01 Nario v. Philippine American Life Ins. Co.
(1967) to avail of under one of the provisions of the said policy after the same
Rule 94 Bonds of Guardians
REYES, J. | (Galang)
RECIT READY
Facts:
Mrs. Nario was issued a life insurance policy by respondent; she designated
as irrevocable beneficiaries Delfin Nario and Ernesto Nario, her husband
and minor son, respectively. Mrs. Nario then applied for a policy loan from
respondent, but it was denied because the written consent for the minor son
must not only be given by the father as legal guardian but must be authorized
by the court in a competent guardianship proceeding. Mrs. Nario then
decided to surrender her policy and demanded the cash surrender value
thereof, which was denied by the respondents for the same reason.
Issue:
WON court authorization is needed for the policy loan application and the
surrender of said policy
Held:
YES, judicial authorization is necessary for the consent to be given by the
father to a policy loan or to the surrender of a life insurance policy wherein
a minor has a vested interest worth P2,500.
Doctrine:
As there was no such petition and bond, the consent given by the
father-guardian, for and in behalf of the minor son, without prior
court authorization, to the policy loan application and the surrender
of said policy, was insufficient and ineffective, and defendant-
appellee was justified in disapproving the proposed transactions in
question.
FACTS:
1. Mrs. Alejandra Santos-Nario was, upon application, issued by the
Philippine American Life Insurance Co., a life insurance policy under
a 20-year endowment plan, with a face value of P5,000; she designated
thereon her husband, Delfin Nario, and their unemancipated minor
son, Ernesto Nario, as her irrevocable beneficiaries.
2. Mrs. Nario then applied for a loan on the above stated policy with the
Insurance Company, which she, as a policy-holder, has been entitled
has been in force for 3 years – for the purpose of using the proceeds
for the school expenses of Ernesto.
a. Said application bore the written signature and consent of
Delfin Nario in two capacities: first, as one of the irrevocable
beneficiaries; and the other, as the father-guardian of said
minor son and irrevocable beneficiary, Ernesto Nario, and as
legal administrator of the minor’s properties, pursuant to
Article 320 of the Civil Code.
b. The Insurance Company denied the application because the
written consent for the minor son must not only be given by
his father as legal guardian but it must be authorized by the
court in a competent guardianship proceeding.
3. Thereafter, Mrs. Nario signified her decision to surrender her policy,
which she was entitled to avail of under the provisions of the same
policy, and demand the cash surrender value which then amounted to
P520.
a. The Insurance Company likewise denied the surrender of the
policy on the same ground given in disapproving the load
policy application.
4. Hence, Mr. and Mrs. Nario brought suit against respondent, seeking
to compel the latter to grant their policy loan and/or to accept the
surrender of policy in exchange for its cash value.
5. The trial court ruled in favor of the respondent.
6. Petitioner appealed directly to the Supreme Court, contending that the
minor’s interest to only one-half of the policy’s cash surrender value
of P520; that under Rule 96, Section 2 of the Revised Rules of Court,
payment of the ward’s debts is within the powers of the guardian,
where no realty is involved; hence, there is no reason why the father
may not validly agree to the proposed transaction on behalf of the
minor without need of court authority.
ISSUE:
WON court authorization is needed for the policy loan application and the
surrender of said policy
a. YES, judicial authorization is necessary for the consent to be given
by the father to a policy loan or to the surrender of a life insurance
policy wherein a minor has a vested interest worth P2,500.
DISPOSITIVE PORTION: a. Since the law merely constitutes the parent as legal
Wherefore, the decision appealed from is affirmed. Costs against appellants administrator of the child's property (which is a general
Nario. So ordered. power), the parent requires special authority for the acts above
specified, and this authority can be given only by a court. This
RULING: restricted interpretation of the parent's authority becomes all
1. The full face value of the policy is P5,000.00 and the minor's vested the more necessary where as in the case before us, there is no
interest therein, as one of the two (2) irrevocable beneficiaries, consists bond to guarantee the ward against eventual losses.
of one-half (1/2) of said amount or P2,500.
2. The Article 320 and 326 of Civil Code have already been implemented
and clarified in our Revised Rules of Court which provides—
SEC. 7. Parents as guardians.—When the property of the child
under parental authority is worth two thousand pesos or less, the
father or the mother, without the necessity of court appointment,
shall be his legal guardian. When the property of the child is worth
more than two thousand pesos, the father or the mother shall be
considered guardian of the child's property, with the duties and
obligations of guardians under these rules, and shall file the
petition required by Section 2 hereof. For good reasons the court
may, however, appoint another suitable person." (Rule 93)
3. It appearing that the minor beneficiary's vested interest or right on
the policy exceeds two thousand pesos (P2,000); that plaintiffs did
not file any guardianship bond to be approved by the court; and as
later implemented in the above quoted Section 7, Rule 93 of the
Revised Rules of Court, plaintiffs should have, but, had not, filed
a formal application or petition for guardianship, plaintiffs-parents
cannot possibly exercise the powers vested on them, as legal
administrators of their child's property, under articles 820 and 326
