Vitug vs.

CA Digest
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 husband the latter acquired upon her
death a vested right over the funds in the account. The conveyance is therefore not
mortis causa.
Alt.
VITUG vs CA
188 SCRA 755
FACTS: This case is a chapter in an earlier suit decided by this Court involving the
probate of the two wills of the late Dolores Luchangco Vitug, who died in New York,
U. S.A. naming private respondent Rowena Faustino-Corona executrix. In said

decision, the court upheld the appointment of Nenita Alonte as co-special

administrator of Mrs. Vitugs estate with her (Mrs. Vitugs) widower, petitioner
Romarico G. Vitug, pending probate.
Romarico G. Vitug filed a motion asking for authority from the probate court to sell
certain shares of stock and real properties belonging to the estate to cover allegedly
his advances to the estate, plus interests, which he claimed were personal funds. As
found by the CA the alleged advances were spent for the payment of estate tax,
deficiency estate tax, and increment thereto.
Rowena Corona opposed the motion to sell on the ground that the same funds
withdrawn were conjugal partnership properties and part of the estate, and hence,
there was allegedly no ground for reimbursement. She also sought his ouster for
failure to include the sums in question for inventory and for concealment of funds
belonging to the estate.
Vitug insists that the said funds are his exclusive property having acquired the same
through a survivorship agreement executed with his late wife and the bank.
The trial courts upheld the validity of such agreement.
On the other hand, the CA held that the survivorship agreement constitutes a
conveyance mortis causa which did not comply with the formalities of a valid will
as prescribed by Article 805 of the Civil Code, and secondly, assuming that it is a
mere donation inter vivos, it is a prohibited donation under the provisions of Article
133 of the Civil Code.
ISSUE: W/N the survivorship agreement between the spouses Vitug constitutes a
donation?
HELD: NO. The conveyance in question is not, first of all, one of mortis causa, which
should be embodied in a will. A will has been defined as a personal, solemn,
revocable and free act by which a capacitated person disposes of his property and
rights and declares or complies with duties to take effect after his death. In other
words, the bequest or device must pertain to the testator. In this case, the monies
subject of savings account No. 35342-038 were in the nature of conjugal funds In
the case relied on, Rivera v. Peoples Bank and Trust Co., we rejected claims that a
survivorship agreement purports to deliver one partys separate properties in favor
of the other, but simply, their joint holdings.
There is no showing that the funds exclusively belonged to one party, and hence it
must be presumed to be conjugal, having been acquired during the existence of the
marital relations.
Neither is the survivorship agreement a donation inter vivos, for obvious reasons,
because it was to take effect after the death of one party. Secondly, it is not a

donation between the spouses because it involved no conveyance of a spouses

own properties to the other.
It is also our opinion that the agreement involves no modification petition of the
conjugal partnership, as held by the Court of Appeals, by mere stipulation and
that it is no cloak to circumvent the law on conjugal property relations. Certainly,
the spouses are not prohibited by law to invest conjugal property, say, by way of a
joint and several bank account, more commonly denominated in banking parlance
as an and/or account. In the case at bar, when the spouses Vitug opened savings
account No. 35342-038, they merely put what rightfully belonged to them in a
money-making venture. They did not dispose of it in favor of the other, which would
have arguably been sanctionable as a prohibited donation.
The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her
husband, the latter has acquired upon her death a vested right over the amounts
under savings account No. 35342-038 of the Bank of America. Insofar as the
respondent court ordered their inclusion in the inventory of assets left by Mrs. Vitug,
we hold that the court was in error. Being the separate property of petitioner, it
forms no more part of the estate of the deceased.
GONZALO VILLANUEVA
(represented by his heirs), petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO,
respondents.G.R. No. 172804 January 24, 2011 Second Division Carpio,
J.
FACTS:Gonzalo Villanueva, represented by his heirs,
sued Spouses Branoco to recover a parcelof land. The former claimed ownership
over the property thru purchase from Vere, who in turn,bought the property from
Rodrigo. Gonzalo declared the property in his name for tax purposessoon after
acquiring it. In their answer, the Spouses Baranoco similarly claimed ownership over
the property thru purchase from Rodriguez, who in turn, acquired the property from
Rodrigo byway of donation. The Spouses entered the property and paid taxes
afterwards.The trial court ruled in favor of Gonzalo and declared him owner of the
property, andordered the Spouses Branoco to surrender possession to Gonzalo. The
trial court rejected
Spouses Branocos claim of ownership after treating the Deed as a donation mortis
causa whichRodrigo effectively cancelled by selling the Property to Vere. Thus, by

