ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-AppellantFACTS: Luzon Surety Co. filed a claim against the Estate based on 20 different indemnity agreements, or counterbonds, each subscribed by a distinct principal and by the deceased K. H. Hemady, a surety solidary guarantor. Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of the 20 bonds it executed inconsideration of the counterbonds, and asked for judgment for the unpaid premiums and documentarystamps affixedto thebonds, with12 % interest thereon.CFI dismissed the claims ofLuzon SuretyCo.,on failure to state the causeof action.

ISSUE: What obligations are transmissibleupon the deathof the decedent?Are contingentclaims chargeable against the estate?

RULING:Under the present Civil Code (Art. 1311),Contracts take effect only as between the parties, their assigns and heirs, except in the case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation orby provision of law.While in our successional system the responsibility of the heirs for the debts of their decedent cannot exceed the value of the inheritance they receive from him, the principle remains intact that these heirs succeed not only to the rights of the deceased but also to his obligations. Articles 774 & 776,NCC,provides, thereby confirming Art. 1311. ART. 774. Succession is a mode of acquisition by virtue of which theproperty, rights and obligations to the extent of thevalue of the inheritance, of aperson are transmitted through his death toanother orotherseitherbyhiswillorbyoperationoflaw.ART.776.The inheritance includes all the property, rights and obligationsof a person which are not extinguished by his death.The binding effect of contracts upon the heirs of the deceased party is not altered by the provision in our Rules of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is distributed among said heirs (Rule 89). The reason is that whatever payment is made from the estate is ultimately a payment by the heirs and distributees, since the amount of the paid claim in fact diminishes or reduces the shares that the heirswould have been entitled to receive. The general rule is that a partys contractual rights and obligations are transmissible to the successors. The rule is a consequence of the progressive depersonalization of patrimonial rights and duties.Of the 3 exceptions fixed by Art 1311, the nature of obligation of the surety or guarantor does not warrant the conclusion that his peculiar individual qualities are contemplated as a principal inducement for the contract. Creditor Luzon Surety Co. expects from Hemady when it accepted the latter as surety in the counterbonds was the reimbursement of the moneys that the Luzon Surety Co. might have to disburse on account of the obligations of the principal debtors. This reimbursement is a payment of a sum of money, resulting from anobligation to give;and to the Luzon Surety Co.,it was indifferentthat the reimbursement should be made by Hemady himself or by someone else in his behalf, so long as the money was paid to it. The 2nd exception of Art. 1311, is intransmissibility by stipulation of the parties. Being exceptional andcontrary to the general rule, this intransmissibility should not be easily implied, but must be expressly established, or at the very least, clearly inferable from the provisions of the contract itself, and the text of the agreements sued upon nowhere indicate that they are non-transferable. The 3rd exception to the transmissibility of obligations under Art.1311 exists when they are not transmissible by operation of law. The provision makes referenceto those cases where the law expresses that the rights or obligations are extinguished by death: legal support, parental authority, usufruct, contracts for a piece of work, partnership & agency. By contract, the articles of the Civil Code that regulate guaranty or suretyship (Art 2047 to 2084) contain no provision that the guaranty is extinguished upon the death of theguarantor or the surety.The contracts of suretyship entered into by Hemady in favor of Luzon Surety Co. not being rendered intransmissible due to the nature of the undertaking, nor by the stipulations of the contracts themselves, nor by provision of law, his eventual liability there under necessarily passed upon his death to his heirs. The contracts give rise to contingent claims provable against his estate under sec. 5, Rule 87.The most common example of the contigent claim is that which arises when a person is bound as surety or guarantor for a principal who is insolvent or dead. Under the ordinary contract of suretyship the surety has no claim whatever against his principal until he himself pays something by way of satisfaction upon the obligation which is secured. When he does this, there instantly arises infavor of the surety the right to compel the principal to exonerate the surety. But until the surety has contributed something to the payment of the debt, or has performed the secured obligation in whole or in part, he has no right of action against anybodyno claim that could be reduced to judgment.Our conclusion is that the solidary guarantors liability is not extinguished by his death, and that in such event, the Luzon Surety Co., had the right tofile against the estate a contingent claim for reimbursement. Wherefore, the order appealed from is reversed, and the records are ordered remanded to the court of origin.Costs againstthe Administratrix-AppelleeALVAREZ v IAC (YANES)

FACTS- Two parcels of land were registered in the names of the heirs of Aniceto Yanes, under an Original Certificate of Title.- Fortunato D. Santiago was issued a Transfer Certificate of Title. Santiago then sold the lots to Monico B.Fuentebella, Jr. The lots were sold thereafterRosendo Alvarez.- The Yaneses filed a complaint against Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of the ownership and possession of the lots, and prayed for an accounting of the produce of the land from1944 up to the filing of the complaint, and that the share or money equivalent due the heirs be delivered to them, and damages.- During the pendency of the case, Alvarez sold the lots to Dr. Rodolfo Siason.The CFI ordered Alvarez to reconvey and deliver the possession ofthe lots totheYaneses. However, execution of said decision proved unsuccessful withrespect to one of the lots, as it had been subdivided into two and that that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that the lot could not be delivered to the plaintiffs as Siason was"not a party per writof execution."- The Yaneses filed a petition for the issuance of a new certificate of title and for a declaration ofnullity ofthe TCTs issued toRosendo Alvarez.Thecourt required Rodolfo Siason to produce the certificates of title covering the lots, which order was later nullified by the court in viewof a manifestation filed by Siason.- the lower court found Siason as a buyer in good faith, and ordered the heirs ofAlvarez topay theYaneses theactual value of thelots, plus damages. TheIAC affirmed except as to damages.- Petitionerscontend, among others, that the liability arising from the sale of the lots made by Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate,after his death.

ISSUEWON the liability arising from the sale of the lots made by Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his death.

HELD NO.- It overlooks the doctrine obtaining in this jurisdiction on the general transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Under our law, the general rule is that a party's contractual rights and obligations are transmissible to the successors.- The pertinent provisions of theCivil Code state:Art. 774.Succession is a mode of acquisition by virtue of which the property, rights and obligationsto theextent ofthe value ofthe inheritance,ofaperson are transmitted through his death to another or others either by his will or by operation oflaw.Art. 776.The inheritance includes all the property, rights and obligations of a person which are not extinguished by hisdeath.Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property received from the decedent.- Estate of Hemady vs. Luzon Surety Co., Inc.:The binding effect of contracts upon theheirs of the deceased party is not altered by the provision of our Rules of Court thatmoney debts of adeceased must beliquidated and paid fromhis estate before theresidue isdistributedamong said heirs (Rule 89).The reason isthat whateverpayment isthusmadefromthe stateis ultimately apaymentby theheirs ordistributees, since the amount of the paid claim in fact diminishes or reduces theshares that the heirs would havebeen entitled to receive.- The general rule (above) is a consequence of the progressive "depersonalization" ofpatrimonial rights and duties that, as observed by Victorio Polacco, has characterizedthe history of these institutions. From the Roman concept of a relation from person toperson, the obligation has evolved into a relation from patrimony to patrimony withthe persons occupying only a representative position, barring those rare cases wherethe obligation is strictly personal,., is contracted intuitu personae, in considerationof its performance by a specific person and by no other.- Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father's transaction, which gave rise to the present claim fordamages. Thatpetitionersdid notinherit theproperty involved is ofno momentbecause by legal fiction, the monetary equivalent thereof devolved into the mass oftheir father's hereditary estate, andhereditary assets are always liable in their totality forthe payment ofthe debts ofthe estate.It must,however, bemade clear that petitioners are liable only to theextent of the value oftheir inheritance

