SUCCESSION CASES

MARIA USON, plaintiff-appellee, vs.MARIA DEL ROSARIO, CONCEPCION NEBREDA,

CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr.,
defendants-appellants.
G.R. No. L-4963, January 29, 1953
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-4963

January 29, 1953

MARIA USON, plaintiff-appellee,

vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA, DOMINADOR
NEBREDA, AND FAUSTINO NEBREDA, Jr., defendants-appellants.
Priscilo Evangelista for appellee.
Brigido G. Estrada for appellant.
BAUTISTA ANGELO, J.:
This is an action for recovery of the ownership and possession of five (5) parcels of land situated in
the Municipality of Labrador, Province of Pangasinan, filed by Maria Uson against Maria del Rosario
and her four children named Concepcion, Conrado, Dominador, and Faustino, surnamed Nebreda,
who are all of minor age, before the Court of First Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands
involved in this litigation. Faustino Nebreda left no other heir except his widow Maria Uson. However,
plaintiff claims that when Faustino Nebreda died in 1945, his common-law wife Maria del Rosario
took possession illegally of said lands thus depriving her of their possession and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson and
her husband, the late Faustino Nebreda, executed a public document whereby they agreed to
separate as husband and wife and, in consideration of their separation, Maria Uson was given a
parcel of land by way of alimony and in return she renounced her right to inherit any other property
that may be left by her husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the court rendered decision
ordering the defendants to restore to the plaintiff the ownership and possession of the lands in
dispute without special pronouncement as to costs. Defendants interposed the present appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda, former
owner of the five parcels of lands litigated in the present case. There is likewise no dispute that
Maria del Rosario, one of the defendants-appellants, was merely a common-law wife of the late
Faustino Nebreda with whom she had four illegitimate children, her now co-defendants. It likewise
appears that Faustino Nebreda died in 1945 much prior to the effectivity of the new Civil Code. With

this background, it is evident that when Faustino Nebreda died in 1945 the five parcels of land he
was seized of at the time passed from the moment of his death to his only heir, his widow Maria
Uson (Article 657, old Civil Code).As this Court aptly said, "The property belongs to the heirs at the
moment of the death of the ancestor as completely as if the ancestor had executed and delivered to
them a deed for the same before his death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that
moment, therefore, the rights of inheritance of Maria Uson over the lands in question became
vested.
The claim of the defendants that Maria Uson had relinquished her right over the lands in question
because she expressly renounced to inherit any future property that her husband may acquire and
leave upon his death in the deed of separation they had entered into on February 21, 1931, cannot
be entertained for the simple reason that future inheritance cannot be the subject of a contract nor
can it be renounced (1 Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio
and Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are illegitimate children of
the late Faustino Nebreda and under the old Civil Code are not entitled to any successional rights,
however, under the new Civil Code which became in force in June, 1950, they are given the status
and rights of natural children and are entitled to the successional rights which the law accords to the
latter (article 2264 and article 287, new Civil Code), and because these successional rights were
declared for the first time in the new code, they shall be given retroactive effect even though the
event which gave rise to them may have occurred under the prior legislation (Article 2253, new Civil
Code).
There is no merit in this claim. Article 2253 above referred to provides indeed that rights which are
declared for the first time shall have retroactive effect even though the event which gave rise to them
may have occurred under the former legislation, but this is so only when the new rights do not
prejudice any vested or acquired right of the same origin. Thus, said article provides that "if a right
should be declared for the first time in this Code, it shall be effective at once, even though the act or
event which gives rise thereto may have been done or may have occurred under the prior legislation,
provided said new right does not prejudice or impair any vested or acquired right, of the same
origin." As already stated in the early part of this decision, the right of ownership of Maria Uson over
the lands in question became vested in 1945 upon the death of her late husband and this is so
because of the imperative provision of the law which commands that the rights to succession are
transmitted from the moment of death (Article 657, old Civil Code). The new right recognized by the
new Civil Code in favor of the illegitimate children of the deceased cannot, therefore, be asserted to
the impairment of the vested right of Maria Uson over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was lying in state, in a gesture of
pity or compassion, agreed to assign the lands in question to the minor children for the reason that
they were acquired while the deceased was living with their mother and Maria Uson wanted to
assuage somewhat the wrong she has done to them, this much can be said; apart from the fact that
this claim is disputed, we are of the opinion that said assignment, if any, partakes of the nature of a
donation of real property, inasmuch as it involves no material consideration, and in order that it may
be valid it shall be made in a public document and must be accepted either in the same document or
in a separate one (Article 633, old Civil Code). Inasmuch as this essential formality has not been
followed, it results that the alleged assignment or donation has no valid effect.
WHEREFORE, the decision appealed from is affirmed, without costs.
Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and Labrador, JJ., concur.

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C.

GONZALES (for herself and on behalf of Florida C. Tupper, as attorney-in-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.
G.R. No. 103577. October 7, 1996

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 Floraida C. Tupper, as attorney-in-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.
DECISION
MELO, J.:

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

50,000.00 - 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:
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.
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 a 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 thereto, 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 plaintiffs are ordered to pay defendants the whole balance of the
purchase price amounting toP1,190,000.00 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
attorneys fees, as well as the counterclaims of defendants and intervenors are hereby
dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners 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. 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 cases submitted to him for decision or resolution because he continued as
Judge of the Regional Trial Court and is of co-equal 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.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991,
the Court of Appeals (Buena, Gonzaga-Reyes, Abad-Santos (P), JJ.)
rendered its decision fully agreeing with the trial court.
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 courts 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 the
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 of absolute sale.
Plainly, such variance in the contending parties contention 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 explicitly 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 his 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 nonfulfillment 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 sellers 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 of 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-sellers title per se, but the
latter, of course, may be sued 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 sellers title thereto. In fact, if there had been previous delivery of the
subject property, the sellers 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 sellers 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 buyers 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 petitioners 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 property 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 change 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 ownership of the subject house and lot to the
buyer if the documents were then in order. It just so 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 ones 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 Romulo 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 that 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 that 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 above-stated". 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 have 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 to the suspensive condition
that the sellers shall effect the issuance of new certificate title from that of their
fathers 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 obligations 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 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.
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 decedents
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 breach 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 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 petitioners-sellers act of
unilaterally and extrajudicially rescinding the contract of sale, there being no
express stipulation authorizing the sellers to extrajudicially 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, Ramonas 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 Concepcions 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. Ramonas
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
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 it be immovable property, the ownership shall belong to the person acquiring it
who in good faith first recorded it in the 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 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 buyers
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 was 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).
Petitioners point out that the notice of lis pendens in the case at bar was
annotated 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 a 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 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 the 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 previous 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.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., and Francisco, JJ., concur.
Panganiban, J., no part.
ISIDORO M. MERCADO, plaintiff-appellee,
vs.
LEON C. VIARDO and PROVINCIAL SHERIFF OF NUEVA ECIJA, defendants-appellants.
G.R. No. L-14127, August 21, 1962

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14127

August 21, 1962

ISIDORO M. MERCADO, plaintiff-appellee,

vs.
LEON C. VIARDO and PROVINCIAL SHERIFF
OF NUEVA ECIJA, defendants-appellants.
----------------------------G.R. No. L-14128

August 21, 1962

LEON C. VIARDO, plaintiff-appellant,

vs.
PILAR BELMONTE, PATRICIA DRIZ,
JOAQUINA DRIZ, ISIDORO MERCADO,
TRINIDAD ISIDRO, ZACARIAS BELMONTE,
TERESITA FLORES,
PHILIPPINE AMERICAN GENERAL
INSURANCE COMPANY, INC. and PHILIPPINE
NATIONAL BANK,defendants-appellees.
No. L-14127:
Agustin C. Bagasao for plaintiff-appellee.
Manuel A. Concordia for defendants-appellants.
No. L-14128:
Manuel A. Concordia for plaintiff-appellant.
E. A. Bello, M. Y. Macias and A. A. Reyes for
defendant-appellee Philippine American General
Insurance Company, Inc.

Cecilio F. Wycoco for defendants-appellees Pilar

Belmonte and Teresita Flores.
Carlos M. Ferrer for defendants-appellees Patricia
Driz, et al.
PADILLA, J.:
In civil case No. 7611 of the Court of First
Instance of Nueva Ecija, entitled Leon C. Viardo
vs. Bartolome Driz and Pilar Belmonte, a writ of
execution was issued and levy was made "upon
all the rights, interest and participation which the
spouses Bartolome Driz and Pilar Belmonte have
or might have" in a parcel of land covered by
original certificate of title No. 3484 of the Registrar
of Deeds in and for the province of Nueva Ecija
(Exhibit A, p.3). This certificate of title covers a
parcel of land (Lot No. 1, Psu-14371) in the
barrios of Nieves and Santo Rosario, municipality
of Zaragoza, province of Nueva Ecija, containing
an area of 1,192,775 square meters, more or less.
The land is registered in the names of "Leonor
Belmonte, Felisa Belmonte, Pilar Belmonte and
Ines de Guzman, subject . . . to the condition that
share [that] belongs to Ines de Guzman is
usufructuary "correspondiendo la nuda propiedad
a sus tres hijas arriba citadas en participaciones

iguales quienes se consolidara el dominio

despues del fallecimiento de su madre' " (Exhibit
A, p. 2).
On 25 February 1941, by virtue of the writ of
execution above mentioned, the provincial sheriff
of Nueva Ecija sold at public auction one-half ()
of the following property:
TAX DECLARATION NO. 11313 OF THE
MUNICIPALITY OF ZARAGOZA, PROVINCE OF
NUEVA ECIJA AND COVERED BY ORIGINAL
CERTIFICATE OF TITLE NO. 3484 OF THE
LAND RECORDS OF NUEVA ECIJA.
A parcel of land, situated in the sitio of Valdez,
barrio Sto. Rosario, municipality of Zaragoza,
Province of Nueva Ecija. Bounded on the
North by property of Felisa Belmonte; on the
East by Sapang Dalagot; on the Southeast by
Ines de Guzman; on the South by the property
of Felisa Belmonte; and on then West by the
property of Cirilo Acosta; containing an area of
THIRTY (30) HECTARES, more or less.
Declared under tax No. 11313 in the name of
Pilar Belmonte with an assessed value of
P8,400.00.

The highest bidder at the auction sale was the

judgment creditor, Leon C. Viardo, who paid
P2,125.64 for the interest sold and P83.15 for the
land tax corresponding to such interest (Exhibit
B). When the judgment debtors failed to redeem
the property within the statutory period of one
year from the date of sale (21 February 1941), the
provincial sheriff of Nueva Ecija executed on 12
May 1943 a Final Bill of Sale of the property
described in Exhibit B in favor of Leon C. Viardo
(Exhibit C). On 3 May 1943 a co-owner's copy of
the certificate of title was issued to Leon C. Viardo
(Exhibit A, p. 3).
On 28 December 1945 the Court of First Instance
of Nueva Ecija, in Land Registration Case No.
918, G.L.R.O. Record No. 17910, acting upon a
verified petition of Leon C. Viardo, ordered the
Registrar of Deeds in and for Nueva Ecija
to cancel Original Certificate of Title No. 3484
and to issue another in lieu thereof in the
name of and in the proportion as follows:
LEONOR BELMONTE share; FELISA
BELMONTE, share; PILAR BELMONTE, /

share; LEON C. VIARDO, /8 share; and INES DE GUZMAN, share, upon the payment of the corresponding fees (Exhibit D).

However, it appears from Original Certificate of

Title No. 3484 (Exhibit A) that the abovementioned order was not carried out and that said
original certificate of title was not cancelled.
On 27 May 1946 Bartolome Driz and Pilar
Belmonte filed in the Court of First Instance of
Nueva Ecija a complaint against Leon C. Viardo
(civil case No. 161) praying that judgment be
rendered against the defendant:
(a) Ordering the defendant to reconvey the
property in question in favor of plaintiffs herein
upon payment by the latter of the lawful
redemption price in accordance with law, or
the sum of P2,125.64 with interest at the rate
of one per centum (1%) per month for twelve
(12) months from February 27, 1941 to
February 27, 1942. (Exhibit E.)
On 4 June 1946 Patricia Blando, attorney for the
plaintiffs Bartolome Driz and Pilar Belmonte,
requested the Registrar of Deeds in and for
Nueva Ecija for
the annotation of a Notice of LIS PENDENS
on the back of ORIGINAL CERTIFICATE OF
TITLE NO. 3484 of the Office of the Register

of Deeds for the Province of Nueva Ecija,

affecting the undivided one-half () portion of
the property of the plaintiffs in the aboveentitled cause, situated in the Sitio of Valdez,
Barrio of Sto. Rosario, Municipality of
Zaragoza, which is involved in the said
controversy against the defendant LEON C.
VIARDO, and which is more particularly
described under paragraph (4) of the plaintiffs'
complaint a copy of which is hereby
presented, hereunto attached. (Exhibit F.)
On 6 June 1946 the Registrar of Deeds made the
following annotation on the back of original
certificate of title No. 3484:
Entry No. 3347/0-3484: Kind Lis Pendens
Executed in favor of Bartolome Driz and
Pilar Belmonte; Conditions Al the rights,
interests, and participation of Leon C. Viardo
in this title is the subject of a complaint filed in
Civil Case No. 16 of the C.F.I. of N.E. now
pending for action. Date of the instrument
June 4, 1946; Date of the inscription June
6, 1946 at 3:18 (?) p.m. (Sgd.) F.C. Cuizon,
Acting Register of Deeds. (Exhibit A, p. 3.)

