Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-8092            March 14, 1916

RUFINA BONDAD, ET AL., plaintiffs-appellants,

vs.
VENANCIO BONDAD, ET AL., defendants-appellees.

Modesto Reyes for appellants.

Pedro Guevara for appellees.

ARELLANO, C. J.:

Rufina Bondad had two brothers and two sisters, respectively named Venancio,
Placido, Maria, and Paula. The last named died leaving four children: Eleno, Estanislao,
Raymundo, and Pedro, all surnamed Emlano.

On May 6, 1911, Rufina Bondad brought suit against her said brothers sisters, and
nephews to secure the partition of the property left to these defendants by their father or
grandfather, respectively, Crisanto Bondad upon his death on March 17, 1902. She
designates the lands to be divided, which are those specified in the complaint under the
letters (a), (b), (c), (d), (e), (f), (g), (h), (i), and (j).

Documentary and parol evidence was introduced, and the Court of First Instance of
Laguna decided the case by dismissing the complaint and absolving defendants
therefrom, with the costs against the plaintiff.

The latter appealed, and upon a hearing of her appeal we find:

(1) That a person who alleges a hereditary right in any specified real property, must, like
any other person who seeks to recover possession, prove the ownership of his
predecessor-in-interest; otherwise "the possessor by virtue of ownership has in his favor
the legal presumption that he holds possession by reason of a sufficient title and he
cannot be forced to show it." (Art. 448, Civ. Code.) The plaintiff did not try to prove her
father's ownership in the property she describes as left by him at his death. She did no
more than present two witnesses whose testimony will be duly considered hereinafter.

(2) That a person who alleges a hereditary right will be relieved from proving his
predecessor-in-interest's ownership only when the defendant in possession admits
having received the ownership or possession he enjoys from that predecessor; but in
that case plaintiff must prove how he came into the possession and ownership of the
thing he claims.

(3) That, in the case at bar, defendants admit that the real property, specified in the
complaint under the letters (a), (d), (e), (h), (i), and (j), was derived from that source, but
allege that it was equitably and proportionally partitioned between the plaintiff and the
defendants in 1903.

(4) That they deny that the parcels of land B, C, F, and G belonged to the intestate
estate of the predecessor-in-interest, Crisanto Bondad, and were derived from this
latter, wherefore it is incumbent upon the plaintiff, and not upon the defendants, to prove
such ownership; and that without this proof the defendants cannot be disturbed in their
possession.

(5) That Lorenzo Suarez, one of the two witnesses presented by plaintiff, testified that
the said parcels of land, as the others, were inherited some by Crisanto Bondad, others
by his wife Gliceria Alcantara, while still others were purchased by both of them, but
witness did not specify the origin or the title of ownership of each individual parcel, and
it is no proof of the ownership of real property to state the title of origin of the whole,
without specifying the title of ownership of each of its parcels, especially in the case of a
double marriage as it appears that Crisanto Bondad was married at least twice, once to
Gliceria Alcantara and the second time to Emilia del Rosario. The other witness, Aniceto
Devanadera, specifies only one piece of realty as having been purchased by Crisanto
Bondad, and the rest as having been inherited by the same.

(6) That, on the other hand, while there was no need of exhibiting titles to possession,
they were nevertheless exhibited by: Venancio Bondad who holds by purchase from
Juan Martinez, by virtue of a notarial instrument of September 12, 1908, the lands
specified in the complaint under letter (c), with the identical area, the identical number of
planted coconut trees and the identical boundaries; the same Venancio Bondad who
holds by purchase from the surviving widow Emilia del Rosario, by virtue of a notarial
instrument of September 30, 1907, the land specified in the complaint under letter (b),
with identical area, the identical number of coconut trees and the identical boundaries;
Placido Bondad who holds by purchase from Ceferino Alcantara, by virtue of a notarial
instrument of May 28, 1911, the land specified in the complaint under letter (f), with
nearly the identical number of coconut trees, boundaries and area; and the same
Placido Bondad, who holds by purchase from Margarita Bondad, by virtue of a notarial
instrument of May 27, 1911, the land specified in the complaint under letter (g), with
almost the identical number of coconut trees and boundaries.

(7) That the plaintiff, in describing under letter (h) in her complaint the coconut land
planted with 200 fruit-bearing coconut trees, says in regard to its boundaries: "On the
south, by the land of the late Crisanto Bondad, now in the possession of Rufina
Bondad . . . " She says that she has been in possession was only acquired by
adjudication; and that the adjudication was the result of a partition.

It can be shown, as the lower court found, that the partition has already been made. In
the decision rendered in the case of Ilustre vs. Alaras Frondosa (17 Phil. Rep., 321),
this court said:

Under the provisions of the Civil Code (arts. 657 to 661), the rights to the
succession of a person are transmitted from the moment of his death; in other
words, 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. In the absence of debts existing against the
estate, the heirs may enter upon the administration of the said property
immediately. If they desire to administer it jointly, they may do so. If they desire to
partition it among themselves and can do this by mutual agreement, they also
have that privilege. The Code of Procedure in Civil Actions provides how an
estate may be divided by a petition for partition in case they cannot mutually
agree in the division. Where there are no debts existing against the estate, there
is certainly no occasion for the intervention of an administrator . . . . The property
belonging absolutely to the heirs, in the absence of existing debts against the
 estate, the administrator has no right whatever to intervene in any way in the
division of the estate among the heirs . . . .

It has been repeatedly shown in the record that there are no debts outstanding against
either succession, and the complaint itself so states.

The plaintiff makes the following citation from the end of the decision above referred to:
"If there are any heirs of the estate who have not received their participation, they have
their remedy by petition for partition of the estate." But the plaintiff has received her
share in the land, which, together with 200 coconut trees, she testifies she has held for
the past ten years.

If, at the present time or in the future, some creditor should come forward with a claim,
or if debts of either or both of the two intestate estates should appear, prescription after
two years could not be set up against such creditors or against such debts, because the
date from which the beginning of the two years should be counted, could not be
determined. This is the risk that is incurred in a partition of these intestate estates and
hence the need of making the partition in writing, that is, so that it would not prejudice
any third person; but among themselves the heirs must abide by the terms upon which
they have agreed.

There is however one fact in the record which has not been wholly explained and which
forms the fifth error assigned by appellant, to wit, that relative to the land designated
under letter (b) in the complaint. The lower court decided that this land, planted with 300
coconut trees, belonged to Venancio Bondad inasmuch as he proved its purchase by
the document Exhibit 2. Venancio Bondad maintains that he purchased it of Emilia del
Rosario on September 30, 1907. But it is shown that on August 26, 1911, Emilia del
Rosario, the surviving widow, executed the document Exhibit D, in which she sets forth
that she delivered the possession and right of enjoyment of apparently the same land to
Venancio Bondad, Placido Bondad, Maria Bondad, and Rufina Bondad, and that in
exchange for it they paid her the sum of P110.

This document, if authentic, as it appears to be, having been confirmed by the property
assessment declaration thereof filed by Venancio Bondad (Exhibit A), reveals that there
exists a co-ownership in said land between the four above mentioned heirs, including
the plaintiff Rufina Bondad. This, however, does not militate against the partition in
question, but rather confirms it. An action for the division of co-ownership, which is
different from that for partition of a hereditary succession, always lies in behalf of the
interested parties.

The judgment appealed from is affirmed, with the costs of this instance against the
appellant. So ordered.

Torres, Moreland, Trent, and Araullo, JJ., concur.

 EN BANC
[G.R. No. L-8437.  November 28, 1956.]
ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-
Appellant.
 
DECISION
REYES, J. B. L., J.:
Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance of Rizal,
presided by Judge Hermogenes Caluag, dismissing its claim against the Estate of K. H.
Hemady (Special Proceeding No. Q-293) for failure to state a cause of action.
The Luzon Surety Co. had filed a claim against the Estate based on twenty different
indemnity agreements, or counter bonds, each subscribed by a distinct principal and by
the deceased K. H. Hemady, a surety solidary guarantor) in all of them, in consideration
of the Luzon Surety Co.’s of having guaranteed, the various principals in favor of
different creditors. The twenty counterbonds, or indemnity agreements, all contained the
following stipulations:chanroblesvirtuallawlibrary
“Premiums. — As consideration for this suretyship, the undersigned jointly and
severally, agree to pay the COMPANY the sum of ________________ (P______)
pesos, Philippines Currency, in advance as premium there of for every __________
months or fractions thereof, this ________ or any renewal or substitution thereof is in
effect.
Indemnity. — The undersigned, jointly and severally, agree at all times to indemnify the
COMPANY and keep it indemnified and hold and save it harmless from and against any
and all damages, losses, costs, stamps, taxes, penalties, charges, and expenses of
whatsoever kind and nature which the COMPANY shall or may, at any time sustain or
incur in consequence of having become surety upon this bond or any extension,
renewal, substitution or alteration thereof made at the instance of the undersigned or
any of them or any order executed on behalf of the undersigned or any of them; chan
roblesvirtualawlibraryand to pay, reimburse and make good to the COMPANY, its
successors and assigns, all sums and amount of money which it or its representatives
shall pay or cause to be paid, or become liable to pay, on account of the undersigned or
any of them, of whatsoever kind and nature, including 15% of the amount involved in
the litigation or other matters growing out of or connected therewith for counsel or
attorney’s fees, but in no case less than P25. It is hereby further agreed that in case of
extension or renewal of this ________ we equally bind ourselves for the payment
thereof under the same terms and conditions as above mentioned without the necessity
of executing another indemnity agreement for the purpose and that we hereby equally
waive our right to be notified of any renewal or extension of this ________ which may
be granted under this indemnity agreement.
Interest on amount paid by the Company. — Any and all sums of money so paid by the
company shall bear interest at the rate of 12%  per annum which interest, if not paid, will
be accummulated and added to the capital quarterly order to earn the same interests as
the capital and the total sum thereof, the capital and interest, shall be paid to the
COMPANY as soon as the COMPANY shall have become liable therefore, whether it
shall have paid out such sums of money or any part thereof or not.
x x x                    x x x                    x x x
Waiver. — It is hereby agreed upon by and between the undersigned that any question
which may arise between them by reason of this document and which has to be
submitted for decision to Courts of Justice shall be brought before the Court of
competent jurisdiction in the City of Manila, waiving for this purpose any other venue.
Our right to be notified of the acceptance and approval of this indemnity agreement is
hereby likewise waived.
x x x                    x x x                    x x x
Our Liability Hereunder. — It shall not be necessary for the COMPANY to bring suit
against the principal upon his default, or to exhaust the property of the principal, but the
liability hereunder of the undersigned indemnitor shall be jointly and severally, a primary
one, the same as that of the principal, and shall be exigible immediately upon the
occurrence of such default.” (Rec. App. pp. 98- 102.)
The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of the
twenty bonds it had executed in consideration of the counterbonds, and further asked
for judgment for the unpaid premiums and documentary stamps affixed to the bonds,
with 12 per cent interest thereon.
Before answer was filed, and upon motion of the administratrix of Hemady’s estate, the
lower court, by order of September 23, 1953, dismissed the claims of Luzon Surety Co.,
on two grounds:chanroblesvirtuallawlibrary (1) that the premiums due and cost of
documentary stamps were not contemplated under the indemnity agreements to be a
part of the undertaking of the guarantor (Hemady), since they were not liabilities
incurred after the execution of the counterbonds; chan roblesvirtualawlibraryand (2) that
“whatever losses may occur after Hemady’s death, are not chargeable to his estate,
because upon his death he ceased to be guarantor.”
Taking up the latter point first, since it is the one more far reaching in effects, the
reasoning of the court below ran as follows:chanroblesvirtuallawlibrary
“The administratrix further contends that upon the death of Hemady, his liability as a
guarantor terminated, and therefore, in the absence of a showing that a loss or damage
was suffered, the claim cannot be considered contingent. This Court believes that there
is merit in this contention and finds support in Article 2046 of the new Civil Code. It
should be noted that a new requirement has been added for a person to qualify as a
guarantor, that is:chanroblesvirtuallawlibrary integrity. As correctly pointed out by the
Administratrix, integrity is something purely personal and is not transmissible. Upon the
death of Hemady, his integrity was not transmitted to his estate or successors.
Whatever loss therefore, may occur after Hemady’s death, are not chargeable to his
estate because upon his death he ceased to be a guarantor.
Another clear and strong indication that the surety company has exclusively relied on
the personality, character, honesty and integrity of the now deceased K. H. Hemady,
was the fact that in the printed form of the indemnity agreement there is a paragraph
entitled ‘Security by way of first mortgage, which was expressly waived and renounced
by the security company. The security company has not demanded from K. H. Hemady
to comply with this requirement of giving security by way of first mortgage. In the
supporting papers of the claim presented by Luzon Surety Company, no real property
was mentioned in the list of properties mortgaged which appears at the back of the
indemnity agreement.” (Rec. App., pp. 407-408).
We find this reasoning untenable. Under the present Civil Code (Article 1311), as well
as under the Civil Code of 1889 (Article 1257), the rule is that —
“Contracts take effect only as between the parties, their assigns and heirs, except in the
case where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law.”
While in our successional system the responsibility of the heirs for the debts of their
decedent cannot exceed the value of the inheritance they receive from him, the principle
remains intact that these heirs succeed not only to the rights of the deceased but also to
his obligations. Articles 774 and 776 of the New Civil Code (and Articles 659 and 661 of
the preceding one) expressly so provide, thereby confirming Article 1311 already
quoted.
“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.”
“ART. 776. — The inheritance includes all the property, rights and obligations of a
person which are not extinguished by his death.”
In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court
ruled:chanroblesvirtuallawlibrary
“Under the Civil Code the heirs, by virtue of the rights of succession are subrogated to
all the rights and obligations of the deceased (Article 661) and cannot be regarded as
third parties with respect to a contract to which the deceased was a party, touching the
estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).
x x x                    x x x                    x x x
“The principle on which these decisions rest is not affected by the provisions of the new
Code of Civil Procedure, and, in accordance with that principle, the heirs of a deceased
person cannot be held to be “third persons” in relation to any contracts touching the real
estate of their decedent which comes in to their hands by right of inheritance; chan
roblesvirtualawlibrarythey take such property subject to all the obligations resting
thereon in the hands of him from whom they derive their rights.”
(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs. Salak,
91 Phil., 265).
The binding effect of contracts upon the heirs of the deceased party is not altered by the
provision in our Rules of Court that money debts of a deceased must be liquidated and
paid from his estate before the residue is distributed among said heirs (Rule 89). The
reason is that whatever payment is thus made from the estate is ultimately a payment
by the heirs and distributees, since the amount of the paid claim in fact diminishes or
reduces the shares that the 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. 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. The transition is marked by the disappearance of the imprisonment for debt.
Of the three exceptions fixed by Article 1311, the nature of the obligation of the surety or
guarantor does not warrant the conclusion that his peculiar individual qualities are
contemplated as a principal inducement for the contract. What did the creditor Luzon
Surety Co. expect of K. H. Hemady when it accepted the latter as surety in the
counterbonds? Nothing but the reimbursement of the moneys that the Luzon Surety Co.
might have to disburse on account of the obligations of the principal debtors. This
reimbursement is a payment of a sum of money, resulting from an obligation to
give; chan roblesvirtualawlibraryand to the Luzon Surety Co., it was indifferent that the
reimbursement should be made by Hemady himself or by some one else in his behalf,
so long as the money was paid to it.
The second exception of Article 1311, p. 1, is intransmissibility by stipulation of the
parties. Being exceptional and contrary to the general rule, this intransmissibility should
not be easily implied, but must be expressly established, or at the very least, clearly
inferable from the provisions of the contract itself, and the text of the agreements sued
upon nowhere indicate that they are non-transferable.
“(b)  Intransmisibilidad por pacto. — Lo general es la transmisibilidad de darechos y
obligaciones; chan roblesvirtualawlibraryle excepcion, la intransmisibilidad. Mientras
nada se diga en contrario impera el principio de la transmision, como elemento natural
a toda relacion juridica, salvo las personalisimas. Asi, para la no transmision, es
menester el pacto expreso, porque si no, lo convenido entre partes trasciende a sus
herederos.
Siendo estos los continuadores de la personalidad del causante, sobre ellos recaen los
efectos de los vinculos juridicos creados por sus antecesores, y para evitarlo, si asi se
quiere, es indespensable convension terminante en tal sentido.
Por su esencia, el derecho y la obligacion tienden a ir más allá de las personas que les
dieron vida, y a ejercer presion sobre los sucesores de esa persona; chan
roblesvirtualawlibrarycuando no se quiera esto, se impone una estipulacion limitativa
expresamente de la transmisibilidad o de cuyos tirminos claramente se deduzca la
concresion del concreto a las mismas personas que lo otorgon.” (Scaevola, Codigo
Civil, Tomo XX, p. 541-542) (Emphasis supplied.)
Because under the law (Article 1311), a person who enters into a contract is deemed to
have contracted for himself and his heirs and assigns, it is unnecessary for him to
expressly stipulate to that effect; chan roblesvirtualawlibraryhence, his failure to do so is
no sign that he intended his bargain to terminate upon his death. Similarly, that the
Luzon Surety Co., did not require bondsman Hemady to execute a mortgage indicates
nothing more than the company’s faith and confidence in the financial stability of the
surety, but not that his obligation was strictly personal.
The third exception to the transmissibility of obligations under Article 1311 exists when
they are “not transmissible by operation of law”. The provision makes reference to those
cases where the law expresses that the rights or obligations are extinguished by death,
as is the case in legal support (Article 300), parental authority (Article 327), usufruct
(Article 603), contracts for a piece of work (Article 1726), partnership (Article 1830 and
agency (Article 1919). By contract, the articles of the Civil Code that regulate guaranty
or suretyship (Articles 2047 to 2084) contain no provision that the guaranty is
extinguished upon the death of the guarantor or the surety.
The lower court sought to infer such a limitation from Art. 2056, to the effect that “one
who is obliged to furnish a guarantor must present a person who possesses integrity,
capacity to bind himself, and sufficient property to answer for the obligation which he
guarantees”. It will be noted, however, that the law requires these qualities to be present
only at the time of the perfection of the contract of guaranty. It is self-evident that once
the contract has become perfected and binding, the supervening incapacity of the
guarantor would not operate to exonerate him of the eventual liability he has
contracted; chan roblesvirtualawlibraryand if that be true of his capacity to bind himself,
it should also be true of his integrity, which is a quality mentioned in the article alongside
the capacity.
The foregoing concept is confirmed by the next Article 2057, that runs as
follows:chanroblesvirtuallawlibrary
“ART. 2057. — If the guarantor should be convicted in first instance of a crime involving
dishonesty or should become insolvent, the creditor may demand another who has all
the qualifications required in the preceding article. The case is excepted where the
creditor has required and stipulated that a specified person should be guarantor.”
From this article it should be immediately apparent that the supervening dishonesty of
the guarantor (that is to say, the disappearance of his integrity after he has become
bound) does not terminate the contract but merely entitles the creditor to demand a
replacement of the guarantor. But the step remains optional in the
creditor:chanroblesvirtuallawlibrary it is his right, not his duty; chan
roblesvirtualawlibraryhe may waive it if he chooses, and hold the guarantor to his
bargain. Hence Article 2057 of the present Civil Code is incompatible with the trial
court’s stand that the requirement of integrity in the guarantor or surety makes the
latter’s undertaking strictly personal, so linked to his individuality that the guaranty
automatically terminates upon his death.
The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety Co.
not being rendered intransmissible due to the nature of the undertaking, nor by the
stipulations of the contracts themselves, nor by provision of law, his eventual liability
thereunder necessarily passed upon his death to his heirs. The contracts, therefore,
give rise to contingent claims provable against his estate under section 5, Rule 87 (2
Moran, 1952 ed., p. 437; chan roblesvirtualawlibraryGaskell & Co. vs. Tan Sit, 43 Phil.
810, 814).
“The most common example of the contigent claim is that which arises when a person is
bound as surety or guarantor for a principal who is insolvent or dead. Under the ordinary
contract of suretyship the surety has no claim whatever against his principal until he
himself pays something by way of satisfaction upon the obligation which is secured.
When he does this, there instantly arises in favor of the surety the right to compel the
principal to exonerate the surety. But until the surety has contributed something to the
payment of the debt, or has performed the secured obligation in whole or in part, he has
no right of action against anybody — no claim that could be reduced to judgment. (May
vs. Vann, 15 Pla., 553; chan roblesvirtualawlibraryGibson vs. Mithell, 16 Pla., 519; chan
roblesvirtualawlibraryMaxey vs. Carter, 10 Yarg. [Tenn.], 521 Reeves vs. Pulliam, 7
Baxt. [Tenn.], 119; chan roblesvirtualawlibraryErnst vs. Nou, 63 Wis., 134.)”
For Defendant administratrix it is averred that the above doctrine refers to a case where
the surety files claims against the estate of the principal debtor; chan
roblesvirtualawlibraryand it is urged that the rule does not apply to the case before us,
where the late Hemady was a surety, not a principal debtor. The argument evinces a
superficial view of the relations between parties. If under the Gaskell ruling, the Luzon
Surety Co., as guarantor, could file a contingent claim against the estate of the principal
debtors if the latter should die, there is absolutely no reason why it could not file such a
claim against the estate of Hemady, since Hemady is a solidary co-debtor of his
principals. What the Luzon Surety Co. may claim from the estate of a principal debtor it
may equally claim from the estate of Hemady, since, in view of the existing solidarity,
the latter does not even enjoy the benefit of exhaustion of the assets of the principal
debtor.
The foregoing ruling is of course without prejudice to the remedies of the administratrix
against the principal debtors under Articles 2071 and 2067 of the New Civil Code.
Our conclusion is that the solidary guarantor’s liability is not extinguished by his death,
and that in such event, the Luzon Surety Co., had the right to file against the estate a
contingent claim for reimbursement. It becomes unnecessary now to discuss the
estate’s liability for premiums and stamp taxes, because irrespective of the solution to
this question, the Luzon Surety’s claim did state a cause of action, and its dismissal was
erroneous.
Wherefore, the order appealed from is reversed, and the records are ordered remanded
to the court of origin, with instructions to proceed in accordance with law. Costs against
the Administratrix- Appellee. SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