NHA v. Almeida

Facts:The Land Tenure Administration awarded to Margarita Herrera several portions of land in San Pedro, Laguna. She had two children, Francisca and Beatriz(she died before her mom; mother of PR). When Margarita passed away, Francisca executed a deed of self-adjudication claiming that she was the only remaining relative of Margarita. The deed ofwas based on a 'Sinumpaang Salaysay' allegedly executed by Margarita. The surviving heirs of Beatriz filed a case for annulment of the deed. A decision was rendered and the deed was declared null and void. During the trial, Francisca filed an application with the NHA to purchase the same lots. The NHA granted the application. The PR appealed to the Officeof the President. The NHA reso was affirmed. When Francisca died, her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. The transfer of rights was approved by the NHA. The heirs ofFrancisca directed PR to leave the premisesthat she was occupying. Feeling aggrieved, PR sought the cancellation of the titles issued in favor of the heirs ofFrancisca. She filed a complaint in the RTC of San Pedro, Laguna. She invoked her 40 year occupation of the property and re-raised the fact that Francisca's declaration is a nullity because the other heirs were disregarded. The RTC dismissed the case for lack ofjurisdiction. The CA reversed the decision and remanded the casefor further hearing. The RTC rendered a decision setting aside the resolution of the NHA and the decision ofthe Office of the President. The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It then held that the said document must first be submitted to probate before it can transfer property. The NHA and the heirs ofFrancisca filed their respective motions which were both denied. The CA affirmed the decision of thetrial court.

Issue:WON the decision of NHA isarbitrary.

Ruling:Yes. The NHA gave due course to the application made by Francisca Herrera withoutconsidering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirsin accordance with a will or by operation oflaw. When the original buyer died, the NHA should have considered the estate of the decedentas the next "person" likely to standin to fulfill the obligation to paythe rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed therein null and void should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots

***When the petitioner received theSinumpaang Salaysay, it should have noted that the effectivity of the said document commences at the time of the death of the author of the instrument; in her words "sakaling ako ay bawian ng Diyos ng aking buhay." Hence, in such period, all the interest of the person should cease to be heirs and shall be in the possession of her estate until they are transferred to the heirs by virtue of Article 774 of the Civil Code:

Article 774. Succession is a mode of acquisition by virtue of which the property, rights, and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.

By considering the document, petitioner NHA should have noted that the original applicant has already passed away. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirs, in accordance with a will or by operation of law.

If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties a property already initially paid for by the decendent. Such would be an act contrary to the law on succession and the law on sales and obligations.

Nazareno vs. Court of Appeals

Facts:Petitioners and respondent Romeo Nazareno are three of the five children ofspouses Maximino and Aurea Nazareno, who during their marriage had acquiredproperties. After the death of Maximino, Sr., Romeo filed for intestate proceedingsand he was thereafter appointed administrator of his fathers estate. Romeo discovereda deed of sale selling petitioner Natividad six lots including Lot-3b occupied byRomeo but which was sold to petitioner Maximino, Jr. Maximino, Jr. filed an actionfor recovery of possession which was favored by the court. Romeo in turn filed anannulment of the sales on the ground of lack of consideration in that the transfer wasmerely to avoid inheritance tax and that Natividad was only to hold the said lots intrust for her siblings. Petitioners on the other hand filed a third party complaintagainst Romeo and his wife Eliza seeking the annulment of the transfer to Romeo ofLot 3 which is granted by the trial court except as to Lots 3, 13-b, 13 and 14 whichhad passed on to third persons.Issue:Whether a decision ruling against an administrator of an estate who is acting inhis own interest may bind the estate.Held:The estate of a deceased person is a juridical entity that has a personality of itsown. Though Romeo represented at one time the estate of Maximino, Sr., the latterhas a separate and distinct personality from the former. Hence, the judgment in CA-GR CV No. 12932 regarding theownership of Maximino, Jr. over Lot 3-BbindsRomeo and Eliza only, and not the estate of Maximino, Sr., which also has a right torecover properties which were wrongfully disposed

***Issue:Whether or not the subject properties of the Deeds of Sale are part of the estate of the deceased.

Held:No, the children never acquired ownership because the sale was void for lack of consideration. The sale to a Natividad, one of the children, is deemed in trust for the other children of the deceased. The properties should be collated as part of the estate

Subjects of Succession

Capacity to succeedDetermination

Cayetano v Leonides

GENERALRULE: Limited jurisdiction of theprobate courtEXCEPTION: Where practical considerations demand that the intrinsic validity of the will be passed upon, even before it is probated, the court should meet the issues.

FACTS:

Adoracion C. Campos died, leaving Hermogenes Campos (father) and her sisters, Nenita Paguia, Remedios Lopez, and Marieta Medina as the surviving heirs. As the only compulsory heir is Hermogenes, he executed anAffidavitofAdjudication, adjudicating unto himself the entireestate ofAdoracion.

Later that same year, Nenita filed a petition for reprobate of a will, alleging among others that Adoracion was anAmerican citizenand that the will was executed in teh US. Adoracion died in Manila while temporarily residing in Malate.

While this case was still pending, Hermogenes died and left a will, appointing Polly Cayetano as the executrix. Hence, this case.

ISSUEs:Whether or not the will was validWhether or not the court has jurisdiction overprobateproceedings

HELD:

As ageneralrule, theprobatecourt's authority is limited only to the extrinsic validity of the will, the due execution thereof, the testatrix's testamentary capacity and the compliance with the requisites or solemnities prescribed by law. The intrinsic validity normally comes only after the court hasdeclaredthat the will has been duly authenticated. However, where practical considerations demand that the intrinsic validity of the will be passed upon, even before it is probated, the court should meet the issues.

In this case, it was sufficiently established that Adoracion was anAmerican citizenand the law which governs her will is the law of Pennsylvania, USA, which is thenational lawof the decedent.

It is a settled rule that as regards the intrinsic validity of the provisions of the will, thenational lawof the decedent mustapply.

As to the issue of jurisdiction --

The settlementofestate ofAdoracion Campos was correctly filed with the CFI of Manila where she had an estate since it was alleged and proven that Adoracion at the time of her death was a citizen andpermanent residentof Pennsylvania, USA and not a usual resident of Cavite.

Moreover, petitioner is now estopped from questioning the jurisdiction of theprobate courtin the petition for relief. It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief, against his opponent and after failing to obtain such relief, repudiate or question that same jurisdiction.

Who may succeed

PARISH PRIEST OF VICTORIA V. RIGOR

FACTS:Father Pascual Rigor devised forty-four hectares of ricelands to his nearest male relatives who would study priesthood and provided that the administration of the ricelands would be under the responsibility of the parish priest of Victoria during the time that there is no qualified devisee as contemplated in the will.The parish priest of Victoria petitioned for the delivery of the Riceland to the church since no nearest male relative is available.The lower court, after declaring the bequest inoperative, later reconsidered its findings on the ground that the testator had a grandnephew(born after the testators death), who was a seminarian, and directed the administrator of the estate to deliver the ricelands to the parish priest of Victoria as trustee.RULING:THE Supreme Court ruled that the will referred to the nearest male relative of the testator who was living at the time of his death and not to any indefinite time thereafter, because in order to be capacitated to inherit, the devisee must be living at the moment the succession opens, except in case of representation, when it is proper.

