other
co-owners from using it according to their rights.37 They have
the full ownership of their parts and of the fruits and benefits
pertaining thereto, and may alienate, assign or mortgage
them, and even substitute another person in their enjoyment,
except when personal rights are involved.38 Each co-owner
may demand at any time the partition of the thing owned in
common, insofar as his share is concerned.39 Finally, no
prescription shall run in favor of one of the co-heirs against
the others so long as he expressly or impliedly recognizes
the co-ownership.40
For prescription to set in, the repudiation must be done by a
co-owner.
Time and again, it has been held that "a co-owner cannot
acquire by prescription the share of the other co-owners,
absent any clear repudiation of the co-ownership. In order
that the title may prescribe in favor of a co-owner, the
following requisites must concur: (1) the co-owner has
performed unequivocal acts of repudiation amounting to an
ouster of the other co-owners; (2) such positive acts of
repudiation have been made known to the other co-owners;
and (3) the evidence thereof is clear and convincing."41
From the foregoing pronouncements, it is clear that the trial
court erred in reckoning the prescriptive period within which
Leonardo may seek partition from the death of Leon in 1962.
Article 1141 and Article 494 (fifth paragraph) provide that
prescription shall begin to run in favor of a co-owner and
against the other co-owners only from the time he positively

renounces the co-ownership and makes known his
repudiation to the other co-owners.
Lucimo Sr. challenged Leonardos co-ownership of the
property only sometime in 1979 and 1980, when the former
executed the Affidavit of Ownership of Land, obtained a new
tax declaration exclusively in his name, and informed the
latter before the Lupon Tagapamayapa of his 1943
purchase of the property. These apparent acts of repudiation
were followed later on by Lucimo Sr.s act of withholding
Leonardos share in the fruits of the property, beginning in
1988, as Leonardo himself claims in his Amended
Complaint. Considering these facts, the CA held that
prescription began to run against Leonardo only in 1979 or
even in 1980 when it has been made sufficiently clear to
him that Lucimo Sr. has renounced the co-ownership and
has claimed sole ownership over the property. The CA thus
concluded that the filing of Civil Case No. 5275 in 1997, or
just under 20 years counted from 1979, is clearly within the
period prescribed under Article 1141.
What escaped the trial and appellate courts notice, however,
is that while it may be argued that Lucimo Sr. performed acts
that may be characterized as a repudiation of the coownership, the fact is, he is not a co-owner of the property.
Indeed, he is not an heir of Gregoria; he is merely Antipolos
son-in-law, being married to Antipolos daughter Teodora. 42
Under the Family Code, family relations, which is the primary
basis for succession, exclude relations by affinity.
Art. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half
blood.
In point of law, therefore, Lucimo Sr. is not a co-owner of the
property; Teodora is. Consequently, he cannot validly effect a
repudiation of the co-ownership, which he was never part of.
For this reason, prescription did not run adversely against
Leonardo, and his right to seek a partition of the property has
not been lost.
Likewise, petitioners argument that Leonardos admission
and acknowledgment in his pleadings that Lucimo Sr. was
in possession of the property since 1943 should be taken
against him, is unavailing. In 1943, Leon remained the
rightful owner of the land, and Lucimo Sr. knew this very
well, being married to Teodora, daughter of Antipolo, a
nephew of Leon. More significantly, the property, which is
registered under the Torrens system and covered by OCT
RO-630, is in Leons name. Leons ownership ceased only in
1962, upon his death when the property passed on to his
heirs by operation of law.

In fine, since none of the co-owners made a valid repudiation
of the existing co-ownership, Leonardo could seek partition
of the property at any time.
WHEREFORE, the Petition is DENIED. The assailed March
14, 2006 Decision and the September 7, 2006 Resolution of
the Court of Appeals in CA-G.R. CV No. 74687are
AFFIRMED.
Apart from the respondents, the demise of the decedent left

in mourning his paramour and their children. They are
petitioner Teodora Riofero, who became a part of his life
when he entered into an extra-marital relationship with her
during the subsistence of his marriage to Esperanza
sometime in 1965, and co-petitioners Veronica 5, Alberto and
Rowena.6
SO ORDERED.
RIOFERA v. CA
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 129008
He also left a widow, respondent Esperanza P. Orfinada,

whom he married on July 11, 1960 and with whom he had
seven children who are the herein respondents, namely:
Lourdes P. Orfinada, Alfonso "Clyde" P. Orfinada, Nancy P.
Orfinada-Happenden,
Alfonso
James
P.
Orfinada,
Christopher P. Orfinada, Alfonso Mike P. Orfinada
(deceased) and Angelo P. Orfinada.4
January 13, 2004
TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA

assisted by her husband ZALDY EVANGELISTA,
ALBERTO ORFINADA, and ROWENA O. UNGOS,
assisted by her husband BEDA UNGOS, petitioners,
vs.
COURT OF APPEALS, ESPERANZA P. ORFINADA,
LOURDES P. ORFINADA, ALFONSO ORFINADA, NANCY
P. ORFINADA, ALFONSO JAMES P. ORFINADA,
CHRISTOPHER P. ORFINADA and ANGELO P.
ORFINADA, respondents.
DECISION
TINGA, J.:
Whether the heirs may bring suit to recover property of the
estate pending the appointment of an administrator is the
issue in this case.
This Petition for Review on Certiorari, under Rule 45 of the
Rules of Court, seeks to set aside the Decision1 of the Court
of Appeals in CA-G.R. SP No. 42053 dated January 31,
1997, as well as its Resolution2 dated March 26, 1997,
denying petitioners motion for reconsideration.
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will
in Angeles City leaving several personal and real properties
located in Angeles City, Dagupan City and Kalookan City.3
On November 14, 1995, respondents Alfonso James and

Lourdes Orfinada discovered that on June 29, 1995,
petitioner Teodora Rioferio and her children executed an
Extrajudicial Settlement of Estate of a Deceased Person with
Quitclaim involving the properties of the estate of the
decedent located in Dagupan City and that accordingly, the
Registry of Deeds in Dagupan issued Certificates of Titles
Nos. 63983, 63984 and 63985 in favor of petitioners Teodora
Rioferio, Veronica Orfinada-Evangelista, Alberto Orfinada
and Rowena Orfinada-Ungos. Respondents also found out
that petitioners were able to obtain a loan of P700,000.00
from the Rural Bank of Mangaldan Inc. by executing a Real
Estate Mortgage over the properties subject of the extrajudicial settlement.7
On December 1, 1995, respondent Alfonso "Clyde" P.
Orfinada III filed a Petition for Letters of Administration
docketed as S.P. Case No. 5118 before the Regional Trial
Court of Angeles City, praying that letters of administration
encompassing the estate of Alfonso P. Orfinada, Jr. be
issued to him.8
On December 4, 1995, respondents filed a Complaint for the
Annulment/Rescission of Extra Judicial Settlement of Estate
of a Deceased Person with Quitclaim, Real Estate Mortgage
and Cancellation of Transfer Certificate of Titles with Nos.
63983, 63985 and 63984 and Other Related Documents with
Damages against petitioners, the Rural Bank of Mangaldan,
Inc. and the Register of Deeds of Dagupan City before the
Regional Trial Court, Branch 42, Dagupan City.9
On February 5, 1996, petitioners filed their Answer to the
aforesaid complaint interposing the defense that the property
subject of the contested deed of extra-judicial settlement
pertained to the properties originally belonging to the parents
of Teodora Riofero10 and that the titles thereof were delivered
to her as an advance inheritance but the decedent had
managed to register them in his name.11 Petitioners also
raised the affirmative defense that respondents are not the
real parties-in-interest but rather the Estate of Alfonso O.
Orfinada, Jr. in view of the pendency of the administration
proceedings.12 On April 29, 1996, petitioners filed a Motion to
Set Affirmative Defenses for Hearing13 on the aforesaid
ground.

The lower court denied the motion in its Order14 dated June
27, 1996, on the ground that respondents, as heirs, are the
real parties-in-interest especially in the absence of an
administrator who is yet to be appointed in S.P. Case No.
5118. Petitioners moved for its reconsideration15 but the
motion was likewise denied.16
This prompted petitioners to file before the Court of Appeals
their Petition for Certiorari under Rule 65 of the Rules of
Court docketed as CA G.R. S.P. No. 42053. 17 Petitioners
averred that the RTC committed grave abuse of discretion in
issuing the assailed order which denied the dismissal of the
case on the ground that the proper party to file the complaint
for the annulment of the extrajudicial settlement of the estate
of the deceased is the estate of the decedent and not the
respondents.18
The Court of Appeals rendered the assailed Decision19 dated
January 31, 1997, stating that it discerned no grave abuse of
discretion amounting to lack or excess of jurisdiction by the
public respondent judge when he denied petitioners motion
to set affirmative defenses for hearing in view of its
discretionary nature.
A Motion for Reconsideration was filed by petitioners but it
was denied.20 Hence, the petition before this Court.
The issue presented by the petitioners before this Court is
whether the heirs have legal standing to prosecute the rights
belonging to the deceased subsequent to the
commencement of the administration proceedings.21
Petitioners vehemently fault the lower court for denying their
motion to set the case for preliminary hearing on their
affirmative defense that the proper party to bring the action is
the estate of the decedent and not the respondents. It must
be stressed that the holding of a preliminary hearing on an
affirmative defense lies in the discretion of the court. This is
clear from the Rules of Court, thus:
SEC. 5. Pleadings grounds as affirmative defenses.- Any of
the grounds for dismissal provided for in this rule, except
improper venue, may be pleaded as an affirmative defense,
and a preliminary hearing may be had thereon as if a motion
to dismiss had been filed.22 (Emphasis supplied.)
Certainly, the incorporation of the word "may" in the provision
is clearly indicative of the optional character of the
preliminary hearing. The word denotes discretion and cannot
be construed as having a mandatory effect.23 Subsequently,
the electivity of the proceeding was firmed up beyond cavil
by the 1997 Rules of Civil Procedure with the inclusion of the
phrase "in the discretion of the Court", apart from the
retention of the word "may" in Section 6,24 in Rule 16 thereof.
Just as no blame of abuse of discretion can be laid on the
lower courts doorstep for not hearing petitioners affirmative
defense, it cannot likewise be faulted for recognizing the
legal standing of the respondents as heirs to bring the suit.
Pending the filing of administration proceedings, the heirs

without doubt have legal personality to bring suit in behalf of
the estate of the decedent in accordance with the provision
of Article 777 of the New Civil Code "that (t)he rights to
succession are transmitted from the moment of the death of
the decedent." The provision in turn is the foundation of the
principle that the property, rights and obligations to the extent
and value of the inheritance of a person are transmitted
through his death to another or others by his will or by
operation of law.25
Even if administration proceedings have already been
commenced, the heirs may still bring the suit if an
administrator has not yet been appointed. This is the proper
modality despite the total lack of advertence to the heirs in
the rules on party representation, namely Section 3, Rule 326
and Section 2, Rule 8727 of the Rules of Court. In fact, in the
case of Gochan v. Young,28 this Court recognized the legal
standing of the heirs to represent the rights and properties of
the decedent under administration pending the appointment
of an administrator. Thus:
The above-quoted rules,29 while permitting an executor or
administrator to represent or to bring suits on behalf of the
deceased, do not prohibit the heirs from representing the
deceased. These rules are easily applicable to cases in
which an administrator has already been appointed. But
no rule categorically addresses the situation in which
special proceedings for the settlement of an estate have
already been instituted, yet no administrator has been
appointed. In such instances, the heirs cannot be expected
to wait for the appointment of an administrator; then wait
further to see if the administrator appointed would care
enough to file a suit to protect the rights and the interests of
the deceased; and in the meantime do nothing while the
rights and the properties of the decedent are violated or
dissipated.
Even if there is an appointed administrator, jurisprudence
recognizes two exceptions, viz: (1) if the executor or
administrator is unwilling or refuses to bring suit; 30 and (2)
when the administrator is alleged to have participated in the
act complained of31 and he is made a party defendant. 32
Evidently, the necessity for the heirs to seek judicial relief to
recover property of the estate is as compelling when there is
no appointed administrator, if not more, as where there is an
appointed administrator but he is either disinclined to bring
suit or is one of the guilty parties himself.
All told, therefore, the rule that the heirs have no legal
standing to sue for the recovery of property of the estate
during the pendency of administration proceedings has three
exceptions, the third being when there is no appointed
administrator such as in this case.
As the appellate court did not commit an error of law in
upholding the order of the lower court, recourse to this Court
is not warranted.

WHEREFORE, the petition for review is DENIED. The
assailed decision and resolution of the Court of Appeals are
hereby AFFIRMED. No costs.
SO ORDERED.
and her brother-in-law, Tomas Calpatura, Sr., executed on

April 26, 1968 an Agreement of Purchase and Sale whereby
the former agreed to sell to the latter the northern half portion
of the property for the sum of P10,500.00. 1 On July 28, 1973,
Narcisa executed a Deed of Absolute Sale in favor of Tomas
over the said property.2
In 1976, Tomas daughter, Flordeliza Calpatura Flora, built a
two-storey duplex with firewall3 on the northern half portion of
the property. Respondents, who occupied the southern half
portion of the land, did not object to the construction.
Flordeliza Flora and her husband Wilfredo declared the
property for taxation purposes4 and paid the corresponding
taxes thereon.5 Likewise, Maximo Calpatura, the son of
Tomas cousin, built a small house on the northern portion of
the property.
HEIRS OF TOMAS CALPATURA, SR. v. PRADO

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 156879
January 20, 2004
FLORDELIZA CALPATURA FLORA, DOMINADOR

CALPATURA and TOMAS CALPATURA, JR., Heirs of
TOMAS CALPATURA, SR., Petitioners,
vs.
ROBERTO, ERLINDA, DANIEL, GLORIA, PATRICIO, JR.
and EDNA, all surnamed PRADO and NARCISA PRADO,
Respondents.
DECISION
YNARES-SANTIAGO, J.:
The property under litigation is the northern half portion of a
residential land consisting of 552.20 square meters, more or
less, situated at 19th Avenue, Murphy, Quezon City and
covered by Transfer Certificate of Title No. 71344 issued on
August 15, 1963 by the Register of Deeds of Quezon City in
the name of Narcisa Prado and her children by her first
husband, Patricio Prado, Sr., namely, Roberto, Erlinda,
Daniel, Gloria, Patricio, Jr. and Edna, respondents herein.
The pertinent facts are as follows:
On December 19, 1959, Patricio Prado, Sr. died. Narcisa
subsequently married Bonifacio Calpatura. In order to
support her minor children with her first husband, Narcisa
On April 8, 1991, respondents filed a complaint for

declaration of nullity of sale and delivery of possession of the
northern half portion of the subject property against
petitioners Flordeliza Calpatura Flora, Dominador Calpatura
and Tomas Calpatura, Jr. before the Regional Trial Court of
Quezon City, Branch 100, docketed as Civil Case No. Q-918404.6 Respondents alleged that the transaction embodied in
the Agreement to Purchase and Sale between Narcisa and
Tomas was one of mortgage and not of sale; that Narcisas
children tried to redeem the mortgaged property but they
learned that the blank document which their mother had
signed was transformed into a Deed of Absolute Sale; that
Narcisa could not have sold the northern half portion of the
property considering that she was prohibited from selling the
same within a period of 25 years from its acquisition,
pursuant to the condition annotated at the back of the title; 7
that Narcisa, as natural guardian of her children, had no
authority to sell the northern half portion of the property
which she and her children co-owned; and that only
P5,000.00 out of the consideration of P10,500.00 was paid
by Tomas.
In their answer, petitioners countered that Narcisa owned
9/14 of the property, consisting of as her share in the
conjugal partnership with her first husband and 1/7 as her
share in the estate of her deceased husband; that the
consideration of the sale in the amount of P10,500.00 had
been fully paid as of April 1, 1968; that Narcisa sold her
conjugal share in order to support her minor children; that
Narcisas claim was barred by laches and prescription; and
that the Philippine Homesite and Housing Corporation, not
the respondents, was the real party in interest to question
the sale within the prohibited period.
On April 2, 1997, the court a quo8 dismissed the complaint. It
found that the sale was valid; that the Agreement to
Purchase and Sale and the Deed of Absolute Sale were duly
executed; that the sum of P10,500.00 as selling price for the
subject property was fully paid there being no demand for
the payment of the remaining balance; that the introduction
of improvements thereon by the petitioners was without
objection from the respondents; and that Roberto and
Erlinda failed to contest the transaction within four years

after the discovery of the alleged fraud and reaching the
majority age in violation of Article 1391 of the Civil Code.9
Petitioners appealed the decision to the Court of Appeals,
where it was docketed as CA-G.R. CV No. 56843. On
October 3, 2002, a decision10 was rendered by the Court of
Appeals declaring that respondents were co-owners of the
subject property, thus the sale was valid only insofar as
Narcisas 1/7 undivided share thereon was concerned. The
dispositive portion of the said decision reads:
WHEREFORE, the appealed Decision is AFFIRMED, with
the MODIFICATION that the sale in dispute is declared valid
only with respect to the one-seventh (1/7) share of plaintiffappellant NARCISA H. PRADO in the subject property, which
is equivalent to 78.8857 square meters. In all other respects,
the same decision stands. No pronouncement as to costs.
IV
THAT THE DECISION OF THE HON. COURT OF APPEALS
WILL UNDULY ENRICH THE RESPONDENTS AT THE
EXPENSE OF THE HEREIN PETITIONERS.13
At the outset, it must be stressed that only questions of law
may be raised in petitions for review before this Court under
Rule 45 of the Rules of Court.14 It was thus error for
petitioners to ascribe to the Court of Appeals grave abuse of
discretion. This procedural lapse notwithstanding, in the
interest of justice, this Court shall treat the issues as cases
of reversible error.15
The issues for resolution are: (1) Is the subject property
conjugal or paraphernal? (2) Is the transaction a sale or a
mortgage? (3) Assuming that the transaction is a sale, what
was the area of the land subject of the sale?
SO ORDERED.11
Petitioner filed a motion for reconsideration which was
denied in a Resolution dated January 14, 2003.12 Hence this
petition for review on the following assigned errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED A
GRAVE ABUSE OF DISCRETION IN MODIFYING THE
DECISION RENDERED BY THE REGIONAL TRIAL COURT
WITHOUT TAKING INTO CONSIDERATION THAT, ASIDE
FROM THE DECLARATION OF THE VALIDITY OF THE
SALE, THE PETITIONERS HEREIN HAVE TAKEN ACTUAL
POSSESSION OF THE SAID ONE-HALF (1/2) TO THE
EXCLUSION OF THE RESPONDENTS AND INTRODUCED
IMPROVEMENTS THEREON.
II
GRAVE ABUSE OF DISCRETION IN MODIFYING THE
DECISION RENDERED BY THE REGIONAL TRIAL COURT
WITHOUT TAKING INTO CONSIDERATION THE CLEAR
AND UNEQUIVOCAL STATEMENT IN THE SALE THAT
THE SAME PERTAINS TO THE CONJUGAL SHARE OF
RESPONDENT NARCISA PRADO AND THE OTHER
RESPONDENTS HAD NO FINANCIAL CAPACITY TO
ACQUIRE THE SAID PROPERTY SINCE THEY WERE
MINORS THEN AT THE ISSUANCE OF THE SAID TCT NO.
71344 ON AUGUST 15, 1963.
III
GRAVE ABUSE OF DISCRETION IN NOT DECLARING
THE HEREIN RESPONDENTS GUILTY OF LACHES IN
FILING THE INSTANT CASE ONLY ON APRIL 8, 1991,
THAT IS 18 YEARS AFTER THE SAID SALE WITH THE
PETITIONERS TAKING ACTUAL POSSESSION OF SAID
PORTION OF THE PROPERTY.
Article 160 of the Civil Code, which was in effect at the time
the sale was entered into, provides that all property of the
marriage is presumed to belong to the conjugal partnership
unless it is proved that it pertains exclusively to the husband
or to the wife. Proof of acquisition during the marriage is a
condition sine qua non in order for the presumption in favor
of conjugal ownership to operate.16
In the instant case, while Narcisa testified during crossexamination that she bought the subject property from
Peoples Homesite Housing Corporation with her own
funds,17 she, however admitted in the Agreement of
Purchase and Sale and the Deed of Absolute Sale that the
property was her conjugal share with her first husband,
Patricio, Sr.18 A verbal assertion that she bought the land with
her own funds is inadmissible to qualify the terms of a written
agreement under the parole evidence rule.19 The so-called
parole evidence rule forbids any addition to or contradiction
of the terms of a written instrument by testimony or other
evidence purporting to show that, at or before the execution
of the parties written agreement, other or different terms
were agreed upon by the parties, varying the purport of the
written contract. Whatever is not found in the writing is
understood to have been waived and abandoned.20
Anent the second issue, the Deed of Absolute Sale executed
by Narcisa in favor of Tomas is contained in a notarized 21
document. In Spouses Alfarero, et al. v. Spouses Sevilla, et
al.,22 it was held that a public document executed and
attested through the intervention of a notary public is
evidence of the facts in a clear, unequivocal manner therein
expressed. Otherwise stated, public or notarial documents,
or those instruments duly acknowledged or proved and
certified as provided by law, may be presented in evidence
without further proof, the certificate of acknowledgment being
prima facie evidence of the execution of the instrument or
document involved. In order to contradict the presumption of
regularity of a public document, evidence must be clear,
convincing, and more than merely preponderant.

It is well-settled that in civil cases, the party that alleges a
fact has the burden of proving it.23 Except for the bare
allegation that the transaction was one of mortgage and not
of sale, respondents failed to adduce evidence in support
thereof. Respondents also failed to controvert the
presumption that private transactions have been fair and
regular.24
Furthermore, Narcisa, in fact did not deny that she executed
an Affidavit allowing spouses Wilfredo and Flordeliza Flora to
construct a firewall between the two-storey duplex and her
house sometime in 1976. The duplex was made of strong
materials, the roofing being galvanized sheets. While the
deed of sale between Tomas and Narcisa was never
registered nor annotated on the title, respondents had
knowledge of the possession of petitioners of the northern
half portion of the property. Obviously, respondents
recognized the ownership of Tomas, petitioners
predecessor-in-interest.
Respondents belatedly claimed that only P5,000.00 out of
the P10,500.00 consideration was paid.1wphi1 Both the
Agreement of Purchase and Sale and the Deed of Absolute
Sale state that said consideration was paid in full. Moreover,
the presumption is that there was sufficient consideration for
a written contract.25
The property being conjugal, upon the death of Patricio
Prado, Sr., one-half of the subject property was automatically
reserved to the surviving spouse, Narcisa, as her share in
the conjugal partnership. Particios rights to the other half, in
turn, were transmitted upon his death to his heirs, which
includes his widow Narcisa, who is entitled to the same
share as that of each of the legitimate children. Thus, as a
result of the death of Patricio, a regime of co-ownership
arose between Narcisa and the other heirs in relation to the
property. The remaining one-half was transmitted to his heirs
by intestate succession. By the law on intestate succession,
his six children and Narcisa Prado inherited the same at oneseventh (1/7) each pro indiviso.26 Inasmuch as Narcisa
inherited one-seventh (1/7) of her husband's conjugal share
in the said property and is the owner of one-half (1/2) thereof
as her conjugal share, she owns a total of 9/14 of the subject
property. Hence, Narcisa could validly convey her total
undivided share in the entire property to Tomas. Narcisa and
her children are deemed co-owners of the subject property.
assumption that the mortgage to appellee Salud and the

foreclosure sale violated the condition in the Sarmiento
contract, only the PHHC was entitled to invoke the condition
aforementioned, and not the Sarmientos. The validity or
invalidity of the sheriff's foreclosure sale to appellant Salud
thus depended exclusively on the PHHC; the latter could
attack the sale as violative of its right of exclusive
reacquisition; but it (PHHC) also could waive the condition
and treat the sale as good, in which event, the sale can not
be assailed for breach of the condition aforestated.
Finally, no particular portion of the property could be
identified as yet and delineated as the object of the sale
considering that the property had not yet been partitioned in
accordance with the Rules of Court.28 While Narcisa could
validly sell one half of the subject property, her share being
9/14 of the same, she could not have particularly conveyed
the northern portion thereof before the partition, the terms of
which was still to be determined by the parties before the
trial court.
WHEREFORE, the Decision of the Court of Appeals on
October 3, 2002, as well as the Resolution dated January
14, 2003 is PARTLY AFFIRMED subject to the following
MODIFICATIONS:
1) Narcisa Prado is entitled to 9/14 of the residential land
consisting of 552.20 square meters, more or less, situated at
19th Avenue, Murphy, Quezon City and covered by Transfer
Certificate of Title No. 71344;
2) the sale of the undivided one half portion thereof by
Narcisa Prado in favor of Tomas Calpatura, Sr. is valid.
Furthermore, the case is REMANDED to the court of origin,
only for the purpose of determining the specific portion being
conveyed in favor of Tomas Calpatura, Sr. pursuant to the
partition that will be agreed upon by the respondents.
SO ORDERED.
FELIPE v. HEIRS OF ALDON
SUPREME COURT
Manila
Neither can the respondents invoke the proscription of

encumbering the property within 25 years from acquisition. In
Sarmiento, et al. v. Salud, et al.,27 it was held that:
SECOND DIVISION
G.R. No. L-60174
xxx The condition that the appellees Sarmiento spouses

could not resell the property except to the Peoples Homesite
and Housing Corporation (PHHC for short) within the next 25
years after appellees purchasing the lot is manifestly a
condition in favor of the PHHC, and not one in favor of the
Sarmiento spouses. The condition conferred no actionable
right on appellees herein, since it operated as a restriction
upon their jus disponendi of the property they bought, and
thus limited their right of ownership. It follows that on the
February 16, 1983
EDUARDO FELIPE, HERMOGENA V. FELIPE AND

VICENTE V. FELIPE, petitioners,
vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA
ALMOSARA, SOFIA ALDON, SALVADOR ALDON, AND
THE HONORABLE COURT OF APPEALS, respondents.
Romulo D. San Juan for petitioner.

Gerundino Castillejo for private respondent.
ABAD SANTOS, J.:

Maximo Aldon married Gimena Almosara in 1936. The
spouses bought several pieces of land sometime between
1948 and 1950. In 1960-62, the lands were divided into three
lots, 1370, 1371 and 1415 of the San Jacinto Public Land
Subdivision, San Jacinto, Masbate.
In 1951, Gimena Almosara sold the lots to the spouses
Eduardo Felipe and Hermogena V. Felipe. The sale was
made without the consent of her husband, Maximo.
On April 26, 1976, the heirs of Maximo Aldon, namely his
widow Gimena and their children Sofia and Salvador Aldon,
filed a complaint in the Court of First Instance of Masbate
against the Felipes. The complaint which was docketed as
Civil Case No. 2372 alleged that the plaintiffs were the
owners of Lots 1370, 1371 and 1415; that they had orally
mortgaged the same to the defendants; and an offer to
redeem the mortgage had been refused so they filed the
complaint in order to recover the three parcels of land.
The defendants asserted that they had acquired the lots from
the plaintiffs by purchase and subsequent delivery to them.
The trial court sustained the claim of the defendants and
rendered the following judgment:
a. declaring the defendants to be the lawful owners of the
property subject of the present litigation;
b. declaring the complaint in the present action to be without
merit and is therefore hereby ordered dismissed;
c. ordering the plaintiffs to pay to the defendants the amount
of P2,000.00 as reasonable attorney's fees and to pay the
costs of the suit.
The plaintiffs appealed the decision to the Court of Appeals
which rendered the following judgment:
PREMISES CONSIDERED, the decision appealed from is
hereby REVERSED and SET ASIDE, and a new one is
hereby RENDERED, ordering the defendants-appellees to
surrender the lots in question as well as the plaintiffs'appellants' muniments of title thereof to said plaintiffsappellants, to make an accounting of the produce derived
from the lands including expenses incurred since 1951, and
to solidarity turn over to the plaintiffs-appellants the NET
monetary value of the profits, after deducting the sum of
P1,800.00. No attorney's fees nor moral damages are
awarded for lack of any legal justification therefor. No. costs.
The ratio of the judgment is stated in the following
paragraphs of the decision penned by Justice Edgardo L.
Paras with the concurrence of Justices Venicio Escolin and

Mariano A. Zosa:
One of the principal issues in the case involves the nature of
the aforementioned conveyance or transaction, with
appellants claiming the same to be an oral contract of
mortgage or antichresis, the redemption of which could be
done anytime upon repayment of the P1,800.00 involved
(incidentally the only thing written about the transaction is the
aforementioned receipt re the P1,800). Upon the other hand,
appellees claim that the transaction was one of sale,
accordingly, redemption was improper. The appellees claim
that plaintiffs never conveyed the property because of a loan
or mortgage or antichresis and that what really transpired
was the execution of a contract of sale thru a private
document designated as a 'Deed of Purchase and Sale'
(Exhibit 1), the execution having been made by Gimena
Almosara in favor of appellee Hermogena V. Felipe.
After a study of this case, we have come to the conclusion
that the appellants are entitled to recover the ownership of
the lots in question. We so hold because although Exh. 1
concerning the sale made in 1951 of the disputed lots is, in
Our opinion, not a forgery the fact is that the sale made by
Gimena Almosara is invalid, having been executed without
the needed consent of her husband, the lots being conjugal.
Appellees' argument that this was an issue not raised in the
pleadings is baseless, considering the fact that the complaint
alleges that the parcels 'were purchased by plaintiff Gimena
Almosara and her late husband Maximo Aldon' (the lots
having been purchased during the existence of the marriage,
the same are presumed conjugal) and inferentially, by force
of law, could not, be disposed of by a wife without her
husband's consent.
The defendants are now the appellants in this petition for
review. They invoke several grounds in seeking the reversal
of the decision of the Court of Appeals. One of the grounds is
factual in nature; petitioners claim that "respondent Court of
Appeals has found as a fact that the 'Deed of Purchase and
Sale' executed by respondent Gimena Almosara is not a
forgery and therefore its authenticity and due execution is
already beyond question." We cannot consider this ground
because as a rule only questions of law are reviewed in
proceedings under Rule 45 of the Rules of Court subject to
well-defined exceptions not present in the instant case.
The legal ground which deserves attention is the legal effect
of a sale of lands belonging to the conjugal partnership made
by the wife without the consent of the husband.
It is useful at this point to re-state some elementary rules:
The husband is the administrator of the conjugal partnership.
(Art. 165, Civil Code.) Subject to certain exceptions, the
husband cannot alienate or encumber any real property of
the conjugal partnership without the wife's consent. (Art. 166,
Idem.) And the wife cannot bind the conjugal partnership
without the husband's consent, except in cases provided by
law. (Art. 172, Idem.)

