THIRD DIVISION
[G.R. No. 112483. October 8, 1999]
ELOY IMPERIAL, petitioner 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, respondents.
D E C I S I O N
GONZAGA-REYES, J.:
Petitioner seeks to set aside the
Decision of the Court of Appeals in C.A.-G.R. CV No. 31976[1], affirming the Decision of the Regional Trial Court
of Legazpi City[2], which rendered inofficious the donation made by
Leoncio Imperial in favor of
herein petitioner, to the extent
that it impairs the legitime of Victor Imperial, and ordering petitioner to
convey to herein private respondents, heirs of said Victor Imperial, that
portion of the donated land proportionate to Victor Imperial’s legitime.
Leoncio Imperial was the registered
owner of a 32,837-square meter parcel of land covered by Original Certificate
of Title No. 200, also known as Lot 45 of the Cadastral Survey of Albay. On July 7, 1951, Leoncio sold the said lot
for P1.00 to his acknowledged natural son, petitioner herein, who then acquired
title over the land and proceeded to subdivide it into several lots. Petitioner and private respondents admit
that despite the contract’s designation as one of “Absolute Sale”, the
transaction was in fact a donation.
On July 28, 1953, or barely two
years after the donation, Leoncio filed a complaint for annulment of the said
Deed of Absolute Sale, docketed as Civil Case No. 1177, in the then Court of
First Instance of Albay, on the ground that he was deceived by petitioner
herein into signing the said document.
The dispute, however, was resolved through a compromise agreement,
approved by the Court of First Instance of Albay on November 3, 1961[3], under which terms: (1) Leoncio recognized the
legality and validity of the rights of petitioner to the land donated; and (2)
petitioner agreed to sell a designated 1,000-square meter portion of the
donated land, and to deposit the proceeds thereof in a bank, for the convenient
disposal of Leoncio. In case of
Leoncio’s death, it was agreed that the balance of the deposit will be
withdrawn by petitioner to defray burial costs.
On January 8, 1962, and pending
execution of the above judgment, Leoncio died, leaving only two heirs --- the
herein petitioner, who is his acknowledged natural son, and an adopted son,
Victor Imperial. On March 8, 1962,
Victor was substituted in place of Leoncio in the above-mentioned case, and it
was he who moved for execution of judgment.
On March 15, 1962, the motion for execution was duly granted.
Fifteen years thereafter, or on
July 26, 1977, Victor died single and without issue, survived only by his
natural father, Ricardo Villalon, who was a lessee of a portion of the disputed
land. Four years hence, or on September
25, 1981, Ricardo died, leaving as his only heirs his two children, Cesar and
Teresa Villalon.
Five years thereafter, or sometime
in 1986, Cesar and Teresa filed a complaint for annulment of the donation with
the Regional Trial Court of Legazpi City, docketed as Civil Case No. 7646. Petitioner moved to dismiss on the ground of
res judicata, by virtue of the compromise judgment rendered by the Court
of First Instance of Albay. The trial
court granted the motion to dismiss, but the Court of Appeals reversed the
trial court’s order and remanded the case for further proceedings.
On October 18, 1989, Cesar and
Teresa filed an amended complaint in the same case, Civil Case No. 7646, for
“Annulment of Documents, Reconveyance and Recovery of Possession” with the
Regional Trial Court of Legazpi City, seeking the nullification of the Deed of
Absolute Sale affecting the above property, on grounds of fraud, deceit and
inofficiousness. In the amended
complaint, it was alleged that petitioner caused Leoncio to execute the
donation by taking undue advantage of the latter’s physical weakness and mental
unfitness, and that the conveyance of said property in favor of petitioner
impaired the legitime of Victor Imperial, their natural brother and
predecessor-in-interest.[4]
In his Answer, petitioner: (1) alleged
that Leoncio had conveyed sufficient property to Victor to cover his legitime,
consisting of 563 hectares of agricultural land in Manito, Albay; (2)
reiterated the defense of res judicata, and (3) raised the additional
defenses of prescription and laches.
