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LAURA

ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,


vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES,
ESTELITA YANES, ANTONIO YANES, ROSARIO YANES, and ILUMINADO
YANES, respondents.

FACTS: Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private
respondents, Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while the
other private respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was survived
by her child, Jovita (Jovito) Alib. The object of the controversy is two parcels of lands registered in
the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued
on October 9, 1917 by the Register of Deeds of Occidental Negros.One of the lots left by Aniceto
was later found in the possession of Fortunato Santiago, Fuentebella (Puentevella) and Alvarez
were in possession of Lot 773.Santiago sold the lots to Fuentebella and a new TCT was issued.After
Fuentebella died, his wife became the administrator.The widow Arsenia Vda. de Fuentebella sold
said lots for P6,000.00 to Rosendo Alvarez.A new TCT was also issued in favor of Rosendo Alvarez
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely,
Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint
against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of
Negros Occidental for the "return" of the ownership and possession of Lots 773 and 823. They also
prayed that an accounting of the produce of the land from 1944 up to the filing of the complaint be
made by the defendants, that after court approval of said accounting, the share or money
equivalent due the plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs
P500.00 as damages in the form of attorney's fees. The CFI ruled in favor of the Yaneses.However
the execution was problematic since the sheriff found out that Lot 773 was subdivided into Lots
773-A and 773-B; that they were "in the name" of Rodolfo Siason who had purchased them from
Alvarez, and that Lot 773 could not be delivered to the plaintiffs as Siason was "not a party per writ
of execution.
ISSUE: Whether or not the obligations of Rosendo Alvarez arising from the sale of Lots Nos. 773-A
and 773-B could be legally passed or transmitted by operation of law to the heirs without violation
of law and due process.

RULING: YES. It is a settled doctrine in this jurisdiction that rights and obligations of the deceased
are generally transmissible to his legitimate children and heirs. The binding effect of contracts upon
the heirs of the deceased party is not altered by the provision of our Rules of Court that money
debts of a deceased must be liquidated and paid from his estate before the residue is distributed
among said heirs (Rule 89). The reason is that whatever payment is thus made from the estate is
ultimately a payment by the heirs or distributees, since the amount of the paid claim in fact
diminishes or reduces the shares that the heirs would have been entitled to receive. "Under our
law, therefore, the general rule is that a partys contractual rights and obligations are transmissible
to the successors. Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the
legal consequences of their father's transaction, which gave rise to the present claim for damages.
That petitioners did not inherit the property involved herein is of no moment because by legal
fiction, the monetary equivalent thereof devolved into the mass of their father's hereditary estate,
and we have ruled that the hereditary assets are always liable in their totality for the payment of
the debts of the estate. CA decision affirmed.

BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO,


all surnamed, GEVERO,petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT
CORPORATION, respondents.

FACTS: Delcor acquired by purchase Lot 2476 containing an area of 20,119sqm. from the late Luis
Lancero on September 1964. Luis Lancer acquired the same from Ricardo Gevero as per deed of
sale executed by Gevero which was duly annotated at the back of OCT 7610 covering the mother
lot 2476 in the names of Teodorica Babangha - 1/2 share and her children: Maria; Restituto,
Elena, Ricardo, Eustaquio and Ursula, all surnamed surnamed Gevero, 1/2 undivided share of the
whole area containing 48,122 square meters.
Babangha died before WWII and was survived by her six children who executed an EJS and Partition
of her estate in 1966. Lot D was adjudicated to Ricardo. Delcor sought to quiet title and to annul the
partition made by the heirs proving that before purchasing 2476-A, it first checked and investigated
the title of Lancero and found the same to be in tact and unquestionable and claiming that he
bought the land in good faith and for value. The trial court declared Delcor true and absolute owner
of 2476-D. The heirs of Ricardo appealed to the IAC which affirmed the decision of the trial court.
Their MR was likewise denied, hence, the petition. They aver that the share of Babangha was not
included in the deed of sale as it was intended solely to Ricardos proportionate share out of the
undivided of the area and that the deed did not include the share of Ricardo, as inheritance from
Teodorica, because the deed did not recite that she was deceased at the the time it was executed.
ISSUE: WON Ricardo's share from Teodorica was excluded in the sale
RULING: The hereditary share in a decedents' estate is transmitted or vested immediately from the
moment of the death of the "causante" or predecessor in interest , and there is no legal bar to a
successor (with requisite contracting capacity) disposing of 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 Teodorica Babangha died long before World War II, hence, the rights to
the succession were transmitted from the moment of her death. It is therefore incorrect to state
that it was only in 1966, the date of extrajudicial partition, when Ricardo received his share in the
lot as inheritance from his mother Teodorica. Thus, when Ricardo sold his share over lot 2476 that
share which he inherited from Teodorica was also included unless expressly excluded in the deed of
sale.

MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN,


MATILDE L. CORDERO, SALVADOR B. LOCSIN and MANUEL V. DEL
ROSARIO, petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO JAUCIAN,
MERCEDES JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF
EDUARDO JAUCIAN and HEIRS OF VICENTE JAUCIAN, respondents.

FACTS: The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all
surnamed Locsin. After his death, his estate was divided among his three (3) children. Vast lands
went to his son Mariano, which Mariano brought into his marriage to Catalina Jaucian in 1908.
Catalina, for her part, brought into the marriage untitled properties which she had inherited from
her parents. These were augmented by other properties acquired by the spouses in the course of
their union, which however was not blessed with children.
The properties of Mariano and Catalina were brought under the Torrens System with those that
Mariano inherited from his father were surveyed registered in the name of "Mariano Locsin,
married to Catalina Jaucian.''
Mariano executed a Last Will and Testament instituting his wife, Catalina, as the sole and universal
heir of all his properties. The will was drawn up by his wife's nephew and trusted legal adviser,
Attorney Salvador Lorayes. Attorney Lorayes disclosed that the spouses being childless, they had
agreed that their properties, after both of them shall have died should revert to their respective
sides of the family. Don Mariano Locsin died of cancer. His will was probated without any
opposition from both sides of the family. As directed in his will, Doa Catalina was appointed
executrix of his estate. Her lawyer in the probate proceeding was Attorney Lorayes. In the inventory
of her husband's estate, Catalina declared "all items mentioned from Nos. 1 to 33 are the private
properties of the deceased and form part of his capital at the time of the marriage with the
surviving spouse, while items Nos. 34 to 42 are conjugal."
Doa Catalina was closest to her nephew, Attorney Salvador Lorayes, her nieces, Elena Jaucian,
Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the husbands of the last two: Hostilio
Cornelio and Fernando Velasco. Her trust in Hostilio Cornelio was such that she made him
custodian of all the titles of her properties; and before she disposed of any of them, she unfailingly
consulted her lawyer-nephew, Attorney Salvador Lorayes. It was Atty. Lorayes who prepared the
legal documents and, more often than not, the witnesses to the transactions were her niece Elena
Jaucian, Maria Lorayes-Cornelio, Maria Olbes- Velasco, or their husbands. Her niece, Elena Jaucian,
was her life-long companion in her house.
Nine (9) years after Marianos death, Doa Catalina began transferring, by sale, donation or
assignment, Don Mariano's as well as her own, properties to their respective nephews and nieces.
Four years before her death, she had made a will affirming and ratifying the transfers she had made
during her lifetime in favor of her husband's, and her own relatives. After the reading of her will, all
the relatives agreed that there was no need to submit it to the court for probate because the
properties devised to them under the will had already been conveyed to them by the deceased
when she was still alive, except some legacies which the executor of her will or estate, Attorney
Salvador Lorayes, proceeded to distribute.
Six (6) years after Doa Catalina's demise, some of her Jaucian nephews and nieces who had

already received their legacies and hereditary shares from her estate, filed action in the Regional
Trial Court of Legaspi City to recover the properties which she had conveyed to the Locsins during
her lifetime, alleging that the conveyances were inofficious, without consideration, and intended
solely to circumvent the laws on succession. Those who were closest to Doa Catalina did not join
the action. After the trial, judgment was rendered on July 8, l985 in favor of the Jaucians, and
against the Locsin defendants.
The Locsins appealed to the Court of Appeals which affirmed the trial court's decision.

ISSUE:

RULING: The trial court and the Court of Appeals erred in declaring the private respondents entitled
to inherit the properties which she had already disposed of more than ten (10) years before her
death. For those properties did not form part of her hereditary estate, i.e., "the property and
transmissible rights and obligations existing at the time of (the decedent's) death and those which
have accrued thereto since the opening of the succession." The rights to a person's succession are
transmitted from the moment of his death, and do not vest in his heirs until such time. Property
which Doa Catalina had transferred or conveyed to other persons during her lifetime no longer
formed part of her estate at the time of her death to which her heirs may lay claim. Had she died
intestate, only the property that remained in her estate at the time of her death devolved to her
legal heirs; and even if those transfers were, one and all, treated as donations, the right arising
under certain circumstances to impugn and compel the reduction or revocation of a decedent's
gifts inter vivos does not inure to the respondents since neither they nor the donees are
compulsory (or forced) heirs. There is thus no basis for assuming an intention on the part of Doa
Catalina, in transferring the properties she had received from her late husband to his nephews and
nieces, an intent to circumvent the law in violation of the private respondents' rights to her
succession. Said respondents are not her compulsory heirs, and it is not pretended that she had any
such, hence there were no legitimes that could conceivably be impaired by any transfer of her
property during her lifetime. All that the respondents had was an expectancy that in nowise
restricted her freedom to dispose of even her entire estate.
For as early as 1957, or twenty-eight (28) years before her death, Doa Catalina had already begun
transferring to her Locsin nephews and nieces the properties which she received from Don
Mariano. There is not the slightest suggestion in the record that Doa Catalina was mentally
incompetent when she made those dispositions. Indeed, how can any such suggestion be made in
light of the fact that even as she was transferring properties to the Locsins, she was also
contemporaneously disposing of her other properties in favor of the Jaucians?
Little significance, it seems, has been attached to the fact that among Doa Catalina's nephews and
nieces, those closest to her did not join the suit to annul and undo the dispositions of property
which she made in favor of the Locsins, although it would have been to their advantage to do so.
Their desistance persuasively demonstrates that Doa Catalina acted as a completely free agent
when she made the conveyances in favor of the petitioners. In fact, considering their closeness to
Doa Catalina it would have been well-nigh impossible for the petitioners to employ "fraud, undue
pressure, and subtle manipulations" on her to make her sell or donate her properties to them.
The decision dated March 14, 1989 of the Court of Appeals in CA-G.R. CV No. 11186 is REVERSED
and SET ASIDE.

EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE


OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE
WILLIAM TABANAO, JANETTE TABANAO DEPOSOY,
VICENTA MAY TABANAO VARELA, ROSELA TABANAO and
VINCENT TABANAO,respondents.
FACTS: Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a
business known as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to
dissolve their partnership and executed an agreement of partition and distribution of the
partnership properties among them, consequent to Jacinto Divinagracias withdrawal from the
partnership. Among the assets to be distributed were five (5) fishing boats, six (6) vehicles, two (2)
parcels of land, and cash deposits in the local branches of the BPI and Prudential Bank. Throughout
the existence of the partnership, and even after Vicente Tabanaos untimely demise in 1994,
Emnace failed to submit to Tabanaos heirs any statement of assets and liabilities of the partnership,
and to render an accounting of the partnerships finances. Petitioner also failed on his promise to
turn over to Tabanaos heirs the deceaseds 1/3 share in the total assets of the partnership, or the
sum of P10,000,000.00, despite formal demand for payment thereof. Tabanaos heirs filed against
petitioner an action for accounting, payment of shares, division of assets and damages.
Trial court held that the heirs of Tabanao had a right to sue in their own names, in view of the
provision of Article 777 of the Civil Code, which states that the rights to the succession are
transmitted from the moment of the death of the decedent.
ISSUE: Whether or not the surviving spouse of Vicente Tabanao has no legal capacity to sue since
she was never appointed as administratrix or executrix of his estate.
RULING: The surviving spouse does not need to be appointed as executrix or administratrix of the
estate before she can file the action. She and her children are complainants in their own right as
successors of Vicente Tabanao. From the very moment of Vicente Tabanaos death, his rights insofar
as the partnership was concerned were transmitted to his heirs, for rights to the succession are
transmitted from the moment of death of the decedent. Succession is a mode of acquisition by
virtue of which the property, rights and obligations to the extent of the value of the inheritance of a
person are transmitted. Moreover, respondents became owners of their respective hereditary
shares from the moment Vicente Tabanao died.
A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or
administratrix, is not necessary for any of the heirs to acquire legal capacity to sue. As successors
who stepped into the shoes of their decedent upon his death, they can commence any action
originally pertaining to the decedent. From the moment of his death, his rights as a partner and to
demand fulfillment of petitioners obligations as outlined in their dissolution agreement were
transmitted to respondents. They, therefore, had the capacity to sue and seek the courts
intervention to compel petitioner to fulfill his obligations.
Instant petition is denied.

NATALIA CARPENA OPULENCIA, petitioner, vs. COURT OF


APPEALS, ALADIN
SIMUNDAC and MIGUEL OLIVAN, respondents.

