G.R. No.

L-29901 August 31, 1977

IGNACIO FRIAS CHUA, DOMINADOR CHUA and REMEDIOS CHUA, petitioners,

vs.
THE COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL, BRANCH V and SUSANA DE LA TORRE, in her capacity
as Administratrix of the Intestate Estate of Consolacion de la Torre, respondents.

Dominador G. Abaria and Primitivo Blanca for private respondent.

Rodrigo O. Delfinado for petitioners.

MARTIN, J.:

Petition for review of the decision of the respondent Court which dismissed the complaint of petitioners in Civil Case No. 7839-A,
entitled "Ignacio Frias Chua, et al. vs. Susana de la Torre, Administratrix of the Intestate Estate of Consolacion de la Torre"

It appears that in the first marriage of Jose Frias Chua with Patricia S. Militar alias Sy Quio he sired three children, namely:
Ignacio, Lorenzo and Manuel, all surnamed Frias Chua. When Patricia S. Militar died, Jose Frias Chua contracted a second
marriage with Consolacion de la Torre with whom he had a child by the name of Juanita Frias Chua. Manuel Frias Chua died
without leaving any issue. Then in 1929, Jose Frias Chua died intestate leaving his widow Consolacion de la Torre and his son
Juanito Frias Chua of the second marriage and sons Ignacio Frias Chua and Lorenzo Frias Chua of his first marriage. In
Intestate Proceeding No. 4816, the lower court issued an order dated January 15, 1931 1 adjudicating, among others, the one-
half (1/2,) portion of Lot No. 399 and the sum of P8,000.00 in favor of Jose Frias Chua's widow, Consolacion de la Torre,
the other half of Lot No. 399 in favor of Juanito Frias Chua, his son in the second marriage; P3,000.00 in favor of Lorenze
Frias chua; and P1,550.00 in favor of Ignacio Frias, Chua, his sons of the first marriage. By virtue of said adjudication,
Transfer Certificate of Title No. TR-980 (14483) 2 dated April 28, 1932 was issued by the Register of Deeds in the names
of Consolacion de la Torre and Juanito Frias Chua as owners pro-indiviso of Lot No. 399.

On February 27, 1952, Juanito Frias Chua of the second marriage died intestate without any issue. After his death, his mother
Consolacion de la Torre succeeded to his pro-indivisio share of Lot No. 399. In a week's time or on March 6, 1952, Consolacion
de la Torre executed a declaration of heirship adjudicating in her favor the pro-indiviso share of her son Juanito as a result of
which Transfer Certificate of Title No. 31796 covering the whole Lot No. 399 was issued in her name. Then on March 5, 1966,
Consolacion de la Torre died intestate leaving no direct heir either in the descending or ascending line except her brother and
sisters.

In the "Intestate Estate of Consolacion de la Torre", docketed as Sp. Proc. No. 7839-A, the petitioners herein, Ignacio Frias
Chua, of the first marriage and dominador and Remedios Chua, the supposed legitimate children of the deceased Lorenzo Frias
Chua, also of the first marriage filed the complaint a quo 3 (subseqently segregated as a distinct suit and docketed as Civil
Case No. 7839-A) on May 11, 1966 before the respondent Court of First Instance of Negros Occidental, Branch V,
praying that the one-half (1/2) portion of Lot No. 399 which formerly belonged to Juanito Frias but which passed to
Consolacion de la Torre upon the latter's death, be declaredas a reservable property for the reason that the lot in
questionn was subject to reserval troncal pursuant to Article 981 of the New Civil Code, Private respondent as
administratrix of the estate of individually the complaint of petitioners 4

On July 29, 1986, the respondent Court rendered a decision dismissing the complaint of petitioner. Hence this instant.

The pertinent provision of reserva troncal under the New Civil Code provides:

ART. 891. The ascendant who inheritts from his descendant any property which the latter may have acquired
by gratuitous title from another ascendat, or a brother or sister, is obliged to reserve such property as he may
have acquired by operation of law for the benefit of relatives who are within the third degree and belong to the
line from which said property came.

Persuant to the foregoing provision, in order that a property may be impressed with a reservable character the following
requisites must exist, to wit: (1) that the property was acquired by a descendant from an asscendant or from a brother or sister
by gratuitous title; (2) that said descendant died without an issue; (3) that the property is inherited by another ascendant by
operation of law; and (4) that there are relatives within the third degree belonging to the line from which said property came. 5 In
the case before Us, all of the foregoing requisites are present. Thus, as borne out by the records, Juanoito Frias Chua of
the second marriage died intestate in 1952; he died withour leaving any issue; his pro-indiviso of 1/2 share of Lot No. 399
was acquired by his mother, Consolacion de la Torre died, Juannnito Frias Chua who died intestate had relatives within
the third degree. These relatives are Ignacio Frias Chua and Dominador Chua and Remidios Chua, the suppose
legitimate children of the deceased Lorenzo Frias Chua, who are the petitioners herein.

The crux of the problem in instant petition is focused on the first requisit of reserva troncal — whether the property in question
was acquired by Juanito Frias Chua from his father Jose Frias Chua, gratuitously or not. In resolving this point, the respondent
Court said:

It appears from Exh. "3", which is part of Exh. "D", that the property in question was not acquired by
Consolacion de la Torre and Juanito Frias Chua gratuitously but for a consideration, namely, that the legatees
were to pay the interest and cost and other fees resulting from Civil Case No. 5300 of this Court. As such it is
undeniable that the lot in question is not subject tot a reserva troncal, under Art. 891 of the New Civil Code, and
as such the plaintiff's complaint must fail.

We are not prepared to sustain the respondent Court's conclusion that the lot in question is not subject to a reserva
troncal under Art. 891 of the New Civil Code. It is, As explained by Manresa which this Court quoted with approval in Cabardo v.
Villanueva, 44 Phil. 186, "The transmission is gratuitous or by gratuitous title when the recipient does not give anything in
return." It matters not whether the property transmitted be or be not subject to any prior charges; what is essential is that the
transmission be made gratuitously, or by an act of mere liberality of the person making it, without imposing any obligation on the
part of the recipient; and that the person receiving the property gives or does nothing in return; or, as ably put by an eminent
Filipino commentator, 6 "the essential thing is that the person who transmits it does so gratuitously, from pure generosity,
without requiring from the transferee any prestation." It is evident from the record that the transmission of the property in
question to Juanito Frias Chua of the second marriage upon the death of his father Jose Frias Chua was by means of a
hereditary succession and therefore gratuitous. It is true that there is the order (Exh. "D") of the probate Court in Intestate
Proceeding No. 4816 which estates in express terms;

2. — Se adjudicada pro el presente a favor de Consolacion de la Torre, viuda, mayor de edad, y de su hiju,
Juanito Frias Chua, menor de edad, todos residente de San Enrique, Negros Occidental, I.F.,como herederos
del finado Jose Frias Chua Choo, estas propiadades:

14483

La parcela de terrenno concida por Lote No. 399 del Catsatro de la Carlota, Negros Occidental, de 191.954
metros cuadddrados y cubierto por el Certificado de Titulo No. 11759, en partes equales pro-indiviso; por con
la obligscion de pagar a las Standard Oil Co. of New York la deuda de P3971.20, sus intereses, costas y
demas gastos resultantes del asunto civil No. 5300de este jusgado

But the obligation of paying the Standard Oil Co. of New York the amount of P3,971.20 is imposed upon Consolacion de la Torre
and Juanito Frias Chua not personally by the deceased Jose Frias Chua in his last will and testament but by an order of the
court in the Testate Proceeding No.4816 dated January 15, 1931. As long as the transmission of the property to the heirs is free
from any condition imposed by the deceased himself and the property is given out of pure generosity, itg is gratuitous. it does
not matter if later the court orders one of the heirs, in this case Juanito Frias Chua, to pay the Standare oil co. of New York the
amount of P3,971.20. This does not change the gratuitous nature of the transmission of the property to him. This being the case
the lot in question is subject to reserva troncal under Art, 891 of the New Civil Code.