While the above-mentioned case was pending in

the Court of First Instance of Nueva Ecija, Pilar
Belmonte, one of the plaintiffs, entered into the
following contracts involving her interest or rights
over the parcel of land covered by original
certificate of title No. 3484:
(1) Entry No. 10984: Kind Sale; Executed
in favor of Isidro M. Mercado & Trinidad
Isidro; Conditions--Pilar Belmonte sold a
portion of Seven and One-Half (7-) hectares
of the property described in this title for the
sum of P5,500.00 (D-126: P-90: B-11: S-1948,
Herminio E. Algas, N. E.) Date of the Inst.
June 28, 1948 at 1:30 p.m. (Sgd.) F.C.
CUIZON, Register of Deeds.
(2) Entry No. 10985/0-3484: Kind Sale with
right of repurchase: Executed in favor of
Federico Aquino; Conditions Pilar Belmonte
sold with a right of repurchase seven and onehalf (7-) hectares of her share, interest and
participation in this title for the sum of
P3,600.00 (D-127: P-90: B-11: S-48. H. Algas,
N. E.) Date of the Inst. June 28, 1948; Date
of the Inscription June 28, 1948 at 1:30
p.m. (Sgd.) F. C. CUIZON, Register of Deeds.

(3) Entry No. 15110/0-3484: Kind Resale:

Executed in favor of Pilar Belmonte;
Conditions Federico Aquino resold his
share in this title consisting of 7- Has. for the
sum of P3,600.00 (D-63: P-15: B-6: S-1949,
Jose E. Castaeda, Manila) Date of the Inst.
March 8, 1958: Date of the Inscription
April 8, 1949 at 11:30 a.m. (Sgd.) F.C.
CUIZON, Register of Deeds.
(4) Entry No. 15111/0-3484: Kind Sale;
Executed in favor of Dominador Asuncion
and Tomasita Dansil: Pilar Belmonte sold a
portion of seven (7) Has. of her share and
participation in this title for the sum of
P7,000.00. (D-64: P-15: B-6: S-1949, J. E.
Castaeda, Manila) Date of the Inst. March
9, 1949; Date of the Inscription April 8,
1949 at 11:30 a.m. (Sgd.) F.C. CUIZON,
Register of Deeds. (Exhibit A, p. 4)
On 11 April 1950 the Court of First Instance of
Nueva Ecija rendered judgment in civil case No.
161, as follows:
IN VIEW OF THE FOREGOING, the Court
absolves the defendant from the complaint of the
plaintiffs, in the same manner that plaintiffs are

absolved from the counter complaint of the

defendant. Defendant is the legal owner of the
land in question and the right of redemption of the
plaintiff of said land had already elapsed. With
costs to the plaintiff. (Exhibit G.)
Not satisfied with the judgment dismissing his
counter-claim, the defendant Leon C. Viardo
appealed to the Court of Appeals. While the
appeal was pending, the following transactions
involving the interest or rights of Pilar Belmonte
over the parcel of land covered by original
certificate of title No. 3484 took place:
(1) Entry No. 7967/NT-15162: Kind
Partition: Executed in favor of Felisa
Belmonte, et al.; Conditions By virtue of a
deed of partition, the share of the deceased
Ines de Guzman and Isidro Belmonte has
been adjudicated in favor of the heirs of said
deceased. (D-891: P-77: B-V: S-1948, Manuel
E. Castaeda, Manila) Date of the Inst.
March 31, 1948: Date of the Inscription
Feb. 18, 1954 at 10:18 a.m. (Sgd.) F.C.
CUIZON, Register of Deeds.
(2) Entry No. 7968/NT-15162: Kind
Agreement: Executed in favor of Felisa

Belmonte, et al; Conditions By virtue of an

agreement of the parties concerned in the
partition, Lots Nos. 1-D and 1-J, with an area
of 300,000 sq. m. and 80,000 sq.m., more or
less, respectively in the subdivision plan Psd36340, a portion of lot 1 described on plan
Psu-14371, of this title, have been adjudicated
in favor of Felisa Belmonte and Lot 1-G with
an area of 75,000 sq.m., more or less, of the
same subdivision, has been adjudicated in
favor of Isidoro Mercado, See TCT No. 15162
and 15163, Vol. No. 76. (D-211: P-44: B-IV: S1952, P. Bautista, Cab. City) Date of the Inst.
Jan. 22, 1952: Date of the Inscription
Feb. 18, 1954 at 10:18 a.m.(Sgd.) F.C.
CUIZON, Register of Deeds.
(3) Entry No. 9715/NT-15746: Kind Sale;
Executed in favor of Sp. Zacarias Belmonte
and Teresita Flores; Conditions Dominador
Asuncion and Tomasita Dansil sold all their
rights and interest in this title consisting of
seven hectares for the sum of P6,000.00. (D177: P-37: B-IV: S-1952; R. S. Pengson, N.E.)
Date of the Inst. Feb. 4, 1952; Date of
Inscription May 13, 1954 at 10:08 a.m.
(Sgd.) F.C. CUIZON, Register of Deeds.

(4) Entry No. 12168/NT-15162: Kind

Project of Partition Executed in favor of
Pilar Belmonte; Conditions By virtue of a
project of partition re-estate of the late Ines de
Guzman, a portion of 13.2775 hectares of the
land described in this title has been
adjudicated in favor of Pilar Belmonte. (D-891:
P-77: B-V: S-1948, Manuel E. Castaeda,
Manila) Date of the Inst. March 31, 1948:
Date of the Inscription Aug. 23, 1954 at
2:00 p.m. (Sgd.) F.C. CUIZON, Register of
Deeds.
1wph1.t

(5) Entry No. 12169/NT-16440: Kind Sale;

Executed in favor of Joaquin Driz:
Conditions Pilar Belmonte sold Lot 1-B of
the subdivision plan of this title Psd-36340 a
portion taken from her undivided 13.2775
hectares with an area of 52,775 sq.m., more
or less, for the sum of P800.00. See TCT NT16440, Vol. No. 83. (D-160: P-33: B-I: S-1954,
Adolfo San Juan, Cab. City) Date of the Inst.
Aug. 23, 1954; Date of the Inscription
Aug. 23, 1954 at 2:00 p.m. (Sgd.) F.C.
CUIZON, Register of Deeds.

(6) Entry No. 12370/NT-16488: Kind Sale;

Executed in favor of Patricia Driz:
Conditions Pilar Belmonte sold Lot 1-A of
the subdivision plan Psd-36340 being a
portion of Lot 1 described in plan Psu-14371,
G.L.R.O. Cad. Record No. 17910, of this title
for the sum of P1,000.00 with an area of
80,000 sq.m., with respect to her share of
13.2775 hectares. See TCT No. NT-16488,
Vol. 83. (D-440: P-90: B-V: S-1954, H. V.
Garcia, Cab. City) Date of the Inst. Aug. 31,
1954: Date of the Inscription Sept. 2, 1954
at 8:00 p.m. (Sgd.) F.C. CUIZON, Register of
Deeds.
(7) Entry No. 12512/NT-16546: Kind Sale;
Executed in favor of Patricia Driz:
Conditions Pilar Belmonte sold Lots Nos. 1H and 1-I of the subdivision plan Psd-30340 of
the property described in this title for the sum
of P850.00. See TCT No. NT-16524, Vol. 83.
(D-167: P-35: B-I: S-1954, Adolfo San Juan,
Cab. City) Date of the Inst. Sept. 9, 1954;
Date of the Inscription Sept. 9, 1954 at
11:50 a.m. (Sgd.) F. C. CUIZON, Register of
Deeds.

(8) Entry No. 12569/NT-16546: Kind Sale;

Executed favor of Patricia Driz; Conditions
Pilar Belmonte sold Lot I-E of the
subdivision plan Psd-30340 of the property
described in this title, with an area of 79,848
sq.m., more or less the subdivision plan of this
title, was sold for the sum of P2,000.00. See
TCT No. NT-16546, Vol. 83. (D-172: P-36: BS1954, Adolfo San Juan, Cab. City) Date of the
Inst. Sept. 11, 1954; Date of the Inscription
Sept. 13, 1954 at 8:20 am. (Sgd.) F.C.
CUIZON, Register of Deeds. (Exhibit A, pp. 45.)
On 22 September 1954, a few days after the last
transactions mentioned above, the Court of
Appeals passed a resolution granting the prayer
of defendant-appellant Leon C. Viardo that the
children and only heirs, namely, Artemio, Patricia,
Mario, Domingo, Joaquina and Catalina,
surnamed Driz, who were all of age, be
substituted for the deceased appellee Bartolome
Driz (the husband of Pilar Belmonte). (Exhibit H1).
On 25 September 1954 the Court of Appeals
rendered judgment awarding damages prayed for

in the counterclaim of Leon V. Viardo. The

judgment made the following findings and
conclusions:
. . . The area of the contested property is 15
hectares. By computation, this is capable of
producing 750 cavans of palay a year. On the
basis of 70-30, defendant is entitled to 225
cavans of palay a year. Therefore, plaintiffs
are under obligation to deliver to defendant
this quantity of palay every agricultural year
from the filing of defendant's answer on
August 5, 1946, up to the time he vacates
said land, or pay the equivalent value thereof
at P12.00 a cavan.
Having been declared owner of the land in
dispute, defendant is entitled to its
possession. Inasmuch as the court below did
not order plaintiffs to restore the possession of
the land in question, we hereby order them to
vacate the same and restore possession
thereof to defendant. (Exhibit H.)
This judgment of the Court of Appeals became
final and executory and the records were
remanded to the lower court. On 16 December
1954 the Court of First Instance of Nueva Ecija

issued a writ of execution (Exhibit W). The return

made by Chief of Police of the Municipality of
Zaragoza on 14 February 1955 states that Leon
C. Viardo had been placed in possession of the
parcel of land referred to in the writ and that levy
was made on a total of 86 cavans and 74 kilos of
palay, and that the same were deposited in a
warehouse (Exhibit X).
On or about 4 January 1955 Isidoro M. Mercado
filed a third party claim with the Provincial Sheriff
of Nueva Ecija (Exhibit Y). The affidavit attached
to the claim states that Isidoro M. Mercado and
his wife purchased from Pilar Belmonte on 28
June 1948 seven and one-half hectares of her
undivided share in the land described in original
certificate of title No. 3484, that on the same day
the deed of sale was registered, that a transfer
certificate of title was issued in their names, and
that since 1948 up to the time of the levy on
execution he had been in actual possession of the
parcel of land, paying the corresponding taxes
thereon and had exclusively benefited from the
harvests therein, (Exhibit Y-1). The sheriff was
requested not to continue with the levy on the
harvest in the parcel of land they were claiming.

On 2 February 1955 Isidoro M. Mercado filed in

the Court of First Instance of Nueva Ecija a
complaint docketed as civil case No. 1718,
against Leon C. Viardo and the Provincial Sheriff.
The complaint alleged that improper levy had
been made on the harvest in plaintiff's parcel of
land and prayed that judgment be rendered
ordering the defendants to return the palay levied
upon, together with damages. On 26 February
1955 the defendants answered that plaintiffs'
purchase of the parcel of land in question from
Pilar Belmonte was subject to whatever judgment
the courts might render in civil case No. 161
between Pilar Belmonte and Leon C. Viardo. On
17 October 1955 the Court of First Instance of
Nueva Ecija entered an order suspending the trial
of the case, in view of the information by counsel
for the defendant that his client Leon C. Viardo
would file a complaint against all persons claiming
ownership of or interest in the parcel of land
covered by original certificate of title No. 3484
(Record on Appeal, pp. 2-11).
On 5 December 1955 civil case No. 2004 was
filed by Leon V. Viardo against Pilar Belmonte,
Patricia Driz, Joaquina Driz, Isidoro Mercado,
Trinidad Isidro, Zacarias Belmonte, Teresita

Flores, Philippine American General Insurance

Co., Inc. and the Philippine National Bank, as
parties claiming some right, participation, share or
interest in the parcel of land covered by original
certificate of title No. 3484 or by trader certificates
of title derived therefrom. The defendants filed
their answers. After trial,1 on 24 August 1956 the
trial court rendered judgment in civil cases Nos.
1718 and 2004, the dispositive part of which
reads as follows:
IN VIEW OF THE FOREGOING
CONSIDERATIONS, in Civil Case 2004, Leon
C. Viardo, Isidoro M. Mercado, Zacarias
Belmonte and Patricia Driz are hereby
declared CO-OWNERS PRO-INDIVISO of lots
1-A PSD-16864, which is the share of Pilar
Belmonte in Lot 1, PSU 14371, OCT No. 3484
in the following proportions: ONE-HALF for
LEON C. VIARDO; 7 hectares for Isidoro M.
Mercado; 7 hectares for Zacarias Belmonte,
and the remainder for Patricia Driz, it being
understood that whatever is adjudicated to
Patricia Driz in the partition shall be subject to
the mortgage in favor of the Philippine
National Bank; the deeds of sale executed by
Pilar Belmonte in favor of Patricia Driz,

Exhibits R and S are declared NULL AND

VOID; the deeds of partition Exhibits L and N,
are set aside, and the certificates of title
issued in favor of Zacarias Belmonte, Isidoro
M. Mercado and Patricia Driz, Exhibits P, Q,
R-1 and S-1 are ordered cancelled. And in
civil case 1718 Isidoro M. Mercado is hereby
declared to be entitled to the products which
had been levied upon by the Provincial
Sheriff. No damages are awarded. The parties
in civil case 2004 shall come to an amicable
settlement with respect to the partition. Upon
their failure to arrive at an amicable
settlement, commissioner shall be appointed
by this Court in accordance with a law to
make the partition.
With costs against the defendants in both
cases.
Only Leon C. Viardo, plaintiff in civil case No.
2004 and defendant in civil case No. 1718,
appealed to the Court of Appeals. On 21 May
1958 the latter certified and forwarded the
appeals to this Court because the facts are not in
dispute and "the questions raised by appellant in
his brief are purely legal in nature."