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, is whether or not the action to recover the sum of P1,500, representing the last
installment for the payment of the promissory note Exhibit C, has prescribed.

According to the promissory note Exhibit C, executed by the deceased Lorenzo M.

Quitco, on 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 his father, and the propertiesinherited from the
latter by the children of said deceased do not answer for the payment of the
indebtedness contracted during the lifetime of said person.

Wherefore, the appealed judgment is reversed, and the defendants are absolved from
the complaint, with the costs to the appellees. So ordered.

Avanceña, C.J., Imperial, Diaz, Laurel and Concepcion, JJ., concur.

 EN BANC

G.R. No. 559  March 14, 1903

MANUEL BARRIOS Y BARREDO,Plaintiff-Appellant, vs. MARIA PASCUALA DOLOR,

ET AL.,Defendants-Appellees.

Simplicio del Rosario, for appellant.

Maria Pascuala Dolor, appellee.

MAPA, J.:

The plaintiff has brought an action for the recovery from the defendants, heirs of the late
Don Ciriaco Demonteverde, of one-half of a sugar estate and the stock thereon, which
he claims to have purchased from the said Don Ciriaco Demonteverde. In support of his
contention as to the law of the case he attached to the complaint a public instrument
which appears to have been executed by himself and Demonteverde, February 3, 1883,
in which, according to the plaintiff, a stipulation is made for a contract of partnership for
the operation of the said estate, and, furthermore, a community, of ownership is
established with respect to the estate in favor of the two parties to this instrument. It
does not appear that this instrument has been recorded in the registry of
property.chanrobles virtual law library

Service of the complaint having been had on the defendants, Doña Maria Pascuala
Dolor raised an incidental issue as a previous question, praying that the instrument
referred to be ruled out of evidence on the ground that it had not been recorded in the
registry of property, and that it be returned to the plaintiff without leaving in the record
any transcript or copy thereof or extract therefrom, resting this contention upon article
389 of the Mortgage Law. This motion was granted by the judge by order of the 24th of
March, 1898, against which the plaintiff appeals.chanrobles virtual law library

The article cited is literally as follows: "From the time this law goes into operation the
ordinary and special courts and the Government offices will not admit any document or
instrument by which rights subject to inscription according to this law are constituted,
transmitted, acknowledged, modified, or extinguished, unless recorded in the register, if
the object of the presentation of such document is to enforce, to the prejudice of a third
person, a right which should have been recorded." chanrobles virtual law library

In view of the latter part of this article, the question has been raised in this incidental
issue whether the defendants, as heirs of Don Ciriaco Demonteverde, can and should
be regarded as third persons for the purposes of the Mortgage Law, with respect to the
contract executed by Demonteverde and evidenced by the instrument above
mentioned.chanrobles virtual law library

The Mortgaged Law itself, in article 27, gives the definition of a third person, which is,
"he who has not taken part in the act or contract recorded." chanrobles virtual law library

According to this parties to a contract are not third persons; consequently,

Demonteverde was not a third person with respect to the contract entered into by him
and evidenced by the instrument in question. He not being such a third person, neither
can his heirs be so regarded, nor should they be so regarded with respect to the same
contract, because they are only the judicial continuation of his personality, they having
been subrogated, by virtue of the right of succession, to all his rights and obligations, in
accordance with provisions of article 661 of the Civil Code.chanrobles virtual law library
This doctrine, which is a mere consequence of the general principles of law, has
received express sanction, in the decisions of the supreme court of Spain. In its
judgment of the 27th of January, 1881, the latter held that acts, both in court and out,
consented to by the person who lawfully took part therein, are effective with respect to
the heirs or successors of such parties, who are not be regarded as third persons for
this purpose; and in its judgment of the 28th of January, 1892, it was decided by the
same court that heirs are nothing more than the continuation of the legal personality of
their decedent and can not be considered in any degree as third persons within the
meaning of article 27 of the Mortgage Law.chanrobles virtual law library

The defendants, therefore, are not third persons with respect to the contract entered
into by their decedent, Don Ciriaco Demonteverde, in the instrument of February 3,
1883, and they therefore can not avail themselves of the prohibition contained in article
389 of the Mortgage Law for the purpose of opposing the admission of this instrument
as evidence in the case, because not recorded in the registry of property. This
prohibition was established solely and exclusively in favor of those who, within the
meaning of that law, are third persons. Were it otherwise, the position of the defendants
would be superior to that of the person whom they derived their rights, because he, not
being a third person, could not set up such an exception. This would certainly be most
illogical from a legal point of view, in view of the fact that the heir is, as above stated, a
mere continuation of the civil personality of his decedent.chanrobles virtual law library

The defendants not being third persons, it becomes unnecessary to decide whether the
instrument referred to is or is not subject to inscription in accordance with article 2 of the
Mortgage Law, because, at all events, and however this may be, the mere failure to
record the instrument in the registry of property can not be a bar to its admission as
evidence in this case, as the action is not brought against a third person in the sense of
this word as used in the law referred to.chanrobles virtual law library

Consequently we reverse and annul the order of the court below, overruling the motion
made on behalf of Doña Maria Pascuala Dolor, without special condemnation as to the
costs of either instance. So ordered.chanrobles virtual law library

Arellano, C.J., Cooper, Willard and Ladd, JJ., concur.

Torres, J., did not sit in this case.
 EN BANC

[G.R. No. L-6228. January 30, 1911.]

ORTIGA BROTHERS AND CO., Plaintiffs-Appellees, v. FRANCISCO ENAGE,

sheriff of the Province of Leyte, and YAP TICO, Defendants-Appellants.

Chicote and Miranda, for Appellants.

Jose Ma. de Marcaida, for Appellees.

SYLLABUS

1. CLAIMS AGAINST ESTATE; CREDITORS. — A person who is not a creditor of a

deceased, testate or intestate, has no right to intervene either in the proceedings
brought in connection with the estate, or in the settlement of the successions.

2. ID.; ID.; PAYMENT OF CLAIMS. — The creditor of the widow and heirs of a
deceased person is only entitled to collect his claim out of the property which pertains
by inheritance to the said widow and heirs, after all the debts of the testates’ or
intestate’s succession have been paid and when the net assets that are divisible among
the heirs be know, because the debts of the deceased must first be paid before his heirs
can inherit.

3. ID.; ID.; ATTACHMENT. — It is improper to levy an attachment upon property which

as ceased to belong to an undivided estate and which has passed under the control of a
third person whose credit against the deceased was duly recognized, without
opposition, by the committee of appraisal, when the said property does not constitute
the remainder of the estate, divisible among the heirs, left after the debts of the
deceased have been paid.

4. ID.; ID.; OWNERSHIP OF PROPERTY TRANSFERRED. — Creditors who have

obtained the possession of any property through the transfer thereof in their favor by the
administrator or administratrix of an estate, must be considered as the legitimate
owners of the property ceded or transferred, so long as the cession or transfer of the
same is not annulled by an express judicial declaration made in a proper action brought
on the ground of some vice or defect tending to nullify the same.

5. PLEADING AND PRACTICE; ATTORNEY AND CLIENT; COSTS AND FEES. —

Attorneys’ fees are not comprised within the expenses and costs of any trial or
proceeding, specified as fees that must be paid by the parties to the suit, pursuant to
the provisions of section 785 and following of the Code of Civil Procedure.

DECISION

TORRES, J.:

On December 1, 1908, the plaintiff’s counsel filed a written complaint with the Court of
First Instance of Leyte alleging as grounds of action: That the plaintiff party was a
mercantile partnership company established in these Islands, in accordance with the
laws in force, with residence in the city of Manila and several branch offices in different
parts of the Archipelago, its principal business being the purchase and sale of hemp,
rice, copra and other domestic and foreign products; that it was the owner of a pier for
the service of steamers at the port of Tacloban, Leyte, which pier was acquired from the
defunct commercial house of Pablo Ortiga, to whose business, real and personal
properties, rights and actions the plaintiffs succeeded and of which they took charge by
virtue of an agreement between the heirs of the deceased Ortiga who were then the
members of the plaintiff company; that the defendant Francisco Enage, the sheriff of the
Province of Leyte, on or about the 8th of November, 1908, through his deputy, Cornelio
Manalo, and in compliance with an order of execution issued by the Court of First
Instance of Manila, at the request of the defendant, Yap Tico, against the property of
Juana Mercado, Felix Villa and the minors Mercedes, Julian, Felisa and Joaquina Villa,
attached the undivided half of the said pier, for the reason that one-half of the same
belonged to the judgment debtors aforementioned; and notwithstanding that the proper
affidavit was presented to the sheriff by the plaintiff firm, in order that he might desist
from attaching the said half of the pier of the firm’s exclusive ownership, and, though at
the beginning the sheriff acceded to its request, yet, a bond having been given by Yap
Tico to indemnify the sheriff against any claim which might arise by reason of the
attachment, this official, on November 23, 1908, proceeded with the attachment of the
said undivided half of the pier and endeavored to sell it, according to the notices given,
for the purpose of satisfying the judgment rendered by the Court of First Instance of
Manila, in favor of Yap Tico and against the said Juana Mercado, Felix Villa and the
minors, Mercedes, Julian, Felisa and Joaquina Villa; that these judgment debtors, none
of them, at any time held and owned one-half of the said pier, nor were they then, at the
time of the presentation of the complaint, the possessors and owners thereof, since the
said half of the pier belonged to the plaintiff company, who acquired it from the intestate
estate of the deceased Ildefonso Villa Lim Yamco by virtue of a conveyance or sale
made on August 17, 1907, through the administratrix of the said estate to the
aforementioned firm of Pablo Ortiga, with the authorization of the court, in payment of a
part of a certain debt of the estate before referred to; that all the facts alleged by the
plaintiff company were known to the defendants, and to each one of them, prior to and
at the time of the attachment of the said one-half of the pier, and that, notwithstanding,
the defendants, maliciously and with the deliberate intention of prejudicing and injuring
the plaintiffs’ interests by causing them to incur unnecessary expenses, brought about
the attachment of the said property, and on account of such procedure on the part of the
defendants and in order that the plaintiffs might protect their interests, the latter had to
employ an attorney whose professional fees, amounting to P600, were contracted for
and paid, in addition to other expenses; and that the sheriff, unless prevented by the
court, would proceed to sell the half of the said pier to the detriment of the plaintiffs’
rights, against which act they had not the remedy of appeal, nor any other expeditious
remedy; wherefore they prayed the court to issue a writ of injunction against the sheriff,
in order that, during the pendency of this claim, he should refrain from selling the said
one-half of the pier and desist from executing any act tending to the same purpose. The
plaintiffs further prayed that judgment be rendered whereby it be declared that the pier
in question is the exclusive property of the plaintiff company and that the attachment
levied on the same is unjust and malicious. The plaintiffs also asked that the defendants
be sentenced to pay to them P600 on account of the expenses incurred, and the costs
of the trial.
The demurrer to the complaint having been overruled, the defendants in their answer,
through their counsel, denied each and all of them allegations contained in each and
every paragraph of the said complaint and asked that they be absolved therefrom, with
the costs against the plaintiff.

The defendant, F. M. Yap Tico, appearing separately by counsel, alleged in his

amended answer of July 13, 1909, that he denied each and every allegation contained
in each and every one of the paragraphs of the complaint; that, as special defenses, he
set forth: That the plaintiff party lacked the personality requisite for the prosecution of
the action instituted; that one-half of the said pier belonged exclusively to the intestate
estate of Ildefonso Villa Lim Yamco, the judicially declared heirs of whom were Juana
Mercado, Felix Villa, and the minors, Mercedes, Julian, Felisa and Joaquina Villa,
residing in Tanauan, Leyte; that the attachment levied upon the one-half of the said pier,
was made at the instance of Juana Mercado as the administratrix of the aforementioned
estate and with the approval of the heirs thereof, in order to satisfy the claim held by the
defendant Yap Tico against the said estate of Lim Yamco; that, in the highly improbable
case that Yap Tico should not be considered as a creditor of the intestate Lim Yamco,
but simply of the latter’s heirs, he would make no claim to acquire over the said half of
the disputed pier any other right, interest and share except such as pertain or may
pertain to the said Juana Mercado and other of her coheirs; that the sale or transfer, in
payment of the said half of the pier, which the plaintiff alleged had been made in the
latter’s favor by the administratrix of the intestate estate, Juana Mercado, was effected
without the knowledge and authorization of a competent court and, therefore, was null
and void, for the said sale or transfer prejudiced and was still prejudicing the interests of
the estate of the deceased Lim Yamco, the creditors of the estate and also the heirs of
the said deceased, as well as the rights of the creditors of such heirs, by preventing
them from realizing upon their claims and with the rights, interest and share which
pertained or might pertain to each one and all of the said heirs; and that the defendant
had carried on with the plaintiffs friendly negotiations in order to convince them of the
reality of his right in the one-half of the said pier, but that the plaintiffs did not respond to
such act of loyalty and unjustly compelled him to maintain the present suit which, if it
had not been for the plaintiffs’ procedure, he never would have contemplated; wherefore
the defendant asked that the complaint be dismissed with the costs against the plaintiff
company.

The case came to trial, oral evidence was introduced by both parties, the documents
exhibited being attached to the record, and the court, on April 25, 1910, rendered
judgment whereby it found that the one-half of the pier in question belonged to the
plaintiff company and not to the judgment debtors, Juana Mercado, Felix, Mercedes,
Julian, Joaquina, and Felisa Villa, and that the attachment levied upon the said one-half
of the pier was unjust and malicious, sentenced the defendants to pay to the plaintiffs
the sum of P600 for the damages caused to the latter by reason of the said attachment,
and ordered the sheriff and the other defendant, Yap Tico, to refrain from performing
any acts whatsoever tending to the prosecution of the said attachment, with the costs
against the defendants. The latter’s counsel, having been notified of this judgment, took
exception thereto and by a written motion asked for a new trial, on the ground that such
judgment was openly and manifestly contrary to the weight of the evidence and to law.
This motion was overruled and exception was taken by the defendants’ counsel, who
duly filed the required bill of exceptions, which was approved, certified to and forwarded
to the clerk of this court.

The writ of execution issued by the Court of First Instance of Manila, at the petition of
the Chinaman Yap Tico, was intended to obtain the collection of a debt contracted in
favor of the latter by Juana Mercado, Felix, Mercedes, Julian, Felisa and Joaquina Villa,
the widow and heirs of the deceased Ildefonso Villa Lim Yamco, and for this purpose
the undivided one-half of the pier, used for the service of steamers and constructed at
the wharf of the port of Tacloban, was attached by the sheriff of the Province of Leyte,
as belonging to the said debtors.

The pier aforementioned originally belonged, half to Pablo Ortiga and half to Ildefonso
Villa, and when the latter died, on July 16, 1899, the one-half of the said pier was
transferred or ceded in payment of a part of what was found to be owing by his intestate
estate, to his co-owner, Ortiga, to whose rights the plaintiffs, Ortiga Brothers and
Company, in turn succeeded, as shown by the record of proceedings, attached as
Exhibit 2, had in the Court of First Instance of Leyte in connection with the settlement of
the intestate estate of the aforesaid Ildefonso Villa Lim Yamco. So that the credit for the
payment of which an attachment was levied upon the said half of the pier, is not one
against the intestate succession of the deceased, Yamco, but against his widow and
heirs; and it is not shown in the aforesaid record of proceedings that the judgment
creditor, Yap Tico, was a creditor of the said intestate, as no credit whatever in the
name of the said Yap Tico appears among those which were recognized and admitted
as legitimate by the committee of appraisal appointed by that court.

A person who, having a claim against a deceased person which should be considered
by the committee does not, after publication of the required notice, exhibit his claim to
the committee as provided by law, shall be barred from recovering such demand or from
pleading the same as an offset to any action, under the provisions of section 695 of the
Code of Civil Procedure, excepting the case referred to in section 701 of the same; with
still less reason can one who is not a creditor of the said deceased intervene in the
proceedings relative to the latter’s intestate estate and to the settlement of his
succession (article 1034 of the Civil Code), because such creditor has no right or
interest that call for the protection of the law and the courts, except in any remainder
which may be found due the heirs.

It is true that Yap Tico, as the creditor of the widow and heirs of the deceased Ildefonso,
is entitled to collect what is due him out of the property left by the latter and which was
inherited by such widow and heirs, but it is no less true that only after all the debts of the
said estate have been paid can it be known what net remainder will be left for division
among the heirs, because the debts of the deceased must be paid before his heirs can
inherit. (Arts. 659 et seq., 1026, 1027 and 1032 of the Civil Code, and secs. 734 et seq.,
Code of Civil Procedure.)