It is contented that the distribution of the shares of the estate of Jose Frias Chua to the respondent heirs or legatees was agreed
upon by the heirs in their project of partition based on the last will and testament of Jose Frias Chua. But petitioners claim that
the supposed Last Will and Testament of Jose Frias Chua was never probated. The fact that the will was not probated was
admitted in paragraph 6 of the respondents' answer. 7 There is nothing mentioned in the decision of the trial court in Civil
Case No. 7839 A which is the subject of the present appeal nor in the order of January 15, 1931 of the trial court in the
Testate Estate Proceeding No. 4816 nor in the private respondent's brief, that the Last Will and Testament of Jose Frias
Chua has ever been probated. With the foregoing, it is easy to deduce that if the Last Will and Testament has in fact been
probated there would have been no need for the testamentary heirs to prepare a project of partition among themselves.
The very will itself could be made the basis for the adjudication of the estate as in fact they did in their project of partition
with Juanito Frias Chua getting one-half of Lot 399 by inheritance as a sone of the deceased Jose Frias Chua by the
latter's second marriage.

According to the record, Juanito Frias Chua died on February 27, 1952 without any issue. After his death his mother Consolation
de la Torre succeeded to his one-half pro-indiviso share of Lot 399. This was, however, subject to the condition that the property
was reservable in character under Art. 891 of the Civil Code in favor of relatives within the third degree of Jose Frias Chua from
whom the property came. These relatives are the petitioner herein.
It is claimed that the complaint of petitioners to recover the one-half portion of Lot 399 which originally belonged to Juanito Frias
Chua has already prescribed when it was filed on May 11, 1966. We do not believe so. It must be remembered that the
petitioners herein are claiming as reservees did not arise until the time the reservor, Consolacion de la Torre, died in March
1966. When the petitioners therefore filed their complaint to recover the one-half (1/2) portion of Lot 399, they were very much in
time to do so.

IN VIEW OF THE FOREGOING, the decision appealed from is hereby set aside. The petitioners Ignacio Frias Chua, Dominador
Chua and Remedios Chua are declared owners of 1/2 undivided portion of Lot 399; and the Register of Deeds of Negros
Occidental is hereby ordered to cancel. Transfer Certificate of Title No. 31796 covering Lot No. 399 issued in the name of
Consolacion de la Torre and to issue a new Certificate of Title in the names of Consolacion de la Torre, 1/2 undivided portion;
Ignacio Frias Chua, 1/4 undivided portion; and Dominador Chua and Remedios Chua, 1/4 undivided portion, of said lot. Without
pronouncement as to costs.

SO ORDERED.

G.R. No. L-34395 May 19, 1981

BEATRIZ L. GONZALES, petitioner,

vs.
COURT OF FIRST INSTANCE OF MANILA (BRANCH V), BENITO F. LEGARDA, ROSARIO L. VALDEZ, ALEJANDRO
LEGARDA, TERESA LEGARDA, JOSE LEGARDA, BENITO LEGARDA Y FERNANDEZ, CARMEN LEGARDA Y
FERNANDEZ, FILOMENA LEGARDA Y HERNANDEZ, CARMEN LEGARDA Y HERNANDEZ, ALEJANDRO LEGARDA Y
HERNANDEZ, RAMON LEGARDA Y HERNANDEZ, FILOMENA LEGARDA Y LOBREGAT, JAIME LEGARDA Y
LOBREGAT, CELSO LEGARDA Y LOBREGAT, ALEJANDRO LEGARDA Y LOBREGAT, MA. TERESA LEGARDA Y
LOBREGAT, MA. ANTONIA LEGARDA Y LOBREGAT, JOSE LEGARDA Y LOBREGAT, ROSARIO LEGARDA Y
LOBREGAT, BENITO LEGARDA Y LOBREGAT, EDUARDO LEGARDA Y LOBREGAT, TRINIDAD F. LEGARDA, and the
ESTATE OF DONA FILOMENA ROCES DE LEGARDA, respondents.

AQUINO, J.: 1äwphï1.ñ ët

Beatriz Legarda Gonzales appealed from the decision of the Court of First Instance of Manila, dismissing her complaint for
partition, accounting, reconveyance and damages and holding, as not subject to reserve troncal, the properties which her
mother Filomena Races inherited in 1943 from Filomena Legarda (Civil Case No. 73335). The facts are as follows:

Benito Legarda y De la Paz, the son of Benito Legarda y Tuason, died [Manila] on June 17, 1933. He was survived by his
widow, Filomena Races, and their seven children: four daughters named Beatriz, Rosario, Teresa and Filomena and three sons
named Benito, Alejandro and Jose.

On July 12, 1939, the real properties left by Benito Legarda y Tuason were partitioned in three equal portions by his daughters,
Consuelo and Rita, and the heirs of his deceased son Benito Legarda y De la Paz who were represented by Benito F. Legarda.

Filomena Legarda y Races died intestate and without issue on March 19, 1943. Her sole heiress was her mother, Filomena
Races Vda. de Legarda.

Mrs. Legarda executed on May 12, 1947 an affidavit adjudicating extrajudicially to herself the properties which she inherited
from her deceased daughter, Filomena Legarda. The said properties consist of the following: 1äw phï1.ñët

(a) Savings deposit in the National City Bank of New York with a credit balance of P3,699.63.

(b) 1,429 shares of the Benguet Consolidated Mining Company and a 1/7 interest in certain shares of the San
Miguel Brewery, Tuason & Legarda, Ltd., Philippine Guaranty Company, Insular Life Assurance Company and
the Manila Times.

(c) 1/7 of the properties described in TCT Nos. 80226, 80237 to 80243 (7 titles), 80260, 80261 and 57512 of
the Manila registry of deeds.

1/21st of the properties covered by TCT Nos. 48164, 84714, 48201, 48202, 48205, 48203, 48206, 48160 and
48192 of the Manila registry of deeds;
 1/21st of the property described in TCT No. 4475 of the registry of deeds of Rizal, now Quezon City; 1/14th of
the property described in TCT No. 966 of the registry of deeds of Baguio;

1/7th of the lot and improvements at 127 Aviles described in TCT No. 41862 of the Manila registry of deeds;
1/7th of the lots and improvements at 181 San Rafael describe in TCT Nos. 50495 and 48161 of the Manila
registry of deeds;

1/7th of the property described in TCT No. 48163 of the Manila registry of deeds (Streets);

l/21st of the properties described in TCT Nos. 48199 and 57551 of the Manila registry of deeds (Streets and
Estero):

2/21st of the property described in TCT No. 13458 of tile registry of deeds of T0ayabas.

