G.R. No. L-68053 May 7, 1990 LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners, vs.

THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO YANES, and ILUMINADO YANES, respondents. Francisco G. Banzon for petitioner. Renecio R. Espiritu for private respondents.

It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. 3 RF 2694 (29797) covering Lot 773-A with an area of 37,818 square meters. TCT No. RF 2694 describes Lot 773-A as a portion of Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804. The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of 4 Fortunato D. Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ). Said transfer certificate of title also contains a certification to the effect that Lot 773-B was originally registered under OCT No. 8804. On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of 5 the sum of P7,000.00. Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were 6 issued in Fuentebella's name. After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of 7 Negros Occidental, a motion requesting authority to sell Lots 773-A and 773-B. By virtue of a court 8 order granting said motion, on March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for 9 P6,000.00 to Rosendo Alvarez. Hence, on April 1, 1958 TCT Nos. T-23165 and T-23166 covering 10 Lots 773-A and 773-B were respectively issued to Rosendo Alvarez. Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of the ownership and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the land from 1944 up to the filing of the complaint be made by the defendants, that after court approval of said accounting, the share or money equivalent due the plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs P500.00 as damages in 11 the form of attorney's fees. During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B 12 and another lot for P25,000.00 to Dr. Rodolfo Siason. Accordingly, TCT Nos. 30919 and 30920 were 13 14 issued to Siason, who thereafter, declared the two lots in his name for assessment purposes. Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs, and assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce, forfeit and quitclaims ( sic) any claim, monetary or otherwise, against the defendant 15 Arsenia Vda. de Fuentebella in connection with the above-entitled case." On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case No. 5022, the dispositive portion of which reads: WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the plaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered by Transfer Certificates of Title Nos. T-23165 and

FERNAN, C.J.: This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of Negros Occidental insofar as it ordered the petitioners to pay jointly and severally the private respondents the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental and reversing the subject decision insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively and (b) the resolution of said appellate court dated May 30, 1984, denying the motion for reconsideration of its decision. The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square meters, was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued on October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A). Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was survived by her child, 1 Jovita (Jovito) Alib. It is not clear why the latter is not included as a party in this case. Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not attend to the other portions of the two lots which had a total area of around twenty-four hectares. The record does not show whether the children of Felipe also cultivated some portions of the lots but it is established that Rufino and his children left the province to settle in other places as a result of the outbreak of World War II. According to Estelita, from the "Japanese time up to peace time", they did not visit the parcels of land in question but "after liberation", when her brother went there to get their share of the sugar produced therein, he was informed that Fortunato Santiago, Fuentebella 2 (Puentevella) and Alvarez were in possession of Lot 773.

T-23166 in the name of said defendant, and thereafter to deliver the possession of said lots to the plaintiffs. No special pronouncement as to costs. SO ORDERED.
16

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 26 the Yaneses were estopped from questioning said order. On their part, the Alvarez stated in their answer that the Yaneses' cause of action had been "barred by res judicata, statute of limitation and 27 estoppel." 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 28 approval. The dispositive portion of the decision states: IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following manner: A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby dismmissed, B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children of the deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre, Negros Occidental; the sum of P2,000.00 as actual damages suffered by the plaintiff; the sum of P5,000.00 representing moral damages and the sum of P2.000 as attorney's fees, all with legal rate of interest from date of the filing of this complaint up to final payment. C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora and Raymundo, all surnamed Alvarez is hereby dismissed. D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the costs of this suit. SO ORDERED.
29

It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid decision. However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and 773-B; that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773 could not be delivered to the plaintiffs as Siason was "not a party per 17 writ of execution." The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a new certificate of title and for a declaration of nullity of TCT Nos. T-23165 18 and T-23166 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 19 encumbrances against said properties"; that the decision in the cadastral proceeding could not be enforced against him as he was not a party thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only because he was not a party-litigant therein but also because it 20 had long become final and executory. Finding said manifestation to be well-founded, the cadastral court, in its order of September 4, 1965, nullified its previous order requiring Siason to surrender the 21 certificates of title mentioned therein. In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case 22 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 at the judgment therein could not be enforced against Siason as he was not a party in the 23 case. The action filed by the Yaneses on February 21, 1968 was for recovery of real property with 24 damages. Named defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of Deeds of Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to Siason (sic) for being null and void; the issuance of a new certificate of title in the name of the Yaneses "in accordance with the sheriffs return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery thereof could not be effected, or, if the issuance of a new title could not be made, that the Alvarez and Siason jointly and severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason render an accounting of the fruits of Lot 773 from November 13, 1961 until the filing of the complaint; and that the defendants jointly and severally pay the Yaneses moral damages of 25 P20,000.00 and exemplary damages of P10,000.00 plus attorney's fees of P4, 000.00.

The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31, 30 1983 affirmed the lower court's decision "insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffs-appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and 31 attorney's fees, respectively." The dispositive portion of said decision reads: WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the

cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively. No costs. SO ORDERED.
32

has been adjudicated in a valid final judgment of a competent court, he should not be granted an unbridled license to return for another try. The prevailing party should not be harassed by subsequent suits. For, if endless litigation were to be allowed, unscrupulous litigations will multiply in number to the 36 detriment of the administration of justice. There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in Civil Case No. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have been illegally deprived of ownership and possession of the lots in 37 question. In fact, Civil Case No. 8474 now under review, arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private respondents Yaneses, the same having been sold during the pendency of the case by the petitioners' father to Dr. Siason who did not know about the controversy, there being no lis pendens annotated on the titles. Hence, it was also settled beyond question that Dr. Siason is a purchaser in good faith. Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil Case No. 5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the actual value of the subdivided lots in dispute. It did not order defendant 38 Siason to pay said amount. As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into 39 the hands of an innocent purchaser for value, for damages. "It is one thing to protect an innocent third party; it is entirely a different matter and one devoid of justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious decided As clearly revealed by the undeviating line of decisions coming from this Court, such an undesirable eventuality is precisely 40 sought to be guarded against." The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor of private respondents, it cannot now be reopened in the instant case on the pretext that the defenses of prescription and estoppel have not been properly considered by the lower court. Petitioners could have appealed in the former case but they did not. They have therefore foreclosed their rights, if any, and they cannot now be heard to complain in another case in order to defeat the enforcement of a judgment which has longing become final and executory. Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his death. Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus, the pertinent provisions of the Civil Code state: Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are

Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same. Hence, the instant petition. ln their memorandum petitioners raised the following issues: 1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked and raised by the petitioners in the lower court. 2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any, as alleged in their complaint dated February 21, 1968 which has been docketed in the trial court as Civil Case No. 8474 supra, are forever barred by statute of limitation and/or prescription of action and estoppel. 3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of the petitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil Case No. 8474, supra where the private respondents had unqualifiedly and absolutely waived, renounced and quitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and 773-B of Murcia Cadastre as appearing in their written manifestation dated November 6, 1962 (Exhibits "4" Siason) which had not been controverted or even impliedly or indirectly denied by them. 4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and 773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed or transmitted by operations ( sic) of law to the 33 petitioners without violation of law and due process . The petition is devoid of merit. As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents. Said decision had long become final and executory and with the possible exception of Dr. Siason, who was not a party to said case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended when Alvarez or his heirs failed to appeal the 34 decision against them. Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and 35 those in privity with them in law or estate. As consistently ruled by this Court, every litigation must come to an end. Access to the court is guaranteed. But there must be a limit to it. Once a litigant's right

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. Art. 1311. Contract stake 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 received from the decedent. As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. 41 Luzon Surety Co., Inc. The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from the state is ultimately a payment by the heirs or distributees, since the amount of the paid claim in fact diminishes or reduces the shares that the heirs would have been entitled to receive. Under our law, therefore. the general rule is that a party's contractual rights and obligations are transmissible to the successors. The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties that, as observed by Victorio Polacco has characterized the history of these institutions. From the Roman concept of a relation from person to person, the obligation has evolved into a relation from patrimony to patrimony with the persons occupying only a representative position, barring those rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its performance by a specific person and by no other. xxx xxx xxx Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father's transaction, which gave rise to the present claim for damages. That petitioners did not inherit the property involved herein is of no moment because by legal fiction, the monetary equivalent thereof devolved into the mass of their father's hereditary estate, and we have ruled that the hereditary 42 assets are always liable in their 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. With this clarification and considering petitioners' admission that there are other properties left by the deceased which are sufficient to cover the amount adjudged in favor of private respondents, we see no cogent reason to disturb the findings and conclusions of the Court of Appeals.

WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners. SO ORDERED. [G.R. No. 113725. June 29, 2000] JOHNNY S. RABADILLA, petitioner, vs. COURT OF APPEALS [2] MARLENA COSCOLUELLA Y BELLEZA VILLACARLOS, respondents. DECISION PURISIMA, J.: This is a petition for review of the decision of the Court of Appeals, dated December 23, 1993, in CA-G.R. No. CV-35555, which set aside the decision of Branch 52 of the Regional Trial Court in Bacolod City, and ordered the defendants-appellees (including herein petitioner), as heirs of Dr. Jorge Rabadilla, to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate of Aleja Belleza. The antecedent facts are as follows: 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 511, 855 square meters of that parcel of land surveyed as Lot No. 1392 of the Bacolod Cadastre. The said Codicil, which was duly probated and admitted in Special Proceedings No. 4046 before the then Court of First Instance of Negros Occidental, contained the following provisions: "FIRST I give, leave and bequeath the following property owned by me to Dr. Jorge Rabadilla resident of 141 P. Villanueva, Pasay City: (a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), which is registered in my name according to the records of the Register of Deeds of Negros Occidental. (b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights which I shall set forth hereinbelow, shall be inherited and acknowledged by the children and spouse of Jorge Rabadilla. xxx
[3] [1]

AND

MARIA

FOURTH (a)....It is also my command, in this my addition (Codicil), that should I die and Jorge Rabadilla shall have already received the ownership of the said Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), and also at the time that the lease of Balbinito G. Guanzon of the said lot shall expire, Jorge Rabadilla shall have the obligation until he dies, every year to give to Maria Marlina Coscolluela y Belleza, Seventy (75) (sic) piculs of Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said Maria Marlina Coscolluela y Belleza dies. FIFTH (a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10492), shall have the obligation to still give yearly, the sugar as specified in the Fourth paragraph of his testament, to Maria Marlina Coscolluela y Belleza on the month of December of each year. SIXTH I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to whom I have left and bequeathed, and his heir shall later sell, lease, mortgage this said Lot, the buyer, lessee, mortgagee, shall have also the obligation to respect and deliver yearly ONE HUNDRED (100) piculs of sugar to Maria Marlina Coscolluela y Belleza, on each month of December, SEVENTY FIVE (75) piculs of Export and TWENTY FIVE (25) piculs of Domestic, until Maria Marlina shall die, lastly should the buyer, lessee or the mortgagee of this lot, not have respected my command in this my addition (Codicil), Maria Marlina Coscolluela y Belleza, shall immediately seize this Lot No. 1392 from my heir and the latter's heirs, and shall turn it over to my near desendants, (sic) and the latter shall then have the obligation to give the ONE HUNDRED (100) piculs of sugar until Maria Marlina shall die. I further command in this my addition (Codicil) that my heir and his heirs of this Lot No. 1392, that they will obey and follow that should they decide to sell, lease, mortgage, they [4] cannot negotiate with others than my near descendants and my sister." Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and Transfer Certificate of Title No. 44498 thereto issued in his name. Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner), Aurora, Ofelia and Zenaida, all surnamed Rabadilla. On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as Civil Case No. 5588, before Branch 52 of the Regional Trial Court in Bacolod City, against the above-mentioned 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. The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return-Lot No. 1392 to the surviving heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 in the name of the deceased, Dr. Jorge Rabadilla, and the issuance of a new certificate of title in the names of the surviving heirs of the late Aleja Belleza. On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order of Default was lifted, with respect to defendant Johnny S. Rabadilla, who filed his Answer, accordingly. During the pre-trial, the parties admitted that: On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law 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, to the following effect: "That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will be delivered not later than January of 1989, more specifically, to wit: 75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our names, Mary Rose Rabadilla y Azurin or Alan Azurin, during December of each sugar crop year, in Azucar Sugar Central; and, this is considered compliance of the annuity as mentioned, and in the same manner will compliance of the annuity be in the next succeeding crop years. That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied in cash equivalent of the number of piculs as mentioned therein and which is as herein agreed upon, taking into consideration the composite price of sugar

during each sugar crop year, which is in the total amount of ONE HUNDRED FIVE THOUSAND PESOS (P105,000.00). That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable on or before the end of December of every sugar crop year, to wit: For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1988-89; For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1989-90; For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1990-91; and For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, [5] payable on or before December of crop year 1991-92." 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 and disposing as follows: "WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is prematurely filed as no cause of action against the defendants has as yet arose in favor of plaintiff. While there maybe the non-performance of the command as mandated exaction from them simply because they are the children of Jorge Rabadilla, the title holder/owner of the lot in question, does not warrant the filing of the present complaint. The remedy at bar must fall. Incidentally, being in the category as creditor of the left estate, it is opined that plaintiff may initiate the intestate proceedings, if only to establish the heirs of Jorge Rabadilla and in order to give full meaning and semblance to her claim under the Codicil. In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED without prejudice. SO ORDERED."
[6]

Rabadilla, to deliver such amount of sugar to plaintiff-appellant; defendantsappellee's admitted non-compliance with said obligation since 1985; and, the punitive consequences enjoined by both the codicil and the Civil Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in case of such non-compliance, this Court deems it proper to order the reconveyance of title over Lot No. 1392 from the estates of Jorge Rabadilla to the estate of Aleja Belleza. However, plaintiffappellant must institute separate proceedings to re-open 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. SO ORDERED."
[7]

Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this Court via the present petition, contending that the Court of Appeals erred in ordering the reversion of Lot 1392 to the estate of the testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in ruling that the testamentary institution of Dr. Jorge Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code. The petition is not impressed with merit. Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article 882 of the New Civil Code on modal institutions and in deviating from the sole issue raised which is the absence or prematurity of the cause of action. Petitioner maintains that Article 882 does not find application as there was no modal institution and the testatrix intended a mere simple substitution - i.e. the instituted heir, Dr. Jorge Rabadilla, was to be substituted by the testatrix's "near descendants" should the obligation to deliver the fruits to herein private respondent be not complied with. And since the testatrix died single and without issue, there can be no valid substitution and such testamentary provision cannot be given any effect. The petitioner theorizes further that there can be no valid substitution for the reason that the substituted heirs are not definite, as the substituted heirs are merely referred to as "near descendants" without a definite identity or reference as to who are the "near descendants" [8] [9] and therefore, under Articles 843 and 845 of the New Civil Code, the substitution should be deemed as not written. The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals deviated from the issue posed before it, which was the propriety of the dismissal of the complaint on the ground of prematurity of cause of action, there was no such deviation. The Court of Appeals found that the private respondent had a cause of action against the petitioner. The disquisition made on modal institution was, precisely, to stress that the private

On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial court; ratiocinating and ordering thus: "Therefore, the evidence on record having established plaintiff-appellant's right to receive 100 piculs of sugar annually out of the produce of Lot No. 1392; defendantsappellee's obligation under Aleja Belleza's codicil, as heirs of the modal heir, Jorge

respondent had a legally demandable right against the petitioner pursuant to subject Codicil; on which issue the Court of Appeals ruled in accordance with law. It is a general rule under the law on succession that successional rights are transmitted from [10] the moment of death of the decedent and compulsory heirs are called to succeed by operation of law. The legitimate children and descendants, in relation to their legitimate [11] parents, and the widow or widower, are compulsory heirs. 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, and the successional rights were transmitted to them from the moment of death of the decedent, Dr. Jorge Rabadilla. Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a person, not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by virtue of subject Codicil were transmitted to his forced heirs, at the time of his death. And since obligations not extinguished by death also form part of the estate of the decedent; corollarily, the obligations imposed by the Codicil on the deceased Dr. Jorge Rabadilla, were likewise transmitted to his compulsory heirs upon his death. In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the condition that the usufruct thereof would be delivered to the herein private respondent every year. Upon the death of Dr. Jorge Rabadilla, his compulsory heirs succeeded to his rights and title over the said property, and they also assumed his (decedent's) obligation to deliver the fruits of the lot involved to herein private respondent. Such obligation of the instituted heir reciprocally corresponds to the right of private respondent over the usufruct, the fulfillment or performance of which is now being demanded by the latter through the institution of the case at bar. 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. Substitution is the designation by the testator of a person or persons to take the place of the heir or heirs first instituted. Under substitutions in general, the testator may either (1) provide for the designation of another heir to whom the property shall pass in case the original heir should die before him/her, renounce the inheritance or be incapacitated to inherit, as in a [12] simple substitution, or (2) leave his/her property to one person with the express charge that it be transmitted subsequently to another or others, as in a fideicommissary [13] substitution. The Codicil sued upon contemplates neither of the two. In simple substitutions, the second heir takes the inheritance in default of the first heir by [14] 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. Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a fideicommissary substitution, the first heir is strictly mandated to preserve the property and to [15] transmit the same later to the second heir. In the case under consideration, the instituted heir is in fact allowed under the Codicil to alienate the property provided the negotiation is with the near descendants or the sister of the testatrix. Thus, a very important element of a fideicommissary substitution is lacking; the obligation clearly imposing upon the first heir the preservation of the property and its transmission to the second heir. "Without this obligation to preserve clearly imposed by the testator in his will, there is no fideicommissary [16] substitution." Also, the near descendants' right to inherit from the testatrix is not definite. The property will only pass to them should Dr. Jorge Rabadilla or his heirs not fulfill the obligation to deliver part of the usufruct to private respondent. Another important element of a fideicommissary substitution is also missing here. Under Article 863, the second heir or the fideicommissary to whom the property is transmitted must not be beyond one degree from the first heir or the fiduciary. A fideicommissary substitution is [17] therefore, void if the first heir is not related by first degree to the second heir. In the case under scrutiny, the near descendants are not at all related to the instituted heir, Dr. Jorge Rabadilla. The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil is in the nature of a modal institution and therefore, Article 882 of the New Civil Code is the provision of law in point. Articles 882 and 883 of the New Civil Code provide: Art. 882. The statement of the object of the institution or the application of the property left by the testator, or the charge imposed on him, shall not be considered as a condition unless it appears that such was his intention. That which has been left in this manner may be claimed at once provided that the instituted heir or his heirs give security for compliance with the wishes of the testator and for the return of anything he or they may receive, together with its fruits and interests, if he or they should disregard this obligation. Art. 883. When without the fault of the heir, an institution referred to in the preceding article cannot take effect in the exact manner stated by the testator, it shall be complied with in a manner most analogous to and in conformity with his wishes. The institution of an heir in the manner prescribed in Article 882 is what is known in the law of succession as an institucion sub modo or a modal institution. In a modal institution, the testator states (1) the object of the institution, (2) the purpose or application of the property left [18] by the testator, or (3) the charge imposed by the testator upon the heir. A "mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy of his rights to the [19] succession. On the other hand, in a conditional testamentary disposition, the condition must happen or be fulfilled in order for the heir to be entitled to succeed the testator. The condition

