Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-8437

November 28, 1956

ESTATE OF K. H. HEMADY, deceased,

vs.
LUZON SURETY CO., INC., claimant-appellant.
DECISION

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.

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; and 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.

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:

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

Premiums. As consideration for this suretyship, the undersigned jointly and

not.

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

xxx

xxx

xxx

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.

xxx

xxx

xxx

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.

Our Liability Hereunder. It shall not be necessary for the COMPANY to bring suit

Whatever loss therefore, may occur after Hemadys death, are not chargeable to his

against the principal upon his default, or to exhaust the property of the principal, but

estate because upon his death he ceased to be a guarantor.

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

Another clear and strong indication that the surety company has exclusively relied

upon the occurrence of such default. (Rec. App. pp. 98- 102.)

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

The Luzon Surety Co., prayed for allowance, as a contingent claim, of the value of

paragraph entitled Security by way of first mortgage, which was expressly waived

the twenty bonds it had executed in consideration of the counterbonds, and further

and renounced by the security company. The security company has not demanded

asked for judgment for the unpaid premiums and documentary stamps affixed to the

from K. H. Hemady to comply with this requirement of giving security by way of first

bonds, with 12 per cent interest thereon.

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

Before answer was filed, and upon motion of the administratrix of Hemadys estate,

appears at the back of the indemnity agreement. (Rec. App., pp. 407-408).

the lower court, by order of September 23, 1953, dismissed the claims of Luzon
Surety Co., on two grounds: (1) that the premiums due and cost of documentary

We find this reasoning untenable. Under the present Civil Code (Article 1311), as

stamps were not contemplated under the indemnity agreements to be a part of the

well as under the Civil Code of 1889 (Article 1257), the rule is that

undertaking of the guarantor (Hemady), since they were not liabilities incurred after
the execution of the counterbonds; and (2) that whatever losses may occur after

Contracts take effect only as between the parties, their assigns and heirs, except in

Hemadys death, are not chargeable to his estate, because upon his death he

the case where the rights and obligations arising from the contract are not

ceased to be guarantor.

transmissible by their nature, or by stipulation or by provision of law.

Taking up the latter point first, since it is the one more far reaching in effects, the

While in our successional system the responsibility of the heirs for the debts of their

reasoning of the court below ran as follows:

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

The administratrix further contends that upon the death of Hemady, his liability as

deceased but also to his obligations. Articles 774 and 776 of the New Civil Code (and

a guarantor terminated, and therefore, in the absence of a showing that a loss or

Articles 659 and 661 of the preceding one) expressly so provide, thereby confirming

damage was suffered, the claim cannot be considered contingent. This Court

Article 1311 already quoted.

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

ART. 774. Succession is a mode of acquisition by virtue of which the property,

person to qualify as a guarantor, that is: integrity. As correctly pointed out by the

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

claim in fact diminishes or reduces the shares that the heirs would have been

of law.

entitled to receive.

ART. 776. The inheritance includes all the property, rights and obligations of a

Under our law, therefore, the general rule is that a partys contractual rights and

person which are not extinguished by his death.

obligations are transmissible to the successors. The rule is a consequence of the

progressive depersonalization of patrimonial rights and duties that, as observed by

In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:

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

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 can not 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).

xxx

xxx

xxx

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; they 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)

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; and 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 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

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

1726), partnership (Article 1830 and agency (Article 1919). By contract, the articles

obligaciones; le excepcion, la intransmisibilidad. Mientras nada se diga en contrario

of the Civil Code that regulate guaranty or suretyship (Articles 2047 to 2084) contain

impera el principio de la transmision, como elemento natural a toda relacion juridica,

no provision that the guaranty is extinguished upon the death of the guarantor or

salvo las personalisimas. Asi, para la no transmision, es menester el pacto expreso,

the surety.

porque si no, lo convenido entre partes trasciende a sus herederos.

The lower court sought to infer such a limitation from Art. 2056, to the effect that
Siendo estos los continuadores de la personalidad del causante, sobre ellos recaen

one who is obliged to furnish a guarantor must present a person who possesses

los efectos de los vinculos juridicos creados por sus antecesores, y para evitarlo, si

integrity, capacity to bind himself, and sufficient property to answer for the

asi se quiere, es indespensable convension terminante en tal sentido.

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

Por su esencia, el derecho y la obligacion tienden a ir ms all de las personas que

guaranty. It is self-evident that once the contract has become perfected and binding,

les dieron vida, y a ejercer presion sobre los sucesores de esa persona; cuando no se

the supervening incapacity of the guarantor would not operate to exonerate him of

quiera

la

the eventual liability he has contracted; and if that be true of his capacity to bind

transmisibilidad o de cuyos tirminos claramente se deduzca la concresion del

himself, it should also be true of his integrity, which is a quality mentioned in the

concreto a las mismas personas que lo otorgon. (Scaevola, Codigo Civil, Tomo XX,

article alongside the capacity.

esto,

se

impone

una

estipulacion

limitativa

expresamente

de

p. 541-542) ( emphasis supplied.)

The foregoing concept is confirmed by the next Article 2057, that runs as follows:
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

ART. 2057. If the guarantor should be convicted in first instance of a crime

expressly stipulate to that effect; hence, his failure to do so is no sign that he

involving dishonesty or should become insolvent, the creditor may demand another

intended his bargain to terminate upon his death. Similarly, that the Luzon Surety

who has all the qualifications required in the preceding article. The case is excepted

Co., did not require bondsman Hemady to execute a mortgage indicates nothing

where the creditor has required and stipulated that a specified person should be

more than the companys faith and confidence in the financial stability of the surety,

guarantor.

but not that his obligation was strictly personal.

From this article it should be immediately apparent that the supervening dishonesty
The third exception to the transmissibility of obligations under Article 1311 exists

of the guarantor (that is to say, the disappearance of his integrity after he has

when they are not transmissible by operation of law. The provision makes

become bound) does not terminate the contract but merely entitles the creditor to

reference to those cases where the law expresses that the rights or obligations are

demand a replacement of the guarantor. But the step remains optional in the

extinguished by death, as is the case in legal support (Article 300), parental

creditor: it is his right, not his duty; he may waive it if he chooses, and hold the

authority (Article 327), usufruct (Article 603), contracts for a piece of work (Article

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

against the estate of Hemady, since Hemady is a solidary co-debtor of his principals.

guarantor or surety makes the latters undertaking strictly personal, so linked to his

What the Luzon Surety Co. may claim from the estate of a principal debtor it may

individuality that the guaranty automatically terminates upon his death.

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

The contracts of suretyship entered into by K. H. Hemady in favor of Luzon Surety

debtor.

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

The foregoing ruling is of course without prejudice to the remedies of the

liability thereunder necessarily passed upon his death to his heirs. The contracts,

administratrix against the principal debtors under Articles 2071 and 2067 of the New

therefore, give rise to contingent claims provable against his estate under section 5,

Civil Code.

Rule 87 (2 Moran, 1952 ed., p. 437; Gaskell & Co. vs. Tan Sit, 43 Phil. 810, 814).
Our conclusion is that the solidary guarantors liability is not extinguished by his
The most common example of the contigent claim is that which arises when a

death, and that in such event, the Luzon Surety Co., had the right to file against the

person is bound as surety or guarantor for a principal who is insolvent or dead.

estate a contingent claim for reimbursement. It becomes unnecessary now to

Under the ordinary contract of suretyship the surety has no claim whatever against

discuss the estates liability for premiums and stamp taxes, because irrespective of

his principal until he himself pays something by way of satisfaction upon the

the solution to this question, the Luzon Suretys claim did state a cause of action,

obligation which is secured. When he does this, there instantly arises in favor of the

and its dismissal was erroneous.

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

WHEREFORE, the order appealed from is reversed, and the records are ordered

secured obligation in whole or in part, he has no right of action against anybody no

remanded to the court of origin, with instructions to proceed in accordance with law.

claim that could be reduced to judgment. (May vs. Vann, 15 Pla., 553; Gibson vs.

Costs against the Administratrix- Appellee. So ordered.

Mithell, 16 Pla., 519; Maxey vs. Carter, 10 Yarg. [Tenn.], 521 Reeves vs. Pulliam, 7
Baxt. [Tenn.], 119; Ernst vs. Nou, 63 Wis., 134.)

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion,

Endencia and Felix, JJ., concur.

