UNION

BANK
OF
THE
PHILIPPINES,
petitioner,
vs.
EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules
of Court which seeks the reversal of the Decision 1 of the Court of Appeals dated
May 30, 2001 in CA-G.R. CV No. 48831 affirming the dismissal 2 of the petitioners
complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati
City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M.
Santibaez entered into a loan agreement 3 in the amount of P128,000.00. The
amount was intended for the payment of the purchase price of one (1) unit Ford
6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son,
Edmund, executed a promissory note in favor of the FCCC, the principal sum
payable in five equal annual amortizations of P43,745.96 due on May 31, 1981
and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of P123,156.00. It was intended to pay the
balance of the purchase price of another unit of Ford 6600 Agricultural All-Purpose
Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR
60K. Again, Efraim and his son, Edmund, executed a promissory note for the said
amount in favor of the FCCC. Aside from such promissory note, they also signed a
Continuing Guaranty Agreement5 for the loan dated December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic will. 6
Subsequently in March 1981, testate proceedings commenced before the RTC of
Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On April 9, 1981,
Edmund, as one of the heirs, was appointed as the special administrator of the
estate of the decedent.7 During the pendency of the testate proceedings, the
surviving heirs, Edmund and his sister Florence Santibaez Ariola, executed a
Joint Agreement8 dated July 22, 1981, wherein they agreed to divide between
themselves and take possession of the three (3) tractors; that is, two (2) tractors
for Edmund and one (1) tractor for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the tractor respectively

taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 9 was
executed by and between FCCC and Union Savings and Mortgage Bank, wherein
the FCCC as the assignor, among others, assigned all its assets and liabilities to
Union Savings and Mortgage Bank.
Demand letters10 for the settlement of his account were sent by petitioner Union
Bank of the Philippines (UBP) to Edmund, but the latter failed to heed the same
and refused to pay. Thus, on February 5, 1988, the petitioner filed a Complaint 11
for sum of money against the heirs of Efraim Santibaez, Edmund and Florence,
before the RTC of Makati City, Branch 150, docketed as Civil Case No. 18909.
Summonses were issued against both, but the one intended for Edmund was not
served since he was in the United States and there was no information on his
address or the date of his return to the Philippines. 12 Accordingly, the complaint
was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer 13 and
alleged that the loan documents did not bind her since she was not a party
thereto. Considering that the joint agreement signed by her and her brother
Edmund was not approved by the probate court, it was null and void; hence, she
was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati
City, Branch 63.14 Consequently, trial on the merits ensued and a decision was
subsequently rendered by the court dismissing the complaint for lack of merit. The
decretal portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack
of merit.15
The trial court found that the claim of the petitioner should have been filed with the
probate court before which the testate estate of the late Efraim Santibaez was
pending, as the sum of money being claimed was an obligation incurred by the
said decedent. The trial court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a
partition of the estate of the decedent. However, the said agreement was void,
considering that it had not been approved by the probate court, and that there can
be no valid partition until after the will has been probated. The trial court further
declared that petitioner failed to prove that it was the now defunct Union Savings
and Mortgage Bank to which the FCCC had assigned its assets and liabilities. The
court also agreed to the contention of respondent Florence S. Ariola that the list of