suspends but does not obligate; and the mode obligates but does not suspend. [21] extent, it is similar to a resolutory condition.

[20]

To some

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 [25] disposes of his property, to take effect after his death. 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. WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated December 23, 1993, in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to costs SO ORDERED.

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 the testatrix imposed an obligation on the said instituted heir and his successors-ininterest to deliver one hundred piculs of sugar to the herein private respondent, Marlena Coscolluela 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 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 [22] considered as modal and not conditional. Neither is there tenability in the other contention of petitioner that the private respondent has only a right of usufruct but not the right to seize the property itself from the instituted heir because the right to seize was expressly limited to violations by the buyer, lessee or mortgagee. 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 [23] of the Will, taking into consideration the circumstances under which it was made. Such [24] construction as will sustain and uphold the Will in all its parts must be adopted. Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs of sugar yearly to Marlena Belleza Coscuella. Such obligation is imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs, and their buyer, lessee, or mortgagee should they sell, lease, mortgage or otherwise negotiate the property involved. The Codicil further provides that in the event that the obligation to deliver the sugar is not respected, Marlena Belleza Coscuella shall seize the property and turn it over to the testatrix's near descendants. The non-performance of the said obligation is thus with the sanction of seizure of the property and reversion thereof to the testatrix's near descendants. Since the said obligation is clearly imposed by the testatrix, not only on the instituted heir but also on his successors-in-interest, the sanction imposed by the testatrix in case of non-fulfillment of said obligation should equally apply to the instituted heir and his successors-in-interest. 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

G.R. No. 162784

June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner, vs. SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents. DECISION PUNO, C.J.: 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) awarded to Margarita Herrera several portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced 1 by an Agreement to Sell No. 3787. By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by 2 virtue of Presidential Decree No. 757. NHA as the successor agency of LTA is the petitioner in this case. The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left heirs. Margarita Herrera passed away on October 27, 1971.
3

On August 22, 1974, 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 Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The pertinent portions of which are as follows: SINUMPAANG SALAYSAY SA SINO MAN KINAUUKULAN; Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod: 1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land Tenure Administration; 2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No. 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G. Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959; 3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran ng kaniyang sariling cuarta sa Land Tenure Administration; 4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA, Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana at; 5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si Francisca Herrera ang loteng nasasabi sa unahan. SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng 4 Octubre, 1960.

The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand side of both pages of the document with the said document having 2 pages in total. Margarita Herrera 5 placed her thumbmark above her name in the second page and at the left-hand margin of the first page of the document. The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of SelfAdjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now, 6 Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263. On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self7 Adjudication) was rendered and 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. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the application. In a Resolution dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding that: From the evidence of the parties and the records of the lots in question, we gathered the following facts: the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz Herrera Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the Tunasan Homesite since birth; protestee was born on the lots in question; protestee left the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee) son Roberto Herrera has been occupying the lots in question; he has been there even before the death of the late Margarita Herrera; 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.
10 9 8

Private respondent Almeida appealed to the Office of the President. The NHA Resolution was 11 affirmed by the Office of the President in a Decision dated January 23, 1987. On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her 12 estate which they submitted to the NHA. Said transfer of rights was approved by the NHA. The NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in their

favor. Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave the premises that she was occupying. Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed a Complaint on February 8, 1988, for " Nullification of Government Lot's Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31. 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 14 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 15 paid for the property with the use of her own money. Further, they argued that plaintiff's occupation of 16 the property was by mere tolerance and that they had been paying taxes thereon. The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of 17 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 18 property within its jurisdiction." The case was then remanded for further proceedings on the merits. A pre-trial was set after which trial ensued. On March 9, 1998, the Regional Trial Court rendered a Decision setting 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 Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded to private respondent. 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 July 21, 1998 for lack of merit. They both appealed to the Court of Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late. On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz: There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and interest over the subject lots in favor of Francisca Herrera. This

13

Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and grammatical sense that the document is a simple disposition of her estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to the defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was questioned in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject lots and presented the "Sinumpaang Salaysay" stating that 19 it is a deed of assignment of rights. 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. Petitioner NHA elevated the case to this Court. Petitioner NHA raised the following issues: A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS; B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT LOTS; AND C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY. We rule for the respondents. Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and

10

rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final 20 adjudication may be pleaded as res judicata." To be sure, early jurisprudence were already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably circumscribing the scope thereof and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred. In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals , the Court held that the rule prescribing that "administrative orders cannot be enforced in the courts in the absence of an express statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies. In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial powerthat which is held by the courts. Quasi-judicial power is defined as that power of adjudication of 22 an administrative agency for the "formulation of a final order." This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for 23 their official action and to exercise discretion of a judicial nature. However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branchesthe legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part 24 of any branch or instrumentality of the Government." Courts have an expanded role under the 1987 Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of government committed an act that falls under 25 the category of grave abuse of discretion amounting to lack or excess of jurisdiction. Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 1980 where it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions, except 27 those falling within the jurisdiction of the Supreme Court in accordance with the Co nstitution" and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA. Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on 28 August 20, 1989 as per entry of judgment dated October 10, 1989). We find no reason to disturb this ruling. Courts are duty-bound to put an end to controversies. The system of judicial review should not 29 be misused and abused to evade the operation of a final and executory judgment. The appellate court's decision becomes the law of the case which must be adhered to by the parties by reason of 30 policy. Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her application on the subject lot; that it considered the respective application and
26 21

inquired whether she had all the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award was not done arbitrarily. The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not 31 bind the NHA. That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying 32 to purchase the same before it." 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; in her words "sakaling ako'y bawian na ng Dios ng aking buhay " 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 which provides that: 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 33 through his death to another or others either by his will or by operation of law. By considering the document, petitioner NHA should have noted that the original applicant has already 34 passed away. Margarita Herrera passed away on October 27, 1971. The NHA issued its 35 resolution 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 36 had an existing Contract to Sell with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both 37 partiesMargarita Herrera and NHA. Obligations are transmissible. 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 38 obligations. When the original buyer died, the NHA should have considered the estate of the decedent as the next 39 "person" 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 Self40 Adjudication) which rendered the deed therein null and void 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

11

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 41 the death of the instrument maker. IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED. No cost. SO ORDERED. [G.R. No. L-8437. November 28, 1956.] ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-Appellant.

therewith for counsel or attorneys 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. xxx xxx xxx

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. xxx xxx xxx

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

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 Hemadys 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 Hemadys 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 Hemadys death, are not chargeable to his estate because upon his death he ceased to be a guarantor.

