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EN BANC
[G.R. No. L-8437. November 28, 1956.]
ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC., claimant-Appellant.
DECISION
REYES, J. B. L., J.:
Appeal by Luzon Surety Co., Inc., from an order of the Court of First Instance of Rizal, presided by Judge
Hermogenes Caluag, dismissing its claim against the Estate of K. H. Hemady (Special Proceeding No. Q293) for failure to state a cause of action.
The Luzon Surety Co. had filed a claim against the Estate based on twenty different indemnity agreements,
or counter bonds, each subscribed by a distinct principal and by the deceased K. H. Hemady, a surety
solidary guarantor) in all of them, in consideration of the Luzon Surety Co.s of having guaranteed, the
various principals in favor of different creditors. The twenty counterbonds, or indemnity agreements, all
contained the following stipulations:chanroblesvirtuallawlibrary
Premiums. As consideration for this suretyship, the undersigned jointly and severally, agree to pay the
COMPANY the sum of ________________ (P______) pesos, Philippines Currency, in advance as
premium there of for every __________ months or fractions thereof, this ________ or any renewal or
substitution thereof is in effect.
Indemnity. The undersigned, jointly and severally, agree at all times to indemnify the COMPANY and
keep it indemnified and hold and save it harmless from and against any and all damages, losses, costs,
stamps, taxes, penalties, charges, and expenses of whatsoever kind and nature which the COMPANY shall
or may, at any time sustain or incur in consequence of having become surety upon this bond or any
extension, renewal, substitution or alteration thereof made at the instance of the undersigned or any of
them or any order executed on behalf of the undersigned or any of them; chan roblesvirtualawlibraryand
to pay, reimburse and make good to the COMPANY, its successors and assigns, all sums and amount of
money which it or its representatives shall pay or cause to be paid, or become liable to pay, on account of
the undersigned or any of them, of whatsoever kind and nature, including 15% of the amount involved in
the litigation or other matters growing out of or connected therewith for counsel or attorneys fees, but in
no case less than P25. It is hereby further agreed that in case of extension or renewal of this ________ we
equally bind ourselves for the payment thereof under the same terms and conditions as above mentioned
without the necessity of executing another indemnity agreement for the purpose and that we hereby
equally waive our right to be notified of any renewal or extension of this ________ which may be granted
under this indemnity agreement.
Interest on amount paid by the Company. Any and all sums of money so paid by the company shall bear
interest at the rate of 12% per annum which interest, if not paid, will be accummulated and added to the
capital quarterly order to earn the same interests as the capital and the total sum thereof, the capital and
interest, shall be paid to the COMPANY as soon as the COMPANY shall have become liable therefore,
whether it shall have paid out such sums of money or any part thereof or not.
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Waiver. It is hereby agreed upon by and between the undersigned that any question which may arise
between them by reason of this document and which has to be submitted for decision to Courts of Justice
shall be brought before the Court of competent jurisdiction in the City of Manila, waiving for this purpose
any other venue. Our right to be notified of the acceptance and approval of this indemnity agreement is
hereby likewise waived.
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Our Liability Hereunder. It shall not be necessary for the COMPANY to bring suit against the principal
upon his default, or to exhaust the property of the principal, but the liability hereunder of the undersigned
indemnitor shall be jointly and severally, a primary one, the same as that of the principal, and shall be
exigible immediately upon the occurrence of such default. (Rec. App. pp. 98- 102.)
The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of the twenty bonds it had
executed in consideration of the counterbonds, and further asked for judgment for the unpaid premiums
and documentary stamps affixed to the bonds, with 12 per cent interest thereon.
Before answer was filed, and upon motion of the administratrix of Hemadys estate, the lower court, by
order of September 23, 1953, dismissed the claims of Luzon Surety Co., on two
grounds:chanroblesvirtuallawlibrary (1) that the premiums due and cost of documentary stamps were not
contemplated under the indemnity agreements to be a part of the undertaking of the guarantor (Hemady),
since they were not liabilities incurred after the execution of the counterbonds; chan

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roblesvirtualawlibraryand (2) that whatever losses may occur after Hemadys death, are not chargeable to
his estate, because upon his death he ceased to be guarantor.
Taking up the latter point first, since it is the one more far reaching in effects, the reasoning of the court
below ran as follows:
The administratrix further contends that upon the death of Hemady, his liability as a guarantor
terminated, and therefore, in the absence of a showing that a loss or damage was suffered, the claim
cannot be considered contingent. This Court believes that there is merit in this contention and finds
support in Article 2046 of the new Civil Code. It should be noted that a new requirement has been added
for a person to qualify as a guarantor, that is:chanroblesvirtuallawlibrary integrity. As correctly pointed out
by the Administratrix, integrity is something purely personal and is not transmissible. Upon the death of
Hemady, his integrity was not transmitted to his estate or successors. Whatever loss therefore, may occur
after Hemadys death, are not chargeable to his estate because upon his death he ceased to be a guarantor.
Another clear and strong indication that the surety company has exclusively relied on the personality,
character, honesty and integrity of the now deceased K. H. Hemady, was the fact that in the printed form
of the indemnity agreement there is a paragraph entitled Security by way of first mortgage, which was
expressly waived and renounced by the security company. The security company has not demanded from
K. H. Hemady to comply with this requirement of giving security by way of first mortgage. In the
supporting papers of the claim presented by Luzon Surety Company, no real property was mentioned in
the list of properties mortgaged which appears at the back of the indemnity agreement. (Rec. App., pp.
407-408).
We find this reasoning untenable. Under the present Civil Code (Article 1311), as well as under the Civil
Code of 1889 (Article 1257), the rule is that
Contracts take effect only as between the parties, their assigns and heirs, except in the case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or
by provision of law.
While in our successional system the responsibility of the heirs for the debts of their decedent cannot
exceed the value of the inheritance they receive from him, the principle remains intact that these heirs
succeed not only to the rights of the deceased but also to his obligations. Articles 774 and 776 of the New
Civil Code (and Articles 659 and 661 of the preceding one) expressly so provide, thereby confirming Article
1311 already quoted.
ART. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law.
ART. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.
In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:chanroblesvirtuallawlibrary
Under the Civil Code the heirs, by virtue of the rights of succession are subrogated to all the rights and
obligations of the deceased (Article 661) and cannot be regarded as third parties with respect to a contract
to which the deceased was a party, touching the estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).
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The principle on which these decisions rest is not affected by the provisions of the new Code of Civil
Procedure, and, in accordance with that principle, the heirs of a deceased person cannot be held to be
third persons in relation to any contracts touching the real estate of their decedent which comes in to
their hands by right of inheritance; chan roblesvirtualawlibrarythey take such property subject to all the
obligations resting thereon in the hands of him from whom they derive their rights.
(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs. Salak, 91 Phil., 265).
The binding effect of contracts upon the heirs of the deceased party is not altered by the provision in our
Rules of Court that money debts of a deceased must be liquidated and paid from his estate before the
residue is distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from
the estate is ultimately a payment by the heirs and distributees, since the amount of the paid claim in fact
diminishes or reduces the shares that the heirs would have been entitled to receive.
Under our law, therefore, the general rule is that a partys 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

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those rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in
consideration of its performance by a specific person and by no other. The transition is marked by the
disappearance of the imprisonment for debt.
Of the three exceptions fixed by Article 1311, the nature of the obligation of the surety or guarantor does
not warrant the conclusion that his peculiar individual qualities are contemplated as a principal
inducement for the contract. What did the creditor Luzon Surety Co. expect of K. H. Hemady when it
accepted the latter as surety in the counterbonds? Nothing but the reimbursement of the moneys that the
Luzon Surety Co. might have to disburse on account of the obligations of the principal debtors. This
reimbursement is a payment of a sum of money, resulting from an obligation to give; chan
roblesvirtualawlibraryand to the Luzon Surety Co., it was indifferent that the reimbursement should be
made by Hemady himself or by some one else in his behalf, so long as the money was paid to it.
The second exception of Article 1311, p. 1, is intransmissibility by stipulation of the parties. Being
exceptional and contrary to the general rule, this intransmissibility should not be easily implied, but must
be expressly established, or at the very least, clearly inferable from the provisions of the contract itself, and
the text of the agreements sued upon nowhere indicate that they are non-transferable.
(b) Intransmisibilidad por pacto. Lo general es la transmisibilidad de darechos y obligaciones; chan
roblesvirtualawlibraryle excepcion, la intransmisibilidad. Mientras nada se diga en contrario impera el
principio de la transmision, como elemento natural a toda relacion juridica, salvo las personalisimas. Asi,
para la no transmision, es menester el pacto expreso, porque si no, lo convenido entre partes trasciende a
sus herederos.
Siendo estos los continuadores de la personalidad del causante, sobre ellos recaen los efectos de los
vinculos juridicos creados por sus antecesores, y para evitarlo, si asi se quiere, es indespensable
convension terminante en tal sentido.
Por su esencia, el derecho y la obligacion tienden a ir ms all de las personas que les dieron vida, y a
ejercer presion sobre los sucesores de esa persona; chan roblesvirtualawlibrarycuando no se quiera esto, se
impone una estipulacion limitativa expresamente de la transmisibilidad o de cuyos tirminos claramente se
deduzca la concresion del concreto a las mismas personas que lo otorgon. (Scaevola, Codigo Civil, Tomo
XX, p. 541-542) (Emphasis supplied.)
Because under the law (Article 1311), a person who enters into a contract is deemed to have contracted for
himself and his heirs and assigns, it is unnecessary for him to expressly stipulate to that effect; chan
roblesvirtualawlibraryhence, his failure to do so is no sign that he intended his bargain to terminate upon
his death. Similarly, that the Luzon Surety Co., did not require bondsman Hemady to execute a mortgage
indicates nothing more than the companys faith and confidence in the financial stability of the surety, but
not that his obligation was strictly personal.
The third exception to the transmissibility of obligations under Article 1311 exists when they are not
transmissible by operation of law. The provision makes reference to those cases where the law expresses
that the rights or obligations are extinguished by death, as is the case in legal support (Article 300),
parental authority (Article 327), usufruct (Article 603), contracts for a piece of work (Article 1726),
partnership (Article 1830 and agency (Article 1919). By contract, the articles of the Civil Code that regulate
guaranty or suretyship (Articles 2047 to 2084) contain no provision that the guaranty is extinguished upon
the death of the guarantor or the surety.
The lower court sought to infer such a limitation from Art. 2056, to the effect that one who is obliged to
furnish a guarantor must present a person who possesses integrity, capacity to bind himself, and sufficient
property to answer for the obligation which he guarantees. It will be noted, however, that the law requires
these qualities to be present only at the time of the perfection of the contract of guaranty. It is self-evident
that once the contract has become perfected and binding, the supervening incapacity of the guarantor
would not operate to exonerate him of the eventual liability he has contracted; chan
roblesvirtualawlibraryand if that be true of his capacity to bind himself, it should also be true of his
integrity, which is a quality mentioned in the article alongside the capacity.
The
foregoing concept
is
confirmed
follows:chanroblesvirtuallawlibrary

by

the

next

Article

2057,

that

runs

as

ART. 2057. If the guarantor should be convicted in first instance of a crime involving dishonesty or
should become insolvent, the creditor may demand another who has all the qualifications required in the
preceding article. The case is excepted where the creditor has required and stipulated that a specified
person should be guarantor.
From this article it should be immediately apparent that the supervening dishonesty of the guarantor (that
is to say, the disappearance of his integrity after he has become bound) does not terminate the contract but
merely entitles the creditor to demand a replacement of the guarantor. But the step remains optional in the
creditor:chanroblesvirtuallawlibrary it is his right, not his duty; chan roblesvirtualawlibraryhe may waive

