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LIM V DIAZ-MILLAREZ 18 SCRA 371 October 19, 1966; REGALA

FACTS - Cirilo Lim, claiming to be a nephew of the late Jose Millarez who died intestate filed a petition for his appointment as judicial administrator of the estate of the deceased. - The petition alleged that the deceased left no relatives such as descendants, ascendants or surviving spouse, except collaterals. - Basilisa Diaz-Millarez, claiming to be a widow of the deceased filed an opposition on two grounds: 1. that the petitioner has an adverse interest in the estate; and 2. that the properties of the estate are the subject matter of a litigation between her as plaintiff and Cirilo Lim as defendant - When the case was called for hearing, both parties manifested the existence of a litigation between them over the properties of the estate. - TC dismissed petition. - Failing in his motion for the reconsideration, petitioner Lim, brought the case to the CA which certified the appeal to SC. - In the Civil Case: Diaz-Millarez sought to recover from Lim 1/2 of the total amount of P22,000 allegedly delivered to him by her and the deceased Millarez on various occasions and to declare her as the owner of 1/2 of the profits and gains derived therefrom, on the ground that Jose Millarez and she used to live as husband and wife for about 23 years and as such she is entitled to 1/2 of the property held in common by them. She asserted further that since she contributed capital and labor to the tobacco business in which she and the deceased were engaged and from which they gave P22,000 in cash to Lim, she would be entitled to 1/2 of the capital and 1/2 of the proceeds and profits derived from such capital. ISSUE WON Lim may be appointed as administrator of the estate of the deceased. HELD - NO. The claim which Basilisa has against Cirilo in the civil case is based on her declared right to one-half of the estate of the deceased.

- It cannot, therefore, be denied that Cirilo Lim, as a relative of the deceased has some interest adverse to that of Basilisa. Shown to have some liabilities to Basilisa and to the estate as a whole, Cirilo cannot compatibly perform the duties of an administrator. - In this jurisdiction, one is considered to be unsuitable for appointment as administrator when he has adverse interest of some kind or hostility to those immediately interested in the estate. - The determination of a person's suitability for the office of judicial administrator rests, to a great extent, in the sound judgment of the court exercising the power of appointment and said judgment is not to be interfered with on appeal unless the said court is clearly in error. Disposition Order appealed from affirmed.

believed it for the best interest of all concerned to appoint as administrator a disinterested third person, particularly in view of the fact that there was likely to be litigation between Marta Torres and the Chinese wife as to which is in fact his legal wife and entitled to an interest in the estate of the deceased Tan Po Pic. Disposition Judgment affirmed.

PARAS V NARCISO 35 PHIL 244 CARSON; November 16, 1916

FACTS: - The trial court denied probate of the will of Mariano Magsino on the ground that the wil was prepared and signed by the witnesses after his death. ISSUES: WON the oppositor in the probate of the will had sufficient interest to be allowed to maintain his opposition HELD: YES Ratio The admission to probate of a will may be opposed or contested by, and only by, persons having some interest in the estate which will be affected and concluded by the probate of the proposed will. However, the appellant herein did not make an objection in the trial court as to the intervention of the oppositor. Reasoning The mere fact that a stranger has been permitted to oppose or contest the probate of a will is not reversible error and does not invalidate the proceedings where no objection is interposed by any of the parties in interest .The judgment of the court in probate proceedings is not based on the fact that there is or is not opposition to the probate of the will but upon the production of evidence which discloses that there are or are not sufficient grounds for the probate of the will as propounded; and the reason for the rule excluding strangers from contesting the will, is not that thereby the court may be prevented from learning facts which would justify or necessitate a denial of probate, but rather that the courts and the litigants should not be molested by the intervention in the proceedings of persons with no interest in the estate which


34 Phil. 383; Moreland; March 24, 1916 FACTS -Two women are claiming to be the legal wife of deceased Tan Po Pic. Marta Torres objected to the appointment of any except herself. Juan Cailles Tan Poo, on behalf of the Chinese woman Yu Teng New, opposed the appointment of Marta Torres. -The probate court being unable to determine who, if either, was the lawful wife of the deceased, appointed a disinterested third person (Juan L. Javier) to act as administrator. -This appeal is taken by Marta Torres from that order of appointment. ISSUE WON the probate court may validly appoint a disinterested third person as the administrator of the estate HELD YES, the court had a right in view of the controversy between the women to name a disinterested third person as administrator and leave the controversy between them to be settled in the administration proceedings at the proper time. -The probate court did not find as a fact that there was a wife in China. The court considered the facts and circumstances as they were presented in the proceedings and upon the whole

would entitle them to be heard with relation thereto. - In the case at bar, no objection was made as to the intervention of the oppositor. Further, it is to be observed that the judgment of the court was based on evidence submitted by the oppositor. No objection was made on the ground that it was submitted by a stranger. Having been admitted to record without objection, and being competent, relevant and material, and conclusive in support of the judgment of the trial court, it would be absurd for us to hold that the judgment below erred in basing his judgment thereon, merely on the ground that on appeal it is made to appear or is admitted that the contestant had no interest in the estate. Whether the contestant had or had not any right to intervene, the evidence submitted at the trial without objection, conclusively sustains the findings of the trial judge on which he properly based his denial of probate.

-Court of First Instance dismissed the action for lack of interest in the estate. Said lack of interest was premised on the deed of transfer executed by Cipriano, regarding which the court declared itself without power to examine in said proceedings, collaterally, the alleged fraud, inadequacy of price and lesion that would render it rescissible or voidable. -Cipriano appeals relying on In Re Irene Santos. ISSUE WON an assignment by one heir of his share in the estate to a co-heir amounts to a partition needing approval by the settlement court to be effective and that the assigning heir does not lose his status as a person interested in the estate, even after said assignment is approved by the court. HELD Yes, but such does not apply to the case at bar. -The situation in the Santos case involves an assignment between co-heirs pendente lite, during the course of settlement proceedings, properly and validly commenced. At the time of said assignment, therefore, the settlement court had already acquired jurisdiction over the properties of the estate. As a result, any assignment regarding the same had to be approved by said court. And since the approval of the court is not deemed final until the estate is closed, the assigning heir remains an interested person in the proceedings even after said approval, which can be vacated, is given. In the present case, however, the assignment took place when no settlement proceedings was pending. The properties subject matter of the assignment were not under the jurisdiction of a settlement court. Allowing that the assignment must be deemed a partition as between the assignor and assignee, the same does not need court approval to be effective as between the parties. An extra judicial partition is valid as between the participants even if the requisites of Sec 1, Rule 74 for extrajudicial partition are not followed, since said requisites are for purposes of binding creditors and non-participating heirs only (Hernandez vs. Andal, 78 Phil. 196). Should it be contended that said partition was attended with fraud, lesion or inadequacy of price, the remedy is to rescind or to annul the same in an action for that purpose. And in the meanwhile, the assigning heir cannot initiate a settlement

proceedings, for until the deed of assignment is annulled or rescinded, it is deemed valid and effective against him, so that he is left without that "interest" in the estate required to petition for settlement proceedings. Miguel Durans petition amounted to a petition to intervene in the settlement proceedings. As aptly ruled by the court a quo since there was really no settlement proceedings in the first place, the petition to intervene must be denied. Finally, although Josefina Duran prayed to be appointed administratrix, her doing so did not admit to ratification of the petition for settlement under the ruling in Eusebio vs. Valmores, since she did so merely by way of an alternative prayer, should her motion to dismiss fail. And said motion to dismiss was properly sustained. Disposition Affirmed

Bengzon; June 14, 1967 30 SCRA 331 FACTS -Pio Duran died without testament. -Subsequent to his death, Cipriano Duran, one of the surviving brothers, executed a public instrument assigning and renouncing his hereditary rights to the decedent's estate in favor of Josefina Duran for consideration. -A year later Cipriano Duran filed a petition for intestate proceedings to settle Pio Duran's estate, further asking that he be named the administrator. Josefina Duran filed an opposition, praying for its dismissal upon the ground that the petitioner is not an "interested person" in the estate, in view of the deed of transfer and renunciation afore-stated. Replying to this, Cipriano alleged that Josefina Duran was not the decedents wife. Anent the deed of assignment, he contended that the same was procured thru fraud, with gross inadequacy of price and vitiated by lesion. -Another brother of the decedent, Miguel Duran, filed a petition to be joined as co-petitioner of Cipriano. Josefina Duran moved to strike out said petition as an improper attempt to intervene in the case.


G.R. No. L-4783 May 26, 1952 FACTS - In special proceeding No. 70588 of the CFI MAnila, Julita Relucio, was appointed administratrix of the testate estate of Felipe Relucio, Sr., qualifying on August 24, 1925 - Upon petition filed June 27, 1950 by Lorenzo, Rolando and Leticia Relucio, CFI issued an order on January 15, 1951, appointing Rolando Relucio as administrator in substitution of the petitioner- In the order of March 20, 1951, the court merely made reference to the letters of administration issued in favor of Rolando Relucio and did not pass on the motion for immediate execution. - On April 3, 1951, Rolando Relucio filed a motion praying that the petitioner be declared in contempt of court for failing to deliver to him, after demand, all papers, documents, titles and properties of the estate under her administration. - In the order dated April 10, 1951, the CFI Manila denied this motion for contempt and appointed

the Equitable Banking Corporation as special administrator pending the appeal of the petitioner from the order of January 15, 1951. - The court ruled that the appeal suspended the appointment of Rolando Relucio as administrator; but in the same breath it justified the appointment of the special administrator by arguing that, if the petitioner has to remain as administratrix during the pendency of her appeal, "a removed administrator may easily nullify such removal by interposing an appeal." - Upon denial of her motion for reconsideration, the petitioner instituted in this Court the present petition for certiorari. ISSUE WON appointment of EPCIB as SPECIAL ADMINISTRATOR is proper HELD - NO. The case does not fall under any circumstance in which a special administrator may be appointed. - The cases in which a special administrator may be appointed are specified in section 1 of Rule 81 of the Rules of Court which provides as follows: "When there is delay in granting letters testamentary or of administration occasioned by an appeal from the allowance or disallowance of a will, or from any other cause, the court may appoint a special administrator to collect and take charge of the estate of the deceased and executors or administrators thereupon appointed." - A special administrator may also be appointed in a case covered by section 8 of Rule 87 which provides as follows: "If the executor or administrator has a claim against the estate he represents, he shall give notice thereof, in writing, to the court, and the court shall appoint a special administrator who shall, in the adjustment of such claim, have the same power and be subject to the same liability as the general administrator or executor in the settlement of other claims. The court may order the executor or administrator to pay to the special administrator necessary funds to defend such claim." - Pending her appeal from the order of January 15, 1951, the petitioner had the right to act as

administratrix. If the respondent Judge had decreed the immediate execution of the order of January 15, 1951, Rolando Relucio would then be the administrator pending petitioner's appeal. Consequently, the respondent Judge exceeded his jurisdiction in appointing the respondent Equitable Banking Corporation as special administrator.

