FIRST DIVISION [G.R. No. 31860. October 16, 1930.] In the matter of the Estate of Charles C. Rear, deceased.

J.J. WILSON, administrator-appellee, v. M. T. REAR ET AL., heirs-appellants. J. A. Wolfson and Lionel D. Hargis, for Appellants. Juan S. Alano and Pastor Kimpo, for Appellee. SYLLABUS 1. Law Imposes Ordinary and Usual Care. The law does not impose upon an administrator a high degree of care in the administration of the estate, but it does impose upon him ordinary and usual care, for the want of which he is personally liable. 2. When administrator is without authority. An administrator, without an order of court, even thought acting in good faith, has no authority to continue the business in which the deceased was engaged at the time of his death. 3. Liability of Administrator. So great is it a breach of trust for the representative to engage in business with the funds of the estate that the law charges him with all the losses incurred thereby without allowing him to receive the benefit of any profit that he may make. 4. Duty of Administrator. It is the duty of an administrator to handle land marshal the assets of the estate in a business-like manner, and with his bondsmen, he is liable for any unreasonable or unnecessary delay in settling and closing the estate. STATEMENT July 14, 1925, Charles C. Rear was murdered by some Moros on his plantation situate in the interior of the Province of Cotabato at an isolated place, without communication except by river, about 17 kilometers from the nearest settlement of Pikit, and about 17 70 kilometers from the town of Cotabato. The whole plantation consisted of public lands. J.J. Wilson qualified as special administrator of the estate on November 17, 1925. Later, the property of the estate was appraised at P20,800, of which the commissioners filed an inventory and report, which was also signed by Wilson. January 4, 1927, the commissioners made and filed a report of claims against the estate, but by reason of the fact that it was claimed and alleged that the administrator did not have any funds to pay, on March 30, 1927, the court ordered the administrator to sell a portion of the property. April 26, 1927, and with the consent of the heirs, a petition was made for authority to sell, under sealed proposal, all the property of the estate, with a view of closing the administration. October 10, 1927, the court granted this petition, and after due notice, the public sale took place, and the property was sold to Wm. Mannion for P7,600. April 26, 1927, Wilson submitted a report covering his administration to that date, which was approved and later set aside on motion of the heirs of the deceased. March 23, 1928, Wilson filed his final account which later was amended on June 10, 1928, to which the heirs made numerous and specific objections, and after a hearing, the court approved the account as filed. From which the heirs of the deceased appealed and assign the following errors:jgc:chanrobles.com.ph "I. The Lower court erred in approving the final amended account of the administrator for the following reasons:jgc:chanrobles.com.ph "(a) That the alleged disbursements made by the special administrator and the administrator were far in excess of the amount required to preserve the estate; "(b) That no authority being asked for or granted by the court, all loans or advances, made to the estate, were made contrary to law and are not legal charges against the estate (Trs., p. 37). "(c) The court erred in admitting, over objection, Exhibits D, E and F.

"(d) That Wilson, as special administrator and as administrator, was neglectful and imprudent and he committed waste. He is, therefore, liable. "II. The lower court erred in refusing to allow the cross- examination and direct examination of witnesses. "III. The lower court erred in denying the request for a reasonable continuance in order to obtain depositions." DECISION JOHNS, J.: It appears from the first inventory of December 27, 1925, that the assets of the estate, including real property, coconut trees, and houses were P15,300, and that the personal property was valued at P5,250, which included 80 head of cattle, carabao and horses of the value of P4,000. Although he was appointed special administrator on November 17, 1925, he never made any report or filed any account of any kind until 1927. Neither did he apply to or obtain an order from the court of any nature during that period, and it appears that the attention of the court was for the first time called to the administration of the estate when the commissioners on claims asked to have their fees paid; otherwise, the court never made any order of any kind from December 27, 1925, to April 1927. It also appears that at the time of his death, the only debts against the deceased were one in favor of Sewal Fleming which then amounted to P800, and one in favor of J. S. Alano for P500. It appears from the amended final report that in the course of administration, the administrator received the following amounts from the specified sources:jgc:chanrobles.com.ph ________ The total of which is 1,919.25" From which it appears that on November 30, 1925, the administrator sold hogs for P108.50; in July, 1927, he sold one carabao for P100 and two steers for P160; in August he sold hogs for P79.50; and in September he sold two steers for P180. Strange as it may seem, the above is the only account which was ever rendered of the livestock which was appraised at P4,000, and yet no specific objection was ever made or filed to the final account of the administrator for his failure to render any other or different account of the livestock. Even so, it appears that the sale to Mannion was made by and with the consent of the heirs, and that the deed was intended to convey all of the property to him described in the inventory, except that of a perishable nature and some personal effects. It further appears from the amended account that the total amount of cash received by the administrator, including the sale to Mannion was P9,519.25, and that the total amount of cash disbursed by the administrator was P11,328.94, leaving a deficit or balance due and owing from the estate of P1,809,69. It also appears that the amount of Flemings note at the time it was paid was P1,003.40, and that the taxes for the years 1925, 1926, and 1927 amounted to P152.14, and the claim of J.S. Alano amounted to P500. That is to say, at the time they were paid, the actual claims against the deceased was P1,655.54. Here, it will be noted that the value of the personal property of the estate at the time of Wilsons appointment, appearing over his own signature was P5,800 which included 80 head of cattle, carabao and horses of the value of P4,000. That is to say, at the time Wilson was appointed, his estate had personal property of the value of P5,800, and when the amended final account was filed the actual debts of the deceased, including interest and accumulated taxes, was P1,655.54. In this situation, it was the legal duty of the administrator to at once apply to the court for an order to sell the personal property to pay the debts of the deceased and the expenses of administration. It also appears from the amended final account that the expenses charged by the administrator was P750.94; that the court expenses, including attorneys fees was P693.20; and that the claims of the commissioners was P322.90, the total of which is P1,767.04. That is to say, that the total of all claims against the

deceased, including interest and taxes was P1,655.54, and that the whole amount of the court costs and expenses of administration was P1,767.04, the total of which is P3,422.58. That is to say, at the time of his appointment, it appears over the administrators own signature that the value of the personal property of the deceased which came into his possession was P5,800, and the whole amount of claims against Rear at the time of his death and the court costs and expenses of administration was P3,422.58. That is to say, if the personal property of the estate had been promptly sold, when it should have been, and sold for its appraised value, all the debts of the deceased and the court costs and expenses of administration would have been paid, and the estate would have a balance left of P2,377.42. Instead of doing that, and without any order, process or authority of the court, the administrator, as appears from his amended final account, continued the operation of the plantation and the employment of Fleming as manager at a salary of P200 per month, and a large number of men, so that at the time of the filing of the amended final account, the total expense for labor was P2,863.62, and the amount of the managers salary was P4,533.33, the net result of which was that all of the property of the estate was consumed, lost or destroyed, leaving a deficit against the estate of P1,809.69. Whereas, if the administrator had followed the law and promptly sold the personal property, all of the debts of the estate would have been paid, and it would have a cash balance in its favor of P2,377.42, and all of its real property left, which was appraised at P15,000. It is but fair to say that Wilsons place of business, which was in Zamboanga, is at least 300 kilometers from the plantation, and that he declined to serve as administrator and only accepted it under pressure. That in legal effect he operated and left the management of the plantation largely in the discretion of Fleming, and that he personally had but little of anything, to do with the administration, and it does not appear that he was a party to any fraud. But even so, he was appointed and qualified as administrator, and the law imposed upon him legal duties and obligations, among which was to handle the estate in a business-like manner, marshal its assets, and close the estate without any unreasonable or unnecessary delay. He was not appointed to act for or on behalf of the creditors, or to represent the interests of the heirs only. He should have administered the affairs of the estate for the use and benefit alike of all interested persons, as any prudent business man would handle his own personal business. When appointed, it is the legal duty of the administrator to administer, settle, and close the administration in the ordinary course of business, without any unnecessary delay. Neither does an administrator, in particular, without a specific showing or an order of the court, have any legal right to continue the operation of the business in which the deceased was engaged, or to eat up and absorb the assets of the estate in the payment of operating expenses. Yet, in the instant case, the administrator on his own volition and without any authority or process of court continued the operation of the plantation, and in the end, as shown by his own report, the estate, which was appraised at P20,800, with actual debts of the deceased of only P1,655.54, was all wiped out and lost, and left with a deficit of P1,809.69. The law does not impose upon an administrator a high degree of care in the administration of an estate, but it does impose upon him ordinary and usual care, for want of which he is personally liable. In the instant case there were no complications of any kind and in the usual and ordinary course of business, the administrator should have wound up and settled the estate within eight months from the date of his appointment. Ruling Case Law, vol. 11, section 142 says:jgc:chanrobles.com.ph "Winding up Business. An executors or administrator ordinarily has no power to continue the business in which the decedent was engaged at the time of his death; and this is true although he acts in the utmost good faith and believes that he is proceeding for the best interests of the estate. The penalty for continuing a business of the decedent without authority is the imposition of a personal liability on the executor or administrator so doing for all debts of the business. The normal duty of the personal representative in reference to such business is limited to winding it up, and even where the beneficiaries are infants the court cannot authorize the administrator to carry on the trade of the decedent. However, an exception to the general rule is sometimes recognized; and so it has been held that in order to settle an estate the personal representative may, in some cases, be permitted to continue a business for a reasonable time. For example, such personal representative when authorized to postpone the sale of the testators effects may generally carry on the business for a reasonable time with a view to its sale as a going concern. Even in such cases the personal representatives are not, however, entitled to embark in the business more of the testators property than was employed in it at his death." (Citing numerous authorities.)

The same principle is also laid down in Cyc., vol. 18, p. 241, where it is said:jgc:chanrobles.com.ph "C. Engaging in Business 1. GENERAL RULE. The general rule is that neither an executor nor an administrator is justified in placing or leaving assets in trade, for this is a hazardous use to permit of trust moneys; and trading lies outside the scope of administrative functions. So great a breach of trust is it for the representative to engage in business with the funds of the estate that the law charges him with all the losses thereby incurred without on the other hand allowing him too receive the benefit of any profits that he may make, the rule being that the persons beneficially interested in the estate may either hold the representative liable for the amount so used with interest, or at their election take all the profits which the representative has made by such unauthorized use of the funds of the estate."cralaw virtua1aw library Even so, considering the fact that Wilsons home and place of business was 300 kilometers from the plantation, and that in the very nature of things, he could not give the business of the estate his personal attention, we are disposed to be more or less lenient, and to allow him the actual operating expenses of the plantation for the first eight months of his appointment amounting to P2,257.45. Although the expense account of the administrator and the claims of the commissioners are somewhat high, we are also disposed to allow those claims. That is to say, in his final account, the administrator should have credit for the following items:chanrob1es virtual 1aw library His personal charges and expenses P750.94 Court expenses, including attorneys fees 693.20 Claims of the commissioners 322.90 Expenses for and on account of operations for the first eight months 2,257.45 Debts against the deceased, including taxes 1,655.54 ________ or as a total of 5,680.03 As stated, it appears from his report that the administrator in the course of administration received P1,919.25 from the sale of personal property. This with the P7,600 which he received from the remaining assets sold to Mannion make a total of P9,519.25 from which should be deducted P5,680.03 for and on account of the items above stated, leaving a balance due and owing from the administrator to the heirs of the deceased of P3,839.22. As stated, it is the duty of the administrator of an estate to represent and protect in interests of all interested persons, including the heirs of the deceased. It is very apparent upon their face that the entries in Exhibits D and E were not made in the ordinary course of business, and even if they were, they would not be evidence of the payments without the corresponding receipts or vouchers. That is to say, to entitle the administrator to credit for money paid out in the course of administration, he should submit and file with the court a corresponding receipt or voucher. Even so, it appears from the record that during his lifetime, the deceased employed a number of laborers on one plantation, and that after Wilson was appointed as administrator, Fleming personally took charge of and operated the plantation, and that the expense of which for the first eight months was P2,257.45. The order of the lower court approving the final account of Wilson as administrator is reversed and set aside, and a judgment will be entered in favor of the heirs and against the administrator for P3,839.22, with interest thereon from November 7, 1927, at the rate of 6 per cent per annum, without prejudice to any remedy which the heirs may have against the bondsmen of the administrator. The appellants to recover costs. So ordered. Avancea, C.J., Johnson, Street, Malcolm, Villamor, Romualdez and Villa-Real, JJ., concur.

G.R. No. L-19265 May 29, 1964 MOISES SAN DIEGO, SR., Petitioner, vs. ADELO NOMBRE and PEDRO ESCANLAR,Respondents. A. R. Castaeda and M. S. Roxas for petitioner. Amado B. Parreo Law Office for respondents. PAREDES, J.:chanrobles virtual law library The case at bar had its origin in Special Proceedings No. 7279 of the CFI of Negros Occidental wherein respondent Adelo Nombre was the duly constituted judicial administrator. On May 1, 1960, Nombre, in his capacity was judicial administrator of the intestate estate subject of the Sp. Proc. stated above, leased one of the properties of the estate (a fishpond identified as Lot No. 1617 of the cadastral survey of Kabankaban, Negros Occidental), to Pedro Escanlar, the other respondent. The terms of the lease was for three (3) years, with a yearly rental of P3,000.00 to expire on May 1, 1963, the transaction having been done, admittedly, without previous authority or approval of the Court where the proceedings was pending. On January 17, 1961, Nombre was removed as administrator by Order of the court and one Sofronio Campillanos was appointed in his stead. The appeal on the Order of Nombre's removal is supposedly pending with the Court of Appeals. Respondent Escanlar was cited for contempt, allegedly for his refusal to surrender the fishpond to the newly appointed administrator. On March 20, 1961, Campillanos filed a motion asking for authority to execute a lease contract of the same fishpond, in favor of petitioner herein, Moises San Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00. Escanlar was not notified of such motion. Nombre, the deposed administrator, presented a written opposition to the motion of Campillanos on April 11, 1964, pointing out that the fishpond had been leased by him to Escanlar for 3 years, the period of which was going to expire on May 1, 1963. In a supplemental opposition, he also invited the attention of the Court that to grant the motion of the new administrator would in effect nullify the contract in favor of Escanlar, a person on whom the Court had no jurisdiction. He also intimated that the validity of the lease contract entered into by a judicial administrator, must be recognized unless so declared void in a separate action. The opposition notwithstanding, the Court on April 8, 1961, in effect declared that the contract in favor of Escanlar was null and void, for want of judicial authority and that unless he would offer the same as or better conditions than the prospective lessee, San Diego, there was no good reason why the motion for authority to lease the property to San Diego should not be granted. Nombre moved to reconsider the Order of April 8, stating that Escanlar was willing to increase the rental of P5,000.00, but only after the termination of his original contract. The motion for reconsideration was denied on April 24, 1961, the trial judge stating that the contract in favor of Escanlar was executed in bad faith and was fraudulent because of the imminence of Nombre's removal as administrator, one of the causes of which was his indiscriminate pleasant, of the property with inadequate rentals.chanroblesvirtualawlibrarychanrobles virtual law library From this Order, a petition for Certiorari asking for the annulment of the Orders of April 8 and 24, 1961 was presented by Nombre and Escanlar with the Court of Appeals. A Writ of preliminary injunction was likewise prayed for to restrain the new administrator Campillanos from possessing the fishpond and from executing a new lease contract covering it; requiring him to return the possession thereof to Escanlar, plus damages and attorney's fees in the amount of P10,000.00 and costs. The Court of Appeals issued the injunctive writ and required respondents therein to Answer. Campillanos insisted on the invalidity of the contract in favor of Escanlar; the lower court alleged that it did not exactly annul or invalidate the lease in his questioned orders but suggested merely that Escanlar "may file a separate ordinary action in the Court of general jurisdiction." chanrobles virtual law library The Court of Appeals, in dismissing the petition for certiorari, among others said The controlling issue in this case is the legality of the contract of lease entered into by the former administrator Nombre, and Pedro Escanlar on May 1, 1960.chanroblesvirtualawlibrarychanrobles virtual law library Respondents contend that this contract, not having been authorized or approved by the Court, is null and void and cannot be an obstacle to the execution of another of lease by the new administrator, Campillanos. This contention is without merit. ... . It has been held that even in the absence of such

special powers, a contract or lease for more than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the six-year limit (Enrique v. Watson Company, et al., 6 Phil. 84). 1 chanrobles virtual law library No such limitation on the power of a judicial administrator to grant a lease of property placed under his custody is provided for in the present law. Under Article 1647 of the present Civil Code, it is only when the lease is to berecorded in the Registry of Property that it cannot be instituted without special authority. Thus, regardless of the period of lease, there is no need of special authority unless the contract is to be recorded in the Registry of Property. As to whether the contract in favor of Escanlar is to be so recorded is not material to our inquiry.chanroblesvirtualawlibrarychanrobles virtual law library On the contrary, Rule 85, Section 3, of the Rules of Court authorizes a judicial administrator, among other things, to administer the estate of the deceased not disposed of by will. Commenting on this Section in the light of several Supreme Court decisions (Jocson de Hilado v. Nava, 69 Phil. 1; Gamboa v. Gamboa, 68 Phil. 304; Ferraris v. Rodas, 65 Phil. 732; Rodriguez v. Borromeo, 43 Phil. 479), Moran says: "Under this provision, the executor or administrator has the power of administering the estate of the deceased for purposes of liquidation and distribution. He may, therefore, exercise all acts of administration without special authority of the Court. For instance, he maylease the property without securing previously any permission from the court. And where the lease has formally been entered into, the court cannot, in the same proceeding, annul the same, to the prejudice of the lessee, over whose person it had no jurisdiction. The proper remedy would be a separate action by the administrator or the heirs to annul the lease. ... . On September 13, 1961, petitioner herein Moises San Diego, Sr., who was not a party in the case, intervened and moved for a reconsideration of the above judgment. The original parties (the new administrator and respondent judge) also filed Motions for reconsideration, but we do not find them in the record. On November 18, 1961, the Court of Appeals denied the motions for reconsideration. With the denial of the said motions, only San Diego, appealed therefrom, raising legal questions, which center on "Whether a judicial administrator can validly lease property of the estate without prior judicial authority and approval", and "whether the provisions of the New Civil Code on Agency should apply to judicial administrators." chanrobles virtual law library The Rules of Court provide that An executor or administrator shall have the right to the possession of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and the expenses of administration, and shalladminister the estate of the deceased not disposed of by his will. (Sec. 3, Rule 85, old Rules). Lease has been considered an act of administration (Jocson v. Nava; Gamboa v. Gamboa; Rodriguez v. Borromeo; Ferraris v. Rodas, supra).chanroblesvirtualawlibrarychanrobles virtual law library The Civil Code, on lease, provides: If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority, the husband with respect to the wife's paraphernal real estate, the father or guardian as to the property of the minor or ward, and the manager without special power. (Art. 1647). The same Code, on Agency, states: Special powers of attorneys are necessary in the following cases:chanrobles virtual law library (8) To lease any real property to another person for more than one year. (Art. 1878) Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a judicial administrator to lease real property without prior court authority and approval, if it exceeds one year. The lease contract in favor of Escanlar being for 3 years and without such court approval and authority is, therefore, null and void.

Upon the other hand, respondents maintain that there is no limitation of such right; and that Article 1878 does not apply in the instant case.chanroblesvirtualawlibrarychanrobles virtual law library We believe that the Court of Appeals was correct in sustaining the validity of the contract of lease in favor of Escanlar, notwithstanding the lack of prior authority and approval. The law and prevailing jurisprudence on the matter militates in favor of this view. While it may be admitted that the duties of a judicial administrator and an agent (petitioner alleges that both act in representative capacity), are in some respects, identical, the provisions on agency (Art. 1878, C.C.), should not apply to a judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but also the heirs and creditors of the estate (Chua Tan v. Del Rosario, 57 Phil. 411). A judicial administrator before entering into his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to his principal. The protection which the law gives the principal, in limiting the powers and rights of an agent, stems from the fact that control by the principal can only be thru agreements, whereas the acts of a judicial administrator are subject to specific provisions of law and orders of the appointing court. The observation of former Chief Justice Moran, as quoted in the decision of the Court of Appeals, is indeed sound, and We are not prone to alter the same, at the moment.chanroblesvirtualawlibrarychanrobles virtual law library We, likewise, seriously doubt petitioner's legal standing to pursue this appeal. And, if We consider the fact that after the expiration of the original period of the lease contract executed by respondent Nombre in favor of Escanlar, a new contract in favor of said Escanlar, was executed on May 1, 1963, by the new administrator Campillanos. who, incidentally, did not take any active participation in the present appeal, the right of petitioner to the fishpond becomes a moot and academic issue, which We need not pass upon.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all respects, with costs against petitioner Moises San Diego, Sr. Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala and Makalintal, JJ., concur. Padilla, Labrador and Dizon, JJ., took no part.

G.R. No. L-28214 July 30, 1969 NATIVIDAD V. A. JARODA, Petitioner, vs. THE HONORABLE VICENTE N. CUSI, JR., Presiding Judge, Branch I, Court of First Instance of Davao, and ANTONIO V. A. TAN, in his capacity as judicial administrator of intestate estate of Carlos Villa Abrille, Special Proc. No. 1391, Court of First Instance of Davao, Respondents. Dario C. Rama for petitioner. Jose R. Madrazo, Jr. for respondents. REYES, J.B.L., J.:chanrobles virtual law library Questioned as null and void in this petition for certiorari with preliminary injunction are two (2) orders of the Court of First Instance of Davao, Branch I, issued in its Special Proceeding No. 1391 entitled "In the Matter of the Intestate Estate of Carlos Villa Abrille, deceased, Antonio V. A. Tan, petitioner."chanrobles virtual law library The first of the said two orders, dated 5 May 1965, granted an ex-parte petition by then special administrator Antonio V. A. Tan, the herein respondent, to withdraw from the Philippine National Bank the amount of P182,531.08 deposited in savings and checking accounts in the name, and during the lifetime, of Carlos Villa Abrille (now deceased) but allegedly held in trust for the decedent's co-owners in the Juna Subdivision.chanroblesvirtualawlibrarychanrobles virtual law library The second order, dated 3 September 1965, approved ex-parte the power of attorney executed by special administrator Tan appointing himself attorney-in-fact to sell the share of the estate in the subdivision lots.chanroblesvirtualawlibrarychanrobles virtual law library The aforesaid Special Proceeding No. 1391 was commenced by Antonio V. A. Tan on 22 April 1965, alleging in his petition filed with the respondent court that Carlos Villa Abrille died intestate on 3 April 1965; that he left an estate consisting of his conjugal share in real and personal properties, among which are: p. Nineteen (19) Percent share in the co-ownership known as Juna Subdivision; xxx xxx xxx xxx xxx

x x xchanrobles virtual law library

t. Cash on Bank: BPI (Savings) D-1365 in the amount of P55,284.11; PNB (Savings) 8189, in the amount of P9,047.74; and PCIB (Savings) 337, in the amount of P416.24. (Annex "A" to Petition, Rollo, pages 1415); that the heirs of the deceased are his surviving spouse, nine (9) children (among them the herein petitioner, Natividad V. A. Jaroda), and four (4) grandsons, among them the herein respondent, Antonio V. A. Tan.chanroblesvirtualawlibrarychanrobles virtual law library On 26 April 1965, respondent Tan was appointed special administrator.chanroblesvirtualawlibrarychanrobles virtual law library On 4 May 1965, respondent special administrator Tan fled an ex-parte petition for the withdrawal of the sums of P109,886.42 and P72,644.66 from the Philippine National Bank, Davao Branch, which sums were not listed in his petition for administration as among the properties left by the deceased, alleging that these sums were deposited in the name of the deceased but that they actually belong to, and were held in trust for, the co-owners of the Juna Subdivision, and alleging as reason for the withdrawal that it would be advantageous to the estate of the deceased. Annexed to the said petition are powers of attorney purportedly signed by the co-owners in 1948 and 1949 authorizing the late Carlos Villa Abrille to sell the lots in the Juna Subdivision and to deposit the proceeds thereof with the Philippine National Bank. The

alleged co-owners of the subdivision concurred in the petition, but not the heirs of the deceased (Annex "C" to Petition, Rollo, page 19).chanroblesvirtualawlibrarychanrobles virtual law library The respondent court found the petition for withdrawal of the bank deposits as "meritorious", and granted the petition in an order on 5 May 1965.chanroblesvirtualawlibrarychanrobles virtual law library On 7 May 1965, special administrator Tan executed, together with the other co-owners of the Juna Subdivision, a power of attorney appointing himself as attorney-in-fact to "sell (or) dispose upon terms and conditions as he deems wise" the lots in the 99.546-hectare subdivision (Annex "F-1" to Petition, Rollo, pages 30-32).chanroblesvirtualawlibrarychanrobles virtual law library On 9 September 1965, respondent Tan was issued letters of administration by the respondent court.chanroblesvirtualawlibrarychanrobles virtual law library On the same day, 9 September 1965, as regular administrator, respondent Tan filed a petition with the respondent court, alleging that the deceased was the manager of and a co-owner in the Juna Subdivision and that he had been engaged in the business of selling the lots, and praying for the approval by the court of the power of attorney executed by him, in behalf of the intestate estate, and appointing and authorizing himself to sell the lots.chanroblesvirtualawlibrarychanrobles virtual law library The court granted the petition, "as prayed for," on 3 September 1965.chanroblesvirtualawlibrarychanrobles virtual law library On 29 November 1966, herein petitioner Natividad V. A. Jaroda moved to nullify the order of 5 May 1965, that allowed the withdrawal of the bank deposits, as well as the order of 3 September 1965, which approved the power of attorney.chanroblesvirtualawlibrarychanrobles virtual law library The respondent court denied, on 25 February 1967, "for lack of merit" the aforesaid motion.chanroblesvirtualawlibrarychanrobles virtual law library Petitioner Jaroda appealed from the order of denial, but the respondent court dismissed the appeal on the ground that the order appealed from was interlocutory. Jaroda then filed before the Supreme Court a petition for certiorari and/or mandamus on 8 July 1967, docketed as G.R. No. L-27831, but this Court dismissed the petition, adding in its resolution that appeal in due time is the remedy.chanroblesvirtualawlibrarychanrobles virtual law library On 28 October 1967, petitioner Jaroda filed the present petition for certiorari with preliminary injunction. She alleged, among other things, that appeal would not be speedy and adequate as respondent Tan has sold and continues to sell the subdivision lots on the strength of the respondent court's order, to her irreparable prejudice and that of the other heirs. This Court gave due course to the petition and issued preliminary injunction on 3 November 1967, restraining the respondent from selling the share of the intestate estate.chanroblesvirtualawlibrarychanrobles virtual law library We agree with petitioner that the order of 5 May 1965 allowing the special administrator to withdraw the bank deposits standing in the name of the decedent is in abuse of discretion amounting to lack of jurisdiction. In the first place, said withdrawal is foreign to the powers and duties of a special administrator, which, as Section 2 of Rule 80 of the Rules of Court provides, are to take possession and charge of the goods, chattels, rights, credits and estate of the decease and preserve the same for the executor or administrator afterwards appointed, and for that purpose may commence and maintain suits as administrator. He may sell only such perishable and other property as the court orders sold. A special administrator shall not be liable to pay any debts of the deceased unless so ordered by the court. In the second place, the order was issued without notice to, and hearing of, the heirs of the deceased. The withdrawal of the bank deposits may be viewed as a taking of possession and charge of the credits of the estate, and apparently within the powers and duties of a special administrator; but actually,

said withdrawal is a waiver by the special administrator of a prima facie exclusive right of the intestate estate to the bank deposits in favor of the co-owners of the Juna Subdivision, who were allegedly claiming the same as alleged by the administrator in his motion (Petition, Annex "C"). The bank deposits were in the name of the deceased; they, therefore, belong prima facie to his estate after his death. And until the contrary is shown by proper evidence at the proper stage, when money claims may be filed in the intestate proceedings, the special administrator is without power to make the waiver or to hand over part of the estate, or what appears to be a prima facie part of the estate, to other persons on the ground that the estate is not the owner thereof. If even to sell for valuable consideration property of the estate requires prior written notice of the application to the heirs, legatees, or devisees under Rule 89 of the Rules of Court, such notice is equally, if not more, indispensable for disposing gratuitously of assets of the decedent in favor of strangers. Admittedly, no such notice was given, and without it the court's authority is invalid and improper.chanroblesvirtualawlibrarychanrobles virtual law library The order of 3 September 1965 approving the power of attorney executed by administrator Tan and appointing himself as attorney-in-fact to sell the subdivision lots for a price at his discretion is, likewise, void for want of notice and for approving an improper contract or transaction.chanroblesvirtualawlibrarychanrobles virtual law library The very rule, Section 4 of Rule 89 of the Rules of Court, relied on by respondent Tan to sustain the power of attorney for the sale of the pro-indiviso share of the estate in the subdivision requires "written notice to the heirs, devisees, and legatees who are interested in the estate to be sold" and, admittedly, administrator Tan did not furnish such notice. (Answer, pages 1 and 2, paragraph 3, Rollo, page 53) Without such notice, the order of the court authorizing the sale is void. (Estate of Gamboa vs. Floranza, 12 Phil. 191; Gabriel vs. Encarnacion, 94 Phil. 917)chanrobles virtual law library But respondent Tan holds petitioner Jaroda with actual knowledge of the questioned order, and to show it he quotes the transcript of stenographic notes of a discussion by a lawyer of Jaroda about the said order. The discussion, however, took place on 19 March 1966 while the order was issued on 13 September 1965, and there is nothing in the discussion that may indicate knowledge by Jaroda of the order before, at or immediately after its issuance.chanroblesvirtualawlibrarychanrobles virtual law library It has been broadly stated that an administrator is not permitted to deal with himself as an individual in any transaction concerning trust property. (Pesula's Estate, 64 ALR 2d 851, 150 Cal. App. 2d 462, 310 P 2d 39) It is well settled that an executrix holds the property of her testator's estate as a trustee. In re Heydenfeldt's Estate, 117 Cal. 551, 49 P. 713;Firebaugh v. Burbank, 121 Cal. 186, 53 P. 560. It is equally well settled that an executrix will not be permitted to deal with herself as an individual in any transaction concerning the trust property. Civil Code, S 2230. In Davis v. Rock Creek L., F. & M Co., 55 Cal. 359, at page 364, 36 Am. Rep. 40, it is said: 'The law, for wise reasons, will not permit one who acts in a fiduciary capacity thus to deal with himself in his individual capacity.' The following cases are to the same effect: Wickersham v. Crittenden, 93 Cal. 17, 29, 28 P. 788; Sims v. Petaluma Gas Light Co., 131 Cal. 656, 659, 63 P. 1011; Western States Life Ins. Co. v. Lockwood, 166 Cal. 185, 191, 135 P. 496; In re Estate of Parker, 200 Cal. 132, 139, 251 P 907, 49 A. L. R. 1025. In Wickersham v. Crittenden,supra, 93 Cal. at page 29, 28 P. at page 790, it is further stated in respect to a transaction wherein a trustee sought to deal with trust property: 'Courts will not permit any investigation into the fairness of the transaction, or allow the trustee to show that the dealing was for the best interest of the beneficiary.' This language is quoted with approval in the case of Pacific Vinegar & Pickle Works v. Smith, 145 Cal. 352, 365, 78 P. 550, 104 Am. St. Rep 42. (In re Bogg's Estate, 121 P. 2d 678, 683). The opinion of some commentators that, as a general rule, auto-contracts are permissible if not expressly prohibited (See Tolentino, Civil Code of the Philippines, Vol. IV 1962, pages 375-377), and that there is no express provision of law prohibiting an administrator from appointing himself as his own agent, even if correct, cannot and should not apply to administrator of decedent's estates, in view of the fiduciary relationship that they occupy with respect to the heirs of the deceased and their responsibilities toward the probate court. A contrary ruling would open the door to fraud and maladministration, and once the harm is done, it might be too late to correct it. A concrete example would be for administrator Tan to authorize agent Tan to sell a lot for P50, with the condition that if he can sell it for more he could keep the