An execution can not legally be levied upon the property of an intestate succession to
pay the debts of the widow and heirs of the deceased, until the credits held against the
latter at the time of his death shall have been paid, and only after the debts of the estate
have been paid can the remaining property that pertains to the said debtor heirs be
attached. (Art. 1034, aforecited, Civil Code.)

From the record of the proceedings beforementioned it is not found that the attached
one-half of the pier forms a part of the property remaining after payment of the debts
against the said intestate estate, nor that it continues to belong to the assets of the
estate left by the deceased Ildefonso Villa Lim Yamco; on the contrary, it appears from
the said proceedings that the said one-half of the pier was transferred to Pablo Ortiga,
the owner of the other half and the plaintiffs’ predecessor in interest, in partial payment
of a larger sum which the deceased Ildefonso Villa owed Ortiga, as specified by the
debtor’s widow, the administratrix of his intestate estate, on August 17, 1907, as may be
seen by the writ issued on May 14 by order of the Hon. Judge W. F. Norris, p. 104 of the
trial record, which does not show that the said transfer in partial payment was impugned
by any of the interested parties or by other creditors of the estate; the debt of 1,885
pesos 43 centavos and 6 centavos due the Ortiga firm, the plaintiffs’ predecessor in
interest, and secured by the said one-half of the pier, was recognized and admitted, with
two other debts, by the committee on claims in its report of March 30, 1907, page 70 of
the record, which report was approved by the said judge in his order of April 30, 1907,
page 76 of the record. It is to be noted that the order of August 30, 1906, a copy of
which was exhibited under letter D, and which, according to the certification of the
annotations of docket, Exhibit 3, was annulled by another order of November 26 of the
same year, relates to the sum of P8,081.77, another debt of the intestate to the Ortiga
firm, admitted by the committee of appraisal in its previous report of June 28, 1906,
page 36 of the trial record.

The attachment levied upon the one-half of the said pier, at the instance of the
defendant, Yap Tico, is, the, evidently and unquestionably improper, not only because
the said defendant is not a creditor of the intestate estate of the deceased Ildefonso
Villa Lim Yamco, but also because the said one-half of the pier became the property of
the plaintiffs, as a partial payment of a certain debt of the deceased. The plaintiffs must
be considered as the legitimate owners of the said one-half of the pier, so long as the
cession or transfer of the same is not annulled by an express judicial decree, through
the prosecution of the proper action brought on the ground of some vice or defect
tending to nullify the same.

With respect to the professional fees which the plaintiffs stated they had to pay their
attorney for the prosecution of the action in order to protect their rights, which fees
amounted to P600, it must be borne in mind that attorney’s fees are not included within
the expenses and costs of any trial or proceedings, specified as fees to be paid by the
parties to the suit, pursuant to the provisions of sections 785 and following of the Code
of Civil Procedure; and therefore the defendants are not compelled to pay the said sum
to the plaintiffs.

For the foregoing reasons, it is proper, in our opinion, to affirm the judgment appealed
from, as we hereby do, except the finding therein whereby the defendants are
sentenced to pay P600 to the plaintiffs, which finding we expressly reverse. The costs of
this instance shall be assessed against the appellants. So ordered.

Arellano, C.J., Mapa, Moreland and Trent, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-41715 June 18, 1976

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO

BONILLA (their father) who represents the minors, petitioners,
vs.
LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL
BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and HON. LEOPOLDO
GIRONELLA of the Court of First Instance of Abra, respondents.

Federico Paredes for petitioners.

Demetrio V. Pre for private respondents.

MARTIN, J:

This is a petition for review 1 of the Order of the Court of First Instance of Abra in Civil
Case No. 856, entitled Fortunata Barcena vs. Leon Barcena, et al., denying the motions
for reconsideration of its order dismissing the complaint in the aforementioned case.

On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion
Bonilla and wife of Ponciano Bonilla, instituted a civil action in the Court of First Instance
of Abra, to quiet title over certain parcels of land located in Abra.

On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before
the hearing of the motion to dismiss, the counsel for the plaintiff moved to amend the
complaint in order to include certain allegations therein. The motion to amend the
complaint was granted and on July 17, 1975, plaintiffs filed their amended complaint.

On August 4, 1975, the defendants filed another motion to dismiss the complaint on the
ground that Fortunata Barcena is dead and, therefore, has no legal capacity to sue.
Said motion to dismiss was heard on August 14, 1975. In said hearing, counsel for the
plaintiff confirmed the death of Fortunata Barcena, and asked for substitution by her
minor children and her husband, the petitioners herein; but the court after the hearing
immediately dismissed the case on the ground that a dead person cannot be a real
party in interest and has no legal personality to sue.

On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the
complaint and on August 23, 1975, he moved to set aside the order of the dismissal
pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court. 2

On August 28, 1975, the court denied the motion for reconsideration filed by counsel for
the plaintiff for lack of merit. On September 1, 1975, counsel for deceased plaintiff filed
a written manifestation praying that the minors Rosalio Bonilla and Salvacion Bonilla be
allowed to substitute their deceased mother, but the court denied the counsel's prayer
for lack of merit. From the order, counsel for the deceased plaintiff filed a second motion
for reconsideration of the order dismissing the complaint claiming that the same is in
violation of Sections 16 and 17 of Rule 3 of the Rules of Court but the same was
denied.

Hence, this petition for review.

The Court reverses the respondent Court and sets aside its order dismissing the
complaint in Civil Case No. 856 and its orders denying the motion for reconsideration of
said order of dismissal. While it is true that a person who is dead cannot sue in court,
yet he can be substituted by his heirs in pursuing the case up to its completion. The
records of this case show that the death of Fortunata Barcena took place on July 9,
1975 while the complaint was filed on March 31, 1975. This means that when the
complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore,
the court had acquired jurisdiction over her person. If thereafter she died, the Rules of
Court prescribes the procedure whereby a party who died during the pendency of the
proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court
"whenever a party to a pending case dies ... it shall be the duty of his attorney to inform
the court promptly of such death ... and to give the name and residence of his executor,
administrator, guardian or other legal representatives." This duty was complied with by
the counsel for the deceased plaintiff when he manifested before the respondent Court
that Fortunata Barcena died on July 9, 1975 and asked for the proper substitution of
parties in the case. The respondent Court, however, instead of allowing the substitution,
dismissed the complaint on the ground that a dead person has no legal personality to
sue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the
succession are transmitted from the moment of the death of the decedent." From the
moment of the death of the decedent, the heirs become the absolute owners of his
property, subject to the rights and obligations of the decedent, and they cannot be
deprived of their rights thereto except by the methods provided for by law. 3 The
moment of death is the determining factor when the heirs acquire a definite right to the
inheritance whether such right be pure or contingent. 4 The right of the heirs to the
property of the deceased vests in them even before judicial declaration of their being
heirs in the testate or intestate proceedings. 5 When Fortunata Barcena, therefore, died
her claim or right to the parcels of land in litigation in Civil Case No. 856, was not
extinguished by her death but was transmitted to her heirs upon her death. Her heirs
have thus acquired interest in the properties in litigation and became parties in interest
in the case. There is, therefore, no reason for the respondent Court not to allow their
substitution as parties in interest for the deceased plaintiff.

Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not
thereby extinguished, the court shall order, upon proper notice, the legal representative
of the deceased to appear and be substituted for the deceased, within such time as may
be granted ... ." The question as to whether an action survives or not depends on the
nature of the action and the damage sued for. 6 In the causes of action which survive
the wrong complained affects primarily and principally property and property rights, the
injuries to the person being merely incidental, while in the causes of action which do not
survive the injury complained of is to the person, the property and rights of property
affected being incidental. 7 Following the foregoing criterion the claim of the deceased
plaintiff which is an action to quiet title over the parcels of land in litigation affects
primarily and principally property and property rights and therefore is one that survives
even after her death. It is, therefore, the duty of the respondent Court to order the legal
representative of the deceased plaintiff to appear and to be substituted for her. But what
the respondent Court did, upon being informed by the counsel for the deceased plaintiff
that the latter was dead, was to dismiss the complaint. This should not have been done
for under the same Section 17, Rule 3 of the Rules of Court, it is even the duty of the
court, if the legal representative fails to appear, to order the opposing party to procure
the appointment of a legal representative of the deceased. In the instant case the
respondent Court did not have to bother ordering the opposing party to procure the
appointment of a legal representative of the deceased because her counsel has not
only asked that the minor children be substituted for her but also suggested that their
uncle be appointed as guardian ad litem for them because their father is busy in Manila
earning a living for the family. But the respondent Court refused the request for
substitution on the ground that the children were still minors and cannot sue in court.
This is another grave error because the respondent Court ought to have known that
under the same Section 17, Rule 3 of the Rules of Court, the court is directed to appoint
a guardian ad litem for the minor heirs. Precisely in the instant case, the counsel for the
deceased plaintiff has suggested to the respondent Court that the uncle of the minors
be appointed to act as guardian ad litem for them. Unquestionably, the respondent
Court has gravely abused its discretion in not complying with the clear provision of the
Rules of Court in dismissing the complaint of the plaintiff in Civil Case No. 856 and
refusing the substitution of parties in the case.

IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the
complaint in Civil Case No. 856 of the Court of First Instance of Abra and the motions
for reconsideration of the order of dismissal of said complaint are set aside and the
respondent Court is hereby directed to allow the substitution of the minor children, who
are the petitioners therein for the deceased plaintiff and to appoint a qualified person as
guardian ad litem for them. Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma, JJ., concur.

Footnotes

1 Which this Court treats as special civil action as per its Resolution dated
February 11, 1976.

2 Section 16. Duty of Attorney upon which death, incapacity or

incompetency of party. - Whenever a party to a pending case dies,
becomes incapacitated or incompetent, it shall be the duty of his attorney
to inform the court promptly of such death, incapacity or incompetency,
and to give the name and residence of his executor, administrator,
guardian or other legal representative.

Section 17. Death of party.—After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for
deceased, within a period of thirty (30) days, or within such time as may
be granted. If the legal representative fails to appear within said time, the
court may order the opposing party to procure the appointment of a legal
representative of the within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of
the deceased. The court charges involved in procuring such appointment,
if defrayed by the opposing party, may be recovered as costs. The heirs of
the deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator and the court
may appoint guardian ad litem for the minor heirs.

3 Buan vs. Heirs of Buan, 53 Phil. 654.

4 Ibarle vs. Po, 92 Phil. 721.

5 Morales, et al. vs. Ybanez, 98 Phil. 677.

6 Iron Gate Bank vs. Brady, 184 U.S. 665, 22 SCT 529, 46 L. ed. 739.

7 Wenber vs. St. Paul City Co., 97 Feb. 140 R. 39 C.C.A. 79.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-4963             January 29, 1953

MARIA USON, plaintiff-appellee,
vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA,
DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr., defendants-appellants.

Priscilo Evangelista for appellee.

Brigido G. Estrada for appellant.

BAUTISTA ANGELO, J.:

This is an action for recovery of the ownership and possession of five (5) parcels of land
situated in the Municipality of Labrador, Province of Pangasinan, filed by Maria Uson
against Maria del Rosario and her four children named Concepcion, Conrado,
Dominador, and Faustino, surnamed Nebreda, who are all of minor age, before the
Court of First Instance of Pangasinan.

Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the
lands involved in this litigation. Faustino Nebreda left no other heir except his widow
Maria Uson. However, plaintiff claims that when Faustino Nebreda died in 1945, his
common-law wife Maria del Rosario took possession illegally of said lands thus
depriving her of their possession and enjoyment.

Defendants in their answer set up as special defense that on February 21, 1931, Maria
Uson and her husband, the late Faustino Nebreda, executed a public document
whereby they agreed to separate as husband and wife and, in consideration of their
separation, Maria Uson was given a parcel of land by way of alimony and in return she
renounced her right to inherit any other property that may be left by her husband upon
his death (Exhibit 1).

After trial, at which both parties presented their respective evidence, the court rendered
decision ordering the defendants to restore to the plaintiff the ownership and possession
of the lands in dispute without special pronouncement as to costs. Defendants
interposed the present appeal.

There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino
Nebreda, former owner of the five parcels of lands litigated in the present case. There is
likewise no dispute that Maria del Rosario, one of the defendants-appellants, was
merely a common-law wife of the late Faustino Nebreda with whom she had four
illegitimate children, her now co-defendants. It likewise appears that Faustino Nebreda
died in 1945 much prior to the effectivity of the new Civil Code. With this background, it
is evident that when Faustino Nebreda died in 1945 the five parcels of land he was
seized of at the time passed from the moment of his death to his only heir, his widow
Maria Uson (Article 657, old Civil Code).As this Court aptly said, "The property belongs
to the heirs at the moment of the death of the ancestor as completely as if the ancestor
had executed and delivered to them a deed for the same before his death" (Ilustre vs.
Alaras Frondosa, 17 Phil., 321). From that moment, therefore, the rights of inheritance
of Maria Uson over the lands in question became vested.

The claim of the defendants that Maria Uson had relinquished her right over the lands in
question because she expressly renounced to inherit any future property that her
husband may acquire and leave upon his death in the deed of separation they had
entered into on February 21, 1931, cannot be entertained for the simple reason that
future inheritance cannot be the subject of a contract nor can it be renounced (1
Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio and
Ynchausti Steamship Co., 41 Phil., 531).

But defendants contend that, while it is true that the four minor defendants are
illegitimate children of the late Faustino Nebreda and under the old Civil Code are not
entitled to any successional rights, however, under the new Civil Code which became in
force in June, 1950, they are given the status and rights of natural children and are
entitled to the successional rights which the law accords to the latter (article 2264 and
article 287, new Civil Code), and because these successional rights were declared for
the first time in the new code, they shall be given retroactive effect even though the
event which gave rise to them may have occurred under the prior legislation (Article
2253, new Civil Code).

There is no merit in this claim. Article 2253 above referred to provides indeed that rights
which are declared for the first time shall have retroactive effect even though the event
which gave rise to them may have occurred under the former legislation, but this is so
only when the new rights do not prejudice any vested or acquired right of the same
origin. Thus, said article provides that "if a right should be declared for the first time in
this Code, it shall be effective at once, even though the act or event which gives rise
thereto may have been done or may have occurred under the prior legislation, provided
said new right does not prejudice or impair any vested or acquired right, of the same
origin." As already stated in the early part of this decision, the right of ownership of
Maria Uson over the lands in question became vested in 1945 upon the death of her
late husband and this is so because of the imperative provision of the law which
commands that the rights to succession are transmitted from the moment of death
(Article 657, old Civil Code). The new right recognized by the new Civil Code in favor of
the illegitimate children of the deceased cannot, therefore, be asserted to the
impairment of the vested right of Maria Uson over the lands in dispute.

As regards the claim that Maria Uson, while her deceased husband was lying in state, in
a gesture of pity or compassion, agreed to assign the lands in question to the minor
children for the reason that they were acquired while the deceased was living with their
mother and Maria Uson wanted to assuage somewhat the wrong she has done to them,
this much can be said; apart from the fact that this claim is disputed, we are of the
opinion that said assignment, if any, partakes of the nature of a donation of real
property, inasmuch as it involves no material consideration, and in order that it may be
valid it shall be made in a public document and must be accepted either in the same
document or in a separate one (Article 633, old Civil Code). Inasmuch as this essential
formality has not been followed, it results that the alleged assignment or donation has
no valid effect.

WHEREFORE, the decision appealed from is affirmed, without costs.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and Labrador,
JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-28040 August 18, 1972

TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administrator-

appellee; JOSE DE BORJA, as administrator, CAYETANO DE BORJA, MATILDE
DE BORJA and CRISANTO DE BORJA (deceased) as Children of Josefa
Tangco, appellees,
vs.
TASIANA VDA. DE DE BORJA, Special Administratrix of the Testate Estate of
Francisco de Borja, appellant. .

G.R. No L-28568 August 18, 1972

TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA. DE

DE BORJA, special Administratrix appellee,
vs.
JOSE DE BORJA, oppositor-appellant.

G.R. No. L-28611 August 18, 1972

TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate Estate of the late

Francisco de Borja, plaintiff-appellee,
vs.
JOSE DE BORJA, as Administrator of the Testate Estate of the late Josefa
Tangco, defendant-appellant.

L-28040

Pelaez, Jalandoni & Jamir for administrator-appellee.

Quiogue & Quiogue for appellee Matilde de Borja.

Andres Matias for appellee Cayetano de Borja.

Sevilla & Aquino for appellant.

L-28568

Sevilla & Aquino for special administratrix-appellee.

Pelaez, Jalandoni & Jamir for oppositor-appellant.

L-28611

Sevilla & Aquino for plaintiff-appellee.

Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant.

REYES, J.B.L., J.:p

Of these cases, the first, numbered L-28040 is an appeal by Tasiana Ongsingco Vda.
de de Borja, special administratrix of the testate estate of Francisco de Borja, 1 from the
approval of a compromise agreement by the Court of First Instance of Rizal, Branch I, in
its Special Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco, Jose de
Borja, Administrator".

Case No. L-28568 is an appeal by administrator Jose Borja from the disapproval of the
same compromise agreement by the Court of First Instance of Nueva Ecija, Branch II, in
its Special Proceeding No. 832, entitled, "Testate Estate of Francisco de Borja, Tasiana
O. Vda. de de Borja, Special Administratrix".

And Case No. L-28611 is an appeal by administrator Jose de Borja from the decision of
the Court of First Instance of Rizal, Branch X, in its Civil Case No. 7452, declaring the
Hacienda Jalajala Poblacion, which is the main object of the aforesaid compromise
agreement, as the separate and exclusive property of the late Francisco de Borja and
not a conjugal asset of the community with his first wife, Josefa Tangco, and that said
hacienda pertains exclusively to his testate estate, which is under administrator in
Special Proceeding No. 832 of the Court of First Instance of Nueva Ecija, Branch II.

It is uncontested that Francisco de Borja, upon the death of his wife Josefa Tangco on 6
October 1940, filed a petition for the probate of her will which was docketed as Special
Proceeding No. R-7866 of the Court of First Instance of Rizal, Branch I. The will was
probated on 2 April 1941. In 1946, Francisco de Borja was appointed executor and
administrator: in 1952, their son, Jose de Borja, was appointed co-administrator. When
Francisco died, on 14 April 1954, Jose became the sole administrator of the testate
estate of his mother, Josefa Tangco. While a widower Francisco de Borja allegedly took
unto himself a second wife, Tasiana Ongsingco. Upon Francisco's death, Tasiana
instituted testate proceedings in the Court of First Instance of Nueva Ecija, where, in
1955, she was appointed special administratrix. The validity of Tasiana's marriage to
Francisco was questioned in said proceeding.

The relationship between the children of the first marriage and Tasiana Ongsingco has
been plagued with several court suits and counter-suits; including the three cases at
bar, some eighteen (18) cases remain pending determination in the courts. The testate
estate of Josefa Tangco alone has been unsettled for more than a quarter of a century.
In order to put an end to all these litigations, a compromise agreement was entered into
on 12 October 1963,2 by and between "[T]he heir and son of Francisco de Borja by his
first marriage, namely, Jose de Borja personally and as administrator of the Testate
Estate of Josefa Tangco," and "[T]he heir and surviving spouse of Francisco de Borja by
his second marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer, Atty.
Luis Panaguiton Jr." The terms and conditions of the compromise agreement are as
follows:

AGREEMENT

THIS AGREEMENT made and entered into by and between

The heir and son of Francisco de Borja by his first marriage, namely, Jose
de Borja personally and as administrator of the Testate Estate of Josefa
Tangco,

AND
 The heir and surviving spouse of Francisco de Borja by his second
marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer, Atty.
Luis Panaguiton Jr.

