ARTICLE 774 - 782 CHAPTER I - GENERAL PROVISIONS

RUFINA LUY LIM

VERSUS
COURT OF APPEALS, AUTO TRUCK TBA CORPORATION,
SPEED DISTRIBUTING, INC., ACTIVE DISTRIBUTORS,
ALLIANCE MARKETING CORPORATION, ACTION
COMPANY, INC.
G.R. NO. 124715. JANUARY 24, 2000
ASSOCIATE JUSTICE BUENA
FACTS: Petitioner Rufina Luy Lim is the surviving spouse of
the late Pastor Y. Lim who died intestate on 11 June 1994
whose estate is the subject of probate proceedings. Petitioner,
as surviving spouse and duly represented by her nephew
George Luy, filed on 17 March 1995, a joint petition for the
administration of the estate of Pastor Y. Lim before the RTC of
Quezon aside City.The deceased left properties and in the
amended petition,the widow sought to include properties in
the name of several corporations, private respondents Auto
Truck Corporation, Alliance Marketing Corporation, Speed
Distributing, Inc., Active Distributing, Inc. and Action
Company as part of the estate of the deceased.Likewise
petitioner averred that not only the properties of private
respondent corporations are properly part of the decedents
estate but also the private respondent corporations
themselves.
ISSUE: Whether or not a corporation, in its universality,
be the proper subject of and be included in the inventory
of the estate of a deceased person?
RULING: NO. It is settled that a corporation is clothed with
personality separate and distinct from that of the persons
composing it. It may not generally be held liable for that of the
persons composing it. It may not be held liable for the personal
indebtedness of its stockholders or those of the entities
connected with it. Inasmuch as the real properties included in
the inventory of the estate of the late Pastor Y. Lim are in the
possession of and are registered in the name of private
respondent corporations, which under the law possess a
personality separate and distinct from their stockholders, and
in the absence of any cogency to shred the veil of corporate
fiction, the presumption of conclusiveness of said titles in favor
of private respondents should stand undisturbed.

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WHEREFORE, in view of the foregoing disquisitions, the

instant petition is hereby DISMISSED for lack of merit and the
decision of the Court of Appeals which nullified and set aside
the orders issued by the Regional Trial Court, Branch 93,
acting as a probate court, dated 04 July 1995 and 12
September 1995 is AFFIRMED.

JOSE C. LEE AND ALMA AGGABAO, IN THEIR CAPACITIES AS

PRESIDENT AND CORPORATE SECRETARY, RESPECTIVELY, OF
PHILIPPINES INTERNATIONL LIFE INSURANCE COMPANY, AND
FILIPINO LOAN ASSISTANCE GROUP
VERSUS
. REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85
PRESIDED BY JUDGE PEDRO M. AREOLA, BRANCH CLERK
OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS
ADENAUER G. RIVERA AND PEDRO L. BORJA, ALL OF THE
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85, MA.
DIVINA ENDERES CLAIMING TO BE SPECIAL ADMINISTRATRIX,
AND OTHER PERSONS/ PUBLIC OFFICERS ACTING FOR AND IN THEIR
BEHALF

G.R. NO. 146006 FEBRUARY 23, 2004

ASSOCIATE JUSTICE RENATO CORONA
FACTS: Dr. Ortanez, an owner of a 90% of the subscribed
capital stock of the Philippine International Life Insurance
Company. He left behind a wife, three legitimate children and
five illegitimate children. One of his legitimate children, Rafael
Ortanez, filed a petition for letters of administration on the
intestate of Dr. Ortanez. On the other hand, his illegitimate
children filed an opposition to t he petition and prayed that a
special administrator be appointed. Rafael and Jose Ortanez
were appointed joint special administrators of their fathers
estate. They submitted an inventory which included among
other properties 2,029 shares of stock in the Philinterlife.
Juliania Ortanez, claiming she owns 1,014 shares of
stock as her conjugal share, sold her share to Filipino Loan
Assistance Group, which ownership was consolidated by FLAG
for failure to repurchase the same. Jose Ortanez, also acting in
his personal capacity, claiming that he owned the remaining
as his inheritance share, sold said shares to FLAG and also
failed to repurchase the same. Prior to that, the wife and her
two children entered into a memorandum of agreement for the
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extrajudicial settlement of the estate of the deceased,

