[1] G.R. No.
118671             January 29, 1996 post a bond or make such provisions as to meet the said tax obligation in proportion
THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor,
petitioner,vs.THE COURT OF APPEALS (Former Special Sixth Division),
MARIA PILAR RUIZ-MONTES, MARIA CATHRYN RUIZ, CANDICE
ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING JUDGE
OF THE REGIONAL TRIAL COURT OF PASIG, respondents.
Succession; Support; Allowances for support under Section 3 of Rule 83
should not be limited to the “minor or incapacitated” children of the deceased—the
law is rooted on the fact that the right and duty to support, especially the right to
education, subsist even beyond the age of majority.—It is settled that allowances for
support under Section 3 of Rule 83 should not be limited to the “minor or
incapacitated” children of the deceased. Article 188 of the Civil Code of the
Philippines, the substantive law in force at the time of the testator’s death, provides
that during the liquidation of the conjugal partnership, the deceased’s legitimate
spouse and children, regardless of their age, civil status or gainful employment, are
entitled to provisional support from the funds of the estate. The law is rooted on the
fact that the right and duty to support, especially the right to education, subsist even
beyond the age of majority.
Same; Same; Grandchildren are not entitled to provisional support from the
funds of the decedent’s estate.—Be that as it may, grandchildren are not entitled to
provisional support from the funds of the decedent’s estate. The law clearly limits the
allowance to “widow and children” and does not extend it to the deceased’s
grandchildren, regardless of their minority or incapacity. It was error, therefore, for
the appellate court to sustain the probate court’s order granting an allowance to the
grandchildren of the testator pending settlement of his estate.
Same; Settlement of Estates; Conditions before distribution of estate
properties can be made.—In settlement of estate proceedings, the distribution of the
estate properties can only be made: (1) after all the debts, funeral charges, expenses
of administration, allowance to the widow, and estate tax have been paid; or (2)
before payment of said obligations only if the distributees or any of them gives a
bond in a sum fixed by the court conditioned upon the payment of said obligations
within such time as the court directs, or when provision is made to meet those
obligations.
Same; Same; Taxation; The estate tax is one of those obligations that must be
paid before distribution of the estate, and if not paid, the rule requires that the
distributees post a bond or make such provisions as to meet the said tax obligation in
proportion to their respective shares in the inheritance.—In the case at bar, the
probate court ordered the release of the titles to the Valle Verde property and the
Blue Ridge apartments to the private respondents after the lapse of six months from
the date of first publication of the notice to creditors. The questioned order speaks of
“notice” to creditors, not payment of debts and obligations. Hilario Ruiz allegedly
left no debts when he died but the taxes on his estate had not hitherto been paid,
much less ascertained. The estate tax is one of those obligations that must be paid
before distribution of the estate. If not yet paid, the rule requires that the distributees
₯Special Proceedings (Rule84- Rule 85)
to their respective shares in the inheritance. Notably, at the time the order was issued
the properties of the estate had not yet been inventoried and appraised.
Same; Same; Wills; Probate of Wills; The probate of a will is conclusive as to
its due execution and extrinsic validity and settles only the question of whether the
testator, being of sound mind, freely executed it in accordance with the formalities
prescribed by law—questions as to intrinsic validity may still be raised even after the
will has been authenticated.—It was also too early in the day for the probate court to
order the release of the titles six months after admitting the will to probate. The
probate of a will is conclusive as to its due execution and extrinsic validity and
settles only the question of whether the testator, being of sound mind, freely
executed it in accordance with the formalities prescribed by law. Questions as to the
intrinsic validity and efficacy of the provisions of the will, the legality of any devise
or legacy may be raised even after the will has been authenticated.
Same; Same; Same; Same; Executors and Administrators; The right of an
executor or administrator to the possession and management of the real and
personal properties of the deceased is not absolute and can only be exercised “so
long as it is necessary for the payment of the debts and expenses of
administration.”—Still and all, petitioner cannot correctly claim that the assailed
order deprived him of his right to take possession of all the real and personal
properties of the estate. The right of an executor or administrator to the possession
and management of the real and personal properties of the deceased is not absolute
and can only be exercised “so long as it is necessary for the payment of the debts and
expenses of administration.”
Same; Same; Same; Same; Same; Trusts; An heir’s right of ownership over the
properties of the decedent is merely inchoate as long as the estate has not been fully
settled and partitioned; An executor is a mere trustee of the estate—the funds of the
estate in his hands are trust funds and he is held to the duties and responsibilities of
a trustee of the highest order.—Petitioner must be reminded that his right of
ownership over the properties of his father is merely inchoate as long as the estate
has not been fully settled and partitioned. As executor, he is a mere trustee of his
father’s estate. The funds of the estate in his hands are trust funds and he is held to
the duties and responsibilities of a trustee of the highest order. He cannot unilaterally
assign to himself and possess all his parents’ properties and the fruits thereof without
first submitting an inventory and appraisal of all real and personal properties of the
deceased, rendering a true account of his administration, the expenses of
administration, the amount of the obligations and estate tax, all of which are subject
to a determination by the court as to their veracity, propriety and justness
DECISION
PUNO, J.:
This petition for review on certiorari seeks to annul and set aside the decision
dated November 10, 1994 and the resolution dated January 5, 1995 of the
Court of Appeals in CA-G.R. SP No. 33045.
Page 1 of 23
The facts show that on June 27, 1987, Hilario M. Ruiz 1 executed a
holographic will naming as his heirs his only son, Edmond Ruiz, his adopted
daughter, private respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn, Candice Albertine and
Maria Angeline, all children of Edmond Ruiz. The testator bequeathed to his
heirs substantial cash, personal and real properties and named Edmond Ruiz
executor of his estate.2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash
component of his estate was distributed among Edmond Ruiz and private
respondents in accordance with the decedent's will. For unbeknown reasons,
Edmond, the named executor, did not take any action for the probate of his
father's holographic will.
On June 29, 1992, four years after the testator's death, it was private
respondent Maria Pilar Ruiz Montes who filed before the Regional Trial
Court, Branch 156, Pasig, a petition for the probate and approval of Hilario
Ruiz's will and for the issuance of letters testamentary to Edmond Ruiz, 3
Surprisingly, Edmond opposed the petition on the ground that the will was
executed under undue influence.
On November 2, 1992, one of the properties of the estate — the house and
lot at No. 2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed
to Maria Cathryn, Candice Albertine and Maria Angeline 4 — was leased out
by Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered Edmond to deposit with the
Branch Clerk of Court the rental deposit and payments totalling P540,000.00
representing the one-year lease of the Valle Verde property. In compliance,
on January 25, 1993, Edmond turned over the amount of P348,583.56,
representing the balance of the rent after deducting P191,416.14 for repair
and maintenance expenses on the estate.5
In March 1993, Edmond moved for the release of P50,000.00 to pay the real
estate taxes on the real properties of the estate. The probate court approved
the release of P7,722.00.6
On May 14, 1993, Edmond withdrew his opposition to the probate of the will.
Consequently, the probate court, on May 18, 1993, admitted the will to
probate and ordered the issuance of letters testamentary to Edmond
conditioned upon the filing of a bond in the amount of P50,000.00. The letters
testamentary were issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz
as executor, filed an "Ex-Parte Motion for Release of Funds." It prayed for the
₯Special Proceedings (Rule84- Rule 85)
release of the rent payments deposited with the Branch Clerk of Court.
Respondent Montes opposed the motion and concurrently filed a "Motion for
Release of Funds to Certain Heirs" and "Motion for Issuance of Certificate of
Allowance of Probate Will." Montes prayed for the release of the said rent
payments to Maria Cathryn, Candice Albertine and Maria Angeline and for
the distribution of the testator's properties, specifically the Valle Verde
property and the Blue Ridge apartments, in accordance with the provisions of
the holographic will.
On August 26, 1993, the probate court denied petitioner's motion for release
of funds but granted respondent Montes' motion in view of petitioner's lack of
opposition. It thus ordered the release of the rent payments to the decedent's
three granddaughters. It further ordered the delivery of the titles to and
possession of the properties bequeathed to the three granddaughters and
respondent Montes upon the filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he actually filed his
opposition to respondent Montes's motion for release of rent payments which
opposition the court failed to consider. Petitioner likewise reiterated his
previous motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he was
withdrawing his motion for release of funds in view of the fact that the lease
contract over the Valle Verde property had been renewed for another year. 7
Despite petitioner's manifestation, the probate court, on December 22, 1993,
ordered the release of the funds to Edmond but only "such amount as may
be necessary to cover the expenses of administration and allowances for
support" of the testator's three granddaughters subject to collation and