C.WHO ARE INCAPABLE OF SUCCEEDINGArt. 1027. The following are incapable of succeeding:(1) The priest who heard the confession of the testator during his last illness, or the minister of the gospel who extended spiritual aid to him during the same period;(2) The relatives of such priest or minister of the gospel within the fourth degree, the church, order, chapter, community, organization, or institution to which such priest or minister may belong;(3) A guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved, even if the testator should die after the approval thereof; nevertheless, any provision made by the ward in favor of the guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be valid;(4) Any attesting witness to the execution of a will, the spouse, parents, or children, or any one claiming under such witness, spouse, parents, or children;(5) Any physician, surgeon, nurse, health officer or druggist who took care of the testator during his last illness;(6) Individuals, associations and corporations not permitted by law to inherit.(745, 752, 753, 754a)Art. 1028. The prohibitions mentioned in article 739, concerning donations inter vivos shall apply to testamentary provisions.(n)

Art. 1031. A testamentary provision in favor of a disqualified person, even though made under the guise of an onerous contract, or made through an intermediary, shall be void.(755)Art. 1032. The following are incapable of succeeding by reason of unworthiness:(1) Parents who have abandoned their children or induced their daughters to lead a corrupt or immoral life, or attempted against their virtue;(2) Any person who has been convicted of an attempt against the life of the testator, his or her spouse, descendants, or ascendants;(3) Any person who 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;(4) Any heir of full age who, having knowledge of the violent death of the testator, should fail to report it to an officer of the law within a month, unless the authorities have already taken action; this prohibition shall not apply to cases wherein, according to law, there is no obligation to make an accusation;(5) Any person convicted of adultery or concubinage with the spouse of the testator;(6) Any person who by fraud, violence, intimidation, or undue influence should cause the testator to make a will or to change one already made;(7) Any person who by the same means prevents another from making a will, or from revoking one already made, or who supplants, conceals, or alters the latter's will;(8) Any person who falsifies or forges a supposed will of the decedent.(756, 673, 674a)Art. 1033. The cause of unworthiness shall be without effect if the testator had knowledge thereof at the time he made the will, or if, having known of them subsequently, he should condone them in writing.

Object of SuccessionREYESvs.DIMAGIBA

FACTS:, Ismaela Dimagiba, now respondent, submitted to the Court of First Instance a petition for the probate of the purported will of the late Benedicta de los Reyes. The will instituted the petitioner as the sole heir of the estate of the deceased. The petition was set for hearing, and in due time, Dionisio Fernandez, Eusebio Reyes and Luisa Reyes and one month later, Mariano, Cesar, Leonor and Paciencia, all surnamed Reyes, all claiming to be heirs intestate of the decedent, filed oppositions to the probate asked. Grounds advanced for the opposition were forgery, vices of consent of the testatrix, estoppel by laches of the proponent and revocation of the will by two deeds of conveyance of the major portion of the estate made by the testatrix in favor of the proponent in 1943 and 1944, but which conveyances were finally set aside by this Supreme CourtISSUE:(b) whether or not the order of the Court of origin dated July 27, 1959, overruling the estoppel invoked by oppositors-appellants had likewise become final; and (c) whether or not the 1930 will of Benedicta de los Reyes had been impliedly revoked by her execution of deeds of conveyance in favor of the proponentRULING:As to the issue of estoppel, we have already ruled in Guevara vs. Guevara, 98 Phil. 249, that the presentation and probate of a will are requirements of public policy, being primarily designed to protect the testator's, expressed wishes, which are entitled to respect as a consequence of the decedent's ownership and right of disposition within legal limits. Evidence of it is thedutyimposed on a custodian of a will to deliver the same to the Court, and the fine and imprisonment prescribed for its violation (Revised Rule 75). It would be anon sequiturto allow public policy to be evaded on the pretext of estoppel. Whether or not the order overruling the allegation of estoppel is still appealable or not, the defense is patently unmeritorious and the Court of Appeals correctly so ruled.The last issue, that of revocation, is predicated on paragraph 2 of Article 957 of the Civil Code of 1950 (Art. 869 of the Code of 1889), which recites:Art. 957. The legacy or devise shall be without effect:(1) . . . .(2) If the testator by any title or for any cause alienates the thing bequeathed or any part thereof, it being understood that in the latter case the legacy or devise shall be without effect only with respect to the part thus alienated. If after the alienation the thing should again belong to the testator, even if it be by reason of nullity of the contract, the legacy or devise shall not thereafter be valid, unless the reacquisition shall have been effected by virtue of the exercise of the right of repurchase;As observed by the Court of Appeals, the existence of any such change or departure from the original intent of the testatrix, expressed in her 1930 testament, is rendered doubtful by the circumstance that the subsequent alienations in 1943 and 1944 were executed in favor of the legatee herself, appellee Dimagiba. In fact, as found by the Court of Appeals in its decision annulling these conveyances (affirmed in that point by this Supreme Court inReyes vs. Court of Appeals and Dimagiba, L-5618 and L-5620, promulgated on July 31, 1954), "no consideration whatever was paid by respondent Dimagiba" on account of the transfers, thereby rendering it even more doubtful whether in conveying the property to her legatee, the testatrix merely intended to comply in advance with what she had ordained in her testament, rather than an alteration or departure therefrom.1Revocation being an exception, we believe, with the Courts below, that in the circumstances of the particular case, Article 957 of the Civil Code of the Philippines, does not apply to the case at bar.In view of the foregoing considerations, the appealed decision of the Court of Appeals is hereby affirmed. Costs against appellants Reyes and Fernandez.Estate of Hemady v Luzon Surety (inulit)GUINTO VS. MEDINA

FACTS: Leon Guinto filed an action forforcible entry against Santiago Medina. The trial court ruledin favor of Guinto.However, Guinto still appealed because the trial courtdismissed his claim for damages. While thecase was onappeal, Medina died. Medina was substituted by hisheirs.ISSUE: WON the heirs ofMedina are liable fordamages to Guinto in excess of theinheritance they receivedRULING: The heirs of Medina, having beenmerely substituted in his place at the time of his death, their liability fordamages is only to theextent of the value ofthe property they might have received, if any,from him

Guinto vs. Medina, 50 OG # 1, p 199, Oct 7, 1953D. Opening of Succession

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

Balane:1. This article literally means that the "decedent has the right to the succession which istransmitted upon his death." This is illogical bec. the decedent does not have rights to thesuccession. To improve the provision, change the words "succession" to "inheritance" (the rightto succeed is an inchoate right) and the verb "transmitted" to "become vested."2.Four Elements of Succession:1. Death2. Will or Operation of law3. Existence and capacity of the successor4. Acceptance.3. This provision is the heart and soul of succession. The most essential provision of the law onsuccession.4. Rights to succession vest at the moment of death, not transmitted. The right should be madeeffective from the moment of death. This is so bec. the rights to succession before death are mere inchoate. But from the moment of death, those inchoate rights become absolute.Rights to succession are vested from the moment of death, not upon the filing of petitionfor testate/ intestate proceedings, not upon the declaration of heirship or upon settlement of theestate.The rights to succession are automatic. Tradition or delivery is not needed. Fiction ofthe law is that from the moment of the death of the decedent, the right passes to the heirs.During the lifetime of the predecessor, rights to succession are a mere expectancy.Hence, no contract can be legally entered into regarding the expected inheritance. When a heirreceives his inheritance, he is deemed to have received it at the point of death. this is so by legal fiction to avoid confusion.

Nazareno v CA (inulit)

HEIRS OF POLICRONIO M. URETA vs. HEIRS OF LIBERATO M. URETA

Facts:Alfonso was financially well-off during his lifetime. He has 14 children. He owned several fishpens, a fishpond, a sari-sari store, a passenger jeep, and was engaged in the buying and selling of copra. In order to reduce inheritance tax Alfonso made it appear that he sold some of his lands to his children. Accordingly, Alfonso executed four (4) Deeds of Sale covering several parcels of land in favor of Policronio, Liberato, Prudencia, and his common-law wife, Valeriana Dela Cruz. The Deed of Sale executed on October 25, 1969, in favor of Policronio, covered six parcels of land, which are the properties in dispute in this case.

Since the sales were only made for taxation purposes and no monetary consideration was given, Alfonso continued to own, possess and enjoy the lands and their produce.

On April 19, 1989, Alfonso's heirs executed a Deed of Extra-Judicial Partition, which included all the lands that were covered by the four (4) deeds of sale that were previously executed by Alfonso for taxation purposes. Conrado, Policronio's eldest son, representing the Heirs of Policronio, signed the Deed of Extra-Judicial Partition in behalf of his co-heirs.

