ART.
728
G.R. No. L-8327 December 14, 1955
ANTONINA CUEVAS, plaintiff-appellant,
vs.
CRISPULO CUEVAS, defendant-appellee.
Pedro D. Maldia for appellant.
Teodoro P. Santiago for appellee.
REYES, J. B. L., J.:
On September 18, 1950, Antonina Cuevas executed a notarized conveyance entitled
"Donacin Mortis Causa," ceding to her nephew Crispulo Cuevas the northern half of a parcel
of unregistered land in barrio Sinasajan, municipality of Penaranda, Province of Nueva Ecija
(Exhibit A). In the same instrument appears the acceptance of Crispulo Cuevas.
"Subsequently, on May 26, 1952, the donor executed another notarial instrument entitled
"Revocacion de Donacion Mortis Causa" (Exhibit B) purporting to set aside the preceding
conveyance; and on August 26, 1952, she brought action in the Court of First Instance to
recover the land conveyed, on the ground (1) that the donation being mortis causa, it had
been lawfully revoked by the donor; and (2) even it if were a donation inter vivos, the same
was invalidated because (a) it was not properly accepted; (b) because the donor did not
reserve sufficient property for her own maintenance, and (c) because the donee was guilty of
ingratitute, for having refused to support the donor.
Issues having been joined, and trial had, the Court of First Instance denied the recovery
sought, and Antonina Cuevas thereupon appealed. The Court of Appeals forwarded the case
to this Court because, the case having been submitted on a stipulation of facts, the appellant
raised only questions of law.
The first issue tendered converns the true nature of the deed "Exhibit A"; whether it
embodies a donation inter vivos, or a disposition of property mortis causa revocable freely by
the transferor at any time before death. 1
It has been rules that neither the designation mortis causa, nor the provision that a donation
is "to take effect at the death of the donor", is a controlling criterion in defining the true
nature of donations (Laureta vs. Mata, 44 Phil., 668; Concepcion vs. Concepcion, 91 Phil.,
823). Hence, the crux of the controversy revolves around the following provisions of the deed
of donation:
Dapat maalaman ni Crispulo Cuevas na samantalang ako ay nabubuhay, and lupa na
ipinagkakaloob ko sa kaniya ay ako pa rin and patuloy na mamomosecion,
makapagparatrabaho, makikinabang at ang iba pang karapatan sa pagmamayari ay
sa akin pa rin hanggang hindo ko binabawian ny buhay ng Maykapal at ito naman ay
hindi ko nga iya-alis pagkat kung ako ay mamatay na ay inilalaan ko sa kaniya.
There is an apparent conflict in the expression above quoted, in that the donor reserves to
herself "the right of possession, cultivation, harvesting and other rights and attributes of
ownership while I am not deprived of life by the Almighty"; but right after, the same donor
states that she "will not takle away" (the property) "because I reserve it for him (the donee)
when I die."
The question to be decided is whetehr the donor intended to part with the title to the
property immediately upon the execution of the deed, or only later, when she had died. If the
first, the donation is operative inter vivos; if the second, we would be confronted with a
disposition mortis causa, void from the beginning because the formalities of testaments were
not observed (new Civil Code, Arts. 728 and 828; heirs of Bonsato vs. Court of Appeals, 250
Off. Gaz. (8), p. 3568; Tuason vs. Posadas, 54 Phil., 289; Sent. Trib. Sup. of Spain, 8 July 1943).
We agree with the Court below that the decisive proof that the present donation is operative
inter vivor lies in the final phrase to the effect that the donor will not dispose or take
away ("hindi ko nga iya-alis" in the original) the land "because I am reserving it to him upon
my death." By these words the donor expressly renounced the right to freely dispose of the
property in favor of another (a right essential to full ownership) and manifested the
irrevocability of the conveyance of the naked title to the property in favor of the donee. As
stated in our decision in Bonsato vs. Court of Appeals, ante, such irrevocability is
characteristic of donations inter vivos, because it is incompatible with the idea of a
disposition post mortem. Witness article 828 of the New Civil Code, that provides:
ART. 828. A will may be revoked by the testator at any time before his death. Any
waiver or restriction of this right is void.
It is apparent from the entire context of the deed of donation that the donor intended that
she should retain the entire beneficial ownership during her lifetime, but that the naked title
should irrevocably pass to the donee. It is only thus that all the expressions heretofore
discussed can be given full effect; and when the donor stated that she would continue to
retain the "possession, cultivation, harvesting and all other rights and attributes of
ownership," she meant only the dominium utile, not the full ownership. As the Court below
correctly observed, the words "rights and attributes of ownership" should be
construed ejusdem generis with the preceding rights of "possession, cultivation and
harvesting" expressly enumerated in the deed. Had the donor meant to retain full or absolute
ownership she had no need to specify possession, cultivation and harvesting, since all these
rights are embodied in full or absolute ownership; nor would she then have excluded the
right of free disposition from the "rights and attributes of ownership" that she reserved for
herself.lawphi1.net
Hence, the Court below rightly concluded that the deed Exhibit A was a valid donation inter
vivos, with reservation of beneficial title during the lifetime of the donor. We may add that it
is highly desirable that all those who are called to prepare or notarize deeds of donation
should call the attention of the donors to the necessity of clearly specifying whether,
notwithstanding the donation, they wish to retain the right to control and dispose at will of
the property before their death, without need of the consent or intervention of the
beneficiary, since the express reservation of such right would be conclusive indication that
the liberality is to exist only at the donor's death, and therefore, the formalities of testaments
should be observed; while, a converso, the express waiver of the right of free disposition
would place the inter vivos character of the donation beyond dispute (Heirs of Bonsato vs.
Court of Appeals, 50 Off. Gaz. (8), p. 3568).

The argument that there was no sufficient acceptance, because the deed "merely recites that
(1) the donee has duly read all the contents of this donation; (2) that he 'shall fully respect all
its terms'; and (3) that 'for the act of benevolence' he is expressing his gratitude" but there is
no show of acceptance (Appellant's brief, p. 7), is without basis. To respect the terms of the
donation, and at the same time express gratitude for the donor's benevolence, constitutes
sufficient acceptance, If the donee did not accept, what had he to be grateful about? We are
no longer under the formulary system of the Roman law, when specific expressions had to be
used under paid of nullity.

Also unmeritoriious is the contention that the donation is void because the donor failed to
reserve enough for ther own support. As we have seen, she expressly reserved to herself all
the benefits derivable from the donated property as long as she lived. During that time, she
suffered no diminution of income. If that was not enough to support her, the deficiency was
not dur to the donation.

Finally, the donee is not rightfully chargeaboe with ingratitude, because it was expressly
stipulated that the donee had a total income of only P30 a month, out of which he had to
support himself, his wife and his two children. Evidently his means did not allow him to add
the donor's support to his own burdens.

Wherefore, the decision appealed from is affirmed. No costs in this instance, appellant having
obtained leave to litigate as a pauper. So ordered.

G.R. No. L-44628 August 27, 1987
CONSUELO SEVILLE JUTIC, JUAN JUTIC, CELESTINO SEVILLE, TIBURCIO SEVILLE, RAVELLO
SEVILLE, SONITA SEVILLE, LUCY SEVILLE, EPIFANIA SEVILLE, NARACY SEVILLE, EMMANUEL
SEVILLE, ORLANDO MANICAN, and PACIFICO MANICAN, petitioners,
vs.
THE COURT OF APPEALS, MANILA, VICENTE SULLAN, TRINIDAD SULLAN, TERESITA SULLAN,
ULYSSES SULLAN, ALEJANDRINO SULLAN, BUENAVENTURA SEVILLE, and ZOILO
SEVILLE, respondents.
GUTIERREZ, JR., J.:
This is a petition to review on appeal by certiorari the decision of the Court of Appeals which
affirmed the decision of the then Court of First Instance of Davao del Norte, Branch 9. The
dispositive portion of the decision reads:
WHEREFORE, the decision appealed from is hereby affirmed and this case
is remanded to the court a quo for implementation of, and compliance
with Rule 69, Revised Rules of Court, and to partition the property in
accordance with the rights as herein determined, defined and declared,
with costs against defendants-appellants. (p. 48, Petitioner's brief)
Vicente Sullan and the other respondents filed a complaint with the then Court of First
Instance at Tagum, Davao del Norte against the petitioners for partition and accounting of the
properties of Arsenio Seville, alleging they are heirs of the decedent.
The petitioners, averred the following in their answer:
xxx xxx xxx
7. That the defendants are the owners of Lots 170 and 172 and
improvements thereon, containing an area of 11.9499 and 9.6862
hectares, respectively, both covered by Original Certificates of Title No. P-
15964 .
8. That defendants are the surviving heirs of Melquiades Seville.
Melquiades Seville in turn is the brother of the deceased Arsenio Seville.
Arsenio Seville died ahead. Melquiades Seville died later. During the
lifetime of Arsenio Seville he executed an instrument ... .
xxx xxx xxx
9. That Melquiades Seville and his family have been in actual possession,
occupation and cultivation of Lots Nos. 170 and 172, Cad-283, since 1954
continuously and peacefully in concept of owner, up to the time of his
death, and had introduced valuable improvements thereon. After his
demise his heirs, the defendants herein, succeeded to the occupation and
possession of the said parcel of land and improvements with the
knowledge of the plaintiffs and with the acquiescence of Arsenio Seville
during his lifetime.
10. That even during the lifetime of the deceased Arsenio Seville it had
been his desire, intention and his wish that Lots 170 and 172 shall be
owned by Melquiades Seville, the father of the herein defendants.
11. That the ownership over the said Lots l7O and l72, Cad-283 and
improvements had been vested, transmitted, conveyed and/or descended
unto the defendants by virtue of Exhibit "1" of this answer and through
continuous possession and cultivation of the land since 1954 continuously
up to the present, in concept of owner as alleged under paragraph "9"
hereof.
12. That by reason of this unfounded action by the plaintiffs, defendants
have been compelled to engage services of counsel for which they bound
themselves to pay P3,000.00 as attomey's fees.
13. That Melquiades Seville during his lifetime had taken legal steps to
perfect titles to these parcels of land in his name." (pp. 11, 14-15, Record
on Appeal).
On September 19, 1972, the trial court rendered judgment in favor of the private
respondents. The petitioners appealed to the Court of Appeals. The Court of Appeals affirmed
the trial court's decision.
Involved in this appeal is the issue of whether or not there was a valid donation from Arsenio
Seville to Melquiades Seville.
The facts of the case are briefly stated as follows —
During his lifetime, Arsenio Seville owned — (1) a parcel of agricultural land described as Lot
No. 170 situated at Anquibit, Asuncion (Saug), Davao del Norte containing an area of 11-9499
hectares, more or less; (2) a parcel of agricultural land described as Lot No. 172 likewise
situated at Anquibit, Asuncion (Saug), Davao del Norte with an area of 9.6862 hectares; (3) a
residential house erected on Lot 172; (4) rice and corn mills and their respective
paraphernalia valued at P5,000.00; and (5) five (5) carabaos in the possession of the then
defendants (pp. 6-9, Petitioners' brief).
On March 4, 1963, Arsenio Seville executed an affidavit in favor of Melquiades Seville, which
reads:
AFFIDAVIT
I, ARSENIO SEVILLE, of legal age, WIDOWER, Filipino, and a resident of
Anquibit, Cambanogoy, Saug, Davao, Philippines, after having been duly
sworn to in accordance with law do hereby depose and say, as follows:
That I am the declared and legal owner of a certain parcel of land
otherwise known as Lot Nos. 172 and 170 Cad- 283, containing an area of
21.6361 has., and situated at Cambanogoy, Saug, Davao and covered by
HA No. V-77791 (E-69793) and approved by the Director of Lands as per
Order issued on March 5, 1954;
That I am a widower as indicated above and that I have no one to inherit
all my properties except my brother Melquiades Seville who appears to
be the only and rightful person upon whom I have the most sympathy
since I have no wife and children;
That it is my desire that in case I will die I will assign all my rights, interest,
share and participation over the above- mentioned property and that he
shall succeed to me in case of my death, however, as long as I am alive I
will be the one to possess, enjoy and benefit from the produce of my said
land and that whatever benefits it will give me in the future I shall be the
one to enjoy it;
That I make this affidavit to make manifest my intention and desire as to
the way the above-mentioned property shall be dispose of and for
whatever purpose it may serve.
xxx xxx xxx
All the above assigned errors discuss the issues as relating to a donation. The trial court was
(SGD.) ARSENIO
correctSEVILLE
Affiant
(p. 7. Appellees' brief; Exh. 4, p. 52, Folder of Exhibits).
On May 24, 1968, Arsenio Seville mortgaged said properties to the Philippine National Bank in
consideration of a loan. This was done with the knowledge and acquiescence of Melquiades
Seville.
On May 15, 1970, Arsenio Seville died intestate, single, without issue, and without any debt.
He was survived by his brothers, Buenaventura Seville and Zoilo Seville who are included as
respondents; brother Melquiades Seville; and sisters Encarnacion Seville and Petra Seville.
Thereafter, Melquiades died and is survived by his children Consuelo, Celestino, Tiburcio,
Ravelo, Sonita, Lucy, Epifania, Naracy and Emmanuel, all surnamed Seville. Sisters
Encarnacion and Petra died later. Encarnacion is survived by her children Trinidad, Teresita,
Ulysses and Alejandrino, all surnamed Sullan and her husband Vicente Sullan while Petra
Seville is survived by her children Orlando Manican and Pacifico Manican.
The children of Melquiades Seville are now claiming exclusive ownership of the properties
and improvements thereon on the basis of the instrument executed by Arsenio Seville in
favor of Melquiades Seville and on their alleged actual possession, occupation, and
cultivation of Lots Nos. 170 and 172 since 1954 continuously and peacefully in the concept of
owner up to the time of Arsenio Seville's death.
The petitioners assign the following alleged errors of the respondent court:
I
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE AFFIDAVIT IN QUESTION A DEED
OR INSTRUMENT OF DONATION INTER VIVOS:
II
THE COURT OF APPEALS ERRED IN NOT RULING CATEGORICALLY THAT ARSENIO SEVILLE
COULD VALIDLY DISPOSE OR DONATE THE PROPERTIES IN QUESTION.
III
THE COURT OF APPEALS ERRED IN NOT VACATING THE JUDGMENT OF THE LOWER COURT
AND ENTERED (SIC) A NEW ONE HOLDING THAT THE AFFIDAVIT IN QUESTION IS A DEED OF
DONATION AND THAT THE DONATION IS A DONATION INTER VIVOS THUS VALIDLY
CONVEYING THE LAND UNTO THE DONEE MELQUIADES SEVILLE. (p. 10, Petitioners' brief).
in stating that "a close reading reveals that Exhibit 4 is not a donation inter
vivos or mortis causa but a mere declaration of an intention and a desire. Certainly, it is not a
concrete and formal act of giving or donating. The form and contents of said Exhibit 4 amply
support this conclusion." (p. 3 7, Record on Appeal).
A discussion of the different kinds of donations and the requisites for their effectivity is
irrelevant in the case at bar. There clearly was no intention to transfer ownership from
Arsenio Seville to Melquiades Seville at the time of the instrument's execution. It was a mere
intention or a desire on the part of Arsenio Seville that in the event of his death at some
future time, his properties should go to Melquiades Seville.
In Aldaba v. Court of Appeals (27 SCRA 263, 269-270) we ruled on a similar expression of an
intention, as follows:
 The question to be resolved in the instant case is: Was there a disposition A-4), which he executed on May 24, 1968 in favor of the Philippine National Bank. The real
of the property in question made by the deceased Belen Aldaba in favor estate mortgage came much later or more than five years after the supposed donation
of herein petitioners? The note, Exhibit 6, considered alone, was, as held (Exhibit 4) to Melquiades Seville where Arsenio Seville allegedly affixed his signature. This fact
by the Court of Appeals, confirming the opinion of the lower court, only was not disputed by the petitioners.
an indication of the intention of Belen Aldaba to donate to the petitioners
the property occupied by the latter. We agree with this conclusion of the Moreover, the petitioners' actions do not support their claim of ownership. During the
trial court and the Court of Appeals. The note, in fact, expressed that the lifetime of Arsenio Seville, he paid the PNB amortization out of his personal funds and out of
property was really intended for the petitioners, "talagang iyan ay para sa the income on his property. The payments were not continued by the petitioners when
inyo." If the property was only intended for petitioners then, at the time Arsenio Seville died so much so that the property was extrajudicially foreclosed and had to be
of its writing, the property had not yet been disposed of in their favor. repurchased by Zoilo Seville, one of the respondents, through installment arrangements.
There is no evidence in the record that such intention was effectively (Deed of Promise to Sell appended as Annex 4 to respondents' brief). The actions of the
carried out after the writing of the note. Inasmuch as the mere expression respondents are in consonance with their claim of co-ownership.
of an intention is not a promise, because a promise is an undertaking to
carry the intention into effect, (17 American Jurisprudence, 2d p. 334) We
Finally, it is a well-established rule that the factual findings of the trial court are generally not
cannot, considering Exhibit 6 alone, conclude that the deceased
disturbed except where there is a clear cause or a strong reason appearing in the record to
promised, much less did convey, the property in question to the
warrant a departure from such findings (Alcaraz v. Racimo, 125 SCRA 328; People v. Tala, 141
petitioners. ... .
SCRA 240; and People v. Alcid, 135 SCRA 280). There is no such clear cause or strong reason in
this case.
It is quite apparent that Arsenio Seville was thinking of succession ("... in case I win die, I will
assign all my rights, share and participation over the above-mentioned properties and that he
WHEREFORE, the petition is hereby DISMISSED. The judgment of the Court of Appeals is
shall succeed to me in case of my death ..."). Donations which are to take effect upon the
AFFIRMED.
death of the donor partake of the nature of testamentary provisions and shall be governed by
the rules established in the title on succession (Art. 728, Civil Code).
SO ORDERED.
The petitioners likewise contend that the document was a valid donation as only donations
are accepted by the donees. However, the petitioners could not have accepted something,
which by the terms of the supposed "donation" was not given to them at the time. The
affidavit could not transmit ownership except in clear and express terms.

Furthermore, the homestead application was later prosecuted in the name of Arsenio Seville
and the land, much later, was mortgaged by him to the Philippine National Bank (Annex 1, p.
100, Rollo) in consideration of a loan. Arsenio dealt with the land and entered into
transactions as its owner. All these happened with the knowledge and acquiescence of the
supposed donee, Melquiades Seville. Contrary to the petitioners' allegations in their brief,
there was no immediate transfer of title upon the execution of Exhibit 4.

Contrary to what the petitioners aver, private respondents as legal heirs of Arsenio Seville
have actual and substantial interests in the subject of litigation thus qualifying them as real
parties-in-interest.

Common ownership is shown by the records. Therefore, any claim of ownership of the
petitioners is not based on Exhibit 4 but on the fact that they are heirs of Arsenio Seville
together with the private respondents.

It is likewise significant to note the respondents' assertion that the signed affidavit is a forgery
because Arsenio Seville was illiterate during his lifetime. He could not write his name. He
executed documents by affixing his thumbmark as shown in the Real Estate Mortgage (Exhibit

G.R. No. 131953 June 5, 2002
MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S. CABATINGAN, petitioners,
vs.
THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA, PERLA M. ABELLA,
ESTRELLA M. CAÑETE, LOURDES M. YUSON, and JULIA L. MAYOL, HEIRS OF GENOVIVA C.
NATIVIDAD namely, OSCAR C. NATIVIDAD, OLGA NATIVIDAD, ODETTE NATIVIDAD, OPHELIA
NATIVIDAD, RICHARD NATIVIDAD, RAYMUND NATIVIDAD, RICHIE NATIVIDAD, SONIA
NATIVIDAD and ENCARNACION CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN
and JESUSA C. NAVADA, respondents.
AUSTRIA-MARTINEZ, J.:
Posed for resolution before the Court in this petition for review on certiorari filed under Rule
45 of the Rules of Court is the sole issue of whether the donations made by the late Conchita
Cabatingan are donations inter vivos or mortis causa.
The facts of the case are as follows:
On February 17, 1992, Conchita Cabatingan executed in favor of her brother, petitioner
Nicolas Cabatingan, a "Deed of Conditional of Donation (sic) Inter Vivos for House and Lot"
covering one-half (½) portion of the former's house and lot located at Cot-cot, Liloan,
Cebu.1 Four (4) other deeds of donation were subsequently executed by Conchita Cabatingan
on January 14, 1995, bestowing upon: (a) petitioner Estela C. Maglasang, two (2) parcels of
land - one located in Cogon, Cebu (307 sq. m.) and the other, a portion of a parcel of land in
Masbate (50,232 sq. m.); (b) petitioner Nicolas Cabatingan, a portion of a parcel of land
located in Masbate (80,000 sq. m.); and (c) petitioner Merly S. Cabatingan, a portion of the
Masbate property (80,000 sq. m.).2 These deeds of donation contain similar provisions, to wit:
"That for and in consideration of the love and affection of the DONOR for the
DONEE, x x x the DONOR does hereby, by these presents, transfer, convey, by way of
donation, unto the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become effective upon the
death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE
should die before the DONOR, the present donation shall be deemed
automatically rescinded and of no further force and effect; x x x"3 (Emphasis Ours)
On May 9, 1995, Conchita Cabatingan died.
Upon learning of the existence of the foregoing donations, respondents filed with the
Regional Trial Court of Mandaue, Branch 55, an action for Annulment And/Or Declaration of
Nullity of Deeds of Donations and Accounting, docketed as Civil Case No. MAN-2599, seeking
the annulment of said four (4) deeds of donation executed on January 14, 1995. Respondents
allege, inter alia, that petitioners, through their sinister machinations and strategies and
taking advantage of Conchita Cabatingan's fragile condition, caused the execution of the
deeds of donation, and, that the documents are void for failing to comply with the provisions
of the Civil Code regarding formalities of wills and testaments, considering that these are
donations mortis causa.4 Respondents prayed that a receiver be appointed in order to
preserve the disputed properties, and, that they be declared as co-owners of the properties
in equal shares, together with petitioner Nicolas Cabatingan. 5
Petitioners in their Amended Answer, deny respondents' allegations contending that Conchita
Cabatingan freely, knowingly and voluntarily caused the preparation of the instruments. 6
On respondents' motion, the court a quo rendered a partial judgment on the pleadings on
December 2, 1997 in favor of respondents, with the following dispositive portion:
"WHEREREFORE, and in consideration of all the foregoing, judgment is hereby
rendered in favor of the plaintiffs and against the defendant and unwilling co-
plaintiff with regards (sic) to the four Deeds of Donation Annexes "A", "A-1", "B"
and Annex "C" which is the subject of this partial decision by:
Declaring the four Deeds of Donation as null and void ab initio for being a
donation Mortis Causa and for failure to comply with formal and solemn
requisite under Art. 806 of the New Civil Code;
b) To declare the plaintiffs and defendants as well as unwilling co-plaintiff
as the heirs of the deceased Conchita Cabatingan and therefore
hereditary co-owners of the properties subject of this partial decision, as
mandated under Art. 777 of the New Civil Code;
SO ORDERED."7
The court a quo ruled that the donations are donations mortis causa and therefore the four
(4) deeds in question executed on January 14, 1995 are null and void for failure to comply
with the requisites of Article 806 of the Civil Code on solemnities of wills and testaments. 8
Raising questions of law, petitioners elevated the court a quo's decision to this
Court,9 alleging that:
"THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-WELL-ESTABLISHED
RULINGS OF THIS HONORABLE SUPREME COURT ON THE CHARACTERIZATION OF
DONATIONS AS INTER VIVOSOR MORTIS CAUSA AND, INSTEAD, PROCEEDED TO
INTERPRET THE DONATIONS IN QUESTION IN A MANNER CONTRARY THERETO." 10
Petitioners insist that the donations are inter vivos donations as these were made by the late
Conchita Cabatingan "in consideration of the love and affection of the donor" for the donee,
and there is nothing in the deeds which indicate that the donations were made in
consideration of Cabatingan's death.11 In addition, petitioners contend that the stipulation on
rescission in case petitioners die ahead of Cabatingan is a resolutory condition that confirms
the nature of the donation as inter vivos.
Petitioners' arguments are bereft of merit.
In a donation mortis causa, "the right of disposition is not transferred to the donee while the
donor is still alive."12 In determining whether a donation is one of mortis causa, the following
characteristics must be taken into account:
(1) It conveys no title or ownership to the transferee before the death of the
transferor; or what amounts to the same thing, that the transferor should retain the
ownership (full or naked) and control of the property while alive;
(2) That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed;
and
(3) That the transfer should be void if the transferor should survive the transferee. 13
In the present case, the nature of the donations as mortis causa is confirmed by the fact that
the donations do not contain any clear provision that intends to pass proprietary rights to
petitioners prior to Cabatingan's death.14 The phrase "to become effective upon the death of
the DONOR" admits of no other interpretation but that Cabatingan did not intend to transfer
the ownership of the properties to petitioners during her lifetime. Petitioners themselves
expressly confirmed the donations as mortis causa in the following Acceptance and
Attestation clauses, uniformly found in the subject deeds of donation, to wit:
"That the DONEE does hereby accept the foregoing donation mortis causa under
the terms and conditions set forth therein, and avail herself of this occasion to
express her profound gratitude for the kindness and generosity of the DONOR."
xxx
"SIGNED by the above-named DONOR and DONEE at the foot of this Deed of
Donation mortis causa, which consists of two (2) pages x x x."15
That the donations were made "in consideration of the love and affection of the donor" does
not qualify the donations as inter vivos because transfers mortis causa may also be made for
the same reason. 16
Well in point is National Treasurer of the Phils. v. Vda. de Meimban.17 In said case, the
questioned donation contained the provision:
"That for and in consideration of the love and affection which the DONOR has for
the DONEE, the said Donor by these presents does hereby give, transfer, and convey
unto the DONEE, her heirs and assigns a portion of ONE HUNDRED THOUSAND
(100,000) SQUARE METERS, on the southeastern part Pro-indiviso of the above
described property. (The portion herein donated is within Lot 2-B of the proposed
amendment Plan Subdivision of Lots Nos. 1 and 2, Psu-109393), with all the
buildings and improvements thereon, to become effective upon the death of the
DONOR. (italics supplied.)"18
Notably, the foregoing provision is similar to that contained in the donation executed by
Cabatingan. We held in Meimban case that the donation is a mortis causa donation, and that
the above quoted provision establishes the donor's intention to transfer the ownership and
possession of the donated property to the donee only after the former's death. Further:
"As the donation is in the nature of a mortis causa disposition, the formalities of a
will should have been complied with under Article 728 of the Civil Code, otherwise,
the donation is void and would produce no effect. As we have held in Alejandro v.
Geraldez (78 SCRA 245,253), "If the donation is made in contemplation of the
donor's death, meaning that the full or naked ownership of the donated properties
will pass to the donee because of the donor's death, then it is at that time that the
donation takes effect, and it is a donation mortis causa which should be embodied
in a last will and testament. (Citing Bonsato v. Court of Appeals, 95 Phil. 481)." 19
We apply the above rulings to the present case. The herein subject deeds expressly provide
that the donation shall be rescinded in case petitioners predecease Conchita Cabatingan. As
stated in Reyes v. Mosqueda,20 one of the decisive characteristics of a donation mortis
causa is that the transfer should be considered void if the donor should survive the donee.
This is exactly what Cabatingan provided for in her donations. If she really intended that the
donation should take effect during her lifetime and that the ownership of the properties
donated be transferred to the donee or independently of, and not by reason of her death, she
would have not expressed such proviso in the subject deeds.1âwphi1.nêt
Considering that the disputed donations are donations mortis causa, the same partake of the
nature of testamentary provisions21 and as such, said deeds must be executed in accordance
with the requisites on solemnities of wills and testaments under Articles 805 and 806 of the
Civil Code, to wit:
"ART. 805. Every will, other than a holographic will, must be subscribed at the end
thereof by the testator himself or by the testator's name written by some other
person in his presence, and by his express direction, and attested and subscribed by
three or more credible witnesses in the presence of the testator and of one
another.
The testator or the person requested by him to write his name and the instrumental
witnesses of the will, shall also sign, as aforesaid, each and every page thereof,
except the last, on the left margin, and all the pages shall be numbered correlatively
in letters placed on the upper part of each page.
 The attestation shall state the number of pages used upon which the will is written ,
and the fact that the testator signed the will and every page thereof, or caused
some other person to write his name, under his express direction, in the presence
of the instrumental witnesses, and that the latter witnessed and signed the will and
all the pages thereof in the presence of the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall be

interpreted to them. (n)

ART. 806. Every will must be acknowledged before a notary public by the testator
and the witnesses. The notary public shall not be required to retain a copy of the
will, or file another with the office of the Clerk of Court. (n)"

The deeds in question although acknowledged before a notary public of the donor and the
donee, the documents were not executed in the manner provided for under the above-
quoted provisions of law.

