BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
RULE 83 INVENTORY AND APPRAISAL. PROVISION FOR
SUPPORT OF FAMILY
PERIOD
SEBIAL vs SEBIAL
FACTS:
Gelacio Sebial died intestate in 1943 in Pinamungajan Cebu. He
begot three children named Roberta, Balbina and Juliano by his first
wife Leoncia Manikis and six children named Benjamina, Valentina,
Ciriaco, Gregoria, Esperanza and Luciano by his second wife Dolores
Enad.
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.
After hearing, the lower court in its order of January 16, 1961
appointed Benjamina Sebial as administratrix.
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.
On April 27, 1961 Benjamina Sebial filed an inventory and appraisal
of the decedent's estate allegedly consisting of seven unregistered
parcels of land, 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.
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.
The lower court in its order of December 11, 1961 approved the
second inventory dated November 17, 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.
On December 29, 1961 Roberta Sebial moved for the reconsideration
of the order on the ground 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.
ISSUE:
WON the three-month period prescribed in section 1, Rule 83 of the
Rules of Court is mandatory. NO.
RULING:
Oppositors' contention in their motion for reconsideration 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).
PROVISIONAL INCLUSION IN INVENTORY
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GARCIA vs GARCIA
FACTS:
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 (one of the daughter of the
deceased) objected to said inventory, taking exception to various
items therein.
ISSUE:
WON 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. YES.
RULING:
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 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
CUIZON vs RAMOLETE
FACTS:
In 1970, Marciano Cuizon 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.
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.
Rufina, Irene's alleged half sister and sole heir, 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.
On September 28, 1978, a petition for letters of administrator was
filed 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
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Arche be ordered to deliver the salt to the administrator. The motion
was granted.
ISSUE:
WON 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. NO.
RULING:
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.
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 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.
GUINGUING vs ABUTON
FACTS:
In the course of the administration of the estate of Ignacio Abuton, 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. The second wife was Teodora
Guinguing by whom he had four children. A will of the testator,
executed on November 25, 1914, was probated in court and allowed
on October 9, 1917; 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,
Teodora 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
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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.
Trial court's order was entered to the effect that the administrator
should include in the inventory of the estate of Agapito Abuton all of
the property of which the testator was possessed at the time of his
death.
ISSUE:
WON the trial court committed error. NO.
RULING:
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 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.
NOTES:
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.
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
RULE 84 GENERAL POWERS AND DUTIES OF
EXECUTORS AND ADMINISTRATORS
POWERS
WILSON VS REAR
FACTS: July 14, 1925, Charles C. Rear was murdered on his
plantation situated in the interior of the Province of Cotabato. Wilson
qualified as special administrator of the estate on November 17,1925.
Later, the property of the estate was appraised at P20,800, of which
the commissioners filed an inventory and report, which was also
signed by Wilson. January 4,1927, the commisioners made and filed
a report of claims against the estate, but by reasons of the fact that it
was claimed and alleged that the administrator did not have any funds
to pay, on March 30, 1927, the court ordered the administrator to sell
a portion of the property. April 26, 1927, and with the consent of the
heirs, a petition was made for authority to sell, under sealed proposal,
all the property of the estate, with a view of closing the
administration. October 10,1927, the court granted this petition, and
after due notice, the public sale took place, and the property was sold
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to Wm. Mannion for P7,600. April 26,1927, Wilson submitted a
report covering his administration to that date, which was approved
and later set aside on motion of the heirs of the deceased. March 23,
1928, Wilson filed his final account which later was amended on June
20,1928, to which the heirs made numerous and specific objections,
and after a hearing, the court approved the account as filed.
ISSUE:
WON Wilson, as special administrator and as administrator, was
neglectful and imprudent and he committed waste thereby making
him liable. YES.
RULING:
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.
Wilson was appointed and qualified as administrator, and the law
imposed upon him legal duties and obligations, among which was to
handle the estate in a business-like manner, marshal its assets, and
close the estate without any unreasonable or unnecessary delay. He
was not appointed to act for or on behalf of the creditors, or to
represent the interests of the heirs only. He should have administered
the affairs of the estate for the use and benefit alike of all interested
persons, as any prudent business man would handle his own personal
business. When appointed, it is the legal duty of the administrator to
administer, settle, and close the administration in the ordinary course
of business, without any unnecessary delay. Neither does an
administrator, in particular, without a specific showing or an order of
the court, have any legal right to continue the operation of the
business in which the deceased was engaged, or to eat up and absorb
the assets of the estate in the payment of operating expenses. Yet, in
the instant case, the administrator on his own volition and without
any authority or process of court continued the operation of the
plantation, and in the end, as shown by his own report, the estate,
which was appraised at P20,800, with actual debts of the deceased of
only P1,655,54 was all wiped out and lost, and left with a deficit of
P1,809.69.
