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AMELIA P. ARELLANO, REPRESENTED BY HER DULY APPOINTED GUARDIANS, AGNES P. ARELLANO AND NONA P. ARELLANO, PETITIONER, VS. FRANCISCO PASCUAL AND MIGUEL PASCUAL, RESPONDENTS.

FACTS: Angel N. Pascual Jr. died intestate leaving as heirs his siblings, namely: petitioner Amelia P. Arellano represented by daughters Agnes P. Arellano 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 before the Regional Trial Court, respondents alleged, inter alia, that a parcel of land (the donated property) located in 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. The ordered partition of the probate court was faulted by petitioner and in the present petition ascribed as errors of CA the rulings that donated property is part of the estate of Angel Pascual, Jr. subject to collation, that respondents are entitled to legitimes as compulsory heirs and the unequal partitioning of the estate among petitioner and respondent as intestate heirs.

ISSUES: (1) Whether or not the property donated is subject to collation

(2) Whether or not the property of the estate should be equally distributed among the parties.

RULING:

(1) No. The donated property is not subject to collation. 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.
There being no compulsory heir, the decedent 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 and not subject to collation.

(2) Yes. The remaining estate of the decedent should be partitioned equally among his 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. (underscoring supplied)

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

ROLANDO SANTOS, vs. CONSTANCIA SANTOS ALANA

FACTS: Rolando Santos and Constancia Santos Alana are half-blood siblings both asserting their claim over a 39-square meter lot in Manila. It was registered in the name of their father who died intestate in 1986. During his lifetime, Gregorio donated the lot to Rolando which the latter accepted. By virtue of the deed of donation annotated on Gregorio's title, a transfer certificate of title was issued in Rolando's name. In 1991 Constancia Santos filed with the RTC of Manila a complaint for partition and reconveyance against Rolando alleging that during the lifetime of their father, he denied having sold the subject lot to petitioner; that she learned of the donation in 1978; and that the donation is inofficious as she was deprived of her legitime. Rolando countered that respondent's suit is barred by prescription considering that she is aware of his possession of the lot as owner for more than ten (10) years; and that the lot was sold to him by Gregorio. Hence, respondent can no longer claim her legitime. Affirmed on appeal are the findings of the trial court which declared as invalid contract the Deed of Absolute Sale since it was not signed by the parties nor registered in the Registry of Deeds and sustained as valid the deed of donation as it was duly executed by the parties and registered.

ISSUES: (1) Whether or not the donation is inofficious

                (2) Whether or not action of respondent is barred by prescription

RULING: (1) Yes. Pursuant to Article 752 of the Civil Code, a donation is inofficious if it exceeds this limitation - no person may give or receive, by way of donation, more than he may give or receive by will. Gregorio could not donate more than he may give by will. At the time of his death, he left no property other than the entire lot he donated to petitioner and that the deceased made no reservation for the legitime of respondent, his daughter and compulsory heir. The donation is therefore inofficious as it impairs respondent's legitime which, under Article 888 of the Civil Code, consists of one-half (1/2) of the hereditary estate of the father and the mother. Since the parents of both parties are already dead, they will inherit the entire lot, each being entitled to one-half (1/2) thereof.

(2) No. "Donations, the reduction of which hinges upon the allegation of impairment of legitime (as in this case), are not controlled by a particular prescriptive period,” as held in Imperial vs. Court of Appeals but by ordinary rules of prescription. Under Article 1144 of the Civil Code, actions upon an obligation created by law must be brought within ten years from the time the right of action accrues. Thus, the ten-year prescriptive period applies to the obligation to reduce inofficious donations, required under Article 771 of the Civil Code, to the extent that they impair the legitime of compulsory heirs. The case of Mateo vs. Lagua, which involved the reduction for inofficiousness of a donation propter nuptias, recognized that the cause of action to enforce a legitime accrues upon the death of the donor-decedent, since it is only then that the net estate may be ascertained and on which basis, the legitimes may be determined.  Since Gregorio died in 1986, respondent had until 1996 within which to file the action. She filed her suit in 1992, well within the prescriptive period.

