Kinds of Succession

KINDS OF SUCCESSION
In re estate of the deceased Victoriana Saavedra. MACARIO MACROHON

ONG HAM, administrator-appellant,
vs.
JUAN SAAVEDRA, ET AL., opponents-appellees.
Frank H. Young and Pablo Lorenzo for appellant.

No appearance for appellees.
VILLAMOR, J.:
Macario Macrohon Ong Ham, widower and executor of the joint last will and
testament of Victoriana Saavedra and himself, presented said will for probate,
which was ordered by the Court of First Instance of Zamboanga in its decree of
February 21, 1924.
This executor submitted a scheme of partition and distribution of the property in

accordance with the terms of the joint will, to which Juan Saavedra and others filed
an opposition. The executor rejoined insisting upon the approval of the scheme and
asking that the opposition of Juan Saavedra and others be overruled.
On March 25, 1926, the parties submitted a statement of facts, which reads as
follows:
1. That Victoriana Saavedra died in the municipality and Province of

Zamboanga, P. I., without descendants or ascendants, being at that time
married to Macario Macrohon Ong Ham, both of them having executed a
joint will, which joint will has been duly admitted to probate in this court.
2. That the only near relations of the said Victoriana Saavedra, with the right
to inherit her estate are her brothers Juan and Segundo Saavedra; her
nephews and nieces, Teofilo Saavedra, Manuel Saavedra, Victoriana
Saavedra, Mariano Saavedra, Froilan Saavedra, Josefa Saavedra,
Encarnacion Carpio and Macra Carpio, in case that the said Victoriana
Saavedra died intestate, or did not dispose of her property in said will.
3. That aside from the estate mentioned in the said last will and testament,
duly probated by this Honorable Court, there exist another parcel of land,
acquired by Ong Ham the year 1920, by purchase from Ong Tah, and
adjudicated to the said Ong Ham in Expediente No. 6 (Cadastral).
Lot No. 3057, with the improvements thereon in favor of the persons named
below in the following proportions: Ong Ham, aged 65 years, married to
Victoriana Saavedra, 19/20 parts; Crispulo Macoto Cruz, of legal age, 1/40
part; and Juan Mocoto, 1/40 part.
4. That the interest parties in this proceeding herewith submit to this

Honorable Court the rights of the respective parties in this estate, in
accordance with the terms of this joint last will and testament of the spouses,
Macario Macrohon Ong Ham, and of Victoriana Saavedra, deceased.
5. That the parties representing Macario Macrohon Ong Ham admit that he
sold lots Nos. 34 and 35, of Expediente No. 8196, for the sum of P1,900,
believing in good faith that he could sell the same for his personal uses.
6. That the party representing Juan Saavedra, and the other relations
heretofore named hereby withdraw their opposition which they have
presented to the final account of the surviving spouse, Macario Macrohon
Ong Ham, and conform to the same, and ask that the Court approve the said
final account.
The will referred to in the statement of facts above quoted reads as follows:
That we, Macario Macrohon Ong Ham Victoriana Saavedra, both residing at
San Roque, municipality and Province of Zamboanga, Philippine Islands,
and both of about 70 years of age, realizing that we have but a few more
years to live, and each of us being in the full enjoyment of his intellectual
faculties and not acting by virtue of threats, force or undue influence,
individually and conjointly do hereby make public, declare, and execute this,
our last will and testament, in the following terms:
We hereby declare that we are husband and wife; that we have had no issue,
nor have we adopted children.
We hereby likewise declare that Macario Macrohon Ong Ham is a native of

China, having resided in Zamboanga, Philippine Islands for over 40 years,
and that Victoriana Saavedra is a native of the Philippine Islands.
We furthermore declare that Macario Macrohon Ong Ham has two nephews
at present residing in Zamboanga, Philippine Islands, whom he has always
treated as his own sons, following the custom of Amoy, China, whose names
and ages respectively as follows:
Ong Ka Chiew, residing at San Roque, Zambaoanga, P. I., about 20 years of

age, single, and Ong Ka Jian, also residing at San Roque, Zamboanga, P.I.,
about 18 years of age, single.
We also declare that there are actually registered in our names, as conjugal
property, the following parcels of land located in Zamboanga, P. I., to wit:
Lot No. 838 — A, proceeding 7880, certificate No. 1257

Lot No. 825, proceeding 7880, certificate No. 1783
Lot No. 832, proceeding 7880, same certificate
Lot No. 838 — C, proceeding 7880, certificate No. 1259
Lot No. 831 — B, proceeding 7880, certificate No. 1256
We do hereby agree jointly and individually, that our properties above

described by disposed of in the following manner:lawphi1.net
In case of the death of Macario Macrohon Ong Ham before Victoriana

Saavedra, we hereby order that the properties hereinafter described be jointly
given to Ong Ka Chiew and Ong Ka Jian , and should either of the two die
before Macario Macrohon Ong Ham, we order that all the said properties be
given to the survivor, which properties are described as follows:
Lot No. 831 — B, proceeding 7880, certificate No. 1256
Lot No. 34, proceeding 8196, certificate 4858
In case that Victoriana Saavedra should survive Macario Macrohon Ong

Ham, the lands and properties described below shall belong exclusively to
Victoriana Saavedra, to wit:

Should Victoriana Saavedra die before Macario Macrohon Ong Ham, we

order that lot No. 817-A, proceeding No. 7880, certificate No. 1247, be
adjudicated to Segunda Saavedra, widow, sister of Victoriana Saavedra, free
of all liens and encumbrances.
We further order that all our debts and just obligations, including the
expenses of our last illness and funerals, be paid by Ong Ka Chiew and Ong
Ka Jian.
If any of the legatees named herein should question or in any way attempt to
alter the disposition of any of our several properties, such legatee is to lose
and shall no longer receive the benefits and rights herein specified.
We individually and cojointly declare that the contents of this document

have been read aloud to us in our dialect and that we understand said
contents, this document having been read in the presence of each of us and
in the presence of the witnesses whose names are mentioned further on and
who have signed the present instrument together with ourselves.
In witness whereof, we sign this our last will and testament at Zamboanga,
Zamboanga, Philippine Islands, on this second (2) day of January, 1923.
We, Ong Peh, Ong Chua, and T. Arquiza, do hereby certify that the
foregoing document consisting of five (5) sheets including the present, was
on the date above-mentioned, signed by the testators Macario Macrohon
Ong Ham and Victoriana Saavedra on all its sheets, in our presence at their
request, in their presence, and in the presence of each other we have signed
our names as witnesses on all the sheets of said will.
The lower court solving the question raised by the parties in their agreement of
facts, held that the one-half of the property described in the will, all of lot No.
3057, cadastral case No. 6; one-half of the cash balance of the final account to be
rendered by the executor, and half of the proceeds of the sale of lots No. 34 and 35
of Proceeding No. 8196, belong to Macario Macrohon Ong Ham; and as it appears
from the will quoted, as well as from the agreement dated March 25, 1926, that
Victoriana Saavedra left no legitimate ascendants or descendants at the time of her
death Macario Macrohon Ong Ham, her widower, is, according to the provisions of
articles 837 of the Civil Code, entitled to the usufruct of one-half of the estate of
the said Victoriana Saavedra, consisting of one-half of the property described in
the will, excluding lots No. 817 and 768 of proceeding No. 7880, given to Segunda
Saavedra with the consent of Macario Macrohon Ong Ham; of one-half of the cash
balance of the executor's final account, and of half of the proceeds of the sale of
lots Nos. 34 and 35 in proceeding No. 8196, and said estate is adjudicated as
follows: one-half of the same belongs in usufruct to the widower Macario
Macrohon Ong Ham, and the naked ownership of this half as well as the full
ownership of the other half is adjudicated to Victoriana Saavedra's heirs, named in
the said agreement dated March 25, 1926, in the following manner: sixteenths of
the naked ownership of the one-half in usufruct and sixteenths of the other half in
full ownership, to Juan Saavedra; sixteenths of the naked ownership of the one-half
in usufruct ands sixteenths of the other half in full ownership, to Segunda
Saavedra; and, sixteenths of the naked ownership of the one-half in usufruct and
sixteenths of the other half in full ownership to Teofilo Saavedra, Manuel
Saavedra, Victoriana Saavedra, Mariano Saavedra, Froilan Saavedra and Josefa
Saavedra, children of Mateo Saavedra, deceased brother of Victoriana Saavedra, in
equal parts; and to Encarnacion Carpio and Macra Carpio, daughters of Petrona
Saavedra, deceased sister of Victoriana Saavedra, sixteenths of the naked
ownership of the one-half in usufruct and sixteenths of the other half in full
ownership, in equal parts.
As regards lots Nos. 817 and 768 of proceeding No. 7880, given to Segunda
Saavedra, the court adjudicates the same to the said Segunda Saavedra, in
accordance with the clauses on lines 99-111 of the will.
Finally, the court orders that the executor, after paying the inheritance tax,
distribute among Victoriana Saavedra's heirs named in the agreement of
March 25, 1926, the part belonging to each of them as hereinabove stated,
and after this delivery is made and the inheritance tax, if any, is paid, this
proceeding is to be considered closed ipso facto.
Counsel for the executor appealed from this decision and assigns in his brief the
following alleged errors as committed by the lower court:
I. In holding in its auto, of November 26, 1926, that the deceased, Victoriana

Saavedra, died partially intestate, and did not dispose of all her property by
the joint last will and testament executed by herself and her husband,
Macario Macrohon Ong Ham, and in not finding that under the terms of the
aforesaid joint will the legatees, Ong Ka Chiew and Ong Ka Jian, named
therein, were entitled to receive her estate and participation in the sixteen
parcels of land devised under the said joint will, by the said spouses.
II. In holding that the brother and the sister of Victoriana Saavedra, by name,
Juan Saavedra and Segundo Saavedra; her nephews and nieces, by name,
Teofilo Saavedra, Manuel Saavedra, Victoriana Saavedra, Mariano
Saavedra, Froilan Saavedra, Josefa Saavedra, Encarnacion Carpio and Macra
Carpio, her next of kin were entitled to receive any part of her estate and
participation in the said sixteen parcels of land, devised to the above named
legatees, Ong Ka Chiew and Ong Ka Jian, under the terms of the said joint
last will and testament.
The parts of the will pertinent to the questions raised by the appellant are:
We do agree jointly and individually that our properties above described be

disposed of in the following manner:

Saavedra, we hereby order that the properties hereinafter described given to
Ong Ka Chiew and Ong Ka Jian jointly, and should either of the two die
given to the survivor, which properties are described as follows:
(Here follows a description of 16 of the 19 lots that are also described in the
will as conjugal property of the testator and testatrix.)
In case that Victoriana Saavedra should survive Macario Macrohon Ong

Ham, the lands and properties described below shall belong exclusively to
Victoriana Saavedra, to wit:

Should Victoriana Saavedra die before Macario Macrohon Ong Ham, we

order that lot No. 817 — A, proceeding No. 7880, certificate No. 1247, be
adjudicated to Segunda Saavedra, widow, sister of Victoriana Saavedra, free
of all liens and encumbrances.
We also order that lot No. 768, proceeding No. 7880, certificate No. 1105,
be adjudicated to Segunda Saavedra and her heirs, on condition that she
devote the products of the same to having masses said for the repose of the
soul of Victoriana Saavedra.
In case of the death of either of us, we order that the surviving spouse be
appointed executor of this our last will and testament.
Appellant alleges that the trial court erred in holding that Victoriana Saavedra died
partly intestate. Article 658 of the Civil Code provides:
ART. 658. Succession is effected either by the will of man expressed by the
testament or, in the absence of a testament, by operation of law.
The first is called testamentary, the second legal succession.
It may also be effected partly by the will of man and partly by operation of
law.
According to this, there are three ways in which succession may be effected: by the
will of man, by the law, or by both at the same time. In the first case the succession
is called testamentary, because it is based on the last will and testament, which is
the orderly manifestation of the testator's will; in the second, it is called legal,
because it takes effect by operation of the law; and the third is called mixed,
because it partakes of the character of both testamentary and legal succession.
Commenting on the third mode of effecting succession, Mr. Manresa says: "The
rule of indivisibility and incompatibility was transferred to our laws from pure
Romanism, and it remained in them until the XV Century, when the law of
the Ordenamiento previously cited repealed the maxim nemo pro parte testatus
pro parte intestatus decedere protest. This same repeal is confirmed in paragraph 3
of the article under consideration (658), which prescribes that it may also be
effected partly by the will of man and partly by operation of law, and in articles
764 and 912 above cited which call the legal heirs to the enjoyment of the part of
the inheritance not disposed of by the testator in his will." (Vol. 5, 1921 ed., pp.
326, 327.)
This is a refutation of the appellant's argument that no one who has executed a will
can die partly intestate. That the rule of indivisibility of the testator's will invoked
by the appellant does not hold good in this jurisdiction, is shown, moreover, by
articles 764 and 912 of the Civil Code. According to the first of these articles, a
will is valid even though it does not contain any institution of an heir, or if such
institution does not include the entire estate, and even though the person instituted
does not accept the inheritance or is disqualified to inherit; according to the
second, one of the ways in which legal succession may take place is when the will
does not institute an heir to all or part of the property, or does not dispose of all
that belongs to the testator, in which case legal succession shall take place only
with respect to the property which the testator has not disposed of.
Assuming that the joint will in question is valid, it follows that the deceased
Victoriana Saavedra specified therein that parcels 187 and 768 in proceeding No.
7880 be delivered as a legacy to her sister Segunda Saavedra, the first parcel free
of all liens and encumbrances, and the second on the condition that the legatee
devote the products of the same to having masses said for the repose to the
testatrix's soul. As to the remaining sixteen parcels, the testatrix disposed of her
part in them conditionally, that is to say, in case her husband Macario Macrohon
Ong Ham died before she died, said parcels were to be awarded to her husband's
nephews, or to either of them in case one should have died before the said Macario
Macrohon Ong Ham. The condition imposed in the will as precedent to the vesting
in the alleged legatees Ong Ka Chiew and Ong Ka Jian of the right to the legacy,
not having been complied with, the trial court found that the part of said property
belonging to the testatriz should be partitioned among the persons called on to
succeed her under the law. We are of the opinion that this finding is in accordance
with the law, since, under article 791 of the Civil Code, conditions imposed upon
heirs and legatees shall be governed by the rules established for conditional
obligations in all matters not provided for by this section (articles 790 to 805).
And, in accordance with article 1114 of the Code, in conditional obligations the
acquisition of rights, as well as the extinction or loss of those already acquired,
shall depend upon the occurrence of the event constituting the condition.
Another error assigned by the appellant consist in the trial court not having found
that, under the terms of the joint will, the legatees Ong Ka Chiew and Ong Ka Jian
were entitled to receive the testatrix's share in the sixteen parcels of land mentioned
in said will.
The part of the will invoked by the appellant, states:

Saavedra, we hereby order that the properties hereinafter described given to
Ong Ka Chiew and Ong Ka Jian jointly, and should either of the two die
given to the survivor.
The trial court, in interpreting this paragraph of the will in regard to legatees Ong
Ka Chiew and Ong Ka Jian, reached the right conclusion, and rightly, in our
opinion, that it provides for the substitution of legatees in case either of them
should die before Macario Macrohon Ong Ham; and that the acquisition by these
legatees of any right to the property described in the will depended on the
condition that Macario Macrohon Ong Ham died before Victoriana Saavedra.
The appellant also assigns as error the holding of the trial court that the opponents,
the brother, sister, nephews, and nieces of the testatrix, were entitled to receive her
share in the said sixteen parcels of land, given to the legatees, Ong Ka Chiew and
Ong Ka Jian, under the terms of the said joint will. Such a contention is untenable.
As we have said, the acquisition of right by the alleged legatees depends on the
occurrence of the event constituting the condition, that is, the death of Macario
Macrohon Ong Ham prior to that of his wife; and this condition not having been
complied with, the said Ong Ka Chiew and Ong Ka Jian have not acquired any
right, and therefore the testatrix's estate is to be divided among her heirs in
accordance with the law.
To the sixteen parcels of land to which reference is her made, that is, those given to
the nephews of the testator, should be added lot No. 838--A, proceeding No. 7880,
certificate 1257, which the testatrix had reserved to herself (together with lots 817
and 768), in case she survived her husband Macario Macrohon Ong Ham.
One-half of these seventeen parcels of land belong to the widower, Macario

Macrohon Ong Ham, and the trial court shall order the division of the other half,
that is, the estate of the deceased Victoriana Saavedra, being one-half of the
conjugal property, between the widower and the opponents, as provided for in
articles 945, 948 and 953 of the Civil Code. With this modification, the order
appealed from is affirmed in all other respects. So ordered.
MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS, LEONCIO

GERVACIO BLAS and LODA GERVACIO BLAS, plaintiffs-appellants,
vs.
ROSALINA SANTOS, in her capacity as Special Administratrix of the Estate
of the deceased MAXIMA SANTOS VDA. DE BLAS, in Sp. Proc. No. 2524,
Court of First Instance of Rizal, defendants-appellants. MARTA GERVACIO
BLAS and DR. JOSE CHIVI, defendants-appellants.
Teofilo Sison and Nicanor Sison for plaintiffs-appellants.

De los Santos, Caluag, Pascal and Felizardo for defendants-appellees.
LABRADOR, J.:
This action was instituted by plaintiffs against the administration of the estate of
Maxima Santos, to secure a judicial declaration that one-half of the properties left
by Maxima Santos Vda. de Blas, the greater bulk of which are set forth and
described in the project of partition presented in the proceedings for the
administration of the estate of the deceased Simeon Blas, had been promised by the
deceased Maxima Santos to be delivered upon her death and in her will to the
plaintiffs, and requesting that the said properties so promised be adjudicated to the
plaintiffs. The complaint also prays for actual damages in the amount of P50,000.
(Record on Appeal, pp. 1-65.) The alleged promise of the deceased Maxima Santos
is contained in a document executed by Maxima Santos on December 26, 1936
attached to the complaint as Annex "H" and introduced at the trial as Exhibit "A".
(Ibid., pp. 258-259.) The complaint also alleges that the plaintiffs are entitled to
inherit certain properties enumerated in paragraph 3 thereof, situated in Malabon,
Rizal and Obando, Bulacan, but which properties have already been in included in
the inventory of the estate of the deceased Simeon Blas and evidently partitioned
and conveyed to his heirs in the proceedings for the administration of his (Simeon
Blas) estate.
Defendant, who is the administratrix of the estate of the deceased Maxima Santos
Vda. de Blas, filed an answer with a counterclaim, and later, an amended answer
and a counterclaim. The said amended answer admits the allegations of the
complaint as to her capacity as administratrix the death of Simeon Blas on January
3, 1937; the fact that Simeon Blas and Marta Cruz begot three children only one of
whom, namely, Eulalio Blas, left legitimate descendants; that Simeon Blas
contracted a second marriage with Maxima Santos on June 28, 1898. She denies
for lack of sufficient information and belief, knowledge edge of the first marriage
of Simeon Blas to Marta Cruz, the averment that Simeon Blas and Marta Cruz
acquired properties situated in Obando, Bulacan, that said properties were utilized
as capital, etc. As special defenses, she alleges that the properties of the spouses
Blas and Santos had been settled and liquidated in the project of partition of the
estate of said Simeon Blas; that pursuant to the project of partition, plaintiffs and
some defendants had already received the respective properties adjudicated to
them; that the plaintiffs and the defendants Marta Geracio and Jose Chivi are
estopped from impugning the validity of the project of partition of the estate of the
deceased Simeon Blas and from questioning the ownership in the properties
conveyed in the project of partition to Maxima Santos as her own exclusive
property; that the testament executed by Maxima Santos is valid, the plain
plaintiffs having no right to recover any portion of Maxima Santos' estate now
under administration by the court. A counterclaim for the amount of P50,000 as
damages is also included in the complaint, as also a cross-claim against Marta
Gervacio Blas and Jose Chivi.
Trial of the case was Conducted and, thereafter, the court, Hon. Gustave
Victoriano, presiding, rendered judgment dismissing the complaint, with costs
against plaintiff, and dismissing also the counterclaim and cross-claim decision
,the plaintiffs filed by the defendants. From this district have appealed to this
Court.
The facts essential to an understanding of the issues involved in the case may be
briefly summarized as follows: Simeon Blas contracted a first marriage with Marta
Cruz sometime before 1898. They had three children, only one of whom, Eulalio,
left children, namely, Maria Gervacio Blas, one of the plaintiffs, Marta Gervacio
Blas, one of the defendants, and Lazaro Gervacio Blas. Lazaro died in 1950, and is
survived by three legitimate children who are plaintiffs herein, namely, Manuel
Gervacio Blas, Leoncio Gervacio Blas and Loida Gervacio Blas. Marta Cruz died
in 1898, and the following year, Simeon Blas contracted a second marriage with
Maxima Santos. At the time of this second marriage, no liquidation of the
properties required by Simeon Blas and Marta Cruz was made. Three of the
properties left are fishponds located in Obando, Bulacan. Maxima Santos does not
appear to have apported properties to her marriage with Simeon Blas.
On December 26, 1936, only over a week before over a week before his death on
January 9, 1937, Simeon Blas executed a last will and testament. In the said
testament Simeon Blas makes the following declarations:
2. Sa panahon ng aking pangalawang asawa, MAXIMA SANTOS DE