In the instant case, Gimena, the wife, sold lands belonging to
the conjugal partnership without the consent of the husband
and the sale is not covered by the phrase "except in cases
provided by law." The Court of Appeals described the sale as
"invalid" - a term which is imprecise when used in relation to
contracts because the Civil Code uses specific names in
designating defective contracts, namely: rescissible (Arts.
1380 et seq.), voidable (Arts. 1390 et seq.), unenforceable
(Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et
seq.)
The sale made by Gimena is certainly a defective contract
but of what category? The answer: it is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable
contracts are "[T]hose where one of the parties is incapable
of giving consent to the contract." (Par. 1.) In the instant
case-Gimena had no capacity to give consent to the contract
of sale. The capacity to give consent belonged not even to
the husband alone but to both spouses.
The view that the contract made by Gimena is a voidable
contract is supported by the legal provision that contracts
entered by the husband without the consent of the wife when
such consent is required, are annullable at her instance
during the marriage and within ten years from the transaction
questioned. (Art. 173, Civil Code.)
Gimena's contract is not rescissible for in such contract all
the essential elements are untainted but Gimena's consent
was tainted. Neither can the contract be classified as
unenforceable because it does not fit any of those described
in Art. 1403 of the Civil Code. And finally, the contract cannot
be void or inexistent because it is not one of those
mentioned in Art. 1409 of the Civil Code. By process of
elimination, it must perforce be a voidable contract.
The voidable contract of Gimena was subject to annulment
by her husband only during the marriage because he was
the victim who had an interest in the contract. Gimena, who
was the party responsible for the defect, could not ask for its
annulment. Their children could not likewise seek the
annulment of the contract while the marriage subsisted
because they merely had an inchoate right to the lands sold.
The termination of the marriage and the dissolution of the
conjugal partnership by the death of Maximo Aldon did not
improve the situation of Gimena. What she could not do
during the marriage, she could not do thereafter.
The case of Sofia and Salvador Aldon is different. After the
death of Maximo they acquired the right to question the
defective contract insofar as it deprived them of their
hereditary rights in their father's share in the lands. The
father's share is one-half (1/2) of the lands and their share is
two-thirds (2/3) thereof, one-third (1/3) pertaining to the
widow.
The petitioners have been in possession of the lands since

1951. It was only in 1976 when the respondents filed action
to recover the lands. In the meantime, Maximo Aldon died.
Two questions come to mind, namely: (1) Have the
petitioners acquired the lands by acquisitive prescription? (2)
Is the right of action of Sofia and Salvador Aldon barred by
the statute of limitations?
Anent the first question, We quote with approval the following
statement of the Court of Appeals:
We would like to state further that appellees [petitioners
herein] could not have acquired ownership of the lots by
prescription in view of what we regard as their bad faith. This
bad faith is revealed by testimony to the effect that
defendant-appellee Vicente V. Felipe (son of appellees
Eduardo Felipe and Hermogena V. Felipe) attempted in
December 1970 to have Gimena Almosara sign a readymade document purporting to self the disputed lots to the
appellees. This actuation clearly indicated that the appellees
knew the lots did not still belong to them, otherwise, why
were they interested in a document of sale in their favor?
Again why did Vicente V. Felipe tell Gimena that the purpose
of the document was to obtain Gimena's consent to the
construction of an irrigation pump on the lots in question?
The only possible reason for purporting to obtain such
consent is that the appellees knew the lots were not theirs.
Why was there an attempted improvement (the irrigation
tank) only in 1970? Why was the declaration of property
made only in 1974? Why were no attempts made to obtain
the husband's signature, despite the fact that Gimena and
Hermogena were close relatives? An these indicate the bad
faith of the appellees. Now then, even if we were to consider
appellees' possession in bad faith as a possession in the
concept of owners, this possession at the earliest started in
1951, hence the period for extraordinary prescription (30
years) had not yet lapsed when the present action was
instituted on April 26, 1976.
As to the second question, the children's cause of action
accrued from the death of their father in 1959 and they had
thirty (30) years to institute it (Art. 1141, Civil Code.) They
filed action in 1976 which is well within the period.
WHEREFORE, the decision of the Court of Appeals is
hereby modified. Judgment is entered awarding to Sofia and
Salvador Aldon their shares of the lands as stated in the
body of this decision; and the petitioners as possessors in
bad faith shall make an accounting of the fruits
corresponding to the share aforementioned from 1959 and
solidarity pay their value to Sofia and Salvador Aldon; costs
against the petitioners.
SO ORDERED.

The material facts that gave rise to this petition are as
follows: On October 31, 1979, Capt. Julio J. Lucero, Jr. was
appointed by petitioner Eastern Shipping Lines, Inc.,
Company for short, as master/captain to its vessel M/V
Eastern Minicon plying the HongkongManila route, with the
salary of P5,560.00 exclusive of ship board allowances and
other benefits. Under the contract, his employment was good
for one (1) round trip only, i.e., the contract would
automatically terminate upon arrival of the vessel at the Port
of Manila, unless renewed. It was further agreed that part of
the captain's salary, while abroad, should be paid to Mrs.
Josephine Lucero, his wife, in Manila.
On February 16, 1980, while the vessel was enroute from
Hongkong to Manila where it was expected to arrive on
February 18, 1980, Capt. Lucero sent three (3) messages to
the Company's Manila office:
EASTERN v. LUCERO
First Message: 1
SUPREME COURT
Manila
February l6,1980 0700 GMT Via Intercom

EMINICON
SECOND DIVISION
Urgent Eastship Manila
G.R. No. L-60101
August 31, 1983
EASTERN SHIPPING LINES, INC., petitioner,

vs.
JOSEPHINE LUCERO, respondents.
Valera, Cainglet & Dala Law Office for petitioner.
Jose R. Millares for private respondent.
ESCOLIN, J.:
Petition for review filed by the Eastern Shipping Lines, Inc. to
set aside the decision of the National Labor Relations
Commission, which affirmed the judgment rendered by the
National Seamen Board, the dispositive portion of which
reads as follows:
WHEREFORE, respondent is hereby ordered to pay
complainant her monthly allotments from March, 1980 up to
the amount of P54,562.00 within ten (10) days from receipt
of this decision. Respondent is likewise further ordered to
pay complainant her future monthly allotment up to the
arrival of the M/V EASTERN MINICON in the port of Manila
or after four (4) years when the presumptive death
established by law takes effect.
REGRET
TO
INFORM
YOU
ENCOUNTERED
BOISTEROUS
WEATHER
WITH
STRONG
NORTHEASTERLY WINDS WITH GAIL FORCE CAUSING
THE VESSEL ROLLING AND PITCHING VIOLENTLY
VESSEL NOW INCLINING 15 TO 20 DEGREES PORT
FEARING MIGHT JETTISON CARGO ON DECK IF
EVERYTHING COME TO WORSE SITUATION HOWEVER
TRYING UTMOST BEST TO FACILITATE EVERYTHING IN
ORDER STOP NO FIX POSITIONS FROM NOON 15th UP
TO 0600 HRS TO DATE NEED ASSISTANCE
APPROXIMATE DR POSITIONS AT 0600 HRS 10TH
WITHIN THE VICINITY LATITUDE 20-02, ON LONGTITUDE
110-02, OE COURSE 120 DEGREES REGARDS ...
LUCERO
Second Message: 2
February l6/80 1530 GMT VIA INTERCOM
EMICON
EAST SHIP MANILA
RYC NOTED ACCORDINGLY SINCE WASTE PAPER
CARGO ON PORT SIDE AND HAD BEEN WASH OUT
VESSEL AGAIN LISTING ON STARBOARD SIDE REGRET
WE HAVE TO JETTISON STARBOARD SIDE WASTE
PAPER CARGO IN ORDER TO BALANCE THE VESSEL

NOW ALMOST BACK TO NORMAL POSITION HOWEVER
VESSEL STILL LABORING VIOLENTLY REGARDS
heirs of the other seamen The Company further invoked the

provisions of Article 643 of the Code of Commerce, to wit:
LUCERO
FEBRUARY 16/80 2150 HRS
Art. 643. If the vessel and her cargo should be totally lost, by
reason of capture or wreck, all rights shall be extinguished,
both as regards the crew to demand any wages whatsoever,
and as regards the ship agent to recover the advances
made.
PHILIPPINE COAST GUARD
xxx xxx xxx
Third Message: 3
NEED IMMEDIATE ASSISTANCE POSITION 19-35 N 11640 E SEAWATER ENTERING INSIDE HATCH VESSEL
INCLINING 15 TO 20 DEGREES PORT IF POSSIBLE
SEND IMMEDIATE ASSISTANCE VESSEL IN DANGER
PREPARING TO ABANDON ANYTIME
MASTER
Acting on these radio messages, the Company, respondent
below, took the following steps:
RESPONDENT informed of the grave situation, immediately
reported the matter to the Philippine Coast Guard for search
and rescue operation and the same was coordinated with the
U.S. Air Force based at Clark Air Base. Respondent also
released radio messages to all vessels passing the
Hongkong/Manila route requesting them to be very cautious
and vigilant for possible survivors and to scan the area
whether there are signs of debris from the ill-fated vessel
"EASTERN MINICON" which has foundered In the
meantime, two (2) vessels of the respondent were also
dispatched to the area last reported by the Master for search
and rescue operation, but the collective efforts of all parties
concerned yielded negative results, (p. 79, Rollo)
Subsequently, the Lloyds of London, insurer of the M/V
Eastern Minicon through its surveyors, confirmed the loss of
the vessel. Thereafter, the Company paid the corresponding
death benefits to the heirs of the crew members, except
respondent Josephine Lucero, who refused to accept the
same.
On July 16, 1980, Mrs. Lucerofiled a complaint with -the
National Seamen Board, Board for short, for payment of her
accrued monthly allotment of P3,183.00, which the Company
had stopped since March 1980 and for continued payment of
said allotments until the M/V Minicon shall have returned to
the port of Manila. She contended that the contract of
employment entered into by her husband with the Company
was on a voyage-to-voyage basis, and that the same was to
terminate only upon the vessel's arrival in Manila.
Upon the other hand, the Company maintained that Mrs.
Lucero was no longer entitled to such allotments because:
[a] the Lloyds of London had already confirmed the total loss
of the vessel and had in fact settled the company's insurance
claim and [b] the Company, with the approval of the Board,
had likewise paid the corresponding death benefits to the
On May 19, 1981, the Board rendered the aforecited

judgment in favor of Mrs. Josephine Lucero and against
petitioner Company. The Board held that the presumption of
death could not be applied because the four-year period
provided for by Article 391(l) of the Civil Code had not yet
expired; and that the payment of death benefits to the heirs
of the other crew 'members was based upon a voluntary
agreement entered into by and between the heirs and the
Company, and did not bind respondent Mrs. Lucero who was
not a party thereto.
On appeal, the respondent National Labor Relations
Conunission affirmed the said decision. It held that:
Within the context of the foregoing circumstances, the only
recourse is to presume the vessel totally lost and its crew
members dead. But in this connection, the question that
comes to the fore is: When will the presumption arise? Article
391 of the Civil Code provides the answer, to wit:
Art. 391. The following shall be presumed dead for all
purposes, including the division of the estate among the
heirs: (1) A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who has not been
heard of for four years since the loss of the vessel or
aeroplane;...
By the aforequoted law, it is quite clear that the person to be
presumed dead should first "not been heard of for four years
since the loss of the vessel" before he can be presumed
dead for all purposes. Applied to Capt. LUCERO, it is
evidently premature to presume him dead as four years has
not yet expired. Thus, even in Judge Advocate General vs.
Gonzales, et al., (CA) 48 O.G. 5329, the very case cited by
the respondent herein, the court Id. in the case of the
missing soldier that although nothing was heard of him since
7 May 1942, the fact of his death is not presumed until seven
years after 1942.
Since Capt. LUCERO cannot yet be presumed dead as
demonstrated hereinabove, it logically follows that as of now,
he is presumed have It is of no moment to Us that the vessel
was conceded by the Lloyds of London to have been totally
lost which, in the first place, was admittedly merely based on
presumption as even the whereabouts of the vessel remains
unknown. Similarly, even the agreement, which formed the
basis of the Decision of the NSB ordering payment of death
benefits to the heirs of some of the crew must have been
predicated upon a presumption of death of the crew

members concerned. Such circumstances do not suffice to
establish the actual death of Capt. LUCERO.
xxx xxx xxx
Indeed, by the terms of the appointment of Capt. LUCERO,
his engagement terminates upon the return of the vessel at
the Port of Manila. He is considered to be still working
entitling his spouse to allotment until the vessel returns or
until it is officially declared totally lost, or until the
presumption of his death becomes effective in which case
the burden of proving that he is alive is shifted to his wife for
purposes of continuing her allotment.
We are unable to agree with the reasoning and conclusion of
the respondent NLRC.
It is undisputed that on February 16, 1980, the Company
received three (3) radio messages from Capt. Lucero on
board the M/V Eastern Minicon the last of which, received at
9:50 p.m. of that day, was a call for immediate assistance in
view of the existing "danger": "sea water was entering the
hatch"; the vessel "was listing 50 to 60 degrees port," and
they were "preparing to abandon the ship any time.' After this
message, nothing more has been heard from the vessel or
its crew until the present time.
There is thus enough evidence to show the circumstances
attending the loss and disappearance of the M/V Eastern
Minicon and its crew. The foregoing facts, quite logically. are
sufficient to lead Us to a moral certainty that the vessel had
sunk and that the persons aboard had perished with it. upon
this premise, the rule on presumption of death under Article
391 (1) of the Civil Code must yield to the rule of
preponderance of evidence. As this Court said in Joaquin vs.
Navarro 4 "Where there are facts, known or knowable, from
which a rational conclusion can be made, the presumption
does not step in, and the rule of preponderance of evidence
controls."
Of similar import is the following pronouncement from
American Jurisprudence: 5
Loss of Vessel. Where a vessel sets out on a voyage and
neither the vessel nor those who went in her are afterward
heard of, the presumption arises, after the utmost limit of
time for her to have completed the voyage and for news of
her arrival at any commercial port of the world to have been
received, that the vessel has been lost and that all on board
have perished. The presumption of death in such cases does
not rest on the fact alone that the person in question has
been absent and unheard from for a specific length of time,
but also on the fact that the vessel has not been heard front
The question, moreover, is not whether it is impossible that
the person may be alive, but whether the circumstances do
not present so strong a probability of his death that a court
should act thereon. The presumption of death from absence
of tidings of the vessel on which the absentee sailed is
strengthened by proof of a storm to which the vessel
probably was exposed. The presumption is even stronger
where it appears affirmatively that the vessel was lost at sea,

that nothing has been heard of a particular person who
sailed thereon, and that a sufficient time has elapsed to
permit the receipt of news of any possible survivors of the
disaster.
In People vs. Ansang 6 where, in open sea, the appellant
aboard a vinta ignited three home-made bombs and threw
them at the boat occupied by the victims, and the said boat
was later washed ashore and the passengers thereof were
never heard or seen again by anybody, this Court convicted
the appellant of multiple murder, holding that the victims
were dead.
Similarly, in People vs. Sasota, 7 the claim of the appellants
therein that there was no conclusive evidence of death of the
victim because his body was never found was overruled by
this Court in this wise:
In a case of murder or homicide, it is not necessary to
recover the body or to show where it can be found. 'Mere are
cases like death at sea, where the finding or recovery of the
body is impossible. It is enough that the death and the
criminal agency be proven. There are even cases where said
death and the intervention of the criminal agency that caused
it may be presumed or established by circumstantial
evidence.
Moreover, it may be remembered that in several treason
cages decided by this Court, where besides the act of
treason the accused is held responsible for the death of
persons he had or tortured and later taken away, where the
victims were never later seen or heard from, it has been
presumed that they were lulled or otherwise criminally
disposed of or liquidated by the accused this, for the purpose
of fixing the penalty.
If in the foregoing criminal cases, where the proof required
for conviction must be beyond reasonable doubt, the rule of
presumption was not applied and the fact of death was
deemed established, with more reason is this Court justified
in entering a finding of death. Indeed, We cannot permit
Article 391 to override, or be substituted for, the facts
established in this case which logically indicate to a moral
certainty that Capt. Lucero died shortly after he had sent his
last radio message at 9:50 p.m. on February 16, 1980.
In view of the conclusion arrived at above, We deem it
unnecessary to discuss the other issued raised in this case,
they being mere adjuncts to the principa issue already
disposed of.
WHEREFORE, the decision of the NLRC subject of this
petition is hereby set aside, and the complaint of respondent
Josephine Lucero dismissed. However, Mrs. Lucero is
entitled to death benefits. No costs.
SO ORDERED.

Throughout the existence of the partnership, and even after
Vicente Tabanao's untimely demise in 1994, petitioner failed
to submit to Tabanao's heirs any statement of assets and
liabilities of the partnership, and to render an accounting of
the partnership's finances. Petitioner also reneged on his
promise to turn over to Tabanao's heirs the deceased's 1/3
share in the total assets of the partnership, amounting to
P30,000,000.00, or the sum of P10,000,000.00, despite
formal demand for payment thereof.2
Consequently, Tabanao' s heirs, respondents herein, filed
against petitioner an action for accounting, payment of
shares, division of assets and damages.3 In their complaint,
respondents prayed as follows:
1. Defendant be ordered to render the proper accounting of
all the assets and liabilities of the partnership at bar; and
2. After due notice and hearing defendant be ordered to
pay/remit/deliver/surrender/yield to the plaintiffs the following:
EMNACE v. CA
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 126334
A. No less than One Third (1/3) of the assets, properties,

dividends, cash, land(s), fishing vessels, trucks, motor
vehicles, and other forms and substance of treasures which
belong and/or should belong, had accrued and/or must
accrue to the partnership;
B. No less than Two Hundred
(P200,000.00) as moral damages;
Thousand
Pesos
C. Attorney's fees equivalent to Thirty Percent (30%) of the

entire share/amount/award which the Honorable Court may
resolve the plaintiffs as entitled to plus P1,000.00 for every
appearance in court.4
November 23, 2001
EMILIO EMNACE, petitioner,

vs.
COURT OF APPEALS, ESTATE OF VICENTE TABANAO,
SHERWIN TABANAO, VICENTE WILLIAM TABANAO,
JANETTE TABANAO DEPOSOY, VICENTA MAY
TABANAO VARELA, ROSELA TABANAO and VINCENT
TABANAO, respondents.
YNARES-SANTIAGO, J.:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto
Divinagracia were partners in a business concern known as
Ma. Nelma Fishing Industry. Sometime in January of 1986,
they decided to dissolve their partnership and executed an
agreement of partition and distribution of the partnership
properties among them, consequent to Jacinto Divinagracia's
withdrawal from the partnership.1 Among the assets to be
distributed were five (5) fishing boats, six (6) vehicles, two
(2) parcels of land located at Sto. Nio and Talisay, Negros
Occidental, and cash deposits in the local branches of the
Bank of the Philippine Islands and Prudential Bank.
Petitioner filed a motion to dismiss the complaint on the

grounds of improper venue, lack of jurisdiction over the
nature of the action or suit, and lack of capacity of the estate
of Tabanao to sue.5 On August 30, 1994, the trial court
denied the motion to dismiss. It held that venue was properly
laid because, while realties were involved, the action was
directed against a particular person on the basis of his
personal liability; hence, the action is not only a personal
action but also an action in personam. As regards petitioner's
argument of lack of jurisdiction over the action because the
prescribed docket fee was not paid considering the huge
amount involved in the claim, the trial court noted that a
request for accounting was made in order that the exact
value of the partnership may be ascertained and, thus, the
correct docket fee may be paid. Finally, the trial court held
that the heirs of Tabanao had aright to sue in their own
names, in view of the provision of Article 777 of the Civil
Code, which states that the rights to the succession are
transmitted from the moment of the death of the decedent.6
The following day, respondents filed an amended complaint, 7
incorporating the additional prayer that petitioner be ordered
to "sell all (the partnership's) assets and thereafter
pay/remit/deliver/surrender/yield to the plaintiffs" their
corresponding share in the proceeds thereof. In due time,

petitioner filed a manifestation and motion to dismiss,8
arguing that the trial court did not acquire jurisdiction over
the case due to the plaintiffs' failure to pay the proper docket
fees. Further, in a supplement to his motion to dismiss, 9
petitioner also raised prescription as an additional ground
warranting the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order,10 denying
the motion to dismiss inasmuch as the grounds raised
therein were basically the same as the earlier motion to
dismiss which has been denied. Anent the issue of
prescription, the trial court ruled that prescription begins to
run only upon the dissolution of the partnership when the
final accounting is done. Hence, prescription has not set in
the absence of a final accounting. Moreover, an action based
on a written contract prescribes in ten years from the time
the right of action accrues.
Petitioner filed a petition for certiorari before the Court of
Appeals,11 raising the following issues:
I.
Whether or not respondent Judge acted without
jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the required
docket fee;
II.
jurisdiction or with grave abuse of discretion in insisting to try
the case which involve (sic) a parcel of land situated outside
of its territorial jurisdiction;
III.
jurisdiction or with grave abuse of discretion in allowing the
estate of the deceased to appear as party plaintiff, when
there is no intestate case and filed by one who was never
appointed by the court as administratrix of the estates; and
IV.
jurisdiction or with grave abuse of discretion in not
dismissing the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the
assailed decision,12 dismissing the petition for certiorari, upon
a finding that no grave abuse of discretion amounting to lack
or excess of jurisdiction was committed by the trial court in
issuing the questioned orders denying petitioner's motions to
dismiss.
Not satisfied, petitioner filed the instant petition for review,
raising the same issues resolved by the Court of Appeals,
namely:
I.
Failure to pay the proper docket fee;
II.
Parcel of land subject of the case pending before the
trial court is outside the said court's territorial jurisdiction;
III. Lack of capacity to sue on the part of plaintiff heirs of
Vicente Tabanao; and
IV.
Prescription of the plaintiff heirs' cause of action.
It can be readily seen that respondents' primary and ultimate

objective in instituting the action below was to recover the
decedent's 1/3 share in the partnership' s assets. While they
ask for an accounting of the partnership' s assets and
finances, what they are actually asking is for the trial court to
compel petitioner to pay and turn over their share, or the
equivalent value thereof, from the proceeds of the sale of the
partnership assets. They also assert that until and unless a
proper accounting is done, the exact value of the partnership'
s assets, as well as their corresponding share therein,
cannot be ascertained. Consequently, they feel justified in
not having paid the commensurate docket fee as required by
the Rules of Court.1wphi1.nt
We do not agree. The trial court does not have to employ
guesswork in ascertaining the estimated value of the
partnership's assets, for respondents themselves voluntarily
pegged the worth thereof at Thirty Million Pesos
(P30,000,000.00). Hence, this case is one which is really not
beyond pecuniary estimation, but rather partakes of the
nature of a simple collection case where the value of the
subject assets or amount demanded is pecuniarily
determinable.13 While it is true that the exact value of the
partnership's total assets cannot be shown with certainty at
the time of filing, respondents can and must ascertain,
through informed and practical estimation, the amount they
expect to collect from the partnership, particularly from
petitioner, in order to determine the proper amount of docket
and other fees.14 It is thus imperative for respondents to pay
the corresponding docket fees in order that the trial court
may acquire jurisdiction over the action.15
Nevertheless, unlike in the case of Manchester Development
Corp. v. Court of Appeals,16 where there was clearly an effort
to defraud the government in avoiding to pay the correct
docket fees, we see no attempt to cheat the courts on the
part of respondents. In fact, the lower courts have noted their
expressed desire to remit to the court "any payable balance
or lien on whatever award which the Honorable Court may
grant them in this case should there be any deficiency in the
payment of the docket fees to be computed by the Clerk of
Court."17 There is evident willingness to pay, and the fact that
the docket fee paid so far is inadequate is not an indication
that they are trying to avoid paying the required amount, but
may simply be due to an inability to pay at the time of filing.
This consideration may have moved the trial court and the
Court of Appeals to declare that the unpaid docket fees shall
be considered a lien on the judgment award.
Petitioner, however, argues that the trial court and the Court
of Appeals erred in condoning the non-payment of the proper
legal fees and in allowing the same to become a lien on the
monetary or property judgment that may be rendered in favor
of respondents. There is merit in petitioner's assertion. The
third paragraph of Section 16, Rule 141 of the Rules of Court
states that:

The legal fees shall be a lien on the monetary or property
judgment in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their
favor because it specifically applies to pauper-litigants.
Nowhere in the records does it appear that respondents are
litigating as paupers, and as such are exempted from the
payment of court fees.18
The rule applicable to the case at bar is Section 5(a) of Rule
141 of the Rules of Court, which defines the two kinds of
claims as: (1) those which are immediately ascertainable;
and (2) those which cannot be immediately ascertained as to
the exact amount. This second class of claims, where the
exact amount still has to be finally determined by the courts
based on evidence presented, falls squarely under the third
paragraph of said Section 5(a), which provides:
In case the value of the property or estate or the sum
claimed is less or more in accordance with the appraisal of
the court, the difference of fee shall be refunded or paid as
the case may be. (Underscoring ours)
In Pilipinas Shell Petroleum Corporation v. Court of
Appeals,19 this Court pronounced that the above-quoted
provision "clearly contemplates an Initial payment of the filing
fees corresponding to the estimated amount of the claim
subject to adjustment as to what later may be proved." 20
Moreover, we reiterated therein the principle that the
payment of filing fees cannot be made contingent or
dependent on the result of the case. Thus, an initial payment
of the docket fees based on an estimated amount must be
paid simultaneous with the filing of the complaint. Otherwise,
the court would stand to lose the filing fees should the
judgment later turn out to be adverse to any claim of the
respondent heirs.
The matter of payment of docket fees is not a mere triviality.
These fees are necessary to defray court expenses in the
handling of cases. Consequently, in order to avoid
tremendous losses to the judiciary, and to the government as
well, the payment of docket fees cannot be made dependent
on the outcome of the case, except when the claimant is a
pauper-litigant.
Applied to the instant case, respondents have a specific
claim - 1/3 of the value of all the partnership assets - but they
did not allege a specific amount. They did, however, estimate
the partnership's total assets to be worth Thirty Million Pesos
(P30,000,000.00), in a letter21 addressed to petitioner.
Respondents cannot now say that they are unable to make
an estimate, for the said letter and the admissions therein
form part of the records of this case. They cannot avoid
paying the initial docket fees by conveniently omitting the
said amount in their amended complaint. This estimate can
be made the basis for the initial docket fees that respondents
should pay. Even if it were later established that the amount
proved was less or more than the amount alleged or
estimated, Rule 141, Section 5(a) of the Rules of Court
specifically provides that the court may refund the 'excess or
exact additional fees should the initial payment be

insufficient. It is clear that it is only the difference between
the amount finally awarded and the fees paid upon filing of
this complaint that is subject to adjustment and which may
be subjected to alien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon.
Maximiano Asuncion,22 this Court held that when the specific
claim "has been left for the determination by the court, the
additional filing fee therefor shall constitute a lien on the
judgment and it shall be the responsibility of the Clerk of
Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee." Clearly, the rules and
jurisprudence contemplate the initial payment of filing and
docket fees based on the estimated claims of the plaintiff,
and it is only when there is a deficiency that a lien may be
constituted on the judgment award until such additional fee is
collected.
Based on the foregoing, the trial court erred in not dismissing
the complaint outright despite their failure to pay the proper
docket fees. Nevertheless, as in other procedural rules, it
may be liberally construed in certain cases if only to secure a
just and speedy disposition of an action. While the rule is
that the payment of the docket fee in the proper amount
should be adhered to, there are certain exceptions which
must be strictly construed.23
In recent rulings, this Court has relaxed the strict adherence
to the Manchester doctrine, allowing the plaintiff to pay the
proper docket fees within a reasonable time before the
expiration of the applicable prescriptive or reglementary
period.24
In the recent case of National Steel Corp. v. Court of
Appeals,25 this Court held that:
The court acquires jurisdiction over the action if the filing of
the initiatory pleading is accompanied by the payment of the
requisite fees, or, if the fees are not paid at the time of the
filing of the pleading, as of the time of full payment of the
fees within such reasonable time as the court may grant,
unless, of course, prescription has set in the meantime.
It does not follow, however, that the trial court should have
dismissed the complaint for failure of private respondent to
pay the correct amount of docket fees. Although the payment
of the proper docket fees is a jurisdictional requirement, the
trial court may allow the plaintiff in an action to pay the same
within a reasonable time before the expiration of the
applicable prescriptive or reglementary period. If the plaintiff
fails to comply within this requirement, the defendant should
timely raise the issue of jurisdiction or else he would be
considered in estoppel. In the latter case, the balance
between the appropriate docket fees and the amount
actually paid by the plaintiff will be considered a lien or any
award he may obtain in his favor. (Underscoring ours)
Accordingly, the trial court in the case at bar should
determine the proper docket fee based on the estimated

