SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
[73] G.R. No. 43351 February 26, 1937
Intestate estate of the deceased Baldomero Cosme.
ROSARIO COSME DE MENDOZA, administratrix-appellee,
vs.
JANUARIO PACHECO and RAYMUNDO CORDERO, sureties-appellants.
Vicente J. Francsico and Estanislao A. Fernandez, Jr. for appellants.
R. Gonzales Lloret for appellee.
LAUREL, J.:
The facts in this case are not disputed. Manuel Soriano was former administrator of
the estate of Baldomero Cosme in civil case No. 5494, Court of First Instance of
Laguna. To assure faithful performance of his duties as such administrator, he filed a
bond for P5,000, with the herein appellants, Januario Pacheco and Raymundo
Cordero, as sureties. Soriano's account, upon approval, showed him indebted to the
estate in the sum of P23,603.21. Unable to turn this amount over to the estate upon
demand of Rosario Cosme, the new administratrix, the lower court ordered the
execution of his bond on November 4, 1932, after notice duly served upon the
sureties. Sometime later, the court approved a settlement had between the
adminstratrix and the ex-administrator, whereby the latter ceded certain real
properties to the estate reducing on that account his indebtedness to the estate from
P23,603.21 to P5,000. As to this last amount, "La administradora se atiene a la orden
de ejecucion de la fianza suscrita por los fiadores Januario Pacheco y Raymundo
Cordero" (Record on Appeal, p. 2). Subsequently, the administratrix had the public
sale thereof to collect this amount of P5,000. Separate motions to he discharged from
the bond were filed by sureties Pacheco and Cordero. Both motions were denied. A
motion by Cordero to reconsider the order of denial met a like fate. Brought on appeal
to this court, the appeal was dismissed. The dispositive part of the decision of this
court (G. R. No. 40998, Cosme de Mendoza vs. Pacheco and Cordero [60 Phil., 1057])
reads as follows:
The motion of October 1, 1933, was filed only on behalf of Raymundo Cordero who
filed no motion for reconsideration of the order of execution of November 4, 1932,
and took no appeal therefrom. Being of the opinion that the trial court correctly held
that said order had become final, the motion of October 31, 1933, for reconsideration
(if such it may be called) came too late. The judgment is therefore affirmed with costs
against the appellants.
When the case was remanded to the lower court, the sureties filed a motion
challenging, for the first time, the jurisdiction of the trial court to issue the order of
November 4, 1932, executing the bond. The trial court denied the motion in view of
the decision of this court. The case is elevated here for the second time on appeal.
Appellants assign the following error:
The lower court erred in refusing: (a) To declare null and void its order of execution
of the ex-administrator's bond of November 4, 1932, as well as the writs of execution
issued in virtue thereof; (b) to accordingly vacate said order of November 4, 1932,
and order the release of the properties of the herein sureties-appellants attached in
pursuance of the writs of execution issued against them by virtue of said order; and
(c) to order the suspension of the execution of the said order of November 4, 1932,
until this case is finally decide.
In the discussion of the foregoing assignment of error in their brief (pp. 9-23), the
appellants take in six propositions. One question, however, — that of jurisdiction of
the Court of First Instance of Laguna to order the execution of the administrator's
bond — is decisive of this appeal. Appellants, sureties upon the bond, press the point
that the order in suit is an absolute nullity for lack of power in the issuing court. "In
vain," they tell us, "have we searched our statute books, especially the part of our
Code of Civil Procedure regarding probate jurisdiction, to find whether our Courts of
First Instance, acting as probate courts, have the power to order the execution of an
administrator's bond." Neither their failure to assail that jurisdiction when they ought
nor the subsequent affirmance of the order by this court, they say, could revive an
order dead from its inception.
To begin with, it lies within discretion of the court to select an administrator of the
estate of a deceased person (Capistrano vs. Nadurata, 46 Phil., 726, 727). Before an
administrator, or an executor, enters upon the execution of his trust, and letters
testamentary or of administration are issued, the person to whom they are issued is
required to give a bond in such reasonable sum as the court directs, with one or more
sufficient sureties, conditioned upon the faithful performance of his trust (Code of
Civil Procedure, sec. 643, 662). The administrator is accountable on his bond along
with the sureties for the performance of certain legal obligations. (Tan vs. Go Chiong
Lee, 46 Phil., 200, 205. See also, Stovall vs. Banks, 10 Wall., 583, 588; 19 Law. ed.,
1036; Long vs. O'Fallon, 19 How., 116; 15 Law. ed., 550.)
It is clear that a Court of First Instance, exercising probate jurisdiction, is empowered
to require the filing of the administrator's bond, to fix the amount thereof, and to hold
it accountable for any breach of the administrator's duty. Possessed, as it is, with an
all-embracing power over the administrator's bond and over administration
proceedings, a Court of First Instance in a probate proceeding cannot be devoid of
legal authority to execute and make that bond answerable for the very purpose for
which it was filed. It is true that the law does not say expressly or in so many words
that such court has power to execute the bond of an administrator, but by necessary
and logical implication, the power is there as eloquently as if it were phrased in
unequivocal term. When the accountability of an administrator's bond is spoken of in
the very provisions dealing with and bearing directly on administration proceedings,
it would involve a strained construction to hold, as appellants would have us do, that
where an administrator is held liable for a devastravit for having squandered and
misapplied property which he was in duty bound to marshal and conserve, the estate
is without a remedy to go against the administrator's bond in the same probate
proceedings, but in an action outside of and separate from it. In this connection, it
should be observed that section 683 of the Code of Civil Procedure provides that
"Upon the settlement of the account of an executor or administrator, trustee, or
guardians, a person liable as surety in respect to such amount may, upon application,
be admitted as a party to such accounting, and may have the right to appeal as
hereinafter provided." There is here afforded to a person who may be held liable as
surety in respect to an administrator's account the right, upon application, to be
admitted as a party to their accounting, from which we may not unreasonably infer
that a surety, like the appellants in the case before us, may be charged with liability
upon the bond during the process of accounting, that is, within the recognized
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

confines of probate proceedings, and not in an action apart and distinct from such and settled. It will be recalled that the appellants could have raised the question of
proceedings. jurisdiction now pressed upon us in civil case No. 5494 of the Court of First Instance
of Laguna and on appeal of that case to this court once before (G. R. No. 40998 [60
Appellants in their brief direct our attention to several cases decided by this court Phil., 1057]). They not failed to avail of that right but failed to appeal from the order
holding that Courts of First Instance, as probate courts, have no power to adjudicate complained of (Vide, Decision of this court in G. R. No. 40998, Cosme de
on claims of other persons on property forming part of the estate, by title adverse to Mendoza vs. Pacheco and Cordero). The questions raised in the appeal at bar,
the deceased (Guzman vs. Anog and Anog, 37 Phil., 61, 62); on the legal usufruct of appellant's second attempt to go about and frustrate the order in question, could have
the widow (Sahagun vs. De Gorosita, 7 Phil., 347, 351), and on the validity of been passed upon once for all in the case referred to. We cannot encourage a practice
testamentary dispositions (Castañeda vs.Alemany, 3 Phil., 426, 428). We have that trenches violently upon the settled jurisprudence of this court that the policy and
carefully examined these cases in relation to the facts and circumstances of the case purpose of administration proceedings is ". . . to close up, and not to continue an
at bar. We take the view, however, that the execution of an administrator's bond, estate . . ." (Lizarraga Hermanos vs. Abada, 40 Phil., 124, 133), and that ". . . the
unlike the questions involved in the cited cases, clearly stands upon a different State fails wretchedly in its duty to its citizens if the machinery furnished by it for the
footing, and is as necessary a part and incident of the administration proceeding as division and distribution of the property of a decedent is so cumbersome, unwidely
the filing of such bond or the fixing of its amount. Particularly is this true in the present and expensive that a considerable portion of the sate is absorbed in the process of
case where Soriano's indebtedness to the sate in the amount of P23,603.21, such division. Where administration is necessary, it ought to be accomplished
subsequently reduced to P5,000, is conceded on all sides, and all that the trial court consumes any considerable portion of the property which it was designed to distribute
had to do was to see that said amount was turned over to the estate. is a failure. . . ." (McMicking vs. Sy Conbieng, 21 Phil., 211, 220.)
It is the duty of courts of probate jurisdiction to guard jealously the estates of the The order appealed from is hereby affirmed, with costs against the appellants. So
deceased person by intervening in the administration thereof in order to remedy or ordered.
repair any injury that may be done thereto (Dariano vs. Fernandez Fidalgo, 14 Phil.,
62, 67; Sison vs. Azarraga, 30 Phil., 129, 134). "Probate and like courts have a
special jurisdiction only, and their powers as to ancillary or incidental questions must
of necessity to exercise within certain limitations; but such powers include the right
to try questions which arise incidentally in a cause over which such courts have
jurisdiction and the determination of which are necessary to a lawful exercise of the
powers expressly conferred in arriving at a decision. . . . There seems, however, to
be a general tendency, in the absence of express and specific restrictions to the
contrary, to uphold the exercise by these court of such incidental powers as are,
within the purview of their grant of authority, reasonably necessary to enable them
to accomplish the objects for which they were invested with jurisdiction and to perfect
the same. And it has been held that statutes conferring jurisdiction on such courts,
being remedial and for the advancement of justice, should receive a favorable
construction, such as will give them the force and efficiency intended by the
legislature." (15 C. J., 813, 814.) The tendency in the United States indeed has been
towards the enlargement of the powers of probate courts. In the beginning these
courts were possessed but limited powers. Having originated from the ecclesiastical
courts of England, their jurisdiction, following their English patterns was practically
limited to the probate of wills, the granting of administrators, and the suing for
legacies (Plant vs. Harrion, 74 N. Y. Sup., 411, 441; 36 Misc. Rep., 649;
Chadwick vs. Chadwick, 13 Pac., 385, 388; 6 Mont., 566; 3 Bl. Comm., pp. 95-98).
But, though they still are often unadvisedly described, particularly in Connecticut
(Griffin vs. Pratt, 3 Conn., 513), as courts of limited, inferior or special jurisdiction,
they have outgrown their limitations and have become courts with considerably
increased powers (Woerner, The American Law of Administration [2d], sec. 145;
Plant vs. Harrison, supra).

What has been said sufficiently determinative of the appeal before us. We wish,
however, to say a word on a salutary consideration of policy which has been invariably
followed by this court in cases of this nature. We refer to the dispatch and economy
with which administration of the estates of deceased persons should be terminated

[74] G.R. No. L-6637 September 30, 1954
WARNER BARNES AND CO., LTD., plaintiff-appellee,
vs.
LUZON SURETY CO., INC., defendant-appellant.
Tolentino and Garcia and Domingo R. Cruz for appellant.
Hilado and Hilado and Reyes and Castro for appellee.
PARAS, C.J.:
On September 17, 1952, the plaintiffs, Warner, Barnes and Co., Ltd., filed a complaint
in the Court of First Instance of Negros Occidental against the defendant, Luzon
Surety Co., Inc., of the recovery of the sum of P6,000, plus the costs and P1,500 for
attorney's fees. The basis of the complaint was a bond in the sum of P6,000 filed by
Agueda Gonzaga as administratrix of the Intestate Estate of Agueda Gonzaga on or
about January 6, 1951, in Special Proceedings No. 452 of the Court of First Instance
of Negros Occidental, the condition being that said bond would be void if the
administratrix "faithfully prepares and presents to the Court, within three months
from the date of his appointment, a correct inventory of all the property of the
deceased which may have come into his possession or into the possession of any
other person representing him according to law, if he administers all the property of
the deceased which at any time comes into his possession or into the possession of
any other person representing him; faithfully pays all debts, legacies, and bequests
which encumber said estate, pays whatever dividends which the Court may decide
should be paid, and renders a just and true account of his administrations to the Court
within a year or at any other date that he may required so to do, and faithfully
executes all orders and decrees of said court." It was alleged in the complaint that
the plaintiff had a duly approved claim against the Estate of Aguedo Gonzaga in the
sum of P6,485.02, plus 2 per cent annual interest compounded monthly from October
1, 1941; that the administratrix violated the conditions of her bond "(a) by failing to
file an inventory of the assets and funds of the estate that had come into her hands,
more particularly, the sum of P67,861.22 that she had received form the United
States Philippine War Damage Commission; (b) by failing to pay or discharge the
approved claim of the plaintiff; (c) by failing to render a true and just account of her
administration in general, and of the said war damage payments in particular."; that
the defendant, as surety in the bond, failed to pay to the plaintiff, notwithstanding
the latter's demand, the sum of P6,000, in partial satisfaction of plaintiff's unpaid
claim which, after deduction the sum of P3,000 previously paid upon account by the
administratrix, amounted to P8,186.68 as of August 31, 1952.
The defendant filed an answer setting up the special defenses that the complaint did
not state a cause of action; that its maximum liability under the surety bond is
P6,000; that if it were not for the untimely death of the judicial administratrix, she
would have been able to fully comply with her duties and obligations; that the
administratrix, up to her death, had not yet been authorized by the court in Special
Proceedings No. 452 to pay plaintiff's claim; that the defendant's liability had been
extinguished; that damages or attorney's fees cannot be recovered under the surety
bond.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
On January 6, 1953, the plaintiff filed a motion for summary judgment, alleging that
"the special defenses relied upon by the defendant in her Answer raise only questions
of law, and the plaintiff believes that said defendant cannot produce counter-affidavits
that would raise any 'genuine issues as to any material facts.' This motion was
accompanied by Exhibits "A" to "H", Exhibits "A" being an affidavit of Atty. Luis G.
Hilado who signed the complaint.
As the defendant did not file counter-affidavits so as to raise genuine issues as to any
material fact, although a copy of the motion for summary judgment was served upon
it eleven days prior to the date of the hearing thereon, the Court of First Instance of
Negros Occidental rendered on January 17, 1953, a summary judgment sentencing
the defendant to pay to the plaintiff the sum of P6,000, P900 for attorney's fees, plus
the costs. From this judgment the defendant appealed.
Under the first assignment of error, the appellant contends that the lower court had
no jurisdiction to pass upon its liability under the bond in question, because it is only
the probate court that can hold a surety accountable for any breach by the
administratrix of her duty, citing the case of Mendoza vs. Pacheco, 64 Phil., 134. It
is, however, noteworthy that while the citation is to the effect that the probate court
has jurisdiction over the forefeiture or enforcement of an administrator's bond, it was
not held therein that the same matter may not be litigated in an ordinary civil action
brought before the court of first instance.
Under the second assignment of error, the appellant claims that there are genuine
controversies between the parties litigant, and that, contrary to the allegations of the
complaint, the administratrix made a return to the court of the war damage payments
she received; the administratrix cannot be charged with having failed to pay plaintiff's
claim because there is no showing that she was ever authorized to pay approved
claims; the administratrix may be presumed to have rendered an accounting of her
administration, likely in 1948, in accordance with section 8 of Rule 86 of the Rules of
Court. In answer, it is sufficient to state that the allegations that the administratrix
failed to file an inventory, to pay the plaintiff's claim, and to render a true and just
account of her administration, are factual and remained uncontroverted by counter-
affidavits which the appellant could have easily filed.
It is also argued for the appellant that the supporting affidavit Exhibit "A" is
insufficient, being signed merely by the lawyer, and not by a party to the case or an
officer of the plaintiff firm. This is without merit, since Exhibit A contains an express
statement that the affiant, Atty. Luis G. Hilado, had "personal knowledge of the facts"
alleged therein; and this cannot be negatived by appellant's speculation to the
contrary.
Under the third and fourth assignments of error, it is insisted for the appellant that
the bond in question was executed in favor of the Republic of the Philippines and that
the proper procedure would seem to be that it might be enforced in the administration
proceedings were it was filed. This view is likewise not tenable. Though nominally
payable to the Republic of the Philippines, the bond is expressly for the benefit of the
heirs, legatees and creditors of the Estate of the deceased Aguedo Gonzaga. There is
no valid reason why a creditor may not directly in his name enforce said bond in so
far as he is concerned.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Under the fifth assignment of error, it is alleged that the plaintiffs should have first
filed a claim against the Estate of the deceased administratrix Agueda Gonzaga, in
conformity with section 6 of Rule 87 of the Rules of Court providing that "Where the
obligation of the decedent is joint and several with another debtor, the claim shall be
filed against the decedent as if he were the only debtor, without prejudice to the right
of the estate to recover contribution from the other debtor." Apart from the fact that
his defense was not pleaded either in a motion to dismiss or in the answer and was
therefore waived (section 10, Rule 9 of the Rules of Court), it appears that even as
late as September 17, 1952, when the present complaint was filed, (more than two
years after the death of Agueda Gonzaga), there were no proceedings for the
administration of her estate, with the result that section 6 of Rule 87 loses its
applicability. Moreover, it is to be noted that the appellant had also chosen to file a
third-party complaint in the present case against Romualdo Araneta, joint and several
counter-guarantor of the deceased administratrix, instead of presenting a claim
against the latter's estate.

In its sixth assignment of error, the lower court is alleged to have erred in sentencing
the appellant to pay attorney's fees in the sum of P900, in excess of the limit of its
bond. This contention is tenable. Under section 3 of Rule 36 of the Rules of Court, a
summary judgment may be rendered upon proper motion except as to the amount of
damages.1âwphïl.nêt

There being no proof regarding the amount of attorney's fees claimed by the plaintiff,
no judgment thereon may be rendered herein. It is, however, argued by the counsel
for appellee that said fees are in pursuance of article 2208 of the Civil Code, providing
that attorney's fees cannot be recovered except "where the defendant acted in gross
and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and
demandable claim"; and it alleged in the complaint that the appellant had so acted in
this case. While the provision cited authorizes the collection of attorney's fees under
the situation contemplated herein, it does not dispense with the effect of section 3 of
Rule 36.

Wherefore, it being understood that the defendant-appellant is sentenced to pay to

the plaintiff-appellee only the sum of P6,000, plus the cost, the same is hereby
affirmed.

[75] G.R. No. L-40517 January 31, 1984
LUZON SURETY COMPANY, INC., plaintiff-appellee,
vs.
PASTOR T. QUEBRAR and FRANCISCO KILAYKO, defendants-appellants.
Tolentino & Garcia & D. R. Cruz for plaintiff-appellee.
Zoilo V. dela Cruz, Jr. for defendants-appellants.
MAKASIAR, J.:
This is an appeal from the judgement of the Court of First Instance of Manila in Civil
Case No. 52790 dated November 3, 1964 which was certified to this Court by the
Court of Appeals in its resolution dated March 20, 1975.
On August 9, 1954, plaintiff-appellee issued two administrator's bond in the amount
of P15,000.00 each, in behalf of the defendant-appellant Pastor T. Quebrar, as
administrator in Special Proceedings Nos. 3075 and 3076 of the Court of First Instance
of Negros Occidental, entitled " Re Testate Estate of A. B. Chinsuy," and Re Testate
Estate of Cresenciana Lipa," respectively, (pp. 8-12, 17-21, ROA; p. 9 rec.). In
consideration of the suretyship wherein the plaintiff-appellee Luzon Surety Company,
Inc. was bound jointly and severally with the defendant appellant Pastor T. Quebrar,
the latter, together with Francisco Kilayko, executed two indemnity agreements,
where among other things, they agreed jointly and severally to pay the plaintiff-
appellee "the sum of Three Hundred Pesos (P300.00) in advance as premium thereof
for every 12 months or fraction thereof, this ... or any renewal or substitution thereof
is in effect" and to indemnify plaintiff-appellee against any and all damages, losses,
costs, stamps taxes, penalties, charges and expenses, whatsoever, including the 15%
of the amount involved in any litigation, for attomey's fees (pp. 12-16, 21-25. ROA;
p. 9, rec.).
For the first year, from August 9, 1954 to August 9, 1955, the defendants-appellants
paid P304.50 under each indemnity agreement or a total of P609.00 for premiums
and documentary stamps.
On June 6, 1957, the Court of First Instance of Negros Occidental approved the
amended Project of Partition and Accounts of defendant-appellant (p. 87, ROA; p. 9,
rec.).
On May 8, 1962, the plaintiff-appellee demanded from the defendants-appellants the
payment of the premiums and documentary stamps from August 9,1955.
On October 17, 1962, the defendants-appellants ordered a motion for cancellation
and/or reduction of executor's bonds on the ground that "the heirs of these testate
estates have already received their respective shares" (pp. 69-70, ROA, p. 9, rec.).
On October 20, 1962, the Court of First Instance of Negros Occidental acting on the
motions filed by the defendants-appellants ordered the bonds cancelled.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Plaintiff-appellee's demand amounted to P2,436.00 in each case, hence, a total of
P4,872.00 for the period of August 9, 1955 to October 20, 1962. The defendants-
appellants to pay the said amount of P4,872.00.
On January 8, 1963, the plaintiff-appellee filed the case with the Court of First
Instance of Manila During the pre-trial the parties presented their documentary
evidences and agreed on the ultimate issue - "whether or not the administrator's
bonds were in force and effect from and after the year that they were filed and
approved by the court up to 1962, when they were cancelled." The defendants-
appellants offered P1,800.00 by way of amicable settlement which the plaintiff-
appellee refused.
The lower court allowed the plaintiff to recover from the defendants-appellants,
holding that:
We find for the plaintiff it is clear from the terms of the Order of the Court in which
these bond were filed, that the same were in force and effect from and after filling
thereof up to and including 20 October, 1962, when the same werecancelled. It
follows that the defendants are liable under the terms of the Indemnity Agreements,
notwithstanding that they have not expressly sought the renewal of these bonds
bemuse the same were in force and effect until they were cancelled by order of the
Court. The renewal of said bonds is presumed from the fact that the defendants did
not ask for the cancellation of the same; and their liability springs from the fact that
defendant Administrator Pastor Quebrar, benefited from the bonds during their
lifetime.
We find no merit in defendants' claim that the Administrator's bonds in question are
not judicial bonds but legal or conventional bonds only, since they were constituted
by virtue of Rule 82, Sec. 1 of the Old Rule of Court. Neither is there merit in
defendants, claim that payments of premiums and documentary stamps were
conditions precedent to the effectivity of the bonds, since it was the defendants' duty
to pay for the premiums as long as the bonds were in force and effect. Finally,
defendants' claim that they are not liable under the Indemnity Agreements is also
without merit since the under of defendants under said Indemnity Agreements;
includes the payment of yearly pre for the bonds.
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants, ordering the tsn the defendant to pay the plaintiff, jointly and severally,
the amount of P6,649.36 plus interest at the legal rate from 27 July 1964 until fully
paid and the sum equivalent to 10% of the total amount due as and or attorney's
fees, and costs (pp. 92-94, ROA; p. 9, rec.).
Defendants-appellants appealed to the Court of Appeals. On March 20, 1975, the
Court of Appeals in a resolution certified the herein case to this Court after finding
that this case involves only errors or questions of law.
1. The proper determination of the liability of the surety and of the principal on the
bond must depend primarily upon the language of the bond itself. The bonds herein
were required by Section 1 of Rule 81 of the Rules of Court. While a bond is
nonetheless a contract because it is required by statute (Midland Co. vs. Broat 52 NW
972), said statutory bonds are construed in the light of the statute creating the
obligation secured and the purposes for which the bond is required, as expressed in

the statute (Michael vs. Logan, 52 NW 972; Squires vs. Miller, 138 NW 1062). The
statute which requires the giving of a bond becomes a part of the bond and imparts
into the bond any conditions prescribed by the statute (Scott vs. United States Fidelity
Co., 252 Ala 373, 41 So 2d 298; Employer's Liability Assurance Corp. vs. Lunt, 82
Ariz 320, 313 P2d 393).
The bonds in question herein contain practically the very same conditions in Sec. 1,
Rule 81 of the Rules of Court. Pertinent provision of the administrator's bonds is as
follows:
Therefore, if the said Pastor T. Quebrar faithfully prepares and presents to the Court,
within three months from the date of his appointment, a correct inventory of all the
property of the deceased which may have come into his possession or into the
possession of any other person representing him according to law, if he administers
all the property of the deceased which at any time comes into his possession or into
the possession of any other person representing him; faithfully pays all the debts,
legacies, and bequests which encumber said estate, pays whatever dividends which
the Court may decide should be paid, and renders a just and true account of his
administrations to the Court within a year or at any other date that he may be required
so to do, and faithfully executes all orders and decrees of said Court, then in this case
this obligation shall be void, otherwise it shall remain full force and effect (p. 9, 18,
ROA p. 9, rec.).
Section 1 of Rule 81 of the Rules of Court requires the administrator/executor to put
up a bond for the purpose of indemnifying the creditors, heirs, legatees and the
estate. It is conditioned upon the faithful performance of the administrator's trust
(Mendoza vs. Pacheco, 64 Phil. 134).
Having in mind the purpose and intent of the law, the surety is then liable under the
administrator's bond, for as long as the administrator has duties to do as such
administrator/executor. Since the liability of the sureties is co-extensive with that of
the administrator and embraces the performance of every duty he is called upon to
perform in the course of administration (Deobold vs. Oppermann, 111 NY 531, 19 NE
94), it follows that the administrator is still duty bound to respect the indemnity
agreements entered into by him in consideration of the suretyship
It is shown that the defendant-appellant Pastor T. Quebrar, still had something to do
as an administrator/executor even after the approval of the amended project of
partition and accounts on June 6, 1957.
The contention of the defendants-appellants that the administrator's bond ceased to
be of legal force and effect with the approval of the project of partition and statement
of accounts on June 6, 1957 is without merit. The defendant-appellant Pastor T.
Quebrar did not cease as administrator after June 6, 1957, for administration is for
the purpose of liquidation of the estate and distribution of the residue among the heirs
and legatees. And liquidation means the determination of all the assets of the estate
and payment of all the debts and expenses (Flores vs. Flores, 48 Phil. 982). It appears
that there were still debts and expenses to be paid after June 6, 1957.
And in the case of Montemayor vs. Gutierrez (114 Phil. 95), an estate may be
partitioned even before the termination of the administration proceedings. Hence, the
approval of the project of partition did not necessarily terminate the administration
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
proceedings. Notwithstanding the approval of the partition, the Court of First Instance
of Negros Occidental still had jurisdiction over the administration proceedings of the
estate of A.B. Chinsuy and Cresenciana Lipa.
2. The sureties of an administration bond are liable only as a rule, for matters
occurring during the term covered by the bond. And the term of a bond does not
usually expire until the administration has been closed and terminated in the manner
directed by law (Hartford Accident and Indemnity Co. vs. White, 115 SW 2d 249).
Thus, as long as the probate court retains jurisdiction of the estate, the bond
contemplates a continuing liability (Deobold vs. Oppermann, supra) notwithstanding
the non-renewal of the bond by the defendants-appellants.
It must be remembered that the probate court possesses an all-embracing power
over the administrator's bond and over the administration proceedings and it cannot
be devoid of legal authority to execute and make that bond answerable for the every
purpose for which it was filed (Mendoza vs. Pacheco, 64 Phil. 1-05). It is the duty of
the courts of probate jurisdiction to guard jealously the estate of the deceased
persons by intervening in the administration thereof in order to remedy or repair any
injury that may be done thereto (Dariano vs. Fernandez Fidalgo, 14 Phil. 62, 67;
Sison vs. Azarraga, 30 Phil. 129, 134).
3. In cases like these where the pivotal point is the interpretation of the contracts
entered into, it is essential to scrutinize the very language used in the contracts. The
two Indemnity Agreements provided that:
The undersigned, Pastor T. Quebrar and Dr. Francisco Kilayko, jointly and severally,
bind ourselves unto the Luzon Surety Co., Inc. ... in consideration of it having become
SURETY upon Civil Bond in the sum of Fifteen Thousand Pesos (P15,000.00) ... in
favor of the Republic of the Philippines in Special Proceeding ... dated August 9, 1954,
a copy of which is hereto attached and made an integral part hereof (emphasis
supplied; pp. 12-13, 21, ROA p. 9, rec.),
To separately consider these two agreements would then be contrary to the intent of
the parties in making them integrated as a whole.
The contention then of the defendants-appellants that both the Administrator's Bonds
and the Indemnity Agreements ceased to have any force and effect, the former since
June 6, 1957 with the approval of the project of partition and the latter since August
9, 1955 with the non-payment of the stated premiums, is without merit. Such
construction of the said contracts entered into would render futile the purpose for
which they were made.
To allow the defendants-appellants to evade their liability under the Indemnity
Agreements by non-payment of the premiums would ultimately lead to giving the
administrator the power to diminish or reduce and altogether nullify his liability under
the Administrator's Bonds. As already stated, this is contrary to the intent and
purpose of the law in providing for the administrator's bonds for the protection of the
creditors, heirs, legatees, and the estate.
4. Moreover, the lower court was correct in holding that there is no merit in the
defendants' claim that payments of premiums and documentary stamps are
conditions precedent to the effectivity of the bonds.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

