SUCCESSION CASESTABLE OF CONTENTS

General Provisions; Rules of Court [Section 3, Rule 1; Sections 2, 16, Rule 3]; Section 119, CA 141; Arts. 1306, 1315Rule 1, Section 3 - Cases governed. Rules shall govern the procedure to be observed in actions, civil or criminal and special proceedings… (a) A civil action is one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong. A civil action may either be ordinary or special. Both are governed by the rules for ordinary civil actions, subject to the specific rules prescribed for a special civil action. X X X..(c) A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. Rule 3, Section 2 - Parties in interest. A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.Sec 119 of CA 141 - Every conveyance of land acquired under the free patent or homestead provisions, when proper , shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of 5 years from date of the conveyanceArt. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

1

Limos v. Odones GR # 186979, August 11 2010

A request for admission is not intended to merely reproduce or reiterate the allegations of the requesting pArty’s pleading but should set forth relevant evidentiary matters of fact described in the request, whose purpose is to establish said pArty’s cause of action or defense.

2Reyes v. Enriquez GR # 162956, April 10

1998Declaration of heirship should first be filed as a special proceeding before complaint for reconveyance and partition is filed in ordinary court

3

Ventura vs. Militante GR# 63145, Oct. 5 1999 A dead person nor his estate cannot be a party plaintiff in a court action.Complaint is brought against the surviving spouse for the recovery of an indebtedness chargeable against said conjugal property, any judgment obtained thereby is void. The proper action should be in the form of a claim to be filed in the testate or intestate proceedings.

4

Edgardo Cruz vs. Oswaldo Cruz

GR# 173292, Sept. 1 2010 Heirs have acquired interest in the properties in litigation and became pArties in interest in the case. Complaint filed by deceased can survive and substituted by heirs.

5

Sumaljag v. Literato GR# 149787, June 18 2008 "legal representatives" refer to those authorized by law - the administrator, executor or guardian who, under the rule on settlement of estate of deceased persons, is constituted to take over the estate of the deceased.

6DBP v. Gagarani GR# 172248, Sept. 17 2008 Daughter and son-in-law of the patentees have the

right to repurchase the property because this would be "more in keeping with the spirit of the law.

7

Balus v. Balus GR# 168970, Jan. 15 2010 Deceased who lost ownership of the subject property during his lifetime, cannot pass into the hands of compulsory heirs a parcel of land which is no longer formed part of his estate.

8

Arellano vs. Pascual GR# 189776, Dec. 15 2010

Rule on collation is applicable only when there is compulsory heir. Siblings are not compulsory heirs. Decedent not having left any compulsory heir who is entitled to any legitime, he was at liberty to donate all his properties, even if nothing was left for his siblings-collateral relatives to inherit.

9

Acap vs. CA GR# 118114, Dec 7 1995 Ownership and real rights are acquired only pursuant to a legal mode or process. A stranger or non co-heir cannot conclusively claim ownership over the subject lot on the sole basis of the waiver document

10 DKC Holdings Corp. vs. CA GR# 118248, April. 5, 2000

Heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor

Supplement

12Yaptinchay v. Del Rosario GR# 124320, March 2 1999 Declaration of heirship can be made only in a special

proceeding inasmuch as the petitioners here are seeking the establishment of a status or right.

13Alvarez v. IAC GR# 68053, May 7 1990 Hereditary estates are always liable in their totality for

the payments of the debts of the estate.

14Bonilla vs. Barcena GR # L-41715, June 18 Deceased’s claim was transmitted to heris upon his

death.15 Arriola v. Arriola GR# 177703, Jan. 28 2008 Family Home is shielded from immediate partition.

16

Oscar Reyes v. RTC Makati, Rodrigo reyes

GR# 165744, Aug. 11 2008 Without the settlement of Anastacia's estate, there can be no definite pArtition and distribution of the estate to the heirs. Without the pArtition and distribution, there can be no registration of the transfer

17Puno v. Puno Enterprises GR# 177066, Sept. 11 2009 Recognition as heir, participation in the settlement of

estate and registration in the books of the corporation is needed before an heir acquire shares of decedent

Testamentary Succession; Wills In General; Article 2010; Estate Taxation; Article 1378

18

Vitug vs. Court of Appeals GR# 82027, Mar. 29 Survivorship agreement is valid. The conveyance is not a will because in a will, a person disposes of his property. In this case, the bank account is part of the conjugal funds. Neither is the agreement a donation inter vivos because it takes effect after death.

19

Sicad vs. CA GR# 125888, Aug. 13 A donation which purports to be one inter vivos but withholds from the donee the right to dispose of the donated property during the donor's lifetime is in truth one mortis causa.

20Aluad v. Aluad

GR# 176943, Oct. 17, 2008 Donation although worded as inter vivos is considered

as mortis causa when the donor do not intend to transfer ownership during his lifetime.

Notarial/Formal/Ordinary Will; Article 809

21Suroza vs. Honrado AM No. 2026-CFI, Dec. 19,

1981Will should be executed in a language known to the testator, reading and translation into Filipino language is not enough.

22

Echavez vs. Dozen cons. GR# 192916, Oct. 11, 2010 Attestation and acknowledgment are embodied in two separate provisions of the CC (Arts 805 and 806, respectively) indicates that the law contemplates two distinct acts that serve different purposes.

23

Azuela v. CA

GR#122880, April. 12, 2006 the total number of pages, and whether all persons required to sign did so in the presence of each other must substantially appear in the attestation clause, being the only check against perjury in the probate proceedings

24Lee v. Tambago

A.C. No. 5281, Feb. 12, 2008 Lawyer will be guilty of professional misconduct for

notarizing a spurious will.

25

Guerrero v. Bihis

GR#174144, April. 17, 2007 Notary public who was acting outside the place of his commission, this did not satisfy Art 806. No notary shall possess authority to do any notarial act beyond the limits of his jurisdiction.

26

Celada v. Abena GR# 145545, June. 30, 2008 - Testator may be admitted to be physically weak but it does not necessarily follow that she was not of sound mind.

- Error in the number of pages of the will as stated in the attestation clause is not material to invalidate the subject will.

27

Javellana vs. Ledesma No. L-7179, June 30, 1955 WN the notary signed the certification of acknowledgment in the presence of the testatrix and the witnesses, does not affect the validity of the codicil.

28

Cruz vs. Villasor No. L-32213, Nov. 26, 1973 notary public before whom the will was acknowledged cannot be considered as the third instrumental witness since he cannot acknowledge before himself his having signed the will.

29Garcia vs. Vasquez No. L-26615, April 30, 1970 Absence of proof that it was read to the deceased

twice, the will was NOT duly executed.30 Alvarado vs. Gaviola GR # 74695, Sept. 14, 1993 formal imperfections should be brushed aside when

they do not affect its purpose and which, when taken

into account, may only defeat the testator’s will. Reading contents of will aloud with the witnesses following the reading is substantial compliance.

Holographic Will

31

Roxas vs. De Jesus No. L-38338, Jan. 28, 1985 Generally, “date’ in a holographic will should include the day, month, and year of its execution. However, when there is no appearance of fraud, bad faith, undue influence and pressure and the authenticity of the will is established, probate should be allowed based on principle of substantial compliance.

32

Labrador vs. CA GR# 83843-44, April. 5, 1990 The law does not specify a particular location where the date should be placed in the will. The only requirements are that the date be in the will itself and executed in the hand of the testator.

33

Kalaw vs. Relova (SC is wrong)

No. L-40207, Sept. 28, 1984 In holographic will, substitution of original heir not authenticated by full signature will void the contract and original will cannot be probated, given efficacy to the seeming change of mind of testator.

34Ajero vs. CA GR# 106720, Sept. 15, 1994 lack of authentication on the alterations will only

result in disallowance of such changes.

35

Codoy vs. Calugay GR# 123486, Aug. 12, 1999 the object of the solemnities surrounding the execution of wills is to close the door against bad faith and fraud, to avoid substitution of wills and testaments and to guaranty their truth and authenticity

36

Rodelas vs. Aranza No. L-58509, Dec. 7, 1982 the photostatic or xerox copy of the lost or destroyed holographic will may be admitted because then the authenticity of the handwriting of the deceased can be determined by the probate court.