In his first assignment of error the appellant

contends that the trial court "erred in not annulling
the sale executed by Pilar Belmonte to Isidoro M.
Mercado, marked as Exhibit I, and to Dominador
Asuncion and Teresita Bansil (Exhibit J) and the
sale by Dominador Asuncion to Zacarias
Belmonte and Teresita Flores in a Deed of Sale
marked Exhibit M." In support thereof he argues
that the three sales took place and were
registered after he had become the absolute
owner of an undivided one-half interest in the
parcel of land owned by Pilar Belmonte and after
notice of lis pendens had been recorded on the
title of Pilar Belmonte.
The argument is without merit. It is true that the
appellant became the absolute owner of an
undivided one-half interest in the undivided onefourth interest owned by Pilar Belmonte in the
parcel of land described in original certificate of
title No. 3484; that before Pilar Belmonte sold
parts of her undivided share in the parcel of land
to Isidoro M. Mercado and Dominador Asuncion
and the last in turn sold his part to Zacarias
Belmonte, there was notice of lis
pendens recorded on the certificate of title; and
that this notice is binding upon all who should

acquire an interest in the property subsequent to

the record of the lis pendens. The notice of lis
pendens (Exhibit A), however, was limited to onehalf interest acquired by Leon C. Viardo from Pilar
Belmonte. The other one-half undivided interest of
the latter was not in litigation and therefore the
trial court correctly held that Pilar Belmonte, as
the owner of this undivided one-half interest, had
a right to sell it and could convey absolute title
thereto or to parts thereof. Of course, the deeds of
sale executed by Pilar Belmonte appears to
convey definite or segregated parts of her
remaining interest in the parcel of land described
in original certificate of title No. 3484, which she
could not do, because this one-fourth in interest
had not yet been subdivided to show the interest
acquired by Leon C. Viardo, amounting to onehalf of the said one-fourth interest. This defect,
however, does not result in the nullity of the deeds
of sale she had executed relating to her remaining
interest of one-eighth. The sales were valid,
subject only to the condition that the interests
acquired by the vendees were limited to the parts
which might be assigned to them in the division
upon the termination of the co-ownership (Article
493, Civil Code).

In the second assignment of error the appellant

contends that the trial court "erred in not annulling
the sales executed by Pilar Belmonte in favor of
her daughters Joaquina and Patricia Driz of lots 1B and 1-A, Exhibits U and V of Plan PSD 36340."
Lots 1-B and 1-A of Plan PSD-36340 are taken,
not from the original one-fourth interest of Pilar
Belmonte in the parcel of land covered by original
certificate of title No. 3484, which interest was
levied upon and thereafter acquired by Leon C.
Viardo to the extent of one-half, but from another
one-fourth interest in the same parcel of land,
which belonged originally to Ines de Guzman, the
mother of Pilar Belmonte. This one-fourth interest
subsequently devolved upon Pilar Belmonte and
her two sisters. The three sisters partitioned this
one-fourth interest among themselves and lots 1A and 1-B were assigned to Pilar Belmonte who,
in turn, sold them to her daughters. These sales,
the appellant contends, are fictitious and in fraud
of his rights as creditor.
The only evidence adduced by the appellant in
support of this contention is that the sales were
made by the mother to her daughters. This is not
enough evidence to hold the sale fictitious and

fraudulent. There is no evidence whatsoever that

Pilar Belmonte, at the time she sold the lots, had
outstanding debts or was in an otherwise
embarrasing financial position. Even the credit of
Leon C. Viardo, the appellant, was established
only after the sales were executed, when the
Court of Appeals modified the judgment of the trial
court in civil case No. 161 by awarding damages
to him. There is no merit, therefore, in the second
assignment of error.
In the third assignment of error the appellant
contends that the trial court "erred in declaring
that the "product raised in the portion under the
occupancy of Isidoro Mercado, therefore, pertains
to him and was not subject to the levy or
execution in favor of Leon C. Viardo in Civil Case
No. 161." In support of this assignment the
appellant again harps on the fact that the time
Isidoro Mercado acquired an interest in the
property, there was notice of lis pendens, and
therefore Isidoro Mercado "is not a purchaser in
good faith."
This contention has been overruled in the first
assignment of error when the notice of lis
pendens (Exhibits A and F) was held to refer not

to the remaining one-eighth interest of Pilar

Belmonte in the parcel of land described in
original certificate of title No. 3484, but to the oneeighth interest which Leon C. Viardo had acquired
from Pilar Belmonte, and which the latter was
trying to recover from him in civil case No. 161. It
was Pilar Belmonte who caused the notice of lis
pendens to be recorded to subject "all the rights,
interests and participation of Leon C. Viardo in
this Title" to the result of the litigation in the
aforesaid civil case No. 161. Pilar Belmonte did
not thereby subject her remaining one-eighth
interest to the result of civil case No. 161 which
she had filed against Leon C. Viardo. If the latter
wanted to subject the remaining one-eighth
interest of Pilar Belmonte to the outcome of his
counterclaim in civil case No. 161, he should have
asked for it.
The view held by this Court in passing upon the
third assignment of error renders it unnecessary
for the Court to discuss the respective rights and
liabilities of co-owners when one co-owner,
without the knowledge and/or consent of the other
co-owners, plants or builds on the property owned
in common.

The appellant further contends that the trial court

erred "in concluding that the heirs of Bartolome
Driz could not be held personally liable for the
judgment rendered against the plaintiffs in Civil
Case No. 161 and therefore Lots 1-A and 1-B
cannot be subject to the payment of the judgment
in favor of Leon C. Viardo."
The only ground of appellant for this contention is
that the present owners of these lots are the
children of the spouses Pilar Belmonte and
Bartolome Driz, the plaintiffs in civil case No. 161,
and that, upon the death of Bartolome Driz during
the pendency of the appeal in civil case No. 161,
these children were substituted as parties. This
assignment of error is without merit. The
substitution of parties was made obviously
because the children of Bartolome Driz are his
legal heirs and therefore could properly represent
and protect whatever interest he had in the case
on appeal. But such a substitution did not and
cannot have the effect of making these substituted
parties personally liable for whatever judgment
might be rendered on the appeal against their
deceased father. Article 774 of the Civil Code
provides:

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. (Emphasis supplied.)
The trial court, therefore, correctly ruled that the
remedy of Leon C. Viardo, the creditor, was to
proceed against the estate of Bartolome Driz.
Moreover, it appears from the evidence that
Bartolome Driz was only a formal party to civil
case No. 161, the real party in interest being his
wife Pilar Belmonte. The subject matter in
litigation was Pilar Belmonte's interest in the
parcel of land described in original certificate of
title No. 3484, which appears to be paraphernal
property.
The appellant's fifth and last assignment of error
is that "the trial court erred in not awarding
damages to the plaintiff Leon C. Viardo in Civil
Case No. 2004." Obviously the appellant refers to
the prayer in his complaint that P5,000 be
awarded to him against Pilar Belmonte for
attorney's fees. He maintains that appellee Pilar
Belmonte had disposed of all her property with the

intent of avoiding payment of her liability or debt

to him.
A review of the record lends credence to the
appellant's claim. Appellee Pilar Belmonte had
one-fourth interest in a parcel of land containing
an area of 119.2775 hectares. On 12 May 1943
Leon C. Viardo acquired one-half interest of Pilar
Belmonte's one-fourth interest. In a partition,
where the appellant did not participate but which
he does not impugn, Pilar Belmonte's original
one-fourth interest was segregated and delimited.
She was assigned in that partition and
subdivision, Lot 1-A of Plan PSD-16864,
containing an area of 30 hectares (Exhibit K).
Upon the death of her mother, she acquired
another 13.2775 hectares. These 13.2775
hectares she sold to her two daughters and the
validity of the sales has been upheld by this
Court. With the original 30 hectares, however,
Pilar Belmonte did not act in good faith when she
sold more than 15 hectares to her daughter
Patricia Driz. Knowing that one-half of said 30
hectares or a total of 15 hectares belonged to the
appellant Leon C. Viardo, she nevertheless
proceeded to enter into the following transactions:
(1) sale of seven and one-half hectares to Isidoro

Mercado, dated 28 June 1948, Exhibit A; (2) sale

of seven hectares to Dominador Asuncion, who
later sold the same parcel or interest to Zacarias
Belmonte, dated 9 March 1949, Exhibit A; (3)
subdivision and partition of her lot 1-A, PSD16864, into lots 1-E, 1-F, 1-G, 1-H and 1-I, without
the knowledge of her co-owner Leon C. Viardo,
Plan PSD-36340, Exhibit O; (4) sale in favor of
her daughter Patricia Driz of lots 1-H and 1-I, Plan
PSD-36340, containing an area of 20,000 and
55,152 sq. meters, respectively, dated 9
September 1954, Exhibits R and A; and (5) sale in
favor of her daughter Patricia Driz of lot 1-E; Plan
PSD-36340, containing an area of 79,848 sq.
meters, dated 11 September 1954, Exhibits S and
A.
It will thus be seen that on 9 March 1949, after
Pilar Belmonte had sold seven hectares to
Dominador Asuncion, she had only one-half
hectare left to dispose of, since out of her original
thirty hectares (Lot 1-A, PSD-16864) the appellant
Leon C. Viardo had acquired one-half or fifteen
hectares, Isidoro Mercado, seven and one-half
hectares, and Dominador Asuncion, seven
hectares.

Fully aware that one-half hectare remained her

only property, Pilar Belmonte nevertheless
proceeded to sell to her daughter Patricia Driz
three lots containing a combined area of more
than fifteen hectares. It is obvious, therefore, that
the sales to Patricia Driz cannot be sustained,
regardless of whether Pilar Belmonte was aware
or suspected that she would be held liable for
damages to Leon C. Viardo in civil case No. 161,
as in fact she was held liable by the Court of
Appeals about two weeks after she had executed
the sales in favor of her daughter. The sales
above referred to stand on a different footing from
the sales made in favor of Isidoro Mercado and
Dominador Asuncion, because in the latter sales
Pilar Belmonte still had something to sell, namely,
her remaining fifteen hectares. But after she had
disposed of fourteen and one-half hectares to
Mercado and Asuncion she had only one-half
hectare left and therefore could not sell another
fifteen hectares.
The trial court, however, did not completely annul
the sales made by Pilar Belmonte in favor of her
daughter. It merely reduced the sale of fifteen
hectares to a sale of one-half hectare, obviously
in the belief that the sales should be sustained to

the extent of Pilar Belmonte's remaining interest.

The record shows that both Pilar Belmonte and
her daughter Patricia Driz knew that one-half
hectare only remained as the former's property,
but they nevertheless proceeded to sell and
purchase more than fifteen hectares. When it is
considered further that the final judgment in civil
case No. 161 awarded damages to Leon C.
Viardo amounting to 225 cavans of palay from
1946 (Exhibit H) and that when this judgment was
executed in 1954 no property of Pilar Belmonte
could be found to satisfy the damages (p. 11,
t.s.n.), it is evident that Pilar Belmonte and her
daughter Patricia Driz had conspired to dispose of
all the property of Pilar Belmonte in order to
frustrate any award of damages the Court of
Appeals might make in favor of Leon C. Viardo
and that this conspiracy must have taken place at
the latest on 9 September 1954 when Pilar
Belmonte proceeded to sell to her daughter
Patricia Driz parcels of land which no longer
belonged to her.
The judgment appealed from is modified by
holding and declaring that (1) Leon C. Viardo,
Isidoro M. Mercado, Zacarias Belmonte and Pilar
Belmonte (not Patricia Driz) are the co-owners

pro-indiviso of lot 1-A, Plan PSD-16864, which is

the one-fourth share of Pilar Belmonte in lot 1,
PSD-14371, original certificate of title No. 3484, in
the following proportion: one-half or fifteen
hectares owned by Leon C. Viardo, seven and
one-half hectares by Isidoro M. Mercado, seven
hectares by Zacarias Belmonte, and one-half
hectares by Pilar Belmonte, subject to the rights
of Leon C. Viardo to the balance of his judgment
credit against Pilar Belmonte; and (2) Leon C.
Viardo is awarded damages of P1,000 against
Pilar Belmonte. In all other respects, the judgment
appealed from is affirmed, with costs against
appellees Pilar Belmonte and Patricia Driz.
Bengzon, C.J., Bautista Angelo, Labrador,
Concepcion, Reyes, J.B.L., Barrera, Paredes,
Dizon, Regala and Makalintal, JJ., concur.
Footnotes
On 30 June 1956 the complaint against the
Philippine American General Insurance
Company. Inc. was dismissed because the
company no longer had any interest in the
parcel of and in dispute. It was made a
defendant because it was the mortgagee of a
1

part of the land. When the mortgage debt was

paid, it released the mortgage.
The Lawphil Project - Arellano Law Foundation

Intestate of the late AGUSTIN MONTILLA, SR.; PEDRO LITONJUA, a movant-appellant,

vs.
AGUSTIN B. MONTILLA, JR., administrator-appellee;
CLAUDIO MONTILLA, oppositor-appellee.
G.R. No. L-4170, January 31, 1952

