MODULE 1

CONCEPT AND BASIS OF SUCCESSION

Theory and basis of succession
Right to private property

o Power to dispose property

o Power to make and execute a will and testament

o Basis of testamentary succession

o Will of the decedent is the causal element of succession

RIGHT OF THE FAMILY

o THE FAMILY IS THE HEART AND SOUL OF SOCIETY

o IDEA OF SUCCESSION MUST, THEREFORE, REVOLVE AROUND IT

o INTESTATE SUCCESSION IS THE NORMAL KIND OF SUCCESSION

o TESTATE SUCCESSION IS MORE OF AN EXCEPTION

SUCCESSION IS A MODE OF ACQUIRING OWNERSHIP

Art. 712. Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted
by law, by donation, by estate and intestate succession, and in consequence
of certain contracts, by tradition.

They may also be acquired by means of prescription.

WHAT IS SUCCESSION

Art. 774. 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. (n)
CIVIL LAW; WILLS AND SUCCESSION; HEREDITARY SHARE IN ESTATE
VESTS FROM THE MOMENT OF DEATH OF DECEDENT; SHARE
IMMEDIATELY DISPOSABLE. — The hereditary share in a decedent's
estate is transmitted or vested immediately from the moment of the death of
the causante or predecessor in interest (Civil Code of the Philippines, Art.
777, [3], and 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.

The effect of such alienation is to be deemed limited to what is ultimately

adjudicated to the vendor heir, but the aleatory character of the contract
does not affect the validity of the transaction. (Tangco v. Vda. de De Borja,
G.R. No. L-28040, [August 18, 1972], 150-B PHIL 486-509)
SUBJECTS OF SUCCESSION

DECEDENT

Art. 775. In this Title, "decedent" is the general term applied to the person
whose property is transmitted through succession, whether or not he left
a will. If he left a will, he is also called the testator. (n)
HEIR
Art. 782. An heir is a person called to the
succession either by the provision of a will or by
operation of law.

Devisees and legatees are persons to whom gifts of

real and personal property are respectively given by
virtue of a will. (n)
JURIDICAL ENTITIES AS HEIRS

Art. 1026. A testamentary disposition may be made to

the State, provinces, municipal corporations, private
corporations, organizations, or associations for
religious, scientific, cultural, educational, or charitable
purposes.

All other corporations or entities may succeed under a

will, unless there is a provision to the contrary in their
charter or the laws of their creation, and always subject
to the same. (746a)
Art. 1029. Should the testator dispose of the whole
or part of his property for prayers and pious
works for the benefit of his soul, in general terms
and without specifying its application, the
executor, with the court's approval shall deliver
one-half thereof or its proceeds to the church or
denomination to which the testator may belong,
to be used for such prayers and pious works,
and the other half to the State, for the purposes
mentioned in Article 1013. (747a)
OBJECT OF SUCCESSION

Transmissible rights and obligations

Art. 776. The inheritance includes all the property, rights

and obligations of a person which are not extinguished by
his death. (659)

Art. 781. The inheritance of a person includes not only the

property and the transmissible rights and obligations
existing at the time of his death, but also those which
have accrued thereto since the opening of the
succession. (n)
Art. 1311. Contracts take effect only between the parties, their assigns
and heirs, except in case where the rights and obligations arising from
the contract are not transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the property
he received from the decedent.

If a contract should contain some stipulation in favor of a third person,

he may demand its fulfillment provided he communicated his
acceptance to the obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The contracting parties
must have clearly and deliberately conferred a favor upon a third
person. (1257a)
TRANSMISSIBLE OBLIGATIONS
Petitioners further contend that the liability arising
from the sale of Lots No. 773-A and 773-B 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. llcd
Such contention is untenable for it overlooks …on
the general transmissibility of the rights and
obligations of the deceased to his legitimate children
and heirs. Thus, the pertinent provisions of the Civil
Code state:
(Alvarez v. Intermediate Appellate Court, G.R. No.
68053, [May 7, 1990], 263 PHIL 704-718)
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. 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. ||| (Alvarez v. Intermediate Appellate Court,
G.R. No. 68053, [May 7, 1990], 263 PHIL 704-718)
INHERITANCE INCLUDES ALL PROPERTY, RIGHTS AND
OBLIGATIONS NOT EXTINGUISHED BY DEATH.