difference; agent Tan sells the lot for P150.00; he retains P100.00 and deposits in the bank P50.00 "in the name of Antonio V. A. Tan, in trust for Juna Subdivision" (as worded in the power of attorney. Annex "F1"); thus, administrator Tan's accounting to the estate for the sale of the lot for P50 would be in order, but the estate would have been actually cheated of the sum of P100, which went to agent Tan in his individual capacity.chanroblesvirtualawlibrarychanrobles virtual law library The court below also failed to notice that, as alleged in the administrator's petition (Annex "F" herein), after the death of Carlos Villa Abrille the administrator Tan, in his personal capacity, had replaced said deceased as manager of the Juna Subdivision by authority of the other co-owners. By the court's questioned order of 3 September 1965 empowering him to represent the interest of the deceased in the management of the subdivision, the administrator Tan came to be the agent or attorney-in-fact of two different principals: the court and the heirs of the deceased on the one hand, and the majority co-owners of the subdivision on the other, in managing and disposing of the lots of the subdivision. This dual agency of the respondent Tan rendered him incapable of independent defense of the estate's interests against those of the majority co-owners. It is highly undesirable, if not improper, that a court officer and administrator, in dealing with property under his administration, should have to look to the wishes of strangers as well as to those of the court that appointed him. A judicial administrator should be at all times subject to the orders of the appointing Tribunal and of no one else.chanroblesvirtualawlibrarychanrobles virtual law library That petitioner Jaroda, as heir of the late Carlos Villa Abrille, should hold a minor interest (/ of 19%) in the co-ownership known as the Juna Subdivision and that the early termination of said coownership would redound to the benefit of the co-owners, including the heirs of Carlos Villa Abrille, are beside the point. Jaroda's interest in the estate demands that she be heard by the court in all matters affecting the disposal of her share, and that the administrator should primarily protect the interest of the estate in which she is a participant rather than those of the decedent's coowners.chanroblesvirtualawlibrarychanrobles virtual law library The resolution of this Court in L-27836 (Natividad V. A. Jaroda vs. the Hon. Vicente N. Cusi, Jr., etc., et al.), dismissing the petition for certiorari and/or mandamus and stating that appeal in due time is the remedy, is no bar to the present petition, for it has not been shown that the allegations in both the dismissed petition and those of the present one are substantially the same. Anyway, certiorari lies if appeal would not be prompt enough to block the injurious effects of the orders of the lower court (Silvestre vs. Torres, et al., 57 Phil. 885; Pachoco vs. Tumangday, L-14500, 25 May 1960; Mayormente vs. Robaco Corp., L-25337, 27 Nov. 1967, 21 SCRA 1080).chanroblesvirtualawlibrarychanrobles virtual law library After the present case was submitted for decision, respondent Tan manifested that the co-owners of the Juna Subdivision and the heirs of the late Carlos Villa Abrille, including the petitioner Natividad V. A. Jaroda, had executed a partial partition and the same has been approved by the probate court. Said approved partial partition has no effect, one way or the other, upon the orders contested in the present case. For one thing, it is not definite whether the lots described in the 57 pages of the partition agreement correspond to those of the Juna Subdivision as described in the power of attorney.chanroblesvirtualawlibrarychanrobles virtual law library FOR THE FOREGOING REASONS, the order of 5 May 1965 and 3 September 1965 of the Court of First Instance of Davao, Branch I, in its Special Proceeding No. 1391, are hereby set aside and declared null and void. The preliminary injunction heretofore issued is hereby made permanent. Costs against the respondent, Antonio V. A. Tan, in his personal capacity. Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

EN BANC G.R. No. L-9686 May 30, 1961 FELICISIMO C. JOSON, administrator-appellee, vs. EDUARDO JOSON, ET AL., heirs-appellants. Lavides, Sicat & Lavides for administrator-appellee. Mario S. Garcia for heirs-appellants. ANGELO, J.:chanrobles virtual law library Tomas Joson died on July 5, 1945 in Quezon, Nueva Ecija leaving behind heirs and properties. He married three times and was survived by nine (9) heirs: two (2) children and grandchildren by his first wife Eufemia de la Cruz; two (2) daughters by his second wife Pomposa Miguel and his third wife and surviving widow Dominga M. Joson. Upon his death, his will was presented to the Court of First Instance of Nueva Ecija by his son Felicisimo Joson for probate. In August, 1945, said will having been duly probated, Felicisimo Joson was appointed administrator of the estate and, accordingly, he filed an inventory of the properties left by the deceased.chanroblesvirtualawlibrarychanrobles virtual law library On April 15, 1948, the administrator filed his first account for the year 1945-1946. This was ordered by the court to be examined by the clerk of court but the same has never been approved. On July 19, 1948, he filed his second account for the year 1946-1947 which was also referred to the clerk of court for examination. The same has never been also approved by the court. On November 11, 1948, the administrator filed another account for the year 1947-1948 and, upon motion of the heirs, he was ordered to file an accounting covering the properties under his administration. On September 7, 1954, Eduardo Joson, one of the heirs, filed an opposition to all the accounts filed by the administrator where he alleged that the administrator diminished the shares of the heirs in the yearly produce of the properties and had padded his expenses of administration, and on September 29, 1954, the same heir filed another motion praying the court to order the administrator to post a bond in the amount of P50,000.00 For the reason that from the accounts represented by him to be the true income of the estate from 1947 to 1953 there was a big difference of P132,600.00 which the administrator should account for to the heirs. On October 14, 1954, the administrator submitted an amended statement of accounts for the same years which were objected by two more heirs on the ground that the administrator had reported for the years 1947-1952 an income short of what was actually received and expenses much bigger than those actually incurred by him.chanroblesvirtualawlibrarychanrobles virtual law library In the meantime, or on December 30, 1952, the heirs were able to compromise their differences and entered into an extrajudicial settlement and partition of the entire estate under the provisions of Section 1, Rule 74, of the Rules of Court which provides for the settlement of the estate without court intervention. This settlement was contained in two documents executed on the same date wherein they manifested that they are entering into it because of their desire to put an end to the judicial proceeding and administration. But, as the court was never informed of this extrajudicial settlement either by the administrator or by the heirs, it issued on May 19, 1954 an order requiring the administrator to file an accounting of his administration from 1949 to 1954, which accordingly the administrator complied with by submitting an amended statement of his accounts as already mentioned above.chanroblesvirtualawlibrarychanrobles virtual law library However, on November 25, 1954, without said accounts having been heard or approved, the administrator filed a motion to declare the proceedings closed and terminated and to relieve him of his duties as such, which motion was amended by him on January 15, 1955. Heir Eduardo Joson filed an opposition to said motion but, after hearing, the court issued an order declaring the proceedings terminated and relieving the administrator not only of his duties as such but also of his accounts notwithstanding the heirs' opposition to said accounts. Hence this appeal:chanrobles virtual law library In granting the motion of the administrator to declare the proceedings closed and terminated and relieving him of his duties and of his accounts, the trial court made the following pronouncement:

. . . It is claimed by the oppositor that the estate cannot be declared closed and terminated for the reason that some of the accounts submitted by the administrator for the years 1945 to 1948 have not been approved. The Court does not find any logic in this contention. The heirs knew on December 30, 1952, when they entered into an extra-judicial settlement of the estate, the existence of those accounts, but nothing is mentioned in the said extra-judicial settlement regarding the same. They are, therefore, presumed to have approved these accounts and have their opposition thereto. There is, therefore, no reason to suspend the closing of this proceeding and make the same depend upon the approval of these old accounts. To do so would be like making the accessory more important than the principal. There is no doubt that the report of the administrator of his administration is a mere incident in this proceeding to wind up the estate of the deceased. If the parties concerned have already entered into an extra-judicial settlement of the estate, the same should put an end to this proceeding. Once this proceeding is terminated, the incidents thereto must yield, since the only purpose of submitting a report of the accounts by the administrator is to facilitate the liquidation. The administration of an estate cannot be an end but only a means of settlement of the estate. It, therefore, becomes unnecessary and a mere waste of time to call the administrator to account for, or to report on, his administration from the moment that the heirs have already entered into an extra-judicial settlement. To do so, would amount to a modification of the extra-judicial settlement which is the law between the parties, which include the oppositors herein. The issues now posed by appellants are: (1) Is the duty of an administrator to make an accounting of his administration a mere incident which can be avoided once the estate has been settled?; (2) Are the proceedings deemed terminated by the mere execution of an extrajudicial partition of the estate without the necessity of having the accounts of the administrator heard and approved by the court?; and (3) Is the administrator ipso facto relieved of his duty of proving his account from the moment said partition has been executed? Appellants answer these questions in the negative with the argument that if the contrary is to be upheld as was done by the trial court the same would be contrary to the express provisions of our rules relative to the duties of a judicial administrator. Hence, they argue, the trial court committed an error in closing the estate in disregard of the accounts submitted by the administrator.chanroblesvirtualawlibrarychanrobles virtual law library We find merit in this contention. To begin with, Section 1 of Rule 86 categorically charges an administrator "with the whole of the estate of the deceased which has come into his possession at the value of appraisement contained in the inventory; with all the interest, profit, and income of such an estate; and with the proceeds of so much of the estate as is hold by him, at the price at which sold." Section 8 of the same rule imposes upon him the duty to render an account of his administration within one year from his appointment, unless the court otherwise directs, as well as to render such further accounts as the court may require until the estate is fully settled. Section 10 likewise provides that before an account of the administrator is allowed notice shall be given to all persons interested of the time and place of examining and allowing the same. And finally Section 9 expressly directs that the court shall examine the administrator upon oath with respect to every matter relating to his account except when no objection is made to the allowance of the account and its correctness is satisfactorily established by competent testimony.chanroblesvirtualawlibrarychanrobles virtual law library It thus appears that the duty of an administrator to render an account is not a mere incident of an administration proceeding which ran be waived or disregarded when the same is terminated, but that it is a duty that has to be performed and duly acted upon by the court before the administration is finally ordered closed and terminated. Here the administrator has submitted his accounts for several years not only motu proprio but upon requirement of the court, to which accounts the heirs have seasonably submitted their opposition. And when the administrator moved the court to close the proceedings and relieve him of his administration and of his accounts, the heirs who objected thereto objected likewise to the closing of the proceedings invoking their right to be heard but the court ignored their opposition and granted the motion setting forth as reasons therefor what we quoted in the early part of this decision. Verily, the trial court erred in acceding to the motion for in doing so it disregarded the express provisions of our rules relative to the settlement of accounts of a judicial administrator.chanroblesvirtualawlibrarychanrobles virtual law library The fact that all the heirs of the estate have entered into an extrajudicial settlement and partition in order to put an end to their differences cannot in any way be interpreted as a waiver of the objections of the heirs to the accounts submitted by the administrator not only because to so hold would be a derogation of

the pertinent provisions of our rules but also because there is nothing provided in said partition that the aforesaid accounts shall be deemed waived or condoned. While the attitude of the heirs in concluding said extrajudicial settlement is plausible and has contributed to the early settlement of the estate, the same cannot however be considered as release of the obligation of the administrator to prove his accounts. This is more so when, according to the oppositors, the administrator has committed in his accounts a shortage in the amount of P132,600.00 which certainly cannot just be brushed aside by a mere technicality.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the order appealed from is set aside. The case shall be remanded to the trial court for further proceedings in line with this decision. No costs.chanroblesvirtualawlibrarychanrobles virtual law library Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon, De Leon and Natividad, JJ., concur. Barrera, J., took no part.

EN BANC G.R. No. L-4090 January 31, 1952 INTESTATE ESTATE OF THE DECEASED HONOFRE LEYSON, deceased. VICTORIO L. RODRIGUEZ, administrator-appellant, and MARGARITA LEYSON LAURENTE, heiress-appellant, vs. PABLO M. SILVA, movant-appellee. Eliseo Caunca for appellants. Fidel J. Silva for appellee. TUASON, J.: This appeal is from an order of the Court of First Instance of Manila, Honorable Rafael Amparo, Judge authorizing the cancellation of the bond of Pablo M. Silva who had resigned as joint administrator of the intestate estate of Honofre Leyson, deceased, and allowing Silva P600 as compensation for his services. The appellants are the remaining administrator and an heir of the deceased.chanroblesvirtualawlibrary chanrobles virtual law library The appeal was elevated to this Court on the appellant's manifestation that they would raise only questions of law. Following are the assignments of error: The lower court erred in issuing its order of August 19, 1949, granting Pablo M. Silva's motion filed on August 9, 1949, and ordering the cancellation of his bond and authorizing him to collect from the estate the sum of P600.00 as his administrator's fees, inasmuch as said order is not in accordance with the provisions section 7, Rule 86 of the rules of Court.chanroblesvirtualawlibrary chanrobles virtual law library That taking for granted, but without admitting that the compensation of the administrators from their appointment up to the issuance of the order dated August 19, 1950, granting the resignation of Mr. Pablo M. Silva that the sum of P600 is reasonable, the lower court, however, erred in not providing that, in view of the fact that in this proceeding there are two administrators according to the services actually rendered by them respectively, in accordance with the provision of Section 7, paragraph 2, Rule 86 of the Rules of court, and that the sum of P100.00 already received by the appellee be deducted from any amount that may finally be conceded to him.chanroblesvirtualawlibrary chanrobles virtual law library Lastly, the lower court erred in cancelling Mr. Pablo M. Silva's administrators bond, inasmuch as few months before the issuance of said order dated August 19, 1950, granting his resignation, he secured the cancellation of Transfer Certificate of Title No. 13 (6947) Quezon City, and Transfer Certificate of Title No. 11778 Manila, issued in the name of Honofre Leyson, and in their stead another titles were issued in the name of Mr. Pablo M. Silva, the herein appellee, in a doubtful manner. The first two assignments of error raise the same question or allied questions and may well be considered together. This question is, may the court fix an administrator's or executor's fee in excess of the fees prescribed by section 7 of Rule 86, which follows? SEC. 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced . An executor or administrator shall be allowed the necessary expenses in the care, management, and settlement of the estate, and for his services, four pesos per day for the time actually and necessarily employed, or a commission upon the value of so much of the estate as comes into his possession and is finally disposed of by him in the payment of debts, expenses, legacies, or distributive shares, or by delivery to heirs or devises, of two per centum of the first five thousand pesos of such value, one per centum of such value as exceeds five thousand pesos and does not exceed thirty thousand pesos, one-half per centum of so much of such value as exceeds thirty thousands pesos and does not exceed one hundred thousand pesos, and one-quarter per centum of so much of such value as exceeds one hundred thousand pesos. But in any special case, where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator, a greater sum may be allowed. If objection to the

fees allowed be taken, the allowance may be reexamined on appeal.chanroblesvirtualawlibrary chanrobles virtual law library If there are two or more executors or administrators, the compensation shall be apportioned among them by the court according to the services actually rendered by them respectively.chanroblesvirtualawlibrary chanrobles virtual law library When the executor or administrator is an attorney he shall not charge against the estate any professional fees for legal services rendered by him.chanroblesvirtualawlibrary chanrobles virtual law library When the deceased by will makes some other provision for the compensation of his executor, that provision shall be a full satisfaction for his services unless by a written instrument filed in the court he renounces all claim to the compensation provided by the will. It will be seen from this provision that a greater sum may be allowed "in any special case, where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator." And so it has been held that "the amount of an executor's fee allowed by the Court of first Instance in any special case under the provisions of Section 680 of the Code of Civil Procedure is a matter largely in the discretion of the probate court, which will not be disturbed on appeal, except for an abuse of discretion." (Rosentock, vs. Elser, 48 Phil. 709.)chanrobles virtual law library The order of which the appellants complain does not state the work performed by the appellee, but the inventory shows the appraised value of the estate to be P22,116.46, itemized as follows: Cash on deposit in the Philippine National Bank ....................... Accounts receivable ....................................................................... P8,159.43 500.00

Real Estate 12,061.03 ........................................................................................ Personal Property ............................................................................ 1,291.00

And it is stated in the appellee's brief that prior to his appointment and that of Victorio L. Rodriguez as joint administrators, Justa Gomez, the decedent's cousin with whom Leyson lived was special administratrix; that during Justa Gomez's incumbency which lasted till December 8, 1947, the lease holdings of the said estate were renting about 900.00 a month; that after appellee's appointment, and through his initiative, their income was increased to P1,300.00 and two parcels of land located in San Juan, Rizal, were paid for in full and the corresponding certificates of title secured. It also asserted, and not denied, that the appellee was instrumental in the gathering of decedent's personal effects, and that as the result of his motion a court order, whereby Margarita Leyson Laurente, one of the now appellants, had been authorized to withdraw from the bank P3,400 as advance payment of her share of the inheritance, was reconsidered and set aside. The fact that the appellee is an attorney-at-law has served the estate in good stead, has served the estate in good stead, and this ought not be lost sight it. Although being a lawyer is by itself not a factor in the assessment of an administrator's fee, it should be otherwise as in this case the administrator was able to stop what appeared to be an improvident disbursement of a substantial amount without having to employ outside legal help at an additional expense to estate.chanroblesvirtualawlibrary chanrobles virtual law library The appellant having announced that no questions of fact would be discussed is estopped from contesting the above allegations. On the basis of the services thus specified, coupled with the fact that the appellee worked as co-probate court committed an abuse of discretion in granting him P600.00 or P700.00, as fee independent of the fee that might be allowed the other administrator.chanroblesvirtualawlibrary chanrobles virtual law library

As to the cancellation of the appellee's bond, which is the subject of the third ground for appeal, there is no showing that De Silva was guilty of misappropriation or any of the acts of commission or omission for which his bond could be held liable under Rule 86. The sole ground for the insistence that this cancellation should have been withheld is that the appellee is in possession of a residential lot in Cubao, Quezon City, which belonged to the deceased Honofre Leyson. But the appellee claims that this lot was sold to him by Leyson on March 2, 1945. Certainly it was already in possession when he and appellant Rodriguez took over the administration from the special administratrix. This land therefore did not come into De Silva's hands in pursuance or in the inventory prepared by or in conjunction with one of the appellants. Even granting then, for the sake of argument, that De Silva has no valid title to this lot, the sureties are not chargeable for it on the bond. De Silva's liability is personal and exclusive of the sureties who are the parties mostly affected by the third assignment of error.chanroblesvirtualawlibrary chanrobles virtual law library Moreover, there is a pending suit over this property and that suit affords the estate ample protection against the said property being alienated pending final disposition of the litigation.chanroblesvirtualawlibrary chanrobles virtual law library Upon the foregoing consideration, the order appealed from is affirmed, with costs.chanroblesvirtualawlibrary chanrobles virtual law library Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo and Bautista Angelo, JJ.,concur.

[G.R. NO. 174873 : August 26, 2008] QUASHA ANCHETA PEA AND NOLASCO LAW OFFICE FOR ITS OWN BEHALF, AND REPRESENTING THE HEIRS OF RAYMOND TRIVIERE, Petitioners, v. LCN CONSTRUCTION CORP., Respondent. DECISION CHICO-NAZARIO, J.: This is a Petition for Review under Rule 45 of the Revised Rules of Court with petitioners Quasha Ancheta Pea and Nolasco Law Office (Quasha Law Office) and the Heirs of Raymond Triviere praying for the reversal of the Decision1 dated 11 May 2006 and Resolution2 dated 22 September 2006 of the Court of Appeals granting in part the Petition for Certiorari filed by respondent LCN Construction Corporation (LCN) in CA-G.R. SP No. 81296. The factual antecedents of the case are as follows: Raymond Triviere passed away on 14 December 1987. On 13 January 1988, proceedings for the settlement of his intestate estate were instituted by his widow, Amy Consuelo Triviere, before the Regional Trial Court (RTC) of Makati City, Branch 63 of the National Capital Region (NCR), docketed as Special Proceedings Case No. M-1678. Atty. Enrique P. Syquia (Syquia) and Atty. William H. Quasha (Quasha) of the Quasha Law Office, representing the widow and children of the late Raymond Triviere, respectively, were appointed administrators of the estate of the deceased in April 1988. As administrators, Atty. Syquia and Atty. Quasha incurred expenses for the payment of real estate taxes, security services, and the preservation and administration of the estate, as well as litigation expenses. In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for Payment of their litigation expenses. Citing their failure to submit an accounting of the assets and liabilities of the estate under administration, the RTC denied in May 1995 the Motion for Payment of Atty. Syquia and Atty. Quasha. In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the Quasha Law Office, took over as the counsel of the Triviere children, and continued to help Atty. Syquia in the settlement of the estate. On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for Payment, 3for their own behalf and for their respective clients, presenting the following allegations: (1) That the instant Petition was filed on January 13, 1988; and Atty. Enrique P. Syquia was appointed Administrator by the Order of this Honorable Court dated April 12, 1988, and discharged his duties starting April 22, 1988, after properly posting his administrator's bond up to this date, or more than fourteen (14) years later. Previously, there was the co-administrator Atty. William H. Quasha, but he has already passed away. (2) That, together with Co-administrator Atty. William H. Quasha, they have performed diligently and conscientiously their duties as Co-administrators, having paid the required Estate tax and settled the various claims against the Estate, totaling approximately twenty (20) claims, and the only remaining claim is the unmeritorious claim of LCN Construction Corp., now pending before this Honorable Court; (3) That for all their work since April 22, 1988, up to July 1992, or for four (4) years, they were only given the amount of P20,000.00 each on November 28, 1988; and another P50,00.00 each on October 1991; and the amount ofP100,000.00 each on July 1992; or a total of P170,000.00 to cover their administration fees, counsel fees and expenses; (4) That through their work, they were able to settle all the testate (sic) claims except the remaining baseless claim of LCN Construction Corp., and were able to dismiss two (2) foreign claims, and were also

able to increase the monetary value of the estate from roughly over P1Million to the presentP4,738,558.63 as of August 25, 2002 and maturing on September 27, 2002; and the money has always been with the Philippine National Bank, as per the Order of this Honorable Court; (5) That since July 1992, when the co-administrators were paid P100,000.00 each, nothing has been paid to either Administrator Syquia or his client, the widow Consuelo Triviere; nor to the Quasha Law Offices or their clients, the children of the deceased Raymond Triviere; (6) That as this Honorable Court will notice, Administrator Syquia has always been present during the hearings held for the many years of this case; and the Quasha Law Offices has always been represented by its counsel, Atty. Redentor C. Zapata; and after all these years, their clients have not been given a part of their share in the estate; (7) That Administrator Syquia, who is a lawyer, is entitled to additional Administrator's fees since, as provided in Section 7, Rule 85 of the Revised Rules of Court: "x x x where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator, a greater sum may be allowed' " In addition, Atty. Zapata has also been present in all the years of this case. In addition, they have spent for all the costs of litigation especially the transcripts, as out-of-pocket expenses. (8) That considering all the foregoing, especially the fact that neither the Administrator or his client, the widow; and the Quasha Law Offices or their clients, the children of the deceased, have received any money for more than ten (10) years now, they respectfully move that the amount of P1Million be taken from the Estate funds, to be divided as follows: a) P450,000.00 as share of the children of the deceased [Triviere] who are represented by the Quasha Ancheta Pea & Nolasco Law Offices; b) P200,000.00 as attorney's fees and litigation expenses for the Quasha Ancheta Pea & Nolasco Law Offices; c) P150,000.00 as share for the widow of the deceased [Raymond Triviere], Amy Consuelo Triviere; andcralawlibrary d) P200,000.00 for the administrator Syquia, who is also the counsel of the widow; and for litigation costs and expenses. LCN, as the only remaining claimant4 against the Intestate Estate of the Late Raymond Triviere in Special Proceedings Case No. M-1678, filed its Comment on/Opposition to the afore-quoted Motion on 2 October 2002. LCN countered that the RTC had already resolved the issue of payment of litigation expenses when it denied the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for failure of the administrators to submit an accounting of the assets and expenses of the estate as required by the court. LCN also averred that the administrators and the heirs of the late Raymond Triviere had earlier agreed to fix the former's fees at only 5% of the gross estate, based on which, per the computation of LCN, the administrators were even overpaid P55,000.00. LCN further asserted that contrary to what was stated in the second Motion for Payment, Section 7, Rule 85 of the Revised Rules of Court was inapplicable,5 since the administrators failed to establish that the estate was large, or that its settlement was attended with great difficulty, or required a high degree of capacity on the part of the administrators. Finally, LCN argued that its claims are still outstanding and chargeable against the estate of the late Raymond Triviere; thus, no distribution should be allowed until they have been paid; especially considering that as of 25 August 2002, the claim of LCN against the estate of the late Raymond Triviere amounted to P6,016,570.65 as against the remaining assets of the estate totaling P4,738,558.63, rendering the latter insolvent.

On 12 June 2003, the RTC issued its Order6 taking note that "the widow and the heirs of the deceased Triviere, after all the years, have not received their respective share (sic) in the Estate x x x." The RTC declared that there was no more need for accounting of the assets and liabilities of the estate considering that: [T]here appears to be no need for an accounting as the estate has no more assets except the money deposited with the Union Bank of the Philippines under Savings Account No. 12097-000656-0 x x x; on the estate taxes, records shows (sic) that the BIR Revenue Region No. 4-B2 Makati had issued a certificate dated April 27, 1988 indicating that the estate taxes has been fully paid.7 As to the payment of fees of Atty. Syquia and the Quasha Law Office, the RTC found as follows: [B]oth the Co-Administrator and counsel for the deceased (sic) are entitled to the payment for the services they have rendered and accomplished for the estate and the heirs of the deceased as they have over a decade now spent so much time, labor and skill to accomplish the task assigned to them; and the last time the administrators obtained their fees was in 1992.8 Hence, the RTC granted the second Motion for Payment; however, it reduced the sums to be paid, to wit: In view of the foregoing considerations, the instant motion is hereby GRANTED. The sums to be paid to the co-administrator and counsel for the heirs of the deceased Triviere are however reduced. Accordingly, the co-administrator Atty. Syquia and aforenamed counsel are authorized to pay to be sourced from the Estate of the deceased as follows: a) P450,000.00 as share of the children of the deceased who are represented by the Quasha, Ancheta, Pena, Nolasco Law Offices; b) P100,000.00 as attorney's fees and litigation expenses for said law firm; c) P150,000.00 as share for the widow of the deceased Amy Consuelo Triviere; andcralawlibrary d) P100,000.00 for the Co-administrator Atty. Enrique P. Syquia and for litigation costs and expenses. 9 LCN filed a Motion for Reconsideration10 of the foregoing Order on 2 July 2003, but it was denied by the RTC on 29 October 2003.11 On 13 May 2004, LCN sought recourse from the Court of Appeals by assailing in CA-G.R. SP No. 81296, a Petition for Certiorari, the RTC Orders dated 12 June 2003 and 2 July 2003, for having been rendered with grave abuse of discretion.12 LCN maintained that: (1) The administrator's claim for attorney's fees, aside from being prohibited under paragraph 3, Section 7 of Rule 85 is, together with administration and litigation expenses, in the nature of a claim against the estate which should be ventilated and resolved pursuant to Section 8 of Rule 86; (2) The awards violate Section 1, Rule 90 of the Rules of Court, as there still exists its (LCN's) unpaid claim in the sum of P6,016,570.65; andcralawlibrary (3) The alleged deliberate failure of the co-administrators to submit an accounting of the assets and liabilities of the estate does not warrant the Court's favorable action on the motion for payment.13 On 11 May 2006, the Court of Appeals promulgated a Decision essentially ruling in favor of LCN. While the Court of Appeals conceded that Atty. Syquia and the Quasha Law Office, as the administrators of the estate of the late Raymond Triviere, were entitled to administrator's fees and litigation expenses,

they could not claim the same from the funds of the estate. Referring to Section 7, Rule 85 of the Revised Rules of Court, the appellate court reasoned that the award of expenses and fees in favor of executors and administrators is subject to the qualification that where the executor or administrator is a lawyer, he shall not charge against the estate any professional fees for legal services rendered by him. Instead, the Court of Appeals held that the attorney's fees due Atty. Syquia and the Quasha Law Offices should be borne by their clients, the widow and children of the late Raymond Triviere, respectively. The appellate court likewise revoked the P450,000.00 share and P150,000.00 share awarded by the RTC to the children and widow of the late Raymond Triviere, respectively, on the basis that Section 1, Rule 91 of the Revised Rules of Court proscribes the distribution of the residue of the estate until all its obligations have been paid. The appellate court, however, did not agree in the position of LCN that the administrators' claims against the estate should have been presented and resolved in accordance with Section 8 of Rule 86 of the Revised Rules of Court. Claims against the estate that require presentation under Rule 86 refer to "debts or demands of a pecuniary nature which could have been enforced against the decedent during his lifetime and which could have been reduced to simple judgment and among which are those founded on contracts." The Court of Appeals also found the failure of the administrators to render an accounting excusable on the basis of Section 8, Rule 85 of the Revised Rules of Court.14 Finding the Petition for Certiorari of LCN partly meritorious, the Court of Appeals decreed: WHEREFORE, premises considered, the instant petition is hereby PARTLY GRANTED. The assailed Orders of the public respondent are hereby AFFIRMED with MODIFICATION in that (1) the shares awarded to the heirs of the deceased Triviere in the assailed Order of June 12, 2003 are hereby DELETED; andcralawlibrary (2) the attorney's fees awarded in favor of the co-administrators are herebyDELETED. However, inasmuch as the assailed order fails to itemize these fees from the litigation fees/administrator's fees awarded in favor of the co-administrators, public respondent is hereby directed to determine with particularity the fees pertaining to each administrator.15 Petitioner filed a Motion for Reconsideration16 of the 11 May 2006 Decision of the Court of Appeals. The Motion, however, was denied by the appellate court in a Resolution dated 22 September 2006,17 explaining that: In sum, private respondents did not earlier dispute [herein respondent LCN's] claim in its petition that the law firm and its lawyers served as co-administrators of the estate of the late Triviere. It is thus quite absurd for the said law firm to now dispute in the motion for reconsideration its being a co-administrator of the estate. [Herein petitioners], through counsel, likewise appear to be adopting in their motion for reconsideration a stance conflicting with their earlier theory submitted to this Court. Notably, the memorandum for [petitioner] heirs states that the claim for attorney's fees is supported by the facts and law. To support such allegation, they contend that Section 7 (3) of Rule 85 of the 1997 Rules of Civil Procedure finds no application to the instant case since "what is being charged are not professional fees for legal services rendered but payment for administration of the Estate which has been under the care and management of the co-administrators for the past fourteen (14) years." Their allegation, therefore, in their motion for reconsideration that Section 7 (3) of Rule 85 is inapplicable to the case of Quasha Law Offices because it is "merely seeking payment for legal services rendered to the estate and for litigation expenses" deserves scant consideration. xxx WHEREFORE, premises considered, private respondents' motion for reconsideration is hereby DENIED for lack of merit.18

Exhausting all available legal remedies, petitioners filed the present Petition for Review on Certiorari based on the following assignment of errors: I. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE AWARD IN FAVOR OF THE HEIRS OF THE LATE RAYMOND TRIVIERE IS ALREADY A DISTRIBUTION OF THE RESIDUE OF THE ESTATE. II. THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE AWARD OF ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS I The Court of Appeals modified the 12 June 2003 Order of the RTC by deleting the awards of P450,000.00 and P150,000.00 in favor of the children and widow of the late Raymond Triviere, respectively. The appellate court adopted the position of LCN that the claim of LCN was an obligation of the estate which was yet unpaid and, under Section 1, Rule 90 of the Revised Rules of Court, barred the distribution of the residue of the estate. Petitioners, though, insist that the awards in favor of the petitioner children and widow of the late Raymond Triviere is not a distribution of the residue of the estate, thus, rendering Section 1, Rule 90 of the Revised Rules of Court inapplicable. Section 1, Rule 90 of the Revised Rules of Court provides: Section 1. When order for distribution of residue made. - When the debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law, have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such persons may demand and recover their respective shares from the executor or administrator, or any other person having the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases. No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs. According to petitioners, the 12 June 2003 Order of the RTC should not be construed as a final order of distribution. The 12 June 2003 RTC Order granting the second Motion for Payment is a mere interlocutory order that does not end the estate proceedings. Only an order of distribution directing the delivery of the residue of the estate to the proper distributees brings the intestate proceedings to a close and, consequently, puts an end to the administration and relieves the administrator of his duties. A perusal of the 12 June 2003 RTC Order would immediately reveal that it was not yet distributing the residue of the estate. The said Order grants the payment of certain amounts from the funds of the estate to the petitioner children and widow of the late Raymond Triviere considering that they have not received their respective shares therefrom for more than a decade. Out of the reported P4,738,558.63 value of the estate, the petitioner children and widow were being awarded by the RTC, in its 12 June 2003 Order, their shares in the collective amount of P600,000.00. Evidently, the remaining portion of the estate still needs to be settled. The intestate proceedings were not yet concluded, and the RTC still had to hear and rule on the pending claim of LCN against the estate of the late Raymond Triviere and only thereafter can it distribute the residue of the estate, if any, to his heirs.

