[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 xx x xx 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
xx x xx 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:chanroblesvirtuallawlibraryintegrity. 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 xx x xx
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:chanroblesvirtuallawlibraryit 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.)ForDefendantadministratrix 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. 125888 August 13, 1998SPOUSES ERNESTO and EVELYN
SICAD,petitioners,vs.COURT OF APPEALS, CATALINO VALDERRAMA, JUDY
CRISTINA M. VALDERRAMA and JESUS ANTONIO
VALDERRAMA,respondents.NARVASA,C.J.:The issue raised in the appeal
bycertiorariat bar centers on the character of a deed of donation
executed by the late Aurora Virto DA. de Motinola of the City of
Iloilo as eitherinter vivosormortis causa. That deed, entitled
"DEED OF DONATION INTER VIVOS,"1was executed by Montinola on
December 11, 1979. It named as donees her grandchildren, namely:
Catalino Valderrama, Judy Cristina Valderrama and Jesus Antonio
Valderrama: and treated of a parcel of land, Lot 3231 of the
Cadastral Survey of Panay, located at Brgy. Pawa, Panay, Capiz,
covered by Transfer Certificate of Title No. T-16105 in the name of
Montinola. The deed also contained the signatures of the donees in
acknowledgment of their acceptance of the donation.Montinola's
Secretary, Gloria Salvilla, afterwards presented the deed for
recording in the Property Registry, and the Register of Deeds
cancelled TCT No. T-16105 (the donor's title) and, in its place,
issued TCT No. T-16622 on February 7, 1980, in the names of the
donees.2Montinola however retained the owner's duplicate copy of
the new title (No. T-16622), as well as the property itself, until
she transferred the same ten (10) years later, on July 10, 1990, to
the spouses, Ernesto and Evelyn Sicad.On March 12, 1987, Aurora
Montinola drew up a deed of revocation of the donation,3and caused
it to be annotated as an adverse claim on TCT No. T-16622 (issued,
as aforestated, in her grandchildren's names). Then, on August 24,
1990, she filed a petition with the Regional Trial Court in Roxas
City for the cancellation of said TCT No. T-16622 and the
reinstatement of TCT No. T- 16105 (in her name), the case being
docketed as Special Proceeding No. 3311. Her petition was founded
on the theory that the donation to her three (3) grandchildren was
onemortis causawhich thus had to comply with the formalities of a
will; and since it had not, the donation was void and could not
effectively serve as basis for the cancellation of TCT No. T-16105
and the issuance in its place of TCT No. T-16622.The donees
(Montinola's grandchildren) opposed the petition. In their
opposition dated August 29, 1990, they averred that the donation in
their favor was oneinter vivoswhich, having fully complied with the
requirements therefor set out in Article 729 of the Civil Code, was
perfectly valid and efficacious. They also expressed doubt about
the sincerity of their grandmother's intention to recover the
donated property, since she had not pursued the matter of its
revocation after having it annotated as an adverse claim.The case,
originally treated as a special proceeding, was subsequently
considered by the lower Court as an ordinary civil action in view
of the allegations and issues raised in the pleadings. Pre-trial
was had, followed by trial on the merits which was concluded with
the filing of the parties' memoranda. The Trial Court then rendered
judgment on March 27, 1991, holding that the donation was indeed
oneinter vivos, and dismissing Aurora Montinola's petition for lack
of merit.4The matter of its revocation was not passed
upon.Montinola elevated the case to the Court of Appeals, her
appeal being docketed as CA-G.R. CV No. 33202. She however died on
March 10, 1993,5while the appeal was pending.Shortly after
Montinola's demise, a "Manifestation and Motion" dated March 31,
1993 was filed by Ernesto Sicad and Evelyn Bofill-Sicad, herein
petitioners,6in which they (a) alleged that they had become the
owners of the property covered by TCT No. T-16622 in virtue of a
"deed of definite sale dated May 25, 1992" accomplished by
Montinola in their favor, which was confirmed by "an affidavit
dated November 26, 1997also executed by the latter, and (b) prayed
that they be substituted as appellants and allowed to prosecute the
case in their own behalf.Another motion was subsequently presented
under date of April 7, 1993, this time by the legal heirs of Aurora
Montinola, namely: Ofelia M. de Leon, Estela M. Jaen and Teresita
M. Valderama. They declared that they were not interested in
pursuing the case, and asked that the appeal be withdrawn.
Montinola's counsel opposed the motion.On June 21, 1993, the Court
of Appeals issued a Resolution: (a) ordering the substitution of
the persons above mentioned Ofelia de Leon, Estela M, Jaen, and
Teresita M. Valderama as plaintiffs-appellants in place of the late
Aurora Montinola, as well as the joinder of the spouses Ernesto and
Evelyn Bofill-Sicad as additional appellants;7and (b) denying the
motion for the withdrawal of the appeal.On June 30, 1995, the
Eighth Division of the Court of Appeals promulgated its Decision on
the case affirming the judgment of the Regional Trial Court;8and on
July 31, 1996, it denied the separate motions for reconsideration
filed by Ofelia M. de Leon, Estela M. Jaen, and Teresita M.