Under Article 776 of the New Civil Code, inheritance includes all the
property, rights and obligations of a person, not extinguished by his
death. Conformably, whatever rights Dr. Jorge Rabadilla had by
virtue of subject Codicil were transmitted to his forced heirs, at the
time of his death. ||| (Rabadilla v. Court of Appeals, G.R. No. 113725,
[June 29, 2000], 390 PHIL 11-36)
RIGHTS AND OBLIGATIONS EXTINGUISHED BY DEATH

By considering the document, petitioner NHA should have noted that the original
applicant has already passed away. Margarita Herrera passed away on October 27,
1971. The NHA issued its resolution on February 5, 1986. The NHA gave due course to
the application made by Francisca Herrera without considering that the initial applicant's
death would transfer all her property, rights and obligations to the estate including
whatever interest she has or may have had over the disputed properties.

To the extent of the interest that the original owner had over the property, the same
should go to her estate. Margarita Herrera had an interest in the property and that
interest should go to her estate upon her demise so as to be able to properly distribute
them later to her heirs — in accordance with a will or by operation of law.

The death of Margarita Herrera does not extinguish her interest over the property.
Margarita Herrera had an existing Contract to Sell with NHA as the seller. (National
Housing Authority v. Almeida, G.R. No. 162784, [June 22, 2007], 552 PHIL 453-469)
CONTRACTS; BINDING EFFECT OF CONTRACTS UPON HEIRS OF
DECEASED PARTY. — The binding effect of contracts upon the heirs of the
deceased party is not altered by the provision in the 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 39).

The reason is that whatever payment is thus made from the estate is
ultimately a payment by the heirs and distributes, since the amount of the paid
claim in fact diminishes or reduces the shares that the heirs would have been
entitled to receive.

The general rule, therefore, is that a party's contractual rights and obligations
are transmissible to the successors.||| (Estate of K.H. Hemady v. Luzon Surety
Co., Inc., G.R. No. L-8437, [November 28, 1956], 100 PHIL 388-398)
RULE ON MONEY CLAIMS
RULE 86, SECTION 5
SECTION 5. Claims which must be filed under the notice. If not filed, barred;
exceptions. - All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims
for funeral expenses and expenses for the last sickness of the decedent, and
judgment for money against the decedent, must be filed within the time limited
in the notice; otherwise they are barred forever, except that they may be set
forth as counterclaims in any action that the executor or administrator may
bring against the claimants. Where an executor or administrator commences
an action, or prosecutes an action already commenced by the deceased in his
lifetime, the debtor may set forth by answer the claims he has against the
decedent, instead of presenting them independently to the court as herein
provided, and mutual claims may be set off against each other in such action;
and if final judgment is rendered in favor of the defendant, the amount so
determined shall be considered the true balance against the estate, as though
the claim had been presented directly before the court in the administration
proceedings. Claims not yet due, or contingent, may be approved at their
present value.
Opening of Succession
Art. 777. The rights to the succession are
transmitted from the moment of the death of the
decedent.

Art. 533. The possession of hereditary property

is deemed transmitted to the heir without
interruption and from the moment of the death of
the decedent, in case the inheritance is
accepted.
One who validly renounces an inheritance is
deemed never to have possessed the same.
PRESUMPTION OF DEATH
Art. 390. After an absence of seven years, it being unknown whether or not
the absentee still lives, he shall be presumed dead for all purposes, except
for those of succession.

The absentee shall not be presumed dead for the purpose of opening his
succession till after an absence of ten years. If he disappeared after the age
of seventy-five years, an absence of five years shall be sufficient in order that
his succession may be opened. (n)
Art. 391. The following shall be presumed dead for
all purposes, including the division of the estate
among the heirs:

(1)A person on board a vessel lost during a sea

voyage, or an aeroplane which is missing, who has
not been heard of for four years since the loss of
the vessel or aeroplane;

(2) A person in the armed forces who has taken

part in war, and has been missing for four years;

(3) A person who has been in danger of death

under other circumstances and his existence has
not been known for four years. (n)
INHERITANCE OF SHARES OF STOCK