FACTS: Private respondents, Aladin Simundac and Miguel Oliven alleged that Natalia Carpena
Opulencia executed in their favor a "CONTRACT TO SELL" a parcel of land at P150.00 per square
meter; that plaintiffs paid a downpayment of P300,000.00 but defendant, despite demands, failed
to comply with her obligations under the contract. They therefore prayed for specific performance.
Petitioner admits the existence of a contract however refuses to perform her contractual obligation
because she had realized that the property subject of the contract formed part of the Estate of her
father Demetrio Carpena, in respect of which a petition for probate was filed with the Regional Trial
Court, Branch 24, Bian, Laguna; that at the time the contract was executed, the parties were aware
of the pendency of the probate proceeding; that the contract to sell was not approved by the
probate court; that realizing the nullity of the contract she had offered to return the downpayment
received from Simundac and Oliven, but the latter refused to accept it;
ISSUE: Whether or not the Contract to Sell executed by the petitioner and private respondents
without the requisite probate court approval is valid.
RULING: Petitioner entered into the Contract to Sell in her capacity as an heiress, not as an
executrix or administratrix of the estate. In the contract, she represented herself as the lawful
owner and seller of the subject parcel of land. Hereditary rights are vested in the heir or heirs from
the moment of the decedents death. Petitioner, therefore, became the owner of her hereditary
share the moment her father died. Thus, the lack of judicial approval does not invalidate the
Contract to Sell, because the petitioner has the substantive right to sell the whole or a part of her
share in the estate of her late father. Article 440 of the Civil Code provides that the possession of
hereditary property is deemed to be transmitted to the heir without interruption from the instant
of the death of the decedent, in case the inheritance be accepted. And Manresa with reason states
that upon the death of a person, each of his heirs becomes the undivided owner of the whole
estate left with respect to the part or portion which might be adjudicated to him, a community of
ownership being thus formed among the coowners of the estate while it remains undivided. where
some of the heirs, without the concurrence of the others, sold a property left by their deceased
father, said that the sale was valid, but that the effect thereof was limited to the share which may
be allotted to the vendors upon the partition of the estate.

S. RABADILLA,[1] petitioner, vs. COURT OF APPEALS AND


MARIA MARLENA[2] COSCOLUELLA Y BELLEZA
VILLACARLOS,respondents.
JOHNNY

FACTS: In a Codicil appended to the Last Will and Testament of the deceased Aleja Belleza, Dr.
Jorge Rabadilla, predecessor-in-interest of the herein petitioner, Johnny S. Rabadilla, was instituted
as a devisee of a big tract of land. The Codicil, was duly probated and contained in substance,
among others; that as a condition of the devise, Dr. Rabadilla shall have the obligation until he dies
to deliver (one hundred) 100 piculs of sugar (75 export sugar and 25 domestic sugar) to Maria
Marlinna Belleza, sister of the deceased; should Dr. Rabadilla die, his heir who shall inherit the
subject land shall also oblige to the annual delivery; that should the wish of the deceased be not
respected, Maria Marlinna Belleza shall immediately seize the subject lot and deliver the same to
the nearest descendant of the deceased who shall also have the same obligation to deliver the 100
sacks of sugar to Belleza.
Dr. Rabadilla died in 1983.
On 1989, Belleza brought a complaint against the heirs of Dr. Jorge Rabadilla, alleging violation of
the conditions of the Codicil, more specifically their failure to comply with their obligation to deliver
100 piculs of sugar to plaintiff Maria Marlena from sugar crop years 1985 up to the filing despite
repeated demands for compliance. She prayed that judgment be rendered ordering defendant-
heirs to reconvey / return the lot to the surviving heirs of the late Aleja Belleza.
Belleza and Alan Azurin, son-in-law of the herein petitioner who was lessee of the property and
acting as attorney-in-fact of defendant-heirs, arrived at an amicable settlement and entered into a
Memorandum of Agreement with respect to the annual delivery of the one hundred piculs of sugar.
However, there was no compliance with the aforesaid agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988 -1989.
ISSUE: Whether or not the subject property should revert back to the estate of the testatrix Aleja
Belleza as provided for in the codicil of her last will and testament.
RULING: YES. The private respondent had a legally demandable right against the petitioner
pursuant to subject Codicil.
It is a general rule under the law on succession that successional rights are transmitted from the
moment of death of the decedent 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. 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.

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.
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. Such construction
as will sustain and uphold the Will in all its parts must be adopted.
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.
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. 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.
Petition is dismissed.