It is worthy to note that there is no provision or condition in the bond to the effect
that it will terminate at the end of the first year if the premium for continuation
thereafter is not paid. And there is no clause by which its obligation is avoided or even
suspended by the failure of the obligee to pay an annual premium (U.S. vs. Maryland
Casualty Co. DCMD 129 F. Supp; Dale vs. Continental Insurance Co., 31 SW 266;
Equitable Insurance C. vs. Harvey, 40 SW 1092).
It was held in the case of Fourth and First Bank and Trust Co. vs. Fidelity and Deposit
Co. (281 SW 785), that "at the end of the first year, the bond went on, whether or
not the premium was paid or not ... Even on a failure to pay an annual premium, the
contract ran on until affirmative action was taken to avoid it. The obligation of the
bond was therefore continuous." And in United States vs. American Surety Co. of New
York (172 F2d 135), it was held that "under a surety bond securing faithful
performance of duties by postal employee, liability for default of employee occurring
in any one year would continue, whether or not a renewal premium was paid for a
later year."
With the payment of the premium for the first year, the surety already assumed the
risk involved, that is, in case defendant-appellant Pastor T. Quebrar defaults in his
administrative duties. The surety became liable under the bond for the faithful
administration of the estate by the administrator/executor. Hence, for as long as
defendant-appellant Pastor T. Quebrar was administrator of the estates, the bond was
held liable and inevitably, the plaintiff-appellee's liability subsists since the liability of
the sureties is co-extensive with that of the administrator.
WHEREFORE, THE DECISION OF THE COURT OF FIRST INSTANCE OF MANILA DATED
NOVEMBER 3, 1964 IS HEREBY AFFIRMED. WITH COSTS AGAINST DEFENDANTS-
APPELLANTS.

The payment of the annual premium is to be enforced as part of the consideration,

and not as a condition Woodfin vs. Asheville Mutual Insurance Co., 51 N.C. 558); for
the payment was not made a condition to the attaching or continuing of the contract
(National Bank vs. National Surety Co., 144 A 576). The premium is the consideration
for furnishing the bonds and the obligation to pay the same subsists for as long as
the liability of the surety shall exist (Reparations Commission vs. Universal Deep-Sea
Fishing Corp., L-21996, 83 SCRA 764, June 27, 1978). And in Arranz vs. Manila
Fidelity and Surety Co., Inc. (101 Phil. 272), the "premium is the consideration for
furnishing the bond or the guaranty. While the liability of the surety subsists the
premium is collectible from the principal. Lastly, in Manila Surety and Fidelity Co.,
Inc. vs. Villarama (107 Phil. 891), it was held that "the one-year period mentioned
therein refers not to the duration or lifetime of the bond, but merely to the payment
of premiums, and, consequently, does not affect at all the effectivity or efficacy of
such bond. But such non- payment alone of the premiums for the succeeding years
... does not necessarily extinguish or terminate the effectivity of the counter-bond in
the absence of an express stipulation in the contract making such non-payment of
premiums a cause for the extinguishment or termination of the undertaking. ...There
is no necessity for an extension or renewal of the agreement because by specific
provision thereof, the duration of the counter-bond was made dependent upon the
existence of the original bond."

5. It is true that in construing the liability of sureties, the principle of strictissimi

juris applies (Asiatic Petroleum Co. vs, De Pio, 46 Phil. 167; Standard Oil Co. of N.Y.
vs. Cho Siong, 53 Phil. 205); but with the advent of corporate surety, suretyship
became regarded as insurance where, usually, provisions are interpreted most
favorably to the insured and against the insurer because ordinarily the bond is
prepared by the insurer who then has the opportunity to state plainly the term of its
obligation (Surety Co. vs. Pauly, 170 US 133, 18 S. Ct. 552.,42 L. Ed. 972).

This rule of construction is not applicable in the herein case because there is no
ambiguity in the language of the bond and more so when the bond is read in
connection with the statutory provision referred to.

[76] G.R. No. L-6363 September 15, 1955
In the matter of the testate estate of Dr. Maximo Borromeo. JOHANNA
HOFER BORROMEO, widow-appelle,
vs.
CANUTO O. BORROMEO, executor-appellant.
Borromeo, Yat and Borromeo for appellant.
Tañada, Pelaez and Teehankee for appellee.
BENGZON, Acting C. J.:
In July 1948, Dr. Maximo Borromeo, a resident of Cebu City, died without ascendants
or descendants, but leaving his widow Johanna Hofer Borromeo, and a will wherein
he designated the Borromeo Bros. Estate Inc. as his sole heir, even as he named his
brother Canuto O. Borromeo as the executor. The said corporation is owned entirely
by the deceased and his brothers and sisters.
Proceedings having been instituted, the court of first instance of that province
probated the will in due course, and granted letters testamentary to Canuto O.
Borromeo, who duly qualified as such executor.
Thereafter, on July 11, 1949, the attorneys for the widow submitted an "Urgent
Motion" whereby they prayed for the removal of the executor on the grounds of
negligence in the performance of his duties and unfitness to continue discharging the
powers of the office.
This motion was scheduled to be heard on July 13, 1949 but it was postponed upon
representations by the executor of possible amicable settlement between the
opposing parties. No settlement was carried out nor even attempted. However, taking
advantage of the postponement and after a subpoena had been served on the Bank
of the Philippine Islands seeking information on the cash deposits therein of the
deceased Maximo Borromeo, the executor withdrew, without any authority from the
court, the total amount of P23,930.39 from a joint current account, in said Bank, of
Canuto Borromeo and Maximo Borromeo, and then deposited P22,244.39 of the sum
thus withdrawn in the joint account of said Canuto Borromeo and his brother Exequiel.
In time the petition was heard, and voluminous evidence, oral and documentary, was
submitted. Thereafter on February 21, 1951 the Honorable Edmundo Piccio, Judge,
for several reasons, one of them the above withdrawal of funds, decreed the removal
of the executor. On motion for reconsideration the executor's attorney prayed that
the order be revoked or that at least, the executor be permitted to resign. (Record
on Appeal p. 251.)
On March 29, 1951 obviously to accommodate the executor—there being no practical
difference between removal and resignation—His Honor modified his order in the
sense that said executor was "relieved of (instead of removed from) his commitments
as such executor". Notwithstanding such modification the executor appealed,
contending that the modified order should be revoked.
There is no question that the order removing the executor or administrator is
appealable.1 But we fail to perceive the utility of the instant appeal,2 inasmuch as the
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
executor begged to be permitted to resign and the court all but granted his request
explaining, specifically, that the executor was not removed but only relieved of his
commitment—which is one way of accepting the proffered resignation. The executor
got substantially what he wanted.
Granting that the modified order was not literally what he desired, still the error, if
any, did not affect his substantial rights, and could not justify reversal under the
Rules. (cf. Rule 53 sec. 3.)
In any event, supposing he was removed, there were in our opinion sufficient grounds
therefor. Take the matter of withdrawals above described. Attempting to justify his
attitude, the executor point out that, according to the joint deposit agreement Exhibit
H signed by Canuto and Maximo Borromeo.
We, the undersigned, agree with one another and with the Bank of the Philippine
Islands hereinafter called the Bank, that all moneys heretofore, now, or hereafter
deposited, by us, or any of us, to the credit of this Savings Account or Current
Account, are and shall be received and held by the Bank with the understanding, and
upon the condition that said money deposited, without reference to previous
ownerships, and all interest, dividends and credits thereon shall be the property of all
of us, during our lifetimes and after the death of any one of us shall be the sole
property of and payable to the survivors, or survivor, provided that this last deposition
is not contrary to provisions of laws now in force or may hereafter be in force in the
Philippine Islands.(Emphasis our.)
He claims, in effect, that the money deposited was his at the time he withdrew it. But
would the Bank have allowed him to withdraw the whole amount if he were not the
executor? He got it then as executor. Instead, he deposited it in a joint account with
his brother Exequiel, thereby placing it at the latter's disposal, and hiding it from the
widow.
Furthermore, and this is important, the agreement says "provided that this last
disposition is not contrary to provisions of laws now in force . . . in the P.I." The
question arises: may a husband validly agree that upon his death certain conjugal
money deposited in the bank shall belong to his brother, and thereby deprive his wife
of her share in the conjugal partnership?
According to Art. 1413 of the Civil Code, no alienation or agreement which the
husband may make with respect to conjugal property in fraud of the wife shall
prejudice her or her heirs.3
There is at least some ground to doubt whether the stipulation could deprive the wife
of her share in the conjugal assets. The validity of the agreement could properly be
the subject of debate in court; yet this executor avoided or bypassed judicial
adjudication by getting the money, specially at a time when his actuations were
already being questioned, and his appointment as executor in danger of revocation.
And his conduct is aggravated by the circumstance that he took advantage of a
postponement, asked by him on the false pretense of possible amicable settlement,
in order to vest in himself money on which the corporate heir and the widow might
have a claim.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Another reason for the withdrawal is the fact that in his Report for March 1949 the
executor omitted to include, as income of the estate, the sum of P6,000 which he had
received from Hacienda Plaridel of the decedent. This in itself might be involuntary
error, as claimed by him. But considering that he received other sums of P13,010 and
P10,559.40 as proceeds from the farm of the deceased, but instead of depositing
them in his name as executor, placed them in his joint account with his brother
Exequiel Borromeo, it is not unreasonable to suspect a plan—inconsistent with his
trusteeship—to conceal the money of the deceased to back up his assertion, in
objecting to the widow's allowance, that the estate had no funds.

A third reason is that the executor claimed as his own certain shares of the Interisland
Gas Service, in the name of Maximo Borromeo, valued at P12,000; he asserted that
Maximo was merely his "dummy". If we had any doubts about the rightness of the
trial judges determination, this circumstance should finally tip the judicial balance on
the side of removal or resignation. Conflict between the interest of the executor and
the interest of the deceased is ground for removal or resignation of the former, who
was thereby become insuitable to discharge the trust. (Section 2, Rule 83.)

An executor or administrator should be removed where his personal interests conflict

with his official duties, but a mere hostile feeling towards persons interested in the
estate is not ground for removal unless it prevents the management of the estate
according to the dictates of prudence. (33 C. J. S. P. 1036.) (Citing many cases.)

Reasons for rule.—"An executor is a quasi trustee, who should be indifferent between
the estate and claimant of the property, except to preserve it for due administration,
and when his interest conflicts with such right and duty the country court, in the
exercise of a sound discretion, may remove him." (In re Manser, 60 Or. 240, 246,
118, p. 1024.)

An executor will be removed where it appears that he asserts claims against the
estate of the testator to the extent of two-thirds of the value of the estate, and such
claims are disputed by the beneficiary under the will." (Henry's Est., 54 Pa. Super.
274.)

Claim of gifts from decedents.—Where an executor, in answer to a petition for his

removal on the ground of maladministration in claiming property of the estate, alleged
a gift by decedent to him of the property, he manifested an interest adverse to the
beneficiaries, authorizing his removal; but the country court had no jurisdiction to
determine the question of gift. (In re Manser, 60 Or, 240, 118, p. 1024.)

It becomes unnecessary to examine the other reasons which induced the trial court
to let this executor go. The record discloses sufficient data justifying the decree of
separation or vindicating the judge's exercise of discretion. This, apart from the
principle supported by the weight of authorities that, "An appellate court is disinclined
to interfere with the action taken by the probate court in the matter of the removal
of an executor or administrator unless positive error or gross abuse of discretion is
shown." (33 C. J. S. p. 1048.) (Citing many cases.)1âwphïl.nêt

Wherefore, the appealed order should be, as it is hereby, affirmed with double costs
against appellant. It should be stated in this connection that the obvious reasons, no
petition for extension of the time to file a motion for reconsideration will be favorably
entertained. So ordered.

[77] G.R. No. 187879 July 5, 2010
DALISAY E. OCAMPO, VINCE E. OCAMPO, MELINDA CARLA E. OCAMPO, and
LEONARDO E. OCAMPO, JR., Petitioners,
vs.
RENATO M. OCAMPO and ERLINDA M. OCAMPO, Respondents.
DECISION
NACHURA, J.:
This petition1 for review on certiorari under Rule 45 of the Rules of Court seeks to
reverse and set aside the Decision2 dated December 16, 2008 and the
Resolution3 dated April 30, 2009 of the Court of Appeals (CA) in CA-G.R. SP No.
104683. The Decision annulled and set aside the Order dated March 13, 20084 of the
Regional Trial Court (RTC), Branch 24, Biñan, Laguna, in Sp. Proc. No. B-3089; while
the Resolution denied the motion for reconsideration of the Decision.
The Antecedents
Petitioners Dalisay E. Ocampo (Dalisay), Vince E. Ocampo (Vince), Melinda Carla E.
Ocampo (Melinda), and Leonardo E. Ocampo, Jr. (Leonardo, Jr.) are the surviving
wife and the children of Leonardo Ocampo (Leonardo), who died on January 23, 2004.
Leonardo and his siblings, respondents Renato M. Ocampo (Renato) and Erlinda M.
Ocampo (Erlinda) are the legitimate children and only heirs of the spouses Vicente
and Maxima Ocampo, who died intestate on December 19, 1972 and February 19,
1996, respectively. Vicente and Maxima left several properties, mostly situated in
Biñan, Laguna. Vicente and Maxima left no will and no debts.
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, Biñan, Laguna, docketed as Spec. Proc. No. B-
3089.5The 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.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
In an Order dated March 4, 2005,7 the RTC denied respondents’ opposition to the
settlement proceedings but admitted their counter-petition. The trial court also
clarified that the judicial settlement referred only to the properties of Vicente and
Maxima.
Through a Motion for Appointment of Joint Special Administrators dated October 11,
2005,8 respondents reiterated their prayer for appointment as special joint
administrators of the estate, and to serve as such without posting a bond.
In their Comment dated November 3, 2005,9 petitioners argued that, since April
2002, they had been deprived of their fair share of the income of the estate, and that
the appointment of respondents as special joint administrators would further cause
injustice to them. Thus, they prayed that, in order to avoid further delay, letters of
administration to serve as joint administrators of the subject estate be issued to
respondents and Dalisay.
In another Motion for Appointment of a Special Administrator dated December 5,
2005,10 petitioners nominated the Biñan Rural Bank to serve as special administrator
pending resolution of the motion for the issuance of the letters of administration.
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 ₱200,000.00 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
Dalisay’s appointment as special administrator was already deemed abandoned upon
their nomination of the Biñan Rural Bank to act as special administrator of the estate.
In their Supplement to the Motion for Reconsideration,14 respondents asserted their
priority in right to be appointed as administrators being the next of kin of Vicente and
Maxima, whereas Dalisay was a mere daughter-in-law of the decedents and not even
a legal heir by right of representation from her late husband Leonardo.
Pending the resolution of the Motion for Reconsideration, petitioners filed a Motion to
Submit Inventory and Accounting dated November 20, 2006,15 praying that the RTC
issue an order directing respondents to submit a true inventory of the estate of the
decedent spouses and to render an accounting thereof from the time they took over
the collection of the income of the estate.
Respondents filed their Comment and Manifestation dated January 15,
2007,16 claiming that they could not yet be compelled to submit an inventory and
render an accounting of the income and assets of the estate inasmuch as there was
still a pending motion for reconsideration of the June 15, 2006 Order appointing
Dalisay as co-special administratrix with Renato.
In its Order dated February 16, 2007, the RTC revoked the appointment of Dalisay as
co-special administratrix, substituting her with Erlinda. The RTC took into
consideration the fact that respondents were the nearest of kin of Vicente and

Maxima. Petitioners did not contest this Order and even manifested in open court
their desire for the speedy settlement of the estate.
On April 23, 2007, or two (2) months after respondents’ appointment as joint special
administrators, petitioners filed a Motion for an Inventory and to Render Account of
the Estate,17 reiterating their stance that respondents, as joint special administrators,
should be directed to submit a true inventory of the income and assets of the estate.
Respondents then filed a Motion for Exemption to File Administrators’ Bond18 on May
22, 2007, praying that they be allowed to enter their duties as special administrators
without the need to file an administrators’ bond due to their difficulty in raising the
necessary amount. They alleged that, since petitioners manifested in open court that
they no longer object to the appointment of respondents as special co-administrators,
it would be to the best interest of all the heirs that the estate be spared from incurring
unnecessary expenses in paying for the bond premiums. They also assured the RTC
that they would faithfully exercise their duties as special administrators under pain of
contempt should they violate any undertaking in the performance of the trust of their
office.
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.
Respondents filed their Comment and/or Opposition, stating that they have already
20
filed a comment on petitioners’ Motion for Inventory and to Render Account. They
asserted that the RTC should, in the meantime, hold in abeyance the resolution of
this Motion, pending the resolution of their 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
₱2,700,000.00, which the latter represented to petitioners to have been sold only for
₱1,500,000.00, 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 Comment22 on March 10, 2008, to which, in
turn, petitioners filed their Reply to Opposition/Comment23 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
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
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 ₱200,000.00, 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.
Aggrieved, respondents filed a petition for certiorari25 under Rule 65 of the Rules of
Court before the CA, ascribing grave abuse of discretion on the part of the RTC in (a)
declaring them to have failed to enter the office of special administration despite lapse
of reasonable time, when in truth they had not entered the office because they were
waiting for the resolution of their motion for exemption from bond; (b) appointing
Melinda as regular administratrix, a mere granddaughter of Vicente and Maxima,
instead of them who, being the surviving children of the deceased spouses, were the
next of kin; and (c) declaring them to have been unsuitable for the trust, despite lack
of hearing and evidence against them.
Petitioners filed their Comment to the Petition and Opposition to Application for
temporary restraining order and/or writ of preliminary injunction,26 reiterating their
arguments in their Motion for the revocation of respondents’ appointment as joint
special administrators. Respondents filed their Reply.27
On December 16, 2008, the CA rendered its assailed Decision granting the petition
based on the finding that the RTC gravely abused its discretion in revoking
respondents’ appointment as joint special administrators without first ruling on their
motion for exemption from bond, and for appointing Melinda as regular administratrix
without conducting a formal hearing to determine her competency to assume as such.
According to the CA, the posting of the bond is a prerequisite before respondents
could enter their duties and responsibilities as joint special administrators, particularly
their submission of an inventory of the properties of the estate and an income
statement thereon.
Petitioners filed a Motion for Reconsideration of the Decision.28 The CA, however,
denied it. Hence, this petition, ascribing to the CA errors of law and grave abuse of
discretion for annulling and setting aside the RTC Order dated March 13, 2008.
Our Ruling
The pertinent provisions relative to the special administration of the decedents’ estate
under the Rules of Court provide—
Sec. 1. Appointment of special administrator. – When there is delay in granting letters
testamentary or of administration by any cause including an appeal from the
allowance or disallowance of a will, the court may appoint a special administrator to
take possession and charge of the estate of the deceased until the questions causing
the delay are decided and executors or administrators appointed.29
Sec. 2. Powers and duties of special administrator. – Such special administrator shall
take possession and charge of goods, chattels, rights, credits, and estate of the
deceased and preserve the same for the executor or administrator afterwards
appointed, and for that purpose may commence and maintain suits as administrator.
He may sell only such perishable and other property as the court orders sold. A special

administrator shall not be liable to pay any debts of the deceased unless so ordered
by the court.30
Sec. 1. Bond to be given before issuance of letters; Amount; Conditions. – Before an
executor or administrator enters upon the execution of his trust, and letters
testamentary or of administration issue, he shall give a bond, in such sum as the
court directs, conditioned as follows:
(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;
(b) To administer according to these rules, and, if an executor, according to the will
of the testator, all goods, chattels, rights, credits, and estate which shall at any time
come to his possession or to the possession of any other person for him, and from
the proceeds to pay and discharge all debts, legacies, and charges on the same, or
such dividends thereon as shall be decreed by the court;
(c) To render a true and just account of his administration to the court within one (1)
year, and at any other time when required by the court;
(d) To perform all orders of the court by him to be performed.31
Sec. 4. Bond of special administrator. – A special administrator before entering upon
the duties of his trust shall give a bond, in such sum as the court directs, conditioned
that he will make and return a true inventory of the goods, chattels, rights, credits,
and estate of the deceased which come to his possession or knowledge, and that he
will truly account for such as are received by him when required by the court, and will
deliver the same to the person appointed executor or administrator, or to such other
person as may be authorized to receive them.32
Inasmuch as there was a disagreement as to who should be appointed as
administrator of the estate of Vicente and Maxima, the RTC, acting as a probate court,
deemed it wise to appoint joint special administrators pending the determination of
the person or persons to whom letters of administration may be issued. The RTC was
justified in doing so considering that such disagreement caused undue delay in the
issuance of letters of administration, pursuant to Section 1 of Rule 80 of the Rules of
Court. Initially, the RTC, on June 15, 2006, appointed Renato and Dalisay as joint
special administrators, imposing upon each of them the obligation to post an
administrator’s bond of ₱200,000.00. However, taking into account the arguments of
respondents that Dalisay was incompetent and unfit to assume the office of a special
administratrix and that Dalisay, in effect, waived her appointment when petitioners
nominated Biñan Rural Bank as special administrator, the RTC, on February 16, 2007,
revoked Dalisay’s appointment and substituted her with Erlinda.
A special administrator is an officer of the court who is subject to its supervision and
control, expected to work for the best interest of the entire estate, with a view to its
smooth administration and speedy settlement.33 When appointed, he or she is not
regarded as an agent or representative of the parties suggesting the
appointment.34 The principal object of the appointment of a temporary administrator
is to preserve the estate until it can pass to the hands of a person fully authorized to
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
administer it for the benefit of creditors and heirs, pursuant to Section 2 of Rule 80
of the Rules of Court.35
While the RTC considered that respondents were the nearest of kin to their deceased
parents in their appointment as joint special administrators, this is not a mandatory
requirement for the appointment. It has long been settled that the selection or
removal of special administrators is not governed by the rules regarding the selection
or removal of regular administrators.36 The probate court may appoint or remove
special administrators based on grounds other than those enumerated in the Rules at
its discretion, such that the need to first pass upon and resolve the issues of fitness
or unfitness37 and the application of the order of preference under Section 6 of Rule
78,38 as would be proper in the case of a regular administrator, do not obtain. As long
as the discretion is exercised without grave abuse, and is based on reason, equity,
justice, and legal principles, interference by higher courts is unwarranted.39The
appointment or removal
of special administrators, being discretionary, is thus interlocutory and may be
assailed through a petition for certiorari under Rule 65 of the Rules of Court.40
Granting the certiorari petition, the CA found that the RTC gravely abused its
discretion in revoking respondents’ appointment as joint special administrators, and
for failing to first resolve the pending Motion for Exemption to File Administrators’
Bond, ratiocinating that the posting of the administrators’ bond is a pre-requisite to
respondents’ entering into the duties and responsibilities of their designated office.
This Court disagrees.
It is worthy of mention that, as early as October 11, 2005, in their Motion for
Appointment as Joint Special Administrators, respondents already prayed for their
exemption to post bond should they be assigned as joint special administrators.
However, the RTC effectively denied this prayer when it issued its June 15, 2006
Order, designating Renato and Dalisay as special administrators and enjoining them
to post bond in the amount of ₱200,000.00 each. This denial was, in effect, reiterated
when the RTC rendered its February 16, 2007 Order substituting Dalisay with Erlinda
as special administratrix.
Undeterred by the RTC’s resolve to require them to post their respective
administrators’ bonds, respondents filed anew a Motion for Exemption to File
Administrators’ Bond on May 22, 2007, positing that it would be to the best interest
of the estate of their deceased parents and all the heirs to spare the estate from
incurring the unnecessary expense of paying for their bond premiums since they could
not raise the money themselves. To note, this Motion was filed only after petitioners
filed a Motion for an Inventory and to Render Account of the Estate on April 23, 2007.
Respondents then argued that they could not enter into their duties and
responsibilities as special administrators in light of the pendency of their motion for
exemption. In other words, they could not yet submit an inventory and render an
account of the income of the estate since they had not yet posted their bonds.
Consequently, the RTC revoked respondents’ appointment as special administrators
for failing to post their administrators’ bond and to submit an inventory and
accounting as required of them, tantamount to failing to comply with its lawful orders.