assets and liabilities of the FCCC assigned to Union Savings and Mortgage Bank
did not clearly refer to the decedents account. Ruling that the joint agreement
executed by the heirs was null and void, the trial court held that the petitioners
cause of action against respondent Florence S. Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the Court
of Appeals (CA), assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT
(EXHIBIT A) SHOULD BE APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN
PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD
WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE
PROCEEDING.16
The petitioner asserted before the CA that the obligation of the deceased had
passed to his legitimate children and heirs, in this case, Edmund and Florence;
the unconditional signing of the joint agreement marked as Exhibit "A" estopped
respondent Florence S. Ariola, and that she cannot deny her liability under the
said document; as the agreement had been signed by both heirs in their personal
capacity, it was no longer necessary to present the same before the probate court
for approval; the property partitioned in the agreement was not one of those
enumerated in the holographic will made by the deceased; and the active
participation of the heirs, particularly respondent Florence S. Ariola, in the present
ordinary civil action was tantamount to a waiver to re-litigate the claim in the estate
proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money claim
of the petitioner should have been presented before the probate court. 17
The appellate court found that the appeal was not meritorious and held that the
petitioner should have filed its claim with the probate court as provided under
Sections 1 and 5, Rule 86 of the Rules of Court. It further held that the partition
made in the agreement was null and void, since no valid partition may be had until
after the will has been probated. According to the CA, page 2, paragraph (e) of the
holographic will covered the subject properties (tractors) in generic terms when the
deceased referred to them as "all other properties." Moreover, the active
participation of respondent Florence S. Ariola in the case did not amount to a

waiver. Thus, the CA affirmed the RTC decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial
Court of Makati City, Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT
AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO
VALID PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ
UNTIL AFTER THE WILL HAS BEEN PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT
HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE
ESTATE PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE
WITH THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE
STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN
FAVOR OF PETITIONER-APPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00
AND DECEMBER 13, 1980 IN THE AMOUNT OF P123,000.00 CATEGORICALLY
ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND THEMSELVES
JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM
SANTIBAEZ IN FAVOR OF PETITIONER UNION BANK.19
The petitioner claims that the obligations of the deceased were transmitted to the
heirs as provided in Article 774 of the Civil Code; there was thus no need for the

probate court to approve the joint agreement where the heirs partitioned the
tractors owned by the deceased and assumed the obligations related thereto.
Since respondent Florence S. Ariola signed the joint agreement without any
condition, she is now estopped from asserting any position contrary thereto. The
petitioner also points out that the holographic will of the deceased did not include
nor mention any of the tractors subject of the complaint, and, as such was beyond
the ambit of the said will. The active participation and resistance of respondent
Florence S. Ariola in the ordinary civil action against the petitioners claim amounts
to a waiver of the right to have the claim presented in the probate proceedings,
and to allow any one of the heirs who executed the joint agreement to escape
liability to pay the value of the tractors under consideration would be equivalent to
allowing the said heirs to enrich themselves to the damage and prejudice of the
petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate
courts failed to consider the fact that respondent Florence S. Ariola and her
brother Edmund executed loan documents, all establishing the vinculum jurisor
the legal bond between the late Efraim Santibaez and his heirs to be in the
nature of a solidary obligation. Furthermore, the Promissory Notes dated May 31,
1980 and December 13, 1980 executed by the late Efraim Santibaez, together
with his heirs, Edmund and respondent Florence, made the obligation solidary as
far as the said heirs are concerned. The petitioner also proffers that, considering
the express provisions of the continuing guaranty agreement and the promissory
notes executed by the named respondents, the latter must be held liable jointly
and severally liable thereon. Thus, there was no need for the petitioner to file its
money claim before the probate court. Finally, the petitioner stresses that both
surviving heirs are being sued in their respective personal capacities, not as heirs
of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the
petitioner is trying to recover a sum of money from the deceased Efraim
Santibaez; thus the claim should have been filed with the probate court. She
points out that at the time of the execution of the joint agreement there was
already an existing probate proceedings of which the petitioner knew about.
However, to avoid a claim in the probate court which might delay payment of the
obligation, the petitioner opted to require them to execute the said
agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring that
the agreement was null and void. She asserts that even if the agreement was
voluntarily executed by her and her brother Edmund, it should still have been