These are the properties in litigation in this case. As a result of the affidavit of adjudication, Filomena Races succeeded her
deceased daughter Filomena Legarda as co-owner of the properties held proindiviso by her other six children.

Mrs. Legarda on March 6, 1953 executed two handwritten Identical documents wherein she disposed of the properties, which
she inherited from her daughter, in favor of the children of her sons, Benito, Alejandro and Jose (sixteen grandchildren in all).
The document reads: 1äw phï1.ñët

A mis hijos :

Dispongo que se reparta a todos mis nietos hijos de Ben, Mandu y Pepito, los bienes que he heredado de mi
difunta hija Filomena y tambien los acciones de la Destileria La Rosario' recientemente comprada a los
hermanos Values Legarda.

De los bienes de mi hija Filomena se deducira un tote de terreno que yo he 0donada a las Hijas de Jesus, en
Guipit

La case No. 181 San Rafael, la cede a mi hijo Mandu solo la casa; proque ella esta construida sobre terreno
de los hermanos Legarda Races. 1äwphï1.ñët

(Sgd.) FILOMENA ROCES LEGARDA

6 Marzo 1953

During the period from July, 1958 to February, 1959 Mrs. Legarda and her six surviving children partitioned the properties
consisting of the one-third share in the estate of Benito Legarda y Tuason which the children inherited in representation of their
father, Benito Legarda y De la Paz.

Mrs. Legarda died on September 22, 1967. Her will was admitted to probate as a holographic will in the order dated July 16,
1968 of the Court of First Instance of Manila in Special Proceeding No. 70878, Testate Estate of Filomena Races Vda. de
Legarda. The decree of probate was affirmed by the Court of Appeals in Legarda vs. Gonzales, CA-G.R. No. 43480-R, July
30,1976.

In the testate proceeding, Beatriz Legarda Gonzales, a daughter of the testatrix, filed on May 20, 1968 a motion to exclude from
the inventory of her mother's estate the properties which she inherited from her deceased daughter, Filomena, on the ground
that said properties are reservable properties which should be inherited by Filomena Legarda's three sisters and three brothers
and not by the children of Benito, Alejandro and Jose, all surnamed Legarda. That motion was opposed by the administrator,
Benito F. Legarda.

Without awaiting the resolution on that motion, Mrs. Gonzales filed on June 20, 1968 an ordinary civil action against her
brothers, sisters, nephews and nieces and her mother's estate for the purpose of securing a declaration that the said properties
are reservable properties which Mrs. Legarda could not bequeath in her holographic will to her grandchildren to the exclusion of
her three daughters and her three sons (See Paz vs. Madrigal, 100 Phil. 1085).

As already stated, the lower court dismissed the action of Mrs. Gonzales. ln this appeal under Republic Act No. 5440 she
contends in her six assignments of error that the lower court erred in not regarding the properties in question as reservable
properties under article 891 of the Civil Code.
On the other hand, defendants-appellees in their six counter-assignments of error contend that the lower court erred in not
holding that Mrs. Legarda acquired the estate of her daughter Filomena] Legarda in exchange for her conjugal and hereditary
shares in the estate of her husband Benito Legarda y De la Paz and in not holding that Mrs. Gonzales waived her right to the
reservable properties and that her claim is barred by estoppel, laches and prescription.

The preliminary issue raised by the private respondents as to the timeliness of Mrs. Gonzales' petition for review is a closed
matter. This Court in its resolution of December 16, 1971 denied respondents' motion to dismiss and gave due course to the
petition for review.

In an appeal under Republic Act No. 5440 only legal issues can be raised under undisputed facts. Since on the basis of the
stipulated facts the lower court resolved only the issue of whether the properties in question are subject to reserva troncal that is
the only legal issue to be resolved in this appeal.

The other issues raised by the defendants-appellees, particularly those involving factual matters, cannot be resolved in this
appeal. As the trial court did not pass upon those issues, there is no ruling which can be reviewed by this Court.

The question is whether the disputed properties are reservable properties under article 891 of the Civil Code, formerly article
811, and whether Filomena Races Vda. de Legarda could dispose of them in his will in favor of her grandchildren to the
exclusion of her six children.

Did Mrs. Legarda have the right to convey mortis causa what she inherited from her daughter Filomena to the reservees within
the third degree and to bypass the reservees in the second degree or should that inheritance automatically go to the reservees
in the second degree, the six children of Mrs. Legarda?

As will hereinafter be shown that is not a novel issue or a question of first impression. lt was resolved in Florentino vs.
Florentino, 40 Phil. 480. Before discussing the applicability to this case of the doctrine in the Florentino case and other pertinent
rulings, it may be useful to make a brief discourse on the nature of reserve troncal, also called lineal, familiar, extraordinaria o
semi-troncal.

Much time, effort and energy were spent by the parties in their five briefs in descanting on the nature of reserve troncal which
together with the reserva viudal and reversion legal, was abolished by the Code Commission to prevent the decedent's estate
from being entailed, to eliminate the uncertainty in ownership caused by the reservation (which uncertainty impedes the
improvement of the reservable property) and to discourage the confinement of property within a certain family for generations
which situation allegedly leads to economic oligarchy, and is incompatible with the socialization of ownership.

The Code Commission regarded the reservas as remnants of feudalism which fomented agrarian unrest. Moreover,
the reserves, insofar as they penalize legitimate relationship, is considered unjust and inequitable.

However, the lawmaking body, not agreeing entirely with the Code Commission, restored the reserve troncal, a legal institution
which, according to Manresa and Castan Tobenas has provoked questions and doubts that are difficult to resolve.

Reserva troncal is provided for in article 811 of the Spanish Civil Code, now article 891, which reads: 1äwphï1.ñët

ART. 811. El ascendiente que heredare de su descendiente bienes que este hubiese adquirido por titulo
lucrative de otro ascendiente, o de un hermano, se halla obligado a reservas los que hubiere adquirido por
ministerio de la ley en favor de los parientes que eaten dentro del tercer grade y pertenezcan a la linea de
donde los bienes proceden

ART. 891. The ascendant who inherits from his descendant any property which the latter may have acquired by
gratuitous title from another ascendant, or a brother or sister, is obliged to reserve such property as he may
have acquired by operation of law for the benefit of relatives who are within the third degree and who belong to
the line from which said property came.

In reserve troncal (1) a descendant inherited or acquired by gratuitous title property from an ascendant or from a brother or
sister; (2) the same property is inherited by another ascendant or is acquired by him by operation of law from the said
descendant, and (3) the said ascendant should reserve the said property for the benefit of relatives who are within the third
degree from the deceased descendant (prepositus) and who belong to the line from which the said property came.

So, three transmissions are involved: (I) a first transmission by lucrative title (inheritance or donation) from an ascendant or
brother or sister to the deceased descendant; (2) a posterior transmission, by operation of law (intestate succession or legitime)
from the deceased descendant (causante de la reserve) in favor of another ascendant, the reservor or reservista, which two
transmissions precede the reservation, and (3) a third transmissions of the same property (in consequence of the reservation)
from the reservor to the reservees (reservatarios) or the relatives within the third degree from the deceased descendant
belonging to the line of the first ascendant, brother or sister of the deceased descendant (6 Castan Tobenas Derecho Civil, Part
l, 1960, 6th Ed., pp. 198-9).