partitioning the estate among themselves.
Private respondent, Ma. Divina Ortanez-Enderes and her
siblings filed a motion for the appointment of special
administrator of Philinterlife shares of stock which was
opposed by Jose. The intestate court on the one hand granted
the motion of Enderes and appointed her as the administratrix
of the Philinterlife shares of stock. She then files a motion to
declare the memorandum of agreement void ab initio and
declare the extra judicial settlement partial nullity, and the
deeds of sale void ab initio. All of which was opposed by Jose.
The intestate court then denied the approval of the sale of
Philinterlife shares of stock and granted the annulment of the
memorandum of agreement. This was raised by way of petition
to the supreme court which was denied with finality for there
was no legal justification for the extra judicial partition of the
estate.
As a result of the orders nullifying the sale, Enderes then
filed a motion of execution of the Orders of the intestate court.
A copy was then served to petitioners who ignored the same.
Enderes also filed a motion asking that the name of Dr.
Ortanez be reinstated in the stock and transfer book which
petitioners opposed.
ISSUE: Whether or not the order of the intestate court
nullifying the sale of shares of stock between the
legitimate heir and FLAG is valid.
RULING: An heir can sell his right, interest, or participation in
the property under administration. However, an heir can only
alienate such portion of the estate that may be allotted to him
in the division of the estate by the probate or intestate court
after final adjudication. This means, only his undivided share
in the estate, not any specific property therein. In this case,
the wife and her sons sold specific properties of the estate in
favor of petitioner FLAG without court approval, to the
exclusion and extreme prejudice of other heirs. This is
unlawful pending the final adjudication of the estate by the
intestate court because of the undue prejudice it would cause
the other claimants to the estate. Court approval is necessary
for the validity of the disposition of the decedents estate.
In addition, when the estate of the deceased person is
already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it
without any approval of the probate court. Otherwise, it does
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not bind the estate and is null and void. Thus, the subsequent
sale by the wife and Jose to a third part, (FLAG) is void as it
was also a result of an invalid memorandum of agreement.

LOLITA D. ENRICO
VERSUS
HEIRS OF EULOGIO B. MEDINACELI
G.R. NO. 173614. SEPTEMBER 28, 2007
PONENTE: JUSTICE CHICO-NAZARIO
FACTS: Petitioner, Lolita D. Enrico, is the second wife of
Eulogio Medinacili. They were married on August 24, 2004.
This marriage was celebrated 4 months after Eulogios first
wife died on May 2004. On February, 2005, or six months
after his second marriage, Eulogio died.
The respondents are Eulogios heirs and seek a declaration of
nullity of the marriage of Petitioner Lolita and Eulogio on the
ground that the marriage was celebrated without a valid
marriage license. And that 5-year cohabitation exception could
not apply since Eulogio was a bachelor for only 4 months.
Petitioner answered the complaint and alleged that they have
been living as husband and wife for 21 years as in fact they
had 2 children. Further, petitioner contended that it is only
the contracting parties while living can file an action for
declaration of nullity of their marriage.
RTC dismissed the complaint but on reconsideration
reinstated the case. Petitioner Enrico directly filed for Rule 65
in the SC.
ISSUE: Do the heirs have standing to file the action for the
declaration of nullity?
RULING: No. SC grants the petition and dismisses the petition
for declaration of nullity filed by the heirs.
First, Void marriages solemnized under the Family Code are
governed by the A.M. 02-11-10 of the SC, that is, marriages
entered into on and after August 3, 1988. The A.M. of the SC
provides that a petition for declaration of absolute nullity of
void marriage may be filed solely by the husband or the wife.
It is clear. Thus, the heirs have no standing. Case is
dismissed.

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Second, as to the Ninal v. Badayog ruling that allows

heirs to file a petition for declaration of nullity, this applies
only to those marriages under the Civil Code.
What is the remedy now of the heirs? Remember that a void
marriage can be collaterally attacked; hence since they only
seek to protect their property rights they can always impugn
the legitimacy of the marriage of petitioner and their father in
the proceeding for the settlement of the estate of their
deceased father.
WHEREFORE, the Petition is GRANTED. Civil Case No.
II-4057 filed before the Regional Trial Court of Aparri,
Cagayan, Branch 6, is ORDERED DISMISSED without
prejudice to challenging the validity of the marriage of Lolita
D. Enrico to Eulogio B. Medinaceli in a proceeding for the
settlement of the estate of the latter. No costs.