Valderrama, on the one hand, and by the spouses, Ernest and Evelyn
Sicad, on the other.9The Sicad Spouses have appealed to this Court;
and here, they contend that the following errors were committed by
the Appellate Tribunal, to wit:1) **in ruling that the donation
wasinter vivosand in not giving due weight to the revocation of the
donation; and2) **in not ordering that the case be remanded for
further reception of evidence.10The Comment filed for private
respondents (the donees) under date of December 19, 1996 deals with
what they consider the "principal issue in this case**(i.e.)
whether the donation ismortis causaorinter vivos," and sets forth
the argument that the "donor clearly intended to effect the
immediate transfer of ownership to the donees." that the
prohibition in the deed of donation "against selling the property
within ten (10) years after the death of the donor does not
indicate that the donation ismortis causa," that the donor's
"alleged act of physically keeping the title does not suggest any
intention to defer the effectivity of the donation," that the
"payment of real property taxes is consistent with the donor's'
reservation of the right of usufruct," that the donor's intent "is
not determined by**(her) self-serving post-execution declarations,"
the "donation was never effectively revoked," and petitioners "have
waived their right to question the proceedings in the trial
court."11The Reply of the Sicad Spouses dated March 14, 1997
reiterates their thesis that the donation wasmortis causa, that
"the provisions of the deed of donation indicate that it was
intended to take effect upon the death of the donor," that "the
circumstances surrounding the execution of the deed, and the
subsequent actions of the donor incontrovertibly signify the
donor's intent to transfer the property only after her death," that
the donor "did not intend to give effect to the donation," and that
the procedure adopted by the Trial Court in the case was fatally
defective.12A "Rejoinder" dated April 3, 1997 was then submitted by
the Valderramas, traversing the assertions of the
Reply.13Considering the focus of the opposing parties, and their
conflicting theories, on the intention of Aurora Montinola in
executing the document entitled "Deed of Donation Inter Vivos," it
is needful to review the circumstances of the signing of that
document by Montinola, as ostensible donor, and her grandchildren,
as ostensible donees.The evidence establishes that on December 11,
1979, when the deed of donation prepared by Montinola's lawyer
(Atty. Treas) was read and explained by the latter to the parties,
Montinola expressed her wish that the donation take effect only
after ten (10) years from her death, and that the deed include a
prohibition on the sale of the property for such period.
Accordingly, a new proviso was inserted in the deed reading:
"however, the donees shall not sell or encumber the properties
herein donated within 10 years after the death of the donor."14The
actuality of the subsequent insertion of this new proviso is
apparent on the face of the instrument: the intercalation is easily
perceived and identified it was clearly typed on a different
machine, and is crammed into the space between the penultimate
paragraph of the deed and that immediately preceding it.15Not only
did Aurora Montinola order the insertion in the deed of that
restrictive proviso, but also, after recordation of the deed of
donation, she never stopped treating the property as her own. She
continued, as explicity authorized in the deed itself, to possess
the property, enjoy its fruits and otherwise exercise the rights of
dominion, paying the property taxes as they fell due all these she
did until she transferred the Property to the Sicad Spouses on July
10, 1990. She did not give the new certificate of title to the
ostensible donees but retained it, too, until she delivered it to
the Sicads on the occasion of the sale of the property to them. In
any event, the delivery of the title to the donees would have
served no useful purpose since, as just stated, they were
prohibited to effect any sale or encumbrance thereof for a period
of ten (10) years after the ostensible donor's decease. And
consistent with these acts denoting retention of ownership of the
property was Montinola's openly expressed view that the donation
was ineffectual and could not be given effect even after ten (10)
years from her death. For this view she sought to obtain judicial
approval. She brought suit on August 24, 1990 to cancel TCT No.
