G.R. No. L-10027; November 13, 1915

FACTS:
The spouses Pedro Hernaez and Juana Espinosa died, leaving their estates undivided and under administration. Their son, Domingo Hernaez y Espinosa, sold all his hereditary interest in both estates to his own son, Vicente Hernaez y Tuason, on November 6, 1901. Despite this prior sale, Domingo, with Vicente’s connivance, executed two more sales on February 27, 1907: one conveying all his interest in his mother’s estate to Alejandro Montelibano y Ramos, and another conveying four-eighteenths of that same interest to Jose Montelibano Uy-Cana. Vicente, by his conduct, was estopped from asserting his prior title against these subsequent purchasers. Jose Montelibano Uy-Cana later sold his interest to Alejandro Montelibano y Ramos on August 19, 1912.

Rosendo Hernaez y Espinosa, another son of the deceased spouses and the administrator of the estates, was formally notified of Montelibano’s acquisitions on January 8, 1913. Despite this knowledge, Rosendo had previously entered into a contract with Vicente Hernaez y Tuason on an unspecified date, whereby Vicente purported to sell him all the interest Vicente had acquired from his father. Rosendo then filed this action on January 24, 1913, seeking to subrogate himself in the rights acquired by Montelibano, pursuant to Article 1067 of the Civil Code.

ISSUE:
1. Whether Rosendo Hernaez y Espinosa timely exercised his right of legal subrogation under Article 1067 of the Civil Code.
2. What is the correct purchase price to be reimbursed for the subrogation?

RULING:

2. The correct price for subrogation is the original purchase price paid by the first purchaser from the heir, not any inflated subsequent resale price. The Court modified the trial court’s judgment. For the interest originally bought by Jose Montelibano Uy-Cana from Domingo for P4,500 and later resold to Alejandro Montelibano y Ramos for P10,000, the subrogation price is only P4,500. The purpose of Article 1067 is to allow co-heirs to reacquire the sold hereditary right by reimbursing the actual price paid to the selling heir. A subsequent purchaser acquires the interest subject to this right of subrogation at the original price.

The Court found no merit to the claim that the sale prices were fictitious. The judgment was modified accordingly and affirmed as modified. No costs were awarded.