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it if he chooses, and hold the guarantor to his bargain. Hence Article 2057 of the present Civil Code is
incompatible with the trial courts stand that the requirement of integrity in the guarantor or surety makes
the latters undertaking strictly personal, so linked to his individuality that the guaranty automatically
terminates upon his death.
The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety Co. not being rendered
intransmissible due to the nature of the undertaking, nor by the stipulations of the contracts themselves,
nor by provision of law, his eventual liability thereunder necessarily passed upon his death to his heirs.
The contracts, therefore, give rise to contingent claims provable against his estate under section 5, Rule 87
(2 Moran, 1952 ed., p. 437; chan roblesvirtualawlibraryGaskell & Co. vs. Tan Sit, 43 Phil. 810, 814).
The most common example of the contigent claim is that which arises when a person is bound as surety or
guarantor for a principal who is insolvent or dead. Under the ordinary contract of suretyship the surety has
no claim whatever against his principal until he himself pays something by way of satisfaction upon the
obligation which is secured. When he does this, there instantly arises in favor of the surety the right to
compel the principal to exonerate the surety. But until the surety has contributed something to the
payment of the debt, or has performed the secured obligation in whole or in part, he has no right of action
against anybody no claim that could be reduced to judgment. (May vs. Vann, 15 Pla., 553; chan
roblesvirtualawlibraryGibson vs. Mithell, 16 Pla., 519; chan roblesvirtualawlibraryMaxey vs. Carter, 10
Yarg. [Tenn.], 521 Reeves vs. Pulliam, 7 Baxt. [Tenn.], 119; chan roblesvirtualawlibraryErnst vs. Nou, 63
Wis., 134.)
For Defendant administratrix it is averred that the above doctrine refers to a case where the surety files
claims against the estate of the principal debtor; chan roblesvirtualawlibraryand it is urged that the rule
does not apply to the case before us, where the late Hemady was a surety, not a principal debtor. The
argument evinces a superficial view of the relations between parties. If under the Gaskell ruling, the Luzon
Surety Co., as guarantor, could file a contingent claim against the estate of the principal debtors if the
latter should die, there is absolutely no reason why it could not file such a claim against the estate of
Hemady, since Hemady is a solidary co-debtor of his principals. What the Luzon Surety Co. may claim
from the estate of a principal debtor it may equally claim from the estate of Hemady, since, in view of the
existing solidarity, the latter does not even enjoy the benefit of exhaustion of the assets of the principal
debtor.
The foregoing ruling is of course without prejudice to the remedies of the administratrix against the
principal debtors under Articles 2071 and 2067 of the New Civil Code.
Our conclusion is that the solidary guarantors liability is not extinguished by his death, and that in such
event, the Luzon Surety Co., had the right to file against the estate a contingent claim for reimbursement.
It becomes unnecessary now to discuss the estates liability for premiums and stamp taxes, because
irrespective of the solution to this question, the Luzon Suretys claim did state a cause of action, and its
dismissal was erroneous.
Wherefore, the order appealed from is reversed, and the records are ordered remanded to the court of
origin, with instructions to proceed in accordance with law. Costs against the Administratrix- Appellee. SO
ORDERED.

G.R. No. L-4963

January 29, 1953

MARIA USON, plaintiff-appellee, vs.MARIA DEL ROSARIO, CONCEPCION NEBREDA,


CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr.,
defendants-appellants.
This is an action for recovery of the ownership and possession of five (5) parcels of land situated in the
Municipality of Labrador, Province of Pangasinan, filed by Maria Uson against Maria del Rosario and her
four children named Concepcion, Conrado, Dominador, and Faustino, surnamed Nebreda, who are all of
minor age, before the Court of First Instance of Pangasinan.
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. However, plaintiff claims
that when Faustino Nebreda died in 1945, his common-law wife Maria del Rosario took possession illegally
of said lands thus depriving her of their possession and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson and her
husband, the late Faustino Nebreda, executed a public document whereby they agreed to separate as

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husband and wife and, in consideration of their separation, Maria Uson was given a parcel of land by way
of alimony and in return she renounced her right to inherit any other property that may be left by her
husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the court rendered decision ordering
the defendants to restore to the plaintiff the ownership and possession of the lands in dispute without
special pronouncement as to costs. Defendants interposed the present appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda, former
owner of the five parcels of lands litigated in the present case. There is likewise no dispute that Maria del
Rosario, one of the defendants-appellants, was merely a common-law wife of the late Faustino Nebreda
with whom she had four illegitimate children, her now co-defendants. It likewise appears that Faustino
Nebreda died in 1945 much prior to the effectivity of the new Civil Code. With this background, it is
evident that when Faustino Nebreda died in 1945 the five parcels of land he was seized of at the time
passed from the moment of his death to his only heir, his widow Maria Uson (Article 657, old Civil
Code).As this Court aptly said, "The property belongs to the heirs at the moment of the death of the
ancestor as completely as if the ancestor had executed and delivered to them a deed for the same before his
death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment, therefore, the rights of inheritance
of Maria Uson over the lands in question became vested.
The claim of the defendants that Maria Uson had relinquished her right over the lands in question because
she expressly renounced to inherit any future property that her husband may acquire and leave upon his
death in the deed of separation they had entered into on February 21, 1931, cannot be entertained for the
simple reason that future inheritance cannot be the subject of a contract nor can it be renounced (1
Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio and Ynchausti Steamship Co.,
41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are illegitimate children of the
late Faustino Nebreda and under the old Civil Code are not entitled to any successional rights, however,
under the new Civil Code which became in force in June, 1950, they are given the status and rights of
natural children and are entitled to the successional rights which the law accords to the latter (article 2264
and article 287, new Civil Code), and because these successional rights were declared for the first time in
the new code, they shall be given retroactive effect even though the event which gave rise to them may have
occurred under the prior legislation (Article 2253, new Civil Code).
There is no merit in this claim. 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. Thus, said article provides that "if a right should be declared
for the first time in this Code, it shall be effective at once, even though the act or event which gives rise
thereto may have been done or may have occurred under the prior legislation, provided said new right
does not prejudice or impair any vested or acquired right, of the same origin." As already stated in the
early part of this decision, the right of ownership of Maria Uson over the lands in question became vested
in 1945 upon the death of her late husband and this is so because of the imperative provision of the law
which 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.
As regards the claim that Maria Uson, while her deceased husband was lying in state, in a gesture of pity or
compassion, agreed to assign the lands in question to the minor children for the reason that they were
acquired while the deceased was living with their mother and Maria Uson wanted to assuage somewhat the
wrong she has done to them, this much can be said; apart from the fact that this claim is disputed, we are
of the opinion that said assignment, if any, partakes of the nature of a donation of real property, inasmuch
as it involves no material consideration, and in order that it may be valid it shall be made in a public
document and must be accepted either in the same document or in a separate one (Article 633, old Civil
Code). Inasmuch as this essential formality has not been followed, it results that the alleged assignment or
donation has no valid effect.
WHEREFORE, the decision appealed from is affirmed, without costs.

G.R. No. L-41715 June 18, 1976

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ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA
(their father) who represents the minors, petitioners, vs.LEON BARCENA, MAXIMA ARIAS
BALLENA, ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of
JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court of First Instance of
Abra, respondents
This is a petition for review 1 of the Order of the Court of First Instance of Abra in Civil Case No. 856,
entitled Fortunata Barcena vs. Leon Barcena, et al., denying the motions for reconsideration of its order
dismissing the complaint in the aforementioned case.
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of
Ponciano Bonilla, instituted a civil action in the Court of First Instance of Abra, to quiet title over certain
parcels of land located in Abra.
On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before the hearing of the
motion to dismiss, the counsel for the plaintiff moved to amend the complaint in order to include certain
allegations therein. The motion to amend the complaint was granted and on July 17, 1975, plaintiffs filed
their amended complaint.
On August 4, 1975, the defendants filed another motion to dismiss the complaint on the ground that
Fortunata Barcena is dead and, therefore, has no legal capacity to sue. Said motion to dismiss was heard
on August 14, 1975. In said hearing, counsel for the plaintiff confirmed the death of Fortunata Barcena,
and asked for substitution by her minor children and her husband, the petitioners herein; but the court
after the hearing immediately dismissed the case on the ground that a dead person cannot be a real party
in interest and has no legal personality to sue.
On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the complaint and on
August 23, 1975, he moved to set aside the order of the dismissal pursuant to Sections 16 and 17 of Rule 3
of the Rules of Court. 2
On August 28, 1975, the court denied the motion for reconsideration filed by counsel for the plaintiff for
lack of merit. On September 1, 1975, 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. From the order, counsel for the deceased plaintiff
filed a second motion for reconsideration of the order dismissing the complaint claiming that the same is
in violation of Sections 16 and 17 of Rule 3 of the Rules of Court but the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order dismissing the complaint in Civil Case
No. 856 and its orders denying the motion for reconsideration of said order of dismissal. While it is true
that a person who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up
to its completion. The records of this case show that the death of Fortunata Barcena took place on July 9,
1975 while the complaint was filed on March 31, 1975. This means that when the complaint was filed on
March 31, 1975, Fortunata Barcena was still alive, and therefore, the court had acquired jurisdiction over
her person. If thereafter she died, the Rules of Court prescribes the procedure whereby a party who died
during the pendency of the proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court
"whenever a party to a pending case dies ... it shall be the duty of his attorney to inform the court promptly
of such death ... and to give the name and residence of his executor, administrator, guardian or other legal
representatives." This duty was complied with by the counsel for the deceased plaintiff when he manifested
before the respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the proper
substitution of parties in the case. The respondent Court, however, instead of allowing the substitution,
dismissed the complaint on the ground that a dead person has no legal personality to sue. This is a grave
error. 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. 3 The moment of death is the
determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or
contingent. 4 The right of the heirs to the property of the deceased vests in them even before judicial
declaration of their being heirs in the testate or intestate proceedings. 5 When Fortunata Barcena,
therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856, 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.

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Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished,
the court shall order, upon proper notice, the legal representative of the deceased to appear and be
substituted for the deceased, within such time as may be granted ... ." The question as to whether an action
survives or not depends on the nature of the action and the damage sued for. 6 In the causes of action
which survive the wrong complained affects primarily and principally property and property rights, the
injuries to the person being merely incidental, while in the causes of action which do not survive the injury
complained of is to the person, the property and rights of property affected being incidental. 7 Following
the foregoing criterion the claim of the deceased plaintiff which is an action to quiet title over the parcels of
land in litigation affects primarily and principally property and property rights and therefore is one that
survives even after her death. It is, therefore, the duty of the respondent Court to order the legal
representative of the deceased plaintiff to appear and to be substituted for her. But what the respondent
Court did, upon being informed by the counsel for the deceased plaintiff that the latter was dead, was to
dismiss the complaint. This should not have been done for under the same Section 17, Rule 3 of the Rules
of Court, it is even the duty of the court, if the legal representative fails to appear, to order the opposing
party to procure the appointment of a legal representative of the deceased. In the instant case the
respondent Court did not have to bother ordering the opposing party to procure the appointment of a legal
representative of the deceased because her counsel has not only asked that the minor children be
substituted for her but also suggested that their uncle be appointed as guardian ad litem for them because
their father is busy in Manila earning a living for the family. But the respondent Court refused the request
for substitution on the ground that the children were still minors and cannot sue in court. This is another
grave error because the respondent Court ought to have known that under the same Section 17, Rule 3 of
the Rules of Court, the court is directed to appoint a guardian ad litem for the minor heirs. Precisely in the
instant case, the counsel for the deceased plaintiff has suggested to the respondent Court that the uncle of
the minors be appointed to act as guardian ad litem for them. Unquestionably, the respondent Court has
gravely abused its discretion in not complying with the clear provision of the Rules of Court in dismissing
the complaint of the plaintiff in Civil Case No. 856 and refusing the substitution of parties in the case.
IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the complaint in Civil Case
No. 856 of the Court of First Instance of Abra and the motions for reconsideration of the order of dismissal
of said complaint are set aside and the respondent Court is hereby directed to allow the substitution of the
minor children, who are the petitioners therein for the deceased plaintiff and to appoint a qualified person
as guardian ad litem for them. Without pronouncement as to costs.
SO ORDERED.

G.R. No. L-28040 August 18, 1972


TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administrator-appellee; JOSE
DE BORJA, as administrator, CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO
DE BORJA (deceased) as Children of Josefa Tangco, appellees, vs.TASIANA VDA. DE DE
BORJA, Special Administratrix of the Testate Estate of Francisco de Borja, appellant. .
G.R. No L-28568 August 18, 1972
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA. DE DE BORJA,
special Administratrix appellee, vs.JOSE DE BORJA, oppositor-appellant.
G.R. No. L-28611 August 18, 1972
TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate Estate of the late Francisco
de Borja, plaintiff-appellee, vs.JOSE DE BORJA, as Administrator of the Testate Estate of the
late Josefa Tangco, defendant-appellant.
Of these cases, the first, numbered L-28040 is an appeal by Tasiana Ongsingco Vda. de de Borja, special
administratrix of the testate estate of Francisco de Borja, 1 from the approval of a compromise agreement
by the Court of First Instance of Rizal, Branch I, in its Special Proceeding No. R-7866, entitled, "Testate
Estate of Josefa Tangco, Jose de Borja, Administrator".
Case No. L-28568 is an appeal by administrator Jose Borja from the disapproval of the same compromise
agreement by the Court of First Instance of Nueva Ecija, Branch II, in its Special Proceeding No. 832,
entitled, "Testate Estate of Francisco de Borja, Tasiana O. Vda. de de Borja, Special Administratrix".