deductible from their share in the inheritance. The court, however, held in
abeyance the release of the titles to respondent Montes and the three
granddaughters until the lapse of six months from the date of first publication
of the notice to creditors.8 The court stated thus:
xxx       xxx       xxx
After consideration of the arguments set forth thereon by the parties
the court resolves to allow Administrator Edmond M. Ruiz to take
possession of the rental payments deposited with the Clerk of Court,
Pasig Regional Trial Court, but only such amount as may be
necessary to cover the expenses of administration and allowances
for support of Maria Cathryn Veronique, Candice Albertine and Maria
Angeli, which are subject to collation and deductible from the share
in the inheritance of said heirs and insofar as they exceed the fruits
or rents pertaining to them.
Page 2 of 23
 As to the release of the titles bequeathed to petitioner Maria Pilar
Ruiz-Montes and the above-named heirs, the same is hereby
reconsidered and held in abeyance until the lapse of six (6) months
from the date of first publication of Notice to Creditors.
WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to
submit an accounting of the expenses necessary for administration
including provisions for the support Of Maria Cathryn Veronique
Ruiz, Candice Albertine Ruiz and Maria Angeli Ruiz before the
amount required can be withdrawn and cause the publication of the
notice to creditors with reasonable dispatch.9
Petitioner assailed this order before the Court of Appeals. Finding no grave
abuse of discretion on the part of respondent judge, the appellate court
dismissed the petition and sustained the probate court's order in a decision
dated November 10, 199410 and a resolution dated January 5, 1995.11
Hence, this petition.
Petitioner claims that:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN AFFIRMING AND CONFIRMING
THE ORDER OF RESPONDENT REGIONAL TRIAL COURT OF
PASIG, BRANCH 156, DATED DECEMBER 22, 1993, WHICH
WHEN GIVEN DUE COURSE AND IS EFFECTED WOULD: (1)
DISALLOW THE EXECUTOR/ADMINISTRATOR OF THE ESTATE
OF THE LATE HILARIO M. RUIZ TO TAKE POSSESSION OF ALL
THE REAL AND PERSONAL PROPERTIES OF THE ESTATE; (2)
GRANT SUPPORT, DURING THE PENDENCY OF THE
SETTLEMENT OF AN ESTATE, TO CERTAIN PERSONS NOT
ENTITLED THERETO; AND (3) PREMATURELY PARTITION AND
DISTRIBUTE THE ESTATE PURSUANT TO THE PROVISIONS OF
THE HOLOGRAPHIC WILL EVEN BEFORE ITS INTRINSIC
VALIDITY HAS BEEN DETERMINED, AND DESPITE THE
EXISTENCE OF UNPAID DEBTS AND OBLIGATIONS OF THE
ESTATE.12
The issue for resolution is whether the probate court, after admitting the will
to probate but before payment of the estate's debts and obligations, has the
authority: (1) to grant an allowance from the funds of the estate for the
support of the testator's grandchildren; (2) to order the release of the titles to
certain heirs; and (3) to grant possession of all properties of the estate to the
executor of the will.
₯Special Proceedings (Rule84- Rule 85)
On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of
Court provides:
Sec. 3. Allowance to widow and family. — The widow and minor or
incapacitated children of a deceased person, during the settlement of
the estate, shall receive therefrom under the direction of the court,
such allowance as are provided by law.
Petitioner alleges that this provision only gives the widow and the minor or
incapacitated children of the deceased the right to receive allowances for
support during the settlement of estate proceedings. He contends that the
testator's three granddaughters do not qualify for an allowance because they
are not incapacitated and are no longer minors but of legal age, married and
gainfully employed. In addition, the provision expressly states "children" of
the deceased which excludes the latter's grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should not
be limited to the "minor or incapacitated" children of the deceased. Article
18813 of the Civil Code of the Philippines, the substantive law in force at the
time of the testator's death, provides that during the liquidation of the
conjugal partnership, the deceased's legitimate spouse and children,
regardless of their age, civil status or gainful employment, are entitled to
provisional support from the funds of the estate. 14 The law is rooted on the
fact that the right and duty to support, especially the right to education,
subsist even beyond the age of majority.15
Be that as it may, grandchildren are not entitled to provisional support from
the funds of the decedent's estate. The law clearly limits the allowance to
"widow and children" and does not extend it to the deceased's grandchildren,
regardless of their minority or incapacity.16 It was error, therefore, for the
appellate court to sustain the probate court's order granting an allowance to
the grandchildren of the testator pending settlement of his estate.
Respondent courts also erred when they ordered the release of the titles of
the bequeathed properties to private respondents six months after the date of
first publication of notice to creditors. An order releasing titles to properties of
the estate amounts to an advance distribution of the estate which is allowed
only under the following conditions:
Sec. 2. Advance distribution in special proceedings. —
Nothwithstanding 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
Page 3 of 23
 appeal be distributed among the heirs or legatees, upon compliance
with the conditions set forth in Rule 90 of these Rules. 17
And Rule 90 provides that:
Sec. 1. When order for distribution of residue made. — When the
debts, funeral charges, and expenses of administration the
allowance to the widow, and inheritance tax if any, chargeable to the
estate in accordance with law, have been paid, the court, on the
application of the executor or administrator, or of a person interested
in the estate, and after hearing upon notice shall assign the residue
of the estate to the persons entitled to the same, naming them and
the proportions or parts, to which each is entitled, and such persons
may demand and recover their respective shares from the executor
or administrator, or any other person having the same in his
possession. If there is a controversy before the court as to who are
the lawful heirs of the deceased person or as to the distributive
shares to which each person is entitled under the law, the
controversy shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations
above-mentioned has been made or provided for, unless the
distributees, or any of them, give a bond, in a sum to be fixed by the
court, conditioned for the payment of said obligations within such
time as the court directs.18
In settlement of estate proceedings, the distribution of the estate properties
can only be made: (1) after all the debts, funeral charges, expenses of
administration, allowance to the widow, and estate tax have been paid; or (2)
before payment of said obligations only if the distributees or any of them
gives a bond in a sum fixed by the court conditioned upon the payment of
said obligations within such time as the court directs, or when provision is
made to meet those obligations.19
In the case at bar, the probate court ordered the release of the titles to the
Valle Verde property and the Blue Ridge apartments to the private
respondents after the lapse of six months from the date of first publication of
the notice to creditors. The questioned order speaks of "notice" to creditors,
not payment of debts and obligations. Hilario Ruiz allegedly left no debts
when he died but the taxes on his estate had not hitherto been paid, much
less ascertained. The estate tax is one of those obligations that must be paid
before distribution of the estate. If not yet paid, the rule requires that the
distributees post a bond or make such provisions as to meet the said tax
obligation in proportion to their respective shares in the inheritance. 20 Notably,
₯Special Proceedings (Rule84- Rule 85)
at the time the order was issued the properties of the estate had not yet been
inventoried and appraised.
It was also too early in the day for the probate court to order the release of
the titles six months after admitting the will to probate. The probate of a will is
conclusive as to its due execution and extrinsic validity 21 and settles only the
question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law. 22 Questions as to the
intrinsic validity and efficacy of the provisions of the will, the legality of any
devise or legacy may be raised even after the will has been authenticated. 23
The intrinsic validity of Hilario's holographic will was controverted by
petitioner before the probate court in his Reply to Montes' Opposition to his
motion for release of funds24 and his motion for reconsideration of the August
26, 1993 order of the said court. 25 Therein, petitioner assailed the distributive
shares of the devisees and legatees inasmuch as his father's will included
the estate of his mother and allegedly impaired his legitime as an intestate
heir of his mother. The Rules provide that if there is a controversy as to who
are the lawful heirs of the decedent and their distributive shares in his estate,
the probate court shall proceed to hear and decide the same as in ordinary
cases.26
Still and all, petitioner cannot correctly claim that the assailed order deprived
him of his right to take possession of all the real and personal properties of
the estate. The right of an executor or administrator to the possession and
management of the real and personal properties of the deceased is not
absolute and can only be exercised "so long as it is necessary for the
payment of the debts and expenses of administration," 27 Section 3 of Rule 84
of the Revised Rules of Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts,
and to administer estate not willed. — An executor or administrator
shall have 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 expenses for
administration.28
When petitioner moved for further release of the funds deposited with the
clerk of court, he had been previously granted by the probate court certain
amounts for repair and maintenance expenses on the properties of the
estate, and payment of the real estate taxes thereon. But petitioner moved
again for the release of additional funds for the same reasons he previously
cited. It was correct for the probate court to require him to submit an
accounting of the necessary expenses for administration before releasing
any further money in his favor.
Page 4 of 23
It was relevantly noted by the probate court that petitioner had deposited with
it only a portion of the one-year rental income from the Valle Verde property.
Petitioner did not deposit its succeeding rents after renewal of the lease. 29
Neither did he render an accounting of such funds.

