G.R. No.

126950 July 2, 1999

NELSON NUFABLE, SILMOR NUFABLE and AQUILINA NUFABLE, petitioners,

vs.
GENEROSA NUFABLE, VILFOR NUFABLE, MARCELO NUFABLE, and the
COURT OF APPEALS, respondents.

FACTS:
Edras Nufable owned a parcel of land consisting of 948 square
meters, more or less. When he died he was survived by his children all surnamed
Nufable. Upon petition for probate filed by said heirs and after due publication
and hearing, the then Court issued an Order admitting to probate the last will
and testament executed by the deceased. The same court then issued an Order
approving the Settlement of Estate. Two months
earlier spouses Angel Custodio and Aquilina Nufable mortgaged the entire
property located at Manjuyod to the Development Bank of the Philippines [DBP].
Said mortgagors became delinquent for which reason the mortgaged property
was foreclosed by DBP Nelson Nufable, the son of Angel Custodio Nufable, who
died, purchased said property from DBP Respondents all surnamed Nufable filed
with the lower court a complaint "To Annul Fraudulent Transactions, to Quiet
Title and To Recover Damages' against Nelson Nufable, and wife, Silmor Nufable
and his mother Aquilina Nufable. Hence, the present petition.

ISSUE: WON the Last Will and Testament of Esdras Nufable and its subsequent
probate arepertinent and material to the question of the right of ownership of
petitioner Nelson Nufable purchased the land in question from, and as acquired
property of the Development Bank of the Philippines

HELD:
As a general rule, courts in probate proceedings are limited only to
passing upon the extrinsic validity of the will sought to be probated, the due
execution thereof, the testator's testamentary capacity and the compliance with
the requisites or solemnities prescribes by law. The question of the intrinsic
validity of a will normally comes only after the court has declared that the will
has been duly authenticated. The
records show that upon petition for probate filed by the heirs of the late Esdras
Nufable, an Order admitting to probate the last will and testament executed by
the decedent. Thereafter, the same court approved the Settlement of Estate
submitted by the heirs wherein they agreed "(T)hat the parcel land situated in
Poblacion Manjuyod, Negros Oriental remains undivided for community
ownership but respecting conditions imposed therein (sic) in the will." In
paragraph 3 thereof, they stated that "they have no objection as to the manner
of disposition of their share made by the testator, the expenses of the
proceeding and that they have already taken possession of their respective
shares in accordance with the will." Verily, it was the heirs of the late Esdras
Nufable who agreed among themselves on the disposition of their shares. The
probate court simply approved the agreement among the heirs which approval
was necessary for the validity of any disposition of the decedent's estate.
The late Esdras
Nufable is already dead when the entire property located at Manjuyod was
mortgaged by his son Angel Custodio with DBP, the other heirs of Esdras had
already acquired successional rights over the said property. This is so because of
the principle contained in Article 777 of the Civil Code to the effect that the
rights to the succession are transmitted from the moment of death of the
decedent. Accordingly, for the purpose of transmission of rights, it does not
matter whether the Last Will and Testament of the late Esdras Nufable was
admitted months later. In the said "the land situated in the Poblacion, Manjuyod,
Negros Oriental, should not be divided because this must remain in common for
them, but it is necessary to allow anyone of them brothers and sisters to
construct a house therein." It was therefor the will of the decedent that
the subject property should undivided, although the restriction should
not exceed twenty (20) years pursuant to Article 870 of the Civil Code.

Thus, when Angel Nufable and his spouses mortgaged the subject
property to DBP on they had no right to mortgage the entire property. Angel's
right over the subject property was limited only to 1/4 pro
indiviso share. As co-owner of the subject property, Angel's right to sell, assign
or mortgage is limited to that portion that may be allotted to him upon
termination of the co-ownership. Well-entrenched is the rule that a co-owner can
only alienate his pro indiviso share in the co-owned property.

While Angel, as a co-owner, have full ownership of his part and of the
fruits and benefits pertaining thereto and has the right to alienate, assign or
mortgage it, and even substitute another person in its enjoyment. As a mere part
owner, he cannot alienate the shares of the other co-owners. The prohibition is
premised on the elementary rule that "no one can give what he does not have."
Moreover, respondents
stipulated that they were not aware of the mortgage by petitioners of the subject
property. This being the case, a co-owner does not lose his part ownership of a
co-owned property when his share is mortgaged by another co-owner without
the former's knowledge and consent as in the case at bar. It has likewise been
ruled that the mortgage of the inherited property is not binding against co-heirs
who never benefitted.

Moreover, in case of foreclosure; a sale would result in the transmission of

title to the buyer which is feasible only if the seller can be in a position to convey
ownership of the things sold. And in one case, it was held that a foreclosure
would be ineffective unless the mortgagor has title to the property to be
foreclosed. Therefore, as regards the remaining 3/4 pro indiviso share, the same
was held in trust for the party rightfully entitled thereto, who are the private
respondents herein.

Neither does the fact that DBP succeeded in consolidating ownership over
the subject property in its name terminate the existing co-ownership.
Registration of property is not a means of acquiring ownership. When
the subject property was sold to and consolidated in the name of DBP, it being
the winning bidder in the public auction, DBP merely held the 3/4 portion in trust
for the private respondents. When petitioner Nelson purchased the said property,
he merely stepped into the shoes of DBP and acquired whatever rights and
obligations appertain thereto.

WHEREFORE, there being no reversible error in the decision appealed from, the
petition for review on certiorari is hereby DENIED.

G.R. No. 168970 January 15, 2010

 CELESTINO BALUS, Petitioner,
vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE
CALUNOD, Respondents.

FACTS:
Herein petitioner and respondents are the children of the deceased
spouses Rufo and Sebastiana Balus. Rufo mortgaged a parcel of land, which he
owns, as security for a loan he obtained from the Rural Bank of Maigo, Lanao del
Norte (Bank). Rufo failed to pay his loan. As a result, the mortgaged property
was foreclosed and was subsequently sold to the Bank as the sole bidder at a
public auction held for that purpose. A Certificate of Sale was executed by the
sheriff in favor of the Bank. The property was not redeemed within the period
allowed by law. More
than two years after the auction, the sheriff executed a Definite Deed of Sale in
the Bank's favor. Thereafter, a new title was issued in the name of the Bank.
Herein petitioner and respondents executed an Extrajudicial Settlement of Estate
adjudicating to each of them a specific one-third portion of the subject property
consisting of 10,246 square meters. The Extrajudicial Settlement also contained
provisions wherein the parties admitted knowledge of the fact that their father
mortgaged the subject property to the Bank and that they intended to redeem
the same at the soonest possible time.
Three years after the execution of the Extrajudicial Settlement, herein
respondents bought the subject property from the Bank. Subsequently, Transfer
Certificate of Title was issued in the name of respondents. Meanwhile, petitioner
continued possession of the subject lot. Respondents filed a Complaint for
Recovery of Possession and Damages against petitioner, contending that they
had already informed petitioner of the fact that they were the new owners of the
disputed property, but the petitioner still refused to surrender possession of the
same to them. Respondents claimed that they had exhausted all remedies for
the amicable settlement of the case, but to no avail.
The RTC held that the right of petitioner to purchase from the
respondents his share in the disputed property was recognized by the provisions
of the Extrajudicial Settlement of Estate, which the parties had executed before
the respondents bought the subject lot from the Bank. Aggrieved by the Decision
of the RTC, herein respondents filed an appeal with the CA which set aside the
Decision of the RTC and ordering petitioner to immediately surrender possession
of the subject property to the respondents. Hence, the instant petition raising a
sole issue, to wit:

ISSUE: WON co-ownership by him and respondents over the subject property
persisted even after the lot was purchased by the Bank and title thereto
transferred to its name, and even after it was eventually bought back by the
respondents from the Bank.

HELD:
Petitioner posits that the subject Extrajudicial Settlement is, in and
by itself, a contract between him and respondents, because it contains a
provision whereby the parties agreed to continue their co-ownership of the
subject property by "redeeming" or "repurchasing" the same from the Bank.
Moreover, petitioner asserts that respondents' act of buying the disputed
property from the Bank without notifying him inures to his benefit as to give him
the right to claim his rightful portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.
HELD:
Both petitioner and respondents are arguing on the wrong premise
that, at the time of the execution of the Extrajudicial Settlement, the subject
property formed part of the estate of their deceased father to which they may
lay claim as his heirs. There is no dispute to the
fact that the subject property was exclusively owned their father at the time that
it was mortgaged in 1979 to the Bank. Evidence shows that a Definite Deed of
Sale was issued in favor of the Bank after the period of redemption expired.
Hence, there is no question that the Bank acquired exclusive ownership of the
contested lot during the lifetime of Rufo.

The rights to a person's succession are transmitted from the moment of

his death. In addition, the inheritance of a person consists of the property and
transmissible rights and obligations existing at the time of his death, as well as
those which have accrued thereto since the opening of the succession. In the
present case, since Rufo lost ownership of the subject property during his
lifetime, it only follows that at the time of his death, the disputed parcel of land
no longer formed part of his estate to which his heirs may lay claim. Stated
differently, petitioner and respondents never inherited the subject lot from their
father.

Petitioner and respondents, therefore, were wrong in assuming that they

became co-owners of the subject lot. Thus, any issue arising from the supposed
right of petitioner as co-owner of the contested parcel of land is negated by the
fact that, in the eyes of the law, the disputed lot did not pass into the hands of
petitioner and respondents as compulsory heirs of Rufo at any given point in
time. While it is true that under
Article 1315 of the Civil Code of the Philippines, 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.
Article 1306 of the same Code also provides that the contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good customs, public
order or public policy. In the present case,
however, there is nothing in the subject Extrajudicial Settlement to indicate any
express stipulation for petitioner and respondents to continue with their
supposed co-ownership of the contested lot. In the first place, as earlier
discussed, there is no co-ownership to talk about and no property to partition, as
the disputed lot never formed part of the estate of their deceased father.

In addition, it appears from the

recitals in the Extrajudicial Settlement that, at the time of the execution thereof,
the parties were not yet aware that the subject property was already exclusively
owned by the Bank. Nonetheless, the lack of knowledge on the part of petitioner
and respondents that the mortgage was already foreclosed and title to the
property was already transferred to the Bank does not give them the right or the
authority to unilaterally declare themselves as co-owners of the disputed
property; otherwise, the disposition of the case would be made to depend on the
belief and conviction of the party-litigants and not on the evidence adduced and
the law and jurisprudence applicable thereto.

G.R No. 126707 February 25, 1999

BLANQUITA E. DELA MERCED, LUISITO E. DELA MERCED, BLANQUTIA M.
MACATANGAY, MA. OLIVIA M. PAREDES, TERESITA P. RUPISAN, RUBEN
M. ADRIANO, HERMINIO M. ADRIANO, JOSELITO M. ADRIANO, ROGELIO
M. ADRIANO, WILFREDO M. ADRIANO, VICTOR M. ADRIANO, CORAZON A.
ONGOCO, JASMIN A. MENDOZA and CONSTANTINO M.
ADRIANO, petitioners,
vs.
JOSELITO P. DELA MERCED, respondent.

FACTS:
At the time of her death, Evarista was survived by three sets of
heirs, viz: (1) her legitimate brother, Francisco; (2) her niece who is the only
daughter of her sister who died and (3) the legitimate children of her another
sister of Evarista. Almost a year later Francisco Evarista's brother died. He was
survived by his wife and their three legitimate children. The three sets of heirs of
the decedent, E executed an extrajudicial settlement, entitled "Extrajudicial
Settlement of the Estate of the Deceased Evarista M. dela Merced" adjudicating
the properties of Evarista to them, each set with a share of one-third (1/3) pro-
indiviso. Private respondent Joselito P. Dela Merced, illegitimate son of
the late Francisco de la Merced, filed a "Petition for Annulment of the
Extrajudicial Settlement of the Estate of the Deceased Evarista M. Dela Merced
with Prayer for a Temporary Restraining Order", alleging that he was fraudulently
omitted from the said settlement made by petitioners, who were fully aware of
his relation to the late Francisco. Claiming successional rights, private
respondent Joselito prayed that he be included as one of the beneficiaries, to
share in the one-third (1/3) pro-indiviso share in the estate of the deceased
Evarista, corresponding to the heirs of Francisco. The private respondent
appealed to the Court of Appeals which reversed the decision of the trial court of
origin and ordered the petitioners to execute an amendatory agreement which
shall form part of the original settlement, so as to include private respondent
Joselito as a co-heir to the estate of Francisco, which estate includes one-third
(1/3) pro indiviso of the latter's inheritance from the deceased Evarista. Hence,
the petition.

ISSUE: WON the plaintiff may participate in the intestate estate of the late
Evarista M. Dela Merced in his capacity as representative of his alleged father,
Francisdo Dela Merced, brother of the deceased, whose succession is under
consideration.

