A.M. No. 07-6-6-SC - Re: Eden Candelaria

The case arises from the administration of the intestate estate of Pedro Hernaez, father of both parties involved in the dispute.
Eulalio Hernaez (plaintiff and appellant) and Rosendo Hernaez (defendant and appellee) are forced heirs of the estate.

The plaintiff sought the inclusion by collation of the values of two properties—the Naga and Panaogao estates—acquired by the defendant into the inventory of the mass of the intestate succession.
Specific allegations include:

Eosendo Hernaez, a brother of the parties, was supported by his father during his student life due to his lack of financial resources.
Shortly after this period of support, Eosendo purchased the Naga estate despite not being engaged in any recognized profitable trade or industry at that time.
Eosendo was appointed as the administrator of his parental property.
It is claimed that the money used by Eosendo to purchase the Naga estate belonged to his father (the decedent), thereby making it subject to collation as per the rules of succession.
The Panaogao estate was purchased by Rosendo after the death of the decedent, thus raising questions about its qualification for collation.

The plaintiff maintained that the acquisition of the Naga estate was done using funds belonging to the decedent, an assertion which is the sole relevant fact in relation to the doctrine of collation.
In the replication, an allegation was raised that Rosendo Hernaez was never in a formal partnership with his brother Julian Hernaez, an assertion also supported by the defendant’s previous response denying any such partnership.
Testimonies given in the trial included:

Two witnesses, Miguel Solis and Severino Duran, stated that they had never witnessed any articles of copartnership recorded either publicly or privately, supporting the notion that no formal partnership existed between Rosendo and Julian.
Rosendo’s own testimony in response to interrogatories acknowledged that he had been an industrial partner, but contended that no written articles formalizing the partnership were ever executed.
Among the nine witnesses presented by the defendant were Domingo Hernaez, Magdalena Hernaez, and Peregrina Jarapa (a nephew). Domingo and Magdalena, who are siblings of both contending parties, denied that the Naga estate was purchased with money belonging to the decedent, instead attributing the purchase to funds acquired by Rosendo through his own labors.

The Naga estate was purchased by Rosendo from his brother Julian on November 25, 1881.
The Panaogao estate was acquired from Pedro Garganera on November 2, 1898.

No documentary evidence indicated that the money used in these transactions was derived from the decedent’s funds or could have been linked to an act of gratuitous receipt from the intestate.

Whether the funds used to purchase the Naga estate were indeed the money of the decedent, thereby subjecting the transaction to the collation requirement under the law.
Whether the defendant’s acquisition of the Naga and Panaogao estates, as alleged by the plaintiff, qualifies as property or money received gratuitously from the decedent during his lifetime.
The relevance and credibility of witness testimonies, notably the conflicting claims between the parties regarding the source of funds for the purchase of the estates.
Whether the absence of written evidence or articles of copartnership sufficiently negates the plaintiff’s claim for collation, given the declarations of the witnesses and the defendant’s own admissions.