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And Case No. L-28611 is an appeal by administrator Jose de Borja from the decision of the Court of First
Instance of Rizal, Branch X, in its Civil Case No. 7452, declaring the Hacienda Jalajala Poblacion, which is
the main object of the aforesaid compromise agreement, as the separate and exclusive property of the late
Francisco de Borja and not a conjugal asset of the community with his first wife, Josefa Tangco, and that
said hacienda pertains exclusively to his testate estate, which is under administrator in Special Proceeding
No. 832 of the Court of First Instance of Nueva Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his wife Josefa Tangco on 6 October 1940, filed
a petition for the probate of her will which was docketed as Special Proceeding No. R-7866 of the Court of
First Instance of Rizal, Branch I. The will was probated on 2 April 1941. In 1946, Francisco de Borja was
appointed executor and administrator: in 1952, their son, Jose de Borja, was appointed co-administrator.
When Francisco died, on 14 April 1954, Jose became the sole administrator of the testate estate of his
mother, Josefa Tangco. While a widower Francisco de Borja allegedly took unto himself a second wife,
Tasiana Ongsingco. Upon Francisco's death, Tasiana instituted testate proceedings in the Court of First
Instance of Nueva Ecija, where, in 1955, she was appointed special administratrix. The validity of Tasiana's
marriage to Francisco was questioned in said proceeding.
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, some eighteen (18) cases remain
pending determination in the courts. The testate estate of Josefa Tangco alone has been unsettled for more
than a quarter of a century. In order to put an end to all these litigations, a compromise agreement was
entered into on 12 October 1963, 2 by and between "[T]he heir and son of Francisco de Borja by his first
marriage, namely, Jose de Borja personally and as administrator of the Testate Estate of Josefa Tangco,"
and "[T]he heir and surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco
Vda. de Borja, assisted by her lawyer, Atty. Luis Panaguiton Jr." The terms and conditions of the
compromise agreement are as follows:
AGREEMENT
THIS AGREEMENT made and entered into by and between
The heir and son of Francisco de Borja by his first marriage, namely, Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco,
AND
The heir and surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de
Borja, assisted by her lawyer, Atty. Luis Panaguiton Jr.
WITNESSETH
THAT it is the mutual desire of all the parties herein terminate and settle, with finality, the various court
litigations, controversies, claims, counterclaims, etc., between them in connection with the administration,
settlement, partition, adjudication and distribution of the assets as well as liabilities of the estates of
Francisco de Borja and Josefa Tangco, first spouse of Francisco de Borja.
THAT with this end in view, the parties herein have agreed voluntarily and without any reservations to
enter into and execute this agreement under the following terms and conditions:
1. That the parties agree to sell the Poblacion portion of the Jalajala properties situated in Jalajala, Rizal,
presently under administration in the Testate Estate of Josefa Tangco (Sp. Proc. No. 7866, Rizal), more
specifically described as follows:
Linda al Norte con el Rio Puwang que la separa de la jurisdiccion del Municipio de Pililla de la Provincia de
Rizal, y con el pico del Monte Zambrano; al Oeste con Laguna de Bay; por el Sur con los herederos de
Marcelo de Borja; y por el Este con los terrenos de la Familia Maronilla
with a segregated area of approximately 1,313 hectares at the amount of P0.30 per square meter.
2. That Jose de Borja agrees and obligates himself to pay Tasiana Ongsingco Vda. de de Borja the total
amount of Eight Hundred Thousand Pesos (P800,000) Philippine Currency, in cash, which represent
P200,000 as his share in the payment and P600,000 as pro-rata shares of the heirs Crisanto, Cayetano
and Matilde, all surnamed de Borja and this shall be considered as full and complete payment and
settlement of her hereditary share in the estate of the late Francisco de Borja as well as the estate of Josefa

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Tangco, Sp. Proc. No. 832-Nueva Ecija and Sp. Proc. No. 7866-Rizal, respectively, and to any properties
bequeathed or devised in her favor by the late Francisco de Borja by Last Will and Testament or by
Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for consideration or otherwise. The
funds for this payment shall be taken from and shall depend upon the receipt of full payment of the
proceeds of the sale of Jalajala, "Poblacion."
3. That Tasiana Ongsingco Vda. de de Borja hereby assumes payment of that particular obligation incurred
by the late Francisco de Borja in favor of the Rehabilitation Finance Corporation, now Development Bank
of the Philippines, amounting to approximately P30,000.00 and also assumes payment of her 1/5 share of
the Estate and Inheritance taxes on the Estate of the late Francisco de Borja or the sum of P3,500.00, more
or less, which shall be deducted by the buyer of Jalajala, "Poblacion" from the payment to be made to
Tasiana Ongsingco Vda. de Borja under paragraph 2 of this Agreement and paid directly to the
Development Bank of the Philippines and the heirs-children of Francisco de Borja.
4. Thereafter, the buyer of Jalajala "Poblacion" is hereby authorized to pay directly to Tasiana Ongsingco
Vda. de de Borja the balance of the payment due her under paragraph 2 of this Agreement (approximately
P766,500.00) and issue in the name of Tasiana Ongsingco Vda. de de Borja, corresponding certified
checks/treasury warrants, who, in turn, will issue the corresponding receipt to Jose de Borja.
5. In consideration of above payment to Tasiana Ongsingco Vda. de de Borja, Jose de Borja personally and
as administrator of the Testate Estate of Josefa Tangco, and Tasiana Ongsingco Vda. de de Borja, for
themselves and for their heirs, successors, executors, administrators, and assigns, hereby forever mutually
renounce, withdraw, waive, remise, release and discharge any and all manner of action or actions, cause or
causes of action, suits, debts, sum or sums of money, accounts, damages, claims and demands whatsoever,
in law or in equity, which they ever had, or now have or may have against each other, more specifically Sp.
Proceedings Nos. 7866 and 1955, CFI-Rizal, and Sp. Proc. No. 832-Nueva Ecija, Civil Case No. 3033, CFI
Nueva Ecija and Civil Case No. 7452-CFI, Rizal, as well as the case filed against Manuel Quijal for perjury
with the Provincial Fiscal of Rizal, the intention being to completely, absolutely and finally release each
other, their heirs, successors, and assigns, from any and all liability, arising wholly or partially, directly or
indirectly, from the administration, settlement, and distribution of the assets as well as liabilities of the
estates of Francisco de Borja and Josefa Tangco, first spouse of Francisco de Borja, and lastly, Tasiana
Ongsingco Vda. de de Borja expressly and specifically renounce absolutely her rights as heir over any
hereditary share in the estate of Francisco de Borja.
6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the payment under paragraph 4 hereof, shall
deliver to the heir Jose de Borja all the papers, titles and documents belonging to Francisco de Borja which
are in her possession and said heir Jose de Borja shall issue in turn the corresponding receive thereof.
7. That this agreement shall take effect only upon the fulfillment of the sale of the properties mentioned
under paragraph 1 of this agreement and upon receipt of the total and full payment of the proceeds of the
sale of the Jalajala property "Poblacion", otherwise, the non-fulfillment of the said sale will render this
instrument NULL AND VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have her unto set their hands in the City of Manila,
Philippines, the 12th of October, 1963.
On 16 May 1966, Jose de Borja submitted for Court approval the agreement of 12 October 1963 to the
Court of First Instance of Rizal, in Special Proceeding No. R-7866; and again, on 8 August 1966, to the
Court of First Instance of Nueva Ecija, in Special Proceeding No. 832. 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. Special administratrix 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.
The genuineness and due execution of the compromised agreement of 12 October 1963 is not disputed, but
its validity is, nevertheless, attacked by Tasiana Ongsingco on the ground that: (1) the heirs cannot enter
into such kind of agreement without first probating the will of Francisco de Borja; (2) that the same
involves a compromise on the validity of the marriage between Francisco de Borja and Tasiana Ongsingco;
and (3) that even if it were valid, it has ceased to have force and effect.
In assailing the validity of the agreement of 12 October 1963, Tasiana Ongsingco and the Probate Court of
Nueva Ecija rely on this Court's decision in Guevara vs. Guevara. 74 Phil. 479, wherein the Court's
majority held the view that 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

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policy. It is likewise pointed out by appellant Tasiana Ongsingco 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, those circumstances, it is argued, bar the validity of the agreement.
Upon the other hand, in claiming the validity of the compromise agreement, Jose de Borja stresses that at
the time it was entered into, on 12 October 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. He also relies on the dissenting opinion of Justice Moran,
in Guevara vs. Guevara, 74 Phil. 479, wherein was expressed the view that if the parties have already
divided the estate in accordance with a decedent's will, the probate of the will is a useless ceremony; and if
they have divided the estate in a different manner, the probate of the will is worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar. This is apparent from an
examination of the terms of the agreement between Jose de Borja and Tasiana Ongsingco. Paragraph 2 of
said agreement specifically stipulates that the sum of P800,000 payable to Tasiana Ongsingco
shall be considered as full complete payment settlement of her hereditary share in the estate of the
late Francisco de Borja as well as the estate of Josefa Tangco, ... and to any properties bequeathed or
devised in her favor by the late Francisco de Borja by Last Will and Testament or by Donation Inter Vivos
or Mortis Causa or purportedly conveyed to her for consideration or otherwise.
This provision evidences beyond doubt that 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
thereto 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) 3 there is no
legal bar to a successor (with requisite contracting capacity) 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. 4 Of course, the effect of such alienation is to be deemed limited to
what is ultimately adjudicated to the vendor heir. However, the aleatory character of the contract does not
affect the validity of the transaction; neither does the coetaneous agreement that the numerous litigations
between the parties (the approving order of the Rizal Court enumerates fourteen of them, Rec. App. pp.
79-82) are to be considered settled and should be dismissed, although such stipulation, as noted by the
Rizal Court, gives the contract the character of a compromise that the law favors, for obvious reasons, if
only because it serves to avoid a multiplicity of suits.
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 et seq. of the present Civil Code. Wherefore, barring
unworthiness or valid disinheritance, her successional interest existed independent of Francisco de Borja's
last will and testament and would exist even if such will were not probated at all. 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 contract Annex A was entered into by and between "Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco" on the one hand, and on the other, "the heir and
surviving spouse of Francisco de Borja by his second marriage, 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:
8. 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.
It is argued by Tasiana Ongsingco that while the agreement Annex A expressed no definite period for its
performance, the same was intended to have a resolutory period of 60 days for its effectiveness. In support
of such contention, it is averred that such a limit was expressly stipulated in an agreement in similar terms
entered into by said Ongsingco with the brothers and sister of Jose de Borja, to wit, Crisanto, Matilde and
Cayetano, all surnamed de Borja, except that the consideration was fixed at P600,000 (Opposition,
Annex/Rec. of Appeal, L-28040, pp. 39- 46) and which contained the following clause:

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III. That this agreement shall take effect only upon the consummation of the sale of the property
mentioned herein and upon receipt of the total and full payment of the proceeds of the sale by the herein
owner heirs-children of Francisco de Borja, namely, Crisanto, Cayetano and Matilde, all surnamed de
Borja; Provided that if no sale of the said property mentioned herein is consummated, or the non-receipt
of the purchase price thereof by the said owners within the period of sixty (60) days from the date hereof,
this agreement will become null and void and of no further effect.
Ongsingco's argument loses validity when it is considered that Jose de Borja was not a party to this
particular contract (Annex 1), and that the same appears not to have been finalized, since it bears no date,
the day being left blank "this day of October 1963"; and while signed by the parties, it was not notarized,
although plainly intended to be so done, since it carries a proposed notarial ratification clause.
Furthermore, the compromise contract with Jose de Borja (Annex A), provides in its par. 2 heretofore
transcribed that of the total consideration of P800, 000 to be paid to Ongsingco, P600,000 represent the
"prorata share of the heirs Crisanto, Cayetano and Matilde all surnamed de Borja" which corresponds to
the consideration of P600,000 recited in Annex 1, and that circumstance is proof that the duly notarized
contract entered into wit Jose de Borja under date 12 October 1963 (Annex A), was designed to absorb and
supersede the separate unformalize agreement with the other three Borja heirs. Hence, the 60 days
resolutory term in the contract with the latter (Annex 1) not being repeated in Annex A, can not apply to
the formal compromise with Jose de Borja. It is moreover manifest that the stipulation that the sale of the
Hacienda de Jalajala was to be made within sixty days from the date of the agreement with Jose de Borja's
co-heirs (Annex 1) was plainly omitted in Annex A as improper and ineffective, since the Hacienda de
Jalajala (Poblacion) that was to be sold to raise the P800,000 to be paid to Ongsingco for her share formed
part of the estate of Francisco de Borja and could not be sold until authorized by the Probate Court. The
Court of First Instance of Rizal so understood it, and in approving the compromise it fixed a term of 120
days counted from the finality of the order now under appeal, for the carrying out by the parties for the
terms of the contract.
This brings us to the plea that the Court of First Instance of Rizal had no jurisdiction to approve the
compromise with Jose de Borja (Annex A) because Tasiana Ongsingco was not an heir in the estate of
Josefa Tangco pending settlement in the Rizal Court, but she was an heir of Francisco de Borja, whose
estate was the object of Special Proceeding No. 832 of the Court of First Instance of Nueva Ecija. This
circumstance is irrelevant, since what was sold by Tasiana Ongsingco was only her eventual share in the
estate of her late husband, not the estate itself; and as already shown, that eventual share she owned from
the time of Francisco's death and the Court of Nueva Ecija could not bar her selling it. As owner of her
undivided hereditary share, Tasiana could dispose of it in favor of whomsoever she chose. Such alienation
is expressly recognized and provided for by article 1088 of the present Civil Code:
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of
the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they were notified in writing of the sale
of the vendor.
If a sale of a hereditary right can be made to a stranger, then a fortiori sale thereof to a coheir could not be
forbidden.
Tasiana Ongsingco further argues that her contract with Jose de Borja (Annex "A") is void because it
amounts to a compromise as to her status and marriage with the late Francisco de Borja. The point is
without merit, for the very opening paragraph of the agreement with Jose de Borja (Annex "A") describes
her as "the heir and surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco
Vda. de de Borja", which is in itself definite admission of her civil status. There is nothing in the text of the
agreement that would show that this recognition of Ongsingco's status as the surviving spouse of Francisco
de Borja was only made in consideration of the cession of her hereditary rights.
It is finally charged by appellant Ongsingco, as well as by the Court of First Instance of Nueva Ecija in its
order of 21 September 1964, in Special Proceedings No. 832 (Amended Record on Appeal in L-28568, page
157), that the compromise agreement of 13 October 1963 (Annex "A") had been abandoned, as shown by
the fact that, after its execution, the Court of First Instance of Nueva Ecija, in its order of 21 September
1964, had declared that "no amicable settlement had been arrived at by the parties", and that Jose de Borja
himself, in a motion of 17 June 1964, had stated that the proposed amicable settlement "had failed to
materialize".
It is difficult to believe, however, that the amicable settlement referred to in the order and motion abovementioned was the compromise agreement of 13 October 1963, which already had been formally signed
and executed by the parties and duly notarized. What the record discloses is that some time after its
formalization, Ongsingco had unilaterally attempted to back out from the compromise agreement,

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pleading various reasons restated in the opposition to the Court's approval of Annex "A" (Record on
Appeal, L-20840, page 23): that the same was invalid because of the lapse of the allegedly intended
resolutory period of 60 days and because the contract was not preceded by the probate of Francisco de
Borja's will, as required by this Court's Guevarra vs. Guevara ruling; that Annex "A" involved a
compromise affecting Ongsingco's status as wife and widow of Francisco de Borja, etc., all of which
objections have been already discussed. It was natural that in view of the widow's attitude, Jose de Borja
should attempt to reach a new settlement or novatory agreement before seeking judicial sanction and
enforcement of Annex "A", since the latter step might ultimately entail a longer delay in attaining final
remedy. That the attempt to reach another settlement failed is apparent from the letter of Ongsingco's
counsel to Jose de Borja quoted in pages 35-36 of the brief for appellant Ongsingco in G.R. No. 28040; and
it is more than probable that the order of 21 September 1964 and the motion of 17 June 1964 referred to
the failure of the parties' quest for a more satisfactory compromise. But the inability to reach a novatory
accord can not invalidate the original compromise (Annex "A") and justifies the act of Jose de Borja in
finally seeking a court order for its approval and enforcement from the Court of First Instance of Rizal,
which, as heretofore described, decreed that the agreement be ultimately performed within 120 days from
the finality of the order, now under appeal.
We 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.
In her brief, Tasiana Ongsingco also pleads that the time elapsed in the appeal has affected her
unfavorably, in that while the purchasing power of the agreed price of P800,000 has diminished, the value
of the Jalajala property has increased. But the fact is that her delay in receiving the payment of the agreed
price for her hereditary interest was primarily due to her attempts to nullify the agreement (Annex "A")
she had formally entered into with the advice of her counsel, Attorney Panaguiton. And as to the
devaluation de facto of our currency, what We said in Dizon Rivera vs. Dizon, L-24561, 30 June 1970, 33
SCRA 554, that "estates would never be settled if there were to be a revaluation with every subsequent
fluctuation in the values of currency and properties of the estate", is particularly opposite in the present
case.
Coming now to Case G.R. No. L-28611, the issue is whether the Hacienda de Jalajala (Poblacion),
concededly acquired by Francisco de Borja during his marriage to his first wife, Josefa Tangco, is the
husband's private property (as contended by his second spouse, Tasiana Ongsingco), or whether it forms
part of the conjugal (ganancial) partnership with Josefa Tangco. The Court of First Instance of Rizal
(Judge Herminio Mariano, presiding) declared that there was adequate evidence to overcome the
presumption in favor of its conjugal character established by Article 160 of the Civil Code.
We are of the opinion that this question as between Tasiana Ongsingco and Jose de Borja has become
moot and academic, in view of the conclusion reached by this Court in the two preceding cases (G.R. No. L28568), upholding as valid the cession of Tasiana Ongsingco's eventual share in the estate of her late
husband, Francisco de Borja, for the sum of P800,000 with the accompanying reciprocal quit-claims
between the parties. But as the question may affect the rights of possible creditors and legatees, its
resolution is still imperative.
It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, had been originally acquired jointly
by Francisco de Borja, Bernardo de Borja and Marcelo de Borja and their title thereto was duly registered
in their names as co-owners in Land Registration Case No. 528 of the province of Rizal, G.L.R.O. Rec. No.
26403 (De Barjo vs. Jugo, 54 Phil. 465). Subsequently, in 1931, the Hacienda was partitioned among the
co-owners: the Punta section went to Marcelo de Borja; the Bagombong section to Bernardo de Borja, and
the part in Jalajala proper (Poblacion) corresponded to Francisco de Borja (V. De Borja vs. De Borja 101
Phil. 911, 932).
The lot allotted to Francisco was described as
Una Parcela de terreno en Poblacion, Jalajala: N. Puang River; E. Hermogena Romero; S. Heirs of Marcelo
de Borja O. Laguna de Bay; containing an area of 13,488,870 sq. m. more or less, assessed at P297,410.
(Record on Appeal, pages 7 and 105)
On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate Estate of Francisco de
Borja, instituted a complaint in the Court of First Instance of Rizal (Civil Case No. 7452) against Jose de
Borja, in his capacity as Administrator of Josefa Tangco (Francisco de Borja's first wife), seeking to have
the Hacienda above described declared exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was conjugal property of his parents (Francisco de
Borja and Josefa Tangco), conformably to the presumption established by Article 160 of the Philippine

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Civil Code (reproducing Article 1407 of the Civil Code of 1889), to the effect that:
Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife.
Defendant Jose de Borja further counterclaimed for damages, compensatory, moral and exemplary, as well
as for attorney's fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio Mariano, held that the plaintiff had
adduced sufficient evidence to rebut the presumption, and declared the Hacienda de Jalajala (Poblacion)
to be the exclusive private property of the late Francisco de Borja, and his Administratrix, Tasiana
Ongsingco Vda. de Borja, to be entitled to its possession. Defendant Jose de Borja then appealed to this
Court.
The evidence reveals, and the appealed order admits, that the character of the Hacienda in question as
owned by the conjugal partnership De Borja-Tangco was solemnly admitted by the late Francisco de Borja
no less than two times: first, in the Reamended Inventory that, as executor of the estate of his deceased
wife Josefa Tangco, he filed in the Special Proceedings No. 7866 of the Court of First Instance of Rizal on
23 July 1953 (Exhibit "2"); and again, in the Reamended Accounting of the same date, also filed in the
proceedings aforesaid (Exhibit "7"). Similarly, the plaintiff Tasiana O. Vda. de Borja, herself, as oppositor
in the Estate of Josefa Tangco, submitted therein an inventory dated 7 September 1954 (Exhibit "3") listing
the Jalajala property among the "Conjugal Properties of the Spouses Francisco de Borja and Josefa
Tangco". And once more, Tasiana Ongsingco, as administratrix of the Estate of Francisco de Borja, in
Special Proceedings No. 832 of the Court of First Instance of Nueva Ecija, submitted therein in December,
1955, an inventory wherein she listed the Jalajala Hacienda under the heading "Conjugal Property of the
Deceased Spouses Francisco de Borja and Josefa Tangco, which are in the possession of the Administrator
of the Testate Estate of the Deceased Josefa Tangco in Special Proceedings No. 7866 of the Court of First
Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that they are plain admissions against interest
made by both Francisco de Borja and the Administratrix of his estate, in the course of judicial proceedings
in the Rizal and Nueva Ecija Courts, supporting the legal presumption in favor of the conjugal community,
the Court below declared that the Hacienda de Jalajala (Poblacion) was not conjugal property, but the
private exclusive property of the late Francisco de Borja. It did so on the strength of the following
evidences: (a) the sworn statement by Francis de Borja on 6 August 1951 (Exhibit "F") that
He tomado possession del pedazo de terreno ya delimitado (equivalente a 1/4 parte, 337 hectareas)
adjunto a mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal).
and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, that the entire Hacienda had been
bought at a foreclosure sale for P40,100.00, of which amount P25,100 was contributed by Bernardo de
Borja and P15,000. by Marcelo de Borja; that upon receipt of a subsequent demand from the provincial
treasurer for realty taxes the sum of P17,000, Marcelo told his brother Bernardo that Francisco (son of
Marcelo) wanted also to be a co-owner, and upon Bernardo's assent to the proposal, Marcelo issue a check
for P17,000.00 to pay the back taxes and said that the amount would represent Francisco's contribution in
the purchase of the Hacienda. The witness further testified that
Marcelo de Borja said that that money was entrusted to him by Francisco de Borja when he was still a
bachelor and which he derived from his business transactions. (Hearing, 2 February 1965, t.s.n., pages 1315) (Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn statement overweighed the admissions in the
inventories relied upon by defendant-appellant Jose de Borja since probate courts can not finally
determine questions of ownership of inventoried property, but that the testimony of Gregorio de Borja
showed that Francisco de Borja acquired his share of the original Hacienda with his private funds, for
which reason that share can not be regarded as conjugal partnership property, but as exclusive property of
the buyer, pursuant to Article 1396(4) of Civil Code of 1889 and Article 148(4) of the Civil Code of the
Philippines.
The following shall be the exclusive property of each spouse:
xxx xxx xxx
(4) That which is purchased with exclusive money of the wife or of the husband.

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We find the conclusions of the lower court to be untenable. In the first place, witness Gregorio de Borja's
testimony as to the source of the money paid by Francisco for his share was plain hearsay, hence
inadmissible and of no probative value, since he was merely repeating what Marcelo de Borja had told him
(Gregorio). There is no way of ascertaining the truth of the statement, since both Marcelo and Francisco de
Borja were already dead when Gregorio testified. In addition, the statement itself is improbable, since
there was no need or occasion for Marcelo de Borja to explain to Gregorio how and when Francisco de
Borja had earned the P17,000.00 entrusted to Marcelo. A ring of artificiality is clearly discernible in this
portion of Gregorio's testimony.
As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion thereof (ante, page 14) does not clearly
demonstrate that the "mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal) " refers precisely to the
Hacienda in question. The inventories (Exhibits 3 and 4) disclose that there were two real properties in
Jalajala owned by Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a much bigger one of
1,357.260.70 sq. m., which is evidently the Hacienda de Jalajala (Poblacion). To which of these lands did
the affidavit of Francisco de Borja (Exhibit "F") refer to? In addition, Francisco's characterization of the
land as "mi terreno personal y exclusivo" is plainly self-serving, and not admissible in the absence of cross
examination.
It may be true that the inventories relied upon by defendant-appellant (Exhibits "2", "3", "4" and "7") are
not conclusive on the conjugal character of the property in question; but as already noted, they are clear
admissions against the pecuniary interest of the declarants, Francisco de Borja and his executor-widow,
Tasiana Ongsingco, and as such of much greater probative weight than the self-serving statement of
Francisco (Exhibit "F"). Plainly, the legal presumption in favor of the conjugal character of the Hacienda
de Jalajala (Poblacion) now in dispute has not been rebutted but actually confirmed by proof. Hence, the
appealed order should be reversed and the Hacienda de Jalajala (Poblacion) declared property of the
conjugal partnership of Francisco de Borja and Josefa Tangco.
No error having been assigned against the ruling of the lower court that claims for damages should be
ventilated in the corresponding special proceedings for the settlement of the estates of the deceased, the
same requires no pro announcement from this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of Rizal in Case No. L28040 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.

