THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner, vs.

THE COURT OF APPEALS (Former Special Sixth Division), MARIA PILAR RUIZ-MONTES, MARIA CATHRYN RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASIG, respondents. [G.R. No. 118671, January 29, 1996, PUNO, J.:] FACTS: 1. Hilario Ruiz executed a holographic will where he named the following as his heirs a. Edmond Ruiz only son b. Maria Pilar Ruiz adopted daughter c. Maria Cathryn, Candice Albertine and Maria Angeline - 3 granddaughters, all daughters of Ruiz 2. Testator bequeathed to his heirs substantial cash, personal and real properties and named Edmond Ruiz executor of his estate. 3. Hilario Ruiz died and the cash component of his estate was immediately distributed among Ruiz and respondents. 4. Edmond, the named executor, did not take any action for the probate of his father's holographic will. 5. 4 years after Pilar filed before the RTC a petition for the probate and approval of the deceaseds will and for the issuance of letters testamentary to Edmond Ruiz a. Edmond opposed the petition on the ground that the will was executed under undue influence. 6. The house and lot in Valle Verde, Pasig which the testator bequeathed to the 3 granddaughters was leased out by Edmond to third persons. 7. Probate court ordered Edmond to deposit with the Branch Clerk of Court the rental deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde property. 8. Edmond moved for the release of P50,000.00 to pay the real estate taxes on the real properties of the estate. a. The probate court approved the release of P7,722.00 9. Edmond withdrew his opposition to the probate of the will a. Probate court admitted the will to probate and ordered the issuance of letters testamentary to Edmond conditioned upon the filing of a bond in the amount of P50,000.00 10. Testate Estate of Hilario Ruiz, with Edmond Ruiz as executor, filed an "Ex-Parte Motion for Release of Funds a. Prayed for release of the rent payments deposited with the Branch Clerk of Court b. Montes opposed and praying that the release of rent payments be given to the 3 granddaughters c. Probate court denied the release of funds and granted the motion of Montes due to Edmonds lack of opposition d. Probate Court ordered the release of the funds to Edmond but only "such amount as may be necessary to cover the expenses of administration and allowances for support" of the testator's three granddaughters subject to collation and deductible from their share in the inheritance 11. CA sustained probate courts order. ISSUE: W/N the probate court, after admitting the will to probate but before payment of the estate's debts and obligations, has the authority: 1. to grant an allowance from the funds of the estate for the support of the testator's grandchildren - NO 2. to order the release of the titles to certain heirs 3. to grant possession of all properties of the estate to the executor of the will. HELD: 1. grandchildren are not entitled to provisional support from the funds of the decedent's estate. a. The law clearly limits the allowance to "widow and children" and does not extend it to the deceased's grandchildren, regardless of their minority or incapacity b. Section 3 of Rule 83 of the Revised Rules of Court provides: Sec. 3. Allowance to widow and family. The widow and minor or incapacitated children of a deceased person, during the settlement of the estate, shall receive therefrom under the direction of the court, such allowance as are provided by law. 2. In settlement of estate proceedings, the distribution of the estate properties can only be made: a. after all the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid; or

