Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4963

January 29, 1953

MARIA USON, plaintiff-appellee,

vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA,
DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr., defendants-appellants.
Priscilo Evangelista for appellee.
Brigido G. Estrada for appellant.
BAUTISTA ANGELO, J.:
This is an action for recovery of the ownership and possession of five (5) parcels of land situated
in the Municipality of Labrador, Province of Pangasinan, filed by Maria Uson against Maria del
Rosario and her four children named Concepcion, Conrado, Dominador, and Faustino,
surnamed Nebreda, who are all of minor age, before the Court of First Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands
involved in this litigation. Faustino Nebreda left no other heir except his widow Maria Uson.
However, plaintiff claims that when Faustino Nebreda died in 1945, his common-law wife
Maria del Rosario took possession illegally of said lands thus depriving her of their possession
and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson and
her husband, the late Faustino Nebreda, executed a public document whereby they agreed to
separate as husband and wife and, in consideration of their separation, Maria Uson was given a
parcel of land by way of alimony and in return she renounced her right to inherit any other
property that may be left by her husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the court rendered
decision ordering the defendants to restore to the plaintiff the ownership and possession of the
lands in dispute without special pronouncement as to costs. Defendants interposed the present
appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda,
former owner of the five parcels of lands litigated in the present case. There is likewise no
dispute that Maria del Rosario, one of the defendants-appellants, was merely a common-law
wife of the late Faustino Nebreda with whom she had four illegitimate children, her now codefendants. It likewise appears that Faustino Nebreda died in 1945 much prior to the effectivity
of the new Civil Code. With this background, it is evident that when Faustino Nebreda died in
1945 the five parcels of land he was seized of at the time passed from the moment of his death

to his only heir, his widow Maria Uson (Article 657, old Civil Code).As this Court aptly said,
"The property belongs to the heirs at the moment of the death of the ancestor as completely as if
the ancestor had executed and delivered to them a deed for the same before his death"
(Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment, therefore, the rights of
inheritance of Maria Uson over the lands in question became vested.
The claim of the defendants that Maria Uson had relinquished her right over the lands in
question because she expressly renounced to inherit any future property that her husband may
acquire and leave upon his death in the deed of separation they had entered into on February
21, 1931, cannot be entertained for the simple reason that future inheritance cannot be the
subject of a contract nor can it be renounced (1 Manresa, 123, sixth edition; Tolentino on Civil
Code, p. 12; Osorio vs. Osorio and Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are illegitimate
children of the late Faustino Nebreda and under the old Civil Code are not entitled to any
successional rights, however, under the new Civil Code which became in force in June, 1950,
they are given the status and rights of natural children and are entitled to the successional rights
which the law accords to the latter (article 2264 and article 287, new Civil Code), and because
these successional rights were declared for the first time in the new code, they shall be given
retroactive effect even though the event which gave rise to them may have occurred under the
prior legislation (Article 2253, new Civil Code).
There is no merit in this claim. Article 2253 above referred to provides indeed that rights which
are declared for the first time shall have retroactive effect even though the event which gave rise
to them may have occurred under the former legislation, but this is so only when the new rights
do not prejudice any vested or acquired right of the same origin. Thus, said article provides that
"if a right should be declared for the first time in this Code, it shall be effective at once, even
though the act or event which gives rise thereto may have been done or may have occurred
under the prior legislation, provided said new right does not prejudice or impair any vested or
acquired right, of the same origin." As already stated in the early part of this decision, the right
of ownership of Maria Uson over the lands in question became vested in 1945 upon the death of
her late husband and this is so because of the imperative provision of the law which commands
that the rights to succession are transmitted from the moment of death (Article 657, old Civil
Code). The new right recognized by the new Civil Code in favor of the illegitimate children of
the deceased cannot, therefore, be asserted to the impairment of the vested right of Maria Uson
over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was lying in state, in a
gesture of pity or compassion, agreed to assign the lands in question to the minor children for
the reason that they were acquired while the deceased was living with their mother and Maria
Uson wanted to assuage somewhat the wrong she has done to them, this much can be said;
apart from the fact that this claim is disputed, we are of the opinion that said assignment, if any,
partakes of the nature of a donation of real property, inasmuch as it involves no material
consideration, and in order that it may be valid it shall be made in a public document and must
be accepted either in the same document or in a separate one (Article 633, old Civil Code).
Inasmuch as this essential formality has not been followed, it results that the alleged assignment
or donation has no valid effect.

WHEREFORE, the decision appealed from is affirmed, without costs.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and Labrador, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

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

TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, administrator-appellee; JOSE
DE BORJA, as administrator, CAYETANO DE BORJA, MATILDE DE BORJA and
CRISANTO DE BORJA (deceased) as Children of Josefa Tangco, appellees,
vs.
TASIANA VDA. DE DE BORJA, Special Administratrix of the Testate Estate of Francisco de
Borja,appellant. .
G.R. No L-28568 August 18, 1972
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA. DE DE
BORJA, special Administratrix appellee,
vs.
JOSE DE BORJA, oppositor-appellant.
G.R. No. L-28611 August 18, 1972
TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate Estate of the late Francisco
de Borja,plaintiff-appellee,
vs.
JOSE DE BORJA, as Administrator of the Testate Estate of the late Josefa Tangco, defendantappellant.
L-28040
Pelaez, Jalandoni & Jamir for administrator-appellee.
Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
L-28568

Sevilla & Aquino for special administratrix-appellee.

Pelaez, Jalandoni & Jamir for oppositor-appellant.
L-28611
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant.

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

Of these cases, the first, numbered L-28040 is an appeal by Tasiana Ongsingco Vda. de de Borja,
special administratrix of the testate estate of Francisco de Borja, 1 from the approval of a
compromise agreement by the Court of First Instance of Rizal, Branch I, in its Special
Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco, Jose de Borja, Administrator".
Case No. L-28568 is an appeal by administrator Jose Borja from the disapproval of the same
compromise agreement by the Court of First Instance of Nueva Ecija, Branch II, in its Special
Proceeding No. 832, entitled, "Testate Estate of Francisco de Borja, Tasiana O. Vda. de de Borja,
Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de Borja from the decision of the
Court of First Instance of Rizal, Branch X, in its Civil Case No. 7452, declaring the Hacienda
Jalajala Poblacion, which is the main object of the aforesaid compromise agreement, as the
separate and exclusive property of the late Francisco de Borja and not a conjugal asset of the
community with his first wife, Josefa Tangco, and that said hacienda pertains exclusively to his
testate estate, which is under administrator in Special Proceeding No. 832 of the Court of First
Instance of Nueva Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his wife Josefa Tangco on 6 October
1940, filed a petition for the probate of her will which was docketed as Special Proceeding No.
R-7866 of the Court of First Instance of Rizal, Branch I. The will was probated on 2 April 1941. In
1946, Francisco de Borja was appointed executor and administrator: in 1952, their son, Jose de
Borja, was appointed co-administrator. When Francisco died, on 14 April 1954, Jose became the
sole administrator of the testate estate of his mother, Josefa Tangco. While a widower Francisco
de Borja allegedly took unto himself a second wife, Tasiana Ongsingco. Upon Francisco's death,
Tasiana instituted testate proceedings in the Court of First Instance of Nueva Ecija, where, in
1955, she was appointed special administratrix. The validity of Tasiana's marriage to Francisco
was questioned in said proceeding.
The relationship between the children of the first marriage and Tasiana Ongsingco has been
plagued with several court suits and counter-suits; including the three cases at bar, some
eighteen (18) cases remain pending determination in the courts. The testate estate of Josefa
Tangco alone has been unsettled for more than a quarter of a century. In order to put an end to

all these litigations, a compromise agreement was entered into on 12 October 1963, 2 by and
between "[T]he heir and son of Francisco de Borja by his first marriage, namely, Jose de Borja
personally and as administrator of the Testate Estate of Josefa Tangco," and "[T]he heir and
surviving spouse of Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de
Borja, assisted by her lawyer, Atty. Luis Panaguiton Jr." The terms and conditions of the
compromise agreement are as follows:
AGREEMENT
THIS AGREEMENT made and entered into by and between
The heir and son of Francisco de Borja by his first marriage, namely, Jose de Borja
personally and as administrator of the Testate Estate of Josefa Tangco,
AND
The heir and surviving spouse of Francisco de Borja by his second marriage,
Tasiana Ongsingco Vda. de Borja, assisted by her lawyer, Atty. Luis Panaguiton
Jr.
WITNESSETH
THAT it is the mutual desire of all the parties herein terminate and settle, with
finality, the various court litigations, controversies, claims, counterclaims, etc.,
between them in connection with the administration, settlement, partition,
adjudication and distribution of the assets as well as liabilities of the estates of
Francisco de Borja and Josefa Tangco, first spouse of Francisco de Borja.
THAT with this end in view, the parties herein have agreed voluntarily and
without any reservations to enter into and execute this agreement under the
following terms and conditions:
1. That the parties agree to sell the Poblacion portion of the Jalajala properties
situated in Jalajala, Rizal, presently under administration in the Testate Estate of
Josefa Tangco (Sp. Proc. No. 7866, Rizal), more specifically described as follows:
Linda al Norte con el Rio Puwang que la separa de la jurisdiccion
del Municipio de Pililla de la Provincia de Rizal, y con el pico del
Monte Zambrano; al Oeste con Laguna de Bay; por el Sur con los
herederos de Marcelo de Borja; y por el Este con los terrenos de la
Familia Maronilla
with a segregated area of approximately 1,313 hectares at the amount of P0.30
per square meter.
2. That Jose de Borja agrees and obligates himself to pay Tasiana Ongsingco Vda.
de de Borja the total amount of Eight Hundred Thousand Pesos (P800,000)

Philippine Currency, in cash, which represent P200,000 as his share in the

payment and P600,000 as pro-rata shares of the heirs Crisanto, Cayetano and
Matilde, all surnamed de Borja and this shall be considered as full and complete
payment and settlement of her hereditary share in the estate of the late Francisco
de Borja as well as the estate of Josefa Tangco, Sp. Proc. No. 832-Nueva Ecija and
Sp. Proc. No. 7866-Rizal, respectively, and to any properties bequeathed or
devised in her favor by the late Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or purportedly conveyed to her for
consideration or otherwise. The funds for this payment shall be taken from and
shall depend upon the receipt of full payment of the proceeds of the sale of
Jalajala, "Poblacion."
3. That Tasiana Ongsingco Vda. de de Borja hereby assumes payment of that
particular obligation incurred by the late Francisco de Borja in favor of the
Rehabilitation Finance Corporation, now Development Bank of the Philippines,
amounting to approximately P30,000.00 and also assumes payment of her 1/5
share of the Estate and Inheritance taxes on the Estate of the late Francisco de
Borja or the sum of P3,500.00, more or less, which shall be deducted by the buyer
of Jalajala, "Poblacion" from the payment to be made to Tasiana Ongsingco Vda.
de Borja under paragraph 2 of this Agreement and paid directly to the
Development Bank of the Philippines and the heirs-children of Francisco de
Borja.
4. Thereafter, the buyer of Jalajala "Poblacion" is hereby authorized to pay
directly to Tasiana Ongsingco Vda. de de Borja the balance of the payment due
her under paragraph 2 of this Agreement (approximately P766,500.00) and issue
in the name of Tasiana Ongsingco Vda. de de Borja, corresponding certified
checks/treasury warrants, who, in turn, will issue the corresponding receipt to
Jose de Borja.
5. In consideration of above payment to Tasiana Ongsingco Vda. de de Borja,
Jose de Borja personally and as administrator of the Testate Estate of Josefa
Tangco, and Tasiana Ongsingco Vda. de de Borja, for themselves and for their
heirs, successors, executors, administrators, and assigns, hereby forever mutually
renounce, withdraw, waive, remise, release and discharge any and all manner of
action or actions, cause or causes of action, suits, debts, sum or sums of money,
accounts, damages, claims and demands whatsoever, in law or in equity, which
they ever had, or now have or may have against each other, more specifically Sp.
Proceedings Nos. 7866 and 1955, CFI-Rizal, and Sp. Proc. No. 832-Nueva Ecija,
Civil Case No. 3033, CFI Nueva Ecija and Civil Case No. 7452-CFI, Rizal, as well
as the case filed against Manuel Quijal for perjury with the Provincial Fiscal of
Rizal, the intention being to completely, absolutely and finally release each other,
their heirs, successors, and assigns, from any and all liability, arising wholly or
partially, directly or indirectly, from the administration, settlement, and
distribution of the assets as well as liabilities of the estates of Francisco de Borja
and Josefa Tangco, first spouse of Francisco de Borja, and lastly, Tasiana

Ongsingco Vda. de de Borja expressly and specifically renounce absolutely her

rights as heir over any hereditary share in the estate of Francisco de Borja.
6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the payment under
paragraph 4 hereof, shall deliver to the heir Jose de Borja all the papers, titles and
documents belonging to Francisco de Borja which are in her possession and said
heir Jose de Borja shall issue in turn the corresponding receive thereof.
7. That this agreement shall take effect only upon the fulfillment of the sale of the
properties mentioned under paragraph 1 of this agreement and upon receipt of
the total and full payment of the proceeds of the sale of the Jalajala property
"Poblacion", otherwise, the non-fulfillment of the said sale will render this
instrument NULL AND VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have her unto set their hands in the
City of Manila, Philippines, the 12th of October, 1963.
On 16 May 1966, Jose de Borja submitted for Court approval the agreement of 12 October 1963
to the Court of First Instance of Rizal, in Special Proceeding No. R-7866; and again, on 8 August
1966, to the Court of First Instance of Nueva Ecija, in Special Proceeding No. 832. Tasiana
Ongsingco Vda. de de Borja opposed in both instances. The Rizal court approved the
compromise agreement, but the Nueva Ecija court declared it void and unenforceable. Special
administratrix Tasiana Ongsingco Vda. de de Borja appealed the Rizal Court's order of approval
(now Supreme Court G.R. case No. L-28040), while administrator Jose de Borja appealed the
order of disapproval (G.R. case No. L-28568) by the Court of First Instance of Nueva Ecija.
The genuineness and due execution of the compromised agreement of 12 October 1963 is not
disputed, but its validity is, nevertheless, attacked by Tasiana Ongsingco on the ground that: (1)
the heirs cannot enter into such kind of agreement without first probating the will of Francisco
de Borja; (2) that the same involves a compromise on the validity of the marriage between
Francisco de Borja and Tasiana Ongsingco; and (3) that even if it were valid, it has ceased to
have force and effect.
In assailing the validity of the agreement of 12 October 1963, Tasiana Ongsingco and the
Probate Court of Nueva Ecija rely on this Court's decision in Guevara vs. Guevara. 74 Phil. 479,
wherein the Court's majority held the view that the presentation of a will for probate is
mandatory and that the settlement and distribution of an estate on the basis of intestacy when
the decedent left a will, is against the law and public policy. It is likewise pointed out by
appellant Tasiana Ongsingco that Section 1 of Rule 74 of the Revised Rules explicitly conditions
the validity of an extrajudicial settlement of a decedent's estate by agreement between heirs,
upon the facts that "(if) the decedentleft no will and no debts, and the heirs are all of age, or the
minors are represented by their judicial and legal representatives ..." The will of Francisco de
Borja having been submitted to the Nueva Ecija Court and still pending probate when the 1963
agreement was made, those circumstances, it is argued, bar the validity of the agreement.
Upon the other hand, in claiming the validity of the compromise agreement, Jose de Borja
stresses that at the time it was entered into, on 12 October 1963, the governing provision was

Section 1, Rule 74 of the original Rules of Court of 1940, which allowed the extrajudicial
settlement of the estate of a deceased person regardless of whether he left a will or not. He also
relies on the dissenting opinion of Justice Moran, in Guevara vs. Guevara, 74 Phil. 479, wherein
was expressed the view that if the parties have already divided the estate in accordance with a
decedent's will, the probate of the will is a useless ceremony; and if they have divided the estate
in a different manner, the probate of the will is worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to the case at bar. This is apparent
from an examination of the terms of the agreement between Jose de Borja and Tasiana
Ongsingco. Paragraph 2 of said agreement specifically stipulates that the sum of P800,000
payable to Tasiana Ongsingco
shall be considered as full complete payment settlement of her hereditary
share in the estate of the late Francisco de Borja as well as the estate of Josefa
Tangco, ... and to any properties bequeathed or devised in her favor by the late
Francisco de Borja by Last Will and Testament or by Donation Inter Vivos or
Mortis Causa or purportedly conveyed to her for consideration or otherwise.
This provision evidences beyond doubt that the ruling in the Guevara case is not applicable to
the cases at bar. There was here no attempt to settle or distribute the estate of Francisco de Borja
among the heirs thereto before the probate of his will. The clear object of the contract was
merely the conveyance by Tasiana Ongsingco of any and all her individual share and interest,
actual or eventual in the estate of Francisco de Borja and Josefa Tangco. There is no stipulation
as to any other claimant, creditor or legatee. And as a hereditary share in a decedent's estate is
transmitted or vested immediately from the moment of the death of such causante or
predecessor in interest (Civil Code of the Philippines, Art. 777) 3 there is no legal bar to a
successor (with requisite contracting capacity) disposing of her or his hereditary share
immediately after such death, even if the actual extent of such share is not determined until the
subsequent liquidation of the estate. 4 Of course, the effect of such alienation is to be deemed
limited to what is ultimately adjudicated to the vendor heir. However, the aleatory character of
the contract does not affect the validity of the transaction; neither does the coetaneous
agreement that the numerous litigations between the parties (the approving order of the Rizal
Court enumerates fourteen of them, Rec. App. pp. 79-82) are to be considered settled and
should be dismissed, although such stipulation, as noted by the Rizal Court, gives the contract
the character of a compromise that the law favors, for obvious reasons, if only because it serves
to avoid a multiplicity of suits.
It is likewise worthy of note in this connection that as the surviving spouse of Francisco de
Borja, Tasiana Ongsingco was his compulsory heir under article 995 et seq. of the present Civil
Code. Wherefore, barring unworthiness or valid disinheritance, her successional interest existed
independent of Francisco de Borja's last will and testament and would exist even if such will
were not probated at all. Thus, the prerequisite of a previous probate of the will, as established
in the Guevara and analogous cases, can not apply to the case of Tasiana Ongsingco Vda. de de
Borja.
Since the compromise contract Annex A was entered into by and between "Jose de Borja
personally and as administrator of the Testate Estate of Josefa Tangco" on the one hand, and on

the other, "the heir and surviving spouse of Francisco de Borja by his second marriage, Tasiana
Ongsingco Vda. de de Borja", it is clear that the transaction was binding on both in their
individual capacities, upon the perfection of the contract, even without previous authority of
the Court to enter into the same. The only difference between an extrajudicial compromise and
one that is submitted and approved by the Court, is that the latter can be enforced by execution
proceedings. Art. 2037 of the Civil Code is explicit on the point:
8. Art. 2037. A compromise has upon the parties the effect and authority of res
judicata; but there shall be no execution except in compliance with a judicial
compromise.
It is argued by Tasiana Ongsingco that while the agreement Annex A expressed
no definite period for its performance, the same was intended to have a resolutory
period of 60 days for its effectiveness. In support of such contention, it is averred
that such a limit was expressly stipulated in an agreement in similar terms
entered into by said Ongsingco with the brothers and sister of Jose de Borja, to
wit, Crisanto, Matilde and Cayetano, all surnamed de Borja, except that the
consideration was fixed at P600,000 (Opposition, Annex/Rec. of Appeal, L-28040,
pp. 39- 46) and which contained the following clause:
III. That this agreement shall take effect only upon the consummation of the sale
of the property mentioned herein and upon receipt of the total and full payment
of the proceeds of the sale by the herein owner heirs-children of Francisco de
Borja, namely, Crisanto, Cayetano and Matilde, all surnamed de Borja; Provided
that if no sale of the said property mentioned herein is consummated, or the nonreceipt of the purchase price thereof by the said owners within the period of sixty
(60) days from the date hereof, this agreement will become null and void and of
no further effect.
Ongsingco's argument loses validity when it is considered that Jose de Borja was not a party to
this particular contract (Annex 1), and that the same appears not to have been finalized, since it
bears no date, the day being left blank "this day of October 1963"; and while signed by the
parties, it was not notarized, although plainly intended to be so done, since it carries a proposed
notarial ratification clause. Furthermore, the compromise contract with Jose de Borja (Annex A),
provides in its par. 2 heretofore transcribed that of the total consideration of P800, 000 to be paid
to Ongsingco, P600,000 represent the "prorata share of the heirs Crisanto, Cayetano and Matilde
all surnamed de Borja" which corresponds to the consideration of P600,000 recited in Annex 1,
and that circumstance is proof that the duly notarized contract entered into wit Jose de Borja
under date 12 October 1963 (Annex A), was designed to absorb and supersede the separate
unformalize agreement with the other three Borja heirs. Hence, the 60 days resolutory term in
the contract with the latter (Annex 1) not being repeated in Annex A, can not apply to the
formal compromise with Jose de Borja. It is moreover manifest that the stipulation that the sale
of the Hacienda de Jalajala was to be made within sixty days from the date of the agreement
with Jose de Borja's co-heirs (Annex 1) was plainly omitted in Annex A as improper and
ineffective, since the Hacienda de Jalajala (Poblacion) that was to be sold to raise the P800,000 to
be paid to Ongsingco for her share formed part of the estate of Francisco de Borja and could not
be sold until authorized by the Probate Court. The Court of First Instance of Rizal so

understood it, and in approving the compromise it fixed a term of 120 days counted from the
finality of the order now under appeal, for the carrying out by the parties for the terms of the
contract.
This brings us to the plea that the Court of First Instance of Rizal had no jurisdiction to approve
the compromise with Jose de Borja (Annex A) because Tasiana Ongsingco was not an heir in the
estate of Josefa Tangco pending settlement in the Rizal Court, but she was an heir of Francisco
de Borja, whose estate was the object of Special Proceeding No. 832 of the Court of First Instance
of Nueva Ecija. This circumstance is irrelevant, since what was sold by Tasiana Ongsingco was
only her eventual share in the estate of her late husband, not the estate itself; and as already
shown, that eventual share she owned from the time of Francisco's death and the Court of
Nueva Ecija could not bar her selling it. As owner of her undivided hereditary share, Tasiana
could dispose of it in favor of whomsoever she chose. Such alienation is expressly recognized
and provided for by article 1088 of the present Civil Code:
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before
the partition, any or all of the co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the sale, provided they do so
within the period of one month from the time they were notified in writing of the
sale of the vendor.
If a sale of a hereditary right can be made to a stranger, then a fortiori sale thereof to a coheir
could not be forbidden.
Tasiana Ongsingco further argues that her contract with Jose de Borja (Annex "A") is void
because it amounts to a compromise as to her status and marriage with the late Francisco de
Borja. The point is without merit, for the very opening paragraph of the agreement with Jose de
Borja (Annex "A") describes her as "the heir and surviving spouse of Francisco de Borja by his
second marriage, Tasiana Ongsingco Vda. de de Borja", which is in itself definite admission of
her civil status. There is nothing in the text of the agreement that would show that this
recognition of Ongsingco's status as the surviving spouse of Francisco de Borja was only made
in consideration of the cession of her hereditary rights.
It is finally charged by appellant Ongsingco, as well as by the Court of First Instance of Nueva
Ecija in its order of 21 September 1964, in Special Proceedings No. 832 (Amended Record on
Appeal in L-28568, page 157), that the compromise agreement of 13 October 1963 (Annex "A")
had been abandoned, as shown by the fact that, after its execution, the Court of First Instance of
Nueva Ecija, in its order of 21 September 1964, had declared that "no amicable settlement had
been arrived at by the parties", and that Jose de Borja himself, in a motion of 17 June 1964, had
stated that the proposed amicable settlement "had failed to materialize".
It is difficult to believe, however, that the amicable settlement referred to in the order and
motion above-mentioned was the compromise agreement of 13 October 1963, which already
had been formally signed and executed by the parties and duly notarized. What the record
discloses is that some time after its formalization, Ongsingco had unilaterally attempted to back
out from the compromise agreement, pleading various reasons restated in the opposition to the
Court's approval of Annex "A" (Record on Appeal, L-20840, page 23): that the same was invalid

because of the lapse of the allegedly intended resolutory period of 60 days and because the
contract was not preceded by the probate of Francisco de Borja's will, as required by this
Court's Guevarra vs. Guevara ruling; that Annex "A" involved a compromise affecting
Ongsingco's status as wife and widow of Francisco de Borja, etc., all of which objections have
been already discussed. It was natural that in view of the widow's attitude, Jose de Borja should
attempt to reach a new settlement or novatory agreement before seeking judicial sanction and
enforcement of Annex "A", since the latter step might ultimately entail a longer delay in
attaining final remedy. That the attempt to reach another settlement failed is apparent from the
letter of Ongsingco's counsel to Jose de Borja quoted in pages 35-36 of the brief for appellant
Ongsingco in G.R. No. 28040; and it is more than probable that the order of 21 September 1964
and the motion of 17 June 1964 referred to the failure of the parties' quest for a more satisfactory
compromise. But the inability to reach a novatory accord can not invalidate the original
compromise (Annex "A") and justifies the act of Jose de Borja in finally seeking a court order for
its approval and enforcement from the Court of First Instance of Rizal, which, as heretofore
described, decreed that the agreement be ultimately performed within 120 days from the
finality of the order, now under appeal.
We conclude that in so doing, the Rizal court acted in accordance with law, and, therefore, its
order should be upheld, while the contrary resolution of the Court of First Instance of Nueva
Ecija should be, and is, reversed.
In her brief, Tasiana Ongsingco also pleads that the time elapsed in the appeal has affected her
unfavorably, in that while the purchasing power of the agreed price of P800,000 has diminished,
the value of the Jalajala property has increased. But the fact is that her delay in receiving the
payment of the agreed price for her hereditary interest was primarily due to her attempts to
nullify the agreement (Annex "A") she had formally entered into with the advice of her counsel,
Attorney Panaguiton. And as to the devaluation de facto of our currency, what We said in Dizon
Rivera vs. Dizon, L-24561, 30 June 1970, 33 SCRA 554, that "estates would never be settled if there
were to be a revaluation with every subsequent fluctuation in the values of currency and
properties of the estate", is particularly opposite in the present case.
Coming now to Case G.R. No. L-28611, the issue is whether the Hacienda de Jalajala
(Poblacion), concededly acquired by Francisco de Borja during his marriage to his first wife,
Josefa Tangco, is the husband's private property (as contended by his second spouse, Tasiana
Ongsingco), or whether it forms part of the conjugal (ganancial) partnership with Josefa Tangco.
The Court of First Instance of Rizal (Judge Herminio Mariano, presiding) declared that there
was adequate evidence to overcome the presumption in favor of its conjugal character
established by Article 160 of the Civil Code.
We are of the opinion that this question as between Tasiana Ongsingco and Jose de Borja has
become moot and academic, in view of the conclusion reached by this Court in the two
preceding cases (G.R. No. L-28568), upholding as valid the cession of Tasiana Ongsingco's
eventual share in the estate of her late husband, Francisco de Borja, for the sum of P800,000 with
the accompanying reciprocal quit-claims between the parties. But as the question may affect the
rights of possible creditors and legatees, its resolution is still imperative.