Thus, the trial court did not commit any reversible error in declaring the subject deeds of
donation null and void.

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

G.R. No. 123968 April 24, 2003
URSULINA GANUELAS, METODIO GANUELAS and ANTONIO GANUELAS, petitioners,
vs.
HON. ROBERT T. CAWED, Judge of the Regional Trial Court of San Fernando, La Union
(Branch 29), LEOCADIA G. FLORES, FELICITACION G. AGTARAP, CORAZON G. SIPALAY and
ESTATE OF ROMANA GANUELAS DE LA ROSA, represented by GREGORIO DELA ROSA,
Administrator, respondents.
CARPIO MORALES, J.:
The present petition for review under Rule 45 of the Rules of Court assails, on a question of
law, the February 22, 1996 decision 1 of the Regional Trial Court of San Fernando, La Union,
Branch 29, in Civil Case No. 3947, an action for declaration of nullity of a deed of donation.
The facts, as culled from the records of the case, are as follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed of Donation
of Real Property 2 covering seven parcels of land in favor of her niece Ursulina Ganuelas
(Ursulina), one of herein petitioners.
The pertinent provision of the deed of donation reads, quoted verbatim:
xxx xxx xxx
That, for and in consideration of the love and affection which the DONOR has for
the DONEE, and of the faithful services the latter has rendered in the past to the
former, the said DONOR does by these presents transfer and convey, by way of
DONATION, unto the DONEE the property above, described, to become effective
upon the death of the DONOR; but in the event that the DONEE should die before
the DONOR, the present donation shall be deemed rescinded and of no further
force and effect.
xxx xxx xxx.3
On June 10, 1967, Celestina executed a document denominated as Revocation of
Donation4 purporting to set aside the deed of donation. More than a month later or on
August 18, 1967, Celestina died without issue and any surviving ascendants and siblings.
After Celestina's death, Ursulina had been sharing the produce of the donated properties
with private respondents Leocadia G. Flores, et al., nieces of Celestina.
In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina secured
the corresponding tax declarations, in her name, over the donated properties, to wit: Tax
Declarations Nos. 18108, 18109, 18110, 18111, 18112, 18113 and 18114, and since then, she
refused to give private respondents any share in the produce of the properties despite
repeated demands.
Private respondents were thus prompted to file on May 26, 1986 with the RTC of San
Fernando, La Union a complaint5 against Ursulina, along with Metodio Ganuelas and Antonio
Ganuelas who were alleged to be unwilling plaintiffs. The complaint alleged that the Deed of
Donation executed by Celestina in favor of Ursulina was void for lack of acknowledgment by
the attesting witnesses thereto before notary public Atty. Henry Valmonte, and the donation
was a disposition mortis causa which failed to comply with the provisions of the Civil Code
regarding formalities of wills and testaments, hence, it was void. The plaintiffs-herein private
respondents thus prayed that judgment be rendered ordering Ursulina to return to them as
intestate heirs the possession and ownership of the properties. They likewise prayed for the
cancellation of the tax declarations secured in the name of Ursulina, the partition of the
properties among the intestate heirs of Celestina, and the rendering by Ursulina of an
accounting of all the fruits of the properties since 1982 and for her to return or pay the value
of their shares.
The defendants-herein petitioners alleged in their Answer 6 that the donation in favor of
Ursulina was inter vivos as contemplated under Article 729 of the Civil Code, 7 hence, the deed
did not have to comply with the requirements for the execution of a valid will; the Revocation
of Donation is null and void as the ground mentioned therein is not among those provided by
law to be the basis thereof; and at any rate, the revocation could only be legally enforced
upon filing of the appropriate complaint in court within the prescriptive period provided by
law, which period had, at the time the complaint was filed, already lapsed.
By Decision of February 22, 1996, the trial court, holding that the provision in the Deed of
Donation that in the event that the DONEE should predecease the DONOR, the "donation
shall be deemed rescinded and of no further force and effect" is an explicit indication that the
deed is a donation mortis causa,8 found for the plaintiffs-herein private respondents, thus:
WHEREFORE the Court renders judgment declaring null and void the Deed of
Donation of Real Property executed by Celestina Ganuelas, and orders the partition
of the estate of Celestina among the intestate heirs.
SO ORDERED.9
The trial court also held that the absence of a reservation clause in the deed implied that
Celestina retained complete dominion over her properties, thus supporting the conclusion
that the donation is mortis causa,10 and that while the deed contained an attestation clause
and an acknowledgment showing the intent of the donor to effect a postmortem disposition,
the acknowledgment was defective as only the donor and donee appear to have
acknowledged the deed before the notary public, thereby rendering the entire document
void.11
Lastly, the trial court held that the subsequent execution by Celestina of the Revocation of
Donation showed that the donor intended the revocability of the donation ad nutum, thus
sustaining its finding that the conveyance was mortis causa.12
On herein petitioners' argument that the Revocation of Donation was void as the ground
mentioned therein is not one of those allowed by law to be a basis for revocation, the trial
court held that the legal grounds for such revocation as provided under the Civil Code arise
only in cases of donations inter vivos, but not in donations mortis causa which are revocable
at will during the lifetime of the donor. The trial court held, in any event, that given the nullity
of the disposition mortis causa in view of a failure to comply with the formalities required
therefor, the Deed of Revocation was a superfluity.13
Hence, the instant petition for review, petitioners contending that the trial court erred:
I. . . . WHEN IT DECLARED NULL AND VOID THE DONATION EXECUTED BY CELESTINA
GANUELAS;
II. . . . WHEN IT UPHELD THE REVOCATION OF DONATION;
III. . . . IN RENDERING ITS DECISION ADVERSE TO PETITIONER URSULINA
GANUELAS.14
Petitioners argue that the donation contained in the deed is inter vivos as the main
consideration for its execution was the donor's affection for the donee rather than the
donor's death;15 that the provision on the effectivity of the donation — after the donor's
death — simply meant that absolute ownership would pertain to the donee on the donor's
death;16 and that since the donation is inter vivos, it may be revoked only for the reasons
provided in Articles 760,17 76418 and 76519 of the Civil Code.
In a letter of March 16, 1998,20 private respondent Corazon Sipalay, reacting to this Court's
January 28, 1998 Resolution requiring private respondents "to SHOW CAUSE why they should
not be disciplinarily dealt with or held in contempt" for failure to submit the name and
address of their new counsel, explains that they are no longer interested in pursuing the case
and are "willing and ready to waive whatever rights" they have over the properties subject of
the donation. Petitioners, who were required to comment on the letter, by Comment of
October 28, 1998,21 welcome private respondents' gesture but pray that "for the sake of
enriching jurisprudence, their [p]etition be given due course and resolved."
The issue is thus whether the donation is inter vivos or mortis causa.
Crucial in the resolution of the issue is the determination of whether the donor intended to
transfer the ownership over the properties upon the execution of the deed. 22
Donation inter vivos differs from donation mortis causa in that in the former, the act is
immediately operative even if the actual execution may be deferred until the death of the
donor, while in the latter, nothing is conveyed to or acquired by the donee until the death of
the donor-testator. 23 The following ruling of this Court in Alejandro v. Geraldez is
illuminating:24
If the donation is made in contemplation of the donor's death, meaning that the full
or naked ownership of the donated properties will pass to the donee only because
of the donor's death, then it is at that time that the donation takes effect, and it is a
donation mortis causa which should be embodied in a last will and testament.
But if the donation takes effect during the donor's lifetime or independently of the
donor's death, meaning that the full or naked ownership (nuda proprietas) of the
donated properties passes to the donee during the donor's lifetime, not by reason
of his death but because of the deed of donation, then the donation is inter vivos.
The distinction between a transfer inter vivos and mortis causa is important as the validity or
revocation of the donation depends upon its nature. If the donation is inter vivos, it must be
executed and accepted with the formalities prescribed by Articles 748 25 and 74926 of the Civil
Code, except when it is onerous in which case the rules on contracts will apply. If it is mortis
causa, the donation must be in the form of a will, with all the formalities for the validity of
wills, otherwise it is void and cannot transfer ownership. 27
The distinguishing characteristics of a donation mortis causa are the following:
1. It conveys no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
2. That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed;
3. That the transfer should be void if the transferor should survive the transferee. 28
In the donation subject of the present case, there is nothing therein which indicates that any
right, title or interest in the donated properties was to be transferred to Ursulina prior to the
death of Celestina.
The phrase "to become effective upon the death of the DONOR" admits of no other
interpretation but that Celestina intended to transfer the ownership of the properties to
Ursulina on her death, not during her lifetime. 29
More importantly, the provision in the deed stating that if the donee should die before the
donor, the donation shall be deemed rescinded and of no further force and effect shows that
the donation is a postmortem disposition.
As stated in a long line of cases, one of the decisive characteristics of a donation mortis
causa is that the transfer should be considered void if the donor should survive the donee. 30
More. The deed contains an attestation clause expressly confirming the donation as mortis WHEREFORE, the petition is hereby DENIED for lack of merit.
causa:
SO ORDERED.
SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed of
donation mortis causa, consisting of two (2) pages and on the left margin of each
and every page thereof in the joint presence of all of us who at her request and in
her presence and that of each other have in like manner subscribed our names as
witnesses.31 (Emphasis supplied)

To classify the donation as inter vivos simply because it is founded on considerations of love
and affection is erroneous. That the donation was prompted by the affection of the donor for
the donee and the services rendered by the latter is of no particular significance in
determining whether the deed constitutes a transfer inter vivos or not, because a legacy may
have an identical motivation.32 In other words, love and affection may also underline
transfers mortis causa.33

In Maglasang v. Heirs of Cabatingan,34 the deeds of donation contained provisions almost

identical to those found in the deed subject of the present case:

That for and in consideration of the love and affection of the DONOR for the
DONEE, x x x. the DONOR does hereby, by these presents, transfer, convey, by way
of donation, unto the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become effective upon the
death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE
should die before the DONOR, the present donation shall be deemed automatically
rescinded and of no further force and effect. (Emphasis supplied)

In that case, this Court held that the donations were mortis causa, for the above-quoted
provision conclusively establishes the donor's intention to transfer the ownership and
possession of the donated property to the donee only after the former's death. Like in the
present case, the deeds therein did not contain any clear provision that purports to pass
proprietary rights to the donee prior to the donor's death.

As the subject deed then is in the nature of a mortis causa disposition, the formalities of a will
under Article 728 of the Civil Code should have been complied with, failing which the
donation is void and produces no effect.35

As noted by the trial court, the attesting witnesses failed to acknowledge the deed before the
notary public, thus violating Article 806 of the Civil Code which provides:

Art. 806. Every will must be acknowledged before a notary public by the
testator and the witnesses. The notary public shall not be required to retain a copy
of the will, or file another with the office of the Clerk of Court. (Emphasis supplied)

The trial court did not thus commit any reversible error in declaring the Deed of Donation to
be mortis causa.

G.R. No. 187056 September 20, 2010
JARABINI G. DEL ROSARIO, Petitioner,
vs.
ASUNCION G. FERRER, substituted by her heirs, VICENTE, PILAR, ANGELITO, FELIXBERTO,
JR., all surnamed G. FERRER, and MIGUELA FERRER ALTEZA, Respondents.
DECISION
ABAD, J.:
This case pertains to a gift, otherwise denominated as a donation mortis causa, which in
reality is a donation inter vivos made effective upon its execution by the donors and
acceptance thereof by the donees, and immediately transmitting ownership of the donated
property to the latter, thus precluding a subsequent assignment thereof by one of the donors.
The Facts and the Case
On August 27, 1968 the spouses Leopoldo and Guadalupe Gonzales executed a document
entitled "Donation Mortis Causa"1 in favor of their two children, Asuncion and Emiliano, and
their granddaughter, Jarabini (daughter of their predeceased son, Zoilo) covering the spouses’
126-square meter lot and the house on it in Pandacan, Manila 2in equal shares. The deed of
donation reads:
It is our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the
surviving spouse.
It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales will continue to occupy
the portions now occupied by them.
It is further our will that this DONATION MORTIS CAUSA shall not in any way affect any other
distribution of other properties belonging to any of us donors whether testate or intestate
and where ever situated.
It is our further will that any one surviving spouse reserves the right, ownership, possession
and administration of this property herein donated and accepted and this Disposition and
Donation shall be operative and effective upon the death of the DONORS. 3
Although denominated as a donation mortis causa, which in law is the equivalent of a will,
the deed had no attestation clause and was witnessed by only two persons. The named
donees, however, signified their acceptance of the donation on the face of the document.
Guadalupe, the donor wife, died in September 1968. A few months later or on December 19,
1968, Leopoldo, the donor husband, executed a deed of assignment of his rights and interests
in subject property to their daughter Asuncion. Leopoldo died in June 1972.
In 1998 Jarabini filed a "petition for the probate of the August 27, 1968 deed of
donation mortis causa" before the Regional Trial Court (RTC) of Manila in Sp. Proc. 98-
90589.4 Asuncion opposed the petition, invoking his father Leopoldo’s assignment of his
rights and interests in the property to her.
After trial, the RTC rendered a decision dated June 20, 2003,5 finding that the donation was in
fact one made inter vivos, the donors’ intention being to transfer title over the property to
the donees during the donors’ lifetime, given its irrevocability. Consequently, said the RTC,
Leopoldo’s subsequent assignment of his rights and interest in the property was void since he
had nothing to assign. The RTC thus directed the registration of the property in the name of
the donees in equal shares.6
On Asuncion’s appeal to the Court of Appeals (CA), the latter rendered a decision on
December 23, 2008,7reversing that of the RTC. The CA held that Jarabini cannot, through her
petition for the probate of the deed of donation mortis causa, collaterally attack Leopoldo’s
deed of assignment in Asuncion’s favor. The CA further held that, since no proceeding exists
for the allowance of what Jarabini claimed was actually a donation inter vivos, the RTC erred
in deciding the case the way it did. Finally, the CA held that the donation, being one
given mortis causa, did not comply with the requirements of a notarial will, 8 rendering the
same void. Following the CA’s denial of Jarabini’s motion for reconsideration, 9 she filed the
present petition with this Court.
Issue Presented
The key issue in this case is whether or not the spouses Leopoldo and Guadalupe’s donation
to Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it was denominated, or in
fact a donation inter vivos.
The Court’s Ruling
That the document in question in this case was captioned "Donation Mortis Causa" is not
controlling. This Court has held that, if a donation by its terms is inter vivos, this character is
not altered by the fact that the donor styles it mortis causa.10
In Austria-Magat v. Court of Appeals,11 the Court held that "irrevocability" is a quality
absolutely incompatible with the idea of conveyances mortis causa, where "revocability" is
precisely the essence of the act. A donation mortis causa has the following characteristics:
1. It conveys no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
 2. That before his death, the transfer should be revocable by the transferor at the deed of assignment squarely in issue, Asuncion or those who substituted her may not
will, ad nutum; but revocability may be provided for indirectly by means of a now claim that the trial court improperly allowed a collateral attack on such assignment.
reserved power in the donor to dispose of the properties conveyed; and
WHEREFORE, the Court GRANTS the petition, SETS ASIDE the assailed December 23, 2008
3. That the transfer should be void if the transferor should survive the Decision and March 6, 2009 Resolution of the Court of Appeals in CA-G.R. CV 80549, and
transferee.12 (Underscoring supplied) REINSTATES in toto the June 20, 2003 Decision of the Regional Trial Court of Manila, Branch
19, in Sp. Proc. 98-90589.
The Court thus said in Austria-Magat that the express "irrevocability" of the donation is the
"distinctive standard that identifies the document as a donation inter vivos." Here, the donors SO ORDERED.
plainly said that it is "our will that this Donation Mortis Causa shall be irrevocable and shall be
respected by the surviving spouse." The intent to make the donation irrevocable becomes
even clearer by the proviso that a surviving donor shall respect the irrevocability of the
donation. Consequently, the donation was in reality a donation inter vivos.

The donors in this case of course reserved the "right, ownership, possession, and
administration of the property" and made the donation operative upon their death. But this
Court has consistently held that such reservation (reddendum) in the context of an
irrevocable donation simply means that the donors parted with their naked title, maintaining
only beneficial ownership of the donated property while they lived. 13

Notably, the three donees signed their acceptance of the donation, which acceptance the
deed required. 14 This Court has held that an acceptance clause indicates that the donation
is inter vivos, since acceptance is a requirement only for such kind of
donations.1awphi1 Donations mortis causa, being in the form of a will, need not be accepted
by the donee during the donor’s lifetime. 15

Finally, as Justice J. B. L. Reyes said in Puig v. Peñaflorida,16 in case of doubt, the conveyance
should be deemed a donation inter vivos rather than mortis causa, in order to avoid
uncertainty as to the ownership of the property subject of the deed.

Since the donation in this case was one made inter vivos, it was immediately operative and
final. The reason is that such kind of donation is deemed perfected from the moment the
donor learned of the donee’s acceptance of the donation. The acceptance makes the donee
the absolute owner of the property donated. 17

Given that the donation in this case was irrevocable or one given inter vivos, Leopoldo’s
subsequent assignment of his rights and interests in the property to Asuncion should be
regarded as void for, by then, he had no more rights to assign. He could not give what he no
longer had. Nemo dat quod non habet.18

The trial court cannot be faulted for passing upon, in a petition for probate of what was
initially supposed to be a donation mortis causa, the validity of the document as a donation
inter vivos and the nullity of one of the donor’s subsequent assignment of his rights and
interests in the property. The Court has held before that the rule on probate is not inflexible
and absolute.19 Moreover, in opposing the petition for probate and in putting the validity of

G.R. No. 172804 January 24, 2011
GONZALO VILLANUEVA, represented by his heirs, Petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.
DECISION
CARPIO, J.:
The Case
This resolves the petition for review1 of the ruling2 of the Court of Appeals dismissing a suit to
recover a realty.
The Facts
Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs, 3 sued respondents,
spouses Froilan and Leonila Branoco (respondents), in the Regional Trial Court of Naval,
Biliran (trial court) to recover a 3,492 square-meter parcel of land in Amambajag, Culaba,
Leyte (Property) and collect damages. Petitioner claimed ownership over the Property
through purchase in July 1971 from Casimiro Vere (Vere), who, in turn, bought the Property
from Alvegia Rodrigo (Rodrigo) in August 1970. Petitioner declared the Property in his name
for tax purposes soon after acquiring it.
In their Answer, respondents similarly claimed ownership over the Property through purchase
in July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated the Property in
May 1965. The two-page deed of donation (Deed), signed at the bottom by the parties and
two witnesses, reads in full:
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, a resident of
Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte del Norte, Philippines,
hereby depose and say:
That as we live[d] together as husband and wife with Juan Arcillas, we begot children,
namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS, and by reason
of poverty which I suffered while our children were still young; and because my husband Juan
Arcillas aware as he was with our destitution separated us [sic] and left for Cebu; and from
then on never cared what happened to his family; and because of that one EUFRACIA
RODRIGUEZ, one of my nieces who also suffered with our poverty, obedient as she was to all
the works in our house, and because of the love and affection which I feel [for] her, I have one
parcel of land located at Sitio Amambajag, Culaba, Leyte bearing Tax Decl. No. 1878 declared
in the name of Alvegia Rodrigo, I give (devise) said land in favor of EUFRACIA RODRIGUEZ, her
heirs, successors, and assigns together with all the improvements existing thereon, which
parcel of land is more or less described and bounded as follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and West,
by Public land; 2. It has an area of 3,492 square meters more or less; 3. It is planted to
coconuts now bearing fruits; 4. Having an assessed value of ₱240.00; 5. It is now in the
possession of EUFRACIA RODRIGUEZ since May 21, 1962 in the concept of an owner, but the
Deed of Donation or that ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in
favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that if the herein
Donee predeceases me, the same land will not be reverted to the Donor, but will be inherited
by the heirs of EUFRACIA RODRIGUEZ;
That I EUFRACIA RODRIGUEZ, hereby accept the land above described from Inay Alvegia
Rodrigo and I am much grateful to her and praying further for a longer life; however, I will
give one half (1/2) of the produce of the land to Apoy Alve during her lifetime. 4
Respondents entered the Property in 1983 and paid taxes afterwards.
The Ruling of the Trial Court
The trial court ruled for petitioner, declared him owner of the Property, and ordered
respondents to surrender possession to petitioner, and to pay damages, the value of the
Property’s produce since 1982 until petitioner’s repossession and the costs. 5 The trial court
rejected respondents’ claim of ownership after treating the Deed as a donation mortis
causa which Rodrigo effectively cancelled by selling the Property to Vere in 1970. 6 Thus, by
the time Rodriguez sold the Property to respondents in 1983, she had no title to transfer.
Respondents appealed to the Court of Appeals (CA), imputing error in the trial court’s
interpretation of the Deed as a testamentary disposition instead of an inter vivos donation,
passing title to Rodriguez upon its execution.
Ruling of the Court of Appeals
The CA granted respondents’ appeal and set aside the trial court’s ruling. While conceding
that the "language of the [Deed is] x x x confusing and which could admit of possible different
interpretations,"7 the CA found the following factors pivotal to its reading of the Deed as
donation inter vivos: (1) Rodriguez had been in possession of the Property as owner since 21
May 1962, subject to the delivery of part of the produce to Apoy Alve; (2) the Deed’s
consideration was not Rodrigo’s death but her "love and affection" for Rodriguez, considering
the services the latter rendered; (3) Rodrigo waived dominion over the Property in case
Rodriguez predeceases her, implying its inclusion in Rodriguez’s estate; and (4) Rodriguez
accepted the donation in the Deed itself, an act necessary to effectuate donations inter vivos,
not devises.8 Accordingly, the CA upheld the sale between Rodriguez and respondents, and,
conversely found the sale between Rodrigo and petitioner’s predecessor-in-interest, Vere,
void for Rodrigo’s lack of title.
In this petition, petitioner seeks the reinstatement of the trial court’s ruling. Alternatively,
petitioner claims ownership over the Property through acquisitive prescription, having
allegedly occupied it for more than 10 years. 9
Respondents see no reversible error in the CA’s ruling and pray for its affirmance.
The Issue
The threshold question is whether petitioner’s title over the Property is superior to
respondents’. The resolution of this issue rests, in turn, on whether the contract between the
parties’ predecessors-in-interest, Rodrigo and Rodriguez, was a donation or a devise. If the
former, respondents hold superior title, having bought the Property from Rodriguez. If the
latter, petitioner prevails, having obtained title from Rodrigo under a deed of sale the
execution of which impliedly revoked the earlier devise to Rodriguez.
The Ruling of the Court
We find respondents’ title superior, and thus, affirm the CA.
Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation
We examine the juridical nature of the Deed – whether it passed title to Rodriguez upon its
execution or is effective only upon Rodrigo’s death – using principles distilled from relevant
jurisprudence. Post-mortem dispositions typically –
(1) Convey no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
(2) That before the [donor’s] death, the transfer should be revocable by the
transferor at will, ad nutum; but revocability may be provided for indirectly by
means of a reserved power in the donor to dispose of the properties conveyed;
(3) That the transfer should be void if the transferor should survive the transferee. 10
Further –
[4] [T]he specification in a deed of the causes whereby the act may be revoked by
the donor indicates that the donation is inter vivos, rather than a disposition mortis
causa[;]
[5] That the designation of the donation as mortis causa, or a provision in the deed
to the effect that the donation is "to take effect at the death of the donor" are not
controlling criteria; such statements are to be construed together with the rest of
the instrument, in order to give effect to the real intent of the transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed donation inter
vivos rather than mortis causa, in order to avoid uncertainty as to the ownership of
the property subject of the deed.11
It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected
donation inter vivos. First. Rodrigo stipulated that "if the herein Donee predeceases me, the
[Property] will not be reverted to the Donor, but will be inherited by the heirs of x x x
Rodriguez," signaling the irrevocability of the passage of title to Rodriguez’s estate, waiving
Rodrigo’s right to reclaim title. This transfer of title was perfected the moment Rodrigo
learned of Rodriguez’s acceptance of the disposition 12 which, being reflected in the Deed,
took place on the day of its execution on 3 May 1965. Rodrigo’s acceptance of the transfer
underscores its essence as a gift in presenti, not in futuro, as only donations inter vivos need
acceptance by the recipient.13 Indeed, had Rodrigo wished to retain full title over the
Property, she could have easily stipulated, as the testator did in another case, that "the donor,
may transfer, sell, or encumber to any person or entity the properties here donated x x x" 14 or
used words to that effect. Instead, Rodrigo expressly waived title over the Property in case
Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulation’s damning effect on his case, petitioner tries
to profit from it, contending it is a fideicommissary substitution clause. 15 Petitioner assumes
the fact he is laboring to prove. The question of the Deed’s juridical nature, whether it is a will
or a donation, is the crux of the present controversy. By treating the clause in question as
mandating fideicommissary substitution, a mode of testamentary disposition by which the
first heir instituted is entrusted with the obligation to preserve and to transmit to a second
heir the whole or part of the inheritance, 16 petitioner assumes that the Deed is a will. Neither
the Deed’s text nor the import of the contested clause supports petitioner’s theory.
Second. What Rodrigo reserved for herself was only the beneficial title to the Property,
evident from Rodriguez’s undertaking to "give one [half] x x x of the produce of the land to
Apoy Alve during her lifetime."17 Thus, the Deed’s stipulation that "the ownership shall be
vested on [Rodriguez] upon my demise," taking into account the non-reversion clause, could
only refer to Rodrigo’s beneficial title. We arrived at the same conclusion in Balaqui v.
Dongso18 where, as here, the donor, while "b[inding] herself to answer to the [donor] and her
heirs x x x that none shall question or disturb [the donee’s] right," also stipulated that the
donation "does not pass title to [the donee] during my lifetime; but when I die, [the donee]
shall be the true owner" of the donated parcels of land. In finding the disposition as a
gift inter vivos, the Court reasoned:
Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the donor]
guaranteed to [the donee] and her heirs and successors, the right to said property thus
conferred. From the moment [the donor] guaranteed the right granted by her to [the donee]
to the two parcels of land by virtue of the deed of gift, she surrendered such right; otherwise
there would be no need to guarantee said right. Therefore, when [the donor] used the words
upon which the appellants base their contention that the gift in question is a donation mortis
causa [that the gift "does not pass title during my lifetime; but when I die, she shall be the
true owner of the two aforementioned parcels"] the donor meant nothing else than that she
reserved of herself the possession and usufruct of said two parcels of land until her death,
at which time the donee would be able to dispose of them freely.19 (Emphasis supplied)
Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her to
reserve partial usufructuary right over it.20
Third. The existence of consideration other than the donor’s death, such as the donor’s love
and affection to the donee and the services the latter rendered, while also true of devises,
nevertheless "corroborates the express irrevocability of x x x [inter vivos] transfers."21 Thus,
the CA committed no error in giving weight to Rodrigo’s statement of "love and affection" for
Rodriguez, her niece, as consideration for the gift, to underscore its finding.
It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed tending to
serve his cause (e.g. "the ownership shall be vested on [Rodriguez] upon my demise" and
"devise"). Dispositions bearing contradictory stipulations are interpreted wholistically, to give
effect to the donor’s intent. In no less than seven cases featuring deeds of donations styled as
"mortis causa" dispositions, the Court, after going over the deeds, eventually considered the
transfers inter vivos,22 consistent with the principle that "the designation of the donation
as mortis causa, or a provision in the deed to the effect that the donation is ‘to take effect at
the death of the donor’ are not controlling criteria [but] x x x are to be construed together
with the rest of the instrument, in order to give effect to the real intent of the
transferor."23 Indeed, doubts on the nature of dispositions are resolved to favor inter
vivos transfers "to avoid uncertainty as to the ownership of the property subject of the
deed."24
Nor can petitioner capitalize on Rodrigo’s post-donation transfer of the Property to Vere as
proof of her retention of ownership. If such were the barometer in interpreting deeds of
donation, not only will great legal uncertainty be visited on gratuitous dispositions, this will
give license to rogue property owners to set at naught perfected transfers of titles, which,
while founded on liberality, is a valid mode of passing ownership. The interest of settled
property dispositions counsels against licensing such practice. 25
Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in 1965,
Rodrigo "cannot afterwards revoke the donation nor dispose of the said property in favor of
another."26 Thus, Rodrigo’s post-donation sale of the Property vested no title to Vere. As
Vere’s successor-in-interest, petitioner acquired no better right than him. On the other hand,
respondents bought the Property from Rodriguez, thus acquiring the latter’s title which they
may invoke against all adverse claimants, including petitioner.
Petitioner Acquired No Title Over the Property
Alternatively, petitioner grounds his claim of ownership over the Property through his and
Vere’s combined possession of the Property for more than ten years, counted from Vere’s
purchase of the Property from Rodrigo in 1970 until petitioner initiated his suit in the trial
court in February 1986.27 Petitioner anchors his contention on an unfounded legal
assumption. The ten year ordinary prescriptive period to acquire title through possession of
real property in the concept of an owner requires uninterrupted possession coupled with just
title and good faith.28 There is just title when the adverse claimant came into possession of
the property through one of the modes recognized by law for the acquisition of ownership or
other real rights, but the grantor was not the owner or could not transmit any right. 29 Good
faith, on the other hand, consists in the reasonable belief that the person from whom the
possessor received the thing was the owner thereof, and could transmit his ownership. 30
Although Vere and petitioner arguably had just title having successively acquired the Property
through sale, neither was a good faith possessor. As Rodrigo herself disclosed in the Deed,
Rodriguez already occupied and possessed the Property "in the concept of an owner" ("como
tag-iya"31) since 21 May 1962, nearly three years before Rodrigo’s donation in 3 May 1965
and seven years before Vere bought the Property from Rodrigo. This admission against
interest binds Rodrigo and all those tracing title to the Property through her, including Vere
and petitioner. Indeed, petitioner’s insistent claim that Rodriguez occupied the Property only
in 1982, when she started paying taxes, finds no basis in the records. In short, when Vere
bought the Property from Rodrigo in 1970, Rodriguez was in possession of the Property, a fact
that prevented Vere from being a buyer in good faith.
Lacking good faith possession, petitioner’s only other recourse to maintain his claim of
ownership by prescription is to show open, continuous and adverse possession of the
Property for 30 years.32 Undeniably, petitioner is unable to meet this requirement.1avvphil
Ancillary Matters Petitioner Raises Irrelevant
Petitioner brings to the Court’s attention facts which, according to him, support his theory
that Rodrigo never passed ownership over the Property to Rodriguez, namely, that Rodriguez
registered the Deed and paid taxes on the Property only in 1982 and Rodriguez obtained from
Vere in 1981 a waiver of the latter’s "right of ownership" over the Property. None of these
facts detract from our conclusion that under the text of the Deed and based on the
contemporaneous acts of Rodrigo and Rodriguez, the latter, already in possession of the
Property since 1962 as Rodrigo admitted, obtained naked title over it upon the Deed’s
execution in 1965. Neither registration nor tax payment is required to perfect donations. On
the relevance of the waiver agreement, suffice it to say that Vere had nothing to waive to
Rodriguez, having obtained no title from Rodrigo. Irrespective of Rodriguez’s motivation in
obtaining the waiver, that document, legally a scrap of paper, added nothing to the title
Rodriguez obtained from Rodrigo under the Deed.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June 2005 and the
Resolution dated 5 May 2006 of the Court of Appeals.
SO ORDERED.

