G.R. No.

L-40517 January 31, 1984

LUZON SURETY COMPANY, INC.,

vs.
PASTOR T. QUEBRAR and FRANCISCO KILAYKO,

JASON A. AMPONG

DOCTRINE

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.

FACTS

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 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.

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.

ISSUE

Whether or not the surety is liable under administrator’s bond

RULING

Yes. 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, it follows that the
administrator is still duty bound to respect the indemnity agreements entered into by him
in consideration of the suretyship.
G.R. No. L-4090             January 31, 1952

INTESTATE ESTATE OF THE DECEASED HONOFRE LEYSON, deceased.

VICTORIO L. RODRIGUEZ, and MARGARITA LEYSON LAURENTE,
vs.
PABLO M. SILVA,

JASON A. AMPONG

DOCTRINE

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."

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

Whether or not the court may fix an administrator's or executor's fee in excess of the
fees prescribed by section 7 of Rule 86

RULING

Yes. It will be seen from the aforementioned 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."
G.R. No. L-6306             May 26, 1954
FORTUNATO HALILI,
vs.
MARIA LLORET and RICARDO GONZALES LLORET, administrator of the
intestate estate of FRANCISCO A. GONZALES,

JASON A. AMPONG

DOCTRINE

The law prohibits that a land subject of administration be sold to its judicial
administrator.

FACTS

The six parcels of land subject of the present action were owned by pro-indiviso by
Maria Lloret and the estate of Francisco A. Gonzales, of which Ricardo Gonzales Lloret
is the judicial administrator. After preparing the documents, Sauco gave an account to
the plaintiff of the result of his negotiations, and having signified his conformity thereto,
plaintiff gave to Sauco two checks one for the sum of P100,000 drawn against the
Philippine National Bank in favor of Maria Lloret(Exhibit B), and another for the same
amount drawn against the Philippine Trust Co. in favor of Ricardo Gonzales Lloret.

On the occasion of a visit which plaintiff to Sauco in Malolos, the latter handed over to
him the receipt Exhibit A with the request that, in view of his sickness, he take charge of
getting the deed of sale from Gonzales Lloret. Plaintiff tried to do so, but when he
interviewed Gonzales Lloret, the latter refused to give him the documents on the pretext
that he did not deal with him but with Sauco intimating that he would just wait until the
latter recover from his sickness.

ISSUE

Whether or not the land subject to administration be sold

RULING

No. The law prohibits that a land subject of administration be sold to its judicial
administrator.
G.R. No. L-349            September 30, 1948
Intestate estate of the late Eulalio Ilagan Bisig; Santos Ilagan, administrator.
ESTEFANIA R. VDA. DE CRUZ,
vs.
JESUS ILAGAN, ET AL.,

JASON A. AMPONG

DOCTRINE

A sale which the representative makes, with the written assent of all legatees or
distributees of the estate, is in effect their sale as well as his, and, if made in good faith,
ought to bind strongly provided that all the persons assenting are sui juris.

FACTS

The administrator, one of the children and heirs of the decedent, executed "an absolute
deed of sale" over two parcels of land for P18,000 in favor of Severo Cruz and his wife.
On September 18, the administrator submitted the deed to the court with a
corresponding motion bearing the same date as the deed of conveyance for approval.
All the other children and heirs of the decedent, four in number and all of lawful age,
gave their approval and conformity to the sale and to the administrator's motion by
signing with appropriate expressions both papers.

On December 18, 1943, the heirs of the deceased, except Santos Ilagan, the
administrator, filed a written opposition to the sale. On June 30, 1944, Judge Quintin
Paredes, Jr., sustained the opposition holding that the sale was "improper." Judge
Paredes said "that the sale was, in effect, primarily, intended to pay the mortgage debt,
and to sell the aforesaid property preferentially to the mortgagee.

ISSUE

Whether or not the heirs are estopped from blocking the sale

RULING

Yes. The heirs being estopped from blocking the sale, and the opposition disregarded,
the court had before it an agreement, not contrary to law, entered into by the only
parties interested in the estate regarding the disposition of the estate's assets. Viewed
in this light, the court had no discretion to disapprove the agreement. It has been held
that, when there are no creditors or all the debts have been paid, "the heirs have the
right to ask the probate court to turn over to them both real and personal property
without division; and where such request unanimous, it is the duty of the court to comply
with it, and there is nothing in section 753 of the Code of Civil Procedure (now section 1,
Rule 9, of the Rules of Court) which prohibits it.
G.R. No. L-16584; November 17, 1921
Eusebio Godoy vs Guillermo Orellano et al.

JASON A. AMPONG

DOCTRINE

A sale and conveyance by executors without an order of the probate court, under a will
devising property to them in trust, but not authorizing any sale of the realty, otherwise
than by a direction to pay the debts of the testator, is void, and passes no title to the
purchase.

FACTS

On January 13, 1919, a document was executed by appellant Felisa Pangilinan, in the
amount of P1,000, for an option to buy a dredge for the sum of P10,000. The dredge
was the common property of the vendor and the brothers Demetrio, Jose, Guillermo,
Alfredo, and Paz, all surnamed Orellano; The condition was that Godoy was to pay the
whole price within twenty days; and that said option was in accordance with the power
of attorney executed by Pangilinan's co-owners who reserved the right to ratify the
option contract. The co-owners did not ratify the option contract. When the appellee
was ready to pay the price, the appellant failed to deliver the dredge. The appellee then
brought a suit in the Court of First Instance against the vendor as well as the co-owners,
praying that they be ordered to deliver the dredge.
The defendants set up as a special defense that the dredge in question was the
property of the intestate estate of Julio Orellano, with pending administration
proceedings in the Court of Instance of Manila. It was under the administration of Felisa
Pangilinan and that the petitioner knew that the dredge was under judicial control and
could not be disposed of without judicial authority. The court rendered judgment,
ordering the defendants to pay Godoy the sum of P2,000 with legal interest.

ISSUE

Whether or not the administratrix has the authority to sell, or contract to sell, any
property belonging to the estate of the deceased.

RULING

No. In the sale of a property belonging to an intestate estate, it is necessary to comply

with the provisions of sections 717, 718, 722 of the Code of Civil Procedure. The said
sections prescribed the proceedings to be had before an administrator of an intestate or
testate estate may sell personal or real property and also the conditions under which the
personal or real property pertaining to an estate may be sold or disposed of by the
administrator. Unless compliance is had with the provisions of these sections, the sale
of the aforesaid dredge by the administratrix, or her promise to sell it is null and void.
Under the law, the court has exclusive jurisdiction to authorize the sale of properties like
the one under consideration and the power of attorney executed by the heirs of Orellano
in favor of the administratrix, without authority of court, has no legal effect, and this is
the more so, since two of the said heirs are under age, and the others did not ratify the
option contract, as provided in the aforesaid power of attorney.