If there are only two transmissions there is no reserve. Thus, where one Bonifacia Lacerna died and her properties were
inherited by her son, Juan Marbebe, upon the death of Juan, those lands should be inherited by his half-sister, to the exclusion
of his maternal first cousins. The said lands are not reservable property within the meaning of article 811 (Lacerna vs. Vda. de
Corcino, l l l Phil. 872).

The persons involved in reserve troncal are (1) the ascendant or brother or sister from whom the property was received by the
descendant by lucrative or gratuitous title, (2) the descendant or prepositus (prepositus) who received the property, (3) the
reservor (reservista) the other ascendant who obtained the property from the (prepositus) by operation of law and (4) the
reserves (reservatario) who is within the third degree from the prepositus and who belongs to the (line o tronco) from which the
property came and for whom the property should be reserved by the reservor.

The reservees may be half-brothers and sisters (Rodriguez vs. Rodriguez, 101 Phil. 1098; Chua vs. Court of First Instance of
Negros Occidental, L-29901, August 31, 1977, 78 SCRA 412). Fourth degree relatives are not included (Jardin vs. Villamayor,
72 Phil. 392).

The rationale of reserve troncal is to avoid "el peligro de que bienes poseidos secularmente por una familia pasen bruscamente
a titulo gratuito a manos extrañas por el azar de los enlaces y muertes prematuras or impeder que, por un azar de la vide
personas extranas a una familia puedan adquirir bienes que sin aquel hubieran quedado en ella (6 Castan Tobenas Derecho
Civil, Part l, 6th Ed., 1980, p. 203; Padura vs. Baldovino, 104 Phil. 1065).

An illustration of reserve troncal is found in Edroso vs. Sablan, 25 Phil. 295. ln that case, Pedro Sablan inherited two parcels of
land from his father Victorians. Pedro died in 1902, single and without issue. His mother, Marcelina Edroso, inherited from him
the two parcels of land.

It was held that the land was reservable property in the hands of Marcelina. The reservees were Pablo Sablan and Basilio
Sablan, the paternal uncles of Pedro Sablan, the prepositus. Marcelina could register the land under the Torrens system in her
name but the fact that the land was reservable property in favor of her two brothers-in-law, should they survive her, should be
noted in the title.

In another case, it appears that Maria Aglibot died intestate in 1906. Her one-half share of a parcel of conjugal land was
inherited by her daughter, Juliana Mañalac. When Juliana died intestate in 1920, said one-half share was inherited by her father,
Anacleto Mañalac who owned the other one-half portion.

Anacleto died intestate in 1942, survived by his second wife and their six children. lt was held that the said one-half portion was
reservable property in the hands of Anacleto Mañalac and, upon his death, should be inherited by Leona Aglibot and Evarista
Aglibot, sisters of Maria and materna aunts of Juliana Mañalac, who belonged to the line from which said one-half portion came
(Aglibot vs. Mañalac 114 Phil. 964).

Other illustrations of reserva troncal are found in Florentino vs Florentino, 40 Phil. 480; Nieva and Alcala vs. Alcala and
Deocampo, 41 Phil. 915; Maghirang and Gutierrez vs. Balcita 46 Phil. 551; Lunsod vs. Ortega, 46 Phil. 664; Dizon vs. Galang,
48 Phil. 601; Riosa vs. Rocha, 48 Phil. 737; Centeno vs. Centeno 52 Phil. 322; Velayo Bernardo vs. Siojo, 58 Phil. 89; Director
of Lands vs. Aguas, 63 Phil. 279; Fallorfina vs. Abille, CA 39 O.G. 1784.

The person from whom the degree should be reckoned is the descendant, or the one at the end of the line from which the
property came and upon whom the property last revolved by descent. He is called the prepositus(Cabardo vs. Villanueva. 44
Phil. 186, 190).

In the Cabardo case, one Cornelia Abordo inherited property from her mother, Basilia Cabardo. When Cornelia died, her estate
passed to her father, Lorenzo Abordo. ln his hands, the property was reservable property. Upon the death of Lorenzo, the
person entitled to the property was Rosa Cabardo, a maternal aunt of Cornelia, who was her nearest relative within the third
degree.

First cousins of the prepositus are in the fourth degree and are not reservees. They cannot even represent their parents
because representation is confined to relatives within the third degree (Florentino vs. Florentino, 40 Phil. 480).

Within the third degree, the nearest relatives exclude the more remote subject to the rule of representation. But the
representative should be within the third degree from the prepositus (Padura vs. Baldovino, 104 Phil. 1065).
Reserva troncal contemplates legitimate relationship. illegitimate relationship and relationship by affinity are excluded.

Gratuitous title or titulo lucrativo refers to a transmission wherein the recipient gives nothing in return such as donacion and
succession (Cabardo vs. Villanueva, 44 Phil. 186, 189-190, citing 6 Manresa, Codigo Civil, 7th Ed., 195 l, p. 360).

The reserva creates two resolutory conditions, namely, (1) the death of the ascendant obliged to reserve and (2) the survival, at
the time of his death, of relatives within the third degree belonging to the line from which the property came
(Sienes vs. E Esparcia l l l Phil. 349, 353).

The reservor has the legal title and dominion to the reservable property but subject to the resolutory condition that such title is
extinguished if the reservor predeceased the reservee. The reservor is a usufructuary of the reservable property. He may
alienate it subject to the reservation. The transferee gets the revocable and conditional ownership of the reservor. The
transferee's rights are revoked upon the survival of the reservees at the time of the death of the reservor but become
indefeasible when the reservees predecease the reservor. (Sienes vs. Esparcia, 111 Phil. 349, 353; Edroso vs. Sablan, 25 Phil.
295; Lunsod vs. Ortega, 46 Phil. 664; Florentino vs. Florentino, 40 Phil. 480: Director of Lands vs. Aguas, 63 Phil. 279.)

The reservor's title has been compared with that of the vendee a retro in a pacta de retro sale or to a fideicomiso conditional.

The reservor's alienation of the reservable property is subject to a resolutory condition, meaning that if at the time of the
reservor's death, there are reservees, the transferee of the property should deliver it to the reservees. lf there are no reservees
at the time of the reservor's death, the transferee's title would become absolute. (Lunsod vs. Ortega, 46 Phil. 664; Gueco vs.
Lacson, 118 Phil. 944; Mono vs. Nequia 93 Phil. 120).

On the other hand, the reserves has only an inchoate, expectant or contingent right. His expectant right would disappear if he
predeceased the reservor. lt would become absolute should the reservor predecease the reserves.

The reserves cannot impugn any conveyance made by the reservor but he can require that the reservable character of the
property be recognized by the purchaser (Riosa vs. Rocha 48 Phil. 737; Edroso vs. Sablan, 25 Phil. 295, 312-3; Gueco vs.
Lacson, 118 Phil. 944).

There is a holding that the renunciation of the reservee's right to the reservable property is illegal for being a contract regarding
future inheritance (Velayo Bernardo vs. Siojo, 58 Phil. 89, 96).

