* B u tt e v s . M a n u e l   U y   & S o n s , I n c . , G . R . N o .

L - 1 5 4 9 9 , F e b r u a r y 2 8 , 1 9 6 2

FACTS

1.    Jose V. Ramirez was a co-owner of a house and lot located at Sta Cruz, Manila. Upon the death of Jose V.
Ramirez, all his property including the 1/6 undivided share was bequeathed to his children and
grandchildren and 1/3 of the free portion to Mrs. Angela M. Butte.

2.    Mrs. Marie Garnier Vda de Ramirez sold the property to Manuel Uy and Sons, Inc. including the
undivided 1/6 share  property in Sta Cruz, Manila. On the same day, a copy of letter regarding the
above-mentioned sell was sent to Bank of the Philippine Islands, as administrator of the property of Jose
V. Ramirez.

3.    Mrs. Angela M. Butte filed a case against Manuel Uy and Sons, Inc for legal redemption when the latter
refused Mrs. Butte to redeem the said sold property.

ISSUE

Whether or not Mrs. Angela M. Butte has the right of succession to exercise legal redemption over the
share sold by Mrs. Marie Garnier Vda de Ramirez.

HELD

Yes, Mrs. Angela M. Butte has the right of succession to exercise legal redemption over the share sold by
Mrs. Marie Garnier Vda de Ramirez for being one of the co-owners of the heirs of the 1/6 undivided
property of Jose V. Ramirez.

According to Article 1620 of the Civil Code of the Philippines, a co-owner of a thing may exercise the
right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third
person. If the price of the alienation is gross expensive, the redemptioner shall pay only a reasonable
one.

Should two or more co-owners desire to exercise the right to redemption, they may only do so in
proportion to the share that may respectively have in the thing owned in common.
*Estate of  Hemady  vs. Luzon Surety, G.R. No. L-8437, November 28, 1956

Facts: Luzon Surety Co. filed a claim against the Estate of Hemady 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. All of these were in consideration of the Luzon Surety Co.’s having
guaranteed the various principals in favour of different creditors.

Luzon Surety 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

The lower court dismissed the claims of Luzon on the ground that whatever losses may occur after
Hemady's death, .are not chargeable to his estate, because upon his death he ceased to be guarantor.

The administratrix also 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. They also added that since a new requirement has been added for a person to
qualify as a guarantor, that is: integrity- 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.

Issue: WON the obligations of Hemady to Luzon Surety were transmitted to his heirs.

Ruling: Yes.

Under Art. 1311 of the New Civil Code, 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 expressely so provide, thereby confirming Article 1311 already qouted.

"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."

Therefore, the general rule is that a party's contractual rights and obligations are transmissible to the
successors.

Although Art. 1311 admits of 3 exceptions: a. nature of the obligation; b. intransmissibility by stipulation
of the parties; c. intransmissibilty by operation of law, these exceptions do not apply in the case.
First, the surety or guarantor does not warrant the conclusion that his peculiar individual qualities are
contemplated as a principal inducement for the contract. Creditor Luzon Surety Co. only expect of K. H.
Hemady reimbursement of the moneys that the Luzon Surety Co. might have to disburse on account of
the obligations of the principal debtors. It was indifferent that the reimbursement should be made by
Hemady himself or by someone else in his behalf, so long as the money was paid to it.

Second, the text of the agreements sued upon nowhere indicate that they are non-transferable.
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.

Lastly, 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.

That integrity, capacity to bind himself, and sufficient property to answer for the obligation are purely
personal is of no merit. The law requires these qualities to be present only at the time of the perfection
of the contract of guaranty. 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.

Thus, 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.
* N a ti o n a l H o u s i n g A u t h o r i t y v s . A l m e i d a , G . R . N o . 1 6 2 7 8 4 , J u n e 2 2 , 2 0 0 7

FACTS:
The Land Tenure Administration (Predecessor of NHA) awarded to
Margarita Herrera several portions of land. Margarita Herrera had two children:
Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera.
Beatriz Herrera-Mercado predeceased her mother and left heirs.
Margarita Herrera passed away on October 27, 1971.
Francisca Herrera, the
remaining child of the late Margarita Herrera executed a Deed of Self-Adjudication
claiming that she is the only remaining relative, being the sole surviving daughter
of the deceased. She also claimed to be the exclusive legal heir of the late
Margarita Herrera. The Deed of Self-Adjudication was based on a Sinumpaang
Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The
pertinent portions of which are as follows:
SINUMPAANG SALAYSAY
Akong si MARGARITA HERRERA x x x sa ilalim ng panunumpa ay
malaya at kusang loob kong isinasaysay at pinagtitibay itong mga
sumusunod: x x x 2. Na ang nasabing lote ay aking binibile, sa
pamamagitan ng paghuhulog sa Land Tenure Administration x x x; 3. Na
dahilan sa ako’y matanda na at walang ano mang hanap buhay, ako ay
nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at
ang tinitirikan o solar na nasasabi sa unahan ay binabayaran ng kaniyang
sariling cuarta sa Land Tenure Administration; 4. Na alang-alang sa
nasasaysay sa unahan nito, sakaling ako’y bawian na ng Dios ng aking
buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi
kong anak na FRANCISCA HERRERA, x x x, o sa kaniyang mga
tagapagmana at; x x x
The said document was signed by two witnesses and notarized. The
witnesses signed at the left-hand side of both pages of the document with the said
document having 2 pages in total. Margarita Herrera placed her thumbmark above
her name in the second page and at the left-hand margin of the first page of the
document.