subjected to the approval of the court as it may prejudice the estate, the heirs or
third parties. Furthermore, she had not waived any rights, as she even stated in
her answer in the court a quo that the claim should be filed with the probate court.
Thus, the petitioner could not invoke or claim that she is in estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any
continuing guaranty agreement, nor was there any document presented as
evidence to show that she had caused herself to be bound by the obligation of her
late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the partition
in the Agreement executed by the heirs is valid; b) whether or not the heirs
assumption of the indebtedness of the deceased is valid; and c) whether the
petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.nt
At the outset, well-settled is the rule that a probate court has the jurisdiction to
determine all the properties of the deceased, to determine whether they should or
should not be included in the inventory or list of properties to be administered. 20
The said court is primarily concerned with the administration, liquidation and
distribution of the estate.21
In our jurisdiction, the rule is that there can be no valid partition among the heirs
until after the will has been probated:
In testate succession, there can be no valid partition among the heirs until after
the will has been probated. The law enjoins the probate of a will and the public
requires it, because unless a will is probated and notice thereof given to the whole
world, the right of a person to dispose of his property by will may be rendered
nugatory. The authentication of a will decides no other question than such as
touch upon the capacity of the testator and the compliance with those
requirements or solemnities which the law prescribes for the validity of a will. 22
This, of course, presupposes that the properties to be partitioned are the same
properties embraced in the will. 23 In the present case, the deceased, Efraim
Santibaez, left a holographic will 24 which contained, inter alia, the provision which
reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later
after my demise, shall be distributed in the proportion indicated in the immediately
preceding paragraph in favor of Edmund and Florence, my children.

We agree with the appellate court that the above-quoted is an all-encompassing

provision embracing all the properties left by the decedent which might have
escaped his mind at that time he was making his will, and other properties he may
acquire thereafter. Included therein are the three (3) subject tractors. This being
so, any partition involving the said tractors among the heirs is not valid. The joint
agreement25 executed by Edmund and Florence, partitioning the tractors among
themselves, is invalid, specially so since at the time of its execution, there was
already a pending proceeding for the probate of their late fathers holographic will
covering the said tractors.
It must be stressed that the probate proceeding had already acquired jurisdiction
over all the properties of the deceased, including the three (3) tractors. To dispose
of them in any way without the probate courts approval is tantamount to divesting
it with jurisdiction which the Court cannot allow.26 Every act intended to put an end
to indivision among co-heirs and legatees or devisees is deemed to be a partition,
although it should purport to be a sale, an exchange, a compromise, or any other
transaction.27 Thus, in executing any joint agreement which appears to be in the
nature of an extra-judicial partition, as in the case at bar, court approval is
imperative, and the heirs cannot just divest the court of its jurisdiction over that
part of the estate. Moreover, it is within the jurisdiction of the probate court to
determine the identity of the heirs of the decedent. 28 In the instant case, there is no
showing that the signatories in the joint agreement were the only heirs of the
decedent. When it was executed, the probate of the will was still pending before
the court and the latter had yet to determine who the heirs of the decedent were.
Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto
themselves the three (3) tractors was a premature act, and prejudicial to the other
possible heirs and creditors who may have a valid claim against the estate of the
deceased.
The question that now comes to fore is whether the heirs assumption of the
indebtedness of the decedent is binding. We rule in the negative. Perusing the
joint agreement, it provides that the heirs as parties thereto "have agreed to divide
between themselves and take possession and use the above-described chattel
and each of them to assume the indebtedness corresponding to the chattel taken
as herein after stated which is in favor of First Countryside Credit Corp."29 The
assumption of liability was conditioned upon the happening of an event, that is,
that each heir shall take possession and use of their respective share under the
agreement. It was made dependent on the validity of the partition, and that they
were to assume the indebtedness corresponding to the chattel that they were
each to receive. The partition being invalid as earlier discussed, the heirs in effect
did not receive any such tractor. It follows then that the assumption of liability

cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent.l^vvphi1.net The
petitioner, purportedly a creditor of the late Efraim Santibaez, should have thus
filed its money claim with the probate court in accordance with Section 5, Rule 86
of the Revised Rules of Court, which provides:
Section 5. Claims which must be filed under the notice. If not filed barred;
exceptions. All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims for
funeral expenses for the last sickness of the decedent, and judgment for money
against the decedent, must be filed within the time limited in the notice; otherwise
they are barred forever, except that they may be set forth as counterclaims in any
action that the executor or administrator may bring against the claimants. Where
an executor or administrator commences an action, or prosecutes an action
already commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting them
independently to the court as herein provided, and mutual claims may be set off
against each other in such action; and if final judgment is rendered in favor of the
defendant, the amount so determined shall be considered the true balance against
the estate, as though the claim had been presented directly before the court in the
administration proceedings. Claims not yet due, or contingent, may be approved
at their present value.
The filing of a money claim against the decedents estate in the probate court is
mandatory.30 As we held in the vintage case of Py Eng Chong v. Herrera:31
This requirement is for the purpose of protecting the estate of the deceased by
informing the executor or administrator of the claims against it, thus enabling him
to examine each claim and to determine whether it is a proper one which should
be allowed. The plain and obvious design of the rule is the speedy settlement of
the affairs of the deceased and the early delivery of the property to the
distributees, legatees, or heirs. `The law strictly requires the prompt presentation
and disposition of the claims against the decedent's estate in order to settle the
affairs of the estate as soon as possible, pay off its debts and distribute the
residue.32
Perusing the records of the case, nothing therein could hold private respondent
Florence S. Ariola accountable for any liability incurred by her late father. The
documentary evidence presented, particularly the promissory notes and the
continuing guaranty agreement, were executed and signed only by the late Efraim
Santibaez and his son Edmund. As the petitioner failed to file its money claim

with the probate court, at most, it may only go after Edmund as co-maker of the
decedent under the said promissory notes and continuing guaranty, of course,
subject to any defenses Edmund may have as against the petitioner. As the court
had not acquired jurisdiction over the person of Edmund, we find it unnecessary to
delve into the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently
shown that it is the successor-in-interest of the Union Savings and Mortgage Bank
to which the FCCC assigned its assets and liabilities. 33 The petitioner in its
complaint alleged that "by virtue of the Deed of Assignment dated August 20,
1981 executed by and between First Countryside Credit Corporation and Union
Bank of the Philippines"34 However, the documentary evidence35 clearly reflects
that the parties in the deed of assignment with assumption of liabilities were the
FCCC, and the Union Savings and Mortgage Bank, with the conformity of Bancom
Philippine Holdings, Inc. Nowhere can the petitioners participation therein as a
party be found. Furthermore, no documentary or testimonial evidence was
presented during trial to show that Union Savings and Mortgage Bank is now, in
fact, petitioner Union Bank of the Philippines. As the trial court declared in its
decision:
[T]he court also finds merit to the contention of defendant that plaintiff failed to
prove or did not present evidence to prove that Union Savings and Mortgage Bank
is now the Union Bank of the Philippines. Judicial notice does not apply here. "The
power to take judicial notice is to [be] exercised by the courts with caution; care
must be taken that the requisite notoriety exists; and every reasonable doubt upon
the subject should be promptly resolved in the negative." (Republic vs. Court of
Appeals, 107 SCRA 504).36
This being the case, the petitioners personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the trial court did not
err in dismissing the complaint, and the CA in affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Court of Appeals Decision is AFFIRMED. No costs.
SO ORDERED.