BLAS, ay nagkaroon ako at nakatipon ng mga kayamanan (bienes) at pag-
aari (propriedades) na ang lahat ng lupa, palaisdaan at iba pang pag-aari ay
umaabot sa halagang ANIM NA RAAN PITONG PU'T WALONG DAAN
LIBO WALONG DAAN WALONG PUNG PISO (678,880-00) sang-ayon
sa mga halaga sa amillarimento (valor Amillarado.)
II
1. Ang kalahati ng lahat ng aming pag-aari, matapos mabayaran ang lahat ng

aking o aming pag-kakautang na mag-asawa, kung mayroon man, yayamang
ang lahat ng ito ay kita sa loob ng matrimonio (bienes ganaciales) ay bahagi
ng para sa aking asawa, MAXIMA SANTOS DE BLAS, sang-ayon sa batas.
(Record on Appeal, pp. 250-251.)
The above testamentary provisions may be translated as follows:
2. During my second marriage with Maxima Santos de Blas, I possessed and

acquired wealth and properties, consisting of lands, fishponds and other
kinds of properties, the total assessed value of which reached the amount
P678,880.00.
II
1. One-half of our properties, after the payment of my and our indebtedness,
all these properties having been acquired during marriage (conjugal
properties), constitutes the share of my wife Maxima Santos de Blas,
according to the law.
At the time of the execution of said will, Andres Pascual a son-in-law of the
testator, and Avelina Pascual and others, were present. Andres Pascual had married
a descendant by the first marriage. The will was prepared by Andres Pascual, with
the help of his nephew Avelino Pascual. The testator asked Andres Pascual to
prepare a document which was presented in court as Exhibit "A", thus:
Q — Was there anybody who asked you to prepare this document?
A — Don Simeon Blas asked me to prepare this document (referring to

Exhibit "A"), (t.s.n., Sarmiento to, P. 24).
The reason why the testator ordered the preparation of Exhibit "A" was because the
properties that the testator had acquired during his first marriage with Marta Cruz
had not been liquidated and were not separated from those acquired during the
second marriage. Pascual's testimony is as follows:
Q — To whom do you refer with the word "they"?
A — Simeon Blas and his first wife, Marta Cruz. When Marta Cruz died
they had not made a liquidation of their conjugal properties and so all those
properties were included all in the assets of the second marriage, and that is
the reason why this document was prepared. (t.s.n., Sarmiento, p. 36.)
The above testimony is fully corroborated by that of Leoncio Gervacio, son-in-law

of Simeon Blas.
Q — Please state to the Court?
A — My children were claiming from their grandfather Simeon Blas the

properties left by their grandmother Marta Cruz in the year 1936.
Q — And what happened with that claim of your children against Simeon
Blas regarding the assets or properties of the first marriage that were left
after the death of Marta Cruz in 1936?
A — The claim was not pushed through because they reached into an
agreement whereby the parties Simeon Blas Maxima Santos, Maria
Gervacio Bias, Marta Gervacio Blas and Lazaro Gervacio Blas agreed that
Simeon Blas and Maxima Blas will give one-half of the estate of Simeon
Blas. (t.s.n., Sarmiento, pp. 143-144).
The document which was thus prepared and which is marked as Exhibit "A" reads
in Tagalog, thus:
MAUNAWA NG SINO MANG MAKABABASA:
Na akong si MAXIMA SANTOS DE BLAS, nasa hustong gulang, kasal kay

SIMEON BLAS, taga bayan ng Malabon, Rizal, Philippines, sa
pamamagitan ng kasulatang ito ay malaya kong ipinahahayag:
Na aking nabasa at naunawa ang testamento at huling kalooban na nilagdaan

ng aking asawa, SIMEON BLAS, at ipinahahayag ko sa ilalim ng aking
karangalan at sa harap ng aking asawa na igagalang at pagpipitaganan ang
lahat at bawa't isang bahagi ng nabanggit na testamento at ipinangangako ko
pa sa pamamagitan ng kasulatang ito na ang lahat ng maiiwang pag-aari at
kayamanan naming mag-asawa, na nauukol at bahaging para sa akin sa
paggawa ko naman ng aking testamento ay ipagkakaloob ko ang kalahati
(½) sa mga herederos at legatarios o pinamamanahan ng aking nabanggit na
asawa, SIMEON BLAS, sa kaniyang testamento, na ako'y makapipili o
makahihirang na kahit kangino sa kanila ng aking pagbibigyan at
pamamanahan sang-ayon sa paggalang, paglilingkod, at pakikisama ng
gagawin sa akin.
SA KATUNAYAN NG LAHAT NG ITO ay nilagdaan ko ang kasulatang

ito ngayon ika 26 ng Diciembre ng taong 1936, dito sa San Francisco del
Monte, San Juan, Rizal, Philippines. (Exh. "A", pp. 29-30 — Appellant's
brief).
(Fdo.) MAXIMA SANTOS DE

BLAS
and which, translated into English, reads as follows:
KNOW ALL MEN BY THESE PRESENTS:

That I MAXIMA SANTOS DE BLAS, of legal age, married to SIMEON
BLAS, resident of Malabon, Rizal, Philippines, voluntarily state:
That I have read and knew the contents of the will signed by my husband,
SIMEON BLAS, (2) and I promise on my word of honor in the presence of
my husband that I will respect and obey all and every disposition of said will
(3) and furthermore, I promise in this document that all the properties my
husband and I will leave, the portion and share corresponding to me when I
make my will, I will give one-half (½) to the heirs and legatees or the
beneficiaries named in the will of my husband, (4) and that I can select or
choose any of them, to whom I will give depending upon the respect, service
and treatment accorded to me.
IN WITNESS WHEREOF, I signed this document this 26th day of

December, 1936 at San Francisco del Monte, San Juan, Rizal, Philippines.
(Exh. "A", pp. 30-31, Appellant's brief).
(Sgd.) MAXIMA SANTOS DE

BLAS
The court below held that said Exhibit "A" has not created any right in favor of
plaintiffs which can serve as basis for the complaint; that neither can it be
considered as a valid and enforceable contract for lack of consideration and
because it deals with future inheritance. The court also declared that Exhibit "A" is
not a will because it does not comply with the requisites for the execution of a will;
nor could it be considered as a donation, etc.
Both the court below in its decision and the appellees in their brief before us, argue
vehemently that the heirs of Simeon Blas and his wife Marta Cruz can no longer
make any claim for the unliquidated conjugal properties acquired during said first
marriage, because the same were already included in the mass of properties
constituting the estate of the deceased Simeon Blas and in the adjudications made
by virtue of his will, and that the action to recover the same has prescribed. This
contention is correct. The descendants of Marta Cruz can no longer claim the
conjugal properties that she and her husband may have required during their
marriage although no liquidation of such properties and delivery thereof to the
heirs of Marta Cruz have been made, no action to recover said propertied having
been presented in the proceedings for the settlement of the estate of Simeon Blas.
But the principal basis for the plaintiffs' action in the case at bar is the document
Exhibit "A". It is not disputed that this document was prepared at the instance of
Simeon Blas for the reason that the conjugal properties of me on Blas for the
reason his first marriage had not been liquidated; that it was prepared at the same
time as the will of Simeon Blas on December 26, 1936, at the instance of the latter
himself. It is also not disputed that the document was signed by Maxima Santos
and one copy thereof, which was presented in court as Exhibit "A", was kept by
plaintiffs' witness Andres Pascual.
Plaintiffs-appellants argue before us that Exhibit "A" is both a trust agreement and
a contract in the nature of a compromise to avoid litigation. Defendants-appellees,
in answer, claim that it is neither a trust agreement nor a compromise a agreement.
Considering that the properties of the first marriage of Simeon Blas had not been
liquidated when Simeon Blas executed his will on December 26, 1936', and the
further fact such properties where actually , and the further fact that included as
conjugal properties acquired during the second marriage, we find, as contended by
plaintiffs-appellants that the preparation and execution of Exhibit "A" was ordered
by Simeon Blas evidently to prevent his heirs by his first marriage from contesting
his will and demanding liquidation of the conjugal properties acquired during the
first marriage, and an accounting of the fruits and proceeds thereof from the time
of the death of his first wife.
Exhibit "A", therefore, appears to be the compromise defined in Article 1809 of the
Civil Code of Spain, in force at the time of the execution of Exhibit "A", which
provides as follows:
Compromise is a contract by which each of the parties in interest, by

