Case number: 73

Case title: Philippine Commercial and Industrial Bank v. Escolin., 56 SCRA 266
Student name: Jel Arnett A. Evangelista

Doctrine:When the marriage is dissolved by the death of the husband or wife, the community
property shall be inventoried, administered and liquidated and the debts thereof paid, in the
testate or intestate proceedings of the deceased spouse.If both spouses died the conjugal
partnership shall be liquidated in the testate or intestate proceedings of either.

Facts: The Hodges lived in the Philippines for almost half a century and died leaving substantial
properties in Iloilo and in the US. The missus died 5 years before the husband, providing in her
will that her estate would go to him, upon his death, the remainder should pass to her siblings.

The court held that this testamentary provision, while probably ineffectual as a substitution under
the Civil Code, is not actually a substitution, but is a valid and simultaneous institution of heirs,
though the passing of title to the inheritance to the others (the siblings) was made to depend on
a resolutory condition (the husband’s death). Case was remanded to the trial court for the
determination of the proper application of the renvoi principle (conflict of laws between Philippines
and Texas law), and the proper distribution of Linnie’s, Charles’, and their conjugal estates.

Issue: How should the estate be settled.

Held:

It is true that the last sentence of this provision allows or permits the conjugal partnership of
spouses who are both deceased to be settled or liquidated in the testate or intestate proceedings
of either, but precisely because said sentence allows or permits that the liquidation be made in
either proceeding, it is a matter of sound judicial discretion in which one it should be made. After
all, the former rule referring to the administrator of the husband's estate in respect to such
liquidation was done away with by Act 3176, the pertinent provisions of which are now embodied
in the rule just cited.

Thus, it can be seen that at the time of the death of Hodges, there was already the pending judicial
settlement proceeding of the estate of Mrs. Hodges, and, more importantly, that the former was
the executor of the latter's will who had, as such, failed for more than five years to see to it that
the same was terminated earliest, which was not difficult to do, since from ought that appears in
the record, there were no serious obstacles on the way, the estate not being indebted and there
being no immediate heirs other than Hodges himself. Such dilatory or indifferent attitude could
only spell possible prejudice of his co-heirs, whose rights to inheritance depend entirely on the
existence of any remainder of Mrs. Hodges' share in the community properties, and who are now
faced with the pose of PCIB that there is no such remainder. Had Hodges secured as early as
possible the settlement of his wife's estate, this problem would not arisen. All things considered,
We are fully convinced that the interests of justice will be better served by not permitting or
allowing PCIB or any administrator of the estate of Hodges exclusive administration of all the
properties in question. We are of the considered opinion and so hold that what would be just and
proper is for both administrators of the two estates to act conjointly until after said estates have
been segregated from each other