Salitico vs. Heirs of Felix, GR. No. 240199, April 10, 2019

DOCTRINE: Article 777 operates at the very moment of the decedent’s death meaning that the transmission by succession occurs at the precise moment of death and, therefore, at that precise time, the heir is already legally deemed to have acquired ownership of his/her share in the inheritance, “and not at the time of declaration of heirs, or partition, or distribution.”

CASE TITLE: Salitico vs. Heirs of Felix GR. No. 240199, April 10, 2019, J. CAGUIOA

FACTS

Amanda Burgos is the registered owner of a 1,413-square-meter parcel of land registered in her name under Original Certificate of Title No. (OCT) P-1908, located in Bambang, Bulacan (subject property). By virtue of a document entitled Huling Habilin ni Amanda H. Burgos dated May 7, 1986 (Huling Habilin), the subject property was inherited by the niece of Amanda, Resurreccion Martinez-Felix, as a devisee.
Thereafter, Resurreccion, as the new owner of the subject property, executed a document entitled Bilihang Tuluyan ng Lupa dated November 10, 1998, which transferred ownership over the parcel of land in favor of the petitioners Isidro and Conrada Salitico (Sps Salitico). The latter then took physical possession of the subject property.
Subsequently, a proceeding for the probate of the Huling Habilin was undertaken before the Regional Trial Court (RTC). The probate was granted. Thereafter, the petitioners Sps. Salitico received a demand letter requiring them to vacate the subject property and surrender possession over it to the respondents’ heirs. To protect their interest over the subject property, the petitioners Sps. Salitico executed an Affidavit of Adverse Claim dated March 17, 2009, which was however denied registration by the respondent RD on November 3, 2009.
Spouses Salitico file a Complaint for Specific Performance with Damages against respondents Heirs of Resurreccion Martinez Felix before the RTC. However,RTC dismissed the complaint for lack of cause of action. The RTC held that the action filed by the petitioners Sps. Salitico is premature on the ground that it was not shown that the Probate Court had already fully settled the Estate of Amanda, even as it was not disputed that the Huling Habilin had already been allowed and certified. Hence, the RTC dismissed the Complaint for the sole reason that the petitioners Sps. Salitico's cause of action had supposedly not yet accrued, as the Estate of Amanda has not yet been fully settled by the Probate Court.
Petitioners Sps. Salitico filed their Motion for Reconsideration, which was denied in the RTC. Hence, the petitioners filed their Notice of Appeal, which was granted by the RTC on June 18, 2015. The appeal was given due course by the Court of Appeal (CA). The CA dismissed the appeal due to the pendency of the probate proceedings before the Probate Court, citing Rule 75, Section 1 of the Rules of Court, which states that no will shall pass either real or personal estate unless it is proved and allowed in the proper court. The CA also cited Rule 90, Section 1, which states that no distribution shall be allowed until the payment of debts, funeral charges, and expenses of administration, allowance to the widow, and inheritance tax have been made, unless the distributees or any of them give a bond in a sum fixed by the court conditioned on the payment of the said obligations.
Hence, this appeal via Petition for Review on Certiorari under Rule 45 of the Rules of Court.
ISSUE
Whether or not the Spouse Salitico can compel the heirs to transfer the certificate of title to their name by virtue of the valid sale that they have with Resurrecion.
HELD
The instant Petition is partly meritorious.
It is not disputed that by virtue of the decedent Amanda's will, i.e., Huling Habilin, Resurreccion inherited the subject property as the designated devisee. The respondents’ heirs themselves admit that Resurreccion is a testamentary heir of Amanda. It is likewise not disputed that Resurreccion sold her interest over the subject property by executing a document entitled Bilihang Tuluyan ng Lupa in favor of the petitioners Sps. Salitico who then proceeded to take physical possession of the subject property.
Article 777 of the Civil Code, which is substantive law, states that the rights of the inheritance are transmitted from the moment of the death of the decedent. Article 777 operates at the very moment of the decedent's death ¬ meaning that the transmission by succession occurs at the precise moment of death and, therefore, at that precise time, the heir is already legally deemed to have acquired ownership of his/her share in the inheritance, "and not at the time of declaration of heirs, or partition, or distribution." Thus, there is no legal bar to an heir disposing of his/her hereditary share immediately after such death.
As applied to the instant case, upon the death of Amanda, Resurreccion became the absolute owner of the devised subject property, subject to a resolutory condition that upon settlement of Amanda's Estate, the devise is not declared inofficious or excessive. Hence, there was no legal bar preventing Resurreccion from entering a contract of sale with the petitioners Sps. Salitico with respect to the former's share or interest over the subject property.
In a contract of sale, the parties' obligations are plain and simple. The law obliges the vendor to transfer the ownership of and to deliver the thing that is the object of sale to the vendee. Therefore, considering that a valid sale has been entered into in the instant case, there is no reason for the respondents’ heirs to withhold from the petitioners Sps. Salitico the owner's duplicate copy of OCT P-1908. However, the existence of a valid sale in the instant case does not necessarily mean that the Registry of Deeds may already be compelled to cancel OCT P-1908 and issue a new title in the name of the petitioners Sps. Salitico.
According to Section 92 of Presidential Decree No. (PD) 1529, otherwise known as the Property Registration Decree, with respect to the transfer of properties subject of testate or intestate proceedings, a new certificate of title in the name of the transferee shall be issued by the Register of Deeds (RD) only upon the submission of a certified copy of the partition and distribution, together with the final judgment or order of the court approving the same or otherwise making final distribution, supported by evidence of payment of estate tax or exemption therefrom, as the case may be.
Hence, under the applicable provisions of PD 1529 and the Rules of Court, it is only upon the issuance by the testate or intestate court of the final order of distribution of the estate or the order in anticipation of the final distribution that the certificate of title covering the subject property may be issued in the name of the distributees.
In the instant case, there is no showing that, in the pendency of the settlement of the Estate of Amanda, the Probate Court had issued an order of final distribution or an order in anticipation of a final distribution, both of which the law deems as requirements before the Registry of Deeds can issue a new certificate of title in the name of the petitioners Sps. Salitico.
To clarify, this holding does not go against Article 777 of the Civil Code whatsoever. What the aforesaid Civil Code provision signifies is that there is no legal bar preventing an heir from disposing his/her hereditary share and transferring such share to another person, since the right thereto is vested or transmitted to the heir from the moment of the death of the decedent or testator. The rule, however, does not state that the transferee may already compel the issuance of a new certificate of title covering the specific property in his/her name.
Hence, reading Article 777 of the Civil Code together with the pertinent provisions of PD 1529 and the Rules of Court, while an heir may dispose and transfer his/her hereditary share to another person, before the transferee may compel the issuance of a new certificate of title covering specific property in his/her name, a final order of distribution of the estate or the order in anticipation of the final distribution issued by the testate or intestate court must first be had.
Therefore, despite the existence of a valid contract of sale between Resurreccion and the petitioners Sps. Salitico, which ordinarily would warrant the delivery of the owner's duplicate copy of OCT P-1908 in favor of the latter, pending the final settlement of the Estate of Amanda, and absent any order of final distribution or an order in anticipation of a final distribution from the Probate Court, the RD cannot be compelled at this time to cancel OCT P-1908 and issue a new certificate of title in favor of the petitioners Sps. Salitico.