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SECOND DIVISION

G.R. Nos. 140371-72 November 27, 2006

DY YIENG SEANGIO, BARBARA D. SEANGIO and VIRGINIA D. SEANGIO, Petitioners,


vs.
HON. AMOR A. REYES, in her capacity as Presiding Judge, Regional Trial Court, National Capital
Judicial Region, Branch 21, Manila, ALFREDO D. SEANGIO, ALBERTO D. SEANGIO, ELISA D.
SEANGIO-SANTOS, VICTOR D. SEANGIO, ALFONSO D. SEANGIO, SHIRLEY D. SEANGIO-LIM,
BETTY D. SEANGIO-OBAS and JAMES D. SEANGIO, Respondents.

DECISION

AZCUNA, J.:

This is a petition for certiorari1 with application for the issuance of a writ of preliminary injunction and/or
temporary restraining order seeking the nullification of the orders, dated August 10, 1999 and October 14,
1999, of the Regional Trial Court of Manila, Branch 21 (the RTC), dismissing the petition for probate on
the ground of preterition, in the consolidated cases, docketed as SP. Proc. No. 98-90870 and SP. Proc.
No. 99-93396, and entitled, "In the Matter of the Intestate Estate of Segundo C. Seangio v. Alfredo D.
Seangio, et al." and "In the Matter of the Probate of the Will of Segundo C. Seangio v. Dy Yieng Seangio,
Barbara D. Seangio and Virginia Seangio."

The facts of the cases are as follows:

On September 21, 1988, private respondents filed a petition for the settlement of the intestate estate of
the late Segundo Seangio, docketed as Sp. Proc. No. 98–90870 of the RTC, and praying for the
appointment of private respondent Elisa D. Seangio–Santos as special administrator and guardian ad
litem of petitioner Dy Yieng Seangio.

Petitioners Dy Yieng, Barbara and Virginia, all surnamed Seangio, opposed the petition. They contended
that: 1) Dy Yieng is still very healthy and in full command of her faculties; 2) the deceased Segundo
executed a general power of attorney in favor of Virginia giving her the power to manage and exercise
control and supervision over his business in the Philippines; 3) Virginia is the most competent and
qualified to serve as the administrator of the estate of Segundo because she is a certified public
accountant; and, 4) Segundo left a holographic will, dated September 20, 1995, disinheriting one of the
private respondents, Alfredo Seangio, for cause. In view of the purported holographic will, petitioners
averred that in the event the decedent is found to have left a will, the intestate proceedings are to be
automatically suspended and replaced by the proceedings for the probate of the will.

On April 7, 1999, a petition for the probate of the holographic will of Segundo, docketed as SP. Proc. No.
99–93396, was filed by petitioners before the RTC. They likewise reiterated that the probate proceedings
should take precedence over SP. Proc. No. 98–90870 because testate proceedings take precedence and
enjoy priority over intestate proceedings.2

The document that petitioners refer to as Segundo’s holographic will is quoted, as follows:

Kasulatan sa pag-aalis ng mana

Tantunin ng sinuman

Ako si Segundo Seangio Filipino may asawa naninirahan sa 465-A Flores St., Ermita, Manila at
nagtatalay ng maiwanag na pag-iisip at disposisyon ay tahasan at hayagang inaalisan ko ng lahat at
anumang mana ang paganay kong anak na si Alfredo Seangio dahil siya ay naging lapastangan sa akin
at isan beses siya ng sasalita ng masama harapan ko at mga kapatid niya na si Virginia Seangio labis
kong kinasama ng loob ko at sasabe rin ni Alfredo sa akin na ako nasa ibabaw gayon gunit daratin ang
araw na ako nasa ilalim siya at siya nasa ibabaw.

Labis kong ikinasama ng loob ko ang gamit ni Alfredo ng akin pagalan para makapagutang na kuarta siya
at kanya asawa na si Merna de los Reyes sa China Bangking Corporation na millon pesos at hindi ng
babayad at hindi ng babayad ito ay nagdulot sa aking ng malaking kahihiya sa mga may-ari at
stockholders ng China Banking.

At ikinagalit ko pa rin ang pagkuha ni Alfredo at ng kanyang asawa na mga custome[r] ng Travel Center
of the Philippines na pinagasiwaan ko at ng anak ko si Virginia.

Dito ako nagalit din kaya gayon ayoko na bilanin si Alfredo ng anak ko at hayanan kong inaalisan ng lahat
at anoman mana na si Alfredo at si Alfredo Seangio ay hindi ko siya anak at hindi siya makoha mana.

Nila[g]daan ko ngayon ika 20 ng Setyembre 1995 sa longsod ng Manila sa harap ng tatlong saksi. 3

(signed)

Segundo Seangio

Nilagdaan sa harap namin

(signed)

Dy Yieng Seangio (signed)

Unang Saksi ikalawang saksi

(signed)

ikatlong saksi

On May 29, 1999, upon petitioners’ motion, SP. Proc. No. 98–90870 and SP. Proc. No. 99–93396 were
consolidated.4

On July 1, 1999, private respondents moved for the dismissal of the probate proceedings5 primarily on the
ground that the document purporting to be the holographic will of Segundo does not contain any
disposition of the estate of the deceased and thus does not meet the definition of a will under Article 783
of the Civil Code. According to private respondents, the will only shows an alleged act of disinheritance by
the decedent of his eldest son, Alfredo, and nothing else; that all other compulsory heirs were not named
nor instituted as heir, devisee or legatee, hence, there is preterition which would result to intestacy. Such
being the case, private respondents maintained that while procedurally the court is called upon to rule
only on the extrinsic validity of the will, it is not barred from delving into the intrinsic validity of the same,
and ordering the dismissal of the petition for probate when on the face of the will it is clear that it contains
no testamentary disposition of the property of the decedent.

Petitioners filed their opposition to the motion to dismiss contending that: 1) generally, the authority of the
probate court is limited only to a determination of the extrinsic validity of the will; 2) private respondents
question the intrinsic and not the extrinsic validity of the will; 3) disinheritance constitutes a disposition of
the estate of a decedent; and, 4) the rule on preterition does not apply because Segundo’s will does not
constitute a universal heir or heirs to the exclusion of one or more compulsory heirs.6

On August 10, 1999, the RTC issued its assailed order, dismissing the petition for probate proceedings:

A perusal of the document termed as "will" by oppositors/petitioners Dy Yieng Seangio, et al., clearly
shows that there is preterition, as the only heirs mentioned thereat are Alfredo and Virginia. [T]he other
heirs being omitted, Article 854 of the New Civil Code thus applies. However, insofar as the widow Dy
Yieng Seangio is concerned, Article 854 does not apply, she not being a compulsory heir in the direct
line.

As such, this Court is bound to dismiss this petition, for to do otherwise would amount to an abuse of
discretion. The Supreme Court in the case of Acain v. Intermediate Appellate Court [155 SCRA 100
(1987)] has made its position clear: "for … respondents to have tolerated the probate of the will and
allowed the case to progress when, on its face, the will appears to be intrinsically void … would have
been an exercise in futility. It would have meant a waste of time, effort, expense, plus added futility. The
trial court could have denied its probate outright or could have passed upon the intrinsic validity of the
testamentary provisions before the extrinsic validity of the will was resolved(underscoring supplied).

WHEREFORE, premises considered, the Motion to Suspend Proceedings is hereby DENIED for lack of
merit. Special Proceedings No. 99–93396 is hereby DISMISSED without pronouncement as to costs.

SO ORDERED.7

Petitioners’ motion for reconsideration was denied by the RTC in its order dated October 14, 1999.
Petitioners contend that:

THE RESPONDENT JUDGE ACTED IN EXCESS OF HER JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND DECIDED A
QUESTION OF LAW NOT IN ACCORD WITH LAW AND JURISPRUDENCE IN ISSUING THE
QUESTIONED ORDERS, DATED 10 AUGUST 1999 AND 14 OCTOBER 1999 (ATTACHMENTS "A"
AND "B" HEREOF) CONSIDERING THAT:

THE RESPONDENT JUDGE, WITHOUT EVEN COMPLYING WITH SECTIONS 3 AND 4 OF RULE 76
OF THE RULES OF COURT ON THE PROPER PROCEDURE FOR SETTING THE CASE FOR INITIAL
HEARING FOR THE ESTABLISHMENT OF THE JURISDICTIONAL FACTS, DISMISSED THE
TESTATE CASE ON THE ALLEGED GROUND THAT THE TESTATOR’S WILL IS VOID ALLEGEDLY
BECAUSE OF THE EXISTENCE OF PRETERITION, WHICH GOES INTO THE INTRINSIC VALIDITY
OF THE WILL, DESPITE THE FACT THAT IT IS A SETTLED RULE THAT THE AUTHORITY OF
PROBATE COURTS IS LIMITED ONLY TO A DETERMINATION OF THE EXTRINSIC VALIDITY OF
THE WILL, I.E., THE DUE EXECUTION THEREOF, THE TESTATOR’S TESTAMENTARY CAPACITY
AND THE COMPLIANCE WITH THE REQUISITES OR SOLEMNITIES PRESCRIBED BY LAW;

II

EVEN ASSUMING ARGUENDO THAT THE RESPONDENT JUDGE HAS THE AUTHORITY TO RULE
UPON THE INTRINSIC VALIDITY OF THE WILL OF THE TESTATOR, IT IS INDUBITABLE FROM THE
FACE OF THE TESTATOR’S WILL THAT NO PRETERITON EXISTS AND THAT THE WILL IS BOTH
INTRINSICALLY AND EXTRINSICALLY VALID; AND,

III

RESPONDENT JUDGE WAS DUTY BOUND TO SUSPEND THE PROCEEDINGS IN THE INTESTATE
CASE CONSIDERING THAT IT IS A SETTLED RULE THAT TESTATE PROCEEDINGS TAKE
PRECEDENCE OVER INTESTATE PROCEEDINGS.

