Blas v. Santos (1961)

Blas v. Santos (1961)

Topic: Future Inheritance, except when authorized by law (Art. 1347)

PARTIES:

·       Petitioners/Appellants: Maria Gervacio Blas, Manuel Gervacio Blas, Leoncio Gervacio Blas and Loida Gervacio Blas

·       Respondents/Appellants: Rosalina Santos (in her capacity as Special Administratrix of the Estate of the deceased Maxima Santos Vda. De Blas)

FACTS:

·       Simeon Blas contracted a first marriage with Marta Cruz sometime in 1898. They had 3 children, only one of whom (Eulalio) left children Maria, Marta, Lazaro. Lazaro died in 1953 and is surived by 3 legitimate children: Manuel, Leoncio, Loida.

·       Marta died in 1898. Simeon Blas contracted a second marriage with Maxima Santos the following year. At the time of this second marriage, no liquidation of the properties acquired by Simeon Blas and Marta was made.

·       Three of the properties left are fishponds located in Obando, Bulacan. Maxima does not appear to have apported properties to her marriage with Simeon.

·       Dec. 26, 1936 – Simeon executed a last will and testament, stating the ff:

o   “During my second marriage with Maxima, I possessed and acquired wealth and properties, consisting of lands, fishponds and other kinds of properties, the total assessed value of which reached P678,880.00”

o   “1/2 of our properties, after the payment of my and our indebtedness, all these properties having been acquired during marriage (conjugal properties) constitutes the share of my wife Maxima, according to the law.”

·       At the time of the execution of the will, Andres Pascual (son-in-law of Simeon) and Avelina Pascual were present. The will was prepared by Andres Pascual with the help of his wife Avelino Pascual. Andres testified that Simeon asked him to prepare the document.

·       This action was instituted by plaintiffs (Blas) against the administrator of the estate of Maxima Santos, to secure a judicial declaration of 1/2 of the properties left by Maxima, the greater bulk of which are set forth “and described in the project of partition presented in the proceedings for the administration of the estate of the deceased Simeon Blas, had been promised by deceased Maxima to be delivered upon her death and in her will to the plaintiffs, and requesting that the said properties as promised be adjudicated to the plaintiffs.

·       The alleged promise of Maxima is contained in a document executed by her on Dec. 26, 1936 (Exh. A). The complaint also alleges that the plaintiffs are entitled to inherit certain properties enumerated therein, situated in Malabon, Rizal and Obando, Bulacan, but which properties have already been included in the inventory of the estate of the deceased Simeon Blas and evidently partitioned and conveyed to his heirs in the proceedings for Simeon Blas’s estate.

·       Rosalina Santos (administratrix) admitted the allegations of the complaint, that upon the death of Simeon Blas in 1937, Simeon and Marta Cruz begot 3 children, only one of whom (Eulalio) left legitimate descendants. Santos also admits that Simeon contracted a second marriage with Maxima in 1988. She does, however, for lack of sufficient information and belief, knowledge of the first marriage of Simeon and Marta the averment that Simeon and Marta acquired properties in Obando. Santos alleges, as a special defense, that the properties he spouses Blas and Santos had been settled and liquidated in the project of the partition of the estate of Simeon Blas. Pursuant to the project of partition, plaintiffs and some defendants had already received the respective properties adjudicated to them.

·       The trial court rendered judgment dismissing the complaint.

·       The court below held that the will has not created any right in favor of plaintiffs which can serve as a basis for the complaint; neither can it be considered as a valid and enforceable contract for lack of consideration and because it deals with future inheritance.

·       The court declared that Ex. A is not a ‘will’ because it does not comply with the requisites for the execution of a will; nor could be considered as a donation.

ISSUE: W/N the will executed by Simeon is considered void for being a contract involving future inheritance.

·       It is not disputed that the document was prepared at the instance of Simeon for the reason that the conjugal properties of his first marriage had not been liquidated. It is also not disputed that the document was signed by Maxima and a copy was presented in court.

·       Plaintiffs argue that Exh. A is both a trust agreement and a contract in the nature of a compromise to avoid litigation. Defendants argue that it is neither a trust agreement nor a compromise agreement. Considering that the properties of the first marriage of Simeon had not been liquidated when Simeon executed his will, and that such properties were actually included as conjugal properties acquired during the second marriage.

·       However, the Court finds that the execution of the will was ordered by Simeon evidently to prevent his heirs by his first marriage from contesting his will and demanding liquidation of the conjugal properties acquired during the first marriage.

·       Therefore, Exh. A appears to be a compromise defined in Art. 1809 of the Civ. Code of Spain: “Compromise is a contract by which each of the parties in interest, by giving promising or retaining something avoids the provocation of a suit or terminates one which has already been instituted.”

·       Defendants argue that Exh. A is a worthless piece of paper because it is not a will nor a donation mortis causa nor a contract. However, the Court held that it is a compromise and at the same time a contract with sufficient cause or consideration.

·       The contention that it deals with future inheritance is likewise untenable. Exh. A is an obligation or promise made by the marker to transmit 1/2 of her share in the conjugal properties acquired with her husband, which properties are stated or declared to be conjugal properties in the will of the husband. The conjugal properties were in existence at the time of the execution of Exh. A. The promise does not refer to any properties that the marker would inherit upon the death of her husband. The document refers to existing properties which she will receive by operation of law on the death of her husband. That kind of agreement or promise contained in Exh. A is not void under Art. 1271.