ISSUE: Can the NHA rely on the “Sinumpaang Salaysay” by transferring the
grant of the aforementioned lots in favor of the heirs of Francisca and disregard the
other heirs of Margarita?

HELD: No. When the petitioner received the “Sinumpaang Salaysay,” it

should have noted that the effectivity of the said document commences at the time
of death of the author of the instrument; in her words “sakaling ako’y bawian na
ng Dios ng aking buhay…” Hence, in such period, all the interests of the person
should cease to be hers and shall be in the possession of her estate until they are
transferred to her heirs by virtue of Article 774 of the Civil Code. Hence, the
transfer mandated by the “Sinumpaang Salaysasay” is embodied in a will, as such,
the same must first be probated before it can effectively transfer property in
accordance with the New Civil Code
*Genato  vs.  Bayhon, G.R. No. 171035, August 24, 2009

WILLIAM ONG GENATO, Petitioner, vs. BENJAMIN BAYHON, MELANIE BAYHON, BENJAMIN BAYHON, JR.,
BRENDA BAYHON, ALINA BAYHON-CAMPOS, IRENE BAYHON-TOLOSA, and the minor GINO BAYHON, as
represented herein by his natural mother as guardian-ad-litem, JESUSITA M. BAYHON, Respondents.

Preliminaries: The death of a person does not extinguish his obligation. At bar is a Petition for Review on
Certiorari assailing the Decision of the Court of Appeals and Resolution denying the petitioner’s motion
for reconsideration. This is a consolidated case stemming from two civil cases filed before the Regional
Trial Court for the payment of a debt by the respondent.

Facts:

Respondent Benjamin Bayhon obtained a loan from the petitioner amounting to P1,000,000.00
to be paid monthly with 5% interest. That respondent executed a Deed of Real Estate Mortgage in favor
of the petitioner to cover the loan which was conditioned upon the personal assurance of the petitioner
that the said instrument is only a private memorandum of indebtedness and that it would neither be
notarized nor enforced according to its tenor. During the proceeding for the reconstitution of said real
estate property before the RTC, Quezon City, Branch 87 petitioner filed an Answer in Intervention in the
said proceeding and attached a copy of an alleged dacion en pago covering said lot. Respondent assailed
the dacion en pago as a forgery alleging that neither he nor his wife, who had died 3 years earlier, had
executed it. In separate case petitioner filed an action for specific performance, before the RTC, Quezon
City. In his Complaint, petitioner alleged that respondent failed to pay the loan and executed on October
21, 1989 a dacion en pago in favor of the petitioner. The dacion en pago was inscribed and recorded
with the Registry of Deeds of Quezon City. Petitioner further averred that despite demands, respondent
refused to execute the requisite documents to transfer to him the ownership of the lot subject of the
dacion en pago. Petitioner prayed, inter alia, for the court to order the respondent to execute the final
deed of sale and transfer of possession of the said lot. In the decision of the lower court, it stated that
the dacion en pago was novated by the payments made by the respondent and that the Deed of Real
Estate Mortgage was void considering that respondent’s wife was already dead during the execution of
the deed. On appeal by the respondent to the CA, the CA held that the real estate mortgage and the
dacion en pago were both void. The appellate court ruled that at the time the real estate mortgage and
the dacion en pago were executed, the wife of respondent Benjamin Bayhon was already dead. Thus,
she could not have participated in the execution of the two documents. The appellate court struck down
both the dacion en pago and the real estate mortgage as being simulated or fictitious contracts pursuant
to Article 1409 of the Civil Code. During the appeal, respondent Benjamin Bayhon died. The Court of
Appeals held further that while the principal obligation is valid, the death of respondent Benjamin
Bayhon extinguished it. The heirs could not be ordered to pay the debts left by the deceased.

Issue:

Whether or not the heirs of the decedent can be ordered to pay the debt left by the
deceased?

