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Petitioner, Present:
PANGANIBAN, C.J.,
PUNO,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
- versus - CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
PARAAQUE,
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----------x
D E C I S I ON
CARPIO, J.:
The Antecedents
1992-1997 RPT was paid on Dec. 24, 1997 as per O.R.#9476102 for P4,207,028.75
MIAA admits that the MIAA Charter has placed the title to
the Airport Lands and Buildings in the name of MIAA. However,
MIAA points out that it cannot claim ownership over these
properties since the real owner of the Airport Lands and
Buildings is the Republic of the Philippines. The MIAA Charter
mandates MIAA to devote the Airport Lands and Buildings for
the benefit of the general public. Since the Airport Lands and
Buildings are devoted to public use and public service, the
ownership of these properties remains with the
State. The Airport Lands and Buildings are thus inalienable and
are not subject to real estate tax by local governments.
MIAA also points out that Section 21 of the
MIAA Charter specifically exempts MIAA from the payment of
real estate tax. MIAA insists that it is also exempt from real
estate tax under Section 234 of the Local Government Code
because the Airport Lands and Buildings are owned by the
Republic. To justify the exemption, MIAA invokes the principle
that the government cannot tax itself. MIAA points out that the
reason for tax exemption of public property is that its taxation
would not inure to any public advantage, since in such a case
the tax debtor is also the tax creditor.
We rule that MIAAs Airport Lands and Buildings are exempt from
real estate tax imposed by local governments.
Clearly, under its Charter, MIAA does not have capital stock that
is divided into shares.
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the development
of the national wealth. (Emphasis supplied)
ARTICLE 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.
ARTICLE 422. Property of public dominion, when no longer
intended for public use or for public service, shall form part of the
patrimonial property of the State.
The Court has also ruled that property of public dominion, being
outside the commerce of man, cannot be the subject of an
auction sale.[25]
x x x x. (Emphasis supplied)
SECTION 3. Creation of
the Manila International Airport Authority. x x x x
x x x x.
The whereas clauses of the MIAA Charter explain the rationale for
the transfer of the Airport Lands and Buildings to MIAA, thus:
x x x. (Emphasis supplied)
The minority asserts that the MIAA is not exempt from real
estate tax because Section 193 of the Local Government Code of
1991 withdrew the tax exemption of all persons, whether
natural or juridical upon the effectivity of the Code. Section
193 provides:
xxxx
(o) Taxes, fees or charges of any kinds on the National
Government, its agencies and instrumentalities, and local
government units. (Emphasis and underscoring supplied)
Section 133 of the Local Government Code starts with the saving
clause [u]nless otherwise provided in this Code. This means
that unless the Local Government Code grants an express
authorization, local governments have no power to tax the
national government, its agencies and instrumentalities. Clearly,
the rule is local governments have no power to tax the national
government, its agencies and instrumentalities. As an exception
to this rule, local governments may tax the national government,
its agencies and instrumentalitiesonly if the Local Government
Code expressly so provides.
xxxx
SEC. 16. The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may
be created or established by special charters in the interest of
the common good and subject to the test of economic
viability. (Emphasis and underscoring supplied)
The fact alone that MIAA is endowed with corporate powers does
not make MIAA a government-owned or controlled
corporation. Without a change in its capital structure, MIAA
remains a government instrumentality under Section 2(10) of the
Introductory Provisions of the Administrative Code. More
importantly, as long as MIAA renders essential public services, it
need not comply with the test of economic viability. Thus, MIAA is
outside the scope of the phrase government-owned or controlled
corporations under Section 16, Article XII of the 1987
Constitution.
The minority belittles the use in the Local Government Code
of the phrase government-owned or controlled corporation as
merely clarificatory or illustrative. This is fatal. The 1987
Constitution prescribes explicit conditions for the creation of
government-owned or controlled corporations. The Administrative
Code defines what constitutes a government-owned or controlled
corporation. To belittle this phrase as clarificatory or illustrative is
grave error.
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth. (Emphasis supplied)
4. Conclusion
Under Section 2(10) and (13) of the Introductory Provisions of
the Administrative Code, which governs the legal relation and
status of government units, agencies and offices within the entire
government machinery, MIAA is a
government instrumentality and not a government-owned or
controlled corporation. Under Section 133(o) of the Local
Government Code, MIAA as a government instrumentality is
not a taxable person because it is not subject to [t]axes, fees or
charges of any kind by local governments. The only exception is
when MIAA leases its real property to a taxable person as
provided in Section 234(a) of the Local Government Code, in
which case the specific real property leased becomes subject to
real estate tax. Thus, only portions of the Airport Lands and
Buildings leased to taxable persons like private parties are
subject to real estate tax by the City of Paraaque.
Under Article 420 of the Civil Code, the Airport Lands and
Buildings of MIAA, being devoted to public use, are properties
of public dominion and thus owned by the State or the Republic
of the Philippines. Article 420 specifically
mentions ports x x x constructed by the State, which includes
public airports and seaports, as properties of public dominion and
owned by the Republic. As properties of public dominion owned
by the Republic, there is no doubt whatsoever that
the Airport Lands and Buildings are expressly exempt from real
estate tax under Section 234(a) of the Local Government
Code. This Court has also repeatedly ruled that properties of
public dominion are not subject to execution or foreclosure sale.
No costs.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
REYNATO S. PUNO LEONARDO A.
Associate Justice QUISUMBING
Associate Justice
Associate Justice
Associate Justice
ADOLFO S. AZCUNA DANTE O. TINGA
Associate Justice Associate Justice
CERTIFICATION
ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Dated 16 September 1983.
[2]
Dated 26 July 1987.
[3]
Section 3, MIAA Charter.
[4]
Section 22, MIAA Charter.
[5]
Section 3, MIAA Charter.
[6]
Rollo, pp. 22-23.
[7]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[8]
330 Phil. 392 (1996).
[9]
MIAA Charter as amended by Executive Order No. 298. See note 2.
[10]
Batas Pambansa Blg. 68.
[11]
Section 11 of the MIAA Charter provides:
[18]
CONSTITUTION, Art. X, Sec. 5.
[19]
274 Phil. 1060, 1100 (1991) quoting C. Dallas Sands, 3 STATUTES and
STATUTORY CONSTRUCTION 207.
[20]
274 Phil. 323, 339-340 (1991).
[21]
CONSTITUTION, Art. VI, Sec. 28(1).
[22]
First Whereas Clause, MIAA Charter.
[23]
30 Phil. 602, 606-607 (1915).
[24]
102 Phil. 866, 869-870 (1958).
[25]
PNB v. Puruganan, 130 Phil. 498 (1968). See also Martinez v. CA, 155 Phil. 591 (1974).
[26]
MIAA Charter, Sec.16.
