4. Collation

D. Provisions Common to Testate and Intestate Succession (Civil Code, arts. 1015- 1105) (part 2 of 2)

Article 1064. When the grandchildren, who survive with their uncles, aunts, or cousins, inherit from their grandparents in representation of their father or mother, they shall bring to collation all that their parents, if alive, would have been obliged to bring, even though such grandchildren have not inherited the property.

They shall also bring to collation all that they may have received from the decedent during his lifetime, unless the testator has provided otherwise, in which case his wishes must be respected, if the legitime of the co-heirs is not prejudiced. (1038)

Article 1065. Parents are not obliged to bring to collation in the inheritance of their ascendants any property which may have been donated by the latter to their children. (1039)

Article 1066. Neither shall donations to the spouse of the child be brought to collation; but if they have been given by the parent to the spouses jointly, the child shall be obliged to bring to collation one-half of the thing donated. (1040)

Article 1067. Expenses for support, education, medical attendance, even in extraordinary illness, apprenticeship, ordinary equipment, or customary gifts are not subject to collation. (1041)

Article 1068. Expenses incurred by the parents in giving their children a professional, vocational or other career shall not be brought to collation unless the parents so provide, or unless they impair the legitime; but when their collation is required, the sum which the child would have spent if he had lived in the house and company of his parents shall be deducted therefrom. (1042a)

Article 1069. Any sums paid by a parent in satisfaction of the debts of his children, election expenses, fines, and similar expenses shall be brought to collation. (1043a)

Article 1070. Wedding gifts by parents and ascendants consisting of jewelry, clothing, and outfit, shall not be reduced as inofficious except insofar as they may exceed one-tenth of the sum which is disposable by will. (1044)

Article 1071. The same things donated are not to be brought to collation and partition, but only their value at the time of the donation, even though their just value may not then have been assessed.

Their subsequent increase or deterioration and even their total loss or destruction, be it accidental or culpable, shall be for the benefit or account and risk of the donee. (1045a)

Article 1072. In the collation of a donation made by both parents, one-half shall be brought to the inheritance of the father, and the other half, to that of the mother. That given by one alone shall be brought to collation in his or her inheritance. (1046a)

Article 1073. The donee's share of the estate shall be reduced by an amount equal to that already received by him; and his co-heirs shall receive an equivalent, as much as possible, in property of the same nature, class and quality. (1047)

Article 1074. Should the provisions of the preceding article be impracticable, if the property donated was immovable, the co-heirs shall be entitled to receive its equivalent in cash or securities, at the rate of quotation; and should there be neither cash nor marketable securities in the estate, so much of the other property as may be necessary shall be sold at public auction.

If the property donated was movable, the co-heirs shall only have a right to select an equivalent of other personal property of the inheritance at its just price. (1048)

Article 1075. The fruits and interest of the property subject to collation shall not pertain to the estate except from the day on which the succession is opened.

For the purpose of ascertaining their amount, the fruits and interest of the property of the estate of the same kind and quality as that subject to collation shall be made the standard of assessment. (1049)

Article 1076. The co-heirs are bound to reimburse to the donee the necessary expenses which he has incurred for the preservation of the property donated to him, though they may not have augmented its value.

The donee who collates in kind an immovable which has been given to him must be reimbursed by his co-heirs for the improvements which have increased the value of the property, and which exist at the time the partition is effected.

As to works made on the estate for the mere pleasure of the donee, no reimbursement is due him for them; he has, however, the right to remove them, if he can do so without injuring the estate. (n)

Article 1077. Should any question arise among the co-heirs upon the obligation to bring to collation or as to the things which are subject to collation, the distribution of the estate shall not be interrupted for this reason, provided adequate security is given. (1050)

SECTION 6

Partition and Distribution of the Estate

SUBSECTION 1. Partition

Article 1078. Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of the deceased. (n)

Article 1079. Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value. (n)

Article 1080. Should a person make 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.

A parent who, in the interest of his or her family, desires to keep any agricultural, industrial, or manufacturing enterprise intact, may avail himself of the right granted him in this article, by ordering that the legitime of the other children to whom the property is not assigned, be paid in cash. (1056a)

Article 1081. A person may, by an act inter vivos or mortis causa, intrust the mere power to make the partition after his death to any person who is not one of the co-heirs.