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; and it is
urged that the rule does not apply to the case before us, where the late Hemady was

Digested Case:

a surety, not a principal debtor. The argument evinces a superficial view of the

Estate of K.H. Hemady vs Luzon Surety Co., Inc.

relations between parties. If under the Gaskell ruling, the Luzon Surety Co., as

Civil Law Wills and Succession Transmissible Obligations

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

Luzon Surety filed a claim against the estate of K.H. Hemady based on indemnity
agreements (counterbonds) subscribed by distinct principals and by the deceased
K.H. Hemady as surety (solidary guarantor). As a contingent claim, Luzon Surety

prayed for the allowance of the value of the indemnity agreements it had executed.
The lower court dismissed the claim of Luzon Surety on the ground that whatever
losses may occur after Hemadys death, are not chargeable to his estate, because
upon his death he ceased to be a guarantor.
ISSUES: What obligations are transmissible upon the death of the decedent? Are
contingent claims chargeable against the estate?
HELD: Under the present Civil Code (Article 1311), the rule is that Contracts take
effect only as 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. 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 expressly so provide, thereby confirming Article
1311.

In Mojica v. Fernandez, the Supreme Court ruled 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 can not be regarded as third parties with respect
to a contract to which the deceased was a party, touching the estate of the
deceased x x x which comes in to their hands by right of inheritance; they take such
property subject to all the obligations resting thereon in the hands of him from
whom they derive their rights. 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,
parental authority, usufruct, contracts for a piece of work, partnership and agency.
By contrast, the articles of the Civil Code that regulate guaranty or suretyship
contain no provision that the guaranty is extinguished upon the death of the
guarantor or the surety.

The contracts of suretyship in favor of Luzon Surety Co. not being rendered
intransmissible due to the nature of the undertaking, nor by stipulations of the
contracts themselves, nor by provision of law, his eventual liability therefrom
necessarily passed upon his death to his heirs. The contracts, therefore, give rise to
contingent claims provable against his estate. A contingent liability of a deceased
person is part and parcel of the mass of obligations that must be paid if and when
the contingent liability is converted into a real liability. Therefore, the settlement or
final liquidation of the estate must be deferred until such time as the bonded
indebtedness is paid.

Republic of the Philippines

SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 165300

April 23, 2010

ATTY. PEDRO M. FERRER, Petitioner,

vs.
SPOUSES ALFREDO DIAZ and IMELDA DIAZ, REINA COMANDANTE and SPOUSES
BIENVENIDO PANGAN and ELIZABETH PANGAN, Respondents.
DECISION
DEL CASTILLO, J.:
The basic questions to be resolved in this case are: Is a waiver of hereditary rights in
favor of another executed by a future heir while the parents are still living valid? Is
an adverse claim annotated on the title of a property on the basis of such waiver
likewise valid and effective as to bind the subsequent owners and hold them liable
to the claimant?

This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the
December 12, 2003 Decision2 of the Court of Appeals (CA) in CA-G.R. CV No.
70888.3 Said Decision modified the June 14, 2001 Summary Judgment4 of the
Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-99-38876 by holding
respondents Spouses Bienvenido and Elizabeth Pangan (the Pangans) not solidarily
liable with the other respondents, Spouses Alfredo and Imelda Diaz (the Diazes) and
Reina Comandante (Comandante), to petitioner Atty. Pedro M. Ferrer (Atty. Ferrer).
Likewise assailed is the CA Resolution5 dated September 10, 2004 which denied
petitioners as well as respondents Spouses Diaz and Comandantes respective
motions for reconsideration.
The parties respective versions of the factual antecedents are as follows:
Version of the Petitioner
Petitioner Atty. Ferrer claimed in his original Complaint6 that on May 7, 1999, the
Diazes, as represented by their daughter Comandante, through a Special Power of
Attorney (SPA),7 obtained from him a loan of P1,118,228.00. The loan was secured
by a Real Estate Mortgage Contract8 by way of second mortgage over Transfer
Certificate of Title (TCT) No. RT-66049 and a Promissory Note10 payable within six
months or up to November 7, 1999. Comandante also issued to petitioner postdated
checks to secure payment of said loan.
Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a
valuable consideration of P600,000.00, which amount formed part of the
abovementioned secured loan, executed in his favor an instrument entitled Waiver
of Hereditary Rights and Interests Over a Real Property (Still Undivided),11 the
pertinent portions of which read:
I, REINA D. COMANDANTE, of legal age, Filipino, married, with residence and postal
address at No. 6, Road 20, Project 8, Quezon City, Metro Manila, Philippines, for a
valuable consideration of SIX HUNDRED THOUSAND PESOS (P600,000.00) which
constitutes my legal obligation/loan to Pedro M. Ferrer, likewise of legal age, Filipino,
married to Erlinda B. Ferrer, with residence and postal address at No. 9, Lot 4, Puerto
Rico Street, Loyola Grand Villas, Quezon City, Metro Manila, Philippines, by virtue of
these presents, do hereby WAIVE, and/or REPUDIATE all my hereditary rights and
interests as a legitimate heir/daughter of Sps. Alfredo T. Diaz and Imelda G. Diaz in
favor of said Pedro M. Ferrer, his heirs and assigns over a certain parcel of land
together with all the improvements found thereon and which property is more
particularly described as follows:
TRANSFER CERTIFICATE OF TITLE
NO. RT-6604 (82020) PR-18887
and which property is titled and registered in the name of my parents Alfredo T. Diaz
and Imelda G. Diaz, as evidenced by Transfer Certificate of Title No. RT 6604 (82020)
PR-18887.
(sgd.)
REINA D. COMANDANTE
Affiant

On the basis of said waiver, petitioner executed an Affidavit of Adverse Claim12

which he caused to be annotated at the back of TCT No. RT-6604 on May 26, 1999.
The Diazes, however, reneged on their obligation as the checks issued by
Comandante were dishonored upon presentment. Despite repeated demands, said
respondents still failed and refused to settle the loan. Thus, petitioner filed on
September 29, 1999 a Complaint13 for Collection of Sum of Money Secured by Real
Estate Mortgage Contract against the Diazes and Comandante docketed as Civil
Case No. Q-99-38876 and raffled to Branch 224 of RTC, Quezon City.
Petitioner twice amended his complaint. First, by including as an alternative relief
the Judicial Foreclosure of Mortgage14 and, second, by impleading as additional
defendants the Pangans as the mortgaged property covered by TCT No. RT-6604 was
already transferred under their names in TCT No. N-209049. Petitioner prayed in his
second amended complaint that all the respondents be ordered to jointly and
solidarily pay him the sum of P1,118,228.00, exclusive of interests, and/or for the
judicial foreclosure of the property pursuant to the Real Estate Mortgage Contract.
Version of the Respondents
In her Answer15 to petitioners original complaint, Comandante alleged that
petitioner and his wife were her fellow members in the Couples for Christ Movement.
Sometime in 1998, she sought the help of petitioner with regard to the mortgage
with a bank of her parents lot located at No. 6, Rd. 20, Project 8, Quezon City and
covered by TCT No. RT-6604. She also sought financial accommodations from the
couple on several occasions which totaled P500,000.00. Comandante, however,
claimed that these loans were secured by chattel mortgages over her taxi units in
addition to several postdated checks she issued in favor of petitioner.
As she could not practically comply with her obligation, petitioner and his wife,
presented to Comandante sometime in May 1998 a document denominated as
Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided)
pertaining to a waiver of her hereditary share over her parents abovementioned
property. Purportedly, the execution of said waiver was to secure Comandantes loan
with the couple which at that time had already ballooned to P600,000.00 due to
interests.
A year later, the couple again required Comandante to sign the following
documents: (1) a Real Estate Mortgage Contract over her parents property; and, (2)
an undated Promissory Note, both corresponding to the amount of P1,118,228.00,
which petitioner claimed to be the total amount of Comandantes monetary
obligation to him exclusive of charges and interests. Comandante alleged that she
reminded petitioner that she was not the registered owner of the subject property
and that although her parents granted her SPA, same only pertains to her authority
to mortgage the property to banks and other financial institutions and not to
individuals. Petitioner nonetheless assured Comandante that the SPA was also
applicable to their transaction. As Comandante was still hesitant, petitioner and his
wife threatened to foreclose the formers taxi units and present the postdated
checks she issued to the bank for payment. For fear of losing her taxi units which
were the only source of her livelihood, Comandante was thus constrained to sign the
mortgage agreement as well as the promissory note. Petitioner, however, did not
furnish her with copies of said documents on the pretext that they still have to be
notarized, but, as can be gleaned from the records, the documents were never