Held:
 The Court held, with regards to the dacion en pago, the Court affirm the ruling of the
appellate court that the subject dacion en pago is a simulated or fictitious contract, and hence
void. The evidence shows that at the time it was allegedly signed by the wife of the respondent,
his wife was already dead. This finding of fact cannot be reversed. With regards to the appellate
court extinguishing the obligation of respondent, as a general rule, obligations derived from a
contract are transmissible. According to Article 1311 of the Civil Code, contracts take effect only
between the parties, their assigns and heirs, except in case where the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or by provision
of law. The heir is not liable beyond the value of the property he received from the decedent.
The loan in this case was contracted by respondent. He died while the case was pending before
the Court of Appeals. While he may no longer be compelled to pay the loan, the debt subsists
against his estate. No property or portion of the inheritance may be transmitted to his heirs
unless the debt has first been satisfied.

The decision of the Court of Appeals is AFFIRMED with the MODIFICATION that the obligation to pay the
principal loan and interest contracted by the deceased Benjamin Bayhon subsists against his estate.
*Santos vs.  Lumbao, G.R. No. 169129, Match 28, 2007

DOCTRINE: Whatever rights and obligations the decedent have over the property were transmitted to
the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent
to the extent of the value of the inheritance of the heirs.
FACTS:
1. Petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and
surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. Petitioners
Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.
2. .
3. Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in
the estate of her deceased mother, Maria Catoc (Maria), who died intestate.
a. It was evidence by documents entitled, “Bilihan ng Lupa”
4. Respondents Lumbao later on took actual possession thereof and built a house which they have
been occupying as exclusive owners up to the present.
5. Lumbaos made several demands from Rita and the heirs for them to execute the necessary
documents to effect the issuance of a separate title in their favor.
a. Lumbaos alleged that prior to her death, Rita informed respondent Proserfina Lumbao
she could not deliver the title to the subject property because the entire property
inherited by her and her co-heirs from Maria had not yet been partitioned
6. Lumbaos alleged that the petitioners acted fraudulently and are conspiring with another by
executing a Deed of Extrajudicial Settlement portioning among themselves the properties of
Maria, including the subject property.
7. Lumbaos then sent a formal demand to petitioners but the latter refused to reconvey the
subject property. So the Lumbaos filed a Complaint for Reconveyance before RTC of Pasig City.
8. Petitioners denied the alleged sale to Lumbaos and that the Extrajudicial Settlement was duly
published as required by law.
9. Lumbaos then amended their complaint, discovering that the petitioners executed a Deed of
Real Estate Mortgage in favour of Julieta S. Esplana for P30,000.
10. The RTC ruled in favor of the petitioners and ordered the Lumbaos to pay them P30,000 for
expenses incurred.
11. The CA ruled in favor of the respondent spouses Lumbao.
12. Hence the petition:
a. Petitioners contend that they are not bound by the “Bilihan ng Lupa” because it is null
and void for being falsified because of the following:
i. one of those documents made it appear that petitioners Virgilio and Tadeo were
witnesses to its execution and that they appeared personally before the notary
public, when in truth and in fact they did not.
ii. Identity of the properties were not established by the evidence presented
iii. Respondents are estopped by laches from claimining
iv. Claim on the properties had already prescribed.

ISSUE: Are the petitioner heirs bound to the “Bilihan ng Lupa” executed by the Rita, their mother, in
favor of the respondent spouses Lumbao?

HELD: Yes. Petition denied.

1. General Rule: heirs are bound by contracts entered into by their predecessors-in-interest
 2. whatever rights and obligations the decedent have over the property were transmitted to the
heirs by way of succession, a mode of acquiring the property, rights and obligations of the
decedent to the extent of the value of the inheritance of the heirs
3. In the present case the heirs cannot escape the obligation of the deceased since they only
inherited the property.
4. Being heirs, there is privity of interest between them and their deceased mother. They only
succeed to what rights their mother had and what is valid and binding against her is also valid
and binding as against them.
5. Death of a party does not excuse non-performance of a contract which involves a property
right and the rights and obligations thereunder pass to the personal representatives of the
deceased.
6. Heirs must reconvey to the respondent Lumbaos the 107sq. m. lot.
OTHER ISSUE: the documents “Bilihan ng Lupa” is presumed valid being notarized, a public instrument,
unless the contrary has been proved. In the case, petitioners failed to prove the falsity of the
documents.
*Ledesma vs.  McLachlin, G.R. No. 44837, November 23, 1938

FACTS:

In 1916, Socorro Ledesma lived maritally with Lorenzo M. Quitco and had a daughter, Ana Quitco
Ledesma. Their relationship lasted until the year 1921. Nonetheless, Lorenzo executed a deed
acknowledging Ana as his natural daughter and issued in favor of Socorro a promissory note for the
value of P2,000 he received.