b. before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by the court conditioned upon the payment of said obligations within such time as the court directs, or when provision is made to meet those obligations 3. In the case at bar, the probate court ordered the release of the titles to the Valle Verde property and the Blue Ridge apartments to the private respondents after the lapse of six months from the date of first publication of the notice to creditors a. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had not hitherto been paid, much less ascertained. b. The estate tax is one of those obligations that must be paid before distribution of the estate. i. If not yet paid, the rule requires that the distributees post a bond or make such provisions as to meet the said tax obligation in proportion to their respective shares in the inheritance. ii. at the time the order was issued the properties of the estate had not yet been inventoried and appraised. 4. The probate of a will is conclusive as to its due execution and extrinsic validity and settles only the question of whether the testator, being of sound mind, freely executed it in accordance with the formalities prescribed by law a. Questions as to the intrinsic validity and efficacy of the provisions of the will, the legality of any devise or legacy may be raised even after the will has been authenticated i. The intrinsic validity of Hilario's holographic will was controverted by petitioner before the probate court in his Reply to Montes' Opposition to his motion for release of funds and his motion for reconsideration of the August 26, 1993 order of the said court. ii. Therein, petitioner assailed the distributive shares of the devisees and legatees inasmuch as his father's will included the estate of his mother and allegedly impaired his legitime as an intestate heir of his mother. iii. The Rules provide that if there is a controversy as to who are the lawful heirs of the decedent and their distributive shares in his estate, the probate court shall proceed to hear and decide the same as in ordinary cases. 5. The right of an executor or administrator to the possession and management of the real and personal properties of the deceased is not absolute and can only be exercised "so long as it is necessary for the payment of the debts and expenses of administration Sec. 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed . An executor or administrator shall have the right to the possession and management of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and expenses for administration. a. When petitioner moved for further release of the funds deposited with the clerk of court, he had been previously granted by the probate court certain amounts for repair and maintenance expenses on the properties of the estate, and payment of the real estate taxes thereon, but he moved again for the release of additional funds for the same reasons he previously cited i. It was correct for the probate court to require him to submit an accounting of the necessary expenses for administration before releasing any further money in his favour ii. petitioner had deposited with it only a portion of the one-year rental income from the Valle Verde property. iii. As executor, he is a mere trustee of his father's estate. The funds of the estate in his hands are trust funds and he is held to the duties and responsibilities of a trustee of the highest order. PAHAMOTANG VS. PNB Case Digest PAHAMOTANG VS. PNB G.R. No. 156403, March 21, 2005 FACTS: On July 1, 1972, Melitona Pahamotang died. She was survived by her husband Agustin Pahamotang, and their eight (8) children, namely: Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and Eleonor, all surnamed Pahamotang. On September 15, 1972, Agustin filed with the then Court of First Instance of Davao City a petition for issuance of letters administration over the estate of his deceased wife. The petition, docketed as Special Case No. 1792, was raffled to Branch VI of said court, hereinafter referred to as the intestate court. In his petition, Agustin identified petitioners Josephine and Eleonor as among the heirs of his deceased spouse. It appears that Agustin was appointed petitioners' judicial guardian

in an earlier case - Special Civil Case No. 1785 also of the CFI of Davao City, Branch VI. On December 7, 1972, the intestate court issued an order granting Agustins petition. The late Agustin then executed several mortgages and later sale of the properties with the PNB and Arguna respectively. The heirs later questioned the validity of the transactions prejudicial to them. The trial court declared the real estate mortgage and the sale void but both were valid with respect to the other parties. The decision was reversed by the Court of Appeals; to the appellate court, petitioners committed a fatal error of mounting a collateral attack on the foregoing orders instead of initiating a direct action to annul them. ISSUE: Whether the Court of Appeals erred in reversing the decision of the trial court RULING: In the present case, the appellate court erred in appreciating laches against petitioners. The element of delay in questioning the subject orders of the intestate court is sorely lacking. Petitioners were totally unaware of the plan of Agustin to mortgage and sell the estate properties. There is no indication that mortgagor PNB and vendee Arguna had notified petitioners of the contracts they had executed with Agustin. Although petitioners finally obtained knowledge of the subject petitions filed by their father, and eventually challenged the July 18, 1973, October 19, 1974, February 25, 1980 and January 7, 1981 orders of the intestate court, it is not clear from the challenged decision of the appellate court when they (petitioners) actually learned of the existence of said orders of the intestate court. Absent any indication of the point in time when petitioners acquired knowledge of those orders, their alleged delay in impugning the validity thereof certainly cannot be established. And the Court of Appeals cannot simply impute laches against them.