amount that respondents seek to collect from petitioner, and
direct them to pay the same within a reasonable time,
provided the applicable prescriptive or reglementary period
has not yet expired, Failure to comply therewith, and upon
motion by petitioner, the immediate dismissal of the
complaint shall issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part
of the trial court and the Court of Appeals in holding that the
case below is a personal action which, under the Rules, may
be commenced and tried where the defendant resides or
may be found, or where the plaintiffs reside, at the election of
the latter.26
Petitioner, however, insists that venue was improperly laid
since the action is a real action involving a parcel of land that
is located outside the territorial jurisdiction of the court a quo.
This contention is not well-taken. The records indubitably
show that respondents are asking that the assets of the
partnership be accounted for, sold and distributed according
to the agreement of the partners. The fact that two of the
assets of the partnership are parcels of land does not
materially change the nature of the action. It is an action in
personam because it is an action against a person, namely,
petitioner, on the basis of his personal liability. It is not an
action in rem where the action is against the thing itself
instead of against the person.27 Furthermore, there is no
showing that the parcels of land involved in this case are
being disputed. In fact, it is only incidental that part of the
assets of the partnership under liquidation happen to be
parcels of land.
The time-tested case of Claridades v. Mercader, et al.,28
settled this issue thus:
The fact that plaintiff prays for the sale of the assets of the
partnership, including the fishpond in question, did not
change the nature or character of the action, such sale being
merely a necessary incident of the liquidation of the
partnership, which should precede and/or is part of its
process of dissolution.
The action filed by respondents not only seeks redress
against petitioner. It also seeks the enforcement of, and
petitioner's compliance with, the contract that the partners
executed to formalize the partnership's dissolution, as well
as to implement the liquidation and partition of the
partnership's assets. Clearly, it is a personal action that, in
effect, claims a debt from petitioner and seeks the
performance of a personal duty on his part. 29 In fine,
respondents' complaint seeking the liquidation and partition
of the assets of the partnership with damages is a personal
action which may be filed in the proper court where any of
the parties reside.30 Besides, venue has nothing to do with
jurisdiction for venue touches more upon the substance or
merits of the case.31 As it is, venue in this case was properly
laid and the trial court correctly ruled so.
On the third issue, petitioner asserts that the surviving
spouse of Vicente Tabanao has no legal capacity to sue
since she was never appointed as administratrix or executrix

of his estate. Petitioner's objection in this regard is
misplaced. The surviving spouse does not need to be
appointed as executrix or administratrix of the estate before
she can file the action. She and her children are
complainants in their own right as successors of Vicente
Tabanao. From the very moment of Vicente Tabanao' s
death, his rights insofar as the partnership was concerned
were transmitted to his heirs, for rights to the succession are
transmitted from the moment of death of the decedent.32
Whatever claims and rights Vicente Tabanao had against the
partnership and petitioner were transmitted to respondents
by operation of law, more particularly by succession, which 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.33 Moreover, respondents became
owners of their respective hereditary shares from the
moment Vicente Tabanao died.34
A prior settlement of the estate, or even the appointment of
Salvacion Tabanao as executrix or administratrix, is not
necessary for any of the heirs to acquire legal capacity to
sue. As successors who stepped into the shoes of their
decedent upon his death, they can commence any action
originally pertaining to the decedent.35 From the moment of
his death, his rights as a partner and to demand fulfillment of
petitioner's obligations as outlined in their dissolution
agreement were transmitted to respondents. They, therefore,
had the capacity to sue and seek the court's intervention to
compel petitioner to fulfill his obligations.
Finally, petitioner contends that the trial court should have
dismissed the complaint on the ground of prescription,
arguing that respondents' action prescribed four (4) years
after it accrued in 1986. The trial court and the Court of
Appeals gave scant consideration to petitioner's hollow
arguments, and rightly so.
The three (3) final stages of a partnership are: (1)
dissolution; (2) winding-up; and (3) termination. 36 The
partnership, although dissolved, continues to exist and its
legal personality is retained, at which time it completes the
winding up of its affairs, including the partitioning and
distribution of the net partnership assets to the partners.37
For as long as the partnership exists, any of the partners
may demand an accounting of the partnership's business.
Prescription of the said right starts to run only upon the
dissolution of the partnership when the final accounting is
done.38
Contrary to petitioner's protestations that respondents' right
to inquire into the business affairs of the partnership accrued
in 1986, prescribing four (4) years thereafter, prescription
had not even begun to run in the absence of a final
accounting. Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any
partner, or his legal representative as against the winding up
partners or the surviving partners or the person or

partnership continuing the business, at the date of
dissolution, in the absence of any agreement to the contrary.
Applied in relation to Articles 1807 and 1809, which also deal
with the duty to account, the above-cited provision states
that the right to demand an accounting accrues at the date of
dissolution in the absence of any agreement to the contrary.
When a final accounting is made, it is only then that
prescription begins to run. In the case at bar, no final
accounting has been made, and that is precisely what
respondents are seeking in their action before the trial court,
since petitioner has failed or refused to render an accounting
of the partnership's business and assets. Hence, the said
action is not barred by prescription.
In fine, the trial court neither erred nor abused its discretion
when it denied petitioner's motions to dismiss. Likewise, the
Court of Appeals did not commit reversible error in upholding
the trial court's orders. Precious time has been lost just to
settle this preliminary issue, with petitioner resurrecting the
very same arguments from the trial court all the way up to
the Supreme Court. The litigation of the merits and
substantial issues of this controversy is now long overdue
and must proceed without further delay.
WHEREFORE, in view of all the foregoing, the instant
petition is DENIED for lack of merit, and the case is
REMANDED to the Regional Trial Court of Cadiz City,
Branch 60, which is ORDERED to determine the proper
docket fee based on the estimated amount that plaintiffs
therein seek to collect, and direct said plaintiffs to pay the
same within a reasonable time, provided the applicable
prescriptive or reglementary period has not yet expired.
Thereafter, the trial court is ORDERED to conduct the
appropriate proceedings in Civil Case No. 416-C.
Costs against petitioner.1wphi1.nt
SO ORDERED.
IN THE MATTER OF GUARDIANSHIP OF THE LAVIDES v.
CITY COURT OF LUCENA
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-50261
May 31, 1982
IN THE MATTER OF GUARDIANSHIP OF THE MINORS

CECILIA, REBECCA, FLORIDA, RAPHAEL, RODOLFO,
LUISITO, TEODORO, all surnamed LAVIDES, ALBERTO
C. LAVIDES, petitioner,
vs.
CITY COURT OF LUCENA, Branch I, respondent.
DE CASTRO, J.:
This is a petition for review on certiorari of the two (2) orders
of respondent City Court of Lucena, Branch I, one dated
December 5, 1978 dismissing petitioner's petition for
guardianship for lack of jurisdiction and the other, dated
December 27, 1978 denying petitioner's motion for
reconsideration of the order of December 5, 1978.
There is no dispute as to the following facts:
Upon the death of his wife, petitioner Alberto Lavides
instituted on April 5, 1971 before respondent City Court a
guardianship proceeding (Special Proceeding No. 0609) with
respect to the person and property of their seven (7) minor
children named Cecilia, Rebecca, Florida, Raphael, Rodolfo,
Luisito and Teodoro, all surnamed Lavides. Said petition
alleged that the estate left by the deceased wife of herein
petitioner, mother of the above- named minors, has a total
value of thirty-five thousand pesos (P35,000.00) or an
amount of P5,000.00 pertaining to each minor. Although
there had been no previous settlement of the estate of the
deceased, petitioner was appointed and qualified as judicial
guardian on May 10, 1971.
On June 23, 1971, respondent City Court, then presided by
Honorable Judge Filemon Juntereal, upon motion,
authorized petitioner to settle the estate extrajudicially and to
sell a portion thereof consisting of shares of stocks. Pursuant
to said authority, petitioner extrajudicially settled the estate,
and on August 28, 1971, sold the said shares of stocks for
the sum of P64,512.00
On November 22, 1978, petitioner filed a motion for
confirmation and approval of a Deed of Exchange
Agreement dated November 18, 1978. While this latter
motion was still pending consideration, the respondent court,
now presided by Honorable Judge Jose J. Parentela, Jr.,
reviewed the records of the case and finding that the
undivided estate left by the deceased was worth at least
P35,000.00, dismissed the case in an Order dated
December 5, 1978, for lack of jurisdiction, revoked the
appointment of petitioner as guardian and annulled all
proceedings taken prior to the issuance of the said order of
December 5, 1978.
Petitioner filed a motion for reconsideration of said order
which was denied by respondent city court in its order dated
December 27, 1978. Hence, this instant petition, petitioner
raising the following issues, namely:
a. Whether or not respondent city court's jurisdiction over a
petition for general guardianship is based on the total value
of the estate or on the value of the individual share of the
minors in the estate of their deceased mother; and
b. Whether or not the promulgation of the Revised Rules of
Court which was made effective on January 1, 1964
overruled the doctrine laid down by this Honorable Tribunal

in the case of "Delgado vs. Gamboa," G. R. No. L-14326,
February 28, 1962, 4 SCRA 505.
It appears that respondent city court dismissed the petition
for guardianship on ground of lack of jurisdiction 1) because
a perusal of the records of the case shows that the undivided
estate left by the deceased is worth P35,000.00 which is
clearly outside its jurisdiction, pursuant to Section 1, Rule 92
of the Revised Rules of Court, and 2) because of this Court's
ruling in the case of Delgado vs. Gamboa, supra, to the
effect that the concurrent jurisdiction of the Justice of the
Peace Courts with the Court of First Instance over the
guardianship of the person and properties of the minors and
incompetents cannot be exercised when the estate has a
value in excess of the jurisdictional amount for the former
courts.
Petitioner, on the other hand, contends that in the case of
petition for guardianship of more than one minor, the
individual share of each minor which is then the estate of
said minors determines the jurisdiction of the court pursuant
to Section 1, Rule 92 of the Revised Rules of Court; that
inasmuch as there are seven (7) minor children sought to be
placed under guardianship and that the total value of the
estate is P35,000.00, then by simple mathematical
computation, the value of the property of each minor is
P5,000.00, already a determined estate, which is well within
the jurisdiction of the respondent city court; that the case of
Delgado vs. Gamboa, promulgated in 1962, invoked by
respondent city court in dismissing his petition has been
overruled and abandoned by the promulgation of the
Revised Rules of Court, which took effect in 1964.
Section 1, Rule 92 of the Revised Rules of Court granting
concurrent jurisdiction to the municipal and city courts with
the Court of First Instance in the appointment of guardians,
provides:
Section 1. Where to institute proceedings. Guardianship of
the person or estate of a minor or incompetent may be
instituted in the Court of First Instance of the province, or in
the justice of the peace court of the municipality, or in the
municipal court of the chartered city where the minor or
incompetent person resides, and if he resides in a foreign
country, in the Court of First Instance of the province wherein
his property or part thereof is situated; provided, however,
that where the value of the property of such minor or
incompetent exceeds the jurisdiction of the justice of the
peace or municipal court, the proceedings shall be instituted
in the Court of First Instance.
In the City of Manila the proceedings shall be instituted in the
Juvenile and Domestic Relations Court.
The above section, in clear terms, grants concurrent
jurisdiction between municipal and city court and Courts of
First Instance in the appointment of guardians either with
respect to the person or property of the minor or
incompetent, except that where the value of the property of
such minor or incompetent exceeds the jurisdiction of the
municipal or city courts, the guardianship proceedings shall

be instituted in the Court of First Instance. It is clear,
therefore, that the value of the property of the minor or
incompetent sought to be placed in guardianship determines
which court has jurisdiction. And that property referred to is
the individual estate of the minor so much so that when there
are more than one minor or in competent sought to be
placed under guardianship, what determines which court has
jurisdiction is the value of the individual property of each
minor or incompetent.
In the case at bar, it appears that respondent city court
dismissed the petition for guardianship on ground of lack of
jurisdiction because a perusal of the record of the case
shows that the undivided estate left by the deceased mother
is worth P35,000.00 which amount is clearly outside its
jurisdiction. This reasoning must be rejected for it overlooks
the fact that the petition for guardianship filed by herein
petitioner before the respondent city court clearly alleged
that the individual estate or share of each of the seven minor
children sought to be placed under guardianship is
P5,000.00, which amount is well within the jurisdiction of the
respondent city court (Section 88, Judiciary Act of 1948, as
amended by R.A. No. 3828). That the respondent city court
has jurisdiction over the case cannot be denied, for the rule
is well-settled that jurisdiction of the court over the subject
matter is determined by the allegations of the complaint
and/or petition. 1 That each of the seven (7) minor children
became owner of a one- seventh (1/7) share or an amount of
P5,000 from the estate left by the deceased mother valued
at P35,000.00 upon the death of the latter cannot also be
denied for Article 777 of the New Civil Code expressly
provides that "the rights to the succession are transmitted
from the moment of death of the decedent," and from then
on, the heir becomes the absolute owner of the decedent's
property, subject of the rights and obligations of the decedent
and he cannot be deprived of such right except by methods
provided for by law. 2
Respondent city court, however, would also base its
dismissal of the case in the light of this Court's ruling in the
case of Delgado vs. Gamboa, supra, to the effect that the
concurrence of jurisdiction between Courts of First Instance
and inferior courts over guardianship of the minors or
incompetents cannot be exercised when the estate has a
value in excess of the jurisdictional amount for the latter
courts. The respondent Court, however, overlooked one vital
fact. A more careful examination of the facts of said case,
decided in 1962, reveals that it involved guardianship
proceeding over the person and property of three (3) minor
children of decedent and an undivided estate valued at
P7,000.00. That would make a share of P2,333.33 for each
minor child, which amount is also in excess of the
jurisdictional amount for inferior courts. 3 In the case at bar,
there are seven (7) minor children to share in an undivided
estate valued at P35,000.00 or a share of P5,000.00 for
each minor, which amount is well within the jurisdiction of the
respondent city court, 4 which, therefore, cannot validly
invoke the case of Delgado vs. Gamboa to support its
dismissal of the petition for guardianship. For what is
decisive is not the total value of the estate of the decedent,

but the value of the individual share of each of the minor
heirs for whom a guardian is sought to be appointed
individually not collectively.
But petitioner would contend, as raised in the second issue
of this petition, that the doctrine laid down by this Court in the
aforecited case of Delgado vs. Gamboa, has been overruled
by the promulgation of the Revised Rules of Court,
particularly Section 1 of Rule 92, He argued that the case of
Delgado vs. Gamboa, promulgated on February 28, 1962,
was decided when Section 1, Rule 93 of the former Rules of
Court was still effective, which rule commands that
guardianship shall be originally cognizable by the Court of
First Instance; that when the Revised Rules of Court took
effect on January 1, 1964, the institution of guardianship
proceedings is now governed by Section 1 of Rule 92 which
states that guardianship proceedings may be instituted in the
Courts of First Instance or in the municipal courts.
A perusal of the case of Delgado vs. Gamboa, decided when
Section 1 of former Rule 93, as amended by R.A. No. 643,
was still effective, shows that it merely restated and
confirmed the doctrine laid down in the case of Morales vs.
Marquez, G. R. No. L-7463, May 27, 1955, which in effect,
expounded the grant of concurrent jurisdiction between
inferior courts and Court of First Instance, as provided for by
R.A. No. 643. And a comparison of the provisions of Section
1 of former Rule 93, as amended, and Section 1 of the
present Rule 92 shows that the latter rule restates the former
rule. Under the former rule, municipal or city courts have
concurrent jurisdiction with the Court of First Instance in
cases where the value of the property of such minor or
incompetent falls within the jurisdiction of the former courts.
Likewise, under the present rule, concurrent jurisdiction was
also granted except that "where the value of the property of
such minor or incompetent exceeds the jurisdiction of the
inferior courts, the proceedings shall, be instituted in the
Court of First Instance." The criterion, therefore, in
determining in which court the guardianship proceeding shall
be instituted under the provision of both the former Rule 93
and the present Rule 92 remains the same. Hence, it cannot
be accurately stated that the Delgado ruling has been
abandoned. In any case, the Delgado doctrine, as already
demonstrated, does not militate against petitioner's
contention that the City has jurisdiction over the instant
guardianship case.
time to be lost, effort wasted, anxiety augmented, additional

expenses incurredthese are considerations which weigh
heavily if this situation is allowed to happen. As aptly stated
by the petitioner."To let the respondent court reverse its
stand now will pave a pattern of judicial instability which, to
reason and logic, is definitely not healthy administration of
justice and not inducive of court's veneration." 5
IN VIEW OF THE FOREGOING, the Order of respondent
City Court of December 5, 1978 dismissing the petition and
the Order of December 27, 1978 denying petitioner's motion
for reconsideration thereof are hereby set aside and the case
is remanded to it for further proceedings. No costs.
SO ORDERED.
BONILLA v. BARCENA
SUPREME COURT
Manila
FIRST DIVISION
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:
Lastly, there is still one aspect of this case which must not be
overlooked. It is not disputed that the respondent City Court
has entertained and granted petitioner's petition for
guardianship in its Order as early as May 10, 1971 and has
exercised its jurisdiction by granting authority to petitioner to
settle the estate extrajudicially and to sell a portion thereof
consisting of shares of stock; that after the lapse of seven (7)
years or on November 22, 1978, respondent City Court
dismissed the case for lack of jurisdiction, revoked the
appointment of petitioner as guardian and annulled all
proceedings taken. Would it serve the interest of justice to
dismiss the case at this stage and let a new petition for
guardianship be filed in another court? To draw a tenuous
jurisdictional line is to undermine stability in litigations. The
This is a petition for review 1 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.
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 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 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 Rules of
Court. 2
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 decedent, and they cannot be deprived of their rights
thereto except by the methods provided for by law. 3 The
moment of death is the determining factor when the heirs
acquire a definite right to the inheritance whether such right
be pure or contingent. 4 The right of the heirs to the property
of the deceased vests in them even before judicial
declaration of their being heirs in the testate or intestate
proceedings. 5 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 depends on the nature of
the action and the damage sued for. 6 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 property and rights of property affected being
incidental. 7 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.
BORROMEO-HERRERA v. BORROMEO
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-41171
July 23, 1987
INTESTATE ESTATE OF THE LATE VITO BORROMEO,

PATROCINIO BORROMEO-HERRERA, petitioner,
vs.
FORTUNATO BORROMEO and HON. FRANCISCO P.
BURGOS, Judge of the Court of First Instance of Cebu,
Branch II, respondents.
P. BURGOS, As presiding Judge of the (now) Regional

Trial Court, Branch XV, Region VII, RICARDO V. REYES,
as Administrator of the Estate of Vito Borromeo in Sp.
Proc. No. 916-R, NUMERIANO G. ESTENZO and
DOMINGO L. ANTIGUA, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-63818
July 23, 1987
DOMINGO ANTIGUA AND RICARDO V. REYES, as

Administrator of the Intestate Estate of VITO
BORROMEO, Sp. Proceedings No. 916-R, Regional Trial
Court of Cebu, joined by HON. JUDGE FRANCISCO P.
BURGOS, as Presiding Judge of Branch XV of the
Regional Trial Court of Cebu, as a formal party, and
ATTYS. FRANCIS M. ZOSA, GAUDIOSO RUIZ and
NUMERIANO ESTENZO, petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT,
JOSE CUENCO BORROMEO, and PETRA O.
BORROMEO, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-65995
July 23, 1987
PETRA BORROMEO, VITALIANA BORROMEO,

AMELINDA BORROMEO, and JOSE CUENCO
BORROMEO, petitioners,
vs.
HONORABLE FRANCISCO P. BURGOS, Presiding Judge
of Branch XV, Regional Trial Court of Cebu; RICARDO V.
REYES, Administrator of the Estate of VITO BORROMEO
in Sp. Proc. No. 916-R; and DOMINGO L. ANTIGUA,
respondents.
GUTIERREZ, JR., J.:

x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-55000
July 23, 1987
IN THE MATTER OF THE ESTATE OF VITO BORROMEO,

DECEASED, PILAR N. BORROMEO, MARIA B. PUTONG,
FEDERICO V. BORROMEO, JOSE BORROMEO,
CONSUELO B. MORALES, AND CANUTO V.
BORROMEO, JR., heirs-appellants,
vs.
FORTUNATO BORROMEO, claimant-appellee.
x - - - - - - - - - - - - - - - - - - - - - - -x
No. L-62895
July 23, 1987
JOSE CUENCO BORROMEO, petitioner,

vs.
HONORABLE COURT OF APPEALS, HON. FRANCISCO
These cases before us all stem from SP. PROC. NO. 916-R
of the then Court of First Instance of Cebu.
G.R. No. 41171
Vito Borromeo, a widower and permanent resident of Cebu
City, died on March 13, 1952, in Paranaque, Rizal at the age
of 88 years, without forced heirs but leaving extensive
properties in the province of Cebu.
On April 19, 1952, Jose Junquera filed with the Court of First
Instance of Cebu a petition for the probate of a one page
document as the last will and testament left by the said
deceased, devising all his properties to Tomas, Fortunato
and Amelia, all surnamed Borromeo, in equal and undivided
shares, and designating Junquera as executor thereof. The
case was docketed as Special Proceedings No. 916-R. The
document, drafted in Spanish, was allegedly signed and

thumbmarked by the deceased in the presence of Cornelio
Gandionco, Eusebio Cabiluna, and Felixberto Leonardo who
acted as witnesses.
Vito Borromeo
Oppositions to the probate of the will were filed. On May 28,

1960, after due trial, the probate court held that the
document presented as the will of the deceased was a
forgery.
Anecita Borromeo
On appeal to this Court, the decision of the probate court

disallowing the probate of the will was affirmed in Testate
Estate of Vito Borromeo, Jose H. Junquera et al. v. Crispin
Borromeo et al. (19 SCRA 656).
The testate proceedings was converted into an intestate
proceedings. Several parties came before the court filing
claims or petitions alleging themselves as heirs of the
intestate estate of Vito Borromeo.
The following petitions or claims were filed:
1. On August 29, 1967, the heirs of Jose Ma. Borromeo and
Cosme Borromeo filed a petition for declaration of heirs and
determination of heirship. There was no opposition filed
against said petition.
2. On November 26, 1967, Vitaliana Borromeo also filed a
petition for declaration as heir. The heirs of Jose Ma.
Borromeo and Cosme Borromeo filed an opposition to this
petition.
Paulo Borromeo
Quirino Borromeo and

Julian Borromeo
2. Vito Borromeo died a widower on March 13, 1952, without
any issue, and all his brothers and sisters predeceased him.
3. Vito's brother Pantaleon Borromeo died leaving the
following children:
a. Ismaela Borromeo,who died on Oct. 16, 1939
b. Teofilo Borromeo, who died on Aug. 1, 1955, or 3 years
after the death of Vito Borromeo. He was married to
Remedios Cuenco Borromeo, who died on March 28, 1968.
He had an only son-Atty. Jose Cuenco Borromeo one of the
petitioners herein.
c. Crispin Borromeo, who is still alive.
4. Anecita Borromeo, sister of Vito Borromeo, died ahead of
him and left an only daughter, Aurora B. Ocampo, who died
on Jan. 30, 1950 leaving the following children:
3. On December 13, 1967, Jose Barcenilla, Jr., Anecita

Ocampo de Castro, Ramon Ocampo, Lourdes Ocampo,
Elena Ocampo, Isagani Morre, Rosario Morre, Aurora Morre,
Lila Morre, Lamberto Morre, and Patricia Morre, filed a
petition for declaration of heirs and determination of shares.
The petition was opposed by the heirs of Jose and Cosme
Borromeo.
a. Anecita Ocampo Castro
4. On December 2, 1968, Maria Borromeo Atega, Luz

Borromeo, Hermenegilda Borromeo Nonnenkamp, Rosario
Borromeo, and Fe Borromeo Queroz filed a claim. Jose
Cuenco Borromeo, Crispin Borromeo, Vitaliana Borromeo
and the heirs of Carlos Borromeo represented by Jose Talam
filed oppositions to this claim.
e. Antonieta Ocampo Barcenilla (deceased), survived by

claimant Jose Barcenilla, Jr.
When the aforementioned petitions and claims were heard

jointly, the following facts were established:
1. Maximo Borromeo and Hermenegilda Galan, husband and
wife (the latter having predeceased the former), were
survived by their eight (8) children, namely,
Jose Ma. Borromeo
Cosme Borromeo
Pantaleon Borromeo
b. Ramon Ocampo
c. Lourdes Ocampo
d. Elena Ocampo, all living, and
5. Cosme Borromeo, another brother of Vito Borromeo, died

before the war and left the following children:
a. Marcial Borromeo
b. Carlos Borromeo,who died on Jan. 18, 1965,survived by
his wife, Remedios Alfonso, and his only daughter, Amelinda
Borromeo Talam
c. Asuncion Borromeo
d. Florentina Borromeo, who died in 1948.
e. Amilio Borromeo, who died in 1944.
f. Carmen Borromeo, who died in 1925.

The last three died leaving no issue.
6. Asuncion Borromeo
6. Jose Ma. Borromeo, another brother of Vito Borromeo,

died before the war and left the following children:
7. Marcial Borromeo
8. Amelinda Borromeo de Talam, and
a. Exequiel Borromeo,who died on December 29, 1949

9. The heirs of Canuto Borromeo
b. Canuto Borromeo, who died on Dec. 31, 1959, leaving the
following children:
aa. Federico Borromeo
The court also ordered that the assets of the intestate estate
of Vito Borromeo shall be divided into 4/9 and 5/9 groups
and distributed in equal and equitable shares among the 9
abovenamed declared intestate heirs.
bb. Marisol Borromeo (Maria B. Putong, Rec. p. 85)

cc. Canuto Borromeo, Jr.
dd. Jose Borromeo
ee. Consuelo Borromeo
ff. Pilar Borromeo
gg. Salud Borromeo
hh. Patrocinio Borromeo Herrera
c. Maximo Borromeo, who died in July, 1948
d. Matilde Borromeo, who died on Aug. 6, 1946
e. Andres Borromeo, who died on Jan. 3, 1923, but survived
by his children:
aa. Maria Borromeo Atega
bb. Luz Borromeo
cc. Hermenegilda Borromeo Nonnenkamp
dd. Rosario Borromeo
ee. Fe Borromeo Queroz
On April 10, 1969, the trial court, invoking Art. 972 of the Civil
Code, issued an order declaring the following, to the
exclusion of all others, as the intestate heirs of the deceased
Vito Borromeo:
1. Jose Cuenco Borromeo
2. Judge Crispin Borromeo
3. Vitaliana Borromeo
4. Patrocinio Borromeo Herrera
5. Salud Borromeo
On April 21 and 30, 1969, the declared heirs, with the

exception of Patrocinio B. Herrera, signed an agreement of
partition of the properties of the deceased Vito Borromeo
which was approved by the trial court, in its order of August
15, 1969. In this same order, the trial court ordered the
administrator, Atty Jesus Gaboya, Jr., to partition the
properties of the deceased in the way and manner they are
divided and partitioned in the said Agreement of Partition and
further ordered that 40% of the market value of the 4/9 and
5/9 of the estate shall be segregated. All attorney's fees shall
be taken and paid from this segregated portion.
On August 25, 1972, respondent Fortunato Borromeo, who
had earlier claimed as heir under the forged will, filed a
motion before the trial court praying that he be declared as
one of the heirs of the deceased Vito Borromeo, alleging that
he is an illegitimate son of the deceased and that in the
declaration of heirs made by the trial court, he was omitted,
in disregard of the law making him a forced heir entitled to
receive a legitime like all other forced heirs. As an
acknowledged illegitimate child, he stated that he was
entitled to a legitime equal in every case to four-fifths of the
legitime of an acknowledged natural child.
Finding that the motion of Fortunato Borromeo was already
barred by the order of the court dated April 12, 1969
declaring the persons named therein as the legal heirs of the
deceased Vito Borromeo, the court dismissed the motion on
June 25, 1973.
Fortunato Borromeo filed a motion for reconsideration. In the
memorandum he submitted to support his motion for
reconsideration, Fortunato changed the basis for his claim to
a portion of the estate. He asserted and incorporated a
Waiver of Hereditary Rights dated July 31, 1967, supposedly
signed by Pilar N. Borromeo, Maria B. Putong, Jose
Borromeo, Canuto V. Borromeo, Jr., Salud Borromeo,
Patrocinio Borromeo-Herrera, Marcial Borromeo, Asuncion
Borromeo, Federico V. Borromeo, Consuelo B. Morales,
Remedios Alfonso and Amelinda B. Talam In the waiver, five
of the nine heirs relinquished to Fortunato their shares in the
disputed estate. The motion was opposed on the ground that
the trial court, acting as a probate court, had no jurisdiction
to take cognizance of the claim; that respondent Fortunato
Borromeo is estopped from asserting the waiver agreement;
that the waiver agreement is void as it was executed before
the declaration of heirs; that the same is void having been

executed before the distribution of the estate and before the
acceptance of the inheritance; and that it is void ab initio and
inexistent for lack of subject matter.
On December 24, 1974, after due hearing, the trial court
concluding that the five declared heirs who signed the waiver
agreement assigning their hereditary rights to Fortunato
Borromeo had lost the same rights, declared the latter as
entitled to 5/9 of the estate of Vito Borromeo.
A motion for reconsideration of this order was denied on July
7, 1975.
In the present petition, the petitioner seeks to annul and set
aside the trial court's order dated December 24, 1974,
declaring respondent Fortunato Borromeo entitled to 5/9 of
the estate of Vito Borromeo and the July 7, 1975 order,
denying the motion for reconsideration.
The petitioner argues that the trial court had no jurisdiction to
take cognizance of the claim of respondent Fortunato
Borromeo because it is not a money claim against the
decedent but a claim for properties, real and personal, which
constitute all of the shares of the heirs in the decedent's
estate, heirs who allegedly waived their rights in his favor.
The claim of the private respondent under the waiver
agreement, according to the petitioner, may be likened to
that of a creditor of the heirs which is improper. He alleges
that the claim of the private respondent under the waiver
agreement was filed beyond the time allowed for filing of
claims as it was filed only sometime in 1973, after there had
been a declaration of heirs (April 10, 1969), an agreement of
partition (April 30, 1969), the approval of the agreement of
partition and an order directing the administrator to partition
the estate (August 15, 1969), when in a mere memorandum,
the existence of the waiver agreement was brought out.
It is further argued by the petitioner that the document
entitled " waiver of Hereditary Rights" executed on July 31,
1967, aside from having been cancelled and revoked on
June 29, 1968, by Tomas L. Borromeo, Fortunato Borromeo
and Amelia Borromeo, is without force and effect because
there can be no effective waiver of hereditary rights before
there has been a valid acceptance of the inheritance the
heirs intend to transfer. Pursuant to Article 1043 of the Civil
Code, to make acceptance or repudiation of inheritance
valid, the person must be certain of the death of the one from
whom he is to inherit and of his right to the inheritance. Since
the petitioner and her co-heirs were not certain of their right
to the inheritance until they were declared heirs, their rights
were, therefore, uncertain. This view, according to the
petitioner, is also supported by Article 1057 of the same
Code which directs heirs, devicees, and legatees to signify
their acceptance or repudiation within thirty days after the
court has issued an order for the distribution of the estate.
Respondent Fortunato Borromeo on the other hand,
contends that under Article 1043 of the Civil Code there is no
need for a person to be first declared as heir before he can
accept or repudiate an inheritance. What is required is that
he must first be certain of the death of the person from whom