Estate of K.H Hemady

Luzon Surety filed a claim against the estate of K.H. Hemady based on

indemnity agreements (counterbonds) subscribed by distinct principals

and by the deceased K.H. Hemady as surety (solidary guarantor). As a
contingent claim, Luzon Surety prayed for the allowance of the value of
the indemnity agreements it had executed. The lower court dismissed
the claim of Luzon Surety on the ground that whatever losses may
occur after Hemadys death, are not chargeable to his estate, because
upon his death he ceased to be a guarantor.
ISSUES: What obligations are transmissible upon the death of the
decedent? Are contingent claims chargeable against the estate?
HELD: Under the present Civil Code (Article 1311), the rule is that
Contracts take effect only as between the parties, their assigns and
heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by
provision of law. 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 expressly so
provide, thereby confirming Article 1311.
In Mojica v. Fernandez, the Supreme Court ruled 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 can not
be regarded as third parties with respect to a contract to which the
deceased was a party, touching the estate of the deceased x x x which
comes in to their hands by right of inheritance; they take such property
subject to all the obligations resting thereon in the hands of him from
whom they derive their rights. 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,
parental authority, usufruct, contracts for a piece of work, partnership
and agency. By contrast, the articles of the Civil Code that regulate
guaranty or suretyship contain no provision that the guaranty is
extinguished upon the death of the guarantor or the surety.
The contracts of suretyship in favor of Luzon Surety Co. not being
rendered intransmissible due to the nature of the undertaking, nor by
stipulations of the contracts themselves, nor by provision of law, his
eventual liability therefrom necessarily passed upon his death to his

heirs. The contracts, therefore, give rise to contingent claims provable

against his estate. A contingent liability of a deceased person is part
and parcel of the mass of obligations that must be paid if and when the
contingent liability is converted into a real liability. Therefore, the
settlement or final liquidation of the estate must be deferred until such
time as the bonded indebtedness is paid.
alvarez vs intermediate appellate court
Two parcels of land were registered in the names of Ancieto Yanes, father of
herein respondents alright? Were talking about an Original Certificate of Title
alright (OCT)? Now for some reason a certain Fortunato Santiago was issued a
Transfer Certificate of Tittle (TCT), meaning there was a transfer of ownership, in
what mode? most probably a sale. Santiago then sold the lots to Monico
Fuentebella. Then the lots were sold thereafter to Rosendo Alvarez. So three
TCTs in one sitting everyone seemed to be itching to quickly dispose it, the first
transfer of ownership must be a falsificated sale. So person A is the original
owner, person B got a hold of the title to his property, sold it to person C, who in
turn sold it to person D. Oh but wait there's more. There's a person E. And he's
coming, wait for it.
So the Yaneses filed a complaint against the three. Santiago, Fuentebella and
Alvarez and wait.. there's one more, the 4th person imputed in his filed case, only
its not a person perse, its a juridical person. The Register of Deeds of Negros
Occidental, which must have been the source of all the falsification. Yanes
petitioned the return and owndership of the lots and prayed for an accounting of
the produce of the land from 1944 up to the filing of the complaint with damages.
Enter person E. Take note. Now during the pendency of the case, Alvarez offered
the lots to Dr. Rodolfo Siason. Now Dr. Siason unsuspecting and unaware of the
previous dubitable contracts and the pending case bought the lots.
Comes out the decision, The CFI (Court of First Instance) (This is an old case
that's how they call their RTC then.)ordered Alvarez to reconvey and deliver the
possession of the lots to Yanes. Here comes the controversy. The court order
proved to be inexecutable with respect to the one lot since it had been subdivided
into two, and they were in the name of the doctor who purchased them in good
faith from Alvarez, and that the lot could not be delivered back to the plaintiff since
Dr. Siason was not a party in the writ of execution.
So the Yaneses filed a petition for the issuance of a new certificate of title and for
the declaration of nullity of the TCTs issued to Alvarez. But the lower court found
Siason as a buyer in good faith. Tsk tsk.. it could have stopped in Alvarez you

know, the reconveyance would not have seemed to be a problem you know, but
the court saw a 3rd party liability in here in the person of Siason, and the court just
had to protect that, gets?
Meanwhile in the middle of all these Rosendo Alvarez died. He probably couldn't
take it anymore. Hahaha.. don't quote me on that. And so the court ordered the
heirs of Alvarez to pay the Yaneses the actual value of the lots, plus damages.
The IAC, meaning Intermediate Appellate Court (Their CA during their time)
affirmed the CFI decision except with regard to the damages. Heirs of Alvarez
contends the liability arising from the sale of the lots made by their father to Dr.
Siason should be the sole liability of the late Rosendo Alvarez or of his estate after
his death.
ISSUE:
WON the Heirs of Alvarez' contention that the liability arising from the sale of the
lots made to Dr. Siason should be the sole liability of the late Rosendo Alvarez or
of his estate after his death.
RULING:
NO. - Under our law, the general rule is that a party's contractual rights and
obligations are transmissible to the successors. The pertinent provisions of the
Civil Code state:
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.
Art. 1311
Contracts take effect only between the parties, their assigns and heirs except in
case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law. The heir is
not liable beyond the value of the property received from the decedent.
In the Estate of Hemady vs. Luzon Surety Case, the court ruled that:

The binding effect of contracts upon the heirs of the deceased party is not altered
by the provision of 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 made from the state is
ultimately a payment by the heirs, since the amount of the paid claim in fact
diminishes or reduces the shares that the heirs would have been entitled to
receive.
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the
legal consequences of their father's transaction, which gave rise to the present
claim for damages.
That petitioners did not inherit the property involved is of no moment because by
legal fiction, the monetary equivalent thereof devolved into the mass of their
father's hereditary estate, and hereditary assets are always liable in their totality
for the payment of the debts of the estate.
It must, however, be made clear that petitioners are liable only to the extent of the
value of their inheritance.
Heirs of Alvarez loses this case.
USON v. DEL ROSARIO
GR No.L-4963, January 29, 1953
92 PHIL 530
FACTS: Faustino Nebreda died in 1945 leaving as an only heir his
estranged wife Maria Uson, the petitioner. The latter sued to recover the
ownership and possession of five parcels of land occupied by defendant
Maria del Rosario, decedent's common-law-spouse and her children. As
a defense, defendant presented a deed of separation agreed upon and
signed Faustino and Uson containing among others an statement giving
a parcel of land to Uson as an alimony and the latter renouncing her
rights to any inheritance from Faustino.
The defendant also contends that while it is true that the four minor
defendants are illegitimate children of the decedent and under the old
Civil Code are not entitled to any successional rights, however, under
the new Civil Code 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).
ISSUE: Are the contentions of the defendants correct?
HELD: No. It is evident that when the decedent 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 Uson had relinquished her right over
the lands in question in view of her expressed renunciation to inherit
any future property that her husband may acquire and leave upon his
death in the deed of separation they had entered into cannot be
entertained for the simple reason that future inheritance cannot be the
subject of a contract nor can it be renounced.
Nor does the contention that the provisions of the New Civil Code shall
apply and be given retroactive effect. 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... 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.
TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administratorappellee; 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.
L-28040
Pelaez, Jalandoni & Jamir for administrator-appellee.
Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
L-28568
Sevilla & Aquino for special administratrix-appellee.
Pelaez, Jalandoni & Jamir for oppositor-appellant.
L-28611
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant.

REYES, J.B.L., J.:p

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".
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 coadministrator. 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 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. R7866; 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 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:
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 above-mentioned 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, 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. L-28568), 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 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 13-15) (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.
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. L-28040 is hereby affirmed; while those involved in Cases
Nos. L-28568 and L-28611 are reversed and set aside. Costs against the
appellant Tasiana Ongsingco Vda. de Borja in all three (3) cases.
Solano vs. CA, Bienvenido/Emeteria Garcia
GR L 41971 November 29, 1983
FACTS:
Bienvenido and Emeteria filed an action for recognition against Melita Solano
Meliton died during the pendency of the petition and his daughter substituted him