G.R. No. L-15499

February 28, 1962

ANGELA M. BUTTE, plaintiff-appellant, vs.MANUEL UY and SONS, INC., defendant-appellee.


Appeal from a decision of the Court of First instance of Manila dismissing the action for legal redemption
filed by plaintiff-appellant.
It appears that Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot located at Sta. Cruz,
Manila, as shown by Transfer Certificate of Title No. 52789, issued in the name of the following co-owners:
Marie Garnier Vda. de Ramirez, 1/6; Jose V. Ramirez, 1/6; Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6; and
Jose Ma. Ramirez, 1/6.
On October 20, 1951, Jose 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 plaintiffappellant, 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.
Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de Ramirez, one of the co-owners of the late
Jose 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. After the execution by her attorney-in-fact, Mrs.
Elsa R. Chambers, of an affidavit to the effect that formal notices of the sale had been sent to all possible
redemptioners, the deed of sale was duly registered and Transfer Certificate of Title No. 52789 was
cancelled in lieu of which a new one was issued in the name of the vendee and the other-co-owners.
On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent a letter to the Bank of the Philippine

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Islands as judicial administrator of the estate of the late Jose V. Ramirez informing it of the abovementioned sale. This letter, together with that of the bank, was forwarded by the latter to Mrs. Butte c/o
her counsel Delgado, Flores & Macapagal, Escolta, Manila, and having received the same on December 10,
1958, said law office delivered them to plaintiff-appellant's son, Mr. Miguel Papa, who in turn personally
handed the letters to his mother, Mrs. Butte, on December 11 and 12, 1958. Aside from this letter of
defendant-appellant, the vendor, thru her attorney-in-fact Mrs. Chambers, wrote said bank on December
11, 1958 confirming vendee's letter regarding the sale of her 1/6 share in the Sta. Cruz property for the sum
of P500,000.00. Said letter was received by the bank on December 15, 1958 and having endorsed it to Mrs.
Butte's counsel, the latter received the same on December 16, 1958. Appellant received the letter on
December 19, 1958.
On January 15, 1959, 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 & Sons, Inc. offering to redeem
the 1/6 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.
Without prejudice to the determination by the court of the reasonable and fair market value of the
property sold which she alleged to be grossly excessive, plaintiff prayed for conveyance of the property, and
for actual, moral and exemplary damages.
After the filing by defendant of its answer containing a counterclaim, and plaintiff's reply thereto, trial was
held, after which the court rendered decision on May 13, 1959, dismissing 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.
Based on the foregoing facts, the main issues posed in this appeal are: (1) whether or not plaintiffappellant, having been bequeathed 1/3 of the free portion of the estate of Jose 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; and (2) whether or not she exercised the right of legal redemption within the period
prescribed by law.
The applicable law involved in the present case is contained in Articles 1620, p. 1, and 1623 of the Civil
Code of the Philippines, which read as follows:
ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the otherco-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive,
the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common. (1522a)
ART. 1623. The right of legal predemption or redemption shall not be exercised except within thirty days
from the notice in writing by the respective vendor, or by the vendor, as the case may be. The deed of sale
shall not be accorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he
has given written notice thereof at all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners. (1524a)
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 co-heirs 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
persons 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. (659)
ART. 777. The rights to the succession are transmitted from the moment of the death of the decedent.
(657a)
ART. 947. The legatee or devisee acquires a right to the pure and simple legacies or devisees from the

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death of the testator, and transmits it to his heirs. (881a)
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 in
officiousness of the donation 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 fundamental rule of succession, the heirs of Jose 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 co-owners 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) as 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.
The situation is in no wise altered by the existence of a judicial administrator of the estate of Jose V.
Ramirez while under the Rules of Court the administrator has the right to the possession of the real and
personal estate of the deceased, so far as needed for the payment of the decedent's debts and the expenses
of administration (sec. 3, Rule 85), and the administrator may bring or defend actions for the recovery or
protection of the property or rights of the deceased (sec. 2, Rule 88), such rights of possession and
administration do not include the right of legal redemption of the undivided share sold to Uy & Company
by Mrs. Garnier Ramirez. The reason is obvious: this right of legal redemption only came into existence
when the sale to Uy & Sons, Inc. was perfected, eight (8) years after the death of Jose V. Ramirez, and
formed no part of his estate. The redemption right vested in the heirs originally, in their individual
capacity, they did not derivatively acquire it from their decedent, for when Jose V. Ramirez died, none of
the other co-owners of the Sta. Cruz property had as yet sold his undivided share to a stranger. Hence,
there was nothing to redeem and no right of redemption; and if the late Ramirez had no such right at his
death, he could not transmit it to his own heirs. Much less could Ramirez acquire such right of redemption
eight years after his death, when the sale to Uy & Sons, Inc. was made; because death extinguishes civil
personality, and, therefore, all further juridical capacity to acquire or transmit rights and obligations of any
kind (Civil Code of the Phil., Art. 42).
It is argued that the actual share of appellant Mrs. Butte in the estate of Jose V. Ramirez has not been
specifically determined as yet, that it is still contingent; and that the liquidation of estate of Jose V.
Ramirez may require the alienation of the decedent's undivided portion in the Sta. Cruz property, in which
event Mrs. Butte would have no interest in said undivided portion. Even if it were true, the fact would
remain that so long as that undivided share remains in the estate, the heirs of Jose V. Ramirez own it, as
the deceased did own it before his demise, so that his heirs are now as much co-owners of the Sta. Cruz
property as Jose V. Ramirez was himself a co-owner thereof during his lifetime. As co-owners of the
property, the heirs of Jose V. Ramirez, or any one of them, became personally vested with right of legal
redemption as soon as Mrs. Garnier sold her own pro-indiviso interest to Uy & Sons. Even if subsequently,
the undivided share of Ramirez (and of his heirs) should eventually be sold to satisfy the creditors of the
estate, it would not destroy their ownership of it before the sale, but would only convey or transfer it as in
turn sold (of it actually is sold) to pay his creditors. Hence, the right of any of the Ramirez heirs to redeem
the Garnier share will not be retroactively affected. All that the law requires is that the legal redemptioner
should be a co-owner at the time the undivided share of another co-owner is sold to a stranger. Whether or
not the redemptioner will continue being a co-owner after exercising the legal redemptioner is irrelevant
for the purposes of law.
Nor it can be argued that if the original share of Ramirez is sold by the administrator, his heirs would stand
in law as never having acquired that share. This would only be true if the inheritance is repudiated or the
heir's quality as such is voided. But where the heirship is undisputed, the purchaser of hereditary property
is not deemed to have acquired the title directly from the deceased Ramirez, because a dead man can not
convey title, nor from the administrator who owns no part of the estate; the purchaser can only derive his
title from the Ramirez heirs, represented by the administrator, as their trustee or legal representative.
The right of appellant Angela M. Butte to make the redemption being established, the next point of inquiry
is whether she had made or tendered the redemption price within the 30 days from notices as prescribed
by law. This period, be it noted, is peremptory, because the policy of the law is not to leave the purchaser's
title in uncertainty beyond the established 30-day period. In considering whether or not the offer to
redeem was timely, we think that the notice given by the vendee (buyer) should not be taken into account.
The text of Article 1623 clearly and expressly prescribes that the thirty days for making the redemption are

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to be counted from notice in writing by the vendor. Under the old law (Civ. Code of 1889, Art. 1524), it was
immaterial who gave the notice; so long as the redeeming co-owner learned of the alienation in favor of the
stranger, the redemption period began to run. It is thus apparent that the Philippine legislature in Article
1623 deliberately selected a particular method of giving notice, and that method must be deemed exclusive
(39 Am. Jur., 237; Payne vs. State, 12 S.W. [2d] 528). As ruled in Wampler vs. Lecompte, 150 Atl. 458
(affd. in 75 Law Ed. [U.S.] 275)
Why these provisions were inserted in the statute we are not informed, but we may assume until the
contrary is shown, that a state of facts in respect thereto existed, which warranted the legislature in so
legislating.
The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily
divined. The seller of an undivided interest is in the best position to know who are his co-owners that
under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to the fact of
the sale, its perfection; and its validity, the notice being a reaffirmation thereof, so that the party need not
entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice
should be given by the buyer.
The notice which became operative is that given by Mrs. Chambers, in her capacity as attorney-in-fact of
the vendor Marie Garnier Vda. de Ramirez. Under date of December 11, 1958, she wrote the Administrator
Bank of the Philippine Islands that her principal's one-sixth (1/6) share in the Sta. Cruz property had been
sold to Manuel Uy & Sons, Inc. for P500,000.00. The Bank received this notice on December 15, 1958, and
on the same day endorsed it to Mrs. Butte, care of Delgado, Flores and Macapagal (her attorneys), who
received the same on December 16, 1958. Mrs. Butte tendered redemption and upon the vendee's refusal,
judicially consigned the price of P500,000.00 on January 15, 1959. The latter date was the last one of the
thirty days allowed by the Code for the redemption, counted by excluding December 16, 1958 and
including January 15, 1959, pursuant to Article 13 of the Civil Code. Therefore, the redemption was made
in due time.
The date of receipt of the vendor's notice by the Administrator Bank (December 15) can not be counted as
determining the start of thirty days; for the Administrator of the estate was not a proper redemptioner,
since, as previously shown, the right to redeem the share of Marie Garnier did not form part of the estate of
Jose V. Ramirez.
We find no jurisdiction for appellant's claim that the P500,000,00. paid by Uy & Sons, Inc. for the Garnier
share is grossly excessive. Gross excess cannot be predicated on mere individual estimates of market price
by a single realtor.
The redemption and consignation having been properly made, the Uy counterclaim for damages and
attorney's fees predicated on the assumption that plaintiff's action was clearly unfounded, becomes
untenable.
PREMISES CONSIDERED, the judgment appealed from is hereby reversed and set aside, and another one
entered:
(a) Declaring the consignation of P500,000,00 made by appellant Angela M. Butte duly and properly
made;
(b) 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.
(c) Ordering appellant Manuel Uy & Sons, Inc. to accept the consigned price and to convey to Angela M.
Butte the undivided portion above referred to, within 30 days from the time our decision becomes final,
and subsequently to account for the rentals and fruits of the redeemed share from and after January 15,
1958, until its conveyance; and.
(d) Ordering the return of the records to the court of origin for further proceedings conformable to this
opinion.
Without finding as to costs.

