Two parcels of land were registered in the names of Ancieto Yanes, father of herein respondents alright?

Were talking about an Original Certificate of Title alright (OCT)? Now for some reason a certain Fortunato
Santiago was issued a Transfer Certificate of Tittle (TCT), meaning there was a transfer of ownership, in
what mode? most probably a sale. Santiago then sold the lots to Monico Fuentebella. Then the lots were
sold thereafter to Rosendo Alvarez. So three TCTs in one sitting everyone seemed to be itching to quickly
dispose it, the first transfer of ownership must be a falsificated sale. So person A is the original owner,
person B got a hold of the title to his property, sold it to person C, who in turn sold it to person D. Oh but wait
there's more. There's a person E. And he's coming, wait for it.
So the Yaneses filed a complaint against the three. Santiago, Fuentebella and Alvarez and wait.. there's one more,
the 4th person imputed in his filed case, only its not a person perse, its a juridical person. The Register of Deeds of
Negros Occidental, which must have been the source of all the falsification. Yanes petitioned the return and
owndership of the lots and prayed for an accounting of the produce of the land from 1944 up to the filing of the
complaint with damages.
Enter person E. Take note. Now during the pendency of the case, Alvarez offered the lots to Dr. Rodolfo Siason. Now
Dr. Siason unsuspecting and unaware of the previous dubitable contracts and the pending case bought the lots.
Comes out the decision, The CFI (Court of First Instance) (This is an old case that's how they call their RTC
then.) ordered Alvarez to reconvey and deliver the possession of the lots to Yanes. Here comes the controversy. The
court order proved to be inexecutable with respect to the one lot since it had been subdivided into two, and they were
in the name of the doctor who purchased them in good faith from Alvarez, and that the lot could not be delivered back
to the plaintiff since Dr. Siason was not a party in the writ of execution.
So the Yaneses filed a petition for the issuance of a new certificate of title and for the declaration of nullity of the TCTs
issued to Alvarez. But the lower court found Siason as a buyer in good faith. Tsk tsk.. it could have stopped in
Alvarez you know, the reconveyance would not have seemed to be a problem you know, but the court saw a 3rd party
liability in here in the person of Siason, and the court just had to protect that, gets?
Meanwhile in the middle of all these Rosendo Alvarez died. He probably couldn't take it anymore. Hahaha.. don't
quote me on that. And so the court ordered the heirs of Alvarez to pay the Yaneses the actual value of the lots, plus
damages. The IAC, meaning Intermediate Appellate Court (Their CA during their time) affirmed the CFI decision
except with regard to the damages. Heirs of Alvarez contends the liability arising from the sale of the lots made by
their father to Dr. Siason should be the sole liability of the late Rosendo Alvarez or of his estate after his death.
ISSUE:
WON the Heirs of Alvarez' contention that the liability arising from the sale of the lots made to Dr. Siason should be
the
sole
liability
of
the
late
Rosendo
Alvarez
or
of
his
estate
after
his
death.
RULING:
NO. - Under our law, the general rule is that a party's contractual rights and obligations are transmissible to the
successors. The pertinent provisions of the Civil Code state:
Art. 774.
Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of
the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of
law.
Art. 776.
The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death.
Art. 1311
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 received from the decedent.
In the Estate of Hemady vs. Luzon Surety Case, the court ruled that:
The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules of
Court that money debts of a deceased must be liquidated and paid from his estate before the residue is distributed

among said heirs (Rule 89). The reason is that whatever payment made from the state is ultimately a payment by the
heirs, since the amount of the paid claim in fact diminishes or reduces the shares that the heirs would have been
entitled to receive.
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father's
transaction, which gave rise to the present claim for damages.
That petitioners did not inherit the property involved is of no moment because by legal fiction, the monetary
equivalent thereof devolved into the mass of their father's hereditary estate, and hereditary assets are always liable in
their totality for the payment of the debts of the estate.
It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance.
Heirs of Alvarez loses this case.