1. ANGELA M. BUTTE, plaintiff-appellant, vs. MANUEL UY a SONS, INC.

, defendant-
appellee.
Facts:
Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot located at Sta. Cruz, Manila,
issued in the name of the following co-owners: Marie Garnier Vda. de Ramirez, 1/6; José V. Ramirez,
1/6; José E. Ramirez, 1/6; Belen T. Ramirez, 1/6; Rita De Ramirez, 1/6; and José Ma. Ramirez, 1/6.
On October 20, 1951. José V. Ramirez died. Subsequently, Special Proceeding No. 15026 was
instituted to settle his estate, that included the one-sixth (1/6) undivided share in the aforementioned
property.
And although his last will and testament, wherein he bequeathed his estate to his children and
grandchildren and one-third (1/3) of the free portion to Mrs. Angela M. Butte, hereinafter referred to
as plaintiff-appellant, has been admitted to probate, the estate proceedings are still pending up to the
present on account of the claims of creditors which exceed the assets of the deceased. The Bank of the
Philippine Islands was appointed judicial administrator.
Mrs. Marie Garnier Vda. de Ramirez, one of the co-owners of the late José V. Ramirez in the Sta.
Cruz property, sold her undivided 1/6 share to Manuel Uy & Sons, Inc., defendant-appellant herein,
for the sum of P500,000.00.
Formal notice sent to all co-owners as well as to the bank
Mrs. Angela M. Butte, thru Atty. Resplandor Sobretodo, sent a letter and a Philippine National Bank
cashier's check in the amount of P500,000.00 to Manuel Uy a l Son s, I nc. offering to redeem share
sold by Mrs. Marie Garnier Vda. de Ramirez.
This tender having been refused, plaintiff on the same day consigned the amount in
court and filed the corresponding action for legal redemption.
Court – dismissed the plaintiff's complaint on the grounds that she has no right to redeem the property
and that, if ever she had any, she exercised the same beyond the statutory 30- day period for legal
redemptions provided by the Civil Code. The counterclaim of defendant for damages was likewise
dismissed for not being sufficiently established. Both parties appealed directly to this Court.
Issue:
Whether or not plaintiff-appellant, having been bequeathed 1/3 of the free portion of the estate of José
V. Ramirez, can exercise the right of legal redemption over the 1/6 share sold by Mrs. Marie
Garnier Vda. de Ramirez despite the presence of the judicial administrator and pending the final
distribution of her share in the testate proceedings;
Ruling: YES.
That the appellant Angela M. Butte is entitled to exercise the right of legal redemption is clear. As
testamentary heir of the estate of J. V. Ramirez, she and her coheirs acquired an interest in the
undivided one-sixth (1/6) share owned by her predecessor (causante) in the Santa Cruz property,
from the moment of the death of the aforesaid co-owner, J. V. Ramirez,
By law, the rights to the succession of a deceased person are transmitted to his heirs from the
moment of his death, and the right of succession includes all property rights and obligations that
survive the decedent.
"ART. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death The principle of transmission as of the time of the predecessor's death is basic
in our Civil Code, and is supported by other related articles.
Thus, the capacity of the heir is determined as of the time the decedent died (Art. 1034); the legitime is to
be computed as of the same moment (Art. 908), and so is the inofficiousness of the donations inter vivos
(Art. 771). Similarly, the legacies of credit and remission are valid only in the amount due and
outstanding at the death of the testator (Art. 935), and the fruits accruing after that instant are deemed to
pertain to the legatee (Art. 948).
As a consequence of this o f undament al r ul e of succes the heirs of José V. Ramirez acquired his
undivided share in the Sta. Cruz property from the moment of his death, and from that instant, they
became co-owners in the aforesaid property, together with the original surviving coowners of their
decedent (causante).
A co-owner of an undivided share is necessarily a co-owner of the whole. Wherefore, any one of the
Ramirez heirs, as such co-owner, became entitled to exercise the right of legal redemption (retracto de
comuneros) a soon as another co-owner (Maria Garnier Vda. de Ramirez) had sold her undivided share to
a stranger, Manuel Uy & Sons, Inc. This right of redemption vested exclusively in consideration of the
redemptioner's share which the law nowhere takes into account.