WITNESSETH

THAT it is the mutual desire of all the parties herein terminate and settle,
with finality, the various court litigations, controversies, claims,
counterclaims, etc., between them in connection with the administration,
settlement, partition, adjudication and distribution of the assets as well as
liabilities of the estates of Francisco de Borja and Josefa Tangco, first
spouse of Francisco de Borja.

THAT with this end in view, the parties herein have agreed voluntarily and
without any reservations to enter into and execute this agreement under
the following terms and conditions:

1. That the parties agree to sell the Poblacion portion of the Jalajala
properties situated in Jalajala, Rizal, presently under administration in the
Testate Estate of Josefa Tangco (Sp. Proc. No. 7866, Rizal), more
specifically described as follows:

Linda al Norte con el Rio Puwang que la separa de la

jurisdiccion del Municipio de Pililla de la Provincia de Rizal, y
con el pico del Monte Zambrano; al Oeste con Laguna de
Bay; por el Sur con los herederos de Marcelo de Borja; y por
el Este con los terrenos de la Familia Maronilla

with a segregated area of approximately 1,313 hectares at the amount of

P0.30 per square meter.

2. That Jose de Borja agrees and obligates himself to pay Tasiana

Ongsingco Vda. de de Borja the total amount of Eight Hundred Thousand
Pesos (P800,000) Philippine Currency, in cash, which represent P200,000
as his share in the payment and P600,000 as pro-rata shares of the heirs
Crisanto, Cayetano and Matilde, all surnamed de Borja and this shall be
considered as full and complete payment and settlement of her hereditary
share in the estate of the late Francisco de Borja as well as the estate of
Josefa Tangco, Sp. Proc. No. 832-Nueva Ecija and Sp. Proc. No. 7866-
Rizal, respectively, and to any properties bequeathed or devised in her
favor by the late Francisco de Borja by Last Will and Testament or by
Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise. The funds for this payment shall be taken from
and shall depend upon the receipt of full payment of the proceeds of the
sale of Jalajala, "Poblacion."

3. That Tasiana Ongsingco Vda. de de Borja hereby assumes payment of

that particular obligation incurred by the late Francisco de Borja in favor of
the Rehabilitation Finance Corporation, now Development Bank of the
Philippines, amounting to approximately P30,000.00 and also assumes
payment of her 1/5 share of the Estate and Inheritance taxes on the
Estate of the late Francisco de Borja or the sum of P3,500.00, more or
less, which shall be deducted by the buyer of Jalajala, "Poblacion" from
the payment to be made to Tasiana Ongsingco Vda. de Borja under
 paragraph 2 of this Agreement and paid directly to the Development Bank
of the Philippines and the heirs-children of Francisco de Borja.

4. Thereafter, the buyer of Jalajala "Poblacion" is hereby authorized to pay

directly to Tasiana Ongsingco Vda. de de Borja the balance of the
payment due her under paragraph 2 of this Agreement (approximately
P766,500.00) and issue in the name of Tasiana Ongsingco Vda. de de
Borja, corresponding certified checks/treasury warrants, who, in turn, will
issue the corresponding receipt to Jose de Borja.

5. In consideration of above payment to Tasiana Ongsingco Vda. de de

Borja, Jose de Borja personally and as administrator of the Testate Estate
of Josefa Tangco, and Tasiana Ongsingco Vda. de de Borja, for
themselves and for their heirs, successors, executors, administrators, and
assigns, hereby forever mutually renounce, withdraw, waive, remise,
release and discharge any and all manner of action or actions, cause or
causes of action, suits, debts, sum or sums of money, accounts,
damages, claims and demands whatsoever, in law or in equity, which they
ever had, or now have or may have against each other, more specifically
Sp. Proceedings Nos. 7866 and 1955, CFI-Rizal, and Sp. Proc. No. 832-
Nueva Ecija, Civil Case No. 3033, CFI Nueva Ecija and Civil Case No.
7452-CFI, Rizal, as well as the case filed against Manuel Quijal for perjury
with the Provincial Fiscal of Rizal, the intention being to completely,
absolutely and finally release each other, their heirs, successors, and
assigns, from any and all liability, arising wholly or partially, directly or
indirectly, from the administration, settlement, and distribution of the
assets as well as liabilities of the estates of Francisco de Borja and Josefa
Tangco, first spouse of Francisco de Borja, and lastly, Tasiana Ongsingco
Vda. de de Borja expressly and specifically renounce absolutely her rights
as heir over any hereditary share in the estate of Francisco de Borja.

6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the payment

under paragraph 4 hereof, shall deliver to the heir Jose de Borja all the
papers, titles and documents belonging to Francisco de Borja which are in
her possession and said heir Jose de Borja shall issue in turn the
corresponding receive thereof.

7. That this agreement shall take effect only upon the fulfillment of the sale
of the properties mentioned under paragraph 1 of this agreement and
upon receipt of the total and full payment of the proceeds of the sale of the
Jalajala property "Poblacion", otherwise, the non-fulfillment of the said
sale will render this instrument NULL AND VOID AND WITHOUT EFFECT
THEREAFTER.

IN WITNESS WHEREOF, the parties hereto have her unto set their hands
in the City of Manila, Philippines, the 12th of October, 1963.

On 16 May 1966, Jose de Borja submitted for Court approval the agreement of 12
October 1963 to the Court of First Instance of Rizal, in Special Proceeding No. R-7866;
and again, on 8 August 1966, to the Court of First Instance of Nueva Ecija, in Special
Proceeding No. 832. Tasiana Ongsingco Vda. de de Borja opposed in both instances.
The Rizal court approved the compromise agreement, but the Nueva Ecija court
declared it void and unenforceable. Special administratrix Tasiana Ongsingco Vda. de
de Borja appealed the Rizal Court's order of approval (now Supreme Court G.R. case
No. L-28040), while administrator Jose de Borja appealed the order of disapproval (G.R.
case No. L-28568) by the Court of First Instance of Nueva Ecija.

The genuineness and due execution of the compromised agreement of 12 October

1963 is not disputed, but its validity is, nevertheless, attacked by Tasiana Ongsingco on
the ground that: (1) the heirs cannot enter into such kind of agreement without first
probating the will of Francisco de Borja; (2) that the same involves a compromise on the
validity of the marriage between Francisco de Borja and Tasiana Ongsingco; and (3)
that even if it were valid, it has ceased to have force and effect.

In assailing the validity of the agreement of 12 October 1963, Tasiana Ongsingco and
the Probate Court of Nueva Ecija rely on this Court's decision in Guevara vs. Guevara.
74 Phil. 479, wherein the Court's majority held the view that the presentation of a will for
probate is mandatory and that the settlement and distribution of an estate on the basis
of intestacy when the decedent left a will, is against the law and public policy. It is
likewise pointed out by appellant Tasiana Ongsingco that Section 1 of Rule 74 of the
Revised Rules explicitly conditions the validity of an extrajudicial settlement of a
decedent's estate by agreement between heirs, upon the facts that "(if) the
decedent left no will and no debts, and the heirs are all of age, or the minors are
represented by their judicial and legal representatives ..." The will of Francisco de Borja
having been submitted to the Nueva Ecija Court and still pending probate when the
1963 agreement was made, those circumstances, it is argued, bar the validity of the
agreement.

Upon the other hand, in claiming the validity of the compromise agreement, Jose de
Borja stresses that at the time it was entered into, on 12 October 1963, the governing
provision was Section 1, Rule 74 of the original Rules of Court of 1940, which allowed
the extrajudicial settlement of the estate of a deceased person regardless of whether he
left a will or not. He also relies on the dissenting opinion of Justice Moran, in Guevara
vs. Guevara, 74 Phil. 479, wherein was expressed the view that if the parties have
already divided the estate in accordance with a decedent's will, the probate of the will is
a useless ceremony; and if they have divided the estate in a different manner, the
probate of the will is worse than useless.

The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar. This is
apparent from an examination of the terms of the agreement between Jose de Borja
and Tasiana Ongsingco. Paragraph 2 of said agreement specifically stipulates that the
sum of P800,000 payable to Tasiana Ongsingco —

shall be considered as full — complete payment — settlement of her

hereditary share in the estate of the late Francisco de Borja as well as the
estate of Josefa Tangco, ... and to any properties bequeathed or devised
in her favor by the late Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise.

This provision evidences beyond doubt that the ruling in the Guevara case is not
applicable to the cases at bar. There was here no attempt to settle or distribute the
estate of Francisco de Borja among the heirs thereto before the probate 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)3 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. 4 Of course, the effect of such alienation is to be
deemed limited to what is ultimately adjudicated to the vendor heir. However, the
aleatory character of the contract does not affect the validity of the transaction; neither
does the coetaneous agreement that the numerous litigations between the parties (the
approving order of the Rizal Court enumerates fourteen of them, Rec. App. pp. 79-82)
are to be considered settled and should be dismissed, although such stipulation, as
noted by the Rizal Court, gives the contract the character of a compromise that the law
favors, for obvious reasons, if only because it serves to avoid a multiplicity of suits.

It is likewise worthy of note in this connection that as the surviving spouse of Francisco
de Borja, Tasiana Ongsingco was his compulsory heir under article 995 et seq. of the
present Civil Code. Wherefore, barring unworthiness or valid disinheritance, her
successional interest existed independent of Francisco de Borja's last will and
testament and would exist even if such will were not probated at all. Thus, the
prerequisite of a previous probate of the will, as established in the Guevara and
analogous cases, can not apply to the case of Tasiana Ongsingco Vda. de de Borja.

Since the compromise contract Annex A was entered into by and between "Jose de
Borja personally and as administrator of the Testate Estate of Josefa Tangco" on the
one hand, and on the other, "the heir and surviving spouse of Francisco de Borja by his
second marriage, Tasiana Ongsingco Vda. de de Borja", it is clear that the transaction
was binding on both in their individual capacities, upon the perfection of the contract,
even without previous authority of the Court to enter into the same. The only difference
between an extrajudicial compromise and one that is submitted and approved by the
Court, is that the latter can be enforced by execution proceedings. Art. 2037 of the Civil
Code is explicit on the point:

8. Art. 2037. A compromise has upon the parties the effect and authority
of res judicata; but there shall be no execution except in compliance with a
judicial compromise.

It is argued by Tasiana Ongsingco that while the agreement Annex A

expressed no definite period for its performance, the same
was intended to have a resolutory period of 60 days for its effectiveness.
In support of such contention, it is averred that such a limit was expressly
stipulated in an agreement in similar terms entered into by said Ongsingco
with the brothers and sister of Jose de Borja, to wit, Crisanto, Matilde and
Cayetano, all surnamed de Borja, except that the consideration was fixed
at P600,000 (Opposition, Annex/Rec. of Appeal, L-28040, pp. 39- 46) and
which contained the following clause:

III. That this agreement shall take effect only upon the consummation of
the sale of the property mentioned herein and upon receipt of the total and
full payment of the proceeds of the sale by the herein owner heirs-children
of Francisco de Borja, namely, Crisanto, Cayetano and Matilde, all
surnamed de Borja; Provided that if no sale of the said property mentioned
herein is consummated, or the non-receipt of the purchase price thereof
by the said owners within the period of sixty (60) days from the date
hereof, this agreement will become null and void and of no further effect.
Ongsingco's argument loses validity when it is considered that Jose de Borja was not a
party to this particular contract (Annex 1), and that the same appears not to have been
finalized, since it bears no date, the day being left blank "this — day of October 1963";
and while signed by the parties, it was not notarized, although plainly intended to be so
done, since it carries a proposed notarial ratification clause. Furthermore, the
compromise contract with Jose de Borja (Annex A), provides in its par. 2 heretofore
transcribed that of the total consideration of P800, 000 to be paid to Ongsingco,
P600,000 represent the "prorata share of the heirs Crisanto, Cayetano and Matilde all
surnamed de Borja" which corresponds to the consideration of P600,000 recited in
Annex 1, and that circumstance is proof that the duly notarized contract entered into wit
Jose de Borja under date 12 October 1963 (Annex A), was designed to absorb and
supersede the separate unformalize agreement with the other three Borja heirs. Hence,
the 60 days resolutory term in the contract with the latter (Annex 1) not being repeated
in Annex A, can not apply to the formal compromise with Jose de Borja. It is moreover
manifest that the stipulation that the sale of the Hacienda de Jalajala was to be made
within sixty days from the date of the agreement with Jose de Borja's co-heirs (Annex 1)
was plainly omitted in Annex A as improper and ineffective, since the Hacienda de
Jalajala (Poblacion) that was to be sold to raise the P800,000 to be paid to Ongsingco
for her share formed part of the estate of Francisco de Borja and could not be sold until
authorized by the Probate Court. The Court of First Instance of Rizal so understood it,
and in approving the compromise it fixed a term of 120 days counted from the finality of
the order now under appeal, for the carrying out by the parties for the terms of the
contract.

This brings us to the plea that the Court of First Instance of Rizal had no jurisdiction to
approve the compromise with Jose de Borja (Annex A) because Tasiana Ongsingco
was not an heir in the estate of Josefa Tangco pending settlement in the Rizal Court,
but she was an heir of Francisco de Borja, whose estate was the object of Special
Proceeding No. 832 of the Court of First Instance of Nueva Ecija. This circumstance is
irrelevant, since what was sold by Tasiana Ongsingco was only her eventual share in
the estate of her late husband, not the estate itself; and as already shown, that eventual
share she owned from the time of Francisco's death and the Court of Nueva Ecija could
not bar her selling it. As owner of her undivided hereditary share, Tasiana could dispose
of it in favor of whomsoever she chose. Such alienation is expressly recognized and
provided for by article 1088 of the present Civil Code:

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger
before the partition, any or all of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they
were notified in writing of the sale of the vendor.

If a sale of a hereditary right can be made to a stranger, then a fortiori sale thereof to a

coheir could not be forbidden.

Tasiana Ongsingco further argues that her contract with Jose de Borja (Annex "A") is
void because it amounts to a compromise as to her status and marriage with the late
Francisco de Borja. The point is without merit, for the very opening paragraph of the
agreement with Jose de Borja (Annex "A") describes her as "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de de
Borja", which is in itself definite admission of her civil status. There is nothing in the text
of the agreement that would show that this recognition of Ongsingco's status as the
surviving spouse of Francisco de Borja was only made in consideration of the cession of
her hereditary rights.
It is finally charged by appellant Ongsingco, as well as by the Court of First Instance of
Nueva Ecija in its order of 21 September 1964, in Special Proceedings No. 832
(Amended Record on Appeal in L-28568, page 157), that the compromise agreement of
13 October 1963 (Annex "A") had been abandoned, as shown by the fact that, after its
execution, the Court of First Instance of Nueva Ecija, in its order of 21 September 1964,
had declared that "no amicable settlement had been arrived at by the parties", and that
Jose de Borja himself, in a motion of 17 June 1964, had stated that the proposed
amicable settlement "had failed to materialize".

It is difficult to believe, however, that the amicable settlement referred to in the order
and motion above-mentioned was the compromise agreement of 13 October 1963,
which already had been formally signed and executed by the parties and duly notarized.
What the record discloses is that some time after its formalization, Ongsingco had
unilaterally attempted to back out from the compromise agreement, pleading various
reasons restated in the opposition to the Court's approval of Annex "A" (Record on
Appeal, L-20840, page 23): that the same was invalid because of the lapse of the
allegedly intended resolutory period of 60 days and because the contract was not
preceded by the probate of Francisco de Borja's will, as required by this
Court's Guevarra vs. Guevara ruling; that Annex "A" involved a compromise affecting
Ongsingco's status as wife and widow of Francisco de Borja, etc., all of which objections
have been already discussed. It was natural that in view of the widow's attitude, Jose de
Borja should attempt to reach a new settlement or novatory agreement before seeking
judicial sanction and enforcement of Annex "A", since the latter step might ultimately
entail a longer delay in attaining final remedy. That the attempt to reach another
settlement failed is apparent from the letter of Ongsingco's counsel to Jose de Borja
quoted in pages 35-36 of the brief for appellant Ongsingco in G.R. No. 28040; and it is
more than probable that the order of 21 September 1964 and the motion of 17 June
1964 referred to the failure of the parties' quest for a more satisfactory compromise. But
the inability to reach a novatory accord can not invalidate the original compromise
(Annex "A") and justifies the act of Jose de Borja in finally seeking a court order for its
approval and enforcement from the Court of First Instance of Rizal, which, as heretofore
described, decreed that the agreement be ultimately performed within 120 days from
the finality of the order, now under appeal.

We conclude that in so doing, the Rizal court acted in accordance with law, and,
therefore, its order should be upheld, while the contrary resolution of the Court of First
Instance of Nueva Ecija should be, and is, reversed.

In her brief, Tasiana Ongsingco also pleads that the time elapsed in the appeal has
affected her unfavorably, in that while the purchasing power of the agreed price of
P800,000 has diminished, the value of the Jalajala property has increased. But the fact
is that her delay in receiving the payment of the agreed price for her hereditary interest
was primarily due to her attempts to nullify the agreement (Annex "A") she had formally
entered into with the advice of her counsel, Attorney Panaguiton. And as to the
devaluation de facto of our currency, what We said in Dizon Rivera vs. Dizon, L-24561,
30 June 1970, 33 SCRA 554, that "estates would never be settled if there were to be a
revaluation with every subsequent fluctuation in the values of currency and properties of
the estate", is particularly opposite in the present case.

Coming now to Case G.R. No. L-28611, the issue is whether the Hacienda de Jalajala
(Poblacion), concededly acquired by Francisco de Borja during his marriage to his first
wife, Josefa Tangco, is the husband's private property (as contended by his second
spouse, Tasiana Ongsingco), or whether it forms part of the conjugal (ganancial)
partnership with Josefa Tangco. The Court of First Instance of Rizal (Judge Herminio
Mariano, presiding) declared that there was adequate evidence to overcome the
presumption in favor of its conjugal character established by Article 160 of the Civil
Code.

We are of the opinion that this question as between Tasiana Ongsingco and Jose de
Borja has become moot and academic, in view of the conclusion reached by this Court
in the two preceding cases (G.R. No. L-28568), upholding as valid the cession of
Tasiana Ongsingco's eventual share in the estate of her late husband, Francisco de
Borja, for the sum of P800,000 with the accompanying reciprocal quit-claims between
the parties. But as the question may affect the rights of possible creditors and legatees,
its resolution is still imperative.

It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, had been
originally acquired jointly by Francisco de Borja, Bernardo de Borja and Marcelo de
Borja and their title thereto was duly registered in their names as co-owners in Land
Registration Case No. 528 of the province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo
vs. Jugo, 54 Phil. 465). Subsequently, in 1931, the Hacienda was partitioned among the
co-owners: the Punta section went to Marcelo de Borja; the Bagombong section to
Bernardo de Borja, and the part in Jalajala proper (Poblacion) corresponded to
Francisco de Borja (V. De Borja vs. De Borja 101 Phil. 911, 932).

The lot allotted to Francisco was described as —

Una Parcela de terreno en Poblacion, Jalajala: N. Puang River; E.