Petitioners argue, as follows:

First, respondent judge did not comply with Sections 3 and 4 of Rule 76 of the Rules of Court which
respectively mandate the court to: a) fix the time and place for proving the will when all concerned may
appear to contest the allowance thereof, and cause notice of such time and place to be published three
weeks successively previous to the appointed time in a newspaper of general circulation; and, b) cause
the mailing of said notice to the heirs, legatees and devisees of the testator Segundo;

Second, the holographic will does not contain any institution of an heir, but rather, as its title clearly
states, Kasulatan ng Pag-Aalis ng Mana, simply contains a disinheritance of a compulsory heir. Thus,
there is no preterition in the decedent’s will and the holographic will on its face is not intrinsically void;

Third, the testator intended all his compulsory heirs, petitioners and private respondents alike, with the
sole exception of Alfredo, to inherit his estate. None of the compulsory heirs in the direct line of Segundo
were preterited in the holographic will since there was no institution of an heir;

Fourth, inasmuch as it clearly appears from the face of the holographic will that it is both intrinsically and
extrinsically valid, respondent judge was mandated to proceed with the hearing of the testate case; and,

Lastly, the continuation of the proceedings in the intestate case will work injustice to petitioners, and will
render nugatory the disinheritance of Alfredo.

The purported holographic will of Segundo that was presented by petitioners was dated, signed and
written by him in his own handwriting. Except on the ground of preterition, private respondents did not
raise any issue as regards the authenticity of the document.

The document, entitled Kasulatan ng Pag-Aalis ng Mana, unmistakably showed Segundo’s intention of
excluding his eldest son, Alfredo, as an heir to his estate for the reasons that he cited therein. In effect,
Alfredo was disinherited by Segundo.

For disinheritance to be valid, Article 916 of the Civil Code requires that the same must be effected
through a will wherein the legal cause therefor shall be specified. With regard to the reasons for the
disinheritance that were stated by Segundo in his document, the Court believes that the incidents, taken
as a whole, can be considered a form of maltreatment of Segundo by his son, Alfredo, and that the matter
presents a sufficient cause for the disinheritance of a child or descendant under Article 919 of the Civil
Code:
Article 919. The following shall be sufficient causes for the disinheritance of children and descendants,
legitimate as well as illegitimate:

(1) When a child or descendant has been found guilty of an attempt against the life of the testator,
his or her spouse, descendants, or ascendants;

(2) When a child or descendant has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been found groundless;

(3) When a child or descendant has been convicted of adultery or concubinage with the spouse of
the testator;

(4) When a child or descendant by fraud, violence, intimidation, or undue influence causes the
testator to make a will or to change one already made;

(5) A refusal without justifiable cause to support the parents or ascendant who disinherit such
child or descendant;

(6) Maltreatment of the testator by word or deed, by the child or descendant; 8

(7) When a child or descendant leads a dishonorable or disgraceful life;

(8) Conviction of a crime which carries with it the penalty of civil interdiction.

Now, the critical issue to be determined is whether the document executed by Segundo can be
considered as a holographic will.

A holographic will, as provided under Article 810 of the Civil Code, must be entirely written, dated, and
signed by the hand of the testator himself. It is subject to no other form, and may be made in or out of the
Philippines, and need not be witnessed.

Segundo’s document, although it may initially come across as a mere disinheritance instrument, conforms
to the formalities of a holographic will prescribed by law. It is written, dated and signed by the hand of
Segundo himself. An intent to dispose mortis causa[9] can be clearly deduced from the terms of the
instrument, and while it does not make an affirmative disposition of the latter’s property, the disinheritance
of Alfredo, nonetheless, is an act of disposition in itself. In other words, the disinheritance results in the
disposition of the property of the testator Segundo in favor of those who would succeed in the absence of
Alfredo.10

Moreover, it is a fundamental principle that the intent or the will of the testator, expressed in the form and
within the limits prescribed by law, must be recognized as the supreme law in succession. All rules of
construction are designed to ascertain and give effect to that intention. It is only when the intention of the
testator is contrary to law, morals, or public policy that it cannot be given effect.11

Holographic wills, therefore, being usually prepared by one who is not learned in the law, as illustrated in
the present case, should be construed more liberally than the ones drawn by an expert, taking into
account the circumstances surrounding the execution of the instrument and the intention of the
testator.12 In this regard, the Court is convinced that the document, even if captioned as Kasulatan ng
Pag-Aalis ng Mana, was intended by Segundo to be his last testamentary act and was executed by him in
accordance with law in the form of a holographic will. Unless the will is probated,13 the disinheritance
cannot be given effect.14

With regard to the issue on preterition,15 the Court believes that the compulsory heirs in the direct line
were not preterited in the will. It was, in the Court’s opinion, Segundo’s last expression to bequeath his
estate to all his compulsory heirs, with the sole exception of Alfredo. Also, Segundo did not institute an
heir16 to the exclusion of his other compulsory heirs. The mere mention of the name of one of the
petitioners, Virginia, in the document did not operate to institute her as the universal heir. Her name was
included plainly as a witness to the altercation between Segundo and his son, Alfredo.1âwphi1

Considering that the questioned document is Segundo’s holographic will, and that the law favors testacy
over intestacy, the probate of the will cannot be dispensed with. Article 838 of the Civil Code provides that
no will shall pass either real or personal property unless it is proved and allowed in accordance with the
Rules of Court. Thus, unless the will is probated, the right of a person to dispose of his property may be
rendered nugatory.17

In view of the foregoing, the trial court, therefore, should have allowed the holographic will to be probated.
It is settled that testate proceedings for the settlement of the estate of the decedent take precedence over
intestate proceedings for the same purpose.18

WHEREFORE, the petition is GRANTED. The Orders of the Regional Trial Court of Manila, Branch 21,
dated August 10, 1999 and October 14, 1999, are set aside. Respondent judge is directed to reinstate
and hear SP Proc. No. 99-93396 for the allowance of the holographic will of Segundo Seangio. The
intestate case or SP. Proc. No. 98-90870 is hereby suspended until the termination of the aforesaid
testate proceedings.

No costs.

SO ORDERED.

ADOLFO S. AZCUNA
Associate Justice
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 188417 September 24, 2012

MILAGROS DE BELEN VDA. DE CABALU, MELITON CABALU, SPS. ANGELA CABALU and
RODOLFO TALAVERA, and PATRICIO ABUS, Petitioners,
vs.
SPS. RENATO DOLORES TABU and LAXAMANA, Municipal Trial Court in Cities, Tarlac City,
Branch II,Respondents.

DECISION

MENDOZA, J.:

This is a "Petition for Review on Certiorari (under Rule 45)" of the Rules of Court assailing the June 16,
2009 Decision1 of the Court of Appeals (CA) in CA-GR. CV No. 81469 entitled "Milagros De Belen Vda de
Cabalu v. Renato Tabu."

The Facts

The property subject of the controversy is a 9,000 square meter lot situated in Mariwalo, Tarlac, which
was a portion of a property registered in the name of the late Faustina Maslum (Faustina) under Transfer
Certificate of Title (TCT) No. 16776 with a total area of 140,211 square meters.2

On December 8, 1941, Faustina died without any children. She left a holographic will, dated July 27,
1939, assigning and distributing her property to her nephews and nieces. The said holographic will,
however, was not probated. One of the heirs was the father of Domingo Laxamana (Domingo), Benjamin
Laxamana, who died in 1960. On March 5, 1975, Domingo allegedly executed a Deed of Sale of
Undivided Parcel of Land disposing of his 9,000 square meter share of the land to Laureano Cabalu. 3

On August 1, 1994, to give effect to the holographic will, the forced and legitimate heirs of Faustina
executed a Deed of Extra-Judicial Succession with Partition. The said deed imparted 9,000 square
meters of the land covered by TCT No. 16776 to Domingo. Thereafter, on December 14, 1995, Domingo
sold 4,500 square meters of the 9,000 square meters to his nephew, Eleazar Tabamo. The document
was captioned Deed of Sale of a Portion of Land. On May 7, 1996, the remaining 4,500 square meters of
Domingo’s share in the partition was registered under his name under TCT No. 281353. 4

On August 4, 1996, Domingo passed away.