while asking for the probate of the will of the decedent. RTC specified the legal
issues as 1) the recognition of Garcias, 2) correct status of Zonia, 3) the hereditary
share of each of them in view of the probated will. In deciding, RTC declared
Garcias as illegitimate children of late Meliton.; the institution of Sonia as sole heir
declared null and void, the 3 children shall share equally the estate CA affirmed.
ISSUE:
Whether or not total intestacy resulted from the declaration that the institution of
sole heir from decedents will.
RULING:
That being compulsory heirs, the Garcias were preterited from Melitons will, and
as a result, Sonias institution as sole heir is null and void pursuant to Art. 854
The preterition or omission of one, some or all of the compulsory heirs in
the direct line, whether living at the time of the execution of the will or
born after the death of the testator, shall annul the institution of heir, but
the devises and legacies shall be valid
The intention of the decedent is to favor Sonia with certain portions of his property
which the testator had the right to such so that it should be upheld as to the onehalf portion of the property that the testator could freely dispose of Sonias share is
hereby declared to be 4/6 of the estate and Garcias 1/6 each. The usufruct in
favor of will should not be invalidated all together.

NenitaSurozavsHonrado
In 1973, Marcelina Suroza supposedly executed a notarial will
bequeathing her house and lot to a certain Marilyn Suroza. In 1974,
Marcelina died. Marina Paje was named as the executrix in the said will
and she petitioned before CFI Rizal that the will be admitted to probate.
The presiding judge, Honrado admitted the will to probate and assigned
Paje as the administratrix. Honrado also issued an ejectment order
against the occupants of the house and lot subject of the will.
Nenita Suroza, daughter in law of Marcelina (her husband, son of
Marcelina was confined in the Veterans Hospital), learned of the
probate proceeding when she received the ejectment order (as she was
residing in said house and lot).
Nenita opposed the probate proceeding. She alleged that the said

notarial will is void because (a) the instituted heir therein Marilyn Suroza
is actually Marilyn Sy and she is a stranger to Marcelina, (b) the only son
of Marcelina, Agapito Suroza, is still alive and is the compulsory heir, (c)
the notarial will is written in English a language not known to Marcelina
because the latter was illiterate so much so that she merely
thumbmarked the will, (d) the notary public who notarized will admitted
that Marcelina never appeared before him and that he notarized the
said will merely to accommodate the request of a lawyer friend but with
the understanding that Marcelina should later appear before him but
that never happened.
Honrado still continued with the probate despite the opposition until
testamentary proceeding closed and the property transferred to Marilyn
Sy.
Nenita then filed this administrative case against Honrado on the
ground of misconduct.
ISSUE: Whether or not Honrado is guilty of misconduct for admitting
into probate a void will.
HELD: Yes. Despite the valid claim raised by Nenita, he still continued
with the testamentary proceeding, this showed his wrongful intent. He
may even be criminally liable for knowingly rendering an unjust
judgment or interlocutory order or rendering a manifestly unjust
judgment or interlocutory order by reason of inexcusable negligence or
ignorance.
The will is written in English and was thumb marked by an obviously
illiterate Marcelina. This could have readily been perceived by Honrado
that that the will is void. In the opening paragraph of the will, it was
stated that English was a language understood and known to the
testatrix. But in its concluding paragraph, it was stated that the will was
read to the testatrix and translated into Filipino language. That could
only mean that the will was written in a language not known to the
illiterate testatrix and, therefore, it is void because of the mandatory
provision of Article 804 of the Civil Code that every will must be
executed in a language or dialect known to the testator. Had Honrado
been careful and observant, he could have noted not only the anomaly
as to the language of the will but also that there was something wrong
in instituting to Marilyn Sy as sole heiress and giving nothing at all to
Agapito who was still alive.
Honrado was fined by the Supreme Court.

