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 oncertiorariseeking 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."affirmingthe 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
andreversingthe 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.1It 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.3TCT 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 ).4Said 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
P7,000.00.5Consequently, 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.7By virtue of a court order granting said motion,8on March
24, 1958, Arsenia Vda. de Fuentebella sold said lots for P6,000.00
to Rosendo Alvarez.9Hence, 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.12Accordingly, TCT
Nos. 30919 and 30920 were issued to Siason,13who 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.18Thereafter, 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 proceeding19could 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.20Finding 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 anex-partemotion for the issuance of an alias writ of
execution in Civil Case No. 5022. Siason opposed it.22In 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.24Named 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 becomeres judicataand the Yaneses were
estopped from questioning said order.26On their part, the Alvarez
stated in their answer that the Yaneses' cause of action had been
"barred byres 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 oflis
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.28The 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, 198330affirmed
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."31The 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. 8474supra, 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,suprawhere 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.35As 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.37In 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 ofEstate 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
contractedintuitu 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 N
REYES, 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:chanroblesvirtuallawlibrary
Premiums. 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 x
Waiver. 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:chanroblesvirtuallawlibrary
The 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:chanroblesvirtuallawlibrary
Under 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 x
The 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:chanroblesvirtuallawlibrary
ART. 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, 2005]
UNION 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
Decision[1] of the Court of Appeals dated May 30, 2001 in CA-G.R.
CV No. 48831 affirming the dismissal[2] 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 agreement[3] 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 Agreement[5] 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 Agreement[8] 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
Liabilities[9] 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 letters[10] 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 Complaint[11] 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
Answer[13] 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.[15]
The 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.[16]
The 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.[17]
The 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.[18]
In 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.[19]
The 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.
According 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.
At 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.[21]
In 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.[22]
This, 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 will[24] 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 agreement[25] 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.
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.[32]
Perusing 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
evidence[35] 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).[36]
This 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, 1953
MARIA USON, plaintiff-appellee, vs.MARIA DEL ROSARIO, CONCEPCION
NEBREDA, CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA,
Jr., defendants-appellants.
Priscilo Evangelista for appellee.Brigido G. Estrada for
appellant.
BAUTISTA ANGELO, J.:
This is an action for recovery of the ownership and possession
of five (5) parcels of land situated in the Municipality of
Labrador, Province of Pangasinan, filed by Maria Uson against Maria
del Rosario and her four children named Concepcion, Conrado,
Dominador, and Faustino, surnamed Nebreda, who are all of minor
age, before the Court of First Instance of Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his
death in 1945 left the lands involved in this litigation. Faustino
Nebreda left no other heir except his widow Maria Uson. However,
plaintiff claims that when Faustino Nebreda died in 1945, his
common-law wife Maria del Rosario took possession illegally of said
lands thus depriving her of their possession and enjoyment.
Defendants in their answer set up as special defense that on
February 21, 1931, Maria Uson and her husband, the late Faustino
Nebreda, executed a public document whereby they agreed to separate
as husband and wife and, in consideration of their separation,
Maria Uson was given a parcel of land by way of alimony and in
return she renounced her right to inherit any other property that
may be left by her husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective
evidence, the court rendered decision ordering the defendants to
restore to the plaintiff the ownership and possession of the lands
in dispute without special pronouncement as to costs. Defendants
interposed the present appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the
lawful wife of Faustino Nebreda, former owner of the five parcels
of lands litigated in the present case. There is likewise no
dispute that Maria del Rosario, one of the defendants-appellants,
was merely a common-law wife of the late Faustino Nebreda with whom
she had four illegitimate children, her now 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-28040August 18, 1972
TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA,
administrator-appellee; JOSE DE BORJA, as administrator, CAYETANO
DE BORJA, MATILDE DE BORJA and CRISANTO DE BORJA (deceased) as
Children of Josefa Tangco, appellees, vs.TASIANA VDA. DE DE BORJA,
Special Administratrix of the Testate Estate of Francisco de Borja,
appellant. .
G.R. No L-28568August 18, 1972
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA O. VDA.
DE DE BORJA, special Administratrix appellee, vs.JOSE DE BORJA,
oppositor-appellant.
G.R. No. L-28611August 18, 1972
TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate
Estate of the late Francisco de Borja, plaintiff-appellee, vs.JOSE
DE BORJA, as Administrator of the Testate Estate of the late Josefa
Tangco, defendant-appellant.
L-28040
REYES, J.B.L., J.:p
Of these cases, the first, numbered L-28040 is an appeal by
Tasiana Ongsingco Vda. de de Borja, special administratrix of the
testate estate of Francisco de Borja, 1 from the approval of a
compromise agreement by the Court of First Instance of Rizal,
Branch I, in its Special Proceeding No. R-7866, entitled, "Testate
Estate of Josefa Tangco, Jose de Borja, Administrator".