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G.R. No. L-15088

January 31, 1961

TORIBIA FONTANILLA PACIO, SANTIAGO PACIO, ESPERANZA PACIO, and ROSARIO


PACIO, plaintiffs-appellants, vs.MANUELA PACIO BILLON, BRIGIDA PACIO, and DOMINGA
PACIO, defendants-appellees.
In 1901, Flaviano Pacio married Severa Jucutan. Herein defendants were their children. Severa died in
1930; and thereafter Flavio married the plaintiff Toribia Fontanilla, who bore him the other four plaintiffs.
The dispute between the parties in the La Union court of first instance, concerned two parcels of land
which defendants allegedly retained without any right thereto. The litigants later agreed to a partition of
the first parcel, and the court so decreed.
As to the second parcel, a hearing was held, and it was awarded to the defendants, on the ground that it
had been donated propter nuptias to Severa, in 1901, by Flaviano Pacio, who was then admittedly the
owner.
According to the stipulation of facts:
. . . a donation propter nuptias was made in a private instrument by Flaviano Pacio in favor of his first wife
Severa Jucutan, before their marriage on June 4, 1901 . .;
3. That the land continued to be declared in the name of Flaviano Pacio notwithstanding this donation
propter nuptias until 1956 when the same was changed in the name of the defendants Brigida, Manuela
and Dominga, all surnamed Pacio;
4. That land taxes were paid in the name of Flaviano Pacio as shown by tax receipts for the years 1931,
1933, 1934, 1935, 1940, 1942, 1943, 1944, 1945, 1946, 1947, 1948, 1949, 1955, and 1956;
5. That Flaviano Pacio died on November 2, 1951;
xxx

xxx

xxx

8. That defendants lived with their father and the second wife, Toribia Fontanilla, from the date of their
marriage in 1933, except Manuela who left on the date of her marriage in 1941, and returned in 1946, and
Dominga who left in 1943 and Brigida is presently living with the other defendants;
9. That while the plaintiffs and the defendants lived together during the said period, they equally shared all
the harvests reaped from the land in the litigation;
10. That the land taxes were paid on both parcels (a) and (b) in the names of the defendants starting with
the year 1957 when the tax declarations were changed into their names on December 20, 1956; . . .,"
The plaintiffs-appellants contend that the donation was void, because it was not made in a public
instrument. They are right. Art. 633 of the Spanish Civil Code states that "In order that a donation of real
property be valid it must be made by public instrument in which the property donated must be specifically
described and the amount of the encumbrances to be assumed by the donee expressed . . .." .
And this Court has held that a donation propter nuptias of real property written on a private instrument is
not valid even between the parties.1
The trial judge said "a donation propter nuptias in order to be valid between the donor and the donee,
need not be embodied in a public instrument as such formality is only necessary for registration purposes
in the Office of the Register of Deeds" so as to bind third persons. He was obviously applying the new
principles in the Philippine Civil Code effective in the year 1950. 2 But in 1901 when the gift was made, the
law was contained in the Spanish Civil Code, according to which, even between the parties, the donation
must be in a public instrument.
Realizing the force of plaintiffs' point, defendants emphasize that the deed of donation constituted a title
on which to base acquisitive prescription, inasmuch as Severa possessed the land from 1901 to March 1930
when she died. The stipulation of facts says nothing about such possession. True, there was a witness,
Monica Pacio, who testified; but she stated that both husband and wife held possession of the land, and the
stipulation says that from 1933 the parties shared the harvests equally. At any rate, it is obvious that
normally, prescription by adverse possession can not exist between husband and wife. See Article 1109

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Civil Code of the Philippines.
Espique v. Espique3 on which the appellees rely is not controlling because the prescription there
mentioned did not refer to possession by the wife as against her husband.
It follows that Flaviano Pacio continued to be the owner of the land as the donation had no effect and there
was no prescription. Upon his death, the land became the joint property of his children by the first and
second marriage. Subject of course to the rights of his surviving spouse, the plaintiff Toribia Fontanilla.
Reversing the decision in so far as this parcel is concerned, we hereby order the return of the expediente to
the court below for further proceedings on partition in accordance with these views.

G.R. No. 75884 September 24, 1987


JULITA GO ONG, FOR HERSELF AND AS JUDICIAL GUARDIAN OF STEVEN GO ONG,
petitioners, vs.THE HON. COURT OF APPEALS, ALLIED BANKING CORPORATION and the
CITY SHERIFF OF QUEZON CITY, respondents.
This is a petition for review on certiorari of the March 21, 1986 Decision * of the Court of Appeals in ACG.R. CV No. 02635, "Julita Ong etc. vs. Allied Banking Corp. et al." affirming, with modification, the
January 5, 1984 Decision of the Regional Trial Court of Quezon City in Civil Case No. Q-35230.
The uncontroverted facts of this case, as found by the Court of Appeals, are as follows:
...: Two (2) parcels of land in Quezon City Identified as Lot No. 12, Block 407, Psd 37326 with an area of
1960.6 sq. m. and Lot No. 1, Psd 15021, with an area of 3,660.8 sq. m. are covered by Transfer Certificate
of Title No. 188705 in the name of "Alfredo Ong Bio Hong married to Julita Go Ong "(Exh. D). Alfredo Ong
Bio Hong died on January 18, 1975 and Julita Go Ong was appointed administratrix of her husband's
estate in Civil Case No. 107089. The letters of administration was registered on TCT No. 188705 on
October 23, 1979. Thereafter, Julita Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705 was
partially cancelled and TCT No. 262852 was issued in favor of Lim Che Boon covering Lot No. 12 (Exh. D4). On June 8, 1981 Julita Go Ong through her attorney-in-fact Jovita K. Yeo (Exh. 1) mortgaged Lot No. 1
to the Allied Banking Corporation to secure a loan of P900,000.00 obtained by JK Exports, Inc. The
mortgage was registered on TCT No. 188705 on the same date with the following notation: "... mortgagee's
consent necessary in case of subsequent alienation or encumbrance of the property other conditions set
forth in Doc. No. 340, Page No. 69, Book No. XIX, of the Not. Public of Felixberto Abad". On the loan there
was due the sum of P828,000.00 and Allied Banking Corporation tried to collect it from Julita Go Ong,
(Exh. E). Hence, the complaint alleging nullity of the contract for lack of judicial approval which the bank
had allegedly promised to secure from the court. In response thereto, the bank averred that it was plaintiff
Julita Go Ong who promised to secure the court's approval, adding that Julita Go Ong informed the
defendant that she was processed the sum of P300,000.00 by the JK Exports, Inc. which will also take
charge of the interest of the loan.
Concluding, the trial court ruled:
Absent (of) any evidence that the property in question is the capital of the deceased husband brought into
the marriage, said property should be presumed as acquired during the marriage and, therefore, conjugal
property,
After the dissolution of the marriage with the death of plaintiff's husband, the plaintiff acquired, by law,
her conjugal share, together with the hereditary rights thereon. (Margate vs. Rabacal, L-14302, April 30,
1963). Consequently, the mortgage constituted on said property, upon express authority of plaintiff,
notwithstanding the lack of judicial approval, is valid, with respect to her conjugal share thereon, together
with her hereditary rights.
On appeal by petitioner, respondent Court of Appeals affirmed, with modification, the appealed decision
(Record, pp. 19-22). The dispositive portion of the appellate court's decision reads:
WHEREFORE, with the modification that the extrajudicial foreclosure proceedings instituted by
defendant against plaintiff shall be held in abeyance to await the final result of Civil Case No. 107089 of the

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Court of First Instance of Manila, 6th Judicial District Branch XXXII, entitled "IN THE MATTER OF THE
INTESTATE ESTATE OF THE LATE ALFREDO ONG BIO: JULITA GO ONG, ADMINISTRATRIX". In
pursuance with which the restraining order of the lower court in this case restraining the sale of the
properties levied upon is hereby ordered to continue in full force and effect coterminous with the final
result of Civil Case No. 107089, the decision appealed from is hereby affirmed. Costs against plaintiffappellant.
SO ORDERED.
On April 8, 1986, petitioner moved for the reconsideration of the said decision (Ibid., pp. 24-29), but in a
Resolution dated September 11, 1986, respondent court denied the motion for lack of merit (Ibid., p. 23).
Hence, the instant petition (Ibid., pp. 6-17).
The Second Division of this Court, in a Resolution dated November 19, 1986 (Rollo, p. 30), without giving
due course to the petition, resolved to require private respondent to comment thereon and it did on
February 19, 1987 (Ibid., pp. 37-42). Thereafter, in a Resolution dated April 6, 1987, the petition was given
due course and the parties were required to file their respective memoranda (Ibid., p. 43).
Petitioner filed her Memorandum on May 13, 1987 (Ibid., pp. 45-56), while private respondent filed its
Memorandum on May 20, 1987 (Ibid., pp. 62-68).
The sole issue in this case is
WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER
PETITIONER'S ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL.
The instant petition is devoid of merit.
The well-settled rule that the findings of fact of the trial court are entitled to great respect, carries even
more weight when affirmed by the Court of Appeals as in the case at bar.
In brief, the lower court found: (1) that the property under the administration of petitioner the wife of
the deceased, is a community property and not the separate property of the latter; (2) that the mortgage
was constituted in the wife's personal capacity and not in her capacity as administratrix; and (3) that the
mortgage affects the wife's share in the community property and her inheritance in the estate of her
husband.
Petitioner, asserting that the mortgage is void for want of judicial approval, quoted Section 7 of Rule 89 of
the Rules of Court and cited several cases wherein this Court ruled that the regulations provided in the said
section are mandatory.
While petitioner's assertion may have merit insofar as the rest of the estate of her husband is concerned
the same is not true as regards her conjugal share and her hereditary rights in the estate. The records show
that petitioner willingly and voluntarily mortgaged the property in question because she was processed by
JK Exports, Inc. the sum of P300,000.00 from the proceeds of the loan; and that at the time she executed
the real estate mortgage, there was no court order authorizing the mortgage, so she took it upon herself, to
secure an order.
Thus, in confirming the findings of the lower court, as supported by law and the evidence, the Court of
Appeals aptly ruled that Section 7 of Rule 89 of the Rules of Court is not applicable, since the mortgage was
constituted in her personal capacity and not in her capacity as administratrix of the estate of her husband.
Nevertheless, petitioner, citing the cases of Picardal, et al. vs. Lladas (21 SCRA 1483) and Fernandez, et
al. vs. Maravilla (10 SCRA 589), further argues that in the settlement proceedings of the estate of the
deceased spouse, the entire conjugal partnership property of the marriage is under administration. While
such may be in a sense true, that fact alone is not sufficient to invalidate the whole mortgage, willingly and
voluntarily entered into by the petitioner. An opposite view would result in an injustice. Under similar
circumstances, this Court applied the provisions of Article 493 of the Civil Code, where the heirs as coowners shall each have the full ownership of his part and the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it, and even effect of the alienation or mortgage, with respect to
the co-owners, shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership (Philippine National Bank vs. Court of Appeals, 98 SCRA 207 [1980]).
Consequently, in the case at bar, the trial court and the Court of Appeals cannot be faulted in ruling that

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21
the questioned mortgage constituted on the property under administration, by authority of the petitioner,
is valid, notwithstanding the lack of judicial approval, with respect to her conjugal share and to her
hereditary rights. The fact that what had been mortgaged was in custodia legis is immaterial, insofar as her
conjugal share and hereditary share in the property is concerned for after all, she was the ABSOLUTE
OWNER thereof. This ownership by hers is not disputed, nor is there any claim that the rights of the
government (with reference to taxes) nor the rights of any heir or anybody else have been prejudiced for
impaired. As stated by Associate Justice (later Chief Justice) Manuel Moran in Jakosalem vs. Rafols, et al.,
73 Phil. 618
The land in question, described in the appealed decision, originally belonged to Juan Melgar. The latter
died and the judicial administration of his estate was commenced in 1915 and came to a close on December
2, 1924, only. During the pendency of the said administration, that is, on July 5, 1917, Susana Melgar,
daughter of the deceased Juan Melgar, sold the land with the right of repurchase to Pedro Cui, subject to
the stipulation that during the period for the repurchase she would continue in possession of the land as
lessee of the purchase. On December 12, 1920, the partition of the estate left by the deceased Juan Melgar
was made, and the land in question was adjudicated to Susana Melgar. In 1921, she conveyed, in payment
of professional fees, one-half of the land in favor of the defendant-appellee Nicolas Rafols, who entered
upon the portion thus conveyed and has been in possession thereof up to the present. On July 23, 1921,
Pedro Cui brought an action to recover said half of the land from Nicolas Rafols and the other half from the
other defendants, and while that case was pending, or about August 4, 1925, Pedro Cui donated the whole
land in question to Generosa Teves, the herein plaintiff-appellant, after trial, the lower court rendered a
decision absolving Nicolas Rafols as to the one-half of the land conveyed to him by Susana Melgar, and
declaring the plaintiff owner of the other half by express acknowledgment of the other defendants. The
plaintiff appealed from that part of the judgment which is favorable to Nicolas Rafols.
The lower court absolved Nicolas Rafols upon the theory that Susana Melgar could not have sold anything
to Pedro Cui because the land was then in custodia legis, that is, under judicial administration. This is
error. That the land could not ordinary be levied upon while in custodia legis, does not mean that one of
the heirs may not sell the right, interest or participation which he has or might have in the lands under
administration. The ordinary execution of property in custodia legis is prohibited in order to avoid
interference with the possession by the court. But the sale made by an heir of his share in an inheritance,
subject to the result of the pending administration, in no wise stands in the way of such administration.
The reference to judicial approval in Sec. 7, Rule 89 of the Rules of Court cannot adversely affect the
substantive rights of private respondent to dispose of her Ideal [not inchoate, for the conjugal partnership
ended with her husband's death, and her hereditary rights accrued from the moment of the death of the
decedent (Art. 777, Civil Code) share in the co-heirship and/or co-ownership formed between her and the
other heirs/co-owners (See Art. 493, Civil Code, supra.). Sec. 7, Art. 89 of the Civil Code applies in a case
where judicial approval has to be sought in connection with, for instance, the sale or mortgage of property
under administration for the payment, say of a conjugal debt, and even here, the conjugal and hereditary
shares of the wife are excluded from the requisite judicial approval for the reason already adverted to
hereinabove, provided of course no prejudice is caused others, including the government.
Moreover, petitioner is already estopped from questioning the mortgage. An estoppel may arise from the
making of a promise even though without consideration, if it was intended that the promise should be
relied upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the
perpetration of fraud or would result in other injustice (Gonzalo Sy Trading vs. Central Bank, 70 SCRA
570).
PREMISES CONSIDERED, the instant petition is hereby DENIED and the assailed decision of the Court of
Appeals is hereby AFFIRMED.
SO ORDERED.