notarized. Moreover, Comandante claimed that the SPA alluded to by petitioner in

his complaint was not the same SPA under which she thought she derived the
authority to execute the mortgage contract.
Comandante likewise alleged that on September 29, 1999 at 10:00 o clock in the
morning, she executed an Affidavit of Repudiation/Revocation of Waiver of
Hereditary Rights and Interests Over A (Still Undivided) Real Property,16 which she
caused to be annotated on the title of the subject property with the Registry of
Deeds of Quezon City on the same day. Interestingly, petitioner filed his complaint
later that day too.
By way of special and affirmative defenses, Comandante asserted in her Answer to
the amended complaint17 that said complaint states no cause of action against her
because the Real Estate Mortgage Contract and the waiver referred to by petitioner
in his complaint were not duly, knowingly and validly executed by her; that the
Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) is a
useless document as its execution is prohibited by Article 1347 of the Civil Code,18
hence, it cannot be the source of any right or obligation in petitioners favor; that
the Real Estate Mortgage was of doubtful validity as she executed the same without
valid authority from her parents; and, that the prayer for collection and/or judicial
foreclosure was irregular as petitioner cannot seek said remedies at the same time.
Apart from executing the affidavit of repudiation, Comandante also filed on October
4, 1999 a Petition for Cancellation of Adverse Claim (P.E. 2468) Under The
Memorandum of Encumbrances of TCT No. RT-6604 (82020) PR-1888719 docketed
as LRC Case No. Q-12009 (99) and raffled to Branch 220 of RTC, Quezon City.
Petitioner who was impleaded as respondent therein moved for the consolidation of
said case20 with Civil Case No. Q-99-38876. On June 24, 2000, Branch 220 of RTC,
Quezon City ordered the consolidation of LRC Case No. Q-12009 (99) with Civil Case
No. Q-99-38876. Accordingly, the records of the former case was forwarded to
Branch 224.
For their part, the Diazes asserted that petitioner has no cause of action against
them. They claimed that they do not even know petitioner and that they did not
execute any SPA in favor of Comandante authorizing her to mortgage for the second
time the subject property. They also contested the due execution of the SPA as it
was neither authenticated before the Philippine Consulate in the United States nor
notarized before a notary public in the State of New York where the Diazes have
been residing for 16 years. They claimed that they do not owe petitioner anything.
The Diazes also pointed out that the complaint merely refers to Comandantes
personal obligation to petitioner with which they had nothing to do. They thus
prayed that the complaint against them be dismissed.21
At the Pangans end, they alleged that they acquired the subject property by
purchase in good faith and for a consideration of P3,000,000.00 on November 11,
1999 from the Diazes through the latters daughter Comandante who was clothed
with SPA acknowledged before the Consul of New York. The Pangans immediately
took actual possession of the property without anyone complaining or protesting.
Soon thereafter, they were issued TCT No. N-209049 in lieu of TCT No. RT-6604 which
was cancelled. 22
However, on December 21, 1999, they were surprised upon being informed by
petitioner that the subject land had been mortgaged to him by the Diazes. Upon

inquiry from Comandante, the latter readily admitted that she has a personal loan
with petitioner for which the mortgage of the property in petitioners favor was
executed. She admitted, though, that her parents were not aware of such mortgage
and that they did not authorize her to enter into such contract. Comandante also
informed the Pangans that the signatures of her parents appearing on the SPA are
fictitious and that it was petitioner who prepared such document.
As affirmative defense, the Pangans asserted that the annotation of petitioners
adverse claim on TCT No. RT-6604 cannot impair their rights as new owners of the
subject property. They claimed that the Waiver of Hereditary Rights and Interests
Over a Real Property (Still Undivided) upon which petitioners adverse claim is
anchored cannot be the source of any right or interest over the property considering
that it is null and void under paragraph 2 of Article 1347 of the Civil Code.
Moreover, the Pangans asserted that the Real Estate Mortgage Contract cannot bind
them nor in any way impair their ownership of subject property because it was not
registered before the Register of Deeds.23
All the respondents interposed their respective counterclaims and prayed for moral
and exemplary damages and attorneys fees in varying amounts.
After the parties have submitted their respective pre-trial briefs, the Diazes filed on
March 29, 2001 a Motion for Summary Judgment24 alleging that: first, since the
documents alluded to by petitioner in his complaint were defective, he was not
entitled to any legal right or relief; and, second, it was clear from the pleadings that
it is Comandante who has an outstanding obligation with petitioner which the latter
never denied. With these, the Diazes believed that there is no genuine issue as to
any material fact against them and, hence, they were entitled to summary
judgment.
On May 7, 2001, petitioner also filed a Motion for Summary Judgment,25 claiming
that his suit against the respondents is meritorious and well-founded and that same
is documented and supported by law and jurisprudence. He averred that his adverse
claim annotated at the back of TCT No. RT-6604, which was carried over in TCT No.
209049 under the names of the Pangans, is not merely anchored on the Waiver of
Hereditary Rights and Interests Over a Real Property (Still Undivided) executed by
Comandante, but also on the Real Estate Mortgage likewise executed by her in
representation of her parents and in favor of petitioner. Petitioner insisted that said
adverse claim is not frivolous and invalid and is registrable under Section 70 of
Presidential Decree (PD) No. 1529. In fact, the Registrar of Deeds of Quezon City had
already determined the sufficiency and/or validity of such registration by annotating
said claim, and this, respondents failed to question. Petitioner further averred that
even before the sale and transfer to the Pangans of the subject property, the latter
were already aware of the existence of his adverse claim. In view of these, petitioner
prayed that his Motion for Summary Judgment be granted.
Ruling of the Regional Trial Court
After the filing of the parties respective Oppositions to the said motions for
summary judgment, the trial court, in an Order dated May 31, 2001,26 deemed both
motions for summary judgment submitted for resolution. Quoting substantially
petitioners allegations in his Motion for Summary Judgment, it thereafter rendered
on June 14, 2001 a Summary Judgment27 in favor of petitioner, the dispositive
portion of which reads:

WHEREFORE, premises considered, summary judgment is hereby rendered in favor

of plaintiff and against defendants by:
a) ORDERING all defendants jointly and solidarily to pay plaintiff the sum of ONE
MILLION ONE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED TWENTY EIGHT
PESOS (P1,118,228.00) which is blood money of plaintiff;
b) ORDERING the Honorable Registrar of Deeds of Quezon City that the rights and
interest of the plaintiff over subject property be annotated at the back of T.C.T. No.
N-209049;

1. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and

severally pay plaintiff the sum of Php 1,118, 228.00; and
2. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and
severally pay plaintiff the amount of Php10,000.00 plus cost of suit.
SO ORDERED.31
Petitioners Motion for Reconsideration32 having been denied by the CA in its
Resolution33 dated September 10, 2004, he now comes to us through this petition
for review on certiorari insisting that the Pangans should, together with the other
respondents, be held solidarily liable to him for the amount of P1,118,228.00.

c) SENTENCING all defendants to pay plaintiffs expenses of TEN THOUSAND PESOS

(P10,000.00) and to pay the costs of suit.

Our Ruling

IT IS SO ORDERED.28

The petition lacks merit.

The Pangans, the Diazes, and Comandante appealed to the CA.29 The Pangans
faulted the trial court in holding them jointly and severally liable with the Diazes and
Comandante for the satisfaction of the latters personal obligation to petitioner in
the total amount of P1,118,228.00. The Diazes and Comandante, on the other hand,
imputed error upon the trial court in rendering summary judgment in favor of
petitioner. They averred that assuming the summary judgment was proper, the trial
court should not have considered the Real Estate Mortgage Contract and the
Promissory Note as they were defective, as well as petitioners frivolous and nonregistrable adverse claim.

Petitioner merely reiterates his contentions in the Motion for Summary Judgment he
filed before the trial court. He insists that his Adverse Claim annotated at the back of
TCT No. RT-6604 is not merely anchored on Comandantes Waiver of Hereditary
Rights and Interests Over A Real Property (Still Undivided) but also on her being the
attorney-in-fact of the Diazes when she executed the mortgage contract in favor of
petitioner. He avers that his adverse claim is not frivolous or invalid and is
registrable as the Registrar of Deeds of Quezon City even allowed its annotation. He
also claims that even prior to the sale of subject property to the Pangans, the latter
already knew of his valid and existing adverse claim thereon and are, therefore, not
purchasers in good faith. Thus, petitioner maintains that the Pangans should be held,
together with the Diazes and Comandante, jointly and severally liable to him in the
total amount of P1,118,228.00.

In its Decision30 dated December 12, 2003, the CA declared Comandantes waiver
of hereditary rights null and void. However, it found the Real Estate Mortgage
executed by Comandante on behalf of her parents as binding between the parties
thereto.

Petitioners contentions are untenable.

As regards the Pangans, the CA ruled that the mortgage contract was not binding
upon them as they were purchasers in good faith and for value. The property was
free from the mortgage encumbrance of petitioner when they acquired it as they
only came to know of the adverse claim through petitioners phone call which came
right after the formers acquisition of the property. The CA further ruled that as
Comandantes waiver of hereditary rights and interests upon which petitioners
adverse claim was based is a nullity, it could not be a source of any right in his favor.
Hence, the Pangans were not bound to take notice of such claim and are thus not
liable to petitioner.