The provisions of this and of the preceding article shall be observed even should there be among the co-heirs a minor or a person subject to guardianship; but the mandatary, in such case, shall make an inventory of the property of the estate, after notifying the co-heirs, the creditors, and the legatees or devisees. (1057a)

Article 1082. Every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction. (n)

Article 1083. Every co-heir has a right to demand the division of the estate unless the testator should have expressly forbidden its partition, in which case the period of indivision shall not exceed twenty years as provided in article 494. This power of the testator to prohibit division applies to the legitime.

Even though forbidden by the testator, the co-ownership terminates when any of the causes for which partnership is dissolved takes place, or when the court finds for compelling reasons that division should be ordered, upon petition of one of the co-heirs. (1051a)

Article 1084. Voluntary heirs upon whom some condition has been imposed cannot demand a partition until the condition has been fulfilled; but the other co-heirs may demand it by giving sufficient security for the rights which the former may have in case the condition should be complied with, and until it is known that the condition has not been fulfilled or can never be complied with, the partition shall be understood to be provisional. (1054a)

Article 1085. In the partition of the estate, equality shall be observed as far as possible, dividing the property into lots, or assigning to each of the co-heirs things of the same nature, quality and kind. (1061)

Article 1086. Should a thing be indivisible, or would be much impaired by its being divided, it may be adjudicated to one of the heirs, provided he shall pay the others the excess in cash.

Nevertheless, if any of the heirs should demand that the thing be sold at public auction and that strangers be allowed to bid, this must be done. (1062)

Article 1087. In the partition the co-heirs shall reimburse one another for the income and fruits which each one of them may have received from any property of the estate, for any useful and necessary expenses made upon such property, and for any damage thereto through malice or neglect. (1063)

Article 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. (1067a)

Article 1089. The titles of acquisition or ownership of each property shall be delivered to the co-heir to whom said property has been adjudicated. (1065a)

Article 1090. When the title comprises two or more pieces of land which have been assigned to two or more co-heirs, or when it covers one piece of land which has been divided between two or more co-heirs, the title shall be delivered to the one having the largest interest, and authentic copies of the title shall be furnished to the other co-heirs at the expense of the estate. If the interest of each co-heir should be the same, the oldest shall have the title. (1066a)

SUBSECTION 2. Effects of Partition

Article 1091. A partition legally made confers upon each heir the exclusive ownership of the property adjudicated to him. (1068)

Article 1092. After the partition has been made, the co-heirs shall be reciprocally bound to warrant the title to, and the quality of, each property adjudicated. (1069a)

Article 1093. The reciprocal obligation of warranty referred to in the preceding article shall be proportionate to the respective hereditary shares of the co-heirs, but if any one of them should be insolvent, the other co-heirs shall be liable for his part in the same proportion, deducting the part corresponding to the one who should be indemnified.

Those who pay for the insolvent heir shall have a right of action against him for reimbursement, should his financial condition improve. (1071)

Article 1094. An action to enforce the warranty among heirs must be brought within ten years from the date the right of action accrues. (n)

Article 1095. If a credit should be assigned as collectible, the co-heirs shall not be liable for the subsequent insolvency of the debtor of the estate, but only for his insolvency at the time the partition is made.

The warranty of the solvency of the debtor can only be enforced during the five years following the partition.

Co-heirs do not warrant bad debts, if so known to, and accepted by, the distributee. But if such debts are not assigned to a co-heir, and should be collected, in whole or in part, the amount collected shall be distributed proportionately among the heirs. (1072a)

Article 1096. The obligation of warranty among co-heirs shall cease in the following cases:

(1) When the testator himself has made the partition, unless it appears, or it may be reasonably presumed, that his intention was otherwise, but the legitime shall always remain unimpaired;

(2) When it has been so expressly stipulated in the agreement of partition, unless there has been bad faith;

(3) When the eviction is due to a cause subsequent to the partition, or has been caused by the fault of the distributee of the property. (1070a)