ART. 774
G.R. No. 103577 October 7, 1996
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C.
GONZALES (for herself and on behalf of Florida C. Tupper, as attorney-in-fact), CIELITO A.
CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAIS MABANAG, petitioners,
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ, and RAMONA PATRICIA ALCARAZ,
assisted by GLORIA F. NOEL as attorney-in-fact, respondents.
MELO, J.:p
The petition before us has its roots in a complaint for specific performance to compel herein
petitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a
parcel of land with its improvements located along Roosevelt Avenue in Quezon City entered
into by the parties sometime in January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et al.
(hereinafter referred to as Coronels) executed a document entitled
"Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona Patricia
Alcaraz (hereinafter referred to as Ramona) which is reproduced
hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 — Total amount
50,000 — Down payment
———————————
P1,190,000.00 — Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City,
the sum of Fifty Thousand Pesos purchase price of our inherited house
and lot, covered by TCT No. 119627 of the Registry of Deeds of Quezon
City, in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased
father, Constancio P. Coronel, the transfer certificate of title immediately
upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately
execute the deed of absolute sale of said property and Miss Ramona
Patricia Alcaraz shall immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1. Ramona will make a down payment of Fifty Thousand (P50,000.00)
Pesos upon execution of the document aforestated;
2. The Coronels will cause the transfer in their names of the title of the
property registered in the name of their deceased father upon receipt of
the Fifty Thousand (P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject property, the Coronels
will execute the deed of absolute sale in favor of Ramona and the latter
will pay the former the whole balance of One Million One Hundred Ninety
Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D.
Alcaraz (hereinafter referred to as Concepcion), mother of Ramona, paid
the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh.
"2").
On February 6, 1985, the property originally registered in the name of the
Coronels' father was transferred in their names under TCT
No. 327043 (Exh. "D"; Exh. "4")
On February 18, 1985, the Coronels sold the property covered by TCT No.
327043 to intervenor-appellant Catalina B. Mabanag (hereinafter referred
to as Catalina) for One Million Five Hundred Eighty Thousand
(P1,580,000.00) Pesos after the latter has paid Three Hundred Thousand
(P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-C")
For this reason, Coronels canceled and rescinded the contract (Exh. "A")
with Ramona by depositing the down payment paid by Concepcion in the
bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for specific
performance against the Coronels and caused the annotation of a notice
of lis pendens at the back of TCT No. 327403 (Exh. "E"; Exh. "5").
 On April 2, 1985, Catalina caused the annotation of a notice of adverse
claim covering the same property with the Registry of Deeds of Quezon
City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over
the subject property in favor of Catalina (Exh. "G"; Exh. "7").
On June 5, 1985, a new title over the subject property was issued in the
name of Catalina under TCT No. 351582 (Exh. "H"; Exh. "8").
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the
parties agreed to submit the case for decision solely on the basis of documentary exhibits.
Thus, plaintiffs therein (now private respondents) proffered their documentary evidence
accordingly marked as Exhibits "A" through "J", inclusive of their corresponding submarkings.
Adopting these same exhibits as their own, then defendants (now petitioners) accordingly
offered and marked them as Exhibits "1" through "10", likewise inclusive of their
corresponding submarkings. Upon motion of the parties, the trial court gave them thirty (30)
days within which to simultaneously submit their respective memoranda, and an additional
15 days within which to submit their corresponding comment or reply thereof, after which,
the case would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who
was then temporarily detailed to preside over Branch 82 of the RTC of Quezon City. On March
1, 1989, judgment was handed down by Judge Roura from his regular bench at Macabebe,
Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered
ordering defendant to execute in favor of plaintiffs a deed of absolute sale
covering that parcel of land embraced in and covered by Transfer
Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of
Deeds for Quezon City, together with all the improvements existing
thereon free from all liens and encumbrances, and once accomplished, to
immediately deliver the said document of sale to plaintiffs and upon
receipt thereof, the said document of sale to plaintiffs and upon receipt
thereof, the plaintiffs are ordered to pay defendants the whole balance of
the purchase price amounting to P1,190,000.00 in cash. Transfer
Certificate of Title No. 331582 of the Registry of Deeds for Quezon City in
the name of intervenor is hereby canceled and declared to be without
force and effect. Defendants and intervenor and all other persons
claiming under them are hereby ordered to vacate the subject property
and deliver possession thereof to plaintiffs. Plaintiffs' claim for damages
and attorney's fees, as well as the counterclaims of defendants and
intervenors are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioner before the new presiding judge of the
Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and
to render anew decision by the undersigned Presiding Judge should be
denied for the following reasons: (1) The instant case became submitted
for decision as of April 14, 1988 when the parties terminated the
presentation of their respective documentary evidence and when the
Presiding Judge at that time was Judge Reynaldo Roura. The fact that they
were allowed to file memoranda at some future date did not change the
fact that the hearing of the case was terminated before Judge Roura and
therefore the same should be submitted to him for decision; (2) When the
defendants and intervenor did not object to the authority of Judge
Reynaldo Roura to decide the case prior to the rendition of the decision,
when they met for the first time before the undersigned Presiding Judge
at the hearing of a pending incident in Civil Case No. Q-46145 on
November 11, 1988, they were deemed to have acquiesced thereto and
they are now estopped from questioning said authority of Judge Roura
after they received the decision in question which happens to be adverse
to them; (3) While it is true that Judge Reynaldo Roura was merely a
Judge-on-detail at this Branch of the Court, he was in all respects the
Presiding Judge with full authority to act on any pending incident
submitted before this Court during his incumbency. When he returned to
his Official Station at Macabebe, Pampanga, he did not lose his authority
to decide or resolve such cases submitted to him for decision or
resolution because he continued as Judge of the Regional Trial Court and
is of co-equal rank with the undersigned Presiding Judge. The standing
rule and supported by jurisprudence is that a Judge to whom a case is
submitted for decision has the authority to decide the case
notwithstanding his transfer to another branch or region of the same
court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated
March 1, 1989 rendered in the instant case, resolution of which now
pertains to the undersigned Presiding Judge, after a meticulous
examination of the documentary evidence presented by the parties, she
is convinced that the Decision of March 1, 1989 is supported by evidence
and, therefore, should not be disturbed.
 IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or to
Annul Decision and Render Anew Decision by the Incumbent Presiding
Judge" dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals
(Buena, Gonzaga-Reyes, Abad Santos (P), JJ.) rendered its decision fully agreeing with the trial
court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private
respondents' Reply Memorandum, was filed on September 15, 1993. The case was, however,
re-raffled to undersigned ponente only on August 28, 1996, due to the voluntary inhibition of
the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of
respondent court in the affirmance of the trial court's decision, we definitely find the instant
petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in
the case at bar is the precise determination of the legal significance of the document entitled
"Receipt of Down Payment" which was offered in evidence by both parties. There is no
dispute as to the fact that said document embodied the binding contract between Ramona
Patricia Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other,
pertaining to a particular house and lot covered by TCT No. 119627, as defined in Article 1305
of the Civil Code of the Philippines which reads as follows:
Art. 1305. A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give something
or to render some service.
While, it is the position of private respondents that the "Receipt of Down Payment"
embodied a perfected contract of sale, which perforce, they seek to enforce by means of an
action for specific performance, petitioners on their part insist that what the document
signified was a mere executory contract to sell, subject to certain suspensive conditions, and
because of the absence of Ramona P. Alcaraz, who left for the United States of America, said
contract could not possibly ripen into a contract absolute sale.
Plainly, such variance in the contending parties' contentions is brought about by the way each
interprets the terms and/or conditions set forth in said private instrument. Withal, based on
whatever relevant and admissible evidence may be available on record, this, Court, as were
the courts below, is now called upon to adjudge what the real intent of the parties was at the
time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing,
and the other to pay therefor a price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The
essential elements of a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership
in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because
the first essential element is lacking. In a contract to sell, the prospective seller explicity
reserves the transfer of title to the prospective buyer, meaning, the prospective seller does
not as yet agree or consent to transfer ownership of the property subject of the contract to
sell until the happening of an event, which for present purposes we shall take as the full
payment of the purchase price. What the seller agrees or obliges himself to do is to fulfill is
promise to sell the subject property when the entire amount of the purchase price is
delivered to him. In other words the full payment of the purchase price partakes of a
suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising
and thus, ownership is retained by the prospective seller without further remedies by the
prospective buyer. In Roque vs. Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the
respondent was a contract to sell where the ownership or title is retained
by the seller and is not to pass until the full payment of the price, such
payment being a positive suspensive condition and failure of which is not
a breach, casual or serious, but simply an event that prevented the
obligation of the vendor to convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment of
the purchase price, the prospective seller's obligation to sell the subject property by entering
into a contract of sale with the prospective buyer becomes demandable as provided in Article
1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price
certain is reciprocally demandable.
 An accepted unilateral promise to buy or to sell a determinate thing for a
price certain is binding upon the promissor if the promise is supported by
a consideration distinct from the price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the subject property despite delivery thereof to
the prospective buyer, binds himself to sell the said property exclusively to the prospective
buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase
price.
A contract to sell as defined hereinabove, may not even be considered as a conditional
contract of sale where the seller may likewise reserve title to the property subject of the sale
until the fulfillment of a suspensive condition, because in a conditional contract of sale, the
first element of consent is present, although it is conditioned upon the happening of a
contingent event which may or may not occur. If the suspensive condition is not fulfilled, the
perfection of the contract of sale is completely abated (cf. Homesite and housing Corp. vs.
Court of Appeals, 133 SCRA 777 [1984]). However, if the suspensive condition is fulfilled, the
contract of sale is thereby perfected, such that if there had already been previous delivery of
the property subject of the sale to the buyer, ownership thereto automatically transfers to
the buyer by operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, ownership will not automatically transfer to the buyer
although the property may have been previously delivered to him. The prospective seller still
has to convey title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale
specially in cases where the subject property is sold by the owner not to the party the seller
contracted with, but to a third person, as in the case at bench. In a contract to sell, there
being no previous sale of the property, a third person buying such property despite the
fulfillment of the suspensive condition such as the full payment of the purchase price, for
instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the
relief of reconveyance of the property. There is no double sale in such case. Title to the
property will transfer to the buyer after registration because there is no defect in the owner-
seller's title per se, but the latter, of course, may be used for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition,
the sale becomes absolute and this will definitely affect the seller's title thereto. In fact, if
there had been previous delivery of the subject property, the seller's ownership or title to the
property is automatically transferred to the buyer such that, the seller will no longer have any
title to transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer
of the property who may have had actual or constructive knowledge of such defect in the
seller's title, or at least was charged with the obligation to discover such defect, cannot be a
registrant in good faith. Such second buyer cannot defeat the first buyer's title. In case a title
is issued to the second buyer, the first buyer may seek reconveyance of the property subject
of the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real
nature of the contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given
their natural and ordinary meaning unless a technical meaning was intended (Tan vs. Court of
Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared in the said "Receipt of Down
Payment" that they —
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City,
the sum of Fifty Thousand Pesos purchase price of our inherited house
and lot, covered by TCT No. 1199627 of the Registry of Deeds of Quezon
City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the
natural and ordinary idea conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more manifest
that there was a clear intent on the part of petitioners to transfer title to the buyer, but since
the transfer certificate of title was still in the name of petitioner's father, they could not fully
effect such transfer although the buyer was then willing and able to immediately pay the
purchase price. Therefore, petitioners-sellers undertook upon receipt of the down payment
from private respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title
in their names from that of their father, after which, they promised to present said title, now
in their names, to the latter and to execute the deed of absolute sale whereupon, the latter
shall, in turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no
express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title was not in their names) and not
the full payment of the purchase price. Under the established facts and circumstances of the
case, the Court may safely presume that, had the certificate of title been in the names of
petitioners-sellers at that time, there would have been no reason why an absolute contract of
sale could not have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to
sell the properly to private respondent upon the fulfillment of the suspensive condition. On
the contrary, having already agreed to sell the subject property, they undertook to have the
certificate of title changed to their names and immediately thereafter, to execute the written
deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after
compliance by the buyer with certain terms and conditions, promised to sell the property to
the latter. What may be perceived from the respective undertakings of the parties to the
contract is that petitioners had already agreed to sell the house and lot they inherited from
their father, completely willing to transfer full ownership of the subject house and lot to the
buyer if the documents were then in order. It just happened, however, that the transfer
certificate of title was then still in the name of their father. It was more expedient to first
effect the change in the certificate of title so as to bear their names. That is why they
undertook to cause the issuance of a new transfer of the certificate of title in their names
upon receipt of the down payment in the amount of P50,000.00. As soon as the new
certificate of title is issued in their names, petitioners were committed to immediately
execute the deed of absolute sale. Only then will the obligation of the buyer to pay the
remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into so as
to protect the seller against a buyer who intends to buy the property in installment by
withholding ownership over the property until the buyer effects full payment therefor, in the
contract entered into in the case at bar, the sellers were the one who were unable to enter
into a contract of absolute sale by reason of the fact that the certificate of title to the
property was still in the name of their father. It was the sellers in this case who, as it were,
had the impediment which prevented, so to speak, the execution of an contract of absolute
sale.
What is clearly established by the plain language of the subject document is that when the
said "Receipt of Down Payment" was prepared and signed by petitioners Romeo A. Coronel,
et al., the parties had agreed to a conditional contract of sale, consummation of which is
subject only to the successful transfer of the certificate of title from the name of petitioners'
father, Constancio P. Coronel, to their names.
The Court significantly notes this suspensive condition was, in fact, fulfilled on February 6,
1985 (Exh. "D"; Exh. "4"). Thus, on said date, the conditional contract of sale between
petitioners and private respondent Ramona P. Alcaraz became obligatory, the only act
required for the consummation thereof being the delivery of the property by means of the
execution of the deed of absolute sale in a public instrument, which petitioners unequivocally
committed themselves to do as evidenced by the "Receipt of Down Payment."
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the
case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract and
upon the price.
From the moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.
Art. 1181. In conditional obligations, the acquisition of rights, as well as
the extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title
in petitioners' names was fulfilled on February 6, 1985, the respective obligations of the
parties under the contract of sale became mutually demandable, that is, petitioners, as
sellers, were obliged to present the transfer certificate of title already in their names to
private respondent Ramona P. Alcaraz, the buyer, and to immediately execute the deed of
absolute sale, while the buyer on her part, was obliged to forthwith pay the balance of the
purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners
conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves "to effect the
transfer in our names from our deceased father Constancio P. Coronel,
the transfer certificate of title immediately upon receipt of the
downpayment above-stated". The sale was still subject to this suspensive
condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a
suspensive condition. Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first
transferring the title to the property under their names, there could be no
perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they set their own trap for themselves, for Article 1186 of the Civil
Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more controlling than these mere
hypothetical arguments is the fact that the condition herein referred to was actually and
indisputably fulfilled on February 6, 1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. "D"; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document
denominated as "Receipt of Down Payment" (Exh. "A"; Exh. "1"), the parties entered into a
contract of sale subject only to the suspensive condition that the sellers shall effect the
issuance of new certificate title from that of their father's name to their names and that, on
February 6, 1985, this condition was fulfilled (Exh. "D"; Exh. "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides —
 Art. 1187. The effects of conditional obligation to give, once the condition
has been fulfilled, shall retroact to the day of the constitution of the
obligation . . .
In obligation to do or not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of
sale became mutually due and demandable as of the time of fulfillment or
occurrence of the suspensive condition on February 6, 1985. As of that point in
time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because
they were then not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as
follows:
Art. 774. Succession is a mode of acquisition by virtue of which the
property, rights and obligations to be extent and value of the inheritance
of a person are transmitted through his death to another or others by his
will or by operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent
Constancio P. Coronel are compulsory heirs who were called to succession by
operation of law. Thus, at the point their father drew his last breath, petitioners
stepped into his shoes insofar as the subject property is concerned, such that any
rights or obligations pertaining thereto became binding and enforceable upon
them. It is expressly provided that rights to the succession are transmitted from the
moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90
Phil. 850 [1952]).
Be it also noted that petitioners' claim that succession may not be declared unless the
creditors have been paid is rendered moot by the fact that they were able to effect the
transfer of the title to the property from the decedent's name to their names on February 6,
1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to
enter into an agreement at that time and they cannot be allowed to now take a posture
contrary to that which they took when they entered into the agreement with private
respondent Ramona P. Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved
as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the
time of sale, petitioners cannot claim now that they were not yet the absolute
owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between
them and Ramona P. Alcaraz, the latter breached her reciprocal obligation when she rendered
impossible the consummation thereof by going to the United States of America, without
leaving her address, telephone number, and Special Power of Attorney (Paragraphs 14 and 15,
Answer with Compulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for
which reason, so petitioners conclude, they were correct in unilaterally rescinding rescinding
the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in
the instant case. We note that these supposed grounds for petitioners' rescission, are mere
allegations found only in their responsive pleadings, which by express provision of the rules,
are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised
Rules of Court). The records are absolutely bereft of any supporting evidence to substantiate
petitioners' allegations. We have stressed time and again that allegations must be proven by
sufficient evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA
598 [1961]. Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on
February 6, 1985, we cannot justify petitioner-sellers' act of unilaterally and extradicially
rescinding the contract of sale, there being no express stipulation authorizing the sellers to
extarjudicially rescind the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs.
Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz
because although the evidence on record shows that the sale was in the name of Ramona P.
Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramona's
mother, who had acted for and in behalf of her daughter, if not also in her own behalf.
Indeed, the down payment was made by Concepcion D. Alcaraz with her own personal check
(Exh. "B"; Exh. "2") for and in behalf of Ramona P. Alcaraz. There is no evidence showing that
petitioners ever questioned Concepcion's authority to represent Ramona P. Alcaraz when
they accepted her personal check. Neither did they raise any objection as regards payment
being effected by a third person. Accordingly, as far as petitioners are concerned, the physical
absence of Ramona P. Alcaraz is not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her
obligation to pay the full purchase price is concerned. Petitioners who are precluded from
setting up the defense of the physical absence of Ramona P. Alcaraz as above-explained
offered no proof whatsoever to show that they actually presented the new transfer certificate
of title in their names and signified their willingness and readiness to execute the deed of
absolute sale in accordance with their agreement. Ramona's corresponding obligation to pay
the balance of the purchase price in the amount of P1,190,000.00 (as buyer) never became
due and demandable and, therefore, she cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal
obligations may be considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in delay
from the time the obligee judicially or extrajudicially demands from them
the fulfillment of their obligation.
xxx xxx xxx
In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfill his
obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between
petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave
rise to a case of double sale where Article 1544 of the Civil Code will apply, to wit:
Art. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
Should if be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in Registry of
Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof
to the person who presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of
the second contract of sale was registered with the Registry of Deeds of Quezon City giving
rise to the issuance of a new certificate of title in the name of Catalina B. Mabanag on June 5,
1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the first
buyer, the exceptions being: (a) when the second buyer, in good faith, registers the sale ahead
of the first buyer, and (b) should there be no inscription by either of the two buyers, when the
second buyer, in good faith, acquires possession of the property ahead of the first buyer.
Unless, the second buyer satisfies these requirements, title or ownership will not transfer to
him to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a
distinguished member of the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger
in right). Knowledge by the first buyer of the second sale cannot defeat
the first buyer's rights except when the second buyer first registers in
good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33).
Conversely, knowledge gained by the second buyer of the first sale
defeats his rights even if he is first to register, since knowledge taints his
registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No.
58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June
1984, 129 SCRA 656), it has held that it is essential, to merit the
protection of Art. 1544, second paragraph, that the second realty buyer
must act in good faith in registering his deed of sale (citing Carbonell vs.
Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02
September 1992).
(J. Vitug Compendium of Civil Law and Jurisprudence, 1993 Edition, p.
604).
Petitioner point out that the notice of lis pendens in the case at bar was annoted on the title
of the subject property only on February 22, 1985, whereas, the second sale between
petitioners Coronels and petitioner Mabanag was supposedly perfected prior thereto or on
February 18, 1985. The idea conveyed is that at the time petitioner Mabanag, the second
buyer, bought the property under a clean title, she was unaware of any adverse claim or
previous sale, for which reason she is buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not the
second buyer was a buyer in good faith but whether or not said second buyer registers such
second sale in good faith, that is, without knowledge of any defect in the title of the property
sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good
faith, registered the sale entered into on February 18, 1985 because as early as February 22,
1985, a notice of lis pendens had been annotated on the transfer certificate of title in the
names of petitioners, whereas petitioner Mabanag registered the said sale sometime in April,
1985. At the time of registration, therefore, petitioner Mabanag knew that the same property
had already been previously sold to private respondents, or, at least, she was charged with
knowledge that a previous buyer is claiming title to the same property. Petitioner Mabanag
cannot close her eyes to the defect in petitioners' title to the property at the time of the
registration of the property.
This Court had occasions to rule that:
 If a vendee in a double sale registers that sale after he has acquired
knowledge that there was a previous sale of the same property to a third
party or that another person claims said property in a pervious sale, the
registration will constitute a registration in bad faith and will not confer
upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978]; citing
Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil.
554; Fernandez vs. Mercader, 43 Phil. 581.)

Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz,
perfected on February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on
February 18, 1985, was correctly upheld by both the courts below.

Although there may be ample indications that there was in fact an agency between Ramona
as principal and Concepcion, her mother, as agent insofar as the subject contract of sale is
concerned, the issue of whether or not Concepcion was also acting in her own behalf as a co-
buyer is not squarely raised in the instant petition, nor in such assumption disputed between
mother and daughter. Thus, We will not touch this issue and no longer disturb the lower
courts' ruling on this point.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the
appealed judgment AFFIRMED.

SO ORDERED.

