SpecPro Round 2 Digests

8/3/2019 SpecPro Round 2 Digests

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LIM V DIAZ-MILLAREZ18 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 forhis appointment as judicial administrator of theestate of the deceased.- The petition alleged that the deceased left norelatives such as descendants, ascendants orsurviving spouse, except collaterals.- Basilisa Diaz-Millarez, claiming to be a widow ofthe deceased filed an opposition on two grounds:1. that the petitioner has an adverse interest inthe estate; and2. that the properties of the estate are thesubject matter of a litigation between her asplaintiff and Cirilo Lim as defendant- When the case was called for hearing, bothparties manifested the existence of a litigationbetween 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 whichcertified the appeal to SC.- In the Civil Case: Diaz-Millarez sought torecover from Lim 1/2 of the total amount ofP22,000 allegedly delivered to him by her and thedeceased Millarez on various occasions and todeclare her as the owner of 1/2 of the profits andgains derived therefrom, on the ground that JoseMillarez and she used to live as husband and wifefor about 23 years and as such she is entitled to1/2 of the property held in common by them. Sheasserted further that since she contributedcapital and labor to the tobacco business in which

she and the deceased were engaged and fromwhich they gave P22,000 in cash to Lim, shewould be entitled to 1/2 of the capital and 1/2 ofthe proceeds and profits derived from suchcapital.

ISSUEWON Lim may be appointed as administrator ofthe estate of the deceased.

HELD- NO. The claim which Basilisa has against Ciriloin the civil case is based on her declared right toone-half of the estate of the deceased.

- It cannot, therefore, be denied that Cirilo Lim, asa relative of the deceased has some interestadverse to that of Basilisa. Shown to have someliabilities to Basilisa and to the estate as a whole,Cirilo cannot compatibly perform the duties of anadministrator.- In this jurisdiction, one is considered to beunsuitable for appointment as administrator

when he has adverse interest of some kind orhostility to those immediately interested in theestate.- The determination of a person's suitability forthe office of judicial administrator rests, to agreat extent, in the sound judgment of the courtexercising the power of appointment and said

judgment is not to be interfered with on appealunless the said court is clearly in error.Disposition Order appealed from affirmed.

TORRES vs. JAVIER34 Phil. 383;

Moreland; March 24, 1916

FACTS

-Two women are claiming to be the legal wife ofdeceased Tan Po Pic.Marta Torres objected to the appointment of anyexcept herself.

Juan Cailles Tan Poo, on behalf of the Chinesewoman Yu Teng New, opposed the appointmentof Marta Torres.-The probate court being unable to determinewho, if either, was the lawful wife of thedeceased, appointed a disinterested third person(Juan L. Javier) to act as administrator.-This appeal is taken by Marta Torres from thatorder of appointment.

ISSUE

WON the probate court may validly appoint adisinterested third person as the administrator ofthe estate

HELDYES, the court had a right in view of thecontroversy between the women to name adisinterested third person as administrator andleave the controversy between them to be settledin the administration proceedings at the propertime.-The probate court did not find as a fact thatthere was a wife in China. The court consideredthe facts and circumstances as they werepresented in the proceedings and upon the whole

believed it for the best interest of all concernedto appoint as administrator a disinterested thirdperson, particularly in view of the fact that therewas likely to be litigation between Marta Torresand the Chinese wife as to which is in fact hislegal wife and entitled to an interest in the estateof the deceased Tan Po Pic.DispositionJudgment affirmed.

PARAS V NARCISO35 PHIL 244

CARSON; November 16, 1916

FACTS:- The trial court denied probate of the will ofMariano Magsino on the ground that the wil wasprepared and signed by the witnesses after hisdeath.

ISSUES:WON the oppositor in the probate of the will had

sufficient interest to be allowed to maintain hisopposition

HELD: YESRatioThe admission to probate of a will may beopposed or contested by, and only by, personshaving some interest in the estate which will beaffected and concluded by the probate of theproposed will. However, the appellant herein didnot make an objection in the trial court as to theintervention of the oppositor.Reasoning The mere fact that a stranger hasbeen permitted to oppose or contest the probateof a will is not reversible error and does notinvalidate the proceedings where no objection is

interposed by any of the parties in interest .Thejudgment of the court in probate proceedings isnot based on the fact that there is or is notopposition to the probate of the will but upon theproduction of evidence which discloses that thereare or are not sufficient grounds for the probateof the will as propounded; and the reason for therule excluding strangers from contesting the will,is not that thereby the court may be preventedfrom learning facts which would justify ornecessitate a denial of probate, but rather thatthe courts and the litigants should not bemolested by the intervention in the proceedingsof persons with no interest in the estate which

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would entitle them to be heard with relationthereto.- In the case at bar, no objection was made as tothe intervention of the oppositor. Further, it is tobe observed that the judgment of the court wasbased on evidence submitted by the oppositor.No objection was made on the ground that it wassubmitted by a stranger. Having been admitted

to record without objection, and beingcompetent, relevant and material, and conclusivein support of the judgment of the trial court, itwould be absurd for us to hold that the judgmentbelow erred in basing his judgment thereon,merely on the ground that on appeal it is made toappear or is admitted that the contestant had nointerest in the estate. Whether the contestanthad or had not any right to intervene, theevidence submitted at the trial without objection,conclusively sustains the findings of the trial

judge on which he properly based his denial ofprobate.

DURAN V DURANBengzon; June 14, 196730 SCRA 331

FACTS-Pio Duran died without testament.-Subsequent to his death, Cipriano Duran, one ofthe surviving brothers, executed a publicinstrument assigning and renouncing hishereditary rights to the decedent's estate in favorof Josefina Duran for consideration.-A year later Cipriano Duran filed a petition forintestate proceedings to settle Pio Duran's estate,further asking that he be named theadministrator. Josefina Duran filed an opposition,

praying for its dismissal upon the ground that thepetitioner is not an "interested person" in theestate, in view of the deed of transfer andrenunciation afore-stated. Replying to this,Cipriano alleged that Josefina Duran was not thedecedents wife. Anent the deed of assignment,he contended that the same was procured thrufraud, with gross inadequacy of price and vitiatedby lesion.-Another brother of the decedent, Miguel Duran,filed a petition to be joined as co-petitioner ofCipriano. Josefina Duran moved to strike out saidpetition as an improper attempt to intervene inthe case.

-Court of First Instance dismissed the action forlack of interest in the estate. Said lack of interestwas premised on the deed of transfer executedby Cipriano, regarding which the court declareditself without power to examine in saidproceedings, collaterally, the alleged fraud,inadequacy of price and lesion that would renderit rescissible or voidable.

-Cipriano appeals relying on In Re Irene Santos.

ISSUEWON an assignment by one heir of his share inthe estate to a co-heir amounts to a partitionneeding approval by the settlement court to beeffective and that the assigning heir does not losehis status as a person interested in the estate,even after said assignment is approved by thecourt.

HELDYes, but such does not apply to the case at bar.-The situation in the Santos case involves anassignment between co-heirs pendente lite,

during the course of settlement proceedings,properly and validly commenced. At the time ofsaid assignment, therefore, the settlement courthad already acquired jurisdiction over theproperties of the estate. As a result, anyassignment regarding the same had to beapproved by said court. And since the approval ofthe court is not deemed final until the estate isclosed, the assigning heir remains an interestedperson in the proceedings even after saidapproval, which can be vacated, is given.In the present case, however, the assignmenttook place when no settlement proceedings waspending. The properties subject matter of theassignment were not under the jurisdiction of a

settlement court. Allowing that the assignmentmust be deemed a partition as between theassignor and assignee, the same does not needcourt approval to be effective as between theparties. An extra judicial partition is valid asbetween the participants even if the requisites ofSec 1, Rule 74 for extrajudicial partition are notfollowed, since said requisites are for purposes ofbinding creditors and non-participating heirs only(Hernandez vs. Andal, 78 Phil. 196). Should it becontended that said partition was attended withfraud, lesion or inadequacy of price, the remedyis to rescind or to annul the same in an action forthat purpose. And in the meanwhile, theassigning heir cannot initiate a settlement

proceedings, for until the deed of assignment isannulled or rescinded, it is deemed valid andeffective against him, so that he is left withoutthat "interest" in the estate required to petitionfor settlement proceedings.Miguel Durans petition amounted to a petition tointervene in the settlement proceedings. As aptlyruled by the court a quo since there was really no

settlement proceedings in the first place, thepetition to intervene must be denied.Finally, although Josefina Duran prayed to beappointed administratrix, her doing so did notadmit to ratification of the petition for settlementunder the ruling in Eusebio vs. Valmores, sinceshe did so merely by way of an alternativeprayer, should her motion to dismiss fail. And saidmotion to dismiss was properly sustained.