While the awards in favor of petitioner children and widow made in the RTC Order dated 12 June 2003 was not yet a distribution of the residue of the estate, given that there was still a pending claim against the estate, still, they did constitute a partial and advance distribution of the estate. Virtually, the petitioner children and widow were already being awarded shares in the estate, although not all of its obligations had been paid or provided for. Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance distribution of the estate, thus: Section 2. Advance distribution in special proceedings. - Notwithstanding a pending controversy or appeal in proceedings to settle the estate of a decedent, the court may, in its discretion and upon such terms as it may deem proper and just, permit that such part of the estate as may not be affected by the controversy or appeal be distributed among the heirs or legatees, upon compliance with the conditions set forth in Rule 90 of these rules. (Emphases supplied.) The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows the distribution of the estate prior to the payment of the obligations mentioned therein, provided that "the distributees, or any of them, gives a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs." In sum, although it is within the discretion of the RTC whether or not to permit the advance distribution of the estate, its exercise of such discretion should be qualified by the following: [1] only part of the estate that is not affected by any pending controversy or appeal may be the subject of advance distribution (Section 2, Rule 109); and [2] the distributees must post a bond, fixed by the court, conditioned for the payment of outstanding obligations of the estate (second paragraph of Section 1, Rule 90). There is no showing that the RTC, in awarding to the petitioner children and widow their shares in the estate prior to the settlement of all its obligations, complied with these two requirements or, at the very least, took the same into consideration. Its Order of 12 June 2003 is completely silent on these matters. It justified its grant of the award in a single sentence which stated that petitioner children and widow had not yet received their respective shares from the estate after all these years. Taking into account that the claim of LCN against the estate of the late Raymond Triviere allegedly amounted toP6,016,570.65, already in excess of the P4,738,558.63 reported total value of the estate, the RTC should have been more prudent in approving the advance distribution of the same. Petitioners earlier invoked Dael v. Intermediate Appellate Court,,19 where the Court sustained an Order granting partial distribution of an estate. However, Dael is not even on all fours with the case at bar, given that the Court therein found that: Where, however, the estate has sufficient assets to ensure equitable distribution of the inheritance in accordance with law and the final judgment in the proceedings and it does not appear there are unpaid obligations, as contemplated in Rule 90, for which provisions should have been made or a bond required, such partial distribution may be allowed. (Emphasis supplied.) No similar determination on sufficiency of assets or absence of any outstanding obligations of the estate of the late Raymond Triviere was made by the RTC in this case. In fact, there is a pending claim by LCN against the estate, and the amount thereof exceeds the value of the entire estate. Furthermore, in Dael, the Court actually cautioned that partial distribution of the decedent's estate pending final termination of the testate or intestate proceeding should as much as possible be discouraged by the courts, and, except in extreme cases, such form of advances of inheritance should not be countenanced. The reason for this rule is that courts should guard with utmost zeal and jealousy the estate of the decedent to the end that the creditors thereof be adequately protected and all the rightful heirs be assured of their shares in the inheritance. Hence, the Court does not find that the Court of Appeals erred in disallowing the advance award of shares by the RTC to petitioner children and the widow of the late Raymond Triviere.

II On the second assignment of error, petitioner Quasha Law Office contends that it is entitled to the award of attorney's fees and that the third paragraph of Section 7, Rule 85 of the Revised Rules of Court, which reads: Section 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. x x x. xxx When the executor or administrator is an attorney, he shall not chargeagainst the estate any professional fees for legal services rendered by him. (Emphasis supplied.) is inapplicable to it. The afore-quoted provision is clear and unequivocal and needs no statutory construction. Here, in attempting to exempt itself from the coverage of said rule, the Quasha Law Office presents conflicting arguments to justify its claim for attorney's fees against the estate. At one point, it alleges that the award of attorney's fees was payment for its administration of the estate of the late Raymond Triviere; yet, it would later renounce that it was an administrator. In the pleadings filed by the Quasha Law Office before the Court of Appeals, it referred to itself as coadministrator of the estate. In the Comment submitted to the appellate court by Atty. Doronila, the member-lawyer then assigned by the Quasha Law Office to the case, it stated that: The 12 June 2003 Order granted the Motion for Payment filed by Co-Administrator and counsel Atty. Enrique P. Syquia and the counsel Atty. Cirilo E. Doronila and Co-Administrator for the children of the late Raymond Triviere. x x x.20 (Emphasis supplied.) It would again in the same pleading claim to be the "co-administrator and counsel for the heirs of the late Raymond Triviere."21 Finally, the Memorandum it submitted to the Court of Appeals on behalf of its clients, the petitionerchildren of the late Raymond Triviere, the Quasha Law Office alleged that: 2. The petition assails the Order of the Honorable Regional Trial Court of Makati, Branch 63 granting the Motion for Payment filed by Co-Administrators Atty. Enrique P. Syquia and the undersigned counsel together with the children of the deceased Raymond Triviere, and the Order dated 29 October 2003 denying Petitioner's Motion for Reconsideration of the First Order. xxx I. Statement of Antecedent Facts xxx 4. On 13 May 2004, Atty. Enrique Syquia, co-administrator and counsel for respondent Amy Consuelo Triviere and the undersigned counsel, co-administrator and counsel for the children of the late Raymond Trivierefiled their Comment.22 Petitioner Quasha Law Office asserts that it is not within the purview of Section 7, Rule 85 of the Revised Rules of Court since it is not an appointed administrator of the estate. 23 When Atty. Quasha passed away in 1996, Atty. Syquia was left as the sole administrator of the estate of the late Raymond Triviere. The person of Atty. Quasha was distinct from that of petitioner Quasha Law Office; and the appointment of Atty. Quasha as administrator of the estate did not extend to his law office. Neither could petitioner

Quasha Law Office be deemed to have substituted Atty. Quasha as administrator upon the latter's death for the same would be in violation of the rules on the appointment and substitution of estate administrators, particularly, Section 2, Rule 82 of the Revised Rules of Court.24 Hence, when Atty. Quasha died, petitioner Quasha Law Office merely helped in the settlement of the estate as counsel for the petitioner children of the late Raymond Triviere. In its Memorandum before this Court, however, petitioner Quasha Law Office argues that "what is being charged are not professional fees for legal services rendered but payment for administration of the Estate which has been under the care and management of the co-administrators for the past fourteen (14) years."25 On the other hand, in the Motion for Payment filed with the RTC on 3 September 2002, petitioner Quasha Law Office prayed for P200,000.00 as "attorney's fees and litigation expenses." Being lumped together, and absent evidence to the contrary, theP200,000.00 for attorney's fees and litigation expenses prayed for by the petitioner Quasha Law Office can be logically and reasonably presumed to be in connection with cases handled by said law office on behalf of the estate. Simply, petitioner Quasha Law Office is seeking attorney's fees as compensation for the legal services it rendered in these cases, as well as reimbursement of the litigation expenses it incurred therein. The Court notes with disfavor the sudden change in the theory by petitioner Quasha Law Office. Consistent with discussions in the preceding paragraphs, Quasha Law Office initially asserted itself as coadministrator of the estate before the courts. The records do not belie this fact. Petitioner Quasha Law Office later on denied it was substituted in the place of Atty. Quasha as administrator of the estate only upon filing a Motion for Reconsideration with the Court of Appeals, and then again before this Court. As a general rule, a party cannot change his theory of the case or his cause of action on appeal. 26 When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process.27 Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage.28 This rule, however, admits of certain exceptions.29 In the interest of justice and within the sound discretion of the appellate court, a party may change his legal theory on appeal, only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory.30 On the foregoing considerations, this Court finds it necessary to exercise leniency on the rule against changing of theory on appeal, consistent with the rules of fair play and in the interest of justice. Petitioner Quasha Law Office presented conflicting arguments with respect to whether or not it was co-administrator of the estate. Nothing in the records, however, reveals that any one of the lawyers of Quasha Law Office was indeed a substitute administrator for Atty. Quasha upon his death. The court has jurisdiction to appoint an administrator of an estate by granting letters of administration to a person not otherwise disqualified or incompetent to serve as such, following the procedure laid down in Section 6, Rule 78 of the Rules of Court. Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and unequivocal terms the modes for replacing an administrator of an estate upon the death of an administrator, to wit: Section 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death, resignation, or removal. x x x. When an executor or administrator dies, resigns, or is removed the remaining executor or administrator may administer the trust alone, unless the court grants letters to someone to act with him. If there is no remaining executor or administrator, administration may be granted to any suitable person.

The records of the case are wanting in evidence that Quasha Law Office or any of its lawyers substituted Atty. Quasha as co-administrator of the estate. None of the documents attached pertain to the issuance of letters of administration to petitioner Quasha Law Office or any of its lawyers at any time after the demise of Atty. Quasha in 1996. This Court is thus inclined to give credence to petitioner's contention that while it rendered legal services for the settlement of the estate of Raymond Triviere since the time of Atty. Quasha's death in 1996, it did not serve as co-administrator thereof, granting that it was never even issued letters of administration. The attorney's fees, therefore, cannot be covered by the prohibition in the third paragraph of Section 7, Rule 85 of the Revised Rules of Court against an attorney, to charge against the estate professional fees for legal services rendered by them. However, while petitioner Quasha Law Office, serving as counsel of the Triviere children from the time of death of Atty. Quasha in 1996, is entitled to attorney's fees and litigation expenses of P100,000.00 as prayed for in the Motion for Payment dated 3 September 2002, and as awarded by the RTC in its 12 June 2003 Order, the same may be collected from the shares of the Triviere children, upon final distribution of the estate, in consideration of the fact that the Quasha Law Office, indeed, served as counsel (not anymore as co-administrator), representing and performing legal servicesfor the Triviere children in the settlement of the estate of their deceased father. Finally, LCN prays that as the contractor of the house (which the decedent caused to be built and is now part of the estate) with a preferred claim thereon, it should already be awarded P2,500,000.00, representing one half (1/2) of the proceeds from the sale of said house. The Court shall not take cognizance of and rule on the matter considering that, precisely, the merits of the claim of LCN against the estate are still pending the proper determination by the RTC in the intestate proceedings below. WHEREFORE, premises considered, the Petition for Review on Certiorari is herebyPARTLY GRANTED. The Decision dated 11 May 2006 and Resolution dated 22 September 2006 of the Court of Appeals in CA-G.R. SP No. 81296 are AFFIRMED, with thefollowing MODIFICATIONS: 1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED THOUSAND PESOS (P100,000.00), for legal services rendered for the Triviere children in the settlement of the estate of their deceased father, the same to be paid by the Triviere children in the manner herein discussed; andcralawlibrary 2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of their corresponding administrators' fees, to be determined by the RTC handling Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to be chargeable to the estate of Raymond Trieviere. SO ORDERED.

G.R. No. L-14713 April 28, 1960 Intestate Estate of ARSENIO R. AFAN, deceased. MARIAN AFAN, petitioner-appellee, vs. APOLINARIO S. DE GUZMAN, creditor-appellant. Vicente L. Santiago for appellee. Bausa Ampil & Suarez for appellant. CONCEPCION, J.: chanrobles virtual law library This is an appeal, taken by Apolinario S. de Guzman, from an order of the Court of First Instance of Manila, dated July 27, 1957.chanroblesvirtualawlibrary chanrobles virtual law library It appears that, on July 12, 1957, De Guzman filed, in this special proceeding for the settlement of intestate estate of Arsenio R. Afan, a claim for P1,000, allegedly due from the latter, with interest thereon, within 30 days from August 16, 1949, as set forth in a promissory note then issued by Afan. On July 22, 1957, the administratrix of his estate objected to the consideration of the claim upon the ground, among others, that it had been filed long after the expiration of the period for the presentation of claims against said estate. For this reason, the lower court issued the order appealed from, refusing to entertain the aforementioned claim. De Guzman invokes, in support of his appeal, section 2, Rule 87 of the Rules of Court, reading: Time within which claims shall be filed.-In the notice provided in the preceding section, the court shall state the time for the filing of claims against the estate, which shall not be more than twelve nor less than six months after the date of the first publication of the notice. However, at any time before an order of distribution is entered, on application of a creditor who has failed to file his claim within the time previously limited, the court may, for cause shown and on such terms as are equitable, allow such claims to be filed within a time not exceeding one month. Relying upon this provision, De Guzman maintains that the lower court should have entertained his claim, the same having been filed prior to the distribution of the estate of the deceased. This pretense is not borne out, however, by the rule above quoted.chanroblesvirtualawlibrarychanrobles virtual law library The second sentence thereof clothes the court with authority to permit the filing of a claim after the lapse of the period stated in the first sentence, but prior to and distribution, subject to the following conditions, namely(1) there must be tin application therefor; (2) a cause must be shown why the permission should be granted; and (3) the extension of time granted for the filing of the claim shall not exceed one (1) month.chanroblesvirtualawlibrarychanrobles virtual law library De Guzman has not sought permission to file the claim. Moreover, the same does not allege any reason why he should be excused for his failure to file the claim in this proceeding within the period stated in the Rules of Court. Again, whether or not the reasons given - and none were set forth in De Guzman's claim are sufficient, rests upon the discretion of the court (Roguera vs. Tanodra, 81 Phil., 404; Umpig, et al. vs. De Gala, et al., 96 Phil., 77; 50 Off. Gaz., 5305), and the record before us does not show that the lower court has abused its discretion in acting as it did in the present case. De Guzman now alleges, for the first time, a "cause" why the lower court should allegedly have considered his claim. He says, in his brief (p. 6, thereof) that "he had no actual knowledge of the fact that the estate of the deceased . . . was then already in the process of settlement . . . . " He did not explain why he refrained from making such averment either in his claim or in the motion, filed by him in the lower court, for a reconsideration of the order appealed from. The reason is, however, not difficult to surmise - he had actual knowledge of the present proceeding long before the filing of his claim therein on July 27, 1957. To be precise, he was aware of its existence as early as August, 1955.chanroblesvirtualawlibrary chanrobles virtual law library In this connection, it appears that, during the lifetime of Afan, or on May 24, 1950, De Guzman instituted, against him, Civil Case No. 1148 of the Court of First Instance of Rizal, to recover the amount of the promissory note above referred to. On appeal, the decision of said court in favor of De Guzman was set aside, and a trial de novo ordered, by the Court of Appeals, in case CA-G.R. No. 7340-R. Sometime after

the records had been remanded to the lower court, Afan died. On August 15, 1955, that court issued an order requiring counsel for his heirs "to submit to the court the number of the intestate estate proceedings of the deceased Arsenio R. Afan now pending in the Court of First Instance of Manila." This order was complied with on August 30, 1955, by the filing with the Court of First Instance of Rizal, in said Case No. 1148, of a "notification" containing the required information, copy of which "notification" was served upon counsel for De Guzman, as plaintiff therein. On January 18, 1956, his counsel filed in said case a motion for the appointment of a legal representative of the deceased Afan, to substitute him as defendant therein. Accordingly, on January 21, 1956, said court gave De Guzman five (5) days within which to submit the names of the legal heirs of Afan who may be appointed as his legal representative. On January 24, 1956 De Guzman filed, therefore, with the aforementioned court, a statement, entitled "compliance", setting forth the names, ages and addresses of the heirs of the deceased, "as shown by the records in Special Proceedings No. 26858, entitled 'Instance estate of Arsenio R. Afan' before the Court of First Instance of Manila," with the prayer that said "heirs be substituted as party defendants" in Case No. 1148, "in place of the deceased Arsenio R. Afan." Yet, De Guzman choose not to file his claim in such proceeding until July 27, 1957, one year and a half after the filing of his aforementioned "compliance."chanrobles virtual law library Instead of furnishing a "cause" for the extension of the reglementary period for the filing of his claim, this omission on the part of De Guzman fully justifies the denial of such extension and the order appealed from. We have already held that failure to file a claim within the time provided therefor upon the sole ground that the claimant was negotiating with one of the heirs for payment, is not sufficient to justify extension (In Re: Estate of De Dios, 24 Phil., 573, 576; see also Santos vs. Manarang, 27 Phil., 209), and that, where a claimant knew of the death of the decedent and for four (4) or five (5) months thereafter he did nothing to present his claim, this can hardly be considered as a good excuse for such neglect (In Re: Estate of Tiangco, 39 Phil., 967).chanroblesvirtualawlibrary chanrobles virtual law library Wherefore, the order appealed from is hereby affirmed with costs against appellant Apolinario S. de Guzman. It is so ordered.chanroblesvirtualawlibrary chanrobles virtual law library Paras C. J. Bengzon, Montemayor, Bautista, Angelo, Labrador, Barrera, and Gutierrez David, JJ., concur.

G.R. No. L-51278 May 9, 1988 HEIRS OF RAMON PIZARRO, SR., Petitioners, vs. HON. FRANCISCO Z. CONSOLACION, CFI of Davao and LUIS TAN alias CHEN YEH-AN, Respondents. Rogelio A. Barba for petitioners.chanrobles virtual law library Oscar Breva for private respondent. GANCAYCO, J.: This is a petition for review on certiorari seeking the reversal of the Order of June 1, 1979, of the then Court of First Instance of Davao * dismissing petitioners' claim against the estate of the late Dominga Garcia, and questioning the legality of the Order of the same court dated July 17, 1979 which denied due course to the petitioners' notice of appeal to the Court of Appeals and directed them to file instead a petition for review before this Tribunal.chanroblesvirtualawlibrary chanrobles virtual law library Petitioners are the oppositors in Special Proceeding No. 2116 in the then Court of First Instance (CFI) of Davao City Branch II, for settlement of the estate of the deceased Dominga Garcia, filed by private respondent herein, Luis Tan alias Chen Yeh-An.chanroblesvirtualawlibrary chanrobles virtual law library The records disclose that on August 12,1977, Luis Tan filed a verified petition with the CFI of Davao for the issuance of letters of administration in favor of a certain Alfonso Atilano. The petition alleged, among others that private respondent is the only surviving son of the deceased Dominga Garcia who died intestate sometime in 1930 in Canton, China; that the deceased left a parcel of land 1 located at C.M. Recto Avenue, Davao City; and that the said lot is in the possession of the heirs of Ramon Pizarro, 2petitioners herein.chanroblesvirtualawlibrary chanrobles virtual law library On October 4, 1977, petitioners filed an opposition to the said petition claiming that they are the heirs of Ramon Pizarro who died intestate on June 16, 1974; and that the deceased was the vendee of one-half (1/2) of the aforementioned lot by virtue of an extrajudicial settlement of estate and deed of absolute sale executed by Vicente Tan in Hongkong on May 27, 1966. Petitioners prayed that letters of administration of Dominga Garcia's estate be issued in favor of anyone of them.chanroblesvirtualawlibrary chanrobles virtual law library The respondent court set the petition for hearing. Said order and the petition were duly published in the Mindanao Times. ** The City of Davao 3 was likewise served with a copy of said petition. On December 6, 1977, after private respondent had begun presentation of evidence in support of his petition, the parties herein entered into a compromise whereby petitioners agreed, among others, to withdraw their opposition to the appointment of private respondent's recommendee and for the intestate proceedings to proceed in due course. Said agreement was approved in the order of respondent court dated December 6,1977. 4 chanrobles virtual law library Accordingly, on March 27, 1978, after the judicial administrator had qualified and his inventory of the assets of the late Dominga Garcia was approved, respondent court issued an order requiring the filing of creditors' claim against the said estate within the period of six (6) months from the date of the first publication. 5 Copy of said order was received by petitioners through counsel on March 28, 1979. 6 chanrobles virtual law library Meanwhile, on January 23,1979, private respondent and the City of Davao filed a joint motion asking respondent court to take notice of their agreement which in substance provides for an agreement to file a joint motion in the CFI of Davao to proceed with the determination of the heirs of the deceased Domingao Garcia which shall be determinative of their respective claims against the estate. On February 19, 1979, petitioners filed their opposition to the said joint motion on the sole ground that it is without procedural basis. Private respondent filed his reply thereto on February 21, 1979. On February 22, 1979, respondent court issued an order taking note of the agreement between private respondent and the City of Davao.chanroblesvirtualawlibrary chanrobles virtual law library

On February 28, 1979, private respondent filed a motion to drop and exclude the petitioners on the ground that they do not even claim to be the heirs of the deceased Dominga Garcia and that the extrajudicial deed of partition and deed of absolute sale allegedly executed in Hongkong in favor of the petitioners' deceased father is spurious and simulated. On March 5, 1979, petitioners filed their opposition to said motion. They likewise filed a claim against the estate of the deceased Garcia in the amount of P350,000.00 representing services allegedly rendered by their deceased father in favor of Vicente Tan. On March 8, 1979, private respondent filed a reply to petitioners' opposition and a motion to strike out or dismiss the claim on the ground that it is spurious and barred for having been filed beyond the six (6) month period set in the notice for the filing of creditors' claim. On March 29, 1979, petitioners filed another claim against the estate for P200,000.00 allegedly advanced by their deceased father for the payment of realty and income taxes of the said lot sometime in 1936, to which claim private respondent filed an opposition on the ground that it is barred for having been filed beyond the six (6) month period and that it was merely intended to delay the proceedings.chanroblesvirtualawlibrary chanrobles virtual law library In the Order of June 1, 1979, respondent court dismissed both claims of the petitioners on the ground that they are barred for having been filed out of time. 7 On June 26, 1979, petitioners filed a notice of appeal stating that they are appealing the order of June 1, 1979 to the Court of Appeals in so far as it declared their claims barred. 8 On July 5, 1979, private respondent filed an opposition to the projected appeal on the ground that the appeal involves a pure question of law and thus, the same should be directed to the Supreme Court. 9 On July 17, 1979, respondent court issued an order dismissing petitioners' appeal and directed petitioners to file instead a petition for review on certiorari before this Court. 10 chanrobles virtual law library Hence, the present petition. *** chanrobles virtual law library It is the position of the petitioners that the order of June 1, 1979 of the respondent court, which directed that the filing of claims against the estate of the late Dominga Garcia be filed within six (6) months after the first publication of the notice thereof, is null and void in that it is violative of Section 2, Rule 86 of the Revised Rules of Court. They contend that said provision mandates that the filing of such claims should be for a period of six (6) months starting from the sixth month after the date of the first publication of the notice down to the twelfth month. 11 They argue that to require filing of claims within the sixth month from publication of notice will shorten the period in violation of the mandatory provisions of Section 2, Rule 86, which provides: Sec. 2. Time within which claims shall be filed . - In the notice provided in the preceding section, the court shall state the time for the filing of claims against the estate, which shall not be more than twelve (12) nor less than six (6) months after the date of the first publication of the notice. However, at anytime before an order of distribution is entered, on application of a creditor who has failed to file his claim within the time previously limited, the court may, for cause shown and on such terms as are equitable, allow such claim to be filed within a time not exceeding one (1) months. We agree. The range of the period specified in the rule is intended to give the probate court the discretion to fix the period for the filing of claims. The probate court is permitted by the rule to set the period provided it is not less than six (6) months nor more than twelve (12) months from the date of the first publication of the notice thereof. Such period once fixed by the court is mandatory.chanroblesvirtualawlibrary chanrobles virtual law library The purpose of the law, in fixing a period within which claims against an estate must be presented, is to insure a speedy settlement of the affairs of the deceased person and the early delivery of the property to the person entitled to the same. 12chanrobles virtual law library In Sikat vs. Vda. Mafincode Villanueva , 13 this Court ruled that the speedy settlement of the estate of deceased persons for the benefit of creditors and those entitled to the residue by way of inheritance or legacy after the debts and expenses of administration have been paid is the ruling spirit of our probate law.chanroblesvirtualawlibrary chanrobles virtual law library

However, in this case the trial court set the period for the filing of the claims within six (6) months from the date of the first publication of the notice. It was obviously short of the minimum limit of six (6) months provided for by the law. Petitioner correctly observed that the trial court thereby shortened the period set by the law.chanroblesvirtualawlibrary chanrobles virtual law library Since the notice issued and the period set by the trial court was not in accordance with the requirements of Section 2, Rule 86 of the Rules of Court, what should then apply is the period as provided for by the rules which is not less than six months nor more than twelve (12) months from the date of first publication of notice. The first publication of the notice in the Mindanao Times was on March 30, 1978. Thus the two claims of petitioners against the estate which were filed on March 5, 1979 and March 29, 1979 respectively were filed on time.chanroblesvirtualawlibrary chanrobles virtual law library The other issue raised in the petition is the authority of the trial court to determine whether the appeal involves a question of law or both questions of law and facts. The petitioners cite Section 3, Rule 50 of the Rules of Court, which provides as follows: Sec. 3. Where appealed case erroneously brought. - Where the appealed case has been erroneously brought to the Court of Appeals, it shall not dismiss the appeal, but shall certify the case to the proper court, with a specific and clear statement of the grounds therefor. Petitioners contend that it is the Court of Appeals which has the authority to determine whether the issue in the appeal is purely a question of law in which case it shall certify the same to the proper court, which in this case is this Tribunal.chanroblesvirtualawlibrary chanrobles virtual law library In the present case, when the lower court found that the order sought to be appealed was its order of June 1, 1979, wherein it held that the claims filed by petitioners against the estates were barred having been filed beyond the period fixed by the trial court in the notice, which appeal involves an interpretation of Section 2, Rule 86 of the Rules of Court, instead of giving due course to the notice of appeal to the Court of Appeals filed by petitioners, the petitioners were instructed to file a petition for review with this Court as the issue is a pure question of law.chanroblesvirtualawlibrary chanrobles virtual law library We find the action taken by the trial court to be well-taken. Certainly, it is within the competence and jurisdiction of the trial court to determine whether the appeal interposed was based on pure questions of law or involves both questions of law and facts in considering the appeal. 14 The provision of Section 3, Rule 50 of the Rules of Court applies only when the appeal is already brought to the Court of Appeals at which time it may, instead of dismissing the appeal, upon determination that it involves a pure question of law, order that the case be certified to this Court.chanroblesvirtualawlibrary chanrobles virtual law library It must be noted that in the notice of appeal it is not even required that the appellant indicate the court to which its appeal is being interposed. The requirement is merely directory and failure to comply with it or error in the court indicated is not fatal to the appeal. 15 chanrobles virtual law library WHEREFORE, the petition is GRANTED and the orders of the respondent court of June 1, 1979 and July 17, 1979 are reversed and set aside in so far as the claims filed by petitioners were found to be barred, the same having been timely filed, without pronouncement as to costs.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. Narvasa, Cruz, and Grio-Aquino, JJ., concur.

