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MARIANO B. LOCSIN v. CA

FACTS:

The case involves a petition for review on certiorari seeking a reversal of the decision of the Court of Appeals in favor of the plaintiffs in an action for recovery of real property with damages. The late Getulio Locsin had three children named Mariano, Julian, and Magdalena. After his death, his estate was divided among his children. Mariano Locsin, the son, inherited coconut lands, riceland, and residential lots, which he brought into his marriage with Catalina Jaucian. Mariano executed a will instituting his wife as the sole heir of his properties. The will was probated without opposition, and Catalina was appointed executrix of Mariano's estate. After Mariano's death, Catalina began transferring properties to their respective nephews and nieces, as per the agreement between her and Mariano. Various sales and donations were made to Mariano's Locsin relatives.

Doña Catalina Jaucian Vda. de Locsin conveyed several properties to her nephews, nieces, and others through various deeds of sale and absolute sale. She also made a will in 1973, affirming and ratifying the transfers she made during her lifetime. Her relatives agreed not to submit the will for probate because the properties devised to them had already been conveyed to them by the deceased when she was still alive, except for some legacies that the executor distributed. Doña Catalina passed away on July 6, 1977.

In 1989, some of her Jaucian nephews and nieces filed a lawsuit in the Regional Trial Court to recover the properties she conveyed to the Locsin family during her lifetime. They claimed that the conveyances were made without consideration and were intended to circumvent the laws on succession. The closest relatives of Doña Catalina did not join the action.

After the trial, the court rendered a judgment in favor of the Jaucian plaintiffs, declaring them as the rightful heirs and entitled to the entire estate of Doña Catalina. The court also declared the deeds of sale and absolute sale in favor of the Locsin defendants as null and void.

ISSUES:

  1. Whether the properties transferred by Doña Catalina to the Locsin defendants during her lifetime should be considered part of her hereditary estate.

  2. Whether the private respondents, as nephews and nieces of Doña Catalina, are entitled to inherit the properties.

  3. Whether the transactions made by Doña Catalina were valid and binding.

  4. Whether the action for annulment and reconveyance is already barred by prescription.

  5. Whether or not the subject transactions were recorded in the Registry of Property

  6. Whether the action filed by the private respondents should be considered as an action based on fraud or one to redress an injury to their rights

RULING:

  1. The properties transferred by Doña Catalina to the Locsin defendants during her lifetime should not be considered part of her hereditary estate. The rights to a person's succession are transmitted from the moment of his death, and property transferred or conveyed by the decedent during her lifetime no longer forms part of her estate at the time of her death. Only the property that remained in her estate at the time of her death devolves to her legal heirs.

  2. The private respondents, as nephews and nieces of Doña Catalina, are not entitled to inherit the properties transferred by her to the Locsin defendants. The private respondents are not compulsory heirs of Doña Catalina, and they do not have legitimes that can be impaired by the transfers. Therefore, the private respondents cannot invoke their rights to her succession.

  3. The Court found that the transactions made by Doña Catalina were valid and binding. There was no suggestion in the record that she was mentally incompetent when she made these dispositions. She sold properties not only to the Locsin family but also to the Jaucian family, which shows that she was capable of making independent decisions. The Court also noted that Doña Catalina's close relatives did not join the suit to annul the transactions, demonstrating that she acted freely in making these conveyances.

  4. The Court held that the action for annulment and reconveyance is already barred by prescription. The action was filed decades after the transactions were consummated and six years after Doña Catalina's death. Under the law, such actions prescribe four years after the subject transactions are recorded in the Registry of Property.

  5. The petition for review is granted. The decision of the Court of Appeals is reversed and set aside. The complaint for annulment of contracts and reconveyance of properties filed by the private respondents is dismissed.

PRINCIPLES:

  • The rights to a person's succession are transmitted from the moment of his death, and property transferred or conveyed by the decedent during her lifetime no longer forms part of her estate at the time of her death.

  • Only the property that remained in the decedent's estate at the time of her death devolves to her legal heirs.

  • The right to impugn and compel the reduction or revocation of a decedent's gifts inter vivos only applies to compulsory heirs.

  • Expectancy of inheritance does not restrict the freedom of a person to dispose of her property during her lifetime.

  • The limitation set forth in Article 750 of the Civil Code, which allows the reduction of a donation upon petition of any affected person, only applies if the donor reserves sufficient means for his support and the support of all relatives entitled to be supported by him.

  • A party challenging the validity of a transaction must prove that the person who made the transaction was mentally incompetent or was subjected to fraud, undue pressure, or subtle manipulations.

  • The prescription period for actions for annulment and reconveyance is four years from the recording of the subject transactions in the Registry of Property.

  • Registration of deeds in the Registry of Property serves as constructive notice to the whole world.

  • A party cannot feign ignorance of registered transactions.

  • The action filed should be based on either fraud or to redress an injury to the rights of the party.