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The property relationship between husband and wife shall be governed in the following order: (1) By marriage settlements executed before the marriage; (2) By the provisions of this Code; and (3) By the local custom. (118) Art. 75. The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern. (119a) Art. 76. In order that any modification in the marriage settlements may be valid, it must be made before the celebration of the marriage, subject to the provisions of Articles 66, 67, 128, 135 and 136. (121) Art. 77. The marriage settlements and any modification thereof shall be in writing, signed by the parties and executed before the celebration of the marriage. They shall not prejudice third persons unless they are registered in the local civil registry where the marriage contract is recorded as well as in the proper registries of properties. (122a) Art. 78. A minor who according to law may contract marriage may also execute his or her marriage settlements, but they shall be valid only if the persons designated in Article 14 to give consent to the marriage are made parties to the agreement, subject to the provisions of Title IX of this Code. (120a) Art. 79. For the validity of any marriage settlement executed by a person upon whom a sentence of civil interdiction has been pronounced or who is subject to any other disability, it shall be indispensable for the guardian appointed by a competent court to be made a party thereto. (123a) Art. 80. In the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence. This rule shall not apply:
(1) Where both spouses are aliens; (2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in the country where the property is located; and (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity. (124a) Art. 81. Everything stipulated in the settlements or contracts referred to in the preceding articles in consideration of a future marriage, including donations between the prospective spouses made therein, shall be rendered void if the marriage does not take place. However, stipulations that do not depend upon the celebration of the marriages shall be valid. (125a) Collector of Internal Revenue, petitioner vs Douglas Fisher and Bettina Fisher, and The Court of Tax Appeals, respondents. 28 January 1961 Facts Walter Stevenson (born in Phils, of British parents, married in Mnla in 1909 to British subject Beatrice Mauricia Stevenson) died on Feb1951 in Sn Francisco, Cali., in permanent residence established with wife. He instituted his wife, who later assigned all her rights and interests to Fisher spouses in Dec 1952, as sole heiress to real & personal properties acquired by them while residing in Phil. Total gross of assets was P130,792.83. Ancillary administration proceedings in the Court of 1st Instance of Mnla were instituted to settle the estate in the Philippines. Ian Murray Scott was appointed ancillary administrator of the estate. He filed a preliminary inheritance and tax return with the reservation of having the properties declared finally appraised at values 6mos. after the death of Stevenson. On Sept 1952, estate and inheritance tax return was amended to avail of the right granted by section 91 of NIR Code. There was a change in price per share of stock, the ancillary administrator based it on the quotation of the stock obtaining at the San Francisco Stock Exchange. He also made claim to deductions for funeral expenses, judicial expenses and others. On Sept 1953, he filed a second amended estate and inheritance tax return. It contained new claims for additional exemptions and deductions: 4,000 deduction from gross estate of decedent provided by Sec.861, no.4, US Fedl Internl Rev. Code, made allowable by way of reciprocity granted by Sec.122, NIR Code); other exemptions granted by reciprocity proviso. Refund of amount of 15, 259.83 allegedly overpaid was requested by the estate and denied by the
Collector. Pursuant to Act No.1125, action commenced in Court of 1st Instance was forwarded to Court of Tax Appeals. Issues 1. WON, one-half of the net estate should be deducted in determining the taxable net estate of the decedent as Beatrice Mauricia’s share in accordance with our law on conjugal partnership and section 89 of the NIR Code 2. WON estate can avail of inheritance and estate taxes on shares of stock in Mindanao Mother Lode Mines, Inc., granted by reciprocity proviso in sec122, NIR 3. WON estate is entitled to 4,000 deduction allowed by sec861, US FIRC, in relation to sec122, NIR 4. WON real estate properties of decedent and shares of stock were correctly appraised 5. WON estate is entitled to deductions for judicial, administration, funeral expenses and real estate taxes and amount representing indebtedness incurred by decedent during his lifetimes 6. WON estate is entitled to payment of interest of amt. it claims to have overpaid the gov’t and to be refundable to it. Held Decision affirmed with modifications.