Petitioner must be reminded that his right of ownership over the properties of
his father is merely inchoate as long as the estate has not been fully settled
and partitioned.30 As executor, he is a mere trustee of his father's estate. The
funds of the estate in his hands are trust funds and he is held to the duties
and responsibilities of a trustee of the highest order. 31 He cannot unilaterally
assign to himself and possess all his parents' properties and the fruits thereof
without first submitting an inventory and appraisal of all real and personal
properties of the deceased, rendering a true account of his administration,
the expenses of administration, the amount of the obligations and estate tax,
all of which are subject to a determination by the court as to their veracity,
propriety and justness.32

IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in

CA-G.R. SP No. 33045 affirming the order dated December 22, 1993 of the
Regional Trial Court, Branch 156, Pasig in SP Proc. No. 10259 are affirmed
with the modification that those portions of the order granting an allowance to
the testator's grandchildren and ordering the release of the titles to the
private respondents upon notice to creditors are annulled and set aside.

Respondent judge is ordered to proceed with dispatch in the proceedings

below.

SO ORDERED.

₯Special Proceedings (Rule84- Rule 85) Page 5 of 23

[2] A.M. No. 2430 August 30, 1990
MAURO P. MANANQUIL, complainant, vs. ATTY. CRISOSTOMO C.
VILLEGAS, respondent.
Special Proceedings; Administrator may exercise acts of administration
without special authority from the court.—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.
Same; Attorneys; Participation of lawyers in the execution of prohibited
contracts constitutes breach of professional ethics.—Thus the law makes the
prohibition absolute and permanent [Rubias v. Batiller, supra]. And in view of
Canon 1 of the new Code of Professional Responsibility and Sections 3 & 27 of Rule
138 of the Revised Rules of Court, whereby lawyers are duty-bound to obey and
uphold the laws of the land, participation in the execution of the prohibited contracts
such as those referred to in Articles 1491 and 1646 of the new Civil Code has been
held to constitute breach of professional ethics on the part of the lawyer for which
disciplinary action may be brought against him [See Bautista v. Gonzalez, Adm.
Matter No. 1625, February 12, 1990]. Accordingly, the Court must reiterate the rule
that the claim of good faith is no defense to a lawyer who has failed to adhere
faithfully to the legal disqualifications imposed upon him, designed to protect the
interests of his client [See In re Ruste, 70 Phil. 243 (1940); Also, Severino v.
Severino, 44 Phil. 343 (1923)].
Same; Same; Suspension; Nature of the acts of misconduct committed by
respondent, sufficient ground to suspend him from the practice of law.—Considering
thus the nature of the acts of misconduct committed by respondent, and the facts and
circumstances of the case, the Court finds sufficient grounds to suspend respondent
from the practice of law for a period of three (3) months.
RESOLUTION
CORTES, J.:
In a verified complaint for disbarment dated July 5, 1982, Mauro P.
Mananquil charged respondent Atty. Crisostomo C. Villegas with gross
misconduct or malpractice committed while acting as counsel of record of
one Felix Leong in the latter's capacity as administrator of the Testate Estate
of the late Felomina Zerna in Special Proceedings No. 460 before then Court
₯Special Proceedings (Rule84- Rule 85)
of First Instance of Negros Occidental. The complainant was appointed
special administrator after Felix Leong died.
In compliance with a resolution of this Court, respondent filed his comment to
the complaint on January 20, 1983. After complainant filed his reply, the
Court resolved to refer the case to the Solicitor General for investigation,
report and recommendation.
In a hearing conducted on May 15, 1985 by the investigating officer assigned
to the case, counsel for the complainant proposed that the case be
considered on the basis of position papers and memoranda to be submitted
by the parties. Respondent agreed. Thus, the investigating officer required
the parties to submit their respective position papers and memoranda, with
the understanding that with or without the memoranda, the case will be
deemed submitted for resolution after the expiration of 30 days. In
compliance, both parties submitted their respective position papers; but no
memorandum was filed by either party. Thereafter, the case was deemed
submitted.
In the pleadings submitted before the Court and the Office of the Solicitor
General, complainant alleges that over a period of 20 years, respondent
allowed lease contracts to be executed between his client Felix Leong and a
partnership HIJOS DE JOSE VILLEGAS, of which respondent is one of the
partners, covering several parcels of land of the estate, i.e. Lots Nos. 1124,
1228, 2221, 2402, 3939, 3942 and 3957 of the Tanjay Cadastre, under
iniquitous terms and conditions. Moreover, complainant charges that these
contracts were made without the approval of the probate court and in
violation of Articles 1491 and 1646 of the new Civil Code.
On the basis of the pleadings submitted by the parties, and other pertinent
records of the investigation, the Solicitor General submitted his report dated
February 21, 1990, finding that respondent committed a breach in the
performance of his duties as counsel of administrator Felix Leong when he
allowed the renewal of contracts of lease for properties involved in the testate
proceedings to be undertaken in favor of HIJOS DE JOSE VILLEGAS without
notifying and securing the approval of the probate court. However, the
Solicitor General opined that there was no sufficient evidence to warrant a
finding that respondent had allowed the properties to be leased in favor of his
family partnership at a very low rental or in violation of Articles 1491 and
1646 of the new Civil Code. Thus, the Solicitor General recommended that
respondent be suspended from the practice of law for a period of THREE (3)
months with a warning that future misconduct on respondent's part will be
more severely dealt with [Report and Recommendation of the Solicitor
Page 6 of 23
General, pp. 1-10; Rollo, pp. 37-46. Also, Complaint of the Solicitor General,
pp. 1-3; Rollo, pp. 47-49].
As gleaned from the record of the case and the report and recommendation
of the Solicitor General, the following facts are uncontroverted:
That as early as March 21, 1961, respondent was retained
as counsel of record for Felix Leong, one of the heirs of the
late Felomina Zerna, who was appointed as administrator of
the Testate Estate of the Felomina Zerna in Special No. 460
on May 22, 1961;
That, a lease contract dated August 13, 1963 was executed
between Felix Leong and the "Heirs of Jose Villegas"
represented by respondent's brother-in-law Marcelo
Pastrano involving, among others, sugar lands of the estate
designated as Lot Nos. 1124, 1228, 2221, 2402, 3939, 3942
and 3957 of the Tanjay Cadastre;
That Felix Leong was designated therein as administrator
and "owner, by testamentary disposition, of 5/6 of all said
parcels of land";
That, the lifetime of the lease contract was FOUR (4) sugar
crop years, with a yearly rental of TEN PERCENT (10%) of
the value of the sugar produced from the leased parcels of
land;
That, on April 20, 1965, the formal partnership of HIJOS DE
JOSE VILLEGAS was formed amongst the heirs of Jose
Villegas, of which respondent was a member;
That, on October 18, 1965, another lease contract was
executed between Felix Leong and the partnership HIJOS
DE JOSE VILLEGAS, containing basically the same terms
and conditions as the first contract, with Marcelo Pastrano
signing once again as representative of the lessee;
That, on March 14, 1968, after the demise of Marcelo
Pastrano, respondent was appointed manager of HIJOS DE
JOSE VILLEGAS by the majority of partners;
That, renewals of the lease contract were executed between
Felix Leong and HIJOS DE JOSE VILLEGAS on January 13,
₯Special Proceedings (Rule84- Rule 85)
1975 and on December 4, 1978, with respondent signing
therein as representative of the lessee; and,
That, in the later part of 1980, respondent was replaced by
his nephew Geronimo H. Villegas as manager of the family
partnership.
Under the above circumstances, the Court finds absolutely no merit to
complainant's charge, and the Solicitor General's finding, that respondent
committed acts of misconduct in failing to secure the approval of the court in
Special Proceedings No. 460 to the various lease contracts executed
between Felix Leong and respondent's family partnership.
Pursuant to Section 3 of Rule 84 of the Revised Rules of Court, a judicial
executor or administrator has the right to the possession and management of
the real as well as the personal estate of the deceased so long as it is
necessary for the payment of the debts and the expenses of administration.
He may, therefore, exercise acts of administration without special authority
from the court having jurisdiction of the estate. For instance, it has long been
settled that an administrator has the power to enter into lease contracts
involving the properties of the estate even without prior judicial authority and
approval [See Ferraris v. Rodas, 65 Phil. 732 (1938); Jocson de Hilado v.
Nava, 69 Phil. 1 (1939); San Diego, Sr. v. Hombre, G.R No. L-19265, May
29, 1964, 11 SCRA 165].
Thus, considering that administrator Felix Leong was not required under the
law and prevailing jurisprudence to seek prior authority from the probate
court in order to validly lease real properties of the estate, respondent, as
counsel of Felix Leong, cannot be taken to task for failing to notify the
probate court of the various lease contracts involved herein and to secure its
judicial approval thereto.
Nevertheless, contrary to the opinion of the Solicitor General, the Court finds
sufficient evidence to hold respondent subject to disciplinary sanction for
having, as counsel of record for the administrator in Special Proceedings No.
460, participated in the execution in 1975 and 1978 of renewals of the lease
agreement involving properties of the estate in favor of the partnership
HIJOS DE JOSE VILLEGAS, of which respondent is a member and in 1968
was appointed managing partner.
By virtue of Article 1646 of the new Civil Code, the persons referred to in
Article 1491 are prohibited from leasing, either in person or through the
mediation of another, the properties or things mentioned in that article, to wit:
xxx xxx xxx
Page 7 of 23
 (1) The guardian, the property of the person or persons who
may be under his guardianship;
(2) Agents, the property whose administration or sale may
have been intrusted to them, unless the consent of the
principal have been given;
(3) Executors and administrators, the property of the estate
under administration
(4) Public officers and employees, the property of the State
or of any subdivision thereof, or of any government owned or
controlled corporation, or institution, the administration of
which has been intrusted to them; this provision shall apply
to judges and government experts who, in any manner
whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees
connected with the administration of justice, the property or
rights in litigation or levied upon on execution before the
court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
profession.
(6) Any others specially disqualified by law
xxx xxx xxx
[Article 1491 of the new Civil Code; Emphasis supplied.]
The above disqualification imposed on public and judicial officers and
lawyers is grounded on public policy considerations which disallow the
transactions entered into by them, whether directly or indirectly, in view of the
fiduciary relationship involved, or the peculiar control exercised by these
individuals over the properties or rights covered [See Rubias v. Batiller, G.R.
No. L-35702, May 29, 1973, 51 SCRA 120; Maharlika Publishing Corporation
v. Tagle, G.R. No. 65594, July 9, 1986, 142 SCRA 553; Fornilda v. The
Branch 164, RTC Fourth Judicial Region, Pasig, G.R. No. 72306, October 5,
1988, 166 SCRA 281 and January 24, 1989, 169 SCRA 351].
₯Special Proceedings (Rule84- Rule 85)
Thus, even if the parties designated as lessees in the assailed lease
contracts were the "Heirs of Jose Villegas" and the partnership HIJOS DE
JOSE VILLEGAS, and respondent signed merely as an agent of the latter,
the Court rules that the lease contracts are covered by the prohibition against
any acquisition or lease by a lawyer of properties involved in litigation in
which he takes part. To rule otherwise would be to lend a stamp of judicial
approval on an arrangement which, in effect, circumvents that which is
directly prohibited by law. For, piercing through the legal fiction of separate
juridical personality, the Court cannot ignore the obvious implication that
respondent as one of the heirs of Jose Villegas and partner, later manager
of, in HIJOS DE JOSE VILLEGAS stands to benefit from the contractual
relationship created between his client Felix Leong and his family partnership
over properties involved in the ongoing testate proceedings.
In his defense, respondent claims that he was neither aware of, nor
participated in, the execution of the original lease contract entered into
between his client and his family partnership, which was then represented by
his brother-in-law Marcelo Pastrano. And although he admits that he
participated in the execution of subsequent renewals of the lease contract as
managing partner of HIJOS DE JOSE VILLEGAS, he argues that he acted in
good faith considering that the heirs of Filomena Zerna consented or
acquiesced to the terms and conditions stipulated in the original lease
contract. He further contends that pursuant to the ruling of the Court in
Tuason v. Tuason [88 Phil. 428 (1951)] the renewal contracts do not fall
within the prohibition of Articles 1491 and 1646 since he signed the same as
a mere agent of the partnership.
Respondent's contentions do not provide sufficient basis to escape
disciplinary action from this Court.
It taxes this Courts imagination that respondent disclaims any knowledge in
the execution of the original lease contract between his client and his family
partnership represented by his brother-in-law. Be that as it may, it cannot be
denied that respondent himself had knowledge of and allowed the
subsequent renewals of the lease contract. In fact, he actively participated in
the lease contracts dated January 13, 1975 and December 4, 1978 by
signing on behalf of the lessee HIJOS DE JOSE VILLEGAS.
Moreover, the claim that the heirs of Filomena Zerna have acquiesced and
consented to the assailed lease contracts does not militate against
respondent's liability under the rules of professional ethics. The prohibition
referred to in Articles 1491 and 1646 of the new Civil Code, as far as lawyers
are concerned, is intended to curtail any undue influence of the lawyer upon
his client on account of his fiduciary and confidential association [Sotto v.
Samson, G.R. No. L-16917, July 31, 1962, 5 SCRA 733]. Thus, the law
makes the prohibition absolute and permanent [Rubias v. Batiller, supra].
Page 8 of 23
And in view of Canon 1 of the new Code of Professional Responsibility and
Sections 3 & 27 of Rule 138 of the Revised Rules of Court, whereby lawyers
are duty-bound to obey and uphold the laws of the land, participation in the
execution of the prohibited contracts such as those referred to in Articles
1491 and 1646 of the new Civil Code has been held to constitute breach of
professional ethics on the part of the lawyer for which disciplinary action may
be brought against him [See Bautista v. Gonzalez, Adm. Matter No. 1625,
February 12, 1990). Accordingly, the Court must reiterate the rule that the
claim of good faith is no defense to a lawyer who has failed to adhere
faithfully to the legal disqualifications imposed upon him, designed to protect
the interests of his client [See In re Ruste, 70 Phil. 243 (1940); Also, Severino
v. Severino, 44 Phil. 343 (1923)].