DispositionAffirmed

JULITA RELUCIO V SAN JOSE

G.R. No. L-4783May 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 merelymade 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

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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 byarguing 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.

ISSUEWON appointment of EPCIB as SPECIALADMINISTRATOR is proper

HELD- NO. The case does not fall under any

circumstance in which a special administratormay be appointed.- The cases in which a special administrator maybe appointed are specified in section 1 of Rule 81of the Rules of Court which provides as follows:"When there is delay in granting letterstestamentary or of administration occasioned byan appeal from the allowance or disallowance ofa will, or from any other cause, the court mayappoint a special administrator to collect andtake charge of the estate of the deceased andexecutors or administrators thereuponappointed."

- A special administrator may also be appointedin a case covered by section 8 of Rule 87 whichprovides as follows: "If the executor oradministrator has a claim against the estate herepresents, he shall give notice thereof, inwriting, to the court, and the court shall appoint aspecial administrator who shall, in the adjustmentof such claim, have the same power and besubject to the same liability as the generaladministrator or executor in the settlement ofother claims. The court may order the executor oradministrator to pay to the special administratornecessary funds to defend such claim."- Pending her appeal from the order of January15, 1951, the petitioner had the right to act as

administratrix. If the respondent Judge haddecreed the immediate execution of the order of

January 15, 1951, Rolando Relucio would then bethe administrator pending petitioner's appeal.Consequently, the respondent Judge exceededhis jurisdiction in appointing the respondentEquitable Banking Corporation as specialadministrator.

MALOLES V PHILLIPS324 SCRA 172

MENDOZA; Jan 31, 2000

NATUREReview on certiorari of 2 CA decisions which ruledthat petitioner has no right to intervene in thesettlement 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 hiswill 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 inhis will as sole legatee and devisee the Arturo deSantos Foundation, Inc; that he disposed by hiswill his properties with an approximate value ofnot less than P2M; and that copies of said willwere in the custody of the named executrix,private respondent Pacita de los Reyes Phillips.-Feb 16, 1996: Judge Gorospe issued an ordergranting the petition and allowing the will. Dr. DeSantos died 10 days later.-April 3, 1996: petitioner Octavio S. Maloles II fileda motion for intervention claiming that, as theonly child of Alicia de Santos (testator's sister)and Octavio L. Maloles, Sr., he was the sole full-blooded nephew and nearest of kin of Dr. DeSantos. He likewise alleged that he was a creditorof the testator. Petitioner thus prayed for thereconsideration of the order allowing the will andthe issuance of letters of administration in hisname.-On the other hand, Phillips, the wills designatedexecutrix, filed a motion for the issuance ofletters testamentary with Branch 61. Later,however, she moved to withdraw her motion. Thiswas granted, while petitioner was required to filea memorandum of authorities in support of hisclaim that said court still had jurisdiction to allowhis intervention.

-Petitioner filed his memorandum of authoritieson May 13, 1996. Meanwhile, Phillips, whowithdrew her motion for the issuance of letterstestamentary, refiled a petition for the same withthe Makati RTC, docketed as Sp. Proc. No. M-4343, assigned to Branch 65.-Upon Phillip's motion, Judge Abad Santos ofBranch 65 issued an order, dated June 28, 1996,

appointing her as special administrator of Dr. DeSantos's estate.-Petitioner sought to intervene in M-4343 and toset aside the appointment of Phillips as specialadministrator. He reiterated that he was thenearest of kin of the testator; that he came toknow of the existence of M-4343 only byaccident; that the probate proceedings in M-4223before Branch 61 of the same court was stillpending; that Phillips misdeclared the true worthof the testator's estate; that Phillips was not fit tobe the special administrator of the estate; andthat petitioner should be given letters ofadministration for the estate of Dr. De Santos.-Aug 28, 1996: Judge Abad Santos ordered the

transfer of M-4343 to Branch 61, on the groundthat it is related to the case before Judge Gorospeof RTC Branch 61.-It appears, however, that in M-4223, JudgeGorospe had denied on Aug 26, 1996 petitioner'smotion for intervention. Petitioner brought thismatter to the CA which upheld the denial ofpetitioner's motion for intervention.-Meanwhile, Judge Gorospe issued an order,dated Sep 4, 1996, returning the records of M-4343 to Branch 65. The order states that there isno related case involving the ESTATE OFDECEDENT ARTURO DE SANTOS pending beforeBranch 61; there is, however, a case filed byARTURO DE SANTOS, as petitioner under Rule 76

for the Allowance of his will during his lifetimedocketed as M-4223 which was already decidedon 16 Feb 1996 and has become final; after itbecame final, Pacita de los Reyes Phillips filed aMOTION FOR THE ISSUANCE OF LETTERS

TESTAMENTARY, which was subsequentlywithdrawn after Branch 61 ruled that the motioncould not be admitted as the subject matterinvolves a separate case under Rule 78, andmovant withdrew her motion and filed M-4343;Octavio de Santos Maloles II filed a MOTION FORINTERVENTION before M-4223 and this wasalready DENIED likewise for the same groundsthat the matter is for a separate case to be filedunder Rule 78.

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-Initially, Judge Abad Santos appeared firm in hisposition that it would be improper for Branch 65to hear and resolve M-4343, considering that theprobate proceedings were commenced withBranch 61. He thus ordered the transfer of therecords back to the latter branch. However, helater recalled his decision and took cognizance ofthe case to expedite the proceedings:

Considering the refusal of the Hon. Gorospe ofBranch 61 to continue hearing this casenotwithstanding the fact that said branchbegan the probate proceedings of the estate ofthe deceased and must therefore continue toexercise its jurisdiction to the exclusion of allothers, until the entire estate of the testatorhad been partitioned and distributed as perOrder dated 23 Sep 1996, Branch 65 shall takecognizance of the petition if only to expeditethe proceedings, and under the concept thatthe Makati RTC is but one court.

-Nov 4, 1996: Judge Abad Santos grantedpetitioner's motion for intervention. Phillips MFRdenied by the trial court. She then filed a petition

for certiorari in the CA which set aside the trialcourt's order on the ground that petitioner hadnot shown any right/interest to intervene in M-4343.

ISSUES1. WON Branch 61 has lost jurisdiction (and WONBranch 65 acquired jurisdiction over the petitionfor issuance of letters testamentary)2. WON the petitioner has a right to intervene3. WON private respondent is guilty of forumshopping in filing her petition for issuance ofletters testamentary with Branch 65 knowing fullywell that the probate proceedings involving thesame estate of the decedent is still pending with

Branch 61.

HELD1. YES (YES)Reasoning Petitioner contends that the probateproceedings in Branch 61 did not terminate uponthe issuance of the order allowing the will of Dr.De Santos. Citing Santiesteban v. Santiestebanand Tagle v. Manalo, he argues that theproceedings must continue until the estate is fullydistributed to the lawful heirs, devisees, andlegatees of the testator, pursuant to Rule 73, sec1. Consequently, petitioner contends that Branch65 could not lawfully act upon private

respondent's petition for issuance of letterstestamentary.In cases for the probate of wills, it is well-settledthat the authority of the court is limited toascertaining the wills extrinsic validity.Ordinarily, probate proceedings are institutedonly after the death of the testator, so much sothat, after approving and allowing the will, the

court proceeds to issue letters testamentary andsettle the estate of the testator. The cases citedby petitioner are of such nature. In fact, in most

jurisdictions, courts cannot entertain a petitionfor probate of the will of a living testator underthe principle of ambulatory nature of wills.However, Art. 838, Civil Code authorizes the filingof a petition for probate of the will filed by thetestator himself. Rule 76, sec 1 likewise providesthis.After a will has been probated during the lifetimeof the testator, it does not necessarily mean thathe cannot alter or revoke the same before hisdeath. Should he make a new will, it would alsobe allowable on his petition, and if he should die

before he has had a chance to present suchpetition, the ordinary probate proceeding afterthe testator's death would be in order.

