SUCCESSION (8/15/19)
BONDAD V BONDAD
Rufina Bondad had two brothers and two sisters, respectively named
Venancio, Placido, Maria, and Paula who died leaving four children: Eleno,
Estanislao, Raymundo, and Pedro, all surnamed Emlano.
Rufina Bondad brought suit against her said brothers, sisters, and nephews to
secure the partition of the property left to these defendants by her father
Crisanto Bondad. This was dismissed after documentary and parol evidence
were introduced.
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." The plaintiff
did not try to prove her father's ownership in the property she describes as left
by him at his death. She merely presented 2 witnesses
(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
(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
WON the property It can be shown, as the lower court found, that the partition has already been made.
should be
partitioned In the decision rendered in the case of Ilustre vs. Alaras Frondosa (17 Phil. Hep., 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.
It has been repeatedly shown in the record that there are no debts outstanding against the
succession or the complaint.
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, thesurviving widow, executed the
document Exhibit D, in which she sets forth that she deliveredthe 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
Page 1 of 17
Bondad, others by his wife Gliceria Alcantara, while still others were purchased a coownership in said land between the four above mentioned heirs, including the plaintiff
by both of them, but witness did not specify the origin or the title of ownership Rufina Bondad.
of each individual parcel. Furthermore, Crisanto Bondad was married twice and This, however, does not militate against the partition in question, but rather confirms it. An
ownership of the properties were not propery proven action for the division of coownership, which is different from that for partition of a
(6)That, on the other hand, while there was no need of exhibiting titles to hereditary succession, always lies in behalf of the interested parties.
possession, they were nevertheless exhibited by: Venancio Bondad (one of the
siblings) 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 (2nd widfe), by virtue of a notarial
instrument, the land specified in the complaint under letter (b), with identical
area, the identical number of coconut trees and the identical boundaries;
Placido Bondad (sibling )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 also holds by purchase from Margarita Bondad, by
virtue of a notarial instrument 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
of this property for the past ten years; that such possession was only acquired
by adjudication; and that the adjudication was the result of a partition.

ESTATE OF HEMADY V LUZON SURETY CO

Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance WON the estate of We find this reasoning untenable. Under the present Civil Code (Article 1311), as well as
of Rizal, dismissing its claim against the Estate of K. H. Hemady (Special Hemandy should under the Civil Code of 1889 (Article 1257), the rule is that:-
roceeding No. Q-293) for failure to state a cause of action. pay indemnity "Contracts take effect only as between the parties, their assigns and heirs, except in the case
The Luzon Surety Co. had filed a claim against the Estate based on twenty where the rights and obligations arising from the contract are not transmissible by their
different indemnity agreements, or counter bonds, each subscribed by a nature, or by stipulation or by provision of law."
distinct principal and by the deceased K. H. Hemady, a surety solidary While in our successional system the responsibility of the heirs for the debts of their
guarantor) in all of them, in consideration of the Luzon Surety Co.'s of having decedent cannot exceed the value of the inheritance they receive from him, the principle
guaranteed, the various principals in favor of different creditors. remains intact that these heirs succeed not only to the rights of the deceased but also to his
obligations.

Page 2 of 17
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: (1) that the premiums due and cost of
documentary stamps were not contemplated under the indemnity agreements
; and (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."
The real properties involved are two parcels of land identified as Lot 773-A and
Lot 773-B which were originally known as Lot 773 of the cadastral survey of
Murcia, Negros Occidental registered under the name of the heirs of Anecito
Yanes who was survived by his children, Rufino, Felipe and Teodora.
Herein private respondents, Estelita, Iluminado and Jesus, are the children of
Rufino. The other private respondents, Antonio and Rosario Yanes, are children
of Felipe.
Aniceto left his children Lots 773 and 823. Teodora (one of the siblings)
cultivated only three hectares of Lot 823. Rufino and his children left the
province to settle in other places during WWII. When one of Rufino’s children
went back to get their share of the sugar produced therein, he was informed
that Fortunato Santiago, Fuentebella (Puentevella) and
Alvarez were in possession of Lot 773 as evidenced by transfer cert of title
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B.
Fuentebella, Jr. in as evidenced by a TCT.
After Fuentebella's death and during the settlement of his estate, the
administratrix thereof (Arsenia R. Vda. de Fuentebella, his wife) sold Rosendo
Alvarez as evidenced by a TCT.
Two years later or on May 26, 1960, Teodora Yanes and the children of her
brother Rufino, namely, Estelita, Iluminado and Jesus, filed in the Court of First
Instance of Negros Occidental a complaint against Fortunato Santiago, Arsenia
Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental
for the "return" of the ownership and possession of the lots. They also prayed
that an accounting of the produce of the land from
Because under the law (Article 1311), a person who enters into a contract is deemed to have
contracted for himself and hid heirs and assigns, it is unnecessary for him to expressly
stipulate to that effect 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.
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.
ALVAREZ V IAC
Whether or not the As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the
liability or liabilities Supreme Court, to review the decision in Civil Case No. 5022 ordering Alvarez to reconvey
of Rosendo Alvarez the lots in dispute to herein private respondents. Said decision had long become final and
arising from the executory and with the possible exception of Dr. Siason, who was not a party to said case.
sale of Lots Nos. They did not appeal the case
773-A and 773-B of
Murcia Cadastre to There is no dispute that the rights of the Yaneses to the properties in question have been
Dr. Rodolfo Siason, if finally adjudicated in Civil Case No. 5022. As found by the lower court, from the
ever there is any, uncontroverted evidence presented, the Yaneses have been illegally deprived of ownership
could be legally and possession of the lots in question.[
passed or Petitioners further contend that the liability arising from the sale of said Lots Nos. 773-A and
transmitted by 773-B made by Resendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late
operations (sic) of Rosendo Alvarez or of his estate, after his death. Such contention is untenable for it overlooks
law the doctrine obtaining in this jurisdiction on the general transmissibility of the rights and
to the petitioners obligations of the deceased to his legitimate children and heirs.
without violation of Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal
law and due consequences of their father's transaction, which gave rise to the present claim for damages.
process."[ That petitioners did not inherit the property involved herein is of no moment because by
legal fiction, the monetary equivalent thereof devolved into the mass of their father's
hereditary estate, and we have ruled that the hereditary assets are always liable intheir
totality for the payment of the debts of the estate. It must, however, be made clear that
petitioners are liable only to the extent of the value of their inheritance.