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

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

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

Considering thus the nature of the acts of misconduct committed by

respondent, and the facts and circumstances of the case, the Court finds
sufficient grounds to suspend respondent from the practice of law for a period
of three (3) months.

WHEREFORE, finding that respondent Atty. Crisostomo C. Villegas

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

SO ORDERED.

₯Special Proceedings (Rule84- Rule 85) Page 9 of 23

[3] G.R. No. L-19265             May 29, 1964
MOISES SAN DIEGO, SR., petitioner, vs. ADELO NOMBRE and PEDRO
ESCANLAR, respondents.
Executors and administrators; Judicial administrator may lease property
without prior judicial approval.—A judicial administrator can validly lease property
of the estate without prior judicial authority and approval.
Same; Non-applicability of provisions of New Civil Code on agency to judicial
administrators.—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, 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
true agreements, whereas the acts of a judicial administrator are subject to specific
provisions of law and orders of the appointing court,
PAREDES, J.:
The case at bar had its origin in Special Proceedings No. 7279 of the CFI of
Negros Occidental wherein respondent Adelo Nombre was the duly
constituted judicial administrator. On May 1, 1960, Nombre, in his capacity
was judicial administrator of the intestate estate subject of the Sp. Proc.
stated above, leased one of the properties of the estate (a fishpond identified
as Lot No. 1617 of the cadastral survey of Negros Occidental), to Pedro
Escanlar, the other respondent. The terms of the lease was for 3 years, with
a yearly rental of P3,000.00 to expire on May 1, 1963, the transaction having
been done, admittedly, without previous authority or approval of the Court
where the proceedings was pending. On January 17, 1961, Nombre was
removed as administrator by Order of the court and one Sofronio
Campillanos was appointed in his stead. The appeal on the Order of
Nombre's removal is supposedly pending with the Court of Appeals.
Respondent Escanlar was cited for contempt, allegedly for his refusal to
surrender the fishpond to the newly appointed administrator. On March 20,
1961, Campillanos filed a motion asking for authority to execute a lease
contract of the same fishpond, in favor of petitioner herein, Moises San
Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00. Escanlar
was not notified of such motion. Nombre, the deposed administrator,
presented a written opposition to the motion of Campillanos on April 11,
1964, pointing out that the fishpond had been leased by him to Escanlar for 3
years, the period of which was going to expire on May 1, 1963. In a
supplemental opposition, he also invited the attention of the Court that to
₯Special Proceedings (Rule84- Rule 85)
grant the motion of the new administrator would in effect nullify the contract in
favor of Escanlar, a person on whom the Court had no jurisdiction. He also
intimated that the validity of the lease contract entered into by a judicial
administrator, must be recognized unless so declared void in a separate
action. The opposition notwithstanding, the Court on April 8, 1961, in effect
declared that the contract in favor of Escanlar was null and void, for want of
judicial authority and that unless he would offer the same as or better
conditions than the prospective lessee, San Diego, there was no good
reason why the motion for authority to lease the property to San Diego
should not be granted. Nombre moved to reconsider the Order of April 8,
stating that Escanlar was willing to increase the rental of P5,000.00, but only
after the termination of his original contract. The motion for reconsideration
was denied on April 24, 1961, the trial judge stating that the contract in favor
of Escanlar was executed in bad faith and was fraudulent because of the
imminence of Nombre's removal as administrator, one of the causes of which
was his indiscriminate pleasant, of the property with inadequate rentals.
From this Order, a petition for Certiorari asking for the annulment of the
Orders of April 8 and 24, 1961 was presented by Nombre and Escanlar with
the Court of Appeals. A Writ of preliminary injunction was likewise prayed for
to restrain the new administrator Campillanos from possessing the fishpond
and from executing a new lease contract covering it; requiring him to return
the possession thereof to Escanlar, plus damages and attorney's fees in the
amount of P10,000.00 and costs. The Court of Appeals issued the injunctive
writ and required respondents therein to Answer. Campillanos insisted on the
invalidity of the contract in favor of Escanlar; the lower court alleged that it did
not exactly annul or invalidate the lease in his questioned orders but
suggested merely that Escanlar "may file a separate ordinary action in the
Court of general jurisdiction."
The Court of Appeals, in dismissing the petition for certiorari, among others
said —
The controlling issue in this case is the legality of the contract of lease
entered into by the former administrator Nombre, and Pedro Escanlar on
May 1, 1960.
Respondents contend that this contract, not having been authorized or
approved by the Court, is null and void and cannot be an obstacle to the
execution of another of lease by the new administrator, Campillanos. This
contention is without merit. ... . It has been held that even in the absence of
such special powers, a contract or lease for more than 6 years is not
entirely invalid; it is invalid only in so far as it exceeds the six-year limit
Page 10 of 23
 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.
On September 13, 1961, petitioner herein Moises San Diego, Sr., who was
not a party in the case, intervened and moved for a reconsideration of the
above judgment. The original parties also filed Motions for reconsideration,
but we do not find them in the record. On November 18, 1961, the Court of
Appeals denied the motions for reconsideration. With the denial of the said
motions, only San Diego, appealed therefrom, raising legal questions, which
center on "Whether a judicial administrator can validly lease property of the
estate without prior judicial authority and approval", and "whether the
provisions of the New Civil Code on Agency should apply to judicial
administrators."
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.
Lease has been considered an act of administration
The Civil Code, on lease, provides:
₯Special Proceedings (Rule84- Rule 85)
If a lease is to be recorded in the Registry of Property, the following
persons cannot constitute the same without proper authority, the husband
with respect to the wife's paraphernal real estate, the father or guardian as
to the property of the minor or ward, and the manager without special
power. (Art. 1647).
The same Code, on Agency, states: Special powers of attorneys are
necessary in the following cases:
(8) To lease any real property to another person for more than one year.
Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a
judicial administrator to lease real property without prior court authority and
approval, if it exceeds one year. The lease contract in favor of Escanlar being
for 3 years and without such court approval and authority is, therefore, null
and void. Upon the other hand, respondents maintain that there is no
limitation of such right; and that Article 1878 does not apply in the instant
case.
We believe that the Court of Appeals was correct in sustaining the validity of
the contract of lease in favor of Escanlar, notwithstanding the lack of prior
authority and approval. The law and prevailing jurisprudence on the matter
militates in favor of this view. While it may be admitted that the duties of a
judicial administrator and an agent (petitioner alleges that both act in
representative capacity), are in some respects, identical, the provisions on
agency (Art. 1878, C.C.), should not apply to a judicial administrator. A
judicial administrator is appointed by the Court. He is not only the
representative of said Court, but also the heirs and creditors of the estate
(Chua Tan v. Del Rosario, 57 Phil. 411). A judicial administrator before
entering into his duties, is required to file a bond. These circumstances are
not true in case of agency. The agent is only answerable to his principal. The
protection which the law gives the principal, in limiting the powers and rights
of an agent, stems from the fact that control by the principal can only be thru
agreements, whereas the acts of a judicial administrator are subject to
specific provisions of law and orders of the appointing court. The observation
of former Chief Justice Moran, as quoted in the decision of the Court of
Appeals, is indeed sound, and We are not prone to alter the same, at the
moment.
We, likewise, seriously doubt petitioner's legal standing to pursue this appeal.
And, if We consider the fact that after the expiration of the original period of
the lease contract executed by respondent Nombre in favor of Escanlar, a
new contract in favor of said Escanlar, was executed on May 1, 1963, by the
new administrator Campillanos. who, incidentally, did not take any active
participation in the present appeal, the right of petitioner to the fishpond
Page 11 of 23
becomes a moot and academic issue, which We need not pass upon.
WHEREFORE, the decision appealed from should be, as it is hereby
affirmed, in all respects, with costs against petitioner Moises San Diego, Sr.