324 SCRA 172 MENDOZA; Jan 31, 2000 NATURE Review on certiorari of 2 CA decisions which ruled that petitioner has no right to intervene in the settlement of the estate of Dr. Arturo de Santos. FACTS -July 20, 1995: Dr. Arturo de Santos, Filipino, Makati resident, filed a petition for probate of his will in RTC-Makati, Branch 61, docketed as Sp. Proc. No. M-4223. Dr. De Santos alleged that he had no compulsory heirs; that he had named in his will as sole legatee and devisee the Arturo de Santos Foundation, Inc; that he disposed by his will his properties with an approximate value of not less than P2M; and that copies of said will were in the custody of the named executrix, private respondent Pacita de los Reyes Phillips. -Feb 16, 1996: Judge Gorospe issued an order granting the petition and allowing the will. Dr. De Santos died 10 days later. -April 3, 1996: petitioner Octavio S. Maloles II filed a motion for intervention claiming that, as the only child of Alicia de Santos (testator's sister) and Octavio L. Maloles, Sr., he was the sole fullblooded nephew and nearest of kin of Dr. De Santos. He likewise alleged that he was a creditor of the testator. Petitioner thus prayed for the reconsideration of the order allowing the will and the issuance of letters of administration in his name. -On the other hand, Phillips, the wills designated executrix, filed a motion for the issuance of letters testamentary with Branch 61. Later, however, she moved to withdraw her motion. This was granted, while petitioner was required to file a memorandum of authorities in support of his claim that said court still had jurisdiction to allow his intervention.

-Petitioner filed his memorandum of authorities on May 13, 1996. Meanwhile, Phillips, who withdrew her motion for the issuance of letters testamentary, refiled a petition for the same with the Makati RTC, docketed as Sp. Proc. No. M4343, assigned to Branch 65. -Upon Phillip's motion, Judge Abad Santos of Branch 65 issued an order, dated June 28, 1996, appointing her as special administrator of Dr. De Santos's estate. -Petitioner sought to intervene in M-4343 and to set aside the appointment of Phillips as special administrator. He reiterated that he was the nearest of kin of the testator; that he came to know of the existence of M-4343 only by accident; that the probate proceedings in M-4223 before Branch 61 of the same court was still pending; that Phillips misdeclared the true worth of the testator's estate; that Phillips was not fit to be the special administrator of the estate; and that petitioner should be given letters of administration for the estate of Dr. De Santos. -Aug 28, 1996: Judge Abad Santos ordered the transfer of M-4343 to Branch 61, on the ground that it is related to the case before Judge Gorospe of RTC Branch 61. -It appears, however, that in M-4223, Judge Gorospe had denied on Aug 26, 1996 petitioner's motion for intervention. Petitioner brought this matter to the CA which upheld the denial of petitioner's motion for intervention. -Meanwhile, Judge Gorospe issued an order, dated Sep 4, 1996, returning the records of M4343 to Branch 65. The order states that there is no related case involving the ESTATE OF DECEDENT ARTURO DE SANTOS pending before Branch 61; there is, however, a case filed by ARTURO DE SANTOS, as petitioner under Rule 76 for the Allowance of his will during his lifetime docketed as M-4223 which was already decided on 16 Feb 1996 and has become final; after it became final, Pacita de los Reyes Phillips filed a MOTION FOR THE ISSUANCE OF LETTERS TESTAMENTARY, which was subsequently withdrawn after Branch 61 ruled that the motion could not be admitted as the subject matter involves a separate case under Rule 78, and movant withdrew her motion and filed M-4343; Octavio de Santos Maloles II filed a MOTION FOR INTERVENTION before M-4223 and this was already DENIED likewise for the same grounds that the matter is for a separate case to be filed under Rule 78.

-Initially, Judge Abad Santos appeared firm in his position that it would be improper for Branch 65 to hear and resolve M-4343, considering that the probate proceedings were commenced with Branch 61. He thus ordered the transfer of the records back to the latter branch. However, he later recalled his decision and took cognizance of the case to expedite the proceedings: Considering the refusal of the Hon. Gorospe of Branch 61 to continue hearing this case notwithstanding the fact that said branch began the probate proceedings of the estate of the deceased and must therefore continue to exercise its jurisdiction to the exclusion of all others, until the entire estate of the testator had been partitioned and distributed as per Order dated 23 Sep 1996, Branch 65 shall take cognizance of the petition if only to expedite the proceedings, and under the concept that the Makati RTC is but one court. -Nov 4, 1996: Judge Abad Santos granted petitioner's motion for intervention. Phillips MFR denied by the trial court. She then filed a petition for certiorari in the CA which set aside the trial court's order on the ground that petitioner had not shown any right/interest to intervene in M4343. ISSUES 1. WON Branch 61 has lost jurisdiction (and WON Branch 65 acquired jurisdiction over the petition for issuance of letters testamentary) 2. WON the petitioner has a right to intervene 3. WON private respondent is guilty of forum shopping in filing her petition for issuance of letters testamentary with Branch 65 knowing fully well that the probate proceedings involving the same estate of the decedent is still pending with Branch 61. HELD 1. YES (YES) Reasoning Petitioner contends that the probate proceedings in Branch 61 did not terminate upon the issuance of the order allowing the will of Dr. De Santos. Citing Santiesteban v. Santiesteban and Tagle v. Manalo, he argues that the proceedings must continue until the estate is fully distributed to the lawful heirs, devisees, and legatees of the testator, pursuant to Rule 73, sec 1. Consequently, petitioner contends that Branch 65 could not lawfully act upon private

respondent's petition for issuance of letters testamentary. In cases for the probate of wills, it is well-settled that the authority of the court is limited to ascertaining the wills extrinsic validity. Ordinarily, probate proceedings are instituted only after the death of the testator, so much so that, after approving and allowing the will, the court proceeds to issue letters testamentary and settle the estate of the testator. The cases cited by petitioner are of such nature. In fact, in most jurisdictions, courts cannot entertain a petition for probate of the will of a living testator under the principle of ambulatory nature of wills. However, Art. 838, Civil Code authorizes the filing of a petition for probate of the will filed by the testator himself. Rule 76, sec 1 likewise provides this. After a will has been probated during the lifetime of the testator, it does not necessarily mean that he cannot alter or revoke the same before his death. Should he make a new will, it would also be allowable on his petition, and if he should die before he has had a chance to present such petition, the ordinary probate proceeding after the testator's death would be in order. Thus, after the allowance of the will of Dr. De Santos, there was nothing else for Branch 61 to do except to issue a certificate of allowance of the will pursuant to Rule 73, sec 12. There is, therefore, no basis for the ruling that Branch 61 continues and shall continue to exercise jurisdiction to the exclusion of all others. Petitioner cites Rule 73, sec 1. This rule, however, actually provides for the venue of actions for the settlement of the estate of deceased persons as held in Garcia Fule v. CA. Indeed, the jurisdiction over probate proceedings and settlement of estates with approximate value of over P100K (outside Metro Manila) or P200K (in Metro Manila) belongs to the RTC under BP 129, as amended. The different branches comprising each court in one judicial region do not possess jurisdictions independent of and incompatible with each other. It is noteworthy that, although Rule 73, sec 1 applies insofar as the venue of the petition for probate of the will of Dr. De Santos is concerned, it does not bar other branches of the same court from taking cognizance of the settlement of the estate of the testator after his death. As held in the leading case of Bacalso v. Ramolote, the various branches of CFI are coordinate and co-

equal courts, and the totality of which is only one CFI. The jurisdiction is vested in the court, not in the judges. And when a case is filed in one branch, jurisdiction over the case does not attach to the branch or judge alone, to the exclusion of the other branches. Trial may be held or proceedings continue by and before another branch or judge. 2. NO. Reasoning Petitioner claims the right to intervene in and oppose the petition for issuance of letters testamentary filed by private respondent. He argues that, as the nearest next of kin and creditor of the testator, his interest in the matter is material and direct. In ruling that petitioner has no right to intervene in the proceedings before Branch 65, the CA held that Maloles claim to being a creditor of the estate is a belated one, having been raised for the first time only in his reply to the opposition to his motion to intervene, and, as far as the records show, not supported by evidence; the opposition must come from one with a direct interest in the estate or the will, and Maloles has none. Moreover, the ground cited that the executrix has deliberately misdeclared the truth worth and value of the estate, is not relevant to the question of her competency to act as executor. Rule 76, sec 2 requires only an allegation of the probable value and character of the property of the estate. The true value can be determined later on in the course of the settlement of the estate. Rule 79, sec 1 provides: Opposition to issuance of letters testamentary. Simultaneous petition for administration. Any person interested in a will may state in writing the grounds why letters testamentary should not issue to the persons named therein as executors, or any of them, and the court, after hearing upon notice, shall pass upon the sufficiency of such grounds. A petition may, at the same time, be filed for letters of administration with the will annexed. Under this provision, "interested person" is one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a creditor, and whose interest is material and direct, not merely incidental or contingent. Even if petitioner is the nearest next of kin of Dr. De Santos, he cannot be considered an "heir" of the testator. It is a fundamental rule of testamentary succession that one who has no

compulsory or forced heirs may dispose of his entire estate by will. Nor does he have any right to intervene in the settlement proceedings based on his allegation that he is a creditor of the deceased. Since the testator instituted or named an executor in his will, it is incumbent upon the Court to respect the desires of the testator. As stated in Ozaeta v. Pecson: The choice of his executor is a precious prerogative of a testator, a necessary concomitant of his right to dispose of his property in the manner he wishes. It is natural that the testator should desire to appoint one of his confidence, one who can be trusted to carry out his wishes in the disposal of his estate. The curtailment of this right may be considered a curtailment of the right to dispose. Only if the appointed executor is incompetent, refuses the trust, or fails to give bond may the court appoint other persons to administer the estate. 3. NO. Reasoning According to petitioner, there is identity of parties, rights asserted, and reliefs prayed for in the two actions which are founded on the same facts, and a judgment in either will result in res judicata in the other. The petition for probate was filed by Dr. De Santos, the testator, solely for the purpose of authenticating his will. Upon the allowance of his will, the proceedings were terminated. On the other hand, petition for issuance of letters testamentary was filed by private respondent, as executor of the estate of Dr. De Santos, for the purpose of securing authority from the Court to administer the estate and put into effect the will of the testator. The estate settlement proceedings commenced by the filing of the petition terminates upon the distribution and delivery of the legacies and devises to the persons named in the will. Clearly, there is no identity between the two petitions, nor was the latter filed during the pendency of the former. Disposition WHEREFORE, the petition is DENIED and the decisions of the Court of Appeals are hereby AFFIRMED.