G.R. No. L-17175 July 31, 1962 RICARDO M. GUTIERREZ, Plaintiff-Appellant, vs. LUCIA MILAGROS BARRETTO-DATU, Executrix of the Testate Estate of the deceased MARIA GERARDO VDA. DE BARRETTO, Defendant-Appellee. Teofilo Sison and Mariano G. Bustos and Associates for plaintiff-appellant. Deogracias T. Reyes and Luison and Associates for defendant-appellee. MAKALINTAL, J.:chanrobles virtual law library Ricardo M. Gutierrez appeals from the orders of Court of First Instance of Rizal (1) dismissing his complaint against Lucia Milagros Barretto-Datu, as executive of the estate of the deceased Maria Gerardo Vda. de Barreto, and (2) denying his motion for reconsideration the dismissal.chanroblesvirtualawlibrarychanrobles virtual law library The relevant facts alleged by appellant are as follows; In 1940, Maria Gerardo Vda. de Barretto, owner of hectares of fishpond lands in Pampanga, leased the same to appellant Gutierrez for a term to expire on May 1, 1947. On November 1, 1941, pursuant to a decision of Department of Public Works rendered after due investigation the dikes of the fishponds were opened at several points, resulting in their destruction and in the loss great quantities of fish inside, to the damage and prejudice of the lessee.chanroblesvirtualawlibrarychanrobles virtual law library In 1956, the lessor having died in 1948 and the corresponding testate proceeding to settle her estate having been opened (Sp. Proc. No. 5002, C.F.I., Manila), Gutierrez filed a claim therein for two items: first, for the sum of P32,000.00 representing advance rentals he had to the decedent (the possession of the leased property is alleged, having been returned to her after the open of the dikes ordered by the government); and second, the sum of P60,000.00 as damages in the concept of earned profits, that is, profits which the claimant failed to realize because of the breach of the lease contract allegedly committed by the lessor.chanroblesvirtualawlibrarychanrobles virtual law library On June 7, 1957 appellant commenced the instant ordinary civil action in the Court of First Instance of Rizal (Quezon City branch) against the executrix of the testate for the recovery of the same amount of P60,000 referred to as the second item claimed in the administration proceeding. The complaint specifically charges decedent Manila Gerardo Vda. de Barretto, is lessor, was having violated a warranty in the lease contract again any damages the lessee might suffer by reason of the claim of the government that several rivers and creeks of the public domain were included in the fishponds.chanroblesvirtualawlibrarychanrobles virtual law library In July 1957 appellant amended his claim in the testate proceeding by withdrawing therefrom the item of P60,000.00, leaving only the one for refund of advance rentals in the sum of P32,000.00.chanroblesvirtualawlibrarychanrobles virtual law library After the issues were joined in the present case with the filing of the defendant's answer, together with a counterclaim, and after two postponements of the trial were granted, the second of which was in January 1958, the court dismissed the action for abandonment by both parties in an order dated July 31, 1959. Appellant moved to reconsider; appellee opposed the motion; and after considerable written argument the court, on March 7, 1960, denied the motion for reconsideration on the ground that the claim should have been prosecuted in the testate proceeding and not by ordinary civil action.chanroblesvirtualawlibrarychanrobles virtual law library Appellant submits his case on this lone legal question: whether or not his claim for damages based on unrealized profits is a money claim against the estate of the deceased Maria Gerardo Vda. de Barretto within the purview of Rule 87, Section 5. This section states: SEC. 5. Claims which must be filed under the notice. If not filed, barred; exception . - All claims for money against the decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral expenses and expenses of the last sickness of the decedent, and

judgment for money against the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants. Where an executor or administrator commences an action, or prosecutes an action already commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has against the decedent, instead of presenting them independently to the court as herein provided, and mutual claims may be set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount so determined shall be considered the true balance against the estate, as though the claim had been presented directly before the court in the administration proceedings. Claims not yet due, or contingent, may be approved at their present value. The word "claims" as used in statutes requiring the presentation of claims against a decedent's estate is generally construed to mean debts or demands of a pecuniary nature which could have been enforced against the deceased in his lifetime and could have been reduced to simple money judgments; and among these are those founded upon contract. 21 Am. Jur. 579. The claim in this case is based on contract specifically, on a breach thereof. It falls squarely under section 5 of Rule 87 "Upon all contracts by the decedent broken during his lifetime, even though they were personal to the decedent in liability, the personal representative is answerable for the breach out of the assets." 3 Schouler on Wills, Executors and Administrators, 6th Ed., 2395. A claim for breach of a covenant in a deed of the decedent must be presented under a statute requiring such presentment of all claims grounded on contract. Id. 2461; Clayton v. Dinwoody, 93 P. 723; James v. Corvin, 51 P. 2nd 689.1chanrobles virtual law library The only actions that may be instituted against the executor or administrator are those to recover real or personal property from the estate, or to enforce a lien thereon, and actions to recover damages for an injury to person or property, real or personal. Rule 88, section 1. The instant suit is not one of them.chanroblesvirtualawlibrarychanrobles virtual law library Appellant invokes Gavin v. Melliza, 84 Phil. 794, in support of his contention that this action is proper against the executrix. The citation is not in point. The claim therein, which was filed in the testate proceeding, was based upon a breach of contract committed by the executrix herself, in dismissing the claimant as administrator of thehacienda of the deceased. While the contract was with the decedent, its violation was by the executrix and hence personal to her. Besides, the claim was for indemnity in the form of a certain quantity of palay every year for the unexpired portion of the term of the contract. The denial of the claim was affirmed by this Court on the grounds that it was not a money claim and that it arose after the decedent's demise, placing it outside the scope of Rule 87, Section 5.chanroblesvirtualawlibrarychanrobles virtual law library The orders appealed from are affirmed, with costs against appellant. Bengzon, C.J., Labrador, Concepcion, Barrera, Paredes, Dizon and Regala, JJ., concur. Padilla, J., took no part. Endnotes:
1

Plaintiff's claim arose from a breach of a covenant in the deed. It is very clearly expressed by the statute that all claims arising on contracts whether due, not due, or contingent, must be presented. The only exception made by the statute is that a mortgage or lien "against the property of the estate subject thereto" may be enforced without first presenting a claim to the executor or administrator "where all recourse against any other property of the estate is expressly waived in the complaint." But this was not an action to enforce a lien. It was not one seeking to have the claim satisfied out of specific property of the estate, or to subject any particular property of the estate to the satisfaction thereof. Clayton v. Dinwoody, 93 P. 723. The claim for damages for the unexpired portion of the lease is not an obligation incurred by the administratrix in the course of her administration of the estate. It arises out of a contractual obligation incurred by Louis Johnson and is governed by the statute of nonclaim. By the terms of the lease, he obligated himself, his heirs, executors, administrators and assigns to pay $4,860 for the premises for a term of five years, covering the time involved in this action. A claim for damages for a breach of that

contract arises out of that obligation requiring as prerequisite to a suit thereon, that the claim be served on the administratrix and filed with the clerk of court. James v. Corvin, 51 P (2d) 689.

G.R. No. L-18107 August 30, 1962 MARIA G. AGUAS, FELIX GUARDINO and FRANCISCO SALINAS, Plaintiffs-Appellants, vs. HERMOGENES LLEMOS, deceased defendant substituted by his representatives, PERPETUA YERRO-LLEMOS, HERMENEGILDO LLEMOS, FELINO LLEMOS and AMADO LLEMOS, Defendants-Appellees. Jesus M. Aguas for plaintiffs-appellants. Serafin P. Ramento for defendants-appellees. REYES, J.B.L., J.: On 14 March 1960, Francisco Salinas and the spouses Felix Guardino and Maria Aguas jointly filed an action in the Court of First Instance of Catbalogan, Samar (Civil Case No. 4824), to recover damages from Hermogenes Llemos, averring that the latter had served them by registered mail with a copy of a petition for a writ of possession, with notice that the same would be submitted to the said court of Samar on February 23, 1960 at 8: 00 a.m.; that in view of the copy and notice served, plaintiffs proceeded to the court from their residence in Manila accompanied by their lawyers, only to discover that no such petition had been filed; and that defendant Llemos maliciously failed to appear in court, so that plaintiffs' expenditure and trouble turned out to be in vain, causing them mental anguish and undue embarrassment.chanroblesvirtualawlibrarychanrobles virtual law library On 1 April 1960, before he could answer the complaint, the defendant died. Upon leave of court, plaintiffs amended their complaint to include the heirs of the deceased. On 21 July 1960, the heirs filed a motion to dismiss, and by order of 12 August 1960, the court below dismissed it, on the ground that the legal representative, and not the heirs, should have been made the party defendant; and that anyway the action being for recovery of money, testate or intestate proceedings should be initiated and the claim filed therein (Rec. on Appeal, pp. 26-27).chanroblesvirtualawlibrarychanrobles virtual law library Motion for reconsideration having been denied, the case was appealed to us on points of law.chanroblesvirtualawlibrarychanrobles virtual law library Plaintiffs argue with considerable cogency that contrasting the correlated provisions of the Rules of Court, those concerning claims that are barred if not filed in the estate settlement proceedings (Rule 87, sec. 5) and those defining actions that survive and may be prosecuted against the executor or administrator (Rule 88, sec. 1), it is apparent that actions for damages caused by tortious conduct of a defendant (as in the case at bar) survive the death of the latter. Under Rule 87, section 5, the actions that are abated by death are: (1) claims for funeral expenses and those for the last sickness of the decedent; (2) judgments for money; and (3) "all claims for money against the decedent, arising from contract express or implied". None of these includes that of the plaintiffs-appellants; for it is not enough that the claim against the deceased party be for money, but it must arise from "contract express or implied", and these words (also used by the Rules in connection with attachments and derived from the common law) were construed in Leung Ben vs. O'Brien, 38 Phil., 182, 189-194. to include all purely personal obligations other than those which have their source in delict or tort. Upon the other hand, Rule 88, section 1, enumerates actions that survive against a decedent's executors or administrators, and they are: (1) actions to recover real and personal property from the estate; (2) actions to enforce a lien thereon; and (3) actions to recover damages for an injury to person or property. The present suit is one for damages under the last class, it having been held that "injury to property" is not limited to injuries to specific property, but extends to other wrongs by which personal estate is injured or diminished (Baker vs. Crandall, 47 Am. Rep. 126; also 171 A.L.R., 1395). To maliciously cause a party to incur unnecessary expenses, as charged in this case, is certainly injurious to that party's property (Javier vs. Araneta, L-4369, Aug. 31, 1953).chanroblesvirtualawlibrarychanrobles virtual law library Be that as it may, it now appears from a communication from the Court of First Instance of Samar that the parties have arrived at an amicable settlement of their differences, and that they have agreed to

dismiss this appeal. The settlement has been approved and embodied in an order of the Court of First Instance.chanroblesvirtualawlibrarychanrobles virtual law library The case having thus become moot, it becomes unnecessary to resolve the questions raised therein. This appeal is, therefore, ordered dismissed, without special pronouncement as to costs. Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.

G.R. No. L-27701 July 21, 1928 THE BANK OF THE PHILIPPINE ISLANDS, Plaintiff-Appellant, vs. V. CONCEPCION E HIJOS, INC., and VENANCIO CONCEPCION, defendants-appellants. HENRY W. ELSER, Defendant-Appellee. Araneta & Zaragoza for plaintiff-appellant. No appearance for defendants-appellants. DeWitt, Perkins & Brady for defendant-appellee. OSTRAND, J.: It appears from the record that on July 6, 1921, the defendants Concepcion executed a promissory note in favor of the plaintiff for the sum of P342,372.64, payable on demand, and as security for payment, deposited 700 shares of the Philippine National Bank as collateral with the plaintiff and gave it a mortgage on 5,680 square meters of land, with improvements, situated on R. Hidalgo Street in Manila. The defendants Concepcion defaulted in the payment of the note, and on February 3, 1922, the plaintiff bank instituted the present foreclosure proceedings.chanroblesvirtualawlibrary chanrobles virtual law library Shortly afterwards, Henry W. Elser entered into negotiations with the Concepcions and offered to take over the mortgaged property and assume the mortgage debt. To this the Concepcions agreed on the condition that they be relieved of all liability for the debt.chanroblesvirtualawlibrarychanrobles virtual law library On March 23, 1922, Elser wrote the plaintiff bank the following letter: DEAR SIR: Confirming our conversation of this morning, I take pleasure in advising you that I have made arrangements with Mssrs. Puno & Concepcion to take over their property on Calle R. Hidalgo, consisting of 5,680 square meters, including all improvements thereon, and also 700 shares in the Philippine National Bank mortgaged to you in the total sum of P342,000, and by which arrangement I am to be substituted in the place and stead of Messrs. Puno & Concepcion in the obligation to your bank.chanroblesvirtualawlibrary chanrobles virtual law library I have present prospects of renting the entire property and in consideration thereof I will undertake to pay to the bank on the obligation thus undertaken by me, the sum of not less than five thousand pesos (P5,000) monthly on the principal, together with interest every six months. I will also reduce the mortgage not less than 25 per cent during the first year, not less than 50 per cent during the second year, and the balance within the third year, without prejudice, however, to my right to mortgage the property to any bonding institution or to take up the mortgage myself at any time during the three years period mentioned above, which I expect that I may be in a position to do.chanroblesvirtualawlibrary chanrobles virtual law library Yours very truly, (Sgd.) H. W. ELSER No answer to this letter was given by the bank, and it clearly appears from the allegations in its amended complaint, and from the evidence, that it was unwilling to release the Concepcions from their liability for the mortgage debt and insisted on their confessing a judgment in the foreclosure proceedings. This the Concepcions refused to do unless the bank would agree to bid in the mortgage property for the full amount of the judgment.chanroblesvirtualawlibrary chanrobles virtual law library After further conversations with the representatives of the plaintiff bank, Elser on April 21, 1922, wrote in the following letter: DEAR SIRS (Attention of Mr. Zaragoza): With reference to our recent conversation regarding the R. Hidalgo property belonging to Venancio Concepcion (Puno & Concepcion), I respectfully request that you confirm in writing your verbal agreement that should the property in question become the property of

your bank, in the amount of P342,000 plus interest to date, that you will sell the same to me for the same amount.chanroblesvirtualawlibrary chanrobles virtual law library This information is desired by the Attorneys for Venancio Concepcion, Mr. R. M. Calvo, in order to satisfy himself that in case Messrs. Puno & Concepcion accept judgment, turning over the property to you, that you in return will sell the property to me for the above mentioned sum, and not less than that sum.chanroblesvirtualawlibrary chanrobles virtual law library Trusting you will see your way clear to furnish this confirmation, in accordance with our conversation, we are chanrobles virtual law library Very truly, (Sgd.) H. W. ELSER It must be inferred from this letter that Elser had been led to understand that the bank would bid in the land at the foreclosure sale for the full amount of the judgment and sell it to him for the same price. It will be readily seen that this proposition is entirely different from that contained in the letter of March 23d.chanroblesvirtualawlibrary chanrobles virtual law library The plaintiff made no direct reply to the letter of April 21st, but Calvo, testifying for the plaintiff, stated that on April 28, Elser invited him to a conference with Nolting, the president of the bank, in regard to the matter; that on meeting Nolting, Elser said: "Mr. Nolting, do you still adhere to your acceptation of the offer I have made you in writing?" to which Nolting answered that he did not think that there was any reason for him to go back on his word. He thereupon referred Elser and Calvo to Zaragoza, who in some matters appears to have acted as counsel for the bank, for further conferences. The negotiations did not lead to any action on the part of the bank, but on May 5, 1922, Elser entered into an agreement in the form of bilateral deed of sale, with V. Concepcion & Hijos, Inc., and Venancio Concepcion which appears in the record as Exhibit C and reads as follows in translation from Spanish: DEED OF PURCHASE AND SALEchanrobles virtual law library This deed of purchase and sale executed in the City of Manila, P.I., this fifth day of May 1922 A. D., by and between V. Concepcion & Hijos, Inc., a domestic corporation duly organized under the laws of Philippine Islands domiciled at No. 861 Calle R. Hidalgo, District of Quiapo, City of Manila, represented herein by the president, Mr. Venancio Concepcion, by virtue of the powers granted him by the Board of Directors of said corporation in a resolution dated May 2, 1922, a copy of which duly certified, is attached hereto and made a part hereof, and Mr. Venancio Concepcion, of age, married with Mrs. Rosario San Agustin and resident of City of Manila, his place of residence being in the municipality of San Juan, Province of Rizal, P.I., as party of the first part, and Mr. Henry W. Elser, of age, married with Mrs. Elaine Childs Elser, and a resident of City of Manila, with her place of residence at No. 600 Calle M. H. del Pilar, District of Malate, as party of the second part,chanrobles virtual law library WITNESSETH:chanrobles virtual law library Whereas, V. Concepcion e Hijos, Inc., is at present indebted to the Bank of the Philippine Islands, in the sum of P342,372.64, Philippine currency with interest thereon at the rate of 9 per cent per annum from September 30, 1921, to secure the payment of which, the firm of V. Concepcion e Hijos, Inc., and Mr. Venancio Concepcion as joint land several obligors, have executed in favor of the creditor bank on the 6th of July, 1921, a deed of mortgage and one of pledge upon the following properties:chanrobles virtual law library A tract of land with the buildings of strong materials erected thereon, situated on Calle Sa n Sebastian, District of Quiapo. Bounded on the N. by Calle San Sebastian; on the E. by property Maximino Paterno and Manuel Zamora; on the S. by property of the City of Manila; and on W. by the Estero de Curtidor; containing an area of 5,686.80 square meters, more or less, of which land, buildings and improvements, the aforesaid Venancio Concepcion is the registered owner in accordance with the Land Registration Act,

according to transfer certificate of title No. 14019, issued by the registrar of deeds of the City of Manila.chanroblesvirtualawlibrary chanrobles virtual law library Seven hundred shares of stock of the Philippine National Bank, belonging to Mr. Venancio Concepcion, issued to him and indorsed in the blank in favor of the Bank of the Philippine Islands, described as follows: (Here follows the numbers and amounts of the certificates of shares.)chanrobles virtual law library Whereas on January 20, 1922, Mr. Venancio Concepcion, owner of the property above described, in consideration of the fact that they were subject to the payment of the sum of P342,372.64 with interest thereon at the rate of 9 per cent per annum, which was owing from V. Concepcion e Hijos, Inc., to the Bank of Philippine Islands, as per deeds of mortgage and of pledge executed on July 6, 1921, has sold, assigned, and transferred to said firm of V. Concepcion e Hijos, Inc., the aforesaid properties for the sum of P290,000 Philippine currency, the agreed and stipulated price of the urban property being P220,000, Philippine currency, and that of the 700 shares of stock of the Philippine National Bank, the sum of P70,000 Philippine currency, as per public document executed on said date before Mr. Recaredo Ma. Calvo, a notary public in and for the City of Manila.chanroblesvirtualawlibrary chanrobles virtual law library Whereas, on February 28, 1922 the Bank of the Philippine Islands, filed with the clerk's office of the Court of First Instance of Manila, under No. 21537, a complaint, against V. Concepcion e Hijos, Inc., and Venancio Concepcion for the recovery of its mortgage credit evidenced by the deeds of mortgage and of pledge executed on July 6, 1921, notwithstanding the offer made by V. Concepcion e Hijos, Inc., to assign absolutely and forever to said creditor entity the properties which are the subject matter of the mortgage and pledge in full and total payment of their obligation.chanroblesvirtualawlibrary chanrobles virtual law library Whereas, Mr. Henry W. Elser is willing to subrogate himself to the obligation of V. Concepcion e Hijos, Inc., and Venancio Concepcion in favor of the Bank of Philippine Islands and release them from the total of said obligation contracted by them on July 6, 1921, as per deeds of mortgage and of pledge executed on said date, in consideration of the sale, assignment and transfer in his favor of all the rights, interest, action or share that they have or may have upon the properties described in said deeds of mortgage and pledge;chanrobles virtual law library Now, therefore, we, V. Concepcion e Hijos, Inc., and Venancio Concepcion, in consideration of the sum of one peso (P1) Philippine currency, which we have this day and which we declare was paid to us to our complete satisfaction, and of other important considerations, especially the subrogation into our joint and several obligations in favor of the Bank of the Philippine Islands, amounting to P342,372.64, Philippine currency, with interest thereon at the rate of 9 per cent per annum from September 30, 1921, which said Mr. Henry W. Elser hereby makes, binding himself, moreover, to release us from our obligation contracted in favor of the Bank of the Philippine Islands on July 6, 1921, do hereby sell, assign, and transfer absolutely and forever to said Mr. Henry W. Elser, his heirs and successors in interest the properties described herein with the incumbrances created and existing in favor of the Bank of the Philippine Islands.chanroblesvirtualawlibrary chanrobles virtual law library That I, Henry W. Elser, accept this contract upon the precise terms in which it is executed.chanroblesvirtualawlibrary chanrobles virtual law library In testimony whereof, we sign third presents in place and on the date above-mentioned. V. CONCEPCION E HIJOS, INC. (Sgd.) V. CONCEPCION (Sgd.) V. CONCEPCION (Sgd.) H. W. ELSER Signed in the presence of: (Sgd.) ERNESTO Ma. CALVO GREGORIO BUHAY

The bank never gave notice of its conformity with the agreement above quoted but of June 15, 1922, it petitioned the court to include Henry W. Elser as defendant in the complaint, on the strength of the obligations assumed by him in said agreement.chanroblesvirtualawlibrary chanrobles virtual law library On June 23, 1922, the defendants Concepcion answered said petition praying that instead of merely being included, said Elser be substituted in their place as defendants, on the ground that the plaintiff had accepted the substitution of Elser in their place as its debtor.chanroblesvirtualawlibrary chanrobles virtual law library On June 27, 1922, the trial court entered an order including Henry W. Elser as defendant and one month later, the plaintiff filed an amended complaint against the defendants Concepcion and Elser asking for a joint and several judgment against them in the amount prayed for in the original complaint and for the foreclosure of the mortgage securing the same.chanroblesvirtualawlibrary chanrobles virtual law library On July 18, 1922, the defendants Concepcion filed a supplemental answer alleging the consent of the plaintiff to the subrogation of Elser in their place with respect to the obligations sued upon and asking for the dismissal of the case as to them on the ground.chanroblesvirtualawlibrary chanrobles virtual law library On October 16, 1922, the defendant Elser demurred to the amended complaint on the ground that it failed to alleged that the plaintiff had consented to the substitution of Elser in place of the Concepcions so as to render Elser personally liable to the plaintiff. This demurrer was sustained by the court and due exception was taken by the plaintiff.chanroblesvirtualawlibrary chanrobles virtual law library On November 1, 1922, the plaintiff presented a second amended complaint, in which it is alleged that the sale from the Concepcions to Elser was with the knowledge and consent of the plaintiff but without waiver of it as right of action against the Concepcions. The defendant Elser demurred on the ground that it did not appear from the amended complaint that the plaintiff had accepted Elser as debtor and on the further ground that there was no showing therein as to the disposition of the collateral security held by the plaintiff for the same debt. This demurrer was sustained on both grounds, on December 1, 1922.chanroblesvirtualawlibrary chanrobles virtual law library On December 6, 1922, the plaintiff presented its third amended complaint, without material change in the averments of the second amended complaint, and a third demurrer thereto was sustained on December 28, 1922.chanroblesvirtualawlibrary chanrobles virtual law library The plaintiff thereupon filed a fourth amended complaint, reiterating the allegations of the third amended complaint, alleging that the defendant Elser entered into possession of the mortgaged premises with plaintiff's consent; that plaintiff had not sold the shares of the Philippine National Bank held by it as collateral, and asking for judgment decreeing that said shares and the mortgaged property be sold under order of the court, and that the defendants Concepcion and Elser be condemned to pay the deficiency, if any there should be. A demurrer to this complaint was sustained, on the ground that it failed to show a contractual relationship between the plaintiff and the defendant Elser.chanroblesvirtualawlibrary chanrobles virtual law library On March 2, 1923, the plaintiff presented a fifth amended complaint, similar to the foregoing, but containing the additional allegation that the plaintiff accepted the assumption of the mortgage by the defendant Elser "without releasing the liability of the defendants" Concepcion. This complaint was demurred to on the ground that it did not sufficiently state that the plaintiff had accepted the substitution of Elser in place of the Concepcions, as the contract between them provided. The demurrer was overruled and the defendant Elser excepted.chanroblesvirtualawlibrary chanrobles virtual law library On April 2, 1923, the defendant Elser answered, denying generally and specifically the allegations of the plaintiff's complaint. On the same date, C. W. Rosenstock, as guardian of the defendant Elser, filed a cross-complaint alleging that at the time Elser is alleged to have assumed the obligations of the Concepcions to the plaintiff, he was of unsound mind that he had been induced to sign the same by false representations on the part of the Concepcion to the effect that the plaintiff had agreed that he be

substituted in place of Concepcions with respect to the obligations set up in the plaintiff's complaint and that the plaintiff would accept payment of the same in monthly installments on account of the principal of not less than P5,000, with interest payable every six months, and that the mortgage should be reduced not less than 25 per cent the first year, not less than 50 per cent the second year, and the balance within the third year, when, as a matter of fact, the plaintiff had not agreed hereto or accepted said terms of payment, as the Concepcions well knew, and had never accepted Elser's offer to the plaintiff made pursuant to said representations, and praying for the reasons stated, that the deed from the Concepcions to Elser, wherein he assumed the obligations of the former to the plaintiff be cancelled. These allegations were denied by the plaintiff and the defendants Concepcion in their replies.chanroblesvirtualawlibrary chanrobles virtual law library Elser died on June 18, 1923, and on January 4, 1924, the plaintiff suggested the death of the defendant Elser, and asked that the administrator of the estate, C. W. Rosenstock, be substituted in his place as defendants, and that the action be continued against Rosenstock in the capacity on the ground that this action is for the foreclosure of a mortgagechanrobles virtual law library On January 11, 1924, the attorneys of record for the defendant Elser filed an opposition to the application to have the action continued against Rosenstock, in substitution of Elser, this is not a foreclosure action, and hence this action, as to him, abated by reason of his death, and any claim of the plaintiff against him should be presented to the committee on claims and appraisals of his estate.chanroblesvirtualawlibrary chanrobles virtual law library This objection was overruled and Rosenstock, as Elser's administrator, was substituted in his place as defendant, by order of the court dated January 14, 1924, and exception thereto was duly taken. Subsequently, Rosenstock became the executor of Elser's estate, and as such, filed various amended answers and cross-complaints.chanroblesvirtualawlibrary chanrobles virtual law library The last amended cross-complaint was filed by him on August 9, 1924 in case No. 24485 of the Court of First Instance of Manila, in which the estate of the deceased Elser was being administered. He repeated therein the allegations and prayer of his cross-complaint as guardian filed on April 2, 1923, and referred to above. The last amended answer was filed by him on August 21, 1925. It consisted of denial of the allegations of the complaint and of the authenticity of the document whereby Elser is alleged to have assumed the obligations of the defendants Concepcion to the plaintiff; an allegation that at the time of execution thereof, Elser was of unsound mind; and a statement of willingness to relinquished and abandon any rights Elser might have acquired under said document in favor of the plaintiff.chanroblesvirtualawlibrary chanrobles virtual law library After a lengthy trial, the court below, on January 22, 1927, rendered its decision absolving the Elser estate from the complaint, ordering the Concepcions to pay the plaintiff the sum of P342,372.64, with interest of 9 per cent and costs, and providing for the sale of the mortgaged property, in case of non-payment of the judgment.chanroblesvirtualawlibrary chanrobles virtual law library Both the plaintiff and the defendants Concepcion excepted to this judgment and moved for a new trial on the usual statutory grounds. The motions were denied and exceptions noted.chanroblesvirtualawlibrary chanrobles virtual law library The case is now before this court on a joint bill of exceptions presented by the plaintiff and the defendants Concepcion pursuant to stipulation. No briefs have been filed by the Concepcions.chanroblesvirtualawlibrary chanrobles virtual law library From the facts stated and from the pleadings it will be readily seen that as far as the defendant Elser is concerned, the plaintiff alleged cause of action rests exclusively on the deed of contract Exhibit C. The well known general rule is that a contract affects only the parties and privies thereto. But there are exceptions to this rule and the plaintiff contends that though it is neither a party nor a privy to the contract here in question, the subrogation of Elser to the obligations of the Concepcions in favor of the plaintiff as provided for in the contract, is a stipulation pour autrui upon which the plaintiff may maintain its actionchanrobles virtual law library

The nature and reach of the doctrine of the stipulations pour autrui is so thoroughly discussed in the case of Uy Tam and Uy Yet vs. Leonard (30 Phil., 471), that no further discussion thereof is here necessary. We wish , however, to emphasize the fact that it was there held that in order to constitute a valid stipulation pour autrui, it must be the purpose and intent of the stipulating parties to benefit the third person may be incidentally benefited by stipulation. This conclusion is supported by numerous authorities and is in complete harmony with the second paragraph of article 1257 of the Civil Code, which reads as follows: Should the contract contain any stipulation in favor of the third person, he may demand its fulfillment, provided he has given notice of his acceptance to the person bound before the stipulation has been revoked. Applying this test, it seems clear that neither Exhibit C nor any other agreement between the Concepcion and the Elser contained any stipulationpour autrui in favor of the plaintiff. As stated in the appellee's brief: The Concepcion owed the plaintiff a large sum of money and wanted to be relieved of that obligation. Elser wanted the property which he had been mortgaged to secure that obligation, and had to assume the obligation and agree to secure the discharge of the Concepcion therefrom, in order to get the property. Neither of them had any desire to confer any benefit to the bank. Neither of them entered into the contract for the sake of the bank. It is obvious that each entered into the contract impelled by the advantage accruing to him personally as a result thereof. We may add that the stipulation here in question is not merely for the assumption of the mortgaged debt by Elser, but is a provision for the subrogation of Elser to the Concepcion obligations to the plaintiff. Inasmuch as the mere assumption of the mortgage debt by the purchaser of the mortgaged land does not relieved the mortgagor from his liability, it might be said that some show of reason that by such an arrangement the mortgagee will have two debtors for the same debt instead of only one and that this furnishes additional security and is to the creditor's advantage and for his benefit. But such is not the case where, as here, the stipulation is for the subrogation of the purchasers to the obligation of the original debtor; if such a stipulation is duly accepted by the creditor, it works a novation of the original agreement and releases the original debtor from further liability. Such subrogation is rarely for the benefit of the creditor and that, in the present case, it was not believed to be of any advantage to the bank is well shown by the fact that the parties were unable to obtain its written consent to the stipulation.chanroblesvirtualawlibrary chanrobles virtual law library But assuming that the stipulation is for the benefit of a third person, the plaintiff is nevertheless not in position to maintain its action against Elser. In order to be enforceable, such stipulations must be accepted by the third person and not has not been done here. The plaintiff asserts that it accepted the stipulations in part, but that is not a sufficient acceptance. The ordinary rules of offer and acceptance are applicable, and it is a cardinal rule of the law of contracts that in order to create a binding agreement, the acceptance must be absolute, unconditional, and identical with the terms of the offer; otherwise there is no meeting of the minds or an expression of one and the same common intention, one of the essential elements of a valid contract (Civil Code, art., 1257; Page on Contracts, sec. 1308, and authorities there cited).chanroblesvirtualawlibrary chanrobles virtual law library But the plaintiff argues that in American jurisprudence, the purchaser of the mortgaged property who assumes the payment of the mortgage debt, may for the reason alone sued for the debt by the creditor and that the rule is applicable in this jurisdiction. Aside from the fact that we are not dealing with a mere assumption of the debt, but with a subrogation, it may be noted that this court has already held that the American doctrine in this respect is not in harmony with the spirit of our legislation and has not been adopted in this country. In the case of E.C. McCullough & Co. vs. Veloso and Serna (46 Phil., 1), the court. speaking through its present Chief Justice, said: The effects of transfer of a mortgaged property to a third person are well determined by the Civil Code. According to article 1879 of this Code, the creditor may demand of the third person in possession of the property mortgaged payment of such part of the debt, as is secured by the property in his possession, in the manner and form established by law. The Mortgage Law in force at the promulgation of the Civil Code and referred to in the latter, exacted, among other conditions, also the circumstance that after judicial or notarial demand, the original debtor had failed to make payment of the debt at maturity. (Art. 135 of the

