a.

Transmissible rights and obligations

1. Bonilla v. Barcena, 71 SCRA 491 (1976)

FACTS:

This case is about Fortunata Barcena who had a civil case for quieting of title over parcels of land in Abra
on 31 March 1975.
She died on 17 July 1975 and was survived by her kids Rosalio and Salvacion and the wife of Ponciano
Bonillo.
The following month, the defendants to the case filed a motion to dismiss the complaint because
Fortunata is dead and therefore has no legal capacity to sue. The case was heard and the counsel of
Fortunata asked to substitute the petitioners to her kids and her husband, the court denied this on the
grounds that a dead person has no legal personality to sue

ISSUE:

Whether the substitution should have been granted – YES

RULING:

The court held that while it may be true that a dead person cannot sue in court, he should be allowed to
substitute. The initiation of the quieting of title case was filed while Fortunata was alive, therefore the
court still had jurisdiction over her. Section 16 Rule 3 of the Rules of Court provides that if a party dies
while the case is pending, the attorney has to inform the court and give the name of the executor,
administrator, guardian or other legal representatives. Furthermore, Article 777 of the Civil Code
provides that the rights to the succession are transmitted from the moment of the death of the
decedent.

From the moment, Fortunata died, her heirs became the absolute owners of the property that is subject of
the case. The question whether an action survives or not, upon the death of the party, depends on the
nature of the case. In this case, the action is a quieting of title, the outcome of this case would affect the
property rights of the heirs of Fortunata. Therefore, they have the right to be substituted,
 2. Conde v. Abaya, 13 Phil. 249 (1909)

FACTS:

Casiano Abaya was an unmarried man who died 6 April 1899. When he died, a Paula Conde is moving
for to settle his intestate succession, claiming that her two kids, Jose and Teopista Conda are the heirs of
Casiano. This claim was opposed by Casiano’s parents – Romualdo Abaya and Sabina Labadia. Father,
Romualdo, claims that he should be the sole heir of Casiano.
The problem was Casiano Abaya never, in his life, acknowledged Jose and Teopista as his kids.

ISSUE:

Whether a case for acknowledgement of heirship may be brought about by the mother of the child. - NO

RULING:
The court held that the right of action for legitimacy is of a personal character and is exclusive to the
child. The exceptions to this rule are when:
a. The child dies during his or her minority
b. The child is insane
c. After action had been already instituted

3. Cruz v. Cruz, G.R. No. 173292, 1 September 2010

FACTS:

A Memoracion Cruz filed a complaint against her son, Oswaldo Cruz, for “annulment of sale,
reconveyance and damages”. She claimed that she acquired a property in Tondo manila but later found
out that the property was transferred to her son, Oswaldo through a deed of sale. She claimed that this
deed of sale was acquired through fraud, forgery, misrepresentation and simulation. Despite her
continuous demands, Oswaldo would not reconvey the property to her.
But while the case was on-going, Memorancion died. The court then dismissed the case on the grounds
that the case was purely a personal action.
After her death, her other son, Edgardo Cruz informed the court that he will be continuing the case and
filed with the CA. The CA. however denied this and affirmed the lower court’s decision.

ISSUE:
Whether the action survives the death of party? - YES

RULING:

The court made use of our previous case, Bonilla vs. Barcena: In causes of action which survive, the
wrong complained of affects primarily and principally property and property rights, injuries to the person
are merely incidental. While causes of action that DON’T survive, the injury is to the person, the
properties affected are merely incidental. In another case, the court held that declaration of nullity of sale
of real property is one relating to property rights and thus survives the death of the party. Therefore, this
action of Memorancia – now Edgardo Cruz – survives the death of the Memorancia.

4. NHA v. Almeida, G.R. No. 162784, 22 June 2007

FACTS:
This case is about the properties of the LAND TENURE ADMINISTRATION that was awarded to
Margarita Herrera.
Margarita Herrera had two children: Beatriz Herrera-Mercado and Francisca Herrera.
After Margarita’s death, Francisca Herrera executed a deed of self-adjudication claiming that she is the
only remaining relative and is the exclusive heir of Margarita. She made use of a Sinumpaang Salaysay,
claiming that all the rights to the properties were waived in her favor.
The heirs of Margarita’s other kid, Beatriz Herrera-Mercado, contested this deed of self-adjudication and
the deed was declared null and void. While this case was on-going, however, Francisca filed an
application with the NHA to purchase the same lots.
The NHA granted the application of Francisca.
Later, Almeida - heir of Beatriz, appealed to the office of the President – but the office of the President
affirmed the decision of the NHA.
The following month, Francisca Herrera died and her heirs executed an extrajudicial settlement of her
estate, which they submitted to the NHA. The transfer of rights was approved by the NHA and they
executed several deeds of sale in favor of the heirs.
Following this, the heirs asked Almeida to leave the property because it belongs to them.
Almeida then sought for a cancellation of the titles issued in favor of the heirs of Francisca. In her petition
she claimed that she has been residing in the property for more than 40 years. And she, again raised that
Margarita never waived all her rights to Francisca.