the time Rodriguez soldthe property to the Spouses, she had no title to transfer. On
appeal, the CA granted the
Spouses appeal and set aside the trial court's ruling. it held that the deed of
donation is one of inter vivos. In his petition, Gonzalo seeks the reinstatement of the
trial court's ruling. Alternatively, petitioner claims ownership over the Property
through acquisitive prescription,having allegedly occupied it for more than 10
years.ISSUE:Whether or not the contract between Rodrigo and Rodriguez is a
donation or a devise?
RULING;It is immediately apparent that Rodrigo passed naked title to Rodriguez
under aperfected donation inter vivos.
First.
Rodrigo stipulated that "if the herein Donee predeceases me, the [Property] will
notbe reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez,"
signaling theirrevocability of the passage of title to Rodriguez's estate, waiving
Rodrigo's right to reclaim title.This transfer of title was perfected the moment
Rodrigo learned of Rodriguez's acceptance of the disposition
which, being reflected in the Deed, took place on the day of its execution on 3May
1965. Rodrigo's acceptance of the transfer underscores its essence as a gift
in presenti
,not
in futuro
, as only donations
inter vivos
need acceptance by the recipient.
Indeed, hadRodrigo wished to retain full title over the Property, she could have
easily stipulated, as thetestator did in another case, that "the donor, may transfer,
sell, or encumber to any person or entity the properties here donated x x x"
or used words to that effect. Instead, Rodrigo expresslywaived title over the
Property in case Rodriguez predeceases her.
Second
. What Rodrigo reserved for herself was only the beneficial title to the
Property,evident from Rodriguez's undertaking to "give one [half] x x x of the
produce of the land to Apoy Alve during her lifetime."

Thus, the Deed's stipulation that "the ownership shall be vested on[Rodriguez] upon
my demise," taking into account the non-reversion clause, could only refer
toRodrigo's beneficial title. Indeed, if Rodrigo still retained full ownership over the
Property, it wasunnecessary for her to reserve partial usufructuary right over it.
Third
. The existence of consideration other than the donor's death, such as the
donor'slove and affection to the donee and the services the latter rendered, while
also true of devises,nevertheless "corroborates the express irrevocability of x x x [
inter vivos
] transfers."
Thus, theCA committed no error in giving weight to Rodrigo's statement of "love and
affection" for Rodriguez, her niece, as consideration for the gift, to underscore its
finding.
Nor can petitioner capitalize on Rodrigo's post-donation transfer of the Property to
Vereas proof of her retention of ownership. If such were the barometer in
interpreting deeds of donation, not only will great legal uncertainty be visited on
gratuitous dispositions, this will givelicense to rogue property owners to set at
naught perfected transfers of titles, which, whilefounded on liberality, is a valid
mode of passing ownership. The interest of settled propertydispositions counsels
against licensing such practice. Accordingly, having irrevocably transferred naked
title over the Property to Rodriguez in1965, Rodrigo "cannot afterwards revoke the
donation nor dispose of the said property in favor of another."
Thus, Rodrigo's post-donation sale of the Property vested no title to Vere. AsVere's
successor-in-interest, petitioner acquired no better right than him. On the other
hand,respondents bought the Property from Rodriguez, thus acquiring the latter's
title which they mayinvoke against all adverse claimants, including petitioner.
15. Rafael Arsenio S. Dizon, v. CTA and CIR
G.R. No. 140944; April 30, 2008
Facts: Jose P. Fernandez died in November 7, 1987. Thereafter, a petition for the
probate of his will was filed. The probate court appointed Atty. Rafael Arsenio P.
Dizon as administrator of the Estate of Jose Fernandez.
An estate tax return was filed later on which showed ZERO estate tax liability. BIR
thereafter issued a deficiency estate tax assessment, demanding payment of Php
66.97 million as deficiency estate tax. This was subsequently reduced by CTA to
Php 37.42 million. The CA affirmed the CTAs ruling, hence, the instant petition.

