G.R. No. 83484 February 12, 1990
CELEDONIA SOLIVIO, petitioner, vs. THE HONORABLE COURT OF APPEALS and CONCORDIA JAVELLANA VILLANUEVA, respondents.

FACTS

The case involves the estate of the late novelist Esteban Javellana, Jr., who died intestate and without any direct descendants, ascendants, or siblings. His sole surviving relatives were his maternal aunt, petitioner Celedonia Solivio, and his paternal aunt, private respondent Concordia Javellana-Villanueva. Following Javellana’s death, Solivio and Villanueva agreed to honor his expressed wish to place his estate into a foundation named after his mother to fund educational scholarships. Pursuant to this agreement, and to facilitate the foundation’s creation, Solivio filed a petition for letters of administration and was subsequently declared the sole heir of the estate by the probate court. She then established the “Salustia Solivio Vda. de Javellana Foundation.”
However, Villanueva later reneged on the agreement. After her motion for reconsideration of the order declaring Solivio as sole heir was denied for tardiness, she filed a separate civil action for partition, recovery of possession, ownership, and damages, claiming her rightful share as an heir. The trial court ruled in Villanueva’s favor, ordering the partition of the estate and awarding her one-half share. The Court of Appeals affirmed this decision.

ISSUE

Whether the agreement between the two heirs to devote the entire estate to a charitable foundation is valid and binding, thereby precluding Villanueva from claiming her share through an action for partition.

RULING

The Supreme Court granted the petition and set aside the decisions of the lower courts. The Court upheld the validity and binding nature of the agreement between Solivio and Villanueva. It found that both parties had mutually consented to carry out the decedent’s plan to establish a foundation, a fact admitted by Villanueva in her own pleadings. This agreement created a legal obligation for both heirs. Solivio had already performed her part by organizing and registering the foundation, which had become operational and was fulfilling its charitable purposes. The Court ruled that Villanueva was estopped from going back on their covenant. Equity demands that she honor her commitment, as Solivio had honored hers, to prevent unjust enrichment and to give effect to the decedent’s wishes.
Consequently, while Villanueva was declared an heir entitled to a one-half share of the estate, the Court ordered that, in conformity with their agreement, the entire estate must be conveyed to the foundation. Both heirs were to serve as trustees, with equal rights to nominate members to the Board of Trustees. The probate proceedings were to continue for the purpose of inventory and accounting before final distribution to the foundation.