URSULINA GANUELAS, METODIO GANUELAS and ANTONIO

GANUELAS, v. HON. ROBERT T. CAWED, Judge of the Regional Trial

Court of San Fernando, La Union (Branch 29), LEOCADIA G. FLORES,
FELICITACION G. AGTARAP, CORAZON G. SIPALAY and ESTATE OF
ROMANA GANUELAS DE LA ROSA, represented by GREGORIO DELA
ROSA, Administrator, respondent.

DECISION

CARPIO-MORALES, J.:

The present petition for review under Rule 45 of the Rules of Court assails, on a
question of law, the February 22, 1996 decision1 of the Regional Trial Court of San
Fernando, La Union, Branch 29, in Civil Case No. 3947, an action for declaration
of nullity of a deed of donation.

The facts, as culled from the records of the case, are as follows:

On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed
of Donation of Real Property2 covering seven parcels of land in favor of her niece
Ursulina Ganuelas (Ursulina), one of herein petitioners.

The pertinent provision of the deed of donation reads, quoted verbatim:

xxx

That, for and in consideration of the love and affection which the DONOR has for
the DONEE, and of the faithful services the latter has rendered in the past to the
former, the said DONOR does by these presents transfer and convey, by way of
DONATION, unto the DONEE the property above, described, to become effective
upon the death of the DONOR; but in the event that the DONEE should die before
the DONOR, the present donation shall be deemed rescinded and of no further
force and effect.

x x x.3cräläwvirtualibräry

On June 10, 1967, Celestina executed a document denominated as Revocation of

Donation4 purporting to set aside the deed of donation. More than a month later or
on August 18, 1967, Celestina died without issue and any surviving ascendants and
siblings.
After Celestinas death, Ursulina had been sharing the produce of the donated
properties with private respondents Leocadia G. Flores, et al., nieces of Celestina.

In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina
secured the corresponding tax declarations, in her name, over the donated
properties, to wit: Tax Declarations Nos. 18108, 18109, 18110, 18111, 18112,
18113 and 18114, and since then, she refused to give private respondents any share
in the produce of the properties despite repeated demands.

Private respondents were thus prompted to file on May 26, 1986 with the RTC of
San Fernando, La Union a complaint5 against Ursulina, along with Metodio
Ganuelas and Antonio Ganuelas who were alleged to be unwilling plaintiffs. The
complaint alleged that the Deed of Donation executed by Celestina in favor of
Ursulina was void for lack of acknowledgment by the attesting witnesses thereto
before notary public Atty. Henry Valmonte, and the donation was a
disposition mortis causa which failed to comply with the provisions of the Civil
Code regarding formalities of wills and testaments, hence, it was void. The
plaintiffs-herein private respondents thus prayed that judgment be rendered
ordering Ursulina to return to them as intestate heirs the possession and ownership
of the properties. They likewise prayed for the cancellation of the tax declarations
secured in the name of Ursulina, the partition of the properties among the intestate
heirs of Celestina, and the rendering by Ursulina of an accounting of all the fruits
of the properties since 1982 and for her to return or pay the value of their shares.

The defendants-herein petitioners alleged in their Answer6 that the donation in

favor of Ursulina was inter vivos as contemplated under Article 729 of the Civil
Code,7 hence, the deed did not have to comply with the requirements for the
execution of a valid will; the Revocation of Donation is null and void as the ground
mentioned therein is not among those provided by law to be the basis thereof; and
at any rate, the revocation could only be legally enforced upon filing of the
appropriate complaint in court within the prescriptive period provided by law,
which period had, at the time the complaint was filed, already lapsed.

By Decision of February 22, 1996, the trial court, holding that the provision in the
Deed of Donation that in the event that the DONEE should predecease the
DONOR, the donation shall be deemed rescinded and of no further force and effect
is an explicit indication that the deed is a donation mortis causa,8 found for the
plaintiffs-herein private respondents, thus:
WHEREFORE the Court renders judgment declaring null and void the Deed of
Donation of Real Property executed by Celestina Ganuelas, and orders the partition
of the estate of Celestina among the intestate heirs.

SO ORDERED.9cräläwvirtualibräry

The trial court also held that the absence of a reservation clause in the deed implied
that Celestina retained complete dominion over her properties, thus supporting the
conclusion that the donation is mortis causa,10 and that while the deed contained an
attestation clause and an acknowledgment showing the intent of the donor to effect
a postmortem disposition, the acknowledgment was defective as only the donor
and donee appear to have acknowledged the deed before the notary public, thereby
rendering the entire document void.11cräläwvirtualibräry

Lastly, the trial court held that the subsequent execution by Celestina of the
Revocation of Donation showed that the donor intended the revocability of the
donation ad nutum, thus sustaining its finding that the conveyance was mortis
causa.12cräläwvirtualibräry

On herein petitioners argument that the Revocation of Donation was void as the
ground mentioned therein is not one of those allowed by law to be a basis for
revocation, the trial court held that the legal grounds for such revocation as
provided under the Civil Code arise only in cases of donations inter vivos, but not
in donations mortis causa which are revocable at will during the lifetime of the
donor. The trial court held, in any event, that given the nullity of the
disposition mortis causa in view of a failure to comply with the formalities
required therefor, the Deed of Revocation was a superfluity.13cräläwvirtualibräry

Hence, the instant petition for review, petitioners contending that the trial court
erred:

I. . . . WHEN IT DECLARED NULL AND VOID THE DONATION

EXECUTED BY CELESTINA GANUELAS;

II. . . . WHEN IT UPHELD THE REVOCATION OF DONATION;

III. . . . IN RENDERING ITS DECISION ADVERSE TO PETITIONER

URSULINA GANUELAS.14cräläwvirtualibräry

Petitioners argue that the donation contained in the deed is inter vivos as the main
consideration for its execution was the donors affection for the donee rather than
the donors death;15 that the provision on the effectivity of the donationafter the
donors deathsimply meant that absolute ownership would pertain to the donee on
the donors death;16 and that since the donation is inter vivos, it may be revoked
only for the reasons provided in Articles 760,17 76418 and 76519 of the Civil Code.

In a letter of March 16, 1998,20 private respondent Corazon Sipalay, reacting to this

Courts January 28, 1998 Resolution requiring private respondents to SHOW
CAUSE why they should not be disciplinarily dealt with or held in contempt for
failure to submit the name and address of their new counsel, explains that they are
no longer interested in pursuing the case and are willing and ready to waive
whatever rights they have over the properties subject of the donation. Petitioners,
who were required to comment on the letter, by Comment of October 28,
1998,21 welcome private respondents gesture but pray that for the sake of enriching
jurisprudence, their [p]etition be given due course and resolved.

The issue is thus whether the donation is inter vivos or mortis causa.

Crucial in the resolution of the issue is the determination of whether the donor
intended to transfer the ownership over the properties upon the execution of the
deed.22cräläwvirtualibräry

Donation inter vivos differs from donation mortis causa in that in the former, the

act is immediately operative even if the actual execution may be deferred until the
death of the donor, while in the latter, nothing is conveyed to or acquired by the
donee until the death of the donor-testator.23 The following ruling of this Court
in Alejandro v. Geraldez is illuminating:24cräläwvirtualibräry

If the donation is made in contemplation of the donors death, meaning that the full
or naked ownership of the donated properties will pass to the donee only because
of the donors death, then it is at that time that the donation takes effect, and it is a
donation mortis causa which should be embodied in a last will and testament.

But if the donation takes effect during the donors lifetime or independently of the
donors death, meaning that the full or naked ownership (nuda proprietas) of the
donated properties passes to the donee during the donors lifetime, not by reason of
his death but because of the deed of donation, then the donation is inter vivos.