Mortgage Law of the Philippines of 1889.) According to this, the obligation of the new possessor to pay the debt originated from the right of the creditor to demand payment of him, it being necessary that a demand for payment should have previously been made upon the debtor and the latter should have failed to pay. And even if these requirements were complied with, still the third possessor might abandon the property mortgaged, and in that case it is considered to be in the possession of the debtor . (Art. 136 of the same law.) This clearly shows that the spirit of the Civil Code is to let the obligation of the debtor to pay the debt stand although the property mortgaged to secure payment of said debt may have been transferred to a third person. While the Mortgage Law of 1893 eliminated this provisions, it contained nothing indicating any change in the spirit of the law in this respect. Article 129 of this law, which provides for the substitution of the debtor by the third person in possession of the property, for the purposes of giving notice, does not show this change and has reference to a case where the action is directed only against the property burdened with the mortgage. (Art. 168 of the Regulation.) From what we have said it follows that the plaintiff can have no cause of action against Elser, or rather against his estate. Assuming that Elser was of sound mind at the time of the execution of Exhibit C - and that is a much debated question - the Concepcion, and not the plaintiff might have maintained an action against the Elser state; but that action is now barred through their failure to present their claim and appraisal in the probate proceedings, and the plaintiff can therefore, not successfully invoked article 1111 of the Civil Code, which in effect provides that after exhausting the property of which the debtor may be in possession, the creditor may have recourse to the debtor's credit and choses an action for the collection of unpaid portion of the debt.chanroblesvirtualawlibrary chanrobles virtual law library Counsel for the appellee also argue that the bank, having failed to present its claim to the committee on claims and appraisal, it must be regarded as having elected to rely on its mortgage alone and therefore can have no personal judgement against the Elser estate. That is good law. Section 708 of the Code of Civil Procedure provides as follows: SEC. 708. Mortgage debt due from estate. - A creditor holding a claim against the deceased, secured by mortgage or other collateral security, may abandon the security and prosecute his claim before the committee, and share in the general distribution of the assets of the estate; or he may foreclose his mortgage or realize upon security, by ordinary action in court, making the executor or administrator a party defendant; and if there is a judgment for a deficiency, after the sale of the mortgaged premises, or the property pledge, in the foreclosure or other proceedings to realize upon the security, he any prove his deficiency judgment before the committee against the estate of the deceased; or he may rely upon his mortgage or other security alone, and foreclose the same at any time, within the period of statute of limitations, and in that event he shall not be admitted as an creditor, and shall receive no share in the distribution of the other assets of the estate; As will be seen, the mortgagee has the election of one out of three courses: (1) He may abandon his security and share in the general distribution of the assets of the estate, or (2) he may foreclose, secure a deficiency judgment and prove his deficiency judgment before the committee, or (3) he may rely upon his security alone, in which case he can receive no share in the distribution of the assets of the estate.chanroblesvirtualawlibrary chanrobles virtual law library In this case the bank did not abandon the security and took no steps of any sort before the committee within the time limit provided by the sections 689 and 690 of the Code of Civil Procedure. The committed ceased to function long ago, and the bank has now nothing to rely on except the mortgage. Internationally or not, it has bought itself within the third course provided for in section 708; it has no alternative.chanroblesvirtualawlibrary chanrobles virtual law library But counsel for the plaintiff say that the amount of the deficiency, if any, could not be proved before the foreclosure sale and had been effected; that section 708 expressly provide for the proof of the deficiency judgment before the committee after the sale of the mortgaged property; that this provisions must be construed to mean that the presentation and prosecution of the claim of the deficiency must be made after, not before, the sale; and that if the mortgagee presents his claim from a deficiency before a deficiency judgment have been rendered, he will loose his rights under the mortgage and be regarded as having abandon his security.chanroblesvirtualawlibrary chanrobles virtual law library

This clearly a misconception of the statute, and the cases cited by the appellant in support for its contention are not in point. Until the foreclosure sale is made, the demand for the payment of deficiency is a contingent claim within the meaning of sections 746, 747, and 748 of the Code of Civil Procedure, which sections reads as follows: SEC. 746. Claims may be presented to committee. - If a person is liable as surety for the deceased, or has other contingent claims against his estate which cannot be proved as a debt before the committee, the same may be presented with the proof, to the committee, who shall state in their report that such claim was presented to them.chanroblesvirtualawlibrary chanrobles virtual law library SEC. 747. Estate to be retained to meet claims. - If the court is satisfied from the report of the committee, or from proofs exhibited to it, that such contingent claim is valid, it may order the executor or administrator to retains in his hands sufficient estate to pay such contingent claim, when the same becomes absolute, or if the estate is insolvent, sufficient to pay a portion equal to the dividend of the other creditors.chanroblesvirtualawlibrary chanrobles virtual law library SEC. 748. Claim becoming absolute in two years, how allowed. - If such contingent claims becomes absolute and is presented to the court, or to the executor or administrator, within two years from the time limited for other creditors to present their claims, it may be allowed by the court if not disputed by the executor or administrator, and, if disputed, it may be proved that the committee already appointed, or before others to be appointed, for the purpose, as if presented for allowance before the committee had made its report. These sections are in entire harmony with section 708; the amount of the deficiency cannot be ascertained or proven until the foreclosure proceedings have terminated, but the claim for the deficiency must be presented to the committee within the period fixed by sections 689 and 690 of the Code. The committee does not then pass upon the validity of the claim but reports it to the court. If the court "from the report of the committee" or from "the proofs exhibited to it" is satisfied that the contingent claim is valid, the executor or administrator may be required to retain in his possession sufficient assets to pay the claim when it becomes absolute, or enough to pay the creditor his proportionate share if the assets of the estate are insufficient to pay the debts. When the contingent claim has become absolute, its amount may be ascertained and established in the manner indicated by sections 748 and 749. As will be seen, the bank both could and should have presented its claim to the committee within the time prescribed by the law. The concurring opinion of Justices Malcolm and Fisher in the case of Jaucian vs. Querol (38 Phil., 707), contains a very lucid expositions of the law on the subject and further comment is therefore unnecessary.chanroblesvirtualawlibrary chanrobles virtual law library The appeal is without merit and the judgment of the court below is affirmed with the costs against the plaintiff-appellant. So ordered. Johnson, Street, Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.

G.R. No. L-32425 November 21, 1984 THE IMPERIAL INSURANCE, INC., Plaintiff-Appellee, vs. EMILIA T. DAVID,Defendant-Appellant. RELOVA, J.: Petition for review on certiorari of the decision rendered by the then Court of First Instance of Manila in Civil Case No. 67713, sustaining the money claims of plaintiff-appellee, The Imperial Insurance, Inc. against defendant-appellant Emilia T. David, based on three (3) different causes of action in the complaint.chanroblesvirtualawlibrarychanrobles virtual law library The first two causes of action involve the indemnity agreements which defendant-appellant and her deceased husband, Felicisimo V. Reyes, jointly and severally, executed in favor of herein appellee, for and in consideration of two (2) surety bonds underwritten by it to lift the lift the writs of attachment in Civil Case No. 5213 of the Rizal Court of First Instance for the amount of P60,000.00, and in Civil Case No. Q5214, also with the same court for the amount of P40,000.00chanrobles virtual law library The third cause of action involves accrued premiums and documentary stamps for four (4) years with legal interest therein from the filing of the complaint also underwritten by appellee.chanroblesvirtualawlibrarychanrobles virtual law library Records show that Felicisimo V. Reyes and his wife, herein appellant, executed two (2) indemnity agreements in favor of appellee jointly and severally to assure indemnification of the latter for whatever liability it may incur in connection with its posting the security bonds to lift the attachments in Civil Case No. Q-5213 for the amount of P60,000.00, and in Civil Case No. Q-5214 for the amount of P40,000.00, for the benefit of Felicisimo V. Reyes.chanroblesvirtualawlibrarychanrobles virtual law library Later, Felicisimo V. Reyes and his wife, jointly and severally, executed another indemnity agreement in favor of appellee to assure indemnification of the latter under a homestead bond for the sum of P7,500.00 it had executed jointly and severally with them in favor of the Development Bank of the Philippines. On the same date, Felicisimo V. Reyes and his wife paid to appellee the sum of P153.33 covering the premium and other expenses for the homestead bond on the first year.chanroblesvirtualawlibrarychanrobles virtual law library Felicisimo V.Reyes died and Special Proceedings No. 12948 of the then Court of First Instance of Bulacan, entitled "In the Matter of the Instestate of Felicisimo V. Reyes," was commenced. His wife, herein appellant, qualified and took her oath of office as the administratrix of said intestate estate. Corresponding notices to creditors were issued and published for three (3) consecutive weeks in the "Manila Chronicle" and were duly posted in the required places.chanroblesvirtualawlibrary chanrobles virtual law library Meanwhile, judgment was rendered in the aforesaid two cases (Civil Cases Nos. Q-5213 and Q-5214) against the spouses Felicisimo V. Reyes and appellant Emilia T. David which has become final and executory. Writs of execution of the decision on the said cases were returned unsatisfied. As a consequence, judgment was rendered against the surety bonds for the sum of P60,000.00 in Civil Case No. Q-5213 and for the sum of P40,000.00 in Civil Case No. Q-5214.chanroblesvirtualawlibrary chanrobles virtual law library Appellee made demands on Emilia T. David to pay the amounts of P60,000.00 and P40,000.00 under the surety bonds and arrears in premiums thereon. When appellant David failed to make payments, appellee filed Civil Case No. 67713 in the then Court of First Instance of Manila, Branch 1, for collection of sums of money under three (3) different causes of action.chanroblesvirtualawlibrary chanrobles virtual law library A motion to dismiss was filed by herein appellant on the following grounds. to wit: (1) the court has no jurisdiction over the nature of the action or suit; (2) the complaint states no cause of action; and (3) the plaintiff's causes of action, if there be any, have been barred for its failure to file its claims against the estate of the deceased Felicisimo V. Reyes in due time.chanroblesvirtualawlibrary chanrobles virtual law library

The lower court denied the motion for lack of merit. Thereafter, appellant, as defendant in said Civil Case No. 67713, filed her answer.chanroblesvirtualawlibrary chanrobles virtual law library After trial, the court rendered judgment ordering defendant Emilia T. David (herein appellant) 1. to pay the plaintiff under the first cause of action, the amount of P60,000.00 with interest at legal rate from the filing of the complaint until fun payment shall be effected; and a further sum of P1,522.50 annually from June 20, 1961 until termination of this case, said amount representing premiums and documentary stamps in the surety bond, Exh. "B", with interest at legal rate from the filing of the complaint until full payment is made; chanrobles virtual law library 2. to pay the plaintiff under the second cause of action, the amount of P40,000.00 with interest at the legal rate from the filing of the complaint until full payment shag be made; and a further sum of P1,105.00 annually from June 20, 1961 until termination of this case, said amount representing premiums and documentary stamps on the surety bond Exh. "B", with interest at the legal rate from the filing of the complaint until full payment is made; chanrobles virtual law library 3. to pay the plaintiff under the third cause of action the amount of P153.33 annually for a period of 4 years from June 29, 1962 representing premiums and documentary stamps on the Homestead Bond Exh. "C-1" with interest at the legal rate from the filing of the complaint until full payment is made; chanrobles virtual law library 4. to pay the plaintiff in concept of attorney's fees the sum of P20,000.00, representing 20% of the principal claim of plaintiff; plus cost. (pp. 39-40, Rollo) The principal issue raised by appellant Emilia T. David in this appeal is whether or not the lower court has jurisdiction over plaintiff's causes of action. She contends that appellee's claim should have been presented according to Rule 86 of the Revised Rules of Court and its failure to do so operates to bar its claim forever; that the complaint failed to state a cause of action; that the writ of attachment was improvidently issued; and, that the lower court should have discharged the writs. Further, she argues that the judgment on attorney's fees has neither legal nor factual basis.chanroblesvirtualawlibrary chanrobles virtual law library We find no merit in this appeal. Under the law and well settled jurisprudence, when the obligation is a solidary one, the creditor may bring his action in toto against any of the debtors obligated in solidum. Thus, if husband and wife bound themselves jointly and severally, in case of his death her liability is independent of and separate from her husband s; she may be sued for the whole debt and it would be error to hold that the claim against her as well as the claim against her husband should be made in the decedent's estate. (Agcaoili vs. Vda. de Agcaoili, 90 Phil. 97) chanrobles virtual law library In the case at bar, appellant signed a joint and several obligation with her husband in favor of herein appellee; as a consequence, the latter may demand from either of them the whole obligation. As distinguished from a joint obligation where each of the debtor is liable only for a proportionate part of the debt and the creditor is entitled only to a proportionate part of the credit, in a solidary obligation the creditor may enforce the entire obligation against one of the debtors. Where the obligation assumed by several persons is joint and several, each of the debtors is answerable for the whole obligation with the right to seek contribution from his co-debtors. (Philippine International Surety Co., Inc. vs. Gonzales, 3 SCRA 391) chanrobles virtual law library And, in Manila Surety and Fidelity Co., Inc. vs. Villarama, et al., 107 Phil. 891, this Court ruled that the Rules of Court provide the procedure should the creditor desire to go against the. deceased debtor, "but there is noting in the aid provision making compliance with such procedure a condition precedent an ordinary action against the solidary debtors. should the creditor choose to demand payment from the latter, could be entertained to the extent that failure to observe the same would deprive the court jurisdiction to make cognizance of the action against the surviving debtors. Upon lie other hand, the Civil Code expressly allows the creditor to proceed against any one of the solidary debtors or some or all of

them simultaneously. Hence, there is nothing improper in the creditor's filing of an action against the surviving solidary debtors alone, instead of instituting a proceeding for the settlement of the estate of the deceased debtor wherein his claim could be filed. ACCORDINGLY, the decision of the court a quo is hereby AFFIRMED in toto with costs against appellant.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. Teehankee (Chairman), Melencio-Herrera, Plana, Gutierrez, Jr. and De la Fuente, JJ., concur.

[G.R. NO. 147561 : June 22, 2006] STRONGHOLD INSURANCE COMPANY, INC., Petitioner, v. REPUBLIC-ASAHI GLASS CORPORATION, Respondent. DECISION PANGANIBAN, C.J.: Asurety company's liability under the performance bond it issues is solidary. The death of the principal obligor does not, as a rule, extinguish the obligation and the solidary nature of that liability. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to reverse the March 13, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 41630. The assailed Decision disposed as follows: "WHEREFORE, the Order dated January 28, 1993 issued by the lower court is REVERSED and SET ASIDE. Let the records of the instant case be REMANDED to the lower court for the reception of evidence of all parties."3 The Facts The facts of the case are narrated by the CA in this wise: "On May 24, 1989, [respondent] Republic-Asahi Glass Corporation (Republic-Asahi) entered into a contract with x x x Jose D. Santos, Jr., the proprietor of JDS Construction (JDS), for the construction of roadways and a drainage system in Republic-Asahi's compound in Barrio Pinagbuhatan, Pasig City, where [respondent] was to pay x x x JDS five million three hundred thousand pesos (P5,300,000.00) inclusive of value added tax for said construction, which was supposed to be completed within a period of two hundred forty (240) days beginning May 8, 1989. In order 'to guarantee the faithful and satisfactory performance of its undertakings' x x x JDS, shall post a performance bond of seven hundred ninety five thousand pesos (P795,000.00). x x x JDS executed, jointly and severally with [petitioner] Stronghold Insurance Co., Inc. (SICI) Performance Bond No. SICI-25849/g(13)9769. "On May 23, 1989, [respondent] paid to x x x JDS seven hundred ninety five thousand pesos (P795,000.00) by way of downpayment. "Two progress billings dated August 14, 1989 and September 15, 1989, for the total amount of two hundred seventy four thousand six hundred twenty one pesos and one centavo (P274,621.01) were submitted by x x x JDS to [respondent], which the latter paid. According to [respondent], these two progress billings accounted for only 7.301% of the work supposed to be undertaken by x x x JDS under the terms of the contract. "Several times prior to November of 1989, [respondent's] engineers called the attention of x x x JDS to the alleged alarmingly slow pace of the construction, which resulted in the fear that the construction will not be finished within the stipulated 240-day period. However, said reminders went unheeded by x x x JDS. "On November 24, 1989, dissatisfied with the progress of the work undertaken by x x x JDS, [respondent] Republic-Asahi extrajudicially rescinded the contract pursuant to Article XIII of said contract, and wrote a letter to x x x JDS informing the latter of such rescission. Such rescission, according to Article XV of the contract shall not be construed as a waiver of [respondent's] right to recover damages from x x x JDS and the latter's sureties.

"[Respondent] alleged that, as a result of x x x JDS's failure to comply with the provisions of the contract, which resulted in the said contract's rescission, it had to hire another contractor to finish the project, for which it incurred an additional expense of three million two hundred fifty six thousand, eight hundred seventy four pesos (P3,256,874.00). "On January 6, 1990, [respondent] sent a letter to [petitioner] SICI filing its claim under the bond for not less than P795,000.00. On March 22, 1991, [respondent] again sent another letter reiterating its demand for payment under the aforementioned bond. Both letters allegedly went unheeded. "[Respondent] then filed [a] complaint against x x x JDS and SICI. It sought from x x x JDS payment of P3,256,874.00 representing the additional expenses incurred by [respondent] for the completion of the project using another contractor, and from x x x JDS and SICI, jointly and severally, payment of P750,000.00 as damages in accordance with the performance bond; exemplary damages in the amount of P100,000.00 and attorney's fees in the amount of at least P100,000.00. "According to the Sheriff's Return dated June 14, 1991, submitted to the lower court by Deputy Sheriff Rene R. Salvador, summons were duly served on defendant-appellee SICI. However, x x x Jose D. Santos, Jr. died the previous year (1990), and x x x JDS Construction was no longer at its address at 2nd Floor, Room 208-A, San Buena Bldg. Cor. Pioneer St., Pasig, Metro Manila, and its whereabouts were unknown. "On July 10, 1991, [petitioner] SICI filed its answer, alleging that the [respondent's] money claims against [petitioner and JDS] have been extinguished by the death of Jose D. Santos, Jr. Even if this were not the case, [petitioner] SICI had been released from its liability under the performance bond because there was no liquidation, with the active participation and/or involvement, pursuant to procedural due process, of herein surety and contractor Jose D. Santos, Jr., hence, there was no ascertainment of the corresponding liabilities of Santos and SICI under the performance bond. At this point in time, said liquidation was impossible because of the death of Santos, who as such can no longer participate in any liquidation. The unilateral liquidation on the party (sic) of [respondent] of the work accomplishments did not bind SICI for being violative of procedural due process. The claim of [respondent] for the forfeiture of the performance bond in the amount of P795,000.00 had no factual and legal basis, as payment of said bond was conditioned on the payment of damages which [respondent] may sustain in the event x x x JDS failed to complete the contracted works. [Respondent] can no longer prove its claim for damages in view of the death of Santos. SICI was not informed by [respondent] of the death of Santos. SICI was not informed by [respondent] of the unilateral rescission of its contract with JDS, thus SICI was deprived of its right to protect its interests as surety under the performance bond, and therefore it was released from all liability. SICI was likewise denied due process when it was not notified of plaintiff-appellant's process of determining and fixing the amount to be spent in the completion of the unfinished project. The procedure contained in Article XV of the contract is against public policy in that it denies SICI the right to procedural due process. Finally, SICI alleged that [respondent] deviated from the terms and conditions of the contract without the written consent of SICI, thus the latter was released from all liability. SICI also prayed for the award of P59,750.00 as attorney's fees, and P5,000.00 as litigation expenses. "On August 16, 1991, the lower court issued an order dismissing the complaint of [respondent] against x x x JDS and SICI, on the ground that the claim against JDS did not survive the death of its sole proprietor, Jose D. Santos, Jr. The dispositive portion of the [O]rder reads as follows: 'ACCORDINGLY, the complaint against the defendants Jose D. Santos, Jr., doing business under trade and style, 'JDS Construction' and Stronghold Insurance Company, Inc. is ordered DISMISSED. 'SO ORDERED.' "On September 4, 1991, [respondent] filed a Motion for Reconsideration seeking reconsideration of the lower court's August 16, 1991 order dismissing its complaint. [Petitioner] SICI field its 'Comment and/or Opposition to the Motion for Reconsideration.' On October 15, 1991, the lower court issued an Order, the dispositive portion of which reads as follows:

'WHEREFORE, premises considered, the Motion for Reconsideration is hereby given due course. The Order dated 16 August 1991 for the dismissal of the case against Stronghold Insurance Company, Inc., is reconsidered and hereby reinstated (sic). However, the case against defendant Jose D. Santos, Jr. (deceased) remains undisturbed. 'Motion for Preliminary hearing and Manifestation with Motion filed by [Stronghold] Insurance Company Inc., are set for hearing on November 7, 1991 at 2:00 o'clock in the afternoon. 'SO ORDERED.' "On June 4, 1992, [petitioner] SICI filed its 'Memorandum for Bondsman/Defendant SICI (Re: Effect of Death of defendant Jose D. Santos, Jr.)' reiterating its prayer for the dismissal of [respondent's] complaint. "On January 28, 1993, the lower court issued the assailed Order reconsidering its Order dated October 15, 1991, and ordered the case, insofar as SICI is concerned, dismissed. [Respondent] filed its motion for reconsideration which was opposed by [petitioner] SICI. On April 16, 1993, the lower court denied [respondent's] motion for reconsideration. x x x."4 Ruling of the Court of Appeals The CA ruled that SICI's obligation under the surety agreement was not extinguished by the death of Jose D. Santos, Jr. Consequently, Republic-Asahi could still go after SICI for the bond. The appellate court also found that the lower court had erred in pronouncing that the performance of the Contract in question had become impossible by respondent's act of rescission. The Contract was rescinded because of the dissatisfaction of respondent with the slow pace of work and pursuant to Article XIII of its Contract with JDS. The CA ruled that "[p]erformance of the [C]ontract was impossible, not because of [respondent's] fault, but because of the fault of JDS Construction and Jose D. Santos, Jr. for failure on their part to make satisfactory progress on the project, which amounted to non-performance of the same. x x x [P]ursuant to the [S]urety [C]ontract, SICI is liable for the non-performance of said [C]ontract on the part of JDS Construction."5 Hence, this Petition.6 Issue Petitioner states the issue for the Court's consideration in the following manner: "Death is a defense of Santos' heirs which Stronghold could also adopt as its defense against obligee's claim."7 More precisely, the issue is whether petitioner's liability under the performance bond was automatically extinguished by the death of Santos, the principal. The Court's Ruling The Petition has no merit. Sole Issue: Effect of Death on the Surety's Liability

Petitioner contends that the death of Santos, the bond principal, extinguished his liability under the surety bond. Consequently, it says, it is automatically released from any liability under the bond. As a general rule, the death of either the creditor or the debtor does not extinguish the obligation.8 Obligations are transmissible to the heirs, except when the transmission is prevented by the law, the stipulations of the parties, or the nature of the obligation. 9Only obligations that are personal 10 or are identified with the persons themselves are extinguished by death. 11 Section 5 of Rule 8612 of the Rules of Court expressly allows the prosecution of money claims arising from a contract against the estate of a deceased debtor. Evidently, those claims are not actually extinguished.13 What is extinguished is only the obligee's action or suit filed before the court, which is not then acting as a probate court.14 In the present case, whatever monetary liabilities or obligations Santos had under his contracts with respondent were not intransmissible by their nature, by stipulation, or by provision of law. Hence, his death did not result in the extinguishment of those obligations or liabilities, which merely passed on to his estate.15 Death is not a defense that he or his estate can set up to wipe out the obligations under the performance bond. Consequently, petitioner as surety cannot use his death to escape its monetary obligation under its performance bond. The liability of petitioner is contractual in nature, because it executed a performance bond worded as follows: "KNOW ALL MEN BY THESE PRESENTS: "That we, JDS CONSTRUCTION of 208-A San Buena Building, contractor, of Shaw Blvd., Pasig, MM Philippines, as principal and the STRONGHOLD INSURANCE COMPANY, INC. a corporation duly organized and existing under and by virtue of the laws of the Philippines with head office at Makati, as Surety, are held and firmly bound unto the REPUBLIC ASAHI GLASS CORPORATION and to any individual, firm, partnership, corporation or association supplying the principal with labor or materials in the penal sum of SEVEN HUNDRED NINETY FIVE THOUSAND (P795,000.00), Philippine Currency, for the payment of which sum, well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. "The CONDITIONS OF THIS OBLIGATION are as follows; "WHEREAS the above bounden principal on the ___ day of __________, 19__ entered into a contract with the REPUBLIC ASAHI GLASS CORPORATION represented by _________________, to fully and faithfully. Comply with the site preparation works road and drainage system of Philippine Float Plant at Pinagbuhatan, Pasig, Metro Manila. "WHEREAS, the liability of the Surety Company under this bond shall in no case exceed the sum of PESOS SEVEN HUNDRED NINETY FIVE THOUSAND (P795,000.00) Philippine Currency, inclusive of interest, attorney's fee, and other damages, and shall not be liable for any advances of the obligee to the principal. "WHEREAS, said contract requires the said principal to give a good and sufficient bond in the above-stated sum to secure the full and faithfull performance on its part of said contract, and the satisfaction of obligations for materials used and labor employed upon the work; "NOW THEREFORE, if the principal shall perform well and truly and fulfill all the undertakings, covenants, terms, conditions, and agreements of said contract during the original term of said contract and any extension thereof that may be granted by the obligee, with notice to the surety and during the life of any guaranty required under the contract, and shall also perform well and truly and fulfill all the undertakings, covenants, terms, conditions, and agreements of any and all duly authorized modifications of said contract that may hereinafter be made, without notice to the surety except when such modifications increase the contract price; and such principal contractor or his or its sub-contractors shall promptly make payment to any individual, firm, partnership, corporation or association supplying the principal of its sub-contractors

with labor and materials in the prosecution of the work provided for in the said contract, then, this obligation shall be null and void; otherwise it shall remain in full force and effect. Any extension of the period of time which may be granted by the obligee to the contractor shall be considered as given, and any modifications of said contract shall be considered as authorized, with the express consent of the Surety. "The right of any individual, firm, partnership, corporation or association supplying the contractor with labor or materials for the prosecution of the work hereinbefore stated, to institute action on the penal bond, pursuant to the provision of Act No. 3688, is hereby acknowledge and confirmed." 16 As a surety, petitioner is solidarily liable with Santos in accordance with the Civil Code, which provides as follows: "Art. 2047. By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. "If a person binds himself solidarily with the principal debtor, the provisions of Section 4, 17 Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship." xxx "Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected." Elucidating on these provisions, the Court in Garcia v. Court of Appeals18 stated thus: "x x x. The surety's obligation is not an original and direct one for the performance of his own act, but merely accessory or collateral to the obligation contracted by the principal. Nevertheless, although the contract of a surety is in essence secondary only to a valid principal obligation, his liability to the creditor or promisee of the principal is said to be direct, primary and absolute; in other words, he is directly and equally bound with the principal. x x x."19 Under the law and jurisprudence, respondent may sue, separately or together, the principal debtor and the petitioner herein, in view of the solidary nature of their liability. The death of the principal debtor will not work to convert, decrease or nullify the substantive right of the solidary creditor. Evidently, despite the death of the principal debtor, respondent may still sue petitioner alone, in accordance with the solidary nature of the latter's liability under the performance bond. WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals AFFIRMED. Costs against petitioner. SO ORDERED.

