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 codefendants. 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-infact, 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 abovestated.
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 non-fulfillment of which prevents the obligation to sell from arising and thus,
ownership is retained by the prospective seller without further remedies by the prospective
buyer. In Roque vs. Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the respondent was a contract to
sell where the ownership or title is retained by the seller and is not to pass until the full payment
of the price, such payment being a positive suspensive condition and failure of which is not a
breach, casual or serious, but simply an event that prevented the obligation of the vendor to
convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment
of the purchase price, the prospective 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 petitionerssellers 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 cobuyer 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.
Agustin
C.
Bagasao
Manuel A. Concordia for defendants-appellants.

for

L-14127:
plaintiff-appellee.

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, /8 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
above-entitled 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: S1948, 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 one-half (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 Psd-36340, 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. (D211: P-44: B-IV: S-1952, 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. (D-177: 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 NT-16440, Vol. No. 83. (D-160: P-33: B-I: S1954, 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. 1-H and 1-I of the subdivision plan Psd30340 of the property described in this title for the sum of P850.00. See TCT No. NT16524, 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: BS-1954, 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. 4-5.)
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 H-1).
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. 211).
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 one-fourth 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 one-half 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 onehalf 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 one-half 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 1-B 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 1-A 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 one-

eighth 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, PSD-16864, 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
1

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
part of the land. When the mortgage debt was paid, it released the mortgage.

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. B37615 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 Dismiss4 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 Order5 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 Order6 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
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.
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
1

Penned by Associate Justice Corona Ibay-Somera, concurred in by Justices Asaali S.

Isnani and Celia Lipana-Reyes.
2

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).

10

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.
11

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

12

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

[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.

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., L-38579, 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. Chio-Taysan, 12 Phil., 13;
Lubrico vs. Arbado, 12 Phil., 391; Innocencio vs. Gat-Pandan, 14 Phil., 491; Aliasas
vs.Alcantara, 16 Phil., 489; Ilustre vs. Alaras Frondosa, 17 Phil., 321; Malahacan vs. Ignacio, 19
Phil., 434; Bowa vs. Briones, 38 Phil., 27; Osario vs. Osario & Yuchausti Steamship Co., 41
Phil., 531; Fule vs. Fule, 46 Phil., 317; Dais vs. Court of First Instance of Capiz, 51 Phil., 396;
Baun vs. Heirs of Baun, 53 Phil., 654.) Plaintiff, however, asserts that while article 657 of the
Civil Code is applicable to testate as well as intestate succession, it operates only in so far as
forced heirs are concerned. But the language of article 657 of the Civil Code is broad and
makes no distinction between different classes of heirs. That article does not speak of forced

