CASE 1: HU NIU v COLLECTOR OF CUSTOMS

FACTS:

A Chinese merchant died in the Philippine islands owning property therein and leaving as
his only heirs at law and next of kin his widow (appellant) and minor children. The
appellant claims to be the wife.

The board of special inquiry refused them permission to enter and that refusal was
affirmed by the Court of First Instance of Manila.

Two questions:
1. as to the right of the widow and the legitimate minor children of a deceased resident
Chinese merchant to enter the Philippine Islands as such widow and children
2. the right of such widow, as a merchant and the successor to her husband, to enter
the said Islands and to bring her children with her

ISSUE # 1
Counsel for the appellant asks us to overrule that decision and
admit the applicants in this case, setting forth with ability
arguments to that end.
“We have held in the case of Ng Hian vs. Collector of
Customs (34 Phil. Rep., 248) that the widow and
minor children of a deceased Chinese merchant
resident and doing business in the Philippine Islands
at the time of his death are not entitled to enter the
Philippine Islands solely by reason of such
relationship.”
RULING: We must say, however, that, after a careful
consideration of such arguments, we are unable to see our way
clear to overrule the former decision and accordingly decline to
do so.
ISSUE # 2
It does not appear in the record of this case that the applicant is
a merchant. It appears simply that her husband was, at the time
of his death, a resident Chinese merchant doing business in the
Philippine Islands, and that he died leaving property including a
mercantile business.
We do not believe that the mere act of the death of a merchant
makes his wife and children also merchants, as it leaves to them
as heirs and next of kin a mercantile business as a part of their
inheritance.
The fact remains that she is not a resident merchant. She is still
outside of the Philippine Islands and has never held the status
of a resident merchant. She must, therefore, establish her right
to enter as a merchant in the first instance. This she did not do.
She did not present the section six certificate which is the only
evidence upon which her right to enter can be based.

From these observations, it necessarily follows that the applicant is not entitled to enter
the Philippine Islands upon the status of her deceased husband; and that when she seeks
to enter upon her own personal status she must produce the evidence which the law
requires to establish that status. Not having done this her application to enter was properly
denied.
CASE 2: FULE V FULE

Saturnino Fule died on the 4th day of April, 1923, intestate.

On the 2d day of July, 1923, Ciriaco Fule, one of the heirs, presented a petition in the Court of First Instance
of the Province of Laguna. The lower court on the day of the presentation of the petition appointed Cornelio
Alcantara as special administrator and required him to give a bond of P8,000. The special administrator
presented in court an inventory of the alleged property of the deceased.

PETITIONER’S PETITION OPPOSITOR’S MOTION

Appointment of an administrator of the estate of
Saturnino Fule, deceased, and prayed specially for
'the appointment of Cornelio Alcantara as such
administrator.
They were children of Saturnino Fule and that they were all of
age.
They opposed the appointment of an administrator upon the
ground that the deceased had left no debts.

His property had already been partitioned among his children

During the pendency of the petition for the
appointment of an administrator, the said Cornelio
Alcantara be then and there appointed as special
administrator for said estate.
Petitioner alleged that at the time of the death of
Saturnino Fule, he was the owner of real and
personal property located in the municipality of San
Pablo, Province of Laguna, of the value of P50,000
with a rental value of about P8,000 and that, in
addition to said real and personal property, he also
left about P30,000 in cash.
during his lifetime in conformity with article 1056 of the Civil
Code.
The special administrator had taken possession of property of
large value belonging to them, and had thereby deprived them
of their means of livelihood.
Prayed that the order appointing a special administrator be
denied.
Appointment of an administrator for said estate, alleging again
that the heirs of Saturnino Fule were all of age;
The deceased had left no debts;

That the property had been divided among his heirs during his
lifetime

The special administrator had been appointed without any

notification whatever, neither personal nor by publication, to the
heirs of the deceased.

There was no necessity for the appointment of a special

administrator during the pendency of the question, nor for the
appointment of an administrator.

The Honorable Isidro Paredes, denied the petition for the appointment of an administrator upon the principal
ground that all of the property of Saturnino Fule had been in the possession of his heirs for many
years before his death; and that at the time of his death there were no debts and no property to be
administered. From that judgment the petitioner appealed.

ISSUE NO. 2
It may be said (a) that it is admitted by all of the parties to the present action, that at the time of his death
no debts existed against his estate and (b) that all of the heirs of Saturnino Fule were of age. In this
jurisdiction and by virtue of the provisions of articles 657, 659 and 661 of the Civil Code, all of the property,
real and personal, of a deceased person who dies intestate, is transmitted immediately to his heirs.

If then the property of the deceased, who dies intestate, passes immediately to his heirs, as owners, and
there are no debts, what reason can there be for the appointment of a judicial administrator to administer
the estate for them and to deprive the real owners of their possession to which they are immediately
entitled?
Chief Justice Cayetano Arellano:

“Under the provisions of the Civil Code (articles 657 to 661), the rights to the succession of a person
are transmitted from the moment of his death; in other words, 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.

In the absence of debts existing against the estate, the heirs may enter upon the administration of
the said property immediately.

If they desire to administer it jointly, they may do so. If they desire to partition it among themselves
and can do this by mutual agreement, they also have that privilege.”

When the heirs are all of lawful age and there are no debts there is no reason why the estate should be
burdened with the cost and expenses of an administrator. The administrator has no right to intervene in any
way whatsoever in the division of the estate among the heirs when they are adults and when there are no
debts against the estate.