₯Special Proceedings (Rule84- Rule 85) Page 12 of 23

[4] G.R. No. L-46001 March 25, 1982
LUZ CARO, petitioner,vs. HONORABLE COURT OF APPEALS and
BASILIA LAHORRA VDA. DE BENITO, AS ADMINISTRATRIX OF THE
INTESTATE ESTATE OF MARIO BENITO, respondents.
Property; Sale; Co-ownership of real property becomes terminated after the
two co-owners and the administrator of the estate of the third co-owner agreed to
subdivide the property owned in common.—However, the fact is that as early as
1960, co-ownership of the parcels of land covered by Transfer Certificates of Title
Nos. T-609 and T-610 was terminated when Alfredo Benito, Luz Caro and the
Intestate Estate of Mario Benito, represented by administrators Saturnino Benito, as
trustee and representative of the heirs of Mario Benito, agreed to subdivide the
property.
Same; Same; Co-ownership is terminated where the co-owners drew up a
subdivision plan and actually occupied their respective portions in the plan, a title
issued accordingly.—A petition for subdivision was then filed for the purpose. This
was accompanied by the affidavits of Alfredo Benito and Saturnino Benito, both
dated September 15, 1960 to the effect that they agree to the segregation of the land
formerly owned in common by Mario Benito, Alfredo Benito and Benjamin Benito.
A subdivision plan was made and by common agreement, Lot I-C thereof, with an
area of 163 hectates, more or less, was ceded to petitioner. Thereafter, the co-owners
took actual and exclusive possession of the specific portions respectively assigned to
them. A subdivision title was subsequently issued on the lot assigned to petitioner, to
wit, Transfer Certificate of Title No. T-4978.
Same; Same; Redemption; Where co-owned property had been subdivided
already, right of legal redemption by a co-owner does not arise even though
conveyance took place before the partition agreement and approval by the intestate
court thereof as to portion under intestate proceedings.—Although the foregoing
pronouncement has reference to the sale made after partition, this Court therein saw
no difference with respect to a conveyance which took place before the partition
agreement and approval by the court. Thus, it held: “Nevertheless, the result is the
same, because We held in Saturnino vs. Paulino, 97 Phil. 50, that the right of
redemption under Article 1067 may be exercised only before partition. In this case
the right was asserted not only after partition but after the property inherited had
actually been subdivided into several parcels which were assigned by lot to the
several heirs.”
Same; Same; Same; Land Registration; A subdivision title issued to buyer of a
portion of co-owned estate becomes incontrovertible after one year from its
issuance.—As aforesaid, a subdivision title has been issued in the name of petitioner
on the lot ceded to her. Upon the expiration of the term of one year from the date of
the entry of the subdivision title, the Certificate of Title shall be incontrovertible
(Section 38, Act 496). Since the title of petitioner is now indefeasible, private
respondent cannot, by means of the present action, indirectly attack the validity
thereof.
₯Special Proceedings (Rule84- Rule 85)
Same; Same; Same; Intestate Succession; Administrator of an intestate estate
cannot exercise right of legal redemption over portion of property owned in common
sold by one of the other co-owners.—Even on the assumption that there still is co-
ownership here and that therefore, the right of legal redemption exists, private
respondent as administratrix, has no personality to exercise said right for and in
behalf of the intestate estate of Mario Benito. She is on the same footing as co-
administrator Saturnino Benito. Hence, if Saturnino’s consent to the sale of the one-
third portion to petitioner cannot bind the intestate estate of Mario Benito on the
ground that the right of redemption was not within the powers of administration, in
the same manner, the private respondent as co-administrator has no power to
exercise the right of redemption—the very power which the Court of Appeals ruled
to be not within the powers of administration.
Actions; Intestate Succession; Where action for legal redemption of co-owner,
the said action cannot be deemed brought by her as co-owner or in behalf of heirs of
said deceased.—Private respondent cannot be considered to have brought this action
in her behalf and in behalf of the heirs of Mario Benito because the jurisdictional
allegations of the complaint specifically stated that she brought the action in her
capacity as administratrix of the intestate estate of Mario Benito.
Property; Sale; Redemption; Redemption of property owned in common
should tender redemption money within 30 days from written notice of the sale by
the co-owner.—One of these is that the redemptioner should tender payment of the
redemption money within thirty (30) days from written notice of the sale by the co-
owner.
Same; Same; Same.—It has been held that this thirty-day period is peremptory
because the policy of the law is not to leave the purchaser’s title in uncertainty
beyond the established 30-day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA
526). It is not a prescriptive period but is more a requisite or condition precedent to
the exercise of the right of legal redemption.
GUERRERO, J.:
This is a petition for certiorari under Rule 45 of the Revised Rules of Court
seeking a review of the decision of the Court of Appeals, 1 promulgated on
February 11, 1977, in CA-G.R. No. 52570-R entitled "Basilia Lahorra Vda. de
Benito, as Administratrix of the Intestate Estate of Mario Benito vs. Luz
Caro", as well as the resolution of the respondent Court, dated May 13, 1977,
denying petitioner's Motion for Reconsideration.
The facts of the case are as follows:
Alfredo Benito, Mario Benito and Benjamin Benito were the original co-
owners of two parcels of land covered by Transfer Certificates of Title Nos. T-
609 and T-610 of the Registry of Deeds of Sorsogon. Mario died sometime in
January, 1957. His surviving wife, Basilia Lahorra and his father, Saturnino
Page 13 of 23
Benito, were subsequently appointed in Special Proceeding No. 508 of the
Court of First Instance of Sorsogon as joint administrators of Mario's estate.
On August 26, 1959, one of the co-owners, Benjamin Benito, executed a
deed of absolute sale of his one-third undivided portion over said parcels of
land in favor of herein petitioner, Luz Caro, for the sum of P10,000.00. This
was registered on September 29, 1959. Subsequently, with the consent of
Saturnino Benito and Alfredo Benito as shown in their affidavits both dated
September 15, 1960, Exhibits G and F respectively, a subdivision title was
issued to petitioner Luz Caro over Lot I-C, under T.C.T. No. T-4978.
Sometime in the month of May, 1966, private respondent Basilia Lahorra
Vda. de Benito learned from an allegation in a pleading presented by
petitioner in Special Proceeding No. 508 that the latter acquired by purchase
from Benjamin Benito the aforesaid one-third undivided share in each of the
two parcels of land. After further verification, she sent to petitioner thru her
counsel, a written offer to redeem the said one-third undivided share dated
August 25, 1966. Inasmuch as petitioner ignored said offer, private
respondent sought to intervene in Civil Case No. 2105 entitled "Rosa Amador
Vda. de Benito vs. Luz Caro" for annulment of sale and mortgage and
cancellation of the annotation of the sale and mortgage involving the same
parcels of land, but did not succeed as the principal case was dismissed on a
technicality, that is, for failure to prosecute and the proposed intervenor failed
to pay the docketing fees. Private respondent, thus, filed the present case as
an independent one and in the trial sought to prove that as a joint
administrator of the estate of Mario Benito, she had not been notified of the
sale as required by Article 1620 in connection with Article 1623 of the New
Civil Code.
On the other hand, petitioner presented during the hearing of the case
secondary evidence of the service of written notice of the intended sale to
possible redemptioners in as much as the best thereof, the written notices
itself sent to and Saturnino Benito, could not be presented for the reason that
said notices were sent to persons who were already dead when the
complaint for legal redemption was brought. Instead, the affidavit of Benjamin
Benito, executed ante litem motam, attesting to the fact that the possible
redemptioners were formally notified in writing of his intention to sell his
undivided share, was presented in evidence. The deposition of Saturnino's
widow was likewise taken and introduced in evidence, wherein she testified
that she received and gave to her husband the written notice of the intended
sale but that the latter expressed disinterest in buying the property.
After hearing the evidence, the trial judge dismissed the complaint on the
grounds that: (a) private respondent, as administratrix of the intestate estate
of Mario Benito, does not have the power to exercise the right of legal
redemption, and (b) Benjamin Benito substantially complied with his
₯Special Proceedings (Rule84- Rule 85)
obligation of furnishing written notice of the sale of his one-third undivided
portion to possible redemptioners.
Private respondent's Motion for Reconsideration of the trial court's decision
having been denied, she appealed to the respondent Court of Appeals
contending that the trial Judge erred in
I. . . not inhibiting himself from trying and deciding the case
because his son is an associate or member of the law office
of Atty. Rodolfo A. Madrid, the attorney of record of
defendant-appellee in the instant case;
II. . contending that Benjamin Benito complied with the
provisions of Article 1623 of the Revised Civil Code that
before a co-owner could sell his share of the property owned
in common with the other co-heirs, he must first give written
notice of his desire to his co-heirs; (p. 49, R.A.)
III. concluding that the fact that one of the administrators who
was actively managing the estate was furnished a written
notice by the co-owner of his desire to sell his share was
enough compliance of the provisions of Article 1623 of the
Civil Code for the reason that the intention of the law is only
to give a chance to the new co-owner to buy the share
intended to be sold if he desires to buy the same; (p. 50,
R.A.)
IV. . refusing to allow plaintiff to redeem the subject property
upon authority of Butte vs. Manuel Uy & Sons, L-15499, Feb.
28, 1962 (p. 51, R.A.) and in consequently dismissing the
complaint (p. 52, R.A.).
In disposing of the aforesaid errors, the Court of Appeals finding for plaintiff
(herein private respondent) held:
1. That it is not clear that Atty. Arcangel, son of the trial Judge, was legally
associated as practitioner with counsel for Luz Caro; that it is not shown at
any rate that plaintiff had asked for Judge Arcangel's disqualification and that
at any rate also, in such factual situation, an optional ground for
disqualification is addressed to his sound discretion with which it would not
be correct for appellate court to interfere or overrule.
2. That since the right of the co-owner to redeem in case his share be sold to
