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- Institution of Heir
Art. 856. A voluntary heir who dies before the testator transmits nothing to his heirs.
Art. 840. Institution of heir is an act by virtue of which a testator designates in his will the person or
persons who are to succeed him in his property and transmissible rights and obligations. (n)
Art. 841. A will shall be valid even though it should not contain an institution of an heir, or such
institution should not comprise the entire estate, and even though the person so instituted should
not accept the inheritance or should be incapacitated to succeed.
In such cases the testamentary dispositions made in accordance with law shall be complied with and
the remainder of the estate shall pass to the legal heirs. (764)
Art. 842. One who has no compulsory heirs may dispose by will of all his estate or any part of it in
favor of any person having capacity to succeed.
One who has compulsory heirs may dispose of his estate provided he does not contravene the
provisions of this Code with regard to the legitime of said heirs. (763a)
Art. 843. The testator shall designate the heir by his name and surname, and when there are two
persons having the same names, he shall indicate some circumstance by which the instituted heir
may be known.
Even though the testator may have omitted the name of the heir, should he designate him in such
manner that there can be no doubt as to who has been instituted, the institution shall be valid. (772)
Art. 844. An error in the name, surname, or circumstances of the heir shall not vitiate the institution
when it is possible, in any other manner, to know with certainty the person instituted.
If among persons having the same names and surnames, there is a similarity of circumstances in
such a way that, even with the use of the other proof, the person instituted cannot be identified,
none of them shall be an heir. (773a)
Art. 845. Every disposition in favor of an unknown person shall be void, unless by some event or
circumstance his identity becomes certain. However, a disposition in favor of a definite class or
group of persons shall be valid. (750a)
Art. 846. Heirs instituted without designation of shares shall inherit in equal parts. (765)
Art. 847. When the testator institutes some heirs individually and others collectively as when he
says, "I designate as my heirs A and B, and the children of C," those collectively designated shall be
considered as individually instituted, unless it clearly appears that the intention of the testator was
otherwise. (769a)
Art. 848. If the testator should institute his brothers and sisters, and he has some of full blood and
others of half blood, the inheritance shall be distributed equally unless a different intention appears.
Art. 849. When the testator calls to the succession a person and his children they are all deemed to
have been instituted simultaneously and not successively. (771)
Art. 850. The statement of a false cause for the institution of an heir shall be considered as not
written, unless it appears from the will that the testator would not have made such institution if he
had known the falsity of such cause. (767a)
Art. 851. If the testator has instituted only one heir, and the institution is limited to an aliquot part of
the inheritance, legal succession takes place with respect to the remainder of the estate.
The same rule applies if the testator has instituted several heirs, each being limited to an aliquot
part, and all the parts do not cover the whole inheritance. (n)
Art. 852. If it was the intention of the testator that the instituted heirs should become sole heirs to
the whole estate, or the whole free portion, as the case may be, and each of them has been
instituted to an aliquot part of the inheritance and their aliquot parts together do not cover the whole
inheritance, or the whole free portion, each part shall be increased proportionally. (n)
Art. 853. If each of the instituted heirs has been given an aliquot part of the inheritance, and the
parts together exceed the whole inheritance, or the whole free portion, as the case may be, each
part shall be reduced proportionally. (n)
Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in the direct line,
whether living at the time of the execution of the will or born after the death of the testator, shall
annul the institution of heir; but the devises and legacies shall be valid insofar as they are not
If the omitted compulsory heirs should die before the testator, the institution shall be effectual,
without prejudice to the right of representation. (814a)
Art. 855. The share of a child or descendant omitted in a will must first be taken from the part of the
estate not disposed of by the will, if any; if that is not sufficient, so much as may be necessary must
be taken proportionally from the shares of the other compulsory heirs. (1080a)

