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G.R. No. 72424 February 13, 1989 and Milagros K. Gonzales, said amount to be taken out of the
available funds of the estate. (Rollo pp. 57-58)
INTESTATE ESTATE OF CARMEN DE LUNA (deceased),
CATALINA MORALES GONZALES, administratrix-petitioner, Subsequently, another order dated October 22, 1980 was issued, to
vs. wit:
INTERMEDIATE APPELLATE COURT and ESPERANZA DE
Acting upon the "Urgent Ex-Parte Motion For Authority To Withdraw
LUNA GONZALES AZUPARDO & ISIDORO DE LUNA
From Bank Deposits and To Mortgage Estate Properties" filed by the
GONZALES, respondents.
administratrix, through counsel, dated October 15, 1980, and for the
Bausa, Ampil, Suarez, Parades & Bausa for petitioner. purpose of implementing the Order of this Court on October 13,
1980, the above motion is hereby granted.
CV Law Office & Associates for private respondents.
Accordingly, the administratrix, Catalina Vda. de Gonzales, is hereby
authorized to satisfy the amount of P500,000.00 which was ordered
GUTIERREZ, JR., J.: paid to the heirs of the deceased administrator Jose de Luna, out of
the bank deposits of the estate of Carmen de Luna with the Filipinas
This is a petition to review the resolution of the Court of Appeals
Bank and Trust Company and Philippine Trust Company, authorizing
dated July 19, 1985.
said administratrix to make a withdrawal and in the event that said
On April 10, 1964, Jose de Luna Gonzales and former Judge Ramon deposits are insufficient to cover said amount, to obtain loans from
Icasiano were appointed co-administrators of the estate of Carmen any reputable lending institution, offering by way of mortgage or
de Luna in Special Proceedings Case No. 52196. pledge, any property of the estate under administration, sufficient to
satisfy the balance remaining unpaid, after interest and bank
On March 3, 1968, Judge Icasiano died so Gonzales performed his
charges, and to inform the court of her compliance herewith.' (Rollo,
duties as sole administrator of the estate.
p. 58).
On February 4, 1980, Gonzales through counsel filed a motion for
Esperanza de Luna Gonzales Azupardo and Isidoro de Luna
allowances and payment of administrator's commission in
Gonzales appealed to the Court of Appeals.
accordance with Section 7, Rule 85 of the Rules of Court leaving the
matter to the discretion of the court. On September 17, 1982, the Court of Appeals through Justice
Gancayco decided in favor of the administrator and affirmed in toto
On February 13, 1980, the trial court issued an order requiring the
the orders appealed from.
administrator to define the fees he was demanding, furnishing copies
to all parties and their respective counsel who were then required to The appellants then filed a motion for reconsideration of the said
file their opposition if any, within ten (10) days from receipt. decision.
On February 23, 1980 Jose de Luna Gonzales died. His heirs filed in On July 19, 1985, the Court of Appeals speaking through Justice
his behalf on March 10, 1980 an Urgent Supplemental Motion for Porfirio Sison modified the decision promulgated on September 17,
allowances and payment of administrator's commission or fees 1982 with the following dispositive portion:
asking the amount of P100,000.00. Heir Trinidad Villajuan Vda. de
WHEREFORE, in the interest of justice and equity and to protect the
Martinez filed an opposition to which Catalina M. Gonzales, widow of
estate against undue or unauthorized waste and exhaustion which
the late administrator filed a reply.
preservation in the end will redound to the benefit of all the parties,
On May 26, 1980, the heirs of the deceased administrator filed an our decision of September 17, 1982 is hereby modified by adhering
urgent amended motion for payment of the deceased judicial to our finding that the late Jose de Luna Gonzales as Judicial
administrator's compensation asking for P500,000.00. An opposition Administrator of the estate of Carmen de Luna in Sp. Proc. No.
was filed by heir Trinidad Villajuan vda. de Martinez on the same 52196, is indeed entitled to his Administrator's fee, but in the
date. reduced and amount of P4,312.50 including the sum of Pl,000.00
previously received or still a balance of P3,312.50. No
Consequently, the trial court issued an order on May 26, 1980
pronouncement as to costs. (Rollo, p. 26)
setting the motion for hearing on May 30, 1980 at 9:00 o'clock in the
morning and directing that copies be served on the parties and their On October 7, 1985, the Court of Appeals denied the motion for
counsel. reconsideration of the aforesaid decision filed by the administratrix.
On May 30, 1980, the heirs of Esperanza de Luna Gonzales Hence, this petition for review.
Azupardo and Isidoro de Luna Gonzales filed their opposition to the
The lone assignment of error raised by the petitioner is that "the
motion and presented their witness, Siegfriedo Azupardo on July 16,
respondent appellate court committed serious legal error in the
1980. On August 20 1980, Genaro Sevilla, et al. as movants
interpretation and application of Section 7, Rule 85 of the Rules of
intervenors filed their manifestation that they are also opposing the
Court and acted with grave abuse of discretion amounting to lack or
motion and adopting the memorandum and evidence presented by
excess or jurisdiction in modifying the previous decision of the Court
the other heirs.
of Appeals dated September 17, 1982 by reducing the
On September 30, 1980, the trial court issued an order directing the administrator's commission from P500,000.00 (as adjudged by the
new administratrix Catalina M. Gonzales to submit within fifteen (15) Trial Court and upheld by the then Court of Appeals) to a mere
days from receipt a complete and sworn inventory of all the goods, P4,312.50 by its Resolution dated July 19, 1985.
chattels, rights, credits and estate of the deceased Carmen de Luna,
The issue posed for resolution is whether or not Jose de Luna
indicating therein the current values of each of these properties and
Gonzales is entitled to the amount of P500,000.00 by way of
with respect to the real properties, the current assessed as well as
compensation as administrator of the estate of Carmen de Luna.
market value thereof. The administratrix filed the inventory as of April
30, 1980 where the total of the real and personal property of the The opposing views of the parties are summarized by the trial court
estate was listed at P10,751,189.97. as follows:
On October 13, 1980, the trial court issued an order granting the The last inventory of the late Jose de Luna Gonzales on April 25,
compensation asked for by the late administrator which reads: 1975 showed a gross estate in the amount of P890,865.25, and
since then not only the personal assets of the estate increased by
In view of the foregoing, and for lack of sufficient grounds to deny
way of increments, dividends and interests earned but also the real
the compensation prayed for, the Court hereby grants the amount of
properties thereof, by way of additional fishponds, farm lands and
Five Hundred thousand Pesos (500,000.00) by way of compensation
coconut lands located in Bulacan, Bulacan and Catanawan, Quezon
of the deceased administrator Jose de Luna for the services
which said administrator discovered and brought to the estate, so
rendered by him as such administrator of the estate of Carmen de
much as that property of the estate increased in value. While it is
Luna for the period from April 10, 1964, up to February 22, 1980,
true as alleged in their urgent amended motion for payment of the
deducting therefrom the sum of P1,000.00 already paid to him
deceased administrator's compensation, that the value of the estate
pursuant to this Court's Order dated April 27, 1977, and authorizing
is conservatively placed at P2,000,000.00 yet this does not appear
payment of the balance thereof to his heirs, Mrs. Catalina M.
to be so, for the inventory as of April 30, 1980 of the present
Gonzales, and her children Jose Gonzales, Jr. Carmen G. de Asis
2

administratrix, Mrs. Catalina M. Gonzales, who is also the wife of the denies executor or administrator from profiting thereby; that the
late administrator, shows that the real and personal estate of the value of the estate increased by natural accretion or by government
deceased Carmen de Luna amounts to P10,751,189.97. This last re-assessment and not thru the efforts of the late administrator; that
inventory could have been the same inventory filed by the late the amount being claimed is highly unconscionable and
administrator, had he lived longer. The present administratrix, Mrs. unreasonable and besides it is not in consonance with the amount
Catalina Gonzales, was appointed as such on March 28, 1980 and specified under Rule 85, Sec. 7 which allows only one-fourth per
upon taking her oath of office and filing the corresponding cent of the entire value of the estate and which must be allowed only
administratrix's bond, was issued the corresponding letters of after a settlement of the estate is finally made; that the amount being
administration. At the hearing of her petition to be appointed new claimed as compensation is not itemized, hence, purely conjectural,
administratrix of the estate, she claims that during the lifetime of her hypothetical and without basis in fact and in law; that in cases where
husband, the former administrator, their joint efforts led to the compensation for extraordinary services are claimed, the better
discovery of the fishponds, farm lands and coconut lands in the practice is to itemize the account and explain fully in what particulars
province of Bulacan and Quezon, and the growth and accumulation the services are extraordinary or unusual; and that the late
of the assets and properties of the estate were due to their administrator Jose de Luna Gonzales had long been compensated
continuous, dedicated and concerned efforts coupled with the sound by the estate arising from' the admitted sale for voting rights of
and judicious care employed by them in the management of this Centro Escolar University shares, and for this matter this Court may
estate. She further testified that the late administrator had require an accounting under Rule 85, Sec. 8 of the Rules of Court;
adequately and religiously executed the trust reposed on him, having and lastly, that as admitted by movants themselves in their urgent
attended to the wise, advantageous and safe placement of the funds amended motion, that the administration of the estate spanned a
of the estate, but without however, neglecting the payment of the prolonged period of sixteen years and yet the same is not yet closed
estate and real estate taxes and the submission of his reports to the or terminated and therefore the administrator should be denied
Court. compensation for his services, for the prolongation of the settlement
of the estate is due entirely to his effort to defraud the heirs, and due
The claimant-heir, Trinidad Villajuan Vda. de Martinez and the other
to his neglect, the administration has been too expensive. (Rollo, pp.
claimant-heirs Esperanza de Luna Gonzales Azupardo and Isidoro
61-65)
de Luna Gonzales filed separate oppositions. Trinidad Villajuan Vda.
de Martinez claims that the counsel for the alleged heirs of Jose de Section 7, Rule 85 states:
Luna Gonzales including his surviving wife, administratrix Catalina
SEC. 7. What expenses and fees allowed executor or administrator.
M. Gonzales, is the law firm Bausa, Ampil, Suarez, Parades and
Not to charge for services as attorney. - Compensation provided by
Bausa, which is also the counsel for Centro Escolar University
will controls unless renounced. An executor or administrator shall be
wherein the shares of stocks of said university form the bulk of the
allowed the necessary expenses in the care, management, and
present estate so much so that Attys. Bausa, Ampil, Suarez,
settlement of the estate, and for his services, four pesos per day for
Parades and Bausa and Ass. have conflict of interests in handling
the time actually and necessarily employed, or a commission upon
the affairs of their aforesaid clients and that not only has said law
the value of so much of the estate as comes into his possession and
office conflicting interest but likewise its client, the present
is finally disposed of by him in the payment of debts, expenses,
administratrix Catalina M. Gonzales, who is at the same time a
legacies, or distributive shares, or by delivery to heirs or devisees, of
claimant of the estate under her administration. The oppositor further
two per centum of the first five thousand pesos of such value, one
asserts that claims against the estate can not be filed in the form of
per centum of so much of such value as exceed five thousand pesos
an urgent motion but must be filed as claims against the estate. It is
and does not exceed thirty thousand pesos, one-half per centum of
likewise claimed by the oppositor that the alleged heirs of Jose de
so much of such value as exceeds thirty thousand pesos and does
Luna Gonzales had never been substituted as parties in this
not exceed one hundred thousand pesos. But in any special case,
proceeding because no motion had ever been filed and no order had
where the estate is large, and the settlement has been attended with
been issued for substitution of the late Jose de Luna Gonzales. She
great difficulty, and has required a high degree of capacity on the
insinuates that the record of this case will show that oppositor
part of the executor or administrator, a greater sum may be allowed.
Trinidad Villajuan Vda. de Martinez bad long prayed for the
If objection to the fees allowed be taken, the allowance may be re-
appointment of Jerry Martines Hervas as the administrator of the
examined on appeal.
estate because Jose de Luna Gonzales had long become physically
incompetent to administer the estate; and that while it is true the bulk If there are two or more executors or administrators, the
of the estate consists of the shares of stocks of the Centro Escolar compensation shall be apportioned among them by the court
University, yet the late administrator, Jose de Luna Gonzales, had according to the services actually rendered by them respectively.
nothing to do with the increase in the number of shares of stocks of
When the executor or administrator is an attorney, he shall not
the Centro Escolar University, and if ever its value increased, the
charge against the estate any professional fees for legal services
said administrator had also nothing to do with the same inasmuch as
rendered by him.
during the long duration that Jose de Luna Gonzales was
administrator of the estate he never attempted to become a director When the deceased by will makes some other provision for the
of Centro Escolar University; that although the urgent motion speaks compensation of his executor, that provision shall be a full
of fishponds farm lands and coconut lands in Bulacan, Bulacan and satisfaction for his services unless by a written instrument filed in the
Catanuan, Quezon, which were discovered and brought to the court he renounces all claim to the compensation provided by the
estate, there were no titles to said properties and that said will.
administrator and his counsel had not done anything regarding the
Pursuant to the above provision, an administrator is entitled by way
same; and that the properties referred to by them have long been
of compensation to the following:
disposed of by the late Carmen de Luna in favor of innocent third
party. (a) P4.00 per day "for the time actually and necessarily employed"
by him as such administrator, or
The other group of claimant-heirs, Esperanza de Luna Gonzales
Azupardo and Isidoro de Luna Gonzales claim that the urgent (b) a "commission upon the value of so much of the estate as comes
amended motion of the heirs of the deceased Jose de Luna into his possession and was finally disposed of by him," according to
Gonzales violated the rule on prior notice as required and mandated the schedule therein provided.
by Rule 85 Section 10 of the Rules of Court which provides that
The appellate court in its resolution dated July 19, 1985 arrived at
before the account of an administrator is allowed notice shall be
the amount of P4,313.50 by applying the schedule provided in
given to persons interested of the time and place of examining and
computing for commissions. The respondents also contend that the
allowing the same; the said urgent amended motion is not under
estimates of the real properties reflected in the inventory were highly
oath and in utter disregard of the legal safeguards required under
exaggerated to jack-up the asking price and excluded from the
Rule 85 Section 9 of the Rules of Court which mandates that every
computation of the fee of the administrator the total value of the
matter with respect to account must be under oath; that movants if
stocks and cash deposits of the administrator. Consequently, it
allowed compensation should apportion the commission with the co-
placed the value of the estate at P1,500,000.00 more or less, the
administrator; that if there was an increase in the value of the estate
value presented by the lawyers of the administratrix in their first
or any part thereof, Sec. 2, Rule 85 strictly prohibits and expressly
3

motion for compensation of de Luna Gonzales, dated March 10,


1980.
We rule otherwise. The applicable provision is the proviso which
states: "in any special case, where the estate is large and the
settlement has been attended with great difficulty and has required a
high degree of capacity on the part of the executor or administrator,
a greater sum may be allowed." A wide latitude, leeway or discretion
is therefore given to the trial court to grant a greater sum. And the
determination of whether the administration and liquidation of an
estate have been attended with greater difficulty and have required a
high degree of capacity on the part of the executor or administrator
rests on the sound discretion of the court which took cognizance of
the estate. (Rodriguez v. Silva, 90 Phil. 752 [1952]). The trial court,
in applying this proviso awarded the sum of P500,000.00 as
administrator's compensation.
There appears to be no sound justification why the appellate court
should interfere with the exercise of the trial court's discretion,
absent a showing that the trial court committed any abuse of
discretion in granting a greater remuneration to the petitioner. The
trial court's order is based on substantial evidence and the
applicable rule.
In the case of Litton Mills v. Galleon Traders, et al. (G.R. No. 40867,
July 26, 1988), this court had the occasion to explain:
An act of a court or tribunal may only be considered as in grave
abuse of discretion when the same was performed in a capricious or
whimsical exercise of judgment which is equivalent to lack of
jurisdiction. The abuse of discretion must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of
law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion or personal hostility. (Butuan Bay
Export Co. v. CA, 97 SCRA 297).
The records of the case is replete with evidence to prove that the
late administrator Jose de Luna Gonzales had taken good care of
the estate and performed his duties without any complaint from any
of the heirs. In fact, the appellate court agrees with the trial court as
it held:
... While it may be true that the inventory of the properties of the
estate as of April 25, 1975 was only P 890,865.25 it has been shown
that the value of the estate has increased not only by the efforts of
the late administrator to take good care of the same but in
succeeding to locate other properties belonging to the estate so that
when he submitted the inventory of the properties, real and personal
of the estate as of April 13, 1980 the total appraisal thereof appears
to be over P10 M. No objection thereto appears to have been
interposed. (Rollo, p. 68)
And with regards to the inventory, the respondents did not even
present any evidence to counter or disprove the valuations made so
their claim that the estimated P10 million value of the properties was
exaggerated is without basis and purely conjectural. With the well
settled rule that the findings of the trial court are given great respect,
we therefore sustain the finding that the value of the estate is worth
P10 million as found by the trial court.
Considering the size of the estate and extent of the care given by the
administrator, the amount asked for is not unreasonable and should
therefore be allowed.
WHEREFORE, there appearing to be no manifest error or abuse of
discretion for the Court of Appeals to modify the trial court's orders,
the resolution of the Intermediate Appellate Court dated July 19,
1985 is hereby SET ASIDE and its previous decision dated
September 17, 1982 is REINSTATED.
SO ORDERED.
4

SECOND DIVISION the CA. He invokes Section 1, Rule 109 of the Revised Rules of
Court which enumerates the orders or judgments in special
G.R. No. 172879 February 2, 2011
proceedings from which parties may appeal. One of these is an
ATTY. RICARDO B. BERMUDO, Petitioner, order or judgment which settles the account of an executor or
vs. administrator.1 The rationale behind this multi-appeal mode is to
FERMINA TAYAG-ROXAS, Respondent. enable the rest of the case to proceed in the event that a separate
and distinct issue is resolved by the court and held to be final.2
x - - - - - - - - - - - - - - - - - - - - - - -x
But the earlier award in Atty. Bermudo’s favor did not settle his
G.R. No. 173364
account as administrator. Rather, it fixed his attorney’s fees for the
FERMINA TAYAG-ROXAS, Petitioner, legal services he rendered in the suit contesting Roxas’ right as sole
vs. heir. Consequently, Section 1 (d) of Rule 109 does not apply.
HON. COURT OF APPEALS and ATTY. RICARDO BERMUDO,
Actually, the CA decided with finality the award of attorney’s fees in
Respondents.
Atty. Bermudo’s favor in CA-G.R. CV 53143 when it fixed such fees
DECISION at 20% of the value of the estate’s lands. On remand of the case to
the RTC, Atty. Bermudo filed a motion for execution of the award in
ABAD, J.:
his favor which could be carried out only after the RTC shall have
These cases pertain to the right of an administrator, who happened determined what represented 20% of the value of the estate’s lands.
to be a lawyer, to collect attorney’s fees from the sole heir for The fixing of such value at ₱12,644,300.00 was not appealable since
successfully representing the latter in the suit contesting her right to it did not constitute a new judgment but an implementation of a final
inherit. one. Indeed, an order of execution is not appealable.3 Consequently,
Roxas’ remedy in contesting the RTC’s exercise of discretion in
The Facts and the Case
ascertaining what constitutes 20% of the value of the estate’s lands
On October 19, 1979 Atty. Ricardo Bermudo (Atty. Bermudo), as is a special civil action of certiorari.
executor, filed a petition for his appointment as administrator of the
Two. Roxas asserts that Atty. Bermudo is not entitled to attorney’s
estate of Artemio Hilario (Hilario) and for the allowance and probate
fees but only to compensation as administrator in accordance with
of the latter’s will before the Regional Trial Court (RTC) of Angeles
Section 7, Rule 85 of the Rules of Court.
City. The testator instituted Fermina Tayag-Roxas (Roxas) as his
only heir but several persons, who claimed to be Hilario’s relatives, But Atty. Bermudo did not only serve as administrator of the estate.
opposed the petition. On October 28, 1987 the RTC rendered a He also served as Roxas’ counsel in the suit that assailed her right
decision, allowing the will and recognizing Roxas as Hilario’s sole as sole heir. Atty. Bermudo brought the contest all the way up to this
heir. On appeal, the Court of Appeals (CA) affirmed the RTC Court to defend her rights to her uncle’s estate. And Atty. Bermudo
decision. This Court sustained the CA decision on December 7, succeeded. Acting as counsel in that suit for Roxas was not part of
1992. his duties as administrator of the estate. Consequently, it was but
just that he is paid his attorney’s fees.
When the decision constituting Roxas as the sole heir became final,
Atty. Bermudo who also served as counsel for her in the actions Besides, Atty. Bermudo’s right to attorney’s fees had been settled
concerning her inheritance filed a motion to fix his legal fees and to with finality in CA-G.R. CV 53143.1avvphil This Court can no longer
constitute a charging lien against the estate for the legal services he entertain Roxas’ lament that he is not entitled to those fees.
rendered. On August 16, 1995 the RTC granted him fees equivalent
Three. Atty. Bermudo assails the CA’s reduction of his attorney’s
to 20% of the estate and constituted the same as lien on the estate’s
fees from ₱12,644,300.00 to ₱4,234,770.00. In fixing the higher
property. Roxas appealed the order to the CA in CA-G.R. CV 53143.
amount, the RTC relied on the advice of an amicus curiae regarding
On July 27, 2000 the CA rendered a decision that modified the RTC the value of the lands belonging to the estate. But the CA found such
Order, limiting Atty. Bermudo’s compensation as administrator to procedure unwarranted, set aside the RTC’s valuation, and used the
what Section 7, Rule 85 of the Rules of Court provides and making values established by the Angeles City Assessor for computing the
his lawyer’s fees 20% of the value of the land belonging to the lawyer’s fees of Atty. Bermudo. The Court finds no compelling
estate. Atty. Bermudo subsequently filed a motion with the RTC for reason to deviate from the CA’s ruling. Given their wide experience
execution and appraisal of the estate on which his 20% and the official nature of their work, the city assessors’ opinions
compensation would be based. On October 1, 2004 the RTC deserve great weight and reliability.4 Thus, the Court must sustain
granted the motion and ordered Roxas to pay Atty. Bermudo the CA’s computation based on the market values reflected on the
₱12,644,300.00 as attorney’s fees with interest at the rate of 6% per schedule proposed by the Angeles City Assessor.
annum. Roxas challenged the order before the CA through a petition
WHEREFORE, the Court AFFIRMS the decision of the Court of
for certiorari.
Appeals in CA-G.R. SP 87411 dated December 19, 2005.
On December 19, 2005, using a different valuation of the land of the
SO ORDERED.
estate, the CA ordered Roxas to pay Atty. Bermudo a reduced
amount of ₱4,234,770.00 as attorney's fees with interest at 6% per
annum. Atty. Bermudo’s motion for reconsideration having been
denied, he filed a petition for review before this Court in G.R.
172879. Roxas also filed a motion for partial reconsideration of the
CA decision and when this was denied, she filed a petition for
certiorari with this Court in G.R. 173364.
The Issues Presented
The issues presented in these cases are:
1. Whether or not the CA erred in not dismissing Roxas’ special civil
action of certiorari when her remedy should have been an appeal
from the settlement of his account as administrator;
2. Whether or not the CA erred in holding that Atty. Bermudo, as
administrator, is entitled to collect attorney’s fees; and
3. Whether or not the CA erred in reducing Atty. Bermudo’s
attorney’s fees from ₱12,644,300.00 to ₱4,234,770.00.
The Court’s Rulings
One. Atty. Bermudo points out that Roxas’ remedy for contesting the
RTC order of execution against her should be an ordinary appeal to
5