ELOY IMPERIAL vs. COURT OF APPEALS, REGIONAL TRIAL COURT OF LEGASPI CITY, CESAR VILLALON, JR., TERESA VILLALON, ANTONIO VILLALON, AUGUSTO VILLALON, ROBERTO VILLALON, RICARDO VILLALON and ESTHER VILLALON

FACTS: Leoncio Imperial, registered owner of a land in Albay sold said lot for P1.00 to his acknowledged natural son, Eloy Imperial who then acquired title over the land. Leoncio and Eloy both admitted that despite the contract’s designation as one of “Absolute Sale”, the transaction was in fact a donation. Two years after the donation, Leoncio filed a complaint for annulment of the said Deed of Absolute Sale, as he was deceived by petitioner into signing the said document. The dispute was resolved through a compromise agreement, approved by CFI Albay, wherein Leoncio recognized the legality and validity of the rights of petitioner to the land donated. In 1962, pending execution of the above judgment, Leoncio died, leaving only two heirs --- Eloy and an adopted son, Victor Imperial who moved for execution of judgment which the court granted upon substitution in place of Leoncio in the case. Fifteen years thereafter, Victor died survived only by his natural father, Ricardo Villalon, a lessee of a portion of the disputed land. Ricardo died, leaving as only heirs his two children, Cesar and Teresa Villalon who filed a complaint for annulment of the donation with the RTC in 1986. Relying on CFI compromise judgment, petitioner moved to dismiss on the ground of res judicata, which RTC granted but reversed by the Court of Appeals remanding the case for further proceedings. In 1989, Cesar and Teresa filed an amended complaint in the same case, for “Annulment of Documents, Reconveyance and Recovery of Possession” with the RTC, seeking to nullify the Deed of Absolute Sale on grounds of fraud, deceit and on inofficiousness as it impaired the legitime of Victor, their natural brother and predecessor-in-interest. Cesar Villalon who died while the case was pending was substituted in this action by his sons Antonio, Roberto, Augusto, Ricardo and Cesar, Jr. and his widow, Esther Villalon. Petitioner alleged but failed to substantiate that Leoncio had conveyed sufficient property to Victor to cover his legitimes, reiterated the defense of res judicata and raised prescription and laches as defenses against respondents.

ISSUES:  (1) Whether or not the donation was inofficious (2) Whether or not respondents have the right to contest the donation and (3) Whether or not action of respondents has prescribed and was barred by laches

RULING: (1) Yes. The subject donation was inofficious and should be reduced as it resulted in the impairment of Victor’s legitime because Leoncio had no other property at the time of his death. Herein respondents seeks the annulment, not of the entire donation, but only of that portion diminishing the legitime. In accordance with Art. 895 of the New Civil Code “the legitime of each of the acknowledged natural children and each of the natural children by legal fiction shall consist of one-half of the legitime of each of the legitimate children or descendants.”

(2) Yes. Article 772 of the Civil Code provides that only those who at the time of the donor’s death have a right to the legitime and their heirs and successors in interest may ask for the reduction of inofficious donations. Victor who was entitled to question the donation did not contest the same but asked to be substituted as plaintiff in the civil case and moved for execution of the compromise judgment therein. No renunciation of legitime may be presumed from his acts as he was not a party to the compromise agreement but merely participated in the execution of the compromise judgment. Moreover, the law on succession does not countenance tacit repudiation of inheritance. Rather, it requires an express act on the part of the heir. He was, therefore, not precluded from subsequently seeking the reduction of the donation. Nor are Victor’s heirs, upon his death, precluded from doing so, as their right to do so is expressly recognized under Article 772, and also in Article 1053: If the heir should die without having accepted or repudiated the inheritance, his right shall be transmitted to his heirs.