G.R. No. L-8235 March 19, 1914 ISIDRO SANTOS, Plaintiff-Appellant, vs. LEANDRA MANARANG, administratrix,Defendant-Appellee. W. A. Kincaid and Thomas L. Hartigan for appellant. Ramon Salinas for appellee. TRENT, J. :chanrobles virtual law library Don Lucas de Ocampo died on November 18, 1906, possessed of certain real and personal property which, by his last will and testament dated July 26, 1906, he left to his three children. The fourth clause of this will reads as follows: I also declare that I have contracted the debts detailed below, and it is my desire that they may be religiously paid by my wife and executors in the form and at the time agreed upon with my creditors. Among the debts mentioned in the list referred to are two in favor of the plaintiff, Isidro Santos; one due on April 14, 1907, for P5,000, and various other described as falling due at different dates (the dates are not given) amounting to the sum of P2,454. The will was duly probated and a committee was regularly appointed to hear and determine such claims against the estate as might be presented. This committee submitted its report to the court on June 27, 1908. On July 14, 1908, the plaintiff, Isidro Santos, presented a petition to the court asking that the committee be required to reconvene and pass upon his claims against the estate which were recognized in the will of testator. This petition was denied by the court, and on November 21, 1910, the plaintiff instituted the present proceedings against the administratrix of the estate to recover the sums mentioned in the will as due him. Relief was denied in the court below, and now appeals to this court.chanroblesvirtualawlibrary chanrobles virtual law library In his first assignment of error, the appellant takes exception to the action of the court in denying his petition asking that the committee be reconvened to consider his claim. In support of this alleged error counsel say that it does not appear in the committee's report that the publications required by section 687 of the Code of Civil Procedure had been duly made. With reference to this point the record affirmatively shows that the committee did make the publications required by law. It is further alleged that at the time the appellant presented his petition the court had not approved the report of the committee. If this were necessary we might say that, although the record does not contain a formal approval of the committee's report, such approval must undoubtedly have been made, as will appear from an inspection of the various orders of the court approving the annual accounts of the administratrix, in which claims allowed against the estate by the committee were written off in accordance with its report. This is shown very clearly from the court's order of August 1, 1912, in which the account of the administratrix was approved after reducing final payments of some of the claims against the estate to agree with the amounts allowed by the committee. It is further alleged that at the time this petition was presented the administration proceedings had not been terminated. This is correct.chanroblesvirtualawlibrary chanrobles virtual law library In his petition of July 14, 1909, asking that the committee be reconvened to consider his claims, plaintiff states that his failure to present the said claims to the committee was due to his belief that it was unnecessary to do so because of the fact that the testator, in his will, expressly recognized them and directed that they should be paid. The inference is that had plaintiff's claims not been mentioned in the will he would have presented to the committee as a matter of course; that plaintiff was held to believe by this express mention of his claims in the will that it would be unnecessary to present them to the committee; and that he did not become aware of the necessity of presenting them to the committee until after the committee had made its final report.chanroblesvirtualawlibrary chanrobles virtual law library Under these facts and circumstances, did the court err in refusing to reconvene the committee for the purpose of considering plaintiff's claim? The first step towards the solution of this question is to determine whether plaintiff's claims were such as a committee appointed to hear claims against an estate is, by law, authorized to pass upon. Unless it was such a claim plaintiff's argument has no foundation. Section 686 empowers the committee to try and decide claims which survive against the executors and administrators,

even though they be demandable at a future day "except claims for the possession of or title to real estate." Section 700 provides that all actions commenced against the deceased person for the recovery of money, debt, or damages, pending at the time the committee is appointed, shall be discontinued, and the claims embraced within such actions presented to the committee. Section 703 provides that actions to recover title or possession of real property, actions to recover damages for injury to person or property, real and personal, and actions to recover the possession of specified articles of personal property, shall survive, and may be commenced and prosecuted against the executor or administrator; "but all other actions commenced against the deceased before his death shall be discontinued and the claims therein involved presented before the committee as herein provided." Section 708 provides that a claim secured by a mortgage or other collateral security may be abandoned and the claim prosecuted before the committee, or the mortgage may be foreclosed or the security be relied upon, and in the event of a deficiency judgment, the creditor may, after the sale of mortgage or upon the insufficiency of the security, prove such deficiency before the committee on claims. There are also certain provisions in section 746 et seq., with reference to the presentation of contingent claims to the committee after the expiration of the time allowed for the presentation of claims not contingent. Do plaintiff's claims fall within any of these sections? They are described in the will as debts. There is nothing in the will to indicate that any or all of them are contingent claims, claims for the possession of or title to real property, damages for injury to person or property, real or personal, or for the possession of specified articles of personal property. Nor is it asserted by the plaintiff that they do. The conclusion is that they were claims proper to be considered by the committee.chanroblesvirtualawlibrary chanrobles virtual law library This being true, the next point to determine is, when and under what circumstances may the committee be recalled to consider belated claims? Section 689 provides: That court shall allow such time as the circumstances of the case require for the creditors to present their claims the committee for examination and allowance; but not, in the first instance, more than twelve months, or less than six months; and the time allowed shall be stated in the commission. The court may extend the time as circumstances require, but not so that the whole time shall exceed eighteen months. It cannot be questioned that thus section supersedes the ordinary limitation of actions provided for in chapter 3 of the Code. It is strictly confined, in its application, to claims against the estate of deceased persons, and has been almost universally adopted as part of the probate law of the United States. It is commonly termed the statute of nonclaims, and its purpose is to settle the affairs of the estate with dispatch, so that residue may be delivered to the persons entitled thereto without their being afterwards called upon to respond in actions for claims, which, under the ordinary statute of limitations, have not yet prescribed. The object of the law in fixing a definite period within which claims must be presented is to insure the speedy settling of the affairs of a deceased person and the early delivery of the property of the estate in the hands of the persons entitled to receive it. (Estate of De Dios, 24 Phil. Rep., 573.) Due possibly to the comparative shortness of the period of limitation applying to such claims as compared with the ordinary statute of limitations, the statute of nonclaims has not the finality of the ordinary statute of limitations. It may be safely said that a saving provision, more or less liberal, is annexed to the statute of nonclaims in every jurisdiction where is found. In this country its saving clause is found in section 690, which reads as follows: On application of a creditor who has failed to present his claim, if made within six months after the time previously limited, or, if a committee fails to give the notice required by this chapter, and such application is made before the final settlement of the estate, the court may, for cause shown, and on such terms as are equitable, renew the commission and allow further time, not exceeding one month, for the committee to examine such claim, in which case it shall personally notify the parties of the time and place of hearing, and as soon as may be make the return of their doings to the court. If the committee fails to give the notice required, that is a sufficient cause for reconvening it for further consideration of claims which may not have been presented before its final report was submitted to the court. But, as stated above, this is not the case made by the plaintiff, as the committee did give the notice required by law. Where the proper notice has been given the right to have the committee recalled for the

consideration of a belated claim appears to rest first upon the condition that it is presented within six months after the time previously limited for the presentation of claims. In the present case the time previously limited was six months from July 23, 1907. This allowed the plaintiff until January 23, 1908, to present his claims to the committee. An extension of this time under section 690 rested in the discretion of the court. (Estate of De Dios, supra.) In other words, the court could extend this time and recall the committee for a consideration of the plaintiff's claims against the estate of justice required it, at any time within the six months after January 23, 1908, or until July 23, 1908. Plaintiff's petition was not presented until July 14, 1909. The bar of the statute of nonclaims is an conclusive under these circumstances as the bar of the ordinary statute of limitations would be. It is generally held that claims are not barred as to property not included in the inventory. (Waughop vs. Bartlett, 165 III., 124; Estate of Reyes, 17 Phil. Rep., 188.) So also, as indicated by this court in the case last cited, fraud would undoubtedly have the same effect. These exceptions to the operation of the statute are, of course, founded upon the highest principles of equity. But what is the plea of the plaintiff in this case? Simply this: That he was laboring under a mistake of law - a mistake which could easily have been corrected had he sought to inform himself; a lack of information as to the law governing the allowance of claims against estate of the deceased persons which, by proper diligence, could have been remedied in ample to present the claims to the committee. Plaintiff finally discovered his mistake and now seeks to assert his right when they have been lost through his own negligence.Ignorantia legis neminem excusat. We conclude that the learned trial court made no error in refusing to reconvene the committee for the purpose of considering plaintiff's claims against the estate.chanroblesvirtualawlibrary chanrobles virtual law library In his second assignment of error the appellant insists that the court erred in dismissing his petition filed on November 21, 1910, wherein he asks that the administratrix be compelled to pay over to him the amounts mentioned in the will as debts due him. We concede all that is implied in the maxim, dicat testor et erit lex. But the law imposes certain restrictions upon the testator, not only as to the disposition of his estate, but also as to the manner in which he may make such disposition. As stated in Rood on Wills, sec. 412: "Some general rules have been irrevocably established by the policy of the law, which cannot be exceeded or transgressed by any intention of the testator, be it ever so clearly expressed." chanrobles virtual law library It may be safely asserted that no respectable authority can be found which holds that the will of the testator may override positive provisions of law and imperative requirements of public policy. (Page on Wills, sec. 461.) Impossible conditions and those contrary to law and good morals shall be considered as not imposed, . . . (Art. 792, Civil Code.) Conceding for the moment that it was the testator's desire in the present case that the debts listed by him in his will should be paid without referring them to a committee appointed by the court, can such a provision be enforced? May the provisions of the Code of Civil Procedure relating to the settlement of claims against an estate by a committee appointed by the court be superseded by the contents of a will? chanrobles virtual law library It is evident from the brief outline of the sections referred to above that the Code of Civil Procedure has established a system for the allowance of claims against the estates of decedents. Those are at least two restrictions imposed by law upon the power of the testator to dispose of his property, and which pro tanto restrict the maxim that "the will of the testator law: (1) His estate is liable for all legal obligations incurred by him; and (2) he can not dispose of or encumber the legal portion due his heirs by force of law. The former take precedence over the latter. (Sec. 640, Code Civ, Proc.) In case his estate is sufficient they must be paid. (Sec, 734, id.) In case the estate is insolvent they must be paid in the order named in section 735. It is hardly necessary to say that a provision in an insolvent's will that a certain debt be paid would not entitle it to preference over other debts. But, if the express mention of a debt in the will requires the administrator to pay it without reference to the committee, what assurance is there, in the case of an insolvent estate, that it will not take precedence over preferred debts?chanrobles virtual law library If it is unnecessary to present such claim to the committee, the source of nonclaims is not applicable. It is not barred until from four to ten years, according to its classification in chapter 3 of the Code of Civil

Procedure, establishing questions upon actions. Under such circumstances, when then the legal portion is determined? If, in the meantime the estate has been distributed, what security have the differences against the interruption of their possession? Is the administrator required to pay the amount stipulated in the will regardless of its correctness? And, if not, what authority has he to vise the claim? Section 706 of the Code of Civil Procedure provides that an executor may, with the approval of the court, compound with a debtor of deceased for a debt due the estate, But he is nowhere permitted or directed to deal with a creditor of the estate. On the contrary, he is the advocate of the estate before an impartial committee with quasi-judicial power to determine the amount of the claims against the estate, and, in certain cases, to equitably adjust the amounts due. The administrator, representing the debtor estate, and the creditor appear before this body as parties litigant and, if either is dissatisfied with its decision, an appeal to the court is their remedy. To allow the administrator to examine and approve a claim against the estate would put him in the dual role of a claimant and a judge. The law in this jurisdiction has been so framed that this may not occur. The most important restriction, in this jurisdiction, on the disposition of property by will are those provisions of the Civil Code providing for the preservation of the legal portions due to heirs by force of law, and expressly recognized and continued in force by sections 614, 684, and 753 of the Code of Civil Procedure. But if a debt is expressly recognized in the will must be paid without its being verified, there is nothing to prevent a partial or total alienation of the legal portion by means of a bequest under a guise of a debt, since all of the latter must be paid before the amount of the legal portion can be determined.chanroblesvirtualawlibrary chanrobles virtual law library We are aware that in some jurisdictions executors and administrators are, by law, obligated to perform the duties which, in this jurisdiction, are assign to the committee on claims; that in some other jurisdictions it is the probate court itself that performs these duties; that in some jurisdictions the limitation upon the presentment of claims for allowance is longer and, possibly, in some shorter; and that there is a great divergence in the classification of actions which survive and actions which do not survive the death of the testator. It must be further remembered that there are but few of the United States which provide for heirs by force of law. These differences render useless as authorities in this jurisdiction many of the cases coming from the United States. The restriction imposed upon the testator's power to dispose of his property when they are heirs by force of law is especially important. The rights of these heirs by force law pass immediately upon the death of the testator. (Art. 657, Civil Code.) The state intervenes and guarantees their rights by many stringent provisions of law to the extent mentioned in article 818 of the Civil Code. Having undertaken the responsibility to deliver the legal portion of the net assets of the estate to the heirs by force of law, it is idle to talk of substituting for the procedure provided by law for determining the legal portion, some other procedure provided in the will of the testator. The state cannot afford to allow the performance of its obligations to be directed by the will of an individual. There is but one instance in which the settlement of the estate according to the probate procedure provided in the Code of Civil Procedure may be dispense with, and it applies only to intestate estates. (Sec. 596, Code Civ. Proc.) A partial exemption from the lawful procedure is also contained in section 644, when the executor or administrator is the sole residuary legatee. Even in such case, and although the testator directs that no bond be given, the executor is required to give a bond for the payment of the debts of the testator. The facts of the present case do not bring it within either of this sections. We conclude that the claims against the estate in the case at bar were enforceable only when the prescribed legal procedure was followed.chanroblesvirtualawlibrary chanrobles virtual law library But we are not disposed to rest our conclusion upon this phase of the case entirely upon legal grounds. On the contrary we are strongly of the opinion that the application of the maxim, "The will of the testator is the law of the case," but strengthens our position so far as the present case is concerned. It will ordinarily be presumed in construing a will that the testator is acquainted with the rules of law, and that he intended to comply with them accordingly. If two constructions of a will or a part thereof are possible, and one of these constructions is consistent with the law, and the other is inconsistent, the presumption that the testator intended to comply with the law will compel that construction which is consistent with the law to be adopted. (Page on Wills, sec. 465.) Aside from this legal presumption, which we believe should apply in the present case as against any construction of the will tending to show an intention of the testator that the ordinary legal method of probating claims should be dispensed with, it must be remembered that the testator knows that the execution of his will in no way affects his control over his property. The dates of his will and of his death

may be separated by a period of time more or less appreciable. In the meantime, as the testator well knows, he may acquire or dispose of property, pay or assume additional debts, etc. In the absence of anything to the contrary, it is only proper to presume that the testator, in his will, is treating of his estate at the time and in the condition it is in at his death. Especially is this true of his debts. Debts may accrue and be paid in whole or in part between the time the will is made and the death of the testator. To allow a debt mentioned in the will in the amount expressed therein on the ground that such was the desire of the testator, when, in fact, the debt had been wholly or partly paid, would be not only unjust to the residuary heirs, but a reflection upon the good sense of the testator himself. Take the present case for example. It would be absurd to say that the testator knew what the amount of his just debt would be at a future and uncertain date. A mere comparison of the list of the creditors of the testator and the amounts due them as described in his will, with the same list and amounts allowed by the committee on claims, shows that the testator had creditors at the time of his death not mention in the will at all. In other instances the amounts due this creditors were either greater or less than the amounts mentioned as due them in the will. In fact, of those debts listed in the will, not a single one was allowed by the committee in the amount named in the will. This show that the testator either failed to list in his will all his creditors and that, as to those he did include, he set down an erroneous amount opposite their names; or else, which is the only reasonable view of the matter, he overlooked some debts or contracted new ones after the will was made and that as to others he did include he made a partial payments on some and incurred additional indebtedness as to others.chanroblesvirtualawlibrarychanrobles virtual law library While the testator expresses the desire that his debts be paid, he also expressly leaves the residue of his estate, in equal parts, to his children. Is it to be presumed that he desired to overpay some of his creditors notwithstanding his express instructions that his own children should enjoy the net assets of his estate after the debts were paid? Again, is the net statement of the amount due some of his creditors and the omission all together of some of his creditors compatible with his honorable and commendable desire, so clearly expressed in his will, that all his debts be punctually paid? We cannot conceive that such conflicting ideas were present in the testator's mind when he made his will.chanroblesvirtualawlibrary chanrobles virtual law library Again, suppose the testator erroneously charged himself with a debt which he was under no legal or even moral obligation to pay. The present case suggests, if it does not actually present, such a state of affairs. Among the assets of the estate mentioned in the will is a parcel of land valued at P6,500; while in the inventory of the administratrix the right to repurchase this land from one Isidro Santos is listed as an asset. Counsel for the administratrix alleges that he is prepared to prove that this is the identical plaintiff in the case at bar; that the testator erroneously claimed the fee of this land in his last will and stated Santos' rights in the same as a mere debt due him of P5,000; that in reality, the only asset of the testator regard to this land was the value of the right to repurchase, while the ownership of the land, subject only to that right of redemption, belonged to Santos; that the right to repurchase this land expired in 1907, after the testator's death. Assuming, without in the least asserting, that such are the underlying facts of this case, the unjust consequences of holding that a debt expressly mentioned in the will may be recovered without being presented to the committee on claims, is at once apparent. In this supposed case, plaintiff needed only wait until the time for redemption of the land had expired, when he would acquired an absolute title to the land, and could also have exacted the redemption price. Upon such a state of facts, the one item of P5,000 would be a mere fictitious debt, and as the total net value of the estate was less than P15,000, the legal portion of the testator's children would be consumed in part in the payment of this item. Such a case cannot occur if the prescribed procedure is followed of requiring of such claims be viseed by the committee on claims. The direction in the will for the executor to pay all just debts does not mean that he shall pay them without probate. There is nothing in the will to indicate that the testator in tended that his estate should be administered in any other than the regular way under the statute, which requires "all demands against the estates of the deceased persons," "all such demands as may be exhibited," etc. The statute provides the very means for ascertaining whether the claims against the estate or just debts. (Kaufman vs. Redwine, 97 Ark., 546.) See also Collamore vs. Wilder (19 Kan., 67); O'Neil vs. Freeman (45 N. J. L., 208).chanroblesvirtualawlibrary chanrobles virtual law library

The petition of the plaintiff filed on November 21, 1910, wherein he asks that the administratrix be compelled to pay over to him the amounts mentioned in the will as debts due him appears to be nothing more nor less than a complaint instituting an action against the administratrix for the recovery of the sum of money. Obviously, the plaintiff is not seeking possession of or title to real property or specific articles of personal property. When a committee is appointed as herein provided, no action or suit shall be commenced or prosecute against the executor or administrator upon a claim against the estate to recover a debt due from the state; but actions to recover the seizing and possession of real estate and personal chattels claimed by the estate may be commenced against him. (Sec. 699, Code Civ. Proc.) The sum of money prayed for in the complaint must be due the plaintiff either as a debt of a legacy. If it is a debt, the action was erroneously instituted against the administratrix. Is it a legacy? chanrobles virtual law library Plaintiff's argument at this point becomes obviously inconsistent. Under his first assignment of error he alleges that the committee on claims should have been reconvened to pass upon his claim against the estate. It is clear that this committee has nothing to do with legacies. It is true that a debt may be left as a legacy, either to the debtor (in which case it virtually amounts to a release), or to a third person. But this case can only arise when the debt is an asset of the estate. It would be absurd to speak of a testator's leaving a bare legacy of his own debt. (Arts. 866, 878, Civil Code.) The creation of a legacy depends upon the will of the testator, is an act of pure beneficence, has no binding force until his death, and may be avoided in whole or in part by the mere with whim of the testator, prior to that time. A debt arises from an obligation recognized by law (art. 1089, Civil Code) and once established, can only be extinguished in a lawful manner. (Art. 1156, id.) Debts are demandable and must be paid in legal tender. Legacies may, and often do, consist of specific articles of personal property and must be satisfied accordingly. In order to collect as legacy the sum mentioned in the will as due him, the plaintiff must show that it is in fact a legacy and not a debt. As he has already attempted to show that this sum represents a debt, it is an anomaly to urge now it is a legacy.chanroblesvirtualawlibrary chanrobles virtual law library Was it the intention of the testator to leave the plaintiff a legacy of P7,454? We have already touched upon this question. Plaintiff's claim is described by the testator as a debt. It must be presumed that he used this expression in its ordinary and common acceptation; that is, a legal liability existing in favor of the plaintiff at the time the will was made, and demandable and payable in legal tender. Had the testator desired to leave a legacy to the plaintiff, he would have done so in appropriate language instead of including it in a statement of what he owed the plaintiff. The decedent's purpose in listing his debts in his will is set forth in the fourth clause of the will, quoted above. There is nothing contained in that clause which indicates, even remotely, a desire to pay his creditors more than was legally due them. A construction leading to a legal, just and sensible result is presumed to be correct, as against one leading to an illegal, unnatural, or absurd effect. (Rood on Wills, sec. 426.) The testator, in so many words, left the total net assets of his estate, without reservation of any kind, to his children per capita. There is no indication that he desired to leave anything by way of legacy to any other person. These considerations clearly refute the suggestion that the testator intended to leave plaintiff any thing by way of legacy. His claim against the estate having been a simple debt, the present action was improperly instituted against the administratrix. (Sec. 699, Code Civ. Proc.) chanrobles virtual law library But it is said that the plaintiff's claims should be considered as partaking of the nature of a legacy and disposed of accordingly. If this be perfect then the plaintiff would receive nothing until after all debts had been paid and the heirs by force of law had received their shares. From any point of view the inevitable result is that there must be a hearing sometime before some tribunal to determine the correctness of the debts recognized in the wills of deceased persons. This hearing, in the first instance, can not be had before the court because the law does not authorize it. Such debtors must present their claims to the committee, otherwise their claims will be forever barred.chanroblesvirtualawlibrary chanrobles virtual law library

For the foregoing reasons the orders appealed from are affirmed, with costs against the appellant.chanroblesvirtualawlibrary chanrobles virtual law library Torres, Carson and Araullo, JJ., concur. Separate Opinions chanrobles virtual law library MORELAND, J., dissenting:chanrobles virtual law library The decision of the court in this case produces, in my humble opinion, a serious miscarriage of justice. It causes the appellant to lose more than P7,000, a debt against the respondent estate, which debt, but a few months before his death, was specifically recognized by the testator in his will as a debt due and owing to petitioner and which he, in said will, ordered and directed his executor to pay "religiously." chanrobles virtual law library If I could find justification for such a decision either in the proceedings as they are unfolded by the record or in the law as laid down in the Code of Civil Procedure, I would, of course, acquiesce. Far from finding such justification, I am met so far as my judgment can discern, with facts of record which demonstrate conclusively that the decision is erroneous in fact.chanroblesvirtualawlibrary chanrobles virtual law library The opinion seeks to demonstrate that a creditor, whose claim is recognized by the highest possible authority, the debtor himself, in the most solemn instrument known to the law, his last will and testament, as legal, just and valid, must lose that claimbecause the validity thereof has not been established by the committee. And this inspite of the fact that, upon the record of the case, no one interested in the estate disputes the claim or challengers its validity. Take this proposition in connection with the fact that the committee to hear claims had not been discharged, that the estate has not been finally closed but is still pending settlement, and that, therefore, there exist not a single reason, in equity or justice, why the claimant should not be permitted to present his claim, if that is necessary, and we have before us a situation which indicates how far the decision has gone.chanroblesvirtualawlibrary chanrobles virtual law library It should be carefully observed that the petitioner Isidro Santos, was defeated in this litigation upon the ground, and the sole ground, that he did not present his claim to the committee, in pursuance of a notice to creditors published under an order dated July 23, 1907, and that he, therefore, lost the right to enforce the claim; that the notice having been published from July 25, 1907, to August 16, 1907, petitioner's application on July 14, 1909, for the extension of time for the presentation of claims to the old committee or the appointment of a new committee for that purpose, was too late and was properly denied, and that his motion made November 21, 1909, praying that the executor be compelled to carry out the wishes of the testator and pay the claim, was also properly denied.chanroblesvirtualawlibrary chanrobles virtual law library In my judgment the decision is erroneous from whatever point viewed: chanrobles virtual law library 1. Even if it be assumed that the notice to creditors should have been published in accordance with the order of July 23, 1907, the record is entirely lacking in legal evidence to establish the publication which the law requires under that order. That being so the claim is not barred.chanroblesvirtualawlibrary chanrobles virtual law library 2. I contend, and the record shows, that the notice should not have been published in accordance with the order of July 23, 1907, but in pursuance of an order of January 8, 1908, which was an order for a new publication, and, being later order, necessarily vacated and annulled the order of July 23, 1907, and all proceedings thereunder relative to the matters included in said order of January 8, 1908; that publication was concededly never made under and in pursuance of that order and that, for that reason, the petitioner's claim is not barred.chanroblesvirtualawlibrary chanrobles virtual law library 3. The claim was not one that must be submitted to a committee, being recognized as a legal and valid debt by the will and the testator having ordered his executor to pay it. The motion made to require the

executor to pay the claim should have been heard by the court.chanroblesvirtualawlibrary chanrobles virtual law library The facts of this case, as shown by the record, are: chanrobles virtual law library Don Lucas de Ocampo made a will July 26, 1906. He died November 18, 1906. The will specifically named Isidoro Santos, the petitioner, a creditor of the testator, set out the specific amount due him, named an executor, and directed him to pay the claim "religiously." chanrobles virtual law library The will was probated July 15, 1907, and Leandra Manarang, the widow, appointed temporary administratrix. Her administration was terminated on July 23, 1907, and Cosme Naval, the person named in the will as executor, was, on that date, duly appointed executor. On the same day Pedro Abad Santos and Marcos Tancuaco were named the committee of appraisal and to her claims presented against the estate, the court making the following order: There having been heard the petition presented by Seor Cosme Naval, praying that he be appointed executor of the above named estate as provided in the will of the deceased Lucas de Ocampo; and also praying the appointment of a committee of appraisal consisting of Seores Pedro Abad Santos and Marcos Tancuaco: chanrobles virtual law library It is ordered that the said Cosme Naval may be and he hereby is appointed executor of the will of Lucas de Ocampo, deceased, the clerk being authorized to issue in favor of said Cosme Naval letters testamentary, the petitioner being first required to take the oath prescribed by law and to file a bond in the sum of P500 Philippine currency, with two sureties satisfactory to the court.chanroblesvirtualawlibrarychanrobles virtual law library It is also ordered that the special letters of administration issued temporarily in favor of the widow of the deceased, Leandra Manarang, remain without effect from this day.chanroblesvirtualawlibrary chanrobles virtual law library It is further ordered that Seores Pedro Abad Santos and Marcos Tancuaco be and they hereby appointed the committee of appraisal and claims of this estate. On the 28th of September, 1907, Naval was removed from office and Leandra Manarang named in his place. On December 3, same year, Pedro Abad Santos resigned from the committee to become the attorney for the estate and Donato Iturralde was appointed in his stead.chanroblesvirtualawlibrary chanrobles virtual law library Following these changes both in the office of executor and in that of the committee, on January 8, 1908, the court made an order which, in itself, is, in my judgment, a complete refutation of the decision in this case and demonstrates that a contrary judgment should have been rendered. That order, dated, as I have said, on January 8, 1908, and promulgated on that day, reads as follows: Whereas, the Hon. Julio Llorente, in decree dated December 3, 1907, appointed Seor Donato Iturralde, a resident of this city, to the office of committee of appraisal in the above-entitled proceeding: chanrobles virtual law library Therefore, and in compliance with the above-mentioned decree, Seor Donato Iturralde, a resident of this city, is appointed a member of the committee of appraisal and to hear the claims that may be presented against the property of this estate, which committee within thirty days from the date of said decree shall deliver a copy of the inventory to this court and another to the administratrix Seora Leandra Manarang, and within sixty days shall post a notice at the main door of this courthouse and in three public places in the municipality where the property of the said deceased is located, in which shall be stated the dates and places when and where the meetings of the committee will be held and notifying that creditors that they should present their claims within six months counting from the date of said notice; said notice, furthermore, to be published during three consecutive weeks in the newspaper "El Imparcial," having general circulation in this province.chanroblesvirtualawlibrary chanrobles virtual law library

Given to-day, the 8th of January, 1908, by order of the Hon. Julio Llorente, Judge of the Fourth Judicial District and of this Province of Pampanga. On July 14, 1908, the committee filed a report, the only report in the record, in which appears the following statement: The undersigned, committee of appraisal and claims against the above estate, presents a to the court the following list of all claims presented against the said estate since the 25th day of July, 1907, in which date the first publication to creditors was made. The publication under which committee was reporting was begun under the order of July 23, 1907, which was vacated and annulled by the order of January 8, 1908, which, by reason of the changes in the offices of executor and committee, ordered a new and different notice to the creditors.chanroblesvirtualawlibrary chanrobles virtual law library On July 14, 1909, petitioner herein made an application to the court to reopen the sessions of the committee and permit him to present the claim mentioned in the will. This was denied November 27, 1909, the court simply saying: This cause having been heard and the parties having presented their arguments, the motion is denied by reason of the lapse of time. On November 21, 1910, the petitioner moved the court that, the testator having recognized and legalized the debt in his will and having ordered his executor to pay the same to the petitioner, said executor be ordered and directed to pay said claim to the petitioner pursuant to the testator's directions. This motion was denied April 26, 1911,upon the same ground as the other motion.chanroblesvirtualawlibrary chanrobles virtual law library The appeal is from both of these orders and brings up so much of the record as is pertinent to these questions.chanroblesvirtualawlibrary chanrobles virtual law library The court has held on this appeal: chanrobles virtual law library 1. That the motion last mentioned is an action. The opinion says: "The petition of the plaintiff filed on November 21, 1910, . . . appears to be nothing more or less than a complaint instituting an action against the administratrix for the recovery of the sum of money." After discussing this phase of the case the court concludes: "His claim against the estate having been a simple debt, the present action was improperly instituted against the administratrix (sec. 699, Code of Civ. Proc.)." This is one of the grounds of the decision.chanroblesvirtualawlibrary chanrobles virtual law library 2. That the recognition of the debt in the will and the direction of the testator to pay the same have no significance in the law.chanroblesvirtualawlibrary chanrobles virtual law library 3. That, notwithstanding this recognition and direction, the claim should have been presented to the committee appointed to hear and determine claims against the estate.chanroblesvirtualawlibrary chanrobles virtual law library 4. That the claim was not presented to the committee.chanroblesvirtualawlibrary chanrobles virtual law library 5. That all of the formalities required by law relative to the notice to the creditors t present their claims were fully observed, the court saying that "the record affirmatively shows that the committee did make the publications required by law." chanrobles virtual law library 6. That the court below did not err in denying the motion to extend the time of the old committee or appoint a new one to the end that the claim in question might be presented.chanroblesvirtualawlibrary chanrobles virtual law library