Inarguably, this was, again, a denial of respondents’ plea to assume their office sans
a bond. The RTC rightly did so.
Pursuant to Section 1 of Rule 81, the bond secures the performance of the duties and
obligations of an administrator namely: (1) to administer the estate and pay the
debts; (2) to perform all judicial orders; (3) to account within one (1) year and at any
other time when required by the probate court; and (4) to make an inventory within
three (3) months. More specifically, per Section 4 of the same Rule, the bond is
conditioned on the faithful execution of the administration of the decedent’s estate
requiring the special administrator to (1) make and return a true inventory of the
goods, chattels, rights, credits, and estate of the deceased which come to his
possession or knowledge; (2) truly account for such as received by him when required
by the court; and (3) deliver the same to the person appointed as executor or regular
administrator, or to such other person as may be authorized to receive them.
Verily, the administration bond is for the benefit of the creditors and the heirs, as it
compels the administrator, whether regular or special, to perform the trust reposed
in, and discharge the obligations incumbent upon, him. Its object and purpose is to
safeguard the properties of the decedent, and, therefore, the bond should not be
considered as part of the necessary expenses chargeable against the estate, not being
included among the acts constituting the care, management, and settlement of the
estate. Moreover, the ability to post the bond is in the nature of a qualification for the
office of administration.41
Hence, the RTC revoked respondents’ designation as joint special administrators,
especially considering that respondents never denied that they have been in
possession, charge, and actual administration of the estate of Vicente and Maxima
since 2002 up to the present, despite the assumption of Melinda as regular
administratrix. In fact, respondents also admitted that, allegedly out of good faith and
sincerity to observe transparency, they had submitted a Statement of Cash
Distribution42 for the period covering April 2002 to June 2006,43 where they indicated
that Renato had received ₱4,241,676.00, Erlinda ₱4,164,526.96, and petitioners
₱2,486,656.60, and that the estate had advanced ₱2,700,000.00 for the hospital and
funeral expenses of Leonardo.44 The latter cash advance was questioned by
petitioners in their motion for revocation of special administration on account of the
demand letter45 dated June 20, 2007 of Asian Hospital and Medical Center addressed
to Dalisay, stating that there still remained unpaid hospital bills in the amount of
₱2,087,380.49 since January 2004. Undeniably, respondents had already been
distributing the incomes or fruits generated from the properties of the decedents’
estate, yet they still failed to post their respective administrators’ bonds despite
collection of the advances from their supposed shares. This state of affairs continued
even after a considerable lapse of time from the appointment of Renato as a special
administrator of the estate on June 15, 2006 and from February 16, 2007 when the
RTC substituted Erlinda, for Dalisay, as special administratrix.
What is more, respondents’ insincerity in administering the estate was betrayed by
the Deed of Conditional Sale dated January 12, 200446 discovered by petitioners. This
Deed was executed between respondents, as the only heirs of Maxima, as vendors,
thus excluding the representing heirs of Leonardo, and Spouses Marcus Jose B.
Brillantes and Amelita Catalan-Brillantes, incumbent lessors, as vendees, over a real
property situated in Biñan, Laguna, and covered by Transfer Certificate of Title No. T-
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
332305 of the Registry of Deeds of Laguna, for a total purchase price of
₱2,700,000.00. The Deed stipulated for a payment of ₱1,500,000.00 upon the signing
of the contract, and the balance of ₱1,200,000.00 to be paid within one (1) month
from the receipt of title of the vendees. The contract also stated that the previous
contract of lease between the vendors and the vendees shall no longer be effective;
hence, the vendees were no longer obligated to pay the monthly rentals on the
property. And yet there is a purported Deed of Absolute Sale 47 over the same realty
between respondents, and including Leonardo as represented by Dalisay, as vendors,
and the same spouses, as vendees, for a purchase price of only ₱1,500,000.00.
Notably, this Deed of Absolute Sale already had the signatures of respondents and
vendee-spouses. Petitioners claimed that respondents were coaxing Dalisay into
signing the same, while respondents said that Dalisay already got a share from this
transaction in the amount of ₱500,000.00. It may also be observed that the time of
the execution of this Deed of Absolute Sale, although not notarized as the Deed of
Conditional Sale, might not have been distant from the execution of the latter Deed,
considering the similar Community Tax Certificate Numbers of the parties appearing
in both contracts.
Given these circumstances, this Court finds no grave abuse of discretion on the part
of the RTC when it revoked the appointment of respondents as joint special
administrators, the removal being grounded on reason, equity, justice, and legal
principle. Indeed, even if special administrators had already been appointed, once the
probate court finds the appointees no longer entitled to its confidence, it is justified
in withdrawing the appointment and giving no valid effect thereto.48
On the other hand, the Court finds the RTC’s designation of Melinda as regular
administratrix improper and abusive of its discretion.
In the determination of the person to be appointed as regular administrator, the
following provisions of Rule 78 of the Rules of Court, state –
Sec. 1. Who are incompetent to serve as executors or administrators. – No person is
competent to serve as executor or administrator who:
(a) Is a minor;
(b) Is not a resident of the Philippines; and
(c) Is in the opinion of the court unfit to execute the duties of the trust by reason of
drunkenness, improvidence, or want of understanding or integrity, or by reason of
conviction of an offense involving moral turpitude.
xxxx
Sec. 6. When and to whom letters of administration granted. – If no executor is named
in the will, or the executor or executors are incompetent, refuse the trust, or fail to
give bond, or a person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in
the discretion of the court, or to such person as such surviving husband or wife, or
next of kin, requests to have appointed, if competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the
person selected by them, be incompetent or unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days after the death of the person to apply for
administration or to request that administration be granted to some other person, it
may be granted to one or more of the principal creditors, if competent and willing to
serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to
such other person as the court may select.
Further, on the matter of contest for the issuance of letters of administration, the
following provisions of Rule 79 are pertinent –
Sec. 2. Contents of petition for letters of administration. – A petition for letters of
administration must be filed by an interested person and must show, so far as known
to the petitioner:
(a) The jurisdictional facts;
(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;
(d) The name of the person for whom letters of administration are prayed.
But no defect in the petition shall render void the issuance of letters of administration.
Sec. 3. Court to set time for hearing. Notice thereof. – When a petition for letters of
administration is filed in the court having jurisdiction, such court shall fix a time and
place for hearing the petition, and shall cause notice thereof to be given to the known
heirs and creditors of the decedent, and to any other persons believed to have an
interest in the estate, in the manner provided in Sections 3 and 4 of Rule 76.
Sec. 4. Opposition to petition for administration. – Any interested person may, by
filing a written opposition, contest the petition on the ground of the incompetency of
the person for whom letters are prayed therein, or on the ground of the contestant’s
own right to the administration, and may pray that letters issue to himself, or to any
competent person or persons named in the opposition.
Sec. 5. Hearing and order for letters to issue. – At the hearing of the petition, it must
first be shown that notice has been given as herein-above required, and thereafter
the court shall hear the proofs of the parties in support of their respective allegations,
and if satisfied that the decedent left no will, or that there is no competent and willing
executor, it shall order the issuance of letters of administration to the party best
entitled thereto.1avvphi1
Admittedly, there was no petition for letters of administration with respect to Melinda,
as the prayer for her appointment as co-administrator was embodied in the motion
for the termination of the special administration. Although there was a hearing set for
the motion on November 5, 2007, the same was canceled and reset to February 8,
2008 due to the absence of the parties’ counsels. The February 8, 2008 hearing was
again deferred to March 10, 2008 on account of the ongoing renovation of the Hall of
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Justice. Despite the resetting, petitioners filed a Manifestation/Motion dated February
29, 2008,49 reiterating their prayer for partition or for the appointment of Melinda as
regular administrator and for the revocation of the special administration. It may be
mentioned that, despite the filing by respondents of their Opposition and Comment
to the motion to revoke the special administration, the prayer for the appointment of
Melinda as regular administratrix of the estate was not specifically traversed in the
said pleading. Thus, the capacity, competency, and legality of Melinda’s appointment
as such was not properly objected to by respondents despite being the next of kin to
the decedent spouses, and was not threshed out by the RTC acting as a probate court
in accordance with the above mentioned Rules.
However, having in mind the objective of facilitating the settlement of the estate of
Vicente and Maxima, with a view to putting an end to the squabbles of the heirs, we
take into account the fact that Melinda, pursuant to the RTC Order dated March 13,
2008, already posted the required bond of ₱200,000.00 on March 26, 2008, by virtue
of which, Letters of Administration were issued to her the following day, and that she
filed an Inventory of the Properties of the Estate dated April 15, 2008.50 These acts
clearly manifested her intention to serve willingly as administratrix of the decedents’
estate, but her appointment should be converted into one of special administration,
pending the proceedings for regular administration. Furthermore, since it appears
that the only unpaid obligation is the hospital bill due from Leonardo’s estate, which
is not subject of this case, judicial partition may then proceed with dispatch.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated December 16,
2008 and the Resolution dated April 30, 2009 of the Court of Appeals in CA-G.R. SP
No. 104683 are AFFIRMED with the MODIFICATION that the Order dated March 13,
2008 of the Regional Trial Court, Branch 24, Biñan, Laguna, with respect to the
revocation of the special administration in favor of Renato M. Ocampo and Erlinda M.
Ocampo, is REINSTATED. The appointment of Melinda Carla E. Ocampo as regular
administratrix is SET ASIDE. Melinda is designated instead as special administratrix
of the estate under the same administrator’s bond she had posted. The trial court is
directed to conduct with dispatch the proceedings for the appointment of the regular
administrator and, thereafter, to proceed with judicial partition. No costs.
SO ORDERED.

[78] G.R. No. L-23419 June 27, 1975
INTESTATE ESTATE OF THE DECEASED GELACIO SEBIAL. BENJAMINA
SEBIAL, petitioner-appellee,
vs.
ROBERTA SEBIAL, JULIANO SEBIAL and HEIRS OF BALBINA
SEBIAL, oppositors-appellants.
C. de la Victoria & L. de la Victoria for appellants.
Robustiano D. Dejaresco for appellee.
AQUINO, J.:
Gelacio Sebial died intestate in 1943 in Pinamungajan Cebu. According to the
appellants, Gelacio Sebial, by his first wife Leoncia Manikis, who allegedly died in
1919, begot three children named Roberta, Balbina and Juliano. By his second wife,
Dolores Enad, whom he allegedly married in 1927, he supposedly begot six children
named Benjamina, Valentina, Ciriaco, Gregoria, Esperanza and Luciano.
On June 17, 1960 Benjamina Sebial filed in the Court of First Instance of Cebu a
verified petition for the settlement of Gelacio Sebial's estate. She prayed that she be
appointed administratrix thereof (Spec. Proc. No. 2049-R). Roberta Sebial opposed
the petition on the ground that the estate of Gelacio Sebial had already been
partitioned among his children and that, if an administration proceeding was
necessary, she, Roberta Sebial, a resident of Guimbawian, a remote mountain barrio
of Pinamungajan, where the decedent's estate was supposedly located, should be the
one appointed administratrix and not Benjamina Sebial, a housemaid working at
Talisay, Cebu which is about seventy kilometers away from Pinamungajan. In a
supplemental opposition the children of the first marriage contended that the remedy
of Benjamina Sebial was an action to rescind the partition.
After hearing, the lower court in its order of January 16, 1961 appointed Benjamina
Sebial as administratrix. It found that the decedent left an estate consisting of lands
with an area of twenty-one hectares, valued at more than six thousand pesos, and
that the alleged partition of the decedent's estate was invalid and ineffective.
Letters of administration were issued to Benjamina Sebial on January 19, 1961. On
the same date, a notice to creditors was issued. The oppositors moved for the
reconsideration of the order appointing Benjamina Sebial as administratrix. They
insisted that the decedent's estate had been partitioned on August 29, 1945, as shown
in Exhibits 5, 6, 7 and I, and that the action to rescind the partition had already
prescribed. The lower court denied the motion in its order of February 11, 1961.
The oppositors filed on March 16, 1961 a motion to terminate the administration
proceeding on the grounds that the decedent's estate was valued at less than six
thousand pesos and that it had already been partitioned and, therefore, there was no
necessity for the administration proceeding.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
On April 27, 1961 Benjamina Sebial filed an inventory and appraisal of the decedent's
estate allegedly consisting of seven unregistered parcels of land, covered by Tax
Declarations Nos. 04477, 04478, 04490, 04491, 04492, 04493 and 04500, with a
total value of nine thousand pesos, all located at Barrio Guimbawian, Pinamungajan.
The oppositors registered their opposition to the inventory on the ground that the
seven parcels of land enumerated in the inventory no longer formed part of the
decedent's estate.
On May 6, 1961, the administratrix filed a motion to require Lorenzo Rematado,
Demetrio Camillo and the spouses Roberta Sebial and Lazaro Recuelo to deliver to
her the parcels of land covered by Tax Declarations Nos. 04478, 04490,04491 and
04493.
On June 24, 1961 the probate court issued an order suspending action on the pending
incidents in view of the possibility of an amicable settlement. It ordered the parties
to prepare a complete list of the properties belonging to the decedent, with a
segregation of the properties belonging to each marriage. Orders of the same tenor
were issued by the lower court on July 8 and October 28, 1961.
On November 11, 1961 the oppositors, Roberta Sebial, Juliano Sebial and the heirs
of Balbina Sebial, submitted their own inventory of the conjugal assets of Gelacio
Sebial and Leoncia Manikis, consisting of two parcels of land acquired in 1912 and
1915. They alleged that the conjugal estate of Gelacio Sebial and Dolores Enad
consisted of only one parcel of land, containing an area of seven hectares, allegedly
purchased with money coming from the conjugal assets of Gelacio Sebial and Leoncia
Manikis. They further alleged that the said seven- hectare land was sold by the
children of the second marriage to Eduardo Cortado (Tax Declaration No.
2591).1äwphï1.ñët
The oppositors claimed that the aforementioned two parcels of land acquired during
the first marriage were partitioned in 1945 among (1) Roberta Sebial, (2) Juliano
Sebial, (3) Francisco Sebial as the representative of the estate of Balbina Sebial and
(4) Valentina Sebial as the representative of the six children of the second marriage,
some of whom were minors. They clarified that under that partition the three children
of the first marriage received a three-fourths share while the six children of second
marriage received a one-fourth share (Tax Declaration No. 06500). They also alleged
that Eduardo Cortado, Emilio Sialongo, Lorenzo Rematado and Lazaro Recuelo were
the third persons involved in the transfer of the lands pertaining to the estate of
Gelacio Sebial (Tax Declarations Nos. 04493, 06571 and 04471). To the inventory
submitted by the oppositors, the administratrix filed an opposition dated November
18, 1961.
In an order dated November 11, 1961 the lower court inexplicably required the
administratrix to submit another inventory. In compliance with that order she
submitted an inventory dated November 17, 1961, wherein she reproduced her
inventory dated April 17, 1961 and added two other items, namely, two houses
allegedly valued at P8,000 and the fruits of the properties amounting to P5,000
allegedly received by the children of the first marriage. The oppositor interposed an
opposition to the said inventory.

On November 24, 1961 the oppositors filed a "motion for revision of partition" which
was based on their own inventory dated November 7, 1961.
The lower court in its order of December 11, 1961 approved the second inventory
dated November, 7, 1961 because there was allegedly a "prima facie evidence to
show that" the seven parcels of land and two houses listed therein belonged to the
decedent's estate. In another order also dated December 11, 1961 the lower court
granted the motion of the administratrix dated May 4, 1961 for the delivery to her of
certain parcels of land and it directed that the heirs of Gelacio Sebial, who are in
possession of the parcels of land covered by Tax Declarations Nos. 04493, 04491,
04490 and 04478, should deliver those properties to the administratrix and should
not disturb her in her possession and administration of the same. The lower court
denied the oppositors' motion dated November 20, 1961 for "revision of partition".
On December 29, 1961 Roberta Sebial moved for the reconsideration of the two
orders on the grounds (1) that the court had no jurisdiction to approve an inventory
filed beyond the three-month period fixed in section 1, Rule 84 of the Rules of Court;
(2) that the said inventory is not supported by any documentary evidence because
there is no tax declaration at all in Gelacio Sebial's name; (3) that the two houses
mentioned in the inventory were nonexistent because they were demolished by the
Japanese soldiers in 1943 and the materials thereof were appropriated by the
administratrix and her brothers and sisters; (4) that the valuation of P17,000
indicated in the inventory was fake, fictitious and fantastic since the total value of the
seven parcels of land amounted only to P3,080; (5) that Gelacio Sebial's estate should
be settled summarily because of its small value as provided in section 2, Rule 74 of
the Rules of Court and (6) that an ordinary action is necessary to recover the lands
in the possession of third persons.
The oppositors without awaiting the resolution of their motion for reconsideration filed
a notice of appeal from the two orders both dated December 11, 1961. The notice of
appeal was filed "without prejudice to the motion for reconsideration". Benjamina
Sebial opposed the motion for reconsideration. The lower court in its order of January
18, 1962 denied oppositors' motion for reconsideration. It approved Roberta Sebial's
amended record on appeal. The case was elevated to the Court of Appeals.
The Court of Appeals in its resolution of July 31, 1964 in CA-G.R. No. 31978.-R
certified the case to this Court because in its opinion the appeal involves only the
legal issues of (1) the construction to be given to section 2, Rule 74 and section 1,
Rule 84 (now Rule 83) of the Rules of Court and (2) whether an ordinary civil action
for recovery of property and not an administration proceeding is the proper remedy,
considering oppositors' allegation that the estate of Gelacio Sebial was partitioned in
1945 and that some of his heirs had already sold their respective shares (Per Angeles,
Gatmaitan and Concepcion Jr., JJ.)
The Clerk of Court of the lower court in his letter of January 15, 1963, transmitting
the amended record on appeal, said "there was no presentation of evidence by either
parties concerning the two orders appealed from".
This case involves the conflicting claims of some humble folks from a remote rural
area in Cebu regarding some unregistered farm lands. Because of her poverty Roberta
Sebial wanted to appeal in forma pauperis. Her husband Lazaro Recuelo and her
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
nephew, Candelario Carrillo, in order to justify the filing of a mimeographed brief,
swore that their families subsisted on root crops because they could not afford to buy
corn grit or rice.
Oppositors' contention in their motion for reconsideration (not in their brief) that the
probate court had no jurisdiction to approve the inventory dated November 17, 1961
because the administratrix filed it after three months from the date of her
appointment is not well-taken. The three-month period prescribed in section 1, Rule
83 (formerly Rule 84) of the Rules of Court is not mandatory. After the filing of a
petition for the issuance of letters of administration and the publication of the notice
of hearing, the proper Court of First Instance acquires jurisdiction over a decedent's
estate and retains that jurisdiction until the proceeding is closed. The fact that an
inventory was filed after the three-month period would not deprive the probate court
of jurisdiction to approve it. However, an administrator's unexplained delay in filing
the inventory may be a ground for his removal (Sec. 2, Rule 82, Rules of Court).
The other contention of the oppositors that inasmuch as the value of the decedent's
estate is less than five thousand pesos and he had no debts, the estate could be
settled summarily under section 2, Rule 74 of the Rules of Court or that an
administration proceeding was not necessary (the limit of six thousand pesos was
increased to ten thousand pesos in section 2, Rule 74 effective on January 1, 1964)
rests on a controversial basis. While in the verified petition for the issuance of letters
of administration, it was alleged that the gross value of the decedent's estate was
"not more than five thousand pesos", in the amended inventory the valuation was
P17,000. Indeed, one of the lower court's omissions was its failure to ascertain by
preponderance of evidence the actual value of the estate, if there was still an estate
to be administered. The approval of the amended inventory was not such a
determination.
Anyway, in the present posture of the proceeding, no useful purpose would be served
by dismissing the petition herein and ordering that a new petition for summary
settlement be filed. Inasmuch as a regular administrator had been appointed and a
notice to creditors had been issued and no claims were filed, the probate court could
still proceed summarily and expeditiously to terminate the proceeding. With the
cooperation of the lawyers of the parties, it should strive to effect an amicable
settlement of the case (See arts. 222 and 2029, Civil Code).
If the efforts to arrive at an amicable settlement prove fruitless, then the probate
court should ascertain what assets constituted the estate of Gelacio Sebial, what
happened to those assets and whether the children of the second marriage (the
petitioner was a child of the second marriage and the principal oppositor was a child
of first marriage) could still have a share, howsoever small, in the decedent's estate.
The lower court's order of December 11, 1961, approving the amended inventory of
November 11, 1961, is not a conclusive determination of what assets constituted the
decedent's estate and of the valuations thereof. Such a determination is only
provisional in character and is without prejudice to a judgment in a separate action
on the issue of title or ownership (3 Moran's Comments on the Rules of Court, 1970
Ed., 448-449).1äwphï1.ñët
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

The other order dated December 11, 1961 requires the delivery to the administratrix
of (1) two parcels of land covered by Tax Declarations Nos. 04491 and 04493 in the
possession of the spouses Lazaro Recuelo and Roberta Sebial, an oppositor-appellant;
(2) the parcel of land covered by Tax Declaration No. 04490 in the possession of
Lorenzo Rematado and (3) the parcel of land described under Tax Declaration No.
04478 in the possession of Demetrio Camillo (Canillo), a child of the deceased Balbina
Sebial, one of the three children of the first marriage.
We hold that the said order is erroneous and should be set aside because the probate
court failed to receive evidence as to the ownership of the said parcels of land. The
general rule is that questions of title to property cannot be passed upon in a testate
or intestate proceeding. However, when the parties are all heirs of the decedent, it is
optional upon them to submit to the probate court the question of title to property
and, when so submitted, the probate court may definitely pass judgment thereon (3
Moran's Comment's on the Rules of Court, 1970 Ed., pp. 448, 473; Alvarez vs.
Espiritu, L-18833, August 14, 1965, 14 SCRA 892).
requisite partition and distribution. If the estate has no more assets and if a partition
had really been made or the action to recover the lands transferred to third person
had prescribed, it should dismiss the intestate proceeding.
WHEREFORE, (a) the probate court's order of December 11, 1961, granting the
administratrix's motion of May 4, 1961 for the delivery to her of certain properties is
set aside; (b) its other order of December 11, 1961 approving the amended inventory
should not be considered as a final adjudication on the ownership of the properties
listed in the inventory and (c) this case is remanded to the lower court for further
proceedings in accordance with the guidelines laid down in this decision. No costs.
SO ORDERED.

Lorenzo Rematado and Lazaro Recuelo are not heirs of the decedent. They are third
persons. The rule is that matters affecting property under administration may be
taken cognizance of by the probate court in the course of the intestate proceedings
provided that the interests of third persons are not prejudiced (Cunanan vs. Amparo,
80 Phil. 227; Ibid, 3 Moran 473).

However, third persons to whom the decedent's assets had been fraudulently
conveyed may be cited to appear in court and be examined under oath as to how they
came into the possession of the decedent's assets (Sec. 6, Rule 87, Rules of Court)
but a separate action would be necessary to recover the said assets (Chanco vs.
Madrilejos, 12 Phil. 543; Guanco vs. Philippine National Bank, 54 Phil. 244).

The probate court should receive evidence on the discordant contentions of the parties
as to the assets of decedent's estate, the valuations thereof and the rights of the
transferees of some of the assets. The issue of prescription should also be considered
(see p. 84, Record on Appeal). Generally prescription does not run in favor of a coheir
as long as he expressly or impliedly recognizes the coownership (Art. 494, Civil
Code).1äwphï1.ñët But from the moment that a coheir claims absolute and exclusive
ownership of the hereditary properties and denies the others any share therein, the
question involved is no longer one of partition but that of ownership (Bargayo vs.
Camumot, 40 Phil. 857).

At the hearing of the petition for letters of administration some evidence was already
introduced on the assets constituting the estate of Gelacio Sebial. The petitioner
testified and presented Exhibits A to J and X to Y-3. The oppositor also testified and
presented Exhibits 2 to 10-A. The stenographic notes for the said hearing should be
transcribed. In addition to that evidence. The probate court should require the parties
to present further proofs on the ownership of the seven parcels of land and the
materials of the two houses enumerated in the amended inventory of November 17,
1961, on the alleged partition effected in 1945 and on the allegations in oppositors'
inventory dated November 7, 1961.