The RTC ruled in favor of the Almeida, setting aside the decision of the NHA. The CA affirmed this
decision.

ISSUE:

Whether the SINUMPAAN SALAYSAY was enough to waive all rights to the properties to Francisca
Herrera - NO

RULING:
The SINUMPAAN SALAYSAY was not enough to grant Francisca Herrera. It was not considered to be a
will but if it would be used as one, it should have noted that the effectivity of such document will be upon
the death of that author.
Moreover, prior to Margarita’s death she had a contract to sell with the NHA, her being the buyer. This
contract did not extinguish when she died. It was merely transmitted to her heirs

b. Succession occurs at the time of death – Art. 777

1. Uson v. Del Rosario, 92 Phil. 530

FACTS:

This case is about the action for recovery of the ownership and possession of 5 parcels of land in
Pangasinan, filed by Maria Uson against Maria Del Rosario and her four children.

Fuastino, husband of Maria Uson, died in 1945 and left no other heir except his wife. However, Maria
Uson claims that when Faustino died, Maria Del Rosario, his common law wife, took possession of his
proeprties, denying Uson her of her rights.
Maria Del Rosario, however, argues that while Faustino was still alive. He executed a public document to
declare his separation with Maria Uson and gave her a parcel of land in return she would renounce her
right to inherit any other property from Faustino.

ISSUE:

Whether Maria has a stronger claim to the properties of Faustino - YES

RULING:
The court held that the properties should belong to the heirs of the decedent at the time of his death.
Faustino died during 1945, prior to the new civil code. In the old civil code, illegitimate children may not
inherit from their illegitimate parents.
Furthermore, while Maria Uson did expressly renounce to inherit future properties thather husband may
acquire, the court said they cannot entertain this because future inheritance may not be subjects to a
contract.

2. De Borja v. Vda. De Borja, 46 SCRA 577 (1972)

FACTS:

Francisco de Borja filed a petition for probate of the will of his wife who died, Josefa Tangco, with the
CFI of Rizal. He was appointed executor and administrator, until he died; his son Jose became the sole
administrator. Francisco had taken a 2nd wife Tasiana before he died; she instituted testate proceedings
with the CFI of Nueva Ecija upon his death and was appointed special administatrix. Jose and Tasiana
entered upon a compromise agreement, but Tasiana opposed the approval of the compromise agreement.
She argues that it was no valid, because the heirs cannot enter into such kind of agreement without first
probating the will of Francisco, and at the time the agreement was made, the will was still being probated
with the CFI of Nueva Ecija.

ISSUE:

W/N the compromise agreement is valid, even if the will of Francisco has not yet been probated.

RULING:
YES, the compromise agreement is valid.

The agreement stipulated that Tasiana will receive P800,000 as full payment for her hereditary share in
the estate of Francisco and Josefa.

There was here no attempt to settle or distribute the estate of Francisco de Borja among the heirs thereto
before the probate of his will. The clear object of the contract was merely the conveyance by Tasiana
Ongsingco of any and all her individual share and interest, actual or eventual, in the estate of Francisco de
Borja and Josefa Tangco. There is no stipulation as to any other claimant, creditor or legatee.

And as a hereditary share in a decedent’s estate is transmitted or vested immediately from the moment of
the death of such causante or predecessor in interest (Civil Code of the Philippines, Art. 777) there is no
legal bar to a successor (with requisite contracting capacity) disposing of her or his hereditary share
immediately after such death, even if the actual extent of such share is not determined until the
subsequent liquidation of the estate.

3. Lorenzo v. Posadas, 64 Phil. 353

FACTS:

Thomas Hanley died, leaving a will and a considerable amount of real and personal properties.
Proceedings for the probate of his will and the settlement and distribution of his estate were begun in the
CFI of Zamboanga. The will was admitted to probate.