On October 8, 1996, two months after his death, Domingo purportedly executed a Deed of Absolute Sale
of TCT No. 281353 in favor of respondent Renato Tabu (Tabu). The resultant transfer of title was
registered as TCT No. 286484. Subsequently, Tabu and his wife, Dolores Laxamana (respondent
spouses), subdivided the said lot into two which resulted into TCT Nos. 291338 and 291339. 5

On January 15, 1999, respondent Dolores Laxamana-Tabu, together with Julieta Tubilan-Laxamana,
Teresita Laxamana, Erlita Laxamana, and Gretel Laxamana, the heirs of Domingo, filed an unlawful
detainer action, docketed as Civil Case No. 7106, against Meliton Cabalu, Patricio Abus, Roger Talavera,
Jesus Villar, Marcos Perez, Arthur Dizon, and all persons claiming rights under them. The heirs claimed
that the defendants were merely allowed to occupy the subject lot by their late father, Domingo, but, when
asked to vacate the property, they refused to do so. The case was ruled in favor of Domingo’s heirs and a
writ of execution was subsequently issued.6

On February 4, 2002, petitioners Milagros de Belen Vda. De Cabalu, Meliton Cabalu, Spouses Angela
Cabalu and Rodolfo Talavera, and Patricio Abus (petitioners), filed a case for Declaration of Nullity of
Deed of Absolute Sale, Joint Affidavit of Nullity of Transfer Certificate of Title Nos. 291338 and 291339,
Quieting of Title, Reconveyance, Application for Restraining Order, Injunction and Damages (Civil Case
No. 9290) against respondent spouses before the Regional Trial Court, Branch 63, Tarlac City (RTC). 7

In their complaint, petitioners claimed that they were the lawful owners of the subject property because it
was sold to their father, Laureano Cabalu, by Domingo, through a Deed of Absolute Sale, dated March 5,
1975. Hence, being the rightful owners by way of succession, they could not be ejected from the subject
property.8

In their Answer, respondent spouses countered that the deed of sale from which the petitioners anchored
their right over the 9,000 square meter property was null and void because in 1975, Domingo was not yet
the owner of the property, as the same was still registered in the name of Faustina. Domingo became the
owner of the property only on August 1, 1994, by virtue of the Deed of Extra-Judicial Succession with
Partition executed by the forced heirs of Faustina. In addition, they averred that Domingo was of unsound
mind having been confined in a mental institution for a time.9

On September 30, 2003, the RTC dismissed the complaint as it found the Deed of Absolute Sale, dated
March 5, 1975, null and void for lack of capacity to sell on the part of Domingo. Likewise, the Deed of
Absolute Sale, dated October 8, 1996, covering the remaining 4,500 square meters of the subject
property was declared ineffective having been executed by Domingo two months after his death on
August 4, 1996. The fallo of the Decision10 reads:

WHEREFORE, in view of the foregoing, the complaint is hereby DISMISSED, and the decision is hereby
rendered by way of:

1. declaring null and void the Deed of Absolute Sale dated March 5, 1975, executed by Domingo
Laxamana in favor of Laureano Cabalu;

2. declaring null and void the Deed of Absolute Sale dated October 8, 1996, executed by
Domingo Laxamana in favor of Renato Tabu, and that TCT Nos. 293338 and 291339, both
registered in the name of Renato Tabu, married to Dolores Laxamana be cancelled;

3. restoring to its former validity, TCT No. 16770 in the name of Faustina Maslum subject to
partition by her lawful heirs.

Costs de oficio.

SO ORDERED.11

Not in conformity, both parties appealed to the CA. Petitioners contended that the RTC erred in declaring
void the Deed of Absolute Sale, dated March 5, 1975. They claimed that Domingo owned the property,
when it was sold to Laureano Cabalu, because he inherited it from his father, Benjamin, who was one of
the heirs of Faustina. Being a co-owner of the property left by Benjamin, Domingo could dispose of the
portion he owned, notwithstanding the will of Faustina not being probated.

Respondent spouses, on the other hand, asserted that the Deed of Sale, dated March 5, 1975, was
spurious and simulated as the signature, PTR and the document number of the Notary Public were
different from the latter’s notarized documents. They added that the deed was without consent, Domingo
being of unsound mind at the time of its execution. Further, they claimed that the RTC erred in canceling
TCT No. 266583 and insisted that the same should be restored to its validity because Benjamin and
Domingo were declared heirs of Faustina.

On June 16, 2009, the CA rendered its decision and disposed as follows:

WHEREFORE, in the light of the foregoing, the instant appeal is partially GRANTED in that the decision
of the trial court is AFFIRMED WITH MODIFICATION that sub-paragraphs 2 & 3 of the disposition, which
reads:

"2. declaring null and void the Deed of Absolute Sale dated October 8, 1996, executed by Domingo
Laxamana in favor of Renato Tabu, and that TCT Nos. 291338 and 291339, both registered in the name
of Renato Tabu, married to Dolores Laxamana be cancelled;

3. restoring to its former validity, TCT No. 16776 in the name of Faustina Maslum subject to partition by
her lawful heirs," are DELETED.

IT IS SO ORDERED.12

In finding Domingo as one of the heirs of Faustina, the CA explained as follows:

It appears from the records that Domingo was a son of Benjamin as apparent in his Marriage Contract
and Benjamin was a nephew of Faustina as stated in the holographic will and deed of succession with
partition. By representation, when Benjamin died in 1960, Domingo took the place of his father in
succession. In the same vein, the holographic will of Faustina mentioned Benjamin as one of her heirs to
whom Faustina imparted 9,000 square meters of her property. Likewise, the signatories to the Deed of
Extra-judicial Succession with Partition, heirs of Faustina, particularly declared Domingo as their co-heir in
the succession and partition thereto. Furthermore, the parties in this case admitted that the relationship
was not an issue.13

Although the CA found Domingo to be of sound mind at the time of the sale on March 5, 1975, it
sustained the RTC’s declaration of nullity of the sale on the ground that the deed of sale was simulated.

The CA further held that the RTC erred in canceling TCT No. 266583 in the name of Domingo and in
ordering the restoration of TCT No. 16770, registered in the name of Faustina, to its former validity,
Domingo being an undisputed heir of Faustina.
Hence, petitioners interpose the present petition before this Court anchored on the following:

GROUNDS

(A)

THE DEED OF SALE OF UNDIVIDED PARCEL OF LAND EXECUTED ON MARCH 5, 1975 BY


DOMINGO LAXAMANA IN FAVOR OF LAUREANO CABALU IS VALID BECAUSE IT SHOULD
BE ACCORDED THE PRESUMPTION OF REGULARITY AND DECLARED VALID FOR ALL
PURPOSES AND INTENTS.

(B)

THE SUBPARAGRAPH NO. 2 OF THE DECISION OF THE REGIONAL TRIAL COURT


SHOULD STAY BECAUSE THE HONORABLE COURT OF APPEALS DID NOT DISCUSS THE
ISSUE AND DID NOT STATE THE LEGAL BASIS WHY SAID PARAGRAPH SHOULD BE
DELETED FROM THE SEPTEMBER 30, 2003 DECISION OF THE REGIONAL TRIAL COURT.14

The core issues to be resolved are 1) whether the Deed of Sale of Undivided Parcel of Land covering the
9,000 square meter property executed by Domingo in favor of Laureano Cabalu on March 5, 1975, is
valid; and 2) whether the Deed of Sale, dated October 8, 1996, covering the 4,500 square meter portion
of the 9,000 square meter property, executed by Domingo in favor of Renato Tabu, is null and void.

Petitioners contend that the Deed of Absolute Sale executed by Domingo in favor of Laureano Cabalu on
March 5, 1975 should have been declared valid because it enjoyed the presumption of regularity.
According to them, the subject deed, being a public document, had in its favor the presumption of
regularity, and to contradict the same, there must be clear, convincing and more than preponderant
evidence, otherwise, the document should be upheld. They insist that the sale transferred rights of
ownership in favor of the heirs of Laureano Cabalu.

They further argue that the CA, in modifying the decision of the RTC, should not have deleted the portion
declaring null and void the Deed of Absolute Sale, dated October 8, 1996, executed by Domingo in favor
of Renato Tabu, because at the time of execution of the said deed of sale, the seller, Domingo was
already dead. Being a void document, the titles originating from the said instrument were also void and
should be cancelled.

Respondent spouses, in their Comment15 and Memorandum,16 counter that the issues raised are not
questions of law and call for another calibration of the whole evidence already passed upon by the RTC
and the CA. Yet, they argue that petitioners’ reliance on the validity of the March 5, 1975 Deed of Sale of
Undivided Parcel of Land, based on presumption of regularity, was misplaced because both the RTC and
the CA, in the appreciation of evidence on record, had found said deed as simulated.