Subsequently, Lorenzo married Conchita McLachlin, with whom he had four (4) children. On March 9,
1930, Lorenzo died, and, still later, that is, on December 15, 1932, his father Eusebio Quitco also died. As
Eusebio left properties upon his death, administration proceedings were instituted.

Upon the institution of the intestate of Eusebio, Socorro filed before the committee on claims and
appraisal the promissory note for payment. Eventually, the court issued an order of declaration of heirs
in the intestate of the deceased Eusebio, and Ana was not included therein. Socorro asked for the
reconsideration of said order, however the court denied her petition.

ISSUES:

1. Whether or not the action to recover the sum of P1,500, representing the last installment for the
payment of the promissory has prescribed.

Yes. The fact that the Socorro Ledesma filed her claim 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 should no have been presented in the intestate of Eusebio Quitco, as the said
deceased not the one who executed the same, but in the intestate of Lorenzo M. Quitco. Since it has
been more than ten years from the expiration of the period for the payment of said debt of P1,500 had
elapsed, the action for its recovery has prescribed under section 43, No. 1, of the Code of Civil
Procedure.

2. Whether or not 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.

No. 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.
*Laura Alvarez vs. Intermediate Appellate Court, G.R. No. 68053, May 7, 1990

Facts:
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora.  Herein private respondents,
Estelita, Iluminado and Jesus, are the children of Rufino who died... in 1962 while the other private
respondents, Antonio and Rosario Yanes, are children of Felipe.  Teodora was survived by her child,
Jovita (Jovito) Alib
Aniceto left his children Lots 773 and 823.  Teodora cultivated only three hectares of Lot 823 as she
could not attend to the other portions of the two lots which had a total area of around twenty-four
hectares. 
The record does not show whether the children of Felipe also cultivated some portions of the lots but it
is established that Rufino and his children left the province to settle in other places as a result of the
outbreak of World War II.  According... to Estelita, from the "Japanese time up to peace time", they did
not visit the parcels of land in question but "after liberation", when her brother went there to get their
share of the sugar produced therein, he was informed that Fortunato Santiago,... Fuentebella
(Puentevella) and Alvarez were in possession of Lot 773.
It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF
2694 (29797) covering Lot 773-A with an area of 37,818 square meters.
The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of
Fortunato D. Santiago on September 6, 1938 under TCT No. RT-2695 (28192).
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of
the sum of P7,000.00.[5] Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were...
issued in Fuentebella's name.
After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R.
Vda. de Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of
Negros Occidental, a motion requesting authority to sell Lots 773-A and 773-B.[7] By virtue of a court
order granting said motion,[8] on March 24, 1958,... Arsenia Vda. de Fuentebella sold said lots for
P6,000.00 to Rosendo Alvarez.[9] Hence, on April 1, 1958, TCT Nos. T-23165 and T-23166 covering Lots
773-A and 773-B were... respectively issued to Rosendo Alvarez.
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely,
Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint...
against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros
Occidental for the "return" of the ownership and possession of Lots 773 and 823.  They also... prayed
that an accounting of the produce of the land from 1944 up to the filing of the complaint be made by
the defendants, that after court approval of said accounting, the share or money equivalent due the
plaintiffs be delivered to them, and that defendants be ordered to pay... plaintiffs P500.00 as damages in
the form of attorney's fees.
During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and
another lot for P25,000.00 to Dr. Rodolfo Siason.[12] Accordingly, TCT Nos. 30919 and 30920 were...
issued to Siason,[13] who, thereafter, declared the two lots in his name for assessment purposes.
Issues:
Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and
773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed or...
transmitted by operations (sic) of law to the petitioners without violation of law and due process."
Ruling:
Petitioners further contend that the liability arising from the sale of said Lots Nos. 773-A and 773-B
made by Resendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or
of his estate, after his... death.
Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs.
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of
their father's transaction, which gave rise to the present claim for damages.  That petitioners did not
inherit the property involved herein is... of no moment because by legal fiction, the monetary equivalent
thereof devolved into the mass of their father's hereditary estate, and we have ruled that the hereditary
assets are always liable in their totality for the payment of the debts of the estate.
It must, however, be made clear that petitioners are liable only to the extent of the value of their
inheritance.
*De Borja vs.  Vda. De Borja, G.R. No. L-28040, August 18, 1972

I. Facts:

Francisco de Borja filed a petition for the probate of the will of his wife Josefa Tangco who died
on October 6, 1940 in the Court of First Instance of Rizal, Branch I. The will was probated on April 2,
1941. In 1946, Francisco de Borja was appointed executor and administrator and in 1952, their son, Jose
de Borja, was appointed co-administrator.