BELINDA TAREDO, for herself and in representation of her brothers


and sisters, and TEOFILA CORPUZ TANEDO, representing her
minor daughter VERNA TANEDO, petitioners, vs. THE COURT OF
APPEALS, SPOUSES RICARDO M. TAREDO AND TERESITA
BARERA TAREDO, respondents.
FACTS: On 1962, Lazaro Tanedo executed a notarized deed of absolute sale in favor of his eldest
brother, Ricardo Tanedo, and the latters wife, Teresita Barera, private respondents herein, whereby
he conveyed to the latter in consideration of P1,500.00, one hectare of whatever share I shall have
over a property. That subject property being his future inheritance from his parents. Upon the
death of his father Matias, Lazaro executed an Affidavit of Conformity dated February 28, 1980 to
re-affirm, respect, acknowledge and validate the sale he made in 1962. On January 13, 1981, Lazaro
executed another notarized deed of sale in favor of private respondents covering his undivided ONE
TWELVE (1/12) of a parcel of land and acknowledged therein his receipt of P 10,000.00 as
consideration therefor. In February 1981, Ricardo learned that Lazaro sold the same property to his
children through a deed of sale dated December 29, 1980. On June 7, 1982, private respondents
recorded the Deed of Sale in their favor in the Registry of Deeds and the corresponding entry was
made in Transfer Certificate of Title No. 166451
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale
executed by Lazaro in favor of Ricardo (PRs) covering the property inherited by Lazaro from his
father.
Petitioners claimed that their father, Lazaro, executed an Absolute Deed of Sale dated December
29, 1980 conveying to his ten children his allotted portion under the extrajudicial partition executed
by the heirs of Matias, which deed included the land in litigation.
The trial court decided in favor of private respondents, holding that petitioners failed to adduce a
preponderance of evidence to support (their) claim. On appeal, the Court of Appeals affirmed the
decision of the trial court, ruling that the Deed of Sale dated January 13, 1981 was valid and that its
registration in good faith vested title in said respondents.
ISSUE: Is the sale of a future inheritance valid?
RULING: Pursuant to Article 1347 of the Civil Code, No contract may be entered into upon a future
inheritance except in cases expressly authorized by law. Consequently, said contract made in 1962
is not valid and cannot be the source of any right nor the creator of any obligation between the
parties. Hence, the affidavit of conformity dated February 28, 1980, insofar as it sought to validate
or ratify the 1962 sale, is also useless.
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. The property in question
is land, an immovable, and following the above-quoted law, ownership shall belong to the buyer
who in good faith registers it first in the registry of property. Thus, although the deed of sale in
favor of private respondents was later than the one in favor of petitioners, ownership would vest in
the former because of the undisputed fact of registration. On the other hand, petitioners have not
registered the sale to them at all.

SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS,


SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO
F. SANTOS, and TADEO F. SANTOS, Petitioners, vs.
SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.
FACTS: On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao
the subject property which is a part of her share in the estate of her deceased mother, Maria Catoc
(Maria), who died intestate on 1978. On the first occasion, Rita sold 100 square meters of her
inchoate share in her mothers estate through a document denominated as "Bilihan ng Lupa,"
dated 17 August 1979. Respondents Spouses Lumbao claimed the execution of the aforesaid
document was witnessed by petitioners Virgilio and Tadeo Santos, as shown by their signatures
affixed therein. On the second occasion, an additional seven square meters was added to the land
as evidenced by a document also denominated as "Bilihan ng Lupa," dated 9 January 1981.
After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof
and erected thereon a house which they have been occupying as exclusive owners up to the
present. As the exclusive owners, Spouses Lumbao made several verbal demands upon Rita, during
her lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents
to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as the
subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita
informed respondent Proserfina Lumbao she could not deliver the title to the subject property
because the entire property inherited by her and her co-heirs from Maria had not yet been
partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in
conspiracy with one another, executed a Deed of Extrajudicial Settlement, adjudicating and
partitioning among themselves and the other heirs, the estate left by Maria, which included the
subject property already sold to respondents Spouses Lumbao and now covered by TCT No. 81729
of the Registry of Deeds of Pasig City.
The Spouses Lumbao filed a Complaint for Reconveyance with Damages before the RTC of Pasig
City. Petitioners filed their Answer denying the allegations that the subject property had been sold
to the respondents Spouses Lumbao.
Respondents Spouses Lumbao, amended their Complaint because they discovered that on 16
February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage in
favor of Julieta S. Esplana
The lower court ruled in favor of the Santoses. The appellate court ruled otherwise, hence the
present petition.
RULING: The general rule that heirs are bound by contracts entered into by their predecessors-in-
interest applies in the present case. Article 1311 of the NCC is the basis of this rule. It is clear from
the said provision that whatever rights and obligations the decedent have over the property were
transmitted to the heirs by way of succession, a mode of acquiring the property, rights and
obligations of the decedent to the extent of the value of the inheritance of the heirs. Thus, the heirs
cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest
because they have inherited the property subject to the liability affecting their common ancestor.
Being heirs, there is privity of interest between them and their deceased mother. They only
succeed to what rights their mother had and what is valid and binding against her is also valid and

