Chapter 4.

PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators (Administrator Pendete Lite)

Pacific Commercial Co. v. Mauricia Sotto as administratrix of the estate of Claro Ong [G.R. No. 10578. March 14, 1916]

FACTS: Plaintiff Pacific Commercial Company sold and delivered to the La Fortuna Bakery a merchandise amounting to P3, 303.75. There has been paid on this amount P1, 200.00, leaving a balance due of P2, 103.75. Claro Ong, the owner, sold the bakery to Mamerto Laudico, the latter in turn sold the bakery to Matias Ulbado, the purchasers assumed all the outstanding liabilities of the said property. Later, Claro Ong died and Mauricia Sotto was appointed as special administratix of the deceased estate. Consequently, the plaintiff presented its claim to the commissioners of Ongs estate for allowance. The claim was disallowed and the plaintiff appealed to the Court of First Instance where, after due trial, it obtained a judgment against the estate of Claro Ong for the amount claimed together with legal interest and the costs of the cause. From this judgment the defendant appealed contending that she is only a special administratrix of that property appointed for the only purpose of keeping in trust that bakery while the probate of the will of Claro Ong was pending and according to the provisions of section 661 of the Code of Civil Procedure which provides that a special administratrix shall not be liable to an action by a creditor, or pay any debts of the deceased. ISSUE: Whether or not an administrator pende lite or special administrator of the deceased estate is liable to pay the obligation the deceased? HELD: No. An action based on a claim against defendants testator cannot be defeated by the objection that a creditors suit against a special administrator is prohibited by section 661 of the Code of Civil Procedure when such objection is raised for the first time on appeal and it appears that naming the special administrator has not prejudiced the estate. However, where a final judgment is obtained by a creditor against the estate of a deceased person represented by a special administrator, such judgment must be satisfied by the regular administrator or executor out of the funds of the deceased estate. For the foregoing reasons, the judgment appealed from is affirmed.

TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators

Tomas Sison v. Leodegario Azarraga [G.R. No. 8470. March 19, 1915.]

FACTS: On April 27, 1911, Isidro Azarraga executed his final will and testament, in which he appointed his son Leodegario Azarraga, the herein appellant as the executor of his estate. In his Will, Leodegario will receive a certain number of carabaos and a legacy of P8, 115.72. He instituted as his sole and universal heirs his two grandchildren called Maria Felisa and Jesus, both surnamed Bellosillo y Azarraga. Thereafter, Defendant executor collected large sums of money belonging to the estate in his care and paid some debts against the same without the knowledge or prior approval of the court. Thus, Tomas Sison, guardian of the minor children of Bellosillo, presented to the competent court a motion praying that the said executor Leodegario Azarraga be cited to show cause why he should not be removed from his office, since by his illegal acts in collecting large sums of money belonging to the estate in his care and in paying them out without due authorization of the court, the said minor children, as universal heirs of the deceased, are in danger of losing their interests and claims in his estate, especially as the executor requests that the estate be declared insolvent. The court relieves him from office as executor of the property of the deceased. The executor alleges that he has claims against the estate under his care as owner and that the court committed an erroneous finding of directing him to deliver without due process of law to the new administrator all the lands, carabaos, and other property that he claims, along with the documents relating thereto, as well as to return the P8,000 which he paid to himself, and that after such delivery he present his claim to the property specified to the administrator so that it may be excluded from the inventory of the property left by the deceased. ISSUE: Whether or not the executor or administrator may lawfully and directly pay himself for claims he may have against the estate under his care? HELD: No, it is neither proper nor lawful for an executor or administrator of an estate to pay to himself claims he may have against the deceased and to take possession of property of the same to which he thinks he is entitled, without observing the procedure fixed by the law, for no legal provision included in chapter XXXII of the Code of Civil Procedure, which treats of the duties of executors and administrators, confers upon them any such authority. On the contrary, sections 686 et seq. of the said code provide that claims for the collection of debts against a testate or intestate succession must be presented to the committee of appraisal. The executor who alleges that he has any claim against the testate or intestate succession, whose property is in his care, must give notice thereof, in writing, to the court, according to section 697 of said code, so that a new special administrator may be appointed to administer the property of the decedent.

TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators (Regular Administrator)

B. E. Johannes, Carlos D'almeida, Ida Johannes, and J. E. Johannes, relators, vs. Judge George Harvey, and Alfredo Dalmeida [G.R. No. 18600, March 9, 1922.]

FACTS: Mrs. Carmen Theodora Johannes (Carmen D'Almeida), died intestate in Singapore. Of her immediate family there remained the husband, B. E. Johannes, the brothers, Frederick Charles D'Almeida and Alfred D'Almeida, and the sister, Ida D'Almeida Johannes. They were residents of Singapore, except Alfred. The husband was named the administrator of the property of the deceased wife situated within the jurisdiction of the Supreme Court of the Straits Settlements, in Singapore. On the other hand, the brother Alfred was, on his petition, appointed administrator of the Manila estate of the deceased. The relator's contention is that the Honorable Harvey, as judge of First Instance of the City of Manila, has acted in excess of his jurisdiction in appointing Alfred as administrator of the funds of the estate on deposit in the Philippines, and that an administration in the jurisdiction is unnecessary. Accordingly, relators pray the court to annul the said appointment and to issue an order directing respondent Judge to have placed to the credit of B. E. Johannes as administrator all of the funds of the deceased, now on deposit and subject to the order of the court plus damages. ISSUE: Whether or not in the appointment of regular administrator the surviving spouse is given first preference and whether it is often necessary to have more than one administration of an estate? HELD: In the appointment of a regular administrator it is almost a universal rule to give the surviving spouse a preference, unless for strong reasons it is deemed advisable to name someone else. Moreover, non-residence is a factor to be considered in determining the propriety of the appointment because ancillary letters should ordinarily be granted to the domiciliary representative. Thus, in the absence of the express statutory requirement the court may in its discretion appoint some other person. When a person dies intestate owning property in the country of his domicile as well as in a foreign country, administration is had in both countries. That which is granted in the jurisdiction of decedent's last domicile is termed the principal administration, while any other administration is termed the ancillary administration. The reason for the latter is because a grant of administration does not ex proprio vigore have any effect beyond the limits of the country in which it is granted. Hence, an administrator appointed in a foreign state has no authority in the United States. The principal administration in this instance is that at the domicile of the late Carmen Theodora Johannes in Singapore, Straits Settlements. What is sought in the Philippine Islands is an ancillary administration subsidiary to the domiciliary administration. The proper course of procedure would be for the ancillary administrator to pay the claims of creditors, if there be any, settle the accounts, and remit the surplus to the domiciliary jurisdiction, for distribution among the next of kin. Thus, the Court of First Instance has not acted in excess of its jurisdiction.

TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators (Regular Administrator)

Rosario Esler Vda. de Tad-Y, and Jose E. Tad-Y vs. Maria TAD-Y, and Manuel Locsin G.R. No. L-20902, October 9, 1923.

FATCS: On December 26, 1922, Vicente Tad-Y died leaving a Will, but said document cannot be admitted to probate as a Will because in its execution the solemnities required by the law were not complied with. Thus, the court orders an intestate estate proceeding for the settlement of the estate of the deceased Vicente Tad-Y, and appointed Mr. Manuel Locsin as special administrator, he being one of the persons named by the testator as executor in his will which cannot be probated in accordance with law. From this order an appeal was taken by Rosario Esler Vda. de Tad-Y and the guardian ad litem of Jose E. Tad-Y alleging that the trial court erred in appointing Manuel Locsin as administrator in this proceeding without the formers consent and thereby violating the order of preference for appointment of regular administrator. ISSUE: Whether or not the court violates the order of preference for the appointment of regular administrator? HELD: No. The appeal is groundless. If the administrator Manuel Locsin was appointed by the court as special administrator, section 660 of the Code of Civil Procedure does not permit any appeal from the appointment of said administrator. If Manuel Locsin was appointed by the trial court as administrator of the intestate estate in accordance with section 642 of Act No. 190, the trial court had discretion to issue the letters of administrator to any of the persons mentioned in said section, and unless there has been an abuse of discretion, which does not appear to have been committed in the present case, the appointment shall not be revoked on appeal. Thus, the order of preference set forth in the law may be disregarded by the probate court.

TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators (End of Authority of Administrator)

Mauricio Cruz & Co., Inc., vs. Judge Marcelino R. Montemayor G.R. No. 45174, September 5, 1936.