HELD:
In the Petition under consideration, petitioners insist that being an
illegitimate child, private respondent Joselito is barred from inheriting from
Evarista because of the provision of Article 992 of the New Civil Code, which lays
down an impassable barrier between the legitimate and illegitimate families.
Article 992 of the New Civil
Code is not applicable because involved here is not a situation where an
illegitimate child would inherit ab intestato from a legitimate sister of his father,
which is prohibited by the aforesaid provision of law. Rather, it is a scenario
where an illegitimate child inherits from his father, the latter's share in or portion
of, what the latter already inherited from the deceased sister, Evarista.
As opined by the Court of Appeals, the law in
point in the present case is Article 777 of the New Civil Code which provides that
the rights to succession are transmitted from the moment of death of the
decedent. Since Evarista died ahead of her brother Francisco, the latter inherited
a portion of the estate of the former as one of her heirs. Subsequently, when
Francisco died, his heirs, including private respondent, Joselito, an illegitimate
child, inherited his (Francisco's) share in the estate of Evarista. It bears stressing
that Joselito does not claim to be an heir of Evarista by right of representation
but participates in his own right, as an heir of the late Francisco, in the latter's
share (or portion thereof) in the estate of Evarista.

Petitioners argue that if Joselito desires to assert successional rights to the

intestate estate of his father, the proper forum should be in the settlement of his
own father's intestate estate, as this Court held in the case of Gutierrez vs.
Macandog (150 SCRA 422 [1987])

The present case, however, relates to the rightful and undisputed right of
an heir to the share of his late father in the estate of the decedent Evarista,
ownership of which had been transmitted to his father upon the death of
Evarista. There is no legal obstacle for private respondent Joselito, admittedly the
son of the late Francisco, to inherit in his own right as an heir to his father's
estate, which estate includes a one-third (1/3) undivided share in the estate of
Evarista.

WHEREFORE, for lack of merit, the Petition is hereby DENIED and the Appealed
Decision of the Court of Appeals AFFIRMED in toto.

SO ORDERED.

G.R. No. 118464 December 21, 1998

HEIRS OF IGNACIO CONTI and ROSARIO CUARIO, petitioner,

vs.
COURT OF APPEALS and LYDIA S. REYES as Attorney-in-Fact of JOSEFINA
S. REYES, BERNARDITA S. PALILIO, HERMINIA S. PALILIO, REMEDIOS A.
SAMPAYO, ILUMINADA A. SAMPAYO, ENRICO A. SAMPAYO CARLOS A.
SAMPAYO, GENEROSO C. SAMPAYO, MYRNA C. SAMPAYO, ROSALINO C.
SAMPAYO, MANUEL C. SAMPAYO, DELIA A. SAMPAYO, CORAZON C.
SAMPAYO, NILO C. SAMPAYO, and LOLITA A. SAMPAYO in her own
behalf and as Attorney-in-Fact of NORMA A. SAMPAYO, respondents.

FACTS:
Lourdes Sampayo and Ignacio Conti were the co-owners of the property
inlitigation consisting of a 539-square meter lot at the corner of Zamora and
Abellanosa Streets, Lucena City. After Lourdes Sampayo died, private
respondents filed an action for partition and damages before the RTC against
Ignacio Conti. After trial on the merits, the court declared-
respondents as the rightful heirs of Lourdes Sampayo and ordered both parties
to submit a project of partition of the residential house and lot for confirmation
bythe trial court.
On appeal, the Court of Appeals affirmed the RTC decision ruling that a
prior and separate judicial declaration of heirship was not necessary and that
private respondents became co-owners of the portion of the property owned and
registered in the name of Lourdes Sampayo upon her death and,
consequently, entitled to the immediate possession thereof and all
other incidents/rights of ownership as provided for by law including
the right to demand partition under Art. 777 of the Civil Code.

ISSUE: (1) WON a prior settlement of the entire estate is essential before heirs
commence any action in behalf of deceased; (2) WON private respondents
could establish co-ownership by way of succession as collateral heirs of
Sampayo.

HELD:

(1) WON a prior settlement of the entire estate is essential before heirs
commence any action in behalf of deceased
Prior settlement of the estate is not essential before the heirs can
commence any action originally pertaining to the deceased as we explained in
Quison v. Salud, Claro Quison died in 1902. It was proven at the trial that the
present plaintiffs are next of kin and heirs, but it is said by the appellants that
they are not entitled to maintain this action because there is no evidence that
any proceedings have been taken in court for the settlement of the estate of
Claro Quison, and that without such settlement, the heirs cannot maintain this
action. There is nothing in this point. As well by the Civil Code as by the Code of
Civil Procedure, the title to the property owned by a person who dies intestate
passes at once to his heirs. Such transmission is, under the present law, subject
to the claims of administration and the property may be taken from the heirs for
the purpose of paying debts and expenses, but this does not prevent an
immediate passage of the title, upon the death of the intestate, from himself to
his heirs. Without some showing that a judicial administrator had been appointed
in proceedings to settle the estate of Claro Quison, the right of the plaintiffs to
maintain this action is established.

(2) WON private respondents could establish co-ownership by

way of succession as collateral heirs of Sampayo.
There are two (2) simultaneous issues in an action for partition.
First,whether the plaintiff is indeed a co-owner of the property
sought to be partitioned, and second, if answered in the affirmative, the
manner of division of the property, i.e., what portion should go to which co-
owner. Thus, in this case, we must determine whether private respondents, by
preponderance of-evidence, have been able to establish that they are
co-owners by way of-succession as collateral heirs of the late Lourdes
Sampayo as they claim to be, a sister, a nephew or a niece. These, private
respondents were able to prove in the trial court as well as before respondent
Court of Appeals.

DANILO I. SUAREZ, EUFROCINA SUAREZ-ANDRES, MARCELO I. SUAREZ,

JR., EVELYN SUAREZ-DE LEON and REGINIO I. SUAREZ, Petitioners, v. THE
COURT OF APPEALS, VALENTE RAYMUNDO, VIOLETA RAYMUNDO, MA.
CONCEPCION VITO and VIRGINIA BANTA, Respondents.

Villareal Law Offices, for Petitioners.

Nelson Loyola for Private Respondent.

FACTS:
Petitioners are brothers and sisters. Their father died in 1955 and since
then his estate consisting of several valuable parcels of land in Pasig, Metro
Manila has not been liquidated or partitioned. In 1977, petitioners’ widowed
mother and Rizal Realty Corporation lost in the consolidated cases for rescission
of contract and for damages, and were ordered by the court to pay, jointly and
severally, herein respondents the aggregate principal amount of about P70,000
as damages.
The judgment against petitioner’s mother and Rizal Realty Corporation
having become final and executory, five (5) valuable parcel of land were levied
and sold on execution in favor of the private respondents as the highest
bidder.Private respondents were then issued a certificate of sale which was
subsequently registered. Before the expiration of the
redemption period, petitioners filed a reinvindicatory action against private
respondents and the Provincial Sheriff of Rizal for the annulment of the auction
sale and the recovery of the ownership of the levied pieces of property. Therein,
they alleged, among others, that being strangers to the case decided against
their mother, they cannot be held liable therefor and that the five (5) parcels of
land, of which they are co-owners, can neither be levied nor sold on execution.
A writ of preliminary injunction was issued enjoining private respondents
from transferring to third parties the levied parcels of land based on the finding
that the auctioned lands are co-owned by petitioners. The RTC issued an order
directing Teofista Suarez and all persons claiming right under her to vacate the
lots subject of the judicial sale; to desist from removing or alienating
improvements thereon; and to surrender to private respondents the owner’s
duplicate copy of the torrens title and other pertinent documents. Teofista
Suarez then filed with the then Court of Appeals a petition for certiorari.
Respondents then appealed to the Court of Appeals seeking to annul the orders.
The CA grants the petition for certiorari. Hence, this appeal.