After receiving evidence, the probate court should decide once and for all whether
there are still any assets of the estate that can be partitioned and, if so, to effect the

[79] G.R. No. L-45430 April 15, 1939
In the matter of the estate of the deceased Paulina Vasquez Vda. de
Garcia.
TERESA GARCIA, plaintiff-appellant,
vs.
LUISA GARCIA, MARIETA GARCIA, and PURIFICACION GARCIA, and
BRAULIO DE VERA, guardian of the minors Antonio, Lourdes and Ramon,
surnamed De Vera, defendants-appellees.
Anastasio R. Teodoro and Andres S. Nicolas for appellant.
Pablo Lorenzo, Delfin Joven and Eulalio Chaves for appellee.
VILLA-REAL, J.:
After Luisa Garcia was appointed special administratrix of the properties left by the
deceased Paulina Vasquez Vda. de Garcia, she filed with the competent court an
inventory thereof on May 13, 1936.
On May 23, 1936, the heir Teresa Garcia objected to said inventory, taking exception
to various items therein.
On June 20, 1936, the court issued the following order:
Without prejudice to the filing of an ordinary action by the heir Teresa Garcia de
Bartolome, the petition to include in the inventory certain properties of the estate,
filed by Teresa Garcia and others with the conformity of counsel for the administratrix,
is denied.
On July 28, 1936, Teresa Garcia filed a motion asking that she be appointed special
administratrix of the intestate for the sole purpose of bringing any action which she
may believe necessary to recover for the benefit of the intestate the properties and
credits set out in her motion, as well as other properties which might be discovered
from time to time belonging to the said intestate.
After hearing said motion and the administratrix' opposition thereto, the Court of First
Instance of Manila denied the motion by its order of August 19, 1936.
On motion for reconsideration filed by Teresa Garcia, which was opposed by the
administratrix, the court issued the following order of September 28, 1936:
This is a motion for reconsideration of the order of this Court of the 19th day of August
last, denying the petition of Teresa Garcia, one of the daughter of the deceased,
wherein she asked to be appointed special administratrix in order that she might bring
an action for the recovery of certain properties which she claims belong to the estate
and are in the possession of the regular administratrix and her other sisters.
Before this petition was filed a hearing had been held to determine the ownership of
these properties as a direct result of Teresa Garcia's objection to the inventory filed
by the administratrix in which, it was alleged, those properties should be included.
Now the same party upon whose complaint that hearing was conducted repudiates
the steps taken by the court on the ground on the grounds of alleged lack of
jurisdiction.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
The interrupted proceeding which the motion under consideration would have set
aside was by no means irregular. It is in accordance with the general practice
constantly followed in this jurisdiction. The jurisdiction to try controversies between
heirs of a deceased person regarding the ownership of properties alleged to belong
to his estate is vested in probate courts. In the last analysis, the purpose of intestate
proceeding is the distribution of the decedent's estate among the persons entitled to
succeed him. It is in the nature of an action of partition, and in a suit of partition it is
proper that each party be required to bring into the mass whatever community
property he or she may have in his or her possession. To this end and as a necessary
corollary, the interested parties may introduce proofs relative to the ownership of the
properties in dispute. All the heirs who take part in the distribution of the decedent's
estate are before the court and subject to the jurisdiction thereof in all matters and
incidents necessary to the complete settlement of such estate, so long as no interests
of third parties are affected.
The cases relied upon by the movant have no bearing on the present case. In the
cases cited, not only were the persons alleged to have in their possession properties
of the estate strangers to the intestate, but their appearance had been ordered under
different provisions and for a different purpose. The court was not aware of the fact
that a proceeding under section 709 of the Code of Civil Procedure is no t to try title
to property.
However that may be, the jurisdiction involved here is one over the person, not over
the subject-matter; and it is a well-established rule that such jurisdiction may be
acquired by consent. A general appearance, let alone going into trial without
objection, has been always held to constitute a waiver of the party's right to object
to the authority of the court over his person. The administratrix and other heirs have
not objected.
The motion for reconsideration is denied. The movant may however ask, if she cares
to do so, that this proceeding be reset for the continuation of the hearing of her
inventory of the administratrix and the determination of whether the properties in
question belong to the estate and should be included in the said inventory for
disposition according to law.
So ordered.
From the foregoing order Teresa Garcia took this appeal, assigning our alleged errors
committed by the lower Court in its order, which errors boil down to the proposition
of whether or not a court has jurisdiction to hear and pass upon the exceptions which
an heir takes to an inventory of the properties left by a deceased referring to the
inclusion or exclusion of certain properties and credits.
It is the duty of every administrator, whether special or regular, imposed by section
668 of the Code of Civil Procedure, to return to the court within three months after
his appointment a true inventory of the real estate and all the goods, chattels, right,
and credits of the deceased which come into his possession or knowledge, unless he
is residuary legatee and has given the prescribed bond. The court which acquires
jurisdiction over the properties of a deceased person through the filing of the
corresponding proceedings, has supervision and control over the said properties, and
under the said power, it is its inherent duty to see that the inventory submitted by
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

the administrator appointed by it contains all the properties, rights and credits which
the law requires the administrator to set out in his inventory. In compliance with this
duty the court has also inherent power to determine what properties, rights and
credits of the deceased should be included in or excluded from the inventory. Should
an heir or person interested in the properties of a deceased persons duly call the
court's attention to the fact that certain properties, rights or credits have been left
out in the inventory, it is likewise the court's duty to hear the observations, with
power to determine if such observations should be attended to or not and if the
properties referred to therein belong prima facie to the intestate, but no such
determination is final and ultimate in nature as to the ownership of the said properties
(23 C.J., p. 1163, par. 381).

The lower court, therefore, had jurisdiction to hear the opposition of the heir Teresa
Garcia to the inventory filed by the special administratrix Luisa Garcia, as well as the
observations made by the former as to certain properties and credits, and to
determine for purposes of the inventory alone if they should be included therein or
excluded therefrom. As Teresa Garcia withdrew her opposition after evidence was
adduced tending to show whether or not certain properties belonged to the intestate
and, hence, whether they should be included in the inventory, alleging that the lower
court had no jurisdiction to do so, she cannot be heard to complain that the court
suspended the trial of her opposition.

In the view of the foregoing, we are of the opinion and so hold, that a court takes
cognizance of testate on intestate proceedings has power and jurisdiction to
determine whether or not the properties included therein or excluded therefrom
belong prima facie to the deceased, although such a determination is not final or
ultimate in nature, and without prejudice to the right of the interested parties, in a
proper action, to raise the question bearing on the ownership or existence of the right
or credit.

Wherefore, the appealed order is affirmed, reserving to Teresa Garcia the right to ask
for the reopening of the hearing of her opposition to the inventory, as well as to ask
for the appointment of a special administratrix in accordance with law, with the costs
to the appellant. So ordered.

[80] G.R. No. L-51291 May 29, 1984
FRANCISCO CUIZON, ROSITA CUIZON, PURIFICATION C. GUIDO married to
TEODORO GUIDO, and JUAN ARCHE, petitioners,
vs.
HON. JOSE R. RAMOLETE, Presiding Judge of the Court of First Instance of
Cebu, Branch III, DOMINGO L. ANTIGUA and SEGUNDO ZAMBO, respondents.
Eliseo C. Alinsug for petitioners.
Loreto M. Pono for respondents Domingo Antigua and Segundo Zambo.
GUTIERREZ, JR., J.:
The sole issue in this petition for certiorari is whether or not a probate court has
jurisdiction over parcels of land already covered by a Transfer Certificate of Title
issued in favor of owners who are not parties to the intestate proceedings if the said
parcels have been included in the inventory of properties of the estate prepared by
the administrator.
For a clearer understanding of the present case, the background facts may be
appreciated. As far back as 1961, Marciano Cuizon applied for the registration of
several parcels of land located at Opao, Mandaue City then covered by certificates of
Tax Declaration in Land Registration Case No. N-179. In 1970, he distributed his
property between his two children, Rufina and Irene. Part of the property given to
Irene consisted largely of salt beds which eventually became the subject of this
controversy.
On December 29, 1971, Irene Cuizon executed a Deed of Sale with Reservation of
Usufruct involving the said salt beds in favor of the petitioners Francisco, Rosita and
Purificacion, all surnamed Cuizon. At that time, Francisco and Rosita were minors and
assisted by their mother, Rufina, only sister of Irene. However, the sale was not
registered because the petitioners felt it was unnecessary due to the lifetime
usufructuary rights of Irene.
Although the decision in L.R. Case No. N-179 was rendered way back in 1962, the
decree of registration No. N-161246 and the corresponding Original Certificate of Title
No. 0171 was issued only in 1976 in the name of Marciano Cuizon. In that same year,
Transfer Certificate of Title No. 10477 covering the property in question was issued
by the Register of Deeds to Irene Cuizon. The latter died in 1978. In the extrajudicial
settlement of the estate, her alleged half sister and sole heir Rufina adjudicated to
herself all the property of the decedent including the property in question. After the
notice of the extrajudicial settlement was duly published in a newspaper of general
circulation, Rufina thereafter, executed a deed of Confirmation of Sale wherein she
confirmed and ratified the deed of sale of December 29, 1971 executed by the late
Irene and renounced and waived whatever rights, interest, and participation she may
have in the property in question in favor of the petitioners. The deed was duly
registered with the Registry of Deeds and annotated at the back of TCT No. 10477.
Subsequently, TCT No. 12665 was issued in favor of the petitioners.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
On September 28, 1978, a petition for letters of administrator was filed before the
Court of First Instance of Cebu (Sp. Proc. No. 3864-R) by respondent Domingo
Antigua, allegedly selected by the heirs of Irene numbering seventeen (17) in all to
act as administrator of the estate of the decedent. The petition was granted.
Respondent Antigua as administrator filed an inventory of the estate of Irene. He
included in the inventory the property in question which was being administered by
Juan Arche, one of the petitioners. On June 27, 1979, respondent Antigua filed a
motion asking the court for authority to sell the salt from the property and praying
that petitioner Arche be ordered to deliver the salt to the administrator. The motion
was granted and respondent court issued the following order:
The administrator, thru this motion, informs the Court that the estate owns some
beds and fish pond located in Opao, Mandaue City that these salt beds are producing
salt which are now in the warehouse in Mandaue City, under the custody of Juan
Arche that the value of the salt in the warehouse is estimated to be worth P5,000.00
are beginning to melt and, unless they are sold as soon as possible, they may
depreciate in value. It is likewise prayed in this motion that Juan Arche be ordered to
deliver the salt in question to the administrator such other products of the land now
in his (Juan Arche) possession.
xxx xxx xxx
Let this motion be, as it is hereby GRANTED. The administrator is hereby authorized
to sell the salt now in the custody of Juan Arche and the latter (Juan Arche) is hereby
ordered to deliver the salt in question to the administrator in order to effect the sale
thereof and he is likewise directed to deliver such other products of the land to the
administrator.
Subsequently, on three different occasions, respondent Segundo Zambo with the aid
of several men, sought to enforce the order of the respondent court, compelling the
petitioners to come to us on certiorari. On September 14, 1979, we issued a
restraining order enjoining the respondents from enforcing the above order of the
respondent court and from further interfering with the petitioners in their peaceful
possession and cultivation of the property in question.
The thrust of the petitioners' argument is that the respondent court, as a court
handling only the intestate proceedings, had neither the authority to adjudicate
controverted rights nor to divest them of their possession and ownership of the
property in question and hand over the same to the administrator. Petitioners further
contend that the proper remedy of the respondent administrator is to file a separate
civil action to recover the same.
On the other hand, the respondent administrator banked on the failure of the
petitioners to first apply for relief in the court of origin before filing the present
petition. According to him this was a fatal defect. In addition, the administrator stated
that the deed of sale of December 29, 1971 lost its efficacy upon the rendition of
judgment and issuance of the decree in favor of Irene Cuizon.
It is a well-settled rule that a probate court or one in charge of proceedings whether
testate or intestate cannot adjudicate or determine title to properties claimed to be a
part of the estate and which are equally (claimed to belong to outside parties. All that

the said court could do as regards said properties is to determine whether they should
or should not be included in the inventory or list of properties to be administered by
the administrator. If there is no dispute, well and good; but if there is, then the
parties, the administrator, and the opposing parties have to resort to an ordinary
action for a final determination of the conflicting claims of title because the probate
court cannot do so (Mallari v. Mallari, 92 Phil. 694; Baquial v. Amihan, 92 Phil. 501).
Similarly, in Valero Vda. de Rodriguez vs. CA., (91 SCRA 540) we held that for the
purpose of determining whether a certain property should or should not be included
in the inventory the probate court may pass upon the title thereto but such
determination is not conclusive and is subject to the final decision in a separate a
petition regarding ownership which may be instituted by the parties (3 Moran's
Comments on the Rules of Court, 1970 Edition, pages 448-9 and 473: Lachenal v.
Salas, L-42257, June 14, 1976, 71 SCRA 262, 266).
In the instant case, the property involved is not only claimed by outside parties but
it, was sold seven years before the death of the decedent and is duly titled in the
name of the vendees who are not party to the proceedings. In Bolisay vs. Alcid, (85
SCRA 213), this Court was confronted with a similar situation. The petitioners therein
sought to annul the order of the respondent court in a special proceeding which in
effect ruled that notwithstanding that the subject property was duly titled in the name
of petitioners, the administratrix of the intestate estate involved in said proceeding
had the right to collect the rentals of said property over the objection of the titled
owners just because it was included in the inventory of said estate and there was an
ordinary action in the regular court over the ownership thereof and the estate was
one of the parties therein. This Court viewed the petition as one seeking for a prima
facie determination and not a final resolution of the claim of ownership.
We held that:
... Considering that as aforestated the said property is titled under the Torrens System
in the names of the petitioners, it does appear strange, in the light of the probate
court's own ruling that it has no jurisdiction to pass on the issue of ownership, that
the same court deemed the same as part of the estate under administration just
because the administratrix, alleges it is still owned by the estate and has in fact listed
it in the inventory submitted by her to the court.
It does not matter that respondent - administratrix has evidence purporting to
support her claim of ownership, for, on the other hand, petitioners have a Torrens
title in their favor, which under the law is endowed with incontestability until after it
has been set aside in the manner indicated in the law itself, which, of course, does
not include, bringing up the matter as a mere incident in special proceedings for the
settlement of the estate of deceased persons. In other words, in Our considered view,
the mere inclusion in the inventory submitted by the administrator of the estate of a
deceased person of a given property does not of itself deprive the probate court of
authority to inquire into the property of such inclusion in case an heir or a third party
claims adverse title thereto. To hold otherwise would render inutile the power of that
court to make a prima facie determination of the issue of ownership recognized in the
above quoted precedents. The correct rule is that the probate court should resolve
the issue before it provisionally, as basis for its inclusion in or exclusion from the
inventory. It does not even matter that the issue is raised after approval of the
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
inventory because "apparently, it is not necessary that the inventory and appraisal
be approved by the Court." (Francisco on the Rules of Court Vol. V-B, p. 99, citing Siy
Chong Keng vs. Collector of Internal Revenue, 60 Phil. 494)
In regard to such incident of inclusion or exclusion, We hold that if a property covered
by Torrens Title is involved, the presumptive conclusiveness of such title should be
given due weight, and in the absence of strong compelling evidence to the contrary,
the holder thereof should be considered as the owner of the property in controversy
until his title is nullified or modified in an appropriate ordinary action, particularly,
when as in the case at bar, possession of the property itself is in the persons named
in the title.
Having been apprised of the fact that the property in question was in the possession
of third parties and more important, covered by a transfer certificate of title issued in
the name of such third parties, the respondent court should have denied the motion
of the respondent administrator and excluded the property in question from the
inventory of the property of the estate. It had no authority to deprive such third
persons of their possession and ownership of the property. Respondent court was
clearly without jurisdiction to issue the order of June 27, 1979. Thus, it was
unnecessary for the petitioners to first apply for relief with the intestate court.
Even assuming the truth of the private respondents' allegations that the sale of
December 29, 1971 was effected under suspicious circumstances and tainted with
fraud and that the right of Rufina as alleged half-sister and sole heir of Irene remains
open to question, these issues may only be threshed out in a separate civil action
filed by the respondent administrator against the petitioners and not in the intestate
proceedings.
WHEREFORE, the petition for certiorari is GRANTED and the respondent court's order
dated June 27, 1979 is hereby set aside and declared void as issued in excess of its
jurisdiction. Our restraining order enjoining the enforcement of the June 27, 1979
order and the respondents from further interfering, through the intestate
proceedings, in the peaceful possession and cultivation of the land in question by the
petitioners is hereby made PERMANENT.
SO ORDERED.

[81] G.R. No. L-23035 October 13, 1925
In re will of Ignacio Abuton y Poncol, deceased.
TEODORA GUINGUING, petitioner-appellee,
vs.
AGAPITO ABUTON and CALIXTO ABUTON, opponents-appellants.
M. Abejuela for appellants.
No appearance for appellee.
STREET, J.:
In the course of the administration of the estate of Ignacio Abuton, deceased, resident
of Oroquieta, Province of Misamis, it appeared that the deceased died testate on
March 8, 1916, leaving two sets of children by two different wives, the first of whom
was Dionisia Olarte, who died about twenty years ago, and by whom the deceased
had twelve, children, three of whom died without issue. The second wife was Teodora
Guinguing, to whom the testator was married on July 14, 1906, and by whom he had
four children, all still living. A will of the testator, executed on November 25, 1914,
was probated in court and allowed on October 9, 1917 (Exhibit A); and one Gabriel
Binaoro was appointed administrator. In due course of proceeding Binaoro submitted
to the court an inventory of the properties belonging to the deceased at the time of
his death. In this inventory he included only the lands which the testator had devised
to the children of the second marriage, omitting other lands possessed by him at the
time of his death and which were claimed by the children of the first marriage as
having been derived from their mother. Accordingly, on March 14, 1922, Teodoro
Guinguing, in representation of herself and her four minor children, presented a
motion in court, asking that the administrator be required to amend his inventory and
to include therein all property pertaining to the conjugal partnership of Ignacio Abuton
and Dionisia Olarte, including property actually in the hands of his children by her
which (the motion alleged) had been delivered to said children as an advancement.
The purpose of the motion was to force the first set of children to bring into collation
the properties that had been received by them, in conformity with article 1035 of the
Civil Code; and the motion was based partly on the supposition that Ignacio Abuton
had never in fact effected a liquidation of the conjugal property pertaining to himself
and Dionisia Olarte. This motion was formally opposed by two of the children of the
first marriage, namely, Agapito and Calixto Abuton y Olarte.
Upon hearing the proof the trial judge found that no property had been acquired by
the testator during his second marriage and that the administration was concerned
only with property that had been acquired before the death of the first wife. The trial
judge further found that after the death of the first wife the testator had liquidated
the ganacial estate pertaining to them and had divided among the first set of children
all of the property that pertained to the first wife in the division, with the exception
of the home-place in the poblacion, in which the testator had continued to reside till
death. The share pertaining to the testator in said division was, so the court found,
retained in his own hands; and this property constituted the proper subject matter of
the present administration proceedings. Accordingly an order was entered to the
effect that the administrator should include in the inventory of the estate of Agapito
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Abuton all of the property of which the testator was possessed at the time of his
death. From this order the two opponents of the motion appealed.
We entertain serious doubts as to whether the order in question here was really such
a final order as to be appealable under section 783 of the Code of Civil Procedure,
since the making of the inventory is necessarily of a preliminary and provisional
nature, and the improper inclusion of property therein or the improper omission of
property therefrom is not absolutely decisive of the rights of persons in interest. But,
passing this point without decision, we proceed to consider whether there is any merit
in the errors assigned to the order which is the subject of the appeal. 1awph!l.net
The contention made in the first assignment of error, to the effect that an order of
the character of that appealed from cannot be made by a court without formal notice
being given to all persons in interest, in the same manner as if a new action had been
begun, is clearly untenable, since all the heirs are already virtually represented in the
administration and are bound by all proper orders made therein, so far and so far
only as such orders have legal effect. This is not inconsistent with the proposition that
contested claims of ownership between the administrator and third persons should be
tried in separate proceedings, which is entirely true. The question here is merely
between some of the heirs and the administrator, as representative of all persons in
interest. Besides, it should be pointed out, the inclusion of a property in the inventory
does not deprive the occupant of possession; and if it is finally determined that the
property has been properly included in the estate, the occupant heir is liable for the
fruits and interest only from the date when the succession was opened (art. 1049,
Civ. Code). The provisions of the Civil Code with reference to collation clearly
contemplate that disputes between heirs with respect to the obligation to collate may
be determined in the course of the administration proceedings.
The second and third assignments are directed to the supposed errors of the court in
having based its findings as to the property belonging to the estate of Agapito Abuton
in part upon the recitals of his legalized will (Exhibit A) and in part upon the recitals
of a previous will (Exhibit 1), which had been superseded by the last. This older will
appears to have been produced by the representatives of the first set of children in
the proceedings for the probate of the will which was admitted, and was attached to
that expediente. It is said in appellants' brief that this document was not introduced
in evidence at the hearing of the present controversy.
It was not error, in our opinion, for the trial court to look to the recitals of the legalized
will for the purpose of determining prima facie whether a certain piece of property
should or should not be included in the inventory, without prejudice of course to any
person who may have an adverse title to dispute the point of ownership. The use
made of the superseded will (Exhibit 1) in the appealed order is of more questionable
propriety, but we are of the opinion that the facts stated by the court can be
sufficiently made out from the other evidence submitted at the hearing.
As we gather from the record, the crux of the controversy consists in the fact that
among the properties remaining in possession of Ignacio Abuton at the time of his
death was a piece of land covered by a composition title No. 11658, issued in 1894
in the name of Dionisia Olarte. At the same time that this title was issued, Agapito
Abuton procured two other titles, Nos. 11651 and 11654, covering adjacent properties
to be issued in his own name. From the circumstance that title No. 11658 was issued
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

in the name of Dionisia Olarte the opponents appear to believe that this land was her
particular property and should now vest exclusively in her heirs. This conclusion is
erroneous. There is nothing to show that the land covered by title No. 11658 was not
acquired by the spouses during their marriage, and the circumstance that the title
was taken in the name of the wife does not defeat its presumed character as ganacial
property. Therefore, in liquidating the ganacial property of the first marriage it was
within the power of the surviving husband to assign other property to the first set of
children as their participation in the estate of their mother and to retain in his own
hands the property for which a composition title had been issued in the name of the
wife.

Upon the whole we are unable to discover any reversible error in the appealed order,
and the same is accordingly affirmed, with costs. So ordered.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

[82] G.R. No. L-31860 October 16, 1930 III. The lower court erred in denying the request for a reasonable continuance in order
to obtain depositions.
In the matter of the Estate of Charles C. Rear, deceased. J.J.
WILSON, administrator-appellee,
vs. Separate Opinions
M. T. REAR, ET AL., heirs-appellants.
JOHNS, J.:
J. A. Wolfson and Lionel D. Hargis for appellants.
Juan S. Alano and Pastor Kimpo for appellee. It appears from the first inventory of December 27, 1925, that the assets of the
estate, including real property, coconut trees, and houses were P15,300, and that the
STATEMENT personal property was valued at P5,250, which included 80 head of cattle, carabao
and horses of the value of P4,000. Although he was appointed special administrator
July 14, 1925, Charles C. Rear was murdered by some Moros on his plantation situate on November 17, 1925, he never made any report or filed any account of any kind
in the interior of the Province of Cotabato at an isolated place, without communication until 1927. Neither did he apply to or obtain an order from the court of any nature
except by river, about 17 kilometers from the nearest settlement of Pikit, and about during that period, and it appears that the attention of the court was for the first time
70 kilometers from the town of Cotabato. The whole plantation consisted of public called to the administration of the estate when the commissioners on claims asked to
lands. J.J. Wilson qualified as special administrator of the estate on November have their fees paid; otherwise, the court never made any order of any kind from
17,1925. Later, the property of the estate was appraised at P20,800, of which the December 27, 1925, to April, 1927. It also appears that at the time of his death, the
commissioners filed an inventory and report, which was also signed by Wilson. only debts against the deceased were one in favor of Sewal Fleming which then
January 4,1927, the commisioners made and filed a report of claims against the amounted to P800, and one in favor of J. S. Alano for P500. It appears from the
estate, but by reasons of the fact that it was claimed and alleged that the amended final report that in the course of administration, the administrator received
administrator did not have any funds to pay, on March 30, 1927, the court ordered the following amounts from the specified sources:
the administrator to sell a portion of the property. April 26, 1927, and with the consent
of the heirs, a petition was made for authority to sell, under sealed proposal, all the 1925
property of the estate, with a view of closing the administration. October 10,1927,
the court granted this petition, and after due notice, the public sale took place, and
the property was sold to Wm. Mannion for P7,600. April 26,1927, Wilson submitted a Nov. 30, Hogs sold (see plant. book) P108.50
report covering his administration to that date, which was approved and later set
aside on motion of the heirs of the deceased. March 23, 1928, Wilson filed his final Sales store (see plant. book) 38.02
account which later was amended on June 20,1928, to which the heirs made
numerous and specific objections, and after a hearing, the court approved the account
as filed. From which the heirs of the deceased appealed and assign the following Dec. 31, Sundry products sold (see plant. book) 217.50
errors:
Old debt collected 6.00
I. The lower court erred in approving the final amended account of the administrator
for the following reasons:
1926
(a) That the alleged disbursements made by the special administrator and the
administrator were far in excess of the amount required to preserve the estate;
Jan. 31, Sundry farm products 76.15
(b) That no authority being asked for or granted by the court, all loans or advances,
made to the estate, were made contrary to law and are not legal charges against the
Sales store 104.58
estate (Trs., p. 37).

(c) The court erred in admitting, over objection, Exhibits D, E and F. Feb. 28, Sundry products 130.00

(d) That Wilson, as special administrator and as administrator, was neglectful and
imprudent and he committed waste. He is, therefore, liable. Sales store 87.95

II. The lower court erred in refusing to allow the cross-examination and direct
March 31, Sundry products 3.00
examination of witnesses.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Sales store 53.12 Two steers sold 160.00

April 30, Products 117.00 Aug. Hogs sold 79.50

Store .25 Few nuts sold 8.00

May None (Store discontinued) Sept. Two steers sold 180.00

June 30, Products 2.20 Nuts sold 12.00

July Do 29.75 Oct. $50 U. S. Liberty Bond & Interest 127.52

Aug. Do 12.80

The total of which is 1,919.25

Sept. Do 18.40

Oct. None.

From which it appears that on November 30,1925, the administrator sold hogs for
Nov. Do. P108.50; in July, 1927, he sold one carabao for P100 and two steers for P160; in
August he sold hogs for P79.50; and in September he sold two steers for P180.
Dec. Do.
Strange as it may seem, the above is the only account which was ever rendered of
the livestock which was appraised at P4,000, and yet no specific objection was ever
1927 made or filed to the final account of the administrator for his failure to render any
other or different account of the livestock. Even so, it appears that the sale to Mannion
was made by and with the consent of the heirs, and that the deed was intended to
Jan. Products 16.00
convey all of the property to him described in the inventory, except that of a
perishable nature and some personal effects. It further appears from the amended
Feb. Do 166.60 account that the total amount of cash received by the administrator, including the
sale to Mannion was P9,519.25, and that the total amount of cash disbursed by the
administrator was P11,328.94, leaving a deficit or balance due and owing from the
Mar. Products 15.00
estate of P1,809.69. It also appears that the amount of Fleming's note at the time it
was paid was P1,003.40, and that the taxes for the years 1925,1926, and 1927
Cash received from Constabulary 20.91 amounted to P152.14, and the claim of J. S. Alano amounted to P500. That is to say,
at the time they were paid, the actual claims against the deceased was P 1,655.54.
Apr. Products 13.50 Here, it will be noted that the value of the personal property of the estate at the time
of Wilson's appointment, appearing over his own signature was P5,800 which included
80 head of cattle, carabao and horses of the value of P4,000. That is to say, at the
May Do 5.00 time Wilson was appointed, his estate had personal property of the value of P5,800,
and when the amended final account was filed the actual debts of the deceased,
June Do 10.00 including interest and accumulated taxes, was P1,655.54.