THIRD DIVISION been accompanied by any record on appeal as required under the
Interim Rules and by Rule 109 of the Rules of Court."10
G.R. No. 127165 May 2, 2006
On 27 July 1993, petitioner filed a Notice of Attorney's Lien
SALONGA HERNANDEZ & ALLADO, Petitioner,
equivalent to three percent (3%) of the total gross estate of the late
vs.
Doña Adela S. Pascual as well as the fruits thereof based on the
OLIVIA SENGCO PASCUAL and THE HONORABLE COURT OF
court approved inventory of the estate, pursuant to the retainer
APPEALS, Respondents.
agreement signed by and between petitioner and Olivia S. Pascual,
DECISION on 25 August 1987. In an Order dated 4 November 1993, the
Probate Court ruled that petitioner's "notice of attorney's lien, being
TINGA, J.:
fully supported by a retainer's contract not repudiated nor questioned
Petitioner, a professional law partnership, brings forth this Petition by his client Olivia S. Pascual, is hereby noted as a lien that must be
for Review assailing the Decision1 of the Court of Appeals dated 22 satisfied chargeable to the share of Olivia S. Pascual."11 This was
December 1995. The appellate court had affirmed two orders followed by another Order, dated 11 November 1993, wherein it was
promulgated by the Malabon Regional Trial Court (RTC), Branch 72 directed "that notice be x x x given, requiring all persons having
(Probate Court), in Sp. Proc. No. 136-MN, entitled "In the Matter of claims for money against the decedent, Doña Adela S. Vda. de
Testate Estate of Doña Adela Pascual, Dr. Olivia S. Pascual, Pascual, arising from contracts, express or implied, whether the
Executrix." same be due, not due, or contingent, for funeral expenses and
expenses of the last sickness of the said decedent, and judgment for
The case actually centers on two estate proceedings, that of Doña
money against her, to file said claims with the Clerk of Court at
Adela Pascual (Doña Adela) and the other, her husband Don Andres
Malabon, Metro Manila, within six (6) months from November 4,
Pascual's (Don Andres), who predeceased her. Don Andres died
1993."12
intestate, while Doña Adela left behind a last will and testament. The
dispute over the intestate estate of Don Andres has spawned at Accordingly, on 22 November 1993, petitioner filed a Motion to
least two cases already settled by this Court.2 Annotate Attorney's Lien on Properties of the Estate of Doña Adela
Vda. de Pascual.13
On 1 December 1973, an intestate proceeding for the settlement of
the estate of Don Andres was commenced by his widow Doña Adela It was at this stage, on 19 January 1994, that the Intestate Court
before the then Court of First Instance, now Regional Trial Court of rendered a Decision in Sp. Proc. No. 7554, finally giving judicial
Pasig, Branch 23 (Intestate Court), docketed as Sp. Proc. No. 7554. approval to the aforementioned 1985 Compromise Agreement, and
Apart from his wife, who bore him no children, Don Andres was partitioning the estate of Don Andres by adjudicating one-fourth (1/4)
survived by several nephews and nieces from his full-blood and half- thereof to the heirs of Don Andres and three-fourths (3/4) thereof to
blood brothers.3 This proceeding proved to be the source of many the estate of Doña Adela. The Intestate Court also awarded
controversies, owing to the attempts of siblings Olivia and Hermes attorney's fees to Atty. Jesus I. Santos, equivalent to 15% of the
Pascual, acknowledged natural children of Don Andres's brother, three-fourths (3/4) share of the estate of Doña Adela.14 Olivia
Eligio, to be recognized as heirs of Don Andres. Olivia and Hermes Pascual filed a petition for annulment of the award of attorney's fees
Pascual procured the initial support of Doña Adela to their claims. with the Court of Appeals, but the same was denied, first by the
However, on 16 October 1985, the other heirs of Don Andres appellate court, then finally by this Court in its 1998 decision in
entered into a Compromise Agreement over the objections of Olivia Pascual v. Court of Appeals.15
and Hermes Pascual, whereby three-fourths (3/4) of the estate
On 26 April 1994, petitioner filed a Motion for Writ of Execution for
would go to Doña Adela and one-fourth (1/4) to the other heirs of
the partial execution of petitioner's attorney's lien estimated at
Don Andres, without prejudice to the final determination by the court
P1,198,097.02. The figure, characterized as "tentative," was arrived
or another compromise agreement as regards the claims of Olivia
at based on a Motion to Submit Project Partition dated 26 October
and Hermes Pascual.4 Subsequently, the Intestate Court denied the
1993 filed by Olivia Pascual, which alleged the gross appraised
claims of Olivia and Hermes Pascual. Said denial was eventually
value of Doña Adela's estate at P39,936,567.19. This sum was in
affirmed by this Court in 1992 in Pascual v. Pascual-Bautista,5
turn derived from the alleged value of the total estate of Don Andres,
applying Article 992 of the Civil Code.
three-fourths (3/4) of which had been adjudicated to Doña Adela. At
In the meantime, Doña Adela died on 18 August 1987, leaving the same time, petitioner noted that the stated values must be
behind a last will and testament executed in 1978, designating Olivia considered as only provisional, considering that they were based on
Pascual as the executrix, as well as the principal beneficiary of her a July 1988 appraisal report; thus, the claim for execution was,
estate. The will also bequeathed several legacies and devises to according to petitioner, without prejudice to an updated appraisal of
several individuals and institutions. the properties comprising the gross estate of Doña Adela.16
Olivia Pascual then engaged the services of petitioner in connection On 29 April 1994, Olivia Pascual, through Atty. Antonio Ravelo, filed
with the settlement of the estate of Doña Adela. Their agreement as her comment and/or opposition to the motion for the issuance of a
to the professional fees due to petitioner is contained in a letter writ of execution on attorney's fees. She argued that a lawyer of an
dated 25 August 1987, signed by Atty. Esteban Salonga in behalf of administrator or executor should charge the individual client, not the
petitioner and Olivia Pascual. It is stipulated therein, among others, estate, for professional fees. Olivia Pascual also claimed, citing
that the final professional fee "shall be 3% of the total gross estate jurisprudence17, that the counsel claiming attorney's fees should give
as well as the fruits thereof based on the court approved inventory of sufficient notice to all interested parties to the estate, and that such
the estate. Fruits shall be reckoned from the time of [Olivia was not accomplished by petitioner considering that no notices were
Pascual's] appointment as executrix of the estate. The 3% final fee given to the several legatees designated in Doña Adela's will. 18 It
shall be payable upon approval by the court of the agreement for the was further argued that the motion for execution was premature,
distribution of the properties to the court designated heirs of the considering that the proceedings before the Intestate Court had not
estate."6 yet been terminated; that the computation of the figure of
P1,198,097.02 was erroneous; and that the enforcement of the writ
On 26 August 1987, private respondent, represented by petitioner,
of execution on the undivided estate of Don Andres would prejudice
commenced a petition for the probate of the last will and testament
his other heirs entitled to one-fourth (1/4) thereof.
of Doña Adela before the Probate Court, docketed as Sp. Proc. No.
136-MN and raffled to Branch 72 presided by Judge Benjamin M. On 2 June 1994, the Probate Court issued the first assailed order
Aquino, Jr. The petition was opposed by a certain Miguel Cornejo, denying the motion for writ of execution in view of the fact that "the
Jr. and his siblings, who in turn presented a purported will executed bulk of the estate of the late Doña Adela S. Vda. De Pascual is still
in 1985 by Doña Adela in their favor. 7 tied-up with the estate of the late Don Andres Pascual, the
proceedings over which and the final disposition thereof with respect
After due trial, on 1 July 1993, the Probate Court rendered a
to the partition and segregation of what is to form part of the estate
Decision8 allowing probate of the 1978 Last Will and Testament of
of the late Doña Adela S. Vda. De Pascual is pending with another
Doña Adela and disallowing the purported 1985 Will. Letters
court sitting in Pasig, Metro Manila, and for having been prematurely
testamentary were issued to Olivia Pascual.9 Cornejo attempted to
filed."19
appeal this decision of the Probate Court, but his notice of appeal
was denied due course by the Probate Court, said notice "not having
6

On 14 November 1994, Olivia Pascual, filed with the Probate Court a and interested parties, to direct the payment of his fees as expenses
Motion to Declare General Default and Distribution of Testamentary of administration.28 Lacson, it is alleged, was inappropriately cited,
Dispositions with Cancellation of Administrator's Bond. It was noted since that case involved an executor who
therein that no creditor had filed a claim against the estate of Doña
concurrently was a lawyer who subsequently claimed attorney's fees
Adela despite due notice published pursuant to Section 1, Rule 86 of
as part of the expenses of administration. Petitioner also claims that
the Rules of Court. The Probate Court was also informed of the fact
the decision of the probate court admitting Doña Adela's will to
that the proceedings before the Intestate Court had already been
probate sufficiently satisfies the condition in the Retainer Agreement
terminated by reason of the 14 January 1994 Decision rendered by
that the final fee be payable "upon approval by the court of the
the latter court. It was also stated "that the corresponding estate
agreement for the distribution of the properties to the court
taxes had been paid as evidenced by the Estate Tax Return filed
designated heirs of the estate," the court-approved will comprising
with the Bureau of Internal Revenue, and of the Certificate of
the agreement referred to in the contract.
Authority issued by the said agency."20 Interestingly, it was also
manifested that two of the properties that formed part of the estates Petitioner also takes exception to the Probate Court's finding that
of the spouses, "the Ongpin Property" and "the Valenzuela "the bulk of the estate subject of this case, as far as this [c]ourt is
Property," had in fact already been partitioned between the estate of concerned, has not been turned over to the executrix or to the [c]ourt
Doña Adela and the heirs of Don Andres at the ratio of three-fourths itself," on which the appellate court predicated its ruling that the
(3/4) and one-fourth (1/4), respectively. motion for a writ of execution was premature. Petitioner submits that
the Probate Court ineluctably has jurisdiction over the estate of Doña
In response, petitioner filed a Comment/Manifestation praying that
Adela, and has necessarily assumed control over the properties
an order be issued:
belonging to the said estate. Thus, petitioner continues, there is no
(1) ordering the annotation of the attorney's lien on the properties longer need to await the turnover of the properties involved in the
comprising the estate of Doña Adela Pascual; intestate estate of Don Andres which constitute part of the testate
estate of Doña Adela since the Probate Court and the Intestate
(2) a writ of partial execution be issued for the satisfaction of the
Court have concurrent jurisdiction over these properties as they
attorney's lien of the undersigned counsel [herein petitioner] in
have not yet been physically divided.
relation to the Ongpin and Valenzuela properties for the amount of
P635,368.14,without prejudice to the issuance of a writ of execution Petitioner refers to the averment made by Olivia Pascual before the
after the re-appraisal of the present market value of the estate and Probate Court that the proceedings before the Intestate Court had
the determination of the amount due to [petitioner] as attorney's fees; already been terminated, and that the proceeds of the sale of the
Ongpin Property and the Valenzuela Property had in fact been
(3) ordering the appointment of a reputable appraisal company to re-
already divided based on the three-fourths (3/4) to one-fourth (1/4)
appraise the present market value of the estate of Doña Adela
ratio between the estate of Doña Adela and the heirs of Don Andres.
Pascual including the fruits thereof for the purpose of determining
Petitioner further points out that the Probate Court had authorized
the value of the attorney's fees of [petitioner]; and
and approved the sale of the Ongpin Property, yet refused to allow
(4) after the re-appraisal of the estate of Doña Adela Pascual a writ the partial execution of its claim for attorney's fees.
of execution be issued for the full satisfaction and settlement of the
Finally, petitioner asserts that the Probate Court erred in refusing to
attorney's lien of [petitioner].21
grant the prayer seeking the re-appraisal of the property of Doña
On 17 March 1995, the Probate Court issued an order which denied Adela's estate. Such re-appraisal, so it claims, is necessary in order
petitioner's motion for a re-appraisal of the property and the issuance to determine the three percent (3%) share in the total gross estate
of a partial writ of execution "for being prematurely filed as there is committed to petitioner by reason of the Retainer Agreement.
no exact estate yet to be inventoried and re-appraised, assuming re-
It appears that the thrust of the assailed Decision of the Court of
appraisal would be proper, because the bulk of the estate subject of
Appeals is along these lines: that petitioner may directly claim
this case, as far as this court is concerned, has not yet been turned
attorney's fees only against Olivia Pascual and not against the estate
over to the executrix or to the court itself."22
of Doña Adela; and that petitioner's claim is also premature since
Through a petition for certiorari and mandamus, petitioner assailed contrary to the requisite stipulated in the Retainer Agreement, there
the two orders of the Probate Court denying its motion for the is no court-approved agreement for the distribution of the properties
immediate execution, partial or otherwise, of its claim for attorney's of the estate of Doña Adela as yet.
fees: the 2 June 1994 Order and the 17 March 1995 Order.
As an initial premise, we consider whether a lawyer who renders
Nonetheless, the twin orders of the RTC were affirmed by the Court
legal services to the executor or administrator of an estate can claim
of Appeals, effectively precluding petitioner's attempt to execute on
attorney's fees against the estate instead of the executor or
its attorney's lien. The appellate court noted that the attorney's lien
administrator. Petitioner correctly cites Occeña v. Marquez29 as
issued by the Probate Court was chargeable only to the share of
providing the governing rule on that matter as previously settled in
Olivia Pascual, and not to the estate of Doña Adela, since it was
the 1905 case of Escueta v. Sy-Juilliong,30 to wit:
Olivia Pascual who entered into the agreement with petitioner for the
payment of attorney's fees in connection with the settlement of the The rule is that when a lawyer has rendered legal services to the
estate of Doña Adela. Citing Lacson v. Reyes,23 the Court of Appeals executor or administrator to assist him in the execution of his trust,
asserted that as a rule an administrator or executor may be allowed his attorney's fees may be allowed as expenses of administration.
fees for the necessary expenses he has incurred but he may not The estate is, however, not directly liable for his fees, the liability for
recover attorney's fees from the estate. payment resting primarily on the executor or administrator. If the
administrator had paid the fees, he would be entitled to
The Court of Appeals likewise noted that in the retainer agreement
reimbursement from the estate. The procedure to be followed by
between petitioner and Olivia Pascual, it is stipulated that "the 3%
counsel in order to collect his fees is to request the administrator to
final fee shall be payable upon approval by the court of the
make payment, and should the latter fail to pay, either to (a) file an
agreement for the distribution of the properties to the court
action against him in his personal capacity, and not as administrator,
designated heirs of the estate."24 On this score, the Court of Appeals
or (b) file a petition in the testate or intestate proceedings asking the
ruled that as the petition before it did not show "that an agreement
court, after notice to all the heirs and interested parties, to direct the
on the distribution of properties of the estate of Doña Adela S.
payment of his fees as expenses of administration. Whichever
Pascual has been submitted and approved by the probate court," 25
course is adopted, the heirs and other persons interested in the
the filing of the motion for execution and that of the motion for re-
estate will have the right to inquire into the value of the services of
appraisal of the market value of the estate were both premature.
the lawyer and on the necessity of his employment.31
Petitioner sought to reconsider the Decision of the Court of Appeals,
We reiterate that as a general rule, it is the executor or administrator
but in vain.26 Hence this petition.
who is primarily liable for attorney's fees due to the lawyer who
Petitioner argues that as held in Occeña v. Marquez,27 the counsel rendered legal services for the executor or administrator in relation
seeking to recover attorney's fees for legal services to the executor to the settlement of the estate. The executor or administrator may
or administrator is authorized to file a petition in the testate or seek reimbursement from the estate for the sums paid in attorney's
intestate proceedings asking the court, after notice to all the heirs fees if it can be shown that the services of the lawyer redounded to
7

the benefit of the estate.32 However, if the executor or administrator payable upon approval by the court of the agreement for the
refuses to pay the attorney's fees, the lawyer has two modes of distribution of the properties to the court designated heirs of the
recourse. First, the lawyer may file an action against the executor or estate."39 This is also made clear by the order noting the lien, which
administrator, but in his/her personal capacity and not as qualified that said lien was chargeable only to the share of Olivia
administrator or executor. Second, the lawyer may file a petition in Pascual, hence implying that at the very least, it may be claimed
the testate or intestate proceedings, asking the court to direct the only after her share to Doña Adela's estate is already determinate.
payment of attorney's fees as an expense of administration. If the
In rendering its assailed Decision, the Court of Appeals relied on this
second mode is resorted to, it is essential that notice to all the heirs
qualification made by the Probate Court that the lien for attorney's
and interested parties be made so as to enable these persons to
fees was chargeable only to the share of Olivia Pascual. Yet the
inquire into the value of the services of the lawyer and on the
Notice of Attorney's Lien only seeks to serve notice of the
necessity of his employment.
pendency of the claim for attorney's fees, and not the payment
Lacson v. Reyes,33 cited by the appellate court, involved an executor of such fees itself. On its own, the Notice of Attorney's Lien
who also happened to be the lawyer for the heirs who had filed the cannot serve as the basis for the Probate Court to authorize the
petition for probate. For that reason, that case is not squarely in payment to petitioner of attorney's fees.
point to the case at bar. It was pronounced therein that the
On the other hand, Escueta and its kindred cases do explicitly
administrator or executor of the estate cannot charge professional
recognize the recourse for the lawyer to directly make the claim
fees for legal services against the same estate, as explicitly provided
for attorney's fees against the estate, not the executor or
under Section 7, Rule 85 of the Rules of Court of 1985.34 No such
administrator. The filing of the Notice of Attorney's Lien and the
rule exists barring direct recovery of professional legal fees from the
qualificatory character of the rulings thereon, do not preclude
estate by the lawyer who is not the executor or administrator of the
the resort to the mode of recovery against the estate as
said estate. The limitations on such direct recovery are nonetheless
authorized by jurisprudence. Clearly then, we disagree with the
established by jurisprudence, as evinced by the rulings in Escueta
opinion of the Court of Appeals that attorney's fees can be
and Occeña.
claimed only against the share of Olivia Pascual.
The character of such claim for attorney's fees bears reiteration. As
The instant case is rooted in an incomplete attempt to resort to the
stated in Escueta, it partakes the nature of an administration
second mode of recovery of attorney's fees as authorized in
expense. Administration expenses include attorney's fees incurred in
Escueta, originating as it did from the denial of petitioner's Motion for
connection with the administration of the estate. 35 It is an expense
Writ of Execution, and not the Notice of Attorney's Lien. The Motion
attending the accomplishment of the purpose of administration
did expressly seek the payment of attorney's fees to petitioner.
growing out of the contract or obligation entered into by the personal
Escueta and Occeña, among other cases, did clearly lay down the
representative of the estate, and thus the claim for reimbursement
manner under which such fees may be paid out even prior to the
must be superior to the rights of the beneficiaries.36
final settlement of the estate as an administration expense directly
Notwithstanding, there may be instances wherein the estate should chargeable to the estate itself. The critical question in the present
not be charged with attorney's fees. If the costs of counsel's fees petition is thus whether this Motion for Writ of Execution satisfies the
arise out of litigation among the beneficiaries thereof themselves or requisites set in Escueta for a claim for attorney's fees directly
in the protection of the interests of particular persons, the estate chargeable against the estate. It does not.
generally cannot be held liable for such costs, although when the
The fact that the prayer for attorney's fees was cast in a motion and
administrator employs competent counsel on questions which affect
not a petition should not impede such claim, considering that the
his/her duties as the administrator and on which he/she is in
motion was nonetheless filed with the Probate Court. However, the
reasonable doubt, reasonable expenses for such services may be
record bears that the requisite notice to all heirs and interested
charged against the estate subject to the approval of the court.37 It
parties has not been satisfied. Doña Adela's will designated 19
has also been held that an administrator who brings on litigation for
other individuals apart from Olivia Pascual, and four (4) different
the deliberate purpose of defrauding the legitimate heirs and for his
institutions as recipients of devises or legacies consisting of real
own benefit is not entitled to reimbursement for counsel's fees
properties, jewelries, and cash amounts. Yet only Olivia Pascual was
incurred in such litigation.381avvphil.net
served with a copy of the Motion for Writ of Execution, the motion
Clearly then, while the direct recovery of attorney's fees from the which effectively sought the immediate payment of petitioner's
estate may be authorized if the executor refuses to pay such fees, attorney's fees. As early as 29 April 1994, Olivia Pascual, in
and claimed through the filing of the proper petition with the probate opposing the Motion for Writ of Execution, already pointed out that
court, such claim remains controvertible. This is precisely why petitioner had failed to give sufficient notice to all interested parties
Escueta and its progenies require that the petition be made with to the estate, particularly the several devisees and legatees so
notice to all the heirs and interested parties. named in Doña Adela's will.
It is these perspectives that we apply to the case at bar. Notably, Such notice is material to the other heirs to Doña Adela's estate. The
petitioner had filed both a Notice of Attorney's Lien and a Motion for payment of attorney's fees, especially in the amount of 3% of the
Writ of Execution. These two pleadings have distinct character and total gross estate as sought for by petitioner, substantially diminishes
must be treated as such. the estate of Doña Adela and may consequently cause the
diminution of their devises and legacies. Since these persons were
After Doña Adela's will had been admitted to probate, petitioner had
so named in the very will itself and the action for probate which was
initially filed a Notice of Attorney's Lien wherein it identified itself as
filed by petitioner itself, there is no reason why petitioner could not
"the attorney for the executrix named in the said will, Dra. Olivia S.
have given due notice to these persons on its claim for attorney's
Pascual", and sought to file its "claim and/or lien for attorney's fees
fees.
equivalent to Three Percent (3%) of the total gross estate," pursuant
to the 1987 Retainer Agreement. Copies of this Notice of Attorney's The requisite notice to the heirs, devisees, and legatees is anchored
Lien were furnished Attys. Fortunato Viray, Jr. and Crisanto Cornejo, on the constitutional principle that no person shall be deprived of
who appear on record to have served as counsels for the various property without due process of law.40 The fact that these persons
oppositors to the probate of the 1978 will of Doña Adela. This Notice were designated in the will as recipients of the testamentary
of Attorney's Lien was noted by the Probate Court in its Order of 4 dispositions from the decedent establishes their rights to the
November 1993, "as a lien that must be satisfied chargeable to the succession, which are transmitted to them from the moment of the
share of Olivia S. Pascual." death of the decedent.41 The payment of such attorney's fees
necessarily diminishes the estate of the decedent, and may
It may be so that petitioner, in filing this Notice of Attorney's Lien,
effectively diminish the value of the testamentary dispositions made
initially intended to hold Olivia Pascual, and not Doña Adela's estate,
by the decedent. These heirs, devisees, and legatees acquire
liable for the attorney's fees. It did identify itself as the lawyer of
proprietary rights by reason of the will upon the moment of the death
Olivia Pascual, and the Probate Court did note that the lien be
of the decedent, incipient or inchoate as such rights may be. Hence,
satisfied chargeable to the share of the executor. Yet it must also be
notice to these interested persons of the claims for attorney's fees is
noted that such lien, as it is, is only contingent on the final settlement
integral, so as to allow them to pose any objections or oppositions to
of the estate of Doña Adela, at such time, since the Retainer
Agreement on which the lien is hinged provides that the final fee "be
8