SUBSECTION 3. Rescission and Nullity of Partition

Article 1097. A partition may be rescinded or annulled for the same causes as contracts. (1073a)

Article 1098. A partition, judicial or extra-judicial, may also be rescinded on account of lesion, when any one of the co-heirs received things whose value is less, by at least one-fourth, than the share to which he is entitled, considering the value of the things at the time they were adjudicated. (1074a)

Article 1099. The partition made by the testator cannot be impugned on the ground of lesion, except when the legitime of the compulsory heirs is thereby prejudiced, or when it appears or may reasonably be presumed, that the intention of the testator was otherwise. (1075)

Article 1100. The action for rescission on account of lesion shall prescribe after four years from the time the partition was made. (1076)

Article 1101. The heir who is sued shall have the option of indemnifying the plaintiff for the loss, or consenting to a new partition.

Indemnity may be made by payment in cash or by the delivery of a thing of the same kind and quality as that awarded to the plaintiff.

If a new partition is made, it shall affect neither those who have not been prejudiced nor those who have not received more than their just share. (1077a)

Article 1102. An heir who has alienated the whole or a considerable part of the real property adjudicated to him cannot maintain an action for rescission on the ground of lesion, but he shall have a right to be indemnified in cash. (1078a)

Article 1103. The omission of one or more objects or securities of the inheritance shall not cause the rescission of the partition on the ground of lesion, but the partition shall be completed by the distribution of the objects or securities which have been omitted. (1079a)

Article 1104. A partition made with preterition of any of the compulsory heirs shall not be rescinded, unless it be proved that there was bad faith or fraud on the part of the other persons interested; but the latter shall be proportionately obliged to pay to the person omitted the share which belongs to him. (1080)

Article 1105. A partition which includes a person believed to be an heir, but who is not, shall be void only with respect to such person. (1081a)

COLLATION

The act by virtue of which, the persons who concur in the inheritance bring back to the common hereditary mass the property, which they have received from him, so that a division may be effected according to law and the will of the testator. (Mison, Wills and Succession Better Explained, 2011)

To collate is to bring back or to return to the hereditary mass, in fact or by fiction, property which came from the estate of the decedent, during his lifetime, but which the law considers as an advance from the inheritance. (Mison, supra)

Concept of Collation

The act of bringing back to the estate properties acquired inter vivos and gratuitously from decedent (if acquired by will, e.g. legacies and devisees, they are not collatable, but may be reduced for being inofficious)

Properties or Rights Received by Compulsory Heir not Subject to Collation

• Property left by will is not deemed subject to collation unless the testator provides otherwise; the legitime must in any case remain unimpaired (Art. 1063)
• A parent need not collate, in the inheritance of an ascendant, property that ascendant donated to the parent's children (Art. 1065)
• A donation to the child's spouse is not collated by the child; if the parent donates to the spouses jointly, the child collates one-half (Art. 1066)
• Expenses for support, education, medical attendance even in extraordinary illness, apprenticeship, ordinary equipment or customary gifts (Art. 1067)
• Expenses incurred by parents in giving children a professional, vocational, or other career are not collated unless the parents so provide or the expenses impair the legitime (Art. 1068)
• Wedding gifts by parents or ascendants consisting of jewelry, clothing, and outfit are not reduced as inofficious except insofar as they exceed one-tenth of the sum disposable by will (Art. 1070)

Kinds of Collation (Balane, supra)

• Collation of Values – values only, no physical return
• Collation in kind – actual return of property received: only required when inofficious, i.e., legitime is impaired

COLLATION OF VALUES

Purposes

• For computation – Arts. 908, 909 as basis for determining the legitime
• Determination: value at the time of donation + fruits & legal interest from date succession opens (if required to return in kind)
• Compulsory heirs and strangers must collate for computation. For strangers, there is no effect unless found to be inofficious. If donation to strangers is not included, compulsory heirs will be prejudiced because basis for the legitime will be smaller. (Balane, supra)
• For equalization on account of partition
• Only required for compulsory heirs; 2nd collation; when actually charged either to legitime or free portion.
• Reason: donation to compulsory heirs are considered advance of legitime, otherwise, it will prejudice other compulsory heirs. For strangers, no equalization is required, are always charged to free portion. (Paras, supra)