ADDTL:
Declaring the consignation of P500,000.00 made by appellant Angela M. Butte duly and properly made;
Declaring that said appellant properly exercised in due time the legal redemption of the one-sixth (1/6)
undivided portion of the land covered by Certificate of Title No. 59363 of the Office of the Register of
Deeds of the City of Manila, sold on December 9, 1958 by Marie Garnier Vda. de Ramirez to appellant
Manuel Uy & Sons, Inc. Ordering appellant Manuel Uy & Sons, Inc. toaccept the consigned price and to
convey to Angela M. Butte the undivided portion abovereferred to, within 30 days

2. ESTATE OF K.H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant and
appellant.
Facts:
The Luzon Surety Co. had filed a claim against the Estate based on twenty different indemnity
agreements, or counter bonds, each subscribed by a distinct principal and by the deceased K.H. Hemady,
a surety solidary guarantor) in all of them, in consideration of the Luzon Surety Co.'s of having
guaranteed, the various principals in favor of different creditors.
The lower court dismissed the claims of Luzon Surety Co., on two grounds: (1) that the premiums due
and cost of documentary stamps were not contemplated under the indemnity agreements to be a part of
the undertaking of the guarantor (Hemady), since they were not liabilities incurred after the execution of
the counterbonds; and (2) that “whatever losses may occur after Hemady’s death, are not chargeable
to his estate, because upon his death he ceased to be guarantor.”
Issue:
WON the obligations/liabilities of the decedent are transmitted upon his death to his heirs
Ruling: YES.
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
The contracts of suretyship entered into by K.H. Hemady in favor of Luzon Surety Co. not being rendered
intransmissible due to the nature of the undertaking, nor by the stipulations of the contracts themselves,
nor by provision of law, his eventual liability thereunder necessarily passed upon his death to his
heirs. The contracts, therefore, give rise to contingent claims provable against his estate under section 5,
Rule 87
CONTRACTS; BlNDING EFFECT OF CONTRACTS UPON HEIRS OF DECEASED PARTY.—The
binding effect of contracts upon the heirs of the deceased party is not altered by the provision in the Rules
of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is
distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from the
estate is ultimately a payment by the heirs and distributees, since the amount of the paid claim in fact
diminishes or reduces the shares that the heirs would have been entitled to receive. The general rule,
therefore, is that a party’s contractual rights and obligations are transmissible to the successors.
ADDTL: Our conclusion is that the solidary guarantor’s liability is not extinguished by his death, and that
in such event, the Luzon Surety Co., had the right to file against the estate a contingent claim for
reimbursement.
3. NATIONAL HOUSING AUTHORITY, petitioner, vs. SEGUNDA ALMEIDA, COURT OF
APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents.
Facts:
The Land Tenure Administration (LTA) (succeeded by NHA) awarded to Margarita Herrera several
portions of land which are part of the Tunasan Estate in San Pedro, Laguna. Before her death, there was
an existing Contract to Sell between Margarita and NHA.
The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of
private respondent) and Francisca Herrera.
Beatriz Herrera Mercado predeceased her mother and left heirs. Margarita Herrera passed away on
October 27, 1971.
On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a
Deed of SelfAdjudication 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 surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-
Adjudication before the then Court of First Instance of Laguna,
 Decision in Civil Case No. B1263 (questioning the Deed of Self-Adjudication) was
rendered and the deed was declared null and void. 7
*During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed
an application with the NHA to purchase the same lots submitting therewith a copy of the
“Sinumpaang Salaysay” executed by her mother. Private respondent Almeida, as heir of Beatriz
HerreraMercado, protested the application.
Sinumpaang Salaysay - Margarita Herrera executed a “Sinumpaang Salaysay” whereby
she waived or transferred all her rights and interest over the lots in question in favor of the
protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct
Land Tenure Administration
In a Resolution 8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera,-
s Office finds that protestee has a better preferential right to purchase the lots in question
On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate
which they submitted to the NHA. Said transfer of rights was approved by the NHA. 12 The NHA
executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in
their favor. 13
Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave
the premises that she was occupying. Feeling aggrieved by the decision of the Office of the
President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought
the cancellation of the titles issued in favor of the heirs of Francisca. She filed a Complaint on
February 8, 1988, for “Nullification of Government Lot’s Award,” with the Regional Trial Court
of San Pedro, Laguna,
In her complaint, private respondent Almeida invoked her forty-year occupation of the
disputed properties, and re-raised the fact that Francisca Herrera’s declaration of self-
adjudication has been adjudged as a nullity because the other heirs were disregarded.