In this situation, it was the legal duty of the administrator to at once apply to the
July Carabao sold 100.00 court for an order to sell the personal property to pay the debts of the deceased and
the expenses of administration. It also appears from the amended final account that

the expenses charged by the administrator was P750.94; that the court expenses,
including attorney's fees was P693.20; and that the claims of the commisioners was
P322.90, the total of which is P1,767.04. That is to say, that the total of all claims
against the deceased, including interest and taxes was P1,655.54, and that the whole
amount of the court costs and expenses of administration was P1,767.04, the total of
which is P3,422.58. That is to say, at the time of his appointment, it appears over the
administrator's own signature that the value of the personal property of the deceased
which came into his possession was P5,800, and the whole amount of claims against
Rear at the time of his death and the court costs and expenses of administration was
P3,422.58. That is to say, if the personal property of the estate had been promptly
sold, when it should have been, and sold for its appraised value, all the debts of the
deceased and the court costs and expenses of administration would have been paid,
and the estate would have a balance left of P2,377.42. Instead of doing that, and
without any order, process or authority of the court the administrator, as appears
from his amended final account, continued the operation of the plantation and the
employment of Fleming as manager at a salary of P200 per month, and a large
number of men, so that at the time of the filing of the amended final account, the
total expense for labor was P2,863.62, and the amount of the manager's salary was
P4,533.33, the net result of which was that all of the property of the estate was
consumed, lost, or destroyed, leaving a deficit against the estate of P1,809.69.
Whereas, if the administrator had followed the law and promptly sold the personal
property, all of the debts of the estate would have been paid, and it would have a
cash balance in its favor of P2,377.42, and all of its real property left, which was
appraised at P15,000.
It is but fair to say that Wilson's place of business, which was in Zamboanga, is at
least 300 kilometers from the plantation, and that he declined to serve as
administrator and only accepted it under pressure. That in legal effect he operated
and left the management of the plantation largely in the discretion of Fleming, and
that he personally had but little, if anything, to do with the administration, and it does
not appear that he was a party to any fraud. But even so, he was appointed and
qualified as administrator, and the law imposed upon him legal duties and obligations,
among which was to handle the estate in a business-like manner, marshal its assets,
and close the estate without any unreasonable or unnecessary delay. He was not
appointed to act for or on behalf of the creditors, or to represent the interests of the
heirs only. He should have administered the affairs of the estate for the use and
benefit alike of all interested persons, as any prudent business man would handle his
own personal business. When appointed, it is the legal duty of the administrator to
administer, settle, and close the administration in the ordinary course of business,
without any unnecessary delay. Neither does an administrator, in particular, without
a specific showing or an order of the court, have any legal right to continue the
operation of the business in which the deceased was engaged, or to eat up and absorb
the assets of the estate in the payment of operating expenses. Yet, in the instant
case, the administrator on his own volition and without any authority or process of
court continued the operation of the plantation, and in the end, as shown by his own
report, the estate, which was appraised at P20,800, with actual debts of the deceased
of only P1,655,54 was all wiped out and lost, and left with a deficit of
P1,809.69. 1awph!l.net
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
The law does not impose upon an administrator a high degree of care in the
administration of an estate, but it does impose upon him ordinary and usual care, for
want of which he is personally liable. In the instant case there were no complications
of any kind and in the usual and ordinary course of business, the administrator should
have wound up and settled the estate within eight months from the date of his
appointment.
Ruling Case Law, vol. 11, section 142, says:
Winding up Business — An executor or administrator ordinarily has no power to
continue the business in which the decedent was engaged at the time of his death;
and this is true although he acts in the utmost good faith and believes that he is
proceeding for the best interests of the estate. The penalty for continuing a business
of the decedent without authority is the imposition of a personal liability on the
executor or administrator so doing for all debts of the business. The normal duty of
the personal representative in reference to such business is limited to winding it up,
and even where the beneficiaries are infants the court cannot authorize the
administrator to carry on the trade of the decedent. However, an exception to the
general rule is sometimes recognized; and so it has been held that in order to settle
an estate the personal representative may, in some cases , be permitted to continue
a business for a reasonable time. For example, such personal representative when
authorized to postpone the sale of the testator's effects may generally carry on the
business for a reasonable time with a view to its sale as a going concern. Even in such
cases the personal representatives are not, however, entitled to embark in the
business more of the testator's property than was employed in it at his death. (Citing
numerous authorities.)
The same principle is also laid down in Cyc., vol., 18,p. 241, where it is said:
C. Engaging in Business — 1. GENERAL RULE. The general rule is that neither an
executor nor an administrator is justified in placing or leaving assets in trade, for this
is a hazardous use to permit of trust moneys; and trading lies outside the scope of
administrative functions. So great a breach of trust is it for the representative to
engage in business with the funds of the estate that the law charges him with all the
losses thereby incurred without on the other hand allowing him to receive the benefit
of any profits that he may make, the rule being that the persons beneficially interested
in the estate may either hold the representative liable for the amount so used with
interest, or at their election take all the profits which the representative has made by
such unauthorized use of the funds of the estate.
Even so, considering the fact that Wilson's home and place of business was 300
kilometers from the plantation, and that in the very nature of things, he could not
give the business of the estate his personal attention, we are disposed to be more or
less lenient, and to allow him the actual operating expenses of the plantation for the
first eight months of his appointment amounting to P2,257.45. Although the expense
account of the administrator and the claims of the commissioners are somewhat high,
we are also disposed to allow those claims. That is to say, in his final account, the
administrator should have credit for the following items:
His personal charges and expenses P 750.94
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Court expenses, including attorney's fee 693.20

Claims of the commissioners 322.90

Expenses for and on account of operation for the first

eight months 2,257.45

Debts against the deceased, including taxes 1,655.54

or a total of 5,680.03

As stated, it appears from his report that the administrator in the course of
administration received P1,919.25 from the sale of personal property. This with the
P7,600 which he received from the remaining assets sold to Mannion make a total of
P9,519.25 from which should be deducted P5,680.03 for and on account of the items
above stated, leaving a balance due and owing from the administrator to the heirs of
the deceased of P3,839.22.

As stated, it is the duty of the administrator of an estate to represent and protect the
interests of all interested persons, including the heirs of the deceased. It is very
apparent upon their face that the entries in Exhibits D and E were not made in the
ordinary course of business, and even if they were, they would not be evidence of the
payments without the corresponding receipts or vouchers. That is to say, to entitle
the administrator to credit for money paid out in the course of administration, he
should submit and file with the court a corresponding receipt or voucher. Even so, it
appears from the record that during his lifetime, the deceased employed a number of
laborers on the plantation, and that after Wilson was appointed as administrator,
Fleming personally took charge of and operated the plantation, and that the expenses
of which for the first eight months was P2,257.45.

The order of the lower court approving the final account of Wilson as administrator is
reversed and set aside, and a judgment will be entered in favor of the heirs and
against the administrator for P3,839.22, with interest thereon from November
7,1927, at the rate of 6 per cent per annum, without prejudice to any remedy which
the heirs may have against the bondsmen of the administrator. The appellants to
recover costs. So ordered.

[83] G.R. No. L-19265 May 29, 1964
MOISES SAN DIEGO, SR., petitioner,
vs.
ADELO NOMBRE and PEDRO ESCANLAR, respondents.
A. R. Castañeda and M. S. Roxas for petitioner.
Amado B. Parreño Law Office for respondents.
PAREDES, J.:
The case at bar had its origin in Special Proceedings No. 7279 of the CFI of Negros
Occidental wherein respondent Adelo Nombre was the duly constituted judicial
administrator. On May 1, 1960, Nombre, in his capacity was judicial administrator of
the intestate estate subject of the Sp. Proc. stated above, leased one of the properties
of the estate (a fishpond identified as Lot No. 1617 of the cadastral survey of
Kabankaban, Negros Occidental), to Pedro Escanlar, the other respondent. The terms
of the lease was for three (3) years, with a yearly rental of P3,000.00 to expire on
May 1, 1963, the transaction having been done, admittedly, without previous
authority or approval of the Court where the proceedings was pending. On January
17, 1961, Nombre was removed as administrator by Order of the court and one
Sofronio Campillanos was appointed in his stead. The appeal on the Order of Nombre's
removal is supposedly pending with the Court of Appeals. Respondent Escanlar was
cited for contempt, allegedly for his refusal to surrender the fishpond to the newly
appointed administrator. On March 20, 1961, Campillanos filed a motion asking for
authority to execute a lease contract of the same fishpond, in favor of petitioner
herein, Moises San Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00.
Escanlar was not notified of such motion. Nombre, the deposed administrator,
presented a written opposition to the motion of Campillanos on April 11, 1964,
pointing out that the fishpond had been leased by him to Escanlar for 3 years, the
period of which was going to expire on May 1, 1963. In a supplemental opposition,
he also invited the attention of the Court that to grant the motion of the new
administrator would in effect nullify the contract in favor of Escanlar, a person on
whom the Court had no jurisdiction. He also intimated that the validity of the lease
contract entered into by a judicial administrator, must be recognized unless so
declared void in a separate action. The opposition notwithstanding, the Court on April
8, 1961, in effect declared that the contract in favor of Escanlar was null and void,
for want of judicial authority and that unless he would offer the same as or better
conditions than the prospective lessee, San Diego, there was no good reason why the
motion for authority to lease the property to San Diego should not be granted.
Nombre moved to reconsider the Order of April 8, stating that Escanlar was willing to
increase the rental of P5,000.00, but only after the termination of his original contract.
The motion for reconsideration was denied on April 24, 1961, the trial judge stating
that the contract in favor of Escanlar was executed in bad faith and was fraudulent
because of the imminence of Nombre's removal as administrator, one of the causes
of which was his indiscriminate pleasant, of the property with inadequate rentals.
From this Order, a petition for Certiorari asking for the annulment of the Orders of
April 8 and 24, 1961 was presented by Nombre and Escanlar with the Court of
Appeals. A Writ of preliminary injunction was likewise prayed for to restrain the new
administrator Campillanos from possessing the fishpond and from executing a new
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
lease contract covering it; requiring him to return the possession thereof to Escanlar,
plus damages and attorney's fees in the amount of P10,000.00 and costs. The Court
of Appeals issued the injunctive writ and required respondents therein to Answer.
Campillanos insisted on the invalidity of the contract in favor of Escanlar; the lower
court alleged that it did not exactly annul or invalidate the lease in his questioned
orders but suggested merely that Escanlar "may file a separate ordinary action in the
Court of general jurisdiction."
The Court of Appeals, in dismissing the petition for certiorari, among others said —
The controlling issue in this case is the legality of the contract of lease entered into
by the former administrator Nombre, and Pedro Escanlar on May 1, 1960.
Respondents contend that this contract, not having been authorized or approved by
the Court, is null and void and cannot be an obstacle to the execution of another of
lease by the new administrator, Campillanos. This contention is without merit. ... . It
has been held that even in the absence of such special powers, a contract or lease for
more than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the
six-year limit (Enrique v. Watson Company, et al., 6 Phil. 84). 1
No such limitation on the power of a judicial administrator to grant a lease of property
placed under his custody is provided for in the present law. Under Article 1647 of the
present Civil Code, it is only when the lease is to be recorded in the Registry of
Property that it cannot be instituted without special authority. Thus, regardless of the
period of lease, there is no need of special authority unless the contract is to be
recorded in the Registry of Property. As to whether the contract in favor of Escanlar
is to be so recorded is not material to our inquiry. 1äwphï1.ñët
On the contrary, Rule 85, Section 3, of the Rules of Court authorizes a judicial
administrator, among other things, to administer the estate of the deceased not
disposed of by will. Commenting on this Section in the light of several Supreme Court
decisions (Jocson de Hilado v. Nava, 69 Phil. 1; Gamboa v. Gamboa, 68 Phil. 304;
Ferraris v. Rodas, 65 Phil. 732; Rodriguez v. Borromeo, 43 Phil. 479), Moran says:
"Under this provision, the executor or administrator has the power of administering
the estate of the deceased for purposes of liquidation and distribution. He may,
therefore, exercise all acts of administration without special authority of the Court.
For instance, he may lease the property without securing previously any permission
from the court. And where the lease has formally been entered into, the court cannot,
in the same proceeding, annul the same, to the prejudice of the lessee, over whose
person it had no jurisdiction. The proper remedy would be a separate action by the
administrator or the heirs to annul the lease. ... .
On September 13, 1961, petitioner herein Moises San Diego, Sr., who was not a party
in the case, intervened and moved for a reconsideration of the above judgment. The
original parties (the new administrator and respondent judge) also filed Motions for
reconsideration, but we do not find them in the record. On November 18, 1961, the
Court of Appeals denied the motions for reconsideration. With the denial of the said
motions, only San Diego, appealed therefrom, raising legal questions, which center
on "Whether a judicial administrator can validly lease property of the estate without
prior judicial authority and approval", and "whether the provisions of the New Civil
Code on Agency should apply to judicial administrators."
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

The Rules of Court provide that —
An executor or administrator shall have the right to the possession of the real as well
as the personal estate of the deceased so long as it is necessary for the payment of
the debts and the expenses of administration, and shall administer the estate of the
deceased not disposed of by his will. (Sec. 3, Rule 85, old Rules).
who, incidentally, did not take any active participation in the present appeal, the right
of petitioner to the fishpond becomes a moot and academic issue, which We need not
pass upon.
WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all
respects, with costs against petitioner Moises San Diego, Sr.

Lease has been considered an act of administration (Jocson v. Nava; Gamboa v.

Gamboa; Rodriguez v. Borromeo; Ferraris v. Rodas, supra).

The Civil Code, on lease, provides:

If a lease is to be recorded in the Registry of Property, the following persons cannot

constitute the same without proper authority, the husband with respect to the wife's
paraphernal real estate, the father or guardian as to the property of the minor or
ward, and the manager without special power. (Art. 1647).

The same Code, on Agency, states:

Special powers of attorneys are necessary in the following cases:

(8) To lease any real property to another person for more than one year. (Art. 1878)

Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a judicial
administrator to lease real property without prior court authority and approval, if it
exceeds one year. The lease contract in favor of Escanlar being for 3 years and without
such court approval and authority is, therefore, null and void. Upon the other hand,
respondents maintain that there is no limitation of such right; and that Article 1878
does not apply in the instant case.

We believe that the Court of Appeals was correct in sustaining the validity of the
contract of lease in favor of Escanlar, notwithstanding the lack of prior authority and
approval. The law and prevailing jurisprudence on the matter militates in favor of this
view. While it may be admitted that the duties of a judicial administrator and an agent
(petitioner alleges that both act in representative capacity), are in some respects,
identical, the provisions on agency (Art. 1878, C.C.), should not apply to a judicial
administrator. A judicial administrator is appointed by the Court. He is not only the
representative of said Court, but also the heirs and creditors of the estate (Chua Tan
v. Del Rosario, 57 Phil. 411). A judicial administrator before entering into his duties,
is required to file a bond. These circumstances are not true in case of agency. The
agent is only answerable to his principal. The protection which the law gives the
principal, in limiting the powers and rights of an agent, stems from the fact that
control by the principal can only be thru agreements, whereas the acts of a judicial
administrator are subject to specific provisions of law and orders of the appointing
court. The observation of former Chief Justice Moran, as quoted in the decision of the
Court of Appeals, is indeed sound, and We are not prone to alter the same, at the
moment.

We, likewise, seriously doubt petitioner's legal standing to pursue this appeal. And, if
We consider the fact that after the expiration of the original period of the lease
contract executed by respondent Nombre in favor of Escanlar, a new contract in favor
of said Escanlar, was executed on May 1, 1963, by the new administrator Campillanos.

[84] G.R. No. L-28214 July 30, 1969
NATIVIDAD V. A. JARODA, petitioner,
vs.
THE HONORABLE VICENTE N. CUSI, JR., Presiding Judge, Branch I, Court of
First Instance of Davao, and ANTONIO V. A. TAN, in his capacity as judicial
administrator of intestate estate of Carlos Villa Abrille, Special Proc. No.
1391, Court of First Instance of Davao, respondents.
Dario C. Rama for petitioner.
Jose R. Madrazo, Jr. for respondents.
REYES, J.B.L., J.:
Questioned as null and void in this petition for certiorari with preliminary injunction
are two (2) orders of the Court of First Instance of Davao, Branch I, issued in its
Special Proceeding No. 1391 entitled "In the Matter of the Intestate Estate of Carlos
Villa Abrille, deceased, Antonio V. A. Tan, petitioner."
The first of the said two orders, dated 5 May 1965, granted an ex-parte petition by
then special administrator Antonio V. A. Tan, the herein respondent, to withdraw from
the Philippine National Bank the amount of P182,531.08 deposited in savings and
checking accounts in the name, and during the lifetime, of Carlos Villa Abrille (now
deceased) but allegedly held in trust for the decedent's co-owners in the Juna
Subdivision.
The second order, dated 3 September 1965, approved ex-parte the power of attorney
executed by special administrator Tan appointing himself attorney-in-fact to sell the
share of the estate in the subdivision lots.
The aforesaid Special Proceeding No. 1391 was commenced by Antonio V. A. Tan on
22 April 1965, alleging in his petition filed with the respondent court that Carlos Villa
Abrille died intestate on 3 April 1965; that he left an estate consisting of his conjugal
share in real and personal properties, among which are:
p. Nineteen (19) Percent share in the co-ownership known as Juna Subdivision;
xxx xxx xxx
xxx xxx xxx
t. Cash on Bank: BPI (Savings) D-1365 in the amount of P55,284.11; PNB (Savings)
8189, in the amount of P9,047.74; and PCIB (Savings) 337, in the amount of P416.24.
(Annex "A" to Petition, Rollo, pages 1415);
that the heirs of the deceased are his surviving spouse, nine (9) children (among
them the herein petitioner, Natividad V. A. Jaroda), and four (4) grandsons, among
them the herein respondent, Antonio V. A. Tan.
On 26 April 1965, respondent Tan was appointed special administrator.
On 4 May 1965, respondent special administrator Tan fled an ex-parte petition for the
withdrawal of the sums of P109,886.42 and P72,644.66 from the Philippine National
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Bank, Davao Branch, which sums were not listed in his petition for administration as
among the properties left by the deceased, alleging that these sums were deposited
in the name of the deceased but that they actually belong to, and were held in trust
for, the co-owners of the Juna Subdivision, and alleging as reason for the withdrawal
that it would be advantageous to the estate of the deceased. Annexed to the said
petition are powers of attorney purportedly signed by the co-owners in 1948 and 1949
authorizing the late Carlos Villa Abrille to sell the lots in the Juna Subdivision and to
deposit the proceeds thereof with the Philippine National Bank. The alleged co-owners
of the subdivision concurred in the petition, but not the heirs of the deceased (Annex
"C" to Petition, Rollo, page 19).
The respondent court found the petition for withdrawal of the bank deposits as
"meritorious", and granted the petition in an order on 5 May 1965.
On 7 May 1965, special administrator Tan executed, together with the other co-
owners of the Juna Subdivision, a power of attorney appointing himself as attorney-
in-fact to "sell (or) dispose upon terms and conditions as he deems wise" the lots in
the 99.546-hectare subdivision (Annex "F-1" to Petition, Rollo, pages 30-32).
On 9 September 1965, respondent Tan was issued letters of administration by the
respondent court.
On the same day, 9 September 1965, as regular administrator, respondent Tan filed
a petition with the respondent court, alleging that the deceased was the manager of
and a co-owner in the Juna Subdivision and that he had been engaged in the business
of selling the lots, and praying for the approval by the court of the power of attorney
executed by him, in behalf of the intestate estate, and appointing and authorizing
himself to sell the lots.
The court granted the petition, "as prayed for," on 3 September 1965.1äwphï1.ñët
On 29 November 1966, herein petitioner Natividad V. A. Jaroda moved to nullify the
order of 5 May 1965, that allowed the withdrawal of the bank deposits, as well as the
order of 3 September 1965, which approved the power of attorney.
The respondent court denied, on 25 February 1967, "for lack of merit" the aforesaid
motion.
Petitioner Jaroda appealed from the order of denial, but the respondent court
dismissed the appeal on the ground that the order appealed from was interlocutory.
Jaroda then filed before the Supreme Court a petition for certiorari and/or mandamus
on 8 July 1967, docketed as G.R. No. L-27831, but this Court dismissed the petition,
adding in its resolution that appeal in due time is the remedy.
On 28 October 1967, petitioner Jaroda filed the present petition for certiorari with
preliminary injunction. She alleged, among other things, that appeal would not be
speedy and adequate as respondent Tan has sold and continues to sell the subdivision
lots on the strength of the respondent court's order, to her irreparable prejudice and
that of the other heirs. This Court gave due course to the petition and issued
preliminary injunction on 3 November 1967, restraining the respondent from selling
the share of the intestate estate.

We agree with petitioner that the order of 5 May 1965 allowing the special
administrator to withdraw the bank deposits standing in the name of the decedent is
in abuse of discretion amounting to lack of jurisdiction. In the first place, said
withdrawal is foreign to the powers and duties of a special administrator, which, as
Section 2 of Rule 80 of the Rules of Court provides, are to —
take possession and charge of the goods, chattels, rights, credits and estate of the
decease and preserve the same for the executor or administrator afterwards
appointed, and for that purpose may commence and maintain suits as administrator.
He may sell only such perishable and other property as the court orders sold. A special
administrator shall not be liable to pay any debts of the deceased unless so ordered
by the court.
In the second place, the order was issued without notice to, and hearing of, the heirs
of the deceased. The withdrawal of the bank deposits may be viewed as a taking of
possession and charge of the credits of the estate, and apparently within the powers
and duties of a special administrator; but actually, said withdrawal is a waiver by the
special administrator of a prima facie exclusive right of the intestate estate to the
bank deposits in favor of the co-owners of the Juna Subdivision, who were allegedly
claiming the same as alleged by the administrator in his motion (Petition, Annex "C").
The bank deposits were in the name of the deceased; they, therefore, belong prima
facie to his estate after his death. And until the contrary is shown by proper evidence
at the proper stage, when money claims may be filed in the intestate proceedings,
the special administrator is without power to make the waiver or to hand over part of
the estate, or what appears to be a prima facie part of the estate, to other persons
on the ground that the estate is not the owner thereof. If even to sell for valuable
consideration property of the estate requires prior written notice of the application to
the heirs, legatees, or devisees under Rule 89 of the Rules of Court, such notice is
equally, if not more, indispensable for disposing gratuitously of assets of the decedent
in favor of strangers. Admittedly, no such notice was given, and without it the court's
authority is invalid and improper.
The order of 3 September 1965 approving the power of attorney executed by
administrator Tan and appointing himself as attorney-in-fact to sell the subdivision
lots for a price at his discretion is, likewise, void for want of notice and for approving
an improper contract or transaction.
The very rule, Section 4 of Rule 89 of the Rules of Court, relied on by respondent Tan
to sustain the power of attorney for the sale of the pro-indiviso share of the estate in
the subdivision requires "written notice to the heirs, devisees, and legatees who are
interested in the estate to be sold" and, admittedly, administrator Tan did not furnish
such notice. (Answer, pages 1 and 2, paragraph 3, Rollo, page 53) Without such
notice, the order of the court authorizing the sale is void. (Estate of Gamboa vs.
Floranza, 12 Phil. 191; Gabriel vs. Encarnacion, 94 Phil. 917)
But respondent Tan holds petitioner Jaroda with actual knowledge of the questioned
order, and to show it he quotes the transcript of stenographic notes of a discussion
by a lawyer of Jaroda about the said order. The discussion, however, took place on
19 March 1966 while the order was issued on 13 September 1965, and there is
nothing in the discussion that may indicate knowledge by Jaroda of the order before,
at or immediately after its issuance.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
It has been broadly stated that an administrator is not permitted to deal with himself
as an individual in any transaction concerning trust property. (Pesula's Estate, 64 ALR
2d 851, 150 Cal. App. 2d 462, 310 P 2d 39)
It is well settled that an executrix holds the property of her testator's estate as a
trustee. In re Heydenfeldt's Estate, 117 Cal. 551, 49 P. 713; Firebaugh v.
Burbank, 121 Cal. 186, 53 P. 560. It is equally well settled that an executrix will not
be permitted to deal with herself as an individual in any transaction concerning the
trust property. Civil Code, S 2230. In Davis v. Rock Creek L., F. & M Co., 55 Cal. 359,
at page 364, 36 Am. Rep. 40, it is said: 'The law, for wise reasons, will not permit
one who acts in a fiduciary capacity thus to deal with himself in his individual capacity.'
The following cases are to the same effect: Wickersham v. Crittenden, 93 Cal. 17, 29,
28 P. 788; Sims v. Petaluma Gas Light Co., 131 Cal. 656, 659, 63 P. 1011; Western
States Life Ins. Co. v. Lockwood, 166 Cal. 185, 191, 135 P. 496; In re Estate of
Parker, 200 Cal. 132, 139, 251 P 907, 49 A. L. R. 1025. In Wickersham v.
Crittenden, supra, 93 Cal. at page 29, 28 P. at page 790, it is further stated in respect
to a transaction wherein a trustee sought to deal with trust property: 'Courts will not
permit any investigation into the fairness of the transaction, or allow the trustee to
show that the dealing was for the best interest of the beneficiary.' This language is
quoted with approval in the case of Pacific Vinegar & Pickle Works v. Smith, 145 Cal.
352, 365, 78 P. 550, 104 Am. St. Rep 42. (In re Bogg's Estate, 121 P. 2d 678, 683).
The opinion of some commentators that, as a general rule, auto-contracts are
permissible if not expressly prohibited (See Tolentino, Civil Code of the Philippines,
Vol. IV 1962, pages 375-377), and that there is no express provision of law prohibiting
an administrator from appointing himself as his own agent, even if correct, cannot
and should not apply to administrator of decedent's estates, in view of the fiduciary
relationship that they occupy with respect to the heirs of the deceased and their
responsibilities toward the probate court. A contrary ruling would open the door to
fraud and maladministration, and once the harm is done, it might be too late to correct
it. A concrete example would be for administrator Tan to authorize agent Tan to sell
a lot for P50, with the condition that if he can sell it for more he could keep the
difference; agent Tan sells the lot for P150.00; he retains P100.00 and deposits in
the bank P50.00 "in the name of Antonio V. A. Tan, in trust for Juna Subdivision" (as
worded in the power of attorney. Annex "F-1"); thus, administrator Tan's accounting
to the estate for the sale of the lot for P50 would be in order, but the estate would
have been actually cheated of the sum of P100, which went to agent Tan in his
individual capacity.
The court below also failed to notice that, as alleged in the administrator's petition
(Annex "F" herein), after the death of Carlos Villa Abrille the administrator Tan, in his
personal capacity, had replaced said deceased as manager of the Juna Subdivision by
authority of the other co-owners. By the court's questioned order of 3 September
1965 empowering him to represent the interest of the deceased in the management
of the subdivision, the administrator Tan came to be the agent or attorney-in-fact of
two different principals: the court and the heirs of the deceased on the one hand, and
the majority co-owners of the subdivision on the other, in managing and disposing of
the lots of the subdivision. This dual agency of the respondent Tan rendered him
incapable of independent defense of the estate's interests against those of the
majority co-owners. It is highly undesirable, if not improper, that a court officer and
administrator, in dealing with property under his administration, should have to look
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

to the wishes of strangers as well as to those of the court that appointed him. A
judicial administrator should be at all times subject to the orders of the appointing
Tribunal and of no one else.