After their father's death, the Heirs of Policronio found tax declarations in his name covering the six parcels of land. On June 15, 1995, they obtained a copy of the Deed of Sale executed on October 25, 1969 by Alfonso in favor of Policronio.

Believing that the six parcels of land belonged to their late father, and as such, excluded from the Deed of Extra-Judicial Partition, the Heirs of Policronio sought to amicably settle the matter with the Heirs of Alfonso. Earnest efforts proving futile, the Heirs of Policronio filed a Complaint for Declaration of Ownership, Recovery of Possession, Annulment of Documents, Partition, and Damages against the Heirs of Alfonso before the RTC on November 17, 1995

Issue: 1.Whether or not the Deed of Sale was valid; 2. Whether or not the Deed of Extra-Judicial Partition was valid

Ruling:The Deed of Sale was void because it is simulated as the parties did not intend to be legally bound by it. As such, it produced no legal effects and did not alter the juridical situation of the parties. It is only made to avoid tax purposes. The CA also noted that Alfonso continued to exercise all the rights of an owner even after the execution of the Deed of Sale, as it was undisputed that he remained in possession of the subject parcels of land and enjoyed their produce until his death.

Two veritable legal presumptions bear on the validity of the Deed of Sale: (1) that there was sufficient consideration for the contract; and (2) that it was the result of a fair and regular private transaction. If shown to hold, these presumptions infer prima facie the transaction's validity, except that it must yield to the evidence adduced.

2) It has been held in several cases that partition among heirs is not legally deemed a conveyance of real property resulting in change of ownership. It is not a transfer of property from one to the other, but rather, it is a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and receives the inheritance.It is merely a designation and segregation of that part which belongs to each heir. The Deed of Extra-Judicial Partition cannot, therefore, be considered as an act of strict dominion. Hence, a special power of attorney is not necessary.

In fact, as between the parties, even an oral partition by the heirs is valid if no creditors are affected. The requirement of a written memorandum under the statute of frauds does not apply to partitions effected by the heirs where no creditors are involved considering that such transaction is not a conveyance of property resulting in change of ownership but merely a designation and segregation of that part which belongs to each heir.

Opening of SuccessionAcceptance of the inheritance

Uson v. Del RosarioFACTS:Thisisanactionforrecoveryoftheownershipand possession of five (5) parcels of land in Pangasinan, filed by Maria Uson against Maria del Rosario and her four illegitimate children. 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, plaintiffclaims thatwhen Faustino Nebreda died in1945, hiscommon-law wife Maria del Rosario took possession illegally of said lands thus depriving heroftheir possession andenjoyment. Defendants in their answer set up as special defense that Uson and her husband, executed a public document whereby they agreed to separate as husband and wife and, in consideration of which Uson was given a parcel of land and inreturn she renounced herright to inherit any other property that may be left by her husband upon his death. CFI found for Uson. Defendants appealedISSUE:1.W/N Uson has a right over the lands from the moment ofdeath of her husband.2.W/N the illegitimate children ofdeceased andhis common-law wife have successional rights.HELD:1.Yes. There is no dispute that Maria Uson, is the lawful wife ofFaustino Nebreda, former owner ofthe fiveparcels oflands litigated in the present case. There is likewise no dispute that Maria del Rosario, was merely a common-law wife with whom she had four illegitimate children with the deceased. It likewise appears that Faustino Nebreda died in 1945 much prior to the effectivity of thenew Civil Code. With this background, it is evidentthatwhenFaustinoNebreda diedin1945 thefive 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 (Art777 NCC).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". From that moment, therefore,therightsofinheritanceofMariaUsonoverthelandsinquestion became vested.TheclaimofthedefendantsthatMariaUsonhadrelinquished her right over the lands in question because sheexpresslyrenouncedtoinheritanyfuturepropertythatherhusband may acquire and leave upon his death in the deed ofseparation, cannot be entertained for the simple reason that future inheritance cannot be the subject of a contract nor can it be renounced.2.No.Theprovisions oftheNCCshallbe givenretroactive effect even though the event which gave rise to them may have occurred under the prior legislation only if no vested rights are impaired. Hence, since the right of ownership of Maria Uson over the lands in question became vested in 1945 upon the death of her late husband, the new right recognized by the new Civil Code in favor of the illegitimate children of the deceased cannot,therefore, beasserted tothe impairmentof thevested right of Maria Uson over the lands in dispute.

PACIO vs. BILLON Facts:

-a donationpropter nuptiaswas made in a private instrument by Flaviano Pacio in favor of his first wife Severa Jucutan

-That the land continued to be declared in the name of Flaviano Pacio notwithstanding this donationpropter nuptiasuntil 1956 when the same was changed in the name of the defendants Brigida, Manuela and Dominga, all surnamed Pacio;

-That land taxes were paid in the name of Flaviano Pacio

Issue:The plaintiffs-appellants contend that the donation was void, because it was not made in a public instrument.

RULING:

Art. 633 of the Spanish Civil Code states that "In order that a donation of real property be valid it must be made by public instrument in which the property donated must be specifically described and the amount of the encumbrances to be assumed by the donee expressed . . .." .And this Court has held that a donationpropter nuptiasof real property written on a private instrument is not valid even between the parties.1The trial judge said "a donationpropter nuptiasin order to be valid between the donor and the donee, need not be embodied in a public instrument as such formality is only necessary for registration purposes in the Office of the Register of Deeds" so as to bind third persons. He was obviously applying the new principles in the Philippine Civil Code effective in the year 1950.2But in 1901 when the gift was made, the law was contained in the Spanish Civil Code, according to which, even between the parties, the donation must be in a public instrument.It follows that Flaviano Pacio continued to be the owner of the land as the donation had no effect and there was no prescription. Upon his death, the land became the joint property of his children by the first and second marriage. Subject of course to the rights of his surviving spouse, the plaintiff Toribia Fontanilla.Reversing the decision in so far as this parcel is concerned, we hereby order the return of the expediente to the court below for further proceedings on partition in accordance with these views.

ANGELA M. BUTTE vs.MANUEL UY and SONS, INC.,

FACTS:Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot. Thereafter he died. Subsequently, Special Proceeding 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.Thereafter, 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.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

ISSUE: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

RULING: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. 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 heirsAs 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 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.

SALVADOR v. STA. MARIA

FACTS

- In 1941, Celestino Salvador executed a deed ofsale over 7 parcels of titled land and 2 parcels ofuntitled land in favor of thespouses Alfonso Salvador andAnatolia Halili. Alleging that the sale was void for lack ofconsideration,hefiledin1955asuitfor reconveyance of said parcels of land in the CFI. In 1956, Celestino Salvador died, testate. Ashis alleged heirs, 21persons were substitutedasplaintiffsintheactionfor reconveyance.- Meanwhile, special proceedings for the probate ofhis willand forletterstestamentarywas instituted in the CFI of Bulacan, Br. II. Dominador Cardenaswasappointedspecialadministrator. He filed an inventory of properties of the estate covering the same parcels of land subject matter of the reconveyance action. Celestino Salvador's willwasadmittedtoprobateandDominador Cardenas was appointed executor of said will. 23persons were instituted heirs in the will. Of these,9werenotamongthe21allegedrelatives substituted in the reconveyance case; and of the21 substituted alleged heirs, 7 were not instituted in the will.-Br. I(reconveyancecourt) renderedjudgment orderingthe spouses Alfonso andAnatoliato reconveythe parcelsoflandtothe estateofCelestino Salvador. The spouses appealed to the CA. The CA affirmed the reconveyance judgment, with the correction that reconveyance be in favorof the 21 heirs substituted asplaintiffs.- Pursuant to an order of Br. II (probate court) one of the parcels of land, Lot6, was sold so that with its proceeds debtors whofiled claims maybe paid. PNB bought it for P41,184 which was thendeposited in the same bank by the administrator, subject to court order.-In1964,thedefendantsinthesuitfor reconveyance executed a deed of reconveyanceoverthe parcelsoflandinfavorofCelestino Salvador's estate. Revoking the same as not inaccordance with thejudgment, Br. Iordered anew deedofreconveyance tobeexecutedin favor of the 21 persons substituted as plaintiffs in thataction.Accordingly,anewdeedofreconveyance wasmadeand anew TCTwassubsequentlyissuedinthenameofthe21persons.-In1965,Br.IorderedPNBto releasetheP41,184 proceeds of the sale of Lot 6, to the 21plaintiffs inthereconveyancecase. Apparently althoughthepassbookwasgivenbythe administrator to said 21 persons, no release was made, as the PNB awaited Br. II's order.-Meanwhile,in1966,Br.IIapprovedvariousclaimsagainsttheestateamountingtoP33,872.58.Br. IIorderedthe returnofthe passbook to the administrator; and release to the administrator by the PNB of the P41,184 or so much as is needed to pay the debts of the estate. After failing to get reconsideration of the order, the 21substitutedheirs filed this special civil action for certiorari with preliminary injunction.