PNB V CA G.R. No. 121597 June 29, 2001 FACTS: The spouses Chua were the owners of a parcel of land covered by a TCT and registered in their names. Upon the husbands death, the probate court appointed his son, private respondent Allan as special administrator of the deceaseds intestate estate. The court also authorized Allan to obtain a loan accommodation from PNB to be secured by a real estate mortgage over the above-mentioned parcel of land, which Allan did for P450,000.00 with interest. For failure to pay the loan in full, the bank extrajudicially foreclosed the real estate mortgage. During the auction, PNB was the highest bidder. However, the loan having a payable balance, to claim this deficiency, PNB instituted an action with the RTC, Balayan, Batangas, against both Mrs. Chua and Allan. The RTC rendered its decision, ordering the dismissal of PNBs complaint. On appeal, the CA affirmed the RTC decision by dismissing PNBs appeal for lack of merit. Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court. ISSUE: The WON it was error for the CA to rule that petitioner may no longer pursue by civil action the recovery of the balance of indebtedness after having foreclosed the property securing the same. HELD: petition is DENIED. The assailed decision of the CA is AFFIRMED. No Petitioner relies on Prudential Bank v. Martinez, 189 SCRA 612, 615 (1990) , holding that in extrajudicial foreclosure of mortgage, when the proceeds of the sale are insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the mortgagor. However, it must be pointed out that petitioners cited cases involve ordinary debts secured by a mortgage. The case at bar, we must stress, involves a foreclosure of mortgage arising out of a settlement of estate, wherein the administrator mortgaged a property belonging to the estate of the decedent, pursuant to an authority given by the probate court. As the CA correctly stated, the Rules of Court on Special Proceedings comes into play decisively. The applicable rule is Section 7 of Rule 86 of the Revised Rules of Court ( which PNB contends is not.) In the present case it is undisputed that the conditions under the aforecited rule have been complied with [see notes]. It follows that we must consider Sec. 7 of Rule 86, appropriately applicable to the controversy at hand, which in summary [and case law as well] grants to the mortgagee three distinct, independent and mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the mortgagor dies, among them: (1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim; (2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and

(3) to rely on the mortgage exclusively, foreclosing the same at any time before it is barred by prescription without right to file a claim for any deficiency. Clearly petitioner herein has chosen the mortgage-creditors option of extrajudicially foreclosing the mortgaged property of the Chuas. This choice now bars any subsequent deficiency claim against the estate of the deceased. Petitioner may no longer avail of the complaint for the recovery of the balance of indebtedness against said estate, after petitioner foreclosed the property securing the mortgage in its favor. It follows that in this case no further liability remains on the part of respondents and the deceaseds estate. NOTES: Section 7, Rule 86 of the Rules of Court, which states that: Sec. 7. Rule 86. Mortgage debt due from estate. A creditor holding a claim against the deceased secured by mortgage or other collateral security, may abandon the security and prosecute his claim in the manner provided in this rule, and share in the general distribution of the assets of the estate; or he may foreclose his mortgage or realize upon his security, by action in court, making the executor or administrator a party defendant, and if there is a judgment for a deficiency, after the sale of the mortgaged premises, or the property pledged, in the foreclosure or other proceeding to realize upon the security, he may claim his deficiency judgment in the manner provided in the preceding section; or he may rely upon his mortgage or other security alone and foreclose the same at any time within the period of the statute of limitations, and in that event he shall not be admitted as a creditor, and shall receive no share in the distribution of the other assets of the estate ; but nothing herein contained shall prohibit the executor or administrator from redeeming the property mortgaged or pledged by paying the debt for which it is hold as security, under the direction of the court if the court shall adjudge it to be for the interest of the estate that such redemption shall be made. To begin with, it is clear from the text of Section 7, Rule 89, that once the deed of real estate mortgage is recorded in the proper Registry of Deeds, together with the corresponding court order authorizing the administrator to mortgage the property, said deed shall be valid as if it has been executed by the deceased himself. Section 7 provides in part: Sec. 7. Rule 89. Regulations for granting authority to sell, mortgage, or otherwise encumber estate The court having jurisdiction of the estate of the deceased may authorize the executor or administrator to sell personal estate, or to sell, mortgage, or otherwise encumber real estate, in cases provided by these rules when it appears necessary or beneficial under the following regulations: xxx (f) There shall be recorded in the registry of deeds of the province in which the real estate thus sold, mortgaged, or otherwise encumbered is situated, a certified copy of the order of the court, together with the deed of the executor or administrator for such real estate, which shall be valid as if the deed had been executed by the deceased in his lifetime