Amount under the Fed’l Estate Tax Law is in the nature of a deduction, not of an exemption regarding which reciprocity can’t be claimed under sec122, NIR. No. Respondents contend that the fair market value should be the assessed values appearing in the tax rolls 6months after death of Stevenson, pursuant to sec91, NIR. However, properties are required to be appraised at their fair market value and the assessed value thereof shall be considered as their fair market value only when evidence to the contrary hasn’t been shown.The situs of the shares of the stock for purposes of taxation, being located in the Phils and sought to be taxed in this jurisdiction, consistent with the exercise of our govt’s taxing authority, their fair market value should be fixed on the basis of the price prevailing on our country. However, since the said shares of stock commanded a lesser value at Manila Stock Exchange six months after death of Stevenson, the testimony of Atty. Gibbs contributed to the SC’s reversal of Tax Court and holding the value of a share in said mining company in the Phil market as P.325 as claimed by respondents. Yes. These have been considered deductible by the Tax Court. p706-707 No, deduction has to be allowed only insofar as the Philippine probate court has not approved this particular indebtedness of the decedent, such approval is necessary. There is a regular administration under control of the court where claims must be presented and approved and expenses of administration allowed before deductions from the estate can be authorized. Another reason: According to sec89, letter d of NIR, allowable deduction is only to the extent of the PORTION of the indebtedness which is equivalent to the proportion that the estate in the Philippines bears to the total estate wherever situated. Since there is no statement of the value of the estate situated outside the Phils, or that there exists no such properties outside the Phils, no part of the indebtedness can be allowed to be deducted.
Yes. In the absence of ante-nuptial agreement, the contracting parties are presumed to have adopted the system of conjugal partnership as to the properties acquired during their marriage. Since the marriage took place in 1909, Article 1325( not Art.124 of NCC which became effective only in 1950), adhering to the nationality theory of determining the property relation of spouses where one is a foreigner and there are no prior arrangements is the applicable law. However, in the instant case, both spouses are foreigners who married in the Philippines. Therefore, The law determining the Stevenson property relation is the English law, which must be presumed to be the same as our law since there is an absence of proof otherwise (processual presumption, p699). More importantly, property relations of spouses as distinguished from successional rights of spouses is governed differently by the specific and express provisions of Title VI, Chapter I of NCC. No. There is no total reciprocity between the Philippines and the state of California in that while the former exempts payment of both estate and inheritance taxes on intangible properties, the latter only exempts the payment of inheritance.
DONATIONS REQUISITES FOR DONATIONS Art. 82. Donations by reason of marriage are those which are made before its celebration, in consideration of the same, and in favor of one or both of the future spouses. (126) Art. 83. These donations are governed by the rules on ordinary donations established in Title III of Book III of the Civil Code, insofar as they are not modified by the following articles. (127a)
Art. 84. If the future spouses agree upon a regime other than the absolute community of property, they cannot donate to each other in their marriage settlements more than one-fifth of their present property. Any excess shall be considered void. Donations of future property shall be governed by the provisions on testamentary succession and the formalities of wills. (130a) Art. 85. Donations by reason of marriage of property subject to encumbrances shall be valid. In case of foreclosure of the encumbrance and the property is sold for less than the total amount of the obligation secured, the donee shall not be liable for the deficiency. If the property is sold for more than the total amount of said obligation, the donee shall be entitled to the excess. (131a) Art. 86. A donation by reason of marriage may be revoked by the donor in the following cases: (1) If the marriage is not celebrated or judicially declared void ab initio except donations made in the marriage settlements, which shall be governed by Article 81; (2) When the marriage takes place without the consent of the parents or guardian, as required by law; (3) When the marriage is annulled, and the donee acted in bad faith; (4) Upon legal separation, the donee being the guilty spouse; (5) If it is with a resolutory condition and the condition is complied with; (6) When the donee has committed an act of ingratitude as specified by the provisions of the Civil Code on donations in general. (132a) Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. (133a) Jorge Domalagan v. Carlos Bolifer (1916) Appeal from a judgment of CFI Misamis FACTS:
Aug 1910: Dad Domalagan paid the sum of P500 plus P16 as hansel or token of future marriage. However, Bonifacia married one Laureano Sisi. (read: new name – Bonifacia Sisi – puhlease!!) Upon learning of the marriage, Domalagan demanded return of the said sum of P516 plus interest and damages arising from the fact that he was obliged to sell his real property in Bohol to come up with the sum. Defendant denied complaint and alleged that it did not constitute a cause of action. RTC: No evidence to show that plaintiff suffered any addtl damages. Ruled in favor of plaintiff for the return of P516 plus 6% interest from Dec 17, 1910 plus costs.