heirs; it does not even use the word "heir". It speaks of the rights of succession and the
transmission thereof from the moment of death. The provision of section 625 of the Code of Civil
Procedure regarding the authentication and probate of a will as a necessary condition to effect
transmission of property does not affect the general rule laid down in article 657 of the Civil
Code. The authentication of a will implies its due execution but once probated and allowed the
transmission is effective as of the death of the testator in accordance with article 657 of the Civil
Code. Whatever may be the time when actual transmission of the inheritance takes place,
succession takes place in any event at the moment of the decedent's death. The time when the
heirs legally succeed to the inheritance may differ from the time when the heirs actually receive
such inheritance. "Poco importa", says Manresa commenting on article 657 of the Civil Code,
"que desde el falleimiento del causante, hasta que el heredero o legatario entre en posesion de
los bienes de la herencia o del legado, transcurra mucho o poco tiempo, pues la adquisicion ha
de retrotraerse al momento de la muerte, y asi lo ordena el articulo 989, que debe considerarse
como complemento del presente." (5 Manresa, 305; see also, art. 440, par. 1, Civil Code.)
Thomas Hanley having died on May 27, 1922, the inheritance tax accrued as of the date.
From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow that the
obligation to pay the tax arose as of the date. The time for the payment on inheritance tax is
clearly fixed by section 1544 of the Revised Administrative Code as amended by Act No. 3031,
in relation to section 1543 of the same Code. The two sections follow:
SEC. 1543. Exemption of certain acquisitions 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
above-quoted, as there is here no fiduciary heirs, first heirs, legatee or donee. Under the
subsection, the tax should have been paid before the delivery of the properties in question to P.
J. M. Moore as trustee on March 10, 1924.
(b) The plaintiff contends that the estate of Thomas Hanley, in so far as the real properties are
concerned, did not and could not legally pass to the instituted heir, Matthew Hanley, until after
the expiration of ten years from the death of the testator on May 27, 1922 and, that the
inheritance tax should be based on the value of the estate in 1932, or ten years after the
testator's death. The plaintiff introduced evidence tending to show that in 1932 the real
properties in question had a reasonable value of only P5,787. This amount added to the value
of the personal property left by the deceased, which the plaintiff admits is P1,465, would
generate an inheritance tax which, excluding deductions, interest and surcharge, would amount
only to about P169.52.
If death is the generating source from which the power of the estate to impose inheritance taxes
takes its being and if, upon the death of the decedent, succession takes place and the right of
the estate to tax vests instantly, the tax should be measured by the vlaue of the estate as it
stood at the time of the decedent's death, regardless of any subsequent contingency value of
any subsequent increase or decrease in value. (61 C. J., pp. 1692, 1693; 26 R. C. L., p. 232;
Blakemore and Bancroft, Inheritance Taxes, p. 137. See also Knowlton vs. Moore, 178 U.S., 41;
20 Sup. Ct. Rep., 747; 44 Law. ed., 969.) "The right of the state to an inheritance tax accrues at
the moment of death, and hence is ordinarily measured as to any beneficiary by the value at
that time of such property as passes to him. Subsequent appreciation or depriciation is
immaterial." (Ross, Inheritance Taxation, p. 72.)
Our attention is directed to the statement of the rule in Cyclopedia of Law of and Procedure (vol.
37, pp. 1574, 1575) that, in the case of contingent remainders, taxation is postponed until the
estate vests in possession or the contingency is settled. This rule was formerly followed in New
York and has been adopted in Illinois, Minnesota, Massachusetts, Ohio, Pennsylvania and
Wisconsin. This rule, horever, is by no means entirely satisfactory either to the estate or to
those interested in the property (26 R. C. L., p. 231.). Realizing, perhaps, the defects of its
anterior system, we find upon examination of cases and authorities that New York has varied
and now requires the immediate appraisal of the postponed estate at its clear market value and
the payment forthwith of the tax on its out of the corpus of the estate transferred. (In
re Vanderbilt, 172 N. Y., 69; 69 N. E., 782; In re Huber, 86 N. Y. App. Div., 458; 83 N. Y. Supp.,
769; Estate of Tracy, 179 N. Y., 501; 72 N. Y., 519; Estate of Brez, 172 N. Y., 609; 64 N. E.,
958; Estate of Post, 85 App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun vs. Lord
Advocate, 1 Peter. Sc. App., 970; 3 Macq. H. L., 659; 23 Eng. Rul. Cas., 888.) California
adheres to this new rule (Stats. 1905, sec. 5, p. 343).
But whatever may be the rule in other jurisdictions, we hold that a transmission by inheritance is
taxable at the time of the predecessor's death, notwithstanding the postponement of the actual

possession or enjoyment of the estate by the beneficiary, and the tax measured by the value of
the property transmitted at that time regardless of its appreciation or depreciation.
(c) Certain items are required by law to be deducted from the appraised gross in arriving at the
net value of the estate on which the inheritance tax is to be computed (sec. 1539, Revised
Administrative Code). In the case at bar, the defendant and the trial court allowed a deduction of
only P480.81. This sum represents the expenses and disbursements of the executors until
March 10, 1924, among which were their fees and the proven debts of the deceased. The
plaintiff contends that the compensation and fees of the trustees, which aggregate P1,187.28
(Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted under section 1539 of
the Revised Administrative Code which provides, in part, as follows: "In order to determine the
net sum which must bear the tax, when an inheritance is concerned, there shall be deducted, in
case of a resident, . . . the judicial expenses of the testamentary or intestate proceedings, . . . ."
A trustee, no doubt, is entitled to receive a fair compensation for his services (Barney vs.
Saunders, 16 How., 535; 14 Law. ed., 1047). But from this it does not follow that the
compensation due him may lawfully be deducted in arriving at the net value of the estate subject
to tax. There is no statute in the Philippines which requires trustees' commissions to be
deducted in determining the net value of the estate subject to inheritance tax (61 C. J., p. 1705).
Furthermore, though a testamentary trust has been created, it does not appear that the testator
intended that the duties of his executors and trustees should be separated. (Ibid.; In
re Vanneck's Estate, 161 N. Y. Supp., 893; 175 App. Div., 363; In re Collard's Estate, 161 N. Y.
Supp., 455.) On the contrary, in paragraph 5 of his will, the testator expressed the desire that
his real estate be handled and managed by his executors until the expiration of the period of ten
years therein provided. Judicial expenses are expenses of administration (61 C. J., p. 1705) but,
in State vs. Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it was said: ". . .
The compensation of a trustee, earned, not in the administration of the estate, but in the
management thereof for the benefit of the legatees or devises, does not come properly within
the class or reason for exempting administration expenses. . . . Service rendered in that behalf
have no reference to closing the estate for the purpose of a distribution thereof to those entitled
to it, and are not required or essential to the perfection of the rights of the heirs or legatees. . . .
Trusts . . . of the character of that here before the court, are created for the the benefit of those
to whom the property ultimately passes, are of voluntary creation, and intended for the
preservation of the estate. No sound reason is given to support the contention that such
expenses should be taken into consideration in fixing the value of the estate for the purpose of
this tax."
(d) The defendant levied and assessed the inheritance tax due from the estate of Thomas
Hanley under the provisions of section 1544 of the Revised Administrative Code, as amended
by section 3 of Act No. 3606. But Act No. 3606 went into effect on January 1, 1930. It, therefore,
was not the law in force when the testator died on May 27, 1922. The law at the time was
section 1544 above-mentioned, as amended by Act No. 3031, which took effect on March 9,
1922.
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
above-quoted, as there is here no fiduciary heirs, first heirs, legatee or donee. Under the
subsection, the tax should have been paid before the delivery of the properties in question to
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
tax-payer 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
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.
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