And there is a dictum that the reservee's right is a real right which he may alienate and dispose of conditionally. The condition is
that the alienation shall transfer ownership to the vendee only if and when the reserves survives the reservor (Sienes vs.
Esparcia, 111 Phil. 349, 353). 1äw phï1.ñët

The reservatario receives the property as a conditional heir of the descendant (prepositus) said property merely
reverting to the line of origin from which it had temporarily and accidentally stayed during
the reservista's lifetime. The authorities are all agreed that there being reservatarios that survive the reservists,
the latter must be deemed to have enjoyed no more than a than interest in the reservable property. (J. J. B. L.
Reyes in Cane vs. Director of Lands, 105 Phil. l5.)

Even during the reservista's lifetime, the reservatarios, who are the ultimate acquirers of the property, can
already assert the right to prevent the reservista from doing anything that might frustrate their reversionary
right, and, for this purpose, they can compel the annotation of their right in the registry of property even while
the (reservista) is alive (Ley Hipotecaria de Ultramar, Arts. 168, 199; Edroso vs. Sablan, 25 Phil. 295).

This right is incompatible with the mere expectancy that corresponds to the natural heirs of the reservista lt is
likewise clear that the reservable property is no part of the estate of the reservista who may not dispose of
them (it) by will, so long as there are reservatarios existing (Arroyo vs. Gerona, 58 Phil. 226, 237).

The latter, therefore, do not inherit from the reservista but from the descendant (prepositus) of whom
the reservatarios are the heirs mortis causa, subject to the condition that they must survive the reservista.
(Sanchez Roman, Vol. VI Tomo 2, p. 286; Manresa, Commentaries, Vol. 6, 6th Ed., pp. 274, 310, cited by J.
J.B.L. Reyes in Padura vs. Baldovino, L-11960, December 27, 1958, 104 Phil. 1065).

Hence, upon the reservista's death, the reservatario nearest to the prepositus becomes, "automatically and by operation of law,
the owner of the reservable property." (Cane vs. Director of Lands, 105 Phil. l5.)
In the instant case, the properties in question were indubitably reservable properties in the hands of Mrs. Legarda. Undoubtedly,
she was a reservor. The reservation became a certainty when at the time of her death the reservees or relatives within the third
degree of the prepositus Filomena Legarda were living or they survived Mrs. Legarda.

So, the ultimate issue in this case is whether Mrs. Legarda, as reservor, could convey the reservable properties by will or mortis
causa to the reservees within the third degree (her sixteen grandchildren) to the exclusion of the reservees in the second
degree, her three daughters and three sons. As indicated at the outset, that issue is already res judicata or cosa juzgada.

We hold that Mrs. Legarda could not convey in her holographic will to her sixteen grandchildren the reservable properties which
she had inherited from her daughter Filomena because the reservable properties did not form part of her estate (Cabardo vs.
Villanueva, 44 Phil. 186, 191). The reservor cannot make a disposition mortis causa of the reservable properties as long as the
reservees survived the reservor.

As repeatedly held in the Cano and Padura cases, the reservees inherit the reservable properties from the prepositus, not from
the reservor.

Article 891 clearly indicates that the reservable properties should be inherited by all the nearest relatives within the third degree
from the prepositus who in this case are the six children of Mrs. Legarda. She could not select the reservees to whom the
reservable property should be given and deprive the other reservees of their share therein.

To allow the reservor in this case to make a testamentary disposition of the reservable properties in favor of the reservees in
the third degree and, consequently, to ignore the reservees in the second degree would be a glaring violation of article 891. That
testamentary disposition cannot be allowed.

We have stated earlier that this case is governed by the doctrine of Florentino vs. Florentino, 40 Phil. 480, a similar case, where
it was ruled:1äwphï1.ñët

Reservable property left, through a will or otherwise, by the death of ascendant (reservista) together with his
own property in favor of another of his descendants as forced heir, forms no part of the latter's lawful
inheritance nor of the legitime, for the reason that, as said property continued to be reservable, the heir
receiving the same as an inheritance from his ascendant has the strict obligation of its delivery to the relatives,
within the third degree, of the predecessor in interest (prepositus), without prejudicing the right of the heir to an
aliquot part of the property, if he has at the same time the right of a reservatario (reserves).

ln the Florentino case, it appears that Apolonio Florentino II and his second wife Severina Faz de Leon begot two children,
Mercedes and Apolonio III. These two inherited properties from their father. Upon Apolonio III death in 1891, his properties were
inherited by his mother, Severina, who died in 1908. ln her will, she instituted her daughter Mercedes as heiress to all her
properties, including those coming from her deceased husband through their son, Apolonio III.

The surviving children, begotten by Apolonio II with his first wife Antonia Faz de Leon and the descendants of the deceased
children of his first marriage, sued Mercedes Florentino for the recovery of their share in the reservable properties, which
Severina de Leon had inherited from Apolonio III which the latter had inherited from his father Apolonio II and which Severina
willed to her daughter Mercedes.

Plaintiff's theory was that the said properties, as reservable properties, could not be disposed of in Severina's will in favor of
Mercedes only. That theory was sustained by this Court.

It was held that the said properties, being reservable properties, did not form part of Severina's estate and could not be inherited
from her by her daughter Mercedes alone.

As there were seven reservees, Mercedes was entitled, as a reserves, to one-seventh of the properties. The other six sevenths
portions were adjudicated to the other six reservees.

Under the rule of stare decisis et non quieta movere, we are bound to follow in this case the doctrine of the Florentino case. That
doctrine means that as long as during the reservor's lifetime and upon his death there are relatives within the third degree of
the prepositus regardless of whether those reservees are common descendants of the reservor and the ascendant from whom
the property came, the property retains its reservable character. The property should go to the nearest reservees. The reservor
cannot, by means of his will, choose the reserves to whom the reservable property should be awarded.
The alleged opinion of Sanchez Roman that there is no reserva troncal when the only relatives within the third degree are the
common descendants of the predeceased ascendant and the ascendant who would be obliged to reserve is irrelevant and sans
binding force in the light of the ruling in the Florentino case.

It is contended by the appellees herein that the properties in question are not reservable properties because only relatives within
the third degree from the paternal line have survived and that when Mrs. Legarda willed the said properties to her sixteen
grandchildren, who are third-degree relatives of Filomena Legarda and who belong to the paternal line, the reason for
the reserva troncal has been satisfied: "to prevent persons outside a family from securing, by some special accident of life,
property that would otherwise have remained therein".

That same contention was advanced in the Florentino case where the reservor willed the reservable properties to her daughter,
a full-blood sister of the prepositus and ignored the other six reservors, the relatives of the half-blood of the prepositus.

In rejecting that contention, this Court held that the reservable property bequeathed by the reservor to her daughter does not
form part of the reservor's estate nor of the daughter's estate but should be given to all the seven reservees or nearest relatives
of the prepositus within the third degree.

This Court noted that, while it is true that by giving the reservable property to only one reserves it did not pass into the hands of
strangers, nevertheless, it is likewise true that the heiress of the reservor was only one of the reservees and there is no reason
founded upon law and justice why the other reservees should be deprived of their shares in the reservable property (pp. 894-5).

