Estate of Hemady vs.

Luzon Surety
Facts:
Luzon Surety files a claim against the estate of Hemady which the deceased guaranteed as surety when
still alive.

Issue:
Whether or not a solidary guarantor’s liability is extinguished by his death.

Held:
The solidary guarantor’s liability is not extinguished by his death, and that in such event, the Luzon Surety
Co., had the right to file against the estate a contingent claim for reimbursement. The contracts of
suretyship entered into by K. H. Hemady in favor of Luzon Surety Co. not being rendered intransmissible
due to the nature of the undertaking, nor by the stipulations of the contracts themselves, nor by provision
of law, his eventual liability thereunder necessarily passed upon his death to his heirs.

[G.R. No. 149926. February 23, 2005]

UNION BANK OF THE PHILIPPINES, petitioner, vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ
ARIOLA, respondents.

FACTS: On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M.
Santibañez entered into a loan agreement[3] in the amount of P128,000.00. The amount was
intended for the payment of the purchase price of one (1) unit Ford 6600 Agricultural All-
Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed a promissory
note in favor of the FCCC, the principal sum payable in five equal annual amortizations of
P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan agreement,[4] this time
in the amount of P123,156.00. It was intended to pay the balance of the purchase price of
another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1)
unit Howard Rotamotor Model AR 60K. Again, Efraim and his son, Edmund, executed a
promissory note for the said amount in favor of the FCCC. Aside from such promissory note,
they also signed a Continuing Guaranty Agreement[5] for the loan dated December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic will.[6] Subsequently in March
1981, testate proceedings commenced before the RTC of Iloilo City. On April 9, 1981, Edmund,
as one of the heirs, was appointed as the special administrator of the estate of the decedent.[7]
During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister
Florence Santibañez Ariola, executed a Joint Agreement[8] dated July 22, 1981, wherein they
agreed to divide between themselves and take possession of the three (3) tractors; that is, two
(2) tractors for Edmund and one (1) tractor for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the tractor respectively taken by
them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities[9] was executed by
and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor,
among others, assigned all its assets and liabilities to Union Savings and Mortgage Bank.
Demand letters[10] for the settlement of his account were sent by petitioner Union Bank of the
Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to pay. Thus,
on February 5, 1988, the petitioner filed a Complaint[11] for sum of money against the heirs of
Efraim Santibañez, Edmund and Florence. Summonses were issued against both, but the one
intended for Edmund was not served since he was in the United States and there was no
information on his address or the date of his return to the Philippines.[12] Accordingly, the
complaint was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer[13] and alleged that the
loan documents did not bind her since she was not a party thereto. Considering that the joint
agreement signed by her and her brother Edmund was not approved by the probate court, it
was null and void; hence, she was not liable to the petitioner under the joint agreement.
Consequently, trial on the merits ensued and a decision was subsequently rendered by the
court dismissing the complaint for lack of merit. The decretal portion of the RTC decision reads:
The appellate court found that the appeal was not meritorious and held that the petitioner
should have filed its claim with the probate court. It further held that the partition made in the
agreement was null and void, since no valid partition may be had until after the will has been
probated.

ISSUE: Whether or not the joint agreement was valid.

HELD: No, the joint agreement is invalid.

The Court is posed to resolve the following issues: a) whether or not the partition in the
Agreement executed by the heirs is valid; b) whether or not the heirs’ assumption of the
indebtedness of the deceased is valid; and c) whether the petitioner can hold the heirs liable on
the obligation of the deceased.
In testate succession, there can be no valid partition among the heirs until after the will has
been probated. The law enjoins the probate of a will and the public requires it, because unless
a will is probated and notice thereof given to the whole world, the right of a person to dispose
of his property by will may be rendered nugatory. The authentication of a will decides no other
question than such as touch upon the capacity of the testator and the compliance with those
requirements or solemnities which the law prescribes for the validity of a will.[22]
This, of course, presupposes that the properties to be partitioned are the same properties
embraced in the will.[23] In the present case, the deceased, Efraim Santibañez, left a
holographic will[24] which contained, inter alia, the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later after my
demise, shall be distributed in the proportion indicated in the immediately preceding paragraph
in favor of Edmund and Florence, my children.
The question that now comes to fore is whether the heirs’ assumption of the indebtedness of
the decedent is binding. We rule in the negative. The partition being invalid as earlier discussed,
the heirs in effect did not receive any such tractor. It follows then that the assumption of
liability cannot be given any force and effect.
ALVAREZ vs. IAC

