G.R. No. L-68053 May 7, 1990LAURA 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. FERNAN, C.J.:This
is a petition for review on certiorari seeking the reversal of: (a)
the decision of the Fourth Civil Cases Division of the Intermediate
Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626
entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al."
affirming the decision dated July 8, 1974 of the Court of First
Instance of Negros Occidental insofar as it ordered the petitioners
to pay jointly and severally the private respondents the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and
773-B of the cadastral survey of Murcia, Negros Occidental and
reversing the subject decision insofar as it awarded the sums of
P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages
and attorney's fees, respectively and (b) the resolution of said
appellate court dated May 30, 1984, denying the motion for
reconsideration of its decision.The real properties involved are
two parcels of land identified as Lot 773-A and Lot 773-B which
were originally known as Lot 773 of the cadastral survey of Murcia,
Negros Occidental. Lot 773, with an area of 156,549 square meters,
was 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 (Exh.
A).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. 1 It is
not clear why the latter is not included as a party in this
case.Aniceto left his children Lots 773 and 823. Teodora cultivated
only three hectares of Lot 823 as she could not attend to the other
portions of the two lots which had a total area of around
twenty-four hectares. The record does not show whether the children
of Felipe also cultivated some portions of the lots but it is
established that Rufino and his children left the province to
settle in other places as a result of the outbreak of World War II.
According to Estelita, from the "Japanese time up to peace time",
they did not visit the parcels of land in question but "after
liberation", when her brother went there to get their share of the
sugar produced therein, he was informed that Fortunato Santiago,
Fuentebella (Puentevella) and Alvarez were in possession of Lot
773. 2It is on record that on May 19, 1938, Fortunato D. Santiago
was issued Transfer Certificate of Title No. RF 2694 (29797)
covering Lot 773-A with an area of 37,818 square meters. 3 TCT No.
RF 2694 describes Lot 773-A as a portion of Lot 773 of the
cadastral survey of Murcia and as originally registered under OCT
No. 8804.The bigger portion of Lot 773 with an area of 118,831
square meters was also registered in the name of Fortunato D.
Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ). 4
Said transfer certificate of title also contains a certification to
the effect that Lot 773-B was originally registered under OCT No.
8804.On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico
B. Fuentebella, Jr. in consideration of the sum of P7,000.00. 5
Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292
were issued in Fuentebella's name. 6After Fuentebella's death and
during the settlement of his estate, the administratrix thereof
(Arsenia R. Vda. de Fuentebella, his wife) filed in Special
Proceedings No. 4373 in the Court of First Instance of Negros
Occidental, a motion requesting authority to sell Lots 773-A and
773-B. 7 By virtue of a court order granting said motion, 8 on
March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for
P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT Nos.
T-23165 and T-23166 covering Lots 773-A and 773-B were respectively
issued to Rosendo Alvarez. 10Two 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. 11During the
pendency in court of said case or on November 13, 1961, Alvarez
sold Lots 773-A, 773-B and another lot for P25,000.00 to Dr.
Rodolfo Siason. 12 Accordingly, TCT Nos. 30919 and 30920 were
issued to Siason, 13 who thereafter, declared the two lots in his
name for assessment purposes. 14Meanwhile, on November 6, 1962,
Jesus Yanes, in his own behalf and in behalf of the other
plaintiffs, and assisted by their counsel, filed a manifestation in
Civil Case No. 5022 stating that the therein plaintiffs "renounce,
forfeit and quitclaims (sic) any claim, monetary or otherwise,
against the defendant Arsenia Vda. de Fuentebella in connection
with the above-entitled case." 15On October 11, 1963, a decision
was rendered by the Court of First Instance of Negros Occidental in
Civil Case No. 5022, the dispositive portion of which
reads:WHEREFORE, judgment is rendered, ordering the defendant
Rosendo Alvarez to reconvey to the plaintiffs lots Nos. 773 and 823
of the Cadastral Survey of Murcia, Negros Occidental, now covered
by Transfer Certificates of Title Nos. T-23165 and T-23166 in the
name of said defendant, and thereafter to deliver the possession of
said lots to the plaintiffs. No special pronouncement as to
costs.SO ORDERED. 16It will be noted that the above-mentioned
manifestation of Jesus Yanes was not mentioned in the aforesaid
decision.However, execution of said decision proved unsuccessful
with respect to Lot 773. In his return of service dated October 20,
1965, the sheriff stated that he discovered that Lot 773 had been
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." 17The execution of the decision in
Civil Case No. 5022 having met a hindrance, herein private
respondents (the Yaneses) filed on July 31, 1965, in the Court of
First Instance of Negros Occidental a petition for the issuance of
a new certificate of title and for a declaration of nullity of TCT
Nos. T-23165 and T-23166 issued to Rosendo Alvarez. 18 Thereafter,
the court required Rodolfo Siason to produce the certificates of
title covering Lots 773 and 823.Expectedly, Siason filed a
manifestation stating that he purchased Lots 773-A, 773-B and 658,
not Lots 773 and 823, "in good faith and for a valuable
consideration without any knowledge of any lien or encumbrances
against said properties"; that the decision in the cadastral
proceeding 19 could not be enforced against him as he was not a
party thereto; and that the decision in Civil Case No. 5022 could
neither be enforced against him not only because he was not a
party-litigant therein but also because it had long become final
and executory. 20 Finding said manifestation to be well-founded,
the cadastral court, in its order of September 4, 1965, nullified
its previous order requiring Siason to surrender the certificates
of title mentioned therein. 21In 1968, the Yaneses filed an
ex-parte motion for the issuance of an alias writ of execution in
Civil Case No. 5022. Siason opposed it. 22 In its order of
September 28, 1968 in Civil Case No. 5022, the lower court, noting
that the Yaneses had instituted another action for the recovery of
the land in question, ruled that at the judgment therein could not
be enforced against Siason as he was not a party in the case. 23The
action filed by the Yaneses on February 21, 1968 was for recovery
of real property with damages. 24 Named defendants therein were Dr.
Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and
the Register of Deeds of Negros Occidental. The Yaneses prayed for
the cancellation of TCT Nos. T-19291 and 19292 issued to Siason
(sic) for being null and void; the issuance of a new certificate of
title in the name of the Yaneses "in accordance with the sheriffs
return of service dated October 20, 1965;" Siason's delivery of
possession of Lot 773 to the Yaneses; and if, delivery thereof
could not be effected, or, if the issuance of a new title could not
be made, that the Alvarez and Siason jointly and severally pay the
Yaneses the sum of P45,000.00. They also prayed that Siason render
an accounting of the fruits of Lot 773 from November 13, 1961 until
the filing of the complaint; and that the defendants jointly and
severally pay the Yaneses moral damages of P20,000.00 and exemplary
damages of P10,000.00 plus attorney's fees of P4, 000.00. 25In his
answer to the complaint, Siason alleged that the validity of his
titles to Lots 773-A and 773-B, having been passed upon by the
court in its order of September 4, 1965, had become res judicata
and the Yaneses were estopped from questioning said order. 26 On
their part, the Alvarez stated in their answer that the Yaneses'
cause of action had been "barred by res judicata, statute of
limitation and estoppel." 27In its decision of July 8, 1974, the
lower court found that Rodolfo Siason, who purchased the properties
in question thru an agent as he was then in Mexico pursuing further
medical studies, was a buyer in good faith for a valuable
consideration. Although the Yaneses were negligent in their failure
to place a notice of lis pendens "before the Register of Deeds of
Negros Occidental in order to protect their rights over the
property in question" in Civil Case No. 5022, equity demanded that
they recover the actual value of the land because the sale thereof
executed between Alvarez and Siason was without court approval. 28
The dispositive portion of the decision states:IN VIEW OF THE
FOREGOING CONSIDERATION, judgment is hereby rendered in the
following manner: A. The case against the defendant Dr. Rodolfo
Siason and the Register of Deeds are (sic) hereby dismmissed,B. The
defendants, Laura, Flora and Raymundo, all surnamed Alvarez being
the legitimate children of the deceased Rosendo Alvarez are hereby
ordered to pay jointly and severally the plaintiffs the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and
773-B of Murcia Cadastre, Negros Occidental; the sum of P2,000.00
as actual damages suffered by the plaintiff; the sum of P5,000.00
representing moral damages and the sum of P2.000 as attorney's
fees, all with legal rate of interest from date of the filing of
this complaint up to final payment.C. The cross-claim filed by the
defendant Dr. Rodolfo Siason against the defendants, Laura, Flora
and Raymundo, all surnamed Alvarez is hereby dismissed.D.
Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are
hereby ordered to pay the costs of this suit.SO ORDERED. 29The
Alvarez appealed to the then Intermediate Appellate Court which in
its decision of August 31, 1983 30 affirmed the lower court's
decision "insofar as it ordered defendants-appellants to pay
jointly and severally the plaintiffs-appellees the sum of
P20,000.00 representing the actual value of Lots Nos. 773-A and
773-B of the cadastral survey of Murcia, Negros Occidental, and is
reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and
P2,000.00 as actual damages, moral damages and attorney's fees,
respectively." 31 The dispositive portion of said decision
reads:WHEREFORE, the decision appealed from is affirmed insofar as
it ordered defendants-appellants to pay jointly and severally the
plaintiffs- appellees the sum of P20,000.00 representing the actual
value of Lots Nos. 773-A and 773-B of the cadastral survey of
Murcia, Negros Occidental, and is reversed insofar as it awarded
the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages,
moral damages and attorney's fees, respectively. No costs.SO
ORDERED. 32Finding no cogent reason to grant appellants motion for
reconsideration, said appellate court denied the same.Hence, the
instant petition. ln their memorandum petitioners raised the
following issues:1. Whethere or not the defense of prescription and
estoppel had been timely and properly invoked and raised by the
petitioners in the lower court.2. Whether or not the cause and/or
causes of action of the private respondents, if ever there are any,
as alleged in their complaint dated February 21, 1968 which has
been docketed in the trial court as Civil Case No. 8474 supra, are
forever barred by statute of limitation and/or prescription of
action and estoppel.3. Whether or not the late Rosendo Alvarez, a
defendant in Civil Case No. 5022, supra and father of the
petitioners become a privy and/or party to the waiver (Exhibit
4-defendant Siason) in Civil Case No. 8474, supra where the private
respondents had unqualifiedly and absolutely waived, renounced and
quitclaimed all their alleged rights and interests, if ever there
is any, on Lots Nos. 773-A and 773-B of Murcia Cadastre as
appearing in their written manifestation dated November 6, 1962
(Exhibits "4" Siason) which had not been controverted or even
impliedly or indirectly denied by them.4. Whether or not the
liability or liabilities of Rosendo Alvarez arising from the sale
of Lots Nos. 773-A and 773-B of Murcia Cadastre to Dr. Rodolfo
Siason, if ever there is any, could be legally passed or
transmitted by operations (sic) of law to the petitioners without
violation of law and due process . 33The petition is devoid of
merit.As correctly ruled by the Court of Appeals, it is powerless
and for that matter so is the Supreme Court, to review the decision
in Civil Case No. 5022 ordering Alvarez to reconvey the lots in
dispute to herein private respondents. Said decision had long
become final and executory and with the possible exception of Dr.
Siason, who was not a party to said case, the decision in Civil
Case No. 5022 is the law of the case between the parties thereto.
It ended when Alvarez or his heirs failed to appeal the decision
against them. 34Thus, it is axiomatic that when a right or fact has
been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be
conclusive upon the parties and those in privity with them in law
or estate. 35 As consistently ruled by this Court, every litigation
must come to an end. Access to the court is guaranteed. But there
must be a limit to it. Once a litigant's right has been adjudicated
in a valid final judgment of a competent court, he should not be
granted an unbridled license to return for another try. The
prevailing party should not be harassed by subsequent suits. For,
if endless litigation were to be allowed, unscrupulous litigations
will multiply in number to the detriment of the administration of
justice. 36There is no dispute that the rights of the Yaneses to
the properties in question have been finally adjudicated in Civil
Case No. 5022. As found by the lower court, from the uncontroverted
evidence presented, the Yaneses have been illegally deprived of
ownership and possession of the lots in question. 37 In fact, Civil
Case No. 8474 now under review, arose from the failure to execute
Civil Case No. 5022, as subject lots can no longer be reconveyed to
private respondents Yaneses, the same having been sold during the
pendency of the case by the petitioners' father to Dr. Siason who
did not know about the controversy, there being no lis pendens
annotated on the titles. Hence, it was also settled beyond question
that Dr. Siason is a purchaser in good faith.Under the
circumstances, the trial court did not annul the sale executed by
Alvarez in favor of Dr. Siason on November 11, 1961 but in fact
sustained it. The trial court ordered the heirs of Rosendo Alvarez
who lost in Civil Case No. 5022 to pay the plaintiffs (private
respondents herein) the amount of P20,000.00 representing the
actual value of the subdivided lots in dispute. It did not order
defendant Siason to pay said amount. 38As to the propriety of the
present case, it has long been established that the sole remedy of
the landowner whose property has been wrongfully or erroneously
registered in another's name is to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has
passed into the hands of an innocent purchaser for value, for
damages. 39 "It is one thing to protect an innocent third party; it
is entirely a different matter and one devoid of justification if
deceit would be rewarded by allowing the perpetrator to enjoy the
fruits of his nefarious decided As clearly revealed by the
undeviating line of decisions coming from this Court, such an
undesirable eventuality is precisely sought to be guarded against."