Page 3 of 17
1944 up to the filing of the complaint be made by the defendants, that after
court approval of said accounting, the share or money equivalent due the
plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs
P500.00 as damages in the form of attorney's fees.
During the pendency of the case Alvarez sold Lots 773-
A, 773-B and another lot for P25,000.00 to Dr. Rodolfo Siason.
On October 11, 1963, a decision was rendered by the CFI of Negros Occidental
ordering the reconveyance of the lots.
However, execution of said decision proved unsuccessful with respect to Lot
773. The sheriff stated that he discovered that Lot 773 had been subdivided
into Lots 773-A and 773-B; that they were "in the name" of Rodolfo Siason who
had purchased them from Alvarez, and that Lot 773 could not be delivered to
the plaintiffs as Siason was "not a party per writ of execution."
The execution of the decision in Civil Case No. 5022 having met a hindrance,
herein private respondents (the Yaneses) filed a petition for the issuance of a
new certificate of title and for a declaration of nullity of TCT issued to Rosendo
Alvarez. Thereafter, the court required Rodolfo Siason to produce the
certificates of title covering Lots 773 and 823. Expectedly, Siason filed a
manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots
773 and 823, "in good faith and for a valuable consideration without any
knowledge of any lien or encumbrances against said propert(ies)"
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ
of execution in Civil Case No. 5022. Siason opposed it. In its order of September
28, 1968 in Civil Case No. 5022, the lower court, noting that the Yaneses had
instituted another action for the recovery of the land in question, ruled that
the judgment therein could not be enforced against Siason as he was not a
party in the case.

The action filed by the Yaneses on February 21, 1968 was for recovery of real
property with damages.[24] Named defendants therein were Dr. Rodolfo
Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of
Deeds of Negros Occidental. The Yaneses prayed for the cancellation of TCT
Nos. T-19291 and 19292 issued to Siason (sic) for being null and void;

In his answer to the complaint, Siason alleged that the validity of his titles to
Lots 773-A and 773-B, having been passed upon by the court in its order of
September 4, 1965, had become res judicata and the Yaneses were estopped
from questioning said order. On their part, the Alvarezes stated in their answer
that the Yaneses’ cause of action had been "barred by res
judicata, statute of limitation and estoppel."[27]

Page 4 of 17
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who
purchased the properties in question thru an agent as he was then in Mexico
pursuing further medical studies, was a buyer in good faith for a valuable
consideration.
Although the Yaneses were negligent in their failure to place a notice of lis
pendens "before the Register of Deeds of Negros Occidental in order to protect
their rights over the property in question" in Civil Case No. 5022, equity
demanded that they recover the actual value of the land because the sale
thereof executed between Alvarez and Siason was without court approval.
In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza,
Dr. Jorge Rabadilla, predecessor-in-interest of the herein petitioner, Johnny S.
Rabadilla, was instituted as a devisee of a parcel of land surveyed as Lot No.
1392 of the Bacolod Cadastre provided that 100 piculs of sugar be delivered to
the heirs of Belleza. Should this not be fulfilled then the lot shall be reconveyed.
Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased,
Dr. Jorge Rabadilla, and Transfer Certificate of Title No. 44498 was issued. Dr.
Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children
Johnny (petitioner).
Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, against
the heirs of Dr. Jorge Rabadilla, to enforce the provisions of subject
Codicil.
The Complaint alleged that the defendant-heirs violated the conditions of the
Codicil,
in that:
1. Lot No. 1392 was mortgaged to the Philippine National Bank and the
Republic Planters Bank in disregard of the testatrix's specific instruction to sell,
lease, or mortgage only to the near descendants and sister of the testatrix.
2. Defendant-heirs failed to comply with their obligation to deliver one
hundred (100) piculs of sugar (75 piculs export sugar and 25 piculs domestic
sugar) to plaintiff Maria Marlena Coscolluela y Belleza from sugar crop years
1985 up to the filing of the complaint as mandated by the Codicil, despite
repeated demands for compliance.
3. The banks failed to comply with the 6th paragraph of the Codicil which
provided that in case of the sale, lease, or mortgage of the property, the buyer,
lessee, or mortgagee shall likewise have the obligation to deliver 100 piculs of
sugar per crop year to herein private respondent.
RABADILLA v CA
WON the heirs of It is a general rule under the law on succession that successional rights are transmitted from
Rabadilla must the moment of death of the decedent and compulsory heirs are called to succeed by
reconvey the lot operation of law. Thus, the petitioner, his mother and sisters, as compulsory heirs of the
instituted heir, Dr. Jorge Rabadilla, succeeded the latter by operation of law, without need
of further proceedings.
Therefore, private respondent has a cause of action against petitioner and the trial court
erred in dismissing the complaint below. Petitioner also theorizes that Article 882 of the New
Civil Code on modal institutions is not applicable because what the testatrix intended was a
substitution - Dr. Jorge Rabadilla was to be substituted by the testatrix's near descendants
should there be noncompliance with the obligation to deliver the piculs of sugar to private
respondent.
Again, the contention is without merit. In simple substitutions, the second heir takes the
inheritance in default of the first heir by reason of incapacity, predecease or renunciation. In
the case under consideration, the provisions of subject Codicil do not provide that should Dr.
Jorge Rabadilla default due to predecease, incapacity or renunciation, the testatrix's near
descendants would substitute him. What the Codicil provides is that, should Dr. Jorge
Rabadilla or his heirs not fulfill the conditions imposed in the Codicil, the property referred
to shall be seized and turned over to the testatrix's near descendants.
From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the
testatrix intended that subject property be inherited by Dr. Jorge Rabadilla. It is likewise
clearly worded that 100 piculs of sugar to the herein private respondent, Belleza, during the
lifetime of the latter. However, the testatrix did not make Dr. Jorge Rabadilla's inheritance
and the effectivity of his institution as a devisee, dependent on the performance of the said
obligation. It is clear, though, that
should the obligation be not complied with, the property shall be turned over to the
testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under subject
Page 5 of 17
The plaintiff then prayed for the reconveyance of the lot to the surviving heirs
of the late Aleja Belleza, and the cancellation of TCT No. 44498
Plaintiff (private respondent) and a certain Alan Azurin, son-inlaw of the herein
petitioner who was lessee of the property and acting as attorney-in-fact of
defendant-heirs, arrived at an amicable settlement and entered into a
Memorandum of Agreement on the obligation to deliver one hundred piculs
of sugar
However, there was no compliance with the aforesaid Memorandum of
Agreement except for
a partial delivery of 50.80 piculs of sugar corresponding to sugar crop year 1988
-1989.