May 7, 1990

FACTS:

Aniceto Yanes owned 2 parcels of land Lot 773-A and Lot 773-B. Aniceto Yanes was survived
by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita, Iluminado and
Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio
and Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito)
Albib. It is established that Rufino and his children left the province to settle in other places as a
result of the outbreak of World War II. According to Estelita, from the "Japanese time up to
peace time", they did not visit the parcels of land in question but "after liberation", when her
brother went there to get their share of the sugar produced therein, he was informed that
Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were in possession of Lot 773. After
Fuentebella's death, Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo
Alvarez.

On May 26, 1960, Teodora Yanes and the children of her brother Rufino filed a complaint
against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of
Negros Occidental for the "return" of the ownership and possession of Lots 773 and 823. During
the pendency of said case, Alvarez sold the Lots for P25,000.00 to Dr. Rodolfo Siason. CFI
rendered judgment ordering defendant Rosendo Alvarez to reconvey to plaintiffs the lots.

ISSUE:

WON the liability of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and 773-B could
be legally passed or transmitted by operation of law to the petitioners without violation of law
and due process.

RULING:

The doctrine obtaining in this jurisdiction is on the general transmissibility of the rights and
obligations of the deceased to his legitimate children and heirs. 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 be liquidated and paid from his estate before the residue is
distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from
the estate is ultimately a payment by the heirs or distributees, since the amount of the paid
claim in fact diminishes or reduces the shares that the heirs would have been entitled to
receive.

"Under our law, therefore, the general rule is that a party's contractual rights and obligations
are transmissible to the successors. The rule is a consequence of the progressive
'depersonalization' of patrimonial rights and duties. From the Roman concept of a relation from
person to person, the obligation has evolved into a relation from patrimony to patrimony, with
the persons occupying only a representative position, barring those rare cases where the
obligation is strictly personal, in consideration of its performance by a specific person and by no
other. . . ."Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal
consequences of their father's transaction, which gave rise to the present claim for damages.

Facts:
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private
respondents, Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while
the other private respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was
survivedby her child, Jovita (Jovito) Alib. There are two parcels of land which are involved in this
case. Said lots were registered in the names of the heirs of Aniceto Yanes. Fortunato D.
Santiago was issued a Transfer Certificate of Title. Santiago then sold the lots to Monico B.
Fuentebella, Jr. The lots were sold thereafter Rosendo Alvarez. The Yaneses filed a complaint
against Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros
Occidental for the “return” of the ownership and possession of the lots, and prayed for an
accounting of the produce of the land from 1944 up to the filing of the complaint, and that the
share or money equivalent due the heirs be delivered to them, and damages. During the
pendency of the case, Alvarez sold the lots to Dr. Rodolfo Siason.

ISSUE: Whether the liability arising from the sale of the lots made by Rosendo Alvarez to
Dr.Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after
his death.

As a general rule is that a party’s contractual rights and obligations are transmissible to the
successors. However, in this case Petitioners being the heirs of the late Rosendo Alvarez,
cannot escape the legal consequences of their father’s transaction, which gave rise to the
present claim for damages. That petitioners did not inherit the property involved herein is of no
moment because by legal fiction, the monetary equivalent thereof devolved into the mass of
their father’s hereditary estate, and we have ruled that the hereditary assets are always liable
in their totality for the payment of the debts of the estate.