The distinction between a transfer inter vivos and mortis causa is important as the

validity or revocation of the donation depends upon its nature. If the donation
is inter vivos, it must be executed and accepted with the formalities prescribed by
Articles 74825 and 74926 of the Civil Code, except when it is onerous in which case
the rules on contracts will apply. If it is mortis causa, the donation must be in the
form of a will, with all the formalities for the validity of wills, otherwise it is void
and cannot transfer ownership.27cräläwvirtualibräry

The distinguishing characteristics of a donation mortis causa are the following:

1. It conveys no title or ownership to the transferee before the death of the

transferor; or, what amounts to the same thing, that the transferor should retain the
ownership (full or naked) and control of the property while alive;

2. That before his death, the transfer should be revocable by the transferor at will,
ad nutum; but revocability may be provided for indirectly by means of a reserved
power in the donor to dispose of the properties conveyed;

3. That the transfer should be void if the transferor should survive the
transferee.28cräläwvirtualibräry

In the donation subject of the present case, there is nothing therein which indicates
that any right, title or interest in the donated properties was to be transferred to
Ursulina prior to the death of Celestina.

The phrase to become effective upon the death of the DONOR admits of no other
interpretation but that Celestina intended to transfer the ownership of the properties
to Ursulina on her death, not during her lifetime.29cräläwvirtualibräry

More importantly, the provision in the deed stating that if the donee should die
before the donor, the donation shall be deemed rescinded and of no further force
and effect shows that the donation is a postmortem disposition.

As stated in a long line of cases, one of the decisive characteristics of a

donation mortis causa is that the transfer should be considered void if the donor
should survive the donee.30cräläwvirtualibräry

More. The deed contains an attestation clause expressly confirming the donation
as mortis causa:

SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed
of donation mortis causa, consisting of two (2) pages and on the left margin of
each and every page thereof in the joint presence of all of us who at her request and
in her presence and that of each other have in like manner subscribed our names as
witnesses.31 (Emphasis supplied)
To classify the donation as inter vivos simply because it is founded on
considerations of love and affection is erroneous. That the donation was prompted
by the affection of the donor for the donee and the services rendered by the latter is
of no particular significance in determining whether the deed constitutes a
transfer inter vivos or not, because a legacy may have an identical motivation.32 In
other words, love and affection may also underline transfers mortis
causa.33cräläwvirtualibräry

In Maglasang v. Heirs of Cabatingan,34 the deeds of donation contained

provisions almost identical to those found in the deed subject of the present case:

That for and in consideration of the love and affection of the DONOR for the
DONEE, x x x the DONOR does hereby, by these presents, transfer, convey, by
way of donation, unto the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become effective upon the
death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE
should die before the DONOR, the present donation shall be deemed automatically
rescinded and of no further force and effect. (Underscoring supplied)

In that case, this Court held that the donations were mortis causa, for the above-
quoted provision conclusively establishes the donors intention to transfer the
ownership and possession of the donated property to the donee only after the
formers death. Like in the present case, the deeds therein did not contain any clear
provision that purports to pass proprietary rights to the donee prior to the donors
death.

As the subject deed then is in the nature of a mortis causa disposition, the

formalities of a will under Article 728 of the Civil Code should have been
complied with, failing which the donation is void and produces no
effect.35cräläwvirtualibräry

As noted by the trial court, the attesting witnesses failed to acknowledge the deed
before the notary public, thus violating Article 806 of the Civil Code which
provides:

Art. 806. Every will must be acknowledged before a notary public by the
testator and the witnesses. The notary public shall not be required to retain a copy
of the will, or file another with the office of the Clerk of Court. (Emphasis
supplied)
The trial court did not thus commit any reversible error in declaring the Deed of
Donation to be mortis causa.

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

GONZALO VILLANUEVA, represented by his heirs, Petitioner,

vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.

DECISION

CARPIO, J.:
 The Case

This resolves the petition for review1 of the ruling2 of the Court of Appeals
dismissing a suit to recover a realty.

The Facts

Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,3 sued

respondents, spouses Froilan and Leonila Branoco (respondents), in the Regional
Trial Court of Naval, Biliran (trial court) to recover a 3,492 square-meter parcel of
land in Amambajag, Culaba, Leyte (Property) and collect damages. Petitioner
claimed ownership over the Property through purchase in July 1971 from Casimiro
Vere (Vere), who, in turn, bought the Property from Alvegia Rodrigo (Rodrigo) in
August 1970. Petitioner declared the Property in his name for tax purposes soon
after acquiring it.

In their Answer, respondents similarly claimed ownership over the Property

through purchase in July 1983 from Eufracia Rodriguez (Rodriguez) to whom
Rodrigo donated the Property in May 1965. The two-page deed of donation
(Deed), signed at the bottom by the parties and two witnesses, reads in full:

KNOW ALL MEN BY THESE PRESENTS:

That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan
Arcillas, a resident of Barrio Bool, municipality of Culaba, subprovince of Biliran,
Leyte del Norte, Philippines, hereby depose and say:

That as we live[d] together as husband and wife with Juan Arcillas, we begot
children, namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all
surnamed ARCILLAS, and by reason of poverty which I suffered while our
children were still young; and because my husband Juan Arcillas aware as he was
with our destitution separated us [sic] and left for Cebu; and from then on never
cared what happened to his family; and because of that one EUFRACIA
RODRIGUEZ, one of my nieces who also suffered with our poverty, obedient as
she was to all the works in our house, and because of the love and affection which
I feel [for] her, I have one parcel of land located at Sitio Amambajag, Culaba,
Leyte bearing Tax Decl. No. 1878 declared in the name of Alvegia Rodrigo, I give
(devise) said land in favor of EUFRACIA RODRIGUEZ, her heirs, successors,
and assigns together with all the improvements existing thereon, which parcel of
land is more or less described and bounded as follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo
Uyvico; and West, by Public land; 2. It has an area of 3,492 square meters more or
less; 3. It is planted to coconuts now bearing fruits; 4. Having an assessed value of
₱240.00; 5. It is now in the possession of EUFRACIA RODRIGUEZ since May
21, 1962 in the concept of an owner, but the Deed of Donation or that ownership
be vested on her upon my demise.

That I FURTHER DECLARE, and I reiterate that the land above described, I
already devise in favor of EUFRACIA RODRIGUEZ since May 21, 1962, her
heirs, assigns, and that if the herein Donee predeceases me, the same land will not
be reverted to the Donor, but will be inherited by the heirs of EUFRACIA
RODRIGUEZ;

That I EUFRACIA RODRIGUEZ, hereby accept the land above described from
Inay Alvegia Rodrigo and I am much grateful to her and praying further for a
longer life; however, I will give one half (1/2) of the produce of the land to Apoy
Alve during her lifetime.4

Respondents entered the Property in 1983 and paid taxes afterwards.

The Ruling of the Trial Court

The trial court ruled for petitioner, declared him owner of the Property, and
ordered respondents to surrender possession to petitioner, and to pay damages, the
value of the Property’s produce since 1982 until petitioner’s repossession and the
costs.5 The trial court rejected respondents’ claim of ownership after treating the
Deed as a donation mortis causa which Rodrigo effectively cancelled by selling
the Property to Vere in 1970.6 Thus, by the time Rodriguez sold the Property to
respondents in 1983, she had no title to transfer.

Respondents appealed to the Court of Appeals (CA), imputing error in the trial
court’s interpretation of the Deed as a testamentary disposition instead of an inter
vivos donation, passing title to Rodriguez upon its execution.