A compulsory heir who dies before the testator, a person incapacitated to succeed, and one who
renounces the inheritance, shall transmit no right to his own heirs except in cases expressly provided
for in this Code. (766a)
Austria vs Reyes
On July 7, 1956 Basilia Austria vda. de Cruz filed with the Court of First Instance of Rizal (Special
Proceedings 2457) a petition for probate, ante mortem, of her last will and testament. The probate
was opposed by the present petitioners Ruben Austria, Consuelo Austria-Benta and Lauro Austria
Mozo, and still others who, like the petitioner, are nephews and nieces of Basilia.
This opposition was, however,dismissed and the probate of the will allowed after due hearing.
The bulk of the estate of Basilia, admittedly, was destined under the will to pass on to the
respondents Perfecto Cruz, Benita Cruz-Menez, Isagani Cruz, Alberto Cruz, and Luz Cruz-Salonga, all
of whom had been assumed and declared by Basilia as her own legally adopted children -- two years
after her will was allowed to probate, Basilia died.
The respondent Perfecto Cruz wasappointed executor without bond by the same court in accordance
with the provisions of the decedent's will, notwithstanding the blocking attempt pursued by the
petitioner Ruben Austria.
present petitioners filed in the same proceedings a petition in intervention for partition alleging in
substance that they are the nearest of kin of Basilia, and that the five respondents Perfecto Cruz, et
al., had not in fact been adopted by the decedent in accordance with law, in effect rendering these
respondents mere strangers to the decedent and without any right to succeed as heirs. the court a
quo allowed the petitioners' intervention the contending sides debated the matter of authenticity or
lack of it of the several adoption papers produced and presented by the respondents. On motion of
the petitioners Ruben Austria, et al., these
documents were referred to the National Bureau of Investigation for examination and advice. more
than three years after they were allowed to intervene, the petitioners Ruben Austria, let al., moved
the lower court to set for hearing the matter of the genuineness of the adoption of the respondents.
however, the respondent Benita Cruz-Menez who entered an appearance separately from
that of her brother Perfecto Cruz, filed on February 28, 1963 a motion asking the lower court, by way
alternative relief, to confine the petitioners' intervention, should it be permitted, to properties not
disposed of in the will of the decedent.
the lower court issued an order on June 4, 1963, delimiting the petitioners' intervention to the
properties of the deceased which were not disposed of in the will. The petitioners moved the lower
court to reconsider this latest order, eliciting thereby an opposition, from the respondents. On
October 25, 1963 the same court denied the petitioners' motion for reconsideration.
Hence this petition for certiorari, praying this Court to annul the orders of June 4 and October 25,
1963 and the order of April 21, 1964, all restricting petitioners' intervention to properties that were
not included in the decedent's testamentary dispositions.
ISSUE: W/N the institution of heirs as to respondents are valid
Before the institution of heirs may be annulled under article 850 of the Civil Code, the following
requisites must concur: First, the cause for the institution of heirs must be stated in the will; second,
the cause must be shown to be false; and third, it must appear from the face of the will that the
testator would not have made such institution if he had known the falsity of the cause.
The petitioners would have us imply, from the use of the terms, "sapilitang tagapagmana"
(compulsory heirs) and "sapilitang mana" (legitime), that the impelling reason or cause for the
institution of the respondents was the testatrix's belief that under the law she could not do
otherwise. If this were indeed what prompted the testatrix in instituting the respondents, she did not
make it known in her will. But even this, like the petitioners' own proposition, is highly speculative of
what was in the mind of the testatrix when she executed her will.
One fact prevails, however, and it is that the decedent's will does not state in a specific or
unequivocal manner the cause for such institution of heirs. We cannot annul the same on the basis of
guesswork or uncertain implications. And even if we should accept the petitioners' theory that the
decedent instituted the respondents Perfecto Cruz, et al. solely because she believed that the law
commanded her to do so, on the false assumption that her adoption of these respondents was valid,
still such institution must stand. Whatever doubts one entertains in his mind should be swept away

by these explicit injunctions in the Civil Code: "The words of a will are to receive an interpretation
which will give to every expression some effect, rather than one which will render any of the
expressions inoperative; and of two modes of interpreting a will, that is to be preferred which will
prevent intestacy."
Nugid Vs Nugid

committee on claims and appraisal, said heiress shall receive and enjoy the whole hereditary estate.
Although this clause provides nothing explicit about substitution, it does not contain anything in
conflict with the idea of fideicommissary substitution. The fact that the plaintiff was instituted the
sole and universal heiress does not prevent her children from receiving, upon her death and in
conformity with the express desire of the testatrix, the latter's hereditary estate.
The disposition contained in clause IX, that said heiress shall receive and enjoy the estate, is not
incompatible with a fideicommissary substitution (it certainly is incompatible with the idea of simple
substitution, where the heiress instituted does not receive the inheritance). In fact the enjoyment of
the inheritance is in conformity with the idea of fideicommissary substitution, by virtue of which the
heir instituted receives the inheritance and enjoys it, although at the same time he preserves it in
order to pass it on the second heir.