7. That the court did not err in denying the motion to compel the executor to pay the claim in pursuance of the direction contained in the will.chanroblesvirtualawlibrary chanrobles virtual law library Laying aside for a moment those holdings of the court which declare that the claim is one which must be presented to and passed upon by a committee. I am compelled to differ from every other propositions and statement of fact appearing in the decision pertinent to the issue involved, except the single one that the claim was not presented to a committee. That it was not presented is conceded; indeed, that fact that it was not is the whole cause of this proceeding.chanroblesvirtualawlibrary chanrobles virtual law library I am compelled to believe that the statement of the decision that "the record affirmatively shows that the committee did make the publications required by law," is not quite in accordance with the record as I read it.chanroblesvirtualawlibrary chanrobles virtual law library The opinion does not refer me to any evidence of record which supports its statement. Where is this evidence, where is this record which "affirmatively shows?" I have been unable to find it. Here is all the evidence, if it may be called evidence, which I am able to find it in the record relative to the publication of the notices to the creditors: chanrobles virtual law library (a) An affidavit of the publisher of "El Imparcial" setting out that the notice to creditors attached to the affidavit and signed by Pedro Abad Santos (who before the completion of the publication, resigned) and Marcos Tancuaco, dated July 23, 1907, was published "three weeks from the 25th of July to the 16th of August, 1907." chanrobles virtual law library The notice referred to is as follows: The undersigned committee of appraisal hereby notifies the creditors of Lucas de Ocampo, deceased, and all other persons who have claims against the estate of said deceased, to present the same with vouchers within six months from the date of this notice to the committee, every Monday, between 4 and 5 o'clock p. m., at the dwelling house of Pedro A. Santos, Sagasta Street, San Fernando, Pampanga. Dated San Fernando, Pampanga, P. I., July 23, 1907. Signed: Pedro Abad Santos, committee. Marcos Tancuaco, committee. The defectiveness of the affidavit is apparent. It does not show whether the newspaper was daily, weekly, biweekly or monthly, or the day of the week or month on which published. It does not show that the notice was published three weeks successively, that is, once each week for three successive weeks, as required by law and the order of the court. So ambiguous is it that is might mean that the notice was published once, namely, three weeks from July 25. Passing, however, these defects, I note that the notice to creditors requires them to present their claims at the dwelling house of Pedro Abad Santos. It should be noted, as before stated, that this commissioner resigned before the expiration of the six months, thus making it necessary for creditors to present their claims and their proofs thereof to one who was not a member of the committee and to a man who, immediately on his resignation, became the attorney of the estate. This will become important when we later discuss the significance of the fact that the court, as already seen, on January 8, 1908, made a new order requiring that a new notice be given to creditors, to be published thereafter, thereby revoking the order of July 23, 1907, and annulling the notice to creditors above set out and then in course of publication.chanroblesvirtualawlibrary chanrobles virtual law library ( b) The remaining item of evidence which it is claimed tends to show that the notice to creditors was duly published is the reference made by the commissioners in their report to the court, above quoted, in which they say, referring to July 25, 19076, "on which date the first publication to creditors was made." chanrobles virtual law library This reference cannot be called evidence of publication, although the court accepts it as such. At most it refers and is limited, in terms, to the first publication. It has not the slightest reference to the other publications, if any.chanroblesvirtualawlibrary chanrobles virtual law library This, ( a) and ( b), is all evidence in the whole record relative to the publication of the notice to creditors. Admitting it all to be true and giving it all weight possible, does it establish "affirmatively that the

committee did make the publications required by law?" I am of the opinion not The law requires, in addition to the publication in the newspapers, that "the committee . . . shall post a notice in four public places in province stating the times and places of their meetings, and the time limited for creditors to present their claims . . . and give such other notice as the court directs.chanroblesvirtualawlibrary chanrobles virtual law library Where is there in the record evidence showing that this was done? Nowhere. As I read the record, there is not a syllable of such evidence in all the case.chanroblesvirtualawlibrary chanrobles virtual law library I, therefore, am forced to the conclusion that the declaration of the court that "the record affirmatively shows that the committee did make the publications required by law" is without sufficient evidence to support it.chanroblesvirtualawlibrary chanrobles virtual law library After a thorough reading of the record, I am reluctantly forced to a further conclusion, namely, that instead of there being evidence in the case showing the publication required by law. there is evidence showing the precise contrary.chanroblesvirtualawlibrary chanrobles virtual law library Let us remember that the first order of the court directing the committee to publish notice to creditors was issued July 23, 1907. It conceded that publication in a newspaperof some sort was started under that order. But, the court, evidently becoming satisfied that, under all the circumstances, the publication under that order would not be sufficient to give creditors fair notice, on January 8, 1908, and before the publication under the first order, if there was ever started in reality a publication under that order, was completed, made a second order of publication. The reason for this order was evidently that, during the six months succeeding the date of the notice which it is claimed was published under the first order, three persons held the office of executor, the complexion of the committee itself was changed, and the member of the committee at whose house the notice required the claims and vouchers to be presented resigned from the committee and became the attorney for the estate. Pedro Abad Santos having ceased to be a member of the committee and having become the attorney for the estate, and the notice to the creditors requiring that claims with their vouchers to be presented at his house, there was no longer a proper place designated where creditors could present their claims. Furthermore, the continual change in the executorship already noted may have resulted in grave prejudice to the estate if the estate were to be held responsible for all claims presented during the time those changes were taking place, it being the duty of the executor, under the law, to be present at the hearing on claims and defend the estate against those which deemed unjust, and the frequent change in the office, thereby bringing the persons unfamiliar with what had gone before, certainly not tending to efficiency.chanroblesvirtualawlibrary chanrobles virtual law library All these facts, taken in connection with the defectiveness of the affidavit of the publication of the notice, and the fact that there was no posting of the notices as required by law, that the notice itself was defective in that it required the claims to be presented within six months from the date of the notice instead of the date of the last publication thereof, as the law, properly interpreted, requires, all these facts, I say, undoubtedly led the court to believe that the previous proceedings relative to claims should be annulled and that a new order of publication should be made. Accordingly, on January 8, 1908, as aforesaid, an order was made and entered as above set forth, requiring a new publication by a new committee. This order had the effect, of course, of vacating and annulling the previous order covering the same subject matter.chanroblesvirtualawlibrary chanrobles virtual law library It is undisputed that no publication has ever been made or even attempted under this order of January 8, 1908. The only publication referred to in the record or in the opinion in this case is that under the order of July 23, 1907. No one contends that any other publication has ever been made or attempted.chanroblesvirtualawlibrary chanrobles virtual law library That this order of January 8, 1908, was considered the governing order in the case and that it was an annullment of all prior proceedings and orders relative to the same subject matter, is clear. If notice had been given as provided by the order, the six months' term, according to the order, would have expired some time in July, 1908. This, of course, was clearly understood by the court, and we find the court, ever anxious to have the estate settled as quickly as possible under the law, making the following order on the 2d day of April, 1908:

It is hereby ordered that the administratrix present her inventory before the 1st day of May and the committee its report within the time provided by law, and that the administratrix present her account before the 1st day of August, 1908. This order demonstrates conclusively that the court believed that the committee was giving the notice to creditors as provided by order of January 8, 1908, and not that of July 23, 1907; for, if the notice was to be given under the latter and the publication began July 25, 1907, then the time within which the committee was to report expired in January, 1908 (see opinion), long before the order of April 2, 1908, was issued (Code Civ. Proc., sec. 693) and the requirement therein that the committee report "within the time provided by law" was idle. The court evidently believed that the notice was being published under the order of January 8, 1908, that the six months' period would expire in July, that the committee could therefore report to the administratrix the number and amounts of the claims presented and allowed, and that she could, therefore render her account before the 1st day of August, as in the order of April 2 required. This order is strictly inconsistent from every point of view with the idea that the order of July 23, 1907, was in force and that publication of the notice to creditors was proceeding thereunder.chanroblesvirtualawlibrary chanrobles virtual law library I, therefore, say that the record demonstrates not only that the declaration of the court that "the record affirmatively shows that the committee did make the publications required by law" is without sufficient foundation in fact, but also that the contrary is true, namely, that no publication was ever made under the only order under which it could be legally made.chanroblesvirtualawlibrary chanrobles virtual law library I contend, furthermore, that this proceeding is not an action against an executor to recover a debt against the estate of his testator. The decision of the court that it is an action and not being one of those which, under the Code, can be brought against an executor and must be dismissed for that reason is, in my judgment, erroneous. I do not understand how a motion to compel an executor to comply with the directions in a will can be called an action to recover a debt in a sense that such motion is prohibited by law.chanroblesvirtualawlibrary chanrobles virtual law library Dealing with the second branch of the case, wherein the court holds that the debt should have been presented to a committee: chanrobles virtual law library The proposition that a debt which is recognized by the highest possible authority, the debtor himself, in then most solemn instrument known to the law and the one whose provisions are the most sacredly carried out by the courts, his last will and testament, which debt the testator, in his will, expressly ordered his executor to pay to the creditor by name, must be presented to the committee for them to determine whether it is a valid claim and whether it ought to be paid, is a proposition which appeals neither to my reason nor my sense of justice. There is no statute expressly requiring such presentation. There is none which by necessary implication requires it. To bring such a debt within the law requiring presentation to the committee, interpretation and construction must be invoked to such an extent as to shock if not violate the ordinary canons applicable thereto. This is particularly true when such interpretation and construction are resorted to deprive a creditor of a claim, the validity and justice of which is not only undisputed but unquestioned.chanroblesvirtualawlibrary chanrobles virtual law library There is no provision of the Code of Civil Procedure expressly requiring the presentation of any claim to a committee. Provision is made for the appointment of a committee which is authorized to hear certain classes of claims but nowhere is there an express provision requiring a creditor to present his claim. There is, to be sure, a section which provides (sec. 695) that if the creditor fails to present his claim, if it is a certain kind of claim, within the time provided in the law, it will be barred. It is therefore, gathered by implication that every creditor having a certain kind of claim must present it; but there is no provision expressly requiring it. Moreover, it must be carefully noted that onlycertain claims need to be presented to the committee and that only certain claims are barred provided they are not exhibited. Section 686 confers upon the committee whatever jurisdiction it may have with respect to the hearing of claims, apart from those which actions were begun against decedent in his lifetime. It provides that "they may try and decide upon claims, which by law survive against executors or administrators, except claims for the possession of or title to real state;" and under section 695 only those claims are barred which are " proper to be allowed by the committee." chanrobles virtual law library

We see then that the committee is authorized to take jurisdiction over those claims only which survive against an executor or administrator. The code does not define or declare "what claims survive against executor or administrators." It refers to certain actionswhich, having been commenced by the deceased in his lifetime, may be continued after his death by his executor or administrator. It nowhere tells us "what claims survive against executors or administrators, " or what claims are " proper to be allowed by the committee." We are unable to say, therefore, from the context of the Code itself what the authors thereof meant by the use of the phrases "claims which survive against executors or administrators" and which are "proper to be allowed by the committee." All that is clear is that it was the intention of the law to restrict the jurisdiction of the committee and keep it within certain limitations, and to that end used these limited expressions. It should be noted, however, that these limitations refer to claims and have no reference to actions begun against the deceased before his death. The distinction made in the Code between claims and actions begun against the decedent during his lifetime, and the respective provisions referring to those two subjects, is entirely lost sight of in the decision of the court. This being so, the following reasoning found in the decision, based upon the failure to distinguish between claims and actions begun against the deceased in his lifetime, involves a conclusion in no sense related to the premises from which it is deduced: Do plaintiff's claims fall within any of these sections? They are described in the will, as debts, There is nothing in the will to indicate that any or all of them are contingent claims, claims for the possession of or title to real property damages for injury to person or property, real or personal, or for the possession of specified articles of personal property. Nor is it asserted by the plaintiff that they do. The conclusion is that, they were claims proper to be considered by the committee. That there is no necessary relation between those two subjects is apparent. That an action for "money, debt, or damages" begun against the decedent in his lifetime must, under section 710, be discontinued upon his death "and the claim embraced in such action may be presented to the committee, who shall allow the party prevailing the cost of such action to the time of its discontinuance," does not necessarily mean that such claim, if no action had been begun upon it, is one which must be exhibited to the committee. Whether an action begun against the decedent in his lifetime survives or does not survive, has no necessary relation with the necessity of presenting a claim to the committee. Would it be logical to argue that because an action begun against the deceased did not survive, the claim upon which it is based cannot, therefore, be presented to the committee, or that because in action begun against the deceased in his lifetime did survive, that, therefore, the claim upon which it was based could and must be presented to the committee? Assuredly not.chanroblesvirtualawlibrary chanrobles virtual law library No general requirement that all claims must be presented to the committee appearing in the Code, and it affirmatively appearing that there was an intention to restrict the power of the committee in the hearing of claims, it necessarily follows that the conclusion reached by the court that all claims must be exhibited to the committee is pure inference and one but at all warranted by the provisions of the Code or by the rules of interpretation and construction, To me it is a conclusion absolutely necessary from the language of sections 686 and 695 that not all claims need to be exhibited. By express language these sections restrict the committee to the hearing of such claims as survive against executors or administrators and only those are barred which are proper to be presented to the committee.chanroblesvirtualawlibrary chanrobles virtual law library The answer to the question, does not claim at bar survive against executors or administrators, brings us to an exposition of the various fundamental error made by the court in holding that the debt in question is one which must be presented to the committee. One of them is involved in the declaration that the debt in question is a claim within the meaning of the law. In cases such as this it is proper and necessary to make a distinction between a claim and a debt. A debt is a claim which has been favorably passed upon by the highest authority to which in can in law be submitted and has been declared to be a debt. A claim, on the other hand, is a debt in embryo. It is a mere evidence of a debt and must pass through the process prescribed by law before it develops into what is properly called a debt. The debt in the case at bar never was a claim. By the act of the testator himself, it was raised to the dignity of a debt and it remains such and must be acted upon as such by the courts as well as by all other. It was by the testator selected from the mass of his obligations, which are correctly called claims, and treated to a process which developed it into a thing called a "debt" over which no committee has jurisdiction and with the due course of which it has no authority to interfere.chanroblesvirtualawlibrary chanrobles virtual law library

The second fundamental error, following naturally from the first, is found in the declaration of the court that the debt in question is a claim which survives against the executors or administrator and must, therefore, be exhibit to the committee. This error involves, in my humble opinion, a misunderstanding of the nature of a will imposes upon all persons executing it. A will is the testator speaking after death. Its provisions have substantially the same force and effect in the probate court as if the testator stood before the court in full life making the declarations by word of mouth as they appear in the will. That was the special purpose of the law in the creation of the instrument known as the last will and testament. Men wished to speak after they were dead and the law, by the creation of that instrument, permitted them to do so. It is a upon this theory and around this purpose that there has grown that body of the law which uniformly and universally declares that the words of the testator spoken in his will shall be sacredly attended by his executor and enforced by the court. It has been declared a fundamental maxim, the first greatest rule, the sovereign guide, the polestar, in giving effect to the will, that the intention of the testator as expressed in the will shall be fully and punctually observed. If by the use of clear and certain, his will explains itself, and all that the court can do is to give it effect. All doubts must be resolved in favor of the testator's having meant just what he said. His purpose may seem unjust, unnatural or absurd to us; yet, to refuse to execute it is to destroy it. As Chief Justice Marshall said: "That intent of the testator is the cardinal rule in the construction of wills; and if that intent can be clearly perceived, and is not contrary to some positive rule of law, it must prevail." (3 Peters, 346.) chanrobles virtual law library The intention of the testator is said in the recent Virginia case to be "the life and soul of a will" and if this intention is clear it must be govern with absolute sway. A will is not like a promissory note or a judgment or any other instrument which acknowledges or incorporates an obligation. Those instruments are mere evidences of a debt. A will is not, primarily, evidence of anything; it is the thing itself. It is not so much the evidenceof what the testator did or intended to do; it is then testator himself. The court has failed in this case to distinguish between a will and a promissory note, or a mortgage, so far as their legal effects are concerned, and the statement which I made early in this opinion, that the court has given no legal significance whatever to the fact that the instrument in which this debt was acknowledged and in which it was ordered paid was a last will and testament, is literally true. It has given the testamentary directions of the testator no more force, effect or significance than it gives to the words of a promissory note or a mortgage.chanroblesvirtualawlibrary chanrobles virtual law library The third fundamental error which the decision has fallen is that it is misconceives the duties of an executor and of a court relative to the provisions of the will. It is, of course, axiomatic that is the duty of the executor, under the direction of the court, to carry out punctually and with the utmost care every provision of the will. That is why he is named "executor." He is an "executor" of a will because he "executes" the will. When he refuses or neglects to perform that function he ceases to be an executor and becomes a perverter or destroyer. Section 640 provides that the estate of the decedent shall be disposed of according to his will and the bond to be given by an executor, prescribed in section 643, must contain a clause in which the executor agrees, and his bondsmen assure, that he will administer " according to the will of the testator" the estate which comes into his hands.chanroblesvirtualawlibrary chanrobles virtual law library Under the provisions of this will it is as much the duty of the executor to pay the debt here in litigation as it is to pay a legacy bequeathed by the will or to carry out a devise found therein. Of course, as we shall see later, if it appear to the executor that the debt in suit was paid, in whole or in part, as the case may be. In such case his refusal to pay will not be a refusal to carry out the will, but will be grounded in fact that the testator himself executed it prior to his demise. The proposition remains that the will must be executed; and the only excuse the executor can give for a refusal to execute it is that it has already been executed.chanroblesvirtualawlibrary chanrobles virtual law library It is nowhere claimed in this case, and it cannot be, for no proceeding has reached far enough to involve the fact, that this debt has been paid, and nowhere in the record has its validity or binding force upon the estate been challenged or even disputed. That being the case, upon the facts, as they stand before us, there is no excuse which the executor of the court can now offer why the debt in suit has not been paid.chanroblesvirtualawlibrary chanrobles virtual law library The fourth fundamental error into which the court has fallen in its decision is that it submits to the jurisdiction of a committee to hear claims the question of whether or not the provisions of the will are to

be executed. This, although, it seems to me, is strange upon its face, is precisely what the court has, in effect, done in its decision; for, if a debt expressly acknowledged in the will and specifically ordered paid therein, must be submitted to a committee, it means that they may, in the excercise of their judgment, refuse its payment. This, in turn, means that the provision of the will in relation thereto is annulled. By this process the committee may, therefore, annul an express and mandatory provision of a will which is as binding as a provision giving legacy or making a devise. It is to the probate court, and to it alone, that the law confides the power to annul and set aside provisions in wills. The executor himself may not do so. And the court itself may do so only after the very clearest demonstration that the provision violates a positive provision of law or is against the public policy of the state. In spite of this, it is the decision of this court that a committee of two or more persons, none of whom is a lawyer, none of whom may be even a business man, all of whom may be ignorant and inexperienced, may sit in an informal way, and with all the imperfections inherent in such a tribunal and the practice which governs its deliberations, may revoke a mandatory provision in the most solemn instrument known to law. The bare statement of such a proposition is, it seems to me, its clearest refutation.chanroblesvirtualawlibrary chanrobles virtual law library The fifth fundamental error into which the court has fallen follows naturally. As we have said, the decision give no significance to the fact that the debt at bar appears acknowledged and legalized in a last will and testament and that the testator therein solemnly ordered and directed his executor to pay it. Instead, the decision remands the creditor to the committee in exactly the same condition as any other creditor. He goes there with the burden of proof on him, with the necessity of establishing affirmatively and by a fair preponderance of the evidence the existence of the claim, the consideration therefore, and the fact that it has not been paid. There are laid upon him the restrictions and limitations imposed by section 383 of the Code of Civil Procedure, which stop his mouth as a witness under certain conditions. He is there with every burden, with every restriction upon him under which another creditors labors who has not a scrap of written evidence to support his claim. It is no adequate reply to say that he can put the will in evidence. He could do that with any other evidence that he might have. Moreover, that reply is a full admission of all that I have maintained, that the will is given no significance or value, as such, but is reduced to the mere function of being evidence to be passed upon by the committee. Furthermore, it is incumbent upon him to prove that the claim has not been paid and this is the very point which may be the thing most difficult to establish; and it is in relation to this that the restrictions and limitations imposed by the section referred to produce their greatest effect. This certainly cannot be law. It cannot be that the creditor whose debt is recognized as is the one at bar occupies a position no different from that of a creditor whose debt is not recognized. To contend the contrary, it seems to me, flies in the face not only of law and justice, but of common sense as well.chanroblesvirtualawlibrary chanrobles virtual law library The fact that a debt is mentioned in the will as one not satisfied has, at least, the effect of changing the burden of proof from the creditor to the estate. Instead of the creditor being required to establish the validity of the claim and the fact of nonpayment, it is incumbent upon the estate to show payment affirmatively. At the very least, recognition by the testator in his will should be given that much significance. The court does not even concede this. The provision before us, while not a provision for a legacy, has nevertheless the same force and effect; and as a legatee is not bound to show affirmatively his right to the legacy and as it is the duty of the executor to seek out the legatee and pay him the legacy, so it is not the duty of the creditor in this case to show affirmatively his right to the payment of the debt, but it is the duty of the executor, knowing nothing to the contrary, to seek out the creditor and pay him as the testator has ordered him to do. If he knows anything to the contrary the burden is on him to demonstrate it.chanroblesvirtualawlibrary chanrobles virtual law library These considerations naturally lead us to the point so strongly urged in the decision, and which I regard, for the purpose urged, without force, that the debt may have been paid between the time of the making of the will and the death of the testator; and that, therefore, it ought not to be paid by the executor until the question of payment is properly determined. No one is disputing that proposition. But its admission does not all mean that, to determine whether the claim has been paid or not, it must be presented to the committee. If it is the duty of the court, through the executor, to see if the will is conscientiously executed, what more natural, if not absolutely necessary, than to submit to the court whether the provision recognizing a debt ordering its payment should be carried out. What argument can be adduced, which does not fly squarely in the face of reason, to establish the proposition that a court has no business to determine whether aparticular provision of a will shall be carried out or not, when its supreme duty is to

require the punctual and precise execution of the whole will ? How can it be maintained that, whether or not a particular provision in a will shall be carried out must be submitted not to the court, which has exclusive jurisdiction of the whole will, but to a committee of two or more ignorant and inexperienced persons? If it is the duty of the court to see that the will is executed as a whole, then there must go with that duty the power to determine whether a particular provision ordering the payment of a specific debt shall be executed or not. But the determination of this question is the determination of the question of payment. Why take from the court, which is the whole body that has the power to determine whether provisions in wills shall be carried out, the determination of whether a debt recognized in a particular provision has or has not been paid and turn it over to a committee such as I have described? chanrobles virtual law library It is thus seen that the proposition given so great weight in the decision, namely, that the debt should be submitted to the committee in order to determine whether it has bee paid, is without point or force. The court should make that determination far better than a committee. The practice leading to the determination by a court as to whether or not a given provision in a will shall be carried out is very simple, much simpler than is the proceeding before a committee. The executor finding that the will orders him to pay a certain debt and having no knowledge of his own that such debt has already been paid, presents his final account to the court, in which he asserts that he is going to pay the debt in accordance with the provision of the will. Notice is given to all parties interested in the estate. They appear. If they or any of them know of any reason why the provision of the will should not be carried out, they may manifest it. Upon that manifestation a hearing will be had and the court will determine whether or not the provision of the will has already been executed, in the whole or in part, and upon that determination he will rest a judgment in which he will order the executor to carry out the provision of the will by the payment of the debt or he will declare that the provision has already been carried out by payment. What simpler than this and what more conducive to justice? Who can say that the submission of the same question to a committee is better than the submission to a court? It might as well be urged that the legalization of the will, itself were better left to a committee than to a court; for, if whether or not the provisions of a will are to be carried out must be left to a committee, then whether it is a will at all or not may as well be left to the same authority.chanroblesvirtualawlibrary chanrobles virtual law library The attempt of the court to meet the proposition that the will of the testator is the law of the case not satisfy my judgment. It is claimed that the will of the testator is not the law of the case where direct violation of a provision of law; and that the Court of Civil Procedure requiring that all claims presented to the committee, the testator has no right to except a particular debt or any debt from operation of the Code.chanroblesvirtualawlibrary chanrobles virtual law library does it is in shall be the

In the first place, the Code of Civil Procedure does not require that all claims shall be presented to the committee. It expressly limits the claims which must be exhibited. In the second place, the claim that there is anything contradictory between the will of the testator in this particular case and the provision of the Code of Civil Procedure is, in my judgment, rather fanciful than real. What is the purpose of requiring the exhibition of a claim to a committee? Simply to save the estate from being defrauded. There is absolutely no other reason which is behind the law requiring such a presentation. Is it claimed that a debtor may not pay a claim during his lifetime? If not, and the will is but a testator speaking after death, may he not pay a debt in that manner? If the man who is the estate solemnly acknowledges a debt and offers to pay it, who shall say that the estate is defrauded if the debt be paid? And if the estate is not defrauded, neither the spirit nor the letter of the law which has for its object the protection of the estate has been violated or evaded, but has, on the contrary, been fully observed.chanroblesvirtualawlibrary chanrobles virtual law library I do not discuss or express an opinion relative to the proposition that the statute of nonclaims runs against a provision of a will, or suggests the results which may follow such doctrine.chanroblesvirtualawlibrary chanrobles virtual law library The judgment should be reversed and the probate court ordered to hear petitioner's motion of the 21st of November and decide it upon the merits.

G.R. No. L-29407 July 29, 1983 ESTATE OF AMADEO MATUTE OLAVE, as represented by JOSE S. MATUTE, Judicial CoAdministrator in Sp. Proc. No. 25876, Court of First Instance of Manila, Petitioner, vs. HONORABLE MANASES G. REYES, Presiding Judge of Branch III, Court of First Instance of Davao, Davao City; SOUTHWEST AGRICULTURAL MARKETING CORPORATION also known as (SAMCO); CARLOS V. MATUTE, as another Administrator of the Estate of Amadeo Matute Olave, Sp. Proc. No. 25876 CFI, Manila; and MATIAS S. MATUTE, as former Co-Administrator of the Estate of Amadeo Matute Olave, Sp. Proc. No. 25876, CFI, Manila, Respondents. Jose W. Diokno for petitioner.chanrobles virtual law library Wingerfortis F. Escudero for respondents. RELOVA, J.: In this petition for certiorari, the estate of Amadeo Matute Olave, represented by Jose S. Matute, Judicial Administrator in Sp. Proc. No. 25876, of the then Court of First Instance of Manila, assails the Order, dated November 10, 1967, of the respondent judge, approving the "Amicable Settlement" submitted by the parties in Civil Case No. 4623 of the then Court of First Instance of Davao, 16th Judicial District, Branch III, and prays that the said Order be set aside.chanroblesvirtualawlibrarychanrobles virtual law library The petition alleged that the estate of Amadeo Matute Olave is the owner in fee simple of a parcel of land containing an area of 293,578 square meters, situated in sitio Tibambam, barrio Tibambam, municipality of Sigaboy (now Governor Generoso), province of Davao, and covered by Original Certificate of Title No. 0-27 of the Registry of Deeds of Davao Province; that in April 1965 herein private respondent Southwest Agricultural Marketing Corporation (SAMCO), as plaintiff, filed Civil Case No. 4623 with the respondent Court of First Instance of Davao against respondents, Carlos V. Matute and Matias S. Matute, as defendants, in their capacities as co-administrators of the estate of Amadeo Matute Olave, for the collection of an alleged indebtedness of P19,952.11 and for attorney's fees of P4,988.02; that on May 8, 1965, defendants Carlos V. Matute and Matias S. Matute in said Civil Case No. 4623, filed an answer denying their lack of knowledge and questioning the legality of the claim of SAMCO; that on October 25, 1966 in Sp. Proc. No. 25876, the then Court of First Instance of Manila, Branch IV, issued an order directing the administrators to secure the probate court's approval before entering into any transaction involving the seventeen (17) titles of the estate, of which the property described in OCT No. 0-27 is one of them; that on October 20, 1967, the parties (plaintiff and defendants) in Civil Case No. 4623 of the Court of First Instance of Davao, submitted to the respondent court an Amicable Settlement whereby the property of the estate covered by OCT No. 0-27 of Davao was conveyed and ceded to SAMCO as payment of its claim; that the said Amicable Settlement signed by the herein respondents was not submitted to and approved by the then Court of First Instance of Manila, Branch IV, in Sp. Proc. No. 25876, nor notice thereof made to the beneficiaries and heirs in said special proceedings; that on November 10, 1967, respondent court, despite the opposition of the other parties who sought to intervene in Civil Case No. 4623 and despite the utter lack of approval of the probate court in Manila, approved the said Amicable Settlement and gave the same the enforceability of a court decision which, in effect, ceded the property covered by OCT No. 0-27, containing an area of 293,578 square meters and with an assessed value of P31,700.00 to SAMCO in payment of its claim for only P19,952.11; and, that if the said Order of respondent dated November 10, 1967 is not set aside, the same will operate as a judgment that "conveys illegally and unfairly, the property of petitioner-estate without the requisite approval of the probate court of Manila, which has the sole jurisdiction to convey this property in custodia legis of the estate. (par. 16, Petition).chanroblesvirtualawlibrarychanrobles virtual law library Made to answer, herein respondent SAMCO and respondent judge, among others, contend that the Amicable Settlement need not be approved by the probate court, "the same having been entered into in another independent action and in another court of co-equal rank. Article 2032 of the Civil Code applies only to extrajudicial compromise entered into by the administrators of the estate. In the alternative, lack of approval of the probate court of the Amicable Settlement does not render it null and void, but at most

voidable, which must be the subject matter of a direct proceeding in the proper Court of First Instance." (p. 60, Rollo)chanrobles virtual law library In said Civil Case No. 4623 for sum of money, plaintiff SAMCO and defendants Carlos V. Matute and Matias S. Matute, in their capacities as judicial administrators of the estate of Amado Matute Olave in Special Proceeding No. 25876, Court of First Instance of Manila, Branch IV, submitted the following Amicable Settlement: 1. That defendants in their capacity as judicial administrators of the Estate of Amadeo Matute, hereby submit and acknowledge that the said Estate of Amadeo Matute is justly indebted to plaintiff in the total sum of P28,403.02 representing the principal account of P19,952.11 and in the sum of P8,450.91 as attorney's fees, damages, interest and costs;chanrobles virtual law library 2. That at present the defendant estate is devoid of or does not have any funds with which to pay or settle the aforestated obligation in favor of the plaintiff, and that being so, the defendant estate through the undersigned administrators, decides to pay the plaintiff by way of conveying and ceding unto the plaintiff the ownership of a certain real property owned by the defendant estate now under the administration of the said undersigned administrators;chanrobles virtual law library 3. That plaintiff hereby accepts the offer of defendants of conveying, transferring and ceding the ownership of the above described property as full and complete payment and satisfaction of the total obligation of P28,403.02;chanrobles virtual law library 4. That the defendant estate, through the undersigned administrators hereby agree and bind the defendant estate to pay their counsel Atty. Dominador Zuho, of the Zufio Law Offices the sum of Eight Thousand (P8,000.00) Pesos by way of Attorney's Fee;chanrobles virtual law library 5. That the parties herein waive an other claims which they might have against one another.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, premises considered, it is respectfully prayed that this Honorable Court approves the foregoing settlement and that judgment be rendered transferring the said real property covered by Original Certificate of Title No. 0-27 to plaintiff Southwest Agricultural Marketing Corporation and that a new transfer certificate of title be issued to said plaintiff. (pp. 25-26, Rollo) Section 1, Rule 87 of the Rules of Court, provides that "no action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; ..." The claim of private respondent SAMCO being one arising from a contract may be pursued only by filing the same in the administration proceedings in the Court of First Instance of Manila (Sp. Proc. No. 25876) for the settlement of the estate of the deceased Amadeo Matute Olave; and the claim must be filed within the period prescribed, otherwise, the same shall be deemed "barred forever." (Section 5, Rule 86, Rules of Court).chanroblesvirtualawlibrarychanrobles virtual law library The purpose of presentation of claims against decedents of the estate in the probate court is to protect the estate of deceased persons. That way, the executor or administrator will be able to examine each claim and determine whether it is a proper one which should be allowed. Further, the primary object of the provisions requiring presentation is to apprise the administrator and the probate court of the existence of the claim so that a proper and timely arrangement may be made for its payment in full or by pro-rata portion in the due course of the administration, inasmuch as upon the death of a person, his entire estate is burdened with the payment of all of his debts and no creditor shall enjoy any preference or priority; all of them shag share pro-rata in the liquidation of the estate of the deceased.chanroblesvirtualawlibrarychanrobles virtual law library It is clear that the main purpose of private respondent SAMCO in filing Civil Case No. 4623 in the then Court of First Instance of Davao was to secure a money judgment against the estate which eventually ended in the conveyance to SAMCO of more than twenty-nine (29) hectares of land belonging to the estate of the deceased Amadeo Matute Olave in payment of its claim, without prior authority of the

probate court of Manila, in Sp. Proc. No. 25876, which has the exclusive jurisdiction over the estate of Amadeo Matute Olave. It was a mistake on the part of respondent court to have given due course to Civil Case No. 4623, much less issue the questioned Order, dated November 10, 1967, approving the Amicable Settlement.chanroblesvirtualawlibrarychanrobles virtual law library Section 1, Rule 73 of the Rules of Court, expressly provides that "the court first taking cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts." (Emphasis supplied). The law is clear that where the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the probate court.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the petition for certiorari is GRANTED, and the Order, dated November 10, 1967, of the respondent court approving the Amicable Settlement of the parties in Civil Case No. 4623 of the then Court of First Instance of Davao, is hereby SET ASIDE.chanroblesvirtualawlibrarychanrobles virtual law library SO ORDERED. Teehankee (Chairman), Melencio-Herrera, Plana, Escolin and Gutierrez, Jr., JJ., concur.chanroblesvirtualawlibrarychanrobles virtual law library Vasquez, J., is on leave.