T-16622 (issued to her grandchildren) premised precisely on the
invalidity of the donation for failure to comply with the
requisites of testamentary dispositions. Before that, she attempted
to undo the conveyance to her grandchildren by executing a deed of
revocation of the donation on March 12, 1987, and causing
annotation thereof as an adverse claim on said TCT No. T-16622. She
also exercised indisputable acts of ownership over said property by
executing, as just stated, deeds intended to pass title over it to
third parties petitioners herein.16As already intimated, the real
nature of a deed is to be ascertained by both its language and the
intention of the parties as demonstrated by the circumstances
attendant upon its execution. In this respect, case law has laid
down significant parameters. Thus, in a decision handed down in
1946,17this Court construed a deed purporting to be a donationinter
vivosto be in truth onemortis causabecause it stipulated (like the
one now being inquired into) "that all rents, proceeds, fruits, of
the donated properties shall remain for the exclusive benefit and
disposal of the donor, Margarita David, during her lifetime; and
that, without the knowledge and consent of the donor, the donated
properties could not be disposed of in any way, whether by sale,
mortgage, barter, or in any other way possible," On these essential
premises, the Court said, such a donation must be deemed one
"mortis causa, because the combined effect of the circumstances
surrounding the execution of the deed of donation and of the
above-quoted clauses thereof**(was that) the most essential
elements of ownership the right to dispose of the donated
properties and the right to enjoy the products, profits, possession
remained with Margarita David during her lifetime, and would accrue
to the donees only after Margarita David's death." So, too, in the
case at bar, did these rights remain with Aurora Montinola during
her lifetime, and could not pass to the donees until ten (10) years
after her death.In another case decided in 1954 involving a similar
issue,Bonsato v. Court of Appeals,18this Court emphasized that the
decisive characteristics of a donationmortis causa, which it had
taken into account inDavid v. Sison, were that "the donor not only
reserved for herself all the fruits of the property allegedly
conveyed, but what is even more important, specially provided that
"without the knowledge and consent of the donor, the donated
properties could not be disposed of in any way,; thereby denying to
the transferees the most essential attribute of ownership, the
power to dispose of the properties."A donation which purports to be
oneinter vivosbut withholds from the donee the right to dispose of
the donated property during the donor's lifetime is in truth
onemortis causa. In a donationmortis causa"the right of disposition
is not transferred to the donee while the donor is still
alive."19In the instant case, nothing of any consequence was
transferred by the deed of donation in question to Montinola's
grandchildren, the ostensible donees. They did not get possession
of the property donated. They did not acquire the right to the
fruits thereof, or any other right of dominion over the property.
More importantly, they did not acquire the right to dispose of the
property this would accrue to them only after ten (10) years from
Montinola's death. Indeed, they never even laid hands on the
certificate of title to the same. They were therefore simply "paper
owners" of the donated property. All these circumstances,
including, to repeat, the explicit provisions of the deed of
donation reserving the exercise of rights of ownership to the donee
and prohibiting the sale or encumbrance of the property until ten
(10) years after her death ineluctably lead to the conclusion that
the donation in question was a donationmortis causa, contemplating
a transfer of ownership to the donees only after the donor's
demise.The case ofAlejandro v. Geraldez20cited by the Court of
Appeals in support of its challenged judgment is not quite
relevant. For in the deed of donation there in issue, there was a
partial relinquishment of the right to dispose of the property, in
the event only that this became necessary "to defray the expenses
and support of the donors." That limited right to dispose of the
donated lots, said this Court, "implies that ownership had passed
to**(the donees) by means of the donation and**, therefore, the
donation was already effective during the donors' lifetime. That is
a characteristic of a donationinter vivos." On the other hand, in
the case at bar, the donees were expressly prohibited to make any
disposition of any nature or for any purpose whatever during the
donor's lifetime, and until ten (10) years after her death a
prohibition which, it may be added, makes inapplicable the ruling
inCastro v. Court of Appeals,21where no such prohibition was
imposed, and the donor retained only the usufruct over the
property.The Valderramas' argument that the donation isinter
vivosin character and that the prohibition against their
disposition of the donated property is merely a condition which, if
violated, would give cause for its revocation, begs the question.
It assumes that they have the right to make a disposition of the
property, which they do not. The argument also makes no sense,
because if they had the right to dispose of the property and did in
fact dispose of it to a third person, the revocation of the
donation they speak of would be of no utility or benefit to the
donor, since such a revocation would not necessarily result in the
restoration of the donor's ownership and enjoyment of the
property.It is also error to suppose that the donation under review
should be deemed oneinter vivossimply because founded on
considerations of love and affection. InAlejandro v.
Geraldez,supra,22this Court also observed that "the fact that the
donation is given in consideration of love and affection**is not a
characteristic of donationsinter vivos(solely) because
transfersmortis causamay also be made for the same reason."
Similarly, inBonsato v. Court of Appeals,supra, this Court opined
that the fact "that the conveyance was due to the affection of the
donor for the donees and the services rendered by the latter, is of
no particular significance in determining whether the deeds, Exhs.
"1" and "2," constitute transfersinter vivosor not, because a
legacy may have identical motivation."23Finally, it is germane to
advert to the legal principle in Article 1378 of the Civil Code to
the effect that in case of doubt relative to a gratuitous contract,
the construction must be that entailing "the least transmission of
rights andinterests,"24The donation in question, though
denominatedinter vivos, is in truth onemortis causa; it is void
because the essential requisites for its validity have not been
complied with.WHEREFORE, the Decision of the Court of Appeals in
CA-G.R. CV No. 33202 dated June 30, 1995 as well as the Resolution
denying reconsideration thereof, and the Decision of the Regional
Trial Court in Special Case No. 3311 are SET ASIDE. TheDeed of
Donation Inter Vivos(Exh. "A") executed by Aurora Virto Vda. de
Montinola on December 11, 1979 in favor of Catalino M. Valderrama,
Judy Cristina M. Valderrama and Jesus Antonio M. Valderrama is
declared null and void. The Register of Deeds of Roxas City is
directed to cancel Transfer Certificate of Title No. T-16622,
revive and reinstate Transfer Certificate of Title No. T-16105.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.Priscilo Evangelista for appellee.Brigido
G. Estrada for appellant.BAUTISTA ANGELO,J.:This is an action for
recovery of the ownership and possession of five (5) parcels of
land situated in the Municipality of Labrador, Province of
Pangasinan, filed by Maria Uson against Maria del Rosario and her
four children named Concepcion, Conrado, Dominador, and Faustino,
surnamed Nebreda, who are all of minor age, before the Court of
First Instance of Pangasinan.Maria Uson was the lawful wife of
Faustino Nebreda who upon his death in 1945 left the lands involved
in this litigation. Faustino Nebreda left no other heir except his
widow Maria Uson. However, plaintiff claims that when Faustino
Nebreda died in 1945, his common-law wife Maria del Rosario took
possession illegally of said lands thus depriving her of their
possession and enjoymentDefendants 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" (Ilustrevs.