[27]
Chavez v. Public Estates Authority, 433 Phil. 506 (2002).
[28]
Section 3, MIAA Charter.
[29]
G.R. No. 144104, 29 June 2004, 433 SCRA 119, 138.
[30]
Republic Act No. 7653, 14 June 1993, Sec. 5.
[31]
Executive Order No. 1061, 5 November 1985, Sec. 3(p).
[32]
Republic Act No. 4850, 18 July 1966, Sec. 5.
[33]
Presidential Decree No. 977, 11 August 1976, Section 4(j).
[34]
Republic Act No. 7227, 13 March 1992, Sec. 3.
[35]
Presidential Decree No. 857, 23 December 1975, Sec. 6(b)(xvi).
[36]
Republic Act No. 4663, 18 June 1966, Sec. 7(m).
[37]
Republic Act No. 4567, 19 June 1965, Sec. 7(m).
[38]
Republic Act No. 7621, 26 June 1992, Sec. 7(m).
[39]
Republic Act No. 4156, 20 June 1964. Section 4(b).
[40]
Republic Act No. 3844, 8 August 1963, as amended by Republic Act No. 7907, 23
February 1995.
[41]
Executive Order No. 81, 3 December 1986.
[42]
Republic Act No. 8175, 29 December 1995.
[43]
Presidential Decree No. 252, 21 July 1973, as amended by Presidential Decree No.
1071, 25 January 1977 and Executive Order No. 1067, 25 November 1985.
[44]
Executive Order No. 80, 3 December 1986.
[45]
III RECORDS, CONSTITUTIONAL COMMISSION 63 (22 August 1986).
[46]
2003 ed., 1181.
[47]
Manila International Airport Authority v. Airspan Corporation, G.R. No. 157581, 1
December 2004, 445 SCRA 471.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
RESOLUTION
PADILLA, J.:
For resolution are the separate motions for reconsideration of the decision of this Court,
dated 25 April 1988, filed by Juan F. Gomez, Jesus T. David, Raquiza children and their
father Antonio V. Raquiza (as alleged heirs of Natividad Castellvi), and petitioner
Antonio Quirino; motion for intervention of Carmen Castellvi et al. (as alleged heirs of
Don Juan Castellvi); the motion for clarificatory order of Juan F. Gomez; and omnibus
motion for early resolution and immediate release of funds, filed by the Raquiza
children. The Court Will resolve the motions separately.
As held in Gabin v. Malleja (84 Phil. 794), 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. It is important to note that movants claims for
attorney's fees and transportation as wen as representation expenses are
for services rendered to the alleged substituted heirs of Don Juan Castellvi
and such services did not inure to the benefit of Don Alfonso Castellvi or
his estate. The court charged with the settlement of the estate of Don
Alfonso Castellvi is bound to protect the estate from any disbursements
based on claims not chargeable to the estate.
For this Court to allow in this proceeding which is for the settlement of the
estate of Don Alfonso Castellvi the enforcement of the claim of David
against Doña Carmen's alleged share in the estate of Don Alfonso
Castellvi, would amount to summarily declaring Doña Carmen an heir of
Don Alfonso, without giving the other heirs or claimants to the latter's
estate an opportunity to oppose the same. Moreover, whatever fees Doña
Carmen might have earned during her lifetime as administratrix of the
estate of Don Alfonso Castellvi should go to her estate. Hence, whatever
claim herein intervenor has against the deceased Doña Carmen Castellvi,
should be presented before the court with jurisdiction in settling her
estate. Intervenor 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.
Movants would like to impress upon this Court that the award of
attorney's fees to Atty. Mendoza equivalent to 12% of the gross value of
the estate of Don Alfonso Castellvi is not valid on the ground that they
never gave their consent thereto, nor did Doña Carmen Castellvi, then
administratix of the estate of Don Alfonso Castellvi. However, the record
of this case shows that Natividad Castellvi-Raquiza, the instituted heir to
two- third (2/3) of the estate of Don Alfonso Castellvi, gave her
conformity to such award of attorney's fees in favor of Atty.
Mendoza. 5 Moreover, movants, through their father and general guardian
Atty. Antonio V. Raquiza, had agreed to grant said attorney's fees. In fact,
separate manifestations 6 were filed by Atty. Raquiza and Carmen Castellvi
with the court a quo stating that they were withdrawing their oppositions
to said claim.
With regard to Floro's claim for payment for services rendered to the
estate of Don Alfonso Castellvi, 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. This is so, because the
administration is under the direct supervision of the court and the
administrator is subject to its authority. 7
They further claim that for this Court to order the delivery of the residue
of the estate of Don Alfonso to the 'estate of Don Juan Castellvi (to the
extent of (1/3 as decreed in Don Alfonso's last will) instead of his
substituted heirs, will result in the latter re-litigating among themselves
and/or with other parties for their respective shares over the estate of
Don Juan Castellvi, when they had already ventilated the issue of heirship
over the same before the court a quo, and they were declared heirs of
Don Juan Castellvi and substituted heirs to his one-third (1/3) share in the
estate of Don Alfonso Castellvi. 8
Moreover, the court a quo has no jurisdiction to determine who are the
heirs of Don Juan Castellvi; said issue has to be ventilated in a separate
proceeding.
Movant's claim is chargeable to the heirs of Don Juan Castellvi, his clients,
and the court a quo 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 a
quo is of limited jurisdiction, empowered to settle only the estate of Don
Alfonso Castellvi: 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
In the motion at bar, movants seek approval for the release of the
amount of P300,000.00 to allegedly take care of the burial expenses
incurred upon the death of Natividad Castellvi-Raquiza. Said motion for
release of funds was previously presented before the court a quo and
subsequently 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 of 25
April 1988.
ACCORDINGLY, the motions for reconsideration filed by Juan F. Gomez, Jesus T. David,
Raquiza children, and Antonio Quirino are hereby DENIED. This denial is FINAL. The
motion for intervention of Carmen Castellvi, et al., the motion for clarificatory order of
Juan F. Gomez, and the omnibus motion for early resolution and release of funds by the
Raquiza children, are also DENIED.
SO ORDERED,
Footnotes
5 Rollo, p. 619.
8 Rollo, p. 648.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
VILLA-REAL, J.:
This is an appeal taken by the ex-administrator, Dr. Jose MA. de la Viña y de la Rosa,
from the order of the Court of First Instance of Negros Oriental, the dispositive part of
which reads:
Wherefore the Court reiterates the order of March 7, 1933, only in so far as the
claim of the Insular Government is concerned, and orders the Administrator
herein to pay from whatever available fund of the estate of the deceased Diego
de la Viña the sum of P18,420.93 with the corresponding legal interests from
August 20, 1929 plus costs, to the Commonwealth of the Philippines.