Hermogena Romero; S. Heirs of Marcelo de Borja O. Laguna de Bay;
containing an area of 13,488,870 sq. m. more or less, assessed at
P297,410. (Record on Appeal, pages 7 and 105)

On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate

Estate of Francisco de Borja, instituted a complaint in the Court of First Instance of Rizal
(Civil Case No. 7452) against Jose de Borja, in his capacity as Administrator of Josefa
Tangco (Francisco de Borja's first wife), seeking to have the Hacienda above described
declared exclusive private property of Francisco, while in his answer defendant (now
appellant) Jose de Borja claimed that it was conjugal property of his parents (Francisco
de Borja and Josefa Tangco), conformably to the presumption established by Article
160 of the Philippine Civil Code (reproducing Article 1407 of the Civil Code of 1889), to
the effect that:

Art. 160. All property of the marriage is presumed to belong to the

conjugal partnership, unless it be proved that it pertains exclusively to the
husband or to the wife.

Defendant Jose de Borja further counterclaimed for damages, compensatory, moral and
exemplary, as well as for attorney's fees.

After trial, the Court of First Instance of Rizal, per Judge Herminio Mariano, held that the
plaintiff had adduced sufficient evidence to rebut the presumption, and declared the
Hacienda de Jalajala (Poblacion) to be the exclusive private property of the late
Francisco de Borja, and his Administratrix, Tasiana Ongsingco Vda. de Borja, to be
entitled to its possession. Defendant Jose de Borja then appealed to this Court.

The evidence reveals, and the appealed order admits, that the character of the
Hacienda in question as owned by the conjugal partnership De Borja-Tangco was
solemnly admitted by the late Francisco de Borja no less than two times: first, in the
Reamended Inventory that, as executor of the estate of his deceased wife Josefa
Tangco, he filed in the Special Proceedings No. 7866 of the Court of First Instance of
Rizal on 23 July 1953 (Exhibit "2"); and again, in the Reamended Accounting of the
same date, also filed in the proceedings aforesaid (Exhibit "7"). Similarly, the plaintiff
Tasiana O. Vda. de Borja, herself, as oppositor in the Estate of Josefa Tangco,
submitted therein an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala
property among the "Conjugal Properties of the Spouses Francisco de Borja and Josefa
Tangco". And once more, Tasiana Ongsingco, as administratrix of the Estate of
Francisco de Borja, in Special Proceedings No. 832 of the Court of First Instance of
Nueva Ecija, submitted therein in December, 1955, an inventory wherein she listed the
Jalajala Hacienda under the heading "Conjugal Property of the Deceased Spouses
Francisco de Borja and Josefa Tangco, which are in the possession of the Administrator
of the Testate Estate of the Deceased Josefa Tangco in Special Proceedings No. 7866
of the Court of First Instance of Rizal" (Exhibit "4").

Notwithstanding the four statements aforesaid, and the fact that they are plain
admissions against interest made by both Francisco de Borja and the Administratrix of
his estate, in the course of judicial proceedings in the Rizal and Nueva Ecija Courts,
supporting the legal presumption in favor of the conjugal community, the Court below
declared that the Hacienda de Jalajala (Poblacion) was not conjugal property, but the
private exclusive property of the late Francisco de Borja. It did so on the strength of the
following evidences: (a) the sworn statement by Francis de Borja on 6 August 1951
(Exhibit "F") that —

He tomado possession del pedazo de terreno ya delimitado (equivalente a

1/4 parte, 337 hectareas) adjunto a mi terreno personal y exclusivo
(Poblacion de Jalajala, Rizal).

and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, that the entire
Hacienda had been bought at a foreclosure sale for P40,100.00, of which amount
P25,100 was contributed by Bernardo de Borja and P15,000. by Marcelo de Borja; that
upon receipt of a subsequent demand from the provincial treasurer for realty taxes the
sum of P17,000, Marcelo told his brother Bernardo that Francisco (son of Marcelo)
wanted also to be a co-owner, and upon Bernardo's assent to the proposal, Marcelo
issue a check for P17,000.00 to pay the back taxes and said that the amount would
represent Francisco's contribution in the purchase of the Hacienda. The witness further
testified that —

Marcelo de Borja said that that money was entrusted to him by Francisco

de Borja when he was still a bachelor and which he derived from his
business transactions. (Hearing, 2 February 1965, t.s.n., pages 13-15)
(Emphasis supplied)

The Court below, reasoning that not only Francisco's sworn statement overweighed the
admissions in the inventories relied upon by defendant-appellant Jose de Borja since
probate courts can not finally determine questions of ownership of inventoried property,
but that the testimony of Gregorio de Borja showed that Francisco de Borja acquired his
share of the original Hacienda with his private funds, for which reason that share can
not be regarded as conjugal partnership property, but as exclusive property of the
buyer, pursuant to Article 1396(4) of Civil Code of 1889 and Article 148(4) of the Civil
Code of the Philippines.

The following shall be the exclusive property of each spouse:

 xxx xxx xxx

(4) That which is purchased with exclusive money of the wife or of the
husband.

We find the conclusions of the lower court to be untenable. In the first place, witness
Gregorio de Borja's testimony as to the source of the money paid by Francisco for his
share was plain hearsay, hence inadmissible and of no probative value, since he was
merely repeating what Marcelo de Borja had told him (Gregorio). There is no way of
ascertaining the truth of the statement, since both Marcelo and Francisco de Borja were
already dead when Gregorio testified. In addition, the statement itself is improbable,
since there was no need or occasion for Marcelo de Borja to explain to Gregorio how
and when Francisco de Borja had earned the P17,000.00 entrusted to Marcelo. A ring
of artificiality is clearly discernible in this portion of Gregorio's testimony.

As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion thereof (ante, page
14) does not clearly demonstrate that the "mi terreno personal y exclusivo (Poblacion de
Jalajala, Rizal) " refers precisely to the Hacienda in question. The inventories (Exhibits 3
and 4) disclose that there were two real properties in Jalajala owned by Francisco de
Borja, one of 72.038 sq. m., assessed at P44,600, and a much bigger one of
1,357.260.70 sq. m., which is evidently the Hacienda de Jalajala (Poblacion). To which
of these lands did the affidavit of Francisco de Borja (Exhibit "F") refer to? In addition,
Francisco's characterization of the land as "mi terreno personal y exclusivo" is plainly
self-serving, and not admissible in the absence of cross examination.

It may be true that the inventories relied upon by defendant-appellant (Exhibits "2", "3",
"4" and "7") are not conclusive on the conjugal character of the property in question; but
as already noted, they are clear admissions against the pecuniary interest of the
declarants, Francisco de Borja and his executor-widow, Tasiana Ongsingco, and as
such of much greater probative weight than the self-serving statement of Francisco
(Exhibit "F"). Plainly, the legal presumption in favor of the conjugal character of the
Hacienda de Jalajala (Poblacion) now in dispute has not been rebutted but actually
confirmed by proof. Hence, the appealed order should be reversed and the Hacienda de
Jalajala (Poblacion) declared property of the conjugal partnership of Francisco de Borja
and Josefa Tangco.

No error having been assigned against the ruling of the lower court that claims for
damages should be ventilated in the corresponding special proceedings for the
settlement of the estates of the deceased, the same requires no pro announcement
from this Court.

IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of
Rizal in Case No. L-28040 is hereby affirmed; while those involved in Cases Nos. L-
28568 and L-28611 are reversed and set aside. Costs against the appellant Tasiana
Ongsingco Vda. de Borja in all three (3) cases.

Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Makasiar, Antonio

and Esguerra, JJ., concur.

Fernando, J., took no part.

 
Footnotes

1 She died during the pendency of these appeals, being substituted by

Atty. Luis Panaguiton Jr., administrator of the estate (S.C. Resolution, 27
February 1970).

2 Annex A, Record on Appeal, G.R. No. L-28040, pp. 16-21.

3 Also: Osorio vs. Osorio Steamship Co., 41 Phil. 531; Baun vs. Heirs of
Baun, 53 Phil. 654; Barretto vs. Tuason, 59 Phil. 845; Cuevas vs.
Abesamis, 71 Phil. 147; Jayme vs. Gamboa, 75 Phil. 479; Iballe vs. Po.

4 Garcia vs. David, 67 Phil. 279; Jakosalem vs. Rafols, 73 Phil. 628.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-24561 June 30, 1970

MARINA DIZON-RIVERA, executrix-appellee,
vs.
ESTELA DIZON, TOMAS V. DIZON, BERNARDITA DIZON, JOSEFINA DIZON,
ANGELINA DIZON and LILIA DIZON, oppositors-appellants.

Punzalan, Yabut & Eusebio for executrix-appellee.

Leonardo Abola for oppositors-appellants.

TEEHANKEE, J.:

Appeal from orders of the Court of First Instance of Pampanga approving the Executrix-
appellee's project of partition instead of Oppositors-Appellants' proposed counter-
project of partition.1

On January 28, 1961, the testatrix, Agripina J. Valdez, a widow, died in Angeles,
Pampanga, and was survived by seven compulsory heirs, to wit, six legitimate children
named Estela Dizon, Tomas V. Dizon, Bernardita Dizon, Marina Dizon (herein
executrix-appellee), Angelina Dizon and Josefina Dizon, and a legitimate granddaughter
named Lilia Dizon, who is the only legitimate child and heir of Ramon Dizon, a pre-
deceased legitimate son of the said decedent. Six of these seven compulsory heirs
(except Marina Dizon, the executrix-appellee) are the oppositors-appellants.

The deceased testatrix left a last will executed on February 2, 1960 and written in the
Pampango dialect. Named beneficiaries in her will were the above-named compulsory
heirs, together with seven other legitimate grandchildren, namely Pablo Rivera, Jr.,
Gilbert D. Garcia, Cayetano Dizon, Francisco Rivera, Agripina Ayson, Jolly Jimenez and
Laureano Tiambon.

In her will, the testatrix divided, distributed and disposed of all her properties appraised
at P1,801,960.00 (except two small parcels of land appraised at P5,849.60, household
furniture valued at P2,500.00, a bank deposit in the sum of P409.95 and ten shares of
Pampanga Sugar Development Company valued at P350.00) among her above-named
heirs.

Testate proceedings were in due course commenced 2 and by order dated March 13,
1961, the last will and testament of the decedent was duly allowed and admitted to
probate, and the appellee Marina Dizon-Rivera was appointed executrix of the testatrix'
estate, and upon her filing her bond and oath of office, letters testamentary were duly
issued to her.

After the executrix filed her inventory of the estate, Dr. Adelaido Bernardo of Angeles,
Pampanga was appointed commissioner to appraise the properties of the estate. He
filed in due course his report of appraisal and the same was approved in toto by the
lower court on December 12, 1963 upon joint petition of the parties.
The real and personal properties of the testatrix at the time of her death thus had a total
appraised value of P1,811,695.60, and the legitime of each of the seven compulsory
heirs amounted to P129,362.11.3 (¹/7 of the half of the estate reserved for the legitime of
legitimate children and descendants).4 In her will, the testatrix "commanded that her
property be divided" in accordance with her testamentary disposition, whereby she
devised and bequeathed specific real properties comprising practically the entire bulk of
her estate among her six children and eight grandchildren. The appraised values of the
real properties thus respectively devised by the testatrix to the beneficiaries named in
her will, are as follows:

1. Estela Dizon ....................................... P 98,474.80

2. Angelina Dizon .................................. 106,307.06
3. Bernardita Dizon .................................. 51,968.17
4. Josefina Dizon ...................................... 52,056.39
5. Tomas Dizon ....................................... 131,987.41
6. Lilia Dizon .............................................. 72,182.47
7. Marina Dizon ..................................... 1,148,063.71
8. Pablo Rivera, Jr. ...................................... 69,280.00
9. Lilia Dizon, Gilbert Garcia,
Cayetano Dizon, Francisco Rivera,
Agripina Ayson, Dioli or Jolly
Jimenez, Laureano Tiamzon ................. 72,540.00
Total Value ...................... P1,801,960.01

The executrix filed her project of partition dated February 5, 1964, in substance
adjudicating the estate as follows:

(1) with the figure of P129,254.96 as legitime for a basis Marina

(exacultrix-appellee) and Tomas (appellant) are admittedly considered to
have received in the will more than their respective legitime, while the rest
of the appellants, namely, Estela, Bernardita, Angelina, Josefina and Lilia
received less than their respective legitime;

(2) thus, to each of the latter are adjudicated the properties respectively
given them in the will, plus cash and/or properties, to complete their
respective legitimes to P129,254.96; (3) on the other hand, Marina and
Tomas are adjudicated the properties that they received in the will less the
cash and/or properties necessary to complete the prejudiced legitime
mentioned in number 2 above;

(4) the adjudications made in the will in favor of the grandchildren remain
untouched.<äre||anº•1àw>

On the other hand oppositors submitted their own counter-project of

partition dated February 14, 1964, wherein they proposed the distribution
of the estate on the following basis:

(a) all the testamentary dispositions were proportionally reduced to the

value of one-half (½) of the entire estate, the value of the said one-half (½)
amounting to P905,534.78; (b) the shares of the Oppositors-Appellants
should consist of their legitime, plus the devises in their favor
proportionally reduced; (c) in payment of the total shares of the appellants
in the entire estate, the properties devised to them plus other properties
left by the Testatrix and/or cash are adjudicated to them; and (d) to the
 grandchildren who are not compulsory heirs are adjudicated the properties
respectively devised to them subject to reimbursement by Gilbert D.
Garcia, et al., of the sums by which the devise in their favor should be
proportionally reduced.

Under the oppositors' counter-project of partition, the testamentary disposition made by

the testatrix of practically her whole estate of P1,801,960.01, as above stated, were
proposed to be reduced to the amounts set forth after the names of the respective heirs
and devisees totalling one-half thereof as follows:

1. Estela Dizon ........................................... P 49,485.56

2. Angelina Dizon ......................................... 53,421.42
3. Bernardita Dizon ....................................... 26,115.04
4. Josefina Dizon .......................................... 26,159.38
5. Tomas V. Dizon ......................................... 65,874.04
6. Lilia Dizon .................................................. 36,273.13
7. Marina Dizon ........................................... 576,938.82
8. Pablo Rivera, Jr. ......................................... 34,814.50
9. Grandchildren Gilbert Garcia et al .......... 36,452.80

T o t a l ................................................... P905,534.78

while the other half of the estate (P905,534.78) would be deemed as constituting the
legitime of the executrix-appellee and oppositors-appellants, to be divided among them
in seven equal parts of P129,362.11 as their respective legitimes.

The lower court, after hearing, sustained and approved the executrix' project of partition,
ruling that "(A)rticles 906 and 907 of the New Civil Code specifically provide that when
the legitime is impaired or prejudiced, the same shall be completed and satisfied. While
it is true that this process has been followed and adhered to in the two projects of
partition, it is observed that the executrix and the oppositors differ in respect to the
source from which the portion or portions shall be taken in order to fully restore the
impaired legitime. The proposition of the oppositors, if upheld, will substantially result in
a distribution of intestacy, which is in controversion of Article 791 of the New Civil Code"
adding that "the testatrix has chosen to favor certain heirs in her will for reasons of her
own, cannot be doubted. This is legally permissible within the limitation of the law, as
aforecited." With reference to the payment in cash of some P230,552.38, principally by
the executrix as the largest beneficiary of the will to be paid to her five co-heirs, the
oppositors (excluding Tomas Dizon), to complete their impaired legitimes, the lower
court ruled that "(T)he payment in cash so as to make the proper adjustment to meet
with the requirements of the law in respect to legitimes which have been impaired is, in
our opinion, a practical and valid solution in order to give effect to the last wishes of the
testatrix."

From the lower court's orders of approval, oppositors-appellants have filed this appeal,
and raise anew the following issues: .

1. Whether or not the testamentary dispositions made in the testatrix' will are in the
nature of devises imputable to the free portion of her estate, and therefore subject to
reduction;

2. Whether the appellants are entitled to the devise plus their legitime under Article
1063, or merely to demand completion of their legitime under Article 906 of the Civil
Code; and
3. Whether the appellants may be compelled to accept payment in cash on account of
their legitime, instead of some of the real properties left by the Testatrix;

which were adversely decided against them in the proceedings below.

The issues raised present a matter of determining the avowed intention of the testatrix
which is "the life and soul of a will."5 In consonance therewith, our Civil Code included
the new provisions found in Articles 788 and 791 thereof that "(I)f a testamentary
disposition admits of different interpretations, in case of doubt, that interpretation by
which the disposition is to be operative shall be preferred" and "(T)he words of a will are
to receive an interpretation which will give to every expression some effect, rather than
one which will render any of the expressions inoperative; and of two modes of
interpreting a will, that is to be preferred which will prevent intestacy." In Villanueva vs.
Juico6 for violation of these rules of interpretation as well as of Rule 123, section 59 of
the old Rules of Court, 7 the Court, speaking through Mr. Justice J.B.L. Reyes,
overturned the lower court's decision and stressed that "the intention and wishes of the
testator, when clearly expressed in his will, constitute the fixed law of interpretation, and
all questions raised at the trial, relative to its execution and fulfillment, must be settled in
accordance therewith, following the plain and literal meaning of the testator's words,
unless it clearly appears that his intention was otherwise." 8

The testator's wishes and intention constitute the first and principal law in the matter of
testaments, and to paraphrase an early decision of the Supreme Court of Spain, 9 when
expressed clearly and precisely in his last will amount to the only law whose mandate
must imperatively be faithfully obeyed and complied with by his executors, heirs and
devisees and legatees, and neither these interested parties nor the courts may
substitute their own criterion for the testator's will. Guided and restricted by these
fundamental premises, the Court finds for the appellee.

1. Decisive of the issues at bar is the fact that the testatrix' testamentary disposition was
in the nature of a partition of her estate by will. Thus, in the third paragraph of her will,
after commanding that upon her death all her obligations as well as the expenses of her
last illness and funeral and the expenses for probate of her last will and for the
administration of her property in accordance with law, be paid, she expressly provided
that "it is my wish and I command that my property be divided" in accordance with the
dispositions immediately thereafter following, whereby she specified each real property
in her estate and designated the particular heir among her seven compulsory heirs and
seven other grandchildren to whom she bequeathed the same. This was a valid
partition 10 of her estate, as contemplated and authorized in the first paragraph of Article
1080 of the Civil Code, providing that "(S)hould a person make a partition of his estate
by an act inter vivos or by will, such partition shall be respected, insofar as it does not
prejudice the legitime of the compulsory heirs." This right of a testator to partition his
estate is subject only to the right of compulsory heirs to their legitime. The Civil Code
thus provides the safeguard for the right of such compulsory heirs:

ART. 906. Any compulsory heir to whom the testator has left by any title
less than the legitime belonging to him may demand that the same be fully
satisfied.

ART. 907. Testamentary dispositions that impair or diminish the legitime of

the compulsory heirs shall be reduced on petition of the same, insofar as
they may be inofficious or excessive.
 This was properly complied with in the executrix-appellee's project of
partition, wherein the five oppositors-appellants namely Estela, Bernardita,
Angelina, Josefina and Lilia, were adjudicated the properties respectively
distributed and assigned to them by the testatrix in her will, and the
differential to complete their respective legitimes of P129,362.11 each
were taken from the cash and/or properties of the executrix-appellee,
Marina, and their co-oppositor-appellant, Tomas, who admittedly were
favored by the testatrix and received in the partition by will more than their
respective legitimes.