Ruling of the Court of Appeals

The CA granted respondents’ appeal and set aside the trial court’s ruling. While
conceding that the "language of the [Deed is] x x x confusing and which could
admit of possible different interpretations,"7 the CA found the following factors
pivotal to its reading of the Deed as donation inter vivos: (1) Rodriguez had been in
possession of the Property as owner since 21 May 1962, subject to the delivery of
part of the produce to Apoy Alve; (2) the Deed’s consideration was not Rodrigo’s
death but her "love and affection" for Rodriguez, considering the services the latter
rendered; (3) Rodrigo waived dominion over the Property in case Rodriguez
predeceases her, implying its inclusion in Rodriguez’s estate; and (4) Rodriguez
accepted the donation in the Deed itself, an act necessary to effectuate
donations inter vivos, not devises.8 Accordingly, the CA upheld the sale between
Rodriguez and respondents, and, conversely found the sale between Rodrigo and
petitioner’s predecessor-in-interest, Vere, void for Rodrigo’s lack of title.

In this petition, petitioner seeks the reinstatement of the trial court’s ruling.
Alternatively, petitioner claims ownership over the Property through acquisitive
prescription, having allegedly occupied it for more than 10 years.9

Respondents see no reversible error in the CA’s ruling and pray for its affirmance.

The Issue

The threshold question is whether petitioner’s title over the Property is superior to
respondents’. The resolution of this issue rests, in turn, on whether the contract
between the parties’ predecessors-in-interest, Rodrigo and Rodriguez, was a
donation or a devise. If the former, respondents hold superior title, having bought
the Property from Rodriguez. If the latter, petitioner prevails, having obtained title
from Rodrigo under a deed of sale the execution of which impliedly revoked the
earlier devise to Rodriguez.

The Ruling of the Court

We find respondents’ title superior, and thus, affirm the CA.

Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation

We examine the juridical nature of the Deed – whether it passed title to Rodriguez
upon its execution or is effective only upon Rodrigo’s death – using principles
distilled from relevant jurisprudence. Post-mortem dispositions typically –

(1) Convey no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive;

(2) That before the [donor’s] death, the transfer should be revocable by the
transferor at will, ad nutum; but revocability may be provided for indirectly
 by means of a reserved power in the donor to dispose of the properties
conveyed;

(3) That the transfer should be void if the transferor should survive the
transferee.10

Further –

[4] [T]he specification in a deed of the causes whereby the act may be
revoked by the donor indicates that the donation is inter vivos, rather than a
disposition mortis causa[;]

[5] That the designation of the donation as mortis causa, or a provision in

the deed to the effect that the donation is "to take effect at the death of the
donor" are not controlling criteria; such statements are to be construed
together with the rest of the instrument, in order to give effect to the real
intent of the transferor[;] [and]

(6) That in case of doubt, the conveyance should be deemed donation inter

vivos rather than mortis causa, in order to avoid uncertainty as to the
ownership of the property subject of the deed.11

It is immediately apparent that Rodrigo passed naked title to Rodriguez under a

perfected donation inter vivos. First. Rodrigo stipulated that "if the herein Donee
predeceases me, the [Property] will not be reverted to the Donor, but will be
inherited by the heirs of x x x Rodriguez," signaling the irrevocability of the
passage of title to Rodriguez’s estate, waiving Rodrigo’s right to reclaim title. This
transfer of title was perfected the moment Rodrigo learned of Rodriguez’s
acceptance of the disposition12 which, being reflected in the Deed, took place on
the day of its execution on 3 May 1965. Rodrigo’s acceptance of the transfer
underscores its essence as a gift in presenti, not in futuro, as only donations inter
vivos need acceptance by the recipient.13 Indeed, had Rodrigo wished to retain full
title over the Property, she could have easily stipulated, as the testator did in
another case, that "the donor, may transfer, sell, or encumber to any person or
entity the properties here donated x x x"14 or used words to that effect. Instead,
Rodrigo expressly waived title over the Property in case Rodriguez predeceases
her.

In a bid to diffuse the non-reversion stipulation’s damning effect on his case,

petitioner tries to profit from it, contending it is a fideicommissary substitution
clause.15 Petitioner assumes the fact he is laboring to prove. The question of the
Deed’s juridical nature, whether it is a will or a donation, is the crux of the present
controversy. By treating the clause in question as mandating fideicommissary
substitution, a mode of testamentary disposition by which the first heir instituted is
entrusted with the obligation to preserve and to transmit to a second heir the whole
or part of the inheritance,16 petitioner assumes that the Deed is a will. Neither the
Deed’s text nor the import of the contested clause supports petitioner’s theory.

Second. What Rodrigo reserved for herself was only the beneficial title to the
Property, evident from Rodriguez’s undertaking to "give one [half] x x x of the
produce of the land to Apoy Alve during her lifetime."17 Thus, the Deed’s
stipulation that "the ownership shall be vested on [Rodriguez] upon my demise,"
taking into account the non-reversion clause, could only refer to Rodrigo’s
beneficial title. We arrived at the same conclusion in Balaqui v. Dongso18 where, as
here, the donor, while "b[inding] herself to answer to the [donor] and her heirs x x
x that none shall question or disturb [the donee’s] right," also stipulated that the
donation "does not pass title to [the donee] during my lifetime; but when I die, [the
donee] shall be the true owner" of the donated parcels of land. In finding the
disposition as a gift inter vivos, the Court reasoned:

Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the
donor] guaranteed to [the donee] and her heirs and successors, the right to said
property thus conferred. From the moment [the donor] guaranteed the right granted
by her to [the donee] to the two parcels of land by virtue of the deed of gift, she
surrendered such right; otherwise there would be no need to guarantee said right.
Therefore, when [the donor] used the words upon which the appellants base their
contention that the gift in question is a donation mortis causa [that the gift "does
not pass title during my lifetime; but when I die, she shall be the true owner of the
two aforementioned parcels"] the donor meant nothing else than that she
reserved of herself the possession and usufruct of said two parcels of land until
her death, at which time the donee would be able to dispose of them
freely.19 (Emphasis supplied)

Indeed, if Rodrigo still retained full ownership over the Property, it was
unnecessary for her to reserve partial usufructuary right over it.20

Third. The existence of consideration other than the donor’s death, such as the
donor’s love and affection to the donee and the services the latter rendered, while
also true of devises, nevertheless "corroborates the express irrevocability of x x x
[inter vivos] transfers."21 Thus, the CA committed no error in giving weight to
Rodrigo’s statement of "love and affection" for Rodriguez, her niece, as
consideration for the gift, to underscore its finding.

It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed
tending to serve his cause (e.g. "the ownership shall be vested on [Rodriguez] upon
my demise" and "devise"). Dispositions bearing contradictory stipulations are
interpreted wholistically, to give effect to the donor’s intent. In no less than seven
cases featuring deeds of donations styled as "mortis causa" dispositions, the Court,
after going over the deeds, eventually considered the transfers inter
vivos,22 consistent with the principle that "the designation of the donation as mortis
causa, or a provision in the deed to the effect that the donation is ‘to take effect at
the death of the donor’ are not controlling criteria [but] x x x are to be construed
together with the rest of the instrument, in order to give effect to the real intent of
the transferor."23 Indeed, doubts on the nature of dispositions are resolved to
favor inter vivos transfers "to avoid uncertainty as to the ownership of the property
subject of the deed."24

Nor can petitioner capitalize on Rodrigo’s post-donation transfer of the Property to

Vere as proof of her retention of ownership. If such were the barometer in
interpreting deeds of donation, not only will great legal uncertainty be visited on
gratuitous dispositions, this will give license to rogue property owners to set at
naught perfected transfers of titles, which, while founded on liberality, is a valid
mode of passing ownership. The interest of settled property dispositions counsels
against licensing such practice.25

Accordingly, having irrevocably transferred naked title over the Property to

Rodriguez in 1965, Rodrigo "cannot afterwards revoke the donation nor dispose of
the said property in favor of another."26 Thus, Rodrigo’s post-donation sale of the
Property vested no title to Vere. As Vere’s successor-in-interest, petitioner
acquired no better right than him. On the other hand, respondents bought the
Property from Rodriguez, thus acquiring the latter’s title which they may invoke
against all adverse claimants, including petitioner.