such claim which, after all, could lead to the reduction of their of this claim is not contractual in nature, but rather, as a
benefits from the estate. reimbursement for a necessary expense of administration, and
it will be allowed if it satisfies the criteria for necessary
The failure to notify the other heirs, devisees or legatees, to the
expenses of administration. Its entitlement can be established by
estate of Doña Adela likewise deprives these interested persons of
the actual services rendered by the lawyer necessary to the
the right to be heard in a hearing geared towards determining
accomplishment of the purposes of administration, and not
whether petitioner was entitled to the immediate payment of
necessarily by the contract of engagement of the attorney's services.
attorney's fees. Notably, petitioner, in filing its Motion for Writ of
Execution, had initially set the hearing on the motion on 29 April By filing their claim directly against the estate of Doña Adela,
1994, but one day prior to the scheduled hearing, gave notice petitioner has clearly resorted to this second cause of action. There
instead that the motion was being submitted for the consideration of are consequent advantages and disadvantages to petitioner. Since
the Probate Court without further argument.42 Evidently, petitioner the claim arises irrespective of the contingencies as stipulated in the
did not intend a full-blown hearing to ensue on whether it was Retainer Agreement, the attorney's fees may be collected against
entitled to the payment of attorney's fees. Yet the claim for attorney's the estate even before the final determination of its gross total value
fees is hardly incontrovertible. or the final approval of the project of partition. As earlier stated, such
claim for reimbursement is superior to the right of the beneficiaries to
That the Retainer Agreement set the attorney's fees at three percent
the estate, and as such, there is need to finally determine the
(3%) of the gross estate does not imply that the basis for attorney's
respective shares of the beneficiaries before attorney's fees in the
fees is beyond controversy. Attorney's fees in this case are in the
nature of administration expenses may be paid out.
nature of administration expenses, or necessary expenses in the first
place. Any party interested in the estate may very well, in theory, The one distinct disadvantage, however, is that the Retainer
posit a myriad of objections to the attorney's fees sought, such as for Agreement cannot be deemed binding on the estate or the Probate
example, that these fees were not necessary expenses in the care, Court since the estate is not a party to such contract. This would not
management, and settlement of the estate. Whether or not such preclude the Probate Court from enforcing the provisions of the
basis for valid objections exists in this case is not evident, but the Retainer Agreement if, in its sound discretion, the terms of payment
fact remains that all the parties interested in the estate, namely the therein are commensurate to the value of the actual services
other devisees and legatees, were deprived of the opportunity to necessary to the administration of the estate actually rendered by
raise such objections as they were not served notice of the Motion petitioner. Yet if the Probate Court does choose to adopt the
for Writ of Execution. Retainer Agreement as binding on the estate of Doña Adela,
petitioner may again be precluded from immediate recovery of
The instant claim for attorney's fees is thus precluded by the
attorney's fees in view of the necessity or precondition of
absence of the requisite notices by petitioner to all the interested
ascertaining the gross total value of the estate, as well as the judicial
persons such as the designated heirs, devisees, legatees, as
approval of the final agreement of partition.
required by the jurisprudential rule laid down in Escueta. However,
the Court of Appeals held that it was the prematurity of the claim for In any event, whether the claim for attorney's fees was pursued
attorney's fees that served as the fatal impediment. On this point, the through a separate suit against Olivia Pascual (in her personal
Court does not agree. capacity) for the enforcement of the Retainer Agreement, or against
the estate of Doña Adela as reimbursement for necessary
Again, the remaining peripheral questions warrant clarification.
administration expenses, it remains essential that a hearing be
Escueta itself provides for two alternative approaches through which conducted on the claim. In either case too, the hearing will focus on
counsel may proceed with his claim for attorney's fees. The first the value of the services of the petitioner and the necessity of
involves a separate suit against the executor or administrator in the engaging petitioner as counsel.
latter's personal capacity. The second approach is a direct claim
We reiterate that the direct claim against the estate for attorney's
against the estate itself, with due notice to all interested persons,
fees must be made with due notice to the heirs, devisees, and
filed with the probate court.
legatees. The failure of petitioner to give such notice renders its
In the same vein, the existence of the Retainer Agreement between present claim inefficacious for now. Indeed, there is sufficient cause
petitioner and Olivia Pascual allows petitioner two possible causes of to dismiss outright petitioner's Motion for Writ of Immediate
action on which to claim attorney's fees in connection with the Execution filed with the Probate Court, for its failure to notify therein
administration of the estate of Doña Adela. The first possible cause the other persons interested in the estate of Doña Adela.
of action pivots on the Retainer Agreement, which establishes an Nonetheless, to authorize said outright denial at this stage could
obligation on the part of Olivia Pascual to pay the final fee of 3% of unduly delay the settlement of the estate of Doña Adela, considering
the gross total estate of Doña Adela, payable upon approval by the the likelihood that petitioner would again pursue such claim for
Probate Court of the agreement for the distribution of the properties attorney's fees as the right to which is affirmed by law and
to the court- designated heirs of the estate. Necessarily, since the jurisprudence.
recovery of attorney's fees is premised on the Retainer Agreement
Hence, in order not to unduly protract further the settlement of the
any award thereupon has to await the final ascertainment of value of
estate of Doña Adela, the Court deems it proper instead to mandate
the gross total estate of Doña Adela, as well as the approval by the
the Probate Court to treat the Motion for Writ of Immediate Execution
Probate Court of the agreement for the distribution of the properties.
as a petition seeking a court order to direct the payment of attorney's
The Retainer Agreement makes it clear that the final payment of
fees as expenses of administration, but subject to the condition that
attorney's fees is contingent on these two conditions,43 and the claim
petitioner give due notice to the other designated devisees and
for attorney's fees based on the Retainer Agreement cannot ripen
legatees so designated in the will of the claim prior to the requisite
until these conditions are met.
hearing thereon. Petitioner may as well seize such opportunity to
Moreover, it cannot be escaped that the Retainer Agreement was formally amend or reconfigure its motion to a petition to direct
entered into between petitioner and Olivia Pascual prior to the filing payment of attorney's fees. Once this step is accomplished, there
of the probate petition, and that at such time, she had no recognized should be no impediment to petitioner's claim for recovery of
right to represent the estate of Doña Adela yet. This attorney's fees as reimbursement for necessary administration
expenses, within the terms established by law, jurisprudence, and
circumstance further bolsters our opinion that if petitioner insists on
this decision.
the judicial enforcement of the Retainer Agreement, its proper
remedy, authorized by law and jurisprudence, would be a personal One final note. Petitioner's final prayer before this court is that it be
action against Olivia Pascual, and not against the estate of Doña issued a partial writ of execution, consistent with its position before
Adela. If this were the recourse pursued by petitioner, and Olivia the Probate Court that it is already entitled to at least a partial
Pascual is ultimately held liable under the Retainer Agreement for payment of its attorney's fees. This prayer cannot obviously be
attorney's fees, she may nonetheless seek reimbursement from the granted at this stage by the Court, considering the fatal absence of
estate of Doña Adela if she were able to establish that the attorney's due notice to the other designated beneficiaries to the estate of
fees paid to petitioner were necessary administration expenses. Doña Adela. Still, we do not doubt that the Probate Court, within its
discretion, is capacitated to render the award of attorney's fees as
The second or alternative recourse is the direct claim for attorney's
administration expenses either partially or provisionally, depending
fees against the estate, as authorized under Escueta. The character
9

on the particular circumstances and its ultimate basis for the


determination of the appropriate attorney's fees.
WHEREFORE, the petition is GRANTED IN PART. The Decision of
the Court of Appeals dated 22 December 1995 and the Orders of the
Regional Trial Court of Malabon, Branch 72, dated 2 June 1994 and
17 March 1995 are hereby SET ASIDE insofar as said orders denied
petitioner's Motion for Writ of Immediate Execution dated 26 April
1994. Petitioner is hereby directed to set for hearing its claim for
attorneys fees, giving due notice thereof to all the heirs, devisees,
and legatees designated in the 1978 Last Will and Testament
executed by Doña Adela Pascual. The Regional Trial Court is
directed to treat petitioner's aforesaid motion as a PETITION for the
payment of attorney's fees as expenses of administration, and after
due hearing resolve the same with DISPATCH, conformably with this
decision. No pronouncement as to costs.
SO ORDERED.
10

EN BANC inadequately, to set up a counterclaim, in that, if true, it involved a


claim for money, tending to diminish the recovery sought by the
G.R. No. L-7622 May 27, 1955
plaintiff in said case No. 106. The judgment therein rendered bars,
GABRIEL MACLAN, plaintiff-appellant, therefore, any subsequent suit based upon said claim.
vs.
Again, if the claim for repairs were deemed not filed in case No. 106,
RUBEN GARCIA, defendant-appellee.
plaintiff would be confronted by Rule 10, Section 6, of the Rules of
CONCEPCION, J.: Court, which provides:
On July 3, 1945, Andres Mariano executed an instrument, purporting A counterclaim not set up shall be barred if it arises out of or is
to be a deed of conveyance, in favor of Gabriel Maclan, of two (2) necessarily connected with, the transaction or occurrence that is the
parcels of land, containing fishponds, located in the municipality of subject-matter of the opposing party's claim and does not require for
Polo, and covered by Certificates of Title Nos. 20410 and 20411 of its adjudication the presence of third parties of whom the court
the office of the Register of Deeds of Bulacan, which, accordingly, cannot acquire jurisdiction.
were cancelled and then substituted by Transfer Certificates of Title
It is clear that the claim for repairs or necessary expenses allegedly
Nos. 27813 and 27814, of the same office, in the name of Gabriel
made the Maclan in the property in dispute in case No. 106, is
Maclan. About a year later, or on or about August 2, 1946, Andres
necessarily connected with the action of the plaintiff therein to
Mariano instituted Civil Case No. 106 in the Court of First Instance of
recover said property from Maclan. Said connection is substantially
said province, against Gabriel Maclan, for the annulment of said
identical with that which exists between an action for recovery of a
instrument, upon the ground of fraud, and the recovery of the
land and the claim for improvements therein made by the defendant
aforementioned property. In due course, said court rendered
in said case. It is well settled that such claim for improvements is
judgment, on or about May 19, 1949 — which was affirmed by the
barred unless set up by way of counterclaim in the aforementioned
Court of Appeals on December 18, 1950 (CA — G.R. No. 3350-R)
action for recovery of the land (Bautista vs. Jimenez, 24 Phil., III;
— the dispositive part of which reads as follows:
Berses vs. Villanueva, 25 Phil., 473; Lopez vs. Gloria, 40 Phil., 76;
WHEREFORE, the Court hereby renders judgement in favor of the Beltran vs. Balbuena, 53 Phil., 697; Galit vs. Ginosa & Hernandez,
plaintiff Andres Mariano as follows: That the deed of extrajudicial 62 Phil., 451). The same rule applies to the claim for necessary
adjudication and sale (Exhibit A) in favor of the defendant Gabriel expenses or repairs. Consequently, if said claim was not filed in
Maclan is null and void; and that the Transfer Certificates of Title case No. 106, plaintiff may no longer bring another action therefore,
Nos. 27813 and 27814 issued in the name of the defendant thus the same being "barred forever", pursuant to said section 6 of Rule
Gabriel Maclan by the Register of Deeds of Bulacan be cancelled, 10 of the Rules of Court.
thus restoring in its entirety the former Transfer Certificate of Title
With reference to the question whether the claim for repairs should
Nos. 20410 and 20411 issued in the name of Basilio Mariano, the
have been filed in the proceedings for the settlement of the estate of
expenses of which to be borne by the defendant Tiburcio Ramirez
the deceased Andres Mariano, plaintiff contends that the answer
alone, with costs against the defendants. (Record on Appeal, p. 47.)
should be in the negative, for, pursuant to Section 5 of Rule 87 of the
On June 25, 1952, Gabriel Maclan filed the complaint in the case at Rules of Court, reading:
bar, which was docketed as Civil Case No. 1752 of the Court of First
All claims for money against the decedent, arising from contract,
Instance of Rizal. Ruben Garcia, who acquired the property in
express or implied, whether the same be due, not due, or contingent,
dispute in case No. 106, by inheritance from Andres Mariano (who
all claims for funeral expenses and expenses of the last sickness of
had died in the meanwhile), as his grandson and sole heir, is the
the decedent, and judgment for money against the decedent, must
defendant in the present case. The purpose thereof is to recover the
be filed within the time limited in the notice; otherwise they are
sum of P5,200, as necessary expenses allegedly incurred in the
barred forever, except that they may be set forth as counterclaims in
preservation of said property prior to the commencement of said
any action that the executor or administrator may bring against the
case No. 106. In his answer to the complaint in case No. 1752,
claimants. Where an executor or administrator commenced an
Garcia set up, among other things, the defense that plaintiff's cause
action, or prosecutes an action already commenced by the
of action is barred by the final judgment rendered in case No. 106
deceased in his lifetime, the debtor may set forth by answer the
and by his failure to file his claim in Special Proceedings No. 917 of
claims he has against the decedent, instead of presenting them
the Court of First Instance of Rizal — in which the estate of the
independently against each other in such action; and if final
deceased Andres Mariano was settled — which has already been
judgment is rendered in favor of the defendant, the amount so
closed. After due hearing on this plea, which was considered as
determined shall be considered the true balance against the estate,
being in the nature of a motion to dismiss, the Court of First Instance
as though the claim had been presented directly before the court in
of Rizal, in an order dated September 25, 1952, found Garcia's
the administration proceedings. Claims not yet due, or contingent,
pretense to be well taken, an accordingly dismissed plaintiff's
may be approved at their present value.
complaint, without special pronouncement as to costs. Hence, this
appeal by Maclan. only money claims, "arising from contract express or implied" are
enforceable is said proceedings, and plaintiff's cause of action herein
He maintains (1) that the decision in case No. 106 does not bar his
arises from law, not — according to plaintiff's counsel — from
cause of action in the present case, because the same refers to
"contract, express or implied." This argument, seemingly, stems from
necessary expenses, which, he claims, is distinct from the sum of
a misconception of the nature of "implied contracts," as the term is
P4,800, for repairs, alleged by him in his answer in case No. 106; (2)
used in the provision just quoted. The meaning the history and said
that said "repairs" were alleged in case No. 106 by way of "special
expression are set forth in the decision, written by Mr. Justice Street,
defense," not as counterclaim, and may not be considered as such;
in the case of Leung Ben vs. O'Brien (38 Phil., 182), from which we
(3) that he was not bound, in case No. 106, to set up, as
quote:
counterclaim, his present claim for necessary expenses; (4) that
neither was it necessary for him to file said claim in the special The term "implied contract" takes us into the shadow domain of
proceedings for the settlement of the estate of the deceased, Andres those obligations the theoretical classification of which has engaged
Mariano; and (5) that defendant herein is under obligation to pay the attention of scholars form the time of Gaius until our own day
said expenses. and has been a source of as much difficulty to the civilian as to the
common-law jurist. Here we are concerned with those acts which
There is absolutely no merit in appellant's pretense, for "repairs" are,
make one person debtor to another without there having intervened
in general, necessary for the preservation of the thing repaired, and,
between them any true agreement tending to produce a legal bond
hence, the cost of said repairs are in the nature of necessary
(vinculum juris). Of late years some American and English legal
expenses. Moreover, the repairs, amounting to P4,800, alleged in
writers have adopted the term quasi-contract as descriptive of these
plaintiff's answer in case No. 106, as defendant therein, was
obligations or some of them; but the expression more commonly
erroneously included under the heading of "special defenses," for,
used is "implied contract."
obviously, said repairs could not bar the annulment of the deed of
conveyance involved therein, the same having been obtained by Upon examination of these obligations, from the view point of the
fraud. At best, said allegation could be regarded (under Rule 9, common-law jurisprudence, it will be found that they fall readily into
section 9, of the Rules of Court) as an attempt, though made two division, according as they bear an analogy to the common-law
11

debt or to the common-law assumpsit. To exhibit the scope of these


different classes of obligations is here impracticable. It is only
necessary in this connection to observe that the most conspicuous
division is that which comprises duties in the nature of debt. The
characteristic feature of these obligations is that upon certain states
of fact the law imposes an obligation to pay a sum certain of money;
and it is characteristic of this obligation that the money in respect to
which the duty is raised is conceived as being the equivalent of
something taken or detained under circumstances giving rise to the
duty to return or compensate therefor. The proposition that no one
shall be allowed to enrich himself unduly at the expense of another
embodies the general principle here lying at the basis of obligation.
The right to recover money improperly paid (repeticion de lo
indebido) is also recognized as belonging to this class of duties.
It will be observed that according to the Civil Code (article 1089)
obligations are supposed to be derived either from (1) the law, (2)
contracts and quasi-contracts, (3) illicit acts and omissions, of (4)
acts in which some sort or blame or negligence is present. This
enumeration of the sources of obligations supposes that the quasi-
contractual obligation and the obligation imposed by law are of
different types. The learned Italian jurist, Jorge Giorgi, criticizes this
assumption and says that the classification embodied in the code is
theoretically erroneous. His conclusion is that one or the other of
these categories should have been suppressed and merged in the
other. (Giorgi, Teoria de las Obligaciones, Spanish es., Vol. 5, arts,
5, 7, 9.) The validity of this criticism is, we think, self-evident; and it is
of interest to not that the common law makes no distinction between
the two sources of liability. The obligations which in the Code are
indicated as quasi-contracts, as well as those arising ex-lege, are in
the common law system merged into the category of obligations
imposed by law, and all are denominated implied contracts. (Id., pp.
192-193; Emphasis supplied.)
It is clear from the foregoing that plaintiff's cause of action arises
from an "implied contract" — as this term is understood in the
common-law, which is the sense in which it is used in our remedial
laws — and that, accordingly his claim, which is "barred forever,"
may no longer be asserted against defendant herein.
Wherefore, the decision appealed from is hereby affirmed, with costs
against plaintiff-appellee, Gabriel Maclan. It is so ordered.
12

SECOND DIVISION and Hardware, a sole proprietorship Chua owned and managed. The
deposit was allegedly done with the knowledge and consent of AMC.
G.R. No. 170498 January 9, 2013
According to
METROPOLITAN BANK & TRUST COMPANY, Petitioner,
Metrobank, Chua then gave the assurance that the arrangement for
vs.
the handling of the checks carried AMC’s consent. Chua also
ABSOLUTE MANAGEMENT CORPORATION, Respondent.
submitted documents showing his position and interest in AMC.
DECISION These documents, as well as AMC’s admission in its answer that it
allowed Chua to manage AMC with a relative free hand, show that it
BRION, J.:
knew of Chua’s arrangement with Metrobank. Further, Chua’s
We resolve petitioner Metropolitan Bank & Trust Company's (Metro records show that the proceeds of the checks were remitted to AMC
bank's) petition for review on certiorari1 seeking the reversal of the which cannot therefore now claim that it did not receive these
decision2 dated August 25, 2005 and the resolution3 dated proceeds.
November 17, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
Metrobank also raised the defense of estoppel. According to
86336. The assailed decision affirmed the order4 dated May 7, 2004
Metrobank, AMC had knowledge of its arrangements with Chua for
of the Regional Trial Court (RTC) of Quezon City, Branch 80. The
several years. Despite this arrangement, AMC did not object to nor
RTC had denied the admission of Metrobank's Fourth-Party
did it call the attention of Metrobank about Chua’s alleged lack of
Complaint5 against the Estate of Jose L. Chua for being a money
authority to deposit the checks in Ayala Lumber and Hardware’s
claim that falls under Section 5, Rule 86 of the Rules of Court; the
account. At this point, AMC is already estopped from questioning
claim should have been filed in the pending judicial settlement of
Chua’s authority to deposit these checks in Ayala Lumber and
Chua’s estate before the RTC of Pasay City. The CA affirmed the
Hardware’s account.
RTC’s order based on the same ground.
Lastly, Metrobank asserted that AMC gave Chua unbridled control in
Factual Antecedents
managing AMC’s affairs. This measure of control amounted to gross
On October 5, 2000, Sherwood Holdings Corporation, Inc. (SHCI) negligence that was the proximate cause of the loss that AMC must
filed a complaint for sum of money against Absolute Management now bear.
Corporation (AMC). The complaint was docketed as Civil Case No.
Subsequently, Metrobank filed a motion for leave to admit fourth-
Q-00-42105 and was assigned to the RTC of Quezon City, Branch
party complaint24 against Chua’s estate. It alleged that Chua’s estate
80.6
should reimburse Metrobank in case it would be held liable in the
SHCI alleged in its complaint that it made advance payments to third-party complaint filed against it by AMC.
AMC for the purchase of 27,000 pieces of plywood and 16,500
The RTC’s Ruling
plyboards in the sum of ₱12,277,500.00, covered by Metrobank
Check Nos. 1407668502, 140768507, 140768530, 140768531, In an order25 dated May 7, 2004, the RTC denied Metrobank’s
140768532, 140768533 and 140768534. These checks were all motion. It likewise denied Metrobank’s motion for reconsideration in
crossed, and were all made payable to AMC. They were given to an order26 dated July 7, 2004.
Chua, AMC’s General Manager, in 1998.7
The RTC categorized Metrobank’s allegation in the fourth-party
Chua died in 1999, 8 and a special proceeding for the settlement of complaint as a "cobro de lo indebido"27 – a kind of quasi-contract
his estate was commenced before the RTC of Pasay City. This that mandates recovery of what has been improperly paid. Quasi-
proceeding was pending at the time AMC filed its answer with contracts fall within the concept of implied contracts that must be
counterclaims and third-party complaint.9 included in the claims required to be filed with the judicial settlement
of the deceased’s estate under Section 5, Rule 86 of the Rules of
SHCI made demands on AMC, after Chua’s death, for allegedly
Court. As such claim, it should have been filed in Special
undelivered items worth ₱8,331,700.00. According to AMC, these
Proceedings No. 99-0023, not before the RTC as a fourth-party
transactions could not be found in its records. Upon investigation,
complaint. The RTC, acting in the exercise of its general jurisdiction,
AMC discovered that in 1998, Chua received from SHCI 18
does not have the authority to adjudicate the fourth-party complaint.
Metrobank checks worth ₱31,807,500.00. These were all payable to
As a trial court hearing an ordinary action, it cannot resolve matters
AMC and were crossed or "for payee’s account only." 10
pertaining to special proceedings because the latter is subject to
In its answer with counterclaims and third-party complaint,11 AMC specific rules.
averred that it had no knowledge of Chua’s transactions with SHCI
Metrobank responded to the RTC ruling by filing a petition for
and it did not receive any money from the latter. AMC also asked the
certiorari28 under Rule 65 before the CA.
RTC to hold Metrobank liable for the subject checks in case it is
adjudged liable to SHCI. The CA’s Ruling
12
Metrobank filed a motion for bill of particulars, seeking to clarify The CA affirmed the RTC’s ruling that Metrobank’s fourth-party
certain ambiguous statements in AMC’s answer. The RTC granted complaint should have been filed in Special Proceedings No. 99-
the motion but AMC failed to submit the required bill of particulars. 0023.29 According to the CA, the relief that Metrobank prayed for
Hence, Metrobank filed a motion to strike out the third-party was based on a quasi-contract and was a money claim categorized
complaint.13 as an implied contract that should be filed under Section 5, Rule 86
of the Rules of Court.
In the meantime, Metrobank filed a motion to dismiss14 against AMC
on the ground that the latter engaged in prohibited forum shopping. Based on the statutory construction principle of lex specialis derogat
According to Metrobank, AMC’s claim against it is the same claim generali, the CA held that Section 5, Rule 86 of the Rules of Court is
that it raised against Chua’s estate in Special Proceedings No. 99- a special provision that should prevail over the general provisions of
0023 before the RTC of Pasay City, Branch 112. The RTC Section 11, Rule 6 of the Rules of Court. The latter applies to money
subsequently denied this motion.15 claims in ordinary actions while a money claim against a person
already deceased falls under the settlement of his estate that is
The RTC of Quezon City opted to defer consideration16 of
governed by the rules on special proceedings. If at all, rules for
Metrobank’s motion to strike out third-party complaint17 and it instead
ordinary actions only apply suppletorily to special proceedings.
granted AMC’s motion for leave to serve written interrogatories on
the third-party defendant.18 While Metrobank filed its answer to the The Present Petition
written interrogatories, AMC was again directed by the RTC, in an
In its present petition for review on certiorari,30 Metrobank asserts
order19 dated August 13, 2003, to submit its bill of particulars.
that it should be allowed to file a fourth-party complaint against
Instead, AMC filed a motion for reconsideration20 which was denied
Chua’s estate in the proceedings before the RTC; its fourth-party
in an order21 dated October 28, 2003. AMC still did not file its bill of
complaint was filed merely to enforce its right to be reimbursed by
particulars. The RTC, on the other hand, did not act on Metrobank’s
Chua’s estate in case Metrobank is held liable to AMC. Hence,
motion to strike out AMC’s third-party complaint.22
Section 11, Rule 6 of the Rules of Court should apply.
In its answer23 dated December 1, 2003, Metrobank admitted that it
deposited the checks in question to the account of Ayala Lumber
13