It is also ordered that after the said claim shall have been fully paid, the
administrator herein shall pay to Dr. Jose de la Viña y De la Rosa the sum of
P19,342.93 and to other claimants their respective claims in the order
established by law out of the residue.
In support of his appeal the appellant assigns three alleged errors committed by the
trial court in its order, to wit:
1. The trial court erred in holding that the income tax claimed by the Collector of
Internal Revenue, should be paid before the administration expenses claimed by
the appellant executor Dr. Jose Ma. de la Viña y de la Rosa.
2. The trial court erred in applying article 1923 of the Civil Code and in not
holding that the said article has been repealed by section 735 of the Code of Civil
Procedure (Act 190).
3. Granting for the sake of argument that the payment of income tax has
preference over the payment of administration expenses, the trial court erred in
holding that said preference has been abandoned and lost due to the time that
has elapsed from 1925 to 1938.
On April 8, 1920, after the death of Diego de la Viña, his brother, the herein appellant
Dr. Jose Ma. de la Viña, was appointed by the Court of First Instance of Negros Oriental
as special administrator of the estate of the deceased; and on the 20th of the same
month and year he was appointed executor.
On January 23, 1926, this Court issued in civil case G.R. No. 23747, entitled "In re
estate of Diego de la Viña, deceased, Jose de la Viña v. Narcisa Geopano et al.," an
order approving the accounts of the said Dr. Jose de la Viña, as outgoing administrator
of the estate of Diego de la Viña. It appears from the decision of this Court rendered in
said Civil Case G.R. No. 23747 that the following items were approved:
In the bill of exceptions in said case it also appears that the following expenses of Jose
de la Viña were approved:
On July 16, 1927, the said Court of First Instance of Negros Oriental ordered in the
present case the payment to Dr. Jose de la Viña of the amount of 146.025 piculs of
sugar belonging to him, which product was applied to the payment of the
administration expenses of the estate of Diego de la Viña. The price of said sugar was
fixed at P20 per picul by a subsequent order. Adding the sum of P2,925, the value of
said 146.025 piculs of sugar, to the sum of P25,387.83, the result is a total of
P28,312.83. As the amount of P9,228.65 has been paid on account, there remains a
balance of P19,048.18 in favor of the appellant.
It also appears that on February 23, 1932, this Court rendered judgment in G.R. No.
33870, entitled "The Collector of Internal Revenue vs. Espiridion Villegas, as
administrator of the estate of Diego de la Viña", ordering the said administrator to pay
the Insular Government, by way of income tax for the year 1925, the sum of
P18,420.93, with interest from August 20, 1939 until fully paid, and the costs.
The estate of Diego de la Viña does not have sufficient funds or property to pay fully
both judgments. When the Insular Government attempted to collect the amount of the
said judgment in its favor, Dr. Jose de la Viña objected on the ground that the
judgments obtained by him are preferred under section 735 of Act No. 190, and should
first be paid. After the corresponding trial, the trial court overruled the opposition and
entered the above-quoted order.
The first question to be decided in this appeal, which is raised by the first assignments
of error, is whether or not the trial court erred in holding that the income tax claimed
by the Collector of Internal Revenue, should be paid before the administration expenses
claimed by the ex-executor, Dr. Jose Ma. de la Viña y de la Rosa.
Section 735 of the Code of Civil Procedure, as amended by Act No. 3960, provides as
follows:
SEC. 735. Order of payment if estate insolvent. — If the assets which can be
appropriated for the payment of debts are not sufficient for that purpose, the
executor or administrator shall, after pay the debts against the estate in the
following order:
3. What is owing to the laborer for salaries and wages earned and for
indemnities due to him, for the last year;
In view of the legal provision just quoted, the question is whether the income tax which
an estate owes the Insular Government partakes of the nature of administration
expenses for purposes of the order of payment established by section 735 of Act No.
190 above quoted. Section 680 of the same code of Civil Procedure provides as follows:
SEC. 680. — How allowed for services. — The executor or administrator shall be
allowed necessary expenses in the care, management, and settlement of the
estate, and for his services, two dollars per day for the time actually and
necessarily employed, and a commission of three per cent upon all sums
disbursed in the payment of debts, expenses, and distributive shares, if the
amount of such disbursements does not exceed one thousand dollars. If the
amount exceeds one thousand dollars and does not exceed five thousand dollars
and one-half per cent upon the excess, if the whole amount does not exceed five
thousand dollars, then the percentage as above provided, and one per cent on
the excess above five thousand dollars. But in any special case, where the estate
is large, and the settlement has been attended with great difficulty, and has
required a high degree of capacity on the part of the executor or administrator, a
greater sum may be allowed. But if objection to the fees allowed be taken, the
allowance may be re-examined by the Supreme Court on appeal.
The legal provision just quoted enumerates the services for which the administrator
should be paid and the commission to which he is entitled for collections and
disbursement made by him. Among these payments, which constitutes the expenses of
administration, are not included pending debts of the estate, whatever may be their
nature. According to the said legal provision, only payments which the executor or
administration may have made in the discharge of his office and the commissions to
which he may be entitled, partakes of the nature of administration expenses. the
expenses of administration are due only to the executor or administrator, and he alone,
and no other, may collect them.
The Collector of internal Revenue contends that the tax of P18,420.93 which he seeks
to collect, having been laid on the profits realized in the sale of the properties of the
deceased Diego de la Viña, effected on September 29, 1925 by the judicial
administrator of the estate, the said tax partake of the nature of administration
expenses. As we have said, the necessary expenses of administration whose payment is
given preference in the said section 735 of the Code of Civil Procedure are those which
the administrator may have incurred in the care, administration and liquidation of the
properties of the estate and the commissions due to him for collections and
disbursements which he may have made, and not those which he cold or might have
wished to make out of his own pocket or but of the funds of the estate. "Administration
expenses," says Corpus Juris, volume 24, page 424, "include expenditures in
discovering and preserving assets, attorneys fees incurred in connection with the
administration of the estate, incurred in connection with the administration of the
estate, cost recovered against the representative in an action to recover assets, to
established a claim against the estate, to try title to land, and insurance premiums
expended for the protection of the property and it has even been considered that
expenditures in carrying on decedent's business may be regarded as expenses of
administration." And Woerner, volume 2, page 1197, paragraph 362, third edition, of
his work entitled "The American Law of Administration of the Estate," says the
following:
It has already been stated, that for the expenses attending the accomplishment
of the purpose of administration growing out of the contract or obligation entered
into by the personal representative he is to be reimbursed out of the estate, and
that his claim to reimbursed must be superior to the rights of the beneficiaries.