Simply stated, the transfer of title by means of

succession, though effective and valid between
the parties involved (i.e., between the
decedent's estate and her heirs), does not bind
the corporation and third parties. The transfer
must be registered in the books of the
corporation to make the transferee-heir a
stockholder entitled to recognition as such both
by the corporation and by third parties. (Reyes
v. Regional Trial Court of Makati, Branch 142,
G.R. No. 165744, [August 11, 2008], 583 PHIL
591-617)
APPLICATION OF THIS RULE
SHARES OF STOCK PERTAINS TO UNDIVIDED INTEREST

In the present case, each of Anastacia's heirs holds only an undivided

interest in the shares. This interest, at this point, is still inchoate and
subject to the outcome of a settlement proceeding; the right of the heirs to
specific, distributive shares of inheritance will not be determined until all
the debts of the estate of the decedent are paid. In short, the heirs are only
entitled to what remains after payment of the decedent's debts; whether
there will be residue remains to be seen. (Reyes v. Regional Trial Court of
Makati, Branch 142, G.R. No. 165744, [August 11, 2008], 583 PHIL 591-
617)
HOWEVER, IF THE SHARES PERTAIN TO DEFINITE AND SPECIFIC NUMBER
OF SHARES, REGISTRATION IN THE CORPORATE BOOKS IS NOT REQUIRED
We note, in relation with the above statement, that in Abejo v. Dela Cruz and TCL
Sales Corporation v. Court of Appeals we did not require the registration of the transfer
before considering the transferee a stockholder of the corporation (in effect upholding
the existence of an intra-corporate relation between the parties and bringing the case
within the jurisdiction of the SEC as an intra-corporate controversy). A marked
difference, however, exists between these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a
specific number of shares of the corporation; after the transferee had established prima
facie ownership over the shares of stocks in question, registration became a mere
formality in confirming their status as stockholders. In the present case, each of
Anastacia's heirs holds only an undivided interest in the shares.
(Reyes v. Regional Trial Court of Makati, Branch 142, G.R. No. 165744, [August
11, 2008], 583 PHIL 591-617)
EXCEPTIONS TO THE RULE ON RIGHT TO LEGITIME EFFECTIVE UPON DEATH

ARTICLE 50. The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43
and by Article 44 shall also apply in the proper cases to marriages which are
declared ab initio or annulled by final judgment under Articles 40 and 45.

The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the common
children, and the delivery of third presumptive legitimes, unless such matters had
been adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.
ARTICLE 51. In said partition, the value of the presumptive legitimes of all
common children, computed as of the date of the final judgment of the trial
court, shall be delivered in cash, property or sound securities, unless the
parties, by mutual agreement judicially approved, had already provided for
such matters.

The children or their guardian or the trustee of their property may ask for
the enforcement of the judgment.

The delivery of the presumptive legitimes herein prescribed shall in no way

prejudice the ultimate successional rights of the children accruing upon the
death of either or both of the parents; but the value of the properties
already received under the decree of annulment or absolute nullity shall be
considered as advances on their legitime. (n)
KINDS OF SUCCESSION

TESTAMENTARY SUCCESSION

Art. 779. Testamentary succession is that which results from

the designation of an heir, made in a will executed in the
form prescribed by law. (n)
INTESTATE SUCCESSION
Art. 960. Legal or intestate succession takes place:

(1) If a person dies without a will, or with a void will, or

one which has subsequently lost its validity;

(2) When the will does not institute an heir to, or dispose
of all the property belonging to the testator. In such case,
legal succession shall take place only with respect to the
property of which the testator has not disposed;
Continuation….

3) If the suspensive condition attached to the institution of heir

does not happen or is not fulfilled, or if the heir dies before the
testator, or repudiates the inheritance, there being no
substitution, and no right of accretion takes place;

(4) When the heir instituted is incapable of succeeding, except

in cases provided in this Code. (912a)
MIXED SUCCESSION

Art. 780. Mixed succession is that effected partly by will and partly by
operation of law. (n)
CONTRACTUAL SUCCESSION

ARTICLE 84. If the future spouses agree

upon a regime other than the absolute
community of property, they cannot donate
to each other in their marriage settlements
more than one-fifth of their present
property. Any excess shall be considered
void.

Donations of future property shall be

governed by the provisions on
testamentary succession and the
formalities of wills. (130a)