It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, had been originally
acquired jointly by Francisco de Borja, Bernardo de Borja and Marcelo de Borja and their title
thereto was duly registered in their names as co-owners in Land Registration Case No. 528 of
the province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo vs. Jugo, 54 Phil. 465). Subsequently, in
1931, the Hacienda was partitioned among the co-owners: the Punta section went to Marcelo de
Borja; the Bagombong section to Bernardo de Borja, and the part in Jalajala proper (Poblacion)
corresponded to Francisco de Borja (V. De Borja vs. De Borja 101 Phil. 911, 932).
The lot allotted to Francisco was described as
Una Parcela de terreno en Poblacion, Jalajala: N. Puang River; E. Hermogena
Romero; S. Heirs of Marcelo de Borja O. Laguna de Bay; containing an area of
13,488,870 sq. m. more or less, assessed at P297,410. (Record on Appeal, pages 7
and 105)
On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of the Testate Estate of
Francisco de Borja, instituted a complaint in the Court of First Instance of Rizal (Civil Case No.
7452) against Jose de Borja, in his capacity as Administrator of Josefa Tangco (Francisco de
Borja's first wife), seeking to have the Hacienda above described declared exclusive private
property of Francisco, while in his answer defendant (now appellant) Jose de Borja claimed that
it was conjugal property of his parents (Francisco de Borja and Josefa Tangco), conformably to
the presumption established by Article 160 of the Philippine Civil Code (reproducing Article
1407 of the Civil Code of 1889), to the effect that:
Art. 160. All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband or to
the wife.
Defendant Jose de Borja further counterclaimed for damages, compensatory, moral and
exemplary, as well as for attorney's fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio Mariano, held that the
plaintiff had adduced sufficient evidence to rebut the presumption, and declared the Hacienda
de Jalajala (Poblacion) to be the exclusive private property of the late Francisco de Borja, and his
Administratrix, Tasiana Ongsingco Vda. de Borja, to be entitled to its possession. Defendant
Jose de Borja then appealed to this Court.
The evidence reveals, and the appealed order admits, that the character of the Hacienda in
question as owned by the conjugal partnership De Borja-Tangco was solemnly admitted by the
late Francisco de Borja no less than two times: first, in the Reamended Inventory that, as
executor of the estate of his deceased wife Josefa Tangco, he filed in the Special Proceedings No.
7866 of the Court of First Instance of Rizal on 23 July 1953 (Exhibit "2"); and again, in the
Reamended Accounting of the same date, also filed in the proceedings aforesaid (Exhibit "7").
Similarly, the plaintiff Tasiana O. Vda. de Borja, herself, as oppositor in the Estate of Josefa
Tangco, submitted therein an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala
property among the "Conjugal Properties of the Spouses Francisco de Borja and Josefa Tangco".
And once more, Tasiana Ongsingco, as administratrix of the Estate of Francisco de Borja, in

Special Proceedings No. 832 of the Court of First Instance of Nueva Ecija, submitted therein in
December, 1955, an inventory wherein she listed the Jalajala Hacienda under the heading
"Conjugal Property of the Deceased Spouses Francisco de Borja and Josefa Tangco, which are in
the possession of the Administrator of the Testate Estate of the Deceased Josefa Tangco in
Special Proceedings No. 7866 of the Court of First Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that they are plain admissions
against interest made by both Francisco de Borja and the Administratrix of his estate, in the
course of judicial proceedings in the Rizal and Nueva Ecija Courts, supporting the legal
presumption in favor of the conjugal community, the Court below declared that the Hacienda
de Jalajala (Poblacion) was not conjugal property, but the private exclusive property of the late
Francisco de Borja. It did so on the strength of the following evidences: (a) the sworn statement
by Francis de Borja on 6 August 1951 (Exhibit "F") that
He tomado possession del pedazo de terreno ya delimitado (equivalente a 1/4
parte, 337 hectareas) adjunto a mi terreno personal y exclusivo (Poblacion de
Jalajala, Rizal).
and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, that the entire Hacienda
had been bought at a foreclosure sale for P40,100.00, of which amount P25,100 was contributed
by Bernardo de Borja and P15,000. by Marcelo de Borja; that upon receipt of a subsequent
demand from the provincial treasurer for realty taxes the sum of P17,000, Marcelo told his
brother Bernardo that Francisco (son of Marcelo) wanted also to be a co-owner, and upon
Bernardo's assent to the proposal, Marcelo issue a check for P17,000.00 to pay the back taxes and
said that the amount would represent Francisco's contribution in the purchase of the Hacienda.
The witness further testified that
Marcelo de Borja said that that money was entrusted to him by Francisco de
Borja when he was still a bachelor and which he derived from his business
transactions. (Hearing, 2 February 1965, t.s.n., pages 13-15) (Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn statement overweighed the
admissions in the inventories relied upon by defendant-appellant Jose de Borja since probate
courts can not finally determine questions of ownership of inventoried property, but that the
testimony of Gregorio de Borja showed that Francisco de Borja acquired his share of the original
Hacienda with his private funds, for which reason that share can not be regarded as conjugal
partnership property, but as exclusive property of the buyer, pursuant to Article 1396(4) of Civil
Code of 1889 and Article 148(4) of the Civil Code of the Philippines.
The following shall be the exclusive property of each spouse:
xxx xxx xxx
(4) That which is purchased with exclusive money of the wife or of the husband.
We find the conclusions of the lower court to be untenable. In the first place, witness Gregorio
de Borja's testimony as to the source of the money paid by Francisco for his share was plain

hearsay, hence inadmissible and of no probative value, since he was merely repeating what
Marcelo de Borja had told him (Gregorio). There is no way of ascertaining the truth of the
statement, since both Marcelo and Francisco de Borja were already dead when Gregorio
testified. In addition, the statement itself is improbable, since there was no need or occasion for
Marcelo de Borja to explain to Gregorio how and when Francisco de Borja had earned the
P17,000.00 entrusted to Marcelo. A ring of artificiality is clearly discernible in this portion of
Gregorio's testimony.
As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion thereof (ante, page 14) does
not clearly demonstrate that the "mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal) "
refers precisely to the Hacienda in question. The inventories (Exhibits 3 and 4) disclose that
there were two real properties in Jalajala owned by Francisco de Borja, one of 72.038 sq. m.,
assessed at P44,600, and a much bigger one of 1,357.260.70 sq. m., which is evidently the
Hacienda de Jalajala (Poblacion). To which of these lands did the affidavit of Francisco de Borja
(Exhibit "F") refer to? In addition, Francisco's characterization of the land as "mi terreno
personal y exclusivo" is plainly self-serving, and not admissible in the absence of cross
examination.
It may be true that the inventories relied upon by defendant-appellant (Exhibits "2", "3", "4" and
"7") are not conclusive on the conjugal character of the property in question; but as already
noted, they are clear admissions against the pecuniary interest of the declarants, Francisco de
Borja and his executor-widow, Tasiana Ongsingco, and as such of much greater probative
weight than the self-serving statement of Francisco (Exhibit "F"). Plainly, the legal presumption
in favor of the conjugal character of the Hacienda de Jalajala (Poblacion) now in dispute has not
been rebutted but actually confirmed by proof. Hence, the appealed order should be reversed
and the Hacienda de Jalajala (Poblacion) declared property of the conjugal partnership of
Francisco de Borja and Josefa Tangco.
No error having been assigned against the ruling of the lower court that claims for damages
should be ventilated in the corresponding special proceedings for the settlement of the estates
of the deceased, the same requires no pro announcement from this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court of First Instance of Rizal in
Case No. L-28040 is hereby affirmed; while those involved in Cases Nos. L-28568 and L-28611
are reversed and set aside. Costs against the appellant Tasiana Ongsingco Vda. de Borja in all
three (3) cases.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Makasiar, Antonio and Esguerra, JJ.,
concur.
Fernando, J., took no part.

Footnotes

1 She died during the pendency of these appeals, being substituted by Atty. Luis
Panaguiton Jr., administrator of the estate (S.C. Resolution, 27 February 1970).
2 Annex A, Record on Appeal, G.R. No. L-28040, pp. 16-21.
3 Also: Osorio vs. Osorio Steamship Co., 41 Phil. 531; Baun vs. Heirs of Baun, 53
Phil. 654; Barretto vs. Tuason, 59 Phil. 845; Cuevas vs. Abesamis, 71 Phil. 147;
Jayme vs. Gamboa, 75 Phil. 479; Iballe vs. Po.
4 Garcia vs. David, 67 Phil. 279; Jakosalem vs. Rafols, 73 Phil. 628.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-43082

June 18, 1937

PABLO LORENZO, as trustee of the estate of Thomas Hanley, deceased, plaintiff-appellant,

vs.
JUAN POSADAS, JR., Collector of Internal Revenue, defendant-appellant.
Pablo Lorenzo and Delfin Joven for plaintiff-appellant.
Office of the Solicitor-General Hilado for defendant-appellant.
LAUREL, J.:
On October 4, 1932, the plaintiff Pablo Lorenzo, in his capacity as trustee of the estate of Thomas
Hanley, deceased, brought this action in the Court of First Instance of Zamboanga against the
defendant, Juan Posadas, Jr., then the Collector of Internal Revenue, for the refund of the
amount of P2,052.74, paid by the plaintiff as inheritance tax on the estate of the deceased, and
for the collection of interst thereon at the rate of 6 per cent per annum, computed from
September 15, 1932, the date when the aforesaid tax was [paid under protest. The defendant set
up a counterclaim for P1,191.27 alleged to be interest due on the tax in question and which was
not included in the original assessment. From the decision of the Court of First Instance of
Zamboanga dismissing both the plaintiff's complaint and the defendant's counterclaim, both
parties appealed to this court.
It appears that on May 27, 1922, one Thomas Hanley died in Zamboanga, Zamboanga, leaving a
will (Exhibit 5) and considerable amount of real and personal properties. On june 14, 1922,
proceedings for the probate of his will and the settlement and distribution of his estate were
begun in the Court of First Instance of Zamboanga. The will was admitted to probate. Said will
provides, among other things, as follows:

4. I direct that any money left by me be given to my nephew Matthew Hanley.

5. I direct that all real estate owned by me at the time of my death be not sold or
otherwise disposed of for a period of ten (10) years after my death, and that the same be
handled and managed by the executors, and proceeds thereof to be given to my nephew,
Matthew Hanley, at Castlemore, Ballaghaderine, County of Rosecommon, Ireland, and
that he be directed that the same be used only for the education of my brother's children
and their descendants.
6. I direct that ten (10) years after my death my property be given to the above
mentioned Matthew Hanley to be disposed of in the way he thinks most advantageous.
xxx

xxx

xxx

8. I state at this time I have one brother living, named Malachi Hanley, and that my
nephew, Matthew Hanley, is a son of my said brother, Malachi Hanley.
The Court of First Instance of Zamboanga considered it proper for the best interests of ther
estate to appoint a trustee to administer the real properties which, under the will, were to pass
to Matthew Hanley ten years after the two executors named in the will, was, on March 8, 1924,
appointed trustee. Moore took his oath of office and gave bond on March 10, 1924. He acted as
trustee until February 29, 1932, when he resigned and the plaintiff herein was appointed in his
stead.
During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue,
alleging that the estate left by the deceased at the time of his death consisted of realty valued at
P27,920 and personalty valued at P1,465, and allowing a deduction of P480.81, assessed against
the estate an inheritance tax in the amount of P1,434.24 which, together with the penalties for
deliquency in payment consisting of a 1 per cent monthly interest from July 1, 1931 to the date
of payment and a surcharge of 25 per cent on the tax, amounted to P2,052.74. On March 15,
1932, the defendant filed a motion in the testamentary proceedings pending before the Court of
First Instance of Zamboanga (Special proceedings No. 302) praying that the trustee, plaintiff
herein, be ordered to pay to the Government the said sum of P2,052.74. The motion was
granted. On September 15, 1932, the plaintiff paid said amount under protest, notifying the
defendant at the same time that unless the amount was promptly refunded suit would be
brought for its recovery. The defendant overruled the plaintiff's protest and refused to refund
the said amount hausted, plaintiff went to court with the result herein above indicated.
In his appeal, plaintiff contends that the lower court erred:
I. In holding that the real property of Thomas Hanley, deceased, passed to his instituted
heir, Matthew Hanley, from the moment of the death of the former, and that from the
time, the latter became the owner thereof.
II. In holding, in effect, that there was deliquency in the payment of inheritance tax due
on the estate of said deceased.

III. In holding that the inheritance tax in question be based upon the value of the estate
upon the death of the testator, and not, as it should have been held, upon the value
thereof at the expiration of the period of ten years after which, according to the testator's
will, the property could be and was to be delivered to the instituted heir.
IV. In not allowing as lawful deductions, in the determination of the net amount of the
estate subject to said tax, the amounts allowed by the court as compensation to the
"trustees" and paid to them from the decedent's estate.
V. In not rendering judgment in favor of the plaintiff and in denying his motion for new
trial.
The defendant-appellant contradicts the theories of the plaintiff and assigns the following error
besides:
The lower court erred in not ordering the plaintiff to pay to the defendant the sum of
P1,191.27, representing part of the interest at the rate of 1 per cent per month from April
10, 1924, to June 30, 1931, which the plaintiff had failed to pay on the inheritance tax
assessed by the defendant against the estate of Thomas Hanley.
The following are the principal questions to be decided by this court in this appeal: (a) When
does the inheritance tax accrue and when must it be satisfied? (b) Should the inheritance tax be
computed on the basis of the value of the estate at the time of the testator's death, or on its value
ten years later? (c) In determining the net value of the estate subject to tax, is it proper to deduct
the compensation due to trustees? (d) What law governs the case at bar? Should the provisions
of Act No. 3606 favorable to the tax-payer be given retroactive effect? (e) Has there been
deliquency in the payment of the inheritance tax? If so, should the additional interest claimed
by the defendant in his appeal be paid by the estate? Other points of incidental importance,
raised by the parties in their briefs, will be touched upon in the course of this opinion.
(a) The accrual of the inheritance tax is distinct from the obligation to pay the same. Section 1536
as amended, of the Administrative Code, imposes the tax upon "every transmission by virtue of
inheritance, devise, bequest, giftmortis causa, or advance in anticipation of inheritance,devise, or
bequest." The tax therefore is upon transmission or the transfer or devolution of property of a
decedent, made effective by his death. (61 C. J., p. 1592.) It is in reality an excise or privilege tax
imposed on the right to succeed to, receive, or take property by or under a will or the intestacy
law, or deed, grant, or gift to become operative at or after death. Acording to article 657 of the
Civil Code, "the rights to the succession of a person are transmitted from the moment of his
death." "In other words", said Arellano, C. J., ". . . the heirs succeed immediately to all of the
property of the deceased ancestor. The property belongs to the heirs at the moment of the death
of the ancestor as completely as if the ancestor had executed and delivered to them a deed for
the same before his death." (Bondad vs. Bondad, 34 Phil., 232. See also, Mijares vs. Nery, 3 Phil.,
195; Suilong & Co., vs. Chio-Taysan, 12 Phil., 13; Lubrico vs. Arbado, 12 Phil., 391; Innocencio
vs. Gat-Pandan, 14 Phil., 491; Aliasas vs.Alcantara, 16 Phil., 489; Ilustre vs. Alaras Frondosa, 17
Phil., 321; Malahacan vs. Ignacio, 19 Phil., 434; Bowa vs. Briones, 38 Phil., 27; Osario vs. Osario
& Yuchausti Steamship Co., 41 Phil., 531; Fule vs. Fule, 46 Phil., 317; Dais vs. Court of First
Instance of Capiz, 51 Phil., 396; Baun vs. Heirs of Baun, 53 Phil., 654.) Plaintiff, however, asserts

that while article 657 of the Civil Code is applicable to testate as well as intestate succession, it
operates only in so far as forced heirs are concerned. But the language of article 657 of the Civil
Code is broad and makes no distinction between different classes of heirs. That article does not
speak of forced heirs; it does not even use the word "heir". It speaks of the rights of succession
and the transmission thereof from the moment of death. The provision of section 625 of the
Code of Civil Procedure regarding the authentication and probate of a will as a necessary
condition to effect transmission of property does not affect the general rule laid down in article
657 of the Civil Code. The authentication of a will implies its due execution but once probated
and allowed the transmission is effective as of the death of the testator in accordance with
article 657 of the Civil Code. Whatever may be the time when actual transmission of the
inheritance takes place, succession takes place in any event at the moment of the decedent's
death. The time when the heirs legally succeed to the inheritance may differ from the time when
the heirs actually receive such inheritance. "Poco importa", says Manresa commenting on article
657 of the Civil Code, "que desde el falleimiento del causante, hasta que el heredero o legatario entre en
posesion de los bienes de la herencia o del legado, transcurra mucho o poco tiempo, pues la adquisicion ha
de retrotraerse al momento de la muerte, y asi lo ordena el articulo 989, que debe considerarse como
complemento del presente." (5 Manresa, 305; see also, art. 440, par. 1, Civil Code.) Thomas Hanley
having died on May 27, 1922, the inheritance tax accrued as of the date.
From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow that the
obligation to pay the tax arose as of the date. The time for the payment on inheritance tax is
clearly fixed by section 1544 of the Revised Administrative Code as amended by Act No. 3031,
in relation to section 1543 of the same Code. The two sections follow:
SEC. 1543. Exemption of certain acquisitions and transmissions. The following shall not be
taxed:
(a) The merger of the usufruct in the owner of the naked title.
(b) The transmission or delivery of the inheritance or legacy by the fiduciary heir
or legatee to the trustees.
(c) The transmission from the first heir, legatee, or donee in favor of another
beneficiary, in accordance with the desire of the predecessor.
In the last two cases, if the scale of taxation appropriate to the new beneficiary is greater
than that paid by the first, the former must pay the difference.
SEC. 1544. When tax to be paid. The tax fixed in this article shall be paid:
(a) In the second and third cases of the next preceding section, before entrance
into possession of the property.
(b) In other cases, within the six months subsequent to the death of the
predecessor; but if judicial testamentary or intestate proceedings shall be
instituted prior to the expiration of said period, the payment shall be made by
the executor or administrator before delivering to each beneficiary his share.

If the tax is not paid within the time hereinbefore prescribed, interest at the rate of
twelve per centum per annum shall be added as part of the tax; and to the tax and
interest due and unpaid within ten days after the date of notice and demand thereof by
the collector, there shall be further added a surcharge of twenty-five per centum.
A certified of all letters testamentary or of admisitration shall be furnished the Collector
of Internal Revenue by the Clerk of Court within thirty days after their issuance.
It should be observed in passing that the word "trustee", appearing in subsection (b) of section
1543, should read "fideicommissary" or "cestui que trust". There was an obvious mistake in
translation from the Spanish to the English version.
The instant case does fall under subsection (a), but under subsection (b), of section 1544 abovequoted, as there is here no fiduciary heirs, first heirs, legatee or donee. Under the subsection, the
tax should have been paid before the delivery of the properties in question to P. J. M. Moore as
trustee on March 10, 1924.
(b) The plaintiff contends that the estate of Thomas Hanley, in so far as the real properties are
concerned, did not and could not legally pass to the instituted heir, Matthew Hanley, until after
the expiration of ten years from the death of the testator on May 27, 1922 and, that the
inheritance tax should be based on the value of the estate in 1932, or ten years after the testator's
death. The plaintiff introduced evidence tending to show that in 1932 the real properties in
question had a reasonable value of only P5,787. This amount added to the value of the personal
property left by the deceased, which the plaintiff admits is P1,465, would generate an
inheritance tax which, excluding deductions, interest and surcharge, would amount only to
about P169.52.
If death is the generating source from which the power of the estate to impose inheritance taxes
takes its being and if, upon the death of the decedent, succession takes place and the right of the
estate to tax vests instantly, the tax should be measured by the vlaue of the estate as it stood at
the time of the decedent's death, regardless of any subsequent contingency value of any
subsequent increase or decrease in value. (61 C. J., pp. 1692, 1693; 26 R. C. L., p. 232; Blakemore
and Bancroft, Inheritance Taxes, p. 137. See also Knowlton vs. Moore, 178 U.S., 41; 20 Sup. Ct.
Rep., 747; 44 Law. ed., 969.) "The right of the state to an inheritance tax accrues at the moment of
death, and hence is ordinarily measured as to any beneficiary by the value at that time of such
property as passes to him. Subsequent appreciation or depriciation is immaterial." (Ross,
Inheritance Taxation, p. 72.)
Our attention is directed to the statement of the rule in Cyclopedia of Law of and Procedure
(vol. 37, pp. 1574, 1575) that, in the case of contingent remainders, taxation is postponed until
the estate vests in possession or the contingency is settled. This rule was formerly followed in
New York and has been adopted in Illinois, Minnesota, Massachusetts, Ohio, Pennsylvania and
Wisconsin. This rule, horever, is by no means entirely satisfactory either to the estate or to those
interested in the property (26 R. C. L., p. 231.). Realizing, perhaps, the defects of its anterior
system, we find upon examination of cases and authorities that New York has varied and now
requires the immediate appraisal of the postponed estate at its clear market value and the
payment forthwith of the tax on its out of the corpus of the estate transferred. (In re Vanderbilt,

172 N. Y., 69; 69 N. E., 782; In re Huber, 86 N. Y. App. Div., 458; 83 N. Y. Supp., 769; Estate of
Tracy, 179 N. Y., 501; 72 N. Y., 519; Estate of Brez, 172 N. Y., 609; 64 N. E., 958; Estate of Post, 85
App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun vs. Lord Advocate, 1 Peter. Sc. App., 970;
3 Macq. H. L., 659; 23 Eng. Rul. Cas., 888.) California adheres to this new rule (Stats. 1905, sec. 5,
p. 343).
But whatever may be the rule in other jurisdictions, we hold that a transmission by inheritance
is taxable at the time of the predecessor's death, notwithstanding the postponement of the
actual possession or enjoyment of the estate by the beneficiary, and the tax measured by the
value of the property transmitted at that time regardless of its appreciation or depreciation.
(c) Certain items are required by law to be deducted from the appraised gross in arriving at the
net value of the estate on which the inheritance tax is to be computed (sec. 1539, Revised
Administrative Code). In the case at bar, the defendant and the trial court allowed a deduction
of only P480.81. This sum represents the expenses and disbursements of the executors until
March 10, 1924, among which were their fees and the proven debts of the deceased. The
plaintiff contends that the compensation and fees of the trustees, which aggregate P1,187.28
(Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted under section 1539 of the
Revised Administrative Code which provides, in part, as follows: "In order to determine the net
sum which must bear the tax, when an inheritance is concerned, there shall be deducted, in case
of a resident, . . . the judicial expenses of the testamentary or intestate proceedings, . . . ."
A trustee, no doubt, is entitled to receive a fair compensation for his services (Barney vs.
Saunders, 16 How., 535; 14 Law. ed., 1047). But from this it does not follow that the
compensation due him may lawfully be deducted in arriving at the net value of the estate
subject to tax. There is no statute in the Philippines which requires trustees' commissions to be
deducted in determining the net value of the estate subject to inheritance tax (61 C. J., p. 1705).
Furthermore, though a testamentary trust has been created, it does not appear that the testator
intended that the duties of his executors and trustees should be separated. (Ibid.; In re Vanneck's
Estate, 161 N. Y. Supp., 893; 175 App. Div., 363; In re Collard's Estate, 161 N. Y. Supp., 455.) On
the contrary, in paragraph 5 of his will, the testator expressed the desire that his real estate be
handled and managed by his executors until the expiration of the period of ten years therein
provided. Judicial expenses are expenses of administration (61 C. J., p. 1705) but, in State vs.
Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it was said: ". . . The
compensation of a trustee, earned, not in the administration of the estate, but in the
management thereof for the benefit of the legatees or devises, does not come properly within
the class or reason for exempting administration expenses. . . . Service rendered in that behalf
have no reference to closing the estate for the purpose of a distribution thereof to those entitled
to it, and are not required or essential to the perfection of the rights of the heirs or legatees. . . .
Trusts . . . of the character of that here before the court, are created for the the benefit of those to
whom the property ultimately passes, are of voluntary creation, and intended for the
preservation of the estate. No sound reason is given to support the contention that such
expenses should be taken into consideration in fixing the value of the estate for the purpose of
this tax."
(d) The defendant levied and assessed the inheritance tax due from the estate of Thomas Hanley
under the provisions of section 1544 of the Revised Administrative Code, as amended by

section 3 of Act No. 3606. But Act No. 3606 went into effect on January 1, 1930. It, therefore, was
not the law in force when the testator died on May 27, 1922. The law at the time was section
1544 above-mentioned, as amended by Act No. 3031, which took effect on March 9, 1922.
It is well-settled that inheritance taxation is governed by the statute in force at the time of the
death of the decedent (26 R. C. L., p. 206; 4 Cooley on Taxation, 4th ed., p. 3461). The taxpayer
can not foresee and ought not to be required to guess the outcome of pending measures. Of
course, a tax statute may be made retroactive in its operation. Liability for taxes under
retroactive legislation has been "one of the incidents of social life." (Seattle vs. Kelleher, 195 U.
S., 360; 49 Law. ed., 232 Sup. Ct. Rep., 44.) But legislative intent that a tax statute should operate
retroactively should be perfectly clear. (Scwab vs. Doyle, 42 Sup. Ct. Rep., 491; Smietanka vs.
First Trust & Savings Bank, 257 U. S., 602; Stockdale vs. Insurance Co., 20 Wall., 323; Lunch vs.
Turrish, 247 U. S., 221.) "A statute should be considered as prospective in its operation, whether
it enacts, amends, or repeals an inheritance tax, unless the language of the statute clearly
demands or expresses that it shall have a retroactive effect, . . . ." (61 C. J., P. 1602.) Though the
last paragraph of section 5 of Regulations No. 65 of the Department of Finance makes section 3
of Act No. 3606, amending section 1544 of the Revised Administrative Code, applicable to all
estates the inheritance taxes due from which have not been paid, Act No. 3606 itself contains no
provisions indicating legislative intent to give it retroactive effect. No such effect can begiven
the statute by this court.
The defendant Collector of Internal Revenue maintains, however, that certain provisions of Act
No. 3606 are more favorable to the taxpayer than those of Act No. 3031, that said provisions are
penal in nature and, therefore, should operate retroactively in conformity with the provisions of
article 22 of the Revised Penal Code. This is the reason why he applied Act No. 3606 instead of
Act No. 3031. Indeed, under Act No. 3606, (1) the surcharge of 25 per cent is based on the tax
only, instead of on both the tax and the interest, as provided for in Act No. 3031, and (2) the
taxpayer is allowed twenty days from notice and demand by rthe Collector of Internal Revenue
within which to pay the tax, instead of ten days only as required by the old law.
Properly speaking, a statute is penal when it imposes punishment for an offense committed
against the state which, under the Constitution, the Executive has the power to pardon. In
common use, however, this sense has been enlarged to include within the term "penal statutes"
all status which command or prohibit certain acts, and establish penalties for their violation,
and even those which, without expressly prohibiting certain acts, impose a penalty upon their
commission (59 C. J., p. 1110). Revenue laws, generally, which impose taxes collected by the
means ordinarily resorted to for the collection of taxes are not classed as penal laws, although
there are authorities to the contrary. (See Sutherland, Statutory Construction, 361; Twine Co. vs.
Worthington, 141 U. S., 468; 12 Sup. Ct., 55; Rice vs. U. S., 4 C. C. A., 104; 53 Fed., 910; Com. vs.
Standard Oil Co., 101 Pa. St., 150; State vs. Wheeler, 44 P., 430; 25 Nev. 143.) Article 22 of the
Revised Penal Code is not applicable to the case at bar, and in the absence of clear legislative
intent, we cannot give Act No. 3606 a retroactive effect.
(e) The plaintiff correctly states that the liability to pay a tax may arise at a certain time and the
tax may be paid within another given time. As stated by this court, "the mere failure to pay
one's tax does not render one delinqent until and unless the entire period has eplased within
which the taxpayer is authorized by law to make such payment without being subjected to the

payment of penalties for fasilure to pay his taxes within the prescribed period." (U. S. vs.
Labadan, 26 Phil., 239.)
The defendant maintains that it was the duty of the executor to pay the inheritance tax before
the delivery of the decedent's property to the trustee. Stated otherwise, the defendant contends
that delivery to the trustee was delivery to the cestui que trust, the beneficiery in this case, within
the meaning of the first paragraph of subsection (b) of section 1544 of the Revised
Administrative Code. This contention is well taken and is sustained. The appointment of P. J.
M. Moore as trustee was made by the trial court in conformity with the wishes of the testator as
expressed in his will. It is true that the word "trust" is not mentioned or used in the will but the
intention to create one is clear. No particular or technical words are required to create a
testamentary trust (69 C. J., p. 711). The words "trust" and "trustee", though apt for the purpose,
are not necessary. In fact, the use of these two words is not conclusive on the question that a
trust is created (69 C. J., p. 714). "To create a trust by will the testator must indicate in the will
his intention so to do by using language sufficient to separate the legal from the equitable estate,
and with sufficient certainty designate the beneficiaries, their interest in the ttrust, the purpose
or object of the trust, and the property or subject matter thereof. Stated otherwise, to constitute a
valid testamentary trust there must be a concurrence of three circumstances: (1) Sufficient
words to raise a trust; (2) a definite subject; (3) a certain or ascertain object; statutes in some
jurisdictions expressly or in effect so providing." (69 C. J., pp. 705,706.) There is no doubt that
the testator intended to create a trust. He ordered in his will that certain of his properties be
kept together undisposed during a fixed period, for a stated purpose. The probate court
certainly exercised sound judgment in appointment a trustee to carry into effect the provisions
of the will (see sec. 582, Code of Civil Procedure).
P. J. M. Moore became trustee on March 10, 1924. On that date trust estate vested in him (sec.
582 in relation to sec. 590, Code of Civil Procedure). The mere fact that the estate of the deceased
was placed in trust did not remove it from the operation of our inheritance tax laws or exempt it
from the payment of the inheritance tax. The corresponding inheritance tax should have been
paid on or before March 10, 1924, to escape the penalties of the laws. This is so for the reason
already stated that the delivery of the estate to the trustee was in esse delivery of the same estate
to the cestui que trust, the beneficiary in this case. A trustee is but an instrument or agent for
thecestui que trust (Shelton vs. King, 299 U. S., 90; 33 Sup. Ct. Rep., 689; 57 Law. ed., 1086). When
Moore accepted the trust and took possesson of the trust estate he thereby admitted that the
estate belonged not to him but to his cestui que trust (Tolentino vs. Vitug, 39 Phil.,126, cited in 65
C. J., p. 692, n. 63). He did not acquire any beneficial interest in the estate. He took such legal
estate only as the proper execution of the trust required (65 C. J., p. 528) and, his estate ceased
upon the fulfillment of the testator's wishes. The estate then vested absolutely in the beneficiary
(65 C. J., p. 542).
The highest considerations of public policy also justify the conclusion we have reached. Were
we to hold that the payment of the tax could be postponed or delayed by the creation of a trust
of the type at hand, the result would be plainly disastrous. Testators may provide, as Thomas
Hanley has provided, that their estates be not delivered to their beneficiaries until after the
lapse of a certain period of time. In the case at bar, the period is ten years. In other cases, the
trust may last for fifty years, or for a longer period which does not offend the rule against
petuities. The collection of the tax would then be left to the will of a private individual. The

mere suggestion of this result is a sufficient warning against the accpetance of the essential to
the very exeistence of government. (Dobbins vs. Erie Country, 16 Pet., 435; 10 Law. ed., 1022;
Kirkland vs. Hotchkiss, 100 U. S., 491; 25 Law. ed., 558; Lane County vs. Oregon, 7 Wall., 71; 19
Law. ed., 101; Union Refrigerator Transit Co. vs. Kentucky, 199 U. S., 194; 26 Sup. Ct. Rep., 36;
50 Law. ed., 150; Charles River Bridge vs. Warren Bridge, 11 Pet., 420; 9 Law. ed., 773.) The
obligation to pay taxes rests not upon the privileges enjoyed by, or the protection afforded to, a
citizen by the government but upon the necessity of money for the support of the state (Dobbins
vs. Erie Country, supra). For this reason, no one is allowed to object to or resist the payment of
taxes solely because no personal benefit to him can be pointed out. (Thomas vs. Gay, 169 U. S.,
264; 18 Sup. Ct. Rep., 340; 43 Law. ed., 740.) While courts will not enlarge, by construction, the
government's power of taxation (Bromley vs. McCaughn, 280 U. S., 124; 74 Law. ed., 226; 50
Sup. Ct. Rep., 46) they also will not place upon tax laws so loose a construction as to permit
evasions on merely fanciful and insubstantial distictions. (U. S. vs. Watts, 1 Bond., 580; Fed. Cas.
No. 16,653; U. S. vs. Wigglesirth, 2 Story, 369; Fed. Cas. No. 16,690, followed in Froelich &
Kuttner vs. Collector of Customs, 18 Phil., 461, 481; Castle Bros., Wolf & Sons vs. McCoy, 21
Phil., 300; Muoz & Co. vs. Hord, 12 Phil., 624; Hongkong & Shanghai Banking Corporation vs.
Rafferty, 39 Phil., 145; Luzon Stevedoring Co. vs. Trinidad, 43 Phil., 803.) When proper, a tax
statute should be construed to avoid the possibilities of tax evasion. Construed this way, the
statute, without resulting in injustice to the taxpayer, becomes fair to the government.
That taxes must be collected promptly is a policy deeply intrenched in our tax system. Thus, no
court is allowed to grant injunction to restrain the collection of any internal revenue tax ( sec.
1578, Revised Administrative Code; Sarasola vs. Trinidad, 40 Phil., 252). In the case of Lim Co
Chui vs. Posadas (47 Phil., 461), this court had occassion to demonstrate trenchment adherence
to this policy of the law. It held that "the fact that on account of riots directed against the
Chinese on October 18, 19, and 20, 1924, they were prevented from praying their internal
revenue taxes on time and by mutual agreement closed their homes and stores and remained
therein, does not authorize the Collector of Internal Revenue to extend the time prescribed for
the payment of the taxes or to accept them without the additional penalty of twenty five per
cent." (Syllabus, No. 3.)
". . . It is of the utmost importance," said the Supreme Court of the United States, ". . . that the
modes adopted to enforce the taxes levied should be interfered with as little as possible. Any
delay in the proceedings of the officers, upon whom the duty is developed of collecting the
taxes, may derange the operations of government, and thereby, cause serious detriment to the
public." (Dows vs. Chicago, 11 Wall., 108; 20 Law. ed., 65, 66; Churchill and Tait vs. Rafferty, 32
Phil., 580.)
It results that the estate which plaintiff represents has been delinquent in the payment of
inheritance tax and, therefore, liable for the payment of interest and surcharge provided by law
in such cases.
The delinquency in payment occurred on March 10, 1924, the date when Moore became trustee.
The interest due should be computed from that date and it is error on the part of the defendant
to compute it one month later. The provisions cases is mandatory (see and cf. Lim Co Chui vs.
Posadas, supra), and neither the Collector of Internal Revenuen or this court may remit or
decrease such interest, no matter how heavily it may burden the taxpayer.

