Vda. de Cabalu vs. Spouses Tabu and Laxamana

A contract entered into upon future inheritance is void under Article 1347 of the Civil Code when the succession has not yet been opened, the object forms part of the inheritance, and the promissor has a purely hereditary expectancy. Furthermore, a deed of sale executed after the death of the grantor is null and void, death having terminated contractual capacity, which necessarily renders all derivative titles void.

Faustina Maslum died in 1941 leaving an unprobated holographic will that named Benjamin Laxamana as an heir to a 9,000-square-meter portion of her estate. Benjamin died in 1960. His son, Domingo Laxamana, allegedly executed a deed of sale over the 9,000-square-meter property in favor of Laureano Cabalu in 1975. In 1994, Faustina's heirs executed a deed of extrajudicial succession with partition, adjudicating the 9,000-square-meter lot to Domingo. Domingo subsequently sold half of the property to a nephew in 1995 and registered the remaining 4,500 square meters under his name in 1996. Domingo died on August 4, 1996, but a deed of absolute sale over the remaining portion was purportedly executed on October 8, 1996, in favor of respondent Renato Tabu.

• The Estate of Faustina Maslum: Faustina died in 1941, leaving a holographic will that was never probated. Her estate included a 140,211-square-meter property registered under TCT No. 16776. Benjamin Laxamana, Domingo's father, was named an heir to a 9,000-square-meter portion.
• The 1975 Deed of Sale: Domingo allegedly executed a Deed of Sale of Undivided Parcel of Land on March 5, 1975, disposing of the 9,000-square-meter share to Laureano Cabalu.
• The 1994 Partition: On August 1, 1994, Faustina's forced heirs executed a Deed of Extrajudicial Succession with Partition, adjudicating the 9,000-square-meter lot to Domingo by right of representation following Benjamin's death in 1960.
• Subsequent Transactions: Domingo sold 4,500 square meters to his nephew in December 1995. In May 1996, the remaining 4,500 square meters was registered under Domingo's name under TCT No. 281353.
• The Post-Mortem Sale: Domingo died on August 4, 1996. On October 8, 1996, a Deed of Absolute Sale covering the remaining 4,500 square meters was purportedly executed by Domingo in favor of Renato Tabu, resulting in the issuance of TCT No. 286484, which was later subdivided into TCT Nos. 291338 and 291339.
• Unlawful Detainer and Nullity Actions: Domingo's heirs filed an unlawful detainer case against the Cabalus, which the heirs won. Petitioners subsequently filed a complaint for declaration of nullity, quieting of title, and reconveyance against respondent spouses, anchoring their claim of ownership on the 1975 deed.

• Presumption of Regularity: Petitioner argued that the 1975 deed of sale should be accorded the presumption of regularity as a public document, requiring clear, convincing, and more than preponderant evidence to overturn, and that the sale transferred ownership rights to Laureano Cabalu's heirs.
• Nullity of Post-Mortem Deed: Petitioner maintained that the CA erred in deleting the RTC's declaration of nullity of the 1996 deed of sale and the cancellation of respondent spouses' titles, because the deed was executed after Domingo's death, rendering it void ab initio and producing no legal effects.

• Factual Nature of Issues: Respondent countered that the issues raised involved questions of fact requiring a recalibration of evidence, not questions of law appropriate for a Rule 45 petition.
• Simulation of 1975 Deed: Respondent argued that the presumption of regularity was misplaced because both lower courts found the 1975 deed simulated based on discrepancies in the notary public's signature, PTR, and document number, and the petitioners' failure to assert ownership until after the ejectment case.

• Validity of 1975 Deed: Whether the Deed of Sale of Undivided Parcel of Land executed by Domingo Laxamana in favor of Laureano Cabalu on March 5, 1975, is valid.
• Validity of 1996 Deed: Whether the Deed of Sale executed by Domingo Laxamana in favor of Renato Tabu on October 8, 1996, is null and void.

• Validity of 1975 Deed: The 1975 deed was correctly declared void. The presumption of regularity was rebutted by evidence of simulation, specifically discrepancies in the notary's signature, PTR, and document number, and the suspicious timing of the document's presentation. Even assuming the deed was authentic, the conveyance was void under Article 1347 of the Civil Code as a contract upon future inheritance, Domingo possessing merely an inchoate hereditary right at the time of execution, the succession having not yet been opened, and his mother (a co-heir of Benjamin) still being alive.
• Validity of 1996 Deed: The 1996 deed is a nullity, having been executed after the grantor's death. Death terminates contractual capacity; thus, any contract involving a deceased party is simulated and false, rendering the deed void ab initio. Consequently, TCT No. 286484 and its derivative titles, TCT Nos. 291338 and 291339, are likewise void and must be cancelled. The CA erred in deleting the RTC's ruling on this point.

• Prohibition on Contracts Upon Future Inheritance — Article 1347 of the Civil Code voids any contract entered into upon future inheritance unless expressly authorized by law. The prohibition applies when: (1) the succession has not yet been opened; (2) the object of the contract forms part of the inheritance; and (3) the promissor has an expectancy of a right which is purely hereditary in nature. The Court applied this doctrine to void the 1975 deed, as Domingo's right was merely inchoate at the time, Faustina's will was unprobated, and the succession remained unopened.
• Termination of Contractual Capacity by Death — Contracting parties must be juristic entities at the time of the consummation of the contract; death terminates contractual capacity. A contract executed after the death of a party is undoubtedly simulated, false, and void. The Court applied this doctrine to void the 1996 deed, which was executed two months after Domingo's death, and to cancel all derivative titles arising therefrom.

• "No contract may be entered into upon future inheritance except in cases expressly authorized by law." — Citing Article 1347 of the Civil Code, this provision served as the primary basis for annulling the 1975 deed, reinforcing the principle that hereditary expectancies cannot be the subject of valid contracts prior to the opening of succession.
• "If any one party to a supposed contract was already dead at the time of its execution, such contract is undoubtedly simulated and false and, therefore, null and void by reason of its having been made after the death of the party who appears as one of the contracting parties therein. The death of a person terminates contractual capacity." — This passage articulates the rationale for annulling the 1996 deed, establishing the absolute incapacity of a deceased person to contract and the consequent nullity of such instruments.

• Arrogante v. Deliarte, G.R. No. 152132 (July 24, 2007) — Followed. Cited for the requisites of a void contract upon future inheritance under Article 1347 of the Civil Code, specifically that the succession must be unopened, the object must form part of the inheritance, and the promissor must have a purely hereditary expectancy.
• Gochan and Sons Realty Corp. v. Heirs of Raymundo Baba, 456 Phil. 569 (2003) — Followed. Cited for the doctrine that death terminates contractual capacity, rendering any contract executed after a party's death void and simulated.

• Article 1347, Civil Code — Prohibits contracts upon future inheritance. Applied to void the 1975 deed of sale because Domingo Laxamana was not yet the owner of the property at the time of execution, possessing only an inchoate hereditary right as the succession had not yet been opened.

Presbitero J. Velasco, Jr., Arturo D. Brion, Jose Portugal Perez, Estela M. Perlas-Bernabe.