AMC, in its comment,31 maintains the line that the CA and the RTC AMC’s pleadings, the Court still had the benefit of a clear narration
rulings should be followed, i.e., that Metrobank’s claim is a quasi- of facts and arguments according to both parties’ perspectives. In
contract that should be filed as a claim under Section 5, Rule 86 of this broader view, the mischief that the Rules of Court seeks to avoid
the Rules of Court. has not really been present. If at all, the omission is not a grievous
one that the spirit of liberality cannot address.
AMC also challenges the form of Metrobank’s petition for failure to
comply with Section 4, Rule 45 of the Rules of Court. This provision The Merits of the Main Issue
requires petitions filed before the Supreme Court to be accompanied
The main issue poses to us two essential points that must be
by "such material portions of the record as would support the
addressed. First, are quasi-contracts included in claims that should
petition."
be filed pursuant to Rule 86, Section 5 of the Rules of Court?
According to AMC, the petition’s annexes are mostly Metrobank’s Second, if so, is Metrobank’s claim against the Estate of Jose Chua
pleadings and court issuances. It did not append all relevant AMC based on a quasi-contract?
pleadings before the RTC and the CA. For this reason, the petition
Quasi-contracts are included in
should have been dismissed outright.
claims that should be filed under Rule
Issues 86, Section 5 of the Rules of Court
The parties’ arguments, properly joined, present to us the following In Maclan v. Garcia,39 Gabriel Maclan filed a civil case to recover
issues: from Ruben Garcia the necessary expenses he spent as possessor
of a piece of land. Garcia acquired the land as an heir of its previous
1) Whether the petition for review on certiorari filed by Metrobank
owner. He set up the defense that this claim should have been filed
before the Supreme Court complies with Section 4, Rule 45 of the
in the special proceedings to settle the estate of his predecessor.
Rules of Court; and
Maclan, on the other hand, contended that his claim arises from law
2) Whether Metrobank’s fourth-party complaint against Chua’s and not from contract, express or implied. Thus, it need not be filed
estate should be allowed. in the settlement of the estate of Garcia’s predecessor, as mandated
by Section 5, Rule 87 of the Rules of Court (now Section 5, Rule 86).
The Court’s Ruling
The Court held under these facts that a claim for necessary
The Present Petition Complies With Section 4, Rule 45 of the Rules
expenses spent as previous possessor of the land is a kind of quasi-
of Court
contract. Citing Leung Ben v. O’Brien,40 it explained that the term
AMC posits that Metrobank’s failure to append relevant AMC "implied contracts," as used in our remedial law, originated from the
pleadings submitted to the RTC and to the CA violated Section 4, common law where obligations derived from quasi-contracts and
Rule 45 of the Rules of Court,32 and is a sufficient ground to dismiss from law are both considered as implied contracts. Thus, the term
the petition under Section 5, Rule 45 of the Rules of Court.33 quasi-contract is included in the concept "implied contracts" as used
in the Rules of Court. Accordingly, liabilities of the deceased arising
We disagree with AMC’s position.
from quasi-contracts should be filed as claims in the settlement of
In F.A.T. Kee Computer Systems, Inc. v. Online Networks his estate, as provided in Section 5, Rule 86 of the Rules of Court.41
International, Inc.,34 Online Networks International, Inc. similarly
Metrobank’s fourth-party complaint is
assailed F.A.T. Kee Computer Systems, Inc.’s failure to attach the
based on quasi-contract
transcript of stenographic notes (TSN) of the RTC proceedings, and
claimed this omission to be a violation of Section 4, Rule 45 of the Both the RTC and the CA described Metrobank’s claim against
Rules of Court that warranted the petition’s dismissal. The Court Chua’s estate as one based on quasi-contract. A quasi-contract
held that the defect was not fatal, as the TSN of the proceedings involves a juridical relation that the law creates on the basis of
before the RTC forms part of the records of the case. Thus, there certain voluntary, unilateral and lawful acts of a person, to avoid
was no incurable omission that warranted the outright dismissal of unjust enrichment.42 The Civil Code provides an enumeration of
the petition. quasi-contracts,43 but the list is not exhaustive and merely provides
examples.44
The Court significantly pointed out in F.A.T. Kee that the requirement
in Section 4, Rule 45 of the Rules of Court is not meant to be an According to the CA, Metrobank’s fourth-party complaint falls under
absolute rule whose violation would automatically lead to the the quasi-contracts enunciated in Article 2154 of the Civil Code.45
petition’s dismissal.35 The Rules of Court has not been intended to Article 2154 embodies the concept "solutio indebiti" which arises
be totally rigid. In fact, the Rules of Court provides that the Supreme when something is delivered through mistake to a person who has
Court "may require or allow the filing of such pleadings, briefs, no right to demand it. It obligates the latter to return what has been
memoranda or documents as it may deem necessary within such received through mistake.46
periods and under such conditions as it may consider appropriate"; 36
Solutio indebiti, as defined in Article 2154 of the Civil Code, has two
and "[i]f the petition is given due course, the Supreme Court may
indispensable requisites: first, that something has been unduly
require the elevation of the complete record of the case or specified
delivered through mistake; and second, that something was received
parts thereof within fifteen (15) days from notice."37 These provisions
when there was no right to demand it.47
are in keeping with the overriding standard that procedural rules
should be liberally construed to promote their objective and to assist In its fourth-party complaint, Metrobank claims that Chua’s estate
the parties in obtaining a just, speedy and inexpensive determination should reimburse it if it becomes liable on the checks that it
of every action or proceeding.38 deposited to Ayala Lumber and Hardware’s account upon Chua’s
instructions.
Under this guiding principle, we do not see Metrobank’s omission to
be a fatal one that should warrant the petition’s outright dismissal. To This fulfills the requisites of solutio indebiti. First, Metrobank acted in
be sure, the omission to submit the adverse party’s pleadings in a a manner akin to a mistake when it deposited the AMC checks to
petition before the Court is not a commendable practice as it may Ayala Lumber and Hardware’s account; because of Chua’s control
lead to an unduly biased narration of facts and arguments that over AMC’s operations, Metrobank assumed that the checks
masks the real issues before the Court. Such skewed presentation payable to AMC could be deposited to Ayala Lumber and
could lead to the waste of the Court’s time in sifting through the Hardware’s account. Second, Ayala Lumber and Hardware had no
maze of the parties’ narrations of facts and arguments and is a right to demand and receive the checks that were deposited to its
danger the Rules of Court seeks to avoid. account; despite Chua’s control over AMC and Ayala Lumber and
Hardware, the two entities are distinct, and checks exclusively and
Our examination of Metrobank’s petition shows that it contains
expressly payable to one cannot be deposited in the account of the
AMC’s opposition to its motion to admit fourth-party complaint
other. This disjunct created an obligation on the part of Ayala
among its annexes. The rest of the pleadings have been
Lumber and Hardware, through its sole proprietor, Chua, to return
subsequently submitted as attachments in Metrobank’s Reply. A
the amount of these checks to Metrobank.
reading of these pleadings shows that their arguments are the same
as those stated in the orders of the trial court and the Court of The Court notes, however, that its description of Metrobank’s fourth-
Appeals. Thus, even if Metrobank’s petition did not contain some of party complaint as a claimclosely analogous to solutio indebiti is only
14

to determine the validity of the lower courts’ orders denying it. It is


not an adjudication determining the liability of Chua’s estate against
Metrobank. The appropriate trial court should still determine whether
Metrobank has a lawful claim against Chua’s estate based on quasi-
contract.1âwphi1
Metrobank’s fourth-party complaint,
as a contingent claim, falls within the
claims that should be filed under
Section 5, Rule 86 of the Rules of
Court
A distinctive character of Metrobank’s fourth-party complaint is its
contingent nature – the claim depends on the possibility that
Metrobank would be adjudged liable to AMC, a future event that may
or may not happen. This characteristic unmistakably marks the
complaint as a contingent one that must be included in the claims
falling under the terms of Section 5, Rule 86 of the Rules of Court:
Sec. 5. Claims which must be filed under the notice. If not filed,
barred; exceptions. – All claims for money against the decedent,
arising from contract, express or implied, whether the same be due,
not due, or contingent, all claims for funeral expenses and expenses
for the last sickness of the decedent, and judgment for money
against the decedent, must be filed within the time limited in the
notice. [italics ours]
Specific provisions of Section 5, Rule
86 of the Rules of Court prevail over
general provisions of Section 11, Rule
6 of the Rules of Court
Metrobank argues that Section 11, Rule 6 of the Rules of Court
should apply because it impleaded Chua’s estate for reimbursement
in the same transaction upon which it has been sued by AMC. On
this point, the Court supports the conclusion of the CA, to wit:
Notably, a comparison of the respective provisions of Section 11,
Rule 6 and Section 5, Rule 86 of the Rules of Court readily shows
that Section 11, Rule 6 applies to ordinary civil actions while Section
5, Rule 86 specifically applies to money claims against the estate.
The specific provisions of Section 5, Rule 86 x x x must therefore
prevail over the general provisions of Section 11, Rule 6.48
We read with approval the CA’s use of the statutory construction
principle of lex specialis derogat generali, leading to the conclusion
that the specific provisions of Section 5, Rule 86 of the Rules of
Court should prevail over the general provisions of Section 11, Rule
6 of the Rules of Court; the settlement of the estate of deceased
persons (where claims against the deceased should be filed) is
primarily governed by the rules on special proceedings, while the
rules provided for ordinary claims, including Section 11, Rule 6 ofthe
Rules of Court, merely apply suppletorily.49
In sum, on all counts in the considerations material to the issues
posed, the resolution points to the affirmation of the assailed CA
decision and resolution. Metrobank's claim in its fourth-party
complaint against Chua's estate is based on quasi-contract. It is also
a contingent claim that depends on another event. Both belong to
the category of claims against a deceased person that should be
filed under Section 5, Rule 86 of the Rules of Comi and, as such,
should have been so filed in Special Proceedings No. 99-0023.
WHEREFORE, premises considered, we hereby DENY the petition
for lack of merit. The decision of the Court of Appeals dated August
25, 2005, holding that the Regional Trial Court of Quezon City,
Branch 80, did not commit grave abuse of discretion in denying
Metropolitan Bank & Trust Company's motion for leave to admit
fourth-party complaint Is
AFFIRMED. Costs against Metropolitan Bank & Trust Company.
SO ORDERED.
15

SECOND DIVISION judges (Judges Lorenzo Relova and Santiago O. Tatiada) before it
was decided by Judge Augusta L. Valencia. However, the mistake is
G.R. No. L-51151 July 24, 1981
not fatal for the Estate of Felisa Tiglao did not raise any factual issue
PAZ G. ROMUALDEZ, BELEN A. GUECO, assisted by her in the court below. It raised a question of law only which we now
husband, JOSE TINSAY, and CATALINA A. GUECO, assisted by resolve in this appeal.
her husband JOSE SIOPONGCO, plaintiffs-appellees,
The appellant argues that the present action is one for the recovery
vs.
of a sum of money so that it is barred by Sec. I of Rule 87 of the
ANTONIO P. TIGLAO, ERNESTO TIGLAO, BERNARDO TIGLAO
Rules of Court and that the remedy of the appellees is to present
and JUANA TIGLAO, defendants, ESTATE OF FELISA TIGLAO,
their claim in Special Proc. No. Q-10731 of the Court of First
defendant-appellant.
Instance of Rizal.
This argument is simply answered thus: the original judgment which
ABAD SANTOS, J.: was rendered on May 31, 1960, has become stale because of its
non-execution after the lapse of five years. (Sec. 6, Rule 39 of the
This is an appeal by the Estate of Felisa Tiglao from a decision in
Rules of Court.) Accordingly, it cannot be presented against the
Civil Case No. Q-14424 of the Court of First Instance of Rizal which
Estate of Felisa Tiglao unless it is first revived by action. This is
revived a judgment rendered in Civil Case No.Q-5055 also of the
precisely why the appellees have instituted the second suit whose
Court of First Instance of Rizal.
object is not to make the Estate of Felisa Tiglao pay the sums of
Originally appealed to the Court of Appeals, that court certified the money adjudged in the first judgment but merely to keep alive said
case to us on the ground that it involves questions of law only. judgment so that the sums therein awarded can be presented as
claims against the estate in Special Proc. No. Q-10731 of the Court
The relevant facts are the following:
of First Instance of Rizal.
On March 15, 1960, Paz G. Romualdez and others sued Antonio
WHEREFORE, finding no error in the judgment insofar as the Estate
Tiglao for the payment of unpaid rentals for the lease of a hacienda
of Felisa Tiglao is concerned, its appeal is hereby dismissed with
and its sugar quota. Included in the suit were Felisa Tiglao and
costs against the appellant.
others who had guaranteed the payment of the rents jointly and
severally with Antonio Tiglao. The suit was docketed as Civil Case SO ORDERED.
No. Q-5055 of the Court of First Instance of Rizal. On May 31, 1960,
a decision was rendered with the following dispositive portion:
IN VIEW OF THE FOREGOING, the Court hereby renders judgment
in favor of the plaintiffs and against the defendants, by ordering said
defendants to pay jointly and severally the plaintiffs the sum of
P22,767.17 representing the unpaid rentals on the sugar quota, to
pay P5,000.00 as liquidated damages and the sum of P1,000.00 as
attorney's fees plus costs.
The judgment was not satisfied notwithstanding a writ of execution to
enforce it. Accordingly, on May 18, 1970, Paz G. Romualdez, et al.
filed Civil Case No. Q-14424 in the Court of First Instance of Rizal
against Antonio Tiglao and his sureties in order to revive the
judgment above quoted.
It should be stated that when the suit to revive judgment was filed,
Felisa F. Tiglao had died and her estate was being settled in Special
Proc. No. Q-10731 of the Court of First Instance of Rizal.
Accordingly, the one who was made defendant was her estate
represented by the Special Administratrix Maningning Tiglao-
Naguiat, In her Motion to Dismiss, dated October 5, 1970, Answer
dated April 5, 1971, and still another .Motion to Dismiss, dated
September 25, 1973, the administratrix questioned the jurisdiction of
the court a quo to entertain the suit to revive judgment. She invoked
Sec. 1 of Rule 87 of the Rules of Court that, "No action upon a claim
for the recovery of money or debt or interest thereon shall be
commenced against the executor or administrator; ... "
Brushing aside the posture of the administratrix, the court a quo
rendered a decision on January 21, 1974, with the following
dispositive portion:
WHEREFORE, for all the foregoing considerations the Court hereby
renders judgment in favor of the plaintiffs ordering the revival of the
judgment of this court in Civil Case No. 5055, which runs as follows:
IN VIEW OF THE FOREGOING, the Court hereby renders judgment
in favor of the plaintiffs and against the defendants, by ordering the
said defendants to pay jointly and severally the plaintiffs the sum of
P22,767.17 representing the unpaid rental on the sugar quota, to
pay P5,000.00 as liquidated damages and the sum of P1,000.00 as
attorney's fees plus costs.
without pronouncement as to costs.
The Estate of Felisa Tiglao filed a separate appeal which is now
before us.
The decision reviving the judgment states: "For the estate of Felisa
Tiglao, no evidence was presented, it having been declared in
default previously." But as can be gleaned from the facts stated
above, the Estate of Felisa Tiglao filed an Answer, dated April 1,
1971, and a second Motion to Dismiss, dated September 25, 1973.
The reason for the mistake is that the case was handled by several
16

FIRST DIVISION judicial partition of such estate and have distributed the latter among
themselves, in which case, the heirs become liable to the claimant in
G.R. No. L-28298 November 25, 1983
proportion to the share which they have received as inheritance.
ROSITA SANTIAGO DE BAUTISTA, ET AL., plaintiffs-appellees, Plaintiffs' complaint does not state that the defendants have received
vs. any such inheritance from their said deceased father, Rosendo de
VICTORIA DE GUZMAN, ET AL., defendants-appellants. Guzman, and hence, there is no cause of action against aforesaid
defendants.
Jose D. Villena for plaintiffs-appellees.
This order became final.
Antonio Gonzales for defendants-appellants.
Then on December 14, 1954, plaintiffs-appellees filed with the same
trial court Civil Case No. 3530 (subject of this appeal) against the
GUTIERREZ, JR., J.: same defendants in the former case, the complaint containing
analogous allegations as those embodied in the first complaint but in
This is an appeal from the decision of the Court of First Instance of
this second complaint they further allege that on June 12, 1952,
Rizal, Pasay City branch, in Civil Case No. 3530, ordering the
Rosendo de Guzman died intestate and that intestate proceedings
defendants-appellants to pay the plaintiffs-appellees damages and
were filed in the same court and docketed therein as Special
attorney's fees and dismissing the former's counterclaim. As no
Proceedings No. 1303-P, wherein on April 20, 1953, a project of
questions of facts were raised by the appellants in their brief, the
partition was presented in and approved by said Court with the five
Court of Appeals certified this case to us for decision.
heirs receiving their shares valued at P2,294.05 each, and on May
The facts, as stated in the resolution of the appellate court, are as 14, 1953, said intestate proceedings were closed. They also alleged
follows: têñ.£îhqw⣠that Numeriano Bautista during his lifetime was the only one
supporting them and his death caused them shock, sufferings and
On May 10, 1952, Numeriano Bautista, husband and father of the
anxiety and therefore defendants-appellants should pay to them,
plaintiffs-appellees, respectively, was a passenger of jeepney
aside from the P3,000.00, an additional amount of P15,000.00 as
bearing Plate No. TPU-4013, owned and operated by Rosendo de
moral, exemplary and compensatory damages, plus the sum of
Guzman, deceased husband and father of defendants-appellants,
P2,000.00 as attorney's fees for the prosecution of this case,
respectively, as one of the jeepneys used in his transportation
besides the costs of suit.
business. Eugenio Medrano y Torres was employed by said
Rosendo de Guzman as the driver of said jeepney. Said driver drove Defendants-appellants again filed a motion to dismiss on May 5,
and managed said jeepney at that time along Taft Avenue, Pasay 1955, alleging the same grounds as those interposed in the first
City, in a negligent and reckless manner and, as a result, the complaint but adding the further ground of res judicata in view of the
jeepney turned turtle and, consequently, passenger Numeriano dismissal of the first case which became final as no appeal or any
Bautista sustained physical injuries which caused his death. Eugenio other action was taken thereon by the appellees. On August 22,
Medrano, the driver, was accused and convicted of homicide 1955, the lower court denied the motion to dismiss for lack of
through reckless imprudence by the trial court in a decision sufficient merit.
promulgated on May 27, 1952 and sentenced to a penalty of
xxx xxx xxx
imprisonment of four (4) months and one (1) day of arresto mayor
and to indemnify the heirs of Numeriano Bautista, plaintiffs-appellees Then on July 11, 1961, the parties through their respective counsel
herein, in the sum of P3,000.00. A writ of execution was issued submitted a partial stipulation of facts found on pages 63 to 67 of the
against said driver, Eugenio Medrano for the said sum of P3,000.00 amended record on appeal which stipulation of facts, was made the
but the same was returned to the Court unsatisfied. basis of the decision of the lower court which was rendered on
August 26, 1961 (should be August 14, 1961), aside from the
On May 12, 1952, Rosendo de Guzman died.
testimony of the widow of Numeriano Bautista, appellee Rosita
Because of their failure to collect the said sum of P3,000.00 from the Bautista, who testified on the same incidents already recited herein
driver, Eugenio Medrano, plaintiffs-appellees filed a complaint (Civil and on the sufferings and shock she and her children, all appellees
Case No. 2050) dated October 7, 1952, with the Court of First in this case, suffered. From said decision, the present appeal has
Instance of Rizal, Pasay City Branch, against defendants-appellants been interposed ...
alleging, among other things besides the above-mentioned incidents,
Defendants-appellants assign the following errors:
that they demanded from Rosendo de Guzman and from the
defendants-appellants the payment of the sums of P3,000.00 as Itêñ.£îhqwâ£
subsidiary liability; P10,000.00 as actual exemplary and moral
THE COURT BELOW ERRED IN NOT SUSTAINING THE MOTION
damages and Pl,000.00 as attorney's fees for the suit by reason of
TO DISMISS MOCION DE SOBRESIMIENTO) FILED BY THE
the death of Numeriano Bautista as related above, but Rosendo de
DEFENDANTS-APPELLANTS ON OR ABOUT MAY, 1955,
Guzman and later the herein defendants-appellants refused to pay
APPEARING ON PAGE 10 ET SEQ. OF THE AMENDED RECORD
the same. Plaintiffs-appellees therefore prayed that the defendants-
ON APPEAL.
appellants be ordered to pay the said sums as well as the costs of
suit. IItêñ.£îhqwâ£
Defendants-appellants through counsel filed a motion to dismiss THE COURT BELOW ERRED IN NOT DECLARING THAT THE
predicated on two grounds, namely, that the lower court had no CLAIM OF THE PLAINTIFFS-APPELLEES IS ALREADY BARRED
jurisdiction over the subject matter of the litigation and that the FOR FAILURE ON THEIR PART TO FILE THEIR CLAIM IN THE
complaint stated no cause of action. In support of said motion, they INTESTATE PROCEEDINGS OF THE DECEASED ROSENDO DE
maintained that the suit was for a money claim against the supposed GUZMAN (SPECIAL PROCEEDINGS NO. 1303-P) OF THE
debtor who was already dead and as such it should be filed in COURT OF FIRST INSTANCE OF RIZAL.
testate or intestate proceedings or, in the absence of such
IIItêñ.£îhqwâ£
proceedings, after the lapse of thirty (30) days, the creditors should
initiate such proceedings, that the heirs could not be held liable THE COURT ERRED IN NOT SUSTAINING THE DEFENSE OF
therefor since there was no allegation that they assumed the alleged RES JUDICATA INTERPOSED BY DEFENDANTS-APPELLANTS
obligation. BY VIRTUE OF THE FINAL ORDER RENDERED OR ISSUED BY
THE COURT OF FIRST INSTANCE OF RIZAL IN CIVIL CASE NO.
The lower court sustained the motion to dismiss in an order dated
2050, DATED MAY 11, 1953, COPY OF SAID ORDER IS
May 11, 1953, stating, among other things, that: têñ.£îhqwâ£
ATTACHED AS EXHIBIT "F" AND MADE AN INTEGRAL PART OF
The procedure thus opened for a money claimant against a THE PARTIAL STIPULATION OF FACTS.
deceased person, as in the instant case, is for said claimant to file
IVtêñ.£îhqwâ£
proceedings for the opening of the judicial administration of the
estate of said deceased person and to present his claim in said THE COURT BELOW ERRED IN RENDERING A DECISION
proceedings. The claimant may only proceed to sue the heirs of the ORDERING THE HEREIN DEFENDANTS-APPELLANTS TO
deceased directly where such heirs have entered into an extra- JOINTLY AND SEVERALLY PAY THE PLAINTIFFS-APPELLEES
17