giving, promising, or retaining something avoids the provocation of a suitor
terminates one which has already the provocation been instituted. (Emphasis
supplied.)
Exhibit "A" states that the maker (Maxima Santos) had read and knew the contents
of the will of her husband read and knew the contents of the will Simeon Blas —
she was evidently referring to the declaration in the will(of Simeon Blas) that his
properties are conjugal properties and one-half thereof belongs to her (Maxima
Santos) as her share of the conjugal assets under the law. The agreement or
promise that Maxima Santos makes in Exhibit "A" is to hold one-half of her said
share in the conjugal assets in trust for the heirs and legatees of her husband in his
will, with the obligation of conveying the same to such of his heirs or legatees as
she may choose in her last will and testament. It is to be noted that the conjugal
properties referred to are those that were actually existing at that time, December
26, 1936. Simeon Blas died on January 9, 1937. On June 2, 1937, an inventory of
the properties left by him, all considered conjugal, was submitted by Maxima
Santos herself as administratrix of his estate. A list of said properties is found in
Annex "E", the complete inventory submitted by Maxima Santos Vda. de Blas, is
administratrix of the estate of her husband, dated March 10, 1939. The properties
which were given to Maxima Santos as her share in the conjugal properties are also
specified in the project of partition submitted by said Maxima Santos herself on
March 14, 1939. (Record on Appeal, pp. 195-241.) Under Exhibit "A", therefore,
Maxima Santos contracted the obligation and promised to give one-half of the
above indicated properties to the heirs and legatees of Simeon Blas.
Counsel for the defendant-appellee claims Exhibit "A" is a worthless piece of

paper because it is not a will nor a donation mortis causa nor a contract. As we
have in indicated above, it is a compromise and at the same time a contract with a
sufficient cause or consideration. It is also contended that it deals with future
inheritance. We do not think that Exhibit "A" is a contract on future inheritance. it
is an obligation or promise made by the maker to transmit one-half of her share in
the conjugal properties acquired with her husband, which properties are stated or
declared to be conjugal properties in the will of the husband. The conjugal
properties were in existence at the time of the execution of Exhibit "A" on
December 26, 1936. As a matter of fact, Maxima Santos included these properties
in her inventory of her husband's estate of June 2, 1937. The promise does not refer
to any properties that the maker would inherit upon the death of her husband,
because it is her share in the conjugal assets. That the kind of agreement or
promise contained in Exhibit "A" is not void under Article 1271 of the old Civil
Code, has been decided by the Supreme Court of Spain in its decision of October
8, 19154, thus:
Que si bien el art. 1271 del Codigo civil dispone que sobre la herenciafutura
no se podra celebrar otros contratos que aquellos cuyo objecto seapracticar
entre vivos la division de un caudal, conforme al articulo 1056, esta
prohibicion noes aplicable al caso, porque la obligacion que contrajoel
recurr en contrato privado de otorgar testamento e instituir heredera a su
subrina de los bienes que adquirio en virtud de herencia, procedentes desu
finada consorte que le quedasen sobrantes despues de pagar las deudas, y del
ganacial que se expresa, asi como de reconocer, ademas, con alguna cosaa
otros sobrinos, se refiere a bienes conocidos y determinados existentes
cuando tal compromisi se otorgo, y no a la universalidad de una herencia
que, sequn el art. 659 del citado Codigo civil, as determina a muerte,
constituyendola todos los bienes, derechos y obligaciones que por ella no
sehayan extinguido: ..." (Emphasis supplied.)
It will be noted that what is prohibited to be the subject matter of a contract under
Article 1271 of the Civil Code is " future inheritance." To us future inheritance is
any property or right not in existence or capable of determination at the time of the
contract, that a person may in the future acquire by succession. The properties
subject of the contract Exhibit "A" are well defined properties, existing at the time
of the agreement, which Simeon Blas declares in his statement as belonging to his
wife as her share in the conjugal partnership. Certainly his wife's actual share in the
conjugal properties may not be considered as future inheritance because they were
actually in existence at the time Exhibit "A" was executed.
The trial court held that the plaintiffs-appellants in the case at bar are concluded by
the judgement rendered in the proceedings for the settlement of the estate of
Simeon Blas for the reason that the properties left by him belonged to himself and
his wife Maxima Santos; that the project of partition in the said case, adjudicating
to Maxima Santos one-half as her share in the conjugal properties, is a bar to
another action on the same subject matter, Maxima Santos having become absolute
owner of the said properties adjudicated in her favor. As already adverted to above,
these contentions would be correct if applied to the claim of the plaintiffs-
appellants that said properties were acquired with the first wife of Simeon Blas,
Marta Cruz. But the main ground upon which plaintiffs base their present action is
the document Exhibit "A", already fully considered above. As this private
document contains the express promise made by Maxima Santos to convey in her
testament, upon her death, one-half of the conjugal properties she would receive as
her share in the conjugal properties, the action to enforce the said promise did not
arise until and after her death when it was found that she did not comply with her
above-mentioned promise. (Art. 1969, old Civil Code.) The argument that the
failure of the plaintiffs-appellants herein to oppose the project of partition in the
settlement of the estate of Simeon Blas, especially that portion of the project which
assigned to Maxima Santos one-half of all the conjugal properties bars their
present action, is, therefore, devoid of merit. It may be added that plaintiffs-
appellants did not question the validity of the project of partition precisely because
of the promise made by Maxima Santos in the compromise Exhibit "A"; they
acquised in the approval of said project of partition because they were relying on
the promise made by Maxima Santos in Exhibit "A", that she would transmit one-
half of the conjugal properties that she was going to receive as her share in the
conjugal partnership upon her death and in her will, to the heirs and legatees of her
husband Simeon Blas.
Neither can the claim of prescription be considered in favor of the defendants. The
right of action arose at the time of the death of Maxima Santos on October 5,1956,
when she failed to comply with the promise made by her in Exhibit "A". The
plaintiffs-appellants immediately presented this action on December 27, 1956,
upon learning of such failure on the part of Maxima Santos to comply with said
promise. This defense is, therefore, also without merit.
It is next contended by the defendant-appellee that Maxima Santos complied with

her above-mentioned promise, — that Andres Pascual, Tomasa Avelino, Justo
Garcia, Ludovico Pimpin and Marta Gervacio Blas were given substancial legacies
in the will and testament of Maxima Santos. To determine whether she had
actually complied with the promise made in Exhibit "A", there is herein set forth a
list only of the fishponds and their respective areas as contained in the list of
properties she acquired as her share in the conjugal partnership, which list
includes, besides many ricelands as well as residential lots, thus:
31. Paco, Obando, Bulacan 5.8396 has.

32. Pangjolo, Obando 3.5857 "
34. Batang Pirasuan, Lubao,
Pampanga 11.9515 "
35. Calangian, Lubao,
Pampanga 30.2059 "
38. Bakuling, Lubao,
Pampanga 215.4325 "
39. Bakuling, Lubao,
Pampanga 8.3763 "
40. Bangkal, Sinubli 23.0730 "
41. Tagulod, 6.8692 "
44. Bangkal Pugad (a) 34.2779 "
(b) 51.7919 "
(c) 2.5202 "
45. Magtapat Bangkal, Lubao,
Pampanga (a) 18.0024 "
(b) 7.3265 "
(c) 53.5180 "
46. Pinanganakan, Lubao, 159.0078 "
Pampanga
47. Emigdio Lingid, Lubao,
Pampanga 34.5229 "
48. Propios, Lubao, Pampanga 80.5382 "
49. Batang Mabuanbuan,
Sexmoan, Pampanga 43.3350 "
50. Binatang Mabuanbuan,
51. Sapang Magtua, Sexmoan,
Pampanga 56,8242 "
52. Kay Limpin, Sexmoan,
Pampanga 5.0130 "
53. Calise Mabalumbum,
54. Messapinit Kineke,
Sexmoan, Pampanga (a) 5.2972 "
(b) 5.9230 "
(c) 1.4638 "
(d) 1.4638 "
(e) 2.8316 "
(f) 10.4412 "
(g) 3.9033 "
(h) 11.9263 "
(i) 6.0574 "
55. Dalang, Banga, Sexmoan,
Pampanga 23.3989 "
62. Alaminos, Pangasinan 147.1242 "
80. Mangasu Sexmoan,
Pampanga 10.000 "
81. Don Tomas, Sexmoan,
Pampanga 21.6435 "
82. Matikling, Lubao,
Pampanga 16.0000 "
Total
area ............................... 1045.7863 "
(See Record on
Record, pp. 195-241.)
In her will, Maxima Santos devised to Marta Gervacio Blas the 80-hectare
fishpond situated in Lubao, Pampanga. The fishpond devised is evidently that
designated as "Propios" in Lubao, Pampanga, item No. 8 in the list of properties
adjudicated to her in the project of partition. (Record on Appeal, p. 215.)
Considering that the total area of the fishponds amount to 1045.7863 hectares, the
80 hectares devised to Marta Gervacio Blas is not even one-tenth of the total area
of the fishponds. Add to this the fact that in the will she imposed upon Marta
Gervacio Blas de Chivi an existing obligation on said fishponds, namely, its lease
in 1957 and the duty to pay out of the rentals thereof an obligation to the
Rehabilitation Finance Corporation RFC (Ibid., pp. 262-263.) Angelina Blas was
given only a lot of 150 square meters in Hulong Duhat, Malabon, Rizal, and Leony
Blas, the sum of P300.00 (Ibid., p. 264.)
It is evident from a consideration of the above figures and facts that Maxima
Santos did not comply with her obligation to devise one-half of her conjugal
properties to the heirs and legatees of her husband. She does not state that she had
complied with such obligation in her will. If she intended to comply therewith by
giving some of the heirs of Simeon Blas the properties mentioned above, the most
that can be considered in her favor is to deduct the value of said properties from
the total amount of properties which she had undertaken to convey upon her death.
All the issues in the pleadings of the parties and in their respective briefs, have
now been fully discussed and considered. Reiterating what we have stated above,
we declare that by Exhibit "A", a compromise to avoid litigation, Maxima Santos
promised to devise to the heirs and legatees of her husband Simeon Blas, one-half
of the properties she received as her share in the conjugal partnership of herself
and her husband, which share is specified in the project of partition submitted by
herself on March 14, 1939 in the settlement of the estate of her husband, and which
is found on pages 195 to 240 of the record on appeal and on pages 27 to 46 of the
project of partition, submitted by Maxima Santos herself before the Court of First
Instance of Rizal in Civil Case No. 6707, entitled "Testamentaria del Finado Don
Simeon Blas, Maxima Santos Vda. de Bias, Administradora"; and that she failed to
comply with her aforementioned obligation. (Exhibit "A")
WHEREFORE, the judgment appealed from is hereby reversed and the defendant-
appellee, administratrix of the estate of Maxima Santos, is ordered to convey and
deliver one-half of the properties adjudicated o Maxima Santos as her share in the
conjugal properties in said Civil Case No. 6707, entitled "Testamentaria del Finado
Don Simeon Blas, Maxima Santos Vda. de Blas, Administradora", to the heirs and
the legatees of her husband Simeon Blas. Considering that all said heirs and
legatees, designated in the will of Simeon Blas as the persons for whose benefit
Exhibit "A" had been executed, have not appeared in these proceedings, the record
is hereby remanded to the court below, with instructions that, after the conveyance
of the properties hereinabove ordered had been effected, the said heirs and legatees
(of Simeon Blas) file adversary pleadings to determine the participation of each
and every one of them in said properties. Costs against the defendant- appellee
Rosalina Santos.
ANTONIO TUASON, JR., petitioner,