On July 22, 1991, the Regional Trial Court came out with a decision, dismissing
the complaint
On appeal by plaintiff, the First Division of the Court of Appeals reversed the
decision of the trial court; ratiocinating and ordering thus:
However, plaintiff-appellant must institute separate proceedings to reopen
Aleja Belleza's estate, secure the appointment of an administrator, and
distribute Lot No. 1392 to Aleja Belleza's legal heirs in order to enforce her
right, reserved to her by the codicil, to receive her legacy of 100 piculs of sugar
per year out of the produce of Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and another one entered
ordering defendants-appellees, as heirs of Jorge Rabadilla, to reconvey title
over Lot No. 1392, together with its fruits and interests, to the estate of Aleja
Belleza.
NHA v ALMEIDA
This is a Petition for Review on Certiorari under Rule 45 filed by the National
Housing Authority (NHA) against the Court of Appeals, the Regional Trial Court
of San Pedro Laguna, Branch 31, and private respondent Segunda Almeida.
On June 28, 1959, the Land Tenure Administration (LTA), now DAR, awarded
to Margarita Herrera several portions of land which are part of the Tunasan
Estate in San Pedro, Laguna. The award is evidenced by an Agreement to Sell
No. 3787.
Codicil is evidently modal in nature because it imposes a charge upon the instituted heir
without, however, affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts of liberality, an obligation
imposed upon the heir should not be considered a condition unless it clearly appears from
the Will itself that such was the intention of the testator. In case of doubt, the institution
should be considered as modal and not conditional.
In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the
application of any of its provisions, the testator's intention is to be ascertained from the
words of the Will, taking into consideration the circumstances under which it was made.[23]
Such construction as will sustain and uphold the Will in all its parts must be adopted.[
Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement,
the said obligation imposed by the Codicil has been assumed by the lessee, and whatever
obligation petitioner had become the obligation of the lessee; that petitioner is deemed to
have made a substantial and constructive compliance of his obligation through the
consummated settlement between the lessee and the private respondent, and having
consummated a settlement with the petitioner, the recourse of the private respondent is
the fulfillment of the obligation under the amicable settlement and not the seizure of subject
property.
Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person
disposes of his property, to take effect after his death.[25] Since the Will expresses the
manner in which a person intends how his properties be disposed, the wishes and desires of
the testator must be strictly followed. Thus, a Will cannot be the subject of a compromise
agreement which would thereby defeat the very purpose of making a Will.
WHETHER OR NOT The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it
THE AWARD OF THE could not bind the NHA. That, "insofar as [the] NHA is concerned, it is an evidence that the
SUBJECT LOTS BY subject lots were indeed transferred by Margarita Herrera, the original awardee, to
THE NHA IS Francisca Herrera was then applying to purchase the same before it."[32]
ARBITRARY. We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should
have noted that the effectivity of the said document commences at the time of death of the
author of the instrument Hence, in such period, all the interests of the person should cease
to be hers and shall be in the possession of her estate until they are transferred to her heirs
by virtue of Article 774 of the Civil Code
Page 6 of 17
The records show that Margarita Herrera had two children: Beatriz Herrera-
Mercado (the mother of private respondent) and Francisca Herrera. Beatriz
predeceased her mother and left heirs. Margarita Herrera passed away on
October 27, 1971.
Francisca Herrera, the remaining child of the late Margarita Herrera executed
a Deed of Self Adjudication claiming that she is the only remaining relative,
being the sole surviving daughter of the deceased. She also claimed to be the
exclusive legal heir of the late Margarita Herrera.
The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of
the Deed of Self-Adjudication before CFI of Laguna which rendered the deed
was declared null and void
During trial on the merits of the case assailing the Deed of Self-Adjudication,
Francisca Herrera filed an application with the NHA to purchase the same lots
submitting therewith a copy of the "Sinumpaang Salaysay" executed by her
mother which was subsequently granted stating that on October 7, 1960,
Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or
transferred all her rights and interest over the lots in question in favor of the
protestee; and protestee had paid the lots in question in full on March 8, 1966
with the defunct Land Tenure Administration. This Office finds that protestee
has a better preferential right to purchase the lots in question. Private
respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the
application.
Private respondent Almeida appealed to the Office of the President who
affirmed the NHA resolution
On February 1, 1987, Francisca Herrera died. Her heirs executed an
extrajudicial settlement of her estate which they submitted to the NHAwhich
were approved. Several deeds of sale were executed in favor of the heirs of
Francisca Herrera and titles were issued in their favor. Thereafter, the heirs of
Francisca Herrera directedSegunda Mercado-Almeida (child of Beatriz) to leave
the premises that she was occupying.
Segunda Mercado-Almeida sought the cancellation of the titlesissued in favor
of the heirs of Francisca. She filed a Complaint, for "Nullification of
Government Lot's Award," with the Regional Trial Court of San Pedro, Laguna,
Branch 31.
By considering the document, petitioner NHA should have noted that the original applicant
(Margarita Herrera) has already passed away. The NHA issued its resolution[35] on February
5, 1986. The NHA gave due course to the application made by Francisca Herrera without
considering that the initial applicant's death would transfer all her property, rights and
obligations to the estate including whatever interest she has or may have had over the
disputed properties.
To the extent of the interest that the original owner had over the property, the same should
go to her estate. Margarita Herrera had an interest in the property and that interest should
go to her estate upon her demise so as to be able to properly distribute them later to her
heirs–in accordance with a will or by operation of law.
The death of Margarita Herrera does not extinguish her interest over the property. Margarita
Herrera had an existing Contract to Sell[36] with NHA as the seller. Upon Margarita Herrera's
demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was
anobligation on both parties–Margarita Herrera and NHA. Obligations are transmissible.[37]
Margarita Herrera's obligation to pay became transmissible at the time of her death either
by will or by operation of law.