Thus, after the allowance of the will of Dr. DeSantos, there was nothing else for Branch 61 todo except to issue a certificate of allowance ofthe will pursuant to Rule 73, sec 12. There is,therefore, no basis for the ruling that Branch 61continues 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 thesettlement of the estate of deceased persons asheld in Garcia Fule v. CA.Indeed, the jurisdiction over probate proceedings

and settlement of estates with approximate valueof over P100K (outside Metro Manila) or P200K (inMetro Manila) belongs to the RTC under BP 129,as amended. The different branches comprisingeach court in one judicial region do not possess

jurisdictions independent of and incompatiblewith each other.It is noteworthy that, although Rule 73, sec 1applies insofar as the venue of the petition forprobate of the will of Dr. De Santos is concerned,it does not bar other branches of the same courtfrom taking cognizance of the settlement of theestate of the testator after his death. As held inthe leading case of Bacalso v. Ramolote, thevarious branches of CFI are coordinate and co-

equal courts, and the totality of which is only oneCFI. The jurisdiction is vested in the court, not inthe judges. And when a case is filed in onebranch, jurisdiction over the case does not attachto the branch or judge alone, to the exclusion ofthe other branches. Trial may be held orproceedings continue by and before anotherbranch or judge.

2. NO.Reasoning Petitioner claims the right tointervene in and oppose the petition for issuanceof letters testamentary filed by privaterespondent. He argues that, as the nearest nextof kin and creditor of the testator, his interest inthe matter is material and direct.In ruling that petitioner has no right to intervenein the proceedings before Branch 65, the CA heldthat Maloles claim to being a creditor of theestate is a belated one, having been raised forthe first time only in his reply to the opposition tohis motion to intervene, and, as far as the recordsshow, not supported by evidence; the oppositionmust come from one with a direct interest in the

estate or the will, and Maloles has none.Moreover, the ground cited that the executrix hasdeliberately misdeclared the truth worth andvalue of the estate, is not relevant to thequestion of her competency to act as executor.Rule 76, sec 2 requires only an allegation of theprobable value and character of the property ofthe estate. The true value can be determinedlater on in the course of the settlement of theestate.Rule 79, sec 1 provides:

Opposition to issuance of letters testamentary.Simultaneous petition for administration. Anyperson interested in a will may state in writingthe grounds why letters testamentary should

not issue to the persons named therein asexecutors, or any of them, and the court, afterhearing upon notice, shall pass upon thesufficiency of such grounds. A petition may, atthe same t ime, be f iled for letters ofadministration with the will annexed.

Under this provision, "interested person" is onewho would be benefited by the estate, such as anheir, or one who has a claim against the estate,such as a creditor, and whose interest is materialand 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" ofthe testator. It is a fundamental rule oftestamentary succession that one who has no

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compulsory or forced heirs may dispose of hisentire estate by will.Nor does he have any right to intervene in thesettlement proceedings based on his allegationthat he is a creditor of the deceased. Since thetestator instituted or named an executor in hiswill, it is incumbent upon the Court to respect thedesires of the testator. As stated in Ozaeta v.

Pecson: The choice of his executor is a preciousprerogative of a testator, a necessaryconcomitant of his right to dispose of hisproperty in the manner he wishes. It is naturalthat the testator should desire to appoint one ofhis confidence, one who can be trusted to carryout his wishes in the disposal of his estate. Thecurtailment of this right may be considered acurtailment of the right to dispose.

Only if the appointed executor is incompetent,refuses the trust, or fails to give bond may thecourt appoint other persons to administer theestate.3. NO.

Reasoning According to petitioner, there isidentity of parties, rights asserted, and reliefsprayed for in the two actions which are foundedon the same facts, and a judgment in either willresult in res judicata in the other.

The petition for probate was filed by Dr. DeSantos, the testator, solely for the purpose ofauthenticating his will. Upon the allowance of hiswill, the proceedings were terminated.On the other hand, petition for issuance of letterstestamentary was filed by private respondent, asexecutor of the estate of Dr. De Santos, for thepurpose of securing authority from the Court toadminister the estate and put into effect the willof the testator. The estate settlement

proceedings commenced by the filing of thepetition terminates upon the distribution anddelivery of the legacies and devises to thepersons named in the will. Clearly, there is noidentity between the two petitions, nor was thelatter filed during the pendency of the former.DispositionWHEREFORE, the petition is DENIEDand the decisions of the Court of Appeals arehereby AFFIRMED.

TAN v. GO CHIONG LEE46 PHIL 200

MALCOLM; September 25, 1924

FACTS- In 1920, Go Bung Kiu died in China. Hisencargado Go Chiong Lee was appointed specialadministrator of his estate, with Tio Liok, AngChangco, and Manuel Go Tianuy as sureties onhis bond in the sum of P30,000. A month later, GoChiong Lee's status was changed to that ofadministrator. He filed a motion that he be

allowed to operate two stores belonging to theestate, one in Cebu City and the other in Toledo,Cebu. The court granted the motion but the judgeadded 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 andwith the same sureties was filed by theadministrator, and letters of administration wereissued in his favor. Go Chiong Lee continued todischarge his duties as administrator until he wasrelieved by Maximina Tan in 1921. During thisperiod, he filed 3 reports each covering periodsmore than a month long.- The committee on claims rendered its report in1921, admitting as proved, claims amounting to

P69,029.91. The court issued an order to payeach and everyone of the persons mentioned inthe report the whole amount appearing thereinwithout any preference either as to the amount oras to the time of payment. Go Chiong Lee paidthe creditors of the estate P16,700.39. Itappeared that during his administration, theestate lost over P19,000 as the two stores hardlymade any sales such that the one in Toledo wasclosed.- Maximina Tan now sues Go Chiong Lee and hissureties on four causes of action, on amountstotaling P54,700. The trial court awardedP42,849.08 but limited the liabilities of thesureties to P30,000. The defendants appealed.

ISSUES1. WON Go Chiong Lee is liable for the lossesincurred by the estate during his administration.(1st and 3rd COA)2. WON Go Chiong Lee is liable for 850 sacks ofcorn, valued at P6,375, which he failed toinventory. (2nd COA)3. WON Go Chiong Lee is liable for the fact thatwhile some of the creditors have been paidentirely and others partially, some of themreceived absolutely nothing on account of the hitand miss method he followed. (4th COA)

HELD

1. NO.Ratio The standard of responsibility of theadministrator is best measured as in essence theresponsibility of a bailee. Like any bailee, he mustpursue his discretion honestly and in good faith,or he will become personally liable, to those whoare interested in the estate, for waste,conversion, or embezzlement. But where an

administrator, entrusted with the carrying on ofan estate, acts in good faith and in accordancewith the usual rules and methods obtaining insuch business, he will not be held liable for lossesincurred.Reasoning That monthly reports would havepossessed any particular virtue over the reportsactually submitted is hardly plausible. On thecontrary, that the losses sustained by the estateresulted from the risk necessarily attending theoperation of the two stores is a much morereasonable assumption. The only testimonyrefuting that of the former administrator comesfrom Vidal Reynes, a tailor, but did not impressthe Court. The personal responsibility of the

former administrator and the sureties on his bondfor losses incurred by the estate during hisadministration has not been proved.

2. YES.Ratio An administrator who has qualified shall,within 3 months after his appointment, return tothe court a true inventory of the real estate andof the goods, chattels, rights, and credits of thedeceased, which come into his possession orknowledge. The administrator shall be chargeablein his account with the goods, chattels, rights,and credits of the deceased, which come into hispossession. The administrator is accountable onhis bond along with the sureties for the

performance of these legal obligations.Reasoning The issue is one of fact. The Courtfollows the findings of the trial court if proof tosubstantiate such findings appears in the record.Here, such proof exists, which means that the

judgment appealed from must be affirmed in thisrespect.