THE SUM OF THREE THOUSAND PESOS (p3,000.00), WITH absolute, within said two (2) years, and allowed, the assets retained
INTERESTS AND COSTS. in the hands of the executor or administrator, not exhausted in the
payment of claims, shall be distributed by the order of the court to
V têñ.£îhqwâ£
the persons entitled to the same; but the assets so distributed may
HE COURT BELOW ERRED IN DISMISSING DEFENDANTS- still be applied to the payment of the claim when established, and
APPELLANTS' COUNTER-CLAIM AND IN NOT RENDERING A the creditor may maintain an action against the distributees to
DECISION IN ACCORDANCE THEREWITH. recover the debt, and such distributees and their estates shall be
liable for the debt in proportion to the estate they have respectively
The only question presented in the assigned errors is whether or not
received from the property of the deceased.
the trial court erred in giving due course to the complaint on the
grounds stated above. We sympathize with the plight of the plaintiffs- Even under the above rule, the contingent claims must first have
appellees but they have lost their right to recover because of been established and allowed in the probate court before the
negligence and a failure to observe mandatory provisions of the law creditors can file an action directly, against the distributees. Such is
and the Rules. They overlooked the fact that they were no longer not the situation, however, in the case at bar. The complaint herein
suing Rosendo de Guzman who died shortly after the accident but was filed after the intestate proceedings had terminated and the
his heirs. estate finally distributed to the heirs. If we are to allow the complaint
to prosper and the trial court to take cognizance of the same, then
Section 5, Rule 86 of the Rules of Court provides: têñ.£îhqwâ£
the rules providing for the claims against the estate in a testate or
All claims for money against the decedent arising from contract, intestate proceedings within a specific period would be rendered
express or implied, whether the same be due, not due, or contingent, nugatory as a subsequent action for money against the distributees
all claims for funeral expenses and expenses for the last sickness of may be filed independently of such proceedings. This precisely is
the decedents, and judgment for money against the decedent, must what the rule seeks to prevent so as to avoid further delays in the
be filed within the time in the notice; otherwise they are barred settlement of the estate of the deceased and in the distribution of his
forever; except that they may be set forth as counterclaims in any property to the heirs, legatees or devisees.
action that the executor or administrator may bring against the
Furthermore, even assuming that the plaintiffs-appellees had no
claimants ... Claims not yet due, or contingent, may be approved at
knowledge of the intestate proceedings which is not established, the
their present value.
law presumes that they had such knowledge because the settlement
The above-quoted rule is mandatory. The requirement therein is for of estate is a proceeding in remark and therefore the failure to file
the purpose of protecting the estate of the deceased. The executor their claims before such proceedings barred them from subsequently
or administrator is informed of the claims against it, thus enabling filing the same claims outside said proceedings.
him to examine each claim and to determine whether it is a proper
WHEREFORE, the decision of the Court of First Instance appealed
one which should be allowed. Therefore, upon the dismiss of the first
from is hereby reversed and set aside and another one entered
complaint of herein plaintiffs-appellees in Civil Case No. 2050, they
dismissing the complaint and the counterclaim. No costs.
should have presented their claims before the intestate proceedings
filed in the same court and docketed as Special Proceedings No. SO ORDERED.1ä
1303-P. Instead of doing so, however. the plaintiffs-appellees slept
on their right. They allowed said proceedings to terminate and the
properties to be distributed to the heirs pursuant to a project of
partition before instituting this separate action. Such do not
sanctioned by the above rule for it strictly requires the prompt
presentation and disposition of claims against the decedent's estate
in order to settle the affairs of the estate as soon as possible, pay off
its debts and distribute the residue. (See Py Eng Chong v. Herrera,
70 SCRA 130). With the exception provided for in the above rule, the
failure of herein plaintiffs-appellees to present their claims before the
intestate proceedings of the estate of Rosendo de Guzman within
the prescribed period constituted a bar to a subsequent claim
against the estate or a similar action of the same import.
Therefore, it was an error on the part of the trial court to hold that the
plaintiffs-appellees had a cause of action against the defendants-
appellants who are the heirs of the deceased against whom the
liability is sought to be enforced, much less take cognizance of the
complaint. As in the first complaint, said court could not have
assumed jurisdiction over the second case for the simple reason that
it was no longer acting as a probate court which was the proper
forum to file such complaint. The termination of the intestate
proceedings and the distribution of the estate to the heirs did not
alter the fact that plaintiffs-appellees' claim was a money claim which
should have been presented before the probate court. The liability of
the late Rosendo de Guzman arose from the breach of his
obligations under the contract of carriage between him and the
unfortunate passenger. The obligations are spelled out by law but
the liability arose from a breach of contractual obligations. The
resulting claim is a money claim.
The only instance wherein a creditor can file an action against a
distributee of the debtor's asset is under Section 5, Rule 88 of the
Rules of Court which provides: têñ.£îhqwâ£
If such contingent claim becomes absolute and is presented to the
court, or to the executor or administrator, within two (2) years from
the time limited for other creditors to present their claims, it may be
allowed by the court if not disputed by the executor or administrator,
and, if disputed, it may be proved and allowed or disallowed by the
court as the facts may warrant. If the contingent claim is allowed, the
creditor shall receive payment to the same extent as the other
creditors if the estate retained by the executor or administrator is
sufficient. But if the claim is not so presented, after having become
18

EN BANC WHEREFORE, it is respectfully prayed that an order be issued


admitting and approving the claim and ordering the administrator to
G.R. No. L-18403 September 30, 1961
pay the Bank the amount of the claim.
IN RE ADMINISTRATION OF THE ESTATE OF PASCUAL
The administrator, on November 5, 1954, opposed the alleging that
VILLANUEVA. MAURICIA G. DE VILLANUEVA, petitioner,
he had no knowledge or information sufficient to form a belief as to
vs.
the truth of the allegations therein. As special defenses, he
PHILIPPINE NATIONAL BANK, defendant-appellant.
interposed —
Ramon B. de los Reyes for defendant-appellant.
That the same indebtedness, if it existed, has already been paid;
Marcos M. Calo for petitioners.
That the caused action for the recovery of the aforesaid amount of
P1,847.45 is barred by the statute of limitations, for more than ten
(10) Years have elapsed since the cause of action accrued up to
PAREDES, J.: present time;
A case certified by the Court of Appeals on the ground that the That the said claim is barred forever on the ground that notice to
issues involved are purely of law. creditors having been published in the MORNING TIMES of Cebu
City, a newspaper of general circulation in on November 16, 23 and
For the administration of the estate of her deceased husband,
30, 1950, ... the Philippine National Bank failed to file its claim within
Pascual Villanueva, the widow Mauricia G. Villanueva, on December
the time limited in the notice, ....
19, 1949, petitioned the Court of First Instance of Agusan, for letters
of Administration (Sp. Proc. No. 67). The petition was set for hearing The appellant PNB, on November 14, 1958, more than four (4)
and Notice thereof was published on February 25, March 4, and 11, Years after the opposition of the claim presented by the
1950, in the Manila Daily Bulletin. At the hearing, other heirs while administrator, filed a pleading captioned "Petition for an Extension of
agreeing to the placing of estate under administration, opposed the time within which to File the Claim of Philippine National Bank",
appointment the widow. The name of Atty. Teodulo R. Ricaforte, alleging, among others, that Sec. 2, Rule 87 of the Rules, allows the
suggested and all the parties agreed. After the taking the required filing of claims even if the period stated in the notice to creditors
oath, Atty. Ricaforte entered upon the performance of his duties. elapsed, upon cause shown and on such terms as equitable; that its
Under date of November 9, 1950 the Clerk of the Agusan CFI, failure to present the claiming with the period stated in the notice,
issued the following Notice to Creditors: was its lack of knowledge of administration proceedings, for while
said maintains a branch office in Agusan, the employees did not
Letters of administration having been issued in the above entitled
come to know of the proceedings, the notice has been published in
case in favor of Teodulo R. Ricaforte for the settle of the intestate of
the Morning Times, a newspaper very limited circulation.
Pascual Villanueva, deceased;
On January 16, 1959, the CFI issued the following Order —
Notice is hereby given to all persons having claims for money
against the decedent, the said Pascual Villanueva, arising from It appearing that the claim of the Philippine National Bank against
contract, express or implied, whether the same be due, not due or the estate of the deceased Pascual Villanueva already barred by the
contingent, for funeral expenses and expenses of last sickness of statute of limitations because the claim was due and demandable
the deceased, and Judgment for money against him, requiring them since December 20, 1940, but filed on July 20, 1953, after the
to file their claims with the clerk of court within six but not beyond expiration of ten years, considering that said filing was furthermore
twelve months after date of the first publication of this notice, serving not present court within the period fixed by Sec. 2, Rule 87 of the
copies of such claims upon administrator, the said Teodulo R. Rules of Court, and no reason having been shown to justify the
Ricaforte. tension of time for its filing, the Court resolves to deny it as it hereby
denies the petition for an extension of time for filing of the claim by
The above notice contained the usual order for publication thereof
the Philippine National Bank. The failure of the Bank to present on
(once a week for three consecutive weeks) which was effected, thru
time the claim was due its own fault and can hardly be considered
the Morning Times of City, a newspaper of general circulation, on
excusable negligence.
Nov. 16, 23 and 30, 1950, which expired on November 16, 1951.
Appellant Bank moved to reconsider the above Order, arguing that
On July 20, 1953, the defendant-appellant Philippine National Bank
the statute of limitations had been suspended by the Moratorium
filed in the administration proceedings, Creditor's Claim of the
Law, and that the courts can extend the period limited in the notice,
following tenor —
under special circumstances, and on grounds of equity (Velasquez
The Philippine National Bank, Creditor of Pascual Villanueva, v. Teod 46 Phil. 757). The PNB listed five incidents, which
deceased, respectfully presents its claim against the estate of the considered special circumstances to warrant the of the extension to
said deceased for Approval as follows: present the claim, among which the lack of knowledge of the
pendency of the administration proceedings; the legitimacy of the
Original amount thru Agusan Agency on Dec. 20, 1939
loan secured the deceased; that when it filed the claim, it did know
........................................................ P600.00
that the period stated in the notice had already expired.
To int. at 10%: on P600.00 fr. 12-20-39 to 6-5-53
In disposing the motion for reconsideration, the lower court, on
...................................................................... 747.45
March 3,1959, said —
Total due as of June 5, 1953 (Daily int. of P0.1644 after June 5,
The Court believes that the filing of money claim on July 20, 1953 in
1953) .......................... P1,347.45
the Office of the Clerk of Court did not suspend running of the period
That the said obligation has been due demandable since Dec. 20, of prescription because said claim was filed out of time and therefore
1940; that the same is true and just claim and that it is still unpaid invalid for all legal purposes. A careful revision of the record shows
without any set-off. that the Philippine National Bank, contrary to the pretension of its
counsel, had knowledge of the present administration proceedings
On October 12, 1954, the Philippine National Bank filed a Motion for
long before July 20, 1953, because the second payment of the claim
Admission of claim, stating —
due to the deceased Pascual Villanueva from the Philippine War
1. That the Philippine National Bank filed its claim dated July 20, Damage Commission in the amount of P6,441.30, was deposited in
1953; the Agusan Agency of the Bank in June, 1951. And in the inventory
filed by the new administrator Francisco S. Conde, on February 27,
2. That the last action taken on the claim was an ordered this
1957, the following item appears:
Honorable Court issued on March 20, 1954, transferring the hearing
of the claim until the next calendar of the court, without objection of Money belonging to the said deceased which came into the hands of
the administrator; the administrator on December 1, 1951, appearing in the Bank A-
1114, Agusan Agency deposited by the late administrator Teodulo
3. That the administrator has not answered the claim nor denied the
R. Ricaforte. — P6,897.52.
same.1awphîl.nèt
19

WHEREFORE, the motion for reconsideration is denied for lack of


merits.
The order of January 16, 1959 was the subject of the appeal to the
Court of Appeals which, as stated at the threshold of this opinion,
certified the same to this Court.
The important issue presented is whether or not the in question is
already barred. Admittedly, the claim was filed outside of the period
provided for in the Order of the lower court, within which to present
claims against the estate. The period fixed in the notice lapsed on
November 16, 1951 and the claim was filed on July 20, 1953 or
about 1 year and 8 months late. This notwithstanding, appellant
contends that it did not know of such administration proceedings, not
even its employees in the Branch Office in Butuan City, Agusan. It is
to be noted that the petition for Letters of Administration and the
Notice to Creditors were duly published in the Manila Daily Bulletin
and in the Morning Times, respectively, which was a full compliance
with the requirements of the Rules. Moreover, the supposed lack of
knowledge of the proceedings on the part of appellant and its
employees had been belied by uncontested and eloquent evidence,
consisting of a deposit of an amount of money by the administrator
Of the estate in said Bank (Agusan Agency). The deposit was made
on December 1, 1951, inspite of which the appellant Bank only filed
its claim on July 20, 1953. It is quite true that the Courts can extend
the period within Which to present claims against the estate, even
after the period limited has elapsed; but such extension should be
granted under special circumstances. The lower did not find any
justifiable reason to give the extension and for one thing, there was
no period to extend, the same had elapsed.
Having reached the above conclusions, We deem it necessary to
determine the question as to whether or not the Moratorium Law had
suspended the prescriptive period for filing of the claim under
consideration.
WHEREFORE, the order subject of the appeal is hereby affirmed,
with costs against appellant Philippine National Bank, in both
instances.
20

EN BANC though they be demandable at a future day "except claims for the
possession of or title to real estate." Section 700 provides that all
G.R. No. L-8235 March 19, 1914
actions commenced against the deceased person for the recovery of
ISIDRO SANTOS, plaintiff-appellant, money, debt, or damages, pending at the time the committee is
vs. appointed, shall be discontinued, and the claims embraced within
LEANDRA MANARANG, administratrix, defendant-appellee. such actions presented to the committee. Section 703 provides that
actions to recover title or possession of real property, actions to
W. A. Kincaid and Thomas L. Hartigan for appellant.
recover damages for injury to person or property, real and personal,
Ramon Salinas for appellee.
and actions to recover the possession of specified articles of
TRENT, J.: personal property, shall survive, and may be commenced and
prosecuted against the executor or administrator; "but all other
Don Lucas de Ocampo died on November 18, 1906, possessed of
actions commenced against the deceased before his death shall be
certain real and personal property which, by his last will and
discontinued and the claims therein involved presented before the
testament dated July 26, 1906, he left to his three children. The
committee as herein provided." Section 708 provides that a claim
fourth clause of this will reads as follows:
secured by a mortgage or other collateral security may be
I also declare that I have contracted the debts detailed below, and it abandoned and the claim prosecuted before the committee, or the
is my desire that they may be religiously paid by my wife and mortgage may be foreclosed or the security be relied upon, and in
executors in the form and at the time agreed upon with my creditors. the event of a deficiency judgment, the creditor may, after the sale of
mortgage or upon the insufficiency of the security, prove such
Among the debts mentioned in the list referred to are two in favor of
deficiency before the committee on claims. There are also certain
the plaintiff, Isidro Santos; one due on April 14, 1907, for P5,000,
provisions in section 746 et seq., with reference to the presentation
and various other described as falling due at different dates (the
of contingent claims to the committee after the expiration of the time
dates are not given) amounting to the sum of P2,454. The will was
allowed for the presentation of claims not contingent. Do plaintiff's
duly probated and a committee was regularly appointed to hear and
claims fall within any of these sections? They are described in the
determine such claims against the estate as might be presented.
will as debts. There is nothing in the will to indicate that any or all of
This committee submitted its report to the court on June 27, 1908.
them are contingent claims, claims for the possession of or title to
On July 14, 1908, the plaintiff, Isidro Santos, presented a petition to
real property, damages for injury to person or property, real or
the court asking that the committee be required to reconvene and
personal, or for the possession of specified articles of personal
pass upon his claims against the estate which were recognized in
property. Nor is it asserted by the plaintiff that they do. The
the will of testator. This petition was denied by the court, and on
conclusion is that they were claims proper to be considered by the
November 21, 1910, the plaintiff instituted the present proceedings
committee.
against the administratrix of the estate to recover the sums
mentioned in the will as due him. Relief was denied in the court This being true, the next point to determine is, when and under what
below, and now appeals to this court. circumstances may the committee be recalled to consider belated
claims? Section 689 provides:
In his first assignment of error, the appellant takes exception to the
action of the court in denying his petition asking that the committee That court shall allow such time as the circumstances of the case
be reconvened to consider his claim. In support of this alleged error require for the creditors to present their claims the committee for
counsel say that it does not appear in the committee's report that the examination and allowance; but not, in the first instance, more than
publications required by section 687 of the Code of Civil Procedure twelve months, or less than six months; and the time allowed shall
had been duly made. With reference to this point the record be stated in the commission. The court may extend the time as
affirmatively shows that the committee did make the publications circumstances require, but not so that the whole time shall exceed
required by law. It is further alleged that at the time the appellant eighteen months.
presented his petition the court had not approved the report of the
It cannot be questioned that thus section supersedes the ordinary
committee. If this were necessary we might say that, although the
limitation of actions provided for in chapter 3 of the Code. It is strictly
record does not contain a formal approval of the committee's report,
confined, in its application, to claims against the estate of deceased
such approval must undoubtedly have been made, as will appear
persons, and has been almost universally adopted as part of the
from an inspection of the various orders of the court approving the
probate law of the United States. It is commonly termed the statute
annual accounts of the administratrix, in which claims allowed
of nonclaims, and its purpose is to settle the affairs of the estate with
against the estate by the committee were written off in accordance
dispatch, so that residue may be delivered to the persons entitled
with its report. This is shown very clearly from the court's order of
thereto without their being afterwards called upon to respond in
August 1, 1912, in which the account of the administratrix was
actions for claims, which, under the ordinary statute of limitations,
approved after reducing final payments of some of the claims
have not yet prescribed.
against the estate to agree with the amounts allowed by the
committee. It is further alleged that at the time this petition was The object of the law in fixing a definite period within which claims
presented the administration proceedings had not been terminated. must be presented is to insure the speedy settling of the affairs of a
This is correct. deceased person and the early delivery of the property of the estate
in the hands of the persons entitled to receive it. (Estate of De Dios,
In his petition of July 14, 1909, asking that the committee be
24 Phil. Rep., 573.)
reconvened to consider his claims, plaintiff states that his failure to
present the said claims to the committee was due to his belief that it Due possibly to the comparative shortness of the period of limitation
was unnecessary to do so because of the fact that the testator, in his applying to such claims as compared with the ordinary statute of
will, expressly recognized them and directed that they should be limitations, the statute of nonclaims has not the finality of the
paid. The inference is that had plaintiff's claims not been mentioned ordinary statute of limitations. It may be safely said that a saving
in the will he would have presented to the committee as a matter of provision, more or less liberal, is annexed to the statute of nonclaims
course; that plaintiff was held to believe by this express mention of in every jurisdiction where is found. In this country its saving clause
his claims in the will that it would be unnecessary to present them to is found in section 690, which reads as follows:
the committee; and that he did not become aware of the necessity of
On application of a creditor who has failed to present his claim, if
presenting them to the committee until after the committee had
made within six months after the time previously limited, or, if a
made its final report.
committee fails to give the notice required by this chapter, and such
Under these facts and circumstances, did the court err in refusing to application is made before the final settlement of the estate, the
reconvene the committee for the purpose of considering plaintiff's court may, for cause shown, and on such terms as are equitable,
claim? The first step towards the solution of this question is to renew the commission and allow further time, not exceeding one
determine whether plaintiff's claims were such as a committee month, for the committee to examine such claim, in which case it
appointed to hear claims against an estate is, by law, authorized to shall personally notify the parties of the time and place of hearing,
pass upon. Unless it was such a claim plaintiff's argument has no and as soon as may be make the return of their doings to the court.
foundation. Section 686 empowers the committee to try and decide
If the committee fails to give the notice required, that is a sufficient
claims which survive against the executors and administrators, even
cause for reconvening it for further consideration of claims which
21