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; Osoriovs. 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.L-28040Pelaez, Jalandoni & Jamir for
administrator-appellee.Quiogue & Quiogue for appellee Matilde
de Borja.Andres Matias for appellee Cayetano de Borja.Sevilla &
Aquino for appellant.L-28568Sevilla & Aquino for special
administratrix-appellee.Pelaez, Jalandoni & Jamir for
oppositor-appellant.L-28611Sevilla & Aquino for
plaintiff-appellee.Pelaez, Jalandoni & Jamir and David Gueverra
for 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,1from 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
1963,2by 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.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
willand 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, inGuevara 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 ofGuevara 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
suchcausanteor predecessor in interest (Civil Code of the
Philippines, Art. 777)3there 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.4Of 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 995et
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 ofres 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
wasintendedto 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 hereditary rights to a stranger before the partition, any or
all of the co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the sale, provided
they do so within the period of one month from the time they were
notified in writing of the sale of the vendor.If a sale of a
hereditary right can be made to a stranger, thena fortiorisale
thereof to a coheir could not be forbidden.Tasiana Ongsingco
further argues that her contract with Jose de Borja (Annex "A") is
void because it amounts to a compromise as to her status and
marriage with the late Francisco de Borja. The point is without
merit, for the very opening paragraph of the agreement with Jose de
Borja (Annex "A") describes her as "the heir and surviving spouse
of Francisco de Borja by his second marriage, Tasiana Ongsingco
Vda. de de Borja", which is in itself definite admission of her
civil status. There is nothing in the text of the agreement that
would show that this recognition of Ongsingco's status as the
surviving spouse of Francisco de Borja was only made in
consideration of the cession of her hereditary rights.It is finally
charged by appellant Ongsingco, as well as by the Court of First
Instance of Nueva Ecija in its order of 21 September 1964, in
Special Proceedings No. 832 (Amended Record on Appeal in L-28568,
page 157), that the compromise agreement of 13 October 1963 (Annex
"A") had been abandoned, as shown by the fact that, after its
execution, the Court of First Instance of Nueva Ecija, in its order
of 21 September 1964, had declared that "no amicable settlement had
been arrived at by the parties", and that Jose de Borja himself, in
a motion of 17 June 1964, had stated that the proposed amicable
settlement "had failed to materialize".It is difficult to believe,
however, that the amicable settlement referred to in the order and
motion above-mentioned was the compromise agreement of 13 October
1963, which already had been formally signed and executed by the
parties and duly notarized. What the record discloses is that some
time after its formalization, Ongsingco had unilaterally attempted
to back out from the compromise agreement, pleading various reasons
restated in the opposition to the Court's approval of Annex "A"
(Record on Appeal, L-20840, page 23): that the same was invalid
because of the lapse of the allegedly intended resolutory period of
60 days and because the contract was not preceded by the probate of
Francisco de Borja's will, as required by this Court'sGuevarra vs.
Guevararuling; that Annex "A" involved a compromise affecting
Ongsingco's status as wife and widow of Francisco de Borja, etc.,
all of which objections have been already discussed. It was natural
that in view of the widow's attitude, Jose de Borja should attempt
to reach a new settlement or novatory agreement before seeking
judicial sanction and enforcement of Annex "A", since the latter
step might ultimately entail a longer delay in attaining final
remedy. That the attempt to reach another settlement failed is
apparent from the letter of Ongsingco's counsel to Jose de Borja
quoted in pages 35-36 of the brief for appellant Ongsingco in G.R.
No. 28040; and it is more than probable that the order of 21
September 1964 and the motion of 17 June 1964 referred to the
failure of the parties' quest for a more satisfactory compromise.
