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Gonzales vs. Legarda

G.R. No. L-34395, May 19, 1981

FACTS:

Benito Legarda y De la Paz, the son of Benito Legarda y Tuason, died in Manila on June
17, 1933. He was survived by his widow Filomena and their seven children: four
daughters and three sons.

The real properties left by Benito Legarda y Tuason were partitioned in three equal
portions by his daughters, Consuelo and Rita, and the heirs of his deceased son Benito
Legarda y De la Paz who were represented by Benito F. Legarda. Filomena Legarda died
intestate and without issue on March 19, 1943. Her sole heiress was her mother,
Filomena Roces Vda. de Legarda. Mrs. Legarda executed on May 12, 1947 an affidavit
adjudicating to herself the properties, which she inherited from her deceased daughter,
Filomena Legarda, which were the properties in litigation in this case. As a result of the
affidavit of adjudication, Filomena Roces Legarda succeeded her deceased daughter as
co-owner of the properties held pro indiviso by her other six children.

Mrs. Legarda executed two handwritten identical documents wherein she disposed of

the properties, which she inherited from her daughter in favor of her son’s children, a
total of 16 grandchildren all in all. Mrs. Legarda and her six surviving
children partitioned all the properties consisting of the 1/3 share in the estate of Benito
Legarda y Tuason, which the children inherited, in representation of their father, Benito
Legarda y De la Paz.

Mrs. Legarda died and her will was admitted to probate as a holographic will. In the
testate proceeding, Beatriz Legarda, a daughter of the testatrix filed a motion to exclude
from the inventory of her mother’s estate the properties, which she inherited from her
deceased daughter on the ground that said properties are reservable properties, which
should be inherited by FilomenaLegarda.

Without awaiting the resolution on the motion, Beatriz filed an ordinary civil
action against her brothers, sisters, nephews and nieces and her mother’s estate for
the purpose of serving a declaration that said properties are reservable properties
which Mrs. Legarda could not bequeath in her will to her grandchildren to the exclusion
of her sons and daughters.

ISSUE:

Whether or not the subject properties are subject to ReservaTroncal

RULING:
 In reservatroncal:

1. A descendant inherited or acquired by gratuitous title property from an ascendant

or from a brother or sister;
2. The same property is inherited by another ascendant or is acquired by him by operation
of law from said descendant, and
3. The said ascendant should reserve the said property for the benefit of relatives who are
within the third degree from the deceased descendants (prepositus) and who belong to
the line from which the said properties came.

So three transmissions are involved:

1. A first transmission by lucrative title (inheritance or donation) from an ascendant

or brother or sister to the deceased descendant;
2. A posterior transmission, by operation of law (intestate succession or legitime) from the
deceased descendant (causante de la reserva) in favor of another ascendant, the reservor
or reservista, which two transmissions precede the reservation; and,
3. A third transmissions of the property (in consequence of the reservation) from
the reservor to the reserves (reservatarios) or the relatives within the third degree
from the deceased descendant belonging to the line of the first ascendant, brother
or sister of the deceased descendant.

THUS, if there is only two transmission there is no reserva.

The persons involved in reservatroncal are:

1. The ascendant or brother or sister from whom the property was received by
the descendant by lucrative or gratuitous title;
2. The descendant or prepositus who received the property;
3. The reservor (reservista), the other ascendant who obtained the property from
the prepositus by operation of law; and,
4. The reservee who is within the third degree from the prepositus and who belongs to the
line (linea or tronco) from which the property came and for whom the property should
be reserved by the reservor.

The person from whom the degree should be reckoned is the descendant, or the one at
the end of the line from which the property came and upon whom the property  last
revolved by descent. He is called the propositus.

The reserva creates two resolutory conditions, namely:

1. The death of the ascendant obliged to reserve; and,

2. The survival, at the time of his death, of relatives within the third degree belonging
to the line from which the property came.

The reservor has the legal title and dominion to the reservable property but subject to
the resolutory condition that such title is extinguished if the reservor predeceased the
reservee. The reservor is a usufructuary of the reservable property. He may alienate it
subject to the reservation. The transferee gets the revocable and conditional ownership
of the reservor. The transferee’s rights are revoked upon the survival of the reservees at
the time of the death of the reservor but become indefeasible when the reservees
predecease the reservor.

The reservor’s alienation of the reservable property is subject to a resolutory condition,

meaning that if at the time of the reservor’s death, there are reservees, the transferee of
the property should deliver it to the reservees. If there are no reservees at the time of the
reservor’s death, the transferee’s title would become absolute. On the other hand, the
reservee has only an inchoate, expectant or contingent right. His expectant right would
disappear if he predeceased the reservor. It would become absolute should the reservor
predecease the reservee.

