RULE 88

Payment of Debts of the Estate

GAVINO ALDAMIZ, as administrator of the estate of the deceased Santiago Rementeria y

Aldamizcogeascoa, petitioner,
vs.
THE JUDGE OF THE COURT OF FIRST INSTANCE OF MINDORO, THE PROVINCIAL SHERIFF OF MINDORO
and JUAN L. LUNA, respondents. (December 29, 1949)

FACTS: Santiago Rementeria, a Spaniard, was a member of a commercial partnership. The other
members were the brothers, Gavino and Jose Aldamiz. Santiago died, and in the probate proceeding
instituted, Gavino was appointed as administrator, and he was represented by Atty. Juan Luna.

The lower court refused to approve the project of partition submitted by Gavino, unless all debts
including attorney's fees be first paid. In the project of partition, it was expressly stated that attorney's
fees, debts and incidental expenses would be proportionately paid by the beneficiaries after the closure
of the testate proceedings, but the court refused to sanction this clause. Hence, Attorney Luna, in good
faith, without previously filing a written petition to have his professional fees fixed, and without
previous notice to all interested parties, submitted evidence of his services and professional standing so
that the court might fix the amount of his compensation and the administrator may make payment
thereof. The lower court issued an order awarding him of his professional services. Gavino failed to pay
the whole amount despite several demands. Thus, an ex-parte motion for execution was filed by Atty.
Luna and the court granted the same. Two parcels of land owned by the partnership (not the estate)
was sold at a public auction, assessed at P182,360, in favor of Luna for only P20,000.

ISSUE: WON a writ of execution is not the proper procedure allowed by the Rules of the Court for the
payment of debts and expenses of administration?

HELD: NO. The correct procedure for the collection of attorney's fees, is for the counsel to request the
administrator to make payment and file an action against him in his personal capacity and not as an
administrator should he fail to pay. If the judgment is rendered against the administrator and he pays,
he may include the fees so paid in his account to the court. The attorney also may, instead of bringing
such an action, file a petition in the testate or intestate proceeding "asking that the court, after notice to
all persons interested, allow his claim and direct the administrator to pay it as an expense of
administration." In the instance case, as above stated, no written petition for the payment of attorney's
fees has ever been filed by the respondent attorney and the interested parties had not been previously
notified thereof nor of the hearing held by the court.

A writ of execution is not the proper procedure allowed by the Rules of the Court for the payment of
debts and expenses of administration. The proper procedure is for the court to order the sale of
personal estate or the sale of mortgaged of real property of the deceased and all debts or expenses of
administration should be paid out of the proceeds of the sale or mortgage. The order for the sale or
mortgage should be issued upon motion of the administrator and with the written notice to all the heirs,
legatees and devisees residing in the Philippines, according to Rule 89, section 3, and Rule 90, section 2.
And when sale or mortgage of real estate is to be made, the regulations contained in Rule 90, section 7,
should be complied with.
Execution may issue only where the devisees, legatees or heirs have entered into possession of their
respective portions in the estate prior to settlement and payment of the debts and expenses of
administration and it is later ascertained that there are such debts and expenses to be paid, in which
case "the court having jurisdiction of the estate may, by order for that purpose, after hearing, settle the
amount of their several liabilities, and order how much and in what manner each person shall
contribute, and may issue execution if circumstances require" (Rule 89, section 6;Rule 74). And this is not
the instant case.

Intestate Estate of the late Florencio P. Buan and Rizalina Paras Buan, deceased. BIENVENIDO P. BUAN
and A. NATIVIDAD PARAS, Co-Administrators-appellees,
vs.
SYLVINA C. LAYA, ET AL., petitioners-appellants. (December 24, 1957)

FACTS: A bus owned by the deceased spouses Buan, driven by their employee Triguero, collided with a
car resulting to the death of Juan Laya and to physical injuries to the other passengers. The driver of the
bus was convicted of the crime of homicide and serious physical injuries through reckless imprudence.
The heirs of Juan Laya reserved the civil action for damages, and they subsequently filed an independent
civil action in CFI Manila against the administrator of the deceased spouses.

Petitioners (Heirs of Juan Laya) then filed in CFI Tarlac a contingent claim for more than P500,000 against
the intestate estate of the deceased spouses Buan. The CFI Tarlac admitted the claim but denied the
prayer that a portion of the estate be set aside to respond for the amount of the contingent claim.

In the civil action in CFI Manila, the judge held that the said civil action by the heirs of Laya was
premature because the sentence of conviction of the driver of the bus had not become final.

In the meantime the CFI Tarlac, set aside its previous order on admitting the contingent claim of
petitioners. The reason for the admission of the claim, according to the court, had ceased to exist and
even the plaintiffs had filed the amended complaint in the CFI Manila, the same has not yet been acted
upon by the said court.

ISSUE: WON the contingent claim may be admitted?

HELD: YES. A 'contingent claim' against an estate within the statute providing for the settlement hereof,
as one where the absolute liability depends on some future event which may never happen, and which
therefore renders such liability uncertain and indeterminable.