vs.
JOSE B. LINGAD, as Commissioner of Internal Revenue, respondent.
Araneta, Mendoza & Papa for petitioner.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General

Felicisimo R. Rosete and Special Attorney Antonio H. Garces for respondent.
CASTRO, J.:p
In this petition for review of the decision of the Court of Tax Appeals in CTA Case
1398, the petitioner Antonio Tuason, Jr. (hereinafter referred to as the petitioner)
assails the Tax Court's conclusion that the gains he realized from the sale of
residential lots (inherited from his mother) were ordinary gains and not gains from
the sale of capital assets under section 34(1) of the National Internal Revenue
Code.
The essential facts are not in dispute.
In 1948 the petitioner inherited from his mother several tracts of land, among
which were two contiguous parcels situated on Pureza and Sta. Mesa streets in
Manila, with an area of 318 and 67,684 square meters, respectively.
When the petitioner's mother was yet alive she had these two parcels subdivided
into twenty-nine lots. Twenty-eight were allocated to their then occupants who had
lease contracts with the petitioner's predecessor at various times from 1900 to
1903, which contracts expired on December 31, 1953. The 29th lot (hereinafter
referred to as Lot 29), with an area of 48,000 square meters, more or less, was not
leased to any person. It needed filling because of its very low elevation, and was
planted to kangkong and other crops.
After the petitioner took possession of the mentioned parcels in 1950, he instructed
his attorney-in-fact, J. Antonio Araneta, to sell them.
There was no difficulty encountered in selling the 28 small lots as their respective
occupants bought them on a 10-year installment basis. Lot 29 could not however
be sold immediately due to its low elevation.
Sometime in 1952 the petitioner's attorney-in-fact had Lot 29 filled, then

subdivided into small lots and paved with macadam roads. The small lots were
then sold over the years on a uniform 10-year annual amortization basis. J. Antonio
Araneta, the petitioner's attorney-in-fact, did not employ any broker nor did he put
up advertisements in the matter of the sale thereof.
In 1953 and 1954 the petitioner reported his income from the sale of the small lots
(P102,050.79 and P103,468.56, respectively) as long-term capital gains. On May
17, 1957 the Collector of Internal Revenue upheld the petitioner's treatment of his
gains from the said sale of small lots, against a contrary ruling of a revenue
examiner.
In his 1957 tax return the petitioner as before treated his income from the sale of
the small lots (P119,072.18) as capital gains and included only ½ thereof as taxable
income. In this return, the petitioner deducted the real estate dealer's tax he paid for
1957. It was explained, however, that the payment of the dealer's tax was on
account of rentals received from the mentioned 28 lots and other properties of the
petitioner. On the basis of the 1957 opinion of the Collector of Internal Revenue,
the revenue examiner approved the petitioner's treatment of his income from the
sale of the lots in question. In a memorandum dated July 16, 1962 to the
Commissioner of Internal Revenue, the chief of the BIR Assessment Department
advanced the same opinion, which was concurred in by the Commissioner of
Internal Revenue.
On January 9, 1963, however, the Commissioner reversed himself and considered

the petitioner's profits from the sales of the mentioned lots as ordinary gains. On
January 28, 1963 the petitioner received a letter from the Bureau of Internal
Revenue advising him to pay deficiency income tax for 1957, as follows:
Net income per orig. investigation ............... P211,095.36

Add:
56% of realized profit on sale
of lots which was deducted in the
income tax return and allowed in
the original report of examination ................. 59,539.09 Net income per final
investigation ................. P270,824.70
Less: Personal exemption ..................................... 1,800.00

Amount subject to tax ................................. P269,024.70 Tax due
thereon .......................................... P98,551.00
Less: Amount already assessed .................... 72,199.00 Balance ......... P26,352.00
Add:
½% monthly interest from
6-20-59 to 6-29-62 .................................... 4,742.36
TOTAL AMOUNT DUE AND
COLLECTIBLE ......................................... P31,095.36
The petitioner's motion for reconsideration of the foregoing deficiency assessment

was denied, and so he went up to the Court of Tax Appeals, which however
rejected his posture in a decision dated January 16, 1965, and ordered him, in
addition, to pay a 5% Surcharge and 1% monthly interest "pursuant to Sec. 51(e) of
the Revenue Code."
Hence, the present petition.
The petitioner assails the correctness of the opinion below that as he was engaged
in the business of leasing the lots he inherited from his mother as well other real
properties, his subsequent sales of the mentioned lots cannot be recognized as sales
of capital assets but of "real property used in trade or business of the taxpayer."
The petitioner argues that (1) he is not the one who leased the lots in question; (2)
the lots were residential, not commercial lots; and (3) the leases on the 28 small
lots were to last until 1953, before which date he was powerless to eject the lessees
therefrom.
The basic issue thus raised is whether the properties in question which the
petitioner had inherited and subsequently sold in small lots to other persons should
be regarded as capital assets.
1. The National Internal Revenue Code (C.A. 466, as amended) defines the term
"capital assets" as follows:
(1) Capital assets. — The term "capital assets" means property held

by the taxpayer (whether or not connected with his trade or business),
but does not include stock in trade of the taxpayer or other property of
a kind which would properly be included in the inventory of the
taxpayer if on hand at the close of the taxable year, or property held
by the taxpayer primarily for sale to customers in the ordinary course
of his trade or business, or property, used in the trade or business, of a
character which is subject to the allowance for depreciation provided
in subsection (f) of section thirty; or real property used in the trade or
business of the taxpayer.
As thus defined by law, the term "capital assets" includes all the properties of a
taxpayer whether or not connected with his trade or business, except: (1) stock in
trade or other property included in the taxpayer's inventory; (2) property primarily
for sale to customers in the ordinary course of his trade or business; (3) property
used in the trade or business of the taxpayer and subject to depreciation allowance;
and (4) real property used in trade or business.1 If the taxpayer sells or exchanges
any of the properties above-enumerated, any gain or loss relative thereto is an
ordinary gain or an ordinary loss; the gain or loss from the sale or exchange of all
other properties of the taxpayer is a capital gain or a capital loss.2
Under section 34(b) (2) of the Tax Code, if a gain is realized by a taxpayer (other
than a corporation) from the sale or exchange of capital assets held for more than
twelve months, only 50% of the net capital gain shall be taken into account in
computing the net income.
The Tax Code's provision on so-called long-term capital gains constitutes a statute
of partial exemption. In view of the familiar and settled rule that tax exemptions
are construed in strictissimi juris against the taxpayer and liberally in favor of the
taxing authority,3 the field of application of the term it "capital assets" is
necessarily narrow, while its exclusions must be interpreted
broadly.4 Consequently, it is the taxpayer's burden to bring himself clearly and
squarely within the terms of a tax-exempting statutory provision, otherwise, all fair
doubts will be resolved against him.5 It bears emphasis nonetheless that in the
determination of whether a piece of property is a capital asset or an ordinary asset,
a careful examination and weighing of all circumstances revealed in each case
must be made.6
In the case at bar, after a thoroughgoing study of all the circumstances relevant to
the resolution of the issue raised, this Court is of the view, and so holds, that the
petitioner's thesis is bereft of merit.
When the petitioner obtained by inheritance the parcels in question, transferred to

him was not merely the duty to respect the terms of any contract thereon, but as
well the correlative right to receive and enjoy the fruits of the business and
property which the decedent had established and maintained.7 Moreover, the record
discloses that the petitioner owned other real properties which he was putting out
for rent, from which he periodically derived a substantial income, and for which he
had to pay the real estate dealer's tax (which he used to deduct from his gross
income).8 In fact, as far back as 1957 the petitioner was receiving rental payments
from the mentioned 28 small lots, even if the leases executed by his deceased
mother thereon expired in 1953. Under the circumstances, the petitioner's sales of
the several lots forming part of his rental business cannot be characterized as other
than sales of non-capital assets.
The sales concluded on installment basis of the subdivided lots comprising Lot 29
do not deserve a different characterization for tax purposes. The following
circumstances in combination show unequivocally that the petitioner was, at the
time material to this case, engaged in the real estate business: (1) the parcels of
land involved have in totality a substantially large area, nearly seven (7) hectares,
big enough to be transformed into a subdivision, and in the case at bar, the said
properties are located in the heart of Metropolitan Manila; (2) they were
subdivided into small lots and then sold on installment basis (this manner of selling
residential lots is one of the basic earmarks of a real estate business); (3)
comparatively valuable improvements were introduced in the subdivided lots for
the unmistakable purpose of not simply liquidating the estate but of making the lots
more saleable to the general public; (4) the employment of J. Antonio Araneta, the
petitioner's attorney-in-fact, for the purpose of developing, managing,
administering and selling the lots in question indicates the existence of owner-
realty broker relationship; (5) the sales were made with frequency and continuity,
and from these the petitioner consequently received substantial income
periodically; (6) the annual sales volume of the petitioner from the said lots was
considerable, e.g., P102,050.79 in 1953; P103,468.56 in 1954; and P119,072.18 in
1957; and (7) the petitioner, by his own tax returns, was not a person who can be
indubitably adjudged as a stranger to the real estate business. Under the
circumstances, this Court finds no error in the holding below that the income of the
petitioner from the sales of the lots in question should be considered as ordinary
income.
2. This Court notes, however, that in ordering the petitioner to pay the deficiency
income tax, the Tax Court also required him to pay a 5% surcharge plus 1%
monthly interest. In our opinion this additional requirement should be eliminated
because the petitioner relied in good faith upon opinions rendered by no less than
the highest officials of the Bureau of Internal Revenue, including the
Commissioner himself. The following ruling in Connell Bros. Co. (Phil.) vs.
Collector of Internal Revenue9 applies with reason to the case at bar:
We do not think Section 183(a) of the National Internal Revenue