If we sustain the position of the NHA that this document is not a will, then the interests of
the decedent should transfer by virtue of an operation of law and not by virtue of a resolution
by the NHA. For as it stands, NHA cannot make another contract to sell to other
parties of a property already initially paid for by the decedent. Such would be an act contrary
to the law on succession and the law on sales and obligations.[38]
When the original buyer died, the NHA should have considered the estate of the decedent
as the next "person"[39] likely to stand in to fulfill the obligation to pay the rest of the
purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should
have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil
Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed
therein null and void[40] should have alerted the NHA that there are other heirs to the
interests and properties of the decedent who may claim the property after a testate or
intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the
lots.
We need not delve into the validity of the will. The issue is for the probate court to
determine. We affirm the Court of Appeals and the Regional Trial Court which noted that it
has an element of testamentary disposition where (1) it devolved and transferred property;
(2) the effect of which shall transpire upon the death of the instrument maker.[41]
IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED
Page 7 of 17
In her complaint, private respondent Almeida invoked her forty-year
occupation of the disputed properties, and re-raised the fact that Francisca
Herrera's declaration of self adjudication has been adjudged as a nullity
because the other heirs were disregarded. The
defendant heirs of Francisca Herrera alleged that the complaint was barred by
laches and that the decision of the Office of the President was already final and
executory. They also contended that the transfer of purchase of the subject
lots is perfectly valid as the same was supported by a consideration and that
Francisca Herrera paid for the property with the use of
her own money. Further, they argued that plaintiff's occupation of the
property was by mere tolerance and that they had been paying taxes thereon.

The Regional Trial Court dismissed the case for lack of

jurisdiction. The Court of Appeals in a Decision dated June 26, 1989 reversed
and held that the Regional Trial Court had jurisdiction to hear and decide the
case involving "title and possession to real property within its jurisdiction." The
case was then remanded.

On March 9, 1998, the Regional Trial set aside the resolution of the NHA and
the decision of the Office of the President awarding the subject lots in favor
of Francisca Herrera. It declared the deeds of sale executed by NHA in favor of
Herrera's heirs null and void.
The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an
assignment of rights but a disposition of property which shall take effect upon
death. It then held that the said document must first be submitted to probate
before it can transfer property.
Both the NHA and the heirs of Francisca Herrera filed their respective motions
for reconsideration which were both denied.
On August 28, 2003, the Court of Appeals affirmed the decision of the Regional
Trial Court, The Court of Appeals ruled that the NHA acted arbitrarily in
awarding the lots to the heirs of Francisca Herrera. It upheld the trial court
ruling that the "Sinumpaang Salaysay" was not an assignment of rights but one
that involved disposition of property which shall take effect
upon death. The issue of whether it was a valid will must first be determined
by probate.

DE BORJA V VDA DE BORJA

It is uncontested that Francisco de Borja, upon the death of his wife Josefa WON probate of the The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar. This is
Tangco, filed a petition for the probate of her will. will is necessary apparent from an examination of the terms of the agreement between Jose de Borja and
even after the

Page 8 of 17
Francisco de Borja was appointed executor andadministrator; in 1952, their
son, Jose de Borja, was appointed co-administrator. When he died, 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 relationship between the children of the first marriage and Tasiana
Ongsingco has been plagued with several court suits and counter-suits
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."
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.
The genuineness and due execution of the compromise 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
explicitlyconditions the validity of an extrajudicial settlement of a decedent's
estate by agreement between heirs, upon the facts that "(if) the decedent left
properties have Tasiana Ongsingco. Paragraph 2 of said agreement specifically stipulates that the sum of
already been P800,000 payable to Tasiana Ongsingco -
distributed in "shall be considered as full - complete payment - settlement of her hereditary share in the
accordance with it estate of the late Francisco de Borja as well as the estate of Josefa Tangco,
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 estates 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
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]
It is likewise worthy of note in this connection that as the surviving spouse of Francisco
deBorja, Tasiana Ongsingco was his compulsory heir under articles 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
TasianaOngsingco Vda. de de Borja.
Since the compromise contract Annex A was entered into by and between "Jose de
Borjapersonally and as administrator of the Testate Estate of Josefa Tangco" on the one
hand, andon 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
previousauthority 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:
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.
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
anheir of Francisco de Borja, whose estate was the object of Special Proceeding No. 832 of
theCourt 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
Page 9 of 17
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, barthe 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 Guevarra vs. Guevarra,
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.
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 by 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.
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 Guevara 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 in G. R. No. L-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
Page 10 of 17

This action was instituted by plaintiffs against the administratrix of the estate
of Maxima Santos, to secure a judicial declaration that one-half of the
properties left by said Maxima Santos Vda. de Blas, the greater bulk of which
are set forth and described in the project of partition presented in the
proceedings for the administration of the estate of the deceased Simeon Blas,
had been promised by the deceased Maxima Santos to be delivered upon her
death and in her will to the plaintiffs, and requesting that the said properties
so promised be adjudicated to the plaintiffs.
The complaint also alleges that the plaintiffs are entitled to inherit certain
properties but which properties have already been included in the inventory
of the estate of the deceased Simeon Blas and evidently partitioned and
conveyed to his heirs in the proceedings for the administration of his (Simeon
Blas) estate.
Defendant, who is the administratrix of the estate of the deceased Maxima
Santos Vda. De Blas, filed an answer with a counterclaim, and later, an
amended answer and a counterclaim.
The said amended answer admits the allegations of the complaint as to her
capacity as administratrix; the death of Simeon Blas on January 3, 1937; the
fact that Simeon Blas and
Marta Cruz begot three children, only one of whom, namely, Eulalia Blas, left
legitimate descendants; that Simeon Blas contracted a second marriage with
Maxima Santos on June 28, 1898. She denies, for lack of sufficient information
and belief, knowledge of the first marriage of Simeon Blas to Marta Cruz, that
they acquired Simeon Blas and Marta Cruz acquired properties situated in
Obando, Bulacan, that said properties were utilized as capital, etc.
As special defenses, she alleges that the properties of the spouses Blas and
Santos had been settled and liquidated in the project of partition of the estate
of said Simeon Blas; that pursuant to the project of partition, plaintiffs and
some defendants had already received the respective properties adjudicated
to them; that the plaintiffs and the defendants Marta Gervacio and Jose Chivi
are estopped from impugning the validity of the project of partition of the
estate of the deceased Simeon Blas and from questioning the ownership in the
properties conveyed in the project of partition to Maxima Santos as her own
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.