Rosario Nuguid, a resident of Quezon City, died on December 30, 1962, single, without descendants,
legitimate or illegitimate. Surviving her were her legitimate parents, Felix Nuguid and Paz Salonga
Nuguid, and six (6) brothers and sisters.
Petitioner Remedios Nuguid, one of Rosarios sisters filed in the Court of First Instance of Rizal a
holographic will allegedly executed by Rosario Nuguid Petitioner prayed that said will be admitted to
probate and that letters of administration with the will annexed be issued to her. Felix Nuguid and
Paz Salonga Nuguid, concededly the legitimate father and mother of the deceased Rosario Nuguid,
entered their opposition to the probate of her will. Ground therefor, inter alia, is that by the
institution of petitioner Remedios Nuguid as universal heir of the deceased, oppositors who are
compulsory heirs of the deceased in the direct ascending line were illegally preterited and that in
consequence the institution is void.
The court's order of November 8, 1963, held that "the will in question is a complete nullity and will
perforce create intestacy of the estate of the deceased Rosario Nuguid" and dismissed the petition
Motion for Reconsideration was also denied
Isssue: Whether institution of Remedios as the sole and universal heir preterited the compulsory
Held: Yes.
The statute we are called upon to apply in Article 854 of the Civil Code which, in part, provides: ART.
854. The preterition or omission of one, some, or all of the compulsory heirs in the direct line,
whether living at the time of the execution of the will or born after the death of the testator, shall
annul the institution of heir; but the devises and legacies shall be valid insofar as they are not
inofficious. ...
The deceased Rosario Nuguid left no descendants, legitimate or illegitimate. But she left forced heirs
in the direct ascending line her parents, now oppositors Felix Nuguid and Paz Salonga Nuguid. And,
the will completely omits both of them: They thus received nothing by the testament; tacitly, they
were deprived of their legitime; neither were they expressly disinherited. This is a clear case of
preterition. The one sentence will here institutes petitioner as the sole, universal heir nothing
Disinheritance, in turn, "is a testamentary disposition depriving any compulsory heir of his share in
the legitime for a cause authorized by law.
Perez vs Gatchitorena
The amount of P21,428.58 is on deposit in the plaintiff's name with the association known as La
Urbana in Manila, as the final payment of the liquidated credit of Ana Maria Alcantara, deceased,
whose heiress is said plaintiff, against Andres Garchitorena, also deceased, represented by his son,
the defendant Mariano Garchitorena. Mariano Garchitorena held a judgment for P7,872.23 against
Joaquin Perez Alcantara, husband of the plaintiff, Carmen G. de Perez.
The sheriff pursuant to the writ of execution issued in said judgment, levied an attachment on said
amount deposited with La Urbana.
The plaintiff, alleging that said deposit belongs to the fideicommissary heirs of the decedent Ana
Maria Alcantara, secured a preliminary injunction restraining the execution of said judgment on the
sum so attached.
The court below held that said La Urbana deposit belongs to the plaintiff's children as
fideicommissary heirs of Ana Maria Alcantara, and granted a final writ of injunction.
ISSUE: Whether in the 9th-11thclauses the testatrix has ordered a simple substitution or
fideicommissary substitution.

Fideicommissary substitution.
In clause IX, the testatrix institutes the plaintiff herein her sole and universal heiress, and provides
that upon her death (the testatrix's) and after probate of the will and approval of the report of the