The law does not impose upon an administrator a high degree of care
in the administration of an estate, but it does impose upon him
ordinary and usual care, for want of which he is personally liable. In
the instant case there were no complications of any kind and in the
usual and ordinary course of business, the administrator should have
wound up and settled the estate within eight months from the date of
his appointment.
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.
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
G.R. No. L-19265 May 29, 1964
MOISES SAN DIEGO, SR., petitioner, vs. ADELO NOMBRE
and PEDRO ESCANLAR,respondents.
FACTS: Respondent Adelo Nombre was the duly constituted judicial
administrator. He 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 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.
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. Escanlar was not notified of
such motion. Nombre, the deposed administrator, presented a written
opposition to the motion of Campillanos 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.
The Court 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.
ISSUE: Whether a judicial administrator can validly lease property
of the estate without prior judicial authority and approval. (WON the
contract of lease entered into by the former administrator Nombre,
and Pedro Escanlar on May 1, 1960 is valid). YES
HELD: 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.
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.
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, 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.
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).
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Lease has been considered an act of administration.
The Civil 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.
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.
CONFLICT OF INTEREST
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.
FACTS: Respondent Tan was appointed special administrator of the
estate of Carlos Villa Abrille. He filed an ex-parte petition for the
withdrawal of the sums from the PNB 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.
The respondent court granted the petition for withdrawal of the bank
deposits.
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 subdivision.
Respondent Tan was issued letters of administration by the
respondent court.
On the same day, 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.
Petitioner Natividad V. A. Jaroda moved to nullify the order allowing
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the withdrawal of the bank deposits, as well as the order approving
the power of attorney.
The respondent court denied the aforesaid motion.
ISSUES: (1) WON the order allowing the withdrawal of bank
deposits is valid.
(2) WON the order approving the power of attorney is valid.
NO TO BOTH
HELD: (1) In the first place, said withdrawal is foreign to the powers
and duties of a special administrator provided under Section 2 of Rule
80 of the Rules of 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.
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.
(2) The order 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. Without such notice, the order of the court
authorizing the sale is void.
It has been broadly stated that an administrator is not permitted to
deal with himself as an individual in any transaction concerning trust
property.
As a general rule, auto-contracts are permissible if not expressly
prohibited, 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";
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
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capacity.
The court below also failed to notice that, as alleged in the
administrator's petition, 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 empowering him to
represent the interest of the deceased in the management of the
subdivision, the administrator Tan came to be the agent or attorney-
in-fact of two different principals: the court and the heirs of the
deceased on the one hand, and the majority co-owners of the
subdivision on the other, in managing and disposing of the lots of the
subdivision. This dual agency of the respondent Tan rendered
him incapable of independent defense of the estate's interests
against those of the majority co-owners. It is highly undesirable,
if not improper, that a court officer and administrator, in dealing
with property under his administration, should have to look to
the wishes of strangers as well as to those of the court that
appointed him. A judicial administrator should be at all times
subject to the orders of the appointing Tribunal and of no one
else.
A.M. No. 2430 August 30, 1990
MAURO P. MANANQUIL, complainant, vs. ATTY.
CRISOSTOMO C. VILLEGAS, respondent.
FACTS: 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. A lease contract 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.
The formal partnership of HIJOS DE JOSE VILLEGAS was formed
amongst the heirs of Jose Villegas, of which respondent was a
member.
After the demise of Marcelo Pastrano, respondent was appointed
manager of HIJOS DE JOSE VILLEGAS by the majority of partners;
Renewals of the lease contract were executed between Felix Leong
and HIJOS DE JOSE VILLEGAS with respondent signing therein as
representative of the lessee.
The Solicitor General submitted his report 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.
ISSUE: WON 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. NO
HELD: 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.
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.
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
Just in case: ISSUE: WON respondent is subject to disciplinary
sanction for having, as counsel of record for the administrator
participated 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. YES
HELD: 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
(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.
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.
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.
RULE 85 ACCOUNTABILITY AND COMPENSATION OF
EXECUTORS AND ADMINISTRATORS
DUTY TO ACCOUNT
[G.R. No. L-9686. May 30, 1961.]
FELICISIMO C. JOSON, administrator-appellee, v. EDUARDO
JOSON, ET AL., heirs-appellants.
FACTS: Tomas Joson died leaving behind heirs and properties.
Upon his death, his will was presented to the Court by his son
Felicisimo Joson for probate. 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.