37

Seangio v. Reyes GR # 140371-72, Nov. 27, 2006

mere disinheritance instrument, conforms to the formalities of a holographic will prescribed by law although it does not make an affirmative disposition of the latter's property, the disinheritance of Alfredo, nonetheless, is an act of disposition in itself.

Probate

38Vda. De Perez vs. Tolete GR# 76714, June 2, 1994 reprobate of a will shall "cause notice thereof to be

given as in case of an original will presented for allowance

39Palaganas v. Palaganas GR # 169144, Jan. 26, 2011 A foreign will can be given legal effects in our

jurisdiction even if not yet probated in the place where it is executed.

40

Heirs of Sandejas vs. Lina GR # 141634, Feb. 5, 2001 Reference to judicial approval, however, cannot adversely affect the substantive rights of heirs to dispose of their own pro indiviso shares in the co-heirship or co-ownership.

Supplement

41

Abangan vs. Abangan GR # 13431, Nov. 12, 1919 will consisting of two sheets the first of which contains all the testamentary dispositions and is signed at the bottom by the testator and three witnesses and the second contains only the attestation clause and is signed also at the bottom by the three witnesses, it is not necessary that both sheets be further signed on their margins by the testator and the witnesses, or be paged.

41Caneda vs. CA GR# 103554, May. 28, 1993 Attestation clause that does not state that witnesses

attest and subscribe in the presence of the testator and of one another will inviolate the will.

Codicils and Incorporation by Reference; Revocation [Wills & Testamentary Dispositions]

42

Adriana Maloto vs. CA,

No. L 76464, Feb. 29, 1988 Theres animus but no corpus. The intention to revoke must be accompanied by the overt physical act of burning, tearing, obliterating, or cancelling the will be carried out by the testator or by another person in his presence and under his express direction.

43

Gago vs. Mamuyac, No. L 26317, Jan. 29, 1927 Where a will which cannot be found is shown to have been in the possession of the testator, when last seen, the presumption is, in the absence of other competent evidence, that the same was cancelled or destroyed.

44

Molo vs. Molo, No. L 2538, Sept. 21, 1951 Invalidity of 2nd will which revoked 1st will can still give effect to 1st will under the principle of “dependent relative revocation”, predicated on the testator' intention not to die intestate

45Diaz vs. De Leon, No. L 17714. May. 31, 1922 destruction of a will animo revocandi constitutes, in

itself, a sufficient revocation.Republication and Revival of Wills; Disallowance of Wills

46

Dorotheo vs. CA, GR# 108581, Dec. 8, 1999 it does not necessarily follow that an extrinsically valid last will and testament is always intrinsically valid. Unlawful provisions/dispositions thereof cannot be given effect.

Institution of Heirs

47

Reyes vs. Baretto - Datu GR # L17818, Jan. 25, 1967 Institution to an heir believed to be a daughter who happened to be not is still valid. Testator is at liberty to assign the free portion of his estate to whomsoever he chose.

Preterition; Disinhertance

48 Aznar vs. Duncan, GR # L 24365, June 30, 1966 Renvoi Doctrine

48Acain vs. IAC

GR # L 72706, Oct. 27, 1987 adopted child was preterited but not the wife. A wife

is not a compulsory heir in the direct line so she cannot be preterited.

50Nuguid vs. Nuguid

GR # L 23445, June 23, 1966 Institution of the sister as universal heir, preteriting

parents is void.

51Seangio v. Reyes GR # 14037172, Nov. 27,

2006See above

52

Santos vs. Buenaventura GR # L 22797, Sept. 22, 1966

the intentions of the testatrix had been fulfilled, her will had been admitted and allowed probate within a reasonably short period, and the disposition of her property can now be effected.

Substitution of Heirs; Vulgar & Fideicommissary Substitution; Conditional & Term Disposition

53Palacios vs. Ramirez GR # L- 27952, Feb. 15, 1992 fideicommissary substitution should not go beyond

one degree from the heir originaly instituted."

54

PCIB vs. Escolin GR# L-27860, Mar. 29, 1974 no fideicommissary substitution bec. there was no obligation upon the husband to preserve and transmit the prop. to the brothers and sisters of the wife as seen in his authority to sell the property

55

Rabadilla vs. Court of Appeals

GR# 113725, June 29, 2000 Without the obligation clearly imposing upon the first heir the preservation of the property and its transmission to the second heir, there is no fideicommissary substitution

Legitime

56Francisco vs. Francisco-Alfonso

GR# 138774, March 8, 2001 compulsory heir can not be deprived of her share in the estate save by disinheritance as prescribed by law.

57

Capitle v. Elbambuena and Olar

GR# 169193, Nov. 30, 2006 Estranged wife remained to be a legal heir, mere estrangement not being a legal ground for the disqualification of a surviving spouse as an heir of the deceased spouse.

Reserva

58Edroso vs. Sablan GR # L-6878, Sept. 13, 1913 the legal title and dominion, even though under a

condition, reside to reservista while he lives. Reservista's right of ownership is registrable.

59Sienes vs. Esparcia GR #L-12957, March 24,

1961 Since it was the reservee who survived the reservor, it was then the reservee’s buyer who would acquire absolute ownership.

60

Gonzales vs. CFI GR #L-34395, May 19, 1981 reservable properties should be inherited by all the nearest relatives within the third degree from the prepositus. She could not select the reservees to whom the reservable property should be given and deprive the other reservees of their share therein.

61

Cano vs. Director GR #L-10701, Jan. 16, 1959 Upon the death of the reservista, the reservatario nearest to the prepositus becomes, automatically and by operation of law, the owner of the reservable property.

62 Vizconde v. CA (bad case) – did not see that it was a

GR# 118449, Feb. 11, 1998 error to require a son-in-law of the decedent to be included in the collation as he is not a compulsory heir

case of reserve troncal) Disinheritance

63Seangio v. Reyes GR# 140371-72, Nov. 27,

2006 See above

Legal or Intestate Succession [Arts. 960-1014] General Provision

64

Bagunu vs. Piedad, GR# 140975, Dec. 8, 2000 Among collateral relatives, except only in the case of nephews and nieces of the decedent concurring with their uncles or aunts, the rule of proximity, is applicable The right of representation does not apply to "others collateral relatives within the fifth civil degree”.

Right of Representation (See also Domestic Adoption Act)

65

Sayson vs. CA, GR# 8922425, Jan. 23, 1992 While it is true that the adopted child shall be deemed to be a legitimate child and have the same right as the latter, these rights do not include the right of representation

Order of Intestate SuccessionDescending Direct Line

66Sayson vs. CA, GR# 89224-25, Jan. 23,

1992 a person's love descends first to his children and grandchildren before it ascends to his parents and thereafter spreads among his collateral relatives.

Ascending Direct LineIllegitimate Children

67

Corpus vs. Corpus GR # L-22469, Oct. 23, 1978 an illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother; nor shall such children or relatives inherit in the same manner from the illegitimate child

68Leonardo vs. CA GR #L-51263, Feb. 28, 1983 An illegitimate cannot, by right of representation,

claim a share of the estate left by the legitimate relatives left by his father

68Diaz vs. IAC GR #L-66574, June 17, 1987 The right of representation is not available to

illegitimate descendants of legitimate children in the inheritance of a legitimate grandparent.

70 Diaz vs. IAC GR #L-66574, Feb. 21, 1990

71

Suntay v. Suntay GR # 183053, June 16, 2010

Order of preference is not absolute in the designation of administrator. Selection of an administrator lies in the sound discretion of the trial court. The attendant facts and circumstances of this case necessitate, at the least, a joint administration by both respondent and petitioner, even if the latter is an illegitimate child.

Surviving Spouse

72Verdad vs. CA GR# 109972, April. 29,

1996 A right of redemption arose in favor of a daughter-in-law who was survived by his husband, making her a co-owner in the inheritance of his mother-in-law

73Cabales v. CA GR# 162421, Aug. 31,

2007mother who if duly authorized by the courts, could validly sell his share in the property

Collateral Relatives

74

Heirs of Uriarte vs. CA GR# 116775, Jan. 22, 1998 The determination of whether the relationship is of the full or half-blood is important only to determine the extent of the share of the survivors, since being half-blood is immaterial to determine his right to the inheritance as a 3rd degree relative.