But the inability to reach a novatory accord can not invalidate the
original compromise (Annex "A") and justifies the act of Jose de
Borja in finally seeking a court order for its approval and
enforcement from the Court of First Instance of Rizal, which, as
heretofore described, decreed that the agreement be ultimately
performed within 120 days from the finality of the order, now under
appeal.We conclude that in so doing, the Rizal court acted in
accordance with law, and, therefore, its order should be upheld,
while the contrary resolution of the Court of First Instance of
Nueva Ecija should be, and is, reversed.In her brief, Tasiana
Ongsingco also pleads that the time elapsed in the appeal has
affected her unfavorably, in that while the purchasing power of the
agreed price of P800,000 has diminished, the value of the Jalajala
property has increased. But the fact is that her delay in receiving
the payment of the agreed price for her hereditary interest was
primarily due to her attempts to nullify the agreement (Annex "A")
she had formally entered into with the advice of her counsel,
Attorney Panaguiton. And as to the devaluationde factoof our
currency, what We said inDizon Rivera vs. Dizon, L-24561, 30 June
1970, 33 SCRA 554, that "estates would never be settled if there
were to be a revaluation with every subsequent fluctuation in the
values of currency and properties of the estate", is particularly
opposite in the present case.Coming now to Case G.R. No. L-28611,
the issue is whether the Hacienda de Jalajala (Poblacion),
concededly acquired by Francisco de Borja during his marriage to
his first wife, Josefa Tangco, is the husband's private property
(as contended by his second spouse, Tasiana Ongsingco), or whether
it forms part of the conjugal (ganancial) partnership with Josefa
Tangco. The Court of First Instance of Rizal (Judge Herminio
Mariano, presiding) declared that there was adequate evidence to
overcome the presumption in favor of its conjugal character
established by Article 160 of the Civil Code.We are of the opinion
that this question as between Tasiana Ongsingco and Jose de Borja
has become moot and academic, in view of the conclusion reached by
this Court in the two preceding cases (G.R. No. L-28568), upholding
as valid the cession of Tasiana Ongsingco's eventual share in the
estate of her late husband, Francisco de Borja, for the sum of
P800,000 with the accompanying reciprocal quit-claims between the
parties. But as the question may affect the rights of possible
creditors and legatees, its resolution is still imperative.It is
undisputed that the Hacienda Jalajala, of around 4,363 hectares,
had been originally acquired jointly by Francisco de Borja,
Bernardo de Borja and Marcelo de Borja and their title thereto was
duly registered in their names as co-owners in Land Registration
Case No. 528 of the province of Rizal, G.L.R.O. Rec. No. 26403 (De
Barjo vs. Jugo, 54 Phil. 465). Subsequently, in 1931, the Hacienda
was partitioned among the co-owners: the Punta section went to
Marcelo de Borja; the Bagombong section to Bernardo de Borja, and
the part in Jalajala proper (Poblacion) corresponded to Francisco
de Borja (V. De Borja vs. De Borja 101 Phil. 911, 932).The lot
allotted to Francisco was described as Una Parcela de terreno en
Poblacion, Jalajala: N. Puang River; E. Hermogena Romero; S. Heirs
of Marcelo de Borja O. Laguna de Bay; containing an area of
13,488,870 sq. m. more or less, assessed at P297,410. (Record on
Appeal, pages 7 and 105)On 20 November 1962, Tasiana O. Vda. de
Borja, as Administratrix of the Testate Estate of Francisco de
Borja, instituted a complaint in the Court of First Instance of
Rizal (Civil Case No. 7452) against Jose de Borja, in his capacity
as Administrator of Josefa Tangco (Francisco de Borja's first
wife), seeking to have the Hacienda above described declared
exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was
conjugal property of his parents (Francisco de Borja and Josefa
Tangco), conformably to the presumption established by Article 160
of the Philippine Civil Code (reproducing Article 1407 of the Civil
Code of 1889), to the effect that:Art. 160. All property of the
marriage is presumed to belong to the conjugal partnership, unless
it be proved that it pertains exclusively to the husband or to the
wife.Defendant Jose de Borja further counterclaimed for damages,
compensatory, moral and exemplary, as well as for attorney's
fees.After trial, the Court of First Instance of Rizal, per Judge
Herminio Mariano, held that the plaintiff had adduced sufficient
evidence to rebut the presumption, and declared the Hacienda de
Jalajala (Poblacion) to be the exclusive private property of the
late Francisco de Borja, and his Administratrix, Tasiana Ongsingco
Vda. de Borja, to be entitled to its possession. Defendant Jose de
Borja then appealed to this Court.The evidence reveals, and the
appealed order admits, that the character of the Hacienda in
question as owned by the conjugal partnership De Borja-Tangco was
solemnly admitted by the late Francisco de Borja no less than two
times: first, in the Reamended Inventory that, as executor of the
estate of his deceased wife Josefa Tangco, he filed in the Special
Proceedings No. 7866 of the Court of First Instance of Rizal on 23
July 1953 (Exhibit "2"); and again, in the Reamended Accounting of
the same date, also filed in the proceedings aforesaid (Exhibit
"7"). Similarly, the plaintiff Tasiana O. Vda. de Borja, herself,
as oppositor in the Estate of Josefa Tangco, submitted therein an
inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala
property among the "Conjugal Properties of the Spouses Francisco de
Borja and Josefa Tangco". And once more, Tasiana Ongsingco, as
administratrix of the Estate of Francisco de Borja, in Special
Proceedings No. 832 of the Court of First Instance of Nueva Ecija,
submitted therein in December, 1955, an inventory wherein she
listed the Jalajala Hacienda under the heading "Conjugal Property
of the Deceased Spouses Francisco de Borja and Josefa Tangco, which
are in the possession of the Administrator of the Testate Estate of
the Deceased Josefa Tangco in Special Proceedings No. 7866 of the
Court of First Instance of Rizal" (Exhibit "4").Notwithstanding the
four statements aforesaid, and the fact that they are plain
admissions against interest made by both Francisco de Borja and the
Administratrix of his estate, in the course of judicial proceedings
in the Rizal and Nueva Ecija Courts, supporting the legal
presumption in favor of the conjugal community, the Court below
declared that the Hacienda de Jalajala (Poblacion) was not conjugal
property, but the private exclusive property of the late Francisco
de Borja. It did so on the strength of the following evidences: (a)
the sworn statement by Francis de Borja on 6 August 1951 (Exhibit
"F") that He tomado possession del pedazo de terreno ya delimitado
(equivalente a 1/4 parte, 337 hectareas) adjunto a mi terreno
personal y exclusivo (Poblacion de Jalajala, Rizal).and (b) the
testimony of Gregorio de Borja, son of Bernardo de Borja, that the
entire Hacienda had been bought at a foreclosure sale for
P40,100.00, of which amount P25,100 was contributed by Bernardo de
Borja and P15,000. by Marcelo de Borja; that upon receipt of a
subsequent demand from the provincial treasurer for realty taxes
the sum of P17,000, Marcelo told his brother Bernardo that
Francisco (son of Marcelo) wanted also to be a co-owner, and upon
Bernardo's assent to the proposal, Marcelo issue a check for
P17,000.00 to pay the back taxes and said that the amount would
represent Francisco's contribution in the purchase of the Hacienda.