(3) Yes. The action has prescribed and is barred by laches. The Civil Code specifies the following instances of reduction or revocation of donations: (a) four years, in cases of subsequent birth, appearance, recognition or adoption of a child; (b) four years, for non-compliance with conditions of the donation; and (c) at any time during the lifetime of the donor and his relatives entitled to support, for failure of the donor to reserve property for his or their support. Donations as in the instant case, the reduction of which hinges upon the allegation of impairment of legitime, are not controlled by a particular prescriptive period but by ordinary rules of prescription. Under Article 1144 of the Civil Code, actions upon an obligation created by law must be brought within ten years from the time the right of action accrues. Thus, the ten-year prescriptive period applies to the obligation to reduce inofficious donations, required under Article 771 of the Civil Code, to the extent that they impair the legitime of compulsory heirs. The cause of action to enforce a legitime accrues upon the death of the donor-decedent since it is only then that the net estate may be ascertained and on which basis, the legitimes may be determined. The action has long prescribed as it took private respondents 24 years since the death of Leoncio to initiate this case. Respondents are also guilty of estoppel by laches. Victor did not contest the donation nor claim his legitimes. Ricardo failed to institute an action as sole heir of Victor. Neither does it help private respondents’ cause that five years have elapsed since the death of Ricardo in 1981 before they filed their complaint with the RTC.

SPS. CARLOS MUNSALUD AND WINNIE MUNSALUD vs. NATIONAL HOUSING AUTHORITY

FACTS: Petitioner Winnie Munsalud is the daughter and one of the compulsory heirs of the late Lourdes Bulado who died in 1985. During the lifetime of Bulado, respondent National Housing Authority (NHA) awarded her a lot pursuant to the "Land for the Landless" program of respondent. She resided at the said property until her death. Winnie assumed the obligation to pay the monthly amortizations. Respondent NHA recognized petitioner spouses' assumption of obligations as their names were reflected in the receipts and they were allowed to occupy the lot. In 1989, petitioners completed the amortization payments evidenced by the annotation “full payment” reflected on the left side portion of the official receipt. Consequently, petitioners demanded that NHA issue in their favor a deed of sale and a title over the property. However, respondent refused. In 2003, petitioners by counsel, sent respondent a letter to issue a deed of sale and title. Respondent did not issue the requested documents but informed petitioners that Winnie's name does not appear as beneficiary. Petitioners replied that Winnie was representing her mother, the late Lourdes Bulado. Respondent did not respond to the reply. Left with no recourse, petitioners instituted a complaint for mandamus with the RTC which dismissed the complaint for the petition is insufficient in form and substance and that there being no reference to any law which respondent by reason of its office, trust or station is especially enjoined as a duty to perform. Petitioner’s motion for reconsideration was likewise denied. On appeal, the Court of Appeals affirmed the dismissal. Hence, this instant petition.

ISSUE: Whether or not the petition for mandamus is sufficient in form and substance

RULING: Yes. The petition for mandamus was sufficient in form and substance. The complaint designated by petitioners as mandamus reveals that it is sufficient in form. It has the caption with the name of the court, the name of the parties, and the docket number. The complaint contains allegations of petitioners' claims. It has a prayer and the date when it was prepared. The signature page shows the signature and name of petitioners' counsel, the counsel's IBP, PTR and Roll of Attorney's Numbers. The complaint was also verified and accompanied by a certificate of non-forum shopping and signed by petitioners as plaintiffs. It was filed personally with the office of the clerk of court.

Substance is one which relates to the material allegations and the character of the relief sought for in the pleading. It is determinative of whether or not a cause of action exists and is the embodiment of the essential facts necessary to confer jurisdiction upon the court. The action commenced by petitioners before the trial court, although designated as mandamus, is in reality an action to perform a specific act. The averments of the complaint are clear. The essential facts are sufficiently alleged as to appraise the court of the nature of the case. The relief sought to be obtained aims to compel respondent to issue a deed of sale and the corresponding title over the property awarded to Bulado. Thus, the Court finds the complaint sufficient in substance. The designation or caption is not controlling, more than the allegations in the complaint, for it is not even an indispensable part of the complaint. There is no need to make reference to any law which respondent by reason of its office is enjoined as a duty to perform. Respondent's duty arose from its contractual obligation under the "Land for the Landless Program."

RURAL BANK OF SIATON, (NEGROS ORIENTAL), INC., vs. VS. FELIX MACAJILOS AND QUIRICO MACAJILOS, JR.