40The issue on the right to the properties in litigation having
been finally adjudicated in Civil Case No. 5022 in favor of private
respondents, it cannot now be reopened in the instant case on the
pretext that the defenses of prescription and estoppel have not
been properly considered by the lower court. Petitioners could have
appealed in the former case but they did not. They have therefore
foreclosed their rights, if any, and they cannot now be heard to
complain in another case in order to defeat the enforcement of a
judgment which has longing become final and executory.Petitioners
further contend that the liability arising from the sale of Lots
No. 773-A and 773-B made by Rosendo Alvarez to Dr. Rodolfo Siason
should be the sole liability of the late Rosendo Alvarez or of his
estate, after his death.Such contention is untenable for it
overlooks the doctrine obtaining in this jurisdiction on the
general transmissibility of the rights and obligations of the
deceased to his legitimate children and heirs. Thus, the pertinent
provisions of the Civil Code state: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.Art. 776. The inheritance
includes all the property, rights and obligations of a person which
are not extinguished by his death.Art. 1311. Contract stake effect
only between the parties, their assigns and heirs except in case
where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of
law. The heir is not liable beyond the value of the property
received from the decedent.As explained by this Court through
Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs.
Luzon Surety Co., Inc. 41The 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 state 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
party's contractual rights and obligations are transmissible to the
successors.The rule is a consequence of the progressive
"depersonalization" of patrimonial rights and duties that, as
observed by Victorio Polacco has characterized the history of these
institutions. From the Roman concept of a relation from person to
person, the obligation has evolved into a relation from patrimony
to patrimony with the persons occupying only a representative
position, barring those rare cases where the obligation is strictly
personal, i.e., is contracted intuitu personae, in consideration of
its performance by a specific person and by no other.xxx xxx
xxxPetitioners 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. 42It must,
however, be made clear that petitioners are liable only to the
extent of the value of their inheritance. With this clarification
and considering petitioners' admission that there are other
properties left by the deceased which are sufficient to cover the
amount adjudged in favor of private respondents, we see no cogent
reason to disturb the findings and conclusions of the Court of
Appeals.WHEREFORE, subject to the clarification herein above
stated, the assailed decision of the Court of Appeals is hereby
AFFIRMED. Costs against petitioners.SO ORDERED. [G.R. No. L-8437.
November 28, 1956.]ESTATE OF K. H. HEMADY, deceased, vs. LUZON
SURETY CO., INC., claimant-Appellant. D E C I S I O NREYES, J. B.
L., J.:Appeal by Luzon Surety Co., Inc., from an order of the Court
of First Instance of Rizal, presided by Judge Hermogenes Caluag,
dismissing its claim against the Estate of K. H. Hemady (Special
Proceeding No. Q-293) for failure to state a cause of action.The
Luzon Surety Co. had filed a claim against the Estate based on
twenty different indemnity agreements, or counter bonds, each
subscribed by a distinct principal and by the deceased K. H.
Hemady, a surety solidary guarantor) in all of them, in
consideration of the Luzon Surety Co.s of having guaranteed, the
various principals in favor of different creditors. The twenty
counterbonds, or indemnity agreements, all contained the following
stipulations:chanroblesvirtuallawlibraryPremiums. As consideration
for this suretyship, the undersigned jointly and severally, agree
to pay the COMPANY the sum of ________________ (P______) pesos,
Philippines Currency, in advance as premium there of for every
__________ months or fractions thereof, this ________ or any
renewal or substitution thereof is in effect.Indemnity. The
undersigned, jointly and severally, agree at all times to indemnify
the COMPANY and keep it indemnified and hold and save it harmless
from and against any and all damages, losses, costs, stamps, taxes,
penalties, charges, and expenses of whatsoever kind and nature
which the COMPANY shall or may, at any time sustain or incur in
consequence of having become surety upon this bond or any
extension, renewal, substitution or alteration thereof made at the
instance of the undersigned or any of them or any order executed on
behalf of the undersigned or any of them; chan
roblesvirtualawlibraryand to pay, reimburse and make good to the
COMPANY, its successors and assigns, all sums and amount of money
which it or its representatives shall pay or cause to be paid, or
become liable to pay, on account of the undersigned or any of them,
of whatsoever kind and nature, including 15% of the amount involved
in the litigation or other matters growing out of or connected
therewith for counsel or attorneys fees, but in no case less than
P25. It is hereby further agreed that in case of extension or
renewal of this ________ we equally bind ourselves for the payment
thereof under the same terms and conditions as above mentioned
without the necessity of executing another indemnity agreement for
the purpose and that we hereby equally waive our right to be
notified of any renewal or extension of this ________ which may be
granted under this indemnity agreement.Interest on amount paid by
the Company. Any and all sums of money so paid by the company shall
bear interest at the rate of 12% per annum which interest, if not
paid, will be accummulated and added to the capital quarterly order
to earn the same interests as the capital and the total sum
thereof, the capital and interest, shall be paid to the COMPANY as
soon as the COMPANY shall have become liable therefore, whether it
shall have paid out such sums of money or any part thereof or not.x
x x x x x x x xWaiver. It is hereby agreed upon by and between the
undersigned that any question which may arise between them by
reason of this document and which has to be submitted for decision
to Courts of Justice shall be brought before the Court of competent
jurisdiction in the City of Manila, waiving for this purpose any
other venue. Our right to be notified of the acceptance and
approval of this indemnity agreement is hereby likewise waived.x x
x x x x x x xOur Liability Hereunder. It shall not be necessary for
the COMPANY to bring suit against the principal upon his default,
or to exhaust the property of the principal, but the liability
hereunder of the undersigned indemnitor shall be jointly and
severally, a primary one, the same as that of the principal, and
shall be exigible immediately upon the occurrence of such default.
