Primary Holding

The donation made by Da. Petrona Reyes to Leonardo Osorio of her share in her deceased husband's inheritance, even before formal adjudication, is valid because she had a vested right to the inheritance at the time of donation, and such inheritance is not considered "future property" in the prohibitive sense of Article 635 of the Civil Code.

Background

D. Antonio Osorio had a share in a shipping business with Ynchausti & Co. Upon his death, his estate, including this share, was to be partitioned among his heirs, including his widow Da. Petrona Reyes. Before the formal partition, Da. Petrona Reyes donated a portion of her expected inheritance to her son, Leonardo Osorio. This donation later became contested when the shares of stock representing the inherited business interest were inventoried as part of Da. Petrona Reyes' estate after her death.

Facts

• 1. D. Antonio Osorio was a shareholder in Ynchausti & Co.'s shipping business.
• 2. Upon D. Antonio Osorio's death, his heirs initiated estate proceedings.
• 3. Da. Petrona Reyes, D. Antonio's widow, was an heir.
• 4. On February 28, 1914, before the formal partition of D. Antonio's estate, Da. Petrona Reyes donated half of her share in her husband's shipping business interest to her son, Leonardo Osorio.
• 5. This donation was documented and accepted by Leonardo Osorio.
• 6. Later, Da. Petrona Reyes executed a rectifying document on July 3, 1915, after the estate partition was approved on May 10, 1915, by the Court of First Instance of Cavite.
• 7. The share in the shipping business was converted into 610 shares of stock in "Ynchausti Steamship Co."
• 8. Tomasa Osorio, administratrix of Da. Petrona Reyes' estate, included these shares in the inventory of Da. Petrona Reyes' properties, contesting Leonardo Osorio’s claim based on the donation.

Arguments of the Petitioners

• 1. He is the rightful owner of the 610 shares of stock and their dividends due to the valid donation made by his mother, Da. Petrona Reyes.
• 2. The donation was validly accepted and perfected.
• 3. The shares represent the donated portion of Da. Petrona Reyes' inheritance.

Arguments of the Respondents

• 1. The donation made on February 28, 1914, was invalid because it constituted a donation of "future property" as the inheritance was not yet formally adjudicated and therefore Da. Petrona Reyes did not yet have a definitive right to the specific property.
• 2. Even if the donation was valid, the 610 shares of stock representing the steamer "Governor Forbes" are not included in the donation, as this vessel was acquired after D. Antonio Osorio's death with new capital, separate from the original shipping business interest.

Issues

• 1. Is the donation of a share in an inheritance, made before formal adjudication of the estate, a donation of "future property" and therefore void under Article 635 of the Civil Code?
• 2. Are the 610 shares of stock in Ynchausti Steamship Co., representing the steamer "Governor Forbes," included in the donation made by Da. Petrona Reyes?

Ruling

• 1. The Supreme Court ruled that the donation was valid. Da. Petrona Reyes, as an heir, had a vested right to her share in her husband’s inheritance from the moment of his death (in 1912), not just from the date of the partition approval (May 10, 1915). Therefore, the donation was not of "future property" in the prohibited sense of Article 635.
• 2. The Court also found that the 610 shares of stock, representing the value of Da. Petrona Reyes’ share in the steamer "Governor Forbes," were indeed part of the original shipping business interest and were therefore included in the donation. The steamer was acquired using the funds of the existing shipping business and profits accrued to D. Antonio Osorio's estate from its operation.

Doctrines

• 1. Vested Right to Inheritance: Heirs acquire a right to succeed from the moment of the decedent's death. This right is not "future property" even before formal adjudication or possession of the inheritance. (Based on Articles 657 and 661 of the Civil Code).
• 2. Retroactivity of Inheritance Acquisition: The acquisition of hereditary property retroacts to the moment of death. (Based on Article 989 of the Civil Code).
• 3. Liberality in Donations: Donations are acts of liberality, and Da. Petrona Reyes had the right to dispose of her vested inheritance through donation.
• 4. Accession: Ownership of property gives right by accession to all that it produces, naturally or artificially (Article 353 of the Civil Code), applied to dividends accruing to the donated shares.

Key Excerpts

• 1. "A donation can not include future property." (Article 635 of the Civil Code).
• 2. "Ubi eadem est ratio, ibi est eadem legis dispositio" (Where there is the same reason, there is the same rule of law).
• 3. "To close these fundamental ideas which the spirit of articles 634 and 635 develops we must fix our attention to the definition which the Code gives of future properties. They are those of which the donor cannot dispose at the time of making the donation." (Commentary on Article 635 of the Civil Code by Manresa).

Precedents Cited

• 1. The case does not explicitly cite previous cases by name but refers to the principles derived from the Civil Code and commentary by Manresa, which themselves are based on jurisprudence and legal tradition. The reasoning directly applies principles embedded in Civil Code articles.

Statutory and Constitutional Provisions

• 1. Article 635 of the Civil Code: Prohibition against donation of future property.
• 2. Article 634 of the Civil Code: (Impliedly, in context of Manresa’s commentary).
• 3. Article 657 of the Civil Code: Establishes inheritance rights from the moment of death.
• 4. Article 661 of the Civil Code: Reinforces the principle of succession from the moment of death.
• 5. Article 989 of the Civil Code: Retroactivity of inheritance acquisition.
• 6. Articles 177, 827, 831, and 1331 of the Civil Code: Examples where future inheritance can be subject of agreement, to support the idea that vested inheritance can be object of contract/donation.
• 7. Article 1271 of the Civil Code: (Impliedly, in relation to object of contract).
• 8. Article 623 of the Civil Code: Perfection of donation upon concurrence of wills.
• 9. Article 353 of the Civil Code: Principle of accession.