Plaintiff Cesar Villalon died on
December 26, 1989, while the case was pending in the Regional Trial Court, and
was substituted in this action by his sons, namely, Antonio, Roberto, Augusto,
Ricardo and Cesar, Jr., all surnamed Villalon, and his widow, Esther H.
Villalon.
The RTC held the donation to be
inofficious and impairing the legitime
of Victor, on the basis of its finding that at the time of Leoncio’s death, he
left no property other than the 32,837-square meter parcel of land which he had
donated to petitioner. The RTC went on
further to state that petitioner’s allegation that other properties existed and
were inherited by Victor was not substantiated by the evidence.[5]
The legitime of Victor was
determined by the trial court in this manner:
Considering that the property donated is 32,837 square meters, one half of that or 16,418 square meters becomes the free portion of Leoncio which could be absorbed in the donation to defendant. The other half, which is also 16,418 square meters is where the legitime of the adopted son Victor Imperial has to be taken.
The proportion of the legitime of the legitimate child (including the adopted child) in relation to the acknowledged natural child (defendant) is 10 is to 5[,] with the acknowledged natural child getting ½ of the legitime of the legitimate (adopted) child, in accordance with Art. 895 of the New Civil Code which provides:
“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.”
From the 16,418 square meters left (after the free portion has been
taken) plaintiffs are therefore entitled to 10,940 square meters while
defendant gets 5,420 square meters.[6]
The trial court likewise held that
the applicable prescriptive period is 30 years under Article 1141 of the Civil
Code[7], reckoned from March 15, 1962, when the writ of
execution of the compromise judgment in Civil Case 1177 was issued, and that
the original complaint having been filed in 1986, the action has not yet
prescribed. In addition, the trial
court regarded the defense of prescription as having been waived, this not
being one of the issues agreed upon at pre-trial.
Thus, the dispositive portion of
the RTC’s Decision of December 13, 1990 reads:
WHEREFORE, premises considered, the Deed of Absolute Sale otherwise known as Doc. No. 8; Book No. 14; Page No. 1; Series of 1951 of the Notarial file of Pompeyo B. Calleja which is considered a donation, is hereby reduced proportionately insofar as it affected the legitime of the late Victor Imperial, which share is inherited by the plaintiffs herein, to the extent that plaintiffs are ordered to be given by defendant a portion of 10,940 square meters thereof.
In order to avoid further conflict, the 10,940 share to be given to plaintiffs should include the portion which they are presently occupying, by virtue of the extended lease to their father Ricardo Villalon, where the bungalow in question stands.
The remaining portion to be given to plaintiffs may come from any other portion that may be agreed upon by the parties, otherwise, this court will appoint a commissioner to undertake the partition.
The other 21,897 square meters should go to the defendant as part of his legitime and by virtue of the reduced donation.
No pronouncement as to damages as they were not sufficiently proved.
SO ORDERED.[8]
The Court of Appeals affirmed the
RTC Decision in toto.
Before us, petitioner questions
the following findings of respondent court: (1) that there was no res
judicata, there being no identity of parties and cause of action between
the instant case and Civil Case No. 1177; (2) that private respondents had a
right to question the donation; (3) that private respondents’ action is barred
by prescription, laches and estoppel; and (4) that the donation was inofficious
and should be reduced.
It is an indispensable requirement
in res judicata that there be, between the first and second action,
identity of parties, of subject matter and of cause of action.[9] A perusal of the records leads us to conclude that
there is no identity of parties and of cause of action as between Civil Case
No. 1177 and Civil Case No. 7646.
Civil Case No. 1177 was instituted by Leoncio in his capacity as donor of
the questioned donation. While it is
true that upon his death, Victor was substituted as plaintiff of the action,
such does not alter the fact that Victor’s participation in the case was in
representation of the interests of the original plaintiff, Leoncio. The purpose behind the rule on substitution
of parties is to ensure that the deceased party would continue to be properly
represented in the suit through the duly appointed legal representative of the
estate[10], or his heir, as in this case, for which no court
appointment is required.[11] Petitioner’s argument, therefore, that there is
substantial identity between Leoncio and private respondents, being heirs and
successors-in-interest of Victor, is unavailing.
