G.R. No. L-65800 October 3, 1986
PARTENZA LUCERNA VDA. DE TUPAS, petitioner-appellant, vs. BRANCH XLIII of the HON. REGIONAL TRIAL COURT OF NEGROS OCCIDENTAL, respondent, and TUPAS FOUNDATION, INC., private respondent-appellee.

FACTS

Epifanio R. Tupas died childless, leaving his widow, Partenza Lucerna Vda. de Tupas, as his sole compulsory heir. Among the assets listed in his probated will were three parcels of land, which constituted his private capital. However, these properties were no longer part of his estate at the time of his death, as he had donated them inter vivos to the Tupas Foundation, Inc. on August 2, 1977, over a year before he passed away on August 20, 1978. The widow filed a complaint seeking a declaration that the donation was inofficious for impairing her legitime and should be reduced accordingly, with the excess restored to her.
The Regional Trial Court dismissed the complaint. It ruled that Article 900 of the Civil Code was inapplicable because the donated properties were no longer part of the hereditary estate at death. It further held that the properties were the donor’s separate estate and that the donation to a stranger was not subject to collation under Article 1061. The widow appealed the dismissal.

ISSUE

Whether the donation inter vivos made by the deceased to a stranger is collationable and subject to reduction for being inofficious if it impairs the legitime of the compulsory heir.

RULING

Yes. The Supreme Court reversed the trial court. The legal logic is anchored on the principle that the power to donate is limited by the power to dispose by will; one cannot give by donation more than one can give by will (Article 752). A donation that exceeds this limit is inofficious and reducible to the extent of the excess (Article 771). Crucially, for the purpose of determining the legitime of forced heirs and the freely disposable portion, the value of donations inter vivos must be brought to collation—that is, added back to the net hereditary estate—even if the property is no longer owned at death and even if the donee is a stranger, not a compulsory heir. This rule, affirmed in Liguez vs. Court of Appeals, ensures the protection of legitimes.
The trial court erred on all grounds. First, the property’s absence from the estate at death is precisely why collation is required; it fictively restores the donation’s value to calculate the disposable portion. Second, the fact that the property was the donor’s separate capital is irrelevant, as the issue is the extent of his disposable power, not ownership. Third, donations to strangers are collationable under established jurisprudence, despite the wording of Article 1061.
The Court outlined the procedural steps for the trial court on remand: determine the net value of the estate at death, add the value of the collationable donation at the time it was made, compute the total legitime (here, the widow’s share), and ascertain the freely disposable portion. If the donation’s value exceeds this disposable portion, it is inofficious as to the excess, which must be restored to the widow as the sole compulsory heir. The case was remanded for this factual determination.