When there are no debts and the heirs are all adults, their relation to the property left by their ancestor is
the same as that of any other coöwners or owners in common, and they may recover their individual rights,
the same as any other coöwners of undivided property.

And even when there are debts against the estate, the heirs, all being of age, may pay the debts and divide
the property among themselves according to their respective rights, as heirs or as legatees in case of a will,
without probating the same, and the effect of such division is to invest each party with a complete equitable
title to their particular share of the estate.

The right of the heirs in cases like the one we are discussing, also exists in the division of personal as well
as the real property. If they cannot agree as to the division, then a suit for partition of such personal property
among the heirs of the deceased owner is maintainable where the estate is not in debt, the heirs are all of
age, and there is no administration upon the estate and no necessity thereof.

It is difficult to conceive of any one class or item of property susceptible of being held in common which
may not be divided by the coöwners. It may be of personal property as well as of real estate; of several
parcels as well as of a single parcel, and of non-contiguous as well as of adjacent tracts; or of part only of
the lands of the coowners as well as of the whole.
CASE 3: DKS HOLDINGS CORPORATION V CA

FACTS:

1. 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. 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.

2. 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.

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.

3. Petitioner coursed its payment to private respondent Victor Bartolome, being the
sole heir of Encarnacion. Victor, however, refused to accept these payments.

4. Victor executed an Affidavit of Self-Adjudication over all the properties of

Encarnacion, including the subject lot. Transfer Certificate of Title No. V-14249 in
the name of Victor Bartolome was issued.

5. 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.

6. Victor refused to accept the tendered rental fee and to surrender possession of
the property to petitioner.

7. Petitioner thus opened Savings Account No. 1-04-02558I-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.

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.

8. Petitioner filed a complaint for specific performance and damages against Victor
and the Register of Deeds.

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.

9. Motion for Intervention with Motion to Dismiss 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 fortyfive 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.

10. RTC:

a. Denied the motion to intervene.

b. Dismissing the Complaint and ordering petitioner to pay Victor P30,000.00 as
attorney’s fees.

11. CA: the Decision was affirmed in toto.

12. 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.

ISSUE: 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

DECISION:

GENERAL RULE: Heirs are bound by contracts entered into by their predecessors-in-
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.
NATURE OF TRANSMISSIBLE RIGHTS (ARTURO TOLENTINO):

“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.”

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.”

CHARACTER OF THE PERSONAL ACT

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.

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

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.

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.

Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by
the subject Contract of Lease with Option to Buy.

ISSUE NO. 2: Whether petitioner had complied with its obligations under the contract and
with the requisites to exercise its option
CASE 4: HEIRS OF YPON v RICAFORTE
FACTS
1. Petitioners, together with some of their cousins,4 filed a complaint for Cancellation
of Title and Reconveyance with Damages (subject complaint) against respondent
Gaudioso Ponteras Ricaforte a.k.a. “Gaudioso E. Ypon” (Gaudioso).

2. they alleged that Magdaleno Ypon (Magdaleno) died intestate and childless on
June 28, 1968, leaving behind Lots.

3. Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-

Adjudication and caused the cancellation of the aforementioned certificates of title
leading to their subsequent transfer in his name under TCT Nos. T-2637 and T-
2638,7 to the prejudice of petitioners who are Magdaleno’s collateral relatives and
successors-in-interest.

4. Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a) his
certificate of Live Birth; (b) two (2) letters from Polytechnic School; and (c) a
certified true copy of his passport.

Further, by way of affirmative defense, he claimed that: (a) petitioners have no

cause of action against him; (b) the complaint fails to state a cause of action; and
(c) the case is not prosecuted by the real parties-in-interest, as there is no showing
that the petitioners have been judicially declared as Magdaleno’s lawful heirs.

ISSUE: Whether or not the RTC’s dismissal of the case on the ground that the subject
complaint failed to state a cause of action was proper

DECISION: The petition has no merit.

Petitioners, who were among the plaintiffs therein, alleged that they are the lawful heirs
of Magdaleno and based on the same, prayed that the Affidavit of Self-Adjudication
executed by Gaudioso be declared null and void and that the transfer certificates of title
issued in the latter’s favor be cancelled. While the foregoing allegations, if admitted to be
true, would consequently warrant the reliefs sought for in the said complaint, the rule that
the determination of a decedent’s lawful heirs should be made in the corresponding
special proceeding20 precludes the RTC, in an ordinary action for cancellation of title and
reconveyance, from granting the same.
By way of exception, the need to institute a separate special proceeding for the
determination of heirship may be dispensed with for the sake of practicality:
1. As when the parties in the civil case had voluntarily submitted the issue to the
trial court and already presented their evidence regarding the issue of heirship and
the RTC had consequently rendered judgment thereon

2. When a special proceeding had been instituted but had been finally closed and
terminated, and hence, cannot be re-opened.

In this case, none of the foregoing exceptions, or those of similar nature, appear to exist.
Hence, there lies the need to institute the proper special proceeding in order to determine
the heirship of the parties involved, ultimately resulting to the dismissal of Civil Case No.
T-2246.
Since a determination of heirship cannot be made in an ordinary action for recovery of
ownership and/or possession, the dismissal of Civil Case No. T-2246 was altogether
proper. In this light, it must be pointed out that the RTC erred in ruling on Gaudioso’s
heirship which should, as herein discussed, be threshed out and determined in the proper
special proceeding. As such, the foregoing pronouncement should therefore be devoid of
any legal effect.