he is to inherit and that he must be certain of his right to the
inheritance. He points out that at the time of the signing of
the waiver document on July 31, 1967, the signatories to the
waiver document were certain that Vito Borromeo was
already dead as well as of their rights to the inheritance as
shown in the waiver document itself.
With respect to the issue of jurisdiction of the trial court to
pass upon the validity of the waiver of hereditary rights,
respondent Borromeo asserts that since the waiver or
renunciation of hereditary rights took place after the court
assumed jurisdiction over the properties of the estate it
partakes of the nature of a partition of the properties of the
estate needing approval of the court because it was
executed in the course of the proceedings. lie further
maintains that the probate court loses jurisdiction of the
estate only after the payment of all the debts of the estate
and the remaining estate is distributed to those entitled to the
same.
The prevailing jurisprudence on waiver of hereditary rights is
that "the properties included in an existing inheritance cannot
be considered as belonging to third persons with respect to
the heirs, who by fiction of law continue the personality of the
former. Nor do such properties have the character of future
property, because the heirs acquire a right to succession
from the moment of the death of the deceased, by principle
established in article 657 and applied by article 661 of the
Civil Code, according to which the heirs succeed the
deceased by the mere fact of death. More or less, time may
elapse from the moment of the death of the deceased until
the heirs enter into possession of the hereditary property, but
the acceptance in any event retroacts to the moment of the
death, in accordance with article 989 of the Civil Code. The
right is vested, although conditioned upon the adjudication of
the corresponding hereditary portion." (Osorio v. Osorio and
Ynchausti Steamship Co., 41 Phil., 531). The heirs,
therefore, could waive their hereditary rights in 1967 even if
the order to partition the estate was issued only in 1969.
In this case, however, the purported "Waiver of Hereditary
Rights" cannot be considered to be effective. For a waiver to
exist, three elements are essential: (1) the existence of a
right; (2) the knowledge of the existence thereof; and (3) an
intention to relinquish such right. (People v. Salvador, (CA)
53 O.G. No. 22, p. 8116, 8120). The intention to waive a right
or advantage must be shown clearly and convincingly, and
when the only proof of intention rests in what a party does,
his act should be so manifestly consistent with, and
indicative of an intent to, voluntarily relinquish the particular
right or advantage that no other reasonable explanation of
his conduct is possible (67 C.J., 311). (Fernandez v. Sebido,
et al., 70 Phil., 151, 159).
The circumstances of this case show that the signatories to
the waiver document did not have the clear and convincing
intention to relinquish their rights, Thus: (1) On October 27,
1967. Fortunato, Tomas, and Amelia Borromeo filed a
pleading entitled "Compliance" wherein they submitted a

proposal for the amicable settlement of the case. In that
Compliance, they proposed to concede to all the eight (8)
intestate heirs of Vito Borromeo all properties, personal and
real, including all cash and sums of money in the hands of
the Special Administrator, as of October 31, 1967, not
contested or claimed by them in any action then pending in
the Court of First Instance of Cebu. In turn, the heirs would
waive and concede to them all the 14 contested lots. In this
document, the respondent recognizes and concedes that the
petitioner, like the other signatories to the waiver document,
is an heir of the deceased Vito Borromeo, entitled to share in
the estate. This shows that the "Waiver of Hereditary Rights"
was never meant to be what the respondent now purports it
to be. Had the intent been otherwise, there would not be any
reason for Fortunato, Tomas, and Amelia Borromeo to
mention the heirs in the offer to settle the case amicably, and
offer to concede to them parts of the estate of the deceased;
(2) On April 21 and 30, 1969, the majority of the declared
heirs executed an Agreement on how the estate they
inherited shall be distributed. This Agreement of Partition
was approved by the trial court on August 15, 1969; (3) On
June 29, 1968, the petitioner, among others, signed a
document entitled Deed of Assignment" purporting to transfer
and assign in favor of the respondent and Tomas and Amelia
Borromeo all her (Patrocinio B. Herrera's) rights, interests,
and participation as an intestate heir in the estate of the
deceased Vito Borromeo. The stated consideration for said
assignment was P100,000.00; (4) On the same date, June
29, 1968, the respondent Tomas, and Amelia Borromeo
(assignees in the aforementioned deed of assignment) in
turn executed a "Deed of Reconveyance" in favor of the
heirs-assignors named in the same deed of assignment. The
stated consideration was P50,000.00; (5) A Cancellation of
Deed of Assignment and Deed of Reconveyance was signed
by Tomas Borromeo and Amelia Borromeo on October 15,
1968, while Fortunato Borromeo signed this document on
March 24, 1969.
With respect to the issue of jurisdiction, we hold that the trial
court had jurisdiction to pass upon the validity of the waiver
agreement. It must be noted that in Special Proceedings No.
916-R the lower court disallowed the probate of the will and
declared it as fake. Upon appeal, this Court affirmed the
decision of the lower court on March 30, 1967, in G.R. No. L18498. Subsequently, several parties came before the lower
court filing claims or petitions alleging themselves as heirs of
the intestate estate of Vito Borromeo. We see no impediment
to the trial court in exercising jurisdiction and trying the said
claims or petitions. Moreover, the jurisdiction of the trial court
extends to matters incidental and collateral to the exercise of
its recognized powers in handling the settlement of the
estate.
In view of the foregoing, the questioned order of the trial
court dated December 24, 1974, is hereby SET ASIDE.
G.R. No. 55000
This case was originally an appeal to the Court of Appeals
from an order of the Court of First Instance of Cebu, Branch
11, dated December 24, 1974, declaring the waiver

document earlier discussed in G.R. No. 41171 valid. The
appellate court certified this case to this Court as the
questions raised are all of law.
The appellants not only assail the validity of the waiver
agreement but they also question the jurisdiction of the lower
court to hear and decide the action filed by claimant
Fortunato Borromeo.
The appellants argue that when the waiver of hereditary right
was executed on July 31, 1967, Pilar Borromeo and her
children did not yet possess or own any hereditary right in
the intestate estate of the deceased Vito Borromeo because
said hereditary right was only acquired and owned by them
on April 10, 1969, when the estate was ordered distributed.
They further argue that in contemplation of law, there is no
such contract of waiver of hereditary right in the present case
because there was no object, which is hereditary right, that
could be the subject matter of said waiver, and, therefore,
said waiver of hereditary right was not only null and void ab
initio but was inexistent.
With respect to the issue of jurisdiction, the appellants
contend that without any formal pleading filed by the lawyers
of Fortunato Borromeo for the approval of the waiver
agreement and without notice to the parties concerned, two
things which are necessary so that the lower court would be
vested with authority and jurisdiction to hear and decide the
validity of said waiver agreement, nevertheless, the lower
court set the hearing on September 25, 1973 and without
asking for the requisite pleading. This resulted in the
issuance of the appealed order of December 24, 1974, which
approved the validity of the waiver agreement. The
appellants contend that this constitutes an error in the
exercise of jurisdiction.
The appellee on the other hand, maintains that by waiving
their hereditary rights in favor of Fortunato Borromeo, the
signatories to the waiver document tacitly and irrevocably
accepted the inheritance and by virtue of the same act, they
lost their rights because the rights from that moment on
became vested in Fortunato Borromeo.
It is also argued by the appellee that under Article 1043 of
the Civil Code there is no need for a person to be declared
as heir first before he can accept or repudiate an inheritance.
What is required is that he is certain of the death of the
person from whom he is to inherit, and of his right to the
inheritance. At the time of the signing of the waiver document
on July 31, 1967, the signatories to the waiver document
were certain that Vito Borromeo was already dead and they
were also certain of their right to the inheritance as shown by
the waiver document itself.
On the allegation of the appellants that the lower court did
not acquire jurisdiction over the claim because of the alleged
lack of a pleading invoking its jurisdiction to decide the claim,
the appellee asserts that on August 23, 1973, the lower court

issued an order specifically calling on all oppositors to the
waiver document to submit their comments within ten days
from notice and setting the same for hearing on September
25, 1973. The appellee also avers that the claim as to a 5/9
share in the inheritance involves no question of title to
property and, therefore, the probate court can decide the
question.
The issues in this case are similar to the issues raised in
G.R. No. 41171. The appellants in this case, who are all
declared heirs of the late Vito Borromeo are contesting the
validity of the trial court's order dated December 24, 1974,
declaring Fortunato Borromeo entitled to 5/9 of the estate of
Vito Borromeo under the waiver agreement.
As stated in G.R. No. 41171, the supposed waiver of
hereditary rights can not be validated. The essential
elements of a waiver, especially the clear and convincing
intention to relinquish hereditary rights, are not found in this
case.
The October 27, 1967 proposal for an amicable settlement
conceding to all the eight (8) intestate heirs various
properties in consideration for the heirs giving to the
respondent and to Tomas, and Amelia Borromeo the fourteen
(14) contested lots was filed inspite of the fact that on July
31, 1967, some of the heirs had allegedly already waived or
sold their hereditary rights to the respondent.
The agreement on how the estate is to be distributed, the
June 29, 1968 deed of assignment, the deed of
reconveyance, and the subsequent cancellation of the deed
of assignment and deed of reconveyance all argue against
the purported waiver of hereditary rights.
Concerning the issue of jurisdiction, we have already stated
in G.R. No. 41171 that the trial court acquired jurisdiction to
pass upon the validity of the waiver agreement because the
trial court's jurisdiction extends to matters incidental and
collateral to the exercise of its recognized powers in handling
the settlement of the estate.
The questioned order is, therefore, SET ASIDE.
G.R. No. 62895
A motion dated April 28, 1972, was filed by Atty. Raul M.
Sesbreno, representative of some of the heirs-distributees,
praying for the immediate closure of Special Proceeding No.
916-R. A similar motion dated May 29, 1979 was filed by Atty.
Jose Amadora. Both motions were grounded on the fact that
there was nothing more to be done after the payment of all
the obligations of the estate since the order of partition and
distribution had long become final.
Alleging that respondent Judge Francisco P. Burgos failed or
refused to resolve the aforesaid motions, petitioner Jose
Cuenco Borromeo-filed a petition for mandamus before the
Court of Appeals to compel the respondent judge to
terminate and close Special Proceedings No. 916-R.
Finding that the inaction of the respondent judge was due to

pending motions to compel the petitioner, as coadministrator, to submit an inventory of the real properties of
the estate and an accounting of the cash in his hands,
pending claims for attorney's fees, and that mandamus will
not lie to compel the performance of a discretionary function,
the appellate court denied the petition on May 14, 1982. The
petitioner's motion for reconsideration was likewise denied
for lack of merit. Hence, this petition.
The petitioner's stand is that the inaction of the respondent
judge on the motion filed on April 28, 1972 for the closure of
the administration proceeding cannot be justified by the filing
of the motion for inventory and accounting because the latter
motion was filed only on March 2, 1979. He claimed that
under the then Constitution, it is the duty of the respondent
judge to decide or resolve a case or matter within three
months from the date of its submission.
The respondents contend that the motion to close the
administration had already been resolved when the
respondent judge cancelled all settings of all incidents
previously set in his court in an order dated June 4, 1979,
pursuant to the resolution and restraining order issued by the
Court of Appeals enjoining him to maintain status quo on the
case.
As stated in G.R. No. 41171, on April 21 and 30, 1969, the
declared heirs, with the exception of Patrocinio B. Herrera,
signed an agreement of partition of the properties of the
deceased Vito Borromeo which was approved by the trial
court, in its order dated August 15, 1969. In this same order,
the trial court ordered the administrator, Atty. Jesus Gaboya,
Jr., to partition the properties of the deceased in the way and
manner they are divided and partitioned in the said
Agreement of Partition and further ordered that 40% of the
market value of the 4/9 and 5/9 of the estate shall be
segregated and reserved for attorney's fees.
According to the manifestation of Judge Francisco Burgos
dated July 5, 1982, (p. 197, Rollo, G. R. No. 41171) his court
has not finally distributed to the nine (9) declared heirs the
properties due to the following circumstances:
1. The court's determination of the market value of the estate
in order to segregate the 40% reserved for attorney's fees;
2. The order of December 24, 1974, declaring Fortunato
Borromeo as beneficiary of the 5/9 of the estate because of
the waiver agreement signed by the heirs representing the
5/9 group which is still pending resolution by this Court (G.R.
No. 4117 1);
3. The refusal of administrator Jose Cuenco Borromeo to
render his accounting; and
4. The claim of Marcela Villegas for 1/2 of the estate causing
annotations of notices of lis pendens on the different titles of
the properties of the estate.

Since there are still real properties of the estate that were not
vet distributed to some of the declared heirs, particularly the
5/9 group of heirs due to the pending resolution of the waiver
agreement, this Court in its resolution of June 15, 1983,
required the judge of the Court of First Instance of Cebu,
Branch 11, to expedite the determination of Special
Proceedings No. 916-R and ordered the co-administrator
Jose Cuenco Borromeo to submit an inventory of real
properties of the estate and to render an accounting of cash
and bank deposits realized from rents of several properties.
The matter of attorney's fees shall be discussed in G.R. No.
65995.
Considering the pronouncements stated in:
1. G.R. No. 41171 & G.R. No. 55000, setting aside the Order
of the trial court dated December 24, 1974;
2. G.R. No. 63818, denying the petition for review seeking to
modify the decision of the Intermediate Appellate Court
insofar as it disqualifies and inhibits Judge Francisco P.
Burgos from further hearing the Intestate Estate of Vito
Borromeo and ordering the remand of the case to the
Executive,Judge of the Regional trial Court of Cebu for reraffling; and
3. G.R. No. 65995, granting the petition to restrain the
respondents from further acting on any and all incidents in
Special proceedings No. 916-11 because of the affirmation of
the decision of the Intermediate Appellate Court in G.R. No.
63818.
the trial court may now terminate and close Special
Proceedings No. 916-R, subject to the submission of an
inventory of the real properties of the estate and an
accounting of the call and bank deposits of the petitioner, as
co-administrator of the estate, if he has not vet done so, as
required by this Court in its Resolution dated June 15, 1983.
This must be effected with all deliberate speed.
G.R. No. 63818
On June 9, 1979, respondents Jose Cuenco Borromeo and
Petra 0. Borromeo filed a motion for inhibition in the Court of
First Instance of Cebu, Branch 11, presided over by Judge
Francisco P. Burgos to inhibit the judge from further acting in
Special Proceedings No. 916-R. 'The movants alleged,
among others, the following:
xxx
xxx
xxx
6. To keep the agitation to sell moving, Atty. Antigua filed a

motion for the production of the certificates of title and to
deposit the same with the Branch Clerk of Court, presumably
for the ready inspection of interested buyers. Said motion
was granted by the Hon. Court in its order of October 2,
1978 which, however, became the subject of various motions
for reconsideration from heirs-distributees who contended
that as owners they cannot be deprived of their titles for the

flimsy reasons advanced by Atty, Antigua. In view of the
motions for reconsideration, Atty Antigua ultimately withdraw
his motions for production of titles.
7. The incident concerning the production of titles triggered
another incident involving Atty. Raul H. Sesbreno who was
then the counsel of herein movants Petra O. Borromeo and
Amelinda B. Talam In connection with said incident, Atty.
Sesbreno filed a pleading which the tion. presiding, Judge
Considered direct contempt because among others, Atty.
Sesbreno insinuated that the Hon. Presiding Judge stands to
receive "fat commission" from the sale of the entire property.
Indeed, Atty. Sesbreno was seriously in danger of being
declared in contempt of court with the dim prospect of
suspension from the practice of his profession. But obviously
to extricate himself from the prospect of contempt and
suspension. Atty. Sesbreno chose rapproachment and
ultimately joined forces with Atty. Antigua, et al., who,
together, continued to harass administrator
xxx
xxx
xxx
9. The herein movants are informed and so they allege, that

a brother of the Hon. Presiding Judge is married to a sister of
Atty. Domingo L. Antigua.
10. There is now a clear tug of war bet ween Atty. Antigua, et
al. who are agitating for the sale of the entire estate or to buy
out the individual heirs, on the one hand, and the herein
movants, on the other, who are not willing to sell their
distributive shares under the terms and conditions presently
proposed. In this tug of war, a pattern of harassment has
become apparent against the herein movants, especially
Jose Cuenco Borromeo. Among the harassments employed
by Atty Antigua et al. are the pending motions for the removal
of administrator Jose Cuenco Borromeo, the subpoena
duces tecum issued to the bank which seeks to invade into
the privacy of the personal account of Jose Cuenco
Borromeo, and the other matters mentioned in paragraph 8
hereof. More harassment motions are expected until the
herein movants shall finally yield to the proposed sale. In
such a situation, the herein movants beg for an entirely
independent and impartial judge to pass upon the merits of
said incidents.
11. Should the Hon. Presiding Judge continue to sit and take
cognizance of this proceeding, including the incidents abovementioned, he is liable to be misunderstood as being biased
in favor of Atty Antigua, et al. and prejudiced against the
herein movants. Incidents which may create this impression
need not be enumerated herein. (pp. 39-41, Rollo)
The motion for inhibition was denied by Judge Francisco P.
Burgos. Their motion for reconsideration having been
denied, the private respondents filed a petition for certiorari
and/or prohibition with preliminary injunction before the
Intermediate Appellate Court.

In the appellate court, the private respondents alleged,
among others, the following:
xxx
xxx
xxx
16. With all due respect, petitioners regret the necessity of

having to state herein that respondent Hon. Francisco P.
Burgos has shown undue interest in pursing the sale initiated
by Atty. Domingo L. Antigua, et al. Significantly, a brother of
respondent Hon. Francisco P. Burgos is married to a sister of
Atty. Domingo L. Antigua.
17. Evidence the proposed sale of the entire properties of
the estate cannot be legally done without the conformity of
the heirs-distributees because the certificates of title are
already registered in their names Hence, in pursuit of the
agitation to sell, respondent Hon. Francisco P. Burgos urged
the heirs-distributees to sell the entire property based on the
rationale that proceeds thereof deposited in the bank will
earn interest more than the present income of the so called
estate. Most of the heirs-distributees, however. have been
petitioner timid to say their piece. Only the 4/9 group of heirs
led by Jose Cuenco Borromeo have had the courage to
stand up and refuse the proposal to sell clearly favored by
respondent Hon. Francisco P. Burgos.
xxx
xxx
xxx
20. Petitioners will refrain from discussing herein the merits

of the shotgun motion of Atty. Domingo L. Antigua as well as
other incidents now pending in the court below which smack
of harassment against the herein petitioners. For, regardless
of the merits of said incidents, petitioners respectfully
contend that it is highly improper for respondent Hon.
Francisco P. Burgos to continue to preside over Sp. Proc.
No. 916-R by reason of the following circumstances:
(a) He has shown undue interest in the sale of the properties
as initiated by Atty. Domingo L. Antigua whose sister is
married to a brother of respondent.
(b) The proposed sale cannot be legally done without the
conformity of the heirs-distributees, and petitioners have
openly refused the sale, to the great disappointment of
respondent.
(c) The shot gun motion of Atty. Antigua and similar incidents
are clearly intended to harass and embarrass administrator
Jose Cuenco Borromeo in order to pressure him into
acceding to the proposed sale.
(d) Respondent has shown bias and prejudice against
petitioners by failing to resolve the claim for attorney's fees
filed by Jose Cuenco Borromeo and the late Crispin
Borromeo. Similar claims by the other lawyers were resolved
by respondent after petitioners refused the proposed sale.
(pp. 41-43, Rollo)
On March 1, 1983, the appellate court rendered its decision

granting the petition for certiorari and/or prohibition and
disqualifying Judge Francisco P. Burgos from taking further
cognizance of Special Proceedings No. 916-R. The court
also ordered the transmission of the records of the case to
the Executive Judge of the Regional Trial Court of Region VII
for re-raffling.
A motion for reconsideration of the decision was denied by
the appellate court on April 11, 1983. Hence, the present
petition for review seeking to modify the decision of the
Intermediate Appellate Court insofar as it disqualifies and
inhibits Judge Francisco P. Burgos from further hearing the
case of Intestate Estate of Vito Borromeo and orders the
remand of the case to the Executive Judge of the Regional
Trial Court of Cebu for re-raffling.
The principal issue in this case has become moot and
academic because Judge Francisco P. Burgos decided to
retire from the Regional Trial Court of Cebu sometime before
the latest reorganization of the judiciary. However, we decide
the petition on its merits for the guidance of the judge to
whom this case will be reassigned and others concerned.
The petitioners deny that respondent Jose Cuenco
Borromeo has been harassed. They contend that Judge
Burgos has benn shown unusual interest in the proposed
sale of the entire estate for P6,700,000.00 in favor of the
buyers of Atty. Antigua. They claim that this disinterest is
shown by the judge's order of March 2, 1979 assessing the
property of the estate at P15,000,000.00. They add that he
only ordered the administrator to sell so much of the
properties of the estate to pay the attorney's fees of the
lawyers-claimants. To them, the inhibition of Judge Burgos
would have been unreasonable because his orders against
the failure of Jose Cuenco Borromeo, as administrator, to
give an accounting and inventory of the estate were all
affirmed by the appellate court. They claim that the
respondent court, should also have taken judicial notice of
the resolution of this Court directing the said judge to
"expedite the settlement and adjudication of the case" in
G.R. No. 54232. And finally, they state that the
disqualification of judge Burgos would delay further the
closing of the administration proceeding as he is the only
judge who is conversant with the 47 volumes of the records
of the case.
Respondent Jose Cuenco Borromeo, to show that he had
been harassed. countered that Judge Burgos appointed
Ricardo V. Reyes as co-administrator of the estate on
October 11, 1972, yet Borromeo was singled out to make an
accounting of what t he was supposed to have received as
rentals for the land upon which the Juliana Trade Center is
erected, from January, 1977 to February 1982, inclusive,
without mentioning the withholding tax for the Bureau of
Internal Revenue. In order to bolster the agitation to sell as
proposed by Domingo L. Antigua, Judge Burgos invited
Antonio Barredo, Jr., to a series of conferences from
February 26 to 28, 1979. During the conferences, Atty.
Antonio Barredo, Jr., offered to buy the shares of the heirs-

distributees presumably to cover up the projected sale
initiated by Atty. Antigua.
On March 2, 1979, or two days after the conferences, a
motion was filed by petitioner Domingo L. Antigua praying
that Jose Cuenco Borromeo be required to file an inventory
when he has already filed one to account for cash, a report
on which the administrators had already rendered: and to
appear and be examined under oath in a proceeding
conducted by Judge Burgos lt was also prayed that
subpoena duces tecum be issued for the appearance of the
Manager of the Consolidated Bank and Trust Co., bringing
all the bank records in the name of Jose Cuenco Borromeo
jointly with his wife as well as the appearance of heirsdistributees Amelinda Borromeo Talam and another heir
distributee Vitaliana Borromeo. Simultaneously with the filing
of the motion of Domingo Antigua, Atty. Raul H. Sesbreno
filed a request for the issuance of subpoena duces tecum to
the Manager of Consolidated Bank and 'Trust Co., Inc.;
Register of Deeds of Cebu City; Register of Deeds for the
Province of Cebu and another subpoena duces tecum to
Atty. Jose Cuenco Borromeo.
On the same date, the Branch Clerk of Court issued a
subpoena duces tecum to the Managert of the bank, the
Register of deeds for the City of Cebu, the Register of Deeds
for the Province, of Cebu. and to Jose Cuenco Borromeo.
On the following day, March 3, 1979, Atty Gaudioso v.
Villagonzalo in behalf of the heirs of Marcial Borromeo who
had a common cause with Atty Barredo, Jr., joined petitioner
Domingo L. Antigua by filing a motion for relief of the
administrator.
On March 5, 1979, Atty. Villagonzalo filed a request for the
issuance of a subpoena duces tecum to private respondent
Jose Cuenco Borromeo to bring and produce all the owners"
copies of the titles in the court presided order by Judge
Burgos.
Consequently. the Branch Clerk of Court issued a subpoena
duces tecum commanding Atty. Jose Cuenco Borromeo to
bring and produce the titles in court.
All the above-incidents were set for hearing on June 7, 1979
but on June 14, 1979, before the date of the hearing, Judge
Burgos issued an order denying the private respondents'
motion for reconsideration and the motion to quash the
subpoena.1avvphi1
It was further argued by the private respondents that if ,judge
Francisco P. Burgos is not inhibited or disqualified from trying
Sp. Proc. No. 916-R, there would be a miscarriage of justice
Because for the past twelve years, he had not done anything
towards the closure of the estate proceedings except to sell
the properties of the heirs-distributees as initiated by
petitioner Domingo L. Antigua at 6.7 million pesos while the
Intestate Court had already evaluated it at 15 million pesos.
The allegations of the private respondents in their motion for

inhibition, more specifically, the insistence of the trial judge to
sell the entire estate at P6,700,000.00, where 4/9 group of
heirs objected, cannot easily be ignored. Suspicion of
partiality on the part of a trial judge must be avoided at all
costs. In the case of Bautista v. Rebeuno (81 SCRA 535),
this Court stated:
... The Judge must maintain and preserve the trust and faith
of the parties litigants. He must hold himself above reproach
and suspicion. At the very first sign of lack of faith and trust
to his actions, whether well grounded or not, the Judge has
no other alternative but inhibit himself from the case. A judge
may not be legally Prohibited from sitting in a litigation, but
when circumstances appear that will induce doubt to his
honest actuations and probity in favor or of either partly or
incite such state of mind, he should conduct a careful selfexamination. He should exercise his discretion in a way that
the people's faith in the Courts of Justice is not impaired,
"The better course for the Judge under such circumstances
is to disqualify himself "That way he avoids being
misunderstood, his reputation for probity and objectivity is
preserve ed. what is more important, the Ideal of impartial
administration of justice is lived up to.
In this case, the fervent distrust of the private respondents is
based on sound reasons. As Earlier stated, however, the
petition for review seeking to modify the decision of the
Intermediate Appellate Court insofar as it disqualifies and
inhibits Judge Francisco P. Burgos from further hearing the
Intestate Estate of Vito Borromeo case and ordering the
remand of the case to the Executive Judge of the Regional
Trial Court for re-raffling should be DENIED for the decision
is not only valid but the issue itself has become moot and
academic.
G.R. No. 65995
The petitioners seek to restrain the respondents from further
acting on any and all incidents in Special Proceedings No.
916-R during the pendency of this petition and No. 63818.
They also pray that all acts of the respondents related to the
said special proceedings after March 1, 1983 when the
respondent Judge was disqualified by the appellate court be
declared null and void and without force and effect
whatsoever.
The petitioners state that the respondent Judge has set for
hearing all incidents in Special Proceedings No. 916-R,
including the reversion from the heirs-distributees to the
estate, of the distributed properties already titled in their
names as early as 1970, notwithstanding the pending
inhibition case elevated before this Court which is docketed
as G.R. No. 63818.
The petitioners further argue that the present status of
Special Proceeding No. 916-R requires only the appraisal of
the attorney's fees of the lawyers-claimants who were
individually hired by their respective heirs-clients, so their

attorney's fees should be legally charged against their
respective clients and not against the estate.
On the other hand, the respondents maintain that the petition
is a dilatory one and barred by res judicata because this
Court on July 8, 1981, in G.R. No. 54232 directed the
respondent Judge to expedite the settlement and liquidation
of the decedent's estate. They claim that this resolution,
which was already final and executory, was in effect reversed
and nullified by the Intermediate Appellate Court in its caseAC G.R.-No. SP - 11145 when it granted the petition for
certiorari and or prohibition and disqualified Judge Francisco
P. Burgos from taking further cognizance of Special
Proceedings No. 916R as well as ordering the transmission
of the records of the case to the Executive Judge of the
Regional Trial Court of Region VII for re-raffling on March 1,
1983, which was appealed to this Court by means of a
Petition for Review (G.R. No. 63818).
We agree with the petitioners' contention that attorney's fees
are not the obligation of the estate but of the individual heirs
who individually hired their respective lawyers. The portion,
therefore, of the Order of August 15, 1969, segregating the
exhorbitantly excessive amount of 40% of the market value
of the estate from which attorney's fees shall be taken and
paid should be deleted.
Due to our affirmance of the decision of the Intermediate
Appellate Court in G.R. No. 63818, we grant the petition.
WHEREFORE,
(1) In G.R. No. 41171, the order of the respondent judge
dated December 24, 1974, declaring the respondent entitled
to 5/9 of the estate of the late Vito Borromeo and the order
dated July 7, 1975, denying the petitioner's motion for
reconsideration of the aforementioned order are hereby SET
ASIDE for being NULL and VOID;
subject to the submission of an inventory of the real

properties of the estate and an accounting of the cash and
bank deposits by the petitioner-administrator of the estate as
required by this Court in its Resolution dated June 15, 1983;
and
(6) The portion of the Order of August 15, 1969, segregating
40% of the market value of the estate from which attorney's
fees shall be taken and paid should be, as it is hereby
DELETED. The lawyers should collect from the heirsdistributees who individually hired them, attorney's fees
according to the nature of the services rendered but in
amounts which should not exceed more than 20% of the
market value of the property the latter acquired from the
estate as beneficiaries.
SO ORDERED.
DELA MERCED v. DELA MERCED
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 126707
February 25, 1999
BLANQUITA E. DELA MERCED, LUISITO E. DELA