ISSUE: WON verbal contract of the parties was valid and effective to render delivery of the money by reason of a prospective marriage HELD: Judgment affirmed. RATIO: Why, yes, of course! Sec 335 Par 3 of the Code of Procedure in Civil Actions: “In the ff cases an agreement made shall be unenforceable by action unless the same, or some note or memorandum thereof, be in writing… (3) An agreement made upon the consideration of marriage, other than a mutual promise to marry.” Said section does not render oral contracts invalid. A contract may be valid and yet, by virtue of said section, the parties will be unable to prove it. It simply provides the method by w/c the contracts mentioned can be proved. The form required is for evidential purposes only. A contract may be perfectly valid even though it is not clothed w/ the necessary form. If the parties to an action, during the trial of the case, make no objection to the admissibility of oral evidence to support contracts and permit the contract to be proved, by evidence other than a writing, it will be just as binding upon the parties as if it had been reduced to writing. ESTANISLAO SERRANO vs. MELCHOR SOLOMON [June 29, 1959] Appeal from CFI Ilocos Sur decision Alejandria Feliciano – father is in Hawaii; entrusted to father’s friend, Estanislao Serrano who took care of her & raised her from 12 until she got married June 21, 1948 – Alejandria & Melchor Solomon were married. Before the ceremony, Solomon executed alleged Deed of Donation w/c stated among others that he was donating all of his exclusive properties to serve as capital for their conjugal life & for the maintenance & support of their offsprings. Their children will inherit such donation but in the absence of children, half of the properties
Nov. 1909: Domalagan & Bolifer entered into a verbal contract wherein the former was to pay defendant the sum of P500 upon the marriage of the son Cipriano Domalagan w/ the defendant’s daughter, Bonifacia.
will go to his brothers/sisters/their heirs if he dies before his wife or if his wife dies before him, half will go to those who raised his wife. March 2, 1949 – Alejandria died. Few months after – Estanislao instituted action to enforce & implement terms of alleged donation. Being the one who raised Alejandria, he believed he had the right to half of Melchor’s property. CFI: donation was not a donation propter nuptias because it was not made in consideration of marriage & it was not made to one or both parties of the marriage ISSUE: WON the donation made by Melchor can be considered as a donation propter nuptias. HELD: No alleged donation is null & void. CFI affirmed. Estanislao won’t get anything. RATIO: Whether you apply Art. 1327 of the old CC or Art. 126 of the new CC, the result would be the same, donations propter nuptias are only those bestowed (1)before the celebration of marriage, (2)in consideration of the same & (3)upon one or both of the spouses. Melchor’s donation violated conditions 2 & 3. It was not in consideration solely of the marriage, it had additional terms like the marriage had to be childless and one of the spouses had to die before the other. Also, it was not in favor of Alejandria. Instead, it was in favor of her parents & those who raised her. Based on Manresa’s commentary, donations granted to persons other than the spouses even though founded on the marriage are excluded. It’s not a donation inter vivos (during their lifetime) either, because donee never accepted it by same instrument of donation or in separate document as required by law. It’s not a donation mortis causa (upon death) either. It has to be governed by provisions on the disposition execution of wills to be appreciated as such. Besides, donor is still alive. It will only be operational upon his death. SOLIS v. BARROSO 53 Phil. 912 Facts: On June 1919, spouses Juan Lambino and Maxima