FACTS - In 1920, Go Bung Kiu died in China. His encargado Go Chiong Lee was appointed special administrator of his estate, with Tio Liok, Ang Changco, and Manuel Go Tianuy as sureties on his bond in the sum of P30,000. A month later, Go Chiong Lee's status was changed to that of administrator. He filed a motion that he be allowed to operate two stores belonging to the estate, one in Cebu City and the other in Toledo, Cebu. The court granted the motion but the judge added in ink a condition to his order (in Spanish) to the effect that a report must be filed monthly. Another bond also in the amount of P30,000 and with the same sureties was filed by the administrator, and letters of administration were issued in his favor. Go Chiong Lee continued to discharge his duties as administrator until he was relieved by Maximina Tan in 1921. During this period, he filed 3 reports each covering periods more than a month long. - The committee on claims rendered its report in 1921, admitting as proved, claims amounting to P69,029.91. The court issued an order to pay each and everyone of the persons mentioned in the report the whole amount appearing therein without any preference either as to the amount or as to the time of payment. Go Chiong Lee paid the creditors of the estate P16,700.39. It appeared that during his administration, the estate lost over P19,000 as the two stores hardly made any sales such that the one in Toledo was closed. - Maximina Tan now sues Go Chiong Lee and his sureties on four causes of action, on amounts totaling P54,700. The trial court awarded P42,849.08 but limited the liabilities of the sureties to P30,000. The defendants appealed. ISSUES 1. WON Go Chiong Lee is liable for the losses incurred by the estate during his administration. (1st and 3rd COA) 2. WON Go Chiong Lee is liable for 850 sacks of corn, valued at P6,375, which he failed to inventory. (2nd COA) 3. WON Go Chiong Lee is liable for the fact that while some of the creditors have been paid entirely and others partially, some of them received absolutely nothing on account of the hit and miss method he followed. (4th COA) HELD

1. NO. Ratio The standard of responsibility of the administrator is best measured as in essence the responsibility of a bailee. Like any bailee, he must pursue his discretion honestly and in good faith, or he will become personally liable, to those who are interested in the estate, for waste, conversion, or embezzlement. But where an administrator, entrusted with the carrying on of an estate, acts in good faith and in accordance with the usual rules and methods obtaining in such business, he will not be held liable for losses incurred. Reasoning That monthly reports would have possessed any particular virtue over the reports actually submitted is hardly plausible. On the contrary, that the losses sustained by the estate resulted from the risk necessarily attending the operation of the two stores is a much more reasonable assumption. The only testimony refuting that of the former administrator comes from Vidal Reynes, a tailor, but did not impress the Court. The personal responsibility of the former administrator and the sureties on his bond for losses incurred by the estate during his administration has not been proved. 2. YES. Ratio An administrator who has qualified shall, within 3 months after his appointment, return to the court a true inventory of the real estate and of the goods, chattels, rights, and credits of the deceased, which come into his possession or knowledge. The administrator shall be chargeable in his account with the goods, chattels, rights, and credits of the deceased, which come into his possession. The administrator is accountable on his bond along with the sureties for the performance of these legal obligations. Reasoning The issue is one of fact. The Court follows the findings of the trial court if proof to substantiate such findings appears in the record. Here, such proof exists, which means that the judgment appealed from must be affirmed in this respect. 3. NO. Ratio A personal representative will be protected in the payment of a claim which has been duly allowed or ordered paid by the court, although it should not have been paid in full, unless it is made to appear that such allowance of the claim,

TAN v. GO CHIONG LEE 46 PHIL 200 MALCOLM; September 25, 1924

or order for the payment thereof, was obtained through his collusion or bad faith. Reasoning After reading the order of the trial court relating to the distribution of the assets among the creditors, the impression of the Court is that the administrator, although unwisely, attempted to follow the order to the best of his ability. Moreover, it is not at all certain but that the estate will finally show enough on the profit side of the ledger either to pay all of the creditors to the full extent of their claims, or to give to most of the creditors who have not been paid a proportion similar to that of the creditors who have been paid. In these same proceedings, the administratrix on her motion, or the creditors at their initiative, may recover the excess imprudently paid out to certain creditors. Disposition Judgment is modified. The plaintiff shall only recover the amount of P6,375 (2nd COA re the 850 sacks of corn) with legal interest from the date the complaint was presented.

September 17, 1919

FACTS - Caponong died, owing plaintiffs sum of money. - His widow Abada was administratrix. Commissioners to appraise estate and pass on claims against estate were appointed. - Abada leased Hacienda Coronacion to Zayco. Abada married Alvarez. Lease was transferred to Alvarez by Zayco. - Nearly 7 yrs after death of Caponong, plaintiffs filed suit in CFI against Abada personally and as administratrix, alleging > that Caponong owed plaintiffs P12783.74 > that Abada, personally and as administratrix, had been receiving money and effects used by her for Hacienda Coronacion > that account of defendant showed balance in favor of plaintiffs of P62437.15 > that defendant recognized only about P14000 w/c however hadnt been paid. - Defendant admits that she owed P8555.78 as administratrix, and the balance was due by her personally. - Guardian of minor children of Caponong asked permission to intervene. He denied the claim and alleged that the estate of Caponong didnt owe plaintiffs anything. - Parties presented motion stating that they made an amicable settlement. Court dismissed the action. - The settlement was that > defendants recognized that Caponongs estate was indebted to plaintiffs in sum of P68,611.01, to be paid w/ 10% interest in 7 equal annual installments > defendants agreed to give plaintiffs first mortgage on all property of Caponong and all property belonging exclusively to Abada > defendants agreed to mortgage also the carabaos on the hacienda - Mortgage of the hacienda was executed. But the carabaos were not mortgaged. - The compromise was approved by the court. - In this present action, the plaintiffs allege that > defendants had let 2 installments go by w/o paying anything > defendants refused to sign the agreement mortgaging the carabaos > defendants were about to transfer their property not mortgaged

FLORES v FLORES 48 Phil 982 ROMUALDEZ; September 19, 1924

FACTS - The administrator of the estate applied to the lower court for authority to sell certain properties of the inheritance. - TC denied the application because the question about the title to the property sought to be sold had not as yet been finally decided. ISSUE WON lower court erred in denying the application HELD NO. The liquidation of an inheritance consists not only in the payment of its debts, but also in the determination of its assets and properties. And as the debts are to be paid out of said properties, it is obvious that there must first be determined what properties can legally be disposed of by the administrator, so that he may use them afterwards in the payment of the debts. Dispositive The orders appealed from are affirmed with the costs against the appellant.

- Plaintiffs prayed for attachment on property of defendants. Court granted attachment order. - Plaintiffs filed a motion and asked court to appoint a receiver. Court granted this motion. Receiver took charge of property and defendants were ousted from the house. - Abada and the guardian filed answer that > claim of plaintiffs against the intestate proceedings of Caponong had been allowed in sum of P12,783.74 by commissioners > property belonged to children of deceased > the only interest of Abada was her usufructuary interest in 1/6 of the property > all the property was in custodia legis and could not be attached > the compromise agreement and the mortgage executed were obtained through fraud and false representation - Judge dissolved the attachment and discharged the receiver. Judgment was also given for plaintiffs to recover from administratrix P8555.78 w/ interest. Personal judgment was also given plaintiffs against Abada and Alvarez for P79970.21. - Abada appealed personally and as administratrix. ISSUES 1. WON the compromise agreement and the mortgage were valid 2. WON the carabaos could be attached 3. WON appointment of receiver was proper HELD 1. NO - The claim of plaintiffs against estate of Caponong had been fixed. Court says that its approval was meant to include only the amt actually due by estate; the balance was intended to be approved as against Abada personally. - The record in Case 969 is presented. Plaintiffs allege that their orig claim against estate was only P12783.74 and that the balance was due from Abada as administratrix and personally w/o stating how much was owed by her personally and how much was owed by her as administratrix. - Can the court authorize the mortgage in this case? Commissioners shall pass upon claims against estate. The law fixed the limit of the estates liability. The court couldnt charge it w/ debts that were never owed by it. The


administratrix could only charge the estate w/ reasonable expenses of administration. - Estate owed plaintiffs less than P13000 when commissioners passed on their claim. Part of this was paid, leaving balance of P8555.78. Plaintiffs made advances to administratrix until their claim was more than P68000. - It is urged that a major part of this P68000 is administration expenses but no reason is given why such expense of administration shld be so great. - Administration expense would be the necessary expenses of handling prop, protecting it against destruction / deterioration. But if plaintiffs let the administratrix have money & effects til their claim grow to P68000, they cant be permitted to charge this amt as expense of administration. By expense of administration we understand to be the reasonable & necessary expense of caring for the prop and managing it til debts are pd, and of dividing it so as to partition it and deliver to the heirs. - The court could not approve a settlement saddling upon the estate debts it never owed. If it did, its approval is a nullity. - Neither executors, unless specially authorized by will, nor administrators, have power to bind estate of deceased by borrowing money. - Black v. Dressels Heirs: Statute grants no power to administrator to borrow money upon mortgage of real estate of decedent. Such an act is foreign to the policy and purpose of administration w/c aims to close up, not to continue the estate. - Mortgage was void. - CFIs should exert themselves to close up estates w/in 12 mos fr time they are presented; they may refuse to allow any compensation to executors / administrators who dont actively labor to that end. 2. NO - If they were in the name & possession of administratrix, they were in custodia legis, and couldnt be attached. 3. NO - Court should have taken other means to protect creditor & wind up the estate.

FACTS While intestate proceedings were ongoing, the administratrix of the estate of deceased Rafael Jocson, entered into a lease agreement with Nava. This was done without the intervention of the court. The widow assailed the lease agreement, which the court annulled. ISSUE WON the court has the power to annul, in the intestate proceedings, a contract of lease executed by the administratrix without its intervention RULING NO. The court cannot annul the lease contract in intestate proceedings wherein it had no jurisdiction over the person of the lessee. The lease was only an act of administration, which are within the powers of administration of the administratrix.