DANILO ALUAD, LEONORA ALUAD, DIVINA ALUAD,

PROSPERO ALUAD, AND CONNIE ALUAD
VERSUS
ZENAIDA ALUAD
G.R. NO. 176943, OCTOBER 17, 2008
PONENTE: JUSTICE CARPIO MORALES
FACTS: Petitioners mother, Maria Aluad (Maria), and
respondent Zenaido Aluad were raised by the childless
spouses Matilde Aluad (Matilde) and Crispin Aluad
(Crispin).Crispin was the owner of six lots identified as Lot
Nos. 674, 675, 676, 677, 680, and 682 of the Pilar Cadastre,
Capiz. After Crispin died, his wife Matilde adjudicated the lots
to herself.
On November 14, 1981, Matilde executed a document
entitled Deed of Donation of Real Property Inter Vivos (Deed
of Donation) in favor of petitioners mother Maria covering all
the six lots which Matilde inherited from her husband
Crispin.
On September 30, 1986, Original Certificates of Title over
Lot Nos. 674 and 676 were issued in Matildes name.
On August 26, 1991, Matilde sold Lot No. 676 to respondent by
a Deed of Absolute Sale of Real Property.
Subsequently or on January 14, 1992, Matilde executed a
last will and testament, devising Lot Nos. 675, 677, 682, and
680 to Maria, and her remaining properties including Lot

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No. 674 to respondent. Matilde died on January 25, 1994,

while Maria died on September 24 of the same year.
On August 21, 1995, Marias heirs-herein petitioners filed
before the Regional Trial Court (RTC) of Roxas City a
Complaint, for declaration and recovery of ownership and
possession of Lot Nos. 674 and 676, and damages against
respondent.
The trial court, by Decision of September 20, 1996, held
that Matilde could not have transmitted any right over Lot
Nos. 674 and 676 to respondent, she having previously
alienated them to Maria via the Deed of Donation. By
Decision of August 10, 2006, the Court of Appeals reversed the
trial courts decision, it holding that the Deed of Donation was
actually a donation mortis causa, not inter vivos, and as such
it had to, but did not, comply with the formalities of a
will. Thus, it found that the Deed of Donation was witnessed
by only two witnesses and had no attestation clause which is
not in accordance with Article 805 of the Civil Code.
ISSUE: Whether or not the Deed of Donation is a donation
mortis causa and have complied with the formalities of a
will?
RULING: The Deed of Donation which is one of mortis causa.
The donation being then mortis causa, the formalities of a will
should have been observedbut they were not, as it was
witnessed by only two, not three or more witnesses following
Article 805 of the Civil Code.Further, the witnesses did not
even sign the attestation clausethe execution of which clause
is a requirement separate from the subscription of the will and
the affixing of signatures on the left-hand margins of the
pages of the will.

JARABINI G. DEL ROSARIO

VERSUS
SUNCION G. FERRER, SUBSTITUTED BY HER HEIRS, VICENTE,
PILAR, ANGELITO, FELIXBERTO, JR., ALL SURNAMED G.
FERRER, AND MIGUELA FERRER ALTEZA
G.R. NO. 187056. SEPTEMBER 20, 2010
PONENTE: JUSTICE ABAD
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FACTS: On August 27, 1968 the spouses Leopoldo and