ISSUEWON the P41,184 proceeds of the sale of Lot 6belong to the estate.

HELDYES.

RatioThe right ofheirs tospecific distributive sharesof inheritance doesnot become finally determinable until all the debts of the estate are paid. Until then, in the face of said claims, theirrightscannotbeenforced,areinchoate,andsubjecttotheexistenceofaresidueafterpayment of the debts.

ReasoningPetitionersdonotquestionthe existence of the debts. They only contend that the propertiesinvolved havingbeen ordered by final judgment reconveyedto them, notto the estate, the same are not properties of the estate but their own, and thus, not liable for debts of the estate.- Such contention is self-refuting. Petitioners rely for their rights on their alleged character as heirs of Celestino; as such, they weresubstituted in there conveyancecase; thereconveyancetothem was reconveyance to them as heirs of Celestino Salvador. It follows that the properties they claimare,evenbytheirownreasoning,partofCelestino'sestate.Their right asallegedly his heirs would arise only if said parcels of land are part ofthe estate ofCelestino, not otherwise.Their having received the same, therefore, in there conveyance action, was perforce in trust for the estate,subjecttoits obligations. Theycannot distribute said properties among themselves as substituted heirs without the debts of the estate being first satisfied.- At any rate, the proceeds of Lot 6 alone appears more than sufficient to pay the debt and there will remain the other parcels of land not sold. As to the question of who will receive how much as heirs, the same is properly determinable by the settlement court, after payment of the debts.DispositionPetition DENIED

HEIRS OF PEDRO REGANON vs. RUFINO IMPERIAL

FACTS:

The heirs of Pedro Reganon filed a complaint for recovery of ownership and possession of about one-hectare portion of a parcel of land with damages, against Rufino Imperial. Defendant not having filed an answer within the reglementary period, the plaintiffs on April 8, 1963 filed a motion to declare the former in default. The courta quoon May 6, 1963, rendered a decision declaring the plaintiffs lawful owners of the land in question and entitled to its peaceful possession and enjoyment; ordering defendant immediately to vacate the portion occupied by him and to restore the peaceful possession thereof to plaintiffs; and sentencing defendant to pay plaintiffs the amount of P1,929.20 and the costs. the plaintiffs filed a motion for issuance of a writ of execution. This was granted by the trial court

ISSUE:the property of an incompetent under guardianship is incustodia legisand therefore can not be attached.

RULING:The new Rules of Court2now specifically provides for the procedure to be followed in case what is attached is incustodia legis.3The clear import of this new provision is that property undercustodia legisis now attachable, subject to the mode set forth in said rule. Besides, the ward having died, the guardianship proceedings no longer subsist: The death of the ward necessarily terminates the guardianship, and thereupon all powers and duties of the guardian cease, except the duty, which remains, to make a proper accounting and settlement in the probate court.4 When Eulogio Imperial died on September 13, 1962, the rights to his succession from the moment of his death were transmitted to his heirs, one of whom is his son and heir, defendant-appellant herein.7This automatic transmission can not but proceed with greater ease and certainty than in this case where the parties agree that the residuary estate is not burdened with any debt. For, The rights to the succession of a person are transmitted from the moment of death, and where, as in this case, the heir is of legal age and the estate is not burdened with any debts, said heir immediately succeeds, by force of law, to the dominion, ownership, and possession of the properties of his predecessor and consequently stands legally in the shoes of the latter.8 That the interest of an heir in the estate of a deceased person may be attached for purposes of execution, even if the estate is in the process of settlement before the courts, is already a settled matter in this jurisdiction.9Besides, as earlier stated, the heirs of Eulogio Imperial, one of whom is appellant, have already executed a Deed of Extrajudicial Partition the end result of which is that the property is no longer the property of the estate but of the individual heirs. And it is settled that: When the heirs by mutual agreement have divided the estate among themselves, one of the heirs can not therefore secure the appointment of an administrator to take charge of and administer the estate or a part thereof.The property is no longer the property of the estate, but of the individual heirs, whether it remains undivided or not.12 WHEREFORE, the orders appealed from are hereby affirmed, with costs against defendant-appellant. So ordered.1wph1.t

RAMIREZ v. BALTAZAR

FACTS: Victoriana Eguaras, single, mortgaged a real estate to spouses Baltazar, defendants in this case. Upon demise of Victoriana, the mortgagees, as creditors of the deceased, filed a petition for the intestate proceedings of Victoriana's estate, alleging further that plaintiffs Felimon and Monica Ramirez are heirs of the deceased. Felimon was later appointed as adminstrator but did not qualify so that Artemio Diawan was appointed as judicial administrator of the estate. The mortgagees then filed a foreclosure of the property in question and succeeded, after Diawan failed to file an answer against the petition. The foreclosure sale ensued, the property was bought by the mortgagees themselves and the sale was confirmed by the court. Felimon sued for the annulment of the entire foreclosure proceedings, alleging among others the failure of the judicial administrator to protect their interests. Defendants contended that plaintiffs have no legal capacity to sue and hava no cause of action.

ISSUE: Have plaintiffs the cause of action against the defendant?

HELD: Yes. There is no question that the rights to succession are automatically transmitted to the heirs from the moment of the death of the decedent. While, as a rule, the formal declaration or recognition to such successional rights needs judicial confirmation, this Court has, under special circumstances, protected these rights from encroachments made or attempted before the judicial declaration. In Pascual vs. Pascual, it was ruled that although heirs have no legal standing in court upon the commencement of testate or intestate proceedings, this rule admits of an exception as "when the administrator fails or refuses to act in which event the heirs may act in his place."

In Ramirez vs Baltazar we ruled that since the ground for the present action to annul the aforesaid foreclosure proceedings is the fraud resulting from such insidious machinations and collusion in which the administrator has allegedly participated, it would be far fetched to expect the said administrator himself to file the action in behalf of the estate. And who else but the heirs, who have an interest to assert and to protect, would bring the action? Inevitably, this case should fall under the exception, rather than the general rule that pending proceedings for the settlement of the estate, the heirs have no right to commence an action arising out of the rights belonging to the deceased.