(Rec. App. pp. 98- 102.)The Luzon Surety Co., prayed for allowance,
as a contingent claim, of the value of the twenty bonds it had
executed in consideration of the counterbonds, and further asked
for judgment for the unpaid premiums and documentary stamps affixed
to the bonds, with 12 per cent interest thereon.Before answer was
filed, and upon motion of the administratrix of Hemadys estate, the
lower court, by order of September 23, 1953, dismissed the claims
of Luzon Surety Co., on two grounds:chanroblesvirtuallawlibrary (1)
that the premiums due and cost of documentary stamps were not
contemplated under the indemnity agreements to be a part of the
undertaking of the guarantor (Hemady), since they were not
liabilities incurred after the execution of the counterbonds; chan
roblesvirtualawlibraryand (2) that whatever losses may occur after
Hemadys death, are not chargeable to his estate, because upon his
death he ceased to be guarantor.Taking up the latter point first,
since it is the one more far reaching in effects, the reasoning of
the court below ran as follows:chanroblesvirtuallawlibraryThe
administratrix further contends that upon the death of Hemady, his
liability as a guarantor terminated, and therefore, in the absence
of a showing that a loss or damage was suffered, the claim cannot
be considered contingent. This Court believes that there is merit
in this contention and finds support in Article 2046 of the new
Civil Code. It should be noted that a new requirement has been
added for a person to qualify as a guarantor, that
is:chanroblesvirtuallawlibrary integrity. As correctly pointed out
by the Administratrix, integrity is something purely personal and
is not transmissible. Upon the death of Hemady, his integrity was
not transmitted to his estate or successors. Whatever loss
therefore, may occur after Hemadys death, are not chargeable to his
estate because upon his death he ceased to be a guarantor.Another
clear and strong indication that the surety company has exclusively
relied on the personality, character, honesty and integrity of the
now deceased K. H. Hemady, was the fact that in the printed form of
the indemnity agreement there is a paragraph entitled Security by
way of first mortgage, which was expressly waived and renounced by
the security company. The security company has not demanded from K.
H. Hemady to comply with this requirement of giving security by way
of first mortgage. In the supporting papers of the claim presented
by Luzon Surety Company, no real property was mentioned in the list
of properties mortgaged which appears at the back of the indemnity
agreement. (Rec. App., pp. 407-408).We find this reasoning
untenable. Under the present Civil Code (Article 1311), as well as
under the Civil Code of 1889 (Article 1257), the rule is that
Contracts take effect only as between the parties, their assigns
and heirs, except in the case where the rights and obligations
arising from the contract are not transmissible by their nature, or
by stipulation or by provision of law.While in our successional
system the responsibility of the heirs for the debts of their
decedent cannot exceed the value of the inheritance they receive
from him, the principle remains intact that these heirs succeed not
only to the rights of the deceased but also to his obligations.
Articles 774 and 776 of the New Civil Code (and Articles 659 and
661 of the preceding one) expressly so provide, thereby confirming
Article 1311 already quoted.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.ART. 776. The inheritance includes all
the property, rights and obligations of a person which are not
extinguished by his death.In Mojica vs. Fernandez, 9 Phil. 403,
this Supreme Court ruled:chanroblesvirtuallawlibraryUnder the Civil
Code the heirs, by virtue of the rights of succession are
subrogated to all the rights and obligations of the deceased
(Article 661) and cannot be regarded as third parties with respect
to a contract to which the deceased was a party, touching the
estate of the deceased (Barrios vs. Dolor, 2 Phil. 44).x x x x x x
x x xThe principle on which these decisions rest is not affected by
the provisions of the new Code of Civil Procedure, and, in
accordance with that principle, the heirs of a deceased person
cannot be held to be third persons in relation to any contracts
touching the real estate of their decedent which comes in to their
hands by right of inheritance; chan roblesvirtualawlibrarythey take
such property subject to all the obligations resting thereon in the
hands of him from whom they derive their rights.(See also Galasinao
vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de Guzman vs. Salak,
91 Phil., 265).The binding effect of contracts upon the heirs of
the deceased party is not altered by the provision in 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 and 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. The
rule is a consequence of the progressive depersonalization of
patrimonial rights and duties that, as observed by Victorio
Polacco, has characterized the history of these institutions. From
the Roman concept of a relation from person to person, the
obligation has evolved into a relation from patrimony to patrimony,
with the persons occupying only a representative position, barring
those rare cases where the obligation is strictly personal, i.e.,
is contracted intuitu personae, in consideration of its performance
by a specific person and by no other. The transition is marked by
the disappearance of the imprisonment for debt.Of the three
exceptions fixed by Article 1311, the nature of the obligation of
the surety or guarantor does not warrant the conclusion that his
peculiar individual qualities are contemplated as a principal
inducement for the contract. What did the creditor Luzon Surety Co.
expect of K. H. Hemady when it accepted the latter as surety in the
counterbonds? Nothing but the reimbursement of the moneys that the
Luzon Surety Co. might have to disburse on account of the
obligations of the principal debtors. This reimbursement is a
payment of a sum of money, resulting from an obligation to give;
chan roblesvirtualawlibraryand to the Luzon Surety Co., it was
indifferent that the reimbursement should be made by Hemady himself
or by some one else in his behalf, so long as the money was paid to
it.The second exception of Article 1311, p. 1, is
intransmissibility by stipulation of the parties. Being exceptional
and contrary to the general rule, this intransmissibility should
not be easily implied, but must be expressly established, or at the
very least, clearly inferable from the provisions of the contract
itself, and the text of the agreements sued upon nowhere indicate
that they are non-transferable.(b) Intransmisibilidad por pacto. Lo
general es la transmisibilidad de darechos y obligaciones; chan
roblesvirtualawlibraryle excepcion, la intransmisibilidad. Mientras
nada se diga en contrario impera el principio de la transmision,
como elemento natural a toda relacion juridica, salvo las
personalisimas. Asi, para la no transmision, es menester el pacto
expreso, porque si no, lo convenido entre partes trasciende a sus
herederos.Siendo estos los continuadores de la personalidad del
causante, sobre ellos recaen los efectos de los vinculos juridicos
creados por sus antecesores, y para evitarlo, si asi se quiere, es
indespensable convension terminante en tal sentido.Por su esencia,
el derecho y la obligacion tienden a ir ms all de las personas que
les dieron vida, y a ejercer presion sobre los sucesores de esa
persona; chan roblesvirtualawlibrarycuando no se quiera esto, se
impone una estipulacion limitativa expresamente de la
transmisibilidad o de cuyos tirminos claramente se deduzca la
concresion del concreto a las mismas personas que lo otorgon.