Guadalupe Gonzales executed a document entitled Donation
Mortis Causa in favor of their two children, Asuncion and
Emiliano, and their granddaughter Jarabini (daughter of their
predeceased son, Zoilo) covering the spouses 126-square
meter lot and the house on it in Pandacan, Manila in equal
shares.
Although denominated as a donation mortis causa which
in law is the equivalent of a will, the deed had no attestation
clause and was witnessed by only two persons. The named
donees, however, signified their acceptance of the donation on
the face of the document. Guadalupe, the donor wife, died in
September 1968. A few months later or on December 19,
1968, Leopoldo, the donor husband, executed a deed of
assignment of his rights and interests in subject property to
their daughter Asuncion. Leopoldo died in June 1972.
In 1998 Jarabini filed a petition for the probate of the
August 27, 1968 deed of donation mortis causa
before the Regional Trial Court(RTC) of Manila in Sp. Proc. 9890589. Asuncion opposed the petition invoking his father
Leopoldos assignment of his rights and interests in the
property to her.
After trial, the RTC rendered a decision dated June 20,
2003, finding that the donation was in fact one made inter
vivos, the donors intention being to transfer title over the
property to the donees during the donors lifetime, given its
irrevocability. Consequently,
said the RTC, Leopoldos
subsequent assignment of his rights and interest in the
property was void since he had nothing to assign. The RTC
thus directed the registration of the property in the name of
the donees in equal shares.
The Court of Appeals reversed RTCs decision and held
that Jarabini cant through her petition for the probate of the
deed of donation mortis causa, collaterally attack Leopoldos
deed of assignment in Asuncions favor. The CA further held
that, since no proceeding exists for the allowance of what
Jarabini claimed was actually a donation inter vivos, the RTC
erred in deciding the case the way it did. Finally, the CA held
that the donation, being one given mortis causa, did not
comply with the requirements of a notarial will rendering
the same void.
ISSUE: Whether or not the document is a donation mortis
causa or donation inter vivos?
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RULING: The document is one of a donation inter vivos. The

Court held that irrevocability is a quality absolutely
incompatible with the idea of conveyances mortis causa, where
revocability is precisely the essence of the act. A donation
mortis causa has the following characteristics:
1 It conveys no title or ownership to the transferee before th
e death of the transferor; or, what amounts to the same
thing, that the transferor should retain the ownership
(full or naked) and control of the property while alive;
2 That before his death, the transfer should be revocable by
the transferor at will, ad nutum; but revocability may be
provided for indirectly by means of a reserved power in
the donor to dispose of the properties conveyed; and
3 That the transfer should be void if the transferor should s
urvivethe transferee.
The express irrevocability of the donation is the
distinctive standard that identifies the document as a
donation inter vivos. Here, the donors plainly said that it is
our will that this Donation Mortis Causa shall be irrevocable
and shall be respected by the surviving spouse. The intent
to make the donation irrevocable becomes even clearer by the
proviso that a surviving donor shall respect their revocability
of the donation. Consequently, the donation was in reality a
donation inter vivos.
The donors in this case of course reserved the right,
ownership, possession, and administration of the property
and made the donation operative upon their death. But this
Court has consistently held that such reservation (reddendum)
in the context of an irrevocable donation simply means that
the donors parted with their naked title, maintaining only
beneficial ownership of the donated property while they lived.
Notably, the three donees signed their acceptance of the
donation, which acceptance the deed required. This Court has
held that an acceptance clause indicates that the donation is
inter vivos, since acceptance is a requirement only for
such kind of donations. Donations mortis causa, being in the
form of a will, need not be accepted by the donee during the
donors lifetime.
Finally, as Justice J. B. L. Reyes said in Puig v.
Peaflorida, in case of doubt, the conveyance should be
deemed a donation inter vivos rather than mortis causa, in

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order to avoid uncertainty as to the ownership of the property

subject of the deed.
Since the donation in this case was one made inter vivos,
it was immediately operative and final. The reason is that such
kind of donation is deemed perfected from the moment the
donor learned of the donees acceptance of the donation. The
acceptance makes the donee the absolute owner of the
property donated.
Given that the donation in this case was irrevocable or
one given inter vivos, Leopoldos subsequent assignment of his
rights and interests in the property to Asuncion should be
regarded as void for, by then, he had no more rights to
assign. He could not give what he no longer had. Nemo dat
quod non habet.
Ergo, the trial court cannot be faulted for passing upon,
in a petition for probate of what was initially supposed to be a
donation mortis causa, the validity of the document as a
donation inter vivos and the nullity of one of the donors
subsequent assignment of his rights and interests in the
property. The Court has held before that the rule on probate is
not inflexible and absolute. Moreover, in opposing the petition
for probate and in putting the validity of the deed
of assignment squarely in issue, Asuncion or those who
substituted her may not now claim that the trial court
improperly allowed a collateral attack on such assignment.