The petitioner claims that in as much as the valid claims of creditors against the
Estate are in excess of the gross estate, no estate tax was due. On the other hand,
respondents argue that since the claims of the Estates creditors have been
condoned, such claims may no longer be deducted from the gross estate of the
decedent.
Issue: Whether the actual claims of creditors may be fully allowed as deductions
from the gross estate of Jose despite the fact that the said claims were reduced or
condoned through compromise agreements entered into by the Estate with its
creditors
Held: YES. Following the US Supreme Courts ruling in Ithaca Trust Co. v. United
States, the Court held that post-death developments are not material in determining
the amount of deduction. This is because estate tax is a tax imposed on the act of
transferring property by will or intestacy and, because the act on which the tax is
levied occurs at a discrete time, i.e., the instance of death, the net value of the
property transferred should be ascertained, as nearly as possible, as of the that
time. This is the date-of-death valuation rule.
The Court, in adopting the date-of-death valuation principle, explained that: First.
There is no law, nor do we discern any legislative intent in our tax laws, which
disregards the date-of-death valuation principle and particularly provides that postdeath developments must be considered in determining the net value of the estate.
It bears emphasis that tax burdens are not to be imposed, nor presumed to be
imposed, beyond what the statute expressly and clearly imports, tax statutes being
construed strictissimi juris against the government. Second. Such construction finds
relevance and consistency in our Rules on Special Proceedings wherein the term
"claims" required to be presented against a decedent's estate is generally construed
to mean debts or demands of a pecuniary nature which could have been enforced
against the deceased in his lifetime, or liability contracted by the deceased before
his death. Therefore, the claims existing at the time of death are significant to, and
should be made the basis of, the determination of allowable deductions.
Gestopa v CA
FACTS:
Spouses Danlag own six parcels of land. To four parcels of land, they executed a
donation mortis causa in favor of respondent Mercedes Danlag-Pilapil, reserving
donor's rights to amend, cancel, or revoke the donation and to sell or encumber
such properties. Years later, they executed another donation, this time inter vivos,
to six parcels of land in favor of respondents, reserving their rights to the fruits of
the land during their lifetime and for prohibiting the donee to sell or dispose the
properties donated. Subsequently, the spouses sold 2 parcels to herein petitioners,
spouses Gestopa, and eventually revoking the donation. Respondent filed a petition

to quiet title, stating that she had already become the owner of the parcels of land.
Trial Court ruled in favor of petitioners, but CA reversed.
ISSUE:
Whether the (second) donation was inter vivos or mortis causa
RULING:
It was donation inter vivos. The spouses were aware of the difference between the
two donations, and that they needed to execute another deed of donation inter
vivos, since it has a different application to a donation mortis causa. Also, the court
stated four reasons to the matter: (1) that the spouses donated the parcels of land
out of love and affection, a clear indication of a donation inter vivos; (2) the
reservation of a lifetime usufruct; (3) reservation of sufficient properties for
maintenance that shows the intention to part with their six lot; and (4) respondent's
acceptance, contained in the deed of donation. Once a deed of donation has been
accepted, it cannot be revoked, except for officiousness or ingratitude, which the
spouses failed to invoke.
De Luna v Abrigo
FACTS:
De Luna donated a portion of a 75 sq. m. lot to the Luzonian University Foundation.
The donation was embodied in a Deed of Donation Intervivos and was subject to
certain terms and conditions. In case of violation or non-compliance, the property
would automatically revert to the donor. When the Foundation failed to comply with
the conditions, de Luna revived the said donation by executing a Revival of
Donation Intervivos with the following terms and conditions:
1) The Donee shall construct on the land and at its expense a Chapel, Nursery, and
Kindergarten School to be named after St. Veronica
2) Construction shall start immediately and must be at least 70% completed three
years from the date of the Deed unless the Donor grants extensions
3) Automatic reversion in case of violation
The Foundation accepted and the donation was registered and annotated in the TCT.
By a Deed of Segregation, the foundation was issued a TCT for area the lot donated
while the remaining area was retained by the De Luna.
The children and only heirs of the late De Luna (died after the donation) filed a
complaint with the RTC for the cancellation of the donation on the ground that the
terms were violated. The Foundation defended itself by saying that it had partially

and substantially complied with the conditions and that the donor granted it an
indefinite extension of time to complete construction.
The RTC dismissed the petition on the ground of prescription (for being filed after 4
years). The heirs did not file an MR and went straight to the SC.
ISSUE:
Whether the action prescribes in 4 years (based on art. 764 NCC-judicial decree of
revocation of the donation) or in 10 years (based on art. 1144 enforcement of a
written contract)
RULING: 10 years
The donation subject of this case is one with an onerous cause.
Under the old Civil Code, it is a settled rule that donations with an onerous cause
are governed not by the law on donations but by the rules on contract. On the
matter of prescription of actions for the revocation of onerous donation, it was held
that the general rules on prescription apply. The same rules apply under the New
Civil Code as provided in Article 733 thereof which provides:
Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that
portion which exceeds the value of the burden imposed.
It is true that under Article 764 of the New Civil Code, actions for the revocation of a
donation must be brought within four (4) years from the non-compliance of the
conditions of the donation. However, said article does not apply to onerous
donations in view of the specific provision of Article 733 providing that onerous
donations are governed by the rules on contracts. The rules on prescription and not
the rules on donation applies in the case at bar.