It is well to note that both the RTC and the CA found that the evidence established that the March 5, 1975
Deed of Sale of Undivided Parcel of Land executed by Domingo in favor of Laureano Cabalu was a
fictitious and simulated document. As expounded by the CA, viz:

Nevertheless, since there are discrepancies in the signature of the notary public, his PTR and the
document number on the lower-most portion of the document, as well as the said deed of sale being
found only after the plaintiffs-appellants were ejected by the defendants-appellants; that they were
allegedly not aware that the said property was bought by their father, and that they never questioned the
other half of the property not occupied by them, it is apparent that the sale dated March 5, 1975 had the
earmarks of a simulated deed written all over it. The lower court did not err in pronouncing that it be
declared null and void.17

Petitioners, in support of their claim of validity of the said document of deed, again invoke the legal
presumption of regularity. To reiterate, the RTC and later the CA had ruled that the sale, dated March 5,
1975, had the earmarks of a simulated deed, hence, the presumption was already rebutted. Verily and as
aptly noted by the respondent spouses, such presumption of regularity cannot prevail over the facts
proven and already established in the records of this case.

Even on the assumption that the March 5, 1975 deed was not simulated, still the sale cannot be deemed
valid because, at that time, Domingo was not yet the owner of the property. There is no dispute that the
original and registered owner of the subject property covered by TCT No. 16776, from which the subject
9,000 square meter lot came from, was Faustina, who during her lifetime had executed a will, dated July
27, 1939. In the said will, the name of Benjamin, father of Domingo, appeared as one of the heirs. Thus,
and as correctly found by the RTC, even if Benjamin died sometime in 1960, Domingo in 1975 could not
yet validly dispose of the whole or even a portion thereof for the reason that he was not the sole heir of
Benjamin, as his mother only died sometime in 1980.

Besides, under Article 1347 of the Civil Code, "No contract may be entered into upon future inheritance
except in cases expressly authorized by law." Paragraph 2 of Article 1347, characterizes a contract
entered into upon future inheritance as void. The law applies when the following requisites concur: (1) the
succession has not yet been opened; (2) the object of the contract forms part of the inheritance; and (3)
the promissor has, with respect to the object, an expectancy of a right which is purely hereditary in
nature.18

In this case, at the time the deed was executed, Faustina’s will was not yet probated; the object of the
contract, the 9,000 square meter property, still formed part of the inheritance of his father from the estate
of Faustina; and Domingo had a mere inchoate hereditary right therein.1âwphi1

Domingo became the owner of the said property only on August 1, 1994, the time of execution of the
Deed of Extrajudicial Succession with Partition by the heirs of Faustina, when the 9,000 square meter lot
was adjudicated to him.

The CA, therefore, did not err in declaring the March 5, 1975 Deed of Sale null and void.

Domingo’s status as an heir of Faustina by right of representation being undisputed, the RTC should have
maintained the validity of TCT No. 266583 covering the 9,000 square meter subject property. As correctly
concluded by the CA, this served as the inheritance of Domingo from Faustina.

Regarding the deed of sale covering the remaining 4,500 square meters of the subject property executed
in favor of Renato Tabu, it is evidently null and void. The document itself, the Deed of Absolute Sale,
dated October 8, 1996, readily shows that it was executed on August 4, 1996 more than two months after
the death of Domingo. Contracting parties must be juristic entities at the time of the consummation of the
contract. Stated otherwise, to form a valid and legal agreement it is necessary that there be a party
capable of contracting and a party capable of being contracted with. Hence, if any one party to a
supposed contract was already dead at the time of its execution, such contract is undoubtedly simulated
and false and, therefore, null and void by reason of its having been made after the death of the party who
appears as one of the contracting parties therein. The death of a person terminates contractual
capacity.19

The contract being null and void, the sale to Renato Tabu produced no legal effects and transmitted no
rights whatsoever. Consequently, TCT No. 286484 issued to Tabu by virtue of the October 8, 1996 Deed
of Sale, as well as its derivative titles, TCT Nos. 291338 and 291339, both registered in the name of Rena
to Tabu, married to Dolores Laxamana, are likewise void.

The CA erred in deleting that portion in the RTC decision declaring the Deed of Absolute Sale, dated
October 8, 1996, null and void and canceling TCT Nos. 291338 and 291339.

WHEREFORE, the petition is partially GRANTED. The decretal portion of the June 16, 2009 Decision of
the Court of Appeals is hereby MODIFIED to read as follows:

1. The Deed of Absolute Sale, dated March 5, 1975, executed by Domingo Laxamana in favor of
Laureano Cabalu, is hereby declared as null and void.

2. The Deed of Absolute Sale, dated October 8, 1996, executed by Domingo Laxamana in favor
of Renato Tabu, and TCT No. 286484 as well as the derivative titles TCT Nos. 291338 and
291339, both registered in the name of Renato Tabu, married to Dolores Laxamana, are hereby
declared null and void and cancelled.

3. TCT No. 281353 in the name of Domingo Laxamana is hereby ordered restored subject to the
partition by his lawful heirs.

SO ORDERED.

JOSE CATRAL MENDOZA


Associate Justice
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 184148 June 9, 2014

NORA B. CALALANG-PARULAN and ELVIRA B. CALALANG, Petitioners,


vs.
ROSARIO CALALANG-GARCIA, LEONORA CALALANG-SABILE, and CARLITO S.
CALALANG, Respondents.

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari assailing the Decision 1 dated December 21, 2007 and
Resolution2dated July 25, 2008 of the Thirteenth Division of the Court of Appeals (CA) in CA-G.R. CV No.
72531. The CA modified the Decision3 dated July 10, 2001 of the Regional Trial Court (RTC), Branch 21,
of Malolos, Bulacan, in Civil Case No. 370-M-91.

The facts, as culled from the records, follow:

In a Complaint4 for Annulment of Sale and Reconveyance of Property filed with the RTC of Malolos,
Bulacan on June 10, 1991, the respondents Rosario Calalang-Garcia, Leonora Calalang-Sabile, and
Carlito S. Calalang asserted their ownership over a certain parcel of land against the petitioners Nora B.
Calalang-Parulan and Elvira B. Calalang. The said lot with an area of 1,266 square meters and
specifically identified as Lot 1132, Cad. 333, Bigaa Cadastre situated in Brgy. Burol 2nd, Municipality of
Balagtas, Province of Bulacan, was allegedly acquired by the respondents from their mother Encarnacion
Silverio, through succession as the latter’s compulsory heirs.

According to the respondents, their father, Pedro Calalang contracted two marriages during his lifetime.
The first marriage was with their mother Encarnacion Silverio. During the subsistence of this marriage,
their parents acquired the above-mentioned parcel of land from their maternal grandmother Francisca
Silverio. Despite enjoying continuous possession of the land, however, their parents failed to register the
same. On June 7, 1942, the first marriage was dissolved with the death of Encarnacion Silverio.

On November 6, 1967, Pedro Calalang entered into a second marriage with Elvira B. Calalang who then
gave birth to Nora B. Calalang-Parulan and Rolando Calalang. According to the respondents, it was only
during this time that Pedro Calalang filed an application for free patent over the parcel of land with the
Bureau of Lands. Pedro Calalang committed fraud in such application by claiming sole and exclusive
ownership over the land since 1935 and concealing the fact that he had three children with his first
spouse. As a result, on September 22, 1974, the Register of Deeds of Bulacan issued Original Certificate
of Title (OCT) No. P-28715 in favor of Pedro Calalang only.

On February 17, 1984, Pedro Calalang sold the said parcel of land to Nora B. Calalang-Parulan as
evidenced by a Deed of Sale6 executed by both Pedro Calalang and Elvira B. Calalang. Accordingly, the
Register of Deeds of Bulacan cancelled OCT No. P-2871 and issued Transfer Certificate of Title (TCT)
No. 283321 in the name of Nora B. Calalang-Parulan. On December 27, 1989,7 Pedro Calalang died.

The respondents assailed the validity of TCT No. 283321 on two grounds. First, the respondents argued
that the sale of the land was void because Pedro Calalang failed to obtain the consent of the respondents
who were co-owners of the same. As compulsory heirs upon the death of Encarnacion Silverio, the
respondents claimed that they acquired successional rights over the land. Thus, in alienating the land
without their consent, Pedro Calalang allegedly deprived them of their pro indiviso share in the property.
Second, the respondents claimed that the sale was absolutely simulated as Nora B. Calalang-Parulan did
not have the capacity to pay for the consideration stated in the Deed of Sale.

In their Answer,8 the petitioners argued that the parcel of land was acquired during the second marriage
of Pedro Calalang with Elvira B. Calalang. They stressed that OCT No. P-2871 itself stated that it was
issued in the name of "Pedro Calalang, married to Elvira Berba [Calalang]." Thus, the property belonged
to the conjugal partnership of the spouses Pedro Calalang and Elvira B. Calalang. The petitioners
likewise denied the allegation that the sale of the land was absolutely simulated as Nora B. Calalang-
Parulan was gainfully employed in Spain at the time of the sale. Moreover, they alleged that the
respondents did not have a valid cause of action against them and that their cause of action, if any, was
already barred by laches, estoppel and prescription. By way of counterclaim, the petitioners also sought
the payment to them of moral and exemplary damages plus costs of suit for the filing of the clearly
unfounded suit.