DKC HOLDINGS CORPORATION

VERSUS
COURT OF APPEALS, VICTOR U. BARTOLOME AND
REGISTER OF DEEDS FOR METRO MANILA, DISTRICT III
G.R. NO. 118248. APRIL 5, 2000
PONENTE: JUSTICE YNARES SANTIAGO
FACTS: On March 16, 1988, petitioner entered into a Contract
of Lease with Option to Buy with Encarnacion Bartolome,
whereby petitioner was given the option to lease or lease with
purchase the subject land, which option must be exercised
within a period of two years counted from the signing of the
Contract. In turn, petitioner undertook to pay P3,000.00 a
month as consideration for the reservation of its option.
Within the two-year period, petitioner shall serve formal
written notice upon the lessor Encarnacion Bartolome of its
desire to exercise its option. The contract also provided that in
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case petitioner chose to lease the property, it may take actual

possession of the premises. In such an event, the lease shall
be for a period of six years, renewable for another six years,
and the monthly rental fee shall be P15,000.00 for the first six
years and P18,000.00 for the next six years, in case of
renewal.
On March 14, 1990, petitioner served upon Victor, via
registered mail, notice that it was exercising its option to lease
the property, tendering the amount of P15,000.00 as rent for
the month of March. Again, Victor refused to accept the
tendered rental fee and to surrender possession of the
property to petitioner. Petitioner thus opened Savings Account
No. 1-04-02558-I-1 with the China Banking Corporation,
Cubao Branch, in the name of Victor Bartolome and deposited
therein the P15,000.00 rental fee for March as well as
P6,000.00 reservation fees for the months of February and
March.
On April 23, 1990, petitioner filed a complaint for specific
performance and damages against Victor and the Register of
Deeds.
ISSUE: Whether or not the Contract of Lease with Option
to Buy entered into by the late Encarnacion Bartolome
with petitioner was terminated upon her death or whether
it binds her sole heir, Victor, even after her demise?
RULING: As early as 1903, it was held that "(H)e who
contracts does so for himself and his heirs." In 1952, it was
ruled that if the predecessor was duty-bound to reconvey land
to another, and at his death the reconveyance had not been
made, the heirs can be compelled to execute the proper deed
for reconveyance. This was grounded upon the principle that
heirs cannot escape the legal consequence of a transaction
entered into by their predecessor-in-interest because they have
inherited the property subject to the liability affecting their
common ancestor.
It is futile for Victor to insist that he is not a party to the
contract because of the clear provision of Article 1311 of the
Civil Code. Indeed, being an heir of Encarnacion, there is
privity of interest between him and his deceased mother. He
only succeeds to what rights his mother had and what is valid
and binding against her is also valid and binding as against
him. Clearly, he stepped into the shoes of the owner-lessor of
the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he
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received benefits in the form of rental payments. Furthermore,

the complaint, as well as the petition, prayed for the
annulment of the sale of the properties to him. Both pleadings
also alleged collusion between him and respondent Santos
which defeated the exercise by petitioner of its right of first
refusal.
The death of a party does not excuse nonperformance of
a contract which involves a property right and the rights and
obligations thereunder pass to the personal representatives of
the deceased. Similarly, nonperformance is not excused by the
death of the party when the other party has a property
interest in the subject matter of the contract.

ESTATE OF ORLANDO LLENADO AND WENIFREDA T.

LLENADO, IN HER CAPACITY AS (A) ADMINISTRATRIX OF THE
ESTATE OF ORLANDO A. LLENADO AND (B) JUDICIAL GUARDIAN OF
THE MINOR CHILDREN OF ORLANDO A. LLENADO, AND (C) IN HER
OWN BEHALF AS THE SURVIVING SPOUSE AND LEGAL HEIR
OF ORLANDO A. LLENADO
VERSUS
EDUARDO LLENADO, JORGE LLENADO, FELIZA
GALLARDO VDA. DE LLENADO AND REGISTER
OF DEEDS OF VALENZUELA CITY METRO MANILA
G.R. NO. 145736, MARCH 4, 2009
ASSOCIATE JUSTICE YNARES-SANTIAGO
FACTS: The subject of the controversy IS A parcel of land
located consisting of 1,554 square meters located in Barrio
Malinta, Valenzuela, Metro Manila and registered in the names
of Eduardo Llenado (Eduardo) and Jorge Llenado (Jorge) under
Transfer of Certificate of Title (TCT) No. V-1689.This land was
once part of another lot owned and registered under the name
of their father, Cornelio Llenado.The latter leased Lot 491_D to
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his nephew Romeo Llenado foe 5 years renewable for another 5