Vitug v. Court of Appeals

Facts:
1. The case is a chapter in an earlier suit involving the issue on two (2) wills of the late
Dolores Vitug who died in New York, USA in Nov 1980. She named therein private
respondent Rowena Corona (Executrix) while Nenita Alonte was co-special administrator
together with petitioner Romarico pending probate.
2. In January 1985, Romarico filed a motion asking for authorization of the probate court
to sell shares of stocks and real property of the estate as reimbursements for advances he
made to the estate. The said amount was spent for payment of estate tax from a savings
account in the Bank of America.
3. Rowena Corona opposed the motion to sell contending that from the said account are
conjugal funds, hence part of the estate. Vitug insisted saying that the said funds are his
exclusive property acquired by virtue of a survivorship agreement executed with his late
wife and the bank previously. In the said agreement, they agreed that in the event of death
of either, the funds will become the sole property of the survivor.
4. The lower court upheld the validity of the survivorship agreement and granted
Romarico's motion to sell. The Court of Appeals however held that said agreement
constituted a conveyance mortis causa which did not comply with the formalities of a valid
will. Further, assuming that it is donation inter vivos, it is a prohibited donation. Vitug
petitioned to the Court contending that the said agreement is an aleatory contract.
Issue: Whether or not the conveyance is one of mortis causa hence should conform to
the form required of wills
NO. The survivorship agreement is a contract which imposed a mere obligation with a
term--being death. Such contracts are permitted under Article 2012 on aleatory contracts.
When Dolores predeceased her husbandm the latter acquired upon her death a vested right
over the funds in the account. The conveyance is therefore not mortis causa.
Garcia v. Lacuesta
G.R. L-4067 November 29, 1951
Ponente: Paras, C.J.
Facts:
1. The CA disallowed the probate of the will of Antero Mercado dated Jan 1943. The said
will was written in Ilocano dialect.
2. The will appears to have been signed by Atty. Florentino Javier who wrote the name of

the testator followed below by 'A ruego del testador' and the name of Florentino Javier. In
effect, it was signed by another although under the express direction of the testator. This
fact however was not recited in the attestation clause. Mercado also affixed a cross on the
will.
3. The lower court admitted the will to probate but this order was reversed by the Court of
Appeals on the ground that the attestation failed to recite the facts surrounding the signing
of the testator and the witnesses.
Issue: Whether or not the attestation clause in the will is valid
HELD: NO the attestation is fatally defective for its failure to state that Antero or the
testator caused Atty. Javier to write the former's name under his express direction as
required by Sec. 618 of the Civil Procedure. Finally, on the cross affixed on the will by the
testator, the Court held that it is not prepared to liken the mere sign of a cross to a
thumbmark for obvious reasons- the cross does not have the trustworthiness of a
thumbmark so it is not considered as a valid signature.
Azuelav.CourtofAppealsG.R.No.122880(2006)
FACTS:
1.
Petitioner Felix Azuela sought to admit to probate the notarial will of Eugenia
E. Igsolo. However, this was opposed by Geralda Castillo, who was the attorneyin-fact of the 12 legitimate heirs of the decedent. According to her, the will was
forged, and imbued with several fatal defects. Particularly, the issue relevant in
this subject is that the will was not properly acknowledged. The notary public,
Petronio Y. Bautista, only wrote Nilagdaan ko at ninotario ko ngayong 10 ng
Hunyo 10 (sic), 1981 dito sa Lungsod ng Maynila.
ISSUE: Whether or not the will is fatally defective as it was not properly
acknowledged before a notary public by the testator and the witnesses as required
by Article 806 of the Civil Code.
RULING: Yes, the will is fatally defective. By no manner of contemplation can
those words be construed as an acknowledgment.
An acknowledgement is the act of one who has executed a deed in going before
some competent officer or court and declaring it to be his act or deed. It involves
an extra step undertaken whereby the signore actually declares to the notary that
the executor of a document has attested to the notary that the same is his/her own
free act and deed.

It might be possible to construe the averment as a jurat, even though it does not
hew to the usual language thereof. A jurat is that part of an affidavit where the
notary certifies that before him/her, the document was subscribed and sworn to by
the executor.
Yet even if we consider what was affixed by the notary public as a jurat, the will
would nonetheless remain invalid, as the express requirement of Article 806 is that
the will be acknowledged, and not merely subscribed and sworn to. The will does
not present any textual proof, much less one under oath, that the decedent and
the instrumental witnesses executed or signed the will as their own free act or
deed. The acknowledgment made in a will provides for another all-important legal
safeguard against spurious wills or those made beyond the free consent of the
testator.