75Gonzales vs. CA GR# 117740, Oct. 30,

1998 Brothers & sisters are precluded from inheriting the estate of their brother, when decedent have an illegitimate child.

The State

76Republic vs. CA GR# 143483, Jan. 31, 2002 Private respondent's belated assertion of her right over

the escheated properties militates against recovery.Provisions Common to Testate and Intestate Succession [Arts. 1015 -1105]Right of Accretion

77

Parish Priest of Victoria, Tarlac vs. Rigor

GR# L-22036, April 30, 1979

In order to be capacitated to inherit, the heir, devisee or legatee must be living at the moment the succession opens, except in case of representation, when it is proper

Acceptance and Repudiation of Inheritance

78Guy v. CA GR# 163707, Sept. 15,

2006Executors and Administrators; Collation & Donation [725-773]; See also Art. 1448 NCC

79Zaragoza vs. CA GR# 106401, Sept. 29,

2000partition inter vivos may be done for as long as legitimes are not prejudiced & they should be collated in the determination of legitimes

80

Nazareno vs. CA GR# 138842, Oct. 18, 2000

There is also an implied trust when a donation is made to a person but it appears that although the legal estate is transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part thereof. – this is subject to collation

81

Vizconde vs. CA GR# 118449, Feb. 11, 1998

Collation of the Parañaque property is improper for, to repeat, collation covers only properties gratuitously given by the decedent during his lifetime to his compulsory heirs

82

Ty v. Ty GR# 165696, April. 30, 2008

ild, legitimate or illegitimate, of one paying the price of the sale, NO TRUST IS IMPLIED BY LAW, it being disputably presumed that there is a gift in favor of the child. However, here there is no proof that the properties are really donated to the deceased son.

83

Arellano v. Pascual GR # 189776, Dec. 15, 2010

Rule on collation is applicable only when there is compulsory heir. Siblings are not compulsory heirs. Decedent not having left any compulsory heir who is entitled to any legitime, he was at liberty to donate all his properties, even if nothing was left for his siblings-collateral relatives to inherit.

Partition and Distribution of the Estate; Effect of Partition; Rescission 0061nd Nullity of Partition

84

Noceda vs. CA GR# 119730, Sept. 2, 1999 There is no co-ownership where portion owned is correctly determined and identifiable, though not technically described, or that said portions are still embraced in one and the same certificate of title does not make said portions less determinable or identifiable.

85Silverio v. CA

GR# 178933, Sept. 16, 2009

Until the estate is partitioned, each heir only has an inchoate right to the properties of the estate, such that no heir may lay claim on a particular property.

86

Avelino vs. CA GR# 115181, March 31, 2000

When a person dies without leaving pending obligations, his heirs, are not required to submit the property for judicial administration, nor apply for the appointment of an administrator by the court.

87Zaragoza vs. CA GR# 106401, Sept. 29,

2000See above

88

Arrogante v. Deliarte

GR# 152132, July 24, 2007 private deed of sale does not equate to an oral partition by an act inter vivos. Besides, partition of property representing future inheritance cannot be made effective during the lifetime of its owner

89

Orendain Jr. vs. Rodriguez GR# 168660/ June 30, 2009

testatrix’s large landholdings cannot be subjected indefinitely to a trust because the ownership thereof would then effectively remain with her even in the afterlife.

90Alfonso v. Andres GR # 166236, July 29,

2010Poverty is not a justification for delaying a case

Reyes vs Enriquez G.R. No. 162956, April 10, 2008 

Facts: Petitioners claim to be the lawful heirs of Dionisia Reyes who co-owned the subject parcel of land located in Talisay, Cebu, with Anacleto Cabrera. On the other hand respondents, claim to be the heirs of Anacleto Cabrera, as husband and daughter of Anacleto's daughter. 

On June 19, 1999, petitioners Peter and Deborah Ann Enriquez, sold 200 sq. m. out of the 1051 sq. m. for P200,000.00 to Spouses Dionisio and Catalina Fernandez (Spouses Fernandez), also their co-respondents in this case. When Spouses Fernandez, tried to register their share in the subject land, they discovered that certain documents prevent

them from doing so: (1) Affidavit by Anacleto Cabrera dated March 16, 1957 stating that his share in Lot No. 1851, the subject property, is approximately 369 sq. m.; (2) Affidavit by Dionisia Reyes dated July 13, 1929 stating that Anacleto only owned ¼ of Lot No. 1851, while 302.55 sq. m. belongs to Dionisia and the rest of the property is co-owned by Nicolasa Bacalso, Juan Reyes, Florentino Reyes and Maximiano Dico. 

Alleging that the documents are fraudulent and fictitious, the respondents filed a complaint for annulment or nullification of the aforementioned documents and for damages. They likewise prayed for the "repartition and resubdivision" of the subject property. 

The RTC dismissed the case, but upon appeal it was reversed, hence the petition. 

Issue: Whether or not the respondents have to institute a special proceeding to determine their status as heirs of Anacleto Cabrera before they can file an ordinary civil action to nullify the affidavits of Anacleto Cabrera and Dionisia Reyes. 

Ruling: Yes, the determination of who are the legal heirs of the deceased couple must be made in the proper special proceedings in court, and not in an ordinary suit for

reconveyance of property. This must take precedence over the action for reconveyance. The respondents have yet to substantiate their claim as the legal heirs of Anacleto Cabrera who are, thus, entitled to the subject property. 

The Rules of Court provide that only a real party in interest is allowed to prosecute and defend an action in court. A real party in interest is the one who stands to be benefited or injured by the judgment in the suit or the one entitled to the avails thereof. Such interest, to be considered a real interest, must be one which is present and substantial, as distinguished from a mere expectancy, or a future, contingent, subordinate or consequential interest.

[G.R. No. 63145. October 5, 1999]VENTURA vs.. HON. MILITANTE

FACTS:Private respondent filed a Complaint for a Sum of Money and Damages against petitioner. During the lifetimeof Carlos Ngo he was indebted with the plaintiff (hereinpriv. resp.). Said obligation is already due and demandableand the defendant thru Ms. Ventura who is ostensiblytaking care of the properties/estate of deceased CarlosNgo, refused, failed and neglected and still continues torefuse, fail and neglect to pay despite repeated demands.Petitioner moved to dismiss the foregoing complaint on theground that “the estate of Carlos Ngo has no legalpersonality,” the same being “neither a natural nor legalperson in contemplation of law.”In his Opposition to Motion to Dismiss, petitioner insistedthat since “the money claim subject of this case actuallyrepresents the costs of automotive spareparts/replacements contracted by deceased Carlos Ngoduring his lifetime for the benefit/business of the family x xx the conjugal partnership x x x shall be accountable for the payment thereof.” Subsequently, private respondent'scounsel manifested that he is poised to “amend thecomplaint in order to state the correct party defendant thathe intends to sue in this case”. The public respondentgave private respondent fifteen (15) days to make the Petitioner filed a Motion for Reconsideration of theorder of public respondent permitting privaterespondent to amend his complaint. Public respondentissued the herein assailed order that the indebtednesswas incurred by Carlos Ngo and defendant SulpiciaVentura and since Carlos Ngo is now dead that will notpreclude the plaintiff from filing a case against theliving defendant, Sulpicia Ventura.Petitioner scurried to this Court praying that theforegoing order of the public respondent be set asideand the amended complaint of private respondent.