The witness further testified that Marcelo de Borjasaidthat that
money was entrusted to him by Francisco de Borjawhen he was still a
bachelorand which he derived from his business transactions.
(Hearing, 2 February 1965, t.s.n., pages 13-15) (Emphasis
supplied)The Court below, reasoning that not only Francisco's sworn
statement overweighed the admissions in the inventories relied upon
by defendant-appellant Jose de Borja since probate courts can not
finally determine questions of ownership of inventoried property,
but that the testimony of Gregorio de Borja showed that Francisco
de Borja acquired his share of the original Hacienda with his
private funds, for which reason that share can not be regarded as
conjugal partnership property, but as exclusive property of the
buyer, pursuant to Article 1396(4) of Civil Code of 1889 and
Article 148(4) of the Civil Code of the Philippines.The following
shall be the exclusive property of each spouse:xxx xxx xxx(4) That
which is purchased with exclusive money of the wife or of the
husband.We find the conclusions of the lower court to be untenable.
In the first place, witness Gregorio de Borja's testimony as to the
source of the money paid by Francisco for his share was plain
hearsay, hence inadmissible and of no probative value, since he was
merely repeating what Marcelo de Borja had told him (Gregorio).
There is no way of ascertaining the truth of the statement, since
both Marcelo and Francisco de Borja were already dead when Gregorio
testified. In addition, the statement itself is improbable, since
there was no need or occasion for Marcelo de Borja to explain to
Gregorio how and when Francisco de Borja had earned the P17,000.00
entrusted to Marcelo. A ring of artificiality is clearly
discernible in this portion of Gregorio's testimony.As to Francisco
de Borja's affidavit, Exhibit "F", the quoted portion thereof
(ante, page 14) does not clearly demonstrate that the "mi terreno
personal y exclusivo (Poblacion de Jalajala, Rizal) " refers
precisely to the Hacienda in question. The inventories (Exhibits 3
and 4) disclose that there were two real properties in Jalajala
owned by Francisco de Borja, one of 72.038 sq. m., assessed at
P44,600, and a much bigger one of 1,357.260.70 sq. m., which is
evidently the Hacienda de Jalajala (Poblacion). To which of these
lands did the affidavit of Francisco de Borja (Exhibit "F") refer
to? In addition, Francisco's characterization of the land as "mi
terreno personal y exclusivo" is plainly self-serving, and not
admissible in the absence of cross examination.It may be true that
the inventories relied upon by defendant-appellant (Exhibits "2",
"3", "4" and "7") are not conclusive on the conjugal character of
the property in question; but as already noted, they are clear
admissions against the pecuniary interest of the declarants,
Francisco de Borja and his executor-widow, Tasiana Ongsingco, and
as such of much greater probative weight than the self-serving
statement of Francisco (Exhibit "F"). Plainly, the legal
presumption in favor of the conjugal character of the Hacienda de
Jalajala (Poblacion) now in dispute has not been rebutted but
actually confirmed by proof. Hence, the appealed order should be
reversed and the Hacienda de Jalajala (Poblacion) declared property
of the conjugal partnership of Francisco de Borja and Josefa
Tangco.No error having been assigned against the ruling of the
lower court that claims for damages should be ventilated in the
corresponding special proceedings for the settlement of the estates
of the deceased, the same requires no pro announcement from this
Court.IN VIEW OF THE FOREGOING, the appealed order of the Court of
First Instance of Rizal in Case No. L-28040 is hereby affirmed;
while those involved in Cases Nos. L-28568 and L-28611 are reversed
and set aside. Costs against the appellant Tasiana Ongsingco Vda.
de Borja in all three (3) cases.Concepcion, C.J., Makalintal,
Zaldivar, Castro, Teehankee, Barredo, Makasiar, Antonio and
Esguerra, JJ., concur.Fernando, J., took no part.G.R. No. L-41715
June 18, 1976ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor)
and PONCIANO BONILLA (their father) who represents the
minors,petitioners,vs.LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA
BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and
HON. LEOPOLDO GIRONELLA of the Court of First Instance of
Abra,respondents.Federico Paredes for petitioners.Demetrio V. Pre
for private respondents.MARTIN,J:This is a petition for review1of
the Order of the Court of First Instance of Abra in Civil Case No.