Barroso made a donation propter nuptias of certain lands in a private document in favor of their son Alejo and his soon-to-be-wife Fortunata Solis, in consideration of their upcoming marriage. One condition of the donation is that in case one of the donees dies, half of the lands thus donated would revert to the donors while the surviving donee would retain the other half. On the same month, Alejo and Fortunata got married and immediately thereafter the donors delivered the possession of the donated lands to them. A month later, Alejo died. In the same year, Juan also died. After Juan’s death, Maxima recovered possession of the donated lands. Surviving donee, Fortunata filed an action against Maxima (surviving donor) et al and demanded: (1) the execution of the proper deed of donation according to law, (2) transferring one-half of the donated property, and
(3) to proceed to the partition of the donated property and its fruits The lower court granted the plaintiff’s prayer, basing its judgment on article 1279 of the Civil Code. It ordered the defendants to execute a deed of donation in favor of Fortunata, valid in form to transfer to her the legal title to the part of the donated lands assigned to her in the original donation. Issue: WON one-half of the donated lands should properly be awarded to her. Held: No. CFI’s judgment reversed and defendants absolved from complaint. Ratio: Article 1279 used by lower court is not applicable to donation propter nuptias Article 1279 provides that, should the law require the execution of an instrument or any other special form in order to make the obligations of a contract effective, the contracting parties may compel each other to comply with such formality from the moment that consent has been given, and the other requirements for the validity of the contract to exist. In the case at bar, what is of concern is a donation propter nuptias. According to article 1328, CC, donation propter nuptias are governed by the rules established in articles 618 to 656 of the CC, on donations. Art. 633 provides that for a donation of a real property to be valid, it must be made in a public instrument. Exception to the rule: onerous and remuneratory contracts, in so far as they do not exceed the value of the charge imposed, which are then governed by the rules on contracts (art. 622) Because the donation propter nuptias by the spouses were made in a private instrument, it is not valid and does not confer any rights.
Thus, article 1279 is not applicable because (1) it refers to contracts; (2) the donation in question requires the execution of an instrument in the form required to make it valid, whereas article 1279 refers to the execution of an instrument that is in the form required to make the obligation in the contract effective.
The lower court’s judgment that the present donation is onerous and pursuant to article 622 must be governed by the rules on contracts is not well-founded. Donations for valuable consideration (onerous donations), as may be inferred from article 619, are such as compensate services (1) which constitute debts which are recoverable from the donor, or (2) which impose a charge equal to the amount of the donation upon the donee Neither applies to the present donation, which was made only in consideration of marriage The lower court’s assertion that, by the fact that this is a donation propter nuptias, it is based upon the marriage as a consideration, and must be considered onerous is also not well-founded.
In donations propter nuptias, the marriage is really a consideration, but not in the sense of being necessary to give birth to the obligation. The marriage in a donation propter nuptias is rather a resolutory condition which, as such, presupposes the existence of the obligation which may be resolved or revoked, and it is not a condition necessary for the birth of the obligation.
