The Supreme Court (SC) has ruled that a waiver of rights over inherited property in favor of another person can constitute a valid donation, clarifying that the nature of the transfer depends on the substance and intent of the instrument rather than its title alone.
In a decision penned by Associate Justice Jhosep Y. Lopez, the SC Second Division upheld waivers executed by two heirs in favor of their sons, finding that the instruments constituted donations inter vivos and complied with the requirements for donating immovable property.
FACTS AND ISSUE
The case stemmed from a dispute among the heirs of Judy G. Cruz, who died single and intestate in December 2004, leaving two parcels of land in Davao City. Her parents, Luis and Rosita Cruz, succeeded to her estate.
In 2005, Rosita and Luis executed separate waivers relinquishing their rights and interests over the properties in favor of their sons Robin and Osias Cruz. The brothers later entered into an extrajudicial partition and settlement of estate and obtained titles over the properties.
Their sibling Felix Cruz filed a complaint in 2012 seeking to nullify the extrajudicial settlement and cancel the resulting titles, questioning the transfers made through their parents’ waivers.
The Regional Trial Court (RTC) dismissed the complaint for failure to comply with the requirement to exert earnest efforts toward a compromise between family members. The Court of Appeals (CA) upheld the RTC rulings and found, among others, that Luis and Rosita had already succeeded to Judy’s estate and validly transferred their rights to Robin and Osias. It also held Felix estopped from challenging the waivers, which he had prepared as a lawyer.
Before the SC, Felix argued that his parents could no longer waive inheritance rights they had already acquired and that, if the waivers were considered donations, they failed to comply with the requirements for a valid donation.
RULING
The SC denied the consolidated petitions, holding that Luis and Rosita acquired hereditary rights over Judy’s estate upon her death and therefore had the capacity to dispose of them, as rights to succession are transmitted from the moment of death.
Although denominated “Waivers of Rights,” the instruments constituted donations inter vivos, with the Court finding that they reflected an intent to donate the properties to Robin and Osias.
“While the instruments were denominated as ‘Waivers of Rights,’ the contents thereof reveal that these are actually donations inter vivos,” the Court wrote.
The Court also found that the requirements for donating immovable property were satisfied, as the notarized instruments identified the properties and reflected Luis and Rosita’s intent to transfer their rights to Robin and Osias, who accepted the donations.
The SC likewise held Felix estopped from questioning the transfers because he had prepared the instruments and benefited from the same arrangement involving another property.
The Court further noted that an RTC order had become final and executory and that Felix filed his complaint more than seven years after the extrajudicial settlement, beyond the four-year period under Rule 74, Section 4 of the Rules of Court.
Accordingly, the SC dismissed Felix’s complaint.
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