They are subject only to the lien of a mortgage executed on specific property by
the deceased in his lifetime. The expenses under this category include those paid
for probate of the will, as well in the Probate court as on appeal, or other
proceeding in a contest, if carried on in good faith; and the executor nominated
in such will is entitled to a settlement of his account, and reimbursement for his
expenses in preserving the estate and for the funeral, although the will be finally
pronounced invalid; and, generally, all expenses necessary in the protection and
preservation of the estate, which have been held to include the costs of
establishing a claim against the estate. But the general rule seems rather to be
that costs incurred by the administrator in defense of claims against the estate,
or in prosecuting claims in favor of it, pertain to the administration, and are to
be allowed in full; but costs incurred by claimants in establishing their claims
stand on the same footing with the claims themselves. The allowance of counsel
fees and costs is discussed in connection with the subject of accounting. Repairs
necessary upon real estate of which the executor or administrator has lawful
possession also constitute expenses of administration; if the expenses incurred is
general, affecting all the property of the estate, it should be charged generally,
but if attaching to a specific portion or piece of property, it should be charged
against such portion or piece.
The mere fact, therefore, that the income tax claimed by the Collector of Internal
Revenue had been imposed upon the profits obtained by the administrator of the estate
in the sale of certain properties of the deceased Diego de la Viña, after the latter's
death, does not make the said tax a necessary expense of administration, unless the
administrator had paid it either from his own pocket or out of the funds of the estate: in
the first case the tax paid is converted into an expense of administration which the
administrator may fully recover, plus his commission; in the second case, he may only
collect his commission, which partakes of the nature of an expense of administration.
In the decision promulgated on May 18, 1938, in the Estate of the deceased Claude E.
Hoygood, The Collector of Internal Revenue, claimant and appellee, vs. Annie Laurie
Haygood, administratix and appellant, G.R. No. 44038, this Court said:
In accordance with section 9, paragraph (a) of Act No. 2833, the assessment
made by the Collector of Internal Revenue within three years after the discovery
of an erroneous declaration shall be paid by the maker of the return immediately
upon being notified of the assessment. The procedure prescribed by law is,
therefore summary, and collection must be made from the person liable is
already dead, collection must necessarily be made from the estate of the
deceased, either in a state or intestate proceedings instituted before a
competent court, by motion together with the sworn statement of the taxes due
filed with said court, so that it may require the administrator to pay the claim if
the latter has funds available therefor, that is, following the order of preference
provided in section 735 of the Code of Civil Procedure in case the said estate
should insolvent. If the testate or intestate is solvent, the court may order the
payment of the claim without necessity of its being substantiated by evidence
since the sworn statement constitutes prima facie evidence of the existence of
the unpaid taxes, and the administrator is under obligation to pay such claim,
under protest if he is not agreeable, without prejudice to his right later to
recover the taxes so paid, in the manner provided by law (Act No. 2711, sec.
1579, as amended by Act No. 3685).
The Collector of Internal Revenue also contends that the income tax in question, being
a lien created by the law superior to any other existing upon the property on which it is
imposed, under the provisions of section 1588 of the Revised Administrative Code, as
amended, enjoys preference over the necessary expenses of administration.
The lien created by the said section 1588 of the Revised Administrative Code, having
reference to all internal revenue taxes, including the income tax here in question, is
general in character, and the order of its payment as a lien is applicable to all
properties subject to the payment of internal revenue tax; whereas the order of
payment established by section 735 of the Code of Civil Procedure, as amended by Act
No. 3960, is special in character and is only applicable to properties of deceased
persons; consequently, in accordance with the cardinal rule of statutory construction,
the latter provision of law should prevail over the former. In section last mentioned, the
taxes due to government of any branch or subdivision thereof occupy the fifth place in
the order of payment; wherefore, the indebtedness of the estate of Diego de la Viña for
income tax not being a necessary expense of administration, and the claim of the ex-
administrator Dr. Jose Ma. de la Viña y de la Rosa being such necessary expense of
administration, the latter has preference over the former.
The appellee denies that the first claim for P12,552 for special per diems partakes of
the nature of necessary expenses of administration, for lack of allegation or proof to
that effect. Section 680 of the Code of Civil Procedure already cited provides that "but
in any special case, where the estate is large, and the settlement has been attended
with great difficulty, and has required a high decree of capacity on the part of the
executor or administrator, a greater sum may be allowed." There is no doubt that the
estate of Diego de la Viña is large. The determination of whether the administration and
liquidation thereof have been attended with great difficulty and have required a high
degree of capacity on the part of the executor or administrator, rests in the sound
discretion of the Court which took cognizance of the said estate. It not appearing that
the lower court committed an abuse of discretion in granting a greater remuneration to
the appellant, we do not feel warranted in interfering with the exercise of said
discretion.
In view of the foregoing consideration, we are of the opinion and so hold: (1) that the
income tax which an estate owes to the insular government for profits obtained in the
sale of properties belonging to it, after the death of the testator, does not partake of
the nature of necessary expenses of administration; (2) that the lien created by section
1588 of the Revised Administrative Code for internal revenue tax on properties subject
to it, being general in character, yields to the preference established by section 735 of
the Code of Civil Procedure, as amended by Act No. 3960, in favor of the necessary
expenses of administration of the estate of a deceased person; and, (3) that the claim
of an administrator for the necessary expenses of administration enjoys preference over
the claim for payment of income tax.
Wherefore, the remedy prayed for is granted, the appealed decision is reversed, and it
is held that the claim of the appellant, Dr. Jose Ma. de la Viña y de la Rosa, as ex-
administrator of the estate of the deceased Diego de la Viña has preference over that of
the Collector of Internal Revenue for income tax, without special pronouncement as to
costs. So ordered.
Separate Opinions
This appeal has to do with the order of the Court of First Instance of Negros Oriental of
October 6, 1937, rendered in Special Proceedings No. 7, entitled, Testate of the
deceased Diego de la Viña, which directed the judicial administrator to pay
preferentially out of any funds of the estate the sum of P18,420.93, with legal interest
thereon from August 20, 1929, plus the costs, which the Collector of Internal Revenue
claimed as income tax which the estate should pay on the profit which it obtained in the
sale of certain property of the deceased; and after paying said amount, to pay also the
credits of Dr. Jose Ma. de la Viña y de la Rosa Amounting to P19,342.93.
On April 8, 1920, the appellant Dr. Jose Ma. de la Viña was appointed special
administrator of the estate of his deceased brother Diego de la Viña, Special
Proceedings No. 7 of the Court of First Instance of Negros Oriental, and on the 20th of
the same month he discharged the office of executor. In the decision rendered on
January 23, 1926, in G.R. No. 23747 this Court held that Dr. Jose Ma. de la Viña was
entitled to collect from the estate the following amounts:
On July 16, 1927 the Court ordered in the same proceeding that Dr. de la Viña be paid
the amount of 146.025 piculs of sugar belonging to him, which amount, in money, he
paid by way of expenses of administration of the estate. The price of the sugar was
fixed at P20 per picul, the value thereof amounting to P2,925. Adding this amount to
the credit approved in the decision rendered by this Court, the result is a total of
P28,312.83. As Dr. de la Viña had been paid on amount of his credit the sum of
P9,228.65, a balance of P19,084.18 remained in his favor. On the other hand, on
February 23, 1932 this court rendered judgment in G.R. No. 33870, entitled
the Collector on Internal Revenue vs. Espiridion Villegas, as administrator to pay the
Insular government, by way of income tax for the year 1925, the sum of P18,420.93,
with legal interest from August 20, 1929 until fully paid, and the costs.