MERCED, BLANQUTIA M. MACATANGAY, MA. OLIVIA M.
PAREDES, TERESITA P. RUPISAN, RUBEN M. ADRIANO,
HERMINIO M. ADRIANO, JOSELITO M. ADRIANO,
ROGELIO M. ADRIANO, WILFREDO M. ADRIANO,
VICTOR M. ADRIANO, CORAZON A. ONGOCO, JASMIN
A. MENDOZA and CONSTANTINO M. ADRIANO,
petitioners,
vs.
JOSELITO P. DELA MERCED, respondent.
(2) In G.R. No. 55000, the order of the trial court declaring
the waiver document valid is hereby SET ASIDE;
(3) In G.R. No. 63818, the petition is hereby DENIED. The
issue in the decision of the Intermediate Appellate Court
disqualifying and ordering the inhibition of Judge Francisco
P. Burgos from further hearing Special Proceedings No. 916R is declared moot and academic. The judge who has taken
over the sala of retired Judge Francisco P. Burgos shall
immediately conduct hearings with a view to terminating the
proceedings. In the event that the successor-judge is
likewise disqualified, the order of the Intermediate Appellate
Court directing the Executive Judge of the Regional Trial
Court of Cebu to re-raffle the case shall be implemented:
(4) In G.R. No. 65995, the petition is hereby GRANTED. 'The
issue seeking to restrain Judge Francisco P. Burgos from
further acting in G.R. No. 63818 is MOOT and ACADEMIC:
(5) In G.R, No, 62895, the trial court is hereby ordered to
speedily terminate the close Special Proceedings No. 916-R,
PURISIMA, J.:
This is a Petition for Review on Certiorari of the Decision of
the Court of Appeals, dated October 17, 1996, in CA-G.R.
CV No. 41283, which reversed the decision, dated June 10,
1992, of the Regional Trial Court, Branch 67, Pasig City, in
Civil Case No. 59705.
The facts of the case are, as follows:
On March 23, 1987, Evarista M. dela Merced died intestate,
without issue. She left five (5) parcels of land situated in
Orambo, Pasig City.
At the time of her death, Evarista was survived by three sets
of heirs, viz: (1) Francisco M. dela Merced, her legitimate
brother; (2) Teresita P. Rupisan, her niece who is the only
daughter of Rosa dela Merced-Platon (a sister who died in

1943); and (3) the legitimate children of Eugenia dela
Merced-Adriano (another sister of Evarista who died in
1965), namely: Herminio, Ruben, Joselito, Rogelio, Wilfredo,
Victor and Constantino, all surnamed Adriano, Corazon
Adriano-Ongoco and Jasmin Adriano-Mendoza.
Almost a year later or on March 19, 1988, to be precise,
Francisco (Evarista's brother) died. He was survived by his
wife Blanquita Errea dela Merced and their three legitimate
children, namely, Luisito E. dela Merced, Blanquita M.
Macatangay and Ma. Olivia M. Paredes.
On April 20, 1989, the three sets of heirs of the decedent,
Evarista M. dela Merced, referring to (1) the abovenamed
heirs of Francisco; (2) Teresita P. Rupisan and (3) the nine
[9] legitimate children of Eugenia, executed an extrajudicial
settlement, entitled "Extrajudicial Settlement of the Estate of
the Deceased Evarista M. dela Merced" adjudicating the
properties of Evarista to them, each set with a share of onethird (1/3) pro-indiviso.
On July 26, 1990, private respondent Joselito P. Dela
Merced, illegitimate son of the late Francisco de la Merced,
filed a "Petition for Annulment of the Extrajudicial Settlement
of the Estate of the Deceased Evarista M. Dela Merced with
Prayer for a Temporary Restraining Order", alleging that he
was fraudulently omitted from the said settlement made by
petitioners, who were fully aware of his relation to the late
Francisco. Claiming successional rights, private respondent
Joselito prayed that he be included as one of the
beneficiaries, to share in the one-third (1/3) pro-indiviso
share in the estate of the deceased Evarista, corresponding
to the heirs of Francisco.
On August 3, 1990, the trial court issued the temporary
restraining order prayed for by private respondent Joselito,
enjoining the sale of any of the real properties of the
deceased Evarista.
After trial, however, or on June 10, 1992, to be definite, the
trial court dismissed the petition, lifted the temporary
restraining order earlier issued, and cancelled the notice of
lis pendens on the certificates of title covering the real
properties of the deceased Evarista.
In dismissing the petition, the trial court stated:
The factual setting of the instant motion after considering the
circumstances of the entire case and the other evidentiary
facts and documents presented by the herein parties points
only to one issue which goes into the very skeleton of the
controversy, to wit: "Whether or not the plaintiff may
participate in the intestate estate of the late Evarista M. Dela
Merced in his capacity as representative of his alleged
father, Francisdo Dela Merced, brother of the deceased,
whose succession is under consideration.
xxx xxx xxx
It is to be noted that Francisco Dela Merced, alleged father

of the herein plaintiff, is a legitimate child, not an illegitimate.
Plaintiff, on the other hand, is admittedly an illegitimate child
of the late Francisco Dela Merced. Hence, as such, he
cannot represent his alleged father in the succession of the
latter in the intestate estate of the late Evarista Dela Merced,
because of the barrier in Art. 992 of the New Civil Code
which states that:
An illegitimate child has no right to inherit ab intestato from
the legitimate children and relatives of his father or mother,
nor shall such children or relatives inherit in the same
manner from the illegitimate child.
The application of Art. 992 cannot be ignored in the instant
case, it is clearly worded in such a way that there can be no
room for any doubts and ambiguities. This provision of the
law imposes a barrier between the illegitimate and the
legitimate family. . . . (Rollo, p. 87-88)
Not satisfied with the dismissal of his petition, the private
respondent appealed to the Court of Appeals.
In its Decision of October 17, 1996, the Court of Appeals
reversed the decision of the trial court of origin and ordered
the petitioners to execute an amendatory agreement which
shall form part of the original settlement, so as to include
private respondent Joselito as a co-heir to the estate of
Francisco, which estate includes one-third (1/3) pro indiviso
of the latter's inheritance from the deceased Evarista.
The relevant and dispositive part of the Decision of the Court
of Appeals, reads:
xxx xxx xxx
It is a basic principle embodied in Article 777, New Civil
Code that the rights to the succession are transmitted from
the moment of the death of the decedent, so that Francisco
dela Merced inherited 1/3 of his sister's estate at the moment
of the latter's death. Said 1/3 of Evarista's estate formed part
of Francisco's estate which was subsequently transmitted
upon his death on March 23, 1987 to his legal heirs, among
whom is appellant as his illegitimate child. Appellant became
entitled to his share in Francisco's estate from the time of the
latter's death in 1987. The extrajudicial settlement therefore
is void insofar as it deprives plaintiff-appellant of his share in
the estate of Francisco M. dela Merced. As a consequence,
the cancellation of the notice of lis pendens is not in order
because the property is directly affected. Appellant has the
right to demand a partition of his father's estate which
includes 1/3 of the property inherited from Evarista dela
Merced.
WHEREFORE, premises considered, the appealed decision
is hereby REVERSED and SET ASIDE. Defendantsappellees are hereby ordered to execute an amendatory
agreement/settlement to include herein plaintiff-appellant
Joselito dela Merced as co-heir to the estate of Francisco
dela Merced which includes 1/3 of the estate subject of the

questioned Deed of Extrajudicial Settlement of the Estate of
Evarista M. dela Merced dated April 20, 1989. The
amendatory agreement/settlement shall form part of the
original Extrajudicial Settlement. With costs against
defendants-appellees.
SO ORDERED. (Rollo, p. 41)
In the Petition under consideration, petitioners insist that
being an illegitimate child, private respondent Joselito is
barred from inheriting from Evarista because of the provision
of Article 992 of the New Civil Code, which lays down an
impassable barrier between the legitimate and illegitimate
families.
husband, in which case she could receive whatever

allowance the intestate court would grant her.
The present case, however, relates to the rightful and
undisputed right of an heir to the share of his late father in
the estate of the decedent Evarista, ownership of which had
been transmitted to his father upon the death of Evarista.
There is no legal obstacle for private respondent Joselito,
admittedly the son of the late Francisco, to inherit in his own
right as an heir to his father's estate, which estate includes a
one-third (1/3) undivided share in the estate of Evarista.
WHEREFORE, for lack of merit, the Petition is hereby
DENIED and the Appealed Decision of the Court of Appeals
AFFIRMED in toto.
The Petition is devoid of merit.

SO ORDERED.
Article 992 of the New Civil Code is not applicable because
involved here is not a situation where an illegitimate child
would inherit ab intestato from a legitimate sister of his
father, which is prohibited by the aforesaid provision of law.
Rather, it is a scenario where an illegitimate child inherits
from his father, the latter's share in or portion of, what the
latter already inherited from the deceased sister, Evarista.
As opined by the Court of Appeals, the law in point in the
present case is Article 777 of the New Civil Code which
provides that the rights to succession are transmitted from
the moment of death of the decedent.
Since Evarista died ahead of her brother Francisco, the latter
inherited a portion of the estate of the former as one of her
heirs. Subsequently, when Francisco died, his heirs, namely:
his spouse, legitimate children, and the private respondent,
Joselito, an illegitimate child, inherited his (Francisco's)
share in the estate of Evarista. It bears stressing that Joselito
does not claim to be an heir of Evarista by right of
representation but participates in his own right, as an heir of
the late Francisco, in the latter's share (or portion thereof) in
the estate of Evarista.
GAYON v. GAYON
SUPREME COURT
Manila
EN BANC
G.R. No. L-28394
November 26, 1970
PEDRO GAYON, plaintiff-appellant,

vs.
SILVESTRE GAYON and GENOVEVA DE GAYON,
defendants-appellees.
German M. Lopez for plaintiff-appellant.
Pedro R. Davila for defendants-appellees.
CONCEPCION, C.J.:
Petitioners argue that if Joselito desires to assert
successional rights to the intestate estate of his father, the
proper forum should be in the settlement of his own father's
intestate estate, as this Court held in the case of Gutierrez
vs. Macandog (150 SCRA 422 [1987])
Petitioners' reliance on the case of Gutierrez vs. Macandog
(supra) is misplaced. The said case involved a claim for
support filed by one Elpedia Gutierrez against the estate of
the decedent, Agustin Gutierrez, Sr., when she was not even
an heir to the estate in question, at the time, and the
decedent had no obligation whatsoever to give her support.
Thus, this Court ruled that Elpedia should have asked for
support pendente lite before the Juvenile and Domestic
Relations Court in which court her husband (one of the legal
heirs of the decedent) had instituted a case for legal
separation against her on the ground of an attempt against
his life. When Mauricio (her husband) died, she should have
commenced an action for the settlement of the estate of her
Appeal, taken by plaintiff Pedro Gayon, from an order of the

Court of First Instance of Iloilo dismissing his complaint in
Civil Case No. 7334 thereof.
The records show that on July 31, 1967, Pedro Gayon filed
said complaint against the spouses Silvestre Gayon and
Genoveva de Gayon, alleging substantially that, on October
1, 1952, said spouses executed a deed copy of which
was attached to the complaint, as Annex "A" whereby they
sold to Pedro Gelera, for the sum of P500.00, a parcel of
unregistered land therein described, and located in the barrio
of Cabubugan, municipality of Guimbal, province of Iloilo,
including the improvements thereon, subject to redemption
within five (5) years or not later than October 1, 1957; that
said right of redemption had not been exercised by Silvestre
Gayon, Genoveva de Gayon, or any of their heirs or
successors, despite the expiration of the period therefor; that

said Pedro Gelera and his wife Estelita Damaso had, by
virtue of a deed of sale copy of which was attached to the
complaint, as Annex "B" dated March 21, 1961, sold the
aforementioned land to plaintiff Pedro Gayon for the sum of
P614.00; that plaintiff had, since 1961, introduced thereon
improvements worth P1,000; that he had, moreover, fully
paid the taxes on said property up to 1967; and that Articles
1606 and 1616 of our Civil Code require a judicial decree for
the consolidation of the title in and to a land acquired through
a conditional sale, and, accordingly, praying that an order be
issued in plaintiff's favor for the consolidation of ownership in
and to the aforementioned property.
of law, "from the moment of the death of the decedent" 3and

"(t)he inheritance includes all the property, rights and
obligations of a person which are not extinguished by his
death," 4it follows that if his heirs were included as
defendants in this case, they would be sued, not as
"representatives" of the decedent, but as owners of an
aliquot interest in the property in question, even if the precise
extent of their interest may still be undetermined and they
have derived it from the decent. Hence, they may be sued
without a previous declaration of heirship, provided there is
no pending special proceeding for the settlement of the
estate of the decedent. 5
In her answer to the complaint, Mrs. Gayon alleged that her

husband, Silvestre Gayon, died on January 6, 1954, long
before the institution of this case; that Annex "A" to the
complaint is fictitious, for the signature thereon purporting to
be her signature is not hers; that neither she nor her
deceased husband had ever executed "any document of
whatever nature in plaintiff's favor"; that the complaint is
malicious and had embarrassed her and her children; that
the heirs of Silvestre Gayon had to "employ the services of
counsel for a fee of P500.00 and incurred expenses of at
least P200.00"; and that being a brother of the deceased
Silvestre Gayon, plaintiff "did not exert efforts for the
amicable settlement of the case" before filing his complaint.
She prayed, therefore, that the same be dismissed and that
plaintiff be sentenced to pay damages.
As regards plaintiff's failure to seek a compromise, as an

alleged obstacle to the present case, Art. 222 of our Civil
Code provides:
Soon later, she filed a motion to dismiss, reproducing

substantially the averments made in her answer and
stressing that, in view of the death of Silvestre Gayon, there
is a "necessity of amending the complaint to suit the genuine
facts on record." Presently, or on September 16, 1967, the
lower court issued the order appealed from, reading:
No suit shall be filed or maintained between members of the

same family unless it should appear that earnest efforts
toward a compromise have been made, but that the same
have failed, subject to the limitations in article 2035.
It is noteworthy that the impediment arising from this
provision applies to suits "filed or maintained between
members of the same family." This phrase, "members of the
same family," should, however, be construed in the light of
Art. 217 of the same Code, pursuant to which:
Family relations shall include those:
(1) Between husband and wife;
(2) Between parent and child;
(3) Among other ascendants and their descendants;
Considering the motion to dismiss and it appearing from

Exhibit "A" annexed to the complaint that Silvestre Gayon is
the absolute owner of the land in question, and considering
the fact that Silvestre Gayon is now dead and his wife
Genoveva de Gayon has nothing to do with the land subject
of plaintiff's complaint, as prayed for, this case is hereby
dismissed, without pronouncement as to costs. 1
A reconsideration of this order having been denied, plaintiff
interposed the present appeal, which is well taken.
Said order is manifestly erroneous and must be set aside. To
begin with, it is not true that Mrs. Gayon "has nothing to do
with the land subject of plaintiff's complaint." As the widow of
Silvestre Gayon, she is one of his compulsory heirs 2and has,
accordingly, an interest in the property in question. Moreover,
her own motion to dismiss indicated merely "a necessity of
amending the complaint," to the end that the other
successors in interest of Silvestre Gayon, instead of the
latter, be made parties in this case. In her opposition to the
aforesaid motion for reconsideration of the plaintiff, Mrs.
Gayon alleged, inter alia, that the "heirs cannot represent the
dead defendant, unless there is a declaration of heirship."
Inasmuch, however, as succession takes place, by operation
(4) Among brothers and sisters.

Mrs. Gayon is plaintiff's sister-in-law, whereas her children
are his nephews and/or nieces. Inasmuch as none of them is
included in the enumeration contained in said Art. 217
which should be construed strictly, it being an exception to
the general rule and Silvestre Gayon must necessarily be
excluded as party in the case at bar, it follows that the same
does not come within the purview of Art. 222, and plaintiff's
failure to seek a compromise before filing the complaint does
not bar the same.
WHEREFORE, the order appealed from is hereby set aside
and the case remanded to the lower court for the inclusion,
as defendant or defendants therein, of the administrator or
executor of the estate of Silvestre Gayon, if any, in lieu of the
decedent, or, in the absence of such administrator or
executor, of the heirs of the deceased Silvestre Gayon, and
for further proceedings, not inconsistent with this decision,
with the costs of this instance against defendant-appellee,
Genoveva de Gayon. It is so ordered.

1. Parcel of land on Lot No. 1049, covered by TCT No.
27640 of the Banilad Friar Lands Estate, Cebu City;
2. Parcel of land on Lot No. 1052, covered by TCT No.
27642 of the Banilad Friar Lands Estate, Cebu City;
3. Parcel of land on Lot No. 1051,covered by TCT No. 27641
of the Banilad Friad Lands Estate, Cebu City;
4. Parcel of land on Lot No. 5253 of the Cebu Cadastre,
Cebu City, covered by TCT No. 27639;
5. Parcel of land situated at Mantalongon, Dalaguete, Cebu,
covered by TD No. 010661, with an area of 76-708; (sic)
PALICTE v. RAMOLETE
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-55076
September 21, 1987
MATILDE S. PALICTE, petitioner,

vs.
HON. JOSE O. RAMOLETE as Presiding Judge of Court
of First Instance of Cebu, Branch III, and MARCELO
SOTTO, Administrator, respondents.
GUTIERREZ, JR., J.:

This is a petition for review on certiorari of the order of the
then Court of First Instance of Cebu declaring the deed of
redemption executed for the petitioner null and void and
denying the petitioner's motion that the Registrar of Deeds of
the City of Cebu be directed to transfer the Owner's
Duplicate Certificates of Title to Lot Nos. 1049, 1051, and
1052 from Filemon Sotto to her and to issue a new Owner's
Duplicate Certificate of Title to Lot 2179-C in her name.
On July 5, 1979, a sale at public auction was held pursuant
to a writ of execution issued on February 5, 1979 by the
respondent judge and to a court order dated June 4, 1979 in
the case of Pilar Teves, et al. vs Marcelo Sotto,
Administrator, Civil Case No. R-10027, for the satisfaction of
judgment in the amount of P725,270.00.
The following properties belonging to the late Don Filemon
Sotto and administered by respondent Marcelo Sotto were
levied upon:
6. Parcel of land on Lot No. 4839 of the Upon Cadastre, at

Barrio Sa-ac Mactan Island, with an area of Forty Four
Thousand Six Hundred Forty Four (44,644) square meters
more or less;
7. Residential House of strong materials, situated on a
Government lot at Lahug, Cebu City;
8. Residential House of strong materials, situated at Central,
Cebu City. " (Rollo, p. 40)
Seven of the above-described properties were awarded to
Pilar Teves, who alone bid for them for the amount of
P217,300.00.
The residential house situated on a government lot at Lahug,
Cebu City, was awarded to lone bidder Asuncion Villarante
for the amount of P10,000.00.
Within the period for redemption, petitioner Matilde S.
Palicte, as one of the heirs of the late Don Filemon Sotto,
redeemed from purchaser Pilar Teves, four (4) lots for the
sum of P60,000.00.
A deed of redemption dated July 29, 1980, executed by
Deputy Provincial Sheriff Felipe V. Belandres and approved
by the Clerk of Court, Esperanza Garcia as Ex-Officio
Sheriff, was issued for these lots:
1. A parcel of land or Lot No. 2179-C-PDI-25027 Cebu
Cadastre, Cebu City, bid at P20,000.00;
2. A parcel of land or Lot No. 1052, covered by TCT No.
27642, of the Banilad Friar Lands Estate, Cebu City, bid at
P15,000.00;
3. A parcel of land or Lot No.1051,covered by TCT No.
27641, of the Banilad Friar Lands Estate, Cebu City, at
P5,000.00;
4. A parcel of land or Lot No. 1049, covered by TCT No.
27640, of the Banilad Friar Lands Estate, Cebu City, at
P20,000.00. (Rollo, p. 42)

On July 24, 1980, petitioner Palicte filed a motion with
respondent Judge Ramolete for the transfer to her name of
the titles to the four (4) parcels of land covered by the deed
of redemption.
This motion was opposed by the plaintiffs in Civil Case No.
R-10027, entitled "Pilar Teves, et al. vs Marcelo Sotto,
administrator" on several grounds, principal among which, is
that movant, Palicte, is not one of those authorized to
redeem under the provisions of the Rules of Court.
A hearing on the said motion, with both parties adducing
evidence was held.
The lower court held that although Palicte is one of the
declared heirs in Spl. Proc. No. 2706-R, she does not qualify
as a successor-in-interest who may redeem the real
properties sold. It ruled that the deed of redemption is null
and void. The motion of Palicte was denied.
Hence, the present petition.
The petitioner raises the following assignment of errors:
A
RESPONDENT JUDGE ERRED IN RULING THAT THE
JUDGMENT DEBTOR ENTITLED TO REDEEM UNDER
SECTION 29(a), RULE 39 OF THE REVISED RULES OF
COURT REAL PROPERTY SOLD ON EXECUTION
AGAINST THE ESTATE OF THE DECEDENT IS ONLY THE
ADMINISTRATOR OF THE ESTATE, OR HIS SUCCESSORIN-INTEREST.
B
RESPONDENT JUDGE ERRED IN RULING THAT
PETITIONER, WHO IS A DECLARED HEIR OF THE
DECEDENT, IS NOT THE JUDGMENT DEBTOR NOR
DOES SHE QUALIFY AS A SUCCESSOR-IN-INTEREST OF
THE ADMINISTRATOR OF THE ESTATE ENTITLED TO
RIGHT OF REDEMPTION UNDER SECTION 29(a), RULE
39 OF THE RULES OF COURT.
C
ALTHOUGH PETITIONER IS A DECLARED HEIR OF THE
DECEDENT, HER RIGHT TO THE ESTATE, LIKE THAT OF
REDEMPTION OF CERTAIN ESTATE PROPERTY, COULD
ONLY ARISE AFTER DISTRIBUTION OF THE ESTATE AS
THERE IS STILL JUDGMENT DEBT CHARGEABLE
AGAINST THE ESTATE.
D
PETITIONER'S REDEMPTION OF FOUR (4) PARCELS OF
LAND OF THE ESTATE OF THE DECEDENT SOLD ON
EXECUTION OF JUDGMENT AGAINST THE ESTATE IS

NULL AND VOID AND INEFFECTIVE. (Rollo, pp. 17-18)
These assigned errors center on whether or not petitioner
Palicte may validly exercise the right of redemption under
Sec. 29, Rule 39 of the Rules of Court.
We answer in the affirmative. Sec. 29 of Rule 39 provides:
SEC. 29. Who may redeem real property so sold. Real
property sold as provided in the last preceding section, or
any part thereof sold separately, may be redeemed in the
manner hereinafter provided, by the following persons:
(a) The judgment debtor, or his successor in interest in the
whole or any part of the property;
(b) A creditor having a lien by attachment, judgment or
mortgage on the property sold, or on some part thereof,
subsequent to the judgment under which the property was
sold. Such redeeming creditor is termed a redemptioner.
Under Subsection (a), property sold subject to redemption
may be redeemed by the judgment debtor or his successorin-interest in the whole or any part of the property. Does
Matilde Palicte fall within the term "successor-in-interest"?
Magno vs Viola and Sotto (61 Phil. 80, 84-85) states that:
The rule is that the term "successor-in-interest" includes one
to whom the debtor has transferred his statutory right of
redemption (Big Sespe Oil Co. vs Cochran, 276 Fed., 216,
223); one to whom the debtor has conveyed his interest in
the property for the purpose of redemption (Southern
California Lumber Co. vs. McDowell, 105 Cal, 99; 38 Pac.,
627; Simpson vs. Castle, 52 Cal., 644; Schumacher vs.
Langford, 20 Cal. App., 61; 127 Pac., 1057); one who
succeeds to the interest of the debtor by operation of law (XI
McKinney's California Jurisprudence, 99); one or more joint
debtors who were joint owners of the property sold (Emerson
vs. Yosemite Gold Min. etc. Co., 149 Cal., 50; 85 Pac., 122);
the wife as regards her husband's homestead by reason of
the fact that some portion of her husband' title passes to her
(Hefner vs. Urton, 71 Cal., 479; 12 Pac., 486). This court has
held that a surety can not redeem the property of the
principal sold on execution because the surety, by paying the
debt of the principal, stands in the place of the creditor, not of
the debtor, and consequently is not a successor in interest in
the property. (G. Urruitia & Co. vs. Moreno and Reyes, 28
Phil., 260, 268). (Emphasis supplied).
In the case at bar, petitioner Palicte is the daughter of the
late Don Filemon Sotto whose estate was levied upon on
execution to satisfy the money judgment against it. She is
one of the declared heirs in Special Proceeding No. 2706-R.
As a legitimate heir, she qualifies as a successor-ininterest.
Art. 777 of the Civil Code states that:

The rights to the succession are transmitted from the
moment of the death of the decedent.
At the moment of the decedent's death, the heirs start to own
the property, subject to the decedent's liabilities. In fact, they
may dispose of the same even while the property is under
administration. (Barretto vs. Tuason, 59 Phil. 845; Jakosalem
vs. Rafols, 73 Phil. 628). If the heirs may dispose of their
shares in the decedent's property even while it is under
administration. With more reason should the heirs be
allowed to redeem redeemable properties despite the
presence of an administrator.
The respondents contend that the petitioner must positively
prove that the three other co-heirs, the administrator, and the
intestate court had expressly agreed to the redemption of the
disputed parcels of land. We see no need for such prior
approval. While it may have been desirable, it is not
indispensable under the circumstances of this case. What is
important is that all of them acquiesced in the act of
redeeming property for the estate. The petitioner contends
that the administrator and the three other heirs agreed to the
redemption. There is, however. no clear proof of such
approval. What is beyond dispute from the records is that
they did not disapprove nor reprobate the acts of the
petitioner. There is likewise nothing in the records to indicate
that the redemption was not beneficial to the estate of Don
Filemon Sotto.
It may be true that the interest of a specific heir is not yet
fixed and determinate pending the order of distribution but,
nonetheless, the heir's interest in the preservation of the
estate and the recovery of its properties is greater than
anybody else's, definitely more than the administrator's who
merely holds it for the creditors, the heirs, and the legatees.
The petitioner cites precedents where persons with inchoate
or contingent interest were allowed to exercise the right of
redemption as "successors-in-interest," e.g. Director of
Lands vs. Lagniton (103 Phil. 889, 892) where a son
redeemed the property of his parents sold on execution and
Rosete vs. Provincial Sheriff of Zambales (95 Phil. 560, 564),
where a wife by virtue of what the Court called "inchoate
right of dower or contingent interest" redeemed a homestead
as successor-in-interest of her husband.
In fact, the Court was explicit in Lagniton that:
... The right of a son, with respect to the property of a father
or mother, is also an inchoate or contingent interest, because
upon the death of the father or the mother or both, he will
have a right to inherit said conjugal property. If any holder of
an inchoate interest is a successor in interest with right to
redeem a property sold on execution, then the son is such a
successor in interest, as he has an inchoate right to the
property of his father.
The lower court, therefore, erred in considering the person of
the administrator as the judgment debtor and as the only
"successor-in-interest." The estate of the deceased is the
judgment debtor and the heirs who will eventually acquire

that estate should not be prohibited from doing their share in
its preservation.
Although petitioner Palicte validly redeemed the properties,
her motion to transfer the titles of the four (4) parcels of land
covered by the Deed of Redemption from registration in the
name of Filemon Sotto to her name cannot prosper at this
time.
Otherwise, to allow such transfer of title would amount to a
distribution of the estate.
As held in the case of Philippine Commercial and Industrial
Bank vs. Escolin (56 SCRA 267, 345- 346):
Indeed, the law on the matter is specific, categorical and
unequivocal. Section 1 of Rule 90 provides:
SECTION 1. When order for distribution of residue made.
When the debts, funeral charges, and expenses of
administration, the allowance to the widow, and inheritance
tax, if any, chargeable to the estate in accordance with law,
have been paid, the court, on the application of the executor
or administrator, or of a person interested in the estate, and
after hearing upon notice, shall assign the residue of the
estate to the persons entitled to the same, naming them and
the proportions, or parts, to which each is entitled, and such
persons may demand and recover their respective shares
from the executor or administrator, or any other person
having the same in his possession. If there is a controversy
before the court as to who are the lawful heirs of the
deceased person or as to the distributive shares to which
each person is entitled under the law, the controversy shall
be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the
obligations above mentioned has been made or provided for,
unless the distributees, or any of them, give a bond, in a sum
to be fixed by the court, conditioned for the payment of said
obligations within such time as the court directs.
These provisions cannot mean anything less than that in
order that a proceeding for the settlement of the estate of a
deceased may be deemed ready for final closure, (1) there
should have been issued already an order of distribution or
assignment of the estate of the decedent among or to those
entitled thereto by will or by law, but (2) such order shall not
be issued until after it is shown that the "debts, funeral
expenses, expenses of administration, allowances, taxes,
etc., chargeable to the estate" have been paid, which is but
logical and proper, (3) besides, such an order is usually
issued upon proper and specific application for the purpose
of the interested party or parties, and not of the court."
The other heirs are, therefore, given a six months period to
join as co-redemptioners in the redemption made by the
petitioner before the motion to transfer titles to the latter's
name may be granted.

WHEREFORE, the petition is hereby GRANTED. The
respondent court's orders declaring the deed of redemption
null and void and denying the motion to transfer title over the
redeemed properties to Matilda Palicte are REVERSED and
SET ASIDE, subject to the right of the other heirs to join in
the redemption as stated above.
First, the facts as the Court sees them in light of the

evidence on record:
The late Getulio Locsin had three children named Mariano,
Julian and Magdalena, all surnamed Locsin. He owned
extensive residential and agricultural properties in the
provinces of Albay and Sorsogon. After his death, his estate
was divided among his three (3) children as follows:
SO ORDERED.
LOCSIN v. CA
G.R. No. 89783
the evidence, having been carefully considered, the Court

now decides the case.
(a) the coconut lands of some 700 hectares in Bual, Pilar,

Sorsogon, were adjudicated to his daughter, Magdalena
Locsin;

SUPREME COURT
Manila
(b) 106 hectares of coconut lands were given to Julian

Locsin, father of the petitioners Julian, Mariano, Jose,
Salvador, Matilde, and Aurea, all surnamed Locsin;
FIRST DIVISION
(c) more than forty (40) hectares of coconut lands in

Bogtong, eighteen (18) hectares of riceland in Daraga, and
the residential lots in Daraga, Albay and in Legazpi City went
to his son Mariano, which Mariano brought into his marriage
to Catalina Jaucian in 1908. Catalina, for her part, brought
into the marriage untitled properties which she had inherited
from her parents, Balbino Jaucian and Simona Anson. These
were augmented by other properties acquired by the
spouses in the course of their union, 1 which however was
not blessed with children.
February 19, 1992
MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B.