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23678

June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First
Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in
Civil Case No. 37089 therein.1wph1.t
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By
his first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A.
Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and
Anna Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three
legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that
after all taxes, obligations, and expenses of administration are paid for, his distributable estate
should be divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria

Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items
have been satisfied, the remainder shall go to his seven surviving children by his first and
second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1wph1.t
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A.
His will was admitted to probate in the Court of First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the bequests therein
including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the
three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total
of P120,000.00, which it released from time to time according as the lower court approved and
allowed the various motions or petitions filed by the latter three requesting partial advances on
account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor submitted and filed
its "Executor's Final Account, Report of Administration and Project of Partition" wherein it
reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of
shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina
Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In
the project of partition, the executor pursuant to the "Twelfth" clause of the testator's Last Will
and Testament divided the residuary estate into seven equal portions for the benefit of the
testator's seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective
oppositions to the project of partition on the ground that they were deprived of their legitimes as
illegitimate children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is
evidenced by the registry receipt submitted on April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent pleadings, the lower court,
on April 30, 1964, issued an order overruling the oppositions and approving the executor's final
account, report and administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is Texas law, which did not
provide for legitimes.
Their respective motions for reconsideration having been denied by the lower court on June 11,
1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply
Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi,
applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine
is usually pertinent where the decedent is a national of one country, and a domicile of another.
In the present case, it is not disputed that the decedent was both a national of Texas and a
domicile thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule
providing that the domiciliary system (law of the domicile) should govern, the same would not
result in a reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the

application of the law of the place where the properties are situated, renvoi would arise, since
the properties here involved are found in the Philippines. In the absence, however, of proof as to
the conflict of law rule of Texas, it should not be presumed different from ours.3Appellants'
position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even
mentioned it in their arguments. Rather, they argue that their case falls under the circumstances
mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the
decedent, in intestate or testamentary successions, with regard to four items: (a) the order of
succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of
the will; and (d) the capacity to succeed. They provide that
ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.
However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct.
Precisely, Congressdeleted the phrase, "notwithstanding the provisions of this and the next
preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil
Code, while reproducing without substantial change the second paragraph of Art. 10 of the old
Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph
of Art. 16 a specific provision in itself which must be applied in testate and intestate succession.
As further indication of this legislative intent, Congress added a new provision, under Art. 1039,
which decrees that capacity to succeed is to be governed by the national law of the decedent.
It is therefore evident that whatever public policy or good customs may be involved in our
System of legitimes, Congress has not intended to extend the same to the succession of foreign
nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to
the decedent's national law. Specific provisions must prevail over general ones.
Appellants would also point out that the decedent executed two wills one to govern his Texas
estate and the other his Philippine estate arguing from this that he intended Philippine law to
govern his Philippine estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50
Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed

in accordance with Philippine law and not with his national law, is illegal and void, for his
national law cannot be ignored in regard to those matters that Article 10 now Article 16 of
the Civil Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A.,
and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the
intrinsic validity of the provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with costs against
appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
concur.

Footnotes
1

He later filed a motion praying that as a legal heir he be included in this case as one of
the oppositors-appellants; to file or adopt the opposition of his sisters to the project of
partition; to submit his brief after paying his proportionate share in the expenses incurred
in the printing of the record on appeal; or to allow him to adopt the briefs filed by his
sisters but this Court resolved to deny the motion.
2

San Antonio, Texas was his legal residence.

Lim vs. Collector, 36 Phil. 472; In re Testate Estate of Suntay, 95 Phil. 500.

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
GERMAN JABONETA, plaintiff-appellant, vs.
appellees.
5 PHIL 541

SIXTO

RICARDO

ACOP, petitioner-appellant,

GUSTILO,

ET

AL., defendants-

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, vs.
PELAGIO CAGRO, ET AL., oppositors-appellants.
92 PHIL 1033
BEATRIZ NERA, ET AL., plaintiffs-appellees, vs. NARCISA RIMANDO, defendant-appellant..
18 PHIL 450
READ First 30 articles in Succession