Petitioner Acquired No Title Over the Property

Alternatively, petitioner grounds his claim of ownership over the Property through
his and Vere’s combined possession of the Property for more than ten years,
counted from Vere’s purchase of the Property from Rodrigo in 1970 until
petitioner initiated his suit in the trial court in February 1986.27 Petitioner anchors
his contention on an unfounded legal assumption. The ten year ordinary
prescriptive period to acquire title through possession of real property in the
concept of an owner requires uninterrupted possession coupled with just
title and good faith.28 There is just title when the adverse claimant came into
possession of the property through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor was not the owner or
could not transmit any right.29 Good faith, on the other hand, consists in the
reasonable belief that the person from whom the possessor received the thing was
the owner thereof, and could transmit his ownership.30

Although Vere and petitioner arguably had just title having successively acquired
the Property through sale, neither was a good faith possessor. As Rodrigo herself
disclosed in the Deed, Rodriguez already occupied and possessed the Property "in
the concept of an owner" ("como tag-iya"31) since 21 May 1962, nearly three years
before Rodrigo’s donation in 3 May 1965 and seven years before Vere bought the
Property from Rodrigo. This admission against interest binds Rodrigo and all those
tracing title to the Property through her, including Vere and petitioner. Indeed,
petitioner’s insistent claim that Rodriguez occupied the Property only in 1982,
when she started paying taxes, finds no basis in the records. In short, when Vere
bought the Property from Rodrigo in 1970, Rodriguez was in possession of the
Property, a fact that prevented Vere from being a buyer in good faith.

Lacking good faith possession, petitioner’s only other recourse to maintain his
claim of ownership by prescription is to show open, continuous and adverse
possession of the Property for 30 years.32 Undeniably, petitioner is unable to meet
this requirement.1avvphil

Ancillary Matters Petitioner Raises Irrelevant

Petitioner brings to the Court’s attention facts which, according to him, support his
theory that Rodrigo never passed ownership over the Property to Rodriguez,
namely, that Rodriguez registered the Deed and paid taxes on the Property only in
1982 and Rodriguez obtained from Vere in 1981 a waiver of the latter’s "right of
ownership" over the Property. None of these facts detract from our conclusion that
under the text of the Deed and based on the contemporaneous acts of Rodrigo and
Rodriguez, the latter, already in possession of the Property since 1962 as Rodrigo
admitted, obtained naked title over it upon the Deed’s execution in 1965. Neither
registration nor tax payment is required to perfect donations. On the relevance of
the waiver agreement, suffice it to say that Vere had nothing to waive to
Rodriguez, having obtained no title from Rodrigo. Irrespective of Rodriguez’s
motivation in obtaining the waiver, that document, legally a scrap of paper, added
nothing to the title Rodriguez obtained from Rodrigo under the Deed.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June

2005 and the Resolution dated 5 May 2006 of the Court of Appeals.

SO ORDERED.

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA

PALACIOS, Administratrix, petitioner-appellee,
vs.
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and
ROBERTO RAMIREZ, legatees, oppositors- appellants.

ABAD SANTOS, J.:

The main issue in this appeal is the manner of partitioning the testate estate of Jose
Eugenio Ramirez among the principal beneficiaries, namely: his widow Marcelle
Demoron de Ramirez; his two grandnephews Roberto and Jorge Ramirez; and his
companion Wanda de Wrobleski.

The task is not trouble-free because the widow Marcelle is a French who lives in
Paris, while the companion Wanda is an Austrian who lives in Spain. Moreover,
the testator provided for substitutions.

Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 1964,
with only his widow as compulsory heir. His will was admitted to probate by the
Court of First Instance of Manila, Branch X, on July 27, 1965. Maria Luisa
Palacios was appointed administratrix of the estate. In due time she submitted an
inventory of the estate as follows:
 INVENTARIO

Una sexta parte (1/6) proindiviso de un te

rreno, con sus mejoras y edificaciones, situadoen

la Escolta, Manila............................................................. P500,000.00

Una sexta parte (1/6) proindiviso de dos

parcelas de terreno situadas en Antipolo, Rizal................... 658.34

Cuatrocientos noventa y uno (491) acciones

de la 'Central Azucarera de la Carlota a P17.00

por accion ................................................................................8,347.00

Diez mil ochocientos seize (10,806) acciones

de la 'Central Luzon Milling Co.', disuelta y en

liquidacion a P0.15 por accion ..............................................1,620.90

Cuenta de Ahorros en el Philippine Trust

Co..............................................................................................
2,350.73

TOTAL..............................................................
P512,976.97

MENOS:

Deuda al Banco de las Islas Filipinas, garan-

tizada con prenda de las acciones de La Carlota ......... P 5,000,00

VALOR LIQUIDO...........................................
P507,976.97

The testamentary dispositions are as follows:

 A.—En nuda propiedad, a D. Roberto y D. Jorge Ramirez, ambas
menores de edad, residentes en Manila, I.F., calle 'Alright, No. 1818,
Malate, hijos de su sobrino D. Jose Ma. Ramirez, con sustitucion
vulgar a favor de sus respectivos descendientes, y, en su defecto, con
sustitucion vulgar reciprocal entre ambos.

El precedente legado en nuda propiedad de la participacion indivisa de

la finca Santa Cruz Building, lo ordena el testador a favor de los
legatarios nombrados, en atencion a que dicha propiedad fue creacion
del querido padre del otorgante y por ser aquellos continuadores del
apellido Ramirez,

B.—Y en usufructo a saber: —

a. En cuanto a una tercera parte, a favor de la esposa del testador, Da.

Marcelle Ramirez, domiciliada en IE PECO, calle del General
Gallieni No. 33, Seine Francia, con sustitucion vulgar u fideicomisaria
a favor de Da. Wanda de Wrobleski, de Palma de Mallorca, Son
Rapina Avenida de los Reyes 13,

b.—Y en cuanto a las dos terceras partes restantes, a favor de la

nombrada Da. Wanda de Nrobleski con sustitucion vulgar v
fideicomisaria a saber:—

En cuanto a la mitad de dichas dos terceras partes, a favor de D. Juan

Pablo Jankowski, de Son Rapina Palma de Mallorca; y encuanto a la
mitad restante, a favor de su sobrino, D. Horace V. Ramirez, San Luis
Building, Florida St. Ermita, Manila, I.F.

A pesar de las sustituciones fideiconiisarias precedentemente

ordinadas, las usufiructuarias nombradas conjuntamente con los nudo
propietarios, podran en cualquier memento vender a tercero los bienes
objeto delegado, sin intervencion alguna de los titulares
fideicomisaarios.