may not have been presented before its final report was submitted to If it is unnecessary to present such claim to the committee, the
the court. But, as stated above, this is not the case made by the source of nonclaims is not applicable. It is not barred until from four
plaintiff, as the committee did give the notice required by law. Where to ten years, according to its classification in chapter 3 of the Code
the proper notice has been given the right to have the committee of Civil Procedure, establishing questions upon actions. Under such
recalled for the consideration of a belated claim appears to rest first circumstances, when then the legal portion is determined? If, in the
upon the condition that it is presented within six months after the meantime the estate has been distributed, what security have the
time previously limited for the presentation of claims. In the present differences against the interruption of their possession? Is the
case the time previously limited was six months from July 23, 1907. administrator required to pay the amount stipulated in the will
This allowed the plaintiff until January 23, 1908, to present his claims regardless of its correctness? And, if not, what authority has he to
to the committee. An extension of this time under section 690 rested vise the claim? Section 706 of the Code of Civil Procedure provides
in the discretion of the court. (Estate of De Dios, supra.) In other that an executor may, with the approval of the court, compound with
words, the court could extend this time and recall the committee for a debtor of deceased for a debt due the estate, But he is nowhere
a consideration of the plaintiff's claims against the estate of justice permitted or directed to deal with a creditor of the estate. On the
required it, at any time within the six months after January 23, 1908, contrary, he is the advocate of the estate before an impartial
or until July 23, 1908. Plaintiff's petition was not presented until July committee with quasi-judicial power to determine the amount of the
14, 1909. The bar of the statute of nonclaims is an conclusive under claims against the estate, and, in certain cases, to equitably adjust
these circumstances as the bar of the ordinary statute of limitations the amounts due. The administrator, representing the debtor estate,
would be. It is generally held that claims are not barred as to and the creditor appear before this body as parties litigant and, if
property not included in the inventory. (Waughop vs. Bartlett, 165 III., either is dissatisfied with its decision, an appeal to the court is their
124; Estate of Reyes, 17 Phil. Rep., 188.) So also, as indicated by remedy. To allow the administrator to examine and approve a claim
this court in the case last cited, fraud would undoubtedly have the against the estate would put him in the dual role of a claimant and a
same effect. These exceptions to the operation of the statute are, of judge. The law in this jurisdiction has been so framed that this may
course, founded upon the highest principles of equity. But what is not occur. The most important restriction, in this jurisdiction, on the
the plea of the plaintiff in this case? Simply this: That he was disposition of property by will are those provisions of the Civil Code
laboring under a mistake of law — a mistake which could easily have providing for the preservation of the legal portions due to heirs by
been corrected had he sought to inform himself; a lack of information force of law, and expressly recognized and continued in force by
as to the law governing the allowance of claims against estate of the sections 614, 684, and 753 of the Code of Civil Procedure. But if a
deceased persons which, by proper diligence, could have been debt is expressly recognized in the will must be paid without its being
remedied in ample to present the claims to the committee. Plaintiff verified, there is nothing to prevent a partial or total alienation of the
finally discovered his mistake and now seeks to assert his right when legal portion by means of a bequest under a guise of a debt, since
they have been lost through his own negligence. Ignorantia legis all of the latter must be paid before the amount of the legal portion
neminem excusat. We conclude that the learned trial court made no can be determined.
error in refusing to reconvene the committee for the purpose of
We are aware that in some jurisdictions executors and
considering plaintiff's claims against the estate.
administrators are, by law, obligated to perform the duties which, in
In his second assignment of error the appellant insists that the court this jurisdiction, are assign to the committee on claims; that in some
erred in dismissing his petition filed on November 21, 1910, wherein other jurisdictions it is the probate court itself that performs these
he asks that the administratrix be compelled to pay over to him the duties; that in some jurisdictions the limitation upon the presentment
amounts mentioned in the will as debts due him. We concede all that of claims for allowance is longer and, possibly, in some shorter; and
is implied in the maxim, dicat testor et erit lex. But the law imposes that there is a great divergence in the classification of actions which
certain restrictions upon the testator, not only as to the disposition of survive and actions which do not survive the death of the testator. It
his estate, but also as to the manner in which he may make such must be further remembered that there are but few of the United
disposition. As stated in Rood on Wills, sec. 412: "Some general States which provide for heirs by force of law. These differences
rules have been irrevocably established by the policy of the law, render useless as authorities in this jurisdiction many of the cases
which cannot be exceeded or transgressed by any intention of the coming from the United States. The restriction imposed upon the
testator, be it ever so clearly expressed." testator's power to dispose of his property when they are heirs by
force of law is especially important. The rights of these heirs by force
It may be safely asserted that no respectable authority can be found
law pass immediately upon the death of the testator. (Art. 657, Civil
which holds that the will of the testator may override positive
Code.) The state intervenes and guarantees their rights by many
provisions of law and imperative requirements of public policy. (Page
stringent provisions of law to the extent mentioned in article 818 of
on Wills, sec. 461.)
the Civil Code. Having undertaken the responsibility to deliver the
Impossible conditions and those contrary to law and good morals legal portion of the net assets of the estate to the heirs by force of
shall be considered as not imposed, . . . (Art. 792, Civil Code.) law, it is idle to talk of substituting for the procedure provided by law
for determining the legal portion, some other procedure provided in
Conceding for the moment that it was the testator's desire in the
the will of the testator. The state cannot afford to allow the
present case that the debts listed by him in his will should be paid
performance of its obligations to be directed by the will of an
without referring them to a committee appointed by the court, can
individual. There is but one instance in which the settlement of the
such a provision be enforced? May the provisions of the Code of
estate according to the probate procedure provided in the Code of
Civil Procedure relating to the settlement of claims against an estate
Civil Procedure may be dispense with, and it applies only to intestate
by a committee appointed by the court be superseded by the
estates. (Sec. 596, Code Civ. Proc.) A partial exemption from the
contents of a will?
lawful procedure is also contained in section 644, when the executor
It is evident from the brief outline of the sections referred to above or administrator is the sole residuary legatee. Even in such case,
that the Code of Civil Procedure has established a system for the and although the testator directs that no bond be given, the executor
allowance of claims against the estates of decedents. Those are at is required to give a bond for the payment of the debts of the
least two restrictions imposed by law upon the power of the testator testator. The facts of the present case do not bring it within either of
to dispose of his property, and which pro tanto restrict the maxim this sections. We conclude that the claims against the estate in the
that "the will of the testator law: (1) His estate is liable for all legal case at bar were enforceable only when the prescribed legal
obligations incurred by him; and (2) he can not dispose of or procedure was followed.
encumber the legal portion due his heirs by force of law. The former
But we are not disposed to rest our conclusion upon this phase of
take precedence over the latter. (Sec. 640, Code Civ, Proc.) In case
the case entirely upon legal grounds. On the contrary we are
his estate is sufficient they must be paid. (Sec, 734, id.) In case the
strongly of the opinion that the application of the maxim, "The will of
estate is insolvent they must be paid in the order named in section
the testator is the law of the case," but strengthens our position so
735. It is hardly necessary to say that a provision in an insolvent's
far as the present case is concerned.
will that a certain debt be paid would not entitle it to preference over
other debts. But, if the express mention of a debt in the will requires It will ordinarily be presumed in construing a will that the testator is
the administrator to pay it without reference to the committee, what acquainted with the rules of law, and that he intended to comply with
assurance is there, in the case of an insolvent estate, that it will not them accordingly. If two constructions of a will or a part thereof are
take precedence over preferred debts? possible, and one of these constructions is consistent with the law,
22

and the other is inconsistent, the presumption that the testator followed of requiring of such claims be viseed by the committee on
intended to comply with the law will compel that construction which claims.
is consistent with the law to be adopted. (Page on Wills, sec. 465.)
The direction in the will for the executor to pay all just debts does not
Aside from this legal presumption, which we believe should apply in mean that he shall pay them without probate. There is nothing in the
the present case as against any construction of the will tending to will to indicate that the testator in tended that his estate should be
show an intention of the testator that the ordinary legal method of administered in any other than the regular way under the statute,
probating claims should be dispensed with, it must be remembered which requires "all demands against the estates of the deceased
that the testator knows that the execution of his will in no way affects persons," "all such demands as may be exhibited," etc. The statute
his control over his property. The dates of his will and of his death provides the very means for ascertaining whether the claims against
may be separated by a period of time more or less appreciable. In the estate or just debts. (Kaufman vs. Redwine, 97 Ark., 546.)
the meantime, as the testator well knows, he may acquire or dispose
See also Collamore vs. Wilder (19 Kan., 67); O'Neil vs. Freeman (45
of property, pay or assume additional debts, etc. In the absence of
N. J. L., 208).
anything to the contrary, it is only proper to presume that the
testator, in his will, is treating of his estate at the time and in the The petition of the plaintiff filed on November 21, 1910, wherein he
condition it is in at his death. Especially is this true of his debts. asks that the administratrix be compelled to pay over to him the
Debts may accrue and be paid in whole or in part between the time amounts mentioned in the will as debts due him appears to be
the will is made and the death of the testator. To allow a debt nothing more nor less than a complaint instituting an action against
mentioned in the will in the amount expressed therein on the ground the administratrix for the recovery of the sum of money. Obviously,
that such was the desire of the testator, when, in fact, the debt had the plaintiff is not seeking possession of or title to real property or
been wholly or partly paid, would be not only unjust to the residuary specific articles of personal property.
heirs, but a reflection upon the good sense of the testator himself.
When a committee is appointed as herein provided, no action or suit
Take the present case for example. It would be absurd to say that
shall be commenced or prosecute against the executor or
the testator knew what the amount of his just debt would be at a
administrator upon a claim against the estate to recover a debt due
future and uncertain date. A mere comparison of the list of the
from the state; but actions to recover the seizing and possession of
creditors of the testator and the amounts due them as described in
real estate and personal chattels claimed by the estate may be
his will, with the same list and amounts allowed by the committee on
commenced against him. (Sec. 699, Code Civ. Proc.)
claims, shows that the testator had creditors at the time of his death
not mention in the will at all. In other instances the amounts due this The sum of money prayed for in the complaint must be due the
creditors were either greater or less than the amounts mentioned as plaintiff either as a debt of a legacy. If it is a debt, the action was
due them in the will. In fact, of those debts listed in the will, not a erroneously instituted against the administratrix. Is it a legacy?
single one was allowed by the committee in the amount named in
Plaintiff's argument at this point becomes obviously inconsistent.
the will. This show that the testator either failed to list in his will all
Under his first assignment of error he alleges that the committee on
his creditors and that, as to those he did include, he set down an
claims should have been reconvened to pass upon his claim against
erroneous amount opposite their names; or else, which is the only
the estate. It is clear that this committee has nothing to do with
reasonable view of the matter, he overlooked some debts or
legacies. It is true that a debt may be left as a legacy, either to the
contracted new ones after the will was made and that as to others he
debtor (in which case it virtually amounts to a release), or to a third
did include he made a partial payments on some and incurred
person. But this case can only arise when the debt is an asset of the
additional indebtedness as to others.
estate. It would be absurd to speak of a testator's leaving a bare
While the testator expresses the desire that his debts be paid, he legacy of his own debt. (Arts. 866, 878, Civil Code.) The creation of
also expressly leaves the residue of his estate, in equal parts, to his a legacy depends upon the will of the testator, is an act of pure
children. Is it to be presumed that he desired to overpay some of his beneficence, has no binding force until his death, and may be
creditors notwithstanding his express instructions that his own avoided in whole or in part by the mere with whim of the testator,
children should enjoy the net assets of his estate after the debts prior to that time. A debt arises from an obligation recognized by law
were paid? Again, is the net statement of the amount due some of (art. 1089, Civil Code) and once established, can only be
his creditors and the omission all together of some of his creditors extinguished in a lawful manner. (Art. 1156, id.) Debts are
compatible with his honorable and commendable desire, so clearly demandable and must be paid in legal tender. Legacies may, and
expressed in his will, that all his debts be punctually paid? We often do, consist of specific articles of personal property and must be
cannot conceive that such conflicting ideas were present in the satisfied accordingly. In order to collect as legacy the sum
testator's mind when he made his will. mentioned in the will as due him, the plaintiff must show that it is in
fact a legacy and not a debt. As he has already attempted to show
Again, suppose the testator erroneously charged himself with a debt
that this sum represents a debt, it is an anomaly to urge now it is a
which he was under no legal or even moral obligation to pay. The
legacy.
present case suggests, if it does not actually present, such a state of
affairs. Among the assets of the estate mentioned in the will is a Was it the intention of the testator to leave the plaintiff a legacy of
parcel of land valued at P6,500; while in the inventory of the P7,454? We have already touched upon this question. Plaintiff's
administratrix the right to repurchase this land from one Isidro claim is described by the testator as a debt. It must be presumed
Santos is listed as an asset. Counsel for the administratrix alleges that he used this expression in its ordinary and common acceptation;
that he is prepared to prove that this is the identical plaintiff in the that is, a legal liability existing in favor of the plaintiff at the time the
case at bar; that the testator erroneously claimed the fee of this land will was made, and demandable and payable in legal tender. Had
in his last will and stated Santos' rights in the same as a mere debt the testator desired to leave a legacy to the plaintiff, he would have
due him of P5,000; that in reality, the only asset of the testator done so in appropriate language instead of including it in a
regard to this land was the value of the right to repurchase, while the statement of what he owed the plaintiff. The decedent's purpose in
ownership of the land, subject only to that right of redemption, listing his debts in his will is set forth in the fourth clause of the will,
belonged to Santos; that the right to repurchase this land expired in quoted above. There is nothing contained in that clause which
1907, after the testator's death. Assuming, without in the least indicates, even remotely, a desire to pay his creditors more than was
asserting, that such are the underlying facts of this case, the unjust legally due them.
consequences of holding that a debt expressly mentioned in the will
A construction leading to a legal, just and sensible result is
may be recovered without being presented to the committee on
presumed to be correct, as against one leading to an illegal,
claims, is at once apparent. In this supposed case, plaintiff needed
unnatural, or absurd effect. (Rood on Wills, sec. 426.)
only wait until the time for redemption of the land had expired, when
he would acquired an absolute title to the land, and could also have The testator, in so many words, left the total net assets of his estate,
exacted the redemption price. Upon such a state of facts, the one without reservation of any kind, to his children per capita. There is no
item of P5,000 would be a mere fictitious debt, and as the total net indication that he desired to leave anything by way of legacy to any
value of the estate was less than P15,000, the legal portion of the other person. These considerations clearly refute the suggestion that
testator's children would be consumed in part in the payment of this the testator intended to leave plaintiff any thing by way of legacy. His
item. Such a case cannot occur if the prescribed procedure is claim against the estate having been a simple debt, the present
23

action was improperly instituted against the administratrix. (Sec. 699,


Code Civ. Proc.)
But it is said that the plaintiff's claims should be considered as
partaking of the nature of a legacy and disposed of accordingly. If
this be perfect then the plaintiff would receive nothing until after all
debts had been paid and the heirs by force of law had received their
shares. From any point of view the inevitable result is that there must
be a hearing sometime before some tribunal to determine the
correctness of the debts recognized in the wills of deceased
persons. This hearing, in the first instance, can not be had before the
court because the law does not authorize it. Such debtors must
present their claims to the committee, otherwise their claims will be
forever barred.
For the foregoing reasons the orders appealed from are affirmed,
with costs against the appellant.
24

EN BANC which was also opposed by the oppositor-appellee Juana Reyes de


Ilano in a pleading of October 20, 1933, alleging, among other
G.R. No. L-42092 October 28, 1936
things, that the valuation of the properties made by the
In re Estate of the deceased Andres Reyes. FELISA CAMIA DE commissioners on claims and appraisal is inadequate and unjust;
REYES, petitioner-appellant, that said project does not contain all the properties that should be
vs. partitioned; that it contains properties belonging to the conjugal
JUANA REYES DE ILANO, oppositor-appellee. partnership of the first marriage; and that said project is based upon
the will, some of the provisions of which are inofficious and illegal; at
Manuel Jose for appellant.
the same time submitting a counterproject of partition with an
Vicente J. Francisco for appellee.
appraisal of the properties therein enumerated, which appraisal is
different from that made by the commissioners on claims and
appraisal. This counterproject of partition presented by the
oppositor-appellee is the one admitted and approved by the court.
VILLA-REAL, J.:
The first legal question to be decided in this appeal, which is raised
This is an appeal taken by the petitioner Felisa Camia de Reyes
in the first assignment of alleged error, is whether or not the
from the resolution of the Court of First Instance of Cavite, the
oppositor-appellee Juana Reyes de Ilano is still entitled to impugn,
dispositive part of which reads as follows:
by means of the testimony of the witness Benedicto A. Ilano, the
In view of the foregoing, the court rejects the project of partition of valuation or appraisal of the properties of the deceased Andres
the executrix Felisa Camia and approves the counterproject Reyes, made by the commissioners on claims and appraisal and
presented by the heiress, Reyes. The accounts presented by the contained in their report of May 8, 1933.
executrix are approved with the above-stated amendments. The
The executrix-appellant Felisa Camia de Reyes contends that, as
balance of P367.11 against the executrix should be reimbursed by
the appellee failed to file her objection to said report in due time, all
her equally to the heirs of the deceased. It is ordered that the
evidence presented to impugn it is untimely after the report in
guardian ad litem of the minor Bibiano Reyes be paid the sum of
question has been submitted to the court and declared final and
P29.40 for services, as such, rendered to said minor, charging it, as
conclusive in an order of June 19, 1933, which reads as follows:
the pensions given to said minor, to the latters' share. So ordered.
The heiress Juana Reyes has filed a motion to the effect that the
In support of her appeal, the appellant assigns eleven alleged errors
administratrix be ordered to present a project of partition as soon as
as committed by the court a quo in its resolution in question, which
possible.
will be discussed in the course of this decision.
At the same time and pursuant to the order of this court of the 6th
The following facts have been established during the trial of the
instant, counsel for Juana Reyes has entered a detailed and specific
case:
opposition to the accounts presented by the administratrix, and the
Andres Reyes and Luciana Farlin were married in the year 1893, committee on claims and appraisal has likewise submitted a final
having had six children, three of whom died without heirs before their report, rejecting, for the reason stated therein, the claims of Albino
parents' death, and two died also without heirs after the death of Galeca, Rafaela Dominguez, Raymundo Samson, Filomena
their mother Luciana Farlin, leaving the herein oppositor-appellee Dominguez and Felisa Camaña, and no appeal having been duly
Juana Reyes de Ilano as their only surviving child. About said year taken from the resolution of the committee on claims and appraisal,
1893, the parents of Andres Reyes leased certain parcels of land said report is final and conclusive.
from the Spanish government. Upon their death during the Spanish
Wherefore, the administratrix is ordered to present a project of
regime, their son Andres Reyes succeeded them in said lease and
partition within the period of ten (10) days, and as soon as the
the latter afterwards purchased said leased lands as friar lands from
project in question is filed, the court will set the final account as well
the Insular Government in the years 1909, 1910 and 1921, it
as the said project of partition for hearing.
appearing of record that he was married to Luciana Farlin (Exhibits
E, F, G, H, I, J, K, L, and M, and Exhibits 22, 23 to 23-I and 30). On The administratrix is ordered to pay to the commissioners on claims
October 1, 1910, Luciana Farlin also acquired by purchase from the and appraisal their lawful fees and expenses.
Insular Government certain parcels of friar land described in
It is inferred from the above-quoted order that what was declared
certificates of sale Exhibits A, B, C and D. After the death of Luciana
final and conclusive was the report of the commissioners on claims
Farlin on November 12, 1922, her surviving spouse, Andres Reyes,
and appraisal with respect to the claims of Albino Galeca, Rafaela
contracted a second marriage with the herein applicant-appellant
Dominguez, Raymundo Samson, Filomena Dominguez and Felisa
Felisa Camia. A son named Bibiano Reyes was born of said second
Camaña, who took no appeal from the resolution of said
marriage. During her marriage to Andres Reyes, Felisa Camia also
commissioners rejecting the claims in question. Section 773 of the
purchased a parcel of friar land (Exhibit N) from the Government on
Code of Civil Procedure grants the creditor of a deceased person the
June 3, 1930, and another on August 2, 1927, from her husband
right to appeal to the competent Court of First Instance from the
Andres Reyes, who had, acquired it on May 16, 1927, by purchase
disallowance, in whole or in part, of his claim by the committee, on
from the Insular Government, as part of the friar lands (Exhibit O).
claims and appraisal, and failure to exercise this right within the
Andres Reyes died on April 20, 1932, leaving a will (Exhibit A) which
period and in the manner prescribed by section 775 of said Code
was duly probated on June 21, 1933. He was survived by his wife,
makes the committee's resolution final and prevents the court from
the herein executrix and appellant Felisa Camia, his only son had
acquiring jurisdiction over the matter (Kette vs. Suarez, 55 Phil.,
with her, named Bibiano Reyes, and his daughter by his first
712).
marriage, the herein oppositor-appellee Juana Reyes de Ilano.
Felisa Camia qualified on June 25, 1932, as executrix of the estate In the case of Siy Chong Keng, vs. Collector of Internal Revenue (60
left by the deceased husband Andres Reyes. Severo Abellara and Phil., 493), this court laid down the following doctrine:
Luis Gaerlan were appointed commissioners on claims and
1. DESCENT AND DISTRIBUTION; COMMITTEE ON CLAIMS AND
appraisal and, after having qualified for their post, they presented
APPRAISALS; COLLECTOR OF INTERNAL REVENUE. — There is
their final report on May 8, 1933. The herein appellant Felisa Camia
no provision of law which makes it the duty of the Collector of
filed her first account, as administratrix, on May 13, 1933. The
Internal Revenue to take part in the deliberations of the
appellee Juana Reyes de Ilano filed her opposition to this account in
commissioners on claims and appraisals nor is he required to take
her pleadings of June 3 and 12, 1933, claiming that some of the
exceptions to the report of such a committee and appeal to the court
items of expenses stated therein are unnecessary and inaccurate.
for a revision of its appraisals. The statute provides that the
On October 13, 1933, said executrix-appellant presented the second
committee, after being sworn to make a true appraisal, shall
account of her administration which was likewise opposed by the
appraise the value of the estate in money and return their warrants
oppositor-appellee Juana Reyes de Ilano on the ground that,
with such appraisal to the court and shall deliver a copy of the
according to her, it is incomplete and that certain items of expenses
appraisal to the executor or administrator. (Sec. 670, Code of Civil
and income, which are enumerated in her pleading of opposition, are
Procedure.)
vague, unnecessary and inaccurate. On October 16, 1933, the
executrix-appellant Felisa Camia de Reyes filed a project of partition,
25