Not subject to collation (i.e., charged to free portion) if:

• Testator provides otherwise (but still collated for computation) (Art. 1062)
• If compulsory heir repudiates, in which case he is considered a stranger – for computation only, charged to free portion (Art. 1062)

COLLATION FOR EQUALIZATION

Requisites for collation for equalization

• Two or more compulsory heirs. If only one, no equalization is needed.
• Liberality – must be acquired gratuitously from the decedent (inter vivos). In donation, gratuitous act may be direct or indirect, as when parent pays for debt of child (Art. 1069: sums paid by a parent in satisfaction of the debts of his children, election expenses, fines, and similar expenses shall be brought to collation) or pays for purchase price of the car placed in name of the child – not a demandable debt as when there is no intention to be reimbursed, otherwise placed on asset side as receivables from the heir (not collation).
• Expenses for support and education are not subject to collation. Expenses for a professional, vocational, or other career are collated if the parents so provide or they impair the legitime, subject to the deduction in Art. 1068 (Arts. 1067–1068).
• Customary gifts are not subject to collation (Art. 1067). Wedding gifts by parents and ascendants consisting of jewelry, clothing, and outfit (Art. 1070) shall not be reduced as inofficious except insofar as they may exceed one-tenth of the sum which is disposable by will.
• Identity of heir and donee which may be:
• Actual: e.g. F donates to son; Son collates for computation and equalization; If he donates to grandson, son is not required to collate, but grandson collates for computation as a stranger. If son predeceases, grandson collates for computation and equalization (now a compulsory heir)
• Constructive: F donates to son, son predeceases and GS succeeds by representation. GS must collate donation to son even if he does not actually receive it.

If there is no identity: no collation for equalization is required. E.g. Father donates to spouse of son: Son has no obligation to collate, but spouse must collate for computation as a stranger. If he donates to both spouses: ½ each, son collates for computation and equalization, spouse collates only for computation. (Paras, supra)

If collation required for equalization, may be quantitative: same amount, or qualitative: same kind. If immovable -equivalent, if not available, sell other properties to generate cash, and if movable, equivalent properties (Paras, supra)

COLLATION IN KIND

Actual return - Only if inofficious, i.e. legitime impaired. Operates as resolutory condition: donation terminated and must return only to the extent inofficious: not necessarily a case of total return. A donee who is required to collate in kind is a possessor in good faith, and not required to account for fruits and interests except from the date succession opens. (Art. 1075)

Operations Related to Collation (Paras, supra)

• Collation – adding to the mass of the hereditary estate the value of the donation or gratuitous disposition
• Imputing or Charging – crediting the donation as an advance on the legitime (if the donee is a compulsory heir) or on the free portion (if the donee is a stranger)
• Reduction – determining to what extent the donation will remain and to what extent it is excessive or inofficious
• Restitution – return or payment of the excess to the mass of hereditary estate.

Collation

The act by virtue of which, the persons who concur in the inheritance bring back to the common hereditary mass the property, which they have received from him, so that a division may be effected according to law and the will of the testator. (Mison, Wills and Succession Better Explained, 2011)

To collate is to bring back or to return to the hereditary mass, in fact or by fiction, property which came from the estate of the decedent, during his lifetime, but which the law considers as an advance from the inheritance. (Mison, supra)

Properties or Rights Received by Compulsory Heir not Subject to Collation

• Property left by will is not deemed subject to collation unless the testator provides otherwise; the legitime must in any case remain unimpaired (Art. 1063)
• A parent need not collate, in the inheritance of an ascendant, property that ascendant donated to the parent's children (Art. 1065)
• A donation to the child's spouse is not collated by the child; if the parent donates to the spouses jointly, the child collates one-half (Art. 1066)
• Expenses for support, education, medical attendance even in extraordinary illness, apprenticeship, ordinary equipment or customary gifts (Art. 1067)
• Expenses incurred by parents in giving their children a professional, vocational, or other career are not collated unless the parents so provide or they impair the legitime; when collation is required, deduct what the child would have spent living with the parents (Art. 1068)
• Wedding gifts by parents or ascendants consisting of jewelry, clothing, and outfit are not reduced as inofficious except insofar as they exceed one-tenth of the sum disposable by will (Art. 1070)