RULING:We grant the petition. The original complaintof petitioner named the “estate of Carlos Ngo asrepresented by surviving spouse Ms. Sulpicia Ventura”as the defendant. Petitioner moved to dismiss thesame on the ground that the defendant as named inthe complaint had no legal personality. We agree.Neither a dead person nor his estate may be a partyplaintiff in a court action. A deceased person does nothave such legal entity as is necessary to bring actionso much so that a motion to substitute cannot lie andshould be denied by the court. An action begun by adecedent's estate cannot be said to have been begunby a legal person, since an estate is not a legal entity;such an action is a nullity and a motion to amend theparty plaintiff will not likewise lie, there being nothingbefore the court to amend. Considering that capacityto be sued is a correlative of the capacity to sue, to thesame extent, a decedent does not have the capacity tobe sued and may not be named a party defendant in acourt action.It is clear that the original complaint of privaterespondent against the estate of Carlos Ngo was a suitagainst Carlos Ngo himself who was already dead atthe time of the filing of said complaint. At that time,and this, private respondent admitted, no specialproceeding to settle his estate had been filed in court.As such, the trial court did not acquire jurisdiction over

0

either the deceased Carlos Ngo or his estate.To cure this fatal defect, private respondent amendedhis original complaint. In his amended complaint,private respondent deleted the estate of Carlos Ngoand named petitioner as the defendant. Whenpetitioner, in her comment to the amended complaint,reasoned that the conjugal partnership of gainsbetween her and Carlos Ngo was terminated upon thelatter's death and that the debt which he contracted,assuming it was a charge against the conjugalproperty, could only be paid after an inventory is madein the appropriate testate or intestate proceeding,private respondent simply reiterated his demand thatpetitioner pay her husband's debt which, he insisted,redounded to the benefit of everyone in her family.It is true that amendments to pleadings are liberallyallowed in furtherance of justice, in order that every casemay so far as possible be determined on its real facts, andin order to speed the trial of causes or prevent the circuitryof action and unnecessary expense. But amendmentscannot be allowed so as to confer jurisdiction upon a courtthat never acquired it in the first place. When it is evidentthat the court has no jurisdiction over the person and thesubject matter and that the pleading is so fatally defectiveas not to be susceptible of amendment, or that to permitsuch amendment would radically alter the theory and thenature of the action, then the court should refuse theamendment of the defective pleading and order thedismissal of the case.Moreover, as correctly argued by petitioner, the conjugalpartnership terminates upon the death of either spouse.After the death of one of the spouses, in case it isnecessary to sell any portion of the conjugal property inorder to pay outstanding obligations of the partnership,such sale must be made in the manner and with theformalities established by the Rules of Court for the sale of the property of deceased persons. Where a complaint isbrought against the surviving spouse for the recovery of anindebtedness chargeable against said conjugal property,any judgment obtained thereby is void. The proper actionshould be in the form of a claim to be filed in the testate or intestate proceedings of the deceased spouse.In many cases as in the instant one, even after the deathof one of the spouses, there is no liquidation of theconjugal partnership. This does not mean, however, thatthe conjugal partnership continues. And privaterespondent cannot be said to have no remedy. Under Sec. 6, Rule 78 of the Revised Rules of Court, he mayapply in court for letters of administration in his capacity asa principal creditor of the deceased Carlos Ngo if after thirty (30) days from his death, petitioner failed to apply for administration or request that administration be granted tosome other person.

MEMORACION Z. CRUZ, represented by EDGARDO Z. CRUZ, Petitioner, vs. OSWALDO Z. CRUZ, Respondent.

G.R. No. 173292 September 1, 2010

FACTS:Memoracion Z. Cruz filed with the Regional Trial Court in Manila a Complaint against her son, defendant-appellee Oswaldo Z. Cruz, for "Annulment of Sale, Reconveyance and Damages."

Memoracion claimed that during her union with her common-law husband (deceased) Architect Guido M. Cruz, she acquired a parcel of land located at Tabora corner Limay Streets, Bo. Obrero, Tondo Manila; that the said lot was registered in her name under TCT No. 63467 at the Register of Deeds of Manila; she discovered that the title to the said property was transferred by appellee and the latter’s wife in their names in August 1991 under TCT No. 0-199377 by virtue of a Deed of Sale dated February 12, 1973; that the said deed was executed through fraud, forgery, misrepresentation and simulation, hence, null and void; that she, with the help of her husband’s relatives, asked appellee to settle the problem; that despite repeated pleas and demands, appellee refused to reconvey to her the said property; that she filed a complaint

against appellee before the office of the Barangay having jurisdiction over the subject property; and that since the matter was unsettled, the barangay x x x issued x x x a certification to file [an] action in court, now the subject of controversy.

After Memoracion x x x finished presenting her evidence in chief, she died on October 30, 1996. Through a Manifestation, Memoracion’s counsel, Atty. Roberto T. Neri, notified the trial court on January 13, 1997 of the fact of such death, evidenced by a certificate thereof. For his part, appellee filed a Motion to Dismiss on the grounds that (1) the plaintiff’s reconveyance action is a personal action which does not survive a party’s death, pursuant to Section 21, Rule 3 of the Revised Rules of Court, and (2) to allow the case to continue would result in legal absurdity whereby one heir is representing the defendant [and is a] co-plaintiff in this case.

On June 2, 1997, the trial court issued the appealed Order in a disposition that reads: "Wherefore, in view of the foregoing, this case is ordered dismissed without prejudice to the prosecution thereof in the proper estate proceedings." Memoracion’s son-heir, Edgardo Z. Cruz, manifested to the trial court that he is retaining the services of Atty. Neri for the plaintiff. Simultaneously, Atty. Neri filed a Motion for Reconsideration of the June 2, 1997 Order. However, the said motion was subsequently denied by Acting Presiding Judge Cielito N. Mindaro-Grulla [on October 31, 2000].

Thereafter, Edgardo Cruz, as an heir of Memoracion Cruz, filed a notice of appeal in behalf of the deceased plaintiff, signed by Atty. Neri, but the appeal was dismissed by Judge Mindaro-Grulla, [stating that] the proper remedy being certiorari under Rule 65 of the Rules of Court. On appellant’s motion for reconsideration, Judge Lucia Pena Purugganan granted the same, stating that the remedy under the circumstances is ordinary appeal.

The Issues

The issues for resolution in this case are:

1. Whether the Court of Appeals erred in ruling that Memoracion Z. Cruz’s Petition for Annulment of Deed of Sale, Reconveyance and Damages is a purely personal action which did not survive her death; and

2. Whether the Court of Appeals erred in affirming with modification the RTC Order dismissing the Petition for Annulment of Deed of Sale, Reconveyance and Damages.

The Court’s Ruling

We find the appeal meritorious.

The Petition for Annulment of Sale, Reconveyance and Damages survived the death of petitioner

The criterion for determining whether an action survives the death of a petitioner was elucidated in Bonilla v. Barcena,7 to wit:

The question as to whether an action survives or not depends on the nature of the action and the damage sued for. In the causes of action which survive, the wrong complained [of] affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive, the injury complained of is to the person, the property and rights of property affected being incidental.8

If the case affects primarily and principally property and property rights, then it survives the death of the plaintiff or petitioner. In Sumaljag v. Literato,9 we held that a Petition for Declaration of Nullity of Deed of Sale of Real Property is one

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relating to property and property rights, and therefore, survives the death of the petitioner. Accordingly, the instant case for annulment of sale of real property merits survival despite the death of petitioner Memoracion Z. Cruz.

The CA erred in affirming RTC’s dismissal of the Petition for Annulment of Deed of Sale, Reconveyance and Damages

When a party dies during the pendency of a case, Section 16, Rule 3 of the 1997 Revised Rules of Civil Procedure necessarily applies, viz:

Sec. 16. Death of party; duty of counsel. - Whenever a party to a pending action dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of the fact thereof, and to give the name and address of his legal representative or representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs.

The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail to appear within the specified period, the court may order the opposing party, within a specified time, to procure the appointment of an executor or administrator for the estate of the deceased and the latter shall immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if defrayed by the opposing party, may be recovered as costs.

The foregoing section is a revision of Section 17, Rule 3 of the old Rules of Court:

SEC. 17. Death of party. - After a party dies and the claim is not thereby extinguished, the court shall order, upon proper notice, the legal representative of the deceased to appear and to be substituted for the deceased, within a period of thirty (30) days, or within such time as may be granted. If the legal representative fails to appear within said time, the court may order the opposing party to procure the appointment of a legal representative of the deceased within a time to be specified by the court, and the representative shall immediately appear for and on behalf of the interest of the deceased. The court charges involved in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint guardian ad litem for the minor heirs.