The defendant heirs of Francisca Herrera alleged that the complaint was barred by laches and that the
decision of the Office of the President was already final and executory. 14 They also contended that the
transfer of purchase of the subject lots is perfectly valid as the same was supported by a
consideration and that Francisca Herrera paid for the property with the use of her own money. 15
Further, they argued that plaintiff’s occupation of the property was by mere tolerance and that they had
been paying taxes thereon.
Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the decision of the
Office of the President awarding the subject lots in favor of Francisca Herrera . It declared the deeds
of sale executed by NHA in favor of Herrera’s heirs null and void.
RTC ruled that the “Sinumpaang Salaysay” was not an assignment of rights but a disposition of
property which shall take effect upon death. It then held that the said document must first be submitted
to probate before it can transfer property. -the “Sinumpaang Salaysay” to be her last will and not an
assignment of rights as what the NHA in its resolution
CA ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld
the trial court ruling that the “Sinumpaang Salaysay” was not an assignment of rights but one that
involved disposition of property which shall take effect upon death. The issue of whether it was a
valid will must first be determined by probate
Issue:
WON the death of Margarita Herrera extinguish her interest over the property. NO.
WON the NHA acted arbitrarily in the award of lots. YES.
Ruling:
The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had
an existing Contract to Sell with NHA as the seller. Upon Margarita Herrera’s demise, this Contract to
Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both parties—Margarita
Herrera and NHA. Obligations are transmissible. Margarita Herrera’s obligation to pay became
transmissible at the time of her death either by will or by operation of law.
The National Housing Authority cannot make another contract to sell to other parties of a property
already initially paid for by the decedent—such would be an act contrary to the law on succession and the
law on sales and obligations;
When the original buyer died, the National Housing Authority (NHA) should have considered the
estate as the next “person.”—If we sustain the position of the NHA that this document is not a will, then
the interests of the decedent should transfer by virtue of an operation of law and not by virtue of a
resolution by the NHA.
Succession; The initial applicant’s death would transfer all her property, rights and obligations to the
estate including whatever interest she has or may have had over the disputed properties over which she
had been granted the right to buy—to the extent of the interest that the original owner had over the
property, the same should go to her estate.
—By considering the document, petitioner NHA should have noted that the original applicant has already
passed away. Margarita Herrera passed away on October 27, 1971.
The NHA gave due course to the application made by Francisca Herrera without considering that the
initial applicant’s death would transfer all her property, rights and obligations to the estate
including whatever interest she has or may have had over the disputed properties . To the extent of the
interest that the original owner had over the property, the same should go to her estate. Margarita
Herrera had an interest in the property and that interest should go to her estate upon her demise so as to
be able to properly distribute them later to her heirs—in accordance with a will or by operation of law.
For as it stands, NHA cannot make another contract to sell to other parties of a property already initially
paid for by the decedent. Such would be an act contrary to the law on succession and the law on sales and
obligations.
When the original buyer died, the NHA should have considered the estate of the decedent as the next
“person” likely to stand in to fulfill obligation to pay the rest of the purchase price. The opposition of
other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of
the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of
SelfAdjudication) which rendered the deed therein null and void should have alerted the NHA that there
are other heirs to the interests and properties of the decedent who may claim the property after a testate or
intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots.
4. 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
Facts:
1st Civil case - In their Complaint, respondents sought the declaration of nullity of a dacion en pago
allegedly executed by respondent Benjamin Bayhon in favor of petitioner William Ong Genato.
Respondent Benjamin Bayhon alleged that on July 3, 1989, he obtained from the
petitioner a loan amounting to PhP 1,000,000.00; that to cover the loan, he executed a Deed of
Real Estate Mortgage over the property; that, however, the execution of the Deed of Real Estate
Mortgage 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.
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.
2nd Civil case - petitioner William Ong Genato filed an action for specific performance, before the RTC,
Quezon City, Branch 79. In his Complaint, petitioner alleged that respondent obtained a loan from
him in the amount of PhP 1,000,000.00. Petitioner alleged further that respondent failed to pay the loan
and executed on October 21, 1989 a dacion en pago in favor of the petitioner.
The trial court found that respondent obtained a loan in the amount of PhP 1,000,000.00 from the
petitioner. The trial court likewise found that at the time of the execution of the real estate mortgage,
the wife of respondent, Amparo Mercado, was already dead. It held that the property covered by TCT
No. 38052 was owned in common by the respondents and not by respondent Benjamin Bayhon alone. It
concluded that the said lot could not have been validly mortgaged by the respondent alone; the deed of
mortgage was not enforceable and only served as evidence of the obligation of the respondent.
