No contracts may be entered into upon future inheritance except in cases expressly authorized by law

All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract.

Well-entrenched is the rule that all things, even future ones, which are not outside the commerce of man may be the object of a contract. The exception is that no contract may be entered into with respect to future inheritance, and the exception is the partition inter vivos referred to in Article 1080. (Perillo v. Perillo, (CA), 48 O. G. 4444).

For the inheritance to be considered “future”, the succession must not have been opened at the time of the contract. A contract may be classified as a contract upon future inheritance, prohibited under the second paragraph of Article 1347, where the following requisites concur:

(1)  That the succession has yet been opened;

(2)  That the object of the contract forms part of the inheritance; and

(3)  That the promissory has, with respect to the object, an expectancy of a right which is purely hereditary in nature.

The first paragraph of Article 1080, which provides the exception to the exception and therefore aligns with the general rule on future things, reads:

            ART. 1080. Should a person make a partition of his estate by an act inter vivos, or by will, such partition shall be respected, insofar as it does not prejudice the legitime of the compulsory heirs.

If the partition is made by an act inter vivos, no formalities are prescribed by the Article. The partition will of course be effective only after death. It does not necessarily require the formalities of a will for after all it is not the partition that is the mode of acquiring ownership. Neither will the formalities of a donation be required since donation will not be the mode of acquiring the ownership here after death; since no will has been made it follows that the mode will be succession (intestate succession). Besides, the partition here is merely the physical determination of the part to be given to each heir.

The historical antecedent of Article 1080 of the New Civil Code is Article 1056 of the old Civil Code. The only change in the provision is that Article 1080 now permits any person (not a testator, as under the old) to partition his estate by act inter vivos. This was intended to abrogate the then prevailing doctrine that for a testator to partition his estate by an act inter vivos, he must first make a will with all the formalities provided by law. (Dizon-Rivera v. Dizon, 144 Phil. 558 (1970); See also Zaragoza v. Court of Appeals, G.R. No. 106401, September 29, 2000, 341 SCRA 309, 315-316).

Article 1056 of the old Civil Code (now Article 1080) authorizes a testator to partition inter vivos his property, and distribute them among his heirs, and this partition is neither a donation nor a testament, but an instrument of a special character, sui generis, which is revocable at any time by the causante during his lifetime, and does not operate as a conveyance of title until his death. It derives its binding force on the heirs from the respect due to the will of the owner of the property, limited only by his creditors and the intangibility of the legitime of the forced heirs. (Albela & Aebuya v. Albela & Allones, (CA) G.R. No. 5583-R, June 20, 1951).

The partition inter vivos of the properties of Don Julian is undoubtedly valid pursuant to Article 1347. However, considering that it would become legally operative only upon the death of Don Julian, the right of his heirs from the second marriage to the properties adjudicated to him under the compromise agreement was but a mere expectancy. It was bar hope of succession to the property of their father. Being the prospect of a future acquisition, the interest by its nature was inchoate. It had no attribute of property, and the interest to which it related was at the time nonexistent and might never exist. (Johnson v. Breeding, 136 Tenn. 528 190 SW 545).

Evidently, at the time of the execution of the deed of assignment covering Lot No. 63 in favor of JLT Agro, Don Julian remained the owner of the property since ownership over the subject lot would only pass to his heirs from the second marriage at the time of his death. Thus, as the owner of the subject lot, Don Julian retained the absolute right to dispose of it during his lifetime. His right cannot be challenged by Milagros Donio and her children on the ground that it had already been adjudicated to them by virtue of the compromise agreement.

Second issue:

That Don Julian had no right to dispose of or assign Lot No. 63 to JLT Agro because he reserved it to his heirs from the second marriage pursuant to the Compromise Agreement. It was contended that he validly transferred ownership of the said lot during his lifetime to which the lower court agreed when he executed the Supplemental Deed. The CA reversed, ruling that it was a case of prohibited preterition of Don Julian’s heirs from the second marriage. JLT Agro contended otherwise. Decide.

Held: The contention of JLT Agro is correct. There was no preterition. Article 854 provides that the preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator, shall annul the institution of heir; but the devises and legacies shall be valid insofar as they are not inofficious. Manresa defines preterition as the omission of the heir in the will, either by not naming him at all or, while mentioning him as father, son, etc., by not instituting him as heir without disinheriting him expressly, nor assigning to him some part of the properties. (Aznar v. Duncan, 123 Phil. 1450 (1966). It is the total omission of a compulsory heir in the direct line from inheritance. It consists in the silence of the testator with regard to a compulsory heir, omitting him in the testament, either by not mentioning him at all, or by not giving him anything in the hereditary property but without expressly disinheriting him, even if he is mentioned in the will in the latter case. But there is no preterition where the testator allotted to a descendant a share less than the legitime, since there was no total omission of a forced heir. (Reyes-Barreto v. Barreto-Datu, 125 Phil. 501 (1967)).

In the case at bar, Don Julian did not execute a will since what he resorted to was a partition inter vivos of his properties, as evidence by the court approved Compromise Agreement. Thus, it is premature if not irrelevant to speak of preterition prior to the death of Don Julian in the absence of a will depriving a legal heir of his legitime. Besides, there are other properties which the heirs from the second marriage could inherit from Don Julian upon his death.