of the Civil Code.
4. As there was no such petition and bond, the consent given by the
father-guardian, for and in behalf of the minor son, without prior
court authorization, to the policy loan application and the surrender
of said policy, was insufficient and ineffective, and defendant-
appellee was justified in disapproving the proposed transactions in
question.
5. The result would be the same even if we regarded the interest of
the ward to be worth less than P2,000.00. While the father or
mother would in such event be exempt from the duty of filing a
bond, and securing judicial appointment, still the parent's authority
over the estate of the ward as a legal-guardian would not extend to
acts of encumbrance or disposition, as distinguished from acts of
management or administration.
 02 Arroyo vs. Jungsay
94 – Bonds of Guardians
Ponente J. TRENT (NICO)
RECIT READY
Facts: The creditor who is the new guardian is claiming against the
old guardian and his sureties. The sureties are contending that they
be credited with their property, as the old guardian has properties
which can be attached.
Issue: WON the properties of the old guardian can be attached and
the sureties credited with their property?
Held: NO. The property pointed out by the sureties is not sufficient
to pay the indebtedness; it is not salable; it is so encumbered that
third parties have, as we have indicated, full possession under claim
of ownership without leaving to the absconding guardian a fractional
or reversionary interest without determining first whether the claim
of one or more of the occupants is well founded.
Doctrine: Where a judgment has been rendered against a
guardian and his sureties, the latter are not entitled to be DISPOSITIVE PORTION:
credited with the value of certain property levied upon as that of
the former when such property is in the exclusive possession of 1. The judgment appealed from, being in accordance with the law, the
third parties under claim of ownership. same is hereby affirmed, with costs against the appellants .
FACTS:
1. The plaintiff in this case is the guardian of one Tito Jocsing, an
imbecile, appointed by the court to succeed Jungsay, the former
guardian, who absconded with the funds of his ward. The defendants
are the absconding guardian and his bondsmen. From a judgment in
favor of the plaintiff and against the defendants for the sum of
P6,000, together with interest and costs, the bondsmen appealed.
2. The principal question presented for our consideration is whether
the appellants should be credited with P4,400, the alleged value of
certain property attached as that of the absconding guardian, all of
which is in the exclusive possession of third parties under claim of
ownership.
3. The appellants in contending for the credit, rely upon article 1834
of the Civil Code, which gives to the surety the benefit of a levy
(exclusion), even when a judgment is rendered against both the
surety and the principal. But, according to article 1832, before the
surety is entitled to this benefit, he must point out to the creditor
property of the principal debtor which can be sold and which is
sufficient to cover the amount of the debt.
ISSUE:
1. WON in a judgment against a guardian and his sureties,
the sureties are entitled to be credited with the value of certain
property levied upon that belongs to the guardian but is in the
exclusive possession of third parties under a claim of ownership?
RULING:
In Hill & Co. vs. Bourcier and Pond (29 La. Ann., 841), where
provisions similar to our Civil Code were under consideration, the
court said:
"The surety has the right, under certain circumstances, to demand the
discussion of the property of the principal debtor. Where suit is
brought against the surety alone, he may interpose the plea, and
compel the creditor to discuss the principal debtor. The effect of this wherein the sureties are made parties and given an opportunity to be
is to stay proceedings against the surety until judgment has been heard. All this was done in the instant case.
obtained against the principal debtor, and execution against his
property has proved insufficient. When the suit is brought against the
surety and the principal debtor the plea of discussion does not
require or authorize any suspension of the proceedings; but the
judgment will be so modified as to require the creditor to proceed by
execution against the property of the principal, and to exhaust it
before resorting to the property of the surety. (Bernard vs. Custis, 4
Martin, 215; Bands vs. Brander, 13 La., 276.)

"In either case, the surety who desires to avail himself of this right
must demand it in limine, 'on the institution of proceedings against
him.' He must, moreover, point out to the creditor property of the
principal debtor, not encumbered, subject to seizure; and must
furnish a sufficient sum to have the discussion carried into effect. (R.
C. C., 3045, 3046, 3047.)

A plea which does not meet these requirements must be disregarded.

(Robechot vs. Folse, 11 La., 1336; Bands vs. Brander, 13 La., 176)"

The property pointed out by the sureties is not sufficient to pay the
indebtedness; it is not salable; it is so encumbered that third parties
have, as we have indicated, full possession under claim of ownership
without leaving to the absconding guardian a fractional or
reversionary interest without determining first whether the claim of
one or more of the occupants is well founded. In all these respects
the sureties have failed to meet the requirements of article 1832 of
the Civil Code.

Where a guardian absconds or in beyond the jurisdiction of the court,

the proper method, under article 1834 of the civil Code and section
577 of the Code of Civil Procedure, in order to ascertain whether such
guardian is liable and to what extent, in order to bind the sureties on
his of official bond, is by a proceeding in the nature of a civil action