3. NO.Ratio A personal representative will be protectedin the payment of a claim which has been dulyallowed or ordered paid by the court, although itshould not have been paid in full, unless it ismade to appear that such allowance of the claim,

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or order for the payment thereof, was obtainedthrough his collusion or bad faith.Reasoning After reading the order of the trialcourt relating to the distribution of the assetsamong the creditors, the impression of the Courtis that the administrator, although unwisely,attempted to follow the order to the best of hisability. Moreover, it is not at all certain but that

the estate will finally show enough on the profitside of the ledger either to pay all of the creditorsto the full extent of their claims, or to give tomost of the creditors who have not been paid aproportion similar to that of the creditors whohave been paid. In these same proceedings, theadministratrix on her motion, or the creditors attheir initiative, may recover the excessimprudently paid out to certain creditors.

Disposition Judgment is modified. The plaintiffshall only recover the amount of P6,375 (2nd COAre the 850 sacks of corn) with legal interest fromthe date the complaint was presented.

FLORES v FLORES48 Phil 982

ROMUALDEZ; September 19, 1924

FACTS- The administrator of the estate applied to thelower court for authority to sell certain propertiesof the inheritance.- TC denied the application because the questionabout the title to the property sought to be soldhad not as yet been finally decided.

ISSUEWON lower court erred in denying the application

HELDNO. The liquidation of an inheritance consists notonly in the payment of its debts, but also in thedetermination of its assets and properties. And asthe debts are to be paid out of said properties, itis obvious that there must first be determinedwhat properties can legally be disposed of by theadministrator, so that he may use themafterwards in the payment of the debts.DispositiveThe orders appealed from areaffirmed with the costs against the appellant.

LIZARRAGA HERMANOS V. ABADA40 PHIL 124

September 17, 1919

FACTS- Caponong died, owing plaintiffs sum of money.- His widow Abada was administratrix.Commissioners to appraise estate and pass onclaims against estate were appointed.- Abada leased Hacienda Coronacion to Zayco.

Abada married Alvarez. Lease was transferred toAlvarez by Zayco.- Nearly 7 yrs after death of Caponong, plaintiffsfiled suit in CFI against Abada personally and asadministratrix, alleging

> that Caponong owed plaintiffs P12783.74> that Abada, personally and asadministratrix, had been receiving moneyand effects used by her for HaciendaCoronacion> that account of defendant showed balancein favor of plaintiffs of P62437.15> that defendant recognized only aboutP14000 w/c however hadnt been paid.

- Defendant admits that she owed P8555.78 as

administratrix, and the balance was due by herpersonally.- Guardian of minor children of Caponong askedpermission to intervene. He denied the claim andalleged that the estate of Caponong didnt oweplaintiffs anything.- Parties presented motion stating that they madean amicable settlement. Court dismissed theaction.- The settlement was that

> defendants recognized that Caponongsestate was indebted to plaintiffs in sum ofP68,611.01, to be paid w/ 10% interest in 7equal annual installments> defendants agreed to give plaintiffs first

mortgage on all property of Caponong and allproperty belonging exclusively to Abada> defendants agreed to mortgage also thecarabaos on the hacienda

- Mortgage of the hacienda was executed. Butthe 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 byw/o paying anything> defendants refused to sign the agreementmortgaging the carabaos> defendants were about to transfer theirproperty not mortgaged

- Plaintiffs prayed for attachment on property ofdefendants. Court granted attachment order.- Plaintiffs filed a motion and asked court toappoint a receiver. Court granted this motion.Receiver took charge of property and defendantswere ousted from the house.- Abada and the guardian filed answer that

> claim of plaintiffs against the intestate

proceedings of Caponong had been allowedin sum of P12,783.74 by commissioners> property belonged to children of deceased> the only interest of Abada was herusufructuary interest in 1/6 of the property> all the property was in custodia legis andcould not be attached> the compromise agreement and themortgage executed were obtained throughfraud and false representation

- Judge dissolved the attachment and dischargedthe receiver. Judgment was also given forplaintiffs to recover from administratrix P8555.78w/ interest. Personal judgment was also givenplaintiffs against Abada and Alvarez for

P79970.21.- Abada appealed personally and asadministratrix.

ISSUES1. WON the compromise agreement and themortgage were valid2. WON the carabaos could be attached3. WON appointment of receiver was proper

HELD1. NO- The claim of plaintiffs against estate ofCaponong had been fixed. Court says that itsapproval was meant to include only the amt

actually due by estate; the balance was intendedto be approved as against Abada personally.- The record in Case 969 is presented. Plaintiffsallege that their orig claim against estate wasonly P12783.74 and that the balance was duefrom Abada as administratrix and personally w/ostating how much was owed by her personallyand how much was owed by her asadministratrix.- Can the court authorize the mortgage in thiscase? Commissioners shall pass upon claimsagainst estate. The law fixed the limit of theestates liability. The court couldnt charge it w/debts that were never owed by it. The

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administratrix could only charge the estate w/reasonable expenses of administration.- Estate owed plaintiffs less than P13000 whencommissioners passed on their claim. Part of thiswas paid, leaving balance of P8555.78. Plaintiffsmade advances to administratrix until their claimwas more than P68000.- It is urged that a major part of this P68000 is

administration expenses but no reason is givenwhy such expense of administration shld be sogreat.- Administration expense would be the necessaryexpenses of handling prop, protecting it againstdestruction / deterioration. But if plaintiffs let theadministratrix have money & effects til theirclaim grow to P68000, they cant be permitted tocharge this amt as expense of administration. Byexpense of administration we understand to bethe reasonable & necessary expense of caring forthe prop and managing it til debts are pd, and ofdividing it so as to partition it and deliver to theheirs.- The court could not approve a settlement

saddling upon the estate debts it never owed. Ifit did, its approval is a nullity.- Neither executors, unless specially authorizedby will, nor administrators, have power to bindestate of deceased by borrowing money.- Black v. Dressels Heirs: Statute grants nopower to administrator to borrow money uponmortgage of real estate of decedent. Such an actis foreign to the policy and purpose ofadministration w/c aims to close up, not tocontinue the estate.- Mortgage was void.- CFIs should exert themselves to close upestates w/in 12 mos fr time they are presented;they may refuse to allow any compensation to

executors / administrators who dont activelylabor to that end.2. NO- If they were in the name & possession ofadministratrix, they were in custodia legis, andcouldnt be attached.3. NO- Court should have taken other means to protectcreditor & wind up the estate.

JOCSON DE HILADO v NAVA69 Phil 1 (October 18, 1939)

Moran, J.

FACTSWhile intestate proceedings were ongoing, theadministratrix of the estate of deceased Rafael

Jocson, entered into a lease agreement withNava. This was done without the intervention ofthe court. The widow assailed the leaseagreement, which the court annulled.

ISSUEWON the court has the power to annul, in theintestate proceedings, a contract of leaseexecuted by the administratrix without itsintervention

RULINGNO. The court cannot annul the lease contract inintestate proceedings wherein it had no

jurisdiction over the person of the lessee. Thelease was only an act of administration, which arewithin the powers of administration of theadministratrix.

WILSON V REAR55 Phil. 44

JOHNS; October 16, 1930

FACTS-Wilson was appointed special administrator inthe settlement of the estate of Charles Rear-The estate had the following assets: realproperty valued at P15,300, and personalproperty valued at P5,250-The only debts against the deceased were one infavor of Sewal Fleming which then amounted toP800, and one in favor of J. S. Alano for P500, andif you include interest and accumulated taxes,the debt of the estate was P1,655.54.

- Wilson, on his own volition and without anyauthority or process of court, continued theoperation of the plantation. He employed Flemingas manager at a salary of P200 per month, and alarge number of men, so that at the time of thefiling of the amended final account, the totalexpense for labor was P2,863.62, and the amountof the manager's salary was P4,533.33.-In the end, as shown by his own report, theestate, which was appraised at P20,800, withactual debts of the deceased of only P1,655.54,was all wiped out and lost, and left with a deficitof P1,809.69.