The Affidavit of Adverse Claim executed by petitioner reads in part:

Noticeably, the appellate court did not rule on the propriety of the issuance of the
Summary Judgment as raised by the Diazes and Comandante. In the ultimate, the
CA merely modified the assailed Summary Judgment of the trial court by excluding
the Pangans among those solidarily liable to petitioner, in effect affirming in all other
respects the assailed summary judgment, viz:

2. That in order to protect my interest over said property as a Recipient/Benefactor,

for the registered owners/parents might dispose (of) and/or encumber the same in a
fraudulent manner without my knowledge and consent, for the owners duplicate
title was not surrendered to me, it is petitioned that this Affidavit of Adverse Claim
be ANNOTATED at the back of the said title particularly on the original copy of
Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the
Register of Deeds of Quezon City.

WHEREFORE, foregoing premises considered, the Decision of the Regional Trial Court
of Quezon City, Branch 224 in Civil Case No. Q-99-38876 is hereby MODIFIED, as
follows:

xxxx
1. That I am the Recipient/Benefactor of compulsory heirs share over an undivided
certain parcel of land together with all the improvements found therein x x x as
evidenced by Waiver of Hereditary Rights and Interests Over A Real Property,
executed by REINA D. COMANDANTE (a compulsory/legitimate heir of Sps. Alfredo T.
Diaz and Imelda G. Diaz), x x x.

3. That I am executing this Affidavit in order to attest (to) the truth of the foregoing
facts and to petition the Honorable Registrar of Deeds, Quezon City, to annotate this
Affidavit of Adverse Claim at the back of the said title particularly the original copy

of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the
said office, so that my interest as Recipient/Benefactor of the said property will be
protected especially the registered owner/parents, in a fraudulent manner might
dispose (of) and/or encumber the same without my knowledge and consent.
(Emphasis ours)

find that the adverse claim thus registered was frivolous, it may fine the claimant in
an amount not less than one thousand pesos nor more than five thousand pesos, in
its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse
claim by filing with the Register of Deeds a sworn petition to that effect. (Emphasis
ours)

Clearly, petitioners Affidavit of Adverse Claim was based solely on the waiver of
hereditary interest executed by Comandante. This fact cannot be any clearer
especially so when the inscription of his adverse claim at the back of TCT No. RT6604 reads as follows:

Pursuant to the third paragraph of the afore-quoted provision, it has been held that
the validity or efficaciousness of an adverse claim may only be determined by the
Court upon petition by an interested party, in which event, the Court shall order the
immediate hearing thereof and make the proper adjudication as justice and equity
may warrant. And, it is only when such claim is found unmeritorious that the
registration of the adverse claim may be cancelled.36

P.E. 2468/T-(82020)RT-6604 - - AFFIDAVIT OF ADVERSE CLAIM - - Executed under

oath by PEDRO M. FERRER, married to Erlinda B. Ferrer, claiming among others that
they have a claim, the interest over said property as Recipient/Benefactor, by virtue
of a waiver of Hereditary Rights and Interest over a real property x x x34 (Emphasis
ours)
Therefore, there is no basis for petitioners assertion that the adverse claim was also
anchored on the mortgage contract allegedly executed by Comandante on behalf of
her parents.
The questions next to be resolved are: Is Comandantes waiver of hereditary rights
valid? Is petitioners adverse claim based on such waiver likewise valid and
effective?
We note at the outset that the validity of petitioners adverse claim should have
been determined by the trial court after the petition for cancellation of petitioners
adverse claim filed by Comandante was consolidated with Civil Case No. Q-9938876.35 This is in consonance with Section 70 of PD 1529 which provides:
Section 70. Adverse Claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering the
same, make a statement in writing setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description of
the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and a place at which all notices may be served upon him. This statement
shall be entitled to registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from the date of
registration. After the lapse of said period, the annotation of adverse claim may be
cancelled upon filing of a verified petition therefor by the party in interest: Provided,
however, That after cancellation, no second adverse claim based on the same
ground shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in
the Court of First Instance where the land is situated for the cancellation of the
adverse claim, and the court shall grant a speedy hearing upon the question of
validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof
shall be ordered cancelled. If, in any case, the court, after notice and hearing, shall

As correctly pointed out by respondents, the records is bereft of any showing that
the trial court conducted any hearing on the matter. Instead, what the trial court did
was to include this material issue among those for which it has rendered its
summary judgment as shown by the following portion of the judgment:
x x x it will be NOTED that subject Adverse Claim annotated at the back of Transfer
Certificate of Title No. RT-6604 (82020) PR-18887, and carried over to defendantsSps. Pangans Title No. N-20909, is not merely anchored on defendant Reina
Comandantes "Waiver of Hereditary Rights and Interest Over a Real Property" but
also on her being the Attorney-In-Fact of the previous registered
owners/parents/defendants Sps. Alfredo and Imelda Diaz about the Real Estate
Mortgage Contract for a loan of P1,118,228.00 which is a blood money of the
plaintiff. Moreover, subject Adverse Claim in LRC Case No. Q-12009 (99) is NOT
frivolous and invalid and consequently, REGISTRABLE by virtue of Section 110 of the
Land Registration Act (now Section 70 of Presidential Decree No. 1529). 37
(Emphasis ours)
It does not escape our attention that the trial court merely echoed the claim of
petitioner that his adverse claim subject of LRC Case No. Q-12009 (99) is not
frivolous, invalid and is consequently registrable. We likewise lament the apparent
lack of effort on the part of said court to make even a short ratiocination as to how it
came up with said conclusion. In fact, what followed the above-quoted portion of the
summary judgment are mere recitals of the arguments raised by petitioner in his
motion for summary judgment. And in the dispositive portion, the trial court merely
casually ordered that petitioners adverse claim be inscribed at the back of the title
of the Pangans. What is worse is that despite this glaring defect, the CA manifestly
overlooked the matter even if respondents vigorously raised the same before it.
Be that as it may, respondents efforts of pointing out this flaw, which we find
significant, have not gone to naught as will be hereinafter discussed.
All the respondents contend that the Waiver of Hereditary Rights and Interest Over a
Real Property (Still Undivided) executed by Comandante is null and void for being
violative of Article 1347 of the Civil Code, hence, petitioners adverse claim which
was based upon such waiver is likewise void and cannot confer upon the latter any
right or interest over the property.
We agree with the respondents.

Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may
be entered into upon a future inheritance except in cases expressly authorized by
law. For the inheritance to be considered "future", the succession must not have
been opened at the time of the contract. A contract may be classified as a contract
upon future inheritance, prohibited under the second paragraph of Article 1347,
where the following requisites concur:
(1) That the succession has not yet been opened.
(2) That the object of the contract forms part of the inheritance; and,
(3) That the promissor has, with respect to the object, an expectancy of a right
which is purely hereditary in nature.38
In this case, there is no question that at the time of execution of Comandantes
Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided),
succession to either of her parents properties has not yet been opened since both of
them are still living. With respect to the other two requisites, both are likewise
present considering that the property subject matter of Comandantes waiver
concededly forms part of the properties that she expect to inherit from her parents
upon their death and, such expectancy of a right, as shown by the facts, is
undoubtedly purely hereditary in nature.
From the foregoing, it is clear that Comandante and petitioner entered into a
contract involving the formers future inheritance as embodied in the Waiver of
Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by her
in petitioners favor.
In Taedo v. Court of Appeals,39 we invalidated the contract of sale between Lazaro
Taedo and therein private respondents since the subject matter thereof was a "one
hectare of whatever share the former shall have over Lot 191 of the cadastral survey
of Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds
of Tarlac." It constitutes a part of Taedos future inheritance from his parents, which
cannot be the source of any right nor the creator of any obligation between the
parties.
Guided by the above discussions, we similarly declare in this case that the Waiver of
Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by
Comandante in favor of petitioner as not valid and that same cannot be the source
of any right or create any obligation between them for being violative of the second
paragraph of Article 1347 of the Civil Code.

failure of the CA to pass upon the issue of the propriety of the issuance by the trial
court of the Summary Judgment in favor of petitioner despite the fact that they have
raised this issue before the appellate court. They argue that summary judgment is
proper only when there is clearly no genuine issue as to any material fact in the
action. Thus, where the defendant presented defenses tendering factual issue which
call for presentation of evidence, as when he specifically denies the material
allegations in the complaint, summary judgment cannot be rendered.
The Diazes and Comandante then enumerate the genuine issues in the case which
they claim should have precluded the trial court from issuing a summary judgment
in petitioners favor. First, the execution of the SPA in favor of Comandante referred
to by petitioner in his complaint was never admitted by the Diazes. They assert that
as such fact is disputed, trial should have been conducted to determine the truth of
the matter, same being a genuine issue. Despite this, the trial court merely took the
word of the plaintiff and assumed that said document was indeed executed by them.
Second, although Comandante acknowledges that she has a personal obligation with
petitioner, she nevertheless, did not admit that it was in the amount of
P1,118,228.00. Instead, she claims only the amount of P500,000.00 or P600,000.00
(if inclusive of interest) as her obligation. Moreover, the Diazes deny borrowing any
money from petitioner and neither did the Pangans owe him a single centavo. Thus,
the true amount of the obligation due the petitioner and how each of the
respondents are responsible for such amount are genuine issues which need formal
presentation of evidence. Lastly, they aver that the trial court ignored factual and
material issues such as the lack of probative value of Comandantes waiver of
hereditary rights as well as of the SPA; the fact that Comandante signed the
mortgage contract and promissory note in her personal capacity; and, that all such
documents were prepared by petitioner who acted as a lawyer and the creditor of
Comandante at the same time.
Rule 35 of the Rules of Court provides for summary judgment, the pertinent
provisions of which are the following:
Section 1. Summary Judgment for claimant. A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after
the pleading in answer thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon all or any part
thereof.
Section 2. Summary Judgment for the defending party. A party against whom a
claim, counterclaim or cross-claim is asserted or a declaratory relief is sought may,
at any time, move with supporting affidavits, depositions or admissions for a
summary judgment in his favor as to all or any part thereof.