(Scaevola, Codigo Civil, Tomo XX, p. 541-542) (Emphasis
supplied.)Because under the law (Article 1311), a person who enters
into a contract is deemed to have contracted for himself and his
heirs and assigns, it is unnecessary for him to expressly stipulate
to that effect; chan roblesvirtualawlibraryhence, his failure to do
so is no sign that he intended his bargain to terminate upon his
death. Similarly, that the Luzon Surety Co., did not require
bondsman Hemady to execute a mortgage indicates nothing more than
the companys faith and confidence in the financial stability of the
surety, but not that his obligation was strictly personal.The third
exception to the transmissibility of obligations under Article 1311
exists when they are not transmissible by operation of law. The
provision makes reference to those cases where the law expresses
that the rights or obligations are extinguished by death, as is the
case in legal support (Article 300), parental authority (Article
327), usufruct (Article 603), contracts for a piece of work
(Article 1726), partnership (Article 1830 and agency (Article
1919). By contract, the articles of the Civil Code that regulate
guaranty or suretyship (Articles 2047 to 2084) contain no provision
that the guaranty is extinguished upon the death of the guarantor
or the surety.The lower court sought to infer such a limitation
from Art. 2056, to the effect that one who is obliged to furnish a
guarantor must present a person who possesses integrity, capacity
to bind himself, and sufficient property to answer for the
obligation which he guarantees. It will be noted, however, that the
law requires these qualities to be present only at the time of the
perfection of the contract of guaranty. It is self-evident that
once the contract has become perfected and binding, the supervening
incapacity of the guarantor would not operate to exonerate him of
the eventual liability he has contracted; chan
roblesvirtualawlibraryand if that be true of his capacity to bind
himself, it should also be true of his integrity, which is a
quality mentioned in the article alongside the capacity.The
foregoing concept is confirmed by the next Article 2057, that runs
as follows:chanroblesvirtuallawlibraryART. 2057. If the guarantor
should be convicted in first instance of a crime involving
dishonesty or should become insolvent, the creditor may demand
another who has all the qualifications required in the preceding
article. The case is excepted where the creditor has required and
stipulated that a specified person should be guarantor.From this
article it should be immediately apparent that the supervening
dishonesty of the guarantor (that is to say, the disappearance of
his integrity after he has become bound) does not terminate the
contract but merely entitles the creditor to demand a replacement
of the guarantor. But the step remains optional in the
creditor:chanroblesvirtuallawlibrary it is his right, not his duty;
chan roblesvirtualawlibraryhe may waive it if he chooses, and hold
the guarantor to his bargain. Hence Article 2057 of the present
Civil Code is incompatible with the trial courts stand that the
requirement of integrity in the guarantor or surety makes the
latters undertaking strictly personal, so linked to his
individuality that the guaranty automatically terminates upon his
death.The contracts of suretyship entered into by K. H. Hemady in
favor of Luzon Surety Co. not being rendered intransmissible due to
the nature of the undertaking, nor by the stipulations of the
contracts themselves, nor by provision of law, his eventual
liability thereunder necessarily passed upon his death to his
heirs. The contracts, therefore, give rise to contingent claims
provable against his estate under section 5, Rule 87 (2 Moran, 1952
ed., p. 437; chan roblesvirtualawlibraryGaskell & Co. vs. Tan
Sit, 43 Phil. 810, 814).The most common example of the contigent
claim is that which arises when a person is bound as surety or
guarantor for a principal who is insolvent or dead. Under the
ordinary contract of suretyship the surety has no claim whatever
against his principal until he himself pays something by way of
satisfaction upon the obligation which is secured. When he does
this, there instantly arises in favor of the surety the right to
compel the principal to exonerate the surety. But until the surety
has contributed something to the payment of the debt, or has
performed the secured obligation in whole or in part, he has no
right of action against anybody no claim that could be reduced to
judgment. (May vs. Vann, 15 Pla., 553; chan
roblesvirtualawlibraryGibson vs. Mithell, 16 Pla., 519; chan
roblesvirtualawlibraryMaxey vs. Carter, 10 Yarg. [Tenn.], 521
Reeves vs. Pulliam, 7 Baxt. [Tenn.], 119; chan
roblesvirtualawlibraryErnst vs. Nou, 63 Wis., 134.)For Defendant
administratrix it is averred that the above doctrine refers to a
case where the surety files claims against the estate of the
principal debtor; chan roblesvirtualawlibraryand it is urged that
the rule does not apply to the case before us, where the late
Hemady was a surety, not a principal debtor. The argument evinces a
superficial view of the relations between parties. If under the
Gaskell ruling, the Luzon Surety Co., as guarantor, could file a
contingent claim against the estate of the principal debtors if the
latter should die, there is absolutely no reason why it could not
file such a claim against the estate of Hemady, since Hemady is a
solidary co-debtor of his principals. What the Luzon Surety Co. may
claim from the estate of a principal debtor it may equally claim
from the estate of Hemady, since, in view of the existing
solidarity, the latter does not even enjoy the benefit of
exhaustion of the assets of the principal debtor.The foregoing
ruling is of course without prejudice to the remedies of the
administratrix against the principal debtors under Articles 2071
and 2067 of the New Civil Code.Our conclusion is that the solidary
guarantors liability is not extinguished by his death, and that in
such event, the Luzon Surety Co., had the right to file against the
estate a contingent claim for reimbursement. It becomes unnecessary
now to discuss the estates liability for premiums and stamp taxes,
because irrespective of the solution to this question, the Luzon
Suretys claim did state a cause of action, and its dismissal was
erroneous.Wherefore, the order appealed from is reversed, and the
records are ordered remanded to the court of origin, with
instructions to proceed in accordance with law. Costs against the
Administratrix- Appellee. SO ORDERED. G.R. No. 149926 February 23,
2005UNION BANK OF THE PHILIPPINES, petitioner, vs.EDMUND SANTIBAEZ
and FLORENCE SANTIBAEZ ARIOLA, respondents.D E C I S I O NCALLEJO,
SR., J.:Before us is a petition for review on certiorari under Rule
45 of the Revised Rules of Court which seeks the reversal of the
Decision1 of the Court of Appeals dated May 30, 2001 in CA-G.R. CV
No. 48831 affirming the dismissal2 of the petitioners complaint in
Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati
City, Branch 63.The antecedent facts are as follows:On May 31,
1980, the First Countryside Credit Corporation (FCCC) and Efraim M.