The Rizal court is upheld, while the contrary resolution of the Court of First Instance of Nueva
Ecija should be, and is, reversed.
BLAS V SANTOS
WON the The descendants of Marta Cruz can no longer claim the conjugal properties that she and her
descendants of Cruz husband may have acquired during their marriage although no liquidation of such, properties
can claim and delivery thereof to the heirs of Marta Cruz have been made, no action to recover said
unliquidated properties
conjugal properties. having been presented in the proceedings for the settlement of the estate of Simeon Blas.
But the principal basis for the plaintiffs' action in the case at bar is the document Exhibit "A".
It is not disputed that this document was prepared at the instance of Simeon Blas for the
reason that the conjugal properties of his first marriage had not been liquidated; that it was
prepared at the same time as the will of Simeon Blas
It is also not disputed that the document was signed by Maxima Santos and one copy thereof,
which was presented in court as Exhibit "A", was kept by plaintiffs' witness Andres Pascual.
Plaintiffs-appellants argue before us that Exhibit "A" is both a trust agreement and a contract
in the nature of a compromise to avoid litigation. Defendants-appellees, in answer, claim
that it is neither a trust agreement nor a compromise agreement. Considering that the
properties
of the first marriage of Simeon Blas had not been liquidated when Simeon Blas executed, his
will on December 26, 1936, and the further fact that such properties were actually includedas
conjugal properties acquired during1 the second marriage, we find, as contended by
plaintiffs-appellants, that the preparation and execution of Exhibit "A" was ordered to
prevent his heirs by his first marriage from contesting his will and demanding liquidation of
the conjugal properties acquired during his first marriage, and an accounting of the fruits
and proceeds thereof from the time of the death of his first wife.
Exhibit "A", therefore, appears to be the compromise defined in Article 1809 of the Civil Code
of Spain, in force at the time of the execution of Exhibit "A"
Compromise is a contract by which each of the parties in interest, by giving, promising, or
retaining something avoids the provocation of a suit or terminates one which has already
been instituted."
The agreement or
promise that Maxima Santos makes in Exhibit "A" is to hold one-half of her said share in the
conjugal assets in trust for the heirs and legatees of her husband in his will, with the
obligation of conveying the same to such of his heirs or legatees as she may choose in her
last will and testament. It is to be noted that the conjugal properties referred to are those
that were actually existing at that time, December 26, 1936. Simeon Blas died on January 9,
Page 11 of 17
exclusive property; that the testament executed by Maxima Santos is valid, the
plaintiffs having no right to recover any portion of Maxima Santos' estate now
under administration by the court.
The complaint was dismissed.
From this decision, the plaintiffs have appealed to this Court.
The facts essential to an understanding of the issues involved in the case may
be briefly summarized as follows:
Simeon Blas contracted a first marriage with Marta Cruz sometime before
1898. They had three children, only one of whom, Eulalia, left children, namely,
Maria Gervacio Blas, one of the plaintiffs, Marta Gervacio Blas, one of the
defendants, and Lazaro Gervacio Blas. Lazaro died in 1953 and is survived by
three legitimate children who are plaintiffs herein, namely, Manuel Gervacio
Blas, Leoncio Gervacio Blas and Loida Gervacio Blas. Marta Cruz died in 1898,
and the following year, Simeon Blas contracted a second marriage with
Maxima Santos. At the time of this second marriage, no liquidation of the
properties acquired by Simeon Blas and Marta Cruz was made. Three of the
properties left are fishponds located in Obando, Bulacan. Maxima Santos does
not appear to have apported
properties to her marriage with Simeon Blas.
Only over a week before his death on January 9, 1937, Simeon Blas executed a
last will and testament.
The above testamentary provisions may be translated as follows:
"1. One-half of our properties, after the payment of my and our indebtedness,
all these properties having been acquired during marriage (conjugal
properties), constitutes the share of my wife Maxima Santos de Blas, according
to the law."
At the time of the execution of said will, Andres Pascual, a son-in-law of the
testator, and Avelino Pascual and others, were present. Andres Pascual had
married a descendant by the first marriage. The will was prepared by Andres
Pascual, with the help of his nephew Avelino Pascual. The testator asked
Andres Pascual to prepare a document which was presented in court as Exhibit
"A",
The reason why the testator ordered the preparation of Exhibit "A" was
because the properties that the testator had acquired during his first marriage
with Marta Cruz had not been liquidated and were not separated from those
acquired during the second marriage.
EXHIBIT A:
1937. On June 2, 1937, an inventory of the properties left by him, all considered conjugal,
was submitted by Maxima Santos herself as administratrix of his estate.
The properties which were given to Maxima Santos as her share in the conjugal properties
are also specified in the project of partition submitted by said Maxima Santos herself on
March 14, 1939. (Record on Appeal, pp. 195-241.)
Under Exhibit "A", therefore, Maxima Santos contracted the obligation and promised to give
one-half of the above indicated properties to the heirs and legatees of Simeon Blas.
Counsel for the defendant-appellee claims Exhibit "A" is a worthless piece of paper because
it is not a will nor a donation mortis causa nor a contract. As we have indicated above, it is a
compromise and at the same time a contract with a sufficient cause or consideration. It is
also contended that it deals with future inheritance.
But, it is actually an obligation or promise made by the maker to transmit one-half of her
share in the conjugal properties acquired with her husband, which properties
are stated or declared to be conjugal properties in the will of the husband. The conjugal
properties were in existence at the time of the execution of Exhibit "A" on December
26,1936.
As a matter of fact, Maxima Santos included these properties in her inventory of
herhusband's estate of June 2, 1937. The promise does not refer to any properties that the
maker would inherit upon the death of her husband. The document refers to existing
properties which she will receive by operation of law on the death of her husband, because
it is her share in the conjugal assets.
It will be noted that what is prohibited to be the subject matter of a contract under Article
1271 of the Civil Code is "future inheritance." To us future inheritance is any property or right
not in existence or capable of determination at the time of the contract, that a person may
in the future acquire by succession. The properties subject of the contract Exhibit "A" are
well-defined properties, existing at the time of the agreement, which Simeon Blas declares
in his testament as belonging to his wife as her share in the conjugal partnership.