years.Romeo in turn, executed an agreement with his cousin
Orlando Llenado whereby Romeo assigned all his rights
to Orlando over the unexpired portion of the aforesaid lease
contract with an additional agreement that at Orlandos option
the lease can be extended for another 3 years.Cornello and
Orlando entered into another supplementary agreement to
amend the lease contract.A gasoline station was operated in
the land.After the death of Orlando in Orlando on November 7,
1983, his wife, Wenifreda Llenado (Wenifreda), took over the
operation of the gasoline station. Meanwhile, on January 29,
1987, Cornelio sold Lot 249-D to his children, namely,
Eduardo, Jorge, Virginia and Cornelio, Jr., through a deed of
sale, denominated as Kasulatan sa Ganap Na Bilihan, for the
sum of P160,000.00. Eduardo informed the widow of his
desire to take over the land,but despite repeated demands the
widoe refused.An unlawful detainer case was filed against
Winifreda as administrator of the estate of her husband.In her
answer the widow cited that there was an agreement between
Cornelio and Orlando that while the lease was effective the
transfer and conveyance of the subject lot by Cornelio in favor
of respondents Eduardo and Jorge, was fraudulent and in bad
faith considering that the March 31, 1978 Agreement provided
that while the lease is in force, the subject lot cannot be sold,
transferred or conveyed to any third party; that the period of
the lease was until December 3, 1987 with the option to renew
granted to Orlando; that the subject lot was transferred and
conveyed to respondents Eduardo and Jorge on January 29,
1987 when the lease was in full force and effect making the
sale null and void. The RTC found that upon the death
of Orlando on November 7, 1983, his rights under the lease
contract were transmitted to his heirs; that since the lease was
in full force and effect at the time the subject lot was sold by
Cornelio to his sons, the sale violated the prohibitory clause in
the said lease contract. Further, Cornelios promise to sell the
subject lot to Orlando may be established by parole evidence
since an option to buy is not covered by the statute of
frauds. Hence, the same is binding on Cornelio and his heirs.
The CA reversed the RTC holding that the death
of Orlando did not extinguish the lease agreement and had the
effect of transmitting his lease rights to his heirs. However,
the breach of the non-alienation clause of the said agreement
did not nullify the sale between Cornelio and his sons because
the heirs of Orlando are mere lessees on the subject lot and
can never claim a superior right of ownership over said lot as
against the registered owners thereof.
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ISSUE: Whether or not the rights of the deceased as lessee

of the land was transmitted to the hence the heirs of the
lessor are bound by the lease contract.
RULING: YES. Article 1311 of the Civil Code, the heirs are
bound by the contracts entered into by their predecessors-ininterest except when the rights and obligations therein are not
transmissible by their nature, by stipulation or by provision of
law. A contract of lease is, therefore, generally transmissible to
the heirs of the lessor or lessee. It involves a property right
and, as such, the death of a party does not excuse nonperformance of the contract. The rights and obligations pass
to the heirs of the deceased and the heir of the deceased lessor
is bound to respect the period of the lease. The same principle
applies to the option to renew the lease. As a general rule,
covenants to renew a lease are not personal but will run with
the land. Consequently, the successors-in-interest of the
lessee are entitled to the benefits, while that of the lessor are
burdened with the duties and obligations, which said
covenants conferred and imposed on the original
parties.Hirsowever the records do not show that the heirs of
Orlando exercised the right to renew and extend the lease
because at the time of said sale on January 29, 1987 the lease
agreement had long been terminated for failure of Orlando or
his heirs to validly renew the same. As a result, there was no
obstacle to the sale of the subject lot by Cornelio to
respondents Eduardo and Jorge as the prohibitory clause
under the lease contract was no longer in force.

JESUS SAN AGUSTIN

VERSUS
HON. COURT OF APPEALS AND MAXIMO MENEZ, JR.
G.R. NO. 121940. DECEMBER 4, 2001
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FACTS: On February 11, 1974, the Government Service