When Francisco died on April 14, 1954, Jose became the sole administrator of the testate estate
of his mother, Josefa Tangco. Upon Francisco's death, Tasiana his second wife instituted testate
proceedings in the Court of First Instance of Nueva Ecija, where, in 1955, she was appointed special
administratrix.

The relationship between the children of the first marriage and Tasiana Ongsingco has been
plagued with several court suits and counter-suits, including the three cases at bar. In order to put an
end to all these litigations, they entered a compromise agreement on October 12, 1963 which includes
the condition of selling the Poblacion portion of the Jalajala properties situated in Jalajala, Rizal and that
Jose de Borja obligates himself to pay Tasiana Ongsingco Vda. de de Borja the total amount of P800,000.
They also agree that they mutually withdraw, release and discharge any and all manner of action or
actions, cause or causes of action, suits, debts, claims and demands, in law or in equity, which they ever
had, or now have or may have against each other. Tasiana Ongsingco Vda. de de Borja, upon receipt of
the payment, shall deliver to the heir Jose de Borja all the papers, titles and documents belonging to
Francisco de Borja which are in her possession.

On May 16, 1966, Jose de Borja submitted their compromise agreement to the Court of First
Instance of Rizal and on August 8, 1966, to the Court of First Instance of Nueva Ecija. Tasiana Ongsingco
Vda. de de Borja opposed in both instances. The Rizal court approved the compromise agreement, but
the Nueva Ecija court declared it void and unenforceable. Tasiana Ongsingco Vda. de de Borja appealed
the Rizal Court's order of approval (now Supreme Court G.R. case No. L-28040), while administrator Jose
de Borja appealed the order of disapproval (G.R. case No. L-28568) by the Court of First Instance of
Nueva Ecija. Tasiana Ongsingco argued that the heirs cannot enter into such kind of agreement without
first probating the will of Francisco de Borja.

  Issue: Whether or not the compromise agreement is valid, even if the will of Francisco has not
yet been probated. (Yes)

II. Ruling:

IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of Rizal in Case
No. L-28040 is hereby affirmed; while those involved in Cases Nos. L-28568 and L-28611 are reversed
and set aside. Costs against the appellant Tasiana Ongsingco Vda. de Borja in all three (3) cases.

III. Ratio Decidendi:

Tasiana Ongsingco and the Probate Court of Nueva Ecija rely on this Court's decision in Guevara
vs. Guevara. 74 Phil. 479, wherein the presentation of a will for probate is mandatory and that the
settlement and distribution of an estate on the basis of intestacy when the decedent left a will, is against
the law and public policy. She also argued that Section 1 of Rule 74 of the Revised Rules explicitly
conditions the validity of an extrajudicial settlement of a decedent's estate by agreement between heirs,
upon the facts that "if the decedent left no will and no debts, and the heirs are all of age, or the minors
are represented by their judicial and legal representatives ..." The will of Francisco de Borja having been
submitted to the Nueva Ecija Court and still pending probate when the 1963 agreement was made
which bars the validity of the agreement.

Upon the other hand, Jose de Borja stresses that at the time it was entered into, on October 12,
1963, the governing provision was Section 1, Rule 74 of the original Rules of Court of 1940, which
allowed the extrajudicial settlement of the estate of a deceased person regardless of whether he left a
will or not.

The ruling in the Guevara case is not applicable to the cases at bar. There was here no attempt
to settle or distribute the estate of Francisco de Borja among the heirs before the probate of his will. The
clear object of the contract was merely the conveyance by Tasiana Ongsingco of any and all her
individual share and interest, actual or eventual in the estate of Francisco de Borja and Josefa Tangco.
There is no stipulation as to any other claimant, creditor or legatee. And as a hereditary share in a
decedent's estate is transmitted or vested immediately from the moment of the death of
such causante or predecessor in interest (Civil Code of the Philippines, Art. 777) there is no legal
bar to a successor disposing of her or his hereditary share immediately after such death, even if the
actual extent of such share is not determined until the subsequent liquidation of the estate. 

It is likewise worthy of note in this connection that as the surviving spouse of Francisco de Borja,
Tasiana Ongsingco was his compulsory heir under article 995 of the present Civil Code. Her successional
interest existed independent of Francisco de Borja's last will and testament and would exist even if such
will were not probated. Thus, the prerequisite of a previous probate of the will, as established in the
Guevara and analogous cases, can not apply to the case of Tasiana Ongsingco Vda. de de Borja.