WON the administrator was remiss in his duty as such HELD Yes. -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. -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. -At the time of his appointment, 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, if the personal property of the estate had been promptly sold, would have been paid, and the estate would have a balance left of P2,377.42. -Wilson 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. -An administrator, without a specific showing or an order of the court, does not 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. -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. -Ruling Case Law, vol. 11, section 142 says: "Winding up Business. An executor or administrator ordinarily has no power to continue the business in which the decedent was engaged at the time of his death xxx The normal duty of the personal representative in reference to such business is limited to winding it up xxx -The same principle is also laid down in Cyc., vol. 18, p. 241, where it is said:

WILSON V REAR 55 Phil. 44 JOHNS; October 16, 1930

FACTS -Wilson was appointed special administrator in the settlement of the estate of Charles Rear -The estate had the following assets: real property valued at P15,300, and personal property valued at P5,250 -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, and if you include interest and accumulated taxes, the debt of the estate was P1,655.54. - Wilson, on his own volition and without any authority or process of court, continued the operation of the plantation. He employed 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 manager's salary was P4,533.33. -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. ISSUE


69 Phil 1 (October 18, 1939) Moran, J.

"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."

FACTS Quintin, Francisco, Crisanta and Juliana are legitimate children of Marcelo de Borja who, upon his demise sometime in 1924 or 1925, left a considerable amount of property. Intestate proceedings must have followed, and the pre-war records of the case either burned, lost or destroyed during the last war, because the record shows that in 1930 Quintin was already the administrator of the Intestate Estate of Marcelo. In 1938, Quintin died, and Crisanto, son of Francisco, was appointed and took over as administrator of the Estate until the then outbreak of the war. From then on and until the termination of the war, there was a lull and state of inaction in the intestate proceedings, until upon petition filed by Miguel Dayco, as administrator of the estate of his deceased mother, Crisanta, who is one of heirs, for reconstitution of the records of this case. The petition was granted and the administrator was ordered to submit his report and a copy of the project of partition. Crisanto filed several statement of account of his administration on different occasions but such were opposed by the heirs of Quintin on the grounds that they were not detailed enough; income reported in said statement was very much less than the true and actual income of the estate and that the expenses appearing therein G.R. No. L-6622 Felix; July 31, 1957

were exaggerated and/or not actually incurred, and prayed that the statement of accounts submitted by the administrator be disapproved and prayed that the administrator be ordered to deposit with the Clerk of Court all books, receipts, accounts and other papers pertaining to the Estate of Marcelo. After a protracted and extensive hearing on the matter (almost 30 years), the Court, finding the administrator, Dr. Crisanto de Borja, guilty of certain acts of maladministration, held him liable for the payment to the oppositors, the heirs of Quintin, of 1/4 of the unreported income which the estate should have received. ISSUE WON the administrator is guilty of acts of maladministration (hence he may be held accountable for any loss or damage that the estate under his administration may incur) HELD YES (a) 6-door building in Azcarraga Street, Manila: underdeclared rentals (b) Parcel of land in Mayapyap, Nueva Ecija: claimed he had not taken possession of the property but the oppositors witnesses who were some of the tenants of the Mayapyap property testified that they were paying their shares to the overseers of Francisco and sometimes to his wife, which the administrator was not able to contradict; and the lower Court found no reason why the administrator would fail to take possession of this property considering that this was even the subject of the agreement of February 16, 1940, executed by the heirs of the Intestate. (c) The Hacienda Jalajala located in Rizal: underdeclared income of the property devoted to rice cultivation and forest land which yields considerable amount of marketable firewoods. (d) Ricefields in Cainta, Rizal: underdeclared yields (e) Surcharges and penalties paid for administrators failure to pay on time the taxes imposed on the properties under his administration. He advanced the reason that he lagged in the payment of those tax obligations because of lack of cash balance for the estate. But evidence show that the administrator received money from Juliana together with certain papers pertaining to the intestate,aside from the checks in the name of Quintin.

(f) Sometime in 1942, a big fire razed numerous houses in Pateros, Rizal, including that of Dr. Crisanto. Thereafter, he claimed that among the properties burned therein was his safe containing P15,000 belonging to the estate under his administration. However, the administrator testified that the money and other papers delivered by Juliana to him in 1939, 1939, were saved from said fire. The administrator justified the existence of these valuables by asserting that these properties were locked by Juliana de Borja in her drawer in the "casa solariega" in Pateros and hence was not in his safe when his house, together with the safe, was burned. This line of reasoning is really subject to doubt, that it runs counter to the ordinary course of human behaviour for an administrator to leave in the drawer of the "aparador" of Juliana the money and other documents belonging to the estate under his administration, which delivery has receipted for, rather than to keep it in his safe together with the alleged P15,000 also belonging to the Intestate. The subsequent orders of Judge Platon also put the defense of appellant to bad light, for on February 6, 1943, the Court required Crisanto to appear before the Court of examination of the other heirs in connection with the reported loss, and on March 1, 1943, authorized the lawyers for the other parties to inspect the safe allegedly burned. It is inconceivable that Judge Platon would still order the inspection of the safe if there was really an order approving the loss of those P15,000. We must not forget, in this connection, that the records of this case were burned and that at the time of the hearing of this incident in 1951, Judge Platon was already dead. The lower Court also found no reason why the administrator should keep in his such amount of money, for ordinary prudence would dictate that as an administration funds that come into his possession in a fiduciary capacity should not be mingled with his personal funds and should have been deposited in the Bank in the name of the intestate. (g) Unauthorized expenditures 1. Sums paid to the administrator's wife, as his private secretary. In explaining this item, the administrator alleged that he needed her services to keep receipts and records for him, and that he did not secure first the authorization from the court before making these disbursements because it was merely a pure administrative function.

The keeping of receipts and retaining in his custody records connected with the management of the properties under administration is a duty that properly belongs to the administrator, necessary to support the statement of accounts that he is obliged to submit to the court for approval. If ever his wife took charge of the safekeeping of these receipts and for which she should be compensated, the same should be taken from his fee. 2. The salaries of Pedro Enriquez, as collector of the Azcarraga property; of Briccio Matienzo and Leoncio Perez, as encargados, and of Vicente Panganiban and Herminigildo Macetas as forestguards were found justified, although un authorized, as they appear to be reasonable and necessary for the care and preservation of the Intestate. 3. The expenses for salaries paid to special policemen to act as special policemen during harvest time because most of the workers tilting the Punta property were not natives of Jalajala but of the neighboring towns and they were likely to run away with the harvest without giving the share of the estate if they were not policed. This kind of reasoning did not appear to be convincing to the trial judge as the cause for such fear seemed to exist only in the imagination. Granting that such kind of situation existed, the proper thing for the administrator to do would have been to secure the previous authorization from the Court if he failed to secure the help of the local police. 4. From the year 1942 when his house was burned, the administrator and his family took shelter at the house belonging to the Intestate known as "casa solariega" which, in the Project of Partition was adjudicated to his father, Francisco de Borja. This property, however, remained under his administration and for its repairs he spent from 1945-1950, P1465,14, duly receipted. None of these repairs appear to be extraordinary for the receipts were for nipa, for carpenters and thatchers. Although it is true that Rule 85, section 2 provides that: SEC. 2. EXECUTOR OR ADMINISTRATOR TO KEEP BUILDINGS IN REPAIR. An executor or administrator shall maintain in tenant able repair the houses and other structures and fences belonging to the estate, and deliver the same in such repair to the heirs or devisees when directed so to do by the court.

Yet considering that during his occupancy of the said "casa solariega" he was not paying any rental at all, it is but reasonable that he should take care of the expenses for the ordinary repair of said house. Appellant asserted that had he and his family not occupied the same, they would have to pay someone to watch and take care of said house. But this will not excuse him from this responsibility for the disbursements he made in connection with the aforementioned repairs because even if he stayed in another house, he would have had to pay rentals or else take charge also of expenses for the repairs of his residence. 5. On the expenses for planting in the Cainta ricefields: Remaining balance for others share. The prevailing sharing system in this part of the country was on 50-50 basis. 6. On the transportation expenses of the administrator: unreceipted disbursements and not ecnomical From the report of the administrator, We are being made to believe that the Intestate estate is a losing proposition and assuming arguendo that this is true, that precarious financial condition which he, as administrator, should know, did not deter Crisanto from charging to the depleted funds of the estate comparatively big amounts for his transportation expenses. Appellant tried to justify these charges by contending that he used his own car in making those trips to Manila, Pasig and Cainta and a launch in visiting the properties in Jalajala, and they were for the gasoline consumed. This rather unreasonable spending of the estate's fund prompted the Court to observe that one will have to spend only P0.40 for transportation in making a trip from Pateros to Manila and practically the same amount in going to Pasig. From his report for 1949 alone, appellant made a total of 97 trips to these places or an average of one trip for every 3 1/2 days. Yet We must not forget that it was during this period that the administrator failed or refused to take cognizance of the prevailing rentals of commercial places in Manila that caused certain loss to the estate and for which he was accordingly held responsible. 7. Other expenses: a. The administrator also ordered 40 booklets of printed contracts of lease in the name of the Hacienda Jalajala which cost P150. As the said hacienda was divided into 3 parts one belonging to this Intestate and the other two parts to Francisco and Bernardo, ordinarily the Intestate

should only shoulder 1/3 of the said expense, but the tenants who testified that those printed forms were not being used. b. Transportation expenses of one of the two commissioners who prepared the Project of Partition. He was not able to show or prove that the money intended and ordered by the Court to be paid for the transportation expenses of the commissioners was spent for the benefit of the estate as claimed. c. Payment to the Chief of Police on Jalajala allegedly for the service of summons. He forgot probably the fact that the local chiefs of police are deputy sheriffs ex-officio. c. Attys fees - professional services rendered for the defense of the administrator in a case which was decided against him, with costs. The costs of that litigation should not be borne by the estate but by the administrator himself, personally. (e) Funds still in the possession of the administrator. (f) On the sum of P13,294 for administrator's fees: It is not disputed that the administrator set aside for himself and collected from the estate the sum of P13,294 as his fees from 1945 to 1951 at the rate of P2,400 a year. There is no controversy as to the fact that this appropriated amount was taken without the order or previous approval by the probate Court. Neither is there any doubt that the administration of the Intestate estate by Crisanto de Borja is far from satisfactory. Yet it is a fact that Crisanto de Borja exercised the functions of an administrator and is entitled also to a certain amount as compensation for the work and services he has rendered as such. Now, considering the extent and size of the estate, the amount involved and the nature of the properties under administration, the amount collected by the administrator for his compensation at P200 a month is not unreasonable and should therefore be allowed. It might be argued against this disbursement that the records are replete with instances of highly irregular practices of the administrator, such as the pretended ignorance of the necessity of a book or ledger or at least a list of chronological and dated entries of money or produce the Intestate acquired and the amount of disbursements made for the same properties; that admittedly he did not have even a list of the names of the lessees to the properties under his administration, nor even a list of those who owed