G.R. No. 168970 January 15, 2010
CELESTINO BALUS, Petitioner,
vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE CALUNOD, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is
the Decision1 of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which
set aside the February 7, 1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte,
Branch 4 in Civil Case No. 3263.
The facts of the case are as follows:
Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus.
Sebastiana died on September 6, 1978, while Rufo died on July 6, 1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he
obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was
originally covered by Original Certificate of Title No. P-439(788) and more particularly
described as follows:
A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares,
more or less, situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as
follows: Bounded on the NE., along line 1-2, by Lot 5122, Csd-292; along line 2-12, by
Dodiongan River; along line 12-13 by Lot 4649, Csd-292; and along line 12-1, by Lot 4661,
Csd-292. x x x 2
Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was
subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. On
November 20, 1981, a Certificate of Sale3 was executed by the sheriff in favor of the Bank. 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 4 in the Bank's
favor. 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 Estate5adjudicating 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
Land6 was executed by the Bank in favor of respondents. Subsequently, Transfer Certificate of
Title (TCT) No. T-39,484(a.f.)7 was issued in the name of respondents. Meanwhile, petitioner
continued possession of the subject lot.
On June 27, 1995, respondents filed a Complaint8 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. Respondents claimed that they had exhausted all remedies
for the amicable settlement of the case, but to no avail.
On February 7, 1997, the RTC rendered a Decision 9 disposing as follows:
WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale
in favor of the defendant, the one-third share of the property in question, presently
possessed by him, and described in the deed of partition, as follows:
A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original
Certificate of Title No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de
Calunod, situated at Lagundang, Bunawan, Iligan City, bounded on the North by Lot 5122;
East by shares of Saturnino Balus and Leonarda Balus-Calunod; South by Lot 4649, Dodiongan
River; West by Lot 4661, consisting of 10,246 square meters, including improvements
thereon.
and dismissing all other claims of the parties.
The amount of ₱6,733.33 consigned by the defendant with the Clerk of Court is hereby
ordered delivered to the plaintiffs, as purchase price of the one-third portion of the land in
question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
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 before the respondents bought the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA.
On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting
aside the Decision of the RTC and ordering petitioner to immediately surrender possession of
the subject property to the respondents. The CA ruled that when petitioner and respondents
did not redeem the subject property within the redemption period and allowed the
consolidation of ownership and the issuance of a new title in the name of the Bank, their co-
ownership was extinguished.
Hence, the instant petition raising a sole issue, to wit:
WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE RESPONDENTS OVER
THE PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE TRANSFER OF TITLE TO
THE BANK) BY VIRTUE OF THE PARTIES' AGREEMENT PRIOR TO THE REPURCHASE THEREOF BY
THE RESPONDENTS; THUS, WARRANTING THE PETITIONER'S ACT OF ENFORCING THE
AGREEMENT BY REIMBURSING THE RESPONDENTS OF HIS (PETITIONER'S) JUST SHARE OF THE
REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership by him and respondents over
the subject property persisted even after the lot was purchased by the Bank and title thereto
transferred to its name, and even after it was eventually bought back by the respondents
from the Bank.
Petitioner insists that despite respondents' full knowledge of the fact that the title over the
disputed property was already in the name of the Bank, they still proceeded to execute the
subject Extrajudicial Settlement, having in mind the intention of purchasing back the property
together with petitioner and of continuing their co-ownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract
between him and respondents, because it contains a provision whereby the parties agreed to
continue their co-ownership of the subject property by "redeeming" or "repurchasing" the
same from the Bank. This agreement, petitioner contends, is the law between the parties
and, as such, binds the respondents. As a result, petitioner asserts that respondents' act of
buying the disputed property from the Bank without notifying him inures to his benefit as to
give him the right to claim his rightful portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.
The Court is not persuaded.
Petitioner and respondents are arguing on the wrong premise that, at the time of the
execution of the Extrajudicial Settlement, the subject property formed part of the estate of
their deceased father to which they may lay claim as his heirs.
At the outset, it bears to emphasize that there is no dispute with respect to the fact that the
subject property was exclusively owned by petitioner and respondents' father, Rufo, at the
time that it was mortgaged in 1979. This was stipulated by the parties during the hearing
conducted by the trial court on October 28, 1996.12 Evidence shows that a Definite Deed of
Sale13 was issued in favor of the Bank on January 25, 1984, after the period of redemption
expired. There is neither any dispute that a new title was issued in the Bank's name before
Rufo died on July 6, 1984. Hence, there is no question that the Bank acquired exclusive
ownership of the contested lot during the lifetime of Rufo.
The rights to a person's succession are transmitted from the moment of his death. 14 In
addition, the inheritance of a person consists of the property and transmissible rights and
obligations existing at the time of his death, as well as those which have accrued thereto
since the opening of the succession. 15 In the present case, since Rufo lost ownership of the
subject property during his lifetime, it only follows that at the time of his death, the disputed
parcel of land no longer formed part of his estate to which his heirs may lay claim. Stated
differently, petitioner and respondents never inherited the subject lot from their father.
Petitioner and respondents, therefore, were wrong in assuming that they became co-owners
of the subject lot. Thus, any issue arising from the supposed right of petitioner as co-owner of
the contested parcel of land is negated by the fact that, in the eyes of the law, the disputed
lot did not pass into the hands of petitioner and respondents as compulsory heirs of Rufo at
any given point in time.
The foregoing notwithstanding, the Court finds a necessity for a complete determination of
the issues raised in the instant case to look into petitioner's argument that the Extrajudicial
Settlement is an independent contract which gives him the right to enforce his right to claim a
portion of the disputed lot bought by respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected
by mere consent; and from that moment, the parties are bound not only to the fulfillment of
what has been expressly stipulated but also to all the consequences which, according to their
nature, may be in keeping with good faith, usage and law.
Article 1306 of the same Code also provides that the contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided these are
not contrary to law, morals, good customs, public order or public policy.
In the present case, however, there is nothing in the subject Extrajudicial Settlement to
indicate any express stipulation for petitioner and respondents to continue with their
supposed co-ownership of the contested lot.
On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in
any way, support petitioner's contention that it was his and his sibling's intention to buy the
subject property from the Bank and continue what they believed to be co-ownership thereof.
It is a cardinal rule in the interpretation of contracts that the intention of the parties shall be
accorded primordial consideration.16 It is the duty of the courts to place a practical and
realistic construction upon it, giving due consideration to the context in which it is negotiated
and the purpose which it is intended to serve.17 Such intention is determined from the
express terms of their agreement, as well as their contemporaneous and subsequent
acts.18 Absurd and illogical interpretations should also be avoided. 19
For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his
siblings to continue what they thought was their ownership of the subject property, even
after the same had been bought by the Bank, is stretching the interpretation of the said
Extrajudicial Settlement too far.
In the first place, as earlier discussed, there is no co-ownership to talk about and no property
to partition, as the disputed lot never formed part of the estate of their deceased father.

Moreover, petitioner's asseveration of his and respondents' intention of continuing with their
supposed co-ownership is negated by no less than his assertions in the present petition that
on several occasions he had the chance to purchase the subject property back, but he refused
to do so. In fact, he claims that after the Bank acquired the disputed lot, it offered to re-sell
the same to him but he ignored such offer. How then can petitioner now claim that it was also
his intention to purchase the subject property from the Bank, when he admitted that he
refused the Bank's offer to re-sell the subject property to him?

In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the
execution thereof, the parties were not yet aware that the subject property was already
exclusively owned by the Bank. Nonetheless, the lack of knowledge on the part of petitioner
and respondents that the mortgage was already foreclosed and title to the property was
already transferred to the Bank does not give them the right or the authority to unilaterally
declare themselves as co-owners of the disputed property; otherwise, the disposition of the
case would be made to depend on the belief and conviction of the party-litigants and not on
the evidence adduced and the law and jurisprudence applicable thereto.

Furthermore, petitioner's contention that he and his siblings intended to continue their
supposed co-ownership of the subject property contradicts the provisions of the subject
Extrajudicial Settlement where they clearly manifested their intention of having the subject
property divided or partitioned by assigning to each of the petitioner and respondents a
specific 1/3 portion of the same. Partition calls for the segregation and conveyance of a
determinate portion of the property owned in common. It seeks a severance of the individual
interests of each co-owner, vesting in each of them a sole estate in a specific property and
giving each one a right to enjoy his estate without supervision or interference from the
other.20 In other words, the purpose of partition is to put an end to co-ownership, 21 an
objective which negates petitioner's claims in the present case.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals,
dated May 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED.

SO ORDERED

ART. 776
G.R. No. 179594 September 11, 2013
MANUEL UY & SONS, INC., Petitioner,
vs.
VALBUECO, INCORPORATED, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari 1 of the Court of Appeals’ Decision2 dated December
11, 2006 in CA-G.R. CV No. 85877, and its Resolution dated September 4, 2007, denying
petitioner’s motion for reconsideration.
3
The Court of Appeals reversed and set aside the Decision of the Regional Trial Court (RTC) of
Manila, Branch 1, dismissing the Complaint for specific performance and damages. The Court
of Appeals reinstated the Complaint and directed petitioner to execute deeds of absolute sale
in favor of respondent after payment of the purchase price of the subject lots.
The facts, as stated by the Court of Appeals, are as follows:
Petitioner Manuel Uy & Sons, Inc. is the registered owner of parcels of land located in Teresa,
Rizal covered by Transfer Certificate of Title(TCT) No. 59534, covering an area of about 6,119
square meters; TCT No.59445, covering an area of about 6,838 square meters; TCT No.
59446,covering an area of about 12,389 square meters; and TCT No. 59444,covering an area
of about 32,047 square meters.
On November 29, 1973, two Conditional Deeds of Sale were executed by petitioner, as
vendor, in favor of respondent Valbueco, Incorporated, as vendee. The first Conditional Deed
of Sale4 covered TCT Nos. 59534, 59445 and 59446, and contained the following terms and
conditions:
That for and in consideration of the sum of ONE HUNDREDSIXTY-FOUR THOUSAND SEVEN
HUNDRED FORTY-NINE(Php164,749.00) PESOS, Philippine currency, the VENDOR hereby
agrees to SELL, CEDE, TRANSFER and CONVEY unto the VENDEE xx x the aforementioned
properties, payable under the following terms and conditions:
1. The sum of FORTY-ONE THOUSAND ONE HUNDREDEIGHTY-SEVEN and 25/100
(Php 41,187.25) PESOS shall be paid upon signing of this conditional deed of sale;
and
2. The balance of ONE HUNDRED TWENTY-THREETHOUSAND FIVE HUNDRED SIXTY-
ONE and 75/100 (Php123,561.75) PESOS shall be paid within a period of one (1)
year from November 15, 1973, with interest of 12% per annum based on the
balance, in the mode and manner specified below:
a) January 4, 1974 – ₱16,474.90 plus interest
b) On or before May 15, 1974 – ₱53,543.43 plus interest
c) On or before November 15, 1974 – ₱53,543.32 plus interest
3. That the vendee shall be given a grace period of thirty (30)days from the due
date of any installment with corresponding interest to be added, but should the
VENDEE fail to make such payment within the grace period this contract shall be
deemed rescinded and without force and effect after notice in writing by VENDOR
to VENDEE.
4. That the VENDOR agrees to have the existing Mortgages on the properties
subject of this sale released on or before May 20, 1974.
5. That the VENDOR agrees to have the above-described properties freed and
cleared of all lessees, tenants, adverse occupants or squatters within 100 days from
the execution of this conditional deed of sale. In case of failure by the VENDOR to
comply with the undertaking provided in this paragraph and the VENDEE shall find
it necessary to file a case or cases in court to eject the said lessees, tenants,
occupants and/or squatters from the land, subject of this sale, the VENDOR agrees
to answer and pay for all the expenses incurred and to be incurred in connection
with said cases until the same are fully and finally terminated.
6. That the VENDOR and the VENDEE agree that during the existence of this
Contract and without previous expressed written permission from the other, they
shall not sell, cede, assign, transfer or mortgage, or in any way encumber unto
another person or party any right, interest or equity that they may have in and to
said parcels of land. x x x x
8. That it is understood that ownership of the properties herein conveyed shall not
pass to the VENDEE until after payment of the full purchase price; provided,
however, that the VENDOR shall allow the annotation of this Conditional Deed of
Sale at the back of the titles of the above-described parcels of land in the
corresponding Registry of Deeds x xx.
9. That upon full payment of the total purchase price, a Deed of Absolute Sale shall
be executed in favor of the VENDEE and the VENDOR agrees to pay the
documentary stamps and the science stamp tax of the Deed of Sale; while the
VENDEE agrees to pay the registration and other expenses for the issuance of a new
title.
 10. That it is mutually agreed that in case of litigation, the venue of the case shall be
in the courts of Manila, having competent jurisdiction, any other venue being
expressly waived.5
On the other hand, the second Conditional Deed of Sale6 covering Lot No. 59444 provides,
thus:
1. The sum of FIFTY-TWO THOUSAND SEVENTY-SIXAND 37/100 (Php 52,076.37)
PESOS, shall be paid upon signing of this conditional deed of sale; and
2. The balance of ONE HUNDRED FIFTY-SIXTHOUSAND TWO HUNDRED TWENTY-
NINE and 13/100 (Php156,229.13) PESOS shall be paid within a period of one (1)
year from November 15, 1973, with interest of 12% per annum based on the
balance, in the mode and manner specified below:
a) January 4, 1974 – ₱20,830.55 plus interest
b) On or before May 15, 1974 – ₱67,699.29 plus interest
c) On or before November 15, 1974, ₱67,699.29 plus interest
3. That the VENDEE shall be given a grace period of thirty (30) days from the due
date of any installment with corresponding interest to be added, but should the
VENDEE fail to make such payment within the grace period, this contract shall be
deemed rescinded and without force and effect after notice in writing by VENDOR
to VENDEE.
4. That the VENDOR agrees and acknowledges that any and all payments to be
made by the VENDEE by reason of this presents unless hereafter advised by
VENDOR to the contrary, shall be made in favor of and to the Philippine Trust
Company by way of liquidation and payment of the existing mortgage on the
property subject of this sale.
5. That after each payment adverted to above the VENDOR shall issue the
corresponding receipt for the amount paid by the VENDOR to the Philippine Trust
Company.
6. That the VENDOR agrees to have the above-described property freed and cleared
of all lessees, tenants, adverse occupants or squatters within 100 days from the
execution of this conditional deed of sale. In case of failure by the VENDOR to
comply with this undertaking provided in this paragraph and the VENDEE shall find
it necessary to file a case or cases in court to eject the said lessees, tenants,
occupants and/or squatters from the land, subject of this sale, the VENDOR agrees
to answer and pay for all the expenses incurred and to be incurred in connection
with said cases until the same are fully and finally terminated.
7. That the VENDOR and the VENDEE agree that during the existence of this
Contract and without previous expressed written permission from the other, they
shall not sell, cede, assign, transfer or mortgage, or in any way encumber unto
another person or party any right, interest or equity that they may have in and to
said parcel of land.
xxxx
9. That it is understood that ownership of the property herein conveyed shall not
pass to the VENDEE until after payment of the full purchase price, provided,
however, that the VENDOR shall allow the annotation of the Conditional Deed of
Sale at the back of the Title of the above-described parcel of land in the
corresponding Registry of Deeds; x xx.
10. That upon full payment of the total purchase price, a Deed of Absolute Sale
shall be executed in favor of the VENDEE and the VENDOR agrees to pay the
documentary stamps and the science stamp tax of the Deed of Sale; while the
VENDEE agrees to pay the registration and other expenses for the issuance of a new
title.
11. That it is mutually agreed that in case of litigation, the venue of the case shall be
in the courts of Manila, having competent jurisdiction, any other venue being
expressly waived.7
Respondent was able to pay petitioner the amount of ₱275,055.55 8 as partial payment for the
two properties corresponding to the initial payments and the first installments of the said
properties.
At the same time, petitioner complied with its obligation under the conditional deeds of sale,
as follows: (1) the mortgage for TCT No. 59446 was released on May 18, 1984, while the
mortgages for TCT Nos. 59445and 59534 were released on July 19, 1974; (2) the unlawful
occupants of the lots covered by TCT Nos. 59444, 59534, 59445 and 59446 surrendered their
possession and use of the said lots in consideration of the amount of ₱6,000.00 in a
document9 dated November 19, 1973, and they agreed to demolish their shanties on or
before December 7, 1973; and (3) the mortgage with Philippine Trust Company covering TCT
No. 59444 was discharged10 in 1984.
However, respondent suspended further payment as it was not satisfied with the manner
petitioner complied with its obligations under the conditional deeds of sale. Consequently, on
March 17, 1978, petitioner sent respondent a letter 11 informing respondent of its intention to
rescind the conditional deeds of sale and attaching therewith the original copy of the
respective notarial rescission.
On November 28, 1994, respondent filed a Complaint12 for specific performance and damages
against petitioner with the RTC of Antipolo City. However, on January 15, 1996, the case was
dismissed without prejudice13 for lack of interest, as respondent's counsel failed to attend the
pre-trial conference.
Five years later, or on March 16, 2001, respondent again filed with the RTC of Manila, Branch
1 (trial court) a Complaint14 for specific performance and damages, seeking to compel
petitioner to accept the balance of the purchase price for the two conditional deeds of sale
and to execute the corresponding deeds of absolute sale. Respondent contended that its non-
payment of the installments was due to the following reasons:(1) Petitioner refused to
receive the balance of the purchase price as the properties were mortgaged and had to be
redeemed first before a deed of absolute sale could be executed; (2) Petitioner assured that
the existing mortgages on the properties would be discharged on or before May 20,1974, or
that petitioner did not inform it (respondent) that the mortgages on the properties were
already released; and (3) Petitioner failed to fully eject the unlawful occupants in the area.
In its Answer,15 petitioner argued that the case should be dismissed, as it was barred by prior
judgment. Moreover, petitioner contended that it could not be compelled to execute any
deed of absolute sale, because respondent failed to pay in full the purchase price of the
subject lots. Petitioner claimed that it gave respondent a notice of notarial rescission of both
conditional deeds of sale that would take effect 30 days from receipt thereof. The notice of
notarial rescission was allegedly received by respondent on March 17,1978. Petitioner
asserted that since respondent failed to pay the full purchase price of the subject lots, both
conditional deeds of sale were rescinded as of April 16, 1978; hence, respondent had no
cause of action against it.
In its Reply,16 respondent denied that it received the alleged notice of notarial rescission.
Respondent also denied that the alleged recipient (one Wenna Laurenciana) 17 of the letter
dated March 17, 1978, which was attached to the notice of notarial rescission, was its
employee. Respondent stated that assuming arguendo that the notice was sent to it, the
address (6th Floor, SGC Bldg., Salcedo Street, Legaspi Village, Makati, Metro Manila) was not
the given address of respondent. Respondent contended that its address on the conditional
deeds of sale and the receipts issued by it and petitioner showed that its principal business
address was the 7th Floor, Bank of P.I. Bldg, Ayala Avenue, Makati, Rizal.
On August 1, 2005, the trial court rendered a Decision, 18 dismissing the complaint, as
petitioner had exercised its right to rescind the contracts. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the complaint is DISMISSED for lack of merit.
Claims and counterclaims for damages are also dismissed.19
The trial court stated that the issues before it were: (1) Did petitioner unlawfully evade its
obligation to execute the final deed of sale and to eject the squatters/occupants on the
properties; (2) Is the case barred by prior judgment; and (3) Does respondent have a cause of
action against petitioner.
The trial court said that both conditional deeds of sale clearly provided that "ownership x x x
shall not pass to the VENDEE until after full payment of the purchase price." Respondent
admitted that it has not yet fully paid the purchase price. The trial court held that the
conditions in the conditional deeds of sale being suspensive, that is, its fulfillment gives rise
to the obligation, the reasons for the inability of respondent to fulfill its own obligations is
material, in order that the obligation of petitioner to execute the final deeds of absolute sale
will arise. The trial court stated that the evidence showed that petitioner had exercised its
right to rescind the contract by a written notice dated March 17, 1978 and notarial acts both
dated March15, 1978. The trial court noted that respondent denied having received the
notice and disclaimed knowing the recipient, Wenna Laurenciana. However, on cross-
examination, respondent's witness, Gaudencio Juan, who used to be respondent's Personnel
Manager and Forester at the same time, admitted knowing Laurenciana because she was the
secretary of Mr. Valeriano Bueno, respondent's president at that time, although Laurenciana
was not employed by respondent, but she was employed by Mahogany Products Corporation,
presumably one of the 14 other companies being controlled by Mr. Bueno. 20
The trial court held that the conditional deeds of sale were executed on November 29, 1973
and were already covered by Republic Act (R.A.) No. 6552, otherwise known as the Realty
Installment Buyer Act. Under Section 4 of the law, if the buyer fails to pay the installments
due at the expiration of the grace period, which is not less than 60 days from the date the
installment became due, the seller may cancel the contract after 30 days from receipt of the
buyer of the notice of cancellation or the demand for rescission of the contracts by notarial
act. The trial court found no lawful ground to grant the relief prayed for and dismissed the
complaint for lack of merit.
Respondent appealed the decision of the trial court to the Court of Appeals, and made these
assignments of error: (1) the trial court erred in holding that petitioner did not unlawfully
evade executing a final deed of sale, since respondent's failure to fulfill its own obligation is
material; (2) the trial court erred in holding that it is unbelievable and a self-contradiction
that respondent was informed of the mortgage only when it was paying the balance of the
properties; and (3) the trial court erred in holding that as early as November 19, 1973,
petitioner had already taken necessary steps to evict the squatters/occupants through the
intercession of the agrarian reform officer.
On December 11, 2006, the Court of Appeals rendered a Decision, reversing and setting aside
the Decision of the trial court. It reinstated the complaint of respondent, and directed
petitioner to execute deeds of absolute sale in favor of respondent after payment of the
balance of the purchase price of the subject lots. The dispositive portion of the Decision
reads:
WHEREFORE, premises considered, the August 1, 2005Decision of the Regional Trial Court of
Manila, Branch 1, in Civil Case No. 01-100411, is hereby REVERSED and SET ASIDE.
A new one is hereby entered: REINSTATING the complaint and defendant-appellee MANUEL
UY & SONS INC. is hereby DIRECTED, pursuant to Sec. 4, R. A. No. 6552, otherwise known as
the Maceda Law, to EXECUTE and DELIVER:
 (1) Deeds of Absolute Sale in favor of VALBUECO, INC.; and
(2) Transfer Certificates of Title pertaining to Nos. 59534, 59445,59446 and 59444,
in the name of plaintiff-appellant VALBUECO, INC., after VALBUECO pays MANUEL
UY & SONS, without additional interest, within thirty days from finality of this
judgment, the balance of the contract price.
If MANUEL UY & SONS refuses to deliver the Deeds of Absolute Sale and the co-owner's copy
of the TCTs, the Register of Deeds of Antipolo, Rizal is hereby DIRECTED to CANCEL the latest
TCTs issued derived from TCT Nos. 59534, 59445, 59446 and 59444, and to
ISSUE new TCTS in the name of VALBUECO.
Only if VALBUECO fails in the payment directed above, then defendant-appellee MANUEL UY
& SONS INC. has the opportunity to serve a valid notice of notarial rescission.
SO ORDERED.21
The Court of Appeals held that the two conditional deeds of sale in this case are contracts to
sell. It stated that the law applicable to the said contracts to sell on installments is R.A. No.
6552, specifically Section 4thereof, as respondent paid less than two years in installments. It
held that upon repeated defaults in payment by respondent, petitioner had the right to
cancel the said contracts, but subject to the proper receipt of respondent of the notice of
cancellation or the demand for the rescission of the contracts by notarial act.
However, the Court of Appeals found that petitioner sent the notice of notarial rescission to
the wrong address. The business address of respondent, as used in all its transactions with
petitioner, was the 7th Floor, Bank of the Philippine Islands Building, Ayala Avenue, Makati
City, but the notice of notarial rescission was sent to the wrong address at the 6th Floor, SGC
Building, Salcedo Street, Legaspi Village, Makati, Metro Manila. Petitioner served the notice
to the address of Mahogany Products Corporation. It was established that the person who
received the notice, one Wenna Laurenciana, was an employee of Mahogany Products
Corporation and not an employee of respondent or Mr. Valeriano Bueno, the alleged
president of Mahogany Products Corporation and respondent company. 22 The appellate court
stated that this cannot be construed as to have been contructively received by respondent as
the two corporations are two separate entities with a distinct personality independent from
each other. Thus, the Court of Appeals held that the notarial rescission was in validly served.
It stated that it is a general rule that when service of notice is an issue, the person alleging
that the notice was served must prove the fact of service by a preponderance of evidence. In
this case, the Court of Appeals held that there was no evidence that the notice of cancellation
by notarial act was actually received by respondent. Thus, for petitioner's failure to cancel the
contract in accordance with the procedure provided by law, the Court of Appeals held that
the contracts to sell on installment were valid and subsisting, and respondent has the right to
offer to pay for the balance of the purchase price before actual cancellation.
Petitioner's motion for reconsideration was denied for lack of merit by the Court of Appeals in
a Resolution23 dated September 4, 2007.
Petitioner filed this petition raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED INREVERSING THE RTC DECISION AND
REINSTATING THECOMPLAINT WHEN ON ITS FACE IT HAS LONG BEENPRESCRIBED, AS IT WAS
FILED AFTER 27 YEARS AND HAS NOJURISDICTION (SIC).
II
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED ANDGRAVELY ABUSED ITS
DISCRETION IN COMPELLINGPETITIONER TO EXECUTE A FINAL DEED OF ABSOLUTE SALE EVEN
IF RESPONDENT JUDICIALLY ADMITTED ITS NON-PAYMENT OF THE BALANCE OF THE DEEDS
OF CONDITIONALSALE DUE SINCE 1974.
III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED INGRANTING THE RELIEFS PRAYED BY
RESPONDENT IN ITSCOMPLAINT FOR SPECIFIC PERFORMANCE WHEN IT WASRESPONDENT
WHO BREACHED THE CONTRACT.
IV
THE HONORABLE COURT OF APPEALS COMMITTED GRAVEINJUSTICE WHEN IT PENALIZED
PETITIONER FOR EXERCISINGITS LEGAL RIGHT AND DID NOT COMMIT AN
ACTIONABLEWRONG WHILE IT HEFTILY REWARDED RESPONDENT, WHOBREACHED THE
CONTRACT, AND ORDERED TO PAY WITHOUTINTEREST PHP 97,998.95, WHICH IS DUE SINCE
1974 UNDER THECONTRACT, FOR FOUR (4) PARCELS OF LAND (57,393 SQUAREMETERS), NOW
WORTH HUNDRED MILLIONS.
V
THE HONORABLE COURT OF APPEALS GRAVELY ERRED INANNULING THE NOTARIAL
RESCISSION WHEN THE COMPLAINT IS ONLY FOR SPECIFIC PERFORMANCE AND WAS NOT AN
ISSUE RAISED IN THE PLEADINGS OR DURING THETRIAL. 24
The main issue is whether respondent is entitled to the relief granted by the Court of
Appeals. Petitioner contends that the Court of Appeals erred in directing it to execute deeds
of absolute sale over the subject lots even if respondent admitted non-payment of the
balance of the purchase price.
As found by the Court of Appeals, the two conditional deeds of sale entered into by the
parties are contracts to sell, as they both contained a stipulation that ownership of the
properties shall not pass to the vendee until after full payment of the purchase price. In a
conditional sale, as in a contract to sell, ownership remains with the vendor and does not
pass to the vendee until full payment of the purchase price. 25 The full payment of the
purchase price partakes of a suspensive condition, and non-fulfillment of the condition
prevents the obligation to sell from arising.26To differentiate, a deed of sale is absolute when
there is no stipulation in the contract that title to the property remains with the seller until
full payment of the purchase price.
Ramos v. Heruela27 held that Articles 1191 and 1592 of the Civil Code 28 are applicable to
contracts of sale, while R.A. No. 6552 applies to contracts to sell.
The Court of Appeals correctly held that R.A. No. 6552, otherwise known as the Realty
Installment Buyer Act, applies to the subject contracts to sell. R.A. No. 6552 recognizes in
conditional sales of all kinds of real estate (industrial, commercial, residential) the right of the
seller to cancel the contract upon non-payment of an installment by the buyer, which is
simply an event that prevents the obligation of the vendor to convey title from acquiring
binding force.29
It also provides the right of the buyer on installments in case he defaults in the payment of
succeeding installments30 as follows:
Section 3. In all transactions or contracts involving the sale or financing of real estate on
installment payments, including residential condominium apartments but excluding industrial
lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight
hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-nine,
where the buyer has paid at least two years of installments, the buyer is entitled to the
following rights in case he defaults in the payment of succeeding installments:
(a) To pay, without additional interest, the unpaid installments due within the total
grace period earned by him which is hereby fixed at the rate of one month grace
period for every one year of installment payments made: Provided, That this right
shall be exercised by the buyer only once in every five years of the life of the
contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund to the buyer the cash
surrender value of the payments on the property equivalent to fifty per cent of the
total payments made, and, after five years of installments, an additional five per
cent every year but not to exceed ninety per cent of the total payments made:
Provided, That the actual cancellation of the contract shall take place after thirty
days from receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act and upon full payment of the cash
surrender value to the buyer.
Down payments, deposits or options on the contract shall be included in the computation of
the total number of installment payments made. chanrobles a law library
Sec. 4. In case where less than two years of installments were paid, the seller shall give the
buyer a grace period of not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller
may cancel the contract after thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act. 31
In this case, respondent has paid less than two years of installments; therefore, Section 4 of
R.A. No. 6552 applies.
The Court of Appeals held that even if respondent defaulted in its full payment of the
purchase price of the subject lots, the conditional deeds of sale remain valid and subsisting,
because there was no valid notice of notarial rescission to respondent, as the notice was sent
to the wrong address, that is, to Mahogany Products Corporation, and it was received by a
person employed by Mahogany Products Corporation and not the respondent. The Court of
Appeals stated that the allegation that Mahogany Products Corporation and respondent have
the same President, one Valeriano Bueno, is irrelevant and has not been actually proven or
borne by evidence. The appellate court held that there was insufficient proof that respondent
actually received the notice of notarial rescission of the conditional deeds of sale; hence, the
unilateral rescission of the conditional deeds of sale cannot be given credence.
However, upon review of the records of this case, the Court finds that respondent had been
served a notice of the notarial rescission of the conditional deeds of sale when it was
furnished with the petitioner's Answer, dated February 16, 1995, to its first Complaint filed on
November 28, 1994with the RTC of Antipolo City, which case was docketed as Civil Case
No.94-3426, but the complaint was later dismissed without prejudice on January15, 1996. 32
It appears that after respondent filed its first Complaint for specific performance and
damages with the RTC of Antipolo City on November 28,1994, petitioner filed an Answer and
attached thereto a copy of the written notice dated March 17, 1978 and copies of the notarial
acts of rescission dated March 15, 1978, and that respondent received a copy of the said
Answer with the attached notices of notarial rescission. However, to reiterate, the first
Complaint was dismissed without prejudice.
Five years after the dismissal of the first Complaint, respondent again filed this case for
specific performance and damages, this time, with the RTC of Manila. Petitioner filed an
Answer, and alleged, among others, that the case was barred by prior judgment, since
respondent filed a complaint on November 28, 1994 before the RTC of Antipolo City, Branch
73, against it (petitioner) involving the same issues and that the case, docketed as Civil Case
No. 94-3426, was dismissed on January 15, 1996 for lack of interest. Respondent filed a
Reply33 dated July 18, 2001, asserting that petitioner prayed for the dismissal of the first case
filed on November 28, 1994 (Civil Case No. 94-3426) on the ground of improper venue as the
parties agreed in the deeds of conditional sale that in case of litigation, the venue shall be in
the courts of Manila. To prove its assertion, respondent attached to its Reply a copy of
petitioner’s Answer to the first Complaint in Civil Case No. 94-3426, which Answer included
the written notice dated March 17, 1978 and two notarial acts of rescission, both dated
March 15, 1978, of the two conditional deeds of sale. Hence, respondent is deemed to have
had notice of the notarial rescission of the two conditional deeds of sale when it received
petitioner’s Answer to its first complaint filed with the RTC of Antipolo, since petitioner’s
Answer included notices of notarial rescission of the two conditional deeds of sale. The first
complaint was filed six years earlier before this complaint was filed. As stated earlier, the first
complaint was dismissed without prejudice, because respondent’s counsel failed to appear at
the pre-trial. Since respondent already received notices of the notarial rescission of the
conditional deeds of sale, together with petitioner’s Answer to the first Complaint five years
before it filed this case, it can no longer deny having received notices of the notarial
rescission in this case, as respondent admitted the same when it attached the notices of
notarial rescission to its Reply in this case. Consequently, respondent is not entitled to the
relief granted by the Court of Appeals.
Under R.A. No. 6552, the right of the buyer to refund accrues only when he has paid at least
two years of installments.34 In this case, respondent has paid less than two years of
installments; hence, it is not entitled to a refund. 35
Moreover, petitioner raises the issue of improper venue and lack of jurisdiction of the RTC of
Manila over the case. It contends that the complaint involved real properties in Antipolo City
and cancellation of titles; hence, it was improperly filed in the RTC of Manila.
Petitioner's contention lacks merit, as petitioner and respondent stipulated in both
Conditional Deeds of Sale that they mutually agreed that in case of litigation, the case shall be
filed in the courts of Manila.36
Further, petitioner contends that the action has prescribed. Petitioner points out that the
cause of action is based on a written contract; hence, the complaint should have been
brought within 10 years from the time the right of action accrues under Article 1144 of the
Civil Code. Petitioner argues that it is evident on the face of the complaint and the two
contracts of conditional sale that the cause of action accrued in 1974; yet, the complaint for
specific performance was filed after 27 years. Petitioner asserts that the action has
prescribed.
The contention is meritorious.
Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides:
Section 1. Defense and objections not pleaded. - Defenses and objections not pleaded
whether in a motion to dismiss or in the answer are deemed waived. However, when it
appears from the pleadings that the court has no jurisdiction over the subject matter, that
there is another action pending between the same parties for the same cause, or that the
action is barred by a prior judgment or by statute of limitations, the court shall dismiss the
claim.37
In Gicano v. Gegato,38 the Court held:
x x x (T)rial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties' pleadings or other facts on record show it to be indeed time-
barred; (Francisco v. Robles, Feb, 15,1954; Sison v. Mc Quaid, 50 O.G. 97; Bambao v. Lednicky,
Jan. 28, 1961;Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958;32 SCRA
529; Sinaon v. Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss
(Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative
defense (Sec. 5, Rule16), or even if the ground is alleged after judgment on the merits, as in a
motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the defense has not been
asserted at all, as where no statement thereof is found in the pleadings (Garcia v. Mathis, 100
SCRA 250;PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v.Dioso, et al., 97 Phil.
821);
or where a defendant has been declared in default (PNB v. Perez, 16 SCRA 270). What is
essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period,
be otherwise sufficiently and satisfactorily apparent on the record; either in the averments of
the plaintiff's complaint, or otherwise established by the evidence. 39
Moreover, Dino v. Court of Appeals40 held:
Even if the defense of prescription was raised for the first time on appeal in respondent's
Supplemental Motion for Reconsideration of the appellate court's decision, this does not
militate against the due process right of the petitioners. On appeal, there was no new issue of
fact that arose in connection with the question of prescription, thus it cannot be said that
petitioners were not given the opportunity to present evidence in the trial court to meet a
factual issue. Equally important, petitioners had the opportunity to oppose the defense of
prescription in their Opposition to the Supplemental Motion for Reconsideration filed in the
appellate court and in their Petition for Review in this Court. 41
In this case, petitioner raised the defense of prescription for the first time before this Court,
and respondent had the opportunity to oppose the defense of prescription in its Comment to
the petition. Hence, the Court can resolve the issue of prescription as both parties were
afforded the opportunity to ventilate their respective positions on the matter. The Complaint
shows that the Conditional Deeds of Sale were executed on November 29, 1973, and
payments were due on both Conditional Deeds of Sale on November 15, 1974. Article
114442 of the Civil Code provides that actions based upon a written contract must be brought
within ten years from the time the right of action accrues. Non-fulfillment of the obligation to
pay on the last due date, that is, on November 15, 1974, would give rise to an action by the
vendor, which date of reckoning may also apply to any action by the vendee to determine his
right under R.A. No. 6552. The vendee, respondent herein, filed this case on March 16, 2001,
which is clearly beyond the 10-year prescriptive period; hence, the action has prescribed.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals, dated December
11, 2006, in CA-G.R. CV No. 85877 and its Resolution dated September 4, 2007 are REVERSED
and SET ASIDE. The Decision of the Regional Trial Court of Manila, Branch I, dated August 1,
2005 in Civil Case No. 01-100411, dismissing the case for lack of merit, is REINSTATED.
SO ORDERED.