It should also be noted that said clause IX vests in the heiress only the right to enjoy but not the right
to dispose of the estate. It says, she may enjoy it, but does not say she may dispose of it. This is an
indication of the usufruct inherent in fideicommissary substitution.
Clause X expressly provides for the substitution. It is true that it does not say whether the death of
the heiress herein referred to is before or after that of the testatrix; but from the whole context it
appears that in making the provisions contained in this clause X, the testatrix had in mind a
fideicommissary substitution, since she limits the transmission of her estate to the children of the
heiress by this provision, "in such wise that my estate shall never pass out of the hands of my
heiress or her children in so far as it is legally possible." Here it clearly appears that the testatrix
tried to avoid the possibility that the substitution might later be legally declared null for transcending
the limits fixed by article 781 of the Civil Code which prescribed that fideicommissary substitutions
shall be valid "provided they do not go beyond the second degree."
Another clear and outstanding indication of fideicommissary substitution in clause X is the provision
that the wholeestate shall pass unimpaired to the heiress's children, that is to say the heiress is
required to preserve the whole estate, without diminution, in order to pass it on in due time to the
fideicommissary heirs.
Lastly, clause XI more clearly indicates the idea of fideicommissary substitution, when a provision is
therein made in the event the heiress should die after the testatrix. That is, said clause anticipates
the case where the instituted heiress should die after the testatrix and after receiving and enjoying
the inheritance.
The foregoing leads us to the conclusion that all the requisites of a fideicommissary substitution,
according to the quotation from Manresa above inserted, are present in the case of substitution now
under consideration, to wit:
1. At first heir primarily called to the enjoyment of the estate. In this case the plaintiff was instituted
an heiress, called to the enjoyment of the estate, according to clause IX of the will.
2. An obligation clearly imposed upon the heir to preserve and transmit to a third person the whole
or a part of the estate. Such an obligation is imposed in clause X which provides that the "whole
estate shall pass unimpaired to her (heiress's)
surviving children;" thus, instead of leaving the heiress at liberty to dispose of the estate by will, or
of leaving the law to take its course in case she dies intestate, said clause not only disposes of the
estate in favor of the heiress instituted, but also provides for the disposition thereof in case she
should die after the testatrix.
3. A second heir. Such are the children of the heiress instituted, who are referred to as such second
heirs both in clause X and in clause XI.
Finally, the requisite added by the decision of November 18, 1918, to wit, that the fideicommissarius
or second heir should be entitled to the estate from the time of the testator's death, which in the
instant case, is, rather than a requisite, a necessary consequence derived from the nature of the
fideicommissary substitution, in which the second heir does not inherit from the heir first instituted,
but from the testator.
Charles Newton Hodges and Linnie Jane Hodges were originally from Texas, USA.
During their marriage they have accumulated and acquired several assets and properties in the
Philippines and in Oklahoma and Texas, US.
They both lived, worked and domiciled in Iloilo City for 50 years.
Before her death Linnie executed a will in Iloilo City on November 22, 1952 which provides that:

All her just debts and funeral expenses be first paid out of her estate She bequeath all rights and
ownership of the rest of her properties, personal and real wherever situated or located to her
husband Charles Newton Hodge
However, he shall not sell or otherwise dispose of any of the IMPROVED property
owned by them located at, in or near the City of Lubbock, Texas, but he shall have
the full right to lease, manage and enjoy the same during his lifetime. He shall have the right to
subdivide any farm land and sell lots therein, and may sell UNIMPROVED town lots.
At the death of her husband, she bequeath ALL of the rest, residue and remainder of her estate real
and personal to be equally divided among her brothers and sisters.
In case of the death of her brothers and/or sisters, prior to the death of her husband, that the heirs of
such deceased brother or sister shall take jointy the share which could have gone to such brother or
Her husband be nominated and appointed as the executor or her will and that no direct bond or
other security be required of him as such executor
No action be had in the probate court in the administration of my estate other than that necessary to
prove and record this will and to return an inventory and appraisement of my estate and list of
This will was subsequently probated in with the widower Charles Newton Hodges being appointed as
Executor, pursuant to the provisions thereof.
Charles dies in Iloilo in December 1962 without having liquidated Linnies estate which include his
share in the conjugal partnership.
Avelina Magno, a long time employee of the Hodges, was appointed asAdministratrix for Linnies
estate and a Special Administratrix for Charles. But was later replaced by one Harold Davies
(representatives of Charles heir in the US) was designated as Co-Special Administrator which was
also later replaced by Joe Hodges.
The Supreme Court was very much confused about the gaps in the facts, convinced that the parties
representing both estates had cooked up a MODUS OPERANDI to settle money matters (a settlement
with records which the Court never saw) which went twisted with several heirs from the US goint to
Iloilo and lawyers filing their respective claims for retainer fees.
Thereafter PCIB became the administrator of Charles estate asserting a claim to all of his estate,
including properties and assets that passed to him upon Linnies death.
Avelina opposed as Linnies other heirs (the Higdons) would be prejudiced. Avelina continued to
enter into several conveyances ( as acting administrator) which prompted PCIB to dismiss her as an
employee of Charles estate. As a result, Avelina locked up one of the estates properties being used
by PCIB as offices.
PCIBs contention:

There are generally only two kinds of substitution provided for and authorized by our Civil Code
(Articles 857-870), namely, (1) simple or common substitution, sometimes referred to as vulgar
substitution (Article 859), and (2) fideicommissary substitution (Article 863).
IN THE PRESENT CASE : the substitution provided for by paragraph four of the Will of Linnie Jane
Hodges is not fideicommissary substitution, because there is clearly no obligation on the part of C. N.
Hodges as the first heir designated, to preserve the
properties for the substitute heirs. At most, it is a vulgar or simple substitution. However, in order
that a vulgar or simple substitution can be valid, three alternative conditions must be present,
namely, that the first designated heir (1) should die before the testator; or (2) should not wish to
accept the inheritance; or (3) should be incapacitated to do so. None of these conditions apply, to C.
N. Hodges, and, therefore, the substitution provided for by the above-quoted provision of the Will is
not authorized by the Code, and, therefore, it is void. Manresa, commenting on these kinds of
substitution, meaningfully stated that: when another heir is designated to inherit upon the death of a
first heir, the second designation can have effect only in case the first instituted heir dies before the
testator, whether or not that was the true intention of said testator. Since C. N. Hodges did not die
before Linnie Jane
Hodges, the provision for substitution contained in Linnie Jane Hodges' Will is void.
WON there is substitution of heirs. HELD: NONE
Article 859
o The testator may designate one or more persons to substitute the heir or heirs instituted in case
such heir or heirs should die before him, or should not wish, or should be incapacitated to accept the

o A simple substitution, without a statement of the cases to which it refers, shall comprise the three
mentioned in the preceding paragraph, unless the testator has otherwise provided.
In view of the invalidity of the provision for substitution in the Will, C. N. Hodges'
inheritance to the entirety of the Linnie Jane Hodges estate is irrevocable and final.
Thus, it can be seen that at the time of the death of Hodges, there was already the pending judicial
settlement proceeding of the estate of Mrs. Hodges, and, more importantly, that the former was the
executor of the latter's will who had, as such, failed for more than five years to see to it that the
same was terminated earliest, since from ought that appears in the record, there were no serious
obstacles on the way, the estate not being indebted and there being no immediate heirs other than
Hodges himself. Such dilatory or indifferent attitude could only spell possible prejudice of his coheirs, whose rights to inheritance depend entirely on the existence of any remainder of Mrs. Hodges'
share in the community properties, and who are now faced with the pose of PCIB that there is no
such remainder.
It may be stated that we are not overlooking the fact that it is PCIB's contention that, the
testamentary disposition in favor of Mrs. Hodges' brothers and sisters may not be given effect. To a
certain extent, this contention is correct. Indeed, Mrs. Hodges' will provides neither for a simple or
vulgar substitution under Article 859 of the Civil Code nor for a fideicommissary substitution under
Article 863 thereof. There is no vulgar substitution therein because there is no provision for either
(1) predecease of the testator by the designated heir or (2) refusal or (3) incapacity of the latter to