On July 10, 2001, the trial court rendered decision in favor of the respondents. The dispositive portion of
the RTC decision reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants in the
following manner:

1. Ordering the defendants to reconvey in favor of the plaintiffs, their rightful share to three-fourth
(3/4) of one-half (1/2) or a total of 474.75 square meters at 158.25 square meters for each of the
three plaintiffs, namely: Rosario, Leonora, and Juanito all surname[d] Calalang, of the real
property covered by TCT No. 283321 of the Registry of Deeds of Bulacan corresponding to their
shares in the conjugal estate of the late Encarnacion S. Calalang [sic];

2. Ordering defendants to pay plaintiffs the amount of ₱50,000.00 for moral damages;
₱50,000.00 for attorney’s fees and another ₱50,000.00 for litigation expenses.

3. Dismissing the defendants’ counterclaims.

With costs against the defendants.

SO ORDERED.9

The trial court declared that the parcel of land was jointly acquired by the spouses Pedro Calalang and
Encarnacion Silverio from the parents of the latter. Thus, it was part of the conjugal property of the first
marriage of Pedro Calalang. When this marriage was dissolved upon the death of Encarnacion Silverio
on June 7, 1942,the corresponding shares to the disputed property were acquired by the heirs of the
decedent according to the laws of succession. In particular, the trial court allocated half of the disputed
property to Pedro Calalang as his share in the conjugal partnership and allocated the other half to the
three respondents and Pedro Calalang to be divided equally among them. The trial court then ordered all
of Pedro’s share to be given to Nora B. Calalang-Parulan on account of the sale. The trial court also ruled
that because the application for free patent filed by Pedro Calalang was attended by fraud and
misrepresentation, Pedro Calalang should be considered as a trustee of an implied trust.

Aggrieved by the adverse ruling, the petitioners appealed the case to the CA which rendered the assailed
Decision on December 21, 2007. The dispositive portion of the CA decision reads,

WHEREFORE, in light of the foregoing premises, the Decision dated July 10, 2001of the Regional Trial
Court of Malolos, Bulacan is hereby MODIFIED to read as follows:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs, and against the defendants in the
following manner:

1. Ordering the defendants to reconvey in favor of the plaintiffs, their rightful share to the property
owned by their common father Pedro Calalang, equivalent to one half(1/2) portion of the whole
area or 633 square meters to be divided equally by the three plaintiffs, namely:

Rosario, Leonora and Carlito, all surnamed Calalang, each getting an area of 211 square
meters of the property covered by TCT No. 2883321 of the Registry of Deeds of Bulacan
corresponding to their shares in the property of their late father Pedro Calalang;

2. Ordering defendants to pay plaintiffs the amount of ₱50,000.00 for moral damages;
₱50,000.00 for attorney’s fees and another ₱50,000.00 for litigation expenses.

3. Dismissing the defendants’ counterclaims.

With costs against the defendants.

SO ORDERED.

SO ORDERED.10

The CA reversed the factual findings of the trial court and held that Pedro Calalang was the sole and
exclusive owner of the subject parcel of land. Firstly, it held that there was insufficient evidence to prove
that the disputed property was indeed jointly acquired from the parents of Encarnacion Silverio during the
first marriage. Secondly, the CA upheld the indefeasibility of OCT No. P-2871. It held that although the
free patent was issued in the name of "Pedro Calalang, married to Elvira Berba [Calalang]" this phrase
was merely descriptive of the civil status of Pedro Calalang at the time of the registration of the disputed
property. Thus, contrary to the ruling of the trial court, upon the death of Encarnacion Silverio on June 7,
1942, the respondents did not acquire any successional rights to the parcel of land which was exclusively
owned by Pedro Calalang. However, applying the rules of succession, Pedro’s heirs namely, Rosario
Calalang-Garcia, Leonora Calalang-Sabile, Carlito Calalang, Nora B. Calalang-Parulan, Elvira B.
Calalang, and Rolando Calalang, succeeded Pedro to the land in equal shares upon his death. Thus, the
CA ordered the petitioners to reconvey in favor of the respondents their rightful shares to the land. The
CA ruled that the sale by Pedro Calalang to Nora B. Calalang-Parulan was fraudulent and fictitious as the
vendee was in bad faith and the respondents were unlawfully deprived of their pro indiviso shares over
the disputed property. As regards the issue of prescription, the CA ruled that the prescriptive period for
reconveyance of fraudulently registered real property is ten years. Since the property was registered in
the name of Nora in1984 and the action for reconveyance was filed in 1991, the action has not yet
prescribed.

On January 23, 2008, petitioners filed their Motion for Reconsideration. The CA, however, denied their
motion in its Resolution dated July 25, 2008.

Hence, this petition raising the sole issue:

Whether or not the court a quo gravely erred in rendering its December 21, 2007 Decision modifying the
July 10, 2001 Decision of the trial court, and in issuing its July 25, 2008 Resolution denying petitioners’
Motion for Reconsideration dated January 23, 2008.11

Essentially, the only issue in this case is whether Pedro Calalang was the exclusive owner of the disputed
property prior to its transfer to his daughter Nora B. Calalang-Parulan.

The petitioners argue that the disputed property belonged to the conjugal partnership of the second
marriage of Pedro Calalang with Elvira B. Calalang as evidenced by OCT No. P-2871 which was issued
to Pedro Calalang during the subsistence of his marriage to Elvira B. Calalang. On the other hand, the
respondents claim that the disputed property was transferred by their maternal grandmother, Francisca
Silverio, to their parents, Pedro Calalang and Encarnacion Silverio, during the latter’s marriage. Thus, the
respondents argue that it belonged to the conjugal partnership of the first marriage of Pedro Calalang with
Encarnacion Silverio.

The petition is meritorious.

Preliminarily, we note that the resolution of the issue in this case requires a reevaluation of the probative
value of the evidence presented by the parties in order to trace the title of the disputed property. What is
involved is indeed a question of fact which is generally beyond the jurisdiction of this Court to resolve in a
petition for review on certiorari.12 However, a recognized exception to the rule is when the RTC and CA
have conflicting findings of fact as in this case.13 Here, while the trial court ruled that the disputed property
belonged to the conjugal partnership of the first marriage of Pedro Calalang with Encarnacion Silverio, the
court a quo declared that the evidence proved the sole and exclusive ownership of the disputed property
of Pedro Calalang.

We have carefully reviewed the records of this case and sustain the finding of the CA that Pedro Calalang
is the sole and exclusive owner of the disputed property.

The trial court ruled that the respondents were able to establish that Lot 1132, Cad. 333 originated from
the parents of Encarnacion, and therefore said property "either became property of Encarnacion in her
own right or jointly with her husband Pedro Calalang in 1936." In so ruling, the trial court relied on the
testimony of Rosario Calalang-Garcia that her parents built a nipa house on the subject lot and lived there
before and after World War II. The trial court further noted that Rosario’s testimony was corroborated by
her cousin and adjacent neighbor Manolo Calalang.14

However, as correctly pointed out by the CA, a close perusal of the records of this case would show that
the records are bereft of any concrete proof to show that the subject property indeed belonged to
respondents’ maternal grandparents. The evidence respondents adduced merely consisted of testimonial
evidence such as the declaration of Rosario Calalang-Garcia that they have been staying on the property
as far as she can remember and that the property was acquired by her parents through purchase from
her maternal grandparents. However, she was unable to produce any document to evidence the said
sale, nor was she able to present any documentary evidence such as the tax declaration issued in the
name of either of her parents. Moreover, we note that the free patent was issued solely in the name of
Pedro Calalang and that it was issued more than 30 years after the death of Encarnacion and the
dissolution of the conjugal partnership of gains of the first marriage. Thus, we cannot subscribe to
respondents’ submission that the subject property originally belonged to the parents of Encarnacion and
was acquired by Pedro Calalang and Encarnacion.

We likewise cannot sustain the argument of the petitioners that the disputed property belongs to the
conjugal partnership of the second marriage of Pedro Calalang with Elvira B. Calalang on the ground that
the title was issued in the name of "Pedro Calalang, married to Elvira Berba [Calalang]."