It must, however, be made clear that petitioners are liable only to the extent of the value of
their inheritance.
USON v. Del Rosario

FACTS:

This is an action for recovery of the ownership and possession of five (5) parcels of land in
Pangasinan, filed by Maria Uson against Maria del Rosario and her four illegit children. Maria
Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands
involved in this litigation. Faustino Nebreda left no other heir except his widow Maria Uson.
However, plaintiff claims that when Faustino Nebreda died in 1945, his common-law wife Maria
del Rosario took possession illegally of said lands thus depriving her of their possession and
enjoyment. Defendants in their answer set up as special defense that Uson and her husband,
executed a public document whereby they agreed to separate as husband and wife and, in
consideration of which Uson was given a parcel of land and in return she renounced her right to
inherit any other property that may be left by her husband upon his death. CFI found for Uson.
Defendants appealed.

ISSUE:

W/N Uson has a right over the lands from the moment of death of her husband.
W/N the illegit children of deceased and his common-law wife have successional rights.
HELD:

Yes. There is no dispute that Maria Uson, is the lawful wife of Faustino Nebreda, former owner
of the five parcels of lands litigated in the present case. There is likewise no dispute that Maria
del Rosario, was merely a common-law wife with whom she had four illegitimate children with
the deceased. It likewise appears that Faustino Nebreda died in 1945 much prior to the
effectivity of the new Civil Code. With this background, it is evident that when Faustino
Nebreda died in 1945 the five parcels of land he was seized of at the time passed from the
moment of his death to his only heir, his widow Maria Uson (Art 777 NCC).As this Court aptly
said, “The property belongs to the heirs at the moment of the death of the ancestor as
completely as if the ancestor had executed and delivered to them a deed for the same before
his death”. From that moment, therefore, the rights of inheritance of Maria Uson over the lands
in question became vested.
The claim of the defendants that Maria Uson had relinquished her right over the lands in
question because she expressly renounced to inherit any future property that her husband may
acquire and leave upon his death in the deed of separation, cannot be entertained for the
simple reason that future inheritance cannot be the subject of a contract nor can it be
renounced.
No. The provisions of the NCC shall be given retroactive effect even though the event which
gave rise to them may have occurred under the prior legislation only if no vested rights are
impaired. Hence, since the right of ownership of Maria Uson over the lands in question became
vested in 1945 upon the death of her late husband, the new right recognized by the new Civil
Code in favor of the illegitimate children of the deceased cannot, therefore, be asserted to the
impairment of the vested right of Maria Uson over the lands in dispute.
RULING

NO. Article 2253 above referred to provides indeed that rights which are declared for the first
time shall have retroactive effect even though the event which gave rise to them may have
occurred under the former legislation, but this is so only when the new rights do not prejudice
any vested or acquired right of the same origin. The law commands that the rights to succession
are transmitted from the moment of death (Article 657, old Civil Code). The new right
recognized by the new Civil Code in favor of the illegitimate children of the deceased cannot,
therefore, be asserted to the impairment of the vested right of Maria Uson over the lands in
dispute.

Borja v. Borja, 46 SCRA 577 | Ang

FACTS: Francisco de Borja filed a petition for probate of the will of his wife who died, Josefa
Tangco, with the CFI of Rizal.

He was appointed executor and administrator, until he died; his son Jose became the sole
administrator. Francisco had taken a 2nd wife Tasiana before he died; she instituted testate
proceedings with the CFI of Nueva Ecija upon his death and was appointed special
administatrix.

Jose and Tasiana entered upon a compromise agreement, but Tasiana opposed the approval of
the compromise agreement.

She argues that it was no valid, because the heirs cannot enter into such kind of agreement
without first probating the will of Francisco, and at the time the agreement was made, the will
was still being probated with the CFI of Nueva Ecija.

ISSUE: W/N the compromise agreement is valid, even if the will of Francisco has not yet been
probated.

HELD: YES, the compromise agreement is valid.

The agreement stipulated that Tasiana will receive P800,000 as full payment for her hereditary
share in the estate of Francisco and Josefa.

There was no attempt to settle or distribute the estate of Francisco de Borja among the heirs
thereto before the probate of his will. The clear object of the contract was merely the
conveyance by Tasiana Ongsingco of any and all her individual share and interest, actual or
eventual, in the estate of Francisco de Borja and Josefa Tangco. There is no stipulation as to any
other claimant, creditor or legatee.
And as a hereditary share in a decedent’s estate is transmitted or vested immediately from the
moment of the death of such causante or predecessor in interest (Civil Code of the Philippines,
Art. 777)there is no legal bar to a successor (with requisite contracting capacity) disposing of
her or his hereditary share immediately after such death, even if the actual extent of such share
is not determined until the subsequent liquidation of the estate.