G.R. No. 145982 September 13, 2004
FRANK N. LIU, deceased, substituted by his surviving spouse Diana Liu, and children,
namely: Walter, Milton, Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca Liu Shui
and Pearl Liu Rodriguez,petitioners,
vs.
ALFREDO LOY, JR., TERESITA A. LOY and ESTATE OF JOSE VAÑO, respondents.
RESOLUTION
CARPIO, J.:
The Loys seek a reconsideration of the Decision dated 3 July 2003 of this Court declaring void
the deeds of sale of Lot Nos. 5 and 6 executed by Teodoro Vaño in favor of Alfredo Loy, Jr. and
Teresita Loy. We held that Lot Nos. 5 and 6 belong to Frank Liu 1 since the probate court
approved his deeds of sale in accordance with Section 8,2 Rule 89 of the Rules of Court. The
deeds of sale of the Loys lacked a valid probate court approval. As a result, we ordered the
Estate of Jose Vaño to reimburse the Loys the amounts they paid for Lot Nos. 5 and 6, with
interest at 6% annually from 4 June 1976, the date of filing of the complaint, until finality of
the decision, and 12% annually thereafter until full payment.
The Court heard the parties on oral arguments on 10 March 2004 and granted them time to
submit their memoranda. Frank Liu filed his memorandum on 29 March 2004 while the Loys
filed their memorandum on 25 March 2004 by registered mail.
The issues that the Loys raise in their motion for reconsideration are not new. The Court
already considered and discussed extensively these issues in the assailed Decision. We find no
compelling reason to reconsider the assailed Decision.
The Loys insist that the transaction between Teodoro Vaño and Benito Liu, the predecessor-
in-interest of Frank Liu, is a contract to sell. In contrast, the transactions between Teodoro
Vaño and Alfredo Loy, Jr. and Teresita A. Loy were contracts of sale. According to the Loys, the
contract to sell did not transfer ownership of Lot Nos. 5 and 6 to Benito Liu or Frank Liu
because it was only a promise to sell subject to the full payment of the consideration. On the
other hand, the contracts of sale in favor of the Loys transferred ownership, as the
conveyances were absolute.3
As we held in our Decision, a prior contract to sell made by the decedent during his lifetime
prevails over a subsequent contract of sale made by the administrator without probate court
approval. It is immaterial if the prior contract is a mere contract to sell and does not
immediately convey ownership. Frank Liu’s contract to sell became valid and effective upon
its execution and bound the estate to convey the property upon full payment of the
consideration.
It is apparent from Teodoro Vaño’s letter4 dated 16 October 1954 that the reason why Frank
Liu stopped further payments on the lots, leaving a balance of ₱1,000, was because Teodoro
Vaño could not yet transfer the titles to Benito Liu, the predecessor-in-interest of Frank Liu. It
would appear that Frank Liu and Teodoro Vaño lost contact with each other thereafter and it
was only on 25 January 1964 that Frank Liu wrote Teodoro Vaño informing the latter that he
was ready to pay the balance of the purchase price of the lots. Teodoro Vaño did not reply to
Frank Liu’s letter. On 22 April 1966, Benito Liu sold to Frank Liu the lots, including Lot Nos. 5
and 6, which Benito Liu purchased from Teodoro Vaño on 13 January 1950. Frank Liu sent
three letters dated 21 March 1968, 7 June 1968 and 29 July 1968 to Teodoro Vaño reiterating
his request for the execution of the deed of sale covering the lots in his favor but to no avail.
On 19 August 1968, Teodoro Vaño sold Lot No. 6 to Teresita Loy and on 16 December 1969,
he sold Lot No. 5 to Alfredo Loy, Jr. The sales to the Loys were made after Frank Liu offered to
pay the balance of the purchase price of the lots and after he repeatedly requested for the
execution of the deeds of sale in his favor.
The sale of the lots by Teodoro Vaño to Benito Liu was valid. The sale was made by Teodoro
Vaño on 13 January 1950 in his capacity as attorney-in-fact of Jose Vaño. The sale to Benito
Liu was made during the lifetime of Jose Vaño, not after the death of Jose Vaño who died on
28 January 1950.5 The power of attorney executed by Jose Vaño in favor of Teodoro Vaño
remained valid during the lifetime of Jose Vaño. In his letter dated 16 October 1954, Teodoro
Vaño stated that on 30 June 1954, the Supreme Court allowed the probate of the will of Jose
Vaño. Teodoro Vaño likewise mentioned in the letter that in July 1954, the Supreme Court
held that all the sales made by Teodoro Vaño of the properties of his father were legal. 6 Thus,
Benito Liu’s deed of sale in favor of Frank Liu covering the lots sold to him by Teodoro Vaño
constitutes a valid charge or claim against the estate of Jose Vaño.
The Loys reiterate their contention that Teodoro Vaño, as administrator and sole heir to the
properties, can sell the lots to them since the rights of an heir are transmitted from the
moment of death of the testator. Although a property under estate proceedings cannot be
sold without judicial approval, the Loys allege that in their case, the probate court later
approved the sales to them, thereby ratifying the sales. 7
Well-settled is the rule that an administrator needs court approval to sell estate property,
otherwise the sale is void.8Court approval of the sale of estate property is clearly required
under Rule 89 of the Rules of Court, which enumerates the instances when the court may
allow the sale or encumbrance of estate property. Section 7 of Rule 89 of the Rules of Court
even provides for the regulations for granting authority to sell, mortgage or otherwise
encumber estate property.9
More importantly, Section 9110 of Act No. 496 (Land Registration Act) and Section 8811 of
Presidential Decree No. 1529 (Property Registration Decree) specifically require court
approval for any sale of registered land by an executor or administrator.
The laws, Rules of Court, jurisprudence and regulations explicitly require court approval
before any sale of estate property by an executor or administrator can take effect. The
purpose of requiring court approval is to protect creditors. In this case, Frank Liu is a creditor,
and he is the person the law seeks to protect.

The orders of the probate court dated 19 and 23 March 1976 approving the contracts of the
Loys are void. The orders did not ratify the sales because there was already a prior order of
the probate court dated 24 February 1976 approving the sale of Lot Nos. 5 and 6 to Frank Liu.
Hence, the probate court had already lost jurisdiction over Lot Nos. 5 and 6 since the lots no
longer formed part of the Estate of Jose Vaño. In fact, the administratrix of the estate filed a
motion for reconsideration of the orders of the probate court approving the contracts of the
Loys because she already executed a deed of sale covering Lot Nos. 5 and 6 in favor of Frank
Liu.

The Loys impliedly admitted that their contracts of sale dated 19 August 1968 and 16
December 1969 were ineffective when they belatedly asked in 1976 for court approval of the
sales. If the Loys believed that their deeds of sale in 1968 and 1969 were valid, they would
not have asked for court approval in 1976. By asking for court approval, they necessarily
admitted that without court approval, the sale to them was ineffectual.

The Loys are not buyers and registrants in good faith considering that they bought from a
seller who was not a registered owner. Teodoro Vaño signed both contracts of sale but the
titles to the lots sold were in the name of "Estate of Jose Vaño." And since the titles to Lot
Nos. 5 and 6 were in name of "Estate of Jose Vaño," the Loys were on notice that court
approval was needed for the sale of estate property. The ex-parte motion for the court
approval of the sales filed by the Loys some seven or eight years after the sales transaction
reveals a less than honest actuation, prompting the administratrix to object to the court’s
approval.lawph!l.net

WHEREFORE, we DENY the motion for reconsideration.

SO ORDERED.

G.R. No. L-4275 March 23, 1909
PAULA CONDE, plaintiff-appellee,
vs.
ROMAN ABAYA, defendant-appellant.
C. Oben for appellant.
L. Joaquin for appellee.
ARELLANO, C.J.:
From the hearing of the appeal interposed by Roman Abaya in the special proceedings
brought in the Court of First Instance of La Laguna for the settlement of the intestate estate
and the distribution of the property of Casiano Abaya it appears:
I. As antecedents: that Casiano Abaya, unmarried, the son of Romualdo Abaya and Sabrina
Labadia, died on the 6th of April, 1899; that Paula Conde, as the mother of the natural
children Jose and Teopista Conde, whom the states she had by Casiano Abaya, on the 6th of
November, 1905, moved the settlement of the said intestate succession; that an
administrator having been appointed for the said estate on the 25th of November, 1905,
Roman Abaya, a son of the said Romualdo Abaya and Sabrina Labadia, the parents of the late
Casiano Abaya, came forward and opposed said appointment and claimed it for himself as
being the nearest relative of the deceased; that this was granted by the court below on the
9th of January, 1906; that on the 17th of November, 1906, Roman Abaya moved that, after
due process of law, the court declare him to be the sole heir of Casiano Abaya, to the
exclusion of all other persons, especially of Paula Conde, and to be therefore entitled to take
possession of all the property of said estate, and that it be adjudicated to him; and that on
November 22, 1906, the court ordered the publication of notices for the declaration of heirs
and distribution of the property of the estate.
II. That on the 28th of November, 1906, Paula Conde, in replying to the foregoing motion of
Roman Abaya, filed a petition wherein she stated that she acknowledged the relationship
alleged by Roman Abaya, but that she considered that her right was superior to his and
moved for a hearing of the matter, and, in consequence of the evidence that she intended to
present she prayed that she be declared to have preferential rights to the property left by
Casiano Abaya, and that the same be adjudicated to her together with the corresponding
products thereof.
III. That the trial was held, both parties presenting documentary and oral evidence, and the
court below entered the following judgment:
That the administrator of the estate of Casiano Abaya should recognize Teopista and
Jose Conde as being natural children of Casiano Abaya; that the petitioner Paula
Conde should succeed to the hereditary rights of her children with respect to the
inheritance of their deceased natural father Casiano Abaya; and therefore, it is
hereby declared that she is the only heir to the property of the said intestate estate,
to the exclusion of the administrator, Roman Abaya.
IV. That Roman Abaya excepted to the foregoing judgment, appealed to this court, and
presented the following statement of errors:
1. The fact that the court below found that an ordinary action for the acknowledgment of
natural children under articles 135 and 137 of the Civil Code, might be brought in special
probate proceedings.
2. The finding that after the death of a person claimed to be an unacknowledged natural
child, the mother of such presumed natural child, as heir to the latter, may bring an action to
enforce the acknowledgment of her deceased child in accordance with articles 135 and 137
of the Civil Code.
3. The finding in the judgment that the alleged continuos possession of the deceased children
of Paula Conde of the status of natural children of the late Casiano Abaya, has been fully
proven in these proceedings; and
4. On the hypothesis that it was proper to adjudicate the property of this intestate estate to
Paula Conde, as improperly found by the court below, the court erred in not having declared
that said property should be reserved in favor of relatives of Casiano Abaya to the third
degree, and in not having previously demanded securities from Paula Conde to guarantee the
transmission of the property to those who might fall within the reservation.
As to the first error assigned, the question is set up as to whether in special proceedings for
the administration and distribution of an intestate estate, an action might be brought to
enforce the acknowledgment of the natural child of the person from whom the inheritance is
derived, that is to say, whether one might appear as heir on the ground that he is a
recognized natural child of the deceased, not having been so recognized by the deceased
either voluntarily or compulsorily by reason of a preexisting judicial decision, but asking at the
same time that, in the special proceeding itself, he be recognized by the presumed legitimate
heirs of the deceased who claim to be entitled to the succession opened in the special
proceeding.
According to section 782 of the Code of Civil Procedure —
If there shall be a controversy before the Court of First Instance as to who the
lawful heirs of the deceased person are, or as to the distributive share to which
each person is entitled under the law, the testimony as to such controversy shall be
taken in writing by the judge, under oath, and signed by the witness. Any party in
interest whose distributive share is affected by the determination of such
controversy, may appeal from the judgment of the Court of First Instance
determining such controversy to the Supreme Court, within the time and in the
manner provided in the last preceding section.
This court has decided the present question in the manner shown in the case of Juana
Pimentel vs. Engracio Palanca (5 Phil. Rep., 436.)
The main question with regard to the second error assigned, is whether or not the mother of
a natural child now deceased, but who survived the person who, it is claimed, was his natural
father, also deceased, may bring an action for the acknowledgment of the natural filiation in
favor of such child in order to appear in his behalf to receive the inheritance from the person
who is supposed to be his natural father.
In order to decide in the affirmative the court below has assigned the following as the only
foundation:
In resolving a similar question Manresa says: "An acknowledgment can only be
demanded by the natural child and his descendants whom it shall benefit, and
should they be minors or otherwise incapacitated, such person as legally represents
them; the mother may ask it in behalf of her child so long as he is under her
authority." On this point no positive declaration has been made, undoubtedly
because it was not considered necessary. A private action is in question and the
general rule must be followed. Elsewhere the same author adds: "It may so happen
that the child dies before four years have expired after attaining majority, or that
the document supporting his petition for acknowledgment is discovered after his
death, such death perhaps occurring after his parents had died, as is supposed by
article 137, or during their lifetime. In any case such right of action shall pertain to
the descendants of the child whom the acknowledgment may interest." (See
Commentaries to arts. 135 and 137, Civil Code, Vol. I.)
The above doctrine, advanced by one of the most eminent commentators of the Civil Code,
lacks legal and doctrinal foundation. The power to transmit the right of such action by the
natural child to his descendants can not be sustained under the law, and still less to his
mother.
It is without any support in law because the rule laid down in the code is most positive,
limiting in form, when establishing the exception for the exercise of such right of action after
the death of the presumed parents, as is shown hereafter. It is not supported by any doctrine,
because up to the present time no argument has been presented, upon which even an
approximate conclusion could be based.
Although the Civil Code considerably improved the condition of recognized natural children,
granting them rights and actions that they did not possess under the former laws, they were
not, however, placed upon the same place as legitimate ones. The difference that separates
these two classes of children is still great, as proven by so many articles dealing with the
rights of the family and the succession in relation to the members thereof. It may be laid
down as legal maxim, that whatever the code does not grant to the legitimate children, or in
connection with their rights, must still less be understood as granted to recognized natural
children or in connection with their rights. There is not a single exception in its provisions.
If legitimacy is the attribute that constitutes the basis of the absolute family rights of the
child, the acknowledgment of the natural child is, among illegitimate ones, that which unites
him to the family of the father or the mother who recognized him, and affords him a
participation in the rights of the family, relatively advantageous according to whether they are
alone or whether they concur with other individuals of the family of his purely natural father
or mother.
Thus, in order to consider the spirit of the Civil Code, nothing is more logical than to establish
a comparison between an action to claim the legitimacy, and one to enforce
acknowledgment.
ART. 118. The action to claim its legitimacy may be brought by the child at any time
of its lifetime and shall be transmitted to its heirs, should it die during minority or in
a state of insanity. In such cases the heirs shall be allowed a period of five years in
which to institute the action.
The action already instituted by the child is transmitted by its death to the heirs, if it has not
lapsed before then.
ART. 137. The actions for the acknowledgment of natural children can be
instituted only during the life of the presumed parents, except in the following
cases:
1. If the father or mother died during the maturity of the child, in which case the
latter may institute the action before the expiration of the first four years of its
maturity.
2. If, after the death of the father or mother, some instrument, before unknown,
should be discovered in which the child is expressly acknowledged.
In this case the action must be instituted with the six months following the
discovery of such instrument.
On this supposition the first difference that results between one action and the other consists
in that the right of action for legitimacy lasts during the whole lifetime of the child, that is, it
can always be brought against the presumed parents or their heirs by the child itself, while
the right of action for the acknowledgment of a natural child does not last his whole lifetime,
and, as a general rule, it can not be instituted against the heirs of the presumed parents,
inasmuch as it can be exercised only during the life of the presumed parents.
With regard to the question at issue, that is, the transmission to the heirs of the presumed
parents of the obligation to admit the legitimate filiation, or to recognize the natural filiation,
there exists the most radical difference in that the former continues during the life of the
child who claims to be legitimate, and he may demand it either directly and primarily from
the said presumed parents, or indirectly and secondarily from the heirs of the latter; while
the second does not endure for life; as a general rule, it only lasts during the life of the
presumed parents. Hence the other difference, derived as a consequence, that an action for
legitimacy is always brought against the heirs of the presumed parents in case of the death of
the latter, while the action for acknowledgment is not brought against the heirs of such
parents, with the exception of the two cases prescribed by article 137 transcribed above.
So much for the passive transmission of the obligation to admit the legitimate filiation, or to
acknowledge the natural filiation.
As to the transmission to the heirs of the child of the latter's action to claim his legitimacy, or
to obtain the acknowledgment of his natural filiation, it is seen that the code grants it in the
first case, but not in the second. It contains provisions for the transmission of the right of
action which, for the purpose claiming his legitimacy inheres in the child, but it does not say a
word with regard to the transmission of the right to obtain the acknowledgment of the
natural filiation.
Therefore, the respective corollary of each of the two above-cited articles is: (1) That the right
of action which devolves upon the child to claim his legitimacy under article 118, may be
transmitted to his heirs in certain cases designated in the said article; (2) That the right of
action for the acknowledgment of natural children to which article 137 refers, can never be
transmitted, for the reason that the code makes no mention of it in any case, not even as an
exception.
It is most illogical and contrary to every rule of correct interpretation, that the right of action
to secure acknowledgment by the natural child should be presumed to be transmitted,
independently, as a rule, to his heirs, while the right of action to claim legitimacy from his
predecessor is not expressly, independently, or, as a general rule, conceded to the heirs of the
legitimate child, but only relatively and as an exception. Consequently, the pretension that
the right of action on the part of the child to obtain the acknowledgment of his natural
filiation is transmitted to his descendants is altogether unfounded. No legal provision exists to
sustain such pretension, nor can an argument of presumption be based on the lesser claim
when there is no basis for the greater one, and when it is only given as an exception in well-
defined cases. It is placing the heirs of the natural child on a better footing than the heirs of
the legitimate one, when, as a matter of fact, the position of a natural child is no better than,
no even equal to, that of a legitimate child.
From the express and precise precepts of the code the following conclusions are derived:
The right of action that devolves upon the child to claim his legitimacy lasts during his whole
life, while the right to claim the acknowledgment of a natural child lasts only during the life of
his presumed parents.
Inasmuch as the right of action accruing to the child to claim his legitimacy lasts during his
whole life, he may exercise it either against the presumed parents, or their heirs; while the
right of action to secure the acknowledgment of a natural child, since it does not last during
his whole life, but depends on that of the presumed parents, as a general rule can only be
exercised against the latter.
Usually the right of action for legitimacy devolving upon the child is of a personal character
and pertains exclusively to him, only the child may exercise it at any time during his lifetime.
As an exception, and in three cases only, it may be transmitted to the heirs of the child, to wit,
if he died during his minority, or while insane, or after action had been already instituted.
An action for the acknowledgment of a natural child may, as an exception, be exercised
against the heirs of the presumed parents in two cases: first, in the event of the death of the
latter during the minority of the child, and second, upon the discovery of some instrument of
express acknowledgment of the child, executed by the father or mother, the existence of
which was unknown during the life of the latter.
But such action for the acknowledgment of a natural child can only be exercised by him. It can
not be transmitted to his descendants, or his ascendants.
In support of the foregoing the following authorities may be cited:
Sanchez Roman, in his Treatise of Civil Law, propounds the question as to whether said action
should be considered transmissive to the heirs or descendants of the natural child, whether
he had or had not exercised it up to the time of his death, and decides it as follows:
There is an entire absence of legal provisions, and at most, it might be deemed
admissible as a solution, that the right of action to claim the acknowledgment of a
natural child is transmitted by the analogy to his heirs on the same conditions and
terms that it is transmitted to the descendants of a legitimate child, to claim his
legitimacy, under article 118, but nothing more; because on this point nothing
warrants placing the heirs of a natural child on a better footing than those of the
legitimate child, and even to compare them would not fail to be a strained and
questionable matter, and one of great difficulty for decision by the courts, for the
simple reason that for the heirs of the legitimate child, the said article 118 exists,
while for those of the natural child, as we have said, there is no provision in the
code authorizing the same, although on the other hand there is none that prohibits
it. (Vol. V.)
Diaz Guijarro and Martinez Ruiz in their work on "The Civil Code as construed by the supreme
court of Spain," commenting upon article 137, say:
Article 118, taking into account the privileges due to the legitimacy of children,
grants them the right to claim said legitimacy during their lifetime, and even
authorizes the transmission of said right for the space of five years to the heirs
thereof, if the child die during his minority or in a state of insanity. But as article 137
is based on the consideration that in the case of a natural child, ties are less strong
and sacred in the eyes of the law, it does not fix such a long and indefinite period
for the exercise of the action; it limits it to the life of the parents, excepting in the
two cases mentioned in said article; and it does not allow, as does article 118,
the action to pass on to the heirs, inasmuch as, although it does not prohibit it, and
for that reason it might be deemed on general principles of law to consent to
it, such a supposition is inadmissible for the reason that a comparison of both
 articles shows that the silence of the law in the latter case is not, nor it can be, an
omission, but a deliberate intent to establish a wide difference between the
advantages granted to a legitimate child and to a natural one.
(Ibid., Vol. II, 171.)
Navarro Amandi (Cuestionario del Código Civil) raises the question: "Can the heirs of a natural
child claim the acknowledgment in those cases wherein the father or mother are under
obligation to acknowledge"? And says:
Opinions are widely divergent. The court of Rennes held (on April 13, 1844) that the
right of investigation forms a part of the estate of the child, and along with his
patrimony is transmitted to his heirs. The affirmation is altogether too categorical to
be admissible. If it were correct the same thing would happen as when the
legitimacy of a child is claimed, and as already seen, the right of action to demand
the legitimacy is not transmitted to the heirs in every case and as an absolute right,
but under certain limitations and circumstances. Now, were we to admit the
doctrine of the court of Rennes, the result would be that the claim for natural
filiation would be more favored than one for legitimate filiation. This would be
absurd, because it can not be conceived that the legislator should have granted a
right of action to the heirs of the natural child, which is only granted under great
limitations and in very few cases to those of a legitimate one. Some persons insist
that the same rules that govern legitimate filiation apply by analogy to natural child
are entitled to claim it in the cases prescribed by the article 118. The majority,
however, are inclined to consider the right to claim acknowledgment as a personal
right, and consequently, not transmissive to the heirs. Really there are no legal
grounds to warrant the transmission. (Vol. 2, 229.)
In a decision like the present one it is impossible to bring forward the argument of analogy for
the purpose of considering that the heirs of the natural child are entitled to the right of action
which article 118 concedes to the heirs of the legitimate child. The existence of a provision for
the one case and the absence thereof for the other is a conclusive argument that inclusio
unius est exclusio alterius, and it can not be understood that the provision of law should be
the same when the same reason does not hold in the one case as in the other.
The theory of law of transmission is also entirely inapplicable in this case. This theory, which
in the Roman Law expressed the general rule than an heir who did not accept an inheritance
during his lifetime was incapacitated from transmitting it to his own heirs, included at the
same time the idea that if the inheritance was not transmitted because the heir did not
possess it, there were, however, certain things which the heir held and could transmit. Such
was the law and the right to accept the inheritance, for the existing reason that all rights,
both real and personal, shall pass to the heir; quia haeres representat defunctum in omnibus
et per omnia. According to the article 659 of the Civil Code, "the inheritance includes all the
property, rights, and obligations of a person, which are not extinguished by his death." If the
mother is the heir of her natural child, and the latter, among other rights during his lifetime
was entitled to exercise an action of his acknowledgment against his father, during the life of
the latter, if after his death in some of the excepting cases of article 137, such right, which is a
portion of his inheritance, is transmitted to his mother as being his heir, and it was so
understood by the court of Rennes when it considered the right in question, not as a personal
and exclusive right of the child which is extinguished by his death, but a any other right which
might be transmitted after his death. This right of supposed transmission is even less tenable
than that sought to be sustained by the argument of analogy.
The right of action pertaining to the child to claim his legitimacy is in all respects superior to
that of the child who claims acknowledgment as a natural child. And it is evident that the
right of action to claim his legitimacy is not one of those rights which the legitimate child may
transmit by inheritance to his heirs; it forms no part of the component rights of his
inheritance. If it were so, there would have been no necessity to establish its transmissibility
to heirs as an exception in the terms and conditions of article 118 of the code. So that, in
order that it may constitute a portion of the child's inheritance, it is necessary that the
conditions and the terms contained in article 118 shall be present, since without them, the
right that the child held during his lifetime, being personal and exclusive in principle, and
therefore, as a general rule not susceptible of transmission, would and should have been
extinguished by his death. Therefore, where no express provision like that of article 118
exists, the right of action for the acknowledgment of a natural child is, in principle and
without exception, extinguished by his death, and can not be transmitted as a portion of the
inheritance of the deceased child.
On the other hand, if said right of action formed a part of the child's inheritance, it would be
necessary to establish the doctrine that the right to claim such an acknowledgment from the
presumed natural father and from his heirs is an absolute right of the heirs of the child, not
limited by certain circumstances as in the case of the heirs of a natural child with a legitimate
one to place the heirs of a natural child and his inheritance on a better footing than those of a
legitimate child would not only be unreasonable, but, as stated in one of the above citations,
most absurd and illegal in the present state of the law and in accordance with the general
principles thereof.
For all of the foregoing reasons we hereby reverse the judgment appealed from in all its
parts, without any special ruling as to the costs of this instance.
Mapa, Johnson, Carson, and Willard, JJ., concur.
Separate Opinions
TORRES, J., dissenting:
The questions arising from the facts and points of law discussed in this litigation between the
parties thereto, decided in the judgment appealed from, and set up and discussed in this
instance by the said parties in their respective briefs, are subordinate in the first place to the
main point, submitted among others to the decision of this court, that is, whether the right of
action brought to demand from the natural father, or from his heirs, the acknowledgment of
the natural child which the former left at his death was, by operation of the law, transmitted
to the natural mother by reason of the death of the said child acknowledged by her.
The second error assigned by the appellant in his brief refers exclusively to this important
point of law.
Article 846 of the Civil Code prescribes:
The right of succession which the law grants natural children extends reciprocally in
similar cases to the natural father or mother.
Article 944 reads:
If the acknowledged natural or legitimized child should die without issue, either
legitimate or acknowledged by it, the father or mother who acknowledged it shall
succeed to its entire estate, and if both acknowledged it and are alive, they shall
inherit from it share and share alike.
It can not be inferred from the above legal provisions that from the right succession which
the law grants the natural father or mother upon the death of their natural child, the right of
heirs of any of the said parents to claim the acknowledgment of the natural child is excluded.
No article is to be found in the Civil Code that expressly provides for such exclusion or
elimination of the right of the heirs of the deceased child to claim his acknowledgment.
If under article 659 of said code, the inheritance includes all the property, rights, and
obligations of a person, which are not extinguished by his death, it is unquestionable that
among such rights stands that which the natural child had, while alive, to claim his
acknowledgment as such from his natural father, or from the heirs of the latter. There is no
reason or legal provision whatever to prevent the consideration that the right to claim
acknowledgment of the filiation of a deceased child from his natural father, or from the heirs
of the latter, is included in the hereditary succession of the deceased child in favor of his
natural mother.
It is to be regretted that such an eminent writer as Manresa is silent on this special point, or
that he is not very explicit in his comments on article 137 of the Civil Code. Among the
various noted writers on law, Professor Sanchez Roman is the only one who has given his
opinion in a categorical manner as to whether or not the right of action for the
acknowledgment of a deceased natural child shall be considered transmissive to his heirs, as
may bee seen from the following:
In order to complete the explanation of this article 137 of the Civil Code, three
points must be decided: (1) Against whom shall an action for acknowledgment be
brought under the cases and terms to which the two exceptions indicate in
paragraphs 1 and 2 of article 137 refer? (2) Who is to represent the minor in
bringing this action when neither the father nor the mother has acknowledged
him? (3) Should this right of action be considered as transmitted to the heirs or
descendants of the natural child whether or not it was exercised at the time of his
death?
With respect to the third, there is an entire absence of legal provisions, and at
most, it might be deemed admissible as a solution, that the right of action to claim
acknowledgment of a natural child is transmitted by analogy to his heirs on the
same conditions and terms that it is transmitted to the descendants of the
legitimate child, to claim his legitimacy, under article 118, but no more; because on
his point nothing warrants placing the heirs of a natural child on a better footing
than those of the legitimate child, and even to compare them would not fail to be
strained and questionable matter, and one of great difficulty for decision by the
courts, for the simple reason that for the heirs of the legitimate child the said article
118 exists, while for those of the natural child, as we have said, there is no provision
in the code authorizing the same, although on the other hand there is none that
prohibits it.
Certainly there is no article in the Civil Code, or any special law that bars the transmission to
the heirs of a natural child, particularly to his natural mother, of the right of action to claim
the acknowledgment of said natural child from the heirs of his deceased natural father.
According to the above-cited article 944 of the Civil Code, the only persons designated to
succeed to the intestate estate of a natural child who died during minority or without issue
are its natural father or mother who acknowledged it; consequently if by operation of the law
his parents are his legal successors or heirs, it is unquestionable that by reason of the child's
death the property, rights, and obligations of the deceased minor were, as a matter of fact,
transmitted to them, among which was the right to demand the acknowledgment of the said
deceased natural child from the heirs of the deceased natural father or mother, respectively,
on account of having enjoyed uninterruptedly the status of natural child of the said deceased
parents. (Arts. 135 and 136, Civil Code.)
At the death of the children, Teopista in 1902, and Jose in 1903, during their minority, and
after the death of their natural father which took place in 1899, the natural mother of the
said minors, Paula Conde, succeeded them in all of their property and rights, among which
must necessarily appear and be included the right of action to claim the acknowledgment of
said two children from the heirs of Icasiano Abaya, their deceased natural father. There is no
legal provision or precept whatever excluding such right from those which, by operation of
the law, were transmitted to the mother, Paula Conde, or expressly declaring that the said
right to claim such acknowledgment is extinguished by the death of the natural children.
It is true that, as a general rule, an action for acknowledgment can not be brought by a
surviving natural child after the death of his parents, except in the event he was a minor at
the time of the death of either of his parents, as was the case with minors Teopista and Jose
Conde, who, if living, would unquestionably be entitled to institute an action for
acknowledgment against the presumed heirs of their natural father; and as there is no law
that provides that said right is extinguished by the death of the same, and that the mother
did not inherit it from the said minors, it is also unquestionable that Paula Conde, the natural
mother and successor to the rights of said minors, is entitled to exercise the corresponding
action for acknowledgment.
If the natural mother had no right of action against the heirs of the natural father, for the
acknowledgment for her natural child, the unlimited and unconditional reciprocity
established by the article 846 of the code would neither be true nor correct. It should be
noticed that the relation of paternity and that of filiation between the above-mentioned
father and children are both natural in character; therefore, the intestate succession of the
said children of Paula Conde is governed exclusively by articles 944 and 945 of the said code.
It is true that nothing is provided by article 137 with reference to the transmission to the
natural mother of the right to claim the acknowledgment of her natural children, but, as
Sanchez Roman says, it does not expressly prohibit it; and as opposed to the silence of the
said article, we find the provisions of articles 846 and 944 of the Civil Code, which expressly
recognize the right of the natural mother to succeed her natural child, a right which is
transmitted to her by operation of law from the moment that the child ceases to exist.
The question herein does not bear upon the right of a child to claim his legitimacy, as
provided in article 118 of the code, nor is it claimed that the rights of natural children and
their mother are equal to those of legitimate ones, even by analogy.
The foundations of this opinion are based solely on the provisions of the above-mentioned
articles of the code, and I consider that they are sustainable so long as it is not positively
proven that the so often-mentioned right of action for acknowledgment is extinguished by
the death of the minor natural child, and is not transmitted to the natural mother by express
declaration or prohibition of the law, together with the property and other rights in the
intestate succession.
In view of the considerations above set forth it is my opinion that it should be held: that Paula
Conde, as the natural mother and sole heir of her children Teopista and Jose, was and is
entitled to the right to institute proceedings to obtain the acknowledgment of the latter as
natural children of the late Icasiano Abaya, from Roman Abaya, as heir and administrator of
the estate of the said Icasiano Abaya; and that the said Teopista and Jose who died during
their minority, three years after the death of their father, should be considered and
acknowledged as such natural children of the latter, for the reason that while living they
uninterruptedly enjoyed the status of his natural children. The judgment appealed from
should be affirmed without any special ruling as to costs.
With regard to the declaration that the property of the late Icasiano, which Paula Conde
might take, are of a reservable character, together with the other matter contained in the
third error assigned by the appellant to the said judgment, the writer withholds his opinion
until such time as the question may be raised between the parties in proper form.
G.R. No. L-12379 March 14, 1917
LAO HU NIU, petitioner-appellant,
vs.
THE INSULAR COLLECTOR OF CUSTOMS, respondent-appellee.
Williams, Ferrier and SyCip for appellant.
Attorney-General Avanceña for appellee.
MORELAND, J.:
This case involves the exclusion from the Philippine Islands of a Chinese woman and her
minor children. She claims to be the wife of a former resident Chinese merchant who, prior to
the attempt of the appellant to enter, died in the Philippine Islands owning property therein
and leaving as his only heirs at law and next of kin his widow, the appellant herein, and her
minor children.
The board of special inquiry refused them permission to enter and that refusal was affirmed
by the Court of First Instance of Manila. This appeal is from the action taken by the Court of
First Instance.
Counsel for appellant says in his brief that: "The question involved here is a double one: First,
as to the right of the widow and the legitimate minor children of a deceased resident Chinese
merchant to enter the Philippine Islands as such widow and children; and, second, the right
of such widow, as a merchant and the successor to her husband, to enter the said Islands and
to bring her children with her."
Counsel then says: "It would appear that the first part of the foregoing questions has been
resolved by this honorable tribunal against such right of entrance." This statement is true. We
have held in the case of Ng Hian vs. Collector of Customs (34 Phil. Rep., 248) that the widow
and minor children of a deceased Chinese merchant resident and doing business in the
Philippine Islands at the time of his death are not entitled to enter the Philippine Islands
solely by reason of such relationship. Counsel for the appellant asks us to overrule that
decision and admit the applicants in this case, setting forth with ability arguments to that
end. We must say, however, that, after a careful consideration of such arguments, we are
unable to see our way clear to overrule the former decision and accordingly decline to do so.
With regard to the second question, it may be said that it does not appear in the record of
this case that the applicant is a merchant. It appears simply that her husband was, at the time
of his death, a resident Chinese merchant doing business in the Philippine Islands, and that he
died leaving property including a mercantile business. The assumption of the appellant is that
the mere fact of the death of a merchant makes his wife and children also merchants, as it
leaves to them as heirs and next of kin a mercantile business as a part of their inheritance.
We do not believe that this necessarily follows. But if it does, the fact remains that she is not
a resident merchant. She is still outside of the Philippine Islands and has never held the status
of a resident merchant. She must, therefore, establish her right to enter as a merchant in the
first instance. This she did not do. She did not present the section six certificate which is the
only evidence upon which her right to enter can be based.
From these observations it necessarily follows that the applicant is not entitled to enter the
Philippine Islands upon the status of her deceased husband; and that when she seeks to enter
upon her own personal status she must produce the evidence which the law requires to
establish that status. Not having done this her application to enter was properly denied.