Insurance System (GSIS) sold to a certain Macaria Vda. de
Caiquep, a parcel of residential land with an area of 168
square meters located in Rosario, Pasig City. A day after We
issuance of TCT No. 436465, or on February 20, 1974,
Macaria Vda. de Caiquep sold the subject lot to private
respondent, Maximo Menez, Jr. In December of 1990, he
discovered that the subject TCT was missing. He consulted a
lawyer but the latter did not act immediately on the matter.
Upon consulting a new counsel, an Affidavit of Loss was filed
with the Register of Deeds of Pasig and a certified copy of TCT
No. 436465 was issued. Private respondent sent notices to the
registered owner at her address appearing in the title and in
the Deed of Sale. And, with his counsel, he searched for the
,registered owner in Metro Manila and Rizal and as far as
Samar, Leyte, Calbayog City, Tacloban City, and in Eastern and
Northern Samar. However, their search proved futile. On July
8, 1992 private respondent filed a petition with the RTC,
Branch 154, Pasig, Metro Manila for the issuance of owner's
duplicate copy of TCT No. 436465 to replace the lost one. To
show he was the owner of the contested lot, he showed the
Deed of Absolute Sale. The petition was set for hearing and the
court's order dated July 10, 1992 was published once in
Malaya, a
nationally
circulated newspaper
in
the
Philippines.During the hearing on September 3, 1992, only
Menez and his counsel appeared. The Register of Deeds who
was not served notice, and the Office of the Solicitor General
and the Provincial Prosecutor who were notified did not attend.
On September 18, 1992, there being no opposition,
Menez presented his evidence ex-parte. The trial court granted
his petition in its decision dated September 30, 1992, the
dispositive portion of which reads: On October 13, 1992,
herein petitioner, Jesus San Agustin, received a copy of the
abovecited decision. He-claimed this was the first time he
became aware of the case of her aunt, Macaria Vda. de
Caiquep who, according to him, died sometime in 1974.
Claiming that he was the present occupant of the property and
the heir of Macaria, he filed his "Motion to Reopen
Reconstitution Proceedings'' on October 27, 1992. On
December 3, 1992, RTC issued an order denying said motion.
ISSUE: Is petitioner entitled to notice?

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RULING: No. Petitioner does not appear to have an interest in

the property based on the memorandum of encumbrances
annotated at the back of the title. His claim, that he is an heir
(nephew) of the original owner of the lot covered by the
disputed lot and the present occupant thereof is not annotated
in the said memorandum of encumbrances.
There was
compliance by private respondent of the RTC's order of
publication of the petition in a newspaper of general
circulation. This is sufficient notice of the petition to the
public at large.
The court agreed with respondent court that the
proscription under Com. Act No. 141 on sale within the 5-year
restrictive period refers to homestead lands only. Here the lot
in dispute is not a homestead land, as found by the trial and
appellate courts. Said lot is owned by GSIS, under TCT No.
10028 in its proprietary capacity. Moreover, as far as the
violation of the 5-year restrictive condition imposed by GSIS in
its contract with petitioner's predecessor-in-interest is
concerned, it is the GSIS and not petitioner who had a cause
of action against private respondent. The GSIS has not filed
any action for the annulment of Exhibit "D", nor for the
forfeiture of the lot in question. In our view, the contract of
sale remains valid between the parties, unless and until
annulled in the proper suit filed by the rightful party, the
GSIS. For now, the said contract of sale is binding upon the
heirs of Macaria Vda. de Caiquep, including petitioner who
alleges to be one of her heirs, in line with the rule that heirs
are bound by contracts entered into by their predecessors-ininterest.