The government asked for immediate payment of its credit and as the estate did not
have sufficient funds to meet all the credits admitted and allowed, DR. de la Viña filed
an opposition on the allegation that his credit is preferred to that of the Government
because it represents expenses of administration. In the appealed order the Court held
that the claim of the Government is preferred and should be paid before that of Dr. de
la Viña. This appellant maintains in his brief that the Court erred: in holding that the tax
sought to be revered by the government has preference of his claim and that it should
be paid before the expenses of administration of the estate, such as his credit; in
improperly applying article 1923 of the Civil Code, instead of section 735 of the Code of
Civil Procedure; and not holding that the preference of the credit of the Government
has been abandoned and lost because of the time that has elapsed from 1925 to 1938,
supposing that the said credit is really preferred.
To my mind the priority of the two credits is really depends upon the nature or concept
which each has before the law. The appellant contends that his claim, for expenses of
administration of the estate allowed and approved by the trial court and by this Court,
is preferred and would first be paid. The Government, in turn, argues that its credit,
which consists in the tax due upon the profits which the estate obtained in the sale of
one of its properties in 1925, is preferred not only because it has to do with a tax which
constitutes a lien, but also because it partakes of the nature of administration
expenses. As will be seen, independently of the lien, relied upon by the Government,
the first question to be decided is whether both credits should be considered as
expenses of administration under the law.
3. What is owing to the laborer for salaries and wages earned and for the
indemnities due to him, for the last year;lâwphi1.nêt
Under this section, if the properties of a deceased person are insufficient to pay all his
obligation, there shall be paid, in the first place, all the expenses of administration and
thereafter his admitted indebtedness in the order therein mentioned. The said section,
or any other section of the Code of Civil Procedure, does not define what is meant by
expenses of administration; but in Lizarraga Hernamos vs. Abada (40 Phil., 124), it was
said that by expense of administration should be understood the reasonable and
necessary expense of caring for the property and managing it till the debts are paid, as
provided by law, and of dividing it, if necessary, so as to partition and deliver it to the
heirs. In this jurisdiction it has been invariably decided that the claims of the
Government for income tax need not be filed with the Committee on claims and should
be paid directly by the executor or administrator out of the funds of the estate of the
deceased (Pineda vs. Court of First Instance of Tayabas, 52 Phil., 803; Government of
the Philippine Islands, 60 Phil., 461). And these claims need not be filed with the
committee appointed by the Court because they partake of the mature of
administration expenses. If they were ordinary credits against the estate of a deceased
person, or debts of the latter, there is no doubt that they should be filed with and
approved by the committee on claims. In the first of the cited cases it was held that
income taxes due from a deceased person, assessed during his lifetime or after his
death, are claims which not be submitted to the committee and that they are proper
and necessary expenses of administration of the estate of the deceased. In said case it
was said.
To reply to these contentions in turn, we observe that, while there are few courts
that have expressed themselves to the effect that a claim for taxes due to the
Government should be presented like other claims to the committee appointed
for the purpose of passing upon claims, the clear weight of judicial authority is to
the effect that claims for taxes and assessments, whether assessed before or
after the death of the decedent, are not required to be presented to the
committee. (24 C.J., 325; People v. Olivera, 43 Cal., 492; Hancock v.
Whittemore, 50 Cal., 522; Findley v. Taylor, 97 Iowa, 420; Bogue v. Laughlin,
149 Wis., 271; 40 L.R. A. [N.S.], 927; Ann. Cas. 1913 C., p. 1367.)
In the case before us the tax now claimed by the Government was not due until
it was assessed; and this assessment was not made until after the individual
against whom the tax was assessed had died. The claim therefore arose during
the course administration. The law imposes on the administrator of a deceased
person the duty to pay taxes assessed against the property of the deceased; and
as well known, in case of insolvency, such taxes constitute a preferential claim in
the distribution of assets over ordinary debts, under section 735 of the Code of
Civil procedure. In the case before us it is not suggested that the estate is
insolvent, and there is therefore no danger of imperiling the payment of funeral
expenses or expenses of last sickness by ordering the immediate payment of
these taxes.
In the United States the same doctrine governs and incomes taxes have always been
considered as expenses of administration and not as debts of a deceased person which
should be presented, for their approval, to the committee on claims. Thus in People v.
Olivera (43 Cal., 492, 494), the Supreme Court of California said:
Whatever may be the rule when taxes are assessed during the lifetime of the
decedent—and we are not called upon to express any opinion in reference to it—
it is clear that taxes assessed against the property of an estate, pending
administration, and while it is in the possession and under the management and
control of an administrator, are not "claims" against the estate which must be
presented, supported by an affidavit, and allowed or rejected , under the
provisions of sections one hundred and thirty and one hundred and thirty one of
the Probate Act. The undivided property of the deceased person may be listed to
administrators, and the taxes assessed are charges upon the property, which
should be paid as all necessary expenses in the care, management, and
settlement of the estate are paid.
And in Brown's Estate v. Hoge, (199 N.W., 320, 323), the Supreme Court of Iowa said
the following:
We think the federal tax is a charge or expense for which the estate is liable. We
think the lower court was right in holding that such tax was a part of the
expense of administration this tax should be deducted before computing the
state inheritance tax.
. . . The country court, in assessing the state inheritance tax on that property,
refused to deduct the federal estate tax paid by the executor, amounting to
P316,432.40. In the ruling the court erred. The federal estate tax is charge or an
expense against the estate of the decedent rather than against the shares of the
legatees or the distributees, and as part of the expense of administration this tax
be deducted before computing the state inheritance tax.
And in Corbin v. Townshend (103 A., 647, 649; 92 Conn., 501), the Supreme Court of
Connecticut said:
The federal tax imposed by Revenue Act Sept. 8, 1916, c. 463, Sec. 201, 39
Stat. 1000, on the transfer of the net estate of a decedent, being payable out of
the estate before distribution, and inheritance taxes imposed by other states on
the same basis, are expenses of administration, within Succession Act 1915, Sec.
5, providing for deduction of such expenses, to determine the net estate subject
to the succession tax; any expense arising by operation of law which is a charge
against or must be paid out of the estate being an administration expense.