If the action survives despite death of a party, it is the duty of the deceased’s counsel to inform the court of such death, and to give the names and addresses of the deceased’s legal representatives. The deceased may be substituted by his heirs in the pending action. As explained in Bonilla:

x x x Article 777 of the Civil Code provides "that the rights to the succession are transmitted from the moment of the death of the decedent." From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of their rights thereto except by the methods provided for by law. The moment of death is the determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or contingent. The right of the heirs

to the property of the deceased vests in them even before judicial declaration of their being heirs in the testate or intestate proceedings. When [plaintiff], therefore, died[,] her claim or right to the parcels of land x x x was not extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. There is, therefore, no reason for the respondent Court not to allow their substitution as parties in interest for the deceased plaintiff.10

If no legal representative is named by the counsel of the deceased, or the legal representative fails to appear within a specified period, it is the duty of the court where the case is pending to order the opposing party to procure the appointment of an executor or administrator for the estate of the deceased. The reason for this rule is to protect all concerned who may be affected by the intervening death, particularly the deceased and his estate.111avvphi1

In the instant case, petitioner (plaintiff) Memoracion Z. Cruz died on 30 October 1996. Her counsel, Atty. Roberto T. Neri, notified the trial court of such death on 13 January 1997.

Judge Sumaljag v. Literato GR 149787 Jun 18, 2008

F: J. Sumaljag seeks to be substituted because he is the transferee of the lot of deceased. Pending case is for declaration of nullity of deed of sale and lease contractH: Req'ts in R3.16:Rule applies when pending action not extinguished by deathLegal reps: executor, administrator, guardian - constituted to take charge of the estateDuty of counsel is to inform court of fact of death and give names of the heirs-here: death cert shows that deceased died. So siblings were the the proper legal reps...*stranger things happen in real life. E.g. Plaintiff passed away. About 30 days, his lawyer filed Motion for Substitution wherein instead of naming the wife and children of dead plaintiff, he named the person which was supposedly now the owner of the land . So 2 sections on land: RULE 3, sections 16 and 19 - are involved...counsel should have notified the court of the transfer when the client was still alive ? But the transferree is not really required to be a party in the case. Even if he is not included, he would be bound. But in this case, the court insisted that even if the transferree is now present, the transferor should be represented by his own heirs who would own the property in case the transfer is void...-What ma'am did was to OPPOSE THE SUBSTITUTION!

DBP VS. GAGARANI September 17, 2008

The spouses Dionesio and Matea S. Asok owned several parcels of land. Upon their death on September 14, 1973 and February 22, 1982, respectively, their eleven children inherited the properties. One of the lands inherited was a lot covered by Original Certificate of Title (OCT) No. P-4272, a free patent issued on July 19, 1967, located at Pagawan, Manticao, Misamis Oriental with an area of 39,552 sq. m.[4] Pursuant to the extrajudicial settlement of the estate with quitclaim executed by the spouses’ children, the subject property was inherited by Denison Asok (Asok). As a result, OCT No. P-4272 was cancelled and Transfer Certificate of Title (TCT) No. T-9626 was issued and registered in his name on November 17, 1987.[5] On August 31, 1989, Asok and his wife, respondent Ella Gagarani Asok, borrowed P100,000 from petitioner Development Bank of the Philippines, a government financial institution created and operating under EO 81,[6] as amended by RA 8523. They mortgaged the subject lot as collateral to guarantee payment of the loan. On due date, however, they

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failed to pay the loan and the mortgage was extrajudicially foreclosed pursuant to Act 3135.[7] Petitioner emerged as the highest bidder with a bid of P163,297.[8] On November 28, 1991, a certificate of sale was issued in favor of petitioner. This was registered on December 24, 1992.[9] On March 25, 1998, petitioner’s ownership over the property was consolidated and TCT No. T-27172 was issued in its name.[10] Meanwhile, Asok died on October 24, 1993 and was succeeded by his surviving spouse and children (respondents).[11] On May 15, 1998, respondents filed a complaint for repurchase against petitioner in the Regional Trial Court (RTC) of Initao, Misamis Oriental, Branch 44, docketed as Civil Case No. 98-68. On July 3, 1998, they filed an amended complaint on learning that TCT No. T-9626 had been cancelled by TCT No. T-27172 issued in the name of petitioner. They invoked their right to repurchase the property under Sec. 119 of CA 141, as amended:[12] Sec. 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from date of the conveyance. In a decision dated January 7, 1999, the RTC dismissed the complaint. Reconsideration was denied on February 3, 1999.[13] It ruled that the one-year period for redemption should be reckoned from the date of sale, i.e., November 28, 1991. Then the five-year period provided under Sec. 119 of CA 141 should be counted from the expiration of the redemption period, i.e., November 28, 1992. Therefore, respondents had until November 28, 1997 to exercise their right to repurchase. However, the complaint was filed on May 15, 1998 which was beyond the prescribed period.[14] Aggrieved, respondents appealed to the CA. In a decision dated December 14, 2005, the CA reversed and set aside the RTC decision. Reconsideration was denied in a resolution dated March 28, 2006. It held that the period of redemption started from the date of registration of the certificate of sale, i.e., December 24, 1992, and not from the date of sale. Thus, respondents had until December 24, 1998 to repurchase the property and the complaint was seasonably filed.[15] Hence this petition. Petitioner raises the following issues: (1) whether Sec. 119 of CA 141 is applicable in this case; (2) whether respondents are the legal heirs of the patentees and (3) whether the right to repurchase has already prescribed.

The petition lacks merit. Petitioner contends that respondents cannot claim the right under Sec. 119 which covers homesteads and free patents because the free patent issued to Asok’s parents had already been cancelled and a new TCT had in fact been issued to him. Thus, the property mortgaged to it was no longer covered by a free patent but by a TCT.[16] This contention deserves scant consideration. The plain intent of Sec. 119 is to give the homesteader or patentee every chance to preserve and keep in the family the land that the State has gratuitously given him as a reward for his labor in cleaning, developing and cultivating it.[17] Hence, the fact that the land had been inherited by the patentees’ son (and a new title in his name issued) does not bring it outside

the purview of Sec. 119. In fact, the policy behind the law is fulfilled because the land remains in the family of the patentee. As we explained in Ferrer v. Mangente:[18] The applicant for a homestead is to be given all the inducement that the law offers and is entitled to its full protection. Its blessings, however, do not stop with him. This is particularly so in this case as the appellee is the son of the deceased. There is no question then as to his status of being a legal heir. The policy of the law is not difficult to understand. The incentive for a pioneer to venture into developing virgin land becomes more attractive if he is assured that his effort will not go for naught should perchance his life be cut short. This is merely a recognition of how closely bound parents and children are in a Filipino family. Logic, the sense of fitness and of right, as well as pragmatic considerations thus call for continued adherence to the policy that not the individual applicant alone but those so closely related to him as are entitled to legal succession may take full advantage of the benefits the law confers.[19] Having ruled that Sec. 119 is applicable to this case, we now go to the next issue: are respondents the “legal heirs” contemplated in the provision? Petitioner argues that respondents are not the legal heirs of the patentees because respondents are merely their daughter-in-law and grandchildren. We disagree. In line with the rationale behind Sec. 119, we reject a restricted definition of legal heirs. It is used in a broad sense and the law makes no distinctions.[20] In Madarcos v. de la Merced,[21] we held that: The term “legal heirs” is used in Section 119 in a generic sense. It is broad enough to cover any person who is called to the succession either by provision of a will or by operation of law. Thus, legal heirs include both testate and intestate heirs depending upon whether succession is by the will of the testator or by law. Legal heirs are not necessarily compulsory heirs but they may be so if the law reserves a legitime for them. xxx xxx xxx Verily, petitioners are legal heirs. Having been decreed under the rules on intestacy as entitled to succeed to the estate of the Catain spouses due to the absence of compulsory heirs, they now step into the shoes of the decedents. They should be considered as among the legal heirs contemplated by Section 119 as entitled to redeem the homestead. The above interpretation of "legal heirs" as contra-distinguished from the restrictive construction given it by the lower court is more in keeping with the salutary purpose behind the enactment of Section 119 and the jurisprudence laid down on the matter. Indeed, it is not far-fetched to arrive at a more liberal conclusion if the section is analyzed in accordance with its purpose xxxx[22] Respondents inherited the property from Asok, their husband and father, who in turn inherited it from his parents. Respondent Ella Gagarani Asok, as daughter-in-law of the patentees, can be considered as among the legal heirs who can repurchase the land in accordance with Salenillas v. CA.[23] In that case, we allowed the daughter and son-in-law of the patentees to repurchase the property because this would be “more in keeping with the spirit of the law. We have time and again said that between two statutory interpretations, that which better serves the purpose of the law should prevail.”[24] Furthermore, the law must be liberally construed in order to carry out its purpose.[25] Finally, petitioner asserts that even if respondents could be considered as being entitled to the right under Sec. 119, this

