2. Institution and Substitution of Heirs

INSTITUTION OF HEIRS

An act by virtue of which a testator designates in his will the person or persons who are to succeed him in his property and transmissible rights and obligations. (Art. 840)

NOTE: The declaration of heirship must be made in a special proceeding, not in an independent civil action. However, the Court held that recourse to administration proceedings to determine who the heirs are is sanctioned only if there is a good and compelling reason for such recourse. Hence, the Court had allowed exceptions to the rule requiring administration proceedings as when the parties in the civil case already presented their evidence regarding the issue of heirship, and the RTC had consequently rendered judgment upon the issues it defined during the pre-trial. (Rebusquillo v. Domingo, G.R. No. 204029)

An Affidavit of Self-Adjudication is only proper when the affiant is the sole heir of the decedent. (Rebusquillo v. Domingo, G.R. No. 204029)

Rules on Institution of Aliquot Share Less Than or In Excess of the Whole Estate

The rules will apply if the following concur:

• There is more than one instituted heir.
• The testator intended them to get the whole estate or the whole disposable portion.
• The testator has designated a definite or aliquot portion for each heir. (Balane, supra, p. 251-252)

NOTE: In Article 852, the difference between the total of all the portions and the whole of the inheritance or free portion cannot pass by intestacy because the testator’s intention is to give the instituted heirs the entire amount. (Balane, supra, p. 252)

Requisites for a Valid Institution of Heir

• Designation in the will of person/s to succeed (Art. 840)
• The will designates the person as an heir; a specific share need not be assigned
• The person so named has capacity to succeed.
• The will is formally valid
• No vice of consent is present
• No preterition results from the effect of such will (Art. 854)

Designation in the Will of Person/s to Succeed

Directory – Designation of name and surname (Balane, supra, p. 240)

Mandatory – Identity of the heir must be established, otherwise void disposition, unless his identity becomes certain.

NOTE: If there is ambiguity in the designation, the designation must be resolved by discerning the testator’s intent. If the ambiguity cannot be resolved, intestacy to that portion results. (Art. 844, par. 2)

Unknown person – A successor whose identity cannot be determined because the designation in the will is unclear or ambiguous. (Balane, supra, p. 241)

NOTE: Unknown persons do not refer to one with whom the testator is not personally acquainted. The testator may institute somebody who is a perfect stranger to him, provided the identity is clear. (Balane, supra, p. 241)

Presumptions in Institution of Heirs

In the absence of specific provisions in the will, these presumptions will apply:

• Equality – Heirs who are instituted without designation of shares inherit in equal parts. (Art. 846)

Shares of Brothers and Sisters in Testamentary Succession

If the testator should institute his brothers and sisters, and he has some full blood and others of half-blood, the inheritance shall be distributed equally unless a different intention appears. (Art. 848)

NOTE: In intestacy, the proportion of 2:1 between full and half-blood siblings and the Iron Curtain Rule between legitimate and illegitimate siblings shall be applied.

• Individuality – Heirs collectively instituted are deemed individually named unless a contrary intent is prove. (Art. 847)
• Simultaneity – When several heirs are instituted, they are deemed instituted simultaneously and not successively. (Art. 849)

Effect of False Cause for Institution of an Heir

General Rule: The falsity of the stated cause does not affect the validity or efficacy of the institution. The false cause is merely considered as not written. (Art. 850)

Exceptions: It appears from the will that the testator would not have made such designation if he had known the falsity of such cause. (Art. 850)

Requisites for the Exception to Apply:

• The cause for the institution of heirs must be stated in the will (Austria v. Reyes, G.R. No. L-23079);
• The cause must be shown to be false (Austria v. Reyes, G.R. No. L-23079);
• It must appear from the face of the will that the testator would not have made such institution if he had known the falsity of the cause. (Austria v. Reyes, G.R. No. L-23079)

PRETERITION

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. (Art. 854)

If the omitted compulsory heirs should die before the testator, the institution shall be effectual, without prejudice to the right of representation. (Art. 854)

Determination of Preterited Heirs

The determination of whether or not there are preterited heirs can be made only upon the testator’s death. (JLT Agro v. Balansag, G.R. No. 141882)

SUBSTITUTION OF HEIRS

The appointment of another heir so that he may enter into the inheritance in default of the heir originally instituted. (Art. 857)

NOTE: Only one substitution is allowed. The person substituting cannot be substituted again.