a stranger arose after the death of Mario Benito, such right did not form part
of the hereditary estate of Mario but instead was the personal right of the
Page 14 of 23
heirs, one of whom is Mario's widow. Thus, it behooved either the vendor,
Benjamin, or his vendee, Luz Caro, to have made a written notice of the
intended or consummated sale under Article 1620 of the Civil Code.
3. That the recital in the deed of sale that the vendor notified his co-owners of
his desire to dispose of his share, who all declined to buy, was but a
unilateral statement and could not be proof of the notice required by the law.
4. That the registration of the deed of sale did not erase that right.
5. That the affidavit of notice executed on January 20, 1960 of Benjamin
Benito declaring that written notices of the sale as required by law were duly
sent to Alfredo Benito and Saturnino Benito, the latter in his capacity as
administrator of the estate of Mario Benito, as well as the sworn statement of
Saturnino Benito's widow dated November 18, 1968 confirming that her
husband received the written notice of the sale referred to in Benjamin
Benito's affidavit of notice would not satisfy that there was clear notice in
writing of the specific term of the intended sale. Worse, Saturnino was only a
co-administrator and hence, his unilateral act could not bind the principal
because there was no less than a renunciation of a right pertaining to the
heirs, under Article 1818, NCC, apart from the fact that the right of
redemption is not within their administration.
6. That the further claim of defendant that offer to redeem was filed out of
time and that there was no actual tender loses all importance, there being no
date from which to count the 30-day period to redeem because there was no
notice given.
The dispositive part of the decision of the Court of Appeals reads as follows:
IN VIEW THEREOF, this Court is constrained to reverse, as
it now reverses, judgment appealed from, upon payment by
plaintiff or deposit in Court, within 30 days after this judgment
should have become final, of the sum of P10,000.00,
defendant is ordered to execute a deed of redemption over
the one-third share of BENJAMIN BENITO in favor of plaintiff
for herself and as representative of the children of Mario
Benito and therefrom, to deliver said one-third share of
BENJAMIN BENITO, costs against defendant-appellee.
SO ORDERED.
Upon denial of the motion for reconsideration, petitioner brought this petition
for review raising the following errors:
₯Special Proceedings (Rule84- Rule 85)
1. Respondent Court erred in allowing the exercise of the right of legal
redemption with respect to the lots in question.
2. Respondent Court erred when it made the finding that there was no notice
in law from which to count the tolling of the period of redemption and that the
sale was not made known at all to private respondent.
The alleged first error of respondent Court is premised on the fact that the lot
in question sought to be redeemed is no longer owned in common. Petitioner
contends that the right sought to be exercised by private respondent in the
case assumes that the land in question is under co-ownership, the action
being based on Article 1620 of the New Civil Code which provides:
A co-owner of a thing may exercise the right of redemption in
case the shares of all the other co-owners or any of them,
are sold to a third person. If the price of alienation is grossly
excessive, the petitioner shall pay only a reasonable price.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
However, the fact is that as early as 1960, co-ownership of the parcels of
land covered by Transfer Certificates of Title Nos. T-609 and T-610 was
terminated when Alfredo Benito, Luz Caro and the Intestate Estate of Mario
Benito, represented by administrators Saturnino Benito, as trustee and
representative of the heirs of Mario Benito, agreed to subdivide the property.
An agreement of partition, though oral, is valid and
consequently binding upon the parties. (Hernandez vs.
Andal, et al., 78 Phil. 196)
A petition for subdivision was then filed for the purpose. This was
accompanied by the affidavits of Alfredo Benito and Saturnino Benito, both
dated September 15, 1960 to the effect that they agree to the segregation of
the land formerly owned in common by Mario Benito, Alfredo Benito and
Benjamin Benito. A subdivision plan was made and by common agreement
Lot I-C thereof, with an area of 163 hectares, more or less, was ceded to
petitioner. Thereafter, the co-owners took actual and exclusive possession of
the specific portions respectively assigned to them. A subdivision title was
subsequently issued on the lot assigned to petitioner, to wit, Transfer
Certificate of Title No. T-4978.
In Caram, et al. vs. Court of Appeals, et al., 101 Phil. 315, a case squarely in
point, this Court held:
Page 15 of 23
 Inasmuch as the purpose of the law in establishing the right
of legal redemption between co-owners is to reduce the
number of participants until the community is done away with
(Viola vs. Tecson, 49 Phil. 808), once the property is
subdivided and distributed among the co-owners, the
community has terminated and there is no reason to sustain
any right of legal redemption.
Although the foregoing pronouncement has reference to the sale made after
partition, this Court therein saw no difference with respect to a conveyance
which took place before the partition agreement and approval by the court.
Thus, it held:
Nevertheless, the result is the same, because We held in
Saturnino vs. Paulino, 97 Phil. 50, that the right of
redemption under Article 1067 may be exercised only before
partition. In this case the right was asserted not only after
partition but after the property inherited had actually been
subdivided into several parcels which were assigned by lot to
the several heirs.
In refutation, private respondent argues that petitioner Luz Caro acted in bad
faith and in fraud of the rights of the heirs of a deceased Mario Benito in
obtaining a subdivision title over a one-third portion of the land in question
which she brought from Benjamin Benito, and for this reason, she is deemed
to hold said property in trust for said heirs. The rule, however, is it fraud in
securing the registration of titles to the land should be supported by clear and
convincing evidence. (Jaramil vs. Court of Appeals, 78 SCRA 420). As
private respondent has not shown and proved the circumstances constituting
fraud, it cannot be held to exist in this case.
As aforesaid, a subdivision title has been issued in the name petitioner on the
lot ceded to her. Upon the expiration of the term of one year from the date of
the entry of the subdivision title, the Certificate of Title shall be
incontrovertible (Section 38, Act 496). Since the title of petitioner is now
indefeasible, private respondent cannot, by means of the present action,
directly attack the validity thereof.
Even on the assumption that there still is co-ownership here and that
therefore, the right of legal redemption exists, private respondent as
administratrix, has no personality to exercise said right for and in behalf of
the intestate estate of Mario Benito. She is on the same footing as co-
administrator Saturnino Benito. Hence, if Saturnino's consent to the sale of
the one-third portion to petitioner cannot bind the intestate estate of Mario
Benito on the ground that the right of redemption was not within the powers
₯Special Proceedings (Rule84- Rule 85)
of administration, in the same manner, private respondent as co-
administrator has no power exercise the right of redemption — the very
power which the Court of Appeals ruled to be not within the powers of
administration.
While under Sec. 3, Rule 85, Rules of Court, the
administrator has the right to the possession of the real and
personal estate of the deceased, so far as needed for the
payment of the expenses of administration, and the
administrator may bring and defend action for the recovery
or protection of the property or right of the deceased (Sec. 2,
Rule 88), such right of possession and administration do not
include the right of legal redemption of the undivided share
sold to a stranger by one of the co-owners after the death of
another, because in such case, the right of legal redemption
only came into existence when the sale to the stranger was
perfected and formed no part of the estate of the deceased
co-owner; hence, that right cannot be transmitted to the heir
of the deceased co-owner. (Butte vs. Manuel Uy and Sons,
Inc., 4 SCRA 526).
Private respondent cannot be considered to have brought this action in her
behalf and in behalf of the heirs of Mario Benito because the jurisdictional
allegations of the complaint specifically stated that she brought the action in
her capacity as administratrix of the intestate estate of Mario Benito.
It is petitioner's contention that, assuming that private respondent may
exercise the right of redemption, there was no compliance with the conditions
precedent for the valid exercise thereof.
In Conejero et al. vs. Court of Appeals, et al., 16 SCRA 775, this Court
explained the nature of the right of redemption in this wise:
While the co-owner's right of legal redemption is a
substantive right, it is exceptional in nature, limited in its
duration and subject to strict compliance with the legal
requirements. One of these is that the redemptioner should
tender payment of the redemption money within thirty (30)
days from written notice of the sale by the co-owner.
It has been held that this thirty-day period is peremptory because the policy
of the law is not to leave the purchaser's title in uncertainty beyond the
established 30-day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA
526). It is not a prescriptive period but is more a requisite or condition
precedent to the exercise of the right of legal redemption.
Page 16 of 23
In the case at bar, private respondent alleged in her complaint that she
learned of the sale sometime in May, 1966 upon receipt of a pleading in
Special Proceeding No. 508 of the Court of First Instance of Sorsogon. She
likewise alleged that she gave a letter informing petitioner of her desire to
redeem the land on August 25, 1966. Clearly, three months have elapsed
since the notice of the sale. Hence, petitioner claims that the thirty-day period
of redemption has already expired. In addition, petitioner makes capital of the
admission of private respondent that she already knew of the said transaction
even before receipt of the said pleading (t.s.n., p. 16) as well as of the
evidence presented that Saturnino Benito, the admittedly active administrator
until 1966, duly received a written notice of the intended sale of Benjamin
Benito's share. Said evidence consists of the affidavit of the vendor stating
that the required notice had been duly given to possible redemptioners, the
statement in the deed of sale itself and the deposition of Saturnino Benito's
widow with respect to her receipt of the written notice. Finally, petitioner
points to the records which disclose that private respondent knew of the
subdivision (t.s.n., p. 25) and hence, rationalized that private respondent
should have known also of the previous sale.