2. This right of a testator to partition his estate by will was recognized even in Article
1056 of the old Civil Code which has been reproduced now as Article 1080 of the
present Civil Code. The only amendment in the provision was that Article 1080 "now
permits any person (not a testator, as under the old law) to partition his estate by
act inter vivos." 11 This was intended to repeal the then prevailing doctrine 12 that for a
testator to partition his estate by an act inter vivos, he must first make a will with all the
formalities provided by law. Authoritative commentators doubt the efficacy of the
amendment 13 but the question does not here concern us, for this is a clear case of
partition by will, duly admitted to probate, which perforce must be given full validity and
effect. Aside from the provisions of Articles 906 and 907 above quoted, other codal
provisions support the executrix-appellee's project of partition as approved by the lower
court rather than the counter-project of partition proposed by oppositors-appellants
whereby they would reduce the testamentary disposition or partition made by the
testatrix to one-half and limit the same, which they would consider as mere devises or
legacies, to one-half of the estate as the disposable free portion, and apply the other
half of the estate to payment of the legitimes of the seven compulsory heirs. Oppositors'
proposal would amount substantially to a distribution by intestacy and pro tanto nullify
the testatrix' will, contrary to Article 791 of the Civil Code. It would further run counter to
the provisions of Article 1091 of the Civil Code that "(A) partition legally made confers
upon each heir the exclusive ownership of the property adjudicated to him."

3. In Habana vs. Imbo, 14 the Court upheld the distribution made in the will of the
deceased testator Pedro Teves of two large coconut plantations in favor of his daughter,
Concepcion, as against adverse claims of other compulsory heirs, as being a partition
by will, which should be respected insofar as it does not prejudice the legitime of the
compulsory heirs, in accordance with Article 1080 of the Civil Code. In upholding the
sale made by Concepcion to a stranger of the plantations thus partitioned in her favor in
the deceased's will which was being questioned by the other compulsory heirs, the
Court ruled that "Concepcion Teves by operation of law, became the absolute owner of
said lots because 'A partition legally made confers upon each heir the exclusive
ownership of the property adjudicated to him' (Article 1091, New Civil Code), from the
death of her ancestors, subject to rights and obligations of the latter, and, she can not
be deprived of her rights thereto except by the methods provided for by law (Arts. 657,
659, and 661, Civil Code). 15 Concepcion Teves could, as she did, sell the lots in
question as part of her share of the proposed partition of the properties, especially
when, as in the present case, the sale has been expressly recognized by herself and
her co-heirs ..."

4. The burden of oppositors' contention is that the testamentary dispositions in their

favor are in the nature of devises of real property, citing the testatrix' repeated use of the
words "I bequeath" in her assignment or distribution of her real properties to the
respective heirs. From this erroneous premise, they proceed to the equally erroneous
conclusion that "the legitime of the compulsory heirs passes to them by operation of law
and that the testator can only dispose of the free portion, that is, the remainder of the
estate after deducting the legitime of the compulsory heirs ... and all testamentary
dispositions, either in the nature of institution of heirs or of devises or legacies, have to
be taken from the remainder of the testator's estate constituting the free portion." 16

Oppositors err in their premises, for the adjudications and assignments in the testatrix'
will of specific properties to specific heirs cannot be considered all devises, for it clearly
appear from the whole context of the will and the disposition by the testatrix of her
whole estate (save for some small properties of little value already noted at the
beginning of this opinion) that her clear intention was to partition her whole estate
through her will. The repeated use of the words "I bequeath" in her testamentary
dispositions acquire no legal significance, such as to convert the same into devises to
be taken solely from the free one-half disposable portion of the estate. Furthermore, the
testatrix' intent that her testamentary dispositions were by way of adjudications to the
beneficiaries as heirs and not as mere devisees, and that said dispositions were
therefore on account of the respective legitimes of the compulsory heirs is expressly
borne out in the fourth paragraph of her will, immediately following her testamentary
adjudications in the third paragraph in this wise: "FOURTH: I likewise command that in
case any of those I named as my heirs in this testament any of them shall die before I
do, his forced heirs under the law enforced at the time of my death shall inherit the
properties I bequeath to said deceased." 17

Oppositors' conclusions necessarily are in error. The testamentary dispositions of the

testatrix, being dispositions in favor of compulsory heirs, do not have to be taken only
from the free portion of the estate, as contended, for the second paragraph of Article
842 of the Civil Code precisely provides that "(O)ne who has compulsory heirs may
dispose of his estate provided he does not contravene the provisions of this Code with
regard to the legitime of said heirs." And even going by oppositors' own theory of
bequests, the second paragraph of Article 912 Civil Code covers precisely the case of
the executrix-appellee, who admittedly was favored by the testatrix with the large bulk of
her estate in providing that "(T)he devisee who is entitled to a legitime may retain the
entire property, provided its value does not exceed that of the disposable portion and of
the share pertaining to him as legitime." For "diversity of apportionment is the usual
reason for making a testament; otherwise, the decedent might as well die intestate." 18
Fundamentally, of course, the dispositions by the testatrix constituted a partition by will,
which by mandate of Article 1080 of the Civil Code and of the other cited codal
provisions upholding the primacy of the testator's last will and testament, have to be
respected insofar as they do not prejudice the legitime of the other compulsory heirs.

Oppositors' invoking of Article 1063 of the Civil Code that "(P)roperty left by will is not
deemed subject to collation, if the testator has not otherwise provided, but the legitime
shall in any case remain unimpaired" and invoking of the construction thereof given by
some authorities that "'not deemed subject to collation' in this article really means not
imputable to or chargeable against the legitime", while it may have some plausibility 19 in
an appropriate case, has no application in the present case. Here, we have a case of a
distribution and partition of the entire estate by the testatrix, without her having made
any previous donations during her lifetime which would require collation to determine
the legitime of each heir nor having left merely some properties by will which would call
for the application of Articles 1061 to 1063 of the Civil Code on collation. The amount of
the legitime of the heirs is here determined and undisputed.

5. With this resolution of the decisive issue raised by oppositors-appellants, the

secondary issues are likewise necessarily resolved. Their right was merely to demand
completion of their legitime under Article 906 of the Civil Code and this has been
complied with in the approved project of partition, and they can no longer demand a
further share from the remaining portion of the estate, as bequeathed and partitioned by
the testatrix principally to the executrix-appellee.

Neither may the appellants legally insist on their legitime being completed with real
properties of the estate instead of being paid in cash, per the approved project of
partition. The properties are not available for the purpose, as the testatrix had
specifically partitioned and distributed them to her heirs, and the heirs are called upon,
as far as feasible to comply with and give effect to the intention of the testatrix as
solemnized in her will, by implementing her manifest wish of transmitting the real
properties intact to her named beneficiaries, principally the executrix-appellee. The
appraisal report of the properties of the estate as filed by the commissioner appointed
by the lower court was approved in toto upon joint petition of the parties, and hence,
there cannot be said to be any question — and none is presented — as to fairness of
the valuation thereof or that the legitime of the heirs in terms of cash has been
understated. The plaint of oppositors that the purchasing value of the Philippine peso
has greatly declined since the testatrix' death in January, 1961 provides no legal basis
or justification for overturning the wishes and intent of the testatrix. The transmission of
rights to the succession are transmitted from the moment of death of the decedent
(Article 777, Civil Code) and accordingly, the value thereof must be reckoned as of then,
as otherwise, estates would never be settled if there were to be a revaluation with every
subsequent fluctuation in the values of the currency and properties of the estate. There
is evidence in the record that prior to November 25, 1964, one of the oppositors,
Bernardita, accepted the sum of P50,000.00 on account of her inheritance, which, per
the parties' manifestation, 20 "does not in any way affect the adjudication made to her in
the projects of partition of either party as the same is a mere advance of the cash that
she should receive in both projects of partition." The payment in cash by way of making
the proper adjustments in order to meet the requirements of the law on non-impairment
of legitimes as well as to give effect to the last will of the testatrix has invariably been
availed of and sanctioned. 21 That her co-oppositors would receive their cash
differentials only now when the value of the currency has declined further, whereas they
could have received them earlier, like Bernardita, at the time of approval of the project
of partition and when the peso's purchasing value was higher, is due to their own
decision of pursuing the present appeal.

ACCORDINGLY, the orders appealed from are hereby affirmed. Without cost.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Barredo
and Villamor, JJ., concur.

# Footnotes

1 Appeal was directed to this Court, as the value of the estate exceeded
P200,000.00, in accordance with the then subsisting provisions of Sec. 17,
third paragraph, subsec. 5, now eliminated by Rep. Act 5440 enacted on
Sept. 9, 1968.

2 Sp. Proc. No. 1582 of the Court of First Instance of Pampanga.

3 These figures are those of oppositors-appellants which are adopted for

purposes of this decision. Per appellee's brief, p. 3, executrix-appellee
sums up the value of the estate P1,809,569.55, and therefore the legitime
of each of the seven (7) forced heirs at P129,254.96. While there is thus a
slight difference in the valuation of the estate and legitime of the forced
heirs (a difference of P2,126.05 for the whole estate and of P107.15 in
each legitime), the same is of no importance... because the issue involved
in this appeal is not the value of the estate but the manner it should be
distributed among the heirs." (Notes in parentheses supplied)

4 Art. 888, Civil Code.

5 Santos vs. Madarang, 27 Phil. 209.

6 L-15737, Feb. 28, 1962; 4 SCRA 550.

7 "SEC. 59. Instrument construed so as to give effect to all provisions. —

In the construction of an instrument where there are several provisions or
particulars, such a construction is, if possible, to be adopted as will give
effect to all." (now Rule 130, sec. 9)

8 Citing in In re Estate of Calderon, 26 Phil. 333.

9 Tribunal Supremo of Spain, sentencia of 20 Marzo 1918.

10 ART. 1079. Partition, in general, is the separation, division and

assignment of a thing held in common among those to whom it may
belong. The thing itself may be divided, or its value. (n)

11 Romero vs. Villamor, 102 Phil. 641 (1957).

12 Legasto vs. Versoza, 54 Phil. 766 (1930); Fajardo vs. Fajardo, 54 Phil.
842 (1930).

13 Reyes and Puno, Vol. III, p. 216; Tolentino, Vol. III, pp. 538-540.

14 L-15598 and L-16726, March 31, 1964; 10 SCRA 471.

15 See Arts. 776 and 777 Phil. Civil Code. The latter article provides that
"(T)he rights to the succession are transmitted from the moment of the
death of the decedent."

16 Appellants' brief, pp. 15-16.

17 Rec. on Appeal, p. 20; emphasis supplied.

18 Icasiano vs. Icasiano, L-18979, June 30, 1964; 11 SCRA 422.

19 III Tolentino's Civil Code, 1961 ed., p. 518.

20 Record on Appeal, p. 107.

21 See Arts. 955, 1080 and 1104, Civil Code.

 FIRST DIVISION

[G.R. No. 30750. October 24, 1929.]

Intestate estate of Jacinto Baun, deceased. SIMPLICIO BAUN, administrator-

appellee, v. HEIRS OF THE DECEASED JACINTO BAUN, Oppositors-Appellants.

Francisco, Recto & Lualhati for Appellants.

Teotimo Duque for Appellee.

SYLLABUS

1. ESTATE OF DECEASED PERSONS; REALTY, SALE OF; CONSENT OF HEIRS. —

When the personal estate of the deceased is not sufficient to pay the debts and charges
of administration without injuring the business of those interested in the estate, or
otherwise made sufficient provision for the payment of such debts and charges, the
court, on application of the executor or administrator with the consent and approbation,
in writing, of the heirs, may authorize the executor or administrator to sell real, in lieu of
personal estate. The written consent of all of the heirs is necessary; the consent of the
majority of them is not sufficient. (Sec. 714, Act No. 190.)

2. ID.; ID.; APPLICATION FOR AUTHORITY TO SELL. — The application must be filed
in court, accompanied by the written consent of all of the heirs. The court shall
thereupon appoint a time and place of hearing for deciding upon such application, and
shall require notice to be given of such application, and of the time and place of hearing
to the persons interested. (Sec. 722, No. 3, Act No. 190). The procedure prescribed by
said sections 714 and 722 of Act No. 190 must be strictly construed. When the
jurisdiction of a court over the land of a decedent exists only for the purpose of sale
upon certain conditions, these conditions must be present before the court can act.

DECISION

JOHNSON, J.:

This is an appeal from an order of the Court of First Instance of Tarlac, dated
September 12, 1928, sustaining the validity of the sale made by the administrator of the
estate of Jacinto Baun, of a piece or parcel of land together with the machinery and
building thereon belonging to said estate, and denying the motion of the heirs to set
aside said sale.

The following facts are not in dispute:chanrob1es virtual 1aw library

(1) On May 31, 1928, the administrator of the estate filed a motion, requesting authority
to sell personal and real properties of the estate, in order to pay its debts. The motion
alleged (a) that the estate was indebted to the Asociacion Cooperation del Credito Rural
de Tarlac in the sum of P1,000, with interest at 10 per cent from February 11, 1925; (b)
that it was also indebted to Manuel Urquico in the sum of P7,412.22, with interest at 12
per cent from November 1, 1927; and (c) that the estate was without sufficient funds to
meet said obligations.

(2) On June 1, 1928, the heirs of the estate, with the exception of Damiana Manankil,
widow of the deceased, filed their written conformity to the proposed sale of the only
real property of the estate described in the inventory, consisting of a parcel of land and
the machinery and building thereon. They also stated that Genara Pineda offered
P20,000 for said property and that they considered said offer as most advantageous
and beneficial to their interest. Said written conformity was signed by Alejandro Calma
in his own behalf and as guardian of the minors Guillermo and Simeona Calma, and by
Celedonia Baun, with the consent of her husband Lorenzo Mallari.

(3) On June 15, 1928, the court appointed Jose P. Fausto, an attorney at law, as
guardian ad litem of the minors Guillermo and Simeona Calma, heirs of Jacinto Baun,
with special reference to the proposed sale of the real property of the estate.

(4) Some time thereafter said guardian ad litem filed his report, recommending favorably
the proposed sale of the land and the machinery and building thereon to Genara Pineda
at the price offered by her.

(5) On June 29, 1928, the court authorized the administrator of the estate to sell the
property of the deceased in the form and manner most advantageous to the estate. The
pertinent part of the order of the court said: "Por la presente queda autorizado el
referido administrador para vender los bienes del aludido finado en la forma que crea
procedente y ventajosa para los fines arriba indicados."cralaw virtua1aw library

(6) On July 6, 1928, Simplicio Baun, the administrator of the estate, filed a petition
requesting approval by the court of the sale of said property to Pedro Santos for the
sum of P22,000. The administrator sold the property to said vendee, who gave a better
price than that offered by Genara Pineda, which was for P20,000 only, as above stated.

(7) On July 7, 1928, the court approved said sale, and on July 10, 1928, ordered the
vendee Pedro Santos to immediately deliver to the administrator of the estate the price
of the property amounting to P22,000.

(8) On July 16, 1928, the heirs of the estate filed a motion praying that the sale of the
property as well as the decree of the court approving the same be set aside on the
following grounds: (a) That the administrator sold the real property of the estate without
having first sold the personal property; (b) that Damiana Manankil, the widow of the
deceased, who was also an heir of the estate, did not give her conformity or consent to
said sale; (c) that no notice of the hearing of the application for authority to sell the
property of the estate was served upon the heirs, either personally or by publication, as
required by section 722, paragraph 3, of the Code of Civil Procedure; and (d) that no
hearing was held on said application of the administration.

The administrator filed his answer to the motion, alleging (1) that said real property was
sold because the personal property of the deceased was insufficient to meet the
obligations of the estate; (2) that the real property of the estate was sold upon the
initiative and with the written consent of the heirs and consequently they are now
estopped from attacking the validity of said sale; (3) that notice of the hearing of the
application for authority to sell the property of the estate was not necessary inasmuch
as the requirements of the law had been virtually satisfied by the written consent of the
heirs to the sale; and (4) that the written consent of all of the heirs was not necessary
because the law does not specifically require the consent in writing of all of the heirs.

Upon the foregoing facts and the issue raised by the motion and answer as above
stated, the Honorable Cayetano Lukban, judge, on September 12, 1928, issued an
order sustaining the validity of the sale to Pedro Santos of said land and the machinery
and building thereon for the sum of P22,000, and denied the motion of the heirs to set
aside said sale. The pertinent parts of said order read as follows:jgc:chanrobles.com.ph

"El administrador aqui nombrado, enterado de que se le autorizaba vender bienes del
intestado, entre ellos el susodicho inmueble, en la forma que era procedente y
ventajosa, dando pruebas de lealtad a sus obligaciones como tal, en lugar de proceder
automaticamente a la venta, busco compradores con mejores ofertas. En efecto,
encontro al referido Pedro Santos, de Porac, Pampanga, quien ofrecio mejor precio. Se
otorgo la venta a favor de este señor. Previa recomendacion favorable del curador ad
litem, dicha venta fue aprobada por el Juzgado, y consecuentemente, se pago en su
totalidad el precio de la venta, depositandose parte en la Escribania de este Juzgado, y
parte en el Banco Postal de Ahorros.

"Consta ademas en los inventarios presentados por el administrador y los

comisionados de avaluo y reclamaciones nombrados en esta actuacion que el presente
intestado carece de suficientes bienes muebles que puedan ser vendidos para el pago
de las obligaciones de este intestado. Tales obligaciones devengaban intereses que,
con el tiempo y sumados al capital caso de no efectuarse oportunamente su pago,
importarian lo bastante para acabar con todos los bienes de este intestado y no dejar
nada a los herederos.

"Teniendo en cuenta estas circunstancias, y sobre todo, la conformidad de los

herederos; el Juzgado es de opinion que carece de importancia la contencion de que la
alegada viuda no haya dado su conformidad a la venta. Porque, aun cuando al misma
hubiese opuesto, su oposicion no hubiera podido prosperar o prevalecer frente a la
conformidad a la venta por parte de los herederos y del curador ad litem.

"Por todas estas consideraciones, no ha lugar a la peticion formulada por dichos

herederos, al efecto de que se anule o rescinda la referida venta."cralaw virtua1aw
library

The case is now before us on appeal by the heirs from said order.

The appellants now submit a number of propositions in which they attempt to show that
the lower court erred in not declaring said sale null and void. One of said propositions
is:jgc:chanrobles.com.ph

"That the provisions of the Code of Civil Procedure, regulating the sale of the estate of
the deceased and prescribing certain formalities, were not complied with in the sale of
the real property in question, and consequently the sale is null and void."cralaw
virtua1aw library

In this jurisdiction, by virtue of the provisions of articles 657 and 661 of the Civil Code,
the heirs succeed to all the rights and obligations of the decedent "by the mere fact of
his death." The rights to the succession of a person are transmitted from the moment of
his death." In other words, the heirs succeed immediately to all the rights and
obligations of the ancestor by the mere fact of the death of the ancestor. From the death
of the ancestor the heirs are the absolute owners of his property, subject to the rights
and obligations of the ancestor, and they cannot be deprived of their rights thereto
except by the methods provided for by law.

The only law providing for the sale of the property which formerly belonged to the
deceased and prescribing the formalities antecedent to said sale, is found in sections
714 and 722 of the Code of Civil Procedure. Said sections read as
follows:jgc:chanrobles.com.ph

"SEC. 714. Realty may be sold or encumbered though personality not exhausted. —
When the personal estate of the deceased is not sufficient to pay the debts and charges
of administration without injuring the business of those interested in the estate, or
otherwise prejudicing their interest, and where a testator has not otherwise made
sufficient provision for the payment of such debts and charges, the court, on application
of the executor or administrator with the consent and approbation, in writing, of the
heirs, devisees, and legatees, residing in the Philippine Islands, may grant a license to
the executor or administrator to sell, mortgage or otherwise encumber for that purpose
real, in lieu of personal estate, . . .