Anent the validity and effectivity of petitioners adverse claim, it is provided in

Section 70 of PD 1529, that it is necessary that the claimant has a right or interest in
the registered land adverse to the registered owner and that it must arise
subsequent to registration. Here, as no right or interest on the subject property flows
from Comandantes invalid waiver of hereditary rights upon petitioner, the latter is
thus not entitled to the registration of his adverse claim. Therefore, petitioners
adverse claim is without any basis and must consequently be adjudged invalid and
ineffective and perforce be cancelled.

Section 3. Motion and proceedings thereon. The motion shall be served at least ten
(10) days before the time specified for the hearing. The adverse party may serve
opposing affidavits, depositions, or admissions at least three (3) days before the
hearing. After the hearing, the judgment sought shall be rendered forthwith if the
pleadings, supporting affidavits, depositions and admissions on file, show that,
except as to the amount of damages, there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law.

Albeit we have already resolved the issues raised by petitioner, we shall not stop
here as the Diazes and Comandante in their Comment40 call our attention to the

As can be deduced from the above provisions, summary judgment is a procedural

devise resorted to in order to avoid long drawn out litigations and useless delays.

When the pleadings on file show that there are no genuine issues of facts to be tried,
the Rules of Court allows a party to obtain immediate relief by way of summary
judgment. That is, when the facts are not in dispute, the court is allowed to decide
the case summarily by applying the law to the material facts. Conversely, where the
pleadings tender a genuine issue, summary judgment is not proper. A genuine issue
is such fact which requires the presentation of evidence as distinguished from a
sham, fictitious, contrived or false claim.41

petitioner Atty. Pedro M. Ferrer, is AFFIRMED. The inscription of the adverse claim of
petitioner Atty. Pedro M. Ferrer on T.C.T. No. N-209049 is hereby ordered
CANCELLED. Insofar as its other aspects are concerned, the assailed Decision is SET
ASIDE and VACATED. The case is REMANDED to the Regional Trial Court of Quezon
City, Branch 224 for further proceedings in accordance with this Decision.

Here, we find the existence of genuine issues which removes the case from the
coverage of summary judgment. The variance in the allegations of the parties in
their pleadings is evident.

***
Atty. Pedro M. Ferrer -versusSps. Alfredo Diaz and Imelda Diaz G.R. No. 165300 April
23, 2010

Petitioner anchors his complaint for sum of money and/or judicial foreclosure on the
alleged real estate mortgage over the subject property allegedly entered into by
Comandante in behalf of her parents to secure payment of a loan amounting to
P1,118,228.00. To support this claim, petitioner attached to his complaint (1) the
SPA alleged to have been executed by the Diazes; (2) the Real Estate Mortgage
Contract pertaining to the amount of P1,118,228.00; and, (3) a Promissory Note.

Fact: The Diazes, represented by their daughter obtained from him a loan of P1,
118,228.00 which was secured by a Real Estate Mortgage Contract and a promissory
note. P600,000 of which was obtained earlier wherein she executed a document an
instrument entitled Waiver of Hereditary Rights and Interests Over a Real Property
which basically states that she waives and repudiates her hereditary right over the
still undivided property. The respondents in their answer presented a different
version of the story. Comandante alleged that petitioner and his wife were her fellow
members in the Couples for Christ Movement. Sometime in 1998, she sought the
help of petitioner with regard to the mortgage with a bank of her parents lot located
at No. 6, Rd. 20, Project 8, Quezon City and covered by TCT No. RT-6604. She also
sought financial accommodations from the couple on several occasions which
totaled P500,000.00. Comandante, however, claimed that these loans were secured
by chattel mortgages over her taxi units in addition to several postdated checks she
issued in favor of petitioner. As she could not practically comply with her obligation,
petitioner and his wife, presented to Comandante sometime in May 1998 a
document denominated as Waiver of Hereditary Rights and Interests Over a Real
Property (Still Undivided) pertaining to a waiver of her hereditary share over her
parents abovementioned property. Purportedly, the execution of said waiver was to
secure Comandante s loan with the couple which at that time had already ballooned
to P600,000.00 due to interests. A year later, the couple again required Comandante
to sign the following documents: (1) a Real Estate Mortgage Contract over her
parents property; and, (2) an undated Promissory Note, both corresponding to the
amount of P1,118,228.00, which petitioner claimed to be the total amount of
Comandante s monetary obligation to him exclusive of charges and interests.
Comandante alleged that she reminded petitioner that she was not the registered
owner of the subject property and that although her parents granted her SPA, same
only pertains to her authority to mortgage the property to banks and other financial
institutions and not to individuals. Petitioner nonetheless assured Comandante that
the SPA was also applicable to their transaction. As Comandante was still hesitant,
petitioner and his wife threatened to foreclose the former s taxi units and present
the postdated checks she issued to the bank for payment. For fear of losing her taxi
units which were the only source of her livelihood, Comandante was thus
constrained to sign the mortgage agreement as well as the promissory note.
Petitioner, however, did not furnish her with copies of said documents on the pretext
that they still have to be notarized, but, as can be gleaned from the records, the
documents were never notarized. Moreover, Comandante claimed that the SPA
alluded to by petitioner in his complaint was not the same SPA under which she
thought she derived the authority to execute the mortgage contract. Furthermore,
she executed an Affidavit of Repudiation/Revocation of Waiver of Hereditary Rights
and Interests Over A (Still Undivided) Real Property, which she caused to be

Comandante, in her Answer to petitioners Amended Complaint, assailed the validity

and due execution of the abovementioned documents. She asserted that the same
were not duly, knowingly and validly executed by her and that it was petitioner who
prepared all of them. Also, although she admitted owing petitioner, same was not an
absolute admission as she limited herself to an obligation amounting only to
P600,000.00 inclusive of charges and interests. She likewise claimed that such
obligation is her personal obligation and not of her parents.
The Diazes, for their part, also denied that they executed the SPA authorizing their
daughter to mortgage their property to petitioner as well as having any obligation to
the latter.
Clearly, there are genuine issues in this case which require the presentation of
evidence. For one, it is necessary to ascertain in a full blown trial the validity and
due execution of the SPA, the Real Estate Mortgage and the Promissory Notes
because the determination of the following equally significant questions depends on
them, to wit: (1) Are the Diazes obligated to petitioner or is the obligation a purely
personal obligation of Comandante? and, (2) Is the sum of P1,118,228.00 as shown
in the Real Estate Mortgage and the Promissory Note, the amount which is really due
the petitioner?
To stress, trial courts have limited authority to render summary judgments and may
do so only when there is clearly no genuine issue as to any material fact. When the
facts as pleaded by the parties are disputed or contested, proceedings for summary
judgment cannot take the place of trial.42 From the foregoing, it is apparent that the
trial court should have refrained from issuing the summary judgment but instead
proceeded to conduct a full blown trial of the case. In view of this, the present case
should be remanded to the trial court for further proceedings and proper disposition
according to the rudiments of a regular trial on the merits and not through an
abbreviated termination of the case by summary judgment.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
dated December 12, 2003 insofar as it excluded the respondents Spouses
Bienvenido Pangan and Elizabeth Pangan from among those solidarily liable to