FACTS: Felix and Quirico Macajilos alleged in their complaint that they are the children of the late Gregoria Macalipay Macajilos who during her lifetime owned and possessed a parcel of residential land situated in Negros Oriental. Macajilos inherited the subject property in 1959 upon Gregoria’s death as compulsory heirs of Gregoria, their father Quirico Macajilos, Sr. having predeceased Gregoria. Macajilos allowed Juanito Macalipay, nephew of Gregoria to build a house and to live together with his wife Fidela, and their son, Lamberto on the subject property. Fidela and Lamberto continued to live in the house even after the death of Juanito. In 1975, Fidela executed an "Affidavit of Heirship" before a Notary Public falsely claiming to be the sole heir of Gregoria Macalipay and adjudicating to herself the subject property. She obtained a loan from RBSI where Lamberto was manager using as collateral the subject property but defaulted thus the subject property was foreclosed and sold at public auction with RBSI as the only and highest bidder. Tax declaration was transferred to RBSI for failure of Fidela to redeem the property. Macajilos filed a criminal case for Estafa through falsification of public document against Fidela and Lamberto immediately upon discovery of the foreclosure sale. The trial court declared the foreclosure of the mortgaged property as void ab initio and that the Macajilos brothers were the rightful owners of the subject land. The Court of Appeals affirmed the decision of the trial court in toto.  

ISSUES:          1. Whether or not the Macajilos brothers are the rightful owners of the land.

2. Whether the action of the Macajilos brothers was barred by laches and estoppel.

3. Whether RBSI is a buyer-mortgagee in good faith

RULING:

(1) Yes. The Macajilos brothers are the rightful owners of the subject land. The tax declarations in the name of Gregoria Macalipay are significant because Fidela tacked her claim of ownership to that of Gregoria. Fidela was merely the wife of Juanito. Neither she nor Juanito could inherit from Gregoria whose compulsory heirs are respondents Macajilos. Though tax declarations are not conclusive evidence of ownership, they constitute good indicia of possession in the concept of owner and a claim of title over the property when coupled with uncontested actual possession of the subject property. The "Affidavit of Heirship" was fraudulent and could never be Fidela's source of ownership over the property. Neither could the tax declaration in the name of Fidela and the "Affidavit of Ownership and Possession" be the source of any derivative right of ownership of RBSI over the subject property considering that these documents were the products of a fraudulent scheme.

(2) No. Macajilos brothers are not barred by laches or estoppel from recovering ownership of the subject property. They are not estopped from denying the representations of Fidela that she owns the property because they were never privy to the loan agreements between RSBI and Fidela. The fact that the mortgage and subsequent foreclosure proceedings were duly registered will not cure their nullity because Fidela never owned the property. Neither can respondents be said to have slept on their rights as they have performed acts which showed their intent to assert their rightful ownership over the subject property – investigated and discovered the mortgage over said property with the provincial assessor’s office after coming across the notice of public auction; filed a criminal case against Fidela and Lamberto within a year from the discovery of the fraudulent scheme; took possession of the property and demanded Fidela to vacate after knowing about the foreclosure of the subject property and filed the instant case to remove cloud over the title and/or recovery of real property and for damages against RBSI as an off-shoot of the latter's demand on respondent Quirico to vacate the subject property. Respondents reasonably took steps to assert their ownership over the subject property.

(3)  No. RBSI is a mortgagee-buyer in bad faith. The property was mortgaged three times by Fidela to RBSI. As a banking institution it must have at least exercised due diligence before entering into said contracts because their business is impressed with public interest. It is a standard practice for banks before approving a loan to send representatives to the premises of the land offered as collateral and to investigate who are the real owners thereof. In the case at bar, no investigator was sent to the location of the subject property to verify the real owners thereof. Far from being prudent, RBSI hastily granted the loan without investigation, and placed full faith on the false documents submitted by Fidela. Consequently, it cannot now claim that it acted in good faith on the belief that there was no defect in the title of Fidela. The subject property is an unregistered piece of land and As ruled in David v. Bandin, which was reiterated in Sales v. Court of Appeals "the issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land. One who purchases an unregistered land does so at his peril. His claim of having bought the land in good faith, i.e., without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out that the seller does not actually own the property." Nevertheless, the application of this doctrine will not affect the outcome of this case. RBSI bought the property during the auction sale at its own peril and must suffer the consequences of its failure to investigate the true owners of the subject property.