Moreover, Leoncio’s cause of
action as donor of the property was fraud, purportedly employed upon him by
petitioner in the execution of the donation.
While the same circumstances of fraud and deceit are alleged in private
respondents’ complaint, it also raises the additional ground of inofficiousness
of donation.
Contrary to petitioner’s
contentions, inofficiousness of donation does not, and could not, form part of
Leoncio’s cause of action in Civil Case No. 1177. Inofficiousness as a cause of action may arise only upon the
death of the donor, as the value of the donation will then be contrasted with
the net value of the estate of the donor-deceased.[12]
Consequently, while in Civil Case
No. 1177, Leoncio sought the revocation in full of the donation on ground of
fraud, the instant case actually has two alternative causes of action. First, for fraud and deceit, under the same
circumstances as alleged in Leoncio’s complaint, which seeks the annulment in
full of the donation, and which the trial court correctly dismissed because the
compromise agreement in Civil Case No. 1177 served as a ratification and waiver
on the part of Leoncio of whatever defects in voluntariness and consent may
have been attendant in the making of the donation. The second cause of action is the alleged inofficiousness of the
donation, resulting in the impairment of Victor’s legitime, which seeks the
annulment, not of the entire donation, but only of that portion diminishing the
legitime.[13] It is on the basis of this second cause of action
that private respondents prevailed in the lower courts.
Petitioner next questions the
right of private respondents to contest the donation. Petitioner sources his argument from Article 772 of the Civil
Code, thus:
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. xxx
As argued by petitioner, when
Leoncio died on January 8, 1962, it was only Victor who was entitled to
question the donation. However, instead
of filing an action to contest the donation, Victor asked to be substituted as
plaintiff in Civil Case No. 1177 and even moved for execution of the compromise
judgment therein.
No renunciation of legitime may be
presumed from the foregoing acts. It
must be remembered that at the time of the substitution, the judgment approving
the compromise agreement has already been rendered. Victor merely participated in the execution of the compromise
judgment. He was not a party to the
compromise agreement.
More importantly, our law on
succession does not countenance tacit repudiation of inheritance. Rather, it requires an express act
on the part of the heir. Thus, under
Article 1051 of Civil Code:
The repudiation of an inheritance shall be made in a public or authentic instrument, or by petition presented to the court having jurisdiction over the testamentary or intestate proceedings.
Thus, when Victor substituted
Leoncio in Civil Case No. 1177 upon the latter’s death, his act of moving for
execution of the compromise judgment cannot be considered an act of
renunciation of his legitime. He was,
therefore, not precluded or estopped from subsequently seeking the reduction of
the donation, under Article 772. 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.
Be that as it may, we find merit
in petitioner’s other assignment of errors.
Having ascertained this action as one for reduction of an inofficious
donation, we cannot sustain the holding of both the trial court and the Court
of Appeals that the applicable prescriptive period is thirty years, under
Article 1141 of the Civil Code. The
sense of both courts that this case is a “real action over an immovable” allots
undue credence to private respondents’ description of their complaint, as one for
“Annulment of Documents, Reconveyance and Recovery of Possession of Property”,
which suggests the action to be, in part, a real action enforced by those with
claim of title over the disputed land.