ISSUE: WON private respondents can validly acquire all the five (5) parcels of
land co-owned by petitioners and registered in the name of petitioner’s deceased
father.

HELD:
To start with, only one-half of the 5 parcels of land should have
been the subject of the auction sale.
The law in point is Article 777 of the Civil Code, the law applicable at the
time of the institution of the case. "The rights to the succession are
transmitted from the moment of the death of the decedent."

Article 888 further provides:

"The legitime of the legitimate children and descendants consists of one-
half of the hereditary estate of the father and of the mother. The latter may
freely dispose of the remaining half, subject to the rights of illegitimate children
and of the surviving spouse as hereinafter provided."

Article 892 par. 2 likewise provides: "If there are two or more legitimate
children or descendants, the surviving spouse shall be entitled to a portion equal
to the legitime of each of the legitimate children or descendants." Thus, from the
foregoing, the legitime of the surviving spouse is equal to the legitime of each
child.

The proprietary interest of petitioners in the levied and auctioned property

is different from and adverse to that of their mother. Petitioners became co-
owners of the property not because of their mother but through their own right
as children of their deceased father. Therefore, petitioners are not barred in any
way from instituting the action to annul the auction sale to protect their own
interest.

G.R. No. L-22036 April 30, 1979

TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE

PARISH PRIEST OF THE ROMAN CATHOLIC CHURCH OF VICTORIA,
TARLAC, petitioner-appellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and
JOVITA ESCOBAR DE FAUSTO, respondents-appellees.

FACTS:
This case is about the efficaciousness or enforceability of a devise of
ricelands which was made in the will of the late Father Pascual Rigor in favor of his
nearest male relative who would study for the priesthood. The parish priest of
Victoria, who claimed to be a trustee of the said lands, appealed to this Court from
the decision of the Court of Appeals affirming the order of the probate court
declaring that the said devise was inoperative. Father Rigor, a parish priest, died
leaving a will which was probated by the Court of First Instance of Tarlac. Named as
devisees in the will were the testators nearest relatives, namely, his three sisters. A
devise was made in the will purported to be given to the nearest male relative who
shall take the priesthood, and in the interim to be administered by the actual
Catholic Priest of the Roman Catholic Church of Victoria, Tarlac, Philippines, or his
successors. Judge Roman A.
Cruz in his order approving the project of partition, directed that after payment of
the obligations of the estate the administratrix should deliver to the devisees their
respective shares. It may be noted that the administratrix and Judge Cruz did not
bother to analyze the meaning and implications of Father Rigor's bequest to his
nearest male relative who would study for the priesthood. Inasmuch as no nephew of
the testator claimed the devise and as the administratrix and the legal heirs believed
that the parish priest of Victoria had no right to administer the ricelands, the same
were not delivered to that ecclesiastic. The testate proceeding remained pending.
About thirteen
years after the approval of the project of partition, the parish priest of Victoria filed
in the pending testate proceeding a petition praying for the appointment of a new
administrator who should deliver to the church the said ricelands, and further
praying that the possessors thereof be ordered to render an accounting of the fruits.
The probate court granted the petition. A new administrator was appointed. The
intestate heirs of Father Rigor countered with a petition that the bequest be
inoperative and that they be adjudged as the persons entitled to the said ricelands
since, as admitted by the parish priest of Victoria, "no nearest male relative of" the
testator "has ever studied for the priesthood"

ISSUE: Whether or not a device in favour of a person whose identity at the time of
the testator’s death cannot be ascertained, may be efficacious.

HELD:
The will of the testator is the first and principal law in the matter of
testaments. When his intention is clearly and precisely expressed, any interpretation
must be in accord with the plain and literal meaning of his words, except when it
may certainly appear that his intention was different from that literally expressed.
The intent of the testator is the cardinal rule in the construction of wills." It
is "the life and soul of a will It is "the first greatest rule, the sovereign guide, the
polestar, in giving effect to a will. One canon in the interpretation of the
testamentary provisions is that "the testator's intention is to be ascertained from the
words of the wilt taking into consideration the circumstances under which it was
made", but excluding the testator's oral declarations as to his intention (Art. 789,
Civil Code of the Philippines).

The execution of the will executed by father Rigor clearly provides that he
bequeathed the ricelands to anyone of his nearest male relatives who would pursue
an ecclesiastical career until his ordination as a priest and that the devisee could not
sell the ricelands and that during the interval of time that there is no qualified
devisee as contemplated above, the administration of the ricelands would be under
the responsibility of the incumbent parish priest of Victoria and his successors . From
the foregoing testamentary provisions, it may be deduced that the testator intended
to devise the ricelands to his nearest male relative who would become a priest, who
was forbidden to sell the ricelands, who would lose the devise if he discontinued his
studies for the priesthood, or having been ordained a priest, he was
excommunicated, and who would be obligated to say annually twenty masses with
prayers for the repose of the souls of the testator and his parents.
On the other hand, it is clear
that the parish priest of Victoria would administer the ricelands only in two
situations: one, during the interval of time that no nearest male relative of the
testator was studying for the priesthood and two, in case the testator's nephew
became a priest and he was excommunicated.