Certainly his wife's actual share in the conjugal properties may not be considered as future
inheritance because they were actually in existence at the time Exhibit "A" was executed
The trial court held that the plaintiffs-appellants in the case at bar are concluded by the
judgment rendered in the proceedings for the settlement of the estate of Simeon Blas for
thereason that the properties left by him belonged to himself and his wife Maxima Santos;
that the project of partition in the said case, adjudicating to Maxima Santos one-half as her
share in the conjugal properties, is a bar to another action on the same subject matter,
Maxima Santos having became absolute owner of the said properties adjudicated in her
favor. As already adverted to above, these contentions would be correct if applied to the
claim of the plaintiffs-appellants that said properties were acquired with the first wife of
Simeon Blas, Marte Cruz.
But the main ground upon which plaintiffs base their present action is the document Exhibit
"A", already fully considered above. As this private document contains the
Page 12 of 17
I promise on my word of honor in the presence of my husband that I will
respect and obey all and every disposition of said will (3) and furthermore, I
promise in this document that all the properties my husband and I will leave,
the portion and share corresponding to me when I make my will, I will give one-
half
(1/2) to the heirs and legatees or the beneficiaries named in the will of my
husband, (4) and that I can select or choose any of them to whom I will give
depending upon the respect, service and treatment accorded to me.
The court below held that said Exhibit "A" has not created any right in favor of
plaintiffs which can serve as a basis of the complaint; that neither can it be
considered as a valid and enforceable contract for lack of consideration and
because it deals with future inheritance.
The court also declared that Exhibit "A" is not a will because it does not comply
with the requisites for the execution of a will; nor could it be considered as a
donation, etc.
express promise made by Maxima Santos to convey in her testament, upon her death,
onehalf of the conjugal properties she would receive as her share in the conjugal properties,
the action to enforce the said promise did not arise until and after her death when it was
foundthat she did not comply with her above-mentioned promise.
The argument that the failure of the plaintiffs-appellants herein to oppose the project of
partition in the settlement of the estate of Simeon Blas, especially that portion of the project
whichassigned to Maxima Santos one-half of all the conjugal properties, bars their present
action,is, therefore, devoid of merit.
It may be added that plaintiffs-appellants did not question the validity of the project of
partition precisely because of the promise made by Maxima Santos in the compromise
Exhibit "A"; they acquiesced in the approval of said project of partition because they were
relying on the promise made by Maxima Santos in Exhibit "A”
Neither can the claim of prescription be considered in favor of the defendants. The right
ofaction arose at the time of the death of Maxima Santos on October 5, 1956, when she
failed to comply with the promise made by her in Exhibit "A".
The plaintiffs-appellants immediately presented this action on December 27, 1956, upon
learning of such failure on the part of Maxima Santos to comply with said promise. This
defense is, therefore, also without merit.
It is next contended by the defendant-appellee that Maxima Santos complied with her
abovementioned promise,—that Andres Pascual, Tomasa Avelino, Justo Garcia, Ludovico
Pimpin and Marta Gervacio Blas were given substantial legacies in the will and testament of
Maxima Santos.
To determine whether she had actually complied with the promise made in Exhibit "A", there
is herein set forth a list only of the fishponds and their respective areas as contained in the
list of properties she acquired as her share in the conjugal partnership, which list includes,
besides, many ricelands as well as residential lots
In her will, Maxima Santos devised to Marta Gervacio Blas the 80-hectare fishpond, situated
in Lubao, Pampanga.
However, the 80 hectares devised to Marta Gervacio Blas is not even one-tenth of the total
area of the fishponds. Add to this the fact that in the will she imposed upon Marta Gervacio
Blas de Chivi an existing obligation on said fishponds, namely, its lease in 1957 and the duty
to pay out of the rentals thereof an obligation to the Rehabilitation Finance Corporation
(RFC). Angelina Blas was given only a lot of 150 square meters in Hulong Duhat, Malabon,
Rizal, and Leony Blas, the sum of P300.00 (Ibid.,
p. 264.)
It is evident from a1 consideration of the above figures and facts that Maxima Santos did not
comply with her obligation to devise one-half of her conjugal properties to the heirs and
legatees of her husband. She does not state that she had complied with such obligation in
her will.
Page 13 of 17

Petitioner inherited from his mother several tracts of land, among which were
two contiguous parcels
When the petitioner's mother was yet alive she had these two parcels
subdivided into twenty-nine lots. Twenty-eight were allocated to their then
occupants who had lease contracts with the petitioner's predecessor at various
times from 1900 to 1903, which contracts expired on December 31, 1953. The
29th lot (hereinafter referred to as Lot 29), with an area of 48,000 square
meters, more or less, was not leased to any person
After the petitioner took possession of the mentioned parcels in 1950, he
instructed his attorney-in- fact, J. Antonio Araneta, to sell them which were
bought by the occupants on a 10 yr installment basis. Sometime in 1952 the
petitioner's attorney-in-fact had Lot 29 filled, then subdivided into small lots
and paved with macadam roads. The small lots were then sold over the years
on a uniform 10-year annual amortization basis.
J. Antonio Araneta, the petitioner's attorney-infact, did not employ any broker
nor did he put up advertisements
In 1953 and 1954 the petitioner reported his income from the sale of the small
lots as long-term capital gains. On May 17, 1957 the Collector of Internal
Revenue upheld the petitioner's treatment of his gains from the said sale of
small lots
If she intended to comply therewith by giving some of the heirs of Simeon Blas the properties
mentioned above, the most that can be considered in her favor is to deduct the
value of said properties from the total amount of properties which she had undertaken to
convey upon her death.
We declare that by Exhibit "A", a compromise to avoid litigation, Maxima Santos promised
to devise to the heirs
and legatees of her husband Simeon Blas, one-half of the properties she received as her
share in the conjugal partnership of herself and her husband
Wherefore, the judgment appealed from is hereby reversed and the defendant-appellee,
administratrix of the estate of Maxima Santos, is ordered to convey and deliver one-half of
the properties adjudicated to Maxima Santos as her share in the conjugal properties in said
Civil Case No. 6707,
Considering that all said heirs and legatees, designated in the will of Simeon Blas have not
appeared in these
proceedings, the record is remanded to the court below, with instructions that, after the
conveyance of the properties, the said heirs and legatees (of Simeon Blas) file adversary
pleadings to determine the participation of each and every one of them in said properties.