LOCSIN, AUREA B. LOCSIN, MATILDE L. CORDERO,
SALVADOR B. LOCSIN and MANUEL V. DEL ROSARIO,
petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN,
FLORENTINO JAUCIAN, MERCEDES JAUCIAN
ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF
EDUARDO JAUCIAN and HEIRS OF VICENTE JAUCIAN,
respondents.
Aytona Law Office and Siquia Law Offices for petitioners.
Mabella, Sangil & Associates for private respondents.
NARVASA, C.J.:
Reversal of the decision of the Court of Appeals in CA-G.R.
No. CV-11186 affirming with modification the judgment of
the Regional Trial Court of Albay in favor of the plaintiffs in
Civil Case No. 7152 entitled "Jose Jaucian, et al. v. Mariano
B. Locsin, et al.," an action for recovery of real property with
damages is sought. in these proceedings initiated by
petition for review on certiorari in accordance with Rule 45 of
the Rules of Court.
The petition was initially denied due course and dismissed
by this Court. It was however reinstated upon a second
motion for reconsideration filed by the petitioners, and the
respondents were required to comment thereon. The petition
was thereafter given due course and the parties were
directed to submit their memorandums. These, together with
Eventually, the properties of Mariano and Catalina were

brought under the Torrens System. Those that Mariano
inherited from his father, Getulio Locsin, were surveyed
cadastrally and registered in the name of "Mariano Locsin,
married to Catalina Jaucian.'' 2
Mariano Locsin executed a Last Will and Testament
instituting his wife, Catalina, as the sole and universal heir of
all his properties. 3 The will was drawn up by his wife's
nephew and trusted legal adviser, Attorney Salvador
Lorayes. Attorney Lorayes disclosed that the spouses being
childless, they had agreed that their properties, after both of
them shall have died should revert to their respective sides
of the family, i.e., Mariano's properties would go to his
"Locsin relatives" (i.e., brothers and sisters or nephews and
nieces), and those of Catalina to her "Jaucian relatives." 4
Don Mariano Locsin died of cancer on September 14, 1948
after a lingering illness. In due time, his will was probated in
Special Proceedings No. 138, CFI of Albay without any
opposition from both sides of the family. As directed in his
will, Doa Catalina was appointed executrix of his estate.
Her lawyer in the probate proceeding was Attorney Lorayes.
In the inventory of her husband's estate 5 which she
submitted to the probate court for approval, 6 Catalina
declared that "all items mentioned from Nos. 1 to 33 are the
private properties of the deceased and form part of his
capital at the time of the marriage with the surviving spouse,
while items Nos. 34 to 42 are conjugal." 7

Among her own and Don Mariano's relatives, Doa Catalina
was closest to her nephew, Attorney Salvador Lorayes, her
nieces, Elena Jaucian, Maria Lorayes-Cornelio and Maria
Olbes-Velasco, and the husbands of the last two: Hostilio
Cornelio and Fernando Velasco. 8 Her trust in Hostilio
Cornelio was such that she made him custodian of all the
titles of her properties; and before she disposed of any of
them, she unfailingly consulted her lawyer-nephew, Attorney
Salvador Lorayes. It was Atty. Lorayes who prepared the
legal documents and, more often than not, the witnesses to
the transactions were her niece Elena Jaucian, Maria
Lorayes-Cornelio, Maria Olbes-Velasco, or their husbands.
Her niece, Elena Jaucian, was her life-long companion in her
house.
Don Mariano relied on Doa Catalina to carry out the terms
of their compact, hence, nine (9) years after his death, as if
in obedience to his voice from the grave, and fully cognizant
that she was also advancing in years, Doa Catalina began
transferring, by sale, donation or assignment, Don Mariano's
as well as her own, properties to their respective nephews
and nieces. She made the following sales and donation of
properties which she had received from her husband's
estate, to his Locsin nephews and nieces:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE
WITNESSES
23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481
favor of Mariano Locsin
1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P
20,000
Jose R. Locsin
1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000
Hostilio Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian
1 Nov. 29, 1974 Deed of Donation in 26,509
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
2 Feb. 4, 1975 Deed of Donation in 34,045
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
3 Sept. 9, 1975 Deed of Donation in (Lot 2059)
favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin
4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio
Cornelio
favor of Aurea B. Locsin Fernando Velasco
5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750

Hostilio Cornelio
favor of Aurea B. Locsin Elena Jaucian
6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 ditto favor of Aurea B. Locsin
7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 ditto favor of Aurea B. Locsin
15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto
Aurea Locsin
16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000
Delfina Anson
Aurea Locsin M. Acabado
17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000
Leonor Satuito
Aurea Locsin Mariano B. Locsin
19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 ditto favor of Mariano Locsin
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P
1,000 Delfina Anson
in favor of Manuel V. del (Lot 2155) Antonio Illegible
Rosario whose maternal
grandfather was Getulio
Locsin
2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P
500 Antonio Illegible
in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals
from bigger portion of
Lot 2155 leased to Filoil
Refinery were assigned to
Maria Jaucian Lorayes
Cornelio
Of her own properties, Doa Catalina conveyed the following
to her own nephews and nieces and others:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE
2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000
Vicente Jaucian (lot 2020)
(6,825 sqm. when
resurveyed)
24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000
in favor of Francisco M.
Maquiniana

26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300
favor of Francisco
Maquiniana
Jaucian Vda. de Locsin, being the nearest collateral heirs by

right of representation of Juan and Gregorio, both surnamed
Jaucian, and full-blood brothers of Catalina;
27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000

favor of Ireneo Mamia
(2) declaring the deeds of sale, donations, reconveyance

and exchange and all other instruments conveying any part
of the estate of Catalina J. Vda. de Locsin including, but not
limited to those in the inventory of known properties (Annex
B of the complaint) as null and void ab-initio;
28 May 3, 1973 Deed of Absolute Sale in 75 P 750

favor of Zenaida Buiza
29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500
favor of Felisa Morjella
30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000
favor of Inocentes Motocinos
31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500
favor of Casimiro Mondevil
32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200
favor of Juan Saballa
25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500
of Rogelio Marticio
Doa Catalina died on July 6, 1977.
Four years before her death, she had made a will on October
22, 1973 affirming and ratifying the transfers she had made
during her lifetime in favor of her husband's, and her own,
relatives. After the reading of her will, all the relatives agreed
that there was no need to submit it to the court for probate
because the properties devised to them under the will had
already been conveyed to them by the deceased when she
was still alive, except some legacies which the executor of
her will or estate, Attorney Salvador Lorayes, proceeded to
distribute.
In 1989, or six (6) years after Doa Catalina's demise, some
of her Jaucian nephews and nieces who had already
received their legacies and hereditary shares from her
estate, filed action in the Regional Trial Court of Legaspi City
(Branch VIII, Civil Case No. 7152) to recover the properties
which she had conveyed to the Locsins during her lifetime,
alleging that the conveyances were inofficious, without
consideration, and intended solely to circumvent the laws on
succession. Those who were closest to Doa Catalina did
not join the action.
After the trial, judgment was rendered on July 8, l985 in favor
of the plaintiffs (Jaucian), and against the Locsin defendants,
the dispositive part of which reads:
WHEREFORE, this Court renders judgment for the plaintiffs
and against the defendants:
(1) declaring the, plaintiffs, except the heirs of Josefina J.
Borja and Eduardo Jaucian, who withdrew, the rightful heirs
and entitled to the entire estate, in equal portions, of Catalina
(3) ordering the Register of Deeds of Albay and/or Legazpi

City to cancel all certificates of title and other transfers of the
real properties, subject of this case, in the name of
defendants, and derivatives therefrom, and issue new ones
to the plaintiffs;
(4) ordering the defendants, jointly and severally, to reconvey
ownership and possession of all such properties to the
plaintiffs, together with all muniments of title properly
endorsed and delivered, and all the fruits and incomes
received by the defendants from the estate of Catalina, with
legal interest from the filing of this action; and where
reconveyance and delivery cannot be effected for reasons
that might have intervened and prevent the same,
defendants shall pay for the value of such properties, fruits
and incomes received by them, also with legal interest from
the filing, of this case
(5) ordering each of the defendants to pay the plaintiffs the
amount of P30,000.00 as exemplary damages; and the
further sum of P20,000.00 each as moral damages; and
(6) ordering the defendants to pay the plaintiffs attorney's
fees and litigation expenses, in the amount of P30,000.00
without prejudice to any contract between plaintiffs and
counsel.
Costs against the defendants. 9
The Locsins appealed to the Court of Appeals (CA-G.R. No.
CV-11186) which rendered its now appealed judgment on
March 14, 1989, affirming the trial court's decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring
the private respondents, nephews and nieces of Doa
Catalina J. Vda. de Locsin, entitled to inherit the properties
which she had already disposed of more than ten (10) years
before her death. For those properties did not form part of
her hereditary estate, i.e., "the property and transmissible
rights and obligations existing at the time of (the decedent's)
death and those which have accrued thereto since the
opening of the succession." 10 The rights to a person's
succession are transmitted from the moment of his death,
and do not vest in his heirs until such time. 11 Property which
Doa Catalina had transferred or conveyed to other persons
during her lifetime no longer formed part of her estate at the
time of her death to which her heirs may lay claim. Had she
died intestate, only the property that remained in her estate

at the time of her death devolved to her legal heirs; and even
if those transfers were, one and all, treated as donations, the
right arising under certain circumstances to impugn and
compel the reduction or revocation of a decedent's gifts inter
vivos does not inure to the respondents since neither they
nor the donees are compulsory (or forced) heirs. 12
There is thus no basis for assuming an intention on the part
of Doa Catalina, in transferring the properties she had
received from her late husband to his nephews and nieces,
an intent to circumvent the law in violation of the private
respondents' rights to her succession. Said respondents are
not her compulsory heirs, and it is not pretended that she
had any such, hence there were no legitimes that could
conceivably be impaired by any transfer of her property
during her lifetime. All that the respondents had was an
expectancy that in nowise restricted her freedom to dispose
of even her entire estate subject only to the limitation set
forth in Art. 750, Civil Code which, even if it were breached,
the respondents may not invoke:
Art. 750. The donation may comprehend all the present
property of the donor or part thereof, provided he reserves,
in full ownership or in usufruct, sufficient means for the
support of himself, and of all relatives who, at the time of the
acceptance of the donation, are by law entitled to be
supported by the donor. Without such reservation, the
donation shall be reduced on petition of any person affected.
(634a)
The lower court capitalized on the fact that Doa Catalina
was already 90 years old when she died on July 6, 1977. It
insinuated that because of her advanced years she may
have been imposed upon, or unduly influenced and morally
pressured by her husband's nephews and nieces (the
petitioners) to transfer to them the properties which she had
inherited from Don Mariano's estate. The records do not
support that conjecture.
For as early as 1957, or twenty-eight (28) years before her
death, Doa Catalina had already begun transferring to her
Locsin nephews and nieces the properties which she
received from Don Mariano. She sold a 962-sq.m. lot on
January 26, 1957 to his nephew and namesake Mariano
Locsin II. 13 On April 7, 1966, or 19 years before she passed
away, she also sold a 43 hectare land to another Locsin
nephew, Jose R. Locsin. 14 The next year, or on March 22,
1967, she sold a 5,000-sq.m. portion of Lot 2020 to Julian
Locsin. 15
On March 27, 1967, Lot 2020 16 was partitioned by and
among Doa Catalina, Julian Locsin, Vicente Jaucian and
Agapito Lorete. 17 At least Vicente Jaucian, among the other
respondents in this case, is estopped from assailing the
genuineness and due execution of the sale of portions of Lot
2020 to himself, Julian Locsin, and Agapito Lorete, and the
partition agreement that he (Vicente) concluded with the
other co-owners of Lot 2020.
Among Doa, Catalina's last transactions before she died in

1977 were the sales of property which she made in favor of
Aurea Locsin and Mariano Locsin in 1975. 18
There is not the slightest suggestion in the record that Doa
Catalina was mentally incompetent when she made those
dispositions. Indeed, how can any such suggestion be made
in light of the fact that even as she was transferring
properties to the Locsins, she was also contemporaneously
disposing of her other properties in favor of the Jaucians?
She sold to her nephew, Vicente Jaucian, on July 16, 1964
(21 years before her death) one-half (or 5,000 sq.m.) of Lot
2020. Three years later, or on March 22, 1967, she sold
another 5000 sq.m. of the same lot to Julian Locsin. 19
From 1972 to 1973 she made several other transfers of her
properties to her relatives and other persons, namely:
Francisco Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza
Morjella, Inocentes Motocinos, Casimiro Mondevil, Juan
Saballa and Rogelio Marticio. 20 None of those transactions
was impugned by the private respondents.
In 1975, or two years before her death, Doa Catalina sold
some lots not only to Don Mariano's niece, Aurea Locsin,
and
his
nephew,
Mariano
Locsin
II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If
she was competent to make that conveyance to Mercedes,
how can there be any doubt that she was equally competent
to transfer her other pieces of property to Aurea and Mariano
II?
The trial court's belief that Don Mariano Locsin bequeathed
his entire estate to his wife, from a "consciousness of its real
origin" which carries the implication that said estate
consisted of properties which his wife had inherited from her
parents, flies in the teeth of Doa Catalina's admission in her
inventory of that estate, that "items 1 to 33 are the private
properties of the deceased (Don Mariano) and forms (sic)
part of his capital at the time of the marriage with the
surviving spouse, while items 34 to 42 are conjugal
properties, acquired during the marriage." She would have
known better than anyone else whether the listing included
any of her paraphernal property so it is safe to assume that
none was in fact included. The inventory was signed by her
under oath, and was approved by the probate court in
Special Proceeding No. 138 of the Court of First Instance of
Albay. It was prepared with the assistance of her own
nephew and counsel, Atty. Salvador Lorayes, who surely
would not have prepared a false inventory that would have
been prejudicial to his aunt's interest and to his own, since
he stood to inherit from her eventually.
This Court finds no reason to disbelieve Attorney Lorayes'
testimony that before Don Mariano died, he and his wife
(Doa Catalina), being childless, had agreed that their
respective properties should eventually revert to their
respective lineal relatives. As the trusted legal adviser of the
spouses and a full-blood nephew of Doa Catalina, he would
not have spun a tale out of thin air that would also prejudice
his own interest.

Little significance, it seems, has been attached to the fact
that among Doa Catalina's nephews and nieces, those
closest to her: (a) her lawyer-nephew Attorney Salvador
Lorayes; (b) her niece and companion Elena Jaucian: (c) her
nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and
their respective husbands, Fernando Velasco and Hostilio
Cornelio, did not join the suit to annul and undo the
dispositions of property which she made in favor of the
Locsins, although it would have been to their advantage to
do so. Their desistance persuasively demonstrates that
Doa Catalina acted as a completely free agent when she
made the conveyances in favor of the petitioners. In fact,
considering their closeness to Doa Catalina it would have
been well-nigh impossible for the petitioners to employ
"fraud, undue pressure, and subtle manipulations" on her to
make her sell or donate her properties to them. Doa
Catalina's niece, Elena Jaucian, daughter of her brother,
Eduardo Jaucian, lived with her in her house. Her nephewin-law, Hostilio Cornelio, was the custodian of the titles of her
properties. The sales and donations which she signed in
favor of the petitioners were prepared by her trusted legal
adviser and nephew, Attorney Salvador Lorayes. The (1)
deed
of
donation
dated
November
19,
1974 23 in favor of Aurea Locsin, (2) another deed of donation
dated February 4, 1975 24 in favor of Matilde Cordero, and
(3) still another deed dated September 9, 1975 25 in favor of
Salvador Lorayes, were all witnessed by Hostilio Cornelio
(who is married to Doa Catalina's niece, Maria Lorayes)
and Fernando Velasco who is married to another niece,
Maria Olbes. 26 The sales which she made in favor of Aurea
Locsin on July 15, 1974 27 were witnessed by Hostilio
Cornelio and Elena Jaucian. Given those circumstances,
said transactions could not have been anything but free and
voluntary acts on her part.
Apart from the foregoing considerations, the trial court and
the Court of Appeals erred in not dismissing this action for
annulment and reconveyance on the ground of prescription.
Commenced decades after the transactions had been
consummated, and six (6) years after Doa Catalina's death,
it prescribed four (4) years after the subject transactions
were recorded in the Registry of Property, 28 whether
considered an action based on fraud, or one to redress an
injury to the rights of the plaintiffs. The private respondents
may not feign ignorance of said transactions because the
registration of the deeds was constructive notice thereof to
them and the whole world. 29
WHEREFORE, the petition for review is granted. The
decision dated March 14, 1989 of the Court of Appeals in
CA-G.R. CV No. 11186 is REVERSED and SET ASIDE. The
private respondents' complaint for annulment of contracts
and reconveyance of properties in Civil Case No. 7152 of the
Regional Trial Court, Branch VIII of Legazpi City, is
DISMISSED, with costs against the private respondents,
plaintiffs therein.
SO ORDERED.
LLENARES v. CA
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 98709
May 13, 1993
MAGDALENA LLENARES, petitioner,

vs.
HON. COURT OF APPEALS and APOLINAR ZABELLA,
respondents.
DAVIDE, JR., J.:

Petitioner availed of this recourse under Rule 45 of the
Revised Rules of Court to obtain a reversal of the Decision
of the Seventh Division of Court of Appeals in CA-G.R. CV
No. 09853, promulgated on 24 April 1990, 1 and the
reinstatement of the 4 April 1986 Decision of Branch 57 of
the Regional Trial Court (RTC), Lucena City, in a case 2
involving the recovery of the possession and quieting of title
over a parcel of land. The dispositive portion of the trial
court's decision reads as follows:
WHEREFORE, judgment is hereby rendered for the plaintiff
who is declared the true and absolute owner of the land
covered by TCT No. 28170 (Registry of Deeds, Lucena City)
particularly described in par. 2 of plaintiff's complaint and it is
hereby ordered
1. That the defendant or any person acting in his behalf
surrender and transfer possession of the land in question
(covered by TCT No. 28170 to the plaintiff;
2. That the defendant render an accounting of the fruits he
received from the aforementioned property from August 1976
until possession is transferred to the plaintiff, said accounting
to be approved by the court;

3. That in keeping with the findings of this court, the Register
of Deeds, Lucena City, should, as he is hereby ordered
cancel Entry No. 35285 in TCT No. 28170, said entry being
an annotation of the adverse claim of defendant Apolinar
Zabella inscribed on Feb. 17, 1977;
4. That the defendant pay to plaintiff the amount of
P2,500.00 as attorney's fees and P1,000.00 as expenses of
litigation. 3
Petitioner filed the aforementioned complaint on 12 July
1977 after she had been allegedly dispossessed of the
property in question by private respondent Apolinar Zabella
in 1976, and after the latter had caused to be annotated in
Transfer Certificate of Title (TCT) No. 28170 an affidavit of
adverse claim on 17 February 1977. She prayed therein that,
inter alia, she be restored to the possession of the said
property and that the adverse claim be cancelled. 4
As disclosed by the pleadings and the challenged decision,
the antecedent facts are as follows:
Juan Zabella and Anastacio Llenares were co-owners, in
equal shares, of a parcel of land situated in barrio Silangang
Mayao of the then Municipality, now City, of Lucena. In the
cadastral survey of the said municipality, the lot was
designated as Cadastral Lot No. 4804-D. This designation
was later changed to Lot. No. 5015.
On 21 December 1929, Anastacio Llenares sold his one-half
(1/2) share in the lot to Ariston Zabella, private respondent's
father. Subsequently, after due proceedings, the cadastral
court awarded Lot. No. 5015 to Juan Zabella and Anastacio
Llenares in equal shares. Decree No. 54398 was issued to
both of them and on the basis thereof, Original Certificate of
Title (OCT) No. 43073 was issued in their names on July
1937.
Anastacio Llenares passed away on 27 March 1931 leaving
the petitioner, his only child, as his sole heir. On the other
hand, Juan Zabella and niece Irene Catapat. On 5 February
1960, Rosario and Irene adjudicated to themselves Juan
Zabella's one-half (1/2) share in the lot. This adjudication
was annotated in OCT No. 43073. Rosario died on 5 June
1962 leaving, as her only heirs, her children Godofredo,
Noemi, Natividad, Olimpio and Numeriana, all surnamed
Zaracena.
On 22 June 1976, petitioner, as the sole heir of Anastacio
Llenares, adjudicated to herself, by way of a Salaysay ng
Pagmamana ng Nag-iisang Tagapagmana (Exhibit "A"), the
one-half (1/2) share in the property belonging to Anastacio
Llenares. This fact was likewise annotated in OCT No.
43073.
On 26 August 1976, however, OCT No. 43073 was cancelled
and in its place, TCT No. T-27166 was issued for the entire
lot. On 16 February 1977, private respondent Zabella filed an
adverse claim which was duly annotated in TCT No. T27166.
As a consequence of a Kasunduan ng Pagsusukat (Exhibit

"I") executed by and between Irene Catapat and the heirs of
Rosario Zabella Zaracena, Lot No. 5015 was subsidivided
into Lot. Nos. 5015-A, 5015-B and 5015-C. Lot No. 5015-A,
which comprises one-half (1/2) of Lot No. 5015
corresponding to Anastacio's share, was allotted to the
petitioner. TCT No. T-27166 was thereafter cancelled and
separate Transfer Certificate of Title were issued for each of
the subdivided lots. TCT No. 28170 was issued in the
petitioner's name for Lot No. 5015-A.
As regards the issue of possession, the petitioner's evidence
discloses that since she was only four (4) years old when her
father died, her cousin Rosario Zabella administered the land
in question until 1959 when she (petitioner) placed Rufo Orig
as tenant therein. The latter worked as such, delivering to the
petitioner her share of the harvest until 1976, when he
stopped doing so as he was ordered by the private
respondent not to give the petitioner her share anymore.
Private respondent allegedly claimed ownership over the
property. Petitioner further proved that she had been paying
the land taxes on the property until the filing of the case.
On the other hand, according to his own version, private
respondent and his siblings took possession of that portion
of the land sold by Anastacio Llenares after Ariston Zabella's
death on 21 March 1930. He then converted the same into
riceland. It was irrigated in 1955 and he has been paying the
irrigation charges since 1960. Moreover, he and his co-heirs
have been in possession of the property without interference
by any party until "the present." 5
The trial court limited the issues to the following: whether the
private respondent had acquired absolute ownership of the
land in question by prescription and whether the plaintiff's
(petitioner) action is barred by laches. 6 In finding for the
petitioner, the lower court made the following disquisitions:
It is beyond cavil that the land in question (then part of a big
parcel) has been registered and titled in the name of
plaintiff's father Anastacio Llenares since July 28, 1937 even
as it is now registered in the name of plaintiff who made an
affidavit of self-adjudification on June 22, 1976 being the only
child of Anastacio Llenares. Anastacio Llenares became the
registered owner by virtue of a cadastral proceedings, a
proceedings in rem that is binding and conclusive against the
whole world. No evidence of irregularity or fraud in the
issuance of the title has been adduced, and even if there is
intrinsic fraud, the period of one year within which to ventilate
this infirmity has long expired. It is a postulate in law that "no
title to registered land in derogation to that of the registered
owner shall be acquired by prescription or adverse
possession. Prescription is unavailing not only against the
registered owner but also against his hereditary successors
because the latter merely step into the shoes of the
decedent by operation of law and are merely the
continuation of the personality of their predecessor in
interest." (Barcelona vs. Barcelona, 100 Phil. 251). On this
score alone, defendant's claim of prescription should fail.
The court also notes, in passing, that defendant's evidence

does not convincingly establish that he possessed the
property publicly, exclusively and peacefully in the concept of
owner. For one thing, he has not even paid any realty tax on
the property as the property is not declared for taxation
purposes in his name. The court is neither impressed with
the credibility of defendant's witnesses. For example, the
witness Sergio Dalida testified that in 1918 the land in
litigation was in the possession of Ariston Zabella (T.S.N. 821-84 p. 8). There seems to be no truth to this because the
property was bought by Ariston Zabella only in the year
1929. And then, there was that other witness Cosme Ranillo
who unequivocally admitted during cross-examination that
he was coached by the defendant (vide: t.s.n. 11-20-84 p.
24-26).
As regards the Deed of Sale of the property in litigation in
favor of Ariston Zabella (Exh. "1") which is apparently the
cornerstone of defendant's claim over the property the court
concurs with the submission of the plaintiff that after final
judgment has been rendered in the cadastral proceedings,
all rights or claims prior thereto are deemed barred by the
principle of res judicata. Hence after the finality of the
judgment in the cadastral case, the Deed of Sale has lost its
efficacy being functus oficio.
prescription would not lie, neither would laches be available

(De La Cruz vs. De La Cruz, CA-G.R. No. 4700-R, Aug. 14,
1950; Adove vs, Lopez, CA-G.R. No. 18060-R, Aug. 30,
1957. 7
From this adverse decision, the private respondent appealed
to the respondent Court of Appeals, which docketed the case
as CA-G.R. CV No. 09853. He asked the respondent Court
to reverse the RTC because the latter erred: (a) in not
considering the unsullied testimonial and documentary
evidence for the appellant; (b) in appreciating the plaintiffappellee's flimsy and insufficient testimonial evidence; (c) in
not declaring that prescription and laches were raised by the
defendant; (d) in declaring that the failure to present to the
cadastral court the deed of absolute sale bars the appellant
(private respondent) from proving his ownership over the
land in suit; and (e) in rendering judgment in favor of the
petitioner. 8
In its Decision, the respondent Court upheld the private
respondent's position and decreed as follows:
WHEREFORE, the appealed decision is reversed and
another one entered
With respect to the defense of laches so emphatically and

exhaustively discussed by defendant's counsel in his brief
we find this to be devoid of merit because of the following
cogent reasons, viz:
(1) declaring defendant-appellant the true and lawful owner

of the 12,501 square meters of land described in and
covered by Transfer Certificate of Title No. T-28170 of the
Registry of Deeds of Lucena City;
Firstly, the defense of laches was never interposed or

pleaded in the answer filed by the defendant. Not even in our
most gratuitous moment can we see a nuance of this
defense being asserted in the answer: It is a rule of
procedure that defenses and objections not pleaded either in
a motion to dismiss or in the answer are deemed waived.
(Sec. 2 Rule 9 of the Rules of Court).
(2) ordering the plaintiff-appellee to execute to the

defendant-appellant the proper deed of conveyance
transferring full ownership of Transfer Certificate of Title No.
T-28170 to the said defendant-appellant;
Secondly, the evidence shows that plaintiff has not been

sleeping on her rights. According to her she was
dispossessed of the land in 1976. It is admitted by the
defendant that in 1977, plaintiff lodged a complaint against
the defendant regarding the land in question with the
Presidential Action Committee On Land Problems (PACLAP)
as (sic) Camp Wilhelm, Lucena City. And then the instant
action was filed in court on July 12, 1977.
On the contrary it is the defendant and/or his predeccessor
in interest who have been sleeping on their rights if any.
They did not assert their right of ownership over the land in
question arising from the Deed of Sale during the cadastral
proceedings in the year 1937 or thereabout (sic). Except for
filing an adverse claim on February 17, 1977, defendant has
not taken any step to have the title of the property and its tax
declaration transferred to his name.
Thirdly, as adverted to, a title once registered cannot be
defeated even by adverse, open and notorious possession.
In the same vein, laches, too, may not be considered a valid
defense for claiming ownership of registered land. Where
(3) ordering the Register of Deeds of Lucena City to cancel

said Transfer Certificate of Title No. T-28170 and to issue
thereafter a new one in the name of defendant-appellant, in
the event the plaintiff-appellee shall fail or refuse to execute
the conveyance;
(4) ordering the plaintiff-appellee to pay attorney's fees of
P10,000.00.
Costs against the plaintiff-appellee. 9
In resolving the appeal against the petitioner, the respondent
Court stressed the fact that although OCT No. 43073 was
issued in 1937, it was only on 26 August 1976 that the
petitioner initially moved "to change the registered
ownership" of the property with the issuance of TCT No.
27166. At that time, petitioner was already forty-nine (49)
years old. In short, the respondent Court observed that she
allowed twenty-eight (28) years to pass from the time she
attained the age of majority before taking any affirmative
action to protect her rights over the property. It thus
concluded that "suspicion then is not altogether unjustified
that the inaction was because the appellee knew of the sale
by her father Juan Zabella (sic)," and that such knowledge is
notice "that appellee had no right over half of the land. " 10