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4170

January 31, 1952

Intestate of the late AGUSTIN MONTILLA, SR.; PEDRO LITONJUA, a movant-appellant,

vs.
AGUSTIN B. MONTILLA, JR., administrator-appellee;
CLAUDIO MONTILLA, oppositor-appellee.
Carlos Hilado and Jose V. Corua for the administrator.
Jose M. Estacion for movant. Gaudencio Occeo and Jose Ur. Carbonell for oppositor.
PARAS, C.J.:
In Civil Case No. 868 of the court of First Instance of Negros Occidental, Pedro L. Litonjua obtained
a judgment against Claudio Montilla for the payment of the sum of P4,000 with legal interest, plus
costs amounting to P39.00 In due time, a writ of execution was issued, but no property of Claudio
Montilla was found which could be levied upon.
On June 12, 1950 Pedro L. Litonjua filed in special Proceeding No 32 of the Court of First Instance
of Negros Occidental, Intestate Estate of Agustin Montilla, Sr., deceased, a motion praying that the
interest, property and participation of Claudio Montilla, one of the heirs of Agustin Montilla, Sr., in the
latter's intestate estate be sold and out of the proceed the judgment debt of Claudio Montilla in favor
of Pedro L. Litonjua be paid. This motion was opposed by Claudio Montilla and by Agustin Montilla,
Jr., administrator of the intestate estate.
On August 7, 1950, the Court of First Instance of Negros Occidental issued an order denying the
motion. From this order Pedro L. Litonjua appealed. In the case of Ortiga Brothers and Co. vs.
Enage and Yap Tico, 18 Phil. 345, it was held that the creditor of the heirs of a deceased person is
entitled to collect his claim out of the property which pertains by inheritance to said heirs, only after

the debts of the testate or intestate succession have been paid and when the net assets that are
divisible among the heirs are known, because the debts of the deceased must first be paid before
his heirs can inherit. It was therein also held that a person who is not a creditor of a deceased,
testate or intestate, has no right to intervene either in the proceedings brought in connection with the
estate or in the settlement of the succession. We quote hereunder pertinent passages of the
decision.
A person who, having claim against a deceased person which should be considered by the
committee does not, after publication of the required notice, exhibit his claim to the
committee as provided by law, shall be barred from recovering such demand or from
pleading the same as an offset to any action, under the provisions of section 695 of the Code
of Civil Procedure, excepting the case referred to in section 701 of the same; with still less
reason can one who is not a creditor of the said deceased intervene in the proceedings
relative to the latter's intestate estate and to the settlement of his succession (article 1034 of
the Civil Code), because such creditor has no right or interest that call for the protection of
the law and the courts, except in any remainder which may be found due the heir.
It is true that Yap Tico, as the creditor of the widow and heirs of the deceased Ildefonso, is
entitled to collect what is due him out of the property left by the latter and which was
inherited by such widow and heirs, but it is no less that only after all the debts of the said
estate have been paid can it be known what net remainder will be left for division among the
heirs, because the debts of the deceased must be paid before his heirs can inherit. (Arts.
659 et seq. 1026, 1027, and 1032 of the civil Code, and secs. 734 et seq., Code of Civil
Code Procedure.)
An execution cannot legally be levied upon the property of an intestate succession to pay the
debts of the widow and heirs of the deceased, until the credits held against the latter at the
time of his death shall have been paid can the remaining property that pertains to the said
debtors heirs can be attached (Art. 1034, aforecited, Civil Code.) (pp. 350-251)
The foregoing pronouncements are perfectly applicable to the case at bar, because the appellant is
not a creditor of the deceased Agustin Montilla, Sr. and he seeks to collect his claim out of the
inheritance of Claudio Montilla, an heir, before the net assets of the intestate estate have been
determined.
Wherefore, the appealed order is affirmed, and it is so ordered with costs against the appellant.
Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and Bautista Angelo, JJ., concur.

SOCORRO LEDESMA and ANA QUITCO LEDESMA, plaintiffs-appellees,

vs.
CONCHITA MCLACHLIN, ET AL., defendants-appellants.
G.R. No. L-44837, November 23, 1938
Republic of the Philippines
SUPREME COURT
Manila

EN BANC
G.R. No. L-44837

November 23, 1938

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:
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, well-founded.

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
propertiesinherited 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.
Avancea, C.J., Imperial, Diaz, Laurel and Concepcion, JJ., concur.

DKC HOLDINGS CORPORATION,petitioner,

vs.
COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR METRO
MANILA, DISTRICT III, respondents.
G.R. No. 118248, April 5, 2000

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 118248

April 5, 2000

DKC HOLDINGS CORPORATION,petitioner,

vs.
COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR METRO
MANILA, DISTRICT III, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari seeking the reversal of the December 5, 1994 Decision of
the Court of Appeals in CA-G.R. CV No. 40849 entitled "DKC Holdings Corporation vs. Victor U.
Bartolome, et al.",1 affirming in toto the January 4, 1993 Decision of the Regional Trial Court of
Valenzuela, Branch 172,2 which dismissed Civil Case No. 3337-V-90 and ordered petitioner to pay
P30,000.00 as attorney's fees.
The subject of the controversy is a 14,021 square meter parcel of land located in Malinta,
Valenzuela, Metro Manila which was originally owned by private respondent Victor U. Bartolome's
deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No. B-37615 of the
Register of Deeds of Metro Manila, District III. This lot was in front of one of the textile plants of
petitioner and, as such, was seen by the latter as a potential warehouse site.
On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion
Bartolome, whereby petitioner was given the option to lease or lease with purchase the subject land,
which option must be exercised within a period of two years counted from the signing of the
Contract. In turn, petitioner undertook to pay P3,000.00 a month as consideration for the reservation
of its option. Within the two-year period, petitioner shall serve formal written notice upon the lessor
Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case
petitioner chose to lease the property, it may take actual possession of the premises. In such an
event, the lease shall be for a period of six years, renewable for another six years, and the monthly
rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six years, in case of
renewal.
Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to Encarnacion until her
death in January 1990. Thereafter, petitioner coursed its payment to private respondent Victor
Bartolome, being the sole heir of Encarnacion. Victor, however, refused to accept these payments.
Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all the
properties of Encarnacion, including the subject lot. Accordingly, respondent Register of Deeds
cancelled Transfer Certificate of Title No. B-37615 and issued Transfer Certificate of Title No. V14249 in the name of Victor Bartolome.
On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was exercising its
option to lease the property, tendering the amount of P15,000.00 as rent for the month of March.
Again, Victor refused to accept the tendered rental fee and to surrender possession of the property
to petitioner.
Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking Corporation,
Cubao Branch, in the name of Victor Bartolome and deposited therein the P15,000.00 rental fee for
March as well as P6,000.00 reservation fees for the months of February and March.
Petitioner also tried to register and annotate the Contract on the title of Victor to the property.
Although respondent Register of Deeds accepted the required fees, he nevertheless refused to
register or annotate the same or even enter it in the day book or primary register.
1wphi1.nt

Thus, on April 23, 1990, petitioner filed a complaint for specific performance and damages against
Victor and the Register of Deeds,3 docketed as Civil Case No. 3337-V-90 which was raffled off to
Branch 171 of the Regional Trial Court of Valenzuela. Petitioner prayed for the surrender and
delivery of possession of the subject land in accordance with the Contract terms; the surrender of
title for registration and annotation thereon of the Contract; and the payment of P500,000.00 as
actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary damages and
P300,000.00 as attorney's fees.
Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss 4 was filed by one
Andres Lanozo, who claimed that he was and has been a tenant-tiller of the subject property, which
was agricultural riceland, for forty-five years. He questioned the jurisdiction of the lower court over
the property and invoked the Comprehensive Agrarian Reform Law to protect his rights that would
be affected by the dispute between the original parties to the case.
On May 18, 1990, the lower court issued an Order 5 referring the case to the Department of Agrarian
Reform for preliminary determination and certification as to whether it was proper for trial by said
court.
On July 4, 1990, the lower court issued another Order 6 referring the case to Branch 172 of the RTC
of Valenzuela which was designated to hear cases involving agrarian land, after the Department of
Agrarian Reform issued a letter-certification stating that referral to it for preliminary determination is
no longer required.
On July 16, 1990, the lower court issued an Order denying the Motion to Intervene, 7 holding that
Lanozo's rights may well be ventilated in another proceeding in due time.
After trial on the merits, the RTC of Valenzuela, Branch 172 rendered its Decision on January 4,
1993, dismissing the Complaint and ordering petitioner to pay Victor P30,000.00 as attorney's fees.
On appeal to the CA, the Decision was affirmed in toto.
Hence, the instant Petition assigning the following errors:
(A)
FIRST ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PROVISION ON
THE NOTICE TO EXERCISE OPTION WAS NOT TRANSMISSIBLE.
(B)
SECOND ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE NOTICE OF
OPTION MUST BE SERVED BY DKC UPON ENCARNACION BARTOLOME
PERSONALLY.
(C)
THIRD ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE CONTRACT

WAS ONE-SIDED AND ONEROUS IN FAVOR OF DKC.
(D)
FOURTH ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE EXISTENCE OF
A REGISTERED TENANCY WAS FATAL TO THE VALIDITY OF THE CONTRACT.
(E)
FIFTH ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PLAINTIFFAPPELLANT WAS LIABLE TO DEFENDANT-APPELLEE FOR ATTORNEY'S FEES.8
The issue to be resolved in this case is whether or not the Contract of Lease with Option to Buy
entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or
whether it binds her sole heir, Victor, even after her demise.
Both the lower court and the Court of Appeals held that the said contract was terminated upon the
death of Encarnacion Bartolome and did not bind Victor because he was not a party thereto.
Art. 1311 of the Civil Code provides, as follows
Art. 1311. Contracts take 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 he received from the decedent.
xxx

xxx

xxx

The general rule, therefore, is that heirs are bound by contracts entered into by their predecessorsin-interest except when the rights and obligations arising therefrom are not transmissible by (1) their
nature, (2) stipulation or (3) provision of law.
In the case at bar, there is neither contractual stipulation nor legal provision making the rights and
obligations under the contract intransmissible. More importantly, the nature of the rights and
obligations therein are, by their nature, transmissible.
The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as
follows:
Among contracts which are intransmissible are those which are purely personal, either by
provision of law, such as in cases of partnerships and agency, or by the very nature of the
obligations arising therefrom, such as those requiring special personal qualifications of the
obligor. It may also be stated that contracts for the payment of money debts are not
transmitted to the heirs of a party, but constitute a charge against his estate. Thus, where the
client in a contract for professional services of a lawyer died, leaving minor heirs, and the
lawyer, instead of presenting his claim for professional services under the contract to the

probate court, substituted the minors as parties for his client, it was held that the contract
could not be enforced against the minors; the lawyer was limited to a recovery on the basis
of quantum meruit.9
In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of special
knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal
qualification of one or both parties, the agreement is of a personal nature, and terminates on the
death of the party who is required to render such service." 10
It has also been held that a good measure for determining whether a contract terminates upon the
death of one of the parties is whether it is of such a character that it may be performed by the
promissor's personal representative. Contracts to perform personal acts which cannot be as well
performed by others are discharged by the death of the promissor. Conversely, where the service or
act is of such a character that it may as well be performed by another, or where the contract, by its
terms, shows that performance by others was contemplated, death does not terminate the contract
or excuse nonperformance. 11
In the case at bar, there is no personal act required from the late Encarnacion Bartolome. Rather, the
obligation of Encarnacion in the contract to deliver possession of the subject property to petitioner
upon the exercise by the latter of its option to lease the same may very well be performed by her heir
Victor.
As early as 1903, it was held that "(H)e who contracts does so for himself and his heirs." 12 In 1952, it
was ruled that if the predecessor was duty-bound to reconvey land to another, and at his death the
reconveyance had not been made, the heirs can be compelled to execute the proper deed for
reconveyance. This was grounded upon the principle that heirs cannot escape the legal
consequence of a transaction entered into by their predecessor-in-interest because they have
inherited the property subject to the liability affecting their common ancestor. 13
It is futile for Victor to insist that he is not a party to the contract because of the clear provision of
Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest
between him and his deceased mother. He only succeeds to what rights his mother had and what is
valid and binding against her is also valid and binding as against him. 14 This is clear
from Paraaque Kings Enterprises vs. Court of Appeals, 15 where this Court rejected a similar
defense
With respect to the contention of respondent Raymundo that he is not privy to the lease
contract, not being the lessor nor the lessee referred to therein, he could thus not have
violated its provisions, but he is nevertheless a proper party. Clearly, he stepped into the
shoes of the owner-lessor of the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he received benefits in the form
of rental payments. Furthermore, the complaint, as well as the petition, prayed for the
annulment of the sale of the properties to him. Both pleadings also alleged collusion between
him and respondent Santos which defeated the exercise by petitioner of its right of first
refusal.
In order then to accord complete relief to petitioner, respondent Raymundo was a necessary,
if not indispensable, party to the case. A favorable judgment for the petitioner will necessarily
affect the rights of respondent Raymundo as the buyer of the property over which petitioner
would like to assert its right of first option to buy.

In the case at bar, the subject matter of the contract is likewise a lease, which is a property right. The
death of a party does not excuse nonperformance of a contract which involves a property right, and
the rights and obligations thereunder pass to the personal representatives of the deceased.
Similarly, nonperformance is not excused by the death of the party when the other party has a
property interest in the subject matter of the contract. 16
Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by the subject
Contract of Lease with Option to Buy.
That being resolved, we now rule on the issue of whether petitioner had complied with its obligations
under the contract and with the requisites to exercise its option. The payment by petitioner of the
reservation fees during the two-year period within which it had the option to lease or purchase the
property is not disputed. In fact, the payment of such reservation fees, except those for February and
March, 1990 were admitted by Victor. 17 This is clear from the transcripts, to wit
ATTY. MOJADO:
One request, Your Honor. The last payment which was allegedly made in January 1990 just
indicate in that stipulation that it was issued November of 1989 and postdated January 1990
and then we will admit all.
COURT:
All reservation fee?
ATTY. MOJADO:
Yes, Your Honor.
COURT:
All as part of the lease?
ATTY. MOJADO:
Reservation fee, Your Honor. There was no payment with respect to payment of rentals.