12

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). xxx xxx xxx

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 ms all 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 companys 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 obliga tions 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 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 partys contractual rights and obligations are transmissible to the successors. The rule is a consequence of the progressive depersonalization of

13

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 follows:chanroblesvirtuallawlibrary by the next Article 2057, that runs as

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 guarantors liability is not extinguished by his death, a nd 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 estates liability for premiums and stamp taxes, because irrespective of the solution to t his question, the Luzon Suretys 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 AdministratrixAppellee. SO ORDERED. Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia and Felix, JJ., concur. G.R. No. L-24098 November 18, 1967 BELAMALA, petitioner-appellee,

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 courts stand that the requirement of integrity in the guarantor or surety makes the latters undertaking stric tly 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

BUENAVENTURA vs. MARCELINO POLINAR, administrator, oppositor-appellant. Juvenal D. Osorio Anastacio A. Mumar for administrator, oppositor-appellant. REYES, J.B.L., J.: for

petitioner-appellee.

Appeal from judgment of the Court of First Instance of Bohol (Sp. Proc. No. 369) allowing a money claim of appellee Belamala against the estate of the deceased Mauricio Polinar, for damages caused to the claimant. Originally taken to the Court of Appeals, the case was certified to this Court as involving only questions of law. Issue in the case is whether the civil liability of an accused of physical injuries who dies before final judgment, is extinguished by his demise, to the extent of barring any claim therefor against his estate. There is no dispute as to the facts, which were stipulated, in the court of origin, to be as follows (Rec. of Appeal, pp. 41-43): STIPULATED AGREEMENT OF FACTS xxx xxx xxx

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1. That the claimant Buenaventura Belamala is the same offended party in Criminal Case No. 1922 filed before the COURT OF FIRST INSTANCE OF BOHOL, against the same Mauricio Polinar above mentioned and against other accused, for Frustrated Murder; 2. That the administrator Marcelino Polinar is one of the legitimate children of the above mentioned Mauricio Polinar now deceased; 3. That on May 24, 1954, the complaint for Frustrated Murder was filed in the Justice of the Peace of Clarin, Bohol against said Mauricio Polinar, et al, and when said case was remanded to the Court of First Instance of Bohol, the Information on said Criminal Case No. 1922 was filed on March 12, 1955; 4. That on May 28, 1966, the COURT OF FIRST INSTANCE OF BOHOL rendered a decision thereof, convicting the said Mauricio Polinar of the crime of serious physical injuries and sentenced him to pay to the offended party Buenaventura Belamala, now claimant herein, the amount of P990.00, plus the amount of P35.80 as indemnity the amount of P1,000.00 as moral damages; 5. That on June 18, 1956, the accused (the late Mauricio Polinar) appealed to the Court of Appeals from the decision of the Court of First Instance of Bohol; 6. That on July 27, 1956, while the appeal of said Mauricio Polinar was pending before the Court of Appeals, he died; and that there was no Notice or Notification of his death has ever been filed in the said Court of Appeals; 7. That the decision of the Court of Appeals in said Criminal Case No. 1922, has affirmed the decision of the Court of First Instance of Bohol, in toto, and said decision of the Court of Appeals was promulgated on March 27, 1958; but said Mauricio Polinar has already died on July 27, 1956; 8. That the late Mauricio Polinar is survived by his wife, Balbina Bongato and his children, namely: 1. Narcisa 2. Geronimo 3. Mariano 4. Ireneo 5. Marcelino 6. Mauro 7. Demetrio Polinar, Clarin, Bohol Polinar, Polinar, Polinar, Polinar, Polinar, Polinar, Clarin, Clarin, Clarin, Clarin, Davao Pagadian Bohol Bohol Bohol Bohol

The Court a quo, overruling the contention of the Administrator-appellant that the death of the accused prior to final judgment extinguished all criminal and civil liabilities resulting from the offense, in view of Article 89, paragraph 1 of the Revised Penal Code, admitted the claim against the estate in the amount of P2,025.80 with legal interest from the date claim was filed (30 July 1959) until paid. No payment was ordered pending final determination of the sum total of claims admitted against the estate. Not satisfied with the ruling, the Administrator has appealed, insisting on his theory in the Court below. We see no merit in the plea that the civil liability has been extinguished, in view of the provisions of the Civil Code of the Philippines of 1950 (Rep. Act No. 386) that became operative eighteen years after the Revised Penal Code. As pointed out by the Court below, Article 33 of the Civil Code establishes a civil action for damages on account of physical injuries, entirely separate and distinct from the criminal action. Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. Assuming that for lack of express reservation, Belamala's civil action for damages was to be considered instituted together with the criminal action, still, since both proceedings were terminated without final adjudication, the civil action of the offended party under Article 33 may yet be enforced separately. Such claim in no way contradicts Article 108, of the Penal Code, that imposes the obligation to indemnify upon the deceased offender's heirs, because the latter acquired their decedents obligations only to the extent of the value of the inheritance (Civil Code, Art. 774). Hence, the obligation of the offender's heirs under Article 108 ultimately becomes an obligation of the offender's estate. The appellant, however, is correct in the contention that the claim should have been prosecuted by separate action against the administrator, as permitted by sections 1 and 2 of Revised Rule 87, since the claim is patently one "to recover damages for an injury to person or property" (Rule 87, sec. 1). Belamala's action can not be enforced by filing a claim against the estate under Rule 86, because section 5 of that rule explicitly limits the claims to those for funeral expenses, expenses for last sickness, judgments for money and "claims against the decedent, arising from contract, express or implied;" and this last category (the other three being inapposite) includes only "all purely personal obligations other than those which have their source in delict or tort" (Leung Ben vs. O'Brien, 38 Phil. 182, 189-194) and Belamala's damages manifestly have a tortious origin. To this effect was our ruling inAguas vs. Llemos, L-18107, Aug. 30, 1962. Furthermore, it does not appear that the award of the trial Court was based on evidence submitted to it; apparently it relied merely on the findings in the criminal case, as embodied in decisions that never became final because the accused died during the pendency of said case. WHEREFORE, the decision under appeal is hereby reversed and set aside, but without prejudice to the action of appellee Belamala against the Administrator of the Estate of Mauricio Polinar. No costs. So ordered.

9. That the parties have reserved to present in Court evidence on facts not agreed to herein by the parties. It is to be observed that the reservation of additional evidence was waived by the parties at the trial (see Decision of trial court, Rec. App. p. 54).

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Concepcion, C.J., Dizon, Makalintal, Bengzon, JP., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,concur. G.R. No. 82027 March 29, 1990 ROMARICO G. VITUG, petitioner, vs. THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINO-CORONA, respondents. Rufino B. Javier Law Office for petitioner. Quisumbing, Torres & Evangelista for private respondent.
6

payable to and collectible or withdrawable by either or any of us during our lifetime, and after the death of either or any of us shall belong to and be the sole property of the survivor or survivors, and shall be payable to and collectible or withdrawable by such survivor or survivors. We further agree with each other and the BANK that the receipt or check of either, any or all of us during our lifetime, or the receipt or check of the survivor or survivors, for any payment or withdrawal made for our above-mentioned account shall be valid 5 and sufficient release and discharge of the BANK for such payment or withdrawal. The trial courts upheld the validity of this agreement and granted "the motion to sell some of the estate of Dolores L. Vitug, the proceeds of which shall be used to pay the personal funds of Romarico 7 Vitug in the total sum of P667,731.66 ... ." On the other hand, the Court of Appeals, in the petition for certiorari filed by the herein private respondent, held that the above-quoted survivorship agreement constitutes a conveyance mortis causa which "did not comply with the formalities of a valid will as prescribed by Article 805 of the Civil 8 Code," and secondly, assuming that it is a mere donation inter vivos, it is a prohibited donation under 9 the provisions of Article 133 of the Civil Code. The dispositive portion of the decision of the Court of Appeals states: WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex II, petition) is hereby set aside insofar as it granted private respondent's motion to sell certain properties of the estate of Dolores L. Vitug for reimbursement of his alleged advances to the estate, but the same order is sustained in all other respects. In addition, respondent Judge is directed to include provisionally the deposits in Savings Account No. 35342-038 with the Bank of America, Makati, in the inventory of actual properties possessed by the spouses at the time of the decedent's death. With 10 costs against private respondent. In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the strength of our 11 12 decisions inRivera v. People's Bank and Trust Co. and Macam v. Gatmaitan in which we sustained 13 the validity of "survivorship agreements" and considering them as aleatory contracts. The petition is meritorious. The conveyance in question is not, first of all, one of mortis causa, which should be embodied in a will. A will has been defined as "a personal, solemn, revocable and free act by which a capacitated person disposes of his property and rights and declares or complies with duties to take effect after his 14 15 death." In other words, the bequest or device must pertain to the testator. In this case, the monies subject of savings account No. 35342-038 were in the nature of conjugal funds In the case relied 16 on, Rivera v. People's Bank and Trust Co., we rejected claims that a survivorship agreement purports to deliver one party's separate properties in favor of the other, but simply, their joint holdings: xxx xxx xxx