Whether or not the heirs of the deceased, Juan C. Laya, would succeed in the action brought in Manila
against the administrators of the estate of the deceased spouses, is the uncertain event or contingency
upon which the validity of the claim presented in the administration proceedings depends. While the
said action has not yet been finally decided or determined to the effect that the petitioners herein, heirs
of Laya, have no right of action against the estate of the deceased spouses Buan, the contingent claim
that petitioners have filed in CFI Tarlac in the proceedings for the administration of the deceased
spouses, may not be dismissed. The order of the court dismissing the claim and declaring that the same
may again be entertained if another valid complaint by the petitioners herein is filed in the CFI Manila, is
inconsistent with the nature and character of a contingent claim. A contingent claim does not follow the
temporary orders of dismissal of an action upon which it is based; it awaits the final outcome thereof
and only said final result can cause its termination. The rules provide that a contingent claim is to be
presented in the administration proceedings in the same manner as any ordinary claim, and that when
the contingency arises which converts the contingent claim into a valid claim, the court should then be
informed that the claim had already matured.

The validity of the contingent claim is apparent; as the driver of the bus belonging to the deceased
spouses, was found guilty of negligence, as a result of which Laya died, the said deceased spouses—the
employers of the driver—can be made responsible, as masters of a servant, for damages for the death
of the petitioner's father. A portion of the estate should therefore, be set aside to respond for such
damages as petitioners herein may subsequently recover in the action they have brought in CFI Manila.
This amount should be fixed in the said court.

RAFAEL A. DINGLASAN, ET ALS.,

vs.
ANG CHIA, as Administratrix of the above intestate, LEE BING HOO alias CLARO LEE, and LEE BUN TING
(April 18, 1951)

FACTS: A case was filed by the plaintiffs Dinglasan et al for recovery of ownership and possession of a
parcel of land against Ang Chia, her son Claro Lee and one Lee Bun Ting. It was filed without knowledge
of a pending case concerning the partition of the intestate estate of Lee Liong.

Upon such discovery of a pending case, plaintiffs filed an amended complaint seeking inclusion as party-
defendant the administratrix of the estate. The Administratrix was Ang Chia, widow of the deceased,
and was already a party-defendant in her personal capacity.

By their claim in intervention, the plaintiffs made of record the pendency of the aforesaid civil case and
prayed that the intestate proceedings be not closed until said civil case shall have been terminated. The
lower court took cognizance of the pendency of said civil case filed by Dinglasan against Ang Chia and
heirs.It thereafter issued an order holding in abeyance the approval of the partition and the closing of
the proceedings until after the decision in said civil case has been rendered. Appellants now claim that
there is no rule or authority justifying the extension of administration proceedings until after the
separate action pertaining to its general jurisdiction has been terminated.

ISSUES:
1. WON the lower court erred in holding in abeyance the closing of the intestate proceedings pending
the termination of the separate civil action filed by the petitioners-appellees

2. WON the lower court erred in taking cognizance of the civil case?

RULINGS:

1. NO. Section 1, Rule 88, of the Rules of Court, expressly provides that "action to recover real or
personal property from the estate or to enforce a lien thereon, and actions to recover damages for an
injury to person or property, real or personal, may be commenced against the executor or
administrator". What practical value would this provision have if the action against the administrator
cannot be prosecuted to its termination simply because the heirs desire to close the intestate
proceedings without first taking any step to settle the ordinary civil case? This rule is but a corollary to
the ruling which declares that questions concerning ownership of property alleged to be part of the
estate but claimed by another person should be determined in a separate action and should be
submitted to the court in the exercise of its general jurisdiction. These rules would be rendered nugatory
if we are to hold that an intestate proceedings can be closed by any time at the whim and caprice of the
heirs.

Another rule of court provides that "after a party dies and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal representative of the deceased to appear and to be
substituted for the deceased, within a period of 30 days, or within such time as may be granted. If the
legal representative fails to appear within said time, the court may order the opposing party to procure
the appointment of a legal representative of the deceased within a time to be specified by the court,
and the representative shall immediately appear for and on behalf of the interest of the deceased."
(Section 17, Rule 3.) This rule also implies that a probate case may be held in abeyance pending
determination of an ordinary case wherein an administrator is made a party. To hold otherwise would
be also to render said rule nugatory.

2. No. If the appellants filed a claim in intervention in the intestate proceedings it was only pursuant to
their desire to protect their interests it appearing that the property in litigation is involved in said
proceedings and in fact is the only property of the estate left subject of administration and distribution;
and the court is justified in taking cognizance of said civil case because of the unavoidable fact that
whatever is determined in said civil case will necessarily reflect and have a far reaching consequence in
the determination and distribution of the estate. In so taking cognizance of civil case the court does not
assume general jurisdiction over the case but merely makes of record its existence because of the close
interrelation of the two cases and cannot therefore be branded as having acted in excess of its
jurisdiction.