Code is applicable. The same imposes the penalty of 25% when the
percentage tax is not paid on time, and contemplates a case where the
liability for the tax is undisputed or indisputable. In the present case
the taxes were paid, the delay being with reference to the deficiency,
owing to a controversy as to the proper interpretation if Circulars Nos.
431 and 440 of the office of respondent-appellee. The controversy
was generated in good faith, since that office itself appears to have
formerly taken the view that the inclusion of the words "tax included"
on invoices issued by the taxpayer was sufficient compliance with the
requirements of said circulars. 10
ACCORDINGLY, the judgment of the Court of Tax Appeals is affirmed, except

the portion thereof that imposes 5% surcharge and 1% monthly interest, which is
hereby set aside. No costs.
GERARDO RUPA, SR., petitioner,

vs.
THE HONORABLE COURT OF APPEALS and MAGIN
SALIPOT, respondents.
GONZAGA-REYES, J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of

Appeals (CA), dated June 5, 1987, affirming the dismissal by the Regional Trial
Court of Masbate, Branch 46, of the Complaint for Redemption with Damages
filed by herein petitioner Gerardo Rupa, Sr. (RUPA) against herein private
petitioner respondent Magin Salipot (SALIPOT).
The antecedents as found by the CA are as follows:
1) On March 26, 1981, herein petitioner Gerardo Rupa filed an action for
redemption with damages against Magin Salipot before the then Court of
Agrarian Relations, Tenth Regional District, Branch IV, Sorsogon,
Sorsogon, claiming that he was the agricultural share tenant for more than 20
years of a parcel of coconut land2 formerly owned by Vicente Lim and
Patrocinia Yu Lim; that since he assumed tenancy over the questioned
property, he was the one watching, talking care of and cleaning the coconut
plantation; he also gathers coconuts every three months and processes them
into copra which he shares with the Lim spouses under a 50-50% sharing
basis; that aside from being a share tenant, he is also the overseer of four
parcels of coconut land situated in the sitios of Minuswang and Comunal,
Armenia, Uson, Masbate also owned by the Lim spouses; that the Lim
spouses, however, sold the property to herein respondent Magin Salipot
without any prior written or verbal notice to the petitioner in the sum of
P5,000.00 sometime in January 1981 (Annex A, Deed of Absolute Sale,
Petition); that on February 16, 1981, petitioner came to know about the sale
of the property to the respondent when he was informed in writing by the
former landowner, and wanting to buy the property for himself, petitioner
sought the assistance of the local office of Agrarian Reform at Masbate,
Masbate, but no agreement was reached; that the petitioner manifesting his
willingness to redeem the questioned property in the same amount of
P5,000.00 bought by respondent, deposited the amount with the trial court
(Annex "B", Petition). Petitioner, thus, prayed for judgment authorizing his
right of redemption over the property including his shares of the harvest,
damages and expenses arising herein.
2) On April 14, 1981, respondent Magin Salipot filed his answer denying
petitioner's allegation of tenancy over the questioned property and claimed
that petitioner was hired every now and then to oversee the copra-making of
the laborers of spouses Lim, with remuneration based on the weight of copra
produced. In his affirmative and special defenses, respondent claimed that he
bought the registered parcel of land from the spouses Lim who in turn
bought the same from the original registered owner Diego Prieto, who was
issued OCT-1853, and since both deeds of sale, one executed by Diego
Prieto in favor of the Lim spouses and the second, by the Lim spouses to
herein respondent, have not yet been registered or legally conveyed to
respondent, the action for redemption filed by the petitioner against
respondent is pre-mature; that petitioner had never been a tenant of spouses
Lim over the land in question; that the right of redemption had already been
lost by laches or non-use, because more than 180 days had lapsed since
petitioner had actual knowledge of the sale in favor of respondent.
x x x x x x x x x3
After hearing, the Regional Trial Court of Masbate (which had taken over the
Court of Agrarian Relations pursuant to BP 129) rendered a decision dated July 17,
1985, dismissing the complaint on the ground that RUPA was not a tenant of the
subject property, thus, not entitled to exercise the right of redemption over the
same. RUPA was also held liable in attorney's fees in the amount of P5,000.00 and
P3,000.00 as litigation expenses. RUPA filed a notice of appeal. The CA required
the parties to file their memoranda within a non-extendible period of 15 days from
notice thereof, after which the case shall be considered submitted for decision with
or without memoranda.4 SALIPOT manifested that he was adopting the
memorandum filed with the court a quo, while no memorandum was received from
RUPA.5 The decision of the trial court was affirmed in toto by the CA in its
judgment promulgated on June 5, 1987, holding as follows:
. . ., this Court finds, as the court a quo also held, that there is no clear and
convincing evidence to show that plaintiff was a share tenant of spouses
Lim. The admission made by plaintiff Gerardo Rupa in Criminal Case No.
532-U, entitled People of the Philippines vs. Mariano Luzong, filed six
months after this instant case was instituted, negates his claim of tenancy.
Plaintiff RUPA, during the proceedings in the Criminal Case, admitted that
he was the overseer and the administrator of five (5) parcels of land, one of
which is this land in question, owned by the Lim spouses in Armenia, Uson,
Masbate. This was aptly discussed by the lower court in its decision as
follows:
After an impartial scrutiny and evaluation of the facts and the law
involved, the Court finds and so rules that, by a preponderance of
proof, plaintiff Gerardo Rupa, Sr., either on July 30, 1979 or in
January, 1980 (when the two identical deeds of sale involving the
same land in dispute were respectively executed by the Lim spouses
in favor of defendant Magin Salipot) was actually not a share-tenant
but the overseer and administrator of the Lim spouses of their five (5)
parcels of land in Armenia, Uson, Masbate, in the light of his own
admission of such fact and status, under oath, in no less than a solemn
judicial proceeding which officially commenced on September 9,
1981, particularly in Criminal Case No. 532-U of the MCTC of
Dimasalang-Palanas-Uson (Exhs. 6 and 6-A), more so because seven
(7) months earlier, or specifically on March 21, 1981, he had already
commenced the case at bar in Sorsogon, Sorsogon, precisely to
ventilate his alleged right of redemption as an ousted share tenant of
the land's former owner. The Court notes quite emphatically that
herein plaintiff, in making such an admission against his own interest,
was fully aware of the pendency of this instant suit but such fact
notwithstanding, he nevertheless disclosed under oath that he was,
indeed, the overseer and administrator (not a mere share-tenant of the
Lim spouses, the two status being inherently incompatible (pp. 100-
101 Expediente, Decision .
The act, declaration or omission of a party as to a relevant fact, may be given

in evidence against him (Section 22, Rule 130 of the Rules of Court). At the
time the plaintiff-appellant admitted that he was the administrator of Vicente
Lim, he had already instituted the action for redemption with damages
against Magin Salipot, wherein he alleged that he was the share-tenant of the
Lim spouses. Knowing fully well that his right of legal redemption is based
on his status as share-tenant, he still admitted, six months later, in Crim.
Case 532-U, that he was the administrator of five (5) parcels of land owned
by the Lim spouses in Armenia, Uson, Masbate. His admission, which is
clearly adverse to his own interest, constitutes an admission receivable
against him. A man's act, conduct and declaration, whenever made, if
voluntary, is admissible against him for it is fair to presume that they
correspond with the truth, and it is his fault if they do not (US vs. Ching Po,
23 Phil. 578, 583).
Furthermore, the observation of the court a quo is correct in taking judicial
notice of the proceedings in other causes, because of their close connection
with the matter in controversy. (Moran, Comments on the Rules of Court,
Vol. 5, 1980 ed. P. 48)
Aside from his own admission that he was the administrator of the Lim
spouses, there is no clear and positive proof that Gerardo Rupa performed
the duties of a tenant in personally tilling and cultivating the land which he
allegedly tenanted. From the decision rendered in Crim. Case 532-U,
prosecution witnesses Pablito Arnilla and Antonieta Rongasan admitted that
they were the hired laborers of Gerardo Rupa in tilling the land in question
(Under R.A. 1199, a share tenant must personally till the land, possibly with
the aid of the immediate farm household). The aforenamed witnesses may
not have been aware of the implication in admitting that they were the hired
laborers of Gerardo Rupa. Their admission detracts from the veracity of the
claim of Gerardo Rupa that he personally tilled and cultivated the land as
share tenant. As found by the trial court in the said criminal case, "the said
piece of evidence (referring to the admissions) of the prosecution is
sufficient to create doubt that there is motive on their part, to testify falsely
in favor of the complainant Gerardo Rupa, who is so interested in redeeming
the property of Magin Salipot wherein Mariano Luzong is the tenant (Exh. 6,
page 4).
As to Gerardo Rupa's claim of tenancy, Republic Act 1199, which governs