ISSUE

WON the administrator was remiss in his duty assuch

HELDYes.-In this situation, it was the legal duty of theadministrator to at once apply to the court for anorder to sell the personal property to pay the

debts of the deceased and the expenses ofadministration.-The total of all claims against the deceased,including interest and taxes was P1,655.54, andthat the whole amount of the court costs andexpenses of administration was P1,767.04, thetotal of which is P3,422.58.-At the time of his appointment, the value of thepersonal property of the deceased which cameinto his possession was P5,800, and the wholeamount of claims against Rear, if the personalproperty of the estate had been promptly sold,would have been paid, and the estate would havea balance left of P2,377.42.-Wilson was appointed and qualified as

administrator, and the law imposed upon himlegal duties and obligations, among which was tohandle the estate in a business-like manner,marshal its assets, and close the estate withoutany unreasonable or unnecessary delay. He wasnot appointed to act for or on behalf of thecreditors, or to represent the interests of theheirs only. He should have administered theaffairs of the estate for the use and benefit alikeof all interested persons, as any prudent businessman would handle his own personal business.-An administrator, without a specific showing oran order of the court, does not have any legalright to continue the operation of the business inwhich the deceased was engaged, or to eat up

and absorb the assets of the estate in thepayment of operating expenses. -The law doesnot impose upon an administrator a high degreeof care in the administration of an estate, but itdoes 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 oradministrator ordinarily has no power to continuethe business in which the decedent was engagedat the time of his death xxx The normal duty ofthe personal representative in reference to suchbusiness is limited to winding it up xxx-The same principle is also laid down in Cyc., vol.18, p. 241, where it is said:

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"C. Engaging in Business 1. GENERAL RULE.The general rule is that neither an executor noran administrator is justified in placing or leavingassets in trade, for this is a hazardous use topermit of trust moneys; and trading lies outsidethe scope of administrative functions. So great abreach of trust is it for the representative toengage in business with the funds of the estate

that the law charges him with all the lossesthereby incurred without on the other handallowing him too receive the benefit of any profitsthat he may make, the rule being that thepersons beneficially interested in the estate mayeither hold the representative liable for theamount so used with interest, or at their electiontake all the profits which the representative hasmade by such unauthorized use of the funds ofthe estate."

BORJA v BORJAG.R. No. L-6622

Felix; July 31, 1957FACTSQuintin, Francisco, Crisanta and Juliana arelegitimate children of Marcelo de Borja who, uponhis demise sometime in 1924 or 1925, left aconsiderable amount of property. Intestateproceedings must have followed, and the pre-warrecords of the case either burned, lost ordestroyed during the last war, because the recordshows that in 1930 Quintin was already theadministrator of the Intestate Estate of Marcelo.In 1938, Quintin died, and Crisanto, son ofFrancisco, was appointed and took over asadministrator of the Estate until the thenoutbreak of the war. From then on and until thetermination of the war, there was a lull and stateof inaction in the intestate proceedings, untilupon petition filed by Miguel Dayco, asadministrator of the estate of his deceasedmother, Crisanta, who is one of heirs, forreconstitution of the records of this case. Thepetition was granted and the administrator wasordered to submit his report and a copy of theproject of partition.Crisanto filed several statement of account of hisadministration on different occasions but suchwere opposed by the heirs of Quintin on thegrounds that they were not detailed enough;income reported in said statement was verymuch less than the true and actual income of theestate and that the expenses appearing therein

were exaggerated and/or not actually incurred,and prayed that the statement of accountssubmitted by the administrator be disapprovedand prayed that the administrator be ordered todeposit with the Clerk of Court all books, receipts,accounts and other papers pertaining to theEstate of Marcelo.After a protracted and extensive hearing on the

matter (almost 30 years), the Court, finding theadministrator, Dr. Crisanto de Borja, guilty ofcertain acts of maladministration, held him liablefor the payment to the oppositors, the heirs ofQuintin, of 1/4 of the unreported income whichthe estate should have received.ISSUEWON the administrator is guilty of acts ofmaladministration (hence he may be heldaccountable for any loss or damage that theestate under his administration may incur)HELDYES(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 theproperty but the oppositors witnesses who weresome of the tenants of the Mayapyap propertytestified that they were paying their shares to theoverseers of Francisco and sometimes to his wife,which the administrator was not able tocontradict; and the lower Court found no reasonwhy the administrator would fail to takepossession of this property considering that thiswas even the subject of the agreement ofFebruary 16, 1940, executed by the heirs of theIntestate.(c) The Hacienda Jalajala located in Rizal:underdeclared income of the property devoted to

rice cultivation and forest land which yieldsconsiderable amount of marketable firewoods.(d) Ricefields in Cainta, Rizal: underdeclaredyields(e) Surcharges and penalties paid foradministrators failure to pay on time the taxesimposed on the properties under hisadministration. He advanced the reason that helagged in the payment of those tax obligationsbecause of lack of cash balance for the estate.But evidence show that the administratorreceived money from Juliana together withcertain papers pertaining to the intestate,asidefrom the checks in the name of Quintin.

(f) Sometime in 1942, a big fire razed numeroushouses in Pateros, Rizal, including that of Dr.Crisanto. Thereafter, he claimed that among theproperties burned therein was his safe containingP15,000 belonging to the estate under hisadministration. However, the administratortestified that the money and other papersdelivered by Juliana to him in 1939, 1939, were

saved from said fire. The administrator justifiedthe existence of these valuables by asserting thatthese properties were locked by Juliana de Borjain her drawer in the "casa solariega" in Paterosand hence was not in his safe when his house,together with the safe, was burned. This line ofreasoning is really subject to doubt, that it runscounter to the ordinary course of humanbehaviour for an administrator to leave in thedrawer of the "aparador" of Juliana the moneyand other documents belonging to the estateunder his administration, which delivery hasreceipted for, rather than to keep it in his safetogether with the alleged P15,000 also belongingto the Intestate. The subsequent orders of Judge

Platon also put the defense of appellant to badlight, for on February 6, 1943, the Court requiredCrisanto to appear before the Court ofexamination of the other heirs in connection withthe reported loss, and on March 1, 1943,authorized the lawyers for the other parties toinspect the safe allegedly burned. It isinconceivable that Judge Platon would still orderthe inspection of the safe if there was really anorder approving the loss of those P15,000. Wemust not forget, in this connection, that therecords of this case were burned and that at thetime of the hearing of this incident in 1951, JudgePlaton was already dead. The lower Court alsofound no reason why the administrator should

keep in his such amount of money, for ordinaryprudence would dictate that as an administrationfunds that come into his possession in a fiduciarycapacity should not be mingled with his personalfunds and should have been deposited in theBank in the name of the intestate.(g) Unauthorized expenditures1. Sums paid to the administrator's wife, as hisprivate secretary. In explaining this item, theadministrator alleged that he needed her servicesto keep receipts and records for him, and that hedid not secure first the authorization from thecourt before making these disbursementsbecause it was merely a pure administrativefunction.

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The keeping of receipts and retaining in hiscustody records connected with the managementof the properties under administration is a dutythat properly belongs to the administrator,necessary to support the statement of accountsthat he is obliged to submit to the court forapproval. If ever his wife took charge of thesafekeeping of these receipts and for which she

should be compensated, the same should betaken from his fee.2. The salaries of Pedro Enriquez, as collector ofthe Azcarraga property; of Briccio Matienzo andLeoncio Perez, as encargados, and of VicentePanganiban and Herminigildo Macetas as forest-guards were found justified, although unauthorized, as they appear to be reasonable andnecessary for the care and preservation of theIntestate.3. The expenses for salaries paid to specialpolicemen to act as special policemen duringharvest time because most of the workers tiltingthe Punta property were not natives of Jalajalabut of the neighboring towns and they were likely

to run away with the harvest without giving theshare of the estate if they were not policed. Thiskind of reasoning did not appear to be convincingto the trial judge as the cause for such fearseemed to exist only in the imagination. Grantingthat such kind of situation existed, the properthing for the administrator to do would have beento secure the previous authorization from theCourt if he failed to secure the help of the localpolice.