On June 23, 1966, the administratrix submitted a project of partition as follows: the
property of the deceased is to be divided into two parts. One part shall go to the
widow 'en pleno dominio" in satisfaction of her legitime; the other part or "free
portion" shall go to Jorge and Roberto Ramirez "en nuda propriedad."
Furthermore, one third (1/3) of the free portion is charged with the widow's
usufruct and the remaining two-thirds (2/3) with a usufruct in favor of Wanda.
Jorge and Roberto opposed the project of partition on the grounds: (a) that the
provisions for vulgar substitution in favor of Wanda de Wrobleski with respect to
the widow's usufruct and in favor of Juan Pablo Jankowski and Horacio V.
Ramirez, with respect to Wanda's usufruct are invalid because the first heirs
Marcelle and Wanda) survived the testator; (b) that the provisions for
fideicommissary substitutions are also invalid because the first heirs are not related
to the second heirs or substitutes within the first degree, as provided in Article 863
of the Civil Code; (c) that the grant of a usufruct over real property in the
Philippines in favor of Wanda Wrobleski, who is an alien, violates Section 5,
Article III of the Philippine Constitution; and that (d) the proposed partition of the
testator's interest in the Santa Cruz (Escolta) Building between the widow Marcelle
and the appellants, violates the testator's express win to give this property to them
Nonetheless, the lower court approved the project of partition in its order dated
May 3, 1967. It is this order which Jorge and Roberto have appealed to this Court.

1. The widow's legitime.

The appellant's do not question the legality of giving Marcelle one-half of the
estate in full ownership. They admit that the testator's dispositions impaired his
widow's legitime. Indeed, under Art. 900 of the Civil Code "If the only survivor is
the widow or widower, she or he shall be entitled to one-half of the hereditary
estate." And since Marcelle alone survived the deceased, she is entitled to one-half
of his estate over which he could impose no burden, encumbrance, condition or
substitution of any kind whatsoever. (Art. 904, par. 2, Civil Code.)

It is the one-third usufruct over the free portion which the appellants question and
justifiably so. It appears that the court a quo approved the usufruct in favor of
Marcelle because the testament provides for a usufruct in her favor of one-third of
the estate. The court a quo erred for Marcelle who is entitled to one-half of the
estate "en pleno dominio" as her legitime and which is more than what she is given
under the will is not entitled to have any additional share in the estate. To give
Marcelle more than her legitime will run counter to the testator's intention for as
stated above his dispositions even impaired her legitime and tended to favor
Wanda.

2. The substitutions.

It may be useful to recall that "Substitution is the appoint- judgment of another heir
so that he may enter into the inheritance in default of the heir originally instituted."
(Art. 857, Civil Code. And that there are several kinds of substitutions, namely:
simple or common, brief or compendious, reciprocal, and fideicommissary (Art.
858, Civil Code.) According to Tolentino, "Although the Code enumerates four
classes, there are really only two principal classes of substitutions: the simple and
the fideicommissary. The others are merely variations of these two." (111 Civil
Code, p. 185 [1973].)

The simple or vulgar is that provided in Art. 859 of the Civil Code which reads:

ART. 859. The testator may designate one or more persons to

substitute the heir or heirs instituted in case such heir or heirs should
die before him, or should not wish, or should be incapacitated to
accept the inheritance.

A simple substitution, without a statement of the cases to which it

refers, shall comprise the three mentioned in the preceding paragraph,
unless the testator has otherwise provided.

The fideicommissary substitution is described in the Civil Code as follows:

ART. 863. A fideicommissary substitution by virtue of which the

fiduciary or first heir instituted is entrusted with the obligation to
preserve and to transmit to a second heir the whole or part of
inheritance, shall be valid and shall take effect, provided such
substitution does not go beyond one degree from the heir originally
instituted, and provided further that the fiduciary or first heir and the
second heir are living at time of the death of the testator.

It will be noted that the testator provided for a vulgar substitution in respect of the
legacies of Roberto and Jorge Ramirez, the appellants, thus: con sustitucion vulgar
a favor de sus respectivos descendientes, y, en su defecto, con substitution vulgar
reciprocal entre ambos.

The appellants do not question the legality of the substitution so provided. The
appellants question the sustitucion vulgar y fideicomisaria a favor de Da. Wanda
de Wrobleski" in connection with the one-third usufruct over the estate given to the
widow Marcelle However, this question has become moot because as We have
ruled above, the widow is not entitled to any usufruct.

The appellants also question the sustitucion vulgar y fideicomisaria in connection

with Wanda's usufruct over two thirds of the estate in favor of Juan Pablo
Jankowski and Horace v. Ramirez.
They allege that the substitution in its vulgar aspect as void because Wanda
survived the testator or stated differently because she did not predecease the
testator. But dying before the testator is not the only case for vulgar substitution for
it also includes refusal or incapacity to accept the inheritance as provided in Art.
859 of the Civil Code, supra. Hence, the vulgar substitution is valid.

As regards the substitution in its fideicommissary aspect, the appellants are correct
in their claim that it is void for the following reasons:

(a) The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related
to Wanda, the heir originally instituted. Art. 863 of the Civil Code validates a
fideicommissary substitution "provided such substitution does not go beyond one
degree from the heir originally instituted."

What is meant by "one degree" from the first heir is explained by Tolentino as
follows:

Scaevola Maura, and Traviesas construe "degree" as designation,

substitution, or transmission. The Supreme Court of Spain has
decidedly adopted this construction. From this point of view, there can
be only one tranmission or substitution, and the substitute need not be
related to the first heir. Manresa, Morell and Sanchez Roman,
however, construe the word "degree" as generation, and the present
Code has obviously followed this interpretation. by providing that the
substitution shall not go beyond one degree "from the heir originally
instituted." The Code thus clearly indicates that the second heir must
be related to and be one generation from the first heir.

From this, it follows that the fideicommissary can only be either a

child or a parent of the first heir. These are the only relatives who are
one generation or degree from the fiduciary (Op. cit., pp. 193-194.)

(b) There is no absolute duty imposed on Wanda to transmit the usufruct to the
substitutes as required by Arts. 865 and 867 of the Civil Code. In fact, the appellee
admits "that the testator contradicts the establishment of a fideicommissary
substitution when he permits the properties subject of the usufruct to be sold upon
mutual agreement of the usufructuaries and the naked owners." (Brief, p. 26.)

3. The usufruct of Wanda.

The appellants claim that the usufruct over real properties of the estate in favor of
Wanda is void because it violates the constitutional prohibition against the
acquisition of lands by aliens.

The 1935 Constitution which is controlling provides as follows:

SEC. 5. Save in cases of hereditary succession, no private agricultural

land shall be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines. (Art. XIII.)

The court a quo upheld the validity of the usufruct given to Wanda on the ground
that the Constitution covers not only succession by operation of law but also
testamentary succession. We are of the opinion that the Constitutional provision
which enables aliens to acquire private lands does not extend to testamentary
succession for otherwise the prohibition will be for naught and meaningless. Any
alien would be able to circumvent the prohibition by paying money to a Philippine
landowner in exchange for a devise of a piece of land.

This opinion notwithstanding, We uphold the usufruct in favor of Wanda because a

usufruct, albeit a real right, does not vest title to the land in the usufructuary and it
is the vesting of title to land in favor of aliens which is proscribed by the
Constitution.

IN VIEW OF THE FOREGOING, the estate of Jose Eugenio Ramirez is hereby

ordered distributed as follows:

One-half (1/2) thereof to his widow as her legitime;

One-half (1/2) thereof which is the free portion to Roberto and Jorge Ramirez in
naked ownership and the usufruct to Wanda de Wrobleski with a simple
substitution in favor of Juan Pablo Jankowski and Horace V. Ramirez.

The distribution herein ordered supersedes that of the court a quo. No special
pronouncement as to costs.

