Reynoso vs Santiago

Facts:

Leoncio Cadiz and other heirs of Salvadora Obispo presented an application in the Court of the First
Instance of Quezon for the administration of the property of the deceased as intestate proceeding No.
2914. Victorio Reynoso and Juan Reynoso, Salvadora Obispo's surviving spouse and eldest son
respectively, opposed the application and filed a document, which purported to be the last will and
testament of Salvadora Obispo, with a counter petition for its probate.

The trial court rejected that instrument as a forgery, but on the appeal the CA reversed the finding of
the trial court and found the will authentic and drawn with all the formalities of Law. Thereafter,
Victorio Reynoso And Juan Reynoso filed two petitions.

The first prayed that the special administrator, Meliton Palabrica, who had been appointed in special
proceeding No. 2914, be ordered to turn over the properties of the deceased and the proceeds of copra,
nuts and other agricultural products to Victorio Reynoso, and to render an accounting within a
reasonable time, It also asked for the closing of the intestate proceeding.

The other petition prayed that the estate be administered and settled in special proceeding No. 3107
and that Victorio Reynoso be appointed executor of Salvadora Obispo's last will and testament. It also
contained a prayer for an accounting by Palabrica and delivery by him to the new executor of the
properties that came into possession including the proceeds from the sales of copra, nuts, etc.

The trial court ruled that with respect to the opening of another expediente, His Honor believed that the
proposed change or substitution was " not only unnecessary but inconvenient and expensive." An
intestate proceeding like special proceeding like special proceeding No. 2914, could and should and
should be converted into a testate proceeding in the same original expediente without the necessity of
changing its number, name or title.

As to the appointment of the deceased's husband as executor or administrator the court said that action
on the petition should be withheld for the time being, because of the pendency on appeal of a case in
which the special administrator in special proceeding No. 2914 is plaintiff and appellee and Victorio
Reynoso defendant and appellant. It involves the question whether an extensive parcel of coconut land
is conjugal property or the exclusive property of the husband.

Issue:

1. WON the intestate proceeding should be discontinued and a new proceeding should be
instituted.

2. WON a regular executor should be appointed.

Ruling:
1. Whether the intestate proceeding already commenced should be discontinued and a new
proceeding under a separate number and title should be constituted is entirely a matter of form and lies
within the sound discretion of the court. In no manner does it prejudice the substantial rights of any
heirs or creditors. Amor propio is perhaps the only thing is at stake on this phase of the
controversy.lawphi1.net

2.

Yes, If one other than the surviving spouse is appointed, which is possible, the feared conflict will not
materialize. If Victorio Reynoso is chosen, a special administrator may be named to represent the estate
in the suit against him. Section 8 of Rule 87 provides that "If the executor or administrator has a claim
against the estate he represents, he shall give notice thereof, in writing, to the court, and the court shall
appoint a special administrator who shall, in the adjustment of such claim, have the same power and be
subject to the same liability as the general administrator or executor in the settlement of the claims."
The situation in which Victorio Reynoso is found with reference to the land within the spirit if not exactly
within the letter of this provision.

Subject to this observation, an administrator should be appointed without delay in accordance with the
final decision of the Court of Appeals. The appointment of a special administrator is justified only when
there is delay in granting letters testamentary or of administration occasioned by an appeal from the
allowance or disallowance of a will or some other cause. The Court of Appeals having decreed the
probate of the will and the appointment of an albacea, there is no valid reason for the further retention
of a special administrator. The appointment of a regular administrator is necessary for the prompt
settlement and distribution of the estate. There are important duties devolving on a regular
administrator which a special administrator cannot perform, and there are many actions to be taken by
the court which could not be accomplished before a regular administrator is appointed.
Stronghold Insurance vs Republic-Asahi

Facts:

On May 24, 1989, Republic-Asahi Glass Corporation entered into a contract with Jose D. Santos, Jr., the
proprietor of JDS Construction (JDS), for the construction of roadways and a drainage system in
Republic-Asahi's compound which was supposed to be completed within a period of two hundred forty
(240) days beginning May 8, 1989. In order 'to guarantee the faithful and satisfactory performance of its
undertakings JDS, shall post a performance bond of P795,000.00. JDS executed, jointly and severally
with petitioner Stronghold Insurance Co., Inc.

However, during the course of the construction, the engineers of respondent called the attention of JDS
to the alleged alarmingly slow pace of the construction. Thereafter, dissatisfied with the progress of the
work undertaken by JDS, Republic-Asahi extrajudicially rescinded the contract. Respondent alleged that,
as a result of JDS's failure to comply with the provisions of the contract it had to hire another contractor
to finish the project, for which it incurred an additional expense of P3,256,874.00.

Likewise, respondent sent a letter to petitioner SICI filing its claim under the bond for not less
than P795,000.00. However, the letter went unheeded. So, respondent filed a complaint against JDS and
SICI. It sought from JDS payment of P3,256,874.00 and from JDS and SICI, jointly and severally, payment
of P750,000.00 as damages in accordance with the performance bond. Thereafter, Jose D. Santos died.
Petitioner, then filed its answer, alleging that the respondent's money claims against petitioner and JDS
have been extinguished by the death of Jose D. Santos, Jr. The trial court ruled in favor of respondent.
On appeal, the CA affirmed the trial court’s decision. It ruled that SICI's obligation under the surety
agreement was not extinguished by the death of Jose D. Santos, Jr. Consequently, Republic-Asahi could
still go after SICI for the bond.

Issue: WON the petitioner's liability under the performance bond was automatically extinguished by the
death of Santos, the principal.

Ruling:

No, as a general rule, the death of either the creditor or the debtor does not extinguish the
obligation. Obligations are transmissible to the heirs, except when the transmission is prevented by the
law, the stipulations of the parties, or the nature of the obligation. Only obligations that are
personal10 or are identified with the persons themselves are extinguished by death.

Section 5 of Rule 86 of the Rules of Court expressly allows the prosecution of money claims arising from
a contract against the estate of a deceased debtor. Evidently, those claims are not actually
extinguished. What is extinguished is only the obligee's action or suit filed before the court, which is not
then acting as a probate court.
Here, whatever monetary liabilities or obligations Santos had under his contracts with respondent were
not intransmissible by their nature, by stipulation, or by provision of law. Hence, his death did not result
in the extinguishment of those obligations or liabilities, which merely passed on to his estate. Death is
not a defense that he or his estate can set up to wipe out the obligations under the performance bond.
Consequently, petitioner as surety cannot use his death to escape its monetary obligation under its
performance bond.

As a surety, petitioner is solidarily liable with Santos in accordance with the Civil Code.

Under the law and jurisprudence, respondent may sue, separately or together, the principal debtor and
the petitioner herein, in view of the solidary nature of their liability. The death of the principal debtor
will not work to convert, decrease or nullify the substantive right of the solidary creditor. Evidently,
despite the death of the principal debtor, respondent may still sue petitioner alone, in accordance with
the solidary nature of the latter's liability under the performance bond.