Kinds of Collation (Balane, supra)

• Collation of Values – values only, no physical return
• Collation in kind – actual return of property received: only required when inofficious, i.e., legitime is impaired

Purposes

• For computation – Arts. 908, 909 as basis for determining the legitime
• Determination: value at the time of donation + fruits & legal interest from date succession opens (if required to return in kind)
• Compulsory heirs and strangers must collate for computation. For strangers, there is no effect unless found to be inofficious. If donation to strangers is not included, compulsory heirs will be prejudiced because basis for the legitime will be smaller. (Balane, supra)
• For equalization on account of partition
• Only required for compulsory heirs; 2nd collation; when actually charged either to legitime or free portion.
• Reason: donation to compulsory heirs are considered advance of legitime, otherwise, it will prejudice other compulsory heirs. For strangers, no equalization is required, are always charged to free portion. (Paras, supra)

Not subject to collation (i.e., charged to free portion) if:

• Testator provides otherwise (but still collated for computation) (Art. 1062)
• If compulsory heir repudiates, in which case he is considered a stranger – for computation only, charged to free portion (Art. 1062)

Requisites (Art. 1069)

Requisites for collation for equalization

• Two or more compulsory heirs. If only one, no equalization is needed.
• Liberality – must be acquired gratuitously from the decedent (inter vivos). In donation, gratuitous act may be direct or indirect, as when parent pays for debt of child or pays for purchase price of the car placed in name of the child – not a demandable debt as when there is no intention to be reimbursed, otherwise placed on asset side as receivables from the heir (not collation).
• Expenses for support and education are generally not collated. Expenses incurred in giving a child a professional, vocational, or other career are collated if the parents so provide or they impair the legitime, subject to the deduction under Art. 1068 (Arts. 1067–1068).
• Exception: When liberality is present, but no collation is required: Wedding gift of parent/ascendants consisting of jewelry, clothing, outfit (Art. 1070) shall not be reduced as inofficious except insofar as they exceed one-tenth of the sum disposable by will.
• Identity of heir and donee which may be:
• Actual: e.g. F donates to son; Son collates for computation and equalization; If he donates to grandson, son is not required to collate, but grandson collates for computation as a stranger. If son predeceases, grandson collates for computation and equalization (now a compulsory heir)
• Constructive: F donates to son, son predeceases and GS succeeds by representation. GS must collate donation to son even if he does not actually receive it.

If there is no identity: no collation for equalization is required. E.g. Father donates to spouse of son: Son has no obligation to collate, but spouse must collate for computation as a stranger. If he donates to both spouses: ½ each, son collates for computation and equalization, spouse collates only for computation. (Paras, supra)

If collation required for equalization, may be quantitative: same amount, or qualitative: same kind.

If immovable -equivalent, if not available, sell other properties to generate cash, and if movable, equivalent properties (Paras, supra)

COLLATION IN KIND

Actual return - Only if inofficious, i.e. legitime impaired. Operates as resolutory condition: donation terminated and must return only to the extent inofficious: not necessarily a case of total return. A donee who is required to collate in kind is a possessor in good faith, and not required to account for fruits and interests except from the date succession opens. (Art. 1075)

Operations Related to Collation

• Collation – adding to the mass of the hereditary estate the value of the donation or gratuitous disposition
• Imputing or Charging – crediting the donation as an advance on the legitime (if the donee is a compulsory heir) or on the free portion (if the donee is a stranger)
• Reduction – determining to what extent the donation will remain and to what extent it is excessive or inofficious
• Restitution – return or payment of the excess to the mass of hereditary estate.

Legitime: The part of the testator’s property which he cannot dispose of because the law has reserved it for his compulsory heirs. (Art. 886)

NOTE: When the disposition is for valuable consideration, there is no diminution of the estate by merely a substitution of value, that is the property sold is replaced by the equivalent monetary consideration. (Buenaventura v. Court of Appeals, G.R. No. 126376; Manongsong v. Estimo, G.R. No. 136773)