The judgment appealed from is affirmed, with costs. So ordered.


G.R. No. 113899 October 13, 1999
GREAT PACIFIC LIFE ASSURANCE CORP., petitioner,
vs.
COURT OF APPEALS AND MEDARDA V. LEUTERIO, respondents.
QUISUMBING, J.:
This petition for review, under Rule 45 of the Rules of Court, assails the Decision 1 dated May
17, 1993, of the Court of Appeals and its Resolution 2 dated January 4, 1994 in CA-G.R. CV No.
18341. The appellate court affirmed in toto the judgment of the Misamis Oriental Regional
Trial Court, Branch 18, in an insurance claim filed by private respondent against Great Pacific
Life Assurance Co. The dispositive portion of the trial court's decision reads:
8. Are you now, to the best of your knowledge, in
good health?
Answer: [x] Yes [ ] NO. 4
On November 15, 1983, Grepalife issued Certificate No. B-18558, as insurance coverage of Dr.
Leuterio, to the extent of his DBP mortgage indebtedness amounting to eighty-six thousand,
two hundred (P86,200.00) pesos.1âwphi1.nêt
On August 6, 1984, Dr. Leuterio died due to "massive cerebral hemorrhage." Consequently,
DBP submitted a death claim to Grepalife. Grepalife denied the claim alleging that Dr.
Leuterio was not physically healthy when he applied for an insurance coverage on November
15, 1983. Grepalife insisted that Dr. Leuterio did not disclose he had been suffering from
hypertension, which caused his death. Allegedly, such non-disclosure constituted
concealment that justified the denial of the claim.

WHEREFORE, judgment is rendered adjudging the defendant GREAT
PACIFIC LIFE ASSURANCE CORPORATION as insurer under its Group policy
No. G-1907, in relation to Certification B-18558 liable and ordered to pay
to the DEVELOPMENT BANK OF THE PHILIPPINES as creditor of the
insured Dr. Wilfredo Leuterio, the amount of EIGHTY SIX THOUSAND TWO
HUNDRED PESOS (P86,200.00); dismissing the claims for damages,
attorney's fees and litigation expenses in the complaint and counterclaim,
with costs against the defendant and dismissing the complaint in respect
to the plaintiffs, other than the widow-beneficiary, for lack of cause of
action. 3
The facts, as found by the Court of Appeals, are as follows:
A contract of group life insurance was executed between petitioner Great Pacific Life
Assurance Corporation (hereinafter Grepalife) and Development Bank of the Philippines
(hereinafter DBP). Grepalife agreed to insure the lives of eligible housing loan mortgagors of
DBP.
On November 11, 1983, Dr. Wilfredo Leuterio, a physician and a housing debtor of DBP
applied for membership in the group life insurance plan. In an application form, Dr. Leuterio
answered questions concerning his health condition as follows:
On October 20, 1986, the widow of the late Dr. Leuterio, respondent Medarda V. Leuterio,
filed a complaint with the Regional Trial Court of Misamis Oriental, Branch 18, against
Grepalife for "Specific Performance with Damages." 5During the trial, Dr. Hernando Mejia,
who issued the death certificate, was called to testify. Dr. Mejia's findings, based partly from
the information given by the respondent widow, stated that Dr. Leuterio complained of
headaches presumably due to high blood pressure. The inference was not conclusive because
Dr. Leuterio was not autopsied, hence, other causes were not ruled out.
On February 22, 1988, the trial court rendered a decision in favor of respondent widow and
against Grepalife. On May 17, 1993, the Court of Appeals sustained the trial court's decision.
Hence, the present petition. Petitioners interposed the following assigned errors:
1. THE LOWER COURT ERRED IN HOLDING
DEFENDANT-APPELLANT LIABLE TO THE
DEVELOPMENT BANK OF THE PHILIPPINES (DBP)
WHICH IS NOT A PARTY TO THE CASE FOR PAYMENT
OF THE PROCEEDS OF A MORTGAGE REDEMPTION
INSURANCE ON THE LIFE OF PLAINTIFF'S HUSBAND
WILFREDO LEUTERIO ONE OF ITS LOAN BORROWERS,
INSTEAD OF DISMISSING THE CASE AGAINST
DEFENDANT-APPELLANT [Petitioner Grepalife] FOR
LACK OF CAUSE OF ACTION.

7. Have you ever had, or consulted, a physician for a

2. THE LOWER COURT ERRED IN NOT DISMISSING THE
heart condition, high blood pressure, cancer, diabetes,
CASE FOR WANT OF JURISDICTION OVER THE SUBJECT
lung; kidney or stomach disorder or any other physical
OR NATURE OF THE ACTION AND OVER THE PERSON
impairment?
OF THE DEFENDANT.

Answer: No. If so give details _____________.

3. THE LOWER COURT ERRED IN ORDERING
DEFENDANT-APPELLANT TO PAY TO DBP THE
 AMOUNT OF P86,200.00 IN THE ABSENCE OF ANY
EVIDENCE TO SHOW HOW MUCH WAS THE ACTUAL
AMOUNT PAYABLE TO DBP IN ACCORDANCE WITH ITS
GROUP INSURANCE CONTRACT WITH DEFENDANT-
APPELLANT.
4. THE LOWER COURT ERRED IN HOLDING THAT
THERE WAS NO CONCEALMENT OF MATERIAL
INFORMATION ON THE PART OF WILFREDO LEUTERIO
IN HIS APPLICATION FOR MEMBERSHIP IN THE GROUP
LIFE INSURANCE PLAN BETWEEN DEFENDANT-
APPELLANT OF THE INSURANCE CLAIM ARISING FROM
THE DEATH OF WILFREDO LEUTERIO. 6
Synthesized below are the assigned errors for our resolution:
1. Whether the Court of Appeals erred in holding
petitioner liable to DBP as beneficiary in a group life
insurance contract from a complaint filed by the
widow of the decedent/mortgagor?
2. Whether the Court of Appeals erred in not finding
that Dr. Leuterio concealed that he had hypertension,
which would vitiate the insurance contract?
3. Whether the Court of Appeals erred in holding
Grepalife liable in the amount of eighty six thousand,
two hundred (P86,200.00) pesos without proof of the
actual outstanding mortgage payable by the
mortgagor to DBP.
Petitioner alleges that the complaint was instituted by the widow of Dr. Leuterio, not the real
party in interest, hence the trial court acquired no jurisdiction over the case. It argues that
when the Court of Appeals affirmed the trial court's judgment, Grepalife was held liable to
pay the proceeds of insurance contract in favor of DBP, the indispensable party who was not
joined in the suit.
To resolve the issue, we must consider the insurable interest in mortgaged properties and the
parties to this type of contract. The rationale of a group insurance policy of mortgagors,
otherwise known as the "mortgage redemption insurance," is a device for the protection of
both the mortgagee and the mortgagor. On the part of the mortgagee, it has to enter into
such form of contract so that in the event of the unexpected demise of the mortgagor during
the subsistence of the mortgage contract, the proceeds from such insurance will be applied
to the payment of the mortgage debt, thereby relieving the heirs of the mortgagor from
paying the obligation. 7 In a similar vein, ample protection is given to the mortgagor under
such a concept so that in the event of death; the mortgage obligation will be extinguished by
the application of the insurance proceeds to the mortgage indebtedness. 8 Consequently,
where the mortgagor pays the insurance premium under the group insurance policy, making
the loss payable to the mortgagee, the insurance is on the mortgagor's interest, and the
mortgagor continues to be a party to the contract. In this type of policy insurance, the
mortgagee is simply an appointee of the insurance fund, such loss-payable clause does not
make the mortgagee a party to the contract. 9
Sec. 8 of the Insurance Code provides:
Unless the policy provides, where a mortgagor of property effects
insurance in his own name providing that the loss shall be payable to the
mortgagee, or assigns a policy of insurance to a mortgagee, the insurance
is deemed to be upon the interest of the mortgagor, who does not cease
to be a party to the original contract, and any act of his, prior to the loss,
which would otherwise avoid the insurance, will have the same effect,
although the property is in the hands of the mortgagee, but any act
which, under the contract of insurance, is to be performed by the
mortgagor, may be performed by the mortgagee therein named, with the
same effect as if it had been performed by the mortgagor.
The insured private respondent did not cede to the mortgagee all his rights or interests in the
insurance, the policy stating that: "In the event of the debtor's death before his indebtedness
with the Creditor [DBP] shall have been fully paid, an amount to pay the outstanding
indebtedness shall first be paid to the creditor and the balance of sum assured, if there is any,
shall then be paid to the beneficiary/ies designated by the debtor." 10 When DBP submitted
the insurance claim against petitioner, the latter denied payment thereof, interposing the
defense of concealment committed by the insured. Thereafter, DBP collected the debt from
the mortgagor and took the necessary action of foreclosure on the residential lot of private
respondent. 11 In Gonzales La O vs. Yek Tong Lin Fire & Marine Ins. Co. 12 we held:
Insured, being the person with whom the contract was made, is primarily
the proper person to bring suit thereon. * * * Subject to some exceptions,
insured may thus sue, although the policy is taken wholly or in part for
the benefit of another person named or unnamed, and although it is
expressly made payable to another as his interest may appear or
otherwise. * * * Although a policy issued to a mortgagor is taken out for
the benefit of the mortgagee and is made payable to him, yet the
mortgagor may sue thereon in his own name, especially where the
mortgagee's interest is less than the full amount recoverable under the
policy, * * *.
And in volume 33, page 82, of the same work, we read the following:
Insured may be regarded as the real party in interest, although he has
assigned the policy for the purpose of collection, or has assigned as
collateral security any judgment he may obtain. 13
And since a policy of insurance upon life or health may pass by transfer, will or succession to
any person, whether he has an insurable interest or not, and such person may recover it
whatever the insured might have recovered, 14the widow of the decedent Dr. Leuterio may
file the suit against the insurer, Grepalife.
The second assigned error refers to an alleged concealment that the petitioner interposed as
its defense to annul the insurance contract. Petitioner contends that Dr. Leuterio failed to
disclose that he had hypertension, which might have caused his death. Concealment exists
where the assured had knowledge of a fact material to the risk, and honesty, good faith, and
fair dealing requires that he should communicate it to the assured, but he designedly and
intentionally withholds the same. 15
Petitioner merely relied on the testimony of the attending physician, Dr. Hernando Mejia, as
supported by the information given by the widow of the decedent. Grepalife asserts that Dr.
Mejia's technical diagnosis of the cause of death of Dr. Leuterio was a duly documented
hospital record, and that the widow's declaration that her husband had "possible
hypertension several years ago" should not be considered as hearsay, but as part of res
gestae.
On the contrary the medical findings were not conclusive because Dr. Mejia did not conduct
an autopsy on the body of the decedent. As the attending physician, Dr. Mejia stated that he
had no knowledge of Dr. Leuterio's any previous hospital confinement. 16 Dr. Leuterio's death
certificate stated that hypertension was only "the possible cause of death." The private
respondent's statement, as to the medical history of her husband, was due to her unreliable
recollection of events. Hence, the statement of the physician was properly considered by the
trial court as hearsay.
The question of whether there was concealment was aptly answered by the appellate court,
thus:
The insured, Dr. Leuterio, had answered in his insurance application that
he was in good health and that he had not consulted a doctor or any of
the enumerated ailments, including hypertension; when he died the
attending physician had certified in the death certificate that the former
died of cerebral hemorrhage, probably secondary to hypertension. From
this report, the appellant insurance company refused to pay the insurance
claim. Appellant alleged that the insured had concealed the fact that he
had hypertension.
Contrary to appellant's allegations, there was no sufficient proof that the
insured had suffered from hypertension. Aside from the statement of the
insured's widow who was not even sure if the medicines taken by Dr.
Leuterio were for hypertension, the appellant had not proven nor
produced any witness who could attest to Dr. Leuterio's medical history . .
. of the Philippines. Costs against petitioner.1âwphi1.nêt
xxx xxx xxx
Appellant insurance company had failed to establish that there was
concealment made by the insured, hence, it cannot refuse payment of
the claim. 17
The fraudulent intent on the part of the insured must be established to entitle the insurer to
rescind the contract.18Misrepresentation as a defense of the insurer to avoid liability is an
affirmative defense and the duty to establish such defense by satisfactory and convincing
evidence rests upon the insurer. 19 In the case at bar, the petitioner failed to clearly and
satisfactorily establish its defense, and is therefore liable to pay the proceeds of the
insurance.1âwphi1.nêt
And that brings us to the last point in the review of the case at bar. Petitioner claims that
there was no evidence as to the amount of Dr. Leuterio's outstanding indebtedness to DBP at
the time of the mortgagor's death. Hence, for private respondent's failure to establish the
same, the action for specific performance should be dismissed. Petitioner's claim is without
merit. A life insurance policy is a valued policy. 20 Unless the interest of a person insured is
susceptible of exact pecuniary measurement, the measure of indemnity under a policy of
insurance upon life or health is the sum fixed in the policy. 21 The mortgagor paid the
premium according to the coverage of his insurance, which states that:
The policy states that upon receipt of due proof of the Debtor's death
during the terms of this insurance, a death benefit in the amount of
P86,200.00 shall be paid.
In the event of the debtor's death before his indebtedness with the
creditor shall have been fully paid, an amount to pay the outstanding
indebtedness shall first be paid to the Creditor and the balance of the
Sum Assured, if there is any shall then be paid to the beneficiary/ies
designated by the debtor." 22(Emphasis omitted)
However, we noted that the Court of Appeals' decision was promulgated on May 17, 1993. In
private respondent's memorandum, she states that DBP foreclosed in 1995 their residential
lot, in satisfaction of mortgagor's outstanding loan. Considering this supervening event, the
insurance proceeds shall inure to the benefit of the heirs of the deceased person or his
beneficiaries. Equity dictates that DBP should not unjustly enrich itself at the expense of
another (Nemo cum alterius detrimenio protest). Hence, it cannot collect the insurance
proceeds, after it already foreclosed on the mortgage. The proceeds now rightly belong to Dr.
Leuterio's heirs represented by his widow, herein private respondent Medarda Leuterio.
WHEREFORE, the petition is hereby DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. CV 18341 is AFFIRMED with MODIFICATION that the petitioner is
ORDERED to pay the insurance proceeds amounting to Eighty-six thousand, two hundred
(P86,200.00) pesos to the heirs of the insured, Dr. Wilfredo Leuterio (deceased), upon
presentation of proof of prior settlement of mortgagor's indebtedness to Development Bank
SO ORDERED.