18

Petitioner also paid the P15,000.00 monthly rental fee on the subject property by depositing the
same in China Bank Savings Account No. 1-04-02558-I-1, in the name of Victor as the sole heir of
Encarnacion Bartolome, 19 for the months of March to July 30, 1990, or a total of five (5) months,
despite the refusal of Victor to turn over the subject property. 20
Likewise, petitioner complied with its duty to inform the other party of its intention to exercise its
option to lease through its letter dated Match 12, 1990, 21 well within the two-year period for it to
exercise its option. Considering that at that time Encarnacion Bartolome had already passed away, it
was legitimate for petitioner to have addressed its letter to her heir.
1wphi1

It appears, therefore, that the exercise by petitioner of its option to lease the subject property was
made in accordance with the contractual provisions. Concomitantly, private respondent Victor
Bartolome has the obligation to surrender possession of and lease the premises to petitioner for a
period of six (6) years, pursuant to the Contract of Lease with Option to Buy.

Coming now to the issue of tenancy, we find that this is not for this Court to pass upon in the present
petition. We note that the Motion to Intervene and to Dismiss of the alleged tenant, Andres Lanozo,
was denied by the lower court and that such denial was never made the subject of an appeal. As the
lower court stated in its Order, the alleged right of the tenant may well be ventilated in another
proceeding in due time.
WHEREFORE, in view of the foregoing, the instant Petition for Review is GRANTED. The Decision
of the Court of Appeals in CA-G.R. CV No. 40849 and that of the Regional Trial Court of Valenzuela
in Civil Case No. 3337-V-90 are both SET ASIDE and a new one rendered ordering private
respondent Victor Bartolome to:
(a) surrender and deliver possession of that parcel of land covered by Transfer Certificate of
Title No. V-14249 by way of lease to petitioner and to perform all obligations of his
predecessor-in-interest, Encarnacion Bartolome, under the subject Contract of Lease with
Option to Buy;
(b) surrender and deliver his copy of Transfer Certificate of Title No. V-14249 to respondent
Register of Deeds for registration and annotation thereon of the subject Contract of Lease
with Option to Buy;
(c) pay costs of suit.
Respondent Register of Deeds is, accordingly, ordered to register and annotate the subject Contract
of Lease with Option to Buy at the back of Transfer Certificate of Title No. V-14249 upon submission
by petitioner of a copy thereof to his office.
SO ORDERED.

1wphi1.nt

Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.

Footnotes
Penned by Associate Justice Corona Ibay-Somera, concurred in by Justices Asaali S.
Isnani and Celia Lipana-Reyes.
1

Penned by Judge Teresita Dizon-Capulong.

Records, Civil Case No. 3337-V-90, pp. 1-28.

Id., pp. 35-43.

Id., p. 60.

Id., p. 129.

Id., p. 130.

Petition for Review, pp. 9-10; Rollo, pp. 10-11.

IV Tolentino, CIVIL CODE OF THE PHILIPPINES, 430 (1986).

Kanawha Banking & Trust Co. v. Gilbert, 46 S.E. 2d 225, 131 W. Va. 88; Rowe v.
Compensation Research Bureau, Inc., 62 N.W. 2d 581, 265 Wis. 589; Fressil v. Nichols, 114
So. 431, 94 Fla. 403; Cutler v. United Shoe Manufacturing Corporation, 174 N.E. 507, 274
Mass. 341, cited in 17A C.J.S. Sec. 465.
10

11

17 Am. Jur. 2d, Sec. 413, p. 866.

Eleizegui v. Lawn Tennis Club, G.R. No. 967, 2 Phil. 309, 313 (1903), citing Article 1257 of
the old Civil Code.
12

13

Carillo v. Salak de Paz, G.R. No. L-4133, 91 Phil. 265 (1952).

14

See Galsinao v. Austria, G.R. No. L-7918, 97 Phil. 82, 87 (1955).

15

G.R. No. 111538, 268 SCRA 727, 745 (1997).

16

17A C.J.S. Section 465, p. 627.

17

See T.S.N., 19 October 1991, pp. 11-12, 14, 16, 19 and 20-21.

18

T.S.N., 29 October 1991, pp. 20-21.

19

See Exhibit "K"; Records, Civil Case No. 3337-V-90, pp. 274-276.

20

See T.S.N., 9 January 1992, pp. 16-17.

21

Exh. "J", Records, Civil Case No. 3337-V-90, pp. 272-273.

ARUEGO VS CA
254 SCRA 711

FIRST DIVISION

[G.R. No. 112193. March 13, 1996]

JOSE E. ARUEGO, JR., SIMEONA SAN JUAN ARUEGO, MA.

IMMACULADA T. ALANON, ROBERTO A. TORRES, CRISTINA A.
TORRES,
JUSTO
JOSE
TORRES
and
AGUSTIN

TORRES, petitioners, vs. THE HON. COURT OF APPEALS,

THIRTEENTH DIVISION and ANTONIA ARUEGO, respondents.
DECISION
HERMOSISIMA, JR., J.:

On March 7, 1983, a Complaint for Compulsory Recognition and Enforcement of

Successional Rights was filed before Branch 30 of the Regional Trial Court of Manila by
the minors, private respondent Antonia F. Aruego and her alleged sister Evelyn F.
Aruego, represented by their mother and natural guardian, Luz M. Fabian. Named
defendants therein were Jose E. Aruego, Jr. and the five (5) minor children of the
deceased Gloria A. Torres, represented by their father and natural guardian, Justo P.
Torres, Jr., now the petitioners herein.
[1]

In essence, the complaint avers that the late Jose M. Aruego, Sr., a married man,
had an amorous relationship with Luz M. Fabian sometime in 1959 until his death
on March 30, 1982. Out of this relationship were born Antonia F. Aruego and Evelyn F.
Aruego on October 5, 1962 and September 3, 1963, respectively. The complaint prayed
for an Order praying that herein private respondent and Evelyn be declared the
illegitimate children of the deceased Jose M. Aruego, Sr; that herein petitioners be
compelled to recognize and acknowledge them as the compulsory heirs of the
deceased Jose M. Aruego; that their share and participation in the estate of their
deceased father be determined and ordered delivered to them.
The main basis of the action for compulsory recognition is their alleged open and
continuous possession of the status of illegitimate children as stated in paragraphs 6
and 7 of the Complaint, to wit:

6. The plaintiffs father, Jose M. Aruego, acknowledged and recognized the herein
plaintiffs as his children verbally among plaintiffs and their mothers family friends,
as well as by myriad different paternal ways, including but not limited to the
following:
(a) Regular support and educational expenses;
(b) Allowance to use his surname;
(c) Payment of maternal bills;
(d) Payment of baptismal expenses and attendance therein;
(e) Taking them to restaurants and department stores on occasions of family
rejoicing;
(f)

Attendance to school problems of plaintiffs;

(g) Calling and allowing plaintiffs to his office every now and then;
(h) Introducing them as such children to family friends.

7. The plaintiffs are thus, in continuous possession of the status

of (illegitimate) children of the deceased Jose M. Aruego who showered them, with
the continuous and clear manifestations of paternal care and affection as above
outlined.
[2]

Petitioners denied all these allegations.

After trial, the lower court rendered judgment, dated June 15, 1992, the dispositive
portion of which reads:
WHEREFORE, judgment is rendered 1. Declaring Antonia Aruego as illegitimate daughter of Jose Aruego and Luz Fabian;
2. Evelyn Fabian is not an illegitimate daughter of Jose Aruego with Luz Fabian;
3. Declaring that the estate of deceased Jose Aruego are the following:
xxx

xxx

xxx

4. Antonia Aruego is entitled to a share equal to portion of share of the legitimate

children of Jose Aruego;
5. Defendants are hereby ordered to recognize Antonia Aruego as the illegitimate
daughter of Jose Aruego with Luz Fabian;
6. Defendants are hereby ordered to deliver to Antonia Aruego (her) share in the
estate of Jose Aruego, Sr.;
7. Defendants to play (sic) plaintiffs (Antonia Aruego) counsel the sum of P10,000.00
as atty.s fee;
8. Cost against the defendants.[3]

Herein petitioners filed a Motion for Partial Reconsideration of the decision alleging
loss of jurisdiction on the part of the trial court over the complaint by virtue of the
passage of Executive Order No. 209 (as amended by Executive Order No. 227),
otherwise known as the Family Code of the Philippines which took effect on August 3,
1988. This motion was denied by the lower court in the Order, dated January 14, 1993.
Petitioners interposed an appeal but the lower court refused to give it due course on
the ground that it was filed out of time.
A Petition for Prohibition and Certiorari with prayer for a Writ of Preliminary
Injunction was filed by herein petitioners before respondent Court of Appeals, the
petition was dismissed for lack of merit in a decision promulgated on August 31, 1993. A
Motion for Reconsideration when filed was denied by the respondent court in a minute
resolution, datedOctober 13, 1993.
Hence, this Petition for Review on Certiorari under Rule 45 alleging the following
grounds:
A

RESPONDENT COURT HAD DECIDED A QUESTION OF SUBSTANCE IN A

WAY NOT IN ACCORD WITH THE LAW AND IS DIRECTLY
CONTRADICTORY TO THE APPLICABLE DECISION ALREADY ISSUED BY
THIS HONORABLE COURT.
B

RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FILED BY

PETITIONERS BEFORE IT DOES NOT INVOLVE A QUESTION OF
JURISDICTION.
C

RESPONDENT COURT HAD CLEARLY ERRED IN RULING THAT THERE IS

NO PERCEPTIBLE DIFFERENCE BETWEEN THE CIVIL CODE PROVISION
AND THOSE OF THE FAMILY CODE ANENT THE TIME AN ACTION FOR
COMPULSORY RECOGNITION MAY BE MADE AND THAT THERE IS NO
DIFFERENCE UNDER THE CIVIL CODE FROM THAT OF THE FAMILY CODE
CONCERNING THE REQUIREMENT THAT AN ACTION FOR COMPULSORY
RECOGNITION ON THE GROUND OF CONTINUOUS POSSESSION OF THE
STATUS OF AN ILLEGITIMATE CHILD SHOULD BE FILED DURING THE
LIFETIME OF THE PUTATIVE PARENT, IN UTTER DISREGARD OF THE
RULING OF THIS HONORABLE COURT IN THE UYGUANGCO CASE THAT
THE CIVIL CODE PROVISION HAD BEEN SUPERSEDED, OR AT LEAST
MODIFIED BY THE CORRESPONDING ARTICLES IN THE FAMILY CODE.
D

RESPONDENT COURT ERRED IN DISMISSING PETITIONERS PETITION FOR

PROHIBITION AND IN HOLDING THAT PETITIONERS REMEDY IS THAT OF
AN APPEAL WHICH ALLEGEDLY HAD ALREADY BEEN LOST.
[4]

Private respondents action for compulsory recognition as an illegitimate child was

brought under Book I, Title VIII of the Civil Code on PERSONS, specifically Article 285
thereof, which states the manner by which illegitimate children may prove their filiation,
to wit:

Art. 285. The action for the recognition of natural children may be brought only
during the lifetime of the presumed parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case the
latter may file the action before the expiration of four years from the attainment of his
majority; x x x.

Petitioners, on the other hand, submit that with the advent of the New Family Code on
August 3, 1988, the trial court lost jurisdiction over the complaint of private respondent
on the ground of prescription, considering that under Article 175, paragraph 2, in relation
to Article 172 of the New Family Code, it is provided that an action for compulsory
recognition of illegitimate filiation, if based on the open and continuous possession of
the status of an illegitimate child, must be brought during the lifetime of the alleged
parent without any exception, otherwise the action will be barred by prescription. The
law cited reads:

Article 172. The filiation of legitimate children is established by any of the

following:
(1)

The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private

handwritten instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1)

The open and continuous possession of the status of a legitimate child; or

(2)

Any other means allowed by the Rules of Court and special laws.