Accountings were filed the administrator which were ordered by the
court to be examined by the clerk of court but they have never been
approved. Eduardo Joson, one of the heirs, filed an opposition to all
the accounts filed by the administrator wherein 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.
In the meantime, 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. But, as the court was never informed of this extrajudicial
settlement either by the administrator or by the heirs, it issued an
order requiring the administrator to file an accounting of his
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
administration from 1949 to 1954, which accordingly the
administrator complied with by submitting an amended statement of
his accounts.
However, without said accounts having been heard or approved, the
administrator filed a motion to declare the proceeding closed and
terminated and to relieve him of his duties as such. After hearing, the
court issued on 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.
ISSUE: (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?
NO TO ALL
HELD: 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 a estate; and with the
proceeds of so much of the estate as is sold 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 courts 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 can 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 therefore 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 a
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
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
P132,600.00 which certainly cannot just be brushed aside by a mere
technicality.
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.
FACTS: In Special Proceeding involving the estate of the late
Dominador Tumang, 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. 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 appellee'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. Thereafter, the administratrix withdrew the aforementioned
petition.
During the hearing of the motion to withdraw petition, Magdalena
Tumang, filed a pleading alleging that the estate and inheritance taxes
had been fully paid; 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.
LOWER COURT: considers the motion to require administratrix to
render an accounting untenable, as the final accounting of the
administratrix was already approved.
ISSUE: 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. YES
HELD: 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 require 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." 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.
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. An
executor should account for all his receipts and disbursements since
his last accounting.
Just in case: ISSUE: Whether or not petitioners have waived their
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
right to demand such accounting. NO
HELD: 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, 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."
CHARGES AND EXPENSES OF THE ADMINISTRATOR
[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, v. PABLO M. SILVA,
movant-appellee.
Facts: 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.
Issue: W/N the court may fix an administrator’s or executor’s fee in
excess of the fees prescribed by Section 7 of Rule 86
W/N the court erred in cancelling Mr. Silva's Administrator bond few
months before the issuance of an order granting his resignation.
Ruling: Yes. It may be seen from the 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." (Rosenstock, v. Elser, 48
Phil. 709).
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 is 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, and this ought not to be lost sight of.
Although being a lawyer is by itself not a factor in the assessment of
an administrator’s fee, it should be otherwise when 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 the estate.
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 of 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
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
Leyson on March 2, 1945. Certainly it was already in his 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 course of his administration, and
neither was it included 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.
**note: SEC. 7. What expenses and fees allowed executor or
administrator? Not to charge for services as attorney. Compensation
provided by will controls unless renounced. An executor or
administrator shall be allowed the necessary expenses in the care,
management, and settlement of the estate, and for his services, four
pesos per day for the time actually and necessarily employed, or a
commission upon the value of so much of the estate as comes into his
possession and is finally disposed of by him in the payment of debts,
expenses, legacies, or distributive shares, or by delivery to heirs or
devises, of two per centum of the first five thousand pesos of such
value, one per centum of so much 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 thousand 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
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.
Facts: 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. The Court
dismissed Picard, as administrator and appointed the Philippine Trust
Co. in his place.After qualifying for the position, the latter, 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.
The Court, issued an order finding Picard, guilty of having disbursed
funds of the estate amounting to about P8,000.00, 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.
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
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
order the confiscation of the administrator's bond, without 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.
The Court denied appellant's motion and ordered the confiscation of
its bond.
Issue: W/N a probate court may ex proprio motu prosecute the
probate bond
W/N the court can order confiscation of the administrator's bond,
without prejudice or injury to creditors, legatees or heirs of the estate
of James R. Burt having been shown.
Ruling: Yes. 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.
Lastly, according to Section 11, Rule 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.
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.
Facts: Raymond Triviere passed away on 14 December 1987. On
January 1988, proceedings for the settlement of his intestate estate
were instituted by his widow, Amy Triviere, before the Makati RTC.
Atty. Enrique Syquia and Atty. William 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. As administrators, Atty. Syquia and Atty. Quasha
incurred expenses for the payment of real estate taxes, security
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
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 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, for their own behalf and for their respective
clients presenting certain allegations,the most important of which is
that there has been no payment of money from the estate for more
than 10 years already. As a consequence, they moved that the amount
of P1M be taken from the estate funds to be divided among the
parties (P450k as share of the children, P200k as attorney’s fees,
P150k as share of the widow, and P200k for the administrator).
LCN opposed the motion stating 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.
The appellate court modified the Order of the RTC by deleting the
awards of P450k and P150k in favor of the children and widow of the
deceased 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, 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.
Issue/s: W/N the deceased co-administrator Atty William Quasha
was properly substituted by atty. Zapata.
W/N Quasha Law Office may claim for Attorneys fees agaisnt the
estate of Triviere.