SO ORDERED.
MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S.
CABATINGAN, petitioners,
vs.
THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA,
PERLA M. ABELLA, ESTRELLA M. CAÑETE, LOURDES M. YUSON,
and JULIA L. MAYOL, HEIRS OF GENOVIVA C. NATIVIDAD namely,
OSCAR C. NATIVIDAD, OLGA NATIVIDAD, ODETTE NATIVIDAD,
OPHELIA NATIVIDAD, RICHARD NATIVIDAD, RAYMUND
NATIVIDAD, RICHIE NATIVIDAD, SONIA NATIVIDAD and
ENCARNACION CABATINGAN VDA. DE TRINIDAD, ALFREDO
CABATINGAN and JESUSA C. NAVADA, respondents.

AUSTRIA-MARTINEZ, J.:

Posed for resolution before the Court in this petition for review on certiorari filed
under Rule 45 of the Rules of Court is the sole issue of whether the donations
made by the late Conchita Cabatingan are donations inter vivos or mortis causa.

The facts of the case are as follows:

On February 17, 1992, Conchita Cabatingan executed in favor of her brother,

petitioner Nicolas Cabatingan, a "Deed of Conditional of Donation (sic) Inter
Vivos for House and Lot" covering one-half (½) portion of the former's house and
lot located at Cot-cot, Liloan, Cebu.1 Four (4) other deeds of donation were
subsequently executed by Conchita Cabatingan on January 14, 1995, bestowing
upon: (a) petitioner Estela C. Maglasang, two (2) parcels of land - one located in
Cogon, Cebu (307 sq. m.) and the other, a portion of a parcel of land in Masbate
(50,232 sq. m.); (b) petitioner Nicolas Cabatingan, a portion of a parcel of land
located in Masbate (80,000 sq. m.); and (c) petitioner Merly S. Cabatingan, a
portion of the Masbate property (80,000 sq. m.).2 These deeds of donation contain
similar provisions, to wit:

"That for and in consideration of the love and affection of the DONOR for
the DONEE, x x x the DONOR does hereby, by these presents, transfer,
convey, by way of donation, unto the DONEE the above-described property,
 together with the buildings and all improvements existing thereon, to
become effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die before the
DONOR, the present donation shall be deemed automatically rescinded
and of no further force and effect; x x x"3 (Emphasis Ours)

On May 9, 1995, Conchita Cabatingan died.

Upon learning of the existence of the foregoing donations, respondents filed with
the Regional Trial Court of Mandaue, Branch 55, an action for Annulment And/Or
Declaration of Nullity of Deeds of Donations and Accounting, docketed as Civil
Case No. MAN-2599, seeking the annulment of said four (4) deeds of donation
executed on January 14, 1995. Respondents allege, inter alia, that petitioners,
through their sinister machinations and strategies and taking advantage of Conchita
Cabatingan's fragile condition, caused the execution of the deeds of donation, and,
that the documents are void for failing to comply with the provisions of the Civil
Code regarding formalities of wills and testaments, considering that these are
donations mortis causa.4 Respondents prayed that a receiver be appointed in order
to preserve the disputed properties, and, that they be declared as co-owners of the
properties in equal shares, together with petitioner Nicolas Cabatingan.5

Petitioners in their Amended Answer, deny respondents' allegations contending

that Conchita Cabatingan freely, knowingly and voluntarily caused the preparation
of the instruments.6

On respondents' motion, the court a quo rendered a partial judgment on the

pleadings on December 2, 1997 in favor of respondents, with the following
dispositive portion:

"WHEREREFORE, and in consideration of all the foregoing, judgment is

hereby rendered in favor of the plaintiffs and against the defendant and
unwilling co-plaintiff with regards (sic) to the four Deeds of Donation
Annexes "A", "A-1", "B" and Annex "C" which is the subject of this partial
decision by:

Declaring the four Deeds of Donation as null and void ab initio for
being a donation Mortis Causa and for failure to comply with formal
and solemn requisite under Art. 806 of the New Civil Code;

b) To declare the plaintiffs and defendants as well as unwilling co-

plaintiff as the heirs of the deceased Conchita Cabatingan and
 therefore hereditary co-owners of the properties subject of this partial
decision, as mandated under Art. 777 of the New Civil Code;

SO ORDERED."7

The court a quo ruled that the donations are donations mortis causa and therefore
the four (4) deeds in question executed on January 14, 1995 are null and void for
failure to comply with the requisites of Article 806 of the Civil Code on
solemnities of wills and testaments.8

Raising questions of law, petitioners elevated the court a quo's decision to this
Court,9 alleging that:

"THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-

WELL-ESTABLISHED RULINGS OF THIS HONORABLE SUPREME
COURT ON THE CHARACTERIZATION OF DONATIONS AS INTER
VIVOS OR MORTIS CAUSA AND, INSTEAD, PROCEEDED TO
INTERPRET THE DONATIONS IN QUESTION IN A MANNER
CONTRARY THERETO."10

Petitioners insist that the donations are inter vivos donations as these were made by
the late Conchita Cabatingan "in consideration of the love and affection of the
donor" for the donee, and there is nothing in the deeds which indicate that the
donations were made in consideration of Cabatingan's death.11 In addition,
petitioners contend that the stipulation on rescission in case petitioners die ahead of
Cabatingan is a resolutory condition that confirms the nature of the donation
as inter vivos.

Petitioners' arguments are bereft of merit.

In a donation mortis causa, "the right of disposition is not transferred to the donee

while the donor is still alive."12 In determining whether a donation is one of mortis
causa, the following characteristics must be taken into account:

(1) It conveys no title or ownership to the transferee before the death of the
transferor; or what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive;

(2) That before his death, the transfer should be revocable by the transferor
at will, ad nutum; but revocability may be provided for indirectly by means
of a reserved power in the donor to dispose of the properties conveyed;
 and

(3) That the transfer should be void if the transferor should survive the
transferee.13

In the present case, the nature of the donations as mortis causa is confirmed by the
fact that the donations do not contain any clear provision that intends to pass
proprietary rights to petitioners prior to Cabatingan's death.14 The phrase "to
become effective upon the death of the DONOR" admits of no other interpretation
but that Cabatingan did not intend to transfer the ownership of the properties to
petitioners during her lifetime. Petitioners themselves expressly confirmed the
donations as mortis causa in the following Acceptance and Attestation clauses,
uniformly found in the subject deeds of donation, to wit:

"That the DONEE does hereby accept the foregoing donation mortis causa
under the terms and conditions set forth therein, and avail herself of this
occasion to express her profound gratitude for the kindness and generosity of
the DONOR."

xxx

"SIGNED by the above-named DONOR and DONEE at the foot of this

Deed of Donation mortis causa, which consists of two (2) pages x x x."15

That the donations were made "in consideration of the love and affection of the
donor" does not qualify the donations as inter vivos because transfers mortis
causa may also be made for the same reason.16

Well in point is National Treasurer of the Phils. v. Vda. de Meimban.17 In said

case, the questioned donation contained the provision:

"That for and in consideration of the love and affection which the DONOR
has for the DONEE, the said Donor by these presents does hereby give,
transfer, and convey unto the DONEE, her heirs and assigns a portion of
ONE HUNDRED THOUSAND (100,000) SQUARE METERS, on the
southeastern part Pro-indiviso of the above described property. (The portion
herein donated is within Lot 2-B of the proposed amendment Plan
Subdivision of Lots Nos. 1 and 2, Psu-109393), with all the buildings and
improvements thereon, to become effective upon the death of the DONOR.
(italics supplied.)"18
Notably, the foregoing provision is similar to that contained in the donation
executed by Cabatingan. We held in Meimban case that the donation is a mortis
causa donation, and that the above quoted provision establishes the donor's
intention to transfer the ownership and possession of the donated property to the
donee only after the former's death. Further:

"As the donation is in the nature of a mortis causa disposition, the

formalities of a will should have been complied with under Article 728 of
the Civil Code, otherwise, the donation is void and would produce no effect.
As we have held in Alejandro v. Geraldez (78 SCRA 245,253), "If the
donation is made in contemplation of the donor's death, meaning that the full
or naked ownership of the donated properties will pass to the donee because
of the donor's death, then it is at that time that the donation takes effect, and
it is a donation mortis causa which should be embodied in a last will and
testament. (Citing Bonsato v. Court of Appeals, 95 Phil. 481)."19

We apply the above rulings to the present case. The herein subject deeds expressly
provide that the donation shall be rescinded in case petitioners predecease Conchita
Cabatingan. As stated in Reyes v. Mosqueda,20 one of the decisive characteristics
of a donation mortis causa is that the transfer should be considered void if the
donor should survive the donee. This is exactly what Cabatingan provided for in
her donations. If she really intended that the donation should take effect during her
lifetime and that the ownership of the properties donated be transferred to the
donee or independently of, and not by reason of her death, she would have not
expressed such proviso in the subject deeds.1âwphi1.nêt

Considering that the disputed donations are donations mortis causa, the same
partake of the nature of testamentary provisions21 and as such, said deeds must be
executed in accordance with the requisites on solemnities of wills and testaments
under Articles 805 and 806 of the Civil Code, to wit:

"ART. 805. Every will, other than a holographic will, must be subscribed at
the end thereof by the testator himself or by the testator's name written by
some other person in his presence, and by his express direction, and attested
and subscribed by three or more credible witnesses in the presence of the
testator and of one another.

The testator or the person requested by him to write his name and the
instrumental witnesses of the will, shall also sign, as aforesaid, each and
 every page thereof, except the last, on the left margin, and all the pages shall
be numbered correlatively in letters placed on the upper part of each page.

The attestation shall state the number of pages used upon which the will is
written , and the fact that the testator signed the will and every page thereof,
or caused some other person to write his name, under his express direction,
in the presence of the instrumental witnesses, and that the latter witnessed
and signed the will and all the pages thereof in the presence of the testator
and of one another.

If the attestation clause is in a language not known to the witnesses, it shall

be interpreted to them. (n)

ART. 806. Every will must be acknowledged before a notary public by the
testator and the witnesses. The notary public shall not be required to retain a
copy of the will, or file another with the office of the Clerk of Court. (n)"

The deeds in question although acknowledged before a notary public of the donor
and the donee, the documents were not executed in the manner provided for under
the above-quoted provisions of law.

Thus, the trial court did not commit any reversible error in declaring the subject
deeds of donation null and void.

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.

RUFINA BONDAD, ET AL., plaintiffs-appellants,

vs.
VENANCIO BONDAD, ET AL., defendants-appellees.
Modesto Reyes for appellants.
Pedro Guevara for appellees.

ARELLANO, C. J.:

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

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

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

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

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

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

(3) That, in the case at bar, defendants admit that the real property, specified in the
complaint under the letters (a), (d), (e), (h), (i), and (j), was derived from that
source, but allege that it was equitably and proportionally partitioned between the
plaintiff and the defendants in 1903.
(4) That they deny that the parcels of land B, C, F, and G belonged to the intestate
estate of the predecessor-in-interest, Crisanto Bondad, and were derived from this
latter, wherefore it is incumbent upon the plaintiff, and not upon the defendants, to
prove such ownership; and that without this proof the defendants cannot be
disturbed in their possession.

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

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

(7) That the plaintiff, in describing under letter (h) in her complaint the coconut
land planted with 200 fruit-bearing coconut trees, says in regard to its boundaries:
"On the south, by the land of the late Crisanto Bondad, now in the possession
of Rufina Bondad . . . " She says that she has been in possession was only acquired
by adjudication; and that the adjudication was the result of a partition.
It can be shown, as the lower court found, that the partition has already been made.
In the decision rendered in the case of Ilustre vs. Alaras Frondosa (17 Phil. Rep.,
321), this court said:

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

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

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

If, at the present time or in the future, some creditor should come forward with a
claim, or if debts of either or both of the two intestate estates should appear,
prescription after two years could not be set up against such creditors or against
such debts, because the date from which the beginning of the two years should be
counted, could not be determined. This is the risk that is incurred in a partition of
these intestate estates and hence the need of making the partition in writing, that is,
so that it would not prejudice any third person; but among themselves the heirs
must abide by the terms upon which they have agreed.
There is however one fact in the record which has not been wholly explained and
which forms the fifth error assigned by appellant, to wit, that relative to the land
designated under letter (b) in the complaint. The lower court decided that this land,
planted with 300 coconut trees, belonged to Venancio Bondad inasmuch as he
proved its purchase by the document Exhibit 2. Venancio Bondad maintains that he
purchased it of Emilia del Rosario on September 30, 1907. But it is shown that on
August 26, 1911, Emilia del Rosario, the surviving widow, executed the document
Exhibit D, in which she sets forth that she delivered the possession and right of
enjoyment of apparently the same land to Venancio Bondad, Placido Bondad,
Maria Bondad, and Rufina Bondad, and that in exchange for it they paid her the
sum of P110.

This document, if authentic, as it appears to be, having been confirmed by the

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

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

ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC.,

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

Adriano T. de la Cruz for appellants.

Simeon Bitanga for appellees.

VILLA-REAL, J.:

This case is before us by virtue of an appeal taken by the defendants Conchita

McLachlin, Lorenzo Quitco, Jr., Sabina Quitco, Rafael Quitco and Marcela Quitco,
from the decision of the Court of First Instance of Occidental Negros, the
dispositive part of which reads:

For the foregoing considerations, the court renders judgment in this case
declaring Ana Quitco Ledesma an acknowledged natural daughter of the
deceased Lorenzo M. Quitco, for legal purposes, but absolving the
defendants as to the prayer in the first cause of action that the said Ana
Quitco Ledesma be declared entitled to share in the properties left by the
deceased Eusebio Quitco.

As to the second cause of action, the said defendants are ordered to pay to
the plaintiff Socorro Ledesma, jointly and severally, only the sum of one
thousand five hundred pesos(P1,500), with legal interest thereon from the
filing of this complaint until fully paid. No pronouncement is made as to the
costs. So ordered.

In support of their appeal, the appellants assign the following errors allegedly
committed by the trial court in its aforesaid decision:

1. That the trial court erred in holding, that the action for the recovery of the
sum of P1,500, representing the last installment of the note Exhibit C has not
yet prescribed.
 2. That the trial court erred in holding that the property inherited by the
defendants from their deceased grandfather by the right of representation is
subject to the debts and obligations of their deceased father who died
without any property whatsoever.lawphi1.net

3. That the trial court erred in condemning the defendants to pay jointly and
severally the plaintiff Socorro Ledesma the sum of P1,500.

The only facts to be considered in the determination of the legal questions raised in
this appeal are those set out in the appealed decision, which have been established
at the trial, namely:

In the year 1916, the plaintiff Socorro Ledesma lived maritally with Lorenzo
M. Quitco, while the latter was still single, of which relation, lasting until
the year 1921, was born a daughter who is the other plaintiff Ana Quitco
Ledesma. In 1921, it seems hat the relation between Socorro Ledesma and
Lorenzo M. Quitco came to an end, but the latter executed a deed (Exhibit
A), acknowledging the plaintiff Ana Quitco Ledesma as his natural daughter
and on January 21, 1922, he issued in favor of the plaintiff Socorro Ledesma
a promissory note (Exhibit C), of the following tenor:

P2,000. For value received I promise to pay Miss Socorro Ledesma the sum
of two thousand pesos (P2,000). Philippine currency under the following
terms: Two hundred and fifty pesos (P250) to be paid on the first day of
March 1922; another two hundred and fifty pesos (P250)to be paid on the
first day of             November 1922; the remaining one thousand and five
hundred (P1,500) to be paid two years from the date of the execution of this
note. San Enrique, Occ. Negros, P. I., Jan. 21, 1922.