back rentals, and although We certainly agree with the probate Court in finding appellant guilty of acts of maladministration, specifically in mixing the funds of the estate under his administration with his personal funds instead of keeping a current account for the Intestate in his capacity as administrator, We are of the opinion that despite these irregular practices for which he was held already liable and made in some instances to reimburse the Intestate for amounts that were not properly accounted for, his claim for compensation as administrator's fees shall be allowed. INTESTATE ESTATE OF CARMEN DE LUNA vs. IAC GUTIERREZ, JR.; February 13, 1989 FACTS - Jose de Luna Gonzales and former Judge Ramon Icasiano were appointed co-administrators of the estate of Carmen de Luna - Judge Icasiano died so Gonzales performed his duties as sole administrator of the estate. - Gonzales through counsel filed a motion for allowances and payment of administrator's commission in accordance with Section 7, Rule 85 of the Rules of Court leaving the matter to the discretion of the court. - Jose de Luna Gonzales died. His heirs filed in his behalf on March 10, 1980 an Urgent Supplemental Motion for allowances and payment of administrator's commission or fees asking the amount of P100,000.00, which was later on increased to P500,000.00. Heir Trinidad Villajuan Vda. de Martinez filed an opposition to which Catalina M. Gonzales, widow of the late administrator filed a reply. - The trial court issued an order directing the new administratrix Catalina M. Gonzales to submit a complete and sworn inventory of all the goods, chattels, rights, credits and estate of the deceased Carmen de Luna. The total of the real and personal property of the estate was listed at P10,751,189.97. - The trial court issued an order granting the compensation asked for by the late administrator amounting to P500,000.00. - The heirs appealed to the Court of Appeals. - The Court of Appeals affirmed in toto the orders appealed from.

- The appellants filed a motion for reconsideration of the said decision. - The Court of Appeals modified the decision by reducing the amount to P4,312.50 based on Rule 85 Section 7. Arguments of the Oppositors: That the value of the estate increased by natural accretion or by government re-assessment and not thru the efforts of the late administrator; that the amount being claimed is highly unconscionable and unreasonable and besides it is not in consonance with the amount specified under Rule 85, Sec. 7 which allows only onefourth per cent of the entire value of the estate and which must be allowed only after a settlement of the estate is finally made; that the amount being claimed as compensation is not itemized, hence, purely conjectural, hypothetical and without basis in fact and in law; that in cases where compensation for extraordinary services are claimed, the better practice is to itemize the account and explain fully in what particulars the services are extraordinary or unusual; and that the late administrator Jose de Luna Gonzales had long been compensated by the estate arising from' the admitted sale for voting rights of Centro Escolar University shares, and for this matter this Court may require an accounting under Rule 85, Sec. 8 of the Rules of Court; and lastly, that as admitted by movants themselves in their urgent amended motion, that the administration of the estate spanned a prolonged period of sixteen years and yet the same is not yet closed or terminated and therefore the administrator should be denied compensation for his services, for the prolongation of the settlement of the estate is due entirely to his effort to defraud the heirs, and due to his neglect, the administration has been too expensive. ISSUE WON Jose de Luna Gonzales is entitled to the amount of P500,000.00 by way of compensation as administrator of the estate of Carmen de Luna. HELD YES. The applicable provision is the proviso which states: "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." A wide latitude, leeway or discretion is therefore given to the trial court to grant a greater sum. And the determination of whether the administration and liquidation of an estate have been attended with greater difficulty and have required a high degree of capacity on the part of the executor or administrator rests on the sound discretion of the court which took cognizance of the estate. There appears to be no sound justification why the appellate court should interfere with the exercise of the trial court's discretion, absent a showing that the trial court committed any abuse of discretion in granting a greater remuneration to the petitioner. The trial court's order is based on substantial evidence and the applicable rule. Reasoning: a. While it may be true that the inventory of the properties of the estate as of April 25, 1975 was only P 890,865.25 it has been shown that the value of the estate has increased not only by the efforts of the late administrator to take good care of the same but in succeeding to locate other properties belonging to the estate so that when he submitted the inventory of the properties, real and personal of the estate as of April 13, 1980 the total appraisal thereof appears to be over P10 M. No objection thereto appears to have been interposed. b. And with regards to the inventory, the respondents did not even present any evidence to counter or disprove the valuations made so their claim that the estimated P10 million value of the properties was exaggerated is without basis and purely conjectural. With the well settled rule that the findings of the trial court are given great respect, we therefore sustain the finding that the value of the estate is worth P10 million as found by the trial court. DISPOSITION There appearing to be no manifest error or abuse of discretion for the Court of Appeals to modify the trial court's orders, the resolution of the Intermediate Appellate Court dated July 19, 1985 is hereby SET ASIDE and its previous decision dated September 17, 1982 is REINSTATED

SANTOS v. MANARANG G.R. No. L-8235 TRENT; March 19, 1914 10

FACTS - 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 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. - 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. - Santos 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. ISSUE 1. WON the court erred in refusing to reconvene the committee for the purpose of considering plaintiff's claim. 2. WON 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. HELD 1. NO. 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 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. - 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. 2. NO. -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. - 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? No. - 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 testator 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. Separate Opinions MORELAND, J., dissenting:

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. 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. 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. - 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. - T his proceeding is not an action against an executor to recover a debt against the estate of his testator. - 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. - 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.


- 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. - 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. - 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. - 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 attempt of the court to meet the proposition that the will of the testator is the law of the case does not satisfy my judgment. It is claimed that the will of the testator is not the law of the case where it is in direct violation of a provision of law; and that the Court of Civil Procedure requiring that all claims shall be presented to the committee, the testator has no right to except a particular debt or any debt from the operation of the Code. - 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.


53 PHIL 806 OSTRAND; July 21, 1928 FACTS - CONCEPCION INC executed a promissory note in favor of BPI P342,372.64, payable on demand, with security of 700 shares of PNB deposited to BPI as collateral and mortgaged 5,680 sqm of land in R. Hidalgo Street, Manila. Concepcion defaulted in payment and BPI instituted foreclosure proceedings. -. 1ST LETTER: Elser entered into negotiations with CONCEPCION INC and offered to take over the mortgaged property and assume the mortgage debt. They agreed on the condition that they be relieved of all liability for the debt. - BPI did not answer the letter and it clearly appears from the allegations in its amended complaint that BPI was unwilling to release the CONCEPCION INC from their liability for the mortgage debt and insisted on their confessing a judgment in the foreclosure proceedings. CONCEPCION INC refused to confess judgment unless BPI would agree to bid in the mortgaged property for the full amount of the judgment. - 2ND LETTER: another letter was sent by Elser wanting to confirm the verbal agreement that BPI 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. This proposition is entirely different from that contained in the 1st letter - Elser entered into an agreement, in the form of a bilateral deed of sale, with CONCEPCION INC and Venancio Concepcion that subrogated Elser to the obligation of CONCEPCION INC to BPI for a consideration of P1 - BPI never gave notice of its conformity with the agreement and petitioned the court to include Elser as a defendant. Trial court included Elser as a defendant - Elser died and BPI asked that Rosenstock, administrator of the estate, be substituted in his

place as defendant, and that the action be continued against Rosenstock in that capacity, on the ground that this action is for foreclosure of a mortgage. They filed an opposition to have the action continued against Rosenstock, in substitution of Elser, since this is not a foreclosure action, hence this action is abated by reason of his death and any claim against him should be presented to the committee on claims and appraisals of his estate. However, the court overruled this objection. TC: absolved the Elser estate and ordered the Concepcions to pay BPI P342,372.64 with 9% interest ISSUE WON BPI is barred by the statute of non-claims from the Elser estate HELD YES - The Concepcions, and not BPI, might have maintained an action against the Elser estate; but that action is now barred through their failure to present their claim in time to the committee of claims and appraisal in the probate proceedings, and BPI cannot successfully invoke A1111 CC, which provides that after exhausting the property of which the debtor may be in possession, the creditor may have recourse to the debtor's credits and chooses in action for the collection of the unpaid portion of the debt. - Sec 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 his 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 pledged, in the foreclosure or other proceeding to realize upon the security, he may 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 the statute of limitations, and in that


event he shall not be admitted as a 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. - 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 for by Sec 689 and 690 of the Code of Civil Procedure. The committee ceased to function long ago, and the bank has now nothing to rely on except the mortgage. Intentionally or not, it has brought itself within the third course provided for in Sec 708; it has no alternative. - But BPI says that the amount of the deficiency, if any, could not be proved before the foreclosure sale had been effected; that Sec 708 expressly provides for the proof of the deficiency judgment before the committee after the sale of the mortgaged property; that these provisions must be construed to mean that the presentation and prosecution of the claim for the deficiency must be made after, and not before, the sale; and that if the mortgagee presents his claim for the deficiency before a deficiency judgment has been rendered, he will lose his rights under the mortgage and be regarded as having abandoned his security. This is clearly a misconception of the statute. Until the foreclosure sale is made, the demand for the payment of the deficiency is a contingent claim within the meaning of Sec 746, 747, and 748 of the Code of Civil Procedure, which sections read 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. Sec. 747. Estate to be retained to meet claims. If the court is satisfied form 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 retain in his hands sufficient estate to pay such contingent claim, when the same become absolute or, if the estate is insolvent, sufficient to pay a portion equal to the dividend of the other creditors. Sec. 748. Claim becoming absolute in two years, how allowed. If such contingent claim becomes absolute and is presented to the court, or tot he executor or administrator, within two years form the time limited for other creditor, 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 proves before the committee already appointed, or before others to be appointed, for that 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. Disposition Appeal is without merit and judgment is affirmed