That petitioner Jaroda, as heir of the late Carlos Villa Abrille, should hold a minor
interest (¹/¹¹ of 19%) in the co-ownership known as the Juna Subdivision and that
the early termination of said co-ownership would redound to the benefit of the co-
owners, including the heirs of Carlos Villa Abrille, are beside the point. Jaroda's
interest in the estate demands that she be heard by the court in all matters affecting
the disposal of her share, and that the administrator should primarily protect the
interest of the estate in which she is a participant rather than those of the decedent's
co-owners.

The resolution of this Court in L-27836 (Natividad V. A. Jaroda vs. the Hon. Vicente
N. Cusi, Jr., etc., et al.), dismissing the petition for certiorari and/or mandamus and
stating that appeal in due time is the remedy, is no bar to the present petition, for it
has not been shown that the allegations in both the dismissed petition and those of
the present one are substantially the same. Anyway, certiorari lies if appeal would
not be prompt enough to block the injurious effects of the orders of the lower court
(Silvestre vs. Torres, et al., 57 Phil. 885; Pachoco vs. Tumangday, L-14500, 25 May
1960; Mayormente vs. Robaco Corp., L-25337, 27 Nov. 1967, 21 SCRA 1080).

After the present case was submitted for decision, respondent Tan manifested that
the co-owners of the Juna Subdivision and the heirs of the late Carlos Villa Abrille,
including the petitioner Natividad V. A. Jaroda, had executed a partial partition and
the same has been approved by the probate court. Said approved partial partition has
no effect, one way or the other, upon the orders contested in the present case. For
one thing, it is not definite whether the lots described in the 57 pages of the partition
agreement correspond to those of the Juna Subdivision as described in the power of
attorney.

FOR THE FOREGOING REASONS, the order of 5 May 1965 and 3 September 1965 of
the Court of First Instance of Davao, Branch I, in its Special Proceeding No. 1391, are
hereby set aside and declared null and void. The preliminary injunction heretofore
issued is hereby made permanent. Costs against the respondent, Antonio V. A. Tan,
in his personal capacity.

[85] A.M. No. 2430 August 30, 1990
MAURO P. MANANQUIL, complainant,
vs.
ATTY. CRISOSTOMO C. VILLEGAS, respondent.
Geminiano M. Eleccion for complainant.
RESOLUTION
CORTES, J.:
In a verified complaint for disbarment dated July 5, 1982, Mauro P. Mananquil charged
respondent Atty. Crisostomo C. Villegas with gross misconduct or malpractice
committed while acting as counsel of record of one Felix Leong in the latter's capacity
as administrator of the Testate Estate of the late Felomina Zerna in Special
Proceedings No. 460 before then Court of First Instance of Negros Occidental. The
complainant was appointed special administrator after Felix Leong died.
In compliance with a resolution of this Court, respondent filed his comment to the
complaint on January 20, 1983. After complainant filed his reply, the Court resolved
to refer the case to the Solicitor General for investigation, report and
recommendation.
In a hearing conducted on May 15, 1985 by the investigating officer assigned to the
case, counsel for the complainant proposed that the case be considered on the basis
of position papers and memoranda to be submitted by the parties. Respondent
agreed. Thus, the investigating officer required the parties to submit their respective
position papers and memoranda, with the understanding that with or without the
memoranda, the case will be deemed submitted for resolution after the expiration of
30 days. In compliance, both parties submitted their respective position papers; but
no memorandum was filed by either party. Thereafter, the case was deemed
submitted.
In the pleadings submitted before the Court and the Office of the Solicitor General,
complainant alleges that over a period of 20 years, respondent allowed lease
contracts to be executed between his client Felix Leong and a partnership HIJOS DE
JOSE VILLEGAS, of which respondent is one of the partners, covering several parcels
of land of the estate, i.e. Lots Nos. 1124, 1228, 2221, 2402, 3939, 3942 and 3957 of
the Tanjay Cadastre, under iniquitous terms and conditions. Moreover, complainant
charges that these contracts were made without the approval of the probate court
and in violation of Articles 1491 and 1646 of the new Civil Code.
On the basis of the pleadings submitted by the parties, and other pertinent records
of the investigation, the Solicitor General submitted his report dated February 21,
1990, finding that respondent committed a breach in the performance of his duties
as counsel of administrator Felix Leong when he allowed the renewal of contracts of
lease for properties involved in the testate proceedings to be undertaken in favor of
HIJOS DE JOSE VILLEGAS without notifying and securing the approval of the probate
court. However, the Solicitor General opined that there was no sufficient evidence to
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
warrant a finding that respondent had allowed the properties to be leased in favor of
his family partnership at a very low rental or in violation of Articles 1491 and 1646 of
the new Civil Code. Thus, the Solicitor General recommended that respondent be
suspended from the practice of law for a period of THREE (3) months with a warning
that future misconduct on respondent's part will be more severely dealt with [Report
and Recommendation of the Solicitor General, pp. 1-10; Rollo, pp. 37-46. Also,
Complaint of the Solicitor General, pp. 1-3; Rollo, pp. 47-49].
As gleaned from the record of the case and the report and recommendation of the
Solicitor General, the following facts are uncontroverted:
That as early as March 21, 1961, respondent was retained as counsel of record for
Felix Leong, one of the heirs of the late Felomina Zerna, who was appointed as
administrator of the Testate Estate of the Felomina Zerna in Special No. 460 on May
22, 1961;
That, a lease contract dated August 13, 1963 was executed between Felix Leong and
the "Heirs of Jose Villegas" represented by respondent's brother-in-law Marcelo
Pastrano involving, among others, sugar lands of the estate designated as Lot Nos.
1124, 1228, 2221, 2402, 3939, 3942 and 3957 of the Tanjay Cadastre;
That Felix Leong was designated therein as administrator and "owner, by
testamentary disposition, of 5/6 of all said parcels of land";
That, the lifetime of the lease contract was FOUR (4) sugar crop years, with a yearly
rental of TEN PERCENT (10%) of the value of the sugar produced from the leased
parcels of land;
That, on April 20, 1965, the formal partnership of HIJOS DE JOSE VILLEGAS was
formed amongst the heirs of Jose Villegas, of which respondent was a member;
That, on October 18, 1965, another lease contract was executed between Felix Leong
and the partnership HIJOS DE JOSE VILLEGAS, containing basically the same terms
and conditions as the first contract, with Marcelo Pastrano signing once again as
representative of the lessee;
That, on March 14, 1968, after the demise of Marcelo Pastrano, respondent was
appointed manager of HIJOS DE JOSE VILLEGAS by the majority of partners;
That, renewals of the lease contract were executed between Felix Leong and HIJOS
DE JOSE VILLEGAS on January 13, 1975 and on December 4, 1978, with respondent
signing therein as representative of the lessee; and,
That, in the later part of 1980, respondent was replaced by his nephew Geronimo H.
Villegas as manager of the family partnership.
Under the above circumstances, the Court finds absolutely no merit to complainant's
charge, and the Solicitor General's finding, that respondent committed acts of
misconduct in failing to secure the approval of the court in Special Proceedings No.
460 to the various lease contracts executed between Felix Leong and respondent's
family partnership.

Pursuant to Section 3 of Rule 84 of the Revised Rules of Court, a judicial executor or
administrator has the right to the possession and management of the real as well as
the personal estate of the deceased so long as it is necessary for the payment of the
debts and the expenses of administration. He may, therefore, exercise acts of
administration without special authority from the court having jurisdiction of the
estate. For instance, it has long been settled that an administrator has the power to
enter into lease contracts involving the properties of the estate even without prior
judicial authority and approval [See Ferraris v. Rodas, 65 Phil. 732 (1938); Jocson de
Hilado v. Nava, 69 Phil. 1 (1939); San Diego, Sr. v. Hombre, G.R No. L-19265, May
29, 1964, 11 SCRA 165].
Thus, considering that administrator Felix Leong was not required under the law and
prevailing jurisprudence to seek prior authority from the probate court in order to
validly lease real properties of the estate, respondent, as counsel of Felix Leong,
cannot be taken to task for failing to notify the probate court of the various lease
contracts involved herein and to secure its judicial approval thereto.
Nevertheless, contrary to the opinion of the Solicitor General, the Court finds sufficient
evidence to hold respondent subject to disciplinary sanction for having, as counsel of
record for the administrator in Special Proceedings No. 460, participated in the
execution in 1975 and 1978 of renewals of the lease agreement involving properties
of the estate in favor of the partnership HIJOS DE JOSE VILLEGAS, of which
respondent is a member and in 1968 was appointed managing partner.
By virtue of Article 1646 of the new Civil Code, the persons referred to in Article 1491
are prohibited from leasing, either in person or through the mediation of another, the
properties or things mentioned in that article, to wit:
xxx xxx xxx
(1) The guardian, the property of the person or persons who may be under his
guardianship;
(2) Agents, the property whose administration or sale may have been intrusted to
them, unless the consent of the principal have been given;
(3) Executors and administrators, the property of the estate under administration
(4) Public officers and employees, the property of the State or of any subdivision
thereof, or of any government owned or controlled corporation, or institution, the
administration of which has been intrusted to them; this provision shall apply to
judges and government experts who, in any manner whatsoever, take part in the
sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the
property or rights in litigation or levied upon on execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to lawyers, with respect
to the property and rights which may be the object of any litigation in which they may
take part by virtue of their profession.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
(6) Any others specially disqualified by law
xxx xxx xxx
[Article 1491 of the new Civil Code; Emphasis supplied.]
The above disqualification imposed on public and judicial officers and lawyers is
grounded on public policy considerations which disallow the transactions entered into
by them, whether directly or indirectly, in view of the fiduciary relationship involved,
or the peculiar control exercised by these individuals over the properties or rights
covered [See Rubias v. Batiller, G.R. No. L-35702, May 29, 1973, 51 SCRA 120;
Maharlika Publishing Corporation v. Tagle, G.R. No. 65594, July 9, 1986, 142 SCRA
553; Fornilda v. The Branch 164, RTC Fourth Judicial Region, Pasig, G.R. No. 72306,
October 5, 1988, 166 SCRA 281 and January 24, 1989, 169 SCRA 351].
Thus, even if the parties designated as lessees in the assailed lease contracts were
the "Heirs of Jose Villegas" and the partnership HIJOS DE JOSE VILLEGAS, and
respondent signed merely as an agent of the latter, the Court rules that the lease
contracts are covered by the prohibition against any acquisition or lease by a lawyer
of properties involved in litigation in which he takes part. To rule otherwise would be
to lend a stamp of judicial approval on an arrangement which, in effect, circumvents
that which is directly prohibited by law. For, piercing through the legal fiction of
separate juridical personality, the Court cannot ignore the obvious implication that
respondent as one of the heirs of Jose Villegas and partner, later manager of, in HIJOS
DE JOSE VILLEGAS stands to benefit from the contractual relationship created
between his client Felix Leong and his family partnership over properties involved in
the ongoing testate proceedings.
In his defense, respondent claims that he was neither aware of, nor participated in,
the execution of the original lease contract entered into between his client and his
family partnership, which was then represented by his brother-in-law Marcelo
Pastrano. And although he admits that he participated in the execution of subsequent
renewals of the lease contract as managing partner of HIJOS DE JOSE VILLEGAS, he
argues that he acted in good faith considering that the heirs of Filomena Zerna
consented or acquiesced to the terms and conditions stipulated in the original lease
contract. He further contends that pursuant to the ruling of the Court in Tuason
v. Tuason [88 Phil. 428 (1951)] the renewal contracts do not fall within the prohibition
of Articles 1491 and 1646 since he signed the same as a mere agent of the
partnership.
Respondent's contentions do not provide sufficient basis to escape disciplinary action
from this Court.
It taxes this Courts imagination that respondent disclaims any knowledge in the
execution of the original lease contract between his client and his family partnership
represented by his brother-in-law. Be that as it may, it cannot be denied that
respondent himself had knowledge of and allowed the subsequent renewals of the
lease contract. In fact, he actively participated in the lease contracts dated January
13, 1975 and December 4, 1978 by signing on behalf of the lessee HIJOS DE JOSE
VILLEGAS.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Moreover, the claim that the heirs of Filomena Zerna have acquiesced and consented
to the assailed lease contracts does not militate against respondent's liability under
the rules of professional ethics. The prohibition referred to in Articles 1491 and 1646
of the new Civil Code, as far as lawyers are concerned, is intended to curtail any
undue influence of the lawyer upon his client on account of his fiduciary and
confidential association [Sotto v. Samson, G.R. No. L-16917, July 31, 1962, 5 SCRA
733]. Thus, the law makes the prohibition absolute and permanent [Rubias v.
Batiller, supra]. And in view of Canon 1 of the new Code of Professional Responsibility
and Sections 3 & 27 of Rule 138 of the Revised Rules of Court, whereby lawyers are
duty-bound to obey and uphold the laws of the land, participation in the execution of
the prohibited contracts such as those referred to in Articles 1491 and 1646 of the
new Civil Code has been held to constitute breach of professional ethics on the part
of the lawyer for which disciplinary action may be brought against him [See Bautista
v. Gonzalez, Adm. Matter No. 1625, February 12, 1990). Accordingly, the Court must
reiterate the rule that the claim of good faith is no defense to a lawyer who has failed
to adhere faithfully to the legal disqualifications imposed upon him, designed to
protect the interests of his client [See In re Ruste, 70 Phil. 243 (1940); Also, Severino
v. Severino, 44 Phil. 343 (1923)].

Neither is there merit in respondent's reliance on the case of Tuason

v. Tuason [supra.] It cannot be inferred from the statements made by the Court in
that case that contracts of sale or lease where the vendee or lessee is a partnership,
of which a lawyer is a member, over a property involved in a litigation in which he
takes part by virtue of his profession, are not covered by the prohibition under Articles
1491 and 1646.

However, the Court sustains the Solicitor General's holding that there is no sufficient
evidence on record to warrant a finding that respondent allowed the properties of the
estate of Filomena Zerna involved herein to be leased to his family partnership at
very low rental payments. At any rate, it is a matter for the court presiding over
Special Proceedings No. 460 to determine whether or not the agreed rental payments
made by respondent's family partnership is reasonable compensation for the use and
occupancy of the estate properties.

Considering thus the nature of the acts of misconduct committed by respondent, and
the facts and circumstances of the case, the Court finds sufficient grounds to suspend
respondent from the practice of law for a period of three (3) months.

WHEREFORE, finding that respondent Atty. Crisostomo C. Villegas committed acts of

gross misconduct, the Court Resolved to SUSPEND respondent from the practice of
law for four (4) months effective from the date of his receipt of this Resolution, with
a warning that future misconduct on respondent's part will be more severely dealt
with. Let copies of this Resolution be circulated to all courts of the country for their
information and guidance, and spread in the personal record of Atty. Villegas.

SO ORDERED.

[86] G.R. No. L-9686 May 30, 1961
FELICISIMO C. JOSON, administrator-appellee,
vs.
EDUARDO JOSON, ET AL., heirs-appellants.
Lavides, Sicat & Lavides for administrator-appellee.
Mario S. Garcia for heirs-appellants.
ANGELO, J.:
Tomas Joson died on July 5, 1945 in Quezon, Nueva Ecija leaving behind heirs and
properties. He married three times and was survived by nine (9) heirs: two (2)
children and grandchildren by his first wife Eufemia de la Cruz; two (2) daughters by
his second wife Pomposa Miguel and his third wife and surviving widow Dominga M.
Joson. Upon his death, his will was presented to the Court of First Instance of Nueva
Ecija by his son Felicisimo Joson for probate. In August, 1945, said will having been
duly probated, Felicisimo Joson was appointed administrator of the estate and,
accordingly, he filed an inventory of the properties left by the deceased.
On April 15, 1948, the administrator filed his first account for the year 1945-1946.
This was ordered by the court to be examined by the clerk of court but the same has
never been approved. On July 19, 1948, he filed his second account for the year
1946-1947 which was also referred to the clerk of court for examination. The same
has never been also approved by the court. On November 11, 1948, the administrator
filed another account for the year 1947-1948 and, upon motion of the heirs, he was
ordered to file an accounting covering the properties under his administration. On
September 7, 1954, Eduardo Joson, one of the heirs, filed an opposition to all the
accounts filed by the administrator where he alleged that the administrator diminished
the shares of the heirs in the yearly produce of the properties and had padded his
expenses of administration, and on September 29, 1954, the same heir filed another
motion praying the court to order the administrator to post a bond in the amount of
P50,000.00 For the reason that from the accounts represented by him to be the true
income of the estate from 1947 to 1953 there was a big difference of P132,600.00
which the administrator should account for to the heirs. On October 14, 1954, the
administrator submitted an amended statement of accounts for the same years which
were objected by two more heirs on the ground that the administrator had reported
for the years 1947-1952 an income short of what was actually received and expenses
much bigger than those actually incurred by him.
In the meantime, or on December 30, 1952, the heirs were able to compromise their
differences and entered into an extrajudicial settlement and partition of the entire
estate under the provisions of Section 1, Rule 74, of the Rules of Court which provides
for the settlement of the estate without court intervention. This settlement was
contained in two documents executed on the same date wherein they manifested that
they are entering into it because of their desire to put an end to the judicial proceeding
and administration. But, as the court was never informed of this extrajudicial
settlement either by the administrator or by the heirs, it issued on May 19, 1954 an
order requiring the administrator to file an accounting of his administration from 1949
to 1954, which accordingly the administrator complied with by submitting an
amended statement of his accounts as already mentioned above.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
However, on November 25, 1954, without said accounts having been heard or
approved, the administrator filed a motion to declare the proceedings closed and
terminated and to relieve him of his duties as such, which motion was amended by
him on January 15, 1955. Heir Eduardo Joson filed an opposition to said motion but,
after hearing, the court issued an order declaring the proceedings terminated and
relieving the administrator not only of his duties as such but also of his accounts
notwithstanding the heirs' opposition to said accounts. Hence this appeal:
In granting the motion of the administrator to declare the proceedings closed and
terminated and relieving him of his duties and of his accounts, the trial court made
the following pronouncement:
. . . It is claimed by the oppositor that the estate cannot be declared closed and
terminated for the reason that some of the accounts submitted by the administrator
for the years 1945 to 1948 have not been approved. The Court does not find any logic
in this contention. The heirs knew on December 30, 1952, when they entered into an
extra-judicial settlement of the estate, the existence of those accounts, but nothing
is mentioned in the said extra-judicial settlement regarding the same. They are,
therefore, presumed to have approved these accounts and have their opposition
thereto. There is, therefore, no reason to suspend the closing of this proceeding and
make the same depend upon the approval of these old accounts. To do so would be
like making the accessory more important than the principal. There is no doubt that
the report of the administrator of his administration is a mere incident in this
proceeding to wind up the estate of the deceased. If the parties concerned have
already entered into an extra-judicial settlement of the estate, the same should put
an end to this proceeding. Once this proceeding is terminated, the incidents thereto
must yield, since the only purpose of submitting a report of the accounts by the
administrator is to facilitate the liquidation. The administration of an estate cannot be
an end but only a means of settlement of the estate. It, therefore, becomes
unnecessary and a mere waste of time to call the administrator to account for, or to
report on, his administration from the moment that the heirs have already entered
into an extra-judicial settlement. To do so, would amount to a modification of the
extra-judicial settlement which is the law between the parties, which include the
oppositors herein.
The issues now posed by appellants are: (1) Is the duty of an administrator to make
an accounting of his administration a mere incident which can be avoided once the
estate has been settled?; (2) Are the proceedings deemed terminated by the mere
execution of an extrajudicial partition of the estate without the necessity of having
the accounts of the administrator heard and approved by the court?; and (3) Is the
administrator ipso facto relieved of his duty of proving his account from the moment
said partition has been executed? Appellants answer these questions in the negative
with the argument that if the contrary is to be upheld as was done by the trial court
the same would be contrary to the express provisions of our rules relative to the
duties of a judicial administrator. Hence, they argue, the trial court committed an
error in closing the estate in disregard of the accounts submitted by the administrator.
We find merit in this contention. To begin with, Section 1 of Rule 86 categorically
charges an administrator "with the whole of the estate of the deceased which has
come into his possession at the value of appraisement contained in the inventory;
with all the interest, profit, and income of such an estate; and with the proceeds of
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

so much of the estate as is hold by him, at the price at which sold." Section 8 of the
same rule imposes upon him the duty to render an account of his administration
within one year from his appointment, unless the court otherwise directs, as well as
to render such further accounts as the court may require until the estate is fully
settled. Section 10 likewise provides that before an account of the administrator is
allowed notice shall be given to all persons interested of the time and place of
examining and allowing the same. And finally Section 9 expressly directs that the
court shall examine the administrator upon oath with respect to every matter relating
to his account except when no objection is made to the allowance of the account and
its correctness is satisfactorily established by competent testimony.

It thus appears that the duty of an administrator to render an account is not a mere
incident of an administration proceeding which ran be waived or disregarded when
the same is terminated, but that it is a duty that has to be performed and duly acted
upon by the court before the administration is finally ordered closed and terminated.
Here the administrator has submitted his accounts for several years not only motu
proprio but upon requirement of the court, to which accounts the heirs have
seasonably submitted their opposition. And when the administrator moved the court
to close the proceedings and relieve him of his administration and of his accounts,
the heirs who objected thereto objected likewise to the closing of the proceedings
invoking their right to be heard but the court ignored their opposition and granted the
motion setting forth as reasons therefor what we quoted in the early part of this
decision. Verily, the trial court erred in acceding to the motion for in doing so it
disregarded the express provisions of our rules relative to the settlement of accounts
of a judicial administrator.

The fact that all the heirs of the estate have entered into an extrajudicial settlement
and partition in order to put an end to their differences cannot in any way be
interpreted as a waiver of the objections of the heirs to the accounts submitted by
the administrator not only because to so hold would be a derogation of the pertinent
provisions of our rules but also because there is nothing provided in said partition
that the aforesaid accounts shall be deemed waived or condoned. While the attitude
of the heirs in concluding said extrajudicial settlement is plausible and has contributed
to the early settlement of the estate, the same cannot however be considered as
release of the obligation of the administrator to prove his accounts. This is more so
when, according to the oppositors, the administrator has committed in his accounts
a shortage in the amount of P132,600.00 which certainly cannot just be brushed aside
by a mere technicality.

WHEREFORE, the order appealed from is set aside. The case shall be remanded to
the trial court for further proceedings in line with this decision. No costs.

[87] G.R. No. L-50277 February 14, 1980
TESTATE ESTATE OF THE LATE DOMINADOR TUMANG, MAGDALENA A.
TUMANG, administratrix-appellee,
vs.
GUIA T. LAGUIO AND HER MINOR CHILDREN, movants-appellants.
ANTONIO, J.:
This case was forwarded to this Court by the Court of Appeals on the ground that it
involves purely legal issues. The factual background, as found by the Court of Appeals,
is as follows:
In Special Proceeding No. 1953 involving the estate of the late Dominador Tumang
and pending before the Court of First Instance of Pampanga, the widow of the
deceased, namely Magdalena A. Tumang, administratrix and executrix of the will,
filed a petition to declare the testate proceedings definitely terminated and closed
with respect to herself and two of her children — Melba Tumang Ticzon and Nestor A.
Tumang. The petition was premised on the fact that the aforesaid heirs had already
acknowledged receipt of the properties adjudicated to them, and in order for such
properties to be transferred in their names, there was need for an order of the court
declaring the proceedings closed with respect to the aforesaid heirs. The petition was
opposed by appenee's daughter, Guia T. Laguio and her children on the ground that
appellee, as administratrix and executrix, had not yet delivered all properties
adjudicated to them. Moreover, the oppositors contended that there could be no
partial termination of the proceedings. Thereafter, the administratrix withdrew the
aforementioned petition.
During the hearing of the motion to withdraw petition, Magdalena Tumang, as
required by the court, filed a pleading captioned "Compliance", alleging that as shown
by the attached receipts issued by the BIR, the estate and inheritance taxes had been
fully paid; that as certified by the Deputy Clerk of Court, no claim has been presented
that has not already delivered all the properties and dividends of the shares of stock
adjudicated to her and her minor children since the approval of the original and
amendatory projects of partition; and that with such admission, the court no longer
has jurisdiction to entertain the motion under consideration.
Resolving the foregoing, the court a quo issued the first questioned Order on February
5, 1971, stating in part, the following:
Considering the opposition well founded, the court hereby considers the motion to
require administratrix to render an accounting untenable, as the final accounting of
the administratrix was already approved and therefore denies the motion of oppositor
and counter-petitioner dated Jan. 25, 1971. 2
A motion for reconsideration of the foregoing Order was filed by Guia T. Laguio and
her minor children. On August 16, 1971, the court a quo issued the second questioned
Order denying the motion for reconsideration in the following manner:
After a careful consideration of the grounds relied upon by the movant counter-
petitioner, this Court resolves to deny the motion for reconsideration for the reason
that in view of said counter-petitioner's receipt of the cash dividends in question
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
without first requiring the administratrix the accounting now being sought to be
rendered for purposes of determining the correctness of the cash dividends
constitutes already a waiver on her part to question such correctness of the aforesaid
cash dividends. The counter-petitioner is being assisted by counsel in the person of
her own husband, and who being well-versed in such legal process, could have
rejected receipt of the said cash dividends on the shares of stock if the correctness of
the same was at that time being doubted. To say the least, therefore, the grounds
for the motion for reconsideration are, in the honest opinion of this Court,
unmeritorious, and all the motion, in effect, is hereby denied. 3
The sole issue is whether or not the court should have required the executrix to render
an accounting of the cash and stock dividends received after the approval of her final
accounts. A corollary issue is whether or not petitioners have waived their right to
demand such accounting.
Section 8 of Rule 85 provides that the "executor or administrator shall render an
account of his administration within one (1) year from the time of receiving letters
testamentary or of administration ..., and he shall render such further accounts as
the court may requite until the estate is wholly settled."
In the instant case, further accounts by the executrix appear to be in order, in view
of the fact that the dividends sought to be accounted for are not included in the final
accounts rendered by the executrix. It appears that the interests of all the parties will
be better served and the conflict between petitioners and respondent will be resolved
if such additional accounting is made. Further, "it has been held that an executor or
administrator who receives assets of the estate after he has filed an account should
file a supplementary account thereof, and may be compelled to do so, but that it is
only with respect to matters occuring after the settlement of final account that
representatives will be compelled to file supplementary account." 4 It is only in a case
where the petition to compel an executor to account after he has accounted and has
been discharged fails to allege that any further sums came into the hands of the
executor, and the executor specifically denies the receipt of any further sums that the
accounting should be denied. 5
There is no question that in the instant case, the fact that the executrix received funds
of the estate after the approval of her final accounts and before the issuance of an
order finally closing the proceedings is admitted. She must, therefore, account for the
same, in consonance with her duty to account for all the assets of the decedent's
estate which have come into her possession by virtue of her office. 6 An executor
should account for all his receipts and disbursements since his last accounting. 7
We disagree with the lower court's finding that petitioners, by receiving the dividends
without requiring an accounting, had waived their right to do so. The duty of an
executor or administrator to render an account is not a mere incident of an
administration proceeding which can be waived or disregarded. It is a duty that has
to be performed and duly acted upon by the court before the administration is finally
ordered closed and terminated, 8 to the end that no part of the decedent's estate be
left unaccounted for. The fact that the final accounts had been approved does not
divest the court of jurisdiction to require supplemental accounting for, aside from the
initial accounting, the Rules provide that "he shall render such further accounts as the
court may require until the estate is wholly settled." 9
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

WHEREFORE, in view of all the foregoing, the Orders of the lower court dated February
5, 1971 and August 16, 1971 are set aside, and respondent executrix is hereby
ordered to render a supplemental accounting of all cash and stock dividends as well
as other properties of the estate which came into her possession after the approval
of her final accounts.