Unfortunately for private
respondents, a claim for legitime does not amount to a claim of title. In the recent case of Vizconde vs. Court
of Appeals[14], we declared that what is brought to collation
is not the donated property itself, but the value of the property at the time
it was donated. The rationale for this
is that the donation is a real alienation which conveys ownership upon its
acceptance, hence, any increase in value or any deterioration or loss thereof
is for the account of the heir or donee.[15]
What, then, is the prescriptive
period for an action for reduction of an inofficious donation? The Civil Code specifies the following
instances of reduction or revocation of donations: (1) four years, in cases of
subsequent birth, appearance, recognition or adoption of a child;[16] (2) four years, for non-compliance with conditions of
the donation;[17] and (3) 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.[18] Interestingly, donations as in the instant case,[19] the reduction of which hinges upon the allegation of
impairment of legitime, are not controlled by a particular prescriptive period,
for which reason we must resort to the 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.
From when shall the ten-year
period be reckoned? The case of Mateo vs. Lagua, 29 SCRA
864, 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. Clearly so, since it is only then that the
net estate may be ascertained and on which basis, the legitimes may be
determined.
It took private respondents 24
years since the death of Leoncio to initiate this case. The action, therefore, has long prescribed.
As for the trial court’s holding
that the defense of prescription had been waived, it not being one of the
issues agreed upon at pre-trial, suffice it to say that while the terms of the
pre-trial order bind the parties as to the matters to be taken up in trial, it
would be the height of injustice for us to adhere to this technicality when the
fact of prescription is manifest in the pleadings of the parties, as well as
the findings of fact of the lower courts.[20]
A perusal of the factual
antecedents reveals that not only has prescription set in, private respondents
are also guilty of estoppel by laches.
It may be recalled that Leoncio died on January 8, 1962. Fifteen years later, Victor died, leaving as
his sole heir Ricardo Villalon, who also died four years later. While Victor was alive, he gave no
indication of any interest to contest the donation of his deceased father. As we have discussed earlier, the fact that
he actively participated in Civil Case No. 1177 did not amount to a
renunciation of his inheritance and does not preclude him from bringing an
action to claim his legitime. These are
matters that Victor could not possibly be unaware of, considering that he is a
lawyer[21]. Ricardo Villalon was even a lessee of a
portion of the donated property, and could have instituted the action as sole
heir of his natural son, or at the very least, raised the matter of legitime by
way of counterclaim in an ejectment case[22] filed against him by petitioner in 1979. 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.
Estoppel by laches is the failure
or neglect for an unreasonable or unexplained length of time to do that which,
by exercising due diligence, could or should have been done earlier, warranting
a presumption that the person has abandoned his right or declined to assert it.[23] We find the necessity for the application of the
principle of estoppel by laches in this case, in order to avoid an injustice.
A final word on collation of
donations. We observe that after
finding the donation to be inofficious because Leoncio had no other property at
the time of his death, the RTC computed the legitime of Victor based on the
area of the donated property. Hence, in
its dispositive portion, it awarded a portion of the property to private
respondents as Victor’s legitime. This
was upheld by the Court of Appeals.
Our rules of succession require
that before any conclusion as to the legal share due to a compulsory heir may
be reached, the following steps must be taken: (1) the net estate of the
decedent must be ascertained, by deducting all the payable obligations and
charges from the value of the property owned by the deceased at the time of his
death; (2) the value of all donations subject to collation would be added to
it.[24]
Thus, it is the value of
the property at the time it is donated, and not the property itself, which is
brought to collation. Consequently,
even when the donation is found inofficious and reduced to the extent that it
impaired Victor’s legitime, private respondents will not receive a
corresponding share in the property donated.
Thus, in this case where the collatable property is an immovable, what may
be received is: (1) an equivalent, as much as possible, in property of the same
nature, class and quality;[25] (2) if such is impracticable, the equivalent value of
the impaired legitime in cash or marketable securities;[26] or (3) in the absence of cash or securities in the
estate, so much of such other property as may be necessary, to be sold in
public auction.[27]
We believe this worth mentioning,
even as we grant the petition on grounds of prescription and laches.
ACCORDINGLY, the decision of the Court of Appeals in C.A. G.R. CV
No. 31976, affirming in toto the decision of the Regional Trial Court in
Civil Case No. 7646, is reversed and set aside. No costs.
SO ORDERED.