The CFI considered it proper for the best interests of the estate to appoint a trustee to administer the real
properties which, under the will, were to pass to nephew Matthew ten years after the two executors named
in the will was appointed trustee. Moore acted as trustee until he resigned and the plaintiff Lorenzo herein
was appointed in his stead.

During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue (Posadas)
assessed against the estate an inheritance tax, together with the penalties for deliquency in payment.
Lorenzo paid said amount under protest, notifying Posadas at the same time that unless the amount was
promptly refunded suit would be brought for its recovery. Posadas overruled Lorenzo’s protest and
refused to refund the said amount. Plaintiff went to court. The CFI dismissed Lorenzo’s complaint and
Posadas’ counterclaim. Both parties appealed to this court
ISSUE:

(a) When does the inheritance tax accrue and when must it be satisfied?

RULING:

The accrual of the inheritance tax is distinct from the obligation to pay the same.

Acording to article 657 of the Civil Code, “the rights to the succession of a person are transmitted from
the moment of his death.”. the heirs succeed immediately to all of the property of the deceased ancestor.
The property belongs to the heirs at the moment of the death of the ancestor as completely as if the
ancestor had executed and delivered to them a deed for the same before his death.”

Whatever may be the time when actual transmission of the inheritance takes place, succession takes place
in any event at the moment of the decedent’s death. The time when the heirs legally succeed to the
inheritance may differ from the time when the heirs actually receive such inheritance. ” Thomas Hanley
having died on May 27, 1922, the inheritance tax accrued as of the date.

From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow that the obligation
to pay the tax arose as of the date. The time for the payment on inheritance tax is clearly fixed by section
1544 of the Revised Administrative Code as amended by Act No. 3031, in relation to section 1543 of the
same Code. The two sections follow:

SEC. 1543. Exemption of certain acquisitions and transmissions. — The following shall not be taxed:

(a) The merger of the usufruct in the owner of the naked title.

(b) The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the
trustees.

(c) The transmission from the first heir, legatee, or donee in favor of another beneficiary, in accordance
with the desire of the predecessor. xx
SEC. 1544. When tax to be paid. — The tax fixed in this article shall be paid:

(a) In the second and third cases of the next preceding section, before entrance into possession of the
property.

(b) In other cases, within the six months subsequent to the death of the predecessor; but if judicial
testamentary or intestate proceedings shall be instituted prior to the expiration of said period, the payment
shall be made by the executor or administrator before delivering to each beneficiary his share.

The instant case does[not] fall under subsection (a), but under subsection (b), of section 1544 above-
quoted, as there is here no fiduciary heirs, first heirs, legatee or donee. Under the subsection, the tax
should have been paid before the delivery of the properties in question to Moore as trustee.

YES

The defendant maintains that it was the duty of the executor to pay the inheritance tax before the
delivery of the decedent’s property to the trustee. Stated otherwise, the defendant contends that
delivery to the trustee was delivery to the cestui que trust, the beneficiary in this case, within the meaning
of the first paragraph of subsection (b) of section 1544 of the Revised Administrative Code. This
contention is well taken and is sustained. A trustee is but an instrument or agent for the cestui que trust

The appointment of Moore as trustee was made by the trial court in conformity with the wishes of the
testator as expressed in his will. It is true that the word “trust” is not mentioned or used in the will but the
intention to create one is clear. No particular or technical words are required to create a testamentary trust.
The words “trust” and “trustee”, though apt for the purpose, are not necessary. In fact, the use of these
two words is not conclusive on the question that a trust is created. ” To constitute a valid testamentary
trust there must be a concurrence of three circumstances:

(1) Sufficient words to raise a trust;

(2) a definite subject;

(3) a certain or ascertain object; statutes in some jurisdictions expressly or in effect so providing.”

There is no doubt that the testator intended to create a trust. He ordered in his will that certain of his
properties be kept together undisposed during a fixed period, for a stated purpose. The probate court
certainly exercised sound judgment in appointmening a trustee to carry into effect the provisions of the
will

As the existence of the trust was already proven, it results that the estate which plaintiff represents has
been delinquent in the payment of inheritance tax and, therefore, liable for the payment of interest and
surcharge provided by law in such cases.

The delinquency in payment occurred on March 10, 1924, the date when Moore became trustee. On that
date trust estate vested in him. The interest due should be computed from that date.

NOTES: Other issues:

(a) When does the inheritance tax accrue and when must it be satisfied?