The contents of a certificate of title are enumerated by Section 45 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree:

SEC. 45. Statement of personal circumstances in the certificate. – Every certificate of title shall set forth
the full names of all persons whose interests make up the full ownership in the whole land, including their
civil status, and the names of their respective spouses, if married, as well as their citizenship, residence
and postal address. If the property covered belongs to the conjugal partnership, it shall be issued in the
names of both spouses.1âwphi1
A plain reading of the above provision would clearly reveal that the phrase "Pedro Calalang, married to
Elvira Berba [Calalang]" merely describes the civil status and identifies the spouse of the registered
owner Pedro Calalang. Evidently, this does not mean that the property is conjugal. In Litam v.
Rivera,15 we declared:

Further strong proofs that the properties in question are the paraphernal properties of Marcosa Rivera,
are the very Torrens Titles covering said properties. All the said properties are registered in the name of
"Marcosa Rivera, married to Rafael Litam." This circumstance indicates that the properties in question
belong to the registered owner, Marcosa Rivera, as her paraphernal properties, for if they were conjugal,
the titles covering the same should have been issued in the names of Rafael Litam and Marcosa Rivera.
The words "married to Rafael Litam" written after the name of Marcosa Rivera, in each of the above
mentioned titles are merely descriptive of the civil status of Marcosa Rivera, the registered owner of the
properties covered by said titles.

It must likewise be noted that in his application for free patent, 16 applicant Pedro Calalang averred that
the land was first occupied and cultivated by him since 1935 and that he had planted mango trees,
coconut plants, caimito trees, banana plants and seasonal crops and built his house on the subject lot.
But he applied for free patent only in 1974 and was issued a free patent while already married to Elvira B.
Calalang. Thus, having possessed the subject land in the manner and for the period required by law after
the dissolution of the first marriage and before the second marriage, the subject property ipso jure
became private property and formed part of Pedro Calalang’s exclusive property. 17 It was therefore
excluded from the conjugal partnership of gains of the second marriage. 18

As the sole and exclusive owner, Pedro Calalang had the right to convey his property in favor of Nora B.
Calalang-Parulan by executing a Deed of Sale on February 17, 1984. The CA therefore erred in ruling
that Pedro Calalang deprived his heirs of their respective shares over the disputed property when he
alienated the same.

It is hornbook doctrine that successional rights are vested only at the time of death. Article 777 of the New
Civil Code provides that "[t]he rights to the succession are transmitted from the moment of the death of
the decedent." In Butte v. Manuel Uy and Sons, Inc.,19 we proclaimed the fundamental tenets of
succession:

The principle of transmission as of the time of the predecessor's death is basic in our Civil Code, and is
supported by other related articles. Thus, the capacity of the heir is determined as of the time the
decedent died (Art. 1034); the legitime is to be computed as of the same moment (Art. 908), and so is the
in officiousness of the donation inter vivas (Art. 771). Similarly, the legacies of credit and remission are
valid only in the amount due and outstanding at the death of the testator (Art. 935), and the fruits accruing
after that instant are deemed to pertain to the legatee (Art. 948).

Thus, it is only upon the death of Pedro Calalang on December 27, 1989 that his heirs acquired their
respective inheritances, entitling them to their pro indiviso shares to his whole estate. At the time of the
sale of the disputed property, the rights to the succession were not yet bestowed upon the heirs of Pedro
Calalang. And absent clear and convincing evidence that the sale was fraudulent or not duly supported by
valuable consideration (in effect an in officious donation inter vivas), the respondents have no right to
question the sale of the disputed property on the ground that their father deprived them of their respective
shares. Well to remember, fraud must be established by clear and convincing evidence. Mere
preponderance of evidence is not even adequate to prove fraud. 20 The Complaint for Annulment of Sale
and Reconveyance of Property must therefore be dismissed.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated December 21, 2007
and Resolution dated July 25, 2008 of the Thirteenth Division of the Court of Appeals in CA-G.R. CV No.
72531 are REVERSED and SET ASIDE. Civil Case No. 370-M-91, or the Complaint for Annulment of
Sale and Reconveyance of Property filed by the respondents with the Regional Trial Court, Branch 21 of
Malolos, Bulacan, on June 10, 1991, is hereby DISMISSED for lack of merit.

No pronouncement as to costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.


Associate Justice
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-15499 February 28, 1962

ANGELA M. BUTTE, plaintiff-appellant,


vs.
MANUEL UY and SONS, INC., defendant-appellee.

Delgado, Flores and Macapagal for plaintiff-appellant.


Pelaez and Jalandoni for defendant-appellee.

REYES, J.B.L., J.:

Appeal from a decision of the Court of First instance of Manila dismissing the action for legal redemption
filed by plaintiff-appellant.

It appears that Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot located at Sta.
Cruz, Manila, as shown by Transfer Certificate of Title No. 52789, issued in the name of the following co-
owners: Marie Garnier Vda. de Ramirez, 1/6; Jose V. Ramirez, 1/6; Jose E. Ramirez, 1/6; Rita de
Ramirez, 1/6; and Jose Ma. Ramirez, 1/6.

On October 20, 1951, Jose V. Ramirez died. Subsequently, Special Proceeding No. 15026 was instituted
to settle his estate, that included the one-sixth (1/6) undivided share in the aforementioned property. And
although his last will and testament, wherein he bequeathed his estate to his children and grandchildren
and one-third (1/3) of the free portion to Mrs. Angela M. Butte, hereinafter referred to as plaintiff-appellant,
has been admitted to probate, the estate proceedings are still pending up to the present on account of the
claims of creditors which exceed the assets of the deceased. The Bank of the Philippine Islands was
appointed judicial administrator.

Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de Ramirez, one of the co-owners of the late
Jose V. Ramirez in the Sta. Cruz property, sold her undivided 1/6 share to Manuel Uy & Sons, Inc.
defendant-appellant herein, for the sum of P500,000.00. After the execution by her attorney-in-fact, Mrs.
Elsa R. Chambers, of an affidavit to the effect that formal notices of the sale had been sent to all possible
redemptioners, the deed of sale was duly registered and Transfer Certificate of Title No. 52789 was
cancelled in lieu of which a new one was issued in the name of the vendee and the other-co-owners.

On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent a letter to the Bank of the Philippine
Islands as judicial administrator of the estate of the late Jose V. Ramirez informing it of the above-
mentioned sale. This letter, together with that of the bank, was forwarded by the latter to Mrs. Butte c/o
her counsel Delgado, Flores & Macapagal, Escolta, Manila, and having received the same on December
10, 1958, said law office delivered them to plaintiff-appellant's son, Mr. Miguel Papa, who in turn
personally handed the letters to his mother, Mrs. Butte, on December 11 and 12, 1958. Aside from this
letter of defendant-appellant, the vendor, thru her attorney-in-fact Mrs. Chambers, wrote said bank on
December 11, 1958 confirming vendee's letter regarding the sale of her 1/6 share in the Sta. Cruz
property for the sum of P500,000.00. Said letter was received by the bank on December 15, 1958 and
having endorsed it to Mrs. Butte's counsel, the latter received the same on December 16, 1958. Appellant
received the letter on December 19, 1958.

On January 15, 1959, Mrs. Angela M. Butte, thru Atty. Resplandor Sobretodo, sent a letter and a
Philippine National Bank cashier's check in the amount of P500,000.00 to Manuel Uy & Sons, Inc. offering
to redeem the 1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez. This tender having been refused,
plaintiff on the same day consigned the amount in court and filed the corresponding action for legal
redemption. Without prejudice to the determination by the court of the reasonable and fair market value of
the property sold which she alleged to be grossly excessive, plaintiff prayed for conveyance of the
property, and for actual, moral and exemplary damages.

After the filing by defendant of its answer containing a counterclaim, and plaintiff's reply thereto, trial was
held, after which the court rendered decision on May 13, 1959, dismissing plaintiff's complaint on the
grounds that she has no right to redeem the property and that, if ever she had any, she exercised the
same beyond the statutory 30-day period for legal redemptions provided by the Civil Code. The
counterclaim of defendant for damages was likewise dismissed for not being sufficiently established. Both
parties appealed directly to this Court.

Based on the foregoing facts, the main issues posed in this appeal are: (1) whether or not plaintiff-
appellant, having been bequeathed 1/3 of the free portion of the estate of Jose V. Ramirez, can exercise
the right of legal redemption over the 1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez despite the
presence of the judicial administrator and pending the final distribution of her share in the testate
proceedings; and (2) whether or not she exercised the right of legal redemption within the period
prescribed by law.

The applicable law involved in the present case is contained in Articles 1620, p. 1, and 1623 of the Civil
Code of the Philippines, which read as follows:

ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all
the other-co-owners or of any of them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common. (1522a)

ART. 1623. The right of legal predemption or redemption shall not be exercised except within
thirty days from the notice in writing by the respective vendor, or by the vendor, as the case may
be. The deed of sale shall not be accorded in the Registry of Property, unless accompanied by an
affidavit of the vendor that he has given written notice thereof at all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners. (1524a)

That the appellant Angela M. Butte is entitled to exercise the right of legal redemption is clear. As
testamentary heir of the estate of J.V. Ramirez, she and her co-heirs acquired an interest in the undivided
one-sixth (1/6) share owned by her predecessor (causante) in the Santa Cruz property, from the moment
of the death of the aforesaid co-owner, J.V. Ramirez. By law, the rights to the succession of a deceased
persons are transmitted to his heirs from the moment of his death, and the right of succession includes all
property rights and obligations that survive the decedent.