Applying that doctrine to this case, it results that Mrs. Legarda could not dispose of in her will the properties in question even if
the disposition is in favor of the relatives within the third degree from Filomena Legarda. The said properties, by operation of
Article 891, should go to Mrs. Legarda's six children as reservees within the second degree from Filomena Legarda.

It should be repeated that the reservees do not inherit from the reservor but from the reservor but from the prepositus, of whom
the reservees are the heirs mortis causa subject to the condition that they must survive the reservor (Padura vs. Baldovino, L-
11960, December 27, 1958, 104 Phil. 1065).

The trial court said that the disputed properties lost their reservable character due to the non-existence of third-degree relatives
of Filomena Legarda at the time of the death of the reservor, Mrs. Legarda, belonging to the Legarda family, "except third-
degree relatives who pertain to both" the Legarda and Races lines.

That holding is erroneous. The reservation could have been extinguished only by the absence of reservees at the time of Mrs.
Legarda's death. Since at the time of her death, there were (and still are) reservees belonging to the second and third degrees,
the disputed properties did not lose their reservable character. The disposition of the said properties should be made in
accordance with article 891 or the rule on reserva troncal and not in accordance with the reservor's holographic will. The said
properties did not form part of Mrs. Legarda's estate. (Cane vs. Director of Lands, 105 Phil. l, 4).

WHEREFORE, the lower court's decision is reversed and set aside. lt is hereby adjudged that the properties inherited by
Filomena Roces Vda. de Legarda from her daughter Filomena Legarda, with all the fruits and accessions thereof, are reservable
properties which belong to Beatriz, Rosario, Teresa, Benito, Alejandro and Jose, all surnamed Legarda y Roces, as reservees.
The shares of Rosario L. Valdes and Benito F. Legarda, who died in 1969 and 1973, respectively, should pertain to their
respective heirs. Costs against the private respondents.

SO ORDERED.

G.R. No. 68843-44 September 2, 1991

MARIQUITA O. SUMAYA and LAGUNA AGRO-INDUSTRIAL COCONUT COOPERATIVE, INC., petitioners,

vs.
THE HON. INTERMEDIATE APPELLATE COURT, and AMADEO, SANCHO, DONATO, LUIS, ERASTO, LUISA, JOSE and
DOLORES, all surnamed BALANTAKBO, respondents.

Ceriaco A. Sumaya for petitioners.

Tomas P. Añonuevo for private respondents.

MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Intermediate Appellate Court (now Court of Appeals) in C.A. G.R.
No. CV-01292-93, which affirmed the decision of the Court of First Instance (now Regional Trial Court) of Laguna in the
consolidated cases in Civil Case No. SC-9561 and Civil Case No. SC-957.2

The parties entered into a stipulation of facts in the court a quo, which is summarized as follows:

Raul Balantakbo inherited from two (2) different ascendants the two (2) sets of properties subject of this case: 1) A one-third
(1/3) interest, pro-indiviso in a parcel of land situated in Dita, Lilio (Liliw) Laguna and described in paragraph 7 of the complaint
in Civil Case No. SC-956 from his father Jose, Sr., who died on January 28, 1945; and 2) A one-seventh (1/7) interest pro-
indiviso in ten (10) parcels of registered lands described in paragraph 6 of the complaint in Civil Case No. SC-957 from his
maternal grandmother, Luisa Bautista, who died on November 3, 1950.

On June 13, 1952, Raul died intestate, single, without any issue, and leaving only his mother, Consuelo Joaquin Vda. de
Balantakbo, as his sole surviving heir to the real properties above-mentioned.

On November 3, 1952, Consuelo adjudicated unto herself the above described properties in an Affidavit entitled "Caudal
Herederario del finado Raul Balantakbo" which provided, among others:

I. Que de mi legitimo matrimonio con mi difunto esposo, Jose Balantakbo, he tenido varios hijos, entre ellos si difunto
hijo, llamado Raul Balantakbo.

II. Que mi referido hijo Raul Balantakbo, fallencio el 13 de Junio de 1952, en la Ciudad de Pasay, durante su minolia de
edad sin dejar testamento alguno.

III. Que el finado Raul Balantakbo al morir no ha dejado descendiente alguno.

IV. Que soy la unica ascendiente superviviento de mi referido hijo Raul Balantakbo y por lo tanto su unica heredera
formosa, legitima y universal.

V. Que el finado Raul Balantakbo murio sin dejar deuda alguna.

VI. Que el finado al morir dejo propiedades consistentes en bienes inmuebles situados en la Provincia de Laguna.

VII. Que dichas propriedades fueron a su vez adquiridas por el finado Raul Balantakbo per herencia de su difunto
padre, Jose Balantakbo, y de su tia abuela Luisa Bautista.

xxx xxx xxx

(Rollo, p. 29)

On December 21, 1959, Consuelo Joaquin vda. de Balantakbo sold the property described in Civil Case No. SC-956 to
Mariquita H. Sumaya. The sale was evidenced by a deed attached as Annex "C" to the complaint. The same property was
subsequently sold by Mariquita Sumaya to Villa Honorio Development Corporation, Inc., on December 30, 1963. On January 23,
1967, Villa Honorio Development Corporation transferred and assigned its rights over the property in favor of Agro-Industrial
Coconut Cooperative, Inc. The documents evidencing these transfers were registered in the Registry of Deeds of Laguna and
the corresponding certificates of titles were issued. The properties are presently in the name of Agro-Industrial Coconut
Cooperative, Inc., 2/3 share and the remaining 1/3 share is in the name of Sancho Balantakbo.

Also on December 30, 1963, Consuelo Joaquin vda. de Balantakbo sold the properties described in the complaint in Civil Case
No. SC-957 to Villa Honorio Development Corporation, Inc. The latter in turn transferred and assigned all its rights to the
properties in favor of Laguna Agro-Industrial Coconut Cooperative, Inc. which properties are presently in its possession.

The parties admit that the certificates of titles covering the above described properties do not contain any annotation of its
reservable character.

On June 3, 1968, Consuelo Joaquin vda. de Balantakbo died.

On March 4, 1970, Amadeo, Sancho, Donato, Luis, and Erasto, all surnamed Balantakbo, brothers in full blood of Raul
Balantakbo and Luisa, Jose and Dolores, also all surnamed Balantakbo, surviving children of deceased Jose Balantakbo, Jr.,
another brother of the first named Balantakbos, filed the above mentioned civil cases to recover the properties described in the
respective complaints which they claimed were subject to a reserva troncal in their favor.

The court a quo found that the two (2) cases varied only in the identity of the subject matter of res involved, the transferees, the
dates of the conveyances but involve the same legal question of reserva troncal. Hence, the consolidation of the two (2) cases.

