PCIB vs Escolar

Facts:
 Linnie and Charles Hodges are spouses.
 Linnie died and left a will which states that:
1. All funeral expenses and just debts are to be paid out of the estate.
2. CN Hodges will get the remaining properties
3. CN Hodges will be the executor of her remaining estate
4. If CN Hodges will die, remainding properties will be given to her bro and sis
5. If Bro and sis died ahead of CN, their share will be given to their heirs.
 Motions were filed by CN in lieu of the will of Linnie:
1. Motion to be appt as executor – approved by court
2. Motion to sale, convey lease and mortgage properties – approved by court
3. Motion to include Roy (1 of Linnie’s brother) to the heirs of Linnie – approved
 CN Hodges died, thereby, Avelina Magno (trusted employee of sps), was appointed as
administratix of Linnie’s estate.
 The problem: they cannot properly manage the remaining estate of Linnie because
her will as well as CN’s will was kept on a vault or iron safe.
 In this case, since there are 2 persons who died and left a will, there are two estate
proceedings, therefore, having 2 administrators for each estate. Who are they?
 Magno (trusted employee), was appt as administrator for Linnie
 Harold as co-special admin for CN Hodges, replaced by Joe Hodges (CN’s next of kin) with Atty
Mirasol (supposedly meant to replace Magno and Davies), but was instead replaced by PCIB
ALONE!
 There are 2 probate proceedings under a sort of modus operandi.
 PCIB used to secure at the beginning the conformity to and signature of Magno in transactions
it wanted to enter into and submitted the same to the court for approval as their joint acts.
 The Problem! differences arose.
 Each of them began acting separately and independently of each other with apparent sanction
of the trial court.
1. PCIB had its own lawyers whom it contracted and paid handsomely, conducted the business of
the estate independently of Magno and otherwise acted as if all the properties
appearing in the name of Charles Newton Hodges belonged solely and only to his
estate, to the exclusion of the brothers and sisters of Mrs. Hodges, without considering
whether or not in fact any of said properties corresponded to the portion of the conjugal
partnership pertaining to the estate of Mrs. Hodges.

2. Magno:
-made her own expenditures
-hired her own lawyers, on the premise that there is such an estate of Mrs. Hodges, and dealth
with some of the properties
-appearing in the name of Hodges, on the assumption that they actually correspond to
the estate of Mrs. Hodges.
 ALL OF THESE ACTION ARE APPROVED BY THE TRIAL COURT.

 Eventually, the differences reached a point wherein Magno, who was more cognizant than
anyone else about the ins and outs of the businesses and properties of the deceased spouses
because of her long and intimate association with them, made it difficult for PCIB to perform
normally its functions as administrator separately from her.
 Thus, legal complications arose and the present judicial controversies came about.
 In the court’s approval on the statement of account of Hodges, PCIB holds to the view that the
estate of Mrs. Hodges has already been in effect closed with the virtual adjudication in the
mentioned orders of her whole estate to Hodges, and that, therefore, Magno had already
ceased since then to have any estate to administer and the brothers and sisters of Mrs. Hodges
have no interests whatsoever in the estate left by Hodges.
  What is the cause of action of PCIB: PCIB would like to set aside court’s order
appointing Magno as administrator.

Contention of PCIB:
The provision in Mrs. Hodges' will instituting her brothers and sisters in the manner therein
specified is in the nature of a testamentary substitution, but inasmuch as the purported
substitution is not, in its view, in accordance with the pertinent provisions of the Civil Code, it
is ineffective and may not be enforced.

 It is further contended that, in any event, inasmuch as the Hodges spouses were
both residents of the Philippines, following the decision of this Court in Aznar vs.
Garcia, or the case of Christensen, 7 SCRA 95, the estate left by Mrs. Hodges could
not be more than one-half of her share of the conjugal partnership, notwithstanding
the fact that she was citizen of Texas, U.S.A., in accordance with Article 16 in
relation to Articles 900 and 872 of the Civil Code.

Issue: WON the estate of Linnie constitutes testamentary substitution?

 We overrule PCIB's contention that the provision in Mrs. Hodges' will in favor of her brothers
and sisters constitutes ineffective hereditary substitutions. But neither are We sustaining, on
the other hand, Magno's pose that it gave Hodges only a lifetime usufruct.
 We hold that by said provision, Mrs. Hodges simultaneously instituted her brothers and sisters
as co-heirs with her husband, with the condition, however, that the latter would have complete
rights of dominion over the whole estate during his lifetime and what would go to the former
would be only the remainder thereof at the time of Hodges' death.
 In other words, whereas they are not to inherit only in case of default of Hodges, on the other
hand, Hodges was not obliged to preserve anything for them.
 Clearly then, the essential elements of testamentary substitution are absent; the
provision in question is a simple case of conditional simultaneous institution of heirs, whereby
the institution of Hodges is subject to a partial resolutory condition the operative contingency
of which is coincidental with that of the suspensive condition of the institution of his brothers
and sisters-in-law, which manner of institution is not prohibited by law.
 Estate of Mrs. Hodges inherited by her brothers and sisters could be more than just stated, but
this would depend on

(1) whether upon the proper application of the principle of renvoi in relation to Article 16 of the
Civil Code and the pertinent laws of Texas, it will appear that Hodges had no legitime as
contended by Magno

(2) whether or not it can be held that Hodges had legally and effectively renounced his
inheritance from his wife.
Under Article 16 of the Civil Code and applying renvoi the laws of the Philippines are the ones
ultimately applicable, such one-fourth share would be her free disposable portion, taking into
account already the legitime of her husband under Article 900 of the Civil Code.

The foregoing considerations leave the Court with no alternative than to conclude that in predicating
its orders on the assumption, albeit unexpressed therein, that there is an estate of Mrs.
Hodges to be distributed among her brothers and sisters and that respondent Magno is the
legal administratrix thereof, the trial court acted correctly and within its jurisdiction.

Accordingly, the petition for certiorari and prohibition has to be denied. The Court feels however, that
pending the liquidation of the conjugal partnership and the determination of the specific properties
constituting her estate, the two administrators should act conjointly as ordered in the Court's resolution
of September 8, 1972 and as further clarified in the dispositive portion of its decision.