Melo, Vitug, Panganiban, and Purisima, JJ., concur.
[1] Rendered by the Seventh Division. Penned by Associate Justice Nathanael P. De
Pano, Jr., and concurred in by Associate Justices Nicolas P. Lapeña, Jr. and
Ma. Alicia Austria-Martinez.
[2] Branch 10; presided by Judge Antonio A.
Arcangel.
[3] Annex “B” of Petition; Rollo, 43.
[4] Annex C-1 of Petition; Rollo, 52-53.
[5] Ibid., 66-67.
[6] RTC Decision; Rollo, 68-69.
[7] Article 1141 of the Civil Code provides:
“Real actions over immovables prescribe after thirty years. xxx”
[8] RTC Decision; Rollo, 69-70.
[9] Casil vs Court of Appeals, 285 SCRA
264; Municipality of San Juan vs. Court of Appeals,279 SCRA711; Cartlet vs.
Court of Appeals, 275 SCRA 97.
[10] Torres, Jr. vs. Court of Appeals, 278
SCRA 793.
[11] Revised Rules of Court, Rule 3, Sec. 16.
[12] Under Article 771 of the Civil Code,
“(d)onations which in accordance with the provisions of Article 752, are
inofficious bearing in mind the estimated net value of the donor’s property at
the time of his death, shall be reduced with regard to the excess, but this
reduction shall not prevent the donations from taking effect during the life of
the donor, nor shall it bar the donee from appropriating the fruits. xxx.”
[13] See Mateo vs. Lagua, 29 SCRA
864.
[14] 286 SCRA 217; see also Civil Code,
Art. 1071.
[15] Vizconde vs. Court of Appeals, op.
cit.
[16] Civil Code, Art. 763.
[17] Id., Art. 764.
[18] Id., Art. 750.
[19] Governed by Articles 752 and 771 of the Civil Code, which read
thus:
Art. 752. xxx
(N)o person may give or receive, by way of donation, more than what he may give
or receive by will.
The donation shall be inofficious
in all that it may exceed this limitation.
Art.771. Donations which in
accordance with the provisions of Article 752, are inofficious bearing in mind
the estimated net value of the donor’s property at the time of his death, shall
be reduced with regard to the excess, but this reduction shall not prevent the
donations from taking effect during the life of the donor, nor shall it bar the
donee from appropriating the fruits. xxx
[20] See
Revised Rules of Court, Rule 118; Sec. 3 and Rule 9, Sec. 1 which
respectively provide:
Pre-trial order. --- After
the pre-trial conference, the court shall issue an order reciting the actions
taken, the facts stipulated, and evidence marked. Such order shall bind the parties, limit the trial to matters not
disposed of and control the course of the action during the trial, unless
modified by the court to prevent manifest injustice. (Emphasis supplied)
Defenses and objections not
pleaded. --- xxx (W)hen it appears from the pleadings or the evidence on record
that the court has no jurisdiction over the subject matter, that there is an
action pending between the same parties for the same cause, or that the action
is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.
[21] Amended Complaint, Annex C-1 of Petition; Rollo,
52.
[22] Motion to Dismiss Complaint, Annex “D” of
Petition; Rollo, 56-57.
[23] Madeja vs. Patcho, 132 SCRA 540.
[24] Civil Code, Art. 908; Vizconde vs.
Court of Appeals, supra; Mateo vs.
Lagua, supra.
[25] Civil
Code, Article 1073, which provides:
“The donee’s share of the estate
shall be reduced by an amount equal to that already received by him; and his
co-heirs shall receive an equivalent, as much as possible, in property of the
same nature, class and quality.”
[26] Civil
Code, Art. 1074:
“Should the provisions of the
preceding article be impracticable, if the property donated was immovable, the
co-heirs shall be entitled to receive its equivalent in cash or securities, at the
rate of quotation; and should there be neither cash nor marketable securities
in the estate, so much of the other property as may be necessary shall be sold
at public auction. xxx ”
[27] Id.