De Borja v. Vda. DeBorja

Facts:Upon the death of his wife, Josefa Tangco, Francisco de Borja filed a petition for probate of herwill. He was appointed executor and administrator; their son, Jose de Borja, was appointed co-administrator. His son Jose became the sole administrator when he died.While a widower Francisco de Borja his second wife, Tasiana Ongsingco. Upon Francisco's death, Tasiana instituted testate proceedings in the CFI of Nueva Ecija, wherein she was appointed special administratrix.The relationship between the children of the first marriage and Tasiana Ongsingco has been plagued with several court suits and counter-suits.Jose and Tasiana entered into a compromise agreement. When submitted to the court forapproval the Rizal court approved the compromise agreement, but the Nueva Ecija court declared it void and unenforceable. Tasiana appealed the order of approval contending that the compromise agreement is not valid: (1) the heirs cannot enter into such kind of agreement without first probating the will of Francisco de Borja; (2) that the same involves a compromise on the validity of the marriage between Francisco de Borja and Tasiana Ongsingco; and (3) that even if it were valid, it has ceased to have force and effect.Tasiana Ongsingco and the Probate Court of Nueva Ecija rely on this Court's decision inGuevara vs. Guevara, wherein the Court held that the presentation of a will for probate is mandatory and that the settlement and distribution of an estate on the basis of intestacy when the decedent left a will, is against the law and public policy.On the other hand, in claiming the validity of the compromise agreement, Jose de Borja stresses that at the time it was entered into, the governing provision was Section 1, Rule 74 of the original Rules of Court of 1940, which allowed the extrajudicial settlement of the estate of a deceased person regardless of whether he left a will or not.

ISSUE:Whether the compromise agreementis valid, evenif the willof Francisco hasnot yet been probated.

HELD: Yes. Decision appealed from is affirmed.RATIO:The agreement stipulated that Tasiana will receive P800,000 as full payment for her hereditary share in the estate of Francisco and Josefa. This provision evidences beyond doubt that the ruling in the Guevara case is not applicable to the cases at bar. There was here no attempt to settle or distribute the estate of Francisco de Borja among the heirs thereto before the probate ofhis will. The clear object of the contract was merely the conveyance by Tasiana Ongsingco of any and all her individual share and interest, actual or eventual, in the estate of Francisco de Borja and Josefa Tangco. There is no stipulation as to any other claimant, creditor or legatee.And as a hereditary share in a decedent's estate is transmitted or vested immediately from the moment of the death of such causante or predecessor in interest (Civil Code of the Philippines,Art. 777) there is nolegal bar to a successor(with requisitecontracting capacity)disposing of heror his hereditary share immediately after such death, even if the actual extent of such share is not determined until the subsequent liquidation of the estate.Also, as the surviving spouse of Francisco de Borja, Tasiana Ongsingco was his compulsory heir. Therefore determining the validity of the agreement is unnecessary since her successional interest existed independent of Francisco de Borja's last will and testament and would exist even if such will were not probated at all. Thus, the prerequisite of a previous probate of the will, as established in the Guevara and analogous cases, can not apply to the case.

Bonilla v. Barcena

FACTS:On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla, instituted a civil action in the CFI of Abra, to quiet title over certain parcels of land located in Abra.The defendants filed a motion to dismiss the complaint on the ground that Fortunata Barcena is dead and, therefore, has no legal capacity to sue. In the hearing for the motion to dismiss, counsel for the plaintiff confirmed the death of Fortunata Barcena, and asked for substitution by her minor children and her husband; but the court after the hearing immediately dismissed the case on the ground that a dead person cannot be a real party in interest and has no legal personality to sue.ISSUE:W/N the CFI erred in dismissing the complaint.HELD:While it is true that a person who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion.The records of this case show that the death of Fortunata Barcena took place on July 9, 1975 while the complaint was filed on March 31, 1975. This means that when the complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore, the court had acquired jurisdiction over her person.Under Section 16, Rule 3 of the Rules of Courtwhenever a party to a pending case dies it shall be the duty of his attorney to inform the court promptly of such death and to give the name and residence of his executor, administrator, guardian or other legal representatives.This duty was complied with by the counsel for the deceased plaintiff when he manifested before the respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the proper substitution of parties in the case.The respondent Court, however, instead of allowing the substitution, dismissed the complaint on the ground that a dead person has no legal personality to sue.This is a grave error. Article 777 of the Civil Code provides that the rights to the succession are transmitted from the moment of the death of the decedent.From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of their rights thereto except by the methods provided for by law. The moment of death is the determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or contingent. The right of the heirs to the property of the deceased vests in them even before judicial declaration of their being heirs in the testate or intestate proceedings.When Fortunata Barcena, therefore, died, her claim or right to the parcels of land in litigation in Civil Case No. 856, was not extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. There is, therefore, no reason for the respondent Court not to allow their substitution as parties in interest for the deceased plaintiff.The claim of the deceased plaintiff which is an action to quiet title over the parcels of land in litigation affects primarily and principally property and property rights and therefore is one that survives even after her death.It is, therefore, the duty of the respondent Court to order the legal representative of the deceased plaintiff to appear and to be substituted for her. But what the respondent Court did, upon being informed by the counsel for the deceased plaintiff that the latter was dead, was to dismiss the complaint.This should not have been done for under Section 17, Rule 3 of the Rules of Court, it is even the duty of the court, if the legal representative fails to appear, to order the opposing party to procure the appointment of a legal representative of the deceased.Unquestionably, the respondent Court has gravely abused its discretion in not complying with the clear provision of the Rules of Court in dismissing the complaint of the plaintiff in Civil Case No. 856 and refusing the substitution of parties in the case.

GO ONG vs.THE HON. COURT OF APPEALS

FACTS:...: Two (2) parcels of land in Quezon City Identified as Lot No. 12. and Lot No. 1, are covered by Transfer Certificate of Title No. 188705 in the name of "Alfredo Ong Bio Hong married to Julita Go Ong. Alfredo Ong Bio Hong died on January 18, 1975 and Julita Go Ong was appointed administratrix of her husband's estate. Thereafter, Julita Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705 was partially cancelled and TCT No. 262852 was issued in favor of Lim Che Boon. Thereafter, Julita Go Ong through her attorney-in-fact Jovita K. Yeo (Exh. 1) mortgaged Lot No. 1 to the Allied Banking Corporation to secure a loan of P900,000.00 obtained by JK Exports, Inc.. On the loan there was due the sum of P828,000.00 and Allied Banking Corporation tried to collect it from Julita Go Ong, (Exh. E). Hence, the complaint alleging nullity of the contract for lack of judicial approval which the bank had allegedly promised to secure from the court. In response thereto, the bank averred that it was plaintiff Julita Go Ong who promised to secure the court's approval, adding that Julita Go Ong informed the defendant that she was processed the sum of P300,000.00 by the JK Exports, Inc. which will also take charge of the interest of the loan.

ISSUE:WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER PETITIONER'S ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL.

RULING:The instant petition is devoid of merit. the trial court and the Court of Appeals cannot be faulted in ruling that the questioned mortgage constituted on the property under administration, by authority of the petitioner, is valid, notwithstanding the lack of judicial approval, with respect to her conjugal share and to her hereditary rights. The fact that what had been mortgaged was in custodia legis is immaterial, insofar as her conjugal share and hereditary share in the property is concerned for after all, she was the ABSOLUTE OWNER thereof. This ownership by hers is not disputed, nor is there any claim that the rights of the government (with reference to taxes) nor the rights of any heir or anybody else have been prejudiced for impaired. The reference to judicial approval in Sec. 7, Rule 89 of the Rules of Court cannot adversely affect thesubstantiverights of private respondent to dispose of her Ideal [not inchoate, for the conjugal partnership ended with her husband's death, and her hereditary rights accrued from the moment of the death of the decedent (Art. 777, Civil Code) share in the co-heirship and/or co-ownership formed between her and the other heirs/co-owners (See Art. 493, Civil Code, supra.). Sec. 7, Art. 89 of the Civil Code applies in a case where judicial approval has to be sought in connection with, for instance, the sale or mortgage of property under administration for the payment, say of a conjugal debt, and even here, the conjugal and hereditary shares of the wife are excluded from the requisite judicial approval for the reason already adverted to hereinabove, provided of course no prejudice is caused others, including the government.Moreover, petitioner is already estopped from questioning the mortgage. An estoppel may arise from the making of a promise even though without consideration, if it was intended that the promise should be relied upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetration of fraud or would result in other injustice (Gonzalo Sy Trading vs. Central Bank, 70 SCRA 570).PREMISES CONSIDERED, the instant petition is hereby DENIED and the assailed decision of the Court of Appeals is hereby AFFIRMED.