Anent the petitioner's contention that the private respondent
is not only guilty of laches but that prescription had already
set in against him, the respondent Court ruled that the
former's evidence speaks otherwise because after TCT No.
T-27166 was issued on 26 August 1976, the private
respondent promptly filed his adverse claim, thereby making
of record his interest in the land. Thus, neither prescription
nor laches applies against him. 11
Public respondent also overturned the trail court's finding
that the petitioner was in possession of the property until she
was dispossessed in 1976 by the private respondent
principally because it was in the third quarter of 1977 that
she (petitioner) declared the questioned property in her
name, and had paid land taxes thereon only for the same
third quarter of 1977. The other tax payments were not in her
name, but in the names of Godofredo Zaracena and Juan
Zabella. The respondent Court opined that "[N]ormally, one
who claims possession in ownership will declare the property
in his name and will pay taxes on it," 12 and concluded that
the petitioner's claimed possession "is not possession in law
that deserves protection and recognition." 13 On the other
hand, it gave credit to the private respondent's version
chiefly because he has been paying irrigation charges since
1960.
Aggrieved thereby, the petitioner took this recourse, and
raises the following issues:
1. Whether or not the alleged sale of a property by virtue of
an instrument which was not filed or registered under Act
3344 and was not submitted before the Cadastral Court
during the hearing thereof may deprived (sic) an adjudicateddeclared owner the (sic) enjoyment of possession and the
improvements thereof.
2. Whether or not a party in (sic) whose title was vested by
virtue of a rendition of judgment and issuance of the decree
of registration in a judicial proceeding in rem which as such,
binds the whole world and who ever claim (sic) thereafter on
the said land are (sic) deemed barred under the principle of
res judicata.
3. Whether (sic) or not property covered by Torence (sic)
Title can be acquired by prescription or adverse possession.
14
After the private respondent filed his Comment, We gave due

course to the petition and directed both parties to submit
their respective Memoranda, which they complied with.
The petition is impressed with merit.
1. In the first place, the public respondent's factual findings
on the issuance of possession on the basis of which it
rejected the findings of fact and conclusions of the trial court
are conjectural and speculative. Hence, We cannot be
bound by such findings under the rule that findings of fact of
the Court of Appeals are conclusive on this Court. 15 The trial
court gave credence to the petitioner's account that she had
legally possessed the property in question until 1976,

categorically ruling that the private respondent's "evidence
does not convincingly establish that he possessed the
property publicly, exclusively and peacefully in the concept of
owner." 16 The reasons for this pronouncement have already
been given. Clearly, these matters are inexorably anchored
on the witnesses' credibility. It is a settled judicial precept
that the issue of the credibility of witnesses is primarily
addressed to the trial court since it is in a better position to
decide such a question, having seen and heard the
witnesses and having observed their deportment and
manner of testifying during the trial. 17
Moreover, its findings on such credibility carry great weight
and respect, and will be sustained by the appellate court
unless certain facts of substance and value have been
overlooked which, if considered, might affect the result of the
case. 18 That the petitioner neither declared the property in
her name nor paid the taxes thereon until 1977 is not,
contrary to the public respondent's conclusion, fatal to her
cause. Until 27 June 1976, the property remained covered
by OCT No. 43073 in the names of Juan Zabella and
Anastacio Llenares. The private respondent's alleged claim
was not annotated thereon. There is, as well, no evidence to
show that the private respondent had earlier made any
extrajudicial or judicial demands to enforce his claim on the
property based on the so-called deed of sale which
Anastacio had executed on 21 December 1929 in favor of
Ariston Zabella, the private respondent's predecessor-ininterest. Since the petitioner is Anastacio Llenares's sole
heir, the continued existence of OCT No. 43073 fully
protected her rights; and her failure to declare for taxation
purposes the one-half (1/2) portion of the land pertaining to
Anastacio did not, therefore, prejudice her because the
payments of the real estate taxes by other such as
Godofredo Zaracena and Juan Zabella, as found by the
public respondent per Exhibits "C", "C-1" and "C-2" 19 for
and in behalf of the registered owners benefited the
registered owners themselves and their successors-ininterest. On the other, the private respondent neither had the
property declared in his name for taxation purposes nor paid
the real estate taxes thereon. All that he paid, and this was
only beginning in 1960, were the irrigation charges. And yet,
the respondent Court resolved the issue in his favor. This
palpable inconsistency on the part of the Court of Appeals
defies all logic.
Furthermore, the respondent Court's conclusion that the
petitioner made no move to have the property declared in
her name or pay the real estate taxes thereon before 1976
because she knew all along about the 1929 sale executed by
her father to Ariston Zabella, is plain speculation and, as
characterized by the public respondent, a mere "suspicion,"
thus:
. . . The suspicion then is not altogether unjustified that the
inaction was because the appellee knew of the sale by her
father to Juan (sic) Zabella. . . . 20

Such a suspicion has no basis at all. The parties do not
dispute the fact that at the time of Anastacio Llenares' death
on 27 March 1931, the petitioner was only four (4) years old.
The deed of sale was executed by Anastacio Llenares on 21
December 1929, when the petitioner was only two (2) years
old. Being at that time very much below the age of reason,
the petitioner could not have been expected to be aware of
the existence of the said deed of sale, much less understand
its contents. The evidence failed to show that the private
respondent informed the petitioner of such a sale at any time
before the former filed the adverse claim on 17 February
1977.
2. Secondly, the respondent Court erroneously applied the
rule on prescription against the petitioner and not against the
private respondent. The evidence conclusively established
that at an appropriate cadastral proceedings, Lot No. 5015
was awarded by the cadastral court to Juan Zabella and
Anastacio Llenares in equal pro-indiviso shares; the decision
became final; and on 28 July 1937, OCT No. 43073 was
issued in favor of Juan Zabella and Anastacio Llenares. It
was only on 17 February 1977, or after the lapse of over
thirty-nine (39) years, that the private respondent, as a
successor-in-interest of Ariston Zabella, took the first legal
step i.e., the filing of the affidavit of adverse claim to
protect and preserve his supposed right acquired under the
deed of sale. Unfortunately, however, this move did not
produce any legal effect. An adverse claim under Section
110 of the Land Registration Act (Act No. 496), the governing
law at that time, referred to a claim of "any part or interest in
registered land adverse to the registered owner, arising
subsequent to the date of the original registration." 21 In the
instant case, the private respondent's "adverse claim" is one
based on a transaction which had occurred long before the
rendition of the decision in the cadastral proceedings and the
issuance of OCT No. 43073. This seems to have escaped
the attention of the public respondent which instead
concluded that it was the petitioner who did not take any
legal action from 1937, when OCT No. 43073 was issued,
until 26 August 1976, when TCT NO. 27166 was issued
following her execution on 22 June 1976 of the affidavit of
"self-adjudication." This conclusion has no basis. As has
been earlier adverted to, the continued existence of OCT No.
43073 in Juan Zabella's name protected the petitioner as the
sole heir of Anastacio Llenares. There is no law which
requires her, as a sole heir, to execute an affidavit of
adjudication and cause both the cancellation of the OCT and
the issuance of a new one in her name and in the names of
the heirs of co-owner Juan Zabella in order to transfer the
ownership of the property to her, or protect her rights and
interests therein. The transfer in her favor took place, ipso
jure, upon the death of Anastacio Llenares. 22
3. Finally, the so-called deed of sale executed by Anastacio
Llenares in 1929 had lost its efficacy after the judgment in
the cadastral proceedings adjudicating Lot No. 5015 to him
and Juan Zabella became final. Ariston Zabella, the vendee
in the said sale, did not file any answer in the cadastral
proceedings or advance any claims on the said lot. It is to be
noted that the proceedings under the Cadastral Act (Act No.
2259, as amended) 23 are judicial and in rem. As such, they
bind the whole world. The final judgment rendered therein is

deemed to have settled the status of the land subject
thereof; any claim over it not noted thereon by other parties
is therefore deemed barred under the principle of res
judicata. 24 In a cadastal proceeding, the Government is
actually the plaintiff and all the claimants are defendants. 25
This is because the former, represented by the Solicitor
General, institutes the proceedings by a petition against the
holders, claimants, possessors or occupants of such lands or
any part thereof while the latter, or those claiming interest in
the entire land or any part of it, whether named in the notice
or not, are required to appear before the court and file an
answer on or before the return day or within such further
time as may be followed by the court. 26 All conflicting interest
shall be adjudicated therein and the decree awarded in favor
of the party entitled to the land; when it has become final, the
decree shall serve as the basis for an original certificate of
title in favor of the said party. This shall have the same effect
as a certificate of title granted under the Land Registration
Act. 27
A party fraudulently deprived of his property in a cadastral
proceeding may nevertheless file, within one (1) year from
the entry of the decree, a petition for review. 28 After the
lapse of the said period, if the property has not yet passed
on to an innocent purchaser for value, an action for
conveyance may still be filed by the aggrieved party. 29 In the
instant case, that action for conveyance could have only
been based on an implied trust in Article 1456 of the Civil
Code:
Art. 1456. If property is acquired through mistake or fraud,
the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from
whom the property comes.
It is now settled that an action for the conveyance of property
based on an implied or constructive trust prescribes in ten
(10) years. 30
WHEREFORE, judgment is hereby rendered GRANTING the
instant petition, ANNULING the challenged decision of the
public respondent Court of Appeals of 24 April 1991 in CAG.R. CV No. 09853 and REINSTATING the decision of the
trial court subject of the appeal in the latter case.
Costs against the private respondent.
SO ORDERED.

same parcel from Ricardo Gevero on February 5, 1952 per
deed of sale executed by Ricardo Gevero which was duly
annotated as entry No. 1128 at the back of Original
Certificate of Title No. 7610 covering the mother lot identified
as Lot No. 2476 in the names of Teodorica Babangha 1/2
share and her children: Maria; Restituto, Elena, Ricardo,
Eustaquio and Ursula, all surnamed surnamed Gevero, 1/2
undivided share of the whole area containing 48,122 square
meters.
GEVERO v. IAC
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77029
August 30, 1990
BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE,

ENRIQUITA and CLAUDIO, all surnamed, GEVERO,
petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE
DEVELOPMENT CORPORATION, respondents.
Carlito B. Somido for petitioners.
Benjamin N. Tabios for private respondent.
PARAS, J.:
This is a petition for review on certiorari of the March 20,
1988 decision 1 of the then Intermediate Appellate Court
(now Court of Appeals) in AC-GR CV No. 69264, entitled Del
Monte Development Corporation vs. Enrique Ababa, et al.,
etc. affirming the decision 2 of the then Court of First Instance
(now Regional Trial Court) of Misamis Oriental declaring the
plaintiff corporation as the true and absolute owner of that
portion of Lot 476 of the Cagayan Cadastre, particularly Lot
No. 2476-D of the subdivision plan (LRC) Psd-80450,
containing an area of Seven Thousand Eight Hundred
Seventy Eight (7,878) square meters more or less.
As found by the Appellate Court, the facts are as follows:
The parcel of land under litigation is Lot No. 2476 of the
Subdivision Plan Psd-37365 containing an area of 20,119
square meters and situated at Gusa, Cagayan de Oro City.
Said lot was acquired by purchase from the late Luis
Lancero on September 15, 1964 as per Deed of Absolute
Sale executed in favor of plaintiff and by virtue of which
Transfer Certificate of Title No. 4320 was issued to plaintiff
(DELCOR for brevity). Luis Lancero, in turn acquired the
Teodorica Babangha died long before World War II and was

survived by her six children aforementioned. The heirs of
Teodorica Babangha on October 17,1966 executed an ExtraJudicial Settlement and Partition of the estate of Teodorica
Babangha, consisting of two lots, among them was lot 2476.
By virtue of the extra-judicial settlement and partition
executed by the said heirs of Teodorica Babangha, Lot 2476A to Lot 2476-I, inclusive, under subdivision plan (LRC) Psd80450 duly approved by the Land Registration Commission,
Lot 2476-D, among others, was adjudicated to Ricardo
Gevero who was then alive at the time of extra-judicial
settlement and partition in 1966. Plaintiff (private respondent
herein) filed an action with the CFI (now RTC) of Misamis
Oriental to quiet title and/or annul the partition made by the
heirs of Teodorica Babangha insofar as the same prejudices
the land which it acquired a portion of lot 2476.
Plaintiff now seeks to quiet title and/or annul the partition
made by the heirs of Teodorica Babangha insofar as the
same prejudices the land which it acquired, a portion of Lot
2476. Plaintiff proved that before purchasing Lot 2476-A it
first investigated and checked the title of Luis Lancero and
found the same to be intact in the office of the Register of
Deeds of Cagayan de Oro City. The same with the
subdivision plan (Exh. "B"), the corresponding technical
description (Exh. "P") and the Deed of Sale executed by
Ricardo Gevero all of which were found to be
unquestionable. By reason of all these, plaintiff claims to
have bought the land in good faith and for value, occupying
the land since the sale and taking over from Lancero's
possession until May 1969, when the defendants Abadas
forcibly entered the property. (Rollo, p. 23)
After trial the court a quo on July 18, 1977 rendered
judgment, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby
rendered declaring the plaintiff corporation as the true and
absolute owner of that portion of Lot No. 2476 of the
Cagayan Cadastre, particularly Lot No. 2476-D of the
subdivision plan (LRC) Psd-80450, containing an area of
SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT
(7,878) square meters, more or less. The other portions of
Lot No. 2476 are hereby adjudicated as follows:
Lot No. 2476 B to the heirs of Elena Gevero;
Lot No. 2476 C to the heirs of Restituto Gevero;

Lot No. 2476 E to the defendant spouses Enrique C.
Torres and Francisca Aquino;
Lot No. 2476 F to the defendant spouses Eduard
Rumohr and Emilia Merida Rumohf ;
Lot Nos. 2476-H, 2476-I and 2476 G to defendant
spouses Enrique Abada and Lilia Alvarez Abada.
No adjudication can be made with respect to Lot No. 2476-A
considering that the said lot is the subject of a civil case
between the Heirs of Maria Gevero on one hand and the
spouses Daniel Borkingkito and Ursula Gevero on the other
hand, which case is now pending appeal before the Court of
Appeals. No pronouncement as to costs,
SO ORDERED. (Decision, Record on Appeal, p. 203; Rollo,
pp. 21-22)
From said decision, defendant heirs of Ricardo Gevero
(petitioners herein) appealed to the IAC (now Court of
Appeals) which subsequently, on March 20, 1986, affirmed
the decision appealed from.
Petitioners, on March 31, 1986, filed a motion for
reconsideration (Rollo, p. 28) but was denied on April 21,
1986.
Hence, the present petition.
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are: 1)
whether or not the deed of sale executed by Ricardo Gevero
to Luis Lancero is valid; 2) in the affirmative, whether or not
the 1/2 share of interest of Teodorica Babangha in one of the
litigated lots, lot no. 2476 under OCT No. 7610 is included in
the deed of sale; and 3) whether or not the private
respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely invalid
citing alleged flaws thereto, such as that: 1) the signature of
Ricardo was forged without his knowledge of such fact; 2)
Lancero had recognized the fatal defect of the 1952 deed of
sale when he signed the document in 1968 entitled
"Settlement to Avoid the Litigation"; 3) Ricardo's children
remained in the property notwithstanding the sale to
Lancero; 4) the designated Lot No. is 2470 instead of the
correct number being Lot No. 2476; 5) the deed of sale
included the share of Eustaquio Gevero without his authority;
6) T.C.T. No. 1183 of Lancero segregated the area of 20,119
square meters from the bigger area (OCT No. 7616) without
the consent of the other co-owners; 7) Lancero caused the
1952 Subdivision survey without the consent of the Geveros'
to bring about the segregation of the 20,119 square meters
lot from the mother lot 2476 which brought about the
issuance of his title T-1183 and to DELCOR's title T4320,
both of which were illegally issued; and 8) the area sold as
per document is 20,649 square meters whereas the
segregated area covered by TCT No. T-1183 of Lancero

turned out to be 20,119 square meters (Petitioners
Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the
1952 deed of sale in favor of Lancero was forged without
Ricardo's knowledge of such fact (Rollo, p. 71) it will be
observed that the deed of sale in question was executed with
all the legal formalities of a public document. The 1952 deed
was duly acknowledged by both parties before the notary
public, yet petitioners did not bother to rebut the legal
presumption of the regularity of the notarized document (Dy
v. Sacay, 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No.
77423, March 13, 1989). In fact it has long been settled that
a public document executed and attested through the
intervention of the notary public is evidence of the facts in
clear, unequivocal manner therein expressed. It has the
presumption of regularity and to contradict all these,
evidence must be clear, convincing and more than merely
preponderant (Rebuleda v. I.A.C., 155 SCRA 520-521
[1987]). Forgery cannot be presumed, it must be proven
(Siasat v. IAC, No. 67889, October 10, 1985). Likewise,
petitioners allegation of absence of consideration of the deed
was not substantiated. Under Art. 1354 of the Civil Code,
consideration is presumed unless the contrary is proven.
As to petitioners' contention that Lancero had recognized the
fatal defect of the 1952 deed when he signed the document
in 1968 entitled "Settlement to Avoid Litigation" (Rollo, p. 71),
it is a basic rule of evidence that the right of a party cannot
be prejudiced by an act, declaration, or omission of another
(Sec. 28. Rule 130, Rules of Court). This particular rule is
embodied in the maxim "res inter alios acta alteri nocere non
debet." Under Section 31, Rule 130, Rules of Court "where
one derives title to property from another, the act,
declaration, or omission of the latter, while holding the title, in
relation to the property is evidence against the former." It is
however stressed that the admission of the former owner of
a property must have been made while he was the owner
thereof in order that such admission may be binding upon
the present owner (City of Manila v. del Rosario, 5 Phil. 227
[1905]; Medel v. Avecilla, 15 Phil. 465 [1910]). Hence,
Lanceros' declaration or acts of executing the 1968
document have no binding effect on DELCOR, the ownership
of the land having passed to DELCOR in 1964.
Petitioners' claim that they remained in the property,
notwithstanding the alleged sale by Ricardo to Lancero
(Rollo, p. 71) involves a question of fact already raised and
passed upon by both the trial and appellate courts. Said the
Court of Appeals:
Contrary to the allegations of the appellants, the trial court
found that Luis Lancero had taken possession of the land
upon proper investigation by plaintiff the latter learned that it
was indeed Luis Lancero who was the owner and possessor
of Lot 2476 D. . . . (Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De GolaSison v. Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14

SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289
[1967]; Tan v. C.A., 20 SCRA 54 [1967]; Ramirez Tel. Co. v.
Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25
SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA 130 [1986]).
Suffice it to say that the other flaws claimed by the
petitioners which allegedly invalidated the 1952 deed of sale
have not been raised before the trial court nor before the
appellate court. It is settled jurisprudence that an issue which
was neither averred in the complaint nor raised during the
trial in the court below cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play,
justice and due process. (Matienzo v. Servidad, 107 SCRA
276 [1981]; Dela Santa v. C.A., 140 SCRA 44 [1985];
Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v. IAC,
147 SCRA 434 [1987]; Dulos Realty and Development
Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R.
No. 78282, July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica
(mother of Ricardo) in Lot 2476 under OCT No. 7610 was
not included in the deed of sale as it was intended to limit
solely to Ricardos' proportionate share out of the undivided
1/2 of the area pertaining to the six (6) brothers and sisters
listed in the Title and that the Deed did not include the share
of Ricardo, as inheritance from Teodorica, because the Deed
did not recite that she was deceased at the time it was
executed (Rollo, pp. 67-68).
The hereditary share in a decedents' estate is transmitted or
vested immediately from the moment of the death of the
"causante" or predecessor in interest (Civil Code of the
Philippines, Art. 777), and there is no legal bar to a
successor (with requisite contracting capacity) disposing of
his hereditary share immediately after such death, even if the
actual extent of such share is not determined until the
subsequent liquidation of the estate (De Borja v. Vda. de
Borja, 46 SCRA 577 [1972]).
Teodorica Babangha died long before World War II, hence,
the rights to the succession were transmitted from the
moment of her death. It is therefore incorrect to state that it
was only in 1966, the date of extrajudicial partition, when
Ricardo received his share in the lot as inheritance from his
mother Teodorica. Thus, when Ricardo sold his share over
lot 2476 that share which he inherited from Teodorica was
also included unless expressly excluded in the deed of sale.
one paragraph of the deed of sale, would not only create

contradictions but also, render meaningless and set at
naught the entire provisions thereof.
Petitioners claim that DELCOR's action is barred by laches
considering that the petitioners have remained in the actual,
open, uninterrupted and adverse possession thereof until at
present (Rollo, p. 17).
An instrument notarized by a notary public as in the case at
bar is a public instrument (Eacnio v. Baens, 5 Phil. 742). The
execution of a public instrument is equivalent to the delivery
of the thing (Art. 1498, 1st Par., Civil Code) and is deemed
legal delivery. Hence, its execution was considered a
sufficient delivery of the property (Buencamino v. Viceo, 13
Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda.
de Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban
Development Corp. v. Auditor Gen., 63 SCRA 397 (1975]).
Besides, the property sold is a registered land. It is the act of
registration that transfers the ownership of the land sold.
(GSIS v. C.A., G.R. No. 42278, January 20, 1989). If the
property is a registered land, the purchaser in good, faith has
a right to rely on the certificate of title and is under no duty to
go behind it to look for flaws (Mallorca v. De Ocampo, No. L26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710
[1988]; Nuguid v. CA-G.R. No. 77427, March 13, 1989).
Under the established principles of land registration law, the
person dealing with registered land may generally rely on the
correctness of its certificate of title and the law will in no way
oblige him to go behind the certificate to determine the
condition of the property (Tiongco v. de la Merced, L-2446,
July 25, 1974; Lopez vs. CA., G.R. No. 49739, January 20,
1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]).
This notwithstanding, DELCOR did more than that. It did not
only rely on the certificate of title. The Court of Appeals found
that it had first investigated and checked the title (T.C.T. No.
T-1183) in the name of Luis Lancero. It likewise inquired into
the Subdivision Plan, the corresponding technical description
and the deed of sale executed by Ricardo Gevero in favor of
Luis Lancero and found everything in order. It even went to
the premises and found Luis Lancero to be in possession of
the land to the exclusion of any other person. DELCOR had
therefore acted in good faith in purchasing the land in
question.
Consequently, DELCOR's action is not barred by laches.
Petitioners contend that Ricardo's share from Teodorica was

excluded in the sale considering that a paragraph of the
aforementioned deed refers merely to the shares of Ricardo
and Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed
as to harmonize and give effect to the different provisions
thereof (Reparations Commission v. Northern Lines, Inc., 34
SCRA 203 [1970]), to ascertain the meaning of the
provisions of a contract, its entirety must be taken into
account (Ruiz v. Sheriff of Manila, 34 SCRA 83 [1970]). The
interpretation insisted upon by the petitioners, by citing only
The main issues having been disposed of, discussion of the

other issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby
DISMISSED and the decision of the Court of Appeals is
hereby AFFIRMED.
SO ORDERED.

respondents to satisfy the personal judgment debt of Teofista
Suarez, the surviving spouse of Marcelo Suarez, mother of
herein petitioners.
The undisputed facts of the case are as follows:
SUAREZ v. CA
SECOND DIVISION
[G.R. No. 94918. September 2, 1992.]
DANILO I. SUAREZ, EUFROCINA SUAREZ-ANDRES,
MARCELO I. SUAREZ, JR., EVELYN SUAREZ-DE LEON
and REGINIO I. SUAREZ, Petitioners, v. THE COURT OF
APPEALS, VALENTE RAYMUNDO, VIOLETA
RAYMUNDO, MA. CONCEPCION VITO and VIRGINIA
BANTA, Respondents.
Villareal Law Offices, for Petitioners.
Nelson Loyola for Private Respondent.
SYLLABUS
1. CIVIL LAW; WILLS AND SUCCESSION; LEGITIME;

PROPRIETARY
INTEREST
OF
THE
CHILDREN,
DIFFERENT AND ADVERSE FROM THEIR MOTHER.
The legitime of the surviving spouse is equal to the legitime
of each child. The proprietary interest of petitioners in the
levied and auctioned property is different from and adverse
to that of their mother. Petitioners became co-owners of the
property not because of their mother but through their own
right as children of their deceased father. Therefore,
petitioners are not barred in any way from instituting the
action to annul the auction sale to protect their own interest.
DECISION
NOCON, J.:
The ultimate issue before Us is whether or not private

respondents can validly acquire all the five (5) parcels of
land co-owned by petitioners and registered in the name of
petitioners deceased father. Marcelo Suarez, whose estate
has not been partitioned or liquidated, after the said
properties were levied and publicly sold en masse to private
Herein petitioners are brothers and sisters. Their father died

in 1955 and since then his estate consisting of several
valuable parcels of land in Pasig, Metro Manila has lot been
liquidated or partitioned. In 1977, petitioners widowed
mother and Rizal Realty Corporation lost in the consolidated
cases for rescission of contract and for damages, and were
ordered by Branch 1 of the then Court of First Instance of
Rizal (now Branch 151, RTC of Pasig) to pay, jointly and
severally, herein respondents the aggregate principal amount
of about P70,000 as damages. 1
The judgment against petitioners mother and Rizal Realty
Corporation having become final and executory, five (5)
valuable parcel of land in Pasig, Metro Manila, (worth to be
millions then) were levied and sold on execution on June 24,
1983 in favor of the private respondents as the highest
bidder for the amount of P94,170.000. Private respondents
were then issued a certificate of sale which was
subsequently registered or August 1, 1983.
On June 21, 1984 before the expiration of the redemption
period, petitioners filed a reinvindicatory action 2 against
private respondents and the Provincial Sheriff of Rizal,
thereafter docketed as Civil Case No. 51203, for the
annulment of the auction sale and the recovery of the
ownership of the levied pieces of property. Therein, they
alleged, among others, that being strangers to the case
decided against their mother, they cannot be held liable
therefor and that the five (5) parcels of land, of which they
are co-owners, can neither be levied nor sold on execution.
On July 31, 1984, the Provincial Sheriff of Rizal issued to
private respondents a final deed of sale 3 over the
properties.
On October 22, 1984, Teofista Suarez joined by herein
petitioners filed with Branch 151 a Motion for
Reconsideration 4 of the Order dated October 10, 1984,
claiming that the parcels of land are co-owned by them and
further informing the Court the filing and pendency of an
action to annul the auction sale (Civil Case No. 51203),
which motion however, was denied.
On February 25, 1985, a writ of preliminary injunction was
issued enjoining private respondents from transferring to
third parties the levied parcels of land based on the finding
that the auctioned lands are co-owned by petitioners.
On March 1, 1985, private respondent Valente Raymundo
filed in Civil Case No. 51203 a Motion to Dismiss for failure
on the part of the petitioners to prosecute, however, such
motion was later denied by Branch 155, Regional Trial Court,
Pasig.
On December 1985, Raymundo filed in Civil Case No. 51203

an Ex-Parte Motion to Dismiss complaint for failure to
prosecute. This was granted by Branch 155 through an
Order dated May 29, 1986, notwithstanding petitioners
pending motion for the issuance of alias summons to be
served upon the other defendants in the said case. A motion
for reconsideration was filed but was later denied.
consists of one-half of the hereditary estate of the father and

of the mother.
On October 10, 1984, RTC Branch 151 issued in Civil Case

Nos. 21736-21739 an Order directing Teofista Suarez and all
persons claiming right under her to vacate the lots subject of
the judicial sale; to desist from removing or alienating
improvements thereon; and to surrender to private
respondents the owners duplicate copy of the torrens title
and other pertinent documents.
Teofista Suarez then filed with the then Court of Appeals a
petition for certiorari to annul the Orders of Branch 151 dated
October 10, 1984 and October 14, 1986 issued in Civil Case
Nos. 21736-21739.
Article 892 par. 2 likewise provides:
On December 4, 1986 petitioners filed with Branch 155 a

Motion for reconsideration of the Order 5 dated September
24, 1986. In an Order dated June 10, 1987, 6 Branch 155
lifted its previous order of dismissal and directed the
issuance of alias summons.
Respondents then appealed to the Court of Appeals seeking
to annul the orders dated February 25, 1985, 7 May 19, 1989
8 and February 26, 1990 9 issued in Civil Case No. 51203
and further ordering respondent Judge to dismiss Civil Case
No. 51203. The appellate court rendered its decision on July
27, 1990, 10 the dispositive portion of which reads:
The latter may freely dispose of the remaining half, subject to

the rights of illegitimate children and of the surviving spouse
as hereinafter provided."
"If there are two or more legitimate children or descendants,

the surviving spouse shall be entitled to a portion equal to
the legitime of each of the legitimate children or
descendants."
Thus, from the foregoing, the legitime of the surviving
spouse is equal to the legitime of each child.
The proprietary interest of petitioners in the levied and
auctioned property is different from and adverse to that of
their mother. Petitioners became co-owners of the property
not because of their mother but through their own right as
children of their deceased father. Therefore, petitioners are
not barred in any way from instituting the action to annul the
auction sale to protect their own interest.
WHEREFORE, the decision of the Court of Appeals dated
July 27, 1990 as well as its Resolution of August 28, 1990
are hereby REVERSED and set aside; and Civil Case No.
51203 is reinstated only to determine that portion which
belongs to petitioners and to annul the sale with regard to
said portion.
SO ORDERED.
"WHEREFORE, the petition for certiorari is hereby granted

and the questioned orders dated February 25, 1985, May 19,
1989 and February 26, 1990 issued in Civil Case No. 51203
are hereby annulled, further respondent Judge is ordered to
dismiss Civil Case No. 51203." 11
LORENZO v. POSADAS
SUPREME COURT
Manila
Hence, this appeal.