accept the inheritance, as required by Article 859; and neither is there a fideicommissary
substitution therein because no obligation is imposed thereby upon Hodges to preserve the estate or
any part thereof for anyone else. But from these premises, it is not correct to jump to the conclusion,
as PCIB does, that the testamentary dispositions in question are therefore inoperative and invalid.
The error in PCIB's position lies simply in the fact that it views the said disposition exclusively in the
light of substitutions covered by the Civil Code section on that subject, (Section 3, Chapter 2, Title IV,
Book III) when it is obvious that substitution occurs only when another heir is appointed in a will "so
that he may enter into inheritance in default of the heir originally instituted," (Article 857.) and,
IN THE PRESENT CASE, no such possible default is contemplated. The brothers and sisters of Mrs.
Hodges are not substitutes for Hodges because, under her will, they are not to inherit what Hodges
cannot, would not or may not inherit, but what he would not dispose of from his
inheritance; rather, therefore, they are also heirs instituted simultaneously with Hodges, subject,
however, to certain conditions, partially resolutory insofar as Hodges was concerned and
correspondingly suspensive with reference to his brothers and sisters-in-law. It is partially resolutory,
since it bequeaths unto Hodges the whole of her estate to be owned and enjoyed by him
as universal and sole heir with absolute dominion over them only during his lifetime, which means
that while he could completely and absolutely dispose of any portion thereof inter vivos to anyone
other than himself, he was not free to do so mortis causa, and all his rights to what might remain
upon his death would cease entirely upon the occurrence of that contingency, inasmuch as the right
of his brothers and sisters-in-law to the inheritance, although vested already upon the death of Mrs.
Hodges, would automatically become operative upon the occurrence of the death of Hodges in the
event of actual existence of any remainder of her estate then. Had Hodges secured as early as
possible the settlement of his wife's estate, this problem would not arisen.
STATED otherwise, The COURToverrule PCIB's contention that the provision in Mrs. Hodges' will in
favor of her brothers and sisters constitutes ineffective hereditary substitutions. But neither is the
COURT sustaining, on the other hand, Magno's pose that it gave Hodges only a lifetime usufruct. We
hold that by said provision, Mrs. Hodges simultaneously instituted her brothers and sisters as coheirs with her husband, with the condition, however, that the latter would have complete rights of
dominion over the whole estate during his lifetime and what would go to the
former would be only the remainder thereof at the time of Hodges' death. In other words, whereas
they are not to inherit only in case of default of Hodges, on the other hand, Hodges was not obliged
to preserve anything for them. Clearly then, the essential elements of testamentary substitution are
absent; the provision in question is a simple case of conditional simultaneous institution of heirs,
whereby the institution of Hodges is subject to a partial resolutory condition the operative
contingency of which is coincidental with that of the suspensive condition of the institution of his
brothers and sisters-in-law, which manner of institution is not prohibited by law.