What is not clear is the duration of "el intervalo de tiempo que no haya
legatario acondicionado", or how long after the testator's death would it be
determined that he had a nephew who would pursue an ecclesiastical vocation. It is
that patent ambiguity that has brought about the controversy between the parish
priest of Victoria and the testator's legal heirs. In 1935, when the testator
died, his nearest legal heirs were his three sisters or second-degree relatives.
Obviously, when the testator specified his nearest male relative, he must have had
in mind his nephew or a son of his sister, who would be his third-degree relative, or
possibly a grandnephew. But since he could not prognosticate the exact date of his
death or state with certitude what category of nearest male relative would be living
at the time of his death, he could not specify that his nearest male relative would be
his nephew or grandnephews (the son of his nephew or niece) and so he had to use
the term "nearest male relative". Had the testator intended that the "cualquier
pariente mio varon mas cercano que estudie la camera eclesiatica" would include
indefinitely anyone of his nearest male relatives born after his death, he could have
so specified in his will.
The reasonable view is that he was referring to a situation whereby his
nephew living at the time of his death, who would like to become a priest, was still in
grade school or in high school or was not yet in the seminary. In that case, the parish
priest of Victoria would administer the ricelands before the nephew entered the
seminary. But the moment the testator's nephew entered the seminary, then he
would be entitled to enjoy and administer the ricelands and receive the fruits
thereof. In that event, the trusteeship would be terminated.
Inasmuch as the testator was not survived by any nephew who became a
priest, the unavoidable conclusion is that the bequest in question was ineffectual or
inoperative. Therefore, the administration of the ricelands by the parish priest of
Victoria, as envisaged in the wilt was likewise inoperative. It should be understood
that the parish priest of Victoria could become a trustee only when the testator's
nephew living at the time of his death, who desired to become a priest, had not yet
entered the seminary or, having been ordained a priest, he was excommunicated.
Those two contingencies did not arise, and could not have arisen in this case
because no nephew of the testator manifested any intention to enter the seminary or
ever became a priest.
The Court of Appeals correctly ruled that this case is covered by article
888 of the old Civil Code, now article 956, which provides that if "the bequest for any
reason should be inoperative, it shall be merged into the estate, except in cases of
substitution and those in which the right of accretion exists" ("el legado ... por
qualquier causa, no tenga efecto se refundira en la masa de la herencia, fuera de los
casos de sustitucion y derecho de acrecer").

Article 912(2) of the old Civil Code, now article 960 (2), which provides that
legal succession takes place when the will "does not dispose of all that belongs to
the testator." There being no substitution nor accretion as to the said ricelands the
same should be distributed among the testator's legal heirs. The effect is as if the
testator had made no disposition as to the said ricelands.
The Civil Code recognizes that
a person may die partly testate and partly intestate, or that there may be mixed
succession. The old rule as to the indivisibility of the testator's win is no longer valid.
Thus, if a conditional legacy does not take effect, there will be intestate succession
as to the property recovered by the said legacy.

G.R. No. 116018 November 13, 1996

NELIA A. CONSTANTINO, petitioner,

vs.
COURT OF APPEALS, AURORA S. ROQUE, PRISCILLA S. LUNA and JOSEFINA
S. AUSTRIA, respondents.

FACTS:
JOSEFA TORRES died intestate leaving a parcel of land. Among her heirs are
the respondents. Sometime in 1984, the heirs of Josefa Torres, as vendors, and
petitioner Nelia A. Constantino, as vendee, entered into a contract to sell a parcel of
land with a total land area of two hundred and fifty (250) square meters. The lot,
owned in common by the Torres heirs, is being occupied by petitioners' mother and
sister. An adjoining lot, also co-owned by the heirs, is being occupied by spouses
Severino and Consuelo Lim. Pursuant to their agreement, the heirs authorized
petitioner to prepare the necessary Deed of Extrajudicial Settlement of Estate with
Sale.
After having the document drafted — with several spaces left blank including
the specification as to the metes and bounds of the land — petitioner asked the heirs
to affix their signatures on the document. The heirs signed the document with the
understanding that respondent Aurora S. Roque, one of the heirs, would be present
when the latter would seek permission from the Bureau of Lands and have the land
surveyed. However, without the participation of any of the Torres heirs, the property
was subsequently surveyed, subdivided and then covered. Petitioner did not furnish
the heirs with copies of the Deed of Extrajudicial Settlement of Estate with Sale nor
of the subdivision plan and the certificates of title. Upon securing a copy of the deed
from the Registry of Deeds, the respondents learned that the area of the property
purportedly sold to petitioner was much bigger than that agreed upon by the parties.

Private respondents sent a letter to petitioner demanding the surrender to

them of the deed of settlement and conveyance, the subdivision plan and the
certificates of title; but to no avail. Respondents filed with the Regional Trial Court of
Bulacan an action for annulment of the deed and cancellation of the certificates of
title, with prayer for recovery of damages, attorney's fees and costs of
suit. Petitioner controverted the allegations of respondents by presenting the Deed
of Extrajudicial Settlement of Estate with wherein respondents agreed to divide and
adjudicate among themselves the inherited property. In reply, private respondents
reiterated that all the heirs signed the document before the land was surveyed and
subdivided, hence, there was as yet no definite area to be sold that could be
indicated in the deed at the time of the signing. They also claimed that they were
not notified about the survey and the subdivision of the lot and therefore they could
not have agreed on the area supposedly sold to petitioner. The respondent heirs
insist that they could not have agreed to the extent of the area actually reflected in
the deed because it included the portion being occupied by the Lim spouses, which
was already the subject of a previous agreement to sell between them and their
predecessor.

ISSUE: WON the Deed of Extrajudicial Settlement of Estate with Sale did not reflect
the true intent of the parties.

HELD:
Petitioner insists that the real intent of the parties was to make the entire Lot
4-B the subject matter of the sale. She claims that during cross-examination
respondent Aurora S. Roque admitted that she signed in behalf of her co-heirs a
receipt for P30,000.00 as partial payment for the lot occupied by Ka
Baring and Lina (relatives of petitioner) and Iling (Consuelo Lim). Moreover,
according to petitioner, the assertions of private respondents to petitioner contained
in the demand letter should not necessarily be true and that the validity of the Deed
of Extrajudicial Settlement of Estate with Sale was not affected by the fact that it
was notarized in a place other than where the subject matter thereof was situated .
Thee arguments of petitioner are
barren and futile. The admission of respondent Roque cannot prevail in the face of
the clear evidence that there was as yet no meeting of the minds on the land area to
be sold since private respondents were still awaiting the survey to be conducted on
the premises. Obviously, the trial court only lent credence to the assertions in the
demand letter after having weighed the respective evidence of the parties. But even
without the letter, the evidence of respondents had already amply substantiated
their claims. In the Sales case that the extrinsic validity of a
document was not affected by the fact that it was notarized in a place other than
where the subject matter thereof was located. What is more important under
the Notarial Law is that the notary public has authority to acknowledge the
document executed within his territorial jurisdiction. The ruling in Sales is not
applicable to the present case. Our concern here is not whether the notary public
had the authority to acknowledge the document executed within his territorial
jurisdiction but whether respondents indeed appeared before him and signed the
deed. However, the quantum of evidence shows that they did not.
The trial court correctly
appreciated the fact that the deed was notarized in Manila when it could have been
notarized in Bulacan. This additional detail casts doubt on the procedural regularity
in the preparation, execution and signing of the deed. It is not easy to believe that
petitioner and the ten (10) Torres heirs traveled all the way to Manila to have their
questioned document notarized considering that they, with the exception of
respondent Roque, are residents of Balagtas, Bulacan, where notaries public are
easy to find. Consequently, the claim of private respondents that they did not sign
the document before a notary public is more plausible than petitioner's feeble claim
to the contrary.

