G.R. No.

118671 January 29, 1996

THE ESTATE OF HILARIO M. RUIZ vs. THE COURT OF APPEALS

PUNO, J.:

Hilario M. Ruiz executed a holographic will naming as his heirs his only son, Edmond Ruiz, his
adopted daughter, Maria Pilar Ruiz Montes, and his three granddaughters from Edmond Ruiz, Maria
Cathryn, Candice Albertine and Maria Angeline. The testator bequeathed to his heirs substantial
cash, personal and real properties and named Edmond Ruiz executor of his estate.

Hilario Ruiz died and the cash component of his estate was distributed among his heirs in
accordance with his will. For unbeknown reasons, Edmond, the named executor, did not take any
action for the probate of his father's holographic will.

Four years after the testator's death, Maria Pilar Ruiz Montes filed before the RTC of Pasig, a
petition for the probate and approval of Hilario Ruiz's will and for the issuance of letters testamentary
to Edmond Ruiz. Edmond opposed the petition on the ground that the will was executed under
undue influence.

One of the properties of the estate was leased out by Edmond Ruiz to third persons. The probate
court ordered Edmond to deposit the rental deposit and payments representing the one-year lease
of the Valle Verde property. Edmond turned over the balance of the rent after deducting repair and
maintenance expenses on the estate. He 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.

Edmond withdrew his opposition to the probate of the will. Consequently, the probate court admitted
the will to probate and issued letters testamentary to Edmond. The Testate Estate of Hilario Ruiz,
with Edmond Ruiz as executor, filed a motion for the release of the rent payments deposited with the
Branch Clerk of Court. Montes opposed the motion and filed a motion 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 in accordance with the provisions of the holographic will.

The probate court denied the motion of Ruiz and granted the motion of Montes. Ruiz moved for
reconsideration and 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.
The probate court 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.

Petitioner assailed the order of the probate court before the Court of Appeals. The appellate court
dismissed the petition and sustained the probate court's order.

Whether the probate court deprived the petitioner of his right to take possession of all properties of
the estate as the executor of the will?

No. 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,"
The 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.
A.M. No. 2430 August 30, 1990

MAURO P. MANANQUIL vs. ATTY. CRISOSTOMO C. VILLEGAS

CORTES, J.:

Atty. Crisostomo C. Villegas was retained as counsel of Felix Leong, one of the heirs of the late
Felomina Zerna, who was appointed as administrator of the Testate Estate of the Felomina Zerna.

Felix Leong was designated as administrator and owner, by testamentary disposition, of 5/6 of
parcels of land included in the estate. A lease contract was executed between Felix Leong and the
partnership of HIJOS DE JOSE VILLEGAS, wherein Atty. Villegas is a partner, involving the sugar
lands of the estate. The lifetime of the lease contract was 4 sugar crop years and was further
renewed several times over a period of 20 years. Mauro Mananquil, who was appointed special
administrator after Felix Leong died, 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.

The Solicitor General found that Atty. Villegas 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.

Whether prior authority from the probate court should have been secured before executing the lease
contract?

No. 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.

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.
G.R. No. L-19265 May 29, 1964

MOISES SAN DIEGO, SR. vs. ADELO NOMBRE and PEDRO ESCANLAR

PAREDES, J.:

Adelo Nombre was the duly constituted judicial administrator. He leased one of the properties of the
estate (a fishpond in Kabankaban, Negros Occidental) to Pedro Escanlar. The terms of the lease
was for 3 years, with a yearly rental of P3,000.00. The transaction had been done without previous
authority or approval of the Court where the proceedings was pending.

Nombre was later removed as administrator by Order of the court and Sofronio Campillanos was
appointed in his stead. Escanlar was cited for contempt for his refusal to surrender the fishpond to
the newly appointed administrator.

Subsequently, Campillanos filed a motion asking for authority to execute a lease contract of the
same fishpond, in favor of Moises San Diego, Sr. for 5 years at a yearly rental of P5,000.00.
Escanlar was not notified of such motion. Nombre presented a written opposition to the motion of
Campillanos pointing out that the fishpond had been leased by him to Escanlar for 3 years and
alleging 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 CFI of Negros Occidental 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 filed a motion for reconsideration but it was
denied.

A petition for certiorari was presented with the Court of Appeals. 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, held that – 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.1äwphï1.ñët

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.

Moises San Diego, Sr., who was not a party in the case, intervened and moved for a reconsideration
of the above judgment. The Court of Appeals denied the motions for reconsideration.

Whether a judicial administrator can validly lease property of the estate without prior judicial authority
and approval? Yes.

Whether the provisions of the New Civil Code on Agency should apply to judicial administrators? No.

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, are in some respects, identical, the provisions on agency,
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 thru agreements, whereas the acts of a judicial administrator are subject to
specific provisions of law and orders of the appointing court.
G.R. No. L-46001 March 25, 1982

LUZ CARO vs. HONORABLE COURT OF APPEALS

GUERRERO, J.:

Alfredo Benito, Mario Benito, and Benjamin Benito were the original co-owners of two parcels of land
in Sorsogon. Mario died and his surviving wife, Basilia Lahorra, and his father, Saturnino Benito,
were subsequently appointed as joint administrators of his estate.

Benjamin Benito, executed a deed of absolute sale of his one-third undivided portion over said
parcels of land in favor of Luz Caro, for the sum of P10,000.00. Subsequently, with the consent of
Saturnino Benito and Alfredo Benito a subdivision title was issued to Luz Caro.

Basilia Lahorra Vda. de Benito learned that Luz Caro 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 a written offer to redeem the said one-third undivided share. Luz ignored said offer.

Basilia sought to intervene in the civil case for the 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. She then 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.

The trial court dismissed the complaint on the grounds that: (a) Basilia, 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 obligation of furnishing written notice of the
sale of his one-third undivided portion to possible redemptioners. Basilia’s motion for reconsideration
was likewise denied.

On appeal, the Court of Appeals found for Basilia and held that 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 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. The
motion for reconsideration filed by petitioner was denied.

Whether the administrator of Mario’s estate could exercise the right of redemption?

No. 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, 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).

Basilia 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.
G.R. No. L-29407 July 29, 1983

ESTATE OF AMADEO MATUTE OLAVE vs. HONORABLE MANASES G. REYES

RELOVA, J.:

The estate of Amadeo Matute Olave is the owner in fee simple of a parcel of land situated in
Tibambam, Sigaboy, Davao. SAMCO filed a civil case with the CFI of Davao against 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.

The parties in the civil case submitted to the respondent court an Amicable Settlement whereby the
said property of the estate was conveyed and ceded to SAMCO as payment of its claim. The said
Amicable Settlement was not submitted to and approved by the then Court of First Instance of
Manila nor notice thereof made to the beneficiaries and heirs in said special proceedings.

The respondent court 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.

Whether the prior approval of the probate court is needed in case of an amicable settlement for the
payment of debt of the estate?

Yes. 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 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 shall share pro-rata in the liquidation of the estate
of the deceased.

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." 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.