Sandejas v Lina

Doctrine: . In settling the estate of the deceased, a probate court has jurisdiction over matters incidental and collateral to the exercise of its recognized powers. Such matters include selling, mortgaging or otherwise encumbering realty belonging to the estate.

Facts:

On February 17, 1981, Eliodoro Sandejas, Sr. filed a petition in the lower court praying that letters of administration be issued in his favor for the settlement of the estate of his wife, REMEDIOS R. SANDEJAS. Letters of Administration were issued by the lower court appointing Eliodoro as administrator.

On November 19, 1981, the 4th floor of Manila City Hall was burned and among the records burned were the records of the Court where Sandejas filed his petition.

On April 19, 1983, an Omnibus Pleading for motion to intervene and petition-in-intervention was filed by Alex A. Lina alleging that Sandejas, in his capacity as seller, obligated to sell to Lina 4 parcels of land.

Eliodoro died sometime in November 1984 in Canada His counsel is still waiting for official word on the fact of the death of the administrator. He also alleged that the matter of the claim of Alex becomes a money claim to be filed in Eliodoro'sestate.the lower court issued an order directing the other heirs of Sandejas to move for the appointment of a new administrator within 15 days from receipt of the order.

On January 1986, Alex filed a Motion for his appointment as a new administrator of the Intestate Estate of Remedios R. Sandejas on the following reasons: that Alex has not received any motion for the appointment of an administrator in place of Eliodoro; that his appointment would be beneficial to the heirs; that he is willing to give away his being an administrator as long as the heirs has found one.The heirs chose Sixto Sandejas as new administrator. They were reasoning out that it was only at a later date that Sixto accepted the appointment.The lower court substituted Alex Lina with Sixto Sandejas as administrator.

On November 1993, Alex filed an Omnibus Motion to approve the deed of conditional sale executed between Alex A. Lina and Elidioro and to compel the heirs to execute a deed of absolute sale in favor of Alex.The lower court granted Alex's motion.

Overturning the RTC ruling, the CA held that the contract between Eliodoro Sandejas Sr. and respondent was merely a contract to sell, not a perfected contract of sale. It ruled that the ownership of the four lots was to remain in the intestate estate of Remedios until the approval of the sale was obtained from the settlement court.

Issue

What is the settlement court's jurisdiction?

Held:

Court approval is required in any disposition of the decedent's estate per Rule 89 of the Rules of Court. One can sell their rights, interests or participation in the property under administration. A stipulation requiring court approval does not affect the validity and the effectivity of the sale as regards the selling heirs. It merely implies that the property may be taken out of custodia legis, but only with the court's permission.

Section 8 of Rule 89 allows this action to proceed. The factual differences have no bearing on the intestate court's jurisdiction over the approval of the subject conditional sale. Probate jurisdiction covers all matters relating to the settlement of estates (Rules 74 & 86-91) and the probate of wills (Rules 75-77) of deceased persons, including the appointment and the removal of administrators and executors (Rules 78-85). It also extends to matters incidental and collateral to the exercise of a probate court's recognized powers such as selling, mortgaging or otherwise encumbering realty belonging to the estate. Indeed, the rules on this point are intended to settle the estate in a speedy manner, so that the benefits that may flow from such settlement may be immediately enjoyed by the heirs and the beneficiaries.

In the present case, the Motion was meant to settle the decedent's obligation to Alex; hence, that obligation clearly falls under the jurisdiction of the settlement court. To require respondent to file a separate action -- on whether petitioners should convey the title to Eliodoro Sr.'s share of the disputed realty -- will unnecessarily prolong the settlement of the intestate estates of the deceased spouses.

* Re:Intervenor's Standing

Petitioners contend that under said Rule 89, only the executor or administrator is authorized to apply for the approval of a sale of realty under administration. Hence, the settlement court allegedly erred in entertaining and granting respondent's Motion for Approval.

There is no such limitation. Section 8, Rule 89 of the Rules of Court, provides:

"SEC. 8. When court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect of deed. -- Where the deceased was in his lifetime under contract, binding in law, to deed real property, or an interest therein, the court having jurisdiction of the estate may, on application for that purpose, authorize the executor or administrator to convey such property according to such contract, or with such modifications as are agreed upon by the parties and approved by the court; and if the contract is to convey real property to the executor or administrator, the clerk of the court shall execute the deed. "

This provision should be differentiated from Sections 2 and 4 of the same Rule, specifically requiring only the executor or administrator to file the application for authority to sell, mortgage or otherwise encumber real estate for the purpose of paying debts, expenses and legacies (Section 2);or for authority to sell real or personal estate beneficial to the heirs, devisees or legatees and other interested persons, although such authority is not necessary to pay debts, legacies or expenses of administration (Section 4).

Section 8 mentions only an application to authorize the conveyance of realty under a contract that the deceased entered into while still alive. While this Rule does not specify who should file the application, it stands to reason that the proper party must be one .who is to be benefited or injured by the judgment, or one who is to be entitled to the avails of the suit.

Santos vs Lumbao

Facts:

1. Respondent spouses Lumbaofiled an action for reconveyance with damages against petitioners. Petitioners are survivors and legitimate heirs of Rita Santos who allegedly sold 2 parcels of land to respondents when she was alive by virtue of a document called bilihan ng lupa, The repsondents even claimed that the execution of the document was signed and witnessed by petitioners Virgilio and Tadeo.

2. After having acquired the subject property, respondents Spouses Lumbao took actual possession and built a house which they occupied as exclusive owners up to the present. The respondents Spouses Lumbao made several verbal demands upon Rita, during her lifetime, and thereafter upon herein petitioners, to execute the necessary documents to effect the issuance of a separate title in their favor.

3. Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned.

4. Finally, the respondents Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another, executed a Deed of Extrajudicial Settlement,adjudicating and partitioning among themselves and the other heirs, the estate left by Maria, which included the lot already sold to them. Due to refusal of petitioners to convey the said propert, the spouses filed the action.

5. The lower court (RTC) dismissed the complaint of ground of lack of cause of action as the spouses allegedly did not comply with the required barangay conciliation. The CA granted and ordered the petititoners to convey the land to the spouses, hence this petition.

Issue: Whether or not the admissions made are admissible and binding

YES.As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and inflexible rule.

1. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.And in spite of the presence of judicial admissions in a partys pleading, the trial court is still given leeway to consider other evidence presented.However, in the case at bar, petitioners had not adduced any other evidence to override the admission made in their answer that Virgilio and Tadeo actually signed the [Bilihan ng Lupa.Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case.

2. In the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made anadmission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa,"dated 17 August 1979. However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed that he could not remember the same as well as his appearance before the notary public due to the length of time that had passed.