Bonilla v. Barcena, 71 SCRA 491 | Angliongto

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 CFI of Abra, to quiet title over
certain parcels of land located in Abra.

The defendants filed a motion to dismiss the complaint on the ground that Fortunata Barcena is
dead and, therefore, has no legal capacity to sue. In the hearing for the motion to dismiss,
counsel for the plaintiff confirmed the death of Fortunata Barcena, and asked for substitution
by her minor children and her husband; but the court after the hearing immediately dismissed
the case on the ground that a dead person cannot be a real party in interest and has no legal
personality to sue.

ISSUE: W/N the CFI erred in dismissing the complaint.

HELD: 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.

The records of this case show that the death of Fortunata Barcena took place on July 9, 1975
while the complaint was filed on March 31, 1975. This means that when the complaint was filed
on March 31, 1975, Fortunata Barcena was still alive, and therefore, the court had acquired
jurisdiction over her person.

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.”
This duty was complied with by the counsel for the deceased plaintiff when he manifested
before the respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the
proper substitution of parties in the case.

The respondent Court, however, instead of allowing the substitution, dismissed the complaint
on the ground that a dead person has no legal personality to sue.

This is a grave error. 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 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. There is, therefore, no reason for the respondent Court not to allow their
substitution as parties in interest for the deceased plaintiff.

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. But what the respondent Court did,
upon being informed by the counsel for the deceased plaintiff that the latter was dead, was to
dismiss the complaint.

This should not have been done for under Section 17, Rule 3 of the Rules of Court, it is even the
duty of the court, if the legal representative fails to appear, to order the opposing party to
procure the appointment of a legal representative of the deceased.

Unquestionably, the respondent Court has gravely abused its discretion in not complying with
the clear provision of the Rules of Court in dismissing the complaint of the plaintiff in Civil Case
No. 856 and refusing the substitution of parties in the case.

HEIRS OF IGNACIO CONTI AND ROSARIO CUARIO V. COURT OF APPEALS, ET AL.

GR NO. 118464, December 21, 1998

FACTS: Ignacio Conti, married to Rosario Cuario, and Lourdes Sampayo were co-owners of the
539- square meter lot with improvements, covered by TCT No. T15374. On March 1986,
Sampayo died intestate. On April 1987, the private respondents, all claiming to be collateral
relatives of the deceased Sampayo, filed an action for partition and damages before the
Regional Trial Court of Lucena. Sps.

Conti refused partition because of failure by the respondents to produce documents that will
prove that they were the rightful heirs of the deceased. On August 30, 1987, Conti died and was
substituted by his children as party defendant.
At the trial, private respondents presented evidence to prove that they were the collateral heirs
of the deceased Lourdes Sampayo and therefore entitled to her rights as co-owner of the
subject lot. On the other hand, petitioner Rosario alleged that the subject property was co-
owned in equal shares by her husband Ignacio Conti and Lourdes Sampayo and that her family
had been staying in the property in question since 1937. She also testified that her late husband
paid for the real estate taxes and spent for the necessary repairs and improvements thereon
because there had been an agreement that Lourdes would leave her share of property to them.

Since no will, either testamentary or holographic, was presented by the petitioners, the trial
court declared that private respondents were the rightful heirs of Lourdes Sampayo and
ordered both parties to submit a project partition of the residential house and lot for
confirmation by the court. Petitioners elevated the case to the Court of Appeals contending
that the trial court erred in finding the private respondents were the heirs of Sampayo and that
they were entitled to the partition of the lot and improvements in question.

The Court of Appeals affirmed the decision of the RTC. Petitioners filed a motion for
reconsideration but it was denied.