4. From the year 1942 when his house wasburned, the administrator and his family tookshelter at the house belonging to the Intestateknown as "casa solariega" which, in the Project ofPartition was adjudicated to his father, Francisco

de Borja. This property, however, remained underhis administration and for its repairs he spentfrom 1945-1950, P1465,14, duly receipted.None of these repairs appear to be extraordinaryfor the receipts were for nipa, for carpenters andthatchers. Although it is true that Rule 85, section2 provides that:SEC. 2. EXECUTOR OR ADMINISTRATOR TO KEEPBUILDINGS IN REPAIR. An executor oradministrator shall maintain in tenant able repairthe houses and other structures and fencesbelonging to the estate, and deliver the same insuch repair to the heirs or devisees whendirected so to do by the court.

Yet considering that during his occupancy of thesaid "casa solariega" he was not paying anyrental at all, it is but reasonable that he shouldtake care of the expenses for the ordinary repairof said house. Appellant asserted that had he andhis family not occupied the same, they wouldhave to pay someone to watch and take care ofsaid house. But this will not excuse him from this

responsibility for the disbursements he made inconnection with the aforementioned repairsbecause even if he stayed in another house, hewould have had to pay rentals or else take chargealso of expenses for the repairs of his residence.5. On the expenses for planting in the Caintaricefields: Remaining balance for others share.

The prevailing sharing system in this part of thecountry was on 50-50 basis.6. On the transportation expenses of theadministrator: unreceipted disbursements andnot ecnomicalFrom the report of the administrator, We arebeing made to believe that the Intestate estate isa losing proposition and assuming arguendo that

this is true, that precarious financial conditionwhich he, as administrator, should know, did notdeter Crisanto from charging to the depletedfunds of the estate comparatively big amountsfor his transportation expenses. Appellant tried to

justify these charges by contending that he usedhis own car in making those trips to Manila, Pasigand Cainta and a launch in visiting the propertiesin Jalajala, and they were for the gasolineconsumed. This rather unreasonable spending ofthe estate's fund prompted the Court to observethat one will have to spend only P0.40 fortransportation in making a trip from Pateros toManila and practically the same amount in goingto Pasig. From his report for 1949 alone,

appellant made a total of 97 trips to these placesor an average of one trip for every 3 1/2 days. YetWe must not forget that it was during this periodthat the administrator failed or refused to takecognizance of the prevailing rentals ofcommercial places in Manila that caused certainloss to the estate and for which he wasaccordingly held responsible.7. Other expenses:a. The administrator also ordered 40 booklets ofprinted contracts of lease in the name of theHacienda Jalajala which cost P150. As the saidhacienda was divided into 3 parts one belongingto this Intestate and the other two parts toFrancisco and Bernardo, ordinarily the Intestate

should only shoulder 1/3 of the said expense, butthe tenants who testified that those printed formswere not being used.b. Transportation expenses of one of the twocommissioners who prepared the Project ofPartition. He was not able to show or prove thatthe money intended and ordered by the Court tobe paid for the transportation expenses of the

commissioners was spent for the benefit of theestate as claimed.c. Payment to the Chief of Police on Jalajalaallegedly for the service of summons. He forgotprobably the fact that the local chiefs of policeare deputy sheriffs ex-officio.c. Attys fees - professional services rendered forthe defense of the administrator in a case whichwas decided against him, with costs. The costs ofthat litigation should not be borne by the estatebut by the administrator himself, personally.(e) Funds still in the possession of theadministrator.(f) On the sum of P13,294 for administrator'sfees:

It is not disputed that the administrator set asidefor himself and collected from the estate the sumof P13,294 as his fees from 1945 to 1951 at therate of P2,400 a year. There is no controversy asto the fact that this appropriated amount wastaken without the order or previous approval bythe probate Court. Neither is there any doubt thatthe administration of the Intestate estate byCrisanto de Borja is far from satisfactory.

Yet it is a fact that Crisanto de Borja exercisedthe functions of an administrator and is entitledalso to a certain amount as compensation for thework and services he has rendered as such. Now,considering the extent and size of the estate, theamount involved and the nature of the properties

under administration, the amount collected bythe administrator for his compensation at P200 amonth is not unreasonable and should thereforebe allowed.It might be argued against this disbursement thatthe records are replete with instances of highlyirregular practices of the administrator, such asthe pretended ignorance of the necessity of abook or ledger or at least a list of chronologicaland dated entries of money or produce theIntestate acquired and the amount ofdisbursements made for the same properties;that admittedly he did not have even a list of thenames of the lessees to the properties under hisadministration, nor even a list of those who owed

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back rentals, and although We certainly agreewith the probate Court in finding appellant guiltyof acts of maladministration, specifically in mixingthe funds of the estate under his administrationwith his personal funds instead of keeping acurrent account for the Intestate in his capacityas administrator, We are of the opinion thatdespite these irregular practices for which he was

held already liable and made in some instancesto reimburse the Intestate for amounts that werenot properly accounted for, his claim forcompensation as administrator's fees shall beallowed.

INTESTATE ESTATE OF CARMEN DE LUNA vs.IAC

GUTIERREZ, JR.; February 13, 1989

FACTS- Jose de Luna Gonzales and former Judge RamonIcasiano were appointed co-administrators of theestate of Carmen de Luna- Judge Icasiano died so Gonzales performed his

duties as sole administrator of the estate.- Gonzales through counsel filed a motion forallowances and payment of administrator'scommission in accordance with Section 7, Rule 85of the Rules of Court leaving the matter to thediscretion of the court.- Jose de Luna Gonzales died. His heirs filed in hisbehalf on March 10, 1980 an UrgentSupplemental Motion for allowances and paymentof administrator's commission or fees asking theamount of P100,000.00, which was later onincreased to P500,000.00. Heir Trinidad VillajuanVda. de Martinez filed an opposition to whichCatalina M. Gonzales, widow of the lateadministrator filed a reply.

- The trial court issued an order directing the newadministratrix Catalina M. Gonzales to submit acomplete and sworn inventory of all the goods,chattels, rights, credits and estate of thedeceased Carmen de Luna. The total of the realand personal property of the estate was listed atP10,751,189.97.- The trial court issued an order granting thecompensation asked for by the late administratoramounting to P500,000.00.- The heirs appealed to the Court of Appeals.- The Court of Appeals affirmed in toto the ordersappealed from.

- The appellants filed a motion for reconsiderationof the said decision.- The Court of Appeals modified the decision byreducing the amount to P4,312.50 based on Rule85 Section 7.

Arguments of the Oppositors:That the value of the estate increased by natural

accretion or by government re-assessment andnot thru the efforts of the late administrator; thatthe amount being claimed is highlyunconscionable and unreasonable and besides itis not in consonance with the amount specifiedunder Rule 85, Sec. 7 which allows only one-fourth per cent of the entire value of the estateand which must be allowed only after asettlement of the estate is finally made; that theamount being claimed as compensation is notitemized, hence, purely conjectural, hypotheticaland without basis in fact and in law; that in caseswhere compensation for extraordinary servicesare claimed, the better practice is to itemize theaccount and explain fully in what particulars the

services are extraordinary or unusual; and thatthe late administrator Jose de Luna Gonzales hadlong been compensated by the estate arisingfrom' the admitted sale for voting rights of CentroEscolar University shares, and for this matter thisCourt may require an accounting under Rule 85,Sec. 8 of the Rules of Court; and lastly, that asadmitted by movants themselves in their urgentamended motion, that the administration of theestate spanned a prolonged period of sixteenyears and yet the same is not yet closed orterminated and therefore the administratorshould be denied compensation for his services,for the prolongation of the settlement of theestate is due entirely to his effort to defraud the

heirs, and due to his neglect, the administrationhas been too expensive.

ISSUEWON Jose de Luna Gonzales is entitled to theamount of P500,000.00 by way of compensationas administrator of the estate of Carmen de Luna.

