RULE 88 PAYMENT OF DEBTS OF THE ESTATE

ALDAMIZ V. CFI MINDORO, 85 PHIL 228 (1949)

ISSUE: WON the Court erred in issuing the order fixing the amount
of attorneys fees

HELD: Yes. The order of the respondent court issued on January

21,1948, fixing the amount of respondent attorney's fees is null
and void. 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 (Palileo vs.
Mendoza, G.R. No. 47106, 40 Off. Gaz. [8th Supp.], 132.) If the
judgment is rendered against the administrator and he pays, he
may include the fees so paid in his account to the court. (Uy Tioco
vs. Imperial, 53 Phil., 802.) 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." (Emphasis ours.) (Escueta vs. Sy
Juilliong, 5 Phil., 405.)
In the instance case, 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, and all subsequent orders implementing it,
are null and void, as having been issued an excess of jurisdiction.

The SC also held that the order of execution issued by the

court is 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, 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.

REQUEST
FOR
ASSISTANCE
RELATIVE
TO
SPECIAL
PROCEEDINGS NO. 28 PENDING AT REGIONAL TRIAL COURT
OF HIMAMAYLAN, NEGROS OCCIDENTAL, BRANCH 55,
PRESIDED BY JUDGE JOSE Y. AGUIRRE, JR. 355 SCRA 62
(2001)
FACTS: Complainant Constancia Amar states that she obtained a
favorable decision for wage differentials in a labor case before the
NLRC. A writ of execution was issued by the NLRC against the
Estate of Spouses Rubin. In relation thereto, in Special Proceedings
No. 28, respondent judge issued an order, dated 16 November
1993, directing the judicial administrator of the Estate of Spouses
Rubin to settle Amar's claim.
1. Complainant later filed a motion for the issuance of an
order of contempt against the judicial administrator,
Feliciano
Rubin,
for
not
heeding
the
court
order. Respondent judge failed to resolve the motion for
more than three years. Suspecting a possible collusion
between respondent judge and the judicial administrator,
complainant sought the assistance of the Office of the
Court Administrator.
2. A verified complaint was ultimately filed by Atty. Napoleon
Corral, counsel for complainant Amar, against respondent
judge. In the complaint, Atty. Corral, after reiterating the
foregoing settings, added that he likewise filed a motion to
order the sheriff to sell personal property or sell or
mortgage real property of the estate in order to allow the
settlement of Amar's claim but the motion also remained
unresolved by respondent judge.

RULE 88 PAYMENT OF DEBTS OF THE ESTATE

ISSUE: WON Judge Aguirre should be penalized for failing to rule
on the complainants motions
HELD: Yes. The motion to cite the judicial administrator for
contempt was never resolved by respondent judge. The
explanation that he could not grant the motion because the judicial
administrator was sickly certainly is no excuse. The motion to
require the sheriff to sell or mortgage the real properties of
the estate was also not resolved by respondent judge,
stating that to grant the motion would be contrary to
Section 3, Rule 88, of the Revised Rules of Court. If
respondent judge indeed felt so, then he should have
forthwith issued an order denying the motion instead of
allowing the motion to remain unresolved.
The Court has consistently impressed upon members of the
judiciary the need to resolve and decide cases promptly and
expeditiously under the time-honored precept that justice delayed
is justice denied. Every judge should act with dispatch and should
be careful, punctual, and observant in the performance of his
office. Failure to decide a case within the reglementary period
constitutes a violation of this mandate warranting the imposition of
administrative sanction on the defaulting judge.

BANCO FILIPINO SAVINGS & MORTGAGE BANK V. NLRC, 188

SCRA 700 (1990)
FACTS:
After petitioner was placed under receivership,
FORTUNATO M. DIZON Jr., who was then holding the position of
Executive Vice President and Chief Operating Officer of the bank,
filed with the liquidator a request for the payment to him of the
cash equivalent of his vacation and sick leave credits and
unexpended/unused reimbursable allowance.
1.

2.

3.

Dizon filed a complaint with the labor arbiter against the

bank for recovery of unpaid salary, the cash equivalent of
his accumulated vacation and sick leaves, termination pay
under Article 283 of the Labor Code and moral damages
and attorney's fees. LA ruled in favor of Dizon.
Petitioners assails the LAs decisions and resolution and
prays that they be declared null and void because the
assailed decisions directing the payment of the claims
outside of the liquidation process amount to an undue
preference in favor of a particular creditor.
Dizon countered that under Article 110 of the Labor Code
on unpaid wages of laborers are indeed preferred.

ISSUE: WON unpaid wages of laborers are indeed preferred

HELD: Yes. Art 110 Labor Code before its amendment by Republic
Act No. 6715 (March 2, 1989) reads as follows:

RULE 88 PAYMENT OF DEBTS OF THE ESTATE

ART. 110. Worker Preference in case of Bankruptcy In the event
of bankruptcy or liquidation of an employer's business, his workers
shall enjoy first preference as regards wages due them for services
rendered during the period prior to the bankruptcy or liquidation,
any provision of law to the contrary notwithstanding. Unpaid wages
shall be paid in full before other creditors may establish any claim
to a share in the assets of the employer.
In Republic v. Peralta, supra the majority of this Court was
of the opinion that the above quoted provision did not
upgrade the worker's claim as absolutely preferred credit.
The SC explained that the provision did not alter Articles
2241 and 2242 of the Civil Code so much so that creditors
with liens over a certain property are still given special
preference over the proceeds of that property. And it is
only after these specially preferred credits are satisfied
may the ordinary preferred credits enumerated in Article
2244 of the Civil Code be paid according to their order of

priority. The significance of Article 110 in the scheme of

concurrence and preference of credit is to raise the
worker's money claim into first priority under Article 2244.
(See also Development Bank of the Philippines v. NLRC,
G.R. Nos. 82763-64, March 19, 1990).