FACTS: Jose Soriano was appointed as the judicial administrator in the intestate proceeding of Antero Soriano. Said administrator with the approval of the probate court sold all the interest and participation of the intestate estate in the judgment rendered in civil case No. 45969 against Cruz & Co., Inc., consisting of a certain sum of money to Arturo Soriano who later sold it to Mauricio Cruz. Thereafter, Mauricio Cruz & Co., Inc., filed a motion in civil case No. 45969 praying the court to declare that the judgment rendered in said case had been satisfied in its entirety and to order the final filing thereof. Pending the resolution of said motion, the administrator Jose Soriano, as plaintiff, filed a petition in said case, praying for the issuance of an alias execution in favor of the plaintiff alleging as a ground thereof, that all interest or participation of the intestate estate sold at public auction and acquired by Arturo A. Soriano consisted in the sum of money was not yet fully satisfied. The court approved it and as a consequence the probate court, issued an order in the special proceeding, adjudicating the sums of money ordered to be collected by means of alias execution from the then defendant Mauricio Cruz & Co., Inc., and directing the filing of the record of the intestate proceeding as finally terminated. In its petition, the petitioner contends that the court had no jurisdiction to order the issuance of the alias execution because once the record of the intestate proceeding was filed, the judicial administrator no longer had personality to appear as such, and because the court no longer had the power to direct the petitioner to pay the amounts of money specified in the order on the ground that the entire amount of the judgment was already paid by the assignment and sale made to it by Arturo A. Soriano. ISSUE: Whether or not the authority of the judicial administrator ceased to exist upon the closing of the settlement of the intestate proceeding? HELD: Yes. When the probate court ordered the filing of the record as finally terminated, it should be understood and assumed that all the obligations of the intestate estate had already been paid and the adjudication, distribution and delivery of the estate to the heirs had been ordered. It should likewise be assumed that once the record of the intestate proceeding is filed as terminated, the probate court had already relieved the administrator of his obligations. Under these circumstances, it is obvious that when the administrator filed the motion asking for the issuance of an alias execution, he no longer had such legal capacity and was a stranger in said case. In view of this, it appears clear that the court, in granting the motion and in issuing the order in question, acted without jurisdiction over the person of the then plaintiff, the judicial administrator. Accordingly, Nepomuceno and Macatagay were the assignee of that part of the judgment not yet executed, and, as such, both or any of them would have been entitled to appear in the name of the administrator to ask for the same remedy; but this court cannot arrive at this conclusion in view of the fact that the pleading filed appears to have been presented by the judicial administrator who already ceased to exist. TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

Section 4. Executors or Administrators (Principal Duty of Administrator)

Estate of Amadeo Matute Olave v. Judge Manases Reyes G.R. No. L-29407 July 29, 1983

FACTS: Southwest Agricultural Marketing Corporation (SAMCO), filed Civil Case No. 4623 with the respondent Court against respondents, Carlos V. Matute and Matias S. Matute, in their capacities as co-administrators of the estate of Amadeo Matute Olave, for the collection of an alleged indebtedness, the parties herein thereafter made an Amicable Settlement in which respondent court approved, whereby the property of the estate covered by OCT No. 0-27 was conveyed and ceded to SAMCO as payment of its claim. However, it was opposed by the other parties alleging that the said Order of respondent court will operate as a judgment that "conveys illegally and unfairly, the property of petitioner-estate without the requisite approval of the probate court, which has the sole jurisdiction to convey this property in custodia legis of the estate. Respondent SAMCO and respondent judge, contend that the Amicable Settlement need not be approved by the probate court, the same having been entered into in another independent action and in another court of co-equal rank. ISSUE: Whether or not the administrator may validly enter into the amicable settlement without prior approval of the probate court? HELD: It is clear that the main purpose of private respondent SAMCO in filing Civil Case No. 4623 with respondent Court was to secure a money judgment against the estate which eventually ended in the conveyance to SAMCO of more than twenty-nine (29) hectares of land belonging to the estate of the deceased Amadeo Matute Olave in payment of its claim, without prior authority of the probate court which has the exclusive jurisdiction over the estate of the decedent. It was a mistake on the part of respondent court to have given due coursed to Civil Case No. 4623; much less issue the questioned Order, approving the Amicable Settlement. The claim of SAMCO being one arising from a contract may be pursued only by filing the same in the administration proceedings for the settlement of the estate of the deceased. Section 1, Rule 73 of the Rules of Court, expressly provides that "the court first taking cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts." The law is clear that where the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the probate court.