2. ID.; ID.; ID.; PURPOSE OF INVENTORY AND APPRAISAL OF an expense of P3.19 a month for electricity for the preservation of
AN ESTATE. — Apparently the statute does not require approval of the house under administration, is not excessive and should be
the committee's appraisals by the court; but doubtless exceptions approved.
thereto might be taken by the executor or administrator upon whom
The item of expenses for the novenary or vigil for the soul of the
a copy was served. The purpose of the inventory and appraisal of
deceased Andres Reyes, as well as for the funeral and religious
the estate of the decedent is to aid the court in revising the accounts
ceremonies enjoined by the deceased in his will to be celebrated in
and determining the liabilities of the executor or administrator and in
accordance with his social standing of the deceased in the Province
making a final and equitable distribution (partition) of the estate and
of Cavite.
otherwise to facilitate the administration of the estate.
Summarizing all that has been stated in connection with the third,
It is very clear, therefore, that the committee's appraisal of the estate
fourth, fifth and sixth assignments of error, this court believes that all
of the deceased is not conclusive and the court is not bound to adopt
the items rejected by the lower court, which are the subject matter of
it.
said assignments of error, should be approved with the exception of
Therefore, the court a quo committed no error in permitting those of June 23 and 25, 1932, referring to the obtainment of the
Benedicto A. Ilano to testify for the purpose of impugning the bond for the executrix and amounting to P4.20. The total amount of
committee's appraisal of the estate of the deceased. said items which should be approved is P1,057.68.
The second question to be decided is whether or not the lower court The lower court found that the total amount of the disbursements
erred in rejecting certain items contained in the two accounts of the made by the executrix Felisa Camia de Reyes, after deducting all
executrix Felisa Camia de Reyes and stated in the third, fourth, fifth the expenses rejected by it as improper, is P2,405.42. Adding the
and sixth assignments of error.lâwphi1.nêt P1,057.68, which this court found to have been improperly rejected,
to said sum, makes P3,463.10 the total amount of the expenses for
Said items refer to certain expenses for transportation and
which the executrix should be reimbursed by the estate. If the sum of
subsistence incurred by the executrix, and her mother and minor
P2,772.53, representing the income, is subtracted from the
child who accompanied her on her trips made for the benefit of the
abovestated amount, there is a balance of P690.57 which the estate
estate during the period from the month of May 1932 to the month of
of Andres Reyes should pay to said executrix. Furthermore said
April 1933; for medicine for the minor Bibiano Reyes; for electricity
executrix is entitled to collect P81.94 as commission upon the sum
consumed in the house of the deceased wherein his widow, the
of P3,463.10 at the rate of 3 per cent upon the first P2,000 and 1 ½
herein executrix, and her minor child continued to live; and for the
per cent upon the excess, as provided by section 680 of the Code of
funeral and the novenary, commonly called the "vigil", for the soul of
Civil Procedure.
the deceased.
Turning now to the seventh assignment of alleged error, the question
The expenses for transportation and subsistence refer to the trips
to be decided is whether the parcels of land designated by the letters
made by the executrix, accompanied by her mother and son, to the
e, f , g, h, i, j, k, l and m in the inventory of the executrix-appellant
Court of First Instance of Cavite to attend the hearings in connection
Felisa Camia de Reyes are private properties of the deceased
with the testamentary proceedings; to the hacienda belonging to the
Andres Reyes or are properties of his conjugal partnership with his
estate under her administration; and to Manila in order to interview
wife by his first marriage, Luciana Farlin.
her attorney also in connection with the testamentary proceedings.
All these expenses were necessary for the care and administration It appears uncontroverted from the oral as well as the documentary
of the estate and should, therefore, be approved. evidence presented at the trial that said parcels were originally friar
lands which the parents of Andres Reyes leased from the
To all appearances the company of the mother of the executrix
Government during the Spanish regime. Andres Reyes succeeded
Felisa Camia de Reyes, surviving spouse of the deceased whose
his parents in said lease and later acquired said leased lands by
testamentary estate is under consideration, and that of her minor
absolute purchase from the Insular Government on different dates,
son were unnecessary. Taking into consideration, however, that the
that is, he purchased one parcel on May 9, 1910 (Exhibit J, transfer
executrix is only 31 years of age and is the widow of a decedent
certificate of title No. 1817), another parcel on March 29, 1921,
who, in life, had been a good social standing, Philippine idiosyncrasy
(Exhibit I), and the rest on April 5, 1911 (Exhibits E, F, G, H, K, L and
and tradition demand that she be surrounded by every protection
M and 22, 23 to 23-I and 30, and transfer certificates of title Nos.
and care needed by a widow of good reputation, in respect of the
3230, 3228 [Exhibit 26], 3229 [Exhibit 27], 3270 [Exhibit 28], 3231
memory of her deceased husband. For these reasons this court is of
[Exhibit 29], 4324 [Exhibit 30], and 3232 [Exhibit 31]). All these
the opinion that the company of the mother and son of the executrix
parcels were acquired by said Andres Reyes during the existence of
during the trips which she had to make in connection with the affairs
his first marriage to Luciana Farlin, who died on November 12, 1922.
of the estate of which she was the testamentary executrix, is justified
It does not appear that a liquidation has been made of the ganancial
and, consequently , the expenses for transportation and subsistence
property belonging to the conjugal partnership of Andres Reyes and
incurred by her and her companions should be approved.
Luciana Farlin.
However, with respect to the items of June 23 and 25, 1932, which
Article 1407 of the Civil Code provides as follows:
consist of transportation expenses to Cavite of the executrix, her
mother and son for the purpose of looking for a surety, and the sum ART. 1407. All the property of the spouses shall be deemed
of P1.50 paid for certified copies of the assessed value of the partnership property in the absence of proof that it belongs
property of the sureties, which expenses amount to P4.20, they exclusively to the husband or to the wife.
should be rejected in accordance with the doctrine laid down in Sulit
In the case of Guinguing vs. Abuton and Abuton (48 Phil., 144), this
vs. Santos (56 Phil., 626).
court laid down the following doctrine:
As to the sum of P6 which the executrix paid for medicine used for
2. HUSBAND AND WIFE; CONJUGAL PROPERTY; TITLE IN
her minor child, Bibiano Reyes, while it is true that the sum of P25 a
NAME OF ONE SPOUSE ONLY. — Property acquired by the
month, chargeable to the estate, is allotted to said minor for his
spouses during marriage pertains to the conjugal partnership
education and support, this court is of the opinion that the extra
regardless of the form in which the title is taken; and the fact that a
payment of P6 for medicine is not unwarranted and should,
composition title to the property has been, taken in the name of one
therefore, be also approved.
of the spouses only, whether husband or wife, does not change the
In the fifth assignment of alleged error, it is claimed that the lower character of the property.
court erred in having disapproved the sum of P58.40 spent for
In the unpublished case of Espiritu vs. Bernardino (G. R. No. 36371,
electricity consumed in the house of the deceased Andres Reyes
promulgated on March 18, 1933 [58 Phil., 902]), one Adriano Espiritu
from April 30, 1932, to the month of October, 1933, or during one
acquired a lot of the friar lands by assignment from Antonio
year and six months approximately. At the time of the death of
Gregorio, with the approval of the Director of Lands. This acquisition
Andres Reyes, he was living with his wife by his second marriage,
took place during the existence of Adriano Espiritu's marriage to his
Felisa Camia de Reyes, and his son also by his second marriage,
wife Sotera Ramoy. This court held in a decision of a division of
Bibiano Reyes, and it was natural that she should continue living
three that said lot had the nature of conjugal partnership property.
with her said son in said house, not only because it is their home but
also to watch over and preserve it, as testamentary executrix, and
26

Therefore, according to law and jurisprudence, it is sufficient to prior to the day set for the taking of the deposition, the executrix had
prove that the property was acquired during the marriage in order been notified of the date thereof, and two days before the date in
that the same may be deemed conjugal property. In this case the question she had been served by mail with a copy of the opposition
parties admit that the parcels of land under consideration were to the second or final account, together with a copy of the opposition
purchased by the deceased Andres Reyes during his marriage to his to the project of partition and a copy of the counterproject of partition
first wife Luciana Farlin. The mere fact that Andres Reyes appears made by said attorney for the oppositor. On page 10 of the
as purchaser in the certificates of sale and in the certificates of titles appellee's brief it is stated that the originals of said pleadings were
does not change the ganacial nature of said lands. In the mailed to the office of the clerk of the Court of First Instance of
unpublished case of Benavides vs. Tordilla and Reyes (G. R. No. Cavite on October 20, 1933, it being presumed that they were
39497, promulgated on March 5, 1934 [59 Phil., 918]), the spouses received by said office on the following day, October 21, 1933. The
Jose I. Borja and Sofia Benavides, during their marriage. built a deposition in question took place on the 24th and 25th of said month
house on a lot which was the paraphernal property of the wife. This and year. Furthermore, said deposition contains the statement of the
court, in a division of three, held that the house is presumed to be attorney for the executrix that he received said copies of the
conjugal property in the absence of conclusive evidence showing oppositor's opposition to the second account and to the project of
that the money spent in the construction thereof belongs privately to partition, and her counterproject of partition at 4.50 p. m. on October
any of the spouses, the testimony of the wife, to the effect that said 23, 1933, or one day before the taking of the deposition which, as
money exclusively belonged to her and that the posts belonged to stated, took place on the 24th of said month and year, at 4:30 p. m.
the old house which she inherited from her deceased father, not The deposition in question was continued on the following day,
being sufficient to destroy said presumption. October 25, 1933, and said attorney for the executrix had
opportunity to cross-examine, and in fact he cross-examined the
Therefore, the court a quo committed no error in declaring that the
deponent. In the opinion of this court, these facts are sufficient to
abovestated parcels belong to the conjugal partnership of the
show that the admission of said deposition as evidence by the lower
deceased Andres Reyes and his first wife Luciana Farlin.
court did not constitute an error inasmuch as in the taking thereof
With respect the parcels of land described in Exhibits O and N, there were no defects or irregularities that might have affected the
which are the subject matter of the eighth assignment of alleged rights of any of the parties.
error, they appear to have been purchased by Felisa Camia during
In the case of Lim Cuan Sy vs. Northern Assurance Co. (55 Phil.,
her marriage to the deceased Andres Reyes, or in the years 1927
248), this court laid down the following doctrine:
and 1930, respectively. Inasmuch as these parcels were acquired
under the same circumstances as those stated in the seventh A deposition taken, under the conditions prescribed by law, and
assignment of alleged error, all that has been said in connection with upon due notice, allowing two full days, exclusive of Sunday, to the
the latter is applicable to them. Therefore, they are also on conjugal opposite party, should not be suppressed merely because the
property of the spouses Andres Reyes and Felisa Camia de Reyes. attorney for such party may have been unable to attend at the time
Furthermore, on page 210 of the file of exhibits of this case, there is fixed for the taking of the deposition.
a copy of an affidavit of the deceased Andres Reyes, dated
In the case of Muñiz vs. Muñiz (53 Phil., 782), this court likewise laid
September 2, 1927, wherein the deponent states that he was selling
down the following doctrine:
lot No. 6327 to his wife Felisa Camia by means of the certificate of
sale, Exhibit O, for the sole purpose of transferring said lot in his In the present case, counsel for the adverse party had ample notice
wife's name because he had a daughter by his first wife and a son of the taking of the depositions, and he was present at the taking of
by his second wife, and because he had no time to administer it, but the depositions and cross-examined the deponents. The affidavit,
that the first installment was paid with the money belonging to both accompanying the motion for the taking of the depositions, set forth
(Andres Reyes and Felisa Camia). This sale is, of course, null and facts which clearly authorized the taking of the depositions under
void in accordance with the provisions of article 1458 of the Civil paragraph 4 of section 355 of the Code of Civil Procedure.
Code, it not appearing that a separation of property has been agreed Considering these circumstances and it being evident that the rights
upon; but this nullity does not change the nature of said lands as of the adverse parties were not adversely affected by the fact that no
conjugal property of the spouses Andres Reyes and Felisa Camia. copy of the affidavit was served on them, the court below did not err
in admitting said depositions.
As to the ninth assignment of alleged error, the question whether the
land described on page 2, paragraph 2, letter m, of the will is The next question to be decided is that raised in the eleventh and
conjugal property or private property of Andres Reyes has already last assignment of alleged error which consists in whether or not the
been decided upon in discussing the seventh assignment of alleged lower court erred in accepting the counterproject of partition
error. This land is the same lot No. 1686 and it has been stated that presented by the oppositor-appellee Juana Reyes de Ilano.
it is conjugal property of Andres Reyes and his wife by his first
There is nothing in the law imposing upon the executor or
marriage, Luciana Farlin, having been purchased in his name during
administrator the obligation to present a project of partition for the
his marriage to Luciana Farlin, as shown by certificate of sale No.
distribution of the estate of a deceased person. Section 753 of the
4320 (Exhibits M, 24 and 31).
Code of Civil Procedure authorizes the court to assign ". . . the
With respect to the house mentioned on page 3 of the inventory, its residue of the estate to the persons entitled to the same, and in its
ganancial nature has been established by Petrona Reyes, younger order the court shall name the persons and proportions, or parts, to
sister of Andres Reyes, in her deposition of October 24, 1933. This which each is entitled . . ." (See also article 1052, Civil Code.) It is
witness testified that said house was constructed one year after the referred from these legal provisions that it is the Court of First
death of her sister-in-law Luciana Farlin with money left by the latter Instance of Cavite alone that may make the distribution of his estate
upon her death, which was deposited with said witness; that Andres and determine the persons entitled, and it may require the executrix
Reyes took from her the money needed by him for the construction to present a project of partition to better inform itself of the condition
of the house; and that said house cost P10,000. The executrix- of the estate to be distributed and so facilitate the prompt distribution
appellant does not question the ganancial nature of said house of thereof. The project of partition that the executor or administrator
the spouses Andres Reyes and Luciana Farlin but merely alleges might have presented would not be conclusive and the interested
that the above-stated deposition of Petrona Reyes, which is the only parties could oppose the approval thereof and enter their
evidence upon which the lower court bases its opinion that it is counterproject of partition which the court might accept and approve,
conjugal property, is not admissible as evidence because when she as it did in this case. In adopting the project of partition of the
was notified of the taking thereof, the only opposition in the case oppositor-appellee Juana Reyes de Ilano, said court acted within its
under consideration was that of the oppositor Juana Reyes de Ilano discretionary power and committed no error of law.
to the first rendition of accounts of said executrix, dated May 13,
In view of the foregoing considerations, and with the sole
1933, and consequently, every deposition taken not referring
modification that the estate of the deceased Andres Reyes
exclusively to said account is impertinent and irrelevant. This
reimburse the executrix-appellant in the sum of P690.57, plus the
question leads us to the discussion of the second assignment of
sum of P81.94 as commission, the resolution appealed from is
error. The record shows that the attorney for the executrix does not
affirmed in all other respects, without special pronouncement as to
deny but, on the contrary, admits as true the testimony of the
the costs. So ordered.
attorney for the oppositor during the trial of this case that three days
27
28

EN BANC their wish to abandon their security and prosecute the claim against
the estate as for a simple money debt, and that when the Barredo
G.R. No. L-17863 November 28, 1962
heirs filed their claim, no order of distribution had entered in the
MANUEL H. BARREDO, ET AL., petitioners, proceedings.
vs.
Section 2, Rule 87, of the Rules of Court reads:
THE COURT OF APPEALS, ET AL., respondents.
SEC. 2. Time within which claims shall be filed. — In the notice
Crispin D. Baizas and Associates for petitioners.
provided in section 1, the court shall state the time for the filing of
D. T. Reyes and Luison and Pangalangan and Belesario for
claims against the estate, which shall not be more than twelve nor
respondents.
less than six months after the date of the first publication of the
REYES, J.B.L., J.: notice. However, at any time before an order of distribution is
entered, on application of a creditor who has failed to file his claim
The present appeal by the heirs of the late Fausto Barredo involves
within the time previously limited, the court may, for cause shown
a tardy claim to collect the face value of a promissory note for
and on such terms as are equitable, allow such claim to be filed
P20,000.00 plus 12% interest per annum from 21 December 1949,
within a time not exceeding one month.
the date of its maturity, plus attorney's fees and costs in the sum of
P2,000.00, from the intestate estate of the late Charles A. The probate court previously fixed the period for filing claims at six
McDonough, represented herein by the administrator, W. I. Douglas. (6) months reckoned from the date of first publication, and the said
notice to creditors was first published on 23 August 1945. The
The promissory note was secured by a mortgage executed on 31
present claim was filed on 22 October 1947. There is no doubt,
December 1940 in favor of Fausto Barredo over the leasehold rights
therefore, that the claim was filed outside of the period previously
of McDonough on the greater portion of a parcel of registered land
fixed. But a tardy claim may be allowed, at the discretion of the
located at Dongalo Parañaque, Rizal, owned by Constantino Factor,
court, upon showing of cause for failure to present said claim on
and over four (4) houses which McDonough had constructed on the
time.
leased land. The lease contract between Factor and McDonough
provided for a term of 10 years from 1 September 1936; but on The respondent administrator, relying on the case of the Estate of
December 1940, the parties extended the term up to 31 August Howard J. Edmands, 87 Phil. 405, argues that the one-month period
1961. The original lease, the extension of its term, and the mortgage for filing late claims mentioned in Section 2, Rule 87, of the Rules of
were all inscribed at the back of certificate of title of the land. Court should be counted from the expiration of the regular six-month
period, but this pronouncement was but an obiter dictum that did not
Upon Fausto Barredo's death on 8 October 1942, his heirs, in a
resolve the issue involved in said case. The true ruling appears in
deed of extrajudicial partition, adjudicated unto themselves the
the case of Paulin vs. Aquino, L-11267, March 20, 1958, wherein the
secured credit of the deceased, and had the same recorded on the
controverted one month period was clarified as follows:
aforesaid certificate of title.
The one-month period specified in this section is the time granted
This annotation was, however, cancelled when one day in August
claimants, and the same is to begin from the order authorizing the
1944 Manuel H. Barredo was ordered to appeal before an officer of
filing of the claims. It does not mean that the extension of one month
the Japanese Imperial Army at the Army and Navy Club and was
starts from the expiration of the original period fixed by the court for
commanded to bring with him all the documents pertaining to the
the presentation of claims. (Emphasis supplied)
mortgage executed by the late McDonough whose private
properties, because of his enemy citizenship, were, in the words of However, the probate court's discretion in allowing a claim after the
the Court of Appeals, "appropriated by the triumphant invader". regular period for filing claims but before entry of an order of
Manuel H. Barredo was paid P20,000.00 in Japanese war notes by distribution presupposes not only claim for apparent merit but also
the occupation authorities and made to sign, as he did sign, a that cause existed to justify the tardiness in filing the claim. Here,
certification stating "that in consideration of P20,000.00 which I have petitioners alleged as excuse for their tardiness the recent recovery
received today, I am requested the Register of Deeds to cancel the of the papers of the late Fausto Barredo from the possession of his
mortgage of these properties"; and, as requested, the cancellation lawyer who is now deceased. This ground insufficient, due to the
was inscribed at the back of the title. availability, and knowledge by the petitioners, of the annotation at
the back of the certificate of title of the mortgage embodying the
Charles McDonough died on 15 March 1945; thereupon, Special
instant claim, as well as the payment of P20,000.00 made by the
Proceedings No. 70173 of the Court of First Instance of Manila,
Japanese military authorities.
captioned "In re: Intestate Estate of Charles A. McDonough", was
instituted; and pursue a court order of 17 August 1945, the The order of the trial court allowing the late claim without
administrator caused to be published in the "Philippine Progress" for justification, because under Section 2, Rule 8 of the Rules of Court,
three consecutive weeks, on 23 and 30 August 1945 and 6 said court has no authority to admit a belated claim for no cause or
September 1945, a notice to creditors requiring them to their claims for an insufficient cause.1
with the clerk of court within 6 months reckoned from the date of its
In view of the conclusions thus arrived at, it becomes unnecessary to
first publication and expiring 23 February 1946.
discuss whether the payment by the Japanese was intended as a
On 22 October 1947, the heirs of Fausto Barredo filed their belated discharge of the promissory note. Suffice it to say that there is no
claim against the estate of McDonough. This claim was opposed by other cogent explanation for the payment made to the mortgagees,
the administrator. After hearing the lower court allowed the claim, but who were not the owners of the encumbered property.
the Court of Appeals reversed the order of allowance; hence, the
FOR THE FOREGOING REASONS, the appealed decision is
Barredo heirs appealed to this Court, assigning the following alleged
affirmed, with costs against the petitioners.
errors:
1. That the Court of Appeals erred in holding that the "one month"
period referred to in Section 2 of Rule 87 of Rules of Court is to be
counted from and after the expiration of the six-month period fixed in
the published notice to claims, and in further holding that the trial
court had therefore committed a reversible error in admitting and
allowing the claim of herein petitioners; and
2. That the respondent Court of Appeals erred in holding that the
only logical conclusion is that the P20,000.00 in Japanese money
paid by the Japanese military authorities to petitioner Manuel H.
Barredo were paid for the redemption of promissory note secured by
mortgage of the four buildings.
It is pertinent to state before discussing the argumentation of
counsel that in view of the burning and destruction of the buildings
which were the subject of the mortgage, the petitioners manifested
29