ART. 776. The inheritance includes all the property, rights and obligations of a person which are
not extinguished by his death. (659)

ART. 777. The rights to the succession are transmitted from the moment of the death of the
decedent. (657a)

ART. 947. The legatee or devisee acquires a right to the pure and simple legacies or devisees
from the death of the testator, and transmits it to his heirs. (881a)

The principle of transmission as of the time of the predecessor's death is basic in our Civil Code, and is
supported by other related articles. Thus, the capacity of the heir is determined as of the time the
decedent died (Art. 1034); the legitime is to be computed as of the same moment(Art. 908), and so is the
in officiousness of the donation inter vivos (Art. 771). Similarly, the legacies of credit and remission are
valid only in the amount due and outstanding at the death of the testator (Art. 935),and the fruits accruing
after that instant are deemed to pertain to the legatee (Art. 948).

As a consequence of this fundamental rule of succession, the heirs of Jose V. Ramirez acquired his
undivided share in the Sta. Cruz property from the moment of his death, and from that instant, they
became co-owners in the aforesaid property, together with the original surviving co-owners of their
decedent (causante). A co-owner of an undivided share is necessarily a co-owner of the whole.
Wherefore, any one of the Ramirez heirs, as such co-owner, became entitled to exercise the right of legal
redemption (retracto de comuneros) as soon as another co-owner (Maria Garnier Vda. de Ramirez) had
sold her undivided share to a stranger, Manuel Uy & Sons, Inc. This right of redemption vested
exclusively in consideration of the redemptioner's share which the law nowhere takes into account.

The situation is in no wise altered by the existence of a judicial administrator of the estate of Jose V.
Ramirez while under the Rules of Court the administrator has the right to the possession of the real and
personal estate of the deceased, so far as needed for the payment of the decedent's debts and the
expenses of administration (sec. 3, Rule 85), and the administrator may bring or defend actions for the
recovery or protection of the property or rights of the deceased (sec. 2, Rule 88), such rights of
possession and administration do not include the right of legal redemption of the undivided share sold to
Uy & Company by Mrs. Garnier Ramirez. The reason is obvious: this right of legal redemption only came
into existence when the sale to Uy & Sons, Inc. was perfected, eight (8) years after the death of Jose V.
Ramirez, and formed no part of his estate. The redemption right vested in the heirs originally, in their
individual capacity, they did not derivatively acquire it from their decedent, for when Jose V. Ramirez
died, none of the other co-owners of the Sta. Cruz property had as yet sold his undivided share to a
stranger. Hence, there was nothing to redeem and no right of redemption; and if the late Ramirez had no
such right at his death, he could not transmit it to his own heirs. Much less could Ramirez acquire such
right of redemption eight years after his death, when the sale to Uy & Sons, Inc. was made; because
death extinguishes civil personality, and, therefore, all further juridical capacity to acquire or transmit
rights and obligations of any kind (Civil Code of the Phil., Art. 42).

It is argued that the actual share of appellant Mrs. Butte in the estate of Jose V. Ramirez has not been
specifically determined as yet, that it is still contingent; and that the liquidation of estate of Jose V.
Ramirez may require the alienation of the decedent's undivided portion in the Sta. Cruz property, in which
event Mrs. Butte would have no interest in said undivided portion. Even if it were true, the fact would
remain that so long as that undivided share remains in the estate, the heirs of Jose V. Ramirez own it, as
the deceased did own it before his demise, so that his heirs are now as much co-owners of the Sta. Cruz
property as Jose V. Ramirez was himself a co-owner thereof during his lifetime. As co-owners of the
property, the heirs of Jose V. Ramirez, or any one of them, became personally vested with right of legal
redemption as soon as Mrs. Garnier sold her own pro-indiviso interest to Uy & Sons. Even if
subsequently, the undivided share of Ramirez (and of his heirs) should eventually be sold to satisfy the
creditors of the estate, it would not destroy their ownership of it before the sale, but would only convey or
transfer it as in turn sold (of it actually is sold) to pay his creditors. Hence, the right of any of the Ramirez
heirs to redeem the Garnier share will not be retroactively affected. All that the law requires is that the
legal redemptioner should be a co-owner at the time the undivided share of another co-owner is sold to a
stranger. Whether or not the redemptioner will continue being a co-owner after exercising the legal
redemptioner is irrelevant for the purposes of law.

Nor it can be argued that if the original share of Ramirez is sold by the administrator, his heirs would
stand in law as never having acquired that share. This would only be true if the inheritance is repudiated
or the heir's quality as such is voided. But where the heirship is undisputed, the purchaser of hereditary
property is not deemed to have acquired the title directly from the deceased Ramirez, because a dead
man can not convey title, nor from the administrator who owns no part of the estate; the purchaser can
only derive his title from the Ramirez heirs, represented by the administrator, as their trustee or legal
representative.

The right of appellant Angela M. Butte to make the redemption being established, the next point of inquiry
is whether she had made or tendered the redemption price within the 30 days from notices as prescribed
by law. This period, be it noted, is peremptory, because the policy of the law is not to leave the
purchaser's title in uncertainty beyond the established 30-day period. In considering whether or not the
offer to redeem was timely, we think that the notice given by the vendee (buyer) should not be taken into
account. The text of Article 1623 clearly and expressly prescribes that the thirty days for making the
redemption are to be counted from notice in writing by the vendor. Under the old law (Civ. Code of 1889,
Art. 1524), it was immaterial who gave the notice; so long as the redeeming co-owner learned of the
alienation in favor of the stranger, the redemption period began to run. It is thus apparent that the
Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that
method must be deemed exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W. [2d] 528). As ruled in
Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275) —

Why these provisions were inserted in the statute we are not informed, but we may assume until
the contrary is shown, that a state of facts in respect thereto existed, which warranted the
legislature in so legislating.

The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily
divined. The seller of an undivided interest is in the best position to know who are his co-owners that
under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to the fact
of the sale, its perfection; and its validity, the notice being a reaffirmation thereof, so that the party need
not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the
notice should be given by the buyer.

The notice which became operative is that given by Mrs. Chambers, in her capacity as attorney-in-fact of
the vendor Marie Garnier Vda. de Ramirez. Under date of December 11, 1958, she wrote the
Administrator Bank of the Philippine Islands that her principal's one-sixth (1/6) share in the Sta. Cruz
property had been sold to Manuel Uy & Sons, Inc. for P500,000.00. The Bank received this notice on
December 15, 1958, and on the same day endorsed it to Mrs. Butte, care of Delgado, Flores and
Macapagal (her attorneys), who received the same on December 16, 1958. Mrs. Butte tendered
redemption and upon the vendee's refusal, judicially consigned the price of P500,000.00 on January 15,
1959. The latter date was the last one of the thirty days allowed by the Code for the redemption, counted
by excluding December 16, 1958 and including January 15, 1959, pursuant to Article 13 of the Civil Code.
Therefore, the redemption was made in due time.

The date of receipt of the vendor's notice by the Administrator Bank (December 15) can not be counted
as determining the start of thirty days; for the Administrator of the estate was not a proper redemptioner,
since, as previously shown, the right to redeem the share of Marie Garnier did not form part of the estate
of Jose V. Ramirez.

We find no jurisdiction for appellant's claim that the P500,000,00. paid by Uy & Sons, Inc. for the Garnier
share is grossly excessive. Gross excess cannot be predicated on mere individual estimates of market
price by a single realtor.

The redemption and consignation having been properly made, the Uy counterclaim for damages and
attorney's fees predicated on the assumption that plaintiff's action was clearly unfounded, becomes
untenable.

PREMISES CONSIDERED, the judgment appealed from is hereby reversed and set aside, and another
one entered:
(a) Declaring the consignation of P500,000,00 made by appellant Angela M. Butte duly and
properly made;

(b) Declaring that said appellant properly exercised in due time the legal redemption of the one-
sixth (1/6) undivided portion of the land covered by Certificate of Title No. 59363 of the Office of
the Register of Deeds of the City of Manila, sold on December 9, 1958 by Marie Garnier Vda. de
Ramirez to appellant Manuel Uy & Sons, Inc.

(c) Ordering appellant Manuel Uy & Sons, Inc. to accept the consigned price and to convey to
Angela M. Butte the undivided portion above referred to, within 30 days from the time our
decision becomes final, and subsequently to account for the rentals and fruits of the redeemed
share from and after January 15, 1958, until its conveyance; and.

(d) Ordering the return of the records to the court of origin for further proceedings conformable to
this opinion.

Without finding as to costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera and Dizon, JJ., concur.
Paredes and De Leon, JJ., took no part.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 82027 March 29, 1990

ROMARICO G. VITUG, petitioner,


vs.
THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINO-CORONA, respondents.

Rufino B. Javier Law Office for petitioner.

Quisumbing, Torres & Evangelista for private respondent.

SARMIENTO, J.:

This case is a chapter in an earlier suit decided by this Court 1 involving the probate of the two wills of the
late Dolores Luchangco Vitug, who died in New York, U. S.A., on November 10, 1980, naming private
respondent Rowena Faustino-Corona executrix. In our said decision, we upheld the appointment of
Nenita Alonte as co-special administrator of Mrs. Vitug's estate with her (Mrs. Vitug's) widower, petitioner
Romarico G. Vitug, pending probate.