the relations between landholders and tenants of coconut lands, defines a
tenant as a person who, himself and with the aid available from within his
immediate farm household, cultivates the land belonging to, or possessed by
another with the latter's consent for purposes of production and sharing the
produce with the landholder under the share tenancy system (Sec. 5 (a) RA
1199). A person who does not work or till the land is not a tenant (Rural
Progress Administration v. Dimson, L-6068, April 26, 1955; Juanito Viernes
v. Rodrigo Reyes, CA-GR No. SP-05989, Feb. 24, 1977). For a person to be
considered a tenant, one must perform personally all the phases of
cultivation with the aid of the immediate members of his family. Thus, if a
tenant merely hires laborers to do all the labor, he is deemed to have waived
or abandoned his tenancy rights over the land (Pellejera vs. Lopes. CA-GR
No. SP-06719, Oct. 28, 1971). Thus, absent personal cultivation on the part
of the plaintiff, no share tenancy relationship can be said to exist between
the Lim spouses and Gerardo Rupa.
There is further evidences to show that Gerardo Rupa could not have been
the tenant of the Lim spouses over the lot in question at the time of the sale.
In his testimony, Vicente Lim, owner of the land in question, testified that
Gerardo Rupa was his comprador or agent of copra, and had never been his
tenant. He also stated that the plaintiff was the administrator of his five
parcels of land in Arsenia, Uson, Masbate (TSN, March 11, 1985, p. 14).
This claim is corroborated by the Municipal Treasurer of the Municipality of
Uson, Masbate, certifying that Gerardo Rupa had been engaged in business
as copra buyer of Armenia, Uson, Masbate from May 19, 1978 to October
10, 1979 (Exh. 4).6
Hence, this petition was filed to seek a reversal of the decision of the CA.
According to RUPA, the CA erred in declaring that he is not a share tenant based
on passing statements contained in a decision in another case and on the certificate
issued by the Office of the Municipal Treasurer that RUPA was engaged in
business as copra buyer from May 19, 1978 to October 10, 1979. Consequently,
this Court is asked to determine the real status of RUPA, who claims to be a tenant
of the subject land and entitled to the benefits of tenancy laws. SALIPOT objects,
contending that the instant petition should be dismissed considering that the issue
raised is factual and that the admission made by RUPA in the course of a judicial
proceeding is a substitute for and reason to dispense with the actual proof of facts.
We do not agree with the contentions of private respondent SALIPOT. The CA

committed reversible error in relying mainly on statements made in a decision in
another case, and, secondarily on the certificate of the Municipal Treasurer as basis
for establishing the status of petitioner as share-tenant in the subject land.
True, whether a person is a tenant or not is basically a question of fact and the
findings of the respondent CA and the trial court are, generally, entitled to respect
and non-disturbance.7 In Talavero vs. Court of Appeals,8 this Court held that a
factual conclusion made by the trial court that a person is a tenant farmer, if it is
supported by the minimum evidence demanded by law, is final and conclusive and
cannot be reversed by the appellate tribunals except for compelling reasons.
Inversely, a factual conclusion by the appellate court that the evidence fails to
establish the status of a person as a tenant farmer is conclusive on the parties and
carries even more weight when said court affirms the factual findings of the trial
court. In the case at bar, however, we find there are such compelling reasons for
this Court to apply the exception of non-conclusiveness of the factual findings of
the trial and appellate courts on the ground that the "findings of fact of both courts
is premised on the supposed absence of evidence but is in actuality contradicted by
evidence on record."9 A careful examination of the record reveals that, indeed, both
the trial court and the appellate court overlooked and disregarded the
overwhelming evidence in favor of RUPA and instead relied mainly on the
statements made in the decision in another case.
A tenant is defined under Section 5 (a) of Republic Act No. 1199 as a person who
himself and with the aid available from within his immediate farm household
cultivates the land belonging to or possessed by another, with the latter's consent,
for purposes of production, sharing the produce with the landholder under the share
tenancy system, or paying to the landholder a price certain or ascertainable in
produce or in money or both under the leasehold tenancy system. Briefly stated, for
this relationship to exist, it is necessary that:
1. The parties are the landowner and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.10
Upon proof of the existence of the tenancy relationship, RUPA could avail of the
benefits afforded by RA 384411 , as amended, particularly, Section 12 thereof
which reads:
Sec. 12. Lessee's right of redemption. — In case the landholding is sold to a

third person without the knowledge of the agricultural lessee, the latter shall
have the right to redeem the same at a reasonable price and
consideration: Provided, That the entire landholding sold must be
redeemed: Provided, further, That where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the extent
of the area actually cultivated by him. The right of redemption under this
Section may be exercised within two years from the registration of the sale,
and shall have priority over any other right of legal redemption.
As correctly pointed out by the CA, this right of redemption is validly exercised
upon compliance with the following requirements: a) the redemptioner must be an
agricultural lessee or share tenant; b) the land must have been sold by the owner to
a third party without prior written notice of the sale given to the lessee or lessees
and the DAR in accordance with sec. 11, RA 3844, as amended; c) only the area
cultivated by the agricultural lessee may be redeemed; d) the right of redemption
must be exercised within 180 days from notice; and e) there must be an actual
tender or valid consignation of the entire amount which is reasonable price of the
land sought to be redeemed.12
However, as aforesaid, the CA failed to take into account the other material
evidence on record to arrive at its finding that RUPA was not a tenant-farmer. The
decision dated March 11, 1985 relied upon by the CA stemmed from Criminal
Case No. 532-U for Malicious Mischief which was instituted upon a complaint
filed by RUPA against one Mariano Luzong who happens to be the son-in-law of
SALIPOT. According to RUPA, Mariano Luzong destroyed the banana and
cassava plants in his farm in Armenia, Uson, Masbate. It was stated in the decision
that RUPA "claimed that he is the administrator of the five parcels of land owned
by Patrocinio Lim in Armenia, Uson, Masbate"13 ; and that the "prosecution
witnesses, Pablito Arnilla, and Antonieta Bongasan, the alleged eyewitnesses to the
destruction of the banana plants and cassava plants admitted being hired laborers
of Gerardo Rupa in tilling the latter's farm.14
It is believed that the statements in the said decision are not sufficient basis to
overcome the rights of RUPA as provided in the Constitution and agrarian statutes
and upheld by this Court. The essence of agricultural tenancy lies in the
establishment of owner-cultivatorship and the economic family-size farm as the
basis of Philippine agriculture, and as a consequence, divert landlord capital in
agriculture to industrial development.15
The statements made in the decision that "[Rupa] claimed that he was made
administrator by the Lim spouses of their five (5) parcels of land in Armenia,
Uson, Masbate" and that the "prosecution witnesses in that case, namely, Pablito
Arnilla and Antonieta Rongasan admitted that they were hired laborers of Rupa in
tilling the land in question" should not have been relied upon by the CA to
conclusively disprove the tenancy relationship.
First of all, we must look at the context in which these statements were made. The
admission made by RUPA as stated in the decision was made, as mentioned
earlier, in a criminal case for malicious mischief which RUPA filed against one
Mariano Luzong, son-in-law of SALIPOT, on the ground that the latter destroyed
the banana and cassava plants growing in RUPA's farm. Said statement was
apparently made to prove RUPA's standing to file the complaint and to prove how
he could have witnessed the destruction made by said person.
Second, in claiming that he was administrator of the property, RUPA, a farmer of

limited education must have used the word "administrator" in a loose sense to
mean one taking care of a certain piece of property by clearing and planting on the
same. As aptly pointed out by counsel for RUPA during the trial, with no objection
from the counsel of SALIPOT, "under common usage in the locality, the term
administrator is used interchangeably with tenancy.16
Third, the CA did not bother to explain its finding on the "inherent incompatibility"
between being a tenant-farmer and an administrator or overseer. According to
RUPA, he was tenant of one parcel of land belonging to the Lim spouses and
administrator or overseer of the other four parcels of land owned by the said
spouses. SALIPOT and his witnesses had interchangeably claimed RUPA to be an
overseer and a copra agent or copra buyer. As overseer, he may have been
receiving a fixed salary. As tenant under our legal definition, he may have been
sharing the harvests with the landowner. This may well lead a person to find an
incompatibility between the two. However, one could in fact be overseer of a
parcel of land, supervising the laborers therein and receiving a fixed salary for
one's services, and at the same time, act as tenant farmer in another landholding.
Fourth, the testimony of the prosecution witnesses that they were "hired laborers"
should not have been given significant weight by the CA. The rule is well-settled
that the rights of a person cannot be prejudiced by the declaration, act or omission
of another, except as provided by the Rules of Court in cases of admission by a co-
partner, agent, conspirator and privies. The said witnesses do not come under any
of these exceptions.17
As regards the certificate issued by the Office of the Treasurer to the effect that
RUPA was a copra buyer from May 19, 1978 to October 10, 1979, we find that this
does not necessarily rule out RUPA's claim that he was tenant-farmer since 1962.
RUPA has satisfactorily explained that "pursuing two or three lines of work is
nothing new. In coconut lands, harvest seasons come far and in between, and the
tenant can always engage in the business of copra-buying in
the interim."18 Moreover, the dates indicated therein cover only a short period of
time as against RUPA's claim that he was tenant from 1963 until his ejectment
sometime in 1981.
We are therefore constrained to overturn the appealed judgment insofar as it ruled
that the records do not establish RUPA'S status as an agricultural tenant. Indeed,
the testimony of RUPA and his witnesses in open court, in our view, had not been
convincingly rebutted and we have no reason to doubt the veracity of the
testimonies of his witnesses. Certainly, the passing statements contained in the
decision in the criminal case for malicious mischief cannot overcome the
evidentiary value of the testimonies of said witnesses. A meticulous review of the
record would have found overwhelming evidence in favor of RUPA. A scrutiny of
the entire evidence on hand would be in line with the State's policy of achieving a
dignified existence for the small farmers free from pernicious institutional
restraints and practices.19
RUPA's evidence to prove the tenancy relationship consisted of his own testimony
and those of his witnesses Jose V. Seraspi, Gregorio Mortal, Hermogenes Mahinay
and Alfredo Patotoy. The foregoing evidence comes from persons actually residing
where the land is located from whose declarations it appears that RUPA has
physically possessed the landholding continuously from 1963 until he was ejected
from it. RUPA lives on the landholding and he has built a house next to the copra
kiln. It has also been established that RUPA has cultivated the land from the time
he has taken possession thereof in 1963, although there may have already been
existing coconut trees in the landholding. At this point it is apt to quote the
disquisition of this Court in Guerrero vs. Court of Appeals20 regarding the
cultivation of coconut, to wit:
The definition of cultivation is not limited merely to the tilling, plowing or