[G.R. NO. 127165 : May 2, 2006] SALONGA HERNANDEZ & ALLADO, Petitioner, v. OLIVIA SENGCO PASCUAL and THE HONORABLE COURT OF APPEALS, Respondents. DECISION TINGA, J.: Petitioner, a professional law partnership, brings forth this Petition for Review assailing the Decision 1 of the Court of Appeals dated 22 December 1995. The appellate court had affirmed two orders promulgated by the Malabon Regional Trial Court (RTC), Branch 72 (Probate Court), in Sp. Proc. No. 136-MN, entitled "In the Matter of Testate Estate of Doa Adela Pascual, Dr. Olivia S. Pascual, Executrix." The case actually centers on two estate proceedings, that of Doa Adela Pascual (Doa Adela) and the other, her husband Don Andres Pascual's (Don Andres), who predeceased her. Don Andres died intestate, while Doa Adela left behind a last will and testament. The dispute over the intestate estate of Don Andres has spawned at least two cases already settled by this Court.2 On 1 December 1973, an intestate proceeding for the settlement of the estate of Don Andres was commenced by his widow Doa Adela before the then Court of First Instance, now Regional Trial Court of Pasig, Branch 23 (Intestate Court), docketed as Sp. Proc. No. 7554. Apart from his wife, who bore him no children, Don Andres was survived by several nephews and nieces from his full-blood and half-blood brothers.3This proceeding proved to be the source of many controversies, owing to the attempts of siblings Olivia and Hermes Pascual, acknowledged natural children of Don Andres's brother, Eligio, to be recognized as heirs of Don Andres. Olivia and Hermes Pascual procured the initial support of Doa Adela to their claims. However, on 16 October 1985, the other heirs of Don Andres entered into a Compromise Agreement over the objections of Olivia and Hermes Pascual, whereby three-fourths (3/4) of the estate would go to Doa Adela and one-fourth (1/4) to the other heirs of Don Andres, without prejudice to the final determination by the court or another compromise agreement as regards the claims of Olivia and Hermes Pascual.4 Subsequently, the Intestate Court denied the claims of Olivia and Hermes Pascual. Said denial was eventually affirmed by this Court in 1992 in Pascual v. Pascual-Bautista,5 applying Article 992 of the Civil Code. In the meantime, Doa Adela died on 18 August 1987, leaving behind a last will and testament executed in 1978, designating Olivia Pascual as the executrix, as well as the principal beneficiary of her estate. The will also bequeathed several legacies and devises to several individuals and institutions. Olivia Pascual then engaged the services of petitioner in connection with the settlement of the estate of Doa Adela. Their agreement as to the professional fees due to petitioner is contained in a letter dated 25 August 1987, signed by Atty. Esteban Salonga in behalf of petitioner and Olivia Pascual. It is stipulated therein, among others, that the final professional fee "shall be 3% of the total gross estate as well as the fruits thereof based on the court approved inventory of the estate. Fruits shall be reckoned from the time of [Olivia Pascual's] appointment as executrix of the estate. The 3% final fee shall be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate."6 On 26 August 1987, private respondent, represented by petitioner, commenced a petition for the probate of the last will and testament of Doa Adela before the Probate Court, docketed as Sp. Proc. No. 136-MN and raffled to Branch 72 presided by Judge Benjamin M. Aquino, Jr. The petition was opposed by a certain Miguel Cornejo, Jr. and his siblings, who in turn presented a purported will executed in 1985 by Doa Adela in their favor.7 After due trial, on 1 July 1993, the Probate Court rendered a Decision8 allowing probate of the 1978 Last Will and Testament of Doa Adela and disallowing the purported 1985 Will. Letters testamentary were issued to Olivia Pascual.9 Cornejo attempted to appeal this decision of the Probate Court, but his notice of

appeal was denied due course by the Probate Court, said notice "not having been accompanied by any record on appeal as required under the Interim Rules and by Rule 109 of the Rules of Court." 10 On 27 July 1993, petitioner filed a Notice of Attorney's Lien equivalent to three percent (3%) of the total gross estate of the late Doa Adela S. Pascual as well as the fruits thereof based on the court approved inventory of the estate, pursuant to the retainer agreement signed by and between petitioner and Olivia S. Pascual, on 25 August 1987. In an Order dated 4 November 1993, the Probate Court ruled that petitioner's "notice of attorney's lien, being fully supported by a retainer's contract not repudiated nor questioned by his client Olivia S. Pascual, is hereby noted as a lien that must be satisfied chargeable to the share of Olivia S. Pascual."11 This was followed by another Order, dated 11 November 1993, wherein it was directed "that notice be x x x given, requiring all persons having claims for money against the decedent, Doa Adela S. Vda. de Pascual, arising from contracts, express or implied, whether the same be due, not due, or contingent, for funeral expenses and expenses of the last sickness of the said decedent, and judgment for money against her, to file said claims with the Clerk of Court at Malabon, Metro Manila, within six (6) months from November 4, 1993."12 Accordingly, on 22 November 1993, petitioner filed a Motion to Annotate Attorney's Lien on Properties of the Estate of Doa Adela Vda. de Pascual.13 It was at this stage, on 19 January 1994, that the Intestate Court rendered a Decision in Sp. Proc. No. 7554, finally giving judicial approval to the aforementioned 1985 Compromise Agreement, and partitioning the estate of Don Andres by adjudicating one-fourth (1/4) thereof to the heirs of Don Andres and threefourths (3/4) thereof to the estate of Doa Adela. The Intestate Court also awarded attorney's fees to Atty. Jesus I. Santos, equivalent to 15% of the three-fourths (3/4) share of the estate of Doa Adela.14 Olivia Pascual filed a petition for annulment of the award of attorney's fees with the Court of Appeals, but the same was denied, first by the appellate court, then finally by this Court in its 1998 decision in Pascual v. Court of Appeals.15 On 26 April 1994, petitioner filed a Motion for Writ of Execution for the partial execution of petitioner's attorney's lien estimated at P1,198,097.02. The figure, characterized as "tentative," was arrived at based on a Motion to Submit Project Partition dated 26 October 1993 filed by Olivia Pascual, which alleged the gross appraised value of Doa Adela's estate at P39,936,567.19. This sum was in turn derived from the alleged value of the total estate of Don Andres, three-fourths (3/4) of which had been adjudicated to Doa Adela. At the same time, petitioner noted that the stated values must be considered as only provisional, considering that they were based on a July 1988 appraisal report; thus, the claim for execution was, according to petitioner, without prejudice to an updated appraisal of the properties comprising the gross estate of Doa Adela.16 On 29 April 1994, Olivia Pascual, through Atty. Antonio Ravelo, filed her comment and/or opposition to the motion for the issuance of a writ of execution on attorney's fees. She argued that a lawyer of an administrator or executor should charge the individual client, not the estate, for professional fees. Olivia Pascual also claimed, citing jurisprudence17, that the counsel claiming attorney's fees should give sufficient notice to all interested parties to the estate, and that such was not accomplished by petitioner considering that no notices were given to the several legatees designated in Doa Adela's will.18 It was further argued that the motion for execution was premature, considering that the proceedings before the Intestate Court had not yet been terminated; that the computation of the figure of P1,198,097.02 was erroneous; and that the enforcement of the writ of execution on the undivided estate of Don Andres would prejudice his other heirs entitled to one-fourth (1/4) thereof. On 2 June 1994, the Probate Court issued the first assailed order denying the motion for writ of execution in view of the fact that "the bulk of the estate of the late Doa Adela S. Vda. De Pascual is still tied-up with the estate of the late Don Andres Pascual, the proceedings over which and the final disposition thereof with respect to the partition and segregation of what is to form part of the estate of the late Doa Adela S. Vda. De Pascual is pending with another court sitting in Pasig, Metro Manila, and for having been prematurely filed."19 On 14 November 1994, Olivia Pascual, filed with the Probate Court a Motion to Declare General Default and Distribution of Testamentary Dispositions with Cancellation of Administrator's Bond. It was noted

therein that no creditor had filed a claim against the estate of Doa Adela despite due notice published pursuant to Section 1, Rule 86 of the Rules of Court. The Probate Court was also informed of the fact that the proceedings before the Intestate Court had already been terminated by reason of the 14 January 1994 Decision rendered by the latter court. It was also stated "that the corresponding estate taxes had been paid as evidenced by the Estate Tax Return filed with the Bureau of Internal Revenue, and of the Certificate of Authority issued by the said agency."20Interestingly, it was also manifested that two of the properties that formed part of the estates of the spouses, "the Ongpin Property" and "the Valenzuela Property," had in fact already been partitioned between the estate of Doa Adela and the heirs of Don Andres at the ratio of three-fourths (3/4) and one-fourth (1/4), respectively. In response, petitioner filed a Comment/Manifestation praying that an order be issued: (1) ordering the annotation of the attorney's lien on the properties comprising the estate of Doa Adela Pascual; (2) a writ of partial execution be issued for the satisfaction of the attorney's lien of the undersigned counsel [herein petitioner] in relation to the Ongpin and Valenzuela properties for the amount of P635,368.14,without prejudice to the issuance of a writ of execution after the re-appraisal of the present market value of the estate and the determination of the amount due to [petitioner] as attorney's fees; (3) ordering the appointment of a reputable appraisal company to re-appraise the present market value of the estate of Doa Adela Pascual including the fruits thereof for the purpose of determining the value of the attorney's fees of [petitioner]; andcralawlibrary (4) after the re-appraisal of the estate of Doa Adela Pascual a writ of execution be issued for the full satisfaction and settlement of the attorney's lien of [petitioner]. 21 On 17 March 1995, the Probate Court issued an order which denied petitioner's motion for a re-appraisal of the property and the issuance of a partial writ of execution "for being prematurely filed as there is no exact estate yet to be inventoried and re-appraised, assuming re-appraisal would be proper, because the bulk of the estate subject of this case, as far as this court is concerned, has not yet been turned over to the executrix or to the court itself."22 Through a petition for certiorari and mandamus, petitioner assailed the two orders of the Probate Court denying its motion for the immediate execution, partial or otherwise, of its claim for attorney's fees: the 2 June 1994 Order and the 17 March 1995 Order. Nonetheless, the twin orders of the RTC were affirmed by the Court of Appeals, effectively precluding petitioner's attempt to execute on its attorney's lien. The appellate court noted that the attorney's lien issued by the Probate Court was chargeable only to the share of Olivia Pascual, and not to the estate of Doa Adela, since it was Olivia Pascual who entered into the agreement with petitioner for the payment of attorney's fees in connection with the settlement of the estate of Doa Adela. Citing Lacson v. Reyes,23 the Court of Appeals asserted that as a rule an administrator or executor may be allowed fees for the necessary expenses he has incurred but he may not recover attorney's fees from the estate. The Court of Appeals likewise noted that in the retainer agreement between petitioner and Olivia Pascual, it is stipulated that "the 3% final fee shall be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate." 24 On this score, the Court of Appeals ruled that as the petition before it did not show "that an agreement on the distribution of properties of the estate of Doa Adela S. Pascual has been submitted and approved by the probate court,"25 the filing of the motion for execution and that of the motion for re-appraisal of the market value of the estate were both premature. Petitioner sought to reconsider the Decision of the Court of Appeals, but in vain. 26Hence this petition. Petitioner argues that as held in Occea v. Marquez,27 the counsel seeking to recover attorney's fees for legal services to the executor or administrator is authorized to file a petition in the testate or intestate

proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration.28 Lacson, it is alleged, was inappropriately cited, since that case involved an executor who concurrently was a lawyer who subsequently claimed attorney's fees as part of the expenses of administration. Petitioner also claims that the decision of the probate court admitting Doa Adela's will to probate sufficiently satisfies the condition in the Retainer Agreement that the final fee be payable "upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate," the court-approved will comprising the agreement referred to in the contract. Petitioner also takes exception to the Probate Court's finding that "the bulk of the estate subject of this case, as far as this [c]ourt is concerned, has not been turned over to the executrix or to the [c]ourt itself," on which the appellate court predicated its ruling that the motion for a writ of execution was premature. Petitioner submits that the Probate Court ineluctably has jurisdiction over the estate of Doa Adela, and has necessarily assumed control over the properties belonging to the said estate. Thus, petitioner continues, there is no longer need to await the turnover of the properties involved in the intestate estate of Don Andres which constitute part of the testate estate of Doa Adela since the Probate Court and the Intestate Court have concurrent jurisdiction over these properties as they have not yet been physically divided. Petitioner refers to the averment made by Olivia Pascual before the Probate Court that the proceedings before the Intestate Court had already been terminated, and that the proceeds of the sale of the Ongpin Property and the Valenzuela Property had in fact been already divided based on the three-fourths (3/4) to one-fourth (1/4) ratio between the estate of Doa Adela and the heirs of Don Andres. Petitioner further points out that the Probate Court had authorized and approved the sale of the Ongpin Property, yet refused to allow the partial execution of its claim for attorney's fees. Finally, petitioner asserts that the Probate Court erred in refusing to grant the prayer seeking the reappraisal of the property of Doa Adela's estate. Such re-appraisal, so it claims, is necessary in order to determine the three percent (3%) share in the total gross estate committed to petitioner by reason of the Retainer Agreement. It appears that the thrust of the assailed Decision of the Court of Appeals is along these lines: that petitioner may directly claim attorney's fees only against Olivia Pascual and not against the estate of Doa Adela; and that petitioner's claim is also premature since contrary to the requisite stipulated in the Retainer Agreement, there is no court-approved agreement for the distribution of the properties of the estate of Doa Adela as yet. As an initial premise, we consider whether a lawyer who renders legal services to the executor or administrator of an estate can claim attorney's fees against the estate instead of the executor or administrator. Petitioner correctly cites Occea v. Marquez29as providing the governing rule on that matter as previously settled in the 1905 case ofEscueta v. Sy-Juilliong,30 to wit: The rule is that when a lawyer has rendered legal services to the executor or administrator to assist him in the execution of his trust, his attorney's fees may be allowed as expenses of administration. The estate is, however, not directly liable for his fees, the liability for payment resting primarily on the executor or administrator. If the administrator had paid the fees, he would be entitled to reimbursement from the estate. The procedure to be followed by counsel in order to collect his fees is to request the administrator to make payment, and should the latter fail to pay, either to (a) file an action against him in his personal capacity, and not as administrator, or (b) file a petition in the testate or intestate proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration. Whichever course is adopted, the heirs and other persons interested in the estate will have the right to inquire into the value of the services of the lawyer and on the necessity of his employment. 31 We reiterate that as a general rule, it is the executor or administrator who is primarily liable for attorney's fees due to the lawyer who rendered legal services for the executor or administrator in relation to the settlement of the estate. The executor or administrator may seek reimbursement from the estate for the sums paid in attorney's fees if it can be shown that the services of the lawyer redounded to the benefit of

the estate.32 However, if the executor or administrator refuses to pay the attorney's fees, the lawyer has two modes of recourse. First, the lawyer may file an action against the executor or administrator, but in his/her personal capacity and not as administrator or executor. Second, the lawyer may file a petition in the testate or intestate proceedings, asking the court to direct the payment of attorney's fees as an expense of administration. If the second mode is resorted to, it is essential that notice to all the heirs and interested parties be made so as to enable these persons to inquire into the value of the services of the lawyer and on the necessity of his employment. Lacson v. Reyes,33 cited by the appellate court, involved an executor who also happened to be the lawyer for the heirs who had filed the petition for probate. For that reason, that case is not squarely in point to the case at bar. It was pronounced therein that the administrator or executor of the estate cannot charge professional fees for legal services against the same estate, as explicitly provided under Section 7, Rule 85 of the Rules of Court of 1985.34 No such rule exists barring direct recovery of professional legal fees from the estate by the lawyer who is not the executor or administrator of the said estate. The limitations on such direct recovery are nonetheless established by jurisprudence, as evinced by the rulings in Escueta and Occea. The character of such claim for attorney's fees bears reiteration. As stated in Escueta, it partakes the nature of an administration expense. Administration expenses include attorney's fees incurred in connection with the administration of the estate.35 It is an expense attending the accomplishment of the purpose of administration growing out of the contract or obligation entered into by the personal representative of the estate, and thus the claim for reimbursement must be superior to the rights of the beneficiaries.36 Notwithstanding, there may be instances wherein the estate should not be charged with attorney's fees. If the costs of counsel's fees arise out of litigation among the beneficiaries thereof themselves or in the protection of the interests of particular persons, the estate generally cannot be held liable for such costs, although when the administrator employs competent counsel on questions which affect his/her duties as the administrator and on which he/she is in reasonable doubt, reasonable expenses for such services may be charged against the estate subject to the approval of the court.37It has also been held that an administrator who brings on litigation for the deliberate purpose of defrauding the legitimate heirs and for his own benefit is not entitled to reimbursement for counsel's fees incurred in such litigation.38 rbl rl l lbrr Clearly then, while the direct recovery of attorney's fees from the estate may be authorized if the executor refuses to pay such fees, and claimed through the filing of the proper petition with the probate court, such claim remains controvertible. This is precisely why Escueta and its progenies require that the petition be made with notice to all the heirs and interested parties. It is these perspectives that we apply to the case at bar. Notably, petitioner had filed both a Notice of Attorney's Lien and a Motion for Writ of Execution. These two pleadings have distinct character and must be treated as such. After Doa Adela's will had been admitted to probate, petitioner had initially filed a Notice of Attorney's Lien wherein it identified itself as "the attorney for the executrix named in the said will, Dra. Olivia S. Pascual", and sought to file its "claim and/or lien for attorney's fees equivalent to Three Percent (3%) of the total gross estate," pursuant to the 1987 Retainer Agreement. Copies of this Notice of Attorney's Lien were furnished Attys. Fortunato Viray, Jr. and Crisanto Cornejo, who appear on record to have served as counsels for the various oppositors to the probate of the 1978 will of Doa Adela. This Notice of Attorney's Lien was noted by the Probate Court in its Order of 4 November 1993, "as a lien that must be satisfied chargeable to the share of Olivia S. Pascual." It may be so that petitioner, in filing this Notice of Attorney's Lien, initially intended to hold Olivia Pascual, and not Doa Adela's estate, liable for the attorney's fees. It did identify itself as the lawyer of Olivia Pascual, and the Probate Court did note that the lien be satisfied chargeable to the share of the executor. Yet it must also be noted that such lien, as it is, is only contingent on the final settlement of the estate of Doa Adela, at such time, since the Retainer Agreement on which the lien is hinged provides that the final fee "be payable upon approval by the court of the agreement for the distribution of the properties to the

court designated heirs of the estate."39 This is also made clear by the order noting the lien, which qualified that said lien was chargeable only to the share of Olivia Pascual, hence implying that at the very least, it may be claimed only after her share to Doa Adela's estate is already determinate. In rendering its assailed Decision, the Court of Appeals relied on this qualification made by the Probate Court that the lien for attorney's fees was chargeable only to the share of Olivia Pascual. Yet the Notice of Attorney's Lien only seeks to serve notice of the pendency of the claim for attorney's fees, and not the payment of such fees itself. On its own, the Notice of Attorney's Lien cannot serve as the basis for the Probate Court to authorize the payment to petitioner of attorney's fees. On the other hand, Escueta and its kindred cases do explicitly recognize the recourse for the lawyer to directly make the claim for attorney's fees against the estate, not the executor or administrator. The filing of the Notice of Attorney's Lien and the qualificatory character of the rulings thereon, do not preclude the resort to the mode of recovery against the estate as authorized by jurisprudence. Clearly then, we disagree with the opinion of the Court of Appeals that attorney's fees can be claimed only against the share of Olivia Pascual. The instant case is rooted in an incomplete attempt to resort to the second mode of recovery of attorney's fees as authorized in Escueta, originating as it did from the denial of petitioner's Motion for Writ of Execution, and not the Notice of Attorney's Lien. The Motion did expressly seek the payment of attorney's fees to petitioner. Escueta andOccea, among other cases, did clearly lay down the manner under which such fees may be paid out even prior to the final settlement of the estate as an administration expense directly chargeable to the estate itself. The critical question in the present petition is thus whether this Motion for Writ of Execution satisfies the requisites set in Escueta for a claim for attorney's fees directly chargeable against the estate. It does not. The fact that the prayer for attorney's fees was cast in a motion and not a petition should not impede such claim, considering that the motion was nonetheless filed with the Probate Court. However, the record bears that the requisite notice to all heirs and interested parties has not been satisfied. Doa Adela's will designated 19 other individuals apart from Olivia Pascual, and four (4) different institutions as recipients of devises or legacies consisting of real properties, jewelries, and cash amounts. Yet only Olivia Pascual was served with a copy of the Motion for Writ of Execution, the motion which effectively sought the immediate payment of petitioner's attorney's fees. As early as 29 April 1994, Olivia Pascual, in opposing the Motion for Writ of Execution, already pointed out that petitioner had failed to give sufficient notice to all interested parties to the estate, particularly the several devisees and legatees so named in Doa Adela's will. Such notice is material to the other heirs to Doa Adela's estate. The payment of attorney's fees, especially in the amount of 3% of the total gross estate as sought for by petitioner, substantially diminishes the estate of Doa Adela and may consequently cause the diminution of their devises and legacies. Since these persons were so named in the very will itself and the action for probate which was filed by petitioner itself, there is no reason why petitioner could not have given due notice to these persons on its claim for attorney's fees. The requisite notice to the heirs, devisees, and legatees is anchored on the constitutional principle that no person shall be deprived of property without due process of law. 40 The fact that these persons were designated in the will as recipients of the testamentary dispositions from the decedent establishes their rights to the succession, which are transmitted to them from the moment of the death of the decedent.41 The payment of such attorney's fees necessarily diminishes the estate of the decedent, and may effectively diminish the value of the testamentary dispositions made by the decedent. These heirs, devisees, and legatees acquire proprietary rights by reason of the will upon the moment of the death of the decedent, incipient or inchoate as such rights may be. Hence, notice to these interested persons of the claims for attorney's fees is integral, so as to allow them to pose any objections or oppositions to such claim which, after all, could lead to the reduction of their benefits from the estate. The failure to notify the other heirs, devisees or legatees, to the estate of Doa Adela likewise deprives these interested persons of the right to be heard in a hearing geared towards determining whether petitioner was entitled to the immediate payment of attorney's fees. Notably, petitioner, in filing its Motion

for Writ of Execution, had initially set the hearing on the motion on 29 April 1994, but one day prior to the scheduled hearing, gave notice instead that the motion was being submitted for the consideration of the Probate Court without further argument.42 Evidently, petitioner did not intend a full-blown hearing to ensue on whether it was entitled to the payment of attorney's fees. Yet the claim for attorney's fees is hardly incontrovertible. That the Retainer Agreement set the attorney's fees at three percent (3%) of the gross estate does not imply that the basis for attorney's fees is beyond controversy. Attorney's fees in this case are in the nature of administration expenses, or necessary expenses in the first place. Any party interested in the estate may very well, in theory, posit a myriad of objections to the attorney's fees sought, such as for example, that these fees were not necessary expenses in the care, management, and settlement of the estate. Whether or not such basis for valid objections exists in this case is not evident, but the fact remains that all the parties interested in the estate, namely the other devisees and legatees, were deprived of the opportunity to raise such objections as they were not served notice of the Motion for Writ of Execution. The instant claim for attorney's fees is thus precluded by the absence of the requisite notices by petitioner to all the interested persons such as the designated heirs, devisees, legatees, as required by the jurisprudential rule laid down in Escueta. However, the Court of Appeals held that it was the prematurity of the claim for attorney's fees that served as the fatal impediment. On this point, the Court does not agree. Again, the remaining peripheral questions warrant clarification. Escueta itself provides for two alternative approaches through which counsel may proceed with his claim for attorney's fees. The first involves a separate suit against the executor or administrator in the latter's personal capacity. The second approach is a direct claim against the estate itself, with due notice to all interested persons, filed with the probate court. In the same vein, the existence of the Retainer Agreement between petitioner and Olivia Pascual allows petitioner two possible causes of action on which to claim attorney's fees in connection with the administration of the estate of Doa Adela. The first possible cause of action pivots on the Retainer Agreement, which establishes an obligation on the part of Olivia Pascual to pay the final fee of 3% of the gross total estate of Doa Adela, payable upon approval by the Probate Court of the agreement for the distribution of the properties to the court - designated heirs of the estate. Necessarily, since the recovery of attorney's fees is premised on the Retainer Agreement any award thereupon has to await the final ascertainment of value of the gross total estate of Doa Adela, as well as the approval by the Probate Court of the agreement for the distribution of the properties. The Retainer Agreement makes it clear that the final payment of attorney's fees is contingent on these two conditions, 43 and the claim for attorney's fees based on the Retainer Agreement cannot ripen until these conditions are met. Moreover, it cannot be escaped that the Retainer Agreement was entered into between petitioner and Olivia Pascual prior to the filing of the probate petition, and that at such time, she had no recognized right to represent the estate of Doa Adela yet. This circumstance further bolsters our opinion that if petitioner insists on the judicial enforcement of the Retainer Agreement, its proper remedy, authorized by law and jurisprudence, would be a personal action against Olivia Pascual, and not against the estate of Doa Adela. If this were the recourse pursued by petitioner, and Olivia Pascual is ultimately held liable under the Retainer Agreement for attorney's fees, she may nonetheless seek reimbursement from the estate of Doa Adela if she were able to establish that the attorney's fees paid to petitioner were necessary administration expenses. The second or alternative recourse is the direct claim for attorney's fees against the estate, as authorized under Escueta. The character of this claim is not contractual in nature, but rather, as a reimbursement for a necessary expense of administration, and it will be allowed if it satisfies the criteria for necessary expenses of administration. Its entitlement can be established by the actual services rendered by the lawyer necessary to the accomplishment of the purposes of administration, and not necessarily by the contract of engagement of the attorney's services.

By filing their claim directly against the estate of Doa Adela, petitioner has clearly resorted to this second cause of action. There are consequent advantages and disadvantages to petitioner. Since the claim arises irrespective of the contingencies as stipulated in the Retainer Agreement, the attorney's fees may be collected against the estate even before the final determination of its gross total value or the final approval of the project of partition. As earlier stated, such claim for reimbursement is superior to the right of the beneficiaries to the estate, and as such, there is need to finally determine the respective shares of the beneficiaries before attorney's fees in the nature of administration expenses may be paid out. The one distinct disadvantage, however, is that the Retainer Agreement cannot be deemed binding on the estate or the Probate Court since the estate is not a party to such contract. This would not preclude the Probate Court from enforcing the provisions of the Retainer Agreement if, in its sound discretion, the terms of payment therein are commensurate to the value of the actual services necessary to the administration of the estate actually rendered by petitioner. Yet if the Probate Court does choose to adopt the Retainer Agreement as binding on the estate of Doa Adela, petitioner may again be precluded from immediate recovery of attorney's fees in view of the necessity or precondition of ascertaining the gross total value of the estate, as well as the judicial approval of the final agreement of partition. In any event, whether the claim for attorney's fees was pursued through a separate suit against Olivia Pascual (in her personal capacity) for the enforcement of the Retainer Agreement, or against the estate of Doa Adela as reimbursement for necessary administration expenses, it remains essential that a hearing be conducted on the claim. In either case too, the hearing will focus on the value of the services of the petitioner and the necessity of engaging petitioner as counsel. We reiterate that the direct claim against the estate for attorney's fees must be made with due notice to the heirs, devisees, and legatees. The failure of petitioner to give such notice renders its present claim inefficacious for now. Indeed, there is sufficient cause to dismiss outright petitioner's Motion for Writ of Immediate Execution filed with the Probate Court, for its failure to notify therein the other persons interested in the estate of Doa Adela. Nonetheless, to authorize said outright denial at this stage could unduly delay the settlement of the estate of Doa Adela, considering the likelihood that petitioner would again pursue such claim for attorney's fees as the right to which is affirmed by law and jurisprudence. Hence, in order not to unduly protract further the settlement of the estate of Doa Adela, the Court deems it proper instead to mandate the Probate Court to treat the Motion for Writ of Immediate Execution as a petition seeking a court order to direct the payment of attorney's fees as expenses of administration, but subject to the condition that petitioner give due notice to the other designated devisees and legatees so designated in the will of the claim prior to the requisite hearing thereon. Petitioner may as well seize such opportunity to formally amend or reconfigure its motion to a petition to direct payment of attorney's fees. Once this step is accomplished, there should be no impediment to petitioner's claim for recovery of attorney's fees as reimbursement for necessary administration expenses, within the terms established by law, jurisprudence, and this decision. One final note. Petitioner's final prayer before this court is that it be issued a partial writ of execution, consistent with its position before the Probate Court that it is already entitled to at least a partial payment of its attorney's fees. This prayer cannot obviously be granted at this stage by the Court, considering the fatal absence of due notice to the other designated beneficiaries to the estate of Doa Adela. Still, we do not doubt that the Probate Court, within its discretion, is capacitated to render the award of attorney's fees as administration expenses either partially or provisionally, depending on the particular circumstances and its ultimate basis for the determination of the appropriate attorney's fees. WHEREFORE, the petition is GRANTED IN PART. The Decision of the Court of Appeals dated 22 December 1995 and the Orders of the Regional Trial Court of Malabon, Branch 72, dated 2 June 1994 and 17 March 1995 are hereby SET ASIDE insofar as said orders denied petitioner's Motion for Writ of Immediate Execution dated 26 April 1994. Petitioner is hereby directed to set for hearing its claim for attorneys fees, giving due notice thereof to all the heirs, devisees, and legatees designated in the 1978 Last Will and Testament executed by Doa Adela Pascual. The Regional Trial Court is directed to treat petitioner's aforesaid motion as a PETITION for the payment of attorney's fees as expenses of administration, and after due hearing resolve the same with DISPATCH, conformably with this decision. No pronouncement as to costs.