WE ARE FULLY CONVINCED that the interests of justice will be better served by not permitting or
allowing PCIB or any administrator of the estate of Hodges exclusive administration of all the
properties in question. We are of the considered opinion and so hold that what would be just and
proper is for both administrators of the two estates to act conjointly until after said estates have
been segregated from each other.


FACTS: Don Julian L. Teves (Don Julian) contracted two marriages, first with Antonia Baena, and after
her death, with Milagros Donio. Don Julian had two children with Antonia. He had also four children
with Milagros Donio.
The present controversy involves a parcel of land covering nine hundred and fifty-four (954) square
meters, known as Lot No. 63 of the Bais Cadastre, which was originally registered in the name of the
conjugal partnership of Don Julian and Antonia under Original Certificate of Title (OCT) No. 5203 of
the Registry of Deeds of Bais City. When Antonia died, the land was among the properties involved in
an action for partition and damages thereafter, the parties to the case entered into a Compromise
Agreement[5] which embodied the partition of all the properties of Don Julian.
On the basis of the compromise agreement and approving the same, the Court of First Instance (CFI)
of Negros Oriental rendered a Decision dated 31 January 1964. The CFI decision declared a tract of
land known as Hacienda Medalla Milagrosa as property owned in common by Don Julian and his two
(2) children of the first marriage. The property was to remain undivided during the lifetime of Don
Paragraph 13 of the Compromise Agreement, at the heart of the present dispute, lays down the
effect of the eventual death of Don Julian vis--vis his heirs:
13. That in the event of death of Julian L. Teves, the properties hereinafter adjudicated to Josefa
Teves Escano and Emilio B. Teves, (excluding the properties comprised as Hacienda Medalla
Milagrosa together with all its accessories and accessions) shall be understood as including not only
their one-half share which they inherited from their mother but also the legitimes and other
successional rights which would correspond to them of the other half belonging to their father, Julian
L. Teves. In other words, the properties now selected and adjudicated to Julian L. Teves (not including
his share in the Hacienda Medalla Milagrosa) shall exclusively be adjudicated to the wife in second
marriage of Julian L. Teves and his four minor children, namely, Milagros Donio Teves, his two
acknowledged natural children Milagros Reyes Teves and Pedro Reyes Teves and his two legitimated
children Maria Evelyn Donio Teves and Jose Catalino Donio Teves.
Don Julian, Emilio and Josefa executed a Deed of Assignment of Assets with Assumption of
Liabilities[8] in favor of J.L.T. Agro, Inc. (petitioner). Less than a year later, Don Julian, Josefa and
Emilio also executed an instrument entitled Supplemental to the Deed of Assignment of Assets with
the Assumption of Liabilities (Supplemental Deed)[9] dated 31 July 1973. This instrument which
constitutes a supplement to the earlier deed of assignment transferred ownership over Lot No. 63,
among other properties, in favor of petitioner.[10] On 14 April 1974, Don Julian died intestate.
On the strength of the Supplemental Deed in its favor, petitioner sought the registration of the
subject lot in its name. TCT No. T-375 was issued in the name of petitioner.[12] Since then, petitioner
has been paying taxes assessed on the subject lot.
Meanwhile, Milagros Donio and her children had immediately taken possession over the subject lot
after the execution of the Compromise Agreement. In 1974, they entered into a yearly lease
agreement with spouses Antonio Balansag and Hilaria Cadayday, respondents herein.
On Lot No. 63, respondents temporarily established their home and constructed a lumber yard.
Subsequently, Milagros Donio and her children executed a Deed of Extrajudicial Partition of Real
Estate[15] dated 18 March 1980. In the deed of partition, Lot No. 63 was allotted to Milagros Donio
and her two (2) children, Maria Evelyn and Jose Catalino. Unaware that the subject lot was already
registered in the name of petitioner in 1979, respondents bought Lot No. 63 from Milagros Donio as
evidenced by the Deed of Absolute Sale of Real Estate[16] dated 9 November 1983.
At the Register of Deeds while trying to register the deed of absolute sale, respondents discovered
that the lot was already titled in the name of petitioner. Thus, they failed to register the
Respondents, as vendees of Lot No. 63, filed a complaint before the RTC Branch 45 of Bais City,
seeking the declaration of nullity and cancellation of TCT No. T-375 in the name of petitioner and the
transfer of the title to Lot No. 63 in their names, plus damages.[18]
After hearing, the trial court dismissed the complaint filed by respondents
According to the trial court, the properties adjudicated in favor of Josefa and Emilio comprised their
shares in the estate of their deceased mother Antonia, as well as their potential share in the estate
of Don Julian upon the latters death. Thus, upon Don Julians death, Josefa and Emilio could not claim
any share in his estate, except their proper share in the Hacienda Medalla Milagrosa which was
adjudicated in favor of Don Julian in the Compromise Agreement. As such, the properties adjudicated
in favor of Don Julian, except Hacienda Medalla Milagrosa, were free from the forced legitimary rights
of Josefa and Emilio, and Don Julian was under no impediment to allocate the subject lot, among his
other properties, to Milagros Donio and her four (4) children

The Court of Appeals, however, reversed the trial courts decision.