It may perhaps be argued that if taxes and assessments owing to the Government or to
any of its branches or offices were not debts against a decedent which should be filed
with the committee on claims, section 735 would not have mentioned them as the fifth
in the enumeration. The answer to this is that the taxes and assessments specified in
the section are those which are not considered as administration expenses.
Considering what has already been decided by this Court in Pineda vs. Court of First
Instance of Tayabas, Knowles vs. Government of the Philippine Islands and Government
of the Philippine Islands vs. Pamintuan, supra, and the cited American precedents, I am
of the opinion that the credit of the Government presented in this case partakes of the
nature of necessary expenses of the administration and such enjoys preference; and
undersection 1588 of the Revised Administrative Code providing that an income tax
creates a legal lien superior to any other, it should be paid before that of Dr. de la Viña.
FIRST DIVISION
GANCAYCO, J.:
The issue in this petition is whether or not a final judgment of the Court of Appeals in an action for damages may be
satisfied by way of execution of a family home constituted under the Family Code.
On January 29, 1988, a judgment was rendered by the Court of Appeals in CA-G.R. CV
No. 09218 entitled "Francisco Salinas, et al. vs. Jose Modequillo, et al.," the dispositive
part of which read as follows:
b. P10,000.00 for the loss of earnings by reason of the death of said Audie
Salinas;
2. Plaintiffs-appellants Culan-Culan:
The said judgment having become final and executory, a writ of execution was issued
by the Regional Trial Court of Davao City to satisfy the said judgment on the goods and
chattels of the defendants Jose Modequillo and Benito Malubay at Malalag, Davao del
Sur.
On July 7, 1988, the sheriff levied on a parcel of residential land located at Poblacion
Malalag, Davao del Sur containing an area of 600 square meters with a market value of
P34,550.00 and assessed value of P7,570.00 per Tax Declaration No. 87008-01359,
registered in the name of Jose Modequillo in the office of the Provincial Assessor of
Davao del Sur; and a parcel of agricultural land located at Dalagbong Bulacan, Malalag,
Davao del Sur containing an area of 3 hectares with a market value of P24,130.00 and
assessed value of P9,650.00 per Tax Declaration No. 87-08-01848 registered in the
name of Jose Modequillo in the office of the Provincial Assessor of Davao del Sur. 2
A motion to quash and/or to set aside levy of execution was filed by defendant Jose
Modequillo alleging therein that the residential land located at Poblacion Malalag is
where the family home is built since 1969 prior to the commencement of this case and
as such is exempt from execution, forced sale or attachment under Articles 152 and
153 of the Family Code except for liabilities mentioned in Article 155 thereof, and that
the judgment debt sought to be enforced against the family home of defendant is not
one of those enumerated under Article 155 of the Family Code. As to the agricultural
land although it is declared in the name of defendant it is alleged to be still part of the
public land and the transfer in his favor by the original possessor and applicant who
was a member of a cultural minority was not approved by the proper government
agency. An opposition thereto was filed by the plaintiffs.
In an order dated August 26, 1988, the trial court denied the motion. A motion for
reconsideration thereof was filed by defendant and this was denied for lack of merit on
September 2, 1988.
Hence, the herein petition for review on certiorari wherein it is alleged that the trial
court erred and acted in excess of its jurisdiction in denying petitioner's motion to
quash and/or to set aside levy on the properties and in denying petitioner' motion for
reconsideration of the order dated August 26, 1988. Petitioner contends that only a
question of law is involved in this petition. He asserts that the residential house and lot
was first occupied as his family residence in 1969 and was duly constituted as a family
home under the Family Code which took effect on August 4, 1988. Thus, petitioner
argues that the said residential house and lot is exempt from payment of the obligation
enumerated in Article 155 of the Family Code; and that the decision in this case
pertaining to damages arising from a vehicular accident took place on March 16, 1976
and which became final in 1988 is not one of those instances enumerated under Article
155 of the Family Code when the family home may be levied upon and sold on
execution. It is further alleged that the trial court erred in holding that the said house
and lot became a family home only on August 4, 1988 when the Family Code became
effective, and that the Family Code cannot be interpreted in such a way that all family
residences are deemed to have been constituted as family homes at the time of their
occupancy prior to the effectivity of the said Code and that they are exempt from
execution for the payment of obligations incurred before the effectivity of said Code;
and that it also erred when it declared that Article 162 of the Family Code does not
state that the provisions of Chapter 2, Title V have a retroactive effect.
Art. 152. The family home, constituted jointly by the husband and the
wife or by an unmarried head of a family, is the dwelling house where
they and their family reside, and the land on which it is situated.
Art. 153. The family home is deemed constituted on a house and lot from
the time it is occupied as a family residence. From the time of its
constitution and so long as any of its beneficiaries actually resides therein,
the family home continues to be such and is exempt from execution,
forced sale or attachment except as hereinafter provided and to the
extent of the value allowed by law.
Under the Family Code, a family home is deemed constituted on a house and lot from
the time it is occupied as a family residence. There is no need to constitute the same
judicially or extrajudicially as required in the Civil Code. If the family actually resides in
the premises, it is, therefore, a family home as contemplated by law. Thus, the
creditors should take the necessary precautions to protect their interest before
extending credit to the spouses or head of the family who owns the home.
Article 155 of the Family Code also provides as follows:
Art. 155. The family home shall be exempt from execution, forced sale or
attachment except:
(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such
constitution; and
The exemption provided as aforestated is effective from the time of the constitution of
the family home as such, and lasts so long as any of its beneficiaries actually resides
therein.
In the present case, the residential house and lot of petitioner was not constituted as a
family home whether judicially or extrajudicially under the Civil Code. It became a
family home by operation of law only under Article 153 of the Family Code. It is
deemed constituted as a family home upon the effectivity of the Family Code on August
3, 1988 not August 4, one year after its publication in the Manila Chronicle on August 4,
1987 (1988 being a leap year).
The contention of petitioner that it should be considered a family home from the time it
was occupied by petitioner and his family in 1969 is not well- taken. Under Article 162
of the Family Code, it is provided that "the provisions of this Chapter shall also govern
existing family residences insofar as said provisions are applicable." It does not mean
that Articles 152 and 153 of said Code have a retroactive effect such that all existing
family residences are deemed to have been constituted as family homes at the time of
their occupation prior to the effectivity of the Family Code and are exempt from
execution for the payment of obligations incurred before the effectivity of the Family
Code. Article 162 simply means that all existing family residences at the time of the
effectivity of the Family Code, are considered family homes and are prospectively
entitled to the benefits accorded to a family home under the Family Code. Article 162
does not state that the provisions of Chapter 2, Title V have a retroactive effect.