Article 175. Illegitimate children may establish their illegitimate filiation in the same
way and on the same evidence as legitimate children.
The action must be brought within the same period specified in Article 173 [during
the lifetime of the child], except when the action is based on the second paragraph
of Article 172, in which case the action may be brought during the lifetime of the
alleged parent.
In the case at bench, petitioners point out that, since the complaint of private
respondent and her alleged sister was filed on March 7, 1983, or almost one (1) year
after the death of their presumed father on March 30, 1982, the action has clearly
prescribed under the new rule as provided in the Family Code. Petitioners, further,
maintain that even if the action was filed prior to the effectivity of the Family Code, this
new law must be applied to the instant case pursuant to Article 256 of the Family Code
which provides:

This Code shall have retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the Civil Code or other laws.
The basic question that must be resolved in this case, therefore, appears to be:
Should the provisions of the Family Code be applied in the instant case? As a corollary
Will the application of the Family Code in this case prejudice or impair any vested right

of the private respondent such that it should not be given retroactive effect in this
particular case?
The phrase vested or acquired rights under Article 256, is not defined by the
Family Code. The Committee did not define what is meant by a vested or acquired
right, thus leaving it to the courts to determine what it means as each particular issue is
submitted to them. It is difficult to provide the answer for each and every question that
may arise in the future.
[5]

In Tayag vs. Court of Appeals, a case which involves a similar complaint

denominated as Claim for Inheritance but treated by this court as one to compel
recognition as an illegitimate child brought prior to the effectivity of the Family Code by
the mother of the minor child, and based also on the open and continuous possession
of the status of an illegitimate child, we had occasion to rule that:
[6]

Under the circumstances obtaining in the case at bar, we hold that the right of action
of the minor child has been vested by the filing of the complaint in court under the
regime of the Civil Code and prior to the effectivity of the Family Code. We herein
adopt our ruling in the recent case of Republic of the Philippines vs. Court of Appeals,
et. al. where we held that the fact of filing of the petition already vested in the
petitioner her right to file it and to have the same proceed to final adjudication in
accordance with the law in force at the time, and such right can no longer be
prejudiced or impaired by the enactment of a new law.
[7]

xxx

xxx

xxx

Accordingly, Article 175 of the Family Code finds no proper application to the
instant case since it will ineluctably affect adversely a right of private respondent
and, consequentially, of the minor child she represents, both of which have been
vested with the filing of the complaint in court. The trial court is, therefore, correct
in applying the provisions of Article 285 of the Civil Code and in holding that private
respondents cause of action has not yet prescribed.
Tayag applies four-square with the case at bench. The action brought by private
respondent Antonia Aruego for compulsory recognition and enforcement of successional
rights which was filed prior to the advent of the Family Code, must be governed by
Article 285 of the Civil Code and not by Article 175, paragraph 2 of the Family Code.
The present law cannot be given retroactive effect insofar as the instant case is
concerned, as its application will prejudice the vested right of private respondent to have
her case decided under Article 285 of the Civil Code. The right was vested to her by the
fact that she filed her action under the regime of the Civil Code. Prescinding from this,
the conclusion then ought to be that the action was not yet barred, notwithstanding the
fact that it was brought when the putative father was already deceased, since private
respondent was then still a minor when it was filed, an exception to the general rule
provided under Article 285 of the Civil Code. Hence, the trial court, which acquired
jurisdiction over the case by the filing of the complaint, never lost jurisdiction over the

same despite the passage of E.O. No. 209, also known as the Family Code of
the Philippines.
Our ruling herein reinforces the principle that the jurisdiction of a court, whether in
criminal or civil cases, once attached cannot be ousted by subsequent happenings or
events, although of a character which would have prevented jurisdiction from attaching
in the first instance, and it retains jurisdiction until it finally disposes of the case.
[8]

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals
dated August 31, 1993 and its Resolution dated October 13, 1993 are hereby
AFFIRMED.
SO ORDERED.
Padilla, Bellosillo, and Kapunan, JJ., concur.
Vitug, J., also believes that the Court of Appeals did not err in holding that the
petition before it did not involve a question of jurisdiction and cannot thus be a substitute
for a lost appeal.

[1]

Docketed as Civil Case No. 83-16093.

[2]

Rollo, p. 45.

[3]

Rollo, pp. 10-11.

[4]

Rollo, p. 55.

[5]

Sempio-Diy, Alicia V., Handbook on the Family Code of the Philippines, 1988 ed., p. 325.

[6]

209 SCRA 665 [1992].

[7]

205 SCRA 356 [1992].

Regalado, Florenz D., Remedial Law Compendium, Volume One, Fifth Revised Edition, p.9, citing
Ramos, et al. v. Central Bank, L-29352, October 4, 1971; Dioquino v. Cruz, et al., L-38579, September 9,
1982; Republic v. Pielago, et al., G.R. No. 72218, July 21, 1986.
[8]

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 112193 March 13, 1996

JOSE E. ARUEGO, JR., SIMEONA SAN JUAN ARUEGO, MA. IMMACULADA T. ALANON,
ROBERTO A. TORRES, CRISTINA A. TORRES, JUSTO JOSE TORRES and AGUSTIN

TORRES, petitioners,
vs.
THE HON. COURT OF APPEALS, THIRTEENTH DIVISION and ANTONIA ARUEGO, respondents.

HERMOSISIMA, JR., J.:p

On March 7, 1983, a Complaint 1 for Compulsory Recognition and Enforcement of Successional Rights
was filed before Branch 30 of the Regional Trial Court of Manila by the minors, private respondent Antonia
F. Aruego and her alleged sister Evelyn F. Aruego, represented by their mother and natural guardian, Luz
M. Fabian. Named defendants therein were Jose E. Aruego, Jr. and the five (5) minor children of the
deceased Gloria A. Torres, represented by their father and natural guardian, Justo P. Torres, Jr., now the
petitioners herein.
In essence, the complaint avers that the late Jose M. Aruego, Sr., a married man, had an amorous
relationship with Luz M. Fabian sometime in 1959 until his death on March 30, 1982. Out of this
relationship were born Antonia F. Aruego and Evelyn F. Aruego on October 5, 1962 and September
3, 1963, respectively. The complaint prayed for an Order praying that herein private respondent and
Evelyn be declared the illegitimate children of the deceased Jose M. Aruego, Sr.; that herein
petitioners be compelled to recognize and acknowledge them as the compulsory heirs of the
deceased Jose M. Aruego; that their share and participation in the estate of their deceased father be
determined and ordered delivered to them.
The main basis of the action for compulsory recognition is their alleged "open and continuous
possession of the status of illegitimate children" as stated in paragraphs 6 and 7 of the Complaint, to
wit:
6. The plaintiffs' father, Jose M. Aruego, acknowledged and recognized the herein
plaintiffs as his children verbally among plaintiffs' and their mother's family friends, as
well as by myriad different paternal ways, including but not limited to the following:
(a) Regular support and educational expenses;
(b) Allowance to use his surname;
(c) Payment of maternal bills;
(d) Payment of baptismal expenses and attendance therein;
(e) Taking them to restaurants and department stores on occasions of family
rejoicing;
(f) Attendance to school problems of plaintiffs;
(g) Calling and allowing plaintiffs to his office every now and then;
(h) Introducing them as such children to family friends.
7. The plaintiffs are thus, in continuous possession of the status
of (illegitimate) children of the deceased Jose M. Aruego who showered them, with

the continuous and clear manifestations of paternal care and affection as above
outlined. 2
Petitioners denied all these allegations.
After trial, the lower court rendered judgment, dated June 15, 1992, the dispositive portion of which
reads:
WHEREFORE, judgment is rendered
1. Declaring Antonia Aruego as illegitimate daughter of Jose Aruego and Luz Fabian;
2. Evelyn Fabian is not an illegitimate daughter of Jose Aruego with Luz Fabian;
3. Declaring that the estate of deceased Jose Aruego are the following:
xxx xxx xxx
4. Antonia Aruego is entitled to a share equal to 1/2 portion of share of the legitimate
children of Jose Aruego;
5. Defendants are hereby ordered to recognize Antonia Aruego as the illegitimate
daughter of Jose Aruego with Luz Fabian;
6. Defendants are hereby ordered to deliver to Antonia Aruego (her) share in the
estate of Jose Aruego, Sr.;
7. Defendants to play (sic) plaintiffs (Antonia Aruego) counsel the sum of P10,000.00
as atty's fee;
8. Cost against the defendants. 3
Herein petitioners filed a Motion for Partial Reconsideration of the decision alleging loss of
jurisdiction on the part of the trial court over the complaint by virtue of the passage of Executive
Order No. 209 (as amended by Executive Order No. 227), otherwise known as the Family Code of
the Philippines which took effect on August 3, 1988. This motion was denied by the lower court in the
Order, dated January 14, 1993.
Petitioners interposed an appeal but the lower court refused to give it due course on the ground that
it was filed out of time.
A Petition for Prohibition and Certiorari with prayer for a Writ of Preliminary Injunction was filed by
herein petitioners before respondent Court of Appeals, the petition was dismissed for lack of merit in
a decision promulgated on August 31, 1993. A Motion for Reconsideration when filed was denied by
the respondent court in a minute resolution, dated October 13, 1993.
Hence, this Petition for Review on Certiorari under Rule 45 alleging the following grounds:
A

RESPONDENT COURT HAD DECIDED A QUESTION OF SUBSTANCE IN A WAY

NOT IN ACCORD WITH THE LAW AND IS DIRECTLY CONTRADICTORY TO THE
APPLICABLE DECISION ALREADY ISSUED BY THIS HONORABLE COURT.
B
RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FILED BY
PETITIONERS BEFORE IT DOES NOT INVOLVE A QUESTION OF
JURISDICTION.
C
RESPONDENT COURT HAD CLEARLY ERRED IN RULING THAT THERE IS NO
PERCEPTIBLE DIFFERENCE BETWEEN THE CIVIL CODE PROVISION AND
THOSE OF THE FAMILY CODE ANENT THE TIME AN ACTION FOR
COMPULSORY RECOGNITION MAY BE MADE AND THAT THERE IS NO
DIFFERENCE UNDER THE CIVIL CODE FROM THAT OF THE FAMILY CODE
CONCERNING THE REQUIREMENT THAT AN ACTION FOR COMPULSORY
RECOGNITION ON THE GROUND OF CONTINUOUS POSSESSION OF THE
STATUS OF AN ILLEGITIMATE CHILD SHOULD BE FILED DURING THE
LIFETIME OF THE PUTATIVE PARENT, IN UTTER DISREGARD OF THE RULING
OF THIS HONORABLE COURT IN THE UYGUANGCO CASE THAT THE CIVIL
CODE PROVISION HAD BEEN SUPERSEDED OR AT LEAST MODIFIED BY THE
CORRESPONDING ARTICLES IN THE FAMILY CODE.
D
RESPONDENT COURT ERRED IN DISMISSING PETITIONERS' PETITION FOR
PROHIBITION AND IN HOLDING THAT PETITIONERS REMEDY IS THAT OF AN
APPEAL WHICH ALLEGEDLY HAD ALREADY BEEN LOST. 4
Private respondent's action for compulsory recognition as an illegitimate child was brought under
Book I, Title VIII of the Civil Code on PERSONS, specifically Article 285 thereof, which state the
manner by which illegitimate children may prove their filiation, to wit:
Art. 285. The action for the recognition of natural children may be brought only during
the lifetime of the presumed parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case the latter
may file the action before the expiration of four years from the attainment of his
majority; . . . .
Petitioners, on the other hand, submit that with the advent of the New Family Code on
August 3, 1988, the trial court lost jurisdiction over the complaint of private respondent on the
ground of prescription, considering that under Article 175, paragraph 2, in relation to Article
172 of the New Family Code, it is provided that an action for compulsory recognition of
illegitimate filiation, if based on the "open and continuous possession of the status of an
illegitimate child," must be brought during the lifetime of the alleged parent without any
exception, otherwise the action will be barred by prescription.
The law cited reads:

Art. 172. The filiation of legitimate children is established by any of the following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.
Art. 175. Illegitimate children may establish their illegitimate filiation in the same way
and on the same evidence as legitimate children.
The action must be brought within the same period specified in Article 173 [during the
lifetime of the child], except when the action is based on the second paragraph of
Article 172, in which case the action may be brought during the lifetime of the alleged
parent.
In the case at bench, petitioners point out that, since the complaint of private respondent and
her alleged sister was filed on March 7, 1983, or almost one (1) year after the death of their
presumed father on March 30, 1982, the action has clearly prescribed under the new rule as
provided in the Family Code. Petitioners, further, maintain that even if the action was filed
prior to the effectivity of the Family Code, this new law must be applied to the instant case
pursuant to Article 256 of the Family Code which provides:
This Code shall, have retroactive effect insofar as it does not prejudice or impair
vested of acquired rights in accordance with the Civil Code or other laws.
The basic question that must be resolved in this case, therefore, appears to be:
Should the provisions of the Family Code be applied in the instant case? As a corollary Will the
application of the Family Code in this case prejudice or impair any vested right of the private
respondent such that it should not be given retroactive effect in this particular case?
The phrase "vested or acquired rights" under Article 256, is not defined by the Family Code. "The
Committee did not define what is meant by a 'vested or acquired right,' thus leaving it to the courts to
determine what it means as each particular issue is submitted to them. It is difficult to provide the
answer for each and every question that may arise in the future." 5
In Tayag vs. Court of Appeals, 6 a case which involves a similar complaint denominated as "Claim for
Inheritance" but treated by this court as one to compel recognition as an illegitimate child brought prior to
the effectivity of the Family Code by the mother of the minor child, and based also on the "open and
continuous possession of the status of an illegitimate child," we had occasion to rule that:
Under the circumstances obtaining in the case at bar, we hold that the right of action
of the minor child has been vested by the filing of the complaint in court under the
regime of the Civil Code and prior to the effectivity of the Family Code. We herein
adopt our ruling in the recent case of Republic of the Philippines vs. Court of

Appeals, et. al. 7 where we held that the fact of filing of the petition already vested in the
petitioner her right to file it and to have the same proceed to final adjudication in
accordance with the law in force at the time, and such right can no longer be prejudiced
or impaired by the enactment of a new law.
xxx xxx xxx
Accordingly, Article 175 of the Family Code finds no proper application to the instant
case since it will ineluctably affect adversely a right of private respondent and,
consequentially, of the minor child she represents, both of which have been vested
with the filing of the complaint in court. The trial court is, therefore, correct in applying
the provisions of Article 285 of the Civil Code and in holding that private respondent's
cause of action has not yet prescribed.
Tayag applies four-square with the case at bench. The action brought by private respondent Antonia
Aruego for compulsory recognition and enforcement of successional rights which was filed prior to
the advent of the Family Code, must be governed by Article 285 of the Civil Code and not by Article
175, paragraph 2 of the Family Code. The present law cannot be given retroactive effect insofar as
the instant case is concerned, as its application will prejudice the vested right of private respondent
to have her case decided under Article 285 of the Civil Code. The right was vested to her by the fact
that she filed her action under the regime of the Civil Code. Prescinding from this, the conclusion
then ought to be that the action was not yet barred, notwithstanding the fact that it was brought when
the putative father was already deceased, since private respondent was then still a minor when it
was filed, an exception to the general rule provided under Article 285 of the Civil Code. Hence, the
trial court, which acquired jurisdiction over the case by the filing of the complaint, never lost
jurisdiction over the same despite the passage of E.O. No. 209, also known as the Family Code of
the Philippines.
Our ruling herein reinforces the principle that the jurisdiction of a court, whether in criminal or civil
cases, once attached cannot be ousted by subsequent happenings or events, although of a
character which would have prevented jurisdiction from attaching in the first instance, and it retains
jurisdiction until it finally disposes of the case. 8
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals dated August 31,
1993 and its Resolution dated October 13, 1993 are hereby AFFIRMED.
SO ORDERED.
Padilla, Bellosillo and Kapunan, JJ., concur.

