Palacios v.

Ramirez
TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA PALACIOS,
Administratrix, petitioner-appellee,
vs.
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO
RAMIREZ, legatees, oppositors- appellants.

DOCTRINE: Some commentators of the Civil Code have expressed the opinion that a
fideicommissary substitution is in fact a disguised case of successive institutions. This is because
both the first and the second heirs inherit from the testator and not from one another. The
beneficial use and possession of the inheritance are first given to the first heir for a lifetime at
most, and thereafter transferred to the second heir. The law requires that the first and second
heirs must be one degree apart from each other. This limitation became the objective of two
divergent views. One view holds that the one degree apart rule refers to one transfer. Ramirez
settled the controversy by holding the more restrictive view.

In an obiter, the Court opined that the constitutional prohibition against alien ownership
of land does not permit an alien to acquire the same by testamentary succession. Would such a
ruling apply to a case where the foreign beneficiary is both a testamentary and a compulsory
heir?

FACTS: Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 1964, with
only a widow as compulsory heir. His will was admitted to probate by the CFI of Manila
1. The widow Marcelle is a French who lives in Paris, while the companion Wanda is an
Austrian who lives in Spain
2. The administratrix submitted a project of partition as follows: the property of the
deceased is to be divided into two parts. One part shall go to the widow en pleno
dominio in satisfaction of her legitimee; the other part or free portion shall go to Jorge
and Roberto Ramirez en nuda propriedad. Furthermore, 1/3 of the free portion is
charged with the widows usufruct and the remaining 2/3 with a usufruct in favor of
Wanda.

3. Jorge and Roberto opposed the project of partition on the ground that the
fideicommissary substitutions are invalid because the first heirs are not related to the
second heirs or substitutes within the first degree, as provided in Art. 863 of the Civil
Code.

ISSUE: WON the fideicommissary substitutions are invalid.

HELD: Yes, the appellants are correct in their claim that it is void.
The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related to Wanda, the heir
originally instituted. Art. 863 of the Civil Code validates a fideicommissary substitution
provided such substitution does not go beyond one degree from the heir originally instituted.

The word degree was construed as generation and this interpretation has been followed in the
present Code, by providing that the substitution shall not go beyond one degree from the heir
originally instituted. The Code this clearly indicates that the second heir must be related to and
be one generation from the first heir. It follows that the fideicommissary can only be either a
child or a parent of the first heir. These are the only relatives who are one generation or degree
from the fiduciary.

There is no absolute duty imposed on Wanda to transmit the usufruct to the substitutes as
required by Arts. 865 and 867 of the Civil Code. In fact, the appellee admits that the testator
contradicts the establishment of a fideicommissary substitution when he permits the properties of
the subject of the usufruct to be sold upon mutual agreement of the usufructuaries and the naked
owners.

The Court ordered to distribute the estate of Jose Eugenio Ramirez as follows:
thereof to his widow as her legitime;

 thereof which is the free portion to Roberto and Jorge Ramirez in naked ownership and the
usufruct to Wanda de Wrobleski with a simple substitution in favor of Juan Pablo Jankowski and
Horace V. Ramirez.