SO ORDERED

annotated on the title of the subject property with the Registry of Deeds of Quezon
City on the same day. Interestingly, petitioner filed his complaint later that day too.
By way of special and affirmative defenses, Comandante asserted in her Answer to
the amended complaint that said complaint states no cause of action against her
because the Real Estate Mortgage Contract and the waiver referred to by petitioner
in his complaint were not duly, knowingly and validly executed by her; that the
Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) is a
useless document as its execution is prohibited by Article 1347 of the Civil Code,
hence, it cannot be the source of any right or obligation in petitioner s favor; that
the Real Estate Mortgage was of doubtful validity as she executed the same without
valid authority from her parents; and, that the prayer for collection and/or judicial
foreclosure was irregular as petitioner cannot seek said remedies at the same time.
RTC ruled in favor of the herein petitioner but was reversed by the court of appeals
on the ground that Comandante s waiver of hereditary rights null and void. However,
it found the Real Estate Mortgage executed by Comandante on behalf of her parents
as binding between the parties thereto. Issue: W/N waiver of hereditary rights in
favor of another executed by a future heir while the parents are still living valid.
Held: No. Pursuant to the second paragraph of Article 1347 of the Civil Code, no
contract may be entered into upon a future inheritance except in cases expressly
authorized by law. For the inheritance to be considered future, the succession must
not have been opened at the time of the contract. A contract may be classified as a
contract upon future inheritance, prohibited under the second paragraph of Article
1347, where the following requisites concur: (1) That the succession has not yet
been opened. (2) That the object of the contract forms part of the inheritance; and,
(3) That the promissor has, with respect to the object, an expectancy of a right
which is purely hereditary in nature. In this case, there is no question that at the
time of execution of Comandante s Waiver of Hereditary Rights and Interest Over a
Real Property (Still Undivided), succession to either of her parent s properties has
not yet been opened since both of them are still living. With respect to the other two
requisites, both are likewise present considering that the property subject matter of
Comandante s waiver concededly forms part of the properties that she expect to
inherit from her parents upon their death and, such expectancy of a right, as shown
by the facts, is undoubtedly purely hereditary in nature. From the foregoing, it is
clear that Comandante and petitioner entered into a contract involving the former s
future inheritance as embodied in the Waiver of Hereditary Rights and Interest Over
a Real Property (Still Undivided) executed by her in petitioner s favor.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 179859

August 9, 2010

IN RE: PETITION FOR PROBATE OF LAST WILL AND TESTAMENT OF BASILIO

SANTIAGO,
MA. PILAR SANTIAGO and CLEMENTE SANTIAGO, Petitioners,
vs.
ZOILO S. SANTIAGO, FELICIDAD SANTIAGO-RIVERA, HEIRS OF RICARDO SANTIAGO,
HEIRS OF CIPRIANO SANTIAGO, HEIRS OF TOMAS SANTIAGO, Respondents.
FILEMON SOCO, LEONILA SOCO, ANANIAS SOCO, URBANO SOCO, GERTRUDES SOCO
AND HEIRS OF CONSOLACION SOCO, Oppositors.

DECISION
CARPIO MORALES, J.:
Basilio Santiago (Basilio) contracted three marriagesthe first to Bibiana Lopez, the
second to Irene Santiago, and the third to Cecilia Lomotan. Basilio and his first wife
bore two offsprings, Irene and Marta, the mother of herein oppositors Felimon,
Leonila, Consolacion, Ananias, Urbano, and Gertrudes, all surnamed Soco.
Basilio and his second wife had six offsprings, Tomas, Cipriano, Ricardo, respondents
Zoilo and Felicidad, and petitioner Ma. Pilar, all surnamed Santiago.
Basilio and his third wife bore three children, Eugenia herein petitioner Clemente,
and Cleotilde, all surnamed Santiago.1
After Basilio died testate on September 16, 1973, his daughter by the second
marriage petitioner Ma. Pilar filed before the Regional Trial Court (RTC) of Bulacan2 a
petition for the probate of Basilios will, docketed as SP No. 1549-M. The will was
admitted to probate by Branch 10 of the RTC and Ma. Pilar was appointed executrix.
The will contained the following provisions, among others:
4. Ang mga ari-arian ko na nasasaysay sa itaas ay INIWAN, IPINAGKAKALOOB,
IBINIBIGAY, at IPINAMAMANA ko sa aking mga nasabing tagapagmana sa ilalim ng
gaya ng sumusunod:
xxxx
c) ang aking anak na si Ma. Pilar ang magpapalakad at mamamahala ng balutan na
nasa Santiago, Malolos, Bulacan, na nasasaysay sa itaas na 2(y);
d) Sa pamamahala ng bigasan, pagawaan ng pagkain ng hayop at lupat bahay sa
Maynila, ang lahat ng solar sa danay ng daang Malolos-Paombong na nasa Malolos,
Bulacan, kasali at kasama ang palaisdaan na nasa likuran niyon, ay ililipat sa
pangalan nila Ma. Pilar at Clemente; ngunit ang kita ng palaisdaan ay siyang
gagamitin nila sa lahat at anomang kailangang gugol, maging majora o roperacion
[sic], sa lupat bahay sa Lunsod ng Maynila na nasasaysay sa itaas na 2(c);
e) Ang lupat bahay sa Lunsod ng Maynila na nasasaysay sa itaas na 2(c) ay ililipat
at ilalagay sa pangalan nila Ma. Pilar at Clemente hindi bilang pamana ko sa kanila
kundi upang pamahalaan at pangalagaan lamang nila at nang ang sinoman sa aking
mga anak sampu ng apo at kaapuapuhan ko sa habang panahon ay may tutuluyan
kung magnanais na mag-aral sa Maynila o kalapit na mga lunsod x x x.
f) Ang bigasan, mga makina at pagawaan ng pagkain ng hayop ay ipinamamana ko
sa aking asawa, Cecilia Lomotan, at mga anak na Zoilo, Ma. Pilar, Ricardo, Cipriano,
Felicidad, Eugenia, Clemente, at Cleotilde nang pare-pareho. Ngunit, sa loob ng
dalawampong (20) taon mula sa araw ng aking kamatayan, hindi nila papartihin ito
at pamamahalaan ito ni Clemente at ang maghahawak ng salaping kikitain ay si Ma.
Pilar na siyang magpaparte. Ang papartihin lamang ay ang kita ng mga iyon
matapos na ang gugol na kakailanganin niyon, bilang reparacion, pagpapalit o
pagpapalaki ay maawas na. Ninais ko ang ganito sa aking pagmamahal sa kanila at

pagaaring ibinubuhay ko sa kanila lahat, bukod sa yaon ay sa kanila ding

kapakinabangan at kabutihan.
g) Ang lahat ng lupa, liban sa lupat bahay sa Lunsod ng Maynila, ay ipinapamana ko
sa aking nasabing asawa, Cecilia Lomotan, at mga anak na Tomas, Zoilo, Ma. Pilar,
Ricardo, Cipriano, Felicidad, Eugenia, Clemente at Cleotilde nang pare-pareho.
Datapwat, gaya din ng mga bigasan, makina at gawaan ng pagkain ng hayop, ito ay
hindi papartihin sa loob ng dalawampong (20) taon mula sa aking pagpanaw, at
pamamahalaan din nila Ma. Pilar at Clemente. Ang mapaparte lamang ay ang kita o
ani ng nasabing mga pag-aari matapos bayaran ang buwis at/o patubig at iba pang
mga gugol na kailangan. Si Ma. Pilar din ang hahawak ng ani o salaping
manggagaling dito. (emphasis and underscoring supplied)3
The oppositors-children of Marta, a daughter of Basilio and his first wife, were, on
their motion, allowed to intervene.4
After the executrix-petitioner Ma. Pilar filed a "Final Accounting, Partition and
Distribution in Accordance with the Will,"5 the probate court approved the will by
Order of August 14, 1978 and directed the registers of deeds of Bulacan and Manila
to register the certificates of title indicated therein.6 Accordingly, the titles to Lot
Nos. 786, 837, 7922, 836 and 838 in Malolos, Bulacan and Lot No. 8-C in Manila were
transferred in the name of petitioners Ma. Pilar and Clemente.7
The oppositors thereafter filed a Complaint-in-Intervention8 with the probate court,
alleging that Basilios second wife was not Irene but a certain Maria Arellano with
whom he had no child; and that Basilios will violates Articles 979-981 of the Civil
Code.9
The probate court dismissed the Complaint-in-Intervention, citing its previous
approval of the "Final Accounting, Partition, and Distribution in Accordance with the
Will."10
The oppositors-heirs of the first marriage thereupon filed a complaint for completion
of legitime before the Bulacan RTC, docketed as Civil Case No. 562-M-90,11 against
the heirs of the second and third marriages.
In their complaint, oppositors-heirs of the first marriage essentially maintained that
they were partially preterited by Basilios will because their legitime was reduced.12
They thus prayed, inter alia, that an inventory and appraisal of all the properties of
Basilio be conducted and that Ma. Pilar and Clemente be required to submit a fresh
accounting of all the incomes of the properties from the time of Basilios death up to
the time of the filing of Civil Case No. 562-M-90.13
RTC-Branch 17 decided Civil Case No. 562-M-90 (for completion of legitime) in favor
of the oppositors-heirs of the first marriage.
On appeal (docketed as CA G.R. No. 45801), the Court of Appeals, by Decision of
January 25, 2002,14 annulled the decision of RTC-Branch 17, holding that the RTC
Branch 17 dismissal of the Complaint-in-Intervention in SP No. 1549-M and its
August 14, 1978 Order approving the probate of the will constitute res judicata with
respect to Civil Case No. 562-M-90.15 Thus the appellate court disposed:

WHEREFORE, premises considered, the Appeal is hereby GRANTED. The Decision in

Civil Case No. 562-M-90 is hereby ANNULLED on the ground of res judicata. Let the
Decree of Distribution of the Estate of Basilio Santiago remain UNDISTURBED.
SO ORDERED.16 (emphasis in the original; underscoring supplied)
Oppositors-heirs of the first marriage challenged the appellate courts decision in CA
G.R. No. 45801 by petition for review, docketed as G.R. No. 155606, which this Court
denied.17 The denial became final and executory on April 9, 2003.18
In the interregnum, or on October 17, 2000, respondent-heirs of the second
marriage filed before the probate court (RTC-Branch 10) a Motion for Termination of
Administration, for Accounting, and for Transfer of Titles in the Names of the
Legatees.19 Citing the earlier quoted portions of Basilios will, they alleged that:
x x x x the twenty (20) year period within which subject properties should be under
administration of [Ma.] Pilar Santiago and Clemente Santiago expired on September
16, 1993.
Consequently, [Ma.] Pilar Santiago and Clemente Santiago should have ceased as
such administrator[s] way back on September 16, 1993 and they should have
transferred the above said titles to the named legatees in the Last Will and
Testament of the testator by then. Said named legatees in the Last Will and
Testament are no[ne] other than the following:
xxxx
Said [Ma.] Pilar Santiago and Clemente Santiago should have also rendered an
accounting of their administration from such death of the testator up to the present
or until transfer of said properties and its administration to the said legatees.
x x x x20
Respondents prayed that petitioners be ordered:
1) To surrender the above-enumerated titles presently in their names to [the]
Honorable Court and to transfer the same in the names of the designated legatees
in the Last Will and Testament, to wit:
1) asawa, Cecilia Lomotan, at mga anak na
2) Tomas
3) Zoilo
4) Ma. Pilar
5) Ricardo
6) Cipriano
7) Felicidad

8) Eugenia
9) Clemente at
10) Cleotilde
(all surnamed SANTIAGO)
2) To peacefully surrender possession and administration of subject properties,
including any and all improvements thereon, to said legatees.
3) To render an accounting of their administration of said properties and other
properties of the testator under their administration, from death of testator Basilio
Santiago on September 16, 1973 up to the present and until possession and
administration thereof is transferred to said legatees.21
Opposing the motion, petitioners argued that with the approval of the Final
Accounting, Partition and Distribution in Accordance with the Will, and with the
subsequent issuance of certificates of title covering the properties involved, the case
had long since been closed and terminated.22
The probate court, finding that the properties in question would be transferred to
petitioners Ma. Pilar and Clemente for purposes of administration only, granted the
motion, by Order of September 5, 2003,23 disposing as follows:
WHEREFORE, premises considered, the Motion for Termination of Administration, for
Accounting, and for Transfer of Titles in the Names of the Legatees dated October 3,
2000 filed by some heirs of the testator Basilio Santiago xxx is hereby GRANTED.
Accordingly, the administratrix [sic] Ma. Pilar Santiago and Mr. Clemente Santiago
are hereby DIRECTED, as follows:

Further, the Register of Deeds of Bulacan are hereby DIRECTED to cancel and
consider as no force and effects Transfer Certificates of Title Nos. T-249177 (RT46294) [Lot No. 786], T-249175 (RT-46295) [Lot No. 837], T-249174 (RT-46296) [Lot
No. 7922], T-249173 (RT-46297) [Lot No. 836], and T-249176 (RT-46293) [Lot No.
838] in the names of Ma. Pilar Santiago and Clemente Santiago and to issue new
ones in the lieu thereof in the names of Cecilia Lomotan-Santiago, Tomas Santiago,
Zoilo Santiago, Ma. Pilar Santiago, Ricardo Santiago, Cipriano Santiago, Felicidad
Santiago, Eugenia Santiago, Clemente Santiago, and Cleotilde Santiago.
Moreover, the Register of Deeds of Manila is hereby DIRECTED to cancel and
consider as no force and effect Transfer Certificate of Title No. 131044 [Lot No. 8-C]
in the names of Ma. Pilar Santiago and Clemente Santiago and to issue new ones in
lieu thereof in the names of the Heirs of Bibiana Lopez, the Heirs of Irene Santiago,
and the Heirs of Cecilia Lomotan.
The Motion to Suspend Proceedings filed by Filemon, Leonila, Ma. Concepcion,
Ananias, Urbano and Gertrudes, all surnamed Soco, dated December 3, 2002, is
hereby DENIED for lack of merit.24
Respecting petitioners argument that the case had long been closed and
terminated, the trial court held:
x x x x [I]t is clear from the Last Will and Testament that subject properties cannot
actually be partitioned until after 20 years from the death of the testator Basilio
Santiago x x x x. It is, therefore, clear that something more has to be done after the
approval of said Final Accounting, Partition, and Distribution. The testator Basilio
Santiago died on September 16, 1973, hence, the present action can only be filed
after September 16, 1993. Movants cause of action accrues only from the said date
and for which no prescription of action has set in.

d.) To submit an accounting of their administration of the above-mentioned estate of

the testator or all the above said lots including the rice mill, animal feeds factory,
and all improvements thereon from August 14, 1978 up to the present.

The principle of res judicata does not apply in the present probate proceeding which
is continuing in character, and terminates only after and until the final distribution or
settlement of the whole estate of the deceased in accordance with the provision of
the will of the testator. The Order dated August 14, 1978 refers only to the
accounting, partition, and distribution of the estate of the deceased for the period
covering from the date of the filing of the petition for probate on December 27, 1973
up to August 14, 1978. And in the said August 14, 1978 order it does not terminate
the appointment of petitioner[s] Ma. Pilar Santiago and Clemente Santiago as
executrix and administrator, respectively, of the estate of the deceased particularly
of those properties which were prohibited by the testator to be partitioned within 20
years from his death. Since then up to the present, Ma. Pilar Santiago and Clemente
Santiago remain the executor and administrator of the estate of the deceased and
as such, they are required by law to render an accounting thereof from August 14,
1978 up to the present; there is also now a need to partition and distribute the
aforesaid properties as the prohibition period to do so has elapsed. (emphasis and
underscoring supplied)25

e.) To submit a proposed Project of Partition, indicating how the parties may actually
partition or adjudicate all the above said properties including the properties already
in the name of all the said legatees xxx.

Petitioners, together with the oppositors, filed a motion for reconsideration,26 which
the probate court denied, drawing them to appeal to the Court of Appeals which
docketed it as CA G.R. No. 83094.

x x x x.

The Court of Appeals affirmed the decision of the probate court,27 hence, the
petition28 which raises the following grounds:

a.) To surrender the above-enumerated titles presently in their names to this

Honorable Court and to transfer the same in the names of the designated legatees
in the Last Will and Testament, to wit: 1.) asawa, Cecilia Lomotan at mga anak na 2.)
Tomas 3). Zoilo 4.) Ma. Pilar 5.) Ricardo 6.) Cipriano 7.) Felicidad 8.) Eugenia 9.)
Clemente and 10.) Cleotilde all named SANTIAGO.
b.) To peacefully surrender possession and administration of subject properties
including any and all improvements thereon, to said legatees; and
c.) To render an accounting of their administration of subject properties, including
any and all improvements thereon, to said legatees; and

