Vitug vs.

Court of Appeals
GR. No. 82027, March 29, 1990

Doctrine: A survivorship agreement between spouses does not constitute a conveyance mortis causa or a
will because it is merely an aleatory contract which imposes an obligation with a term – the term being
death.
*Nota bene: an aleatory contract is when one of or both of the parties reciprocally bind themselves to give
or do something in consideration of what the other shall give/do upon the happening of 1) an uncertain
event; or, 2) an event which is to occur at an indeterminate time.
Recit-Ready Summary:
Dolores Luchangco and Romarico Vitug were spouses who, in 1970, executed an Survivorship
Agreement with the Bank of America. Basically, this agreement stated that all the money deposited in
Account No. 35342-038 will be considered conjugal funds of the spouses (therefore conjugal property)
during the lifetime of both spouses – however when one of them dies, the money in the account will
become the sole property of the surviving spouse. In 1980, Dolores died and thus Romarico became the
co-administrator of his deceased wife’s estate together with Nenita Alonte; on the other hand Rowena
Faustino-Corona was appointed as executrix of the two wills left behind by Dolores.
In 1985 Romarico filed with the probate court asking for permission to sell certain shares of stock
and real properties belonging to the decedent’s estate in order to fund a reimbursement of advances he
allegedly made in favor of the estate such as estate tax and deficiency estate taxes. Romarico alleged that
the money he used to pay off the taxes were his personal funds. Rowena opposed the motion to sell the
said properties alleging that Romarico withdrew the alleged advances from Bank of America Account No.
35342-038 (the account under the Survivorship Agreement) which was the conjugal property of the
spouses and thus constitute part of the estate – therefore no reimbursement was due to Romarico. Vitug
on the other hand averred that by virtue of the Survivorship agreement, the money in the said account had
become his sole property upon the death of the decedent.
The RTC upheld the validity of the agreement and granted Romarico’s motion to sell properties,
the proceeds of which will be used as reimbursement to him. The CA reversed the decision of the RTC
and ruled that the Survivorship Agreement was a conveyance mortis causa thus technically a will, and it
did not comply with the formalities laid down by law. The main issue is whether or not the Survivorship
Agreement constituted a will. The Court ruled in the negative stating that the contract merely imposed an
obligation with a term, the term being the death of either one of the spouses. Neither is there any
indication that the Survivorship Agreement had been executed to frustrate laws on will, donations, and
conjugal partnership. The death of Dolores vested in Romarico sole ownership of the funds in the account
and thus cannot be included in the inventory of the former’s estate.
Facts
- Spouses Romarico Vitug and Dolores Luchangco Vitug executed a Survivorship Agreement
(“Agreement”) with the Bank of America, and the pertinent section of such Agreement provides:

We hereby agree with each other and with the BANK OF AMERICAN NATIONAL TRUST AND
SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money now or hereafter
deposited by us or any or either of us with the BANK in our joint savings current account shall be the
property of all or both of us and shall be payable to and collectible or withdrawable by either or any of us
 during our lifetime, and after the death of either or any of us shall belong to and be the sole property
of the survivor or survivors, and shall be payable to and collectible or withdrawable by such survivor or
survivors.
- In 1980 Dolores died in New York and left two wills – Romarico was appointed as administrator
together with Nenita Alonte, and Rowena Faustino-Corona was designated as executrix. In 1985
Romarico filed a motion before the probate court to be allowed to sell some shares of stock and
certain properties from the estate in order to raise money to reimburse him for his payment of
inheritance taxes which he allegedly advanced and took out of his own pocket/own personal funds
(total amount is approx. P680,000). Rowena opposed the motion to sell claiming that the money
Romarico used to pay such taxes came from the bank account under the Agreement, which was
conjugal property of the spouses, therefore it was necessarily part and parcel of the estate of the
deceased.
- The RTC upheld the validity of the Agreement and granted the motion to sell some properties from
the estate of Dolores. However on appeal with the CA, the court held that the agreement constituted a
conveyance mortis causa which did not comply with the formalities of the a valid will as prescribed
in Art. 805 therefore it was null and void.

Issue:
1. WON the Agreement partook the nature of a conveyance mortis causa/a testamentary will.
Held:
- NO, the Agreement did not purport to deliver one party’s separate and personal properties in favor of
the other, but simply their joint holdings. In the absence of any proof that the funds exclusively
belonged to either one of the parties, the presumption is that it is conjugal property. In reality, the
Agreement is merely an aleatory contract which imposes an obligation with a term – and that term
being the death of either spouses.
- Romarico cited two cases where he based his arguments, the first being on Rivera v. PBTC where the
Court ruled that a survivorship agreement does not purport to deliver one spouse’s separate properties
in favor of the surviving spouse, but rather merely their joint holdings. The second case, Macam v.
Gatmaitan states that: “an aleatory contract is one whereby one of the parties or both reciprocally
bind themselves to give or do something as an equivalent for that which the other party is to give or
do in case of the occurrence of an event which is uncertain or will happen at an indeterminate time”.
The Court ruled that a survivorship agreement falls under the second type of aleatory contracts which
depends on an uncertain event.
- The Court further ruled that since there was no proof that the funds were personally belonging to
either of the spouses, it is presumed to be conjugal, having been acquired during the existence of their
marital relations. Furthermore, a survivorship agreement is not a donation inter vivos because it only
takes effect after the death of either spouses and neither is it a donation between spouses because it
involves no transfer of any of either spouse’s personal property.
- Finally the Court disagreed with the CA when the latter ruled that the Agreement was a modification
of the conjugal partnership because it was a mere cloak to circumvent the rules on CPG. The spouses
were not prohibited by law to invest their conjugal property by way of the Agreement – they merely
put what rightfully belonged to the both of them in a money-making venture. They did not dispose
any of their personal properties to one another, therefore it cannot be considered under prohibited
donations.