SARMIENTO, J.: This case is a chapter in an earlier suit decided by this Court involving the probate of the two wills of the late Dolores Luchangco Vitug, who died in New York, U. S.A., on November 10, 1980, naming private respondent Rowena Faustino-Corona executrix. In our said decision, we upheld the appointment of Nenita Alonte as co-special administrator of Mrs. Vitug's estate with her (Mrs. Vitug's) widower, petitioner Romarico G. Vitug, pending probate. On January 13, 1985, Romarico G. Vitug filed a motion asking for authority from the probate court to sell certain shares of stock and real properties belonging to the estate to cover allegedly his advances to the estate in the sum of P667,731.66, plus interests, which he claimed were personal funds. As 2 found by the Court of Appeals, the alleged advances consisted of P58,147.40 spent for the payment of 3 estate tax, P518,834.27 as deficiency estate tax, and P90,749.99 as "increment thereto." According to Mr. Vitug, he withdrew the sums of P518,834.27 and P90,749.99 from savings account No. 35342-038 of the Bank of America, Makati, Metro Manila. On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that the same funds withdrawn from savings account No. 35342-038 were conjugal partnership properties and part of the estate, and hence, there was allegedly no ground for reimbursement. She also sought his ouster for failure to include the sums in question for inventory and for "concealment of funds belonging to the 4 estate." Vitug insists that the said funds are his exclusive property having acquired the same through a survivorship agreement executed with his late wife and the bank on June 19, 1970. The agreement provides: We hereby agree with each other and with the BANK OF AMERICAN NATIONAL TRUST AND SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money now or hereafter deposited by us or any or either of us with the BANK in our joint savings current account shall be the property of all or both of us and shall be
1

16

... Such conclusion is evidently predicated on the assumption that Stephenson was the exclusive owner of the funds-deposited in the bank, which assumption was in turn based on the facts (1) that the account was originally opened in the name of Stephenson alone and (2) that Ana Rivera "served only as housemaid of the deceased." But it not infrequently happens that a person deposits money in the bank in the name of another; and in the instant case it also appears that Ana Rivera served her master for about nineteen years without actually receiving her salary from him. The fact that subsequently Stephenson transferred the account to the name of himself and/or Ana Rivera and executed with the latter the survivorship agreement in question although there was no relation of kinship between them but only that of master and servant, nullifies the assumption that Stephenson was the exclusive owner of the bank account. In the absence, then, of clear proof to the contrary, we must give full faith and credit to the certificate of deposit which recites in effect that the funds in question belonged to Edgar Stephenson and Ana Rivera; that they were joint (and several) owners thereof; and that either of them could withdraw any part or the whole of said account during the lifetime of both, and the balance, if any, upon 17 the death of either, belonged to the survivor. xxx xxx xxx In Macam v. Gatmaitan,
18

Neither is the survivorship agreement a donation inter vivos, for obvious reasons, because it was to take effect after the death of one party. Secondly, it is not a donation between the spouses because it involved no conveyance of a spouse's own properties to the other. It is also our opinion that the agreement involves no modification petition of the conjugal partnership, as 21 22 23 held by the Court of Appeals, by "mere stipulation" and that it is no "cloak" to circumvent the law on conjugal property relations. Certainly, the spouses are not prohibited by law to invest conjugal property, say, by way of a joint and several bank account, more commonly denominated in banking parlance as an "and/or" account. In the case at bar, when the spouses Vitug opened savings account No. 35342-038, they merely put what rightfully belonged to them in a money-making venture. They did not dispose of it in favor of the other, which would have arguably been sanctionable as a prohibited donation. And since the funds were conjugal, it can not be said that one spouse could have pressured the other in placing his or her deposits in the money pool. The validity of the contract seems debatable by reason of its "survivor-take-all" feature, but in reality, that contract imposed a mere obligation with a term, the term being death. Such agreements are 24 permitted by the Civil Code. Under Article 2010 of the Code: ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind themselves to give or to do something in consideration of what the other shall give or do upon the happening of an event which is uncertain, or which is to occur at an indeterminate time. Under the aforequoted provision, the fulfillment of an aleatory contract depends on either the happening of an event which is (1) "uncertain," (2) "which is to occur at an indeterminate time." A survivorship agreement, the sale of a sweepstake ticket, a transaction stipulating on the value of currency, and insurance have been held to fall under the first category, while a contract for life annuity 25 or pension under Article 2021, et sequentia, has been categorized under the second. In either case, the element of risk is present. In the case at bar, the risk was the death of one party and survivorship of the other. However, as we have warned: xxx xxx xxx But although the survivorship agreement is per se not contrary to law its operation or effect may be violative of the law. For instance, if it be shown in a given case that such agreement is a mere cloak to hide an inofficious donation, to transfer property in fraud of creditors, or to defeat the legitime of a forced heir, it may be assailed and annulled upon such grounds. No such vice has been imputed and established 26 against the agreement involved in this case. xxx xxx xxx

it was held:

xxx xxx xxx This Court is of the opinion that Exhibit C is an aleatory contract whereby, according to article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to give or do something as an equivalent for that which the other party is to give or do in case of the occurrence of an event which is uncertain or will happen at an indeterminate time. As already stated, Leonarda was the owner of the house and Juana of the Buick automobile and most of the furniture. By virtue of Exhibit C, Juana would become the owner of the house in case Leonarda died first, and Leonarda would become the owner of the automobile and the furniture if Juana were to die first. In this manner Leonarda and Juana reciprocally assigned their respective property to one another conditioned upon who might die first, the time of death determining the event upon which the acquisition of such right by the one or the other depended. This contract, as any other contract, is binding upon the parties thereto. Inasmuch as Leonarda had died before Juana, the latter thereupon acquired the ownership of the house, in the same manner as Leonarda would have acquired the 19 ownership of the automobile and of the furniture if Juana had died first. xxx xxx xxx There is no showing that the funds exclusively belonged to one party, and hence it must be presumed 20 to be conjugal, having been acquired during the existence of the marita. relations.

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There is no demonstration here that the survivorship agreement had been executed for such unlawful purposes, or, as held by the respondent court, in order to frustrate our laws on wills, donations, and conjugal partnership. The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her husband, the latter has acquired upon her death a vested right over the amounts under savings account No. 35342-038 of the Bank of America. Insofar as the respondent court ordered their inclusion in the inventory of assets left by Mrs. Vitug, we hold that the court was in error. Being the separate property of petitioner, it forms no more part of the estate of the deceased. WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987, and its resolution, dated February 9, 1988, are SET ASIDE. No costs. SO ORDERED. G.R. No. L-46364 April 6, 1990 SULPICIA JIMENEZ and TORIBIO MATIAS, petitioners, vs. VICENTE FERNANDEZ alias HOSPICIO FERNANDEZ and TEODORA GRADO, respondents. Antonio E. Bengzon III for petitioners. Agustin U. Cruz for private respondents.

The entire parcel of land with an area of 2,932 square meters, formerly belonged to Fermin Jimenez. Fermin Jimenez has two (2) sons named Fortunato and Carlos Jimenez. This Fortunato Jimenez who predeceased his father has only one child, the petitioner Sulpicia Jimenez. After the death of Fermin Jimenez, the entire parcel of land was registered under Act 496 in the name of Carlos Jimenez and Sulpicia Jimenez (uncle and niece) in equal shares pro-indiviso. As a result of the registration case Original Certificate of Title No. 50933 (Exhibit 8) was issued on February 28, 1933, in the names of Carlos Jimenez and Sulpicia Jimenez, in equal shares pro-indiviso. Carlos Jimenez died on July 9, 1936 and his illegitimate daughter, Melecia Cayabyab, also known as Melecia Jimenez, took possession of the eastern portion of the property consisting of 436 square meters. On January 20, 1944, Melecia Jimenez sold said 436 square meter-portion of the property to Edilberto Cagampan and defendant Teodora Grado executed a contract entitled "Exchange of Real Properties" whereby the former transferred said 436 square meter-portion to the latter, who has been in occupation since. On August 29, 1969, plaintiff Sulpicia Jimenez executed an affidavit adjudicating unto herself the other half of the property appertaining to Carlos Jimenez, upon manifestation that she is the only heir of her deceased uncle. Consequently Transfer Certificate of Title No. 82275 was issued on October 1, 1969 in petitioner's name alone over the entire 2,932 square meter property. On April 1, 1970, Sulpicia Jimenez, joined by her husband, instituted the present action for the recovery of the eastern portion of the property consisting of 436 square meters occupied by defendant Teodora Grado and her son. After trial on the merits, the lower court rendered judgment, the dispositive portion of which reads: WHEREFORE, decision is hereby rendered dismissing the complaint and holding the defendant, Teodora Grado, the absolute owner of the land in question; ordering the plaintiffs to pay to the defendant the amount of P500.00 as damages, as attorney's fees, and to pay the costs of suit.