Case No. L-28568 is an appeal by administrator Jose Borja from
the disapproval of the same compromise agreement by the Court of
First Instance of Nueva Ecija, Branch II, in its Special Proceeding
No. 832, entitled, "Testate Estate of Francisco de Borja, Tasiana
O. Vda. de de Borja, Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de Borja
from the decision of the Court of First Instance of Rizal, Branch
X, in its Civil Case No. 7452, declaring the Hacienda Jalajala
Poblacion, which is the main object of the aforesaid compromise
agreement, as the separate and exclusive property of the late
Francisco de Borja and not a conjugal asset of the community with
his first wife, Josefa Tangco, and that said hacienda pertains
exclusively to his testate estate, which is under administrator in
Special Proceeding No. 832 of the Court of First Instance of Nueva
Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his
wife Josefa Tangco on 6 October 1940, filed a petition for the
probate of her will which was docketed as Special Proceeding No.
R-7866 of the Court of First Instance of Rizal, Branch I. The will
was probated on 2 April 1941. In 1946, Francisco de Borja was
appointed executor and administrator: in 1952, their son, Jose de
Borja, was appointed co-administrator. When Francisco died, on 14
April 1954, Jose became the sole administrator of the testate
estate of his mother, Josefa Tangco. While a widower Francisco de
Borja allegedly took unto himself a second wife, Tasiana Ongsingco.
Upon Francisco's death, Tasiana instituted testate proceedings in
the Court of First Instance of Nueva Ecija, where, in 1955, she was
appointed special administratrix. The validity of Tasiana's
marriage to Francisco was questioned in said proceeding.
The relationship between the children of the first marriage and
Tasiana Ongsingco has been plagued with several court suits and
counter-suits; including the three cases at bar, some eighteen (18)
cases remain pending determination in the courts. The testate
estate of Josefa Tangco alone has been unsettled for more than a
quarter of a century. In order to put an end to all these
litigations, a compromise agreement was entered into on 12 October
1963, 2 by and between "[T]he heir and son of Francisco de Borja by
his first marriage, namely, Jose de Borja personally and as
administrator of the Testate Estate of Josefa Tangco," and "[T]he
heir and surviving spouse of Francisco de Borja by his second
marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer,
Atty. Luis Panaguiton Jr." The terms and conditions of the
compromise agreement are as follows:
A G R E E M E N T
THIS AGREEMENT made and entered into by and between
The heir and son of Francisco de Borja by his first marriage,
namely, Jose de Borja personally and as administrator of the
Testate Estate of Josefa Tangco,
A N D
The heir and surviving spouse of Francisco de Borja by his
second marriage, Tasiana Ongsingco Vda. de Borja, assisted by her
lawyer, Atty. Luis Panaguiton Jr.
W I T N E S S E T H
THAT it is the mutual desire of all the parties herein terminate
and settle, with finality, the various court litigations,
controversies, claims, counterclaims, etc., between them in
connection with the administration, settlement, partition,
adjudication and distribution of the assets as well as liabilities
of the estates of Francisco de Borja and Josefa Tangco, first
spouse of Francisco de Borja.
THAT with this end in view, the parties herein have agreed
voluntarily and without any reservations to enter into and execute
this agreement under the following terms and conditions:
1.That the parties agree to sell the Poblacion portion of the
Jalajala properties situated in Jalajala, Rizal, presently under
administration in the Testate Estate of Josefa Tangco (Sp. Proc.
No. 7866, Rizal), more specifically described as follows:
Linda al Norte con el Rio Puwang que la separa de la
jurisdiccion del Municipio de Pililla de la Provincia de Rizal, y
con el pico del Monte Zambrano; al Oeste con Laguna de Bay; por el
Sur con los herederos de Marcelo de Borja; y por el Este con los
terrenos de la Familia Maronilla
with a segregated area of approximately 1,313 hectares at the
amount of P0.30 per square meter.
2.That Jose de Borja agrees and obligates himself to pay Tasiana
Ongsingco Vda. de de Borja the total amount of Eight Hundred
Thousand Pesos (P800,000) Philippine Currency, in cash, which
represent P200,000 as his share in the payment and P600,000 as
pro-rata shares of the heirs Crisanto, Cayetano and Matilde, all
surnamed de Borja and this shall be considered as full and complete
payment and settlement of her hereditary share in the estate of the
late Francisco de Borja as well as the estate of Josefa Tangco, Sp.
Proc. No. 832-Nueva Ecija and Sp. Proc. No. 7866-Rizal,
respectively, and to any properties bequeathed or devised in her
favor by the late Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or purportedly conveyed to
her for consideration or otherwise. The funds for this payment
shall be taken from and shall depend upon the receipt of full
payment of the proceeds of the sale of Jalajala, "Poblacion."