Since the compromise agreement was entered into between Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco, the heir and Tasiana Ongsingco Vda. de de Borja, it
is clear that the transaction was binding on both in their individual capacities, upon the perfection of the
contract, even without previous authority of the Court to enter into the same. The only difference
between an extrajudicial compromise and one that is submitted and approved by the Court, is that the
latter can be enforced by execution proceedings. Art. 2037 of the Civil Code is explicit on the point:

Art. 2037. A compromise has upon the parties the effect and authority of res judicata; but there
shall be no execution except in compliance with a judicial compromise.

The Court conclude that in so doing, the Rizal court acted in accordance with law, and,
therefore, its order should be upheld, while the contrary resolution of the Court of First Instance of
Nueva Ecija should be, and is, reversed.

IV. Doctrine/Principle:

Art. 777. The rights to the succession are transmitted from the moment of death of the
decedent.
 Successional interest existed independent of the last will and testament and would exist even if
such will were not probated at all.

Art. 2037. A compromise has upon the parties the effect and authority of res judicata; but there
shall be no execution except in compliance with a judicial compromise.
*Bonilla vs.  Barcena, G.R. No. L-41715, June 18, 1976

FACTS
Fortunata Barcena filed an action to quiet title over parcels of land. Pending the proceeding, she died.
The counsel for deceased plaintiff filed a written manifestation praying that the minors Rosalio Bonilla
and Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied the counsel’s
prayer for lack of merit, and dismissed the complaint on the ground that a dead person has no legal
personality to sue.

ISSUE
Whether or not a court action survives, through the heirs, after the death of the plaintiff.

RULING
YES. Article 777 of the Civil Code provides “that the rights to the succession are transmitted from the
moment of the death of the decedent.” From the moment of the death of the decedent, the heirs
become the absolute owners of his property, subject to the rights and obligations of the decedent, and
they cannot be deprived of their rights thereto except by the methods provided for by law.  When
Fortunata Barcena, therefore, died her claim or right to the parcels of land in litigation, was not
extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired
interest in the properties in litigation and became parties in interest in the case. There is, therefore, no
reason for the respondent Court not to allow their substitution as parties in interest for the deceased
plaintiff.
*Ramirez vs.  Baltazar, G.R. No. L-25049, August 30, 1968

FACTS:
Victoriana Eguaras, single, mortgaged a real estate to spouses Baltazar, defendants in this case.
Upon demise of Victoriana, the mortgagees, as creditors of the deceased, filed a petition for the
intestate proceedings of Victoriana's estate, alleging further that plaintiffs Felimon and Monica Ramirez
are heirs of the deceased. Felimon was later appointed as adminstrator but did not qualify so that
Artemio Diawan was appointed as judicial administrator of the estate. The mortgagees then filed a
foreclosure of the property in question and succeeded, after Diawan failed to file an answer against the
petition. The foreclosure sale ensued, the property was bought by the mortgagees themselves and the
sale was confirmed by the court. Felimon sued for the annulment of the entire foreclosure proceedings,
alleging among others the failure of the judicial administrator to protect their interests. Defendants
contended that plaintiffs have no legal capacity to sue and hava no cause of action.

ISSUE: Have plaintiffs the cause of action against the defendant?

HELD: Yes. There is no question that the rights to succession are automatically transmitted to the heirs
from the moment of the death of the decedent. While, as a rule, the formal declaration or recognition to
such successional rights needs judicial confirmation, this Court has, under special circumstances,
protected these rights from encroachments made or attempted before the judicial declaration. In
Pascual vs. Pascual, it was ruled that although heirs have no legal standing in court upon the
commencement of testate or intestate proceedings, this rule admits of an exception as "when the
administrator fails or refuses to act in which event the heirs may act in his place."
*Balus  vs.  Balus, G.R. No. 168970, January 15, 2010

Petitioner Celestino and respondents Saturnino and Leonarda are the children of the spouses Rufo and
Sebastiana Balus. Sebastiana died on 6 September 1978. In 1979, Rufo mortgaged a parcel of land as
security for a loan obtained from a bank. When Rufo failed to pay the loan, the property was foreclosed
and was subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. The
same was not redeemed within the period allowed by law. Hence, a new title was issued in the name
of the Bank. Rufo died on 6 July 1984. On 10 October, 1989, petitioner and respondents executed an
Extrajudicial Settlement of Estate adjudicating to each of the a specific one-third portion of the subject
property. Three years thereafter, respondents bought the subject property from the Bank and a new
title was issued in their name. Meanwhile, petitioner continued possession of the subject lot. The
respondents thus filed a complaint for recovery of possession. However, petitioner alleged that
respondents’ act of buying back the property without notifying him inures to his benefit as co-owner
and that he is entitled to a one-third share of the property.