TUASON V LINGAD
whether the As thus defined by law, the term "capital assets" includes all the properties of a taxpayer
properties in whether or not connected with his trade or business, except: (1) stock in trade or other
question which the property included in the taxpayer's inventory; (2) property primarily for sale to customers in
petitioner had the ordinary course of his trade or business; (3) property used in the trade or business of the
inherited and taxpayer and subject to depreciation allowance; and (4) real property used in trade or
subsequently sold in business.
small lots to other If the taxpayer sells or exchanges any of the properties above-enumerated, any gain or loss
persons should be relative thereto is an ordinary gain or an ordinary loss; the gain or loss from the
regarded as capital sale or exchange of all other properties of the taxpayer is a capital gain or a capital loss.
assets. Under section 34(b) (2) of the Tax Code, if a gain is realized by a taxpayer (other than a
corporation) from the sale or exchange of capital assets held for more than twelve months,
only 50% of the net capital gain shall be taken into account in computing the net income.
In the case at bar the petitioner's thesis is bereft of merit.
When the petitioner obtained by inheritance the parcels in question, transferred to him was
not merely the duty to respect the terms of any contract thereon, but as well the correlative
right to receive and enjoy the fruits of the business and property which the decedent had
established and maintained. Moreover, the record discloses that the petitioner owned other
real properties which he was putting out for rent, from which he periodically derived a
substantial income, and for which he had to pay the real estate dealer's tax (which he used
to deduct from his gross income).
In fact, as far back as 1957 the petitioner was receiving rental payments from the mentioned
28 small lots, even if the leases executed by his deceased mother thereon expired in 1953.
Page 14 of 17
In his 1957 tax return the petitioner as before treated his income from the sale
of the small lots (P119,072.18) as capital gains and included only 1/2 thereof
as taxable income. In this
return, the petitioner deducted the real estate dealer's tax he paid for 1957. It
was explained, however, that the payment of the dealer's tax was on account
of rentals received from the mentioned 28 lots and other properties of the
petitioner.
On the basis of the 1957 opinion of the Collector of Internal Revenue, the
revenue examiner approved the petitioner's treatment of his income from the
sale of the lots in question.
On January 9, 1963, however, the Commissioner reversed himself and
considered the petitioner's profits from the sales of the mentioned lots as
ordinary gains
On January 28, 1963 the petitioner received a letter from the Bureau of
Internal Revenue advising him to pay deficiency income tax for 1957
The petitioner's motion for reconsideration was denied, and so he went up to
the Court of Tax Appeals, which however rejected his posture in a decision
dated January 16, 1965, and ordered him, in addition, to pay a 5% surcharge
and 1% monthly interest
The petitioner assails the correctness of the opinion below that as he was
engaged in the business of leasing the lots he inherited from his mother as well
other real properties, his subsequent sales of the mentioned lots cannot be
recognized as sales of capital assets but of "real property used in trade or
business of the taxpayer."
The petitioner argues that (1) he is not the one who leased the lots in question;
(2) the lots were residential, not commercial lots; and (3) the leases on the 28
small lots were to last until 1953, before which date he was powerless to eject
the lessees therefrom.
Petitioner Gerardo Rupa filed an action for redemption with damages against
Magin Salipot before the then Court of Agrarian Relations, Tenth Regional
District, Branch IV, Sorsogon, Sorsogon, claiming that he was the agricultural
share tenant for more than 20 years of a parcel of coconut land[2] formerly
owned by Vicente Lim and Patrocinia Yu Lim; that since he assumed tenancy
over the questioned property, he was the one watching, taking care of and
cleaning the coconut plantation; he also gathers coconuts every three months
and processes them into copra which he shares with the Lim spouses under a
50-50% sharing basis; that aside from being a share tenant, he is also the
overseer of four parcels of coconut land situated in the sitios of Minuswang
and Comunal, Armenia, Uson, Masbate also owned by the Lim spouses; that
Under the circumstances, the petitioner's sales of the several lots forming part of his rental
business cannot be characterized as other than sales of non-capital assets.
The sales concluded on installment basis of the subdivided lots comprising Lot 29 do not
deserve a different characterization for tax purposes. This is because (1) the parcels of land
involved have in totality a substantially large area, nearly seven (7) hectares, big enough to
be transformed into a subdivision, and located in the heart of Metropolitan Manila; (2) they
were subdivided into small lots and then sold on installment basis (this manner of selling
residential lots is one of the basic earmarks of a real estate business); (3) comparatively
valuable improvements were introduced in the subdivided lots for the unmistakable purpose
of not simply liquidating the estate but of making the lots more saleable to the general public;
(4) the employment of J. Antonio Araneta, the petitioner's attorney-in-fact, for the purpose
of developing, managing, administering and selling the lots
in question indicates the existence of owner-realty broker relationship; (5) the sales were
made with frequency and continuity, and from these the petitioner consequently received
substantial income periodically; (6) the annual sales volume of the petitioner from the said
lots was considerable, e.g., P102,050.79 in 1953; P103,468.56 in 1954; and P119,072.18 in
1957; and (7) the petitioner, by his own tax returns, was not a person who can be
indubitably adjudged as a stranger to the real estate business.
This Court notes, however, that in ordering the petitioner to pay the deficiency income tax,
the Tax Court also required him to pay a 5% surcharge plus 1% monthly interest. This should
be eliminated because the petitioner relied in good faith upon opinions rendered by no less
than the highest officials of the Bureau of Internal Revenue, including the Commissioner
himself
RUPA SR V CA
Hence, this petition We do not agree with the contentions of private respondent SALIPOT. The CA committed
was filed to seek a reversible error in relying mainly on statements made in a decision in another case, and,
reversal of the secondarily on the certificate of the Municipal Treasurer as basis for establishing the status
decision of the CA of petitioner as share-tenant in the subject land.
In the case at bar, we find there are such compelling reasons for this Court to apply the
exception of non-conclusiveness of the factual findings of the trial and appellate courts on
the ground that the "findings of fact of both courts is premised on the supposed absence of
evidence but is in actuality contradicted by evidence on record." A careful of the record
reveals that, indeed, both the trial court and the appellate court overlooked and disregarded
the overwhelming evidence in favor of RUPA and instead relied mainly on the statements
made in the decision in another case.