3.That Tasiana Ongsingco Vda. de de Borja hereby assumes payment
of that particular obligation incurred by the late Francisco de
Borja in favor of the Rehabilitation Finance Corporation, now
Development Bank of the Philippines, amounting to approximately
P30,000.00 and also assumes payment of her 1/5 share of the Estate
and Inheritance taxes on the Estate of the late Francisco de Borja
or the sum of P3,500.00, more or less, which shall be deducted by
the buyer of Jalajala, "Poblacion" from the payment to be made to
Tasiana Ongsingco Vda. de Borja under paragraph 2 of this Agreement
and paid directly to the Development Bank of the Philippines and
the heirs-children of Francisco de Borja.
4.Thereafter, the buyer of Jalajala "Poblacion" is hereby
authorized to pay directly to Tasiana Ongsingco Vda. de de Borja
the balance of the payment due her under paragraph 2 of this
Agreement (approximately P766,500.00) and issue in the name of
Tasiana Ongsingco Vda. de de Borja, corresponding certified
checks/treasury warrants, who, in turn, will issue the
corresponding receipt to Jose de Borja.
5.In consideration of above payment to Tasiana Ongsingco Vda. de
de Borja, Jose de Borja personally and as administrator of the
Testate Estate of Josefa Tangco, and Tasiana Ongsingco Vda. de de
Borja, for themselves and for their heirs, successors, executors,
administrators, and assigns, hereby forever mutually renounce,
withdraw, waive, remise, release and discharge any and all manner
of action or actions, cause or causes of action, suits, debts, sum
or sums of money, accounts, damages, claims and demands whatsoever,
in law or in equity, which they ever had, or now have or may have
against each other, more specifically Sp. Proceedings Nos. 7866 and
1955, CFI-Rizal, and Sp. Proc. No. 832-Nueva Ecija, Civil Case No.
3033, CFI Nueva Ecija and Civil Case No. 7452-CFI, Rizal, as well
as the case filed against Manuel Quijal for perjury with the
Provincial Fiscal of Rizal, the intention being to completely,
absolutely and finally release each other, their heirs, successors,
and assigns, from any and all liability, arising wholly or
partially, directly or indirectly, from the administration,
settlement, and distribution of the assets as well as liabilities
of the estates of Francisco de Borja and Josefa Tangco, first
spouse of Francisco de Borja, and lastly, Tasiana Ongsingco Vda. de
de Borja expressly and specifically renounce absolutely her rights
as heir over any hereditary share in the estate of Francisco de
Borja.
6.That Tasiana Ongsingco Vda. de de Borja, upon receipt of the
payment under paragraph 4 hereof, shall deliver to the heir Jose de
Borja all the papers, titles and documents belonging to Francisco
de Borja which are in her possession and said heir Jose de Borja
shall issue in turn the corresponding receive thereof.
7.That this agreement shall take effect only upon the
fulfillment of the sale of the properties mentioned under paragraph
1 of this agreement and upon receipt of the total and full payment
of the proceeds of the sale of the Jalajala property "Poblacion",
otherwise, the non-fulfillment of the said sale will render this
instrument NULL AND VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have her unto set their
hands in the City of Manila, Philippines, the 12th of October,
1963.
On 16 May 1966, Jose de Borja submitted for Court approval the
agreement of 12 October 1963 to the Court of First Instance of
Rizal, in Special Proceeding No. R-7866; and again, on 8 August
1966, to the Court of First Instance of Nueva Ecija, in Special
Proceeding No. 832. Tasiana Ongsingco Vda. de de Borja opposed in
both instances. The Rizal court approved the compromise agreement,
but the Nueva Ecija court declared it void and unenforceable.
Special administratrix Tasiana Ongsingco Vda. de de Borja appealed
the Rizal Court's order of approval (now Supreme Court G.R. case
No. L-28040), while administrator Jose de Borja appealed the order
of disapproval (G.R. case No. L-28568) by the Court of First
Instance of Nueva Ecija.
The genuineness and due execution of the compromised agreement
of 12 October 1963 is not disputed, but its validity is,
nevertheless, attacked by Tasiana Ongsingco on the ground that: (1)
the heirs cannot enter into such kind of agreement without first
probating the will of Francisco de Borja; (2) that the same
involves a compromise on the validity of the marriage between
Francisco de Borja and Tasiana Ongsingco; and (3) that even if it
were valid, it has ceased to have force and effect.
In assailing the validity of the agreement of 12 October 1963,
Tasiana Ongsingco and the Probate Court of Nueva Ecija rely on this
Court's decision in Guevara vs. Guevara. 74 Phil. 479, wherein the
Court's majority held the view that the presentation of a will for
probate is mandatory and that the settlement and distribution of an
estate on the basis of intestacy when the decedent left a will, is
against the law and public policy. It is likewise pointed out by
appellant Tasiana Ongsingco that Section 1 of Rule 74 of the
Revised Rules explicitly conditions the validity of an
extrajudicial settlement of a decedent's estate by agreement
between heirs, upon the facts that "(if) the decedent left 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 c