Santibaez entered into a loan agreement3 in the amount of
P128,000.00. The amount was intended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural All-Purpose
Diesel Tractor. In view thereof, Efraim and his son, Edmund,
executed a promissory note in favor of the FCCC, the principal sum
payable in five equal annual amortizations of P43,745.96 due on May
31, 1981 and every May 31st thereafter up to May 31, 1985.On
December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of P123,156.00. It was intended
to pay the balance of the purchase price of another unit of Ford
6600 Agricultural All-Purpose Diesel Tractor, with accessories, and
one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and his
son, Edmund, executed a promissory note for the said amount in
favor of the FCCC. Aside from such promissory note, they also
signed a Continuing Guaranty Agreement5 for the loan dated December
13, 1980.Sometime in February 1981, Efraim died, leaving a
holographic will.6 Subsequently in March 1981, testate proceedings
commenced before the RTC of Iloilo City, Branch 7, docketed as
Special Proceedings No. 2706. On April 9, 1981, Edmund, as one of
the heirs, was appointed as the special administrator of the estate
of the decedent.7 During the pendency of the testate proceedings,
the surviving heirs, Edmund and his sister Florence Santibaez
Ariola, executed a Joint Agreement8 dated July 22, 1981, wherein
they agreed to divide between themselves and take possession of the
three (3) tractors; that is, two (2) tractors for Edmund and one
(1) tractor for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the
tractor respectively taken by them.On August 20, 1981, a Deed of
Assignment with Assumption of Liabilities9 was executed by and
between FCCC and Union Savings and Mortgage Bank, wherein the FCCC
as the assignor, among others, assigned all its assets and
liabilities to Union Savings and Mortgage Bank.Demand letters10 for
the settlement of his account were sent by petitioner Union Bank of
the Philippines (UBP) to Edmund, but the latter failed to heed the
same and refused to pay. Thus, on February 5, 1988, the petitioner
filed a Complaint11 for sum of money against the heirs of Efraim
Santibaez, Edmund and Florence, before the RTC of Makati City,
Branch 150, docketed as Civil Case No. 18909. Summonses were issued
against both, but the one intended for Edmund was not served since
he was in the United States and there was no information on his
address or the date of his return to the Philippines.12
Accordingly, the complaint was narrowed down to respondent Florence
S. Ariola.On December 7, 1988, respondent Florence S. Ariola filed
her Answer13 and alleged that the loan documents did not bind her
since she was not a party thereto. Considering that the joint
agreement signed by her and her brother Edmund was not approved by
the probate court, it was null and void; hence, she was not liable
to the petitioner under the joint agreement.On January 29, 1990,
the case was unloaded and re-raffled to the RTC of Makati City,
Branch 63.14 Consequently, trial on the merits ensued and a
decision was subsequently rendered by the court dismissing the
complaint for lack of merit. The decretal portion of the RTC
decision reads:WHEREFORE, judgment is hereby rendered DISMISSING
the complaint for lack of merit.15The trial court found that the
claim of the petitioner should have been filed with the probate
court before which the testate estate of the late Efraim Santibaez
was pending, as the sum of money being claimed was an obligation
incurred by the said decedent. The trial court also found that the
Joint Agreement apparently executed by his heirs, Edmund and
Florence, on July 22, 1981, was, in effect, a partition of the
estate of the decedent. However, the said agreement was void,
considering that it had not been approved by the probate court, and
that there can be no valid partition until after the will has been
probated. The trial court further declared that petitioner failed
to prove that it was the now defunct Union Savings and Mortgage
Bank to which the FCCC had assigned its assets and liabilities. The
court also agreed to the contention of respondent Florence S.
Ariola that the list of assets and liabilities of the FCCC assigned
to Union Savings and Mortgage Bank did not clearly refer to the
decedents account. Ruling that the joint agreement executed by the
heirs was null and void, the trial court held that the petitioners
cause of action against respondent Florence S. Ariola must
necessarily fail.The petitioner appealed from the RTC decision and
elevated its case to the Court of Appeals (CA), assigning the
following as errors of the trial court:1. THE COURT A QUO ERRED IN
FINDING THAT THE JOINT AGREEMENT (EXHIBIT A) SHOULD BE APPROVED BY
THE PROBATE COURT.2. THE COURT A QUO ERRED IN FINDING THAT THERE
CAN BE NO VALID PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS
BEEN PROBATED.3. THE COURT A QUO ERRED IN NOT FINDING THAT THE
DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN
THE ESTATE PROCEEDING.16The petitioner asserted before the CA that
the obligation of the deceased had passed to his legitimate
children and heirs, in this case, Edmund and Florence; the
unconditional signing of the joint agreement marked as Exhibit "A"
estopped respondent Florence S. Ariola, and that she cannot deny
her liability under the said document; as the agreement had been
signed by both heirs in their personal capacity, it was no longer
necessary to present the same before the probate court for
approval; the property partitioned in the agreement was not one of
those enumerated in the holographic will made by the deceased; and
the active participation of the heirs, particularly respondent
Florence S. Ariola, in the present ordinary civil action was
tantamount to a waiver to re-litigate the claim in the estate
proceedings.On the other hand, respondent Florence S. Ariola
maintained that the money claim of the petitioner should have been
presented before the probate court.17The appellate court found that
the appeal was not meritorious and held that the petitioner should
have filed its claim with the probate court as provided under
Sections 1 and 5, Rule 86 of the Rules of Court. It further held
that the partition made in the agreement was null and void, since
no valid partition may be had until after the will has been
probated. According to the CA, page 2, paragraph (e) of the
holographic will covered the subject properties (tractors) in
generic terms when the deceased referred to them as "all other
properties." Moreover, the active participation of respondent
Florence S. Ariola in the case did not amount to a waiver. Thus,
the CA affirmed the RTC decision, viz.:WHEREFORE, premises
considered, the appealed Decision of the Regional Trial Court of
Makati City, Branch 63, is hereby AFFIRMED in toto.SO ORDERED.18In
the present recourse, the petitioner ascribes the following errors
to the CA:I.THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT
THE JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.II.THE
COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ UNTIL AFTER
THE WILL HAS BEEN PROBATED.III.THE COURT OF APPEALS ERRED IN NOT
FINDING THAT THE RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM
RE-LITIGATED IN THE ESTATE PROCEEDING.IV.RESPONDENTS CAN, IN FACT,
BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE
LATE EFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY
AGREEMENT EXECUTED IN FAVOR OF PETITIONER-APPELLANT UNION
BANK.V.THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF
P128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF P123,000.00
CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND
THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM
SANTIBAEZ IN FAVOR OF PETITIONER UNION BANK.19The petitioner claims
that the obligations of the deceased were transmitted to the heirs
as provided in Article 774 of the Civil Code; there was thus no
need for the probate court to approve the joint agreement where the
heirs partitioned the tractors owned by the deceased and assumed
the obligations related thereto. Since respondent Florence S.