"SEC. 722. Regulations for license to sell. — When an executor or administrator

considers it necessary or beneficial to sell real or personal estate, in cases provided by
law, he may make application to the court having jurisdiction of the estate, and such
court may grant license, when it appears necessary or beneficial, under the following
regulations:jgc:chanrobles.com.ph

"1. The executor or administrator shall present to the court his petition in writing, setting
forth the amount of debts due from the deceased, with charges of administration, the
value of the personal estate, situation of the estate to be sold, or such other facts as
shown that the sale is necessary or beneficial;

"2. In case where the consent of heirs, devisees, and legatees is required, the executor
of administrator shall produce to the court their assent in writing, and signed by such
heirs, devisees, or legatees, or by the guardians of such as are minors or otherwise
under guardianship;

"3. The court shall thereupon appoint a time and place of hearing for deciding upon
such application, and shall require notice to be given of such application, and of the time
and place of hearing to the persons interested; which notice shall state the nature of the
application and the reason for the same, the time and place of hearing, and shall be
published three weeks successively previous thereto, in a newspaper of general
circulation in the neighborhood of those interested, to be designated by the court; and
the court may order such further notice as is adjudged proper. If personal notice is given
to the persons interested, the public notice may be dispensed with;

x       x       x

"5. If the proof produced satisfies the court and if the regulations in the first four
subdivisions of this section and complied with, the court may, by decree, authorize the
executor or administrator to sell such part of the estate as is deemed necessary, either
at public or private sale, as would be most beneficial to all parties concerned, and
furnish the executor or administrator with certified copy of such license or order of sale;"

From the foregoing provisions of law, in relation with the facts of the present case, we
are of the opinion that the requisites of the law were not complied with in the sale in
question. Section 714 and paragraph 2 of section 722 of the Code of Civil Procedure
require "the consent and approbation, in writing, of the heirs, devisees and legatees,
signed by such heirs, devisees or legatees."cralaw virtua1aw library
In the instant case the written consent of the widow Damiana Manankil, who was also
an heir of the deceased, to the application of the administrator for authority to sell the
property of the estate, was not obtained. We are of the opinion that the consent of all of
the heirs is necessary because each and every one of them is interested in the estate
and because the law does not state that the consent of the majority of the heirs is
sufficient to bind all of the heirs. The phrase "the consent and approbation, in writing, of
the heirs, devisees and legatees," used in section 714 of the Code of Civil Procedure,
cannot be susceptible of any other interpretation than that the consent of all the heirs,
etc. is necessary.

Furthermore, the widow Damiana Manankil was not notified of the application of the
administrator for authority to sell the property of the estate, neither was said application
set for hearing as required in paragraph 3 of section 722 of the Code of Civil Procedure.
Paragraph 5 of section 722 requires a compliance with the formalities as to written
consent of heirs, notice of hearing of the application, and hearing of the application
before a decree authorizing the sale may be issued. Therefore, the decree of the lower
court of June 29, 1928, authorizing the sale of the property in question is not in
conformity with the provisions of sections 714 and 722 of the Code of Civil Procedure,
because (1) the written consent of all of the heirs was not obtained, (2) the heirs were
not notified of the hearing on said application, and (3) no hearing was held on said
application; and, consequently, the sale of the property of the estate, effected by the
administrator in pursuance of said decree of the court, is null and void. The appellee
contends that those requirements of the law apply only to testate succession. We are of
the opinion that they are applicable to both testate and intestate successions, because
in both cases the heirs are entitled to be given an opportunity to be heard and to protect
their rights and interest in the estate.

The appellee contends that the appellants are estopped from questioning or attacking
the validity of the sale in question, inasmuch as said sale was made with their consent.
This contention cannot be sustained. We have already shown that one of the heirs did
not consent to the sale and that the lower court failed to comply with the formalities of
the law.

It will be remembered that the property in question belongs to the heirs absolutely,
subject to the payment of the debts of the ancestor. Sections 714 and 722 of Act No.
190 provide for the sale of the property belonging to the heirs. We are of the opinion
that the procedure prescribed by said sections for the sale of property under these
conditions must be strictly construed. When the jurisdiction of a court over the land of a
decedent exists only for the purpose of sale upon certain conditions, these conditions
must be present before the court can act. (Root v. McFerrin, 37 Miss., 17 [75 Am. Dec.,
49].) So that, if the order of the court for the sale of the land of a decedent is made
when the circumstances do not exist, which must concur as the basis of the order, there
is lack of jurisdiction and the sale is therefore illegal. Sections 714 and 722 of Act No.
190 expressly provide the conditions under which the sale of the property of the heirs
may be made. Such statute must be followed strictly. (Doe v. Roe, 48 Am. Dec., 216.)

The Supreme Court of the United States, in the case of Thatcher v. Powell (6 Wheaton,
119, 123) said: "That no individual or public officer can sell and convey a good title to
the land of another, unless authorized so to do by express law, is one of those self-
evident propositions to which the mind assents without hesitation; and that the person
invested with such a power must pursue with the precision the course prescribed by
law, or his act is invalid, is a principle which has been repeatedly recognized in this
court." (Black v. Nygren, 8 Phil., 205.)

From the foregoing authorities we must conclude that inasmuch as the lower court failed
to comply strictly with the procedure marked out by the law, the sale of the property in
question is illegal and null and void.

It being true that the heirs succeed to the property of the ancestor with the obligations of
the ancestor against it, they cannot refuse to give their consent to the sale of the
property for the purpose of paying said obligations and thereby defeat their payment;
and when said obligations are properly allowed against the estate, such property may
be subjected to their payment. The heirs cannot defeat the payment of the obligations
and still retain the property. If they insist upon retaining the property, they must pay the
existing obligations against the estate. The property belongs to them subject to the
payment of the obligations, and they are bound to pay the indebtedness existing against
the estate. (Sec. 731, Act. No. 190.) The heirs cannot, by any act of their own, or by
agreement among themselves, impair the right of the creditors to recover their claim
from the estate. The hereditary property remains liable for the debts of the decedent,
and the heirs and distributees may be compelled to pay the same in proportion to the
share received by them from the estate. (Pavia v. De la Rosa, 8 Phil., 70; Lopez v.
Enriquez, 16 Phil., 336; Fabie v. Yulo, 24 Phil., 240.)

In the present case it is true that the heirs, after the sale of the property in pursuance of
the order of the court, and after said sale had been approved by the court, made a
deposit with the clerk of a sum of money sufficient to pay the existing indebtedness. We
are at a loss to understand why the lower court did not even then accept the offer made
by the heirs to pay the indebtedness and thereby save the estate from the further
expense of litigation, in accordance with the provisions of the law. Had that been done,
the long litigation which has followed would have been rendered unnecessary, at a
great saving of expense to the estate.

The heir legally succeeds the deceased, from whom he derived his right and title, but
only after the liquidation of the estate, the payment of the debts of the same, and the
adjudication of the residue of the estate of the deceased; and in the meantime the only
person in charge by law to attend to all claims against the estate of the deceased debtor
is the executor or administrator appointed by the court. (Pavia v. De la Rosa, 8 Phil.,
70.)

Therefore, in view of what precedes, the order appealed from is hereby reversed, the
sale is hereby declared null and void; and the record is hereby remanded to the lower
court with direction that, after a citation of all of the heirs including Catalina Tejeiro and
all of the other creditors and Pedro Santos, and after giving them an opportunity to be
heard, it issue such orders in harmony with this decision as will, in equity and justice,
protect the interest of all parties concerned, to the end that the estate of Jacinto Baun
may be finally settled and terminated. The appellants are also hereby ordered to deposit
with the lower court such additional amount as may be found necessary to pay in full all
the indebtedness and obligations of the estate, including the interest thereof; or,
otherwise, the court shall proceed to sell the property of the estate for the purpose of
paying said indebtedness. And without any finding as to costs, it is so ordered.

Avanceña, C.J., Street, Villamor, Johns and Villa-Real, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-5064             February 27, 1953

BIENVENIDO A. IBARLE, plaintiff-appellant,
vs.
ESPERANZA M. PO, defendant-appellant.

Quirico del Mar for appellant.

Daniel P. Tumulak and Conchita F. Miel appellee.

TUASON, J.:

This action commenced in the Court of First Instance of Cebu to annul a deed of sale
conveying to the defendant, in consideration of P1,700, one undivided half of a parcel of
land which previously had been sold, along with the other half, by the same vendor to
the plaintiff's grantors. judgment was against the plaintiff.

The case was submitted for decision upon an agreed statement of facts, the pertinent
parts of which are thus summarized in the appealed decision:

1st. — That Leonard j. Winstanley and Catalina Navarro were husband and wife,
the former having died on June 6, 1946 leaving heir the surviving spouse and
some minor children;

2nd. — hat upon the death of L.J. Winstanley, he left a parcel of land described
under Transfer Certificate of title No. 2391 of the Registry of Deeds of the
Province of Cebu;

3rd. — That the above mentioned property was a conjugal property;

4th. — That on April 15, 1946, the surviving spouse Catalina Navarro Vda. de
Winstanley sold the entire parcel of land to the spouses Maria Canoy, alleging
among other things, that she needed money for the support of her children;

5th. — That on May 24, 1947, the spouses Maria Canoy and Roberto Canoy sold
the same parcel of land to the plaintiff in this case named Bienvenido A. Ebarle;

6th. — That the two deeds of sale referred to above were not registered and
have never been registered up to the date;

7th. — That on January 17, 1948 surviving spouse Catalina Navarro Vda. de
Winstanley, after her appointment as guardian of her children by this court
(Special proceeding no. 212-R) sold one-half of the land mentioned above to
Esperanza M. Po, defendant in the instant case, which portion belongs to the
children of the above named spouses.

As stated by the trial Judge, the sole question for determination is the validity of the sale
to Esperanza M. Po, the last purchaser. This question in turn depends upon the validity
of the prior ale to Maria Canoy and Roberto Canoy.
Article 657 of the old Civil Code provides: "The rights to the succession of a person are
transmitted from the moment of his death." in a slightly different language, this article is
incorporated in the new Civil Code as article 777.

Manresa, commending on article 657 of the Civil Code of Spain, says:

The moment of death is the determining factor when the heirs acquire a definite
right to the inheritance, whether such right be pure or contingent. It is immaterial
whether a short or long period of time lapses between the death of the
predecessor and the entry into possession of the property of the inheritance
because the right is always deemed to be retroactive from the moment of death.
(5 Manresa, 317.)

The above provision and comment make it clear that when Catalina Navarro Vda. de
Winstanley sold the entire parcel to the Canoy spouses, one-half of it already belonged
to the seller's children. No formal or judicial declaration being needed to confirm the
children's title, it follows that the first sale was null and void in so far as it included the
children's share.

On the other hand, the sale to the defendant having been made by authority of the
competent court was undeniably legal and effective. The fact that it has not been
recorded is of no consequence. If registration were necessary, still the non-registration
would not avail the plaintiff because it was due to no other cause than his own
opposition.

The decision will be affirmed subject to the reservation, made in said decision, of the
right of the plaintitff and/or the Canoy spouses to bring such action against Catalina
Navarro Vda. de Winstanley as may be appropriate for such damages as they may
have incurred by reason of the voiding of the sale in their favor.

Paras, C.J., Feria, Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo, Bautista Angelo
and Labrador, JJ., concur.
 FIRST DIVISION
[G.R. No. L-9315.  March 24, 1956.]
EUGENIA MORALES, ET AL., Plaintiffs-Appellants, vs. PROCESO
YAÑEZ, Defendant-Appellee.
 
DECISION
BENGZON, J.:
Appeal from an order of the Hon. Jose P. Veluz, Judge of the Court of First Instance of
Misamis Oriental dismissing Plaintiffs’ complaint dated July 17, 1950 for the recovery of
three parcels of land in the City of Cagayan de Oro.
There is no question that said lands belonged to Eugeniano Saarenas who died
intestate in 1937, leaving no ascendants nor descendants; chan
roblesvirtualawlibrarythat as his surviving nephews (by a sister) Defendant Proceso
Yañez (and his sisters) took possession of said lots; chan roblesvirtualawlibraryand
that Plaintiffs are illegitimate (adulterous) children of Eugeniano, born between 1910
and 1927.
Plaintiffs’ action is founded on arts. 287 and 988 of the New Civil Code, giving
illegitimate children the right to succeed, where decedent leaves no ascendants nor
descendants.
Defendant Yañez (and his sisters) claim the right to inherit under the Civil Code articles
946, 947, and 948 — the law in force at the time of Eugeniano’s death.
Applying the Civil Code, the trial judge absolved the Defendant. He refused to apply the
New Civil Code that grants for the first time successional rights to illegitimate children, in
accordance with this Court’s decision in Uson vs. Del Rosario, (92 Phil., 530)
promulgated January 29, 1953, the pertinent portions of which
are:chanroblesvirtuallawlibrary
“But Defendants contend that, while it is true that the four minor Defendants are
illegitimate children of the late Faustino Nebrada and under the old Civil Code are not
entitled to any successional rights, however, under the new Civil Code which became in
force in June 1950, they are given the status and rights which the law accords to the
latter (Article 2264 and Article 278, new Civil Code), and because these successional
rights were declared for the first time in the new code, they shall be given retroactive
effect even though the event which gave rise to them may have occurred under the prior
legislation (Art. 2253, new Civil Code).
“There is no merit in this claim. Article 2253  cralaw provides that if a right should be
declared for the first time in this Code, it shall be effective at once, even though the act
or event which gives rise thereto may have been done or may have occurred under the
prior legislation, provided said new right does not prejudice or impair any vested or
acquired right, of the same origin. As already stated in the early part of this decision, the
right of ownership of Maria Uson over the lands in question became vested in 1945
upon the death of her late husband and this is so because of the imperative provision of
the law which commands that the rights to succession are transmitted from the moment
of death (Article 657, old Civil Code). The new right recognized by the new Civil Code in
favor of the illegitimate children of the deceased cannot, therefore, be asserted to the
impairment of the vested right of Maria Uson over the lands in dispute.”
It is clear that His Honor read the law correctly. Appellants contend, however, that
for Defendant to acquire a vested right to Eugeniano’s property, he must first
commence proceedings to settle Eugeniano’s estate — which he had not done. There is
no merit to the contention. This Court has repeatedly held that the right of heirs to the
property of the deceased is vested from the moment of death. 1 Of course the formal
declaration or recognition or enforcement of such right needs judicial confirmation in
proper proceedings. But we have often enforced or protected such rights from
encroachments made or attempted before the judicial declaration. 2 Which can only
mean that the heir acquired hereditary rights even before judicial declaration in testate
or intestate proceedings.
However, a more conclusive consideration barring Plaintiffs’ demand is to be found in
Article 2263 of the New Civil Code which read:chanroblesvirtuallawlibrary
“ART. 2263.  Rights to the inheritance of a person who died, with or without a will,
before the effectivity of this Code, shall be governed by the Civil Code of 1889, by other
previous laws, and by the Rules of Court. The inheritance of those who, with or without
a will, die after the beginning of the effectivity of this Code, shall be adjudicated and
distributed in accordance with this new body of laws and by the Rules of Court; chan
roblesvirtualawlibrarybut the testamentary provisions shall be carried out insofar as they
may be permitted by this Code. Therefore, legitimes, betterments, legacies and
bequests shall be respected; chan roblesvirtualawlibraryhowever, their amount shall be
reduced if in no other manner can every compulsory heir be given his full share
according to this Code.”
According to the above italicized portion the rights of the herein litigants to the property
of Eugeniano must be determined in accordance with the Civil Code, because he died
in 1937, i. e, before the enactment of the New Civil Code in 1949.
The appealed order is therefore affirmed with cost against Appellants.
Paras, C.J., Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J.
B. L. and Endencia, JJ., concur.
 
Endnotes:chanroblesvirtuallawlibrary
  1.  Art. 657 Civil Code, Mijares vs. Neri, 3 Phil. 195; chan
roblesvirtualawlibraryVelasco vs. Vizmanos, 45 Phil., 675; chan
roblesvirtualawlibraryIlustre vs. Frondosa, 17 Phil., 321; chan
roblesvirtualawlibraryBondad vs. Bondad, 34 Phil., 232; chan
roblesvirtualawlibraryInocencio vs. Gatpandan, 14 Phil., 491; chan
roblesvirtualawlibraryFule vs. Fule, 46 Phil., 317.
  2.  See Coronel vs. Ona, 33 Phil., 456; chan roblesvirtualawlibraryNable Jose vs.
Nable Jose, 41 Phil., 713; chan roblesvirtualawlibraryVelasco vs. Vizmanos, supra.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-41715 June 18, 1976

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO

BONILLA (their father) who represents the minors, petitioners,
vs.
LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL
BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and HON. LEOPOLDO
GIRONELLA of the Court of First Instance of Abra, respondents.

Federico Paredes for petitioners.

Demetrio V. Pre for private respondents.

MARTIN, J:

This is a petition for review 1 of the Order of the Court of First Instance of Abra in Civil
Case No. 856, entitled Fortunata Barcena vs. Leon Barcena, et al., denying the motions
for reconsideration of its order dismissing the complaint in the aforementioned case.

On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion
Bonilla and wife of Ponciano Bonilla, instituted a civil action in the Court of First Instance
of Abra, to quiet title over certain parcels of land located in Abra.

On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before
the hearing of the motion to dismiss, the counsel for the plaintiff moved to amend the
complaint in order to include certain allegations therein. The motion to amend the
complaint was granted and on July 17, 1975, plaintiffs filed their amended complaint.

On August 4, 1975, the defendants filed another motion to dismiss the complaint on the
ground that Fortunata Barcena is dead and, therefore, has no legal capacity to sue.
Said motion to dismiss was heard on August 14, 1975. In said hearing, counsel for the
plaintiff confirmed the death of Fortunata Barcena, and asked for substitution by her
minor children and her husband, the petitioners herein; but the court after the hearing
immediately dismissed the case on the ground that a dead person cannot be a real
party in interest and has no legal personality to sue.

On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the
complaint and on August 23, 1975, he moved to set aside the order of the dismissal
pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court. 2

On August 28, 1975, the court denied the motion for reconsideration filed by counsel for
the plaintiff for lack of merit. On September 1, 1975, counsel for deceased plaintiff filed
a written manifestation praying that the minors Rosalio Bonilla and Salvacion Bonilla be
allowed to substitute their deceased mother, but the court denied the counsel's prayer
for lack of merit. From the order, counsel for the deceased plaintiff filed a second motion
for reconsideration of the order dismissing the complaint claiming that the same is in
violation of Sections 16 and 17 of Rule 3 of the Rules of Court but the same was
denied.
Hence, this petition for review.