PARAS, J.: Before Us is a petition for review on certiorari of the following Decision and Resolution of the Honorable Court of Appeals: (1) Decision, dated March 1, 1977 in C.A.-G.R. No. 49178-R entitled "Sulpicia Jimenez, et al., v. Vicente Fernandez, et al." affirming in toto the judgment of the Court of First Instance of Pangasinan, Third Judicial District in Civil Case No. 14802-I between the same parties and (2) Resolution dated June 3, 1977 denying plaintiffs-appellants' motion for reconsideration. As gathered from the records, the factual background of this case is as follows: The land in question is the Eastern portion with an area of Four Hundred Thirty Six (436) square meters of that parcel of residential land situated in Barrio Dulig (now Magsaysay), Municipality of Labrador, Pangasinan actually covered by Transfer Certificate of Title No. 82275 (Exhibit A) issued in the name of Sulpicia Jimenez.
1 2

SO ORDERED. (Rollo, p. 20) Petitioner appealed the above judgment to the respondent Court of Appeals and on March 1, 1977, respondent Court of Appeals rendered a decision affirming the same in toto. Said decision was rendered by a special division of five (5) justices, with the Hon. Lourdes San Diego, dissenting. Petitioners within the reglementary period granted by the Honorable Court of Appeals, filed therewith a motion for reconsideration. But said motion for reconsideration was denied by the Court of Appeals in its resolution dated June 3, 1977. In their appeal to the respondent Court of Appeals from the aforequoted decision of the trial court, herein petitioner raised the following assignments of error to wit:

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ASSIGNMENTS OF ERROR I THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, IS NOT THE DAUGHTER OF CARLOS JIMENEZ. II THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, HAS NO RIGHT TO SELL THE LAND IN QUESTION TO EDILBERTO CAGAMPAN. III THE LOWER COURT ERRED IN NOT DECLARING THAT EDILBERTO CAGAMPAN DID NOT BECOME THE OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF SALE (EXH. "1") EXECUTED BY MELECIA CAYABYAB, ALIAS MELECIA JIMENEZ, IN HIS FAVOR. IV THE LOWER COURT ERRED IN NOT DECLARING THAT TEODORA GRADO DID NOT BECOME THE OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF EXCHANGE (EXH. "7") EXECUTED BY HER AND EDILBERTO CAGAMPAN. V THE LOWER COURT ERRED IN NOT DECLARING THAT THE TITLE OF APPELLANT SULPICIA JIMENEZ OVER THE LAND IN QUESTION CAN NOT BE DEFEATED BY THE ADVERSE OPEN AND NOTORIOUS POSSESSION OF APPELLEE TEODORA GRADO. VI THE LOWER COURT ERRED IN DECLARING THAT THE APPELLEE TEODORA GRADO IS THE ABSOLUTE OWNER OF THE LAND IN QUESTION IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN THE CASE OF LOURDES ARCUINO, ET AL., V. RUFINA APARIS AND CASIANO PURAY, G.R. NO. L-23424, PROMULGATED JANUARY 31, 1968, WHICH CASE IS NOT APPLICABLE TO THE CASE AT BAR.

VII THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT AND ORDERING THE APPELLANTS TO PAY THE APPELLEES THE SUM OF P500.00 AS ATTORNEYS FEES PLUS THE COSTS. From the foregoing, this petition for review was filed. We find merit in the petition. From the start the respondent court erred in not declaring that Melecia Jimenez Cayabyab also known as Melecia Jimenez, is not the daughter of Carlos Jimenez and therefore, had no right over the property in question. Respondents failed to present concrete evidence to prove that Melecia Cayabyab was really the daughter of Carlos Jimenez. Nonetheless, assuming for the sake of argument that Melecia Cayabyab was the illegitimate daughter of Carlos Jimenez there can be no question that Melecia Cayabyab had no right to succeed to the estate of Carlos Jimenez and could not have validly acquired, nor legally transferred to Edilberto Cagampan that portion of the property subject of this petition. It is well-settled in this jurisdiction that the rights to the succession are transmitted from the moment of the death of the decedent (Art. 777, Civil Code). Moreover, Art. 2263 of the Civil Code provides as follows: 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 . . . (Rollo, p. 17) Thus, since Carlos Jimenez, owner of one-half pro-indiviso portion of that parcel of land then covered by Original Certificate of title No. 50933, died on July 9, 1936 (Exhibit "F") way before the effectivity of the Civil Code of the Philippines, the successional rights pertaining to his estate must be determined in accordance with the Civil Code of 1889. Citing the case of Cid v. Burnaman (24 SCRA 434) wherein this Court categorically held that: To be an heir under the rules of Civil Code of 1889 (which was the law in force when Carlos Jimenez died and which should be the governing law in so far as the right to inherit from his estate was concerned), a child must be either a child legitimate, legitimated, or adopted, or else an acknowledged natural child for illegitimate not natural are disqualified to inherit. (Civil Code of 1889, Art. 807, 935) Even assuming that Melecia Cayabyab was born out of the common-law-relationship between her mother (Maria Cayabyab) and Carlos Jimenez, she could not even be considered an acknowledged natural child because Carlos Jimenez was then legally married to Susana Abalos and therefore not qualified to marry Maria Cayabyab and consequently Melecia Cayabyab was an illegitimate spurious child and not entitled to any successional rights in so far as the estate of Carlos Jimenez was concerned.

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Melecia Cayabyab in the absence of any voluntary conveyance to her by Carlos Jimenez or Sulpicia Jimenez of the litigated portion of the land could not even legally transfer the parcel of land to Edilberto Cagampan who accordingly, could not also legally transfer the same to herein private respondents. Analyzing the case before Us in this manner, We can immediately discern another error in the decision of the respondent court, which is that the said court sustained and made applicable to the case at bar the ruling in the case of Arcuino, et al., v. Aparis and Puray, No. L-23424, January 31, 1968, 22 SCRA 407, wherein We held that: . . . it is true that the lands registered under the Torrens System may not be acquired by prescription but plaintiffs herein are not the registered owners. They merely claim to have acquired by succession, their alleged title or interest in lot No. 355. At any rate plaintiffs herein are guilty of laches. The respondent court relying on the Arcuino case, concluded that respondents had acquired the property under litigation by prescription. We cannot agree with such conclusion, because there is one very marked and important difference between the case at bar and that of the Arcuino case, and that is, that since 1933 petitioner Sulpicia Jimenez was a title holder, the property then being registered in her and her uncle Carlos Jimenez' name. In the Arcuino case, this Supreme Court held. "(I)t is true that lands registered under the Torrens System may not be acquired by prescription but plaintiffs herein are not the registered owners." (Rollo, p. 38) Even in the said cited case the principle of imprescriptibility of Torrens Titles was respected. Melecia Cayabyab's possession or of her predecessors-in-interest would be unavailing against the petitioner Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the Torrens Certificate of Title covering a tract of land which includes the portion now in question, from February 28, 1933, when the Original Certificate of Title No. 50933 (Exhibit 8) was issued. No possession by any person of any portion of the land covered by said original certificate of titles, could defeat the title of the registered owner of the land covered by the certificate of title. (Benin v. Tuason, L-26127, June 28, 1974, 57 SCRA 531) Sulpicia's title over her one-half undivided property remained good and continued to be good when she segregated it into a new title (T.C.T No. 82275, Exhibit "A") in 1969. Sulpicia's ownership over her onehalf of the land and which is the land in dispute was always covered by a Torrens title, and therefore, no amount ofpossession thereof by the respondents, could ever defeat her proprietary rights thereon. It is apparent, that the right of plaintiff (now petitioner) to institute this action to recover possession of the portion of the land in question based on the Torrens Title of Sulpicia Jimenez, T.C.T. No. 82275 (Exhibit "A") is imprescriptible and not barred under the doctrine of laches. (J.M. Tuason & Co. v. Macalindong, L-15398, December 29, 1962, Francisco v. Cruz, et al., 43 O.G. 5105) Rollo, p. 39) The respondent Court of Appeals declared the petitioner Sulpicia Jimenez guilty of laches and citing the ruling in the case of Heirs of Lacamen v. Heirs of Laruan (65 SCRA 605), held that, since petitioner Sulpicia Jimenez executed her Affidavit of Self-Adjudication only in 1969, she lost the right to recover possession of the parcel of land subject of the litigation.