MAURICIO SAYSON, ROSARIO SAYSON-MALONDA,

BASILISA SAYSON-LIRIO, REMEDIOS SAYSON-REYES AND
JUANA C. BAUTISTA
VERSUS
THE HONORABLE COURT OF APPEALS, DELIA SAYSON,
ASSISTED BY HER HUSBAND, CIRILO CEDO, JR., EDMUNDO
SAYSON AND DORIBEL SAYSON
GR NOS. 89224-25 JANUARY 23, 1992
ASSOCIATE JUSTICE CRUZ
FACTS:: Eleno and Rafaela Sayson begot five children, namely,
Mauricio, Rosario, Basilisa, Remedios and Teodoro. Eleno died
on November 10, 1952, and Rafaela on May 15,1976. Teodoro,
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who had married Isabel Bautista, died on March 23, 1972. His
wife died nine years later. Their properties were left in the
possession of Delia, Edmundo, and Doribel, all surnamed
Sayson, who claim to be their children.
Mauricio, Rosario, Basilisa, and Remedios, together with
Juana C. Bautista, Isabel's mother, filed a complaint for
partition and accounting of the intestate estate of Teodoro and
Isabel Sayson. Delia, Edmundo and Doribel filed their own
complaint, this time for the accounting and partition of the
intestate estate of Eleno and Rafaela Sayson, against the
couple's four surviving children.
Both cases filed on the Lower Court were decided in favor
Delia, et al. on the basis of practically the same evidence. The
Lower Court declared that Delia and Edmundo were the legally
adopted children of Teodoro and Isabel Sayson by virtue of the
decree of adoption. Doribel was their legitimate daughter as
evidenced by her birth certificate. Consequently, the three
children were entitled to inherit from Eleno and Rafaela by
right of representation.
Both cases were appealed to the Court of Appeals, where
they were consolidated. The appellate court affirmed that
Delia, et al. are entitled to the intestate estate of spouses
Teodoro and Isabel Sayson. However, Delia and Edmundo are
disqualified from inheriting from the estate of the deceased
spouses Eleno and Rafaela Sayson.
ISSUE: Whether or not CA is correct in holding that Delia
and Edmundo are disqualified to inherit from the estate of
the deceased spouses Eleno and Rafaela Sayson?
RULING: A different conclusion must be reached in the case of
Delia and Edmundo, to whom the grandparents were total
strangers. While it is true that the adopted child shall be
deemed to be a legitimate child and have the same right as the
latter, these rights do not include the right of representation.
The relationship created by the adoption is between only the
adopting parents and the adopted child and does not extend to
the blood relatives of either party.
In sum, we agree with the lower courts that Delia and
Edmundo as the adopted children and Doribel as the
legitimate daughter of Teodoro Sayson and Isabel Bautista, are
their exclusive heirs and are under no obligation to share the
estate of their parents with the petitioners. The Court of
Appeals was correct, however, in holding that only Doribel has
the right of representation in the inheritance of her
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grandparents' intestate estate, the other private respondents

being only the adoptive children of the deceased Teodoro.
WHEREFORE, the petition is DENIED, and the
challenged decision of the Court of Appeals is AFFIRMED in
toto, with costs against the petitioners.

LAZARO PASCO AND LAURO PASCO

VERSUS
HEIRS OF FILOMENA DE GUZMAN, REPRESENTED BY
CRESENCIA DE GUZMAN- PRINCIPE
G.R. NO. 165554, JULY 26, 2010
ASSOCIATE JUSTICE DEL CASTILLO

FACTS: Herein respondents alleged that on February 7, 1997,

petitioners obtained a loan in the amount of P140,000.00 from
Filomena (now deceased). To secure the petitioners loan, Lauro
executed a chattel mortgage on his Isuzu Jeep in favor of
Filomena. Upon her death, her heirs sought to collect from the
petitioners, to no avail. Thus, respondents were constrained to file
the collection case.
Meanwhile,Filomenas heirs, authorized Cresencia to act as
their attorney-in-fact through a Special Power of Attorney. During
the pre-trial, the parties agreed verbally and submitted a
Compromise Agreement to the courts where the petitioners
admitted the loan accommodation extended to Lauro.
Petitioners however, raised the validity of the agreement
contending that they were not fully informed of the nature and
consequences of the agreement and that Crescencia had no
authority to represent her co-heirs because Filomenas estate
had a personality of its own.
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ISSUE: Whether the Special Power of Attorney is valid?

RULING: Yes. In Trinidad case, the heirs of Vicente Trinidad
executed a SPA in favor of Nenita Trinidad (Nenita) to be their
representative in litigation involving the sale of real property
covered by the decedents estate. As here, there was no specific
authority to enter into a Compromise Agreement. When a
compromise agreement was finally reached, the heirs later sought
to invalidate it, claiming that Nenita was not specifically
authorized to enter into the compromise agreement. We held
then, as we do now, that the SPA necessarily included the power
of the attorney-in-fact to compromise the case, and that Nenitas
co-heirs
could
not
belatedly
disavow
their
original
authorization. This ruling is even more significant here, where the
co-heirs have not taken any action to invalidate the Compromise
Agreement or assail their SPA.
Moreover, it
is noteworthy
that petitioners never
assailed the validity of the SPA during the pre-trial stage prior to
entering the Compromise Agreement. This matter was never even
raised as a ground in petitioners Motion to Set Aside the
compromise, or in the initial Petition before the RTC. It was only
months later, in December 2002, that petitioners rather selfservingly - claimed that the SPA was insufficient.
WHEREFORE, the petition is DENIED.

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