ISSUE:  Whether or not the subject property forms part of  the estate  of petitioner and respondents’
father

No. The court ruled that the subject property does not form part of the estate of Rufo considering
that ownership over the same was transferred to the bank prior to the death of Rufo. Inheritance
consists of existing property, as well as accrued property, and transmissible rights and obligations at the
time of death of the decedent. Thus, since Rufo lost ownership over the subject property during his
lifetime, the same no longer forms part of his estate to which his heirs may lay claim at the time of his
death. Consequently, his children never inherited the property. The Court further ruled that petitioner
and respondents are not co-owners of the subject property and there is no property to partition, as the
disputed lot never formed part of the estate of their deceased father.
*Uson  vs. Del Rosario, G.R. No. L-4963, January 29, 1953

FACTS
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands involved
in this litigation. Faustino Nebreda left no other heir except his widow Maria Uson. Maria Uson sought to
recover lands held by Maria del Rosario who had four illegitimate children with Nebreda, which the
latter contends that her children are given the status and rights of natural children and are entitled to
the successional rights, and because these successional rights were declared for the first time in the new
code, they shall be given retroactive effect.

ISSUE
Whether or not the illegitimate children may have successional rights under the new Civil Code by way
of its retroactive effect.

RULING
NO. Article 2253 above referred to provides indeed that rights which are declared for the first time shall
have retroactive effect even though the event which gave rise to them may have occurred under the
former legislation, but this is so only when the new rights do not prejudice any vested or acquired right
of the same origin. The law commands that the rights to succession are transmitted from the moment of
death (Article 657, old Civil Code). The new right recognized by the new Civil Code in favor of the
illegitimate children of the deceased cannot, therefore, be asserted to the impairment of the vested
right of Maria Uson over the lands in dispute.
 *Rabadilla  vs. Court of Appeals, G.R. No. 113725, June 29, 2000

FACTS:

 Dr. Jorge Rabadilla, in a codicil (a supplement to a will; an appendix) of Aleja Belleza, was instituted
devisee of Lot No. 1392 with an area of 511,855 square meters with the obligation to deliver 100 piculs
of sugar to herein private respondent every year during the latter's lifetime.
 The codicil provides that the obligation is imposed not only on the instituted heir but also to his
successors-in-interest and that in case of failure to deliver, private respondent shall seize the property
and turn it over to the testatrix's "near descendants."
 Dr. Rabadilla died and was survived by his wife and children, one of whom is herein petitioner.
 Private respondent, alleging failure of the heirs to comply with their obligation, filed a complaint with
the RTC praying for the reconveyance of the subject property to the surviving heirs of the testatrix.
 During the pre-trial, a compromise agreement was concluded between the parties wherein the lessee of
the property assumed the delivery of 100 piculs of sugar to private respondent; however, only partial
delivery was made.
 The trial court dismissed the complaint for lack of cause of action stating that, “While there may be the
non-performance of the command as mandated, exaction from them (the petitioners), simply because
they are the children of Jorge Rabadilla, the title holder/owner of the lot in question, does not warrant
the filing of the present complaint.”
 The CA, reversed the decision and held that the institution of Dr. Rabadilla is in the nature of a modal
institution and a cause of action in favor of private respondent arose when petitioner failed to comply
with their obligation under the codicil, and in ordering the reversion of Lot 1392 to the estate of
testatrix. Thus, the present petition.

ISSUE:
Whether or not private respondent has a legally demandable right against the petitioner, as one of the
compulsory heirs of Dr. Rabadilla.

HELD:
YES.It is a general rule under the law on succession that successional rights are transmitted from the
moment of death of the decedent and compulsory heirs are called to succeed by operation of law. The
legitimate children and descendants, in relation to their legitimate parents, and the widow or widower,
are compulsory heirs. Thus, the petitioner, his mother and sisters, as compulsory heirs of the instituted
heir, Dr. Jorge Rabadilla, succeeded the latter by operation of law, without need of further proceedings,
and the successional rights were transmitted to them from the moment of death of the decedent, Dr.
Jorge Rabadilla.

Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a
person, not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by virtue of
subject Codicil were transmitted to his forced heirs, at the time of his death. And since obligations not
extinguished by death also form part of the estate of the decedent; corollarily, the obligations imposed
by the Codicil on the deceased Dr. Jorge Rabadilla, were likewise transmitted to his compulsory heirs
upon his death.
In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the
condition that the usufruct thereof would be delivered to the herein private respondent every year.
Upon the death of Dr. Jorge Rabadilla, his compulsory heirs succeeded to his rights and title over said
property, and they also assumed his (decedent's) obligation to deliver the fruits of the lot involved to
herein private respondent. Such obligation of the instituted heir reciprocally corresponds to the right of
private respondent over the usufruct, the fulfillment or performance of which is now being demanded
by the latter through the institution of the case at bar. Therefore, private respondent has a cause of
action against petitioner and the trial court erred in dismissing the complaint below.
*Vitug  vs. Court of Appeals, G.R. No. 82027, March 29, 1990

FACTS:

Romarico Vitug and Nenita Alonte were co-administrators of Dolores Vitug’s estate. Rowena Corona was
the executrix. Romarico, the deceased’s husband, filed a motion with the probate court asking for
authority to sell certain shares of stock and real properties belonging to the estate to cover alleged
advances to the estate, which he claimed as personal funds. The advances were used to pay estate
taxes.