REYES vs. REGIONAL TRIAL COURT OF MAKATI

FACTS:

Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith). Pedro died in 1964, while Anastacia died in 1993. Although Pedros estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacias estate, which included her shareholdings in Zenith. On May 9, 2000, Zenith and Rodrigo filed a complaintwith the Securities and Exchange Commission (SEC) against Oscar.The complaint stated that it is "a derivative suit initiated and filed by the complainant Rodrigo C. Reyesto obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATIONwhich are now or formerly in the control, custody, and/or possession of respondent [herein petitioner Oscar] andto determine the shares of stock of deceased spouses Pedro and Anastacia Reyesthat were arbitrarily and fraudulently appropriated [by Oscar] for himself [and] which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased spouses, for which he should be ordered to account for all the income from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective shares."In his Answer with Counterclaim,6Oscar denied the charge that he illegally acquired the shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from the unissued stocks of Zenith, and that the suit is not abona fidederivative suit because the requisites therefor have not been complied with. He thus questioned the SECs jurisdiction to entertain the complaint because it pertains to the settlement of the estate of Anastacia Reyes.ISSUE:

whether the trial court, sitting as a special commercial court, has jurisdiction over the subject matter of Rodrigos complaint

RULING:Based on these standards, we hold that the allegations of the present complaint do not amount to a derivative suit.First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings originally belonging to Anastacia; he only stands as a transferee-heir whose rights to the share are inchoate and unrecorded. With respect to his own individually-held shareholdings, Rodrigo has not alleged any individual cause or basis as a shareholder on record to proceed against Oscar.Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege with some particularity in his complaint that he has exhausted his remedieswithin the corporationby making a sufficient demand upon the directors or other officers for appropriate relief with the expressed intent to sue if relief is denied.Paragraph 8 of the complaint hardly satisfies this requirement since what the rule contemplates is the exhaustion of remedieswithinthe corporate setting:8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to] and exhausted all legal means of resolving the dispute with the end view of amicably settling the case, but the dispute between them ensued.Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation due to Oscars acts. If indeed he illegally and fraudulently transferred Anastacias shares in his own name, then the damage is not to the corporation but to his co-heirs; the wrongful transfer did not affect the capital stock or the assets of Zenith. As already mentioned, neither has Rodrigo alleged any particular cause or wrongdoing against the corporation that he can champion in his capacity as a shareholder on record.In summary, whether as an individual or as a derivative suit, the RTC sitting as special commercial court has no jurisdiction to hear Rodrigos complaint since what is involved is the determination and distribution of successional rights to the shareholdings of Anastacia Reyes. Rodrigos proper remedy, under the circumstances, is to institute a special proceeding for the settlement of the estate of the deceased Anastacia Reyes, a move that is not foreclosed by the dismissal of his present complaint.WHEREFORE, we herebyGRANTthe petition andREVERSEthe decision of the Court of Appeals. The complaint before the Regional Trial Court, is orderedDISMISSEDfor lack of jurisdiction.

PUNO vs. PUNO ENTERPRISES, INC

FACTS:Upon the death of a stockholder, the heirs do not automatically become stockholders of the corporation; neither are they mandatorily entitled to the rights and privileges of a stockholder.

Carlos L. Puno, who died on June 25, 1963, was an incorporator of respondent Puno Enterprises, Inc. On March 14, 2003, petitioner Joselito Musni Puno, claiming to be an heir of Carlos L. Puno, initiated a complaint for specific performance against respondent. Petitioner averred that he is the son of the deceased with the latters common-law wife, Amelia Puno. As surviving heir, he claimed entitlement to the rights and privileges of his late father as stockholder of respondent. The complaint thus prayed that respondent allow petitioner to inspect its corporate book, render an accounting of all the transactions it entered into from 1962, and give petitioner all the profits, earnings, dividends, or income pertaining to the shares of Carlos L. Puno

ISSUE:

THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT THE JOSELITO PUNO IS ENTITLED TO THE RELIEFS DEMANDED HE BEING THE HEIR OF THE LATE CARLOS PUNO, ONE OF THE INCORPORATORS [OF] RESPONDENT CORPORATION.

RULING:

Petitioner anchors his claim on his being an heir of the deceased stockholder. However, we agree with the appellate court that petitioner was not able to prove satisfactorily his filiation to the deceased stockholder; thus, the former cannot claim to be an heir of the latter.Similarly, only stockholders of record are entitled to receive dividends declared by the corporation, a right inherent in the ownership of the shares.Upon the death of a shareholder, the heirs do not automatically become stockholders of the corporation and acquire the rights and privileges of the deceased as shareholder of the corporation. The stocks must be distributed first to the heirs in estate proceedings, and the transfer of the stocks must be recorded in the books of the corporation. Section 63 of the Corporation Code provides that no transfer shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation. During such interim period, the heirs stand as the equitable owners of the stocks, the executor or administrator duly appointed by the court being vested with the legal title to the stock.Until a settlement and division of the estate is effected, the stocks of the decedent are held by the administrator or executor.Consequently, during such time, it is the administrator or executor who is entitled to exercise the rights of the deceased as stockholder.Thus, even if petitioner presents sufficient evidence in this case to establish that he is the son of Carlos L. Puno, he would still not be allowed to inspect respondents books and be entitled to receive dividends from respondent, absent any showing in its transfer book that some of the shares owned by Carlos L. Puno were transferred to him. This would only be possible if petitioner has been recognized as an heir and has participated in the settlement of the estate of the deceased.Corollary to this is the doctrine that a determination of whether a person, claiming proprietary rights over the estate of a deceased person, is an heir of the deceased must be ventilated in a special proceeding instituted precisely for the purpose of settling the estate of the latter. The status of an illegitimate child who claims to be an heir to a decedents estate cannot be adjudicated in an ordinary civil action, as in a case for the recovery of property.The doctrine applies to the instant case, which is one for specific performance to direct respondent corporation to allow petitioner to exercise rights that pertain only to the deceased and his representatives.WHEREFORE, premises considered, the petition is DENIED.

Cabalu v. Tabu

Contracts; capacity. 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.

Contracts; future inheritance; contractual capacity 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 followingrequisites 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.

Kinds of successionContractual

Blas et al vs Santos et al

1 SCRA 899 Succession Promise

Sometime before 1898, Simeon Blas married Marta Cruz with whom he had three children. He also had grandchildren from his children with Marta Cruz. In 1898, Marta Cruz died. In 1899, Blas married Maxima Santos (they had no children) but the properties he and his former wife acquired during the first marriage were not liquidated.In 1936, Simeon Blas executed a will disposing half of his properties in favor of Maxima the other half for payment of debts, Blas also named a few devisees and legatees therein. In lieu of this, Maxima executed a document whereby she intimated that she understands the will of her husband; that she promises that shell be giving, upon her death, one-half of the properties shell be acquiring to the heirs and legatees named in the will of his husband; that she can select or choose any of them depending upon the respect, service, and treatment accorded to her by said legatees/heirs/devisees.In 1937, Simeon Blas died. In 1956, Maxima died and Rosalina Santos became administratrix of her estate. In the same year, Maria Gervacio Blas, child of Simeon Blas in his first marriage, together with three other grandchildren of Simeon Blas (heirs of Simeon Blas), learned that Maxima did not fulfill her promise as it was learned that Maxima only disposed not even one-tenth of the properties she acquired from Simeon Blas.The heirs are now contending that they did not partition Simeon Blas property precisely because Maxima promised that theyll be receiving properties upon her death.

ISSUE:Whether or not the heirs should receive properties based on the promise of Maxima.

HELD:Yes. The promise is valid and enforceable upon her death. Though it is not a will (it lacks the formality) nor a donation, it is still enforceable because said promise was actually executed to avoid litigation (partition of Simeon Blas estate) hence it is a compromise.It is not disputed that this document was prepared at the instance of Simeon Blas for the reason that the conjugal properties of his first marriage had not been liquidated. It is an obligation or promise made by the maker to transmit one-half of her share in the conjugal properties acquired with her husband, which properties are stated or declared to be conjugal properties in the will of the husband.

BALUS vs. BALUS

Facts:

Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as a security for a loan he obtained from the Rural Bank of Maigo, Lanao del Norte. Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was sold to the bank as the sloe bidder at a public auction held for that purpose. The property was not redeemed within the period allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a Definite Deed of Sale in favor of the Bank. Thereafter, a new title was issued in the name of the Bank.

On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of Estate adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246 square meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to redeem the same at the soonest possible time.

Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land was executed by the Bank in favor of respondents. Subsequently, a TCT was issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.

On June 27, 1995, respondents filed a Complaint for Recovery of Possession and Damages against petitioner, contending that they had already informed petitioner of the fact that they were the new owners of the disputed property, but the petitioner still refused to surrender possession of the same to them.

The RTC held that the right of petitioner to purchase from the respondents his share in the disputed property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had executed b