To the tax and interest due and unpaid within ten days after the date of notice and demand
thereof by the Collector of Internal Revenue, a surcharge of twenty-five per centum should be
added (sec. 1544, subsec. (b), par. 2, Revised Administrative Code). Demand was made by the
Deputy Collector of Internal Revenue upon Moore in a communiction dated October 16, 1931
(Exhibit 29). The date fixed for the payment of the tax and interest was November 30, 1931.
November 30 being an official holiday, the tenth day fell on December 1, 1931. As the tax and
interest due were not paid on that date, the estate became liable for the payment of the
surcharge.
In view of the foregoing, it becomes unnecessary for us to discuss the fifth error assigned by the
plaintiff in his brief.
We shall now compute the tax, together with the interest and surcharge due from the estate of
Thomas Hanley inaccordance with the conclusions we have reached.
At the time of his death, the deceased left real properties valued at P27,920 and personal
properties worth P1,465, or a total of P29,385. Deducting from this amount the sum of P480.81,
representing allowable deductions under secftion 1539 of the Revised Administrative Code, we
have P28,904.19 as the net value of the estate subject to inheritance tax.
The primary tax, according to section 1536, subsection (c), of the Revised Administrative Code,
should be imposed at the rate of one per centum upon the first ten thousand pesos and two per
centum upon the amount by which the share exceed thirty thousand pesos, plus an additional
two hundred per centum. One per centum of ten thousand pesos is P100. Two per centum of
P18,904.19 is P378.08. Adding to these two sums an additional two hundred per centum, or
P965.16, we have as primary tax, correctly computed by the defendant, the sum of P1,434.24.
To the primary tax thus computed should be added the sums collectible under section 1544 of
the Revised Administrative Code. First should be added P1,465.31 which stands for interest at
the rate of twelve per centum per annum from March 10, 1924, the date of delinquency, to
September 15, 1932, the date of payment under protest, a period covering 8 years, 6 months and
5 days. To the tax and interest thus computed should be added the sum of P724.88, representing
a surhcarge of 25 per cent on both the tax and interest, and also P10, the compromise sum fixed
by the defendant (Exh. 29), giving a grand total of P3,634.43.
As the plaintiff has already paid the sum of P2,052.74, only the sums of P1,581.69 is legally due
from the estate. This last sum is P390.42 more than the amount demanded by the defendant in
his counterclaim. But, as we cannot give the defendant more than what he claims, we must hold
that the plaintiff is liable only in the sum of P1,191.27 the amount stated in the counterclaim.
The judgment of the lower court is accordingly modified, with costs against the plaintiff in both
instances. So ordered.
Avancea, C.J., Abad Santos, Imperial, Diaz and Concepcion, JJ., concur.
Villa-Real, J., concurs.

SECOND DIVISION

[G.R. No. 129008. January 13, 2004]

TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband ZALDY

EVANGELISTA, ALBERTO ORFINADA, and ROWENA O. UNGOS, assisted by her
husband BEDA UNGOS, petitioners, vs. COURT OF APPEALS, ESPERANZA P.
ORFINADA, LOURDES P. ORFINADA, ALFONSO ORFINADA, NANCY P.
ORFINADA, ALFONSO JAMES P. ORFINADA, CHRISTOPHER P. ORFINADA and
ANGELO P. ORFINADA,respondents.
DECISION
TINGA, J.:
Whether the heirs may bring suit to recover property of the estate pending the appointment
of an administrator is the issue in this case.
This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks to set aside
the Decision[1] of the Court of Appeals in CA-G.R. SP No. 42053 dated January 31, 1997, as well
as its Resolution[2] dated March 26, 1997, denying petitioners motion for reconsideration.
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will in Angeles City leaving
several personal and real properties located in Angeles City, Dagupan City and Kalookan
City.[3] He also left a widow, respondent Esperanza P. Orfinada, whom he married on July 11,
1960 and with whom he had seven children who are the herein respondents, namely: Lourdes
P. Orfinada, Alfonso Clyde P. Orfinada, Nancy P. Orfinada-Happenden, Alfonso James P.
Orfinada, Christopher P. Orfinada, Alfonso Mike P. Orfinada (deceased) and Angelo P.
Orfinada.[4]
Apart from the respondents, the demise of the decedent left in mourning his paramour and
their children. They are petitioner Teodora Riofero, who became a part of his life when he
entered into an extra-marital relationship with her during the subsistence of his marriage to
Esperanza sometime in 1965, and co-petitioners Veronica[5], Alberto and Rowena.[6]
On November 14, 1995, respondents Alfonso James and Lourdes Orfinada discovered that
on June 29, 1995, petitioner Teodora Rioferio and her children executed an Extrajudicial
Settlement of Estate of a Deceased Person with Quitclaim involving the properties of the estate of the
decedent located in Dagupan City and that accordingly, the Registry of Deeds in Dagupan
issued Certificates of Titles Nos. 63983, 63984 and 63985 in favor of petitioners Teodora Rioferio,
Veronica Orfinada-Evangelista, Alberto Orfinada and Rowena Orfinada-Ungos. Respondents
also found out that petitioners were able to obtain a loan of P700,000.00 from the Rural Bank of
Mangaldan Inc. by executing a Real Estate Mortgage over the properties subject of the extrajudicial settlement.[7]

On December 1, 1995, respondent Alfonso Clyde P. Orfinada III filed a Petition for Letters of
Administration docketed as S.P. Case No. 5118 before the Regional Trial Court of Angeles City,
praying that letters of administration encompassing the estate of Alfonso P. Orfinada, Jr. be
issued to him.[8]
On December 4, 1995, respondents filed a Complaint for the Annulment/Rescission of Extra
Judicial Settlement of Estate of a Deceased Person with Quitclaim, Real Estate Mortgage and
Cancellation of Transfer Certificate of Titles with Nos. 63983, 63985 and 63984 and Other Related
Documents with Damages against petitioners, the Rural Bank of Mangaldan, Inc. and the
Register of Deeds of Dagupan City before the Regional Trial Court, Branch 42, Dagupan City.[9]
On February 5, 1996, petitioners filed their Answer to the aforesaid complaint interposing
the defense that the property subject of the contested deed of extra-judicial settlement pertained
to the properties originally belonging to the parents of Teodora Riofero[10] and that the titles
thereof were delivered to her as an advance inheritance but the decedent had managed to
register them in his name.[11] Petitioners also raised the affirmative defense that respondents are
not the real parties-in-interest but rather the Estate of Alfonso O. Orfinada, Jr. in view of the
pendency of the administration proceedings.[12] On April 29, 1996, petitioners filed a Motion to
Set Affirmative Defenses for Hearing[13] on the aforesaid ground.
The lower court denied the motion in its Order[14] dated June 27, 1996, on the ground that
respondents, as heirs, are the real parties-in-interest especially in the absence of an
administrator who is yet to be appointed in S.P. Case No. 5118. Petitioners moved for its
reconsideration[15] but the motion was likewise denied.[16]
This prompted petitioners to file before the Court of Appeals their Petition for
Certiorari under Rule 65 of the Rules of Court docketed as CA G.R. S.P. No. 42053.[17] Petitioners
averred that the RTC committed grave abuse of discretion in issuing the assailed order which
denied the dismissal of the case on the ground that the proper party to file the complaint for the
annulment of the extrajudicial settlement of the estate of the deceased is the estate of the
decedent and not the respondents.[18]
The Court of Appeals rendered the assailed Decision[19] dated January 31, 1997, stating that
it discerned no grave abuse of discretion amounting to lack or excess of jurisdiction by the
public respondent judge when he denied petitioners motion to set affirmative defenses for
hearing in view of its discretionary nature.
A Motion for Reconsideration was filed by petitioners but it was denied.[20] Hence, the petition
before this Court.
The issue presented by the petitioners before this Court is whether the heirs have legal
standing to prosecute the rights belonging to the deceased subsequent to the commencement of
the administration proceedings.[21]
Petitioners vehemently fault the lower court for denying their motion to set the case for
preliminary hearing on their affirmative defense that the proper party to bring the action is the
estate of the decedent and not the respondents. It must be stressed that the holding of a
preliminary hearing on an affirmative defense lies in the discretion of the court. This is clear
from the Rules of Court, thus:

SEC. 5. Pleadings grounds as affirmative defenses.- Any of the grounds for dismissal provided
for in this rule, except improper venue, may be pleaded as an affirmative defense, and a
preliminary hearingmay be had thereon as if a motion to dismiss had been filed.[22] (Emphasis
supplied.)
Certainly, the incorporation of the word may in the provision is clearly indicative of the
optional character of the preliminary hearing. The word denotes discretion and cannot be
construed as having a mandatory effect.[23] Subsequently, the electivity of the proceeding was
firmed up beyond cavil by the 1997 Rules of Civil Procedure with the inclusion of the phrase in
the discretion of the Court, apart from the retention of the word may in Section 6,[24] in Rule 16
thereof.
Just as no blame of abuse of discretion can be laid on the lower courts doorstep for not
hearing petitioners affirmative defense, it cannot likewise be faulted for recognizing the legal
standing of the respondents as heirs to bring the suit.
Pending the filing of administration proceedings, the heirs without doubt have legal
personality to bring suit in behalf of the estate of the decedent in accordance with the provision
of Article 777 of the New Civil Code that (t)he rights to succession are transmitted from the
moment of the death of the decedent. The provision in turn is the foundation of the principle
that the property, rights and obligations to the extent and value of the inheritance of a person
are transmitted through his death to another or others by his will or by operation of law.[25]
Even if administration proceedings have already been commenced, the heirs may still bring
the suit if an administrator has not yet been appointed. This is the proper modality despite the
total lack of advertence to the heirs in the rules on party representation, namely Section 3, Rule
3[26] and Section 2, Rule 87[27] of the Rules of Court. In fact, in the case of Gochan v. Young,[28] this
Court recognized the legal standing of the heirs to represent the rights and properties of the
decedent under administration pending the appointment of an administrator. Thus:
The above-quoted rules,[29] while permitting an executor or administrator to represent or to
bring suits on behalf of the deceased, do not prohibit the heirs from representing the
deceased. These rules are easily applicable to cases in which an administrator has already
been appointed. But no rule categorically addresses the situation in which special
proceedings for the settlement of an estate have already been instituted, yet no administrator
has been appointed. In such instances, the heirs cannot be expected to wait for the appointment
of an administrator; then wait further to see if the administrator appointed would care enough
to file a suit to protect the rights and the interests of the deceased; and in the meantime do
nothing while the rights and the properties of the decedent are violated or dissipated.
Even if there is an appointed administrator, jurisprudence recognizes two exceptions, viz:
(1) if the executor or administrator is unwilling or refuses to bring suit;[30] and (2) when the
administrator is alleged to have participated in the act complained of[31] and he is made a party
defendant.[32] Evidently, the necessity for the heirs to seek judicial relief to recover property of
the estate is as compelling when there is no appointed administrator, if not more, as where
there is an appointed administrator but he is either disinclined to bring suit or is one of the
guilty parties himself.

All told, therefore, the rule that the heirs have no legal standing to sue for the recovery of
property of the estate during the pendency of administration proceedings has three exceptions,
the third being when there is no appointed administrator such as in this case.
As the appellate court did not commit an error of law in upholding the order of the lower
court, recourse to this Court is not warranted.
WHEREFORE, the petition for review is DENIED. The assailed decision and resolution of
the Court of Appeals are hereby AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.

[1]

Rollo, pp. 17-20.

[2]

Id, at 21-22.

[3]

Id. at 95.

[4]

Ibid.

[5]

The Complaint for Annulment/Rescission of the Extrajudicial Settlement of the Estate of a

Deceased Person dated December 2, 1995 contains an allegation under paragraph 9 that
Veronica is not one of the illegitimate children of the decedent Alfonso P. Orfinada, Jr.
by Teodora Riofero but of one Alonzo Orfinada.

[6]

Rollo, p. 95.

[7]

Id. at 95-96.

[8]

Id. at 96.

[9]

Id. at 28-37.

[10]

CA Rollo, p. 38.

[11]

Id. at 10.

[12]

Id. at 38.

[13]

Rollo, pp. 107-108.

[14]

CA Rollo, pp. 113-116.

[15]

Id. at 32-34.

[16]

Id. at 39-40.

[17]

Id. at 1-12.

[18]

Id. at 7.

[19]

Rollo, pp. 17-20.

[20]

Id. at 21-22.

[21]

Id. at 124.

[22]

Rule 16 of the Rules of Court. It is Section 6, Rule 16 of the 1997 Rules of Civil Procedure
which reads:

Section 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed, any
of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative
defense in the answer and, in the discretion of the court, a preliminary hearing may be
had thereon as if a motion to dismiss had been filed.
The dismissal of the complaint under this section shall be without prejudice to the prosecution
in the same or separate action of a counterclaim pleaded in the answer. (Emphasis
supplied)
[23]

Republic Planters Bank v. Agana, Sr., G.R. No. 51765, 269 SCRA 1, 12 (1997).

[24]

Supra note 22.

[25]

Coronel v. Court of Appeals, G.R. No. 103577, October 7, 1996, 263 SCRA 15.

[26]

Section 3 of Rule 3 of the Rules of Court:

Sec. 3. Representatives as parties. - Where the action is allowed to be prosecuted or defended by

a representative or someone acting in a fiduciary capacity, the beneficiary shall be
included in the title of the case and shall be deemed to be the real party in interest. A
representative may be a trustee of an express trust, a guardian, an executor or
administrator, or a party authorized by law or these Rules. An agent acting in his own
name and for the benefit of an undisclosed principal may sue or be sued without joining
the principal except when the contract involves things belonging to the principal.
[27]

Section 2 of Rule 87:

Sec. 2. Executor or administrator may bring or defend actions which survive. For the recovery
or protection of the property or rights of the deceased, an executor or administrator may
bring or defend, in the right of the deceased, actions for causes which survive.
[28]

G.R. No. 131889, March 12, 2001, 354 SCRA 207.

[29]

Supra, note 26.

[30]

Pascual v. Pascual, 73 Phil. 561 (1942).

[31]

Velasquez v. George, G.R. No. L-62376, October 27, 1983, 125 SCRA 456.

[32]

Borromeo v. Borromeo, 98 Phil 432 (1956).

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 165554

July 26, 2010

LAZARO PASCO and LAURO PASCO, Petitioners,

vs.
HEIRS OF FILOMENA DE GUZMAN, represented by CRESENCIA DE GUZMANPRINCIPE, Respondents.
DECISION
DEL CASTILLO, J.:
No court should shield a party from compliance with valid obligations based on wholly
unsubstantiated claims of mistake or fraud. Having refused to abide by a compromise
agreement, the aggrieved party may either enforce it or regard it as rescinded and insist upon
the original demand.
This Petition for Review on Certiorari1 assails the May 13, 2004 Decision2 of the Court of Appeals
(CA) and its October 5, 2004 Resolution3 in CA-G.R. SP No. 81464 which dismissed petitioners
appeal and affirmed the validity of the parties Compromise Agreement.
Factual Antecedents
The present petition began with a Complaint for Sum of Money and Damages4 filed on
December 13, 2000 by respondents, the heirs of Filomena de Guzman (Filomena), represented
by Cresencia de Guzman-Principe (Cresencia), against petitioners Lauro Pasco (Lauro) and
Lazaro Pasco (Lazaro). The case was filed before the Municipal Trial Court (MTC) of Bocaue,
Bulacan, and docketed as Civil Case No. MM-3191.5
In their Complaint,6 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. Despite numerous demands,
petitioners refused to either pay the balance of the loan or surrender the Isuzu Jeep to the
respondents. Thus, respondents were constrained to file the collection case to compel the
petitioners to pay the principal amount of P140,000.00 plus damages in the amount of 5%
monthly interest from February 7, 1997, 25% attorneys fees, exemplary damages, and expenses
of litigation.
Filomenas heirs, consisting of Avelina de Guzman-Cumplido, Cecilia de Guzman, Rosita de
Guzman, Natividad de Guzman, and Cresencia de Guzman-Principe, authorized Cresencia to
act as their attorney-in-fact through a Special Power of Attorney7 (SPA) dated April 6, 1999. The
SPA authorized Cresencia to do the following on behalf of the co-heirs:
1) To represent us on all matters concerning the intestate estate of our deceased sister,
Filomena de Guzman;

2) To file cases for collection of all accounts due said Filomena de Guzman or her estate,
including the power to file petition for foreclosure of mortgaged properties;
3) To do and perform all other acts necessary to carry out the powers hereinabove
conferred.
During the pre-trial of the case on February 15, 2002, the parties verbally agreed to settle the
case. On February 21, 2002, the parties jointly filed a Compromise Agreement8 that was signed
by the parties and their respective counsel. Said Compromise Agreement, approved by the
MTC in an Order9 dated April 4, 2002, contained the following salient provisions:
1. That [petitioners] admit their principal loan and obligation to the [respondents] in the
sum of One Hundred Forty Thousand Pesos (P140,000.00) Philippine currency; in
addition to the incidental and other miscellaneous expenses that they have incurred in
the pursuit of this case, in the further sum ofP18,700.00;
2. That, [petitioners] undertake to pay to the [respondents] their aforementioned
obligations, together with attorneys fees equivalent to ten percentum (10%) of the total
sum thereof, directly at the BULACAN OFFICE of the [respondents] counsel, located at
No. 24 Hornbill Street, St. Francis Subdivision, Bo. Pandayan, Meycauayan, Bulacan,
WITHOUT NEED OF FURTHER DEMAND in the following specific manner, to wit:
P60,000.00 to be paid on or before May 15, 2002
P10,000.00 monthly payments thereafter, starting June 15, 2002 up to and until
the aforementioned obligations shall have been fully paid;
3. That, provided that [petitioners] shall truely [sic] comply with the foregoing
specifically agreed manner of payments, [respondents] shall forego and waive all the
interests charges of 5% monthly from February 7, 1998 and the 25% attorneys fees
provided for in Annex "AA" of the Complaint;
4. In the event of failure on the part of the [petitioners] to comply with any of the specific
provisions of this Compromise Agreement, the [respondents] shall be entitled to the
issuance of a "Writ of Execution" to enforce the satisfaction of [petitioners] obligations,
as mentioned in paragraph 1, together with the 5% monthly interests charges and
attorneys fees mentioned in paragraph 3 thereof.10
Ruling of the Municipal Trial Court
Unfortunately, this was not the end of litigation. On May 2, 2002, petitioners filed a verified
Motion to Set Aside Decision11 alleging that the Agreement was written in a language not
understood by them, and the terms and conditions thereof were not fully explained to them.
Petitioners further questioned the MTCs jurisdiction, arguing that the total amount allegedly
covered by the Compromise Agreement amounted to P588,500.00, which exceeded the
MTCs P200,000.00 jurisdictional limit. In an Order12 dated June 28, 2002, the MTC denied the
motion; it also granted Cresencias prayer for the issuance of a writ of execution. The writ of

execution13 was subsequently issued on July 3, 2002. Petitioners Motion for Reconsideration
and to Quash Writ/Order of Execution14 dated August 1, 2002 was denied by the MTC in an
Order15 dated September 5, 2002.
Undeterred, on October 10, 2002, petitioners filed a Petition for Certiorari and Prohibition with
Application for Temporary Restraining Order/Preliminary Injunction16 before the Regional
Trial Court (RTC) of Bocaue. The case was raffled to Branch 82,17 and docketed as Civil Case No.
764-M-2002. In their petition, petitioners argued that the MTC gravely abused its discretion in
approving the Compromise Agreement because (1) the amount involved was beyond the
jurisdiction of the MTC; (2) the MTC failed to ascertain that the parties fully understood the
contents of the Agreement; (3) Crescencia had no authority to represent her co-heirs because
Filomenas estate had a personality of its own; and (4) the Compromise Agreement was void for
failure of the judge and Cresencia to explain the terms and conditions to the petitioners.
In their Comment18 dated October 29, 2002, respondents argued that (1) the principal claim
of P140,000.00 was within the MTCs jurisdiction; and (2) the records reveal that it was the
petitioners themselves, assisted by their counsel, who proposed the terms of the settlement,
which offer of compromise was accepted in open court by the respondents. Thus, the
Compromise Agreement merely reduced the parties agreement into writing.
Ruling of the Regional Trial Court
The RTC initially granted petitioners prayer for the issuance of a Temporary Restraining Order
(TRO)19 on November 18, 2002, and later issued a preliminary injunction in an Order20 dated
December 10, 2002, primarily on the ground that the SPA did not specifically authorize
Cresencia to settle the case. However, Presiding Judge Herminia V. Pasamba later inhibited
herself,21 so the case was re-raffled to Branch 6, presided over by Judge Manuel D.J.
Siayngo.22 The grant of the preliminary injunction was thus reconsidered and set aside in an
Order23dated May 15, 2003. In the same Order, the RTC dismissed the petition and held that (1)
the MTC had jurisdiction over the subject matter; (2) Cresencia was authorized to institute the
action and enter into a Compromise Agreement on behalf of her co-heirs; and (3) the MTCs
approval of the Compromise Agreement was not done in a capricious, whimsical, or arbitrary
manner; thus, petitioners resort to certiorari under Rule 65 was improper. Petitioners Motion
for Reconsideration24 was denied,25 hence they sought recourse before the CA.
Ruling of the Court of Appeals
In its Decision26 dated May 13, 2004 and Resolution27 dated October 5,
2004, the CA dismissed petitioners appeal, and held that:
1) the MTC had jurisdiction, since the principal amount of the loan only amounted
to P140,000.00;
2) Cresencia was duly authorized by her co-heirs to enter into the Compromise
Agreement;

3) Petitioners improperly sought recourse before the RTC through a Petition

for Certiorari under Rule 65, when the proper remedy was a Petition for Relief from
Judgment under Rule 38.
Issues
Before us, petitioners claim that, first, they correctly resorted to the remedy of certiorari under
Rule 65; second, the RTC gravely erred in dismissing their Petition for Certiorari and
Prohibition, when the matter under consideration was merely the propriety of the grant of the
preliminary injunction; and third, that the SPA did not validly authorize Cresencia to enter into
the Compromise Agreement on behalf of her co-heirs.
Our Ruling
We deny the petition.
The MTC had jurisdiction over the case.
It bears stressing that the question of the MTCs jurisdiction has not been raised before this
Court; hence, petitioners appear to have admitted that the MTC had jurisdiction to approve the
Compromise Agreement. In any event, it is beyond dispute that the Judiciary Reorganization
Act of 1980, or Batas Pambansa (BP) Blg. 129,28 as amended by Republic Act No. 7691,29 fixes the
MTCs jurisdiction over cases where "the demand does not exceed Two hundred thousand
pesos (P200,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses, and costs."30 Thus, respondents initiatory complaint, covering the principal amount
ofP140,000.00, falls squarely within the MTCs jurisdiction.
Petitioners properly resorted to the special civil action of certiorari.
On the first question, the CA held that the proper remedy from the MTCs Order approving the
Compromise Agreement was a Petition for Relief from Judgment under Rule 38 and not a
Petition for Certiorari under Rule 65. We recall that petitioners filed a verified Motion to Set
Aside Decision on May 2, 2002,31 which was denied by the MTC on June 28, 2002. This Order of
denial was properly the subject of a petition for certiorari, pursuant to Rule 41, Section 1, of the
Rules of Court:
Section 1. Subject of Appeal An appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by these Rules
to be appealable.
No appeal may be taken from:
xxxx
(e) an order denying a motion to set aside a judgment by consent, confession or compromise on
the ground of fraud, mistake or duress, or any other ground vitiating consent.

xxxx
In all the above instances where the judgment or final order is not appealable, the aggrieved
party may file an appropriate special civil action under Rule 65.
From the express language of Rule 41, therefore, the MTCs denial of petitioners Motion to Set
Aside Decision could not have been appealed. Indeed, a decision based on a compromise
agreement is immediately final and executory and cannot be the subject of appeal,32 for when
parties enter into a compromise agreement and request a court to render a decision on the basis
of their agreement, it is presumed that such action constitutes a waiver of the right to appeal
said decision.33 While there may have been other remedies available to assail the
decision,34 petitioners were well within their rights to institute a special civil action under Rule
65.
The Regional Trial Court rightly dismissed the petition for certiorari.
On the second issue, petitioners argue that the RTC, in reconsidering the order granting the
application for writ of preliminary injunction, should not have gone so far as dismissing the
main case filed by the petitioners. They claim that the issue in their application for writ of
preliminary injunction was different from the issues in the main case for certiorari, and that the
dissolution of the preliminary injunction should have been without prejudice to the conduct of
further proceedings in the main case. They also claim that the RTC did not have the power to
dismiss the case without requiring the parties to file memoranda.
These assertions are belied, however, by petitioners own submissions.
Their arguments were exactly the same, whether relating to the preliminary or permanent
injunction. Identical matters were at issue the MTCs jurisdiction, petitioners alleged vitiated
consent, and the propriety of enforcing the Compromise Agreement. The reliefs sought, too,
were the same, that is, the grant of an injunction against the enforcement of the compromise:35
WHEREFORE, it is most respectfully prayed that:
1) A Temporary Restraining Order and/or Preliminary Injunction issue ex parte
directing the respondents to cease and desist from enforcing, executing, or
implementing in any manner the Decision dated April 4, 2002 and acting in Civil Case
No. MM-3191 until further orders from this Honorable Court.
2) After hearing, the temporary restraining order/ex parte injunction be replaced by a
writ of preliminary injunction.
3) After hearing on the merits, judgment be rendered:
a. Making the injunction permanent.
Since the RTC found at the preliminary injunction phase that petitioners were not entitled to an
injunction (whether preliminary or permanent), that petitioners arguments were insufficient to

support the relief sought, and that the MTCs approval of the Compromise Agreement was not
done in a capricious, whimsical, or arbitary manner, the RTC was not required to engage in
unnecessary duplication of proceedings. As such, it rightly dismissed the petition.
In addition, nothing in the Rules of Court commands the RTC to require the parties to file
Memoranda. Indeed, Rule 65, Sec. 8 is explicit in that the court "may dismiss the petition if it
finds the same to be patently without merit, prosecuted manifestly for delay, or that the
questions raised therein are too unsubstantial to require consideration."36
Cresencia was authorized to enter into the Compromise Agreement.
As regards the third issue, petitioners maintain that the SPA was fatally defective because
Cresencia was not specifically authorized to enter into a compromise agreement. Here, we fully
concur with the findings of the CA that:
x x x It is undisputed that Cresencias co-heirs executed a Special Power of Attorney, dated 6
April 1999, designating the former as their attorney-in-fact and empowering her to file cases for
collection of all the accounts due to Filomena or her estate. Consequently, Cresencia entered
into the subject Compromise Agreement in order to collect the overdue loan obtained by Pasco
from Filomena. In so doing, Cresencia was merely performing her duty as attorney-in-fact of
her co-heirs pursuant to the Special Power of Attorney given to her.371avvphi1
Our ruling in Trinidad v. Court of Appeals38 is illuminating. In Trinidad, 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.39 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, we note 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
self-servingly - claimed that the SPA was insufficient.
The stated interest rate should be reduced.
Although the petition is unmeritorious, we find the 5% monthly interest rate stipulated in
Clause 4 of the Compromise Agreement to be iniquitous and unconscionable. Accordingly, the
legal interest of 12% per annum must be imposed in lieu of the excessive interest stipulated in
the agreement. As we held in Castro v. Tan:40

In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable

interests are contrary to morals, if not against the law. In Medel v. Court of Appeals, we annulled a
stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan and a 6% per month
or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous,
unconscionable and exorbitant. In Ruiz v. Court of Appeals, we declared a 3% monthly interest
imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to
12% per annum.
In this case, the 5% monthly interest rate, or 60% per annum, compounded monthly, stipulated
in the Kasulatan is even higher than the 3% monthly interest rate imposed in the Ruiz case. Thus,
we similarly hold the 5% monthly interest to be excessive, iniquitous, unconscionable and
exorbitant, contrary to morals, and the law. It is therefore void ab initio for being violative of
Article 1306 of the Civil Code. x x x (citations omitted)
The proceeds of the loan should be released to Filomenas heirs only upon settlement of her
estate.
Finally, it is true that Filomenas estate has a different juridical personality than that of the heirs.
Nonetheless, her heirs certainly have an interest in the preservation of the estate and the
recovery of its properties,41 for at the moment of Filomenas death, the heirs start to own the
property, subject to the decedent's liabilities. In this connection, Article 777 of the Civil Code
states that "[t]he rights to the succession are transmitted from the moment of the death of the
decedent."42
Unfortunately, the records before us do not show the status of the proceedings for the
settlement of the estate of Filomena, if any. But to allow the release of the funds directly to the
heirs would amount to a distribution of the estate; which distribution and delivery should be
made only after, not before, the payment of all debts, charges, expenses, and taxes of the estate
have been paid.43 We thus decree that respondent Cresencia should deposit the amounts
received from the petitioners with the MTC of Bocaue, Bulacan and in turn, the MTC of Bocaue,
Bulacan should hold in abeyance the release of the amounts to Filomenas heirs until after a
showing that the proper procedure for the settlement of Filomenas estate has been followed.
WHEREFORE, the petition is DENIED. The May 13, 2004 Decision of the Court of Appeals and
its October 5, 2004 Resolution are AFFIRMED with MODIFICATIONS that the interest rate of
5% per month (60% per annum) is ordered reduced to 12 % per annum. Respondent Cresencia
De Guzman-Principe is DIRECTED to deposit with the Municipal Trial Court of Bocaue,
Bulacan the amounts received from the petitioners. The Municipal Trial Court of Bocaue,
Bulacan is likewise DIRECTED to hold in abeyance the release of any amounts recovered from
the petitioners until after a showing that the procedure for settlement of estates of Filomena de
Guzmans estate has been followed, and after all charges on the estate have been fully satisfied.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

WE CONCUR:
RENATO C. CORONA
Chief Justice
PRESBITERO J. VELASCO, JR.
Associate Justice

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

JOSE P. PEREZ
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions
in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice

Footnotes
1

Rollo, pp. 8-27.