Since We have ruled that the right of legal redemption does not exist nor
apply in this case because admittedly a subdivision title (T.C.T. No. T-4978)
has already been issued in the name of the petitioner on Lot I-C sold to her, it
becomes moot and academic, if not unnecessary to decide whether private
respondent complied with the notice requirements for the exercise of the right
of legal redemption under Article 1623 of the New Civil Code.

WHEREFORE, IN VIEW OF THE FOREGOING, the decision of the Court of

Appeals is hereby REVERSED and SET ASIDE, and judgment is hereby
rendered DISMISSING the complaint.

SO ORDERED.

₯Special Proceedings (Rule84- Rule 85) Page 17 of 23

[5] G.R. No. L-29407 July 29, 1983
ESTATE OF AMADEO MATUTE OLAVE, as represented by JOSE S.
MATUTE, Judicial Co-Administrator in Sp. Proc. No. 25876, Court of
First Instance of Manila, petitioner, vs.HONORABLE MANASES G.
REYES, Presiding Judge of Branch III, Court of First Instance of Davao,
Davao City; SOUTHWEST AGRICULTURAL MARKETING
CORPORATION also known as (SAMCO); CARLOS V. MATUTE, as
another Administrator of the Estate of Amadeo Matute Olave, Sp. Proc.
No. 25876 CFI, Manila; and MATIAS S. MATUTE, as former Co-
Administrator of the Estate of Amadeo Matute Olave, Sp. Proc. No.
25876, CFI, Manila, respondents.
Remedial Law; Special Proceedings; Settlement of Estates; Probate Court;
Purpose of presentation of claims against decedents of estate in the probate court.—
The purpose of presentation of claims against decedents of the estate in the probate
court is to protect the estate of deceased persona. That way, the executor or
administrator will be able to examine each claim and determine whether it is a proper
one which should be allowed. Further, the primary object of the provisions requiring
presentation is to apprise the administrator and the probate court of the existence of
the claim so that a proper and timely arrangement may be made for its payment in
full or by pro-rata portion in the due course of the administration, inasmuch as upon
the death of a person, his entire estate is burdened with the payment of all of his
debts and no creditor shall enjoy any preference or priority; all of them shall share
pro-rata in the liquidation of the estate of the deceased.
Same; Same; Same; Same; Jurisdiction; Where the estate of a deceased person
is already the subject of a testate or intestate proceeding, the administrator cannot
enter into any transaction involving it without prior approval of the probate court.—
Section 1, Rule 73 of the Rules of Court, expressly provides that “the court first
taking cognizance of the settlement of the estate of a decedent, shall exercise
jurisdiction to the exclusion of all other courts.” (Italics supplied). The law is clear
that where the estate of the deceased person is already the subject of a testate or
intestate proceeding, the administrator cannot enter into any transaction involving it
without prior approval of the probate court.
RELOVA, J.:
In this petition for certiorari, the estate of Amadeo Matute Olave, represented
by Jose S. Matute, Judicial Administrator in Sp. Proc. No. 25876, of the then
Court of First Instance of Manila, assails the Order, dated November 10,
1967, of the respondent judge, approving the "Amicable Settlement"
submitted by the parties in Civil Case No. 4623 of the then Court of First
Instance of Davao, 16th Judicial District, Branch III, and prays that the said
Order be set aside.
₯Special Proceedings (Rule84- Rule 85)
The petition alleged that the estate of Amadeo Matute Olave is the owner in
fee simple of a parcel of land containing an area of 293,578 square meters,
situated in sitio Tibambam, barrio Tibambam, municipality of Sigaboy (now
Governor Generoso), province of Davao, and covered by Original Certificate
of Title No. 0-27 of the Registry of Deeds of Davao Province; that in April
1965 herein private respondent Southwest Agricultural Marketing
Corporation (SAMCO), as plaintiff, filed Civil Case No. 4623 with the
respondent Court of First Instance of Davao against respondents, Carlos V.
Matute and Matias S. Matute, as defendants, in their capacities as co-
administrators of the estate of Amadeo Matute Olave, for the collection of an
alleged indebtedness of P19,952.11 and for attorney's fees of P4,988.02;
that on May 8, 1965, defendants Carlos V. Matute and Matias S. Matute in
said Civil Case No. 4623, filed an answer denying their lack of knowledge
and questioning the legality of the claim of SAMCO; that on October 25, 1966
in Sp. Proc. No. 25876, the then Court of First Instance of Manila, Branch IV,
issued an order directing the administrators to secure the probate court's
approval before entering into any transaction involving the seventeen (17)
titles of the estate, of which the property described in OCT No. 0-27 is one of
them; that on October 20, 1967, the parties (plaintiff and defendants) in Civil
Case No. 4623 of the Court of First Instance of Davao, submitted to the
respondent court an Amicable Settlement whereby the property of the estate
covered by OCT No. 0-27 of Davao was conveyed and ceded to SAMCO as
payment of its claim; that the said Amicable Settlement signed by the herein
respondents was not submitted to and approved by the then Court of First
Instance of Manila, Branch IV, in Sp. Proc. No. 25876, nor notice thereof
made to the beneficiaries and heirs in said special proceedings; that on
November 10, 1967, respondent court, despite the opposition of the other
parties who sought to intervene in Civil Case No. 4623 and despite the utter
lack of approval of the probate court in Manila, approved the said Amicable
Settlement and gave the same the enforceability of a court decision which, in
effect, ceded the property covered by OCT No. 0-27, containing an area of
293,578 square meters and with an assessed value of P31,700.00 to
SAMCO in payment of its claim for only P19,952.11; and, that if the said
Order of respondent dated November 10, 1967 is not set aside, the same will
operate as a judgment that "conveys illegally and unfairly, the property of
petitioner-estate without the requisite approval of the probate court of Manila,
which has the sole jurisdiction to convey this property in custodia legis of the
estate. (par. 16, Petition).
Made to answer, herein respondent SAMCO and respondent judge, among
others, contend that the Amicable Settlement need not be approved by the
probate court, "the same having been entered into in another independent
action and in another court of co-equal rank. Article 2032 of the Civil Code
applies only to extrajudicial compromise entered into by the administrators of
the estate. In the alternative, lack of approval of the probate court of the
Page 18 of 23
Amicable Settlement does not render it null and void, but at most voidable,
which must be the subject matter of a direct proceeding in the proper Court of
First Instance." (p. 60, Rollo)
In said Civil Case No. 4623 for sum of money, plaintiff SAMCO and
defendants Carlos V. Matute and Matias S. Matute, in their capacities as
judicial administrators of the estate of Amado Matute Olave in Special
Proceeding No. 25876, Court of First Instance of Manila, Branch IV,
submitted the following Amicable Settlement:
1. That defendants in their capacity as judicial administrators of the Estate
of Amadeo Matute, hereby submit and acknowledge that the said Estate
of Amadeo Matute is justly indebted to plaintiff in the total sum of
P28,403.02 representing the principal account of P19,952.11 and in the
sum of P8,450.91 as attorney's fees, damages, interest and costs;
2. That at present the defendant estate is devoid of or does not have any
funds with which to pay or settle the aforestated obligation in favor of the
plaintiff, and that being so, the defendant estate through the undersigned
administrators, decides to pay the plaintiff by way of conveying and
ceding unto the plaintiff the ownership of a certain real property owned by
the defendant estate now under the administration of the said
undersigned administrators;
3. That plaintiff hereby accepts the offer of defendants of conveying,
transferring and ceding the ownership of the above described property as
full and complete payment and satisfaction of the total obligation of
P28,403.02;
4. That the defendant estate, through the undersigned administrators
hereby agree and bind the defendant estate to pay their counsel Atty.
Dominador Zuho, of the Zufio Law Offices the sum of Eight Thousand
(P8,000.00) Pesos by way of Attorney's Fee;
5. That the parties herein waive an other claims which they might have
against one another.
WHEREFORE, premises considered, it is respectfully prayed that this
Honorable Court approves the foregoing settlement and that judgment be
rendered transferring the said real property covered by Original Certificate
of Title No. 0-27 to plaintiff Southwest Agricultural Marketing Corporation
and that a new transfer certificate of title be issued to said plaintiff. (pp.
25-26, Rollo)
₯Special Proceedings (Rule84- Rule 85)
Section 1, Rule 87 of the Rules of Court, provides that "no action upon a
claim for the recovery of money or debt or interest thereon shall be
commenced against the executor or administrator; ..." The claim of private
respondent SAMCO being one arising from a contract may be pursued only
by filing the same in the administration proceedings in the Court of First
Instance of Manila (Sp. Proc. No. 25876) for the settlement of the estate of
the deceased Amadeo Matute Olave; and the claim must be filed within the
period prescribed, otherwise, the same shall be deemed "barred forever."
(Section 5, Rule 86, Rules of Court).
The purpose of presentation of claims against decedents of the estate in the
probate court is to protect the estate of deceased persons. That way, the
executor or administrator will be able to examine each claim and determine
whether it is a proper one which should be allowed. Further, the primary
object of the provisions requiring presentation is to apprise the administrator
and the probate court of the existence of the claim so that a proper and
timely arrangement may be made for its payment in full or by pro-rata portion
in the due course of the administration, inasmuch as upon the death of a
person, his entire estate is burdened with the payment of all of his debts and
no creditor shall enjoy any preference or priority; all of them shag share pro-
rata in the liquidation of the estate of the deceased.
It is clear that the main purpose of private respondent SAMCO in filing Civil
Case No. 4623 in the then Court of First Instance of Davao was to secure a
money judgment against the estate which eventually ended in the
conveyance to SAMCO of more than twenty-nine (29) hectares of land
belonging to the estate of the deceased Amadeo Matute Olave in payment of
its claim, without prior authority of the probate court of Manila, in Sp. Proc.
No. 25876, which has the exclusive jurisdiction over the estate of Amadeo
Matute Olave. It was a mistake on the part of respondent court to have given
due course to Civil Case No. 4623, much less issue the questioned Order,
dated November 10, 1967, approving the Amicable Settlement.
Section 1, Rule 73 of the Rules of Court, expressly provides that "the court
first taking cognizance of the settlement of the estate of a decedent, shall
exercise jurisdiction to the exclusion of all other courts." (Emphasis supplied).
The law is clear that where the estate of the deceased person is already the
subject of a testate or intestate proceeding, the administrator cannot enter
into any transaction involving it without prior approval of the probate court.
WHEREFORE, the petition for certiorari is GRANTED, and the Order, dated
November 10, 1967, of the respondent court approving the Amicable
Settlement of the parties in Civil Case No. 4623 of the then Court of First
Instance of Davao, is hereby SET ASIDE.
Page 19 of 23
SO ORDERED.
[6] G.R. No. L-29276 May 18, 1978
Testate Estate of the Late Felix J. de Guzman. VICTORINO G. DE
GUZMAN, administrator-appellee, vs.CRISPINA DE GUZMAN-CARILLO,
ARSENIO DE GUZMAN and HONORATA DE GUZMAN-MENDIOLA,
oppositors-appellants.
Settlement of Estate; Powers and duties of the administrator of a decedent’s
estate in the matter of expenses for management and settlement thereof.—An
executor or administrator is allowed the necessary expenses in the care, management,
and settlement of the estate. He is entitled to possess and manage the decedent’s real
and personal estate as long as it is necessary for the payment of the debts and the
expenses of administration. He is accountable for the whole decedent’s estate which
has come into his possession, with all the interest, profit, and income thereof, and
with the proceeds of so much of such estate as is sold by him, at the price at which it
was sold (Sec. 3, Rule 84; secs. 1 and 7, Rule 85, Rules of Court).
Same; Expenses of the administrator to preserve the family home and maintain
family’s social standing may be approved.—It should be noted that the family
residence was partitioned pro-indiviso among the decedent’s eight children. Each
one of them was given a one-eight share in conformity with the testator’s will. Five
of the eight co-owners consented to the use of the funds of the estate for repair and
improvement of the family home. It is obvious that the expenses in question were