Separate Opinions

VITUG, J., concuring:

I also believe that the Court of Appeals did not err in holding that the petition before it did not involve
a question of jurisdiction and cannot thus be a substitute for a lost appeal.

Separate Opinions
VITUG, J., concuring:
I also believe that the Court of Appeals did not err in holding that the petition before it did not involve
a question of jurisdiction and cannot thus be a substitute for a lost appeal.
Footnotes
1 Docketed as Civil Case No. 83-16093.
2 Rollo, p. 45.
3 Rollo, pp. 10-11.
4 Rollo, p. 55.
5 Sempio-Diy, Alicia V, Handbook on the Family Code of the Philippines, 1988 ed., p. 325.
6 209 SCRA 665 [1992].
7 205 SCRA 356 [19921.
8 Regalado, Florenz D., Remedial Law Compendium, Volume One, Fifth Revised Edition, p.
9 citing Ramos, et al. v. Central Bank, L-29352, October 4, 1971; Dioquino v. Cruz, et al., L38579, September 9, 1982; Republic v. Pielago, et al., G.R. No. 72218, July 21, 1986.

LORENZO VS POSADAS
64 PHIL 353
Republic of the Philippines
SUPREME COURT
Manila
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 defendant-appellant.
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

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 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.
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, giftmortis 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. ChioTaysan, 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 and transmissions. The following shall not
be taxed:
(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 abovequoted, 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 abovementioned, as amended by Act No. 3031, which took effect on March 9, 1922.
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.
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 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.
(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 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 thecestui 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 hiscestui 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.
Avancea, C.J., Abad Santos, Imperial, Diaz and Concepcion, JJ., concur.
Villa-Real, J., concurs.

LORENZO vs. POSADAS JR.

G.R. No. L-43082
June 18, 1937
FACTS: Thomas Hanley died, leaving a will and a considerable amount of real and personal properties.
Proceedings for the probate of his will and the settlement and distribution of his estate were begun in
the CFI of Zamboanga. The will was admitted to probate.
The CFI considered it proper for the best interests of the estate to appoint a trustee to administer the
real properties which, under the will, were to pass to nephew Matthew ten years after the two
executors named in the will was appointed trustee. Moore acted as trustee until he resigned and the
plaintiff Lorenzo herein was appointed in his stead.
During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue
(Posadas) assessed against the estate an inheritance tax, together with the penalties for deliquency in
payment. Lorenzo paid said amount under protest, notifying Posadas at the same time that unless the
amount was promptly refunded suit would be brought for its recovery. Posadas overruled Lorenzos
protest and refused to refund the said amount. Plaintiff went to court. The CFI dismissed Lorenzos
complaint and Posadas counterclaim. Both parties appealed to this court.
ISSUE:
(e) Has there been delinquency in the payment of the inheritance tax?
HELD: The judgment of the lower court is accordingly modified, with costs against the plaintiff in both
instances
YES
The defendant maintains that it was the duty of the executor to pay the inheritance tax before the
delivery of the decedents property to the trustee. Stated otherwise, the defendant contends that
delivery to the trustee was delivery to the cestui que trust, the beneficiary 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. A trustee is but an instrument or agent for the cestui
que trust

The appointment of 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. 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. 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.

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 appointmening a trustee to carry into effect the provisions of
the will

As the existence of the trust was already proven, 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. On
that date trust estate vested in him. The interest due should be computed from that date.
NOTES: Other issues:

(a) When does the inheritance tax accrue and when must it be satisfied?
The accrual of the inheritance tax is distinct from the obligation to pay the same.
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.
Whatever may be the time when actual transmission of the inheritance takes place, succession takes
place in any event at the moment of the decedents death. The time when the heirs legally succeed to
the inheritance may differ from the time when the heirs actually receive such inheritance. 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 and transmissions. The following shall not be taxed:
(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. xx
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.
The instant case does[not] fall under subsection (a), but under subsection (b), of section 1544 abovequoted, 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 Moore as trustee.
(b) Should the inheritance tax be computed on the basis of the value of the estate at the time of the
testators death, or on its value ten years later?

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 value of the estate as it stood at the time of
the decedents death, regardless of any subsequent contingency value of any subsequent increase or
decrease in value

(c) In determining the net value of the estate subject to tax, is it proper to deduct the compensation
due to trustees?

A trustee, no doubt, is entitled to receive a fair compensation for his services. 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

(d) What law governs the case at bar? Should the provisions of Act No. 3606 favorable to the taxpayer be given retroactive effect?

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, . . . . Act No. 3606 itself contains no provisions indicating legislative intent to give
it retroactive effect. No such effect can be given the statute by this court.

CASTAEDA vs. ALEMANY

3 PHIL 426

G.R. No. 1439, Castaneda v. Alemany,

3 Phil. 426
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
March 19, 1904
G.R. No. 1439
ANTONIO CASTAEDA, plaintiff-appellee,
vs.
JOSE E. ALEMANY, defendant-appellant.
Ledesma, Sumulong and Quintos for appellant.
The court erred in holding that all legal formalities had been
complied with in the execution of the will of Doa Juana Moreno, as
the proof shows that the said will was not written in the presence of
under the express direction of the testratrix as required by section
618 of the Code of Civil Procedure.
Antonio V. Herrero for appellee.
The grounds upon which a will may be disallowed are limited to
those mentioned in section 634 of the Code of Civil Procedure.
WILLARD, J.:
(1) The evidence in this case shows to our satisfaction that the will
of Doa Juana Moreno was duly signed by herself in the presence of
three witnesses, who signed it as witnesses in the presence of the

testratrix and of each other. It was therefore executed in conformity

with law.
There is nothing in the language of section 618 of the Code of Civil
Procedure which supports the claim of the appellants that the will
must be written by the testator himself or by someone else in his
presence and under his express direction. That section requires (1)
that the will be in writing and (2) either that the testator sign it
himself or, if he does sign it, that it be signed by some one in his
presence and by his express direction. Who does the mechanical
work of writing the will is a matter of indifference. The fact,
therefore, that in this case the will was typewritten in the office of
the lawyer for the testratrix is of no consequence. The English text
of section 618 is very plain. The mistakes in translation found in the
first Spanish edition of the code have been corrected in the second.
(2) To establish conclusively as against everyone, and once for all,
the facts that a will was executed with the formalities required by
law and that the testator was in a condition to make a will, is the
only purpose of the proceedings under the new code for the probate
of a will. (Sec. 625.) The judgment in such proceedings determines
and can determine nothing more. In them the court has no power to
pass upon the validity of any provisions made in the will. It can not
decide, for example, that a certain legacy is void and another one
valid. It could not in this case make any decision upon the question
whether the testratrix had the power to appoint by will a guardian
for the property of her children by her first husband, or whether the
person so appointed was or was not a suitable person to discharge
such trust.
All such questions must be decided in some other proceeding. The
grounds on which a will may be disallowed are stated the section
634. Unless one of those grounds appears the will must be allowed.
They all have to do with the personal condition of the testator at the

time of its execution and the formalities connected therewith. It

follows that neither this court nor the court below has any
jurisdiction in his proceedings to pass upon the questions raised by
the appellants by the assignment of error relating to the
appointment of a guardian for the children of the deceased.
It is claimed by the appellants that there was no testimony in the
court below to show that the will executed by the deceased was the
same will presented to the court and concerning which this hearing
was had. It is true that the evidence does not show that the
document in court was presented to the witnesses and identified by
them, as should have been done. But we think that we are justified
in saying that it was assumed by all the parties during the trial in
the court below that the will about which the witnesses were
testifying was the document then in court. No suggestion of any
kind was then made by the counsel for the appellants that it was not
the same instrument. In the last question put to the witness
Gonzales the phrase "this will" is used by the counsel for the
appellants. In their argument in that court, found on page 15 of the
record, they treat the testimony of the witnesses as referring to the
will probate they were then opposing.
The judgment of the court below is affirmed, eliminating therefrom,
however, the clause "el cual debera ejecutarse fiel y exactamente
en todas sus partes." The costs of this instance will be charged
against the appellants.
Arellano, C. J., Torres, Cooper, Mapa, McDonough and Johnson, JJ.,
concur.
IN RE WILL OF RIOSA
39 PHIL 23

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-7188

August 9, 1954

In re: Will and Testament of the deceased REVEREND SANCHO ABADIA.

SEVERINA A. VDA. DE ENRIQUEZ, ET AL., petitioners-appellees,
vs.
MIGUEL ABADIA, ET AL., oppositors-appellants.
Manuel A. Zosa, Luis B. Ladonga, Mariano A. Zosa and B. G. Advincula for appellants.
C. de la Victoria for appellees.
MONTEMAYOR, J.:
On September 6, 1923, Father Sancho Abadia, parish priest of Talisay, Cebu, executed a document
purporting to be his Last Will and Testament now marked Exhibit "A". Resident of the City of Cebu,
he died on January 14, 1943, in the municipality of Aloguinsan, Cebu, where he was an evacuee. He
left properties estimated at P8,000 in value. On October 2, 1946, one Andres Enriquez, one of the
legatees in Exhibit "A", filed a petition for its probate in the Court of First Instance of Cebu. Some
cousins and nephews who would inherit the estate of the deceased if he left no will, filed opposition.
During the hearing one of the attesting witnesses, the other two being dead, testified without
contradiction that in his presence and in the presence of his co-witnesses, Father Sancho wrote out
in longhand Exhibit "A" in Spanish which the testator spoke and understood; that he (testator) signed
on he left hand margin of the front page of each of the three folios or sheets of which the document
is composed, and numbered the same with Arabic numerals, and finally signed his name at the end
of his writing at the last page, all this, in the presence of the three attesting witnesses after telling
that it was his last will and that the said three witnesses signed their names on the last page after the
attestation clause in his presence and in the presence of each other. The oppositors did not submit
any evidence.
The learned trial court found and declared Exhibit "A" to be a holographic will; that it was in the
handwriting of the testator and that although at the time it was executed and at the time of the
testator's death, holographic wills were not permitted by law still, because at the time of the hearing
and when the case was to be decided the new Civil Code was already in force, which Code
permitted the execution of holographic wills, under a liberal view, and to carry out the intention of the
testator which according to the trial court is the controlling factor and may override any defect in
form, said trial court by order dated January 24, 1952, admitted to probate Exhibit "A", as the Last
Will and Testament of Father Sancho Abadia. The oppositors are appealing from that decision; and
because only questions of law are involved in the appeal, the case was certified to us by the Court of
Appeals.
The new Civil Code (Republic Act No. 386) under article 810 thereof provides that a person may
execute a holographic will which must be entirely written, dated and signed by the testator himself
and need not be witnessed. It is a fact, however, that at the time that Exhibit "A" was executed in
1923 and at the time that Father Abadia died in 1943, holographic wills were not permitted, and the
law at the time imposed certain requirements for the execution of wills, such as numbering
correlatively each page (not folio or sheet) in letters and signing on the left hand margin by the

testator and by the three attesting witnesses, requirements which were not complied with in Exhibit
"A" because the back pages of the first two folios of the will were not signed by any one, not even by
the testator and were not numbered, and as to the three front pages, they were signed only by the
testator.
Interpreting and applying this requirement this Court in the case of In re Estate of Saguinsin, 41
Phil., 875, 879, referring to the failure of the testator and his witnesses to sign on the left hand
margin of every page, said:
. . . . This defect is radical and totally vitiates the testament. It is not enough that the
signatures guaranteeing authenticity should appear upon two folios or leaves; three pages
having been written on, the authenticity of all three of them should be guaranteed by the
signature of the alleged testatrix and her witnesses.
And in the case of Aspe vs. Prieto, 46 Phil., 700, referring to the same requirement, this Court
declared:
From an examination of the document in question, it appears that the left margins of the six
pages of the document are signed only by Ventura Prieto. The noncompliance with section 2
of Act No. 2645 by the attesting witnesses who omitted to sign with the testator at the left
margin of each of the five pages of the document alleged to be the will of Ventura Prieto, is a
fatal defect that constitutes an obstacle to its probate.
What is the law to apply to the probate of Exh. "A"? May we apply the provisions of the new Civil
Code which not allows holographic wills, like Exhibit "A" which provisions were invoked by the
appellee-petitioner and applied by the lower court? But article 795 of this same new Civil Code
expressly provides: "The validity of a will as to its form depends upon the observance of the law in
force at the time it is made." The above provision is but an expression or statement of the weight of
authority to the affect that the validity of a will is to be judged not by the law enforce at the time of the
testator's death or at the time the supposed will is presented in court for probate or when the petition
is decided by the court but at the time the instrument was executed. One reason in support of the
rule is that although the will operates upon and after the death of the testator, the wishes of the
testator about the disposition of his estate among his heirs and among the legatees is given solemn
expression at the time the will is executed, and in reality, the legacy or bequest then becomes a
completed act. This ruling has been laid down by this court in the case of In re Will of Riosa, 39 Phil.,
23. It is a wholesome doctrine and should be followed.
Of course, there is the view that the intention of the testator should be the ruling and controlling
factor and that all adequate remedies and interpretations should be resorted to in order to carry out
said intention, and that when statutes passed after the execution of the will and after the death of the
testator lessen the formalities required by law for the execution of wills, said subsequent statutes
should be applied so as to validate wills defectively executed according to the law in force at the time
of execution. However, we should not forget that from the day of the death of the testator, if he
leaves a will, the title of the legatees and devisees under it becomes a vested right, protected under
the due process clause of the constitution against a subsequent change in the statute adding new
legal requirements of execution of wills which would invalidate such a will. By parity of reasoning,
when one executes a will which is invalid for failure to observe and follow the legal requirements at
the time of its execution then upon his death he should be regarded and declared as having died
intestate, and his heirs will then inherit by intestate succession, and no subsequent law with more
liberal requirements or which dispenses with such requirements as to execution should be allowed to
validate a defective will and thereby divest the heirs of their vested rights in the estate by intestate

succession. The general rule is that the Legislature can not validate void wills (57 Am. Jur., Wills,
Sec. 231, pp. 192-193).
In view of the foregoing, the order appealed from is reversed, and Exhibit "A" is denied probate. With
costs.
Paras, C.J., Pablo, Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo, Labrador, Concepcion and
Reyes J.B.L., JJ., concur.