Ariola signed the joint agreement without any condition, she is now
estopped from asserting any position contrary thereto. The
petitioner also points out that the holographic will of the
deceased did not include nor mention any of the tractors subject of
the complaint, and, as such was beyond the ambit of the said will.
The active participation and resistance of respondent Florence S.
Ariola in the ordinary civil action against the petitioners claim
amounts to a waiver of the right to have the claim presented in the
probate proceedings, and to allow any one of the heirs who executed
the joint agreement to escape liability to pay the value of the
tractors under consideration would be equivalent to allowing the
said heirs to enrich themselves to the damage and prejudice of the
petitioner.The petitioner, likewise, avers that the decisions of
both the trial and appellate courts failed to consider the fact
that respondent Florence S. Ariola and her brother Edmund executed
loan documents, all establishing the vinculum juris or the legal
bond between the late Efraim Santibaez and his heirs to be in the
nature of a solidary obligation. Furthermore, the Promissory Notes
dated May 31, 1980 and December 13, 1980 executed by the late
Efraim Santibaez, together with his heirs, Edmund and respondent
Florence, made the obligation solidary as far as the said heirs are
concerned. The petitioner also proffers that, considering the
express provisions of the continuing guaranty agreement and the
promissory notes executed by the named respondents, the latter must
be held liable jointly and severally liable thereon. Thus, there
was no need for the petitioner to file its money claim before the
probate court. Finally, the petitioner stresses that both surviving
heirs are being sued in their respective personal capacities, not
as heirs of the deceased.In her comment to the petition, respondent
Florence S. Ariola maintains that the petitioner is trying to
recover a sum of money from the deceased Efraim Santibaez; thus the
claim should have been filed with the probate court. She points out
that at the time of the execution of the joint agreement there was
already an existing probate proceedings of which the petitioner
knew about. However, to avoid a claim in the probate court which
might delay payment of the obligation, the petitioner opted to
require them to execute the said agreement.1a\^/phi1.netAccording
to the respondent, the trial court and the CA did not err in
declaring that the agreement was null and void. She asserts that
even if the agreement was voluntarily executed by her and her
brother Edmund, it should still have been subjected to the approval
of the court as it may prejudice the estate, the heirs or third
parties. Furthermore, she had not waived any rights, as she even
stated in her answer in the court a quo that the claim should be
filed with the probate court. Thus, the petitioner could not invoke
or claim that she is in estoppel.Respondent Florence S. Ariola
further asserts that she had not signed any continuing guaranty
agreement, nor was there any document presented as evidence to show
that she had caused herself to be bound by the obligation of her
late father.The petition is bereft of merit.The Court is posed to
resolve the following issues: a) whether or not the partition in
the Agreement executed by the heirs is valid; b) whether or not the
heirs assumption of the indebtedness of the deceased is valid; and
c) whether the petitioner can hold the heirs liable on the
obligation of the deceased.1awphi1.ntAt the outset, well-settled is
the rule that a probate court has the jurisdiction to determine all
the properties of the deceased, to determine whether they should or
should not be included in the inventory or list of properties to be
administered.20 The said court is primarily concerned with the
administration, liquidation and distribution of the estate.21In our
jurisdiction, the rule is that there can be no valid partition
among the heirs until after the will has been probated:In testate
succession, there can be no valid partition among the heirs until
after the will has been probated. The law enjoins the probate of a
will and the public requires it, because unless a will is probated
and notice thereof given to the whole world, the right of a person
to dispose of his property by will may be rendered nugatory. The
authentication of a will decides no other question than such as
touch upon the capacity of the testator and the compliance with
those requirements or solemnities which the law prescribes for the
validity of a will.22This, of course, presupposes that the
properties to be partitioned are the same properties embraced in
the will.23 In the present case, the deceased, Efraim Santibaez,
left a holographic will24 which contained, inter alia, the
provision which reads as follows:(e) All other properties, real or
personal, which I own and may be discovered later after my demise,
shall be distributed in the proportion indicated in the immediately
preceding paragraph in favor of Edmund and Florence, my children.We
agree with the appellate court that the above-quoted is an
all-encompassing provision embracing all the properties left by the
decedent which might have escaped his mind at that time he was
making his will, and other properties he may acquire thereafter.