Likewise, we find the allegation of respondents that they signed the deed
prior to the survey, or before determination of the area to be sold, worthy of credit
as against the contention of petitioner that they signed after the survey or on 10
October 1984. As found by the trial court, such contention was contradicted by
petitioner's own witness who positively asserted in court that the survey was
conducted only on 16 October 1984 or six (6) days after the signing. Quite obviously,
when respondents affixed their signatures on the deed, it was still incomplete since
petitioner who caused it to be prepared left several spaces blank, more particularly
as regards the dimensions of the property to be sold. The heirs were persuaded to
sign the document only upon the assurance of petitioner that respondent Roque,
pursuant to their understanding, would be present when the property would be
surveyed after obtaining permission from the Bureau of Lands. As it surfaced, the
supposed understanding was merely a ruse of petitioner to induce respondents to
sign the deed without which the latter would not have given their conformity
thereto. 7 Apparently, petitioner deceived respondents by filling the blank spaces in
the deed, having the lots surveyed and subdivided, and then causing the issuance of
transfer certificates of title without their knowledge, much less consent. Thus all the
elements of fraud vitiating consent for purposes of annulling a contract concur: (a) It
was employed by a contracting party upon the other; (b) It induced the other party
to enter into the contract; (c) It was serious; and, (d) It resulted in damages and
injury to the party seeking annulment.

Perhaps, another compelling reason for the annulment of the document of

settlement and conveyance is that the second page thereof clearly manifests that
the number of the subdivision plan and the respective areas of Lots 4-A and 4-B were
merely handwritten while all the rest of the statements therein were typewritten,
which leads us to the conclusion that handwritten figures thereon were not available
at the time the document was formalized.
 G.R. No. 127827 March 5, 2003

ELEUTERIO, ANATALIA, JOSELITO, ROGELIO, EVANGELINE, NOEL,

GUILLERMO, LORENZO, DOMINGO, AMADO, and VICTORIA, all surnamed
LOPEZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and spouses MARCELINO and
CRISTINA S. LOPEZ, FELISA LOPEZ and RAMON CORTEZ, ZOILO LOPEZ,
LEONARDO LOPEZ and LEONILA LOPEZ and spouses ROGELIO M. AMURAO
and NOAMI T. AMURAO, respondents.

FACTS:
The evidence shows that in 1920, Fermin Lopez occupied, possessed,
and declared for taxation purposes a parcel of public land. He filed a homestead
application over the land, but his application was not acted upon until his death in
1934. When he died, he was survived by the Hermogenes Lopez, who died, leaving
his children, herein respondents as his heirs; (2) petitioner Eleuterio Lopez; and Juan
Lopez, who also died, leaving his children as his heirs; and Nazario, now deceased,
leaving his wife, petitioner Anatalia, and children, petitioners Joselito, Rogelio,
Evangeline and Noel, all surnamed Lopez, as his heirs.
Following Fermin's death, Hermogenes, being the eldest child, worked
and introduced additional improvements on the land. In 1936, he inquired from the
Bureau of Lands the status of his late father's application for a homestead grant. An
official of the bureau informed him that the application remained unacted upon and
suggested that he file a new application. Following the suggestion, Hermogenes filed
a homestead application in his own name. After ascertaining that the land was free
from claim of any private person, the Bureau approved his application. The land was
surveyed and was approved by the Director of Lands, who thereafter ordered the
issuance of the homestead patent. The patent was later transmitted to the Register
of Deeds of Rizal and a corresponding certificate of title was issued in his name.
Unaware that he has been awarded a homestead patent,
Hermogenes executed Extra-judicial Partition of the disputed land with his brothers .
The three executed a Deed of Absolute Sale of their share in the land in favor of
Hermogenes. The succeeding year, Hermogenes applied with the Land Registration
Commission for the registration of the property in his name. To his surprise, he found
that the land has been registered in other names who collectively opposed his
application. Hermogenes filed a complaint for the annulment of the free patent and
title. The defendants moved for its dismissal alleging that Hermogenes was not a
real party in interest since he previously sold his right to the land to one Ambrocio
Aguilar on July 31, 1959. While the case was on appeal, respondent
Lopezes, as heirs of Hermogenes, filed a complaint against Aguilar before the RTC
for the cancellation of the deed of sale executed by Hermogenes in favor of Aguilar.
Pending its appeal, respondent Lopezes sold a large portion of the disputed property
to respondent spouses Amurao. In 1985, petitioners (heirs of Nazario and Juan
Lopez) filed a case claiming co-ownership of the land, arguing that Fermin's
homestead application entitled them to a share. They sought reconveyance or
payment of the value of their alleged shares. The trial court initially ruled in favor of
the petitioners, ordering equal division among Fermin's heirs. However, upon
respondents' petition for relief, the decision was set aside, and the case was
dismissed, declaring Hermogenes the exclusive owner. The Court of Appeals
affirmed the trial court's decision.

ISSUE: WON petitioners, as heirs of Fermin, their predecesssor-in-interest, are not

co-owners of the disputed property.

HELD:
Petitioners argued that Fermin, their predecessor-in-interest, has complied
with all the requirements of the Public Land Act pertaining to a homestead grant,
and is therefore entitled to a patent as a matter of right. They claim that Fermin filed
a homestead application over the land, cultivated at least one-fifth of it, and resided
on it for at least one year. Upon his death, they argue that they became its co-
owners through succession. Homestead
settlement is one of the modes by which public lands suitable for agricultural
purposes are disposed of. Its object is to provide a home for each citizen of the state,
where his family may shelter and live beyond the reach of financial misfortune, and
to inculcate in individuals those feelings of independence which are essential to the
maintenance of free institutions.The record is bereft of any evidence as to when
Fermin exactly filed his homestead application over the lot in controversy, but it
must have been filed after 1920, the year he first occupied and possessed the land,
and before 1934, the year he died. During this period, Act No. 2874 was the
governing law.19 Section 12 thereof provides:

"Sec. 12. Any citizen of the Philippine Islands or of the United States, over the
age of eighteen years, or the head of a family, who does not own more than twenty-
four hectares of land in said Islands or has not had any benefit of any gratuitous
allotment of more than twenty-four hectares of land since the occupation of the
Philippine Islands by the United States, may enter a homestead of not exceeding
twenty-four hectares of agricultural land of the public domain."
A person who is legally
qualified has to file his application for a homestead patent with the Bureau of Lands.
If in order, the application shall be approved by the Director. The applicant will be
authorized to enter the land upon payment of an entry fee of five pesos. Within six
months after approval of the application, the applicant has to improve and cultivate
the land. He must cultivate at least one-fifth of the land for a period of not less than
two years nor more than five years from the date of approval of the application. He
must also continuously reside in the same municipality where the homestead is
located, or in an adjacent municipality, for at least one year. He must finally present
his final proof to the Bureau of Lands that he has complied with the cultivation and
residency requirements.25

It bears emphasis that Act No. 2874 requires that for an application
to be valid, it must be approved by the Director of Lands. This is expressly
mandated by Section 13 of the law, viz: "Sec. 13. Upon filing of an application
for a homestead, the Director of Lands, if he finds that the application should
be approved, shall do so and authorize the applicant to take possession of the
land upon the payment of ten pesos, Philippine currency, as entry fee. Within six
months from and after the date of the approval of the application, the applicant shall
begin to work the homestead, otherwise he shall lose his prior right to the land."
The application of Fermin unfortunately remained
unacted upon up to the time of his death. It was neither approved nor denied by the
Director, as the Bureau failed to process it. Hence, he could not have acquired
any vested rights as a homestead applicant over the property because his
application was never acted upon. A valid application is sadly lacking in the case
of Fermin. This circumstance prevented him from acquiring any vested right over the
land and fully owning it at the time of his death. Conformably, his heirs did not
inherit any property right from him.

Had the application of Fermin been duly approved, his heirs would have
succeeded him in his rights and obligations with respect to the land he has applied .
The failure of the Bureau of Lands to act on the application of Fermin up to the time
of his death, however, prevented his heirs to be subrogated in all his rights and
obligations with respect to the land applied for. Perforce, at the time Hermogenes
applied for a homestead grant over the disputed property, it was still part of
alienable public land. As he applied for it in his own name, his application inures to
his sole benefit. After complying with the cultivation and residency requirements, he
became a grantee of a homestead patent over it, thereby making him its absolute
and exclusive owner.

Petitioners arguments that respondents are precluded from denying the

contents of these documents based on the principle of estoppel by deed. They add
that while only Hermogenes applied for a homestead grant, nonetheless, there was
an agreement among the brothers that his application was for and in behalf of all
them.

Hermogenes is the absolute owner of the disputed property just as his

brothers do not own any share in it. Hence, they cannot validly sell anything to
Hermogenes by virtue of the deed. Prescinding from the lack of co-ownership,
petitioners' argument that they are entitled to have the land partition must be
rejected. Partition, in general, is the separation, division and assignment of a thing
held in common among those to whom it may belong.The purpose of partition is to
put an end to co-ownership. It seeks a severance of the individual interests of each
co-owner, vesting in each a sole estate in specific property and giving to each one a
right to enjoy his estate without supervision or interference from the other. Not being
co-owners of the disputed lot, petitioners cannot demand its partition. They do not
have any interest or share in the property upon which they can base their demand to
have it divided.

Vda de Figuracion vs Figuracion Gerilla 690 SCRA 495

CASE DOCTRINE:Placing a parcel of land under the mantle of the Torrens system
does not mean that ownership thereof can no longer be disputed. The certificate
cannot always be considered as conclusive evidence of ownership.Co-heirs or co-
owners cannot acquire by acquisitive prescription the share of the other co-heirs or
co-owners absent a clear repudiation of the co ownership.

FACTS:
The parties are the heirs of Leandro Figuracion (Leandro) who died
intestate in May1958. Lot No. 707 of the Cadastral Survey of Urdaneta, Pangasinan
was originally owned by Eulalio Adviento (Eulalio), covered by an Original Certificate
of Title (OCT)issued in his name. Eulalio begot Agripina Adviento (Agripina) with his
first wife MarcelaEstioko (Marcela), whom Eulalio survived. When he remarried,
Eulalio had another daughter, petitioner Carolina, with his second wife, Faustina
Escabesa (Faustina).
Agripina executed a Deed of Quitclaim over the eastern half of Lot No. 707 in favor
of her niece, Emilia. Soon thereafter, petitioner Carolina executed an Affidavit of Self-
Adjudication adjudicating unto herself the entire Lot No. 707 as the sole and
exclusive heir of her deceased parents and also executed a Deed of Absolute Sale in
favor of petitioners Hilaria and Felipa. Upon Emilia and her family’s return from the
U.S., and relying on the Deed of Quitclaim, she built a house on the eastern half of
Lot No. 707.Years later, Hilaria and her agents threatened to demolish the house of
Emilia who, in retaliation, was prompted to seek the partition of Lot No. 707 as well
as Lot Nos. 2299and 705.
The matter was initially brought before the Katarungang Pambarangay, but no
amicable settlement was reached by the parties. Emilia instituted a Complaint for
the partition of Lot Nos. 2299, 705 and 707, annulment of the Affidavit of Self-
Adjudication,Deed of Absolute Sale and Transfer Certificate of Title (TCT) No. 42244,
reconveyance of eastern half portion of Lot No. 707, quieting of title and damages.
The RTC rendered its decision dismissing the complaint for partition, reconveyance,
quieting of title and damages is hereby ordered dismissed whereas the affidavit of
self-adjudication, deed of sale and the transfer certificate of title involving Lot 707
were declared null and void.Upon appeal, the CA ruled that the RTC erred in refusing
to partition Lot No. 707 and declared Lot No. 707 to be owned by Emilia, ½ pro
indiviso share; Felipa, ¼ pro indiviso share; and Hilaria, ¼ pro indiviso share.

ISSUES:(1)Whether the respondent can compel the partition of Lot No. 707;
(2)Whether the respondent’s right to demand for partition is barred by acquisitive
prescription or laches.

HELD:
(1) Whether the respondent can compel the partition of Lot No. 707;
Yes. In this case, co-ownership of Lot No. 707
was precisely what respondent Emilia was able to successfully establish, as
correctly found by the RTC and affirmed by the CA. Lot No. 707 was a co-
owned property of Agripina and Carolina. As co-owners, each of them had full
ownership of her part and of the fruits and benefits pertaining thereto. Each of them
also had the right to alienate the lot but only in so far as the extent of her portion was
affected. Accordingly, the deed of sale executed by Carolina in favor of Hilaria
and Felipa was a valid conveyance but only insofar as the share of
Carolina in the co- ownership is concerned. As Carolina’s successors-in
interest to the property,Hilaria and Felipa could not acquire any superior right in
the property than what Carolina is entitled to or could transfer or alienate after partition.In
a contract of sale of co-owned property, what the vendee obtains by virtue of such a
sale are the same rights as the vendor had as co-owner, and the vendee merely steps
into the shoes of the vendor as co-owner. Hilaria and Felipa did not acquire the undivided
portion pertaining to Agripina, which has already been effectively bequeathed to
respondent Emilia as early as November 28, 1961 thru the Deed of Quitclaim. In turn, being
the successor-in-interest of Agripina’s share in Lot No. 707, respondent Emilia took the
former’s place in the co-ownership and as such co-owner, has the right to compel
partition at any time.