HELD YES. The applicable provision is the provisowhich states: "in any special case, where theestate is large and the settlement has beenattended with great difficulty and has required ahigh degree of capacity on the part of theexecutor or administrator, a greater sum may be

allowed." A wide latitude, leeway or discretion istherefore given to the trial court to grant agreater sum. And the determination of whetherthe administration and liquidation of an estatehave been attended with greater difficulty andhave required a high degree of capacity on thepart of the executor or administrator rests on thesound discretion of the court which took

cognizance of the estate.There appears to be no sound justification whythe appellate court should interfere with theexercise of the trial court's discretion, absent ashowing that the trial court committed any abuseof discretion in granting a greater remunerationto the petitioner. The trial court's order is basedon substantial evidence and the applicable rule.Reasoning:a. While it may be true that the inventory of theproperties of the estate as of April 25, 1975 wasonly P 890,865.25 it has been shown that thevalue of the estate has increased not only by theefforts of the late administrator to take good careof the same but in succeeding to locate other

properties belonging to the estate so that whenhe submitted the inventory of the properties, realand personal of the estate as of April 13, 1980the total appraisal thereof appears to be over P10M. No objection thereto appears to have beeninterposed.b. And with regards to the inventory, therespondents did not even present any evidenceto counter or disprove the valuations made sotheir claim that the estimated P10 million value ofthe properties was exaggerated is without basisand purely conjectural. With the well settled rulethat the findings of the trial court are given greatrespect, we therefore sustain the finding that thevalue of the estate is worth P10 million as found

by the trial court.

DISPOSITIONThere appearing to be no manifest error or abuseof discretion for the Court of Appeals to modifythe trial court's orders, the resolution of theIntermediate Appellate Court dated July 19, 1985is hereby SET ASIDE and its previous decisiondated September 17, 1982 is REINSTATED

SANTOS v. MANARANGG.R. No. L-8235

TRENT; March 19, 1914

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FACTS- Don Lucas de Ocampo died on November 18,1906, possessed of certain real and personalproperty which, by his last will and testamentdated July 26, 1906, he left to his three children.

The fourth clause of this will reads as follows: Ialso declare that I have contracted the debtsdetailed below, and it is my desire that they may

be religiously paid by my wife and executors inthe form and at the time agreed upon with mycreditors.- Among the debts mentioned are two in favor ofthe plaintiff, Isidro Santos; one due on April 14,1907, for P5,000, and various other described asfalling due at different dates (the dates are notgiven) amounting to the sum of P2,454.- The will was duly probated and a committeewas regularly appointed to hear and determinesuch claims against the estate as might bepresented.- Isidro Santos presented a petition to the courtasking that the committee be required toreconvene and pass upon his claims against the

estate which were recognized in the will oftestator. This petition was denied by the court.- Santos instituted the present proceedingsagainst the administratrix of the estate to recoverthe sums mentioned in the will as due him. Reliefwas denied in the court below, and now appealsto this court.

ISSUE1. WON the court erred in refusing to reconvenethe committee for the purpose of consideringplaintiff's claim.2. WON the court erred in dismissing his petitionfiled on November 21, 1910, wherein he asks thatthe administratrix be compelled to pay over to

him the amounts mentioned in the will as debtsdue him.

HELD1. NO. If the committee fails to give the noticerequired, that is a sufficient cause forreconvening it for further consideration of claimswhich may not have been presented before itsfinal report was submitted to the court. But this isnot the case made by the plaintiff, as thecommittee did give the notice required by law.- Where the proper notice has been given theright to have the committee recalled for theconsideration of a belated claim appears to restfirst upon the condition that it is presented within

six months after the time previously limited forthe presentation of claims. In the present casethe time previously limited was six months from

July 23, 1907. This allowed the plaintiff until January 23, 1908, to present his claims to thecommittee. An extension of this time undersection 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 isan conclusive under these circumstances as thebar of the ordinary statute of limitations wouldbe. It is generally held that claims are not barredas to property not included in the inventory.2. NO. -The petition of the plaintiff filed onNovember 21, 1910, wherein he asks that theadministratrix be compelled to pay over to himthe amounts mentioned in the will as debts duehim appears to be nothing more nor less than acomplaint instituting an action against theadministratrix for the recovery of the sum ofmoney. Obviously, the plaintiff is not seekingpossession of or title to real property or specificarticles of personal property.

- The sum of money prayed for in the complaintmust be due the plaintiff either as a debt of alegacy. If it is a debt, the action was erroneouslyinstituted against the administratrix. Is it alegacy? No.- Plaintiff's claim is described by the testator as adebt. It must be presumed that he used thisexpression in its ordinary and commonacceptation; that is, a legal liability existing infavor of the plaintiff at the time the will wasmade, and demandable and payable in legaltender. Had the testator desired to leave a legacyto the plaintiff, he would have done so inappropriate language instead of including it in astatement of what he owed the plaintiff.

- The testator left the total net assets of hisestate, without reservation of any kind, to hischildren per capita. There is no indication that hedesired to leave anything by way of legacy to anyother person. These considerations clearly refutethe suggestion that the testator intended to leaveplaintiff any thing by way of legacy. His claimagainst the estate having been a simple debt, thepresent action was improperly instituted againstthe administratrix.

Separate OpinionsMORELAND,J., dissenting:

1. Even if it be assumed that the notice tocreditors should have been published inaccordance with the order of July 23, 1907, therecord is entirely lacking in legal evidence toestablish the publication which the law requiresunder that order. That being so the claim is notbarred.2. I contend, and the record shows, that the

notice should not have been published inaccordance with the order of July 23, 1907, but inpursuance of an order of January 8, 1908, whichwas an order for a new publication, and, beinglater order, necessarily vacated and annulled theorder of July 23, 1907, and all proceedingsthereunder relative to the matters included insaid order of January 8, 1908; that publicationwas concededly never made under and inpursuance of that order and that, for that reason,the petitioner's claim is not barred.3. The claim was not one that must be submittedto a committee, being recognized as a legal andvalid debt by the will and the testator havingordered his executor to pay it. The motion made

to require the executor to pay the claim shouldhave been heard by the court.- I am compelled to believe that the statement ofthe decision that "the record affirmatively showsthat the committee did make the publicationsrequired by law," is not quite in accordance withthe record as I read it.- T his proceeding is not an action against anexecutor to recover a debt against the estate ofhis testator.- There is no provision of the Code of CivilProcedure expresslyrequiring the presentation ofanyclaim to a committee. Provision is made forthe appointment of a committee which isauthorized to hear certain classes of claims but

nowhere is there an express provision requiring acreditor to present his claim.- It was the intention of the law to restrict the

jurisdiction of the committee and keep it withincertain limitations, and to that end used theselimited expressions. It should be noted, however,that these limitations refer to claims and have noreference to actions begun against the deceasedbefore his death. The distinction made in theCode between claims and actions begun againstthe decedent during his lifetime, and therespective provisions referring to those twosubjects, is entirely lost sight of in the decision ofthe court.

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- The debt in the case at bar never was a claim.By the act of the testator himself, it was raised tothe dignity of a debt and it remains such andmust be acted upon as such by the courts as wellas by all other. It was by the testator selectedfrom the mass of his obligations, which arecorrectly called claims, and treated to a processwhich developed it into a thing called a "debt"

over which no committee has jurisdiction andwith the due course of which it has no authorityto interfere.- The court has failed in this case to distinguishbetween a will and a promissory note, or amortgage, so far as their legal effects areconcerned, and the statement which I made earlyin this opinion, that the court has given no legalsignificance whatever to the fact that theinstrument in which this debt was acknowledgedand in which it was ordered paid was a last willand testament, is literally true. It has given thetestamentary directions of the testator no moreforce, effect or significance than it gives to thewords of a promissory note or a mortgage.

- It is nowhere claimed in this case, and it cannotbe, for no proceeding has reached far enough toinvolve the fact, that this debt has been paid, andnowhere in the record has its validity or bindingforce upon the estate been challenged or evendisputed. That being the case, upon the facts, asthey stand before us, there is no excuse whichthe executor of the court can now offer why thedebt in suit has not been paid.- The proposition given so great weight in thedecision, namely, that the debt should besubmitted to the committee in order to determinewhether it has bee paid, is without point or force.

The court should make that determination farbetter than a committee.