incurred to preserve the family home and to maintain the family’s social standing in
the community. Obviously, those expenses redounded to the benefit of all the co-
owners. They were necessary for the preservation and use of the family residence. As
a result of those expenses, the co-owners, including the three oppositors, would be
able to use the family home in comfort, convenience and security. We hold that the
probate court did not err in approving the use of the income of the estate to defray
those expenses.
Same; Personal expenses of the occupant heir of the family residence e.g.,
salary of household help, light and water bills, cost of gas, oil floor wax and switch
nail, may not be charged against the estate.—The probate court allowed the income
of the estate to be used for those expenses on the theory that the occupancy of the
house by one heir did not deprive the other seven heirs from living in it. Those
expenses consist of the salaries of the house helper, light and water bills, and the cost
of gas, oil, floor wax and switch nail. We are of the opinion that those expenses were
personal expenses of Librada de Guzman, unuring mainly to her benefit Those
expenses, not being reasonable administration expenses incurred by the
administrator, should be charged against the income of the estate. Librada de
Guzman, as an heir, is entitled to share in the net income of the estate. She occupied
the house without paying rent. She should use her income for her living expenses
while occupying the family residence. The trial court erred in approving those
expenses in the administrator’s accounts. They should be, as they are hereby,
disallowed (See 33 C.J.S. 1239-40).
₯Special Proceedings (Rule84- Rule 85)
Same; Expenses for stenographic notes, representation expenses when
unexplained, expenses to celebrate first death anniversary of the deceased are not
chargeable against the estate.—Among these expenses is the sum of P100 for
stenographic notes which, as admitted by the administrator on page 24 of his brief,
should be disallowed. Another item, “representation expenses” in the sum of P26.25
(2nd accounting), was not explained. It should likewise be disallowed. The probate
court erred in allowing as expenses of administration the sum of P268.65 which was
incurred during the celebration of the first death anniversary of the deceased. Those
expenses are disallowed because they have no connection with the care, management
and settlement of the decedent’s estate (Nicolas vs. Nicolas, 63 Phil. 332).
Same; Lawyer’s fee and cost of a gift to doctor who attended the deceased in
his last illness is a valid charge against the estate.—The other expenses, namely,
P19.30 for the lawyer’s subsistence and P144 as the cost of the fit to the physician
who attended to the testator during his last illness, are allowable expenses.
AQUINO, J.:
This case is about the propriety of allowing as administration expenses
certain disbursements made by the administrator of the testate estate of the
late Felix J. de Guzman of Gapan, Nueva Ecija.
The deceased testator was survived by eight children named Victorino,
Librada, Severino, Margarita, Josefina, Honorata, Arsenio and Crispina. His
will was duly probated. Letters of administration were issued to his son,
Doctor Victorino G. de Guzman, pursuant to the order dated September 17,
1964 of the Court of First Instance of Nueva Ecija in Special Proceeding No.
1431.
One of the properties left by the dent was a residential house located in the
poblacion. In conformity with his last will, that house and the lot on which it
stands were adjudicated to his eight children, each being given a one-eighth
proindiviso share in the project of partition dated March 19, 1966, which was
signed by the eight heirs and which was approved in the lower court's order
of April 14, 1967 but without prejudice to the final outcome of the accounting.
The administrator submitted four accounting reports for the period from June
16, 1964 to September, 1967. Three heirs Crispina de Guzmans-Carillo
Honorata de Guzman-Mendiola and Arsenio de Guzman interposed
objections to the administrator's disbursements in the total sum of
P13,610.48, broken down as follows:
I. Expense for the improvement and renovation of the decedent's residential
house.
1. Construction of fence — P3,082.07
Page 20 of 23
2. Renovation of bathroom — P1,389.52
3. Repair of terrace and interior of house — P5,928.00 — P10,399.59
II. Living expenses of Librada de Guzman while occupying the family home
without paying rent:
1. For house helper — P1,170.00
2. Light bills — 227.41
3. Water bills — 150.80
4. Gas oil, floor wax and switch nail — 54.90 — P 1,603.11
III. Other expenses:
1. Lawyer's subsistence — P 19.30
2. Gratuity pay in lieu of medical fee — 144.00
3. For stenographic notes — 100.00
4. For food served on decedent's first death anniversary — 166.65
5. Cost of publication of death anniversary of decedent — 102.00
6. Representation expenses — 26.25 — P558.20
IV. Irrigation fee P1.049.58
TOTAL P13,610.48
It should be noted that the probate court in its order of August 29, 1966
directed the administrator "to refrain from spending the assets of the estate
for reconstructing and remodeling the house of the deceased and to stop
spending (sic) any asset of the estate without first during authority of the
court to do so" (pp. 26-27, Record on Appeal).
The lower court in its order of April 29, 1968 allowed the d items as legitimate
expenses of administration. From that order, the three oppositors appealed to
this Court. Their contention is that the probate court erred in approving the
₯Special Proceedings (Rule84- Rule 85)
utilization of the income of the estate (from rice harvests) to defray those
expenditures which allegedly are not allowable under the Rules of Court.
An executor or administrator is allowed the necessary expenses in the care,
management, and settlement of the estate. He is entitled to possess and
manage the decedent's real and personal estate as long as it is necessary
for the payment of the debts and the expenses of administration. He is
accountable for the whole decedent's estate which has come into his
possession, with all the interest, profit, and income thereof, and with the
proceeds of so much of such estate as is sold by him, at the price at which it
was sold (Sec. 3, Rule 84; Secs. 1 and 7, Rule 85, Rules of Court).
One of the Conditions of the administrator's bond is that he should render a
true and just account of his administration to the court. The court may
examine him upon oath With respect to every matter relating to his
accounting 't and shall so examine him as to the correctness of his account
before the same is allowed, except when no objection is made to the
allowance of the account and its correctness is satisfactorily established by
competent proof. The heirs, legatees, distributes, and creditors of the estate
shall have the same privilege as the executor or administrator of being
examined on oath on any matter relating to an administration account." (Sec.
1[c] Rule 81 and secs. 8 and 9, Rule 85, Rules of Court).
A hearing is usually held before an administrator's account is approved,
especially if an interested Party raises objections to certain items in the
accounting report (Sec. 10, Rule 85).
At that hearing, the practice is for the administrator to take the witness stand,
testify under oath on his accounts and Identify the receipts, vouchers and
documents evidencing his disbursements which are offered as exhibits. He
may be interrogated by the court and crossed by the oppositors's counsel.
The oppositors may present proofs to rebut the ad. administrator's evidence
in support of his accounts.
I. Expenses for the renovation and improvement of the family residence —
P10,399.59. — As already shown above, these expenses consisted of
disbursements for the repair of the terrace and interior of the family home,
the renovation of the bathroom, and the construction of a fence. The probate
court allowed those expenses because an administrator has the duty to
"maintain in tenantable repair the houses and other structures and fences
belonging to the estate, and deliver the same in such repair to the heirs or
devises" when directed to do so by the court (Sec. 2, Rule 84, Rules of
Court).
Page 21 of 23
On the other hand, the oppositors-appellants contend that the trial court erred
in allowing those expenses because the same did not come within the
category of necessary expenses of administration which are understood to
be the reasonable and necessary expenses of caring for the property and
managing it until the debts are paid and the estate is partitioned and
distributed among the heirs (Lizarraga Hermanos vs. Abada, 40 Phil. 124).
As clarified in the Lizarraga case, administration expenses should be those
which are necessary for the management of the estate, for protecting it
against destruction or deterioration, and, possibly, for the production of fruits.
They are expenses entailed for the preservation and productivity of the estate
and its management for purposes of liquidation, payment of debts, and
distribution of the residue among the persons entitled thereto.
It should be noted that the family residence was partitioned proindiviso
among the decedent's eight children. Each one of them was given a one-
eighth share in conformity with the testator's will. Five of the eight co-owners
consented to the use of the funds of the estate for repair and improvement of
the family home. It is obvious that the expenses in question were incurred to
preserve the family home and to maintain the family's social standing in the
community.
Obviously, those expenses redounded to the benefit of an the co- owners.
They were necessary for the preservation and use of the family residence. As
a result of those expenses, the co-owners, including the three oppositors,
would be able to use the family home in comfort, convenience and security.
We hold that the probate court did not err in approving the use of the income
of the estate to defray those ex
II. Expenses incurred by Librada de Guzman as occupant of the family
residence without paying rent — P1 603.11 — The probate court allowed the
income of the estate to be used for those expenses on the theory that the
occupancy of the house by one heir did not deprive the other seven heirs
from living in it. Those expenses consist of the salaries of the house helper,
light and water bills, and the cost of gas, oil floor wax and switch nail
We are of the opinion that those expenses were personal expenses of
Librada de Guzman, inuring y to her benefit. Those expenses, not being
reasonable administration expenses incurred by the administrator, should not
be charged against the income of the estate.
Librada de Guzman, as an heir, is entitled to share in the net income of the
estate. She occupied the house without paying rent. She should use her
income for her living expenses while occupying the family residence.
₯Special Proceedings (Rule84- Rule 85)
The trial court erred in approving those expenses in the administrator's
accounts. They should be, as they are hereby, disallowed (See 33 C.J.S
1239-40).
III. Other expenses — P558.20. — Among these expenses is the sum of
P100 for stenographic notes which, as admitted by the administrator on page
24 of his brief, should be disallowed. Another item, "representation
expenses" in the sum of P26.25 (2nd accounting), was not explained. it
should likewise be disallowed.
The probate court erred in allowing as expenses of ad. administration the
sum of P268.65 which was incurred during the celebration of the first death
anniversary of the deceased. Those expenses are disallowed because they
have no connection with the care, management and settlement of the
decedent's estate (Nicolas vs. Nicolas 63 Phil 332).
The other expenses, namely, P19.30 for the lawyer's subsistence and P144
as the cost of the gift to the physician who attended to the testator during his
last s are allowable expenses.
IV. Irrigation fee — P1,049.58. —The appellants question the deductibility of
that expense on the ground that it seems to be a duplication of the item of
P1,320 as irrigation fee for the same 1966-67 crop-year.
The administrator in his comment filed on February 28, 1978 explained that
the item of P1,320 represented the "allotments" for irrigation fees to eight
tenants who cultivated the Intan crop, which allotments were treated as
"assumed expenses" deducted as farming expenses from the value of the
net harvests.
The explanation is not quite clear but it was not disputed by the appellants.
The fact is that the said sum of P1,049.58 was paid by the administrator to
the Penaranda Irrigation System as shown in Official Receipt No. 3596378
dated April 28, 1967. It was included in his accounting as part of the farming
expenses. The amount was properly allowed as a legitimate expense of
administration.
WHEREFORE, the lower court's order of April 29, 1968 is affirmed with the
modifications that the sum of (a) P1,603.11 as the living expenses of Librada
de Guzman. (b) P100 for stenographic notes, (c) P26.25 as representation
expenses, and (d) P268.65 as expenses for the celebration of the first
anniversary of the decedent's death are disallowed in the administrator's
accounts. No costs.
SO ORDERED.
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