Id. at 29-36; penned by Associate Justice Perlita J. Tria Tirona and concurred in by
Associate Justices B.A. Adefuin-de la Cruz and Arturo D. Brion (now a Member of this
Court).
2

Id. at 38-40; penned by Associate Justice Perlita J. Tria Tirona and concurred in by
Associate Justices Arturo D. Brion and Japar B. Dimaampao.
3

Records, pp. 89-92.

Presided over by Judge Lauro G. Bernardo.

Records, p. 93. See Kasulatan ng Sanglaan ng Ari-Ariang Natitinag, Annex "A" of the
Complaint. The records do not contain the date of Filomena de Guzmans death.
6

Id. at 133.

Id. at 94-95.

Id. at 19-20.

10

Id.

11

Id. at 25-29.

12

Id. at 21-23.

13

Id. at 37-38.

14

Id. at 32-36.

15

Id. at 30.

16

Id. at 3-18.

17

Presided over by Judge Herminia V. Pasamba.

18

Records, pp. 70-77.

19

Id. at 98-100.

20

Id. at 141-143.

21

Order dated January 24, 2003, id. at 179.

22

Order dated February 6, 2003, id. at 183.

23

Id. at 207-211.

24

Id. at 214-227.

25

Order dated September 5, 2003, id. at 241-244.

26

Rollo, at 29-36.

27

Id. at 38-40.

An Act Reorganizing The Judiciary, Appropriating Funds Therefor, And For Other
Purposes.
28

An Act Expanding The Jurisdiction Of The Metropolitan Trial Courts, Municipal Trial
Courts, And Municipal Circuit Trial Courts, Amending For The Purpose Batas
Pambansa Blg. 129, Otherwise Known As The "Judiciary Reorganization Act Of 1980"
(1994).
29

30

Section 33 of BP No. 129, as amended, provides:

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in civil cases. Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate
proceedings, testate and intestate, including the grant of provisional
remedies in proper cases, where the value of the personal property,
estate, or amount of the demand does not exceed One hundred thousand
pesos (P100,000.00) or, in Metro Manila where such personal property,
estate, or amount of the demand does not exceed Two hundred thousand
pesos (P200,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and costs, the amount of which must
be specifically alleged: Provided, That where there are several claims or
causes of action between the same or different parties, embodied in the
same complaint, the amount of the demand shall be the totality of the
claims in all the causes of action, irrespective of whether the causes of
action arose out of the same or different transactions;
31

Records, pp. 25-29.

32

Hon. Abarintos v. Court of Appeals, 374 Phil. 157, 169 (1999).

33

Cadano v. Cadano, 151 Phil. 156, (1973).

34

For instance, remedies under Rules 38 or 47 of the Rules of Court.

35

Records, p. 15.

36

Rule 65, Sec. 8 of the Rules of Court provides:

Sec. 8. Proceedings after comment is filed.
After the comment or other pleadings required by the court are filed, or the time
for the filing thereof has expired, the court may hear the case or require the
parties to submit memoranda. If after such hearing or submission of memoranda
or the expiration of the period for the filing thereof the court finds that the
allegations of the petition are true, it shall render judgment for the relief prayed
for or to which the petitioner is entitled.
The court, however, may dismiss the petition if it finds the same to be patently
without merit, prosecuted manifestly for delay, or that the questions raised
therein are too unsubstantial to require consideration.

37

Rollo, p. 34.

38

411 Phil. 44, 50-51 (2001).

A reading of the special power of attorney, as well as the concurrent turn of events,
would precisely point to the fact that the special power of attorney was intended to have
Nenita Trinidad help resolve the differences of the parties in the contract to sell.
39

40

G.R. No. 168940, November 24, 2009, 605 SCRA 231, 238.

41

Palicte v. Judge Ramolete, 238 Phil. 128, 134 (1987).

The possession of hereditary property is deemed transmitted to the heir without

interruption and from the moment of the death of the decedent, in case the inheritance is
accepted (Civil Code of the Philippines, Art. 533). Where there are two or more heirs, the
whole estate of the decedent is, before its partition, owned in common by such heirs. See
Acebedo v. Abesamis, G.R. No. 102380, January 18, 1993, 217 SCRA 186, 194-195;
Mendoza I v. Court of Appeals, G.R. No. 44664, July 31, 1991, 199 SCRA 778, 787; Civil
Code of the Philippines, Art. 1078.
42

Rules of Court, Rule 90, Section 1; Lat v. Court of Appeals and Banzuela, 115 Phil. 205,
209 (1962).
43

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168970

January 15, 2010

CELESTINO BALUS, Petitioner,

vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE CALUNOD, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the
Decision1 of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which set
aside the February 7, 1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte,
Branch 4 in Civil Case No. 3263.
The facts of the case are as follows:
Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus.
Sebastiana died on September 6, 1978, while Rufo died on July 6, 1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he
obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was

originally covered by Original Certificate of Title No. P-439(788) and more particularly
described as follows:
A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares, more
or less, situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as follows:
Bounded on the NE., along line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River;
along line 12-13 by Lot 4649, Csd-292; and along line 12-1, by Lot 4661, Csd-292. x x x 2
Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was
subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. On
November 20, 1981, a Certificate of Sale3was executed by the sheriff in favor of the Bank. The
property was not redeemed within the period allowed by law. More than two years after the
auction, or on January 25, 1984, the sheriff executed a Definite Deed of Sale4 in the Bank's favor.
Thereafter, a new title was issued in the name of the Bank.
On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of
Estate5adjudicating to each of them a specific one-third portion of the subject property
consisting of 10,246 square meters. The Extrajudicial Settlement also contained provisions
wherein the parties admitted knowledge of the fact that their father mortgaged the subject
property to the Bank and that they intended to redeem the same at the soonest possible time.
Three years after the execution of the Extrajudicial Settlement, herein respondents bought the
subject property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land6 was
executed by the Bank in favor of respondents. Subsequently, Transfer Certificate of Title (TCT)
No. T-39,484(a.f.)7 was issued in the name of respondents. Meanwhile, petitioner continued
possession of the subject lot.
On June 27, 1995, respondents filed a Complaint8 for Recovery of Possession and Damages
against petitioner, contending that they had already informed petitioner of the fact that they
were the new owners of the disputed property, but the petitioner still refused to surrender
possession of the same to them. Respondents claimed that they had exhausted all remedies for
the amicable settlement of the case, but to no avail.
On February 7, 1997, the RTC rendered a Decision9 disposing as follows:
WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale in
favor of the defendant, the one-third share of the property in question, presently possessed by
him, and described in the deed of partition, as follows:
A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original
Certificate of Title No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de
Calunod, situated at Lagundang, Bunawan, Iligan City, bounded on the North by Lot 5122; East
by shares of Saturnino Balus and Leonarda Balus-Calunod; South by Lot 4649, Dodiongan
River; West by Lot 4661, consisting of 10,246 square meters, including improvements thereon.
and dismissing all other claims of the parties.

The amount of P6,733.33 consigned by the defendant with the Clerk of Court is hereby ordered
delivered to the plaintiffs, as purchase price of the one-third portion of the land in question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
The RTC held that the right of petitioner to purchase from the respondents his share in the
disputed property was recognized by the provisions of the Extrajudicial Settlement of Estate,
which the parties had executed before the respondents bought the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA.
On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting
aside the Decision of the RTC and ordering petitioner to immediately surrender possession of
the subject property to the respondents. The CA ruled that when petitioner and respondents did
not redeem the subject property within the redemption period and allowed the consolidation of
ownership and the issuance of a new title in the name of the Bank, their co-ownership was
extinguished.
Hence, the instant petition raising a sole issue, to wit:
WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE
RESPONDENTS OVER THE PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN AFTER
THE TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF THE PARTIES' AGREEMENT
PRIOR TO THE REPURCHASE THEREOF BY THE RESPONDENTS; THUS, WARRANTING
THE PETITIONER'S ACT OF ENFORCING THE AGREEMENT BY REIMBURSING THE
RESPONDENTS OF HIS (PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership by him and respondents over the
subject property persisted even after the lot was purchased by the Bank and title thereto
transferred to its name, and even after it was eventually bought back by the respondents from
the Bank.
Petitioner insists that despite respondents' full knowledge of the fact that the title over the
disputed property was already in the name of the Bank, they still proceeded to execute the
subject Extrajudicial Settlement, having in mind the intention of purchasing back the property
together with petitioner and of continuing their co-ownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract between
him and respondents, because it contains a provision whereby the parties agreed to continue
their co-ownership of the subject property by "redeeming" or "repurchasing" the same from the
Bank. This agreement, petitioner contends, is the law between the parties and, as such, binds the
respondents. As a result, petitioner asserts that respondents' act of buying the disputed
property from the Bank without notifying him inures to his benefit as to give him the right to
claim his rightful portion of the property, comprising 1/3 thereof, by reimbursing respondents
the equivalent 1/3 of the sum they paid to the Bank.

The Court is not persuaded.

Petitioner and respondents are arguing on the wrong premise that, at the time of the execution
of the Extrajudicial Settlement, the subject property formed part of the estate of their deceased
father to which they may lay claim as his heirs.
At the outset, it bears to emphasize that there is no dispute with respect to the fact that the
subject property was exclusively owned by petitioner and respondents' father, Rufo, at the time
that it was mortgaged in 1979. This was stipulated by the parties during the hearing conducted
by the trial court on October 28, 1996.12 Evidence shows that a Definite Deed of Sale13 was
issued in favor of the Bank on January 25, 1984, after the period of redemption expired. There is
neither any dispute that a new title was issued in the Bank's name before Rufo died on July 6,
1984. Hence, there is no question that the Bank acquired exclusive ownership of the contested
lot during the lifetime of Rufo.
The rights to a person's succession are transmitted from the moment of his death.14 In addition,
the inheritance of a person consists of the property and transmissible rights and obligations
existing at the time of his death, as well as those which have accrued thereto since the opening
of the succession.15 In the present case, since Rufo lost ownership of the subject property during
his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer
formed part of his estate to which his heirs may lay claim. Stated differently, petitioner and
respondents never inherited the subject lot from their father.
Petitioner and respondents, therefore, were wrong in assuming that they became co-owners of
the subject lot. Thus, any issue arising from the supposed right of petitioner as co-owner of the
contested parcel of land is negated by the fact that, in the eyes of the law, the disputed lot did
not pass into the hands of petitioner and respondents as compulsory heirs of Rufo at any given
point in time.
The foregoing notwithstanding, the Court finds a necessity for a complete determination of the
issues raised in the instant case to look into petitioner's argument that the Extrajudicial
Settlement is an independent contract which gives him the right to enforce his right to claim a
portion of the disputed lot bought by respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected by
mere consent; and from that moment, the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law.
Article 1306 of the same Code also provides that the contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided these are
not contrary to law, morals, good customs, public order or public policy.
In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate
any express stipulation for petitioner and respondents to continue with their supposed coownership of the contested lot.

On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in
any way, support petitioner's contention that it was his and his sibling's intention to buy the
subject property from the Bank and continue what they believed to be co-ownership thereof. It
is a cardinal rule in the interpretation of contracts that the intention of the parties shall be
accorded primordial consideration.16 It is the duty of the courts to place a practical and realistic
construction upon it, giving due consideration to the context in which it is negotiated and the
purpose which it is intended to serve.17 Such intention is determined from the express terms of
their agreement, as well as their contemporaneous and subsequent acts.18 Absurd and illogical
interpretations should also be avoided.19
For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his
siblings to continue what they thought was their ownership of the subject property, even after
the same had been bought by the Bank, is stretching the interpretation of the said Extrajudicial
Settlement too far.
In the first place, as earlier discussed, there is no co-ownership to talk about and no property to
partition, as the disputed lot never formed part of the estate of their deceased father.
Moreover, petitioner's asseveration of his and respondents' intention of continuing with their
supposed co-ownership is negated by no less than his assertions in the present petition that on
several occasions he had the chance to purchase the subject property back, but he refused to do
so. In fact, he claims that after the Bank acquired the disputed lot, it offered to re-sell the same
to him but he ignored such offer. How then can petitioner now claim that it was also his
intention to purchase the subject property from the Bank, when he admitted that he refused the
Bank's offer to re-sell the subject property to him?
In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the
execution thereof, the parties were not yet aware that the subject property was already
exclusively owned by the Bank. Nonetheless, the lack of knowledge on the part of petitioner
and respondents that the mortgage was already foreclosed and title to the property was already
transferred to the Bank does not give them the right or the authority to unilaterally declare
themselves as co-owners of the disputed property; otherwise, the disposition of the case would
be made to depend on the belief and conviction of the party-litigants and not on the evidence
adduced and the law and jurisprudence applicable thereto.
Furthermore, petitioner's contention that he and his siblings intended to continue their
supposed co-ownership of the subject property contradicts the provisions of the subject
Extrajudicial Settlement where they clearly manifested their intention of having the subject
property divided or partitioned by assigning to each of the petitioner and respondents a specific
1/3 portion of the same. Partition calls for the segregation and conveyance of a determinate
portion of the property owned in common. It seeks a severance of the individual interests of
each co-owner, vesting in each of them a sole estate in a specific property and giving each one a
right to enjoy his estate without supervision or interference from the other.20 In other words, the
purpose of partition is to put an end to co-ownership,21 an objective which negates petitioner's
claims in the present case.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals,
dated May 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED.
SO ORDERED
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
RENATO C. CORONA
Associate Justice
Chairperson
PRESBITERO J. VELASCO, JR.
Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

JOSE C. MENDOZA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice

Footnotes
Penned by Associate Justice Arturo G. Tayag, with Associate Justices Rodrigo F. Lim,
Jr. and Normandie B. Pizarro, concurring; CA rollo, pp. 69-76.
1

See Certificate of Sale and Definite Deed of Sale, Exhibits "A" and "B," respectively,
records, pp. 74-75.
2

Exhibit "A," records, p. 74.

Exhibit "B," id. at 75.

Exhibit "C"/"4," id. at 76.

Exhibit "D," id. at 79.

Exhibit "E," id. at 80.

Records, pp. 1-6.

Id. at 131-140.

10

Id. at 139-140.

11

Rollo, p. 21.

12

See TSN, October 28, 1996 p. 2.

13

Exhibit "B," records, p. 75.

14

Civil Code, Art. 777.

15

Civil Code, Art. 781.

16

Alio v. Heirs of Angelica A. Lorenzo, G.R. No. 159550, June 27, 2008, 556 SCRA 139, 148.

TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, February 13,
2008, 545 SCRA 215, 226.
17

18

Tating v. Marcella, G.R. No. 155208, March 27, 2007, 519 SCRA 79, 87.

19

TSPIC Corporation v. TSPIC Employees Union (FFW), supra note 17.

20

Arbolario v. Court of Appeals, 449 Phil. 357, 369 (2003).

Cruz v. Court of Appeals, G.R. No. 122904, April 15, 2005, 456 SCRA 165, 171; Lopez v.
Court of Appeals, 446 Phil. 722, 743 (2003).
21

[Syllabus]
THIRD DIVISION

[G.R. No. 103577. October 7, 1996]

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE

C. GONZALES (for herself and on behalf of Floraida C. Tupper, as attorney-in-fact),
CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAIS
MABANAG, petitioners, vs. THE COURT OF APPEALS, CONCEPCION D.
ALCARAZ and RAMONA PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as
attorney-in-fact, respondents.
DECISION
MELO, J.:
The petition before us has its roots in a complaint for specific performance to compel herein
petitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a parcel
of land with its improvements located along Roosevelt Avenue in Quezon City entered into by
the parties sometime in January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et. al. (hereinafter referred to as
Coronels) executed a document entitled Receipt of Down Payment (Exh. A) in favor of plaintiff
Ramona Patricia Alcaraz (hereinafter referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 - Total amount
50,000.00 - Down payment
-----------------------------------------P1,190,000.00 - Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand
Pesos purchase price of our inherited house and lot, covered by TCT No. 119627 of the Registry of Deeds
of Quezon City, in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased father, Constancio P. Coronel, the
transfer certificate of title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately execute the deed of absolute sale
of said property and Miss Ramona Patricia Alcaraz shall immediately pay the balance of
theP1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:

1. Ramona will make a down payment of Fifty Thousand (P50,000.00) pesos upon execution of
the document aforestated;
2. The Coronels will cause the transfer in their names of the title of the property registered in the
name of their deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down
payment;
3. Upon the transfer in their names of the subject property, the Coronels will execute the deed of
absolute sale in favor of Ramona and the latter will pay the former the whole balance of One
Million One Hundred Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafter
referred to as Concepcion), mother of Ramona, paid the down payment of Fifty Thousand
(P50,000.00) Pesos (Exh. B, Exh. 2).
On February 6, 1985, the property originally registered in the name of the Coronels father was
transferred in their names under TCT No. 327043 (Exh. D; Exh 4)
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenorappellant Catalina B. Mabanag (hereinafter referred to as Catalina) for One Million Five
Hundred Eighty Thousand (P1,580,000.00) Pesos after the latter has paid Three Hundred
Thousand (P300,000.00) Pesos (Exhs. F-3; Exh. 6-C)
For this reason, Coronels canceled and rescinded the contract (Exh. A) with Ramona by
depositing the down payment paid by Concepcion in the bank in trust for Ramona Patricia
Alcaraz.
On February 22, 1985, Concepcion, et. al., filed a complaint for a specific performance against
the Coronels and caused the annotation of a notice of lis pendens at the back of TCT No. 327403
(Exh. E; Exh. 5).
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the same
property with the Registry of Deeds of Quezon City (Exh. F; Exh. 6).
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property in
favor of Catalina (Exh. G; Exh. 7).
On June 5, 1985, a new title over the subject property was issued in the name of Catalina under
TCT No. 351582 (Exh. H; Exh. 8).
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the
parties agreed to submit the case for decision solely on the basis of documentary exhibits.Thus,
plaintiffs therein (now private respondents) proffered their documentary evidence accordingly
marked as Exhibits A through J, inclusive of their corresponding submarkings. Adopting these
same exhibits as their own, then defendants (now petitioners) accordingly offered and marked

them as Exhibits 1 through 10, likewise inclusive of their corresponding submarkings.Upon

motion of the parties, the trial court gave them thirty (30) days within which to simultaneously
submit their respective memoranda, and an additional 15 days within which to submit their
corresponding comment or reply thereto, after which, the case would be deemed submitted for
resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who
was then temporarily detailed to preside over Branch 82 of the RTC of Quezon City. OnMarch
1, 1989, judgment was handed down by Judge Roura from his regular bench at Macabebe,
Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered ordering defendant to
execute in favor of plaintiffs a deed of absolute sale covering that parcel of land embraced in
and covered by Transfer Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of
Deeds for Quezon City, together with all the improvements existing thereon free from all liens
and encumbrances, and once accomplished, to immediately deliver the said document of sale to
plaintiffs and upon receipt thereof, the plaintiffs are ordered to pay defendants the whole
balance of the purchase price amounting toP1,190,000.00 in cash. Transfer Certificate of Title
No. 331582 of the Registry of Deeds for Quezon City in the name of intervenor is hereby
canceled and declared to be without force and effect. Defendants and intervenor and all other
persons claiming under them are hereby ordered to vacate the subject property and deliver
possession thereof to plaintiffs. Plaintiffs claim for damages and attorneys fees, as well as the
counterclaims of defendants and intervenors are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners before the new presiding judge of the
Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and to render anew
decision by the undersigned Presiding Judge should be denied for the following reasons: (1)
The instant case became submitted for decision as of April 14, 1988 when the parties terminated
the presentation of their respective documentary evidence and when the Presiding Judge at that
time was Judge Reynaldo Roura. The fact that they were allowed to file memoranda at some
future date did not change the fact that the hearing of the case was terminated before Judge
Roura and therefore the same should be submitted to him for decision; (2) When the defendants
and intervenor did not object to the authority of Judge Reynaldo Roura to decide the case prior
to the rendition of the decision, when they met for the first time before the undersigned
Presiding Judge at the hearing of a pending incident in Civil Case No. Q-46145 on November
11, 1988, they were deemed to have acquiesced thereto and they are now estopped from
questioning said authority of Judge Roura after they received the decision in question which

happens to be adverse to them; (3) While it is true that Judge Reynaldo Roura was merely a
Judge-on-detail at this Branch of the Court, he was in all respects the Presiding Judge with full
authority to act on any pending incident submitted before this Court during his
incumbency. When he returned to his Official Station at Macabebe, Pampanga, he did not lose
his authority to decide or resolve cases submitted to him for decision or resolution because he
continued as Judge of the Regional Trial Court and is of co-equal rank with the undersigned
Presiding Judge. The standing rule and supported by jurisprudence is that a Judge to whom a
case is submitted for decision has the authority to decide the case notwithstanding his transfer
to another branch or region of the same court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989
rendered in the instant case, resolution of which now pertains to the undersigned Presiding
Judge, after a meticulous examination of the documentary evidence presented by the parties,
she is convinced that the Decision of March 1, 1989 is supported by evidence and, therefore,
should not be disturbed.
IN VIEW OF THE FOREGOING, the Motion for Reconsideration and/or to Annul Decision and
Render Anew Decision by the Incumbent Presiding Judge dated March 20, 1989 is hereby
DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of
Appeals (Buena, Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its decision fully agreeing with
the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private
respondents Reply Memorandum, was filed on September 15, 1993. The case was, however, reraffled to undersigned ponente only on August 28, 1996, due to the voluntary inhibition of the
Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of
respondent court in the affirmance of the trial courts decision, we definitely find the instant
petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues
in the case at bar is the precise determination of the legal significance of the document entitled
Receipt of Down Payment which was offered in evidence by both parties. There is no dispute as
to the fact that the said document embodied the binding contract between Ramona Patricia
Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, pertaining to a
particular house and lot covered by TCT No. 119627, as defined in Article 1305 of the Civil Code
of the Philippines which reads as follows:

Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.
While, it is the position of private respondents that the Receipt of Down Payment
embodied a perfected contract of sale, which perforce, they seek to enforce by means of an
action for specific performance, petitioners on their part insist that what the document signified
was a mere executory contract to sell, subject to certain suspensive conditions, and because of
the absence of Ramona P. Alcaraz, who left for the United States of America, said contract could
not possibly ripen into a contract of absolute sale.
Plainly, such variance in the contending parties contention is brought about by the way
each interprets the terms and/or conditions set forth in said private instrument. Withal, based
on whatever relevant and admissible evidence may be available on record, this Court, as were
the courts below, is now called upon to adjudge what the real intent of the parties was at the
time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere
consent. The essential elements of a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the
price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because
the first essential element is lacking. In a contract to sell, the prospective seller explicitly
reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not as
yet agree or consent to transfer ownership of the property subject of the contract to sell until the
happening of an event, which for present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to do is to fulfill his promise to sell the
subject property when the entire amount of the purchase price is delivered to him. In other
words the full payment of the purchase price partakes of a suspensive condition, the nonfulfillment of which prevents the obligation to sell from arising and thus, ownership is retained
by the prospective seller without further remedies by the prospective buyer. In Roque vs. Lapuz
(96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the respondent was a contract to
sell where the ownership or title is retained by the seller and is not to pass until the full
payment of the price, such payment being a positive suspensive condition and failure of which

is not a breach, casual or serious, but simply an event that prevented the obligation of the
vendor to convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, the prospective sellers obligation to sell the subject property by
entering into a contract of sale with the prospective buyer becomes demandable as provided in
Article 1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promissor of the promise is supported by a consideration distinct from the
price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the subject property despite delivery thereof to the
prospective buyer, binds himself to sell the said property exclusively to the prospective buyer
upon fulfillment of the condition agreed upon, that is, full payment of the purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional
contract of sale where the seller may likewise reserve title to the property subject of the sale
until the fulfillment of a suspensive condition, because in a conditional contract of sale, the first
element of consent is present, although it is conditioned upon the happening of a contingent
event which may or may not occur. If the suspensive condition is not fulfilled, the perfection of
the contract of sale is completely abated (cf. Homesite and Housing Corp. vs. Court of Appeals, 133
SCRA 777 [1984]). However, if the suspensive condition is fulfilled, the contract of sale is
thereby perfected, such that if there had already been previous delivery of the property subject
of the sale to the buyer, ownership thereto automatically transfers to the buyer by operation of
law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, ownership will not automatically transfer to the buyer although
the property may have been previously delivered to him. The prospective seller still has to
convey title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale
specially in cases where the subject property is sold by the owner not to the party the seller
contracted with, but to a third person, as in the case at bench. In a contract to sell, there being no
previous sale of the property, a third person buying such property despite the fulfillment of the
suspensive condition such as the full payment of the purchase price, for instance, cannot be
deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of
the property. There is no double sale in such case. Title to the property will transfer to the buyer
after registration because there is no defect in the owner-sellers title per se, but the latter, of
course, may be sued for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition,
the sale becomes absolute and this will definitely affect the sellers title thereto. In fact, if there
had been previous delivery of the subject property, the sellers ownership or title to the property

is automatically transferred to the buyer such that, the seller will no longer have any title to
transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer of the
property who may have had actual or constructive knowledge of such defect in the sellers title,
or at least was charged with the obligation to discover such defect, cannot be a registrant in
good faith. Such second buyer cannot defeat the first buyers title. In case a title is issued to the
second buyer, the first buyer may seek reconveyance of the property subject of the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real
nature of the contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given
their natural and ordinary meaning unless a technical meaning was intended (Tan vs. Court of
Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared in the said Receipt of Down
Payment that they -Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty
Thousand Pesos purchase price of our inherited house and lot, covered by TCT No. 1199627 of
the Registry of Deeds of Quezon City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and
ordinary idea conveyed is that they sold their property.
When the Receipt of Down payment is considered in its entirety, it becomes more manifest
that there was a clear intent on the part of petitioners to transfer title to the buyer, but since the
transfer certificate of title was still in the name of petitioners father, they could not fully effect
such transfer although the buyer was then willing and able to immediately pay the purchase
price. Therefore, petitioners-sellers undertook upon receipt of the down payment from private
respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title in their names
from that of their father, after which, they promised to present said title, now in their names, to
the latter and to execute the deed of absolute sale whereupon, the latter shall, in turn, pay the
entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no
express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title was not in their names) and not the full
payment of the purchase price. Under the established facts and circumstances of the case, the
Court may safely presume that, had the certificate of title been in the names of petitionerssellers at that time, there would have been no reason why an absolute contract of sale could not
have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise
to sell the property to private respondent upon the fulfillment of the suspensive condition. On
the contrary, having already agreed to sell the subject property, they undertook to have the
certificate of title change to their names and immediately thereafter, to execute the written deed
of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after
compliance by the buyer with certain terms and conditions, promised to sell the property to the
latter.What may be perceived from the respective undertakings of the parties to the contract is

that petitioners had already agreed to sell the house and lot they inherited from their father,
completely willing to transfer ownership of the subject house and lot to the buyer if the
documents were then in order. It just so happened, however, that the transfer certificate of title
was then still in the name of their father. It was more expedient to first effect the change in the
certificate of title so as to bear their names. That is why they undertook to cause the issuance of
a new transfer of the certificate of title in their names upon receipt of the down payment in the
amount of P50,000.00. As soon as the new certificate of title is issued in their names, petitioners
were committed to immediately execute the deed of absolute sale. Only then will the obligation
of the buyer to pay the remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into so
as to protect the seller against a buyer who intends to buy the property in installment by
withholding ownership over the property until the buyer effects full payment therefor, in the
contract entered into in the case at bar, the sellers were the ones who were unable to enter into a
contract of absolute sale by reason of the fact that the certificate of title to the property was still
in the name of their father. It was the sellers in this case who, as it were, had the impediment
which prevented, so to speak, the execution of an contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the
said Receipt of Down Payment was prepared and signed by petitioners Romulo A. Coronel,et.
al., the parties had agreed to a conditional contract of sale, consummation of which is subject
only to the successful transfer of the certificate of title from the name of petitioners father,
Constancio P. Coronel, to their names.
The Court significantly notes that this suspensive condition was, in fact, fulfilled on
February 6, 1985 (Exh. D; Exh. 4). Thus, on said date, the conditional contract of sale between
petitioners and private respondent Ramona P. Alcaraz became obligatory, the only act required
for the consummation thereof being the delivery of the property by means of the execution of
the deed of absolute sale in a public instrument, which petitioners unequivocally committed
themselves to do as evidenced by the Receipt of Down Payment.
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the
case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions
of the law governing the form of contracts.
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or
loss of those already acquired, shall depend upon the happening of the event which constitutes
the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title
in petitioners names was fulfilled on February 6, 1985, the respective obligations of the parties
under the contract of sale became mutually demandable, that is, petitioners, as sellers, were
obliged to present the transfer certificate of title already in their names to private respondent
Ramona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale, while the

buyer on her part, was obliged to forthwith pay the balance of the purchase price amounting
to P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners
conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves to effect the transfer in our names
from our deceased father Constancio P. Coronel, the transfer certificate of title
immediately upon receipt of the downpayment above-stated". The sale was still
subject to this suspensive condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a
suspensive condition. Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first transferring the title to the
property under their names, there could be no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for themselves, for Article 1186 of the Civil Code
expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its
fulfillment.
Besides, it should be stressed and emphasized that what is more controlling than these
mere hypothetical arguments is the fact that the condition herein referred to was actually and
indisputably fulfilled on February 6, 1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. D; Exh. 4).
The inevitable conclusion is that on January 19, 1985, as evidenced by the document
denominated as Receipt of Down Payment (Exh. A; Exh. 1), the parties entered into a contract of
sale subject to the suspensive condition that the sellers shall effect the issuance of new certificate
title from that of their fathers name to their names and that, on February 6, 1985, this condition
was fulfilled (Exh. D; Exh. 4).
We, therefore, hold that, in accordance with Article 1187 which pertinently provides Art. 1187. The effects of conditional obligation to give, once the condition has been fulfilled,
shall retroact to the day of the constitution of the obligation . . .
In obligations to do or not to do, the courts shall determine, in each case, the retroactive effect of
the condition that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale became
mutually due and demandable as of the time of fulfillment or occurrence of the suspensive

condition on February 6, 1985. As of that point in time, reciprocal obligations of both seller and
buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because
they were then not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as
follows:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and
obligations to the extent and value of the inheritance of a person are transmitted through his
death to another or others by his will or by operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent
Constancio P. Coronel are compulsory heirs who were called to succession by operation of
law.Thus, at the point their father drew his last breath, petitioners stepped into his shoes insofar
as the subject property is concerned, such that any rights or obligations pertaining thereto
became binding and enforceable upon them. It is expressly provided that rights to the
succession are transmitted from the moment of death of the decedent (Article 777, Civil
Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]).
Be it also noted that petitioners claim that succession may not be declared unless the
creditors have been paid is rendered moot by the fact that they were able to effect the transfer of
the title to the property from the decedents name to their names on February 6, 1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to
enter into an agreement at that time and they cannot be allowed to now take a posture contrary
to that which they took when they entered into the agreement with private respondent Ramona
P. Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time of sale,
petitioners cannot claim now that they were not yet the absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between
them and Ramona P. Alcaraz, the latter breach her reciprocal obligation when she rendered
impossible the consummation thereof by going to the United States of America, without leaving
her address, telephone number, and Special Power of Attorney (Paragraphs 14 and 15, Answer
with Compulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for which reason, so
petitioners conclude, they were correct in unilaterally rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in
the instant case. We note that these supposed grounds for petitioners rescission, are mere
allegations found only in their responsive pleadings, which by express provision of the rules,
are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised Rules of
Court). The records are absolutely bereft of any supporting evidence to substantiate petitioners

allegations. We have stressed time and again that allegations must be proven by sufficient
evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598
[1961]). Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on
February 6, 1985, we cannot justify petitioners-sellers act of unilaterally and extrajudicially
rescinding the contract of sale, there being no express stipulation authorizing the sellers to
extrajudicially rescind the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs.
Vda. De Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz
because although the evidence on record shows that the sale was in the name of Ramona P.
Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramonas
mother, who had acted for and in behalf of her daughter, if not also in her own behalf. Indeed,
the down payment was made by Concepcion D. Alcaraz with her own personal Check (Exh. B;
Exh. 2) for and in behalf of Ramona P. Alcaraz. There is no evidence showing that petitioners
ever questioned Concepcions authority to represent Ramona P. Alcaraz when they accepted her
personal check. Neither did they raise any objection as regards payment being effected by a
third person. Accordingly, as far as petitioners are concerned, the physical absence of Ramona
P. Alcaraz is not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her
obligation to pay the full purchase price is concerned. Petitioners who are precluded from
setting up the defense of the physical absence of Ramona P. Alcaraz as above-explained offered
no proof whatsoever to show that they actually presented the new transfer certificate of title in
their names and signified their willingness and readiness to execute the deed of absolute sale in
accordance with their agreement. Ramonas corresponding obligation to pay the balance of the
purchase price in the amount of P1,190,000.00 (as buyer) never became due and demandable
and, therefore, she cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal
obligations may be considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.
xxx
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon him. From the moment one
of the parties fulfill his obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between
petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave
rise to a case of double sale where Article 1544 of the Civil Code will apply, to wit:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should
be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in the possession; and, in the absence thereof to the person who presents the oldest title,
provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of
the second contract of sale was registered with the Registry of Deeds of Quezon City giving rise
to the issuance of a new certificate of title in the name of Catalina B. Mabanag on June 5,
1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the buyer,
the exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the
first buyer, and (b) should there be no inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property ahead of the first buyer. Unless, the
second buyer satisfies these requirements, title or ownership will not transfer to him to the
prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a
distinguished member of the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge
by the first buyer of the second sale cannot defeat the first buyers rights except when the second
buyer first registers in good faith the second sale (Olivares vs. Gonzales, 159 SCRA
33). Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if
he is first to register, since knowledge taints his registration with bad faith (see also Astorga vs.
Court of Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June
1984, 129 SCRA 656), it was held that it is essential, to merit the protection of Art. 1544, second
paragraph, that the second realty buyer must act in good faith in registering his deed of sale
(citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02 September
1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).
Petitioners point out that the notice of lis pendens in the case at bar was annotated on the
title of the subject property only on February 22, 1985, whereas, the second sale between
petitioners Coronels and petitioner Mabanag was supposedly perfected prior thereto or on
February 18, 1985. The idea conveyed is that at the time petitioner Mabanag, the second buyer,
bought the property under a clean title, she was unaware of any adverse claim or previous sale,
for which reason she is a buyer in good faith.
We are not persuaded by such argument.

In a case of double sale, what finds relevance and materiality is not whether or not the
second buyer in good faith but whether or not said second buyer registers such second sale in
good faith, that is, without knowledge of any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in
good faith, registered the sale entered into on February 18, 1985 because as early as February 22,
1985, a notice of lis pendens had been annotated on the transfer certificate of title in the names of
petitioners, whereas petitioner Mabanag registered the said sale sometime in April, 1985. At the
time of registration, therefore, petitioner Mabanag knew that the same property had already
been previously sold to private respondents, or, at least, she was charged with knowledge that a
previous buyer is claiming title to the same property. Petitioner Mabanag cannot close her eyes
to the defect in petitioners title to the property at the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired knowledge that there was a
previous sale of the same property to a third party or that another person claims said property
in a previous sale, the registration will constitute a registration in bad faith and will not confer
upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978]; citing Palarca vs. Director of Land, 43
Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz,
perfected on February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on
February 18, 1985, was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an agency between Ramona
as principal and Concepcion, her mother, as agent insofar as the subject contract of sale is
concerned, the issue of whether or not Concepcion was also acting in her own behalf as a cobuyer is not squarely raised in the instant petition, nor in such assumption disputed between
mother and daughter. Thus, We will not touch this issue and no longer disturb the lower courts
ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the
appealed judgment AFFIRMED.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., and Francisco, JJ., concur.
Panganiban, J., no part.

THIRD DIVISION
[G.R. No. 113725. June 29, 2000]
JOHNNY S. RABADILLA,[1] petitioner, vs. COURT OF APPEALS AND MARIA
MARLENA[2] COSCOLUELLA Y BELLEZA VILLACARLOS, respondents.

DECISION
PURISIMA, J.:
This is a petition for review of the decision of the Court of Appeals,[3] dated December
23, 1993, in CA-G.R. No. CV-35555, which set aside the decision of Branch 52 of the
Regional Trial Court in Bacolod City, and ordered the defendants-appellees (including
herein petitioner), as heirs of Dr. Jorge Rabadilla, to reconvey title over Lot No. 1392,
together with its fruits and interests, to the estate of Aleja Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr. Jorge
Rabadilla, predecessor-in-interest of the herein petitioner, Johnny S. Rabadilla, was
instituted as a devisee of 511, 855 square meters of that parcel of land surveyed as Lot
No. 1392 of the Bacolod Cadastre. The said Codicil, which was duly probated and
admitted in Special Proceedings No. 4046 before the then Court of First Instance of
Negros Occidental, contained the following provisions:
"FIRST
I give, leave and bequeath the following property owned by me to Dr. Jorge
Rabadilla resident of 141 P. Villanueva, Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title
No. RT-4002 (10942), which is registered in my name according to the records of
the Register of Deeds of Negros Occidental.
(b) That should Jorge Rabadilla die ahead of me, the aforementioned property
and the rights which I shall set forth hereinbelow, shall be inherited and
acknowledged by the children and spouse of Jorge Rabadilla.
xxx
FOURTH
(a)....It is also my command, in this my addition (Codicil), that should I die and
Jorge Rabadilla shall have already received the ownership of the said Lot No.
1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT4002 (10942), and also at the time that the lease of Balbinito G. Guanzon of the
said lot shall expire, Jorge Rabadilla shall have the obligation until he dies, every
year to give to Maria Marlina Coscolluela y Belleza, Seventy (75) (sic) piculs of
Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said Maria
Marlina Coscolluela y Belleza dies.
FIFTH

(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the
Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10492),
shall have the obligation to still give yearly, the sugar as specified in the Fourth
paragraph of his testament, to Maria Marlina Coscolluela y Belleza on the month
of December of each year.
SIXTH
I command, in this my addition (Codicil) that the Lot No. 1392, in the event that
the one to whom I have left and bequeathed, and his heir shall later sell, lease,
mortgage this said Lot, the buyer, lessee, mortgagee, shall have also the
obligation to respect and deliver yearly ONE HUNDRED (100) piculs of sugar to
Maria Marlina Coscolluela y Belleza, on each month of December, SEVENTY
FIVE (75) piculs of Export and TWENTY FIVE (25) piculs of Domestic, until
Maria Marlina shall die, lastly should the buyer, lessee or the mortgagee of this
lot, not have respected my command in this my addition (Codicil), Maria
Marlina Coscolluela y Belleza, shall immediately seize this Lot No. 1392 from my
heir and the latter's heirs, and shall turn it over to my near desendants, (sic) and
the latter shall then have the obligation to give the ONE HUNDRED (100) piculs
of sugar until Maria Marlina shall die. I further command in this my addition
(Codicil) that my heir and his heirs of this Lot No. 1392, that they will obey and
follow that should they decide to sell, lease, mortgage, they cannot negotiate
with others than my near descendants and my sister."[4]
Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge
Rabadilla, and Transfer Certificate of Title No. 44498 thereto issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children
Johnny (petitioner), Aurora, Ofelia and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a
complaint, docketed as Civil Case No. 5588, before Branch 52 of the Regional Trial Court
in Bacolod City, against the above-mentioned heirs of Dr. Jorge Rabadilla, to enforce the
provisions of subject Codicil. The Complaint alleged that the defendant-heirs violated
the conditions of the Codicil, in that:
1. Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic
Planters Bank in disregard of the testatrix's specific instruction to sell, lease, or
mortgage only to the near descendants and sister of the testatrix.
2. Defendant-heirs failed to comply with their obligation to deliver one hundred
(100) piculs of sugar (75 piculs export sugar and 25 piculs domestic sugar) to
plaintiff Maria Marlena Coscolluela y Belleza from sugar crop years 1985 up to
the filing of the complaint as mandated by the Codicil, despite repeated demands
for compliance.

3. The banks failed to comply with the 6th paragraph of the Codicil which
provided that in case of the sale, lease, or mortgage of the property, the buyer,
lessee, or mortgagee shall likewise have the obligation to deliver 100 piculs of
sugar per crop year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering defendant-heirs to
reconvey/return-Lot No. 1392 to the surviving heirs of the late Aleja Belleza, the
cancellation of TCT No. 44498 in the name of the deceased, Dr. Jorge Rabadilla, and the
issuance of a new certificate of title in the names of the surviving heirs of the late Aleja
Belleza.
On February 26, 1990, the defendant-heirs were declared in default but on March 28,
1990 the Order of Default was lifted, with respect to defendant Johnny S. Rabadilla, who
filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, sonin-law of the herein petitioner who was lessee of the property and acting as attorney-infact of defendant-heirs, arrived at an amicable settlement and entered into a
Memorandum of Agreement on the obligation to deliver one hundred piculs of sugar, to
the following effect:
"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT
No. 44489 will be delivered not later than January of 1989, more specifically, to
wit:
75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in
any of our names, Mary Rose Rabadilla y Azurin or Alan Azurin,
during December of each sugar crop year, in Azucar Sugar
Central; and, this is considered compliance of the annuity as
mentioned, and in the same manner will compliance of the
annuity be in the next succeeding crop years.
That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be
complied in cash equivalent of the number of piculs as mentioned therein and
which is as herein agreed upon, taking into consideration the composite price of
sugar during each sugar crop year, which is in the total amount of ONE
HUNDRED FIVE THOUSAND PESOS (P105,000.00).
That the above-mentioned amount will be paid or delivered on a staggered cash
installment, payable on or before the end of December of every sugar crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos,
payable on or before December of crop year 1988-89;

For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos,
payable on or before December of crop year 1989-90;
For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos,
payable on or before December of crop year 1990-91; and
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos,
payable on or before December of crop year 1991-92."[5]
However, there was no compliance with the aforesaid Memorandum of Agreement
except for a partial delivery of 50.80 piculs of sugar corresponding to sugar crop year
1988 -1989.
On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the
complaint and disposing as follows:
"WHEREFORE, in the light of the aforegoing findings, the Court finds that the
action is prematurely filed as no cause of action against the defendants has as yet
arose in favor of plaintiff. While there maybe the non-performance of the
command as mandated exaction from them simply because they are the children
of Jorge Rabadilla, the title holder/owner of the lot in question, does not warrant
the filing of the present complaint. The remedy at bar must fall. Incidentally,
being in the category as creditor of the left estate, it is opined that plaintiff may
initiate the intestate proceedings, if only to establish the heirs of Jorge Rabadilla
and in order to give full meaning and semblance to her claim under the Codicil.
In the light of the aforegoing findings, the Complaint being prematurely filed is
DISMISSED without prejudice.
SO ORDERED."[6]
On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision
of the trial court; ratiocinating and ordering thus:
"Therefore, the evidence on record having established plaintiff-appellant's right
to receive 100 piculs of sugar annually out of the produce of Lot No. 1392;
defendants-appellee's obligation under Aleja Belleza's codicil, as heirs of the
modal heir, Jorge Rabadilla, to deliver such amount of sugar to plaintiffappellant; defendants-appellee's admitted non-compliance with said obligation
since 1985; and, the punitive consequences enjoined by both the codicil and the
Civil Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja
Belleza in case of such non-compliance, this Court deems it proper to order the
reconveyance of title over Lot No. 1392 from the estates of Jorge Rabadilla to the
estate of Aleja Belleza. However, plaintiff-appellant must institute separate
proceedings to re-open Aleja Belleza's estate, secure the appointment of an
administrator, and distribute Lot No. 1392 to Aleja Belleza's legal heirs in order

to enforce her right, reserved to her by the codicil, to receive her legacy of 100
piculs of sugar per year out of the produce of Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and another one entered
ordering defendants-appellees, as heirs of Jorge Rabadilla, to reconvey title over
Lot No. 1392, together with its fruits and interests, to the estate of Aleja Belleza.
SO ORDERED."[7]
Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his
way to this Court via the present petition, contending that the Court of Appeals erred in
ordering the reversion of Lot 1392 to the estate of the testatrix Aleja Belleza on the basis
of paragraph 6 of the Codicil, and in ruling that the testamentary institution of Dr. Jorge
Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in resolving the appeal in
accordance with Article 882 of the New Civil Code on modal institutions and in
deviating from the sole issue raised which is the absence or prematurity of the cause of
action. Petitioner maintains that Article 882 does not find application as there was no
modal institution and the testatrix intended a mere simple substitution - i.e. the
instituted heir, Dr. Jorge Rabadilla, was to be substituted by the testatrix's "near
descendants" should the obligation to deliver the fruits to herein private respondent be
not complied with. And since the testatrix died single and without issue, there can be no
valid substitution and such testamentary provision cannot be given any effect.
The petitioner theorizes further that there can be no valid substitution for the reason that
the substituted heirs are not definite, as the substituted heirs are merely referred to as
"near descendants" without a definite identity or reference as to who are the "near
descendants" and therefore, under Articles 843[8] and 845[9] of the New Civil Code, the
substitution should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his supposition that the Court of
Appeals deviated from the issue posed before it, which was the propriety of the
dismissal of the complaint on the ground of prematurity of cause of action, there was no
such deviation. The Court of Appeals found that the private respondent had a cause of
action against the petitioner. The disquisition made on modal institution was, precisely,
to stress that the private respondent had a legally demandable right against the
petitioner pursuant to subject Codicil; on which issue the Court of Appeals ruled in
accordance with law.
It is a general rule under the law on succession that successional rights are transmitted
from the moment of death of the decedent[10] and compulsory heirs are called to succeed
by operation of law. The legitimate children and descendants, in relation to their
legitimate parents, and the widow or widower, are compulsory heirs.[11] Thus, the
petitioner, his mother and sisters, as compulsory heirs of the instituted heir, Dr. Jorge

Rabadilla, succeeded the latter by operation of law, without need of further proceedings,
and the successional rights were transmitted to them from the moment of death of the
decedent, Dr. Jorge Rabadilla.
Under Article 776 of the New Civil Code, inheritance includes all the property, rights
and obligations of a person, not extinguished by his death. Conformably, whatever
rights Dr. Jorge Rabadilla had by virtue of subject Codicil were transmitted to his forced
heirs, at the time of his death. And since obligations not extinguished by death also form
part of the estate of the decedent; corollarily, the obligations imposed by the Codicil on
the deceased Dr. Jorge Rabadilla, were likewise transmitted to his compulsory heirs
upon his death.
In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla,
subject to the condition that the usufruct thereof would be delivered to the herein
private respondent every year. Upon the death of Dr. Jorge Rabadilla, his compulsory
heirs succeeded to his rights and title over the said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved to herein private
respondent. Such obligation of the instituted heir reciprocally corresponds to the right of
private respondent over the usufruct, the fulfillment or performance of which is now
being demanded by the latter through the institution of the case at bar. Therefore,
private respondent has a cause of action against petitioner and the trial court erred in
dismissing the complaint below.
Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is
not applicable because what the testatrix intended was a substitution - Dr. Jorge
Rabadilla was to be substituted by the testatrix's near descendants should there be
noncompliance with the obligation to deliver the piculs of sugar to private respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or persons to take the place of
the heir or heirs first instituted. Under substitutions in general, the testator may either
(1) provide for the designation of another heir to whom the property shall pass in case
the original heir should die before him/her, renounce the inheritance or be incapacitated
to inherit, as in a simple substitution,[12] or (2) leave his/her property to one person with
the express charge that it be transmitted subsequently to another or others, as in a
fideicommissary substitution.[13] The Codicil sued upon contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance in default of the first heir
by reason of incapacity, predecease or renunciation.[14] In the case under consideration,
the provisions of subject Codicil do not provide that should Dr. Jorge Rabadilla default
due to predecease, incapacity or renunciation, the testatrix's near descendants would
substitute him. What the Codicil provides is that, should Dr. Jorge Rabadilla or his heirs
not fulfill the conditions imposed in the Codicil, the property referred to shall be seized
and turned over to the testatrix's near descendants.

Neither is there a fideicommissary substitution here and on this point, petitioner is

correct. In a fideicommissary substitution, the first heir is strictly mandated to preserve
the property and to transmit the same later to the second heir.[15] In the case under
consideration, the instituted heir is in fact allowed under the Codicil to alienate the
property provided the negotiation is with the near descendants or the sister of the
testatrix. Thus, a very important element of a fideicommissary substitution is lacking;
the obligation clearly imposing upon the first heir the preservation of the property and
its transmission to the second heir. "Without this obligation to preserve clearly imposed
by the testator in his will, there is no fideicommissary substitution."[16] Also, the near
descendants' right to inherit from the testatrix is not definite. The property will only
pass to them should Dr. Jorge Rabadilla or his heirs not fulfill the obligation to deliver
part of the usufruct to private respondent.
Another important element of a fideicommissary substitution is also missing here.
Under Article 863, the second heir or the fideicommissary to whom the property is
transmitted must not be beyond one degree from the first heir or the fiduciary. A
fideicommissary substitution is therefore, void if the first heir is not related by first
degree to the second heir.[17] In the case under scrutiny, the near descendants are not at
all related to the instituted heir, Dr. Jorge Rabadilla.
The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under
subject Codicil is in the nature of a modal institution and therefore, Article 882 of the
New Civil Code is the provision of law in point. Articles 882 and 883 of the New Civil
Code provide:
Art. 882. The statement of the object of the institution or the application of the
property left by the testator, or the charge imposed on him, shall not be
considered as a condition unless it appears that such was his intention.
That which has been left in this manner may be claimed at once provided that
the instituted heir or his heirs give security for compliance with the wishes of the
testator and for the return of anything he or they may receive, together with its
fruits and interests, if he or they should disregard this obligation.
Art. 883. When without the fault of the heir, an institution referred to in the
preceding article cannot take effect in the exact manner stated by the testator, it
shall be complied with in a manner most analogous to and in conformity with his
wishes.
The institution of an heir in the manner prescribed in Article 882 is what is known in the
law of succession as an institucion sub modo or a modal institution. In a modal institution,
the testator states (1) the object of the institution, (2) the purpose or application of the
property left by the testator, or (3) the charge imposed by the testator upon the heir.[18] A
"mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy
of his rights to the succession.[19] On the other hand, in a conditional testamentary
disposition, the condition must happen or be fulfilled in order for the heir to be entitled
to succeed the testator. The condition suspends but does not obligate; and the mode

obligates but does not suspend.[20] To some extent, it is similar to a resolutory

condition.[21]
From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the
testatrix intended that subject property be inherited by Dr. Jorge Rabadilla. It is likewise
clearly worded that the testatrix imposed an obligation on the said instituted heir and
his successors-in-interest to deliver one hundred piculs of sugar to the herein private
respondent, Marlena Coscolluela Belleza, during the lifetime of the latter. However, the
testatrix did not make Dr. Jorge Rabadilla's inheritance and the effectivity of his
institution as a devisee, dependent on the performance of the said obligation. It is clear,
though, that should the obligation be not complied with, the property shall be turned
over to the testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla
under subject Codicil is evidently modal in nature because it imposes a charge upon the
instituted heir without, however, affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts of liberality, an obligation
imposed upon the heir should not be considered a condition unless it clearly appears
from the Will itself that such was the intention of the testator. In case of doubt, the
institution should be considered as modal and not conditional.[22]
Neither is there tenability in the other contention of petitioner that the private
respondent has only a right of usufruct but not the right to seize the property itself from
the instituted heir because the right to seize was expressly limited to violations by the
buyer, lessee or mortgagee.
In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the
application of any of its provisions, the testator's intention is to be ascertained from the
words of the Will, taking into consideration the circumstances under which it was
made.[23] Such construction as will sustain and uphold the Will in all its parts must be
adopted.[24]
Subject Codicil provides that the instituted heir is under obligation to deliver One
Hundred (100) piculs of sugar yearly to Marlena Belleza Coscuella. Such obligation is
imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs, and their buyer, lessee, or
mortgagee should they sell, lease, mortgage or otherwise negotiate the property
involved. The Codicil further provides that in the event that the obligation to deliver the
sugar is not respected, Marlena Belleza Coscuella shall seize the property and turn it
over to the testatrix's near descendants. The non-performance of the said obligation is
thus with the sanction of seizure of the property and reversion thereof to the testatrix's
near descendants. Since the said obligation is clearly imposed by the testatrix, not only
on the instituted heir but also on his successors-in-interest, the sanction imposed by the
testatrix in case of non-fulfillment of said obligation should equally apply to the
instituted heir and his successors-in-interest.
Similarly unsustainable is petitioner's submission that by virtue of the amicable
settlement, the said obligation imposed by the Codicil has been assumed by the lessee,
and whatever obligation petitioner had become the obligation of the lessee; that

petitioner is deemed to have made a substantial and constructive compliance of his

obligation through the consummated settlement between the lessee and the private
respondent, and having consummated a settlement with the petitioner, the recourse of
the private respondent is the fulfillment of the obligation under the amicable settlement
and not the seizure of subject property.
Suffice it to state that a Will is a personal, solemn, revocable and free act by which a
person disposes of his property, to take effect after his death.[25] Since the Will expresses
the manner in which a person intends how his properties be disposed, the wishes and
desires of the testator must be strictly followed. Thus, a Will cannot be the subject of a
compromise agreement which would thereby defeat the very purpose of making a Will.
WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of
Appeals, dated December 23, 1993, in CA-G.R. No. CV-35555 AFFIRMED. No
pronouncement as to costs
SO ORDERED.
Melo, J., (Chairman), concur in the separate opinion of Justice Vitug.
Vitug, J., see separate opinion.
Panganiban, J., join the separate opinion of Justice Vitug.
Gonzaga-Reyes, J., no part.

Was spelled interchangeably in Rollo as Ravadilla.

Was spelled interchangeably in Rollo as Marlina.
[3] Penned by Justice Santiago M. Kapunan (Chairman) and concurred in by Justices Minerva P.
Gonzaga-Reyes and Eduardo G. Montenegro, (Members)
[4] Annex "C", Rollo, pp. 34-35.
[5] Rollo, pp. 65-66.
[6] RTC Decision, pp. 8-9.
[7] CA Decision, p. 14.
[8] Art. 843. The testator shall designate the heir by his name and surname, and when there are
two persons having the same names, he shall indicate some circumstance by which the
instituted heir may be known.
Even though the testator may have omitted the name of the heir, should he designate him in
such manner that there can be no doubt as to who has been instituted, the institution shall be
valid.
[9] Art. 845. Every disposition in favor of an unknown person shall be void, unless by some
event or circumstance his identity becomes certain. However, a disposition in favor of a definite
class or group of persons shall be valid.
[10] Article 777, New Civil Code.
[1]
[2]

Ibid., Article 887.