I.
"CAN THE HONORABLE COURT OF APPEALS REVERSE ITSELF"
A. THE COURT OF APPEALS ERRED IN NOT BINDING ITSELF WITH ITS PREVIOUS
DECISION INVOLVING THE SAME PARTIES AND SAME PROPERTIES;
B. THE COURT OF APPEALS ERRED IN AFFIRMING THE RTC AS IT AGREED WITH THE
RTC THAT THIS CASE IS NOT BARRED BY RES JUDICATA;
C. IN C.A.-G.R. NO. 45801, THE HONORABLE COURT OF APPEALS HELD THAT THERE
WAS RES JUDICATA; IN C.A.-G.R. CV NO. 83094, THERE WAS NO RES JUDICATA.
II.
"GRANTING THAT THE COURT OF APPEALS HAS ALL THE COMPETENCE AND
JURISDICTION TO REVERSE ITSELF, STILL THE COURT OF APPEALS ERRED IN
AFFIRMING THE RTCS ORDER TO TRANSFER THE MANILA PROPERTY COVERED BY
TCT NO. 131004 TO THE NAMES OF CECILIA LOMOTAN, TOMAS, ZOILO, MA. PILAR,
RICARDO, CIPRIANO FELICIDAD, EUGENIA, CLEMENTE AND CLEOTILDE, ALL
SURNAMED SANTIAGO."29 (emphasis in the original)
The petition lacks merit.
Petitioners argument that the decision of the appellate court in the earlier CA-G.R.
NO. 45801 (upheld by this Court in G.R. No. 155606) constitutes res judicata to the
subsequent CA G.R. No. 83094 (the subject of the present petition for review) fails.
Res judicata has two aspects, which are embodied in Sections 47 (b) and 47 (c) of
Rule 39 of the Rules of Civil Procedure.30 The first, known as "bar by prior
judgment," proscribes the prosecution of a second action upon the same claim,
demand or cause of action already settled in a prior action.31 The second, known as
"conclusiveness of judgment," ordains that issues actually and directly resolved in a
former suit cannot again be raised in any future case between the same parties
involving a different cause of action.32
Both aspects of res judicata, however, do not find application in the present case.
The final judgment regarding oppositors complaint on the reduction of their legitime
in CA-G.R. NO. 45801 does not dent the present petition, which solely tackles the
propriety of the termination of administration, accounting and transfer of titles in the
names of the legatees-heirs of the second and third marriages. There is clearly no
similarity of claim, demand or cause of action between the present petition and G.R.
No. 155606.
While as between the two cases there is identity of parties, "conclusiveness of
judgment" cannot likewise be invoked. Again, the judgment in G.R. No. 155606
would only serve as an estoppel as regards the issue on oppositors supposed
preterition and reduction of legitime, which issue is not even a subject, or at the
very least even invoked, in the present petition.
What is clear is that petitioners can invoke res judicata insofar as the judgment in
G.R. No. 155606 is concerned against the oppositors only. The records reveal,

however, that the oppositors did not appeal the decision of the appellate court in
this case and were only impleaded pro forma parties.
Apparently, petitioners emphasize on the directive of the appellate court in CA G.R.
No. 45801 that the decree of distribution of the estate of Basilio should remain
undisturbed. But this directive goes only so far as to prohibit the interference of the
oppositors in the distribution of Basilios estate and does not pertain to respondents
supervening right to demand the termination of administration, accounting and
transfer of titles in their names.
Thus, the Order of September 5, 2003 by the probate court granting respondents
Motion for Termination of Administration, for Accounting, and for Transfer of Titles in
the Names of the Legatees is a proper and necessary continuation of the August 14,
1978 Order that approved the accounting, partition and distribution of Basilios
estate. As did the appellate court, the Court notes that the August 14, 1978 Order
was yet to become final pending the whole settlement of the estate. And final
settlement of the estate, in this case, would culminate after 20 years or on
September 16, 1993, when the prohibition to partition the properties of the
decedent would be lifted.
Finally, petitioners object to the inclusion of the house and lot in Manila, covered by
TCT No. 131044, among those to be transferred to the legatees-heirs as it would
contravene the testators intent that no one is to own the same.1avvphi1
The Court is not persuaded. It is clear from Basilios will that he intended the house
and lot in Manila to be transferred in petitioners names for administration purposes
only, and that the property be owned by the heirs in common, thus:
e) Ang lupat bahay sa Lunsod ng Maynila na nasasaysay sa itaas na 2(c) ay ililipat
at ilalagay sa pangalan nila Ma. Pilar at Clemente hindi bilang pamana ko sa kanila
kundi upang pamahalaan at pangalagaan lamang nila at nang ang sinoman sa aking
mga anak sampu ng apo at kaapuapuhan ko sa habang panahon ay may tutuluyan
kung magnanais na mag-aral sa Maynila o kalapit na mga lunsod sa medaling salita,
ang bahay at lupang itoy walang magmamay-ari bagkus ay gagamitin habang
panahon ng sinomang magnanais sa aking kaapuapuhan na tumuklas ng
karunungan sa paaralan sa Maynila at katabing mga lunsod x x x x33 (emphasis and
underscoring supplied)
But the condition set by the decedent on the propertys indivisibility is subject to a
statutory limitation. On this point, the Court agrees with the ruling of the appellate
court, viz:
For this Court to sustain without qualification, [petitioners]s contention, is to go
against the provisions of law, particularly Articles 494, 870, and 1083 of the Civil
Code, which provide that the prohibition to divide a property in a co-ownership can
only last for twenty (20) years x x x x
xxxx
x x x x Although the Civil Code is silent as to the effect of the indivision of a property
for more than twenty years, it would be contrary to public policy to sanction coownership beyond the period expressly mandated by the Civil Code x x x x34

WHEREFORE, the petition is DENIED.

Costs against petitioners.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice
WE CONCUR:

obligations of a deceased person are transmitted through his death to his heirs
either by his will or by operation of law. Hemady holds that the contingent liabilities
of the decedent are part of the obligations transmitted by his death to his heirs.
Accordingly, contingent claims against the estate of a deceased person arising from
the decedent's contractual undertakings under various indemnity agreements
executed in favor of various persons and entities are money claims which may be
proved against his estate and/or heirs. These contingent claims may be proved
during settlement proceedings by an indemnified surety even if in the meantime, no
actual liability on the part of an indemnified surety has arisen by reason of actual
payment made under the suretyship agreement. Accordingly, Hemady holds that the
contingent obligations of a deceased person arising from his personal guaranty are
not extinguished by his death.

PACIO v BILLON No. L-15088, 31 January 1961 1 SCRA 384 Properties not validly
conveyed by a person during his lifetime will form part of his estate upon his
demise. Pacio holds that a parcel of land which was not validly donated (propter
nuptias) by the husband to the wife did not leave his patrimony, and therefore
formed part of his inheritance upon his demise.

USON v DEL ROSARIO, et al. No. L-4693, 29 January 1953 92 Phil 530 Article
777 provides that the right to the succession are transmitted from the moment of
the death of the decedent. Accordingly, Uson holds that the inheritance pertains to
the heirs from the moment of the death of the ancestor as completely as if the
ancestor had executed and delivered to the heirs a deed for the same before his
death. This transmission takes place by operation of law.

BONILLA v BARCENA No. L-41715, 18 June 1976 71 SCRA 491 The transmission
of the hereditary estate from the decedent to the heirs takes place from the moment
of the death of the decedent. A prior judicial declaration of heirship is not necessary
to perfect the transmission. Bonilla holds that claims to or rights over property which
were initiated by the decedent during his lifetime by appropriate court proceedings
are not extinguished by his death. These claims or rights over property are
transmitted to his heirs upon his death.

ESTATE OF HEMADY v LUZON SURETY CO., INC. No. L-8437, 28 November 1956
100 Phil 388 Article 774 provides that by succession, the properties, rights and

BUTTE v MANUEL UY & SONS, INC. No. L-15499, 18 February 1962 4 SCRA 526
The right of legal redemption under Article 1620 of the Civil Code is property. Thus,
where a decedent dies without having exercised a right of redemption (and provided
it has not expired), the said right shall be transmitted to his heirs upon his death. In
this event, the right of redemption is part of the inheritance. However, where

the right of redemption was acquired after the death of the decedent, the
same pertains to the heirs directly in their individual capacities, and not
derivatively from the decedent. Butte makes a clear distinction as to when the
right of redemption is part of the hereditary estate, and when it is not. Accordingly,
Butte clarifies the issue as to who may exercise the right of redemption. While
there is no dispute that the decision arrived at is correct, the matter of tender of the
redemption price and the fact of its judicial consignation invite further scrutiny.
Was the tender of PNB cashier's check to Manuel Uy & Sons, Inc. a valid and
proper tender of payment? Was Angela Butte required under the law to make a
judicial consignation of the redemption price when Manuel Uy & Sons, Inc.
refused to accept the same? It would seem that the estate of Jose V. Ramirez
was insolvent. If indeed it could be proved that the claims of the creditors far exceed
the value of the assets, then none of the heirs would receive any part of the
inheritance, as the same shall be liquidated to pay the creditors. In this
eventuality, can any of the Ramirez heirs claim the right of redemption? The
motives of Angela Butte might also be looked into. Why was she eager to redeem
the share sold by Garnier to Manuel Uy & Sons, Inc.? What is the immediate effect of
her having redeemed the share sold to Manuel Uy & Sons, Inc.

DE BORJA v VDA. DE BORJA No. L-28040, 18 August 1972 46 SCRA 577 The
right to the inheritance is transferred to the heirs precisely at the moment of the
death of the decedent. From such time, the heirs are deemed to be the owners of
the same. De Borja confirms that from the moment of death of the decedent, the

heirs begin to enjoy all the attributes of ownership, including the right to dispose (jus
disponendi). De Borja holds that the pendency of the probate proceeding is no bar
to the exercise of such proprietary rights, since ownership over the hereditary
estate has vested in the heirs from the time of the death of the testator. De Borja
must be distinguished from the prohibition against disposicion captatoria in Article
875 of the Civil Code. Likewise, it must be reconciled with the provision of Article
784 which states that the making of a will is a strictly personal act of the testator.