Even without touching on the incidents and issues raised by
both petitioner and private respondents and the
developments subsequent to the filing of the complaint, We
cannot but notice the glaring error committed by the trial
court.
It would be useless to discuss the procedural issue on the
validity of the execution and the manner of publicly selling en
masse the subject properties for auction. To start with, only
one-half of the 5 parcels of land should have been the
subject of the auction sale.
EN BANC
G.R. No. L-43082
June 18, 1937
PABLO LORENZO, as trustee of the estate of Thomas

Hanley, deceased, plaintiff-appellant,
vs.
JUAN POSADAS, JR., Collector of Internal Revenue,
defendant-appellant.
Pablo Lorenzo and Delfin Joven for plaintiff-appellant.
Office of the Solicitor-General Hilado for defendantappellant.
The law in point is Article 777 of the Civil Code, the law
applicable at the time of the institution of the case.
"The rights to the succession are transmitted from the
moment of the death of the decedent."
Article 888 further provides:
"The legitime of the legitimate children and descendants
LAUREL, J.:
On October 4, 1932, the plaintiff Pablo Lorenzo, in his
capacity as trustee of the estate of Thomas Hanley,
deceased, brought this action in the Court of First Instance of

Zamboanga against the defendant, Juan Posadas, Jr., then
the Collector of Internal Revenue, for the refund of the
amount of P2,052.74, paid by the plaintiff as inheritance tax
on the estate of the deceased, and for the collection of
interst thereon at the rate of 6 per cent per annum, computed
from September 15, 1932, the date when the aforesaid tax
was [paid under protest. The defendant set up a
counterclaim for P1,191.27 alleged to be interest due on the
tax in question and which was not included in the original
assessment. From the decision of the Court of First Instance
of Zamboanga dismissing both the plaintiff's complaint and
the defendant's counterclaim, both parties appealed to this
court.
It appears that on May 27, 1922, one Thomas Hanley died in
Zamboanga, Zamboanga, leaving a will (Exhibit 5) and
considerable amount of real and personal properties. On
june 14, 1922, proceedings for the probate of his will and the
settlement and distribution of his estate were begun in the
Court of First Instance of Zamboanga. The will was admitted
to probate. Said will provides, among other things, as
follows:
4. I direct that any money left by me be given to my nephew
Matthew Hanley.
5. I direct that all real estate owned by me at the time of my
death be not sold or otherwise disposed of for a period of ten
(10) years after my death, and that the same be handled and
managed by the executors, and proceeds thereof to be given
to my nephew, Matthew Hanley, at Castlemore,
Ballaghaderine, County of Rosecommon, Ireland, and that
he be directed that the same be used only for the education
of my brother's children and their descendants.
6. I direct that ten (10) years after my death my property be
given to the above mentioned Matthew Hanley to be
disposed of in the way he thinks most advantageous.
xxx
xxx
estate an inheritance tax in the amount of P1,434.24 which,

together with the penalties for deliquency in payment
consisting of a 1 per cent monthly interest from July 1, 1931
to the date of payment and a surcharge of 25 per cent on the
tax, amounted to P2,052.74. On March 15, 1932, the
defendant filed a motion in the testamentary proceedings
pending before the Court of First Instance of Zamboanga
(Special proceedings No. 302) praying that the trustee,
plaintiff herein, be ordered to pay to the Government the said
sum of P2,052.74. The motion was granted. On September
15, 1932, the plaintiff paid said amount under protest,
notifying the defendant at the same time that unless the
amount was promptly refunded suit would be brought for its
recovery. The defendant overruled the plaintiff's protest and
refused to refund the said amount hausted, plaintiff went to
court with the result herein above indicated.
In his appeal, plaintiff contends that the lower court erred:
I. In holding that the real property of Thomas Hanley,
deceased, passed to his instituted heir, Matthew Hanley,
from the moment of the death of the former, and that from
the time, the latter became the owner thereof.
II. In holding, in effect, that there was deliquency in the
payment of inheritance tax due on the estate of said
deceased.
III. In holding that the inheritance tax in question be based
upon the value of the estate upon the death of the testator,
and not, as it should have been held, upon the value thereof
at the expiration of the period of ten years after which,
according to the testator's will, the property could be and was
to be delivered to the instituted heir.
IV. In not allowing as lawful deductions, in the determination
of the net amount of the estate subject to said tax, the
amounts allowed by the court as compensation to the
"trustees" and paid to them from the decedent's estate.
xxx
8. I state at this time I have one brother living, named

Malachi Hanley, and that my nephew, Matthew Hanley, is a
son of my said brother, Malachi Hanley.
The Court of First Instance of Zamboanga considered it
proper for the best interests of ther estate to appoint a
trustee to administer the real properties which, under the will,
were to pass to Matthew Hanley ten years after the two
executors named in the will, was, on March 8, 1924,
appointed trustee. Moore took his oath of office and gave
bond on March 10, 1924. He acted as trustee until February
29, 1932, when he resigned and the plaintiff herein was
appointed in his stead.
During the incumbency of the plaintiff as trustee, the
defendant Collector of Internal Revenue, alleging that the
estate left by the deceased at the time of his death consisted
of realty valued at P27,920 and personalty valued at P1,465,
and allowing a deduction of P480.81, assessed against the
V. In not rendering judgment in favor of the plaintiff and in

denying his motion for new trial.
The defendant-appellant contradicts the theories of the
plaintiff and assigns the following error besides:
The lower court erred in not ordering the plaintiff to pay to the
defendant the sum of P1,191.27, representing part of the
interest at the rate of 1 per cent per month from April 10,
1924, to June 30, 1931, which the plaintiff had failed to pay
on the inheritance tax assessed by the defendant against the
estate of Thomas Hanley.
The following are the principal questions to be decided by
this court in this appeal: (a) When does the inheritance tax
accrue and when must it be satisfied? (b) Should the
inheritance tax be computed on the basis of the value of the
estate at the time of the testator's death, or on its value ten
years later? (c) In determining the net value of the estate
subject to tax, is it proper to deduct the compensation due to

trustees? (d) What law governs the case at bar? Should the
provisions of Act No. 3606 favorable to the tax-payer be
given retroactive effect? (e) Has there been deliquency in the
payment of the inheritance tax? If so, should the additional
interest claimed by the defendant in his appeal be paid by
the estate? Other points of incidental importance, raised by
the parties in their briefs, will be touched upon in the course
of this opinion.
(a) The accrual of the inheritance tax is distinct from the
obligation to pay the same. Section 1536 as amended, of the
Administrative Code, imposes the tax upon "every
transmission by virtue of inheritance, devise, bequest, gift
mortis
causa,
or
advance
in
anticipation
of
inheritance,devise, or bequest." The tax therefore is upon
transmission or the transfer or devolution of property of a
decedent, made effective by his death. (61 C. J., p. 1592.) It
is in reality an excise or privilege tax imposed on the right to
succeed to, receive, or take property by or under a will or the
intestacy law, or deed, grant, or gift to become operative at
or after death. Acording to article 657 of the Civil Code, "the
rights to the succession of a person are transmitted from the
moment of his death." "In other words", said Arellano, C. J.,
". . . the heirs succeed immediately to all of the property of
the deceased ancestor. 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." (Bondad vs. Bondad, 34 Phil.,
232. See also, Mijares vs. Nery, 3 Phil., 195; Suilong & Co.,
vs. Chio-Taysan, 12 Phil., 13; Lubrico vs. Arbado, 12 Phil.,
391; Innocencio vs. Gat-Pandan, 14 Phil., 491; Aliasas
vs.Alcantara, 16 Phil., 489; Ilustre vs. Alaras Frondosa, 17
Phil., 321; Malahacan vs. Ignacio, 19 Phil., 434; Bowa vs.
Briones, 38 Phil., 27; Osario vs. Osario & Yuchausti
Steamship Co., 41 Phil., 531; Fule vs. Fule, 46 Phil., 317;
Dais vs. Court of First Instance of Capiz, 51 Phil., 396; Baun
vs. Heirs of Baun, 53 Phil., 654.) Plaintiff, however, asserts
that while article 657 of the Civil Code is applicable to testate
as well as intestate succession, it operates only in so far as
forced heirs are concerned. But the language of article 657
of the Civil Code is broad and makes no distinction between
different classes of heirs. That article does not speak of
forced heirs; it does not even use the word "heir". It speaks
of the rights of succession and the transmission thereof from
the moment of death. The provision of section 625 of the
Code of Civil Procedure regarding the authentication and
probate of a will as a necessary condition to effect
transmission of property does not affect the general rule laid
down in article 657 of the Civil Code. The authentication of a
will implies its due execution but once probated and allowed
the transmission is effective as of the death of the testator in
accordance with article 657 of the Civil Code. Whatever may
be the time when actual transmission of the inheritance
takes place, succession takes place in any event at the
moment of the decedent's death. The time when the heirs
legally succeed to the inheritance may differ from the time
when the heirs actually receive such inheritance. "Poco
importa", says Manresa commenting on article 657 of the
Civil Code, "que desde el falleimiento del causante, hasta
que el heredero o legatario entre en posesion de los bienes
de la herencia o del legado, transcurra mucho o poco
tiempo, pues la adquisicion ha de retrotraerse al momento

de la muerte, y asi lo ordena el articulo 989, que debe
considerarse como complemento del presente." (5 Manresa,
305; see also, art. 440, par. 1, Civil Code.) Thomas Hanley
having died on May 27, 1922, the inheritance tax accrued as
of the date.
From the fact, however, that Thomas Hanley died on May 27,
1922, it does not follow that the obligation to pay the tax
arose as of the date. The time for the payment on inheritance
tax is clearly fixed by section 1544 of the Revised
Administrative Code as amended by Act No. 3031, in relation
to section 1543 of the same Code. The two sections follow:
SEC. 1543. Exemption of certain acquisitions
transmissions. The following shall not be taxed:
and
(a) The merger of the usufruct in the owner of the naked title.
(b) The transmission or delivery of the inheritance or legacy
by the fiduciary heir or legatee to the trustees.
(c) The transmission from the first heir, legatee, or donee in
favor of another beneficiary, in accordance with the desire of
the predecessor.
In the last two cases, if the scale of taxation appropriate to
the new beneficiary is greater than that paid by the first, the
former must pay the difference.
SEC. 1544. When tax to be paid. The tax fixed in this
article shall be paid:
(a) In the second and third cases of the next preceding
section, before entrance into possession of the property.
(b) In other cases, within the six months subsequent to the
death of the predecessor; but if judicial testamentary or
intestate proceedings shall be instituted prior to the
expiration of said period, the payment shall be made by the
executor or administrator before delivering to each
beneficiary his share.
If the tax is not paid within the time hereinbefore prescribed,
interest at the rate of twelve per centum per annum shall be
added as part of the tax; and to the tax and interest due and
unpaid within ten days after the date of notice and demand
thereof by the collector, there shall be further added a
surcharge of twenty-five per centum.
A certified of all letters testamentary or of admisitration shall
be furnished the Collector of Internal Revenue by the Clerk
of Court within thirty days after their issuance.
It should be observed in passing that the word "trustee",
appearing in subsection (b) of section 1543, should read
"fideicommissary" or "cestui que trust". There was an
obvious mistake in translation from the Spanish to the
English version.

The instant case does fall under subsection (a), but under
subsection (b), of section 1544 above-quoted, as there is
here no fiduciary heirs, first heirs, legatee or donee. Under
the subsection, the tax should have been paid before the
delivery of the properties in question to P. J. M. Moore as
trustee on March 10, 1924.
(b) The plaintiff contends that the estate of Thomas Hanley,
in so far as the real properties are concerned, did not and
could not legally pass to the instituted heir, Matthew Hanley,
until after the expiration of ten years from the death of the
testator on May 27, 1922 and, that the inheritance tax should
be based on the value of the estate in 1932, or ten years
after the testator's death. The plaintiff introduced evidence
tending to show that in 1932 the real properties in question
had a reasonable value of only P5,787. This amount added
to the value of the personal property left by the deceased,
which the plaintiff admits is P1,465, would generate an
inheritance tax which, excluding deductions, interest and
surcharge, would amount only to about P169.52.
If death is the generating source from which the power of the
estate to impose inheritance taxes takes its being and if,
upon the death of the decedent, succession takes place and
the right of the estate to tax vests instantly, the tax should be
measured by the vlaue of the estate as it stood at the time of
the decedent's death, regardless of any subsequent
contingency value of any subsequent increase or decrease
in value. (61 C. J., pp. 1692, 1693; 26 R. C. L., p. 232;
Blakemore and Bancroft, Inheritance Taxes, p. 137. See also
Knowlton vs. Moore, 178 U.S., 41; 20 Sup. Ct. Rep., 747; 44
Law. ed., 969.) "The right of the state to an inheritance tax
accrues at the moment of death, and hence is ordinarily
measured as to any beneficiary by the value at that time of
such property as passes to him. Subsequent appreciation or
depriciation is immaterial." (Ross, Inheritance Taxation, p.
72.)
Our attention is directed to the statement of the rule in
Cyclopedia of Law of and Procedure (vol. 37, pp. 1574,
1575) that, in the case of contingent remainders, taxation is
postponed until the estate vests in possession or the
contingency is settled. This rule was formerly followed in
New York and has been adopted in Illinois, Minnesota,
Massachusetts, Ohio, Pennsylvania and Wisconsin. This
rule, horever, is by no means entirely satisfactory either to
the estate or to those interested in the property (26 R. C. L.,
p. 231.). Realizing, perhaps, the defects of its anterior
system, we find upon examination of cases and authorities
that New York has varied and now requires the immediate
appraisal of the postponed estate at its clear market value
and the payment forthwith of the tax on its out of the corpus
of the estate transferred. (In re Vanderbilt, 172 N. Y., 69; 69
N. E., 782; In re Huber, 86 N. Y. App. Div., 458; 83 N. Y.
Supp., 769; Estate of Tracy, 179 N. Y., 501; 72 N. Y., 519;
Estate of Brez, 172 N. Y., 609; 64 N. E., 958; Estate of Post,
85 App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun
vs. Lord Advocate, 1 Peter. Sc. App., 970; 3 Macq. H. L.,
659; 23 Eng. Rul. Cas., 888.) California adheres to this new
rule (Stats. 1905, sec. 5, p. 343).
But whatever may be the rule in other jurisdictions, we hold

that a transmission by inheritance is taxable at the time of
the predecessor's death, notwithstanding the postponement
of the actual possession or enjoyment of the estate by the
beneficiary, and the tax measured by the value of the
property transmitted at that time regardless of its
appreciation or depreciation.
(c) Certain items are required by law to be deducted from the
appraised gross in arriving at the net value of the estate on
which the inheritance tax is to be computed (sec. 1539,
Revised Administrative Code). In the case at bar, the
defendant and the trial court allowed a deduction of only
P480.81. This sum represents the expenses and
disbursements of the executors until March 10, 1924, among
which were their fees and the proven debts of the deceased.
The plaintiff contends that the compensation and fees of the
trustees, which aggregate P1,187.28 (Exhibits C, AA, EE,
PP, HH, JJ, LL, NN, OO), should also be deducted under
section 1539 of the Revised Administrative Code which
provides, in part, as follows: "In order to determine the net
sum which must bear the tax, when an inheritance is
concerned, there shall be deducted, in case of a
resident, . . . the judicial expenses of the testamentary or
intestate proceedings, . . . ."
A trustee, no doubt, is entitled to receive a fair compensation
for his services (Barney vs. Saunders, 16 How., 535; 14 Law.
ed., 1047). But from this it does not follow that the
compensation due him may lawfully be deducted in arriving
at the net value of the estate subject to tax. There is no
statute in the Philippines which requires trustees'
commissions to be deducted in determining the net value of
the estate subject to inheritance tax (61 C. J., p. 1705).
Furthermore, though a testamentary trust has been created,
it does not appear that the testator intended that the duties of
his executors and trustees should be separated. (Ibid.; In re
Vanneck's Estate, 161 N. Y. Supp., 893; 175 App. Div., 363;
In re Collard's Estate, 161 N. Y. Supp., 455.) On the contrary,
in paragraph 5 of his will, the testator expressed the desire
that his real estate be handled and managed by his
executors until the expiration of the period of ten years
therein provided. Judicial expenses are expenses of
administration (61 C. J., p. 1705) but, in State vs. Hennepin
County Probate Court (112 N. W., 878; 101 Minn., 485), it
was said: ". . . The compensation of a trustee, earned, not in
the administration of the estate, but in the management
thereof for the benefit of the legatees or devises, does not
come properly within the class or reason for exempting
administration expenses. . . . Service rendered in that behalf
have no reference to closing the estate for the purpose of a
distribution thereof to those entitled to it, and are not required
or essential to the perfection of the rights of the heirs or
legatees. . . . Trusts . . . of the character of that here before
the court, are created for the the benefit of those to whom
the property ultimately passes, are of voluntary creation, and
intended for the preservation of the estate. No sound reason
is given to support the contention that such expenses should
be taken into consideration in fixing the value of the estate
for the purpose of this tax."

(d) The defendant levied and assessed the inheritance tax
due from the estate of Thomas Hanley under the provisions
of section 1544 of the Revised Administrative Code, as
amended by section 3 of Act No. 3606. But Act No. 3606
went into effect on January 1, 1930. It, therefore, was not the
law in force when the testator died on May 27, 1922. The law
at the time was section 1544 above-mentioned, as amended
by Act No. 3031, which took effect on March 9, 1922.
contrary. (See Sutherland, Statutory Construction, 361;

Twine Co. vs. Worthington, 141 U. S., 468; 12 Sup. Ct., 55;
Rice vs. U. S., 4 C. C. A., 104; 53 Fed., 910; Com. vs.
Standard Oil Co., 101 Pa. St., 150; State vs. Wheeler, 44 P.,
430; 25 Nev. 143.) Article 22 of the Revised Penal Code is
not applicable to the case at bar, and in the absence of clear
legislative intent, we cannot give Act No. 3606 a retroactive
effect.
It is well-settled that inheritance taxation is governed by the

statute in force at the time of the death of the decedent (26
R. C. L., p. 206; 4 Cooley on Taxation, 4th ed., p. 3461). The
taxpayer can not foresee and ought not to be required to
guess the outcome of pending measures. Of course, a tax
statute may be made retroactive in its operation. Liability for
taxes under retroactive legislation has been "one of the
incidents of social life." (Seattle vs. Kelleher, 195 U. S., 360;
49 Law. ed., 232 Sup. Ct. Rep., 44.) But legislative intent that
a tax statute should operate retroactively should be perfectly
clear. (Scwab vs. Doyle, 42 Sup. Ct. Rep., 491; Smietanka
vs. First Trust & Savings Bank, 257 U. S., 602; Stockdale vs.
Insurance Co., 20 Wall., 323; Lunch vs. Turrish, 247 U. S.,
221.) "A statute should be considered as prospective in its
operation, whether it enacts, amends, or repeals an
inheritance tax, unless the language of the statute clearly
demands or expresses that it shall have a retroactive effect, .
. . ." (61 C. J., P. 1602.) Though the last paragraph of section
5 of Regulations No. 65 of the Department of Finance makes
section 3 of Act No. 3606, amending section 1544 of the
Revised Administrative Code, applicable to all estates the
inheritance taxes due from which have not been paid, Act
No. 3606 itself contains no provisions indicating legislative
intent to give it retroactive effect. No such effect can begiven
the statute by this court.
(e) The plaintiff correctly states that the liability to pay a tax
may arise at a certain time and the tax may be paid within
another given time. As stated by this court, "the mere failure
to pay one's tax does not render one delinqent until and
unless the entire period has eplased within which the
taxpayer is authorized by law to make such payment without
being subjected to the payment of penalties for fasilure to
pay his taxes within the prescribed period." (U. S. vs.
Labadan, 26 Phil., 239.)
The defendant Collector of Internal Revenue maintains,

however, that certain provisions of Act No. 3606 are more
favorable to the taxpayer than those of Act No. 3031, that
said provisions are penal in nature and, therefore, should
operate retroactively in conformity with the provisions of
article 22 of the Revised Penal Code. This is the reason why
he applied Act No. 3606 instead of Act No. 3031. Indeed,
under Act No. 3606, (1) the surcharge of 25 per cent is
based on the tax only, instead of on both the tax and the
interest, as provided for in Act No. 3031, and (2) the taxpayer
is allowed twenty days from notice and demand by rthe
Collector of Internal Revenue within which to pay the tax,
instead of ten days only as required by the old law.
Properly speaking, a statute is penal when it imposes
punishment for an offense committed against the state
which, under the Constitution, the Executive has the power
to pardon. In common use, however, this sense has been
enlarged to include within the term "penal statutes" all status
which command or prohibit certain acts, and establish
penalties for their violation, and even those which, without
expressly prohibiting certain acts, impose a penalty upon
their commission (59 C. J., p. 1110). Revenue laws,
generally, which impose taxes collected by the means
ordinarily resorted to for the collection of taxes are not
classed as penal laws, although there are authorities to the
The defendant maintains that it was the duty of the executor

to pay the inheritance tax before the delivery of the
decedent's property to the trustee. Stated otherwise, the
defendant contends that delivery to the trustee was delivery
to the cestui que trust, the beneficiery in this case, within the
meaning of the first paragraph of subsection (b) of section
1544 of the Revised Administrative Code. This contention is
well taken and is sustained. The appointment of P. J. M.
Moore as trustee was made by the trial court in conformity
with the wishes of the testator as expressed in his will. It is
true that the word "trust" is not mentioned or used in the will
but the intention to create one is clear. No particular or
technical words are required to create a testamentary trust
(69 C. J., p. 711). The words "trust" and "trustee", though apt
for the purpose, are not necessary. In fact, the use of these
two words is not conclusive on the question that a trust is
created (69 C. J., p. 714). "To create a trust by will the
testator must indicate in the will his intention so to do by
using language sufficient to separate the legal from the
equitable estate, and with sufficient certainty designate the
beneficiaries, their interest in the ttrust, the purpose or object
of the trust, and the property or subject matter thereof.
Stated otherwise, to constitute a valid testamentary trust
there must be a concurrence of three circumstances: (1)
Sufficient words to raise a trust; (2) a definite subject; (3) a
certain or ascertain object; statutes in some jurisdictions
expressly or in effect so providing." (69 C. J., pp. 705,706.)
There is no doubt that the testator intended to create a trust.
He ordered in his will that certain of his properties be kept
together undisposed during a fixed period, for a stated
purpose. The probate court certainly exercised sound
judgment in appointment a trustee to carry into effect the
provisions of the will (see sec. 582, Code of Civil Procedure).
P. J. M. Moore became trustee on March 10, 1924. On that
date trust estate vested in him (sec. 582 in relation to sec.
590, Code of Civil Procedure). The mere fact that the estate
of the deceased was placed in trust did not remove it from
the operation of our inheritance tax laws or exempt it from
the payment of the inheritance tax. The corresponding
inheritance tax should have been paid on or before March
10, 1924, to escape the penalties of the laws. This is so for

the reason already stated that the delivery of the estate to
the trustee was in esse delivery of the same estate to the
cestui que trust, the beneficiary in this case. A trustee is but
an instrument or agent for the cestui que trust (Shelton vs.
King, 299 U. S., 90; 33 Sup. Ct. Rep., 689; 57 Law. ed.,
1086). When Moore accepted the trust and took possesson
of the trust estate he thereby admitted that the estate
belonged not to him but to his cestui que trust (Tolentino vs.
Vitug, 39 Phil.,126, cited in 65 C. J., p. 692, n. 63). He did
not acquire any beneficial interest in the estate. He took such
legal estate only as the proper execution of the trust required
(65 C. J., p. 528) and, his estate ceased upon the fulfillment
of the testator's wishes. The estate then vested absolutely in
the beneficiary (65 C. J., p. 542).
The highest considerations of public policy also justify the
conclusion we have reached. Were we to hold that the
payment of the tax could be postponed or delayed by the
creation of a trust of the type at hand, the result would be
plainly disastrous. Testators may provide, as Thomas Hanley
has provided, that their estates be not delivered to their
beneficiaries until after the lapse of a certain period of time.
In the case at bar, the period is ten years. In other cases, the
trust may last for fifty years, or for a longer period which
does not offend the rule against petuities. The collection of
the tax would then be left to the will of a private individual.
The mere suggestion of this result is a sufficient warning
against the accpetance of the essential to the very
exeistence of government. (Dobbins vs. Erie Country, 16
Pet., 435; 10 Law. ed., 1022; Kirkland vs. Hotchkiss, 100 U.
S., 491; 25 Law. ed., 558; Lane County vs. Oregon, 7 Wall.,
71; 19 Law. ed., 101; Union Refrigerator Transit Co. vs.
Kentucky, 199 U. S., 194; 26 Sup. Ct. Rep., 36; 50 Law. ed.,
150; Charles River Bridge vs. Warren Bridge, 11 Pet., 420; 9
Law. ed., 773.) The obligation to pay taxes rests not upon the
privileges enjoyed by, or the protection afforded to, a citizen
by the government but upon the necessity of money for the
support of the state (Dobbins vs. Erie Country, supra). For
this reason, no one is allowed to object to or resist the
payment of taxes solely because no personal benefit to him
can be pointed out. (Thomas vs. Gay, 169 U. S., 264; 18
Sup. Ct. Rep., 340; 43 Law. ed., 740.) While courts will not
enlarge, by construction, the government's power of taxation
(Bromley vs. McCaughn, 280 U. S., 124; 74 Law. ed., 226;
50 Sup. Ct. Rep., 46) they also will not place upon tax laws
so loose a construction as to permit evasions on merely
fanciful and insubstantial distictions. (U. S. vs. Watts, 1
Bond., 580; Fed. Cas. No. 16,653; U. S. vs. Wigglesirth, 2
Story, 369; Fed. Cas. No. 16,690, followed in Froelich &
Kuttner vs. Collector of Customs, 18 Phil., 461, 481; Castle
Bros., Wolf & Sons vs. McCoy, 21 Phil., 300; Muoz & Co.
vs. Hord, 12 Phil., 624; Hongkong & Shanghai Banking
Corporation vs. Rafferty, 39 Phil., 145; Luzon Stevedoring
Co. vs. Trinidad, 43 Phil., 803.) When proper, a tax statute
should be construed to avoid the possibilities of tax evasion.
Construed this way, the statute, without resulting in injustice
to the taxpayer, becomes fair to the government.
That taxes must be collected promptly is a policy deeply
intrenched in our tax system. Thus, no court is allowed to
grant injunction to restrain the collection of any internal
revenue tax ( sec. 1578, Revised Administrative Code;

Sarasola vs. Trinidad, 40 Phil., 252). In the case of Lim Co
Chui vs. Posadas (47 Phil., 461), this court had occassion to
demonstrate trenchment adherence to this policy of the law.
It held that "the fact that on account of riots directed against
the Chinese on October 18, 19, and 20, 1924, they were
prevented from praying their internal revenue taxes on time
and by mutual agreement closed their homes and stores and
remained therein, does not authorize the Collector of Internal
Revenue to extend the time prescribed for the payment of
the taxes or to accept them without the additional penalty of
twenty five per cent." (Syllabus, No. 3.)
". . . It is of the utmost importance," said the Supreme Court
of the United States, ". . . that the modes adopted to enforce
the taxes levied should be interfered with as little as
possible. Any delay in the proceedings of the officers, upon
whom the duty is developed of collecting the taxes, may
derange the operations of government, and thereby, cause
serious detriment to the public." (Dows vs. Chicago, 11 Wall.,
108; 20 Law. ed., 65, 66; Churchill and Tait vs. Rafferty, 32
Phil., 580.)
It results that the estate which plaintiff represents has been
delinquent in the payment of inheritance tax and, therefore,
liable for the payment of interest and surcharge provided by
law in such cases.
The delinquency in payment occurred on March 10, 1924,
the date when Moore became trustee. The interest due
should be computed from that date and it is error on the part
of the defendant to compute it one month later. The
provisions cases is mandatory (see and cf. Lim Co Chui vs.
Posadas, supra), and neither the Collector of Internal
Revenuen or this court may remit or decrease such interest,
no matter how heavily it may burden the taxpayer.
To the tax and interest due and unpaid within ten days after
the date of notice and demand thereof by the Collector of
Internal Revenue, a surcharge of twenty-five per centum
should be added (sec. 1544, subsec. (b), par. 2, Revised
Administrative Code). Demand was made by the Deputy
Collector of Internal Revenue upon Moore in a communiction
dated October 16, 1931 (Exhibit 29). The date fixed for the
payment of the tax and interest was November 30, 1931.
November 30 being an official holiday, the tenth day fell on
December 1, 1931. As the tax and interest due were not paid
on that date, the estate became liable for the payment of the
surcharge.
In view of the foregoing, it becomes unnecessary for us to
discuss the fifth error assigned by the plaintiff in his brief.
We shall now compute the tax, together with the interest and
surcharge due from the estate of Thomas Hanley
inaccordance with the conclusions we have reached.
At the time of his death, the deceased left real properties
valued at P27,920 and personal properties worth P1,465, or
a total of P29,385. Deducting from this amount the sum of

P480.81, representing allowable deductions under secftion
1539 of the Revised Administrative Code, we have
P28,904.19 as the net value of the estate subject to
inheritance tax.
The primary tax, according to section 1536, subsection (c),
of the Revised Administrative Code, should be imposed at
the rate of one per centum upon the first ten thousand pesos
and two per centum upon the amount by which the share
exceed thirty thousand pesos, plus an additional two
hundred per centum. One per centum of ten thousand pesos
is P100. Two per centum of P18,904.19 is P378.08. Adding
to these two sums an additional two hundred per centum, or
P965.16, we have as primary tax, correctly computed by the
defendant, the sum of P1,434.24.
To the primary tax thus computed should be added the sums
collectible under section 1544 of the Revised Administrative
Code. First should be added P1,465.31 which stands for
interest at the rate of twelve per centum per annum from
March 10, 1924, the date of delinquency, to September 15,
1932, the date of payment under protest, a period covering 8

years, 6 months and 5 days. To the tax and interest thus
computed should be added the sum of P724.88,
representing a surhcarge of 25 per cent on both the tax and
interest, and also P10, the compromise sum fixed by the
defendant (Exh. 29), giving a grand total of P3,634.43.
As the plaintiff has already paid the sum of P2,052.74, only
the sums of P1,581.69 is legally due from the estate. This
last sum is P390.42 more than the amount demanded by the
defendant in his counterclaim. But, as we cannot give the
defendant more than what he claims, we must hold that the
plaintiff is liable only in the sum of P1,191.27 the amount
stated in the counterclaim.
The judgment of the lower court is accordingly modified, with
costs against the plaintiff in both instances. So ordered.

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WILLS and SUCCESSION (Atty.

February 15, 1982

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA

ABAD SANTOS, J.:

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 2

Scaevola Maura, and Traviesas construe "degree" as

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 3

December 14, 1955

ANTONINA CUEVAS, plaintiff-appellant,

On September 18, 1950, Antonina Cuevas executed a

The question to be decided is whetehr the donor intended to

"Subsequently, on May 26, 1952, the donor executed

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

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 4

as she lived. During that time, she suffered no diminution of

December 14, 1955

ANTONINA CUEVAS, plaintiff-appellant,

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

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 5

ART. 828. A will may be revoked by the testator at any time

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 6

MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and

Cabatingan, a portion of the Masbate property (80,000 sq.

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 7

confirmed the donations as mortis causa in the following

"THE LOWER COURT PALPABLY DISREGARDED THE

"SIGNED by the above-named DONOR and DONEE at the

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 8

April 24, 2003

URSULINA GANUELAS, METODIO GANUELAS and

CARPIO MORALES, J.:

That, for and in consideration of the love and affection which

On June 10, 1967, Celestina executed a document

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 9

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 10

3. That the transfer should be void if the transferor should

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 11

GONZALO VILLANUEVA, represented by his heirs,

As the subject deed then is in the nature of a mortis causa

As noted by the trial court, the attesting witnesses failed to

This resolves the petition for review1 of the ruling2 of the

Art. 806. Every will must be acknowledged before a notary

VILLANUEVA v. SPS. BRANOCO

January 24, 2011

That as we live[d] together as husband and wife with Juan

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 12

Rodrigos death but her "love and affection" for Rodriguez,

That I EUFRACIA RODRIGUEZ, hereby accept the land

Ruling of the Court of Appeals

The threshold question is whether petitioners title over the

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 13

[the donees] right," also stipulated that the donation "does

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 14

Petitioner brings to the Courts attention facts which,

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 15

1. Ramona will make a down payment of Fifty Thousand

On the same date (January 15, 1985), plaintiff-appellee

WILLS and SUCCESSION (Atty. Lielanie Yangyang-Espejo) 16

The fact that they were allowed to file memoranda at some

Quezon City, Philippines, July 12, 1989.

Macabebe, Pampanga for Quezon City, March 1, 1989.

(Rollo, pp. 108-109)

Petitioners thereupon interposed an appeal, but on

A motion for reconsideration was filed by petitioner before