Ibid., Article 859.
[13] Ibid., Article 863.
[14] Ibid., Article 859.
[15] Arturo Tolentino, Commentaries and Jurisprudence on the Civil Code, Volume III, p. 212.
[16] Ibid., p. 212.
[17] Ramirez vs. Vda. De Ramos, 111 SCRA 704.
[18] Tolentino, supra, pp. 241-242.
[19] Ibid., p. 242.
[20] Ibid.
[21] Jottings and Jurisprudence in Civil Law, Ruben Balane, p. 249.
[22] Tolentino, supra, p. 242.
[23] Article 789, NCC.
[24] Tolentino, supra, p. 34.
[25] Art. 783, NCC and Tolentino, p. 28-29.
[11]
[12]

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-3362

March 1, 1951

TESTATE estate of Carlos Gil, deceased. ISABEL HERREROS VDA. DE GIL, administratrixappellee,
vs.
PILAR GIL VDA. DE MURCIANO, oppositor-appellant.
Eligio C. Lagman for appellant.
Reyes, Albert and Agcaoili for appellee.
JUGO, J.:
The Court of First Instance of Manila admitted to probate the alleged will and testament of the
deceased Carlos Gil. The oppositor Pilar Gil Vda. de Murciano appealed to this Court, raising
only question of law. Her counsel assigns the two following alleged errors:
Primer Error. El Juzgado inferior erro al dejar de declarar que el alegado testamento
de Carlos Gil no ha sido otogar de acuerdo con la ley.
Segundo Error. Erro finalmente a legalizar el referido testamento.
The alleged will read as follows:
Primera Pagina (1)

EN EL NOMBRE DE DIOS, AMEN

Yo, Carlos Gil, de 66 aos de edad, residente de Porac, Pampanga, I. F., hallandome sano
y en pleno goce de mis facultades intelectuales, libre y expontaneamente, sin violencia,
coaccion, dolo o influencia ilegal de persona extraa, otorgo y ordeno este mi testamento
y ultima voluntad en castellano, idioma que poseo y entiendo, de la manera siguiente:
1. Declaro que durante mi matrimonio con mi esposa la hoy Isabel Herreros no tuvimos
hijos;
2. Declaro que tengo propiedades situadas en Manila y en la Provincia de Pampanga;
3. Doy y adjudico a mi querida esposa Isabel Herretos todos mis bienes ya que muebles
e inmuebles situados en Manila y en Pampanga, bajo la condicion de que cuando esta
muera y si hayan bienes remanentes heredadas por ella de mi, que dichos bienes
remanentes se adjudicaran a Don Carlos Worrel.
4. Nombro como albacea de mis bienes despues de mi fallecimiento al Dr. Galicano
Coronel a quien tengo absoluta confianza, con relevacion de fianza;
En testimonio de todo lo cual, firmo este mi testamento y en el margen izquierdo de cada
una de sus dos paginas, utiles con la clausula de atestiguamiento en presencia de los
testigos, quienes a su vez firmaron cada una de dichas paginas y la clausula de
atestiguamiento en mi presencia cada uno de ellos con la de los demas, hoy en Porac,
Pampanga, I. F., el dia 27 de Mayo de mil novecientos treinta y nueve.
CARLOS GIL
Testificacion:
Segunda Pagina (2)
Nosotros los que suscribimos, todos mayores de edad, certificamos: que el testamento
que precede este escrito en la lengua castellana que conoce la testadora, compuesto de
dos paginas utiles con la clausula de atestiguamiento paginadas correlativamente en
letras y numeros en la parte superior de la casilla, asi como todas las hojas del mismo, en
nuestra presencia y que cada uno de nosotros hemos atestiguado y firmado dicho
documento y todas las hojas del mismo en presencia del testador y en la de cada uno de
nosotros.
(Fdo.) ALFREDO T. RIVERA
(Fdo.) RAMON MENDIOLA

(Fdo.) MARIANO OMAA

Regarding the correctness and accuracy of the above-copied alleged will, the court below said:
. . . The only copy available is a printed form contained in the record appeal in case G.R.
No. L-254, entitled "Testate Estate of Carlos Gil; Isabel Herreros Vda. de Gil, petitioner
and appellant vs. Roberto Toledo y Gil, oppositor and appellee." Both parties are agreed
that this is a true and correct copy of the will. (P. 10, Record on Appeal).
The appeal being only on questions of law the above finding of the court below cannot be
disputed. The conclusions of law reached by said court are based on it. Moreover, the finding is
correctly based on the evidence of record. The parties agreed that said copy is true and correct.
If it were otherwise, they would not have so agreed, considering that the defect is of an essential
character and is fatal to the validity of the attestation clause.
It will be noted that the attestation clause above quoted does not state that the alleged testor
signed the will. It declares only that it was signed by the witnesses. This is a fatal defect, for the
precise purpose of the attestation clause is to certify that the testator signed the will, this being
the most essential element of the clause. Without it there is no attestation at all. It is said that the
court may correct a mere clerical error. This is too much of a clerical error for it effects the very
essence of the clause. Alleged errors may be overlooked or correct only in matters of form
which do not affect the substance of the statement.
It is claimed that the correction may be made by inference. If we cure a deficiency by means of
inferences, when are we going to stop making inferences to supply fatal deficiencies in wills?
Where are we to draw the line? Following that procedure we would be making interpolations
by inferences, implication, and even by internalcircumtantial evidence. This would be done in
the face of the clear, uniquivocal, language of the statute as to how the attestation clause should
be made. It is to be supposed that the drafter of the alleged will read the clear words of the
statute when he prepared it. For the court to supply alleged deficiencies would be against the
evident policy of the law. Section 618 of Act No. 190, before it was amended, contained the
following provision:
. . . But the absence of such form of attestation shall not render the will invalid if it
proven that the will was in fact signed and attested as in this section provided.
However, Act No. 2645 of the Philippine Legislature, passed on July 1, 1916, besides increasing
the contents of the attestation clause, entirely suppressed the above-quoted provision. This
would show that the purpose of the amending act was to surround the execution of a will with
greater guarantees and solemnities. Could we, in view of this, hold that the court can cure
alleged deficiencies by inferences, implications, and internal circumstantial evidence? Even in
ordinary cases the law requires certain requisities for the conclusiveness of circumstantial
evidence.
It is contended that the deficiency in the attestation clause is cured by the last paragraph of the
body of the alleged will, which we have quoted above. At first glance, it is queer that the alleged

testator should have made an attestation clause, which is the function of the witness. But the
important point is that he attests or certifies his own signature, or, to be accurate, his signature
certifies itself. It is evident that one cannot certify his own signature, for it does not increase the
evidence of its authenticity. It would be like lifting one's self by his own bootstraps.
Consequently, the last paragraph of the will cannot cure in any way the fatal defect of the
attestation clause of the witnesses. Adding zero to an insufficient amount does not make it
sufficient.
It is said that the rules of statutory construction are applicable to documents and wills. This is
true, but said rules apply to the body of the will, containing the testamentary provisions, but
not to the attestation clause, which must be so clear that it should not require any construction.
The parties have cited pro and con several decisions of the Supreme Court, some of which are
said to be rather strict and others liberal, in the interpretation of section 618 of Act No. 190, as
amended by Act No. 2645.
In the case of Gumban vs. Gorecho (50 Phil., 30, 31), the court had the following to say:
1. WILLS; ALLOWANCE OR DISALLOWANCE; SECTIONS 618 AND 634 OF THE
CODE OF CIVIL PROCEDURE CONSTRUED. The right to dispose of the property
by will is governed entirely by statute. The law is here found in section 618 of the Code
of Civil Procedure, as amended. The law not alone carefully makes use of the
imperative, but cautiously goes further and makes use of the negative, to enforce
legislative intention.
2. ID.; ID.; ATTESTATION. The Philippine authorities relating to the attestation
clause to wills reviewed. The cases of Sao vs. Quintana ([1925], 48 Phil., 506), and Nayve
vs. Mojal and Aguilar ([1924], 47 Phil., 152), particularly compared. The decision in In re
Will of Quintana, supra, adopted and reaffirmed. The decision in Nayve vs. Mojal and
Aguilar, supra, modified.
3. ID.; ID.; ID.; ID. The portion of section 618 of the Code of Civil Procedure, as
amended, which provides that "The attestation clause shall state the number of sheets or
pages used, upon which the will is written, and the fact that the testator signed the will
and every page thereof, or caused some other person to write his name, under his
express direction, in the presence of three witnesses, and the latter witnessed and signed
the will and all pages thereof in the presence of the testator and of each other" applied
and enforced.
4. ID.; ID.; ID.; ID. An attestation clause which does not recite that the witnesses
signed the will and each and every page thereof on the left margin in the presence of the
testator is defective, and such a defect annuls the will. (Sano vs. Quintana, supra.)
In the subsequent case of Quinto vs. Morata (54 Phil., 481, 482), Judge Manuel V. Moran, now
Chief Justice of the Supreme Court, in his decision made the following pronouncement:

. . . En la clausula de atestiguamiento del testamento en cuestion, se hace constar que los

testadores firmaron el testamento en presencia de los tres testigos instrumentales y que
estos firmaron el testamento los unos en presencia de los otros, pero no se hace constar
que dichos testigos firmaron el testamento enpresencia de los testadores, ni que estos y
aquellos firmaron todas y cada una de las paginas del testamento los primeros en
presencia de los segundos y vice-versa.
En su virtud, se deniega la solicitud en la que se pide la legalizacion del alegado
testamento Exhibit A de Gregorio Pueblo y Carmen Quinto, y se declara que Gregorio
Pueblo murio intestado.
The Supreme Court fully affirmed the decision, laying down the following doctrine:
1. WILLS; ATTESTATION CLAUSE; EVIDENCE TO SUPPLY DEFECTS OF. The
attestation clause must be made in strict conformity with the requirements of section 618
of Act No. 190, as amended. Where said clause fails to show on its face a full compliance
with those requirements, the defect constitutes sufficient ground for the disallowance of
the will. (Sano vs. Quintana, 48 Phil., 506; Gumban vs. Gorecho, 50 Phil., 30). Evidence
aliunde should not be admitted to establish facts not appearing on the attestation clause,
and where said evidence has been admitted it should not be given the effect intended.
(Uy Coque vs. Navas L. Sioca, 43 Phil., 405, 409.).
2. ID.; ID.; INTERPRETATION OF SECTION 618 OF ACT NO. 190, AS AMENDED.
Section 618 of Act No. 190, as amended, should be given a strict interpretation in order
to give effect to the intention of the Legislature. Statutes prescribing formalities to be
observed in the execution of wills are very strictly construed. Courts cannot supply the
defensive execution of will. (40 Cyc., p. 1079; Uy Coque vs. Navas L. Sioca, supra.)
It is true that in subsequent decisions, the court has somewhat relaxed the doctrine of
the Gumban vs. Gorchocase, supra, but not to the extent of validating an attestation clause similar
to that involved herein.
In the case of Aldaba vs. Roque (43 Phil., 378), the testatrix signed the attestation clause which
was complete, and it was also signed by the two attesting witnesses. For this reason, the court
said:
In reality, it appears that it is the testatrix who makes the declaration about the points
contained in the above described paragraph; however, as the witnesses, together with
the testatrix, have signed the said declaration, we are of the opinion and so hold that the
words above quoted of the testament constitute a sufficient compliance with the
requirements of section 1 of Act No. 2645 which provides that: . . . (p. 381,supra.)
The attestation clause involved herein is very different.
In the case of Dischoso de Ticson vs. De Gorotiza (57 Phil., 437), it was held that:

An attestation clause to a will, copied from a form book and reading: "We, the
undersigned attesting witnesses, whose residences are stated opposite our respective
names, do hereby certify that the testatrix, whose name is signed hereinabove, has
publish unto us the foregoing will consisting of two pages as her Last Will and
Testament, and has signed the same in our presence, and in witness whereof we have
each signed the same and each page thereof in the presence of said testatrix and in the
presence of each other," held not to be fatally defective and to conform to the law.
This very different from the attestation clause in the case at bar.
In the case of Grey vs. Fabie * (40 Off. Gaz., 1st Supplement, 196, No. 3, May 23, 1939), the will
was objected to on the ground that, although the attestation clause stated that "each of the pages
of which the said will is composed" was signed by the testatrix at the left margin and at the foot
of the fifth page, it did not state that the signature was made in the presence of the witnesses. It
was held, however, that said deficiency was cured by the phrase "as well as by each of us in the
presence of the testatrix." The words "as well as" indicate that the testatrix signed also in the
presence of the witnesses, for the phrase "as well as" in this case is equivalent to "also." The
language is clear and, unlike the attestation clause in the present case, does not necessitate any
correction. In the body of the will the testatrix stated that she signed in the presence of each and
all of the three witnesses. This was considered as a corroboration, but it was unnecessary.
In the case of Leynez vs. Leynez (40 Off. Gaz., 3rd Supplement, 51, 52, No. 7, October 18, 1939; 68
Phil., 745), the attestation clause reads as follows:
Suscrito y declarado por el testador Valerio Leynez, como su ultima voluntad y
testamento en presencia de todos y cada uno de nosotros, y a ruego de dicho testador,
firmamos el presente cada uno en presencia de los otros, o de los demas y de la del
mismo testsador, Valerio Leynez. El testamento consta de dos (2) paginas solamente.
The objection was that the attestation clause did not state that the testator and the witnesses
signed each and every page of the will. This fact , however, appears in the will itself. It is clear,
therefore, that in case of the will complied with all the requisites for its due execution. In the
instant case, essential words were omitted.
In the case of Alcala vs. De Villa 1 (40 Off. Gaz., 14th Supplement, 131, 134-135, No. 23, April 18,
1939), the attestation clause reads as follows:
Hacemos constar que en la fecha y pueblo arriba mencionadios otorgo el Sr. Emiliano
Alcala su ultima voluntad o testamentao compuesto de cuatro paginas incluida ya esta
clasula de atestiguamiento. Que estabamos presentes en el momento de leer y ratificar el
que el testamento arriba mencionado es su ultima voluntad o testamento compuesto de
cuatro paginasen papel de maquinilla. Que igualmente estabamos presentes cuando el
firmo este documento al pie del mismo y en el margen izquierdo de cada pagina del
testador tambien en presencia suya y de cada uno de nosotros en cada pagina y en el
margen izquierdo de esta escritura o testamento. En su testimonio firmamos abajo en
prsencia del testador y de cada uno de nosotros.

The above attestation clause is substantially perfect. The only clerical error is that it says
"testador" instead of "testamento" in the phrase "cada pagina del testador." The word "tambien"
renders unnecessary the use of the verb "firmamos."
In the case of Mendoza vs. Pilapil 2 (40 Off. Gaz., 1855, No. 9, June 27, 1941), the attestation clause
did not state the number of pages of the will. However, it was held that this deficiency was
cured by the will itself, which stated that it consisted of three pages and in fact it had three
pages.
In the case of Rallos vs. Rallos (44 Off. Gaz., 4938, 4940, No. 12, October 23, 1947), decided by the
Court of Appeals, the attestation clause (translated in Spanish) reads as follows:
Nosotros, los testigos, certificamos que este que hemos firmado es el testamento y ultima
voluntad, que se ha redactado en cuatro paginas, de Numeriano Rallos, quien despues
de leer y de leer y de leerle el mencionado testamento, y despues de que ella dio su
conformidad, firmo y marco con su dedo pulgar derecho en nuestra presencia y en
presencia de cada uno de nosotros, que asimismo cada uno de nosotros, los testigos,
firmamos enpresencia de la testadora y en presencia de cada uno de nosotros.
It will be noticed that the only thing omitted is the statement as to the signing of the testatrix
and the witnesses of each and every page of the will, but the omission is cured by the fact that
their signatures appear on every page. This attestation clause is different from that involved in
the present case.
There is no reason why wills should not be executed by complying substantially with the clear
requisites of the law, leaving it to the courts to supply essential elements. The right to dispose of
property by will is not natural but statutory, and statutory requirements should be satisfied.
The right to make a testamentary disposition of one's property is purely of statutory
creation, and is available only upon the compliance with the requirements of the statute.
The formalities which the Legislature has prescribed for the execution of a will are
essential to its validity, and cannot be disregarded. The mode so prescribed is the
measure for the exercise of the right, and the heir can be deprived of his inheritance only
by a compliance with this mode. For the purpose of determining whether a will has been
properly executed, the intention of the testator in executing it is entitled to no
consideration. For that purpose only intention of the Legislature, as expressed in the
language of the statute, can be considered by the court, and whether the will as
presented, shows a compliance with the statute. Estate of Walker, 110 Cal., 387, 42 Pac.,
815, 30 L. R. A., 460, 52 Am. St. Rep. 104. In re Seaman's Estate, 80 Pac., 700, 701.)
In interpreting the legislature's thought, courts have rigidly opposed any exception
tending to weaken the basic principle underlying the law, the chief purpose of which is
to see that the testator's wishes are observed. It is possible, in some or many cases, a
decedent may have thought he had made a will, but the statute says he had not. The
question is not one of his intention, but of what he actually did, or . . . failed to do. . . . It
may happen . . . that . . . wills . . . truly expressing the intertions of the testator are made
without observations of the required forms; and whenever that happens, the genuine

intention is frustrated. . . . The Legislature . . . has taught of it best and has therefore
determined, to run the risk of frustrating (that intention, . . . in preference to the risk of
giving effect to or facilitating the formation of spurious wills, by the absence of forms. . .
. The evil probably to arise by giving to wills made without any form, . . ." or, in
derogation of testator's wishes, fraudulently imposing spurious wills on his effect on his
estate. Churchill's Estate, 260 Pac. 94, 101, 103 Atl. 533.
It has always been the policy of this court to sustain a will if it is legally possible to do
so, but we cannot break down the legislative barriers protecting a man's property after
death, even if a situation may be presented apparently meritorious. (In Re: Maginn, 30 A.
L. R., pp. 419, 420.)
In view of the foregoing, the decision appealed from is reversed, denying the probate of the
alleged will and declaring intestate the estate of the deceased Carlos Gil. With costs against the
appellee. It is so ordered.
Moran, C.J., Pablo, Bengzon, Padilla and Reyes, JJ., concur.

Separate Opinions
TUAZON, J., dissenting:
The decision takes for granted that the will was written just as it was copied in the stipulation of
facts by the parties. But counsel for appellee makes the correctness of the copy an issue thereby
raising the question of not whether the burnt will possessed the statutory requirements but
whether the copy is erroneous. Since this is a chief feature on which the appellee's case is built;
since, in fact, the objection to form of the attestation clause, with which the decision wholly
deals, would disappear if the appellee's contention were well founded, it is proper that in this
dissenting opinion we should accord the matter at least a passing notice.
It may be stated as background that the original of the will was filed in the Court of First
Instance of Manila in 1943; that in 1945, before the will came up for probate, it was destroyed by
fire or looters; that in the probate proceeding after liberation, the parties submitted an agreed
statement of facts in which the will was reproduced ascopied in the record on appeal in another
case docketed in this court on appeal as G.R. No. L-254 and decided on April 30, 1948. It further
appears from the record of that case and from the decision of this court that the controversy
there concerned the right of a nephew of the testator to impugn the will, it being alleged that he
was not a legal heir and had no interest in the probate.
As transcribed in the majority decision, it will be seen that the attestation clause is truncated
and meaningless. The last of the compound sentence in incomplete, lacking an adjective phrase.
Counsel for appellee contends that the phrase "ha sido firmado por el testador" or equivalent
expression between the words "del mismo" and the words "en nuestra presencia" should be

inserted if the sentence is to be complete and have sense. The attestation clause with the
inclusion of the omitted phrase, which we italicize should read thus:
Nosotros, los que suscribimos, todos mayores de edad, certificamos que el testamento
que precede escrito en la lengua castellana que conoce la testador, compuesto de las
paginadas utiles con la clausula de atestiguamiento paginadas correlativamente en letras
y numeros en la parte superior de la casilla, asi como todos las hojas del mismo (Ha sido
firmado por el testador) en nuestra presencia y que cada de nosotros hemos atestiguado y
firmado dicho documento y todas las hojas del mismo presencia del testador y en la de
cada uno de nosotros.
It seems obvious that the missing phrase was inadvertently left out. The probabilities of error in
the copy are enhanced by the fact that the form of the will was not in controversy. The form of
the will being immaterial, it is easily conceivable that little or on care was employed in the
copying thereof in the pleading or record on appeal above mentioned. The absence of the
signature of the testator on the first page of the copy is an additional proof that little or on pain
was taken to insure accuracy in the transcription. The appearance of "la testadora" in the copy
instead of "el testador" is another.
Quite aside from all this, the testator was presumed to know the law, as the decision says.
Certainly, Attorney Mariano Omaa, who drafted the whole instrument and signed it as an
attesting witness, knew the law and, by the context of the whole instrument, has shown
familiarity with the rules of grammar and ability to express his idea properly.
Read in the light of these circumstances without mentioning the evidence or record, not
objected to, that the testator signed the will in the presence of the attesting witnesses so
important an omission as to make the sentence senseless granting such omission existed in
the original document-could not have been intentional or due to ignorance. The most that can
be said is that the flaw was due to a clerical mistake, inadvertance, or oversight.
There is insinuation that the appellee in agreeing that the will read as it was "reproduced in the
record on Appeal" above mentioned is bound by the agreement. This is not an absolute rule.
The binding effect of a stipulation on the parties does not go to the extent of barring them or
either of them from impeaching it on the score of clerical error or clear mistake. That there was
such mistake, is indubitable. It is noteworthy that the opponent and appellant herself appears
not to have noticed any defect in the attestation clause as copied in the stipulation. It would
seem that in the court below she confined her attack on the will to the alleged failure of the
testator to sign the first page. We say this because it was only the alleged unsigning of the first
page of the document which the trial court in the appealed decision discussed and ruled upon.
There is not the slightest reference in the decision, direct or implied, to any flaw in the
attestation clause which is by far more important than the alleged absence of the testator's
signature on the first page.
As stated the problem posed by the omission in question is governed, not by the law of wills
which requires certain formalities to be observed in the execution, but by the rules of
construction applicable to statues and documents in general. And this rule would obtain even if

the omission had occurred in the original document and not in the copy alone. In either case,
the court may and should correct the error by supplying the omitted word or words.
In Testamentaria del finado Emilio Alcala, a similar situation arose and the Court said:
Es evidente que leyendo la clausula de atestiguacion se nota a simple vista que en su
redaccion se ha incurrido en omisiones que la razon y el sentido comon pueden suplirlas
sin alterar ni tergiversar la intencion tanto del testador como la de los tres testigos que
intervinieron en el otorgamiento de la misma. Teniendo en cuenta la fraselogia de la
segunda parte de la clausula se observara que las omisiones, aunque son substanciales,
consisten en meros errores gramaticales que los tribunales, en el ejercicio de su
discrecion y en la aplicacion de las reglas de interpretacion de documentos, pueden
subsanarlos para dar efectividad a la intencion y hacer que el conjunto de los terminos
de la clausula de atestacion surtan sus efectos.
La interpritacion que se acaba de bar a la clausula de atestacion y la correccion de los
errores gramaticales de que misma adolece, incluyendo la insercion del verbo
"firmamos" que se omitio involuntariamente, esta de acuerdo con las reglas
fundamentals de interpretacion de documentos segun las cuales se debe hacer
prevalecer siempre la intencion del que haya redactado el instrumento (art. 288, Cod. de
Proc. Civ.; Pecson contra, 45 Jur. Fil., 224; 28 R. C. L., sec. 187, pags. 225, 226.)
La solucion que se acaba de bar al asunto es la que se halla mas conforme con la justificia
en vista de que se ha presentado prueba alguna que insinue siquiera que en el
otorgamiento del testamento se ha cometido dolo o fraude con el animo de perjudiar a
cualquiera. (Testamentaria de Emiano Alcala, 40 G. O., 14. Suplemento, No. 23, pags.
131, 132.)
From 69 C. J., 82 83, we quote: "Words omitted from a will may be supplied by the court
whenever necessary to effectuate the testator's intention as expressed in the will; but not where
the effect of inserting the words in the will would alter or defeat such intention, or change the
meaning of words that are clear and unequivocal." On pages 50, 51, the same work says: "To aid
the court in ascertaining and giving effect to the testator's intention in the case of an ambiguous
will, certain rules have been established for guidance in the construction or interpretation to be
placed upon such a will, and in general a will should be construed according to these
established rules of construction." Speaking of construction of statutes which, as has been said,
is applicable to construction of documents, the same work, in Vol. 59, p. 992, says: "Where it
appears from the context that certain words have been inadvertently omitted from a statute, the
court may supply such words as are necessary to complete the sense, and to express the
legislative intent.
Adding force to the above principle is the legal presumption that the will is in accordance with
law. (2 Page on Wills, 840, 841; 57 Am. Jur., 720.)
Let us assume, for the purpose of this decision only, that the attestation clause was drawn as the
draftsman intended, that the mistake in language in said clause was not inadvertent, and

consider the case on the premise from which the court has approached it; is the decision well
grounded, at least in the light of this court's previous decisions?
At the outset, it should be pointed out that as early as 1922 a similar case, in which the validity
of the will was sustained, found its way into this court. (Aldaba vs. Roque, 43 Phil., 378). The
case was more than four-square behind the case at bar. There the departure from the statutory
formality was more radical, in that the testator took charge or writing the entire attestation
clause in the body of the will, the witnesses limiting their role to signing the document below
the testator's signature. Here, at most, the testator took away from the witness only a small part
of their assigned task, leaving them to perform the rest.
Referring to "the lack of attestation clause required by law," this court, in a unanimous
decision in banc, through Mr. Justice Villamor said (syllabus): "When the attestation clause is
signed by the witnesses to the instruments besides the testator, such attestation clause is valid
and constitutes a substantial compliance with the provisions of section 1 of Act No. 2645, even
though the facts recited in said attestation appear to have been make by the testator himself."
That was good doctrine when it was announced. We think it is good law still. That ruling
should set the present case at rest unless the court wants to discard it. On the possibility that
this is the intention, we will dwell on the subject further.
This Court noted in Dichoso de Ticson vs. De Gorostiza, (1922), 57 Phil., 437, "that there have been
noticeable in the Philippines two divergent tendencies in the law of wills the one being
planted on strict construction and the other on liberal construction. A late example of the former
views may be found in the decision in Rodriguez vs. Alcala (1930), 55 Phil., 150, sanctioning a
literal enforcement of the law. The basic case in the other direction,predicated on reason,
is Abangan vs. Abangan (1919), 40 Phil., 476, oft-cited approvingly in later decisions." In the
Abangan case, unanimous court, speaking through Mr. Justice Avancea, later Chief Justice,
observed: "The object of the solemnities surrounding the execution of wills is to close the door
against bad faith and fraud, to avoid substitution of wills and testaments and to guaranty their
truth and authenticity. Therefore the laws on this subject should be interpreted in such a way as
to attain these primodial ends. But, on the other hand, also one must not lose sight of the fact
that it is not the object of the law to restrain and curtail the exercise of the right to make a will.
So when an interpretation already given assures such ends, any other interpretation
whatsoever, that adds nothing but demands more requisites entirely unnecessary, useless and
frustrative of the testator's last will, must be disregarded."
Subsequent decisions which followed and adopted the Abangan principle were
numerous: Avera vs. Garcia(1921), 42 Phil., 145; Aldaba vs. Roque (1922), 43 Phil., 378; Unson vs.
Abella (1922,) 43 Phil., 494; Pecson vs. Coronel (1923), 45 Phil., 216; Fernandez vs. Vergel de
Dios (1924), 46 Phil., 922; Nayve vs. Mojal (1924), 47 Phil., 152; De Gala vs. Gonzales (1929), 53 Phil.,
104; Rey vs. Cartegana (1931), 56 Phil., 282; Ticson vs. Gorostiza (1932), 57 Phil., 437; Testamentaria
de M. Ozoa (1933), 57 J. F., 1007; Sebastian vs. Paganiban(1934), 59 Phil., 653; Rodriguez vs.
Yap (1939)1, 40 Off. Gaz., 1st Suppl. No. 3, p. 194; Grey vs. Fabia (1939)2, 40 Off. Gaz., 1st Suppl.
No. 3, p. 196; Leynez vs. Leynez (1939)3, 40 Off. Gaz., 3rd Suppl. No. 7, p. 51; Martir vs.
Martir (1940)4, 40 Off. Gaz., 7th Suppl. No. 11, p. 215; Sabado vs. Fernandez (1941)5, 40 Off. Gaz.,

1844;Mendoza vs. Pilapil (1941)6 40 Off. Gaz., 1855; Alcala vs. De Villa (1941)7, 40 Off. Gaz., 14th
Suppl. No. 23, p. 131; and Lopez vs. Liboro (1948)8, 46 Off. Gaz., Suppl. No. 1, p. 211.
The majority decision says, and we quote: "If we cure a deficiency by means of inferences, when
are we going to stop making inferences to supply fatal deficiencies in wills? Where are we to
draw the line?" These same questions might well have been asked in the case above cited by the
opponents of the new trends. But the so-called liberal rule does not offer any puzzle or
difficulty, nor does it open the door to serious consequences. The decisions we have cited to tell
us when and where to stop; the dividing line is drawn with precision. They say "Halt" when
and where evidence aliunde to fill a void in any part of the document is attempted. They only
permit a probe, an exploration within the confines of the will, to ascertain its meaning and to
determine the existence or absence of the formalities of law. They do not allow the courts to go
outside the will or to admit extrinsic evidence to supply missing details that should appear in
the will itself. This clear, sharp limitation eliminates uncertainly and ought to banish any fear of
dire results.
The case at hand comes within the bounds thus defined. If the witnesses here purposely omitted
or forgot that the testator signed the will in their presence, the testator said that he did and the
witnesses by their signatures in the will itself said it was so. No extraneous proof was necessary
and none was introduced or taken into consideration.
To regard the letter rather than the spirit of the will and of the law behind it was the thing that
led to unfortunate consequences. It was the realization of the injustice of the old way that
impelled this court, so we believe, to forsake the antiquated, outworn worship of form in
preference to substance. It has been said, and experience has known, that the mechanical system
of construction has operated more to defeat honest wills than prevent fraudulent ones. That, it
must be conceded, is the effect in this case of this court's rejection of the will under
consideration. For the adverse party concedes the genuineness of the document. At least, the
genuineness is super obvious, and there is not the slightest insinuation of undue pressure,
mental incapacity of the testator of fraud.
It is said that for the testator to certify that he signed the will in the witnesses' presence "would
be like lifting one's self by his own bootstraps." The simile, we say with due respect, does not
look to us quite well placed. Under physical law a man cannot raise his body from the ground
by his own bare hands without the aid of some mechanical appliance, at least not for more than
a flitting moment. But there is no impossibility or impropriety in one attesting to his own act
unless forbidden by rules of positive law. The rationale of our dissent is that he is not. If we
were to make a metaphorical comparison, it would be more appropriate to say that a man can
and generally does himself pull the bootstraps to put the boots on.
Coming to execution of wills, we see no legitimate practical reason for objecting to the testator
instead of the witnesses certifying that he signed the will in the presence of the latter. The will is
the testator's and the intervention of attesting witnesses is designed merely to protect the
testator's and not anybody else's interest.
If the sole purpose of the statute is to make it certain that the testator has definite and complete
intention to pass his property, and to prevent, as far as possible, any chance of substituting one

instrument for another (1 Page on Wills, 481), What better guaranty of the genuineness of the
will can there be than a certification by the testator himself in the body of the will so long as the
testator's signature is duly authenticated? Witnesses may sabotage the will by muddling it or
attestation clause. For the testator, who is desirous of making a valid will, to do so would be a
contradiction. If the formalities are only a means to an end and not the end themselves, and that
end is achieved by another method slightly different from the prescribed manner, what has
been done by the testator and the witnesses in the execution of the instant will should satisfy
both law and conscience. The chief requirements of statutes are writing, signature by the
testator, and attestation and signature of three witnesses. Whether the courts profess to follow
the harsher rule, whether to follow the milder rule, they agree on one thing that as long as
the testator performs each of those acts the courts should require no more. (1 Page on Wills, 481,
484.)
Paras, Feria, Montemayor and Bautista Angelo, JJ., concur.