G.R. No. L-46978 October 12, 1987
ERNESTO ROBLES, petitioner,
vs.
HON. DELFIN FL. BATACAN, HON. CONRADO M. VASQUEZ, HON. JOSE B. JIMENEZ.
ATANACIO GERONIMO and BENEDICTO GERONIMO, respondents.
CRUZ, J.:
The central figure in this case is Severino Geronimo, who worked in the petitioner's land for
twenty years until 1969 and died the following year at the age of 86. The central question in
this case is the nature of the work he performed and the compensation he was supposed to
receive.
After his death, an ejectment suit was filed against his two sons by the petitioner, who
claimed they had no right to remain in his land.1 Benedicto Geronimo did not choose to
answer and so was declared in default. 2 The other defendant. Atanacio Geronimo, averred
that he was entitled to succeed his father as the petitioner's agricultural tenant in accordance
with R.A. No. 1199 and Section 9 of R.A. No. 3844.
The private respondent's position is that his father was an agricultural tenant of the
petitioner during the twenty years the former worked in the latter"s land. Hence, in
accordance with the aforementioned laws, he could remain in the petitioner"s land under the
same terms and conditions of the original tenancy share arrangement entered into between
his father and the petitioner. His share should also be P100.00 more or less per harvest every
forty days during the time he continued discharging his father"s work as his statutory
successor. 3
The petitioner, for his part, insists that Severino Geronimo was never an agricultural tenant of
his but worked merely as a watcher in his land. He did receive the sum of P100.00 every
harvest but not as his share therein for that amount was given to him as a reward for his past
services. The only work he did was watch over the petitioner"s land and make brooms out of
the fallen coconut leaves he would gather. He sold these brooms and kept the proceeds for
himself without sharing them with the petitioner. 4
After trial, the Court of Agrarian Relations * rendered judgment recognizing the defendant as
the agricultural tenant of the plaintiff and ordering the payment to him of the sum of
P12,000.00 as his tenancy share. 5 Not satisfied, the petitioner went to the Court of
Appeals, ** which affirmed the challenged decision in toto.6 The petitioner is now before us
and faults the respondent court with grave abuse of discretion for upholding the trial court.
We do not agree that the respondent court erred. On the contrary, we find that its findings
are supported by the evidence of record and in accord with the applicable law and doctrine.
Thus, on the nature of the work performed by Severino Geronimo, it quoted with approval
the conclusion of the trial court that he "was the tenant on the subject parcel for quite a time
and was recognized by Ernesto Robles as such," discharging such tasks as supervising the
harvest, cutting down bushes, clearing the land, picking up the fallen nuts, and paying the
laborers, like the coconut gatherers and huskers, from his 1/3 share. 7 This was based on the
declarations of several witnesses, 8 including the petitioner himself, and the several
documents presented by Atanacio in which his father was described by the petitioner as his
"kasama" to whom was being given his "bahagui" or share. 9
As for the private respondent's right to succeed his father, the respondent court was correct
in affirming the ruling of the trial court that, as the son of Severino Geronimo, Atanacio had
the right to take over as agricultural tenant in the petitioner"s land in accordance with R.A.
No. 1199 and R.A. No. 3844.10 Obviously, Atanacio was the only heir interested in succeeding
his father as his brother, Benedicto, had not seen fit to claim his right and in fact defaulted in
resisting the petitioner"s claims in the ejectment suit. Significantly, when in his prayer the
petitioner asks for authority to appoint the said Benedicto to succeed his father, it is
presumably as his watcher only and not as agricultural tenant. The petitioner"s consistent
claim, it should be noted, is that Severino Geronimo was not his tenant but only his watcher.
The Court gave cited due course to this petition to enable the parties to argue on the amount
of damages in view of the apparent lack of a credible basis therefor as observed by the trial
court. 11 In his memorandum, the petitioner says the basis should be the weight of the
coconut harvested and then, consistent with his main thesis, urges that no damages should
be awarded at all.12 The private respondent says that the basis should be the number of nuts
harvested and then asks that the damages be doubled.13 In his reply, realizing probably that
the matter may have gotten out of hand, the petitioner now counters that the private
respondent cannot claim an increase in the amount of damages because he has not,
providentially, appealed the same. 14 This is correct and estops the private respondent.
In La Mallorca v. Court of Appeals,15 the Court said:
The increase of the award of damages from P3,000.00 to P6,000.00 by the
Court of Appeals, however, cannot be sustained. Generally, the Appellate
Court can only pass upon the consider questions or issues raised and
argued in appellant"s brief, plaintiff did not appeal from that portion of
judgment of the trial court awarding them damages. Neither does it
appear that, as appellees to the Court of Appeals, plaintiffs have pointed
out in their brief inadequacy of the award or that the inclusion of the
figure P3,000.00 was merely a clerical error, in order that the matter may
be treated as an exception to the general rule. Thus, the court of Appeals
committed error in raising the amount for damages.
In Dy v. Kuizon, 16 we declared:
 It is a well-settled rule in this jurisdiction that whenever an appeal is taken
in a civil case, an appellee who has not himself appealed cannot obtain
from the appellate court any affirmative relief other than the ones
granted in the decision of the court below. An appellee who is not
appellant may assign errors in his brief where his purpose is to maintain
the judgment on other grounds, but he may not do so if this purpose is to
have the judgment modified or reversed for, in such a case, he must
appeal. Here, the respondent did not appeal and so it was error for the
Court of Appeals to award him a relief not granted by the lower court.

In Madrideo v. Hon. Court of Appeals, 17 our ruling was:

... whenever an appeal is taken in a civil case, an appellee who has not
appealed cannot obtain from the appellate court any affirmative relief
other than the ones granted in the decision of the court below.

The latest decision on this matter is Aguilar v. Chan,18 where the Court noted that although
the actual damages suffered by the plaintiff-appellee exceeded the amount awarded to her
by the lower court, this amount could not be increased because she had not appealed.

The trial court had the opportunity to assess the evidence first-hand and so was in the best
position to determine the factual relationship between the parties as well as the share to
which the private respondent was entitled. We do not find that the respondent court
committed grave abuse of discretion in affirming the decision of the court a quo and see no
reason to reverse it. We too affirm.

WHEREFORE, the petition is DENIED, with costs against the petitioner. This decision is
immediately executory.

SO ORDERED.

G.R. No. 121940 December 4, 2001
JESUS SAN AGUSTIN, petitioner,
vs.
HON. COURT OF APPEALS and MAXIMO MENEZ, JR., respondents.
QUISUMBING, J.:
This petition for review on certiorari seeks the reversal of the decision 1 of the Court of
Appeals dated May 19, 1995, affirming that of the Regional Trial Court in LRC Case No. R-
4659.
The relevant facts, as summarized by the CA, are as follows:
On February 11, 1974, the Government Service Insurance System (GSIS) sold to a certain
Macaria Vda. de Caiquep, a parcel of residential land with an area of 168 square meters
located in Rosario, Pasig City and denominated as Lot 13, Block 7, Pcs-5816 of the
Government Service and Insurance System Low Cost Housing Project (GSIS-LCHP). The sale is
evidenced by a Deed of Absolute Sale. 2 On February 19, 1974, the Register of Deeds of Rizal
issued in the name of Macaria Vda. de Caiquep. Transfer Certificate of Title (TCT) No. 436465
with the following encumbrance annotated at the back of the title:
This Deed of Absolute Sale is subject to the conditions enumerated below which
shall be permanent encumbrances on the property, the violation of any of which
shall entitle the vendor to cancel x x x. this Deed of Absolute Sale and reenter the
property;
The purpose of the sale be to aid the vendee in acquiring a lot for
himself/themselves and not to provide him/them with a means for speculation or
profit by a future assignment of his/their right herein acquired or the resale of the
lot through rent, lease or subletting to others of the lot and subject of this deed,
and therefore, the vendee shall not sell, convey, lease or sublease, or otherwise
encumber the property in favor of any other party within five (5) years from the
dates final and absolute ownership thereof becomes vested in the vendee, except in
cases of hereditary succession or resale in favor of the vendor:
x x x (emphasis supplied).3
A day after We issuance of TCT No. 436465, or on February 20, 1974, Macaria Vda. de
Caiquep sold the subject lot to private respondent, Maximo Menez, Jr., as evidenced by a
Deed of Absolute Sale (Exhibit "D"). 4 This deed was notarized but was not registered
immediately upon its execution in 1974 because GSIS prohibited him from registering the
same in view of the five-year prohibition to sell during the period ending in 1979.
Sometime in 1979, for being suspected as a subversive, an Arrest, Search and Seizure Order
(ASSO) was issued against private respondent. Military men ransacked his house in Cainta,
Rizal. Upon learning that he was wanted by the military, he voluntarily surrendered and was
detained for two (2) years. When released, another order for his re-arrest was issued so he
hid in Mindanao for another four (4) years or until March 1984. In December of 1990, he
discovered that the subject TCT was missing. He consulted a lawyer but the latter did not act
immediately on the matter. Upon consulting a new counsel, an Affidavit of Loss 5 was filed
with the Register of Deeds of Pasig and a certified copy 6 of TCT No. 436465 was issued.
Private respondent also declared the property for tax purposes and obtained a certification
thereof from the Assessor's Office.7
Private respondent sent notices to the registered owner at her address appearing in the title
and in the Deed of Sale. And, with his counsel, he searched for the ,registered owner in Metro
Manila and Rizal and as far as Samar, Leyte, Calbayog City, Tacloban City, and in Eastern and
Northern Samar. However, their search proved futile.
On July 8, 1992 private respondent filed a petition docketed as LRC Case No. R-4659 with the
RTC, Branch 154, Pasig, Metro Manila for the issuance of owner's duplicate copy of TCT No.
436465 to replace the lost one. To show he was the owner of the contested lot, he showed
the Deed of Absolute Sale, Exhibit "D". The petition was set for hearing and the court's order
dated July 10, 1992 was published once in Malaya, a nationally circulated newspaper in the
Philippines.8
During the hearing on September 3, 1992, only Menez and his counsel appeared. The
Register of Deeds who was not served notice, and the Office of the Solicitor General and the
Provincial Prosecutor who were notified did not attend.
On September 18, 1992, there being no opposition, Menez presented his evidence ex-parte.
The trial court granted his petition in its decision 9 dated September 30, 1992, the dispositive
portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the Registry of Deeds of Pasig,
Metro Manila, is hereby directed to issue a new Owner's Duplicate Copy of Transfer
Certificate of Title No. 436465 based on the original thereon filed in his office which
shall contain the memorandum of encumbrance and an additional memorandum of
the fact that it was issued in place of the lost duplicate and which shall, in all
respect, be entitled to like faith and credit as the original duplicate, for all legal
intents and purposes.
Issuance of new owner's duplicate copy shall be made only after this decision shall
have become final and executory. The said lost owner's duplicate is hereby declared
null and void.
Petitioner shall pay all legal fees in connection with the issuance of the new owner's
copy.
 Let copies of this Order be furnished the petitioner, the registered owner of his
given address in the title, in the deed of sale, and in the tax declaration; the Registry
of Deeds of Pasig, the Office of the Solicitor General; and the Provincial Fiscal of
Pasig, Metro Manila.
SO ORDERED.10
On October 13, 1992, herein petitioner, Jesus San Agustin, received a copy of the abovecited
decision. He-claimed this was the first time he became aware of the case of her aunt, Macaria
Vda. de Caiquep who, according to him, died sometime in 1974. Claiming that he was the
present occupant of the property and the heir of Macaria, he filed his "Motion to Reopen
Reconstitution Proceedings''11 on October 27, 1992. On December 3, 1992, RTC issued an
order denying said motion.12
Petitioner filed an appeal with the Court of Appeals, which, as earlier stated, was denied in its
decision of May 19, 1995. Petitioner moved for a reconsideration, but it was denied in a
resolution dated September 11, 1995.13
Thus, the present petition, attributing the following errors to the court a quo:
A.
THE RESPONDENT COURT GRAVELY ERRED IN HOLDING THAT LRC CASE NO. R-4659 BEING
ONLY A PETITION FOR THE ISSUANCE OF A NEW OWNER'S DUPLICATE OF TITLE, THERE IS NO
NEED OF PERSONAL NOTICE TO THE PETITIONER, THE ACTUAL POSSESSOR [WHO HAS] AND
ACTUALLY BEEN PAYING THE REAL ESTATE TAX, DESPITE PRIVATE RESPONDENT'S KNOWLEDGE
OF ACTUAL POSSESSION OF AND INTEREST OVER THE PROPERTY COVERED BY TCT NO.
436465.14
B.
RESPONDENT COURT GRAVELY ERRED IN HOLDING THAT THE SALE BETWEEN THE PRIVATE
RESPONDENT AND MACARIA VDA. DE CAIQUEP IS NOT NULL AND VOID AND UNDER ARTICLE
1409 OF THE CIVIL CODE SPECIFICALLY PARAGRAPH (7) THEREOF WHICH REFERS TO
CONTRACTS EXPRESSLY PROHIBITED OR DECLARED VOID BY LAW. 15
Considering the above assignment of errors, let us resolve the corresponding issues raised by
petitioner.
The first issue involves private respondent's alleged failure to send notice to petitioner who is
the actual possessor of the disputed lot. Stated briefly, is petitioner entitled to notice? Our
finding is in the negative.
Presidential Decree No. 1529, otherwise known as the "Property Registration Decree" is
decisive. It provides:
Sec. 109. Notice and replacement of lost duplicate certificate. — In case of loss or
theft of an owner's duplicate certificate of title, due notice under oath shall be sent
by the owner or by someone in his behalf to the Register of Deeds of the province
or city where the land lies as soon as the loss or theft is discovered. If a duplicate
certificate is lost or destroyed, or cannot be produced by a person applying for the
entry of a new certificate to him or for :the registration of any instrument, a sworn
statement of the fact of such loss or destruction may be filed by the registered
owner or other person it interest and registered.
Upon the petition of the registered owner or other person in interest, the court
may, after notice and due hearing, direct the issuance of a new duplicate certificate,
which shall contain a memorandum of the fact that it is issued in place of the lost
duplicate certificate, but shall in all respects be entitled to like faith and credit as
the original duplicate, and shall thereafter be regarded as such for all purposes of
this decree.
In Office of Court Administrator vs. Matas, A.M. No. RTJ-92-836, 247 SCRA 9, 16-17 (1995), we
held:
In the case at bar, the respective certificate of title of the properties in question on
file with the Register of Deeds are existing, and it is the owner's copy of the
certificate of title that was alleged to have been lost or destroyed. Thus, it is Section
109 of P.D. 1529 which was approved on June 11, 1978 that becomes effective and
is applicable, a reading of which shows that it is practically the same as Section 109
of Act No. 496, governing reconstitution of a duplicate certificate of title lost or
destroyed. Consequently, it is sufficient that the notice under Section 109 is sent to
the Register of Deeds and to those persons who are known to have, or appear to
have, an interest in the property as shown in the Memorandum of encumbrances at
the back of the original or transfer certificate of title on file in the office of the
Register of Deeds. From a legal standpoint, there are no other interested parties
who should be notified, except those abovementioned since they are the only ones
who may be deemed to have a claim to the property involved. A person dealing
with registered is not charged with notice of encumbrances not annotated on the
back of the title. (Emphasis supplied.)
Here, petitioner does not appear to have an interest in the property based on the
memorandum of encumbrances annotated at the back of the title. His claim, that he is an
heir (nephew) of the original owner of the lot covered by the disputed lot and the present
occupant thereof is not annotated in the said memorandum of encumbrances. Neither was
his claim entered on the Certificate of Titles in the name of their original/former owners on
file with the Register of Deeds at the time of the filing or pendency of LRC Case No. R-4659.
Clearly, petitioner is not entitled to notice.
Noteworthy is the fact that there was compliance by private respondent of the RTC's order of
publication of the petition in a newspaper of general circulation. This is sufficient notice of
the petition to the public at large.
Petitioner contends that as possessor or actual occupant of the lot in controversy, he is
entitled under the law to be notified. He relies on Alabang Development Corporation vs.
Valenzuela, G.R. No. L-54094, 116 SCRA 261, 277 (1982)) which held that in reconstitution
proceedings, courts must make sure that indispensable parties, i.e.. the actual owners and
possessors of the lands involved, are duly served with actual and personal notice of the
petition. As pointed out by the appellate court, his reliance on Alabang is misplaced because
the cause of action in that case is based on Republic Act i No. 26, entitled "An Act Providing A
Special Procedure for the Reconstitution of Torrens Certificate of Title Lost or Destroyed,"
while the present case is based on Section 109 of P.D. 1529 as above explained.
Under Republic Act No. 26, reconstitution is validly made only in case the original copy of the
certificate of title with the Register of Deeds is lost or destroyed. And if no notice of the date
of hearing of a reconstitution case is served on a possessor or one having interest in the
property involved, he is deprived of his day in court and the order of reconstitution is null and
void.16 The case at bar is not for reconstitution, but merely for replacement of lost duplicate
certificate.
On the second assigned error, petitioner contends that Exhibit "D" is null and void under
Article 1409 of the Civil Code, specifically paragraph (7), 17 because the deed of sale was
executed within the five-year prohibitory period under Commonwealth Act No. 141, as
amended, otherwise known as "The Public Land Act."18
We find petitioner's contention less than meritorious. We agree with respondent court that
the proscription under Com. Act No. 141 on sale within the 5-year restrictive period refers to
homestead lands only. Here the lot in dispute is not a homestead land, as found by the trial
and appellate courts. Said lot is owned by GSIS, under TCT No. 10028 in its proprietary
capacity.
Moreover, as far as the violation of the 5-year restrictive condition imposed by GSIS in its
contract with petitioner's predecessor-in-interest is concerned, it is the GSIS and not
petitioner who had a cause of action against private respondent. Vide the instructive case
of Sarmiento vs. Salud:
The condition that the appellees Sarmiento spouses could not resell the property
except to the People's Homesite and Housing Corporation (PHHC for short) within
the next 25 years after appellees' purchasing the lot is manifestly a condition in
favor of the PHHC, and not one in favor of the Sarmiento spouses. The condition
conferred no actionable right on appellees herein, since it operated as a restriction
upon their jus disponendi of the property they bought, and thus limited their right
of ownership. It follows that on the assumption that the mortgage to appellee Salud
and the foreclosure sale violated the condition in the Sarmiento contract, only the
PHHC was entitled to invoke the condition aforementioned, and not the
Sarmientos. The validity or invalidity of the sheriff's foreclosure sale to appellant
Salud thus violative of its right of exclusive reacquisition; but it (PHHC) also could
waive the condition and treat the sale as good, in which event, the sale can not be
assailed for breach of the condition aforestated. 19
In this case, the GSIS has not filed any action for the annulment of Exhibit "D", nor for the
forfeiture of the lot in question. In our view, the contract of sale remains valid between the
parties, unless and until annulled in the proper suit filed by the rightful party, the GSIS. For
now, the said contract of sale is binding upon the heirs of Macaria Vda. de Caiquep, including
petitioner who alleges to be one of her heirs, in line with the rule that heirs are bound by
contracts entered into by their predecessors-in-interest. 20
We are not unmindful of the social justice policy of R.A. 8291 otherwise known as
"Government Service Insurance Act of 1997" in granting housing assistance to the less-
privileged GSIS members and their dependents payable at an affordable payment
scheme.21 This is the same policy which the 5-year restrictive clause in the contract seeks to
implement by stating in the encumbrance itself annotated at the back of TCT No. 436465
that, "The purpose of the sale is to aid the vendee in acquiring a lot for himself/themselves
and not to provide him/them with a means for speculation or profit by a future assignment of
his/their right herein acquired or the resale of the lot through rent, lease or subletting to
others of the lot and subject of this deed, . . . within five (5) years from the date final and
absolute ownership thereof becomes vested in the vendee, except in cases of hereditary
succession or resale in favor of the vendor." 22 However, absent the proper action taken by the
GSIS as the original vendor referred to, the contract between petitioner's predecessor-in-
interest and private respondent deserves to be upheld. For as pointed out by said private
respondent, it is protected by the Constitution under Section 10, Article III, of the Bill of
Rights stating that, "No law impairing the obligation of contracts shall be passed." Much as
we would like to see a salutary policy triumph, that provision of the Constitution duly calls for
compliance.
More in point, however, is the fact that, following Sarmiento v. Salud,23 "Even if the
transaction between the original awardee and herein petitioner were wrongful, still, as
between themselves, the purchaser and the seller were both in pari delicto, being participes
criminis as it were." As in Sarmiento, in this case both were aware of the existence of the
stipulated condition in favor of the original seller, GSIS, yet both entered into an agreement
violating said condition and nullifying its effects. Similarly, as Acting Chief Justice JBL Reyes
concluded in Sarmiento, "Both parties being equally guilty, neither is entitled to complain
against the other. Having entered into the transaction with open eyes, and having benefited
from it, said parties should be held in estoppel to assail and annul their own deliberate acts."
WHEREFORE, the appeal is DENIED, and the decision of the respondent court is AFFIRMED.
SO ORDERED.

G.R. No. L-68053 May 7, 1990
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES,
ANTONIO YANES, ROSARIO YANES, and ILUMINADO YANES, respondents.
Francisco G. Banzon for petitioner.
Renecio R. Espiritu for private respondents.
FERNAN, C.J.:
This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth
Civil Cases Division of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV
No. 56626 entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al." affirming the decision dated
July 8, 1974 of the Court of First Instance of Negros Occidental insofar as it ordered the
petitioners to pay jointly and severally the private respondents the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia,
Negros Occidental and reversing the subject decision insofar as it awarded the sums of
P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees,
respectively and (b) the resolution of said appellate court dated May 30, 1984, denying the
motion for reconsideration of its decision.
The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B
which were originally known as Lot 773 of the cadastral survey of Murcia, Negros Occidental.
Lot 773, with an area of 156,549 square meters, was registered in the name of the heirs of
Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued on October 9,
1917 by the Register of Deeds of Occidental Negros (Exh. A).
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private
respondents, Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while
the other private respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was
survived by her child, Jovita (Jovito) Alib. 1 It is not clear why the latter is not included as a
party in this case.
Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823
as she could not attend to the other portions of the two lots which had a total area of around
twenty-four hectares. The record does not show whether the children of Felipe also
cultivated some portions of the lots but it is established that Rufino and his children left the
province to settle in other places as a result of the outbreak of World War II. According to
Estelita, from the "Japanese time up to peace time", they did not visit the parcels of land in
question but "after liberation", when her brother went there to get their share of the sugar
produced therein, he was informed that Fortunato Santiago, Fuentebella (Puentevella) and
Alvarez were in possession of Lot 773. 2
It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of
Title No. RF 2694 (29797) covering Lot 773-A with an area of 37,818 square meters. 3 TCT No.
RF 2694 describes Lot 773-A as a portion of Lot 773 of the cadastral survey of Murcia and as
originally registered under OCT No. 8804.
The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in
the name of Fortunato D. Santiago on September 6, 1938 Under TCT No. RT-2695
(28192 ). 4 Said transfer certificate of title also contains a certification to the effect that Lot
773-B was originally registered under OCT No. 8804.
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in
consideration of the sum of P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T-
19291 and T-19292 were issued in Fuentebella's name. 6
After Fuentebella's death and during the settlement of his estate, the administratrix thereof
(Arsenia R. Vda. de Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of
First Instance of Negros Occidental, a motion requesting authority to sell Lots 773-A and 773-
B. 7 By virtue of a court order granting said motion, 8 on March 24, 1958, Arsenia Vda. de
Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT
Nos. T-23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo
Alvarez. 10
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino,
namely, Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental
a complaint against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register
of Deeds of Negros Occidental for the "return" of the ownership and possession of Lots 773
and 823. They also prayed that an accounting of the produce of the land from 1944 up to the
filing of the complaint be made by the defendants, that after court approval of said
accounting, the share or money equivalent due the plaintiffs be delivered to them, and that
defendants be ordered to pay plaintiffs P500.00 as damages in the form of attorney's fees. 11
During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A,
773-B and another lot for P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos. 30919
and 30920 were issued to Siason, 13 who thereafter, declared the two lots in his name for
assessment purposes. 14
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other
plaintiffs, and assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating
that the therein plaintiffs "renounce, forfeit and quitclaims (sic) any claim, monetary or
otherwise, against the defendant Arsenia Vda. de Fuentebella in connection with the above-
entitled case." 15
On October 11, 1963, a decision was rendered by the Court of First Instance of Negros
Occidental in Civil Case No. 5022, the dispositive portion of which reads:
WHEREFORE, judgment is rendered, ordering the defendant Rosendo
Alvarez to reconvey to the plaintiffs lots Nos. 773 and 823 of the Cadastral
Survey of Murcia, Negros Occidental, now covered by Transfer Certificates
of Title Nos. T-23165 and T-23166 in the name of said defendant, and
thereafter to deliver the possession of said lots to the plaintiffs. No
special pronouncement as to costs.
SO ORDERED. 16
It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in
the aforesaid decision.
However, execution of said decision proved unsuccessful with respect to Lot 773. In his return
of service dated October 20, 1965, the sheriff stated that he discovered that Lot 773 had
been subdivided into Lots 773-A and 773-B; that they were "in the name" of Rodolfo Siason
who had purchased them from Alvarez, and that Lot 773 could not be delivered to the
plaintiffs as Siason was "not a party per writ of execution." 17
The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private
respondents (the Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros
Occidental a petition for the issuance of a new certificate of title and for a declaration of
nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo Alvarez. 18 Thereafter, the court
required Rodolfo Siason to produce the certificates of title covering Lots 773 and 823.
Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658,
not Lots 773 and 823, "in good faith and for a valuable consideration without any knowledge
of any lien or encumbrances against said properties"; that the decision in the cadastral
proceeding 19 could not be enforced against him as he was not a party thereto; and that the
decision in Civil Case No. 5022 could neither be enforced against him not only because he was
not a party-litigant therein but also because it had long become final and executory. 20 Finding
said manifestation to be well-founded, the cadastral court, in its order of September 4, 1965,
nullified its previous order requiring Siason to surrender the certificates of title mentioned
therein. 21
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in
Civil Case No. 5022. Siason opposed it. 22 In its order of September 28, 1968 in Civil Case No.
5022, the lower court, noting that the Yaneses had instituted another action for the recovery
of the land in question, ruled that at the judgment therein could not be enforced against
Siason as he was not a party in the case. 23
The action filed by the Yaneses on February 21, 1968 was for recovery of real property with
damages. 24 Named defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez,
Raymundo Alvarez and the Register of Deeds of Negros Occidental. The Yaneses prayed for
the cancellation of TCT Nos. T-19291 and 19292 issued to Siason (sic) for being null and void;
the issuance of a new certificate of title in the name of the Yaneses "in accordance with the
sheriffs return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773
to the Yaneses; and if, delivery thereof could not be effected, or, if the issuance of a new title
could not be made, that the Alvarez and Siason jointly and severally pay the Yaneses the sum
of P45,000.00. They also prayed that Siason render an accounting of the fruits of Lot 773 from
November 13, 1961 until the filing of the complaint; and that the defendants jointly and
severally pay the Yaneses moral damages of P20,000.00 and exemplary damages of
P10,000.00 plus attorney's fees of P4, 000.00. 25
In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and
773-B, having been passed upon by the court in its order of September 4, 1965, had
become res judicata and the Yaneses were estopped from questioning said order. 26 On their
part, the Alvarez stated in their answer that the Yaneses' cause of action had been "barred
by res judicata, statute of limitation and estoppel." 27
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the
properties in question thru an agent as he was then in Mexico pursuing further medical
studies, was a buyer in good faith for a valuable consideration. Although the Yaneses were
negligent in their failure to place a notice of lis pendens "before the Register of Deeds of
Negros Occidental in order to protect their rights over the property in question" in Civil Case
No. 5022, equity demanded that they recover the actual value of the land because the sale
thereof executed between Alvarez and Siason was without court approval. 28 The dispositive
portion of the decision states:
IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby
rendered in the following manner:
A. The case against the defendant Dr. Rodolfo Siason and the Register of
Deeds are (sic) hereby dismmissed,
B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez
being the legitimate children of the deceased Rosendo Alvarez are hereby
ordered to pay jointly and severally the plaintiffs the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of Murcia
Cadastre, Negros Occidental; the sum of P2,000.00 as actual damages
suffered by the plaintiff; the sum of P5,000.00 representing moral
damages and the sum of P2.000 as attorney's fees, all with legal rate of
interest from date of the filing of this complaint up to final payment.
C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the
defendants, Laura, Flora and Raymundo, all surnamed Alvarez is hereby
dismissed.
D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are
hereby ordered to pay the costs of this suit.
 SO ORDERED. 29
The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August
31, 1983 30 affirmed the lower court's decision "insofar as it ordered defendants-appellants to
pay jointly and severally the plaintiffs-appellees the sum of P20,000.00 representing the
actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees, respectively." 31 The
dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is affirmed insofar as it ordered
defendants-appellants to pay jointly and severally the plaintiffs- appellees
the sum of P20,000.00 representing the actual value of Lots Nos. 773-A
and 773-B of the cadastral survey of Murcia, Negros Occidental, and is
reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees,
respectively. No costs.
SO ORDERED. 32
Finding no cogent reason to grant appellants motion for reconsideration, said appellate court
denied the same.
Hence, the instant petition. ln their memorandum petitioners raised the following issues:
1. Whethere or not the defense of prescription and estoppel had been
timely and properly invoked and raised by the petitioners in the lower
court.
2. Whether or not the cause and/or causes of action of the private
respondents, if ever there are any, as alleged in their complaint dated
February 21, 1968 which has been docketed in the trial court as Civil Case
No. 8474 supra, are forever barred by statute of limitation and/or
prescription of action and estoppel.
3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No.
5022, supra and father of the petitioners become a privy and/or party to
the waiver (Exhibit 4-defendant Siason) in Civil Case No.
8474, supra where the private respondents had unqualifiedly and
absolutely waived, renounced and quitclaimed all their alleged rights and
interests, if ever there is any, on Lots Nos. 773-A and 773-B of Murcia
Cadastre as appearing in their written manifestation dated November 6,
1962 (Exhibits "4" Siason) which had not been controverted or even
impliedly or indirectly denied by them.
4. Whether or not the liability or liabilities of Rosendo Alvarez arising
from the sale of Lots Nos. 773-A and 773-B of Murcia Cadastre to Dr.
Rodolfo Siason, if ever there is any, could be legally passed or transmitted
by operations (sic) of law to the petitioners without violation of law and
due process . 33
The petition is devoid of merit.
As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the
Supreme Court, to review the decision in Civil Case No. 5022 ordering Alvarez to reconvey the
lots in dispute to herein private respondents. Said decision had long become final and
executory and with the possible exception of Dr. Siason, who was not a party to said case, the
decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended
when Alvarez or his heirs failed to appeal the decision against them. 34
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a
court of competent jurisdiction, so long as it remains unreversed, it should be conclusive
upon the parties and those in privity with them in law or estate. 35 As consistently ruled by
this Court, every litigation must come to an end. Access to the court is guaranteed. But there
must be a limit to it. Once a litigant's right has been adjudicated in a valid final judgment of a
competent court, he should not be granted an unbridled license to return for another try. The
prevailing party should not be harassed by subsequent suits. For, if endless litigation were to
be allowed, unscrupulous litigations will multiply in number to the detriment of the
administration of justice. 36
There is no dispute that the rights of the Yaneses to the properties in question have been
finally adjudicated in Civil Case No. 5022. As found by the lower court, from the
uncontroverted evidence presented, the Yaneses have been illegally deprived of ownership
and possession of the lots in question. 37 In fact, Civil Case No. 8474 now under review, arose
from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to
private respondents Yaneses, the same having been sold during the pendency of the case by
the petitioners' father to Dr. Siason who did not know about the controversy, there being no
lis pendens annotated on the titles. Hence, it was also settled beyond question that Dr. Siason
is a purchaser in good faith.
Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of
Dr. Siason on November 11, 1961 but in fact sustained it. The trial court ordered the heirs of
Rosendo Alvarez who lost in Civil Case No. 5022 to pay the plaintiffs (private respondents
herein) the amount of P20,000.00 representing the actual value of the subdivided lots in
dispute. It did not order defendant Siason to pay said amount. 38
As to the propriety of the present case, it has long been established that the sole remedy of
the landowner whose property has been wrongfully or erroneously registered in another's
name is to bring an ordinary action in the ordinary court of justice for reconveyance or, if the
property has passed into the hands of an innocent purchaser for value, for damages. 39 "It is
one thing to protect an innocent third party; it is entirely a different matter and one devoid of
justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his
nefarious decided As clearly revealed by the undeviating line of decisions coming from this
Court, such an undesirable eventuality is precisely sought to be guarded against." 40
The issue on the right to the properties in litigation having been finally adjudicated in Civil
Case No. 5022 in favor of private respondents, it cannot now be reopened in the instant case
on the pretext that the defenses of prescription and estoppel have not been properly
considered by the lower court. Petitioners could have appealed in the former case but they
did not. They have therefore foreclosed their rights, if any, and they cannot now be heard to
complain in another case in order to defeat the enforcement of a judgment which has longing
become final and executory.
The rule is a consequence of the progressive "depersonalization" of
patrimonial rights and duties that, as observed by Victorio Polacco has
characterized the history of these institutions. From the Roman concept
of a relation from person to person, the obligation has evolved into a
relation from patrimony to patrimony with the persons occupying only a
representative position, barring those rare cases where the obligation is
strictly personal, i.e., is contracted intuitu personae, in consideration of its
performance by a specific person and by no other.
xxx xxx xxx

Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B
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.
Such contention is untenable for 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. Thus, the pertinent provisions of the Civil Code state:
Art. 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.
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 for damages.
That petitioners did not inherit the property involved herein is of no moment because by
legal fiction, the monetary equivalent thereof devolved into the mass of their father's
hereditary estate, and we have ruled that the hereditary assets are always liable in their
totality for the payment of the debts of the estate. 42
It must, however, be made clear that petitioners are liable only to the extent of the value of
their inheritance. With this clarification and considering petitioners' admission that there are
other properties left by the deceased which are sufficient to cover the amount adjudged in
favor of private respondents, we see no cogent reason to disturb the findings and conclusions
of the Court of Appeals.