binding as against them. The death of a party does not excuse nonperformance of a contract which
involves a property right and the rights and obligations thereunder pass to the personal
representatives of the deceased. Similarly, nonperformance is not excused by the death of the
party when the other party has a property interest in the subject matter of the contract.
Despite the death of the petitioners mother, they are still bound to comply with the provisions of
the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they must reconvey
to herein respondents Spouses Lumbao the 107- square meter lot which they bought from Rita,
petitioners mother.

NATIONAL HOUSING AUTHORITY, petitioner, vs. SEGUNDA


ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO,
LAGUNA, BR. 31, respondents.
FACTS: On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera
several portions of land in San Pedro, Laguna. NHA became the successor agency of LTA which is
the petitioner in this case. Margarita Herrera had two children: Beatriz Herrera-Mercado (the
mother of private respondent Almeida) and Francisca Herrera. Beatriz Herrera-Mercado
predeceased her mother and left heirs.
Margarita Herrera passed away on October 27, 1971.
On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed
a Deed of Self-Adjudication claiming that she is the only remaining relative, being the sole surviving
daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita
Herrera based on a Sinumpaang Salaysay allegedly executed by Margarita. The surviving heirs of
Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-Adjudication. On December
29, 1980, a Decision was had declaring the deed null and void.
During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed
an application with the NHA to purchase the same lots submitting therewith a copy of the
"Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz
Herrera-Mercado, protested the application.
The NHA granted the application made by Francisca Herrera based on the aforementioned
Sinumpaang Salaysay.
Almeida appealed to the Office of the President but said office affirmed the NHA decision in a
Decision dated January 23, 1987.
On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her
estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.The NHA
executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in
their favor.Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave
the premises that she was occupying.
Private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor
of the heirs of Francisca invoking her her forty-year occupation of the disputed properties, and re-
raised the fact that Francisca Herrera's declaration of self- adjudication has been adjudged as a
nullity because the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged
that the complaint was barred by laches and that the decision of the Office of the President was
already final and executory.
The Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the
decision of the Office of the President. It declared the deeds of sale executed by NHA in favor of
Herrera's heirs null and void.
Court of Appeals affirmed the decision of the Regional Trial Court and ruled that the NHA acted
arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld the trial court ruling that
the "Sinumpaang Salaysay" was not an assignment of rights but one that involved disposition of
property which shall take effect upon death. The issue of whether it was a valid will must first be

determined by probate.
RULING: When the petitioner received the "Sinumpaang Salaysay," it should have noted that the
effectivity of the said document commences at the time of death of the author of the instrument;
in her words "sakaling ako'y bawian na ng Dios ng aking buhay..." Hence, in such period, all the
interests of the person should cease to be hers and shall be in the possession of her estate until
they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides that:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations
to the extent of the value of the inheritance, of a person are transmitted through his death to
another or others either by his will or by operation of law.
The NHA gave due course to the application made by Francisca Herrera without considering that
the initial applicant's death would transfer all her property, rights and obligations to the estate
including whatever interest she has or may have had over the disputed properties. To the extent of
the interest that the original owner had over the property, the same should go to her estate.
Margarita Herrera had an interest in the property and that interest should go to her estate upon
her demise so as to be able to properly distribute them later to her heirsin accordance with a will
or by operation of law.
The death of Margarita Herrera does not extinguish her interest over the property. Obligations are
transmissible. Margarita Herrera's obligation to pay became transmissible at the time of her death
either by will or by operation of law.
When the original buyer died, the NHA should have considered the estate of the decedent as the
next "person" likely to stand in to fulfill the obligation to pay the rest of the purchase price. The
opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard
as to the award of the lots. Further, the Decision in the said Civil Case questioning the Deed of Self-
Adjudication which rendered the deed therein null and void should have alerted the NHA that there
are other heirs to the interests and properties of the decedent who may claim the property after a
testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of
the lots.