RESOLUTION
March 20, 1953
TUASON, J.:
This appeal is before us on a motion for reconsideration of this court's decision. Whereas
formerly six justices voted for reversal and five for affirmance of the probate court's order
admitting the will to probate, the vote upon reconsideration was six for affirmance and five for
reversal, thereby making the dissenting opinion, which had been filed, the prevailing rule of the
case. Under the circumstances, this resolution will largely be confined to a restatement of that
dissenting opinion.
The will in question was presented for probate in the Court of First Instance of Manila in 1943
with Roberto Toledo y Gil, decedent's nephew, and Pilar Gil Vda. de Murciano, decedent's
sister opposing the application. Toledo's legal right to intervene was questioned by the
proponent of the will, and the objection was sustained in an order which was affirmed by this
court in G. R. No. L-254. As a result of the latter decision, Toledo was eliminated from the case
and did not appear when the trial was resumed.
The proceeding seems to have held in abeyance pending final disposition of Toledo's appeal,
and early in 1945, before the application was heard on the merit, the record, along with the will,
was destroyed, necessitating its reconstitution after liberation. In the reconstitution, a
stipulation of facts was submitted in which, according to the appealed order, "both parties . . .
agreed that the will as transcribed in the record on appeal in Case G. R. No. L-254 is true and a
correct copy.
The will consisted of only two pages, and the attestation clause as thus copied reads:

NOSOTROS los que suscribimos, todos mayores de edad, certificamos: que el

testamento que precede escrito en la lengua castellana que canoce la testador, compuesto
de dos paginas utiles con la clausula de atestigamiento paginadas correlativamente en
letras y numeros en la parte superior de la casilla, asi como todas las hojas del mismo, en
nuestra presencia y que cada uno de nosotros hemos atestiguado y firmado dicho
documento y todas las hojas del mismo en presencia del testador y en la de cada uno de
nosotros.
(Fdo.) ALFREDO T. RIVERA.
(Fdo.) RAMON MENDIOLA.
(Fdo.) MARIANO OMAA
It will be noted from the above copy that the last of the compound sentence is truncated and
meaningless. This defect is the main basis of the appellant's sole assignment of error.
Counsel for appellee contend that the phrase "han sido firmadas por el testador" or equivalent
expression between the words "del mismo" and the words "en nuestra presencia" should be
inserted if the attestation clause is to be complete and have sense. With this insertion the
attestation clause would read ". . ., asi como todas las hojas del mismo han sido firmadas por el
testador en nuestra presencia . . ." The point is well taken.
It seems obvious that the missing phrase was left out from the copy. The probabilities of error in
the copy are enhanced by the fact that the form of the Will was not controversy in Toledo's
appeal. The form of the will being immaterial, it is easily conceivable that little or no care was
employed in transcribing the document in the agreement or record on appeal. The absence of
the signature of the testator on the first page of the copy is an additional proof that little or no
pain taken to insure accuracy in the transcription. The appearance of "la testadora" in the copy
instead of "el testador" is another indication of the haste and carelessness in the transcription.
Quite aside from all this, the testator was presumed to know the law, as the trial court says.
Certainly, Attorney Mariano Omaa, who drew the instrument and signed it as an attesting
witness, knew the law and, by the context thereof, has shown familiarity with the rules of
grammar and ability to express his idea properly. In the light of these circumstances and of
further fact that the clause was brief and, by its importance, must have been written with
utmost concern, so important an omission as to make the clause or sentence senseless could not
have been made, intentionally or otherwise, in the original.
There is insinuation that the appellee in agreeing that the will read as it was "reproduced in the
Record on appeal" is bound by the agreement. This is not an absolute rule. The binding effect of
a stipulation on the parties does not go to the extent of barring either of them from impeaching
it on the score of clerical error or clear mistake. The mistake just pointed out clearly brings the
case within the exceptions of the rule. The able counsel for the proponent of the will could not
possibly have subscribed to the agreement if they had noticed the incomplete sentence in the
copy without making an objection or reservation.

The problem posed by the omission in question is governed, not by the law of wills which
requires certain formalities to be fulfilled in the execution, but by the rules of construction
applicable to statutes and documents in general. And this rule would obtain whether the
omission occurred in the original document or in the copy alone. In either case, the court may
and should correct the error by supplying the omitted word or words.
In Testamentaria del finado Emiliano Alcala, a similar situation arose and the court said:
Es evidente que leyendo la clausula de atestiguacion se nota a simple vista que en su
redaccion se ha incurrido en omisiones que la razon y el sentido cumon pueden suplirlas
sin altenar ni tergiversar la intencion tanto del testador como la de los tres testigos que
intervenieron en el otorgamiento de la misma. Teniendo en cuenta la fraseologia de la
segunda parte de la clausula se observara que las omisiones, aunque son substanciales,
consisten en meros errores gramaticales que los tribunales, en el ejercicio de su
discrecion y en la aplicacion de las reglas de interpretacion de documentos, pueden
subsanarlos para dar efectividad a la intencion y hacer que el conjunto de los terminos
de la clausula de atestacion surtan efectos.
La interpretacion que se acaba de dar a la clausula de atestacion y la correccion de los
errores gramanticales de que misma adolece, incluyedo la insercion del verbo
"firmamos" que se omitio involuntariamente, esta de acurdo con las reglas
fundamentales de interpretacion de documentos segun las cuales se debe hacer
prevalecer siempre la intencion del que haya redactado el instrumento (art 286, Cod. de
Proc. Civil; Pecson contra Coronel, 45 Jur. Fil., 224; 28 R. C. L., sec. 187, pages. 225, 226).
La solucion que se acaba de dar al asunto es la que se halla mas conforme con la justicia
en vista de que no se ha presentado prueba alguna que insinue siquiera que en el
otorgamiento del testamiento se ha cometido dolo o fraude con el animo de perjudicar a
cualquiera. Testamentaria de Emiliano Alcala, 40 Gaz. Of., 14. Supplemento, No. 23,
pags. 131, 132.)
From 69 C. J. 82, 83, we quote: "Words omitted from a will may be supplied by the court
whenever necessary to effectuate the testator's intention as expressed in the will: but not where
the effect of inserting the words in the will would alter or defeat such intention, or change the
meaning of words that are clear and unequivocal." On pages 50 and 51, the same work says: "To
aid the court in ascertaining and giving effect to the testator's intention in the case of an
ambiguous will, certain rules been established for guidance in the construction or interpretation
to be placed upon such a will, and in general a will should be construed according to these
established rules of construction." And referring to construction of statues which, as has been
said, is applicable to construction of documents, C. J. S., in Vol. 59, p. 992, tells us that "Where it
appears from the context that certain words have been inadvertently from a statute, the court
may supply such words as are necessary to complete the sense, and to express the legislative
intent."
Adding force to the above principle is the legal presumption that the will is in accordance with
law. (2 Page on Wills 840; 57 Am. Jur., 720.)

But let it be assumed, for the sake of this decision only, that the attestation clause was drawn
exactly as it was copied in Toledo's record on appeal, was the mistake fatal? Was it, or was it
not, cured by the testator's own declaration? to wit: "En testimonio de lo cual, firmo este mi
testamento y en el margen izquierdo de cada una de sus dos paginas utiles con la clausula de
atestiguamiento en presencia de los testigos, quienes a su vez firmaron cada una de dichas
paginas y la clausula de atestiguamiento en mi presencia cada uno de ellos con la de los demas,
hoy en Porac, Pampanga, I. F., el dia 27 de marzo de mil novecientos treinta y nueve." The
answer is in the negative.
As early as 1922 a similar case, in which the validity of the will was sustained, found its way
into this court. SeeAldaba vs. Roque, 43 Phil., 378. That case was more than foursquare behind the
case at bar. There the departure from the statutory formality was more radical, in that the
testator took charge of writing the entire attestation clause in the body of the will, the witnesses
limiting their role to signing the document below the testator's signature. Here, at the most, the
testator took away from the witnesses only a small part of their assigned task, leaving to them
the rest.
Referring to "the lack of attestation clause required by law," this court, in a unanimous decision
in banc, through Mr. Justice Villamor said in the Adalba-Roque case (syllabus):
When the attestation clause is signed by the witnesses to the instruments, besides the testator,
such attestation clause is valid and constitutes a substantial compliance with the provisions of
section 1 of Act No. 2645, even though the facts recited in said attestation clause appear to have
been made by the testator himself.
That ruling should set the present case at rest unless we want to revert to the old, expressly
abandoned doctrine, in a long line of what we believe to be better-considered decisions.
This court noted in Dichoso de Ticson vs. De Gorostiza (1922), 57 Phil., 437, "that there have been
noticeable in the Philippines two divergent tendencies in the lie of wills the one being
planted on strict construction and the other on liberal construction. A late example of the former
views be found in the decision in Rodriguez vs. Alcala(1930), 55 Phil., 150, sanctioning a literal
enforcement of the law. The basic rule in the other direction, predicated on reason, is Abangan vs.
Abangan (1919), 40 Phil., 476, oft-cited approvingly in later decisions."
In the Abangan case, a unanimous court, speaking through Mr. Justice Avancea, later Chief
Justice, observed:
"The object of the solemnities surrounding the execution of wills is to close the door against bad
faith and fraud, to avoid substitution of wills and testaments and to guaranty their truth and
authenticity. Therefore the laws on this subject should be interpreted in such a way as to attain
these primodial ends. But, on the other hand, also one must not lose sight of the fact that it is
not the object of the law to restrain and curtail the exercise of the right to make a will. So when
an interpretation already given assures such ends, any other interpretation whatsoever, that
adds nothing but demands more requisites entirely unnecessary, useless and frustrative of the
testator's last will, must be disregarded."

Subsequent decisions which followed and adopted the Abangan principle were: Avera vs.
Garcia (1921), 42 Phil., 145; Aldaba vs. Roque (1922), 43 Phil., 378; Unson vs. Abella (1922), 43 Phil.,
494; Pecson vs. Coronel (1923), 45 Phil., 216; Fernandez vs. Vergel de Dios (1924), 46 Phil., 922; Neyve
vs. Mojal (1924), 47 Phil., 152; De Gala vs. Gonzales (1929), 53 Phil., 104; Rey vs. Cartagena (1931), 56
Phil., 282; Ticson vs. Gorostiza (1932), 57 Phil., 437; Testamentaria de N. Ozoa (1933), 57 J. F.,
1007; Sebastian vs. Panganiban (1934), 59 Phil., 653; Rodriguez vs. Yap (1939), 40 Off. Gaz., 1st
Suppl. No. 3, p. 194; Grey vs. Fabia (1939), 40 Off. Gaz., 1st Suppl., No. 3, p. 196; Leynez vs.
Leynez (1939), 40 Off. Gaz., 3rd Suppl. No. 7, p. 51; Martir vs. Martir (1940), 40 Off. Gaz., 7th
Suppl. No. 11, p. 215; Sabado vs. Fernandez (1941), 40 Off. Gaz., 1844; Mendoza vs. Pilapil (1941), 40
Off. Gaz., 1855; Alcala vs. De Villa (1941), 40 Off. Gaz., 14th Suppl. No. 23, p. 131; and Lopez vs.
Liboro (1948), 46 Off. Gaz., Suppl. No. 1, p. 211.
It is objected that "If we cure a deficiency by means of inferences, when are we going to stop
making inferences to supply fatal deficiencies in wills? Where are we to draw the line?" These
same question might well have been asked by the opponents of the new trends in the cases
above cited. But the so-called liberal rule does not offer any puzzle or difficulty, nor does it
open the door to serious consequences. The later decisions do tell us when and where to stop;
they draw the dividing line with precision. They do not allow evidence aliunde to fill a void in
any part of the document or supply missing details that should appear in the will itself. They
only permit a probe into the will, an exploration within its confines, to ascertain its meaning or
to determine the existence or absence of the requisite formalities of law. This clear, sharp
limitation eliminates uncertainty and ought to banish any fear of dire results.
The case at hand comes within the bounds thus defined if the witnesses here purposely omitted
or forgot to say that the testator signed the will in their presence, the testator said that he did
and the witnesses by their signatures in the will itself said it was so. No extraneous proof was
necessary and none was introduced or taken into consideration.
To regard the letter rather than the spirit of the will and of the law behind it was the thing that
led to unfortunate consequences. It was the realization of the injustice of the old way that
impelled this court, so we believe, to forsake the antiquated, outworn worship of form in
preference to substance. It has been said, and experience has shown, that the mechanical system
of construction has operated more to defeat honest wills than prevent fraudulent ones. That,
must be conceded, would be the effect in this case if the will under consideration were rejected.
For the adverse party now concedes the genuineness of the document. At any rate, the
genuineness is super obvious, and there is not the slightest insinuation of undue pressure,
mental incapacity of the testator, or fraud.
It is said that for the testator to certify that he signed the will in the witnesses' presence "would
be like lifting one's self by his own bootstraps." The simile does not look to us quite well placed.
There is no impossibility or impropriety in one attesting to his own act unless forbidden by
rules of positive law. The rationale of this decision is that he is not. If we were to make a
metaphorical comparison, it would be more correct to say that a man can and generally does
himself pull the bootstraps when he puts his boots on.
Coming to execution of wills, we see no legitimate, practical reason for objecting to the testator
instead of the witnesses certifying that he signed the will in the presence of the latter. The will is

of the testator's own making, the intervention of attesting witnesses being designed merely to
protect his interest. If the sole purpose of the statute in requiring the intervention of witnesses is
to make it certain that the testator has definite and complete intention to pass his property, and
to prevent, as far as possible, any chance of substituting one instrument for another (1 Page on
Wills, 481), what better guaranty of the genuineness of the will can there be than a certification
by the testator himself in the body of the will so long as the testator's signature is duly
authenticated? Witnesses may sabotage the will by muddling and bungling it or the attestation
clause. For the testator, who is desirous of making a valid will, to do so would be a
contradiction. If the formalities are only a means to an end and not the end themselves, and that
end is achieved by another method slightly from the prescribed manner, what has been done by
the testator and the witnesses in the execution of the instant will should satisfy both law and
conscience.
A second ground of attack on the questioned will is that the first page or sheet thereof does not
bear the testator's signature. The discussion on the correctness of the copy of the attestation
clause amply answers this objection in fact, the appellee's case is much stronger on this point for
the reason that there is not only speculative but also positive basis for the conclusion that the
testator's signature was affixed to the first page of the original. Both the testator and the
attesting witnesses stated in the will and in the attestation clause, respectively, that the former
signed both pages or sheets of the testament.
Upon the foregoing consideration, the order of the probate court is affirmed with costs.
A motion dated February 17, 1953, was filed after the motion for reconsideration was
deliberated and voted upon, in behalf of the minor children of Carlos Worrel, who was a
residuary legatee under the will and who is alleged to have died on February 6, 1949. The
motion prays that a guardian ad litem be appointed for the said children, and allowed to
intervene and file "A Supplementary Memorandum in Support of Appellant's (Appellee's?)
Motion for reconsideration." Counsel for the appellant objects to the motion on the ground that
the movants having only a contingent interest under the will are not of right entitled to
intervene.
As this case has already been considerably delayed and thoroughly considered and discussed
from all angles, it is the sense of the court that the children's intervention with the consequent
further delay of the decision would not serve the best interest of the parties. For this reason, the
motion is denied.
Paras, Feria, Montemayor, Bautista Angelo and Labrador, JJ., concur.
Padilla and Reyes, JJ., dissent.

JUGO, PABLO and BENGZON, JJ., dissenting:

I dissent on the ground set forth in my opinion rendered in this case.

Footnotes
1

71 Phil., 561.

72 Phil., 546.

TUASON J., dissenting:

1

68 Phil., 126.

68 Phil., 128.

68 Phil., 745.

70 Phil., 89.

72 Phil., 531.

72 Phil., 546.

71 Phil., 561.

81 Phil., 429.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 82027 March 29, 1990

ROMARICO G. VITUG, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINOCORONA, respondents.
Rufino B. Javier Law Office for petitioner.
Quisumbing, Torres & Evangelista for private respondent.

SARMIENTO, J.:

This case is a chapter in an earlier suit decided by this Court 1 involving the probate of the two
wills of the late Dolores Luchangco Vitug, who died in New York, U. S.A., on November 10,
1980, naming private respondent Rowena Faustino-Corona executrix. In our said decision, we
upheld the appointment of Nenita Alonte as co-special administrator of Mrs. Vitug's estate with
her (Mrs. Vitug's) widower, petitioner Romarico G. Vitug, pending probate.
On January 13, 1985, 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 in the sum of P667,731.66, plus interests, which he claimed were
personal funds. As found by the Court of Appeals, 2the alleged advances consisted of P58,147.40
spent for the payment of estate tax, P518,834.27 as deficiency estate tax, and P90,749.99 as
"increment thereto." 3 According to Mr. Vitug, he withdrew the sums of P518,834.27 and
P90,749.99 from savings account No. 35342-038 of the Bank of America, Makati, Metro Manila.
On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that the same
funds withdrawn from savings account No. 35342-038 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." 4
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 on June 19, 1970. The
agreement provides:
We hereby agree with each other and with the BANK OF AMERICAN
NATIONAL TRUST AND SAVINGS ASSOCIATION (hereinafter referred to as
the BANK), that all money now or hereafter deposited by us or any or either of
us with the BANK in our joint savings current account shall be the property of all
or both of us and shall be payable to and collectible or withdrawable by either or
any of us during our lifetime, and after the death of either or any of us shall
belong to and be the sole property of the survivor or survivors, and shall be
payable to and collectible or withdrawable by such survivor or survivors.
We further agree with each other and the BANK that the receipt or check of
either, any or all of us during our lifetime, or the receipt or check of the survivor
or survivors, for any payment or withdrawal made for our above-mentioned
account shall be valid and sufficient release and discharge of the BANK for such
payment or withdrawal. 5
The trial courts 6 upheld the validity of this agreement and granted "the motion to sell some of
the estate of Dolores L. Vitug, the proceeds of which shall be used to pay the personal funds of
Romarico Vitug in the total sum of P667,731.66 ... ."7
On the other hand, the Court of Appeals, in the petition for certiorari filed by the herein private
respondent, held that the above-quoted 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," 8 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. 9
The dispositive portion of the decision of the Court of Appeals states:
WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex
II, petition) is hereby set aside insofar as it granted private respondent's motion
to sell certain properties of the estate of Dolores L. Vitug for reimbursement of
his alleged advances to the estate, but the same order is sustained in all other
respects. In addition, respondent Judge is directed to include provisionally the
deposits in Savings Account No. 35342-038 with the Bank of America, Makati, in
the inventory of actual properties possessed by the spouses at the time of the
decedent's death. With costs against private respondent. 10
In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the strength of
our decisions inRivera v. People's Bank and Trust Co. 11 and Macam v. Gatmaitan 12 in which we
sustained the validity of "survivorship agreements" and considering them as aleatory
contracts. 13
The petition is meritorious.
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." 14 In other words, the bequest or device must pertain to the
testator. 15 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. People's Bank and Trust Co., 16 we rejected claims
that a survivorship agreement purports to deliver one party's separate properties in favor of the
other, but simply, their joint holdings:
xxx xxx xxx
... Such conclusion is evidently predicated on the assumption that Stephenson
was the exclusive owner of the funds-deposited in the bank, which assumption
was in turn based on the facts (1) that the account was originally opened in the
name of Stephenson alone and (2) that Ana Rivera "served only as housemaid of
the deceased." But it not infrequently happens that a person deposits money in
the bank in the name of another; and in the instant case it also appears that Ana
Rivera served her master for about nineteen years without actually receiving her
salary from him. The fact that subsequently Stephenson transferred the account
to the name of himself and/or Ana Rivera and executed with the latter the
survivorship agreement in question although there was no relation of kinship
between them but only that of master and servant, nullifies the assumption that
Stephenson was the exclusive owner of the bank account. In the absence, then, of
clear proof to the contrary, we must give full faith and credit to the certificate of
deposit which recites in effect that the funds in question belonged to Edgar
Stephenson and Ana Rivera; that they were joint (and several) owners thereof;

and that either of them could withdraw any part or the whole of said account
during the lifetime of both, and the balance, if any, upon the death of either,
belonged to the survivor. 17
xxx xxx xxx
In Macam v. Gatmaitan, 18 it was held:
xxx xxx xxx
This Court is of the opinion that Exhibit C is an aleatory contract whereby,
according to article 1790 of the Civil Code, one of the parties or both reciprocally
bind themselves to give or do something as an equivalent for that which the
other party is to give or do in case of the occurrence of an event which is
uncertain or will happen at an indeterminate time. As already stated, Leonarda
was the owner of the house and Juana of the Buick automobile and most of the
furniture. By virtue of Exhibit C, Juana would become the owner of the house in
case Leonarda died first, and Leonarda would become the owner of the
automobile and the furniture if Juana were to die first. In this manner Leonarda
and Juana reciprocally assigned their respective property to one another
conditioned upon who might die first, the time of death determining the event
upon which the acquisition of such right by the one or the other depended. This
contract, as any other contract, is binding upon the parties thereto. Inasmuch as
Leonarda had died before Juana, the latter thereupon acquired the ownership of
the house, in the same manner as Leonarda would have acquired the ownership
of the automobile and of the furniture if Juana had died first. 19
xxx xxx xxx
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 marita. relations. 20
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 spouse's 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, 21 by "mere stipulation" 22 and that it is no
"cloak" 23 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. And since the funds
were conjugal, it can not be said that one spouse could have pressured the other in placing his
or her deposits in the money pool.

The validity of the contract seems debatable by reason of its "survivor-take-all" feature, but in
reality, that contract imposed a mere obligation with a term, the term being death. Such
agreements are permitted by the Civil Code.24
Under Article 2010 of the Code:
ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind
themselves to give or to do something in consideration of what the other shall
give or do upon the happening of an event which is uncertain, or which is to
occur at an indeterminate time.
Under the aforequoted provision, the fulfillment of an aleatory contract depends on either the
happening of an event which is (1) "uncertain," (2) "which is to occur at an indeterminate time."
A survivorship agreement, the sale of a sweepstake ticket, a transaction stipulating on the value
of currency, and insurance have been held to fall under the first category, while a contract for
life annuity or pension under Article 2021, et sequentia, has been categorized under the
second. 25 In either case, the element of risk is present. In the case at bar, the risk was the death
of one party and survivorship of the other.
However, as we have warned:
xxx xxx xxx
But although the survivorship agreement is per se not contrary to law its
operation or effect may be violative of the law. For instance, if it be shown in a
given case that such agreement is a mere cloak to hide an inofficious donation, to
transfer property in fraud of creditors, or to defeat the legitime of a forced heir, it
may be assailed and annulled upon such grounds. No such vice has been
imputed and established against the agreement involved in this case. 26
xxx xxx xxx
There is no demonstration here that the survivorship agreement had been executed for such
unlawful purposes, or, as held by the respondent court, in order to frustrate our laws on wills,
donations, and conjugal partnership.
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.
WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987, and its
resolution, dated February 9, 1988, are SET ASIDE.
No costs.

SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado JJ., concur.

Footnotes
1 Corona v. Court of Appeals, No. 59821, August 30, 1982, 116 SCRA 316.
2 Kapunan, Santiago, M., J., ponente; Puno Reynato S. and Marigomen
Alfredo, JJ., concurring.
3 Rollo, 21.
4 Id., 22.
5 Id.
6 Judge (now Justice of the Court of Appeals) Asaali S. Isnani presiding.
7 Rollo, 23.
8 Id., 26.
9 Now, Article 87 of the Family Code.
10 Rollo, 28-29.
11 73 Phil. 546 (1942).
12 64 Phil. 187 (1937).
13 CIVIL CODE, Art. 2010.
14 III TOLENTINO, CIVIL CODE OF THE PHILIPPINES 26 (1973 ed.), citing 1
GOMEZ 53.
15 See CIVIL CODE, supra., arts. 793, 794, 930.
16 Supra.
17 Supra., 547.
18 Supra.

19 Supra., 190-191.
20 CIVIL CODE, supra, art. 160.
21 In the words of the Appellate Court: "Since private respondent and his late
wife did not enter into a marriage settlement before marriage, their property
relationship was that of conjugal partnership governed by the Civil Code. The
system of conjugal partnership prohibits, as already mentioned, donation
between the spouses during the marriage, except that which takes effect after the
death of the donor, in which case, the donation shall comply with the formalities
of a will (Arts. 133, 728, 805). To allow the prohibited donation by giving it a
cloak of aleatory contract would sanction a (modification) of a marriage
settlement during marriage by a mere stipulation. As mandated by Art. 52, the
nature, consequences and incidents of marriage, which is not a mere contract but
an inviolable social institution are governed by law, and not subject to
stipulation."
22 Id.
23 Id.
24 CIVIL CODE, supra., art. 1193.
25 V PARAS, CIVIL CODE OF THE PHILIPPINES, 782 (1986 ed.)
26 Rivera, supra, 548.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-22036 April 30, 1979
TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE PARISH
PRIEST OF THE ROMAN CATHOLIC CHURCH OF VICTORIA, TARLAC, petitionerappellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and JOVITA
ESCOBAR DE FAUSTO,respondents-appellees.
D. Taedo, Jr. for appellants.
J. Palanca, Sr. for appellee.