Tan Sen Guan v. Go Siu San

47 Phil. 89 (1924) G.R. No. L-22451 FACTS:

Petitioner is administrator of the intestate estate of Tan Peng Sue and the defendant is the administrator in the testamentary proceeding for the settlement of the estate of Antonio Tampoco. Antonio Tampoco owed Tan Peng Sue, about the month of January, 1920, the sum of P25,802.60, which with the interest stipulated by the two deceased Tan Peng Sue and Antonio Tampoco in their lifetime at the rate of 9 6/10 per cent per year, amounted to P30,272.89 at the end of the year 1922 upon the death of Antonio Tampoco on February 5, 1920, proceeding was instituted in the CFI Manila for the settlement of his estate on December 14 of that year commissioners were appointed to hear and decide whatever claim might be presented against the estate, and d rendered their final report on June 27, 1921, which was approved by the court below on July 14 of said year; about August 30, 1922, the plaintiff, in his capacity as administrator of the estate of Tan Peng Sue, moved the court that the committee on claims be again authorized, or a new committee appointed, to hear and decide a claim that he had and which he was to present against the estate on September 21, 1922, Geo. R. Harvey, judge, appointed new commissioners and the latter recommend payment by the defendant administrator, which was by agreement of the parties estimated at P30,272.89 at the end of the year 1922. On December 22, 1923, the court presided over by Judge Diaz rendered decision, absolving the defendant administrator of the estate of Tampoco from the complaint, holding that the commissioners appointed on September 21, 1922, had no authority under the law


to hear and decide said claim, because the court that had appointed them had on the said date no jurisdiction to appoint them in view of the fact that more than fourteen months have elapsed since their final report was submitted by the former committee on claims in the aforesaid testamentary proceeding and approved by the court. To this decision the plaintiff excepted on the 29th day of the same month, and moved for the new trial on January 9, 1924, on the ground that said decision was against the law and the facts proven at the trial. 7. On March 27, 1924, the lower court presided over by the Honorable Geo. R. Harvey, judge, after considering the motion for new trial, rendered a new decision, setting aside that of December 22, 1923, and ordering the administrator of the estate of Antonio Tampoco to pay the administrator of the estate of Tan Peng Sue the sum of P28,802.60, with interest thereon at the rate of 9 6/10 per cent annum from March 28, 1920. Pre-Issue: WON motion for new trial is proper HELD: Yes. the discretionary power granted the judges by section 145 of the Code of Civil Procedure to revise or amend their judgments, before the same become final, may be exercised upon a motion based on section 145, subsection 3, jointly with, or separately from the power to grant new trial, although the exercise of the power to grant new trial necessarily requires the revocation of the former judgment; that under section 145, a judge may correct errors in his decisions, and in revoking his original decision by amending it upon the motion a reopening of the case Issue: WON action for new trial had already prescribed HELD: Yes.



The failure of Tan Chu Lay, heir of Tan Peng Sue, to present his claim was an omission committed by an heir who had knowledge of the existence of the credit of his deceased father. The fact that Tan Chu Lay might have been induced by fraudulent machinations and unlawful influence of the defendant administrator cannot affect the legal consequences of said act. And even if it be admitted that the widow of Tan Peng Sue was in China while the committee on claims was acting in the proceeding for the settlement of Antonio Tampoco's estate, still the result would be the same. The law does not make any reservation or exception whatever, and this court cannot make either. a. The pertinent part of section 695 of the Code of Civil Procedure provides: A person having a claim against a deceased person proper to be allowed by the committee, who does not, after publication of the required notice, exhibit his claim to the committee as provided in this chapter, shall be barred from recovering such demand or from pleading the same in offset to any action, except as hereinafter provided. Under section 690, a creditor who has failed to present his claim within the period fixed by the committee on claims may apply to the court, within six months after the period previously fixed, for the renewal of the commission for the purpose of examining his claim. Also a creditor may make such application even after six months from the expiration of the period formerly fixed and before the final settlement of the estate, if the committee shall have failed to give the notice required by section 687.

the application of the plaintiff was presented fourteen months after the expiration of the period fixed for the filing of claims. And while it was presented before the final settlement of the estate of Antonio Tampoco, yet, it having been proved that the committee had published in the newspaper La Nacion the notice required by law, there was no possible ground for granting said application. Even considering this application under section 113 of the Code of Civil Procedure, we believe that the lapse of fourteen months is an unsurmountable barrier opposing the granting of said application. WON the notice to the creditors was done in the proper manner HELD: Yes. 1. Before a credit may be held barred by our procedural statutes relative to liquidation of inheritance, it must appear, among other things, that the committee have designated convenient hours and places for the holding of their meetings for the examination and admission of claims, and that they have published this fact in the manner provided by the law. Unless this is done, the right of a creditor cannot prescribe, and he who claims the benefit of prescription has the burden of proof. 2. the committee on claims in the aforesaid proceeding had published for three consecutive weeks a notice to claimants, stating that they might present their claims within the period of six months, the committee to hold meetings at the office of Attorney M.G. Goyena, room No. 1, 34, Escolta, on the last Wednesday of each month at 3:30 p. m. for the purpose of hearing and deciding claims,



notwithstanding the appointment issued by the court, in which the places are designated where the notice should be posted, and the newspaper in which it should be published for three weeks, giving the creditors the period of six months to present their claims. For the foregoing the judgment appealed from is reversed, and it is hereby declared that the plaintiff appellee has lost his right to enforce his claim in this proceeding, without pronouncement as to costs. So ordered. Johnson, Malcolm, Avancea, Ostrand, and Romualdez, JJ., concur.. Street, J., dissents. Strret, dissenting the following appears from the stipulation of facts and exhibits: During all this time, nothing, as has already been said, was done with regards to the estate of Tan Peng Sue. His widow was in China and no legal representative was appointed to look after his affair. When his widow and heirs learned of the death of Tampoco's executor, Go Sui San, assured them that the same will be respected and paid when demanded; that there was no need of presenting the claim before the committee or the probate court as the same appeared already on the books of the estate; and that it was to their advantage not to segregate it from the mass as it was gaining interest. Certain different amounts on this account were in fact received by the widow and heirs of Tan Peng Sue who naturally became more convinced of the advices of Go Sui San. (See affidavits of Go Biec and Tan Chui Lay, folios 79 to 86 of record.) Consequently, the claim of Tan Peng Sue was not presented to the original committee on claims in the estate of Tampoco. Based upon such facts, the judgment of the lower court should be affirmed.

FACTS -the case is the resolution to the MFR filed separately by Juan F. Gomez (Atty of heirs of Don Juan Castellvi), Jesus David (atty. Of Dona Carmen Castellvi), Raquiza Children and their father Antonio Raquiza (as heirs of Natividad Castellvi-Raquiza), Antonio Quirino (as administrator of estate of Natividad Castellvi) - background facts: this is the special proceeding for the settlement of the testate estate of Don Alfonso, whose last will instituted Natividad Castellvi to 2/3 of estate, and Don Juan Castellvi to 1/3 of estate. the administratrix of said estate is Dona Carmen. The RTC denied some claims against the estate and granted others (set forth below), thus the petition on certiorari. The SC affirmed, thus this MFR. ISSUE WON the motions should be granted HELD NO. Denied. Everything. 1. MFR of Juan F. Gomez (on his claim for attys fees) Claim: attorney's fees from estate of Don Alfonso and transportation and representation expenses, for services admittedly rendered to the heirs of Don Juan. Ruling: Claim may not be charged against the estate of Don Alfonso. Gomezs claims for attorney's fees and transportation and representation expenses are for services rendered to the alleged substituted heirs of Don Juan and such services did not inure to the benefit of Don Alfonso Castellvi nor his estate. -Gabin v. Malleja: the term claims required to be presented 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 or liability contracted by the deceased before his death. -The court charged with the settlement of the estate of Don Alfonso is bound to protect the estate from any disbursements based on claims not chargeable to the estate. Claim: Gomez was deprived of due process, as he was not impleaded as party respondent in, and required to answer, the petition for certiorari Ruling: Gomez had already filed a motion for intervention (filed prior to the decision assailed

here), and the allegations set forth therein were duly considered and studied by the Court. His act of filing the said motion for intervention and his present MFR, indubitably gave him an adequate opportunity to present his side of the controversy, and therefore cured any defect of alleged lack of due process. - Although as a general rule, certiorari will not lie unless the lower court has, through a MFR, been given a chance to correct the errors imputed to it, this rule, however, admits of exceptions, like: (1) when the issue raised is one purely of law; (2) where public interest is involved; and (3) in case of urgency. Here, the questioned orders of the trial court were already being executed, hence, there was an urgency, thereby allowing petitioner to file a petition for certiorari without need of first filing a MFR. 2. MFR of Jesus T. David (on his claim for attys fees) Claim: attorney's fees for services rendered for Doa Carmen Ruling: the services were not for the benefit of Don Alfonso or his estate. Only claims which could have been enforced against the deceased in his lifetime are allowed to be presented against his estate, with the exception of funeral expenses, expenses for the last sickness, and administration expenses in the ordinary course. -David contends that he has the right to attach and levy on Doa Carmen's administratrix fees and share in the estate of Don Alfonso (as his wife) -this issue cant be settled in the special proceedings for settlement of Don Alfonso's estate. The subject of settlement in this case is not the estate of Doa Carmen. For David to insist in this proceeding his claim against Doa Carmen's alleged fees as administratrix and share in the estate of Don Alfonso would be irregular and untenable. The lower court is one of limited jurisdiction, and it has no authority to determine as to who are the heirs of Don Juan (parang mali na Don Juan to) and/or decide the claims or demands which may be properly paid out of the funds of the estate of Doa Carmen. Such issues have to be determined separately. - to allow here the enforcement of the claim of David against Doa Carmen's alleged share in the estate of Don Alfonso, would amount to summarily declaring Doa Carmen an heir of Don Alfonso, without giving the other heirs or

QUIRINO V GROSPE GR L-58797 PADILLA; January 31, 1989

NATURE MFR on decision of SC on a Petition on Certiorari


claimants to the latter's estate an opportunity to oppose the same. Moreover, whatever fees Doa Carmen might have earned during her lifetime as administratrix of the estate of Don Alfonso should go to her estate. Hence, whatever claim herein intervenor has against the deceased Doa Carmen, should be presented before the court with jurisdiction in settling her estate. He cannot resort to a short cut and present his claim directly to this Court to suit his own end and convenience thereby brushing aside the settled rules of applicable procedure. 3. MFR of the Raquiza children and their father (contesting award of attys fees to Atty. Mendoza, the atty of estate of Don Alfonso) Claim: award of attys fees to Atty. Mendoza is not valid on the ground that they never gave their consent thereto, nor did Doa Carmen, as administratix of the said estate. Ruling: Records of the case show that Natividad, the instituted heir to 2/3 of estate of Don Alfonso, gave her conformity to such award of attys fees in favor of Mendoza. Moreover, movants, through their father Atty. Raquiza, had agreed to grant said attys fees. In fact, separate manifestations were filed by Atty. Raquiza and Dona Carmen withdrawing their oppositions to said claim. - With regard to Exequiel Floro's (creditor? his role was not disclosed in the case) claim for payment for services rendered to the estate of Don Alfonso, the rule is that where the monetary claim against the administrator has a relation to his acts of administration in the ordinary course thereof, such claims can be presented for payment with the court where a special proceeding for the settlement of the estate is pending, although said claims were not incurred by the deceased during his lifetime and collectible after his death, since the administration is under the direct supervision of the court and the administrator is subject to its authority. - As to WON the movants are heirs of Natividad, thus, entitled to her share in the estate of Don Alfonso, determination of the same is again not within the jurisdiction of the lower court charged only with the settlement of the estate of Don Alfonso. 4. MFR of Antonio Quirino (as administrator of estate of Natividad)