The Court reverses the respondent Court and sets aside its order dismissing the
complaint in Civil Case No. 856 and its orders denying the motion for reconsideration of
said order of dismissal. While it is true that a person who is dead cannot sue in court,
yet he can be substituted by his heirs in pursuing the case up to its completion. The
records of this case show that the death of Fortunata Barcena took place on July 9,
1975 while the complaint was filed on March 31, 1975. This means that when the
complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore,
the court had acquired jurisdiction over her person. If thereafter she died, the Rules of
Court prescribes the procedure whereby a party who died during the pendency of the
proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court
"whenever a party to a pending case dies ... it shall be the duty of his attorney to inform
the court promptly of such death ... and to give the name and residence of his executor,
administrator, guardian or other legal representatives." This duty was complied with by
the counsel for the deceased plaintiff when he manifested before the respondent Court
that Fortunata Barcena died on July 9, 1975 and asked for the proper substitution of
parties in the case. The respondent Court, however, instead of allowing the substitution,
dismissed the complaint on the ground that a dead person has no legal personality to
sue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the
succession are transmitted from the moment of the death of the decedent." From the
moment of the death of the decedent, the heirs become the absolute owners of his
property, subject to the rights and obligations of the decedent, and they cannot be
deprived of their rights thereto except by the methods provided for by law. 3 The
moment of death is the determining factor when the heirs acquire a definite right to the
inheritance whether such right be pure or contingent. 4 The right of the heirs to the
property of the deceased vests in them even before judicial declaration of their being
heirs in the testate or intestate proceedings. 5 When Fortunata Barcena, therefore, died
her claim or right to the parcels of land in litigation in Civil Case No. 856, was not
extinguished by her death but was transmitted to her heirs upon her death. Her heirs
have thus acquired interest in the properties in litigation and became parties in interest
in the case. There is, therefore, no reason for the respondent Court not to allow their
substitution as parties in interest for the deceased plaintiff.

Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not
thereby extinguished, the court shall order, upon proper notice, the legal representative
of the deceased to appear and be substituted for the deceased, within such time as may
be granted ... ." The question as to whether an action survives or not depends on the
nature of the action and the damage sued for. 6 In the causes of action which survive
the wrong complained affects primarily and principally property and property rights, the
injuries to the person being merely incidental, while in the causes of action which do not
survive the injury complained of is to the person, the property and rights of property
affected being incidental. 7 Following the foregoing criterion the claim of the deceased
plaintiff which is an action to quiet title over the parcels of land in litigation affects
primarily and principally property and property rights and therefore is one that survives
even after her death. It is, therefore, the duty of the respondent Court to order the legal
representative of the deceased plaintiff to appear and to be substituted for her. But what
the respondent Court did, upon being informed by the counsel for the deceased plaintiff
that the latter was dead, was to dismiss the complaint. This should not have been done
for under the same Section 17, Rule 3 of the Rules of Court, it is even the duty of the
court, if the legal representative fails to appear, to order the opposing party to procure
the appointment of a legal representative of the deceased. In the instant case the
respondent Court did not have to bother ordering the opposing party to procure the
appointment of a legal representative of the deceased because her counsel has not
only asked that the minor children be substituted for her but also suggested that their
uncle be appointed as guardian ad litem for them because their father is busy in Manila
earning a living for the family. But the respondent Court refused the request for
substitution on the ground that the children were still minors and cannot sue in court.
This is another grave error because the respondent Court ought to have known that
under the same Section 17, Rule 3 of the Rules of Court, the court is directed to appoint
a guardian ad litem for the minor heirs. Precisely in the instant case, the counsel for the
deceased plaintiff has suggested to the respondent Court that the uncle of the minors
be appointed to act as guardian ad litem for them. Unquestionably, the respondent
Court has gravely abused its discretion in not complying with the clear provision of the
Rules of Court in dismissing the complaint of the plaintiff in Civil Case No. 856 and
refusing the substitution of parties in the case.

IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the
complaint in Civil Case No. 856 of the Court of First Instance of Abra and the motions
for reconsideration of the order of dismissal of said complaint are set aside and the
respondent Court is hereby directed to allow the substitution of the minor children, who
are the petitioners therein for the deceased plaintiff and to appoint a qualified person as
guardian ad litem for them. Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma, JJ., concur.

Footnotes

1 Which this Court treats as special civil action as per its Resolution dated
February 11, 1976.

2 Section 16. Duty of Attorney upon which death, incapacity or

incompetency of party. - Whenever a party to a pending case dies,
becomes incapacitated or incompetent, it shall be the duty of his attorney
to inform the court promptly of such death, incapacity or incompetency,
and to give the name and residence of his executor, administrator,
guardian or other legal representative.

Section 17. Death of party.—After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for
deceased, within a period of thirty (30) days, or within such time as may
be granted. If the legal representative fails to appear within said time, the
court may order the opposing party to procure the appointment of a legal
representative of the within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of
the deceased. The court charges involved in procuring such appointment,
if defrayed by the opposing party, may be recovered as costs. The heirs of
the deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator and the court
may appoint guardian ad litem for the minor heirs.

3 Buan vs. Heirs of Buan, 53 Phil. 654.

4 Ibarle vs. Po, 92 Phil. 721.

5 Morales, et al. vs. Ybanez, 98 Phil. 677.

6 Iron Gate Bank vs. Brady, 184 U.S. 665, 22 SCT 529, 46 L. ed. 739.

7 Wenber vs. St. Paul City Co., 97 Feb. 140 R. 39 C.C.A. 79.
 FIRST DIVISION

G.R. No. 118248             April 5, 2000

DKC HOLDINGS CORPORATION,petitioner,

vs.
COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR
METRO MANILA, DISTRICT III, respondents.

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari seeking the reversal of the December 5, 1994
Decision of the Court of Appeals in CA-G.R. CV No. 40849 entitled "DKC Holdings
Corporation vs. Victor U. Bartolome, et al.",1 affirming in toto the January 4, 1993
Decision of the Regional Trial Court of Valenzuela, Branch 172, 2 which dismissed Civil
Case No. 3337-V-90 and ordered petitioner to pay P30,000.00 as attorney's fees.

The subject of the controversy is a 14,021 square meter parcel of land located in
Malinta, Valenzuela, Metro Manila which was originally owned by private respondent
Victor U. Bartolome's deceased mother, Encarnacion Bartolome, under Transfer
Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III.
This lot was in front of one of the textile plants of petitioner and, as such, was seen by
the latter as a potential warehouse site.

On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with
Encarnacion Bartolome, whereby petitioner was given the option to lease or lease with
purchase the subject land, which option must be exercised within a period of two years
counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00
a month as consideration for the reservation of its option. Within the two-year period,
petitioner shall serve formal written notice upon the lessor Encarnacion Bartolome of its
desire to exercise its option. The contract also provided that in case petitioner chose to
lease the property, it may take actual possession of the premises. In such an event, the
lease shall be for a period of six years, renewable for another six years, and the monthly
rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six
years, in case of renewal.

Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to
Encarnacion until her death in January 1990. Thereafter, petitioner coursed its payment
to private respondent Victor Bartolome, being the sole heir of Encarnacion. Victor,
however, refused to accept these payments.

Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over

all the properties of Encarnacion, including the subject lot. Accordingly, respondent
Register of Deeds cancelled Transfer Certificate of Title No. B-37615 and issued
Transfer Certificate of Title No. V-14249 in the name of Victor Bartolome.

On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was
exercising its option to lease the property, tendering the amount of P15,000.00 as rent
for the month of March. Again, Victor refused to accept the tendered rental fee and to
surrender possession of the property to petitioner.

Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking
Corporation, Cubao Branch, in the name of Victor Bartolome and deposited therein the
P15,000.00 rental fee for March as well as P6,000.00 reservation fees for the months of
February and March.

Petitioner also tried to register and annotate the Contract on the title of Victor to the
property. Although respondent Register of Deeds accepted the required fees, he
nevertheless refused to register or annotate the same or even enter it in the day book or
primary register.1âwphi1.nêt

Thus, on April 23, 1990, petitioner filed a complaint for specific performance and
damages against Victor and the Register of Deeds, 3 docketed as Civil Case No. 3337-V-
90 which was raffled off to Branch 171 of the Regional Trial Court of Valenzuela.
Petitioner prayed for the surrender and delivery of possession of the subject land in
accordance with the Contract terms; the surrender of title for registration and annotation
thereon of the Contract; and the payment of P500,000.00 as actual damages,
P500,000.00 as moral damages, P500,000.00 as exemplary damages and P300,000.00
as attorney's fees.

Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss 4 was filed
by one Andres Lanozo, who claimed that he was and has been a tenant-tiller of the
subject property, which was agricultural riceland, for forty-five years. He questioned the
jurisdiction of the lower court over the property and invoked the Comprehensive
Agrarian Reform Law to protect his rights that would be affected by the dispute between
the original parties to the case.

On May 18, 1990, the lower court issued an Order 5 referring the case to the Department
of Agrarian Reform for preliminary determination and certification as to whether it was
proper for trial by said court.

On July 4, 1990, the lower court issued another Order 6 referring the case to Branch 172
of the RTC of Valenzuela which was designated to hear cases involving agrarian land,
after the Department of Agrarian Reform issued a letter-certification stating that referral
to it for preliminary determination is no longer required.

On July 16, 1990, the lower court issued an Order denying the Motion to
Intervene,7 holding that Lanozo's rights may well be ventilated in another proceeding in
due time.

After trial on the merits, the RTC of Valenzuela, Branch 172 rendered its Decision on
January 4, 1993, dismissing the Complaint and ordering petitioner to pay Victor
P30,000.00 as attorney's fees. On appeal to the CA, the Decision was affirmed in toto.

Hence, the instant Petition assigning the following errors:

(A)

FIRST ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE

PROVISION ON THE NOTICE TO EXERCISE OPTION WAS NOT
TRANSMISSIBLE.

(B)

SECOND ASSIGNMENT OF ERROR

 THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
NOTICE OF OPTION MUST BE SERVED BY DKC UPON ENCARNACION
BARTOLOME PERSONALLY.

(C)

THIRD ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE

CONTRACT WAS ONE-SIDED AND ONEROUS IN FAVOR OF DKC.

(D)

FOURTH ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE

EXISTENCE OF A REGISTERED TENANCY WAS FATAL TO THE VALIDITY
OF THE CONTRACT.

(E)

FIFTH ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT

PLAINTIFF-APPELLANT WAS LIABLE TO DEFENDANT-APPELLEE FOR
ATTORNEY'S FEES.8

The issue to be resolved in this case is whether or not the Contract of Lease with Option
to Buy entered into by the late Encarnacion Bartolome with petitioner was terminated
upon her death or whether it binds her sole heir, Victor, even after her demise.

Both the lower court and the Court of Appeals held that the said contract was
terminated upon the death of Encarnacion Bartolome and did not bind Victor because
he was not a party thereto.

Art. 1311 of the Civil Code provides, as follows —

Art. 1311. Contracts take effect only between the parties, their assigns and heirs,
except in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law. The heir is
not liable beyond the value of the property he received from the decedent.

x x x           x x x          x x x

The general rule, therefore, is that heirs are bound by contracts entered into by their
predecessors-in-interest except when the rights and obligations arising therefrom are
not transmissible by (1) their nature, (2) stipulation or (3) provision of law.

In the case at bar, there is neither contractual stipulation nor legal provision making the
rights and obligations under the contract intransmissible. More importantly, the nature of
the rights and obligations therein are, by their nature, transmissible.

The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist,

is as follows:
 Among contracts which are intransmissible are those which are purely personal,
either by provision of law, such as in cases of partnerships and agency, or by the
very nature of the obligations arising therefrom, such as those requiring special
personal qualifications of the obligor. It may also be stated that contracts for the
payment of money debts are not transmitted to the heirs of a party, but constitute
a charge against his estate. Thus, where the client in a contract for professional
services of a lawyer died, leaving minor heirs, and the lawyer, instead of
presenting his claim for professional services under the contract to the probate
court, substituted the minors as parties for his client, it was held that the contract
could not be enforced against the minors; the lawyer was limited to a recovery on
the basis of quantum meruit.9

In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of

special knowledge, genius, skill, taste, ability, experience, judgment, discretion,
integrity, or other personal qualification of one or both parties, the agreement is of a
personal nature, and terminates on the death of the party who is required to render such
service." 10

It has also been held that a good measure for determining whether a contract
terminates upon the death of one of the parties is whether it is of such a character that it
may be performed by the promissor's personal representative. Contracts to perform
personal acts which cannot be as well performed by others are discharged by the death
of the promissor. Conversely, where the service or act is of such a character that it may
as well be performed by another, or where the contract, by its terms, shows that
performance by others was contemplated, death does not terminate the contract or
excuse nonperformance. 11

In the case at bar, there is no personal act required from the late Encarnacion
Bartolome. Rather, the obligation of Encarnacion in the contract to deliver possession of
the subject property to petitioner upon the exercise by the latter of its option to lease the
same may very well be performed by her heir Victor.

As early as 1903, it was held that "(H)e who contracts does so for himself and his
heirs." 12 In 1952, it was ruled that if the predecessor was duty-bound to reconvey land
to another, and at his death the reconveyance had not been made, the heirs can be
compelled to execute the proper deed for reconveyance. This was grounded upon the
principle that heirs cannot escape the legal consequence of a transaction entered into
by their predecessor-in-interest because they have inherited the property subject to the
liability affecting their common ancestor. 13

It is futile for Victor to insist that he is not a party to the contract because of the clear
provision of Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there
is privity of interest between him and his deceased mother. He only succeeds to what
rights his mother had and what is valid and binding against her is also valid and binding
as against him. 14 This is clear from Parañaque Kings Enterprises vs. Court of
Appeals, 15 where this Court rejected a similar defense —

With respect to the contention of respondent Raymundo that he is not privy to the
lease contract, not being the lessor nor the lessee referred to therein, he could
thus not have violated its provisions, but he is nevertheless a proper party.
Clearly, he stepped into the shoes of the owner-lessor of the land as, by virtue of
his purchase, he assumed all the obligations of the lessor under the lease
contract. Moreover, he received benefits in the form of rental payments.
Furthermore, the complaint, as well as the petition, prayed for the annulment of
 the sale of the properties to him. Both pleadings also alleged collusion between
him and respondent Santos which defeated the exercise by petitioner of its right
of first refusal.

In order then to accord complete relief to petitioner, respondent Raymundo was a

necessary, if not indispensable, party to the case. A favorable judgment for the
petitioner will necessarily affect the rights of respondent Raymundo as the buyer
of the property over which petitioner would like to assert its right of first option to
buy.

In the case at bar, the subject matter of the contract is likewise a lease, which is a
property right. The death of a party does not excuse nonperformance of a contract
which involves a property right, and the rights and obligations thereunder pass to the
personal representatives of the deceased. Similarly, nonperformance is not excused by
the death of the party when the other party has a property interest in the subject matter
of the contract. 16

Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound
by the subject Contract of Lease with Option to Buy.

That being resolved, we now rule on the issue of whether petitioner had complied with
its obligations under the contract and with the requisites to exercise its option. The
payment by petitioner of the reservation fees during the two-year period within which it
had the option to lease or purchase the property is not disputed. In fact, the payment of
such reservation fees, except those for February and March, 1990 were admitted by
Victor. 17 This is clear from the transcripts, to wit —

ATTY. MOJADO:

One request, Your Honor. The last payment which was allegedly made in
January 1990 just indicate in that stipulation that it was issued November of 1989
and postdated January 1990 and then we will admit all.

COURT:

All reservation fee?

ATTY. MOJADO:

Yes, Your Honor.

COURT:

All as part of the lease?

ATTY. MOJADO:

Reservation fee, Your Honor. There was no payment with respect to payment of
rentals. 18

Petitioner also paid the P15,000.00 monthly rental fee on the subject property by
depositing the same in China Bank Savings Account No. 1-04-02558-I-1, in the name of
Victor as the sole heir of Encarnacion Bartolome, 19 for the months of March to July 30,
1990, or a total of five (5) months, despite the refusal of Victor to turn over the subject
property. 20

Likewise, petitioner complied with its duty to inform the other party of its intention to
exercise its option to lease through its letter dated Match 12, 1990, 21 well within the two-
year period for it to exercise its option. Considering that at that time Encarnacion
Bartolome had already passed away, it was legitimate for petitioner to have addressed
its letter to her heir.1âwphi1

It appears, therefore, that the exercise by petitioner of its option to lease the subject
property was made in accordance with the contractual provisions. Concomitantly,
private respondent Victor Bartolome has the obligation to surrender possession of and
lease the premises to petitioner for a period of six (6) years, pursuant to the Contract of
Lease with Option to Buy.

Coming now to the issue of tenancy, we find that this is not for this Court to pass upon
in the present petition. We note that the Motion to Intervene and to Dismiss of the
alleged tenant, Andres Lanozo, was denied by the lower court and that such denial was
never made the subject of an appeal. As the lower court stated in its Order, the alleged
right of the tenant may well be ventilated in another proceeding in due time.

WHEREFORE, in view of the foregoing, the instant Petition for Review is GRANTED.
The Decision of the Court of Appeals in CA-G.R. CV No. 40849 and that of the Regional
Trial Court of Valenzuela in Civil Case No. 3337-V-90 are both SET ASIDE and a new
one rendered ordering private respondent Victor Bartolome to:

(a) surrender and deliver possession of that parcel of land covered by Transfer
Certificate of Title No. V-14249 by way of lease to petitioner and to perform all
obligations of his predecessor-in-interest, Encarnacion Bartolome, under the
subject Contract of Lease with Option to Buy;

(b) surrender and deliver his copy of Transfer Certificate of Title No. V-14249 to
respondent Register of Deeds for registration and annotation thereon of the
subject Contract of Lease with Option to Buy;

(c) pay costs of suit.

Respondent Register of Deeds is, accordingly, ordered to register and annotate the
subject Contract of Lease with Option to Buy at the back of Transfer Certificate of Title
No. V-14249 upon submission by petitioner of a copy thereof to his office.

SO ORDERED.1âwphi1.nêt

Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.

Footnotes
1 
Penned by Associate Justice Corona Ibay-Somera, concurred in by Justices
Asaali S. Isnani and Celia Lipana-Reyes.
2 
Penned by Judge Teresita Dizon-Capulong.
3 
Records, Civil Case No. 3337-V-90, pp. 1-28.
4 
Id., pp. 35-43.
5 
Id., p. 60.
6 
Id., p. 129.
7 
Id., p. 130.
8 
Petition for Review, pp. 9-10; Rollo, pp. 10-11.
9 
IV Tolentino, CIVIL CODE OF THE PHILIPPINES, 430 (1986).
10 
Kanawha Banking & Trust Co. v. Gilbert, 46 S.E. 2d 225, 131 W. Va. 88; Rowe
v. Compensation Research Bureau, Inc., 62 N.W. 2d 581, 265 Wis. 589; Fressil
v. Nichols, 114 So. 431, 94 Fla. 403; Cutler v. United Shoe Manufacturing
Corporation, 174 N.E. 507, 274 Mass. 341, cited in 17A C.J.S. Sec. 465.
11 
17 Am. Jur. 2d, Sec. 413, p. 866.
12 
Eleizegui v. Lawn Tennis Club, G.R. No. 967, 2 Phil. 309, 313
(1903), citing Article 1257 of the old Civil Code.
13 
Carillo v. Salak de Paz, G.R. No. L-4133, 91 Phil. 265 (1952).
14 
See Galsinao v. Austria, G.R. No. L-7918, 97 Phil. 82, 87 (1955).
15 
G.R. No. 111538, 268 SCRA 727, 745 (1997).
16 
17A C.J.S. Section 465, p. 627.
17 
See T.S.N., 19 October 1991, pp. 11-12, 14, 16, 19 and 20-21.
18 
T.S.N., 29 October 1991, pp. 20-21.
19 
See Exhibit "K"; Records, Civil Case No. 3337-V-90, pp. 274-276.
20 
See T.S.N., 9 January 1992, pp. 16-17.
21 
Exh. "J", Records, Civil Case No. 3337-V-90, pp. 272-273.