EN BANC As earlier stated, this suit was instituted to recover the possession of
the house as a consequence of our decision that it had not really
G.R. No. L-18452 May 31, 1965
been sold but had merely been given as security for a loan. It was
AUGUSTO COSIO and BEATRIZ COSIO DE RAMA, petitioners, originally brought against petitioner Cosio who asked that the action
vs. be dismissed on the ground that it was barred by the judgment of the
CHERIE PALILEO, respondent. Municipal Court which dismissed the ejectment case against him.
The court denied the motion to dismiss. And so petitioner Cosio filed
Recto Law Office for petitioners.
his answer. He was later joined by petitioner Cosio de Rama who
Bengzon, Villegas, Bengzon and Zarraga for respondent.
was allowed to intervene in the action.
REGALA, J.:
Thereafter, the lower court rendered judgment finding petitioner
This is an action to recover the possession of a house. It was filed Cosio de Rama to be a possessor in good faith with a right to retain
following our decision in Palileo v. Cosio, 51 O.G. 6181, in which We possession until reimbursed for her expenses in repairing the house.
ruled that the house in question had not been sold out but had The dispositive portion of its decision reads:
merely been given as security for a debt, the pacto de retro sale
IN VIEW OF THE FOREGOING, the Court hereby renders judgment
between the parties being in reality a loan with an equitable
declaring plaintiff Palileo as the lawful owner of the house No. 25
mortgage. In a sense, therefore, this case is a sequel to Palileo v.
Antipolo Street, Pasay City and entitled to the possession thereof
Cosio. The parties are here this time to litigate on the issue of
upon her paying to intervenor defendant Beatriz Cosio de Rama the
possession and its effects.
sum of TWELVE THOUSAND (P12,000.00) PESOS with interest at
The house in this case, a two-story building, was formerly owned by the legal rate from December 22, 1946 which is the date of the filing
Felicisima Vda. de Barza. It is located at 25 (formerly 6) Antipolo of intervenor-defendant's counterclaim until paid. There is no
Street, Pasay City, on a lot belonging to the Hospicio de San Juan judgment for costs.
de Dios. On October 4, 1950, this house and the leasehold right to
Not satisfied, respondent Palileo appealed to the Court of Appeals
the lot were bought by respondent Cherie Palileo who paid part of
and succeeded in having the lower court decision modified. The
the purchase price and mortgaged the house to secure the payment
appellate court ruled that —
of the balance.
by virtue of the pacto de retro sale intervenor-appellee (Beatriz
It appears that respondent Palileo defaulted in her obligation,
Cosio de Rama) became the temporary owner of the house and as
because of which the mortgage was foreclosed and the house was
such she was entitled to the possession thereof from the date of
advertised for sale. Fortunately for her, however, respondent Palileo
such conditional sale although appellant (Cherie Palileo) was its
was able to raise money on December 18, 1951 before the house
actually occupant as intervenor appellee's tenant. ... However, when
could be sold at public auction. On this date, respondent Palileo
appellant instituted the ejectment case against appellee (Augusto
received from petitioner Beatriz Cosio de Rama the sum of P12,000
Cosio) and intervenor-appellee (Cosio de Rama) as early as
in consideration of which she signed a document entitled
December 1952, when the latter had just started to reconstruct the
"Conditional Sale of Residential Building," purporting to convey to
house, and she likewise commenced the action against intervenor-
petitioner Cosio de Rama the house in question. Under this
appellee in the same month of December, 1952, to have the deed of
document, the right to repurchase the house within one year was
pacto de retro sale declared as one of loan with equitable mortgage,
reserved to respondent Palileo. On the same day, the parties
said appellee and intervenor-appellee's title to the house suffered
entered into an agreement whereby respondent Palileo remained in
from a flaw. From that time both appellee and intervenor-appellee
possession of the house as tenant, paying petitioner Cosio de Rama
ceased to be considered possessors in good faith. (Art. 528, new
a monthly rental of P250.
Civil Code; Tacas v. Tobon 53 Phil. 356; Lopez, Inc. v. Phil. Eastern
Petitioner Cosio de Rama subsequently insured the house against Trading Co., Inc., 52 Off. Gaz. 1452) And if they chose to continue
fire with the Associated Insurance & Surety Co., Inc. On October 25, reconstructing the house even after they were appraised of a flaw on
1952, fire broke out in the house and partly destroyed the same. For their title they did so as builders in bad faith.
the loss, petitioner Cosio de Rama was paid P13,107 by the
Accordingly, it rendered judgment as follows:
insurance company.
WHEREFORE, with the modification that appellant (Cherie Palileo)
At the instance of his sister, petitioner Cosio de Rama, the other
is hereby declared the lawful owner of the house known as No. 25
petitioner Augusto Cosio entered the premises and began the repair
Antipolo Street, Pasay City, and entitled to the possession thereof,
of the house. Soon after an action was filed by respondent Palileo
without reimbursing intervenor-appellee (Beatriz Cosio de Rama) the
against Cosio de Rama for the reformation of the deed of pacto de
sum of P12,000 allegedly spent for the reconstruction of the same,
retro sale into a loan with an equitable mortgage. This case was filed
and appellee (Augusto Cosio) and intervenor-appellee (Cosio de
in the Court of First Instance of Rizal on December 4, 1952. One
Rama) are hereby ordered to pay appellant a monthly rental of P300
week after (December 11), respondent Palileo filed another action in
during the time they actually occupied the house just mentioned as
the Municipal Court of Pasay City, this time seeking the ejectment of
possessors in bad faith, the decision appealed from is hereby
petitioner Cosio who, it was alleged, had entered and occupied the
affirmed in all other respects. Without any pronouncement as to
house without the knowledge and consent of respondent Palileo.
costs.1äwphï1.ñët
Just the same, however, repair work went on and although at times
interrupted it was finally completed in 1953 at a cost of P12,000. Petitioners Cosio and Cosio de Rama have appealed to this Court
by certiorari, citing Article 526 of the Civil Code which states as
Meanwhile the ejectment suit was dismissed by the Municipal Court.
follows:
Respondent Palileo appealed to the Court of First Instance of Pasig,
but the case was again dismissed, this time for failure of respondent He is deemed a possessor in good faith who is not aware that there
Palileo to prosecute. The dismissal of the case was subsequently exists in his title or mode of acquisition any flaw which invalidates it.
made "without prejudice."
He is deemed a possessor in bad faith who possesses in any case
In the other case, respondent Palileo was successful. Both the lower contrary to the foregoing.
court and this Court declared the transaction of the parties to be a
Mistake upon a doubtful or difficult question of law may be the basis
loan with an equitable mortgage and not a conditional sale. It was
of good faith.
found that the amount of P12,000, which purported to be the price,
was in fact a loan; that the amount of P250 paid every month as rent They contend that they were not only possessors in good faith from
was in reality interest; and that the house allegedly sold was the beginning but that they continue to be such even after this
intended to be a security for the loan. Accordingly, this Court Court's declaration that their transaction was a loan with a mortgage
directed petitioner Cosio de Rama to return to respondent Palileo the and not a sale with a right of repurchase, because, as a matter of
sum of P810 which she had collected as interest in excess of that fact, this Court did not invalidate, but merely reformed, the supposed
allowed by law. This Court likewise ruled that petitioner Cosio de deed of sale. Petitioners likewise aver that neither can the ejectment
Rama could keep the proceeds of the fire insurance but that her suit be considered to be notice of any defect or flaw in their mode of
claim against respondent Palileo under the loan was to be deemed acquisition because that case after all was dismissed.
assigned to the insurance company.
30

We believe that both the petitioners and the Court of Appeals are in Apart from this consideration, we believe that this action is not
error in saying that the former had a right to the possession of the barred by the prior judgment in the ejectment case. The pertinent
house under the deed of pacto de retro sale. Petitioners did not have provisions of the Rules of Court state:
such a right at any time and they knew this.
Effect of appeals. — A perfected appeal shall operate to vacate the
In reforming instruments, courts do not make another contract for the judgment of the justice of the peace or the municipal court, and the
parties (See Civil Code, Arts. 1359-1369 and the Report of the Code action when duly docketed in the Court of First Instance, shall stand
Commission, p. 56). They merely inquire into the intention of the for trial de novo upon its merits in accordance with the regular
parties and, having found it, reform the written instrument (not the procedure in that court, as though the same had never been tried
contract) in order that it may express the real intention of the parties before and had been originally there commenced. If the appeal is
(See Id., Arts. 1365 and 1602). This is what was done in the earlier withdrawn, or dismissed for failure to prosecute, the judgment shall
case between the parties. In holding that the document entitled be deemed revived and shall forthwith be remanded to the justice of
"Conditional Sale of Residential Building" was in fact a mortgage, the peace or municipal court for execution. (Rule 40, see. 9, Rules of
this Court said: "This document did not express the true intention of Court.)
the parties which was merely to place said property (the house) as
The following comment answers squarely petitioners' arguments:
security for the payment of the loan." (Palileo v. Cosio, 51 O.G. 6181
at 6184) The case shall stand in the Court of First Instance as though the
same "had been originally there commenced." Thus, if an action is
If that was the intention of the parties (to conform to which their
filed in an inferior court, and the plaintiff fails to appear and the case
written instrument was reformed) then petitioner Cosio de Rama
is dismissed, may the plaintiff file another complaint for the same
knew from the beginning that she was not entitled to the possession
cause? The Supreme Court held that, since the appeal had the
of the house because she was a mere mortgagee. For the same
effect of vacating the judgment of the inferior court and, therefore,
reason, she could not have been mistaken as to the true nature of
the case, when dismissed, was in the Court of First Instance as if the
their agreement. Hence, in bidding her brother, petitioner Cosio, to
same "had been originally there commenced" and since dismissals,
enter the premises and make repairs and in later occupying the
on the ground aforementioned, of cases coming within the original
house herself, petitioner Cosio de Rama did so with this knowledge.
jurisdiction of the Court of First Instance, are without prejudice, the
As possessors in bad faith, petitioners are jointly liable for the conclusion is that plaintiff may file a new complaint for the same
payment of rental, the reasonable value of which, as found by the cause. (Marco v. Hashim 40 Phil. 592) This ruling, however, is
appellate court is P300 a month. (Art. 549. See Lerma v. De la Cruz, affected to a certain extent by Rule 17, section 3, which provides
7 Phil. 581) This finding is supported by the evidence and we find no that the dismissal of a case on the ground of plaintiff's failure to
reason to disturb it. appear at the trial, is a final adjudication upon the merits unless the
court otherwise provides." (2 Moran, Comments on the Rules of
But even as we hold petitioner Cosio de Rama to be a possessor in
Court, 344-345 [1963 ed.])
bad faith we nevertheless believe that she is entitled to be
reimbursed for her expenses in restoring the house to its original Here the dismissal of the ejectment case for failure of respondent
condition after it had been partly damaged by fire, because such Palileo to prosecute was expressly made to be without prejudice.
expenses are necessary (Angeles v. Lozada, 54 Phil. 184) and, That judgment, therefore, cannot be a bar to the filing of another
under Article 546, are to be refunded even to possessors in bad action like the present.
faith. As already stated, petitioner Cosio de Rama spent P12,000 for
WHEREFORE, with the modification that petitioner Cosio de Rama
the repair work.
should be reimbursed her necessary expenses in the amount of
The error of the appellate court lies in its failure to appreciate the P12,000 by respondent Palileo, the judgment of the Court of Appeals
distinction that while petitioner Cosio de Rama is a possessor in bad is affirmed in all other respects, without pronouncements as to, cost.
faith, she is not a builder in bad faith. Thus in describing petitioners
as "builders in bad faith" and, consequently, in holding that they
have no right to be reimbursed, the court obviously applied Article
449 which states that "he who builds, plants or sows in bad faith on
the land of another loses what is built, planted or sown without right
to indemnity." But article 449 is a rule of accession and we are not
here concerned with accession. There is here no reason for the
application of the principle accesio cedit principali, such as is
contemplated in cases of accession continua of which article 449 is
a rule. For what petitioners did in this case was not to build a new
house on the land of another. Rather, what they did was merely to
make repairs on a house that had been partly destroyed by fire and
we are asked whether they have a right to be refunded for what they
spent in repairs. The land on which the house is built is not even
owned by respondent Palileo, that land being the property of the
Hospicio de San Juan de Dios. This case comes under article 546
which, as we have already indicated, provides for the refund of
necessary expenses "to every possessor."
And now we come to the last point in petitioners' assignment of
errors. It is contended that the present action is barred by the
judgment of the Municipal Court which dismissed the ejectment case
filed by respondent Palileo against petitioner Cosio. It is said that
although that ejectment was vacated when it was appealed to the
Court of First Instance, the subsequent dismissal of the case was
equivalent to the withdrawal of the appeal and therefore to a revival
of the judgment of the Municipal Court. That judgment, to repeat,
dismissed the ejectment case against petitioner Cosio.
We note that this point, though raised in the Court of First Instance,
was not properly assigned as error in the Court of Appeals. It was
there taken up only in the "preliminary remarks" in the brief. Although
petitioners were appellees in the Court of Appeals, they should have
assigned this alleged error if only to maintain the decision of the
lower court.
31

EN BANC The administratrices opposed. Ground: Pambusco's claim is time-


barred.
G.R. No. L-18936 May 23, 1967
March 13, 1961. Resolving Pambusco's motion, the probate court (in
INTESTATE ESTATE OF ENCARNACION ELCHICO Vda. de
Sp. Proc. 25256) issued an order, the dispositive part of which is as
FERNANDO, deceased.
follows:
NATIVIDAD E. IGNACIO and LEONOR E. ALMAZAN,
administratrices-appellants, Wherefore, the Court hereby allows said amount of P46,500.00 to be
vs. paid by the heirs and/or the joint administratrices; but no payment
PAMPANGA BUS COMPANY, INC., claimant appellee. thereof shall be made until after the administratrices shall have
informed the Court in writing as to the existence of other unsettled
Paterno R Canlas for administratrices-appellants.
money claims against the estate and of the sufficiency of the assets
Manuel O. Chan and A G. Martinez for claimant-appellee.
available for payment of all the debts.
SANCHEZ, J.:
In harmony with the foregoing, the Court hereby orders said
The present case has its roots in the proceedings hereinafter to be administratrices to inform the Court, within ten (10) days from the
recited: notice of this order, of the other unsettled money together with the
amount of each, and of the sufficiency or insufficiency of the assets
August 29, 1951. Pampanga Bus Company, Inc. (referred to herein
available for payment of all the debts.
as Pambusco) lodged its complaint in the Court of First Instance of
Manila against two (2) defendants Valentin Fernando and By order of May 24, 1961, the probate court denied the motion to
Encarnacion Elchico Vda. de Fernando. The suit was to collect reconsider the foregoing order.
P105,000.00 upon a contractual obligation.1
The administratrices came to this Court on appeal.
January 23, 1955. Encarnacion Elchico Vda. de Fernando died. By
Given the facts just recited, was Pambusco's claim properly admitted
this time, Pambusco in the foregoing civil case had already
by the probate court?
presented its evidence and submitted its case.
It will be remembered that at the time Encarnacion Elchico Vda. de
March 23, 1955. Intestate proceedings were filed.2 Notice to the
Fernando died, the civil case against her and the other defendant
estate's creditors was given for them to file their claims within six (6)
Valentin Fernando had not yet been decided by the Court of First
months from this date, the first publication of the notice.
Instance of Manila. That case, however, was prosecuted — with the
April 16, 1955. On Pambusco's motion, the court in the civil case assent of the administrator of her estate — to final conclusion.
ordered Jose Nicolas, then administrator, to substitute for the
1. This situation brings to the fore a consideration of Section 21,
deceased Encarnacion Elchico Vda. de Fernando as one of the
Rule 3 of the Rules of Court,6 which reads:
defendants. No objection to this order was registered.
SEC. 21. Where claim does not survive. — When the action is for
July 15, 1955. Pambusco amended its complaint in the civil case
recovery of money, debt or interest thereon, and the defendant dies
naming therein administrator Jose Nicolas and original defendant
before final judgment in the Court of First Instance, it shall be
Valentin Fernando, as defendants. The court, without objection,
dismissed to be prosecuted in the manner especially provided in
admitted this amended complaint on August 27, 1955.
these rules.
Jose Nicolas, as such administrator, filed an amended answer with
The Philosophy behind the rule which provides for the dismissal of
counterclaim against Pambusco. The date of filing said answer is not
the civil case is that, upon the death of defendant, all money claims
of record. In due course, Nicolas presented his evidence.
should be filed in the testate or interstate proceedings "to avoid
December 11, 1958. After trial on the merits, the Court of First useless duplicity of procedure."7 Obviously, the legal precept just
Instance of Manila rendered judgment in the civil case (Civil Case quoted is procedural in nature. It outlines the method by which an
14578), as follows: action for recovery of money, debt or interest may continue, upon
the terms therein prescribed. Whether the original suit for the
Wherefore, judgment is hereby rendered in favor of the plaintiff and
recovery of money — as here — proceeds to its conclusion, or is
against the defendants, ordering the latter to pay the former the sum
dismissed and the claim covered thereby filed with the probate court,
of NINETY-THREE THOUSAND PESOS (P93,000.00) together with
one thing is certain: no substantial rights of the parties are
the costs of these proceedings. Defendants' counterclaim is hereby
prejudiced.
dismissed.
But is there justification for the civil case to go on in spite of the
The two defendants appealed.
death of Encarnacion Elchico Vda. de Fernando "before final
May 28, 1960. The Court of Appeals affirmed the judgment, thus — judgment in the Court of First Instance?"
As plaintiff's complaint is well founded and meritorious and the 2. At the time of the death of defendant Encarnacion Elchico Vda. de
evidence of record justify the award of P93,000.00 in its favor, it Fernando, plaintiff Pambusco had already closed its evidence and
stands to reason that defendants' counterclaims were correctly submitted its case. Her administrator substituted. By this
dismissed. substitution, the estate had notice of the claim. The estate was thus
represented. The administrator did not complain of the substitution.
Wherefore, the judgment appealed from is hereby affirmed without
At no time did the estate of the deceased impugn the authority of the
pronouncement as to costs.3
regular courts to determine the civil case. Much less did it seek
Both defendants appealed by certiorari to this Court. Valentin abatement of the civil suit. On the contrary, its administrator took
Fernando's appeal4 was dismissed for having been filed out of time. active steps to protect the interests of the estate. He joined issue
The appeal of the estate of Encarnacion Elchico Vda. de Fernando, 5 with plaintiff. He filed an amended answer. He counterclaimed. He
raising issues of fact, likewise dismissed. went to trial. Defeated in the Court of First Instance, he appealed to
the Court of Appeals. He even elevated that civil case to this Court.
February 25, 1959. We go back to Special Proceeding 25256,
Now that the judgment has become final, the estate cannot be heard
Intestate Estate of Encarnacion Elchico Vda. Fernando. On this day,
to say that said judgment — reached after a full dress trial on the
while defendants in Civil Case 14576 were perfecting their appeal
merits — will now go for naught. The estate has thus waived its right
from the judgment the Court of First Instance, Pambusco registered
to have Pambusco's claim re-litigated in the estate proceedings. For,
its contingent claim in these special proceedings — for whatever
though presentment of probate claims is imperative, it is generally
money judgment may be rendered in his favor in the civil suit.
understood that it may be waived by the estate's representative.8
January 25, 1961. The judgment in the civil case having reached And, waiver is to be determined from the administrator's "acts and
finality, Pambusco moved in the intestate proceedings that the heirs conduct."9 Certainly, the administrator's failure to plead the statute of
and/or the present joint administratrices, Natividad E. Ignacio and nonclaims, his active participation, and resistance to plaintiff's claim,
Leonor E. Almazan, be ordered to pay P46,500.00, the share of the in the civil suit, amount to such waiver. 10
deceased in the judgment debt.
3. Courts are loathe to overturn a final judgment. Judicial
proceedings are entitled to respect. Non quieta movere. 11 Plaintiff's
32

claim has passed the test in three courts of justice: the Court of First for tardiness in the filing of the claim. 19 And, the order of final
Instance, the Court of Appeals and this Court. The judgment in distribution is still to be given.
plaintiff's favor should be enforced. Appellants' technical objection —
Besides, the order of the lower court of March 18, 1961 allowing
after judgment had become final in the civil case — that plaintiff's
payment of appellee's claim "impliedly granted said appellee an
claim should have been litigated in the probate court does not impair
extension of time within which to file said claim." 20 The probate
the validity of said judgment. For, such objection does not go into the 21
court's discretion has not been abused. It should not be disturbed.
court's jurisdiction over the subject matter.
For the reasons given, we vote to affirm the order of the lower court
In Laserna vs. Altavas, 68 Phil. 703, suit was started by Jose Altavas
of March 13, 1961 and May 24, 1961, under review. Costs against
against Jose Laserna Paro to recover P4,500.00 as attorney's fees.
appellants. So ordered.
The Court of First Instance decided in plaintiff's favor. During the
pendency of Laserna's appeal in this Court, he died. Aristona
Laserna, the administratrix of Laserna's estate, substituted. This
Court affirmed the judgment. Altavas subsequently filed in the estate
proceedings a motion to direct the administratrix to pay the judgment
for P4,500.00 in his favor. The court granted this motion. On appeal,
the administratrix urged that Altavas' claim "was definitely barred by
the statute of nonclaim," because of his failure "to present it before
the committee on claims and appraisal."12 This Court there stated.13

x x x we are of the opinion and so hold that, upon the facts and
circumstances of the present case, the claim of Jose Altavas,
although it did not survive the deceased, need not have to be
presented before the committee on claims and appraisal principally
because that claim is already an adjudicated claim by final
pronouncement by this Court in G.R. No. 40038. To countenance
appellant's theory would be to convert a claim duly passed upon,
and determined not only by the Court of First Instance but by this
Court into a contested claim, once again, . . . and "obliging a creditor
whose claim had already been passed upon by the Court to submit
himself to the committee on claims and to pass over again through
the endless process of presenting his evidence which he had
already done." ... It also appears that the substitution of the
defendant in civil case No. 2961, for the recovery of attorney's fees,
was effected at the instance of the defendant and appellant therein,
Aristona Laserna. She had an opportunity to contest that claim, and
when her contention was overruled she did not impugn the
jurisdiction of the Supreme Court. Neither does it appear that during
the pendency of the appeal in the Supreme Court she moved for the
abatement or suspension of the proceedings because of the
provisions of sections 119, 700 and 703 of the Code of Civil
Procedure. Under the circumstances it is unjust to defeat the claim
of the appellee and to hold that it had been barred by the statute of
nonclaim.14
4. Of course, it is correct to say that upon the demise a defendant in
a civil action planted on a claim which does not survive, such claim
should be presented to the probate court for allowance, if death
occurs before final judgment in the Court of First Instance. But,
procedural niceties aside, the revival of the civil action against the
administrator, the decedent's representative, "is generally
considered equivalent to presentation" of such claim in probate
court, 15 "dispenses with the actual presentation of the claim." 16 The
soundness of this proposition commands assent. Because, the
administrator represent the deceased's estate itself, is an alter ego
of the heirs. More than this, he is an officer of the probate court. 17 In
the circumstances, presentment of Pambusco's 1950 claim ad
abundantiorem cautelam was at best reduced to a mere formality.
5. It matters not that Pambusco's said claim was filed with the
probate court without the six-month period from March 25, 1955, set
forth in the notice to creditors. For, Section 2, Rule 86, permits
acceptance of such belated claims. Says Section 2: 18
SEC. 2. Time within which claims shall be filed. — In the notice
provided in the preceding section, the court shall state the time for
the filing of claims against the estate, which shall not be more than
twelve (12) nor less than six (6) months after the date of the first
publication of the notice. However, at any time before an order of
distribution is entered, on application of a creditor who has failed to
file his claim within the time previously limited, the court may, for
cause shown and on such terms as are equitable, allow such claim
to be filed within a tune not exceeding one (1) month.
Here, the claim was filed in the probate court on February 25, 1959,
while the defendants in the civil case were still perfecting their
appeal therein. The record does not show that the administrator
objected thereto upon the ground that it was filed out of time. The
pendency of that case, we are persuaded to say, is a good excuse

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