After trial, the court a quo rendered a joint decision in favor of the Balantakbos, the dispositive portion of which reads:

WHEREFORE, in both Civil Cases Nos. SC-956 and SC-957, judgment is hereby rendered in favor of the plaintiffs and
against the defendants, as follows:

1. Ordering the defendant Laguna Agro-Industrial Coconut Cooperative, Inc. to convey to the plaintiffs —

a) In Civil Case No. SC-956 — the one-third (1/3) interest and ownership, pro-indiviso, in and over the parcel of
land described in paragraph three (3) sub-paragraph 1, of pages one (1) and two (2) of this decision;

b) In Civil Case No. SC-957 — the one-seventh (1/7) interest and ownership, pro-indiviso, in and over the ten
(10) parcels of land described in paragraph three (3), sub-paragraph 2, of pages two (2) and three (3) of this
decision;

c) The plaintiffs are to share equally in the real properties herein ordered to be conveyed to them by the
defendants with plaintiffs Luisa, Jose and Dolores, all surnamed Balantakbo, receiving one-third (1/3) of the
one share pertaining to the other plaintiffs who are their uncles:

2. Ordering the Laguna Agro-Industrial Coconut Cooperative, Inc. to account for and pay to the plaintiffs the value of the
produce from the properties herein ordered to be returned to the plaintiffs, said accounting and payment of income
being for the period from January 3, 1968 until date of reconveyance of the properties herein ordered:

3. In each of Civil Cases Nos. SC-956 and SC-957, defendants are to pay plaintiffs —

a. One Thousand (P1,000.00) Pesos in litigation expenses.

b. Two Thousand (P2,000.00) Pesos in attorney's fees.

4. Defendants are to pay the costs in each of Civil Cases Nos. SC-956 and 957.

xxx xxx xxx

(p. 46, Rollo)

This decision was appealed to the appellate court which affirmed the decision of the court a quo in toto. The motion for
reconsideration was denied (p. 65, Rollo) by the appellate court which found no cogent reason to reverse the decision.

This petition before Us was filed on November 12, 1984 with the petitioners assigning the following errors allegedly committed
by the appellate court:

I. The trial court erred in not finding defendants an (sic) innocent purchaser for value and in good faith of the properties
covered by certificates of title subject of litigation.

II. The trial court erred in finding it unnecessary to annotate the reservable interest of the reservee in the properties
covered by certificates of title subject of litigation.

III. The trial court erred in finding that the cause of action of the plaintiffs (private respondents) has not yet prescribed.

IV. The trial court erred in awarding moral and actual damages in favor of the plaintiffs by virtue of the institution of Civil
Cases Nos. 956 and 957.

Petitioners would want this Court to reverse the findings of the court a quo, which the appellate court affirmed, that they were not
innocent purchasers for value. According to petitioners, before they agreed to buy the properties from the reservor (also
called reservista), Consuelo Joaquin vda. de Balantakbo, they first sought the legal advice of their family consultant who found
that there was no encumbrance nor any lien annotated on the certificate of title coveting the properties.

The court a quo found otherwise. Upon the death of the propositus, Raul Balantakbo, the reservista, Consuelo vda. de
Balantakbo caused the registration of an affidavit of self-adjudication of the estate of Raul, wherein it was clearly stated that the
properties were inherited by Raul from his father Jose, Sr., as regards the subject matter of Civil Case No. SC-956 and from his
maternal grandmother, Luisa Bautista, as regards the subject matter of Civil Case No. SC-957. The court a quo further ruled that
said affidavit was, in its form, declaration and substance, a recording with the Registry of Deeds of the reservable character of
the properties. In Spanish language, the affidavit clearly stated that the affiant, Consuelo, was a lone-ascendant and heir to Raul
Balantakbo, her son, who died leaving properties previously inherited from other ascendants and which properties were
inventoried in the said affidavit.

It was admitted that the certificates of titles covering the properties in question show that they were free from any liens and
encumbrances at the time of the sale. The fact remains however, that the affidavit of self-adjudication executed by Consuelo
stating the source of the properties thereby showing the reservable nature thereof was registered with the Register of Deeds of
Laguna, and this is sufficient notice to the whole world in accordance with Section 52 of the Property Registration Decree
(formerly Sec. 51 of R.A. 496) which provides:

Sec. 52. CONSTRUCTIVE NOTICE UPON REGISTRATION. — Every conveyance, mortgage, lease, lien attachment,
order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the Office of the
Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons
from the time of such registering, filing or entering.

Thus, in Gatioan v. Gaffud, G.R. No. L-21953, March 28, 1969, 27 SCRA 706, 712-713, cited in People v. Reyes, G.R. Nos.
74226-27, July 27, 1989, 175 SCRA 597; Garcia v. CA and PNB v. CA, et al., G.R. Nos. L-48971 and L-40911, both dated
January 22, 1980, 95 SCRA 380 and Legarda and Prieto v. Saleeby, 31 Phil. 590, 600, We held:

When a conveyance has been properly recorded such record is constructive notice of its contents and all interests, legal
and equitable, included therein . . .

Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title.
Such presumption is irrebuttable. He is charged with notice of every fact shown by the record and is presumed to know
every fact which an examination of the record would have disclosed. This presumption cannot be overcome by proof of
innocence or good faith. Otherwise, the very purpose and object of the law requiring a record would be destroyed. Such
presumption cannot be defeated by proof of want of knowledge of what the record contains any more than one may be
permitted to show that he was ignorant of the provisions of the law. The rule that all persons must take notice of the
facts which the public record contains is a rule of law. The rule must be absolute, any variation would lead to endless
confusion and useless litigation. . . .

In the case of Bass v. De la Rama, 73 Phil. 682, 685, the rule was laid down that the mere entry of a document in the day book
without noting it on the certificate of title is not sufficient registration. However, that ruling was superseded by the holding in the
later six cases of Levin v. Bass, 91 Phil. 420. As explained in Garcia v. CA, et al., G.R. Nos. L-48971 and 49011, January 20,
1980, 95 SCRA 380, 388, which is the prevailing doctrine in this jurisdiction.

That ruling was superseded by the holding in the later six cases of Levin v. Bass, 91 Phil. 420, where a distinction was
made between voluntary and involuntary registration, such as the registration of an attachment, levy upon execution,
notice of lis pendens, and the like. In cases of involuntary registration, an entry thereof in the day book is a sufficient
notice to all persons even if the owner's duplicate certificate of title is not presented to the register of deeds.

On the other hand, according to the said cases of Levin v. Bass, in case of voluntary registration of documents an
innocent purchaser for value of registered land becomes the registered owner, and, in contemplation of law the holder
of a certificate of title, the moment he presents and files a duly notarized and valid deed of sale and the same is entered
in the day book and at the same time he surrenders or presents the owner's duplicate certificate of title covering the
land sold and pays the registration fees, because what remains to be done lies not within his power to perform. The
register of deeds is duty bound to perform it. (See Potenciano v. Dineros, 97 Phil. 196).

In this case, the affidavit of self adjudication executed by Consuelo vda. de Balantakbo which contained a statement that the
property was inherited from a descendant, Raul, which has likewise inherited by the latter from another ascendant, was
registered with the Registry of Property. The failure of the Register of Deeds to annotate the reservable character of the property
in the certificate of title cannot be attributed to Consuelo.
Moreover, there is sufficient proof that the petitioners had actual knowledge of the reservable character of the properties before
they bought the same from Consuelo. This matter appeared in the deed of sale (Exhibit "C") executed by Consuelo in favor of
Mariquita Sumaya, the first vendee of the property litigated in Civil Case No. SC-956, as follows:

xxx xxx xxx

That, I (Consuelo, vendor) am the absolute and exclusive owner of the one-third (1/3) portion of the above described
parcel of land by virtue of the Deed of Extra-judicial Partition executed by the Heirs of the deceased Jose Balantakbo
dated December 10, 1945 and said portion in accordance with the partition above-mentioned was adjudicated to Raul
Balantakbo, single, to (sic) whom I inherited after his death and this property is entirely free from any encumbrance of
any nature or kind whatsoever, . . . (p. 42, Rollo)

It was admitted though that as regards the properties litigated in Civil Case SC-957, no such admission was made by Consuelo
to put Villa Honorio Development on notice of the reservable character of the properties. The affidavit of self-adjudication
executed by Consuelo and registered with the Registry would still be sufficient notice to bind them.