·       It will be noted that what is prohibited to be the subject matter of a contract under Art. 1271 is “future inheritance.” Future inheritance is any property or right not in existence or capable of determination at the time of the contract, that a person may in the future acquire by succession.

·       The properties subject of the contract are well-defined properties excising at the time of the agreement, which Simeon Blas declares in his testament as belonging to his wife as her share in the conjugal partnership. Certainly his wife's actual share in the conjugal properties may not be considered as future inheritance because they were actually in existence at the time Exhibit "A" was executed.

·       Exh. A is a compromise to avoid litigation.

JUDGMENT: Judgment appealed from is reversed and the defendant administratrix is ordered to convey and deliver 1/2 of the properties adjudicated to Maxima as her share in the conjugal properties, to the heirs and legatees of her husband Simeon.

Bentir v. Leanda (2000)

Bentir v. Leanda (2000)

Topic: Reformation of Instruments

PARTIES:

·      Petitioners: Yolanda Rosello-Bentir, Samuel Pormida

·      Respondents: Hon. Leanda, Leyte Gulf Traders, Inc.

FACTS:

·      Leyte Gulf Traders, Inc. filed a complaint for reformation of instrument, specific performance, annulment of conditional sale and damages with prayer for writ of injunction against Yolanda Rosello-Bentir.

·      Leyte Gulf Traders alleged that it entered into a Contract of Lease of a parcel of land with Bentir for a period of 20 years starting May 5, 1968. It was extended for another 4 years until May 31, 1992.

·      May 5, 1989 – Bentir sold the leased premises to petitioner spouses Samuel and Charito Pormida. Leyte Gulf Traders questioned the sale alleging that it had a right of first refusal.

·      They filed a case seeking the reformation of the expired Contract of Lease on the ground that its lawyer inadvertently omitted to incorporate in the contract of lease executed in 1968, the verbal agreement or understanding between the parties that in the event Bentir leases or sells the lot after the expiration of the lease, they have the right to equal the highest offer.

·      Bentir filed their answer alleging that the inadvertence of the lawyer who prepared the lease contract is not a ground for reformation. They also contended that Leyte is guilty of laches for not bringing the case for reformation of the lease contract within the prescriptive period often 10 years from its execution.

·      The trial court dismissed the complaint because the action for reformation had already prescribed.

·      The respondent judge reversed the order of dismissal on the grounds that the action for reformation had not yet prescribed and the dismissal was “premature and precipitate,” denying Leyte’s right to procedural due process.

·      The CA denied the motion for reconsideration, finding no grave abuse of discretion on the part of the respondent judge.

ISSUES/HELD: W/N the complaint for reformation of instrument has prescribed. (YES)

·      Leyte had 10 years from 1968, the time when the Contract of Lease was executed, to file an action for reformation. It did so only on May 15, 1992 or 24 years after the cause of action accrued. Hence, the cause of action has become stale and time-barred.

·      The CA, in upholding the ruling of the RTC that the 10 year prescriptive period should be reckoned not from the execution of the contract of lease in 1968, but from the date of the alleged 4 year extension of the lease contract after it expired in 1988. Consequently, when the action for reformation was filed in 1992, it was within 10 years from the extended period of the lease. Leyte and the CA agreed that the extended period of lease was an “implied new lease” within the contemplation of Art. 1670 under which provision, the other terms of the original contract were deemed revived in the implied new lease.

·      The SC does not agree for the ff. reasons:

1.     If the parties agreed to extend the lease contract for 4 years or after the original contract expired in 1998, then Art. 1670 would not apply as the provision speaks of an ‘implied’ new lease.

2.     Even if the supposed 4 year extended lease be considered as an implied new lease under Art. 1670, “the other terms of the original contract” contemplated in said provision are only those terms which are germane to the lessee’s right of continued enjoyment of the property leased.

3.     The prescriptive period of 10 years provided in Art. 1144 applies by operation of law, not by the will of the parties.

·      Thus, the right of action for reformation accrued FROM THE DATE OF THE EXECUTION of the contract of lease in 1968.

JUDGMENT: GRANTED.

DOCTRINE

·      The remedy of reformation of an instrument is grounded on the principle of equity where, in order to express the true intention of the contracting parties, an instrument already executed is allowed by law to be reformed.

·      Reformation of an instrument is that remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties when some error or mistake has been committed.

·      It is predicated on the equitable maxim that equity treats as done that which ought to be done. The rationale of the doctrine is that it would be unjust and unequitable to allow the enforcement of a written instrument which does not reflect or disclose the real meeting of the minds of the parties.

·      However, an action for reformation must be brought within the period prescribed by law, otherwise, it will be barred by the mere lapse of time.

·      Consequently, the courts, as the agencies authorized by law to exercise the power to reform an instrument, must necessarily exercise that power sparingly and with great caution and zealous care.

·      Moreover, the remedy, being an extraordinary one, must be subject to limitations as may be provided by law. Our law and jurisprudence set such limitations, among which is laches.

·      A suit for reformation of an instrument may be barred by lapse of time. The prescriptive period for actions based upon a written contract and for reformation of an instrument is ten (10) years under Article 1144 of the Civil Code.

·      Prescription is intended to suppress stale and fraudulent claims arising from transactions like the one at bar which facts had become so obscure from the lapse of time or defective memory.