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had already prescribed because the period should be counted from the date of conveyance which means the date of sale and not the date of registration of the certificate of sale. This argument lacks merit. This is far from a novel issue. It was already resolved in Rural Bank of Davao City, Inc. v. CA:[26] Thus, the rules on redemption in the case of an extrajudicial foreclosure of land acquired under free patent or homestead statutes may be summarized as follows: xxx If the land is mortgaged to parties other than rural banks, the mortgagor may redeem the property within one (1) year from the registration of the certificate of sale pursuant to Act No. 3135. If he fails to do so, he or his heirs may repurchase the property within five (5) years from the expiration of the redemption period also pursuant to Section 119 of the Public Land Act.[27] There is no dispute that in extrajudicial foreclosures under Act 3135, the debtor or his or her successors-in-interest may redeem the property within one year. This redemption period should be reckoned from the date of registration of the certificate of sale.[28] The five-year period fixed in Sec. 119 begins to run from the expiration of the one-year redemption period.[29] Here, the certificate of sale was registered on December 24, 1992 and the one-year redemption period expired on December 24, 1993. Reckoned from that day, respondents had a five-year period, or until December 24, 1998, to exercise their right to repurchase under Sec. 119 of CA 141. Consequently, the CA was correct in holding that the complaint filed on May 15, 1998 was on time.

G.R. No. 189776               December 15, 2010

AMELIA P. ARELLANO, represented by her duly appointed guardians, AGNES P. ARELLANO and NONA P. ARELLANO vs. FRANCISCO PASCUAL and MIGUEL PASCUAL

Angel N. Pascual Jr. died intestate on January 2, 1999 leaving as heirs his siblings, namely: petitioner Amelia P. Arellano who is represented by her daughters Agnes P. Arellano (Agnes) and Nona P. Arellano, and respondents Francisco Pascual and Miguel N. Pascual.

In a petition for "Judicial Settlement of Intestate Estate and Issuance of Letters of Administration" filed by respondents on April 28, 2000, respondents alleged, inter alia, that a parcel of land (the donated property) located in Teresa Village, Makati, which was, by Deed of Donation, transferred by the decedent to petitioner the validity of which donation respondents assailed, "may be considered as an advance legitime" of petitioner.

Respecting the donated property, now covered in the name of petitioner by Transfer Certificate of Title No. 181889 of the Register of Deeds of Makati, which respondents assailed but which they, in any event, posited that it "may be considered as an advance legitime" to petitioner, the trial court, acting as probate court, held that it was precluded from determining the validity of the donation.

HELD: The term collation has two distinct concepts: first, it is a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate; and second, it is the return to the hereditary estate of property disposed of by lucrative title by the testator during his lifetime.

The purposes of collation are to secure equality among the compulsory heirs in so far as is possible, and to determine the free portion, after finding the legitime, so that inofficious donations may be reduced.

Collation takes place when there are compulsory heirs, one of its purposes being to determine the legitime and the free portion. If there is no compulsory heir, there is no legitime to be safeguarded.

The records do not show that the decedent left any primary, secondary, or concurring compulsory heirs. He was only survived by his siblings, who are his collateral relatives and, therefore, are not entitled to any legitime – that part of the testator’s property which he cannot dispose of because the law has reserved it for compulsory heirs.

The compulsory heirs may be classified into (1) primary, (2) secondary, and (3) concurring. The primary compulsory heirs are those who have precedence over and exclude other compulsory heirs; legitimate children and descendants are primary compulsory heirs. The secondary compulsory heirs are those who succeed only in the absence of the primary heirs; the legitimate parents and ascendants are secondary compulsory heirs. The concurring compulsory heirs are those who succeed together with the primary or the secondary compulsory heirs; the illegitimate children, and the surviving spouse are concurring compulsory heirs.

The decedent not having left any compulsory heir who is entitled to any legitime, he was at liberty to donate all his properties, even if nothing was left for his siblings-collateral relatives to inherit. His donation to petitioner, assuming that it was valid, is deemed as donation made to a "stranger," chargeable against the free portion of the estate. There being no compulsory heir, however, the donated property is not subject to collation.

The decedent’s remaining estate should thus be partitioned equally among his heirs-siblings-collateral relatives, herein petitioner and respondents, pursuant to the provisions of the Civil Code, viz:

Art. 1003. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance with the following articles.

Art. 1004. Should the only survivors be brothers and sisters of the full blood, they shall inherit in equal shares.

REPUBLIC VS. MARCOS-MANOTOC

The Marcos siblings are compulsory heirs.To reiterate, in its third Amended Complaint, petitioner prays that the Marcos respondents be made to (1) pay for the value of the alleged ill-gotten wealth with interest from the date of acquisition; (2) render a complete accounting and inventory of all funds and other pieces of property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest therein; (3) pay actual damages estimated at P200 billion and additional actual damages to reimburse expenses for the recovery of the alleged ill-gotten wealth estimated at P250 million or in such amount as may be proven during trial; (4) pay moral damages amounting to P50 billion; (5) pay temperate and nominal damages, as well as attorney’s fees and litigation expenses in an amount to be proven during the trial; (6) pay exemplary damages in the amount of P1 billion; and (7) pay treble judicial costs.[39]

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It must be stressed that we are faced with exceptional circumstances, given the nature and the extent of the properties involved in the case pending with the Sandiganbayan. It bears emphasis that the Complaint is one for the reversion, the reconveyance, the restitution and the accounting of alleged ill-gotten wealth and the payment of damages. Based on the allegations of the Complaint, the court is charged with the task of (1) determining the properties in the Marcos estate that constitute the alleged ill-gotten wealth; (2) tracing where these properties are; (3) issuing the appropriate orders for the accounting, the recovery, and the payment of these properties; and, finally, (4) determining if the award of damages is proper.

Since the pending case before the Sandiganbayan survives the death of Ferdinand E. Marcos, it is imperative therefore that the estate be duly represented. The purpose behind this rule is the protection of the right to due process of every party to a litigation who may be affected by the intervening death. The deceased litigant is himself protected, as he continues to be properly represented in the suit through the duly appointed legal representative of his estate.[40] On that note, we take judicial notice of the probate proceedings regarding the will of Ferdinand E. Marcos. In Republic of the Philippines v. Marcos II,[41] we upheld the grant by the Regional Trial Court (RTC) of letters testamentary in solidum to Ferdinand R. Marcos, Jr. and Imelda Romualdez-Marcos as executors of the last will and testament of the late Ferdinand E. Marcos.Unless the executors of the Marcos estate or the heirs are ready to waive in favor of the state their right to defend or protect the estate or those properties found to be ill-gotten in their possession, control or ownership, then they may not be dropped as defendants in the civil case pending before the Sandiganbayan.Rule 3, Sec. 7 of the Rules of Court defines indispensable parties as those parties-in-interest without whom there can be no final determination of an action. They are those parties who possess such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence. Parties are indispensable if their interest in the subject matter of the suit and in the relief sought is inextricably intertwined with that of the other parties.[42]

In order to reach a final determination of the matters concerning the estate of Ferdinand E. Marcos – that is, the accounting and the recovery of ill-gotten wealth – the present case must be maintained against Imelda Marcos and herein respondent Ferdinand “Bongbong” R. Marcos, Jr., as executors of the Marcos estate pursuant to Sec. 1 of Rule 87 of the Rules of Court. According to this provision, actions may be commenced to recover from the estate, real or personal property, or an interest therein, or to enforce a lien thereon; and actions to recover damages for an injury to person or property, real or personal, may be commenced against the executors. We also hold that the action must likewise be maintained against Imee Marcos-Manotoc and Irene Marcos-Araneta on the basis of the non-exhaustive list attached as Annex “A” to the Third Amended Complaint, which states that the listed properties therein were owned by Ferdinand and Imelda Marcos and their immediate family.[43] It is only during the trial of Civil Case No. 0002 before the Sandiganbayan that there could be a determination of whether these properties are indeed ill-gotten or were legitimately acquired by respondents and their predecessors. Thus, while it was not proven that respondents conspired in accumulating ill-gotten wealth, they may be in possession, ownership or control of such ill-gotten properties or the proceeds thereof as heirs of the Marcos couple. Thus, their lack of participation in any illegal act does not remove the character of the property as ill-gotten and, therefore, as rightfully belonging to the State.