Included therein are the three (3) subject tractors. This being so,
any partition involving the said tractors among the heirs is not
valid. The joint agreement25 executed by Edmund and Florence,
partitioning the tractors among themselves, is invalid, specially
so since at the time of its execution, there was already a pending
proceeding for the probate of their late fathers holographic will
covering the said tractors.It must be stressed that the probate
proceeding had already acquired jurisdiction over all the
properties of the deceased, including the three (3) tractors. To
dispose of them in any way without the probate courts approval is
tantamount to divesting it with jurisdiction which the Court cannot
allow.26 Every act intended to put an end to indivision among
co-heirs and legatees or devisees is deemed to be a partition,
although it should purport to be a sale, an exchange, a compromise,
or any other transaction.27 Thus, in executing any joint agreement
which appears to be in the nature of an extra-judicial partition,
as in the case at bar, court approval is imperative, and the heirs
cannot just divest the court of its jurisdiction over that part of
the estate. Moreover, it is within the jurisdiction of the probate
court to determine the identity of the heirs of the decedent.28 In
the instant case, there is no showing that the signatories in the
joint agreement were the only heirs of the decedent. When it was
executed, the probate of the will was still pending before the
court and the latter had yet to determine who the heirs of the
decedent were. Thus, for Edmund and respondent Florence S. Ariola
to adjudicate unto themselves the three (3) tractors was a
premature act, and prejudicial to the other possible heirs and
creditors who may have a valid claim against the estate of the
deceased.The question that now comes to fore is whether the heirs
assumption of the indebtedness of the decedent is binding. We rule
in the negative. Perusing the joint agreement, it provides that the
heirs as parties thereto "have agreed to divide between themselves
and take possession and use the above-described chattel and each of
them to assume the indebtedness corresponding to the chattel taken
as herein after stated which is in favor of First Countryside
Credit Corp."29 The assumption of liability was conditioned upon
the happening of an event, that is, that each heir shall take
possession and use of their respective share under the agreement.
It was made dependent on the validity of the partition, and that
they were to assume the indebtedness corresponding to the chattel
that they were each to receive. The partition being invalid as
earlier discussed, the heirs in effect did not receive any such
tractor. It follows then that the assumption of liability cannot be
given any force and effect.The Court notes that the loan was
contracted by the decedent.l^vvphi1.net The petitioner, purportedly
a creditor of the late Efraim Santibaez, should have thus filed its
money claim with the probate court in accordance with Section 5,
Rule 86 of the Revised Rules of Court, which provides:Section 5.
Claims which must be filed under the notice. If not filed barred;
exceptions. All claims for money against the decedent, arising from
contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses for the last sickness
of the decedent, and judgment for money against the decedent, must
be filed within the time limited in the notice; otherwise they are
barred forever, except that they may be set forth as counterclaims
in any action that the executor or administrator may bring against
the claimants. Where an executor or administrator commences an
action, or prosecutes an action already commenced by the deceased
in his lifetime, the debtor may set forth by answer the claims he
has against the decedent, instead of presenting them independently
to the court as herein provided, and mutual claims may be set off
against each other in such action; and if final judgment is
rendered in favor of the defendant, the amount so determined shall
be considered the true balance against the estate, as though the
claim had been presented directly before the court in the
administration proceedings. Claims not yet due, or contingent, may
be approved at their present value.The filing of a money claim
against the decedents estate in the probate court is mandatory.30
As we held in the vintage case of Py Eng Chong v. Herrera:31 This
requirement is for the purpose of protecting the estate of the
deceased by informing the executor or administrator of the claims
against it, thus enabling him to examine each claim and to
determine whether it is a proper one which should be allowed. The
plain and obvious design of the rule is the speedy settlement of
the affairs of the deceased and the early delivery of the property
to the distributees, legatees, or heirs. `The law strictly requires
the prompt presentation and disposition of the claims against the
decedent's estate in order to settle the affairs of the estate as
soon as possible, pay off its debts and distribute the
residue.32Perusing the records of the case, nothing therein could
hold private respondent Florence S. Ariola accountable for any
liability incurred by her late father. The documentary evidence
presented, particularly the promissory notes and the continuing
guaranty agreement, were executed and signed only by the late
Efraim Santibaez and his son Edmund. As the petitioner failed to
file its money claim with the probate court, at most, it may only
go after Edmund as co-maker of the decedent under the said
promissory notes and continuing guaranty, of course, subject to any
defenses Edmund may have as against the petitioner. As the court
had not acquired jurisdiction over the person of Edmund, we find it
unnecessary to delve into the matter further.We agree with the
finding of the trial court that the petitioner had not sufficiently
shown that it is the successor-in-interest of the Union Savings and
Mortgage Bank to which the FCCC assigned its assets and
liabilities.33 The petitioner in its complaint alleged that "by
virtue of the Deed of Assignment dated August 20, 1981 executed by
and between First Countryside Credit Corporation and Union Bank of
the Philippines"34 However, the documentary evidence35 clearly
reflects that the parties in the deed of assignment with assumption
of liabilities were the FCCC, and the Union Savings and Mortgage
Bank, with the conformity of Bancom Philippine Holdings, Inc.
Nowhere can the petitioners participation therein as a party be
found. Furthermore, no documentary or testimonial evidence was
presented during trial to show that Union Savings and Mortgage Bank
is now, in fact, petitioner Union Bank of the Philippines. As the
trial court declared in its decision: [T]he court also finds merit
to the contention of defendant that plaintiff failed to prove or
did not present evidence to prove that Union Savings and Mortgage
Bank is now the Union Bank of the Philippines. Judicial notice does
not apply here. "The power to take judicial notice is to [be]
exercised by the courts with caution; care must be taken that the
requisite notoriety exists; and every reasonable doubt upon the
subject should be promptly resolved in the negative." (Republic vs.
Court of Appeals, 107 SCRA 504).36This being the case, the
petitioners personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the
trial court did not err in dismissing the complaint, and the CA in
affirming the same.IN LIGHT OF ALL THE FOREGOING, the petition is
hereby DENIED. The assailed Court of Appeals Decision is AFFIRMED.
No costs.SO ORDERED. G.R. No. L-4963 January 29, 1953MARIA USON,
plaintiff-appellee, vs.MARIA DEL ROSARIO, CONCEPCION NEBREDA,
CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr.,
defendants-appellants.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 co-defendants. 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. G.R. No. L-28040 August 18, 1972TESTATE 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, 1972TESTATE 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, 1972TASIANA 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, defendant-appellant.REYES, J.B.L., J.:pOf 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:A G R E E M E N TTHIS AGREEMENT
made and entered into by and betweenThe 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,A N
DThe 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.W I T N E S S E T HTHAT 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 Maronillawith 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 non-receipt
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 heredit