The accrual of the inheritance tax is distinct from the obligation to pay the same.

Acording to article 657 of the Civil Code, “the rights to the succession of a person are transmitted from
the moment of his death.” “In other words”, said Arellano, C. J., “. . . the heirs succeed immediately to all
of the property of the deceased ancestor. The property belongs to the heirs at the moment of the death of
the ancestor as completely as if the ancestor had executed and delivered to them a deed for the same
before his death.”

Whatever may be the time when actual transmission of the inheritance takes place, succession takes place
in any event at the moment of the decedent’s death. The time when the heirs legally succeed to the
inheritance may differ from the time when the heirs actually receive such inheritance. ” Thomas Hanley
having died on May 27, 1922, the inheritance tax accrued as of the date.

From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow that the obligation
to pay the tax arose as of the date. The time for the payment on inheritance tax is clearly fixed by section
1544 of the Revised Administrative Code as amended by Act No. 3031, in relation to section 1543 of the
same Code. The two sections follow:

SEC. 1543. Exemption of certain acquisitions and transmissions. — The following shall not be taxed:

(a) The merger of the usufruct in the owner of the naked title.

(b) The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the
trustees.

(c) The transmission from the first heir, legatee, or donee in favor of another beneficiary, in accordance
with the desire of the predecessor. xx

SEC. 1544. When tax to be paid. — The tax fixed in this article shall be paid:

(a) In the second and third cases of the next preceding section, before entrance into possession of the
property.

(b) In other cases, within the six months subsequent to the death of the predecessor; but if judicial
testamentary or intestate proceedings shall be instituted prior to the expiration of said period, the payment
shall be made by the executor or administrator before delivering to each beneficiary his share.

The instant case does[not] fall under subsection (a), but under subsection (b), of section 1544 above-
quoted, as there is here no fiduciary heirs, first heirs, legatee or donee. Under the subsection, the tax
should have been paid before the delivery of the properties in question to Moore as trustee.

(b) Should the inheritance tax be computed on the basis of the value of the estate at the time of the
testator’s death, or on its value ten years later?
If death is the generating source from which the power of the estate to impose inheritance taxes takes its
being and if, upon the death of the decedent, succession takes place and the right of the estate to tax vests
instantly, the tax should be measured by the value of the estate as it stood at the time of the decedent’s
death, regardless of any subsequent contingency value of any subsequent increase or decrease in value

(c) In determining the net value of the estate subject to tax, is it proper to deduct the compensation
due to trustees?

A trustee, no doubt, is entitled to receive a fair compensation for his services. But from this it does not
follow that the compensation due him may lawfully be deducted in arriving at the net value of the estate
subject to tax. There is no statute in the Philippines which requires trustees’ commissions to be deducted
in determining the net value of the estate subject to inheritance tax

(d) What law governs the case at bar? Should the provisions of Act No. 3606 favorable to the tax-
payer be given retroactive effect?

A statute should be considered as prospective in its operation, whether it enacts, amends, or repeals an
inheritance tax, unless the language of the statute clearly demands or expresses that it shall have a
retroactive effect, . . . .” Act No. 3606 itself contains no provisions indicating legislative intent to give it
retroactive effect. No such effect can be given the statute by this court.

4. Rioferio v. CA, G.R. No. 129008, 13 January 2004

FACTS:
On May 13, 1995 Alfonso Orfinada died without a will, leaving several personal and real properties. He
was survived by his widow Esperanza and his children Lourdes, Alfonso, Nancy, Alfonso, Christopher,
Angelo.

Alfonso had an affair with one, Teodora Riofero – petitioner in the case.
6 months later, Orfinada’s children found out that Teodora Riofero executed an extrajudicial settlement
over Alfonso’s properties and were able to obtain a loan using the properties.
As a response, the children filed for the annulment/rescission of the Extra judicial settlement.

Teodora Riofero argued that the properties indicated in the EJS originally belonged to her parents and that
Alfonso managed to register them under his name. Furthermore, she argued that Esperanza and kids are
not the parties-in-interest but rather Alfonso.
This motion was denied by the RTC and the CA.

ISSUE:

Whether the heirs may bring suit to recover property of the estate pending the appointment of an
administrator is the issue in this case. - YES

RULING:
The court held that the heirs without a doubt have legal personality to bring a suit in behalf of the estate of the
decedent. Art. 777 – the rights to succession are transmitted from the moment of death of the decedent.