Respondent Benjamin Bayhon died while the case was still pending decision of the CA
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, or on July 3, 1989 and
October 21, 1989, respectively, 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
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:
WON the obligation/debt of the deceased respondent still subsists against his estate
Ruling: YES
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.
Under our law, therefore, the general rule is that a party’s contractual rights and obligations are
transmissible to the successors.—The Court proceeded further to state the general rule: Under our law,
therefore, the general rule is that a party’s contractual rights and obligations are transmissible to the
successors. The rule is a consequence of the progressive “depersonalization” of patrimonial rights and
duties that, as observed by Victorio Polacco, has characterized the history of these institutions. From the
Roman concept of a relation from person to person, the obligation has evolved into a relation from
patrimony to patrimony, with the persons occupying only a representative position, barring those rare
cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its
performance by a specific person and by no other. The transition is marked by the disappearance of the
imprisonment for debt.
ADDTL: Pursuant to this provision, petitioner’s remedy lies in filing a claim against the estate of the
deceased respondent.
5. SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS. VICTORINO F. SANTOS,
& LAGRIMAS SANTOS, ERNESTO F. SANTOS, and TADEO F. SANTOS, petitioners, vs. SPS.
JOSE LUMBAO and PROSERFINA LUMBAO, respondents.
Facts:
petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving
heirs of the late Rita Catoc Santos (Rita),
Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-
square meter lot (subject property), which they purportedly bought from Rita during her lifetime.
*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 on 19 September 1978. On the
first occasion, Rita sold 100 square meters of her inchoate share in her mother’s estate through a
document denominated as “Bilihan ng Lupa,” dated 17 August 1979. 4
Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed by
petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion, an
additional seven square meters was added to the land as evidenced by a document also denominated as
“Bilihan ng Lupa,” dated 9 January 1981.
After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and
erected thereon a house which they have been occupying as exclusive owners up to the present.
As the exclusive owners of the subject property, respondents Spouses Lumbao made
several verbal demands upon Rita, during her lifetime, and thereafter upon herein petitioners, for
them to execute the necessary documents to effect the issuance of a separate title in favor of
respondents Spouses Lumbao insofar as the subject property is concerned. Respondents Spouses
Lumbao 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.
The Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another,
executed a Deed of Extrajudicial Settlement, 6 adjudicating and partitioning among themselves and
the other heirs, the estate left by Maria, which included the subject property already sold to
respondents Spouses Lumbao
Formal demand letter was issued - petitioners still failed and refused to reconvey the subject property to
the respondents Spouses Lumbao – filed a complaint, reconveyance with damages.
Petitioners filed their Answer denying the allegations that the subject property had been sold to the
respondents Spouses Lumbao.
Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered
that on 16 February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage
in favor of Julieta S. Esplana for the sum of P30,000.00.
RTC – denied
CA – granted
Issue:
WON the subject property still forms part of the inheritance of the Santos’
Ruling:
In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed
of Extrajudicial Settlement, the 107-square meter lot sold by the mother of the petitioners to respondents
Spouses Lumbao should be deducted from the total lot, inherited by them in representation of their
deceased mother, which in this case measures 467 square meters. The 107-square meter lot already sold
to respondents Spouses Lumbao can no longer be inherited by the petitioners because the same was no
longer part of their inheritance as it was already sold during the lifetime of their mother.
Hence, the “Bilihan ng Lupa” documents dated 17 August 1979 and 9 January 1981, being valid and
enforceable, herein petitioners are bound to comply with their provisions.
In the end, despite the death of the petitioners’ mother, they are still bound to comply with the provisions
of the “Bilihan ng Lupa,” dated 17 August 1979 and 9 January 1981.
Heirs are bound by contracts entered into by their predecessors-in-interest—whatever rights and
obligations of the decedent have over a property are 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.
—The general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies
in the present case.
Article 1311 of the NCC is the basis of this rule. It is clear from the said provision that 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.
Thus, the heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-
interest because they have inherited the property subject to the liability affecting their common ancestor.
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. The death of a party does not excuse nonperformance of a contract which involves a property right
and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly,
nonperformance is not excused by the death of the party when the other party has a property interest in
the subject matter of the contract.