Page 15 of 17
the Lim spouses, however, sold the property to herein respondent Magin
Salipot without any prior written or verbal notice to the petitioner came to
know about the sale of the property to the respondent when he was informed
in writing by the former landowner, and wanting to buy the property for
himself, petitioner sought the assistance of the local office of Agrarian Reform
at Masbate, Masbate, but no agreement was reached; that the petitioner
manifesting his willingness to redeem the questioned property in the same
amount of P5,000.00 bought by respondent, deposited the amount with the
trial court (Annex "B", Petition). Petitioner, thus, prayed for judgment
authorizing his right of redemption over the property including his shares of
the harvest, damages and expenses arising herein.
respondent Magin Salipot filed his answer denying petitioner’s allegation of
tenancy over the questioned property and claimed that petitioner was hired
every now and then to oversee the copra-making of the laborers of spouses
Lim, with remuneration based on the weight of copra produced.
In his affirmative and special defenses, respondent claimed that he bought the
registered parcel of land from the spouses Lim who in turn bought the same
from the original registered owner Diego Prieto, and since both deeds of sale,
one executed by Diego Prieto in favor of the Lim spouses and the second, by
the Lim spouses to herein respondent, have not yet been registered or legally
conveyed to respondent, the action for redemption filed by the petitioner
against respondent is pre-mature; that petitioner had never been a tenant of
spouses Lim over the land in question; that the right ofredemption had already
been lost by laches or non-use, because more than 180 days had lapsed since
petitioner had actual knowledge of the sale in favor of respondent.
Regional Trial Court of Masbate (which had taken over the Court of Agrarian
Relations pursuant to BP 129) rendered a dismissing the complaint on the
ground that RUPA was not a tenant of the subject property, thus, not entitled
to exercise the right of redemption over the same.
RUPA filed a notice of appeal.
The decision of the trial court was affirmed in toto by the CA
According to RUPA, the CA erred in declaring that he is not a share tenant
based on passing statements contained in a decision in another case and on
the certificate issued by the Office of the Municipal Treasurer that RUPA was
engaged in business as copra buyer. Consequently, this Court is asked to
determine the real status of RUPA, who claims to be a tenant of the subject
land and entitled to the benefits of tenancy laws.
SALIPOT objects, contending that the instant petition should be dismissed
considering that the issue raised is factual and that the admission made by
A tenant is defined under Section 5 (a) of Republic Act No. 1199 as a person who himself and
with the aid available from within his immediate farm household cultivates the land
belonging to or possessed by another, with the latter’s consent, for purposes of production,
sharing the produce with the landholder under the share tenancy system, or paying to the
landholder a price certain or ascertainable in produce or in money or both under the
leasehold tenancy system
Upon proof of the existence of the tenancy relationship, RUPA could avail of the benefits
afforded by RA 3844
As correctly pointed out by the CA, this right of redemption is validly exercised upon
compliance with the following requirements: a) the redemptioner must be an agricultural
lessee or share tenant; b) the land must have been sold by the owner to a third party without
prior written notice of the sale given to the lessee or lessees and the DAR in accordance with
sec. 11, RA 3844, as amended; c) only the area cultivated by the agricultural lessee may be
redeemed; d)the right of redemption must be exercised within 180 days from notice; and e)
there must be an actual tender or valid consignation of the entire amount which is the
reasonable price of the land sought to be redeemed
However, as aforesaid, the CA failed to take into account the other material evidence on
record to arrive at its finding that RUPA was not a tenant-farmer. The decision dated March
11, 1985 relied upon by the CA stemmed from Criminal Case for Malicious
Mischief which was instituted upon a complaint filed by RUPA against one Mariano Luzong
who happens to be the son-in-law of SALIPOT. It was stated in the decision that RUPA
"claimed that he is the administrator of the five parcels of land owned by Patrocinio Lim in
Armenia, Uson, Masbate"[13]; and that the "prosecution witnesses, Pablito Arnilla, and
Antonieta Bongasan, the alleged eyewitnesses to the destruction of the banana plants and
cassava plants admitted being hired laborers of Gerardo Rupa in tilling the latter’s farm."[14]
The statements in the said decision are not sufficient basis to overcome the rights of RUPA as provided
Constitution and agrarian statutes and upheld by this Court.
The statements made in the decision that "[Rupa] claimed that he was made administrator
by the Lim spouses of their five (5) parcels of land in Armenia, Uson, Masbate" and that the
"prosecution witnesses in that case, namely, Pablito Arnilla and Antonieta Rongasan
admitted that they were hired laborers of Rupa in tilling the land in question" should not
have been relied upon by the CA to conclusively disprove the tenancy relationship.
First of all, we must look at the context in which these statements were made.
Said statement was apparently made to prove RUPA’s standing to file the complaint and to
prove how he could have witnessed the destruction made by said person.
Second, in claiming that he was administrator of the property, RUPA, a farmer of limited
education must have used the word "administrator" in a loose sense to mean one taking care
of a certain piece of property by clearing and planting on the same
Third, the CA did not bother to explain its finding on the "inherent incompatibility" between
being a tenant-farmer and an administrator or overseer. According to RUPA, he was tenant
Page 16 of 17
RUPA in the course of a judicial proceeding is a substitute for and reason to
dispense with the actual proof of facts.
of one parcel of land belonging to the Lim spouses and administrator or overseer of the other
four parcels of land owned by the said spouses.
Fourth, the testimony of the prosecution witnesses that they were "hired laborers" should
not have been given significant weight by the CA. The rule is well-settled that the rights of a
person cannot be prejudiced by the declaration, act or omission of another, except as
provided by the Rules of Court in cases of admission by a co-partner, agent, conspirator and
privies. The said witnesses do not come under any of these exceptions.
As regards the certificate issued by the Office of the Treasurer to the effect that RUPA was a
copra buyer from May 19, 1978 to October 10, 1979, we find that this does not necessarily
rule out RUPA’s claim that he was tenant-farmer since 1962. RUPA has satisfactorily
explained that "pursuing two or three lines of work is nothing new. In coconut lands, harvest
seasons come far and in between, and the tenant can always engage in the business of copra-
buying in the interim."
We are therefore constrained to overturn the appealed judgment insofar as it ruled that the
records do not establish RUPA’S status as an agricultural tenant
RUPA has since passed away and the right now devolves to his heirs, as the right to redeem
is a property right which is transmissible to the heirs
Page 17 of 17