Subsequently, Lorenzo M. Quitco married the defendant Conchita

McLachlin, with whom he had four children, who are the other defendants.
On March 9, 1930, Lorenzo M. Quitco died (Exhibit 5), and, still later, that
is, on December 15, 1932, his father Eusebio Quitco also died, and as the
latter left real and personal properties upon his death, administration
proceedings of said properties were instituted in this court, the said case
being known as the "Intestate of the deceased Eusebio Quitco," civil case
No. 6153 of this court.

Upon the institution of the intestate of the deceased Eusebio Quitco and the
appointment of the committee on claims and appraisal, the plaintiff Socorro
Ledesma, on August 26, 1935, filed before said committee the aforequoted
 promissory note for payment, and the commissioners, upon receipt of said
promissory note, instead of passing upon it, elevated the same to this court
en consulta (Exhibit F), and as the Honorable Jose Lopez Vito, presiding
over the First Branch, returned said consulta and refrained from giving his
opinion thereon (Exhibit C), the aforesaid commissioners on claims and
appraisal, alleging lack of jurisdiction to pass upon the claim, denied he
same (Exhibit H).

On             November 14, 1933 (Exhibit I), the court issued an order of

declaration of heirs in the intestate of the deceased Eusebio Quitco, and as
Ana Quitco Ledesma was not included among the declared heirs, Socorro
Ledesma, as mother of Ana Quitco Ledesma, asked for the reconsideration
of said order, a petition which the court denied. From the order denying the
said petition no appeal was taken, and in lieu thereof there was filed the
complaint which gives rise to this case.

The first question to be decided in this appeal, raised in the first assignment of
alleged error, is whether or not the action to recover the sum of P1,500,
representing the last installment for the payment of the promissory note Exhibit C,
has prescribed.

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

Quitco, on January 21, 1922, the last installment of P1,500 should be paid two
years from the date of the execution of said promissory note, that is, on January 21,
1924. The complaint in the present case was filed on June 26, 1934, that is, more
than ten years after he expiration of the said period. The fact that the plaintiff
Socorro Ledesma filed her claim, on August 26, 1933, with the committee on
claims and appraisal appointed in the intestate of Eusebio Quitco, does not suspend
the running of the prescriptive period of the judicial action for the recovery of said
debt, because the claim for the unpaid balance of the amount of the promissory
note should no have been presented in the intestate of Eusebio Quitco, the said
deceased not being the one who executed the same, but in the intestate of Lorenzo
M. Quitco, which should have been instituted by the said Socorro Ledesma as
provided in section 642 of the Code of Civil Procedure, authorizing a creditor to
institute said case through the appointment of an administrator for the purpose of
collecting his credit. More than ten years having thus elapsed from the expiration
of the period for the payment of said debt of P1,500, the action for its recovery has
prescribed under section 43, No. 1, of the Code of Civil Procedure.

The first assignment of alleged error is, therefore, well-founded.

As to the second assignment of alleged error, consisting in that the trial court erred
in holding that the properties inherited by the defendants from their deceased
grandfather by representation are subject to the payment of debts and obligations
of their deceased father, who died without leaving any property, while it is true that
under the provisions of articles 924 to 927 of the Civil Code, a children presents
his father or mother who died before him in the properties of his grandfather or
grandmother, this right of representation does not make the said child answerable
for the obligations contracted by his deceased father or mother, because, as may be
seen from the provisions of the Code of Civil Procedure referring to partition of
inheritances, the inheritance is received with the benefit of inventory, that is to say,
the heirs only answer with the properties received from their predecessor. The
herein defendants, as heirs of Eusebio Quitco, in representation of their father
Lorenzo M. Quitco, are not bound to pay the indebtedness of their said father from
whom they did not inherit anything.

The second assignment of alleged error is also well-founded.

Being a mere sequel of the first two assignments of alleged errors, the third
assignment of error is also well-founded.

For the foregoing considerations, we are of the opinion and so hold: (1) That the
filing of a claim before the committee on claims and appraisal, appointed in the
intestate of the father, for a monetary obligation contracted by a son who died
before him, does not suspend the prescriptive period of the judicial action for the
recovery of said indebtedness; (2) that the claim for the payment of an
indebtedness contracted by a deceased person cannot be filed for its collection
before the committee on claims and appraisal, appointed in the intestate of his
father, and the propertiesinherited from the latter by the children of said deceased
do not answer for the payment of the indebtedness contracted during the lifetime of
said person.

Wherefore, the appealed judgment is reversed, and the defendants are absolved
from the complaint, with the costs to the appellees. So ordered.
MANUEL BARRIOS Y BARREDO, plaintiff-appellant,
vs.
MARIA PASCUALA DOLOR, ET AL., defendants-appellees.

Simplicio del Rosario, for appellant.

Maria Pascuala Dolor, appellee.

MAPA, J.:

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

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

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

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

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

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

Demonteverde was not a third person with respect to the contract entered into by
him and evidenced by the instrument in question. He not being such a third person,
neither can his heirs be so regarded, nor should they be so regarded with respect to
the same contract, because they are only the judicial continuation of his
personality, they having been subrogated, by virtue of the right of succession, to all
his rights and obligations, in accordance with provisions of article 661 of the Civil
Code.

This doctrine, which is a mere consequence of the general principles of law, has
received express sanction, in the decisions of the supreme court of Spain. In its
judgment of the 27th of January, 1881, the latter held that acts, both in court and
out, consented to by the person who lawfully took part therein, are effective with
respect to the heirs or successors of such parties, who are not be regarded as third
persons for this purpose; and in its judgment of the 28th of January, 1892, it was
decided by the same court that heirs are nothing more than the continuation of the
legal personality of their decedent and can not be considered in any degree as third
persons within the meaning of article 27 of the Mortgage Law.

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

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

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

ORTIGA BROTHERS AND CO., plaintiffs-appellees,

vs.
FRANCISCO ENAGE, sheriff of the Province of Leyte, and YAP
TICO, defendants-appellants.

Chicote and Miranda for appellants.

Jose Ma. de Marcaida for appellees.

TORRES, J.:

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

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

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

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

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

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

A person who, having a claim against a deceased person which should be

considered by the committee does not, after publication of the required notice,
exhibit his claim to the committee as provided by law, shall be barred from
recovering such demand or from pleading the same as an offset to any action,
under the provisions of section 695 of the Code of Civil Procedure, excepting the
case referred to in section 701 of the same; with still less reason can one who is not
a creditor of the said deceased intervene in the proceedings relative to the latter's
intestate estate and to the settlement of his succession (article 1034 of the Civil
Code), because such creditor has no right or interest that call for the protection of
the law and the courts, except in any remainder which may be found due the heirs.
It is true that Yap Tico, as the creditor of the widow and heirs of the deceased
Ildefonso, is entitled to collect what is due him out of the property left by the latter
and which was inherited by such widow and heirs, but it is no less true that only
after all the debts of the said estate have been paid can it be known what net
remainder will be left for division among the heirs, because the debts of the
deceased must be paid before his heirs can inherit. (Arts. 659 et seq., 1026, 1027
and 1032 of the Civil Code, and secs. 734 et seq., Code of Civil Procedure.)

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

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

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

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

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