TAHSIN, MARWAN A. LLB. III-A

Chapter 4. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS Section 4. Executors or Administrators (Liability for Attorneys Fees)

Salonga Hernandez & Allado, v. Olivia Sengco Pascual G.R. No. 127165, May 2, 2006.

FACTS: Doa Adela died, leaving behind a last will and testament, designating Olivia Pascual as the executrix, as well as the principal beneficiary of her estate. The will also bequeathed several legacies and devises to several individuals and institutions. Olivia Pascual then engaged the services of petitioner in connection with the settlement of the estate of Doa Adela. Their agreement as to the professional fees due to petitioner is contained in a letter, signed by Atty. Esteban Salonga in behalf of petitioner and Olivia Pascual. It is stipulated therein, among others, that the final professional fee "shall be 3% of the total gross estate as well as the fruits thereof based on the court approved inventory of the estate. The 3% final fee shall be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate. The Probate Court rendered a Decision allowing probate of the Last Will and Testament of Doa Adela. Letters testamentary were issued to Olivia Pascual. Thereafter, petitioner filed a Motion to Annotate Attorney's Lien on Properties of the Estate of Doa Adela Vda. De Pascua, pursuant to the retainer agreement signed by and between petitioner and Olivia S. Pascual. Thus, the Intestate Court awarded attorney's fees to Atty. Jesus I. Santos, equivalent to 15% of the three-fourths (3/4) share of the estate of Doa Adela. Petitioner then filed a Motion for Writ of Execution for the partial execution of petitioner's attorney's lien. However, Olivia Pascual, filed her opposition to the motion for the issuance of a writ of execution on attorney's fees. She argued that a lawyer of an administrator or executor should charge the individual client, not the estate, for professional fees. Olivia Pascual also claimed, that the counsel claiming attorney's fees should give sufficient notice to all interested parties to the estate, and that such was not accomplished by petitioner considering that no notices were given to the several legatees designated in Doa Adela's will. The Probate Court issued the assailed order denying the motion for writ of execution in view of the fact that the probate proceeding is not yet completed and having been prematurely filed. The appellate court noted that the attorney's lien issued by the Probate Court was chargeable only to the share of Olivia Pascual, and not to the estate of Doa Adela, since it was Olivia who entered into the agreement with petitioner for the payment of attorney's fees in connection with the settlement of the estate of Doa Adela. Petitioner sought to reconsider the Decision but it was denied. Hence, this petition. ISSUE: Whether or not a lawyer who renders legal services to the executor or administrator of an estate can claim attorney's fees directly against the estate instead of the executor or administrator? HELD: As a general rule, it is the executor or administrator who is primarily liable for attorney's fees due to the lawyer who rendered legal services for the executor or administrator in relation to the settlement of the estate. The executor or administrator may seek reimbursement from the estate for the sums paid in attorney's fees if it can be TAHSIN, MARWAN A. LLB. III-A

shown that the services of the lawyer redounded to the benefit of the estate. However, if the executor or administrator refuses to pay the attorney's fees, the lawyer has two modes of recourse. First, the lawyer may file an action against the executor or administrator, but in his/her personal capacity and not as administrator or executor. Second, the lawyer may file a petition in the testate or intestate proceedings, asking the court to direct the payment of attorney's fees as an expense of administration. If the second mode is resorted to, it is essential that notice to all the heirs and interested parties be made so as to enable these persons to inquire into the value of the services of the lawyer and on the necessity of his employment. However, in order not to unduly protract further the settlement of the estate of Doa Adela, the Court deems it proper instead to mandate the Probate Court to treat the Motion for Writ of Immediate Execution as a petition seeking a court order to direct the payment of attorney's fees as expenses of administration, but subject to the condition that petitioner give due notice to the other designated devisees and legatees so designated in the will of the claim prior to the requisite hearing thereon. The requisite notice to the heirs, devisees, and legatees is anchored on the constitutional principle that no person shall be deprived of property without due process of law. Failure of the lawyer to give notice to the heirs, devisees, and legatees of his claim for attorneys fees renders the claim inefficacious.

TAHSIN, MARWAN A. LLB. III-A