harrowing of the land. It includes the promotion of growth and the care of
the plants, or husbanding the ground to forward the products of the earth by
general industry. The raising of coconuts is a unique agricultural enterprise.
Unlike rice, the planting of coconut seedlings does not need harrowing and
plowing. Holes are merely dug on the ground of sufficient depth and
distance; the seedlings placed in the holes and the surface thereof covered by
soil. Some coconut trees are planted only every thirty to a hundred years.
The major work in raising coconuts begins when the coconut trees are
already fruit-bearing. Then it is cultivated by smudging or smoking the
plantation, taking care of the coconut trees, applying fertilizer, weeding and
watering, thereby increasing the produce.
The fact that RUPA has been planting coconut seedlings and minor crops in the
vacant portions of the subject land as well as cleaning and gathering coconuts to
process them into copra is borne out by the records. Further indicating the tenancy
relationship between the landlord and RUPA is their agreement to share 50/50. The
sharing arrangement taken together with other factors characteristic of tenancy
shown to be present in the case at bar, strengthens the claim of RUPA that indeed,
he is a tenant.
On the other hand, the stand of SALIPOT that RUPA was merely a copra agent
and overseer and that one Hermogenes Mahinay was the tenant of the Lims from
1963 up to the time he bought the subject land in 1979 is belied by the records.
SALIPOT offered in evidence his own testimony and those of witnesses Arnulfo
Morata, Felipe Gelordo, Mariano Luzong and Vicente Lim, Sr. to support this
version.
SALIPOT testified that he is a farmer and resident of Armenia, Uson, Masbate;

that Hermogenes Mahinay was the tenant of the Lims since 1962 until 1979 when
he purchased the property that he bought the property in July 29 or 30, 1979; that
two deed of sale were executed over the same property, one in July 30, 1979 and
another in January 1981, because he had not yet paid in full the purchase price; that
RUPA was the copra agent of Lim.21
Vicente Lim, Sr. corroborated the said testimony of SALIPOT.22 Arnulfo Morata

(MORATA) and Felipe Gelordo (GELORDO) testified that they were both farmers
residing in Armenia, Uson, Masbate; both stated that it was Hermogenes Mahinay
who tenanted the landholding; and that RUPA was merely the overseer of the
same. According to MORATA he always passes by the subject landholding
because his own land is at the far end of the area but he never saw RUPA in the
subject land.23 However, on cross-examination, he stated that the first time he saw
Mahinay in the land in question was only in 1979.24 On the other hand, according
to GELORDO, he is familiar with the facts of the case as he stays on a parcel of
land opposite the subject landholding. He stated that he did not see RUPA occupy
the subject landholding.25 But on cross-examination, GELORDO admitted that the
matters he was testifying on were told to him by SALIPOT.26
It is odd that MORATA and GELORDO testified that they never saw RUPA in the
subject landholding of which SALIPOT alleged RUPA to have been an
administrator. Even more strange is the testimony of MORATA that he only saw
Mahinay in the subject land sometime in 1979 contrary to SALIPOT's claim that
he has been tenant of the subject land since 1962. Further, GELORDO admitted
that he was testifying on matters as told to him by SALIPOT. The testimonies of
MORATA and GELORDO are clearly flawed and detract from their credibility.
Over and above the foregoing, RUPA has successfully rebutted the claims of
SALIPOT in presenting Hermogenes Mahinay himself in his favor. Hermogenes
Mahinay himself testified that he is a farmer and resident of Malamag, Pio V.
Corpus, Masbate and presently, Armenia, Uson, Masbate; that he knows the parties
in the case; that he transferred from Pio V. Corpus to Armenia, Uson in 1972; that
RUPA was the one working the subject land; that he stayed in the land in question
for less than a year; that he was never a tenant of the subject land from 1962 to
1979 contrary to the claim of SALIPOT.27 On cross-examination, he reiterated that
he was never a tenant but RUPA was; that he executed an affidavit that RUPA was
never a tenant in the land in question without reading the same because he doesn't
know how to read and write; that he affixed his thumb mark anyway because he
was told that the contents were good; that he was just told to affix his thumb
mark.28 There is no reason to doubt the credibility of this witness who has candidly
and straightforwardly denied ever being a tenant of the subject land.
We are also inclined to believe the position of RUPA that he came to know of the
sale of the land to SALIPOT only on February 16, 1981 as evidenced by a letter of
the same date of the former landowner Patrocenia Yu Lim to RUPA informing the
latter to give up possession of the land to SALIPOT as the land had already been
sold to the latter.29 Thus, the action for redemption commenced on March 26, 1981
was filed within the six-month reglementary period. SALIPOT is likewise
estopped from claiming that the true purchase price is P15,000.00 instead of
P5,000.00 as reflected in the deed of sale, which was admittedly done to lower the
tax liabilities of the parties to the sale.30 We cannot countenance this act of
misstating the true purchase price as a means to circumvent our tax laws. Hence,
SALIPOT cannot claim that the amount of P5,000.00 consignated by RUPA is
inadequate for purposes of exercising the right of redemption.
RUPA has since passed away and the right now devolves to his heirs, as the right
to redeem is a property right which is transmissible to the heirs.31 The issue on
damages and share of harvests was not raised before the CA for failure of RUPA to
file his memorandum, hence, we cannot pass upon the same. It is well-settled that a
party is not permitted to raise before the Supreme Court an issue which he did not
raise in the Court of Appeals.32
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of

Appeals, which affirmed that of the Regional Trial Court, is REVERSED and SET
ASIDE.
SO ORDERED.1âwphi1.nêt

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KINDS OF SUCCESSION

In re estate of the deceased Victoriana Saavedra. MACARIO MACROHON

Frank H. Young and Pablo Lorenzo for appellant.

This executor submitted a scheme of partition and distribution of the property in

1. That Victoriana Saavedra died in the municipality and Province of

4. That the interest parties in this proceeding herewith submit to this

We hereby likewise declare that Macario Macrohon Ong Ham is a native of

Ong Ka Chiew, residing at San Roque, Zambaoanga, P. I., about 20 years of

Lot No. 838 — A, proceeding 7880, certificate No. 1257

We do hereby agree jointly and individually, that our properties above

In case of the death of Macario Macrohon Ong Ham before Victoriana

In case that Victoriana Saavedra should survive Macario Macrohon Ong

Lot No. 838 — A, proceeding 7880, certificate No. 1257

Should Victoriana Saavedra die before Macario Macrohon Ong Ham, we

We individually and cojointly declare that the contents of this document

I. In holding in its auto, of November 26, 1926, that the deceased, Victoriana

We do agree jointly and individually that our properties above described be

In case of the death of Macario Macrohon Ong Ham before Victoriana

In case that Victoriana Saavedra should survive Macario Macrohon Ong

Lot No. 838 — A, proceeding 7880, certificate No. 1257

Should Victoriana Saavedra die before Macario Macrohon Ong Ham, we

The first is called testamentary, the second legal succession.

The part of the will invoked by the appellant, states:

In case of the death of Macario Macrohon Ong Ham before Victoriana

One-half of these seventeen parcels of land belong to the widower, Macario

MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS, LEONCIO

Teofilo Sison and Nicanor Sison for plaintiffs-appellants.

2. Sa panahon ng aking pangalawang asawa, MAXIMA SANTOS DE

1. Ang kalahati ng lahat ng aming pag-aari, matapos mabayaran ang lahat ng

The above testamentary provisions may be translated as follows:

2. During my second marriage with Maxima Santos de Blas, I possessed and

Q — Was there anybody who asked you to prepare this document?

A — Don Simeon Blas asked me to prepare this document (referring to

Q — To whom do you refer with the word "they"?

The above testimony is fully corroborated by that of Leoncio Gervacio, son-in-law

Q — Please state to the Court?

A — My children were claiming from their grandfather Simeon Blas the

MAUNAWA NG SINO MANG MAKABABASA:

Na akong si MAXIMA SANTOS DE BLAS, nasa hustong gulang, kasal kay

Na aking nabasa at naunawa ang testamento at huling kalooban na nilagdaan

SA KATUNAYAN NG LAHAT NG ITO ay nilagdaan ko ang kasulatang

(Fdo.) MAXIMA SANTOS DE

and which, translated into English, reads as follows:

KNOW ALL MEN BY THESE PRESENTS:

IN WITNESS WHEREOF, I signed this document this 26th day of

(Sgd.) MAXIMA SANTOS DE

Compromise is a contract by which each of the parties in interest, by

Counsel for the defendant-appellee claims Exhibit "A" is a worthless piece of

It is next contended by the defendant-appellee that Maxima Santos complied with

31. Paco, Obando, Bulacan 5.8396 has.

ANTONIO TUASON, JR., petitioner,

Araneta, Mendoza & Papa for petitioner.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General

Sometime in 1952 the petitioner's attorney-in-fact had Lot 29 filled, then

On January 9, 1963, however, the Commissioner reversed himself and considered

Net income per orig. investigation ............... P211,095.36

Less: Personal exemption ..................................... 1,800.00

The petitioner's motion for reconsideration of the foregoing deficiency assessment

Hence, the present petition.

(1) Capital assets. — The term "capital assets" means property held

When the petitioner obtained by inheritance the parcels in question, transferred to

We do not think Section 183(a) of the National Internal Revenue

ACCORDINGLY, the judgment of the Court of Tax Appeals is affirmed, except