Corona opposed the motion on the ground that the advances came from a savings account which
formed part of the conjugal partnership properties and is part of the estate. Thus, there was no ground
for reimbursement. Romarico claims that the funds are his exclusive property, having been acquired
through a survivorship agreement executed with his late wife and the bank.

The agreement stated that after the death of either one of the spouses, the savings account shall belong
to and be the sole property of the surviving spouse, and shall be payable to and collective or
withdrawable by such surviving spouse.

The lower court upheld the validity of the agreement and granted the motion to sell. CA reversed stating
that the survivorship agreement constitutes a conveyance motis causa which did not comply with the
formalities of a valid will. Assuming that it was a donation inter vivos, it is a prohibited donation
(donation between spouses).

ISSUE:

Within the survivorship agreement was valid.

HELD:

YES. The conveyance is not mortis causa, which should be embodied in a will. A will is a personal,
solemn, revocable and free act by which a capacitated persons disposes of his property and rights and
declares or complied with duties to take effect after his death. The bequest or devise must pertain to
the testator.

In this case, the savings account involved was in the nature of conjugal funds. Since it was not shown
that the funds belonged exclusively to one party, it is presumed to be conjugal. It is also not a donation
inter vivos because it was to take effect after the death of one party. It is also not a donation between
spouses because it involved no conveyance of a spouse’s own properties to the other.

It was an error to include the savings account in the inventory of the deceased’s assets because it is the
separate property of Romarico.

Thus, Romarico had the right to claim reimbursement.

A will is personal, solemn, revocable and free act by which a capacitated person disposes of his property
and rights and declares or complies with duties to take effect after his death.

Survivorship agreements are permitted by the NCC. However, its operation or effect must not be
violative of the law (i.e. used as a cloak to hide an inofficious donation or to transfer property in fraud of
creditors or to defeat the legitime of a forced heir.
*Rivera vs. Peoples Bank and Trust Co., G.R. No. 47757, April 17, 1942

FACTS:

Ana Rivera was employed by Edgar Stephenson as housekeeper from the year 1920 until his death on
June 8, 1939. On December 24, Stephenson opened an account in his name with the defendant Peoples
Bank by depositing therein the sum of P1,000. On October 17, 1931, when there was a balance of
P2,072 in said account, the survivorship agreement in question was executed and the said account was
transferred to the name of “Edgar Stephenson and/or Ana Rivera.” At the time of Stephenson’s death
Ana Rivera held the deposit book, and there was a balance in said account of P701.43, which Ana Rivera
claimed but which the bank refused to pay to her upon advice of its attorneys who gave the opinion that
the survivorship agreement was of doubtful validity. Thereupon Ana Rivera instituted the present action
against the bank, and Minnie Stephenson, administratix of the estate of the deceased, intervened and
claimed the amount for the estate, alleging that the money deposited in said account was and is the
exclusive property of the deceased.

ISSUE:

Is the survivorship agreement valid?

RULING:

It is valid. It is an aleatory contract supported by a lawful consideration which is the mutual agreement
of the joint depositors permitting either of them to withdraw the whole deposit during their lifetime,
and transferring the balance to the survivor upon the death of one of them. It is well established that a
bank account may be so created that two persons shall be joint owners during their mutual lives, and
the survivor take the whole on the death of the other. The right to make such joint deposits has
generally been held not to be done away with by statutes abolishing joint tenancy and survivorship
generally as they existed at common law.
*Macam  vs.  Gatmaitan, G.R. No. 42619, March 11, 1937

FACTS:

A will was presented for probate, and no objection was presented. After the judgment had become final
and executor, a codicil made after the execution of the will was presented for probate.

ISSUE:

May the codicil be still probated?

RULING:

Yes, since the codicil may have revoked expressly or impliedly the will and it is, well known that a will is
essentially revocable. It is not indeed essential for both the will and the codicil to have been presented
for probate at the same time. Moreover, opposition to the probate of the codicil may still be allowed,
even if the oppositor had not objected to the will itself. This is because, in the opinion of the oppositor,
the codicil may be deffective.