The Supreme Court ruled in Milagros de Belen Vda. de Cabalu vs. Renato Tabu that a sale of property based on a future inheritance is void and that a deed executed after the death of the seller is also invalid. This decision underscores the importance of proper estate planning and adherence to legal requirements in property transactions. It clarifies that only existing rights can be validly transferred, and contracts require living parties at the time of execution, protecting the integrity of land titles and the rights of lawful heirs.

From Holographic Wills to Voided Deeds: Unraveling a Tarlac Land Dispute

This case revolves around a 9,000 square meter lot in Tarlac, originally part of a larger property owned by Faustina Maslum. Faustina died in 1941, leaving a holographic will that was never probated. Years later, her heirs executed a Deed of Extra-Judicial Succession with Partition, transferring a portion of the land to Domingo Laxamana. This seemingly straightforward transfer became complicated when Domingo purportedly sold the land to two different parties, leading to a legal battle over ownership.

The petitioners, the Cabalu family, claimed ownership based on a Deed of Sale executed in 1975 between Domingo and Laureano Cabalu. However, the respondents, the Tabu spouses, presented a later Deed of Absolute Sale, purportedly executed in their favor by Domingo in 1996. The Regional Trial Court (RTC) initially declared both deeds void, a decision that was partially modified by the Court of Appeals (CA). The CA affirmed the nullity of the 1975 deed but reinstated the validity of the title transferred to the Tabu spouses, leading to the Supreme Court appeal.

The central legal issues revolved around the validity of the two deeds of sale. First, the Supreme Court examined the 1975 Deed of Sale between Domingo and Laureano Cabalu. The Court agreed with the lower courts that this deed was indeed null and void. One key reason was that, at the time of the sale, Domingo was not yet the owner of the property. He only became an owner in 1994, after the Deed of Extrajudicial Succession with Partition was executed. As such, the 1975 sale constituted a contract upon future inheritance, which is generally prohibited under Philippine law.

Article 1347 of the Civil Code states: “No contract may be entered into upon future inheritance except in cases expressly authorized by law.”

The Supreme Court emphasized that for a contract to be valid, the seller must have the right to transfer ownership at the time of the sale. Selling property one does not yet own is akin to selling a future inheritance, which is legally untenable.

The Court cited the case of Arrogante v. Deliarte, further clarifying the requisites that characterize a contract entered into upon future inheritance as void:

(1) the succession has not yet been opened; (2) the object of the contract forms part of the inheritance; and (3) the promissor has, with respect to the object, an expectancy of a right which is purely hereditary in nature.

In this case, all three requisites were present. Faustina’s will was not yet probated at the time of the 1975 sale, the property was part of a future inheritance, and Domingo only had an inchoate hereditary right.

Turning to the second Deed of Sale, the one purportedly executed by Domingo in favor of Renato Tabu in 1996, the Supreme Court found it to be even more problematic. The evidence clearly showed that Domingo had already passed away two months prior to the supposed execution of this deed. A dead person cannot enter into a contract. The Court emphasized that a valid contract requires living parties with the capacity to consent.

The death of a person terminates contractual capacity.

Because Domingo was deceased at the time of the purported sale, the deed was deemed a complete nullity. Consequently, the transfer of title to Renato Tabu was also void, and the titles derived from that transfer (TCT Nos. 291338 and 291339) were likewise invalid. The Court firmly stated that a void contract produces no legal effects and transmits no rights whatsoever.

The Court pointed out the Court of Appeals erred in deleting the portion of the RTC decision that declared the Deed of Absolute Sale dated October 8, 1996 null and void, along with the cancellation of TCT Nos. 291338 and 291339. The Supreme Court thus reinstated the RTC’s original ruling on this matter.

In summary, the Supreme Court’s decision in this case underscores two fundamental principles of Philippine property law. First, one cannot validly sell property that constitutes a future inheritance. Second, a contract requires living parties with the capacity to consent, and a deed executed after the death of a party is void ab initio. These principles serve to protect the integrity of land titles and the rights of lawful heirs.

FAQs

What was the key issue in this case?	The central issues were the validity of two Deeds of Sale: one involving a future inheritance and another purportedly executed after the seller’s death. The court examined whether these circumstances rendered the sales null and void.
What is a “future inheritance” under Philippine law?	A future inheritance refers to property that a person expects to inherit in the future. Philippine law generally prohibits contracts involving future inheritance, except in specific cases.
Why is a contract involving future inheritance generally void?	Such contracts are generally void because they involve property rights that have not yet vested in the seller. The seller does not have the right to dispose of property they do not yet own.
What happens to a title derived from a void contract?	If the original contract is void, any title derived from that contract is also void. A void contract cannot transfer any rights or create any valid ownership claims.
Can a dead person enter into a contract?	No, a dead person cannot enter into a contract. A valid contract requires living parties with the legal capacity to give consent.
What is the effect of a deed executed after the death of the seller?	A deed executed after the death of the seller is considered void from the beginning (void ab initio). It has no legal effect and cannot transfer ownership of the property.
What was the Court’s ruling on the 1975 Deed of Sale?	The Court ruled that the 1975 Deed of Sale was void because Domingo Laxamana was not yet the owner of the property at the time of the sale. It was considered a contract involving future inheritance.
What was the Court’s ruling on the 1996 Deed of Sale?	The Court ruled that the 1996 Deed of Sale was void because it was purportedly executed after the death of Domingo Laxamana. A dead person cannot enter into a valid contract.
What is the significance of this case?	This case reinforces the importance of adhering to legal requirements in property transactions. It also underscores the need for proper estate planning to ensure the orderly transfer of property rights.

The Cabalu vs. Tabu case serves as a stark reminder of the legal pitfalls involved in informal property arrangements and the critical importance of proper documentation and timing in real estate transactions. It highlights the necessity of ensuring that all parties to a contract are legally capable and that the property being transferred is indeed owned by the seller at the time of the sale. Failure to adhere to these principles can result in costly and protracted legal battles, ultimately leading to the invalidation of property transfers.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MILAGROS DE BELEN VDA. DE CABALU v. RENATO TABU, G.R. No. 188417, September 24, 2012