856, entitled Fortunata Barcena vs. Leon Barcena, et al., denying
the motions for reconsideration of its order dismissing the
complaint in the aforementioned case.On March 31, 1975 Fortunata
Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and
wife of Ponciano Bonilla, instituted a civil action in the Court of
First Instance of Abra, to quiet title over certain parcels of land
located in Abra.On May 9, 1975, defendants filed a written motion
to dismiss the complaint, but before the hearing of the motion to
dismiss, the counsel for the plaintiff moved to amend the complaint
in order to include certain allegations therein. The motion to
amend the complaint was granted and on July 17, 1975, plaintiffs
filed their amended complaint.On August 4, 1975, the defendants
filed another motion to dismiss the complaint on the ground that
Fortunata Barcena is dead and, therefore, has no legal capacity to
sue. Said motion to dismiss was heard on August 14, 1975. In said
hearing, counsel for the plaintiff confirmed the death of Fortunata
Barcena, and asked for substitution by her minor children and her
husband, the petitioners herein; but the court after the hearing
immediately dismissed the case on the ground that a dead person
cannot be a real party in interest and has no legal personality to
sue.On August 19, 1975, counsel for the plaintiff received a copy
of the order dismissing the complaint and on August 23, 1975, he
moved to set aside the order of the dismissal pursuant to Sections
16 and 17 of Rule 3 of the Rules of Court.2On August 28, 1975, the
court denied the motion for reconsideration filed by counsel for
the plaintiff for lack of merit. On September 1, 1975, counsel for
deceased plaintiff filed a written manifestation praying that the
minors Rosalio Bonilla and Salvacion Bonilla be allowed to
substitute their deceased mother, but the court denied the
counsel's prayer for lack of merit. From the order, counsel for the
deceased plaintiff filed a second motion for reconsideration of the
order dismissing the complaint claiming that the same is in
violation of Sections 16 and 17 of Rule 3 of the Rules of Court but
the same was denied.Hence, this petition for review.The Court
reverses the respondent Court and sets aside its order dismissing
the complaint in Civil Case No. 856 and its orders denying the
motion for reconsideration of said order of dismissal. While it is
true that a person who is dead cannot sue in court, yet he can be
substituted by his heirs in pursuing the case up to its completion.
The records of this case show that the death of Fortunata Barcena
took place on July 9, 1975 while the complaint was filed on March
31, 1975. This means that when the complaint was filed on March 31,
1975, Fortunata Barcena was still alive, and therefore, the court
had acquired jurisdiction over her person. If thereafter she died,
the Rules of Court prescribes the procedure whereby a party who
died during the pendency of the proceeding can be substituted.
Under Section 16, Rule 3 of the Rules of Court "whenever a party to
a pending case dies ... it shall be the duty of his attorney to
inform the court promptly of such death ... and to give the name
and residence of his executor, administrator, guardian or other
legal representatives." This duty was complied with by the counsel
for the deceased plaintiff when he manifested before the respondent
Court that Fortunata Barcena died on July 9, 1975 and asked for the
proper substitution of parties in the case. The respondent Court,
however, instead of allowing the substitution, dismissed the
complaint on the ground that a dead person has no legal personality
to sue. This is a grave error. Article 777 of the Civil Code
provides "that the rights to the succession are transmitted from
the moment of the death of the decedent." From the moment of the
death of the decedent, the heirs become the absolute owners of his
property, subject to the rights and obligations of the decedent,
and they cannot be deprived of their rights thereto except by the
methods provided for by law.3The moment of death is the determining
factor when the heirs acquire a definite right to the inheritance
whether such right be pure or contingent.4The right of the heirs to
the property of the deceased vests in them even before judicial
declaration of their being heirs in the testate or intestate
proceedings.5When Fortunata Barcena, therefore, died her claim or
right to the parcels of land in litigation in Civil Case No. 856,
was not extinguished by her death but was transmitted to her heirs
upon her death. Her heirs have thus acquired interest in the
properties in litigation and became parties in interest in the
case. There is, therefore, no reason for the respondent Court not
to allow their substitution as parties in interest for the deceased
plaintiff.Under Section 17, Rule 3 of the Rules of Court "after a
party dies and the claim is not thereby extinguished, the court
shall order, upon proper notice, the legal representative of the
deceased to appear and be substituted for the deceased, within such
time as may be granted ... ." The question as to whether an action
survives or not depends on the nature of the action and the damage
sued for.6In the causes of action which survive the wrong
complained affects primarily and principally property and property
rights, the injuries to the person being merely incidental, while
in the causes of action which do not survive the injury complained
of is to the person, the property and rights of property affected
being incidental.7Following the foregoing criterion the claim of
the deceased plaintiff which is an action to quiet title over the
parcels of land in litigation affects primarily and principally
property and property rights and therefore is one that survives
even after her death. It is, therefore, the duty of the respondent
Court to order the legal representative of the deceased plaintiff
to appear and to be substituted for her. But what the respondent
Court did, upon being informed by the counsel for the deceased
plaintiff that the latter was dead, was to dismiss the complaint.
