UP Law F2021 006 Alvarez v.

IAC
Succession Arts. 774, 776 and 1311 1990 Fernan

SUMMARY

Lot 773 which was owned by the heirs of Aniceto Yanes was sold by one Fortunato Santiago to Monico
Fuentebella, who in turn sold it to Rosendo Alvarez. All of them were issued TCT’s by the Register of
Deeds. The Yaneses filed an action for recovery of the land +damages against Santiago, Fuentebella and
Alvarez. During the pendency of the action, Alvarez sold the lot (now split into two: Lots 773-A and
773-B) to Dr. Rodolfo Siason. On its first action, the Court ruled in favor of the Yanuses, but upon
manifestation of Dr. Siason, stated that the same could not be enforced upon Siason because he was not
party to the adjudicated case and he was a buyer in good faith. The Yaneses instituted another action
for recovery of lot, this time impleading Dr. Siason and the Alvarezes, praying that they be paid
monetary equivalent of the lot if the same could not be delivered. At some point during this action,
Alavarez died, leaving his heirs as respondents of the present case. Lower court decided in the favor of
the Yaneses but reiterated that Dr. Siason was a buyer in good faith, hence not liable, and the claim
could only be applied against the Alvarezes. The Alvarezes appealed the decision to the IAC, but the
same was denied. The SC upheld the decision as well, stating the general rule that a party's contractual
rights and obligations are transmissible to the successors. It also stated that petitioners Alvarezes were
liable only to the extent of the value of their inheritance.

FACTS

 Aniceto Yanes owned a parcel of land known as Lot 773 (15.65 ha) and lot 823 (8.35 ha) located at
Murcia, Negros Occidental;
 Lot 773 was registered in October 1917 with the Register of Deeds of Negros Occidental under the
name of the heirs of Aniceto Yanes with Original Certificate of Title No. RO-4858 (8804);
 Yanes was survived by his children Rufino, Felipe and Teodora;
 Private respondents were children of Rufino, Felipe and Teodora:
o Rufino’s – Estelita, Iluminado and Jesus
o Felipe's – Antonio and Rosario
o Teodora’s – Jovita (but was not included as party to the case)
 During Japanese occupation, the Yaneses siblings Rufino, Felipe and Teodora were not able to visit
the lots, but “after liberation” when one of the brothers went to check the lots and get their share of
sugar produce, they learned that Lot 773 were in possession of Fortunato Santiago, Monico
Fuentebella, Jr. and Rosendo Alvarez;
 Land 773 was split into two: Lot 773-A (37,818 sqm) was registered on May 19, 1938 (TCT No. RF
2694) and Lot 773-B (118,831 sqm) was registered on Sept. 6, 1938 (TCT No. RT-2695), both under
Fortunato Santiago;
 On May 30, 1955, Santiago sold lots 773-A and 773-B to Monico Fuentebella, Jr. for P7,000.00 and
consequently, TCT nos. T-19291 and T-19292 were issued in Fuentebella’s name;
 After Fuentebella’s death and during settlement of his estate, the administratrix (also his wife) filed
Special Proceedings No. 4373 in the CFI of Negros Occidental requesting authority to sell which was
granted. Mrs. Vda de Fuentebella sold the lots for P6,000.00 to Rosendo Alvarez;
 Alvarez registered the lots and on Apr. 1, 1958. TCT Nos. T-23165 and T-23166 were issued under
his name;
 Teodora Yanes filed a complaint at the CFI of Negros Occ. against Santiago, Vda de Fuentebella,
Alvarez and Register of Deeds for the return of the full ownership of lots 773 and 823;
 During pendency of the case, Alvarez sold Lots 773-A, 773-B and another parcel of land to Dr.
Rodolfo Siason. Accordingly, TCT nos. 30919 and 30920 were issued under Dr. Siason’s name;
 The CFI of Negros Occ. Decided in favor of the Yaneses, ordering Alvarez to reconvey Lots 773 and
823;
 The court order was not executed due to protest of Dr. Saison, averring that he was not a party per
writ of execution, and thus Lot 773 he had purchased from Alvarez could not be delivered;
 The Yaneses filed a petition to declare TCT Nos. T-23165 and T-23166 null and void, and prayed for
issuance of a new certificate of title;
  Dr. Siason, on his manifestation, opposed. He averred that he purchased Lots 773-A, 773-B and 658,
and not Lots 773 and 823. That he purchased the said lots “in good faith and for a valuable
consideration without any knowledge of any lien or encumbrances”;
 The Court agreed with Dr. Siason and ruled that the judgment could not be enforced against him;
 The Yaneses filed another action, this time including Dr. Siason, the Alvarezes and the Register of
Deeds. It should be noted that at some point during the pendency of this action, Rosendo Alavrez
died leaving his heirs as respondents of the present case;
 Among other, they prayed that Lot 773 under Dr. Siason be returned, and if delivery could not be
effected, or issuance of a new title could not be made, that the Alvarezes and Dr. Siason jointly and
severally pay the Yaneses P45,000.00, the equivalent monetary value of the Lots;
 Lower court ruled that with respect to Dr. Siason, the case should be dismissed because he was a
buyer in good faith but the Alavarezes liable for P20,000.00 representing the actual value of Lots
773-A and 773-B, and damages;
 IAC affirmed the lower court’s decision but set aside the award for damages

RATIO

W/N the liability of Rosendo Alvarez arising from the sale of Lots 773-A and 773-B could be legally
passed or transmitted by operation of law to the petitioners (his legitimate children)
Yes.

Petitioners contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo
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. The Court, citing Estate of Hemady v. Luzon Surety Co. Inc. ruled that "Under our law, xxx, 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 has
characterized the history of these institutions.”

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 action, 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. With this clarification and considering petitioners' admission that there are other properties
left by the deceased which are sufficient to cover the amount adjudged in favor of private respondents, the
SC upheld the CA’s decision.

FALLO

WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.

SO ORDERED.