In this instance, again We rule for the petitioner. There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court and since laches is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. It would be rank injustice and patently inequitous to deprive the lawful heirs of their rightful inheritance. Petitioner Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and absolute owner of the land in question with right to its possession and enjoyment. Since her uncle Carlos Jimenez died in 1936, his pro-indiviso share in the properties then owned in co-ownership with his niece Sulpicia descended by intestacy to Sulpicia Jimenez alone because Carlos died without any issue or other heirs. After all, the professed objective of Act No. 496, otherwise known as the Land Registration Act or the law which established the Torrens System of Land Registration in the Philippines is that the stability of the landholding system in the Philippines depends on the confidence of the people in the titles covering the properties. And to this end, this Court has invariably upheld the indefeasibility of the Torrens Title and in, among others, J.M. Tuason and Co., Inc. v. Macalindong (6 SCRA 938), held that "the right of the appellee to file an action to recover possession based on its Torrens Title is imprescriptible and not barred under the doctrine of laches. WHEREFORE, the Petition for Review is hereby GRANTED. The Decision and Resolution dated March 1, 1977 and June 3, 1977 in CA G.R. No. L-49178-R are SET ASIDE. SO ORDERED. G.R. No. L-22595 November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee, vs. ANDRE BRIMO, opponent-appellant. Ross, Lawrence Camus and Delgado for appellee. and Selph for appellant.

ROMUALDEZ, J.: The partition of the estate left by the deceased Joseph G. Brimo is in question in this case. The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers of the deceased, opposed it. The court, however, approved it. The errors which the oppositor-appellant assigns are:

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(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the denial of the motion for reconsideration of the order approving the partition; (4) the approval of the purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the failure not to postpone the approval of the scheme of partition and the delivery of the deceased's business to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws. The appellant's opposition is based on the fact that the partition in question puts into effect the provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish nationality, for which reason they are void as being in violation or article 10 of the Civil Code which, among other things, provides the following: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property or the country in which it may be situated. But the fact is that the oppositor did not prove that said testimentary dispositions are not in accordance with the Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are on the matter, and in the absence of evidence on such laws, they are presumed to be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36 Phil., 472.) It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it when he desires to be given an opportunity to present evidence on this point; so much so that he assigns as an error of the court in not having deferred the approval of the scheme of partition until the receipt of certain testimony requested regarding the Turkish laws on the matter. The refusal to give the oppositor another opportunity to prove such laws does not constitute an error. It is discretionary with the trial court, and, taking into consideration that the oppositor was granted ample opportunity to introduce competent evidence, we find no abuse of discretion on the part of the court in this particular. There is, therefore, no evidence in the record that the national law of the testator Joseph G. Brimo was violated in the testamentary dispositions in question which, not being contrary to our laws in force, must be complied with and executed. lawphil.net Therefore, the approval of the scheme of partition in this respect was not erroneous. In regard to the first assignment of error which deals with the exclusion of the herein appellant as a legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into consideration that such exclusion is based on the last part of the second clause of the will, which says: Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having been conferred upon me by conquest and not by free choice, nor by nationality and, on the other hand, having resided for a considerable length of time in the Philippine Islands where I succeeded in acquiring all of the property that I now possess, it is my wish that the distribution of my property and everything in connection with this, my will, be made and disposed of in accordance with the laws in force in the Philippine islands, requesting all of my

relatives to respect this wish, otherwise, I annul and cancel beforehand whatever disposition found in this will favorable to the person or persons who fail to comply with this request. The institution of legatees in this will is conditional, and the condition is that the instituted legatees must respect the testator's will to distribute his property, not in accordance with the laws of his nationality, but in accordance with the laws of the Philippines. If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the herein oppositor who, by his attitude in these proceedings has not respected the will of the testator, as expressed, is prevented from receiving his legacy. The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil Code provides the following: Impossible conditions and those contrary to law or good morals shall be considered as not imposed and shall not prejudice the heir or legatee in any manner whatsoever, even should the testator otherwise provide. And said condition is contrary to law because it expressly ignores the testator's national law when, according to article 10 of the civil Code above quoted, such national law of the testator is the one to govern his testamentary dispositions. Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the institution of legatees in said will is unconditional and consequently valid and effective even as to the herein oppositor. It results from all this that the second clause of the will regarding the law which shall govern it, and to the condition imposed upon the legatees, is null and void, being contrary to law. All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and effective it not appearing that said clauses are contrary to the testator's national law. Therefore, the orders appealed from are modified and it is directed that the distribution of this estate be made in such a manner as to include the herein appellant Andre Brimo as one of the legatees, and the scheme of partition submitted by the judicial administrator is approved in all other respects, without any pronouncement as to costs. So ordered.

G.R. No. L-54919 May 30, 1984

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POLLY CAYETANO, petitioner, vs. HON. TOMAS T. LEONIDAS, in his capacity as the Presiding Judge of Branch XXXVIII, Court of First Instance of Manila and NENITA CAMPOS PAGUIA, respondents. Ermelo P. Guzman for petitioner.

On December 1, 1978, however, the petitioner through his counsel, Atty. Franco Loyola, filed a Motion to Dismiss Opposition (With Waiver of Rights or Interests) stating that he "has been able to verify the veracity thereof (of the will) and now confirms the same to be truly the probated will of his daughter Adoracion." Hence, an ex-partepresentation of evidence for the reprobate of the questioned will was made. On January 10, 1979, the respondent judge issued an order, to wit:

Armando Z. Gonzales for private respondent. At the hearing, it has been satisfactorily established that Adoracion C. Campos, in her lifetime, was a citizen of the United States of America with a permanent residence at 4633 Ditman Street, Philadelphia, PA 19124, (Exhibit D) that when alive, Adoracion C. Campos executed a Last Will and Testament in the county of Philadelphia, Pennsylvania, U.S.A., according to the laws thereat (Exhibits E-3 to E3-b) that while in temporary sojourn in the Philippines, Adoracion C. Campos died in the City of Manila (Exhibit C) leaving property both in the Philippines and in the United States of America; that the Last Will and Testament of the late Adoracion C. Campos was admitted and granted probate by the Orphan's Court Division of the Court of Common Pleas, the probate court of the Commonwealth of Pennsylvania, County of Philadelphia, U.S.A., and letters of administration were issued in favor of Clement J. McLaughlin all in accordance with the laws of the said foreign country on procedure and allowance of wills (Exhibits E to E-10); and that the petitioner is not suffering from any disqualification which would render her unfit as administratrix of the estate in the Philippines of the late Adoracion C. Campos. WHEREFORE, the Last Will and Testament of the late Adoracion C. Campos is hereby admitted to and allowed probate in the Philippines, and Nenita Campos Paguia is hereby appointed Administratrix of the estate of said decedent; let Letters of Administration with the Will annexed issue in favor of said Administratrix upon her filing of a bond in the amount of P5,000.00 conditioned under the provisions of Section I, Rule 81 of the Rules of Court. Another manifestation was filed by the petitioner on April 14, 1979, confirming the withdrawal of his opposition, acknowledging the same to be his voluntary act and deed. On May 25, 1979, Hermogenes Campos filed a petition for relief, praying that the order allowing the will be set aside on the ground that the withdrawal of his opposition to the same was secured through fraudulent means. According to him, the "Motion to Dismiss Opposition" was inserted among the papers which he signed in connection with two Deeds of Conditional Sales which he executed with the Construction and Development Corporation of the Philippines (CDCP). He also alleged that the lawyer who filed the withdrawal of the opposition was not his counsel-of-record in the special proceedings case. The petition for relief was set for hearing but the petitioner failed to appear. He made several motions for postponement until the hearing was set on May 29, 1980.

GUTIERREZ, JR., J.: This is a petition for review on certiorari, seeking to annul the order of the respondent judge of the Court of First Instance of Manila, Branch XXXVIII, which admitted to and allowed the probate of the last will and testament of Adoracion C. Campos, after an ex-parte presentation of evidence by herein private respondent. On January 31, 1977, Adoracion C. Campos died, leaving her father, petitioner Hermogenes Campos and her sisters, private respondent Nenita C. Paguia, Remedios C. Lopez and Marieta C. Medina as the surviving heirs. As Hermogenes Campos was the only compulsory heir, he executed an Affidavit of Adjudication under Rule 74, Section I of the Rules of Court whereby he adjudicated unto himself the ownership of the entire estate of the deceased Adoracion Campos. Eleven months after, on November 25, 1977, Nenita C. Paguia filed a petition for the reprobate of a will of the deceased, Adoracion Campos, which was allegedly executed in the United States and for her appointment as administratrix of the estate of the deceased testatrix. In her petition, Nenita alleged that the testatrix was an American citizen at the time of her death and was a permanent resident of 4633 Ditman Street, Philadelphia, Pennsylvania, U.S.A.; that the testatrix died in Manila on January 31, 1977 while temporarily residing with her sister at 2167 Leveriza, Malate, Manila; that during her lifetime, the testatrix made her last wig and testament on July 10, 1975, according to the laws of Pennsylvania, U.S.A., nominating Wilfredo Barzaga of New Jersey as executor; that after the testatrix death, her last will and testament was presented, probated, allowed, and registered with the Registry of Wins at the County of Philadelphia, U.S.A., that Clement L. McLaughlin, the administrator who was appointed after Dr. Barzaga had declined and waived his appointment as executor in favor of the former, is also a resident of Philadelphia, U.S.A., and that therefore, there is an urgent need for the appointment of an administratrix to administer and eventually distribute the properties of the estate located in the Philippines. On January 11, 1978, an opposition to the reprobate of the will was filed by herein petitioner alleging among other things, that he has every reason to believe that the will in question is a forgery; that the intrinsic provisions of the will are null and void; and that even if pertinent American laws on intrinsic provisions are invoked, the same could not apply inasmuch as they would work injustice and injury to him.