CASE DIGEST Aldamiz v. Judge of CFI Mindoro December 29, 1949 Moran, C.J. FACTS: Santiago Rementeria y Aldamizcogeascoa, the decedent was a Spaniard and member of the commercial partnership "Aldamiz y Rementeria." The other members were his brothers. Santiago Rementeria died in Spain in 1937, and probate proceedings were instituted in the same year in the CFI of Mindoro by Gavino Aldamiz represented by Atty. Juan L. Luna. Gavino Aldamiz was appointed administrator and was again represented by respondent Atty. Juan Luna. After ten years from the date of his appointment, Gavino Aldamiz, as administrator, through his attorney, Juan L. Luna, submitted his accounts for the years 1944, 1945 and 1946 and also a project of partition with a view to closing the proceedings. The court approved the accounts but refused to approve the project of partition 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 of the project. Attorney Luna, to comply with the wishes of the court, without filing a written petition to have his professional fees fixed, and without previous notice to all the interested parties, submitted evidence of his services and professional standing so that the court may fix his compensation and the administrator may make payment thereof.

It is to be noted that Attorney Luna served as attorney for the administrator as legal consultants to Santiago and his brothers and to the "Aldamiz y Rementeria,". He did not charge them professional services, thus showing disinterested and extreme liberality due to friendship and other personal considerations toward his clients. When he wanted to close accounts of the estate, he showed no interest in demanding for payment by preferring to leave the matter to the future negotiation or understanding with the interested parties. When the amount of his fees was fixed by the court and Gavino Aldamiz asked him for a substantial reduction, he answered that it was not he who had fixed the amount but the court, and advised his client to file a motion for reconsideration, with the assurance that he would offer no objection to any reduction in amount and to any extension of the time for paying what might be granted by the court. The Court issued its order of January 21, 1947, awarding respondent Attorney Luna, in payment of his professional services, an aggregate sum of P28,000. Petitioner was able to pay P5,000 only, and upon his failure to pay the balance after several demands made upon him by respondent attorney, the latter filed an exparte motion for execution which was granted by the respondent Court. ISSUE: WON the court erred in fixing the amount of attorneys fees and issuing a writ of execution (YES) HELD: 1. 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." 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. Consequently, the order issued by the respondent court for the payment of the respondents fees and all subsequent orders implementing it, are null and void, as having been issued an excess of jurisdiction. 2. The order of execution is also null and void because 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. 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.

Quita vs Court of Appeals December 22, 1998 Fact of the Case: Fe D. Quita, the petitioner, and Arturo T. Padlan, both Filipinos, were married in the Philippines on May 18, 1941. They got divorce in San Francisco on July 23, 1954. Both of them remarried another person. Arturo remarried Bladina Dandan, the respondent herewith. They were blessed with six children. On April 16, 1972, when Arturo died, the trial court was set to declared as to who will be the intestate heirs. The trial court invoking Tenchavez vs Escano case held that the divorce acquired by the petitioner is not recognized in our country. Private respondent stressed that the citizenship of petitioner was relevant in the light of the ruling in Van Dorn v. Rommillo Jr that aliens who obtain divorce abroad are recognized in the Philippnes provided they are valid according to their national law. The petitioner herself answered that she was an

American citizen since 1954. Through the hearing she also stated that Arturo was a Filipino at the time she obtained the divorce. Implying the she was no longer a Filipino citizen. The Trial court disregarded the respondents statement. The net hereditary estate was ordered in favor the Fe D. Quita and Ruperto, the brother of Arturo. Blandina and the Padlan children moved for reconsideration. On February 15, 1988 partial reconsideration was granted declaring the Padlan children, with the exception of Alexis, entitled to one-half of the estate to the exclusion of Ruperto Padlan, and the other half to Fe Quita. Private respondent was not declared an heir for her marriage to Arturo was declared void since it was celebrated during the existence of his previous marriage to petitioner. Blandina and her children appeal to the Court of Appeals that the case was decided without a hearing in violation of the Rules of Court. Issue: (1) (2) Held: No. The marriage of Blandina and Arturo is not void. The citizenship of Fe D. Quita at the time of their divorce is relevant to this case. The divorce is valid here since she was already an alien at the time she obtained divorce, and such is valid in their countrys national law. Thus, Fe D. Quita is no longer recognized as a wife of Arturo. She cannot be the primary beneficiary or will be recognized as surviving spouse of Arturo. Whether or not Blandinas marriage to Arturo void ab initio. Whether or not Fe D. Quita be declared the primary beneficiary as surviving spouse of Arturo.