- The attempt of the court to meet the propositionthat the will of the testator is the law of the casedoes not satisfy my judgment. It is claimed thatthe will of the testator is not the law of the casewhere it is in direct violation of a provision of law;and that the Court of Civil Procedure requiringthat all claims shall be presented to thecommittee, the testator has no right to except aparticular debt or any debt from the operation ofthe Code.- In the first place, the Code of Civil Proceduredoes not require that all claims shall bepresented to the committee. It expressly limitsthe claims which must be exhibited. In thesecond place, the claim that there is anything

contradictory between the will of the testator inthis particular case and the provision of the Codeof Civil Procedure is, in my judgment, ratherfanciful than real. What is the purpose ofrequiring the exhibition of a claim to acommittee? Simply to save the estate from beingdefrauded. There is absolutely no other reasonwhich is behind the law requiring such a

presentation.

BPI V CONCEPCION & HIJOS INC53 PHIL 806

OSTRAND; July 21, 1928

FACTS- CONCEPCION INC executed a promissory note infavor of BPI P342,372.64, payable on demand,with security of 700 shares of PNB deposited toBPI as collateral and mortgaged 5,680 sqm ofland in R. Hidalgo Street, Manila. Concepciondefaulted in payment and BPI institutedforeclosure proceedings.-. 1ST LETTER: Elser entered into negotiations

with CONCEPCION INC and offered to take overthe mortgaged property and assume themortgage debt. They agreed on the conditionthat they be relieved of all liability for the debt.- BPI did not answer the letter and it clearlyappears from the allegations in its amendedcomplaint that BPI was unwilling to release theCONCEPCION INC from their liability for themortgage debt and insisted on their confessing a

judgment in the foreclosure proceedings.CONCEPCION INC refused to confess judgmentunless BPI would agree to bid in the mortgagedproperty for the full amount of the judgment.- 2ND LETTER: another letter was sent by Elserwanting to confirm the verbal agreement that BPI

would bid in the land at the foreclosure sale forthe full amount of the judgment and sell it to himfor the same price. This proposition is entirelydifferent from that contained in the 1st letter- Elser entered into an agreement, in the form ofa bilateral deed of sale, with CONCEPCION INCand Venancio Concepcion that subrogated Elserto the obligation of CONCEPCION INC to BPI for aconsideration of P1- BPI never gave notice of its conformity with theagreement and petitioned the court to includeElser as a defendant. Trial court included Elser asa defendant- Elser died and BPI asked that Rosenstock,administrator of the estate, be substituted in his

place as defendant, and that the action becontinued against Rosenstock in that capacity, onthe ground that this action is for foreclosure of amortgage. They filed an opposition to have theaction continued against Rosenstock, insubstitution of Elser, since this is not aforeclosure action, hence this action is abated byreason of his death and any claim against him

should be presented to the committee on claimsand appraisals of his estate. However, the courtoverruled this objection.TC: absolved the Elser estate and ordered theConcepcions to pay BPI P342,372.64 with 9%interest

ISSUEWON BPI is barred by the statute of non-claimsfrom the Elser estate

HELDYES- The Concepcions, and not BPI, might havemaintained an action against the Elser estate; but

that action is now barred through their failure topresent their claim in time to the committee ofclaims and appraisal in the probate proceedings,and BPI cannot successfully invoke A1111 CC,which provides that after exhausting the propertyof which the debtor may be in possession, thecreditor may have recourse to the debtor'scredits and chooses in action for the collection ofthe unpaid portion of the debt.- Sec 708 of the Code of Civil Procedure providesas follows:

Sec. 708. Mortgage debt due from estate. A creditor holding a claim against thedeceased, secured by mortgage or othercollateral security, may abandon the security

and prosecute his claim before the committee,and share in the general distribution of theassets of the estate; or he may foreclose hismortgage or realize upon his security, byordinary action in court, making the executoror administrator a party defendant; and if thereis a judgment for a deficiency, after the sale ofthe mortgaged premises, or the propertypledged, in the foreclosure or other proceedingto realize upon the security, he may prove hisdeficiency judgment before the committeeagainst the estate of the deceased; or he mayrely upon his mortgage or other security alone,and foreclose the same at any time, within theperiod of the statute of limitations, and in that

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event he shall not be admitted as a creditor,and shall receive no share in the distribution ofthe other assets of the estate; . . .

- As will be seen, the mortgagee has the electionof one out of three courses:

(1) He may abandon his security and share inthe general distribution of the assets of theestate, or

(2) he may foreclose, secure a deficiency judgment and prove his deficiency judgmentbefore the committee, or(3) he may rely upon his security alone, inwhich case he can receive no share in thedistribution of the assets of the estate.

- In this case the bank did not abandon thesecurity and took no steps of any sort before thecommittee within the time limit provided for bySec 689 and 690 of the Code of Civil Procedure.

The committee ceased to function long ago, andthe bank has now nothing to rely on except themortgage. Intentionally or not, it has broughtitself within the third course provided for in Sec708; it has no alternative.

- But BPI says that the amount of the deficiency,if any, could not be proved before the foreclosuresale had been effected; that Sec 708 expresslyprovides for the proof of the deficiency judgmentbefore the committee after the sale of themortgaged property; that these provisions mustbe construed to mean that the presentation andprosecution of the claim for the deficiency mustbe made after, and not before, the sale; and thatif the mortgagee presents his claim for thedeficiency before a deficiency judgment has beenrendered, he will lose his rights under themortgage and be regarded as having abandonedhis security. This is clearly a misconception ofthe statute. Until the foreclosure sale is made,

the demand for the payment of the deficiency is acontingent 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 tocommittee. If a person is liable as surety forthe deceased, or has other contingent claimsagainst his estate which cannot be proved as adebt before the committee, the same may bepresented with the proof, to the committee,who shall state in their report that such claimwas presented to them.Sec. 747. Estate to be retained to meetclaims. If the court is satisfied form thereport of the committee, or from proofs

exhibited to it, that such contingent claim isval id, it may order the executor oradministrator to retain in his hands sufficientestate to pay such contingent claim, when thesame become absolute or, if the estate isinsolvent, sufficient to pay a portion equal tothe dividend of the other creditors.Sec. 748. Claim becoming absolute in two

years, how allowed. If such contingent claimbecomes absolute and is presented to thecourt, or tot he executor or administrator,within two years form the time limited for othercreditor, within two years from the time limitedfor other creditors to present their claims, itmay be allowed by the court if not disputed bythe executor or administrator, and, if disputed,it may be proves before the committee alreadyappointed, or before others to be appointed, forthat purpose, as if presented for allowancebefore the committee had made its report.

- These sections are in entire harmony withsection 708; the amount of the deficiency cannotbe ascertained or proven until the foreclosure

proceedings have terminated, but the claim forthe deficiency must be presented to thecommittee within the period fixed by sections689 and 690 of the Code. The committee doesnot then pass upon the validity of the claim butreports it to the court. If the court "from thereport of the committee" or from "the proofsexhibited to it" is satisfied that the contingentclaim is valid, the executor or administrator maybe required to retain in his possession sufficientassets to pay the claim when it becomesabsolute, or enough to pay the creditor hisproportionate share if the assets of the estate areinsufficient to pay the debts. When thecontingent claim has become absolute, its

amount may be ascertained and established inthe manner indicated by sections 748 and 749.As will be seen, the bank both could and shouldhave presented its claim to the committee withinthe time prescribed by the law.Disposition Appeal is without merit and

judgment is affirmed

Tan Sen Guan v. Go Siu San47 Phil. 89 (1924)G.R. No. L-22451

FACTS:

1. 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 withthe 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

2. upon the death of Antonio Tampoco on

February 5, 1920, proceeding was

instituted in the CFI Manila for the

settlement of his estate

3. 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;

4. 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

5. 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.

6. 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

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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 testamentaryproceeding 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 properHELD: 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 alreadyprescribedHELD: Yes.

1. 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 administratorcannot 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.

2. 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.

a. 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 havingbeen 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 theproper mannerHELD: 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,

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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 appealedfrom is reversed, and it is hereby declaredthat the plaintiff appellee has lost his right toenforce his claim in this proceeding, withoutpronouncement as to costs. So ordered.

Johnson, Malcolm, Avancea, Ostrand, andRomualdez, JJ., concur..

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