G.R. No. L-24434

January 17, 1968

HEIRS OF PEDRO REGANON, JOVENCIA REGANON, MENCIA REGANON, JOSEFA


REGANON, VIOLETA REGANON, and FLORA REGANON, plaintiffs-appellees, vs.RUFINO
IMPERIAL, defendant-appellant.
This is an appeal from the orders dated June 9, 1964, July 14, 1964 and August 11, 1964, respectively, of the
Court of First Instance of Zamboanga del Norte (Dipolog, Branch II).

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22
The facts of the case are admitted by both parties.
On February 22, 1963, the heirs of Pedro Reganon filed a complaint for recovery of ownership and
possession of about one-hectare portion of a parcel of land (Lot No. 1 or Lot No. 4952, situated at Miasi,
Polanco, Zamboanga del Norte, covered by O.T.C. No. 1447, with an area of 7.9954 hectares), with
damages, against Rufino Imperial.
Defendant not having filed an answer within the reglementary period, the plaintiffs on April 8, 1963 filed a
motion to declare the former in default. The trial court granted the motion in its order dated April 10,
1963.
On April 23, 1963, the plaintiffs presented their evidence ex parte before the Clerk of Court acting as
Commissioner. The court a quo on May 6, 1963, rendered a decision declaring the plaintiffs lawful owners
of the land in question and entitled to its peaceful possession and enjoyment; ordering defendant
immediately to vacate the portion occupied by him and to restore the peaceful possession thereof to
plaintiffs; and sentencing defendant to pay plaintiffs the amount of P1,929.20 and the costs.
On November 29, 1963, the plaintiffs filed a motion for issuance of a writ of execution. This was granted by
the trial court in its order of December 9, 1963.
The Deputy Provincial Sheriff submitted on February 8, 1964 a sheriff's return of proceedings reporting
the garnishment and sale of a carabao and goat belonging to defendant for P153.00, and the attachment
and sale of defendant's parcel of land covered by Tax Declaration No. 4694, situated in Sicet, Polanco,
Zamboanga del Norte, for P500.00 both sales having been made to the only bidder, plaintiffs' counsel
Atty. Vic T. Lacaya.
On March 13, 1964, the Philippine National Bank deposited in the Philippine National Bank-Dipolog
Branch the residuary estate of its former ward, Eulogio Imperial, in the sum of P10,303.80, pursuant to an
order of Branch I of the Court of First Instance of Zamboanga del Norte in Sp. Proc. No. R-145.
On May 25, 1964, the heirs of said Eulogio Imperial, one of whom is defendant, executed a Deed of
Extrajudicial Partition of the residuary estate, wherein was apportioned P1,471.97 as defendant Rufino
Imperial's share.
Informed of this development, the plaintiffs filed on June 5, 1964 an ex parte motion for issuance of an
alias writ of execution and of an order directing the manager, or the representative, of the Philippine
National Bank-Dipolog Branch, to hold the share of defendant and deliver the same to the provincial
sheriff of the province to be applied to the satisfaction of the balance of the money judgment. This was
granted by the trial court (Branch II) in its order dated June 9, 1964.
On June 17, 1964, the Deputy Provincial Sheriff issued a sheriffs notification for levy addressed to
defendant, giving notice of the garnishment of the rights, interests, shares and participation that defendant
may have over the residuary estate of the late Eulogio Imperial, consisting of the money deposited in the
Philippine National Bank-Dipolog Branch.
Defendant, through counsel, appearing for the first time before the trial court, on June 24, 1964 filed a
motion for reconsideration of the order dated June 9, 1964, and to quash the alias writ of execution issued
pursuant to it, to which plaintiffs filed their opposition on July 6, 1964. On July 14, 1964, the trial court
denied defendant's aforesaid motion.
Defendant's second motion for reconsideration likewise having denied by the trial court in its order of
August 11, 1964, defendant appealed to Us, raising the following issues:
(1) Upon the death of a ward, is the money accumulated in his guardianship proceedings and deposited in
a bank, still considered in custodia legis and therefore cannot be attached?
(2) Is the residuary estate of a U.S. veteran, which consists in the aggregate accumulated sum from the
monthly allowances given him by the United States Veterans Administration (USVA) during his lifetime,
exempt from execution?
Defendant-appellant argues that the property of an incompetent under guardianship is in custodia legis
and therefore can not be attached.
It is true that in a former case 1 it was held that property under custodia legis can not be attached. But this

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23
was under the old Rules of Court. The new Rules of Court 2 now specifically provides for the procedure to
be followed in case what is attached is in custodia legis. 3 The clear import of this new provision is that
property under custodia legis is now attachable, subject to the mode set forth in said rule.
Besides, the ward having died, the guardianship proceedings no longer subsist:
The death of the ward necessarily terminates the guardianship, and thereupon all powers and duties of the
guardian cease, except the duty, which remains, to make a proper accounting and settlement in the
probate court. 4
As a matter of fact, the guardianship proceedings was ordered conditionally closed by Branch I of the
Court of First Instance of Zamboanga del Norte in which it was pending, in its order of February 8, 1964,
where it stated
In the meantime, the guardian Philippine National Bank is hereby directed to deposit the residuary estate
of said ward with its bank agency in Dipolog, this province, in the name of the estate of the deceased ward
Eulogio Imperial, preparatory to the eventual distribution of the same to the heirs when the latter shall be
known, and upon proof of deposit of said residuary estate, the guardian Philippine National Bank shall
forthwith be relieved from any responsibility as such, and this proceeding shall be considered closed and
terminated. 5
And the condition has long been fulfilled, because on March 13, 1964 the Philippine National Bank-Manila
deposited the residuary estate of the ward with the Philippine National Bank-Dipolog Branch, evidenced
by a receipt attached to the records in Sp. Proc. No. R-145. 6
When Eulogio Imperial died on September 13, 1962, the rights to his succession from the moment of his
death were transmitted to his heirs, one of whom is his son and heir, defendant-appellant herein. 7 This
automatic transmission can not but proceed with greater ease and certainty than in this case where the
parties agree that the residuary estate is not burdened with any debt. For,
The rights to the succession of a person are transmitted from the moment of death, and where, as in this
case, the heir is of legal age and the estate is not burdened with any debts, said heir immediately succeeds,
by force of law, to the dominion, ownership, and possession of the properties of his predecessor and
consequently stands legally in the shoes of the latter. 8
That the interest of an heir in the estate of a deceased person may be attached for purposes of execution,
even if the estate is in the process of settlement before the courts, is already a settled matter in this
jurisdiction. 9
It is admitted that the heirs of Eulogio Imperial, including herein defendant-appellant, have on May 25,
1964 executed a Deed of Extrajudicial Partition. This instrument suffices to settle the entire estate of the
decedent provided all the requisites for its validity are fulfilled 10 even without the approval of the
court. Therefore, the estate for all practical purposes have been settled. The heirs are at full liberty to
withdraw the residuary estate from the Philippine National Bank-Dipolog Branch and divide it among
themselves. The only reason they have not done so is because of the alleged illegal withdrawal from said
estate of the amount of P1,080.00 by one Gloria Gomez by authority of Branch I of the Court of First
Instance of Zamboanga del Norte, which incident is now on appeal before the Court of Appeals. This
appeal, however, does not detract any from the fact that the guardianship proceedings is closed and
terminated and the residuary estate no longer under custodia legis.
Finally, it is defendant-appellant's position that the residuary estate of Eulogio Imperial, a former U.S.
veteran, having been set aside from the monthly allowances given him by the United States Veterans
Administration (USVA) during his lifetime, is exempt from execution.
Any pension, annuity, or gratuity granted by a Government to its officers or employees in recognition of
past services rendered, is primordially aimed at tiding them over during their old age and/or disability.
This is therefore a right personalissima, purely personal because founded on necessity. It requires no
argument to show that where the recipient dies, the necessity motivating or underlying its grant
necessarily ceases to be. Even more so in this case where the law 11 providing for the exemption is
calculated to benefit U.S. veterans residing here, and is therefore merely a manifestation of comity.
Besides, as earlier stated, the heirs of Eulogio Imperial, one of whom is appellant, have already executed a
Deed of Extrajudicial Partition the end result of which is that the property is no longer the property of
the estate but of the individual heirs. And it is settled that:

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24
When the heirs by mutual agreement have divided the estate among themselves, one of the heirs can not
therefore secure the appointment of an administrator to take charge of and administer the estate or a part
thereof. The property is no longer the property of the estate, but of the individual heirs, whether it
remains undivided or not. 12
WHEREFORE, the orders appealed from are hereby affirmed, with costs against defendant-appellant. So
ordered.
G.R. No. L-25952

June 30, 1967

MARGARITA SALVADOR, in her own behalf and as Attorney-in-fact of CANDIDA


SALVADOR, ET AL., petitioners, vs.THE HON. JUDGE ANDRES STA. MARIA, DOMINADOR
CARDENAS, REMEDIOS CABRERA, ALBERTO M. K. JAMIR and SIMEON ENRIQUEZ,
respondents.
Seven parcels of titled land and two parcels of untitled land, situated in Bigaa, Bulacan, were owned by
Celestino Salvador. In 1941, he executed a deed of sale over them in favor of the spouses Alfonso Salvador
and Anatolia Halili. Alleging that the sale was void for lack of consideration, he filed on May 12,1955,
against said vendees, a suit for reconveyance of said parcels of land (CFI of Bulacan, Br. I, Civil Case No.
1082).
On April 27, 1956, Celestino Salvador died, testate. As his alleged heirs, twenty-one persons 1 were on May
18, 1956 substituted as plaintiffs in the action for reconveyance. And meanwhile, special proceedings for
the probate of his will and for letters testamentary was instituted (CFI of Bulacan, Br. II, Sp. Proceedings
No. 940). In said proceedings, Dominador Cardenas was appointed on June 11, 1956 special administrator
of Celestino Salvador's testate estate.1wph1.t
On September 4, 1956 the administrator filed in Sp. Proceedings No. 940 an inventory of properties of the
estate, covering the same parcels of land subject matter of the reconveyance action. On September 7, 1956,
Celestino Salvador's will was admitted to probate and Dominador Cardenas was appointed executor of said
will. Actual issuance of letters testamentary to him was made on October 27, 1956.
Twenty-three (23) persons were instituted heirs in the will. Of these, nine (9) were not among the twentyone (21) alleged relatives substituted in the reconveyance case; and of the twenty-one (21) substituted
alleged heirs seven (7) were not instituted in the will. 2
In the suit for reconveyance, on November 26, 1956, the Court (CFI of Bulacan, Br. I) rendered judgment,
ordering the defendants therein (the spouses Alfonso and Anatolia), to reconvey the parcels of land to the
estate of Celestino Salvador. Appeal therefrom to the Court of Appeals was interposed by said
defendants.1wph1.t
On August 12, 1961, the Court of Appeals affirmed the reconveyance judgment, with the correction that
reconveyance be in favor of the twenty-one (21) heirs substituted as plaintiffs therein.
About three years later, pursuant to an order of the CFI of Bulacan, Br. II, in the testacy proceedings, dated
April 21, 1964, one of the parcels of land involved, Lot 6, was sold so that with its proceeds debtors who
filed claims may be paid. The Philippine National Bank bought it at P41,184.00. Said amount was then
deposited in the same bank by the administrator, subject to Court order.
On December 18, 1964, defendants in the suit for reconveyance executed a deed of reconveyance over the
subject parcels of land, in favor of Celestino Salvador's estate. Revoking the same as lot in accordance
with the final judgment therein, the CFI of Bulacan, Br. I, on September 24, 1965, ordered a new deed of
reconveyance to be executed, in favor of the twenty-one persons substituted as plaintiffs in that action.
Accordingly, on September 30, 1965, a new deed of reconveyance was made, in favor of said twenty-one
(21) persons as heirs of Celestino.
Following this, on November 22, 1965, said Br. I, ordered the corresponding title certificate (TCT No.
54639) in the administrator's name, cancelled; new title certificate to be issued in the names of the same
twenty-one (21) persons. Said order was carried out, and TCT No. 63734 was issued in the names of the
twenty-one persons. 3
On December 7, 1965, Br. I (reconveyance court) ordered the Philippine National Bank to release the
P41,184.00 proceeds of the sale of Lot 6, to the twenty-one (21) plaintiffs in the reconveyance case.