Even during the reservista’s lifetime, the reservatarios, who are the ultimate acquirers of
the property, can already assert the right to prevent the reservista from doing anything
that might frustrate their reversionary right, and, for this purpose, they can compel the
annotation of their right in the registry of property even while the reservista is alive.

The reservable property is not part of the estate of the reservista who may not dispose of
them by will, so long as there are reservatarios existing. The reservatarios, therefore, do
not inherit from the reservista but frm the descendant prepositus, of whom the
reservatarios are the heirs mortis causa, subject to the condition that they must survive
the reservista.

Hence, upon the reservista’s death, thereservatario nearest to the propositus becomes

automatically and by operation of law, the owner of the reservable property. The
reservee CANNOT impugn any conveyance made by the reservor BUT he can require
that the reservable character of the property be recognized by the purchaser. In this
case, the properties in question were indubitably reservable property in the hands
of Mrs. Legarda. Undoubtedly, she was a reservor. The reservaton became a
certainty when at the time of her death the reservees or relatives within the third degree
of the prepositus Filomena Legarda were living or they survived Mrs. Legarda.

https://lawyerly.ph/digest/c3c81?user=4434

JOSE V. HERRERA v. QUEZON CITY BOARD OF ASSESSMENT APPEALS, GR No. L-

15270, 1961-09-30
Facts:
On July 24, 1952, the Director of the Bureau of Hospitals authorized the petitioners to
establish and operate the 'St. Catherine's Hospital
On or about January 3, 1953, the petitioners... sent a letter to the Quezon City Assessor
requesting exemption from payment of real estate tax on the lot, building and other
improvements comprising the hospital stating that the same was established for charitable
and humanitarian purposes and not for commercial gain
After an inspection of the premises in question and after a careful study of the case, the
exemption from real property taxes was granted effective the years 1953, 1954 and 1955.
however, in a letter dated August 10, 1955... the Quezon City Assessor notified the
petitioners that the aforesaid properties were re-classified from 'exempt' to 'taxable' and
thus assessed for real property taxes effective 1956
The building involved in this case is principally used as a hospital. It is mainly a surgical and
orthopedic hospital with emphasis on obstetrical cases, the latter constituting 90% of the
total number of cases registered therein. The hospital has thirty-two (32) beds, of... which
twenty (20) are for charity-patients and twelve (12) for pay-patients.
Petitioners also operate within the premises of the hospital the 'St. Catherine's School of
Midwifery' which was granted government recognition by the Secretary of Education on
February 1, 1955
This school has an enrollment of about two... hundred students. The students are charge a
matriculation fee of P300.00 for 1-1/2 years, plus P50.00 a month for board and lodging,
which Includes transportation to the St. Mary Hospital.
Issues:
whether or not the lot, building and other improvements occupied by the St. Catherine
Hospital are exempt from the real property tax
Ruling:
the admission of pay-patients does not... detract from the charitable character of a hospital,
if all of its funds are devoted "exclusively to the maintenance of the institution" as a "public
charity"
"where rendering charity is its primary object, and the funds derived from payments made
by patients able to pay are devoted to the benevolent purposes of the institution, the mere
fact that a profit has been made will not deprive the hospital of its benevolent character"
Moreover, the exemption in favor of property used exclusively for charitable or educational
purposes is "not limited to property actually indispensable" therefore... but extends to
facilities which are "incidental to and reasonably... necessary for" the accomplishment of
said purposes, such as, in the case of hospitals, "a school for training nurses, a nurses'
home, property use to provide housing facilities for interns, resident doctors,
superintendents, and other members of the hospital staff, and... recreational facilities for
student nurses, interns and residents"
Within the purview of the Constitutional exemption from taxation, the St. Catherine's
Hospital is, therefore, a charitable institution, and the fact that it admits pay-patients does
not bar it from claiming that it is devoted exclusively to benevolent purposes, it being...
admitted that the income derived from pay-patients is devoted to the improvement of the
charity wards
Again, the existence of "St. Catherine's School of Midwifery", with an enrollment of about
200 students, who practice partly in St. Catherine's Hospital and partly in St. Mary's
Hospital, which, likewise, belongs to petitioners herein, does not, and cannot, affect the...
exemption to which St. Catherine's Hospital is entitled under our fundamental law.
"all lands, buildings and improvements used exclusively for religious, charitable or
educational purposes shall be exempt from taxation," pursuant to the Constitution,
regardless of whether or not material profits are derived from... the operation of the
institutions in question.
Similarly, the garage in the building above referred to which was obviously essential to the
operation of the school of midwifery, for the students therein enrolled practiced, not only in
St. Catherine's Hospital, but, also, in St. Mary's Hospital, and were entitled to...
transportation thereto and the fact that petitioner's family resided in said building for Mrs.
Herrera received no compensation as directress of St. Catherine's Hospital were incidental
to the operation of the latter and of said school, and, accordingly, did not affect the...
charitable character of said hospital and the educational nature of said school.