SO ORDERED.

[88] G.R. No. L-4090 January 31, 1952
INTESTATE ESTATE OF THE DECEASED HONOFRE LEYSON, deceased.
VICTORIO L. RODRIGUEZ,administrator-appellant, and
MARGARITA LEYSON LAURENTE, heiress-appellant,
vs.
PABLO M. SILVA, movant-appellee.
Eliseo Caunca for appellants.
Fidel J. Silva for appellee.
TUASON, J.:
This appeal is from an order of the Court of First Instance of Manila, Honorable Rafael
Amparo, Judge authorizing the cancellation of the bond of Pablo M. Silva who had
resigned as joint administrator of the intestate estate of Honofre Leyson, deceased,
and allowing Silva P600 as compensation for his services. The appellants are the
remaining administrator and an heir of the deceased.
The appeal was elevated to this Court on the appellant's manifestation that they would
raise only questions of law. Following are the assignments of error:
The lower court erred in issuing its order of August 19, 1949, granting Pablo M. Silva's
motion filed on August 9, 1949, and ordering the cancellation of his bond and
authorizing him to collect from the estate the sum of P600.00 as his administrator's
fees, inasmuch as said order is not in accordance with the provisions section 7, Rule
86 of the rules of Court.
That taking for granted, but without admitting that the compensation of the
administrators from their appointment up to the issuance of the order dated August
19, 1950, granting the resignation of Mr. Pablo M. Silva that the sum of P600 is
reasonable, the lower court, however, erred in not providing that, in view of the fact
that in this proceeding there are two administrators according to the services actually
rendered by them respectively, in accordance with the provision of Section 7,
paragraph 2, Rule 86 of the Rules of court, and that the sum of P100.00 already
received by the appellee be deducted from any amount that may finally be conceded
to him.
Lastly, the lower court erred in cancelling Mr. Pablo M. Silva's administrators bond,
inasmuch as few months before the issuance of said order dated August 19, 1950,
granting his resignation, he secured the cancellation of Transfer Certificate of Title
No. 13 (6947) Quezon City, and Transfer Certificate of Title No. 11778 Manila, issued
in the name of Honofre Leyson, and in their stead another titles were issued in the
name of Mr. Pablo M. Silva, the herein appellee, in a doubtful manner.
The first two assignments of error raise the same question or allied questions and
may well be considered together. This question is, may the court fix an administrator's
or executor's fee in excess of the fees prescribed by section 7 of Rule 86, which
follows?
SEC. 7. What expenses and fees allowed executor or administrator. Not to charge for
services as attorney. Compensation provided by will controls unless renounced. An
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
executor or administrator shall be allowed the necessary expenses in the care,
management, and settlement of the estate, and for his services, four pesos per day
for the time actually and necessarily employed, or a commission upon the value of so
much of the estate as comes into his possession and is finally disposed of by him in
the payment of debts, expenses, legacies, or distributive shares, or by delivery to
heirs or devises, of two per centum of the first five thousand pesos of such value, one
per centum of such value as exceeds five thousand pesos and does not exceed thirty
thousand pesos, one-half per centum of so much of such value as exceeds thirty
thousands pesos and does not exceed one hundred thousand pesos, and one-quarter
per centum of so much of such value as exceeds one hundred thousand pesos. But in
any special case, where the estate is large, and the settlement has been attended
with great difficulty, and has required a high degree of capacity on the part of the
executor or administrator, a greater sum may be allowed. If objection to the fees
allowed be taken, the allowance may be reexamined on appeal.
If there are two or more executors or administrators, the compensation shall be
apportioned among them by the court according to the services actually rendered by
them respectively.
When the executor or administrator is an attorney he shall not charge against the
estate any professional fees for legal services rendered by him.
When the deceased by will makes some other provision for the compensation of his
executor, that provision shall be a full satisfaction for his services unless by a written
instrument filed in the court he renounces all claim to the compensation provided by
the will.
It will be seen from this provision that a greater sum may be allowed "in any special
case, where the estate is large, and the settlement has been attended with great
difficulty, and has required a high degree of capacity on the part of the executor or
administrator." And so it has been held that "the amount of an executor's fee allowed
by the Court of first Instance in any special case under the provisions of Section 680
of the Code of Civil Procedure is a matter largely in the discretion of the probate court,
which will not be disturbed on appeal, except for an abuse of discretion."
(Rosentock, vs. Elser, 48 Phil. 709.)
The order of which the appellants complain does not state the work performed by the
appellee, but the inventory shows the appraised value of the estate to be P22,116.46,
itemized as follows:
Cash on deposit in the Philippine National Bank ....................... P8,159.43
Accounts receivable 500.00
.......................................................................
Real Estate 12,061.03
........................................................................................
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Personal Property 1,291.00

............................................................................

And it is stated in the appellee's brief that prior to his appointment and that of Victorio
L. Rodriguez as joint administrators, Justa Gomez, the decedent's cousin with whom
Leyson lived was special administratrix; that during Justa Gomez's incumbency which
lasted till December 8, 1947, the lease holdings of the said estate were renting about
900.00 a month; that after appellee's appointment, and through his initiative, their
income was increased to P1,300.00 and two parcels of land located in San Juan, Rizal,
were paid for in full and the corresponding certificates of title secured. It also
asserted, and not denied, that the appellee was instrumental in the gathering of
decedent's personal effects, and that as the result of his motion a court order,
whereby Margarita Leyson Laurente, one of the now appellants, had been authorized
to withdraw from the bank P3,400 as advance payment of her share of the
inheritance, was reconsidered and set aside. The fact that the appellee is an attorney-
at-law has served the estate in good stead, has served the estate in good stead, and
this ought not be lost sight it. Although being a lawyer is by itself not a factor in the
assessment of an administrator's fee, it should be otherwise as in this case the
administrator was able to stop what appeared to be an improvident disbursement of
a substantial amount without having to employ outside legal help at an additional
expense to estate.

The appellant having announced that no questions of fact would be discussed is

estopped from contesting the above allegations. On the basis of the services thus
specified, coupled with the fact that the appellee worked as co-probate court
committed an abuse of discretion in granting him P600.00 or P700.00, as fee
independent of the fee that might be allowed the other administrator.

As to the cancellation of the appellee's bond, which is the subject of the third ground
for appeal, there is no showing that De Silva was guilty of misappropriation or any of
the acts of commission or omission for which his bond could be held liable under Rule
86. The sole ground for the insistence that this cancellation should have been withheld
is that the appellee is in possession of a residential lot in Cubao, Quezon City, which
belonged to the deceased Honofre Leyson. But the appellee claims that this lot was
sold to him by Leyson on March 2, 1945. Certainly it was already in possession when
he and appellant Rodriguez took over the administration from the special
administratrix. This land therefore did not come into De Silva's hands in pursuance or
in the inventory prepared by or in conjunction with one of the appellants. Even
granting then, for the sake of argument, that De Silva has no valid title to this lot,
the sureties are not chargeable for it on the bond. De Silva's liability is personal and
exclusive of the sureties who are the parties mostly affected by the third assignment
of error.

Moreover, there is a pending suit over this property and that suit affords the estate
ample protection against the said property being alienated pending final disposition
of the litigation.

Upon the foregoing consideration, the order appealed from is affirmed, with costs.

[89] G.R. No. L-13031 May 30, 1961
INTESTATE ESTATE OF JAMES R. BURT, deceased. THE PHILIPPINE TRUST
CO., administrator-appellee,
vs.
LUZON SURETY CO., INC., surety-appellant.
Feria, Manglapus and Associates for administrator-appellee.
Tolentino, Garcia and D. R. Cruz for surety-appellant.
DIZON, J.:
On February 14, 1946, the Court of First Instance of Manila appointed Francis R.
Picard, Sr. as Administrator the Intestate Estate of the deceased James R. Burt (Civil
Case No. 71872) upon a bond of P1,000.00. Thereafter he submitted and the Court
approved his bond in the required amount, with appellant Luzon Surety Co., Inc. as
his surety.
For reasons that do not fully appear of record, on May 1, 1948 the Court dismissed
Picard, as administrator and appointed the Philippine Trust Co. in his place. After
qualifying for the position, the latter, on July 19, 1948, submitted an inventory-report
showing that the only asset of the Intestate Estate of Burt that had come into its
possession was the sum of P57.75 representing the balance of the checking account
of said deceased with the Philippine National Bank. In view thereof, on July 26, 1948
the Court issued an order the pertinent portion of which reads as follows:
A review, however, of the record of the case reveals that former Administrator Francis
Picard, filed on February 6, 1941, an inventory of the estate of the deceased, from
which it appears that the sole property he found was the amount of P8,873.73 in
current account with the Philippine National Bank. This amount was reduced to
P7,986.53 after deducting therefrom his expenses in the amount of P887.22; and as
reported by him in his petition filed on June 8, 1948, the further expenses in the
amount of P865.20 were deducted, thereby leaving the balance of P7,121.33 as of
May 27, 1948.
In view of the foregoing, the Court hereby orders said Francis Picard, to deliver within
forty-eight hours (48) from the receipt of a copy of the order the difference of
P7,063.58 to the present Administrator, Philippine Trust Company; otherwise he will
be ordered committed to prison for contempt until he shall have complied with this
order.
In compliance with the above order, Picard, submitted an itemized statement of
disbursements made by him as administrator of the estate, showing that as of
February 6, 1947 the estate funds amounted to P7,986.53; that on June 8, 1948 he
reported to the Court additional expenses incurred amounting to P865.20, thus
leaving a balance of P7,121.33; that thereafter he disbursed the sum of P250.00 to
defray the burial expenses of the deceased, thus leaving a balance of P6,871.33; that
on several occasions during the period from February 22, 1946 to May 14, 1947, he
had delivered to Feliciano Burt adoptive son of the deceased James R. Burt different
sums of money totalling P5,825.00, thus leaving a balance of P972.33. After
considering this statement, the Court, on September 18, 1948, issued an order finding
Picard, guilty of having disbursed funds of the estate amounting to about P8,000.00,
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
without authority. For this reason, the Court referred the matter to the City Fiscal of
Manila for investigation. Result of this was the prosecution of Picard, for estafa.
Having pleaded guilty to the charge, judgment of conviction was accordingly
rendered, and he was, besides, held civilly liable in the sum of P8,000.00.
On July 8, 1957 the Court issued an order requiring appellant Luzon Surety Co., Inc.
to show cause why the administrator's bond filed by it on behalf of Picard would not
be confiscated. Appellant filed a motion to set aside said order upon the following
grounds: firstly, that the Court cannot order the confiscation of the administrator's
bond, on prejudice or injury to creditors, legatees or heirs of the estate of James R.
Burt having been shown, and secondly, that "a probate court cannot, ex proprio motu,
prosecute the probate bond." On August 3, 1957 the Court denied appellant's motion
and ordered the confiscation of its bond. After the denial of appellant's lotion for
reconsideration, it took the present appeal.
Appellant's contention that the probate court, ex proprio motu, cannot order the
confiscation or forfeiture of an administrator's bond, is clearly without merit.
Whatever may be the rule prevailing in other jurisdictions, in ours probate court is
possessed with an all-embracing power not only in requiring but also in fixing the
amount, and executing or forfeiting an administrator's bond. The execution or
forfeiture of an administrator's bond, is deemed be a necessary part and incident of
the administration proceedings as much as its filing and the fixing of its amount. The
rule, therefore, is that the probate court may have said bond executed in the same
probate proceeding.
Moreover, the condition of the administrator's bond in question is that Francis L.
Picard shall faithfully execute the orders and decrees of the court; that if he did so,
the obligation shall become void, otherwise it shall remain in full force and effect. In
having been established that Picard disbursed funds of the estate without authority,
the conclusion follows that he had and his surety became bound upon the terms of
their bond.
Appellant also contends that it was not proper for the lower court to order the
confiscation of its bond because no prejudice or injury to any creditor, heir or other
interested person has been proved. This is also without merits. According to the
record, the claims against the estate filed by Antonio Gardiner and Jose Teruel for the
sum of P200.00 and P3,205.00, respectively, were approved by the probate court but
the same have remained unpaid because of lack of funds.
Finally, appellant claims that it had been released from liability as surety because it
received no notice of the proceedings for the determination of the accountability of
the administrator. This contention we also find to be untenable.
From the nature of the obligation entered into by the surety on an administrator's
bond — which makes him privy to the proceedings against his principal — he is bound
and concluded, in the absence of fraud and collusion, by a judgment against his
principal, even though said surety was not a party to the proceeding. In the case of
the De Mendoza vs. Pacheco, 64 Phil. 135, the sureties on the administrator's bond
were held liable thereon altho they were not parties to the proceeding against the
administrator, nor were they notified in connection therewith prior to the issuance of
the court order for the confiscation of the bond. Lastly, according to Section 11, Rule
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

86 of the Rules of Court, upon the settlement of the account of an executor or

administrator, his sureties "may upon application, be admitted as a party to such
accounting." The import of this provision is that the sureties are not entitled to notice
but may be allowed to intervene in the settlement of the accounts of the executor or
administrator if they ask for leave to do so in due time.

WHEREFORE, the decision appealed from is hereby affirmed, with costs.


[90] G.R. No. 174873 August 26, 2008
QUASHA ANCHETA PEÑA AND NOLASCO LAW OFFICE FOR ITS OWN
BEHALF, AND REPRESENTING THE HEIRS OF RAYMOND
TRIVIERE, petitioners,
vs.
LCN CONSTRUCTION CORP., respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review under Rule 45 of the Revised Rules of Court with
petitioners Quasha Ancheta Peña and Nolasco Law Office (Quasha Law Office) and the
Heirs of Raymond Triviere praying for the reversal of the Decision1 dated 11 May 2006
and Resolution2 dated 22 September 2006 of the Court of Appeals granting in part
the Petition for Certiorari filed by respondent LCN Construction Corporation (LCN) in
CA-G.R. SP No. 81296.
The factual antecedents of the case are as follows:
Raymond Triviere passed away on 14 December 1987. On 13 January 1988,
proceedings for the settlement of his intestate estate were instituted by his widow,
Amy Consuelo Triviere, before the Regional Trial Court (RTC) of Makati City, Branch
63 of the National Capital Region (NCR), docketed as Special Proceedings Case No.
M-1678. Atty. Enrique P. Syquia (Syquia) and Atty. William H. Quasha (Quasha) of
the Quasha Law Office, representing the widow and children of the late Raymond
Triviere, respectively, were appointed administrators of the estate of the deceased in
April 1988. As administrators, Atty. Syquia and Atty. Quasha incurred expenses for
the payment of real estate taxes, security services, and the preservation and
administration of the estate, as well as litigation expenses.
In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for
Payment of their litigation expenses. Citing their failure to submit an accounting of
the assets and liabilities of the estate under administration, the RTC denied in May
1995 the Motion for Payment of Atty. Syquia and Atty. Quasha.
In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the
Quasha Law Office, took over as the counsel of the Triviere children, and continued
to help Atty. Syquia in the settlement of the estate.
On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for
Payment,3 for their own behalf and for their respective clients, presenting the
following allegations:
(1) That the instant Petition was filed on January 13, 1988; and Atty. Enrique P.
Syquia was appointed Administrator by the Order of this Honorable Court dated April
12, 1988, and discharged his duties starting April 22, 1988, after properly posting his
administrator's bond up to this date, or more than fourteen (14) years later.
Previously, there was the co-administrator Atty. William H. Quasha, but he has
already passed away.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
(2) That, together with Co-administrator Atty. William H. Quasha, they have
performed diligently and conscientiously their duties as Co-administrators, having
paid the required Estate tax and settled the various claims against the Estate, totaling
approximately twenty (20) claims, and the only remaining claim is the unmeritorious
claim of LCN Construction Corp., now pending before this Honorable Court;
(3) That for all their work since April 22, 1988, up to July 1992, or for four (4) years,
they were only given the amount of P20,000.00 each on November 28, 1988; and
another P50,00.00 each on October 1991; and the amount of P100,000.00 each on
July 1992; or a total of P170,000.00 to cover their administration fees, counsel fees
and expenses;
(4) That through their work, they were able to settle all the testate (sic) claims except
the remaining baseless claim of LCN Construction Corp., and were able to dismiss two
(2) foreign claims, and were also able to increase the monetary value of the estate
from roughly over P1Million to the present P4,738,558.63 as of August 25, 2002 and
maturing on September 27, 2002; and the money has always been with the Philippine
National Bank, as per the Order of this Honorable Court;
(5) That since July 1992, when the co-administrators were paid P100,000.00 each,
nothing has been paid to either Administrator Syquia or his client, the widow Consuelo
Triviere; nor to the Quasha Law Offices or their clients, the children of the deceased
Raymond Triviere;
(6) That as this Honorable Court will notice, Administrator Syquia has always been
present during the hearings held for the many years of this case; and the Quasha
Law Offices has always been represented by its counsel, Atty. Redentor C. Zapata;
and after all these years, their clients have not been given a part of their share in the
estate;
(7) That Administrator Syquia, who is a lawyer, is entitled to additional
Administrator's fees since, as provided in Section 7, Rule 85 of the Revised Rules of
Court:
"x x x where the estate is large, and the settlement has been attended with great
difficulty, and has required a high degree of capacity on the part of the executor or
administrator, a greater sum may be allowed…"
In addition, Atty. Zapata has also been present in all the years of this case. In
addition, they have spent for all the costs of litigation especially the transcripts, as
out-of-pocket expenses.
(8) That considering all the foregoing, especially the fact that neither the
Administrator or his client, the widow; and the Quasha Law Offices or their clients,
the children of the deceased, have received any money for more than ten (10) years
now, they respectfully move that the amount of P1Million be taken from the Estate
funds, to be divided as follows:
a) P450,000.00 as share of the children of the deceased [Triviere] who are
represented by the Quasha Ancheta Peña & Nolasco Law Offices;

b) P200,000.00 as attorney's fees and litigation expenses for the Quasha Ancheta
Peña & Nolasco Law Offices;
c) P150,000.00 as share for the widow of the deceased [Raymond Triviere], Amy
Consuelo Triviere; and
d) P200,000.00 for the administrator Syquia, who is also the counsel of the widow;
and for litigation costs and expenses.
LCN, as the only remaining claimant4 against the Intestate Estate of the Late
Raymond Triviere in Special Proceedings Case No. M-1678, filed its Comment
on/Opposition to the afore-quoted Motion on 2 October 2002. LCN countered that the
RTC had already resolved the issue of payment of litigation expenses when it denied
the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for failure of the
administrators to submit an accounting of the assets and expenses of the estate as
required by the court. LCN also averred that the administrators and the heirs of the
late Raymond Triviere had earlier agreed to fix the former's fees at only 5% of the
gross estate, based on which, per the computation of LCN, the administrators were
even overpaid P55,000.00. LCN further asserted that contrary to what was stated in
the second Motion for Payment, Section 7, Rule 85 of the Revised Rules of Court was
inapplicable,5 since the administrators failed to establish that the estate was large, or
that its settlement was attended with great difficulty, or required a high degree of
capacity on the part of the administrators. Finally, LCN argued that its claims are still
outstanding and chargeable against the estate of the late Raymond Triviere; thus, no
distribution should be allowed until they have been paid; especially considering that
as of 25 August 2002, the claim of LCN against the estate of the late Raymond Triviere
amounted to P6,016,570.65 as against the remaining assets of the estate
totaling P4,738,558.63, rendering the latter insolvent.
On 12 June 2003, the RTC issued its Order6 taking note that "the widow and the heirs
of the deceased Triviere, after all the years, have not received their respective share
(sic) in the Estate x x x."
The RTC declared that there was no more need for accounting of the assets and
liabilities of the estate considering that:
[T]here appears to be no need for an accounting as the estate has no more assets
except the money deposited with the Union Bank of the Philippines under Savings
Account No. 12097-000656-0 x x x; on the estate taxes, records shows (sic) that the
BIR Revenue Region No. 4-B2 Makati had issued a certificate dated April 27, 1988
indicating that the estate taxes has been fully paid.7
As to the payment of fees of Atty. Syquia and the Quasha Law Office, the RTC found
as follows:
[B]oth the Co-Administrator and counsel for the deceased (sic) are entitled to the
payment for the services they have rendered and accomplished for the estate and the
heirs of the deceased as they have over a decade now spent so much time, labor and
skill to accomplish the task assigned to them; and the last time the administrators
obtained their fees was in 1992.8
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Hence, the RTC granted the second Motion for Payment; however, it reduced the
sums to be paid, to wit:
In view of the foregoing considerations, the instant motion is hereby GRANTED. The
sums to be paid to the co-administrator and counsel for the heirs of the deceased
Triviere are however reduced.
Accordingly, the co-administrator Atty. Syquia and aforenamed counsel are
authorized to pay to be sourced from the Estate of the deceased as follows:
a) P450,000.00 as share of the children of the deceased who are represented by the
Quasha, Ancheta, Pena, Nolasco Law Offices;
b) P100,000.00 as attorney's fees and litigation expenses for said law firm;
c) P150,000.00 as share for the widow of the deceased Amy Consuelo Triviere; and
d) P100,000.00 for the Co-administrator Atty. Enrique P. Syquia and for litigation
costs and expenses.9
LCN filed a Motion for Reconsideration10 of the foregoing Order on 2 July 2003, but it
was denied by the RTC on 29 October 2003.11
On 13 May 2004, LCN sought recourse from the Court of Appeals by assailing in CA-
G.R. SP No. 81296, a Petition for Certiorari, the RTC Orders dated 12 June 2003 and
2 July 2003, for having been rendered with grave abuse of discretion.12 LCN
maintained that:
(1) The administrator's claim for attorney's fees, aside from being prohibited under
paragraph 3, Section 7 of Rule 85 is, together with administration and litigation
expenses, in the nature of a claim against the estate which should be ventilated and
resolved pursuant to Section 8 of Rule 86;
(2) The awards violate Section 1, Rule 90 of the Rules of Court, as there still exists
its (LCN's) unpaid claim in the sum of P6,016,570.65; and
(3) The alleged deliberate failure of the co-administrators to submit an accounting of
the assets and liabilities of the estate does not warrant the Court's favorable action
on the motion for payment.13
On 11 May 2006, the Court of Appeals promulgated a Decision essentially ruling in
favor of LCN.
While the Court of Appeals conceded that Atty. Syquia and the Quasha Law Office, as
the administrators of the estate of the late Raymond Triviere, were entitled to
administrator's fees and litigation expenses, they could not claim the same from the
funds of the estate. Referring to Section 7, Rule 85 of the Revised Rules of Court, the
appellate court reasoned that the award of expenses and fees in favor of executors
and administrators is subject to the qualification that where the executor or
administrator is a lawyer, he shall not charge against the estate any professional fees
for legal services rendered by him. Instead, the Court of Appeals held that the
attorney's fees due Atty. Syquia and the Quasha Law Offices should be borne by their
clients, the widow and children of the late Raymond Triviere, respectively.