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25
Apparently, although the passbook was given by the administrator to said twenty-one persons, no release
was made, as the Philippine National Bank awaited Br. II's order.
Br. II, on March 1, 1966, approved the following claims against the estate:
Taxes

Nat'l. gov't

P5,328.23

Atty's fees

Atty. Enriquez

8,000.00

Atty's fees

Atty. Jamir

12,000.00

Loan

R. Cabrera

13,544.35

TOTAL........

38,872.58
=========

On March 30, 1966, said Br. II (probate court), ordered return of the passbook to the administrator; and
release to the administrator by the PNB of the P41,184.00, or so much thereof is needed to pay the aforestated debts of the estate.
After failing to get reconsideration of said order, the twenty-one (21) substituted heirs, on April 25, 1966,
filed with Us the present special civil action for certiorari with preliminary injunction to assail the order to
pay the debts of the estate with the P41,184.00 proceeds of the sale of Lot 6; and to question Br. II's
(probate court) power to dispose of the parcels of land involved in the reconveyance suit in Br. I.
Raised are these issues: (1) Are the parcels of land and the proceeds of the sale of one of them, properties
of the estate or not? (2) Does final judgment in the reconveyance suit in favor of the twenty-one so-called
heirs who substituted Celestino Salvador, bar the disposition of the reconveyed properties by the
settlement court?
It is a settled point of law that the right of heirs to specific, distributive shares of inheritance does not
become finally determinable until all the debts of the estate are paid. Until then, in the face of said claims,
their rights cannot be enforced, are inchoate, and subject to the existence of a residue after payment of the
debts (Castellvi de Raquiza v. Castellvi, L-17630, October 31, 1963; Jimoga-on v. Belmonte, 84 Phil. 545;
Sec. 1, Rule 90, Rules of Court).
Petitioners do not question the existence of the debts abovementioned. They only contend that the
properties involved having been ordered by final judgment reconveyed to them, not to the estate the same
are not properties of the estate but their own, and thus, not liable for debts of the estate.
Said contention is self-refuting. Petitioners rely for their rights on their alleged character as heirs of
Celestino; as such, they were substituted in the reconveyance case; the reconveyance to them was
reconveyance to them as heirs of Celestino Salvador. It follows that the properties they claim are, even by
their own reasoning, part of Celestino's estate. The right thereto as allegedly his heirs would arise only if
said parcels of land are part of the estate of Celestino, not otherwise. Their having received the same,
therefore, in the reconveyance action, was perforce in trust for the estate, subject to its obligations. They
cannot distribute said properties among themselves as substituted heirs without the debts of the estate
being first satisfied.
At any rate, the proceeds of Lot 6 alone (P41,184.00) appears more than sufficient to pay the debt
(P38,872.58); and there will remain the other parcels of land not sold. As to the question of who will
receive how much as heirs, the same is properly determinable by the settlement court, after payment of the
debts (Pimentel v. Palanca, 5 Phil. 436; Maningat v. Castillo, 75 Phil. 532; Jimoga-on v. Belmonte, supra).
Wherefore, the petition for certiorari is denied, without costs. So ordered.

G.R. No. L-25049

August 30, 1968

FILEMON RAMIREZ, MONICA RAMIREZ, and JOSE EGUARAS, plaintiffs-appellants, vs.


ARTEMIO BALTAZAR, ET AL., defendants-appellees.
On appeal from an order dismissing the complaint, on motion to dismiss, in Civil Case No. SC-319 of the

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26
Court of First Instance of Laguna.
It appears that on 6 January 1959, Victoriana Eguaras single, made and executed a real estate mortgage
over a parcel of land, owned by her in fee simple, as security for a loan of P2,170.00 in favor of the spouses
Artemio Baltazar and Susana Flores.
Upon the demise of the mortgagor, the mortgagees, as creditors of the deceased, on 16 September 1960
filed a petition for the intestate proceedings of her estate, in the Court of First Instance of Laguna,
docketed as Civil Case No. SC-99 wherein said mortgages, as petitioners, alleged that Filemon Ramirez and
Monica Ramirez are the heirs of the deceased. Filemon Ramirez was appointed administrator of the estate;
however, having failed to qualify, on 16 January 1961, the court appointed Artemio Diawan, then a deputy
clerk of court, administrator of the estate who, in due time, qualified for the office.
On 19 April 1961, the mortgagees, Artemio Baltazar and Susana Flores, filed a complaint for foreclosure of
the aforesaid mortgage, against Artemio Diawan, in his capacity as administrator of the estate, docketed as
Civil Case No. SC-292 of the Court of First Instance of Laguna. The defendant-administrator was duly
served with summons but he failed to answer, whereupon, on petition of the plaintiffs said defendant was
declared in default. The case was referred to a commissioner to receive the evidence for the plaintiffs, and
defendant-administrator, as deputy clerk of court, acted as such hearing commissioner. 1wph1.t
On 16 August 1961, decision was rendered decreeing the foreclosure of the mortgaged property and the
sale thereof, if, within ninety days from finality of the decision, the obligation was not fully paid. The
judgment not having been satisfied, a writ of execution was issued for the sale of the mortgaged property,
and after compliance with the requirements of the law regarding the sending, posting and publication of
the notice of sale, the Sheriff sold the property at public auction to the highest bidder, who happened to be
the plaintiffs themselves, for the sum of P2,888.50 covering the amount of the judgment, plus the
expenses of the sale and the Sheriff's fees. On petition of the plaintiffs, the sale was confirmed by the court
on 26 January 1962.
On 6 February 1962, Filemon Ramirez, Monica Ramirez and Jose Eguaras, the first two being the heirs
named in the petition for intestate proceedings, filed a complaint designated "For the Annulment of all
Proceedings in said Civil Case No. SC-292 for the Foreclosure of the Mortgage", against the spouses
Artemio Baltazar and Susana Flores, and Artemio Diawan, in his capacity as administrator of the estate of
Victoriana Eguaras, deceased, and Silverio Talabis, in his capacity as deputy provincial sheriff of Laguna,
docketed as Civil Case No. SC-319 of the Court of First Instance of Laguna.
The facts hereinabove narrated are, succinctly, contained in the complaint in said Civil Case No. SC-319,
with the additional averments that the defendant Diawan, the deputy clerk of court appointed as
administrator of the intestate estate of the deceased, acted in collusion with the other defendants Artemio
Baltazar and Susana Flores, deliberately and in fraud of the plaintiffs: (a) in allowing the reglementary
period within which to file an answer to lapse without notifying and/or informing the said plaintiffs of the
complaint for foreclosure, as a result of which he was declared in default to the prejudice of the estate
which he represents; (b) that had the plaintiffs (Monica and Filemon) been notified of the pendency of the
case, the defendant administrator could have interposed a counterclaim because payment in the sum of
P1,548.52 had been made and received by the mortgagees on account of the debt; (c) in presiding as
hearing officer in the ex parte hearing in Civil Case No. 292, to receive evidence for plaintiffs therein,
notwithstanding the fact that there was another deputy clerk of court available who could have acted in his
stead, as a result of which an anomalous situation was created whereby he was a defendant and at the
same time a commissioner receiving evidence against himself as administrator; (d) in allowing judgment
to become final without notifying the plaintiffs; (e) in deliberately, allowing the 90-day period within
which to make payment to expire without notifying the heirs, as a result of which the said heirs were not
afforded an opportunity to make payments ordered by the Court in its decision; and (f) in refusing to help
the heirs seek postponement of the auction sale. It is also alleged that it was only when the property
foreclosed was published for sale at public auction that the heirs came to know about the foreclosure
proceedings.
The defendants spouses, Artemio Baltazar and Susana Flores, filed a motion to dismiss the complaint on
the ground that the plaintiffs have no legal capacity to sue; defendant Diawan likewise moved to dismiss
on two grounds: that plaintiffs have no legal capacity to sue and that the complaint states no cause of
action. 1wph1.t
Despite vigorous opposition interposed by the plaintiffs against the aforesaid motions to dismiss, the
court, on 13 March 1962, dismissed the complaint with costs against the plaintiffs, reasoning thus: that
"upon consideration of the evidence, said defendant could not have offered any evidence to avoid the
foreclosure of the mortgage which the Court found to be in order. Under the circumstances and with the

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apparent disinterestedness of Filemon and Rolando to qualify as administrator when appointed, there
could not have been any connivance and/or collusion between plaintiffs in this case and Artemio Diawan
as administrator"; and that plaintiffs have no legal capacity to sue since their status as legal heirs of the
deceased has yet to be determined precisely in Special Proceeding No. SC-99, and until such status is so
fixed by the Court, they have no cause of action against defendants.
In that order of 13 March 1962, the court also denied plaintiffs' petition for the issuance of a writ of
preliminary injunction to enjoin defendants from entering and taking physical possession of the land in
question on the ground "that possession thereof was effected and delivered by the Provincial Sheriff to
Artemio Baltazar and Susana Flores on February, 1962."
Reconsideration of the aforesaid order having been denied, the plaintiffs took the present appeal where
they assigned the following errors: (1) in holding that plaintiffs-appellants have no legal capacity to sue
until their status as legal heirs of the deceased is determined in Special Proceeding No. SC-99; (2) in ruling
that there was no collusion or connivance among the defendants-appellees, despite the fact that the issue
in the motion to dismiss is purely legal, not factual; and (3) in denying the petition for a writ of preliminary
injunction.
At the outset, let it be remembered that the defendants-appellees, in availing themselves of the defense
that the plaintiffs-appellants had not been declared to be the heirs of the deceased Victoriana Eguaras,
have overlooked the fact that the (defendants-appellees) themselves in their petition for intestate
proceedings (Case SC-99) have alleged that Filemon Ramirez and Monica Ramirez, two of herein
plaintiffs-appellants, are the heirs of the deceased. Insofar as defendants-appellees are concerned, it is our
opinion that they are estopped from questioning the heirship of these two named persons to the estate of
the deceased.
There is no question that the rights to succession are automatically transmitted to the heirs from the
moment of the death of the decedent. 1 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. 2 In Pascual vs.
Pascual,3 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."
A similar situation obtains in the case at bar. The administrator is being charged to have been in collusion
and connivance with the mortgagees of a property of the deceased, allowing its foreclosure without
notifying the heirs, to the prejudice of the latter. Since the ground for the present action to annul the
aforesaid foreclosure proceedings is the fraud resulting from such insidious machinations and collusion in
which the administrator has allegedly participated, it would be farfetched to expect the said administrator
himself to file the action in behalf of the estate. And who else but the heirs, who have an interest to assert
and to protect, would bring the action? Inevitably, this case should fall under the exception, rather than
the general rule that pending proceedings for the settlement of the estate, the heirs have no right to
commence an action arising out of the rights belonging to the deceased.
On the second point raised, We fully agree with the plaintiffs-appellants that the lower court had gone too
far in practically adjudicating the case on the merits when it made the observation that "there could not
have been any connivance and/or collusion between plaintiffs in this case and Artemio Diawan as
administrator." A thorough scrutiny of the allegations in the motions to dismiss filed by defendantsappellees does not indicate that that question was ever put at issue therein. On the other hand, the
controversy on the existence or inexistence of collusion between the parties as a result of which
judgment was rendered against the estate is the very core of the complaint that was dismissed.
Undoubtedly, the cause of action is based on Section 30, Rule 132 of the Rules of Court.
We are not, however, in accord with the third assigned error the denial of the motion for the issuance of
preliminary injunction for it puts at issue the factual finding made by the lower court that the
defendants had already been placed in possession of the property. At this stage of the proceeding, and
considering the nature of the case before Us, such a question is, at this time, beyond the competence of the
Court.
PREMISES CONSIDERED, the order appealed from is hereby set aside insofar as it dismissed the
complaint in Civil Case No. SC-319, and the records be remanded to the lower court for further
proceedings. Costs against defendants-appellees. The Clerk of Court is directed to furnish a copy of this
decision to the Department of Justice for its information.
1wph1.t

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