Imperial v. Court of Appeals 316 SCRA 393 - Digest

Imperial v.
Court of Appeals 316 SCRA 393

Gonzaga-Reyes, J.
FACTS
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 contracts designation
as one of Absolute Sale, the transaction was in fact a 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 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 Leoncios 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be withdrawn by petitioner to defray burial costs.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 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. In the amended complaint, it was alleged that petitioner caused
Leoncio to execute the donation by taking undue advantage of the latters 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.
RTC Ruling
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 Leoncios 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 petitioners allegation that other properties existed and were inherited by
Victor was not substantiated by the evidence.
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.
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.
The Deed of Absolute Sale 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.
CA Ruling
The Court of Appeals affirmed the RTC Decision in toto.
ISSUES
(1) Whether or not private respondents had a right to question the donation.
(2) Whether or not private respondents’ action is barred by prescription, laches, and
estoppel.
(3) Whether or not donation was inofficious and should be reduced.
HELD
1. Yes, respondents had a right to question the donation.
Article 772 of the Civil Code provides:
Only those who at the time of the donors death have a right to the legitime and their
heirs and successors in interest may ask for the reduction of inofficious donations.
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.
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 latters 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 Victors 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.
2. Yes, the action already prescribed.

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; (2)
four years, for non-compliance with conditions of the donation; 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.
Interestingly, 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, 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.
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.
3. Yes, the donation is inofficious BUT cannot be reduced in favor of the

respondents.
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.
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 Victors 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; (2)
if such is impracticable, the equivalent value of the impaired legitime in cash or marketable securities; 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.

Imperial v. Court of Appeals 316 SCRA 393 - Digest

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Imperial v.

Court of Appeals 316 SCRA 393

2. Yes, the action already prescribed.

3. Yes, the donation is inofficious BUT cannot be reduced in favor of the

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