Is the family home of petitioner exempt from execution of the money judgment
aforecited No. The debt or liability which was the basis of the judgment arose or was
incurred at the time of the vehicular accident on March 16, 1976 and the money
judgment arising therefrom was rendered by the appellate court on January 29, 1988.
Both preceded the effectivity of the Family Code on August 3, 1988. This case does not
fall under the exemptions from execution provided in the Family Code.
As to the agricultural land subject of the execution, the trial court correctly ruled that
the levy to be made by the sheriff shall be on whatever rights the petitioner may have
on the land.
SO ORDERED.
Narvasa (Chairman), Cruz and Medialdea, JJ., concur. Griño-Aquino, J., is on leave.
Footnotes
DIZON, J.:
Action for partition commenced by the spouses Consolacion Florentino and Francisco
Crisologo against Manuel Singson in connection with a residential lot located a Plaridel
St., Vigan, Ilocos Sur, with an area of approximately 193 square meters, and the
improvements existing thereon, covered by Tax No. 10765-C. Their complaint alleged
that Singson owned one-half pro-indiviso of said property and that Consolacion
Florentino owned the other half by virtue of the provisions of the duly probated last will
of Dña. Leona Singson, the original owner, and the project of partition submitted to,
and approved by the Court of First Instance of Ilocos Sur in special Proceeding No. 453;
that plaintiffs had made demands for the partition of said property, but defendant
refused to accede thereto, thus compelling them to bring action.
Defendant's defense was that Consolacion Florentino was a mere usufructuary of, and
not owner of one-half pro-indiviso of the property in question, and that, therefore, she
was not entitled to demand partition thereof.
After trial upon the issue thus posed, the lower court rendered judgment as follows:
1. Declaring that the plaintiff is a co-owner pro-indiviso with the defendant of the
house and lot described in the complaint to the extent of each of an undivided
1/2 portion thereof; .
3. That in the event the said parties shall fail to do so, this Court will appoint the
corresponding commissioners to make the partition in accordance with law; and .
It is admitted that Dña. Leona Singson, who died single on January 13, 1948, was the
owner of the property in question at the time of her death. On July 31, 1951 she
executed her last will which was admitted to probate in Special Proceeding No. 453 of
the lower court whose decision was affirmed by the Court of Appeals in G.R. No. 3605-
R. At the time of the execution of the will, her nearest living relatives were her brothers
Evaristo, Manuel and Dionisio Singson, her nieces Rosario, Emilia and Trinidad, and her
grandniece Consolation, all surnamed Florentino.
Art. 774. The testator may designate one or more persons to substitute the heir
or heirs instituted in case such heir or heirs should die before him, or should not
wish or should be unable to accept the inheritance.
1. Fiduciary substitutions not made expressly, either by giving them this name or
by imposing upon the fiduciary the absolute obligation of delivering the property
to a second heir." ....
In accordance with the first legal provision quoted above, the testator may not only
designate the heirs who will succeed him upon his death, but also provide for
substitutes in the event that said heirs do not accept or are in no position to accept the
inheritance or legacies, or die ahead of him.
The testator may also bequeath his properties to a particular person with the obligation,
on the part of the latter, to deliver the same to another person, totally or partially,
upon the occurrence of a particular event (6 Manresa, p. 1112).
It is clear that the particular testamentary clause under consideration provides for a
substitution of the heir named therein in this manner: that upon the death of
Consolacion Florentino — whether this occurs before or after that of the testatrix — the
property bequeathed to her shall be delivered ("se dara") or shall belong in equal parts
to the testatrix's three brothers, Evaristo, Manuel and Dionisio, or their forced heirs,
should anyone of them die ahead of Consolacion Florentino. If this clause created what
is known as sustitucion vulgar, the necessary result would be that Consolacion
Florentino, upon the death of the testatrix, became the owner of one undivided half of
the property, but if it provided for a sustitution fideicomisaria, she would have acquired
nothing more than usufructuary rights over the same half. In the former case, she
would undoubtedly be entitled to partition, but not in the latter. As Manresa says, if the
fiduciary did not acquire full ownership of the property bequeathed by will, but mere
usufructuary rights thereon until the time came for him to deliver said property to the
fideicomisario, it is obvious that the nude ownership over the property, upon the death
of the testatrix, passed to and was acquired by another person, and the person cannot
be other than the fideicomisario (6 Manresa p. 145).
Para que la sustitucion sea fideicomisaria, es preciso segun el art. 781, que se
ordeno o encargue al primer heredero, cuando sea tal, que conserve y transmita
a una tercera persona o entidad el todo a parte de la herencia. O lo que es lo
mismo, la sustitucion fideicomisaria, como declaran las resoluciones de 25 de
Junio de 1895, 10 de Febrero de 1899 y 19 de Julio de 1909, exige tres
requisitos: .
A careful perusal of the testamentary clause under consideration shows that the
substitution of heirs provided for therein is not expressly made of the fideicommissary
kind, nor does it contain a clear statement to the effect that appellee, during her
lifetime, shall only enjoy usufructuary rights over the property bequeathed to her,
naked ownership thereof being vested in the brothers of the testatrix. As already
stated, it merely provides that upon appellee's death — whether this happens before or
after that of the testatrix — her share shall belong to the brothers of the testatrix.
In the light of the foregoing, we believe, and so hold, that the last will of the deceased
Dña. Leona Singson, established a mere sustitucion vulgar, the substitution Consolacion
Florentino by the brothers of the testatrix to be effective or to take place upon the
death of the former, whether it happens before or after that of the testatrix.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera,
Paredes and De Leon, JJ., concur.
SECOND DIVISION
Petitioners,
CARPIO, J.,
Chairperson,
NACHURA,
- versus -
PERALTA,
ABAD, and
MENDOZA, JJ.
RENATO M. OCAMPO and Promulgated:
ERLINDA M. OCAMPO,
Respondents.
July 5, 2010
x---------------------------------------------------------------------------
---------x
DECISION
NACHURA, J.:
On June 24, 2004, five (5) months after the death of Leonardo,
petitioners initiated a petition for intestate proceedings,
entitled In Re: Intestate Proceedings of the Estate of Sps. Vicente
Ocampo and Maxima Mercado Ocampo, and Leonardo M.
Ocampo, in the RTC, Branch 24, Bian, Laguna, docketed as Spec.
Proc. No. B-3089.[5] The petition alleged that, upon the death of
Vicente and Maxima, respondents and their brother Leonardo
jointly controlled, managed, and administered the estate of their
parents. Under such circumstance, Leonardo had been receiving
his share consisting of one-third (1/3) of the total income
generated from the properties of the estate. However, when
Leonardo died, respondents took possession, control and
management of the properties to the exclusion of petitioners. The
petition prayed for the settlement of the estate of Vicente and
Maxima and the estate of Leonardo. It, likewise, prayed for the
appointment of an administrator to apportion, divide, and award
the two estates among the lawful heirs of the decedents.