ENRIQUEZ VS ABADIA
95 SCRA 627

G.R. No. L-7188, In re Will of Sancho

Abadia. Vda. de Enriquez et al. v.
Abadia et al., 95 Phil. 627
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
August 9, 1954
G.R. No. L-7188
In re: Will and Testament of the deceased REVEREND
SANCHO ABADIA.
SEVERINA A. VDA. DE ENRIQUEZ, ET AL., petitioners-appellees,
vs.
MIGUEL ABADIA, ET AL., oppositors-appellants.
Manuel A. Zosa, Luis B. Ladonga, Mariano A. Zosa and B. G.
Advincula for appellants.
C. de la Victoria for appellees.
MONTEMAYOR, J.:

On September 6, 1923, Father Sancho Abadia, parish priest of

Talisay, Cebu, executed a document purporting to be his Last Will
and Testament now marked Exhibit "A". Resident of the City of Cebu,
he died on January 14, 1943, in the municipality of Aloguinsan,
Cebu, where he was an evacuee. He left properties estimated at
P8,000 in value. On October 2, 1946, one Andres Enriquez, one of
the legatees in Exhibit "A", filed a petition for its probate in the
Court of First Instance of Cebu. Some cousins and nephews who
would inherit the estate of the deceased if he left no will, filed
opposition.
During the hearing one of the attesting witnesses, the other two
being dead, testified without contradiction that in his presence and
in the presence of his co-witnesses, Father Sancho wrote out in
longhand Exhibit "A" in Spanish which the testator spoke and
understood; that he (testator) signed on he left hand margin of the
front page of each of the three folios or sheets of which the
document is composed, and numbered the same with Arabic
numerals, and finally signed his name at the end of his writing at the
last page, all this, in the presence of the three attesting witnesses
after telling that it was his last will and that the said three witnesses
signed their names on the last page after the attestation clause in
his presence and in the presence of each other. The oppositors did
not submit any evidence.
The learned trial court found and declared Exhibit "A" to be a
holographic will; that it was in the handwriting of the testator and
that although at the time it was executed and at the time of the
testator's death, holographic wills were not permitted by law still,
because at the time of the hearing and when the case was to be
decided the new Civil Code was already in force, which Code
permitted the execution of holographic wills, under a liberal view,
and to carry out the intention of the testator which according to the

trial court is the controlling factor and may override any defect in
form, said trial court by order dated January 24, 1952, admitted to
probate Exhibit "A", as the Last Will and Testament of Father Sancho
Abadia. The oppositors are appealing from that decision; and
because only questions of law are involved in the appeal, the case
was certified to us by the Court of Appeals.
The new Civil Code (Republic Act No. 386) under article 810 thereof
provides that a person may execute a holographic will which must
be entirely written, dated and signed by the testator himself and
need not be witnessed. It is a fact, however, that at the time that
Exhibit "A" was executed in 1923 and at the time that Father Abadia
died in 1943, holographic wills were not permitted, and the law at
the time imposed certain requirements for the execution of wills,
such as numbering correlatively each page (not folio or sheet) in
letters and signing on the left hand margin by the testator and by
the three attesting witnesses, requirements which were not
complied with in Exhibit "A" because the back pages of the first two
folios of the will were not signed by any one, not even by the
testator and were not numbered, and as to the three front pages,
they were signed only by the testator.
Interpreting and applying this requirement this Court in the case
of In re Estate of Saguinsin, 41 Phil., 875, 879, referring to the failure
of the testator and his witnesses to sign on the left hand margin of
every page, said:
. . . . This defect is radical and totally vitiates the testament. It is not
enough that the signatures guaranteeing authenticity should appear
upon two folios or leaves; three pages having been written on, the
authenticity of all three of them should be guaranteed by the
signature of the alleged testatrix and her witnesses.
And in the case of Aspe vs. Prieto, 46 Phil., 700, referring to the
same requirement, this Court declared:

From an examination of the document in question, it appears that

the left margins of the six pages of the document are signed only by
Ventura Prieto. The noncompliance with section 2 of Act No. 2645 by
the attesting witnesses who omitted to sign with the testator at the
left margin of each of the five pages of the document alleged to be
the will of Ventura Prieto, is a fatal defect that constitutes an
obstacle to its probate.
What is the law to apply to the probate of Exh. "A"? May we apply
the provisions of the new Civil Code which not allows holographic
wills, like Exhibit "A" which provisions were invoked by the appelleepetitioner and applied by the lower court? But article 795 of this
same new Civil Code expressly provides: "The validity of a will as to
its form depends upon the observance of the law in force at the time
it is made." The above provision is but an expression or statement of
the weight of authority to the affect that the validity of a will is to be
judged not by the law enforce at the time of the testator's death or
at the time the supposed will is presented in court for probate or
when the petition is decided by the court but at the time the
instrument was executed. One reason in support of the rule is that
although the will operates upon and after the death of the testator,
the wishes of the testator about the disposition of his estate among
his heirs and among the legatees is given solemn expression at the
time the will is executed, and in reality, the legacy or bequest then
becomes a completed act. This ruling has been laid down by this
court in the case of In re Will of Riosa, 39 Phil., 23. It is a wholesome
doctrine and should be followed.
Of course, there is the view that the intention of the testator should
be the ruling and controlling factor and that all adequate remedies
and interpretations should be resorted to in order to carry out said
intention, and that when statutes passed after the execution of the
will and after the death of the testator lessen the formalities
required by law for the execution of wills, said subsequent statutes

should be applied so as to validate wills defectively executed

according to the law in force at the time of execution. However, we
should not forget that from the day of the death of the testator, if he
leaves a will, the title of the legatees and devisees under it becomes
a vested right, protected under the due process clause of the
constitution against a subsequent change in the statute adding new
legal requirements of execution of wills which would invalidate such
a will. By parity of reasoning, when one executes a will which is
invalid for failure to observe and follow the legal requirements at the
time of its execution then upon his death he should be regarded and
declared as having died intestate, and his heirs will then inherit by
intestate succession, and no subsequent law with more liberal
requirements or which dispenses with such requirements as to
execution should be allowed to validate a defective will and thereby
divest the heirs of their vested rights in the estate by intestate
succession. The general rule is that the Legislature can not validate
void wills (57 Am. Jur., Wills, Sec. 231, pp. 192-193).
In view of the foregoing, the order appealed from is reversed, and
Exhibit "A" is denied probate. With costs.
Paras, C.J., Pablo, Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo,
Labrador, Concepcion and Reyes J.B.L., JJ., concur.
Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator vs. ANDRE BRIMO
50 PHIL 867

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-22595

November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee,

vs.
ANDRE BRIMO, opponent-appellant.
Ross, Lawrence and Selph for appellant.
Camus and Delgado for appellee.

ROMUALDEZ, J.:
The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.
The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers
of the deceased, opposed it. The court, however, approved it.
The errors which the oppositor-appellant assigns are:
(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the
denial of the motion for reconsideration of the order approving the partition; (4) the approval of the
purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said
business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the failure
not to postpone the approval of the scheme of partition and the delivery of the deceased's business
to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws.
The appellant's opposition is based on the fact that the partition in question puts into effect the
provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish
nationality, for which reason they are void as being in violation or article 10 of the Civil Code which,
among other things, provides the following:
Nevertheless, legal and testamentary successions, in respect to the order of succession as
well as to the amount of the successional rights and the intrinsic validity of their provisions,
shall be regulated by the national law of the person whose succession is in question,
whatever may be the nature of the property or the country in which it may be situated.
But the fact is that the oppositor did not prove that said testimentary dispositions are not in
accordance with the Turkish laws, inasmuch as he did not present any evidence showing what the
Turkish laws are on the matter, and in the absence of evidence on such laws, they are presumed to
be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36 Phil., 472.)
It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it
when he desires to be given an opportunity to present evidence on this point; so much so that he
assigns as an error of the court in not having deferred the approval of the scheme of partition until
the receipt of certain testimony requested regarding the Turkish laws on the matter.
The refusal to give the oppositor another opportunity to prove such laws does not constitute an error.
It is discretionary with the trial court, and, taking into consideration that the oppositor was granted
ample opportunity to introduce competent evidence, we find no abuse of discretion on the part of the
court in this particular. There is, therefore, no evidence in the record that the national law of the
testator Joseph G. Brimo was violated in the testamentary dispositions in question which, not being
contrary to our laws in force, must be complied with and executed.
lawphil.net

Therefore, the approval of the scheme of partition in this respect was not erroneous.
In regard to the first assignment of error which deals with the exclusion of the herein appellant as a
legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into
consideration that such exclusion is based on the last part of the second clause of the will, which
says:
Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship
having been conferred upon me by conquest and not by free choice, nor by nationality and,
on the other hand, having resided for a considerable length of time in the Philippine Islands
where I succeeded in acquiring all of the property that I now possess, it is my wish that the
distribution of my property and everything in connection with this, my will, be made and
disposed of in accordance with the laws in force in the Philippine islands, requesting all of
my relatives to respect this wish, otherwise, I annul and cancel beforehand whatever
disposition found in this will favorable to the person or persons who fail to comply with this
request.
The institution of legatees in this will is conditional, and the condition is that the instituted legatees
must respect the testator's will to distribute his property, not in accordance with the laws of his
nationality, but in accordance with the laws of the Philippines.
If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the
herein oppositor who, by his attitude in these proceedings has not respected the will of the testator,
as expressed, is prevented from receiving his legacy.
The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil
Code provides the following:
Impossible conditions and those contrary to law or good morals shall be considered as not
imposed and shall not prejudice the heir or legatee in any manner whatsoever, even should
the testator otherwise provide.
And said condition is contrary to law because it expressly ignores the testator's national law when,
according to article 10 of the civil Code above quoted, such national law of the testator is the one to
govern his testamentary dispositions.
Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the
institution of legatees in said will is unconditional and consequently valid and effective even as to the
herein oppositor.
It results from all this that the second clause of the will regarding the law which shall govern it, and to
the condition imposed upon the legatees, is null and void, being contrary to law.
All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and
effective it not appearing that said clauses are contrary to the testator's national law.
Therefore, the orders appealed from are modified and it is directed that the distribution of this estate
be made in such a manner as to include the herein appellant Andre Brimo as one of the legatees,
and the scheme of partition submitted by the judicial administrator is approved in all other respects,
without any pronouncement as to costs.

So ordered.
Street, Malcolm, Avancea, Villamor and Ostrand, JJ., concur.

BELLIS vs BELLIS
20 SCRA 358
Bugnao v. Ubag
14 PHIL 163
JULIANA BAGTAS, plaintiffs-appellee, vs. ISIDRO PAGUIO, ET AL., defendants-appellants.
22 PHIL 227
TRINIDAD NEYRA, plaintiff-appellant, vs. ENCARNACION NEYRA, defendant-appellee
76 PHIL 333
In
re
estate
of
Piraso,
deceased.
vs. SALMING PIRASO, ET AL., opponents-appellees.
52 PHIL 660

SIXTO

ACOP, petitioner-appellant,

GERMAN JABONETA, plaintiff-appellant, vs. RICARDO GUSTILO, ET AL., defendantsappellees.

5 PHIL 541
EUTIQUIA AVERA, petitioner-appellee, vs. MARINO GARCIA, and JUAN RODRIGUEZ, as
guardian of the minors Cesar Garcia and Jose Garcia,objectors-appellants
42 PHIL 45
IN THE MATTER OF THE TESTATE ESTATE OF THE LATE JOSEFA VILLACORTE.
CELSO ICASIANO, petitioner-appellee, vs. NATIVIDAD ICASIANO and ENRIQUE
ICASIANO, oppositors-appellants.
11 SCRA 423
Testate estate of the late VICENTE CAGRO. JESUSA CAGRO, petitioner-appellee,
PELAGIO CAGRO, ET AL., oppositors-appellants.
92 PHIL 1033

vs.

BEATRIZ NERA, ET AL., plaintiffs-appellees, vs. NARCISA RIMANDO, defendant-appellant..

18 PHIL 450
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