On January 13, 1985, Romarico G. Vitug filed a motion asking for authority from the probate court to sell
certain shares of stock and real properties belonging to the estate to cover allegedly his advances to the
estate in the sum of P667,731.66, plus interests, which he claimed were personal funds. As found by the
Court of Appeals, 2 the alleged advances consisted of P58,147.40 spent for the payment of estate tax,
P518,834.27 as deficiency estate tax, and P90,749.99 as "increment thereto." 3 According to Mr. Vitug, he
withdrew the sums of P518,834.27 and P90,749.99 from savings account No. 35342-038 of the Bank of
America, Makati, Metro Manila.

On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that the same funds
withdrawn from savings account No. 35342-038 were conjugal partnership properties and part of the
estate, and hence, there was allegedly no ground for reimbursement. She also sought his ouster for
failure to include the sums in question for inventory and for "concealment of funds belonging to the
estate." 4

Vitug insists that the said funds are his exclusive property having acquired the same through a
survivorship agreement executed with his late wife and the bank on June 19, 1970. The agreement
provides:

We hereby agree with each other and with the BANK OF AMERICAN NATIONAL TRUST
AND SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money now
or hereafter deposited by us or any or either of us with the BANK in our joint savings
current account shall be the property of all or both of us and shall be payable to and
collectible or withdrawable by either or any of us during our lifetime, and after the death of
either or any of us shall belong to and be the sole property of the survivor or survivors,
and shall be payable to and collectible or withdrawable by such survivor or survivors.

We further agree with each other and the BANK that the receipt or check of either, any or
all of us during our lifetime, or the receipt or check of the survivor or survivors, for any
payment or withdrawal made for our above-mentioned account shall be valid and
sufficient release and discharge of the BANK for such payment or withdrawal. 5

The trial courts 6 upheld the validity of this agreement and granted "the motion to sell some of the estate
of Dolores L. Vitug, the proceeds of which shall be used to pay the personal funds of Romarico Vitug in
the total sum of P667,731.66 ... ." 7

On the other hand, the Court of Appeals, in the petition for certiorari filed by the herein private
respondent, held that the above-quoted survivorship agreement constitutes a conveyance mortis
causa which "did not comply with the formalities of a valid will as prescribed by Article 805 of the Civil
Code," 8 and secondly, assuming that it is a mere donation inter vivos, it is a prohibited donation under
the provisions of Article 133 of the Civil Code. 9

The dispositive portion of the decision of the Court of Appeals states:

WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex II,
petition) is hereby set aside insofar as it granted private respondent's motion to sell
certain properties of the estate of Dolores L. Vitug for reimbursement of his alleged
advances to the estate, but the same order is sustained in all other respects. In addition,
respondent Judge is directed to include provisionally the deposits in Savings Account No.
35342-038 with the Bank of America, Makati, in the inventory of actual properties
possessed by the spouses at the time of the decedent's death. With costs against private
respondent. 10

In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the strength of our
decisions in Rivera v. People's Bank and Trust Co. 11 and Macam v. Gatmaitan 12 in which we sustained
the validity of "survivorship agreements" and considering them as aleatory contracts. 13

The petition is meritorious.

The conveyance in question is not, first of all, one of mortis causa, which should be embodied in a will. A
will has been defined as "a personal, solemn, revocable and free act by which a capacitated person
disposes of his property and rights and declares or complies with duties to take effect after his
death." 14 In other words, the bequest or device must pertain to the testator. 15 In this case, the monies
subject of savings account No. 35342-038 were in the nature of conjugal funds In the case relied
on, Rivera v. People's Bank and Trust Co., 16 we rejected claims that a survivorship agreement purports
to deliver one party's separate properties in favor of the other, but simply, their joint holdings:

xxx xxx xxx

... Such conclusion is evidently predicated on the assumption that Stephenson was the
exclusive owner of the funds-deposited in the bank, which assumption was in turn based
on the facts (1) that the account was originally opened in the name of Stephenson alone
and (2) that Ana Rivera "served only as housemaid of the deceased." But it not
infrequently happens that a person deposits money in the bank in the name of another;
and in the instant case it also appears that Ana Rivera served her master for about
nineteen years without actually receiving her salary from him. The fact that subsequently
Stephenson transferred the account to the name of himself and/or Ana Rivera and
executed with the latter the survivorship agreement in question although there was no
relation of kinship between them but only that of master and servant, nullifies the
assumption that Stephenson was the exclusive owner of the bank account. In the
absence, then, of clear proof to the contrary, we must give full faith and credit to the
certificate of deposit which recites in effect that the funds in question belonged to Edgar
Stephenson and Ana Rivera; that they were joint (and several) owners thereof; and that
either of them could withdraw any part or the whole of said account during the lifetime of
both, and the balance, if any, upon the death of either, belonged to the survivor. 17

xxx xxx xxx

In Macam v. Gatmaitan, 18 it was held:

xxx xxx xxx

This Court is of the opinion that Exhibit C is an aleatory contract whereby, according to
article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to
give or do something as an equivalent for that which the other party is to give or do in
case of the occurrence of an event which is uncertain or will happen at an indeterminate
time. As already stated, Leonarda was the owner of the house and Juana of the Buick
automobile and most of the furniture. By virtue of Exhibit C, Juana would become the
owner of the house in case Leonarda died first, and Leonarda would become the owner
of the automobile and the furniture if Juana were to die first. In this manner Leonarda and
Juana reciprocally assigned their respective property to one another conditioned upon
who might die first, the time of death determining the event upon which the acquisition of
such right by the one or the other depended. This contract, as any other contract, is
binding upon the parties thereto. Inasmuch as Leonarda had died before Juana, the latter
thereupon acquired the ownership of the house, in the same manner as Leonarda would
have acquired the ownership of the automobile and of the furniture if Juana had died
first. 19

xxx xxx xxx

There is no showing that the funds exclusively belonged to one party, and hence it must be presumed to
be conjugal, having been acquired during the existence of the marita. relations. 20

Neither is the survivorship agreement a donation inter vivos, for obvious reasons, because it was to take
effect after the death of one party. Secondly, it is not a donation between the spouses because it involved
no conveyance of a spouse's own properties to the other.
It is also our opinion that the agreement involves no modification petition of the conjugal partnership, as
held by the Court of Appeals, 21 by "mere stipulation" 22 and that it is no "cloak" 23 to circumvent the law on
conjugal property relations. Certainly, the spouses are not prohibited by law to invest conjugal property,
say, by way of a joint and several bank account, more commonly denominated in banking parlance as an
"and/or" account. In the case at bar, when the spouses Vitug opened savings account No. 35342-038,
they merely put what rightfully belonged to them in a money-making venture. They did not dispose of it in
favor of the other, which would have arguably been sanctionable as a prohibited donation. And since the
funds were conjugal, it can not be said that one spouse could have pressured the other in placing his or
her deposits in the money pool.

The validity of the contract seems debatable by reason of its "survivor-take-all" feature, but in reality, that
contract imposed a mere obligation with a term, the term being death. Such agreements are permitted by
the Civil Code. 24

Under Article 2010 of the Code:

ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind
themselves to give or to do something in consideration of what the other shall give or do
upon the happening of an event which is uncertain, or which is to occur at an
indeterminate time.

Under the aforequoted provision, the fulfillment of an aleatory contract depends on either the happening
of an event which is (1) "uncertain," (2) "which is to occur at an indeterminate time." A survivorship
agreement, the sale of a sweepstake ticket, a transaction stipulating on the value of currency, and
insurance have been held to fall under the first category, while a contract for life annuity or pension under
Article 2021, et sequentia, has been categorized under the second. 25 In either case, the element of risk is
present. In the case at bar, the risk was the death of one party and survivorship of the other.

However, as we have warned:

xxx xxx xxx

But although the survivorship agreement is per se not contrary to law its operation or
effect may be violative of the law. For instance, if it be shown in a given case that such
agreement is a mere cloak to hide an inofficious donation, to transfer property in fraud of
creditors, or to defeat the legitime of a forced heir, it may be assailed and annulled upon
such grounds. No such vice has been imputed and established against the agreement
involved in this case. 26

xxx xxx xxx

There is no demonstration here that the survivorship agreement had been executed for such unlawful
purposes, or, as held by the respondent court, in order to frustrate our laws on wills, donations, and
conjugal partnership.

The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her husband, the latter
has acquired upon her death a vested right over the amounts under savings account No. 35342-038 of
the Bank of America. Insofar as the respondent court ordered their inclusion in the inventory of assets left
by Mrs. Vitug, we hold that the court was in error. Being the separate property of petitioner, it forms no
more part of the estate of the deceased.

WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987, and its resolution,
dated February 9, 1988, are SET ASIDE.

No costs.

SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Regalado JJ., concur.

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