Claim: Contests the awards given to Atty. Mendoza and Floro Ruling: As said earlier, Natividad and Doa Carmen had given their conformity to the award of attys fees to Mendoza. Quirino who now is acting as special administrator of estates of Natividad and Dona Carmen is estopped from questioning said award. -As for the award to Exequiel Floro, the same was allowed for services rendered for the benefit of the estate of Don Alfonso and the same falls under the category of administration expense which may be paid out of the estate. Also, the heirs of Don Alfonso had dropped their opposition to said claim, thus, they are barred from questioning it at this stage. 5. Motion for Intervention of Carmen Castellvi, et al. (as alleged subsitituted heirs of Don Juan Claim: seeks clarification of term instituted heirs and a modification of the decision, so that the term instituted heirs would include substituted heirs of Don Juan. They also want the setting aside of the portion that provides for the final distribution of the estate of Don Alfonso to the instituted heirs or their respective estates, if it would mean that delivery of the 1/3 share of the estate of Don Alfonso is to be made only to Don Juan or his estate. To order the delivery of the residue of the estate of Don Alfonso to the estate of Don Juan (to the extent of 1/3 as decreed in Don Alfonso's last will) instead of his substituted heirs, will result in re-ligation among themselves and/or with other parties for their respective shares over the estate of Don Juan, when they had already ventilated the issue of heirship over the same before the lower court and were declared heirs of Don Juan and substituted heirs to his 1/3 share in the estate of Don Alfonso Ruling: To allow intervenors instead of the estate of the instituted heir, Don Juan, to receive the residue of the estate of Don Alfonso would be not only prejudicial to the creditors of Don Juan but also to the government in the form of nonpayment of taxes required by law. The transfer of the estate of Don Alfonso to his instituted heirs (Natividad and Don Juan) is subject to payment of estate taxes. Before the estates of Don Juan (and Natividad) can be transferred to their heirs, again, estate taxes must first be paid to the government. To allow intervenors, as substituted heirs of Don Juan, to receive directly from the

estate of Don Alfonso, the share pertaining to Don Juan, could result in a single transfer of property and a single payment of estate taxes, in fraud of the government. Also, the lower court has no jurisdiction to determine who the heirs of Don Juan are; this has to be ventilated separately. 6. Motion for Clarificatory Order of Juan F. Gomez Claim: clarification of the denial of his claim for attys fees, as to WON it is meant to annul not only order fixing his fees but also the approval of the contract for services by lower court. Ruling: His claim is chargeable to the heirs of Don Juan, and the lower court has no jurisdiction to fix such fees for services rendered not to the estate of Don Alfonso, but to the heirs of Don Juan. It follows that the court a quo has no jurisdiction to approve a contract of legal services between claimant and the heirs of Don Juan. The court is of limited jurisdiction, empowered to settle only the estate of Don Alfonso: any act done in excess of such limits may not be given force and effect. 7. Omnibus Motion for Early Resolution and Immediate Release for Funds by the Raquiza Children Claim: approval for release of the amount of P300k to allegedly take care of burial expenses incurred upon death of Natividad Ruling: Denied. What movants are actually praying of this Court is to reverse the order of denial of their motion for release of funds. Before a review can be made of said order of denial, movants should have filed a proper petition before this Court and not a mere motion. This incident is not covered by the petition for certiorari resolved in the decision Disposition MR denied. Decision affirmed


5 SCRA 959 (1962 ) REYES, J.B.L., J.: FACTS 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, to recover damages


from Hermogenes Llemos, averring that the latter 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. 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. 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 proceeding should be initiated and the claim filed therein. Motion for reconsideration having been denied, the case was appealed to us on points of law. ISSUE Whether or not the case was properly dismissed HELD (CAVEAT: OBITER NA LANG TO BECAUSE AS JBL NOTED, NAGKAROON NG COMPROMISE AGREEMENT SA LOWER COURT) NO, the Court should have allowed the case to prosper because the obligation involved herein is not one of those abated by the death of the defendant. 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 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 plaintiffsappellants; 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 injury to that party's property (Javier vs. Araneta, L-4269, Aug. 31 1953).

interest of 20%). Fausta Macasaquit died leaving a will wherein she appointed her daughter, Maria Calma, as administratrix of her properties. In the probate proceedings in the Court of First Instance of Tarlac, the said daughter, Maria Calma, was appointed judicial administratrix of the properties of the deceased. While the probate proceedings were pending, Esperanza Tanedo, filed a complaint against Eulalio Calma for the recovery of the sums of P948.34 and P247. CFI Tarlac rendered judgment for the payment of this sum. In the execution of this judgment, despite the third party claim filed by Fausta Macasaquit, the property described in the complaint was sold by the sheriff. ISSUE WON complaint can be brought against deceased Eulalio Calma (having ceased as legal administrator of the conjugal property had with his wife Fausta Macasaquit) for the recovery of an indebtedness chargeable against said conjugal property HELD No RATIO No complaint can be brought against him for the recovery of an indebtedness chargeable against said conjugal property, and that the action should be instituted in the testamentary proceedings of the deceased Fausta Macasaquit in the manner provided by law, by filing it first with the committee on claims.The probate proceedings of the deceased Fausta Macasaquit were instituted in accordance with Act No. 3176 reading:
SEC. 685. When the marriage is dissolved by the death of the husband or wife, the community property shall be inventoried, administered, and liquidated, and the debts thereof shall be paid, in the testamentary or intestate proceedings of the deceased spouse, in accordance with the provisions of this Code relative to the administration and liquidation and partition proceeding, unless the parties, being all of age and legally capacitated, avail themselves of the right granted to them by this Code of proceeding to an extrajudicial partition and liquidation of said property. In case it is necessary to

66 Phil 594 November 28,1938; Avancena NATURE Action for annulment of sale of the property made by the sheriff FACTS Spouses Eulalio Calma and Fausta Macasaquit were the owners of the property described in the complaint, being their conjugal property. They were also indebted to Esperanza Taedo, chargeable against the conjugal property, in the sums of P948.34 and P247 (w/


sell any portion of said community property in order to pay the outstanding debts and obligations of the same, such sale shall be made in the manner and with the formalities established by this Code for the sale of the property of deceased persons. Any sale, transfer, alienation or disposition of said property effected without said formalities shall be null and void, except as regards the portion that belonged to the vendor at the time the liquidation and partition was made.

living, had ceased and passed to the administratrix Maria Calma appointed in the testamentary proceedings of Fausta Macasaquit. Having to be filed according to Act No. 3176 under the provisions of the Code of Civil Procedure relative to the administration and liquidation of properties of deceased persons, it should be filed before the committee on claims in said testamentary proceedings and, at all events, thereafter, by appeal to the corresponding Court of First Instance, in an ordinary action against the judicial administratrix. On the other hand, the property described in the complaint is included among the inventoried properties subject to the testamentary proceedings of Fausta Macasaquit because, belonging as it does to the conjugal property, it should, under Act No. 3176, be included among the properties of the testamentary proceedings. DISPOSITION The sale of the property described in the complaint, made by the sheriff in execution of the judgment rendered against Eulalio Calma for the collection of the indebtedness chargeable against the conjugal property, is void and said property should be deemed subject to the testamentary proceedings of the deceased Fausta Macasaquit for all the purposes of that case.

Prior to this Act, the liquidation of conjugal property was made under section 685 of the Code of Civil Procedure. Interpreting the scope of Act No. 3176, this court, in the case of Caragay vs. Urquiza, said that the amendment introduced by this Act consists in authorizing the institution of testate or intestate proceedings for the settlement of the estate of a deceased spouse or of an ordinary action for the liquidation and partition of the property of a conjugal partnership. It should be understood that these remedies are alternative, and not cumulative, in he sense that they cannot be availed of at he same time, inasmuch as an anomalous and chaotic situation would result if conjugal property were administered, liquidated and distributed at the same time in a testamentary proceeding and in an ordinary action for liquidation and partition of property. Consequently, the testamentary proceedings of Fausta Macasaquit having been instituted, the liquidation and partition of the conjugal property by reason of her marriage to Eulalio Calma should be made in these proceedings, to the exclusion of any other proceeding for the same purpose. In the case of Cruz vs. De Jesussaid that when the marriage is dissolved by the death of the wife, the legal power of management of the husband ceases, passing to the administrator appointed by the court in the testate or intestate proceedings instituted to that end if there be any debts to be paid. This doctrine has been confirmed in the other case of Ona vs. De Gala REASONING When Esperanza Tanedo brought suit against Eulalio Calma for the payment of the sums, the power of Eulalio Calma. legal administrator of the conjugal property while Fausta Macasaquit was

- decision was rendered against Kuntze, from which judgment, he appealed to the CA. - While the case was pending appeal, Kuntze died on June 19, 1972. Paredes was duly notified. - Carmencita D. Navarro Kuntze, administratrix of the estate of the deceased, was substituted in his place as party in the appealed case. CA dismissed the appeal for appellant's failure to file the printed record on appeal, and so the record of the case was ordered remanded respondent court. - A motion for execution was filed by Paredes. The provincial Sheriff of Rizal levied on the properties of Kuntze (now substituted by the Administratrix Carmencita) consisting of 2 lots. In the auction sale conducted by the Sheriff, Paredes being the highest bidder, acquired said lot. - However, in spite of a Motion to Quash the Writ of Execution filed by Carmencita and still pending resolution, Parades sold the property he acquired in execution sale in favor of his co-petitioner, Victorio Ignacio on October 10, 1973. - CFI, on November 2, 1973, issued an order setting aside the Writ of Execution and the Sheriff's Sale and Public Auction of the property, without prejudice to the filing of the judgment as a claim in the proceedings for settlement of the estate of the deceased. ISSUES 1. WON the death of Kuntze arrested the judgment against him. 2. WON Paredes erred in executing on the properties of Kuntze. HELD 1. NO - In the case of a money claim, where the defendant dies during the pendency of his appeal from the judgment rendered against him, the appeal should not be dismissed; it should continue, but the deceased defendant should be substituted by his legal representative, namely, the executor or administrator of the estate. If the judgment of the lower court is affirmed, the plaintiff must afterwards go to the probate court for an order directing the executor or administrator to satisfy the judgment. The CFI that originally rendered the judgment has no power to order its execution and a levy on the properties of the deceased because the same are already in custodia legis in the probate court where administration proceedings for the