Secondly, under the rules of succession, the heirs instantaneously became co-owners of the Marcos properties upon the death of the President. The property rights and obligations to the extent of the value of the inheritance of a person are transmitted to another through the decedent’s death.[44] In this concept, nothing prevents the heirs from exercising their right to transfer or dispose of the properties that constitute their legitimes, even absent their declaration or absent the partition or the distribution of the estate. In Jakosalem v. Rafols,[45] we said:

Article 440 of the Civil Code provides that “the possession of hereditary property is deemed to be transmitted to the heir without interruption from the instant of the death of the decedent, in case the inheritance be accepted.” And Manresa with reason states that upon the death of a person, each of his heirs “becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the coowners of the estate while it remains undivided.” (3 Manresa, 357; Alcala vs. Alcala, 35 Phil. 679.) And according to article 399 of the Civil Code, every part owner may assign or mortgage his part in the common property, and the effect of such assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon the dissolution of the community. Hence, in the case of Ramirez vs. Bautista, 14 Phil. 528, where some of the heirs, without the concurrence of the others, sold a property left by their deceased father, this Court, speaking thru its then Chief Justice Cayetano Arellano, said that the sale was valid, but that the effect thereof was limited to the share which may be allotted to the vendors upon the partition of the estate. (Emphasis supplied) Lastly, petitioner’s prayer in its Third Amended Complaint directly refers to herein respondents, to wit:

1. AS TO THE FIRST SECOND AND THIRD CAUSES OF ACTION – To return and reconvey to Plaintiff all funds and other property acquired by Defendants during their incumbency as public officers, which funds and other property are manifestly out of proportion to their salaries, other lawful income and income from legitimately acquired property which Defendants have failed to establish as having been, in fact, lawfully acquired by them, alternatively, to solidarily pay Plaintiff the value thereof with interest thereon from the date of acquisition until full payment.

2. AS TO THE FOURTH CAUSE OF ACTION – to individually render to this Honorable Court a complete accounting and inventory, subject to evaluation of Court-appointed assessors, of all funds and other property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest in such funds and other property. (Emphasis supplied)

In sum, the Marcos siblings are maintained as respondents, because (1) the action pending before the Sandiganbayan is one that survives death, and, therefore, the rights to the estate must be duly protected; (2) they allegedly control, possess or own ill-gotten wealth, though their direct involvement in accumulating or acquiring such wealth may not have been proven.

DKC Holdings Corp. v. CA

- DKC entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome, whereby DKC was given the option to lease or lease with purchase a land belonging to Encarnacion, which option must be exercised within 2 years from the signing of the Contract.- In turn, DKC undertook to pay Php 3,000 a month for the reservation of its option.- DKC regularly paid the monthly Php 3,000 until Encarnacion’s death. Thereafter, DKC coursed its payment to

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Victor, the son and sole heir of Encarnacion. However, Victor refused to accept these payments.- Meanwhile, Victor executed an Affidavit of Self-Adjudication over all the properties of Encarnacion, including the subject lot. Thus, a new TCT was issued in the name of Victor.- Later, DKC gave notice to Victor that it was exercising its option to lease the property tendering the amount of Php 15,000 as rent. - Again, Victor refused to accept the payment and to surrender passion of the property.- DKC thus opened a savings account in the name of Victor and deposited therein the rental fee.- DKC also tried to register and annotate the Contract on the title of Victor but the Register of Deeds refused to register or annotate the same.- Thus, DKC filed a complaint for specific performance and damages.- In the course of the proceedings, a certain Lozano, who claimed that he was and has been a tenant-tiller of the lot for 45 years, filed a Motion for Intervention. - The RTC denied Lozano’s Motion and dismissed the complaint filed by DKC. - Whether the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with DKC was terminated upon her death or whether it binds her sole heir, Victor, even after her demise.- The SC held that Victor is bound by the Contract of Lease with Option to Buy.- Article 1311 of the NCC provides: Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law.- In this case, there is neither contractual stipulation nor legal provision making the rights and obligation under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature, transmissible.- Where the service or act is of such a character that it may be performed by another, or where the contract, by its terms, shows the performance by others was contemplated, death does not terminate the contract or excuse nonperformance.- In this case, there is no personal act required from the late Encarnacion. Rather, the obligation of Encarnacion to deliver possession of the property may very well be performed by Victor.- Also, the subject matter of the contract is a lease, a property right. The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased.- Since DKC exercised its option in accordance with the contract, the SC held that Victor has the obligation to surrender possession of and lease of premises for 6 years. However, SC held that the issue of tenancy should be ventilated in another proceeding.- The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law.

- Where acts stipulated in a contract require the exercise of special knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of personal nature, and terminates on the death of the party who is required to render such service.- There is privity of interest between an heir and his deceased predecessor – he only succeeds to what rights his predecessor had and what is valid and binding against the latter is also valid and binding against the former.

- The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.

YAPTINCHAY VS. DEL ROSARIO

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court assailing the Orders dated October 25, 1995 and February 23, 1996, respectively, of Branch 21 of the Regional Trial Court in Imus, Cavite (“RTC”).

Petitioners claim that they are the legal heirs of the late Guido and Isabel Yaptinchay, the owners-claimants of Lot No. 1131 with an area of 520,638 and Lot No. 1132 with an area of 96,235 square meters, more or less situated in Bancal, Carmona, Cavite. On March 17, 1994, petitioners executed an Extra-Judicial Settlement of the estate of the deceased Guido and Isabel Yaptinchay.

On August 26, 1994, petitioners discovered that a portion, if not all, of the aforesaid properties were titled in the name of respondent Golden Bay Realty and Development Corporation (“Golden Bay”) under Transfer Certificate of Title Nos. (“TCT”) 225254 and 225255. With the discovery of what happened to subject parcels of land, petitioners filed a complaint for ANNULMENT and/or DECLARATION OF NULLITY OF TCT NO. 493363, 493364, 493665, 493366, 493367; and its Derivatives; As Alternative Reconveyance of Realty WITH A PRAYER FOR A WRIT OF PRELIMINARY INJUNCTION and/or RESTRAINING ORDER WITH DAMAGES, docketed as RTC BCV-94-127 before Branch 21 of the Regional Trial Court in Imus, Cavite.

Upon learning that “Golden Bay” sold portions of the parcels of land in question, petitioners filed with the “RTC” an Amended Complaint to implead new and additional defendants and to mention the TCTs to be annulled. But the respondent court dismissed the Amended Complaint.

Petitioners moved for reconsideration of the Order dismissing the Amended Complaint. The motion was granted by the RTC in an Order[1] dated July 7, 1995, which further allowed the herein petitioners to file a Second Amended Complaint,[2] which they promptly did.

On August 12, 1995, the private respondents presented a Motion to Dismiss[3] on the grounds that the complaint failed to state a cause of action, that plaintiffs did not have a right of action, that they have not established their status as heirs, that the land being claimed is different from that of the defendants, and that plaintiffs’ claim was barred by laches. The said Motion to Dismiss was granted by the respondent court in its Order[4] dated October 25, 1995, holding that petitioners “have not shown any proof or even a semblance of it - except the allegations that they are the legal heirs of the above-named Yaptinchays - that they have been declared the legal heirs of the deceased couple.”

Undaunted, petitioners have come before this Court to seek relief from respondent court’s Orders under attack. Petitioners contend that the respondent court acted with grave abuse of discretion in ruling that the issue of heirship should first be determined before trial of the case could proceed. It is petitioners’ submission that the respondent court should have proceeded with the trial and simultaneously resolved the issue of heirship in the same case.

The petition is not impressed with merit.

To begin with, petitioners’ Petition for Certiorari before this Court is an improper recourse. Their proper remedy should

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have been an appeal. An order of dismissal, be it right or wrong, is a final order, which is subject to appeal and not a proper subject of certiorari[7]. Where appeal is available as a remedy, certiorari will not lie[8].