W/N the RTC Order dated 12 June 2003 was a distribution of the
residue of the estate
Ruling:
1st issue: No.
Nothing in the records, however, reveals that any one of the lawyers
of Quasha Law Office was indeed a substitute administrator for Atty.
Quasha upon his death.
The court has jurisdiction to appoint an administrator of an estate by
granting letters of administration to a person not otherwise
disqualified or incompetent to serve as such, following the procedure
laid down in Section 6, Rule 78 of the Rules of Court.
Corollary thereto, Section 2, Rule 82 of the Rules of Court provides
in clear and unequivocal terms the modes for replacing an
administrator of an estate upon the death of an administrator, to wit:
Section 2. Court may remove or accept resignation of executor or
administrator. Proceedings upon death, resignation, or removal. x x x.
When an executor or administrator dies, resigns, or is removed the
remaining executor or administrator may administer the trust alone,
unless the court grants letters to someone to act with him. If there is
no remaining executor or administrator, administration may be
granted to any suitable person.
The records of the case are wanting in evidence that Quasha Law
Office or any of its lawyers substituted Atty. Quasha as co-
administrator of the estate. None of the documents attached pertain to
the issuance of letters of administration to petitioner Quasha Law
Office or any of its lawyers at any time after the demise of Atty.
Quasha in 1996. This Court is thus inclined to give credence to
petitioner's contention that while it rendered legal services for the
settlement of the estate of Raymond Triviere since the time of Atty.
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
Quasha's death in 1996, it did not serve as co-administrator thereof,
granting that it was never even issued letters of administration.
Issue 2: No.
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 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.
Since they are not acting as co-administrator of the estate, 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.
**note: 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.
Issue 3: No.
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."
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU
In sum, although it is within the discretion of the RTC whether or not
to permit the advance distribution of the estate, its exercise of such
discretion should be qualified by the following: [1] only part of the
estate that is not affected by any pending controversy or appeal may
be the subject of advance distribution (Section 2, Rule 109); and [2]
the distributees must post a bond, fixed by the court, conditioned for
the payment of outstanding obligations of the estate (second
paragraph of Section 1, Rule 90). There is no showing that the RTC,
in awarding to the petitioner children and widow their shares in the
estate prior to the settlement of all its obligations, complied with
these two requirements or, at the very least, took the same into
consideration. Its Order of 12 June 2003 is completely silent on these
matters. It justified its grant of the award in a single sentence which
stated that petitioner children and widow had not yet received their
respective shares from the estate after all these years. Taking into
account that the claim of LCN against the estate of the late Raymond
Triviere allegedly amounted 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.
IMPROPER CHARGES
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.
Bautista Angelo, J.:
Facts: The CFI of Manila which had jurisdiction over the estate of
Margarita David, issued an order appointing appellant Carlos Moran
Sison as judicial administrator without compensation after filing a
bond. After entering into his duties as administrator, he filed an
accounting of his administration which included items as an expense
of administration the premiums he paid on his bond.
One of the heirs, herein appellee Narcisa Teodoro, objected to the
approval of the items. The court approved the report but disallowed
the items objected to on the ground that these cannot be considered as
expenses of administration. Moran Sison filed a motion for
reconsideration but was denied hence this appeal.
Issue: Whether or not an executor or judicial administrator can
validly charge the premiums on his bond as an expense of
administration against the estate
Ruling: NO.
The premiums paid by an executor or administrator serving without a
compensation for his bond cannot be charged against the estate.
Further Sec. 7 of Rule 86 of the Rules of Court does not authorize
the executor or administrator to charge to the estate the money spent
for the bond. As held in the case of Sulit v. Santos (56 Phil 626), the
position of an executor or administrator is one of trust. The law
safeguards the estates of deceased persons by making as a
requirement for qualification the ability to give a suitable bond. The
execution of said bond is therefore a condition precedent to
acceptance of the responsibilities of the trust.
Further, the giving of the bond is not a necessary expense in the care,
management, and settlement of the estate within the meaning of Sec.
680 of the Civil Code of Procedure, since such are the requirements
after the executor or administrator has already qualified for the office
and has entered the performance of his duties.
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.
FACTS: Panis was counsel for the administration of the estate of
deceased Yangco. Before the final settlement of accounts, he
presented a motion in the probate proceedings for the allowance of
attorney's fees in the sum of P15,000. The judge granted the motion
and allowed the fees claimed by Panis.
 BALLESTEROS-BATUGAN-CABANIT-CARLOS-MAGUDDATU

ISSUE: W/N the attorney’s fees should be paid from the funds of the
estate.
HELD: The services for which the fees are being sought were
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. 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.
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