AQUINO, J.:
This case is about the efficaciousness or enforceability of a devise of ricelands located at
Guimba, Nueva Ecija, with a total area of around forty- four hectares That devise was made in
the will of the late Father Pascual Rigor, a native of Victoria Tarlac, in favor of his nearest male
relative who would study for the priesthood.
The parish priest of Victoria, who claimed to be a trustee of the said lands, appealed to this
Court from the decision of the Court of Appeals affirming the order of the probate court
declaring that the said devise was inoperative (Rigor vs. Parish Priest of the Roman Catholic
Church of Victoria, Tarlac, CA-G.R. No. 24319-R, August 1, 1963).
The record discloses that Father Rigor, the parish priest of Pulilan, Bulacan, died on August 9,
1935, leaving a will executed on October 29, 1933 which was probated by the Court of First
Instance of Tarlac in its order of December 5, 1935. Named as devisees in the will were the
testators nearest relatives, namely, his three sisters: Florencia Rigor-Escobar, Belina RigorManaloto and Nestora Rigor-Quiambao. The testator gave a devise to his cousin, Fortunato
Gamalinda.
In addition, the will contained the following controversial bequest (paragraphing supplied to
facilitate comprehension of the testamentary provisions):
Doy y dejo como legado CUATRO (4) PARCELAS de terreno palayeros situados
en el municipiooo de Guimba de la provinciaaa de NUEVA ECIJA, cuyo num. de
CERTIFICADO DE TRANSFERENCIA DE TITULO SON; Titulo Num. 6530,
mide 16,249 m. cuadrados de superficie Titulo Num. 6548, mide 242,998 m.
cuadrados de superficie y annual 6525, mide 62,665 m. cuadrados de superficie; y
Titulo Num. 6521, mide 119,251 m. cuadrados de superficie; a cualquier pariente
mio varon mas cercano que estudie la carrera eclesiatica hasta ordenarse de Presbiterado o
sea Sacerdote; las condiciones de estate legado son;
(1.a) Prohibe en absoluto la venta de estos terrenos arriba situados objectos de
este legado;
(2.a) Que el legatario pariente mio mas cercano tendra derecho de empezar a
gozar y administrar de este legado al principiar a curzar la Sagrada Teologio, y
ordenado de Sacerdote, hasta su muerte; pero que pierde el legatario este
derecho de administrar y gozar de este legado al dejar de continuar sus estudios
para ordenarse de Presbiterado (Sacerdote).
Que el legatario una vez Sacerdote ya estara obligado a celebrar cada ao
VEINTE (20) Misas rezadas en sufragio de mi alma y de mis padres difuntos, y si
el actual legatario, quedase excomulgado, IPSO FACTO se le despoja este legado,
y la administracion de esto pasara a cargo del actual Parroco y sus sucesores de
la Iglecia Catolica de Victoria, Tarlac.

Y en intervalo de tiempo que no haya legatario acondicionado segun lo arriba

queda expresado, pasara la administracion de este legado a cargo del actual
Parroco Catolico y sus sucesores, de Victoria, Tarlac.
El Parroco administrador de estate legado, acumulara, anualmente todos los
productos que puede tener estate legado, ganando o sacando de los productos
anuales el CINCO (5) por ciento para su administracion, y los derechos
correspondientes de las VEINTE (20) Misas rezadas que debiera el Parroco
celebrar cada ao, depositando todo lo restante de los productos de estate
legado, en un banco, a nombre de estate legado.
To implement the foregoing bequest, the administratix in 1940 submitted a project containing
the following item:
5. LEGACY OF THE CHURCH
That it be adjudicated in favor of the legacy purported to be given to the nearest
male relative who shall take the priesthood, and in the interim to be
administered by the actual Catholic Priest of the Roman Catholic Church of
Victoria, Tarlac, Philippines, or his successors, the real properties hereinbelow
indicated, to wit:
T
i
t
l
e
N
o
.

L
ot
N
o.

Ar
ea
in
Ha
s.

T
ax
D
ec
.

Ass
.
Val
ue

T
6
5
3
0

3
6
6
3

1.6
249

18
74
0

P
340.
00

T
6
5
4
8

3
4
4
5C

24.
299
8

18
73
0

7,29
0.00

T
-

3
6

6.2
665

18
73

1,88
0.00

6
5
2
5

7
0

T
6
5
2
1

3
6
6
6

11.
925
1

18
73
3

3,58
0.00

Total amount and value 44.1163 P13,090.00

Judge Roman A. Cruz in his order of August 15, 1940, approving the project of partition,
directed that after payment of the obligations of the estate (including the sum of P3,132.26 due
to the church of the Victoria parish) the administratrix should deliver to the devisees their
respective shares.
It may be noted that the administratrix and Judge Cruz did not bother to analyze the meaning
and implications of Father Rigor's bequest to his nearest male relative who would study for the
priesthood. Inasmuch as no nephew of the testator claimed the devise and as the administratrix
and the legal heirs believed that the parish priest of Victoria had no right to administer the
ricelands, the same were not delivered to that ecclesiastic. The testate proceeding remained
pending.
About thirteen years after the approval of the project of partition, or on February 19, 1954, the
parish priest of Victoria filed in the pending testate proceeding a petition praying for the
appointment of a new administrator (succeeding the deceased administration Florencia Rigor),
who should deliver to the church the said ricelands, and further praying that the possessors
thereof be ordered to render an accounting of the fruits. The probate court granted the petition.
A new administrator was appointed. On January 31, 1957 the parish priest filed another petition
for the delivery of the ricelands to the church as trustee.
The intestate heirs of Father Rigor countered with a petition dated March 25, 1957 praying that
the bequest be d inoperative and that they be adjudged as the persons entitled to the said
ricelands since, as admitted by the parish priest of Victoria, "no nearest male relative of" the
testator "has ever studied for the priesthood" (pp. 25 and 35, Record on Appeal). That petition
was opposed by the parish priest of Victoria.
Finding that petition to be meritorious, the lower court, through Judge Bernabe de Aquino,
declared the bequest inoperative and adjudicated the ricelands to the testator's legal heirs in his
order of June 28, 1957. The parish priest filed two motions for reconsideration.
Judge De Aquino granted the respond motion for reconsideration in his order of December 10,
1957 on the ground that the testator had a grandnephew named Edgardo G. Cunanan (the

grandson of his first cousin) who was a seminarian in the San Jose Seminary of the Jesuit
Fathers in Quezon City. The administrator was directed to deliver the ricelands to the parish
priest of Victoria as trustee.
The legal heirs appealed to the Court of Appeals. It reversed that order. It held that Father Rigor
had created a testamentary trust for his nearest male relative who would take the holy orders
but that such trust could exist only for twenty years because to enforce it beyond that period
would violate "the rule against perpetuities. It ruled that since no legatee claimed the ricelands
within twenty years after the testator's death, the same should pass to his legal heirs, citing
articles 888 and 912(2) of the old Civil Code and article 870 of the new Civil Code.
The parish priest in this appeal contends that the Court of Appeals erred in not finding that the
testator created a public charitable trust and in not liberally construing the testamentary
provisions so as to render the trust operative and to prevent intestacy.
As refutation, the legal heirs argue that the Court of Appeals d the bequest inoperative because
no one among the testator's nearest male relatives had studied for the priesthood and not
because the trust was a private charitable trust. According to the legal heirs, that factual finding
is binding on this Court. They point out that appellant priest's change of theory cannot be
countenanced in this appeal .
In this case, as in cases involving the law of contracts and statutory construction, where the
intention of the contracting parties or of the lawmaking body is to be ascertained, the primary
issue is the determination of the testator's intention which is the law of the case (dicat testor et
erit lex. Santos vs. Manarang, 27 Phil. 209, 215; Rodriguez vs. Court of Appeals, L-28734, March
28, 1969, 27 SCRA 546).
The will of the testator is the first and principal law in the matter of testaments. When his
intention is clearly and precisely expressed, any interpretation must be in accord with the plain
and literal meaning of his words, except when it may certainly appear that his intention was
different from that literally expressed (In re Estate of Calderon, 26 Phil. 333).
The intent of the testator is the cardinal rule in the construction of wills." It is "the life and soul
of a will It is "the first greatest rule, the sovereign guide, the polestar, in giving effect to a will".
(See Dissent of Justice Moreland in Santos vs. Manarang, 27 Phil. 209, 223, 237-8.)
One canon in the interpretation of the testamentary provisions is that "the testator's intention is
to be ascertained from the words of the wilt taking into consideration the circumstances under
which it was made", but excluding the testator's oral declarations as to his intention (Art. 789,
Civil Code of the Philippines).
To ascertain Father Rigor's intention, it may be useful to make the following re-statement of the
provisions of his will.
1. that he bequeathed the ricelands to anyone of his nearest male relatives who would pursue an
ecclesiastical career until his ordination as a priest.

2. That the devisee could not sell the ricelands.

3. That the devisee at the inception of his studies in sacred theology could enjoy and administer
the ricelands, and once ordained as a priest, he could continue enjoying and administering the
same up to the time of his death but the devisee would cease to enjoy and administer the
ricelands if he discontinued his studies for the priesthood.
4. That if the devisee became a priest, he would be obligated to celebrate every year twenty
masses with prayers for the repose of the souls of Father Rigor and his parents.
5. That if the devisee is excommunicated, he would be divested of the legacy and the
administration of the riceland would pass to the incumbent parish priest of Victoria and his
successors.
6. That during the interval of time that there is no qualified devisee as contemplated above, the
administration of the ricelands would be under the responsibility of the incumbent parish priest
of Victoria and his successors, and
7. That the parish priest-administrator of the ricelands would accumulate annually the products
thereof, obtaining or getting from the annual produce five percent thereof for his administration
and the fees corresponding to the twenty masses with prayers that the parish priest would
celebrate for each year, depositing the balance of the income of the devise in the bank in the
name of his bequest.
From the foregoing testamentary provisions, it may be deduced that the testator intended to
devise the ricelands to his nearest male relative who would become a priest, who was forbidden
to sell the ricelands, who would lose the devise if he discontinued his studies for the priesthood,
or having been ordained a priest, he was excommunicated, and who would be obligated to say
annually twenty masses with prayers for the repose of the souls of the testator and his parents.
On the other hand, it is clear that the parish priest of Victoria would administer the ricelands
only in two situations: one, during the interval of time that no nearest male relative of the
testator was studying for the priesthood and two, in case the testator's nephew became a priest
and he was excommunicated.
What is not clear is the duration of "el intervalo de tiempo que no haya legatario acondicionado",
or how long after the testator's death would it be determined that he had a nephew who would
pursue an ecclesiastical vocation. It is that patent ambiguity that has brought about the
controversy between the parish priest of Victoria and the testator's legal heirs.
Interwoven with that equivocal provision is the time when the nearest male relative who would study
for the priesthood should be determined. Did the testator contemplate only his nearest male
relative at the time of his death? Or did he have in mind any of his nearest male relatives
at anytime after his death?
We hold that the said bequest refers to the testator's nearest male relative living at the time of his
death and not to any indefinite time thereafter. "In order to be capacitated to inherit, the heir,

devisee or legatee must be living at the moment the succession opens, except in case of
representation, when it is proper" (Art. 1025, Civil Code).
The said testamentary provisions should be sensibly or reasonably construed. To construe them
as referring to the testator's nearest male relative at anytime after his death would render the
provisions difficult to apply and create uncertainty as to the disposition of his estate. That could
not have been his intention.
In 1935, when the testator died, his nearest leagal heirs were his three sisters or second-degree
relatives, Mrs. Escobar, Mrs. Manaloto and Mrs. Quiambao. Obviously, when the testator
specified his nearest male relative, he must have had in mind his nephew or a son of his sister,
who would be his third-degree relative, or possibly a grandnephew. But since he could not
prognosticate the exact date of his death or state with certitude what category of nearest male
relative would be living at the time of his death, he could not specify that his nearest male
relative would be his nephew or grandnephews (the son of his nephew or niece) and so he had
to use the term "nearest male relative".
It is contended by the legal heirs that the said devise was in reality intended for Ramon
Quiambao, the testator's nephew and godchild, who was the son of his sister, Mrs. Quiambao.
To prove that contention, the legal heirs presented in the lower court the affidavit of Beatriz
Gamalinda, the maternal grandmother of Edgardo Cunanan, who deposed that after Father
Rigor's death her own son, Valentin Gamalinda, Jr., did not claim the devise, although he was
studying for the priesthood at the San Carlos Seminary, because she (Beatriz) knew that Father
Rigor had intended that devise for his nearest male relative beloning to the Rigor family (pp. 105114, Record on Appeal).
Mrs. Gamalinda further deposed that her own grandchild, Edgardo G. Cunanan, was not the
one contemplated in Father Rigor's will and that Edgardo's father told her that he was not
consulted by the parish priest of Victoria before the latter filed his second motion for
reconsideration which was based on the ground that the testator's grandnephew, Edgardo, was
studying for the priesthood at the San Jose Seminary.
Parenthetically, it should be stated at this juncture that Edgardo ceased to be a seminarian in
1961. For that reason, the legal heirs apprised the Court of Appeals that the probate court's
order adjudicating the ricelands to the parish priest of Victoria had no more leg to stand on (p.
84, Appellant's brief).
Of course, Mrs. Gamalinda's affidavit, which is tantamount to evidence aliunde as to the
testator's intention and which is hearsay, has no probative value. Our opinion that the said
bequest refers to the testator's nephew who was living at the time of his death, when his
succession was opened and the successional rights to his estate became vested, rests on a
judicious and unbiased reading of the terms of the will.
Had the testator intended that the "cualquier pariente mio varon mas cercano que estudie la
camera eclesiatica" would include indefinitely anyone of his nearest male relatives born after his
death, he could have so specified in his will He must have known that such a broad provision
would suspend for an unlimited period of time the efficaciousness of his bequest.

What then did the testator mean by "el intervalo de tiempo que no haya legatario
acondicionado"? The reasonable view is that he was referring to a situation whereby his
nephew living at the time of his death, who would like to become a priest, was still in grade
school or in high school or was not yet in the seminary. In that case, the parish priest of Victoria
would administer the ricelands before the nephew entered the seminary. But the moment the
testator's nephew entered the seminary, then he would be entitled to enjoy and administer the
ricelands and receive the fruits thereof. In that event, the trusteeship would be terminated.
Following that interpretation of the will the inquiry would be whether at the time Father Rigor
died in 1935 he had a nephew who was studying for the priesthood or who had manifested his
desire to follow the ecclesiastical career. That query is categorically answered in paragraph 4 of
appellant priest's petitions of February 19, 1954 and January 31, 1957. He unequivocally alleged
therein that "not male relative of the late (Father) Pascual Rigor has ever studied for the
priesthood" (pp. 25 and 35, Record on Appeal).
Inasmuch as the testator was not survived by any nephew who became a priest, the
unavoidable conclusion is that the bequest in question was ineffectual or inoperative. Therefore,
the administration of the ricelands by the parish priest of Victoria, as envisaged in the wilt was
likewise inoperative.
The appellant in contending that a public charitable trust was constituted by the testator in is
favor assumes that he was a trustee or a substitute devisee That contention is untenable. A
reading of the testamentary provisions regarding the disputed bequest not support the view
that the parish priest of Victoria was a trustee or a substitute devisee in the event that the
testator was not survived by a nephew who became a priest.
It should be understood that the parish priest of Victoria could become a trustee only when the
testator's nephew living at the time of his death, who desired to become a priest, had not yet
entered the seminary or, having been ordained a priest, he was excommunicated. Those two
contingencies did not arise, and could not have arisen in this case because no nephew of the
testator manifested any intention to enter the seminary or ever became a priest.
The Court of Appeals correctly ruled that this case is covered by article 888 of the old Civil
Code, now article 956, which provides that if "the bequest for any reason should be inoperative,
it shall be merged into the estate, except in cases of substitution and those in which the right of
accretion exists" ("el legado ... por qualquier causa, no tenga efecto se refundira en la masa de la
herencia, fuera de los casos de sustitucion y derecho de acrecer").
This case is also covered by article 912(2) of the old Civil Code, now article 960 (2), which
provides that legal succession takes place when the will "does not dispose of all that belongs to
the testator." There being no substitution nor accretion as to the said ricelands the same should
be distributed among the testator's legal heirs. The effect is as if the testator had made no
disposition as to the said ricelands.
The Civil Code recognizes that a person may die partly testate and partly intestate, or that there
may be mixed succession. The old rule as to the indivisibility of the testator's win is no longer

valid. Thus, if a conditional legacy does not take effect, there will be intestate succession as to
the property recovered by the said legacy (Macrohon Ong Ham vs. Saavedra, 51 Phil. 267).
We find no merit in the appeal The Appellate Court's decision is affirmed. Costs against the
petitioner.
SO ORDERED
Fernando, C.J.(Actg. ), Barredo (Actg. Chairman), Antonio, Concepcion, Jr., and Santos, JJ., concur.
Abad Santos, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10763

April 29, 1961

DELFIN YAMBAO, plaintiff-appellant,

vs.
ANGELINA GONZALES, ET AL., defendants-appellees.
Marcial G. Mendiola for plaintiff-appellant.
Onofre P. Guevara for defendants-appellees.
BAUTISTA ANGELO, J.:
This is an action filed by Delfin Yambao against Angelina Gonzales and Maria Pablo praying
that the latter be ordered to appoint and employ him as tenant during his lifetime on the parcels
of land bequeathed to and inherited by them from Maria Gonzales, as well as to deliver to him
the value of the harvests belonging to him as tenant of said parcels of land. In their answer,
defendants averred that the provisions of the will relied upon by plaintiff is not mandatory; that
the determination of who should be the tenant of the land is vested in a special court; and that
the present action is not the proper remedy.
After trial, the court dismissed the complaint for lack of sufficient cause of action. It held that
the provisions of the will relied upon by plaintiff merely amount to a suggestion to the
defendants who, though morally bound, are not legally compelled to follow said suggestion,
invoking as authority Article 797 of the old Civil Code. Plaintiff has appealed.
The pertinent provisions of the will relied upon by appellant read as follows:
Dapat din naman malaman ng dalawa kong tagapagmana na sila MARIA PABLO at
ANGELINA GONZALES na sila ay may dapat TUNGKULIN O GANGPANAN GAYA
ng mga sumusunod:

xxx

xxx

xxx

(2) Pahihintulutan nila na si Delfin Yambao ang makapagtrabajo ng bukid habang

panahon, at ang nasabing bukid ay isasailalim ng pamamahala ng Albasea samantalang
ang bukid ay nasa usapin at may utang pa.
It appears that on August 10, 1942, Maria Gonzales executed a will bequeathing to appellees all
her properties situated in Sta. Rosa, Laguna. The will was probated in 1948. Immediately,
thereafter, appellant went to appellees to request that he be placed as tenant of the riceland
which, by an express provision of said will, they were directed to give to him for cultivation, as
tenant, and when they refused alleging that they had already given it to another tenant he filed
the present action.
In holding that the provisions of the will relied upon by appellant imposes only a moral but not
a legal obligation, the trial court went on to consider the import of the word "Pahihintulutan"
employed with reference to appellant. In its opinion said word only means to permit or to allow,
but not to direct appellees to appoint appellant as tenant. Rather, it opines, it merely contains a
suggestion to employ because the testatrix did not use the words "ipinaguutos ko" which she
used in connection with other provisions of the will, so that there is no clear indication that it
was her intention to make such provision compulsory.
We believe, however, that the trial court has not properly interpreted the real import of the wish
of the testatrix. Analyzing it carefully we will find that the same contains a clear directive to
employ appellant as may be seen from the words preceding the word "pahihintulutan", which
say: "Dapat din naman malaman ng dalawa kong tagapagmana na sila MARIA PABLO at
ANGELINA GONZALES na sila ay may dapat TUNGKULIN O GANGPANAN GAYA ng mga
sumusunod." The words 'dapat TUNGKULIN O GANGPANAN" mean to do or to carry out as a
mandate or directive, and having reference to the word "pahihintulutan", can convey no other
meaning than to impose a duty upon appellees. To follow the interpretation given by the trial
court would be to devoid the wish of the testatrix of its real and true meaning.
Article 797 of the old Civil Code, invoked by the trial court, is inapplicable. That refers to an
institution of an heir intended to be conditional by providing that a statement to the effect
cannot be considered as a condition unless it appears clearly that such is the intention of the
testator. We are not faced here with any conditional institution of heirship. What we have is a
clear-cut mandate which the heirs cannot fail to carry out.
WHEREFORE, the decision appealed from is reversed. Appellees are hereby ordered to employ
appellant as tenant immediately after this decision has become final. Costs against appellees.
Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-15737

February 28, 1962

LEONOR VILLAFLOR VDA. DE VILLANUEVA, plaintiff-appellant,

vs.
DELFIN N. JUICO, in his capacity as Judicial Administrator of the testate estate of FAUSTA
NEPOMUCENO, defendant-appellee.
Amado G. Salazar for plaintiff-appellant.
Sycip, Salazar, Luna and Associates for defendant-appellee.
REYES, J.B.L., J.:
Subject to this direct appeal to us on points of law is the decision of the Court of First Instance of
Rizal, in its Civil Case No. Q-2809, dismissing plaintiff-appellant's complaint for the recovery of
certain properties that were originally owned by the plaintiff's granduncle, Nicolas Villaflor,
and which he granted to his widow, Doa Fausta Nepomuceno, bequeathing to her "su uso y
posesion mientras viva y no se case en segundas nupcias".
The following facts appear of record: On October 9, 1908, Don Nicolas Villaflor, a wealthy man
of Castillejos, Zambales, executed a will in Spanish in his own handwriting, devising and
bequeathing in favor of his wife, Dona Fausta Nepomuceno, one-half of all his real and personal
properties, giving the other half to his brother Don Fausto Villaflor.
Clause 6th, containing the institution of heirs, reads as follows: .
SEXTO En virtud de las facultades que me conceden las leyes, instituyo per mis
unicos y universales herederos de todos mis derechos y acciones a mi hermano D.
Fausto Villaflor y a mi esposa Da. Fausta Nepomuceno para que partan todos mis bienes
que me pertenescan, en iguales partes, para despues de mi muerte, exceptuando las
donaciones y legados que, abajo mi mas expontanea voluntad, lo hago en la forma
siguiente: .
SEPTIMO: Lego para dispues de mi muerte a mi esposa Da. Fausta Nepomuceno, en
prueba de mi amor y carino, los bienes, alhajas y muebles que a continuacion se
expresan; .
OCTAVO: Que estos legades disfrutaria mi referida esposa Da. Fausta Nepomuceno
su uso y posesion mientras viva y no se case en segundas nupcias, de la contrario,
pasara a ser propiedad estos dichos legados de mi sobrina nieta Leonor Villaflor.
The 12th clause of the will provided, however, that Clauses 6th and 7th thereof would be
deemed annulled from the moment he bore any child with Doa Fausta Nepomuceno. Said
Clause 12th reads as follows: .
DUODECIMO: Quedan anulados las parrafos 6.0 y 7.0 de este testamento que tratan
de institucion de herederos y los legados que se haran despues de mi muerte a favor de

mi esposa, en el momento que podre tener la dicha de contrar con hijo y hijos legitimos o
legitimados, pues estos, conforme a ley seran mis herederos.
Don Nicolas Villaflor died on March 3, 1922, without begetting any child with his wife Doa
Fausta Nepomuceno. The latter, already a widow, thereupon instituted Special Proceeding No.
203 of the Court of First Instance of Zambales, for the settlement of her husband's estate and in
that proceeding, she was appointed judicial administratrix. In due course of administration, she
submitted a project of partition, now Exhibit "E". In the order of November 24, 1924, now
exhibit "C", the probate court approved the project of partition and declared the proceeding
closed. As the project of partition, Exhibit "E", now shows Doa Fausta Nepomuceno received
by virtue thereof the ownership and possession of a considerable amount of real and personal
estate. By virtue also of the said project of partition, she received the use and possession of all
the real and personal properties mentioned and referred to in Clause 7th of the will. The order
approving the project of partition (Exh. "C"), however, expressly provided that approval thereof
was "sin perjuicio de lo dispuesto en la clausula 8.o del testamento de Nicolas Villaflor." .
On May 1, 1956, Doa Fausta Nepomuceno died without having contracted a second marriage,
and without having begotten any child with the deceased Nicolas Villaflor. Her estate is now
being settled in Special Proceeding No. Q-1563 in the lower court, with the defendant Delfin N.
Juico as the duly appointed and qualified judicial administrator.
The plaintiff Leonor Villaflor Vda. de Villanueva is admitted to be the same Leonor Villaflor
mentioned by Don Nicolas Villaflor in his will as his "sobrina nieta Leonor Villaflor".
Plaintiff Leonor Villaflor instituted the present action against the administrator of the estate of
the widow Fausta Nepomuceno, on February 8, 1958, contending that upon the widow's death,
said plaintiff became vested with the ownership of the real and personal properties bequeathed
by the late Nicolas Villaflor to clause 7 of his will, pursuant to its eight (8th) clause. Defendant's
position, adopted by the trial court, is that the title to the properties aforesaid became absolutely
vested in the widow upon her death, on account of the fact that she never remarried.
We agree with appellant that the plain desire and intent of the testator, as manifested in clause 8
of his testament, was to invest his widow with only a usufruct or life tenure in the properties
described in the seventh clause, subject to the further condition (admitted by the appellee) that
if the widow remarried, her rights would thereupon cease, even during her own lifetime. That
the widow was meant to have no more than a life interest in those properties, even if she did
not remarry at all, is evident from the expressions used by the deceased "uso y posesion mientras
viva" (use and possession while alive) in which the first half of the phrase "uso y posesion" instead
of "dominio" or "propiedad") reinforces the second ("mientras viva"). The testator plainly did not
give his widow the full ownership of these particular properties, but only the right to their
possession and use (or enjoyment) during her lifetime. This is in contrast with the remainder of
the estate in which she was instituted universal heir together with the testator's brother (clause
6). 1wph1.t
SEXTO: En virtud de las facultades que me conceden las leyes, instituyo por mis
unicos y universales herederos de todos mis derechos y acciones a mi hermano D.
Fausto Villaflor y a mi esposa Da. Fausta Nepomuceno para que parten todos mis bienes

que me pertenescan, en iguales partes, para despues de mi muerte, exceptuando las

donaciones y legados que, abajo mi mas expontanea voluntad, lo hago en la forma
siguiente.
The court below, in holding that the appellant Leonor Villaflor, as reversionary legatee, could
succeed to the properties bequeathed by clause 7 of the testament only in the event that the
widow remarried, has unwarrantedly discarded the expression "mientras viva," and considered
the words "uso y posesion" as equivalent to "dominio" (ownership). In so doing, the trial court
violated Article 791 of the Civil Code of the Philippines, as well as section 59 of Rule 123 of the
Rules of Court.
ART. 791. The words of a will are to receive an interpretation which will give to every
expression some effect, rather than one which will render any of the expressions
inoperative; and of two modes of interpreting a will, that one is to be preferred which
will prevent intestacy." .
SEC. 59. Instrument construed so as to give effect to all provisions. In the construction of
an instrument where there are several provisions or particulars, such a construction is, if
possible, to be adopted as will give effect to all." .
Speculation as to the motives of the testator in imposing the conditions contained in clause 7 of
his testament should not be allowed to obscure the clear and unambiguous meaning of his plain
words, which are over the primary source in ascertaining his intent. It is well to note that if the
testator had intended to impose as sole condition the non-remarriage of his widow, the words
"uso y posesion mientras viva" would have been unnecessary, since the widow could only
remarry during her own lifetime.
The Civil Code, in Article 790, p. 1 (Article 675 of the Code of 1889), expressly enjoins the
following: .
ART. 790. The words of a will are to be taken in their ordinary and grammatical sense,
unless a clear intention to use them in another sense can be gathered, and that other can
be ascertained." .
Technical words in a will are to be taken in their technical sense, unless the context
clearly indicates a contrary intention, or unless it satisfactorily appears that the will was
drawn solely by the testator, and that he was unacquainted with such technical sense.
(675a)
In consonance with this rule, this Supreme Court has laid the doctrine in In re Estate of
Calderon, 26 Phil., 233, that the intention and wishes of the testator, when clearly expressed in
his will, constitute the fixed law of interpretation, and all questions raised at the trial, relative to
its execution and fulfillment, must be settled in accordance therewith, following the plain and
literal meaning of the testator's words, unless it clearly appears that his intention was otherwise.
The same rule is adopted by the Supreme Court of Spain (TS. Sent. 20 Marzo 1918; 28 Mayo
1918; 30 Abril 1913; 16 Enero 1915; 23 Oct. 1925).

La voluntad del testador, clara, precisa y constantemente expresada al ordenar su ultimo

voluntad, es ley unica, imperativa y obligatoria que han de obedecer y cumplir
fieldmente albaceas, legatarios y heredera, hoy sus sucesores, sin que esa voluntad
patente, que no ha menester de interpretaciones, pues no ofrece la menor duda, pueda
sustituirse, pues no ofrece la menor duda, pueda sustituirse por ningun otro criterio de
alguna de los interesados, ni tampoco por el judicial. (Tribunal Supremo of Spain, Sent.
20 March 1918) .
The American decisions invoked by appellee in his brief inapplicable, because they involve
cases where the only condition imposed on the legatee was that she should remain a widow. As
already shown, the testament of Don Nicolas Villaflor clearly and unmistakably provided that
his widow should have the possession and use of the legacies while alive and did not remarry.
It necessarily follows that by the express provisions of the 8th clause of his will, the legacies
should pass to the testator's "sobrinanieta", appellant herein, upon the widow's death, even if
the widow never remarried in her lifetime. Consequently, the widow had no right to retain or
dispose of the aforesaid properties, and her estate is accountable to the reversionary legatee for
their return, unless they had been lost due to fortuitous event, or for their value should rights of
innocent third parties have intervened.
PREMISES CONSIDERED, the decision appealed from is reversed, and the appellant Leonor
Villaflor Vda. de VILLANUEVA is declared entitled to the ownership and fruits of the
properties described in clause 7 of the will or testament, from the date of the death of Doa
Fausta Nepomuceno. The records are ordered remanded to the court of origin for liquidation,
accounting and further proceedings conformably to this decision. Costs against the
Administrator-appellee.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Paredes, Dizon and De Leon, JJ., concur.
Labrador, J., took no part.