(2) Whether the respondent’s right to demand for partition is barred by

acquisitive prescription or laches.
No. Co-heirs or co-owners cannot acquire by acquisitive prescription the share
of the other co-heirs or co-owners absent a clear repudiation of the co-
ownership.The act of repudiation, as a mode of terminating co-ownership, is
subject to certain conditions, to wit: (1) a co-owner repudiates the co-ownership; (2) such
an act of repudiation is clearly made known to the other co-owners; (3) the evidence
thereon is clear and conclusive; and (4) he has been in possession through
open, continuous, exclusive, and notorious possession of the property for the
period required by law.To sustain a plea of prescription, it must always clearly appear
that one who was originally a joint owner has repudiated the claims of his co-owners,
and that his co-owners were apprised or should have been apprised of his claim of
adverse and exclusive ownership before the alleged prescriptive period began to run.When
Hilaria and Felipa registered the lot in their names to the exclusion of Emilia,
an implied trust was created by force of law and the two of them were
considered a trustee of the respondent’s undivided share. As trustees, they
cannot be permitted to repudiate the trust by relying on the registration.

G.R. No. 198434

HEIRS OF LEANDRO NATIVIDAD AND JULIANA V. NATIVIDAD, Petitioners,

vs.
JUANA MAURICIO-NATIVIDAD, and SPOUSES JEAN NATIVIDAD CRUZ AND
JERRY CRUZ, Respondents.

FACTS:
The present petition arose from an action for specific performance
and/or recovery of sum of money filed against herein respondents by the spouses
Leandro Natividad (Leandro) and Juliana Natividad (Juliana), who are the
predecessors of herein petitioners. In their Complaint
respondents alleged that sometime in 1974, Sergio Natividad (Sergio), husband of
respondent Juana Mauricio-Natividad (Juana) and father of respondent Jean
Natividad-Cruz (Jean), obtained a loan from the Development Bank of t.he
Philippines (DBP). As security for the loan, Sergio mortgaged two parcels of land, one
of which is co-owned and registered in his name and that of his siblings. Sergio's
siblings executed a Special Power of Attorney authorizing him to mortgage the said
property. Subsequently, Sergio died without being able to pay his obligations with
DBP. Since the loan was nearing its maturity and the mortgaged properties were in
danger of being foreclosed, Leandro paid Sergio's loan obligations. Considering that
respondents were unable to reimburse Leandro for the advances he made in Sergio's
favor, respondents agreed that Sergio's share in the lot which he co-owned with his
siblings and the other parcel of land in the name of Sergio and Juana, shall be
assigned in favor of Leandro ahd Juliana. Leandro's and Sergio's brother, Domingo,
was tasked to facilitate the transfer of ownership of the subject properties in favor of
Leandro ·and Juliana. However, Domingo died without being able to cause such
transfer. Subsequently, despite demands and several
follow-ups made by petitioners, respondents failed and refused to honor their
undertakig contending that there is nothing in the said document which would
indicate that respondents agreed to the effect that the subject properties shall be
transferred in the name of Leandro as reimbursement for his payment of Syrgio's
loan obligations with the DBP. On the contrary, the second to the last paragraph of
the said Settlement clearly shows that herein respondents, as heirs of Sergio, have
divided the subject properties exclusively among themselves.

ISSUE: WON THE VERBAL AGREEMENT TO CONVEY THE PROPERTY SHARES OF

SERGIO NATIVIDAD IN FAVOR OF LEANDRO FOR THE PAYMENT OF HIS OBLIGATION,
IS COVERED BY THE STATUTE OF FRUD, THUS, NOT BINDING UPON THE HEIRS.

HELD:
There is no competent evidence to prove the verbal agreement being claimed
by respondents. Aside from the subject Extrajudicial Settlement Among Heirs, the
self-serving claims of Leandro on the witness stand, as well as the cash
voucher, which supposedly represented payment of P8,000.00 given to Atty. Even
granting that such an agreement existed, the CA did not commit any en-or in ruling
that the assignment of the shares of Sergio in the subject properties in petitioners'
favor as payment of Sergio's obligation cannot be enforced if there is no written
contract to such effect. Under the Statute of Frauds 9, an agreement to convey real
properties shall be unenforceable by action in the absence of a written note or
memorandum thereof and subscribed by the party charged or by his agent. As
earlier discussed, the pieces of evidence presented by petitioners, consisting of
respondents' acknowledgment of Sergio's loan obligations with DBP as embodied in
the Extrajudicial Settlement Among Heirs, as well as the cash voucher which
allegedly represents payment for taxes and transfer of title in petitioners' name do
not serve as written notes or memoranda of the alleged verbal agreement.

The, however, finds it proper to reiterate the CA ruling that, in any case, since
respondents had already acknowledged that Sergio had, in fact, incurred loan
obligations with the DBP, they are liable to reimburse the amount paid by Leandro
for the payment of the said obligation even if such payment was made without their
knowledge or consent.

Article 1236 of the Civil Code clearly provides that: The creditor is not bound
to accept payment or performance by a third person who has no interest in the
fulfillment of the obligation, unless there is a stipulation to the contrary. Whoever
pays for another may demand from the debtor what he has paid, except
that if he paid without the knowledge or against the will of the debtor, he
can recover only insofar as the payment has been beneficial to the debtor.
Neither can respondents evade liability by arguing that they were not
parties to the contract between Sergio and the DBP. As earlier stated, the fact
remains that, in the Extrajudicial Settlement Among Heirs, respondents clearly
acknowledged Sergio's loan obligations with the DBP. Being Sergio's heirs, they
succeed not only to the rights of Sergio but also to his obligations.
The following provisions of the Civil Code are clear on this matter, to wit:

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

rights and obligations to the extent of the value of the inheritance, of a person are
transmitted through his death to another or others either by will or by operation of
law. Art. 776. The inheritance includes all the
property, rights and obligations of a person which are not extinguished by his death.
Art. 781. The inheritance of a
person includes not only the property and the transmissible rights and obligations
existing at the time of his death, but also those which have accrued thereto since the
opening of the succession.
In
the present case, respondents, being heirs of Sergio, are now liable to settle his
transmissible obligations, which include the amount due to petitioners, prior to the
distribution of the remainder of Sergio's estate to them, in accordance with Section
1, 10 Rule 90 of the Rules of Court.