Substitute Subject to Same Charges and Conditions Imposed on Original Heir

General Rule: The substitute shall be subject to the same charges and conditions imposed upon the instituted heir. (Art. 862)

Exception: The testator expressly provided the contrary, or the charges or conditions are personally applicable only to the heir instituted. (Art. 862)

Classes of Substitution

• Vulgar or Simple – The testator may designate one or more persons to substitute the heir or heirs instituted in case such heir or heirs should:
• Die before him (Predecease)
• Should not wish to be instituted, (Renounce) or
• Should be incapacitated to accept the inheritance (Incapacitated)
• Brief (Brevilocua)- Two or more persons may be substituted for one person (Art. 860)
• Compendious (Compediosa) – one person may be substituted for two or more heirs (Art. 860)
• Reciprocal (Reciproca) – If heirs instituted in unequal shares should be reciprocally substituted, the substitute shall acquire the share of the heir who dies, renounces, or is incapacitated, unless it clearly appears that the intention of the testator was otherwise. If there are more than one substitute, they shall have the same share in the substitution as in the institution. (Art. 861)
• Fideicommissary Substitution - If the testator institutes an heir with an obligation to deliver to another the property so inherited. The heir instituted to such condition is called the first heir or fiduciary heir, the one to receive the property is the fideicommissary or second heir. (Art. 863)

Simple Substitution

Simple substitution may be done by the testator:

• By specifying all the three cases,
• By merely providing for simple substitution. (Art. 859)

A simple substitution, without a statement of the cases to which it refers, shall comprise the three causes mentioned, unless the testator has otherwise provided. (Art. 859)

Restricted Simple Substitution

The testator may limit simple substitution to only one or two of its three causes.

Note: One person may be substituted for two or more instituted heirs. Whether the substitute takes a particular vacant share depends on the testator’s terms and the applicable rules; the mere designation does not require all instituted heirs to fail.

Requisites for a fideicommissary substitution

• A fiduciary, or first heir, receives the property upon the testator’s death. (Art. 863)
• A fideicommissary, or second heir, subsequently receives the property from the fiduciary. (Art. 863)
• The fideicommissary substitution must not go beyond one degree from the heir originally instituted; the first and second heirs need not be related by blood. (Art. 863; Palacios v. Ramirez, G.R. No. 27952)
• The fiduciary must preserve the property and transmit it to the second heir after the applicable period. (Art. 865)
• Both heirs must be living and qualified to succeed when the testator dies.
• The substitution must be expressly made. (Art. 865)
• The substitution may burden only the free portion of the estate, never the legitime. (Art. 864)

Note: Until the property is transmitted, the fiduciary has the rights of a usufructuary to use and enjoy it, but may not dispose of it. The fideicommissary’s right vests upon the testator’s death, although receipt of the property is deferred. If the fideicommissary dies before the fiduciary’s right expires, that vested right passes to the fideicommissary’s heirs. (Balane, supra)

Two Ways of Making an Express Imposition of Fideicommissary Substitution

• By the use of the term fideicommissary; or
• By imposing upon the first heir the absolute obligation to preserve and to transmit to the second heir. (Art. 865)

Transmission of Property from First Heir to Second Heir

General Rule: The fiduciary should deliver the property without deductions.

Exceptions: Deductions which arise from legitimate expenses, credits and improvements. (Art. 865)

Right to Succession of the Second Heir

The second heir shall acquire the right to the succession from the time of the testator’s death, even though he should die before the fiduciary. The right of the second heir shall pass to his heirs. (Art. 866)

The following shall not take effect: (Art. 867)

• Fideicommissary substitutions which are not made in an express manner, either by giving them this name, or imposing upon the fiduciary the absolute obligation to deliver the property to a second heir;
• Provisions which contain a perpetual prohibition to alienate, and even a temporary one, beyond the limit fixed in Article 863.
• Those which impose upon the heir the charge of paying to various persons successively, beyond the limit prescribed in Article 863, a certain income or pension;
• Those which leave to a person the whole or part of the hereditary property in order that he may apply or invest the same according to secret instructions communicated to him by the testator.

Nullity of Fideicommissary Substitution

The nullity of the fideicommissary substitution does not prejudice the validity of the institution of heirs first designated; the fideicommissary clause shall simply be considered as not written (Art. 868) such that the institution of the first heir simply becomes pure and unqualified. (Balane, supra)

Resolutory Term (Art. 885)

The designation of the day or time when the effects of the institution of an heir shall commence or cease shall be valid. (Art. 885)

Analogous Performance

When without fault of the heir, a modal institution cannot take effect in the exact manner stated by the testator, it shall be complied with in a manner most analogous to and in conformity with his wishes. (Art. 883, par. 1)