Respondents filed their Opposition and Counter-Petition dated
October 7, 2004,[6] contending that the petition was defective as
it sought the judicial settlement of two estates in a single
proceeding. They argued that the settlement of the estate of
Leonardo was premature, the same being dependent only upon
the determination of his hereditary rights in the settlement of his
parents estate. In their counter-petition, respondents prayed that
they be appointed as special joint administrators of the estate of
Vicente and Maxima.
In its June 15, 2006 Order,[11] the RTC appointed Dalisay and
Renato as special joint administrators of the estate of the
deceased spouses, and required them to post a bond
of P200,000.00 each.[12]
Respondents filed a Motion for Reconsideration dated August
1, 2006[13] of the Order, insisting that Dalisay was incompetent
and unfit to be appointed as administrator of the estate,
considering that she even failed to take care of her husband
Leonardo when he was paralyzed in 1997. They also contended
that petitioners prayer for Dalisays appointment as special
administrator was already deemed abandoned upon their
nomination of the Bian Rural Bank to act as special administrator
of the estate.
In an Order dated June 29, 2007,[19] the RTC directed the parties
to submit their respective comments or oppositions to the
pending incidents, i.e., petitioners Motion for Inventory and to
Render Account, and respondents Motion for Exemption to File
Administrators Bond.
On October 15, 2007, or eight (8) months after the February 16,
2007 Order appointing respondents as special joint
administrators, petitioners filed a Motion to Terminate or Revoke
the Special Administration and to Proceed to Judicial Partition or
Appointment of Regular Administrator.[21] Petitioners contended
that the special administration was not necessary as the estate is
neither vast nor complex, the properties of the estate being
identified and undisputed, and not involved in any litigation
necessitating the representation of special
administrators. Petitioners, likewise, contended that respondents
had been resorting to the mode of special administration merely
to delay and prolong their deprivation of what was due
them. Petitioners cited an alleged fraudulent sale by respondents
of a real property for P2,700,000.00, which the latter represented
to petitioners to have been sold only for P1,500,000.00, and
respondents alleged misrepresentation that petitioners owed the
estate for the advances to cover the hospital expenses of
Leonardo, but, in fact, were not yet paid.
Respondents filed their Opposition and Comment[22] on March 10,
2008, to which, in turn, petitioners filed their Reply to
Opposition/Comment[23] on March 17, 2008.
In its Order dated March 13, 2008,[24] the RTC granted petitioners
Motion, revoking and terminating the appointment of Renato and
Erlinda as joint special administrators, on account of their failure
to comply with its Order, particularly the posting of the required
bond, and to enter their duties and responsibilities as special
administrators, i.e., the submission of an inventory of the
properties and of an income statement of the estate. The RTC
also appointed Melinda as regular administratrix, subject to the
posting of a bond in the amount of P200,000.00, and directed her
to submit an inventory of the properties and an income statement
of the subject estate. The RTC likewise found that judicial
partition may proceed after Melinda had assumed her duties and
responsibilities as regular administratrix.
Our Ruling
(a) To make and return to the court, within three (3) months, a
true and complete inventory of all goods, chattels, rights, credits, and
estate of the deceased which shall come to his possession or
knowledge or to the possession of any other person for him;
(a) Is a minor;
xxxx
(b) The names, ages, and residences of the heirs, and the
names and residences of the creditors, of the decedent;
(c) The probable value and character of the property of the
estate;
SO ORDERED.
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
Associate Justice
ATTESTATION
Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
[1]
Rollo, pp. 12-33.
[2]
Penned by Associate Justice Ramon R. Garcia, with Associate Justices Josefina Guevara-
Salonga and Magdangal M. de Leon, concurring; id. at 34-51.
[3]
Id. at 52-53.
[4]
Id. at 54-55.
[5]
Id. at 35-36.
[6]
Id. at 36.
[7]
Id. at 36-37.
[8]
Id. at 37.
[9]
Id.
[10]
Id.
[11]
Id.
[12]
As admitted by respondents in their Petition for Certiorari with Urgent Prayer for the
Issuance of a Temporary Restraining Order and/or Preliminary Injunction; id. at 86.
[13]
Id. at 38.
[14]
Id.
[15]
Id.
[16]
Id. at 39.
[17]
Id.
[18]
Id. at 40.
[19]
Id.
[20]
Id. at 40-41.
[21]
Id. at 56-63.
[22]
Id. at 71-75.
[23]
Id. at 76-80.
[24]
Id. at 54-55.
[25]
Id. at 81-107.
[26]
Id. at 108-132.
[27]
Id. at 142-145.
[28]
Id. at 146-155.
[29]
Rule 80.
[30]
Id.
[31]
Rule 81.
[32]
Id.
Co v. Rosario, G.R. No. 160671, April 30, 2008, 553 SCRA 225, 229.
[33]
Heirs of Belinda Dahlia A. Castillo v. Lacuata-Gabriel, G.R. No. 162934, November 11,
[34]
2005, 474 SCRA 747, 757; Valarao v. Pascual, 441 Phil. 226, 238 (2002).
[35]
Tan v. Gedorio, Jr., G.R. No. 166520, March 14, 2008, 548 SCRA 528, 537.
[36]
Co v. Rosario, supra note 33, at 228; Tan v. Gedorio, Jr., supra, at 536; Heirs of Belinda
Dahlia A. Castillo v. Lacuata-Gabriel, supra note 34, at 760; Pijuan v. De Gurrea, 124 Phil.
1527, 1531-1532 (1966); Roxas v. Pecson, 82 Phil. 407, 410 (1948).
[37]
Co v. Rosario, supra note 33, at 228; Rivera v. Hon. Santos, et al., 124 Phil. 1557, 1561
(1966).
[38]
Infra.
[39]
Co v. Rosario, supra note 33, at 228; Fule v. Court of Appeals, 165 Phil. 785, 800
(1976).
[40]
Tan v. Gedorio, Jr., supra note 35, at 536; Jamero v. Melicor, 498 Phil. 158, 165-166
(2005).
[41]
Commissioner of Internal Revenue v. Court of Appeals, 385 Phil. 397, 409
(2000); Moran Sison v. Teodoro, 100 Phil. 1055, 1058 (1957); Sulit v. Santos, 56 Phil. 626,
630 (1932).
[42]
Annex N to the Petition for Certiorari before the CA.
[43]
Per respondents Petition for Certiorari before the CA; rollo, p. 96.
[44]
Per petitioners Comment to the petition before the CA; id. at 114.
[45]
Id. at 64-65.
[46]
Id. at 66-67.
[47]
Id. at 68-70.
[48]
Co v. Rosario, supra note 33, at 228-229.
[49]
Rollo, p. 41.
[50]
As admitted by respondents in their Comment; id. at 165-166.