The appellate court likewise revoked the P450,000.00 share and P150,000.00 share
awarded by the RTC to the children and widow of the late Raymond Triviere,
respectively, on the basis that Section 1, Rule 91 of the Revised Rules of Court
proscribes the distribution of the residue of the estate until all its obligations have
been paid.
The appellate court, however, did not agree in the position of LCN that the
administrators' claims against the estate should have been presented and resolved in
accordance with Section 8 of Rule 86 of the Revised Rules of Court. Claims against
the estate that require presentation under Rule 86 refer to "debts or demands of a
pecuniary nature which could have been enforced against the decedent during his
lifetime and which could have been reduced to simple judgment and among which
are those founded on contracts." The Court of Appeals also found the failure of the
administrators to render an accounting excusable on the basis of Section 8, Rule 85
of the Revised Rules of Court.14
Finding the Petition for Certiorari of LCN partly meritorious, the Court of Appeals
decreed:
WHEREFORE, premises considered, the instant petition is hereby PARTLY GRANTED.
The assailed Orders of the public respondent are hereby AFFIRMED with
MODIFICATION in that -
(1) the shares awarded to the heirs of the deceased Triviere in the assailed Order
of June 12, 2003 are hereby DELETED; and
(2) the attorney's fees awarded in favor of the co-administrators are
hereby DELETED. However, inasmuch as the assailed order fails to itemize these fees
from the litigation fees/administrator's fees awarded in favor of the co-administrators,
public respondent is hereby directed to determine with particularity the fees
pertaining to each administrator.15
Petitioner filed a Motion for Reconsideration16 of the 11 May 2006 Decision of the
Court of Appeals. The Motion, however, was denied by the appellate court in a
Resolution dated 22 September 2006,17explaining that:
In sum, private respondents did not earlier dispute [herein respondent LCN's] claim
in its petition that the law firm and its lawyers served as co-administrators of the
estate of the late Triviere. It is thus quite absurd for the said law firm to now dispute
in the motion for reconsideration its being a co-administrator of the estate.
[Herein petitioners], through counsel, likewise appear to be adopting in their motion
for reconsideration a stance conflicting with their earlier theory submitted to this
Court. Notably, the memorandum for [petitioner] heirs states that the claim for
attorney's fees is supported by the facts and law. To support such allegation, they
contend that Section 7 (3) of Rule 85 of the 1997 Rules of Civil Procedure finds no
application to the instant case since "what is being charged are not professional fees
for legal services rendered but payment for administration of the Estate which has
been under the care and management of the co-administrators for the past fourteen
(14) years." Their allegation, therefore, in their motion for reconsideration that
Section 7 (3) of Rule 85 is inapplicable to the case of Quasha Law Offices because it
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
is "merely seeking payment for legal services rendered to the estate and for litigation
expenses" deserves scant consideration.
xxxx
WHEREFORE, premises considered, private respondents' motion for reconsideration
is hereby DENIED for lack of merit. 18
Exhausting all available legal remedies, petitioners filed the present Petition for
Review on Certiorari based on the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE AWARD IN FAVOR
OF THE HEIRS OF THE LATE RAYMOND TRIVIERE IS ALREADY A DISTRIBUTION OF
THE RESIDUE OF THE ESTATE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE AWARD OF
ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS
I
The Court of Appeals modified the 12 June 2003 Order of the RTC by deleting the
awards of P450,000.00 and P150,000.00 in favor of the children and widow of the
late Raymond Triviere, respectively. The appellate court adopted the position of LCN
that the claim of LCN was an obligation of the estate which was yet unpaid and, under
Section 1, Rule 90 of the Revised Rules of Court, barred the distribution of the residue
of the estate.
Petitioners, though, insist that the awards in favor of the petitioner children and widow
of the late Raymond Triviere is not a distribution of the residue of the estate, thus,
rendering Section 1, Rule 90 of the Revised Rules of Court inapplicable.
Section 1, Rule 90 of the Revised Rules of Court provides:
Section 1. When order for distribution of residue made. - When the debts, funeral
charges, and expenses of administration, the allowance to the widow, and inheritance
tax, if any, chargeable to the estate in accordance with law, have been paid, the
court, on the application of the executor or administrator, or of a person interested
in the estate, and after hearing upon notice, shall assign the residue of the estate to
the persons entitled to the same, naming them and the proportions, or parts, to which
each is entitled, and such persons may demand and recover their respective shares
from the executor or administrator, or any other person having the same in his
possession. If there is a controversy before the court as to who are the lawful heirs
of the deceased person or as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above mentioned
has been made or provided for, unless the distributees, or any of them, give a bond,
in a sum to be fixed by the court, conditioned for the payment of said obligations
within such time as the court directs.

According to petitioners, the 12 June 2003 Order of the RTC should not be construed
as a final order of distribution. The 12 June 2003 RTC Order granting the second
Motion for Payment is a mere interlocutory order that does not end the estate
proceedings. Only an order of distribution directing the delivery of the residue of the
estate to the proper distributees brings the intestate proceedings to a close and,
consequently, puts an end to the administration and relieves the administrator of his
duties.
A perusal of the 12 June 2003 RTC Order would immediately reveal that it was not
yet distributing the residue of the estate. The said Order grants the payment of certain
amounts from the funds of the estate to the petitioner children and widow of the late
Raymond Triviere considering that they have not received their respective shares
therefrom for more than a decade. Out of the reported P4,738,558.63 value of the
estate, the petitioner children and widow were being awarded by the RTC, in its 12
June 2003 Order, their shares in the collective amount of P600,000.00. Evidently, the
remaining portion of the estate still needs to be settled. The intestate proceedings
were not yet concluded, and the RTC still had to hear and rule on the pending claim
of LCN against the estate of the late Raymond Triviere and only thereafter can it
distribute the residue of the estate, if any, to his heirs.
While the awards in favor of petitioner children and widow made in the RTC Order
dated 12 June 2003 was not yet a distribution of the residue of the estate, given that
there was still a pending claim against the estate, still, they did constitute a partial
and advance distribution of the estate. Virtually, the petitioner children and widow
were already being awarded shares in the estate, although not all of its obligations
had been paid or provided for.
Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance
distribution of the estate, thus:
Section 2. Advance distribution in special proceedings. - Notwithstanding a pending
controversy or appeal in proceedings to settle the estate of a decedent, the court
may, in its discretion and upon such terms as it may deem proper and just,
permit that such part of the estate as may not be affected by the controversy or
appeal be distributed among the heirs or legatees, upon compliance with the
conditions set forth in Rule 90 of these rules. (Emphases supplied.)
The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows
the distribution of the estate prior to the payment of the obligations mentioned
therein, provided that "the distributees, or any of them, gives a bond, in a sum to be
fixed by the court, conditioned for the payment of said obligations within such time
as the court directs."
In sum, although it is within the discretion of the RTC whether or not to permit the
advance distribution of the estate, its exercise of such discretion should be qualified
by the following: [1] only part of the estate that is not affected by any pending
controversy or appeal may be the subject of advance distribution (Section 2, Rule
109); and [2] the distributees must post a bond, fixed by the court, conditioned for
the payment of outstanding obligations of the estate (second paragraph of Section 1,
Rule 90). There is no showing that the RTC, in awarding to the petitioner children and
widow their shares in the estate prior to the settlement of all its obligations, complied
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
with these two requirements or, at the very least, took the same into consideration.
Its Order of 12 June 2003 is completely silent on these matters. It justified its grant
of the award in a single sentence which stated that petitioner children and widow had
not yet received their respective shares from the estate after all these years. Taking
into account that the claim of LCN against the estate of the late Raymond Triviere
allegedly amounted to P6,016,570.65, already in excess of the P4,738,558.63
reported total value of the estate, the RTC should have been more prudent in
approving the advance distribution of the same.
Petitioners earlier invoked Dael v. Intermediate Appellate Court,,19 where the Court
sustained an Order granting partial distribution of an estate.
However, Dael is not even on all fours with the case at bar, given that the Court
therein found that:
Where, however, the estate has sufficient assets to ensure equitable distribution of
the inheritance in accordance with law and the final judgment in the proceedings and
it does not appear there are unpaid obligations, as contemplated in Rule 90, for
which provisions should have been made or a bond required, such partial distribution
may be allowed. (Emphasis supplied.)
No similar determination on sufficiency of assets or absence of any outstanding
obligations of the estate of the late Raymond Triviere was made by the RTC in this
case. In fact, there is a pending claim by LCN against the estate, and the amount
thereof exceeds the value of the entire estate.
Furthermore, in Dael, the Court actually cautioned that partial distribution of the
decedent's estate pending final termination of the testate or intestate proceeding
should as much as possible be discouraged by the courts, and, except in extreme
cases, such form of advances of inheritance should not be countenanced. The reason
for this rule is that courts should guard with utmost zeal and jealousy the estate of
the decedent to the end that the creditors thereof be adequately protected and all the
rightful heirs be assured of their shares in the inheritance.
Hence, the Court does not find that the Court of Appeals erred in disallowing the
advance award of shares by the RTC to petitioner children and the widow of the late
Raymond Triviere.
II
On the second assignment of error, petitioner Quasha Law Office contends that it is
entitled to the award of attorney's fees and that the third paragraph of Section 7,
Rule 85 of the Revised Rules of Court, which reads:
Section 7. What expenses and fees allowed executor or administrator. Not to charge
for services as attorney. Compensation provided by will controls unless renounced. x
x x.
xxxx
When the executor or administrator is an attorney, he shall not charge against the
estate any professional fees for legal services rendered by him. (Emphasis supplied.)

is inapplicable to it. The afore-quoted provision is clear and unequivocal and needs
no statutory construction. Here, in attempting to exempt itself from the coverage of
said rule, the Quasha Law Office presents conflicting arguments to justify its claim for
attorney's fees against the estate. At one point, it alleges that the award of attorney's
fees was payment for its administration of the estate of the late Raymond Triviere;
yet, it would later renounce that it was an administrator.
In the pleadings filed by the Quasha Law Office before the Court of Appeals, it referred
to itself as co-administrator of the estate.
In the Comment submitted to the appellate court by Atty. Doronila, the member-
lawyer then assigned by the Quasha Law Office to the case, it stated that:
The 12 June 2003 Order granted the Motion for Payment filed by Co-Administrator
and counsel Atty. Enrique P. Syquia and the counsel Atty. Cirilo E. Doronila and
Co-Administrator for the children of the late Raymond Triviere. x x x.20 (Emphasis
supplied.)
It would again in the same pleading claim to be the "co-administrator and counsel for
the heirs of the late Raymond Triviere."21
Finally, the Memorandum it submitted to the Court of Appeals on behalf of its clients,
the petitioner-children of the late Raymond Triviere, the Quasha Law Office alleged
that:
2. The petition assails the Order of the Honorable Regional Trial Court of Makati,
Branch 63 granting the Motion for Payment filed by Co-Administrators Atty.
Enrique P. Syquia and the undersigned counsel together with the children of the
deceased Raymond Triviere, and the Order dated 29 October 2003 denying
Petitioner's Motion for Reconsideration of the First Order.
xxxx
I. Statement of Antecedent Facts
xxxx
4. On 13 May 2004, Atty. Enrique Syquia, co-administrator and counsel for
respondent Amy Consuelo Triviere and the undersigned counsel, co-
administrator and counsel for the children of the late Raymond Triviere filed
their Comment.22
Petitioner Quasha Law Office asserts that it is not within the purview of Section 7,
Rule 85 of the Revised Rules of Court since it is not an appointed administrator of the
estate.23 When Atty. Quasha passed away in 1996, Atty. Syquia was left as the sole
administrator of the estate of the late Raymond Triviere. The person of Atty. Quasha
was distinct from that of petitioner Quasha Law Office; and the appointment of Atty.
Quasha as administrator of the estate did not extend to his law office. Neither could
petitioner Quasha Law Office be deemed to have substituted Atty. Quasha as
administrator upon the latter's death for the same would be in violation of the rules
on the appointment and substitution of estate administrators, particularly, Section 2,
Rule 82 of the Revised Rules of Court.24 Hence, when Atty. Quasha died, petitioner
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
Quasha Law Office merely helped in the settlement of the estate as counsel for the
petitioner children of the late Raymond Triviere.
In its Memorandum before this Court, however, petitioner Quasha Law Office argues
that "what is being charged are not professional fees for legal services rendered but
payment for administration of the Estate which has been under the care and
management of the co-administrators for the past fourteen (14) years."25
On the other hand, in the Motion for Payment filed with the RTC on 3 September
2002, petitioner Quasha Law Office prayed for P200,000.00 as "attorney's fees and
litigation expenses." Being lumped together, and absent evidence to the contrary,
the P200,000.00 for attorney's fees and litigation expenses prayed for by the
petitioner Quasha Law Office can be logically and reasonably presumed to be in
connection with cases handled by said law office on behalf of the estate. Simply,
petitioner Quasha Law Office is seeking attorney's fees as compensation for the legal
services it rendered in these cases, as well as reimbursement of the litigation
expenses it incurred therein.
The Court notes with disfavor the sudden change in the theory by petitioner Quasha
Law Office. Consistent with discussions in the preceding paragraphs, Quasha Law
Office initially asserted itself as co-administrator of the estate before the courts. The
records do not belie this fact. Petitioner Quasha Law Office later on denied it was
substituted in the place of Atty. Quasha as administrator of the estate only upon filing
a Motion for Reconsideration with the Court of Appeals, and then again before this
Court. As a general rule, a party cannot change his theory of the case or his cause of
action on appeal.26 When a party adopts a certain theory in the court below, he will
not be permitted to change his theory on appeal, for to permit him to do so would not
only be unfair to the other party but it would also be offensive to the basic rules of
fair play, justice and due process.27 Points of law, theories, issues and arguments not
brought to the attention of the lower court need not be, and ordinarily will not be,
considered by a reviewing court, as these cannot be raised for the first time at such
late stage.28
This rule, however, admits of certain exceptions.29 In the interest of justice and within
the sound discretion of the appellate court, a party may change his legal theory on
appeal, only when the factual bases thereof would not require presentation of any
further evidence by the adverse party in order to enable it to properly meet the issue
raised in the new theory.30
On the foregoing considerations, this Court finds it necessary to exercise leniency on
the rule against changing of theory on appeal, consistent with the rules of fair play
and in the interest of justice. Petitioner Quasha Law Office presented conflicting
arguments with respect to whether or not it was co-administrator of the estate.
Nothing in the records, however, reveals that any one of the lawyers of Quasha Law
Office was indeed a substitute administrator for Atty. Quasha upon his death.
The court has jurisdiction to appoint an administrator of an estate by granting letters
of administration to a person not otherwise disqualified or incompetent to serve as
such, following the procedure laid down in Section 6, Rule 78 of the Rules of Court.
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and
unequivocal terms the modes for replacing an administrator of an estate upon the
death of an administrator, to wit:
Section 2. Court may remove or accept resignation of executor or administrator.
Proceedings upon death, resignation, or removal. x x x.
2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of
their corresponding administrators' fees, to be determined by the RTC handling
Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to be
chargeable to the estate of Raymond Trieviere.
SO ORDERED.

When an executor or administrator dies, resigns, or is removed the remaining

executor or administrator may administer the trust alone, unless the court grants
letters to someone to act with him. If there is no remaining executor or
administrator, administration may be granted to any suitable person.

The records of the case are wanting in evidence that Quasha Law Office or any of its
lawyers substituted Atty. Quasha as co-administrator of the estate. None of the
documents attached pertain to the issuance of letters of administration to petitioner
Quasha Law Office or any of its lawyers at any time after the demise of Atty. Quasha
in 1996. This Court is thus inclined to give credence to petitioner's contention that
while it rendered legal services for the settlement of the estate of Raymond Triviere
since the time of Atty. Quasha's death in 1996, it did not serve as co-administrator
thereof, granting that it was never even issued letters of administration.

The attorney's fees, therefore, cannot be covered by the prohibition in the third
paragraph of Section 7, Rule 85 of the Revised Rules of Court against an attorney, to
charge against the estate professional fees for legal services rendered by them.

However, while petitioner Quasha Law Office, serving as counsel of the Triviere
children from the time of death of Atty. Quasha in 1996, is entitled to attorney's fees
and litigation expenses of P100,000.00 as prayed for in the Motion for Payment dated
3 September 2002, and as awarded by the RTC in its 12 June 2003 Order, the same
may be collected from the shares of the Triviere children, upon final distribution of
the estate, in consideration of the fact that the Quasha Law Office, indeed, served as
counsel (not anymore as co-administrator), representing and performing legal
services for the Triviere children in the settlement of the estate of their deceased
father.

Finally, LCN prays that as the contractor of the house (which the decedent caused to
be built and is now part of the estate) with a preferred claim thereon, it should already
be awarded P2,500,000.00, representing one half (1/2) of the proceeds from the sale
of said house. The Court shall not take cognizance of and rule on the matter
considering that, precisely, the merits of the claim of LCN against the estate are still
pending the proper determination by the RTC in the intestate proceedings below.

WHEREFORE, premises considered, the Petition for Review on Certiorariis

hereby PARTLY GRANTED. The Decision dated 11 May 2006 and Resolution dated
22 September 2006 of the Court of Appeals in CA-G.R. SP No.
81296 are AFFIRMED, with the following MODIFICATIONS:

1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED

THOUSAND PESOS (P100,000.00), for legal services rendered for the Triviere children
in the settlement of the estate of their deceased father, the same to be paid by the
Triviere children in the manner herein discussed; and

[91] G.R. No. L-9271 March 29, 1957
In the matter of the testate estate of the late DA. MARGARITA DAVID.
CARLOS MORAN SISON, Judicial Administrator, petitioner-appellant,
vs.
NARCISA F. TEODORO, heiress, oppositor-appellee.
Teodoro R. Dominguez for appellant.
Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:
On December 20, 1948, the Court of First Instance of Manila, which has jurisdiction
over the estate of the late Margarita David, issued an order appointing Carlos Moran
Sison as judicial administrator, without compensation, after filing a bond in the
amount of P5,000. The next day, Carlos Moran Sison took his oath of office and put
up the requisite bond which was duly approved by the court. On the same day, letters
of administration were issued to him.
On January 19, 1955, the judicial administrator filed an accounting of his
administration which contains, among others, the following disbursement items:
13. Paid to Visayan Surety & Insurance Corporation on
August 6, 1954, as renewal premiums on the
Administrator's bond of Judicial Administrator Carlos Moran
Sison covering the period from December 20, 1949 to
December 20, 1954, inclusive ................................. P380.70
15. Paid to Visayan Surety & Insurance Corporation on
December 21, 1954, for premiums due on the
Administrator's bond of judicial Administrator Carlos Moran
Sison for the period from December 21, 1954 to December
21, 1955 ............................................................... 76.14
Narcisa F. Teodoro, one of the heirs, objected to the approval of the above- quoted
items on the grounds that they are not necessary expenses of administration and
should not be charged against the estate. On February 25, 1955, the court approved
the report of the administrator but disallowed the items objected to on the ground
that they cannot be considered as expenses of administration. The administrator filed
a motion for reconsideration and when the same was denied, he took the present
appeal.
The only issue to be determined is "whether a judicial administrator, serving without
compensation, is entitled to charge as an expense of administration the premiums
paid on his bond."
The lower court did not consider the premiums paid on the bond filed by the
administrator as an expense of administration taking into account undoubtedly the
ruling laid down in the case of Sulit vs. Santos, 56 Phil., 626. That is a case which
also involves the payment of certain premium on the bond put up by the judicial
administrator and when he asked the court that the same be considered as an
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
expense of administration, it was disapproved for the same reasons advanced by the
trial court. In sustaining this finding, this Court ruled that the "expense incurred by
an executor or administrator to produce a bond is not a proper charge against the
estate. Section 680 of the Code of Civil Procedure (similar to section 7, Rule 86) does
not authorize the executor or administrator to charge against the estate the money
spent for the presentation, filing, and substitution of a bond." And elaborating on this
matter, the Court made the following comment:
The aforementioned cases, in reality, seem superfluous in ascertaining the true
principle. The position of an executor or administrator is one of trust. In fact, the
Philippine Code of Civil Procedure so mentions it. It is proper for the law to safeguard
the estate of deceased persons by requiring the executor or administrator to give a
suitable bond. The ability to give this bond is in the nature of a qualification for the
office. The execution and approval of the bond constitute a condition precedent to
acceptance of the responsibilities of the trust. If an individual does not desire to
assume the position of executor of administrator, he may refuse to do so. On the
other hand, when the individual prefers an adequate bond and has it approved by the
probate court, he thereby admits the adequacy of the compensation which is
permitted him pursuant to law. It would be a very far-fetched construction to deduce
the giving of a bond in order to qualify for the office of executor or administrator is a
necessary expense in the care, management, and settlement of the estate within the
meaning of section 680 of the Code of Civil Procedure, for these are expenses incurred
after the executor of administrator has met the requirements of the law and has
entered upon the performance of his duties. (See In re Eby's Estate [1894], 30 Atl.,
124.)
We feel that the orders of Judge Mapa in this case rested on a fine sense of official
duty, sometimes lacking in cases of this character, to protect the residue of the estate
of a deceased person from unjustifiable inroads by an executor, and that as these
orders conform to the facts and the law, they are entitled to be fortified by an explicit
pronouncement from this court. We rule that the expense incurred by an execution
or administrator to procure a bond is not a proper charge against the estate, and that
section 680 of the Code of Civil Procedure does not authorize the executor or
administrator to charge against the estate the money spent for the presentation,
filing, and substitution of a bond.
It is true that the Sulit case may be differentiated from the present in the sense that,
in the former the administrator accepted the trust with the emolument that the law
allows, whereas in the latter the administrator accepted the same without
compensation, but this difference is of no moment, for there is nothing in the decision
that may justify the conclusion that the allowance or disallowance of premiums paid
on the bond of the administrator is made dependent on the receipt of compensation.
On the contrary, a different conclusion may be inferred considering the ratio
decidendi on which the ruling is predicated. Thus, it was there stated that the position
of an executor or administrator is one of trust: that it is proper for the law to safeguard
the estates of deceased persons by requiring the administrator to give a suitable
bond, and that the ability to give this bond is in the nature of a qualification for the
office. It is also intimated therein that "If an individual does not desire to assume the
position of executor or administrator, he may refuse to do so," and it is far-fetched
to conclude that the giving of a bond by an administrator is an necessary expense in
the care, management and settlement of the estate within the meaning of the law,
 SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar

because these expenses are incurred "after the executor or administrator has met the
requirement of the law and has entered upon the performance of his duties." Of
course, a person may accept the position of executor or administrator with all the
incident appertaining thereto having in mind the compensation which the law allows
for the purpose, but he may waive this compensation in the same manner as he may
refuse to serve without it. Appellant having waived compensation, he cannot now be
heard to complain of the expenses incident to his qualification.

The orders appealed from are hereby affirmed, without costs.


[92] G.R. No. L-29414 July 17, 1928
TEODORICO UY TIOCO, petitioner,
vs.
CARLOS IMPERIAL, Judge of First Instance of Manila, and ALEJANDRO M.
PANIS, respondents.
Marcelo Nubla for petitioner.
The respondent Judge in his own behalf.
Alejandro M. Panis in his own behalf and in behalf of the respondent judge.
OSTRAND, J.:
This is a petition for a writ of prohibition to restrain the respondent judge from
compelling the petitioner to pay the sum of P11,250 to the other respondent,
Alejandro Panis, out of the funds of the estate of the deceased Basilisa Yangco, of
which estate said petitioner is the administrator.
It appears from the record that the respondent Panis was counsel for the
administration of said estate and that he on October 31, 1927, before the final
settlement of accounts, presented a motion in the probate proceedings for the
allowance of attorney's fees in the sum of P15,000. On December 5, 1927, the
respondent judge, over the objections in writing presented by the administrator,
granted the motion and allowed the fees claimed by Panis. The administrator, the
herein petitioner, did not appeal from the order of the court, but on February 8, 1928,
Jacinto Yangco, in his capacity as guardian ad litem of the minors Pedro and Bruno
Uy Tioco, the sons and then the only heirs of the deceased, presented a motion for
reconsideration under section 113 of the Code of Civil Procedure on the grounds that
he was not notified of the motion for the allowance of fees and had no knowledge
thereof or of the order granting the motion until a few days before the filing of there
motion for reconsideration; that the fees allowed Panis were excessive and prejudicial
to the interest of the estate; and that considering the nature of the work performed,
the services rendered with him did not warrant the payment of the sum claimed. This
motion was denied on February 15, 1928, the respondent judge holding that while
the heirs of the deceased were not notified by the hearing of the motion for allowance
of attorney's fees, such notice was duly served upon the administrator; that was a
sufficient compliance with the law; that curador ad litem might have the right to
intervene in the case but have no absolute right to be notified of the motion; that the
provisions of section 113 of the Code of Civil Procedure were not applicable to the
case; and that, in any event, the motion for reconsideration is entirely without merit.
On February 23, 1928, the guardian ad litem excepted to the order of February 15,
1928, and gave notice of his intention to appeal to the Supreme Court. On the 28th
of the same month, Attorney Felix Wijangco, on behalf of Panis, filed a motion in the
probated proceedings in which be set forth that the minor Bruno Uy Tioco is now
deceased and that his share of inheritance will go to his father, the herein petitioner;
that the property involved in the case is community property in which one-half
belongs to the petitioner; that consequently the minor Pedro Uy Tioco is only entitled
to a one-fourth of the property pertaining to the estate, and that therefore his appeal
from the order allowing the attorney's fees can only relate to one-fourth of the amount
allowed, wherefore the movent asked that the administrator be ordered to make
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar
payments of three-fourths of the amount within five days from the presentation of
the motion. To this motion the guardian ad litem objected, but under the date of
March 6, 1928, the respondent judge ordered the administrator to make payment of
three-fourths of P15,000 within five days. The administrator refused to make such
payment, and on March 17th the court, after citing him to show cause, again ordered
him to pay as provided for in the order of March 6, under penalty of removal from
office. The present action was thereupon brought. Upon filing the petition the
respondent were ordered to answer, as ordered, the respondents submitted a
demurrer which we, considering that there can be no dispute as to the essential facts,
shall regard as a sufficient answer to said petition.
In our opinion, the petition must be granted. The orders of March 6th and 7th for a
partial payment of the fees claimed were issued after an appeal had been taken and
perfected by the filing of an appeal bond approved by the court. The appeal was taken
from the order of February 15 denying the motion for reopening and reconsideration
of the allowance for attorney's fees and involves the validity of that order and the
finality of the order of December 5, 1927. Whether this orders were valid and final
need not be here determined, but they are appealable, and we are not aware of any
provision of law authorizing the lower court to enforce the immediate execution of
such orders and probate proceedings after an appeal has been perfected. The interest
of the appellee are supposed to be sufficiently protected by an adequate bond.
The arguments submitted indicate a misconception of the character of the liability for
the attorney's fees are claimed are supposed to have been rendered to the executor
or administrator to assist him in the execution of his trust. The attorney can therefore
not hold the estate directly liable for his fees; such fees are allowed to the executor
or administrator and not to the attorney. The liability for the payment rests on the
executor or administrator, but if the fees paid are beneficial to the estate and
reasonable, he is entitled to the reimbursement from the estate. Such payment should
be included in his accounts and the reimbursement therefore settled upon the notice
prescribed in section 682 of the Code of Civil Procedure. (See Church on Probate Law
and Practice, pp. 1570-1588 and authorities there cited; Woerner on the American
Law of Administration, 2d ed., sections 515 and 516.)
For the reasons stated the respondent judge is hereby prohibited from enforcing the
payment of the attorney's fees above-mentioned until the appeal taken by Jacinto
Yangco, as guardian ad litem for the minor Pedro Uy Tioco, has been passed upon by
this court or dismissed. No costs will be allowed. So ordered.
SPECIAL PROCEEDINGS | CASES
Judge Marlo Malagar