ISSUES:

1. Whether or not the complaint for partition to claim a supposed share of the deceased co-
owner should not prosper without prior settlement of the latter͛s estate and compliance with all
legal requirements, especially publication; and

2. Whether or not private respondents were able to prove by competent evidence their
relationship with the deceased.

RULING:

1. The Supreme Court ruled that a prior settlement of the estate is not essential before the
heirs can commence any action pertaining to the deceased. As it was ruled in Quison v. Salud:

x x x 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.

It was further elucidated:

Conformably with the foregoing and taken in conjunction with Art. 777 and 494 of the Civil
Code, from the death of Lourdes Sampayo, her rights as a co-owner, incidental to which is the
right to ask for partition at any time or to terminate the co-ownership, were transmitted to her
rightful heirs. In so demanding partition, private respondents merely exercised the right
originally pertaining to the decedent, their predecessor-in-interest. Petitioners’ theory as to the
requirement of publication would have been correct had the action been for the partition of
the estate of Lourdes Sampayo, or if we were dealing with extrajudicial settlement by
agreement between heirs and the summary settlement of estates of small value. But what
private respondents are pursuing is the mere segregation of Lourdes’ one-half share which they
inherited from her through intestate succession. This is a simple case of ordinary partition
between co-owners. The applicable law in point is Sec. 1 of Rule 69 of the Rules of Court.

Sec. 1. Complaint in an action for partition of real estate. – A person having the right to compel
the partition of real estate may do so as in this rule prescribed, setting forth in his complaint
the nature and extent of his title and an adequate description of the real estate of which
partition is demanded and joining as defendants all the other persons interested in the
property.

A cursory reading of the aforecited rule shows that publication is not required as erroneously
maintained by petitioners.

2. The Supreme Court ruled in affirmative. It was held that:

Altogether, the documentary and testimonial evidence submitted are competent and adequate
proofs that private respondents are collateral heirs of Lourdes Sampayo. Private respondents
assert that they are co-owners of one-half (1/2) pro-indiviso share of the subject property by
way of legal or intestate succession.

Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance of a person are transmitted through his death to
another or others either by his will or by operation of law. Legal or intestate succession takes
place if a person dies without a will, or with a void will, or one which has subsequently lost its
validity. If there are no descendants, ascendants, illegitimate children, or a surviving spouse,
the collateral relatives shall succeed to the entire estate of the decedent. It was established
during the trial that Lourdes died intestate and without issue. Private respondents as sister,
nephews and nieces now claim to be the collateral relatives of Lourdes.

Under Art. 172 of the Family Code, the filiation of legitimate children shall be proved by any
other means allowed by the Rules of Court and special laws, in the absence of a record of birth
or a parents admission of such legitimate filiation in a public or private document duly signed
by the parent. Such other proof of ones filiation may be a baptismal certificate, a judicial
admission, a family Bible in which his name has been entered, common reputation respecting
his pedigree, admission by silence, the testimonies of witnesses and other kinds of proof
admissible under Rule 130 of the Rules of Court. By analogy, this method of proving filiation
may also be utilized in the instant case.

Public documents are the written official acts, or records of the official acts of the sovereign
authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a
foreign country. The baptismal certificates presented in evidence by private respondents are
public documents. Parish priests continue to be the legal custodians of the parish records and
are authorized to issue true copies, in the form of certificates, of the entries contained therein.

Petitioners’ objection to the photocopy of the certificate of birth of Manuel Sampayo was
properly discarded by the court a quo and respondent Court of Appeals. According to Sec. 3,
par. (1), Rule 130, of the Rules of Court, when the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself except when
the original has been lost or destroyed or cannot be produced in court, without bad faith on the
part of the offeror. The loss or destruction of the original certificate of birth of Manuel J.
Sampayo was duly established by the certification issued by the Office of the Local Civil
Registrar of Lucena City to the effect that its office was completely destroyed by fire on 27
November 1974 and 30 August 1983, respectively, and as a consequence thereof, all civil
registration records were totally burned.͟

Vitug v. CA

G.R. No. 82027, March 29, 1990

Spouses Dolores and Romarico Vitug entered into a survivorship agreement with the Bank of
American National Trust and Savings Association. The said agreement contained the following
stipulations:

(1) All money deposited and to be deposited with the Bank in their joint savings current account
shall be both their property and shall be payable to and collectible or withdrawable by either or
any of them during their lifetime; and

(2) After the death of one of them, the same shall belong to and be the sole property of the
surviving spouse and payable to and collectible or withdrawable by such survivor
Dolores died naming Rowena Corona in her wills as executrix. Romarico later filed a motion
asking authority to sell certain shares of stock and real property belonging to the estate to
cover his advances to the estate which he claimed were personal funds withdrawn from their
savings account. Rowena opposed on the ground that the same funds withdrawn from the
savings account were conjugal partnership properties and part of the estate. Hence, there
should be no reimbursement. On the other hand, Romarico insists that the same are his
exclusive property acquired through the survivorship agreement.

ISSUE: Whether or not the funds of the savings account subject of the survivorship agreement
were conjugal partnership properties and part of the estate

No. The Court ruled that a Survivorship Agreement is neither a donation mortis causa nor a
donation inter vivos. It is in the nature of an aleatory contract whereby one or both of the
parties reciprocally bind themselves to give or to do something in consideration of what the
other shall give or do upon the happening of an event which is to occur at an indeterminate
time or is uncertain, such as death. The Court further ruled that a survivorship agreement is per
se not contrary to law and thus is valid unless its operation or effect may be violative of a law
such as in the following instances: (1) it is used as a mere cloak to hide an inofficious donation;
(2) it is used to transfer property in fraud of creditors; or (3) it is used to defeat the legitime of a
compulsory heir. In the instant case, none of the foregoing instances were present.
Consequently, the Court upheld the validity of the survivorship agreement entered into by the
spouses Vitug. As such, Romarico, being the surviving spouse, acquired a vested right over the
amounts under the savings account, which became his exclusive property upon the death of his
wife pursuant to the survivorship agreement. Thus, the funds of the savings account are not
conjugal partnership properties and not part of the estate of the deceased Dolores.

FACTS: Romarico Vitug and Nenita Alonte were co-administrators of Dolores Vitug’s (deceased)
estate. Rowena Corona was the executrix. Romarico, the deceased’s husband, filed a motion
with the probate court asking for authority to sell certain shares of stock and real properties
belonging to the estate to cover alleged advances to the estate, which he claimed as personal
funds. The advances were used to pay estate taxes.

Corona opposed the motion on ground that the advances came from a savings account which
formed part of the conjugal partnership properties and is part of the estate. Thus, there was no
ground for reimbursement. Romarico claims that the funds are his exclusive property, having
been acquired through a survivorship agreement executed with his late wife and the bank.

The agreement stated that after the death of either one of the spouses, the savings account
shall belong to and be the sole property of the survivor, and shall be payable to and collectible
or withdrawable by such survivor.

The lower court upheld the validity of the agreement and granted the motion to sell. CA
reversed stating that the survivorship agreement constitutes a conveyance mortis causa which
did not comply with the formalities of a valid will. Assuming that it was a donation inter vivos, it
is a prohibited donation (donation between spouses).

ISSUE: W/N the survivorship agreement was valid.

HELD: YES. The conveyance is not mortis causa, which should be embodied in a will. A will is a
personal, solemn, revocable and free act by which a capacitated person disposes of his property
and rights and declares or complies with duties to take effect after his death. The bequest or
devise must pertain to the testator.

In this case, the savings account involved was in the nature of conjugal funds. Since it was not
shown that the funds belonged exclusively to one party, it is presumed to be conjugal.

It is also not a donation inter vivos because it was to take effect after the death of one party. It
is also not a donation between spouses because it involved no conveyance of a spouse’s own
properties to the other.

It was an error to include the savings account in the inventory of the deceased’s assets because
it is the separate property of Romarico.

Thus, Romarico had the right to claim reimbursement.

A will is a personal, solemn, revocable and free act by which a capacitated person disposes of
his property and rights and declares or complies with duties to take effect after his death.

Survivorship agreements are permitted by the NCC. However, its operation or effect must not
be violative of the law (i.e. used as a cloak to hide an inofficious donation or to transfer
property in fraud of creditors or to defeat the legitime of a forced heir).