Art. 776. The inheritance includes all the property, rights and obligations WHEREFORE, subject to the clarification herein above stated, the assailed decision of the
of a person which are not extinguished by his death. Court of Appeals is hereby AFFIRMED. Costs against petitioners.

Art. 1311. Contract stake effect only between the parties, their assigns SO ORDERED.
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.

As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of
Hemady vs. Luzon Surety Co., Inc. 41

The binding effect of contracts upon the heirs of the deceased party is not
altered by the provision of 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 thus made from the state is ultimately a payment by the heirs
or distributees, since the amount of the paid claim in fact diminishes or
reduces the shares that the heirs would have been entitled to receive.

Under our law, therefore. the general rule is that a party's contractual
rights and obligations are transmissible to the successors.

G.R. No. L-33187 March 31, 1980
CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and APOLONIA ONTE, petitioners,
vs.
VIVENCIO MORETO, VICTOR MORETO, ELIGIO MORETO, MARCELO MORETO, PAULINA
MORETO, ROSARIO MORETO, MARTA MORETO, SEVERINA MENDOZA, PABLO MENDOZA,
LAZARO MENDOZA, VICTORIA TUIZA, JOSEFINA MORETO, LEANDRO MORETO and LORENZO
MENDOZA, respondents.
E.P. Caguioa for petitioners.
Benjamin C. Yatco for respondents.
GUERRERO, J.:
This is a petition for certiorari by way of appeal from the decision of the Court of Appeals 1 in
CA-G.R. No. 35962-R, entitled "Vivencio Moreto, et al., Plaintiff-Appellees vs. Cornelio
Pamplona, et al., Defendants-Appellants," affirming the decision of the Court of First Instance
of Laguna, Branch I at Biñan.
The facts, as stated in the decision appealed from, show that:
Flaviano Moreto and Monica Maniega were husband and wife. During their marriage, they
acquired adjacent lots Nos. 1495, 4545, and 1496 of the Calamba Friar Land Estate, situated
in Calamba, Laguna, containing 781-544 and 1,021 square meters respectively and covered by
certificates of title issued in the name of "Flaviano Moreto, married to Monica Maniega."
The spouses Flaviano Moreto and Monica Maniega begot during their marriage six (6)
children, namely, Ursulo, Marta, La Paz, Alipio, Pablo, and Leandro, all surnamed Moreto.
Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs herein plaintiffs Vivencio,
Marcelo, Rosario, Victor, Paulina, Marta and Eligio, all surnamed Moreto.
Marta Moreto died also intestate on April 30, 1938 leaving as her heir plaintiff Victoria Tuiza.
La Paz Moreto died intestate on July 17, 1954 leaving the following heirs, namely, herein
plaintiffs Pablo, Severina, Lazaro, and Lorenzo, all surnamed Mendoza.
Alipio Moreto died intestate on June 30, 1943 leaving as his heir herein plaintiff Josefina
Moreto.
Pablo Moreto died intestate on April 25, 1942 leaving no issue and as his heirs his brother
plaintiff Leandro Moreto and the other plaintiffs herein.
On May 6, 1946, Monica Maniega died intestate in Calamba, Laguna.
On July 30, 1952, or more than six (6) years after the death of his wife Monica Maniega,
Flaviano Moreto, without the consent of the heirs of his said deceased wife Monica, and
before any liquidation of the conjugal partnership of Monica and Flaviano could be effected,
executed in favor of Geminiano Pamplona, married to defendant Apolonia Onte, the deed of
absolute sale (Exh. "1") covering lot No. 1495 for P900.00. The deed of sale (Exh. "1")
contained a description of lot No. 1495 as having an area of 781 square meters and covered
by transfer certificate of title No. 14570 issued in the name of Flaviano Moreto, married to
Monica Maniega, although the lot was acquired during their marriage. As a result of the sale,
the said certificate of title was cancelled and a new transfer certificate of title No. T-5671 was
issued in the name of Geminiano Pamplona married to Apolonia Onte (Exh. "A").
After the execution of the above-mentioned deed of sale (Exh. "1"), the spouses Geminiano
Pamplona and Apolonia Onte constructed their house on the eastern part of lot 1496 as
Flaviano Moreto, at the time of the sale, pointed to it as the land which he sold to Geminiano
Pamplona. Shortly thereafter, Rafael Pamplona, son of the spouses Geminiano Pamplona and
Apolonia Onte, also built his house within lot 1496 about one meter from its boundary with
the adjoining lot. The vendor Flaviano Moreto and the vendee Geminiano Pamplona thought
all the time that the portion of 781 square meters which was the subject matter of their sale
transaction was No. 1495 and so lot No. 1495 appears to be the subject matter in the deed of
sale (Exh. "1") although the fact is that the said portion sold thought of by the parties to be
lot No. 1495 is a part of lot No. 1496.
From 1956 to 1960, the spouses Geminiano Pamplona and Apolonio Onte enlarged their
house and they even constructed a piggery corral at the back of their said house about one
and one-half meters from the eastern boundary of lot 1496.
On August 12, 1956, Flaviano Moreto died intestate. In 1961, the plaintiffs demanded on the
defendants to vacate the premises where they had their house and piggery on the ground
that Flaviano Moreto had no right to sell the lot which he sold to Geminiano Pamplona as the
same belongs to the conjugal partnership of Flaviano and his deceased wife and the latter
was already dead when the sale was executed without the consent of the plaintiffs who are
the heirs of Monica. The spouses Geminiano Pamplona and Apolonia Onte refused to vacate
the premises occupied by them and hence, this suit was instituted by the heirs of Monica
Maniega seeking for the declaration of the nullity of the deed of sale of July 30, 1952 above-
mentioned as regards one-half of the property subject matter of said deed; to declare the
plaintiffs as the rightful owners of the other half of said lot; to allow the plaintiffs to redeem
the one-half portion thereof sold to the defendants. "After payment of the other half of the
purchase price"; to order the defendants to vacate the portions occupied by them; to order
the defendants to pay actual and moral damages and attorney's fees to the plaintiffs; to order
the defendants to pay plaintiffs P120.00 a year from August 1958 until they have vacated the
premises occupied by them for the use and occupancy of the same.
The defendants claim that the sale made by Flaviano Moreto in their favor is valid as the lot
sold is registered in the name of Flaviano Moreto and they are purchasers believing in good
faith that the vendor was the sole owner of the lot sold.
After a relocation of lots 1495, 1496 and 4545 made by agreement of the parties, it was
found out that there was mutual error between Flaviano Moreto and the defendants in the
execution of the deed of sale because while the said deed recited that the lot sold is lot No.
1495, the real intention of the parties is that it was a portion consisting of 781 square meters
of lot No. 1496 which was the subject matter of their sale transaction.
After trial, the lower court rendered judgment, the dispositive part thereof being as follows:
WHEREFORE, judgment is hereby rendered for the plaintiffs declaring the
deed of absolute sale dated July 30, 1952 pertaining to the eastern
portion of Lot 1496 covering an area of 781 square meters null and void
as regards the 390.5 square meters of which plaintiffs are hereby declared
the rightful owners and entitled to its possession.
The sale is ordered valid with respect to the eastern one-half (1/2) of
1781 square meters of Lot 1496 measuring 390.5 square meters of which
defendants are declared lawful owners and entitled to its possession.
After proper survey segregating the eastern one-half portion with an area
of 390.5 square meters of Lot 1496, the defendants shall be entitled to a
certificate of title covering said portion and Transfer Certificate of Title
No. 9843 of the office of the Register of Deeds of Laguna shall be
cancelled accordingly and new titles issued to the plaintiffs and to the
defendants covering their respective portions.
Transfer Certificate of Title No. 5671 of the office of the Register of Deeds
of Laguna covering Lot No. 1495 and registered in the name of Cornelio
Pamplona, married to Apolonia Onte, is by virtue of this decision ordered
cancelled. The defendants are ordered to surrender to the office of the
Register of Deeds of Laguna the owner's duplicate of Transfer Certificate
of Title No. 5671 within thirty (30) days after this decision shall have
become final for cancellation in accordance with this decision.
Let copy of this decision be furnished the Register of Deeds for the
province of Laguna for his information and guidance.
With costs against the defendants. 2
The defendants-appellants, not being satisfied with said judgment, appealed to the Court of
Appeals, which affirmed the judgment, hence they now come to this Court.
The fundamental and crucial issue in the case at bar is whether under the facts and
circumstances duly established by the evidence, petitioners are entitled to the full ownership
of the property in litigation, or only one-half of the same.
There is no question that when the petitioners purchased the property on July 30, 1952 from
Flaviano Moreto for the price of P900.00, his wife Monica Maniega had already been dead six
years before, Monica having died on May 6, 1946. Hence, the conjugal partnership of the
spouses Flaviano Moreto and Monica Maniega had already been dissolved. (Article 175, (1)
New Civil Code; Article 1417, Old Civil Code). The records show that the conjugal estate had
not been inventoried, liquidated, settled and divided by the heirs thereto in accordance with
law. The necessary proceedings for the liquidation of the conjugal partnership were not
instituted by the heirs either in the testate or intestate proceedings of the deceased spouse
pursuant to Act 3176 amending Section 685 of Act 190. Neither was there an extra-judicial
partition between the surviving spouse and the heirs of the deceased spouse nor was an
ordinary action for partition brought for the purpose. Accordingly, the estate became the
property of a community between the surviving husband, Flaviano Moreto, and his children
with the deceased Monica Maniega in the concept of a co-ownership.
The community property of the marriage, at the dissolution of this bond
by the death of one of the spouses, ceases to belong to the legal
partnership and becomes the property of a community, by operation of
law, between the surviving spouse and the heirs of the deceased spouse,
or the exclusive property of the widower or the widow, it he or she be the
heir of the deceased spouse. Every co-owner shall have full ownership of
his part and in the fruits and benefits derived therefrom, and he therefore
may alienate, assign or mortgage it, and even substitute another person
in its enjoyment, unless personal rights are in question. (Marigsa vs.
Macabuntoc, 17 Phil. 107)
In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said that "(t)here is no reason in
law why the heirs of the deceased wife may not form a partnership with the surviving
husband for the management and control of the community property of the marriage and
conceivably such a partnership, or rather community of property, between the heirs and the
surviving husband might be formed without a written agreement." In Prades vs. Tecson, 49
Phil. 230, the Supreme Court held that "(a)lthough, when the wife dies, the surviving
husband, as administrator of the community property, has authority to sell the property
withut the concurrence of the children of the marriage, nevertheless this power can be
waived in favor of the children, with the result of bringing about a conventional ownership in
common between the father and children as to such property; and any one purchasing with
knowledge of the changed status of the property will acquire only the undivided interest of
those members of the family who join in the act of conveyance.
It is also not disputed that immediately after the execution of the sale in 1952, the vendees
constructed their house on the eastern part of Lot 1496 which the vendor pointed out to
them as the area sold, and two weeks thereafter, Rafael who is a son of the vendees, also
built his house within Lot 1496. Subsequently, a cemented piggery coral was constructed by
the vendees at the back of their house about one and one-half meters from the eastern
boundary of Lot 1496. Both vendor and vendees believed all the time that the area of 781 sq.
meters subject of the sale was Lot No. 1495 which according to its title (T.C.T. No. 14570)
contains an area of 781 sq. meters so that the deed of sale between the parties Identified and
described the land sold as Lot 1495. But actually, as verified later by a surveyor upon
agreement of the parties during the proceedings of the case below, the area sold was within
Lot 1496.
Again, there is no dispute that the houses of the spouses Cornelio Pamplona and Apolonia
Onte as well as that of their son Rafael Pamplona, including the concrete piggery coral
adjacent thereto, stood on the land from 1952 up to the filing of the complaint by the private
respondents on July 25, 1961, or a period of over nine (9) years. And during said period, the
private respondents who are the heirs of Monica Maniega as well as of Flaviano Moreto who
also died intestate on August 12, 1956, lived as neighbors to the petitioner-vendees, yet lifted
no finger to question the occupation, possession and ownership of the land purchased by the
Pamplonas, so that We are persuaded and convinced to rule that private respondents are in
estoppel by laches to claim half of the property, in dispute as null and void. Estoppel by laches
is a rule of equity which bars a claimant from presenting his claim when, by reason of
abandonment and negligence, he allowed a long time to elapse without presenting the same.
(International Banking Corporation vs. Yared, 59 Phil. 92)
We have ruled that at the time of the sale in 1952, the conjugal partnership was already
dissolved six years before and therefore, the estate became a co-ownership between Flaviano
Moreto, the surviving husband, and the heirs of his deceased wife, Monica Maniega. Article
493 of the New Civil Code is applicable and it provides a follows:
Art. 493. Each co-owner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involve. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the division upon
the termination of the co-ownership.
We agree with the petitioner that there was a partial partition of the co-ownership when at
the time of the sale Flaviano Moreto pointed out the area and location of the 781 sq. meters
sold by him to the petitioners-vendees on which the latter built their house and also that
whereon Rafael, the son of petitioners likewise erected his house and an adjacent coral for
piggery.
Petitioners point to the fact that spouses Flaviano Moreto and Monica Maniega owned three
parcels of land denominated as Lot 1495 having an area of 781 sq. meters, Lot 1496 with an
area of 1,021 sq. meters, and Lot 4545 with an area of 544 sq. meters. The three lots have a
total area of 2,346 sq. meters. These three parcels of lots are contiguous with one another as
each is bounded on one side by the other, thus: Lot 4545 is bounded on the northeast by Lot
1495 and on the southeast by Lot 1496. Lot 1495 is bounded on the west by Lot 4545. Lot
1496 is bounded on the west by Lot 4545. It is therefore, clear that the three lots constitute
one big land. They are not separate properties located in different places but they abut each
other. This is not disputed by private respondents. Hence, at the time of the sale, the co-
ownership constituted or covered these three lots adjacent to each other. And since Flaviano
Moreto was entitled to one-half pro-indiviso of the entire land area or 1,173 sq. meters as his
share, he had a perfect legal and lawful right to dispose of 781 sq. meters of his share to the
Pamplona spouses. Indeed, there was still a remainder of some 392 sq. meters belonging to
him at the time of the sale.
We reject respondent Court's ruling that the sale was valid as to one-half and invalid as to the
other half for the very simple reason that Flaviano Moreto, the vendor, had the legal right to
more than 781 sq. meters of the communal estate, a title which he could dispose, alienate in
favor of the vendees-petitioners. The title may be pro-indiviso or inchoate but the moment
the co-owner as vendor pointed out its location and even indicated the boundaries over
which the fences were to be erectd without objection, protest or complaint by the other co-
owners, on the contrary they acquiesced and tolerated such alienation, occupation and
possession, We rule that a factual partition or termination of the co-ownership, although
partial, was created, and barred not only the vendor, Flaviano Moreto, but also his heirs, the
private respondents herein from asserting as against the vendees-petitioners any right or title
in derogation of the deed of sale executed by said vendor Flaiano Moreto.
Equity commands that the private respondents, the successors of both the deceased spouses,
Flaviano Moreto and Monica Maniega be not allowed to impugn the sale executed by
Flaviano Moreto who indisputably received the consideration of P900.00 and which he,
including his children, benefitted from the same. Moreover, as the heirs of both Monica
Maniega and Flaviano Moreto, private respondents are duty-bound to comply with the
provisions of Articles 1458 and 1495, Civil Code, which is the obligation of the vendor of the
property of delivering and transfering the ownership of the whole property sold, which is
transmitted on his death to his heirs, the herein private respondents. The articles cited
provide, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing,
and the other part to pay therefore a price certain in money or its
equivalent.
A contract of sale may be absolute or conditionial.
Art. 1495. The vendor is bound to transfer the ownership of and deliver,
as well as warrant the thing which is the object of the sale.
Under Article 776, New Civil Code, the inheritance which private respondents received from
their deceased parents and/or predecessors-in-interest included all the property rights and
obligations which were not extinguished by their parents' death. And under Art. 1311,
paragraph 1, New Civil Code, the contract of sale executed by the deceased Flaviano Moreto
took effect between the parties, their assigns and heirs, who are the private respondents
herein. Accordingly, to the private respondents is transmitted the obligation to deliver in full
ownership the whole area of 781 sq. meters to the petitioners (which was the original
obligation of their predecessor Flaviano Moreto) and not only one-half thereof. Private
respondents must comply with said obligation.
The records reveal that the area of 781 sq. meters sold to and occupied by petitioners for
more than 9 years already as of the filing of the complaint in 1961 had been re-surveyed by
private land surveyor Daniel Aranas. Petitioners are entitled to a segregation of the area from
Transfer Certificate of Title No. T-9843 covering Lot 1496 and they are also entitled to the
issuance of a new Transfer Certificate of Title in their name based on the relocation survey.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED
with modification in the sense that the sale made and executed by Flaviano Moreto in favor
of the petitioners-vendees is hereby declared legal and valid in its entirely.

Petitioners are hereby declared owners in full ownership of the 781 sq. meters at the eastern
portion of Lot 1496 now occupied by said petitioners and whereon their houses and piggery
coral stand.

The Register of Deeds of Laguna is hereby ordered to segregate the area of 781 sq. meters
from Certificate of Title No. 9843 and to issue a new Transfer Certificate of Title to the
petitioners covering the segregated area of 781 sq. meters.

No costs.

G.R. No. L-44837 November 23, 1938
SOCORRO LEDESMA and ANA QUITCO LEDESMA, plaintiffs-appellees,
vs.
CONCHITA MCLACHLIN, ET AL., defendants-appellants.
Adriano T. de la Cruz for appellants.
Simeon Bitanga for appellees.
VILLA-REAL, J.:
This case is before us by virtue of an appeal taken by the defendants Conchita McLachlin,
Lorenzo Quitco, Jr., Sabina Quitco, Rafael Quitco and Marcela Quitco, from the decision of the
Court of First Instance of Occidental Negros, the dispositive part of which reads:
For the foregoing considerations, the court renders judgment in this case declaring
Ana Quitco Ledesma an acknowledged natural daughter of the deceased Lorenzo
M. Quitco, for legal purposes, but absolving the defendants as to the prayer in the
first cause of action that the said Ana Quitco Ledesma be declared entitled to share
in the properties left by the deceased Eusebio Quitco.
As to the second cause of action, the said defendants are ordered to pay to the
plaintiff Socorro Ledesma, jointly and severally, only the sum of one thousand five
hundred pesos(P1,500), with legal interest thereon from the filing of this complaint
until fully paid. No pronouncement is made as to the costs. So ordered.
In support of their appeal, the appellants assign the following errors allegedly committed by
the trial court in its aforesaid decision:
1. That the trial court erred in holding, that the action for the recovery of the sum
of P1,500, representing the last installment of the note Exhibit C has not yet
prescribed.
2. That the trial court erred in holding that the property inherited by the defendants
from their deceased grandfather by the right of representation is subject to the
debts and obligations of their deceased father who died without any property
whatsoever.lawphi1.net
3. That the trial court erred in condemning the defendants to pay jointly and
severally the plaintiff Socorro Ledesma the sum of P1,500.
The only facts to be considered in the determination of the legal questions raised in this
appeal are those set out in the appealed decision, which have been established at the trial,
namely:
In the year 1916, the plaintiff Socorro Ledesma lived maritally with Lorenzo M.
Quitco, while the latter was still single, of which relation, lasting until the year 1921,
was born a daughter who is the other plaintiff Ana Quitco Ledesma. In 1921, it
seems hat the relation between Socorro Ledesma and Lorenzo M. Quitco came to
an end, but the latter executed a deed (Exhibit A), acknowledging the plaintiff Ana
Quitco Ledesma as his natural daughter and on January 21, 1922, he issued in favor
of the plaintiff Socorro Ledesma a promissory note (Exhibit C), of the following
tenor:
P2,000. For value received I promise to pay Miss Socorro Ledesma the sum of two
thousand pesos (P2,000). Philippine currency under the following terms: Two
hundred and fifty pesos (P250) to be paid on the first day of March 1922; another
two hundred and fifty pesos (P250)to be paid on the first day of November
1922; the remaining one thousand and five hundred (P1,500) to be paid two years
from the date of the execution of this note. San Enrique, Occ. Negros, P. I., Jan. 21,
1922.
Subsequently, Lorenzo M. Quitco married the defendant Conchita McLachlin, with
whom he had four children, who are the other defendants. On March 9, 1930,
Lorenzo M. Quitco died (Exhibit 5), and, still later, that is, on December 15, 1932, his
father Eusebio Quitco also died, and as the latter left real and personal properties
upon his death, administration proceedings of said properties were instituted in this
court, the said case being known as the "Intestate of the deceased Eusebio Quitco,"
civil case No. 6153 of this court.
Upon the institution of the intestate of the deceased Eusebio Quitco and the
appointment of the committee on claims and appraisal, the plaintiff Socorro
Ledesma, on August 26, 1935, filed before said committee the aforequoted
promissory note for payment, and the commissioners, upon receipt of said
promissory note, instead of passing upon it, elevated the same to this court en
consulta (Exhibit F), and as the Honorable Jose Lopez Vito, presiding over the First
Branch, returned said consulta and refrained from giving his opinion thereon
(Exhibit C), the aforesaid commissioners on claims and appraisal, alleging lack of
jurisdiction to pass upon the claim, denied he same (Exhibit H).
On November 14, 1933 (Exhibit I), the court issued an order of declaration of
heirs in the intestate of the deceased Eusebio Quitco, and as Ana Quitco Ledesma
was not included among the declared heirs, Socorro Ledesma, as mother of Ana
Quitco Ledesma, asked for the reconsideration of said order, a petition which the
court denied. From the order denying the said petition no appeal was taken, and in
lieu thereof there was filed the complaint which gives rise to this case.
The first question to be decided in this appeal, raised in the first assignment of alleged error, his father, and the propertiesinherited from the latter by the children of said deceased do not
is whether or not the action to recover the sum of P1,500, representing the last installment answer for the payment of the indebtedness contracted during the lifetime of said person.
for the payment of the promissory note Exhibit C, has prescribed.
Wherefore, the appealed judgment is reversed, and the defendants are absolved from the
According to the promissory note Exhibit C, executed by the deceased Lorenzo M. Quitco, on complaint, with the costs to the appellees. So ordered.
January 21, 1922, the last installment of P1,500 should be paid two years from the date of the
execution of said promissory note, that is, on January 21, 1924. The complaint in the present
case was filed on June 26, 1934, that is, more than ten years after he expiration of the said
period. The fact that the plaintiff Socorro Ledesma filed her claim, on August 26, 1933, with
the committee on claims and appraisal appointed in the intestate of Eusebio Quitco, does not
suspend the running of the prescriptive period of the judicial action for the recovery of said
debt, because the claim for the unpaid balance of the amount of the promissory note should
no have been presented in the intestate of Eusebio Quitco, the said deceased not being the
one who executed the same, but in the intestate of Lorenzo M. Quitco, which should have
been instituted by the said Socorro Ledesma as provided in section 642 of the Code of Civil
Procedure, authorizing a creditor to institute said case through the appointment of an
administrator for the purpose of collecting his credit. More than ten years having thus
elapsed from the expiration of the period for the payment of said debt of P1,500, the action
for its recovery has prescribed under section 43, No. 1, of the Code of Civil Procedure.

The first assignment of alleged error is, therefore, well-founded.

As to the second assignment of alleged error, consisting in that the trial court erred in holding
that the properties inherited by the defendants from their deceased grandfather by
representation are subject to the payment of debts and obligations of their deceased father,
who died without leaving any property, while it is true that under the provisions of articles
924 to 927 of the Civil Code, a children presents his father or mother who died before him in
the properties of his grandfather or grandmother, this right of representation does not make
the said child answerable for the obligations contracted by his deceased father or mother,
because, as may be seen from the provisions of the Code of Civil Procedure referring to
partition of inheritances, the inheritance is received with the benefit of inventory, that is to
say, the heirs only answer with the properties received from their predecessor. The herein
defendants, as heirs of Eusebio Quitco, in representation of their father Lorenzo M. Quitco,
are not bound to pay the indebtedness of their said father from whom they did not inherit
anything.

The second assignment of alleged error is also well-founded.

Being a mere sequel of the first two assignments of alleged errors, the third assignment of
error is also well-founded.

For the foregoing considerations, we are of the opinion and so hold: (1) That the filing of a
claim before the committee on claims and appraisal, appointed in the intestate of the father,
for a monetary obligation contracted by a son who died before him, does not suspend the
prescriptive period of the judicial action for the recovery of said indebtedness; (2) that the
claim for the payment of an indebtedness contracted by a deceased person cannot be filed
for its collection before the committee on claims and appraisal, appointed in the intestate of