***sana ma-gets nyo..sobrang hirap ako maintindihan siya coz it presupposes that I understand what onerous donations are. Just as reference, onerous means having legal obligations that outweigh the advantages. Sorry talaga..it’s all I could come up with.. Mateo vs. Lagua [October 30, 1969] Petition for review of a decision of the Court of Appeals Facts:
Cipriano Lagua was the original order of 3 lots (998, 6541, 5106). In 1917 he donated lot 998 and 6541 to Alejandro Lagua in consideration of the marriage of his son. The Certificate of Titles remained in the donor’s name. 1923 Alejandro Lagua died and his wife and infant daughter stayed with Cipriano. Cipriano undertook the farming of the donated lots and initially he was giving the to Bonifacia (wife of Alejandro) the owner’s share of the harvest of the land. However in 1926 Cipriano refused to deliver the share of Bonifacio and as such Bonifacio resorted to the Court wherein she obtained a judgement award to her possession of the two lots plus damages. July 31, 1941 – Cipriano executed a deed of sale of the two parcels of land in favour of his other son, Gervasio. Even with the sale Bonifacia continued to receive her owner’s share of the harvest until 1956. Bonifacia discovered the sale only in 1956 when the remittance of her share has stopped. She also discovered that in September 22, 1955 TCT Nos. 19152 and 19153 of the Register of Deeds of Pangasinan were issued to Gervasio. She went to court to seek for the annulment of the deed of sale in favour of Gervasio and for recovery of the possession of the properties. The court ruled in her favour. August 18, 1957 – Gervasio and his wife filed an action against Bonifacia for reimbursement of the improvements allegedly made by them in lots 998 and 6541 plus damages. This case was dismissed but Gervasio appealed the decision. At about the same time Cipriano and Gervasio filed for the annulment of the donation of the two lots insofar as one-half portion thereof was concerned. They were claiming that in donating the two lots, which allegedly were all that plaintiff Cipriano owned, said plaintiff not only neglected leaving something for his own support but also prejudices the legitime of his forced heir, Gervasio. On November 22, 1958 Cipriano died. (the cases were still pending in court) Lower Court dismissed both cases.
CA affirmed the decision of the lower court with regards to the damages claim but with respect to the annulment case it ruled that the donation to Alejangro of the 2 lots with the combined area of 11,888 square meters exceeded by 494.75 square meters his legitime and the disposable portion that Cipriano could have freely given by will and as a result it prejudiced Gervasio. The Defendants were ordered to reconvey to Plaintiff Gervasio a portio of 494.75 square meters to be taken from any convenient part of the lots. Bonifacia appealed the decision raising the following errors: o Validity of the donation propter nuptias have been determined in a previous case o Action to annul the donation has already prescribed since the case was filed 41 years after the donation o Donation propter nuptias is revocable only for any grounds enumerated in Art. 132 of the new civil code o Determining the legitime of the Lagua brothers in the hereditary estate of Cipriano the CA should have applied the provisions of the Civil Code of 1889 and not Article 888 of the New Civil Code.
WON the Civil Code of 1889 should govern the case. NO Cause of action to enforce Gervasio’s legitime have accrued only upon the death of his father on November 12, 1958 then it should be governed by the provisions of the New Civil Code; and that a donation propter nuptias property may be reduced for being inofficious. Donation propter nuptias liberalities and as such it is subject to reduction for inofficiousness upon the donor’s death, if they should infringe on the legitime of a forced heir. WON the CA acted correctly in ordering the reduction of the donation for being inofficious, and in ordering the petitioners to reconvey to Gervasio an unidentified 494.75 square meter portion of donated lots. NO Court of Appeals acted on several unsupported assumptions o 3 lots were the only properties composing the net hereditary estate of Cipriano o There are only 2 legal heirs o Cipriano left no unpaid debt, charges, taxes etc. The net estate of the decedent must be ascertained, by deduction all payable obligations and charges at the time of his death; then all donations subject to collation would be added to it. It is only thereafter can it be ascertained WON a donation has prejudiced the legitimes. With the evidence before the CA it can hardly rule on the inofficiousness of the donation involved and to order the reduction and reconveyance of the deducted portion to the respondent.
Note: Donations propter nuptias are without onerous consideration, the marriage being merely the occasion or the motive for the donation, not its causa. Being liberalities, they remain subject to reduction for inofficiousness upon the donor’s death, if they should infringe the legitime of a forced heir.
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