61 SCRA 527 FERNANDEZ ; December 26, 1974 NATURE This is a petition for certiorari impugning the legality of the order of CFI nullifying its order of execution issued on August 18, 1973 pursuant to the judgment that has become final and executory on June 28, 1973, and the corresponding levy on execution on August 22, 1973 and the public auction sale held on October 2, 1973. FACTS - Severino Paredes filed a suit on Jan. 4, 1964 for the collection of separation and overtime pays against his employer, August Kuntze.


settlement of the estate of the deceased defendant are already pending. - Sec.21 Rule 3 of the ROC provides: When the action is for recovery of money, debt or interest thereon, and the defendant dies before final judgment in the Court of First Instance, it shall be dismissed to be prosecuted in the manner especially provided in these rules. Conversely, if the defendant dies after final judgment has been rendered by the CFI, as in the case at bar, the action survives. Consequently, contrary to respondents' claim, the judgment against the deceased Kuntze became final and executory; it was not arrested by his death. 2. YES - The proper remedy of plaintiff Paredes should have been to file his claim in the administration proceedings of the estate of the deceased defendant Kuntze where Carmencita is the administratrix - Judgment for money against the decedent, must be filed at the time limited in the notice (to creditors) before the court where the administration proceeding involving the estate of the deceased Kuntze are pending. Sec.5, Rule 86 of the ROC provides: 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 for the last sickness of the decedent and judgment for money against the decedent, must be filed (before the probate court) within the time limited in the notice (to the creditors); 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. - The judgment for money against the deceased stands in the same footing as 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 for the last sickness of the decedent although the validity of the money claim covered by a judgment against the decedent which has already become final and executory can no longer be litigated in the court where administration proceedings for the settlement of the properties of the deceased are still pending, unlike the other money claims whose validity may yet be challenged by the executor or administrator.

- In the case of Aldamiz vs. Judge of the Court of First Instance of Mindoro, it was already held that the writ of execution was not the proper procedure for the payment of debts and expenses of the administration. The proper procedure is for the court to order the administratrix to make the payment; and if there is no sufficient cash on hand, to order the sale of the properties and out of the proceeds to pay the debts and expenses of the administration. Domingo vs. Garlitos had the same ruling with respect to the payment of - The legal basis for such a procedure is the fact that in the testate or intestate proceedings to settle the estate of a deceased person, the properties belonging to the estate are under the jurisdiction of the court and such jurisdiction continues until said properties have been distributed among the heirs entitled thereto. During the pendency of the proceedings all the estate is in custodia legis and the proper procedure is not to allow the sheriff, in the case of court judgment, to seize the properties but to ask the court for an order to require the administrator to pay the amount due from the estate and required to be paid (Domingo vs. Garlitos) DISPOSITIVE Order of CFI AFFIRMED and the petition for certiorari is DISMISSED, "without prejudice to the filing of the judgment in favor of Paredes as a claim in the proceedings for the settlement of the estate of Kuntze.


83 SCRA 777 CONCEPCION JR; June 27, 1978 NATURE: Petition for certiorari and mandamus FACTS: - on June 22, 1962, the spouses Dominador and Adoration Danan constituted a mortgage over their fish-pond and residential lot in Lubao, Pampanga, in favor of the spouses Benito and Ines Manalansan. The mortgage was to guarantee the payment of P62,574.80, within 1 year, with 12% interest compound annually. - The Danans failed to pay despite demands, so the Manalansans filed an action for foreclosure of the mortgage. The lower court ruled in favor of the Manalansans ordering the Danans to pay the

obligation and interest, plus moral damages, and in case of failure to do so, the mortgaged properties will be sold at public auction. The Danans appealed to the CA, which only deleted moral damages. SC denied their appeal. - A writ of execution was issued, but when the sheriff was about to levy upon the mortgaged properties, Adoracion Danan opposed and filed a motion to set aside the writ of execution for reasons that the properties are in custodia legis and that the judgment should be presented as a money claim in the Intestate Estate of Dominador Danan, pursuant to Sec. 5, Rule 86 of the Revised Rules of Court. She claimed that Dominador Danan had died on Nov 7, 1970, while the case was pending appeal before the CA, and intestate proceedings for the settlement of his estate had already been instituted. (Note that the fact of death was not reported to the court. Adoracion was appointed administratix of Dominadors estate.) - Judge Castaneda ordered the sheriff to desist from enforcing the writ of execution, and after hearing, set it aside. The judge ordered that the judgment (sought to be executed) be served instead to the administratix of the estate of Dominador Danan. - The Manalansans MR was denied, and as they were unable to obtain relief, they filed this petition with the SC. They contend that Judge Castaneda abused his discretion, amounting to lack of jurisdiction, in delegating the execution of a judgment to the probate court which has no jurisdiction to enforce a lien on property. ISSUE: WON the probate court has jurisdiction to enforce a lien on property. HELD: NO. The mortgaged property in question does not belong to the estate of the late Salvador Danan, and the probate court has no jurisdiction over the property in question. - The saving clause in Sec. 7, Rule 86 of the Revised Rules of Court, [which then read: ...but nothing herein contained shall prohibit the executor or administrator from redeeming the property mortgaged or pledged, by paying the debt for which it is held as security, under the direction of the court, if the court shall adjugde it to be for the best interest of the estate that such redemption shall be made.] does not confer


jurisdiction upon the probate court, of limited jurisdiction, to enforce a mortgage lien. Nor can it be relied upon as sufficient ground to delegate the execution of the judgment of foreclosure to the probate court. The rule merely reserves a right to the executor or administrator of an estate to redeem a mortgaged or pledged property of a decedent which the mortgage or pledgee has opted to foreclose, instead of filing a money claim with the probate court, under Section 7 of Rule 861 . While the redemption is subject to the approval of the probate court, the exercise of the right is discretionary upon the said executor or administrator and may not be ordered by the probate court upon its own motion. - Besides, the action filed is for the foreclosure of a mortgage, or an action to enforce a lien on property. Under Sec. 1, Rule 87 of the Revised Rules of Court [which then read: No action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; but actions to recover a real or personal property, or an interest therein, from the estate, or to enforce a lien thereon, and actions to recover damages for an injury to person or property, real or personal may be commenced against him..] it is an action which survives. Being so, the judgment rendered therein may be enforced by a writ of execution. - Testamentaria de Don Amadeo Matute Olave vs. Canlas: an action to enforce a lien on property may be prosecuted by the interested person against the executor or administrator independently of the testate or intestate proceedings "for the reason that such claims cannot in any just sense be considered claims
1 Then reads: Execution in case of death of party. -where a party dies after the entry of the judgment or order, execution thereon may issue, or one already issued may be enforced in the following cases: (a) In case of the death of the judgment creditor, upon the application of his executor or administrator, or successor in interst; (b) In case of the death of the judgment debtor, against his executor or administrator or successor in interest, if the judgment be for the recovery of real or personal property, or the enforcement of a lien thereon; (c) In case of death of the judgment debtor after execution is actually levied upon any of his property, the same may be sold for the satisfaction thereof, and the officer making the sale shall account to corresponding executor or administrator for any surplus in his hands.

against the estate, but the right to subject specific property to the claim arises from the contract of the debtor whereby ha has during life set aside certain property for its payment, and such property does not, except in so far as its value may exceed the debt, belong to the estate. - The fact that Salvador Danan died before, and not after the decision of the CA became final and executory will not nullify the writ of execution already issued. In Miranda, vs. Abba: Sec 7 Rule 39 cannot be so construed as to invalidate the writ of execution already issued in so far as service thereof upon the heirs or successors-ininterest of the defendant is concerned. It merely indicates against whom the writ of execution is to be enforced when the losing party dies after the entry of judgment or order. Nothing therein, nor in the entire Rule 39, even as much as intimates that a writ of execution issued after a party dies, which death occurs before entry of the judgment, is a nullity. The writ may yet be enforced against his executor or administrator, if there be any, or his successors-in-interest. AQUINO concurring: - Sec 2, Rule 68 of the Rules of Court provides that the trial court, after hearing, shall order that the mortgage debt should be paid into court "Within a period of not less than ninety (90) days from date of service of such order". This provision cannot be literally complied with in case mortgagor appeals from the lower court's judgment. It would seem that the period for payment to court of mortgage debt should be reckoned from date of entry of judgment. Here, trial court ordered payment of the mortgage debt within 90 days "from date", without specifying what date is contemplated. The clerk of court in the writ of execution interpreted that phrase as 90 days from the date of the writ. - The trial court acted correctly in issuing the writ of execution. It erred in subsequently setting aside that writ and in directing that copy of judgment "be served to the administration" of intestate estate of Dominador, "thru the intestate court", "for the execution of said judgment." - The trial court justified that order by citing Sec 7, Rule 86 of the Rules of Court that in case the mortgagor dies, the executor or administrator of his estate may redeem the mortgaged property under the direction of the probate court. In the trial courts view, in order to implement that

provision, the probate court has to be apprised of the, mortgage debt so that it can decide whether the mortgaged property should be sold at public auction. This interpretation is erroneous. When the mortgagor died during the pendency of his appeal, the action for foreclosure was not extinguished because the claim against him is not a pure money claim but an action to enforce a mortgage lien. It is an action which survived his death and which can proceed independently of the intestate proceeding for the settlement of his estate (Secs. 16, 17 and 21, Rule 3 and sec. 1. Rule 87, ROC). - Sec 7, Rule 86 refers to a case where the mortgagor is already dead at the time the mortgagee decides to enforce his mortgage to lien. - The writ of execution should be served upon Adoracion Danan. It is incumbent upon her to apprise the probate court whether the mortgaged properties should be redeemed and to suggest to the probate court how funds could be raised for that purpose. That is how the provision in section 7, Rule 86 may be implemented. The directive in the writ of execution is a directive to redeem the mortgaged properties within the ninety-day period.