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On May 18, 1980, petitioner filed another motion entitled "Motion to Vacate and/or Set Aside the Order of January 10, 1979, and/or dismiss the case for lack of jurisdiction. In this motion, the notice of hearing provided: Please include this motion in your calendar for hearing on May 29, 1980 at 8:30 in the morning for submission for reconsideration and resolution of the Honorable Court. Until this Motion is resolved, may I also request for the future setting of the case for hearing on the Oppositor's motion to set aside previously filed. The hearing of May 29, 1980 was re-set by the court for June 19, 1980. When the case was called for hearing on this date, the counsel for petitioner tried to argue his motion to vacate instead of adducing evidence in support of the petition for relief. Thus, the respondent judge issued an order dismissing the petition for relief for failure to present evidence in support thereof. Petitioner filed a motion for reconsideration but the same was denied. In the same order, respondent judge also denied the motion to vacate for lack of merit. Hence, this petition. Meanwhile, on June 6,1982, petitioner Hermogenes Campos died and left a will, which, incidentally has been questioned by the respondent, his children and forced heirs as, on its face, patently null and void, and a fabrication, appointing Polly Cayetano as the executrix of his last will and testament. Cayetano, therefore, filed a motion to substitute herself as petitioner in the instant case which was granted by the court on September 13, 1982. A motion to dismiss the petition on the ground that the rights of the petitioner Hermogenes Campos merged upon his death with the rights of the respondent and her sisters, only remaining children and forced heirs was denied on September 12, 1983. Petitioner Cayetano persists with the allegations that the respondent judge acted without or in excess of his jurisdiction when: 1) He ruled the petitioner lost his standing in court deprived the Right to Notice (sic) upon the filing of the Motion to Dismiss opposition with waiver of rights or interests against the estate of deceased Adoracion C. Campos, thus, paving the way for the hearing ex-parte of the petition for the probate of decedent will. 2) He ruled that petitioner can waive, renounce or repudiate (not made in a public or authenticated instrument), or by way of a petition presented to the court but by way of a motion presented prior to an order for the distribution of the estate-the law especially providing that repudiation of an inheritance must be presented, within 30 days after it has issued an order for the distribution of the estate in accordance with the rules of Court. 3) He ruled that the right of a forced heir to his legitime can be divested by a decree admitting a will to probate in which no provision is made for the forced heir in complete disregard of Law of Succession

4) He denied petitioner's petition for Relief on the ground that no evidence was adduced to support the Petition for Relief when no Notice nor hearing was set to afford petitioner to prove the merit of his petition a denial of the due process and a grave abuse of discretion amounting to lack of jurisdiction. 5) He acquired no jurisdiction over the testate case, the fact that the Testator at the time of death was a usual resident of Dasmarias, Cavite, consequently Cavite Court of First Instance has exclusive jurisdiction over the case (De Borja vs. Tan, G.R. No. L-7792, July 1955). The first two issues raised by the petitioner are anchored on the allegation that the respondent judge acted with grave abuse of discretion when he allowed the withdrawal of the petitioner's opposition to the reprobate of the will. We find no grave abuse of discretion on the part of the respondent judge. No proof was adduced to support petitioner's contention that the motion to withdraw was secured through fraudulent means and that Atty. Franco Loyola was not his counsel of record. The records show that after the firing of the contested motion, the petitioner at a later date, filed a manifestation wherein he confirmed that the Motion to Dismiss Opposition was his voluntary act and deed. Moreover, at the time the motion was filed, the petitioner's former counsel, Atty. Jose P. Lagrosa had long withdrawn from the case and had been substituted by Atty. Franco Loyola who in turn filed the motion. The present petitioner cannot, therefore, maintain that the old man's attorney of record was Atty. Lagrosa at the time of filing the motion. Since the withdrawal was in order, the respondent judge acted correctly in hearing the probate of the will ex-parte, there being no other opposition to the same. The third issue raised deals with the validity of the provisions of the will. As a general rule, the probate court's authority is limited only to the extrinsic validity of the will, the due execution thereof, the testatrix's testamentary capacity and the compliance with the requisites or solemnities prescribed by law. The intrinsic validity of the will normally comes only after the court has declared that the will has been duly authenticated. However, where practical considerations demand that the intrinsic validity of the will be passed upon, even before it is probated, the court should meet the issue. (Maninang vs. Court of Appeals, 114 SCRA 478). In the case at bar, the petitioner maintains that since the respondent judge allowed the reprobate of Adoracion's will, Hermogenes C. Campos was divested of his legitime which was reserved by the law for him. This contention is without merit. Although on its face, the will appeared to have preterited the petitioner and thus, the respondent judge should have denied its reprobate outright, the private respondents have sufficiently established that Adoracion was, at the time of her death, an American citizen and a permanent resident of Philadelphia, Pennsylvania, U.S.A. Therefore, under Article 16 par. (2) and 1039 of the Civil Code which respectively provide: Art. 16 par. (2).

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xxx xxx xxx However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. Art. 1039. Capacity to succeed is governed by the law of the nation of the decedent. the law which governs Adoracion Campo's will is the law of Pennsylvania, U.S.A., which is the national law of the decedent. Although the parties admit that the Pennsylvania law does not provide for legitimes and that all the estate may be given away by the testatrix to a complete stranger, the petitioner argues that such law should not apply because it would be contrary to the sound and established public policy and would run counter to the specific provisions of Philippine Law. It is a settled rule that as regards the intrinsic validity of the provisions of the will, as provided for by Article 16(2) and 1039 of the Civil Code, the national law of the decedent must apply. This was squarely applied in the case ofBellis v. Bellis (20 SCRA 358) wherein we ruled: It is therefore evident that whatever public policy or good customs may be involved in our system of legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's national law. Specific provisions must prevail over general ones. xxx xxx xxx The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and under the law of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of successional rights are to be determined under Texas law, the Philippine Law on legitimes cannot be applied to the testacy of Amos G. Bellis. As regards the alleged absence of notice of hearing for the petition for relief, the records wig bear the fact that what was repeatedly scheduled for hearing on separate dates until June 19, 1980 was the petitioner's petition for relief and not his motion to vacate the order of January 10, 1979. There is no reason why the petitioner should have been led to believe otherwise. The court even admonished the petitioner's failing to adduce evidence when his petition for relief was repeatedly set for hearing. There was no denial of due process. The fact that he requested "for the future setting of the case for hearing . . ." did not mean that at the next hearing, the motion to vacate would be heard and given preference in lieu of the petition for relief. Furthermore, such request should be embodied in a motion and not in a mere notice of hearing.

Finally, we find the contention of the petition as to the issue of jurisdiction utterly devoid of merit. Under Rule 73, Section 1, of the Rules of Court, it is provided that: SECTION 1. Where estate of deceased persons settled. If the decedent is an inhabitant of the Philippines at the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First Instance in the province in which he resided at the time of his death, and if he is an inhabitant of a foreign country, the Court of First Instance of any province in which he had estate. The court first taking cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts. The jurisdiction assumed by a court, so far as it depends on the place of residence of the decedent, or of the location of his estate, shall not be contested in a suit or proceeding, except in an appeal from that court, in the original case, or when the want of jurisdiction appears on the record. Therefore, the settlement of the estate of Adoracion Campos was correctly filed with the Court of First Instance of Manila where she had an estate since it was alleged and proven that Adoracion at the time of her death was a citizen and permanent resident of Pennsylvania, United States of America and not a "usual resident of Cavite" as alleged by the petitioner. Moreover, petitioner is now estopped from questioning the jurisdiction of the probate court in the petition for relief. It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief, against his opponent and after failing to obtain such relief, repudiate or question that same jurisdiction. (See Saulog Transit, Inc. vs. Hon. Manuel Lazaro, et al., G. R. No. 63 284, April 4, 1984). WHEREFORE, the petition for certiorari and prohibition is hereby dismissed for lack of merit. SO ORDERED.

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