This should not have been done for under the same Section 17, Rule
3 of the Rules of Court, it is even the duty of the court, if the
legal representative fails to appear, to order the opposing party
to procure the appointment of a legal representative of the
deceased. In the instant case the respondent Court did not have to
bother ordering the opposing party to procure the appointment of a
legal representative of the deceased because her counsel has not
only asked that the minor children be substituted for her but also
suggested that their uncle be appointed as guardianad litemfor them
because their father is busy in Manila earning a living for the
family. But the respondent Court refused the request for
substitution on the ground that the children were still minors and
cannot sue in court. This is another grave error because the
respondent Court ought to have known that under the same Section
17, Rule 3 of the Rules of Court, the court is directed to appoint
a guardianad litemfor the minor heirs. Precisely in the instant
case, the counsel for the deceased plaintiff has suggested to the
respondent Court that the uncle of the minors be appointed to act
as guardianad litemfor them. Unquestionably, the respondent Court
has gravely abused its discretion in not complying with the clear
provision of the Rules of Court in dismissing the complaint of the
plaintiff in Civil Case No. 856 and refusing the substitution of
parties in the case.IN VIEW OF THE FOREGOING, the order of the
respondent Court dismissing the complaint in Civil Case No. 856 of
the Court of First Instance of Abra and the motions for
reconsideration of the order of dismissal of said complaint are set
aside and the respondent Court is hereby directed to allow the
substitution of the minor children, who are the petitioners therein
for the deceased plaintiff and to appoint a qualified person as
guardianad litemfor them. Without pronouncement as to costs.SO
ORDERED.Teehankee (Chairman), Makasiar, Esguerra and Muoz Palma,
JJ., concur.Footnotes1 Which this Court treats as special civil
action as per its Resolution dated February 11, 1976.2 Section
16.Duty of Attorney upon which death, incapacity or incompetency of
party. - Whenever a party to a pending case dies, becomes
incapacitated or incompetent, it shall be the duty of his attorney
to inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of his executor,
administrator, guardian or other legal representative.Section
17.Death of party.After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for
deceased, within a period of thirty (30) days, or within such time
as may be granted. If the legal representative fails to appear
within said time, the court may order the opposing party to procure
the appointment of a legal representative of the within a time to
be specified by the court, and the representative shall immediately
appear for and on behalf of the interest of the deceased. The court
charges involved in procuring such appointment, if defrayed by the
opposing party, may be recovered as costs. The heirs of the
deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator and the
court may appoint guardianad litemfor the minor heirs.3 Buan vs.
Heirs of Buan, 53 Phil. 654.4 Ibarle vs. Po, 92 Phil. 721.5
Morales, et al. vs. Ybanez, 98 Phil. 677.6 Iron Gate Bank vs.
Brady, 184 U.S. 665, 22 SCT 529, 46 L. ed. 739.7 Wenber vs. St.
Paul City Co., 97 Feb. 140 R. 39 C.C.A. 79.G.R. No. 75884 September
24, 1987JULITA GO ONG, FOR HERSELF AND AS JUDICIAL GUARDIAN OF
STEVEN GO ONG,petitioners,vs.THE HON. COURT OF APPEALS, ALLIED
BANKING CORPORATION and the CITY SHERIFF OF QUEZON
CITY,respondents.PARAS,J.:This is a petition for review on
certiorari of the March 21, 1986 Decision*of the Court of Appeals
in AC-G.R. CV No. 02635, "Julita Ong etc. vs. Allied Banking Corp.
et al." affirming, with modification, the January 5, 1984 Decision
of the Regional Trial Court of Quezon City in Civil Case No.
Q-35230.The uncontroverted facts of this case, as found by the
Court of Appeals, are as follows:...: Two (2) parcels of land in
Quezon City Identified as Lot No. 12, Block 407, Psd 37326 with an
area of 1960.6 sq. m. and Lot No. 1, Psd 15021, with an area of
3,660.8 sq. m. are covered by Transfer Certificate of Title No.
188705 in the name of "Alfredo Ong Bio Hong married to Julita Go
Ong "(Exh. D). Alfredo Ong Bio Hong died on January 18, 1975 and
Julita Go Ong was appointed administratrix of her husband's estate
in Civil Case No. 107089. The letters of administration was
registered on TCT No. 188705 on October 23, 1979. Thereafter,
Julita Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705
was partially cancelled and TCT No. 262852 was issued in favor of
L