the Compromise Agreement incorporated in CFI decision dated 31 January 1964, particularly
paragraph 13 thereof, determined, adjudicated and reserved to Don Julians two sets of heirs their
future legitimes in his estate except as regards his (Don Julians) share in Hacienda Medalla
Milagrosa.[29] The two sets of heirs acquired full ownership and possession of the properties
respectively adjudicated to them in the CFI decision and Don Julian himself could no longer dispose
of the same, including Lot No. 63. The disposition in the CFI decision constitutes res judicata.[30]
Don Julian could have disposed of only his conjugal share in the Hacienda Medalla Milagrosa
The appellate court likewise emphasized that nobody in his right judgment would preterit his legal
heirs by simply executing a document like the Supplemental Deed which practically covers all
properties which Don Julian had reserved in favor of his heirs from the second marriage.
Hence this petition for certiorari
ISSUE: 1. W/N that future legitime can be determined, adjudicated and reserved prior to the death of
Don Julian
2. W/N Don Julian had validly transferred ownership of the subject lot during his lifetime to herein
Article 1080 authorizes a testator to partition inter vivos his property, and distribute them among his
heirs, and this partition is neither a donation nor a testament, but an instrument of a special
character, sui generis, which is revocable at any time by the causante during his lifetime, and does
not operate as a conveyance of title until his death. It derives its binding force on the heirs from the
respect due to the will of the owner of the property, limited only by his creditors and the intangibility
of the legitime of the forced heirs
2. NO.
There is no preterition where the testator allotted to a descendant a share less than the legitime,
since there was no total omission of a forced heir.
In the case at bar, Don Julian did not execute a will since what he resorted to was a partition inter
vivos of his properties, as evidenced by the court approved Compromise Agreement. Thus, it is
premature if not irrelevant to speak of preterition prior to the death of Don Julian in the absence of a
will depriving a legal heir of his legitime. Besides, there are other properties which the heirs from the
second marriage could inherit from Don Julian upon his death. A couple of provisions in the
Compromise Agreement are indicative of Don Julians desire along this line.[48] Hence, the total
omission from inheritance of Don Julians heirs from the second marriage, a requirement for
preterition to exist, is hardly imaginable as it is unfounded.
*********note that petitioners theory is based on preterition of the heirs when the decedent decided
to assign the legitime to them so the SC discussed about preterition
SECTION 3. - Substitution of Heirs
Art. 857. Substitution is the appointment of another heir so that he may enter into the inheritance in
default of the heir originally instituted. (n)
Art. 858. Substitution of heirs may be:
(1) Simple or common;
(2) Brief or compendious;
(3) Reciprocal; or
(4) Fideicommissary. (n)
Art. 859. The testator may designate one or more persons to substitute the heir or heirs instituted in
case such heir or heirs should die before him, or should not wish, or should be incapacitated to
accept the inheritance.
A simple substitution, without a statement of the cases to which it refers, shall comprise the three
mentioned in the preceding paragraph, unless the testator has otherwise provided. (774)
Art. 860. Two or more persons may be substituted for one; and one person for two or more heirs.

Art. 861. If heirs instituted in unequal shares should be reciprocally substituted, the substitute shall
acquire the share of the heir who dies, renounces, or is incapacitated, unless it clearly appears that
the intention of the testator was otherwise. If there are more than one substitute, they shall have the
same share in the substitution as in the institution. (779a)

Art. 867. The following shall not take effect:

Art. 862. The substitute shall be subject to the same charges and conditions imposed upon the
instituted heir, unless and testator has expressly provided the contrary, or the charges or conditions
are personally applicable only to the heir instituted. (780)

(1) Fideicommissary substitutions which are not made in an express manner, either by giving them
this name, or imposing upon the fiduciary the absolute obligation to deliver the property to a second

Art. 863. A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is
entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the
inheritance, shall be valid and shall take effect, provided such substitution does not go beyond one
degree from the heir originally instituted, and provided further, that the fiduciary or first heir and the
second heir are living at the time of the death of the testator. (781a)

(2) Provisions which contain a perpetual prohibition to alienate, and even a temporary one, beyond
the limit fixed in article 863;
(3) Those which impose upon the heir the charge of paying to various persons successively, beyond
the limit prescribed in article 863, a certain income or pension;
(4) Those which leave to a person the whole part of the hereditary property in order that he may
apply or invest the same according to secret instructions communicated to him by the testator.

Art. 864. A fideicommissary substitution can never burden the legitime. (782a)
Art. 868. The nullity of the fideicommissary substitution does not prejudice the validity of the
institution of the heirs first designated; the fideicommissary clause shall simply be considered as not
written. (786)
Art. 869. A provision whereby the testator leaves to a person the whole or part of the inheritance,
and to another the usufruct, shall be valid. If he gives the usufruct to various persons, not
simultaneously, but successively, the provisions of Article 863 shall apply. (787a)

Art. 865. Every fideicommissary substitution must be expressly made in order that it may be valid.
The fiduciary shall be obliged to deliver the inheritance to the second heir, without other deductions
than those which arise from legitimate expenses, credits and improvements, save in the case where
the testator has provided otherwise. (783)
Art. 866. The second heir shall acquire a right to the succession from the time of the testator's death,
even though he should die before the fiduciary. The right of the second heir shall pass to his heirs.

Art. 870. The dispositions of the testator declaring all or part of the estate inalienable for more than
twenty years are void. (n)