Moreover, the Court a quo found that the petitioners and private respondents were long time acquaintances; that the Villa
Honorio Development Corporation and its successors, the Laguna Agro-Industrial Coconut Cooperative Inc., are family
corporations of the Sumayas and that the petitioners knew all along that the properties litigated in this case were inherited by
Raul Balantakbo from his father and from his maternal grandmother, and that Consuelo Vda. de Balantakbo inherited these
properties from his son Raul.

The obligation to reserve rests upon the reservor, Consuelo Joaquin vda. de Balantakbo. Article 891 of the New Civil Code
on reserva troncal provides:

Art. 891. The ascendant who inherits from his descendant any property which the latter may have acquired by
gratuitous title from another ascendant or a brother or sister, is obliged to reserve such property as he may have
acquired by operation of law for the benefit of relatives who are within the third degree and who belong to the line from
which said property came. (Emphasis supplied)

We do not agree, however, with the disposition of the appellate court that there is no need to register the reservable character of
the property, if only for the protection of the reservees, against innocent third persons. This was suggested as early as the case
of Director of Lands v. Aguas, G.R. No. 42737, August 11, 1936, 63 Phil. 279. The main issue submitted for resolution therein
was whether the reservation established by Article 811 (now Art. 891 of the New Civil Code) of the Civil Code, for the benefit of
the relatives within the third degree belonging to the line of the descendant from whom the ascendant reservor received the
property, should be understood as made in favor of all the relatives within said degree and belonging to the line above-
mentioned, without distinction legitimate, natural and illegitimate ones not having the legal status of natural children. However, in
an obiter dictum this Court stated therein:

The reservable character of a property is but a resolutory condition of the ascendant reservor's right of ownership. If the
condition is fulfilled, that is, if upon the ascendant reservor's death there are relatives having the status provided in
Article 811 (Art. 891, New Civil Code), the property passes, in accordance with this special order of succession, to said
relatives, or to the nearest of kin among them, which question not being pertinent to this case, need not now be
determined. But if this condition is not fulfilled, the property is released and will be adjudicated in accordance with the
regular order of succession. The fulfillment or non-fulfillment of the resolutory condition, the efficacy or cessation of the
reservation, the acquisition of rights or loss of the vested ones, are phenomena which have nothing to do with whether
the reservation has been noted or not in the certificate of title to the property. The purpose of the notation is nothing
more than to afford to the persons entitled to the reservation, if any,
due protection against any act of the reservor, which may make it ineffective . . . (p. 292, Ibid)

Likewise, in Dizon and Dizon v. Galang, G.R. No. 21344, January 14, 1926, 48 Phil. 601, 603, this Court ruled that the
reservable character of a property may be lost to innocent purchasers for value. Additionally, it was ruled therein that the
obligation imposed on a widowed spouse to annotate the reservable character of a property subject of reserva viudal is
applicable to reserva troncal. (See also Edrozo v. Sablan, G.R. No. 6878, September 13, 1913, 25 Phil. 295).

Since these parcels of land have been legally transferred to third persons, Vicente Galang has lost ownership thereof
and cannot now register nor record in the Registry of Deeds their reservable character; neither can he effect the fee
simple, which does not belong to him, to the damage of Juan Medina and Teodoro Jurado, who acquired the said land
in good faith, free of all incumbrances. An attempt was made to prove that when Juan Medina was advised not to buy
the land he remarked, "Why did he (Vicente Galang) not inherit it from his son?" Aside from the fact that it is not clear
whether this conservation took place in 1913 or 1914, that is, before or after the sale, it does not arise that he had any
knowledge of the reservation. This did not arise from the fact alone that Vicente Galang had inherited the land from his
son, but also from the fact that, by operation of law, the son had inherited it from his mother Rufina Dizon, which
 circumstance, so far as the record shows, Juan Medina had not been aware of. We do not decide, however, whether or
not Juan Medina and Teodoro Jurado are obliged to acknowledge the reservation and to note the same in their deeds,
for the reason that there was no prayer to this effect in the complaint and no question raised in regard thereto.

Consistent with the rule in reserva viudal where the person obliged to reserve (the widowed spouse) had the obligation to
annotate in the Registry of Property the reservable character of the property, in reserva troncal, the reservor (the ascendant who
inherited from a descendant property which the latter inherited from another descendant) has the duty to reserve and therefore,
the duty to annotate also.

The jurisprudential rule requiring annotation in the Registry of Property of the right reserved in real property subject of reserva
viudal insofar as it is applied to reserva troncal stays despite the abolition of reserva viudal in the New Civil Code. This rule is
consistent with the rule provided in the second paragraph of Section 51 of P.D. 1529, which provides that: "The act of
registration shall be the operative act to convey or affect the land insofar as third persons are concerned . . ." (emphasis
supplied)

The properties involved in this case are already covered by a Torrens title and unless the registration of the limitation is effected
(either actual or constructive), no third persons shall be prejudiced thereby.

The respondent appellate court did not err in finding that the cause of action of the private respondents did not prescribe yet.
The cause of action of the reservees did not commence upon the death of the propositus Raul Balantakbo on June 13, 1952 but
upon the death of the reservor Consuelo Vda. de Balantakbo on June 3, 1968. Relatives within the third degree in whose favor
the right (or property) is reserved have no title of ownership or of fee simple over the reserved property during the lifetime of the
reservor. Only when the reservor should die before the reservees will the latter acquire the reserved property, thus creating a fee
simple, and only then will they take their place in the succession of the descendant of whom they are relatives within the third
degree (See Velayo Bernardo v. Siojo, G.R. No. 36078, March 11, 1933, 58 Phil. 89). The reserva is extinguished upon the
death of the reservor, as it then becomes a right of full ownership on the part of the reservatarios, who can bring a reivindicatory
suit therefor. Nonetheless, this right if not exercised within the time for recovery may prescribe in ten (10) years under the old
Code of Civil Procedure (see Carillo v. De Paz, G.R. No. L-22601, October 28, 1966, 18 SCRA 467, 473) or in thirty years under
Article 1141 of the New Civil Code. The actions for recovery of the reserved property was brought by herein private respondents
on March 4, 1970 or less than two (2) years from the death of the reservor. Therefore, private respondents' cause of action has
not prescribed yet.

Finally, the award of one thousand pesos (P1,000.00) for actual litigation expenses and two thousand pesos (P2,000.00) for
attorney's fees is proper under Article 2208(2) of the New Civil Code. Private respondents were compelled to go to court to
recover what rightfully belongs to them.

ACCORDINGLY, the petition is DENIED. The questioned decision of the Intermediate Appellate Court is AFFIRMED, except for
the modification on the necessity to annotate the reversable character of a property subject of reserva troncal.

SO ORDERED.