Neither did the respondent court commit grave abuse of discretion in issuing the questioned Order dismissing the Second Amended Complaint of petitioners, as it aptly ratiocinated and ruled:

“But the plaintiffs who claimed to be the legal heirs of the said Guido and Isabel Yaptinchay have not shown any proof or even a semblance of it - except the allegations that they are the legal heirs of the aforementioned Yaptinchays - that they have been declared the legal heirs of the deceased couple. Now, the determination of who are the legal heirs of the deceased couple must be made in the proper special proceedings in court, and not in an ordinary suit for reconveyance of property. This must take precedence over the action for reconveyance (Elena C. Monzon, et. al., v. Angelita Taligato, CA-G-R No. 33355, August 12, 1992).”

In Litam, etc., et. al. v. Rivera[9], this court opined that the declaration of heirship must be made in an administration proceeding, and not in an independent civil action. This doctrine was reiterated in Solivio v. Court of Appeals[10] where the court held:

"In Litam, et al. v. Rivera, 100 Phil. 364, where despite the pendency of the special proceedings for the settlement of the intestate estate of the deceased Rafael Litam, the plaintiffs-appellants filed a civil action in which they claimed that they were the children by a previous marriage of the deceased to a Chinese woman, hence, entitled to inherit his one-half share of the conjugal properties acquired during his marriage to Marcosa Rivera, the trial court in the civil case declared that the plaintiffs-appellants were not children of the deceased, that the properties in question were paraphernal properties of his wife, Marcosa Rivera, and that the latter was his only heir. On appeal to this Court, we ruled that ‘such declarations (that Marcosa Rivera was the only heir of the decedent) is improper, in Civil Case No. 2071, it being within the exclusive competence of the court in Special Proceedings No. 1537, in which it is not as yet, in issue, and, will not be, ordinarily, in issue until the presentation of the project of partition.’ (p. 378).”

The trial court cannot make a declaration of heirship in the civil action for the reason that such a declaration can only be made in a special proceeding. Under Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as “one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong” while a special proceeding is “a remedy by which a party seeks to establish a status, a right, or a particular fact.” It is then decisively clear that the declaration of heirship can be made only in a special proceeding inasmuch as the petitioners here are seeking the establishment of a status or right.

We therefore hold that the respondent court did the right thing in dismissing the Second Amended Complaint, which stated no cause of action. In Travel Wide Associated Sales (Phils.), Inc. v. Court of Appeals[11], it was ruled that:

“ xxx If the suit is not brought in the name of or against the real party in interest, a motion to dismiss may be filed on the ground that the complaint states no cause of action.”

WHEREFORE, for lack of merit, the Petition under consideration is hereby DISMISSED.

"WAR KIDS" Laura Alvarez v. Intermediate Appellate Court, Jesus Yanes, et al.(grandchildren of the deadz sila)

G.R. No. L-68053; May 7, 1990

Facts:Aniceto was survived by his children Rufino, Felipe and Teodora. The PRs are the childrenof Rufino. Ani left his children lots 773 and 823. Rufino and his children left the duringWW2. After liberation, they found out that lot 773 was in the possession of Santiago,Fuentebella, and Alvarez. Record shows that TCTs covering lot 773-A;B were alreadyissued to Santiago. Santi sold the lots to Fuente. When Fuente died, his wife sold the lots toRosendo Alvarez.PRs filed a complaint against Santi, Fuente, Alvarez, and the RD of Negros for the return of the ownership and possession of lots 773 and 823. During the pendency of the case, Alvasold the lots to Dr. Siason. Meanwhile, in 1962, Jesus executed a quitclaim in favor of defendant. However, in 1963, the CFI rendered a decision in favor of PRs.(Civil case 5022Note: pets did not file an appeal in this dec.) Decision cannot be executed coz 733 wasalready registered in the name of Siason. The cadastral court initially ordered Siason toproduce his TCTs. Afterwards, the court nullified its previous order coz Siason was in GFand without knowledge.The PRs filed an ex-parte motion for the issuance of an alias writ of exec. The court ruledthat the judgment cannot be enforced bec. Siason was not a party in the case.Another action was filed by the PRs for the recov of the land plus damages and prutas. Thepets raised res judicata, prescription and estoppel in their answer.The lower court ruled infavor of the PRs. It ruled that equity demanded that the PRs recover the actual value of theland bec. the sale was executed without court approval. The appellate court affirmed theTCs decision. MR also denied.

Wills Issue:WON the obligation of deceased Alvarez (he died already) to pay the PRs could be legallytransmitted and passed down to his legitimate children and heirs.Ruling:*Civil Case 5022 is already the law of the case because pets failed to file an appeal. Saiddecision had long become final and executory. SC is already powerless to review thedecision.Yes.The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules of Court that money debts of a deceased must beliquidated and paid from his estate before the residue is distributed among said heirs (Rule89). The reason is that whatever payment is thus made from the state is ultimately apayment by the heirs or distributees, since the amount of the paid claim in fact diminishesor reduces the shares that the heirs would have been entitled to receive.(Estate of Hemady v. Luzon Surety)Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape thelegal consequences of their father's transaction, which gave rise to the present claim fordamages. 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 theirfather's hereditary estate, and we have ruled that the hereditary assets are always liable intheir totality for the payment of the debts of the estate. It must, however, be made clearthat petitioners are liable only to the extent of the value of their inheritance

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA (their father) who represents the minors, petitioners, vs.LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court of First Instance of Abra, respondents.G.R. No. L-41715 June 18, 1976

FACTS: On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla, instituted a civil action in the Court of First Instance of Abra, to quiet title over certain parcels of land

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located in Abra. The herein defendants then filed a written motion to dismiss the complaint, but before the hearing of the said motion, the plaintiff’s counsel moved to amend the complaint which was granted. The defendants again filed another motion to dismiss the complaint. The said motion to dismiss was then heard. On August 19, 1975, plaintiff’s counsel received a copy of the order dismissing the complaint and on the 23rd of the same month; he moved to set aside the said order. The court denied the MR filed by the plaintiff’s counsel which the counsel later on filed a written manifestation allowing the minor petitioners to be allowed to substitute their deceased mother. From the order, the plaintiff’s counsel filed a second MR of the order dismissing the complaint but the same was denied. Hence, this present petition for review.

ISSUE: WON THE ACTION SURVIVES EVEN AFTER THE DEATH OF A PARTY DURING THE PENDENCY OF THE CASE.

HELD: Yes. While it is true that a person who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion. Under Section 16, Rule 3 of the Rules of Court "whenever a party to a pending case dies, it shall be the duty of his attorney to inform the court promptly of such death, and to give the name and residence of his executor, administrator, guardian or other legal representatives." Moreover, Article 777 of the Civil Code provides "that the rights to the succession are transmitted from the moment of the death of the decedent." When Fortunata Barcena, therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856, was not extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. In addition, Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished, the court shall order, upon proper notice, the legal representative of the deceased to appear and be substituted for the deceased, within such time as may be granted." The question as to whether an action survives or not depends on the nature of the action and the damage sued for. The claim of the deceased plaintiff which is an action to quiet title over the parcels of land in litigation affects primarily and principally property and property rights and therefore is one that survives even after her death. It is, therefore, the duty of the respondent Court to order the legal representative of the deceased plaintiff to appear and to be substituted for her. Thus, the action in the instant case survives.

REYES VS. RTC OF MAKATI CITY (AUG. 11, 2008)

Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedro’s estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacia’s estate, which included her shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.3

On May 9, 2000, Zenith and Rodrigo filed a complaint4 with the Securities and Exchange Commission (SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative suit initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by

Oscar] for himself [and] which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased spouses, for which he should be ordered to account for all the income from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective shares."5 [Emphasis supplied.]

In his Answer with Counterclaim,6 Oscar denied the charge that he illegally acquired the shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from the unissued stocks of Zenith, and that the suit is not a bona fide derivative suit because the requisites therefor have not been complied with. He thus questioned the SEC’s jurisdiction to entertain the complaint because it pertains to the settlement of the estate of Anastacia Reyes.

On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.9 He claimed that the complaint is a mere nuisance or harassment suit and should, according to the Interim Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a petition for the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the motion in part

ISSUE:That the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement of estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court

Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the dismissal of Rodrigo’s complaint before the RTC.

HELD:

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