Pacioles v. Chuatoco-ching Facts: Miguelita died intestate, leaving real properties with an estimated value of P10.5 million, stock investments worth P518,783.00, bank deposits amounting to P6.54 million, and interests in certain businesses. She was survived by her husband, petitioner, and their two minor children. milio Pacioles husband of deceased Miguelita filed with the RTC a verified petition for the settlement of Miguelitas estate. Miguelitas mother, Miguela, filed an opposition, on the grounds that petitioner is incompetent and unfit to exercise the duties of an administrator; and the bulk of Miguelitas estate is composed of paraphernal properties. Petitioner moved to strike out respondents opposition, alleging that the latter has no direct and material interest in the estate. Respondent countered that she has direct and material interest in the estate because she gave half of her inherited properties to Miguelita on condition that both of them would undertake whatever business endeavor they decided to, in the capacity of business partners. She then nominated her son Emmanuel Ching to act as special administrator. The intestate court then issued an order appointing petitioner and Emmanuel as joint regular administrators of the estate and then declared petitioner and his two minor children as the only compulsory heirs of Miguelita. Petitioner then submitted to the intestate court an inventory of Miguelitas estate. Emmanuel did not submit an inventory. Petitioner filed with the intestate court an omnibus motion that an Order be issued directing the: 1) payment of estate taxes; 2) partition and distribution of the estate among the declared heirs; and 3) payment of attorneys fees. Respondent opposed on the ground that the partition and distribution of the estate is premature and precipitate, considering that there is yet no determination whether the properties specified in the inventory are conjugal, paraphernal or owned in a joint venture. Respondent claimed that she owns the bulk of Miguelitas estate as an heir and co-owner. She prayed that a hearing be scheduled. The intestate court allowed the payment of the estate taxes and attorneys fees but denied petitioners prayer for partition and distribution of the estate, holding that it is indeed premature. It also ordered that a hearing on oppositors claim as indicated in her opposition to the instant petition is necessary to determine whether the properties listed in the amended complaint filed by petitioner are entirely conjugal or the paraphernal properties of the deceased, or a co-ownership between the oppositor and the petitioner in their partnership venture. Petitioner questrioned this order but the MR was denied. The Petition for Certiorari with the CA. This is a Petition for Certiorari to the CA. Issue: Did the lower court acted with GADALEJ in ordering that a hearing be set to determine the ownership of the properties in an intestate procedding? Held: YES May a trial court, acting as an intestate court, hear and pass upon questions of ownership involving properties claimed to be part of the decedents estate?

Ratio:: The general rule is that the intestae court cannot hear and pass upon questions of ownership. However the intestae court may hear and pass upon questions of ownership provisionally and when merely incidentalif the purpose is to determine whether or not a property should be included in the inventory of he estate of the deceased. But this case does not fall under the above mentioned deviation from the general rule, thus the RTC acted with grave abuse of discretion in ordering that a hearing be set for determining the ownership of the properties in question. The facts of this case show that the inventorty is not disputed. In fact, in repondents Manifestation and Opposition, respondent expressly adopted the inventory prepared by petitioner. Respondent could have opposed petitioners inventory and sought the exclusion of the specific properties which she believed or considered to be hers. But instead of doing so, she expressly adopted the inventory, taking exception only to the low valuation placed on the real estate properties. Also, Emmanuel, respondents son and representative, did not submit his own inventory Obviously, respondents purpose here was not to obtain from the intestate court a ruling of what properties should or should not be included in the inventory. She wanted to secure from the intestate court a final determination of her claim of ownership over properties comprising the bulk of Miguelitas estate. Hence, respondents recourse is to file a separate action with a court of general jurisdiction. The intestate court is not the appropriate forum for the resolution of her adverse claim of ownership over properties ostensibly belonging to Miguelita's estate given that she had Torrens title over such properties. (Miguela cannot even determine in particular the properties she is claiming.